Vijaykumar G. Mehta(HUF), Surat V. The Income tax Officer,Ward-2(2), Surat

ITA 4445/AHD/2007

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 5493 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 7 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-07-2010
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Next Hearing Date: 22-07-2010
• Assessment Year: 2004-2005
• Appeal Filed On: 17-12-2007
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: R K DHANESTA
• Keywords: Unexplained cash credit; Set aside
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH AHMEDABAD (BEFORE S/SHRI BHAVNESH SAINI, JM AND D. C. AGRAWAL , AM) ITA NO.4445/AHD/2007 A. Y.: 2004-05 VIJAYKUMAR G. MEHTA (HUF), 1031 TEXTILE TOWER, RING ROAD, SURAT VS THE INCOME TAX OFFICER, WARD 2(2), AAYAKAR BHAVAN, MAJURA GATE, SURAT PA NO. AACHV 7962 C (APPELLANT) (RESPONDENT) APPELLANT BY SHRI HARDIK VORA, AR RESPONDENT BY SHRI R. K. DHANESTA, DR O R D E R PER BHAVNESH SAINI: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE CIT(A)-II, SURAT DATED 15- 10-2007 FOR ASSESSMENT YEAR 2004-05. 2. WE HAVE HEARD LEARNED REPRESENTATIVES OF BOTH THE P ARTIES, PERUSED THE FINDINGS OF THE AUTHORITIES BELOW AND CONSIDERE D THE MATERIAL ON RECORD POINTED OUT BY THE PARTIES. 3. ON GROUND NO.1, THE ASSESSEE CHALLENGED ADDITION OF RS.1,00,000/- MADE U/S 68 OF THE IT ACT FOR UNEXPLAINED CASH CRED IT. THE AO EXAMINED THE ASSESSEES BANK ACCOUNT AND FOUND THAT A SUM OF RS.50,000/- EACH HAD BEEN DEPOSITED IN CASH IN THE BANK ACCOUNT ON 0 7-07-2003 AND 08-07-2003. THE AO ASKED THE ASSESSEE TO EXPLAIN TH E SOURCE OF SUCH DEPOSIT IN HIS BANK ACCOUNT. THE ASSESSEE SUBMITTED THAT THE SAID SUMS ITA NOS.4445/AHD/2007 VIJAYKUMAR G. MEHTA (HUF) VS ITO W-2(2), SURAT 2 HAD BEEN DEPOSITED FROM OUT OF CASH BALANCE IN HIS CAPITAL ACCOUNT AND HIS PAST SAVINGS. HOWEVER, SINCE THE ASSESSEE WAS U NABLE TO FURNISH ANY EVIDENCE WITH REGARD TO THE SOURCE OF SUCH SUMS, RS .1,00,000/- WAS TREATED AS UNEXPLAINED CASH CREDIT U/S 68 OF THE IT ACT AND ADDITION WAS ACCORDINGLY MADE. IT WAS SUBMITTED BEFORE THE LEARN ED CIT(A) THAT IN FACT THE ABOVE SUMS REPRESENTED THE AMOUNTS RECEIVED BAC K FROM DEBTORS. THE DEBTORS HAVE BEEN SHOWN IN THE BALANCE SHEET OF THE ASSESSEE IN THE IMMEDIATELY PRECEDING YEAR BUT SOME DEBTORS DID NOT APPEAR IN THE BALANCE SHEET FOR THE YEAR UNDER CONSIDERATION. IT WAS THEREFORE, EXPLAINED THAT THE ABOVE SUMS HAVE BEEN RECEIVED FR OM THE DEBTORS WHICH HAVE BEEN DEPOSITED IN THE BANK ACCOUNT. THER EFORE, IT CANNOT BE TREATED AS UNEXPLAINED CASH CREDIT. THE LEARNED CIT (A) NOTED THAT THE ASSESSEE HAS MADE CONTRADICTORY STATEMENT BEFORE TH E AO AND BEFORE HIMSELF REGARDING THE SOURCES OF THE DEPOSIT IN THE BANK ACCOUNT. HE HAS FURTHER NOTED THAT EVEN IF THE ASSESSEES CONTENTIO N IS TO BE ACCEPTED THEN IT WAS NECESSARY FOR THE ASSESSEE TO STATE WHO THE DEBTORS ARE AND HOW THE AMOUNT HAS BEEN RECEIVED BACK. IN THE ABSENCE O F ANY NEXUS BETWEEN THE RECEIPT AND THE DEPOSIT, THE LEARNED CIT(A) DID NOT ACCEPT THE CONTENTION OF THE ASSESSEE AND DISMISSED THIS GROUN D OF APPEAL OF THE ASSESSEE. 4. THE LEARNED COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW AND FILED COPY OF ABSTRACT OF CASH BOOK TO SHOW THAT DUE TO RECEIPT OF THE AMOUNTS FROM THE DEBTORS, SUFFICIENT CASH BALANCE WAS AVAILABLE IN THE CASH BOOK WHICH W AS DEPOSITED IN THE BANK ACCOUNT OF THE ASSESSEE. RELEVANT COPY OF THE CASH BOOK IS FILED AT PAGE 9 OF THE PAPER BOOK. ON THE OTHER HAND, THE LE ARNED DR RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW AND SUBMITTED T HAT THE CONTRADICTORY STATEMENT OF THE ASSESSEE CLEARLY SHOWS THAT THE AS SESSEE HAS NO EXPLANATION WHATSOEVER TO EXPLAIN THE SOURCE OF THE DEPOSIT IN THE BANK ACCOUNT. THE LEARNED DR FURTHER SUBMITTED THAT SINC E NO DETAIL OF THE ITA NOS.4445/AHD/2007 VIJAYKUMAR G. MEHTA (HUF) VS ITO W-2(2), SURAT 3 DEBTORS WHO HAVE PAID BACK THE AMOUNT TO THE ASSESS EE HAS BEEN FILED, THEREFORE, THE ADDITION WAS RIGHTLY MADE BY THE AUT HORITIES BELOW. 5. ON CONSIDERATION OF THE RIVAL SUBMISSIONS WE ARE OF THE VIEW THAT THE MATTER REQUIRES RECONSIDERATION AT THE LEVEL OF THE AO. IT IS NOT IN DISPUTE THAT THE ASSESSEE MADE EXPLANATION BEFORE T HE AO THAT CASH WAS DEPOSITED IN THE BANK ACCOUNT FROM THE CASH BALANCE OUT OF HIS CAPITAL AND PAST SAVINGS. SUCH STATEMENT COULD NOT BE PROVE D THROUGH ANY EVIDENCE OR MATERIAL. THE ASSESSEE HOWEVER, TAKEN D IFFERENT SUBMISSIONS BEFORE THE LEARNED CIT(A) THAT THE AMOUNTS WERE REC EIVED FROM THE DEBTORS OF THE EARLIER YEARS WHICH IS CLARIFIED FRO M THE EARLIER YEARS BALANCE SHEET AND THE BALANCE SHEET OF THE ASSESSME NT YEAR UNDER CONSIDERATION. THE LEARNED CIT(A) IF WAS NOT SATISF IED WITH THE EARLIER EXPLANATION OF THE ASSESSEE, HE COULD HAVE CONSIDER ED THE FRESH SUBMISSION ON THE MATTER, HOWEVER, WHEN FRESH SUBMI SSIONS HAS BEEN CONSIDERED, THE LEARNED CIT(A) SHOULD HAVE GIVEN A SPECIFIC FINDING ON THE ISSUE. NOW, THE ASSESSEE SUBMITTED BEFORE THE LEARN ED CIT(A) THAT THE DEPOSITS IN THE BANK ACCOUNT ARE ON ACCOUNT OF RECE IPT FROM DEBTORS. COPY OF THE CASH BOOK IS FILED IN THE PAPER BOOK TO SHOW THAT ON THE DATE OF DEPOSIT CASH WAS AVAILABLE WITH THE ASSESSEE TO MAKE THE DEPOSIT IN THE BANK ACCOUNT. THEREFORE, MATTER REQUIRES RECONS IDERATION AT THE LEVEL OF THE AO BECAUSE THIS POINT WAS RAISED FOR THE FIR ST TIME AND HAS NOT BEEN CONSIDERED BY THE AUTHORITIES BELOW. WE ACCORD INGLY, SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW AND RESTORE THIS IS SUE TO THE FILE OF THE AO WITH DIRECTION TO RE-DECIDE THIS ISSUE BY GIVING RE ASONABLE SUFFICIENT OPPORTUNITIES OF BEING HEARD TO THE ASSESSEE. THE A SSESSEE IS DIRECTED TO PRODUCE COMPLETE BOOKS OF ACCOUNT BEFORE THE AO FOR HIS PERUSAL AND CONSIDERATION. THE ASSESSEE SHALL ALSO FILE SUFFICI ENT EVIDENCE TO SHOW THAT THE AMOUNTS WERE RECEIVED BACK FROM DEBTORS. W ITH THIS OBSERVATION, THIS GROUND OF APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ITA NOS.4445/AHD/2007 VIJAYKUMAR G. MEHTA (HUF) VS ITO W-2(2), SURAT 4 6. ON GROUND NO.2, THE ASSESSEE CHALLENGED THE ADDI TION OF RS.30,400/- ON ACCOUNT OF LOW HOUSEHOLD WITHDRAWALS . THE AO FOUND THAT THE ASSESSEE HAS NOT SHOWN ANY WITHDRAWAL FOR HOUSEHOLD EXPENSES DURING THE YEAR. THE TOTAL WITHDRAWAL OF THE FAMILY WAS ONLY RS.29,600/- . THE AO CONSIDERING THE LIFESTYLE OF THE ASSESSEE ESTIMATED THE HOUSEHOLD EXPENDITURE AT RS.5,000/- PER MONTH I.E. RS.60,000/- PER ANNUM AND MADE ADDITION OF RS.30,400/-. THE LEARNED CIT(A) CONFIRMED THE ADDITION BECAUSE THE ASSESSEE WAS DEALING IN SH ARES AND IT EARNED GAINS IN LACS OF RUPEES WHICH WOULD PROVED THAT RS. 29,600/- WOULD NOT BE SUFFICIENT TO SUSTAIN THE FAMILY OF THE ASSESSEE . 7. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED T HAT THE ADDITION MAY BE RESTRICTED TO REASONABLE AMOUNT. ON THE OTHE R HAND, THE LEARNED DR RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW. 8. ON CONSIDERATION OF THE RIVAL SUBMISSIONS WE ARE OF THE VIEW THAT NO INTERFERENCE IS CALLED FOR IN THE MATTER. THE AO INITIALLY NOTED THAT THE ASSESSEE HAS NOT SHOWN ANY WITHDRAWAL FOR HOUSEHOLD PURPOSE BUT LATER ON, THE AO FOUND THAT THE TOTAL WITHDRAWAL IS SHOWN AT RS.29,600/- FOR 4 FAMILY MEMBERS OF THE ASSESSEE INCLUDING HIMSELF. T HE ABOVE AMOUNT IS NOT SUFFICIENT TO MEET OUT THE DAY TO DAY EXPENSES OF THE ASSESSEE. THE LEARNED CIT(A) NOTED THAT THE ASSESSEE EARNED LACS OF RUPEES BY DEALING IN SHARES. THE FINDINGS OF THE LEARNED CITI(A) HAS NOT BEEN REBUTTED THROUGH ANY MATERIAL ON RECORD. CONSIDERING THE MEA GER EXPENSES SHOWN BY THE ASSESSEE ON HOUSEHOLD EXPENDITURE, WE DO NOT FIND IT TO BE A FIT CASE FOR INTERFERENCE. THIS GROUND OF APPEAL OF THE ASSESSEE IS ACCORDINGLY DISMISSED. ITA NOS.4445/AHD/2007 VIJAYKUMAR G. MEHTA (HUF) VS ITO W-2(2), SURAT 5 9. AS A RESULT, THE APPEAL OF THE ASSESSEE IS PARTL Y ALLOWED FOR STATISTICAL PURPOSE ORDER PRONOUNCED ON 30-07-2010 SD/- SD/- (D. C. AGRAWAL) ACCOUNTANT MEMBER (BHAVNESH SAINI) JUDICIAL MEMBER DATE : 30-07-2010 LAKSHMIKANT/- COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE BY ORDER D Y. REGISTRAR, ITAT, AHMEDABAD