ITO.,26(2)(3), MUMBAI V. SHRI PARIMAL M. PATEL, MUMBAI

ITA 4407/MUM/2011

• Counselvise Citation: 440719914 RSA 2011
• Duration Of Justice: 2 year(s) 2 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-08-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 22-08-2013
• Assessment Year: 2007-2008
• Appeal Filed On: 01-06-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRADEEP KR SINGH
• Assessee Lawyers: PARAS SAVLA; DR K SHIVARAM
• Keywords: Unexplained cash credit
• Section: 68

Judgement Text

, INCOME TAX APPELLATE TRIBUNAL,MUMBAI - C BENCH. . . , , BEFORE S/SH. B.R.MITTAL, JUDICIAL MEMBER & RAJ ENDRA, ACCOUNTANT MEMBER ./ ITA NO. 4407/MUM/2011, ! ! ! ! ' ' ' ' / ASSESSMENT YEAR-2007-08 ITO 26(2)(3) ROOM NO. 304, 3 RD FLOOR, BLDG. C- 11, PRATYAKSHAKAR BHAVAN, BANDRA KURLA COMPLEX, BANDRA (E) MUMBAI- 400051 VS. PARIMAL M.PATEL B-402, SAVALYA BUILDING, MAHAVIR NAGAR, KANDIVALI (W) MUMBAI- 400067 PAN: AGLPP7360B ( #$ / APPELLANT) ( %&#$ / RESPONDENT ) #$ #$ #$ #$ ' ' ' ' / APPELLANT BY : SHRI PRADEEP KR. SINGH %&#$ ( ' / RESPONDENT BY : SHRI DR. K.SHIVARAM & PARAS SAVLA ! ! ! ! ( (( ( )* )* )* )* / DATE OF HEARING : 22-08-2013 +,' ( )* / DATE OF PRONOUNCEMENT : 28-08-2013 ! ! ! ! , 1961 ( (( ( 254(1) )-) )-) )-) )-) . . . . ORDER U/S.254(1)OF THE INCOME-TAX ACT,1961(ACT) PER RAJENDRA, A.M. CHALLENGING THE ORDER DT. 30.03.2011OF THE CIT(A)-2 8,MUMBAI, ASSESSING OFFICER (AO) HAS RAISED FOLLOWING GROUNDS OF APPEAL: (I) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A) ERRED IN DELETING THE ADDITION OF RS. 29,40,500/- MADE BY THE ASSESSI NG OFFICER ON ACCOUNT OF UNEXPLAINED CASH CREDITS IN AXIS BANK ACCOUNT WITHOUT APPRECIATING THE FACT THAT THE ASSESSEE HAS FAILED TO PROVE THE CASH DEPOSITS IN AXIS BANK TO THE ASSESSING OFFICER. (II) THE APPELLANT PRAYS THAT THE ORDER OF THE LEARNED C IT(A) ON THE ABOVE GROUNDS BE SET ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED. (III) THE APPELLANT CRAVES LEAVE TO AMEND OR ALTER ANY GR OUND OR ADD A NEW GROUND ASSESSEE,AN INDIVIDUAL, ,FILED HIS RETURN OF INCOME ON 31.07.2007 DECLARING TOTAL INCOME OF RS. 2,61,672/-.AO FINALISED THE ASSESSMENT ORDER U/S.14 3(3) OF THE ACT,ON 24.12.2009,DETERMINING THE TOTAL INCOME AT RS.32.02 LAKHS. 2. EFFECTIVE GROUND OF APPEAL PERTAINS TO DELETION OF ADDITION OF RS.29,40,500/- MADE BY THE AO. FACTS EMERGING FROM THE ASSESSMENT ORDER ARE THAT T HE AO HAD RECEIVED INFORMATION UNDER AIR ABOUT DEPOSITS OF CASH IN BANK ACCOUNT,MAINTAINED WITH AXIS BANK,IN THE NAME OF THE ASSESSEE. AO THEREFORE,SCRUTINIZED THE RETURN AND BANK ACCOUN T OF THE ASSESSEE.AS PER THE AO ASSESSEE DID NOT PRODUCE ANY EXPLANATION OF SOURCES OF DEPOSITS THROUGH DOCUMENTARY EVIDENCES.ACCORDINGLY, ALL THE ENTRIES OF CASH IN BANK ACCOUNT OF THE ASSE SSEE AMOUNTING TO RS.29,40,500/- WERE ADDED TO THE TOTAL INCOME AND SAME WERE UNEXPLAINED CREDITS U/S.68 OF THE ACT BY THE AO. 2.1. AGAINST THE ORDER OF THE AO ASSESSEE PREFERRED AN A PPEAL BEFORE THE FIRST APPEAL AUTHORITY 2 ITA NO. 4407/MUM/2011 (AY-2007-08) PARIMAL M.PATEL (FAA).AFTER CONSIDERING THE SUBMISSIONS OF THE ASSE SSEE AND THE ASSESSMENT ORDER HE HELD THAT FURTHER INVESTIGATION WAS NECESSARY TO ARRIVE AT FI NAL CONCLUSION.SO,HE FORWARDED SUBMISSION OF THE ASSESSEE ALONG WITH COPIES OF BANK ACCOUNTS AND CONFIRMATIONS SUBMITTED BEFORE HIM DURING APPELLATE PROCEEDINGS AND FILE A REPORT VIDE HIS L ETTER DT. 19.05.2010. AO DID NOT REPLY ANY OF THE LETTERS OF THE FAA NOR DID HE FILE ANY VERIFICATION REPORT ON THE EVIDENCES SUBMITTED BY THE ASSESSEE WHICH CLEARLY SHOWS DEPOSIT OF CASH APPROX . RS.13.68 LAKHS AS AGAINST ADDITION MADE OF RS.29, 40,500/- IN THE ORDER.SINCE NO REPORT WAS RE CEIVED FROM THE AO FOR 9 MONTHS, HE ISSUED A FINAL LETTER TO AO ON 22.02.2011.AS THERE WAS NO RE SPONSE FROM THE AO,FAA ALLOWED AN OPPORTUNITY TO THE ASSESSEE TO FILE ALL THE DETAILS FILED BEFORE THE AO VIDE HIS ORDER SHEET NOTING DTD.2203.2011.IN RESPONSE THERETO, THE ASSESSEE FIL ED THE DETAILS AND EVIDENCES EXPLAINING THE SOURCES OF CASH VIDE LETTER DT. 25.03.2011. AFTER C ONSIDERING THE SUBMISSION MADE BY THE ASSESSEE AND THE ORDER OF THE AO HE HELD THAT THE FACTS CULL ED OUT FROM THE RECORD CLEARLY REVEALED THAT A SUM OF RS.13,68,600/- WAS ONLY DEPOSITED IN CASH IN THE BANK ACCOUNT MAINTAINED WITH AXIS BANK IN THE NAME OF THE ASSESSEE, THAT SOURCES OF SAID D EPOSITS WERE TO BE EXPLAINED BY THE ASSESSEE,THAT THE ASSESSEE HAD FILED A STATEMENT BEFORE THE AO DU RING THE ASSESSMENT PROCEEDINGS AS ALSO SUBSEQUENTLY IN THE REMAND PROCEEDINGS,THAT THE AO HAD NEITHER TAKEN COGNIZANCE OF THE EVIDENCE NOR FILED ANY REPORT ON THE ISSUE,THAT THE INITIAL DEPOSIT OF RS 2,78,000/- DT 24.07.2006 WAS SOURCED FROM WITHDRAWAL FROM CURRENT ACCOUNT IN THE NAME OF PROPRIETORY CONCERN OF THE ASSESSEE NAMELY DAFFODIL EXPORTS,THAT ALL THE RELEV ANT FACTS WERE EXPLAINED TO THE AO,THAT THE ASSESSEE HAD FILED EXPLANATION ABOUT THE SOURCE O F DEPOSITS IN CASH,THAT THE EVIDENCES AND DETAILS FILED BY THE ASSESSEE REVEALED THAT THE DEPOSITS OF RS.13,68,600/- WERE EXPLAINED FROM CASH WITHDRAWALS MADE ON VARIOUS DATES PRIOR TO THE DEPO SITS WHICH WAS CASH IN HAND ,THAT AS PER THE UNDISPUTED FUND FLOW STATEMENT FILED SUFFICIENT CAS H WAS AVAILABLE WITH THE ASSESSEE TO DEPOSIT IN BANK ACCOUNT,THAT ALL THE ABOVE DETAILS AND EVIDENC ES SUPPORTED BY CASH BOOK AND ENTRIES IN THE CREDIT AND DEBIT SIDE OF THE BANK ACCOUNTS SHOWED T HAT DEPOSITS WERE SOURCED FROM CASH WITHDRAWALS FROM AXIS BANK AND CURRENT BANK ACCOUNT IN THE NAME OF PROPRIETARY CONCERN OF THE ASSESSEE ,THAT ADDITION OF RS.29,40,500/- AS UNEXPL AINED CREDITS U/S.68 OF THE ACT MADE BY THE AO IN THE ASSESSMENT ORDER WAS NOT TENABLE. 2.2. BEFORE US, DEPARTMENTAL REPRESENTATIVE (DR) SUPPORT ED THE ORDER OF THE AO.AUTHORISED REPR -ESENTATIVE (AR)SUBMITTED THAT THE ASSESSEE HAD EXP LAINED THE CASH DEPOSITED IN HIS BACK ACCOUNT, THAT THE ASSESSEE HAD SUFFICIENT BALANCE WITH HIM,T HAT AO DID NOT CONSIDER THE EVIDENCES PRODUCED BEFORE HIM DURING THE REMAND PROCEEDINGS.HE REFERRE D TO PAGES 48 AND 49 OF THE PAPER BOOK. 2.3. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL BEFORE US.WE FIND THAT THE AO DID NOT SUBMIT REMAND REPORT TO THE FAA EVEN AFTER EIGHT REMINDERS.NOT ONLY THIS WHEN FAA SENT HIM LAST OPPORTUNITY NOTICE,HE DID NOT THINK IT FIT TO FILE ANY REPLY.WE DO NOT WANT COMMENT UPON THE HIS BEHAVIOUR,BUT WE ARE OF THE OPINION THAT AF TER NOT FOLLOWING THE INSTRUCTION OF A SENIOR OFFICER-FAA- HOW HE CAN HE STATE THAT FAA HAS ERRED IN LAW.WE ALSO FAIL TO UNDERSTAND HOW THE FILING OF SECOND APPEAL WAS SANCTIONED.FAA HAD TO V IRTUALLY DO THE JOB OF THE AO, BECAUSE AO DID NOT FILE ANY REPORT.IT IS NOT THAT AO HAD NOT V ERIFIED THE DETAILS FILED BY THE ASSESSEE.VIDE HIS LETTER 28.06.2010 ASSESSEE HAD FILED COPIES OF BANK ACCOUNTS AND DETAILS OF CASH DEPOSITS.AO CALLED FOR FURTHER EVIDENCES VIDE LETTER 07.07.2010 FROM THE ASSESSEE.IN RESPONSE TO THE SAID LETTER ASSESSEE FILED FURTHER DETAILS ON 16.07.2010.AS PER THE DIRECTIONS OF THE AO, ASSESSEE FURTHER FILED MORE DETAILS ON 20.07.2010.BUT,AO CHOSE NOT TO COMM ENT UPON THE EVIDENCES AND DOCUMENTS PRODUCED BEFORE HIM,FOR THE REASONS BEST KNOWN TO H IM.IN THESE CIRCUMSTANCES FAA WAS COMPELLED TO GO THROUGH THE EVIDENCES FURNISHED BY THE ASSESSEE.AFTER SCRUTINISING THE SAME HE HELD THAT DEPOSITS MADE BY THE ASSESSEE WERE FULLY EXPLAINED AND PROVISIONS OF SECTION 68 WERE NOT APPLICABLE IN THE CASE UNDER CONSIDERATION. SEQ UENCE OF EVENTS CLEARLY INDICATE THAT FAA WAS LEFT WITH NO ALTERNATIVE, BUT TO REVERSE THE ORDER OF THE AO.IN OUR OPINION AFTER GOING THROUGH THE CATEGORICAL FINDING OF FACTS GIVEN BY THE FAA,THERE IS NO NEED TO INTERFERE WITH HIS ORDER. THEREFORE, UPHOLDING HIS ORDER WE DECIDED EFFECTIVE GROUND OF APPEAL AGAINST THE AO. AS A RESULT,APPE AL FILED BY THE AO STANDS DISMISSED. 3 ITA NO. 4407/MUM/2011 (AY-2007-08) PARIMAL M.PATEL 0 )1 ! * 2 3 ( - !4 ( ) 56. ORDER PRONOUNCED IN THE OPEN COURT ON 28 TH AUGUST,2013 . . ( +,' 8 9! 28 -) , 2013 , ( - : SD/- SD/- ( . ; ; ; ; . . B.R.MITTAL ) ( / RAJENDRA ) / JUDICIAL MEMBER /ACCOUNTANT MEMBER / MUMBAI, 9! /DATE: 28 TH AUGUST,2013 SK . . . . ( (( ( %)< %)< %)< %)< =<') =<') =<') =<') / COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE / #$ 2. RESPONDENT / %&#$ 3. THE CONCERNED CIT (A) / > ? , 4. THE CONCERNED CIT / > ? 5. DR C BENCH, ITAT, MUMBAI / <@- %)! , . . . 6. GUARD FILE/ - A &<) &<) &<) &<) %) %)%) %) //TRUE COPY// .! / BY ORDER, B / 5 DY./ASST. REGISTRAR , /ITAT, MUMBAI