IQBAL USMANGANI KHATRI, MUMBAI V. DCIT CEN CIR 2(3), MUMBAI

ITA 725/MUM/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 5821 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 2 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-04-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 06-02-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: B G SAKARIA
• Keywords: Unexplained cash credit; Unexplained investment; Peak credit; Deemed to accrue or arise in india
• Section: 143(3); 69B; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH SMC , MUMBAI BEFORE SHRI C.N. PRASAD, HON'BLE JUDICIAL MEMBER ITA NO. 725 /MUM/201 8 (A.Y: 2009 - 10) SHRI IQBAL USMANGANI KHATRI SHOP NO. 5 & 6 , C WING, SUYOG CHS LTD., PANDIT KULKARNI ROAD, NEAR DON BOSCO SCHOOL, BORIVALI (W), MUMBAI 400 092 PAN: AAQPK 7940 M V. DY. C.I.T. CENTRAL CIRCLE 2 (3) C.G.O. BUILDING, ANNEXE 8 TH FLOOR, M.K. ROAD, MUMBAI - 400 020 (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI B.G. SAKARIA DEPARTMENT BY : MS. KUSUM DATE OF HEARING : 19 .02 .2019 DATE OF PRONOUNCEMENT : 12 .04 .2019 O R D E R PER C. N. PRASAD (JM) 1. THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE ORDER OF THE LD.COMMISSIONER OF INCOME TAX (APPEALS) - 48, MUMBAI [HEREINAFTER IN SHORT LD.CIT(A)] DATED 19.12.2017 FOR THE A.Y. 2009 - 10. 2. ASSESSEE HAS RAISED THE FOLLOWING GROUNDS IN ITS APPEAL: - GROUND NO.1: UNEXPLAINED CASH CREDIT U/S. 68 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. DY. CIT (AO) EARNED IN MAKING ADDITION OF .4,28,000/ - ARBITRARILY BY TREATING PEAK OF CASES CREDIT OF .4,28,000/ - AS DEEMED INCOME OF THE APPELLANT THE LD. CIT (A) WAS NOT JUSTIFIED 2 ITA NO. 725/MUM/2018 (A.Y: 2009 - 10) SHRI IQBAL USMANGANI KHATRI TO UPHELD THE ADDITION MADE BY AO. APPELLANT PRAYS ADDITION OF .4,28,000/ - MAY PLEASE BE DELETED. GROUND NO. 2: UNEXPLAINED CASH CREDIT U/S 69B. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. DY CIT (AO) ERRED IN MAKING ADDITION OF .1 2,97,012/ - ARBITRARILY ON ACCOUNT OF UNEXPLAINED INVESTMENT IN JEWELLERY AND WATCHES U/S 69B OF THE ACT. THE - LD. CIT (A) WAS NOT JUSTIFIED TO UPHELD THE ADDITION MADE BY AO. APPELLANT PRAYS ADDITION OF RS. 1 2,97,012/ - MAY PLEASE BE DELETED. 3. IN SPITE OF SERVICE OF NOTICE BY RPAD, NONE APPEARED ON BEHALF OF THE ASSESSEE NOR ANY ADJOURNMENT WAS MOVED. I DISPOSE OF THIS APPEAL BY HEARING THE LD. DR. 4. LD. DR SUBMITS THAT THE ASSESSMENT WAS REOPENED U/S. 143(3) R.W.S 147 OF THE ACT AND THE RE - ASSESSMENT WAS COMPLETED ON 29.03.2016 DETERMINING THE IN COME OF THE ASSESSEE AT 32,74,99 6/ - AS AGAINST INCOME OF RS. 15,49,984/ - ASSESSED U/S. 143(3) OF THE ACT ON 16.03.2011 . LD. DR SUBMITS THAT ASSESSING OFFICER WHILE COMPLETING THE ASSESSMENT DISALLOWED .4,28,000 U /S. 69A OF THE ACT AND .12,97,012/ - U/S. 69B OF THE ACT. AN ADDITION OF RS. 4, 28,000/ - WAS MADE AS DEEMED INCOME AS SOURCE S OF PEAK CREDITS IN BANK ACCOUNTS COULD NOT EXPLAIN BY THE ASSESSEE . LD. DR SUBMITS THAT THE ASSESSEE HAS NOT GIVEN ANY EXPLANATIO N ON THE INVESTMENT MADE IN GOLD AND DIAMOND JEWELLERY AND WATCHES AND THEREFORE, THE INVESTMENTS SHOWN IN THE BALANCE SHEET TO THE EXTENT OF .12,97,012 / - WAS TREATED AS UNDER STATED INVESTMENT BY THE ASSESSING OFFICER AND ACCORDINGLY BROUGHT TO TAX U/S. 69B OF THE ACT 3 ITA NO. 725/MUM/2018 (A.Y: 2009 - 10) SHRI IQBAL USMANGANI KHATRI 5. LD. DR SUBMIT TED THAT , EVEN BEFORE THE LD. CIT(A) THE ASSESSEE COULD NOT PROVIDE THE EVIDENCES AND EXPLANATION TO PROVE THAT THE INVESTMENTS WERE MADE OUT OF ACCOUNTS MONEY, THEREFORE, HE STRONGLY PLACED RELIANCE ON THE DECISION OF THE LD. C IT(A) AND PRAYED THAT THE ADDITION S BE SUSTAINED. 6. ON HEARING THE LD. DR AND PERUSING THE ORDERS OF THE LOWER AUTHORITIES. I FIND THAT THE ASSESSEE HAS NOT GIVEN PROPER EXPLANATION ON THE INVESTMENTS MADE BY HIM. THE LD. CIT(A) CONSIDERING THE SUBMISSIONS OF THE ASSESSEE SUSTAINED THE ABOVE OBSERVING AS UNDER: - 5.1 GROUND NO.1 : T HIS GROUND IS AGAINST ADDITION OF RS.4,28,0007 - AS DEEMED INCOME AS SOURCES OF PEAK CREDITS IN THE TWO BANK A/C. COULD NOT BE EXPLAINED BY ASSESSEE. IN DEURTSCHE BANK, TOTAL CRE DITS OF RS.47,10,000/ - WERE THERE. AO HAS ALREADY GIVEN BENEFIT OF TELESCOPING TO ASSESSEE AS PER DETAILS MENTIONED IS PARA 4.1 OF THE ORDER (PAGE 5 OF THE AO'S ORDER) AND ONLY PEAK CREDIT OF RS.3,00,000/ -- IS ADDED BACK. SINCE ASSESSEE COULD NOT EXPLAIN S OURCES OF THIS PEAK, THE ADDITION WAS MADE BY AO. EVEN IS APPEAL, NO DETAILS HAVE BEEN SUBMITTED TO EXPLAIN SOURCES OF CREDIT OF PEAK AMOUNT OF RS.3,00,000/ - . SECOND ADDITION OF RS.1,28,000/ -- IS OF THE BANK A/C. OF ICICI BANK, WAS ON THE GROUND THAT ASSES SEE COULD NOT PROVE ITS SOURCES. THUS THERE WAS TOTAL ADDITION OF RS.4,28,000/ - . IN ABSENCE OF ANY EXPLANATION DETAILS FILED BY ASSESSEE REGARDING SOURCES OF THERE 3,00,000/ - AND RS.1,28,000/ - THE ADDITION MADE BY AO IS UPHELD AND APPEAL FILED BY ASSESSEE IS DISMISSED. IN ANY CASE AO HAS BEEN REASONABLE AND HAS ALREADY ALLOWED BENEFIT OF TELESCOPING TO ASSESSEE, THUS NO FURTHER RELIEF IS POSSIBLE ASSESSEE. 5.2 GROUND NO. 2 2 ND GRO UND OF ADDITION OF RS.12,97,012/ - IS ON ACCOUNT OF ON EXPLAINED INVESTMENT IS JEWELLERY AND WATCHES. THE FACTS ARE DISCUSSED IS PARA (PAGE 6 & 7 OF THE AO'S ORD ER). DURING THE YEAR THE AMOUNT OF INVESTMENT IN THE JEWELLERY (INCLUDING WATCHES) AS PER B ALANCE SHEET WAS RS.43,81,500/ - A.Y. 2009 - 10 - RS. 67,63,750 / - A.Y. 2008 - 09 - RS.2 3,82,250 / - DURING THE F.Y. RS.43,81.500/ - AO HAS GIVEN A FINDING THAT DURING ASSESSMENT PROCEEDINGS, COULD SU BMIT BILLS OF ONLY RS.39,87,000/ - . THUS REMAINING INVESTMENT AS PER BOOKS OF RS.3,94,500/ - WAS NOT VERIFIABLE AND NOT SUBSTANTIATED WITH THE PROOF OF SOURCE OF PAYMENTS. HENCE ADDITION OF RS.3,94,500/ - AS UNVERIFIABLE WAS MADE. FURTHER, AS PER THE INFORMATION RECEIVED FROM INV. WING, TOTAL INVESTMENT DURING THE YEAR WAS ACTUALLY RS.52,84,012/ - . ASSESSEE COULD NOT EXPLAIN SOURC ES OF INVESTMENT OF RS.9 ,02,512/ - (RS.52,84,012 - RS.43,81,500/ - ). 4 ITA NO. 725/MUM/2018 (A.Y: 2009 - 10) SHRI IQBAL USMANGANI KHATRI THUS THESE TWO VALUES OF RS.9,02,512+RS.3,94,500 / - TOTALING TO RS. 12,97,012/ - WERE ADDED U/S.69B . IN APPEAL PROCEEDINGS ALSO ASSESSEE COULD NOT SUBMIT ANY DOCUMENTS/BILLS ETC. FOR THE VERIFICATION OF THE SAME. HENC E THE ADDITION MADE BY AO IS UPHELD AND APPEAL OF ASSESSEE IS DISMISSED. 7. NONE OF THESE FINDINGS HAVE BEEN REBUTTED BEFORE ME, HENCE I SUSTAIN THE ORDER OF THE LD.CIT(A) AND REJECT THE GROUNDS RAISED BY THE ASSESSEE. 8. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THE 12 TH APRIL , 2019 SD / - (C.N. PRASAD) JUDICIAL MEMBER MUMBAI / DATED 12 / 0 4 / 201 9 GIRIDHAR , S R. PS COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY// BY ORDER (ASSTT. REGISTRAR) ITAT, MUM