REKHA JAIN, MUMBAI V. ITO WD 19(1)(2), MUMBAI

ITA 5355/MUM/2011

• Counselvise Citation: [2015] 120 COUNSELVISE.COM (IT) 9299 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 7 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-03-2015
• Appeal Filed By: Assessee
• Bench Allotted: D
• Next Hearing Date: 24-02-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 15-07-2011
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Non compliance
• Section: 131; 68

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH D , MUMBAI . , . , BEFORE SHRI D.MANMOHAN , VICE PRESIDENT AND SHRI D. KARUNAKARA RAO , ACCOUNTANT MEMBER ./ ITA NO. 5355 /M/201 1 ( / ASSESSMENT YEAR ; 200 6 - 0 8 ) SMT. REKHA JAIN 12, DEEPMALA BUILDING, 3 RD RD. KHAR (W) MUMBAI - 4000 52 PAN: ADFPJ8399F / VS. ITO WD 19(1)(2) PIRMAL CHAMBERS, LALABAUG MUMBAI - 400012 ( / APPELLANT) ( / RESPONDENT) ASSESSEE BY : SHRI RAJESH SANGHVI (AR) REVENUE B Y : SHRI AKHILENDRA YADAV (DR) / DATE OF HEARING : 2 4 . 0 2 .201 5 / DATE OF PRONOUNCEMENT : 11. 0 3. 201 5 / O R D E R PER D. KARUNAKARA RAO, A . M . : THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A) - 30, MUMBAI DATED 29.04 .201 1 FOR THE ASSESSMENT YEAR 2006 - 0 7 AND THE SOLITARY GROUND RAISED BY THE ASSESSEE IS AS UNDER: THAT THE LEARNED COMMISSIONER OF INCOME TAX (A) HAS ERRED IN LAW AND ON FACTS OF THE CASE, IN CONFIRMING THE ADDITION OF RS.1 , 60 , 000/ - AS UNEXPLAINED CASH CREDIT U/S 68 O F THE I.T. ACT, 1961. 2. BRIEFLY STATED RELEVANT FACTS OF THE CASE ARE THAT THE ASSESSEE FILED RETURN OF INCOME DECLARING TOTAL INCOME OF RS.1,34,546/ - . IN T HE ASSESSMENT U/S.143(3) OF THE ACT 1961, AO MADE ADDITI ON S U/S.68 OF THE ACT. ONE SUCH IT A NO. 5355 /M/201 1 2 ADDITION RELATES TO TH E CASH DEPOSITS OF RS. 1.6 LACS. R ELEVANT FA CTS RELATING TO THIS ADDITION ARE THAT THE ASSESSING OFFICER NOTED FROM THE BANK EXTRACT / BANK STATEMENT A CASH DEPOSIT AMOUNTING TO RS.1.6 LAC S . F OR VERIFYING THE SOURCES OF THE SAME NOTICE U/S.13 1 WAS ISSUED. THERE IS NO COMPLIANCE TO THE SAME BY THE ASSESSEE . EVENTUALLY, AO TREATED THE SAID CASH DEPOSIT S AS UNEXPLAINED AND MADE ADDITION U/S.68 OF THE ACT. 3. IN THE FIRST APPELLATE PROCEEDINGS THE ASSESSEE STATED THE CURR ENT YEAR INCOME OF THE ASSESSEE AMOUNTING TO RS.1,04,244/ - EXPLAINS PART OF THE SAID CASH DEPOSITS . F URTHER , THE ASSESSEE SUBMITTED THAT THE CAS H ON HAND OF THE EARLIER YEAR AMOUNTING TO RS.80,200/ - IS ALSO AVAILABLE TO ACCOUNT FOR THE CASH DEPOSITS IN THE BANK. DESPITE THE ABOV E EXPLANATION THE , CIT (A) CAME TO THE CONCLUSION THAT THE ASSESSEE FAILED TO COMPLY WITH THE NOTICE U/S.131 OF THE ACT AND NO CONVINCING REPLY WAS FILED TO ACCOUNT FURTHER CASH DEPOSITS IN THE BANK. ACCORDINGLY HE CONFIRMED THE ADDITION OF RS.1.6 LACS MAD E BY THE AO U/S.68 OF THE ACT. 4. BEFORE US, LEARNED C OUNSEL FOR THE ASSESSEE BROUGHT OUT THE ABOVE REFERRED FACTS OF THE ADDITION AND MENTIONED THAT SOU RCE OF CASH DEPOSITS IS EXPLAIN ED I.E. THE CURRENT YEAR INCO ME AND CLOSING BALANCE OF THE CASH IN HAN D. REGARDING THE NONCOMPLIANCE TO THE NOTICE U/S.131, LEARNED C OUNSEL SUBMITTED THAT THE ASSESSEE, ACTUALLY ATTENDED TO THE SUMMONS AND WAITED AT THE ASSESSING OFFICERS OFFICE T ILL THE END OF THE DAY TO FURNISH HIS EXPLANATION BEFORE THE ASSESSING OFFICER . IN THIS REGARD , HE BROUGHT OUR ATTENTION TO PAGE 8 OF THE PAPER BOOK I.E . COPY OF THE AFFIDAVIT OF REKHA R JAIN DATED 19.12.2008 AND MENTIONED THAT IN PARA 3 OF THE SAID AFFIDAVIT, THE FACT OF WAITING UP TO 6.00 P.M. OUT SIDE OF THE OFFICE OF THE ITO WAS MENTIONED. T HEREFORE, THERE IS NO NON COMPLIANCE TO THE NOTICE U/S. 131 OF THE ACT BY THE ASSESSEE . H E ALSO IT A NO. 5355 /M/201 1 3 DEMONSTRATED THE FACT OF NON - LEVY OF ANY PENALTY FOR NONCOMPLIANCE TO NOTICE U/S 131 OF THE ACT IN THE ASSESSEES CASE. HE ALSO MENTIONED ABOUT T HE DELETION OF THE SAID PENALTY IN OTHER GROUP CASES OF THE ASSESSEE WHERE SUCH PENALTY WAS SO LEVIED. FURTHER , HE ALSO SUBMITTED THAT THE SOURCE OF INFORMATION FOR MAKING ADDITION U/S.68 OF THE ACT IS THE BANK STATEMENTS OF THE BANKER AND NOT THE CASH BOO K OF THE ASSESSEE . I N SUCH CIRCUMSTANCES , THE ADDITION U/S.68 IS NOT SUSTAINABLE. FOR THIS PROPOSITION HE RELIED ON THE JUDGMENT OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. BHAICHAND H. GANDHI [141 ITR 67 (BOM)] WHICH IS RELEVANT FOR THE PROPOS ITION , THE CASH CREDIT F OUND ONLY IN THE BANK PASS BOOK AND NOT IN THE CASH BOO K OF THE ASSESSEE , IS NOT INCLUDABLE U/S.68 OF THE ACT, AS THE PASSBOOK SUPPLIED BY THE BANK TO THE ASSESSEE IS NOT THE BOOK MAINTAINED BY THE ASSESSEE. 5. ON THE OTHER HAND, L D. DR FOR THE R EVENUE RELIED ON THE ORDER S OF THE AO AND CIT(A). 6. WE HAVE H EARD BOTH THE PAR TIES AND PERUSED ORDERS OF THE R EVENUE AS WELL AS THE PAPER BOOK FILED BY THE ASSESSEE . W E HAVE ALSO GONE THROUGH THE JURISDICTIONAL HIGH COURT JUDGMENT IN THE CASE OF BHAICHAND H. GANDHI (SUPRA) SO FOR AS THE SOURCES FOR THE CREDIT FOUND IN THE PASS BOOK OF THE ASSESSEE IS CONCERN ED . WE FIND THE ASSESSEE HAS S O M E EXPLANATION WHICH IS NOT FOUND FALSE BY THE REVENUE. WITH REGARD TO THE ALLEGATION OF NONCOMPLIAN CE TO THE NOTICE U/S.131 OF THE ACT , IT IS NOTICE D THAT THE AFFIDAVIT PLACED AT PAGE 8 OF THE PAPER BOOK C ONFIRMED THE ATTENDANCE OF THE ASSESSEE BEFORE THE ITO. NO THING CONTRARY TO THE CONTENTS OF THE SAID AFFIDAVIT IS BROUGHT TO OUR NOTICE BY THE REVENUE . REG ARDING APPLICABILITY OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF BHAICHAND H. GANDHI (SUPRA) THE RATIO LAID DOWN THEREOF IS BINDING ON OUR TRIBUNAL. CONSIDERING THE ABOVE, WE ARE OF THE OPINION , THE CASH CREDITS ARE EXPLAINABLE AND THE ADDITIONS ARE UN SUSTAINABLE AS SOURCE OF THE CASH CREDIT IS IT A NO. 5355 /M/201 1 4 THE BANK STATEMENTS SUPPLIED BY THE BANK AND NOT OF THE BOOKS OF THE ACCOUNTS OF THE ASSESSEE. FOR THE SAKE OF COMPLETENESS OF THE ORDER WE REPRODUCE HELD PORTION OF THE JUDGMENT OF THE BOMBAY HIGH COURT; WHEN MONEYS ARE DEPOSITED IN A BANK, THE RELATIONSHIP THAT IS CONSTITUTED BETWEEN THE BANKER AND THE CUSTOMER IS ONE OF THE DEBTOR AND CREDITOR AND NOT OF TRUSTEE AND BENEFICIARY. APPLYING THIS PRINCIPLE, THE PASS BOOK SUPPLIED BY THE BANK TO ITS CONSTITUENT IS ONLY A COPY OF THE CONSTITUENTS ACCOUNT IN THE BOOKS MAINTAINED BY THE BANK. IT IS ONLY AS IF THE PASS BOOK IS MAINTAINED BY THE BANK AS THE AGENT OF THE CONSTITUENT, NOR CAN IT BE SAID THAT THE PASS BOOK IS MAINTAINED BY THE BANK UNDER THE INSTRUCTIONS OF THE CONSTITUENT. THEREFORE, THE PASS BOOK SUPPLIED BY THE BANK TO THE ASSESSEE IN THE PRESENT CASE COULD NOT BE REGARDED AS A BOOK OF THE ASSESSEE, NOR A BOOK MAINTAINED BY THE ASSESSEE OR UNDER HIS INSTRUCTIONS. AS SUCH ADDITION UNDER S.68 OF THE AMOUN T ENTERED ONLY IN THE BANK PASS BOOK WAS NOT JUSTIFIED. 7 . CONSIDERING THE ABOVE FACTUAL MATRIX AS WELL A S LEGAL PRO POSITION, W E ARE OF THE OPINION, THIS IS NOT A FIT CASE FOR INVOKING SECTION 68 OF THE ACT FOR MA K ING THE ADDITION OF RS.1.6 LACS. ACCORDIN GLY, GROUND RAISED BY THE ASSESSEE IS ALLOWED. 8 . IN THE RESULT , APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 11 . 0 3 . 201 5 . 11 . 0 3 . 201 5 SD/ - SD/ - ( D.MANMOHAN ) ( D. KARUNAKARA RAO ) VICE PRESIDENT ACCOUNTANT MEMBER / MUMBAI ; / DATED 11 . 0 3 . 201 5 * PATEL / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / THE DR CONCERNED BENCH , 6. / GUARD FILE. IT A NO. 5355 /M/201 1 5 / BY ORDER, //TRUE COPY// / ( DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI