JAVED ASGARALI SHAIKH, MUMBAI V. DCIT CEN CIR 42, MUMBAI

ITA 310/MUM/2011

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 9086 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 11 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-12-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: I
• Assessment Year: 2004-2005
• Appeal Filed On: 12-01-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: C TRIPURA SUNDARI
• Keywords: Unexplained investment; Additional evidence
• Section: 153A; 69; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH I, MUMBAI BEFORE SHRI I.P. BANSAL, JUDICIAL MEMBER AND SHRI D. KARUNAKARA RAO, ACCOUNTAT MEMBER I.T.A. NO. 310/M/2011 (AY:2004-2005) I.T.A. NO. 311/M/2011 (AY:2007-2008) SHRI JAVED ASGARALI SHAIKH, ROOM NO.52, BLDG. NO.13, KANCHAN (HIG) CHS LTD, GIC QUARTER COMPOUND, BADRA RECLAMATION, BANDRA (W), MUMBAI 400 050. PAN: BOHPS0657B VS. DY. CIT, CENTRAL CIRCLE-42, 6 TH FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI 400 020. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI JAYANT R. BHATT RESPONDENT BY : SMT. C. TRIPURASUNDARI, CIT - DR DATE OF HEARING: 17.12.2012 DATE OF ORDER: 21.12.2012 O R D E R PER D. KARUNAKARA RAO, AM: THERE ARE TWO APPEALS UNDER CONSIDERATION AND BOTH OF THEM ARE FILED BY THE ASSESSEE AGAINST THE COMMON ORDER OF CIT (A)-38, MU MBAI DATED 30.9.2010. WHILE ITA NO.310 AND 311/M/2011 RELATE TO THE AY 2004-200 5 AY 2007-2008 RESPECTIVELY. CONSIDERING THE CONNECTIVITY OF ISSUES AND FACTS, B OTH THE APPEALS ARE CLUBBED AND ADJUDICATED IN THIS COMMON ORDER. THE APPEAL-WISE A DJUDICATION IS GIVEN IN THE FOLLOWING PARAGRAPHS. I.T.A. NO. 310/M/2011 (AY:2004-2005) 2. IN THIS APPEAL ASSESSEE RAISED THE FOLLOWING GROU NDS WHICH READ AS UNDER: 1. CIT (A) HAS ERRED IN CONFIRMING AN ADDITION OF RS. 2,45,182/- ON ACCOUNT OF INVESTMENT IN FIXED DEPOSIT WITHOUT APPRECIATING THE FACT THAT THE SAME WAS NOT AN INVE STMENT MADE DURING THE YEAR BUT WAS A RENEWAL OF EARLIER FDR MADE BY THE ASSESSEE IN EARLIER YEARS. 2. CIT (A) HAS ALSO ERRED IN NOT APPRECIATING THE F ACT THAT THE APPELLANT HAD EXPLAINED SUCH INVESTMENT BY SWORN ST ATEMENT IN ABSENCE OF DIRECT EVIDENCE AVAILABLE. CIT (A) HAS ALSO ERRED NOT 2 APPRECIATING THE FACT THAT EVEN THE AO HAS ALSO NOT BROUGHT ON RECORD ANY MATERIAL TO SHOW THAT THE SAID INVESTMEN T WAS MADE DURING THE YEAR UNDER CONSIDERATION. 3. BRIEFLY STATED RELEVANT FACTS OF THE CASE ARE TH AT ASSESSEE IS ENGAGED IN THE BUSINESS OF RUNNING OF GUEST HOUSE AT METRO HOUSE, SHAHID BHAGATSINGH ROAD, COLABA, MUMBAI. HE FILED RETURN OF INCOME U/S 143(3 ) R.W.S 153A OF THE ACT AND THE ASSESSMENT WAS COMPLETED DETERMINING THE TOTAL INCO ME AT RS. 3,67,690/- AGAINST THE RETURNED INCOME OF RS. 85,000/-. AO MADE ADDIT ION ON ACCOUNT OF UNEXPLAINED INVESTMENT OF RS. 2,45,182/- AND THE SAME IS THE B ONE OF CONTENTION BEFORE US. ASSESSEE CLAIMS THAT THE SAID SUM CONSTITUTES RENEW AL OF AN EXISTING FDR AND PER CONTRA , THE AO HOLDS THAT THE SAME IS AN UNEXPLAINED INVE STMENT. RELEVANT FACTS ON THIS ISSUE ARE THAT AO GATHERED INFORMATION FROM BA NK OF BARODA, COLABA BRANCH, WHERE THE ASSESSEE HAD A FIXED DEPOSIT VIDE ACCOUNT NO.26031 / 72083. THE VALUE OF THE SAME AS ON 5.3.2004 WAS RS. 2,45,182/-. ASSESS EE WAS ASKED TO FURNISH THE SOURCE OF THE SAME FOR WHICH ASSESSEE DID NOT HAVE ANY DETAILS AND THE BANKERS ARE NOT COOPERATIVE TO THE ASSESSEE IN SUPPLY OF THE IN FORMATION RELATING THE DATE OF MAKING OF THE FDR ORIGINALLY. THEREFORE, AO PROCEED ED TO MAKE ADDITION AS UNEXPLAINED INVESTMENT. AGGRIEVED WITH THE DECISIO N OF THE AO, ASSESSEE FILED AN APPEAL BEFORE CIT (A). 4. BEFORE THE CIT (A), ASSESSEE SUBMITTED THAT THE IMPUGNED FIXED DEPOSIT RECEIPTS- FDR EXISTED IN THE EARLIER YEARS IE PRIOR TO THE YEAR 2000 AND THE SAME IS A RENEWED IN THIS YEAR AND THEREFORE, THE SOURCES FOR THE IMPUGNED FDR STANDS EXPLAINED. HENCE, THERE IS NEED FOR ANY ADDITION IN THIS YEAR ON THIS ACCOUNT. IN SUPPORT OF THE SAME, ASSESSEE FURNISHED AN AFFIDAVI T AND THE RELEVANT PARA OF AFFIDAVIT READS AS UNDER: THAT DURING THE YEAR UNDER CONSIDERATION (IE ASSESS MENT YEAR 2004-2005) AN FDR WAS MADE FOR RS. 2,45,182/- WHICH WAS NOT A NEW INVESTMENT MADE BY ME BUT WAS RENEWAL OF MY OLD FDR MADE PRIOR TO 1.4.2000 AND THAT I HAVE NOT EARNED MY OTHER INCOME FOR SUCH RENEWAL OF FDR AND SINCE THE BANKERS ARE UNABLE TO PROVIDE ME WITH EAR LIER DETAILS OF FDR WHICH HAS BEEN RENEWED. I AM TAKING THIS AFFIDAVIT TO SU PPORT MY CLAIM THAT THE AMOUNT WAS MERELY A RENEWAL OF FDR AND NOT A NEW IN VESTMENT MADE DURING THE YEAR. 3 4.1. CIT (A) DID NOT ACCEPT THE SAME IN THE ABSENCE OF ADEQUATE AND DIRECT EVIDENCE IN SUPPORT OF MAKING OF THE FDR PRIOR TO 2 000. ASSESSEE ALSO FURNISHED A LETTER FROM THE BANK. HE DID NOT ACCEPT THE CONTENT S MENTIONED IN THE LETTER DT 9.12.2009 FROM THE BANKER, WHICH SUPPORTS THE CLAIM OF THE ASSESSEE. ACCORDINGLY, INVOKING THE PROVISIONS OF SECTION 69 OF THE ACT, C IT (A) CONFIRMED THE ADDITION. 5. BEFORE US, IT WAS ARGUED THAT THE AFFIDAVIT AS W ELL AS THE LETTER OF THE BANK DATED 9.12.2009 SUGGESTS THAT THESE AMOUNTS WERE RE NEWED ONE AND READ OUT THE RELEVANT PARA IN THIS REGARD WHICH READS AS UNDER: FD ACCOUNT NO. 26031 DATED 5.3.2004 FOR RS. 2,45,182/- WAS MATURED ON 28.2.2005 . THE MATURED FD WAS FURTHER RENEWED FOR RS. 2,56,527/- UNDER FD A/C NO. 72083. THE FD NO.72083 WAS PAID O N 8.11.2005 AND AMOUNT OF RS. 2,62,916/- WAS CREDITED TO SB A/C NO. 9567411 AFTER DEDUCTING RS. 831/- TDS ON FD INTEREST. 6. RELYING ON THE EXPRESSION EXPRESSIONS RENEWED USED IN THE ABOVE LETTER IN CONNECTION WITH THE FIXED DEPOSIT AND THE CONTENTS OF THE AFFIDAVIT, AO SHOULD HAVE BELIEVED THE ASSESSEE THAT IT IS A CASE OF RENEWED FIXED DEPOSIT AND NOT A FRESH FIXED DEPOSIT FOR WHICH SOURCE OF INCOME ARE SOUGHT BY THE AO. AO SHOULD HAVE ACCEPTED THE FACTS THAT THIS FIXED DEPOSIT WAS MADE PRIOR TO THE YEAR UNDER CONSIDERATION, DETAILS RELATING TO DATE OF INITIAL DEPOSIT AND COPY OF THE FDR ETC, ARE NOT READILY AVAILABLE WITH THE ASSESSEE. HE FURTHER SUBMITTED THAT WHEN THE ASSESSEE MADE A STATEMENT IN THE FORM OF AN AFFIDAVIT SUGG PORTED BY THE LETTER FROM THE BANKER, THE ONUS SHIFTS TO THE AO AND HE SHOULD PR OVE THAT THE FDR IN QUESTION IS THE NEW ONE MADE AND NOT OUT OF THE RENEWAL OF THE EXISTING ONE. 7. PER CONTRA, LD DR VEHEMENTLY ARGUED STATING THAT THIS IS A CASE OF ASSESSEES FAILURE TO PROVE THAT THE IMPUGNED FIXED DEPOSIT WA S MADE IN THE YEAR UNDER CONSIDERATION. 8. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE O RDERS OF THE REVENUE AUTHORITIES AS WELL AS THE PAPERS FILED BEFORE US. WE HAVE CRITICALLY GONE THROUGH THE EXPRESSION OF THE ASSESSEE IN THE AFFIDAVIT AND THE LETTER OF THE BANKER. WE HAVE EXTRACTED THE RELEVANT CONTENTS OF THESE DOCUMENTS IN THE PARAGRAPHS ABOVE. THE 4 EXTRACTS MADE ABOVE CERTAINLY INDICATE THAT THE AMO UNTS CREDITED IN THE BOOKS OF ACCOUNTS RELATES TO THE FIXED DEPOSIT ACCOUNT WHICH WAS RENEWED BY THE BANK IN THE YEAR UNDER CONSIDERATION. THE EXPRESSION RENEWAL SU GGESTS THE EXISTING ONE AND IT EXISTED IN THE PERIOD PRIOR TO YEAR 2004 AS STATED BY THE ASSESSEE. AO HAS NOT CONTROVERTED THE SAME BY BRING ANY EVIDENCE IN SUPP ORT OF THE ALLEGATION. IT IS ALSO A FACT THAT THE CONTENTS OF THE AFFIDAVITS ARE NOT CO NTROVERTED BY THE ASSESSING OFFICER BRINGING ANY ADDITIONAL EVIDENCE AGAINST THE ASSESS EE. IN SUCH CIRCUMSTANCES, WE ARE OF THE OPINION THAT THE ASSESSING OFFICER FAILE D TO DISCHARGE THE ONUS SHIFTED ONTO HIM. ACCORDINGLY, GROUNDS RAISED BY THE ASSESSEE A RE ALLOWED . 9. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . I.T.A. NO. 311/M/2011 (AY:2007-2008) 10. THIS APPEAL FILED BY THE ASSESSEE ON 12.1.2011 IS AGAINST THE ORDER OF CIT (A)- 38, MUMBAI DATED 30.9.2010 FOR THE ASSESSMENT YEAR 2007-2008. IN THIS APPEAL, ASSESSEE RAISED THE FOLLOWING EFFECTIVE GROUND WHIC H READS AS UNDER: CIT (A) HAS ERRED IN CONFIRMING AN ADDITION OF RS. 54,000/- ON ACCOUNT OF CASH DEPOSITED IN THE SAVINGS BANK ACCOUNT WITHOUT APPRECIATING THE WITHDRAWALS MADE FROM THE BANK AND CASH AVAILABLE W ITH THE APPELLANT AS WAS EXPLAINED BY THE APPELLANT. 11. RELEVANT FACTS IN THIS REGARD ARE THAT THE ASSE SSING OFFICER NOTICED A CASH DEPOSITS OF RS. 54,000/- AND SOUGHT EXPLANATION FOR THE SOURCE OF THE SAME. ASSESSEE SUBMITTED THAT THE CASH WITHDRAWN FROM THE BANK ACCOUNTS FOR OTHER DOMESTIC USES IS A SOURCE FOR THE REDEPOSIT. UNUSE D CASH WITHDRAWALS ARE REPOSITED AND THEREFORE THE STAND OF THE ASSESSEE SHOULD BE A CCEPTED. REVENUE AUTHORITIES SOUGHT THE HELP OF THE BANK STATEMENTS AND CASH FLO W ANALYSIS IN SUPPORT OF THE EXPLANATION OF THE ASSESSEE. IN THE ABSENCE OF THE REQUIRED INFORMATION, AO MADE ADDITION AND IN FIRST APPELLATE PROCEEDINGS, THE CI T (A) CONFIRMED THE SAME. 12. DURING THE PROCEEDINGS BEFORE US, SHRI JAYANT R . BHATT, LD COUNSEL FOR THE ASSESSEE MENTIONED THAT THE SUM OF RS. 54,000/- IS NOT A SINGLE AMOUNT OF CREDIT ON A PARTICULAR DATE AND IT IS SUMMATION OF CASH CREDI TS OVER THE PERIOD OF ONE YEAR. HE 5 MENTIONED THAT THE ASSESSEE RECEIVES RENT IN CASH A ND THE SAME IS ALSO CREDITED OVER THE YEAR. UNUSED CASH WITHDRAWAL FROM THE BANK ALS O IS THE SOURCE FOR THE IMPUGNED CASH CREDITS. CONSIDERING THE SMALLNESS OF THE AMOUNT, AS PER THE ASSESSEES COUNSEL, THE ASSESSEES EXPLANATION SHOU LD ACCEPTED AND THE ADDITION NEEDS TO BE DELETED. 13. ON THE OTHER HAND, LD DR DUTIFULLY RELIED ON TH E ORDERS OF THE AO / CIT (A). 14. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE ORD ERS OF THE REVENUE AND PAPERS FILED BEFORE US. IT IS A FACT THAT THERE AR E CASH WITHDRAWALS AND CASH DEPOSITS IN THE BANK ACCOUNTS OF THE ASSESSEE. IT IS THE CASE OF THE ASSESSEE THAT THE UNUSED CASH AND THE RENTAL SUMS IN CASH ARE AVAILABLE WITH THE ASSESSEE AND THE SAME ARE REDEPOSITED INTO THE BANK ACCOUNTS OF THE ASSESSEE. IT IS NOT THE CASE OF THE AO THAT SUCH CASH ON HAND IS USED BY THE ASSESSEE FOR OTHER ACTIVITIES AND ASSESSEE DOES NOT HAVE CASH BALANCE TO ACCOUNT THE IMPUGNED CASH CRED ITS. THERE IS NO DISCUSSION IN THE ORDERS OF THE REVENUE AS TO THE END USE OF THE CASH WITHDRAWALS MADE BY THE ASSESSEE. IT IS ALSO A FACT THAT ASSESSEE IS REGULA RLY FILING RETURN OF INCOME SINCE AY 2003-04 AND DERIVES INCOME REGULARLY ON RUNNING OF GUEST HOUSE AND THE SAME IS UNDISPUTED. TOTAL INCOME OF THE ASSESSEE EVERY YEA R IS AROUND RS. 2 LAKHS OR MORE. FURTHER, IT IS MENTIONED BEFORE US THAT THERE WAS A VAILABILITY OF CASH OF RS. 10,000/- OR MORE AT THE TIME OF VISIT OF REVENUE AUTHORITIES DURING SECTION 132 OPERATION AND IT INDICATES THAT THE EXISTENCE OF SOME CASH BALANC E AT ANY PARTICULAR POINT OF TIME. CONSIDERING ALL THE ABOVE, THE CASH CREDIT OF RS. 5 4,000/- WHICH IS SUM OF MANY CREDITS INTO HIS ACCOUNTS WITH THE BANK DURING THE YEAR SHOULD CONSTITUTE A SMALL AMOUNT WHICH SHOULD BE DEEMED EXPLAINED BY THE ASSE SSEE. ACCORDINGLY, GROUND RAISED BY THE ASSESSEE IS ALLOWED . 15. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON THIS 21 ST DAY OF DECEMBER, 2012. SD/- SD/- (I.P. BANSAL) (D. KARUNAKARA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER DATE : 21 .12.2012 6 AT :MUMBAI OKK COPY TO : 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (A), CONCERNED. 4. THE CIT CONCERNED. 5. THE DR I, BENCH, ITAT, MUMBAI. 6. GUARD FILE. // TRUE COPY// BY ORDER ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI