DCIT CEN CIR-2, MUMBAI V. MINESH D. SHAH, MUMBAI

ITA 4363/MUM/2010

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 3817 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 10 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-04-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: H
• Next Hearing Date: 27-02-2013
• Assessment Year: 2004-2005
• Appeal Filed On: 26-05-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K C P PATNAIK
• Assessee Lawyers: V H JARIWALA
• Keywords: Search and seizure; Salary income; Additional evidence
• Section: 143(3); 153A; 131; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL H BENCH, MUMBAI .. , ! '#$ % % % % &'. '.(.. %) * '#$ '+ BEFORE SHRI P.M. JAGTAP, AM AND DR. S.T.M. PAVALAN, JM './ I.T.A. NO. 4363 & 4364/MUM/2010 ( *) - %.- *) - %.- *) - %.- *) - %.- / / / / ASSESSMENT YEARS : 2004-05 & 2006-07) DY. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 2, OLD C.G.O. BUILDING ANNEXE, 9 TH FLOOR, M.K. ROAD, MUMBAI 400 020. ) ) ) ) / VS. MR. MINESH D. SHAH, 16, SARASWATI BHAVAN, 6, BENHAM HALL, CROSS LANE, MUMBAI 400 004. $/ ! './ PAN : AAFPS1834 H ( /0 / // / APPELLANT ) .. ( 12/0 / RESPONDENT ) /0 3 4 ' / APPELLANT BY : SHRI K.C.P. PATNAIK 12/0 3 4 ' / RESPONDENT BY : SHRI V.H. JARIWALA ')% 3 ! / // / DATE OF HEARING : 27-02-2013 56. 3 ! / DATE OF PRONOUNCEMENT : 10-04-2013 # 7 / O R D E R PER P.M. JAGTAP, A.M . : THESE TWO APPEALS PREFERRED BY THE REVENUE AGAINST TWO SEPARATE ORDERS PASSED BY THE LD. CIT(A) 36, MUMBAI BOTH D ATED 29-3-2010 FOR ASSESSMENT YEARS 2004-05 & 2006-07 INVOLVE A COMMON ISSUE RELATING TO THE ADDITIONS MADE BY THE A.O. ON ACCOUNT OF CREDITS AP PEARING IN THE BANK ACCOUNT MAINTAINED IN THE NAME OF THE ASSESSEE WHIC H HAVE BEEN DELETED BY THE LD. CIT(A) AND THE SAME THEREFORE HAVE BEEN HEA RD TOGETHER AND ARE BEING DISPOSED OF BY THIS SINGLE CONSOLIDATED ORDER FOR T HE SAKE OF CONVENIENCE. ITA 4363/MUM/2010 & I TA 4364/MUM/2010 2 2. THE ASSESSEE IN THE PRESENT CASE IS AN INDIVIDUA L WHO DERIVES INCOME FROM SALARY, INTEREST FROM M/S DELUXE KAARAN IMPORT S PVT. LTD. AND INCOME FROM OTHER SOURCES. A SEARCH AND SEIZURE ACTION U/ S 132 OF THE INCOME TAX ACT, 1961 (THE ACT) WAS CONDUCTED IN THE CASES BELO NGING TO M/S DELUXE KAARAN GROUP INCLUDING THE CASE OF THE ASSESSEE ON 23-8-2006. PURSUANT TO THE SAID ACTION, A NOTICE U/S 153A OF THE ACT WAS I SSUED BY THE A.O. ON 20-7- 2007 IN RESPONSE TO WHICH RETURNS OF INCOME FOR ASS ESSMENT YEARS 2004-05 & 2006-07 WERE FILED BY THE ASSESSEE DECLARING TOTAL INCOME OF RS. 4,52,320/- AND RS. 1,63,46,940/- RESPECTIVELY. DURING THE COU RSE OF POST SEARCH INVESTIGATION, IT WAS FOUND THAT THERE WERE CERTAIN CONCERNS WHO ARE INDULGING IN ISSUING CHEQUES TO VARIOUS PARTIES AFTER DEPOSIT ING EQUIVALENT AMOUNTS IN CASH IN THEIR BANK ACCOUNT. ONE OF SUCH CONCERNS W AS M/S SONIYA SALES CORPORATION, PROPRIETOR BHADRESH C. MASRANI WHICH H AD ISSUED CERTAIN CHEQUES IN THE NAME OF THE ASSESSEE. IT WAS ALSO F OUND THAT THE SAID CHEQUES WERE DEPOSITED IN THE SB A/C NO. 1181 MAINTAINED IN THE NAME OF THE ASSESSEE WITH THE FORT BRANCH OF BANK OF INDIA. WH EN THIS INFORMATION WAS CONFRONTED BY THE A.O. TO THE ASSESSEE, THE LATER D ENIED OF HAVING MAINTAINED ANY BANK ACCOUNT WITH BANK OF INDIA, FORT BRANCH OR HAVING RECEIVED ANY ADVANCE FROM M/S SONIYA SALES CORPORATION. AFFIDAV IT TO THIS EFFECT WAS ALSO FILED BY THE ASSESSEE BEFORE THE A.O. THEREAFTER, THE A.O. OBTAINED THE COPY OF STATEMENT OF SB A/C NO. 1181 FROM BANK OF INDIA, FO RT BRANCH WHICH REVEALED THAT THE SAID ACCOUNT WAS OPERATED DURING THE PERIO D 11-11-2003 TO 1-2-2006 AND CREDIT ENTRIES AGGREGATING TO RS. 1,50,87,335/- AND RS. 6,96,673/- WERE APPEARING THEREIN DURING THE PREVIOUS YEARS RELEVAN T TO ASSESSMENT YEARS 2004-05 AND 2006-07 RESPECTIVELY. THE ASSESSEE, HO WEVER, AGAIN DENIED OF HAVING MAINTAINED THE SAID ACCOUNT AND RELIED ON TH E AFFIDAVIT FILED IN THIS CONTEXT. THE A.O. DID NOT GIVE ANY EVIDENTIARY VAL UE TO THE AFFIDAVIT FILED BY THE ASSESSEE TERMING IT AS ONLY A SELF SERVING EVID ENCE. HE NOTED THAT THE CONCERNED PARTIES INCLUDING ESPECIALLY M/S SONIYA S ALES CORPORATION WERE ITA 4363/MUM/2010 & I TA 4364/MUM/2010 3 HAVING REGULAR DEALINGS WITH M/S DELUXE KAARAN IMPO RTS PVT. LTD. WHEREIN THE ASSESSEE WAS A DIRECTOR. SINCE THE BANK ACCOUNT MAINTAINED WITH BANK OF INDIA, FORT BRANCH WAS NOT DISCLOSED BY THE ASSESSE E AND THERE WAS ALSO FAILURE ON THE PART OF THE ASSESSEE TO SATISFACTORI LY EXPLAIN THE SOURCE OF DEPOSITS MADE IN THE SAID ACCOUNT, THE A.O. TREATED THE SAID DEPOSITS AMOUNTING TO RS. 1,50,87,335/- AND RS. 6,96,673/- M ADE IN ASSESSMENT YEARS 2004-05 & 2006-07 AS UNDISCLOSED INCOME OF TH E ASSESSEE AND ADDED THE SAME TO THE TOTAL INCOME OF THE ASSESSEE IN THE ASSESSMENTS COMPLETED U/S 153A R.W.S. 143(3) OF THE ACT. 3. AGAINST THE ORDERS PASSED BY THE A.O. U/S 153A R .W.S. 143(3) OF THE ACT FOR ASSESSMENT YEARS 2004-05 & 2006-07, APPEALS WER E PREFERRED BY THE ASSESSEE BEFORE THE LD. CIT(A). BEFORE THE LD. CIT (A), IT WAS REITERATED BY THE ASSESSEE THAT HE DID NOT MAINTAIN ANY BANK ACCOUNT WITH BANK OF INDIA, FORT BRANCH. IN SUPPORT OF THIS STAND, AFFIDAVIT OF SHRI BHADRESH MASRANI, PROPRIETOR OF SONIYA SALES CORPORATION WAS ALSO FIL ED BY THE ASSESSEE AS ADDITIONAL EVIDENCE WHEREIN IT WAS STATED BY SHRI B HADRESH MASRANI THAT HE NEVER HAD ANY BUSINESS, FINANCE OR ACCOMMODATION TR ANSACTIONS WITH THE ASSESSEE AND THE ASSESSEE WAS NOT CONCERNED WITH TH E TRANSACTIONS INVOLVING CREDIT ENTRIES EMANATING FROM THE ACCOUNT OF M/S SO NIYA SALES CORPORATION. THE SAID ADDITIONAL EVIDENCE FILED BY THE ASSESSEE WAS FORWARDED BY THE LD. CIT(A) TO THE A.O. FOR HER COMMENTS. THE A.O. ACCOR DINGLY OFFERED HER COMMENTS IN THE REMAND REPORT SUBMITTED TO THE LD. CIT(A) WHEREIN SHE OBJECTED TO THE ADMISSION OF ADDITIONAL EVIDENCE ON THE GROUND THAT THERE WERE NO CIRCUMSTANCES EXPLAINED BY THE ASSESSEE WHI CH PREVENTED HIM FROM FILING THE AFFIDAVIT OF SHRI BHADRESH MASRANI DURIN G THE COURSE OF ASSESSMENT PROCEEDINGS. SHE ALSO POINTED OUT CERTAIN DISCREPA NCIES IN THE AFFIDAVIT OF SHRI BHADRESH MASRANI FILED BY THE ASSESSEE AS ADDI TIONAL EVIDENCE. WHEN THIS REMAND REPORT WAS CONFRONTED BY THE LD. CIT(A) TO THE ASSESSEE, THE LATER OFFERED HIS COUNTER COMMENTS VIDE LETTER DTD. 8-3-2 010 WHICH WERE AS UNDER:- ITA 4363/MUM/2010 & I TA 4364/MUM/2010 4 BHADRESH MASRANI IS A KNOWN OFFENDER OF SALES TAX AND THERE ARE PROCEEDINGS GOING ON AGAINST HIM FOR ISSUING BOGUS C FORMS AND SELLING MATERIAL OUTSIDE BOOKS AND OPERATING BOGUS BANK ACCOUNTS. IN SUPPORT OF THE SAME THE APPELLANT HAS FILED COPIES OF THE COURT CASE GOING ON AGAINST BHADRESH MASRANI WHO WAS ARRESTED FOR OPERATING BOGUS COMPANY AND BANK ACCOUNT AND SELLING WHITE KE ROSENE ILLEGALLY. THE APPELLANT HAD FILED A POLICE COMPLAINT AGAINS T SHRI BHADRESH MASRANI FOR FRAUDULENTLY OPENING AND OPERATING BANK ACCOUNT IN THE NAME OF THE APPELLANT. THE APPELLANT ALSO FILED COPY O THE PAN CARD OF S HRI BHADRESH MASRANI TO PROVE HIS IDENTITY. THE APPELLANT AGAIN DENIED THAT THE SAID ACCOUNT WAS OWNED AND OPERATED BY HIM. THEREAFTER VIDE LETTER DTD. 11-3-2010, THE ASSESSEE FILED ANOTHER AFFIDAVIT OF SHRI CHETAN THAKKAR AS ADDITIONAL EVIDENCE WHEREIN THE SAID DEPONENT ACCEPTED OF HAVING OPENED AND OPERATED SB A/C NO. 1 181 WITH BANK OF INDIA, FORT BRANCH IN THE NAME OF THE ASSESSEE. HE ALSO O WNED ALL THE TRANSACTIONS REFLECTED IN THE SAID ACCOUNT. WHEN THIS ADDITIONA L EVIDENCE WAS FORWARDED BY THE LD. CIT(A) TO THE A.O., THE LATER AGAIN OBJE CTED TO THE ADMISSION THEREOF. SHE, HOWEVER, RECORDED THE STATEMENTS OF SHRI CHETA N THAKKAR AND SHRI BHADRESH MASRANI ON 12-3-2010. THE STATEMENT OF SHR I CHETAN THAKKAR REVEALED THE FOLLOWING POINTS:- 1. THE ACCOUNT NO 1181 WITH BANK OF INDIA, FORT BR ANCH WAS OPENED AND OPERATED BY HIM IN THE NAME OF THE APPE LLANT. 2. HE HAD OPENED THE ACCOUNT AND OPERATED IT FOR KE EPING HIS OWN UNACCOUNTED MONEY AND TO EARN INTEREST ON THE SAME. 3. THE REASON FOR OPENING THE ACCOUNT AT FORT INSPI TE OF HIS STAYING IN VASAI WAS THAT MOST OF HIS UNACCOUNTED DEALINGS WHE RE IN THAT AREA. 4. HE WAS AWARE THAT IT IS A CRIMINAL AND ILLEGAL T O OPEN AND OPERATE AN ACCOUNT IN SOME OTHER NAME. HE WAS ALSO AWARE THAT THE DEPARTMENT CAN PROCEED AGAINST HIM FOR RECOVERING TAX ON SUCH DEPOSITS. 5. HE WAS GENERALLY DEPOSITING CASH OR PAY ORDERS I N THIS ACCOUNT. ITA 4363/MUM/2010 & I TA 4364/MUM/2010 5 6. HE ADMITTED IT WAS HIS MISTAKE TO OPEN AND OPERA TE AN ACCOUNT IN SOME OTHER NAME. WHEN THE STATEMENT OF SHRI CHETAN THAKKAR AND SHRI BHADRESH MASRANI RECORDED BY THE A.O. WERE CONFRONTED BY THE LD. CIT (A) TO THE ASSESSEE, THE LATER POINTED OUT THAT IT WAS ADMITTED BY SHRI CHET AN THAKKAR IN HIS STATEMENT THAT HE ONLY WAS RESPONSIBLE FOR OPENING AND OPERATING THE ACCOUNT WITH BANK OF INDIA, FORT BRANCH IN THE NAME OF THE ASSESSEE. IT WAS ALSO POINTED OUT THAT IN HIS STATEMENT SHRI BHADRESH MAS RANI HAD ALSO CONFIRMED OF HAVING ISSUED THE PAY ORDERS IN THE NAME OF THE ASSESSEE AT THE BEHEST OF SHRI CHETAN THAKKAR AFTER RECEIVING CASH FROM HIM. IT WAS CONTENDED BY THE ASSESSEE THAT THESE STATEMENTS THEREFORE CONSTITUTE D VITAL EVIDENCE AND THE SAME SHOULD BE ADMITTED IGNORING THE OBJECTION OF T HE A.O. 4. AFTER CONSIDERING THE SUBMISSIONS MADE ON BEHALF OF THE ASSESSEE AS WELL AS THE MATERIAL AVAILABLE ON RECORD INCLUDING THE REMAND REPORT SUBMITTED BY THE A.O., THE LD. CIT(A) FIRST PROCEED ED TO EXAMINE THE ISSUE OF ADMISSION OF ADDITIONAL EVIDENCE IN THE FORM OF AFF IDAVIT OF SHRI CHETAN THAKKAR AND SHRI BHADRESH MASRANI. IN THIS REGARD HE NOTED THAT THE COPY OF THE ACCOUNT WITH BANK OF INDIA, FORT BRANCH WAS OBT AINED BY THE A.O. VIDE SUMMON ISSUED U/S 131ON 18-12-2008 WHEREAS THE ASSE SSMENT ORDER WAS PASSED BY HER ON 30-12-2008. THE LD. CIT(A) HELD T HAT ALTHOUGH THE ASSESSEE DENIED OF HAVING MAINTAINED ANY ACCOUNT WITH BANK O F INDIA, FORT BRANCH, SUFFICIENT TIME WAS NOT AVAILABLE TO HIM TO TRACE A ND PRESENT THE PERSON BEFORE THE DEPARTMENT SO THAT TRUE AND CORRECT PICTURE OF THE ENTIRE TRANSACTIONS COULD EMERGE. HE ALSO HELD THAT THE ADDITIONAL EVID ENCE FILED BY THE ASSESSEE IN THE FORM OF AFFIDAVITS OF SHRI CHETAN THAKKAR AN D SHRI BHADRESH MASRANI WAS VERY MUCH RELEVANT IN THIS REGARD TO CORROBORAT E THE STAND TAKEN BY THE ASSESSEE THAT THE ACCOUNT WITH BANK OF INDIA, FOR B RANCH DID NOT BELONG TO HIM AND THE SAME BEING A VITAL EVIDENCE TO ADJUDICA TE UPON THE ISSUE INVOLVED IN THE APPEAL OF THE ASSESSEE SHOULD BE ADMITTED AS PER RULE 46-A OF THE ITA 4363/MUM/2010 & I TA 4364/MUM/2010 6 INCOME TAX RULES, 1962. HE ALSO HELD THAT SUFFICIE NT OPPORTUNITY WAS GIVEN TO THE A.O. TO VERIFY THE SAID ADDITIONAL EVIDENCE AND TO OFFER HER COMMENTS THEREON AS REQUIRED BY RULE 46A. HE THEREFORE ADMIT TED THE ADDITIONAL EVIDENCE FILED BY THE ASSESSEE AND PROCEEDED TO DEC IDE THE ISSUE RELATING TO THE ADDITIONS MADE BY THE A.O. TO THE TOTAL INCOME OF THE ASSESSEE ON ACCOUNT OF CREDIT ENTRIES APPEARING IN THE ACCOUNT IN BANK OF INDIA, FORT BRANCH ON MERITS. 5. ON MERITS, THE LD. CIT(A) FOUND THAT THE STATEME NTS OF SHRI CHETAN THAKKAR AND SHRI BHADRESH MASRANI RECORDED BY THE A .O. DURING THE COURSE OF REMAND PROCEEDINGS WERE SUFFICIENT TO SHOW THAT THE ACCOUNT WITH BANK OF INDIA, FORT BRANCH IN THE NAME OF THE ASSESSEE WAS OPENED AND OPERATED BY SHRI CHETAN THAKKAR. THE SAID PERSON HAD ALSO ADMI TTED IN HIS STATEMENT THAT THE PAY ORDERS DEPOSITED IN THE SAID ACCOUNT W ERE OBTAINED FROM SHRI BHADRESH MASRANI AFTER GIVING HIM CASH. THIS STATEM ENT OF SHRI CHETAN THAKKAR WAS ALSO CONFIRMED BY SHRI BHADRESH MASRANI IN HIS STATEMENT RECORDED BY THE A.O. THE LD. CIT(A) HELD THAT THE STATEMENTS OF THESE TWO PERSONS THUS CONFIRMED AND CORROBORATED THE STAND O F THE ASSESSEE THAT THE ACCOUNT OPENED AND MAINTAINED IN HIS NAME DID NOT B ELONG TO THE ASSESSEE AND THE ADDITIONS MADE BY THE A.O. ON ACCOUNT OF CR EDIT ENTRIES APPEARING IN THE SAID ACCOUNT TO THE TOTAL INCOME OF THE ASSESSE E WERE NOT JUSTIFIED. ACCORDINGLY, THE LD. CIT(A) DELETED THE SAID ADDITI ONS AND DIRECTED THE A.O. TO TAKE NECESSARY STEP TO INFORM ABOUT THE SAID BANK ACCOUNT AND THE TRANSACTIONS REFLECTED THERE TO THE CONCERNED ASSES SING OFFICERS OF SHRI CHETAN THAKKAR AND SHRI BHADRESH MASRANI. AGGRIEVE D BY THE ORDER OF THE LD. CIT(A) GIVING RELIEF TO THE ASSESSEE ON THIS IS SUE, THE REVENUE HAS PREFERRED THESE APPEALS BEFORE THE TRIBUNAL ON THE FOLLOWING GROUNDS WHICH ARE IDENTICAL IN BOTH THE ASSESSMENT YEARS 2004-05 & 20 06-07 WITH DIFFERENCE IN THE AMOUNT OF ADDITION:- ITA 4363/MUM/2010 & I TA 4364/MUM/2010 7 GROUNDS OF APPEAL FOR A.Y. 2004-05 1. (A) ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE AND IN LAW, THE LD. CIT(A) ERRED IN DELETING THE ADDITIONS OF R S.1.50 CRORES MADE BY THE A.O. ON ACCOUNT OF UNDISCLOSED INCOME IN RESPEC T OF CREDIT ENTRIES IN THE BANK ACCOUNT OF THE ASSESSEE. (B) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. CIT(A) ERRED IN ADMITTING ADDITIONAL EVIDEN CE SUBMITTED BY THE ASSESSEE EVEN THOUGH THE SAME WAS OPPOSED BY THE A. O. IN HIS REMAND REPORT. (C) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW, THE LD. CIT(A) ERRED IN CONSIDERING ONLY THOSE ASPE CT OF THE ADDITIONAL EVIDENCE WHICH WAS FAVOURABLE TO THE ASSESSEE, WITH OUT CONSIDERING THE EVIDENCE IN ITS ENTIRETY AND THE REPORTS SUBMITTED BY THE A.O. FROM TIME TO TIME. 2. THE APPELLANT PRAYS THAT THE ORDER OF CIT(A) ON THE ABOVE GROUND BE SET ASIDE AND THAT OF THE ASSESSING OFFICER BE R ESTORED. GROUNDS OF APPEAL FOR A.Y. 2006-07 1. (A) ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE AND IN LAW, THE LD. CIT(A) ERRED IN DELETING THE ADDITIONS OF R S.7 LAKHS MADE BY THE A.O. ON ACCOUNT OF UNDISCLOSED INCOME IN RESPECT OF CREDIT ENTRIES IN THE BANK ACCOUNT OF THE ASSESSEE. (B) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. CIT(A) ERRED IN ADMITTING ADDITIONAL EVIDEN CE SUBMITTED BY THE ASSESSEE EVEN THOUGH THE SAME WAS OPPOSED BY THE A. O. IN HIS REMAND REPORT. (C) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW, THE LD. CIT(A) ERRED IN CONSIDERING ONLY THOSE ASPE CT OF THE ADDITIONAL EVIDENCE WHICH WAS FAVOURABLE TO THE ASSESSEE, WITH OUT CONSIDERING THE EVIDENCE IN ITS ENTIRETY AND THE REPORTS SUBMITTED BY THE A.O. FROM TIME TO TIME. 2. THE APPELLANT PRAYS THAT THE ORDER OF CIT(A) ON THE ABOVE GROUND BE SET ASIDE AND THAT OF THE ASSESSING OFFICER BE R ESTORED. 6. THE LD. D.R. STRONGLY SUPPORTED THE ORDERS OF TH E A.O. MAKING ADDITION ON ACCOUNT OF CREDIT ENTRIES FOUND REFLECTED IN THE BANK ACCOUNT MAINTAINED IN THE NAME OF THE ASSESSEE WITH THE BANK OF INDIA, FORT BRANCH. HE ITA 4363/MUM/2010 & I TA 4364/MUM/2010 8 SUBMITTED THAT THE SAID ACCOUNT WAS NOT DISCLOSED B Y THE ASSESSEE AT ALL AND EVEN THE SOURCE OF THE CREDITS APPEARING THEREIN CO ULD NOT BE EXPLAINED SATISFACTORILY BY THE ASSESSEE. HE SUBMITTED THAT A LTHOUGH THE ASSESSEE DENIED THE OWNERSHIP OF THAT ACCOUNT BEFORE THE A.O . BY FILING THE AFFIDAVIT, THE SAME WAS NOT ACCEPTED BY THE A.O. BY TREATING T HE SAME AS SELF SERVING EVIDENCE. HE CONTENDED THAT THERE WAS NOTHING BROUG HT ON RECORD BY THE ASSESSEE BEFORE THE A.O. TO CORROBORATE THIS STAND. HE SUBMITTED THAT THE ASSESSEE, HOWEVER, FILED THE AFFIDAVITS OF SHRI CHE TAN THAKKAR AND SHRI BHADRESH MASRANI BEFORE THE LD. CIT(A) FOR THE FIRS T TIME TO CORROBORATE HIS STAND AND THE SAID ADDITIONAL EVIDENCE WAS ADMITTED AND RELIED UPON BY THE LD. CIT(A) TO GIVE RELIEF TO THE ASSESSEE IGNORING THE OBJECTION RAISED BY THE A.O. IN THE REMAND REPORT THAT THE SAID ADDITIONAL EVIDENCE SHOULD NOT BE ADMITTED. HE STRONGLY RELIED UPON THE REMAND REPORT SUBMITTED BY THE A.O. TO THE LD. CIT(A) RAISING OBJECTION OF THE ADDITIONAL EVIDENCE AS WELL AS OFFERING HER COMMENTS ON THE SAID ADDITIONAL EVIDENCE. 7. THE LD. COUNSEL FOR THE ASSESSEE, ON THE OTHER H AND, STRONGLY RELIED ON THE IMPUGNED ORDER OF THE LD. CIT(A) IN SUPPORT OF ASSESSEES CASE ON THIS ISSUE. HE SUBMITTED THAT IN THE AFFIDAVIT FILED BE FORE THE LD. CIT(A) AS WELL AS IN THE STATEMENT RECORDED BY THE A.O. DURING THE CO URSE OF REMAND PROCEEDINGS, OF SHRI CHETAN THAKKAR, HAD ADMITTED T HAT THE RELEVANT BANK ACCOUNT WITH BANK OF INDIA, FORT BRANCH IN THE NAME OF THE ASSESSEE WAS OPENED AND OPERATED BY HIM AND THE SAME WAS USED TO ROUT BACK HIS UNACCOUNTED MONEY. FOR THIS PURPOSE, HE OBTAINED P AY ORDERS FROM SHRI BHADRESH MASRANI IN THE NAME OF THE ASSESSEE ON PAY MENT OF EQUIVALENT AMOUNT IN CASH. HE SUBMITTED THAT THIS STATEMENT OF SHRI CHETAN THAKKAR WAS CONFIRMED EVEN BY SHRI BHADRESH MASRANI IN THE AFFIDAVIT FILED BEFORE THE LD. CIT(A) AND IN THE STATEMENT RECORDED AND BOTH T HESE PARTIES HAD CLEARLY ADMITTED THAT THE ASSESSEE WAS NOT INVOLVED AT ALL IN THE TRANSACTIONS REFLECTED IN THE BANK ACCOUNT WITH BANK OF INDIA, F ORT BRANCH. HE SUBMITTED ITA 4363/MUM/2010 & I TA 4364/MUM/2010 9 THAT EVEN THE ENTIRE BALANCE IN THE SAID ACCOUNT ON ITS CLOSURE WAS TRANSFERRED TO A COMPANY BELONGING TO SHRI CHETAN THAKKAR AND P LACED ON RECORD A COPY OF THE RELEVANT BANK STATEMENT TO SHOW THIS POSITIO N. HE CONTENDED THAT THE TRANSACTIONS REFLECTED IN THE BANK ACCOUNT MAINTAIN ED IN THE NAME OF THE ASSESSEE WITH BANK OF INDIA, FORT BRANCH THUS CLEAR LY BELONGED TO SHRI CHETAN THAKKAR AND THE ASSESSEE HAVING NOTHING TO DO WITH THE SAME, THE ADDITIONS MADE BY THE A.O. ON ACCOUNT OF CREDITS APPEARING IN THE SAID BANK ACCOUNT TREATING THE SAME AS UNDISCLOSED INCOME OF THE ASSE SSEE WERE RIGHTLY DELETED BY THE LD. CIT(A). HE THEREFORE URGED THAT THE IMP UGNED ORDER OF THE LD. CIT(A) DELETING THE SAID ADDITION MAY BE CONFIRMED. 8. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND ALS O PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. IT IS OBSERVED THAT A LTHOUGH THE OWNERSHIP OF THE BANK ACCOUNT FOUND TO BE MAINTAINED IN THE NAME OF THE ASSESSEE WITH BANK OF INDIA, FORT BRANCH WAS DENIED BY THE ASSESSEE ON AFFIDAVIT, THE CREDIT ENTRIES APPEARING THEREIN AGGREGATING TO RS.1,50,87 ,335/- AND RS. 6,96,673/- FOR ASSESSMENT YEARS 2004-05 & 2006-07 WERE TREATED BY THE A.O. AS UNDISCLOSED INCOME OF THE ASSESSEE ON THE GROUND TH AT THE SAID ACCOUNT WAS NOT DISCLOSED BY THE ASSESSEE AND THE SOURCE FOR CR EDITS APPEARING THEREIN WAS NOT SATISFACTORILY EXPLAINED BY HIM. THE AFFIDA VIT FILED BY THE ASSESSEE DISOWNING THE SAID BANK ACCOUNT WAS NOT ACCEPTED BY THE A.O. TREATING SAME AS ONLY A SELF SERVING EVIDENCE. HE ALSO HELD THAT THERE WAS NOTHING TO CORROBORATE THE STAND TAKEN BY THE ASSESSEE IN THE SAID AFFIDAVIT. BEFORE THE LD. CIT(A), THE ASSESSEE HOWEVER FILED THE AFFIDAVI T OF SHRI CHETAN THAKKAR TO CORROBORATE HIS STAND WHEREIN THE DEPONENT NOT ONLY ACCEPTED THE OWNERSHIP OF THE ACCOUNT OPENED IN THE NAME OF THE ASSESSEE W ITH BANK OF INDIA, FORT BRANCH BUT ALSO ADMITTED THAT ALL THE TRANSACTIONS REFLECTED THEREIN WERE BELONGING TO HIM WITH NO INVOLVEMENT OF THE ASSESSE E. THE ASSESSEE ALSO FILED AFFIDAVIT OF SHRI BHADRESH MASRANI, PROPRIETOR OF M /S SONIYA SALES CORPORATION AFFIRMING THEREIN ON OATH THAT THE PAY ORDERS DRAWN IN THE NAME ITA 4363/MUM/2010 & I TA 4364/MUM/2010 10 OF THE ASSESSEE AND DEPOSITED IN THE SAID ACCOUNT W ERE ISSUE BY HIM AT THE INSTANCE OF SHRI CHETAN THAKKAR AS ACCOMMODATION EN TRIES ON RECEIVING EQUIVALENT AMOUNT IN CASH. 9. THE AFORESAID ADDITIONAL EVIDENCE FILED BY THE A SSESSEE IN THE FORM OF AFFIDAVITS OF SHRI CHETAN THAKKAR AND SHRI BHADRESH MASRANI FOR THE FIRST TIME BEFORE HIM WAS FORWARDED BY THE LD. CIT(A) TO THE A.O. FOR HER COMMENTS. THE A.O. IN THE REMAND REPORT SUBMITTED BEFORE THE LD. CIT(A) OBJECTED TO THE ADMISSION OF ADDITIONAL EVIDENCE ON THE GROUND THAT THE FAILURE TO PRODUCE SUCH ADDITIONAL EVIDENCE DURING THE COURSE OF ASSES SMENT PROCEEDINGS WAS NOT SATISFACTORILY EXPLAINED BY THE ASSESSEE. HOWE VER, AS NOTED BY THE LD. CIT(A) IN THIS REGARD, THE COPY OF ACCOUNT FROM BAN K OF INDIA, FORT BRANCH WAS OBTAINED BY THE A.O. VIDE SUMMONS ISSUED U/S 13 1 OF THE ACT ON 18-12- 2008 AND THE ASSESSMENT WAS COMPLETED BY HER ON 30- 12-2008 LEAVING HARDLY ANY SUFFICIENT TIME TO THE ASSESSEE TO SUPPORT AND SUBSTANTIATE HIS STAND THAT THE ACCOUNT MAINTAINED WITH BANK OF INDIA, FORT BRA NCH IN HIS NAME WAS NOT ACTUALLY OWNED BY HIM. ONLY AFTER THE COMPLETION OF ASSESSMENT WHEREIN HIS STAND WAS REJECTED AND ADVERSE INFERENCE WAS DRAWN BY THE A.O. AGAINST HIM, THE ASSESSEE COULD GET SUFFICIENT OPPORTUNITY TO TR ACE OUT THE CONCERNED PERSONS WHO WERE INVOLVED IN OPENING AND OPERATING BANK ACCOUNT IN HIS NAME AND OBTAINED THEIR AFFIDAVITS TO SUPPORT AND S UBSTANTIATE HIS STAND THAT THE SAID ACCOUNT DID NOT BELONG TO HIM. IN OUR OPI NION, THE REASON FOR HIS FAILURE TO FILE THE AFFIDAVITS OF SHRI CHETAN THAKK AR AND SHRI BHADRESH MASRANI BEFORE THE A.O. DURING THE COURSE OF ASSESS MENT PROCEEDINGS THUS WAS PROPERLY EXPLAINED BY THE ASSESSEE AND ONLY AFT ER SATISFYING HIMSELF THAT ADEQUATE OPPORTUNITY WAS NOT AFFORDED TO THE ASSESS EE TO FILE THE SAID AFFIDAVITS DURING THE COURSE OF ASSESSMENT PROCEEDI NGS, THE LD. CIT(A) ADMITTED THE SAID AFFIDAVITS AS ADDITIONAL EVIDENCE KEEPING IN VIEW ALSO THE RELEVANCE OF THE SAID EVIDENCE TO DECIDE THE ISSUE INVOLVED IN THE APPEALS OF THE ASSESSEE. MOREOVER, SUFFICIENT AND PROPER OPPOR TUNITY WAS ALSO AFFORDED ITA 4363/MUM/2010 & I TA 4364/MUM/2010 11 BY THE LD. CIT(A) TO THE A.O. TO VERIFY THE SAID AD DITIONAL EVIDENCE WHICH WAS INDEED AVAILED BY THE A.O. BY RECORDING THE STATEME NTS OF BOTH THE PERSONS DURING THE REMAND PROCEEDINGS. IN OUR OPINION, THE ACTION OF THE LD. CIT(A) IN ADMITTING THE AFFIDAVITS OF SHRI CHETAN THAKKAR AND SHRI BHADRESH MASRANI AS ADDITIONAL EVIDENCE THUS WAS IN DUE COMPLIANCE W ITH RULE 46-A OF THE INCOME TAX RULES, 1962 WHICH CANNOT BE FAULTED WITH . WE THEREFORE OVERRULE THE OBJECTION OF THE REVENUE IN RESPECT OF ADMISSIO N OF AFFIDAVITS OF SHRI CHETAN THAKKAR AND SHRI BHADRESH MASRANI BY THE LD. CIT(A) AS ADDITIONAL EVIDENCE AND UPHOLDING HIS ACTION ON THIS ISSUE, WE NOW PROCEED TO DECIDE THE ISSUE INVOLVED IN THESE APPEALS ON MERIT IN THE LIG HT OF THE SAID ADDITIONAL EVIDENCE. 10. IT IS OBSERVED THAT IN HIS STATEMENT RECORDED B Y THE A.O., SHRI CHETAN THAKKAR NOT ONLY CONFIRMED THAT THE SB A/C NO. 1181 WITH BANK OF INDIA, FORT BRANCH WAS OPENED AND OPERATED BY HIM IN THE N AME OF THE ASSESSEE BUT ALSO EXPLAINED THE REASON FOR DOING SO BY STATING T HAT IT WAS DONE TO ROUT BACK HIS UNACCOUNTED MONEY BY OBTAINING THE PAY ORDERS F ROM SHRI BHADRESH MASRANI, PROPRIETER OF M/S SONIYA SALES CORPORATION AGAINST PAYMENT OF EQUIVALENT AMOUNT IN CASH. IN HIS STATEMENT RECORD ED BY THE A.O., SHRI BHADRESH MASRANI ALSO CONFIRMED OF HAVING ISSUED TH E PAY ORDERS IN THE NAME OF THE ASSESSEE AT THE BEHEST OF SHRI CHETAN T HAKKAR AGAINST RECEIPT OF EQUIVALENT AMOUNT IN CASH. HE ALSO ACCEPTED THAT H E DID NOT KNOW THE ASSESSEE AND THE PAY ORDERS WERE ISSUED IN THE NAME OF THE ASSESSEE ONLY AT THE INSTANCE OF SHRI CHETAN THAKKAR. THE STAND TAK EN BY THE ASSESSEE BEFORE THE A.O. IMMEDIATELY AFTER THE CONCERNED BANK ACCOU NT WAS CONFRONTED TO HIM THAT THE SAME DID NOT BELONG TO HIM THUS WAS CORROB ORATED BY INDEPENDENT PARTY WHO HAD NOT ONLY ACCEPTED OF HAVING OPENED AN D OPERATED THE BANK ACCOUNT IN THE NAME OF THE ASSESSEE BUT ALSO CATEGO RICALLY STATED THAT THE TRANSACTIONS REFLECTED IN THE SAID ACCOUNT WERE BEL ONGING TO HIM WITH NO INVOLVEMENT WHATSOEVER OF THE ASSESSEE. AT THE TIM E OF HEARING, WHEN THE ITA 4363/MUM/2010 & I TA 4364/MUM/2010 12 BENCH WANTED TO KNOW WHAT ULTIMATELY HAS HAPPENED T O THE AMOUNT DEPOSITED IN THE SAID BANK ACCOUNT, THE LD. COUNSEL FOR THE ASSESSEE HAS FILED A COPY OF THE SAID BANK STATEMENT WHICH SHOWS THAT THE SAID ACCOUNT WAS CLOSED ON 1-2-2006 AND THE ENTIRE BALANCE AVAILABLE THEREIN AMOUNTING TO RS. 1,57,84,567/- WAS PAID TO M/S THE EAST INDIA TRADIN G COMPANY, A PROPRIETARY CONCERN OF SHRI CHETAN THAKKAR. IN OUR OPINION, THIS FACT FURTHER CONFIRMS THAT THE SAID ACCOUNT IN BANK OF INDIA, FO RT BRANCH IN THE NAME OF THE ASSESSEE WAS NOT ONLY OPENED AND OPERATED BY SH RI CHETAN THAKKAR BUT EVEN THE TRANSACTIONS REFLECTED THEREIN INCLUDING T HE DEPOSITS MADE WERE BELONGING TO HIM INASMUCH AS HE WAS ULTIMATELY THE BENEFICIARY OF THE SAID DEPOSITS. . KEEPING IN VIEW ALL THESE FACTS BORNE OUT FROM THE RECORD, WE ARE OF THE VIEW THAT THE ADDITIONS MADE BY THE A.O. IN BOT H THE ASSESSMENT YEARS UNDER CONSIDERATION TO THE TOTAL INCOME OF THE ASSE SSEE TREATING THE CREDIT ENTRIES APPEARING IN THE SAID ACCOUNT AS UNDISCLOSE D INCOME OF THE ASSESSEE WERE NOT SUSTAINABLE AND THE LD. CIT(A) WAS FULLY J USTIFIED IN DELETING THE SAME. IN THAT VIEW OF THE MATTER, WE UPHOLD THE OR DER OF THE LD. CIT(A) ON THIS ISSUE AND DISMISS THE APPEALS FILED BY THE REVENUE. 11. IN THE RESULT, APPEALS FILED BY THE REVENUE ARE DISMISSED. 8 9 $% 3 !8 3 :; ORDER PRONOUNCED IN THE OPEN COURT ON 10-04-2013. . # 7 3 56. ! <#)9 10-04-2013 6 3 SD/- SD/- (DR. S.T.M. PAVALAN) (P.M. JAGTAP ) * '#$ JUDICIAL MEMBER ! '#$ / ACCOUNTANT MEMBER MUMBAI ; <#) DATED 10-04-2013. %.*).'./ RK , SR. PS ITA 4363/MUM/2010 & I TA 4364/MUM/2010 13 # 7 3 1*CD E D. # 7 3 1*CD E D. # 7 3 1*CD E D. # 7 3 1*CD E D./ COPY OF THE ORDER FORWARDED TO : 1. /0 / THE APPELLANT 2. 12/0 / THE RESPONDENT. 3. F () / THE CIT(A)36, MUMBAI. 4. F / CIT (CENTRAL) -1, MUMBAI 5. D%I 1**) , , / DR, ITAT, MUMBAI H BENCH 6. &- J / GUARD FILE. # 7)' # 7)' # 7)' # 7)' / BY ORDER, '2D 1* //TRUE COPY// K K K K/ // /': ': ': ': ( DY./ASSTT. REGISTRAR) , , , , / ITAT, MUMBAI