ITO 20(2)1, MUMBAI V. DINESH P. JANI, MUMBAI

ITA 7210/MUM/2010

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 3368 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 6 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-05-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 30-04-2013
• Assessment Year: 2006-2007
• Appeal Filed On: 20-10-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR RAJENDRA KUMAR
• Assessee Lawyers: R I CHOKSEY
• Keywords: Unexplained cash credit; Additional evidence
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH D, MUMBAI BEFORE SHRI P.M. JAGTAP, ACCOUNTANT MEMBER AND DR. S.T.M. PAVALAN, JUDICIAL MEMBER ITA NO. 7210/MUM/2010 ASSESSMENT YEAR: 2006-07 ITO 20(2)1 701 PIRMAL CHAMBERS, LALBAUG MUMBAI. VS. DINESH P. JANI 4, SHIVAJI COLONY, OFF ANDHERI KURLA ROAD, ANDHERI (E), MUMBAI PAN: ADIPJ 4027 D (APPELLANT) (RESPONDENT) APPELLANT BY : DR. RAJENDRA KUMAR RESPONDENT BY : SHRI R.I. CHOKSEY DATE OF HEARING : 30.04.2013 DATE OF PRONOUNCEMENT : 17.05.2013 O R D E R PER DR. S.T.M. PAVALAN, JM: THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINS T THE ORDER OF THE LD.CIT(A) -31, MUMBAI DATED 05.08.2010 FOR THE ASSE SSMENT YEAR 2006-07. 2. THE SOLITARY ISSUE ARISES OUT OF THE GROUNDS OF APPEAL RELATES TO THE ADDITION OF RS.37,33,636/- AS UNEXPLAINED CASH CREDIT U/S 68 OF THE I.T. ACT MADE BY THE AO AND THE SAME DELETED BY THE LD.CIT(A). 3. BRIEFLY STATED THE ASSESSEE, AN INDIVIDUAL FILED THE RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION DECLARING A TOTAL INCOME O F RS.46,570/-. IN THE ASSESSMENT FRAMED U/S 143(3), THE AO, BASED ON AIR INFORMATION AND THE RESPONSE FROM THE BANK TO THE ENQUIRY LETTER SENT BY THE AO TO STANDA RD CHARTED BANK WITH WHICH THE ASSESSEE MAINTAINED THE ACCOUNT (A/C NO. 0220626309 ) HAD FOUND VARIOUS CREDIT ENTRIES TOTALLY AMOUNTING TO RS.37,33,636/-. THE AO ADDED THE IMPUGNED CREDITS TO THE TOTAL INCOME OF THE ASSESSEE AS UNEXPLAINED CAS H CREDIT U/S 68 OF THE ACT FOR THE REASON THAT THE ASSESSEE HAD FAILED TO FURNISH ANY DETAILS REGARDING THE SOURCE OF SUCH DEPOSITS. I.T.A. NO. 7210/MUM/2010 DINESH P. JANI A.Y. 2006-07 . 2 4. ON APPEAL, THE LD.CIT(A) DELETED THE IMPUGNED AD DITION MADE BY THE AO ON THE REASON THAT THE ENTRIES/DEPOSITS IN THE SAID BA NK ACCOUNT ARE DUE TO THE FACT THAT THE FUNDS WERE TRANSFERRED BY THE BANK AGAINST REDE MPTION OF THE MUTUAL FUNDS UNITS ON VARIOUS DATES WHICH WERE UTILIZED FOR MEETING TH E ASSESSEES REQUIREMENT ON VARIOUS REQUIREMENTS ON DIFFERENT DATES. THE INITIA L DEPOSIT/INVESTMENT OF RS.19,00,000/- MADE BY THE ASSESSEE IN THE STANDARD CHARTED BANK IS EXPLAINED AS THE SAME IS OUT OF THE CHEQUE RECEIVED (FOR 20 LAKH S) BY THE ASSESSEE BY VIRTUE OF THE MOU ENTERED BETWEEN M/S CONCORD CORPORATION LTD AND D.G. BUILDERS AND DEVELOPERS FOR THE DEVELOPMENT AN IMMOVABLE PROPERT Y. AGGRIEVED BY THE IMPUGNED ORDER, THE REVENUE IS IN APPEAL BEFORE US. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. IT IS OBSERVED THAT THE ENTIRE AMOUNT OF RS.37,33,636/- C OMPRISES OF THREE DIFFERENT ENTRIES I.E.(I) INITIAL DEPOSIT OF RS.19 LAKHS WITH STANDARD CHARTED BANK OUT OF 20 LAKHS CHEQUE ISSUED IN FAVOUR OF THE ASSESSEE BY VI RTUE OF THE MOU ENTERED BETWEEN M/S CONCORD CORPORATION LTD AND D.G. BUILDERS AND D EVELOPERS, (II) FUNDS TRANSFERRED BY THE SAID BANK ACCOUNT ON REDEMPTION OF MUTUAL FU ND UNITS WHICH ARE UTILIZED FOR THE CLEARANCE OF INWARD CHEQUE ISSUED BY THE APPELL ANT AND, (III) THE INTEREST/ DIVIDEND ACCRUED EITHER ON ACCOUNT OF THE MUTUAL FU ND OR DEBIT BALANCE IN THE SAID BANK ACCOUNT OF THE APPELLANT. THE ENTIRE ISSUE IS ONLY WITH REGARD TO THE INITIAL CREDIT ENTRY/INVESTMENT OF RS.19,00,000/- WITH STANDARD CH ARTED BANK AS THE SUBSEQUENT CORRESPONDING ENTRIES ARE EITHER PERTAINING TO THE REDEMPTION OF MUTUAL FUND UNITS OR ON ACCOUNT OF MUTUAL FUND OR DEBIT BALANCE IN THE B ANK ACCOUNT OF THE ASSESSEE WHICH ARE RELATED TO THE SAID INVESTMENT. THE PERUS AL OF THE ORDER OF THE LD.CIT(A) REVEALS THAT WHILE HE RELYING ON AN ADDITIONAL EVID ENCES FILED BY THE ASSESSEE DURING THE APPELLATE PROCEEDINGS BEFORE HIM NAMELY THE MOU DATED 05.02.2009 ENTERED BETWEEN M/S CONCORD CORPORATION PVT. LTD (WHERE THE ASSESSEE AND HIS WIFE HAVE SEEN THE DIRECTORS) AND D.G. BUILDERS AND DEVELOPER S TOWARDS THE DEVELOPMENT OF AN IMMOVABLE PROPERTY, BANK STATEMENT OF THE D.G. BUIL DERS AND DEVELOPERS WITH BANK OF INDIA AND THE CONFIRMATION FROM D.G. BUILDERS AN D DEVELOPERS CONFIRMING THE ISSUE OF CHEQUE OF RS.20 LACS DRAWN ON ORIENTAL BAN K OF COMMERCE ARRIVED AT THE CONCLUSION THAT A SUM OF RS. 20 LAKHS HAVE BEEN REC EIVED BY THE ASSESSEE BY VIRTUE I.T.A. NO. 7210/MUM/2010 DINESH P. JANI A.Y. 2006-07 . 3 OF THE MOU ENTERED BETWEEN M/S CONCORD CORPORATION LTD AND D.G. BUILDERS AND DEVELOPERS FOR THE DEVELOPMENT AN IMMOVABLE PROPERT Y AND THUS HAS GIVEN A FINDING THAT AND THE SOURCE OF THE INVESTMENT HAS BEEN EXPL AINED. WHILE RELYING ON THE ADDITIONAL EVIDENCE, THE LD.CIT(A) HAS ALSO CALLED FOR A REMAND REPORT FROM THE AO. IN VIEW OF THE FACT THAT THE INITIAL CREDIT ENTRY O F RS.19,00,000/- AS REGARDS THE INVESTMENT IS CLEARLY EXPLAINED AND THE SUBSEQUENT CORRESPONDING ENTRIES ARE EITHER PERTAINING TO THE REDEMPTION OF MUTUAL FUND UNITS O R ON ACCOUNT OF MUTUAL FUND OR DEBIT BALANCE IN THE BANK ACCOUNT OF THE ASSESSEE W HICH IS RELATED TO THE INITIAL INVESTMENT, WE ARE OF THE OPINION THAT THE LD.CIT(A ) HAS CORRECTLY DELETED THE IMPUGNED ADDITION AS THE ENTIRE SOURCE OF INVESTMEN T IS FULLY EXPLAINED. IN VIEW OF THAT MATTER, WE DO NOT FIND ANY JUSTIFIABLE REASON TO INTERFERE WITH THE ORDER OF THE LD.CIT(A) AND THE SAME IS UPHELD. 6. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED . ORDER PRONOUNCED IN THE OPEN COURT ON THIS 17 TH DAY OF MAY, 2013. SD/- SD/- (P.M. JAGTAP) (DR. S.T.M. PAVALAN) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 17.05.2013. *SRIVASTAVA COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT(A) CONCERNED, MUMBAI THE DR D BENCH //TRUE COPY// BY ORDER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.