ASST CIT 25(2), MUMBAI V. MOHANDAS T AIDASANI, MUMBAI

ITA 5291/MUM/2013

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 3666 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-08-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 23-07-2015
• Assessment Year: 2010-2011
• Appeal Filed On: 31-07-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: CHANDRA VIJAY
• Assessee Lawyers: DR P DANIEL; S M MAKHIJA
• Keywords: Unexplained investment; Deemed to accrue or arise in india
• Section: 69C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI B BENCH, MUMBAI BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER, AND SHRI RAJESH KUMAR, ACCOUNTANT MEMBER. ITA. NO. 5291/MUM/2013 (ASSESSMENT YEAR:2010-11) ASSTT.CIT-25(2), MUMBAI APPELLANT VS. SHRI MOHANDAS T AIDASANI 1-2, JASOTA NIWAS, 1 ST CARTER ROAD, BORIVALI (EAST) MUMBAI 400 066 RESPONDENT PAN: AAAPA9029P /BY APPELLANT : SHRI CHANDRA VIJAY, D.R. /BY RESPONDENT : DR. P. DANIEL & SHRI S. M. MA KHIJA, A.R. /DATE OF HEARING : 11.08.2016 /DATE OF PRONOUNCEMENT : 12.08.2016 ORDER PER SHAILENDRA KUMAR YADAV, J.M: THIS APPEAL HAS BEEN FILED BY REVENUE AGAINST THE O RDER OF COMMISSIONER OF INCOME-TAX (APPEALS)-35, MUMBAI, DA TED 13.05.2013 FOR A.Y. 2010-11 ON FOLLOWING GROUNDS: ITA NO.5291/MUM/13 A.Y. 10-11 [ACIT VS. MOHANDAS T AIDASANI) PAGE 2 1. ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDIT ION OF RS.57,51,784/- WHICH WAS MADE BY INVOKING THE PROVISIONS OF SECTION 69C OF THE I.T. ACT BY TREATI NG THE PURCHASE ARE GENUINE. 2. ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE AN D IN LAW, THE LD. CIT(A) ERRED IN RELYING UPON JUDGMENT IN THE CASE OF CIT VS NIKUNJ EXIMP ENTERPRISES PVT. LT D. WITHOUT APPRECIATING THAT THE FACTS INVOLVED IN THE APPELLANTS CASE ARE DIFFERENT FROM THE FACTS OF TH E ABOVE CASE LAW. 2. ASSESSEE IS AN INDIVIDUAL AND HE FILED HIS RETU RN OF INCOME ADMITTING TOTAL INCOME OF RS.21,27,575/-. A SSESSING OFFICER IN SCRUTINY COMPLETED THE ASSESSMENT U/S.14 3(3) OF THE ACT DETERMINING THE TOTAL INCOME OF RS.78,79,360/-. 2.1 MATTER WAS CARRIED BEFORE THE FIRST APPELLATE A UTHORITY, WHEREIN VARIOUS CONTENTIONS WERE RAISED ON BEHALF O F ASSESSEE AND HAVING CONSIDERED THE SAME, CIT(A) GRANTED RELI EF TO ASSESSEE TO THE EXTENT OF RS.57,51,784/- AS DISCUSS ED BY HIM. 2.2 SAME HAS BEEN OPPOSED BEFORE US ON BEHALF OF RE VENUE INTER ALIA SUBMITTED THAT CIT(A) ERRED IN DELETING THE ADDITION OF RS.57,51,784/- WHICH WAS MADE BY INVOKING THE PROVI SIONS OF SECTION 69C OF THE ACT BY TREATING THE PURCHASE ARE GENUINE. ACCORDINGLY, ORDER OF CIT(A) BE SET ASIDE AND THAT OF ASSESSING OFFICER BE RESTORED. ON THE OTHER HAND, LD. AUTHOR IZED REPRESENTATIVE SUPPORTED THE ORDER OF CIT(A). 2.3 AFTER GOING THROUGH RIVAL SUBMISSIONS AND PERUS ED THE MATERIAL ON RECORD, WE FIND THAT ASSESSING OFFICER HAS MADE ITA NO.5291/MUM/13 A.Y. 10-11 [ACIT VS. MOHANDAS T AIDASANI) PAGE 3 ADDITION OF RS.57,51,784/- U/S.69C OF THE ACT AS UN EXPLAINED EXPENDITURE. THE PROVISIONS OF SECTION 69C OF THE INCOME TAX ACT, 1961 READS AS UNDER: WHERE IN ANY FINANCIAL YEAR AN ASSESSEE HAS INCURR ED ANY EXPENDITURE AND HE OFFERS NO EXPLANATION ABOUT THE SOURCE OF SUCH EXPENDITURE OR PART THEREOF, OR THE EXPLANA TION, IF ANY, OFFERED BY HIM IS NOT, IN THE OPINION OF THE ( ASSESSING) OFFICER, SATISFACTORY, THE AMOUNT COVERED BY SUCH EXPENDITURE OR PART THEREOF, AS THE CASE MAY BE, MA Y BE DEEMED TO BE THE INCOME OF THE ASSESSEE FOR SUCH FI NANCIAL YEAR. IT IS EVIDENT FROM THE CLEAR READING OF SECTION 69C OF THE ACT THAT SAME APPLIES IN FOLLOWING TOW CIRCUMSTANCES; I. FIRSTLY, AN EXPENDITURE HAVE BEEN INCURRED AND; II. SECONDLY, THE ASSESSEE FAILS TO INDICATE SATISF ACTORILY THE SOURCES OF SUCH EXPENDITURE OR ANY PART THEREOF. 2.4 THIS IS DEEMED PROVISION WHEREBY SUCH UNEXPLAIN ED EXPENDITURE OR PART THEREOF IS TO BE TREATED AS THE INCOME OF ASSESSEE FOR SUCH YEAR. THUS, THE PROVISION APPLY ONLY WHERE AN EXPENDITURE HAVE BEEN CLAIMED AS REVENUE EXPENSE S IN COMPUTING THE INCOME OF THE YEAR AND THE SOURCE OF SUCH EXPENDITURE COULD NOT BE PROVED SATISFACTORILY. ASS ESSING OFFICER HAS NOT PROVED THAT THE TWO CONDITIONS AS M ENTIONED IN SECTION 69C OF THE ACT HAS BEEN HIT IN ASSESSEES C ASE. UNDER THE PROVISIONS OF 69C OF THE INCOME TAX ACT, 1961, ADDITIONS ON ACCOUNT OF UNEXPLAINED INVESTMENTS CAN BE MADE A S DEEMED INCOME OF ASSESSEE, IF ASSESSEE HAS MADE INV ESTMENTS ITA NO.5291/MUM/13 A.Y. 10-11 [ACIT VS. MOHANDAS T AIDASANI) PAGE 4 WHICH ARE NOT RECORDED IN THE BOOKS MAINTAINED BY A SSESSEE AND ASSESSEE OFFERS NO EXPLANATION ABOUT THE NATURE AND SOURCE OF INVESTMENTS OR THE EXPLANATION OFFERED BY ASSESSEE IS IN THE OPINION OF ASSESSING OFFICER NOT SATISFACTOR Y. AS THE EXPENDITURE WAS ACCOUNTED IN THE REGULAR BOOKS, THE SOURCE IS OBVIOUSLY EXPLAINED. THE PROVISIONS OF SECTION 69C OF THE ACT ARE NOT APPLICABLE AS THERE WAS NO UNACCOUNTED EXPE NDITURE. ONCE THE SALES ARE ACCEPTED, THE PURCHASES CANNOT B E TREATED AS INGENUINE IN THOSE CASES WHERE ASSESSEE HAD SUBM ITTED ALL DETAILS OF PURCHASES AND PAYMENTS WERE MADE BY CHEQ UES, MERELY BECAUSE THE SELLERS/SUPPLIERS COULD NOT BE P RODUCED BEFORE THE ASSESSING OFFICER BY ASSESSEE. IN THIS CASE, SALES ARE NOT IN DISPUTE AND PAYMENTS WERE MADE THROUGH BANKI NG CHANNEL AND BY CHEQUE. THERE IS NOTHING ON RECORD TO SUGGEST THAT MONEY HAS COME BACK TO ASSESSEE IN ANY MANNER. NOTICES COMING BACK, DOES NOT MEAN, THOSE PARTIES WERE BOGU S. THEY ARE JUST DENYING THEIR BUSINESS TO AVOID SALES TAX/ VAT ETC. STATEMENT BY THESE PARTIES CANNOT BE CONCLUDED ADVE RSELY IN ISOLATION AND WITHOUT CORROBORATING EVIDENCES AGAIN ST ASSESSEE. NO CROSS EXAMINATION HAS BEEN OFFERED BY ASSESSING OFFICER TO ASSESSEE TO CROSS EXAMINE THE RELEVANT PARTIES. THE FAILURE TO PRODUCE PARTIES CANNOT BE CONSIDERED ADVERSELY AGAI NST ASSESSEE. THUS, IN FACTS AND CIRCUMSTANCES OF THE CASE AND IN VIEW OF OUR LEGAL FACTUAL DISCUSSION, CIT(A) WAS JU STIFIED IN DELETING THE ADDITION MADE BY ASSESSING OFFICER OF RS.57,51,784/- U/S.69C OF THE ACT. SAME IS UPHELD. ITA NO.5291/MUM/13 A.Y. 10-11 [ACIT VS. MOHANDAS T AIDASANI) PAGE 5 3. IN THE RESULT, THE APPEAL FILED BY REVENUE IS DI SMISSED. PRONOUNCED IN THE OPEN COURT ON THIS THE 12 TH DAY OF AUGUST, 2016. SD/- SD/- ( RAJESH KUMAR ) (SHAILENDRA KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBE R MUMBAI: DATED 12/08/2016 TRUE COPY S.K.SINHA / COPY OF ORDER FORWARDED TO:- 1. / REVENUE 2. / ASSESSEE 3. / CONCERNED CIT 4. - / CIT (A) 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE. BY ORDER / , / , ,