ABDUL RAHMAN H SAYYED, THANE V. ITO WD 1(3), MUMBAI

ITA 7009/MUM/2012

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 3783 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 3 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-02-2016
• Appeal Filed By: Assessee
• Bench Allotted: A
• Next Hearing Date: 10-06-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 22-11-2012
• Court: TRIBUNAL
• Department Lawyers: VINITA MENON
• Keywords: Unexplained cash credit; Business income
• Section: 68

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A , BENCH MUMBAI BEFORE SHRI R.C.SHARMA, AM & SHRI PAWAN SINGH , JM ./ ITA NO. 7009 / MUM/20 1 2 ( / ASSESSMENT YEAR : 2008 - 09 ) ABDUL RAHMAN H SAYYED, 215, 2 ND FLOOR, B - WING, FIRDAUS APTS. OPP. RAILWAY STATION, MUMBRA, DISTRICT - THANE - 400612 VS. ITO WD 1(3), THANE (W) - 400602 ./ ./ PAN/GIR NO. : A MIPS 1152 M ( / APPELLANT ) .. ( / RESPONDENT ) /ASSESSEE BY : SHRI RAJESH S. SHAH /REVENUE BY : MS. VINITA MENON / DATE OF HEARING : 22 / 1 2 /2015 / DATE OF PRONOUNCEMENT 24/02/2016 / O R D E R PER R.C.SHARMA (A.M) : TH I S IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A) - MUMBAI, DATED 14 - 9 - 2012 , FOR THE ASSESSMENT YEAR 2008 - 09 , IN THE MATTER OF ORDER PASSED U /S.143(3) OF THE I.T.ACT. 2 . RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORD PERUSED. FACTS IN BRIEF ARE THAT THE ASSESSEE HAS FILED HIS RETURN OF INCOME DECLARING TOTAL INCOME OF RS. 1,24,660/ - . THE ASSESSEE CARRIED ON THE BUSINESS OF BOOKING AIR TICKETS AND COMMISSION AGENT AND DURING THE YEAR UNDER CONSIDERATION, HE HAD DISCLOSED RECEIPTS FROM THE BUSINESS AT RS.2.59 LAKHS AND AFTER CLAIMING THE EXPENSES THE NET INCOME WAS OFFERED AT RS.1.14 LAKHS. BALANCE AMOUNT OF INCOME HAS BEEN DISCLOSED FROM HOUSE PROPERTY, CAPITAL GAINS AND OTHER SOURCES. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO EXAMINED VAR IOUS DETAILS AND HE ITA NO. 7009/2012 2 NOTICED THAT THE ASSESSEE HAD FILED BALANCE SHEET AS ON 31 ST MARCH, 2008 ALONG WITH RETURN OF INCOME SHOWING CAPITAL AT RS. 6,32,712/ - . HOWEVER, ANOTHER BALANCE SHEET FILED DURING THE COURSE OF ASSESSMENT PROCEEDINGS SHOWED CAPITAL AT RS .6,43,212/ - , BANK LOANS AT RS.1,11,727/ - , UNSECURED LOANS AT RS.3,38,000/ - AND OTHER LOANS RS.4,93,000/ - . IN THIS BALANCE SHEET, THE ASSESSEE HAS ADDED FEW MORE ASSETS PARTICULARLY THE FLAT BOOKING FOR RS.10.28 LAKHS. BOTH THE BALANCE SHEETS HAVE BEEN REPR ODUCED BY THE AO AT PAGE 2 OF THE ASSESSMENT ORDER. THE AO HAS ALSO EXAMINED THE BANK ACCOUNT OF THE ASSESSEE WITH ICICI BANK WHEREIN CASH AMOUNTS OF RS.11,36,170/ - WERE DEPOSITED. IN VIEW OF THESE FACTS, THE AO REQUIRED THE ASSESSEE TO EXPLAIN THE SOURCE OF UNSECURED LOANS AND ALSO THE DEPOSITS IN BANK ACCOUNTS. IN REPLY, THE ASSESSEE HAS FILED HIS SUBMISSION DT.03.12.2010 WHICH HAS BEEN ALSO REPRODUCED BY THE AO AT PAGE 3 OF THE ASSESSMENT ORDER. THE REPLY FILED BY THE ASSESSEE WAS NOT ACCEPTABLE TO THE AO. ACCORDINGLY, THE AO MADE ADDITION OF RS. 3,38,000/ - AND RS.11,36,170/ - AS UNEXPLAINED CASH CREDIT U/S.68 OF THE ACT. DURING THE APPELLATE PROCEEDINGS, THE CIT(A) CALLED A REMAND REPORT. AFTER CONSIDERING THE REMAND REPORT CIT(A) UP HELD THE ADDITION S OF RS.75,000/ - AND RS.5,59,406/ - AFTER OBSERVING AS UNDER : - 4. I HAVE CAREFULLY CONSIDERED THE FACTS ON RECORD, SUBMISSION OF THE APPELLANT AND REMAND REPORT OF THE A. O . I FIND THAT OUT OF THE ADDITION OF RS.3,38,000/ - , THE A. O HIMSELF HAS ACCEPTED THE GEN UINENESS OF THE DEPOSITS EXCEPT FOR DEPOSIT OF RS. 75,000/ - FROM TWO PERSONS AS MENTIONED IN HIS REPORT DT. 28/08/2012. THE ASSESSEE COULD NOT ALSO FURNISH' ANY DOCUMENTARY EVIDENCE TO PROVE THE GENUINENESS OF TRANSACTION AND CREDITWORTHINESS OF THE DEPOSI TORS EITHER AT THE ASSESSMENT STAGE OR AT APPELLATE STAGE. THUS, I AM OF THE CONSIDERED VIEW THAT DEPOSITS TO THE EXTENT OF RS. 75,000/ - (RS. 40,000/ - IN THE NAME OF SHRI. BHAGURAM MUWAL AND RS. 35,000/ - IN THE NAME OF SHRI. MOHD. RAFIQ ) REMAINED UNEXPLAINE D AND HENCE PROVISIONS OF SECTION 68 ARE APPLICABLE. ACCORDINGLY, THE ADDITION TO THE EXTENT OF RS. 75,000/ - IS SUSTAINED ON THIS ACCOUNT AND APPELLANT PARTLY SUCCEEDS ON GROUND NO.1. AGAINST THE ABOVE ADDITION, ASSESSEE IS IN FURTHER APPEAL BEFORE US. ITA NO. 7009/2012 3 3. WE HAVE CONSIDERED RIVAL CONTENTIONS AND FOUND THAT OUT OF TOTAL ADDITION OF RS. 3,38,000/ - , DURING REMAND PROCEEDINGS, ASSESSEE COULD NOT EXPLAIN RS.75,000/ - RECEIVED FROM SHRI BHAGURAM MUWAL, RS.40,000/ - AND FROM MOHD. RAFIQ RS.35,000/ - . ACCORDINGLY, CIT(A) CONFIRMED TO THE EXTENT OF RS.75,000/ - . NOTHING WAS BROUGHT ON RECORD BY LD. AR TO PERSUADE US TO DEVIATE FROM THE FINDINGS RECORDED IN THE ASSESSMENT ORDER AS WELL AS CIT(A)S ORDER. ACCORDINGLY, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF CIT(A ) FOR CONFIRMING THE ADDITION TO THE EXTENT OF R S.75,000/ - . 4. WITH REGARD TO THE ADDITION OF RS. 11,36,170/ - IN RESPECT OF AMOUNT DEPOSITED IN THE BANK ACCOUNT, THE CIT(A) HAS CALLED FOR A REMAND REPORT, WHICH HE HAS REPRODUCED AT PAGE 6 & 7 OF HIS APPELLA TE ORDER. AFTER CONSIDERING THE REMAND REPORT THE CIT(A) HAS UPHELD THE ADDITION OF RS. 5, 59,406/ - AFTER HAVING THE FOLLOWING OBSERVATIONS : - 4.1 IN RESPECT OF THE CASH DEPOSITS IN THE BANK ACCOUNT, I FIND THAT THE APPELLANT BEFORE THE A. O AS WELL AS DURIN G APPELLATE PROCEEDINGS HAS VEHEMENTLY ARGUED THAT DEPOSITS IN THE BANK ACCOUNT ARE OUT OF CASH RECEIPT FROM HIS CLIENTS FOR VARIOUS SERVICES PROVIDED BY HIM IN RESPECT OF THE AIR TICKETS AND RELATED TO VISA. IT HAS BEEN ALSO ARGUED THAT HEAVY WITHDRAWALS HAVE BEEN MADE FROM THE BANK ACCOUNTS FOR INCURRING THE EXPENDITURE IN RESPECT OF THE SERVICES PROVIDED BY THE APPELLANT AND HENCE BOTH DEPOSITS AS WELL AS WITHDRAWALS SHOULD BE CONSIDERED. IN THIS REGARD, THE SUMMARY OF BANK STATEMENTS REVEAL THAT THERE W ERE CASH DEPOSITS OF RS.11,53,252/ - IN BANK ACCOUNT WITH ICICI BANK BESIDES DEPOSITS OF VISA STAMPING FEES A T RS. 30,000/ - . THUS, TOTAL RECEIPTS ON THE BASIS OF DEPOSITS IN THIS BANK ACCOUNT WORKED OUT TO RS. 11,83,252/ - . THE WITHDRAWALS FROM THIS BANK ACCO UNTS IN CASH HAVE BEEN MADE AT RS.6,48,4 8 9/ - LEAVING THE BALANCE OF RS. 5,34,763/ - AS NET RECEIPTS FROM THE APPELLANT'S BUSINESS. SIMILARLY, IN THE BANK ACCOUNT WITH D C B BANK, CASH DEPOSITS TO THE TUNE OF RS. 1,46,187/ - ARE ON ACCOUNT OF FEES, INTEREST, LIC REFUND, ETC. ON PERUSAL OF THE DETAILS, IT IS NOTICED THAT LI C REFUND WAS RS. 7,500/ - AND INTEREST WAS ONLY RS. 44/ - . THUS, AFTER EXCLUDING THE LIC REFUND AND INTEREST TOTAL L ING TO RS.7,544/ - FROM RS.1,46,187/ - , THE RECEIPTS FROM THE BUSINESS WORKED OUT T O RS.1,38,643/ - . THUS, AS PER THE APPELLANT'S OWN ARGUMENT AND SUBMISSION, THE NET RECEIPT FROM THE BUSINESS AFTER EXCLUDING THE WITHDRAWALS FOR EXPENSES WORKED OUT TO RS. 6,73,406/ - (RS. 5,34,763 + RS. 1,38,643). HOWEVER, IN THE BOOKS OF ACCOUNT AND RETUR N OF INCOME, THE APPELLANT HAS DISCLOSED GROSS RECEIPTS FROM AIR TICKETS AND COMMISSION AGENCY AT RS. 2.59 LACS ONLY AND AFTER CLAIMING VARIOUS EXPENSES AT RS. '1.14 LAKHS. THUS, IT IS CRYSTAL CLEAR THAT THE APPELLANT HAS SUPPRESSED HIS NET RECEIPTS FROM T HE BUSINESS AND ACCORDINGLY, THE SOURCE OF CASH DEPOSITS IN BANK ACCOUNTS RE MAINED ITA NO. 7009/2012 4 UNEXPLAINED . THUS, IT IS CRYSTAL CLEAR THAT AFTER CONSIDERING ALL DEPOSITS IN BANK ACCOUNTS OUT OF RECEIPTS AND WITHDRAWALS FOR EXPENSES, THE NET INCOME FROM THE BUSINESS OF THE ASSESSEE WORKED OUT TO RS.6,73,406/ - AS AGAINST DISCLOSED BY THE ASSESSEE AT RS. 1.14 LAKHS ONLY. HENCE THE SOURCE OF CASH DEPOSITS IN THE BANK ACCOUNT TO THE EXTENT OF RS. 5,59,406/ - (RS.6,73,406 - RS. 1,14,000) REMAINED TOTALLY UNEXPLAINED AND ALTER NATIVELY THE APPELLANT HAS SUPPRESSED THE NET INCOME FROM THE BUSINESS TO THIS EXTENT. ANOTHER IMPORTANT ASPECT WHICH NEEDS TO BE CONSIDERED IS THAT THE APPELLANT HAS MADE PAYMENT FOR FLAT FROM THE SAME RECEIPTS AT RS. 3,49,000/ - WHICH ARE NOT D I SCLOSED. I N VIEW OF THE TOTALITY OF THE FACTS AND CIRCUMSTANCES AND ALSO THE DISCUSS.ION MADE ABOVE, I THUS CONFIRM THE ADDITION TO THE EXTENT OF RS. 5,59,406/- AS UNEXPLAINED MONEY AVAILABLE WITH THE ASSES SEE U/S. 69A OF THE ACT OUT OF UNDISCLOSED BUSINESS INCOME I NSTEAD OF ADDITI ON MADE U/S. 68. THE APPELLANT ACCORDINGLY, GETS PARTIAL RELIEF IN RESPECT OF GROUND NO.2. 5. IT WAS CONTENDED BY LD. AR THAT ENTIRE DEPOSIT IN THE BANK ACCOUNT WAS EXPLAINED BY THE ASSESSEE DURING REMAND PROCEEDINGS. OUR ATTENTION WAS IN VITED TO THE REMAND REPORT WHICH READS AS UNDER : - '5. AS REGARDS THE ADDITIONS OF RS.11,36,170/ - , THE ASSESSEE HAS SUBMITTED THAT THE DEPOSITS MADE IN THE BANK ACCOUNT ARE RECEIPTS IN THE NORMAL COURSE OF BUSINESS OF THE ASSESSEE, HENCE THESE DO NOT AMOUN T TO UNEXPLAINED CASH CREDIT U/S. 68. THE ASSESSEE WHILE SUBMITTING THE DETAILS OF CASH DEPOS I TS IN THE BANK ACCOUNT TIES GIVEN LIST OF CLIENTS FROM WHOM HE HAS ACCEPTED THE CASH. TAKING INTO ACCOUNT THE NATURE OF BUSINESS OF THE ASSESSEE, DETAILS OF CLIEN TS AND RECEIPTS FROM CLIENTS WAS CALLED FOR. IT HAS BEEN VERIFIED THAT THE RECEIPTS ARE FROM VARIOUS CLIENTS OF THE ASSESSEE WHO HAVE PAID HIM IN ORDER TO OBTAIN VISA RELATED SERVICES. 6. THE ASSESSEE HAS FILED SUBMISSION DT. 24TH JULY, 2012 FURNISHING D ETAILS OF CASH DEPOSITS AND PAYMENT. (COPY IS ATTACHED HEREWITH SCH 1) CASH WITHDRAWN FROM BANK IS VERIFIED WITH THE BANK ACCOUNT OF THE ASSESSEE. HOWEVER, SINCE THESE RECORDS WERE NOT PRODUCED BY THE ASSESSEE DURING ASSESSMENT PROCEEDINGS. THE SAME MAY PL EASE BE LOOKED FROM DIFFERENT PERSPECTIVE NOW. 7. AS REGARDS THE ADDITIONS OF RS.3,38,000/ - THE ASSESSEE HAS SUBMITTED THAT THE SAID ADDITIONS ARE DEPOSITS MADE IN THE DEVELOPMENT CREDIT BANK DURING THE F. Y. 2007 - 08. THE ASSESSEE HAS FURNISHED DETAILS OF THE DEPOSITS MADE IN DEVELOPMENT CREDIT BANK A/C (COPY OF THE SAME IS ATTACHED HEREWITH SCH.2). ON VERIFICATION OF THE RECORDS AND BOOKS OF ACCOUNT PRODUCED BY THE ASSESSEE IT CAN BE REASONABLY STATED THAT DEPOSITS AMOUNTING TO RS. 5,26,987/ - (OUT OF ABOV E RS. 5,86,987/ - ) ARE IN AGREEMENT WITH THE EXPLANATIONS PROVIDED BY THE ASSESSEE. 8. HOWEVER, AS REGARDS THE DEPOSITS OF RS.40,000/ - FROM MR. BHAGURAM MUWAL AND RS.35,000/ - FROM MOHD RAFIQ RECEIVED AS UNSECURED LOAN, NO SATISFACTORY EXPLANATION HAVE BEE N PRODUCED BEFORE THE UNDERSIGNED. 9. CONSIDERING THE ABOVE FACTS AND OBSERVATIONS NOTED ABOVE THE CLAIM OF THE ASSESSEE MAY BE ACCEPTED ON MERITS. ' ITA NO. 7009/2012 5 6. WE HAVE GONE THROUGH THE REMAND REPORT AND IT IS CLEAR THAT OUT OF ADDITION OF RS.3,38,000/ - , THE C IT(A) HAS UPHELD ADDITION OF RS.75,000/ - WHICH WE HAVE ALREADY CONFIRMED. 7. WITH REGARD TO ADDITION OF RS. 11,36,170/ - , WE FOUND THAT NO FINDING HAS BEEN GIVEN BY THE AO IN HIS REMAND REPORT, SO AS TO JUSTIFY DEPOSIT IN THE BANK ACCOUNT OUT OF BUSINESS R ECEIPTS, WHEREAS CIT(A) HAS PRECISELY CALCULATED THE AMOUNT DEPOSITED IN THE BANK ACCOUNT OUT OF THE BUSINESS RECEIPTS, WHEREIN HE FOUND THAT BUSINESS RECEIPTS DISCLOSED BY THE ASSESSEE DO NOT CORRESPOND TO THE AMOUNT DEPOSITED IN THE BANK ACCOUNT. THE CIT (A) FOUND THAT IN VIEW OF THE NET BUSINESS RECEIPTS OFFERED AT RS.1,14,000/ - , THERE WAS A DEPOSIT OF RS. 6,73,406/ - IN THE BANK ACCOUNT. THUS, THERE WAS A SHORTAGE OF RS. 5,59,406/ - , HOWEVER, THE REMAND REPORT DOES NOT SUPPORT THIS FINDING OF CIT(A). IN THE INTERES T OF JUSTICE, WE RESTORE THIS ISSUE BACK TO THE FILE OF AO FOR DECIDING AFRESH AFTER TAKING INTO ACCOUNT NET BUSINESS RECEIPTS DISCLOSED BY THE ASSESSEE VIS - - VIS AMOUNT DEPOSIT ED IN THE BANK ACCOUNT. THE AO IS TO DECIDE THE ISSUE AFRESH AFTER GIVING DUE O PPORTUNITY TO THE ASSESSEE. 8 . IN THE RESULT, APPEAL OF ASSESSEE IS ALLOWED IN PART , IN TERMS INDICATED HEREINABOVE. O RDER PRONOUNCED IN THE OPEN COURT ON THIS 24/02/2016 SD/ - ( PAWAN SINGH ) SD/ - ( R.C.SHARMA ) / JUDICIAL M EMBER / ACCOUNTANT MEMBER MUMBAI ; DATED 24/02/2016 . . /PKM , . / PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A), MUMBAI. 4. / CIT ITA NO. 7009/2012 6 / BY ORDER, / ( ASSTT. REGISTRAR) , / ITAT, MUMBAI 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE. //TRUE COPY//