MANGAL KUSHA PATIL, THANE V. ITO WD 4(2), THANE

ITA 2424/MUM/2012

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 0791 (ITAT-MUMBAI)
• Duration Of Justice: 5 year(s) 9 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-01-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 25-10-2016
• Assessment Year: 2007-2008
• Appeal Filed On: 12-04-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUMAN KUMAR
• Keywords: Unexplained cash credit; Opportunity of being heard
• Section: 143(3); 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH B, MUMBAI BEFORE SHRI G.S. PANNU, ACCOUNTANT MEMBER AND SHRI RAM LAL NEGI , JUDICIAL MEMBER ITA NO. 2424/MUM/2012 : A.Y : 2007 - 08 SHRI MANGAL KUSHA PATIL 303, MAMTA TOWER, P.P. MARG, PUSHPA NAGAR, VIRAR WEST, THANE 401 303 (APPELLANT) PAN : AFRPP8226K VS. ITO, WARD - 4(2) THANE (RESPONDENT) APPELLANT BY : MS. USHA DALAL RESPONDENT BY : SHRI SUMAN KUMAR DATE OF HEARING : 19/01/2018 DATE OF PRONOUNCEMENT : 19/01/2018 O R D E R PER G.S. PANNU , AM : THE CAPTIONED APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF CIT(A) - II , MUMBAI DATED 28.11.2011 , PERTAINING TO THE ASSESSMENT YEAR 2007 - 08 , WHICH IN TURN HAS ARISEN FROM THE ORDER PASSED BY THE ASSESSING OFFICER, THANE DATED 30.10.2009 UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT). 2. IN THIS APPEAL, ASSESSEE HAS CHALLENGED THE ADDITION S OF RS.2,65,860/ - , RS.6,85,000/ - AND RS.66,505/ - SUSTAINED BY THE CIT(A) ON ACCOUNT OF 2 ITA NO. 2424/MUM/2012 SHRI MANGAL KUSHA PATIL UNEXPLAINED SUNDRY CREDITORS, UNEXPLAINED TRADE ADVANCES AND UNEXPLAINED CASH DEPOSITS IN THE BANK RESPECTIVELY. 3. BRIEFLY PUT, THE RELEVANT FACTS ARE THAT THE ASSESSEE - INDIVIDUAL IS ENGAGED IN THE BUSINESS OF SUPPLY OF BRICKS AND RIVER SAND THROUGH HIS PROPRIETARY CONCERN, M/S. JAI JIVDANI ENTERPRISES. THE RETURN OF INCOME FOR THE ASSESSMENT YEAR UNDER CONSIDERATION WAS FILED BY THE ASSESSEE DECLARING A TOTAL INCOME OF RS.1,95,310/ - . IN THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTED THAT IN THE BALANCE - SHEET, ASSESSEE HAD REFLECTED SUNDRY CREDITORS OF RS.2,65,860/ - AND TRADE ADVANCES OF RS.6,85,000/ - . ASSESSEE WAS REQUIRED TO FURNISH THE CONFIRMATIONS FROM THE PARTIES, WHICH HE FAILED TO PRODUCE. ACCORDINGLY, THE ASSESSING OFFICER TREATED THE SAID SUMS AS UNEXPLAINED CASH CREDITS U/S 68 OF THE ACT. SIMILARLY, THE ASSESSING OFFICER NOTED THAT ASSESSEE HAD SHOWN SALES RECEIPT OF RS.10,08,695/ - WHEREAS THE CASH DEPOSITS IN THE BANK TOTALLED TO RS.10,75,200/ - . ACCORDINGLY, THE EXCESS DEPOSIT OF RS.66,505/ - WAS TREATED AS UNEXPLAINED AND ADDED TO THE TOTAL INCOME. BEFORE THE CIT(A), ASSESSEE EXPLAINED THAT THE BALANCES OUTSTANDING IN THE SUNDRY CREDITORS ACCOUNT WERE PAID OFF IN THE SUBSEQUENT PERIOD AND ARE REFLECTED IN THE RECORDS OF THE RELEVANT YEAR. SIMILAR WAS THE EXPLANATION WITH REGARD TO THE TRADE ADVANCES RECEIVED, WHICH ACCORDING TO THE ASSESSEE WERE ADJUSTED AGAINST THE FUTURE DELIVERIES AND THE CREDIT WAS GIVEN IN THE SUBSEQUENT SALES BILLS RAISED ON THE CUSTOMERS. THE AS SESSEE ALSO POINTED OUT THAT IN TERMS OF THE BOOKS OF ACCOUNT MAINTAINED, THERE WAS NO DIFFERENCE IN CASH BALANCE AND, THEREFORE, NO AMOUNT COULD BE ADDED AS UNEXPLAINED CASH. ALL THESE EXPLANATIONS FURNISHED BY THE ASSESSEE HAVE NOT BEEN ACCEPTED BY THE CIT(A) AND INSTEAD, HE HAS SUSTAINED THE ADDITIONS FOR THE REASONS ASSIGNED BY THE ASSESSING 3 ITA NO. 2424/MUM/2012 SHRI MANGAL KUSHA PATIL OFFICER. NOT BEING SATISFIED WITH THE ORDER OF THE CIT(A), ASSESSEE IS IN FURTHER APPEAL BEFORE US. 4. BEFORE US, THE LEARNED REPRESENTATIVE FOR THE ASSESSEE VEHEMENTLY POINTED OUT THAT ASSESSEE WAS A MARGINAL BUSINESSMAN INASMUCH AS HIS BUSINESS HAS SINCE STOPPED DUE TO ENVIRONMENTAL ISSUES. IN ANY CASE, IT IS SOUGHT TO BE POINTED OUT THAT ASSESSEE COULD NOT FURNISH THE APPROPRIATE MATERIAL BEFORE THE LOWER A UTHORITIES, BUT IF AN OPPORTUNITY IS ALLOWED, ASSESSEE WOULD MAKE ALL ENDEAVOUR AND SHALL BE IN A POSITION TO SUPPORT HIS RETURN OF INCOME ON ALL THE AFORESAID THREE POINTS. 5. ON THE OTHER HAND, THE LD. DR HAS RELIED UPON THE ORDERS OF THE AUTHORITIES BE LOW, WHICH WE HAVE ALREADY ADVERTED TO IN THE EARLIER PARAS. 6. HAVING CONSIDERED THE RIVAL SUBMISSIONS, IN OUR VIEW, THE ASSESSMENT HAS BEEN COMPLETED PRIMARILY NOTICING THE DEFAULT OF THE ASSESSEE TO PRODUCE THE REQUIRED CONFIRMATIONS FROM THE SUNDRY CR EDITORS AND THE TRADE ADVANCES RECEIVED. BEFORE US, A PLEA HAS BEEN RAISED THAT THE NECESSARY INFORMATION IS NOW AVAILABLE WITH THE ASSESSEE AND THAT HE IS IN A POSITION TO PRODUCE THE SAME. IT HAS BEEN POINTED OUT THAT THE ASSESSEE IS A SMALL - TIME BUSIN ESSMAN AND THAT HIS BUSINESS OF SAND MINING, IN ANY CASE, HAS STOPPED DUE TO ENVIRONMENTAL ISSUES. IN SUCH A SITUATION, IT IS QUITE POSSIBLE THAT ASSESSEE MAY NOT BE IN A POSITION TO ACCESS THE PERSONS INVOLVED IN THE BUSINESS READILY , AND THUS HIS FAILUR E TO PROVIDE THE REQUISITE MATERIAL TO THE ASSESSING OFFICER . CONSIDERING THE ENTIRETY OF CIRCUMSTANCES, IN OUR VIEW, IT WOULD BE IN THE FITNESS OF THINGS THAT THE MATTER IS RESTORED BACK TO THE FILE OF THE ASSESSING OFFICER FOR ADJUDICATION AFRESH. NOTA BLY, EVEN WITH REGARD 4 ITA NO. 2424/MUM/2012 SHRI MANGAL KUSHA PATIL TO THE ADDITION ON ACCOUNT OF EXCESS CASH DEPOSIT, IT IS SEEN THAT ASSESSEE IS MAINTAINING THE BOOKS OF ACCOUNT AND, THEREFORE, THE ADDITION, IF ANY, ON THIS COUNT SHALL HAVE TO BE MADE AFTER EXAMINATION OF THE BOOKS OF ACCOUNT ONLY. IN THE REMAND PROCEEDINGS, THE ASSESSING OFFICER IS DIRECTED TO ALLOW THE ASSESSEE A REASONABLE OPPORTUNITY OF BEING HEARD WITH RESPECT TO THE AFORESAID ISSUES AND ONLY THEREAFTER, PASS AN ORDER AS PER LAW. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES, AS ABOVE. THE ABOVE DECISION WAS PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF BOTH THE PARTIES AT THE CONCLUSION OF THE HEARING ON 19 TH JANUARY , 201 8 . SD/ - SD/ - ( RAM LAL NEGI ) JUDICIAL MEMBER (G.S. PANNU) ACCOUNTANT MEMBER MUMBAI, DATE : 1 9 T H JANUARY , 201 8 *SSL* COPY TO : 1) THE APPELLANT 2) THE RESPONDENT 3) THE CIT(A) CONCERNED 4) THE CIT CONCERNED 5) THE D.R, B BENCH, MUMBAI 6) GUARD FILE BY ORDER DY./ASSTT. REGISTRAR I.T.A.T, MUMBAI