ITO WD 21(1)(2), MUMBAI V. FAISAL MOHAMMED KAPADI, MUMBAI

ITA 3468/MUM/2009

• Counselvise Citation: 346819914 RSA 2009
• Duration Of Justice: 4 year(s) 7 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-01-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Next Hearing Date: 21-01-2014
• Assessment Year: 2004-2005
• Appeal Filed On: 27-05-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAVI PRAKASH
• Assessee Lawyers: B V JHAVERI
• Keywords: Unexplained cash credit
• Section: 68; 263; 143(3)

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL F BENCH, MUMBAI . . , , , BEFORE SHRI R.C. SHARMA , ACCOUNTANT MEMBER AND SHRI AMIT SHUKLA , JUDICIAL MEM BER . / ITA NO. 3468 /MUM./ 2009 ( / ASSESSMENT YEAR : 20 0 4 05 ) INCOME TAX OFFICER WARD 21(1)(2) PRATYAKSHAKAR BHAVAN BANDRA KURLA COMPLEX BANDRA (E), MUMBAI 400 051 .. / APP ELLANT V/S FAISAL MOHAMMED KAPADI PROP. GLOBE BIOMEDICAL C 2, JUHU APARTMENT, JUHU ROAD VILE PARLE (W), MUMBAI 400 049 .... / RESPONDENT ./ PERMANENT ACCOUNT NUMBER AAGPK7166D / REVENUE BY : MR. RAVI PRAKASH / ASSESSEE BY: MR. B.V. JHAVERI / DATE OF HEARING 2 1 .0 1 .201 4 / DATE OF ORDE R 24.01.2014 / ORDER , / PER AMIT SHUKLA , J.M. THE PRESENT APPEAL HA S BEEN PREFERRED BY THE REVENUE CHALLENGING THE IMPUGNED ORDER 2 3 RD JANUARY 20 09 , PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX XIII & XIV , MUMBAI, FOR THE QUANTUM OF ASSESSMENT PASSED UNDER SEC TION 143(3) R/W SECTION 263 OF FAISAL MO HAMMED KAPADI 2 THE INCOME TAX ACT, 1961 (FOR SHORT 'THE ACT') FOR THE ASSESSMENT YEAR 200 4 05, ON THE FOLLOWING GROUNDS: (I) THE LD.CIT(A) ERRED IN LAW IN DELETING THE ADDITION OF RS.L, 79,0001 - SHOWN AS AGRICULTURAL INCOME BY THE ASSESS EE BUT ASSESSED AS INCOME FROM OTHER SOURCES THOUGH THE EVIDENCE OF UNDERSTANDING BETWEEN THE 8 CO - OWNERS THAT THE ENTIRE SALE PROCEEDS WILL BE REMITTED TO THE ASSESSEE WAS NOT PRODUCED BEFORE THE ASSESSING OFFICER AS IS EVIDENT FROM THE ORDER SHEET ENTRY DATED 15/2/2008 AND AS ALSO MENTIONED IN THE ASSESSMENT ORDER. (II) THE LD.CIT(A) ERRED IN LAW IN ACCEPTING THE AMOUNT OFRS.36,40,789/ - INTRODUCED BY THE ASSESSEE IN THE GARB OF LOAN FROM HIS WIFE MRS RANA KAPADI WHEN THE AMOUNT ADMITTEDLY WAS NOT TRANSF ERRED FROM THE BANK ACCOUNT OF HIS WIFE TO THAT OF MIS GLOBE BIO MEDICALS AND WHAT HAS ADMITTEDLY BEEN DONE IS THAT THE ASSESSEE SIMPLY USED THE ACCOUNT OF HIS WIFE AND INTRODUCED THE BALANCE OUTSTANDING IN THE BANK IN THE BOOKS BY SHOWING HER AS A CREDITO R. (III) THE LD.CIT(A) ERRED IN LAW IN NOT APPRECIATING THAT THE AMOUNT OUTSTANDING IN A BANK ACCOUNT IS MADE UP OF VARIOUS INCOMING AND OUTGOING OVER THE ENTIRE PERIOD AND SIMPLY TAKING OVER THE BALANCE OF THE BANK ACCOUNT ON A PARTICULAR DATE WOULD RE SULT IN IGNORING THE CORRESPONDING ENTRIES OF THE DEBIT AND CREDIT ENTRIES IN THE BANK ACCOUNT WHICH WOULD BE FATALLY AGAINST THE PRINCIPLES OF ACCOUNTANCY AND WILL NOT GIVE TRUE PICTURE OF THE ACCOUNTS. IN FACT THIS RESULTS IN MANIPULATION OF OTHER ACCOUN TS AS WELL IN ORDER TO TALLY THE BALANCE SHEET. (IV) IN CONTINUATION OF GROUND NO.(III) THE LD.CIT(A) ERRED IN HOLDING THAT THE FUNDS OF RS.36,40,789/ - WAS ACCUMULATED IN THE SAID BANK ACCOUNT FROM OUT OF REALIZATION BY WAY OF LOAN ADVANCED EARLIER AND T HE BANK ACCOUNT WHICH WAS MERGED WITH THE PROPRIETORY CONCERN, MIS GLOBE BIO MEDICAL REFLECTED TRANSACTIONS PERTAINING TO HIS BUSINESS EVEN WHILE ACCEPTING THAT IT WAS EARLIER THE PERSONAL BANK ACCOUNT OF THE ASSESSEE AND HIS WIFE. NO EXPLANATION OF THE DE POSITS IN THIS ACCOUNT WAS GIVEN. (V) THE LD.CIT(A) ERRED IN PLACING RELIANCE ON THE COPIES OF STATEMENT OF INCOME AND ON THE BALANCE SHEET FILED BY MRS. RANA KAPADI FOR THE EARLIER 5 ASSESSMENT YEARS DURING THE ASSESSMENT PROCEEDINGS WITHOUT VERIFYING T HEM FROM RECORDS AND WITHOUT GIVING AN OPPORTUNITY TO THE A.O TO VERIFY THEM. RULE 46A OF THE INCOME TAX RULES WAS ALSO THUS VIOLATED. (VI) THE LD.CIT(A) ERRED IN ENTERTAINING THE PLEA OF THE ASSESSEE THAT ASKING FOR THE SOURCE OF DEPOSIT IN THE BANK ACC OUNT WOULD AMOUNT TO ASKING THE SOURCE OF THE SOURCE WHEN ACTUALLY THIS AMOUNTS TO ENQUIRING ONLY INTO THE IDENTITY OF THE DEPOSITORS AND GENUINENESS OF THE TRANSACTION. FAISAL MO HAMMED KAPADI 3 (VII) THE LD.CIT(A) ERRED IN DELETING THE ADDITION OFRS.35, 78,000 / - . (VIII) THE APPELLANT CRAVES LEAVE TO AMEND OR TO ALTER ANY GROUND OR ADD A NEW GROUND, WHICH MAY BE NECESSARY. 2 . IN THIS CASE, THE ASSESSEE HAD FILED HIS RETURN OF INCOME ON 1 ST NOVEMBER 2004, AT AN INCOME OF ` 1,58,290. AS AGAINST THIS, THE ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) VIDE ORDER DATED 29 TH SEPTEMBER 2006 AT AN INCOME OF ` 6,42,050. THEREAFTER, SUCH AN ASSESSMENT WAS SET ASIDE BY THE COMMISSIONER UNDER THE REVISIONERY JURISDICTION UNDER SECTION 263, VIDE ORDER DATED 7 TH FEBRUARY 2008. IN PURSUANCE TH EREOF, THE ASSESSMENT WAS COMPLETED AT AN INCOME OF ` 81,75,417. 3 . GROUND NO.1, RELATES TO DELETION OF ADDITION OF ` 1.79 LAKHS WHICH WAS SHOWN UNDER THE HEAD AGRICULTURAL INCOME BY THE ASSESSEE BUT HAS BEEN ASSESSED UNDER THE HEAD INCOME FROM OTHER SOUR CES. 4 . THE ASSESSING OFFICER NOTED THAT THE ASSESSEE HAS SHOWN AN AGRICULTURAL INCOME OF ` 1.79 LAKHS IN THE COMPUTATION OF INCOME WHEREAS, HE IS NOT AN ABSOLUTE OWNER OF THE AGRICULTURAL LAND , BUT ONE OF THE EIGHT CO OWNERS OF THE SAID LAND. THE ASSESSEE , IN RESPONSE TO THE SHOW CAUSE NOTICE, SUBMITTED THAT THE AGRICULTURAL LAND IS IN THE JOINT OWNERSHIP WITH THE OTHER FAMILY MEMBERS NAMELY HIS MOTHER, BROTHER AND SISTERS WHICH HAS BEEN ACQUIRED THROUGH INHERITANCE. IT WAS FURTHER SUBMITTED THAT AS PER TH E MUTUAL UNDERSTANDING AMONGST THE CO OWNERS, THE ASSESSEE WAS ENTITLED TO RECEIVE AND REALIZE THE SALE PROCEEDS OF THE AGRICULTURAL CROP. THE ASSESSING OFFICER FURTHER NOTED THAT THE ASSESSEE HAS NOT PRODUCED ANY DOCUMENTARY EVIDENCE TO SHOW THAT THE CO O WNERS HAVE RELINQUISHED THEIR RIGHT IN FAVOUR OF THE ASSESSEE FOR THE PURPOSE OF REALIZING THE SALE OF AGRICULTURAL PRODUCE. THE ASSESSEE FILED A LETTER FROM MR. V. TARKAR, WHEREIN, IT WAS FAISAL MO HAMMED KAPADI 4 CONFIRMED THAT HE HAS PAID AN AMOUNT OF ` 1.79 LAKHS TO THE ASSESSE E IN RETURN FOR THE MANGO FRUITS GROWN IN THE SAID AGRICULTURAL LAND. THE ASSESSING OFFICER FOUND THAT THE GENUINENESS OF THE SAME LETTER / CONFIRMATION CANNOT BE VERIFIED AND ALSO THE IDENTITY OF THE PERSON. IN THE ABSENCE OF ANY PROPER EVIDENCE, HE TREAT ED THE SAID INCOME ASSESSABLE UNDER THE HEAD INCOME FROM OTHER SOURCES . 5 . BEFORE THE LEARNED COMMISSIONER (APPEALS), THE ASSESSEE SUBMITTED THAT INSOFAR AS THE OWNERSHIP OF THE AGRICULTURAL LAND IS CONCERNED, THE SAME IS NOT IN DISPUTE AND ALSO THE EVIDEN CE OF OWNERSHIP THAT IT BELONG ED TO THE FAMILY MEMBERS OF THE ASSESSEE INCLUDING THE ASSESSEE HIMSELF. THE ASSESSEE HAS FILED A CONFIRMATION OF THE LOCAL DISTRIBUTOR WHO LOOKS AFTER THE MANGO TREES AND HAS PAID ` 1.79 LAKHS TO THE ASSESSEE IN LIEU OF THE M ANGO FRUITS. IT WAS FURTHER SUBMITTED THAT SINCE THE ASSESSEE WAS VISITING THE NATIVE PLACE FREQUENTLY LOOKING AFTER THE AGRICULTURAL PROPERTY AT THE NATIVE PLACE BY HIMSELF, THEREFORE, THERE WAS SOME KIND OF MUTUAL UNDERSTANDING AMONGST THE FAMILY MEMBERS THAT WHATEVER THE PROCEEDS OF AGRICULTURAL INCOME IS REALIZED, THE SAME SHALL BE APPROPRIATED BY THE ASSESSEE AS HE HAS TO DISCHARGE THE RESPONSIBILITY OF HIS FATHER AT THE NATIVE PLACE INCLUDING THE CUSTOMS AND TRADITION OF HIS FAMILY. IT WAS ALSO BROUGH T TO THE NOTICE TO THE LEARNED COMMISSIONER (APPEALS) THAT IN THE EARLIER YEARS, SIMILAR AGRICULTURAL INCOME HAS BEEN ACCEPTED IN THE HANDS OF THE ASSESSEE. THE ASSESSMENT ORDERS FOR THE ASSESSMENT YEAR 2001 02 AND 2005 06 WHICH WERE PASSED UNDER SECTION 1 43(3) WERE ALSO PRODUCED TO SHOW THAT THE REVENUE HAS ACCEPTED THE AGRICULTURAL INCOME. THE LEARNED COMMISSIONER (APPEALS) ACCEPTED THE ASSESSEES CONTENTION AND DIRECT THE ASSESSING OFFICER TO TREATED THE SAID INCOME AS AGRICULTURAL INCOME AS PER THE FI NDINGS GIVEN IN PARA 4.2 WHICH IS REPRODUCED BELOW: FAISAL MO HAMMED KAPADI 5 4.2 I HAVE CAREFULLY CONSIDERED THE REASONS OF THE A.O. TO TREAT THE INCOME SHOWN BY THE APPELLANT AS INCOME FROM OTHER SOURCES AND HAVE ALSO ANALYSED THE SUBMISSIONS OF THE APPELLANT TO TREAT THE SA ID INCOME AS AGRICULTURAL INCOME. I FIND SUBSTANCE IN THE SUBMISSION OF THE APPELLANT TO TREAT THE SAID INCOME AS AGRICULTURAL INCOME AS HE HAS DISCHARGED HIS RESPONSIBILITY IN ESTABLISHING HIS OWNERSHIP ALONG WITH OTHER MEMBERS OF HIS FAMILY BY SUBMITTI NG COPY OF 7 / 12 EXTRACT, HAS ESTABLISHED HIS SOURCE OF INCOME BY SUBMITTING A CONFIRMATION FROM A LOCAL DISTRIBUTOR MR.V.TARKAR FOR REALIZATION OF AGRICULTURAL INCOME AND HAS ALSO SUBMITTED EVIDENCE FOR RELINQUISHMENT OF SHARE OF INCOME BY THE OTHER CO - O WNERS WHO HAVE STATED THAT THEY ARE SITUATED IN MUMBAI, FAR AWAY FROM THE LOCATION OF THE AGRICULTURAL LAND AND THE MAINTENANCE AND OTHER ACTIVATES RELATED TO THE SAID AGRICULTURAL LAND IS BEING DONE BY THE APPELLANT. THE APPELLANT ALONE DISCHARGES ALL TH E SOCIAL FORMALITIES RELATED TO THE CUSTOMS, RELIGIOUS CEREMONIES ETC. OF THE ENTIRE FAMILY I ALSO FIND SUBSTANCE IN THE SUBMISSION OF THE APPELLANT THAT HIS AGRICULTURAL INCOME HAS BEEN ASSESSED AS SUCH IN ALL OTHER ASSESSMENT YEARS EITHER BY WAY OF SCRUT INY ASSESSMENTS U/S 143(3) OR U/S 143(1) OF THE ACT. TO TREAT IT OTHERWISE, THE A.O. WAS REQUIRED TO BRING EVIDENCE ON RECORD THAT HORTICULTURE CROP DID NOT EXIST, OR THAT OTHER CO OWNERS ALSO CLAIM AGRICULTURAL INCOME IN RESPECT OF THE SAME LAND, ETC. THE FACT OF THE MATTER IS THAT NO REASONABLE DOUBT IS CREATED IN RESPECTED OF AGRICULTURAL INCOME, LET ALONE AN EVIDENCE. THEREFORE, ON THE BASIS OF THE FACTS AND CIRCUMSTANCES OF THE CASE, THE A.O. IS DIRECTED TO TREAT THE SAID INCOME AS AGRICULTURAL INCOME. THIS GROUND OF APPEAL IS, THEREFORE, ALLOWED . 6 . BEFORE US, THE LEARNED DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT THE EVIDENCE AND THE EXPLANATION GIVEN BY THE ASSESSEE BEFORE THE ASSESSING OFFICER REMAINS UNCORROBORATED BY ANY INDEPENDENT SET OF EVIDENCE . ONCE THE PROPERTY IS OWNED BY SEVERAL PERSONS, THEN THE NORMAL PRESUMPTION IS THE INCOME DERIVED THEREFROM IS DISTRIBUTED AMONGST THE CO OWNERS. IN ANY CASE, T HE ASSESSEES CONTENTION THAT LOC AL DISTRIBUTOR HAS PAID ` 1.79 LAKHS HAS NOT BEEN PROPERLY SUB STANTIATED BY ANY CORROBORATIVE EVIDENCE. THE LEARNED COMMISSIONER (APPEALS) HAS ACCEPTED THE ASSESSEES CONTENTION WITHOUT ANY COMPLETE MATERIAL ON RECORD. 7 . ON THE OTHER HAND, THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT IN ASSESSEES CASE, THE AGR ICULTURAL INCOME HAS NOT COME FAISAL MO HAMMED KAPADI 6 UP FOR THE FIRST TIME. IN FACT, RIGHT FROM THE ASSESSMENT YEAR 2000 01 TO 2010 11, THE AGRICULTURAL INCOME HAS BEEN ACCEPTED BY THE REVENUE AND SOME OF THE ASSESSMENTS HAVE BEEN COMPLETED UNDER SECTION 143(3). EXCEPT FOR THIS YEAR, NO ADVERSE INFERENCE HAS BEEN DRAWN AND THERE IS NO CHANGE OF ANY FACTS. THE STATUS OF THE INCOME SHOWN FROM THE AGRICULTURE AND THE ASSESSMENTS COMPLETED IN VARIOUS ASSESSMENT YEARS, HAVE BEEN PLACED IN THE PAPER BOOK AT PAGE 1. THUS, ONCE THE AGRIC ULTURAL INCOME FROM SAME LAND HAS BEEN ACCEPTED IN ALL THE YEARS AND IN SOME OF THE YEARS AGRICULTURAL INCOME SHOWN IS FAR MORE THAN THE PRESENT YEAR, THEN IT CANNOT BE SAID THAT IN THIS YEAR, THERE WAS NO AGRICULTURAL INCOME. HE THUS, STRONGLY RELIED UPON THE FINDINGS OF THE LEARNED COMMISSIONER (APPEALS). 8 . WE HAVE HEARD THE RIVAL CONTENTION, PERUSED THE RELEVANT FINDINGS OF THE AUTHORITIES BELOW AND THE MATERIAL AVAILABLE ON RECORD. AS POINTED OUT BY THE LEARNED COUNSEL, IT IS EVIDENT FROM THE RECORD THAT RIGHT FROM THE ASSESSMENT YEAR 2000 01, THE AGRICULTURAL INCOME SHOWN BY THE ASSESSEE FROM SAME AGRICULTURAL LAND HAS BEEN ACCEPTED BY THE REVENUE AND IN SOME OF THE YEAR, THE ASSESSMENT HAS ALSO BEEN COMPLETED UNDER SECTION 143(3). THE LEARNED COUNSEL HA D ALSO FILED THE COPY OF ACKNOWLEDGEMENT OF RETURN OF INCOME AND THE INTIMATION FOR THE ASSESSMENT YEAR 2011 12 WHEREIN ALSO, THE AGRICULTURAL INCOME TO THE TUNE OF ` 5,53,217, HAS BEEN ACCEPTED AND NO NOTICE UNDER SECTION 143(2) HAS BEEN ISSUED. ONCE THAT IS SO, IT CANNOT BE HELD THAT EXCEPT IN THE ASSESSMENT YEAR 2004 05, THE ASSESSEE DID NOT HAD ANY AGRICULTURAL INCOME , WHEREAS IN THE REST OF THE YEARS SUCH AN INCOME WAS GENUINE. WHEN THE SAME FACTS ARE PERMEATING THROUGH ALL THE ASSESSMENT YEARS WHICH H AS BEEN ACCEPTED IN THE EARLIER YEARS AND ALSO IN THE SUBSEQUENT YEARS, THEN THE ADVERSE INFERENCE CANNOT BE DRAWN FOR ONE YEAR IN BETWEEN, UNLESS THERE IS SOME MATERIAL PLACED BY FAISAL MO HAMMED KAPADI 7 THE REVENUE TO PROVE THE CONTRARY. IN THE ABSENCE OF ANY ADVERSE MATERIAL, T HE REASONING GIVEN BY THE LEARNED COMMISSIONER (APPEALS) FOR ACCEPTING THE AGRICULTURAL INCOME CANNOT BE DEVIATED FROM AND THE SAME IS AFFIRMED. GROUND NO.(I), RAISED BY THE REVENUE IS TREATED AS DISMISSED. 9 . IN GROUND NO.(II) TO (VII), THE REVENUE HAS CHAL LENGED THE DELETION OF ` 26,40,789 AND ` 35,78,000 ON ACCOUNT OF UNEXPLAINED CREDIT IN THE ACCOUNT OF THE ASSESSEE. 10 . THE ASSESSING OFFICER NOTED THAT HE ASSESSEE HAS INTRODUCED CAPITAL FOR ` 42,89,289 IN HIS PROPRIETORSHIP CONCERN M/S. GLOBE BIOMEDICALS, W HICH IS MAINLY ENGAGED IN THE BUSINESS OF IMPORT AND DISTRIBUTION OF SURGICAL PRODUC TS IN DOMESTIC MARKET. IN RESPONSE TO THE SHOW CAUSE NOTICE TO EXPLAIN THE SOURCE OF CAPITAL INTRODUCED, THE ASSESSEE GAVE FOLLOWING BREAK UP: MRS. RANA KAPADI (WIFE) RS. 36,40,789 AGRICULTURAL INCOME RS.1,79,000 CASH (OUT OF OPENING BALANCE) RS.4,64,500 REFUND FROM KRISHNA HOLIDAYS & HOTELS RS.5,000 11 . THE ASSESSEE ALSO FILED CONFIRMATION OF L O ND RECEIVED FROM M R S. RANA KAPADI, WHO IS THE WIFE OF THE ASSESSEE. IT WAS EXP LAINED THAT THE ASSESSEE ALONG WITH HIS WIFE WAS HOLDING A JOINT ACCOUNT IN BANK OF BARODA, WHICH LATER ON, MERGED WITH THE ACCOUNT OF THE ASSESSEES PROPRIETORSHIP CONCERN. THE OPENING BALANCE OF ` 36,40,789 BELONGING TO THE ASSESSEES WIFE BEC A ME PART OF THE ASSESSEES ACCOUNT. TO SUBSTANTIATE THE SOURCE OF THE SAID AMOUNT BELONGING TO HIS WIFE, THE ASSESSEE SUBMITTED STATEMENT OF AFFAIRS RIGHT FROM 31 ST MARCH 1998 TO 31 ST MARCH 2003. THE ASSESSING OFFICER HELD THAT SUCH A STATEMENT OF FAISAL MO HAMMED KAPADI 8 AFFAIRS IS AN AFTER THOUGHT. FROM THE SAID STATEMENT OF AFFAIRS, HE DREW FOLLOWING CONCLUSIONS: I) IN THE FINANCIAL YEAR ENDED 31 ST MARCH 1999, THE ASS HAS SHOWN A CAPITAL GAIN OF RS. 23,11,828 EARNED BY MRS. RANA KAPADI. THE ASS HAS NOT GIVEN ANY DOCUMENTARY EVIDENCE TO PROVE THAT THIS HAS BEEN RECEIVED THROUGH GENUINE SOURCES. II) IT IS SEEN THAT THE ASSESSEE HAS DURING THE FINANCIAL YEAR ENDED 31.03.2003, LIQUIDATED A MAJOR PART OF HER INVESTMENT TO BRING IN THE CASH BALANCE IN BANK OF BARODA AT RS. 36,40,789. HERE AGA IN THE ASSESSEE HAS NOT GIVEN ANY DEFAULTS AS REGARDS THE INVESTMENT SOLD IN ORDER TO RECEIVE THIS INCOME. THE COMPUTATION OF INCOME FILED ALONGWITH THE RETURN OF INCOME FOR A.Y. 2003 - 04 FILED BY MRS. RANA KAPADI ALSO HAVE NOT SHOWN ANY RETURN ON THESE IN VESTMENTS SOLD DURING THE YEAR. THE BANK ACCOUNTS FOR THE EARLIER I.E., FOR THE YEAR ENDING 31.3.2003, IS ALSO NOT MADE AVAILABLE TO PROVE THE ASSESSEES POINT THAT THE CASH CREDITS IN THE BANK HAVE ARISEN OUT OF SALE OF INVESTMENTS. 12 . HE FURTHER NOTED THA T THE ASSESSEE HAS INTRODUCED CASH OF ` 37,78,000 IN THE BANK ACCOUNT WITH BANK OF BARODA DURING THE RELEVANT FINANCIAL YEAR FOR WHICH THE ASSESSEE ALSO COULD NOT GIVE ANY SATISFACTORY EXPLANATION. THUS, HE TREATED THE OPENING BALANCE OF ` 36,40,789, WHICH ACCORDING TO THE ASSESSEE, WAS RECEIVED FROM HIS WIFE AND THE AGGREGATE CASH DEPOSITS MADE DURING THE YEAR AT ` 35,78,000, AS UNEXPLAINED CASH CREDIT. AFTER ADDING THE SAME AMOUNT, THE ASSESSING OFFICER RELIED UPON THE DECISION S OF THE HON'BLE SUPREME COU RT IN HON'BLE SUPREME COURT IN SUMATI DAYAL V/S CIT, [1995 ] 264 ITR 801 (SC) AND CIT V/S DURGA PRASAD MORE, [1071] 82 ITR 540 (SC) . 13 . BEFORE THE LEARNED COMMISSIONER (APPEALS), THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE ASSESSING OFFICER AND SU BMITTED THAT INSOFAR AS THE LOAN FROM WIFE IS CONCERNED, THE ASSESSEE HAS NOT ONLY PROVED THE IDENTITY AND GENUINENESS OF THE TRANSACTION BUT FAISAL MO HAMMED KAPADI 9 ALSO THE CREDITWORTHINESS. THE SAID MONEY BELONG TO M R S. RANA KAPADI WHICH IS EVIDENT FROM THE COPY OF THE BALANCE SHEET AND STATEMENT OF INCOME FILED FOR EARLIER FIVE ASSESSMENT YEARS IN HER CASE . IN THE IMMEDIATELY PRECEDING ASSESSMENT YEAR, SUCH AN AMOUNT WAS DULY REFLECTED IN HER BALANCE SHEET. MOREOVER, THE SAID MONEY WAS LYING IN THE BANK ACCOUNT ITSELF WHICH HA S BEEN TAKEN OVER BY THE ASSESSEE IN HIS PROPRIETORSHIP CONCERN AND, THEREFORE, THE SOURCE OF SUCH AN AMOUNT CANNOT BE DOUBTED. AS REGARDS THE CASH DEPOSITS MADE BY THE ASSESSEE IN HIS BANK ACCOUNT, IT WAS SUBMITTED THAT FIRSTLY, THE SAID ASSESSMENT HAS BE EN PASSED IN PURSUANCE OF THE DIRECTION GIVEN UNDER SECTION 263 BY THE COMMISSIONER AND IN SUCH A ORDER THERE WAS NO SUCH DIRECTION ABOUT EXAMINING THE CASH DEPOSITS MADE IN THE BANK ACCOUNT. THE ONLY REFERENCE WAS MADE TO CASH DEPOSIT OF ` 4,64,500 IN THE ACCOUNT OF ASSESSEES PROPRIETORSHIP CONCERN GLOBE BIOMEDICALS. BESIDES THIS, THE CASH AVAILABLE BY WAY OF SALES AND WITHDRAWALS MADE FROM VARIOUS BANK ACCOUNTS WERE ALSO GIVEN TO PROVE THE SOURCE OF THE DEPOSITS MADE IN THE BANK ACCOUNT. THE LEARNED COMM ISSIONER (APPEALS) DELETED THE SAID ADDITION AFTER OBSERVING AND HOLDING AS UNDER: I HAVE CAREFULLY GONE THOROUGH THE REASONS OF THE A.O. TO MAKE THE SAID ADDITION AND ALSO THE SUBMISSION OF THE APPELLANT. THOUGH THE LD. CIT HAD NOT DIRECTED THE ASSESS ING OFFICER TO VERIFY DEPOSITS IN HIS BANK ACCOUNT, I AM CONVINCED THAT THE TRANSACTIONS OF THE SAID ACCOUNT WERE ACCOUNTED FOR IN THE BOOKS OF ACCOUNT OF THE APPELLANTS PROPRIETARY CONCERN REFLECTING THE CLOSING BALANCE OF THE SAID ACCOUNT IN ITS ANNUAL ACCOUNTS. SINCE THE TRANSACTIONS WERE INCLUDED IN THE ANNUAL ACCOUNTS AND THE SAME WERE RECORDED IN THEIR BOOKS OF ACCOUNT. I FIND FORCE IN THE ARGUMENT OF THE AR THAT THE CASH DEPOSITS OF THE AGGREGATE AMOUNT OF ` 35,78,000 WERE UNDISPUTEDLY ACCOUNTED HAV ING CORRESPONDING SOURCE. SO, WHEN THESE ACTS OF RECORDING OF THE TRANSACTIONS OF DEPOSITS IN THE BOOKS OF ACCOUNT ARE NOT DISPUTED, NO ADDITION CAN BE MADE. I ALSO FIND SUBSTANCE IN THE ARGUMENT OF THE A.R. THAT THE APPELLANT HAD DEPOSITED CASH OF ` 4,64, 500 IN HIS CAPITAL ACCOUNT FROM OUT OF CASH BALANCE OF ` 6,56,297 IN HIS OPENING PERSONAL BALANCE SHEET. I THEREFORE, FIND THAT THE APPELLANT HAS SUFFICIENTLY DISCHARGED HIS RESPONSIBILITY OF ESTABLISHING THE SOURCE OF THE SAID FAISAL MO HAMMED KAPADI 10 AMOUNT OF ` 4,64,500 INTRODU CED IN HIS CAPITAL ACCOUNT. I, THEREFORE, DIRECT THE ASSESSING OFFICER TO DELETE THE SAID ADDITION OF ` 35,78,000. THIS GROUND IS, THEREFORE, ALLOWED. 14 . BEFORE US, THE LEARNED DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT THE ASSESSEE COULD NOT PROVE THE EXAC T SOURCE OF MONEY AVAILABLE WITH THE ASSESSEES WIFE AS THE ASSESSING OFFICER HAD BROUGHT OUT THAT ONE OF THE MAIN SOURCE OF HER MONEY WAS ON ACCOUNT OF CAPITAL GAIN OF ` 23,11,828 FOR WHICH NO DOCUMENTARY EVIDENCE WAS FILED AND THE BANK ACCOUNT FOR THE EA RLIER YEARS HAVE ALSO NOT BEEN MADE AVAILABLE TO PROVE THE ASSESSEES CONTENTION. THE BASIC INGREDIENTS OF PROVING A CASH CREDIT AS ENVISAGED IN SECTION 68 HAS NOT BEEN FULFILLED BY THE ASSESSEE. THE FINDINGS OF THE LEARNED COMMISSIONER (APPEALS) ARE WITHO UT REBUTTING THE FINDINGS OF THE ASSESSING OFFICER. HE THUS STRONGLY RELIED UPON THE CONCLUSION DRAWN BY THE ASSESSING OFFICER ON THIS SCORE. REGARDING CASH DEPOSITS ON VARIOUS D ATES IN THE BANK ACCOUNT, HE SUBMITTED THAT THE ASSESSEE HAS TO SHOW THE AVAIL ABILITY OF CASH ON THE DATE OF DEPOSIT AND NOT THE OVER ALL AGGREGATE CASH AVAILABLE FOR THE ENTIRE YEAR. THE NEXUS HAS TO BE SHOWN BY THE ASSESSEE WHICH HAS NOT BEEN DONE. THE ASSESSEES EXPLANATION WITHOUT ANY CORROBORATED EVIDENCE CANNOT BE ACCEPTED. TH EREFORE, THE ADDITION MADE BY THE ASSESSING OFFICER IS FULLY JUSTIFIED. 15 . ON THE OTHER HAND, THE LEARNED COUNSEL SUBMITTED THAT IN THE STATEMENT OF AFFAIRS AND BALANCE SHEET OF THE ASSESSEES WIFE, AN AMOUNT OF ` 29,29,289, HAS BEEN SHOWN AS LOAN GIVEN TO T HE ASSESSEE. BESIDES THIS, SHE HAD OTHER AVAILABLE FUNDS IN THE EARLIER YEARS IN THE FORM OF BANK BALANCE WHICH WERE REFLECTED IN THE BANK ACCOUNT. ALL THESE DETAILS HAVE BEEN FURNISHED IN THE RETURN OF INCOME FILED FOR THE EARLIER YEARS. IN THE PRESENT CA SE, THIS AMOUNT IS REFLECTED IN HER BANK ACCOUNT ONLY WHICH HAS BEEN TAKEN OVER BY THE ASSESSEE AND THE SAID FAISAL MO HAMMED KAPADI 11 AMOUNT HAS BEEN TREATED AS LOAN IN THE BOOKS OF THE ASSESSEE. IN THIS CASE, NEITHER IDENTITY NOR THE GENUINENESS OF THE TRANSACTION CAN BE DOUBTED. EVEN THE SOURCE STANDS EXPLAINED FROM HER INCOME TAX RECORDS. IN SUPPORT OF HIS CONTENTION, HE REFERRED TO THE STATEMENT OF AFFAIRS, COMPUTATION OF INCOME FILED ALONG WITH THE RETURN OF INCOME AND THE ACKNOWLEDGEMENT OF THE RETURN OF INCOME. AS REGARDS CA SH DEPOSITS, HE SUBMITTED THAT THE ASSESSEE HAS MADE CASH SALES FOR ` 33,64,400 DURING THE YEAR WHICH HAS BEEN DEPOSITED FROM TIME TO TIME IN THE SAID BANK ACCOUNT. BESIDES THIS, THERE HAVE BEEN CASH WITHDRAWALS FROM VARIOUS BANK ACCOUNTS TO THE TUNE OF ` 40,79,550. THIS FIGURE IS ALSO REFLECTED IN THE BOOKS OF ACCOUNT. ONCE THERE IS HUGE CASH AVAILABLE, THEN THE DEPOSIT OF SUCH CASH IN THE BANK ACCOUNT WHICH WAS BELONGING TO THE PROPRIETARY BUSINESS OF THE ASSESSEE CANNOT BE HELD TO BE UNEXPLAINED OR NON G ENUINE. IN SUPPORT OF HIS CONTENTION, HE DREW OUR ATTENTION TO THE CASH SUMMARY AND ALSO THE COPY OF BANK STATEMENT. THUS, NO ADDITION IS CALLED FOR AND THE FINDINGS GIVEN BY THE LEARNED COMMISSIONER (APPEALS) SHOULD BE UPHELD. 16 . WE HAVE HEARD THE RIVAL CON TENTION, PERUSED THE RELEVANT FINDINGS OF THE AUTHORITIES BELOW AND THE MATERIAL AVAILABLE ON RECORD. THE ASSESSING OFFICER HAS MADE THE ADDITION ON ACCOUNT OF OPENING BALANCE IN THE BANK ACCOUNT WITH BANK OF BARODA FOR SUM OF ` 36,40,789 AND CASH DEPOSITS MADE DURING THE YEAR IN THE SAID BANK ACCOUNT AGGREGATING TO ` 35,78,000. REGARDING THE OPENING BALANCE, THE ASSESSEES CONTENTION HAS BEEN THAT THE SAID AMOUNT BELONGS TO HIS WIFE AS THE SAID BANK ACCOUNT BELONGS TO THE ASSESSEES WIFE M R S. RANA KAPADI, WHEREIN THE ASSESSEE WAS A JOINT ACCOUNT HOLDER. THE SAID BANK ACCOUNT HAS BEEN TAKEN OVER BY THE ASSESSEE AS A PROPRIETOR OF HIS BUSINESS CONCERN GLOBE BIOMEDICALS. FOR PROVING THE SOURCE O F SUCH AMOUNT, STATEMENT OF AFFAIRS AND INCOME RECORDS OF THE ASSE SSEES WIFE FAISAL MO HAMMED KAPADI 12 HAVE BEEN PRODUCED BEFORE THE AUTHORITIES BELOW AND ALSO BEFORE US. ON A PERUSAL OF SUCH RECORDS, IT IS SEEN THAT THE ASSESSEES WIFE HAS BEEN REGULARLY ASSESSED TO TAX AND I N HER STATEMENT OF AFFAIRS AS ON 31 ST MARCH 2004, SHE HAD SHOWN LOAN G IVEN TO THE ASSESSEE TO THE TUNE OF ` 29,29,289 WHICH IS APPEARING ON THE ASSET SIDE. THE AVAILABILITY OF FUNDS IN HER CAPITAL ACCOUNT IS C O M ING FROM LAST SEVERAL YEARS, WHICH IS EVIDENT FROM THE STATEMENT OF AFFAIRS AVAILABLE ON THE RECORD. ONCE M R S. RANA KAPADI, IS HAVING SUFFICIENT FUNDS WHICH HAVE BEEN DISCLOSED IN HER INCOME TAX RECORDS, THEN INSOFAR AS THE ASSESSEE IS CONCERNED, THE ONUS STANDS DISCHARGED THAT SHE HAD THE CREDITWORTHINESS OF ADVANCING THE LOAN. IN THE PRESENT CASE, THE MONEY WAS LYING IN HER BANK ACCOUNT WHICH WAS DULY SHOWN BY HER. THE SAID MONEY ITSELF HAD BEEN TAKEN OVER BY THE ASSESSEE. IN SUCH A SITUATION, NOT ONLY THE IDENTITY AND GENUINENESS OF THE TRANSACTIONS STANDS PROVED BUT ALSO THE CREDITWORTHINESS . ONCE T HE ASSESSEES EXP LANATION ABOUT THE NATURE AND SOURCE OF THE AMOUNT CREDITED IN HIS ACCOUNT HAS BEEN, PRIMA FACIE, PROVED, THEN THE ONUS SHIFTS UPON THE ASSESSING OFFICER TO SHOW THAT SUCH AN EXPLANATION IS NOT CORRECT. THIS HAS TO BE DONE BY BRINGING SOME COGENT MATERIAL ON RECORD TO DISAPPROVE THE ASSESSEES EVIDENCE AND EXPLANATION. IN THIS CASE, NOTHING HAS BEEN BROUGHT ON RECORD TO SHOW THAT THE AMOUNT WHICH BELONGS TO THE ASSESSEES WIFE WHICH WAS THAT TO BE LYING IN HER BANK ACCOUNT , ACTUALLY BELONGS TO THE ASSESSEE. THUS, ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE FINDINGS GIVEN BY THE LEARNED COMMISSIONER (APPEALS) CANNOT BE DEVIATED FROM AND HENCE, THE SAME ARE AFFIRMED. ACCORDINGLY, THE ADDITION OF ` 36,40,789, AS DELETED BY THE LEARNED COMMISSIONER (APPEALS) IS HEREBY UPHELD. 17 . AS REGARDS THE ADDITION MADE ON ACCOUNT OF AGGREGATE CASH DEPOSITS IN THE BANK ACCOUNT, IT IS SEEN FROM THE AVAILABILITY OF CASH IN ASSESSEES BOOKS OF ACCOUNT THAT THE ASSESSEE HAS MADE CASH SALES OF ` FAISAL MO HAMMED KAPADI 13 33,64,400 DURING THE YEAR. BESIDE S THIS, THE ASSESSEE HAS SHOWN CASH WITHDRAWALS FROM VARIOUS BANK ACCOUNTS TO THE TUNE OF ` 40,79,550. IF THERE IS AN AVAILABILITY OF CASH TO THE ASSESSEE IN HIS BOOKS OF ACCOUNT, THEN THE PRESUMPTION IS THAT , SUCH A CASH WHICH HAS BEEN DEPOSITED IN THE BA NK ACCOUNT IS FROM THE SAID SOURCE ONLY UNLESS SOMETHING IS BROUGHT ON RECORD BY THE ASSESSING OFFICER TO PROVE IT CONTRARY. THE INITIAL ONUS OF THE ASSESSEE TO PROVE THE SOURCE OF THE CASH DEPOSITS IN HIS BANK ACCOUNT STANDS DISCHARGED AND THE SAME HAS NO T BEEN REBUTTED BY THE ASSESSING OFFICER BY ANY CONCRETE EVIDENCE OR ADVERSE MATERIAL. ONCE THE TRANSACTION OF CASH AS RECORDED IN THE BOOKS OF ACCOUNT HAS NOT BEEN DISPUTED, THEN THE SAME CASH WHICH HAS BEEN DEPOSITED FROM TIME TO TIME IN THE BANK ACCOUN T FOR SUMS AGGREGATING TO ` 35.78 LAKHS, CANNOT BE TREATED AS UNEXPLAINED OR FROM UNDISCLOSED SOURCES. ACCORDINGLY, THE CONCLUSION DRAWN BY THE LEARNED COMMISSIONER (APPEALS), AS REPRODUCED ABOVE, IS HEREBY AFFIRMED. 18 . 18. IN THE RESULT, REVENUES APPEAL IS TREATED AS DISMISSED. 24 TH JANUARY 2014 ORDER PRONOUNCED IN THE OPEN COURT ON 24 TH JANUARY 2014 SD/ - . . R.C. SHARMA ACCOUNTANT MEMBER SD/ - AMIT SHUKLA JUDICIAL MEMBER MUMBAI, DATED : 24 TH JANUARY 2014 FAISAL MO HAMMED KAPADI 14 / COPY OF THE ORDER FORWARDED TO : ( 1 ) / THE ASSESSEE ; ( 2 ) / THE REVENUE; ( 3 ) ( ) / THE CIT(A ) ; ( 4 ) / THE CIT, MUMBAI CITY CONCERNED ; ( 5 ) , , / THE DR, ITAT, MUMBAI ; ( 6 ) / GUARD FILE . / TRUE COPY / BY ORDER . / PRADEEP J. CHOWDHURY / SR. PRI VATE SECRETARY / / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI