HARMEET SINGH SABLOK, MUMBAI V. ITO WD 19(2)(3), MUMBAI

ITA 7580/MUM/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 93092 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: H
• Assessment Year: 2009-2010
• Appeal Filed On: 26-12-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: JEETENDRA KUMAR
• Keywords: Unexplained investment; Business income
• Section: 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH H, MUMBAI BEFORE SHRI G.S. PANNU, ACCOUNTANT MEMBER AND SHRI SANJAY GARG, JUDICIAL MEMBER ITA NO.7580/M/2013 ASSESSMENT YEAR: 2009-10 MR. HARMEET SINGH SABLOK, A/24, QUEENS PARK PREMISES CHS LTD., JUHU, SANTACRUZ (WEST), MUMBAI 400 049 PAN: ALRPS 3621D VS. THE I.T.O. WARD-19(2)(3), PIRAMAL CHAMBERS, LALBAUG, MUMBAI - 400012 (APPELLANT) (RESPONDENT) PRESENT FOR: ASSESSEE BY : SHRI VISHWAS MEHENDALE, A.R. REVENUE BY : SHRI JEETENDRA KUMAR, D.R. DATE OF HEARING : 28.05.2015 DATE OF PRONOUNCEMENT : 30.06.2015 O R D E R PER SANJAY GARG, JUDICIAL MEMBER: THE PRESENT APPEAL HAS BEEN PREFERRED BY THE ASSES SEE AGAINST THE ORDER DATED 01.11.2013 OF THE COMMISSIONER OF INCOME TAX (APPEALS) [HEREINAFTER REFERRED TO AS THE CIT(A)] RELEVANT TO ASSESSMENT Y EAR 2009-10. 2. THE ASSESSEE, THROUGH ITS GROUNDS OF APPEAL, HAS AGITATED THE ADDITION OF RS.18,23,034/- MADE BY THE ASSESSING OFFICER (HEREI NAFTER REFERRED TO AS THE AO) UNDER SECTION 69 OF THE INCOME TAX ACT. THE BRIEF FACTS OF THE CASE ARE THAT THE AO GOT AI R INFORMATION TO THE EFFECT THAT THE ASSESSEE HAD MADE CASH DEPOSITS OF RS.1551600/- IN STANDARD CHARTERED BANK ON VARIOUS DATES. THE ASSESSEE WAS SHOW-CAUSED BY THE AO TO SUBMIT THE DETAILS IN THIS RESPECT. THE AO ALSO CA LLED FOR DETAILS OF THE BANK ITA NO.7580/M/2013 MR. HARMEET SINGH SABLOK 2 ACCOUNT FROM THE CONCERNED BANK ALSO. AFTER PERUSA L OF THE BANK STATEMENT, THE AO OBSERVED THAT THE ASSESSEE HAD DEPOSITED RS.18,2 3,034/- IN HIS BANK ACCOUNT IN CASH DURING THE PERIOD 01.04.2008 TO 31. 03.2009. THE AO OBSERVED THAT THE ASSESSEE HAD DISCLOSED HIS THREE BANK ACCO UNTS IN OTHER BANKS, BUT THE ASSESSEE HAD NOT DISCLOSED THE DEPOSITS IN THE STAN DARD CHARTERED BANK. EVEN THE ASSESSEE AND HIS BROTHER ADMITTED BEFORE THE AO THAT THE TRANSACTIONS/DEPOSITS IN THE STANDARD CHARTERED BAN K WERE NOT DISCLOSED TO THE DEPARTMENT. THE ASSESSEE SUBMITTED BEFORE THE AO T HAT HE WAS CARRYING ON THE BUSINESS OF SELLING OF AUTO SPARE PARTS AND THA T THE TOTAL DEPOSITS REPRESENT BUSINESS RECEIPTS IN COURSE OF TRADING IN AUTO SPAR E PARTS ETC. HE REQUESTED THE AO TO ASSESS THE INCOME OF THE ASSESSEE AS PER THE PROVISION OF THE SECTION 44AF OF THE ACT AND TO ESTIMATE THE INCOME OF THE A SSESSEE ON PRESUMPTION BASIS AT THE RATE OF 5% ON TURNOVER OF RS.20,51,248 /- WHICH WORKED OUT AT RS.1,02,562/-. HE FURTHER SUBMITTED THAT THE ASSES SEE HAD ALREADY RETURNED THE INCOME OF RS.2,55,633/- WHICH WAS ON HIGHER SIDE. HOWEVER, THE AO DID NOT ACCEPT THE CONTENTION OF THE ASSESSEE AND HE TREATE D THE AMOUNT OF DEPOSIT OF RS.18,23,034/- IN THE STANDARD CHARTERED BANK AS UN DISCLOSED INVESTMENT OF THE ASSESSEE WITHIN THE MEANING OF SECTION 69 OF TH E ACT. 3. THE LD. CIT(A) CONFIRMED THE ADDITION MADE BY TH E AO. THE ASSESSEE HAS, THUS, COME IN APPEAL BEFORE US. 4. WE HAVE HEARD THE RIVAL CONTENTIONS AND HAVE ALS O GONE THROUGH THE RECORDS. ADMITTEDLY, THE ASSESSEE IS NOT MAINTAINI NG ANY BOOKS OF ACCOUNT. THE ASSESSEE HAS EXPLAINED THE NATURE OF SOURCE OF INCOME TO THE AO THAT HE IS A SMALL TIME TRADER IN THE BUSINESS OF SELLING OF A UTO SPARE PARTS. HE HAS ALREADY RETURNED THE INCOME OF RS.2,55,633/- FROM T HE SAID BUSINESS. THE ASSESSEE HAS DISCLOSED HIS THREE ACCOUNTS BUT THE A CCOUNT WITH STANDARD CHARTERED BANK HAD NOT BEEN DISCLOSED. AFTER CONSI DERING THE OVERALL FACTS AND ITA NO.7580/M/2013 MR. HARMEET SINGH SABLOK 3 CIRCUMSTANCES OF THE CASE AND CONSIDERING THE NATUR E OF BUSINESS OF THE ASSESSEE BEING A SMALL TIME TRADER IN SALE OF AUTO SPARE PARTS, THE TRANSACTIONS RELATING TO WHICH ARE GENERALLY DEPENDING UPON CASH TRANSACTIONS BASIS, IN OUR VIEW, THE ENTIRE DEPOSIT MADE IN STANDARD CHARTERED BANK CANNOT BE ADDED AS UNEXPLAINED INVESTMENT. THE SAID DEPOSITS, IN OUR VIEW, CAN BE RELATED TO THE BUSINESS TRANSACTIONS OF THE ASSESSEE AND THE REASO NABLE INCOME OUT OF THE TOTAL DEPOSITS WAS REQUIRED TO BE ASSESSED NOT THE ENTIRE DEPOSITS AT ALL. HENCE, CONSIDERING THE OVERALL FACTS AND CIRCUMSTANCES OF THE CASE, THE ADDITIONS IN THIS RESPECT ARE RESTRICTED TO 25% OF THE TOTAL DEPOSITS OF RS.18,23,034/- IN THE STANDARD CHARTERED BANK. ORDERS ACCORDINGLY. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED IN PART. ORDER PRONOUNCED IN THE OPEN COURT ON 30.06.2015. SD/- SD/- (G.S. PANNU) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 30.06.2015. * KISHORE, SR. P.S. COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT (A) CONCERNED, MUMBAI THE DR CONCERNED BENCH //TRUE COPY// [ BY ORD ER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.