DIMPLE DEEPAK GERUJA, MUMBAI V. ITO 18 (1)(4), MUMBAI

ITA 2520/MUM/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 1219 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-12-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 23-04-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANJAY J SETHI
• Keywords: Unexplained cash credit; Opportunity of being heard
• Section: 69A; 147; 68; 69; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY , JUDICIAL MEMBER ITA NO. 2520 /MUM. /201 9 ( ASSESSMENT YEAR : 20 09 10 ) DIMPLE DEEPAK GERUJA A 202, NEELKANTH DHARA OPP. DHANWATRI HOSPITAL N.S. ROAD, MULUND (WEST) MUMBAI 400 080 PAN AJNPG4618G . APPELLANT V/S INCOME TAX OFFICER WORD 18 ( 1 )( 4 ), MUMBAI . RESPONDENT ASSESSEE BY : NONE REVENUE BY : S HRI SANJAY J. SETHI DATE OF HEARING 24 .11.2020 DATE OF ORDER 08.12.2020 O R D E R THE AFORESAID APPEAL HAS BEEN FILED BY THE ASSESSEE CHALLENGING THE ORDER DATED 31 ST JANUARY 2019, PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) 48, MUMBAI, PERTAINING TO THE ASSESSMENT YEAR 2009 10. 2. WHEN THE APPEAL W AS CALLED FOR HEARING, NO ONE WAS PRESENT ON BEHALF OF THE ASSESSEE TO REPRESENT THE CASE. THERE IS NO APPLICATION SEEKING ADJOURNMENT EITHER. CONSI DERING THE NATURE OF DISPUTE, I PROCEED TO DISPOSE OFF THE APPEAL EX PARTE QUA THE ASSESSEE AFTER 2 DIMPLE DEEPAK GERUJA HEARING THE LEARNED DEPARTMENTAL REPRES ENTATIVE AND ON THE BASIS OF MATERIAL AVAILABLE ON RECORD. 3. THE DISPUTE IN THE PRESENT APPEAL IS CONFINED TO THE ADDITION OF AN AMOUNT OF ` 10,17,850, AS UNEXPLAINED CASH CREDIT UNDER SECTION 68 OF THE INCOME TAX ACT, 1961 (FOR SHORT THE ACT ). 4. BRIEF FACTS ARE, THE ASSESSEE IS AN INDIVIDUAL. FOR THE ASSESSMENT YEAR UNDER DISPUTE, THE ASSESSEE HAD FILED HER RETURN OF INCOME ON 19 TH SEPTEMBER 2009, DECLARING INCOME OF ` 9,22,265. SUBSEQUENTLY, ON THE BASIS OF SOME INFORMATION RECEIVED INDICATING THAT INC OME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT, THE ASSESSING OFFICER RE OPENED THE ASSESSMENT UNDER SECTION 147 OF THE ACT. IN RESPONSE TO THE NOTICE ISSUED UNDER SECTION 148 OF THE ACT, THE ASSESSEE APPEARED IN THE ASSESSMENT PROCEEDINGS AND IN THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSEE FILED ANOTHER RETURN OF INCOME OFFERING ADDITIONAL INCOME OF ` 3,38,451, BEING NET CASH DEPOSIT IN THE PERSONAL SAVING BANK ACCOUNT WITH ICICI BANK. ON THE BASIS OF INFORMATION AVAILABLE ON RECORD, THE ASSESSING OFFIC ER FOUND THAT DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE HAD MADE CASH DEPOSIT IN THE AFORESAID SAVING S BANK ACCOUNT AMOUNTING TO ` 10,17,850. THEREFORE, HE CALLED UPON THE A SSESSEE TO EXPLAIN THE NATURE AND SOURCE OF SUCH CASH DEPOSIT. IN RESPONSE, THE ASSESSEE SUBMITTED THAT THE CASH 3 DIMPLE DEEPAK GERUJA DEPOSIT WAS OUT OF OTHER INCO ME AND CASH WITHDRAWN FROM THE B ANK ACCOUNT. SUBSEQUENTLY, THE ASSESSEE ALSO SUBMITTED THAT THE CASH DEPOSIT MADE WAS OUT OF RECEIPTS FROM HOUSEHOLD BUSINESS OF BUYING AND SELLING DRESS MAT ERIAL. FURTHER, IT WAS SUBMITTED BY THE ASSESSEE THAT SINCE THE SAID BUSINESS WAS BEING CARRIED ON AT SMALL SCALE , NO RECORDS HAVE BEEN MAINTAINED. THE ASSESSING OFFICER WAS NOT IMPRESSED WITH THE EXPLANATION OF THE ASSESSEE. HE OBSERVED , WHEN THE ASSESSEE IS HAVING A SEMI WHOLESALE CLOTH BUSINESS THE TURNOVER OF WHICH DURING THE YEAR IS ` 1.88 CRO RE AND THE ACCOUNTS ARE AUDITED, I T IS NOT BELIEVABLE THAT THE CASH DEPOSITS WERE MADE FROM HOUSEHOLD BUSINESS OF BUYING AND SELLING DRESS MATERIAL. THEREFORE, HE HELD THAT CASH DEPOSIT IN THE S AVING S B ANK ACCOUNT IS TO BE TREATED AS UNDISCLOSED INVESTMENT UNDER SECTION 69 OF THE ACT. ACCORDINGLY, HE ADDED BACK THE AMOUNT TO THE INCOME OF THE ASSESSEE. 5. THOUGH, THE ASSESSEE CHALLENGED THE AFORESAID ADDITION BEFORE THE FIRST APPELLATE AUTHORITY. HOWEVER, S HE WAS UNSUCCESSFUL. 6. HEARD THE LEARNED DEPARTMENTAL REPRESENTATIVE AND PERUSED THE MATERIAL ON RECORD. ON A READING OF THE ASSESSMENT ORDER, I FIND THAT THOUGH THE ASSESSING OFFICER HAS HELD THA T THE CASH DEPOSIT M ADE IN THE S AVING S B ANK ACCOUNT WITH ICICI BANK IS TO BE TREATED AS UNDISCLOSED INVESTMENT UNDER SECTION 69 OF THE ACT, HOWEVER, IN THE 4 DIMPLE DEEPAK GERUJA COMPUTATION OF INCOME, HE HAS MADE THE ADDITION OF SUCH CASH DEPOSIT BY TREATING IT AS UNEXPLAINED CASH CREDIT UNDER SEC TION 68 OF THE ACT. THEREFORE, IT APPEARS THAT THE ASSESSING OFFICER HIMSELF WAS UNCERTAIN ABOUT THE NATURE OF THE CASH DEPOSIT AND THE PROVISION UNDER WHICH IT HAS TO BE TREATED AS INCOME OF THE ASSESSEE. THE LEARNED COMMISSIONER (APPEALS) HAS HELD THAT THE AMOUNT HAS TO BE BROUGHT TO TAX UNDER SECTION 69 OF THE ACT. SHE HAS FURTHER OBSERVED THAT THE AMOUNT CAN ALSO BE ADDED UNDER SECTION 69A OF T HE ACT. THUS, THE AFORESAID OBSERVATIONS OF THE DEPARTMENTAL AUTHORITIES CLEARLY ESTABLISH THE UNCERTAINTY PREVAILING OVER THE NATURE OF INCOME IN THE MINDS OF THE DEPARTMENTAL AUTHORITIES. 7. BE THAT AS IT MAY, BEFORE THE ASSESSING OFFICER, THE ASSESSEE HA D SUBMITTED THAT THE CASH DEPOSITS WERE MADE OUT OF THE HOUSE HOLD BUSINESS AND EARLIER WITHDRAWALS MADE. IN SUPPORT OF SUCH CONTENTION, THE ASSESSEE HAD ALSO SUBMITTED SUMMARY OF CASH STATEMENT. AS IT APPEARS, NEITHER THE ASSESSING OFFICER NOR LEARNED COM MISSIONER (APPEALS) HAVE PROPERLY EXAMINED ASSESSEES CLAIM. IT IS NOT DISPUTED THAT THE ASSESSEE IS HAVING REGULAR BUSINESS ACTIVITY WITH HUGE TURNOVER. IN FACT, ASSESSEES ACCOUNT S ARE ALSO AUDITED. IN THE AFORESAID SCENARIO, THE CLAIM OF THE ASSESSEE TH AT THE CASH DEPOSIT WAS OUT OF THE EARLIER WITHDRAWALS AND SOME HOUSEHOLD BUSINESS REQUIRES EXAMINATION. THEREFORE, I AM INCLINED TO RESTORE THE ISSUE TO THE 5 DIMPLE DEEPAK GERUJA ASSESSING OFFICER FOR FRESH ADJUDICATION AFTER PROVIDING REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 8. IN THE RESULT, APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 08.12.2020 SD/ - SAKTIJIT DEY JUDICIAL MEMBER MUMBAI, DATED: 08.12.2020 COPY OF THE ORDER FORWARDED TO : (1) THE ASSESSEE; (2) THE REVENUE; (3) THE CIT(A); (4) THE CIT, MUMBAI CITY CONCERNED; (5) THE DR, ITAT, MUMBAI; (6) GUARD FILE . TRUE COPY BY ORDER PRADEEP J. CHOWDHURY SR. PRIVATE SECRETARY ASSISTANT REGISTRAR ITAT, MUMBAI