MANOJKUMAR S. GUPTA, MUMBAI V. ITO 26(2)(2), MUMBAI

ITA 654/MUM/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 0037 (ITAT-MUMBAI)
• Duration Of Justice: 7 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-09-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2008-2009
• Appeal Filed On: 30-01-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: V JENARDHANAN
• Assessee Lawyers: PARAS RAKESH
• Keywords: Unexplained cash credit; Principle of natural justice

Judgement Text

- IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI , BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER ./ I.T.A. NO. 654/MUM/2017 ( / ASSESSMENT YEAR: 2008 - 09 ) MANJOJKUMAR S. GUPTA GALA NO. 2, ACHARYA INDUSTRIAL ESTATE, BEHIND TEJPAL INDUSTRIAL ESTATE, ANDHERI KURLA ROAD, SAKINAKA / VS. ITO - 26(2)(2), C - 11, B.K.C. BANDRA (W), MUMBAI ./ ./ PAN/GIR NO. AERPG 7832 H ( / APPELLANT ) : ( / RESPONDENT ) / APPELLANT BY : SHRI PARAS RAKESH / RESPONDENT BY : SHRI V. JENARDHANAN / DATE OF HEARING : 03.07.2017 / DATE OF PRON OUNCEMENT : 07 .09.2017 / O R D E R PER SHAMIM YAHYA , A. M.: T HIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST ORDER OF LEARNED CIT ( A ) - 38 DATED 30.11.2016 AND PERTAINS TO ASSESSMENT YEAR 2008 - 09. 2. T HE GROUNDS OF APPEAL READ AS UNDER : GROUNDS OF APPEAL 1. ON FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LEARNED COMMISSIONER OF INCOME TAX( APPEALS) - 38 , MUMBAI (THE CIT(A)) ERRED IN UPHOLDING THE ADDITION OF RS . 10,51,310 MADE BY THE INCOME TAX OFFICER - 2 ITA NO. 654/MUM/2017 (A.Y. 2008 - 09) MANJOJKUMAR S. GUPTA VS. ITO 26(2}((2),MUMBAI ( THE I.T. O .) ON A CCOUNT OF CASH DEPOSITED IN BANK AS UNEXPLAINED CASH CREDIT. 2. WITHOUT PREJUDICE TO ABOVE , THE AUTHORITIES BLOW ERRED IN NOT APPRECIATING THAT THE APPELLANT HAD DISCHARGED THE ONUS OF PROVING THAT HE WAS HAVING SUFFICIENT CASH AVAILABLE FOR DEPOSIT IN TO BANK ACCOUNT FROM OUT OF HIS OPENING BALANCE OF CASH BUILT OVER PAST MORE THAN 14 YEARS DULY SUPPORTED BY THE ASSESSMENT ORDERS AND CASH SUMMARY AND OVERDRAFT FROM JAN SAHKARI BANK . (I . 3. BRIEF FACTS OF THE CASE ARE THAT DURING THE YEAR UNDER CONSIDE RATION, THE ASSESSEE HAS MADE A TOTAL PAYMENT OF RS.23,00,000/ - TO THE BUILDER, M/S. I. P. CONSTRUCTIONS PVT LTD. WHEN ASKED ABOUT THE SOURCE OF THE SAID PAYMENT, THE ASSESSEE HAS FILED COPY OF BANK STATEMENT AND LOAN CONFIRMATION AMOUNTING TO RS.9,00,000/ - FROM MR. SANTOSH GUPTA. THE ASSESSEE HAS ALSO FILED A COPY OF BANK STATEMENT IN HIS SUPPORT. FURTHER, THE ASSESSEE VIDE L ETTER DATED NIL SUBMITTED THAT WE HAVE ALREADY SUBMITTED DETAILS OF ICICI BANK FROM WHICH CHEQUE OF RS.14,00,000/ - WAS ISSUED, ONE O F THE CHEQUE WAS FROM JANKALYAN SAHAKARI BANK, O.D, A/C. OF RS.5,00,000/ - AND REMAINING OF RS.9,00,000/ - WAS PAID FROM REGULAR ACCOUNT. THE A.O. OBSERVED THAT O N CAREFUL SCRUTINY OF THE COPY OF BANK STATEMENT IN RESPECT OF ICICI BANK, IT IS SEEN THAT THE T OTAL PAYMENT OF RS.14,00,000/ - ON VARIOUS DATES HAVE BEEN MADE TO THE BUILDER, M/S. I. P. CONSTRUCTION PVT LTD. THAT H OWEVER THERE ARE NUMBER OF CASH DEPOSITS ON VARIOUS DATES AMOUNTING TO RS.17,51,300/ - IN THE BANK ACCOUNTS OF THE ASSESSEE. THAT W HEN ASKE D ABOUT THE SOURCE OF THE SAID CASH DEPOSITS, THE A.R. FAILED TO GIVE ANY SATISFACTORY REPLY. THAT FURTHER THE A.R. HEAVILY RELIED ON THE PAYMENT OF RS.5,00,000/ - FROM JA NKALYAN SAHAKARI BANK, O.D. A/C. AND CLAIMED THAT THE SAID 3 ITA NO. 654/MUM/2017 (A.Y. 2008 - 09) MANJOJKUMAR S. GUPTA VS. ITO DEPOSIT IS MEANT FOR CLEARI NG THE PAYMENTS MADE TO THE BUILDER. THAT A LSO AS OBSERVED IN MY ASSESSMENT ORDER FOR THE A.Y. 2009 - 10, IT IS CONCLUDED FACT THAT THE BANK ACCOUNT HELD WITH JANKALYAN SAHAKARI BANK IS UNDISCLOSED. THAT HOWEVER THE STAND OF THE LD. AR CANNOT BE ACCEPTED AS THE ASSESSEE HAD BEEN DEPOSITING CASH OH VARIOUS DATES AND THE SAME WAS MEANT FOR CLEARANCE OF CHEQUES BEING ISSUED TO THE BUILDER AGAI NST THE PROPERTY PURCHASED. HENCE, A.O. CONCLUDED THAT THE TOTAL AMOUNT OF CASH DEPOSITS AMOUNTING TO RS.17,51,310/ - STAN DS UNEXPLAINED AND THE SAME IS ADDED T O THE TOTAL INCOME OF THE ASSES SEE . 4. AGAINST ABOVE ORDER ASSESSEE APPEARED BEFORE THE LEARNED CIT - A. THE LD. CIT(A) GRANTED PART RELIEF, AND UPH E LD THE ADDITION OF RS.10,51,310/ - . THE LD. CIT(A) HELD AS UNDER: 4.2. 1 AS REGARDS THE MERITS OF THE CASE, THE FACT REMAINS THAT DURING THE YEA - UNDER CONSIDERATION, THE ASSESSEE HAD MADE A TOTAL PAYMENT OF RS.23,00,000/ - TO THE BUILDER M/S, I.P. CONSTRUCTIONS PVT. LTD. FOR THE PURPOSE OF HAT AGAINST THE TOTAL CONSIDERATION OF RS.34,68,600/ - . THE FLAT WAS JOINTLY PURCHASED WITH HIS WIFE MRS. VANDANA GUPTA WITH 50% SHARE OF INVESTMENT BORNE BY HIS WIFE. 4.2.2 AS REGARDS THE SOURCE OF PAYMENT OF RS.23,00,000/ - , THE APPELLANT HAS SUBMITTED THAT LOAN OF RS.9,00,000/ - WAS OBTAINED BY HIM FROM MR. 'SANTOSH GUPTA FOR WHICH LOAN CONFIRMATION AND COPY OF BANK STATEMENT WAS FILED BY HIM BEFORE THE AO WHICH HAS NOT BEEN DISPUTED BY THE AO. FURTHER, AS REGARDS THE BALANCE OF RS.14,00,000/ - , THE APPELLANT CONTENDED THE SAME WAS ISSUED FROM ICIC1 BANK THROUGH CHEQUES. 4.2.3 AS REGARDS THE SOURCE OF RS.14,00,000/ - , THE APPELLANT CONTENDED THAT RS.5,00,000/ - WAS FROM THE OVERDRAFT ACCOUNT OF JANKALYAN SAHAKARI BANK AND THE REMAINING RS.9,00,000/ - WAS PAID FROM REGULAR ACCOUNTS. HOWEVER, THE AO OBSERVED THAT A NUMBER OF CASH DEPOSITS AMOUNTING TO RS.17,51,300/ - WERE MADE IN THE BANK ACCOUNT OF THE ASSESSEE FOR WHICH THE APPELLANT WAS NOT ABLE 4 ITA NO. 654/MUM/2017 (A.Y. 2008 - 09) MANJOJKUMAR S. GUPTA VS. ITO 4.2.4 DU RING THE COURSE OF APPELLATE PROCEEDINGS, THE APPELLANT FILED INDIVIDUAL BALANCE SHEET ALONGWITH THE BALANCE SHEET OF THE FIRM FOR THE YEAR UNDER CONSIDERATION IN ORDER TO ESTABLISH THE CASH ACCUMULATION FROM THE PAST YEARS AND ALSO FROM INTERBANK OVERLAPP ING TRANSACTIONS OF WITHDRAWAL FROM ONE ACCOUNT TO ANOTHER ACCOUNT INTER SE . 4.2.5 AFTER CAREFUL PERUSAL OF THE DETAILS FILED BY THE APPELLANT, IT IS OBSERVED' THAT THE MAIN THRUST OF THE APPELLANT HAS BEEN THAT THE CASH HAS BEEN ACCUMULATED AND HAS BEEN CARRY FORWARD OVER A PERIOD OF YEARS SO AS TO JUSTIFY THE PAYMENT MADE BY HIM TO M/S. I.S. BUILDERS FOR THE PURCHASE OF THE AFORESAID FLAT. 4 .2.6 IT IS OBSERVED (HAT APPELLANT IS AN EXISTING ASSESSEE AND HAS BEEN FILING HIS RETURNS OF INCOME LAX FOR THE PAST SEVERAL YEARS. HOWEVER, ON PERUSAL OF INDIVIDUAL BALANCE SHEET AND CASH BOOK FILED BY THE APPELLANT, IT IS ALSO OBSERVED THAT THERE IS OPENING CASH BALANCE OF RS. 12,72,745/ - FOR WHICH THE APPELLANT HAS CONTENDED IT TO BE THE RESULT OF ACCUMULATION AN D CARRY FORWARD OF CASH OVER A PERIOD OF YEARS. HE HAS FURTHER CONTENDED THAT HIS RETURN OF INCOME HAS BEEN DULY ACCEPTED FOR ALL THE YEARS. 4.2.7 IN THIS REGARD, IT IS OBSERVED THAT THOUGH THE APPELLANT IS AN EXISTING ASSESSEE OVER A PERIOD OF YEARS BUT THE APPELLANT HAS NOT BEEN ABLE TO JUSTIFY HIS CLAIM THAT THIS RETURN OF INCOME HAS BEEN DULY ACCEPTED FOR ALL THE YEARS SINCE HIS RETURNS HAVE NOT BEEN SUBJECTED TO SCRUTINY ASSESSMENT. THE APPELLANT, HAS NOT BEEN ABLE TO PROVIDE ANY ORDER OF SCRUTINY ASS ESSMENT FOR ANY OF THE YEARS. THEREFORE, THE CLAIM OF THE ASSESSEE IS NOT ACCEPTABLE AS THE CASH BALANCES OVER THE YEARS HAVE NEVER BEEN SUBJECTED TO SCRUTINY. 4.2.8 ON PERUSAL OF THE INDIVIDUAL BALANCE SHEET ALONGWITH CASH BOOK, IT IS OBSERVED THAT THE APPELLANT HAS INTRODUCED HUGE CASH FROM THE A.Y. 1995 - 96 VIZ. RS,3,00,000/ - RECEIVED ON DEATH OF FATHER, AND RS.12,10,000/ - AS RECEIVED FROM SAVINGS ACCOUNT, THEN IN 1996 - 97 AN AMOUNT OF RS.11,32,314/ - RECEIVED ON DEATH OF MOTHER FOR WHICH THE APPELLANT HA S NOT BEEN ABLE TO FURNISH ANY COGENT EVIDENCES TO PROVE HIS CLAIM. SINCE THESE RECEIPTS ARE VERY OLD AND IN ABSENCE OF ANY COGENT EVIDENCES THEY ARE NOT SUBJECT TO VERIFICATION & HENCE THEIR AUTHENTICITY IS DOUBTFUL. 4.2.9 AFTER PERUSAL OF THE SUBMISSIO NS OF THE APPELLANT, IT APPEARS THAT THE ENTIRE EXERCISE HAS BEEN DONE SO AS TO JUSTIFY THE CASH DEPOSITS WHICH HAVE ULTIMATELY BEEN CLAIMED TO HAVE BEEN PAID FOR THE PURCHASE OF THE PROPERTY. HOWEVER, 5 ITA NO. 654/MUM/2017 (A.Y. 2008 - 09) MANJOJKUMAR S. GUPTA VS. ITO SINCE THE APPELLANT HAS BEEN A REGULAR INCOME TAX PAYE R AND HAS DECLARED AN INCOME OF MORE THAN RS.28 LAKHS OVER THE YEARS AND THE FACT THAT THERE HAS BEEN INTER - BANK TRANSFER WHICH HAVE NOT BEEN FOUND CONTRARY BY THE AO AND ALSO IN VIEW OF THE FACT THAT THE HON'BLE ITAT AS PER PARA 10 OF THE ORDER HAS HELD T HAT THE ASSESSEE HAS SPECIFICALLY EXPLAINED THAT HIS SHARE IN THE PROPERTY WAS 50% AND HAS ALSO EXPLAINED THE SOURCES FOR MAKING INVESTMENT. THEREFORE IN THE INTEREST OF NATURAL JUSTICE LEVERAGE TO THE EXTENT OF RS.2,00,000/ - CAN BE GIVEN BY ASSUMING IT TO BE THE OPENING BALANCE IN THE HANDS OF THE ASSESSEE ACCUMULATED OVER THE YEARS AND ALSO ON A/C OF INTER - BANK TRANSFER WHICH HAVE NOT BEEN CONTRADICTED BY THE AO. FURTHER THE FACT ALSO REMAINS THAT THE APPELLANT HAS FILED HIS INDIVIDUAL BALANCE SHEET EXPLA INING THE CAPITAL IN HIS HANDS. 4.2.10 FURTHER AS REGARDS NON ACCEPTING OF THE OVERDRAFT OF RS.5,00,000/ - FROM JANKALYAN SAHAKARI BANK BY THE AO ON ACCOUNT OF NOT HAVING DISCLOSED THE BANK ACCOUNT IN THE RETURN OF INCOME, IT IS OBSERVED FROM THE BALANCE S HEET OF THE APPELLANT FIRM FOR THE A.Y. 2007 - 08, THAT THE APPELLANT HAS DECLARED LOAN OF RS.2,72,834/ - FROM THE SAID BANK ACCOUNT. MOREOVER, THE SUM OF RS.5 LAKHS WAS TRANSFERRED TO ICICI BANK FROM WHERE CHEQUE PAYMENT WAS MADE TO THE BUILDER AND THEREFORE IT CANNOT BE CONSIDERED TO BE A CASH DEPOSIT. IN VIEW OF THE ABOVE FACTS, THE CLAIM OF THE APPELLANT IS ALLOWED. THE APPELLANT GETS' RELIEF OF RS.5,00,000/ - ON THIS ACCOUNT. 4.2.11 IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES OF THE CASE, THE APPELLANT GETS A RELIEF OF RS.7 LAKHS BEING RS.2,00,000/ - ON ACCOUNT OF OPENING CASH BALANCE & INTER - BANK TRANSFERS AND RS.5,00,000/ - ON ACCOUNT OF OVERDRAFT FROM JANKALYAN SAHAKARI BANK. THE BALANCE AMOUNT OF RS.10,51,310/ - IS TREATED AS' UNEXPLAINED BANK DEPOSITS AND IS SUSTAINED ACCORDINGLY. 5. AGAINST ABOVE ORDER THE ASSESSEE IS IN APPEAL BEFORE THE ITAT. 6. I HAVE HEARD BOTH THE COUNSEL AND PERUSED THE RECORDS. I FIND THAT ASSESSEE'S PLEA FOR THE SOURCE OF CASH HAS BEEN PROPERLY APPRECIATED BY THE LEARNED CIT - A AND THE NECESSARY RELIEF HAS ALREADY BEEN GRANTED BY THE LEARNED CIT - A. THE DISALLOWANCE IS ONLY WITH RESPECT TO THE BALANCES CLAIMED BY THE ASSESSEE TO BE OPENING CASH BALANCE. THIS CLAIM IS NOT BACKED BY COGENT EVIDENCES. THE AMOUNT INVOLVED WAS NOT V ERY 6 ITA NO. 654/MUM/2017 (A.Y. 2008 - 09) MANJOJKUMAR S. GUPTA VS. ITO SMALL AND HENCE THERE IS NEED OF PROPER EVIDENCE IN SUPPORT OF THE CLAIM OF OPENING CASH BALANCE OF THIS MAGNITUDE. ACCORDINGLY , IN MY CONSIDERED OPINION LEARNED CIT - A HAS PASSED A REASONABLE ORDER AFTER APPRECIATING PROPERLY THE FACTS OF THE CASE AND SUBMISSIONS OF THE ASSESSEE. HENCE , THE ORDER OF LEARNED CIT - A DOES NOT NEED ANY INTERFERENCE. ACCORDINGLY , I UPHOLD THE SAME. 7. IN THE RESULT , THIS APPEAL FILED BY THE ASSESSEE STANDS DISMISSED ORDER PRON OUNCED IN THE OPEN COURT ON 07/09/2017 SD/ - (S HAMIM YAHYA ) / A CCOUNTANT MEMBER MUMBAI ; DATED : 07/09/2017 . . ./ ROSHANI , SR. PS / 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 F ILE / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI