ZELIG EXPORTS P. LTD, MUMBAI V. ITO 8(3)(4), MUMBAI

ITA 4996/MUM/2013

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 0766 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 11 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-06-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 27-05-2015
• Assessment Year: 2005-2006
• Appeal Filed On: 02-07-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: N V NADKARNI
• Assessee Lawyers: R C MODI
• Keywords: Unexplained investment
• Section: 68; 69

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES G , MUMBAI , . . , , BEFORE SHRI JOGINDER SINGH, J UDICIAL M EMBER , A ND SH RI N.K. BILLAIYA , A CCOUNTANT M EMBER ITA NO. 4996/MUM/2013 ASSESSMENT YEAR: 20 0 5 - 06 ZELIG EXPORTS PVT. LTD. 1201, BROOKHILL TOWER LOKHANDWALA COMPLEX ANDHERI (W), MUMBAI 400 053 / VS. IT O , WARD - 8(3)(4) MUMBAI / APPELLANT / RESP ONDENT P.A. NO. AAACZ1674Q / REVENUE BY SHRI N.V. NADKARNI / ASSESSEE BY SHRI R.C. MODI / DATE OF HEARING 27 / 5 /2015 / DATE OF ORDER : 04 /6/2015 / O R D E R PER JOGINDER S INGH (JUDICIAL MEMBER) THIS APPEAL IS BY THE ASSESSEE FOR THE ASSESSMENT YEAR 2005 - 06, DIRECTED AGAINST THE IMPUGNED ORDER DATED 28 TH MAY ZELIG EXPORTS PVT. LTD. 2 2013, PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) - 18, MUMBAI. 2. THE FIRST GROUND RAISED BY THE ASSESSEE PERTAINS TO UPHOLDING THE ENTIRE CASH DEPOSITED IN THE BANKS AMOUNTING TO RS.52,13,000, U/S 68 OF THE INCOME TAX ACT, 1961 (HEREINAFTER THE ACT). THE CRUX OF THE ARGUMENT ADVANCED BY SHRI R.C. MODY, LEARNED COUNSEL FOR THE ASSESSEE IS THAT THE ASSESSEE FULFILLED THE INGREDIENTS OF SECTION 68, THEREFORE, THE ADDITION WAS WRONGLY AFFIRMED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS). IT WAS PLEADED THAT THE ASSESSEE HAVING A DOMESTIC SALE, WHICH WAS IN CASH AND IF THE AUDITED ACCOUNTS ARE ACCEPTED B Y THE DEPARTMENT, THEN HOW THE SALE CAN BE DISCARDED. ON THE OTHER HAND, THE LEARNED D.R., MRS. N.V. NADKARNI, DEFENDED THE CONCLUSION DRAWN IN THE IMPUGNED ORDER BY SUBMITTING THAT THERE WAS NO EVIDENCE OF SOURCE OF CASH DEPOSIT , THUS, ONUS HAS NOT BEEN D ISCHARGED BY THE ASSESSEE AND EVEN NO DOCUMENTARY EVIDENCE WAS PRODUCED BY THE ASSESSEE AT ANY STAGE, THEREFORE, THE ADDITION WAS RIGHTLY MADE. 2.1 WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IF THE OBSERVATION MADE IN THE ASSESSMENT ORDER, LEADING TO ADDITION MADE TO THE TOTAL INCOME, CONCLUSION DRAWN IN THE IMPUGNED ORDER, MATERIAL AVAILABLE ON RECORD, ASSERTIONS MADE BY THE LD. RESPECTIVE COUNSELS, IF KEPT IN JUXTAPOSITION AND ANALYZED, WE NOTE THAT THE AMOUNT OF R S.52,13,000, WAS FOUND DEPOSITED IN CASH IN TWO CURRENT BANK ACCOUNTS OF THE ASSESSEE. ON ASKING BY THE ASSESSING OFFICER, ZELIG EXPORTS PVT. LTD. 3 THE ASSESSEE DID NOT FURNISH ANY DETAILS WITH RESPECT TO SOURCE OF SUCH CASH DEPOSITS IN THE BANK ACCOUNT. EVEN ON QUESTIONING BY THE BANK WITH RESPECT TO THE SALES DETAILS, THE ASSESSEE CONTENDED THAT NO SUCH DETAILS ARE AVAILABLE WITH HIM. EVEN THE DAY - TO - DAY DETAILS OF CASH BOOK WERE ALSO NEVER PRODUCED BY THE ASSESSEE RIGHT FROM THE ASSESSMENT STAGE. THE LEARNED COUNSEL MERELY CONTE NDED THAT ESTIMATION OF INCOME MAY BE MADE. WE ARE NOT AGREEING WITH THIS SUGGESTION OF THE LEARNED COUNSEL FOR THE ASSESSEE, BECAUSE THE AMOUNTS WERE DEPOSITED IN CASH ON VARIOUS DATES . IN VIJAYA BANK, THE TOTAL CASH DEPOSITED WAS RS.49,45,000, AND IN THE INDIAN OVERSEAS BANK, THE CASH DEPOSITED WAS RS.2,68,000. THE REQUIREMENT OF SECTION 68 OF THE ACT, IS THAT THE ASSESSEE HAS TO PROVE THE SOURCE OF SUM FOUND WITH THE ASSESSEE AND NATURE OF SOURCE HAS TO BE SATISFACTORILY TO BE EXPLAINED BY THE ASSESSEE I TSELF. IF THE EXPLANATION OF THE ASSESSEE IS AN UNSATISFACTORY, IT MAY BE TREATED AS INCOME OF THE ASSESSEE. THE LAW IS WELL SETTLED THAT ONUS OF PROVING THE SOURCE IS UPON THE ASSESSEE ONLY. OUR VIEW FIND SUPPORT FROM THE DECISIONS FROM HONBLE APEX COURT IN ROSHAN DI HATTI V/S CIT, 107 ITR 938 (SC), KALE KHAN MOHAMMAD HANIF V/S CIT, 50 ITR 1 (SC), SUMATI DAYAL V/S CIT, 214 ITR 801 (SC), KAMAL MOTORS V/S CIT, 131 TAXMAN 155 (RAJ.), RATIO LAID DOWN IN NEMICHAND KOTHARI V/S CIT, 136 TAXMAN 212 (GAUWAHATI), C IT V/S R.S. RATHORE, 212 ITR 390 (RAJ.), CIT V/S KORLAY TRADING COMPANY LTD., 232 ITR 820 (CAL.). SINCE THE ASSESSEE HAS NOT SATISFACTORILY EXPLAINED THE SOURCE OF CASH, THEREFORE, WE FIND NO JUSTIFICATION TO INTERFERE WITH THE UNCONTROVERTED FINDINGS CONT AINED IN THE ZELIG EXPORTS PVT. LTD. 4 IMPUGNED ORDER, THEREFORE, THIS GROUND OF THE ASSESSEE IS HAVING NO MERIT, CONSEQUENTLY, DISMISSED. 3. THE NEXT GROUND PERTAINS TO UPHOLDING THE ADDITION OF RS.5,95,422, AS UNEXPLAINED INVESTMENT U/S 69 OF THE ACT. 3.1 THE CRUX OF THE ARGUMENT IS I DENTICAL TO THE GROUND RAISED BY SUBMITTING THAT THE ADDITION HAS BEEN MADE ON THE BASIS OF TAX AUDIT REPORT WHICH WAS WRONG. ON THE OTHER HAND, THE LEARNED D.R. DEFENDED THE CONCLUSION ARRIVED AT IN THE IMPUGNED ORDER. 3.2 WE HAVE CONSIDERED THE RIVAL SUBMIS SIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE FACTS IN BRIEF ARE THAT ON A PERUSAL OF THE TAX AUDIT REPORT, COLUMN NO.23, THE ASSESSING OFFICER OBSERVED THAT THE ASS ADVANCED LOAN TO SHRI FAIZAL A. KHAN, DIRECTOR OF THE COMPANY, IN CASH AMOUNTING TO RS.11,98,122. THE ASSESSING OFFICER FOUND THAT AS PER BANK ACCOUNT OF THE ASSESSEE WITH THE INDIAN OVERSEAS BANK, THERE WAS CASH WITHDRAWN OF RS.6,00,000, BUT THERE WAS NO CASH WITHDRAWAL FROM VIJAYA BANK. HOWEVER, AS PER THE AUDIT REPORT, THE ASSESSEE PAID A CASH LOAN TO SHRI FAIZAL A. KHAN, AMOUNTING TO RS.11,98,122. THE ASSESSEE DID NOT EXPLAIN THE SOURCE OF CASH LOAN, THEREFORE, THE AMOUNT OF RS.5,95,422 (RS.11,98,122 RS.6,02,700) WAS TREATED AS UNEXPLAINED INVESTMENT U/S 68 OF THE ACT. WE NOTE TH AT RIGHT FROM THE ASSESSMENT STAGE, NO DOCUMENTARY EVIDENCE WAS PRODUCED BY THE ASSESSEE AND MERELY CLAIMED THAT THE RELEVANT BILLS / VOUCHERS WERE LOST WHILE SHIFTING ZELIG EXPORTS PVT. LTD. 5 THE OFFICE. EVEN BEFORE US, NO DOCUMENTARY EVIDENCE WAS PRODUCED . THERE IS UNCONTROVERTE D FINDING THAT AS PER TAX AUDIT REPORT THE ASSESSEE GAVE CASH LOAN OF RS.11,98,122, WHEREAS THE ASSESSEE WITHDREW ONLY RS.6 LAKHS IN CASH FROM HIS BANK ACCOUNT. THUS, THE REMAINING AMOUNT OF RS.5,95,422, WAS RIGHTLY TREATED AS UNEXPLAINED INVESTMENT. THE L EARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ALREADY MENTIONED THE DECISION IN THE CASE OF CIT V/S JAYALAXMI DEVARAJAN, 286 ITR 412 AND THIRD MEMBER DECISION OF THE CHANDIGARH TRIBUNAL IN THE CASE OF BALDEV KRISHAN KAPOOR V/S ACIT. EVEN OTHERWISE, THE R ATIO LAID DOWN IN SANJAY V/S CIT, 154 TAXMAN 101 (M.P) AND CENTURY FOAM PVT. LTD. V/S CIT, 210 ITR 625 (ALL.) FURTHER SUPPORTS THE CASE OF THE REVENUE. THIS GROUND OF THE ASSESSEE IS, THEREFORE, ALSO HAVING NO MERIT, CONSEQUENTLY, DISMISSED. 4. THE LAST GROU ND WITH RESPECT TO DISALLOWANCE OF EXPENSES. THIS GROUND WAS NOT PRESSED BY THE LEARNED COUNSEL FOR THE ASSESSEE AND, THEREFORE, THE GROUND IS DISMISSED. FINALLY, THE APPEAL OF THE ASSESSEE IS DISMISSED. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN TH E PRESENCE OF LEARNED REPRESENTATIVES FROM BOTH THE SIDES AT THE CONCLUSION OF THE HEARING ON 4 TH JUNE 2015 . SD/ SD/ ( N.K. BILLAIYA ) (JOGINDER SINGH) / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI; DATED : 04 /06/2015 ZELIG EXPORTS PVT. LTD. 6 . / PRADEEP J. CHOWDHURY / SR. PRIVATE SECRETARY / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT, MUMBAI. 4 . / CIT(A) - , MUMBAI 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE. / BY ORDER, //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI