MOHAMMED YUSUF SHAIKH, NAVI MUMBAI V. ITO 17(3)(3), MUMBAI

ITA 3229/MUM/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 49208 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 2 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-06-2011
• Appeal Filed By: Assessee
• Bench Allotted: H
• Next Hearing Date: 30-05-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 26-04-2010
• Court: TRIBUNAL
• Department Lawyers: KUBAL
• Assessee Lawyers: NAHID BHUJWALA
• Keywords: Unexplained investment

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH H BEFORE SHRI J. SUDHAKAR REDDY (AM) & SHRI VIJAY PAL RAO (JM) I.T.A.NO. 3229/MUM/2010 (ASSESSMENT YEAR : 2005-06 ) SHRI MOHAMMED YUSUF SHAIKH ROOM NO. 302/303, ROZAN APTS. SECTOR 19, PLOT NO. 132 KOPAR KHAIRANE NAVI MUMBAI. VS. ITO 17(3)(3) PIRAMAL CHAMBERS LALBAUG MUMBAI-400 012. APPLICANT RESPONDENT PAN/GIR NO. : AURPS8867Q ASSESSEE BY : SHRI NAHID BHUJWALA DEPARTMENT BY : SHRI M.R. KUBAL ORDER PER J. SUDHAKAR REDDY (AM) :- THIS IS AN APPEAL FILED BY THE ASSESSEE DIRECTED A GAINST THE ORDER OF LEARNED CIT(A)-29, MUMBAI DATED 12.1.2010 FOR A.Y. 2005-06. 2. ASSESSEE UNDERTAKES WATCH REPAIRS. HE IS AN INDI VIDUAL AND FILED HIS RETURN OF INCOME ON 19.9.2005 DECLARING TOTAL I NCOME OF ` 42,400/-. RETURN OF INCOME WAS ACCOMPANIED BY A STATEMENT SHO WING COMPUTATION OF INCOME OF TOTAL INCOME, TRADING, PROFIT AND LOSS ACCOUNT, BALANCE-SHEET AND LIC PREMIUM RECEIPTS ETC. THE ASSESSING OFFICER SELECTED THE CASE FOR SCRUTINY. DURING THE SCRUTINY PROCEEDINGS, THE LEAR NED AUTHORIZED REPRESENTATIVE FILED DETAILS OF PERSONAL DRAWINGS, DETAILS OF SUNDRY DEBTORS, DETAILS OF EXPENSES ON MOTOR-CYCLE, TELEPH ONE AND CONVEYANCE WERE FILED. THE ASSESSING OFFICER SCRUTINIZED THE A CCOUNTS AND THE STATEMENT AND MADE ADDITION U/S. 68 AS WELL AS U/S. 69 OF THE ACT. HE ALSO DISALLOWED, ON AN ADHOC BASIS, CLAIM OF EXPEND ITURE OF ` 7,000/-. ON AN APPEAL, THE FIRST APPELLATE AUTHORITY CONFIR MED THE SAME. 3. AGGRIEVED THE ASSESSEE IS AN APPEAL BEFORE US. WE HAVE HEARD LEARNED COUNSEL FOR THE ASSESSEE AS WELL AS LEARNED DEPARTMENTAL REPRESENTATIVE. FIRST ADDITION U/S. 69 WAS MADE BY THE ASSESSING OFFICER BY COMPARING BALANCE-SHEET FIGURE AS ON 31.3.2005 W ITH THE BALANCE- SHRI MOHAMMED YUSUF SHAIKH 2 SHEET FIGURE AS ON 31.3.2004 ON INVESTMENT IN A RES IDENTIAL HOUSE. HE HELD THAT THE RESIDENTIAL HOUSE WAS SHOWING A BALAN CE OF ` 8 LAKHS AS ON 31.3.2005 WHEREAS IT WAS SHOWING A BALANCE OF ` 6,50,000/- IN THE EARLIER YEAR; AND HENCE, THERE IS AN UNEXPLAINED IN VESTMENT OF ` 1,50,000/-. THIS IS TOTALLY MISCONCEIVED. THE ASSE SSING OFFICER FAILED TO TAKE INTO ACCOUNT RAISE IN LIABILITY SIDE OF THE BA LANCE-SHEET UNDER THE HEAD LOANS. THE BALANCE OF LIC HOUSING INCREASED TO ` 1.64 LAKHS TO 2.07 LAKHS AND THE LOAN FROM M/S. KOKAN MERCANTILE BANK INCREASED FROM ` 3,783/- TO ` 2,79,926/-. HENCE THERE IS NO UNEXPLAINED INVESTMENT. WE DELETE THE ADDITION AND ALLOW THIS G ROUND OF THE ASSESSEE. 4. ON THE ADDITION MADE U/S. 68, WE FIND THAT THE R EASONING OF THE ASSESSING OFFICER AS WELL AS THE LEARNED CIT(A) ARE FLAWED. IT IS NOT THEIR CASE THAT THERE IS A CASH CREDIT ENTRY IN THE BOOKS OF ACCOUNT WHICH IS NOT EXPLAINED. WITHOUT ON CASH CREDIT ENTRY IN THE BOOK S OF ACCOUNT, THERE CANNOT BE AN ADDITION U/S. 68. WE RELY ON THE JUDGE MENT OF HON'BLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. BHAICHAND H. GANDHI, 141 ITR 67. IN ANY CASE ON MERITS AS PER LEARNED CIT(A), TH ERE IS A DIFFERENCE OF ` 1,09,262/- IN THE CASH FLOW STATEMENT. LEARNED CIT( A) HAS IGNORED THE RAISE IN LIABILITIES AND WRONGLY CONCLUDED THAT THE RE IS A GAP. IN FACT ON AN ANALYSIS OF THE BALANCE SHEET AS WELL AS THE PRO FIT AND LOSS ACCOUNT, THERE IS NO SUCH GAP. HENCE WE DELETE THE ADDITION. 5. IN VIEW OF THE ABOVE DISCUSSION, ADDITION MADE B OTH U/S. 69 AND U/S. 68 OF THE ACT IN THE CASE OF THIS ASSESSEE WHO IS A PETTY WATCH REPAIRER IS HEREBY DELETED AND THE APPEAL IS ALLOWE D. ORDER HAS BEEN PRONOUNCED ON 29 TH DAY OF JUNE, 2011. SD/- (VIJAY PAL RAO) JUDICIAL MEMBER SD/- (J. SUDHAKAR REDDY) ACCOUNTAT MEMBER DATED : 29 TH JUNE, 2011. SHRI MOHAMMED YUSUF SHAIKH 3 COPY TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A)-CONCERNED. 4. THE CIT, CONCERNED. 5. THE DR CONCERNED, MUMBAI 6. GUARD FILE BY ORDER TRUE COPY ASSTT. REGISTRAR, ITAT, MUMBAI PS