HITESH AMRUTLAL BHIMANI, MUMBAI V. ITO 24(1)(4), MUMBAI

ITA 3644/MUM/2017

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 7835 (ITAT-MUMBAI)
• Duration Of Justice: 7 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-12-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 19-05-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: N HEMALATHA
• Assessee Lawyers: R C JAIN
• Keywords: Peak credit; Transactions in derivatives
• Section: 133(6)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC , BENCH MUMBAI BEFORE SHRI R.C.SHARMA, AM ITA NO. 3644 / MUM/20 17 ( ASSESSMENT YEAR 2011 - 12 ) SHRI HITESH AMRUTLAL BHIMANI 4, JAYSHANKAR BUILDING LIBERTY GARDEN NEAR NAVY COLONY, MALAD (W) MUMBAI 400 064 VS. ITO 24(1)(4) R.NO.613, 6 TH FLOOR PIRAMAL CHAMBERS, PAREL MUMBAI 400 012 PAN/GIR NO. ACGPB218K APPELLANT ) .. RESPONDENT ) ITA NO. 4737/ MUM/20 17 ( ASSESSMENT YEAR 2012 - 13 ) SHRI HITESH AMRUTLAL BHIMANI 4, JAYSHANKAR BUILDING LIBERT Y GARDEN NEAR NAVY COLONY, MALAD (W) MUMBAI 400 064 VS. ITO 30(1)(4) C - 13, 5 TH FLOOR PRATYAKSHAKAR BHAVAN BANDRA KURLA COMPLEX, BANDRA (E) MUMBAI 400 051 PAN/GIR NO. ACGPB218K APPELLANT ) .. RESPONDENT ) ASSESSEE BY SHRI R.C. JA IN REVENUE BY MS. N. HEMALATHA DATE OF HEARING 03 / 10 /201 7 DATE OF PRONOUNCEME NT 26 / 12 /201 7 / O R D E R PER R.C.SHARMA (A.M) : THESE ARE THE APPEALS FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A)41, MUMBAI DATED 24/02/2017 FOR A.Y. 2011 - 12 & 2012 - 13. 2. IN THESE APPEALS, ASSESSEE IS AGGRIEVED FOR ADDITION MADE U/S.68 OF THE IT ACT. 3. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORD PERUSED. ITA NO.3644/MUM/2017 SHRI HITESH AMRUTLAL BHIMANI 2 4. I HAVE GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AND FOUND THAT T HE ASSESSEE HAD FILED RETURN OF INCOME FOR AY 2011 - 12 ON 30 TH MARCH, 2013 DECLARING TOTAL INCOME OF RS. 123,107/ - AND THE SAME WAS PROCESSED U/S 143(1) OF THE INCOME TAX ACT 1961 . THE SAID RETURN WAS SELECTED FOR SCRUTINY UNDER CASS HAVING REGARDS TO THE INFORMATION AVAILABLE UNDER AIR. 5 . IN PURSUANCE TO THE NOTICE ISSUED U/S 142(1), THE ASSESSEE EXPLAINED THAT ALL THE TRANSACTIO NS IN THE BANK ACCOUNT IN THE NAME OF ASSESSEE MAINTAINED WITH ICICI BANK AND STATE BANK OF HYDERABAD, DID NOT BELONG TO HIM AND HE WAS MERELY A NAME LENDER AS HE WAS CONDUIT PIPE FOR RECEIVING AND PAYING MONEY THROUGH THE BANK ACCOUNTS FOR AND ON BEHALF O F CERTAIN PERSON WHOSE NAME AND PAN WERE FURNISHED. THE ASSESSEE FURTHER EXPLAINED THAT ALL THE ABOVE TRANSACTIONS ROUTED THROUGH THE SAID BANK ACCOUNTS BELONG TO ONE, MR. JITENDRA SHAH (AADPS6494B) AND THE BANK ACCOUNTS WERE OPENED FOR THE PURPOSE OF FACI LITATING TRANSACTIONS IN THE STOCK MARKET. 6 . THE ASSESSEE CLAIM ED THAT THE DEPOSIT AND WITHDRAWAL OF MONEY IN THE SAID BANK AC COUNTS HAVE NOTHING TO DO WITH ASSESSEE AND THE MONEY DID NOT BELONG TO HIM. HE ALSO SUBMITTED THAT FOR LENDING HIS NAME IN THE OPENING OF THE SAID BANK ACCOUNT, HE RECEIVED AN ANNUAL COMPENSATION OF RS. 60,000/ - WHICH HE HAS OFFERED AS INCOME CHARGEABLE TO TAX. 7 . THE AO, WITHOUT HAVING REGARD TO THE ABOVE SUBMISSIONS MADE BY THE APPELLANT VIDE LETTER DATED 25 - 03 - 2014 AND FOR THE REASONS RECORDED IN THE ITA NO.3644/MUM/2017 SHRI HITESH AMRUTLAL BHIMANI 3 ORDER UNDER APPEAL, BROUGHT TO TAX THE FOLLOWING AMOUNTS ARISING OUT OF THE ABOVE FACTS: INCOME / (LOSS) FROM BUSINESS AMOUNT IN RUPEES LOSS FROM DERIVATIVE TRANSACTIONS RS. (10,01,082 / - ) PROFIT FROM PURCHASE & SALE OF SHARE S RS. 1,14,49 8 / - RS. (8,86,584/ - ) INCOME FROM OTHER SOURCES NET PEAK BALANCE OF CASH DEPOSIT RS. 37,09,730 / - TOTAL ADDITIONS ON ACCOUNT OF UNDISCLOSED BANK A/C RS. 28,23, 14 6/ - 8. BY THE IMPUGNED ORDER, CIT(A) CONFIRMED THE ACTION OF THE AO AGAINST WHICH ASSESSEE IS IN FURTHER APPEAL BEFORE ME . 9. I HAVE CONSIDERED RIVAL CONTENTIONS AND CAREFULLY GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AND FOUND FROM RECORD THAT FOR THE YEAR UNDER CONSIDERATION ASSESSEE HAD FILED HIS RETURN OF INCOME AND DEC LARE FOLLOWING INCOME. 1. SALARY FROM SARVODAY INTERNATIONAL RS. 72,000/ - 2. SHORT TERM CAPITAL GAIN RS. 3,511/ - 3. INTEREST INCOME RS. 80,064 - --------------- GROSS TOTAL INCOME: RS. 155,575/ - LESS : DEDUCTION UNDER CHAPTER VIA T OTAL INCOME RS. 28,957/ - ---------------- OTHER RECEIPT: RS. 126,618/ - MAHARAJA ESTATE AGAINST REDEVELOPMENT OF MV RESIDENTIAL FLAT. COMPENSATION TOWARDS CORPUS FUND : RS. 81,250/ - RENT FOR 11 MONTHS @ RS. 9750/ - PM RS. 107,250/ - BROKERAGE FOR RENTAL ACCOMMODATION RS. 9,750/ - SHIFTING CHARGES RS. 2,500/ ITA NO.3644/MUM/2017 SHRI HITESH AMRUTLAL BHIMANI 4 10. DURING THE COURSE OF ENQUIRY WITH REGARD TO THE DEPOSIT IN THE BANK ACCOUNT IT WAS CATEGORICALLY RE PLIED BY THE ASSESSEE THAT HE HAS RECEIVED COMPENSATION OF RS. 5,000/ - P.M. FOR 12 MONTHS AGGREGATING TO RS. 60,000/ - FROM MR. JITENDRA SHAH FOR OPERATING OF T WO BANK ACCOUNTS IN HIS NAME IN ICICI BANK AND STATE BANK OF HYDERABAD. THE ABOVE ACCOUNTS WERE O PERATED UNDER THE INSTRUCTIONS OF MR. JITENDRA SHAH (AADPS 6494 B) AND THE ENTIRE AMOUNT DEPOSITED INTO BANKS, CASH / CHEQUES IN BOTH THE BANK ACCOUNTS DOES NOT BELONG TO HIM . SUMMARY OF DEPOSIT AND WITHDRAWAL IN ABOVE TWO BANK ACCOUNTS WAS ALSO PLACED BEF ORE THE AO. IT WAS FURTHER SUBMITTED THAT THE ABOVE TWO ACCOUNTS WERE UTILISED BY MR. JITENDRA SHAH MAINLY FOR DEALING IN STOCK MARKET IN DERIVATIVE SEGMENT OF MULTI COMMODITY STOCK EXCHANGE AND FUTURE AND OPTION IN NATIONAL STOCK EXCHANGE. DETAILS IN RESP ECT OF PROFIT AND LOSS AS PER GLOBAL SUMMARY RECEIVED FROM THE BROKERS ARE AS UNDER: LOSS IN MULTI COMMODITY TRANSACTION RS. 11,81,618 / - LOSS IN NSE FUTURE AND OPTION RS. 10,01,082/ - PROFIT IN NSE EQUITY CASH SEGMENT RS. 1,14,498/ - TOTAL LOSS RS. 20,68,202/ - 11. HENCE THE PAYMENTS MADE TO BROKER WAS ON ACCOUNT OF ABOVE LOSS, MARGIN DEPOSIT AND FOR OTHER PURCHASES IN CASH SEGMENTS. AS ALL THE ABOVE TRANSACTION WAS CARRIED OUT BY MR. JITENDRA SHAH, HENCE, ALL THE PROFIT, LOSS, DEPOSITS AN D WITHD RAWAL IN ABOVE ACCOUNTS / TRANSACTIONS WERE BELONGED TO HIM. ITA NO.3644/MUM/2017 SHRI HITESH AMRUTLAL BHIMANI 5 12. I ALSO FOUND THAT DURING THE EARLIER PROCEEDINGS, CIT(A) HAS CALLED REMAND REPORT FROM THE AO, WHEREIN AO HAS NARRATED THE FACTUAL POSITION WITH REGARD TO DEPOSIT HAVING BEEN MADE IN THESE T WO BANK ACCOUNTS AND OPERATED UNDER THE INSTRUCTION OF JITENDRA SHAH AND THAT ENTIRE AMOUNT SO WITHDRAWN AND DEPOSITED WAS BELONG TO HIM FOR WHICH ASSESSEE HAS RECEIVED COMPENSATION OF RS.5000/ - PER MONTH FOR TWELVE MONTHS. IT WAS FURTHER STATED THAT THESE ACCOUNTS WERE UTILIZED BY MR. JITENDRA SHAH FOR DEALING IN STOCK MARKET IN DERIVATIVE SEGMENT OF MULTI COMMODITY STOCK EXCHANGE AND NATIONAL STOCK EXCHANGE. HOWEVER, THE AO ALSO STATED THAT ON PERUSAL OF THE BANK STATEMENT SUMMARY OF BOTH THE ACCOUNTS, IT WAS FOUND TO BE IN THE NAME OF THE ASSESSEE. HOWEVER, NEITHER DURING THE COURSE OF ASSESSMENT NOR DURING THE COURSE OF RE M AND PROCEEDINGS, AO MADE ANY ENQUIRY WITH MR. JITENDRA SHAH BY ISSUING ANY NOTICE CALLING HIM TO EXPLAIN THE POSITION STATED BY T HE ASSESSEE. ASSESSEE HAS ALSO NOT FILED ANY CORROBORATIVE EVIDENCE IN SUPPORT OF HIS CONTENTION THAT CASH SO DEPOSITED BELONGED TO JITENDRA SHAH OR THAT JITENDRA SHAH HAS DEPOSITED AND WITHDRAWN CASH IN HIS ACCOUNT. IN VIEW OF THE ABOVE DISCUSSION, WE RE STORE THE MATTER BACK TO THE FILE OF THE AO AND DIRECT HIM TO MAKE ENQUIRY BY ISSUING NECESSARY NOTICE TO JITENDRA SHAH U/S.131 / 133(6) SO AS TO COUNTER EXAMINE THE CONTENTION OF ASSESSEE THAT ACCOUNT WAS OPERATED BY HIM, DEPOSIT OF CASH OR WITHDRAWAL OF CASH WAS AT HI S INSTANCE. NEEDLESS TO SAY THAT ASSESSEE SHOULD BE GIVEN DUE OPPORTUNITY BEFORE DECIDING THE ISSUE. WE DIRECT ACCORDINGLY. FURTHER, IT WAS NOTICED FROM THE AIR INFORMATION, THE ASSESSEE WAS IN RECEIPT OF RS.2,00,750/ - ITA NO.3644/MUM/2017 SHRI HITESH AMRUTLAL BHIMANI 6 FROM MAHARAJA ESTATE TOWARDS COMPENSA TION OF RS.81,250/ - AND RS.1,19,500/ - TOWARDS RENT FOR ALTERNATE ACCOMMODATION. THE AO ADDED THE AMOUNT BY OBSERVING THAT ASSESSEE HAS NOT SHOWN UTILIZATION OF THESE AMOUNTS FOR PAYING THE RENT. IN THE FITNESS OF THING, I RESTORE THIS GROUND BACK TO THE FI LE OF THE AO FOR VERIFYING THE ACTUAL UTILIZATION OF COMPENSATION RECEIVED BY THE ASSESSEE FOR PAYMENT OF RENT AND FOR DECIDING AFRESH. 13. IN THE RESULT, APPEAL IS ALLOWED IN PART. 14. FOR THE A.Y.2012 - 13, FACTS AND CIRCUMSTANCES ARE PARAMETERIA, FOLLOWIN G THE REASONING GIVEN HEREINABOVE, I DIRECT THE AO TO RESTRICT THE ADDITION ON ACCOUNT OF BANK TRANSACTION TO THE RECIPIENT OF RS.60,000/ - . IN RESPECT OF THE COMPENSATION RECEIVED, MATTER IS RESTORED BACK TO THE FILE OF THE AO IN TERMS OF THE ABOVE DIRECTI ON. 15. IN THE RESULT, APPEALS ARE ALLOWED IN PART FOR STATISTICAL PURPOSES . O RDER PRONOUNCED IN THE OPEN COURT ON THIS 26 / 12 /2017 S D/ - ( R.C.SHARMA ) ACCOUNTANT MEMBER MUMBAI ; DATED 26 / 12 /201 7 KARUNA SR. PS COPY OF THE ORDER FORWARDED TO : BY ORDER, ( ASSTT. REGISTRAR) ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY//