SHASHIKANT CHIMANLAL BHAGAT, MUMBAI V. ITO WD 18(2)(3), MUMBAI

ITA 4262/MUM/2011

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 2875 (ITAT-MUMBAI)
• Duration Of Justice: 5 year(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-06-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 18-11-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 25-05-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: K MOHANDA S
• Keywords: Unexplained cash credit
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUMBAI BEFORE SHRI SANJAY ARORA, A M AND SHRI RAM LAL NEGI, JM ./ I.T.A. NO. 4262/MUM/2011 ( / ASSESSMENT YEAR: 2006 - 07 ) SHAHIKANT CHIMA NLAL BHAGAT, C/O. M/S. SURATWALA NAGINDAS AND CO., 12/13, PIR BAGDADI DARAGAH TRUST CHAWL, DR. D. SILVA ROAD, DADAR (W), MUMBAI - 400 028 / VS. ITO, WARD 18(2)(3), MUMBAI ./ ./ PAN/GIR NO. AAAPB 9713 D ( / APPELLAN T ) : ( / RESPONDENT ) / APPELLANT BY : MS. SNEHAL SHAH / RESPONDENT BY : SHRI K. MOHANDAS / DATE OF HEARING : 08.6.2016 / DATE OF PRONOUNCEMENT : 22 .6.2016 / O R D E R PER SANJAY ARORA, A. M.: THIS IS AN A PPEAL BY THE ASSESSEE DIRECTED AGAINST THE ORDER BY THE COMMISSIONER OF INCOME TAX (APPEALS) - 29 , MUMBAI (CIT(A) FOR SHORT) DATED 25.3.2011 , PARTLY ALLOWING THE A SSESSEES APPEAL CONTESTING ITS ASSESSMENT U/S.14 3(3) OF THE INCOME TAX ACT, 1961 (THE ACT HEREINAFTER) FOR THE ASSESSMENT YEAR (A.Y.) 2006 - 07 VIDE ORDER DATED 29.12.2008. 2. 1 THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE, AN INDIVIDUAL, WAS ENQUIRED ABOUT THE CREDIT OF RS.40 LACS IN HIS BANK ACC OUNT WITH SHAMRAO VITTAL CO - OP BANK, BANDRA , WHICH WAS IN FACT A JOINT BANK ACCOUNT WITH HIS WIFE, SMT. TARULATA BHAGAT. 2 ITA NO. 4262/MUM/2011 (A.Y. 2006 - 07) SHAHIKANT CHIMANLAL BHAGAT VS. ITO T HE AMOUNT HAD IN FACT BEEN UTILIZED FOR THE PURCHASE OF A PROPERTY FOR RS .40.25 LACS, WHICH WAS AGAIN IN THE JOINT NAMES OF THE ASSESS EE, HIS WIFE, AND HIS SON, NILESH BHAGAT, WHO (SON) HAD TRANSMITTED RS.12. 40 LACS TO THE ASSESSEE DURING THE YEAR FROM HIS BANK ACCOUNT. AS NILESH HAD NO CAPACITY TO LEND FUNDS , HAVING NO MINAL INCOME AT THE RELEVANT TIME, HIS ENTIRE C APITAL BEING LOCKED UP ON INVESTMENTS (REFER EX. 4) , WITH THE SUM TRANSFERRED TO THE ASSESSEE BEING RATHER EXPLAINED TO BE , IN TURN, COLLECTED IN CASH FROM AS MANY AS 51 PERSONS, THE SAME WAS ADDED IN THE ASSESSEES HANDS U/S. 68 AS UNEXPLAINED CREDIT . T HE ASSESSING OFFICER (A. O.) ALSO MADE AN ADDITION FOR THE ENTIRE SUM (OF RS.40 .25 LACS) AS UNEXPLAINED - AS TO ITS SOURCE, INVEST ED IN PROPERTY, U/S.69A. 2 . 2 IN APPEAL, THE LD. CIT(A) CONFIRMED THE ADDITION OF RS.12. 4 5 LACS TRANSFERRED/LENT BY NILESH (SON) FOR WANT OF A SATISF ACTORY EXPLANATION. THE SAID SUM, HOWEVER, HAVING BEEN UTILIZED BY THE ASSESSEE FOR PURCHASE OF PROPERTY, CREDIT FOR THE SAME WAS ALLOWED IN COMPUTING THE AMOUNT ASSESSABLE U/S.69A. THE ASSESSEE HAD AVAILED A HOME LOAN OF RS.20 LACS FROM ICICI B ANK, WHI CH WAS ALSO CONSIDERED AS EXPLAINED, SO THAT THE BALANCE RS .7.80 L ACS WAS CONFIRMED FOR ADDITION. AGGRIEVED, THE ASSESSEE IS IN SECOND APPEAL, CHALLENGING BOTH THE ADDITION S, I.E., FOR RS.12. 4 5 LACS (ADDED U/S. 68) AND RS .7.80 L ACS BROUGHT TO TAX U/S. 69A. 3 . BEFORE US, THOUGH THE ASSESSEE HAS CHALLENGED THE IMPUGNED ORDER QUA BOTH THE ADDITIONS, THE ONLY PLEA RAISED BY THE LD. A UTHORIZED REPRESENTATIVE (A R ) , THE ASSESSEES COUNSEL, ON BEING QUESTIONED BY THE BENCH AS TO WHAT INFIRMITY /S ATTEND S THE SAID O RDER, WAS THAT THE PROPERTY BEING IN THE JOINT NAMES (OF THE ASSESSEE, HIS WIFE AND SON) , ONLY THE ASSESSEES SHARE ( AT 1/3 RD ) IN THE PROPERTY COULD BE BROUGHT TO TAX IN HIS HANDS. THE ADDITION IN RESPECT OF THE SHARE IN THE PROPERTY OF THE ASSE SSEES WIFE AND SON COULD NOT POSSIBLY BE ASSESSED IN THE ASSESSEES HANDS. THE LD. D EPARTMENTAL REPRESENTATIVE (D R ) , ON THE OTHER HAND, RELIED ON THE ORDERS BY THE AUTHORITIES BELOW. 3 ITA NO. 4262/MUM/2011 (A.Y. 2006 - 07) SHAHIKANT CHIMANLAL BHAGAT VS. ITO 4 . WE HAVE HEARD THE PARTIES, AND PERUSED THE MATERIAL ON RECORD. THE PLEA RAISED BY THE ASSESSEE IS INCONSISTE NT WITH AND CONTRARY TO THE RECORD. F IRSTLY, THE INCOME - TAX LAW IS NOT CONCERNED WITH THE TITULAR OWNERSHIP BUT WITH THE BENEFICIAL OWNERSHIP ONLY . THEN, AGAIN, THE ASSESSEE HAS BEEN QUESTIONED ONLY IN RESPECT OF T HE S U M (RS.40 .25 LACS) INVESTED IN THE PROPERTY FROM HIS BANK ACCOUNT. THE OWNERSHIP OF PROPERTY IN CASE OF CO - OWNERS , WHOSE SHARES ARE NOT SPECIFIED , IS , IN TERMS OF THE T RANSFER OF THE P ROPERTY ACT (S. 45) , IN THE RATIO OF THE INVESTMENT MADE BY THEM . IT IS NOT THE OWNERSHIP, BU T THE SOURCE OF THE INVESTMENT , AS MADE, WHE THER CONSISTENT WITH OR IN EXCESS OF ONE S SHARE , W HICH A PERSON IS CALLED UPON TO EXPLAIN UNDER THE ACT . THERE IS NO INDICATION THAT THE AMOUNT OF RS.12. 40 LACS ADVANCED BY NILESH BHAGAT WAS NOT TO THE ASSESSEE ALONE BUT ALSO EQUALLY TO HIS WIFE, THE OTHER JOINT BANK ACCOUNT HOLDER. WHY, RATHER, WOULD HE ADVANCE THE AMOUNT IF HE HIMSELF HAD A N EQUITABLE IN TEREST IN THE PROPERTY ? THE HOME LOAN IS ALSO ONLY TO THE ASSESSEE ( EX. 8 ) , SUGGESTI NG OF HIM TO HAVE AN EXCLUSIVE INTEREST IN THE PROPERTY. T O US IT IS CLEAR THAT FUNDS THAT HAVE BEEN GARNERED FROM ALL AND SUNDRY , CHANNELIZ ING FUNDS THROUGH H IS (SON S) BANK ACCOUNT AS WELL . THE FACT THAT THE AMOUNT ADVANCED TO THE ASSESSEE MAY ALSO HAVE BEEN A SSESSED IN THE HANDS OF THE LENDER ON PROTECTIVE BASIS, I.E., BEING UNEXPLAINED - AS TO ITS SOURC E , CREDIT / S IN HIS BOOKS OF ACCOUNT, IS OF LITTLE MOMENT. CLEARLY, THE REVENUE CA N COLLECT TAX ONLY FROM ONE, AND THE LIABILITY ON THE PROTECTIVE ASSESSEE CAN BE INVOKED ONLY WHERE SUBSTANTIVE ASSESSMENT FAILS. UNDER THE CIRCUMSTANCES, AND I N VIEW OF THE FOREGOING, WE FIND NO MERIT IN THE ASSESSEES CASE. WE HAVE ALREADY STATED TO HAVE FOUND NO INFIRMITY IN THE IMPUGNED ORDER, NOR HAS ANY BEEN BROUGHT TO OUR NO TICE . WE, ACCORDINGLY, FINDING THE SAME AS REASONABLE AND IN ACCORDANCE WITH LAW, DECLINE INTERFERENCE. WE DECIDE ACCORDINGLY . 5 . IN THE RESULT, THE ASSESSEES APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON JUNE 22 , 201 6 4 ITA NO. 4262/MUM/2011 (A.Y. 2006 - 07) SHAHIKANT CHIMANLAL BHAGAT VS. ITO SD/ - SD/ - ( RAM LAL NEGI ) (S ANJAY ARORA) / J UDICIAL MEMBER / A CCOUNTANT MEMBER MUMBAI ; DATED : 22 . 0 6 .201 6 . . ./ ROSHANI , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. ( ) / THE CIT(A) 4. / CIT - CONCERNED 5. , , / DR, ITAT, MUMBAI 6. / GUARD F ILE / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI