ANSARI MEHABOOB SHARIF, MUMBAI V. ITO 22(2)(1), MUMBAI

ITA 7551/MUM/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 3331 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 8 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-08-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 04-08-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 18-12-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RANDHIR GUPTA
• Keywords: Bonafide belief; Source of fund
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI SMC BENCH, MUMBAI BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER, ITA. NO. 7551/MUM/2014 (ASSESSMENT YEAR:2009-10) SHRI ANSARI MEHBOOB SHARIF ROOM NO.24, SECTOR D, LL, CHEETA CAMP, TROMBAY, MUMBAI 400 088 APPELLAN T VS. ITO 22(2)(1), MUMBAI. RESPONDENT PAN: AEKPA5697P /BY APPELLANT : NONE /BY RESPONDENT : SHRI RANDHIR GUPTA, D.R. /DATE OF HEARING : 04.08.2016 /DATE OF PRONOUNCEMENT : 30.08.2016 ORDER PER SHAILENDRA KUMAR YADAV, J.M: THIS APPEAL HAS BEEN FILED BY ASSESSEE AGAINST THE ORDER OF COMMISSIONER OF INCOME-TAX (APPEALS)-33, MUMBAI, DATED 15.09.2014 FOR A.Y. 2009-10 WHEREIN ADDITION U/S.68 OF THE ACT OF RS.10,16,824/- AND IN TEREST ITA NO.7551/MUM/14 A.Y. 09-10 [SHRI ANSARI MEHBOOB SHARIF VS. ITO] PAGE 2 ADDITION OF RS.24,11,208/- U/S. 68 OF THE ACT HAS B EEN OPPOSED. 2. FIRST ISSUE IS WITH REGARD TO ADDITION U/S.68 OF THE ACT ON ACCOUNT OF CHEQUE DEPOSIT OF RS.10,16,824/- AND CASH DEPOSIT OF RS.24,11,208/- IN BANK ACCOUNT. ASSESSIN G OFFICER ON PERUSAL OF BANK STATEMENT WITH ICICI BAN K, ASSESSING OFFICER NOTED THAT ASSESSEE HAD DEPOSITED CASH OF RS.24,11,208/- AND CHEQUES OF RS.10,16,824/- IN ICI CI BANK ACCOUNT. SO, HE MADE THESE ADDITIONS. 2.1 MATTER WAS CARRIED BEFORE THE FIRST APPELLATE A UTHORITY, WHEREIN VARIOUS CONTENTIONS WERE RAISED ON BEHALF O F ASSESSEE AND HAVING CONSIDERED THE SAME, CIT(A) CON FIRMED THE ADDITIONS IN QUESTION. 2.2 BEFORE ME, NONE APPEARED ON BEHALF OF ASSESSEE. ON OTHER HAND, LEARNED DEPARTMENTAL REPRESENTATIVE SUP PORTED THE ORDER OF CIT(A). 2.3 AFTER GOING THROUGH THE ARGUMENTS OF LEARNED DEPARTMENTAL REPRESENTATIVE AND MATERIAL ON RECORD, I DISPOSE OF THIS APPEAL AS UNDER: 2.4 ASSESSEE IS AN INDIVIDUAL CARRYING ON A SMALL R ETAIL BUSINESS TO UNDERTAKE THE REPAIR WORKS OF VARIOUS K INDS OF LEATHER BAGS AND ALSO MAKES ON CONTRACT BASIS SCHOO L BAGS. IN HIS SMALL RETAIL WORK, HIS TURNOVER DOES NOT CRO SS THE ITA NO.7551/MUM/14 A.Y. 09-10 [SHRI ANSARI MEHBOOB SHARIF VS. ITO] PAGE 3 LIMIT AS SET OUT IN SECTION 44AB OF THE ACT FOR TAX AUDIT PURPOSE. HE HAD NEVER FILED HIS RETURN IN HIS LIFE AND WAS UNDER BONAFIDE BELIEF THAT ONCE INCOME EARNED IS BE LOW TAXABLE LIMIT, IT IS NOT NECESSARY TO FILE THE RETU RN OF INCOME LIKEWISE CLAIMED THAT HE WAS NEVER EARNED ANY INCOM E, WHICH WAS ABOVE TAXABLE LIMITS. BEING AN UNEDUCATE D PERSON, HE STARTED HIS CARRIER AS A LABOURER IN A L EATHER FACTORY WHICH WAS MANUFACTURING SOFT LUGGAGES. THE BUSINESS WAS LOCATED IN A SLUMP AROUND TROMBAY, MUM BAI. BY WORKING HE CAME TO KNOW VARIOUS DEALERS AND WITH THEIR ADVISE, HE STARTED TAKING UP SMALL REPAIR JOBS IN H IS INDIVIDUAL CAPACITY AND USED TO MAKE FEW PIECES OF DESIGNER BAGS. BY TAKING CONTRACT FROM DEALERS, INDIVIDUAL ASSESSEE TOOK CONTRACTS TO DO REPAIR WORKS AND MANUFACTURING BAGS FOR VARIOUS DEALERS WHO USED TO PAY CASH AS WELL AS CHEQUES WHICH HE DEPOSITED IN HIS BANK ACCOUNT WITH ICICI. 2.5 BESIDES, BUSINESS RELATED REPAIRS HE HAD NO OTH ER SOURCES OF INCOME TO PROVE ANYTHING OTHERWISE. FRO M AFORESAID RECEIPTS, HE WITHDREW THE AMOUNT FROM TIM E TO TIME TO MEET HIS VARIOUS EXPENSES TO PAY THE LABOUR ERS, TO THE PARTIES FROM WHOM HE USED TO BUY MATERIALS AND ALSO TO MEET HIS HOUSEHOLD REQUIREMENTS. HE HAD NOT MAINTAI NED ANY RECORDS. AS STATED ABOVE, HE WAS UNDER BONAFID E BELIEF THAT HIS INCOME IS BELOW TO LIMIT OF TAXABLE INCOME AND NOT LIABLE TO BE TAXED. ALL HIS OUTGOINGS USED TO BE I N CASH ONLY, WHICH IS EVIDENT FROM HIS WITHDRAWAL FROM BANK THRO UGH ITA NO.7551/MUM/14 A.Y. 09-10 [SHRI ANSARI MEHBOOB SHARIF VS. ITO] PAGE 4 ATM COUNTER. HE ENCLOSED ENTIRE BANK STATEMENT FOR THE PERIOD OF 01.04.2008 TO 31.03.2009 AND ALSO BANK SUMMARY FOR THE RELEVANT PERIOD. HE WAS BASICALLY DOING LABOUR WORK WITH THE HELP OF CERTAIN WORKERS AND MA RGIN WAS NOT MUCH ENOUGH FOR MAINTAINING BOOKS. STAND O F ASSESSEE HAS BEEN THAT ADDITION U/S.68 OF THE ACT M AY BE DELETED. 2.6 THE ISSUE BEFORE ME IS WITH REGARD TO DEPOSIT O F CASH AND CHEQUE IN THE ACCOUNT, WHICH WAS ADDED UNDER TH E PROVISIONS OF SECTION 68 OF THE ACT. TAKING ALL FA CTS AND CIRCUMSTANCES INTO CONSIDERATION, THE APPLICATION O F PROVISIONS OF SECTION 68 OF THE ACT IS NOT JUSTIFIE D BECAUSE ASSESSEE DOES NOT MAINTAIN HIS BOOKS OF ACCOUNTS BE ING A ROADSIDE RETAILER BEING PERSON OF MINIMUM MEANS. N OTHING IS CREDITED IN THE BOOKS OF ACCOUNT OF ASSESSEE AS A SMALL LABOUR DOING REPAIR JOB/RETAIL WORK ON SELLING SMAL L SCHOOL BAGS ON CONTRACT BASIS. ALL PURCHASES ARE SUBSTANT IALLY IN CASH. THE PROVISIONS OF SECTION 68 OF THE ACT SUPP ORTS ANY SUM CREDITED IN THE BOOKS OF ASSESSEE MAINTAINED BY HIM. IN THIS CASE, ASSESSEE DOES NOT MAINTAIN BOOKS OF A CCOUNT AND BANK PAS BOOK CANNOT BE REGARDED AS BOOKS OF ACCOUNTS. ASSESSEE HAS OFFERED HIS EXPLANATION ABO UT DEPOSITS AND ITS SOURCES THAT SAID DEPOSITS ARE REC EIPTS FROM HIS CUSTOMERS AND PAYMENT MADE TO SUPPLIERS ARE IN THE FORMS OF WITHDRAWALS FROM HIS BANK ACCOUNT. THEREF ORE, IN VIEW OF ABOVE, PROVISIONS OF SECTION 68 OF THE ACT ARE NOT ITA NO.7551/MUM/14 A.Y. 09-10 [SHRI ANSARI MEHBOOB SHARIF VS. ITO] PAGE 5 APPLICABLE. MOREOVER, THE WHOLE RECEIPTS ARE OF RE VENUE NATURE AND CANNOT BE TAXED AS DEEMED ADDITION. THU S, ADDITIONS IN QUESTION ARE NOT JUSTIFIED. SAME ARE DIRECTED TO BE DELETED. 3. IN THE RESULT, THE APPEAL FILED BY ASSESSEE IS A LLOWED. PRONOUNCED IN THE OPEN COURT ON THIS THE 30 TH DAY OF AUGUST, 2016. SD/- (SHAILENDRA KUMAR YADAV) JUDICIAL MEMBER MUMBAI: DATED 30/08/2016 TRUE COPY S.K.SINHA / COPY OF ORDER FORWARDED TO:- 1. / REVENUE 2. / ASSESSEE 3. %&%'( ) / CONCERNED CIT 4. )- / CIT (A) 5.-./00'(, '( , %& / DR, ITAT, MUMBAI 6./4567 / GUARD FILE. BY ORDER / , / % , '( , %&