ITO 24(3)-4, MUMBAI V. RENUKA AJAY MARU, MUMBAI

ITA 3194/MUM/2011

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 7713 (ITAT-MUMBAI)
• Duration Of Justice: 5 year(s) 11 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-03-2017
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: D
• Next Hearing Date: 10-03-2017
• Assessment Year: 2004-2005
• Appeal Filed On: 21-04-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Opportunity of being heard
• Section: 143(3); 131

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES D MUMBAI BEFORE SHRI SAKTIJIT DEY (JUDICIAL MEMBER) AND SHRI N.K. PRADHAN (ACCOUNTANT MEMBER) ITA NO. 3194/MUM/2011 ASSESSMENT YEAR: 2004-05 ITO 24(3)(4) V SMT. RENUKA AJAY MARU R. NO. 706 C-11, B-1201 ANMOL CHS LTD. S.V. RD . BANDRA KURLA COMPLEX, GOREGAON WEST MUMBAI 400051 MUMBAI - 400062 PAN NO. AAJPM6941R (APPELLANT) (RESPONDENT) REVENUE BY : SHRI PURUSHOTTAM KUMAR, DR RESPONDENT BY: SHRI K. GOPAL, AR DATE OF HEARING : 06/12 /2016 & 24/03/2017 DATE OF PRONOUNCEMENT: 29/03/2017 ORDER PER N.K. PRADHAN, AM THIS IS AN APPEAL FILED BY THE REVENUE. THE RELEVAN T ASSESSMENT YEAR IS 2004-05. THE APPEAL IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER (APPEALS) 34, MUMBAI AND ARISES OUT OF ORDER U/S 143(3) OF THE INCOME TAX ACT, 1961 (THE ACT). 2. THE GROUNDS OF APPEAL FILED BY THE REVENUE READ AS UNDER:- I. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW , THE LD. CIT(A) ERRED IN DELETING AN AMOUNT OF RS. 13,51,693/- DEPOSITED BY THE ASSESSEE IN HER BANK ACCOUNTS NO. 3826 WITH NKSGB BANK AND NO. 785 WITH B HARAT CO. OP. BANK HOLDING THAT THE ASSESSEES HUSBAND CONFIRMED THE LOA N TRANSACTION AND EVEN ON MERITS NONE OF THE ENTRIES IN THE BANK ACCOUNTS WARRANTED ANY ADDITION IN FORM OF UNEXPLAINED CASH CREDITS, WITHOUT VERIFYING T HE SUPPORTING ITA NO. 3194/MUM/2011 2 DOCUMENTARY EVIDENCES AND WITHOUT CONSIDERING THAT THIS AMOUNT ALSO INCLUDES THE LOAN TAKEN FROM PARTIES OTHER THAN ASSE SSEES HUSBAND. II. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AN D IN LAW, LD. CIT(A) ERRED IN DELETING THE ADDITION MADE BY THE A.O. OF RS. 12,66 ,000/- ON ACCOUNT OF CASH SALES OF WEDDING CARDS AND RS. 5,80,555/- ON ACCO UNT OF CASH LOANS, WITHOUT VERIFYING THESE PURCHASE PARTIES OR REMANDIN G THE ISSUE BACK TO AO FOR RE-VERIFICATION AND ADMITTING THE ADDITIONAL EVIDE NCE WITH REGARD TO CASH LOANS IN CONTRAVENTION TO RULE 46A OF THE I.T. RULE S, 1961. 3. THE 1 ST GROUND RAISED IN THIS APPEAL PERTAINS TO THE ADDIT ION OF RS. 13,51,693/- AS UNEXPLAINED CASH CREDIT IN RESPE CT OF DEPOSITS MADE IN NKGSB BANK ACCOUNT NUMBER 3826 AND BHARAT C O. OP. BANK LTD. BANK ACCOUNT NUMBER 785. THE ASSESSING OFFICER (AO) MADE AN ADDITION OF THE ABOVE SUM AS THE ASSESSEE FAILED TO FURNISH ANY DOCUMENTARY EVIDENCE BEFORE HIM. THE ASSESSEE PREFE RRED AN APPEAL AGAINST THE ORDER OF THE AO BEFORE THE LEARNED CIT( A). WE FIND THAT THE LEARNED CIT(A) OBSERVED THAT SINCE THESE BANK A CCOUNTS WERE DISCLOSED, NO ADDITION COULD HAVE BEEN MADE ON THE BASIS OF ENTRIES MADE THEREIN. THEREFORE HE DELETED THE ADDITION OF RS. 13,51,693/- MADE BY THE AO AS UNEXPLAINED CASH CREDIT. 3.1 BEFORE US, THE LEARNED COUNSEL OF THE ASSESSEE RELIES ON THE ORDER OF THE LEARNED CIT(A). ON THE OTHER HAND, THE LEARNED DR SUPPORTS THE ORDER OF THE A.O. 3.2 WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIAL ON RECORD. IT IS FOUND THAT THE AO HAS MAD E THE FOLLOWING OBSERVATIONS WHILE MAKING AN ADDITION OF RS. 13,51, 693/-: FROM THE ABOVE SUBMISSION OF THE ASSESSEE IT IS SE EN THAT THE RECEIPTS IN BANK ACCOUNTS ON ACCOUNT DIVIDEND OF RS. 2,77,650/-, GOLD LO AN OF RS. 77,000/- IN BHARAT CO. OP. BANK LTD., APPEARS TO BE EXPLAINED. SIMILARLY THE RECEIPTS ON ACCOUNT OF DIVIDED OF RS. 1,93,309/- AND BANK INTEREST OF RS. 234/ - AND LOAN FROM R.S. MAROO OF ITA NO. 3194/MUM/2011 3 RS. 3,25,000/- (SQUARED OFF DURING THE YEAR) APPEARS TO BE EXPLAINED. THUS, OUT OF TOTAL CHEQUE DEPOSITS IN THE AFORESAID BANK ACCOUNTS AN AMOUNT OF RS. 8,73,193/- (277650 + 77000 + 193309 + 234 + 325000) APPEARS TO BE EXPLAINED. AS REGARDS OTHER RECEIPTS IN THE FORM OF LOANS AND CONSULTANCY FOR WEDDING, RECEIPT FROM V.R. GEMS & JEWELLERY, ETC., CANNOT BE ACCEPTABLE AS THE ASSESSEE HAS NOT FURNISHED ANY DOCUMENTARY EVIDENCES NAMELY, COPY OF LOAN CONFIRMATI ON, COPY OF BANK STATEMENT COPY OF RETURN, COPY OF PURCHASE AND SALES BILLS FRO M V.R. GEMS & JEWELLERY ETC. IN ABSENCE OF BASIC DETAILS, THE CLAIM OF RECEIPT AND LO AN FROM THE ABOVE SAID ENTITLES CANNOT BE ACCEPTABLE AND ACCORDINGLY, THE SAME IS AD DED TO THE TOTAL INCOME ON ACCOUNT OF UNEXPLAINED CASH CREDITS IN THE HANDS OF T HE ASSESSEE. THUS, AN ADDITION OF RS. 13,51,693/- [(1016680 + 1208206) 873193] IS M ADE TO THE TOTAL INCOME OF THE ASSESSEE. FROM THE ABOVE WE FIND THAT THE AO IS NOT SURE ABOU T THE CERTAINTY OF EXPENDITURE AS HE HAS MENTIONED APPEA RS TO BE EXPLAINED. WE FIND THAT THE LEARNED CIT(A) HAS RIG HTLY CONCLUDED THAT THE AO HAS NOT FOUND ANY DISCREPANCY IN THE BOOKS O F ACCOUNTS OF THE ASSESSEE VIS-A-VIS THE IMPUGNED BANK ACCOUNT NO. 3826 AND ACCOUNT NO. 785. IN VIEW OF THE ABOVE, WE UPHOLD THE ORDER OF THE LEARNED CIT(A) ON THE ABOVE ISSUE. THUS GROUND NO. 1 FILED BY THE REVENUE IS DISMISSED. 4. THE 2 ND GROUND IN THIS APPEAL RELATES TO THE ADDITION OF R S. 20,09,770/- MADE BY THE AO AS UNEXPLAINED CASH CRED IT IN RESPECT OF TRANSACTIONS OF SALE OF WEDDING CARDS AND CASH LOAN S. THE AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS ISSUED NOTICES U/S 131 TO VARIOUS PARTIES. HE FOUND THAT M/S. PORWAL CREATIV E VISION PVT. LTD., M/S REMCO CARD MANUFACTURING, M/S ANITA ART PRINTER S AND M/S JAIN PAPER AGENCY HAVE STATED THAT THEY HAD NOT CARRIED OUT ANY TRANSACTION WITH THE ASSESSEE. THEREFORE, HE MADE A N ADDITION OF RS. 20,09,770/- AS UNEXPLAINED CASH CREDIT. THE LEARNED CIT(A) OBSERVED THAT SINCE THE BUSINESS WAS DONE BY THE ASSESSEE IN THE NAME OF M/S. AJAY CARDS, CONFUSION AROSE DURING THE COURSE OF AS SESSMENT PROCEEDINGS AS THE AO INQUIRED ABOUT THE TRANSACTIO NS WITH THE ITA NO. 3194/MUM/2011 4 ASSESSEE AND NOT THE TRANSACTIONS OF THE PARTIES WI TH M/S. AJAY CARDS. M/S. AJAY CARDS BEING A PROPRIETARY CONCERN OF THE ASSESSEE AND NOTHING ADVERSE HAVING BEEN FOUND, THE LEARNED CIT( A) DELETED THE ADDITION OF RS. 20,09,770/- MADE BY THE AO. 4.1 BEFORE US, THE LEARNED COUNSEL OF THE ASSESSEE RELIES ON THE ORDER OF THE LEARNED CIT(A). ON THE OTHER HAND, THE LEARNED DR SUPPORTS THE ORDER OF THE A.O. 4.2 WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIAL ON RECORD. WE FIND THAT THE LEARNED CIT(A) HAS ARRIVED AT A FINDING THAT THE CONCERNED PARTIES HAVE NEVER SAID THAT THEY HAVE NOT DONE ANY TRANSACTION WITH THE PROPRIETARY CONCERN M /S. AJAY CARDS, GOREGOAN (WEST), MUMBAI ON WHICH THE BILLS WERE RAI SED BY THEM. THE LEARNED CIT(A) HAS TAKEN INTO ACCOUNT THE CONTE NTION OF THE ASSESSEE THAT SINCE THE BUSINESS WAS DONE IN THE NA ME OF M/S. AJAY CARDS, THE CONFUSION AROSE DURING THE COURSE OF ASS ESSMENT PROCEEDINGS BECAUSE THE AO ASKED THE TRANSACTIONS W ITH SMT. RENUKA MAROO AND HE HAD NOT ENQUIRED ABOUT THE TRANSACTION S OF THE PARTIES WITH M/S AJAY CARDS. IT IS FOUND THAT THE ABOVE CLA RIFICATION LIKE HAVING TRANSACTIONS OF THE PARTIES WITH M/S. AJAY C ARDS WAS NOT FILED BEFORE THE AO. IN VIEW OF THE ABOVE, THE ORDER OF T HE LEARNED CIT(A) IN RESPECT OF GROUND NO. 2 OF THIS APPEAL IS SET ASIDE AND THE SAME IS RESTORED BACK TO THE FILE OF THE AO FOR MAKING AN A SSESSMENT AS PER THE PROVISIONS OF THE ACT AFTER GIVING A REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. THE ASSESSEE IS DIRECT ED TO FILE THE RELEVANT DETAILS BEFORE THE AO. THUS THE 2 ND GROUND OF APPEAL FILED BY THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES. ITA NO. 3194/MUM/2011 5 5. IN THE RESULT, THE APPEAL IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 29/03/2017 SD/- SD/- (SAKTIJIT DEY) (N.K. PRADHAN) JUDICIAL MEMBER ACCOUNTANT MEMBE R MUMBAI: DATED: 29/03/2017 BISWAJIT, SR. P.S. 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