MANISH KISHOR PARIKH, MUMBAI V. ITO WD 25(2)(2), MUMBAI

ITA 72/MUM/2014

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 9691 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 8 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-09-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 20-10-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 03-01-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUMAN KUMAR
• Keywords: Unexplained cash credit; Peak credit
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL 'B' BENCH, MUMBAI BEFORE SHRI P K BANSAL, VICE PRESIDENT AND SHRI PAWAN SINGH, JUDICIAL MEMBER ITA NO.72 /MUM/2014 (ASSESSMENT YEAR: 2009-10) SHRI MANISH KUMAR PARIKH VS. INCOME TAX OFFICER - 25(2)(2) 1001 SHREE TOWER, LINK ROAD OPP. SAILEE HOSPITAL ABOVE LINK VIEW HOTEL BORIVALI (W), MUMBAI MUMBAI PAN AAFPP9607D APPELLANT RESPONDENT APPELLANT BY: NONE RESPONDENT BY: SHRI SUMAN KUMAR DATE OF HEARING: 12.09.2017 DATE OF PRONOUNCEMENT: 12.09.2017 O R D E R PER P.K. BANSAL, VICE PRESIDENT THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF THE CIT(A)-35, MUMBAI DATED 24.10.2013 FOR A.Y. 2009-10 . 2. EVEN THOUGH THE ASSESSEE HAS TAKEN AS MANY AS SEVEN GROUNDS OF APPEAL, IN THAT GROUNDS OF APPEAL THERE ARE ONLY TW O ISSUES INVOLVED, ONE RELATING TO SUSTAINING OF THE ADDITION OF ` 10,34.250/- UNDER SECTION 68 OF THE INCOME TAX ACT WHILE THE OTHER ISSUE RELATES TO THE SUSTAINING OF ADDITION OF ` 4,36,557/- AS UNEXPLAINED CASH CREDIT UNDER SECTION 68 OF THE ACT. WE NOTED THAT THIS APPEAL HAS BEEN FIXED SEVER AL TIMES FROM 09.06.215 TILL TODAY. EVERY TIME NOTICE THROUGH REGISTERED AD WAS SENT BUT NONE APPEARED ON BEHALF OF THE ASSESSEE. WE, THEREFORE, DECIDED TO DISPOSE OF THE APPEAL ON MERIT AFTER HEARING THE LEARNED D.R. 3. SO FAR AS ISSUE NO. 1 RELATING TO SUSTAINING OF ADD ITION OF ` 10,34,250/-, AFTER HEARING THE LEARNED D.R. AND GOI NG THROUGH THE ORDERS OF THE TAX AUTHORITIES BELOW WE NOTED THAT THE AO R ECEIVED INFORMATION THAT ITA NO. 72/MUM/2014 SHRI MANISH KUMAR PARIKH 2 THE ASSESSEE HAS DEPOSITED A SUM OF ` 10,34,250/- IN HIS SAVING BANK ACCOUNT WITH THE SARASWAT CO-OPERATIVE BANK LTD. DU RING THE IMPUGNED ASSESSMENT YEAR BUT SINCE THE DID NOT FILE ANY DETA ILS SARASWAT CO- OPERATIVE BANK LTD. WAS NOT PART OF THE REGULAR BOO KS OF ACCOUNT THE AO MADE ADDITION OF ` 10,34,250/- UNDER SECTION 68 OF THE INCOME TAX ACT. THE ASSESSEE WENT BEFORE THE CIT(A). BEFORE THE CIT (A) ASSESSEE SUBMITTED THAT THERE WERE DEPOSITS AS WELL AS WITHDRAWALS FRO M THE SAID ACCOUNT AND IF AT ALL ADDITION HAS TO BE MADE THAT WOULD BE MAD E IN RESPECT OF THE PEAK CREDIT WHICH HE HAS WORKED OUT AT ` 1,60,000/-. THE CIT(A) DID NOT AGREE WITH THE ASSESSEE AND EVEN DID NOT GIVE ANY FINDING ON THE PEAK CREDIT AS HAS BEEN WORKED BY THE ASSESSEE AT ` 1,60,000/- AND UPHELD THE ADDITION AS MADE BY THE AO AT ` 10,34,250/-. 4. THE LEARNED D.R. VEHEMENTLY RELIED ON THE ORDER OF THE TAX AUTHORITIES BELOW. 5. WE NOTED THAT IT IS A CASE WHERE ADDITION HAS BEEN MADE IN RESPECT OF THE AMOUNT DEPOSITED IN THE BANK ACCOUNT. IT IS A FACT THAT THERE WERE WITHDRAWALS AS WELL AS DEPOSITS IN THE SAID BANK AC COUNT. THE AO HAS NOT CONSIDERED THE WITHDRAWALS WHILE MAKING THE ADDITIO N UNDER SECTION 68. IF THE WITHDRAWALS WERE MADE BY THE ASSESSEE PRIOR TO THE DATE OF DEPOSITS THE NATURAL INFERENCE WILL BE THAT THE SOURCE OF DE POSIT WILL BE THE WITHDRAWAL MADE BY THE ASSESSEE. UNDER THESE FACTS WE, IN THE INTEREST OF JUSTICE AND FAIR PLAY TO BOTH THE PARTIES, SET ASID E THE ORDER OF THE CIT(A) AND RESTORE THIS ISSUE TO THE FILE OF THE AO WITH T HE DIRECTION THAT THE AO SHALL REDUCE THE ADDITION TO THE PEAK CREDIT AFTER VERIFYING THE PEAK CREDIT AS WORKED OUT BY THE ASSESSEE. THE ASSESSEE IS DIRE CTED TO WORK OUT THE PEAK CREDIT AND SUBMIT THE SAME BEFORE THE AO. THUS , THIS GROUND IS ALLOWED FOR STATISTICAL PURPOSES. 6. THE SECOND ISSUE RELATES TO THE ADDITION OF ` 4,36,557/-. AFTER HEARING THE LEARNED D.R. AND GOING THROUGH THE ORDERS OF TA X AUTHORITIES BELOW WE NOTED THAT DURING THE COURSE OF ASSESSMENT PROCEEDI NGS THE ASSESSEE HAS SUBMITTED THAT THE SUM OF ` 4,36,557/- IS AN UNSECURED LOAN FROM HIS ITA NO. 72/MUM/2014 SHRI MANISH KUMAR PARIKH 3 FATHER AND THE DETAILS HAS BEEN SHOWN IN HIS FATHER S RETURN OF INCOME AND INCOME STATEMENT. THERE WAS FURTHER SUBMISSION BY T HE ASSESSEE THAT A DEED OF ASSIGNMENT WAS DRAWN BETWEEN THE FATHER AND THE ASSESSEE WHICH WITNESSED THE HANDING OVER THE ENTIRE BUSINESS OF M /S. SHREEJI TRADERS, A PROPRIETARY CONCERN, OF THE ASSESSEES FATHER. THE SAID DEED OF ASSIGNMENT IS DATED 01.04.2008. THE ASSESSEE PAID A CONSIDERAT ION OF ` 25,000/- AND AGREED TO PURCHASE THE ENTIRE BUSINESS OF THE FATHE R AND WHATEVER AMOUNT WAS STANDING CREDITED IN FATHERS NAME THE SAME STA ND SHOWN AS LOAN IN THE BOOKS OF THE BUSINESS OF THE ASSESSEE. ONCE THE RUNNING BUSINESS HAS BEEN TAKEN OVER AND ALL THE ASSETS AND LIABILITIES OF THE RUNNING BUSINESS WILL BECOME THE ASSETS AND LIABILITIES OF THE ASSES SEE. THE ONLY INFERENCE, IN OUR OPINION, IS THAT THE CAPITAL STANDING IN THE NA ME OF THE FATHER IN THE BOOKS OF ACCOUNT OF THE PROPRIETARY CONCERN OF THE FATHER NAMES M/S. SHREEJI TRADERS WILL BECOME THE LIABILITY OF THE AS SESSEE AND WILL GO IN THE BOOKS OF THE ASSESSEE AS A SUM PAYABLE TO HIS FATHE R. IT IS NOT DENIED THAT THIS IS A CASE OF TAKING OVER OF A RUNNING PROPRIET ARY BUSINESS BY THE ASSESSEE FROM HIS FATHER. IN VIEW OF THESE FACTS AN D THE AGREEMENT WHICH HAS BEEN REFERRED TO UNDER PARA 4 OF THE ORDER OF T HE CIT(A), WE ARE OF THE VIEW THAT THE ASSESSEE HAS DISCHARGED ALL THE ONUS AS RELIED ON HIM UNDER SECTION 68 OF THE INCOME TAX ACT, I.E. IDENTITY, CR EDITWORTHINESS AS WELL AS GENUINENESS OF THE TRANSACTION. THEREFORE, WE DELET E THE ADDITION. THUS, THE SECOND ISSUE STANDS ALLOWED. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 12 TH SEPTEMBER, 2017. SD/ - SD/ - (PAWAN SINGH) (P.K. BANSAL) JUDICIAL MEMBER VICE PRESIDENT MUMBAI, DATED: 14 TH SEPTEMBER, 2017 ITA NO. 72/MUM/2014 SHRI MANISH KUMAR PARIKH 4 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) -35, MUMBAI 4. THE CIT - 25, MUMBAI 5. THE DR, B BENCH, ITAT, MUMBAI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI N.P.