L;EGAL HEIR LATE SHIR ASHOK KUMAR DHOLAKIA, MUMBAI V. ITO 14(3)(3), MUMBAI

ITA 5626/MUM/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 55939 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 4 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-11-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 14-11-2011
• Assessment Year: 2007-2008
• Appeal Filed On: 12-07-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P K B MENON
• Keywords: Unexplained cash credit
• Section: 142(1); 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH A, MUMBAI BEFORE SHRI J. SUDHAKAR REDDY, A.M. AND SHRI V. DU RGA RAO, J.M. ITA NO. 5626/MUM/2010 ASSESSMENT YEAR: 2007-08 LEGAL HAIR OF LATE SHRI ASHOK KUMAR DHOLAKIA, APPELLANT 55/59, CHAMPA GALLI, MAHAJAN MARKET, MUMBAI 400 002. (PAN AAAPD9073C) VS. INCOME-TAX OFFICER-14(3)(3), RESPONDENT EARNEST HOUSE, 6 TH FLOOR, NARIMAN POINT, MUMBAI 400 021. APPELLANT BY : MR. VIJAY MEHTA RESPONDENT BY : MR. P.K.B. MENON DATE OF HEARING : 14/11/2011 DATE OF PRONOUNCEMENT: 25/11/2011 ORDER PER V. DURGA RAO, J.M.: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGA INST THE ORDER OF CIT(A)-25, MUMBAI, PASSED ON 11/06/2010 FOR THE ASSESSMENT YEAR 2007-08. 2. THE GROUND RAISED BY THE ASSESSEE IS DIRECTED AG AINST THE ACTION OF THE CIT(A) IN CONFIRMING THE ACTION OF THE AO IN TAXING A SUM OF RS. 1,50,000/- AS UNEXPLAINED CASH CREDIT U/S 68 OF THE ACT. 3. THE ASSESSEE ALSO RAISED AN ADDITIONAL GROUND, W HICH READS AS UNDER:- ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEA RNED CIT(A) OUGHT TO HAVE ALLOWED THE LONG TERM CAPITAL LOSS ON THE SALE OF SHOP AT VIHAR OF RS. 2,35,679/-. ITA NO. 5626/M/2010 LEGAL HEIR OF LATE SHRI ASHOK KUMAR DHALAKIA 2 4. AFTER HEARING THE LEARNED REPRESENTATIVES OF THE PARTIES, WE ADMIT THE AFORESAID ADDITIONAL GROUND RAISED BY THE ASSESSEE. 5. BRIEFLY STATED THE FACTS ARE THAT THE ASSESSEE I S AN INDIVIDUAL AND IS ENGAGED IN THE BUSINESS OF TRADING OF DRESS MATERIAL FROM ITS PROPRIETARY CONCERN M/S PANACHAND T. DABHAI & CO.. DURING THE YEAR UNDER CONSIDERATION THE ASSESSEE FILED HIS RETURN O F INCOME DECLARING TOTAL INCOME OF RS. 3,57,182/-. THE AO NOTICED THAT THE ASSESSEE HAD SHOWN LONG TERM CAPITAL LOSS OF RS. 2,35,679/- ON S ALE OF SHOP AT VIRAR AND THE SAME HAD BEEN CLAIMED TO BE CARRIED F ORWARD. THE AO VIDE NOTICE U/S 142(1) DATED 14/01/2009 ASKED THE A SSESSEE TO SUBMIT THE COPY OF PURCHASE/SALE AGREEMENT OF THE S HOP AT VIRAL AND COPY OF BANK STATEMENT AND OTHER RELATED DETAILS IN SUPPORT OF THIS CLAIM OF LOSS FROM THIS PROPERTY. HOWEVER, NO DETAI LS IN SUPPORT OF THE SAID CLAIM HAD BEEN SUBMITTED. THE AO OBSERVED THAT THE ONUS OF PRODUCING THE EVIDENCE IN SUPPORT OF THE ABOVE STAT ED CLAIM OF LOSSES IS ON THE ASSESSEE. SINCE THE ASSESSEE HAD NOT FURN ISHED ANY DETAILS IN SUPPORT OF THE SAID LOSS, THE AO HELD THAT THERE WAS NO SUCH MADE, HENCE, LOSS OF RS. 2,35,679/- IS NOTHING BUT A BOGU S CLAIM. AS THE SOURCE OF AMOUNT OF RS. 1,50,000/- CREDITED TO BANK ACCOUNT REMAINED UNEXPLAINED, THE AO TREATED THE SAID SUM A S UNEXPLAINED CASH CREDIT U/S 68 OF THE ACT. THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE CIT(A). 6. BEFORE THE CIT(A), IT WAS EXPLAINED THAT THE ASS ESSEE HAD ACQUIRED A SHOP AT VIRAR SINCE 1982-83 AT THE COST OF RS. 81,000/- AND WAS STAYING IN SOUTH MUMBAI. IT WAS FURTHER EXP LAINED THAT THE MAFIA IN VIRAR WANTED TO TAKE THE SHOP AT SOME PRIC E FIXED BY THE SAID MAFIA FOR RS. 1,50,000/-. AFTER CONSIDERING THE SUB MISSIONS OF THE ASSESSEE, THE CIT(A) CONFIRMED THE ORDER OF THE AO OBSERVING THAT IN THE ABSENCE OF ANY DOCUMENTARY EVIDENCE FOR HAVING EITHER SOLD THE PROPERTY IN QUESTION THE AMOUNT OF RS. 1,50,000/- C REDITED IN THE BANK ACCOUNT OF THE ASSESSEE REMAINED UNEXPLAINED, PARTICULARLY IN ITA NO. 5626/M/2010 LEGAL HEIR OF LATE SHRI ASHOK KUMAR DHALAKIA 3 THE ABSENCE OF ANY DOCUMENTARY EVIDENCE AND WHEREAB OUT THE PERSON WHO ISSUED CHEQUE. STILL AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE US. 7. BEFORE US, THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE SHOP BELONGING THE ASSESSEE WAS FORCIBLY TAKEN WITHOUT THERE BEING ANY AGREEMENT AND THE CONSIDERATION OF RS. 1, 50,000/- WAS PAID. IT IS FURTHER SUBMITTED THAT IN THE ENTIRE TR ANSACTION, MAFIA WAS INVOLVED AND THERE IS NO OPTION FOR THE ASSESSEE TO NEGOTIATE WITH THE PARTIES, THEREFORE, UNDER UNAVOIDABLE CIRCUMSTANCES , THE ASSESSEE TOOK THE AMOUNT. IT IS, THEREFORE, SUBMITTED THAT I T IS VERY DIFFICULT FOR THE ASSESSEE TO PRODUCE THE DETAILS IN RESPECT OF P ERSONS, WHO HAS TAKEN THE PROPERTY AND THE PARTICULARS OF THE AMOUN T PAID. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT HAV ING POWER U/S 133, THE AO COULD HAVE DEPUTED HIS INSPECTORS TO FI ND OUT WHO ARE STAYING IN THE PROPERTY AND IN WHOSE NAME THE PROPE RTY IS THERE. THE LEARNED COUNSEL FOR THE ASSESSEE PLACED RELIANCE ON THE JUDGMENT OF HONBLE CALCUTTA HIGH COURT IN THE CASE OF KAMADHEN U VYAPAR CO., 263 ITR 692. 8. ON THE OTHER HAND, THE LEARNED DR SUBMITTED THAT THE ASSESSEE HAS FAILED TO ESTABLISH THAT WHO HAS TAKEN THE PROP ERTY AND, AT LEAST, FAILED TO PROVIDE THE DETAILS ABOUT PERSON, WHO HAS ISSUED THE CHEQUE. HE, THEREFORE, SUBMITTED THAT THE AO WAS UNABLE TO PROCEED TO INVESTIAGE/ENQUIRY IN TO THE MATTER. FINALLY, HE SU PPORTED THE ORDERS OF THE AUTHORITIES BELOW. 9. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS, PERUSE D THE RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELO W. THE CASE OF THE ASSESSEE IS THAT HE IS THE OWNER OF THE SHOP SITUAT ED AT VIRAR AND HE HAS FORCIBLY MADE TO SELL THE FLAT TO AN UNKNOWN PE RSON BECAUSE OF INVOLVEMENT OF MAFIA AND HE HAD RECEIVED RS. 1,50,0 00/-. IT IS A FACT THAT HE HAD RECEIVED ONLY RS. 1,50,000/- AND THE SA ME WAS PRESENTED ITA NO. 5626/M/2010 LEGAL HEIR OF LATE SHRI ASHOK KUMAR DHALAKIA 4 IN THE BANK. WE ARE OF THE VIEW THAT SINCE THE CHEQ UE WAS HONORED AND CREDITED RS. 1,50,000/- INTO ASSESSEES ACCOUN T, THE ASSESSEE COULD HAVE APPROACHED THE BANK AUTHORITIES AND GOT THE DETAILS OF THE PERSON FROM WHOM HE HAS RECEIVED THE SAID AMOUNT. T HEREFORE, THE ASSESSEE FAILED TO DISCHARGE THE ONUS LIES ON HIM U /S 68 OF THE ACT. EVEN THE AO HAVING POWER OUGHT TO HAVE MADE AN ENQU IRY ABOUT THE ISSUE IN DISPUTE, HE FAILED TO DO SO. TAKING INTO C ONSIDERATION OF THE ENTIRE FACTS AND CIRCUMSTANCES OF THE CASE, IN THE INTEREST OF JUSTICE, WE RESTORE THE ISSUE BACK TO THE FILE OF THE AO WIT H A DIRECTION TO MAKE AN ENQUIRY INTO THE ISSUE AND DECIDE THE ISSU E AFRESH IN ACCORDANCE WITH LAW AFTER PROVIDING REASONABLE OPPO RTUNITY OF BEING HEARD TO THE ASSESSEE. WE DIRECT THE ASSESSEE TO SU BMIT THE DETAILS OF THE PERSON WHO HAS ISSUED CHEQUE,FROM WHOSE ACCOUNT THE MONEY HAS BEEN TRANSFERRED TO HIS ACCOUNT AND IN WHOSE NAME T HE SHOP IS THERE, ETC. IN SUPPORT OF HIS CLAIM. THUS, THE GROUND RAIS ED BY THE ASSESSEE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSE. 10. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON THIS 25 TH DAY OF NOVEMBER, 2011. SD/- SD/- (J. SUDHAKAR REDDY) (V. DU RGA RAO) ACCOUNTANT MEMBER JUDI CIAL MEMBER MUMBAI, DATED: NOVEMBER, 2011 KV ITA NO. 5626/M/2010 LEGAL HEIR OF LATE SHRI ASHOK KUMAR DHALAKIA 5 COPY TO:- 1) THE APPELLANT. 2) THE RESPONDENT. 3) THE CIT (A) CONCERNED. 4) THE CIT CONCERNED. 5) THE DEPARTMENTAL REPRESENTATIVE, A BENCH, I.T .A.T., MUMBAI. BY ORDER //TRUE COPY// ASST. REGISTRAR, I.T.A.T., MUMBAI.