MIHIR H. BILAKHIA, MUMBAI V. ITO 25(3)(1), MUMBAI

ITA 3828/MUM/2009

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 79578 (ITAT-MUMBAI)
• Duration Of Justice: 5 year(s) 1 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-07-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: F
• Next Hearing Date: 22-05-2014
• Assessment Year: 2005-2006
• Appeal Filed On: 12-06-2009
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: PARMINDER KAUR
• Keywords: Unexplained cash credit
• Section: 131; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL 'F' BENCH, MUMBAI BEFORE SHRI D. MANMOHAN, VICE PRESIDENT AND SHRI B.R. BASKARAN, ACCOUNTANT MEMBER ITA NO. 3828/MUM/2009 (ASSESSMENT YEAR: 2005-06) SHRI MIHIR H. BILAKHIA VS. INCOME TAX OFFICER - 25(3)(1) A-502, GODS GRACE, ADARSH DUGDHALAYA COLONY, OFF MARVE RD. MALAD (W), MUMBAI 400064 BANDRA KURLA COMPLEX BANDRA (E), MUMBAI PAN - AEXPB1087P APPELLANT RESPONDENT APPELLANT BY: NONE RESPONDENT BY: MS. PARMINDER KAUR DATE OF HEARING: 31.07.2014 DATE OF PRONOUNCEMENT: 31.07.2014 O R D E R PER D. MANMOHAN, V.P. THIS APPEAL BY THE ASSESSEE PERTAINS TO A.Y. 2005-0 6. 2. WHEN THE CASE WAS POSTED FOR HEARING ON 14.05.2010 NONE APPEARED ON BEHALF OF THE ASSESSEE AND HENCE THE APPEAL WAS DISMISSED BY THE TRIBUNAL FOR NON-APPEARANCE. SUBSEQUENT THERETO THE ASSESSEE MOVED A PETITION FOR RECALLING OF THE ORDER AND ACCORDINGLY THE SAME WAS RECALLED AND POSTED FOR HEARING FROM TIME TO TIME. AGAIN NONE AP PEARED ON BEHALF OF THE ASSESSEE AND THEREFORE THE APPEAL WAS DISMISSED VID E ORDER DATED 19.10.2011. AGAIN THE ASSESSEE MOVED ANOTHER PETITI ON SEEKING RECALL OF THE ORDER AND THUS THE MATTER WAS RECALLED AND REFIXED FOR HEARING. WHEN THE CASE WAS LAST POSTED FOR HEARING ON 22.05.2014 ASSE SSEE SOUGHT ADJOURNMENT. IT DESERVES TO BE NOTICED THAT EVEN AF TER DISPOSAL OF THE MATTER EXPARTE TWICE AND UPON RECALLING, THE ASSESSEE WAS GRANTED ADJOURNMENTS FROM TIME TO TIME. HOWEVER, IN THE INTEREST OF SUBS TANTIAL JUSTICE AGAIN THE CASE WAS ADJOURNED TO 31.07.2014. ON THIS DATE ALSO NONE APPEARED ON BEHALF OF THE ASSESSEE. WE, THEREFORE, PROCEED TO D ISPOSE OF THE APPEAL EXPARTE, ON MERITS. ITA NO. 3828/MUM/2009 SHRI MIHIR H. BILAKHIA 2 3. THE ONLY ISSUE IN DISPUTE IS WITH REGARD TO THE ADD ITION OF ` 17,02,748/-. THE ASSESSEE DECLARED TOTAL INCOME OF ` 84,820/- FOR THE ASSESSMENT YEAR UNDER CONSIDERATION. THE CASE WAS S ELECTED FOR SCRUTINY UNDER CASS, I.E. BASED UPON THE INFORMATION RECEIVE D FROM THE STANDARD CHARTERED BANK WHICH COMMUNICATED THAT THE ASSESSEE HAD DEPOSITED CASH OF ` 16,84,440/- WITH ITS BRANCH LOCATED AT S.G. MARG, M UMBAI. DESPITE SEVERAL NOTICES ISSUED BY THE AO THERE WAS NO COMPL IANCE WHICH LED TO THE AO TO CONCLUDE THAT THE ASSESSEE IS NOT INCLINED TO COOPERATE WITH THE DEPARTMENT. THEREFORE THE ASSESSEE WAS SUMMONED AND DIRECTED TO BE PRESENT ON 20.10.2007 BUT EVEN THOSE SUMMONS WERE N OT HONOURED BY THE ASSESSEE. THEREFORE, AGAIN SUMMONS UNDER SECTION 13 1 WERE ISSUED DIRECTING HIM TO APPEAR ON 05.11.2007. AGAIN THERE WAS NO PERSONAL COMPLIANCE. HOWEVER, THE ASSESSEE ATTENDED ON 14.11 .2007 AND PRODUCED SOME DETAILS. ONE MORE SUMMONS WAS ISSUED ON 13.11. 2007 IN RESPONSE TO WHICH HE APPEARED AND A STATEMENT WAS RECORDED. UPO N ANALYSIS OF THE STATEMENT AND OTHER DETAILS FURNISHED BEFORE HIM, T HE ASSESSING OFFICER HAD COME TO THE CONCLUSION THAT THE ACCOUNT WITH THE ST ANDARD CHARTERED BANK HAS NOT BEEN DISCLOSED TO THE DEPARTMENT BY THE ASS ESSEE DESPITE NUMBER OF OPPORTUNITIES GIVEN TO HIM. THE TOTAL DEPOSITS IN T HAT ACCOUNT WAS TO THE TUNE OF ` 17,62,748/- FOR WHICH THE ASSESSEE HAS NOT OFFERED ANY EXPLANATION EXCEPT A VAGUE LETTER. THE ASSESSEE HAS NOT EXPLAIN ED THE SOURCE OF DEPOSITS ALONGWITH RELEVANT DOCUMENTARY EVIDENCE REGARDING T HE PERSONS FOR WHOM HE IS CARRYING OUT BUSINESS ON COMMISSION BASIS. TH EREFORE IT WAS TREATED AS ASSESSEES INCOME FROM UNDISCLOSED SOURCE WITHIN TH E MEANING OF SECTION 68 OF THE ACT AND ASSESSMENT WAS COMPLETED ACCORDINGLY . 4. BEFORE THE FIRST APPELLATE AUTHORITY THE ASSESSEE C ONTENDED THAT HE HAS DEPOSITED THESE AMOUNTS WITH STANDARD CHARTERED BANK BY COLLECTING THE AMOUNT FROM OTHERS. HE TRAVELS FOR THE PURPOSE OF BUSINESS AND SINCE CARRYING CASH IS NOT SAFE THE MONEY RECEIVED FROM O THERS IS DEPOSITED IN THE BANK ACCOUNT AND HIS FAMILY MEMBERS WITHDRAW THE CA SH IN MUMBAI AND THEY HAND IT OVER TO THE PRINCIPALS. HE GETS HIS CO MMISSION FROM THE PRINCIPALS. THEREFORE IT CANNOT BE SAID THAT THE SO URCE IS NOT EXPLAINED. IT IS NOT IN DISPUTE THAT HE IS NOT MAINTAINING BOOKS OF ACCOUNT. IN FACT THE ITA NO. 3828/MUM/2009 SHRI MIHIR H. BILAKHIA 3 ASSESSEE WAS ASKED TO PRODUCE COPIES OF BILLS OF PU RCHASE AND SALE OF STATIONERY ON WHICH BROKERAGE IS RECEIVED AND THE S ALES CONSIDERATION RECEIVED IN CASH, WHICH WAS DEPOSITED IN HIS STANDA RD CHARTERED BANK ACCOUNT. ASSESSEE WAS ALSO ASKED TO GIVE THE NAMES AND ADDRESS OF THE CUSTOMERS FROM WHOM CASH WAS COLLECTED AND ALSO TO PRESENT DEPOSIT SLIPS AND CHEQUE BOOK RELATING TO THE UNDISCLOSED BANK AC COUNT. ASSESSEE WAS ALSO ASKED AS TO HOW HIS FATHER OPERATED THE ACCOUN T WHEN THE BANK ACCOUNT WAS IN HIS NAME. THERE WAS NO PROPER RESPON SE FROM THE ASSESSEE FOR THE ABOVE QUESTIONS. THE LEARNED CIT(A) ALSO NO TICED THAT THOUGH THE ASSESSEE OWNS UNDISCLOSED BANK ACCOUNT IT WAS NOT D ISCLOSED IN THE BALANCE SHEET ATTACHED WITH THE RETURNS. HE ALSO NOTICED TH AT THE ASSESSEE CHANGED HIS STAND THRICE WHILE EXPLAINING THE DEPOSITS IN H IS BANK ACCOUNT. UPON DISCUSSING THE ISSUE IN DETAIL FROM PARA 4.7 ONWARD S THE LEARNED CIT(A) OBSERVED THAT THE ASSESSEE HAS EARNED THE INCOME FR OM UNDISCLOSED SOURCE AND DEPOSITED THE AMOUNT IN HIS STANDARD CHARTERED BANK ACCOUNT AND DID NOT PAY TAX ON THOSE DEPOSITS AND THEREFORE IT WAS RIGHTLY TAXED BY THE AO AS UNEXPLAINED CREDIT. HE ALSO NOTICED THAT THE ADDITI ON IS MAINTAINABLE UNDER SECTION 69/69B OF THE ACT AND THE PLEA OF PEAK CRED IT ALSO FAILS BECAUSE THE ASSESSEE FAILED TO PROVE THAT THE WITHDRAWALS ARE R EDEPOSITED IN THE BANK ACCOUNT. HE THUS APPROVED THE ACTION OF THE AO. 5. AGGRIEVED, ASSESSEE IS IN APPEAL BEFORE US. EVEN AF TER FIVE YEARS, RECKONED FROM THE DATE OF FILING OF THE APPEAL, APA RT FROM THE FACT THAT THE MATTER WAS TWICE DISPOSED OF AND RECALLED AND ADJOU RNED ON NUMBER OF OCCASIONS, NONE APPEARED ON BEHALF OF THE ASSESSEE, WHICH SHOWS THAT THE ASSESSEE HAS BEEN FOLLOWING HIS CONSISTENT METHOD O F NON-COOPERATION JUST AS IT WAS DONE BEFORE THE AO. THOUGH IT WAS STATED THAT THE ASSESSEE HAS FILED PAPER BOOK BEFORE THE TRIBUNAL BUT AS PER THE RULES OF THE APPELLATE TRIBUNAL [RULE 18(6)] ONLY THOSE DOCUMENTS WHICH AR E REFERRED TO AND RELIED UPON BY THE PARTIES DURING THE COURSE OF ARGUMENT S HALL BE TREATED AS PART OF THE RECORD OF THE TRIBUNAL AND THUS WE CANNOT TA KE NOTE OF THE PAPER BOOK AND THE CONTENTS THEREIN AND WE HAVE TO GO BY THE M ATERIAL THAT WAS PLACED BEFORE THE TAX AUTHORITIES, AS REFERRED TO AND CONS IDERED BY THE AO AND CIT(A). SINCE WE ARE OF THE VIEW THAT THE TAX AUTHO RITIES HAVE GIVEN SUFFICIENT ITA NO. 3828/MUM/2009 SHRI MIHIR H. BILAKHIA 4 AND DETAILED REASONS IN COMING TO A CONCLUSION THAT THE CASH DEPOSITS IN THE BANK ACCOUNT DESERVES TO BE ASSESSED TO TAX, WE UPH OLD THE ORDER PASSED BY THE CIT(A) AND DISMISS THE APPEAL FILED BY THE ASSE SSEE. ORDER PRONOUNCED IN THE OPEN COURT ON 31 ST JULY, 2014. SD/- SD/- (B.R. BASKARAN) (D. MANMOHAN) ACCOUNTANT MEMBER VICE PRESIDENT MUMBAI, DATED: 31 ST JULY, 2014 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 25, MUMBAI 4. THE CIT 25, MUMBAI CITY 5. THE DR, F BENCH, ITAT, MUMBAI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI N.P.