SUSHIL M. RANEY, MUMBAI V. ITO 12(30(3), MUMBAI

ITA 5718/MUM/2010

• Counselvise Citation: 571819914 RSA 2010
• Duration Of Justice: 1 year(s) 5 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-12-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 01-12-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 14-07-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P C MAURYA
• Assessee Lawyers: S V JOSHI
• Keywords: Unexplained expenditure; Assessment record
• Section: 69C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH -MUMBAI BEFORE HONBLE SHRI RAJENDRA SINGH,(A.M.) I.T.A. NO.5718/MUM/2010 ASSESSMENT YEAR : 2006-07 MR. SUSHIL M. RANEY 810, TULSIANI CHAMBERS 212, NARIMAN POINT MUMBAI-400 021. P.A. NO.(AAAPR 6743 R) VS. INCOME TAX OFFICER - 12(3)(3) AAYAKAR BHAVAN M.K. ROAD MUMBAI-400 020. ( APPELLANT ) ( RESPONDENT ) APPELLANT BY : : SHRI S.V. JOSHI RESPONDENT BY SHRI P.C. MAURYA DATE OF ORDER : 1/12/2011 DATE OF PRONOUNCEMENT : 2 1/12/2011 O R D E R PER RAJENDRA SINGH (AM) THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 26.5.2010 OF CIT(A) FOR THE ASSESSMENT YEAR 2006 -07. THE ONLY DISPUTE RAISED IN THIS APPEAL IS REGARDING ADD ITION ON ACCOUNT OF UNEXPLAINED EXPENDITURE UNDER SECTION 69C OF THE INCOME TAX ACT. 2. THE FACTS IN BRIEF ARE THAT THE AO NOTED FROM AIR DETAILS THAT THE ASSESSEE HAD PAID A SUM OF RS.2,57,726/- AGAINST CITI BANK CREDIT CARD BILLS. THE ASSESSEE SUBMITTED THE CREDIT CA RD STATEMENT OF RS.2,57,726/- AND EXPLAINED THAT A SUM O F ITA NO.5718/M/10 A.Y. :06-07 2 RS.51,175/- WAS PAID BY THE ASSESSEE FROM HIS REGULAR BANK ACCOUNT I.E. AMERICAN EXPRESS SAVINGS BANK. THE ASSESSEE FURTHER EXPLAINED THAT BALANCE OF EXPENDITURE OF RS.2 ,06,551/- WAS INCURRED OUT OF CASH OF RS.4,10,000/- LEFT WITH HIM BY HIS COUSIN SISTER MS. RIMA K. TEJWANI WHO STAYS IN FLORIDA, USA AND WHO CAME TO VISIT INDIA IN JANUARY AND FEBRUARY, 2005 . SHE HAD KEPT THE CASH WITH THE ASSESSEE FOR SAFE CUSTODY. THE ASSESSEE FILED COPY OF LETTER DATED 31.3.2005 ADDRESSED TO THE ASSESSEE BY MS. RIMA K. TEJWANI, IN WHICH IT WAS CLEARLY STATED T HAT A SUM OF RS.4.10 LACS WAS KEPT IN SAFE CUSTODY OF THE ASSESSEE FOR USE ON HER NEXT VISIT TO INDIA. THE AO HOWEVER, DID NO T ACCEPT THE EXPLANATION OF THE ASSESSEE ON THE GROUND THAT CREDIT WO RTHINESS AND CAPACITY OF THE COUSIN OF THE ASSESSEE WAS NOT PROVED A ND DETAILS OF THE AMOUNT BROUGHT BY HER ON HER ARRIVAL TO INDIA WERE NOT GIVEN. THE AO ALSO OBSERVED THAT THERE IS NO REA SON AS TO WHY THE SAID AMOUNT WAS TO BE KEPT IN SAFE CUSTODY AND NOT TO BE INVESTED. THE AO THEREFORE, ADDED A SUM OF RS.2,06 ,551/- AS UNEXPLAINED EXPENDITURE UNDER SECTION 69C OF THE IT A CT. IN APPEAL, THE ASSESSEE SUBMITTED THAT HER COUSIN WAS LIVING I N USA FOR MORE THAN 15 YEARS AND HAD CARRIED SOME CASH TO INDI A. SHE HAD ALSO CONFIRMED THE SAFE KEEPING OF CASH WITH HIM AND , THEREFORE, ADDITION WAS NOT JUSTIFIED. CIT(A) HOWEVE R, CONFIRMED ITA NO.5718/M/10 A.Y. :06-07 3 THE ORDER OF THE AO AGGRIEVED BY WHICH, THE ASSESSEE IS I N APPEAL BEFORE THE TRIBUNAL. 3. BEFORE ME, THE LD. AR FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAD EXPLAINED THE SOURCE OF CASH EXPENDITURE OUT O F THE MONEY RECEIVED BY HIM FROM HIS COUSIN SISTER WHO WAS LIVING IN USA FOR MORE THAN 15 YEARS. SHE HAD CONFIRMED THE TRANSACTIONS AND THE CONFIRMATION LETTER WAS ALSO NOTARIZ ED. (COPY PLACED AT PAGE-3 OF THE PAPER BOOK), AND ALSO F ILED COPY OF PASSPORT SHOWING THAT SHE VISITED INDIA IN JANUARY/FEBRU ARY, 2005. THE ASSESSEE HAD, THEREFORE, DISCHARGED THE ONUS PL ACED UPON IT TO EXPLAIN THE SOURCE. THE AO HAD MADE NO FU RTHER ENQUIRY NOR HAD CALLED FOR ANY FURTHER DETAILS AND EV IDENCE FROM THE ASSESSEE AND, THEREFORE, THE ADDITION MADE BY THE A O WAS NOT CORRECT. THE CIT(A) ALSO HAD CONFIRMED THE ADDITIO N IN THE SAME MANNER WITHOUT CALLING FOR FURTHER DETAILS AND EV IDENCE OR WITHOUT MAKING ANY FURTHER ENQUIRY. 3.1 THE LD. DR ON THE OTHER HAND STRONGLY SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. HE ALSO PRODUCED THE R ELEVANT ASSESSMENT RECORDS AND PERUSAL OF WHICH SHOWED THAT THE ASSESSEE VIDE QUESTIONNAIRE DATED 21/8/2008 WAS CALLED TO EXPLAIN THE SOURCE OF CREDIT CARD EXPENSES. THE ASSESSEE HAD ITA NO.5718/M/10 A.Y. :06-07 4 EXPLAINED THE SAME ON 23/12/2008, AS PER NOTINGS MADE BY THE AO IN THE RECORDS AND, THEREAFTER, ASSESSMENT ORDER WAS PA SSED ON 31.12.2008. THE LD. DR SUBMITTED THAT IT WAS FOR T HE ASSESSEE TO FILE NECESSARY EVIDENCE TO SUBSTANTIATE THE CASH DEPOSIT. 4. I HAVE PERUSED THE RECORDS AND CONSIDERED THE RIVAL CONTENTIONS CAREFULLY. THE DISPUTE IS REGARDING ADDITI ON ON ACCOUNT OF UNEXPLAINED EXPENDITURE UNDER SECTION 69C OF THE IT ACT. THE ASSESSEE HAD INCURRED CREDIT CARD EXPENSES OF RS.2,57,726/- OUT OF WHICH A SUM OF RS.2,06,551/- WAS EXPLAINED BY THE ASSESSEE AS INCURRED OUT OF CASH OF RS.4,10,000/- LEFT WITH HIM BY HIS COUSIN SISTER MS. RIM A K. TEJWANI WHO WAS LIVING IN USA AND HAD COME TO VISIT IN DIA IN JANUARY/FEBRUARY, 2005. MS. TEJWANI HAD LEFT CASH WIT H THE ASSESSEE FOR SAFE CUSTODY TO BE USED DURING HER NEXT VISIT TO INDIA. THIS WAS DULY CONFIRMED BY MS. TEJWANI VIDE LET TER DATED 31.3.2005 ADDRESSED BY HER TO THE ASSESSEE WHICH WAS ALSO NOTORIZED. THIS LETTER HAD BEEN FILED BEFORE AO. T HE ASSESSEE HAD ALSO FILED COPY OF PASSPORT OF MS. TEJWANI WHICH HAS BEEN PLACED AT PAGE 3-5 OF THE PAPER BOOK WHICH HAD ALSO BE EN FILED WITH THE AO AND WHICH SHOWS VISIT OF MS. TEJWANI TO IN DIA IN JANUARY/FEBRUARY, 2005. UNDER THESE CIRCUMSTANCES, IN M Y VIEW, THE ONUS PLACED ON THE ASSESSEE TO EXPLAIN THE SOUR CE OF ITA NO.5718/M/10 A.Y. :06-07 5 CREDIT CARD EXPENSES WAS DISCHARGED. IT WAS FOR THE AO TO MAKE NECESSARY ENQUIRIES AND PLACE ANY ADVERSE MATERIAL TO CON TROVERT THE CLAIM OF THE ASSESSEE WHICH HAS NOT BEEN DONE IN THIS CASE. THE PERUSAL OF NOTINGS IN THE ORDER SHEET SHOWS THAT AF TER THE ASSESSEE FILED THE CONFIRMATION, AND THE PASSPORT COPY, THE RE WAS NO FURTHER QUERY MADE BY THE AO. IN CASE THE AO W AS NOT SATISFIED ABOUT THE SOURCE OF CASH, HE COULD HAVE CALLED FO R FURTHER DETAILS/EVIDENCE OR COULD HAVE HIMSELF MADE EN QUIRIES WHICH WERE NOT DONE. UNDER THESE CIRCUMSTANCES ADDITION MADE BY THE AO IS NOT JUSTIFIED. CIT(A) HAD ALSO NOT CALLED FOR ANY FURTHER DETAILS/EVIDENCE FROM THE ASSESSEE NOR ANY FUR THER ENQUIRIES WERE MADE BY HIM. MOREOVER, AMOUNT IS ALSO NOT SO BIG THAT AN NRI LIVING IN USA FOR MORE THAN 15 YEAR S, COULD NOT EXPLAIN. THEREFORE, IN MY VIEW, MAKING ADDITION IN CASE OF THE ASSESSEE UNDER SECTION 69C AS UNEXPLAINED EXPENDITURE ON THE FACTS OF THE CASE IS NOT JUSTIFIED. THE ORDER OF CIT(A) IS, THEREFORE, SET ASIDE AND ADDITION MADE IS DELETED. 5. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 21.12.2011. SD/- (RAJENDRA SINGH ) ACCOUNTANT MEMBER MUMBAI, DATED: 21.12.2011. JV. ITA NO.5718/M/10 A.Y. :06-07 6 COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT(A) CONCERNED, MUMBAI THE DR BENCH TRUE COPY BY ORDER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.