SAJID ARIF MITHANI, MUMBAI V. ITO WD 4(4), THANE

ITA 363/MUM/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 0095 (ITAT-MUMBAI)
• Duration Of Justice: 7 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-08-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 17-01-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: N HEMALATHA
• Keywords: Unexplained cash credit; Unexplained investment

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH SMC, MUMBAI BEFORE SHRI D.T. GARASIA, JUDICIAL MEMBER ITA NO.363/M/2017 ASSESSMENT YEAR: 2010-11 SHRI SAJID ARIF MITHANI, CROSS NAKA, AGASHI ROAD, VIRAR (W) - 401303 PAN: AHEPM 2587K VS. INCOME TAX OFFICER, WARD 4(4), THANE (APPELLANT) (RESPONDENT) PRESENT FOR: ASSESSEE BY : NONE REVENUE BY : SMT. N. HEMALATHA, D.R. DATE OF HEARING : 06.06.2017 DATE OF PRONOUNCEMENT : 31.08.2017 O R D E R PER D.T. GARASIA, JUDICIAL MEMBER: THE PRESENT APPEAL HAS BEEN PREFERRED BY THE ASSES SEE AGAINST THE ORDER DATED 05.10.2016 OF THE COMMISSIONER OF INCOME TAX (APPEALS) [HEREINAFTER REFERRED TO AS THE CIT(A)] RELEVANT TO ASSESSMENT Y EAR 2010-11. 2. RETURN OF INCOME WAS FILED ON 16.12.2010 DECLARI NG TOTAL INCOME OF RS,2.45,.250/-. THE ASSESSEES INCOME IS FROM SHARE OF PROFIT, INTEREST AND REMUNERATION FROM PARTNERSHIP FIRM M/S. AARIF SATTA R & CO. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER (H EREINAFTER REFERRED TO AS THE AO) NOTICED THAT THE ASSESSEE HAD MADE CASH DEPOSIT S IN THE SAVING BANK ACCOUNT, AND THE ASSESSEE CLAIMED THAT IT WAS WITHD RAWN FROM THE ACCOUNT OF M/S. AARIF SATTAR & CO. FOR PURCHASE OF FERTILIZERS FROM ONE MR. BODKE, NASHIK. AS THE ASSESSEE COULD NOT PROVE THE SOURCE OF CASH DEPOSIT, AN AMOUNT OF RS.19,99,700/- WAS ADDED BACK TO THE TOTAL INCOM E OF THE ASSESSEE AS UNEXPLAINED CASH CREDITS. ITA NO.363/M/2017 SHRI SAJID ARIF MITHANI 2 3. MATTER CARRIED TO THE LD. CIT(A) AND THE LD. CIT (A) HAS PARTLY ALLOWED THE APPEAL BY OBSERVING AS UNDER: IN VIEW OF THE ABOVE DISCUSSION, I AM INCLINED TO ACCEPT THE CLAIM OF THE APPELLANT THAT THE SAME REPRESENTS BUSINESS REC EIPTS. SINCE THESE CASH DEPOSITS REPRESENTS SALES COLLECTIONS, THEN TH E QUESTION OF ESTIMATION OF PROFIT HAS TO BE WORKED OUT. IN THE INSTANT CASE , THE APPELLANT HAS FAILED TO SHOW ANY RECORD AND HAS NOT FURNISHED ANY DETAILS ABOUT THE PROFIT EARNED FROM THIS UNACCOUNTED BUSINESS BY HIM . MOREOVER, THESE BUSINESS TRANSACTIONS HAVE NOT BEEN DISCLOSED TO TH E DEPARTMENT IN THE INCOME TAX RETURN FILED BY THE APPELLANT. HENCE, TAKING INTO CONSIDERATION ALL THE FACTS INCL UDING EXTRA PROFIT MARGIN BY SELLING ILLEGALLY TO NON-FARMERS AND ADOPTING CA SH PAYMENTS IN VIOLATION OF SECTION 40(A)(3) OF THE ACT, IN MY VIE W, THE PRESENT ISSUE WOULD MEET THE ENDS OF JUSTICE, IF THE NET PROFIT F ROM THE ILLEGAL BUSINESS ACTIVITY IS ESTIMATED AT 50% OF THE AGGREGATE AMOUN T OF DEPOSITS OF RS.22,62,700/- PLUS INITIAL UNACCOUNTED INVESTMENT ESTIMATED AT RS.2,00,000/-. THEREFORE, 50% OF 22,62,700= RS.11,31,350/- PLUS RS .2,00,000/- = RS.13,31,350/- IS ADDED TO THE TOTAL INCOME OF THE APPELLANT. 4. DURING THE COURSE OF HEARING, THE ASSESSEE DID N OT REMAIN PRESENT BEFORE ME. THE ASSESSEE COULD NOT PRODUCE ANY EVIDENCE. THEREFORE, I HAVE NO ALTERNATIVE EXCEPT TO ENDORSE THE ACTION OF THE LD. CIT(A). 5. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMISS ED. ORDER PRONOUNCED IN THE OPEN COURT ON 31.08.2017. SD/- (D.T. GARASIA) JUDICIAL MEMB ER MUMBAI, DATED: 31.08.2017. * KISHORE, SR. P.S. COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT (A) CONCERNED, MUMBAI THE DR CONCERNED BENCH //TRUE COPY// [ BY ORD ER DY/ASSTT. REGISTRAR, ITAT, MUMBAI