RAKUMAR U. HEMNANI, MUMBAI V. ITO 19(3)(2), MUMBAI

ITA 8707/MUM/2010

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 8704 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-10-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2007-2008
• Appeal Filed On: 13-12-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A B KOLI
• Keywords: Source of fund
• Section: 131

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH D MUMBAI BEFORE SHRI D.MANMOHAN,VICE PRESIDENT AND SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER ITA NO. 8707/MUM/2010 ASSESSMENT YEAR- 2007-08 SHRI RAJKUMAR U. HEMNANI, 29/33, SAGAR KIRAN, K.C. ROAD, BANDRA RECLAMATION, BANDRA (W), MUMBAI-400 050 PAN AAAPH4499L VS. THE ITO 19(3)(2), MUMBAI (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI RATAN SAMAL RESPONDENT BY: SHRI A.B. KOLI DATE OF HEARING :09.10.2012 DATE OF PRONOUNCEMENT: 12.10.2012 O R D E R PER N.K. BILLAIYA, AM: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF LD. CIT(A)- 30, MUMBAI DT.30.9.2010 PERTAINING TO ASSESSMENT Y EAR 2007-08. 2. THE SUM AND SUBSTANCE OF THE ASSESSEES GRIEVANC E IS THAT THE LD. CIT(A) ERRED IN SUSTAINING THE ADDITION OF RS. 22,6 5,000/- MADE BY THE AO U/S. 69A OF THE ACT. 3. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT FO R THE YEAR UNDER CONSIDERATION, THE ASSESSEE FILED RETURN OF INCOME AT RS. 1,23,154/-. THE RETURN WAS SELECTED FOR SCRUTINY ASSESSMENT AND ACC ORDINGLY STATUTORY NOTICES WERE ISSUED AND SERVED UPON THE ASSESSEE. 4. DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER CONFRONTED THE ASSESSEE WITH THE AIR INFORM ATION BY WHICH THE ASSESSEE HAS SHOWN TO HAVE DEPOSITED CASH TOTALING TO RS. 21,66,000/- IN THE ITA NO. 8707/M/2010 2 SAVING BANK ACCOUNT OF THE MAHANAGAR CO. OP. BANK L TD. , LALBAUG BRANCH DURING THE PERIOD RELEVANT FOR THE YEAR UNDER CONSI DERATION. THE ASSESSEE WAS ASKED TO FURNISH COPY OF THIS SAVINGS BANK ACCO UNT AND ALSO TO EXPLAIN THE SOURCES OF INCOME FROM WHICH THESE CASH DEPOSIT S ARE MADE. THE ASSESSEE FILED A DETAILED REPLY STATING THAT THE SA VINGS BANK ACCOUNT NO. 38325 MAINTAINED WITH THE MAHANAGAR CO. OP. BANK LT D., LALBAUG BRANCH IS IN THE NAME OF ASSESSEES WIFE SMT. SHILPA RAJKUMAR HEMNANI. HOWEVER, THE AO OBSERVED THAT THE ASSESSEE HAS NOT GIVEN ANY REP LY SO FAR AS THE DEPOSIT IN CASH MADE IN THE SAID BANK ACCOUNT. PROCEEDING FURTHER, THE AO EXAMINED THE ASSESSEE ON OATH IN ACCORDANCE WITH THE PROVISI ONS OF SEC. 131 OF THE ACT. ON A SPECIFIC QUESTION RELATING TO SAVINGS BANK ACC OUNT NO. 38325, THE ASSESSEE REPLIED THAT THE SAME IS IN THE NAME OF HI S WIFE SHILPA HEMNANI. ON ANOTHER QUESTION RELATING TO THE SOURCES OF INCOME OF THE SUM OF RS. 22,65,000/-, THE ASSESSEE REPLIED THAT THE INITIAL CASH DEPOSITS WERE MADE BY HIM AND HIS FAMILY MEMBERS FROM PAST SAVINGS AND SU BSEQUENT DEPOSITS WERE MADE FROM THE MONEY WITHDRAWN PERIODICALLY FROM THE SAME ACCOUNT. THE AO FINALLY ASKED THE ASSESSEE TO EXPLAIN WHY UNDER THE CIRCUMSTANCES THE CASH DEPOSIT OF RS. 22,65,000/- MADE IN THE SAVINGS BANK ACCOUNT NO. 38325 SHOULD NOT BE TREATED AS UNEXPLAINED INCOME OF THE ASSESSEE TO WHICH THE ASSESSEE REPLIED THAT THE ACCOUNT IS OWNED BY HIS W IFE AND ONLY THE INITIAL DEPOSITS HAVE BEEN MADE BY HIM AND ALL OTHER DEPOSI TS HAVE BEEN MADE FROM THE WITHDRAWALS OUT OF THE SAME BANK ACCOUNT. THE ASSESSEE REITERATED THAT HIS WIFE IS AN INDEPENDENT TAXPAYER FILING RETURN O F INCOME FROM PAST MANY YEARS. 5. AFTER CONSIDERING THE FACTS AND SUBMISSIONS MADE BY THE ASSESSEE, THE AO WAS OF THE OPINION THAT THE ASSESSEE HAS NEITHER REPLIED TO THE QUERY THAT TO WHOM THE CASH DEPOSIT BELONGS NOR HAS FURNISHED ANY EXPLANATION TOWARDS APPLICATION/PURPOSE OF CASH WITHDRAWALS MADE FROM T HE BANK ACCOUNT. THE AO FURTHER OBSERVED THAT THE ASSESSEE HAS FAILED TO ESTABLISH THE CASH/FUND FLOW BETWEEN THE SO CALLED PAST SAVINGS AND CASH DE POSITS MADE IN THE ITA NO. 8707/M/2010 3 SAVINGS BANK ACCOUNT NO. 38325. THEREAFTER THE AO WENT ON TO ADD RS. 22,65,000/- AS UNEXPLAINED INCOME U/S. 69A OF THE A CT. 6. THE MATTER WAS AGITATED BEFORE THE LD. CIT(A) BU T WITHOUT ANY SUCCESS. THE LD. CIT(A) OBSERVED THAT THE ASSESSEE HAS NOT BEEN ABLE TO PROVE THE SOURCES OF THE CASH DEPOSITS OF RS. 22,65 ,000/- IN THE S.B. ACCOUNT NO. 38325. IN THE OPINION OF THE LD. CIT(A), THE AS SESSEE HAS NOT BEEN ABLE TO EXPLAIN SOURCES OF CASH DEPOSITS AND ACCORDINGLY CONFIRMED THE ADDITION MADE BY THE AO. 7. AGGRIEVED BY THIS FINDING, THE ASSESSEE IS BEFOR E US. THE LD. COUNSEL FOR THE ASSESSEE ARGUED AT LENGTH AND SUBMITTED THA T THE BANK ACCOUNT IS IN THE NAME OF HIS WIFE WHO IS AN INDEPENDENT TAXPAYER , THEREFORE, NO ADDITION CAN BE MADE IN THE HANDS OF THE ASSESSEE. THE LD. COUNSEL RELIED UPON THE DECISION OF THE HONBLE RAJASTHAN HIGH COURT IN THE CASE OF CIT VS. SMT. TARA DEVI 292 ITR 539. THE LD. COUNSEL ALSO RELIED UPO N THE DECISION OF HONBLE RAJASTHAN HIGH COURT IN THE CASE OF CIT VS OMPRAKAS H BHATI 284 ITR 303. 8. THE LD. DEPARTMENTAL REPRESENTATIVE SIMPLY RELIE D UPON THE FINDINGS OF THE LOWER AUTHORITIES. 9. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND PER USED THE ORDERS OF THE LOWER AUTHORITIES AND ALSO THE CASE LAWS RELIED UPON BY THE ASSESSEE. THE UNDISPUTED FACT IS THAT THE S.B. A/C NO. 38325 WITH MAHANAGAR CO. OPERATIVE BANK LTD., LALBAUG IS IN THE NAME OF SMT. SHILPA HE MNANI, WIFE OF THE ASSESSEE. IT HAS ALSO NOT BEEN CONTROVERTED AT ANY STAGE THAT SMT. SHILPA HEMNANI IS NOT A TAXPAYER. A PERUSAL OF THE ASSESS MENT ORDER OF THE ASSESSEE SHOW THAT THE ASSESSEE IS A PARTNER IN TH E FIRM M/S. WINE CENTRE ENGAGED IN RETAILING OF INDIAN MADE FOREIGN LIQUOR, BEER, COUNTRY LIQUOR ETC. THE ASSESSEE ALSO HAPPENS TO BE PARTNER IN THE FIRM S M/S. DANDELI TIMBER TDG. CO. AND M/S. DANDELI TIMBER INDL., THOUGH BOTH THE FIRMS HAVE NOT CARRIED OUT ANY ACTIVITY DURING THE YEAR UNDER CONS IDERATION. THUS, THE ONLY ITA NO. 8707/M/2010 4 SOURCE OF INCOME OF THE ASSESSEE AS PER THE RETURN IS SHARE OF PROFIT FROM M/S. WINE CENTRE AND INTEREST INCOME. 10. IT IS NOT THE CASE OF THE AO THAT THE ASSESSEE M UST HAVE RECEIVED SOME SHARE FROM FIRMS BUSINESS OUTSIDE THE BOOKS OF ACC OUNT OF THE FIRM. IT IS ALSO NOT THE CASE OF THE REVENUE AUTHORITIES THAT THE AS SESSEE IS ENGAGED IN SOME CLANDESTINE ACTIVITIES FROM WHICH IT HAS INCOME OUT SIDE THE BOOKS OF ACCOUNT BUT THE FACT REMAINS THAT CASH HAS BEEN FOUND DEPOS ITED IN THE SAVINGS BANK ACCOUNT. AT THE SAME TIME, THE SAVINGS BANK ACCOUNT BELONGS TO THE WIFE OF THE ASSESSEE. AS THE OWNERSHIP OF THE SAID ACCOUNT LIES WITH THE WIFE OF THE ASSESSEE, IN OUR HUMBLE OPINION, THE ASSESSEE CANNO T BE ASKED TO EXPLAIN THE SOURCE OF DEPOSITS MADE IN THE SAID BANK ACCOUNT. THEREFORE, THE ADDITION CANNOT BE MADE ATLEAST IN THE HANDS OF THE ASSESSEE . THE REVENUE AUTHORITIES ARE FREE TO PURSUE THE MATTER AND EXPLO RE OTHER POSSIBILITIES. THE AO IS DIRECTED TO DELETE THE ADDITION OF RS. 22,65, 000/- FROM THE HANDS OF THE ASSESSEE. THUS, FINDING OF THE LD. CIT(A) ARE REVE RSED. 11. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON THIS 12 TH DAY OF OCTOBER, 2012 SD/- SD/- (D.MANMOHAN) (N.K. BILLAIYA ) VICE PRESIDENT ACCOUNTANT MEMBER MUMBAI, DATED 12 TH OCTOBER, 2012 RJ COPY TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT-CONCERNED 4. THE CIT(A)-CONCERNED 5. THE DR D BENCH TRUE COPY BY ORDER ASSTT. REGISTRAR, I.T.A.T, MUMBAI