SHIVKARAN B GUSAIWAL, MUMBAI V. ITO 15(2)(4), MUMBAI

ITA 3587/MUM/2013

• Counselvise Citation: 358719914 RSA 2013
• Duration Of Justice: 1 year(s) 9 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-02-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: E
• Assessment Year: 2008-2009
• Appeal Filed On: 07-05-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: NEIL PHILIP
• Keywords: Peak credit
• Section: 68

Judgement Text

, INCOME TAX APPELLATE TRIBUNAL,MUMBAI - E BENCH , !' , ! BEFORE S/SH.JOGINDER SINGH, JUDICIAL MEM BER & RAJENDRA,ACCOUNTANT MEMBER /. ITA NO.3587/MUM/2013, # # # # $ $ $ $ / ASSESSMENT YEAR-2008-09 SHIVKARAN B. GUSAIWAL, 28,ADARSH NAGAR NO.2, SHELL COLONY,CHEMBUR,MUMBAI-71 PAN: AIWPG2899P # VS. ITO 15(2)(4), MATRU MANDIR, 1ST FLOOR, TARDEO, MUMBAI-400007 ( %& / APPELLANT) ( '(%& / RESPONDENT) #)* #)* #)* #)* + + + + ! !! ! / ASSESSEE BY : SHRI SHEKHAR GUPTA , + ! / REVENUE BY : SHRI NEIL PHILIP # # # # , ,, , *- *- *- *- / DATE OF HEARING : 11 -02-2015 .$ , *- / DATE OF PRONOUNCEMENT : 11 -02-2015 # # # # , 1961 , ,, , 254(1) ! !! ! ** ** ** ** !/ !/ !/ !/ ORDER U/S.254(1)OF THE INCOME-TAX ACT,1961(ACT) PER RAJENDRA, A.M. ! !' ! # : CHALLENGING THE ORDER DATED 08.02.2013 OF THE CIT(A )-26, MUMBAI, THE ASSESSEE HAS FILED FOLLOWING GROUNDS OF APPEAL: 1.THE LEARNED CIT(APPEALS)HAS ERRED IN LAW AND ON T HE FACTS OF THE CASE IN SUSTAINING THE ADDITION OF RS.14,26,280/-U/.68 OF THE INCOME TAX ACT. 2.THE ASSESSEE CRAVES LEAVE TO ADD,ALTER OR AMEND T HE ABOVE GROUNDS OF THE APPEAL. 2. ASSESSEE,AN INDIVIDUAL, FILED HIS RETURN OF INCOME ON 29.01.2009 DECLARING TOTAL INCOME OF RS. 1, 18,171/-.INITIALLY IT WAS PROCESSED U/S.143(1) OF T HE ACT.SUBSEQUENTLY,IT WAS SELECTED FOR SCRUTINY UNDER CASS FOR VERIFICATION OF SOURCES OF CASH DEPO SIT OF RS.14,26,280/- IN HIS BANK ACCOUNT MAINTAINED WITH IDBI BANK LTD.,CHEMBUR BRANCH,MUMBA I.DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER (AO) ASKED THE A SSESSEE TO SUBMIT EXPLANATION REGARDING SOURCES OF CASH DEPOSITS. THE ASSESSEE DID NOT APPE AR BEFORE THE AO WHO GAVE FINAL OPPORTUNITY OF HEARING TO THE ASSESSEE,VIDE HIS SHOW CAUSE LETTER DATED 09.11.2010. ON 18.11.2010 THE ASSESSEE AGAIN DID NOT APPEAR BEFORE THE AO NOR DID DEPUTE A NY OF HIS AUTHORISED REPRESENTATIVE(AR) TO ATTEND HEARING.AS PER THE AO,THE ASSESSEE SUBMITTED A SINGLE PAGE LETTER IN THE TAPAL STATING THAT CASH DEPOSITED IN HIS SAVINGS BANK ACCOUNT BELONGED TO SOME PERSONS WHO DID BUSINESS FROM OUT OF MUMBAI AND WOULD DEPOSIT CASH IN HIS BANK ACCOUN T, THAT THOSE PEOPLES GAVE INSTRUCTION TO HIM TO WITHDRAW THE CASH IN MUMBAI AND PAY TO THE P ARTIES ON THEIR BEHALF.AFTER CONSIDERING THE EXPLANATION OF THE ASSESSEE,THE AO HELD THAT HE HAD NOT PRODUCED ANY PROOF IN SUPPORT OF THE CLAIM,THAT THE ASSESSEE HAD NOT SHOWN THE BANK ACCO UNT UNDER CONSIDERATION IN THE BALANCE-SHEET, THAT CASH DEPOSITED OF RS. 14.26 LAKHS IN THE IDBI BANK WAS OUT OF UNEXPLAINED AND UNDISCLOSED SOURCE OF INCOME.FINALLY,HE ADDED THE SAID AMOUNT T O THE TOTAL INCOME OF THE ASSESSEE U/S. 68 OF THE ACT. 3. AGGRIEVED BY THE ORDER OF THE AO, THE ASSESSEE PREF ERRED AN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY(FAA).BEFORE HIM IT WAS STATED THAT CASH D EPOSITS AS WELL AS THE WITHDRAWALS WERE RELATED TO FOOTWEAR BUSINESS OF THE ASSESSEE,THAT T HE PEAK DEPOSIT AT ANY TIME DID NOT GO BEYOND RS.1.33 LAKHS,THAT THE WITHDRAWALS WERE NOT USED FO R ANY INVESTMENT.AFTER CONSIDERING THE SUBMISSION OF THE ASSESSEE AND THE ASSESSMENT ORDER , THE FAA HELD THAT THE ASSESSEE HAD NOT BEEN ABLE TO EXPLAIN THE SOURCES OF CASH DEPOSITS IN HIS BANK ACCOUNT BY ANY DOCUMENTARY EVIDENCE, THAT THE ASSESSEE HAD MADE DIFFERENT EXPLANATION AT ASSESSMENT STAGE,THAT DURING THE APPELLATE PROCEEDINGS HE HAD FILED ANOTHER EXPLANATION. HOLDI NG THAT THE EXPLANATION OF THE ASSESSEE WAS NOT CORRECT AT ALL IN WANT OF DOCUMENTARY EVIDENCE,THE FAA CONFIRMED THE ORDER OF THE AO. 2 ITA NO. 3587/M/2013 SHIVKARAN B. GUSAIWAL 2 4. BEFORE US,THE AR STATED THAT ASSESSEE WAS A SMALL T IME BUSINESSMEN,THAT HE WAS NOT REPRESENTED PROPERLY AT THE ASSESSMENT STAGE,THAT BY MISTAKE BA NK ACCOUNT WAS NOT INCLUDED IN THE BALANCE- SHEET.ALTERNATIVELY, IT WAS CONTENDED THAT IN THE P EAK AMOUNT COULD BE CONSIDERED FOR ADDITION TO BE MADE U/S 68 OF THE ACT.HE STATED THAT PEAK AMOUN T FOR THE YEAR UNDER CONSIDERATION WAS RS. 1. 92 LAKHS ONLY.DEPARTMENTAL REPRESENTATIVE (DR) SUPP ORTED THE ORDER OF THE FAA 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL BEFORE US.WE FIND THAT ASSESSEE IS A SMALL TIME TRADER,THAT HE HAD TAKEN DIFFERENT STA NDS BEFORE THE AO AND THE FAA ABOUT THE CASH DEPOSITED IN HIS ACCOUNT,THAT ADDITIONS WERE MADE U /S 68 OF THE ACT BY THE AO. IN OUR OPINION THE WHOLE OF THE TRANSACTION APPEARED IN THE BANK ACCOU NT SHOULD NOT HAVE BEEN ADDED TO THE INCOME OF THE ASSESSEE,SPECIALLY WHEN THE PROVISIONS OF SE CTION 68 OF THE ACT WERE INVOKED.IN SUCH CASES THE PEAK CREDIT OR THE SEED MONEY HAS TO BE TAXED.T HE ASSESSEE HAD GIVEN A CHART ABOUT THE PEAK AMOUNT AS CALCULATED BY HIM.CONSIDERING THE PECULIA R FACTS AND CIRCUMSTANCES OF THE CASE, WE ARE OF THE OPINION THAT IN THE INTEREST OF JUSTICE,THE MATTER SHOULD BE RESTORED BACK TO THE FILE OF THE A O TO DETERMINED THE PEAK CREDIT FOR THE YEAR UNDER CO NSIDERATION AND RESTRICT THE ADDITION TO THAT SUM ONLY.THE AO IS DIRECTED TO AFFORD A REASONABLE OPPO RTUNITY OF HEARING TO THE ASSESSEE.EFFECTIVE GROUND OF APPEAL IS DECIDED IN FAVOUR OF ASSESSEE, IN PART. AS A RESULT, APPEAL FILED B Y THE ASSESSEE STANDS PARTLY ALLOWED. 0*1 #)* 2 3 , #4 , * 5 . ORDER PRONOUNCED IN THE OPEN COURT ON 11TH ,FEBRUAR Y,2015. !/ , .$ ! 6 7# 11 0- , 201 5 , 9 SD/- SD/- ( /JOGINDER SINGH) ( !' / RAJENDRA) / JUDICIAL MEMBER ! ! ! ! / ACCOUNTANT MEMBER / MUMBAI, 7# /DATE: 11.02.2015 SK !/ !/ !/ !/ , ,, , '*: '*: '*: '*: ;!:$* ;!:$* ;!:$* ;!:$* / COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE / %& 2. RESPONDENT / '(%& 3. THE CONCERNED CIT(A)/ < = , 4. THE CONCERNED CIT / < = 5. DR E BENCH, ITAT, MUMBAI / :> '*# , . . . 6. GUARD FILE/ 0 (:* '* //TRUE COPY// !/# / BY ORDER, ? / DY./ASST. REGISTRAR , /ITAT, MUMBAI