RAVINDRA PRATAPRAI DOSHI, MUMBAI V. INCOME TAX OFFICER 29(3)(1), MUMBAI

ITA 53/MUM/2018

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 8310 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-06-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2011-2012
• Appeal Filed On: 04-01-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: D G
• Keywords: Unexplained cash credit; Income from undisclosed sources; Transactions in derivatives
• Section: 143(3); 68

Judgement Text

P A G E | 1 ITA NO. 53/MUM/2018 AY. 2011 - 12 RAVINDRA PRATAPRAI DOSHI VS. THE INCOME TAX OFFICER, WARD 29(3)(1) IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, MUMBAI BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER AND SHRI RAVISH SOOD, JUDICIAL MEMBER ITA NO.53/MUM/2018 (ASSESSMENT YEAR: 2011 - 12 ) RAVINDRA PRATAPRAI DOSHI ROOM NO. 6, A WING, PREMROSE, CHS, DADASAHEB GAIKWAD ROAD, TAMBE NAGAR, MULUND (E) MUMBAI - 400080 VS. THE INCOME TAX OFFICER, WARD 29(3)(1), 305, C - 10, PRATYAKSH KAR BHAVAN, BANDRA KURLA COMPLEX BANDRA (EAST), MUMBAI - 400051 PAN AASPD6694B (APPELLANT) (RESPONDENT) APPELLANT BY: NONE RESPONDENT BY: SHRI D.G.PANSARI, SR. D.R DATE OF HEARING: 25 .06.2019 DATE OF PRONOUNCEMENT: 2 8 .06.2019 O R D E R PER RAVISH SOOD, JM THE PRESENT APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER PASSED BY THE CIT(A) - 40, MUMBAI, DATED 16.10.2017 , WHICH IN TURN ARISES FROM THE ORDER PASSED BY THE A . O UNDER SEC.143(3) R.W.S 147 OF THE INCOME TAX ACT, 1961 (FOR SHORT ACT), DATED 26.02.2016. THE ASSESSEE HAS ASSAILED THE OR DER OF THE CIT(A) BY RAISING THE FOLLOWING GROUNDS OF APPEAL BEFORE US: 1. IN THE COURSE OF ASSESSMENT U/S. 143(3) R.W.S.147 OF THE I . T ACT, 1961, THE AO HAS MADE ADDITION OF RS. 2,46,88,510/ - ON ACCOUNT OF UNEXPLAINED CASH DEPOSIT MADE TO THE SAVING BANK ACCOUNT. P A G E | 2 ITA NO. 53/MUM/2018 AY. 2011 - 12 RAVINDRA PRATAPRAI DOSHI VS. THE INCOME TAX OFFICER, WARD 29(3)(1) 2. WITHOUT PREJUDICE TO THE ABOVE GROUNDS OF APPEAL, THE ID. CIT (A) HAS ERRED IN MAKING ADDITION OF RS. 24,15,737/ - ON ACCOUNT OF SHORT TERM CAPITAL GAIN ON SALE OF DERIVATIVE/COMMODITIES. 3. AGGRIEVED BY THE ABOVE, THE APPELLANT HAS PREFERRED THE PRESENT APPEAL BEFORE YOUR HONOR. 2. BRIEFLY STATED, SURVEY PROCEEDINGS WERE CONDUCTED AT THE PREMISES OF THE ASSESSEE UNDER SEC.133A ON 18.10.2013. DURING THE COURSE OF THE SURVEY PROCEEDINGS , THE ASSESSEE ON BEING CONFRONTED WITH THE CASH DEPOSITS AGGREGATING TO RS.2,46,88,510/ - IN HIS SB ACCOUNT NO. 021201200035 WITH COSMOS COOPER ATIVE BANK LTD., BRANCH: JHAVERI BAZAR, MUMBAI FOR THE YEAR UNDER CONSIDERATION, ADMITTED , THAT THE SAME WAS HIS INCOME FROM UNDISCLOSED SOURCES . SUBSEQUENTLY , IT WAS GATHERED BY THE A.O THAT THE ASSESSEE WAS ALSO OPERATING THREE BANK ACCOUNTS WHICH WERE HELD BY HIM WITH COSMOS COOPE RATIVE BANK LTD. BRANCH: JHAVERI BAZAR, MUMBAI, SINCE F INANCIAL YEAR 2006 - 07 AND ONWA RDS , IN THE NAME OF HIS PR OPRIETARY CONCERN S , AS UNDER: SR. NO. NAME IN WHICH ACCOUNT WAS MAINTAINED A/C. NO. 1. R.P. TRADING CO. 021204301220165 2. MONTEX ENTERPRISES 021204301990166 3. M/S DOSHI TRADING CO. 021204301220049 ON THE BASIS OF THE AFORESAID INFORMATION THE A.O REOPENED THE CASE OF THE ASSESSEE UNDER SEC. 147 OF THE ACT. HOWEVER, THE ASSESSEE FAILED TO COMPLY WITH THE NOTICE ISSUED UNDER SEC.148 AND DID NOT FILE ANY RETURN OF INCOME. SUBSEQUENTLY, THE ASSESSEE FILED HIS RETURN OF INC OME ON 12.06.2015, DECLARING HIS TOTAL INCOME AT RS.1,59,970/ - . IN THE COURSE OF THE ASSESSMENT PROCEEDINGS, IT WAS OBSERVED BY THE A.O , THAT THE ASSESSEE WAS DERIVING INCOME FROM SHARE TRADING AND COMMODITY EXCHANGE TRADING. AS THE ASSESSEE FAILED TO OFFE R ANY EXPLANATION AS REGARDS THE NATURE AND SOURCE OF THE CASH DEPOSIT S AGGREGATING TO RS.2,46,88,510/ - IN HIS AFORESAID BANK ACCOUNT S DURING P A G E | 3 ITA NO. 53/MUM/2018 AY. 2011 - 12 RAVINDRA PRATAPRAI DOSHI VS. THE INCOME TAX OFFICER, WARD 29(3)(1) TO THE YEAR UNDER CONSIDERATION, THEREFORE, THE A.O TREATED THE SAME AS AN UNEXPLAINED CASH CREDIT UNDER SEC. 68 O F THE ACT. APART THERE FROM, THE A.O TAKING COGNIZANCE OF THE FACT THAT THE ASSESSEE HAD DURING THE YEAR UNDER CONSIDERATION MADE A PROFIT OF RS.24,15,737/ - BY CARRYING OUT COMMODITY TRANSACTIONS, THEREFORE, ADDED THE SAME TO HIS TOTAL INCOME. ON THE BASIS OF HIS AFORESAID DELIBERATIONS, THE A.O ASSESSED THE INCOME OF THE ASSESSEE AT RS.2,72,64,220/ - . 3. AGGRIEVED, THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE CIT(A). THE ASSESSEE DESPITE HAVING BEEN PUT TO NOTICE AS REGARDS THE DATE OF HEARING OF TH E APPEAL BY THE FIRST APPELLATE AUTHORITY, HOWEVER, FAILED TO PUT UP AN APPEARANCE BEFORE HIM. ACCORDINGLY, THE CIT(A) OBSERVED THAT AS THE ASSESSEE HAD FAILED TO COME FORTH WITH AN EXPLANATION AS REGARDS THE NATURE AND SOURCE OF THE CASH DEPOSITS AGGREGATING TO RS.2,46,88,510/ - IN HIS SAVING BANK ACCOUNT S WITH COSMOS COOPERATIVE BANK LTD., THEREFORE, ADDED THE SAID AMOUNT AS AN UNEXPLAI NED CASH CREDIT UNDER SEC.68. FURTHER, IN THE ABSENCE OF ANY EXPLANATION REGARDING THE NATU RE AND SOURCE OF THE SAID CASH DEPOSITS IN THE COURSE OF THE APPELLATE PROCEEDINGS, THE CIT(A) OBSERVED THAT BEING LEFT WITH NO OTHER ALTERNATIVE HE WAS CONSTRAINED TO CONFIRM THE ADDITION MADE BY THE AO. IT WAS OBSERVED BY THE CIT(A) , THAT THE FACT AS TO WHETHER THE ASSESSEE WAS MAINTAINING ANY BOOKS OF ACCOUNTS , OR NOT, WAS ALSO NOT DISCERNIBLE FROM THE RECORDS. ACCORDINGLY, IT WAS OBSERVED BY HIM THAT IN CASE BOOKS OF ACCOUNTS WERE MAINTAINED BY THE ASSESSEE, THEN THE AMOUNT WOULD BE TAXABLE UNDER SEC .68 OF THE ACT. HOWEVER, IN CASE NO BOOKS OF ACCOUNTS WERE MAINTAINED BY THE ASSESSEE , THEN THE AFORESAID AMOUNT OF CASH DEPOSITS WOULD BE TAXABLE UNDER SEC.69/69B OF THE ACT IN CONFORMITY WITH THE VIEW TAKEN BY THE SPECIAL BENCH OF ITAT, DELHI IN THE CA SE OF MANOJ AGGARWAL VS. DCIT (2018) 113 ITD 377 (DEL) (SB). ON THE BASIS OF HIS AFORESAID DELIBERATIONS THE CIT(A) UPHELD THE ADDITION OF P A G E | 4 ITA NO. 53/MUM/2018 AY. 2011 - 12 RAVINDRA PRATAPRAI DOSHI VS. THE INCOME TAX OFFICER, WARD 29(3)(1) RS.2,46,88,510/ - AND DISMISSED THE APPEAL. APART THERE FROM, IT WAS OBSERVED BY THE CIT(A) THAT AS THE ASSESSEE HAD F AILED TO PLACE ON RECORD ANY MATERIAL TO REBUT THE FACT AS REGARDS THE EARNING OF A PROFIT OF RS.24,15,737/ - FROM COMMODITY TRANSACTIONS BY HIM, EITHER BEFORE THE A.O OR BEFORE HIM, THEREFORE, THE SAID ADDITION MADE BY THE A.O UNDER THE HEAD S HORT TERM CA PITAL GAIN WAS LIABLE TO BE CONFIRMED. 4. THE ASSESSEE BEING AGGRIEVED WITH THE ORDER OF THE CIT(A) HAS CARRIED THE MATTER IN APPEAL BEFORE US. WE FIND THAT THE ASSESSEE APPELLANT DESPITE HAVING BEEN PUT TO NOTICE AS REGARDS THE DATE OF HEARING OF THE APPEAL , HOWEVER HAD FAILED TO PUT UP AN APPEARANCE. ACCORDINGLY, IN TERMS OF THE AFORESAID FACTS, WE ARE CONSTRAINED TO PROCEED WITH AND DISPOSE OFF THE APPEAL AS PER RULE 24 OF THE APPELLATE TRIBUNAL RULE, 1993 AFTER HEARING THE RESPONDENT REVENUE AND PER USING THE ORDERS OF THE LOWER AUTHORITIES. 5. WE HAVE GIVEN A THOUGHTFUL CONSIDERATION TO THE FACTS INVOLVED IN THE CASE BEFORE US. AS IS DISCERNIBLE FROM THE ORDERS OF THE LOWER AUTHORITIES, AS THE ASSESSEE HAD FAILED TO GIVE ANY EXPLANATION AS REGARDS T HE NATURE AND SOURCE OF THE CASH DEPOSITS AGGREGATING TO RS.2,46,88,510/ - IN HIS SAVING BANK ACCOUNT S WITH COSMOS COOPERATIVE BANK LD., JHAVER I BAZAR, MUMBAI, THEREFORE, THE SAME WAS ADDED TO HIS RETURNED INCOME. AS THERE IS NOTHING DISCERNIBLE FROM TH E RECORD WHICH COULD PERSUADE US TO CONCLUDE THAT THE AFORESAID VIEW SO TAKEN BY THE LOWER AUTHORITIES IS EITHER PERVERSE OR INCORRECT, THEREFORE, WE ARE NOT INCLINED TO DISLODGE THE SAME. ACCORDINGLY, WE UPHOLD THE ORDER OF THE CIT(A), WHO IN OUR CONSIDER ED VIEW HAD RIGHTLY SUSTAINED THE ADDITION OF RS.2,46,88,510/ - MADE BY THE A.O. THE G ROUND OF APPEAL NO. 1 IS DISMISSED. 6. AS REGARDS THE ADDITION OF RS.24,15,737/ - MADE BY THE A.O UNDER THE HEAD S HORT TERM CAPITAL GAIN , AS REGARDS THE PROFIT EARNED P A G E | 5 ITA NO. 53/MUM/2018 AY. 2011 - 12 RAVINDRA PRATAPRAI DOSHI VS. THE INCOME TAX OFFICER, WARD 29(3)(1) BY THE ASSESSEE FROM COMMODITY TRANSACTIONS, WE FIND NO INFIRMITY IN THE VIEW TAKEN BY THE LOWER AUTHORITIES. RATHER, THE AFORESAID DETAILS AS REGARDS THE PROFIT EARNED BY THE ASSESSEE FROM COMMODITY TRANSACTIONS HAD BEEN GATHERED BY THE A . O UNDER SEC.133(6) FROM M/S ANGE L COMMODITIES BROKING PVT. LTD. AS PER THE AFORESAID DETAILS GATHERED BY THE A.O, THE ASSESSEE WHO WAS HOLDING A CLIENT CODE R - 50796, HAD DURING THE YEAR INDU LGED IN COMMODITY TRANSACTIONS, WHICH THEREIN HAD RESULTED INTO THE AFORESAID PROFIT. AS NOTHING IS DISCERNIBLE FROM THE RECORD S, WHICH COULD PERSUADE US TO CONCLUDE THAT THE AFORESAID VIEW TAKEN BY THE LOWER AUTHORITIES IS EITHER PERVERSE OR INCORRECT, THEREFORE, WE FIND NO REASON TO TAKE A DIVERGENT VIEW AND THUS UPHOLD THE ADDITION OF R S.24,15,737/ - MADE BY THE A.O UNDER THE HEAD SHORT TERM CAPITAL GAIN , WHICH THEREAFTER HAD RIGHTLY BEEN SUSTAINED BY THE CIT(A). THE GROUND OF APPEAL NO. 2 RAISED BY THE ASSESSEE IS DISMISSED. 7. AS THE GROUND OF APPEAL NO. 3 IS GENERAL IN NATURE, THEREFO RE, THE SAME IS DISMISSED. 8. THE APPEAL OF THE ASSESSEE IS DISMISSED IN TERMS OF OUR AFORESAID OBSERVATIONS. ORDER PR ONOUNCED IN THE OPEN COURT ON 2 8 .06.2019 S D / - S D / - ( SHAMIM YAHYA) (RAVISH SOOD) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI ; 28 .06.2019 PS. ROHIT P A G E | 6 ITA NO. 53/MUM/2018 AY. 2011 - 12 RAVINDRA PRATAPRAI DOSHI VS. THE INCOME TAX OFFICER, WARD 29(3)(1) / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . //TRUE COPY// / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI