ITO 23(1)(2), MUMBAI V. BHAVIN R. SHAH, MUMBAI

ITA 7627/MUM/2012

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 88702 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 3 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-03-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 30-03-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 26-12-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PAWAN KU MAR BEERLA
• Keywords: Revised return

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUMBAI , , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER AND SHRI N.K . BILLAIYA, A CCOUNTANT M EMBER / I .T.A. NO . 7627/MUM/2012 ( / ASSESSMENT YEAR : 2008 - 09 THE ITO, WARD - 23(1)(2), PRATYANKSHAKAR BHAVAN, B.K.C. BANDRA (E), MUMBAI - 400 051 / VS. SHRI BHAVIN R. SHAH, B - 707, SAI SHRISHTI, LBS MARG, BHANDUP (W), MUMBAI - 400 078 ./ ./ PAN/GIR NO. : APEPS 9812F ( / APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY: SHRI PAWAN KUMAR BEERLA / RESPONDENT BY : NONE / DATE OF HEARING : 30 . 0 3 .2015 / DATE OF PRONOUNCEMENT : 30 .03 .2015 / O R D E R PER N.K. BILLAIYA, AM: THIS IS AN APPEAL BY THE REVENUE PREFERRED AGAINST THE ORDER OF THE LD. CIT(A) - 33, MUMBAI DT. 16.10.2012 PERTAINING TO ASSESSMENT YEAR 2008 - 09. 2. THE SOLE GRIEVANCE OF THE REVENUE IS THAT THE LD. CIT(A) WAS NOT JUSTIFIED IN DELETING THE ADDITION OF RS. 70,92,797/ - MADE U/S. 68 OF THE ACT BY THE AO. ITA. NO. 7627/M/2012 2 3. THE CASE WAS EARLIER POSTED FOR HEARING ON 9.9.2014 ON WHICH DATE THE ASSESSEE TOOK ADJOURNMENT. THE HEARING WAS SCHEDULED FOR 30.3.2015 WHICH WAS VERY MUCH IN THE KNOWLEDGE OF THE ASSESSEE. HOWEVER, NO NE ATTENDED ON BEHALF OF THE ASSESSEE THEREFORE, WE DECIDE TO PROCEED EX PARTE AFTER HEARING THE LD. DEPARTMENTAL REPRESENTATIVE. 4. THE FACTS EMERGING OUT OF THE ASSESSMENT ORDER ARE ASSESSEE IS IN THE BUSINESS OF TRADING IN PLASTIC BAGS & PACKAGING MA TERIAL. THE BOOKS OF ACCOUNTS WERE AUDITED U/S. 44AB OF THE ACT. THE ASSESSEE RETURNED INCOME AT RS.1,21,190/ - . THE RETURN WAS SELECTED FOR SCRUTINY ASSESSMENT. 4.1. DURING THE COURSE OF THE SCRUTINY ASSESSMENT PROCEEDINGS, THE ASSESSEE WAS CONFRONTE D WITH INFORMATION RECEIVED IN RESPECT OF CASH DEPOSITED TO THE TUNE OF RS 68,75,801/ - IN ICICI BANK, BANDRA (E) BRANCH, MUMBAI. THE ASSESSEE FILED A REVISED RETURN OF INCOME DECLARING ADDITIONAL INCOME OF RS. 1,50,000/ - . 4.2. THE ASSESSEE WAS ASKED TO EXPLAIN THE SOURCE OF DEPOSITS. THE ASSESSEE EXPLAINED THAT HE WAS ALSO DOING COMMISSION BUSINESS IN RESPECT OF THE SAME PRODUCTS ON WHICH HE IS ALSO TRADING. IN RESPECT OF THE SECOND BUSINESS, THE ASSESSEE CLAIMED TO HAVE A TURNOVER OF RS. 73,04,259/ - ON WHICH HE EARNED APPROXIMATELY 2% COMMISSION AND THE SAME IS OFFERED FOR TAXATION IN THE REVISED RETURN OF INCOME. THIS EXPLANATION OF THE ASSESSEE DID NOT FIND FAVOUR WITH THE AO WHO OBSERVED THAT THE ASSESSEE HAS NO EVIDENCE WHATSOEVER , T O SUBSTANTIAT E HIS CLAIM THAT HE IS DOING PARALLEL BUSINESS AS A COMMISSION AGENT AND CASH DEPOSITED IN THE ICICI BANK IS OUT OF HIS SECOND LINE OF BUSINESS. THE AO TREATED THE DEPOSIT OF RS. 70,92,787/ - AS UNDISCLOSED INCOME OF THE ASSESSEE. ITA. NO. 7627/M/2012 3 5. AGGRIEVED BY THIS, T HE ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT(A) AND REITERATED HIS CLAIM OF DOING PARALLEL BUSINESS AS A COMMISSION AGENT. BEFORE THE LD. CIT(A), THE ASSESSEE STATED THAT THERE ARE FREQUENT DEPOSITS AND WITHDRAWALS IN THE SAID BANK ACCOUNT WITH A MAX IMUM BALANCE OF RS. 3,01,470/ - . IT WAS PLEADED THAT AT THE MOST THIS AMOUNT SHOULD HAVE BEEN ADDED. AFTER CONSIDERING THE FACTS AND THE SUBMISSIONS, THE LD. CIT(A) WAS CONVINCED THAT THE ASSESSEE HAS FAILED TO ESTABLISH THAT HE EVER HAD ANY COMMISSION EA RNING ACTIVITY THEREFORE ESTIMATION OF COMMISSION INCOME @ 2% IS NOT PROPER. HOWEVER, THE LD. CIT(A) WAS OF THE OPINION THAT THE DEPOSITS IN THE BANK ACCOUNT ARE FROM THE SAME BUSINESS OF THE ASSESSEE. THE LD. CIT(A) WAS OF THE OPINION THAT IT WAS ONLY T HE TURNOVER WHICH HAS NOT BEEN DISCLOSED BY THE ASSESSEE WHEN HE HAD ALREADY DEDUCTED THE DIRECT EXPENSES IN THE PROFIT AND LOSS ACCOUNT TO ARRIVE AT NET PROFIT. THE LD. CIT(A) FURTHER OBSERVED THAT THE ASSESSEE IS SHOWING GROSS PROFIT IN THE RANGE OF 6.29 % TO 6.93%. ACCORDINGLY, HE PROCEEDED BY TAKING THE PROFIT AT 6.5% OF THE CASH DEPOSIT AND DIRECTED THE AO TO RESTRICT THE ADDITION TO RS. 4,74,775/ - . 6. AGGRIEVED BY THIS, THE REVENUE IS BEFORE US. AS MENTIONED ELSEWHERE, NONE APPEARED ON BEHALF OF THE ASSESSEE. 7. WE HAVE HEARD THE LD. DEPARTMENTAL REPRESENTATIVE AT LENGTH WHO STRONGLY SUPPORTED THE ASSESSMENT ORDER. 8. WE HAVE CAREFULLY PERUSED THE ORDERS OF THE AUTHORITIES BELOW. THE FACTS HAVE BEEN DISCUSSED BY US ELSEWHERE IN THIS ORDER. CO NSIDERING THE FACTS IN TOTALITY, WE DECLINE TO INTERFERE WITH THE FINDINGS OF THE LD. CIT(A). ITA. NO. 7627/M/2012 4 9. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. OR DER PRONOUNCED IN THE OPEN COURT ON 30 TH MARCH, 2015 SD/ - SD/ - ( JOGINDER SINGH ) (N.K. BILLAIYA) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI ; DATED : 30 TH MARCH, 2015 . . ./ RJ , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . / BY ORDER, //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI