HEMANT P. ZIRPE, MUMBAI V. ITO 15(2)(4), MUMBAI

ITA 3835/MUM/2013

• Counselvise Citation: [2015] 120 COUNSELVISE.COM (IT) 9384 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-02-2015
• Appeal Filed By: Assessee
• Bench Allotted: H
• Assessment Year: 2008-2009
• Appeal Filed On: 14-05-2013
• Court: TRIBUNAL
• Department Lawyers: JEETENDRA KUMAR
• Assessee Lawyers: DR P DANIEL
• Keywords: Principle of natural justice; Peak credit; Additional evidence
• Section: 68

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL H , BENCH MUMBAI , BEFORE SHRI I. P. BANSAL, J M & SHRI R.C.SHARMA , A M ITA NO. 3835 / MUM/20 1 3 ( ASSESSMENT YEAR : 200 8 - 0 9 ) HEMANT P. ZIRPE, C - 302, SAI SIMRAN CHS, DEONAR VILLAGE, GOVANDI ROAD, DEONAR, MUMBAI - 400 088 VS. ITO 15(2)(4), MUMBAI PAN/GIR NO. : A A EPZ 7816 P ( APPELLANT ) .. ( RESPONDENT ) /ASSESSEE BY : DR. P.DANIEL /REVENUE BY : SHRI JEETENDRA KUMAR DATE OF HEARING : 4 TH FEBRUARY , 201 5 DATE OF PRONOUNCEMENT 25 TH FEBRUARY,2015 O R D E R PER R.C.SHARMA (A.M) : THE ASSESSEE HAS FILED THIS APPEAL AGAINST THE ORDER OF CIT(A), DATED 1 - 2 - 2013 FOR THE ASSESSMENT YEAR 200 8 - 0 9 , IN THE MATTER OF ORDER PASSED U/S.143(3) OF THE ACT , WHEREIN FOLLOWING GROUNDS HA VE BEEN TAKEN: 1. NATURAL JUSTICE THE LEARNED COMMISSIONER OF INCOME - TAX (APPEALS) - 26, MUMBAI, (LD. CIT (A ) ERRED IN VERIFYING A LL THE FACT OF THE CASE WHILE FRAMING THE APPELLATE ORDER. IT IS SUBMITTED THAT, IN THE FACTS AND THE CIRCUMSTANCES OF THE CASE, AND IN LAW, THE APPELLATE ORDER SO FRAMED BE HELD AS BAD AND ILLEGAL, AS (I) THE SAME IS FRAMED IN BREACH OF THE PRINCIPLES OF NATURAL JUSTICE; AND ITA NO. 3835 / 1 3 2 (II) THE SAME IS PASSED WITHOUT APPLICATION OF MIND TO THE FACTS AND THE SUBMISSIONS BROUGHT ON RE CORD BY THE APPELLANT. WITHOUT PREJUDICE TO THE ABOVE 2.1 THE LD. CIT (A) ERRED IN CONFIRMING THE ACTION OF THE A. O . IN MAKING ADDITION OF RS. 13,28,700/- TO THE INCOME OF THE APPELLANT U/S. 68 OF THE INCOME - TAX ACT, 1961[ ACT'], ON THE GROUND OF ALL EGED UNEXPLAINED CASH DEPOSITS IN THE BANK ACCOUNT OF THE APPELLANT. 2.2 WHILE DOING SO, THE LD. CIT (A) ERRED IN: (I) BASING HIS ACTION ONLY ON SURMISES, SUSPICION AND CONJECTURE; (II) TAKING INTO ACCOUNT IRRELEVANT AND EXTRANEOUS CONSIDERATIONS; AN D (III) IGNORING RELEVANT MATERIAL AND CONSIDERATIONS AS SUBMITTED BY THE APPELLANT. 2.3 IT IS SUBMITTED THAT IN THE FACTS AND THE CIRCUMSTANCES OF THE CASE, AND IN LAW, NO SUCH ADDITION WAS CALLED FOR. 2.4 WITHOUT PREJUDICE TO THE ABOVE, ASSUMING BUT NOT ADMITTING THAT ANY DISALLOWANCE WAS CALLED FOR, IT IS SUBMITTED THAT THE COMPUTATION OF THE ADDITION MADE BY THE AO IS ARBITRARY, EXCESSIVE AND NOT IN ACCORDANCE WITH THE LAW. 2. THE ASSESSEE HAS ALSO FILED ADDITION GROUND DURING THE COURSE OF HEAR ING, WHICH READS AS UNDER : - I T IS SUBMITTED THAT IN THIS CASE THERE IS AN IMPORTANT EVIDENCE IN THE FORM OF BANK STATEMENT WHICH IS VERY CRITICAL FOR HEARING OF THIS APPEAL. BECAUSE, THE ADDITIONS MADE BY THE A.O. ARE OF CASH DEPOSITS IN THE IN THE BANK ACCOUNT. ON GOING THROUGH THE BANK STATEMENT IT IS SEEN THAT THIS BANK ACCOUNT IS IN THE JOINT NAMES OF S/SHRI. SHETTY ANIL AND ZIRPE HEMANT AND THE FIRST NAME OF THE BANK ACCOUNT IS SHRI ANIL SHETTY. AS THE ASSESSING OFFICER DID NOT VERIFY THIS ASPECT IT REQUIRES TO BE LOOKED INTO. IN VIEW OF THIS FACT, IT IS PRAYED THAT THIS ADDITIONAL EVIDENCE MAY KINDLY BE ADMITTED AND LOOKED INTO AND OBLIGED. 3 . WE HAVE CONSIDERED RIVAL CONTENTIONS AND FOUND THAT THE ASSESSEE HAS NOT SHOWN HIS SAVINGS BANK ACCOUNT W ITH PARSHWANATH COOP. BANK LTD. KOLHAPUR, VASHI BRANCH IN HIS BALANCE SHEET FILED ALONG WITH RETURN OF ITA NO. 3835 / 1 3 3 INCOME . ACCORDINGLY, HE WAS REQUIRED TO EXPLAIN THE SOURCE OF THE CASH DEPOSIT OF RS.13,28,700/ - IN THE SAID ACCOUNT. HOWEVER, BEFORE THE A.O. NEITHER TH E ASSESSEE ATTENDED NOR ANY EXPLANATION WAS FILED WITH RESPECT OF THE SAID DEPOSITS. THE A.O., THEREFORE, TREATED THE SAID CASH DEPOSITS OF RS.13,28,700/ - AS UNEXPLAINED INCOME U/S.68 OF THE I.T.ACT AND ADDED TO THE TOTAL INCOME. 4. BY THE IMPUGNED ORDER, THE CIT(A) CONFIRMED THE ACTION OF THE AO AFTER HAVING THE FOLLOWING OBSERVATIONS : - 3.2 I HAVE CAREFULLY CONSIDERED THE FINDINGS OF THE A.O IN THE ASSESSMENT ORDER AS WELL AS THE SUBMISSION OF THE APPELLANT. AFTER CONSIDERING THE RIVAL SUBMISSION, IT IS NOTED THAT THE ASSESSEE, NEITHER AT THE TIME OF ASSESSMENT NOR AT THE TIME OF APPEAL PROCEEDINGS COULD FILE ANY CONVINCING DOCUMENTARY EVIDENCE OR EXPLANATION AS TO WHY HE HAS NOT DISCLOSED THE SAID BANK ACCOUNT IN THE BOOKS OF ACCOUNTS AND THE BALANCE SH EET. FURTHER, THE APPELLANTS SUBMISSION THAT THE CASH WITHDRAWALS WERE AGAIN REDEPOSITED, IS ALSO NOT CONVINCING. THE APPELLANT HAS NOT EXPLAINED THE CIRCUMSTANCES AS TO WHY HE HAS MADE REPETITIVE WITHDRAWALS JUST RE REDEPOSIT THE SAME CASH IN HIS BANK AC COUNT. UNDER THESE CIRCUMSTANCES, THE APPELLANT CANNOT BE GIVEN BENEFIT OF SUCH WITHDRAWALS WHICH MAY BE FOR PERSONAL PURPOSES. ACCORDINGLY, THE FINDING OF THE AO THAT ENTIRE CASH DEPOSITS ARE UNEXPLAINED APPEARS CORRECT, HENCE THE ADDITION MADE BY THE AO IS CONFIRMED. AGAINST THE ABOVE ORDER OF CIT(A), THE ASSESSEE IS IN FURTHER APPEAL BEFORE US. 5. IT WAS CONTENDED BY LD. AR THAT ADDITIONAL EVIDENCE IN THE FORM OF BANK STATEMENT BE ACCEPTED WHICH IS VERY CRITICAL FOR DECIDING THE ISSUE UNDER APPEAL. LD. AR FURTHER DREW OUR ATTENTION TO THE FACT THAT THIS BANK ACCOUNT WAS IN THE JOINT NAME OF SHRI SHETTY ANIL AND ZIRPE HEMANT . AS PER LD. AR HALF OF THE DEPOSIT IN THE SAID BANK ACCOUNT WAS BY OTHER JOINT HOLDER OF THE BANK ACCOUNT. HE FURTHER SUBMITTED TH AT AFTER EXCLUDING THE ITA NO. 3835 / 1 3 4 50% DEPOSIT B Y THE JOINT HOLDER OF BANK ACCOUNT , THE PEAK CREDIT APPEARING IN THE BANK ACCOUNT SHOULD ONLY BE CONSIDERED FOR MAKING THE ADDITION. 6. ON THE OTHER HAND, LD. DR CONTENDED THAT ONLY DURING THE COURSE OF SCRUTINY ASSESSM ENT IT WAS FOUND THAT ASSESSEE HAS DEPOSITED HUGE CASH IN THE PARSHWANATH COP. BANK LIMITED, IN SPITE OF REPEATED OPPORTUNITY ASSESSEE HAS NOT EXPLAINED THE SOURCE OF SUCH DEPOSIT IN THE BANK ACCOUNT, THEREFORE, THE AO WAS JUSTIFIED IN MAKING THE ADDITION IN RESPECT OF ENTIRE CASH DEPOSIT IN THE SAID BANK ACCOUNT. 7. WE HAVE CONSIDERED RIVAL CONTENTIONS, CAREFULLY GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AND FOUND FROM THE RECORD THAT DURING THE COURSE OF SCRUTINY ASSESSMENT ASSESSEE WAS ASKED REGAR DING DEPOSIT OF CASH IN THE BANK ACCOUNT BUT THE ASSESSEE FAILED TO EXPLAIN THE SOURCE OF DEPOSIT BEFORE THE AO. BEFORE THE CIT(A) ASSESSEE CONTENDED THAT BESIDES THE CASH DEPOSIT, THERE WERE WITHDRAWALS OF CASH OF RS.7,68,000/ - IN THE SAID BANK ACCOUNT, W HICH WERE UTILIZED FOR RE - D EPOSITING IN THE VERY SAME BANK ACCOUNT , THEREFORE, ONLY PEAK CREDIT SHOULD BE ADDED IN THE INCOME OF THE ASSESSEE. HOWEVER, THE CIT(A) DID NOT ACCEPT ASSESSEES CONTENTION AND CONFIRMED THE ACTION OF THE AO. 8. WE FOUND THAT CAS H HAS BEEN DEPOSITED IN THE VARIOUS BANK ACCOUNT, HOWEVER, PRIOR TO DEPOSIT OF THE CASH, THERE WERE WITHDRAWALS FROM THE VERY SAME BANK ACCOUNT. THEREFORE, ANY ADDITION IF REQUIRED TO BE MADE SHOULD BE RESTRICTED TO THE PEAK CREDIT IN THE SAID BANK ACCOUNT , UNLESS THE AO HAD ANY MATERIALS IN HIS POSSESSION TO THE EFFECT THAT CASH ITA NO. 3835 / 1 3 5 WITHDRAWN HAD BEEN USED BY ASSESSEE FOR ANY OTHER PURPOSES . ACCORDINGLY, WE RESTORE THE MATTER BACK TO THE FILE OF AO FOR WORKING OUT THE PEAK CREDIT BALANCE IN THE BANK ACCOUNT FO R MAKING THE ADDITION. ADDITION AL EVIDENCE WAS SUBMITTED BY THE LD. AR TO THE EFFECT THAT THE BANK ACCOUNT WAS JOINTLY OWNED BY TWO PERSONS, THEREFORE, THE AMOUNT DEPOSITED BY OTHER PERSONS SHOULD NOT BE ADDED IN ASSESSEES INCOME. THE FACT THAT ACCOUNT WA S JOINTLY OWNED BY ASSESSEE AND ONE MORE PERSON RELATED TO HIM WAS NOT EXPLAINED BEFORE THE AO. WE, THEREFORE, DIRECT THE ASSESSEE TO EXPLAIN ANY DEPOSIT BY OTHER PERSON AND IF THE AO SATISFIES THAT SOME OF THE DEPOSIT IN THE SAID BANK ACCOUNT WAS DONE BY OTHER PERSON, THE SAME IS TO BE EXCLUDED BEFORE WORKING OUT THE PEAK CREDIT. WE DIRECT ACCORDINGLY. 9 . IN THE RESULT, AP PEAL OF THE ASSESSEE IS ALLOWED IN PART FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 25/02/ 201 5 . SD/ - SD/ - ( ) ( I. P. BANSAL ) ( ) ( R.C.SHARMA ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI ; DATED 25/02 /201 5 /PKM , 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//