HARSHA PRAVIN SHAH, THANE V. ITO (HQ) (CIB), PUNE

ITA 348/MUM/2009

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 7910 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 2 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-03-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: H
• Next Hearing Date: 21-03-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 15-01-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SATBIR SINGH
• Assessee Lawyers: N M PORWAL
• Keywords: Unexplained cash credit; Unexplained investment
• Section: 142(1); 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES, H, MUMBAI BEFORE SHRI S V MEHROTRA, ACCOUNTANT MEMBER AND SHRI VIJAY PAL RAO, JUDICIAL MEMBER ITA NO.348/MUM/2009 (ASSESSMENT YEAR 2005-06) SMT.HARSHA PRAVIN SHAH C/O 201, SHAMBHAVNATH BUILDING, NEAR JAIN TEMPLE, VIRAR (W), THANE PAN:AADPS8397R APPELLANT VS INCOME TAX OFFICER, HEAD QUARTER (CIB) PUNE, .. RESPONDENT APPELLANT BY : SHRI N M PORWAL RESPONDENT BY : SHRI SATBIR SINGH O R D E R PER VIJAY PAL RAO,JM THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER DATED 10.11.2008 OF CIT(A) FOR THE ASSESSMEN T YEAR 2005-06. 2. THE ASSESSEE HAS RAISED VARIOUS GROUNDS IN THIS APPEAL, HOWEVER, THE ONLY ISSUE ARISES FOR OUR CONSIDERATIO N AND ADJUDICATION IS WHETHER IN THE FACTS AND CIRCUMSTAN CES OF THE CASE, THE CIT(A) IS JUSTIFIED IN CONFIRMING TOTAL OF THE CREDIT ITA NO.348/MUM/2009 (ASSESSMENT YEAR 2005-06) 2 SIDE OF THE BANK ACCOUNT OF THE ASSESSEE AT RS.25,7 8,000/- AS UNEXPLAINED CREDIT. 3.1 FACTS AS RECORDED BY THE CIT(A) ARE THAT THE AS SESSEE DURING THE COURSE OF BUSINESS HAS GIVEN CHEQUES TO VARIOUS PARTIES AGAINST WHICH THE ASESEEE HAS RECEIVED TEXT ILE GOODS/FABRICS WHICH THE ASSESSEE HAS DISPOSED OFF O N CASH BASIS TO VARIOUS PARTIES. THE AO HAS FOUND THAT T HE ASSESSEE HAD MADE DEPOSITS IN CASH IN SAVING BANK ACCOUNT A MOUNTING TO RS.25,78,000/- DURING THE YEAR UNDER CONSIDERAT ION. THE AO ISSUED NOTICE U/S 142(1), BUT THE ASSESSEE DID N OT RESPOND TO THE NOTICE. ACCORDINGLY, THE AO COMPLETED THE ASSESSMENT U/S 144 BY DETERMINING THE CASH DEPOSITS OF RS.25, 78,000/- AS UNEXPLAINED DEPOSITS AND BROUGHT TO TAX. 3.2 ON APPEAL, THE ASSESSEE CONTENDED BEFORE THE C IT(A) THAT AS PER THE PRACTICE OF ASSESSEES BUSINESS SH E EITHER RECEIVES ADVANCE PAYMENT IN CASH OR BY TRANSFER ENT RY IN HER BANK ACCOUNT. AGAINST WHICH SHE MAKES PAYMENT TO TH E SUPPLIERS OF FABRICS/TEXTILE GOODS. THE PROFIT DER IVED WHICH IS HARDLY 1 PER CENT TO 1.5 PER CENT OF THE TRANSACTI ON, THE ASSESSEE RECEIVES IN CASH. THUS, THE ASSESSEES SA ME MONEY WHICH IS ROTATED THROUGHOUT THE ASSESSMENT YEAR IN DOING TOTAL TURNOVER OF RS.25,78,000/- IT WAS FURTHER CONTEND ED BEFORE ITA NO.348/MUM/2009 (ASSESSMENT YEAR 2005-06) 3 THE CIT(A) THAT THIS IS NOT A CASE OF UNEXPLAINED INVESTMENT BECAUSE THE ASSESSEE HAS NOT MADE ANY INVESTMENT D URING THE YEAR. THE ASSESSEE IS A TRADER IN FABRICS AND TEXTILE GOODS, THEREFORE, AT THE MOST THESE CREDIT TRANSACT IONS ON CREDIT SIDE OF THE BANK ACCOUNT MAY BE TREATED AS C ASH CREDIT AND NOT THE TOTAL AMOUNT DEPOSITED IN HER BANK ACCO UNT. THE ASSESSEE FURTHER CONTENDED THAT SHE HAS HIGHEST CR EDIT BALANCE IN THE BANK ACCOUNT IS RS.1,00,806/- DURIN G THE ENTIRE PERIOD FROM 1.4.2004 TO 31.3.2005. THE CIT(A) DI D NOT ACCEPT THE CONTENT OF THE ASSESSEE AND CONFIRMED THE ADDITION MADE BY THE AO. 3.3 BEFORE US, THE LEARNED AR OF THE ASSESSEE HAS R EITERATED THE CONTENTIONS AS MADE BEFORE THE CIT(A). HE HAS SUBMITTED THAT SINCE THE ASSESSMENT ORDER IS PASSED EX-PARTE AND THE CIT(A) HAS NOT TAKEN INTO ACCOUNT THE RELEVANT MA TERIAL TO BE SUBMITTED BY THE ASSESSEE, THEREFORE, IN THE INTER EST OF JUSTICE, THE ASSESSEE MAY BE GIVEN ONE MORE OPPORTU NITY OF BEING HEARD AND TO PRODUCE ALL THE RELEVANT DOCUMEN TS AND EVIDENCE BEFORE THE ASSESSING AUTHORITY AND THE MAT TER MAY BE REMITTED TO THE FILE OF THE AO FOR EXAMINATION A ND VERIFICATION OF THE RELEVANT RECORD AND THEN DECIDE THE CASE AS PER LAW. ITA NO.348/MUM/2009 (ASSESSMENT YEAR 2005-06) 4 3.4 ON THE OTHER HAND, THE LEARNED DR VEHEMENTLY OP POSED THE PRAYER OF THE ASSESSEE AND SUBMITTED THAT DESP ITE SUFFICIENT OPPORTUNITIES THE ASSESSEE DID NOT FURN ISH ANY MATERIAL OR EVIDENCE BEFORE THE AO OR BEFORE THE C IT(A) WELL IN TIME TO PROVE HER CASE AND ONLY ON 11.11.2008, THE ASSESSEE WANED TO PRODUCE THE SAME. HE HAS RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW. 3.5 WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND RE LEVANT RECORD. WE FIND THAT THE ASSESSMENT WAS FRAMED BY T HE AO ON THE BASIS OF ANNUAL INFORMATION RETURN FURNISHED U/ S 285BA OF THE ACT. THE AO ISSUED NOTICE U/S 142(1) BUT NO R ESPONSE WAS MADE BY THE ASSESSEE. ACCORDINGLY, THE AO HAS PASSED EX-PARTE ASSESSMENT ORDER U/S 144 OF THE ACT. BEFO RE, THE CIT(A) THE ASSESSEE PRAYED FOR ADMISSION OF THE ADD ITIONAL EVIDENCE IN THE SHAPE OF BILLS AND VOUCHERS AND OTH ER DETAILS HOWEVER, THE CIT(A) HAS REFUSED TO ACCEPT THE ADD ITIONAL EVIDENCE. HE HAS CONFIRMED THE ORDER OF THE AO. AT THE OUTSET, WE NOTE THAT THE CIT(A) HAS RECORDED IN TH E IMPUGNED ORDER THAT ON 11.11.2008 THE LD. AR OF THE ASSESSEE DURING THE COURSE OF HEARING EXPRESSED THE INABILITY OF THE ASSESSEE TO PRODUCE DETAILS, WHEREAS THE IMPUGNED ORDER HAS BEE N PASSED ON 10.11.2008. THERE IS A APPARENT DISCREPANCY BET WEEN THE DATES OF THE ORDER AND THE DATE OF HEARING. EVEN W ITHOUT GOING ITA NO.348/MUM/2009 (ASSESSMENT YEAR 2005-06) 5 INTO THE ISSUE OF THE DATE OF THE ORDER WHEN THE AS SESSMENT ORDER IS PASSED EX-PARTE WITHOUT TAKING INTO CONSID ERATION THE EXPLANATION AND THE RELEVANT EVIDENCE THEN IN THE I NTEREST OF JUSTICE, THE ASSESSEE IS GRANTED ONE MORE OPPORTUNI TY TO FURNISH ALL THE RELEVANT DETAILS AS WELL AS THE EVI DENCE IN SUPPORT OF ITS CLAIM. ACCORDINGLY, WE SET ASIDE TH E ORDERS OF THE LOWER AUTHORITIES AND REMAND THE MATTER TO THE RECORD OF THE AO TO PASS THE FRESH ORDER AFTER VERIFICATION A ND EXAMINATION OF THE RECORD AND DOCUMENTS TO BE PRODU CED BY THE ASSESSEE. 4. IN THE RESULT, ALL THE APPEAL FILED BY THE ASSES SEE IS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 25TH MAR ,2011 SD SD (S V MEHROTRA ) (VIJAY PAL RAO) ACCOUNTANT MEMBER JUDICIAL M EMBER MUMBAI, DATED 25 TH MAR 2011 SRL:23311 COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT CONCERNED 4. CIT(A) CONCERNED 5. DR CONCERNED BENCH BY ORDER TRUE COPY ASSTT. REGISTRAR, ITAT, MUMBAI