JAGDISH N. THAKKAR, MUMBAI V. ITO 23(2)(3), MUMBAI

ITA 4787/MUM/2012

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 88027 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 5 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-01-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: J
• Next Hearing Date: 12-01-2015
• Assessment Year: 2005-2006
• Appeal Filed On: 20-07-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: VIVEK A PERAMPURNA
• Assessee Lawyers: SANJAYKUMAR A THAKKAR
• Keywords: Source of fund
• Section: 143(3)

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL J BE NCH, MUMBAI . , ! ' ' ' ' #$ %&'( , #) *+ # ! BEFORE SHRI D. MANMOHAN, VICE PRESIDENT AND SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER ./I .T.A. NO. 4787/MUM/2012 ( - - - - / ASSESSMENT YEAR : 2005-06 SHRI JAGDISH N. THAKKAR, A/19A, BLUE BELLS, DEVIDAYAL ROAD, MULUND (W), MUMBAI-400 080 / VS. THE ITO, WARD 23(2)(3), PRATYAKSHAKAR BHAVAN, BANDRA KURLA COMPLEX, MUMBAI-400 051 +. #) ./ /0 ./ PAN/GIR NO. :AABPT 4165C ( .1 / APPELLANT ) .. ( 23.1 / RESPONDENT ) .1 4 # / APPELLANT BY: SHRI SANJAYKUMAR A THAKKAR 23.1 5 4 # / RESPONDENT BY: SHRI VIVEK A PERAMPURNA 5 6) / DATE OF HEARING :12.01.2015 7- 5 6) / DATE OF PRONOUNCEMENT :14.01.2015 *#8 / O R D E R PER N.K. BILLAIYA, AM: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LD. CIT(A)-33, MUMBAI DT.28.5.2012 PERTAINING TO A.Y.20 05-06. 2. THE SOLE GRIEVANCE OF THE ASSESSEE IS THAT THE L D. CIT(A) ERRED IN CONFIRMING THE PENALTY LEVIED BY THE AO U/S. 271(1) (C) OF THE ACT. ITA NO. 4787/M/2012 2 3. THE ROOT FOR THE LEVY OF PENALTY LIE IN THE ASSE SSMENT ORDER DT. 31.12.2007 MADE U/S. 143(3) OF THE ACT. DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS, ON THE BASIS OF THE AIR INF ORMATION, THE ASSESSEE WAS ASKED TO EXPLAIN CASH DEPOSITS IN SAVINGS BANK ACCOUNT TO THE TUNE OF RS. 27.55 LAKHS. THE ASSESSEE WAS ALSO ASKED TO FU RNISH THE SOURCE OF CASH DEPOSITS IN THE BANK ACCOUNT WITH SUPPORTING E VIDENCES. THE ASSESSEE FILED A DAILY CASH FLOW STATEMENT CLAIMING RS. 6,85,325/- AS CASH IN HAND AT THE END OF THE PREVIOUS YEAR. THE ASSES SEE ALSO FILED PEAK WORKING OF THE DEPOSITS IN THE BANK AND THE SAME WA S CALCULATED AT RS. 15,12,225/-. THE EXPLANATION FILED BY THE ASSESSEE DID NOT FIND FAVOUR WITH THE AO. THE AO WAS OF THE OPINION THAT THE AS SESSEE HAS FAILED TO FILE THE CAPITAL ACCOUNT FOR THE YEAR AND ALSO FOR EARLIER YEARS. THE AO ALSO REJECTED THE CLAIM OF THE ASSESSEE THAT THE DE POSITS IN THE SAVINGS BANK ACCOUNT HAVE BEEN MADE OUT OF THE WITHDRAWALS. THE AO MADE THE ADDITION OF RS. 27.55 LAKHS AS UNEXPLAINED CASH DEP OSITS. 3.1. THE ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT(A) AND ONCE AGAIN WORKED OUT THE PEAK CASH DEPOSIT AND CONVINC ED THE LD. CIT(A) THAT THE PEAK OF THE CASH BALANCE IS RS. 15,12,225/ -. THE LD. CIT(A) CONFIRMED THE ADDITION OF RS. 15,12,225/- IN THE PL ACE OF RS. 27.55 LAKHS ADOPTED IN THE ASSESSMENT ORDER. 3.2. THE ASSESSEE FURTHER PREFERRED AN APPEAL BEFOR E THE TRIBUNAL AND CLAIMED TO HAVE OPENING CASH BALANCE OF RS. 6,85,32 5/- AND ALSO CLAIMED THAT THE DEPOSITS WERE MADE OUT OF THE WITHDRAWALS. AFTER CONSIDERING THE FACTS AND THE SUBMISSIONS, THE TRIBUNAL IN ITA NO. 1475/M/09 CONSIDERED THE EXCESS DEPOSITS AT RS. 6.05 LAKHS AND GAVE CRED IT ON ESTIMATE BASIS FOR THE CASH AVAILABLE AT THE BEGINNING OF THE YEAR AT RS. 25,000/- AND RESTRICTED THE ADDITION TO RS. 5.80 LAKHS. ITA NO. 4787/M/2012 3 4. WITH THE ABOVE STATED FACTS, THE PENALTY HAS BEE N LEVIED U/S. 271(1)(C) OF THE ACT. IN THE PENALTY PROCEEDINGS, THE ASSESSEE STATED THAT THE ADDITIONS HAVE BEEN MADE ON PRESUMPTIONS FORMUL ATED BY THE AO AND THE PRESUMPTIONS WOULD NOT JUSTIFY THE LEVY OF PENA LTY U/S. 271(1)(C) OF THE ACT. THE AO WAS OF THE OPINION THAT THE ASSESS EE HAS NO EXPLANATION IN RESPECT OF THE UNEXPLAINED CASH DEPOSITED IN HIS BANK ACCOUNT. THE AO PROCEEDED BY LEVYING MINIMUM PENALTY. 5. AGGRIEVED BY THIS, THE ASSESSEE CARRIED THE MATT ER BEFORE THE LD. CIT(A) BUT WITHOUT ANY SUCCESS. 6. AGGRIEVED BY THIS, THE ASSESSEE PREFERRED AN APP EAL BEFORE US. THE LD. COUNSEL FOR THE ASSESSEE REITERATED WHAT HAS B EEN SUBMITTED IN THE QUANTUM PROCEEDINGS. IT IS THE SAY OF THE LD. COUN SEL THAT THE ENTIRE ADDITION HAS BEEN MADE ON ESTIMATE BASIS AND THEREF ORE PENALTY CANNOT BE LEVIED U/S. 271(1)(C) OF THE ACT. THE LD. COUNSEL RELIED UPON THE DECISION OF THE HONBLE HIGH COURT OF RAJASTHAN IN THE CASE OF KRISHI TYRE RETREADING & RUBBER INDUSTRIES 44 TAXMANN. COM 9 (RAJ). THE LD. COUNSEL ALSO RELIED UPON THE DECISION OF THE TRIBUN AL CHANDIGARH BENCH IN THE CASE OF PREM CHAND VS ACIT 52 TAXMANN. COM 9 5. 7. PER CONTRA, THE LD. DEPARTMENTAL REPRESENTATIVE SUPPORTED THE ORDERS OF THE LOWER AUTHORITIES. 8. WE HAVE CAREFULLY PERUSED THE ORDERS OF THE AUTH ORITIES BELOW. WE HAVE ALSO CONSIDERED THE ASSESSMENT ORDER AND THE A PPELLATE ORDERS IN THE QUANTUM PROCEEDINGS. IT IS AN UNDISPUTED FACT THAT THE ASSESSEE WAS FOUND TO HAVE DEPOSITED CASH IN HIS SAVINGS BANK ACCOUNT TO THE TUNE OF RS. 27.55 LAKHS. THE CLAIM OF THE ASSESSEE THAT THE DE POSITS HAVE BEEN MADE ITA NO. 4787/M/2012 4 OUT OF WITHDRAWALS HAS BEEN ACCEPTED BY THE TRIBUNA L BY ITS ORDER IN ITA NO. 1475/M/09. HOWEVER, AT THE SAME TIME, THE TRIB UNAL HAS CONFIRMED THE ADDITION TO THE EXTENT OF RS. 5.80 LAKHS. THE CLAIM OF THE ASSESSEE THAT THE ADDITION IS MADE ON ESTIMATE BASIS IS TOTALLY I NCORRECT AND AGAINST THE FACTS OF THE CASE. THE ADDITION HAS BEEN SUSTAINED ON THE BASIS OF CASH DEPOSITED IN THE SAVINGS BANK ACCOUNT AND IT IS NOT AN ESTIMATED FIGURE BUT ACTUAL DEPOSITS MADE BY THE ASSESSEE. THEREFORE, T HE DECISIONS RELIED UPON BY THE ASSESSEE ARE MISPLACED. WE FIND THAT I N THE QUANTUM PROCEEDINGS AS WELL AS THE PENAL PROCEEDINGS, NOWHE RE THE ASSESSEE HAS SHOWN HIS SOURCES OF INCOME WHETHER HE IS DOING ANY BUSINESS. THE ASSESSEE HAS ALSO NOT FILED BALANCE SHEET/CAPITAL A CCOUNTS TO PROVE THE AVAILABILITY OF CASH AS NO DIRECT EVIDENCES HAVE BE EN BROUGHT ON RECORD TO ESTABLISH THE NEXUS BETWEEN THE AVAILABILITY OF CAS H AND DEPOSITS MADE IN THE BANK ACCOUNT. IN OUR OPINION, LEVY OF PENALTY U/S. 271(1) OF THE ACT IS JUSTIFIED ON THE UNEXPLAINED CASH DEPOSIT OF RS. 5.80 LAKHS MADE BY THE ASSESSEE IN HIS SAVINGS BANK ACCOUNT. DISMISSING T HE APPEAL FILED BY THE ASSESSEE, WE DIRECT THE AO TO RECOMPUTE THE PENALTY ON THE ADDITION OF RS. 5.80 LAKHS. 9. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 14 TH JANUARY, 2015 SD/- SD/- (D.MANMOHAN ) (N.K. BILLAIYA) ! /VICE PRESIDENT #) *+ / ACCOUNTANT MEMBER MUMBAI; 9* DATED : 14 TH JANUARY, 2015 . . ./ RJ , SR. PS ITA NO. 4787/M/2012 5 *#8 *#8 *#8 *#8 5 55 5 26% 26% 26% 26% :#%-6 :#%-6 :#%-6 :#%-6 / COPY OF THE ORDER FORWARDED TO : 1. .1 / THE APPELLANT 2. 23.1 / THE RESPONDENT. 3. ; ( ) / THE CIT(A)- 4. ; / CIT 5. %<= 26 , , / DR, ITAT, MUMBAI 6. = > / GUARD FILE. *#8 *#8 *#8 *#8 / BY ORDER, 3%6 26 //TRUE COPY// / / / / / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI