ITO 25(2)(2), MUMBAI V. PRASHANT C. UDPIKAR, MUMBAI

ITA 759/MUM/2009

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 55539 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 8 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-10-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 04-10-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 04-02-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ALEXANDER CHANDY
• Keywords: Unexplained cash credit
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI C BENCH BEFORE SHRI T.R.SOOD, ACCOUNTANT MEMBER & SHRI VIJAY PAL RAO, JUDICIAL MEMBER I.T.A.NO.759/MUM/2009 A.Y 2005-06 INCOME TAX OFFICER 25 (2)(2), MUMBAI. VS. PRASHANT C. UDPIKAR, SADICHHA BUILDING NO.2, SHOP NO.9, SVP ROAD, NEAR GOKUL HOTEL, NEAR SHETAMBAR JAIN MANDIR, BORIVALI (W), MUMBAI 400 051. PAN: AAGPU 6579 A (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI ALEXANDER CHANDY. RESPONDENT BY : SHRI PRAKASH PANDIT. DATE OF HEARING: 4-10-2011 DATE OF PRONOUNCEMENT: 14-10-2011 O R D E R PER T.R.SOOD, AM: IN THIS APPEAL, REVENUE HAS RAISED THE FOLLOWING GR OUND: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN DELETING THE ADDITION OF RS.29,10,0 99/- MADE UNDER SECTION 68 OF THE IT ACT ON ACCOUNT OF UNEXPLAINED CASH CREDIT. 2. AFTER HEARING BOTH THE PARTIES, WE FIND THAT AO RECEIVED AIR INFORMATION IN THIS CASE THAT CASH DEPOSITS HAVE BE EN MADE BY THE ASSESSEE WITH UTI BANK LTD. (NOW AXIS BANK LTD.). H OWEVER, NOBODY ATTENDED THE PROCEEDINGS BEFORE THE AO DESPITE VARI OUS OPPORTUNITIES AND, THEREFORE, AO ADDED THE SUM OF RS.32,47,635/- U/S.68 OF THE ACT. 3. BEFORE THE LD. CIT(A) IT WAS MAINLY SUBMITTED TH AT ASSESSEE WAS WORKING AS A COMMISSION AGENT WITH SADANAND CARRIER S AND SOUTHERN TOURIST (PROPRIETOR MR. PUSHPARAJ SHETTY). THE ASSE SSEE WAS BOOKING TICKETS FOR SION, VASHI AND BORIVALI OFFICES BELONG ING TO THE ABOVE ITA NO.7 59 OF 2009 2 CARRIERS. THE ASSESSEE WAS ALSO REQUIRED TO INCUR E XPENSES ON OCTROI AND OTHER OFFICE EXPENSES ON BEHALF OF THE STATED T WO CARRIERS. THE ASSESSEE WAS ALSO MAINTAINING THE RECEIPTS OF INCOM E EARNED BY HIM ON COMMISSION BASIS. THE OCTROI PAYMENT WAS BEING MADE THROUGH CHEQUES AND IF THERE WAS SOME CASH SHORTAGE HE WOUL D RECEIVE CASH FROM SHRI P. S. SHETTY OR SHRI SAWANT AND REPAID TH E SAME BY CHEQUE. SOME BILL BOOKS WERE ALSO PRODUCED. DATE-WISE DETAI LS OF RECEIPTS AND EXPENSES WERE ALSO FILED. HOWEVER, ON A QUESTION WH ETHER THESE RECEIPTS HAVE BEEN SHOWED BY WITH SADANAND CARRIERS /SOUTHERN TOURIST, ASSESSEE SHOWED HIS IGNORANCE. SINCE FRESH DETAILS WERE FILED, LD. CIT(A) SENT THE SAME FOR THE REMAND REPORT. DUR ING REMAND PROCEEDINGS, EVEN THE STATEMENT OF SHRI P. S. SHETT Y WAS RECORDED. DURING REMAND PROCEEDING SHRI P. S. SHETTY ADMITTED THAT SHRI PRASHANT UDIPIKAR I.E. THE ASSESSEE, WAS WORKING WI TH HIM AS A COMMISSION AGENT. IT WAS ALSO ADMITTED THAT ASSESSE E WAS COLLECTING RECEIPTS FOR HIM AT BORIVALI AND OTHER OFFICES AND WAS ALSO INCURRING EXPENSES ON OCTROI AND OFFICE EXPENSES. HOWEVER, SH RI P.S.SHETTY DID NOT PRODUCE THE BOOKS OF ACCOUNTS AND PLEADED THAT SAME HAVE BEEN LOST IN THE FLOODS OF JULY, 2005. THE LD. CIT(A) AF TER EXAMINING THE REMAND REPORT, FOUND FORCE IN THE SUBMISSIONS AND D ELETED THE ADDITION VIDE PARAS 4.7 AND 4.8 WHICH ARE AS UNDER: 4.7 I HAVE GONE THROUGH THE BANK ACCOUNT NO.01601 0100157605 OF SHRI.PRASHAND UDPIKAR AND FIND THAT EVEN ADDRESS ON THIS BANK ACCOUNT IS OF SHRI.P.S.SHETTY: MR.PRASHANT C. UDPIKAR, SADANAND CARRIER,SOUTHERN TOURIST, V SHOP NO.2, RAGHUCHHAYA, GANJAWALA LANE, ITA NO.7 59 OF 2009 3 BORIVALI (WEST), MUMBAI 4.8 ABOVE DETAILS CLEARLY PROVE THAT THE APPELLANT IS AN AGENT ONLY WHO BOOKS TICKETS FOR SHRI.P.S.SHETTY AT HIS OFFICE S SITUATED AT SION, VASHI AND BORIVALI. TOTAL RECEIPTS AS PER DAY TO DA Y BILL BOOK ARE OF RS.36,53,302/-. THESE RECEIPTS ARE TO BE ADDED IN T HE INCOME OF SHRI.P.S.SHETTY, PROPRIETOR OF SADANAND CARRIERS/SO UTHERN TOURIST. A.O. IS DIRECTED TO INFORM ITO.WD.22(2) (2), MUMBAI TO ADD ABOVE INCOME IN THE HANDS OF SHRI.P.S.SHETTY IN A.Y..2005 2006. APPELLANT HAS SHOWN GROSS RECEIPTS FROM COMMISSION OF RS.4,78 ,682/- IN HIS RETURN OF INCOME ON WHICH HE HAS SHOWN NET PROFIT O F RS.L,41,146/-. AS THE APPELLANT HAS NOT TO INCUR ANY EXPENDITURE FROM HIS POCKET ON EARNING HE COMMISSION INCOME AND AS ALL THE EXPENSE S FOR HOOKING THE TICKETS ARE INCURRED BY SHRI.P.S.SHETTY, .A.O. IS DIRECTED TO ASSESS COMMISSION INCOME OF RS.4,78,682/ INSTEAD OF NET I NCOME OF RS.1,41,146/- OFFERED BY THE APPELLANT. IN VIEW OF ABOVE, ADDITION OF RS.3,37,536/- (RS.4,78,682 RS.L,41,146) IS CONFIR MED. ADDITION OF RS.29,10,099/- IS DELETED . 4. IT SEEMS ON EARLIER HEARING ON THE BASIS OF THE ABOVE OBSERVATIONS, BENCH HAD ASKED THE REVENUE TO FIND O UT WHETHER ANY ASSESSMENT HAS BEEN MADE IN THE CASE OF SHRI P.S.SH ETTY. BEFORE US, THE ASSESSMENT ORDER OF SHRI P.S.SHETTY HAS BEEN FI LED BY THE LD. DR WHICH SHOWS THAT ALL THESE RECEIPTS HAVE BEEN ADDED IN THE HANDS OF SHRI P. S. SHETTY. IN FACT, THE ASSESSMENT OF SHRI P.S. SHETTY WAS REOPENED AND ULTIMATELY AN ADDITION OF RS.36,53,302 /- HAS BEEN MADE IN THE HANDS OF SHRI P.S.SHETTY. 5. BEFORE US, LD. DR STRONGLY SUPPORTED THE ORDER O F THE AO. HE ALSO ARGUED THAT SINCE SHRI P. S. SHETTY COULD NOT PRODUCE THE BOOKS OF ACCOUNT IT IS NOT CLEAR WHETHER HE HAS OFFERED THE RECEIPTS FOR TAXATION. 6. ON THE OTHER HAND, LD. COUNSEL OF THE ASSESSEE S UBMITTED THAT THE ADMITTED POSITION IS THAT ASSESSEE IS ONLY AN A GENT OF SADANAND CARRIERS/SOUTHERN TOURIST, AND WAS COLLECTING BOOKI NG AMOUNTS ON THEIR BEHALF AND THE MONEY WAS USED FOR MAKING OCTROI PAY MENTS AND OTHER OFFICE EXPENSES. HE POINTED OUT THAT FROM THE ASSES SMENT ORDER OF SHRI ITA NO.7 59 OF 2009 4 P. S. SHETTY FILED BEFORE US BY LD. DR, IT BECOMES CLEAR THAT AN ADDITION HAS ALREADY BEEN MADE IN THE HANDS OF SHRI P.S.SHET TY. THEREFORE, ADDITION CANNOT BE MADE IN THE HANDS OF THE ASSESSE E AGAIN. HE ALSO FILED A COPY OF THE BANK ACCOUNT AND POINTED OUT HO W THE SMALL AMOUNTS HAVE BEEN DEPOSITED ON DAILY BASIS OR WITHI N A GAP OF 2/3 DAYS AND THE SAME HAVE BEEN USED BY CHEQUES. AT NO POINT OF TIME THE CREDIT IN THE BANK EXCEEDED EVEN RS.2 LAKHS AND, TH EREFORE, THERE WAS NO JUSTIFICATION FOR THE ADDITION. 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS CAREFUL LY. WE FIND THAT WHEN FRESH DETAILS WERE FILED BEFORE THE LD. CIT(A) IT WAS CLAIMED THAT ASSESSEE WAS ONLY AN AGENT OF SADANAND CARRIERS/SOU THERN TOURIST, AND ON THE BASIS OF THIS SUBMISSION A REMAND REPORT WAS SOUGHT. DURING REMAND PROCEEDINGS EVEN THE STATEMENT OF SHR I P. S. SHETTY WAS RECORDED WHEREIN HE HAS CLEARLY ADMITTED THAT A SSESSEE WAS HIS AGENT AND THE RECEIPTS WERE COLLECTED ON ACCOUNT OF BOOKINGS ON HIS BEHALF. IT WAS ALSO ADMITTED THAT MONEY WAS PAID TO WARDS OCTROI CHARGES ETC. THEREFORE, IT IS CLEAR THAT INCOME DOE S NOT BELONG TO THE ASSESSEE. FURTHER, IN ANY CASE, ASSESSMENT HAS ALRE ADY BEEN MADE IN THE HANDS OF SHRI P.S.SHETTY VIDE ASSESSMENT ORDER DATED 27-10-2010, THEREFORE, INCOME CANNOT BE ASSESSED IN THE HANDS O F THE ASSESSEE. IN ANY CASE, ONLY SMALL AMOUNTS OF CASH RANGING FROM R S.2000/- TO RS.50000/- HAS BEEN DEPOSITED ON VARIOUS DATES AND MOST OF THE MONIES HAVE BEEN WITHDRAWN THROUGH CHEQUES, WHICH A RE STATED TO BE ON ACCOUNT OF OCTROI PAYMENTS. WE ARE OF THE OPINIO N, THAT THE LD. ITA NO.7 59 OF 2009 5 CIT(A) HAS CORRECTLY HELD THAT RECEIPTS BELONGED TO SHRI P.S.SHETTY AND, THEREFORE, WE CONFIRM HIS ORDER. 8. IN THE RESULT, APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS DAY OF 1 4/10/2011. (VIJAY PAL RAO) (T.R.SOOD) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI: 14/10/2011. P/-*