MEENAZ S. BUXARIA, MUMBAI V. ITO 18(3)(3), MUMBAI

ITA 2957/MUM/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 78659 (ITAT-MUMBAI)
• Duration Of Justice: 11 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-04-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 02-04-2014
• Assessment Year: 2006-2007
• Appeal Filed On: 17-04-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R K SAHU
• Assessee Lawyers: AJEET MANWANI
• Keywords: Opportunity of being heard
• Section: 143(3); 68; 263

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL G B ENCH, MUMBAI , , , !'# , $ % BEFORE SHRI VIJAY PAL RAO, JM AND SHRI N.K. BIL LAIYA, AM ./ I.T.A. NO.1492/MUM/2011 A N D ./ I.T.A. NO.2957/MUM/2013 ( & & & & / ASSESSMENT YEAR :2006-07 MRS. MEENAZ SHAUKAT BUXARIA, 15, SHUBANI BLDG., DARGAH STREET, MUMBAI-400 016 / VS. THE ITO-18(3)(3), PIRAMAL CHAMBERS, MUMBAI -400 012 ' $ ./ ( ./ PAN/GIR NO. : AAXPB 1881H ( ') / APPELLANT ) .. ( *+') / RESPONDENT ) ') , / APPELLANT BY: SHRI AJEET MANWANI *+') - , / RESPONDENT BY: SHRI R.K. SAHU - ./$ / DATE OF HEARING :02.04.2014 01& - ./$ / DATE OF PRONOUNCEMENT :02.04.2014 2 / O R D E R PER N.K. BILLAIYA, AM: THESE TWO APPEALS BY THE ASSESSEE ARE DIRECTED AGAI NST TWO SEPARATE ORDERS OF THE LD. CIT(A)-29, MUMBAI DT.11.2.2013 P ERTAINING TO A.Y. 2006-07. MRS. MEENAZ BUXARIA 2 2. BEFORE PROCEEDING FURTHER, IT WOULD BE PERTINENT TO UNDERSTAND THE PECULIAR FACTS OF THE CASE. 3. DURING THE COURSE OF THE ORIGINAL ASSESSMENT PRO CEEDINGS U/S. 143(3) OF THE ACT, THE ASSESSING OFFICER NOTICED CE RTAIN DEPOSITS IN THE DEVELOPMENT CREDIT BANK ACCOUNT FOR THE PERIOD 01, .04.2005 TO 31.3.2006. AFTER PERUSING THE BANK STATEMENT VIS- -VIS CASH BOOK , THE TOTAL CASH DEPOSITS MADE DURING THE YEAR CAME TO RS . 21,14,125/- AND THE TOTAL CASH WITHDRAWAL WAS AT RS. 15,77,200/- RESULT ING INTO A DIFFERENCE OF RS. 5,36,925/-. THE ASSESSEE WAS ASKED AS TO WHY A N AMOUNT OF RS. 5,36,925/- SHOULD NOT BE TREATED AS UNEXPLAINED CAS H CREDIT U/S. 68 OF THE ACT. THE ASSESSEE FILED A DETAILED REPLY WHICH WA S NOT ACCEPTED BY THE AO AND THE AO ADDED THE DIFFERENCE AS UNEXPLAINED C ASH CREDIT U/S. 68 AT RS. 5,36,925/-. 4. THE ASSESSEE CARRIED THE MATTER BEFORE THE LD. C IT(A). AFTER CONSIDERING THE FACTS AND THE SUBMISSIONS, THE LD. CIT(A) DIRECTED THE AO TO DELETE THE ADDITION OF RS. 1,63,468/- AND CON FIRMED THE BALANCE AMOUNT OF RS. 3,73,457/- WHICH IS IN APPEAL BEFORE US IN ITA NO. 1492/MUM/2011. 4.1 HOWEVER, THE CIT INVOKED HIS POWERS VESTED IN H IM VIDE PROVISIONS OF SEC. 263 OF THE ACT IN RESPECT OF THE SCRUTINY ASSESSMENT ORDER PASSED U/S. 143(3) OF THE ACT. THE CIT WENT O N TO CONSIDER THE SAME BANK ACCOUNT IN THE DEVELOPMENT CREDIT BANK LTD., M AHIM, MUMBAI. THE CIT WAS OF THE FIRM BELIEF THAT ASSESSMENT ORDE R PASSED BY THE AO IS ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE IN TEREST OF THE REVENUE AND ACCORDINGLY SET ASIDE THE ASSESSMENT ORDER AND DIRE CTED TO PASS FRESH ASSESSMENT ORDER. MRS. MEENAZ BUXARIA 3 5. THE ASSESSEE DID NOT PREFER ANY APPEAL AGAINST T HE ORDER OF THE LD. CIT PASSED U/S. 263 OF THE ACT DT. 29.3.2011. THE AO IN PURSUANT TO THE DIRECTIONS OF THE CIT VIDE ORDER U/S. 263 OF THE AC T ONCE AGAIN ASKED THE ASSESSEE TO EXPLAIN THE DEPOSITS MADE IN THE DEVELO PMENT CREDIT BANK ACCOUNT VIS--VIS CASH AND BANK BALANCE AS PER BAL ANCE SHEET AND TO RECONCILE THE BANK BALANCE AS PER LEDGER AND BANK A CCOUNT. THE ASSESSEE EXPLAINED THAT SHE HAD ENGAGED THE SERVICES OF A CH ARTERED ACCOUNTANT TO FILE THE RETURN OF INCOME WHO DID NOT TAKE PROPER D ETAILS FROM THE ASSESSEE AND PREPARED THE PROFIT AND LOSS A/C AND BALANCE SH EET ON HIS OWN. IT WAS FURTHER EXPLAINED THAT THE ASSESSEE WAS IN A HA BIT OF ISSUING CHEQUE IN FAVOUR OF FRIENDS AND RELATIVES WHO USE TO RETURN T HE CASH TO HER FOR HER OWN USE. IT WAS STATED THAT THE ASSESSEE WAS NOT MA INTAINING BOOKS OF ACCOUNT AND THE BALANCE SHEET PREPARED BY THE CHART ERED ACCOUNTANT WAS ON HIS OWN VOLITION WHICH IS NOT CORRECT. THE AO WA S OF THE FIRM BELIEF THAT THE ASSESSEE FAILED TO EXPLAIN THE BANK DEPOSI TS AND RECONCILE THE BANK BALANCE. THE AO ALSO DID NOT ACCEPT THE THEOR Y OF REPAYMENT OF LOANS AND ADVANCES WHICH WERE ADVANCED BY THE ASSES SEE DURING THE YEAR UNDER CONSIDERATION. THE AO WENT ON TO ADD THE ENT IRE DEPOSIT MADE IN THE DEVELOPMENT CREDIT BANK ACCOUNT AMOUNTING TO RS . 21,14,125/-. 6. THE ASSESSEE CARRIED THE MATTER BEFORE THE LD. C IT(A) BUT WITHOUT ANY SUCCESS. 7. AGGRIEVED BY THE FINDINGS OF THE LD. CIT(A), THE ASSESSEE IS BEFORE US VIDE ITA NO. 2957/MUM/2013. 8. AFTER CAREFULLY CONSIDERING THE ABOVE STATED PEC ULIAR FACTS, IN OUR CONSIDERED VIEW, APPEAL OF THE ASSESSEE IN ITA NO. 1492/MUM/2011 MRS. MEENAZ BUXARIA 4 BECOME INFRUCTUOUS AS THE ORIGINAL ASSESSMENT HAS B EEN MERGED WITH THE NEW ASSESSMENT PURSUANT TO THE ORDER OF THE CIT U/S . 263 OF THE ACT. WE, ACCORDINGLY HOLD ITA NO. 1492/MUM/2011 AS OTIOSE. 9. THE APPEAL WHICH SURVIVES IS ITA NO. 2957/MUM/20 13. THE SOLE GRIEVANCE OF THE ASSESSEE IS THAT THE LD. CIT(A) HA S ERRED IN CONFIRMING THE ADDITION OF RS. 21,14,125/- WITHOUT APPRECIATI NG THE FACTS OF THE CASE. 10. THE LD. COUNSEL FOR THE ASSESSEE STRONGLY SUBMI TTED THAT NEITHER THE AO NOR THE LD. CIT(A) HAVE CONSIDERED THE FACTS PROPERLY. IT IS THE SAY OF THE LD. COUNSEL THAT ON SAME SET OF FACTS IN RESPECT OF SAME BANK ACCOUNT ORIGINALLY AN ADDITION OF RS. 5,36,925/- WA S MADE WHICH WAS REDUCED BY RS. 1,63,468/- BY THE LD. CIT(A). THERE FORE, THE REVENUE AUTHORITIES HAVE GROSSLY ERRED IN MAKING THE ADDITI ON OF THE ENTIRE DEPOSIT OF RS. 21,14,125/-. THE LD. COUNSEL PLEADED THAT T HE ENTIRE ASSESSMENT HAS BEEN FRAMED WITHOUT APPRECIATING THE FACTS WHIC H HAS BEEN CONFIRMED BY THE LD. CIT(A) THEREBY MAKING THE ORDER OF THE L D. CIT(A) ERRONEOUS ON FACTS. 11. THE LD. DEPARTMENTAL REPRESENTATIVE STRONGLY RE LIED UPON THE FINDINGS OF THE LOWER AUTHORITIES. 12. WE HAVE CAREFULLY PERUSED THE ORDERS OF THE LOW ER AUTHORITIES. WE HAVE ALSO THE BENEFIT OF THE ORIGINAL ASSESSMENT OR DER AND THE FIRST APPELLATE AUTHORITY ORDER. WE HAVE ALSO PERUSED TH E ORDER OF THE CIT U/S. 263. IT IS AN UNDISPUTED FACT THAT THE AO HAS ADDE D THE ENTIRE DEPOSIT MADE IN THE DEVELOPMENT CREDIT BANK ACCOUNT. IN OU R CONSIDERED VIEW, THIS ISSUE NEEDS FRESH ADJUDICATION BY THE AO. THE REFORE, IN THE INTEREST OF JUSTICE AND FAIR PLAY, WE RESTORE THIS ISSUE BAC K TO THE FILES OF THE AO. MRS. MEENAZ BUXARIA 5 THE AO IS DIRECTED TO DECIDE AFRESH AFTER GIVING A REASONABLE AND SUFFICIENT OPPORTUNITY OF BEING HEARD TO THE ASSESS EE. THE ASSESSEE IS DIRECTED TO FILE ALL NECESSARY DETAILS/EXPLANATION EXPLAINING THE DEPOSITS IN THE DEVELOPMENT CREDIT BANK ACCOUNT. 13. THE APPEAL FILED BY THE ASSESSEE IN ITA NO. 295 7/M/2013 IS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 2 ND APRIL, 2014 . 2 - 1& $ 3 45 02.04.2014 1 - 6 SD/- SD/- (VIJAY PAL RAO ) (N.K. BILLAIYA) /JUDICIAL MEMBER $ / ACCOUNTANT MEMBER MUMBAI; 4 DATED 02.04.2014 . . ./ RJ , SR. PS 2 2 2 2 - -- - *. *. *. *. 7&. 7&. 7&. 7&. / COPY OF THE ORDER FORWARDED TO : 1. ') / THE APPELLANT 2. *+') / THE RESPONDENT. 3. 8 ( ) / THE CIT(A)- 4. 8 / CIT 5. 96 *. , , / DR, ITAT, MUMBAI 6. 6: ; / GUARD FILE. 2 2 2 2 / BY ORDER, +. *. //TRUE COPY// < << < / = = = = (DY./ASSTT. REGISTRAR)