MAN EQUIPMENT CO. P.LTD, MUMBAI V. ACIT CEN CIR 5(4), MUMBAI

ITA 2746/MUM/2017

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 3754 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-02-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2012-2013
• Appeal Filed On: 17-04-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: CHAITANYA ANJARIYA
• Keywords: Unexplained cash credit; Income from undisclosed sources
• Section: 68; 143(3); 234B

Judgement Text

IN THE INC OME TAX APPELLATE TRIBUNAL D BENCH, MUMBAI BEFORE HONBLE SH. SHAMIM YAHYA , AM & HONBLE SH. SANDEEP GOSAIN, JM ./ I.T.A. NO . 2746/MUM/2017 ( / ASSESSMENT YEAR: 2012 - 13 ) MAN EQUIPMENT CO. P. LTD. 69 SVP ROAD, DONGRI, MUMBAI - 400 009 / VS. ACIT CEN CIR 5(4), PIRAMAL CHAMBERS, LALBAUG, MUMBAI - 400012 ./ ./ PAN NO. A A A CM9716E ( / APPELLANT ) : ( / RESPONDENT ) / APPELLANT BY : NONE / RESPONDENTBY : SHRI CHAITANYA ANJARIYA , D R / DATE OF HEARING : 05.12 .2018 / DATE OF PRONOUNCEMENT : 11.02.2019 / O R D E R PER SANDEEP GOSAIN, J UDICIAL MEMBER : THE P RESENT APPE AL FILED BY THE ASSESSEE IS AGAINST THE ORDER OF LD. CIT (APPEAL) 53 , MUMBAI DATED 31.10.16 F OR AY 2012 - 13 ON THE GROUNDS MENTIONED HEREIN BELOW: - 2 I.T.A. NO. 2746 /MUM/201 7 MAN EQUIPMENT CO. P. LTD. 1. THE LEARNED CIT (A) HAS ERRED IN UPHOLDING THE ACTION OF THE LEARNED ASSESSING OFFICER IN MAKING ADDITION OF RS. 6,62,16,000 / - ON ACCOUNT OF UNEXPLAINED CASH CREDIT U/S 68 OF THE INCOME TAX ACT, 1961. 2. THE LEARNED CIT (A) HAS ERRED IN UPHOLDING THE ACTION OF THE LEARNED ASSESSING OFFICER IN LEVYING INTEREST ON THE APPELLANT UNDER SECTIONS 234B OF THE ACT 3. THE APPELLANT CRAVES LEAVE TO ADD TO AND/ OR AMEND AND/ OR DEL ETE AND/ OR MODIFY AND/ OR ALTER THE AFORESAID GROUNDS OF APPEAL AS AND WHEN THE OCCASION DEMANDS. 4. ALL THE AFORESAID GROUNDS OF APPEAL ARE INDEPENDENT, IN THE ALTERNATIVE AND WITHOUT PREJUDICE TO ONE ANOTHER. 2. AT THE VERY OUTSET, IT IS NOTICED THAT NONE HAS APPEARED ON BEHALF OF ASSESSEE IN SPITE OF CALLS AND EVEN NO APPLICATION FOR ADJOURNMENT WAS MOVED. FROM THE ORDERSHEET, WE NOTICED THAT ACKNOWLEDGMENT HAS BEEN RECEIVED BACK AFTER SERVICE OF NOTICE THROUGH RPAD. ON THE OTHER HAND L D. DR IS PRES ENT IN THE COURT AND IS READY WITH ARGUMENTS. THEREFORE WE HAVE DECIDED TO 3 I.T.A. NO. 2746 /MUM/201 7 MAN EQUIPMENT CO. P. LTD. PROCEED WITH THE HEARING OF THE CASE EX - PA RTE WITH THE ASSISTANCE OF THE L D. DR AND THE MATERIAL PLACED ON RECORD. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF IMPORT AND TRADING OF EQUIPMENT AND TRADING IN METAL SCRAP/HIRING OF MACHINES. THE ASSESSEE HAD E - FILED ITS RETURN OF INCOME DECLARING TOTAL INCOME OF RS. NIL ON 23.01.14. SUBSEQUENTLY THE CASE WAS SELECTED FOR S CRUTINY AND AFTER SERVING STATUTORY NOTICES AND PROVIDING OPPORTUNITY OF HEARING, ASSESSMENT ORDER U/S 143(3) OF THE I.T. ACT WAS PASSED ON 31.03.15 DETERMINING THE TOTAL INCOME OF THE ASSESSEE AT RS. 6,68,11,490, THEREBY MAKING CERTAIN ADDITIONS/DISALLOWA NCES. AGGRIEVED BY THE ORDER OF AO, ASSESSEE PREFERRED APPEAL BEFORE LD. CIT(A) AND LD. CIT(A) AFTER CONSIDERING THE CASE OF BOTH THE PARTIES, DISMISSED THE APPEAL OF THE ASSESS EE . NOW BEFORE US, THE ASSESSEE HAS PREFERRED THE PRESENT APP EAL BY RAISING THE ABOVE GROUND . 4 I.T.A. NO. 2746 /MUM/201 7 MAN EQUIPMENT CO. P. LTD. 4 . THE SOLITARY GROUND S RAISED BY THE ASSESSEE RELATES TO CHA LLENGING THE ORDER OF LD. CIT(A) IN UPHOLDING THE ACTION OF AO IN MAKING ADDITION OF RS. 6,62,16,000/ - ON ACCOUNT OF UNEXPLAINED CASH CREDIT U/S 68 OF THE INCOME TAX ACT, 1961. 5 . WE HAVE HEARD LD. DR AND WE HAVE ALSO PERUSED THE MATERIAL PLACED ON RECORD AS WELL AS THE ORDERS PASSED BY REVENUE AUTHORITIES. BEFORE WE DECIDE THE MERITS OF THE CASE, IT IS NECESSARY TO EVALUATE THE ORDERS PASSED BY LD. CIT(A). THE LD. CIT(A ) HAS DEALT WITH THE ABOVE GROUND RAISED BY THE ASSESSEE IN PARA NO. 5.3.1 & 5.3.2 OF ITS ORDER AND THE SAME IS REPRODUCED BELOW: - 5.3.1 I HAVE PERUSED THE MATERIALS AVAILABLE ON MY RECORD. THE POINT FOR ADJUDICATION IS WHETHER THE A.O. WAS JUSTIFIED IN MAKING ADDITION OF RS.6,62,16,000/ - ON ACCOUNT OF UNEXPLAINED CASH DEPOSITS IN BANK ACCOUNT U/S.68 OF THE ACT. AT THE OUTSET, IT IS PERTINENT TO MENTION THAT SINCE CASH OF RS.6,62,16,000/ - WAS FOUND TO HAVE BEEN DEPOSITED IN THE ACCOUNT OF THE APPELLANT WIT H THE DCB DURING THE RELEVANT PERIOD, THE ONUS LIES 5 I.T.A. NO. 2746 /MUM/201 7 MAN EQUIPMENT CO. P. LTD. ON THE ASSESSEE TO FURNISH EXPLANATION ABOUT THE NATURE AND SOURCE OF ACQUISITION OF SUCH CASH. IN THIS CONNECTION, IT IS NOTICED FROM THE RECORD THAT THE APPELLANT HAS FAILED TO DISCHARGE THE BURDEN PLAC ED ON IT TO SATISFACTORILY EXPLAIN THE NATURE AND SOURCE OF ACQUISITION OF AFORESAID CASH DEPOSITED INTO THE BANK ACCOUNT. IT IS A MATTER OF RECORD THAT THE APPELLANT HAS NOT FURNISHED DETAILS OF CASH RECEIVED FROM VARIOUS CUSTOMERS TO WHOM ADVANCES WERE G IVEN DURING THE RELEVANT PERIOD. THE APPELLANT HAS NOT PLACED ON RECORD ANY COGENT MATERIALS TO SUBSTANTIATE THE CLAIM THAT THE CASH WITHDRAWALS FROM THE BANK ACCOUNT WERE NOT UTILIZED FOR OTHER EXPENSES OR INVESTMENT BUT WERE AVAILABLE FOR MAKING SUBSEQ UENT DEPOSITS IN THE SAID BANK ACCOUNT. THE APPELLANT HAS NOT FURNISHED EVEN LEDGER ACCOUNTS OF THE PARTIES TO WHOM THE ADVANCES WERE GIVEN OR FROM WHOM CASH WAS ALLEGEDLY RECEIVED AGAINST SUCH ADVANCES. AS POINTED OUT BY THE A.O., THE MODE OR MANNER OF GI VING SUCH ADVANCES AND THE PURPOSES OF SUCH ADVANCES HAVE ALSO NOT BEEN ESTABLISHED BY THE APPELLANT. I AM ALSO IN AGREEMENT WITH THE A.O.'S FINDING THAT THE APPELLANT HAD FAILED TO ESTABLISH THE NEXUS BETWEEN THE AMOUNT OF ADVANCES GIVEN AND THE AMOUNT OF ADVANCES RECEIVED BACK IN CASH BEFORE THE SAME WERE ALLEGEDLY DEPOSITED INTO THE BANK. THE APPELLANT HAS ALSO NOT BROUGHT OUT THE 6 I.T.A. NO. 2746 /MUM/201 7 MAN EQUIPMENT CO. P. LTD. CIRCUMSTANCES OR BUSINESS EXIGENCIES UNDER WHICH THE SAID ADVANCES WERE RECEIVED BACK IN CASH. IN THIS REGARD. THE APPELLANT' S RELIANCE ON THE DECISION IN THE CASE OF CHETAN DAS CITED ABOVE WILL BE OF NO HELP, BECAUSE THAT CASE WAS DECIDED IN VIEW OF ITS OWN PECULIAR FACTS AND THE APPELLANT HAS NOT MADE ANY ATTEMPT TO DEMONSTRATE ANY PARITY OF FACTS WITH THOSE OF THE AFORESAID C ASE. 5.3.2. FURTHER, THE AO IS FOUND TO HAVE RIGHTLY REJECTED THE APPELLANTS CONTENTION THAT THE CASH OF RS. 6,62,16,000/ - DEPOSITED INTO THE BANK ACCOUNT WAS NOTHING BUT ROLL OVER/RECYCLING OF DISCLOSURE OF RS. 3.60 CRORES IN THE NATURE OF PEAK CASH CRED IT MADE BY THE APPELLANT DURING THE COURSE OF SEARCH ON 13.02.2009 RELEVANT TO A.Y. 2 009 - 10 ON THE GROUND THAT, THE APPELLANT HAD NOT FURNISHED ANY EVIDENCE TO ESTABLISH THE NEXUS BETWEEN THE SAID DISCLOSURE MADE ON 13.02.2009 AND THE CASH DEPOSITS MADE I N DCB DURING F.Y.2011 - 12 RELEVANT TO THE A.Y. UNDER CONSIDERATION. IN THIS CONNECTION, IT IS NOTICED F ROM THE RECORD THAT THE AFORESAID AMOUNT OF PEAK CASH CREDIT OF RS.3.60 CRORES HAD ALREADY BEEN INTRODUCED BY THE APPELLANT IN ITS BOOKS OF ACCOUNT FOR F. Y.2008 - 09 RELEVANT TO A.Y.2009 - 10 SO THAT THE CLOSING CASH IN HAND AS ON 31.03.2009 WAS ! RS.;4,90,46,419A. SINCE THE SAID AMOUNT HAD 7 I.T.A. NO. 2746 /MUM/201 7 MAN EQUIPMENT CO. P. LTD. ALREADY BEEN INCORPORATED IN BOOKS OF ACCOUNT OF THE APPELLANT IN A.Y.2009 - 10, IT CAN BY NO STRETCH OF IMAGINATION BE SAI D T HAT 'THE SAME CASH WAS UTILIZED FOR THE PURPOSE OF DEPOSITING INTO THE BANK ACCOUNT' OF THE APPELLANT. IT IS A MATTER OF R E CORD THAT THE APPELLANT COMPANY HAD OPENING CASH BALANCE OF RS.60,87,419/ - WHICH CLEARLY SHOWS THAT THE AFORESAID CASH OF RS3.60 CROR ES BROUGHT INTO THE BOOKS OF ACCOUNT, IN A.Y.2009 - 10 HAD ALREADY BEEN UTILIZED IN THE INTERVENING ACCOUNTING PERIODS RELEVANT TO A.YS.2010 - 11 AND 2011 - 12 SO THAT THE CASH IN HAND AS ON 01.04.2011 HELD BY THE APPELLANT STOOD AT RS.60,87,419/ - . THEREFORE, TH E APPELLANT ONCE AGAIN CANNOT TAKE THE PLEA THAT THE SAID AMOUNT WAS AVAILABLE TO IT IN THE F.Y. RELEVANT TO THE A.Y. UNDER CONSIDERATION FOR IBEING DEPOSITED INTO THE SAID BANK ACCOUNT. IN VIEW OF T HIS, THE APPELLANT'S RELIANCE ON THE CASE OF DHARAMDAS AGARWAL CITED ABOVE WILL BE OF NO AVAIL, BECAUSE IN THAT CASE, THE HON'BLE TRIBUNAL HAD ACCEPTED THE ASSESSEE'S CLAIM THAT UNPROVED CASH CREDITS REPRESENTED INCOME FROM UNDISCLOSED SOURCES ALREADY TAXED IN EARLIER YEARS WHEREAS NO SUCH FACTS OR CIRCUMSTANC ES ARE FOUND TO BE EXISTING IN THE PRESENT CASE. IN VIEW OF THE ABOVE DISCUSSION, I DO NOT FIND ANY ERROR OR INFIRMITY IN 'THE FINDING REACHED BY THE A.O. THAT THE APPELLANT HAD FAILED TO SATISFACTORILY EXPLAIN AND SUBSTANTIATE THE 8 I.T.A. NO. 2746 /MUM/201 7 MAN EQUIPMENT CO. P. LTD. SOURCE OF CASH DEPOSITED INTO THE AFORESAID BANK ACCOUNT WITH DCB. THEREFORE, THE ADDITION ON ACCOUNT OF UNEXPLAINED CASH DEPOSITS AGGREGATING TO RS. 6,62,16,000/ - MADE BY THE AO U/S 68 OF THE ACT IS UPHELD. GROUNDS BEARING NOS.2 AND 3 ARE FOUND TO BE DEVOID OF MERIT AND ARE ACCO RDINGLY DISMISSED. 6. AFTER HAVING GONE THROUGH THE ORDERS PASSED BY REVENUE AUTHORITIES AND CONSIDERING THE FACTS AS DISCUSSED ABOVE, WE FIND THAT LD. CIT(A) AFTER APPREC IATING THE FACTS OF THE CASE HAD RIGHTLY CONCLUDED THAT THE CASH OF RS.6,62,16,000/ - WAS FOUND TO HAD BEEN DEPOSITED IN THE ACCOUNT OF THE APPELLANT WITH THE DCB DURING THE RELEVANT PERIOD, THEREFORE THE ONUS LIES ON THE ASSESSEE TO FURNISH EXPLANATION ABOUT THE NATURE AND SOURCE OF ACQUISITION OF SUCH CASH. IN THIS CONNECT ION, HOWEVER THE APPELLANT HAD FAILED TO DISCHARGE THE BURDEN PLACED ON IT TO SATISFACTORILY EXPLAIN THE NATURE AND SOURCE OF ACQUISITION OF AFORESAID CASH DEPOSITED INTO THE BANK ACCOUNT. THE APPELLANT HAD NOT FURNISHED DETAILS OF CASH RECEIVED FROM VARI OUS CUSTOMERS TO WHOM ADVANCES WERE GIVEN DURING THE RELEVANT PERIOD. THE APPELLANT HAS NOT PLACED ON RECORD ANY COGENT MATERIALS TO SUBSTANTIATE THE CLAIM THAT THE CASH 9 I.T.A. NO. 2746 /MUM/201 7 MAN EQUIPMENT CO. P. LTD. WITHDRAWALS FROM THE BANK ACCOUNT WERE NOT UTILIZED FOR OTHER EXPENSES OR INVESTMENT BUT WERE AVAILABLE FOR MAKING SUBSEQUENT DEPOSITS IN THE SAID BANK ACCOUNT. EVEN THE APPELLANT HAD NOT FURNISHED EVEN LEDGER ACCOUNTS OF THE PARTIES TO WHOM THE ADVANCES WERE GIVEN OR FROM WHOM CASH WAS ALLEGEDLY RECEIVED AGAINST SUCH ADVANCES. THE MODE O R MANNER OF GIVING SUCH ADVANCES AND THE PURPOSES OF SUCH ADVANCES HAD ALSO NOT BEEN ESTABLISHED BY THE APPELLANT. THEREFORE, LD. CIT(A) HAD RIGHTLY DISMISSED THIS GROUND. 7. EVEN BEFORE US, N O NEW FACTS O R CONTRARY JUDGMENTS HAVE BEEN BROUGHT ON RECORD BEFORE US I N ORDER TO CONTROVERT OR REBUT THE FINDINGS SO RECORDED BY LD. CIT(A). THEREFORE, THERE ARE NO REASON S FOR US TO INTERFERE INTO OR DEVIATE FROM THE FINDINGS SO RECORDED BY THE LD.CIT(A). HENCE , WE ARE OF THE CONSIDERED VIEW THAT THE FINDINGS SO RECORDED BY THE LD. CIT (A) ARE JUDICIOUS AND ARE WE LL REASONED. RESULTANTLY, THESE GROUND RAISED BY THE ASSESSEE STANDS DISMISSED . 10 I.T.A. NO. 2746 /MUM/201 7 MAN EQUIPMENT CO. P. LTD. 8 . IN THE NET RESULT , THE APPEAL FILED BY THE ASSESSEE STANDS DISMISSED WITH NO ORDER AS TO COST. ORDER PRONOUNCED IN THE OPEN COURT ON 11 TH FEB , 2019. SD/ - SD/ - ( SHAMIM YAHYA ) (SANDEEP GOSAIN) / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI ; DATED : 11 . 02 .201 9 SR.PS . DHANANJAY / 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 I LE / BY ORDER, . / (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI