JIGNESH GIRISHBHAI BENGARI, MUMBAI V. ITO 22(1)(2), NAVI MUMBAI

ITA 4357/MUM/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 2997 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-06-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: J
• Next Hearing Date: 12-01-2016
• Assessment Year: 2006-2007
• Appeal Filed On: 20-06-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRAKASH PATHADE
• Assessee Lawyers: VIRENDRA JARIWALA
• Keywords: Peak credit

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH J, MUMBAI BEFORE SHRI G.S. PANNU, ACCOUNTANT MEMBER AND SHRI SANJAY GARG, JUDICIAL MEMBER ITA NO.4357/M/2014 ASSESSMENT YEAR: 2006-07 SHRI JIGNESH GIRISHBHAI BENGARI, 101, TANISHQ ANTHIA, CHITRANJAN NAGAR, RAJAWADI, GHATKOPAR (E), MUMBAI 400 077 PAN: AFFPB1952C VS. OFFICE OF THE ITO 22(1)(2), TOWER NO.6, 4 TH FLOOR, VASHI RAILWAY STATION COMPLEX, VASHI, NAVI MUMBAI 400 703 (APPELLANT) (RESPONDENT) PRESENT FOR: ASSESSEE BY : SHRI VIRENDRA JARIWALA, A.R. REVENUE BY : SHRI PRAKASH PATHADE, D.R. DATE OF HEARING : 21.06.2016 DATE OF PRONOUNCEMENT : 29.06.2016 O R D E R PER SANJAY GARG, JUDICIAL MEMBER: THE PRESENT APPEAL HAS BEEN PREFERRED BY THE ASSESS EE AGAINST THE ORDER DATED 28.03.2014 OF THE COMMISSIONER OF INCOME TAX (APPEALS) [(HEREINAFTER REFERRED TO AS THE CIT(A)] IN RELATION TO LEVY OF P ENALTY UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E WAS ENGAGED IN THE BUSINESS OF TRADING IN READY-MADE GARMENTS AND FILE D HIS RETURN OF INCOME DECLARING AN INCOME OF RS.99,791/- UNDER PRESUMPTIV E TAX AT SCHEME UNDER THE PROVISIONS OF SECTION 44AF OF THE ACT. DURING THE A SSESSMENT PROCEEDINGS THE ASSESSING OFFICER (HEREINAFTER REFERRED TO AS THE A O) FOUND THAT THE ASSESSEE HAD MADE SEVERAL DEPOSITS IN HIS BANK ACCOUNT WHICH IN TOTAL WERE MORE THAN RS.10 LAKHS. HE ACCORDINGLY MADE AN ADDITION OF RS. 9,27,000/- INTO THE INCOME OF THE ASSESSEE ON ACCOUNT OF UNEXPLAINED CASH DEPO SITED INTO HIS BANK ITA NO.4357/M/2014 SHRI JIGNESH GIRISHBHAI BENGARI 2 ACCOUNT. THE ASSESSEE UNSUCCESSFULLY CONTESTED THE APPEAL BEFORE THE LEARNED CIT(A) AND THE MATTER TRAVELLED TO THE TRIBUNAL. TH E TRIBUNAL IN THE QUANTUM APPEAL FOUND MERIT IN THE ARGUMENT OF THE ASSESSEE THAT THE ASSESSEE WAS A SMALL TRADER IN READY-MADE GARMENTS. THE ASSESSEE D EPOSITED INTO HIS BANK ACCOUNT THE AMOUNT REALIZED OUT OF CASH SALES AND A LSO MADE WITHDRAWALS FREQUENTLY THAT THE ONLY BASIS OF ADDITION WAS THE DEPOSIT OF CASH INTO BANK ACCOUNT OF THE ASSESSEE ON VARIOUS DATES. THE ASSES SEE HAD FILED THE RETURN OF INCOME UNDER THE PROVISIONS OF SECTION 44 AF OF THE ACT AND WAS NOT REQUIRED TO MAINTAIN BOOKS CORRECTION OF ACCOUNT AND THE TAX WAS PAYABLE ON PRESUMPTIVE BASIS AT THE RATE OF 8% OF THE TURNOVER . THE TRIBUNAL NOTED THAT THE SUBMISSIONS OF THE ASSESSEE IN THIS RESPECT WERE RE ASONABLE AND PLAUSIBLE. HOWEVER THE TRIBUNAL ACCEPTED THE ALTERNATE CONTENT ION OF THE AR THAT AT THE MOST THE ADDITIONS THE BASIS OF PEAK BALANCE IN THE BANK ACCOUNT COULD HAVE BEEN MADE. THE TRIBUNAL THEREFORE SUSTAINED THE ADD ITION TO THE EXTENT OF RS.177482/- ONLY. THE AO IN THE MEAN TIME INITIATED THE PENALTY PROCEEDINGS AND LEVIED THE PENALTY UNDER SECTION 271(1)(C) OF T HE ACT IN RESPECT OF THE ADDITION OF RS.9.27 LACS MADE BY HIM. THE LEARNER C IT(A) VIDE IMPUGNED ORDER HAS CONFIRMED THE PENALTY. BEING AGGRIEVED TH E ASSESSEE THUS HAS COME IN APPEAL BEFORE US. 3. WE HAVE HEARD THE RIVAL CONTENTIONS. WE FIND THA T IN THE QUANTUM APPEAL, THE TRIBUNAL HAS NOTED THAT THE EXPLANATION GIVEN BY THE ASSESSEE THAT HE IS SMALL TRADER AND THAT THE DEPOSITS WERE OUT O F THE AMOUNTS REALIZED OUT OF CASH SALES AND THERE WERE ALSO MADE WITHDRAWALS FRE QUENTLY WAS PLAUSIBLE AND REASONABLE. SINCE THE ASSESSEE HAS BEEN OFFERING HI S INCOME FOR TAXATION UNDER SECTION 44 AF OF THE ACT ON PRESUMPTIVE BASIS AND H E WAS NOT REQUIRED TO MAINTAIN THE BOOKS OF ACCOUNT, UNDER SUCH CIRCUMSTA NCES THE LEVY OF PENALTY BY THE ASSESSING OFFICER ON ACCOUNT OF SMALL DEPOSITS IN THE BANK ACCOUNT OF THE ASSESSEE WAS NOT JUSTIFIED AT ALL. WE THEREFORE DEL ETED THE PENALTY SO LEVIED BY THE ASSESSING OFFICER IN THIS CASE. ITA NO.4357/M/2014 SHRI JIGNESH GIRISHBHAI BENGARI 3 4. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS HER EBY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 29.06.2016. SD/- SD/- (G.S. PANNU) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 29.06.2016. * KISHORE, SR. P.S. COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT (A) CONCERNED, MUMBAI THE DR CONCERNED BENCH //TRUE COPY// [ BY ORD ER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.