SHRI VIVEKANAND J. KELUSKAR, MUMBAI V. ACIT-25(1), MUMBAI

ITA 6136/MUM/2017

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 8031 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 2 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-01-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2013-2014
• Appeal Filed On: 06-10-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJEEV GUBGOTRA LD
• Assessee Lawyers: K K LALKAKA LD
• Keywords: Unexplained cash credit
• Section: 68; 143(3)

Judgement Text

ITA NO.6136/MUM/2017 VIVEKANAND J.KELUSKAR ASSESSMENT YEAR :2013-14 1 IN THE INCOME TAX APPELLATE TRIBUNAL F BENCH, MUMBAI BEFORE HONBLE SHRI SANDEEP GOSAIN, JM AND HONBLE SHRI MANOJ KUMAR AGGARWAL, AM ./ I.T.A. NO.6136/MUM/2017 ( / ASSESSMENT YEAR: 2013-14) VIVEKANA ND J.KELUSKAR C-302 RUSHABH APTTS. CHS LTD VEERA DESAI ROAD ANDHERI (W) MUMBAI 400 053 / VS. ASSISTANT C OMMISSIONER OF INCOME TAX-25(1) R.NO.400/402, BLDG. NO. C-10 PRATYAKSHKAR BHAWAN, BANDRA, MUMBAI ./ ./PAN/GIR NO. AABPK-6023-C ( /APPELLANT ) : ( / RESPONDENT ) ASSESSEE BY : K.K.LALKAKA - LD. AR R EVENU E BY : RAJEEV GUBGOTRA - LD.DR / DATE OF HEARING : 27/12/2018 / DATE OF PRONOUNCEMENT : 02/01/2019 / O R D E R PER MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1. AFORESAID APPEAL BY ASSESSEE FOR ASSESSMENT YEAR [AY] 2013-14 CONTEST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS) 37, MUMBAI [CIT(A)], APPEAL NO. CIT(A)-37/IT-703/ACIT25(1)/2015-16 DATED 25/07/2017 QUA CONFIRMATION OF CERTAIN ADDITION U/S 68 FOR RS. 49.80 LACS. 2.1 BRIEFLY STATED THE ASSESSEE BEING RESIDENT INDIVIDUAL ENGAGED AS SERVICE PROVIDER UNDER TWO PROPRIETORSHIP CONCERNS NAMELY SAM INTERNATIONAL & SAM ELECTRICALS WAS ASSESSED FOR IMPUGNED AY IN ITA NO.6136/MUM/2017 VIVEKANAND J.KELUSKAR ASSESSMENT YEAR :2013-14 2 SCRUTINY ASSESSMENT U/S 143(3) ON 31/12/2015 BY LD. ASSISTANT COMMISSIONER OF INCOME TAX-CIRCLE 25(1), MUMBAI [AO ]. THE INCOME OF THE ASSESSEE WAS DETERMINED AT RS.163.61 LACS AFTER CERTAIN ADDITIONS AS AGAINST RETURNED INCOME OF RS.112.51 LACS FILED BY THE ASSESSEE ON 25/09/2013. THE ADDITION OF RS.49.80 LACS U/S 68 RE PRESENTING CERTAIN CASH DEPOSITED BY THE ASSESSEE IN VARIOUS BANK ACCO UNTS IS THE SOLE SUBJECT OF PRESENT APPEAL BEFORE US. 2.2 DURING ASSESSMENT PROCEEDINGS, PURSUANT TO R ECEIPT OF ANNUAL INFORMATION RETURN [AIR], IT TRANSPIRED THAT THE ASSESSEE DEPOSITED A SUM OF RS.49.80 LACS IN CERTAIN SAVINGS ACCOUNTS AND AC CORDINGLY, THE ASSESSEE WAS ASKED TO EXPLAIN THE SOURCE OF DEPOSIT . THE ASSESSEE SUBMITTED THAT THE CASH DEPOSITS WERE SOURCED FROM EARLIER WITHDRAWALS. HOWEVER, NOT CONVINCED, LD. AO NOTED THAT THE ASSES SEE WAS DEPOSITING THE CASH IN THE ACCOUNTS FIRST AND WITHDRAWING THE SAME LATER ON AND THEREFORE, OPINED THAT THE EXPLANATION WAS NOT SATI SFACTORY. IN THE ABSENCE OF ANY OTHER SATISFACTORY EXPLANATION, THE AFORESAID SUM OF RS.49.80 LACS WAS ADDED TO THE INCOME OF THE ASSESS EE AS UNEXPLAINED CASH CREDIT U/S 68. 3. AGGRIEVED, THE ASSESSEE AGITATED THE SAME WITHOU T ANY SUCCESS BEFORE LD. CIT(A) VIDE IMPUGNED ORDER DATED 25/07/2 017 WHEREIN LD. CIT(A) CONFIRMED THE ADDITION ON THE GROUND THAT TH E ASSESSEE HAD ENOUGH CASH ON ALL THE DATES OF THE WITHDRAWALS AND AFTER WITHDRAWAL OF SAID CASH, THE SAME WAS NOT USED FOR ANY EXPENDITUR E AND NO SATISFACTORY EXPLANATION, IN HIS REGARD, COULD BE A DDUCED BY THE ASSESSEE. FINALLY, THE MATTER WAS CONCLUDED BY LD. CIT(A) IN THE FOLLOWING MANNER: - ITA NO.6136/MUM/2017 VIVEKANAND J.KELUSKAR ASSESSMENT YEAR :2013-14 3 5.6 AFTER CONSIDERATION OF TOTALITY OF FACTS AND CI RCUMSTANCES OF FACTS, IT IS FOUND THAT THE APPELLANT HAS GIVEN ONLY THE GENERAL EXPLA NATION FOR CASH DEPOSITS AND WITHDRAWALS WITHOUT SPECIFICALLY BRINGING ANY MATER IAL TO REBUT THE DISCREPANCIES AS NOTED ABOVE. THERE IS NO REASON FOR THE ASSESSEE TO MAKE SUCH REGULAR WITHDRAWALS. NO REASON HAS BEEN EXPLAINED BY THE AP PELLANT AS TO WHY THE CASH WERE WITHDRAWN ON SEVERAL OCCASIONS FROM THE BANK, IF THE SAME WERE NOT REQUIRED. IN ABSENCE OF ANY PLAUSIBLE REASON FOR SUCH WITHDRA WAL AND THEN RE-DEPOSITED, PRIMA FACIE, IT DOES NOT APPEAR THAT APPELLANT WAS IN PHY SICAL POSITION OF WITHDRAWAL OF CASH FOR BEING REDEPOSITED LATER. UNDER THESE CIRCUMSTAN CES, THE CLAIM OF THE APPELLANT THAT CASH WAS WITHDRAWN AND REDEPOSITED LATER IS NO T SATISFACTORILY EXPLAINED. THEREFORE, ADDITION OF RS.49,80,000/- MADE BY THE A .O. IS CONFIRMED. THIS GROUND IS DISMISSED AGGRIEVED, THE ASSESSEE IS IN FURTHER APPEAL BEFORE US. 4. THE LD. AUTHORIZED REPRESENTATIVE FOR ASSESSEE [ AR], SHRI K.K.LALKAKA, DRAWING OUR ATTENTION TO THE DOCUMENTS PLACED IN TH E PAPER- BOOK, SUBMITTED THAT THE ASSESSEE WAS ENGAGED IN RENDERIN G MULTIPLE SERVICES TO ITS CLIENTS WHICH WERE IN THE SHAPE OF PROCURING ORDERS FROM GOVERNMENT AND NON-GOVERNMENT BODIES TILL THE DATE ORDER WAS COMPLETED INCLUDING REALIZATION OF PROCEEDS. THE AS SESSEE EARNS COMMISSION FOR SERVICES RENDERED AND ALSO PAYS COMM ISSION TO AGENTS. THE ATTENTION WAS DRAWN TO THE FACT THAT THE ASSESS EE WAS MAINTAINING TWO BANK ACCOUNTS ONE WITH SARASWAT BANK AND ANOTHER ONE WITH ORIENTAL BANK OF COMMERCE . THE ASSESSEE MADE WITHDRAWALS OF RS.100 LACS AND DEPOSITED A SUM OF RS.49.80 LACS ON AGGREG ATE BASIS DURING IMPUGNED AY IN THESE ACCOUNTS. THE ASSESSEE HAD OPE NING CASH BALANCE OF RS.15.29 LACS WHICH WAS EVIDENCED BY CASH FLOW STATEMENT SUBMITTED BY THE ASSESSEE. THE LD. AR FURTHER SUBMI TTED THAT THAT DURING THE COURSE OF ASSESSMENT PROCEEDING, COMPLETE DETAI LS OF CASH WITHDRAWALS AS WELL AS CASH DEPOSITS, CASH FLOW STA TEMENTS, COPIES OF BANK STATEMENT ETC. WERE DULY FURNISHED AND BALANCE S REFLECTED THEREIN ITA NO.6136/MUM/2017 VIVEKANAND J.KELUSKAR ASSESSMENT YEAR :2013-14 4 TALLIED WITH THE AUDITED FINANCIAL STATEMENTS AND T HEREFORE, THE ADDITIONS WERE NOT JUSTIFIED PARTICULARLY WHEN LD. AO FAILED TO BRING ON RECORD ANY EVIDENCE WHICH PROVES THAT CASH WITHDRAWALS WERE IN VESTED SOMEWHERE ELSE AND THE CASH BALANCE IN THE CASH BOOK WAS FICT ITIOUS. THE LD. AR SUBMITTED THAT ONCE SOURCE OF CASH DEPOSIT WAS EXPL AINED, SUBSEQUENT WITHDRAWALS WERE NOT REQUIRED TO BE EXPLAINED. PER CONTRA, LD. DR SUBMITTED THAT THE CONDUCT OF THE ASSESSEE WAS NOT PRUDENT AND THEREFORE, THE ADDITIONS WERE JUSTIFIED. 5. WE HAVE CAREFULLY HEARD THE RIVAL SUBMISSIONS A ND PERUSED RELEVANT MATERIAL ON RECORD INCLUDING FINANCIAL STA TEMENTS & OTHER DOCUMENTARY EVIDENCES PLACED BEFORE US. IT IS NOTED THAT THE ASSESSEES BOOKS OF ACCOUNTS WERE SUBJECT TO AUDIT AND THE BAN K ACCOUNTS IN WHICH IMPUGNED TRANSACTIONS WERE CARRIED OUT, WERE PART O F THE BOOKS OF ACCOUNTS. THE CASH TRANSACTIONS ROUTED THROUGH BANK ACCOUNTS WERE DULY REFLECTED IN ASSESSEES CASH BOOK AND OPENING CASH & BANK BALANCES AS WELL AS CLOSING CASH & BANK BALANCES TA LLIED WITH THE BOOKS OF ACCOUNTS. THE FLOW OF CASH WAS DULY SUPPORTED BY CASH FLOW STATEMENTS SUBMITTED BY THE ASSESSEE. NO INFIRMITY HAS BEEN F OUND IN THE BOOKS OF ACCOUNTS MAINTAINED BY THE ASSESSEE. U NDER SUCH A SITUATION, THE ADDITIONS OF UNEXPLAINED CASH CREDIT U/S 68 AS MADE BY LD. AO, IN OUR OPINION, ARE BASED ON MERE GUESS WORK, P RESUMPTION & SUSPICION SINCE THE SAID TRANSACTIONS WERE DULY REF LECTED IN THE BOOKS OF ACCOUNTS. NO DEFECT COULD BE POINTED OUT BY LD. AO IN ASSESSEES BOOK EXCEPT FOR THE FACT THAT THE ASSESSEE MADE DEPOSITS IN THE ACCOUNTS AND WITHDREW SIMILAR AMOUNTS THEREAFTER. HOWEVER, WE FI ND THAT NOTHING IN LAW PROHIBITS THE OPERATION OF BANK ACCOUNTS IN THI S MANNER. AS RIGHTLY ITA NO.6136/MUM/2017 VIVEKANAND J.KELUSKAR ASSESSMENT YEAR :2013-14 5 POINTED OUT BY LD.AR, THE ADDITION COULD NOT BE MAD E ON MERE PRESUMPTION WITHOUT EVIDENCING THAT CASH WITHDRAWAL S WERE INVESTED SOMEWHERE ELSE AND THE CASH BALANCE IN THE CASH BOO K WAS FICTITIOUS. THEREFORE, ON THE GIVEN FACTUAL MATRIX, THE IMPUGNE D ADDITION COULD NOT BE SUSTAINED AND THEREFORE, WE DELETE THE SAME. 6. RESULTANTLY, THE APPEAL STANDS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 02 ND JANUARY, 2019. SD/- SD/- (SANDEEP GOSAIN) (MANO J KUMAR AGGARWAL) !' / JUDICIAL MEMBER !' / ACCOUNTANT MEMBER MUMBAI; ! DATED : 02/01/2019 SR.PS, JAISY VARGHESE / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. % ( ) / THE CIT(A) 4. % / CIT CONCERNED 5. &' ( , ( , / DR, ITAT, MUMBAI 6. ')*+ / GUARD FILE / BY ORDER, / (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI.