URAAZ SANTOSH BAHL, MUMBAI V. ITO 12(3)(2), MUMBAI

ITA 7030/MUM/2011

• Counselvise Citation: [2015] 120 COUNSELVISE.COM (IT) 9399 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 4 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-02-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Next Hearing Date: 29-08-2013
• Assessment Year: 2006-2007
• Appeal Filed On: 17-10-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SACHCHIDANAND DUBEY
• Keywords: Capital asset; Gift

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH F, MUMBAI , ,, , !' !' !' !'#$ #$ #$ #$ $$$ $$$ $$$ $$$% %% %!' !' !' !' & & & & BEFORE SHRI R.C. SHARMA, ACCOUNTANT MEMBER AND SHRI VIVEK VARMA, JUDICIAL MEMBER ITA NO. : 7030/MUM/2011 (ASSESSMENT YEAR: 2006-07) SHRI URAAZ SANTOSH BAHL, 808, MAKER CHAMBERS, V, NARIMAN POINT, MUMBAI -400 021 .: PAN: ADXPB 6337 R VS INCOME TAX OFFICER-12(3)(2), ROOM NO. AAYAKAR BHAVAN, 1 ST FLOOR, M K ROAD, MUMBAI -400 020 (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI PRAKASH JOTWANI RESPONDENT BY : SHRI SACHCHIDANAND DUBEY /DATE OF HEARING : 14-01-2015 ! / DATE OF PRONOUNCEMENT : 25-02-2015 ! ! ! ! ORDER $$$ $$$ $$$ $$$ , , , , : :: : PER VIVEK VARMA, JM: INSTANT APPEAL IS FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A) 23, MUMBAI, DATED 14.07.2011, WHEREIN THE SOLITARY ISSUE PERTAINS TO SUSTAINING THE ADDITION OF RS. 8,52,000/- U/S 6 8 OF THE INCOME TAX ACT, 1961. 2. THE FACTS ARE THAT THE ASSESSEE RECEIVED AIR INFORMA TION WITH REGARD TO CASH DEPOSITS MADE WITH HSBC BANK BY TH E ASSESSEE. IN THE COURSE OF ASSESSMENT PROCEEDING THE A SSESSEE SUBMITTED THAT RS. 7,30,000/- WAS THE OPENING BALANCE. THE ASSESSEE ALSO EXPLAINED TO THE AO THAT CERTAIN OLD ITEMS WERE SOLD IN APRIL AND MAY OF 2005 FOR RS. 50,500/- AND RS. 40,2 50/- AND CERTAIN GIFTS RECEIVED FROM RELATIVES AND FRIENDS AT HO USE SHRI URAAZ SANTOSH BAHL ITA 7030/M/2011 2 WARMING FUNCTION AGGREGATING TO RS. 41,250/-. THE ASSESSEE ALSO EXPLAINED THAT RS. 2,00,000/- WAS WITHDRAWAL AND NOT DEPOS IT. THE AO, AGGREGATED THE ABOVE SUMS AND ADDED THE SAM E TO THE INCOME OF THE ASSESSEE U/S 68, WHICH CAME TO RS. 10,52,000/-. 3. THE ASSESSEE APPROACHED THE CIT(A), BEFORE WHOM THE ASSESSEE PLACED CERTAIN EVIDENCE, WHICH WAS NOT SUBMITT ED BEFORE THE AO. THE CIT(A) SENT THE EVIDENCE TO THE AO FOR HIS OBJECTIONS IF ANY AND HIS COMMENTS. THE AO, RESPONDED VIDE LETTER DATED 21.02.2011 THAT THE EVIDENCE CANNOT BE ENT ERTAINED, AS SUFFICIENT OPPORTUNITY WAS PROVIDED TO THE ASSESSEE TO LEAD EVIDENCE. 4. THE CIT(A), THE PROCEEDED ON MERITS AND SUSTAINED TH E ADDITION OF RS. 8,52,000/-, BUT DELETED RS. 2,00,000/-. THE CIT(A) BASICALLY HELD THAT THE ASSESSEE COULD NOT HAVE HE LD CASH IN HAND FOR A LONGER TIME AND HE THEREFORE, HELD THAT RS. 7,50,000/- WAS A MADE UP STORY AS OPENING BALANCE, COMING FROM ASSESSMENT YEAR 2004-05. HE ALSO REJECTED ASSESSE ES EXPLANATIONS WITH REGARD TO SMALLER ADDITIONS OF RS. 40,500/ -; RS. 40,250/-, RS. 41,250/- AND RS. 2,00,000/-. 5. AGAINST THESE ADDITIONS, THE ASSESSEE IS NOW BEFORE THE ITAT. 6. BEFORE US, THE AR SUBMITTED THAT THE CIT(A) DID NOT CONSIDER THE ENTIRE EXPLANATION OF THE ASSESSEE AND SUST AINED THE ORDER OF THE AO. 7. THE AR THEREFORE SUBMITTED THAT IN SUCH A CASE, THE ORDER OF THE CIT(A) SHOULD BE REVERSED. 8. THE DR ON THE OTHER HAND SUPPORTED THE ORDERS OF THE REVENUE AUTHORITIES AND SUBMITTED THAT BOTH THE AUTHOR ITIES SHRI URAAZ SANTOSH BAHL ITA 7030/M/2011 3 HAVE GIVEN WELL REASONED ORDERS & THERE IS NO INFIRMITY IN T HE ORDERS. 9. WE HAVE HEARD THE CONTENTIONS OF BOTH THE PARTIES A ND WE DO FIND MERIT IN THE SUBMISSIONS MADE BY THE ASSESSEE WITH REGARD TO RS. 7,30,000/- THAT IT WAS AN OPENING BALANCE. T HE REASON THAT THE ASSESSEE CANNOT HOLD THIS MUCH AMOUN T IN HAND FOR SUCH A LONG PERIOD OF TIME, IS, BASICALLY A BALD OBSERVAT ION MADE BY THE CIT(A). THE CIT(A) HAS SEEN FROM THE FACTS TH AT THE AMOUNT WAS ACTUALLY PERTAINING TO PRECEDING YEAR IS NOT CONTROVERTED EVEN BY THE DR. IN SUCH A CASE, WE CANNO T SUSTAIN THE ADDITION OF RS. 7,30,000/-. 10. COMING TO THE SMALLER ADDITIONS OF RS. 40,500/- AND RS . 40,250/- WHEREIN THE ASSESSEE SOLD HIS OLD ITEMS OF FURNI TURE. THE CIT(A) WENT THROUGH THE EVIDENCE AS FILED BY THE ASSE SSEE. THE FACT THAT THE ASSESSEE SOLD CERTAIN OLD FURNITURE ITEM S IS MENTIONED IN THE IMPUGNED ORDER. THE MAIN REASON FOR REJE CTING THE ASSESSEE CLAIM IS AN APPREHENSION THAT THE FURNITURE ITEMS MAY BE CAPITAL ASSET. AT THE OUTSET, WE FIND THIS ARGUMENT OF THE CIT(A) TO BE INCOMPREHENSIBLE AS TO HOW AN ITEM OF FURNITU RE COULD BECOME CAPITAL ASSET. WE, THEREFORE ARE INCLINED TO AC CEPT THE ARGUMENT OF THE AR AND REVERSE THE FINDINGS OF THE CIT(A). 11. COMING TO ADDITION OF RS. 41,250/- RECEIVED GIFTS AT HOU SE WARMING CEREMONY. THE ASSESSEE HAS SUBMITTED THE CARD BEFORE THE CIT(A), WHO HAS REJECTED THE EXPLANATION AND EVIDENCE . ON GOING THOUGH THE ORDER OF THE CIT(A), WE FEEL THAT THE CIT (A) HAS HELD THE ISSUE DISPASSIONATELY, BECAUSE DURING CEREMONIES LIKE THIS, SOME KIND OF GIFT, WHICH IS EITHER IN CASH OR KIND IS RECE IVED BY THE PERSON, WHO IS PERFORMING THE CEREMONY. IN SUCH A CASE, WE REVERSE THE ORDER OF THE CIT(A) ON THIS ISSUE. SHRI URAAZ SANTOSH BAHL ITA 7030/M/2011 4 12. COMING TO ADDITION OF RS. 2,00,000/-, WHICH IS EXPLAINED BY THE ASSESSEE/AR THAT IT IS ACTUALLY WITHDRAWAL AND NO T DEPOSIT. THIS ISSUE ONCE AGAIN HAS BEEN DEALT WITH BY THE CIT(A), WHO HAS NEGATED THE EXPLANATION OF THE ASSESSEE, BY SIM PLY SAYING THAT ASSESSEES EXPLANATION CANNOT BE ACCEPTED. 13. THIS ISSUE, ACCORDING TO US, NEEDS FRESH ADJUDICATIO N AT THE LEVEL OF THE AO. WE, THEREFORE, SET ASIDE THE ISSUE OF AD DITION SUSTAINED OF RS. 2,00,000/- BY THE CIT(A) AND RESTORE IT T O THE FILE OF THE AO, WHO SHALL REEXAMINE THIS ISSUE (NOT THE ISSUE O F RS. 2,00,000/- ON WHICH THE CIT(A) HAS GIVEN THE RELIEF), NEEDLESS TO MENTION THAT THE AO SHALL AFFORD REASONABLE AND ADEQUA TE OPPORTUNITY TO THE ASSESSEE TO PRESENT HIS CASE. 14. AS A RESULT, THE ASSESSEE GETS RELIEF FOR RS. 7,30,000/- , RS. 40,500/-, RS. 40,250/- AND RS. 41,250/- & RS. 2,00,000/- ISS UE IS SET ASIDE TO THE FILE OF THE AO. 15. THE APPEAL OF THE ASSESSEE IS THEREFORE TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 25/02/2015. SD/- SD/- ( ) ( $$$ $$$ $$$ $$$ ) % % % % & & & & % % % % (R C SHARMA) ( VIVEK VARMA ) ACCOUNTANT MEMBER J UDICIAL MEMBER MUMBAI, DATE: 25/02/2015 '/ COPY TO:- 1) / THE APPELLANT. 2) / THE RESPONDENT. 3) THE CIT(A) -23, MUMBAI. 4) THE CIT-12, MUMBAI/CIT -12, MUMBAI. SHRI URAAZ SANTOSH BAHL ITA 7030/M/2011 5 5) / THE D.R. F BENCH, MUMBAI. 6) ()* + COPY TO GUARD FILE. ,%- / BY ORDER / / TRUE COPY / / . / / 0 , '1! , 2 3 DY. / ASSTT. REGISTRAR I.T.A.T., MUMBAI *CHAVAN, SR.PS