CHANDRAKANT N. DEDHIA, MUMBAI V. ITO 13(3)(1), MUMBAI

ITA 748/MUM/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 3989 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-07-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 24-12-2012
• Assessment Year: 2008-2009
• Appeal Filed On: 03-02-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Business income; Income from undisclosed sources; Source of fund; Additional evidence
• Section: 68

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL C CC C BENCH, BENCH, BENCH, BENCH, MUMBAI MUMBAI MUMBAI MUMBAI , ,, , ' ' ' ' # # # # , . BEFORE BEFORE BEFORE BEFORE SHRI SHRI SHRI SHRI SANJAY ARORA SANJAY ARORA SANJAY ARORA SANJAY ARORA, AM , AM , AM , AM & & & & SHRI SHRI SHRI SHRI VIJAY VIJAY VIJAY VIJAY PAL RAO, JM PAL RAO, JM PAL RAO, JM PAL RAO, JM ./ I. I.I. I.T.A. NO. T.A. NO. T.A. NO. T.A. NO.748/MUM/2012 748/MUM/2012 748/MUM/2012 748/MUM/2012 ( $% $% $% $% & & & & / ASSESSMENT YEAR :2008-09) CHANDRAKANT N. DEDHIA, 171/9, JAI BHARATI BLDG., NATHALAL PAREKH MARG, WADALA, MUMBAI-400031 % % % % / VS. ITO 13(3)(1) MUMBAI ' ./ ( ./ PAN/GIR NO. : AABPD2996F ( ') / APPELLANT APPELLANT APPELLANT APPELLANT) .. ( *+') / RESPONDENT RESPONDENT RESPONDENT RESPONDENT) , / O R D E R PER : # , . . / VIJAY PAL RAO, JM THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER DATED 2.12.2011 OF COMMISSIONER OF INCOME TAX(APPEA LS) FOR THE ASSESSMENT YEAR 2008-09. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS IN THIS APPEAL: 1, THE ORDER OF THE LEARNED COMMISSIONER OF INCOM E TAX(A)-24, MUMBAI CONFIRMING THE ADDITION OF ` 37,42,000/- MADE BY THE INCOME TAX OFFICER IN COMPUTING THE BUSINESS INCOME OF THE APPELLANT IS CONTRARY TO LAW AND THE FACTS OF THE CASE. 2. ON THE FACTS BROUGHT ON RECORD THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) OUGHT TO HAVE HELD THAT THE APPELLANT HAS GIVEN THE DOCUMENTARY ') ') ') ') - - - - / APPELLANT BY : SHRI K. GOPAL & SHRI JITENDRA SINGH *+') *+') *+') *+') . .. . - - - - /RESPONDENT BY : SHRI T. ROUMUAN PAITE % % % % . .. . / / / / / DT. OF HEARING : 3 RD JULY 2013 0& 0& 0& 0& . .. ./ / / / /D T.OFPRONOUNCEMENT: 24 TH JULY 2013 ITA NO. 748/M/2012 CHANDRAKANT N. DEDHIA . 2 PROOF AND THE EXPLANATION FOR SOURCE OF AGGREGATE C ASH DEPOSIT OF ` 37,42,000/-. 3. THE AO NOTED FROM THE AIR INFORMATION THAT THE A SSESSEE HAS DEPOSITED CASH OF ` 11,76,000/- IN THE SAVING BANK ACCOUNT WITH BANK OF BARODA, CHANDAVARKAR ROAD, MATUNGA, MUMBAI AND ` 25,66,000/- IN SAVING BANK ACCOUNT WITH SARASWAT CO -OPERATIVE BANK, VASHI, NAVI MUMBAI. TO VERIFY THE SOURCES OF THE DEPOSIT, THE ASSESSEE WAS ASKED TO SUBMIT THE COPY OF THE BANK S TATEMENT. THE AO FOUND THAT THE ASSESSEE DID NOT DISCLOSE HIS BAN K ACCOUNT WITH BANK OF BARODA. THE ASSESSEE FILED LETTER DATED 26. 11.2010 AND EXPLAINED THAT THE SOURCE OF DEPOSIT OF CASH IS THE WITHDRAWAL OF CASH FROM THE BANK AND VICE-VERSA. IT WAS EXPLAINED THAT THE ASSESSEE WAS DOING THE BUSINESS OF BROKERAGE AS WEL L AS INVESTMENTS IN LAND. SINCE THE LAND IS SITUATED IN THE VILLAGE, THE ASSESSEE HAS TO KEEP CASH-IN-HAND READY FOR THE DEA L WHEN THE OPPORTUNITY COMES. HOWEVER, IF THE DEAL DOES NOT TA KE PLACE HE RE- DEPOSITS THE CASH WITHDRAWN EARLIER. THE AO DID NOT ACCEPT THE EXPLANATION OF THE ASSESSEE ON THE REASON THAT THE ASSESSEE HAS NOT DISCLOSED THE BANK ACCOUNT IN THE STATEMENT, BALANC E SHEET, RETURN OF INCOME ETC. AND ONLY AFTER THE DETAILS OF AIR IN FORMATION WERE GIVEN TO THE ASSESSEE, HE HAS ADMITTED HAVING ONE M ORE BANK ACCOUNT WITH BANK OF BARODA. FURTHER THE AO OBSERVE D THAT THE ASSESSEE HAS NOT GIVEN THE SOURCES OF CASH DEPOSIT WITH DOCUMENTARY EVIDENCES WHEN THE TOTAL BROKERAGE RECE IVED BY THE ITA NO. 748/M/2012 CHANDRAKANT N. DEDHIA . 3 ASSESSEE IS ONLY 35,000/- AND NO INVESTMENT HAS BEE N SHOWN BY THE ASSESSEE. ACCORDINGLY, THE AO TREATED THE CASH DEPO SIT OF ` 37,42,000/- AS UNDISCLOSED SOURCES OF INCOME U/S 68 OF THE INCOME TAX ACT AND ADDED TO THE INCOME OF THE ASSESSEE. ON APPEAL, THE CIT(A) HAS CONFIRMED THE ADDITION MADE BY THE AO ON THE GROUND THAT THE ASSESSEES EXPLANATION IS NOT TENABLE BECA USE THE CASH CLAIMED TO HAVE WITHDRAWN FOR MAKING INVESTMENT IN LANDS BUT DURING THE ENTIRE YEAR THE ASSESSEE HAS NOT INVESTE D A SINGLE RUPEE IN LAND OUT OF THE CASH WITHDRAWN ON AS MANY AS ON 17 OCCASIONS. FURTHER THE CIT(A) HAS OBSERVED THAT THERE IS NO CO -RELATION WITH THE CASH DEPOSIT AND CASH WITHDRAWN. 4. THE LD. AR OF THE ASSESSEE HAS REFERRED BANK ACC OUNTS STATEMENTS AND SUBMITTED THAT MOST OF THE TIME THE TRANSACTIONS ARE CARRIED OUT THROUGH CHEQUES AND IT IS REFLECTED IN THE BANK STATEMENT THAT THE AMOUNT HAS BEEN TRANSFERRED FROM THE CURRENT ACCOUNT TO SAVING ACCOUNT OR VICE-VERSA. APART FROM THE BANK ACCOUNTS STATEMENT THE ASSESSEE HAS ALSO REFERRED T HE CONFIRMATION OF LOAN TAKEN BY THE ASSESSEE AT PAGE NO. 10 & 11 O F THE PAPER BOOK. THE LD. AR HAS CONTENDED THAT THE AUTHORITIES BELOW HAVE NOT PROPERLY EXAMINED THE RELEVANT RECORD AND PARTICULA RLY THE CONFIRMATION FILED BY THE ASSESSEE REGARDING LOAN T O SHOW THE SOURCES OF DEPOSIT. ON THE OTHER HAND, THE LD. DR H AS RELIED UPON THE ORDER OF THE AUTHORITIES BELOW. ITA NO. 748/M/2012 CHANDRAKANT N. DEDHIA . 4 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WEL L AS THE RELEVANT MATERIAL ON RECORD. THE AO AND CIT(A) HAS PROCEEDED ON THE PREMISES THAT THE ASSESSEE HAS FAILED TO CO-REL ATE DEPOSITS AND WITHDRAWAL OF THE CASH FROM THE BANK ACCOUNT, HOWEV ER WE NOTE THAT SOME OF THE TRANSACTIONS ARE THROUGH CHEQUE AN D BETWEEN THE TWO ACCOUNTS OF THE ASSESSEE. FURTHER SOME PAYMENT AND RECEIPTS ARE ALSO THROUGH CHEQUES AND FROM THE THIRD PARTIES . THEREFORE AT LEAST THE SOURCES OF DEPOSIT TO THE EXTENT OF THE A MOUNT DEPOSITED THROUGH CHEQUES IN THE ACCOUNTS SHOULD HAVE BEEN CO NSIDERED FOR THE PURPOSE OF THE SOURCES OF THE DEPOSITS. FURTHER THE ASSESSEE FILED TWO CONFIRMATIONS OF LOAN OF ` 5,50,000/- AND ` 5,00,000/- RESPECTIVELY AT PAGE NO. 10 & 11 OF THE PAPER BOOK. THESE TWO CONFIRMATIONS WERE NOT AVAILABLE BEFORE THE AO HOWE VER PRODUCED BEFORE THE CIT(A) BUT THE CIT(A) HAS NOT EXAMINED T HE SAID ADDITIONAL EVIDENCE. IN VIEW OF THE FACTS AND CIRCU MSTANCES OF THE CASE AND IN THE INTEREST OF JUSTICE WE SET ASIDE TH IS ISSUE TO THE RECORD OF THE AO TO PROPERLY EXAMINE THE DETAILS OF THE BANK ACCOUNT AND CONFIRMATION IF ANY AND ACCORDINGLY DEC IDE THIS ISSUE AS PER LAW AFTER GIVING AN OPPORTUNITY OF HEARING TO T HE ASSESSEE. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. ITA NO. 748/M/2012 CHANDRAKANT N. DEDHIA . 5 ORDER PRONOUNCED IN THE OPEN COURT ON 24 TH DAY OF JULY 2013 , . 0& 1 2%3 24 TH . 4 SD/- SD/- ( ) (SANJAY ARORA) ACCOUNTANT MEMBER ( # ) $ (VIJAY PAL RAO) JUDICIAL MEMBER PLACE: MUMBAI : DATED: 24 TH JULY 2013 SUBODH COPY FORWARDED TO: 1 APPELLANT 2 RESPONDENT 3 CIT 4 CIT(A) 5 DR /TRUE COPY/ BY ORDER DY /AR, ITAT, MUMBAI