TEJARAM R BALOTIA, MUMBAI V. ITO 15(2)(4), MUMBAI

ITA 7448/MUM/2012

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 7867 (ITAT-MUMBAI)
• Duration Of Justice: 4 year(s) 3 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-03-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 24-03-2017
• Assessment Year: 2008-2009
• Appeal Filed On: 17-12-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Opportunity of being heard

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MU MBAI BEFORE SHRI D. KARUNAKARA RAO, AM AND SHRI AMARJIT SINGH, JM / I.T.A. NO.7448/MUM/2012 ( / ASSESSMENT YEAR: 2008-09) TEJARAM BALOTIA GALLI NO. 25, INDIRA NAGAR, THAKKAR BAPPA COLONY, CHEMBUR, MUMBAI 400 071 / VS. INCOME TAX OFFICER WARD 15(2)(4) MATRU MANDIR, MUMBAI ./ ./PAN/GIR NO. : AIFPB1410N ( /APPELLANT ) .. ( / RESPONDENT ) / DATE OF HEARING: 24.03.2017 /DATE OF PRONOUNCEMENT: 31.03.2017 / O R D E R PER AMARJIT SINGH, JM: THE ASSESSEE HAS FILED THE PRESENT APPEAL AGAINST T HE ORDER DATED 26.11.2012 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS)-26, MUMBAI [HEREINAFTER REFERRED TO AS THE CIT(A)] R ELEVANT TO THE A.Y.2008-09 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS:- ASSESSEE BY: NONE REVENUE BY: SMT. JOTHILAKSHMI NAYAK ITA NO.7448/M/2012 A.Y.2008-09 2 1. LD. CIT(A) HAS ERRED TO IGNORE THE SUBMISSIONS OF BONAFIDE ERROR ON PART OF APPELLANT ABOUT ESCAPEMENT OF TRANSACTIO NS IN BANK ACCOUNT. 2. LD. CIT(A) HAS ERRED TO UPHOLD ADDITIONS OF RS.3 ,61,750/- INSPITE OF HOLDING THAT THE DEPOSITS IN BANK ACCOUNT NOT RE LATING TO SALES. 3. LD. CIT(A) HAS ERRED TO DISBELIEVE THE CLAIM OF EXPENSES AGAINST THE SALE TRANSACTIONS IN BANK ACCOUNT & ARBITRARILY DISMISSED THE CASES CITED. ADDITIONAL GROUND:- 1. APPELLANT PRAYS THAT HIS INCOME ON UNDISCLOSED SALE S OF RS.12,39,350/- MAY BE DETERMINED @ 5% ON PROFIT PER CENTAGE. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E FILED HIS RETURN OF INCOME ON 01.09.2008 DECLARING TOTAL INCOME TO THE TUNE OF RS.1,47,663/-. THE RETURN WAS PROCESSED U/S.143(1) OF THE INCOME T AX ACT, 1961 ( IN SHORT THE ACT). THEREAFTER, THE CASE WAS SELECTED FOR SCRUTINY UNDER CASS FOR VERIFICATION OF SOURCE OF CASH DEPOSITED OF RS.11,6 5,950/- IN SAVING BANK ACCOUNT IN ING VYSYA BANK, CHEMBUR. THEREAFTER, TH E NOTICE U/S.143(2) OF THE ACT WAS ISSUED ON 11.09.2010 WHICH WAS DULY SER VED UPON THE ASSESSEE. SUBSEQUENTLY, NOTICE U/S.142(1) OF THE ACT DATED 04 .03.2010 WAS ISSUED WHICH WAS RETURNED BY THE POSTAL AUTHORITIES BY THE REMARK INTIMATION POSTED ON 20.03.2010 AND 22.03.2010. FURTHER NOTI CES U/S.142(1) OF THE ACT DATED 06.08.2010 AND 07.10.2010 WERE ALSO ISSUE D WHICH WERE RETURNED UNSERVED BY THE POST. FINALLY A SHOW CAUSE LETTER DATED 09.11.2010 WAS ISSUED ON THE NEW ADDRESS WHICH WAS DULY SERVED UPO N THE ASSESSEE. THE ASSESSEE WAS AN INDIVIDUAL AND WAS ASKED TO FURNISH THE SOURCE / EXPLANATION OF THE CASH DEPOSIT OF RS.11,65,950/-. THE ASSESSEE EXPLAINED THAT THE ASSESSEE FAILED TO SHOW THE SAID AMOUNT OF HIS TRADING BUSINESS ITA NO.7448/M/2012 A.Y.2008-09 3 INADVERTENTLY AND ALSO REQUESTED TO CALCULATE THE I NTEREST @ 5% U/S.44AF OF THE ACT AMOUNTING TO RS.58,298/-. THE CONTENTION O F THE ASSESSEE WAS NOT ACCEPTED AND THE DEPOSIT TO THE TUNE OF RS.11,65,95 0/- WAS ADDED TO THE INCOME OF THE ASSESSEE. ON APPEAL THE CIT(A) HAS A RRIVED AT THIS CONCLUSION THAT AN AMOUNT OF RS.3,61,750/- WAS STIL L UNEXPLAINED, THEREFORE, THE SAID AMOUNT WAS ADDED TO THE INCOME OF THE ASSE SSEE BY ALLOWING THE APPEAL IN PART. SINCE THE ASSESSEE WAS NOT SATISFI ED THE PRESENT APPEAL HAS BEEN FILED BEFORE US. ADDITIONAL GROUND:- 4. THE ASSESSEE HAS PLEADED THAT THE ADDITIONAL PLE A TO DETERMINE THE 5% OF THE UNDISCLOSED SALE ON PROFIT PERCENTAGE BAS IS HAS NOT BEEN DEALT BY THE ASSESSING OFFICER AS WELL AS CIT(A), THEREFORE, IN THE SAID CIRCUMSTANCES THE ASSESSING OFFICER IS LIABLE TO BE DIRECTED TO DECIDE THE MATTER AFRESH IN VIEW OF THE LAW SETTLED BY HONBLE MADHYA PRADESH HIGH COURT [2008] 304 ITR 52 (MP) IN CASE OF MAN MOHAN S ADANI VS. COMMISSIONER OF INCOME TAX DATED 31.10.2007 AND HON BLE BOMBAY HIGH COURT IN CASE OF COMMISSIONER OF INCOME TAX 8 VS. SHRI HARIRAM BHAMBHANI IN IT NO. 313 OF 2013 DATED 4 TH FEBRUARY 2015 AND HONBLE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH IN ITA NO.4618&4580/MUM/2010 DATED 25 TH MAY 2012 . HOWEVER, ON THE OTHER HAND LEARNED REPRESENTATIVE OF THE DEPARTMENT HAS S TRONGLY RELIED UPON THE ORDER PASSED BY THE CIT(A) IN QUESTION. ON APPRAISA L OF THE ORDER OF THE ASSESSING OFFICER DATED 24.12.2010, IT CAME INTO TH E NOTICE THAT THE ASSESSEE WAS TAKING THE PLEA TO TREAT THE RETAIL SA LE ON WHICH THE INCOME @ 5% CAN BE CALCULATED U/S.44A OF THE ACT WHICH HAS NOT BEEN DEALT BY THE ITA NO.7448/M/2012 A.Y.2008-09 4 ASSESSING OFFICER AS WELL AS CIT(A) IN THEIR ORDERS . IN BRIEF AFTER FINDING THE ENTRY OF RS.11,65,950/- IN THE SAVING BANK ACCO UNT OF THE ASSESSEE IN THE ING VYSYA BANK, THE ASSESSING OFFICER TREATED T HE SAME AS UNEXPLAINED U/S.68 OF THE ACT AND THE SAID AMOUNT W AS ADDED TO THE INCOME OF THE ASSESSEE. HOWEVER, IN THE APPEAL THE CIT(A) HAS ARRIVED AT THIS CONCLUSION THAT THE ASSESSEE HAS EXPLAINED THE DEPO SIT TO THE TUNE OF RS.8,77,600/-, HOWEVER, THE REMAINING AMOUNT TO THE TUNE OF RS.3,61,750/- WAS STILL UNEXPLAINED THEREFORE ADDED THE SAID AMOU NT TO THE INCOME OF THE ASSESSEE. AT THE COST OF REPETITION IT IS QUITE CL EAR THAT THE PLEA OF THE ASSESSEE TO TAX THE UNEXPLAINED AMOUNT TAXABLE @ 5% IN VIEW OF THE PROVISION U/S.44AF OF THE ACT HAS NOT BEEN TREATED AT ALL. IN VIEW OF THE SAID CIRCUMSTANCES, WE SET ASIDE THE FINDING OF THE CIT(A) IN QUESTION AND DIRECT THE ASSESSING OFFICER TO DECIDE THE MATTER A FRESH IN VIEW OF THE ABOVE SAID LAW BY GIVING AN OPPORTUNITY OF BEING HE ARD TO THE ASSESSEE. ACCORDINGLY THIS ADDITIONAL GROUND IS DECIDED IN FA VOUR OF THE ASSESSEE AGAINST THE REVENUE. ISSUE NO.1 TO 3:- 5. SINCE THE ADDITIONAL GROUND HAS BEEN DECIDED IN FAVOUR OF THE ASSESSEE IN WHICH THE FINDING OF THE CIT(A) HAS BEE N ORDERED TO BE SET ASIDE AND THE ASSESSING OFFICER HAS BEEN DIRECTED TO DECI DE THE MATTER AFRESH BY GIVING AN OPPORTUNITY OF BEING HEARD TO THE ASSESSE E, THEREFORE IN THE SAID CIRCUMSTANCES THERE IS NO NEED TO DECIDE THESE ISSU ES WHICH WOULD BECAME ONLY ACADEMIC IN NATURE. ITA NO.7448/M/2012 A.Y.2008-09 5 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS HEREBY ORDERED TO BE ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 31 ST MARCH, 2017 . SD/- SD/- (D.KARUNAKARA RAO) (AMARJIT SINGH) / ACCOUNTANT MEMBER /JUDICIAL MEMBER MUMBAI; DATED : 31 ST ! $% , 2017 MP. / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. * ( ) / THE CIT(A)- 4. * / CIT 5. - , - , / DR, ITAT, MUMBAI 6. , .% / GUARD FILE. / BY ORDER, # # //TRUE COPY// / /(DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI