LATE SHRI KESRIMAL U SHAH, MUMBAI V. ITO 25(2)(1), MUMBAI

ITA 3810/MUM/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 88620 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 10 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-03-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Next Hearing Date: 03-03-2015
• Assessment Year: 2003-2004
• Appeal Filed On: 13-05-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: PREMANAND J
• Assessee Lawyers: ASEEIM AGARWAL
• Keywords: Unexplained cash credit
• Section: 143(3); 68

Judgement Text

, L LL LH HH H INCOME TAX APPELLATE TRIBUNAL,MUMBAI - C BENCH. , ! , BEFORE S/SH.VIJAY PAL RAO, JUDICIAL MEM BER & RAJENDRA,ACCOUNTANT MEMBER /. ITA NO.3810/MUM/2013, ' ' ' ' # # # # / ASSESSMENT YEAR-2003-04 LATE SHRI. KESRIMAL U.SHAH TH ROUGH L/H SMT. MANJULA K. SHAH, A/72, ASHIANA TOWERS, SODAWALA LANE, BORIVALI (W), MUMBAI-92 PAN:ABNPS7214C VS ITO 25(2)(1), C-11, PRATYAKSHKAR BHAVAN, BANDRA KURLA COMPLEX, BANDRA(E), MUMBAI-400051 ( $% / APPELLANT) ( &'$% / RESPONDENT) /. ITA NO.3811/MUM/2013, ' ' ' ' # # # # / ASSESSMENT YEAR-2005-06 LATE SHRI. KESRIMAL U.SHAH THROUGH L/H SMT. MANJULA K. SHAH, A/72, ASHIANA TOWERS, SODAWALA LANE, BORIVALI (W), MUMBAI-400092 VS ITO 25(2)(1), C-11,PRATYAKSHKAR BHAVAN, BANDRA KURLA COMPLEX, BANDRA(E), MUMBAI -51 /. ITA NO.6650/MUM/2010, ' ' ' ' # # # # / ASSESSMENT YEAR-2006-07 ITO 25(2)(1), C-11,PRATYAKSHKAR BHAVAN, BANDRA KURLA COMPLEX, BANDRA (E), MUMBAI-400051 VS SHRI. KESARIMAL U.SHAH THROUGH L/H SMT. MANJULA K. SHAH, A/72, ASHIANA TOWERS, SODAWALA LANE, BORIVALI (W), MUMBAI-400092 '() '() '() '() * * * * / ASSESSEE BY : SHRI ASEEIM AGARWAL + * / REVENUE BY : SHRI PREMANAND J. ' ' ' ' + ++ + ), ), ), ), / DATE OF HEARING : 03-03-2015 -.# + ), / DATE OF PRONOUNCEMENT : 18-03-2015 ' ' ' '1961 1961 1961 1961 + + + + 254 254 254 254( (( (1 11 1) )) ) )7) )7) )7) )7) 8 8 8 8 ORDER U/S.254(1)OF THE INCOME-TAX ACT,1961(ACT) PER RAJENDRA,AM ! ! ! ! ' ' ' ' : CHALLENGING THE ORDERS DATED 22.02.2013 OF THE CIT( A)-35,MUMBAI,THE ASSESSEE HAS FILED FOLLOWING GROUNDS OF APPEAL FOR THE ABOVE REFERRED TWO ASSESSMENT YEARS. ITA NO. 3810/MUM/2013-AY-2003-04 1.ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE HON'BLE CIT(A) ERRED IN PASSING AN EX-PARTE ORDER WITHOUT CONSIDERING THE F ACT THAT THE APPELLANT HAS EXPIRED AND HIS LEGAL HEIR (I.E. SMT. MANJULA K. SHAH) IS OLD, UNEDUCATED LADY AND COULD NOT ENGAGE A COUNSEL DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND CIT(A) PROCEED INGS DUE TO STRINGENT FINANCIAL CONDITION. 2.WITHOUT PREJUDICE TO THE ABOVE, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE HON'BLE CIT(A) ERRED IN CONFIRMING THE STAND OF THE LEARNED ASSESSING OFFICER THAT THE DEPOSITS IN THE BANK ACCOUNTS WERE ON ACCOUNT UNEXPLAINED CASH CREDIT UNDER SECTION 68 OF THE INCOME TAX ACT, 1961, INSTEAD OF UPHOLDING THE APPELLANTS PLEA THAT ONLY COMMISSION INCOME WAS EARNED BY HIM ON SAID CASH DEPOSITS OUT OF BUSINESS OF GIVING BOOK ENTRIES WHICH HAS ALREADY BEEN OFFERED TO TAX IN THE RETURN OF INCOME FOR THE RELEVANT ASSESS MENT YEAR. THE APPELLANT CRAVES LEAVE TO ADD, OMIT OR ALTER GR OUNDS OF APPEAL BEFORE OR DURING THE HEARING OF THE APPEAL. ITA NO. 3811/MUM/2013-AY-2005-06 1.ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE HON'BLE CIT(A) ERRED IN PASSING AN EX-PARTE ORDER WITHOUT CONSIDERING THE F ACT THAT THE APPELLANT HAS EXPIRED AND HIS LEGAL 2 ITA NO. 3810/M/2013 & ORS LATE SHRI. KESRIMAL U.SHA H HEIR (I.E. SMT. MANJULA K. SHAH) IS OLD, UNEDUCATED LADY AND COULD NOT ENGAGE A COUNSEL DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND CIT(A) PROCEED INGS DUE TO STRINGENT FINANCIAL CONDITION. 2.ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE HON'BLE CIT(A) ERRED IN CONFIRMING ADDITION OF RS. 3,12,36,834/- AS UNEXPLA INED CASH CREDITS WITHOUT CONSIDERING THE FACT THAT ONLY THE DECEASED APPELLANT KNEW THE NATURE OF ENTRIES IN BANK ACCOUNT. HE ALSO FAILED TO CONSIDER THAT THE DECEASED APPELLANT WAS ENGAGED IN PROVIDING ENTRIES TO VARIOUS PERSONS ON WHICH ONLY COMMISSION INCOME HAS BEEN EARNED RANGIN G FROM 0.25% TO 0.50% WHICH HAS ALREADY BEEN OFFERED TO TAX IN THE RETURN OF INCOME FOR THE RELEVANT ASSESSMENT YEAR. ITA NO. 6650/MUM/2010-AY-2006-07 THE ASSESSING OFFICER(AO) HAS RAISED FOLLOWING GROU NDS OF APPEAL: 1. 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. CIT(A) ERRED IN DELETING THE ADDITION TO THE TUNE OF RS. 1,03,60,909/- MADE ON ACCOUNT OF UNEXPLAINED CASH CREDIT U/S.68 OF THE ACT WITHOUT APPRECIATING THE FACT THAT THE ASSE SSEE FAILED TO PROVE THE CREDITWORTHINESS OF HIS LOAN CREDITORS.' 2. 'THE APPELLANT PRAYS THAT THE ORDER OF THE CIT(A ) ON THE ABOVE GROUND BE SET ASIDE AND THAT OF THE A.O. BE RESTORED.' 3. 'THE APPELLANT CRAVES LEAVE TO AMEND OR ALTER AN Y GROUND OR ADD A NEW GROUND.' AS THE ISSUE INVOLVED IN ALL THE YEARS ARE ALMOST S AME, THEREFORE, FOR THE SAKE OF CONVENIENCE WE ARE ADJUDICATING THEM BY A SINGLE COMMON ORDER. ITA NO. 3810/MUM/2013-AY- 2003-04 THE ASSESSEE,AN INDIVIDUAL, FILED HIS RETURN OF INC OME ON 29.12.2004 ADMITTING TOTAL INCOME OF RS. 1.18 LAKHS.SUBSEQUENTLY, THE AO SELECTED THE CASE F OR SCRUTINY AND COMPLETED THE ASSESSMENT U/S 143(3) R.W.S. 147 OF THE ACT DETERMINING THE TOTAL INCOME OF THE ASSESSEE AT RS. 60.45 LAKHS. HE MADE AN ADDITION OF RS. 59.27 LAKHS AS UNEXPLAINED CASH CREDIT U/S.68 OF THE ACT.DURING THE ASSESSMENT PROCEEDINGS,THE AO ISSUED NOTICE TO THE ASSESSEE TO FILE DETAILS ABOUT THE CASH DEPOSITS MADE IN THE CD ACCOUNT WITH ABHUDYA CO-OPERATIVE BA NK IN THE NAME OF M/S.NAGIRANI ENTERPRISES,M/S. PUNIT TRADING CO. AND M/S VIPUL EN TERPRISES.THE AO ALSO FOUND THAT ASSESSEE HAD MAINTAINED SEVERAL BANK ACCOUNT WITH STATE BANK OF BIKANER AND JAIPUR. HE HELD THAT THE ENTIRE DEPOSITS IN THE BANK ACCOUNTS HAD TO BE TREA TED AS UNEXPLAINED CASH CREDIT. 3. AGGRIEVED BY THE ORDER OF THE AO, THE ASSESSEE PREF ERRED AN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY(FAA).NOBODY APPEARED BEFORE HIM AS THE AS SESSEE HAD EXPIRED BY THAT TIME.FAA CALLED FOR A REMAND REPORT FROM THE AO AND FINALLY DISMISSED THE APPEAL FILED BY THE ASSESSEE. 4. BEFORE US,THE AUTHORISED REPRESENTATIVE (AR) CONTEN DED THAT THE LEGAL HEIR OF THE ASSESSEE WAS OLD AND UNEDUCATED LADY, THAT SHE COULD NOT ENGAGED A COUNSEL DURING THE PROCEEDINGS BEFORE THE FA DUE TO STRINGENT FINANCIAL CONDITION,THAT THE LA TE ASSESSEE HAD EARNED ONLY COMMISSION INCOME,THAT HE WAS ENGAGED IN BUSINESS OF ACCOMMODA TION ENTRIES, THAT HE EARNED MEAGER COMMISSION INCOME,THAT THE ADDITION OF THE ENTIRE A MOUNT APPEARED IN THE BANK ACCOUNTS WAS AGAINST THE PROVISIONS OF LAW,THAT IN THE AY.2006-0 7THE FAA HAD ALLOWED THE ASSESSEE SUBSTANTIVE RELIEF AND HAD UPHELD THE ADDITION OF RS.5.22 LAKHS ONLY OUT OF THE ADDITION MADE FOR RS.1.08 CRORES.DEPARTMENTAL REPRESENTATIVE(DR)SUPPORTED THE ORDER OF THE FAA. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL BEFORE US. WE FIND THAT THE ASSESSEE WAS NOT REPRESENTED BEFORE THE FAA AS PER PARAGRAPH 3 OF HIS ORDER,THAT THE AO HAD MADE ADDITION OF ENTIRE AMOUNTS APPEARING IN THE BA NK ACCOUNTS OF THE ASSESSEE. IN OUR OPINION, WITHOUT GOING INTO THE DETAILS AND WITHOUT UNDERSTA NDING REAL NATURE OF THE TRANSACTIONS ADDITION MADE BY THE AO,AMOUNTING TO RS. 59.27 LAKHS,WAS NOT JUSTIFIED.IN OUR OPINION, THE MATTER NEEDS FURTHER VERIFICATION OF THE CLAIM MADE BY THE LEGAL HEIR OF THE ASSESSEE ABOUT THE EARNING OF COMMISSION INCOME ONLY FROM THE SAID TRANSACTIONS.T HEREFORE,IN THE INTEREST OF JUSTICE,WE ARE REMITTING BACK THE MATTER TO THE FILE OF THE AO FOR FRESH ADJUDICATION. HE IS DIRECTED TO AFFORD A REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE A ND DECIDE THE ISSUE ACCORDINGLY. THE LEGAL HEIR OF THE ASSESSEE ARE DIRECTED TO EXTEND FULL COOPERA TION TO THE AO. THE EFFECTIVE GROUND OF APPEAL IS 3 ITA NO. 3810/M/2013 & ORS LATE SHRI. KESRIMAL U.SHA H DECIDED IN FAVOUR OF THE ASSESSEE, IN PART. ITA NO. 3811/MUM/2013 AY-2005-06 AS THE FACTS AND CIRCUMSTANCES OF THE CASE FOR THE YEAR UNDER APPEAL ARE IDENTICAL TO THE FACTS OF THE AY 2003-04 EXCEPT FOR THE FACT THAT ADDITION MA DE BY THE AO FOR THE YEAR UNDER CONSIDERATION WAS RS.3.12 CRORES.FOLLOWING OUR ORDER FOR THE AY 2 003-04,WE ARE REMITTING BACK THE ISSUE TO THE FILE OF THE AO FOR FRESH ADJUDICATION. EFFECTIVE GR OUND OF APPEAL IS DECIDED IN FAVOUR OF THE ASSESSEE,IN PART. ITA/6650/MUM/2010,AY.-2006-07: IN THE APPEAL FILED BY THE AO FOR THE YEAR UNDER CO NSIDERATION,THE FAA HAD RESTRICTED THE ADDITION MADE BY THE AO,THOUGH THE ASSESSEE HAD NOT APPEARE D BEFORE HIM.FOLLOWING THE RATIONAL OF THE EARLIER TWO YEARS,WHERE WE HAVE HELD THAT THE MATTE R NEEDS FURTHER VERIFICATION,WE ARE REMITTING BACK THE MATTER TO THE FILE OF THE AO FOR FRESH ADJ UDICATION.EFFECTIVE GROUND OF APPEAL FILED BY THE AO IS ALLOWED IN HIS FAVOUR,IN PART. AS A RESULT,APPEALS FILED BY THE AS SESSEE AND THE AO STAND PARTLY ALLOWED. 9): '() VKSJ VKSJVKSJ VKSJ '() , ; < + 7 SA 8): = + ) >?. ORDER PRONOUNCED IN THE OPEN COURT ON 18TH, MARCH,2015 . 8 + -.# A B' 18 EKPZ , 201 5 . + 7 C SD/- SD/- ( / VIJAY PAL RAO) ( ! ! ! ! / RAJENDRA) / JUDICIAL MEMBER /ACCOUNTANT MEMBER / MUMBAI, B' /DATE: 18.03 . 2015. SK 8 8 8 8 + ++ + &) &) &) &) D #) D #) D #) D #) / COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE / $% 2. RESPONDENT / &'$% 3. THE CONCERNED CIT(A)/ E F , 4. THE CONCERNED CIT / E F 5. DR C BENCH, ITAT, MUMBAI / G7 &)' L LL LH HH H , . . . 6. GUARD FILE/ 7 9 ') ') ') ') &) &)&) &) //TRUE COPY// 8' / BY ORDER, H / > DY./ASST. REGISTRAR , /ITAT, MUMBAI