MR.ARUN NATHALAL ZAVERI, MUMBAI V. ITO 13(1)(4), MUMBAI

ITA 4800/MUM/2018

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 4687 (ITAT-MUMBAI)
• Duration Of Justice: 11 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-07-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Appeal Filed On: 09-08-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: CHAITANYA ANJARIA
• Keywords: Unexplained cash credit; Set aside
• Section: 147; 68; 148

Judgement Text

1 ITA 4800/MUM/2018 IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH SMC, MUMBAI BEFORE SHRI SHAMIM YAHYA ACCOUNTANT MEMBER AND SHRI PAWAN SINGH JUDICIAL MEMBER ITA NO. 4800/MUM/2018 (ASSESSMENT YEAR : 2012-13) SHRI ARUN NATHALAL ZAVERI 1, SAHAKAR, 34, NUTAN CHSL, JVPD SCHEME, VILE PARLE (WEST), MUMBAI 400 049 PAN : AADPZ1772H VS ITO-13(1)(4), MUMBAI APPELLANT RESPONDEDNT APPELLANT BY NONE RESPONDENT BY SHRI CHAITANYA ANJARIA SR DR DATE OF HEARING 30.07.2019 DATE OF PRONOUNCEMENT 30.07.2019 O R D E R PER PAWAN SINGH, JM : THIS APPEAL BY ASSESSEE IS DIRECTED AGAINST THE OR DER PASSED BY CIT(A)-21, MUMBAI DATED 21-01-2017. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL :- LEGAL GROUNDS: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) (HEREI NAFTER REFERRED TO AS 'CIT-A') ERRED IN NOT APPRECIATING A FACT THAT IN THE REASONS RECORDED IN WRITING, THE ASSESSING OFFICER DID NOT HAD A BELIEF THAT INCOME CHARGEABLE TO TAX HAD ESCAPED AS SESSMENT. THE ASSESSMENT IS REOPENED WITHOUT APPLICATION OF M IND AND WITHOUT FULFILLING THE REQUIREMENTS OF PROVISIONS O F SEC. 147. THE APPELLANT PRAYS THAT THE ACTION OF LEANED CIT-A IN ACCEPTING THE REOPENING U/S 147 IS BAD IN LAW AND THE ASSESSM ENT BE SET ASIDE. 2. WITHOUT PREJUDICE TO ABOVE ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE CIT-A ERRE D IN NOT APPRECIATING A FACT THAT WHILE FINALIZING ASSESSMEN T THE ASSESSING OFFICER HAS NOT FOUND THAT ANY INCOME HAD ESCAPED A SSESSMENT OUT OF RS.30,00,000/-, FOR WHICH THE ASSESSMENT WAS REOPENED. 2 ITA 4800/MUM/2018 THE ACTION OF ASSESSING OFFICER IS IN VIOLATION OF PROVISIONS OF SEC. 147 AND THE ASSESSMENT SHOULD BE SET ASIDE. OTHER GROUND: 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LEARNED 'CIT-A' ERRED IN CONFIRMING ADDITION OF RS. 13,57,0007- AS UNEXPLAINED CASH CREDIT U/S 68 EVEN AFTER ACCEPT ING THE FACT THAT THE APPELLANT HAS PROVED THE NEXUS BETWEEN WIT HDRAWALS OF CASH FROM BANK AND RE-DEPOSITING IN THE BANK. 2. THE BRIEF FACTS OF THE CASE ARE THAT ASSESSMENT FOR AY 2012-13 WAS REOPENED BY ASSESSING OFFICER (AO) UNDE R SECTION 147 ON 11.03.2016. THE AO RECEIVED INFORMATION THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS IN CASE OF REL IABLE DEVELOPER, IT WAS FOUND THAT THE SAID COMPANY HAD G IVEN CASH LOAN AND ADVANCES TO ASSESSEE OF RS.30 LAKHS. THE SAID TRANSACTION WAS CONSIDERED SUSPICIOUS AND FOR VERIF ICATION AND INVESTIGATION FOR VIOLATION OF SECTION 269SS, THE A SSESSMENT OF ASSESSEE WAS REOPENED U/S 147. NOTICE U/S 148 WA S ISSUED TO THE ASSESSEE ON 11-03-2016. IN RESPONSE TO THE NOTICE U/S 148, THE ASSESSEE VIDE HIS REPLY DATED 28-03-2016 S TATED THAT RETURN FILED ORIGINALLY ON 06-02-2013 MAY BE TREATE D AS RETURN FILED IN RESPONSE TO NOTICE U/S 148. THE ASSESSEE ALSO SOUGHT REASONS FOR REOPENING. AFTER SERVING REASONS FOR R EOPENING, THE AO PROCEEDED TO RE-ASSESS THE INCOME OF THE ASSESSE E AND REQUIRED VARIOUS DETAILS OF CASH DEPOSITS IN DIFFER ENT BANK 3 ITA 4800/MUM/2018 ACCOUNTS. ON PERUSAL OF DETAILS FURNISHED BY ASSES SEE IN RESPECT OF DEPOSITS IN SHAMRAO VITHAL CO-OPERATIVE BANK, THE AO NOTED THAT ASSESSEE HAS DEPOSITED RS.13,57,000 I N HIS ACCOUNT. THE ASSESSEE WAS ASKED TO JUSTIFY THE CAS H DEPOSITS. THE ASSESSEE, IN REPLY DATED 10-08-2016 SUBMITTED T HAT THERE IS NO CASH DEPOSIT IN THE BANK, SO THERE IS NO QUES TION OF UNEXPLAINED CASH CREDIT U/S 68. THE CONTENTION OF ASSESSEE WAS NOT ACCEPTED BY AO. THE AO CONCLUDED THAT IN T HE BANK ACCOUNT WITH SHAMRAO VITHAL CO-OPERATIVE BANK, THE DEPOSIT CLEARLY SHOWS THAT ASSESSEE HAS MADE CASH DEPOSIT O N VARIOUS DATES, SUMMARY OF WHICH WAS PREPARED BY AO AS RECOR DED AT PARA 7 OF THE ASSESSMENT ORDER. THE AO TREATED THE SAID CASH DEPOSIT AS UNEXPLAINED CASH CREDIT U/S 68. ON APPE AL BEFORE CIT(A), THE ACTION OF AO WAS CONFIRMED. FURTHER AG GRIEVED BY THE ACTION OF CIT(A), THE ASSESSEE HAS FILED THE PR ESENT APPEAL BEFORE US. 3. NONE APPEARED ON BEHALF OF THE ASSESSEE WHEN THE CASE WAS TAKEN UP FOR HEARING. PERUSAL OF RECORD REVEAL S THAT ASSESSEE WAS DULY SERVED BY THE NOTICE OF HEARING. DESPITE SERVICE OF NOTICE, THE ASSESSEE NEITHER APPEARED NO R FILED ANY 4 ITA 4800/MUM/2018 DOCUMENTARY EVIDENCE OR WRITTEN EXPLANATION TO SUBS TANTIATE THE GROUNDS OF APPEAL. THEREFORE, WE ARE LEFT WITH NO OPTION BUT TO PROCEED THE APPEAL ON THE BASIS OF MATERIAL AVAILABLE ON RECORD. 4. GROUNDS 1 & 2 RELATE TO REOPENING U/S 147. THE LD. DR FOR THE REVENUE SUBMITS THAT ASSESSMENT WAS REOPENE D ON THE BASIS OF CREDIBLE INFORMATION RECEIVED BY AO DURING ASSESSMENT IN CASE OF RELIABLE DEVELOPERS. THE ASSESSMENT WAS REOPENED BY COMPLYING THE STATUTORY FORMALITIES. THE ASSESS EE CONTESTED THE RE-ASSESSMENT PROCEEDINGS. THERE WAS SUFFICIEN T MATERIAL WITH THE AO FOR MAKING OPINION FOR REOPENING OF THE ASSESSMENT THAT THE INCOME OF THE ASSESSEE ESCAPED ASSESSMENT. 5. WE HAVE CONSIDERED THE SUBMISSION OF THE LD. DR AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE HAVE NOTED THAT THE ASSESSMENT WAS REOPENED ON THE CREDIBLE INFORMA TION FOR MAKING BELIEF THAT THE INCOME OF ASSESSEE HAS ESCAP ED ASSESSMENT. THE AO REOPENED THE ASSESSMENT AFTER S EEKING PRIOR APPROVAL OF JOINT COMMISSIONER OF INCOME-TAX. 5 ITA 4800/MUM/2018 THEREFORE, WE DO NOT FIND ANY MERIT IN GROUNDS 1 & 2 OF THE APPEAL. THESE GROUNDS ARE DISMISSED ACCORDINGLY. 6. GROUND 3 RELATES TO ADDITION OF RS.13,50,000 AS UNEXPLAINED CASH CREDIT. THE LD. DR FOR THE REVENU E SUBMITS THAT DURING THE ASSESSMENT, THE ASSESSEE FAILED TO FURNISH EXPLANATION ABOUT THE CASH DEPOSIT. IN ABSENCE OF EXPLANATION ABOUT THE NATURE AND SOURCE OF THE CREDIT, THE ASSE SSING OFFICER HAD NO OPTION BUT TO TREAT THE CASH CREDIT AS UNEXP LAINED CASH CREDIT U/S 68. 7. WE HAVE CONSIDERED THE SUBMISSION OF LD DR FOR T HE REVENUE AND PERUSED THE MATERIAL ON RECORD. WE HA VE NOTED THAT DURING THE ASSESSMENT, THE AO CONFRONTED THE A SSESSEE WITH THE CASH DEPOSITS ON VARIOUS DATES IN BANK ACC OUNT WITH SHAMRAO VITHAL CO-OPERATIVE BANK. WE HAVE FURTHER NOTED THAT THE AO RECORDED THAT THE ASSESSEE HAS NOT FURNISHED ANY EXPLANATION. BEFORE THE LD.CIT(A), THE ASSESSEE CO NTENDED THAT THE CASH DEPOSIT OUT OF CASH IN HAND AND CASH WITHDRAWAL FROM SHAMRAO VITHAL CO-OPERATIVE BANK. THE DETAILS OF EXTRACT OF CASH BOOK WITH BANK STATEMENT WERE FURNISHED. I T WAS FURTHER STATED THAT THERE IS NO CASE OF UNEXPLAINED CASH CREDIT 6 ITA 4800/MUM/2018 AND THAT OF CASH DEPOSITS WERE OUT OF OPENING CASH ON HAND AND CASH WITHDRAWAL DURING THE YEAR. THE CONTENTIO N OF THE ASSESSEE WAS NOT ACCEPTED HOLDING THAT THE EXISTENC E OF TRANSACTION IN THE BOOKS OF ASSESSEE IS A CONDITION PRECEDENT BEFORE ANY ADDITION U/S 68. THE INITIAL ONUS TO PR OVE THE GENUINENESS LIES ON THE ASSESSEE. ON PERUSAL OF VA RIOUS DETAILS OF BANK ACCOUNT REFLECTING THE TRANSACTION ON VARIO US DATES, THERE HAS TO BE LIVE LINK OF THE QUANTUM AND DATES RELATING TO THE DEPOSITS AND WITHDRAWALS. THE ASSESSEE IS NOT A RETAILER TO PROVE THE CONTENTION THAT CASH WAS FREQUENTLY DEPOS ITED AS A GENERAL BUSINESS REQUIREMENT. THE ASSESSEE IS A DI RECTOR IN A COMPANY AND THAT DEPOSITS WERE FOLLOWED BY IMMEDIAT E TRANSFER TO VARIOUS PARTIES THROUGH CHEQUES OR RTGS . THE LD.CIT(A) CONFIRMED THE ACTION HOLDING THAT CASH DE POSIT HAS BEEN TRANSFERRED ON SUBSEQUENT DATES BY CHEQUE TO C HITAN ZAVERI OR AASHNA CONSTRUCTION AND CONFIRMED THE ACT ION OF AO. BEFORE US, THE ASSESSEE NEITHER APPEARED NOR FURNIS HED ANY STATEMENT OF ACCOUNT OR CASH FLOW STATEMENT ABOUT C ASH IN HAND NOR ANY WRITTEN EXPLANATION FILED ON RECORD. THEREFORE, IN ABSENCE OF ANY EXPLANATION, WE DO NOT FIND ANY R EASON TO 7 ITA 4800/MUM/2018 INTERFERE WITH THE FINDING OF LD. CIT(A). HENCE, G ROUND IS REJECTED. 8. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMISS ED. ORDER PRONOUNCED IN THE OPEN COURT ON 30.07.2019 . SD/- SD/- (SHAMIM YAHYA) (PAWAN SINGH) ACCOUNTANT MEMBER JUDICIALMEMBER MUMBAI, DT : 30 TH JULY, 2019 PK/- COPY TO : 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR BY ORDER ASSTT. REGISTRAR, ITAT , MUMBAI