BINAL NILESH SHAH, MUMBAI V. ITO WD 16(3)(1), MUMBAI

ITA 3429/MUM/2010

• Counselvise Citation: 342919914 RSA 2010
• Duration Of Justice: 2 year(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-05-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: H
• Next Hearing Date: 19-04-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 30-04-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V V SHASTRI
• Keywords: Income from undisclosed sources

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES H, MUMBAI BEFORE SHRI B. RAMAKOTAIAH (AM) AND SHRI S.S. GODAR A (JM) ITA NO.3429/M/2010 ASSESSMENT YEAR: 2006-07 MRS. BINAL NILESH SHAH, C/O. NILESH V SHAH, 5/21, PRABHAT, NEXT TO AMERICAN CONSULATE, 76 WARDEN ROAD, BREACH CANDY, MUMBAI 400 026. PAN: AARPS5494B VS. ITO, WARD 16(3)(1), MATRU MANDIR, 278, TARDEO ROAD, MUMBAI 400 007. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI HARESH P. SHAH RESPONDENT BY: SHRI V. V. SHASTRI DATE OF HEARING: 19.4.2012 DATE OF PRONOUNCEMENT:2-5-2012 O R D E R PER S.S. GODARA, J.M: IN THE INSTANT APPEAL, THE ASSESSEE HAS CHALLENGED THE ORDER OF LD. CIT (A)-27, MUMBAI DATED 5.2.2010 FOR THE ASSESSMENT YEAR 2006- 07 CONFIRMING THE ADDITION OF RS. 24,24,800/- MADE BY THE ASSESSING OFFICER. 2. IN THE PRESENT APPEAL TOTAL FOUR GROUNDS ARE THE RE I.E., GROUND NOS.1.1 TO 1.4. ALL GROUNDS CHALLENGE THE ABOVE SAID ADDITION MADE BY T HE ASSESSING OFFICER. CONFIRMED BY THE LD. CIT (A). BEING INTER-CONNECTED, ALL GROUNDS AR E HEREBY DECIDED TOGETHER. 3. FACTS OF THE PRESENT CASE AS ON RECORD ARE THAT THE ASSESSEE WHO IS AN INDIVIDUAL FILED HER RETURN ON 29.7.2006 DECLARING TOTAL INCOM E AS RS. 93,350/- ALONG WITH STATEMENT OF INCOME. HEADS OF INCOME WERE CAPITAL GAINS AND INC OME FROM OTHER SOURCES. 4. DURING THE YEAR UNDER CONSIDERATION, THE ASSESSE E HAD RECEIVED FOREIGN REMITTANCE OF US$ 56,000 FROM JAPAN. PER ASSESSEE, THE SAID AMOU NT WAS HER PAST SAVINGS FROM EARNINGS 2 ITA NO.3429/M/2010 IN JAPAN BY WAY OF HER OWN FOREIGN REMITTANCE. FUR THER ON 10.11.2008, SHE STATED BEFORE THE ASSESSING OFFICER THAT SHE WENT TO JAPAN ON 11. 4.1994 THROUGH DEPENDENT VISA. RESIDED THERE AS AN NRI (NON-RESIDENT INDIAN) TILL 29.5.200 5 AND CAME BACK TO INDIA. DURING HER STAY IN JAPAN, SHE EARNED AND GOT REMITTED THE ABOV E SAID AMOUNT. 5. REGARDING SOURCE OF THE ABOVE REMITTANCE, SHE EX PLAINED THAT THE SAME WAS HER ACCUMULATED HOUSEHOLD SAVINGS OF 11 YEARS AS SHE HA D WORKED ON PART-TIME BASIS IN M/S. AROHI DIAMONDS, TOKYO FROM AUGUST 2002 TO APRIL 200 5, THEREAFTER WITH DIMINCO N.V. (TOKYO) AS WELL AS HER TEACHING INCOME WHICH SHE EA RNED BY IMPARTING DANCE TRAINING TO INDIAN AND JAPANESE STUDENTS. 6. THE ASSESSING OFFICER ALSO SOUGHT INFORMATION FR OM THE STATE BANK OF INDIA ABOUT THE SOURCE OF HER ABOVE REMITTANCE. ON 8.12.2008, THE CHIEF MANAGER, STATE BANK OF INDIA INFORMED THE ASSESSING OFFICER THAT SOURCE OF REMIT TANCE WAS M/S. AAROHI DIAMONDS, TOKYO, JAPAN. 7. AGAIN, THE ASSESSEE OFFERED EXPLANATION ON 9.12. 2008 AND 15.12.2008. ALL THE THREE EXPLANATIONS DATED 10.11.2008, 9.12.2008 AND 15.12. 2008 (SUPRA) CLARIFIED THAT THE REMITTANCE WAS FROM M/S. AROHI DIAMONDS, JAPAN. 8. HOWEVER, THE ASSESSING OFFICER REJECTED HER EXPL ANATION AND DOCUMENTARY EVIDENCE ON THE BASIS OF ALLEGED DISCREPANCIES AND VARIED EX PLANATIONS. ASSESSED THE SAID AMOUNT I.E., US$56,000 AS INCOME FROM UNDISCLOSED SOURCES. ACCORDINGLY, ADDED THE SAME TO THE TOTAL INCOME OF THE ASSESSEE VIDE ASSESSMENT ORDER DATED 26.12.2008. 9. AGGRIEVED BY THE ASSESSMENT ORDER, THE ASSESSEE PREFERRED APPEAL BEFORE THE LEARNED CIT (A). VIDE IMPUGNED ORDER, THE FINDINGS OF THE ASSESSING OFFICER HAVE BEEN CONFIRMED BY LD. CIT (A) BY OBSERVING AS UNDER: 3 ITA NO.3429/M/2010 I HAVE GONE THROUGH THE REPLY / SUBMISSIONS OF THE APPELLANT. I DO NOT FIND THE REPLY OF APPELLANT SATISFACTORY. IT IS SE EN THAT THE APPELLANT HAS BEEN CONSISTENTLY CHANGING HER STATEMENTS BEFORE THE AO. EARLIER IT HAS BEEN STATED BY HER THAT IT WAS HER OWN MONEY WHICH WAS REMITTED BY HER TO INDIA, SUBSEQUENTLY WHEN IT WAS FOUND THAT THE AMOUNT WAS TRANSFERRED FROM THE ACCOUNT OF M/S. AAROHI DIAMONDS, JAPAN, SHE GIVEN A STATEMENT THAT SHE HAD GIVEN ALL HER SAVINGS TO HER HUSBAND OVER A PERIOD OF 11 YEARS WHICH WAS DEPOSITED BY HER HUSBAND IN HIS BANK ACCOUNT AS SHE DID NOT HAVE A SEPARATE BANK ACCOUNT AND THIS SAID AMOUNT ALONG WITH OTHER AMOUNTS OF HER HUSBAND WERE PERIODICALLY TRANSFERRED TO M/S. AAROHI DIAMON DS, JAPAN. IT HAS BEEN STATED THAT SHE WAS MARRIED IN 1994 AND HAD BEEN LI VING IN JAPAN SINCE THEN AND SHE RETURNED TO INDIA IN 29.5.2005 AND ON HER C OMING TO INDIA, SHE GOT HER SAVINGS FROM HER HUSBAND WHICH WAS RECEIVED FRO M M/S. AAROHI DIAMONDS, JAPAN AND THESE SAVINGS WERE OUT OF HER EARNINGS AN D OUT OF MONEY HANDED OVER TO HER BY HER HUSBAND OUT OF HOUSEHOLD EXPENSE S WHILE IN JAPAN. THIS STORY DOES NOT SEEM TO BE VERY PLAUSIBLE. IF SHE H AD BEEN HAVING SAVINGS EARLIER, SHE WOULD HAVE OPENED AN NRI A/C IN INDIA AND WOULD HAVE BEEN TRANSFERRING HER SAVINGS FROM TIME-TO-TIME OR EVEN IN JAPAN SHE WOULD HAVE OPENED A BANK ACCOUNT IN WHICH SHE WOULD HAVE BEEN DEPOSITING HER SAVINGS FROM TIME-TO-TIME. IT IS NOT POSSIBLE FOR A PERSON TO LIVE IN JAPAN FOR 11 YEARS AND NOT EVEN HAVE A BANK ACCOUNT BECAUSE IT WOULD N OT HAVE BEEN POSSIBLE TO OPERATE WITHOUT A DEBIT / CREDIT CARD IN SUCH AN AD VANCED COUNTRY WHERE ALL PAYMENTS ARE BY CHEQUE. UNDER SUCH CIRCUMSTANCES T HE STORY OF APPELLANT THAT ALL THE SAVINGS MADE BY HER DURING THE LAST 11 YEARS OUT OF HOUSEHOLD EXPENSES MONEY AND WAGES WHICH SHE HAD GOT FROM PAR T TIME WORK WHICH WERE HANDED OVER TO HER HUSBAND WHO HAD BEEN DEPOSI TING IN HIS BANK ACCOUNT DOES NOT HOLD GOOD. THE AMOUNT HAS BEEN TR ANSFERRED TO HER FROM FIRMS ACCOUNT WHICH SHE HAS DEPOSITED IN HER OWN NR I A/C IN INDIA. THE AOS ACTION IN TREATING AS UNEXPLAINED DEPOSITS AND ADDI NG IT TO HER INCOME APPEARS TO BE CORRECT AS THIS MONEY HAS NOT BEEN EARNED BY HER, NOR TRANSFERRED FROM HER OWN ACCOUNT BUT HER HUSBANDS COMPANYS ACCOUNT , HENCE THE ADDITION MADE BY THE AO IS CONFIRMED AND THE ONLY GROUND OF APPEAL STANDS DISMISSED. 9.1. HENCE, THE INSTANT APPEAL BEFORE US. 10. IN SUPPORT OF THE GROUND RAISED, THE LEARNED AR HAS REFERRED TO FINDINGS OF THE ASSESSING OFFICER AS WELL AS LD. CIT (A). THEREAFT ER, HE HAS TAKEN US TO PAPER BOOK PAGE NOS. 9, 10, 12 I.E., THE RECORD OF THE PAYMENT, ASS ESSEES WORKING PERIOD WITH M/S. AAROHI DIAMONDS, CLARIFICATION BY HER HUSBAND AT PAGE 16 AS WELL AS PAGE 26 (TRUE TRANSLATION OF THE DOCUMENTS IN JAPANESE) REGARDING THE DETAILS OF ASSESSEES HUSBAND AS WELL AS HERSELF DULY CERTIFIED TO BE THE TRUE COPIES. 4 ITA NO.3429/M/2010 11. RELYING ON THE SAID DETAILS, THE LEARNED AR HAS VEHEMENTLY CONTENDED THAT THE ASSESSEE HAS BEEN SUCCESSFUL IN DISCHARGING HER ONU S SO AS TO PROVE THE SOURCE OF AMOUNT IN QUESTION. HE ALSO RELIED ON 136 ITR 414 (SUKHDAYAL S CASE) IN THIS REGARD. HE HAS ALSO MADE A STATEMENT AT THE BAR THAT SO FAR AS ASSESSEE S REGARDING VISIT TO JAPAN ARE CONCERNED, SHE HAS ALSO FILED PASSPORT DETAILS BEFO RE THE ASSESSING OFFICER. ACCORDINGLY, HE HAS PRAYED FOR ACCEPTANCE OF THE INSTANT APPEAL. 12. ON THE OTHER HAND, THE LEARNED DR HAS RELIED ON THE IMPUGNED ORDER OF LD. CIT (A). PRAYED FOR REJECTION OF GROUNDS. 13. WE HAVE HEARD BOTH THE LEARNED REPRESENTATIVES. ALSO PERUSED THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. IN OUR CONSIDERED OPINIO N, THE ASSESSEE HAS BEEN UNIFORM IN HER EXPLANATION THAT SHE WORKED IN JAPAN. HER REMITTAN CE IN QUESTION IS FROM JAPAN, THAT TOO FROM THE COMPANY. COUPLED WITH THESE THINGS, SHE H AS FILED ALL THE NECESSARY DETAILS. IT IS EVIDENT THAT NEITHER THE ASSESSING OFFICER NOR THE LD. CIT (A) HAS CONSIDERED THE SAME BY GIVING ANY REASON IN SUPPORT. RATHER THE ASSESSING OFFICER HAS NOT EVEN DISCUSSED ANY MATERIAL ON RECORD AT ALL. SO FAR AS LD. CIT (A) I S CONCERNED, IT HAS BEEN ASSUMED THAT HOW SOMEBODY CAN SURVIVE IN JAPAN FOR SUCH A LONG TIME WITHOUT HAVING ANY BANK ACCOUNT ETC. AT THE SAME TIME, THE LD. CIT (A) OBSERVED THAT SHE WOULD HAVE OPENED A NRI A/C IN INDIA. FURTHER IT HAS BEEN OBSERVED THAT THE AMOUNT IN QUE STION HAS BEEN TRANSFERRED TO HER FIRMS ACCOUNT WHICH SHE DEPOSITED IN HER OWN NRI A/C IN I NDIA. THE SAME AMOUNTS TO RENDER MUTUALLY CONTRADICTORY FINDINGS. 14. WE WOULD ALSO LIKE TO MENTION HERE THAT LD. CIT (A) HAS GIVEN A FINDING THAT THE MONEY IN QUESTION HAS NOT BEEN EARNED BY THE ASSESS EE, BUT IT IS HER HUSBANDS COMPANYS MONEY. IF THIS IS SO, THEN WE FAIL TO UNDERSTAND A S TO HOW THE AMOUNT IN QUESTION CAN BE TAKEN AS ASSESSEES INCOME. THE ASSESSEES HUSBAND HIMSELF HOLDS A PAN CARD IN INDIA. 5 ITA NO.3429/M/2010 DETAILS ARE THERE IN THE PAPER BOOK AT PAGE NO.16. STILL, THE REVENUE HAS NOT EVEN BOTHERED TO ASSOCIATE THE ASSESSEES HUSBAND SO AS TO DISBEL IEVE THE ASSESSEES EXPLANATIONS. 15. ACCORDINGLY, WE ARE OF THE OPINION THAT THE LD. CIT (A) HAS ERRED IN CONFIRMING THE ADDITION MADE BY THE ASSESSING OFFICER. HENCE, WE DELETE THE SAID ADDITION IN VIEW OF OUR ABOVE DISCUSSION. 16. CONSEQUENTLY, THE INSTANT APPEAL STANDS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON THIS 2ND DAY OF MAY, 2012. SD/- SD/- (B. RAMAKOTAIAH) (S.S. GODARA) ACCOUNTANT MEMBER JUDICIAL ME MBER DATE : 2.5.2012 AT :MUMBAI OKK COPY TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A), MUMBAI CONCERNED 4. THE CIT, MUMBAI CONCERNED 5. THE DR H BENCH, ITAT, MUMBAI // TRUE COPY// BY ORDER ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI.