CHINTAN C. SHAH, MUMBAI V. ITO 23(2)(2), MUMBAI

ITA 4315/MUM/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 2987 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-06-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 2010-2011
• Appeal Filed On: 18-06-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: RADHA KATYAL NARANGDR
• Assessee Lawyers: BHADRESH JOSHIAR
• Keywords: Accommodation entries
• Section: 144

Judgement Text

4315/M/14-CHINTAN 1 INCOME-TAX APPELLATE TRIBUNAL CBENCH M UMBAI , , BEFORE S/SH. RAJENDRA,ACCO UNTANT MEMBER & PAWAN SINGH, JUDICIAL MEMBER ./I.T.A./4315/MUM/2014 , /ASSESSMENT YEAR: 2010-11 CHINTAN C. SHAH 504, SHITAL APT. D/2, SARVODAY NAGAR, MULUND (W) MUMBAI-400 080. PAN:AADPS 3188 E VS. INCOME TAX OFFICER, WARD 23(2)(2) PRATYAKSHAKAR BHAVAN, BANDRA KURLA COMPLEX-BANDRA(E) MUMBAI-51. ( /APPELLANT ) ( / RESPONDENT ) REVENUE BY: MS. RADHA KATYAL NARANG-DR ASSESSEE BY: SHRI BHADRESH JOSHI-AR / DATE OF HEARING: 29.06.2016 / DATE OF PRONOUNCEMENT: 29.06.2016 ,1961 254(1) ORDER U/S.254(1)OF THE INCOME-TAX ACT,1961(ACT) PER RAJENDRA, AM - CHALLENGING THE ORDER OF THE CIT (A)-33,MUMBAI THE ASSESSEE HAS FILED THE PRESENT APPEAL. ASSESSEE,AN INDIVIDUAL,FILED HIS RETURN OF INCOME O N 28/03/2012,DECLARING AN INCOME OF RS. 1.14 LAKHS.THE ASSESSING OFFICER (AO) COMPLETED THE ASSE SSMENT UNDER SECTION 144 OF THE ACT, ON 21/01/2013,DETERMINING THE INCOME OF THE ASSESSEE A T RS. 72.44 LAKHS. 2. EFFECTIVE GROUND OF APPEAL IS ABOUT ADDITION OF RS. 71.29 LAKHS.DURING THE ASSESSMENT PROCEEDINGS THE AO FOUND THAT A SUM OF RS.71,29,600 /-WAS CREDITED IN THE BANK ACCOUNT MAIN - TAINED BY HIM WITH THE SARASWAT BANK,MULUND.HE DIRE CTED THE ASSESSEE TO EXPLAIN AS TO WHY THE SAID SOME SHOULD NOT BE TREATED AS INCOME FOR THE Y EAR UNDER CONSIDERATION. AS PER THE AO, THE ASSESSEE DID NOT FILE ANY DOCUMENTARY EVIDENCE IN T HAT REGARD.THE AO, THEREFORE, ADDED THE ENTIRE SUM TO THE INCOME OF THE ASSESSEE. 3 .AGGRIEVED BY THE ORDER OF THE YEAR, THE ASSESSEE P REFERRED AN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY (FAA).BEFORE HIM,IT WAS ARGUED THAT THE A O HAD ADDED THE ENTIRE AMOUNT OF CASH DEPOSITS AS INCOME OF THE ASSESSEE,THAT HE HAD MERE LY CONSIDERED THE DEPOSIT SITE OF THE BANK ACCOUNT,THAT HE COMPLETELY IGNORED THE WITHDRAWAL S IDE OF THE SAME BANK ACCOUNT, THAT THE ASSESSEE HAD RECEIVED THE CASH FROM VARIOUS PARTIES TO WHOM HE HAD ISSUED THE CHEQUES OF THE DESIRED AMOUNT,THAT THE CASH RECEIVED FROM THOSE PA RTIES WERE DEPOSITED INTO THE SAVINGS BANK 4315/M/14-CHINTAN 2 ACCOUNT TO ENSURE THAT THE CHEQUES COULD BE ISSUED TO THE PARTIES CONCERNED. THE ASSESSEE ENCLOSED COPIES OF THE STATEMENT OF SAVINGS BANK AC COUNT ALONG WITH A CHART COMPARING THE CASH DEPOSITS AND ISSUANCE OF CHEQUES AGAINST SUCH CASH DEPOSITS.IT WAS FURTHER ARGUED THAT THE CHEQUES ISSUED BY THE ASSESSEE WERE CLEARED IMMEDIA TELY AFTER THE DEPOSIT OF CASH OF THE MORE OR LESS OF THE SAME AMOUNTS,THAT THE DETAILS OF BENEFI CIARIES TO HOME THE CHEQUES WERE ISSUED DELIVER RELEVANT YEAR HAD BEEN PREPARED,THAT THE ASSESSEE W AS ENGAGED IN PROVIDING ACCOMMODATION ENTRIES WHEREBY THE CASH WAS TAKEN FROM THE PARTIES AND CHEQUES WERE ISSUED TO THEM, THAT BY NO STRETCH OF IMAGINATION THE CASH DEPOSITED INTO THE SAVINGS BANK ACCOUNT COULD BE CONSIDERED AS INCOME OF THE ASSESSEE,THAT ADDITION COULD BE MADE ON ACCOUNT OF THE COMMISSION IN THE RANGE OF 0.5% TO 2% FOR DOING SUCH KIND OF ACTIVITY,THAT THE AO SHOULD HAVE TAKEN THE PEAK OF THE AMOUNT IS CASH CREDIT FOR THE YEAR UNDER APPEAL. THE ASSES SEE RELIED UPON THE CASES OF JAYESH V MEHTA (ITA/5142/MUM/2009-DATED29/06/2012),JITENDRA M DOSH I(ITA/3310/MUM/ 2011-29/08/2012). 4. AFTER CONSIDERING THE SUBMISSION OF THE ASSESSEE AN D THE DOCUMENTS FILED BY HIM, THE FAA FORWARDED THE PAPERS TO THE AO,AS THE ORDER WAS PAS SED UNDER SECTION 144 OF THE ACT. THE AO SUBMITTED HIS REMAND REPORT ON 19/12/2013.THE FAA H ELD THAT THE ASSESSEE CLAIMED THAT HE WAS ENGAGED IN PROVIDING ACCOMMODATION ENTRIES, THAT DU RING THE REMAND PROCEEDINGS THE AO HAD ASKED THE ASSESSEE TO GIVE THE NAMES AND ADDRESSES OF THE PARTIES ALONG WITH THEIR PANS, THAT DESPITE THE OPPORTUNITIES GIVEN BY THE AO THE ASSES SEE DID NOT PRODUCE THE NAMES AND ADDRESSES OF THE PARTIES CONCERNED FROM WHOM THE ASSESSEE HA D CLAIMED TO HAVE RECEIVED CASH, THAT IT WAS SURPRISING TO NOTE THAT HE WAS NOT HAVING THE ADDRE SSES OF THE PARTIES TO WHOM HE HAD ISSUED THE CHEQUES,THAT THE CASES RELIED UPON BY THE ASSESSEE WERE DISTINGUISHABLE ON FACTS. FINALLY, THE FAA UPHELD THE ORDER OF THE AO. 5. DURING THE COURSE OF HEARING BEFORE US,THE AUTHORIS ED REPRESENTATIVE(AR) REFERRED TO THE OF SAVINGS BANK ACCOUNT WHERE THE CASH WAS DEPOSITED B Y THE ASSESSEE AND CONTENDED THAT THE ASSESSEE WAS PROVIDING ACCOMMODATION ENTRIES,THAT H E WAS RECEIVING THE CASH FROM VARIOUS PARTIES AND WAS ISSUING THE CHEQUES IN LIEU OF THE CASH RECEIVED, THAT HE WAS EARNING SMALL COMMISSION, THAT THERE WAS DIRECTLY LINKED BETWEEN THE CASH DEPOSITED AND THE CHEQUES ISSUED, THAT THE PEAK AMOUNT OF THE DEPOSITS SHOULD HAVE BE EN TAKEN BY THE AO. THE DEPARTMENTAL 4315/M/14-CHINTAN 3 REPRESENTATIVE ARGUED THAT THE ASSESSEE HAD NOT FUR NISHED INFORMATION ABOUT THE PERSONS FROM WHOM HE HAD RECEIVED THE CASH, THAT THE AO WERE JUS TIFIED IN MAKING THE ADDITION. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL BEFORE US. WE FIND THAT THE ASSESSEE WAS PROVIDING ACCOMMODATION ENTRIES, THAT IN HIS BANK ACCOUNT CASH DEPOSITS OF FOLLOWED BY ISSUE OF CHEQUES,THAT THERE IS DIRECT R ELATION BETWEEN THE CASH DEPOSITED AND CHEQUES ISSUED,THAT HE HAD NOT PROVIDED THE DETAILS OF THE PERSONS WHO HAD GIVEN HIM CASH TO ISSUE CHEQUS IN THEIR FAVOUR, THAT THE AO HAD ALSO NOT MADE ANY ENQUIRY IN THAT REGARD, THAT THE DETAILS OF CHECK ISSUE WERE AVAILABLE WITH THE AO. IN OUR OPINION IN SUCH CASES THE PEAK AMOUNT HAS TO BE CONSIDERED FOR MAKING ADDITION TO THE INCOME OF THE ASSESSEE. IT IS ALSO A FACT THAT THE ACCOMMODATION ENTRY PROVIDERS CHARGES CERTAIN COMMI SSION.THEREFORE, COMMISSION AT THE RATE OF 2% OF THE CHEQUES ISSUED SHOULD ALSO BE ADDED TO TH E INCOME OF THE ASSESSEE. IN SHORT, WE ARE OF THE OPINION THAT ADDITION SHOULD BE RESTRICTED TO T HE PEAK AMOUNT OF THE BANK ACCOUNT AND 2% OF THE CHEQUES ISSUED BY THE ASSESSEE. EFFECTIVE GROUN D OF APPEAL RAISED BY THE ASSESSEE, IS DECIDED IN HIS FAVOUR,IN PART. AS A RESULT, APPEAL FILED BY THE ASSESSEE STANDS PA RTLY ALLOWED. . ORDER PRONOUNCED IN THE OPEN COURT ON 29 TH ,JUNE, 2016. 29 , 2016 SD/- SD/- ( /PAWANSINGH) ( / RAJENDRA) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED :29.06.2016. JV.SR.PS. / COPY OF THE ORDER FORWARDED TO : 1. APPELLANT / 2. RESPONDENT / 3. THE CONCERNED CIT(A)/ , 4. THE CONCERNED CIT / 5. DR G BENCH, ITAT, MUMBAI / , , . . 6. GUARD FILE/ //TRUE COPY// / BY ORDER, / DY./ASST. REGISTRAR , /ITAT, MUMBAI.