BHIMRAJ K. GUPTA, MUMBAI V. ITO WD 20(1)(2), MUMBAI

ITA 3682/MUM/2014

• Counselvise Citation: 368219914 RSA 2014
• Duration Of Justice: 1 year(s) 3 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-08-2015
• Appeal Filed By: Assessee
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 23-05-2014
• Court: TRIBUNAL
• Department Lawyers: G N MAKAWANA
• Assessee Lawyers: RAJ KUMAR ARORA
• Keywords: Depreciation; Income from undisclosed sources
• Section: 133(6)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI BEFORE SHRI G.S. PANNU , ACCOUNTANT MEMBER ITA NO . 3682 / MUM./ 2014 ( ASSESSMENT YEAR : 20 0 9 10 ) SHRI BHIMRAJ K. GUPTA FLAT NO.2, BUILDING NO.1 VERSOVA VIEW CHS N DUTTA MARG 4, BUNGLOWS ANDEHRI(WEST) M UMBAI 400 053 PAN ACBPV7735L .. APPELLANT V/S INCOME TAX OFFICER WARD 2 0 (1)( 2 ), MUMBAI .... RESPONDENT ASSESSEE BY : SHRI RAJ KUMAR ARORA REVENUE BY : SHRI G.N. MAKAWANA DATE OF HEARING 1 5 .0 7 .2015 DATE OF O RDER 31.08.2015 O R D E R PER G S PANNU TH E PRESENT APPEAL PREFERRED BY THE ASSESSEE IS DIRECTED AGAINST THE IMPUGNED ORDER DATED 20 TH MARCH 2014 , PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS) 3 1 , MUMBAI, FOR THE ASSESSMENT YEAR 20 0 9 10 . THE SOL E DISPUTE IN THIS APPEAL IS WITH REGARD TO THE DIRECTION OF THE LEARNED CIT(A) IN CONFIRMING THE ORDER OF SHRI BHIMRAJ K. GUPTA 2 THE ASSESSING OFFICER PARTLY IN TREATING THE CASH DEPOSIT OF RS. 4,33,438/ - IN THE BANK ACCOUNT AS UNEXPLAINED INCOME. 2. THE FACTS OF THE CASE ARE THA T THE ASSESSEE IS AN INDIVIDUAL DERIVING INCOME AS COMMISSION AGENT AS WELL AS INCOME UNDER THE HEADS INCOME FROM HOUSE PROPERTY AND INCOME FROM OTHER SOURCES. DURING THE SCRUTINY PROCEEDINGS, THE ASSESSING OFFICER NOTED THAT THERE WERE CASH DEPOSIT S OF RS. 15,50,500, IN THE BANK ACCOUNT OF THE APPELLANT MAINTAINED WITH ICICI BANK LTD., LOKHANDWALA COMPLEX, ANDHERI (W), MUMBAI. THE ASSESSING OFFICER, ACCORDINGLY, ASKED THE APPELLANT TO EXPLAIN THE SOURCE OF CASH DEPOSIT S IN THE BANK ACCOUNT. THE SOURC E OF FUNDS FOR CASH DEPOSITED IN THE BANK ACCOUNT WAS EXPLAINED AS UNDER: RENT RECEIVED ` RS. 2,40,000 COMMISSION RECEIVED ` RS. 5,85,000 LOAN GIVEN & RECEIVED BACK ` RS. 3,00,000 TOKEN MONEY ` RS. 2,00,000 WITHDRAWAL & DEPOSIT RS. 4,00,000 TOTAL: RS. 17,25 ,000 THE ASSESSING OFFICER PARTLY ACCEPTED THE CONTENTION S OF THE ASSESSEE EXCEPT THE FOLLOWING , T HAT THE LOAN GIVEN AND RECEIVED BACK OF RS . 3,00,000 WAS NOT EXPLAINED AS THE NOTICES UNDER SECTION 133(6) OF THE ACT ISSUED TO VARIOUS PARTIES REMAINED UNS ERVED AND THE ASSESSEE SHRI BHIMRAJ K. GUPTA 3 HAS NOT PRODUCED THE PARTIES AND HENCE, RS . 3,00,000, WAS ADD ED TO THE INCOME AS UNEXPLAINED INCOMES. SIMILARLY, TOKE N MONEY RECEIVED AGAINST SALE OF RS . 2,00,000 / - , ALSO COULD NOT BE EXPLAINED PROPERLY BY THE ASSESSE E , AS IT WAS NO T SHOWN ON THE LIABILITY SIDE IN THE BALANCE SHEET AS TOKE N MONEY RECEIPT. WITH REGARD TO WITHDRAWAL OF RS. 3,71,000 / - AND DEPOSIT BACK INTO THE BANK ACCOUNT, THE ASSESSING OFFICER HELD THAT RS. 2,50,000 / - IS TREATED AS RE DEPOSITED IN THE BANK OUT OF THE WI THDRAWAL FROM ATM AND THE BALANCE AMOUNT STOOD ADDED AS INCOME FROM UNDISCLOSED SOURCES. SIMILARLY, WITH RESPECT TO THE RENT RECEIVED, COMMISSION RECEIVED AND INTEREST INCOME OF RS . 8 ,65,120 ( RS. 2,40,000 + RS . 2,85,000 + RS. 40,120). THE CLAIM OF THE ASSESSE E TO THE EXTENT OF 30% FOR REPAIR AND MAINTENANCE FOR HOUSE PROPERTY OF RS. 72,000, ADMINISTRATIVE EXPENSES OF RS. 3,96,413, AND BANK INTEREST OF RS. 682 WAS CONSIDERED THE NET CASH GENERATION FROM THESE INCOMES TO THE TUNE OF RS. 3,96,025 , WAS ACCEPTED AND TH E BALANCE AMOUNT WAS TREATED AS UNEXPLAINED . HENCE, THE ASSESSING OFFICER TREATED AN AMOUNT OF RS. 9,04,087 / - AS UNEXPLAINED DEPOSITS IN THE BANK ACCOUNT . 3. AGGRIEVED BY THE ORDER OF THE ASSESSING OFFICER , THE ASSESSEE FILED APPEAL WITH CIT ( A) , W HO HAS AL LOWED PARTIAL RELIEF. FIRSTLY , AS PER SHRI BHIMRAJ K. GUPTA 4 THE CIT(A), THE ASSESSING OFFICER WAS WRONG IN PRESUMING THAT THE ASSESSEE HAS ACTUALLY INCURRED ANY EXPENSES TO ABSORB THE STATUTORY DEDUCTION AVAILABLE TO HIM AGAINST RENT INCOME AND HELD THAT THE ASSESSEE HAD ACCESS TO THE ENTIRE AMOUNT OF RENT RECEIPT OF RS. 2,40,000/ - AND THUS, ADDITION TO THE TUNE OF RS. 72,000 WAS DELETED . SECONDLY, THE CIT(A) ALSO ALLOWED RELIEF TO THE TUNE OF RS 1,40,975 / - BEING DEPRECIATION CLAIMED BY THE ASSESSE E . THE BALANCE ADDITION OF RS. 6,91,112/ - WAS CONFIRMED ( WRONGLY INDICATED BY THE CIT(A) AS RS. 4,33,438/ - WHICH WAS POINTED OUT BY THE APPELLANT ALSO IN ITS SUBMISSIONS/PAPER BOOK ) . 4. NOT BEING SATISFIED WITH THE ORDER OF THE CIT ( A), THE ASSESSEE IS IN FURTHER APPEAL BEFORE THE TR IBUNAL. 5. THE LEARNED COUNSEL FOR THE ASSESSEE MADE DETAIL ED SUBMISSIONS AND EXPLAINED THAT THE RETURN OF PAST LOAN OF RS.3,00,000 , WAS A GENUINE TRANSACTION AND REFERRED TO THE CONFIRMATION FROM THE PARTIES. IN RESPECT OF RECEIPT OF RS . 2, 00,000 / - AS TOK E N MONEY, IT WAS SUBMITTED THA T THE TOKE N MONEY IS RECEIVED FROM PROSPECTIVE BUYERS OF CARS AS PER THE GENERAL BUSINESS PRACTICE OF THE TRADE. REGARDING THE AVAILIBILITY OF THE CASH OUT OF THE WITHDRAWAL S OF RS. 4 ,00,000 / - , IT WAS EXPLAINED THAT A SUM OF RS . 3,84,917 / - WAS RE DEPOSITED IN THE BANK. SHRI BHIMRAJ K. GUPTA 5 THE ASSESSEE ALSO PRODUCED THE STATEMENT TO SUBSTANTIATE THAT THE ASSESSEE HAS DEPOSITED RS. 3,84 ,917 / - IN THE BANK ACCOUNT. 6. THE LEARNED DEPARTMENTAL REPRESENTATIVE, ON THE OTHER HAND, RELIED ON THE ORDER OF THE ASSESSING OFFICER. 7. I HAVE CONSIDERED THE RIVAL SUBMISSIONS AND HAVE PERUSED THE MATERIAL AVAILABLE ON RECORD. REGARDING THE LOAN ADVANCED BY THE ASSESSEE OF RS. 3,00,000 / - IN THE EARLIER YEARS AND RECEI VED BACK DURING THE YEAR, THE ASSESSING OFFICER HA S ISSUED LETTERS UNDER SECTION 133(6) TO 20 PARTIES FROM WHOM THE ASSESSEE CLAIMED TO HAVE RECEIVED THE RE PAYMENT OF LOAN. THE SAID LETTERS WERE RETURNED BACK UN - SERVED BY THE POSTAL AUTHORITIES AND ASSESSEE COULD NOT PRODUCE THE PARTIES BEFORE THE ASSESS ING OFFICER . THE ASSESSEE HAS PRODUCED LOAN CONFIRMATION FROM THESE PARTIES IN THE PAPER B OOK AND INSISTS THAT THE SAME ARE GENUINE AND BEING SMALL PARTIES, THEY COULD NOT BE PRODUCED. IN THIS CONTEXT, IN MY VIEW, IT WOULD MEET THE ENDS OF JUSTICE, IF THE MATTER IS REMITTED BACK TO THE ASSESSING OFFICER FOR ALLOWING THE ASSESSEE AN OPPORTUNITY TO ESTABLISH THE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE LOAN CREDITORS TO THE TUNE OF RS. 3,00,000/ - AND IF THE ASSESSING OFFICER REQUIRES THE PRESENCE OF THE CREDITORS, HE SHALL BE FREE TO ENSURE THEIR ATTENDANCE AS PER THE STATUTORY PROVISIONS. THUS ON THIS ASPECT, ASSESSEE SUCCEEDS FOR STATISTICAL PURPOSES. SHRI BHIMRAJ K. GUPTA 6 8. REGARDING THE TOKE N MONEY OF RS. 2,00,000 / - RECEIVED BY THE ASSESSEE DURING THE YEAR FROM CAR B UYERS, IT IS SEEN THAT THE ASSESSEE IS IN THE BUSINESS OF CAR TRADING ON COMMISSION BASIS, AND SUCH RECEIPTS ARE A PART OF HIS BUSINESS OPERATIONS . I, THEREFORE, DIRECT THE ASSESSING OFFICER TO DELETE THE ADDITION OF RS. 2,00,000/ - . REGARDING WITHDRAWAL OF RS. 4 , 00,000 FROM THE BANK AND DEPOSIT OF RS. 3,84 ,970 IN THE BANK, WHEREBY THE ASSESSING OFFICER AND THE CIT(A) HAS ACCEPTED THE SAID RE DEPOSIT INTO THE BANK TO THE TUNE OF RS. 2 ,50,000 AND THE DIFFERENCE OF RS . 1,34,000/ - HAS BEEN TREATED AS UNEXPLAINED. THE ASSESSEE HAS DULY SUBMITTED BANK STATEMENT WHICH CLEARLY SHOWS THAT THE ASSESSEE HAS WITHDRAWN RS . 4,66,000 / - DURING THE YEAR AND HAS DEPOSITED RS. 3 ,84,970 / - HENCE THE ADDITION TO THE TUNE OF RS. 1,34,000 / - IS HEREBY DELETED . 9. IN THE RESULT, ASSESSE ES APPEAL STANDS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT O N SD/ - SD/ - G.S. PANNU ACCOUNTANT MEMBER MUMBAI, DATED : 31 - 08 - 2015 SHRI BHIMRAJ K. GUPTA 7 COPY OF THE ORDER FORWARDED TO : (1) THE ASSESSEE; (2) THE REVENUE; (3) THE CIT(A); (4) THE CIT, MUMBAI CITY CONCE RNED; (5) THE DR, ITAT, MUMBAI; (6) GUARD FILE . TRUE COPY BY ORDER SKS SR. PRIVATE SECRETARY (DY./ASSTT. REGISTRAR) IT AT, MUMBAI / / / / / /