SANJAY S. AGRAWAL, MUMBAI V. ITO 19(3)(4), MUMBAI

ITA 456/MUM/2011

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 5081 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 10 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-11-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: H
• Next Hearing Date: 18-11-2013
• Assessment Year: 2007-2008
• Appeal Filed On: 17-01-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PITAMBER DAS
• Keywords: Opportunity of being heard
• Section: 68

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL H B ENCH, MUMBAI , , !' #$% , !& ! ' BEFORE SHRI VIJAY PAL RAO, JM AND SHRI N.K. BILLA IYA, AM ./ I.T.A. NO. 456/MUM/2011 ( ( ( ( ( / ASSESSMENT YEAR :2007-08 SHRI SANJAY S. AGRAWAL, S-131, ARADHANA CHS, MIG COLONY, BANDRA(E), MUMBAI-400 051 THE ITO, 19(3), AAYAKAR BHAVAN, MUMBAI-400 020 ) !& ./ * ./PAN/GIR NO. : ADNPA 9635P ( )+ /APPELLANT ) .. ( ,-)+ / RESPONDENT ) )+ . ! / APPELLANT BY : ` SHRI VIMAL PUNMIYA SHRI HIMANSHU GANDHI ,-)+ / . ! /RESPONDENT BY : SHRI PITAMBER DAS / 01& / DATE OF HEARING :18.11.2013 23( / 01& / DATE OF PRONOUNCEMENT : 20.11.2013 !4 / O R D E R PER N.K. BILLAIYA, AM: WITH THIS APPEAL THE ASSESSEE HAS CHALLENGED THE CO RRECTNESS OF THE ORDER OF THE LD. CIT(A)-30, MUMBAI DT.29.10.2010 P ERTAINING TO A.Y. 2007-08. 2. THE FIRST GRIEVANCE OF THE ASSESSEE RELATE TO TH E CONFIRMATION OF THE ADDITION MADE U/S. 69A OF THE ACT AT RS. 28,80,870 /- AND THE SECOND ITA NO.456//2011 2 GRIEVANCE RELATES TO THE CONFIRMATION OF THE ADDIT ION MADE U/S. 68 OF THE ACT AT RS. 2,80,000/-. 3. THE ASSESSEE IS A DEALER IN MOBILE PHONE/SIM CAR D. DURING THE COURSE OF THE SCRUTINY ASSESSMENT PROCEEDINGS , AS PER THE AIR INFORMATION RECEIVED BY THE AO, THE AO CAME TO KNOW THAT THE ASSESSEE HAS DEPOSITED RS. 28,80,870/- IN A SAVINGS ACCOUNT MAINTAINED WITH SARASWAT CO.OP. BANK LTD. ON GOING THROUGH THE DET AILS FILED BY THE ASSESSEE, THE ASSESSING OFFICER OBSERVED THAT THE A SSESSEE HAS NOT FILED ANY DETAILS RELATING TO THIS SAVINGS ACCOUNT. THE ASSESSEE WAS ASKED TO FURNISH THE DETAILS OF THIS SAVINGS BANK ACCOUNT. AIR INFORMATION IN THE CASE OF THE ASSESSEE WAS ALSO PROVIDED TO THE COUNS EL OF THE ASSESSEE. DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS, TH E ASSESSEE WAS ONCE AGAIN SPECIFICALLY ASKED TO FURNISH THE SOURCE OF S UCH DEPOSITS. THE ASSESSEE SUBMITTED A COPY OF BANK STATEMENT. THE A O OBSERVED THAT THE ASSESSEE COULD NOT FURNISH ANY DETAILS/ SUBMISSION REGARDING THE CREDITS APPEARING IN THE SAID BANK ACCOUNT. THE AO FURTHER OBSERVED THAT THE CREDITS APPEARING IN THE SAID BANK ACCOUNT ARE ALSO NOT VERIFIABLE WITH THE INCOME OFFERED BY THE ASSESSEE AS THE AMOUNT OF RS. 28,80,780/- WAS NOT FOUND RECORDED IN THE REGULAR BOOKS OF ACCOUNT MAIN TAINED BY THE ASSESSEE. THE AO WENT ON TO TREAT THE SAID AMOUNT OF RS. 28,80,780/- AS UNEXPLAINED MONEY AND ADDED THE SAME U/S. 69A OF TH E ACT. ON FURTHER PERUSAL OF THE DETAILS FURNISHED BY THE ASSESSEE, T HE AO NOTICED THAT THE ASSESSEE HAS SHOWN ADDITION TO HIS CAPITAL TO THE T UNE OF RS. 7,28,500/-. THE ASSESSEE WAS ASKED TO FURNISH THE SOURCE OF CRE DITS. THE ASSESSEE CLAIMED THAT HE HAS RECEIVED RS. 4,48,500/- FROM HI S FATHER THROUGH BANKING CHANNELS. THE ASSESSEE FURTHER EXPLAINED T HAT HE HAS BROUGHT HIS OLD FURNITURE WORTH RS. 1,25,000/- AND THE SAME HAS BEEN CONSIDERED AS ASSETS OF THE FIRM AND ACCORDINGLY RS. 1,25,000/- W AS CREDITED IN THE ITA NO.456//2011 3 CAPITAL ACCOUNT AND DEBITED TO ASSETS ACCOUNT THROU GH JOURNAL ENTRIES. THE AO ACCEPTED THE SOURCE OF MONEY RECEIVED FROM F ATHER TO THE TUNE OF RS. 4,48,500/- BUT DID NOT ACCEPT THE CAPITAL APPRE CIATION AMOUNTING TO RS. 1,25,000/- ON ACCOUNT OF OLD FURNITURE AND ALSO OBSERVED THAT IN RESPECT OF RS. 1.55 LAKHS, THE ASSESSEE HAS NOT PRO VIDED DETAILS AND WENT ON TO MAKE ADDITION U/S. 68 TO THE TUNE OF RS. 2.80 LAKHS. 4. AGGRIEVED BY THESE TWO ADDITIONS, THE ASSESSEE C ARRIED THE MATTER BEFORE THE LD. CIT(A) BUT WITHOUT ANY SUCCESS. 5. BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE SUBM ITTED A PAPER BOOK EXPLAINING THE TRANSACTIONS MADE IN RESPECT OF THE SAVINGS BANK ACCOUNT IN SARASWAT CO. OP. BANK. THE LD. COUNSEL PRAYED THAT DUE TO SOME UNAVOIDABLE CIRCUMSTANCES, THE ASSESSEE COULD NOT F URNISH THESE DETAILS BEFORE THE LOWER AUTHORITIES, THE SAME SHOULD BE AD MITTED. 6. PER CONTRA, THE LD. DEPARTMENTAL REPRESENTATIVE STRONGLY SUBMITTED THAT THESE DETAILS WERE NEVER FURNISHED BEFORE THE LOWER AUTHORITIES. 7. WE HAVE CAREFULLY PERUSED THE ORDERS OF THE AUTH ORITIES BELOW AND THE RELEVANT MATERIAL EVIDENCES BROUGHT ON RECORD B EFORE US. A PERUSAL OF THE DETAILS FILED BY THE ASSESSEE IN RESPECT OF THE SAVINGS ACCOUNT IN SARASWAT CO. OP. BANK IN RELATION TO THE ADDITION O F RS. 28,80,870/-, WE FIND THAT MOST OF THE TRANSACTIONS HAVE BEEN DONE T HROUGH CHEQUE PAYMENTS AND SINCE THE ENTRIES PERTAIN TO THE BANK STATEMENT, IT CANNOT BE SAID TO BE AFTER THOUGHT. THEREFORE, IN THE INTE REST OF JUSTICE AND FAIR PLAY, WE RESTORE THIS ISSUE BACK TO THE FILES OF TH E AO. THE AO IS DIRECTED TO VERIFY THE DETAILS IN RESPECT OF THE SAVINGS BAN K ACCOUNT AND OTHER RELATED DOCUMENTS WHICH MAY BE SUBMITTED BY THE ASS ESSEE IN SUPPORT OF THE TRANSACTIONS IN THE SAVINGS BANK ACCOUNT. THE AO IS EXPECTED TO GIVE A REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSE SSEE. THE ASSESSEE IS ITA NO.456//2011 4 ALSO DIRECTED TO FURNISH ALL THE NECESSARY DETAILS BEFORE THE AO EXPLAINING HIS SOURCE OF DEPOSITS IN THE SAVINGS BANK ACCOUNT. ISSUE RELATING TO THE ADDITION OF RS. 28,80,870/- IS RESTORED BACK TO THE FILES OF THE AO. 8. REGARDING THE OTHER ADDITIONS OF RS. 2.80 LAKHS , WE FIND THAT ENTRY OF RS. 1,25,000/- PERTAIN TO ON ACCOUNT OF THE AD DITION OF OLD FURNITURE BROUGHT IN THE BOOKS. THE DISPUTE RELATES ONLY TO THE VALUATION OF THE SAID FURNITURE. THE ASSESSEE HAS VALUED THE SAME AT RS. 1.25 LAKHS . IN THE OPINION OF THE AO, THE ASSESSEE HAS NOT FILED ANY D ETAILS TO SUBSTANTIATE HIS CLAIM. IT IS AN UNDISPUTED FACT THAT THIS IS T HE FIRST YEAR OF BUSINESS OF THE ASSESSEE AND BY PREPONDERANCE OF PROBABILITIES THE ASSESSEE MUST BE USING THE SOME FURNITURE IN HIS BUSINESS OF MOBILE/ SIM CARDS. ACCORDING TO THE ASSESSEE, HE HAS INTRODUCED 5 CHAIRS, 2 TABL ES AND 1 CUPBOARD WHICH WERE HIS PERSONAL ASSET AND VALUED THE SAME AT RS. 1.25 LAKHS. IN OUR HUMBLE OPINION, THE ASSESSEE NEED TO SUBSTANTIATE T HE VALUATION OF HIS ASSETS SO INTRODUCED AS CAPITAL. THEREFORE, THIS I SSUE IS ALSO RESTORED BACK TO THE FILES OF THE AO. THE ASSESSEE IS DIRECTED T O BRING COGENT MATERIAL EVIDENCE ON RECORD TO SUBSTANTIATE THE CLAIM OF HIS VALUATION. THE AO IS DIRECTED TO VERIFY THE DETAILS AND DECIDE THE ISSUE AFRESH AFTER GIVING A REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESS EE. THE BALANCE AMOUNT OF RS. 1.55 LAKHS HAS BEEN CLAIMED TO HAVE B EEN RECEIVED FROM HIS BROTHER. IT IS THE SAY OF THE ASSESSEE THAT TH E SAID AMOUNT WAS DIRECTLY PAID BY HIS BROTHER TO BHARATI AIRTEL LTD. A CONF IRMATION IN THIS RESPECT IS FILED BEFORE US, WHICH WAS NOT BEFORE THE LOWER AUTHORITIES. WE, THEREFORE, RESTORE THIS ISSUE ALSO BACK TO THE FIL ES OF THE AO. THE ASSESSEE IS DIRECTED TO FILE THE CONFIRMATION AFRESH BEFORE THE AO. THE AO IS DIRECTED TO VERIFY THE SAME AFTER GIVING A REASONAB LE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. BOTH THE ADDITIONS ARE RES TORED BACK TO THE FILES OF ITA NO.456//2011 5 THE AO TO BE DECIDED AFRESH IN THE LIGHT OF THE DIR ECTIONS GIVEN HEREINABOVE. 9. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 20 TH NOVEMBER, 2013 . !4 / 3( &! 5 6 7 20.11.2013 3 / = SD/ SD/ - ( VIJAY PAL RAO ) ( N.K. BILLAIYA ) /JUDICIAL MEMBER !& / ACCOUNTANT MEMBER MUMBAI; 6 DATED 20/11/2013 . . ./ RJ , SR. PS !4 / ,0 >!(0 !4 / ,0 >!(0 !4 / ,0 >!(0 !4 / ,0 >!(0 / COPY OF THE ORDER FORWARDED TO : 1. )+ / THE APPELLANT 2. ,-)+ / THE RESPONDENT. 3. ? ( ) / THE CIT(A)- 4. ? / CIT 5. @= ,0 , , / DR, ITAT, MUMBAI 6. =A B / GUARD FILE. !4 !4 !4 !4 / BY ORDER, -0 ,0 //TRUE COPY// C CC C / D D D D (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI