MANISH LALWANI, MUMBAI V. ITO 16(1)(2), MUMBAI

ITA 2759/MUM/2014

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 7715 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 11 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-03-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 22-04-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Unexplained investment; Transactions in derivatives
• Section: 143(3); 69

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUM BAI , , , , ! BEFORE SHRI RAJENDRA , AM AND SHRI AMARJIT SINGH, J M / I.T.A. NO.2759/MUM/2014 ( '# $# / ASSESSMENT YEAR: 2009-10) SHRI MANISH LALWANI 14, JALAN HOUSE, 52, WALKESHWAR ROAD, MUMBAI 400 006 / VS. INCOME TAX OFFICER 16(1)(2) MUMBAI ./ ./PAN/GIR NO. : AASPL9747R ( /APPELLANT ) .. ( / RESPONDENT ) / DATE OF HEARING: 24.03.2017 /DATE OF PRONOUNCEMENT: 29.03.2017 / O R D E R PER AMARJIT SINGH, JM: THE ASSESSEE HAS FILED THE PRESENT APPEAL AGAINST T HE ORDER DATED 31.12.2013 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS)-27, MUMBAI [HEREINAFTER REFERRED TO AS THE CIT(A)] R ELEVANT TO THE A.Y. 2009-10. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS:- 1. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN CONFIRMING ADDITION MADE OF RS.12,35,002/- UNDER SE CTION 69 OF THE ACT BY THE LEARNED ASSESSING OFFICER. PROVISIO NS OF THE ACT ASSESSEE BY: SHRI HARESH P. SHAH REVENUE BY: SHRI RAJGURU M. V. ITA NO.2759/M/2015 A.Y.2009-10 2 OUGHT TO HAVE BEEN PROPERLY CONSTRUED AND REGARD BE ING HAD TO FACTS OF THE CASE NO SUCH ADDITION OF RS.12,35,002/ - SHOULD HAVE BEEN MADE. REASONS ASSIGNED BY HIM ARE WRONG AND I NSUFFICIENT TO JUSTIFY ADDITION OF RS.12,35,002/- TO THE TOTAL INCOME OF THE APPELLANT. 2. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN CONFIRMING DISALLOWANCES MADE OF RS.5000/- OUT OF C ONVEYANCE EXPENSES AND TELEPHONE EXPENSES BY THE LEARNED ASSE SSING OFFICER. PROVISIONS OF THE ACT OUGHT TO HAVE BEEN PROPERLY CONSTRUED AND REGARD BEING HAD TO FACTS OF THE CASE NO SUCH DISALLOWANCES OF RS.5000/- SHOULD HAVE BEEN MADE. 3. THE ORDER MADE UNDER SECTION 143(3) OF THE ACT B Y THE ASSESSING OFFICER AND CONFIRMED BY THE LEARNED COMMISSIONER O F INCOME TAX (APPEALS) IS ILLEGAL, BAD-IN-LAW, ULTRA VIRUS, WITHOUT ALLOWING REASONABLE OPPORTUNITY OF THE HEARING AND WITHOUT APPRECIATING THE FACTS, SUBMISSION AND EVIDENCES IN THEIR PROPER PERSPECTIVE AND IS LIABLE TO BE ANNULLED. 4. THE APPELLANT CRAVE LEAVE TO ADD, AMEND, ALTER A ND / OR VARY ANY OF THE GROUNDS OF APPEAL BEFORE OR AT THE TIME OF H EARING. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E FILED THE RETURN OF INCOME ON 13.01.2010 DECLARING TOTAL INCOME TO THE TUNE OF RS.3,08,564/- FOR THE A.Y.2009-10. THE RETURN WAS PROCESSED U/S. 143(1) OF THE INCOME TAX ACT, 1961 ( IN SHORT THE ACT). THEREAFTER, T HE CASE WAS SELECTED FOR SCRUTINY UNDER CASS. NOTICE U/S.143(2) OF THE ACT WAS ISSUED AND DULY SERVED UPON THE ASSESSEE. SUBSEQUENTLY, NOTICE U/S .142(1) OF THE ACT WAS ISSUED AND SERVED UPON THE ASSESSEE. THE ASSESSEE DERIVED HIS INCOME FROM BUSINESS AND INCOME FROM OTHER SOURCES. THE BUSINE SS INCOME WAS EARNED BY WAY OF BROKERAGE, F&O PROFIT, COMMISSION, INTERE ST ON LOAN ADVANCED ETC. ACCORDING TO AIR INFORMATION RECEIVED, THE A SSESSEE DEPOSITED CASH IN HIS SAVING BANK ACCOUNT OF ICICI BANK, OPERA HOUSE BANK OF ITA NO.2759/M/2015 A.Y.2009-10 3 RS.21,03,002/- DURING THE F.Y.2008-09. THE ASSESSE E EXPLAINED THAT HE WITHDREW THE SAID AMOUNT FROM THE SAID BANK FIRSTLY , THEREAFTER REDEPOSITED THE SAME, COPY OF BANK STATEMENT WAS ALSO FILED. T HE PEAK AMOUNT WAS ASSESSED TO THE TUNE OF RS.12,35,002/- WHICH WAS AD DED TO THE INCOME OF THE ASSESSEE BY TREATING AS UNEXPLAINED INVESTMENT U/S.69 OF THE ACT. THE ASSESSEE WAS NOT SATISFIED OF THE SAID ADDITION, TH EREFORE, FILED AN APPEAL BEFORE THE CIT(A), WHO CONFIRMED THE SAID ADDITION, THEREFORE, THE ASSESSEE HAS FILED THE PRESENT APPEAL BEFORE US. ISSUE NO.1:- 4. UNDER THIS ISSUE, THE LEARNED REPRESENTATIVE OF THE ASSESSEE HAS ARGUED THAT THE CIT(A) HAS ERRED IN CONFIRMING THE ADDITION MADE OF RS.12,35,002/- U/S.69 OF THE ACT BECAUSE THE ASSESS EE HAS EXPLAINED EACH AND EVERY ENTRY OF CASH WITHDRAWAL AND DEPOSIT ED WHICH WAS NOT VERIFIED BY THE AUTHORITY AND CONSIDERED BY THE AUT HORITY PROPERLY, THEREFORE IN THE SAID CIRCUMSTANCES THE WORK OF PEA K AMOUNT TAKEN AS UNEXPLAINED IS WRONG AGAINST LAW AND FACTS AND IS L IABLE TO BE DELETED. HENCE THE FINDING OF THE CIT(A) IS LIABLE TO BE SET ASIDE. IT IS ALSO ARGUED THAT THE ASSESSEE HAS GIVEN THE DEPOSIT AND WITHDRAWAL STATEMENT WHICH HAS NOT BEEN CONSIDERED BY THE AUTH ORITY BELOW PROPERLY THEREFORE IN THE SAID CIRCUMSTANCES THE AD DITION ON THE BASIS OF PEAK AMOUNT IS LIABLE TO BE SET ASIDE IN ACCORDA NCE WITH LAW. HOWEVER, THE LEARNED DEPARTMENTAL REPRESENTATIVE HA S SUPPORTED THE ORDER PASSED BY THE CIT(A) IN QUESTION. WITH DUE R EGARDS TO THE CONTENTION RAISED BY THE LEARNED REPRESENTATIVE OF THE PARTIES AND ITA NO.2759/M/2015 A.Y.2009-10 4 PERUSING THE RECORD CAREFULLY, IT IS NOT IN DISPUTE THAT THE ASSESSEE HAS GIVEN THE WITHDRAWAL AND DEPOSIT STATEMENT FOR THE PERIOD W.E.F. 01.04.2008 TO 31.03.2009 IN WHICH THE DEPOSIT IS TO THE TUNE OF RS.21,03,002/- AND WITHDRAWALS IS TO THE TUNE OF RS .28,95,000/-. ON APPRAISAL OF THE SAID STATEMENT WE NOWHERE FOUND AN Y ILLEGALITY AND INFIRMITY SPECIFICALLY IN THE CIRCUMSTANCES WHEN TH E AUTHORITY HAS NOT ARRIVED AS THIS CONCLUSION THAT THE DEPOSIT IS UNEX PLAINED U/S.69 OF THE ACT. THE PEAK METHOD WOULD BE APPLICABLE IN CASE O F NEGATIVE CASH IN HAND AND ITS DEPOSITS. WITHDRAWAL OF AN AMOUNT OF RS.28,95,000/- ITSELF SPEAKS ABOUT THE CASH IN HAND WITH THE ASSES SEE WHO DEPOSITED THE SAME IN HIS BANK ACCOUNT. THE SAID ENTRIES HAV E ALSO BEEN REFLECTED IN THE ACCOUNTS BOOKS WHICH WERE NOT DISC REDITED BY THE ASSESSING OFFICER. ANYHOW, THIS PIECE OF EVIDENCE ALONGWITH ENTRIES MADE IN THE CASH BOOKS HAVE NOT BEEN PROPERLY CONSI DERED WHILE DECIDING THE ISSUE OF THE ASSESSEE. IN VIEW OF THE SAID CIRCUMSTANCES WE ARE OF THE VIEW THAT THIS MATTER IS REQUIRED TO BE EXAMINED AFRESH BY THE ASSESSING OFFICER IN THE LIGHT OF THE EVIDEN CE ADDUCED BY THE ASSESSEE IN ACCORDANCE WITH LAW. ACCORDINGLY, WE S ET ASIDE THE FINDING OF THE CIT(A) ON THIS ISSUE AND DIRECT THE ASSESSING OFFICER TO DECIDE THE MATTER AFRESH IN VIEW OF THE EVIDENCE AD DUCED BY THE ASSESSEE IN ACCORDANCE WITH LAW BY GIVING AN OPPORT UNITY OF BEING HEARD. ACCORDINGLY, THIS ISSUE IS DECIDED IN FAVOU R OF THE ASSESSEE AGAINST THE REVENUE. ITA NO.2759/M/2015 A.Y.2009-10 5 ISSUE NO.2:- 5. ISSUE NO.2 IS NOT PRESSED BY THE LEARNED REPRESE NTATIVE OF THE ASSESSEE, THEREFORE IN THE SAID CIRCUMSTANCES THIS ISSUE IS DECIDED AGAINST THE ASSESSEE IN FAVOUR OF THE REVENUE BEING NOT PRESSED. ISSUE NO.3&4:- 6. ISSUE NO.3 & 4 ARE FORMAL IN NATURE WHICH NOWHER E REQUIRE ANY ADJUDICATION. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS HEREBY ORDERED TO BE PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 29 TH MARCH, 2017 . SD/- SD/- (RAJENDRA) (AMARJIT SINGH) / ACCOUNTANT MEMBER /JUDICIAL MEMBER MUMBAI; DATED : #$ , 2017 MP & '$ / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ) ( ) / THE CIT(A)- 4. ) / CIT 5. , , , , / DR, ITAT, MUMBAI 6. + -$ / GUARD FILE. / BY ORDER, ! ! //TRUE COPY// / /(DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI