VAIBHAV PANKAJ SHAH, MUMBAI V. ACIT, CIRCLE 25(3), MUMBAI

ITA 398/MUM/2024

• Counselvise Citation: [2024] 130 COUNSELVISE.COM (IT) 5559 (ITAT-MUMBAI)
• Duration Of Justice: 6 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-08-2024
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: F
• Next Hearing Date: 09-07-2024
• Assessment Year: misc
• Appeal Filed On: 28-01-2024
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: RAJESHWARI MENON
• Assessee Lawyers: WAY OF SHOW
• Keywords: Unexplained cash credit; Principle of natural justice; Bogus
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “F” MUMBAI BEFORE SHRI OM PRAKASH KANT (ACCOUNTANT MEMBER) AND SHRI SUNIL KUMAR SINGH (JUDICIAL MEMBER) ITA No. 398/MUM/2024 Assessment Year: 2017-18 Vaibhav Pankaj Shah, 60-B, Dolat Bunglow, East West Road No. 2, Vile Parle (West), Mumbai-400049. Vs. ACIT, Circle 25(3), 232, 2 nd floor, Kautilya Bhavan, C-41 to C-43, G Block, BKC, Bandra (East), Mumbai-400051. PAN NO. AALPS 8652 B Appellant Respondent Assessee by : None Revenue by : Ms. Rajeshwari Menon, Sr. DR Date of Hearing : 10/07/2024 Date of pronouncement : 19/08/2024 ORDER PER OM PRAKASH KANT, AM This appeal has been preferred by the assessee against order dated 30.11.2023 passed by the Ld. Commissioner of Income-tax (Appeals) – National Faceless Appeal Centre, Delhi [in short ‘the Ld. CIT(A)’] for assessment year 2017-18, raising following grounds: 1. In the facts and circumstances of the case and in law, the Learned National Faceless Appeal Centre (NFAC), CIT erred in passing the impugned order dated 30.11.2023 under section 250 of the Act without providing personal hearing to the appellant thereby grossly violating the principles of Natural Justice. 2. In the facts and circumstances of the National Faceless Appeal Centre (NFAC), CIT (Appeals), Mumbai has erred in sustaining the addition of Rs. 54,50,000/ deposits as unexplained cash credit under section 68 of the Act. 3. In the facts and circumstances of National Faceless Appeal Centre (NFAC), CIT (Appeals), Mumbai has erred in sustaining the addition of Rs. 54,50,000/ deposits during demonetization period ignoring the fact that the said amount is already assesse the respective Assessment Years i.e. AY 2009 2013-14 and AY 2014 2. Briefly stated, facts of the case are that the assessee filed return of income on 30.1 Rs.1,18,70,890/-. The return of income filed by the assessee was selected for scrutiny assessment and statutory notices under the Income-tax Act, 1961 (in short ‘the Act’) were issued and complied with. The Assessing Office possession of the Income explain source of cash deposit of R on 12.11.2016 (i.e. during the demonetization period). The assessee explained that said c donations claimed u/s 35AC and 35AC(ii) of the Act cash was received back them for donations. The assessee submitted that participate in Income Disclo the said cash received against cheques issued for donation undisclosed income, request vide letter dated 30.09.2016 In the facts and circumstances of the case and in law, the Learned National Faceless Appeal Centre (NFAC), CIT (Appeals), Mumbai has erred in passing the impugned order dated 30.11.2023 under section 250 of the Act without providing personal hearing to the appellant thereby grossly violating the principles of Natural Justice. In the facts and circumstances of the case and in law the Learned National Faceless Appeal Centre (NFAC), CIT (Appeals), Mumbai has erred in sustaining the addition of Rs. 54,50,000/ deposits as unexplained cash credit under section 68 of the Act. In the facts and circumstances of the case and in law the Learned National Faceless Appeal Centre (NFAC), CIT (Appeals), Mumbai has erred in sustaining the addition of Rs. 54,50,000/ deposits during demonetization period ignoring the fact that the said amount is already assessed to tax in the assessment proceedings of the respective Assessment Years i.e. AY 2009-10, AX 2010 14 and AY 2014-15 thereby resulting in double taxation. Briefly stated, facts of the case are that the assessee filed return of income on 30.10.2017 declaring total income at . The return of income filed by the assessee was selected for scrutiny assessment and statutory notices under the tax Act, 1961 (in short ‘the Act’) were issued and complied with. The Assessing Officer on the basis of the information in possession of the Income-tax Department asked the assessee to lain source of cash deposit of Rs.54,50,000/- in ICICI Bank Ltd. on 12.11.2016 (i.e. during the demonetization period). The assessee explained that said cash was generated on account of bogus donations claimed u/s 35AC and 35AC(ii) of the Act cash was received back from Trusts, against the cheque issued for donations. The assessee submitted that participate in Income Disclosure Scheme (IDS), 2016 for declaring the said cash received against cheques issued for donation , and therefore, the assessee filed such a letter dated 30.09.2016 before concerned authorities Vaibhav Pankaj Shah 2 ITA No. 398/MUM/2024 In the facts and circumstances of the case and in law, the Learned (Appeals), Mumbai has erred in passing the impugned order dated 30.11.2023 under section 250 of the Act without providing personal hearing to the appellant thereby grossly violating the principles of Natural Justice. case and in law the Learned National Faceless Appeal Centre (NFAC), CIT (Appeals), Mumbai has erred in sustaining the addition of Rs. 54,50,000/- being cash deposits as unexplained cash credit under section 68 of the Act. the case and in law the Learned National Faceless Appeal Centre (NFAC), CIT (Appeals), Mumbai has erred in sustaining the addition of Rs. 54,50,000/- being cash deposits during demonetization period ignoring the fact that the said d to tax in the assessment proceedings of 10, AX 2010-11, AY 15 thereby resulting in double taxation. Briefly stated, facts of the case are that the assessee filed 0.2017 declaring total income at . The return of income filed by the assessee was selected for scrutiny assessment and statutory notices under the tax Act, 1961 (in short ‘the Act’) were issued and complied r on the basis of the information in tax Department asked the assessee to in ICICI Bank Ltd. on 12.11.2016 (i.e. during the demonetization period). The assessee ash was generated on account of bogus donations claimed u/s 35AC and 35AC(ii) of the Act, under which against the cheque issued to for donations. The assessee submitted that it wished to sure Scheme (IDS), 2016 for declaring the said cash received against cheques issued for donation as therefore, the assessee filed such a before concerned authorities for IDS disclosure for assess and 2014-15 but said concerned authorities contented that said letter dated 30.09.2016 shows that cash received against cheques is assessee during demonetization period and same was deposited into bank. But, the Assessing Officer asked the assessee by way of show cause notice dated 01.12.2019 for substantiating the claim of cash received from various trusts in lieu of bogus donations by providing documentary evidence failed in doing so. Accordingly, the Assessing Officer rejected contention of the assessee and made addition u/s 68 of the Act following the decision of the Hon’ble Bombay High Court in the case of Shri Arunkumar J Muchhala v. CIT, [2017] 85 taxmann.com 306 (Bombay). 3. On further appeal, the Ld. CIT(A) also upheld the addition relying the decision of the Hon’ble Supreme Court in Srilekha Banerjee v. CIT (1963) 49 ITR 112 (SC) finding of the Ld. CIT(A) is reproduced as under: “4.4. Respectfully following the principles of law laid down by the apex court in the above cases, I consider the aspect of human pr cannot be untrue that when the assessee purportedly got lakhs of rupees in cash several years back, he definitely did not know that several years later there would come IDS or similar scheme where he could declare the amount and get amnesty. intention of enjoying for personal purposes or investing somewhere for pecuniary benefits. He did not generate the money in such clandestine manner for nothing or for keeping idle at home. Secondly, keeping such huge sum of currency notes for 3 to 8 years would have made the notes for assessment years 2009-10, 2010 15 but said request of the assessee was rejected concerned authorities due to procedural restriction contented that said letter dated 30.09.2016 shows that cash received against cheques issued for donation was available with the assessee during demonetization period and same was deposited into , the Assessing Officer asked the assessee by way of show cause notice dated 01.12.2019 for substantiating the claim of cash arious trusts in lieu of bogus donations by providing documentary evidences as against verbal claim, but the assessee failed in doing so. Accordingly, the Assessing Officer rejected contention of the assessee and made addition u/s 68 of the Act ollowing the decision of the Hon’ble Bombay High Court in the case Shri Arunkumar J Muchhala v. CIT, [2017] 85 taxmann.com On further appeal, the Ld. CIT(A) also upheld the addition relying the decision of the Hon’ble Supreme Court in Srilekha Banerjee v. CIT (1963) 49 ITR 112 (SC) finding of the Ld. CIT(A) is reproduced as under: 4.4. Respectfully following the principles of law laid down by the apex court in the above cases, I consider the aspect of human pr cannot be untrue that when the assessee purportedly got lakhs of rupees in cash several years back, he definitely did not know that several years later there would come IDS or similar scheme where he could declare the amount and get amnesty. So, he definitely got the cash back with the intention of enjoying for personal purposes or investing somewhere for pecuniary benefits. He did not generate the money in such clandestine manner for nothing or for keeping idle at home. Secondly, keeping such huge sum of currency notes for 3 to 8 years would have made the notes Vaibhav Pankaj Shah 3 ITA No. 398/MUM/2024 10, 2010-11, 2013-14 of the assessee was rejected by the due to procedural restrictions. The assessee contented that said letter dated 30.09.2016 shows that cash sued for donation was available with the assessee during demonetization period and same was deposited into , the Assessing Officer asked the assessee by way of show cause notice dated 01.12.2019 for substantiating the claim of cash arious trusts in lieu of bogus donations by providing , but the assessee failed in doing so. Accordingly, the Assessing Officer rejected the contention of the assessee and made addition u/s 68 of the Act ollowing the decision of the Hon’ble Bombay High Court in the case Shri Arunkumar J Muchhala v. CIT, [2017] 85 taxmann.com On further appeal, the Ld. CIT(A) also upheld the addition relying the decision of the Hon’ble Supreme Court in the case of Srilekha Banerjee v. CIT (1963) 49 ITR 112 (SC). The relevant 4.4. Respectfully following the principles of law laid down by the apex court in the above cases, I consider the aspect of human probability. It cannot be untrue that when the assessee purportedly got lakhs of rupees in cash several years back, he definitely did not know that several years later there would come IDS or similar scheme where he could declare the So, he definitely got the cash back with the intention of enjoying for personal purposes or investing somewhere for pecuniary benefits. He did not generate the money in such clandestine manner for nothing or for keeping idle at home. Secondly, keeping such huge sum of currency notes for 3 to 8 years would have made the notes brittle and decaying also. These suffered the risk of burglary or loss otherwise too. So, for the reasons stated above, I feel that from the point of circumstantial evidence, appellant' hence not acceptable. Accordingly, I reject the arguments and dismiss the ground.” 4. At the outset we may like to mention that on last occasion i.e. 01.07.2024, the Ld. counsel for the assessee appeared and the matter was adjourned to 23.07.2024 when the case was called for, neither any one attended nor any adjournment application was filed circumstances, we were of opinion that the interested in pursuing the appeal adjudicated after hearing arguments of the Ld. Departmental Representative (DR) and record. 4. 5. The main issue in dispute the cash deposit of Rs.54,50,000/ had made certain donations to activity in assessment year 2009 deduction for same u/s 35AC ‘the Act’). The relevant table of the donation of the assessment order refrence: “ A.Y Name of Trust 2009-10 Navjeevan Charitable Trust brittle and decaying also. These suffered the risk of burglary or loss otherwise too. So, for the reasons stated above, I feel that from the point of circumstantial evidence, appellant's claim is not reasonable or logical and hence not acceptable. Accordingly, I reject the arguments and dismiss the At the outset we may like to mention that on last occasion i.e. 01.07.2024, the Ld. counsel for the assessee appeared and the tter was adjourned to 23.07.2024 on her request, but today when the case was called for, neither any one attended nor any adjournment application was filed on behalf of the assessee circumstances, we were of opinion that the assessee pursuing the appeal and therefore, the appeal is adjudicated after hearing arguments of the Ld. Departmental Representative (DR) and examination of material available on The main issue in dispute in the instant case i Rs.54,50,000/-. The assessee contented that he had made certain donations to few trusts engaged in research ssessment year 2009-10, 2014-15 and claimed u/s 35AC of the Income-tax Act, 1961( In short The relevant table of the donations is available in para 6.2 of the assessment order, which is reproduced as under Name of Trust Deduction amount (cheque/NEFT) (Rs.) Expenses deducted (Rs.) Navjeevan Charitable 31,00,000 3,10,000 Vaibhav Pankaj Shah 4 ITA No. 398/MUM/2024 brittle and decaying also. These suffered the risk of burglary or loss otherwise too. So, for the reasons stated above, I feel that from the point of s claim is not reasonable or logical and hence not acceptable. Accordingly, I reject the arguments and dismiss the At the outset we may like to mention that on last occasion i.e. 01.07.2024, the Ld. counsel for the assessee appeared and the on her request, but today when the case was called for, neither any one attended nor any of the assessee. In the assessee is not and therefore, the appeal is adjudicated after hearing arguments of the Ld. Departmental material available on in the instant case is the source of . The assessee contented that he engaged in research and claimed weighted Act, 1961( In short is available in para 6.2 which is reproduced as under for ready deducted (Rs.) Cash received (Rs.) 27,90,000 2010-11 Navjeevan Charitable Trust 2013-14 School of Human Genetics & Population Health 2014-15 School of Human Genetics & Population Health Total 5.1 The assessee contended that above parties returned the amount of donation back to assessee in cash after deducting 10% commission. The assessee the said deduction u/s 35AC assessment years. Further stated that back was kept with him and deposited in ICICI Bank on 12.11.2016 i.e. during the demonetization period. The lower authorities have rejected the contention of the assessee on the basis o circumstantial. According to the Ld. CIT(A) in normal circumstances no one will keep the cash currency for 3 to 8 years and therefore, rejected the contention of the assessee as not reasonable or Before us, no evidences have been filed assessee withdrawn the deduction in respect of corresponding years and cash was returned back by those trust assessee has not filed any such affidavit from those trusts supporting it contention the cash was received back. In the facts and circumstances of the case, we do not find any infirmity in the order of the Ld. CIT(A) on the issue in dispute Navjeevan Charitable 5,00,000 50,000 School of Human Genetics & Population 10,00,000 1,50,000 School of Human Genetics & Population 16,00,000 2,40,000 62,00,000 7,50,000 assessee contended that above parties returned the amount of donation back to assessee in cash after deducting 10% he assessee further contented that he u/s 35AC and the paid taxes thereon in all those years. Further stated that the cash, which was received back was kept with him and deposited in ICICI Bank on 12.11.2016 during the demonetization period. The lower authorities have rejected the contention of the assessee on the basis o circumstantial. According to the Ld. CIT(A) in normal circumstances no one will keep the cash currency for 3 to 8 years and therefore, rejected the contention of the assessee as not reasonable or Before us, no evidences have been filed in support f contention assessee withdrawn the deduction in respect of corresponding years and cash was returned back by those trusts to the assessee has not filed any such affidavit from those trusts supporting it contention the cash was received back. In the facts and circumstances of the case, we do not find any infirmity in the order of the Ld. CIT(A) on the issue in dispute and accordingly Vaibhav Pankaj Shah 5 ITA No. 398/MUM/2024 4,50,000 8,50,000 13,60,000 54,50,000 assessee contended that above parties returned the amount of donation back to assessee in cash after deducting 10% contented that he had withdrawn and the paid taxes thereon in all those which was received back was kept with him and deposited in ICICI Bank on 12.11.2016 during the demonetization period. The lower authorities have rejected the contention of the assessee on the basis of the circumstantial. According to the Ld. CIT(A) in normal circumstances no one will keep the cash currency for 3 to 8 years and therefore, rejected the contention of the assessee as not reasonable or logical. f contention that assessee withdrawn the deduction in respect of corresponding years to the assessee. The assessee has not filed any such affidavit from those trusts supporting it contention the cash was received back. In the facts and circumstances of the case, we do not find any infirmity in the and accordingly, we uphold the same. The ground rejected. 6. In the result, the appeal of the assessee is dismissed. Order pronounced in the open Court on Sd/- (SUNIL KUMAR SINGH JUDICIAL MEMBER Mumbai; Dated: 19/08/2024 Rahul Sharma, Sr. P.S. Copy of the Order forwarded to 1. The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file. //True Copy// uphold the same. The grounds of the appeal of the assessee are In the result, the appeal of the assessee is dismissed. nounced in the open Court on 19/08/2024. (SUNIL KUMAR SINGH) (OM PRAKASH KANT MEMBER ACCOUNTANT MEMBER Copy of the Order forwarded to : BY ORDER, (Assistant Registrar) ITAT, Mumbai Vaibhav Pankaj Shah 6 ITA No. 398/MUM/2024 of the appeal of the assessee are In the result, the appeal of the assessee is dismissed. /08/2024. Sd/- OM PRAKASH KANT) ACCOUNTANT MEMBER BY ORDER, Registrar) ITAT, Mumbai