CHANDRAKANT N DEDHIA, MUMBAI V. ITO 13(3)(1), MUMBAI

ITA 708/MUM/2013

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 3450 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 1 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-03-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 03-02-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 28-01-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SALMAN KHAN
• Keywords: Business income; Onus to prove
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH C, MUMBAI BEFORE SHRI R.C. SHARMA, ACCOUNTANT MEMBER AND SHRI SANJAY GARG, JUDICIAL MEMBER ITA NO. 708/MUM/2013 : (A.Y : 2009 - 10) CHANDRAKANT N. DEDHIA 171/9, JAI BHARATI BUILDING, NATHALAL PAREKH MARG, WADALA, MUMBAI 400 031. (APPELLANT) PAN : AABPD2996F VS. ITO - 13(3)(1), MUMBAI (RESPONDENT) ASSESSEE BY : SHRI K. GOPAL REVENUE BY : SHRI SALMAN KHAN (DR) DATE OF HEARING : 2 9/02/2016 DATE OF PRONOUNCEMENT : 18 /03/2016 O R D E R PER R.C. SHARMA, AM : THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE ORDER OF THE CIT(A) - 24, MUMBAI FOR A.Y 2009 - 10 IN THE MATTER OF ORDER PASSED U/S 143(3) OF THE INCOME TAX ACT, 1961. 2. FOLLOWING GROUNDS HAVE BEEN TAKEN BY THE ASSESSEE IN HIS APPEAL: 1. THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX(A) - 24, MU M BAI CONFIRMING THE ADDITION OF RS. 27,63,000 / - M ADE BY THE INCOME TAX OFFICER IN COMPUTING THE BUSINESS INCOME OF THE APPELLANT IS CONTRARY TO LAW AND THE FACTS OF THE CASE. 2. ON THE FACTS BRO UGHT ON RECORD THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL) OUGHT TO HAVE HELD THAT THE APPELLANT HAS GIVEN THE 2 CHANDRAKANT N. DEDHIA ITA NO. 708/MUM/2013 DOCUMENTARY PROOF AND THE EXPLANATION FOR SOURCE OF AGGREGATE CASH DEPOSIT OF RS.27,63,000/ - . 3. THE LEARNED COMMISSIONER OF INCOME TAX (A) - 24 ERRED IN HOLDING THAT CONTENTION OF THE APPELLANT THAT THE RECEIPT OF RS. 1 CRORE FROM RRC PROJECTS PVT. LTD. WAS WITHOUT ANY CORROBORATIVE EVIDENCE AND THAT THE APPELLANT DID NOT PRODUCE ANY INFORMATION BEFORE THE AO, WHILE THE SAID RECEIPT PERTAINS TO PREVIOUS ASSESSMENT YEAR. 4. THE LEARNED COMMISSIONER OF INCOME TAX (A) - 24 ERRED IN HOLDING THAT ARGUMENT OF THE APPELLANT THAT SOURCE OF DEPOSIT OF CASH WAS EARLIER WITHDRAWAL FROM THE BANK WAS NOT CORRECT. 5. THE LEARNED COMMISSIONER OF INCOME TAX (A) - 24 ERRED IN UNDERSTANDING THE CASH FLOW STATEMENT GIVEN TO HIM BY STATING THAT TOTAL CASH WITHDRAWN DURING THE PERIOD 01 / 04 / 2008 TO 31 / 03 / 2009 IS RS. 57,50,000 / - WHEREAS TOTAL CASH DEPOSITED IN BANKS IS RS. 32,14,500. APPARENT LY , THE EXCESS CASH DEPOS ITED IN BANK CAN BE PRESUMED FROM THE OPENING CASH IN HAND OF RS.7,15,599/ - SHOWN IN BALANCE SHEET AS ON 31 / 03 / 2008. WHEREAS THE CASH WITHDRAWN IS MORE THAN THE CASH DEPOSIT. 6. THE LEARNED COMMISSIONER OF INCOME TAX (A) - 24 ERRED BY INTERFERING IN THE F REEDOM OF THE APPELLANT TO TAKE DECISION IN THE BUSINESS AFFAIRS AND IN THE INVESTMENT MATTERS BY QUESTIONING THE DAY TO DAY AFFAIRS OF THE APPELLANT. 3. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORDS PERUSED. FACTS IN BRIEF ARE THAT THE ASSESSEE WAS CAR RYING ON BUSINESS OF PROVIDING OFFICE SPACE AND SERVICES. IN THE ASSESSMENT ORDER, THE AO NOTED THAT AS PER ITS DETAILS, THE ASSESSEE DEPOSITED CASH OF RS.10,30,000/ - IN DOMBIVLI NAGARI SAHAKARI BANK AN AMOUNT OF RS.17,33,000/ - IN SARASWAT CO - OP. BANK LTD . DURING F.Y 2008 - 09. TO VERIFY THE SOURCE OF DEPOSIT, THE ASSESSEE WAS ASKED THE NARRATION AND SOURCES OF FUND FOR THE ABOVE DEPOSIT BY THE AO. THE ASSESSEE FILED HIS REPLY BEFORE AO WHICH IS AS UNDER : 3 CHANDRAKANT N. DEDHIA ITA NO. 708/MUM/2013 CASH DEPOSIT OF RS.17,33,000/ - IN SARASWAT SAVING BANK ACCOUNT. THE SOURCE OF THIS CASH DEPOSIT IS OUT OF THE AMOUNT OF RS. 1 CRORE RECEIVED FROM RRC PROJECT PVT. LTD. 101, DHAWALGIRI, OFF AUGUST KRANTI MARG, NANA CHOWK, MUMBAI 400 036. THUS THE ASSESSEE WAS HAVING OPENING CASH ON HAND OF RS.7,15 ,599 AND HE HAD WITHDRAWN CASH OF RS.6,30,000/ - TOTALING TO RS.13,45,599 OUT OF WHICH HE HAS DEPOSITED RS.10,30,000/ - IN DOMBIVLI NAGRI SAHKARI BANK. WE HAVE SUBMITTED COPY OF BANK STATEMENT OF DOMBIVALI NAGRI SAHKARI BANK VIDE LETTER DATED 4/10/2011. 4 . BY THE IMPUGNED ORDER, CIT(A) CONFIRMED THE ACTION OF THE AO AGAINST WHICH THE ASSESSEE IS IN FURTHER APPEAL BEFORE US. 5. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND CAREFULLY GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AS WELL AS THE COPY OF CAS H FLOW STATEMENT ALONGWITH CASH SUMMARY, COPY OF SUMMARY OF BANK WITHDRAWALS AND DEPOSIT IN THE BANK ACCOUNT, COPY OF CONFIRMATION OF ACCOUNTS FROM RRC PROJECT PVT. LTD. FILED BEFORE THE LOWER AUTHORITIES. FROM THE RECORDS , WE FIND THAT ASSESSEE HAS FILED DETAILED CASH FLOW STATEMENT ALONG WITH BANK STATEMENT BEFORE THE LOWER AUTHORITIES EXPLAINING THE SOURCE OF DEPOSITS IN THE BANK ACCOUNT WHICH IS DULY SUPPORTED BY WITHDRAWALS SHOWN IN THE BANK STATEMENT. THE LOWER AUTHORITIES DID NOT ACCEPT THE WITHDRA WALS OF THE CASH FROM BANK ACCOUNT MERELY ON THE PLEA THAT ASSESSEE WAS HAVING SUFFICIENT CASH IN HAND, THEREFORE, ANY FURTHER WITHDRAWAL BY THE ASSESSEE CANNOT BE ACCEPTED. THE AO WAS ALSO OF THE VIEW THAT NO PRUDENT BUSINESSMAN WOULD KEEP HUGE CASH WITH HIM WHEN HE HAS FACILITY OF ATLEAST THREE BANK ACCOUNTS. WE DO NOT FIND ANY JUSTIFICATION FOR THE DECISION OF THE LOWER AUTHORITIES IN NOT ACCEPTING WITHDRAWAL OF CASH WHEN IT IS DULY 4 CHANDRAKANT N. DEDHIA ITA NO. 708/MUM/2013 SUPPORTED BY ENTRIES IN THE BANK STATEMENT INDICATING AVAILABILITY OF SUFFICIENT BANK BALANCE AS ON DATE OF WITHDRAWAL. MERELY BECAUSE ASSESSEE WAS HAVING CASH IN HAND CANNOT BE MADE A REASON FOR NOT ACCEPT ING FURTHER WITHDRAWALS FROM THE BANK ACCOUNT WHEN THE BANK ACCOUNT FROM WHICH WITHDRAWALS IS MADE, WAS HAVING SUFFICIE NT BALANCE. THE ONUS TO PROVE THAT ASSESSEE HAS SPENT HIS CASH OTHERWISE AND NOT HAVING CASH IN HAND ON THE DATE OF DEPOSIT IS ON THE DEPARTMENT AND ASSESSEE CANNOT BE ASKED TO PROVE THE NEGATIVE, I.E. TO SHOW THAT ASSESSEE HAS NOT SPENT ANY MONEY. AS PE R THE CASH FLOW STATEMENT SO FILED, THERE WAS SUF FICIENT CASH IN ASSESSEES HAND AS ON DATE OF DEPOSIT IN THE BANK ACCOUNT . SUCH CASH IN HAND WAS ALSO OUT OF WITHDRAWALS FROM THE BANK ACCOUNT WHICH WAS VERY MUCH BEFORE THE AO. ACCORDINGLY, WE DO NOT FIND ANY MERIT IN THE ACTION OF THE LOWER AUTHORITIES IN MAKING AN ADDITION ON ACCOUNT OF WITHDRAWAL OF CASH FROM THE BANK AND DEPOSIT OF THE SAME IN THE BANK WITHOUT BRINGING ANY SUPPORTING MATERIAL ON RECORD TO SUGGEST THAT CASH SO WITHDRAWN HAS BEEN USED BY ASSESSEE SOMEWHERE ELSE. WE DIRECT THE AO TO DELETE THE ADDITION SO MADE. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 1 8 T H MARCH, 2016. SD/ - SD/ - (SANJAY GARG) JUDICIAL MEMBER (R.C. SHARMA) ACCOUNTANT MEMBER MUMBAI, DATE : 1 8 T H MARCH, 2016 *SSL* 5 CHANDRAKANT N. DEDHIA ITA NO. 708/MUM/2013 COPY TO : 1) THE APPELLANT 2) THE RESPONDENT 3) THE CIT(A) CONCERNED 4) THE CIT CONCERNED 5) THE D.R, C BENCH, MUMBAI 6) GUARD FILE BY ORDER DY./ASSTT. REGISTRAR I.T.A.T, MUMBAI