Murkute Bhanudas Kashinath, Ahmednagar V. Income-tax Officer,

ITA 777/PUN/2016

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 1618 (ITAT-PUNE)
• Duration Of Justice: 2 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2004-2005
• Appeal Filed On: 20-04-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: HITENDRA NINAWE
• Assessee Lawyers: S N DOSHI
• Section: 143(3); 142(1); 69; 148

Judgement Text

- IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH SMC , PUNE , BEFORE MS. SUSHMA CHOWLA, JM . / ITA NO. 777 /PN/201 6 / ASSESSM ENT YEAR : 20 0 4 - 0 5 MURKUTE BHANUDAS KASHINATH CHHATRAPATI SHIVAJI MAHARAJ SANKUL MARKET YARD, KOTHI ROAD, AHMEDNAGAR 414001 . / APPELLANT PAN: A BIPM6110C VS. THE INCOME TAX OFFICER , THE INCOME TAX OFFICER , WARD - 1, A HMEDNAGAR . / RESPONDEN T / APPELLANT BY : SHRI S.N. DOSHI / RESPONDENT BY : SHRI HITENDRA NINAWE / DATE OF HEARING : 29 . 0 6 .201 6 / DATE OF PRONOUNCEMENT: 30 . 0 6 .201 6 / ORDER PER SUSHMA CHOWL A, J M : TH IS APPEAL FILED BY THE ASSESSEE IS AGAINST THE ORDER OF CIT (A) - 2 , PUNE , DATED 0 7 . 03 .20 1 6 RELATING TO ASSESSMENT YEAR 20 0 4 - 0 5 AGAINST ORDER PASSED UNDER SECTION 143(3) OF THE INCOME - TAX ACT , 1961 (IN SHORT THE ACT) . ITA NO. 777 /PN/20 1 6 MURKUTE BHANUDAS KASHINATH CHHATRAPATI SHIVAJI MAHARAJ SANKUL MARKET YARD 2 2 . THE ASSESSEE HAS RAISED TH E FOLLOWING GROUND OF APPEAL: - 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE CIT(A) HAS ERRED IN CONFIRMING THE ADDITION OF RS.15,085/ - BEING UNEXPLAINED OPENING CASH BALANCE AND RS.1,82,331/ - BEING UNEXPLAINED OPENING BANK BALANCE, WITHOUT APP RECIATING THE FACT THAT THIS DIFFERENCE IN OPENING BALANCES PERTAINS TO EARLIER YEAR AND HENCE NO ADDITION IS WARRANTED IN THIS ASSESSMENT YEAR. 3. THE ISSUE RAISED IN THE PRESENT APPEAL IS AGAINST ADDITION OF RS.15,085/ - BEING UNEXPLAINED OPENING CASH B ALANCE AND RS. 1,82,331/ - BEING UNEXPLAINED OPENING BANK BALANCE. 4. BRIEFLY, IN THE FACTS OF THE CASE, THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION HAD FILED THE RETURN OF INCOME DECLARING TOTAL INCOME OF RS. 2,12,243/ - . THE CIT - I, PUNE VIDE LETTER DATED 15.06.2007 DIRECTED THE ASSESSING OFFICER TO VERIFY THE INVESTMENTS DECLARED IN AFFIDAVIT BY THE ASSESSEE BEFORE ELECTION COMMISSION AND TAKE NECESSARY ACTION. CONSEQUENTLY, NOTICE UNDER SECTION 148 OF THE ACT WAS ISSUED AND THEREAFTER, CONSEQUENTLY, NOTICE UNDER SECTION 148 OF THE ACT WAS ISSUED AND THEREAFTER, NOTICES UNDER SEC TIONS 143(2) AND 142(1) OF THE ACT WERE ISSUED. THE ASSESSEE WAS EX - MLA AND WAS ALSO ENGAGED IN THE PROFESSION AS A PRACTICING CHARTERED ACCOUNTANT. HE HAD DECLARED PENSION INCOME OF EX - MLA, PROFESSION AL INCOME OF CA AND ALSO INCOME FROM AGRICULTURE. IN THE DECLARATION, THE ASSESSEE HAD SHOWN INVESTMENT OF FD OF RS. 12,72,585/ - AND TOTAL INVESTMENT IN FD AS PER CASH ACCOUNT WORK ED OUT TO RS. 12,14,,402/ - AND THERE WAS DIFFERENT OF RS.58,183/ - . THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE COULD N OT RECONCILE THE DIFFERENCE AND THE SAME WAS TREATED AS INCOME OF THE ASSESSEE UNDER SECTION 69 OF THE ACT. FURTHER, THERE WAS DIFFERENCE IN THE DECLARATION OF SAVINGS ACCOUNT TO THE TUNE OF RS.42/ - , WHICH WAS ADDED TO THE TOTAL INCOME. FURTHER, IN THE A FFIDAVIT FILED, THE CASH BALANCE WAS DECLARED AT RS.10,761/ - . HOWEVER, IN THE RETURN OF INCOME IN PERSONAL ITA NO. 777 /PN/20 1 6 MURKUTE BHANUDAS KASHINATH CHHATRAPATI SHIVAJI MAHARAJ SANKUL MARKET YARD 3 CASH ACCOUNT, THE SAME WAS SHOWN AT RS.450/ - . ON VERIFICATION, THE ASSESSING OFFICER NOTED THAT THE DECLARATION WAS DATED 06.04.2004 AND THE BALANC E AS PER RETURN DATED 31.03.2004, HENCE THE DIFFERENCE OF RS.1,194/ - WAS ADDED. ANOTHER ADDITION MADE IN THE HANDS OF ASSESSEE WAS ON ACCOUNT OF ADVANCES GIVEN TO WORLI CO - OP HOUSIN G SOCIETY. ALL THESE ADDITIONS REFERRED TO ARE NOT THE SUBJECT OF APPEAL BEFORE THE TRIBUNAL. THE ISSUE RAISED BEFORE THE TRIBUNAL IS IN RESPECT OF CLOSING CASH BALANCE AND BANK BALANCE SHOWN IN THE CASH ACCOUNT FURNISHED FOR FINANCIAL YEAR 2002 - 03 WITH REFERENCE TO FINANCIAL YEAR 2003 - 04. THE ASSESSING OFFICER NOTED THAT THE CASH IN HAND AS ON 31.03.2003 WAS RS.1,237/ - AND THE OPENING CASH IN HAND AS ON 01.04.2003 WAS RS.16,322/ - AND THERE WAS DIFFERENCE OF RS.15,085/ - . FURTHER, THERE WAS DIFFERENCE IN THE BANK BALANCES SHOWN BY THE ASSESSEE WHICH TOTALED TO RS.1,82,331/ - AS TABULATED AT PAGE 4 OF THE ASSESSMENT ORDER. THE ASSESSING OFFICER THUS, INCLUDED SUM OF RS.15,085/ - ON ACCOUNT OF CASH DIFFERENCE AND RS.1,82,331/ - ON ACCOUNT OF BANK BALANCES DIFFERENCE AS INCOME OF THE ASSESSEE. 5. THE CIT(A) UPHELD THE ORDER OF ASSE SSING OFFICER, AGAINST WHICH THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 6. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE SUB MITTED THAT THE CLOSING BALANCES HAVE BEEN TAKEN OF THE PROFESSIONAL ACCOUNT OF THE ASSESSEE UNDER THE NAME AND STYLE OF M/S. B.K. MURKUTE & CO. FOR THE YEAR 2002 - 03. HOWEVER, THE OPENING BALANCES REFERRED TO BY THE ASSESSING OFFICER WERE ON ACCOUNT OF PERSONAL BALANCE SHEET OF THE ASSESSEE PREPARED FOR THE PERIOD 01.04.2003 TO 31.03.2004. THE LEARNED AUTHORIZED REPRESE NTATIVE FOR THE ASSESSEE FAIRLY ADMITTED THAT NO PERSONAL BALANCE SHEET WAS PREPARED BY ITA NO. 777 /PN/20 1 6 MURKUTE BHANUDAS KASHINATH CHHATRAPATI SHIVAJI MAHARAJ SANKUL MARKET YARD 4 THE ASSESSEE FOR THE PERIOD ENDING 31.03.2003. ATTENTION WAS DRAWN TO THE RESPECTIVE BANK ACCOUNTS WHICH WERE HELD AS PERSONAL ACCOUNT BY THE ASSESSEE, COPIES OF WHICH ARE PLACED AT PAGES 11 TO 12 OF THE PAPER BOOK AND IT WAS POINTED OUT THAT THE PERUSAL OF SAID BANK ACCOUNT WOULD REFLECT THAT THE OPENING BALANCES SHOWN BY THE ASSESSEE ARE AS SHOWN IN THE BANK ACCOUNT. HENCE, NO ADDITION COULD BE MADE DURING THE YEAR I N RESPECT OF THE SAID BANK BALANCES IN THE HANDS OF ASSESSEE, WHICH RELATE TO THE PRECEDING YEAR. IN RESPECT OF OPENING CASH IN HAND, HE SUBMITTED THAT HE COULD NOT FURNISH ANY EXPLANATION EXCEPT STATING THAT THIS WAS THE OPENING CASH IN HAND IN HIS PERSO NAL ACCOUNT. 7. THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE PLACED RELIANCE ON THE ORDERS OF AUTHORITIES BELOW. 8. ON PERUSAL OF RECORD AND VARIOUS EVIDENCES FILED BY THE ASSESSEE, THE CONTENTION OF ASSESSEE IS THAT IT WAS CARRYING ON HIS P ROFESSIONAL ACTIVITY AND FOR THE YEAR UNDER CONSIDERATION, IT HAD ALSO INCOME FROM OTHER SOURCES FOR WHICH, IT PREPARED A PERSONAL BALANCE SHEET. THE ASSESSING OFFICER WHILE COMPLETING THE ASSESSMENT HAD COMPARED THE CLOSING BALANCE FOR THE FINANCIAL YEAR 2002 - 03 IN THE PROFESSIONAL ACCOUNT WITH THE OPENING BALANCE OF THE CASH IN HAND AND CASH AT BANK HELD IN THE PERSONAL ACCOUNT BY THE ASSESSEE. IN THE FIRST INSTANCE, THERE IS NO MERIT IN THE AFORESAID COMPARISON MADE BY THE ASSESSING OFFICER. THE CASH IN HAND DECLARED AT RS.1,237/ - AND THE CASH AT BANK DECLARED AT RS.54,539/ - IS IN RESPECT OF PROFESSION AL ACTIVITIES CARRIED ON BY THE ASSESSEE AND THE SAME IS NOT COMPARABLE TO THE PERSONAL ACCOUNT. FOR THE YEAR UNDER CONSIDERATION, THE ASSESSEE HAS FURN ISHED THE BALANCE SHEET IN RESPECT OF ITS PERSONAL ASSETS, WHICH INCLUDE THREE BANK ACCOUNTS IN ASHOK SAHAKARI BANK, ITA NO. 777 /PN/20 1 6 MURKUTE BHANUDAS KASHINATH CHHATRAPATI SHIVAJI MAHARAJ SANKUL MARKET YARD 5 SBI, SHRIRAMPUR AND SBI, MUMBAI. THE COPIES OF BANK ACCOUNTS MAINTAINED BY THE ASSESSEE IN PERSONAL ACCOUNTS ARE FURNISHED AT PAGES 8 TO 1 4 OF THE PAPER BOOK. THE PERUSAL OF THE AFORESAID BANK ACCOUNTS REFLECT THAT CLOSING BALANCE AS ON 31.03.2003 IN ASHOK SAHAKARI BANK ACCOUNT IS RS.2,21,050.55, IN SBI, SHRIRAMPUR ACCOUNT IS RS. 10,141.91 AND IN SBI, MUMBAI ACCOUNT IS RS.1,167.16. THE SAID BANK BALANCES WERE DECLARED BY THE ASSESSEE AS OPENING CASH AT BANK IN ITS PERSONAL BALANCE SHEET. WHILE MAKING THE ASSESSMENT FOR THE FINANCIAL YEAR 2003 - 04 , NO ADDITION CAN BE MADE ON ACCOUNT OF OPENING BANK BALANCE I.E. THE CLOSING BALANCE AS ON 31.03 .2003. T HE ADDITION IF ANY, IS TO BE MADE IN THE FINANCIAL YEAR 2002 - 03. ACCORDINGLY, THERE IS NO MERIT IN THE ADDITION MADE IN THE HANDS OF ASSESSEE ON ACCOUNT OF DIFFERENCE IN BANK BALANCE AT RS. 1,82,331/ - . 9. THE NEXT ADDITION MADE IN THE HANDS OF AS SESSEE WAS ON ACCOUNT OF CASH IN HAND OF RS.15,085/ - . ADMITTEDLY, WHERE THE ASSESSEE IS MAINTAINING SEPARATE BALANCE SHEETS FOR ITS PROFESSIONAL ACCOUNT AND FOR ITS PERSONAL ACCOUNT, THE TWO ACCOUNTS HAVE TO BE TAKEN SEPARATELY. THE CLOSING BALANCES FOR THE FINANCIAL YEAR 2002 - 03 IN THE PROFESSIONAL ACCOUNT WAS RS.1,237.42 WHICH HAS BEEN CARRIED FORWARD BY THE ASSESSEE IN THE PROFESSIONAL ACCOUNT IN THE YEAR UNDER APPEAL. HOWEVER, IN HIS PERSONAL ACCOUNT, HE HAS DECLARED OPENING CASH IN HAND OF RS. 16,322 .92. THE ASSESSEE ADMITTEDLY, HAS NOT PREPARED ANY BALANCE SHEET FOR THE EARLIER YEAR AND IN THE ABSENCE OF THE SAME, THERE IS NO EVIDENCE WITH THE ASSESSEE TO PROVE THAT IT HAD CASH IN HAND TO THE TUNE OF RS.16,322.92 AS OPENING CASH IN HAND. IN THE ABS ENCE OF THE SAME, ADDITION TO THAT EXTENT IS TO BE MADE IN THE HANDS OF ASSESSEE. HOWEVER, THE ASSESSING OFFICER HAS MADE AN ADDITION OF RS.15,085/ - IN THE HANDS OF ITA NO. 777 /PN/20 1 6 MURKUTE BHANUDAS KASHINATH CHHATRAPATI SHIVAJI MAHARAJ SANKUL MARKET YARD 6 ASSESSEE, HENCE, I CONFIRM THE ADDITION TO THE EXTENT OF RS.15,085/ - . THE GROUNDS OF APPE AL RAISED BY THE ASSESSEE ARE THUS, PARTLY ALLOWED. 1 0 . IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED ON THIS 30 TH DAY OF JUNE , 201 6 . SD/ - (SUSHMA CHOWLA) / JUDICIAL MEMBER / PUNE ; DATED : 30 TH JUNE , 201 6 . GCVSR / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT ; 2. / THE RESPONDENT; 3. ( ) / THE CIT (A) - 2 , PUNE ; 3. ( ) / THE CIT (A) - 2 , PUNE ; 4. / THE PR. CIT - 1 , PUNE ; 5. 6. , , , - / DR SMC , ITAT, PUNE; / GUARD FILE . / BY ORDER , // TRUE COPY // / SR. PRIVATE S ECRETARY , / ITAT, PUNE