HATKIMMUDIN MANSOORALI PLASTICWALA, MUMBAI V. ITO 13(1)(3), MUMBAI

ITA 7623/MUM/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 2693 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-07-2016
• Appeal Filed By: Assessee
• Bench Allotted: H
• Assessment Year: 2010-2011
• Appeal Filed On: 22-12-2014
• Court: TRIBUNAL
• Keywords: Business income
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL H , BENCH MUMBAI BEFORE SHRI R.C.SHARMA, AM & SHRI SANDEEP GOSAIN , JM ITA NO. 7623 / MUM/20 1 4 ( ASSESSMENT YEAR : 2010 - 11 ) SHRI HAKIMUDDIN MANSOORALI PLASTICWALA, SHOP NO.14/C, GROUND FLOOR, ARADHANA BUILDING, D HOBI STREET, MASJID BUNDER, MUMBAI 400 003 VS. TO 13(1)(3), MUMBAI PAN/GIR NO. AACPP1052B APPELLANT ) .. RESPONDENT ) ASSESSEE BY SHRI BHADRESH DOSHI REVENUE BY SHRI ABHISHEK SHARMA DATE OF HEARING 26 /0 7 /2016 DATE OF PR ONOUNCEME NT 26 /0 7 /2016 / O R D E R PER R.C.SHARMA (A.M) : THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A) FOR THE ASSESSMENT YEARS 2010 - 11, IN THE MATTER OF ORDER PASSED U/S.143(3) OF THE IT ACT. 2. THE ONLY GRIEVANCE OF AS SESSEE RELATES TO ADDITION OF RS.26,31,197/ - IN RESPECT OF AMOUNT DEPOSITED IN THE SAVING BANK ACCOUNT. 3. WE HAVE HEARD THE RIVAL CONTENTIONS AND CAREFULLY GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. 4. IT IS OBSERVED FROM THE RECORDS THAT ASSESSING OFFICER HAD RECEIVED INFORMATION FROM THE AIR SYSTEM OF THE DEPARTMENT THAT ASSESSEE HAD ITA NO. 7623/2014 SHRI HAKIMUDDIN MANSOORALI PLASTICWALA 2 DEPOSITED CASH OF RS. 32,35,539/ - IN HIS BANK ACCOUNT WITH ICICI BANK DURING THE FINANCIAL YEAR RELEVANT TO AY 2010 - 11 AND ASKED THE ASSESSEE TO EXPLAIN THE SOURCE OF CREDITS TOTALLING RS. 32,35,539/ - IN THE BANK ACCOUNT. ASSESSEE SUBMITTED THE CASH BOOK WHICH SHOWED CASH RECEIPTS OF RS. 55,79,993/ - FROM VARIOUS PARTIES, VIZ., SUNDRY DEBTORS AND ITS SUBSEQUENT DEPOSITS OF RS. 43,01,600/ - IN THE BANK ACCOUNT WITH BOMBAY MERCANTILE COOPERATIVE BANK LIMITED (BMC) AND EXPLAINED THAT HE HAD EFFECTED CASH SALES OF RS. 80,06,138/- DURING THE YEAR OUT OF WHICH RS. 61,77,057/ - REPRESENTED CASH SALES AND BALANCE AMOUNT REPRESENTED CREDIT SALES. HE ALSO SUBMITTED THAT OUT OF THE C ASH SALES, HE HAD DEPOSITED RS. 24,78,556/ - IN ICICI BANK WHICH WAS WITHDRAWN OVER A PERIOD OF TIME AND RE - DEPOSITED IN CASH BOOK OF SUPER PLASTIC CORPORATION. IN ANOTHER SUBMISSION ASSESSEE STATED THAT THE COLLECTIONS FROM DEBTORS FIRST COME TO ICICI BANK ACCOUNT AND THEN THE SAME IS WITHDRAWN AND RE - DEPOSITED IN BMC BANK AND THEREFORE THE ENTIRE DEPOSITS CANNOT BE TREATED AS CASH CREDITS AND ONLY PEAK CASH CREDITS SHOULD BE TAXED. ASSESSING OFFICER DID NOT ACCEPT ASSESSEE'S CONTENTION AND ADDED THE SUM OF RS. 26,31/1971 - AS UNEXPLAINED CASH C REDITS U/S. 68 OF I T. ACT, 1961. 5. BY THE IMPUGNED ORDER CIT(A) CONFIRMED THE ACTION OF THE AO AGAINST WHICH ASSESSEE IS IN FURTHER APPEAL BEFORE US. 6. WE HAVE CONSIDERED RIVAL CONTENTIONS AND FOUND FROM RECORD THAT D URING THE YEAR UNDER CONSIDERATION , THE ASSESSEE WAS ENGAGED INTO THE PROPRIETARY BUSINESS IN THE NAME OF M/S. SUPER PLASTIC CORPORATION AND ITA NO. 7623/2014 SHRI HAKIMUDDIN MANSOORALI PLASTICWALA 3 WAS ENGAGED IN THE BUSINESS OF MANUFACTURING OF PVC RAIN COATS, RAIN SUITS, REVERSIBLE SUITS, PVC ALE JURKING. HE DECLARED BUSINESS PROFITS OF . 6,38,009/ - AND ALSO OTHER INCOME OF 60 6/ - IN HIS RETURN OF INCOME. 'DURING THE YEAR UNDER CONSIDERATI ON AMONG VARIOUS BANK ACCOUNTS THE ASSESSEE WAS MAINTAINING A SAVINGS BANK ACCOUNT WITH LCICI BANK LTD. HAVING ACCOUNT NO. 623501141048. IN THIS PARTICULAR BANK ACCOUNT, THE ASSESSEE HAD WITHDRAWN CASH FROM TIME TO TIME AND ALSO DEPOSITED CASH INTO IT FROM TIME TO TIME. THE TOTAL CASH WITHDRAWN FROM THIS BANK ACCOUNT BY THE ASSESSEE WAS 25,70,300/ - AND TOTAL CASH DEPOSITED IN TO THIS BANK ACCOUNT BY THE ASSESSEE WAS 23,01,870/ - . 7. WE ALSO FOUND THAT T HE ASSESSEES TOTAL SALES DURING THE YEAR UNDER CONSIDERATION WAS 80,06,138/ - O UT OF WHICH CASH SALES WERE 61,77, 057/ - AND THE BALANCE SALES OF 1 8,2 9, 081/ - WERE ON CREDITS. OU T OF SUCH TOTAL CASH SALES OF 61 ,77,0 57/ - , THE CASH WERE DEPOSITED FIRST INTO THE S A ID BANK ACCOUNT MAINTAINED WITH ICICI BANK LTD. EITHER DIRECTLY BY THE CUSTOMERS OR BY THE ASSESSEE . THEREAFTER, THE CASH WERE WITHDRAWN BY THE ASSESSEE FROM THE SAID BANK ACCO UNT MAINTAINED WITH LCIC I BANK LTD. FROM TIME TO TIME AND SUCH CASH WERE RE - DEPOSITED INTO THE CURRENT ACCOUNT OF THE ASSESSEE MAINTAINED WITH BOMBAY MERCANTILE CO - OPERATIVE BANK LTD. 8. FROM THE RECORD WE FOUND THAT ASSESSEE HAS MADE BOTH DEPOSIT AND WITH DRAWAL FROM THE BANK ACCOUNT AND HAD ALSO CASH RECEIVED IN RESPECT OF CASH SALES AS WELL AS DEBTORS. CASH WAS DEPOSITED IN BANK ACCOUNT AS WELL AS WITHDRAWN FROM THE BANK ACCOUNT. IN SOME INSTANCES, THE CASH ITA NO. 7623/2014 SHRI HAKIMUDDIN MANSOORALI PLASTICWALA 4 WITHDRAWN FROM ONE BANK ACCOUNT WAS DEPOSITED I N OTHER BANK ACCOUNT. UNDER THESE CIRCUMSTANCES, WE DIRECT THE ASSESSEE TO FILE CONSOLIDATED CASH FLOW STATEMENT SO AS TO JUSTIFY AVAILABILITY OF CASH AT THE TIME OF DEPOSIT. AS PER THE CASH FLOW STATEMENT SO SUBMITTED BY ASSESSEE, THE AO IS DIRECTED TO MA KE ADDITION ONLY WITH RESPECT OF PE A K AMOUNT OF CREDIT IN THE BANK ACCOUNT, WHICH WILL SERVE THE INTEREST OF JUSTICE. ACCORDINGLY, THE MATTER IS RESTORED BACK TO THE FILE OF THE AO TO VERIFY CASH FLOW STATEMENT AND RESTRICT THE ADDITION TO THE EXTENT OF PE A K CREDIT ONLY. WE DIRECT ACCORDINGLY. 9. IN THE RESULT, APPEAL IS ALLOWED IN PART FOR STATISTICAL PURPOSES. O RDER PRONOUNCED IN THE OPEN COURT ON THIS 26 /0 7 /2016 S D/ - ( SANDEEP GOSAIN ) S D/ - ( R.C.SHARMA ) JUDICIAL ME MBER ACCOUNTANT MEMBER MUMBAI ; DATED 09 / 11 /201 6 KARUNA SR. PS 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//