ARUN ABAJI BHADARE, MUMBAI V. ITO 16(2)(4),

ITA 2509/MUM/2014

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 1410 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 11 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-04-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 19-01-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 15-04-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S N MISHRA
• Assessee Lawyers: RUPALI ARUN BHANDARE
• Keywords: Additional evidence
• Section: 142(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH A, MUMBAI BEFORE SHRI RAJENDRA, ACCOUNTANT MEMBER AND SHRI SANJAY GARG, JUDICIAL MEMBER ITA NO.2509/M/2014 ASSESSMENT YEAR: 2009-10) SHRI ARUN ABAJI BHANDARE, ROOM NO.29, 1 ST FLOOR, NEW HANUMAN BLDG, SHAMRAO VITHAL MARG, MUMBAI PAN: AJDPB7544G / VS. ITO 16(2)(4), MATRUMANDIR, MUMBAI ( / APPELLANT) ( /RESPONDENT) PRESENT FOR: ASSESSEE BY : SMT RUPALI ARUN BHANDARE REVENUE BY : SHRI S.N. MISHRA, D.R. / DATE OF HEARING : 06.02.2017 / DATE OF PRONOUNCEMENT : 05.04.2017 / O R D E R PER SANJAY GARG, JUDICIAL MEMBER: THE PRESENT APPEAL HAS BEEN PREFERRED BY THE ASSES SEE AGAINST THE ORDER DATED 28.01.2014 OF THE COMMISSIONER OF INCOME TAX (APPEALS) [HEREINAFTER REFERRED TO AS THE CIT(A)] RELEVANT TO ASSESSMENT Y EAR 2009-10. THE ASSESSEE, SINCE DECEASED, NOW THIS APPEAL HAS BEEN REPRESENTE D BY HIS LEGAL REPRESENTATIVE/WIFE SMT. RUPALI ARUN BHANDARE. 2. THE ASSESSEE IN THIS APPEAL IS AGGRIEVED AGAINST THE CONFIRMATION OF ADDITION OF RS.15,59,178/- BY THE LD. CIT(A) BEING CASH DEPOSITED IN BANK ACCOUNT HOLDING THE SAME AS INCOME FROM UNDISCLOSE D SOURCES. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE BEING AN INDIVIDUAL HAD FILED RETURN OF INCOME ON 08.07.10 SHOWING TOTAL IN COME OF RS.1,84,430/-. THE CASE WAS PICKED UP FOR SCRUTINY AND NOTICE UNDER SE CTION 142(1) OF THE INCOME ITA NO.2509/M/2014 SHRI ARUN ABAJI BHANDARE 2 TAX ACT WAS ISSUED TO THE ASSESSEE WHICH WAS NOT CO MPLIED WITH. THE ASSESSING OFFICER (HEREINAFTER REFERRED TO AS THE A O) NOTED THAT AS PER THE AIR INFORMATION CASH DEPOSITS OF RS.27,62,400/- AND RS. 13,77,550/- WERE MADE IN THE BANK ACCOUNT OF THE ASSESSEE DURING THE YEAR UN DER CONSIDERATION. THE AO FURTHER NOTED THAT THE ASSESSEE HAD MENTIONED HIS B USINESS AS SERVICE SECTOR AND THAT IT WAS A NO ACCOUNTS CASE. SINCE THE ASSE SSEE DID NOT COMPLY WITH THE NOTICE ISSUED AND DID NOT COME FORWARD TO DISCLOSE THE SOURCE OF DEPOSITS, HENCE THE AO TREATED THAT THE SAID DEPOSITS WERE TH E INCOME OF THE ASSESSEE FROM UNDISCLOSED SOURCES. HE, THEREFORE, MADE THE ADDITION OF THE ABOVE AMOUNT OF RS.41,39,950/- (RS.13,77,550/- + RS.27,62 ,400/-) INTO THE INCOME OF THE ASSESSEE. BEING AGGRIEVED BY THE ABOVE ORDER OF THE AO, THE ASSESSEE PREFERRED APPEAL BEFORE THE LD. CIT(A). 3. IN APPEAL BEFORE THE LD. CIT(A), THE ASSESSEE PL EADED THAT THE NOTICES RECEIVED BY THE ASSESSEE WERE HANDED OVER BY HIM TO HIS CONSULTANT FOR REPRESENTING THE CASE BEFORE THE INCOME TAX OFFICER . HOWEVER, THE SAID CONSULTANT DID NOT APPEAR BEFORE THE AO AND THE ASS ESSEE ALSO WAS NOT AWARE OF THIS FACT, HENCE THE NECESSARY DETAILS/EVIDENCES CO ULD NOT BE FURNISHED BEFORE THE AO. THE ASSESSEE DURING THE APPELLATE PROCEEDI NGS BEFORE THE LD. CIT(A) FURNISHED THE ADDITIONAL EVIDENCES UNDER RULE 46A O F THE INCOME TAX RULES AND SUBMITTED THAT THE ASSESSEE WAS A SMALL BROKER IN SECOND HAND CARS. HIS MAJOR CLIENTS WERE OUT STATIONED. HIS SUB AGENTS W ERE ALSO OUT OF MUMBAI. THE ASSESSEE WOULD DERIVE INFORMATION REGARDING THE SECOND HAND CARS AVAILABLE FOR SALE WITH THE PARTIES AT MUMBAI. THE ASSESSEE WOULD FURTHER PASS ON THAT INFORMATION TO HIS SUB AGENTS WHO WOULD CON TACT THE BUYERS, WHO WOULD DEPOSIT CASH FROM THE SAID PROSPECTIVE BUYERS INTO THE BANK ACCOUNT OF THE ASSESSEE AND THEREAFTER THE ASSESSEE WOULD PROC EED TO FINALIZE THE DEED. IF THE DEAL IS FINALIZED, THE ASSESSEE WOULD ISSUE CHE QUE/PAY ORDER IN FAVOUR OF THE SELLER AND TAKE HIS COMMISSION OUT OF THE DEAL. HO WEVER, IF THE DEAL IS NOT FINALIZED, THE ASSESSEE WOULD RETURN THE MONEY DEPO SITED IN HIS BANK ACCOUNT ITA NO.2509/M/2014 SHRI ARUN ABAJI BHANDARE 3 BY THE PROSPECTIVE BUYERS/SUB AGENTS. SINCE THE MA JOR CLIENTS OF THE ASSESSEE WERE PLACED AT KOLHAPUR, HENCE MOST OF THE AMOUNTS WERE DEPOSITED IN KOLHAPUR BRANCH OF THE BANK. THE ASSESSEE ALSO FUR NISHED CONFIRMATIONS FROM THE BUYERS, SUB AGENTS AND SELLERS IN SUPPORT OF HI S CONTENTIONS. IT WAS FURTHER SUBMITTED THAT THE ASSESSEE DID NOT MAINTAIN BOOKS OF THE ACCOUNTS. A STATEMENT SHOWING THE DETAILS OF AMOUNT DEPOSITED I N BANK ACCOUNT BY CAR PURCHASERS AND THE AMOUNT GIVEN TO SELLERS WAS ALSO SUBMITTED. THE LD. CIT(A) CALLED A REMAND REPORT FROM THE AO IN RESPEC T OF THE ABOVE SUBMISSIONS. AFTER CONSIDERING THE REMAND REPORT, THE LD. CIT(A) HELD THAT THE AO HAD NOT PROPERLY EXAMINED THE EVIDENCES AND HAD SUMMARILY REJECTED THE ADDITIONAL EVIDENCES SUBMITTED BY THE ASSESSEE WITH OUT VERIFYING THE SAME. THEREAFTER, THE LD. CIT(A) HIMSELF PROCEEDED TO EXA MINE THE EVIDENCES AND FOUND THE CLAIM OF THE ASSESSEE WAS BROADLY CORRECT . HE ALSO NOTED THAT THE ASSESSEE HAD ALSO FURNISHED CONFIRMATIONS FROM THE BROKERS OF CAR PURCHASERS AND CAR SELLERS. HE ALSO NOTED THAT OUT OF THE DEPO SITS THE ASSESSEE HAD MADE CERTAIN PAYMENTS TO THE CAR SELLERS BY WAY OF CHEQU E/PAY ORDER AGGREGATING TO RS.16,31,409/- AND RS.14,65,690/- FROM THE TWO BANK ACCOUNTS OF THE ASSESSEE. HE FURTHER NOTED THAT THE AMOUNT DEPOSITED IN THE A CCOUNTS OF THE ASSESSEE WAS RS.39,41,663/- AND RS.17,14,614/- RESPECTIVELY AS A GAINST CONSIDERED BY THE AO OF RS.27,62,400/- AND RS.13,77,550/- RESPECTIVEL Y. THE LD. CIT(A), THEREAFTER, HELD THAT TO THE EXTENT OF THE PAYMENTS MADE TO THE SELLERS THE DEPOSITS IN THE BANK ACCOUNTS OF THE ASSESSEE WERE RELATING TO THE CAR BROKING BUSINESS. HE, HOWEVER, HELD THAT SINCE THE ASSESSE E HAD NOT RETURNED THE REMAINING AMOUNT EITHER TO THE PROSPECTIVE PURCHASE R OR TO THE SELLERS, HENCE REMAINING AMOUNT OF RS.15,59,178/- WAS THE UNEXPLAI NED INCOME OF THE ASSESSEE. HE, THEREFORE, CONFIRMED THE ADDITION TH AT EXTENT. BEING AGGRIEVED BY THE ABOVE ORDER OF THE LD. CIT(A ), THE ASSESSEE FILED APPEAL BEFORE US. 4. SMT. RUPALI ARUN BHANDARE WIDOW OF THE ASSESSEE BEING HEIR LR APPEARED BEFORE US AND HAS SUBMITTED THAT THE CASH DEPOSITS WERE MADE BY THE ITA NO.2509/M/2014 SHRI ARUN ABAJI BHANDARE 4 SUB AGENTS, PROSPECTIVE PURCHASERS OF THE CARS AND THE NECESSARY CONFIRMATIONS FROM THE PROSPECTIVE PURCHASERS, AGENTS AND EVEN FR OM SELLERS WERE ALSO FILED. 5. ON THE OTHER HAND, THE LD. D.R. HAS RELIED UPON THE FINDINGS OF THE LD. CIT(A). 6. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND HAV E ALSO GONE THROUGH THE RECORDS. IT MAY BE NOTED FROM THE ORDER OF THE LD. CIT(A) BY AND LARGE HAS AGREED TO THE CONTENTIONS OF THE ASSESSEE REGARDING THE BROKING BUSINESS IN SECOND HAND CARS. FURTHER, THE LD. CIT(A) HAS ALSO HELD THAT THE ASSESSEE HAS BEEN ABLE TO PROVE THAT CERTAIN DEPOSITS USED TO BE MADE BY THE PROSPECTIVE BUYERS AND AGENTS WHO WERE OUT STATIONED INTO THE B ANK ACCOUNT OF THE ASSESSEE WHICH WERE FURTHER USED TO BE PAID BY THE ASSESSEE TO THE SELLERS, IF THE DEAL GETS MATURED. EVEN THE ASSESSEE HAD BEEN ABLE TO P ROVE SUCH PAYMENTS TO THE SELLERS. UNDER THESE CIRCUMSTANCES, ONCE THE LD. C IT(A) HAS GIVEN A FINDING THAT THE CLAIM OF THE ASSESSEE REGARDING THE DEPOSI TS WAS CORRECT, THEN, MERELY BECAUSE, AT THE END OF THE YEAR CERTAIN AMOUNT WAS LYING DEPOSITED IN THE BANK ACCOUNT OF THE ASSESSEE, THAT ITSELF, IS NOT SUFFIC IENT TO HOLD THAT THE SAME WAS UNDISCLOSED INCOME OF THE ASSESSEE. WE DO NOT FIND ANY JUSTIFICATION ON THE PART OF THE LD. CIT(A) IN PARTLY CONFIRMING THE ADD ITION WHEN HE HAS FOUND THE CLAIM OF THE ASSESSEE WAS BROADLY CORRECT. IN VIEW OF THIS, THE ADDITIONS CONFIRMED BY THE LD. CIT(A) ARE HEREBY ORDERED TO B E DELETED. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS HER EBY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 05.04.2017. SD/- SD/- ( / RAJENDRA) ( / SANJAY GARG) / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI / DATED 05.04.2017 * KISHORE ITA NO.2509/M/2014 SHRI ARUN ABAJI BHANDARE 5 /COPY OF THE ORDER FORWARDED COPY OF THE ORDER FORWARDED COPY OF THE ORDER FORWARDED COPY OF THE ORDER FORWARDED TO TOTO TO : :: : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / THE CIT(A) - 4. / CIT 5. / THE DR CONCERNED BENCH , 6. / GUARD FILE. / // / BY ORDER, //TRUE COPY// ( DY./ASSTT. REGISTRAR) / ITAT, MUMBAI / ITAT, MUMBAI / ITAT, MUMBAI / ITAT, MUMBAI