ACIT 22(3), NAVI MUMBAI V. SATISH M.MAYEKAR, NAVI MUMBAI

ITA 2520/MUM/2013

• Counselvise Citation: 252019914 RSA 2013
• Duration Of Justice: 1 year(s) 3 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-07-2014
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: E
• Next Hearing Date: 10-07-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 03-04-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: PRAKASH L PATHADE
• Assessee Lawyers: ASHOK KUMAR SUTHAR
• Keywords: Business income

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUMBAI BEFORE HONBLE S/SHRI H.L. KARWA, PRESIDENT AND B. R.BASKARAN (AM) . . , . . , ./I.T.A. NO.2520/MUM/2013 ( / ASSESSMENT YEAR :2009-10 ) ASSTT. COMMISSIONER OF INCOME TAX, 22(3), 3 RD FLOOR, TOWER NO.6, VASHI RAILWAY STATION COMPLEX, VASHI, NAVI MUMBAI. / VS. SATISH M MAYEKAR BELAPUR AUTO MOBILES, IOC PETROL PUMP, NEAR BELAPUR RAILWAY STATION, NAVI MUMAI-400614, ( / APPELLANT) .. ( !' / RESPONDENT) ./ #$ ./PAN/GIR NO. : AGAPM2915J % / APPELLANT BY : SHRI PRAKASH L PATHADE !' & % /RESPONDENT BY : SHRI ASHOK KUMAR SUTHAR ' & ( ) / DATE OF HEARING : 10.7.2014 *+ & ( ) /DATE OF PRONOUNCEMENT : 10. 7.2014 / O R D E R PER B.R.BASKARAN, ACCOUNTANT MEMBER: THE APPEAL FILED BY THE REVENUE IS DIRECTED A GAINST THE ORDER DATED 21.01.2013 PASSED BY LD CIT(A)-33, MUMBAI AND IT RE LATES TO THE ASSESSMENT YEAR 2009-10. 2. THE REVENUE IS ASSAILING THE DECISION OF LD CIT(A) IN CONFIRMING THE ADDITION ONLY TO THE EXTENT OF RS.11,284/- AS AGAINST THE AD DITION OF RS.9,10,000/- MADE BY THE AO. I.T.A. NO.2520/MUM/2013 2 3. THE FACTS RELATING TO THE ABOVE SAID ISSUE A RE STATED IN BRIEF. THE ASSESSEE COMPANY IS ENGAGED IN RUNNING PETROL PUMP. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO CAME TO KNOW THAT THE ASSESSEE WAS MAINTAINING A BANK ACCOUNT WITH SARASHWAT CO-OPERATIVE BANK. FROM THE BANK STATEMENT, IT WAS NOTICED THAT THE ASSESSEE HAS MADE CASH DEPOSITS AG GREGATING TO RS.9,10,000/-. THE AO ASKED THE ASSESSEE TO EXPLAIN THE SOURCES OF THE CASH DEPOSITS. IN RESPONSE THERETO, HE FILED A STATEMENT OF AFFAIRS, WHEREIN HE EXPLAINED THAT (A) HE HAS USED A SUM OF RS.6,00,000/- DRAWN FROM HIS BUSINESS BOOKS FOR MAKING THE ABOVE DEPOSITS AND (B) HE WAS HAVING OPENING CASH BALANCE OF RS.3,93,6 21/-. HOWEVER, THE AO REJECTED THE STATEMENT OF AFFAIRS F ILED BY THE ASSESSEE ON THE REASONING THAT THE ASSESSEE HAS FAILED TO FURNISH A NY EXPLANATION FOR CREDIT AND DEBIT ENTRIES FOUND IN THE BANK ACCOUNT. ACCORDINGL Y, THE AO ASSESSED THE AMOUNT OF RS.9,10,000/- AS THE INCOME OF THE ASSESS EE. THE LD CIT(A) ACCEPTED THE CONTENTIONS OF THE ASSESSEE THAT THE SOURCE OF THESE DEPOSITS IS THE RECEIPT FROM BUSINESS. ACCORDINGLY, THE LD CIT(A) TOOK THE VIEW THAT THE ADDITION MAY BE RESTRICTED TO THE NET PROFIT ARISING ON THE ABOV E SAID AMOUNT. ACCORDINGLY, HE APPLIED THE NET PROFIT RATE OF 1.24% ON THE AMOUNT OF RS.9,10,000/- AND THUS RESTRICTED THE ADDITION TO RS.11,284/- AND DELETED THE BALANCE AMOUNT. AGGRIEVED, THE REVENUE HAS FILED THIS APPEAL BEFORE US. 4. THE LD D.R VEHEMENTLY ARGUED THAT THE RESPON SIBILITY TO PROVE CASH CREDITS LIES UPON THE ASSESSEE, BUT THE ASSESSEE HAS FAILED TO DISCHARGE THE SAID BURDEN. HE FURTHER SUBMITTED THAT THE LD CIT(A) WAS NOT JUS TIFIED IN TREATING THE AMOUNT OF RS.9,10,000/- AS BUSINESS RECEIPTS AND THUS ESTI MATING NET PROFIT THEREON BY DEVIATING FROM THE STAND TAKEN BY THE ASSESSING OFF ICER. HE SUBMITTED THAT, EVEN I.T.A. NO.2520/MUM/2013 3 IF THE STAND TAKEN BY THE LD CIT(A) IS TAKEN AS COR RECT STAND, THE ENTIRE AMOUNT OF RS.9,10,000/- IS LIABLE TO BE ASSESSED, IF IT IS CONSIDERED AS BUSINESS RECEIPTS SINCE THERE IS NO MATERIAL TO SHOW THAT THE ASSESSE E HAS INCURRED ANY EXPENDITURE OUTSIDE THE BOOKS. 5. ON THE CONTRARY, THE LD A.R SUBMITTED THAT T HE ASSESSEE HAS BEEN WITHDRAWING FUNDS FROM THE BUSINESS CONCERN AND DEP OSITED THOSE FUNDS DURING INTERMEDIATE PERIOD IN THE SAVINGS BANK ACCOUNT. H E SUBMITTED THAT THE ASSESSEE HAS WITHDRAWN A SUM OF RS.6,76,092/- FROM THE BUSINESS BOOKS. HENCE, THE ASSESSEE HAS SHOWN A SUM OF RS.6.00 LAKH S AS A SOURCE FROM THE BUSINESS CONCERN. HE SUBMITTED THAT THE AO HAS REJ ECTED THE SAID CLAIM WITHOUT ASSIGNING PROPER REASONS. HE FURTHER SUBMITTED THA T THE ASSESSEE HAD SAVED FUNDS IN THE EARLIER YEARS AND THE SAID SAVINGS TOG ETHER WITH THE WITHDRAWALS WERE USED TO MAKE DEPOSITS IN THE SAVINGS BANK ACCO UNT. 6. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE RECORD. ADMITTEDLY, THE SAVINGS BANK ACCOUNT WAS NOT DISCLOSED TO THE DEPAR TMENT. HENCE, THE ASSESSEE IS LIABLE TO EXPLAIN THE SOURCES OF THE DEPOSITS MA DE INTO IT. WE NOTICE THAT THE LD CIT(A) HAS TREATED THE IMPUGNED AMOUNT AS BUSINESS RECEIPTS AND ACCORDINGLY ESTIMATED THE NET PROFIT THEREON. HOWEVER, THE EX PLANATION OF THE ASSESSEE BEFORE THE AO WAS THAT HE HAS USED PAST SAVINGS AND ALSO THE AMOUNT WITHDRAWN FROM HIS BUSINESS BOOKS FOR MAKING THESE DEPOSITS. UNDER THE FACTS SURROUNDING THE ISSUE, WE ARE OF THE VIEW THAT THE STAND TAKEN BY LD CIT(A) DOES NOT SEEM TO BE APPROPRIATE. 7. THE ASSESSEE HAS FURNISHED A PAPER BOOK, WHE REIN HE HAS INCLUDED THE FINANCIAL STATEMENTS OF THE YEAR UNDER CONSIDERATIO N. A PERUSAL OF THE SAME I.T.A. NO.2520/MUM/2013 4 SHOWS THAT THE ASSESSEE HAS FURNISHED THE DETAILS O F HIS CAPITAL ACCOUNT, WHERE FROM IT IS SEEN THAT THE ASSESSEE HAS WITHDRAWN A S UM OF RS.6,76,092/- FROM THE BUSINESS. HENCE, IN OUR VIEW, THERE IS SOME MERIT IN THE EXPLANATION OF THE ASSESSEE THAT HE HAS USED A SUM OF RS.6.00 LAKHS WI THDRAWN FROM THE BUSINESS FOR MAKING DEPOSITS IN THE BANK ACCOUNT. HOWEVER, THE CLAIM OF THE ASSESSEE THAT HE WAS HAVING PAST SAVINGS OF RS.3,93,621/- WI TH HIM WAS NOT PROVED WITH ANY MATERIAL. UNDER THESE SET OF FACTS, WE ARE OF THE VIEW THAT THE ASSESSEE CAN BE CONSIDERED TO HAVE EXPLAINED THE SOURCES FOR MAK ING DEPOSITS TO THE EXTENT OF RS.6.00 LAKHS, BUT FAILED TO EXPLAIN THE SOURCE FOR THE REMAINING AMOUNT. WE HAVE ALREADY HELD THAT THE STAND TAKEN BY LD CIT(A) IS INAPPROPRIATE IN THE FACTS AND CIRCUMSTANCES OF THE CASE. ACCORDINGLY, WE SE T ASIDE THE ORDER OF LD CIT(A) ON THIS ISSUE AND DIRECT THE AO TO GRANT RELIEF OF RS.6.00 LAKHS AND ACCORDINGLY WE SUSTAIN THE ADDITION TO THE EXTENT OF RS.3,10,00 0/-. 8. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS PARTLY ALLOWED. THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT O N 10TH JULY, 2014. *+ ' , -. / 0 10TH JULY, 2014 + & 2 3 SD SD ( . . / H.L. KARWA) ( . . , / B.R. BASKARAN ) / PRESIDENT / ACCOUNTANT MEMBER - ' MUMBAI: 10 TH JULY,2014. . . ./ SRL , SR. PS I.T.A. NO.2520/MUM/2013 5 ! ' / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. !' / THE RESPONDENT. 3. ' 5( ( ) / THE CIT(A)- CONCERNED 4. ' 5( / CIT CONCERNED 5. 67 2 !(8 , ) 8 , - ' / DR, ITAT, MUMBAI CONCERNED 6. 2 9 : / GUARD FILE. ; ' / BY ORDER, TRUE COPY < # (ASSTT. REGISTRAR) ) 8 , - ' /ITAT, MUMBAI