MUKESH JAYANTILAL SHAH, MUMBAI V. DCIT CEN CIR 36, MUMBAI

ITA 5288/MUM/2009

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 1433 (ITAT-MUMBAI)
• Duration Of Justice: 9 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-06-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 11-06-2010
• Assessment Year: 2005-2006
• Appeal Filed On: 15-09-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K R DAS
• Assessee Lawyers: M SUBRAMANIAN
• Keywords: Loose papers

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI SMC BENCH BEFORE SHRI T.R.SOOD, AM I.T.A.NOS.5288 ,5289 & 5285/MUM/2009 A.YRS.2005-06, 2006-07 & 2007-08 MUKESH JAYANTILAL SHAH, 167, RADHA GULLY, SWADESHI MARKET, KALBADEVI, MUMBAI 400 002. PAN NO.AAD[S 0912 P VS. DY. COMMISSIONER OF I.T., CENTRAL CIRCLE 36, MUMBAI (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI M.SUBRAMANIAN. REVENUE BY : SHRI K.R.DAS. O R D E R PER T.R.SOOD, AM: THESE APPEALS OF THE ASSESSEE ARE DIRECTED AGAINST CIT[A] S SEPARATE ORDERS DATED 15-7-2009, 15-7-2009 AND 17-7 -2009 FOR THE ASSESSMENT YEARS 2005-06, 2006-07 AND 2007-08 RESPE CTIVELY. 2. IN ALL THESE APPEALS IDENTICAL GROUNDS HAVE BEEN RAISED OBJECTING TO THE ADDITIONS MADE BY THE AO ON ACCOUN T OF LOOSE PAPERS FOUND DURING THE SEARCH. 3. AFTER HEARING BOTH THE PARTIES, I FIND THAT A SE ARCH WAS CARRIED OUT IN ASSESSEES GROUP OF CASES AND SINCE ASSESSEE WAS ALSO OCCUPYING A FLAT IN THE SAME BUILDING, SEARCH WAS C ONDUCTED IN HER CASE ALSO. DURING THE SEARCH, CERTAIN LOOSE PAPERS WERE FOUND THROUGH WHICH SOME EXPENSES HAD BEEN INCURRED. ON ENQUIRY, ASSESSEE FILED CERTAIN EXPLANATIONS WHICH WERE FOUND TO BE NOT SAT ISFACTORY. 2 ULTIMATELY, AO ADDED A SUM OF RS.1,20,633/-, RS.1,3 6,316/- AND RS.27,934/- FOR A.YRS. 2005-06, 2006-07 AND 2007-08 RESPECTIVELY. 4. BEFORE THE LD. CIT[A] IT WAS MAINLY CONTENDED THAT ASSESSEE WAS MAINTAINING TWO SETS OF ACCOUNTS, OUT OF WHICH ONE RELATED TO THE BUSINESS DEALINGS AND THE OTHER RELATED TO PERSONAL DEALINGS AND ALL THE PERSONAL TRANSACTIONS WERE RECORDED IN THE PERSONAL CASH BOOK, WHICH WOULD EXPLAIN THE SOURCE FOR ALL THE EXPENSES. THE LD. CIT[A] DECIDED ALL THE APPEALS IN IDENTICAL MANNER VIDE PARA 4.2,W HICH IS AS UNDER: I HAVE CONSIDERED THE FACTS OF THE ISSUE AND THE W RITTEN SUBMISSIONS MADE BY THE AR BUT DO NOT FIND ANY MERIT IN THEM. I N FACT, THE AR OF THE APPELLANT IS ADMITTING THAT THE AO HAS NOT MADE WRONG ADDITIONS. THE AR IS ALSO EXPLICITLY ADMITTING THAT THE EXPEND ITURE WAS INCURRED OUT OF CASH BOOK WHICH COULD BE TERMED AS CASH BOO K NO.2. HENCE, I SEE NO REASON TO INTERFERE IN THE ORDER OF THE AO . THE EXPENDITURE BEING ADMITTEDLY UNACCOUNTED, THE ADDITION MADE BY THE AO IS CONFIRMED. 5. BEFORE ME THE LD. COUNSEL OF THE ASSESSEE SUBMIT TED THAT THE CIT[A] SHOULD NOT HAVE DISMISSED APPEAL MERELY BY SAYING THAT EXPENDITURES INCURRED OUT OF CASH BOOK NO.2 WERE WI THOUT SOURCE. PERHAPS, HE HAS NOT UNDERSTOOD THE DIFFERENCE BETWE EN BUSINESS CASH BOOK AND PERSONAL CASH BOOK. HE ALSO SUBMITTED THAT IN RESPECT OF SOME OF THE EXPENSES LIKE PURCHASE OF AN AIR-CONDIT IONER, IN FACT, A LOAN WAS RAISED FROM THE BANK, WHICH WAS RECORDED I N THE PERSONAL CASH BOOK. HE REFERRED TO THE VARIOUS PAGES OF THE PAPER BOOK WHICH GIVE DETAILS OF PAPERS FOUND DURING THE SEARCH AS W ELL AS PERSONAL CASH BOOK AND TRIED TO JUSTIFY THE EXPENSES. 6. ON THE OTHER HAND, THE LD. DR, RELIED ON THE ORD ERS OF THE LOWER AUTHORITIES. 3 7. I HAVE CONSIDERED THE RIVAL SUBMISSIONS CAREFULL Y. I FIND THAT PERHAPS THE LD. CIT[A] HAS NOT UNDERSTOOD THE DIFF ERENCE BETWEEN THE BUSINESS CASH BOOK AND PERSONAL CASH BOOK WHICH WER E DESIGNATED AS CASH BOOK NO.1 AND CASH BOOK NO.2. PERSONAL CASH BO OK CANNOT BE BRUSHED ASIDE MERELY BECAUSE IT IS KNOWN AS CASH BO OK NO.2. I FURTHER FIND THAT THE AO HAS ALSO NOT GIVEN ANY REASONS AS TO WHY HE WAS NOT SATISFIED WITH THE EXPLANATION OFFERED BY THE ASSES SEE. THEREFORE, IN THE INTEREST OF JUSTICE, I SET ASIDE THE ORDER OF T HE LD. CIT[A] AND REMIT THE MATTER BACK TO THE FILE OF THE AO FOR RE-EXAMIN ATION OF THE ISSUE. NEEDLESS TO SAY, THAT ASSESSEE SHOULD BE GIVEN AN A DEQUATE OPPORTUNITY OF HEARING AND AO SHOULD ALSO CONSIDER CASH BOOK NO.2 AND THEN DECIDE THE ISSUE IN ACCORDANCE WITH THE LA W. 8. IN THE RESULT, ASSESSEES APPEALS ARE ALLOWED FO R STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 18 TH DAY OF JUNE, 2010. S D/- (T.R.SOOD) ACCOUNTANT MEMBER MUMBAI: 18 TH JUNE, 2010. P/-*