SANDEEP RAMESH SHAH, MUMBAI V. ITO 19(3)(2), MUMBAI

ITA 745/MUM/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 6487 (ITAT-MUMBAI)
• Duration Of Justice: 11 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-02-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2008-2009
• Appeal Filed On: 11-02-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: R K GUBGOTRA J
• Assessee Lawyers: DHIRENDRA M SHAH
• Keywords: Reason to believe; Reassessment proceedings
• Section: 143(3); 143(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC, BENCH MUMBAI BEFORE SHRI R.C.SHARMA, ACCOUNTANT MEMBER ITA NO.745/MUM/2019 ( ASSESSMENT YEAR: 2008-09) SHRI SANDEEP RAMESH SHAH, 79, DADIYA MAHAL NO. 2, NAPEAN SEA ROAD, MUMBAI-400006. VS. I.T.O.-19(3)(2) 2 ND FLOOR, MATRUMANDIR, TARDEO, MUMBAI-400007. PAN/GIR NO. AOMPS 5930 F (APPELLANT ) .. (RESPONDENT ) ASSESSEE BY SHRI DHIRENDRA M SHAH (AR) REVENUE BY SHRI R.K. GUBGOTRA (JCIT-DR) DATE OF HEARING 04/02/2020 DATE OF PRONOUNCEMENT 10/02/2020 / O R D E R PER: R.C. SHARMA, A.M. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER DATED 14/12/2018 OF LD. CIT(A)-30, MUMBAI FOR THE A.Y. 20 08-09 IN THE MATTER OF ORDER PASSED U/S 143(3) R.W.S. 147 OF THE INCOME TAX ACT, 1961 (IN SHORT, THE ACT). 2. IN THIS APPEAL, THE ASSESSEE IS AGGRIEVED FOR RE OPENING OF ASSESSMENT AS WELL AS ADDITION MADE ON ACCOUNT OF C ASH DEPOSITED IN THE BANK ACCOUNT. 3. IT WAS ARGUED BY THE LD AR OF THE ASSESSEE THAT IN THE REASONS RECORDED, THE A.O. HAS WRONGLY NOTED THE FACT THAT THE ASSESSEE HAS ITA NO. 745/MUM/2019 SHRI SANDEEP RRAMESH SHAH VS ITO 2 NOT FILED RETURN OF INCOME WHEREAS THE ASSESSEE HAS FILED HIS RETURN OF INCOME ON 30/03/2010 DECLARING TOTAL INCOME OF RS. 4,25,682/- WHICH WAS ACCOMPANIED WITH REGULAR STATEMENT OF COMPUTATI ON OF INCOME. THIS RETURN WAS ALSO ACCEPTED U/S 143(1) OF THE ACT AS THE SAME WAS FOUND TO BE CORRECT AND PROPER. HE FURTHER CONTENDE D THAT IN THE REASONS RECORDING, THERE IS NO RECORDING OF AMOUNT OF TAX AS PAYABLE ON THE ALLEGED REASONS RECORDED. ACCORDINGLY, IT WAS R EQUESTED THAT THE REASSESSMENT SHOULD BE QUASHED. 4. ON THE OTHER HAND, THE LD DR HAS RELIED ON THE O RDERS OF THE AUTHORITIES BELOW. 5. I HAVE CONSIDERED THE RIVAL CONTENTIONS AND CARE FULLY GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AND FOU ND FROM THE RECORD THAT AFTER RECORDING PROPER REASONS WITH REGARD TO CASH DEPOSITED IN THE BANK ACCOUNT, THE A.O. HAS REOPENED THE ASSESSMENT. AS PER THE REASONS RECORDED, THE A.O. HAS SUFFICIENT REASON TO BELIEVE THAT THERE WAS ESCAPEMENT OF INCOME TO THE EXTENT OF CASH DEPO SITED IN THE BANK ACCOUNT, ACCORDINGLY, I UPHOLD THE REOPENING OF THE ASSESSMENT. 6. WITH REGARD TO MERIT OF ADDITION, THE LD AR OF T HE ASSESSEE HAS DRAWN OUR ATTENTION TO THE CASH SUMMARY FILED BEFOR E THE LOWER AUTHORITIES IN THE ENTIRE YEAR WHICH INDICATED WITH DRAWAL OF CASH FROM THE BANK ACCOUNT AND EXPENDITURE INCURRED OUT OF TH E SAME AND THE ITA NO. 745/MUM/2019 SHRI SANDEEP RRAMESH SHAH VS ITO 3 CASH DEPOSITED AGAIN IN THE BANK ACCOUNT. THE ASSES SEE HAS ALSO FILED CASH SUMMARY FOR THE YEAR UNDER CONSIDERATION ON 31 /3/2007 SO AS TO JUSTIFY AVAILABILITY OF CASH AT THE BEGINNING OF TH E YEAR. OUR ATTENTION WAS ALSO INVITED TO THE SUMMARY OF BANK ACCOUNT MAI NTAINED WITH ING VYSYA BANK LTD. AND SUMMARY OF BANK DEPOSITS AND WI THDRAWALS WITH ING VYSYA BANK LTD. IN VIEW OF THESE DOCUMENTARY EV IDENCES, IT WAS CONTENTION OF THE ASSESSEE THAT CASH SO DEPOSITED W AS DULY EXPLAINED AND NO ADDITION WAS WARRANTED. 7. ON THE OTHER HAND, THE LD DR HAS RELIED ON THE O RDER OF THE A.O. AND CONTENDED THAT THE ASSESSEE WAS UNABLE TO EXPLA IN THE PURPOSE FOR WHICH CASH WAS WITHDRAWN FROM THE BANK AND THEREAFT ER DEPOSITED IN THE SAME BANK ACCOUNT. ACCORDINGLY, THE A.O. WAS JU STIFIED IN DISREGARDING SUCH WITHDRAWAL OF CASH. 8. I HAVE GONE THROUGH THE ORDERS OF THE AUTHORITIE S BELOW AND FOUND FROM THE RECORD THAT DURING THE REASSESSMENT PROCEEDINGS, THE ASSESSEE HAS FILED CASH SUMMARY INDICATING WITHDRAW AL OF CASH AND DEPOSIT OF SAME IN THE BANK ACCOUNT, MERELY BECAUSE THERE WAS A TIME GAP BETWEEN WITHDRAWAL OF CASH AND THEREAFTER DEPOS IT OF SAME IN THE BANK ACCOUNT, IT CANNOT BE MADE A REASON TO DISBELI EVE THE AVAILABILITY OF CASH WITHOUT INDICATING THAT THE SUCH CASH WITHD RAWAL HAD BEEN USED BY THE ASSESSEE FOR SOME OTHER PURPOSES. THE A.O. A LSO DID NOT ACCEPT ITA NO. 745/MUM/2019 SHRI SANDEEP RRAMESH SHAH VS ITO 4 THE CASH WITHDRAWAL ON THE PLEA THAT THE ASSESSED D ID NOT GIVE THE REASONS OF WITHDRAWAL. NOWHERE IN THE ASSESSMENT OR DER THE A.O. HAS INDICATED THAT THE CASH SO WITHDRAWN FROM THE BANK HAS BEEN USED BY THE ASSESSEE FOR SOME PURPOSE OTHER THAN DEPOSIT IN THE BANK ACCOUNT. THE LD. CIT(A) DID NOT ACCEPT WITHDRAWAL OF CASH BE CAUSE THE ASSESSEE WAS NOT MAINTAINING BOOKS OF ACCOUNT. SINCE THE ASS ESSEE WAS NOT CARRYING ON ANY BUSINESS, MAINTENANCE OF BOOKS IS N OT STATUTORILY REQUIRED. THUS IT CANNOT BE MADE THE REASON TO DISB ELIEVE AVAILABILITY OF CASH WITHDRAWN FROM BANK ACCOUNT. IN THESE FACTS AN D CIRCUMSTANCES, I DO NOT FIND ANY JUSTIFICATION FOR THE DENIAL OF ASS ESSEES CLAIM OF DEPOSIT OF CASH IN THE BANK ACCOUNT WHICH WAS WITHDRAWN BY THE ASSESSEE ON EARLIER OCCASION. THUS, TO THE EXTENT OF AVAILABILI TY OF CASH THROUGH WITHDRAWAL IS ACCEPTED AND SAME CANNOT BE TAKEN AS UNEXPLAINED CASH DEPOSIT. THE OPENING CASH BALANCE OF RS. 5,42,145/- WAS SOUGHT TO BE EXPLAINED BY THE ASSESSEE THROUGH HIS CASH SUMMARY STATEMENT FOR THE YEAR 2007. LOOKING TO THE AVERAGE INCOME OF THE ASS ESSEE OUT OF THE OPENING CASH BALANCE OF RS. 5,42,145/-, I DIRECT TH E A.O. TO ACCEPT RS. 2.50 LACS AS CASH IN HAND AS ON 04/01/2007. THUS, I DIRECT THE A.O. TO ACCEPT AVAILABILITY OF CASH TO THE EXTENT OF RS. 2. 50 LACS AS OPENING CASH BALANCE AND THE CASH AMOUNT WITHDRAWN FROM BANK WHI CH WAS UTILIZED FOR AGAIN DEPOSIT IN THE BANK ACCOUNT. I DIRECT ACC ORDINGLY. ITA NO. 745/MUM/2019 SHRI SANDEEP RRAMESH SHAH VS ITO 5 9. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED IN PART. ORDER PRONOUNCED IN THE OPEN COURT ON 10 TH FEBRUARY, 2020. SD/- (R.C.SHARMA) ACCOUNTANT MEMBER MUMBAI; DATED 10/02/2020 *RANJAN COPY OF THE ORDER FORWARDED TO : BY ORDER, (ASSTT. REGISTRAR) ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY//