Shri Altaf Masumali Nathani, Bhavnagar V. The Income Tax Officer, Ward-1(1), Bhavnagar

ITA 3388/AHD/2016

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 2794 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 2 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-02-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2007-2008
• Appeal Filed On: 15-12-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: B L MEENA
• Keywords: Peak credit; Corroborative evidences
• Section: 143(3); 69

Judgement Text

ITA NO. 3388/AHD/2016 ALTA MASUMALI NATHANI VS. ITO ASSESSMENT YEAR : 2007-08 PAGE 1 OF 3 IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD SMC BENCH, AHMEDABAD [CORAM: PRAMOD KUMAR, VP AND MS. MADHUMITA ROY, JM] ITA NO. 3388/AHD/2016 ASSESSMENT YEAR: 2007-08 ALTAF MASUMALI NATHANI ..................A PPELLANT JAFRI FLAT NO. 7, JAMNAKUND, SHISHUVIHAR, BHAVNAGAR [PAN : ADIPN 3444 Q] VS. INCOME TAX OFFICER ............................RESPONDENT WARD 1(1), BHAVNAGAR APPEARANCES BY: TUSHAR HEMANI, FOR THE APPELLANT BL MEENA, FOR THE RESPONDENT DATE OF CONCLUDING THE HEARING : 30.11.2018 DATE OF PRONOUNCING THE ORDER : 28.02.2019 O R D E R PER PRAMOD KUMAR, VICE PRESIDENT : 1. BY WAY OF THIS APPEAL, THE ASSESSEE APPELLANT HA S CHALLENGED CORRECTNESS OF LEARNED CIT(A)S ORDER DATED 22 ND SEPTEMBER 2016, IN THE MATTER OF ASSESSMENT UNDER SECTION 143(3) OF THE INCOME-TAX ACT, 1961, F OR THE ASSESSMENT YEAR 2007-08. 2. GRIEVANCE OF THE ASSESSEE, IN SUBSTANCE, IS THAT LEARNED CIT(A) HAS ERRED BOTH IN LAW AND ON THE FACTS OF THE CASE, IN CONFIR MING THE ACTION OF THE AO IN TREATING THE PEAK CREDIT OF RS.8,65,000/- AS UNEXPLAINED CAS H CREDIT UNDER SECTION 69 OF THE ACT . 3. THE ISSUE IN APPEAL LIES IN A VERY NARROW COMPAS S OF MATERIAL FACTS. THE ASSESSEE DERIVES INCOME FROM RETAIL TRADING OF SHIP MACHINERY PARTS, AND FROM BROKERAGE. DURING THE COURSE OF SCRUTINY ASSESSMEN T PROCEEDINGS, THE ASSESSING OFFICER NOTICED THAT THERE ARE CASH DEPOSITS, AGGRE GATING TO RS.16,75,000/-, IN A BANK ACCOUNT WITH AXIS BANK. WHEN THE MATTER WAS PROBED FURTHER, THE ASSESSING OFFICER ADDED DEPOSITS OF RS.3,000/- ON 21.06.2006, OF RS.1 2,000/- ON 08.02.2007, OF RS.6,00,000/- ON 30.03.2007 AND OF RS.2,50,000/- ON 30.03.2007 AS UNEXPLAINED AND ADDED THE SAME TO THE INCOME. AGGRIEVED, ASSES SEE CARRIED THE MATTER IN APPEAL BEFORE THE CIT(A). IT WAS EXPLAINED BY THE ASSESSEE THAT THE ASSESSEE HAD RECEIVED CASH OF RS.8,50,000/- AS ADVANCE FROM PURC HASE OF GOODS FROM M/S. RAJVI ENTERPRISES. SINCE THE DEAL WAS EVENTUALLY CANCELL ED, THE SAID AMOUNT WAS RETURNED BY CHEQUE. ALL THE SUPPORTING EVIDENCES WERE FILED BEFORE THE CIT(A). LEARNED CIT(A), HOWEVER, REJECTED THE PLEA ON THE GROUND TH AT ALL THESE DETAILS WERE NOT BEFORE THE ASSESSING OFFICER AND SEEMED TO BE AN AF TERTHOUGHT. HE ALSO REFERRED TO THE OBSERVATION OF THE ASSESSING OFFICER, IN THE RE MAND PROCEEDINGS, WHICH SHOWED ITA NO. 3388/AHD/2016 ALTA MASUMALI NATHANI VS. ITO ASSESSMENT YEAR : 2007-08 PAGE 2 OF 3 THAT THE ASSESSEE HAD NOT PRODUCED PURCHASE ORDERS, STOCK RECORDS, AND THAT DETAILS OF GENERATOR WERE NOT ON RECORD, AND THAT THE ASSESSEE HAS CLEARLY CONCOCTED THE STORY TO ESCAPE FROM TAX LIABILITIES. THE STAND OF THE ASSESSING OFFICER WAS THUS CONFIRMED. THE ASSESSEE IS NOT SATISFIED AND IS IN FURTHER APPEAL BEFORE US. 4. WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED THE MATERIAL ON RECORD AND DULY CONSIDERED FACTS OF THE CASE IN THE LIGHT OF THE AP PLICABLE LEGAL POSITION. 5. WE HAVE TAKEN NOTE OF THE PLEA OF THE ASSESSEE T HAT CASH OF RS.6,00,000/- AND RS.2,50,000/- WAS GIVEN ON 25.03.2007 AND 27.03 .2007 FOR PURCHASE OF DIESEL GENERATOR. AS THE GENERATOR WAS NOT FOUND TO BE UP TO MARK, THIS MONEY WAS FINALLY RETURNED BY CHEQUE AND THAT IS NOT IN DISPUTE. THE CONFIRMATIONS, LEDGER ACCOUNT AND BANK STATEMENTS ARE ALSO ON RECORD. WE HAVE ALSO N OTED THAT SHIP BREAKING INDUSTRY IS NOT A VERY WELL ORGANIZED INDUSTRY WHICH MUST ES SENTIALLY HAVE PURCHASE ORDER SYSTEM IN PLACE AND IN ANY CASE IT WORKS PRIMARILY THROUGH MIDDLEMAN. KEEPING ALL THESE FACTORS IN MIND, IN OUR CONSIDERED VIEW, THE EXPLANATION OF THE ASSESSEE DESERVES TO BE ACCEPTED PARTICULARLY AS BONAFIDES OF REFUND ARE NOT EVEN DOUBTED AND ALL THE CONFIRMATIONS AND LEDGER ACCOUNT COPIES ARE ON RECORD. WE, THEREFORE, TREAT THE DEPOSITS TO THE EXTENT OF RS.8,50,000/- A S EXPLAINED AND DELETE THE IMPUGNED ADDITION TO THAT EXTENT. 6. THERE WERE NO SPECIFIC ARGUMENTS WITH RESPECT TO DEPOSITS OF RS.15,000/- AND WE TREAT ASSESSEES GRIEVANCE, TO THAT EXTENT, AS N OT PRESSED BECAUSE OF SMALLNESS OF AMOUNT. 7. IN THE RESULT, THE APPEAL IS PARTLY ALLOWED IN T HE TERMS INDICATED ABOVE. PRONOUNCED IN THE OPEN COURT TODAY ON THE 28 TH FEBRUARY, 2019. SD/- SD/- MS. MADHUMITA ROY PRA MOD KUMAR (JUDICIAL MEMBER) (VICE PRESIDENT) AHMEDABAD, THE 28 TH DAY OF FEBRUARY, 2019 *BT COPIES TO: (1) THE APPELLANT (2) THE RESPONDENT (3) COMMISSIONER (4) CIT(A) (5) DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER TRUE COPY ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCHES, AHMEDABAD