SHRI. PALIMAR GOPAL SHETTY, MUMBAI V. ITO 26 (2)(4), MUMBAI

ITA 7335/MUM/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 7919 (ITAT-MUMBAI)
• Duration Of Justice: 8 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-08-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 29-11-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AMIT PRATAP SINGH
• Keywords: Salary income; Set aside
• Section: 69B; 147; 68; 6

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES C, MUMBAI BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER & SHRI AMARJIT SINGH, JUDICIAL MEMBER ITA NO.7335/MUM/2019 ASSESSMENT YEAR: 2011-2012 SHRI PALIMAR GOPAL SHETTY, D-204, OM TRIMURTI TOWERS, OM TRIMURTI SOCIETY, SION TROMBAY ROAD, CHUNABHATTI, SION, MUMBAI 400 022. PAN CSKPS7867R VS. ITO WARD 26(2)(4), MUMBAI. (APPELLANT) (RESPONDENT) APPELLANT BY : NONE RESPONDENT BY : SHRI AMIT PRATAP SINGH DATE OF HEARING :17.08.2020 DATE OF PRONOUNCEMENT : 26 .08.2020 O R D E R PER SHAMIM YAHYA, ACCOUNTANT MEMBER: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LEARNED CIT (A) DATED 24.06.2019 AND PERTAINS TO ASSESSMENT YEAR 20 11-12. THE ONLY ISSUE RAISED IS THAT LEARNED CIT (A) ERRED IN SUSTAINING THE ADDITI ON OF RS 9,69,565/- U/S. 69B OF THE ACT. 2. THE BRIEF FACTS OF THE CASE ARE THAT ASSESSEE IS A RETIRED GOVERNMENT EMPLOYEE. THE SOURCE OF INCOME CONSISTS OF SALARY A ND OTHER SOURCES. IN THE ASSESSMENT ORDER THE ASSESSING OFFICER NOTED THAT A SSESSMENT WAS REOPENED FOR THE FOLLOWING REASON: 2 FOR THE ASSESSMENT YEAR 2011-12 UNDER CONSIDERATIO N, DETAILS OF ITS INFORMATION AVAILABLE FROM THE ITD SYSTEMS REFLECTE D THAT THE ASSESSEE HAS MADE TRANSACTION DURING THE YEAR UNDER CONSIDER ATION. THE DETAILS ARE AS UNDER: SR. NO . INFORMATION DESCRIPTION VALUE (RS.) 1 CASH DEPOSITED IN SAVING BANK A/C IN KARNATAKA BANK 20,90,000/ - 2 TIME DEPOSIT WITH KARNATAKA BANK 1,06,81,872/ - 2. HOWEVER, IT IS SEEN FROM THE DATA AVAILABLE ON T HE ITD SYSTEM, NO RETURNS OF INCOME ARE FILED BY THE ASSESSEE IN THE ASSESSMENT YEAR. 3. IN VIEW OF THE ABOVE INFORMATION REGARDING INCOM E RECEIVED BY THE ASSESSEE ON THE TD SYSTEMS, I HAVE REASON TO BE LIEVE THAT IN THE CASE OF THE ASSESSEE, INCOME CHARGEABLE TO TAX HAS ESCAP ED ASSESSMENT FOR A.Y. 2011-12 WITHIN THE MEANING OF SEC. 147 OF THE INCOME-TAX ACT, 1961. THEREAFTER NOTING THAT NOTICE WAS ISSUED TO THE ASS ESSEE THE ASSESSING OFFICER PASSED THE FOLLOWING ORDER:- 4. THE ASSESSEE IS AN INDIVIDUAL. DURING THE YEAR THE ASSESSEE HAS DERIVED INCOME FROM SALARY AND OTHER SOURCE. ADDITION ON ACCOUNT OF CASH DEPOSIT OF RS 9,69,565/ - 5. AS PER THE ITS INFORMATION AVAILABLE FROM ITD S YSTEMS REFLECTED THAT THE ASSESSEE HAS MADE CASH DEPOSIT IN A SAVING BANK ACCOUNT DURING THE ASSESSMENT YEAR 2011-12 UNDER CONSIDERATION. T HE DETAILS ARE ASUNDER: SR NO. INFORMATION DESCRIPTION VALUE (RS.) 1 CASH DEPOSIT IN A SAVING BANK A/C 20,90,000/ - TOTAL 6. DURING THE ASSESSMENT PROCEEDINGS, THE AUTHORIZE D REPRESENTATIVE OF THE ASSESSEE WAS ASKED TO FILE DE TAILS OF CASH DEPOSITED IN THE SAVING BANK ACCOUNT. HENCE THE ASSESSEE VID E LETTER DATED 24.12.2018, STATED AS UNDER: AS PER MY FATHER APPROX RS 5,00,000/- TO RS.6,00,0 00/- WAS WITH HIM IN CASH OUT OF WITHDRAWALS IN PART YEAR WHICH HE HAD K EPT FOR MEDICAL EMERGENCIES OF FAMILY. 3 II) APPROX RS 4,00,000 TO 5,00,000 GIVEN OVER A PER IOD OF TIME BY WE FAMILY MEMBERS AS FINANCIAL SUPPORT. III) AS HE WAS SHORT OF MONEY FOR THE PROPERTY, HE HAD SOLD SOME OF THE SILVER UTENSILS FOR WHICH HE HAD RECEIVED RS 5,69,5 65/- IV) DURING THE F.Y. 2009-10, JEWELLERY BELONGING TO MY MOTHER WAS SOLD FOR WHICH AN APPROX RS 4,00,000/- V) APART FROM THIS, THE MONEY DEPOSITED IN BANK ACC OUNT WHICH HE IS NOT ABLE TO RECOLLECT AT THIS MOMENT MAY ALSO BE TAKEN INTO CONSIDERATION. 7. THE SUBMISSIONS FILED BY THE REPRESENTATIVE OF T HE ASSESSEE HAVE BEEN CAREFULLY CONSIDERED. HOWEVER, THE SAME ARE N OT FOUND TO BE TENABLE. DURING THE ASSESSMENT PROCEEDINGS, THE RE PRESENTATIVE OF THE ASSESSEE STATED THAT THE AMOUNT OF RS.9,69,565/- HA S RECEIVED AFTER SALE OF UTENSILS AND GOLD ORNAMENTS. HOWEVER, THE REPR ESENTATIVE OF THE ASSESSEE NOT PRODUCED THE DETAILS OF SALE AND PURCH ASE BILL OF UTENSILS AND GOLD ORNAMENTS. HENCE, THE AMOUNT OF RS.9,69,565/- IS DISALLOWED FOR WANT OF PROOF OF SALE OF JEWELLERY. FROM THE ABOVE, IT IS AMPLY EVIDENT THAT THE ASSESS MENT WAS REOPENED FOR THE INFORMATION OF CASH DEPOSIT OF RS 20,90,000 AND TIM E DEPOSIT OF RS 1,06,81,872/-. HOWEVER, IN THE ASSESSMENT ORDER THE ASSESSING OFFI CER DEALT WITH ONLY THE CASH DEPOSIT OF RS 20,90,000/- IN THE BANK. THE ASSESSI NG OFFICER ACCEPTED THE REASONS GIVEN BY THE ASSESSEE FOR THE ENTIRE SUM EXCEPT FOR A SUM OF RS 9,69,565/- WHICH WAS CLAIMED TO HAVE BEEN SOURCED FROM THE SAL E OF SILVER UTENSILS AND JEWELLERY BY THE MOTHER OF THE ASSESSEE, ON THE GRO UND THAT THE VOUCHERS WERE NOT PRODUCED. 3. UPON ASSESSEES APPEAL LEARNED CIT (A) UPHELD TH E ORDER OF ASSESSING OFFICER. HE HAS, INTER ALIA, REFERRED TO HONBLE BOMBAY HIGH COURT DECISION IN THE CASE OF ARUN KUMAR MUCHALA 399 ITR 256. AGGRIEVED BY THE S AID ORDER, THE ASSESSEE HAS FILED APPEAL BEFORE US. 4. WE HAVE HEARD THE LEARNED DEPARTMENTAL REPRESEN TATIVE. 5. NONE APPEARED ON BEHALF OF THE ASSESSEE DESPITE THE SAME BEING A STAY GRANTED MATTER. 6. UPON CAREFUL CONSIDERATION WE NOTE THAT THE REVE NUE AUTHORITIES ARE CONVINCED ABOUT THE SOURCE OF DEPOSIT OF ABOUT A SU M OF RS. 11,00,000/- IN SAVING 4 ACCOUNT AND RS 1,06,81,872/- IN TIME DEPOSIT ACCOUN T BY THE ASSESSEE WITHOUT MUCH ENQUIRY, BUT THEY ARE DISBELIEVING THE DEPOSIT OF R S 9,69,565/-. IN OUR CONSIDERED OPINION, WHEN IT CAN BE ACCEPTED THAT THE ASSESSEE IS CAPABLE OF DEPOSITING SO MUCH MONEY IN THE BANK WITHOUT ANY ENQUIRY, THE ADVERSE INFERENCE FOR A SMALL AMOUNT IS STRANGE. THE LEARNED CIT(A)S RELIANCE UPON HONBL E BOMBAY HIGH COURT DECISION IN THE CASE OF ARUN KUMAR MUCHALA (SUPRA), IS MISPLAC ED. IN THE SAID DECISION, THE ASSESSEE HAD TAKEN CASH DEPOSITS AND UNSECURED LOAN AND IN THAT CONTEXT THE HONBLE BOMBAY HIGH COURT HELD THAT WHEN THE ASSESS EE IS DOING BUSINESS HE CANNOT PLEAD THAT ASSESSEE HAS NOT MAINTAINED BOOKS OF ACC OUNTS, AND SECTION 68 WOULD NOT BE APPLICABLE. IN THE SAID CASE, HONBLE HIGH COUR T HELD THAT IT WAS THE DUTY OF THE ASSESSEE TO MAINTAIN BOOKS OF ACCOUNTS IF IT WAS DO ING ANY BUSINESS. 7. IN THE PRESENT CASE WE FIND THAT IT IS NOT AT AL L THE CASE OF THE REVENUE THAT ASSESSEE WAS DOING ANY BUSINESS AND IT WAS SUPPOSED TO MAINTAIN BOOKS OF ACCOUNTS. IN THIS CONNECTION, IT WILL BE GAINFUL TO REFER TO THE DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. BHAICHAND H GANDHI (1983) [53 COMPCAS 400 (BOM)] SECTION 68 OF THE SAID ACT STATES AS FOLLOWS : 'WHERE ANY SUM IS FOUND CREDITED IN THE BOOKS OF AN ASSESSEE MAINTAINED FOR ANY PREVIOUS YEAR, AND THE ASSESSEE OFFERS NO EXPLANATION ABOUT THE NATURE AND SOURCE THEREOF OR THE EXPLANATION OFFERED BY HIM IS NOT, IN THE OPINION O F THE INCOME- TAX OFFICER, SATISFACTORY, THE SUM SO CREDITED MAY BE CHARGED TO INCOME-TAX AS THE INCOME OF THE ASSESSEE OF THAT PR EVIOUS YEAR.' IN THE CASE OF BALADIN RAM V. CIT [1969] 71 ITR 42 7, IT HAS BEEN HELD BY THE SUPREME COURT THAT IT IS NOW WELL SETTLED TH AT THE ONLY POSSIBLE WAY IN WHICH INCOME FROM AN UNDISCLOSED SOURCE CAN BE ASSESSED OR REASSESSED IS TO MAKE THE ASSESSMENT ON THE BASIS T HAT THE PREVIOUS YEAR FOR SUCH AN INCOME WOULD BE THE ORDINARY FINANCIAL YEAR. EVEN UNDER THE PROVISIONS EMBODIED IN SECTION 68 OF THE SAID ACT, IT IS ONLY WHEN ANY AMOUNT IS FOUND CREDITED IN THE BOOKS OF THE AMOUNT SO CREDITED MAY BE CHARGED TO TAX AS THE INCOME OF THAT PREVIOUS YEAR, IF THE ASSESSEE OFFERS NO EXPLANATION OR THE EXPLANATION OFFERED BY HIM IS NOT SATISFACTORY. AS THE TRIBUNAL HAS POINTED OUT, IT IS FAIRLY WEL L SETTLED THAT WHEN MONEYS ARE DEPOSITED IN A BANK, THE RELATIONSHIP TH AT IS CONSTITUTED BETWEEN THE BANKER AND THE CUSTOMER IS ONE OF DEBTO R AND CREDITOR AND NOT OF TRUSTEE AND BENEFICIARY. APPLYING THIS PRINC IPLE, THE PASS BOOK 5 SUPPLIED BY THE BANK TO ITS CONSTITUENT IS ONLY A C OPY OF THE CONSTITUENT'S ACCOUNT IN THE BOOKS MAINTAINED BY THE BANK. IT IS NOT AS IF THE PASS BOOK IS MAINTAINED BY THE BANK AS THE AGENT OF THE CONST ITUENT, NOT CAN IT BE SAID THAT THE PASS BOOK IS MAINTAINED BY THE BANK U NDER THE INSTRUCTIONS OF THE CONSTITUENT. IN VIEW OF THIS, THE TRIBUNAL W AS, WITH RESPECT, JUSTIFIED IN HOLDING THAT THE PASS BOOK SUPPLIED BY THE BANK TO THE ASSESSEE IN THE PRESENT CASE COULD NOT BE REGARDED AS A BOOK OF THE ASSESSEE, THAT IS, A BOOK MAINTAINED BY THE ASSESSEE OR UNDER HIS INSTRU CTIONS. IN OUR VIEW, THE TRIBUNAL WAS JUSTIFIED IN THE CONCLUSIONS AT WH ICH IT ARRIVED. 8. WE NOTE THAT NO DECISION OVERRULING THE ABOVE BO MBAY HIGH COURT DECISION FROM THE HONBLE JURISDICTIONAL HIGH COURT AND HON BLE SUPREME COURT HAS BEEN SHOWN BEFORE US. 9. IN OUR CONSIDERED OPINION THE RATIO FROM THE AFO RESAID DECISION IS ALSO APPLICABLE IN THE FACTS OF THE CASE. THE ASSESSEE I S NOT REQUIRED TO MAINTAIN BOOKS OF ACCOUNTS AND IN THIS VIEW OF THE MATTER ADDITION UN DER 68 IN THIS CASE FOR SUMS FOUND IN BANK STATEMENT IS NOT SUSTAINABLE. MOREOVER THIS IS OVER AND ABOVE OUR FINDING AS ABOVE THAT THE REVENUE HAS ACCEPTED THE ASSESSEE BE ING CAPABLE OF DEPOSITING A HUGE SUM WITHOUT MUCH ENQUIRY OR DISCUSSION. IN THI S VIEW OF THE MATTER, IN OUR CONSIDERED OPINION THE ADDITION OF RS 9,69,565/- IS LIABLE TO BE DELETED. ACCORDINGLY, WE SET ASIDE THE ORDERS OF AUTHORITIES BELOW AND DE LETE THE ADDITION 10. IN THE RESULT, APPEAL BY THE ASSESSEE STANDS AL LOWED ORDER PRONOUNCED UNDER RULE 34(4) OF THE ITA T RULES ON 26 TH AUGUST, 2020. SD/- SD/- (AMARJIT SINGH) (SHAMIM YAHYA) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED 26 TH AUGUST , 2020. SA 6 COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE C I T(A), 4. THE C I T 5. THE DR, C BENCH BY ORDER //TRUE COPY// (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL, MUMBAI