ITO 19(3)(1), MUMBAI V. FIRDAUS RAJABALI MERCHANT, MUMBAI

ITA 3336/MUM/2012

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 93165 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 1 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-07-2015
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: F
• Next Hearing Date: 18-12-2013
• Assessment Year: 2008-2009
• Appeal Filed On: 14-05-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Opportunity of being heard; Corroborative evidences
• Section: 69

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL F BENCH, MUMBAI . . , , , BEFORE SHRI A.D. JAIN , JUDICIAL MEMBER AND SHRI N.K . BILLAIYA, A CCOUNTANT M EMBER / I .T.A. NO . 3336/MUM/2012 ( / ASSESSMENT YEAR : 2008 - 09 THE ITO - 19(3)(1), PIRAMAL CHAMBERS, PAREL, LALBAUG, MUMBAI - 400 012 / VS. MR. FIRDAUS RAJABALI MERCHANT, 43, 3 RD FLOOR, AMIR VILLA, PALI MALA ROAD, BANDRA (W), MUMBAI - 400 050 ./ ./ PAN/GIR NO. : AFPPM 1011F ( / APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY: SHRI SUNIL KUMAR AGARWAL / RESPONDENT BY : SHRI BHUPENDRA SHAH / DATE OF HEARING :01 . 0 7 .2015 / DATE OF PRONOUNCEMENT : 08 .0 7 .2015 / O R D E R PER N.K. BILLAIYA, AM: THIS APPEAL BY THE REVENUE IS PREFERRED AGAINST THE ORDER OF THE LD. CIT(A) - 30 , MUMBAI DT. 16 . 2 .2012 PERTAINING TO ASSESSMENT YEAR 200 8 - 0 9 . 2. THE REVENUE HAS RAISED TWO SUBSTANTIVE GROUNDS OF APPEAL. THE FIRST GROUND OF APPEAL REL A TES TO THE DELETION OF ADDITION OF RS. 34,38,000/ - ITA. NO. 3336/M/2012 2 BEING CASH DEPOSITS IN CENTURIAN BANK OF PUNJAB AND THE SECOND GRIEVANCE RELATES TO THE DELETION OF THE ADDITION OF RS. 41,53,300/ - BEING CASH DEPOSITS IN UNION BANK OF INDIA. 3. THE ASSESSEE IS A RESIDENT INDIVIDUAL. THE RETURN FOR THE YEAR FILED ON 3 0.3.2010 DECLARING TOTAL INCOME AT RS. 2,37,030/ - . THE RETURN WAS SELECTED FOR SCRUTINY ASSESSMENT. WHILE SCRUTINIZING THE RETURN OF INCOME, THE ASSESSING OFFICER NOTICED THAT THERE WAS INFORMATION ON AIR REGARDING CASH DEPOSITS OF RS.75,91,300/ - . AS PE R THE SAID INFORMATION, THE ASSESSEE HAS DEPOSITED THE CASH OF RS. 41,53,300/ - IN UNION BANK OF INDIA AND RS. 34,38,000/ - IN CENTURIAN BANK OF PUNJAB . THE ASSESSEE WAS ASKED TO FILE DETAILS WITH SUPPORTING DOCUMENTARY EVIDENCES. THE ASSESSEE WAS ALSO AS KED TO FURNISH THE SOURCE OF SUCH HUGE DEPOSITS FOUND TO BE MADE IN HIS ACCOUNTS WITH THESE BANKS. 3.1. THE ASSESSEE FILED A REPLY DT. 21.10.2010 AND ACCEPTED THAT THE AIR INFORMATION IS CORRECT REGARDING THE SOURCE OF CASH DEPOSITS. IT WAS EXPLAINED T HAT THE ASSESSEE WAS LOOKING AFTER THE AFFAIRS OF M/S. LOKHANDWALA AUTOMOBILES, WHICH WAS A PETROL PUMP LOCATED AT THANE. THE SAID PUMP BELONGS TO LATE SHRI NOORUDDIN LOKHANDWALA WHOSE SONS HAVE SETTLED ABROAD AND THE ASSESSEE HAS BEEN AUTHORIZED BY HIS L EGAL HEIRS TO MANAGE THE DAY TODAY AFFAIRS. IT WAS FURTHER EXPLAINED THAT THE CASH DEPOSITS IN CENTURIAN BANK OF PUNJAB IS ON ACCOUNT OF DAILY CASH COLLECTION OF SALES OF PETROL AND DIESEL. THE SAID CASH WAS FIRST DEPOSITED IN ASSESSEES BANK AND IMMEDIA TELY TRANSFERRED TO THE ACCOUNT OF M/S. LOKHANDWALA AUTOMOBILES. XEROX COPIES OF BANK STATEMENTS WERE ALSO FILED. ITA. NO. 3336/M/2012 3 3.2. IN RESPECT OF CASH DEPOSIT OF RS. 41,53,300/ - IN UNION BANK OF INDIA, IT WAS EXPLAINED THAT THE SAID CASH DEPOSIT IS ON ACCOUNT OF AD VANCES RECEIVED AGAINST SALE OF AGRICULTURAL PRODUCE. THE ASSESSEE FILED THE DETAILS OF ITS AGRICULTURAL LAND AND THE VARIOUS CROPS GROWN THEREIN. THE ASSESSEE ALSO FILED THE AGRICULTURAL INCOME RETURNED BY HIM FOR A.Y. 1998 - 99, 2004 - 05 AND 2006 - 07. IT WAS EXPLAINED THAT THE PRACTICE IN AGRICULTURAL MARKET IS THAT THE BUYER APPROACH THE SELLER BEFORE THE COMMENCEMENT OF THE SEASON AND GIVE ADVANCE SO AS TO GET THE AGRICULTURAL PRODUCE. RS. 17,00,000/ - IS THE ADVANCE AGAINST SALE OF AGRICULTURAL PRODUCE, RS. 14,26,000/ - WAS FROM THE ESTATE OF SMT. ROSHANBANU MERCHANT AND RS. 21,12700/ - IS OUT OF THE CASH WITHDRAWALS WHICH HAS BEEN RE - DEPOSITED IN THE BANK. 3.3. AFTER GIVING A THOUGHTFUL CONSIDERATION TO THE STATEMENT MADE BY THE ASSESSEE, THE AO OBSERVE D THAT THE ASSESSEE HAS FAILED TO EXPLAIN AS TO WHY CASH ON ACCOUNT OF THE SALE MADE BY M/S. LOKHANDWALA AUTOMOBILES WAS DEPOSITED IN THE INDIVIDUAL ACCOUNT OF THE ASSESSEE AND THEN TRANSFERRED TO M/S. LOKHANDWALA AUTOMOBILES WHEN THE SAID FIRM WAS ALSO HA VING INDEPENDENT BANK ACCOUNT. DISMISSING THIS CLAIM OF THE ASSESSEE, THE AO TREATED THE CASH FOUND TO BE DEPOSITED IN ASSESSEES BANK ACCOUNT AS UNEXPLAINED MONEY WITHIN THE MEANING OF SEC. 69 OF THE ACT. 3.4. IN SO FAR AS THE EXPLANATION REGARDING THE CASH DEPOSIT IN UNION BANK OF INDIA, THE AO OBSERVED THAT THE ASSESSEE COULD EXPLAIN THE CASH DEPOSITS ONLY TO THE EXTENT OF RS. 39,55,300/ - WHEREAS THE CASH FOUND TO BE DEPOSITED IS RS. 41,53,300/ - . FURTHER, THE ASSESSEE COULD NOT FILE THE DETAILS OF THE PERSONS FROM WHOM HE HAS RECEIVED RS. 17,00,000/ - . IN SO FAR AS THE CLAIM OF RE - DEPOSIT OF THE CASH DEPOSIT, THE AO FOUND THAT THE ASSESSEE WAS NOT HAVING SUFFICIENT FUNDS TO RE - DEPOSIT AND DISMISSED THE ITA. NO. 3336/M/2012 4 CLAIM OF THE ASSESSEE. THE AO FURTHER OBSERVED TH AT THE CLAIM OF CASH RECEIVED FROM THE ESTATE OF LATE SMT . ROSHANBANU MERCHANT AMOUNTING TO RS. 1,42,600/ - IS ALSO NOT SUPPORTED BY ANY DOCUMENTARY EVIDENCES. THE AO TREATED THE SAID SUM AS UNEXPLAINED MONEY WITHIN THE MEANING OF SEC. 69A OF THE ACT. THE AO FINALLY CONCLUDED THE ASSESSMENT BY TREATING THE ENTI RE CASH DEPOSIT OF RS. 75,91,300/ - AS INCOME OF THE ASSESSEE. 4. AGGRIEVED BY THIS, THE ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT(A) AND REITERATED WHAT HAS BEEN SUBMITTED BEFORE THE AO. THE LD. CIT(A) ACCEPTED THE SUBMISSIONS MADE BY THE ASSESSEE . 5. HOWEVER, AFTER GIVING A THOUGHTFUL CONSIDERATION TO THE FINDINGS OF THE LD. CIT(A), WE FIND THAT THE LD. CIT(A) HAS SIMPLY ACCEPTED THE SUBMISSIONS MADE BY THE ASSESSEE WITHOUT ANY FURTHER VERIFICATION. AT THE SAME TIME, WE FIND THAT THE AO HAS ALSO NOT M ADE ANY VERIFICATION BEFORE MAKING THE ADDITIONS. THEREFORE, IN THE INTEREST OF JUSTICE AND FAIR PLAY, WE RESTORE THIS ISSUE TO THE FILE OF THE AO. 5.1. IN SO FAR AS THE DEPOSIT OF CASH IN CENTURIAN BANK OF PUNJAB IS CONCERNED, THE AO IS DIRECTED TO CRO SS CHECK FROM THE BANK ACCOUNT OF M/S. LOKHANDWALA AUTOMOBILES AND DECIDE THE ISSUE AFRESH AFTER GIVING FAIR OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 5.2. IN SO FAR AS DEPOSITS OF CASH IN UNION BANK OF INDIA IS CONCERNED, THE ASSESSEE IS DIRECTED TO F URNISH THE NAME OF THE PERSONS WITH SUPPORTING EVIDENCES FROM WHO HE HAS CLAIMED TO HAVE RECEIVED ADVANCES OF RS. 17,00,000/ - . THE ASSESSEE IS FURTHER DIRECTED TO FURNISH A CASH FLOW STATEMENT TO JUSTIFY THE CLAIM OF RE - DEPOSIT OF CASH OUT OF WITHDRAWALS AMOUNTING TO RS. 39,55,300/ - AND IN SO FAR AS THE AMOUNT RECEIVED FROM ITA. NO. 3336/M/2012 5 SMT. ROSHANBANU MERCHANT IS CONCERNED, NO SUPPORTING DOCUMENTARY EVIDENCE HAS BEEN FILED OR BROUGHT TO OUR NOTICE. WE DIRECT THE ASSESSEE TO FURNISH THE SUPPORTING DOCUMENTARY EVIDE NCES BEFORE THE AO. THE AO IS DIRECTED TO VERIFY THE SAME AND DECIDE THE ISSUE AFRESH AFTER GIVING REASONABLE AND SUFFICIENT OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 6. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS TREATED AS ALLOWED FOR STATISTI CAL PURPOSE. OR DER PRONOUNCED IN THE OPEN COURT ON 8 TH JU LY , 2015 SD/ - SD/ ( A.D. JAIN ) (N.K. BILLAIYA) /JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI ; DATED : 8 TH JU LY , 2015 . . ./ RJ , SR. PS / 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