GULZER R, MERCHANT, MUMBAI V. ITO 21(3)(1), MUMBAI

ITA 5872/MUM/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 56062 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 4 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-12-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Next Hearing Date: 30-11-2011
• Assessment Year: 1997-1998
• Appeal Filed On: 23-07-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: P C MAURYA
• Assessee Lawyers: K GOPAL

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES SMC , MUMBAI BEFORE SHIRI RAJENDRA SINGH, A.M. ITA NO. : 5872/MUM/2010 ASSESSMENT YEAR : 1997-98 MRS . GULZAR R. MERCHANT C/O M/S. MAKKER & CO. SHOP NO.9, SHAMJI MORARJI BUILDING, CHAMSHI BHIMJI ROAD, MAZGAON, MUMBAI-400 010 PAN NO : AALPM 6104 A VS. THE INCOME TAX OFFICER, WARD - 21(3) (1), MUMBAI (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI K. GOPAL RESPONDENT BY : SHRI P. C. MAURYA DATE OF HEARING : 30 .11.2011 DATE OF PRONOUNCEMENT : 02. 12.2011 ORDER PER RAJENDRA SINGH (AM) : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER DATED 18.11.2009 OF THE LD. CIT(A)-32 FOR THE ASSESSMENT YEAR 1997-98. THE ASSESSEE IN THIS APPEAL HAS RAISED DISPUTES ON TWO DIFFERENT GROUNDS, WHICH RELATE TO ADDITIONS OF `. 1,10,775/- AND `. 50,000/- MADE BY THE AO. 2. THE FACTS IN BRIEF ARE THAT THE AO FROM VDIS DEC LARATION MADE BY THE ASSESSEE NOTED THAT THE ASSESSEE HAD DECLARED F IX DEPOSIT WORTH `. 1,10,775/- IN DEVELOPMENT CO-OPERATIVE BANK, MUMBAI . THE VDIS ITA NO : 5872/MUM/2010 MRS. GU LZAR R. MERCHANT 2 DECLARATION HAD BECOME INVALID AS THE ASSESSEE HAD FAILED TO PAY TAX ON THE BASIS OF DECLARATION MADE. THE ASSESSEE WAS, HO WEVER, REQUIRED TO EXPLAIN THE SOURCE OF DEPOSIT. AO OBSERVED THAT THE ASSESEE HAD NOT DECLARED THE DEPOSIT FOR THE RELEVANT YEAR OR IN TH E RETURNS OF INCOME OF THE EARLIER YEARS. HE, THEREFORE, TREATED THE SAME AS INCOME OF THE ASSESSEE U/S.69 OF THE I.T. ACT. THE AO ALSO ADDED A SUM OF `. 50,000/- AS INCOME FROM OTHER SOURCES, AS THE ASSESSEE HAD NOT FILED THE RETURN OF INCOME FOR THE SAID YEAR. 3. IN APPEAL, CIT(A) CONFIRMED THE ORDER OF THE AO AGGRIEVED BY WHICH THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL . 4. BEFORE ME, THE LD. AR FOR THE ASSESSEE SUBMITTED THAT THE DEPOSITS DECLARED BY THE ASSESSEE IN VDIS WERE THE REINVESTMENT OF DEPOSITS MADE EARLIER AND THE ORIGINAL INVESTMENT D ID NOT RELATE TO THIS YEAR. HE SUBMITTED COPIES OF THE CERTIFICATE FROM D EVELOPMENT CO- OPERATIVE BANK, MUMBAI WHICH SHOWS THE DEPOSIT HAD BEEN MADE ON 08.10.1996, THE MATURITY DATE OF WHICH WAS 10.09.19 97. THE LD. AR FURTHER SUBMITTED THAT THE DEPOSIT ON 08.10.1996 WA S REINVESTMENT OF THE EARLIER DEPOSIT MADE WITH THE BANK. IT WAS, ACC ORDINGLY, URGED THAT THE ADDITION MADE SHOULD BE DELETED. AS REGARDS THE ADDITION OF `. 50,000/-, IT WAS SUBMITTED THAT THE AO HAD NOT GIVE N ANY BASIS FOR ADDING THE SUM OF `. 50,000/-. THE LD. DR ON THE OTHER HAND, SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW AND P LACED RELIANCE ON THE FINDINGS GIVEN IN THE RESPECTIVE ORDERS. 5. I HAVE PERUSED THE RECORDS AND CONSIDERED THE MA TTER CAREFULLY. THE DISPUTE IS REGARDING THE ADDITION OF `. 1,10,775/- ON ACCOUNT OF DEPOSITS WITH DEVELOPMENT CO-OPERATIVE BANK, MUMBAI AND `. 50,000/- AS INCOME FROM OTHER SOURCES. THE AO HAD MADE AN AD DITION OF ITA NO : 5872/MUM/2010 MRS. GU LZAR R. MERCHANT 3 `. 1,10,775/- ON THE BASIS OF DECLARATION OF DEPOSIT M ADE BY THE ASSESSEE IN THE VDIS DECLARATION FORM. THE LD. AR F OR THE ASSESSEE HAS HOWEVER, SUBMITTED THE COPIES OF INVESTMENT CERTIFI CATE FROM THE BANK SHOWING THAT DEPOSIT HAD BEEN MADE ON 08.10.1996, W HICH WAS REINVESTMENT OF THE EARLIER DEPOSIT. THE MATTER, TH EREFORE, IN MY VIEW REQUIRES VERIFICATION AS TO THE YEAR IN WHICH THE O RIGINAL DEPOSIT HAD BEEN MADE. THIS CERTIFICATE WAS NOT AVAILABLE BEFOR E THE LOWER AUTHORITIES. THEREFORE, FOR ARRIVING AT FAIR DECISI ON IN THE MATTER, THE ISSUE REQUIRES FRESH EXAMINATION. I, THEREFORE, SET ASIDE THE ORDER OF THE CIT(A) AND RESTORE THE MATTER BACK TO THE FILE OF T HE AO FOR PASSING A FRESH ORDER AFTER NECESSARY EXAMINATION IN THE LIGH T OF THE OBSERVATIONS MADE ABOVE AND AFTER ALLOWING AN OPPORTUNITY OF HEA RING TO THE ASSESSEE. AS REGARDS THE ADDITION OF `. 50,000/-, THE AO HAD MADE THE ADDITION ONLY ON THE BASIS OF GUESS WORK WITHOUT AN Y MATERIAL TO SUPPORT THE ADDITION. SUCH ADDITION, THEREFORE, CAN NOT BE SUSTAINED. THE ADDITION MADE OF `. 50,000/- IS, THEREFORE, DELETED. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PAR TLY ALLOWED IN TERMS OF THE ORDER ABOVE. ORDER PRONOUNCED ON THIS 2 ND DAY OF DECEMBER, 2011. SD/ - ( RAJENDRA SINGH ) ACCOUNTANT MEMBER MUMBAI, DT: 02/12/2011 ITA NO : 5872/MUM/2010 MRS. GU LZAR R. MERCHANT 4 COPY FORWARDED TO : 1. THE APPELLANT, 2. THE RESPONDENT, 3. THE C.I.T. 4. CIT (A) 5. THE DR, SMC - BENCH, ITAT, MUMBAI //TRUE COPY// BY ORDER ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI ROSHANI