MILAN V. SHAH, MUMBAI V. ITO 22(1)(3), NASHIK

ITA 5539/MUM/2015

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 1987 (ITAT-MUMBAI)
• Duration Of Justice: 11 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-11-2016
• Appeal Filed By: Assessee
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 07-12-2015
• Court: TRIBUNAL
• Department Lawyers: C W ANGOLKAR
• Keywords: Business income
• Section: 131; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, MUMBAI BEFORE SHRI B.R. BASKARAN (AM) & SHRI PAWAN SINGH (JM) I.T.A. NO. 5539 /MUM/ 2015 (ASSESSMENT YEAR 200 9 - 1 0 ) MILAN V.SHAH (PROP. OF M.R. SHAH) 216 - 15, AMITA COOPERATIVE HOUSING SOCIETY LIMITED HINGWALA LANE GHATKOPAR (WEST) MUMBAI - 400 077. VS. ITO 22(1)(3) MUMBAI ( APPELLANT ) ( RESPONDENT ) PAN NO . AACPS1850J ASSESSEE BY SHRI DEVENDRA JAIN DEPARTMENT BY SHRI C.W. ANGOLKAR DATE OF HEARING 7.11 . 201 6 DATE OF PRONOUNCEMENT 7 . 1 1 . 201 6 O R D E R PER B.R. BASKARAN (AM) : - THE APP E AL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 8.9.2015 PASSED BY THE LEARNED CIT(A) - 25, MUMBAI AND IT RELATES TO A.Y. 2009 - 1 0 . THE ASSESSEE IS AGGRIEVED BY THE DECISION OF THE LEARNED CIT(A) IN PA RTIALLY CONFIRMING THE ADDITION MADE BY THE ASSESSING OFFICER U/S. 68 OF THE ACT. 2. WE HEARD THE PARTIES AND PERUSED THE RECORD. THE ASSESSING OFFICER RECEIVED INFORMATION THAT THE ASSESSEE HAS DEPOSITED A SUM OF ` 13,40,000/ - IN AGGREGATE IN THE SAVINGS BANK ACCOUNT MAINTAINED WITH UNION BANK OF INDIA. IT WAS NOTICED THAT THE ASSESSEE HAS NOT FILED RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION AND HENCE THE ASSESSING OFFICER REOPENED THE ASSESSMENT AND ASSESSED TOTAL DEPOSITS OF ` 13,50,323/ - AS INCO ME OF THE ASSESSEE U/S. 68 OF THE ACT. MILAN V.SHAH 2 3. IN THE APPELLATE PROCEEDINGS THE LEARNED CIT(A) TOOK THE VIEW THAT THE PEAK OF THE CREDIT HAS TO BE ASSESSED AS INCOME . A CCORDINGLY HE DIRECTED THE ASSESSING OFFICER TO ASSESS A SUM OF ` 6,20,000/ - AS INCOME OF TH E ASSESSEE U/S. 68 OF THE ACT. THUS HE GAVE PARTIAL RELIEF TO THE ASSESSEE. STILL AGGRIEVED, THE ASSESSEE HAS FILED THIS APPEAL BEFORE US. 4. FROM THE PERUSAL OF THE ORDERS PASSED BY THE TAX AUTHORITIES, WE NOTICED THAT THE ASSESSEE HAS EXPLAINED SOURCES TO BE THE OPENING BALANCE CASH AVAILABLE WITH HIM AND BUSINESS RECEIPTS. WE NOTICED THAT THE LEARNED CIT(A) REJECTED THE CLAIM OF OPENING CASH BALANCE BUT ACCEPTED THAT THESE DEPOSITS MAY REPRESENT UNDISCLOSED BUSINESS TRANSACTION S OF THE ASSESSEE. WE NOT ICED THAT THE ASSESSING OFFICER HAS RECORDED A STATEMENT ON OATH U/S. 131 OF THE ACT AND THE ASSESSEE HAS SUBMITTED THAT HE HAS ACTED AS AN AGENT IN RESPECT OF FAST MOVING CONSUMER GOODS. UNDER THESE SET OF FACTS, WE ARE OF THE VIEW THAT THE LD CIT(A) WAS JUSTIFIED IN OBSERVING THAT THE DEPOSITS MADE BY THE ASSESSEE IN THE BANK ACCOUNT MAY REPRESENT BUSINESS TRANSACTIONS. ONCE IT IS ACCEPTED AS BUSINESS RECEIPTS, IT MAY NOT BE PROPER TO ASSESS ENTIRE RECEIPTS AS INCOME OF THE ASSESSEE AND INSTEAD, THE INC OME ARISING FROM THE TRANSACTIONS MAY BE ESTIMATED . SINCE THE ASSESSEE HAS CLAIMED TO HAVE ACTED AS AGENT, WE ARE OF THE VIEW THAT THE INCOME MAY BE ESTIMATED @ 10% OF THE AGGREGATE AMOUNT OF DEPOSITS MADE IN THE BANK ACCOUNT OF THE ASSESSEE AND IN OUR V IEW , THE SAME WOULD MEET THE ENDS OF JUSTICE. ACCORDINGLY, WE SET ASIDE THE ORDER PASSED BY THE LEARNED CIT(A) AND DIRECT THE ASSESSING OFFICER TO ASSESS 10% OF THE AGGREGATE AMOUNT OF DEPOSITS AS INCOME OF THE ASSESSEE. 5. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS TREATED AS PARTLY ALLOWED. ORDER HAS BE EN PRONOUNCED IN THE COURT ON 7 .1 1 .2016 SD/ - SD/ - (PAWAN SINGH) (B.R.BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED : 7 / 1 1 / 20 1 6 MILAN V.SHAH 3 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. BY ORDER, //TRUE COPY// ( DY./ASSTT. REGISTRAR) ITAT, MUMBAI PS