ITO WD 22(3)-3, NAVI MUMBAI V. SUNIL S. MISHRA, NAVI MUMBAI

ITA 2676/MUM/2011

• Counselvise Citation: 267619914 RSA 2011
• Duration Of Justice: 1 year(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-04-2012
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 17-04-2012
• Assessment Year: 2007-2008
• Appeal Filed On: 07-04-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: P C MAURYA
• Assessee Lawyers: SUBHASH CHANDRA
• Keywords: Unexplained cash credit; Peak credit; Additional evidence

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH E, MUMBAI BEFORE SHRI P.M.JAGTAP, ACCOUNTANT MEMBER & SHRI N.V. VASUDEVAN, JUDICIAL MEMBER. I.T.A. NO. 2676/MUM/2011 ASSESSMENT YEAR : 2007-08. THE INCOME-TAX OFFICER, SUNIL S. MISHRA. WARD-22(3)(4), MUMBAI. VS. FLAT NO.402, SUJAY CLASSUQUE SECTOR-11, KOPARKHI RNE NAVI MUMBAI. PAN AGAPM5480E. APPELLANT. RESPONDENT. APPELLANT BY : SHRI P.C. MAURYA. RESPONDENT BY : S HRI SUBHASH CHANDRA. DATE OF HEARI NG : 17-04-2012. DATE OF PRONOUNC EMENT : 30-04-2012, O R D E R PER P.M. JAGTAP, A.M. : THIS APPEAL IS PREFERRED BY THE REVENUE AGAINST TH E ORDER OF LEARNED CIT(APPEALS)-33, MUMBAI DATED 17-01-2011 AND THE GR OUNDS RAISED BY THE REVENUE THEREIN READ AS UNDER : 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, WHETHER THE LD. CIT(A) WAS JUSTIFIED IN GIVING THE RELIEF OF RS.28, 96,521/- OUT OF ADDITION OF RS.36,85,269/- MADE AS UNEXPLAINED CASH CREDITS BY ADOPTING PEAK OF CREDITS IN THE BANK ACCOUNT, WITHOUT APPRECIATING THE FACTS THAT THE DEPOSITS IN THE BANK ACCOUNTS REPRESENTED HIS UNACCOUNTED MONEY. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, WHETHER THE LD. CIT(A) WAS JUSTIFIED IN GIVING THE IMPUGNED RELIEF BY ADOPTING THE PEAK OF 2 ITA NO.2676/MUM/2011 CREDITS, RELYING ON THE STATEMENT OF THE ASSESSEE A ND ON THE BANK ACCOUNTS WITHOUT REMANDING THE DOCUMENTS TO THE A.O., WHICH WERE NOT PRODUCED DURING THE COURSE OF ASSESSMENT PROCEEDINGS THEREBY ADMITTING ADDITIONAL EVIDENCES IN CONTRAVENTION TO THE PROVISIONS OF RUL E46A OF THE I.T. ACT. 2. THE RELEVANT FACTS OF THE CASE GIVING RISE TO TH IS APPEAL ARE THAT THE ASSESSEE WHO IS AN INDIVIDUAL AND IS ENGAGED IN THE BUSINESS AS CLEARING AND FORWARDING AGENT, FILED HIS RETURN OF INCOME FOR THE YEAR UNDE R CONSIDERATION ON 11-08-2008 DECLARING TOTAL INCOME OF RS.2,92,195/-. IN THE PRO FIT & LOSS ACCOUNT FILED ALONG WITH THE SAID RETURN, GROSS RECEIPTS WERE SHOWN BY THE ASSESSEE AT RS.35,51,131/- AND AFTER DEDUCTING EXPENSES, THE NET PROFIT WAS SH OWN AT RS.4,87,126/-. AS PER THE AIR INFORMATION RECEIVED BY THE AO, THE ASSESSEE HA D DEPOSITED A TOTAL SUM OF RS.72,36,400/- IN HIS TWO BANK ACCOUNTS WITH HDFC B ANK, NAVASHEVA BRANCH. WHEN THE ASSESSEE WAS CALLED UPON TO EXPLAIN THE SA ID DEPOSIT, HE SUBMITTED THAT CASH DEPOSITS WERE MADE BY THE IMPORTERS AND EXPORT ERS IN HIS ACCOUNT DIRECTLY FOR PAYMENT OF IMPORT DUTY AND OTHER BUSINESS RELATING EXPENSES. HE ALSO STATED THAT A TOTAL SUM OF RS.62,43,600/- WAS DEPOSITED IN HIS B ANK ACCOUNTS BY THE PARTIES DURING THE YEAR UNDER CONSIDERATION WHICH WAS ENTIR ELY SPENT FOR PAYMENT OF IMPORT DUTY AND OTHER BUSINESS RELATING EXPENSES ON BEHALF OF THE CLIENTS. THIS EXPLANATION OF THE ASSESSEE WAS FOUND ACCEPTABLE BY THE AO IN THE ABSENCE OF DETAILS FURNISHED BY THE ASSESSEE REGARDING THE PAR TIES BY WHOM THE CASH WAS CLAIMED TO BE DEPOSITED IN HIS BANK ACCOUNT AS WELL AS THE NATURE OF PAYMENTS CLAIMED TO BE MADE OUT OF THE SAID CASH ON ACCOUNT OF CUSTOM DUTY, BPT CHARGES ETC. ACCORDINGLY, THE DIFFERENCE IN THE TOTAL DEPOS ITS OF RS.72,36,400/- FOUND TO BE MADE IN THE BANK ACCOUNT OF THE ASSESSEE AND THE GR OSS RECEIPTS OF RS.35,51,131/- SHOWN BY THE ASSESSEE AMOUNTING TO RS.36,85,269/- W AS ADDED BY THE AO TO THE TOTAL INCOME OF THE ASSESSEE TREATING THE SAME AS U NEXPLAINED CASH CREDITS. 3 ITA NO.2676/MUM/2011 3. THE ADDITION OF RS.36,85,269/- MADE BY THE AO ON ACCOUNT OF UNEXPLAINED CASH CREDITS WAS CHALLENGED BY THE ASSESSEE IN AN A PPEAL FILED BEFORE THE LEARNED CIT(APPEALS). DURING THE COURSE OF APPELLATE PROCEE DINGS BEFORE THE LEARNED CIT(APPEALS), IT WAS SUBMITTED THAT THE ASSESSEE WA S MAINTAINING ONLY ONE BANK ACCOUNT WITH HDFC BANK AND ALL THE DEPOSITS AS PER AIR INFORMATION WERE MADE IN THAT ACCOUNT ITSELF. A COPY OF STATEMENT OF THE SAID BANK ACCOUNT ISSUED BY HDFC BANK WAS ALSO FURNISHED BY THE ASSESSEE. ACCOR DING TO THE LEARNED CIT(APPEALS), THE ENTRIES APPEARING IN THE SAID ACC OUNT REFLECTED CREDITS AS WELL AS DEBITS AND THE ADDITION ON ACCOUNT OF CASH DEPOSITE D IN THE SAID ACCOUNT SHOULD BE MADE ON PEAK CREDIT BASIS. HE WORKED OUT SUCH CREDI T AT RS.7,88,748/- AND CONFIRMED THE ADDITION MADE BY THE AO ON THIS ISSUE TO THAT EXTENT THEREBY ALLOWING A RELIEF OF RS.28,96,521/- TO THE ASSESSEE . AGGRIEVED BY THE ORDER OF THE LEARNED CIT(APPEALS), THE REVENUE HAS PREFERRED THI S APPEAL BEFORE THE TRIBUNAL. 4. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AN D ALSO PERUSED THE RELEVANT MATERIAL ON RECORD. AS RIGHTLY SUBMITTED BY THE LEA RNED DR, THE ISSUE RELATING TO PEAK CREDIT AROSE FOR THE FIRST TIME BEFORE THE LE ARNED CIT(APPEALS) AND THE SAME WAS DECIDED BY HIM ON THE BASIS OF COPY OF RELEVANT BANK ACCOUNT STATED TO BE FURNISHED BY THE ASSESSEE WITHOUT GIVING ANY OPPORT UNITY TO THE AO TO VERIFY THE SAME. A PERUSAL OF THE IMPUGNED ORDER OF THE LEARNE D CIT(APPEALS) SHOWS THAT HE HAS ALSO NOT GIVEN ANY DETAILS OR ANY BASIS ON WHIC H SUCH PEAK CREDIT WAS WORKED OUT AT RS.7,88,748/-. WE, THEREFORE, CONSIDER IT FA IR AND REASONABLE AND IN THE INTEREST OF JUSTICE TO SET ASIDE THE IMPUGNED ORDER OF THE LEARNED CIT(APPEALS) ON THIS ISSUE AND RESTORE THE MATTER TO THE FILE OF TH E AO FOR VERIFYING THE EXACT PEAK CREDIT FROM THE ENTRIES REFLECTED IN THE RELEVANT B ANK ACCOUNT OF THE ASSESSEE. THE AO SHALL AFFORD SUFFICIENT OPPORTUNITY OF BEING HEA RD TO THE ASSESSEE ON THIS ISSUE AND RESTRICT THE ADDITION ONLY TO THE EXTENT OF PE AK CREDIT AS WORKED OUT BY HIM. 4 ITA NO.2676/MUM/2011 5. IN THE RESULT, THE APPEAL OF THE REVENUE IS TREA TED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON THIS 30 TH DAY OF APRIL, 2012. SD/- SD/- (N.V.VASUDEVAN) (P.M. JAG TAP) JUDICIAL MEMBER ACC OUNTANT MEMBER MUMBAI, DATED: 30 TH APRIL, 2012. COPY TO : 1. APPELLANT 2. RESPONDENT 3. C.I.T. 4. CIT(A) 5. DR, E-BENCH. (TRUE COPY) BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI. WAKODE