Manojbhai C Timbalia, Ahmedabad V. ITO, Ward-7(2)(3), Ahmedabad

ITA 612/AHD/2019

AI Insights

The case involves Manojbhai C. Timbalia, who appealed against the addition of Rs. 1.77 crores as unexplained money deposited in his bank account under section 69A of the Income Tax Act, 1961. The assessee had not filed a return of income for the Assessment Year 2010-11, as his income was below the taxable limit. However, a substantial amount was credited to his bank account, leading to an investigation. The Assessing Officer made the addition after the assessee failed to produce evidence regarding the transactions. The assessee contended that the transactions were fraudulent and not conducted by him. The Commissioner of Income Tax (Appeals) upheld the addition, leading to the current appeal. The Tribunal found that the Assessing Officer did not adequately investigate the assessee's claims of fraud and directed a fresh assessment.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 114192 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 1 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-05-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 09-04-2023
• Assessment Year: 2010-2011
• Appeal Filed On: 08-04-2019
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Salary income; Set aside
• Section: 148; 143(3); 133(6); 69A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “B” BENCH Before: Smt. Annapurna Gupta, Accountant Member And Shri T.R. Senthil Kumar, Judicial Member Manojbhai C. Timbalia, I-402, Jivanpran Residency, Nr. Swaminarayan Temple Haridarshan Cross Road, Naroda, Ahmedabad PAN: AIKPT6297N (Appellant) Vs The ITO, Ward-7(2)(3), Ahmedabad (Respondent) Assessee Represented: Shri Manoj C Timabaliya, A.R. Revenue Represented: Shri Atul Pandey, Sr.D.R. Date of hearing : 10-04-2023 Date of pronouncement : 26-05-2023 आदेश/ORDER PER : T.R. SENTHIL KUMAR, JUDICIAL MEMBER:- This appeal is filed by the Assessee as against the appellate order dated 19.02.2019 passed by the Commissioner of Income Tax (Appeals)-7, Ahmedabad, arising out of the assessment order passed under section 143(3) r.w.s. 147 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) relating to the Assessment Year (A.Y) 2010-11. ITA No. 612/Ahd/2019 Assessment Year 2010-11 I.T.A No. 612/Ahd/2019 A.Y. 2010-11 Page No Manojbhai C. Timbalia vs. ITO 2 2. The brief facts of the case is that the assessee is an individual getting income from salary and other sources. For the Assessment Year 2010-11, the assessee has not filed the Return of Income since annual salary income was Rs. 1,20,000/- which is below the taxable limit. The Assessing Officer having information that an amount of Rs. 1,77,12,377/- was credited into the bank account held by the assessee, but the assessee has not filed any Return of Income. 2.1. Therefore a notice u/s. 148 was issued on 31.03.2017 for escaped income. The assessee filed a Return of Income on 31.10.2017 declaring salary income of Rs. 1,20,000/-. The assessee filed an affidavit dated 27.11.2017 stating that he was working as salesman with Arihant Trading Company having addressed 5 th Floor, Ravi Apartment, Mulund (w), Mumbai and during the Financial Year 2009-10, he received salary of Rs. 1,20,000/- only. The assessee has given his personal documents to Shri Jigneshbhai Doshi, Proprietor of Arihant Trading Company for opening of salary account and signed in account opening form initially. However Shri Jigneshbhai Doshi paid the salary of Rs. 10,000/- by cash only. Thus Shri Jigneshbhai Doshi has fraudulently operated the above accounts and assessee is not responsible for the above transactions and the same is to be verified with Shri Shri Jigneshbhai Doshi only. The assessee submitted that he did not deposit any money in these bank accounts. I.T.A No. 612/Ahd/2019 A.Y. 2010-11 Page No Manojbhai C. Timbalia vs. ITO 3 2.2. The Assessing Officer held that the assessee failed to produce Shri Shri Jigneshbhai Doshi who has operated the bank accounts. Therefore the A.O. made the addition of Rs. 1,77,12,377/- as unexplained money deposited in bank account u/s. 69A of the Act and demanded tax thereon. 3. Aggrieved against the same, the assessee filed an appeal before Commissioner of Income Tax (Appeals). During the appellate proceedings, the assessee submitted that he visited Bombay Office of Arihant Trading Company and found that the signature in the cheques are bogus and the bank accounts were operated by Shri Jigneshbhai Doshi himself. The assessee has never gone to bank for opening any account. Therefore he filed a criminal complaint against Shri Jigneshbhai Doshi and Bank Manager of Shamrao Vitthal Co.Op. Bank Ltd. on 26.12.2017 with Mulund Police Station at Mumbai. The assessee also produced copy of the statement recorded by Mulund Police Station on 04.03.2018 about the cheating activity of Shri Jigneshbhai Doshi. However the Ld. CIT(A) held that in the absence of corroborative evidence to prove that the bank accounts were pertaining to the entries of Shri Jigneshbhai Doshi, the addition made by the A.O. of Rs. 1.77 crores is confirmed and thus dismissed the assessee’s appeal. 4. Aggrieved against the same, the assessee is in appeal before us on the addition of Rs. 1.77 crores made u/s. 69A of the Act. During the course of hearing, the assessee by himself (party in person) appeared before us and reiterated the above submissions and also filed before us the complaint filed by the assessee before I.T.A No. 612/Ahd/2019 A.Y. 2010-11 Page No Manojbhai C. Timbalia vs. ITO 4 Mulund Police Station, Mumbai in December, 2017. The assessee also submitted before us, the charge-sheet filed by Central Bureau of Investigation, Economic Offences Wing, Mumbai dated 28.09.2016 wherein the assessee is been shown as accused no. 16, for fraudulent bank transactions, dishonestly inducing delivery of property, forgery and using as genuine as a forged documents. Thus the assessee claimed that he was nothing but a salaried employee which is below the taxable limit and he has not entered into banking transactions. The Assessing Officer failed to issue summons u/s. 133(6) of the Act, to his employer Shri Jigneshbhai Doshi but erroneously made an addition of Rs. 1.77 crores u/s. 69A in the hands of the assessee. Further the Assessing Officer failed to consider the complaint dated 23.12.2017 filed by the assessee before Mulund Police Station, Mumbai. It is seen from the charge-sheet dated 28.09.2016 filed by the CBI, EOW, Mumbai that there is a serious banks fraudulent were taken place using forged documents by various parties. This charge-sheet itself is filed by CBI well before the framing of assessment order dated 27.12.2017. Thus the A.O. has not made any enquiry on the submissions made by the assessee. Therefore in the Interest of Principle of Natural Justice and Fair Play, we deem it fit to set aside the order passed by the lower authorities with a direction to the Assessing Officer to look into the complaints filed by the assessee and make proper enquiry under the provisions of Income Tax Act and pass fresh assessment in accordance with law. Thus the grounds raised by the Assessee is hereby allowed. I.T.A No. 612/Ahd/2019 A.Y. 2010-11 Page No Manojbhai C. Timbalia vs. ITO 5 5. In the result, the appeal filed by the Assessee is allowed for statistical purpose. Order pronounced in the open court on 26-05-2023 Sd/- Sd/- (ANNAPURNA GUPTA) (T.R. SENTHIL KUMAR) ACCOUNTANT MEMBER True Copy JUDICIAL MEMBER Ahmedabad : Dated 26/05/2023 आदेश कȧ ĤǓतͧलͪप अĒेͪषत / Copy of Order Forwarded to:- 1. Assessee 2. Revenue 3. Concerned CIT 4. CIT (A) 5. DR, ITAT, Ahmedabad 6. Guard file. By order/आदेश से, उप/सहायक पंजीकार आयकर अपीलȣय अͬधकरण, अहमदाबाद