ROSHANLAL B. MEHTA, MUMBAI V. ITO 25(3)(3), MUMBAI

ITA 6389/MUM/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 2646 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-07-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2008-2009
• Appeal Filed On: 16-10-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANISH J SETH
• Assessee Lawyers: B S BIST
• Keywords: Unexplained cash credit; Salary income; Opportunity of being heard; Principle of natural justice; Additional evidence
• Section: 143(3); 133(6); 69; 68

Judgement Text

D IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY, JUDICIAL MEMBER AND SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER ./ I.T.A. NO. 6389 /MUM/2014 ( / ASSESSMENT YEAR : 2008-09) ROSHANLAL B. MEHTA, SHOP NO. 1, AAKANSHA CHS LTD., TRIKAMDAS ROAD, KANDIVALI (WEST), MUMBAI 400067. / V. INCOME TAX OFFICER, WARD 25(3)(3), R. NO. 304, C-11, PRATYAKSHAKAR BHAVAN,BANDRA(EAST) BANDRA-KURLA COMPLEX, MUMBAI 400051. ./ PAN : AEWPM9364H ( / APPELLANT ) .. ( / RESPONDENT ) ASSESSEE BY SHRI MANISH J. SETH ASSESSEE BY : SHRI B.S. BIST (D.R.) / DATE OF HEARING : 10-05-2016 / DATE OF PRONOUNCEMENT : 25-07-2016 / O R D E R PER RAMIT KOCHAR, ACCOUNTANT MEMBER THIS APPEAL, FILED BY THE ASSESSEE , BEING ITA NO. 6389/MUM/2014, IS DIRECTED AGAINST THE APPELLATE ORDER DATED 22 ND AUGUST, 2014 PASSED BY LEARNED COMMISSIONER OF INCOME TAX (APPEALS)- 35 MU MBAI (HEREINAFTER CALLED THE CIT(A)), FOR THE ASSESSMENT YEAR 2008-09, THE APPELLATE PROCEEDINGS BEFORE THE LEARNED CIT(A) ARISING FROM THE ASSESSME NT ORDER DATED 24 TH DECEMBER, 2010 PASSED BY THE LEARNED ASSESSING OFF ICER (HEREINAFTER CALLED THE AO) U/S 143(3) OF THE INCOME TAX ACT,1961 (HE REINAFTER CALLED THE ACT). ITA 6389/MUM/2014 2 2. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE IN THE MEMO OF APPEAL FILED WITH THE INCOME TAX APPELLATE TRIBUNAL, MUMBA I (HEREINAFTER CALLED THE TRIBUNAL) READ AS UNDER:- 1) ON THE FACTS OF THE CIRCUMSTANCES OF THE CASE AND I N THE LAW, THE LD. CIT (A) ERRED IN CONFIRMING THE DISALLOWANCE MAD E BY AO U/S 68 OF RS. 18,83,500/- 2) THE ID. CIT(A) OUGHT TO HAVE CONSIDERED THAT THE C ASH DEPOSITED IN THE ASSESSEE'S BANK ACCOUNT WAS BY MR. ARVIND POK HARANA TOWARDS PAYMENT FOR PURCHASES MADE BY HIM FROM THE ASSESSEE . 3) THE ID. CIT(A) OUGHT TO HAVE CONSIDERED DULY SWORN AFFIDAVIT SIGNED BY MR. ARVIND POKHARANA REGARDING HIS CONFIR MATION FOR' DEPOSITING CASH IN BANK. 4) THE ID. CIT(A) ERRED IN NOT BELIEVING IN THE STATE MENT OF MR. ARVIND POKHARANA AS HE HAS NOT FILED HIS RETURN OF I NCOME WHERE IN FACT HIS INCOME BEING BELOW TAXABLE LIMIT WAS NOT SUPP OSED TO FILE RETURN OF INCOME. 5) THE ID. CIT(A) ERRED IN NOT CONSIDERING THE FACT TH AT MR. ARVIND POKHARANA HAS MADE PURCHASES 51 TIMES DURING THE WHOL E YEAR. 6) WITHOUT PREJUDICE TO THE ABOVE GROUNDS, THE ID. CIT( A) ERRED I NOT CONSIDERING THE SETTLED LAW THAT SECTION 68 IS TO BE AP PLIED ONLY WHEN CASH CREDIT IS FOUND IN THE BOOKS OF ACCOUNTS OF THE AS SESSEE AND BANK PASS BOOK OR STATEMENT IS REFLECTION OF PARTY'S BANK ACCOUNT IN BANK'S BOOKS OF ACCOUNTS. BANK PASS BOOK OR STATEMENT IS NOT ASSESSEE'S BOOKS OF ACCOUNTS AND SECTION 68 HAS NO APPLICATION. 3. THE BRIEF FACTS OF THE CASE ARE THAT ASSESSEE IS A PROPRIETOR OF M/S MAHAVIR COLOUR COMPANY, ENGAGED IN THE BUSINESS OF RETAIL TRADING IN PAINTINGS AND HARDWARE MATERIAL. THE ASSESSEE HAS ALSO EARNED INCOME FROM SALARY AND INCOME FROM OTHER SOURCES. AIR INFORMAT ION WAS AVAILABLE WITH THE AO REGARDING THE CASH DEPOSIT OF RS. 18,83,500/ - IN THE ING VYSYA BANK, MIRA ROAD BRANCH, THANE. NOTICE U/S 133(6) OF THE ACT WAS ISSUED TO THE ING VYSYA BANK, MIRA ROAD,THANE AND BANK ACCOUNT STATEM ENT OF THE ASSESSEE FOR THE RELEVANT PERIOD WAS OBTAINED AND FROM WHICH IT WAS REVEALED THAT ASSESSEE IS MAINTAINING A SAVINGS BANK ACCOUNT NO. 540010060878. THE ITA 6389/MUM/2014 3 ASSESSEE WAS ASKED BY THE AO TO FURNISH BANK BOOK A ND CASH BOOK FOR THE RELEVANT PREVIOUS YEAR INCLUDING BANK ACCOUNTS HELD IN THE PERSONAL NAME. IN RESPONSE, THE ASSESSEE FURNISHED THE DETAILS BUT FAILED TO FURNISH THE BANK ACCOUNT STATEMENT OF ING VYSYA BANK. THE ASSESSEE SUBMITTED THAT THERE WERE NO TRANSACTIONS IN THE PERSONAL SAVINGS ACCOUN T AND THE ACCOUNT IS IN- OPERATIVE FROM A LONG PERIOD. IT WAS FURTHER SUBMI TTED THAT THERE WERE NO OTHER ASSETS AND LIABILITIES IN HIS PERSONAL CAPACI TY. THE ASSESSEE WAS CONFRONTED WITH THE AIR INFORMATION WHEREBY THERE W AS CASH DEPOSIT OF RS. 18,83,500/- IN THE SAID ING VYSYA BANK,MIRA ROAD BR ANCH, THANE. THE ASSESSEE WAS AGAIN ASKED TO EXPLAIN THE DISCREPANCY AND TO SUBMIT THE EVIDENCES ALONG WITH SOURCE OF CASH DEPOSIT IN THE BANK ACCOUNT MAINTAINED WITH THE ING VYSYA BANK. HOWEVER, THE ASSESSEE FAI LED TO DISCLOSE THE BANK ACCOUNT MAINTAINED WITH THE ING VYSYA BANK, MIRA RO AD, THANE. THE ASSESSEE WAS ASKED TO FURNISH THE EXPLANATION IN RE GARD TO THE ABOVE. THE ASSESSEE SUBMITTED THAT THE PERSONAL SAVINGS ACCOUN T IN ING VYSYA BANK WAS NOT DISCLOSED IN THE RETURN OF INCOME AND THE ASSES SEE HAS DEPOSITED AN AMOUNT OF RS. 24,48,166/- OUT OF WHICH RS. 18,83,50 0/- WAS CASH DEPOSITED AND THE REMAINING AMOUNT WAS CHEQUE DEPOSITS. IT W AS SUBMITTED THAT IF THE SAME WERE CONSIDERED THEN THE DEBTORS BALANCE WOULD REDUCED FROM RS. 37,67,788.75 TO RS. 14,75,597.75. THE ASSESSEE ENCL OSED THE STATEMENT OF DEBTORS AND CASH BOOK WHEREBY DISCLOSING THE CASH R ECEIPT FROM DEBTORS WERE FURNISHED. THE COPY OF ING VYSYA BANK BOOK WAS ALS O ENCLOSED BY THE ASSESSEE. THUS, IT WAS HELD BY THE A.O. THAT ASSES SEE HAS DELIBERATELY CONCEALED HIS SOURCE OF CASH DEPOSIT. THE ASSESSEE HAD ALSO SUBMITTED THAT ASSESSEES BOOKS RESULTS HAVE BEEN AUDITED AS PER T HE PROVISIONS OF SECTION 44AB OF THE ACT. THUS THE A.O. CAME TO THE CONCLUS ION THAT ASSESSEE HAS FAILED TO EXPLAIN THE CASH DEPOSIT OF RS. 18,83,500 /- AND TREATED THE SAME AS UNEXPLAINED CASH CREDIT U/S 68 OF THE ACT AND ADDED THE SAME TO THE INCOME OF THE ASSESSEE VIDE ASSESSMENT ORDERS DATED 24.12. 2010 PASSED U/S. 143(3) OF THE ACT. ITA 6389/MUM/2014 4 4. AGGRIEVED BY THE ASSESSMENT ORDERS DATED 24.12.2 010 PASSED BY THE A.O. U/S. 143(3) OF THE ACT, THE ASSESSEE FILED HIS FIRS T APPEAL BEFORE THE LD. CIT(A). 5. BEFORE THE LEARNED CIT(A) , THE ASSESSEE CONTEND ED THAT THE SAID ACCOUNT WAS OPERATED BY ONE MR. ARVIND POKHRANA WHO UNDERTOOK THE PAINTING CONTRACTS AND THE GOODS WERE SUPPLIED TO H IM BY THE ASSESSEE. AN AFFIDAVIT FROM MR ARVIND POKHARANA TO THIS EFFECT W AS PLACED BEFORE THE LEARNED CIT(A) WHEREBY IT WAS STATED THAT THE SAID MR ARVIND POKHARANA IS CARRYING ON BUSINESS OF COLOR PAINTING CONTRACTS, T HAT THE ASSESSEE IS A WELL WISHER ASSOCIATE AND ALSO A CLOSE RELATIVE HAD SUGG ESTED TO START THE COLOUR PAINTING JOB ON CONTRACTUAL BASIS FOR WHICH GOODS WERE SUPPLIED BY THE ASSESSEE AND LABOUR WAS ARRANGED BY THE ASSESSEE. T HE SAID BANK ACCOUNT WITH ING VYSYA BANK IS IN THE NAME OF THE ASSESSEE BUT THE ASSESSEE ALLOWED MR ARVIND POKHRANA TO USE HIS BANK ACCOUNT WITH A V IEW TO MONITOR, RECOVER AND TRANSFER AMOUNTS UPTO THE EXTENT OF MATERIAL SU PPLIED BY THE ASSESSEE AND THE ENTIRE AMOUNT DEPOSITED AND WITHDRAWN BELON GED TO MR ARVIND POKHARANA WAS THE DEPOSITION MADE BY ARVIND POKHARA NA IN THE SAID AFFIDAVIT. THE REMAND REPORT WAS CALLED BY THE LEARNED CIT(A) FROM THE AO UNDER RULE 46A OF THE INCOME TAX RULES, 1962 WHEREBY ADDITIONA L EVIDENCES FILED BY THE ASSESSEE WERE ADMITTED BY LEARNED CIT(A) AND FORWAR DED TO THE AO FOR HIS VERIFICATION AND COMMENTS , AND WHEREBY THE A.O. OB SERVED AS UNDER:- A) ON PERUSAL OF THE LEDGER ACCOUNT OF MR. ARVIND POKHARANA APPEARING IN THE BOOKS OF ASSESSEE, IT IS NOTICED T HAT GOODS WERE SUPPLIED ON VARIOUS DATES AND ON DIFFERENT AMOUNT R ANGING FROM RS.1,000 TO RS. 15,000/-. THE FIRST SUPPLY OF GOODS WAS MADE ON 03.04.2007 AND AFTER MAKING THE SUPPLIES FOR 51 TIM ES TILL ITA 6389/MUM/2014 5 11.08.2007, AN AMOUNT OF RS.35,000/- WAS RECEIVED. SIMILARLY ALL THE CASH DEPOSITED IN THE SB A/C OF THE ASSESSEE IS IN ROUND FIGURE AND NONE OF THE SALE WERE EFFECTED ON ROUND FIGURE. B) THE LEDGER ACCOUNT SHOWS NO OPENING AND CLOSING BALANCE IN RESPECT OF THE SO-CALLED SALE MADE TO MR. ARVIND PO KHARANA WHICH IS UNUSUAL IN A BUSINESS. C) THE TOTAL AMOUNT BY WAY OF THIS ALLEGED CASH DEP OSITS BY SUNDRY DEBTORS ONLY TOTALED TO THE EXTENT OF RS.11,53,162/ - AS AGAINST CASH DEPOSIT OF RS.18,83,500/- MADE IN THE SB A/C. ASSESSEE HAS NO EXPLANATION TO THE BALANCE AMOUNT OF CASH DEPOSI TED IN THE SAID SB A/C. D) THE ASSESSEE HAS NOT TRANSFERRED THE AMOUNT FROM THE SB ACCOUNT TO THE HIS BUSINESS CURRENT ACCOUNT STATING THAT THE AMOUNT DEPOSITED IN THE SAVING ACCOUNT IS PAID TO THE ACCO UNT OF MANJU MEHTA AGAINST THE GOODS PURCHASED BY THE ASSESSEE COMPANY. THIS PROVES THAT THE ALLEGED STORY OF GOODS SUPPLIE D TO MR. ARVIND POKHARANA WHO IN TURN HAS DEPOSITED THE SALE CONSID ERATION IN ASSESSEE'S BANK ACCOUNT IS AN AFTERTHOUGHT AND CANN OT BE ACCEPTED AS GENUINE. THEREFORE, THE ADDITIONAL EVID ENCE PRODUCED CANNOT BE ENTERTAINED AND SHOULD BE REJECTED ACCORD INGLY. E) FURTHER WHEN THE ASSESSEE IS FULLY AWARE OF THIS FACT THAT HE HAS SOLD THE GOODS TO MR. ARVIND POKHARANA AND THE SALE CONSIDERATION HAS BEEN DEPOSITED IN HIS BANK ACCOUNT BY THE SAID PURCHASER WHAT PREVENTED BY HIM TO EXPLAIN THE SAME BEFORE TH E ASSESSING OFFICER, WHO HAD GRANTED VARIOUS OPPORTUNITIES. ITA 6389/MUM/2014 6 F} THE. LEDGER ACCOUNT OF MR. ARVIND POKHARANA CANN OT BE ACCEPTED AS GENUINE AS THE SAME IS PREPARED IN ORDER TO EXPL AIN THE CASH DEPOSITS APPEARING IN THE BANK ACCOUNT OF THE ASSES SEE BY TAKING THE HELP OF MR. ARVIND POKHARANA. G) THE SO-CALLED SUNDRY DEBTOR MR. ARVIND POKHARANA HAS NOT FILED HIS RETURN OF INCOME FOR A.Y. 2008-09 THUS THE BUSI NESS OF THE SAID PERSON AND WHOSE ACTIVITY FROM WHICH HE HAS GENERAT ED CASH WHICH CLAIMED TO HAVE BEEN DEPOSITED IN THE BANK AC COUNT OF THE ASSESSEE CANNOT BE VERIFIABLE AND ACCEPTED AS GENUI NE ONE. IN VIEW OF THE ABOVE, THE ONLY CONCLUSION THAT CAN BE DRAWN IS THAT THE ASSESSEE HAS FAILED TO PROVE THE SOURCES OF THE CASH DEPOSITS APPEARING IN HIS BANK ACCOUNT EVEN PRODUCING THE AD DITIONAL EVIDENCE THEREFORE, THE ASSESSING OFFICER HAS CORRE CTLY MADE THE ADDITION U/S.68 OF THE ACT. THEREFORE, THE ADDITION AL EVIDENCE PRODUCED SHOULD NOT BE ADMITTED AND THE ADDITIONAL MADE BY THE A.O. U/S 68 TO THE EXTENT OF RS. 18,63,500/- MAY SU STAINED. THE A.O. HELD THAT THE ASSESSEES CONTENTIONS HAVE NO MERITS. THE ASSESSEES PLEA WAS THAT ASSESSEE IS AN ILLITERATE AND HAVING NO BASIC EDUCATION AND HARDLY MANAGED TO SIGN THE CHEQUE IN ENGLISH. THE ASSESSEE IS HAVING TRADING ACTIVITY OF COLOURS AND WORKING AS STOCKIES T OF ASIAN PAINTS AND BERGER PAINTS ETC. THE ASSESSEE SUBMITTED THAT HIS CA HAS NOT PROPERLY REPRESENTED HIS CASE AND DID NOT GET PROPER ADVICE FOR EXPLAINI NG THE FACTS. ON MERITS, THE ASSESSEE SUBMITTED THAT SECTION 68 OF THE ACT IS NO T APPLICABLE. IT WAS SUBMITTED THAT IN THE BEGINNING OF 2007, THE CLOSE FRIEND OF THE ASSESSEE MR. ARVIND POKHARANA, WHO WAS UNEDUCATED, UNEMPLOYED BU T VERY HARD WORKING AND EXPERIENCED IN WALL PAINTING APPROACHED THE ASS ESSEE FOR HELP AND THE ASSESSEE EXTENDED THE HELP BY SUPPLYING MATERIAL FO R WHICH PAYMENTS WERE ITA 6389/MUM/2014 7 RECOVERED FROM THIS BANK ACCOUNT WITH ING VYSYA BAN K. THE ASSESSEE ALLOWED MR ARVIND POKHARANA TO USE HIS BANK ACCOUNT WHEREB Y MR ARVIND POKHARANA DEPOSITED HIS PAINTING CONTRACTUAL RECEIPTS OUT OF WHICH THE ASSESSEE RECOVERED THE PAYMENTS FOR GOODS SUPPLIED AND ALSO MONITORED THIS BANK ACCOUNT. IT WAS ALSO SUBMITTED THAT THE CA HAS NOT MADE PROPER REPRESENTATION BEFORE THE AO NOR THE AO MADE ANY EN QUIRIES BEFORE MAKING ADDITIONS. THE ARRANGEMENT BETWEEN THE ASSESSEE AND MR. ARVIND POKHARANA WAS SUPPORTED BY THE FOLLOWING SUBMISSIONS:- A. PROFIT AND LOSS ACCOUNT. B. BALANCE SHEET. C. DETAILS OF CASH BEING DEPOSITED INTO THE BANK AC COUNT. D. DETAILS OF PURCHASES MADE OF MATERIAL BY MR. ARV IND POKHARANA FROM THE APPELLANT. E. LEDGER ACCOUNT OF MAHAVIR COLOR COMPANY IN THE B OOKS OF MR. ARVIND WHICH CONTAINS THE DETAIL OF GOODS PURCHASED FROM T HE APPELLANT AND THE PAYMENT MADE TO THE APPELLANT PROPRIETARY CONCERN N AMELY MAHAVIR COLOR COMPANY. F. THE DETAILS OF ING VYSYA BANK ACCOUNT (SAVINGS) AND DETAILS OF AMOUNT DEPOSITED IN THE ACCOUNT. THE LEARNED CIT(A) OBSERVED THAT IT WAS SUBMITTED T HAT THOUGH THE BANK ACCOUNT WAS IN THE NAME OF ASSESSEE BUT THE SAID BA NK ACCOUNT WAS OPERATED BY MR. ARVIND POKHRANA AND THERE WERE NO INTENTION OR NO REASON FOR NOT DISCLOSING THE FACTS OF EXISTENCE OF THE SAID BANK ACCOUNT AS ALSO TO DISCLOSE THE INCOME. THE LD. CIT(A) OBSERVED THAT THERE WER E P&L ACCOUNT AND BALANCE SHEET DETAILS BEING MAINTAINED BY MR. ARVIND POKHAR ANA AND AS PER THE AFFIDAVIT FILED BY MR. ARVIND POKHARANA THAT HE WAS MAINTAINING THE ACCOUNTS OF THE ASSESSEE WITH REGARD TO THE MATERIALS SUPPLI ED TO HIM. THE PURCHASES HAD BEEN MADE THROUGH BANK ACCOUNT AND IF IT IS COR RECT, CANNOT BE TAKEN IN ITA 6389/MUM/2014 8 THE HANDS OF MR. ARVIND POKHARANA BECAUSE MR. ARVIN D POKHARANA HAS FILED NO INDEPENDENT RETURN OF INCOME TO EXPLAIN THAT THE BUSINESS WAS BEING CARRIED OUT INDEPENDENTLY BY HIM. THE BANK ACCOUNT IS IN THE NAME OF ASSESSEE AND HE HAS THE ONUS TO EXPLAIN SOURCE OF C ASH DEPOSITS IN THE BANK . THE ASSESSEE CANNOT BE GIVEN THE BENEFIT OF EXPLANA TION THAT THE SAID CASH DEPOSITS PERTAINED TO THE RUNNING OF THE PAINTING J OB BUSINESS BY MR. ARVIND POKHARANA. THE LD. CIT(A) THUS HELD THAT THE ONUS IS NOWHERE BEING DISCHARGED BY THE ASSESSEE AND THE EXPLANATION OFFE RED BY THE ASSESSEE CANNOT BE TAKEN AS VALID AND ACCORDINGLY THE ADDITI ONS WERE UPHELD BY THE LEARNED CIT(A) VIDE APPELLATE ORDERS DATED 22.08.20 14 . 6. AGGRIEVED BY THE APPELLATE ORDER DATED 22.08.201 4 OF THE LEARNED CIT(A), THE ASSESSEE IS IN SECOND APPEAL BEFORE THE TRIBUNA L. 7. THE LD. COUNSEL FOR THE ASSESSEE CONTENDED THAT THERE WAS A CASH DEPOSIT OF RS. 18,83,500/- IN ING VYSYA BANK, MIRA ROAD BRANCH. THE A.O. MADE THE ADDITION U/S 68 OF THE ACT. THE ASSESSEE IS IN THE BUSINESS OF TRADING IN COLOUR PAINTS. THE PAINTING MATERIALS W ERE PURCHASED BY MR. ARVIND POKHARANA FROM THE ASSESSEE. THE LD. COUNSE L SUBMITTED THAT THE BANK ACCOUNT WAS MAINTAINED BY MR. ARVIND POKHARANA WHEREAS THE ADDITION WAS MADE IN THE HANDS OF THE ASSESSEE. AFFIDAVIT F ROM MR. ARVIND POKHARANA IS DULY SUBMITTED BEFORE THE LD. CIT(A) AND ALSO FI LED BEFORE THE TRIBUNAL, HENCE, THE ONUS WAS DISCHARGED BY THE ASSESSEE. TH E LD. COUNSEL RELIED ON THE DECISION OF THE TRIBUNAL IN THE CASE OF MR. JAY ESH D. SHAH V. DCIT IN ITA NO. 3608/MUM/2001 FOR THE ASSESSMENT YEAR 1992-93 D ATED 8 TH OCTOBER, 2004 AND ALSO THE DECISION OF HONBLE BOMBAY HIGH C OURT IN THE CASE OF CIT V. BHAICHAND H. GANDHI- 1983 53 COMPCAS 400 BOM. 8. THE LD. D.R. SUBMITTED THAT THE POWERS OF CIT(A) ARE CO-TERMINUS WITH THE POWERS OF THE A.O. THE A.O. HAS MADE THE ADDIT ION U/S 68 OF THE ACT. ITA 6389/MUM/2014 9 THE ASSESSEE HAS MADE INVESTMENT IN THE BANK ACCOUN T. HE SUBMITTED THAT THE ASSESSEES EXPLANATION WERE AN AFTERTHOUGHT AND WAS NOT EXPLAINED SATISFACTORILY. THE LD. D.R. ALSO FILED A WRITTEN S UBMISSION BEFORE THE TRIBUNAL. HE HAS ALSO RELIED UPON THE DECISION OF THE TRIBUNA L IN THE CASE OF S.R. RAJENDRA KUMAR V. ITO IN ITA NO. 1092/BANG/2014 DAT ED 30 TH SEPTEMBER, 2015. IT WAS SUBMITTED THAT THE LEARNED CIT(A) HAS NOW CONFIRMED THE ADDITIONS U/S 69 OF THE ACT WHEREBY POWERS OF THE L EARNED CIT(A) ARE CO- TERMINUS WITH POWERS OF THE AO. 9. WE HAVE HEARD THE RIVAL CONTENTIONS AND ALSO PER USED THE MATERIAL PLACED ON RECORD. WE HAVE OBSERVED THAT THE ASSESS EE IS HAVING BANK ACCOUNT IN HIS PERSONAL NAME WITH ING VYSYA BANK,MIRA ROAD BRANCH, THANE WHICH WAS NOT INCORPORATED IN THE BOOKS OF ACCOUNTS OF TH E ASSESSEE AND WAS NOT DISCLOSED TO THE REVENUE IN THE RETURN OF INCOME FI LED BY THE ASSESSEE WITH THE REVENUE, WHERE IN THERE WAS CASH DEPOSIT OF RS.18,8 3,500/- WHILE TOTAL DEPOSITS WERE RS.24,48,166/-. IT WAS STATED BY THE ASSESSEE FOR THE FIRST TIME BEFORE THE LEARNED CIT(A) THAT THE SAID BANK ACCOUN T WITH ING VYSYA BANK IS BEING OPERATED BY MR. ARVIND POKHARANA WHO IS CLOSE RELATIVE AND ASSOCIATE OF THE ASSESSEE , AND WHOM THE ASSESSEE ALLOWED TO OPE RATE THE SAID BANK ACCOUNT WHEREBY BUSINESS OF PAINTING CONTRACT WAS C ARRIED ON BY THE SAID ARVIND POKHARANA WITH THE HELP OF THE ASSESSEE AND WHEREIN MATERIAL WAS SUPPLIED BY THE ASSESSEE ALONG WITH ARRANGING OF LA BOUR FOR THE CONTRACT WORK TO BE EXECUTED BY ARVIND POKHARANA. AN AFFIDAVIT O F MR ARVIND POKHARANA TO THIS EFFECT WAS ALSO FILED BEFORE THE LEARNED CIT(A ) AS WELL BEFORE THE TRIBUNAL. IT IS STATED THAT PAYMENTS FOR THE MATERIALS WERE R ECOVERED BY THE ASSESSEE FROM THIS BANK ACCOUNT AND THE SAID BANK ACCOUNT WA S MONITORED BY THE ASSESSEE. IT IS ALSO THE SAY OF THE ASSESSEE THAT T HE CA OF THE ASSESSEE DID NOT REPRESENTED HIM PROPERLY BEFORE THE AO AND THE ASS ESSEE BEING ILLITERATE , TRUSTED THE CA WHO DID NOT PERFORMED HIS DUTIES PRO PERLY WHILE PREPARING RETURN OF INCOME , AS PER THE SAY OF THE ASSESSEE B EFORE AUTHORITIES BELOW AND ITA 6389/MUM/2014 10 ALSO BEFORE US. THE REVENUE AUTHORITIES REJECTED TH E CONTENTIONS OF THE ASSESSEE AND DURING APPELLATE PROCEEDINGS BEFORE TH E LEARNED CIT(A) , THE ADDITIONAL EVIDENCES WERE REMANDED TO THE A.O. FOR VERIFICATION AND COMMENTS. THE AO REJECTED THE CONTENTIONS AND EVIDE NCES IN REMAND REPORT AS THE WHOLE STORY BROUGHT IN BY THE ASSESSEE WAS H ELD TO BE AFTERTHOUGHT AS WELL THE SAID MR. ARVIND POKHARANA DID NOT FILED RE TURN OF INCOME WITH THE REVENUE FOR THE IMPUGNED ASSESSMENT YEAR. IT IS THE SAY OF THE ASSESSEE THAT NO ENQUIRY HAS BEEN MADE BY THE AO AS WELL ADDITION S WERE WRONGLY MADE U/S 68 OF THE ACT BECAUSE THE BANK STATEMENT/PASS B OOK IS NOT BOOKS OF ACCOUNTS OF THE ASSESSEE AS THE BANK IS NOT MAINTAI NING ITS BOOKS AS AGENT OF THE ASSESSEE RATHER THE RELATION IS OF DEBTOR AND C REDITOR RELYING ON THE DECISIONS OF MUMBAI ITAT IN THE CASE OF JAYESH D SH AH V DCIT IN ITA NO 3608/MUM/2001 DATED 08-10-2004 AS WELL JUDGMENT OF HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT V. BHAICHAND H GANDHI (SUPRA) , WHILE LEARNED DR STATED THAT THE LEARNED CIT(A) WHOSE POWERS ARE CO-TERMINUS WITH THE AO HAS CONFIRMED THE ADDITIONS U/S 69 OF THE ACT AND I N ANY CASE THE ASSESSEE IS NOT ABLE TO EXPLAIN THE SOURCE OF DEPOSIT OF CASH O F RS.18,83,500/- AND HENCE PRIMARY ONUS IS NOT DISCHARGED BY THE ASSESSEE RELY ING ON DECISION OF ITAT, BANGALORE IN THE CASE OF S R RAJENDRA KUMAR V. ITO( SUPRA). IN OUR CONSIDERED VIEW KEEPING IN VIEW FACTUAL MATRIX AS IS EMERGING FROM THE RECORDS, THIS MATTER NEEDS TO BE SET ASIDE TO THE FILE OF A.O. FO R DE-NOVO DETERMINATION OF THE ISSUE ON MERITS AFTER CONSIDERING THE ENTIRE EV IDENCES AND EXPLANATIONS SUBMITTED BY THE ASSESSEE IN SUPPORT OF HIS CONTENT IONS . IT IS THE SAY OF THE LD. COUNSEL THAT THE ASSESSEE HAS SUPPLIED MATERIAL TO MR ARVIND POKHARAN FOR WHICH PAYMENTS HAVE BEEN MADE FROM TIME TO TIME FROM THIS BANK ACCOUNT TO THE ASSESSEE. THE A.O. MAY VERIFY THE C ONTENTIONS OF THE ASSESSEE FROM THE BANK STATEMENT AS WELL BOOKS OF ACCOUNTS O F THE ASSESSEE SUBMITTED BEFORE HIM WHETHER MR ARVIND POKHARANA IS REFLECTED AS THE BUYER OF THE MATERIAL FROM THE ASSESSEE OR NOT, INCLUDING WHETH ER VAT HAS BEEN COLLECTED FROM MR ARVIND POKHARANA BY THE ASSESSEE AND DECLAR ED IN THE VAT RETURNS ITA 6389/MUM/2014 11 FILED BY THE ASSESSEE WITH VAT DEPARTMENT WHEREIN MR ARVIND POKHARANA MUST BE LISTED AS THE BUYER OF PAINTS AND OTHER MAT ERIAL SUPPLIED AND SOLD BY THE ASSESSEE TO THE SAID MR ARVIND POKHARANA. THE PRIMARY ONUS IS ON THE ASSESSEE TO PROVE WITH THE COGENT EVIDENCES AND COR ROBORATORY MATERIAL THAT THE SAID BANK ACCOUNT WITH ING VYSYA BANK HELD IN T HE NAME OF THE ASSESSEE WAS INFACT USED BY THE SAID MR ARVIND POKHARANA WIT H RESPECT TO PAINTING CONTRACT TRANSACTION CARRIED ON BY HIM WITH COGENT EVIDENCES AND TO PROVE THAT MERELY BANK ACCOUNT WAS USED TO FACILITATE TRA NSACTIONS AND THE FRUITS OF SUCH BUSINESS WAS IN-FACT BELONGED TO THE SAID MR A RVIND POKHARANA. THIS COULD ALSO BE BROUGHT ON RECORD BY WAY OF TAX DEDUC TED AT SOURCE BY VARIOUS CLIENTS FOR WHOM MR ARVIND POKHARANA DID PAINTING C ONTRACTS AND PAYMENTS WERE RECEIVED IN THIS BANK ACCOUNTS, ALSO VIEWING O THER MATERIAL PURCHASED BY MR ARVIND POKHARANA IN HIS OWN ACCOUNT IN HIS OWN N AME FROM THE PARTIES WHEREIN THE INVOICES MUST HAVE BEEN RAISED BY SUPPL IERS IN THE NAME OF MR ARVIND POKHARANA , OTHER THAN THE SUPPLIES MADE BY THE ASSESSEE AND OTHER EVIDENCES TO CONCLUSIVELY PROVE THAT THE SAID MR AR VIND POKHARANA WAS RUNNING A SEPARATE PAINTING CONTRACT BUSINESS ON HI S OWN ACCOUNT FOR WHICH PROFIT OR LOSS PERTAINS TO HIM AND NOT TO THE ASSES SEE AND MERELY BANK ACCOUNT OF THE ASSESSEE WITH ING VYSYA BANK WAS USE D TO FACILITATE TRANSACTIONS. THE PRIMARY BURDEN IS HEAVY ON THE AS SESSEE WHICH THE ASSESSEE IS DIRECTED TO DISCHARGE IN SET ASIDE PROC EEDINGS BEFORE THE AO. NEEDLESS TO SAY THAT THE A.O. SHALL PROVIDE PROPER AND SUFFICIENT OPPORTUNITY OF BEING HEARD TO THE ASSESSEE IN ACCORDANCE WITH T HE PRINCIPLES OF NATURAL JUSTICE IN ACCORDANCE WITH LAW BEFORE ADJUDICATING THE ISSUE ON MERITS. WE ORDER ACCORDINGLY. 10. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IN ITA N0. 6389/MUM/2014 FOR THE ASSESSMENT YEAR 2008-09 IS AL LOWED FOR STATISTICAL PURPOSES. ITA 6389/MUM/2014 12 ORDER PRONOUNCED IN THE OPEN COURT ON 15 TH JULY , 2016. # $% &' 25-07-2016 ( ) SD/- SD/- (SAKTIJIT DEY) (RAMIT KOCHAR) JUDICIAL MEMBER ACCOUNTANT MEMBER $ MUMBAI ; & DATED 25-07-2016 [ .9../ R.K. R.K. R.K. R.K. , EX. SR. PS !'#$%&%# / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. : ( ) / THE CIT(A)- CONCERNED, MUMBAI 4. : / CIT- CONCERNED, MUMBAI 5. =>( 99?@ , ?@ , $ / DR, ITAT, MUMBAI D BENCH 6. (BC D / GUARD FILE. / BY ORDER, = 9 //TRUE COPY// / ( DY./ASSTT. REGISTRAR) , $ / ITAT, MUMBAI DRAFT DICTATED ON 8-7-2016 SR PS 2 DRAFT PLACED BEFORE AUTHOR ON 13-7-2016 SR PS