CHANDRA D KUPSHETTY, MUMBAI V. ITO 20(1)(2), MUMBAI

ITA 3152/MUM/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 93250 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 2 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-07-2015
• Appeal Filed By: Assessee
• Bench Allotted: SMC
• Assessment Year: 2008-2009
• Appeal Filed On: 05-05-2014
• Court: TRIBUNAL
• Department Lawyers: NEELIMA V NADKARNI
• Assessee Lawyers: R C JAIN
• Keywords: Unexplained cash credit; Gift; Opportunity of being heard
• Section: 143(3); 68; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI BEFORE SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER I.T.A. NO.3152/M/2014 (AY:2008 - 2009 ) SMT. CHANDRA D. KUPSHETTY, 105, RAIRESHWAR SOCIETY, PLOT NO.78, FOUR BUNGALOWS, ANDHERI (W), MUMBAI 400 053. / VS. ITO - 20(1)(2), PIRAMAL CHAMBERS, LALBAUG, PAREL, MUMBAI 400 012. ./ PAN : ABHPK2889H ( / APPELLANT) .. ( / RESPONDENT ) / APPELLANT BY : SHRI R.C. JAIN, AR / RESPONDENT BY : MS. NEELIMA V. NADKARNI, DR / DATE OF HEARING : 29.06.2015 / DATE OF PRONOUNCEMENT : 22 .07.2015 / O R D E R PER D. KARUNAKARA RAO, AM: THIS APPEAL FILED BY THE ASSESSEE ON 5.5.2014 IS AGAINST THE ORDER OF THE CIT (A) - 31, MUMBAI DATED 7.2.2014 FOR THE ASSESSMENT YEAR 2008 - 2009. IN THIS APPEAL, ASSESSEE RAISED THE FOLLOWING GROUNDS WHICH READ AS UNDER: 1. THE LD CIT (A) ERRED IN CONFIRMING THE ADDITION OF RS. 6,72,483/ - IN R ESPECT OF CASH DEPOSIT IN BANK ACCOUNT WHICH WAS NOT SATISFACTORILY EXPLAINED UNDER SECTION 68 OF THE ACT. 1.1. THE LD CIT (A) IN SO DOING DID NOT APPRECIATE THAT DEEMING PROVISION OF SECTION 68 OF THE ACT DID NOT APPLY TO THE APPELLANT IN RESPECT OF NATURE AND SOURCE OF DEPOSIT IN BANK ACCOUNT AS SHE DOES NOT MAINTAIN BOOKS OF ACCOUNTS. 1.2. THE LD CIT (A) IN DOING SO DID NOT CONSIDER THE REMAND REPORT OF THE AO WHO IN TERMS REPORTED THAT THE DEPOSIT IN BANK ACCOUNT WAS OUT OF THE MONEY BELONGING TO THE APPELLANTS HUSBAND SHRI DHANRAJ KUPSHETTY IN ACCORDANCE WITH DIRECTION IN THE REMAND ORDER AND THUS, ALL THE CONDITION IN ANY EVENT U/S 68 OF THE ACT STOOD SATISFIED. 1.3. THE LD CIT (A) DID NOT APPRECIATE THAT IN THE FACE OF CLEAR FINDING BY THE AO IN REMAND REPORT THE I NESCAPABLE CONCLUSION WAS THAT THE DEPOSIT IN THE BANK ACCOUNT WAS OUT OF MONEY GIFTED BY THE APPELLANTS HUSBAND. \ 2. THE LD CIT (A) IN ACCEPTING THE ALTERNATIVE CONTENTION OF THE APPELLANT OUGHT TO HAVE ADOPTED THE PRESUMPTIVE PROFIT OF THE SAID DEPOSIT AS TURNOVER U/S 44AF THE ACT (RETAIL TRADE) IN THE LIKE MANNER AND TO LIKE EXTENT DECLARED BY THE APPELLANT AND ACCEPTED BY THE AO IN THE RETURN FILED. 2 2.1 IN SO DOING THE LD CIT (A) DID NOT APPRECIATE THAT THE APPELLANT HAS IN THE ALTERNATIVE SUBMISSION AGRE ED TO BEING ASSESSED ON THE SAID DEPOSIT ON THE PRESUMPTIVE RATE OF TAX U/S 44AF OF THE ACT. 2. BRIEFLY STATED RELEVANT FACTS OF THE CASE ARE THAT THE ASSESSEE, WHO IS AN INDIVIDUAL, FILED THE RETURN OF INCOME DECLARING THE TOTAL INCOME OF RS. 1,51,143/ - . ASSESSMENT WAS COMPLETED U/S 143(3) OF THE ACT AND THE ASSESSED INCOME WAS DETERMINED AT RS. 8,23,623/ - . IN THE SCRUTINY ASSESSMENT, AO NOTICED THAT THE ASSESSEE DECLARED INCOME U/S 44AF OF THE ACT AND EARNS INCOME OUT OF M/S. DHANRAJ CAR AC, A PROPRIE TARY CONCERN. DURING THE ASSESSMENT PROCEEDINGS, AO EXAMINED THE BOOKS OF ACCOUNT OF THE ASSESSEE AS THE ASSESSEE HAS NOT MAINTAINED ANY BOOKS OF ACCOUNT IN SUPPORT OF THE INCOME MENTIONED IN THE RETURN OF INCOME. ASSESSEE HAS A CURRENT ACCOUNT WITH ORIE NTAL BANK OF COMMERCE, MUMBAI VERSOVA BRANCH BEARING A/C NO.04551010007510. AO NOTICED THAT THERE ARE CASH DEPOSITS TO THE TUNE OF RS. 14.18 LAKHS. AFTER ANALYSING THE SAID CREDITS, AO CAME TO THE CONCLUSION THAT AN AMOUNT OF RS. 6,72,483/ - NEED TO BE AD DED AS UNEXPLAINED CREDITS U/S 68 OF THE ACT. ACCORDINGLY, HE COMPLETED THE ASSESSMENT. AGGRIEVED WITH THE SAID DECISION OF THE AO, ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY. 3. DURING THE PROCEEDINGS BEFORE THE FIRST APP ELLATE AUTHORITY, AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, CIT (A) UPHELD THE DECISION OF THE AO AND CONFIRMED THE ADDITION MADE U/S 68 OF THE ACT. AGGRIEVED WITH THE SAID DECISION OF THE CIT (A), ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL BY RAI SING THE ABOVE MENTIONED GROUNDS. 4. DURING THE PROCEEDINGS BEFORE THE TRIBUNAL, LD COUNSEL FOR THE ASSESSEE UNDERLINED THE FACT THAT THE ASSESSEE FILED THE RETURN OF INCOME AS PER THE PROVISIONS OF SECTION 44AF OF THE ACT AND THIS ASPECT OF THE RETURN WAS ACCEPTED BY THE REVENUE. HAVING DONE SO, MAKING THE ADDITION U/S 68 OF THE ACT IS UNSUSTAINABLE IN LAW AS (I) THE ASSESSEE HAS NOT MAINTAINED ANY BOOKS OF ACCOUNTS, AND THEREFORE, THE PROVISIONS OF SECTION 68 IS NOT APPLICABLE AND (II) THE PASS BOOK UNDE R CONSIDERATION DID NOT CONSTITUTE BOOKS OF ACCOUNT OF THE ASSESSEE AND IN SUCH CIRCUMSTANCES, ADDITION MADE U/S 68 IS UNSUSTAINABLE. FOR THIS PROPOSITION, LD COUNSEL RELIED ON THE JUDGMENT OF THE JURISDICTIONAL HIGH COURT JUDGMENT IN THE CASE OF CIT VS. BHAICHAND 3 H. GANDHI [1983] 141 ITR 67 (BOM.). RELEVANT PORTION OF THE JUDGMENT IS EXTRACTED AND THE SAME IS AS FOLLOWS: - ........IT IS FAIRLY WELL SETTLED THAT WHEN MONEYS ARE DEPOSITED IN A BANK, THE RELATIONSHIP THAT IS CONSTITUTED BETWEEN THE BANKER AND THE CUSTOMER IS ONE OF THE DEBTOR AND CREDITOR AND NOT OF TRUSTEE AND BENEFICIARY. APPLYING THIS PRINCIPLE, THE PASS BOOK SUPPL IED BY THE BANK TO ITS CONSTITU ENT IS ONLY A COPY OF THE CONSTITUENTS ACCOUNT IN THE BOOKS MAINTAINED BY THE BANK. IT IS N OT AS IF THE PASS BOOK IS MAINTAINED BY THE BANK AS THE AGENT OF THE CONSTITUENT, NOR CAN IT BE SAID THAT THE PASS BOOK IS MAINTAINED BY THE BANK UNDER THE INSTRUCTIONS OF THE CONSTITUENT. IN VIEW OF THIS, THE TRIBUNAL WAS, WITH RESPECT, JUSTIFIED IN HOLD ING THAT THE PASS BOOK SUPPLIED BY THE BANK TO THE ASSESSEE IN THE PRESENT CASE COULD NOT BE REGARDED AS A BOOK OF THE ASSESSEE...... 4.1. FINALLY, LD COUNSEL FOR THE ASSESSEE SUBMITTED THAT THIS PARTICULAR ARGUMENT WAS NOT RAISED BEFORE THE LOWER AUTHO RITIES. 5. ON THE OTHER HAND, LD DR RELIED ON THE ORDERS OF THE REVENUE AUTHORITIES. 6. ON HEARING BOTH THE PARTIES AND ON PERUSAL OF THE RELEVANT MATERIAL PLACED ON TO THE RECORD, I FIND IT RELEVANT TO REMAND THIS ISSUE TO THE FILE OF THE AO FOR EXAMINING THE APPLICABILITY OF THE SAID BINDING DECISION OF THE HONBLE HIGH COURT IN THE CASE OF BHAICHAND H. GANDHI (SUPRA) AND DECIDE THE ISSUE AFRESH AFTER AFFORDING A REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. ACCORDINGLY, GROUNDS RAISED BY THE ASS ESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 22 ND JULY, 2015. SD/ - (D. KARUNAKARA RAO) ACCOUNTANT MEMBER MUMBAI ; 22 .7 .2015 . . ./ OKK , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 4 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . //TRUE COPY// / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI