MOHD. SOYEB HAJI FAROOQ MOTORWALA, MUMBAI V. INCOME TAX OFFICER-17(2)(3), MUMBAI

ITA 5004/MUM/2017

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 0340 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 4 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-12-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2009-2010
• Appeal Filed On: 21-07-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: JOTHI LAKSHMI NAYAK SR
• Assessee Lawyers: RAHUL K HAKANI
• Keywords: Peak credit; Set aside
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D, BENCH MUM BAI BEFORE SHRI SAKTIJIT DEY, JUDICIAL MEMBER & SHRI G. MANJUNATHA, ACCOUNTANT MEMBE R ITA NO.5004/MUM/2017 ( ASSESSMENT YEAR :2009-10 ) MOHD. SOYEB HAJI FAROOQ MOTORWALA 4 TH FLOOR, HAJI FAROOQ MANSION,91-93, SARANG STREET, CRAWFORD MARKET MUMBAI-400 003 VS. ITO-17(2)(3) AAYKAR BHAWAN, M.K.ROAD MUMBAI-400 020 PAN/GIR NO. A OTPM3577P APPELLANT ) .. RESPONDENT ) REVENUE BY SHRI. JOTHILAKSHMI NAYAK, SR.AR (DR) ASSESSEE BY SHRI. RAHUL K. HAKANI, AR DATE OF HEARING 0 4 /12 /2019 DATE OF PRONOUNCEME NT 04 /12 /201 9 / O R D E R PER G.MANJUNATHA (A.M) : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST, THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS)28, MUMBAI, DATED 21/04/2017 AND IT PERTAINS TO ASSESSMENT YEAR 2009-10 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL:- 1. THE LEARNED COM. OF INCOME TAX (APPEALS) HAS ERR ED IN CONFIRMING THE ADDITION OF RS.1,55,86,802/- BEING UNEXPLAINED CASH DEPOSIT U/S 68 MADE BY THE LEARNED ASSESSING OFFICER. THE LEARNED COM. INCOME TAX (APPEALS) OUGHT TO HAVE APPLIED PEAK THEORY WHENEVER THERE ARE CASH DEPOSITS OUT OF CASH WITHDRAWALS AND AS A CONSEQUENCE COMMISSION OF 0.1% ONLY ON THE NET DEPOSITS SHOULD HAVE BEEN ADDED TO THE INCOME. ITA NO.5004/MUM/2017 MOHD. SOYEB HAJI FAROOQ MOTORWALA 2 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESEE IS AN INDIVIDUAL, FILED HIS RETURN OF INCOME FOR AY 2009 -10, DECLARING TOTAL INCOME AT RS. 2,04,330/-. THE CASE WAS SELECTED FOR SCRUTINY AND DURING THE COURSE OF ASSESSMENT PROCEEDINGS BEFORE THE LD. AO, THE ASSESEE DID NOT APPEAR, DESPITE NUMBER OF OPPORTUNI TIES WERE GIVEN TO EXPLAIN HIS CASE. THEREFORE, THE LD. AO ON THE B ASIS OF INFORMATION AVAILABLE ON RECORD AND ALSO TAKEN NOTE OF BANK STA TEMENTS OBTAINED FROM CANARA BANK, ABDUL REHMAN STREET BRANCH, NOTI CED THAT THE ASSESSEE HAS MADE TOTAL CASH DEPOSITS OF RS. 1,60, 75,362/- FOR THE PERIOD FROM 01/04/2008 TO 31/03/2009. SINCE, THE AS SESEE HAS NOT APPEARED BEFORE THE LD. AO TO EXPLAIN CASH DEPOSIT S FOUND IN BANK ACCOUNT, THE LD. AO HAS MADE ADDITIONS OF RS. 1,55, 86,802/-( RS.1,60,73,362 - RS.4,38,560) BEING DIFFERENCE BETW EEN CASH DEPOSITS AND GROSS RECEIPTS ADMITTED IN RETURN OF I NCOME AS UNEXPLAINED INCOME OF THE ASSESSEE. 4. AGGRIEVED BY THE ASSESSMENT ORDER, THE ASSESSEE PREFERRED AN APPEAL, BEFORE THE LD.CIT(A). BEFORE THE LD.CIT(A), THE ASSESSEE DID NOT APPEARED, BUT FILED WITTEN SUBMISSIONS ON 0 1/03/2013 AND 09/12/2013 AND EXPLAINED THAT CASH DEPOSITS FOUND I N CANARA BANK ACCOUNT ARE RECEIVED FROM M/S. BOMBAY INDORE TRANSP ORT TOWARDS CHEQUE DISCOUNTS WITH BOMBAY MERCANTILE CO-OP BANK. THE ASSESEE FURTHER SUBMITTED THAT IT HAS EARNED COMMIS SION INCOME OF 0.1%, WHICH IS ALREADY INCLUDED IN THE RETURN OF IN COME FILED FOR THE YEAR. THEREFORE, NO ADDITION COULD BE MADE TOWARDS CASH DEPOSITS FOUND IN CANARA BANK ACCOUNT. THE LD.CIT(A) AFTER C ONSIDERING RELEVANT SUBMISSION OF THE ASSESEE AND ALSO TAKEN NOTE OF THE FACT THAT THE NO EVIDENCES HAS BEEN FILED TO EXPLAIN TH E CASE OF THE ASSESEE, CONFIRMED ADDITIONS MADE BY THE AO TOWARDS CASH ITA NO.5004/MUM/2017 MOHD. SOYEB HAJI FAROOQ MOTORWALA 3 DEPOSITS, AS WELL AS LOW WITHDRAWAL FOR HOUSEHOLD EXPENSES. AGGRIEVED BY THE LD.CIT(A) ORDER, THE ASSESEE IS IN APPEAL BEFORE US. 5. THE LD. AR FOR THE ASSESSEE SUBMITTED THAT THE L D.CIT(A) WAS ERRED IN CONFIRMED ADDITIONS MADE TOWARDS CASH DEPO SITS, IGNORING DETAILED SUBMISSIONS FILED BY THE ASSESEE EXPLAINI NG THE MODUS OPERANDI OF THE ASSESSEE TO ISSUE CHEQUES AND TAKE BACK CASH FROM THE PARTIES. THE LD. AR FURTHER SUBMITTED THAT ALTH OUGH, THE ASSESEE HAS NOT APPEARED BEFORE THE LOWER AUTHORITIES, BUT, EXPLAINED HIS CASE WITH CASH DEPOSITS FOUND IN BANK ACCOUNT AND C ORRESPONDING CHEQUE ISSUED TO BOMBAY INDORE TRANSPORT. SIMILARL Y THE ASSESEE HAS ALSO FILED BANK STATEMENTS OF BOMBAY INDORE TRA NSPORT COMPANY TO MATCH CHEQUE ISSUED BY THE ASSESEE WITH BANK ACCOUNT OF THE PARTY, BUT THE LD.CIT(A) IGNORED ALL EVIDENC ES AND CONFIRMED ADDITIONS MADE BY THE LD. AO. HE, FURTHER, SUBMITTE D THAT HE HAD EARNED COMMISSION INCOME OF 0.1% AND THE SAME IS OF FERED TO TAX IN REGULAR RETURN OF INCOME AND HENCE FURTHER ADDITION IS INCORERCT AND NEEDS TO BE DELETED. 6. THE LD. DR FOR THE ASSESEE, ON THE OTHER HAND, S TRONGLY SUPPORTING ORDER OF THE LD.CIT(A) SUBMITTED THAT AL THOUGH, THE ASSESEE CLAIMS THAT HE WAS INVOLVED IN CHEQUE DISCO UNTING BUSINESS FOR COMMISSION, BUT FAILED TO FILE NECESSA RY EVIDENCES, INCLUDING CONFIRMATION FROM THE PARTIES FROM WHOM CASH RECEIVED FOR ISSUING CHEQUES. THEREFORE, THERE IS NO MERIT IN TH E ARGUMENTS OF THE LD. AR FOR THE ASSESEE AND HENCE, THE ADDITIONS MAD E BY THE LD. AO SHOULD BE UPHELD. ITA NO.5004/MUM/2017 MOHD. SOYEB HAJI FAROOQ MOTORWALA 4 7. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE MATE RIAL AVAILABLE ON RECORD AND GONE THROUGH ORDERS OF THE AUTHORITIE S BELOW. IT IS AN ADMITTED FACT THAT THE ASSESEE HAS MADE PERIODIC CA SH DEPOSITS INTO CANARA BANK ACCOUNT AND ISSUED EQUAL AMOUNT OF CHEQ UES TO BOMBAY INDORE TRANSPORT COMPANY. THE ASSESEE CLAIMS THAT HE IS INVOLVED IN CHEQUE DISCOUNTING BUSINESS AND ACCORDI NGLY, ISSUED CHEQUES IN THE NAME OF BOMBAY INDORE TRANSPORT COMP ANY AND THE SAID FIRM DEPOSITED CHEQUES IN BOMBAY MERCANTILE CO -OP BANK AND DRAWN CASH FROM THE BANK. FURTHER, THE PARTY HAS RE TURNED CASH TO THE ASSESEE AND THE SAME HAS BEEN DEPOSITED INTO CA NARA BANK ACCOUNT. ALTHOUGH, THE ASSESEE CLAIMS THAT HE IS IN TO CHEQUE DISCOUNTING BUSINESS AND AMOUNT EQUAL TO CHEQUE IS SUED TO THE BOMBAY INDORE TRANSPORT COMPANY HAS BEEN RECEIVED F ROM SAID PARTY, BUT NO EVIDENCES INCLUDING CONFIRMATION HA S BEEN FILED FROM THE ABOVE PARTY, EITHER BEFORE THE LOWER AUTHORIT IES OR BEFORE US. THEREFORE, WE ARE OF THE CONSIDERED VIEW THAT THE I SSUES NEEDS TO GO BACK TO THE FILE OF THE LD. AO TO ASCERTAIN THE COR RECT FACTS WITH REGARD TO SOURCE OF CASH DEPOSITS FOUND IN CANARA BANK SAVINGS BANK ACCOUNT, IN LIGHT OF THE CLAIM OF THE ASSESSE E THAT THE AMOUNT HAS BEEN RECEIVED FROM BOMBAY INDORE TRANSPORT COMP ANY. HENCE, WE SET ASIDE THE ISSUE TO THE FILE OF THE LD. AO AN D DIRECT HIM TO RE- DO THE ASSESSMENT IN ACCORDANCE WITH LAW. 8. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS A LLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 04 /12 /2019 ITA NO.5004/MUM/2017 MOHD. SOYEB HAJI FAROOQ MOTORWALA 5 SD/- (SAKTIJIT DEY) SD/- (G. MANJUNATHA) JUD ICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED 04/12/2019 THIRUMALESH SR.PS COPY OF THE ORDER FORWARDED TO : BY ORDER, (ASSTT. REGISTRAR) ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY//