SUSHIL S. JHUNJHUNWALA, MUMBAI V. ACIT CEN CIR 11, MUMBAI

ITA 5535/MUM/2010

• Counselvise Citation: 553519914 RSA 2010
• Duration Of Justice: 1 year(s) 9 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-04-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 11-04-2012
• Assessment Year: 2008-2009
• Appeal Filed On: 08-07-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANISH KANOJIA
• Assessee Lawyers: SANJUKTA CHOWDHARY
• Keywords: Income from undisclosed sources
• Section: 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH E, MUMBAI BEFORE SHRI P.M.JAGTAP, ACCOUNTANT MEMBER & SHRI N.V. VASUDEVAN, JUDICIAL MEMBER. I.T.A. NO. 5535/MUM/2010 ASSESSMENT YEAR : 2008-09. SHRI SUSHIL S. JHUNJHUNWALA, ASSTT. COMMISSIONER OF FLAT NO. 51/52, 5 TH FLOOR, VS. INCOME TAX, MEGHNA APARTMENT, S.V. ROAD, CENTRAL CIRCLE 11, SANTACRUZ (W), MUMBAI. MUMBAI 400 020. PAN AAJPJ6957C APPELLANT. RESPONDENT. APPELLANT BY : S HRI SANJUKTA CHOWDHARY. RESPONDENT BY : SHRI MANISH KANOJIA. DATE OF HEARI NG : 11-04-2012. DATE OF PRONOUNC EMENT : 30-04-2012, O R D E R PER P.M. JAGTAP, A.M. : THIS APPEAL IS PREFERRED BY THE ASSESSEE AGAINST T HE ORDER OF LEARNED CIT(APPEALS)-37, MUMBAI DATED 12-05-2010 AND THE SO LITARY ISSUE ARISING OUT OF THE SAME RELATES TO THE ADDITION OF RS.2,87,140/- M ADE BY THE AO AND CONFIRMED BY THE LEARNED CIT(APPEALS) ON ACCOUNT OF CASH FOUND D URING THE COURSE OF SEARCH. 2. THE ASSESSEE IN THE PRESENT CASE IS AN INDIVIDUA L BELONGING TO JHUNJHUNWALA GROUP. A SEARCH U/S 132 WAS CONDUCTED IN THE CASES BELONGING TO JHUNJHUNWALA GROUP INCLUDING THAT OF THE ASSESSEE. DURING THE CO URSE OF SEARCH, CASH OF RS.2,87,140/- WAS FOUND FROM THE BED-ROOM OF THE AS SESSEE AT THE RESIDENTIAL 2 ITA NO.5535/MUM/2010 PREMISES SITUATED AT 41 & 42, MEGHNA APARTMENTS. DU RING THE COURSE OF ASSESSMENT PROCEEDINGS, THE SAID CASH WAS SOUGHT T O BE EXPLAINED BY THE ASSESSEE ON THE BASIS OF CASH BOOK MAINTAINED BY HIM. ACCORD ING TO THE AO, THE ASSESSEE, HOWEVER, COULD NOT PRODUCE THE RECONCILED CASH BOOK AND BANK PASS BOOK SO AS TO ARRIVE AT THE CASH BALANCE AVAILABLE AT THE TIME OF SEARCH. HE, THEREFORE, REJECTED THE EXPLANATION OF THE ASSESSEE AND ADDED THE CASH OF R S.2,84,140/- TO THE TOTAL INCOME OF THE ASSESSEE TREATING THE SAME AS UNEXPLAINED. 3. THE ADDITION MADE BY THE AO ON ACCOUNT OF UNEXPL AINED CASH FOUND DURING THE COURSE OF SEARCH WAS CHALLENGED BY THE ASSESSEE IN AN APPEAL FILED BEFORE THE LEARNED CIT(APPEALS). IT WAS SUBMITTED ON BEHALF OF THE ASSESSEE BEFORE THE LEARNED CIT(APPEALS) THAT DAY TO DAY CASH BOOK WAS PRODUCED BEFORE THE AO WHICH CLEARLY ESTABLISHED THAT CASH OF RS.4,75,000/ - WITHDRAWN FROM UNION BANK OF INDIA JUST 10 DAYS BEFORE THE SEARCH WAS AVAILAB LE AT THE TIME OF SEARCH TO EXPLAIN THE CASH FOUND DURING THE COURSE OF SEARCH. COPY OF THE SAID CASH BOOK FOR THE MONTH OF MARCH, 2008 AS WELL AS COPY OF RELEVAN T BANK PASS BOOK WAS ALSO PRODUCED BY THE ASSESSEE BEFORE THE LEARNED CIT(APP EALS). THE LEARNED CIT(APPEALS), HOWEVER, DID NOT FIND MERIT IN THIS S UBMISSION OF THE ASSESSEE AND PROCEEDED TO UPHOLD THE ADDITION MADE BY THE AO ON ACCOUNT OF UNEXPLAINED CASH FOUND DURING THE COURSE OF SEARCH FOR THE FOLLOWING REASONS GIVEN IN PARAGRAPH NO. 2.3.1 OF HIS IMPUGNED ORDER : I HAVE CAREFULLY AND DISPASSIONATELY CONSIDERED T HE FACTS & CIRCUMSTANCES OF THE CASE AND RELEVANT PANCHANAMA A ND STATEMENT RECORDED U/S 132(4) ON VARIOUS DATES. IT IS NOT DISPUTED THA T THE CASH OF RS.2,87,140/- WAS FOUND FROM THE POSSESSION OF THE APPELLANT. THE APPELLANT HAS ADMITTED THE OWNERSHIP AND POSSESSION OF THE SAME. DURING TH E COURSE OF SEARCH & SEIZURE PROCEEDINGS WHICH CONTINUED AT THE APPELLAN TS RESIDENCE FROM 14- 03-2008 TO 09-04-2008, THE APPELLANT WAS GIVEN SUFF ICIENT OPPORTUNITY TO EXPLAIN THE NATURE, MODE AND SOURCE OF POSSESSION O F THE SAME. THE APPELLANT AVAILED THESE OPPORTUNITIES BUT FAILED TO SATISFACTORILY EXPLAIN THE 3 ITA NO.5535/MUM/2010 NATURE, MODE AND SOURCE OF POSSESSION OF THE SAID C ASH OF RS.2,87,140/-. EVEN DURING THE PREPARATION OF APPRAISAL REPORT, TH E APPELLANT COULD NOT SATISFACTORILY EXPLAIN THE NATURE, MODE AND SOURCE OF POSSESSION OF THE SAID CASH OF RS.2,87,140/- BEFORE THE INVESTIGATION WING OF THE DEPARTMENT. AT THE BELATED STAGE, THE APPELLANT SOUGHT TO RELY ON A CASH BOOK WHICH WAS PREPARED AFTER THE DATE OF SEARCH & SEIZURE. THE AP PELLANT HAS NOT PROPERLY AND SATISFACTORILY EXPLAINED THE CASH FLOW OUT OF T HE SAID RS.4,75,000/- WITHDRAWN ON 04-03-2008, WHICH IS 10 DAYS BEFORE TH E DATE OF SEARCH. SUCH BELATED EXPLANATION AT THE APPELLATE STAGE CANNOT B E GIVEN MUCH CREDENCE. THE SAME APPEARS TO BE AN AFTERTHOUGHT. HAVING REGA RD TO THE FACTS AND CIRCUMSTANCES OF THE CASE, THE UNEXPLAINED CASH OF RS.2,87,140/- FOUND DURING THE COURSE OF SEARCH & SEIZURE AT THE APPELL ANTS RESIDENCE IS TREATED AS APPELLANTS INCOME FROM UNDISCLOSED SOURCES AND ADDED BACK TO THE APPELLANTS TOTAL INCOME. LEARNED ASSESSING OFFICER S ACTION IS THEREFORE, CONFIRMED. GROUND NO. 1 IS DISMISSED. AGGRIEVED BY THE ORDER OF THE LEARNED CIT(APPEALS), THE ASSESSEE HAS PREFERRED THIS APPEAL BEFORE THE TRIBUNAL. 4. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AN D ALSO PERUSED THE RELEVANT MATERIAL ON RECORD. IT IS OBSERVED THAT IN HIS STAT EMENT RECORDED DURING THE COURSE OF SEARCH, THE ASSESSEE HAD SOUGHT SOME TIME TO EXP LAIN THE SOURCE OF CASH FOUND FROM HIS BED ROOM. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, HE PRODUCED CASH BOOK ALONG WITH RELEVANT BANK PASS-BOOK TO SHOW THA T A SUM OF RS.4,75,000/- WITHDRAWN FROM BANK ON 04-003-2008 WAS AVAILABLE TO EXPLAIN THE CASH OF RS.2,87,140/- FOUND DURING THE COURSE OF SEARCH ON 14-03-2003. COPIES OF THE SAID DOCUMENTS WERE ALSO PRODUCED BY THE ASSESSEE BEFORE THE LEARNED CIT(APPEALS) WHO DID NOT DISPUTE THE FACT THAT A SUM OF RS.4,75, 000/- WAS WITHDRAWN BY THE ASSESSEE FROM HIS BANK ACCOUNT ON 04-03-2008. HE, H OWEVER, REJECTED THE EXPLANATION OF THE ASSESSEE IN RESPECT OF CASH FOUN D DURING THE COURSE OF SEARCH ON THE GROUND THAT PROPER AND SATISFACTORY EXPLANATION WAS NOT OFFERED IN RESPECT OF UTILIZATION OF THE CASH WITHDRAWN ON 04-03-2008. WE FIND IT DIFFICULT TO CONCUR WITH THIS STAND TAKEN BY THE LEARNED CIT(APPEALS). IT IS OBSERVED THAT THE CASH BOOK 4 ITA NO.5535/MUM/2010 PRODUCED BY THE ASSESSEE, A COPY OF WHICH IS PLACED AT PAGE NO. 19 OF THE ASSESSEES PAPER BOOK, CLEARLY REFLECTED ALL THE CA SH RECEIPTS OF THE ASSESSEE INCLUDING THE AMOUNT OF RS.4,75,000/- WITHDRAWN FRO M BANK JUST 10 DAYS PRIOR TO THE DATE OF SEARCH AS WELL AS PAYMENTS MADE FROM TH E SAID RECEIPTS INCLUDING THE CASH OF RS.2,50,000/- SEIZED BY THE INCOME-TAX DEPA RTMENT DURING THE COURSE OF SEARCH. THE CASE OF THE ASSESSEE ABOUT THE UTILIZAT ION OF CASH WITHDRAWN ON 04-03- 2008 THUS WAS DULY SUPPORTED BY THE CASH BOOK MAIN TAINED BY THE ASSESSEE AND IN THE ABSENCE OF ANY THING BROUGHT ON RECORD BY THE A O TO SHOW THAT THE SAID CASH WITHDRAWN ON 04-03-2008 WAS UTILIZED BY THE ASSESSE E PRIOR TO THE DATE OF SEARCH, THERE WAS NO REASON EITHER FOR THE AO OR FOR THE LE ARNED CIT(APPEALS) TO REJECT THE EXPLANATION OF THE ASSESSEE. AS SUCH, CONSIDERING A LL THE FACTS OF THE CASE, WE ARE OF THE VIEW THAT THE AVAILABILITY OF CASH OF RS.2,87,1 40/- FOUND DURING THE COURSE OF SEARCH WAS DULY ESTABLISHED BY THE ASSESSEE ON THE BASIS OF CASH BOOK AS WELL AS HIS BANK PASS BOOK WHICH PROVED THAT A CASH OF RS.4,75, 000/- WAS WITHDRAWN BY THE ASSESSEE FROM HIS BANK ACCOUNT ON 04-03-2008 AND TH E CASH FOUND DURING THE COURSE OF SEARCH WAS AVAILABLE FROM THE CASH SO WIT HDRAWN. WE, THEREFORE, DELETE THE ADDITION MADE BY THE AO AND CONFIRMED BY THE LE ARNED CIT(APPEALS) ON ACCOUNT OF CASH FOUND DURING THE COURSE OF SEARCH A ND ALLOW THIS APPEAL OF THE ASSESSEE. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED ON THIS 30 TH DAY OF APRIL, 2012. SD/- SD/- (N.V.VASUDEVAN) (P.M. JAG TAP) JUDICIAL MEMBER ACC OUNTANT MEMBER MUMBAI, DATED: 30 TH APRIL, 2012. 5 ITA NO.5535/MUM/2010 COPY TO : 1. APPELLANT 2. RESPONDENT 3. C.I.T. 4. CIT(A) 5. DR, E-BENCH. (TRUE COPY) BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI. WAKODE