AVTAR SINGH BAMRAH, MUMBAI V. ITO 24(1)(3), MUMBAI

ITA 5399/MUM/2012

• Counselvise Citation: 539919914 RSA 2012
• Duration Of Justice: 3 year(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-08-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 19-08-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 28-08-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: AVTAR SINGH BAMRAH
• Keywords: Unexplained cash credit; Revised return
• Section: 143(3); 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, MUMBAI BEFORE SHRI G.S. PANNU, AM AND SHRI SANDEEP GOSAIN, JM I.T.A. NO. 5399/MUM/2012 ASSESSMENT YEAR : 2006-07 AVTAR SINGH BAMRAH, B-201, VISHNU CHS, MAHADA LAYOUT, NEAR GAIKWARD NAGAR, MALAD EAST, MUMBAI 400 095. VS. ITO, 24(1)(3), C-13, 5 TH FLOOR, PRATYAKSHAKAR BHAVAN, BANDRA EAST, MUMBAI 400 095. PAN : AGIPB6021C ( ASSESSEE ) .. ( RESPONDENT ) ASSESSEE BY SHRI AVTAR SINGH BAMRAH R E SPONDENT BY : SHRI MANOJ KUMAR DATE OF HEARING : 19-8-2015 DATE OF PRONOUNCEMENT : 31-8-2015 [ O R D E R PER G.S. PANNU, AM : THE CAPTIONED APPEAL PREFERRED BY THE ASSESSEE IS D IRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEAL) -3 4, MUMBAI DATED 30-9- 2008 WHICH IN TURN HAS ARISEN FROM AN ORDER PASSED BY THE A.O. U/S 143(3) OF THE INCOME TAX ACT, 1961 ( IN SHORT THE ACT) PERT AINING TO A.Y. 2006-07. ITA 5399/M/12 2 2. THE FIRST ISSUE RELATES TO AN ADDITION OF RS. 5, 05,638/- MADE BY INVOKING SECTION 68 OF THE ACT. IN THIS CONTEXT, B RIEF FACTS ARE THAT THE ASSESSEE IS AN INDIVIDUAL CARRYING ON THE BUSINESS OF CARPENTER, WHO FILED A RETURN OF INCOME DECLARING TOTAL INCOME OF RS 1,75, 564/-ON 31.8.2006. IN THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFF ICER NOTED CERTAIN DEPOSITS IN THE BANK ACCOUNT OF RS. 5,05,638/- WHIC H WERE NOT INCLUDED IN PROFIT & LOSS ACCOUNT FILED ALONG WITH THE RETURN O F INCOME. ON BEING SHOW CAUSED, ASSESSEE FILED A REVISED RETURN OF INCOME B Y INCLUDING THE ABOVE AMOUNT AS INCOME, BUT THE TOTAL INCOME DECLARED REM AINED THE SAME AS DISCLOSED IN THE ORIGINAL RETURN OF INCOME. BECAUS E, ON ONE SIDE ASSESSEE HAD DISCLOSED THE ABOVE RECEIPTS ON THE CREDIT SIDE OF PROFIT & LOSS ACCOUNT AND ON THE DEBIT SIDE, AN EQUAL AMOUNT OF EXPENDITU RE WAS CLAIMED, THEREBY NULLIFYING THE CREDIT TO THE PROFIT & LOSS ACCOUNT. THE ASSESSING OFFICER REQUIRED THE ASSESSEE TO PRODUCE THE VOUCHERS FOR E XPENSES ON LABOUR, SALARY ETC. THE ASSESSING OFFICER WAS NOT SATISFIE D WITH THE EXPLANATIONS FURNISHED AND HE ADDED THE SUM OF RS. 5,05,638/- AS UNEXPLAINED CASH CREDIT UNDER SECTION 68 OF THE ACT. THE LD. CIT(A) HAS AL SO UPHELD THE ADDITION, AGAINST WHICH ASSESSEE IS IN APPEAL BEFORE US. ITA 5399/M/12 3 3. BEFORE US, ASSESSEE APPEARED IN PERSON AND REFER RED TO THE PAPER BOOK FILED, WHICH CONTAINS VARIOUS DETAILS, I.E. DE TAILS OF INCOME TAX RETURNS FILED SINCE 1996-97; COPIES OF THE BILLS AND VOUCHE RS; COPIES OF STATEMENT OF ACCOUNTS AND THE RECONCILIATION OF SALES WITH THE AMOUNTS CREDITED IN PROFIT & LOSS ACCOUNT. HE SUBMITTED THAT ALL HIS RECEIPTS ARE THROUGH CHEQUES AND NO CASH IS RECEIVED, AND THAT DUE TO THE NATURE OF BUSINESS, IT WAS NOT POSSIBLE TO MAINTAIN THE BOOKS OF ACCOUNT AND VOUCH ERS OF THE LEVEL EXPECTED BY AO, BUT HE CONTENDED THAT FULL DETAILS ARE AVAILABLE WHICH HAVE BEEN UNJUSTLY REJECTED BY THE A.O. THEREFORE, HE SU BMITTED THAT ADDITION MADE BY AO BE DELETED. 4. LD. D.R RELIED ON THE ORDERS OF LOWER AUTHORITIE S AND SUBMITTED THAT ADDITION HAS BEEN MADE. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS ALSO THE RELEVANT MATERIAL ON RECORD. OSTENSIBLY, ASSESSEE IS A CARPENTER, WH O IS RENDERING SERVICES TO HIS CLIENTS. QUITE CLEARLY, THE PECULIARITY OF ASSE SSEES LEVEL OF OPERATIONS SUGGEST THAT HE IS NOT ENGAGED IN ANY ORGANIZED BU SINESS. IT IS ALSO CLEAR THAT ITA 5399/M/12 4 THERE IS AN INHERENT INABILITY ON THE PART OF THE A SSESSEE IN MAINTAINING BOOKS OF ACCOUNT AND OTHER RELATED MATERIAL, AS IS EXPECT ED FROM AN ASSESSEE ENGAGED IN FORMAL BUSINESS. NEVERTHELESS, THE ONUS IS ON THE ASSESSEE TO SUBSTANTIATE THE RETURN OF INCOME FILED AND THE P ARTICULARS CONTAINED THEREIN. IN THIS CONTEXT, IT MAY BE NOTED THAT WIT H REGARD TO THE CREDITS OF RS.5,05,638/- FOUND IN THE BOOKS OF ACCOUNT OF THE ASSESSEE, THE EXPLANATION RENDERED WAS THAT THE SAME WAS A PART OF HIS RECEIP TS OF THE BUSINESS OF CARPENTRY. THE AFORESAID EXPLANATION, IN OUR VIEW, HAS TO BE EVALUATED IN THE PECULIAR CIRCUMSTANCES OF THE INSTANT CASE AND IN O UR VIEW, PRIMA-FACIE SUCH CREDITS CAN BE UNDERSTOOD TO BE FROM THE BUSINESS O F CARPENTRY. THE ASSESSEE HAS BEEN SUBJECT TO SCRUTINY ASSESSMENT A ND IN THE COURSE OF WHICH NO OTHER SOURCE OF INCOME HAS BEEN UNEARTHED THOU GH THE ASSESSEE COULD NOT FURNISH AN INFALLIBLE PROOF REGARDING THE PART IES FROM WHOM THE AMOUNT OF RS.5,05,638/- HAS BEEN RECEIVED. WE, THEREFORE, FIND NO REASON TO JUSTIFY THE ADDITION OF RS.05,638/-, HAVING REGARD TO THE T OTALITY OF FACTS AND CIRCUMSTANCES OF THE PRESENT CASE. THUS, ON THIS A SPECT ASSESSEE SUCCEEDS. 6. THE OTHER ISSUE IN THIS APPEAL, RELATES TO DISAL LOWANCE OF RS.75,000/- OUT OF THE EXPENSES CLAIMED BY THE ASSESSEE. THE A DDITION HAS BEEN MADE ITA 5399/M/12 5 ON THE GROUND THAT THE ENTIRE EXPENDITURE CLAIMED B Y THE ASSESSEE IS UN- VERIFIABLE. IN OUR CONSIDERED OPINION, UN- VERIFIA BILITY OF THE EXPENSES OF CLAIMED DOES EMERGE AND, THEREFORE, A SMALL ADDITIO N OF RS.75,000/- TO PLUG THE LEAKAGE OF REVENUE IS QUITE IN ORDER. THUS, ON THIS ASPECT, WE UPHOLD THE ORDERS OF LOWER AUTHORITIES. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PAR TLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 31 ST AUGUST, 2015. SD/- SD/- (SANDEEP GOSAIN) (G.S.PANNU) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI; DATED: [ VM COPY OF THE ORDER FORWARDED TO : 1. THE ASSESSEE 2. THE RESPONDENT. 3. THE CIT(A) - 30 , MUMBAI 4. CIT - CITY - 19 , MUMBAI 5. DR, ITAT, MUMBAI E BENCH 6. GUARD FILE . BY ORDER, //TRUE COPY// (DY./ASSTT. REGISTRAR) ITAT, MUMBAI