MUNAF S QUAZI, MUMBAI V. ITO 21(3)(4), MUMBAI

ITA 5569/MUM/2011

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 88702 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 8 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-03-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 30-03-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 29-07-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: PAWAB KUMAR BEERLA
• Keywords: Unexplained cash credit
• Section: 44AD

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUMBAI , , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER AND SHRI N.K . BILLAIYA, A CCOUNTANT M EMBER / I .T.A. NO . 5569/MUM/2011 ( / ASSESSMENT YEAR : 2006 - 07 SHRI MUNAF S. QUAZI, 70,CRYSTAL, POWAI VIHAR COMPLEX, SHANKARACHARYA MARG, POWQAI, MUMBAI - 400 076 / VS. THE ITO - 21(3)(4), PRATYAKSHAKAR BHAVAN, BANDRA, MUMBAI ./ ./ PAN/GIR NO. : AACPQ5132B ( / APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY: NONE / RESPONDENT BY : SHRI PAWAB KUMAR BEERLA / DATE OF HEARING :30 . 0 3 .2015 / DATE OF PRONOUNCEMENT : 30 .03 .2015 / O R D E R PER N.K. BILLAIYA, AM: THIS IS AN APPEAL BY THE ASSESSEE PREFERRED AGAINST THE ORDER OF THE LD. CIT(A) - 32, MUMBAI DT. 30.11.2010 PERTAINING TO ASSESSMENT YEAR 2006 - 07. 2. A PERUSAL OF OUR RECORD SHOWS THAT THIS APPEAL WAS FIRST POSTED FOR HEARING ON 19.6.2012 , SINCE THEN THE CASE IS BEING ADJOURNED ON NON ITA. NO. 5569/M/2011 2 APPEARANCE ON BEHALF OF THE ASSESSEE. NOT ICES HAVE BEEN SENT THROUGH RPAD, THE LAST OF SUCH NOTICE WAS ISSUED ON 10.9.2014 , FIXING THE HEARING OF THE APPEAL ON THIS DATE I.E. ON 30.3.2015. ONCE AGAIN NO ONE ATTENDED THEREFORE , WE DECIDE TO PROCEED EX PARTE. 3. FACTS COMING OUT OF THE ASSESSMENT ORDER SHOW THAT THE ASSESSEE DERIVES HIS INCOME FROM SUPPLY OF LABOUR FOR CIVIL CONSTRUCTION. THE RETURN FOR THE YEAR HAS BEEN FILED U/S. 44AD OF THE ACT CLAIMING TURNOVER OF RS. 24,02,109/ - AND THE PROFIT @ 8%. DURING THE COURSE OF THE ASSESSMENT PROCEE DINGS, THE AO CAME TO KNOW THAT THE ASSESSEE HAS DEPOSITED CASH OF RS. 10,04,050/ - IN HIS SAVINGS BANK A/C NO. 40576 IN THANE JANATA SAHAKARI BANK. THE AO NOTICED THAT FOR THE SAME BANK THERE IS A AIR OF CASH DEPOSIT OF RS. 10,63,050/ - . THE ASSESSEE WAS ASKED TO EXPLAIN THE SOURCE OF THE CASH DEPOSITS. THE ASSESSEE VIDE LETTER DT. 5.12.2008 SUBMITTED AS UNDER: WITH REFERENCE TO YOUR NOTICE DATED REQUIRING CERTAIN INFORMATION, ON INSTRUCTION BY ASSESSEE, THIS IS TO BRING YOUR KIND ATTENTION THAT THE AS SESSEE IS MENTALLY PREPARED TO PAY THE TAX LIABILITY, IF ANY JUST TO BUY THE PEACE OF MIND. 4. THE AO AFTER EXAMINING THE BANK STATEMENT TREATED THE ENTIRE CASH OF RS. 11,21,050/ - AS UNEXPLAINED CASH CREDIT. THE AO FURTHER ADDED RS. 4,997/ - AS BANK INTE REST EARNED FROM THE SAME SAVINGS BANK ACCOUNT AND COMPLETED THE ASSESSMENT. 5. AGGRIEVED BY THIS, THE ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT(A). BEFORE THE LD. CIT(A), IT WAS STRONGLY CONTENDED THAT THE ACCEPTANCE OF THE ADDITION VIDE LETTER DT. 5.12.2008 HAS NOT BEEN PROPERLY APPRECIATED BY THE AO. IT WAS EXPLAINED TO THE LD. CIT(A) THAT WHAT THE ITA. NO. 5569/M/2011 3 ASSESSEE MEANT WAS FOR THE ADDITION U/S. 44AD WITH PROFIT @ 8% OF THE AMOUNT DEPOSITED IN THE BANK. IT WAS FURTHER CL AIMED THAT THE DEPOSITS IN THE BANK ACCOUNT WERE OUT OF PAST ACCUMULATED SAVINGS AND OUT OF THE CASH WITHDRAWALS MADE BY THE ASSESSEE FROM ANOTHER BANK ACCOUNT. 5.1. AFTER CONSIDERING THE FACTS AND THE SUBMISSIONS, THE LD. CIT(A) OBSERVED THAT THE TOTAL CONTRACT RECEIP T S OF THE ASSESSEE ARE AT RS. 32,01,640/ - WHICH HAS BEEN RECEIVED BY CHEQUE ONLY. THE TOTAL WITHDRAWALS MADE BY THE ASSESSEE ARE AT RS. 30.20 LAKHS. THE LD. CIT(A) FURTHER OBSERVED THAT PROFIT U/S. 44AD @ 8% ON THE TOTAL TURNOVER OF RS. 32 LAKHS WOULD COME TO RS. 2.4 LAKHS AND IT IS ONLY THIS PROFIT WHICH IS AVAILABLE FOR PERSONAL USE. ACCORDINGLY, THE LD. CIT(A) DECLINED TO GIVE THE BENEFIT OF DEPOSITS OUT OF CASH WITHDRAWALS. THE LD. CIT(A) FURTHER OBSERVED THAT IF THE CASH DEPOSITS OF RS. 11,21,050/ - WERE TO BE CONSIDERED AS PROFITS OF THE BUSINESS U/S. 44AD @ 8%, THEN CONSIDERING THE DEPOSITS IN THE BANK ACCOUNT, THE TURNOVER OF THE ASSESSEE WOULD CROSS RS. O NE CRORE, THEREBY MAKING THE ASSESSEE NOT ELIGIBLE FOR THE BENEFITS GIVEN U/S . 44AD OF THE ACT. THE LD. CIT(A) ACCORDINGLY CONFIRMED THE ADDITION OF RS. 11,21,050/ - . 6. AGGRIEVED BY THIS, THE ASSESSEE IS BEFORE US. AS MENTIONED ELSEWHERE, NONE APPEARED ON BEHALF OF THE ASSESSEE THEREFORE, WE HEARD THE LD. DEPARTMENTAL REPRESENTATIVE AT LENGTH WHO SUPPORTED THE ASSESSMENT ORDER. 7. WE HAVE CAREFULLY PERUSED THE ORDERS OF THE AUTHORITIES BELOW. THE FACTS ARE DISCUSSED ELSEWHERE. WE FIND THAT THE ASSESSEE HAS GROSSLY FAILED IN EXPLAINING THE SOURCE OF DEPOSITS IN THE IMPUGNED BANK ACCOUNT. THE MAIN PLEA OF THE ASSESSEE IS THAT THE DEPOSIT OF RS. 11,21,050/ - SHOULD ITA. NO. 5569/M/2011 4 BE ASSESSED U/S. 44AD OF THE ACT. WE FIND THAT THE ASSESSEE HAS RETUNED GROSS TURNOVER OF RS. 32 LAKHS ON WHICH PROFIT U/S. 44AD @ 8% HAS BEEN OFFERED. ASSUMING YET NOT ACCEPTING RS. 11,21,050/ - ALSO AS PART OF THE TURNOVER, THEN THE TURNOVER OF THE ASSESSE E WOULD EXCEED RS. 40 LAKHS WHICH IS OUTSIDE THE PURVIEW OF THE PROVISIONS OF SEC. 44AD OF THE ACT. WE, THEREFORE, DECLINE TO INTERFERE WITH THE FINDINGS OF THE LD. CIT(A). 8. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS DISMISSED. OR DER PRONOUNC ED IN THE OPEN COURT ON 30 TH MARCH, 2015 SD/ - SD/ - ( JOGINDER SINGH ) (N.K. BILLAIYA) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI ; DATED : 30 TH MARCH, 2015 . . ./ RJ , SR. PS / 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