ADEPT AGENCIES, MUMBAI V. ITO WD 14(1)(4), MUMBAI

ITA 4238/MUM/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 3164 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-06-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 30-04-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 27-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A RAMACHANDRAN
• Assessee Lawyers: N M PORWAL
• Section: 143(3); 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES A, MUMBAI BEFORE SHRI MAHAVIR SINGH, JUDICIAL MEMBER & SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER ITA NO.4238/MUM/2013 ASSESSMENT YEAR : 2009-10 M/S. ADEPT AGENCIES, 9/11, SHAKTI SADAN, 2 ND FLOOR, R.NO.15, LADWADI, OLD HANUMAN LANE, KALBADEVI, MUMBAI- 400 002 PAN AAOFA5854C VS. ITO WARD 14(1)(4) MUMBAI (APPELLANT) RESPONDENT) APPELLANT BY : SHRI N M PORWAL RESPONDENT BY : SHRI A RAMACHANDRAN DATE OF HEARING : 07 .0 6 .201 6 DATE OF PRONOUNCEMENT : .0 6 . 201 6 O R D E R PER MAHAVIR SINGH, JUDICIAL MEMBER THIS APPEAL BY ASSESSEE IS ARISING OUT OF THE ORDE R OF THE CIT(A) 25, MUMBAI, IN APPEAL NO.CIT(A)-25/IT-252/14(1)(4)/2011 -12 DATED 26.03.2013. THE ASSESSMENT WAS FRAMED BY THE ITO 14(1)(4), MUMBAI, FOR A.Y. 2009-10 VIDE HIS ORDER DATED 30.12.2011 U/S. 143(3) OF THE INCOME TA X ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT). 2. THE ONLY ISSUE IN THIS APPEAL OF THE ASSESSEE IS AGAINST THE ORDER OF THE CIT(A) CONFIRMING THE ACTION OF THE AO IN MAKING AD DITION OF CASH BALANCE MAINTAINED IN CASH BOOK AT RS.45,41,661/- AS ON 31. 03.2009. ITA NO.4238/MUM/2013 M/S. ADEPT AGENCIES 2 3. BRIEFLY STATED FACTS OF THE CASE ARE THAT THE AS SESSEE IS ENGAGED IN THE BUSINESS OF GENERAL MERCHANDISE AND COMMISSION AGEN T. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO NOTICED FROM THE BAL ANCE SHEET OF THE ASSESSEE THAT IT IS HAVING CASH IN HAND AMOUNTING TO RS.45,4 1,661/- AS ON 31.03.2009. THE ASSESSEE WAS ASKED TO EXPLAIN SUCH HUGE CASH BALANC E AT THE END OF THE FINANCIAL YEAR. THE ASSESSEE EXPLAINED BEFORE THE AO THAT TH IS HUGE CASH IS THE RESULT OF THE WITHDRAWALS MADE FROM BANK ACCOUNT WHERE ASSESSEE H AS MAINTAINED CURRENT ACCOUNT. THE ASSESSEE FURTHER EXPLAINED THAT FROM SEPTEMBER 2008 TO FEBRUARY 2009, IT HAD MADE 24 WITHDRAWALS FROM THE CURRENT B ANK ACCOUNT AND THIS CASH BALANCE MAINTAINED IN THE BALANCE SHEET IS THE RESU LT OF SUCH WITHDRAWALS. THE ASSESSEE ALSO EXPLAINED THAT THESE WITHDRAWALS WERE MADE BASED ON THE RUMOUR THAT THE MADHAVPURA CO-OPERATIVE BANK LTD, ABAD CO- OPERATIVE BANK LTD., ARE NOT DOING WELL AND FINALLY THEY WERE CLOSED DOWN AND LI QUIDATED. SIMILARLY, PEOPLESCO- OPERATIVE BANK HAD CLOSED IN THE YEAR 2008-09 AT VA LSAD. LOOKING INTO THE ENTIRE EPISODE, THE ASSESSEE WITHDREW THE SAID CASH OF RS. 45,41,661/- FROM ITS CURRENT ACCOUNT MAINTAINED WITH SARASWAT CO-OPERATIVE BANK, MUMBAI. FURTHERMORE, THE ASSESSEE EXPLAINED THAT IT DID NOT GET ANY INTEREST ON CURRENT ACCOUNT BALANCES. THE AO WAS NOT SATISFIED WITH THE EXPLANATION OF THE AS SESSEE AND HE MADE ADDITION OF CASH IN HAND AS UNEXPLAINED TRANSACTION U/S. 69 OF THE ACT BY OBSERVING AS UNDER: THE ABOVE SUBMISSION OF THE ASSESSEE IS NOT ACCEPT ED ON ACCOUNT OF HUGE CASH TRANSACTIONS WITHOUT ANY TRACE OF BUSINES S DEALINGS. AS SUCH, THE CASH IN HAND OF RS.45,41,661/- IS ADDED TO THE INCOME OF THE ASSESSEE U/S. 69 OF THE I.T.ACT. ITA NO.4238/MUM/2013 M/S. ADEPT AGENCIES 3 AGGRIEVED, THE ASSESSEE PREFERRED APPEAL BEFORE THE CIT(A). THE CIT(A) ALSO CONFIRMED THE ACTION OF THE AO BY MERELY STATING TH AT IT IS NOT EXPLAINED AS TO WHY SUCH HUGE CASH WAS LYING WITH THE ASSESSEE AND MORE OVER, THE SOURCE OF THIS CASH DEPOSIT REMAINS UNEXPLAINED. AGGRIEVED, THE ASSESS EE CAME UP IN SECOND APPEAL BEFORE US. 4. WE HAVE HEARD THE RIVAL CONTENTIONS AND HAVE GON E THROUGH THE FACTS AND CIRCUMSTANCES OF THE CASE. WE FIND THAT THE ASSESS EE HAS EXPLAINED THE REASONS FOR THE WITHDRAWAL OF CASH FROM ASSESSEES CURRENT BANK ACCOUNT FOR THE REASON OF FEAR OF CLOSURE OF THE BANK AND ALSO THAT IT DID NOT REC EIVE ANY INTEREST ON CURRENT ACCOUNT BALANCE. ADMITTEDLY, THE ASSESSEE HAS MADE WITHDRAWALS FROM THE BANK ACCOUNT DURING SEPTEMBER 2008 AND FEBRUARY 2009 AS PER THE BANK STATEMENT AMOUNTING TO RS.45,41,661/- AND THE SAME WAS KEPT A S CASH IN HAND AND THE ENTRY WAS MADE IN THE CASH BOOK ACCORDINGLY. IN VIEW OF THESE FACTS AND CIRCUMSTANCES, WE ARE OF THE VIEW THAT THESE CASH WITHDRAWALS FROM THE BANK WHICH WERE ENTERED INTO CASH BOOK AS CASH IN HAND WERE EXPLAINED CASH. IT IS ASSESSEES OWN ACTION BY WHICH HE HAS KEPT CASH IN HAND AFTER WITHDRAWING TH E SAME FROM BANK ACCOUNT AND IT IS NOT THE CASE OF THE REVENUE THAT IT HAS BEEN INVESTED IN SOME INCOME EARNING INSTRUMENT FROM WHERE IT HAS EARNED MORE INCOME. A CCORDINGLY, WE CANNOT ESTIMATE ANY INCOME ON THE SAME AND ALSO CANNOT TRE AT CASH IN HAND AS UNEXPLAINED. IN TERMS OF THE ABOVE, WE ALLOW THE A PPEAL OF THE ASSESSEE. ITA NO.4238/MUM/2013 M/S. ADEPT AGENCIES 4 5. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS DAY OF 15 TH JUNE 2016. SD/- SD/- (RAMIT KOCHAR) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED : 15 TH JUNE, 2016. SA COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE C I T(A), MUMBAI. 4. THE C I T 5. THE DR, A BENCH, ITAT, MUMBAI BY ORDER //TRUE COPY// (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL, MUMBAI