HANSRAJ SAWIARAM DANGAT, MUMBAI V. DCIT CIR 12(2), MUMBAI

ITA 7992/MUM/2011

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 3540 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-05-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: H
• Next Hearing Date: 28-05-2013
• Assessment Year: 2008-2009
• Appeal Filed On: 28-11-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: C P PATHAK
• Section: 68

Judgement Text

, INCOME TAX APPELLATE TRIBUNAL,MUMBAI - H BENCH. . .. . . . . . , ,, , ! '# ! '# ! '# ! '# $!% $!% $!% $!% , '# '# '# '# BEFORE S/SH. R.K. GUPTA, JM & RAJENDRA,ACCOUNTANT MEMBER ./ ITA NO. 7992/M/2011, & & & & ' ' ' ' / ASSESSMENT YEAR 2008-09 M/S HANSRAJ SAWLARAM DANGAT, 53, DANGAT SADAN, PERIN NARIMAN STREET, FORT, MUMBAI-400001 VS. DY.COMMISSIONER OF INCOME TAX, CIRCLE 12(2), AAYKAR BHAVAN, M K ROAD, MUMBAI-400020- PAN: AABPD6466G ( () / APPELLANT) ( *+() / RESPONDENT) () () () () , , , , / APPELLANT BY : VIJAY MEHTA *+() - , /RESPONDENT BY : C.P.PATHAK & & & & - -- - ./ ./ ./ ./ / DATE OF HEARING : 28.05.2013 01' - ./ / DATE OF PRONOUNCEMENT : 28.05.2013 '2 / O R D E R PER RAJENDRA, A.M. CHALLENGING THE ORDER DT.02-09-2011 OF THE CIT(A)-1 7,MUMBAI,ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL: 1.THE ID. ASSESSING OFFICER AND LD. CIT (A) ERRED IN HOLDING THAT THE CREDITS IN COSMOS BANK AND THE ABHUDAYA CO-OP. BANK LTD. IS UNDISCLOSED. 2.THE ID. ASSESSING OFFICER AND LD. CIT (A) OUGHT T O HAVE HELD THAT THE CREDITS IN COSMOS BANK AND THE ABHUDAYA CO-OP. BANK LTD. IS EXPLAINED FOR AND DETAILED FOR. 3.THE ID. ASSESSING OFFICER AND LD. CIT (A) ERRED I N HOLDING THAT THE CREDITS IN COSMOS BANK AND THE ABHUDAYA CO-OP. BANK LTD. TOTALING TO RS. 1,09, 42,188/-IS UNEXPLAINED. 4.THE ID. ASSESSING OFFICER AND LD. CIT (A) OUGHT T O HAVE HELD THAT THE CREDITS IN COSMOS BANK AND THE ABHUDAYA CO-OP. BANK LTD. IS FULLY EXPLAINE D AND CAN NOT BE ADDED U/S. 68 OF THE I. T.ACT. 5.THE ID. ASSESSING OFFICER AND LD. CIT (A) ERRED I N INITIATING PENALTY PROCEEDING U/S. 27L(1)(C). 6.THE ID. ASSESSING OFFICER AND LD. CIT (A) OUGHT T O HAVE HELD THAT THERE IS NO CONCEALING/FURNISHING INACCURATE PARTICULARS OF IN COME. 2 ITA NO. 7992/M/2011 7.THE APPELLANTS EXPLANATION WAS NOT PROPERLY CONS IDERED AND WAS NOT APPRECIATED BY LD. A.O AND LD. CIT (A). 8.THE LD. A.O. AND CIT (A) OUGHT TO HAVE CONSIDERED FULL DETAILS AND EXPLANATION OF CASH DEPOSIT ENTRIES IN COSMOS BANK AND THE ABHUDAYA CO-OP. BANK LTD. THE APPELLANT HAS FILED ALL THE DETAILS CALLED FOR WITH BOTH THE AUTHORITIES VIZ LD . A.O. AND CIT(A). 9.THE LD. AO OUGHT TO HAVE POINTED OUT AS TO WHY TH E ADDITION OF CASH AND OTHER DEPOSITS ARE MADE WHEN THE DETAILS ARE FURNISHED BY THE APPELLAN T. 2. ASSESSEE, AN INDIVIDUAL, DERIVES SALARY FROM DANGA T MEDIA PVT LTD. AND SHARE OF PROFIT FROM M/S DANGAT NEWSPAPER AGENCY. HE FILED E-RET URN OF INCOME ON 29-03-2009 DECLARING TOTAL INCOME OF RS.15.10 LAKHS. ASSESSMENT WAS F INALIZED BY THE ASSESSING OFFICER(AO) ON 24.12.2010 DETERMINING THE TOTAL INCOME OF THE ASS ESSEE AT RS.1.24 CRORES. DURING THE ASSESSMENT PROCEEDINGS AND ON THE BASIS OF AIR INF ORMATION, THE AO FOUND THAT THE CASH AMOUNTING TO RS.1.09 CRORES WAS DEPOSITED IN FOLLO WING THREE BANKS : I) THE COSMOS BANK RS.49,42,000/- II) THE COSMOSS BANK RS.18,06,888/- AND III) THE ABHUDAY CO-OP.BANK RS.41,93,300/- AFTER CONSIDERING THE EXPLANATION OF THE ASSESSEE IN THIS REGARD, THE AO HELD THAT THE EXPLANATION OFFERED BY THE ASSESSEE IS ABSURD AND ILLOGICAL, DEFIES ALL THE LOGIC, THAT THE ASSESSEE HAD NOT GIVEN ANY SATISFACTORY REASON TO PROVE TH AT THE SAID AMOUNTS WERE DEPOSITED OUT OF CASH WITHDRAWALS, THAT ALL THE WITHDRAWALS ARE FROM COSM OS BANK, MUMBAI AND DEPOSITS WERE MADE IN COSMOS BANK, MUMBAI AND PUNE AND ABHYUDAYA BANK, MUMBAI, THAT THE ASSESSEE WAS NOT ABLE TO GIVE ANY CONVINCING REASONS FOR NOT TRANSF ERRING THE SAID AMOUNT ELECTRONICALLY, THE EXPLANATION GIVEN BY THE ASSESSEE WAS UNCONVINCING AND DESERVES TO BE REJECTED. HE FINALLY HELD THAT THE ASSESSEE FAILED TO PROVE CONCLUSIVELY THA T THE CASH DEPOSITED WAS OUT OF WITHDRAWALS AND THE TOTAL AMOUNT OF CASH DEPOSITED WAS TREATE D AS THE INCOME OF THE ASSESSEE FROM UNDISCLOSED SOURCES RELYING ON THE FOLLOWING DECISI ONS: I) SUMATHI DAYAL V/S CIT 214 ITR 801 (SC) II) VASANTBHAI & SHAH V/S CIT 213 ITR 805 (BOM) III) SHREE LEKHA BANERJEE AND OTHERS V/S CIT 49 ITR 11 2 (SC) THE AO HELD THAT THE AMOUNT IN QUESTION WAS UNEXPLA INED INCOME OF THE ASSESSEE, THAT ASSESSEE HAD NOT PROVED THE GENUINENESS OF TRANSACTIONS. H E ADDED RS.1.09 CRORES TO THE TOTAL INCOME OF THE ASSESSEE U/S 68 OF THE INCOME TAX ACT, 1961( THE ACT). THE ASSESSEE PREFERRED AN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY (FAA). AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE AND THE ASSESSMENT ORDER, THE FAA HELD THAT THE AS SESSEE HAD NOT SHOWN CLEAR NEXUS BETWEEN THE WITHDRAWALS AND DEPOSITS, THAT CASH HAD BEEN FO UND WITHDRAWN FROM MUMBAI AND DEPOSITED IN PUNE, THAT NO SATISFACTORY EXPLANATION FOR THE S AME WAS PROVIDED, THAT NO REASON FOR CONTINUOUS WITHDRAWALS IN CASH AND DEPOSITS WAS SH OWN BY THE ASSESSEE, THAT NEXUS BETWEEN WITHDRAWAL AND DEPOSITS WAS NEVER OFFERED, IT WAS N OT FOR THE AO TO DISPROVE THE CASH AND 3 ITA NO. 7992/M/2011 DEPOSITS, THAT THE ONUS LAYS UPON THE ASSESSEE TO PROVE THE GENUINENESS OF TRANSACTIONS, THE CYCLES OF CASH DEPOSITS AND CASH WITHDRAWALS HAD BEEN REPEATED MANY A TIMES. FINALLY CONFIRMED THE ADDITIONS MADE BY THE AO. 3. BEFORE US, AUTHORIZED REPRESENTATIVE (AR) SUBMITT ED THAT FAA UPHELD THE ADDITION OF TOTAL DEPOSITS OF ALL THE THREE BANKS, THAT TELESC OPING UNEXPLAINED DEPOSITS WAS NOT CONSIDERED BY THE AO AND FAA, THAT THERE WERE WITHDRAWALS AG AINST THE DEPOSITS, THAT BANK PASS BOOKS WERE CONSIDERED BY THE REVENUE AUTHORITIES. 4. DEPARTMENTAL REPRESENTATIVE SUPPORTS THE ORDERS OF THE REVENUE AUTHORITIES. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSE D THE MATERIAL BEFORE US. IT IS FOUND THAT DURING THE ASSESSMENT PROCEEDINGS THE ASSESSEE HAD PRODUCED BANK / PASS BOOKS BEFORE THE AO AND ADMITTED THAT CASH OF RS.11.26 LAKHS, OUT O F RS.1.09 CRORES, COULD NOT EXPLAINED BY HIM. IT IS NOT KNOWN ON WHAT BASIS HE ARRIVED AT A FIG URE OF RS.11.26 LAKHS. WE FIND THAT THE AO HAD REJECTED THE CLAIM MADE BY THE ASSESSEE. WE FI ND THAT THE ASSESSEE HAD THREE BANK ACCOUNTS (INCLUDING ONE IN THE NAME OF HIS SON) WHERE WITH DRAWALS AND DEPOSITS TOOK PLACE. 6. AS PER THE PRINCIPLES OF TAXATION LAW, TELESCOPY I S ONE OF THE RECOGNIZED METHOD OF CALCULATING THE TAX LIABILITY OF THE ASSESSEE. WHE NEVER AND WHEREVER A SERIES OF CASH TRANSACTIONS TAKE PLACE IN A PARTICULAR OF YEAR AND THE EXPLANATION OFFERED BY THE ASSESSEE IS NOT FOUND SATISFACTORY PEAK OF THE AMOUNT IS CALCULATE D TO DETERMINE THE EXACT AMOUNT TO BE ADDED TO THE TOTAL INCOME OF THE ASSESSEE AS PER THE PROV ISIONS OF ACT. WE FIND THAT THE AO HAD NOT CONSIDERED THE PRINCIPLES OF TELESCOPY WHILE MAKIN G ADDITION OF RS.1.09 CR. IN OUR OPINION, IN THE CASE UNDER CONSIDERATION, IN THE INTERESTS OF J USTICE MATTER NEEDS TO BE RESTORED BACK TO THE FILE OF THE AO. HE IS DIRECTED TO FOLLOW THE PRINCIPLE S OF TELESCOPY OF INCOME /CALCULATE THE PEAK WHILE DETERMINING THE INCOME OF THE ASSESSEE. HE I S DIRECTED TO OFFER A REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE. GROUND NOS.1 TO 4 AND 7 TO 9 ARE DECIDED IN FAVOUR OF THE ASSESSEE IN PART. 7. GROUND NOS.5 AND 6 ARE ABOUT INITIATING PENALTY PR OCEEDINGS U/S 271(1)( C) OF THE ACT FOR CONCEALING /FURNISHING INACCURATE PARTICULARS O F INCOME. IN OUR OPINION IT WOULD BE PRE- MATURED AT THIS STAGE TO DECIDE THESE GROUNDS. GRO UND NOS. 5 AND 6 STAND DISMISSED. 8 AS A RESULT, APPEAL FILED BY THE ASSESSEE STANDS PA RTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 28TH MAY,2013 '2 - 01' ! 4 5'& 28 , 2013 1 - ; SD/- SD/- ( . .. . . . . . , ,, , ) ( $!% $!% $!% $!% / RAJENDRA ) ! ! ! ! '# '# '# '# / JUDICIAL MEMBER '# '# '# '# /ACCOUNTANT MEMBER 4 ITA NO. 7992/M/2011 / MUMBAI, 5'& /DATE: 28-05-2013 SRL: '2 '2 '2 '2 - -- - *.< *.< *.< *.< =<'. =<'. =<'. =<'./ COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE / () 2. RESPONDENT / *+() 3. THE CONCERNED CIT (A) / > ? 4. THE CONCERNED CIT / > ? 5. DR B BENCH, ITAT, MUMBAI / <@ *.& , . . ! . 6. GUARD FILE/ A +<. *. // TRUE COPY// '2& / BY ORDER, B/C $ DY./ASST. REGISTRAR , /ITAT, MUMBAI