NARAYAN R MUNDHRA, MUMBAI V. ITO 14(2)-4, MUMBAI

ITA 44/MUM/2011

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 84178 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 10 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-11-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 13-10-2014
• Assessment Year: 2007-2008
• Appeal Filed On: 04-01-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: LOVE KUMAR
• Assessee Lawyers: D C JAIN
• Keywords: Unexplained investment; Gift; Peak credit
• Section: 68

Judgement Text

B , , , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH B, MUMBAI !' , # $% & & & & , , $% ' BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER, AND SHRI VIVEK VARMA, JUDICIAL MEMBER . : . : . : . : 44 / // / / // / 2011, + 2007-08 ITA NO. : 44/MUM/2011 , AY 2007-08 NARAYAN R MUNDHRA, C/O D C JAIN & CO., 75, BOMBAY MUTUAL BLDG., DR. D N ROAD, FORT, MUMBAI -400 001 %, # .: PAN: AJRPM 1436 G VS INCOME TAX OFFICER 14(2)-4, EARNEST HOUSE, NARIMAN POINT, MUMBAI ,- (APPELLANT) ./,- (RESPONDENT) ,- (CROSS OBJECTOR) ./,- (RESPONDENT) APPELLANT-ASSESSEE CROSS OBJECTOR BY : SHRI D C JAIN RESPONDENT-REVENUE BY : SHRI LOVE KUMAR 012# /DATE OF HEARING : 13-10-2014 34+ 012#/ DATE OF PRONOUNCEMENT : 19-11-2014 $ 5 $ 5 $ 5 $ 5 O R D E R , . . . . . .. . PER VIVEK VARMA, J.M. : THE APPEAL IS FILED BY THE ASSESSEE AGAINST THE ORD ER OF CIT(A) 25, MUMBAI, DATED 04.10.2010, WHEREIN, THE FOLLOWING GR OUNDS HAVE BEEN RAISED: 1. UNDER THE FACTS AND CIRCUMSTANCES OF THE LEARNE D COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN CONFIRMING THE ADDITION OF R S. 9,76,300/- MADE BY THE ASSESSING OFFICER U/S 68 OF I.T. ACT. 2. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) FAILED TO APPRECIATE THAT: (I) THE APPELLANT HAD DEPOSITED ONLY RS. 4,75,000/- AND THEREAFTER WITHDRAWN AND REDEPOSITED AND THE DEPOSIT NOT EXCEEDING RS. 4 ,75,000/- AT ANY TIME DURING THE YEAR. (II) THE APPELLANT RECEIVED A SUM OF RS. 5,00,000/- IN CASH FROM HIS MATERNAL GRANT MOTHER. 3. THE APPELLANT CRAVES LEAVE TO ADD, AMEND, ALTER, DELETE THE GROUND/S OF APPEAL AT OR BEFORE THE HEARING OF APPEAL. 2. THE FACTS ARE THAT THE ASSESSEE IS AN INDIVIDUAL AND DECLARES INCOME FROM COMMISSION. THE CASE WAS SELECTED FOR S CRUTINY ON RECEIPT NARAYAN R MUNDHRA ITA 44/M/2011 2 OF AIR INFORMATION, WHEREIN, IT WAS STATED THAT THE ASSESSEE HAD DEPOSITED CASH AMOUNTING TO RS. 9,76,300/- DURING T HE YEAR. 3. THE AO CALLED FOR AS EXPLANATION AS TO WHY THE A DDITION SHOULD NOT BE MADE. THE ASSESSEE EXPLAINED THAT HE HAD REC EIVED A GIFT OF RS. 5,00,000/- FROM HIS MATERNAL GRANDMOTHER, WHICH HE DEPOSITED IN THE BANK. IT WAS FURTHER EXPLAINED THAT HE HAD WITHDRAW N RS. 4,75,000/- FROM THIS FUND AND RE-DEPOSITED THE SAME. 4. BESIDES THIS, THE ASSESSEE WAS ALSO ASKED TO EXP LAIN THE SOURCE OF INVESTMENTS MADE BY THE ASSESSEE AGGREGATING TO RS. 83,000/-. SINCE NO EXPLANATION WAS SATISFACTORILY GIVEN, THE AO HELD IT TO BE UNEXPLAINED INVESTMENT. ON AN AGGREGATE, THE AO MAD E THE ADDITION OF RS. 9,76,300/- AND RS. 83,000/-. 5. BEFORE THE CIT(A), THE ASSESSEE SUBMITTED THAT T HE AO DID NOT GIVE ANY CREDENCE TO THE EXPLANATION GIVEN BY HIM. THE CIT(A), ON A CONSIDERED HEARING DELETED THE ADDITION OF RS. 83,0 00/- BUT SUSTAINED THE ADDITION OF RS. 9,76,300/-. 6. AGAINST THIS THE ASSESSEE IS NOW BEFORE THE ITAT . 7. BEFORE US, THE AR REITERATED THE FACTS AND ALSO SUBMITTED THAT IF AT ALL THE ADDITION HAS TO BE MADE, THEN THE MOST A PPROPRIATE METHOD OF MAKING THE ADDITION WOULD BE TO COMPUTE PEAK CREDIT, BECAUSE, THE DEPOSITS AND WITHDRAWALS HAVE BEEN CONSISTENTLY MAD E FROM THE BANK ACCOUNT. 8. THE DR OBJECTED TO THIS SUBMISSION AND SUBMITTED THAT THE ORDER OF THE REVENUE AUTHORITIES DO NOT HAVE ANY IN FIRMITY AND HENCE SHOULD BE SUSTAINED. NARAYAN R MUNDHRA ITA 44/M/2011 3 9. WE HAVE HEARD THE ARGUMENTS AND HAVE PERUSED THE ORDERS AND PAPERS APPENDED IN THE PAPER BOOK. ON GOING THROUGH THE SUBMISSIONS OF THE ASSESSEE WE FIND MERIT IN HIS SU BMISSION TO TAKE THE PEAK CREDIT FOR THE ADDITION, WHICH WOULD TAKE CARE OF THE AMOUNT OF RS. 5,00,000/-, BEING THE GIFT FROM MATERNAL GRA NDMOTHER. 10. WE, THEREFORE, SET ASIDE THE ORDERS OF THE REVE NUE AUTHORITIES AND DIRECT THE AO TO REFRAME THE ASSESSMENT ON THE ISSU ES RAISED IN THE GOA BEFORE THE ITAT AND COMPUTE PEAK OF CREDITS AND THEN MAKE THE ADDITION ACCORDINGLY. 11. GROUNDS NO. 1, 2(I) & 2(II) ARE THEREFORE ALLOW ED FOR STATISTICAL PURPOSES. 12. IN THE RESULT, THE APPEAL, AS FILED BY THE AS SESSEE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 19 TH NOVEMBER, 2014. SD/- SD/- ( !' ) ( ) # $% # $% # $% # $% $% $% $% $% (N K BILLAIYA) (VIVEK VARMA) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATE: 19 TH NOVEMBER, 2014 .1/ COPY TO:- 1) ,-/ THE APPELLANT. 2) ./,-/ THE RESPONDENT. 3) THE CIT (A)-25, MUMBAI. 4) 8 14 , MUMBAI / THE CIT- 14, MUMBAI. 5) 9:.1 B , , THE D.R. B BENCH, MUMBAI. NARAYAN R MUNDHRA ITA 44/M/2011 4 6) :;< COPY TO GUARD FILE. $5 / BY ORDER / / TRUE COPY / / [ =/>? , DY. / ASSTT. REGISTRAR I.T.A.T., MUMBAI *AB> .. * CHAVAN, SR. PS