IKRAM AHMED NISAR KHAN, MUMBAI V. ITO 21(3)(1), MUMBAI

ITA 2704/MUM/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 2864 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 2 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-06-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: I
• Next Hearing Date: 14-06-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 21-04-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: JAVED AKHATAR
• Keywords: Business income; Opportunity of being heard
• Section: 144

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL I BENCH, MUMBAI BEFORE SHRI SHAILENDRA KUMAR YADAV , JM AND SHRI RAJESH KUMAR, AM ./ I.T.A. NO. 2704 /MUM/ 2014 ( / ASSESSMENT YEAR : 20 09 - 10 ) IKRAM AHMED NISAR KHAN, 2/5 AZAD HOUSING SOCIETY, KAJUPADA PIPE LINE, GHASS COMPOUND , KURLA, MUMBAI0 - 400070 . / VS. INCOME TAX OFFICER 21(3)(1), A - MITTAL COURT, NARIMAN POINT, MUMBAI - 400021 ./ PAN : APNPK7367L / ASSESSEE BY SHRI BHUPENDRA SHAH / REVENUE BY SHRI JAVED AKHATAR / DATE OF HEARING : 14.6. 2016 / DATE OF PRONOUNCEMENT : 22. 0 6. 2016 / O R D E R PER RAJESH KUMAR, A. M: THIS IS AN APPEAL FILED BY THE ASSESSEE CHALLENGING THE ORDER DATED 14.2.2014 OF LD.CIT(A) - 22 , MUMBAI , FOR ASSESSMENT YEAR 20 09 - 10 BY WHICH THE ASSESSEE IS CHALLENGING THE ADDITION MADE BY THE AO AND CONFIRMED BY THE LD.CIT(A) OF CASH DEPOSITS RS.16,68,300/ - AND CREDIT DEPOSITS RS.1,98,820/ - MADE IN BANK ACCOUNT DURING THE YEAR AS UNEXPLAINED CASH DEPOSITS. 2 2704 /MUM/ 201 4 2. ONLY ISSUE RAISED IN THE GROUND NO.1 IS REGARDING CONFIRMATION OF ADDITIONS OF RS.16,68,300/ - AND RS.1,98, 820/ - BEING ON ACCOUNT OF CASH AND CREDIT DEPOSITS INTO THE PUNJAB AND MAHARASHTRA BANK ACCOUNT NO.1101/3362 BY THE ASSESSEE DURING THE YEAR . 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE FILED HIS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2009 - 1 0 ON 31.03.2010 DECLARING TOTAL INCOME OF RS.1,76,934/ - . THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY AND STATUTORY NOTICES U/S 143(2) OF THE ACT DATED 16.9.2010 AND 142 (1) DATED 15.9.2011 WERE ISSUED AND DULY SERVED UPON THE ASSESSEE . THE AO ALLOW ED SEVERAL OPPORTUNITIES TO THE ASSESSEE TO APPEAR BEFORE HI M WITH DOCUMENTARY EVIDENCE BUT NEITHER THE ASSESSEE NOR HIS AUTHORIZED REPRESENTATIVE APPEARED BEFORE THE AO ON THE VARIOUS DATES FIXED FOR HEARING AND FINALLY THE AO PROCEEDED TO COMPLETE THE AS SESSMENT U/S 144 OF THE ACT . ACCORDINGLY, VIDE ORDER DATED 14.12.2011 COMPLETED THE ASSESSMENT AT AN AMOUNT OF RS.23,50,542/ - BY MAKING VARIOUS ADDITIONS AMOUNTING TO RS.21,73,408/ - INCLUDING THE CASH CREDIT DEPOSITS OF RS.18,70,110/ - . AGGRIEVED BY T HE ORDER OF AO THE ASSESSEE FILED AN APPEAL BEFORE THE LD.CIT(A), WHO IN TURN CONFIRMED THE ACTION OF THE AO. HENCE THE ASSESSEE IS IN SECOND APPEAL BEFORE US. 3 2704 /MUM/ 201 4 4. THE AO ON THE BASIS OF ANNUAL INFORMATION RETURN (AIR) FILED BY ICICI BANK LTD, MAROL MA ROSHI ROAD, MUMBAI FOUND THAT THE ASSESSEE HA S DEPOSITED CASH AMOUNTING TO RS.16,68,300/ - AND CREDIT OF RS.1,98,820/ - IN THE SAVING BANK ACCOUNT WHICH WAS NOT EXPLAINED BY THE ASSESSEE DESPITE HAVING SPECIFICALLY BEEN ASKED VIDE NOTICE DATED 18.11.2011. THE AO FURTHER OBSERVED THAT THE SAID BANK ACCOUNT MAINTAINED WITH THE ICICI BANK WAS NOT DISCLOSED BY THE ASSESSEE IN THE RETURN OF INCOME AND THEREFORE THE AO PRESUMED THAT THE ASSESSEE HAS CONCEALED THE INCOME AND FURNISHED INACCURATE PARTICULARS OF INCOME INCLUDING TRANSACTION S APPEARING THEREIN WERE TOTAL LY UNACCOUNTED WHICH WERE DEPOSITED ON VARIOUS DA T ES AND CONSEQUENTLY TREATED THE ENTIRE AMOUNT OF CASH / CREDIT DEPOSIT S OF RS.18 , 67 , 120/ - AS UNEXPLAINED CASH / CREDIT AND ADDED TO THE TOTAL INCO ME OF THE ASSESSEE . THE AO ALSO FOUND THAT THE ASSESSEE HAS ALSO DEPOSITED SELF ASSESSMENT TAX OF RS.2 , 990 / - , THE SOURCE OF WHICH WAS NOT EXPLAINED BY THE ASSESSEE AND CONSEQUENTLY, THE SAME WAS ALSO ADDED TO THE TOTAL INCOME OF THE ASSESSEE. BEING AGGRI EVED BY THE ORDER OF THE AO, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY CHALLENGING THE FINDINGS GIVEN BY T HE AO IN THE ASSESSMENT ORDER SAYING THAT THE FINDINGS OF THE AO WERE FACTUALLY INCORRECT AS THE ACCOUNT OF THE AS SESSEE WITH ICICI BANK STOOD DISCLOSED IN THE RETURN OF INCOME FILED WITH THE DEPARTMENT . THE DETAILED REPLY OF THE ASSESSEE HAS BEEN INCORPORATED IN PARA 2.5 OF THE APPELLATE ORDER. 4 2704 /MUM/ 201 4 FINALLY T HE LD. CIT(A) DISMISS ED THE APPEAL OF THE ASSESSEE BY OBSERV ING AND HOLDING AS UNDER: 2.6 I HAVE CAREFULLY CONSIDERED THE IMPUGNED ASSESSMENT ORDER AND THE ABOVE SUBMISSION. DURING THE COURSE OF APPELLATE PROCEEDING, THE AR HAD FILED NAMES AND MOBILE PHONE NUMBERS OF 13 PE R SONS BELONG TO DIFFERENT PLACES SUCH AS BANGALORE, KANPUR, SECUNDARABAD AND HYDERABAD AND C LAIMED THAT RS.20,98,720/ - WAS RECEIVED TOWARDS THE JOB WORK CHARGES. SIMILARLY, HE HAD ALSO FILED NAMES OF 5 INDIVIDUALS WITH THEIR ADDRESS TO SHOW THAT RS. 14.68.340 / - WAS IN TURN PAID TOWARDS JO B WORK C HARGES. HE WAS SPECIFICALLY DIRECTED TO CLARIFY AS TO HOW CASH/CHEQUE TO THE TUNE OF RS.20,98, 7 20/ - WAS RECEIVED FROM VARIOUS PLACES SUCH AS BANGALORE, KANPUR, HYDERABAD TOWARDS JOB WORK CONTRACT CONNECTED TO CUTTING THE GARMENTS INTO VARIOUS SIZES AS PER THE REQUIREMENT OF THE PARTY. THE AR WAS DIRECTED TO FILE THE SUPPOR TING EVIDENCES IN RESPECT OF THE C ASH RECEIVED FOR THE JOB WORK CARRIED OUT AND ALSO THE CASH PAID TO THE JOB WORKS GIVEN. HE EXPRESSED HIS INABLLITY TO FURNISH ANY DETAILS. IN THE ABSENCE OF ANY CONFIRMATION FROM THE PARTIES AND OTHER EVIDENCES, THE ALLEGED CLAIM OF THE APPELLANT THAT THE CASH CREDITS ARE JOB WORK RECEIPTS AND THE WITHDRAWALS ARE JOB WORK PAYMENTS CANNOT BE ACCEPTED. THE ONUS IS ON THE APPELLANT TO PROVE HIS CLAIM. EVEN DU RING THE APPELLATE PROCEEDING, THE APPELLANT WAS NOT IN A POSITION TO FILE THE CORROBORATIVE EVIDENCE THAT THE APPELLANT IS REALLY INTO THE BUSINESS RELATED TO GARMENTS. IN THE ABSENCE OF SUCH. EVIDENCE, THE CLAIM OF THE APPELLANT CANNOT BE ACCEPTED AND TH E ADDITION MADE BY THE AO IS HEREBY SUSTAINED. THE GROUND OF APPEAL IS DISMISSED. 5 . THE LD. AR VEHEMENTLY SUBMITTED BEFORE US THAT THE LD. CIT(A) HAS GROSSLY IGNORED THE SUBMISSION AS MADE BY THE ASSESSEE BEFORE THE CIT(A) AND RECORDED FINDINGS WHICH WERE FACTUALLY INCO RRECT AND WRONG AN D DISMISSED THE APPEAL OF THE ASSESSEE WITHOUT PASSING ANY SPEAKING ORDER . THE FAA HAS NOT GIVEN ANY FINDING ON THE SUBMISSIONS THAT THE SAVING BANK ACCOUNT MAINTAINED WITH T H E ICICI BAN K ON THE BASIS OF WHICH THE A DDITION OF RS.18,67,120/ - WAS 5 2704 /MUM/ 201 4 MADE WAS FULLY DISCLOSED IN THE RETURN OF INCOME FILED BY THE ASSESSEE . THE LD.AR FURTHER SUBMITTED THAT THE ASSESSEE WAS ENGAGED IN THE BUSINESS OF CUTTING THE GARMENTS INTO VARIOUS SIZES AS PER THE REQUIREMENT OF THE PARTY AND STITCHING IT BY ENGAGING THE LABOUR FOR DOING ITS WORK BOTH CONTRACTUAL AND REGULAR F OR WHICH THE LABOURS WERE PAID LABOUR CHARGES. THE LD.COUN S EL ARG UED THAT THE CASH CREDIT DEPOSITED IN THE BANK ACCOUNT BY THE ASSESSEE MAINTAINED WITH THE ICICI BANK WERE PURELY OUT OF BUSINESS RECEIPTS OF THE ASSESSEE AND LIKEWISE THE WITHDRAWALS WERE FOR THE PURPOSES OF INCURRING THE EXPENDITURE ON THE PAYMENT OF LABOUR CHARGES AND OTHER EXPENSES. DURING THE YEAR, TOTAL RECEIPT S WERE WAS TO THE TUNE OF RS.20, 98,720/ - WHICH WERE DEPOSITED INTO TWO BANK ACCOUNT OF THE ASSESSEE MAINTAINED WITH T HE ICICI B A NK AND PUNJAB AND MAHARASHTRA CO - OPERATIVE BANK LIMITED ON THE VARIOUS DATES DURING THE YEAR. THE TOTAL JOB WORK CHARGES PAID TO THE OUTSIDE LABOUR WERE RS. 14,68,340/ - AND THUS RS. 6,30,381/ - - PERTAINING TO THE ASSESSEES OWN INDUSTRIAL UNIT FOR WHICH THE ASSESSEE WAS HAVING MACHINERY AND REGULAR EMPLOYEES ON THE PAY ROLL OF THE ASSESSEE. FINALLY THE LD AR SUBMITTED THAT THE CASE OF THE ASSESSEE BE SET ASIDE TO THE FILE OF THE AO SO THAT THE DEPOSITS AND WITHDRAWALS FROM THE BANK ACCOUNTS OF THE ASSESSEE CAN BE EXPLAINED WITH BILL AND SUPPORTING RECORD. 6 . THE LD.DR ON THE OTHER HAND, OBJECTED TO THE ARGUMENTS OF THE LD.AR BY SUBMITTING THAT THE VARIOUS OPPO RTUNITIES WERE AFFORDED TO THE ASSESSEE BUT NEITHER THE ASSESSEE NOR HIS LD.AR ATTENDED THE PROCEEDING BEFORE THE AO AND 6 2704 /MUM/ 201 4 PRAYED THAT THE ORDER OF THE LD.CIT(A) BE CONFIRMED BY DISMISSING THE APPEAL OF THE ASSESSEE . 7 . WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL PLACED BEFORE US INCLUDING THE ORDERS OF AUTHORITIES BELOW AND BANK STATEMENTS SUBMITTED BY THE LD.AR. FROM THE CLOSE EXAMINATION OF THE BANK STATEMENT SUBMITTED BY THE ASSESSEE, WE FIND THAT THE ASSESSEE HAS REGULARLY DEPOSITED THE AMOUNT S INTO THESE TWO BANK ACCOUNT AND SIMULTANEOUSLY MAKING WITHDRAWALS ON REGULAR BASIS. IN VIEW OF THE SUBMISSIONS OF THE LD.AR AND BANK STATEMENT S OF THE ASSESSEE, WE FIND THAT THE ASSESSEE IS A SMALL ENTREPRENEUR WHO DEPOSITED THE CASH AND CHEQ UES INTO HIS BANK ACCOUNT AND ALSO MADE WITHDRAWALS REGULAR LY FOR THE PURPOSE OF BUSINESS. WE FURTHER FIND FROM THE RECORD S THAT THE AO MADE ASSESSMENT U/S 144 OF THE ACT ALSO AND ASSESSEE COULD NOT APPEAR BEFORE THE AO TO EXPLAIN THE DEPOSITS MADE T HEREIN AND CASH WITHDRAWN FROM THE BANK ACCOUNTS. WE, THEREFORE, ARE OF THE CONSIDERED VIEW THAT ENDS OF JUSTICE WOULD MEET IF THE CASE OF THE ASSESSEE IS RESTORE D BACK TO THE FILE OF THE AO TO DECIDE AFRESH AFTER ALLOWING THE OPPORTUNITY OF BEING HEARD T O THE ASSESSEE , AND NO PREJUDICE WOULD BE CAUSED TO THE REVENUE THEREBY . ACCORDINGLY, WE SET ASIDE THE ORDER OF LD CIT(A) AND RESTORE THE CASE BACK TO THE FILE OF THE AO. THE ASSESSEE IS ALSO DIRECTED TO PRODUCE RELEVANT SUPPORTING DOCUMENTS BEFORE THE AO AN D CO - OPERATE WITH THE AO FOR SPEEDY DISPOSAL OF THE ISSUE. 7 2704 /MUM/ 201 4 8 . IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES . ORDER PRONOUNCED IN THE OPEN COURT ON THIS 22ND DAY OF JUNE, 2016 . S D SD ( SHAILENDRA KUMAR YADAV ) (RAJESH KUMAR) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI ; DATED : 22 .6.2016 SR.PS:SRL: / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. ( ) / THE CIT(A) 4. / CIT CONCERNED 5. , , / DR, ITAT, MUMBAI 6. / GUARD F ILE / BY ORDER, T RUE COPY / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI