ITO-WARD-2(1), Nagpur V. SMT. SHADAAB MUSHEER AHAMED, Nagpur

ITA 240/NAG/2014

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 1633 (ITAT-NAGPUR)
• Duration Of Justice: 1 year(s) 4 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-09-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 23-04-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NARENDRA KANE
• Keywords: Business income; Source of fund
• Section: 143(3); 68

Judgement Text

1 ITA NO. 240/NAG/2014 IN THE INCOME TAX APPELLATE TRIBUNAL, NAGPUR BENCH, NAGPUR BEFORE SHRI MUKUL K. SHRAWAT, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER. I.T.A. NO. 240 /NAG/2014 ASSESSMENT YEAR : 2009 - 10.. THE INCOME - TAX OFFICER, SMT. SHADAAB MUSHEER AHAMED, WARD - 2(1), NAGPUR. VS. FLAT NO. 106, QUDRAT PLAZA, JAFAR NAGAR, NA GPUR. PAN ADJPA6329E APPELLANT. RESPONDENT. APPELLANT BY : SHRI NARENDRA KANE. RESPONDENT BY : SHRI ABHAY AGRAWAL. DATE OF HEARING : 2 6 - 08 - 2015 DATE OF PRONOUNCEMENT : 11 TH SEPT., 2015 O R D E R PER MUKUL K. SHRAWAT, J.M. . THIS IS AN APPEAL FILED BY THE REVENUE ARISING FROM THE ORDER OF LEARNED CIT(APPEALS) - I, NAGPUR DATED 20 TH FEBRUARY, 2015. THE SOLITARY GROUND RAISED IS REPRODUCED BELOW : WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE CIT(A) WAS JUSTIFIED IN HOLDING THAT THE CASH DEPOSITS IN THE BANK ACCOUNT WERE OUT OF ASSESSEES BUSINESS RECEIPTS AND IN APPLYING THE PROVISIONS OF SECTION 44AF OF THE I.T. ACT, DIRECTING THE AO TO ADOPT THE TAXABLE INCOME @5% ON THE CASH CREDITS OF ` 16,00,530/ - . 2. VIDE AN ORDER U/S 143(3) DATED 31 ST MARCH, 2009 IT WAS NOTICED BY THE AO THAT THE ASSESSEE HAD DEPOSITED IN TIRUPATI COOPERATIVE BANK AN AMOUNT OF ` 2 ITA NO. 240/NAG/2014 16,00,530/ - ON VARIOUS DATES. THE EXPLANATION OF THE ASSESSEE WAS THAT THE ASSESSEE IS DERIVING INCOME FROM BUSINESS OF STITCHING OF CLOTH RUNNING UNDER THE NAME AND STYLE M/S JEESA BOUTIQUE. THE AO WAS NOT CONVINCED THAT T HE SAID HUGE AMOUNT COULD HAVE BEEN DEPOSITED OUT OF HER BUSINESS ACTIVITY, THEREFORE, THE ENTIRE AMOUNT WAS TAXED BY INVOKING THE PROVISIONS OF SECTION 68 OF I.T. ACT. 3. WHEN THE MATTER WAS CARRIED BEFORE THE FIRST APPELLATE AUTHORITY, LEARNED CIT(APPEAL S) HAS PARTLY ALLOWED THE GROUND BY RESTRICTING THE ADDITION AT THE RATE OF 5% OF THE TOTAL IMPUGNED DEPOSITS TAXED BY THE AO. ACCORDING TO THE LEARNED CIT(APPEALS), ALTHOUGH THE ASSESSEE WAS RUNNING A BOUTIQUE ON SMALL SCALE BASIS BUT THERE WAS NOTHING ON RECORD THAT THERE WAS OTHER RESOURCES OF INCOME OTHER THAN THE STITCHING BUSINESS. LEARNED CIT(APPEALS) HAS NOT RULED OUT THE POSSIBILITY OF DEPOSITS AND WITHDRAWALS FROM THE BUSINESS ACTIVITY OF THE ASSESSEE. HOWEVER, IN HIS OPINION, 5% OF THOSE RECEIPTS WOULD MEET THE ENDS OF JUSTICE, HENCE RESTRICTED THE TOTAL ADDITION UPTO ` 80,027/ - . NOW THE REVENUE IS IN APPEAL. 4. FROM THE SIDE OF THE R EVENUE, LEARNED D.R., MR. NARENDRA MANE APPEARED AND SUPPORTED THE ACTION OF THE AO. ON THE OTHER HAND, FROM THE SIDE OF THE RESPONDENT - ASSESSEE, LEARNED A.R., MR. ABHAY AGRAWAL HAS SUPPORTED THE ORDER OF LEARNED CIT(APPEALS) AND INFORMED THAT THE SAME WAS ACCEPTED BY THE ASSESSEE WITHOUT FILING ANY FURTHER APPEAL. RELIANCE WAS PLACED ON THE DECISION IN THE CASE OF C IT VS. PRADEEP SHANTILAL PATEL 221 TAXMAN 436 (GUJARAT HC) AND GOKALBHAI MOHAN BHAI AJANI VS. ITO 39 CCH 292 (RAJKOT ITAT. 5. HAVING HEARD THE SUBMISSIONS OF BOTH THE SIDES AND CONSIDERING THE DISPUTE TRIVIAL IN NATURE, WE HEREBY UPHOLD THE VIEW OF LEARNED CIT(APPEALS). FOR THIS PURPOSE WE ALSO PLACE RELIANCE ON THE DECISION OF ITAT, RAJKOT BENCH PRONOUNCED IN THE CASE OF GOKALBHAI MOHANBHAI AJANI 39 CCH 292 WHEREIN IT WAS EXPRESSED 3 ITA NO. 240/NAG/2014 THAT ONLY 5% OF THE TOTAL BUSINESS TRANSACTION COULD BE REASONABLE CONSIDERI NG THE EXPLANATION OF THE ASSESSEE. EVEN THE DECISION OF HONBLE GUJARAT HIGH COURT PRONOUNCED IN THE CASE OF PRADEEP SHANTILAL PATEL (SUPRA) IS WORTH MENTIONING SO AS TO HOLD THAT NO INTERFERENCE IS REQUIRED IN ESTIMATION OF LEARNED CIT(APPEALS) ON THE G IVEN FACTS OF THE CASE. RESULTANTLY, GROUND RAISED BY THE REVENUE IS DISMISSED. 6. IN THE RESULT, REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 11 TH DAY OF SEPT., 2015. SD/ SD/ (SHAMIM YAHYA) (MUKUL K. SHRAWAT) (ACCOUNTANT MEMBER. JUDICIAL MEMBER NAGPUR, DATED: 11 TH SEPT. 2015. COPY OF ORDER FORWARDED TO : 1. THE ASSESSEE. 2. REVENUE. 3. THE CIT(A) 4. THE CIT, NAGPUR. 5. THE D.R., ITAT, NAGPUR. 6. GUARD FILE. TRUE COPY. BY ORDER WAKODE ASSISTANT REGISTRAR, ITAT, NAGPUR