SONALI JASUBHAI SHAH, MUMBAI V. ITO 14(1) (3), MUMBAI

ITA 4633/MUM/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 49612 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 1 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-07-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Assessment Year: 2006-2007
• Appeal Filed On: 03-06-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: STANY SALDANHA
• Keywords: Unexplained cash credit; Gift; Principle of natural justice

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH F MUMBAI BEFORE SHRI T.R. SOOD(AM) AND SMT. ASHA VIJAYARAGHAVAN (JM) ITA NO. 4633/MUM/2010 ASSESSMENT YEAR 2006-07 MS. SONALI JASUBHAI SHAH, 6B/9B, SHALIMAR BLDG., 91, MARINE DRIVE, MUMBAI-400 002 PAN AHEPS 1478F VS. THE ITO-14(1)(3), EARNEST HOUSE, NARIMAN POINT, MUMBAI-400 021 (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI STANY SALDANHA RESPONDENT BY: SHRI SANJEEV JAIN DATE OF HEARING : 26.7.2011 DATE OF PRONOUNCEMENT: 29 TH JULY, 2011 O R D E R PER ASHA VIJAYARAGHAVAN (JM) THIS APPEAL PREFERRED BY THE ASSESSEE IS DIRECTED A GAINST THE ORDER DATED 31.3.2010 PASSED BY THE LD. CIT(A)-25 FOR TH E ASSESSMENT YEAR 2006- 07. 2. THE RETURN OF INCOME WAS FILED ON 12.12.2006 DE CLARING TOTAL INCOME OF RS. 2,25,600/-. IN THIS CASE AS PER AIR INFORMAT ION DURING THE F.Y. 2005- 06, THE ASSESSEE HAS DEPOSITED CASH OF RS. 11,85,55 0/- IN SAVING BANK IN THE BANK OF RAJASTHAN, OVERSEAS BRANCH, MUMBAI. THERE AFTER REMINDER LETTER DT. 11.8.2008 WAS ISSUED AND CASE WAS FIXED FOR HEARING ON 20.8.2008. NOBODY ATTENDED ON THE GIVEN DATE. AGAIN REMINDER LETTER WAS ISSUED ON 24.10.2008 ITA NO. 4633/M/10 2 AND CASE WAS FIXED ON 6.11.2008 AND CASE WAS ADJOUR NED. FURTHER SUMMONS U/S. 131 OF THE I.T. ACT DT. 26.12.2008 WERE ISSUED TO THE ASSESSEE ON 26.12.2008 AND THE DETAILS CALLED FOR. NO COMPLIANC E WAS MADE OF THE SUMMONS ISSUED U/S. 131 OF THE I.T. ACT, 1961 ON 30 ,12.2008. THE ASSESSMENT WAS COMPLETED ON THE BASIS OF MATERIAL A VAILABLE ON RECORD BY THE AO. 3. THE AO OBSERVED THAT THE ASSESSEE HERSELF HAS SU BMITTED CONTRADICTORY STATEMENT THAT ONE HAND SHE IS GIVING STATEMENT THA T SHE SOLD JEWELLERY OF GOLD ORNAMENTS WHICH IS RECEIVED BY WAY OF GIFT AND OTHER HAND SHE IS GIVING OTHER STATEMENT THAT THE CASH DEPOSIT IS OUT OF SAV ING OF PAST SEVERAL YEARS AND SALE OF JEWELLERY BY HER MOTHER AND HENCE CASH DEPOSITS CANNOT BE CONSIDERED IN HER HAND. 4. THE AO FURTHER HELD THAT THE DEPOSITS IN JOINT A CCOUNT BELONGS TO ASSESSEE AND IS NOT BELONGING TO HER MOTHER. FURTHE R THE AO HELD THAT THE FACT MERELY FIRST ACCOUNT HOLDERS NAME IS OF HER MOTHER (MADHURI J. SHAH) DOES NOT MEAN THAT THE ALL CASH DEPOSITS APPEARING IN BANK BELONGS TO HER MOTHER WHO EXPIRED AT THE AGE OF 75 YEARS. THE AO HELD THAT THERE ARE NO DETAILS FILED BY THE ASSESSEE WITH RESPECT TO WHO M HER MOTHER HAS ISSUED CHEQUE AND SO IT IS NOT ACCEPTABLE THAT THE SOURCE OF ALL TRANSACTION BELONG TO HER MOTHER AND NOT THE ASSESSEE. IT IS FURTHER OBS ERVED THAT THE ASSESSEE DOES NOT HAVE ANY SUPPORTING DOCUMENTARY EVIDENCE F ROM WHOM THE GOLD ORNAMENTS/JEWELLERY CLAIMED HAS BEEN RECEIVED AS GI FT. IN VIEW OF THE ABOVE, THE AO HELD THAT THE ASSESSEE IS TRYING TO PROVE TH AT RS. 11,25,000/- IS RECEIVED FROM SALE OF GOLD ORNAMENTS (BY MS. SONALI SHAH/ASSESSEE) AND BALANCE RS. 60,000/- BELONGS TO HER MOTHER. ACCORD ING TO THE AO THE ASSESSEE ALSO CLAIMED TO HAVE RECEIVED AMOUNTS FR OM SALE OF VARIOUS GIFTS RECEIVED BY ASSESSEES MOTHER DURING HER LIFE SPAN. 5. AGGRIEVED, ASSESSEE FILED AN APPEAL BEFORE THE L D. CIT(A). THE LD. CIT(A) HELD AS FOLLOWS: ITA NO. 4633/M/10 3 I HAVE CAREFULLY CONSIDERED THE FACTS AND SUBMISSI ONS AND ALSO PERUSED THE ORDER OF THE AO. I FIND THAT THE A O HAS DISCUSSED THE FACTS RELATING TO THE ISSUE INVOLVED IN HAND BY STATING THAT IN THIS CASE AS PER AIR INFORMATION , DURING F.Y. 2005-06, ASSESSEE HAS DEPOSITED CASH OF RS.11,85,000/- IN SAVING BANK ACCOUNT NO.2620101411486 HELD IN BANK OF RAJASTHAN LTD, OVERSEAS BANK MUMBAI. THE STATUTORY NOTICES ALONG W ITH QUESTIONNAIRE AND REMINDER LETTERS WERE ISSUED, BUT NOBODY ATTENDED ON THE GIVEN DATES. THEREFORE, A SH OW CAUSE LETTER WAS ISSUED IN RESPONSE TO WHICH THE AR OF THE APPELLANT FILED A LETTER IN TAPAL. THE AO ALSO IS SUED SUMMONS U/S.131 CALLING FOR SPECIFIC DETAILS AS REC ORDED IN THE ASSESSMENT ORDER BUT NO COMPLIANCE WAS ALSO MAD E TO THE TERMS OF SUMMONS ISSUED U/S.131 OF THE I.T. ACT . IN THE SUBMISSIONS FILED BY THE AR OF THE ASSESSEE IN TAP AL IT WAS CLAIMED THAT THE ASSESSEE WAS JOINTLY HOLDING A N ACCOUNT IN THE SAID BANK WITH HER MOTHER WHO EXPIRE D. THE AMOUNTS IN THE SAID BANK BELONG TO HER MOTHER WHO DEPOSITED THE SAME OUT OF HER PAST SAVINGS AND AMOU NT RECEIVED BY WAY OF GIFTS ETC. IT WAS ALSO EXPLAINED THAT THE ASSESSEE HAD SOLD JEWELLERY CONSISTING OF GOLD ORNA MENTS ON TWO DIFFERENT DATES FOR AN AMOUNT OF RS.6,00,000 /- AND RS.5,25,000/- AND ALSO CLAIMED THAT ORNAMENTS AS RE CEIVED AS GIFTS AND CLAIMED THAT THE CASH DEPOSIT IS OUT O F SAVING OF PAST YEARS AND SALE OF JEWELLERY. NOT SATISFIED WITH THIS EXPLANATION, THE AO AGAIN ISSUED SUMMONS U/S.131 DA TED 26.12.2008 REQUIRING THE ASSESSEE TO PERSONALLY ATT END AND SUBMIT DETAILS AS CALLED FOR ALONG WITH DOCUMEN TARY EVIDENCES ON 30.12.2008, BUT NO COMPLIANCE ON THIS DATE WAS MADE BY THE ASSESSEE TO THE TERMS OF SUMMONS. THEREFORE, THE AO PROCEEDED WITH THE COMPLETION OF ASSESSMENT WITH CERTAIN OBSERVATIONS SUCH AS THE SUBMISSION MADE BY THE ASSESSEE IS A STORY AND SAME IS NOT ACCEPTABLE, IN THE ABSENCE OF ANY DOCUMENTARY EVIDENCE OF GOLD OR ORNAMENTS SOLD SUCH AS SALES BI LLS, COPY OF BANK DEPOSITS RECEIPTS ETC OR ANY GIFTS RECEIPT ETC. THE ASSESSEE HERSELF IS ALSO MAKING CONTRADICTORY STATE MENTS BY STATING THAT SHE SOLD GOLD ORNAMENT WHICH IS RE CEIVED BY WAY OF GIFT AND ON THE OTHER HAND CLAIMING THAT CASH DEPOSIT IS OUT OF SAVINGS OF PAST SEVERAL YEARS AND SALE OF JEWELLERY BY HER MOTHER. THEREFORE, THE STATEMENT G IVEN BY THE ASSESSEE IS FALSE AND THE CLAIM THAT CASH DEPOS ITS BELONGS TO HER MOTHER WHEREAS SHE HERSELF ALSO DEPO SITS VARIOUS CASH ON VARIOUS DATES IN THE SAME BANK ACCO UNT AFTER THE DEATH OF HER MOTHER THAT IS TO THE TUNE O F RS.4.54 LAKHS TILL 4.9.2008. THE ASSESSEE IS ALSO HAVING ON E MORE SAVINGS ACCOUNT IN STANDARD CHARTERED BANK WHEREIN CASH ITA NO. 4633/M/10 4 DEPOSIT IS MORE THAN 6 LAKHS FOR THE PERIOD FROM 01.04.2004 TO 31.03.2006 INCLUDING RS.60,000/- FOR F.Y. 2005-06. THESE DETAILS WERE OBTAINED BY ISSUING NOT ICE U/S.133(6) OF THE I.T. ACT. IN VIEW OF THESE FINDIN GS, THE AO CONCLUDED THAT THE DEPOSITS IN THE JOINT ACCOUNT BE LONG TO THE ASSESSEE AND NOT TO HER MOTHER AS CLAIMED IN TH E LETTER SUBMITTED IN TAPAL. MOREOVER, THE CLAIM OF THE AP PELLANT IS NOT EVIDENCED WITH ANY DOCUMENTS AND MATERIAL BROUG HT ON RECORD. IN THE ABSENCE OF SUCH EVIDENCES THE AMOUNT S DEPOSITED ARE TREATED AS UNEXPLAINED CASH CREDIT U/ S.68 AND RELIANCE IS ALSO PLACED BY THE AO ON VARIOUS DE CISIONS OF HON'BLE COURTS INCLUDING THE APEX COURT. IN THE ABOVE SUBMISSIONS, THE APPELLANT HAS MORE OR LESS REITERATED WHAT HAS BEEN STATED BEFORE THE AO. BUT THE APPELLANT HAS NEITHER DISPUTED NOR CONTROVERTED THE OBSERVATIONS AND FINDINGS OF THE AO BASED ON THE MA TERIAL BROUGHT ON RECORD BY ISSUING NOTICE U/S.133(6) OF T HE I.T. ACT WHICH ESTABLISHED THAT THE APPELLANT HAD BEEN DEPOSITED MONEY IN THE SAID BANK ACCOUNT AND THE SA ME WERE BELONGING TO THE APPELLANT AND THE SUBMISSIONS MADE BY FILLING A LETTER IN TAPAL BEFORE THE AO WERE A LSO CONTRADICTORY ETC. NO MATERIAL EVIDENCES WHATSOEVER FOR THE CLAIM EXCEPT THE COPY OF BANK ACCOUNT INDICATING JO INT ACCOUNT COULD BE FURNISHED. THUS, THE APPELLANT HAS CERTAINLY FAILED IN ITS DUTY TO DISCHARGE THE ONUS OF EXPLAINING AND PROVING THE SOURCE OF DEPOSITS IN IT S BANK ACCOUNT. THEREFORE, I DO NOT FIND ANY INFIRMITY IN THE ACTION OF THE AO IN MAKING ADDITION OF RS.12,45,550/- U/S. 68 OF THE I.T. ACT. HIS ACTION IS UPHELD. THIS GROUND IS DECIDED AGAINST THE APPELLANT. 5.1 AGGRIEVED BY THE ORDERED OF THE LD. CIT(A), ASS ESSEE IS IN APPEAL BEFORE US AND HAS RAISED AN ADDITIONAL GROUND WHICH IS AS FOLLOWS: THE LD. AO ERRED BY NOT GIVING THE APPELLANT OPPOR TUNITY AND THERE BY DENYING NATURAL JUSTICE TO THE APPELLA NT RESULTING IN AN ADDITION OF RS. 12,45,550/- (11,85, 550/- + RS. 60,000/-) 6. THE LD. DEPARTMENTAL REPRESENTATIVE SHRI SANJEEV JAIN VEHEMENTLY OBJECTED TO THE ADMISSION OF THE ADDITI ONAL GROUND AS THE ASSESSEE HAD NOT CO-OPERATED WITH THE AO BY PRESENT ING HERSELF EVEN WHEN SUMMONS WERE ISSUED. ITA NO. 4633/M/10 5 7. WE HEARD BOTH THE PARTIES AND PERUSED THE MATERI AL AVAILABLE ON RECORD. THE LD. COUNSEL FOR THE ASSESSEE MR. STANY SALDANHA PLEADED THAT HE HAS GATHERED ENOUGH EVIDENCE NOW TO SUBSTAN TIATE HER CLAIM AND THEREFORE PLEADED THAT ASSESSEE SHOULD BE GIVEN ONE MORE OPPORTUNITY TO PRESENT HER CASE BEFORE THE AO. 8. WE ARE INCLINED TO ADMIT THE ADDITIONAL GROUND B Y WHICH THE ASSESSEE SHALL REPRESENT ONCE MORE BEFORE THE AO. H OWEVER WE OBSERVE THAT THE ASSESSEE HAS NOT CO-OPERATED WITH THE AO AS IS OBVIOUS FROM THE AOS ORDER REPRODUCED AT PARA-4 HE REINABOVE. WE DEEM IT FIT TO IMPOSE COST OF RS. 1,000/- TO THE A SSESSEE FOR THE INDIFFERENT ATTITUDE METED OUT BEFORE THE LOWER AUT HORITIES. THEREFORE, WE SET ASIDE THE MATTER TO THE FILE OF THE AO TO RE DO THE ASSESSMENT IN ACCORDANCE WITH LAW. 9. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED ON THIS THE OPEN COURT ON 29 TH JULY, 2011 SD/- SD/- (T.R. SOOD) (ASHA VIJAYARAGHAVAN) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED 29 TH JULY, 2011 RJ COPY TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT-CONCERNED 4. THE CIT(A)-CONCERNED 5. THE DR F BENCH TRUE COPY BY ORDER ASSTT. REGISTRAR, I.T.A.T, MUMBAI ITA NO. 4633/M/10 6 DATE INITIALS 1. DRAFT DICTATED ON: 26.7.2011 SR. PS/PS 2. DRAFT PLACED BEFORE AUTHOR: 26.07.2011 SR. PS/PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER: JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER: JM/AM 5. APPROVED DRAFT COMES TO THE SR. PS/PS: SR. PS/PS 6. ORDER PRONOUNCED ON: SR. PS/PS 7. FILE SENT TO THE BENCH CLERK: 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK: SR. PS/PS 9. DATE ON WHICH FILE GOES TO AR 10. DATE OF DISPATCH OF ORDER: