SEVANTILAL V. SHAH, MUMBAI V. I.T.O.24(2)(2), MUMBAI

ITA 3368/MUM/2011

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 87913 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 8 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-01-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 12-01-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 27-04-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: NEIL PHILIP
• Assessee Lawyers: HARSHAD SHAH SON OF
• Keywords: Unexplained cash credit

Judgement Text

, , , , , ,, , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES E, MUMBAI , , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER, AND SHRI SANJAY ARORA, ACCOUNTANT MEMBER ITA NO.3368/MUM/2011 ASSESSMENT YEAR: 2007-08 SEVANTILAL V. SHAH, 207, C WING, MANISH KUNJ, RAMCHANDRA LANE, MALAD (W), MUMBAI - 400064 / VS. ITO - 24(2)(2), AAYKAR BHAVAN, MUMBAI ( #$% /ASSESSEE) ( & / REVENUE) P.A. NO.AAPPS3130B #$% ' ( ' ( ' ( ' ( / // / ASSESSEE BY) SHRI HARSHAD SHAH (SON OF THE ASSESSEE) & ' ( ' ( ' ( ' ( / REVENUE BY : SHRI NEIL PHILIP - DR ' %) / / / / DATE OF HEARING : 12 /01/2015 *+, ' %) / DATE OF ORDER: 13 /0 1/2015 - - - - / / / / O R D E R PER JOGINDER SINGH (JUDICIAL MEMBER) : THE ASSESSEE IS AGGRIEVED BY THE IMPUGNED ORDER DAT ED 08/02/2011 OF THE LD. FIRST APPELLATE AUTHORITY, MU MBAI, THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS:- 1.1 THE LEA R NED COMM I SSIONE R OF INCOME TAX ( APPEALS ) - 34 , MUMBA I ( ' ID . C I T ( A )] , ER R E D I N CO NF I R M IN G THE ORDER PASSED BY THE ASSESSING OFFICER U NDER S ECTIO N 1 43 (3) O F TH E ACT , WH I CH WAS PASSED IN B R EACH O F THE NATU R A L J USTICE . SEVANTILAL V. SHAH 2 1 . 2 WH IL E DO I NG SO , T HE I D . C IT ( A ) F AI L ED TO APPREC I A T E THAT : (I) T H E ASSESSME NT W A S FR AMED BY THE A . O WITHOUT P R OV I DING EFFECTIVE A N D SUFF I CIENT OPPOR T UNITY O F BE I NG HEA R D TO THE APPELLANT ; A N D (II) TH E ORDER SO PASSED B Y THE A . O . IN BREAC H O F P RIN C I PLE OF NATURA L J UST I CE WAS LI A BL E T O H ELD BAD IN LAW. 1 . 3 IT IS SU B MI T T ED T HAT I N TH E F ACTS A N D THE C I RCUM S TANCES O F TH E CASE AND I N L AW , T HE ORDE R P ASSED WAS LI AB L E T O BE HE L D AS BAD I N L AW . WI T H O UT PREJUDICE TO THE ABOVE: 2 . 1 T H E ID . C I T ( A ) E RRED IN CONFI RMING THE ACTION OF THE AO IN MAKING A DDITION OF RS. 2 1 , OO , OOO / - , BE ING T HE DEPOSITS I N BANK ACCO UNT S , AS I NCOME OF THE APPELLA NT F R OM UNDISC L OSED SOU R CES . 2 . 2 IT I S SUB M ITTED TH A T IN T H E F AC TS A N D TH E C I RCUMSTANCES OF THE CASE , AND I N LAW , NO SUCH ADD ITI O N WA S CALLE D F O R . 3. T H E AP P E LL AN T C R AVES L E AVE TO ADD TO , ALTE R, DELETE OR M O DIFY A LL OR A N Y OF THE ABOVE G RO UN DS A T TH E TIM E OF HEARING. 2. AT THE TIME OF HEARING, SON OF THE ASSESSEE, SHR I HARSHAD SHAH, PERSONALLY APPEARED AND REQUESTED FOR ADJOURN MENT ON THE GROUNDS STATED THEREIN. WE NOTE THAT THE APPEA L OF THE ASSESSEE WAS FILED ON 27/04/2011 AND WAS POSTED FOR HEARING FOR 22/02/2012. ON THAT DAY, THE APPEAL WAS ADJOUR NED AT THE REQUEST OF THE ASSESSEE. ON 17/05/2012, AGAIN AT TH E REQUEST OF THE ASSESSEE WAS ADJOURNED AND FINAL OPPORTUNITY WAS GRANTED TO THE ASSESSEE. ON 29/08/2012, AGAIN THE ASSESSEE SOUGHT ADJOURNMENT AND THE APPEAL WAS ADJOURNED TO 31/12/2 012. ON THAT DATE ALSO, AT THE REQUEST OF THE ASSESSEE, THE APPEAL WAS ADJOURNED TO 09/01/2013. AGAIN, AT THE REQUEST OF THE ASSESSEE, THE APPEAL WAS ADJOURNED TO 16/07/2013 BY PROVIDING LAST OPPORTUNITY TO THE ASSESSEE. SURPRISINGLY, ON 16/07/2013, AGAIN AT THE REQUEST OF THE ASSESSEE, THE APPEAL WA S ADJOURNED TO 23/12/2013. TODAY, ON 12/01/2015, THE ASSESSEE AGA IN REQUESTED FOR ADJOURNMENT. KEEPING IN VIEW, THE TO TALITY OF FACTS, NARRATED HEREINABOVE, THE SON OF THE ASSESSEE WAS A SKED THAT NO FURTHER ADJOURNMENT SHALL BE GRANTED AND IF HE OR A UTHORISED REPRESENTATIVE IS INTERESTED TO ARGUE THE APPEAL FU RTHER TWO DAYS SEVANTILAL V. SHAH 3 TIME CAN BE GRANTED. SHRI HARSHAD SHAH CONTENDED T HAT HE WANTS LONGER TIME AND NOT READY TO ARGUE THE APPEAL TODAY OR AFTER TWO DAYS AS SUGGESTED BY THE BENCH. IN VIEW OF THESE FACTS, IT SEEMS THAT THE ASSESSEE IS NOT INTERESTED TO PUR SUE ITS APPEAL, CONSEQUENTLY, WE HAVE NO OPTION BUT TO REJECT THE A PPLICATION FOR ADJOURNMENT, FILED BY THE ASSESSEE.. 2.1. WE HAVE HEARD, SHRI NEIL PHILIP, LD. DR, WHO B ROADLY DEFENDED THE CONCLUSION ARRIVED AT IN THE ASSESSMEN T ORDER AS WELL AS IN THE IMPUGNED ORDER BY INVITING OUR ATTEN TION TO PARA 4.1 (PAGE-2) AND PARA 4.5 (PAGE-5) OF THE ASSESSMEN T ORDER. STRONG PLEA WAS RAISED THAT THE SOURCE OF CASH WAS NOT EXPLAINED BY THE ASSESSEE IN SPITE OF PROVIDING OPPORTUNITY R IGHT FROM ASSESSMENT STAGE. 2.2. WE HAVE CONSIDERED THE SUBMISSIONS PUT-FORTH B Y LD. DR AND ON THE REASONING CONTAINED IN PARA -2 (SUPRA) O F THIS ORDER, WE HAVE NO OPTION BUT TO PROCEED TO DISPOSE OFF THE APPEAL OF THE ASSESSEE ON THE BASIS OF MATERIAL AVAILABLE ON RECO RD. THE FACTS, IN BRIEF, ARE THAT THE ASSESSEE DERIVES INCOME FROM CONSULTANCY CHARGES AND INTEREST INCOME ETC, DECLARED TOTAL INC OME OF RS.67,677/- IN HIS RETURN FILED ON 02/11/2007. PUR SUANT TO NOTICE, ISSUED THE ASSESSEE PERSONALLY ATTENDED THE PROCEEDINGS. IT WAS FOUND BY THE ASSESSING OFFICER THAT THERE WA S CASH DEPOSIT OF RS.10,84,000/- IN AXIS BANK, AND RS.10,50,000/- IN MUMBAI DISTRICT CENTRAL COOPERATIVE BANK, MALAD BRANCH. T HE ASSESSEE WAS ASKED TO PRODUCE THE COPY OF BANK STATEMENTS AN D DETAILS OF SOURCES OF THE CASH DEPOSITED IN THE AFORESAID ACCO UNTS ALONG WITH SUPPORTING DOCUMENTARY EVIDENCES. THE ASSESSE E, IN RESPONSE, PERSONALLY ATTENDED THE PROCEEDINGS AND S UBMITTED THE STATEMENT OF BANK ACCOUNTS FROM WHICH IT WAS NOTICE D THAT THE SEVANTILAL V. SHAH 4 CASH DEPOSITED WAS RECEIVED TO BE CLAIMED FROM ONE SHRI D.S. SHAH AND IMMEDIATELY ON THE SAME DAY THE DEPOSITS W ERE TRANSFERRED TO SHRI D.S.SHAH IN THE FORM OF CHEQUE. THE DETAILS ARE SUMMARIZED AS UNDER:- SR. NO. DATE AMOUNT DEPOSITED AMOUNT WITHDRAWN NAME OF BANK REMARKS 1. 17.10.2006 5,50,000 5,50,000 THE MUMBAI DISTRICT CENTRAL CO-OP. BANK CASH RECEIVED FROM D.S.SHAH AND PAID TO D.S.SHAH 2. 29.03.2007 5,00,000 5,00,000 -DO- -DO- 3. 28.06.2006 3,699 AXIS BANK RECEIVED FROM K.C.SHAH 4. 30.06.2006 3,000, -DO- RECEIVED FROM RAMSH A. SHAH 5. 13.07.2006 3,740 -DO- RECEIVED FROM K.C.SHAH 6. 13.10.2006 3,000 -DO- CASH DEPOSITED 7. 17.10.2006 5,50,000 5,50,000 -DO- CASH RECEIVED FROM AND PAID TO D.S. SHAH 8. 20.10.2006 2,000 -DO- RECEIVED FROM R.A. SHAH FROM PREVIOUS ADVANCE 9. 30.10.2006 5,000 -DO- CASH DEPOSITED FROM NSC MATURED 10. 14.11.2006 11,000 -DO- CASH DEPOSITED FROM NSC MATURED 11. 29.10.2007 5,000 -DO- NSC MATURED 12. 06.03.2007 10,000 -DO- NSC MATURITY OF H.S.SHAH(SON) 13. 15.03.2007 11,261 -DO- RECEIVED AGAINST OLD RECEIVABLE 14. 29.03.2007 5,00,000 5,00,000 -DO- RECEIVED FROM AND PAID TO D.S. SHAH FROM THE ABOVE, IT WAS FOUND BY THE ASSESSING OFFIC ER THAT THE TRANSACTIONS WHICH ARE MORE THAN RS.5,00,000/- WERE RECEIVED IN CASH FROM THE D.S.SHAH AND IMMEDIATELY/ SAME DAY ON RECEIPT, IT WAS WITHDRAWN/CHEQUE WAS ISSUED TO S HRI D.S.SHAH. THE ASSESSEE WAS ASKED TO FILE LOAN CONF IRMATIONS, ADDRESS OF PARTIES, PAN, COPY OF BANK STATEMENT, RE TURN FILED BY THEM EVIDENCING CASH LOAN RECEIVED/GIVEN. THE ASSE SSEE ATTENDED THE PROCEEDINGS AND PRODUCED LOAN CONFIRMA TION FROM SEVANTILAL V. SHAH 5 SHRI PRASHANT SHAH (WHOSE NAME WAS NOT APPEARING IN THE BANK STATEMENT) AND LOAN CONFIRMATION FROM SHRI DHARMESH S. SHAH WITH COPY OF BANK STATEMENT. ON VERIFICATION OF TH E BALANCE SHEET, IT WAS FOUND THAT THE ASSESSEE DEBITED BALAN CE ON ACCOUNT OF SHRI DHARMESH S. SHAH AT RS.15,50,000/- AND RS.5 ,50,000/- IN PRASHANT SHAH. IT WAS ASKED WHY THE CASH WAS RE CEIVED AND NOT REFLECTED IN LOAN CONFIRMATION AND ALSO WHY THE CASH WAS IMMEDIATELY GIVEN BY WAY OF CHEQUE? IT WAS ALSO AS KED AS TO WHY THE PROVISIONS OF SECTION 269SS OF THE ACT SHOULD N OT BE INVOKED FOR ACCEPTING CASH ABOVE PRESCRIBE LIMIT. THE ASSE SSEE WAS ASKED TO FILE REPLY ON 11/11/2009. THE ASSESSEE ON THAT DATE NEITHER APPEARED NOR FILED ANY REPLY. HOWEVER, ONE TAXATIO N CONSULTANT FILED A LETTER ALONG WITH CERTAIN DETAILS. AT THIS STAGE, THE ASSESSEE CHANGED ITS STAND AS EARLIER IT WAS CLAIME D TO BE CASH LOAN AND LATER CLAIMING THAT IT WAS A CASH SAVING F ROM FINANCIAL YEAR 1983-84 TO 2006-07 FROM THE SALARY EARNED FROM DIFFERENT COMPANIES WHERE HE WORKED AS MANAGER AND M/S SWAN M ILLS LTD. WHERE HE WORKED AS SENIOR OFFICER IN ACCOUNTS AND FINANCE. THE ASSESSEE ALSO CLAIMED THAT IT WAS A SAVING OF L AST 24 YEARS. THIS STAND OF THE ASSESSEE WAS FOUND UNACCEPTABLE O N THE PLEA THAT THE ASSESSEE WAS WORKING AS A SENIOR OFFICER IN ACCOUNTS AND FINANCE FOR THE LAST 24 YEARS AND ALL OF SUDDEN HE DEPOSITED CASH IN FINANCIAL YEAR 2006-07. FURTHER IT WAS NOT ICED BY THE ASSESSING OFFICER, FROM THE ACCOUNTS OF THE ASSESSE E, THAT ASSESSEE WAS INVESTING IN FDS AND NSCS TO GET INTER EST INCOME. IN THE ABSENCE OF PROPER EXPLANATION/CLARIFICATION, THE CASH DEPOSIT OF RS.21,00,000/-, BY FOLLOWING THE DECISIO N FROM THE HONBLE APEX COURT IN MCDOWELL AND COMPANY VS CTO 1 54 ITR 149, THE DEPOSIT WAS TREATED FROM UNDISCLOSED SOURC ES AND ADDED TO THE TOTAL INCOME OF THE ASSESSEE. SEVANTILAL V. SHAH 6 2.3. ON APPEAL, BEFORE THE LD. COMMISSIONER OF INC OME TAX (APPEALS), THE STAND OF THE ASSESSING OFFICER WAS A FFIRMED AGAINST WHICH THE ASSESSEE IS IN FURTHER APPEAL BEFORE THIS TRIBUNAL. THE RELEVANT PORTION FROM THE IMPUGNED ORDER IS REPRODU CED HEREUNDER:- I HAVE GONE THROUGH THE CONTENTS OF THE IMPUGNED OR DER AS WELL AS ARGUMENTS & SUBMISSIONS OF THE LD. AR OF TH E APPELLANT ALONG WITH MATERIAL AVAILABLE ON RECORD. I DO NOT FIND ANY FORCE IN THE ARGUMENTS & SUBMISSIONS OF LD . AUTHORIZED REPRESENTATIVE ON THE ISSUE. THE ASSESS ING OFFICER HAS CATEGORICALLY GIVEN A FINDING OF FACT T HAT THE APPELLANT TRIED TO EXPLAIN AWAY THAT THE CASH RECEI PTS WERE CASH LOANS FROM S/SHRI D.S. SHAH & PRASHANT SHAH AN D LATER ON THROUGH AFFIDAVIT STATED THAT ALL THE CASH DEPOSITS IN THE BANK WERE FROM THE SALARIES RECEIVED BY HIM LAS T 24 YEARS. NO PRUDENT ASSESSEE WHO HAD EARLIER WORKED EVEN AS A BRANCH MANAGER IN A BANK AND MANAGER FINANCE & ACCOUNTS, WOULD MANAGE HIS OWN FINANCIAL AFFAIRS IN SUCH A WAY THAT HE DOES NOT HAVE EXACT EXPLANATION FOR THE CASH DEPOSITS IN HIS BANK ACCOUNTS LIKE IN THE PRESENT C ASE. IN MAY CONSIDERED OPINION, THE ASSESSING OFFICER HAS R IGHTLY REJECTED THE EXPLANATION DURING THE COURSE OF ASSES SMENT PROCEEDINGS AS NOT BEEN THE PLAUSIBLE BONA FIDE EXP LANATION ON THE ISSUE. MOREOVER, THE EXPLANATION SUBMITTED DURING THE APPELLATE PROCEEDINGS ALSO IS WITHOUT ANY DOCUM ENTARY SUPPORT TO GENERATE A BELIEVE THAT THE CASH DEPOSIT S ARE FROM HIS SAVINGS OF PAST YEARS OUT OF THE FUND THAT SUFFERED TAXATION AT DUE TIME. ACCORDINGLY, THE IMPUGNED AD DITION IS UPHELD FOR UNEXPLAINED CASH CREDIT AND THE APPEAL FAILS ON ALL THE GROUNDS. SEVANTILAL V. SHAH 7 IF THE OBSERVATION MADE IN THE ASSESSMENT ORDER LEA DING TO ADDITION IN THE TOTAL INCOME, CONCLUSION DRAWN IN T HE IMPUGNED ORDER, ASSERTIONS MADE BY LD. DR AND THE MATERIAL A VAILABLE ON RECORD, IF KEPT IN JUXTAPOSITION AND ANALYZED, UNCO NTROVERTEDLY THE ASSESSEE HAD BEEN TAKING DIFFERENT STAND AT DIF FERENT STAGES. BEFORE THE ASSESSING OFFICER, THE ASSESSEE CLAIMED THAT HE TOOK CASH DEPOSIT FROM ONE SHRI D.S. SHAH. IT IS NOTED THAT IMMEDIATELY ON RECEIPT OF CASH, THE AMOUNT WAS RETU RNED THROUGH CHEQUE AND SECONDLY BEFORE THE LD. COMMISSI ONER OF INCOME TAX (APPEALS), THE ASSESSEE TOOK ANOTHER STA ND THAT THE CASH WAS DEPOSITED IN THE BANK OUT OF THE SAVINGS O F ABOUT LAST 24 YEARS. THE ASSESSEE WORKED AS MANAGER IN VARIOU S ORGANIZATION THAT TOO IN ACCOUNTS, THEREFORE, IT IS UNBELIEVABLE THAT A PERSON WHO HIMSELF HAD BEEN MANAGER ACCOUNTS WILL KEEP CASH FOR 24 YEARS AND SUDDENLY AFTER SUCH A GAP WIL L DEPOSIT IN THE BANK ACCOUNT. IT IS ALSO NOTED THAT THE EXPLAN ATION FURNISHED BY THE ASSESSEE WAS FOUND UNCONVINCING BY THE LD. A SSESSING OFFICER AS WELL AS BY THE LD. COMMISSIONER OF INCOM E TAX (APPEALS). BEFORE THIS TRIBUNAL ALSO, AS MENTIONED EARLIER, THE ASSESSEE CONSTANTLY HAD BEEN SEEKING ADJOURNMENT SI NCE 22/02/2012 AND EVEN ON THE HEARING BEFORE THIS BENC H ON 12/01/2015 NEITHER ANY EXPLANATION WAS FURNISHED NO R ARGUED THE CASE AND SIMPLY TRIED TO DELAY THE PROCEEDINGS BY FURTHER SEEKING ADJOURNMENT. AS MENTIONED EARLIER, ON A PR OPOSAL BY THE BENCH, WHETHER THE ASSESSEE IS READY TO ARGUE AFTER TWO DAYS, THE SON OF THE ASSESSEE FLATLY REFUSED TO ARGUE AND INS ISTED FOR ADJOURNMENT ONLY. IT SEEMS THAT THE ASSESSEE HAS N OTHING TO EXPLAIN. IT IS ALSO NOTED THAT THE ASSESSEE HAD BE EN EARNING FROM CONSULTANCY CHARGES AND INTEREST INCOME. IT IS NOT THE CASE THAT THE ASSESSEE IS AN ILLITERATE PERSON. IN THE ABSEN CE OF ANY SEVANTILAL V. SHAH 8 EXPLANATION, WE FIND NO INFIRMITY IN THE CONCLUSION DRAWN BY THE AUTHORITIES BELOW. THE ORDER OF THE LD. COMMISSION ER OF INCOME TAX (APPEALS) IS, THEREFORE, AFFIRMED. FINALLY, THE APPEAL OF ASSESSEE IS DISMISSED. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. DR AND SHRI HARSHAD SHAH, SON OF T HE ASSESSEE, AT THE CONCLUSION OF THE HEARING ON 12/01/2015. - ' *+, . / 12/01/2015 + ' 4 SD/- (SANJAY ARORA) SD/- (JOGINDER SINGH) / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI; . DATED : 13/01/201 5 F{X~{T? P.S/. .. - ' 6%7 87,% - ' 6%7 87,% - ' 6%7 87,% - ' 6%7 87,%/ COPY OF THE ORDER FORWARDED TO : 1. 9: / THE APPELLANT 2. 6;9: / THE RESPONDENT. 3. < ( ) / THE CIT, MUMBAI. 4. < / CIT(A)- , MUMBAI 5. 7>4 6% , , / DR, ITAT, MUMBAI 6. 4?# @ / GUARD FILE. - - - - / BY ORDER, ;7% 6% //TRUE COPY// A AA A/ // /B & B & B & B & (DY./ASSTT. REGISTRAR) , , , , / ITAT, MUMBAI