Tarun Babubhai Shah, Chennai V. ITO, NCW 4(1), Chennai

ITA 888/CHNY/2019

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 9660 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-06-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 01-04-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: LALMALSAWMA PACHUAU
• Assessee Lawyers: LOKESH NAHATA
• Keywords: Set aside
• Section: 68

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI . . . , ! ' , $ '% BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER ./ ITA NO.888/CHNY/2019 ( )( / ASSESSMENT YEAR : 2009-10 SHRI TARUN BABUBHAI SHAH, C/O L. NAHATA & CO., 120, NYNIAPPA NAICKEN STREET, PARK TOWN, CHENNAI - 600 003. PAN : ABHPS 3109 E V. THE INCOME TAX OFFICER, NON CORPORATE WARD - 4(1), CHENNAI. (+,/ APPELLANT) (-.+,/ RESPONDENT) +, / 0 / APPELLANT BY : SHRI LOKESH NAHATA, CA -.+, / 0 / RESPONDENT BY : SHRI LALMALSAWMA PACHUAU, JCIT 1 / 2$ / DATE OF HEARING : 17.06.2019 34) / 2$ / DATE OF PRONOUNCEMENT : 19.06.2019 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER : THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST T HE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) -16, CHENN AI, DATED 31.01.2019 AND PERTAINS TO ASSESSMENT YEAR 2009-10. 2. SHRI LOKESH NAHATA, THE LD. REPRESENTATIVE FOR T HE ASSESSEE, SUBMITTED THAT THE ONLY ISSUE ARISES FOR CONSIDERAT ION IS ADDITION OF 2,62,000/- UNDER SECTION 68 OF THE INCOME-TAX ACT, 1961 (IN SHORT 2 I.T.A. NO.888/CHNY/19 'THE ACT'). ACCORDING TO THE LD. REPRESENTATIVE, T HE ASSESSEE EXPLAINED BEFORE THE ASSESSING OFFICER THAT THE SOU RCE FOR DEPOSIT OF 2,62,000/- WAS FROM SAVINGS OF THE EARLIER YEARS. HOWEVER, THE ASSESSING OFFICER REJECTED THE CLAIM OF THE ASSESSE E ON THE GROUND THAT THE ASSESSEE HAD NO TAXABLE INCOME IN THE EARL IER YEARS. ACCORDING TO THE LD. REPRESENTATIVE, THE PAST SAVIN GS WERE USED FOR MAKING BANK DEPOSIT TO THE EXTENT OF 2,62,000/-, THEREFORE, THE CIT(APPEALS) IS NOT JUSTIFIED IN CONFIRMING THE ORD ER OF THE ASSESSING OFFICER. 3. ON THE CONTRARY, SHRI LALMALSAWMA PACHUAU, THE L D. DEPARTMENTAL REPRESENTATIVE, SUBMITTED THAT THE ASS ESSING OFFICER FOUND THAT THE ASSESSEE CLAIMS LOSS ON SHARE TRANSA CTIONS THROUGH DIFFERENT SHARE BROKERS. ACCORDING TO THE LD. D.R. , THE ASSESSING OFFICER FOUND THAT THERE WAS PAYMENT OF 3,80,500/- TO M/S LUNIA INVESTMENT & FINANCE PVT. LTD. FOR SHARE TRANSACTIO N DURING THE YEAR UNDER CONSIDERATION. THE ASSESSING OFFICER ALSO FO UND THAT THERE WAS CASH DEPOSIT TO THE EXTENT OF 2,62,000/- ON VARIOUS DATES IN THE BANK ACCOUNT FOR THE PURPOSE OF MAKING PAYMENT TO M/S LUNIA INVESTMENT & FINANCE PVT. LTD. ACCORDING TO THE LD. D.R., THE ASSESSEE HAD NO SOURCE OF INCOME. THE ASSESSEE HAS NOT FILED 3 I.T.A. NO.888/CHNY/19 RETURN OF INCOME AFTER 2005-06. FOR THE ASSESSMENT YEAR 2005-06, ACCORDING TO THE LD. D.R., THE ASSESSEE HAS ADMITTE D ONLY LOSS OF 81,800/-, THEREFORE, THE ASSESSING OFFICER HAS RIGH TLY DISBELIEVED THE EXPLANATION OF THE ASSESSEE THAT THE PAST SAVIN GS WERE USED FOR MAKING DEPOSIT IN THE BANK ACCOUNT. SINCE THE EXPL ANATION OF THE ASSESSEE IS NOT SATISFACTORY, ACCORDING TO THE LD. D.R., THE CIT(APPEALS) HAS RIGHTLY CONFIRMED THE ADDITION MAD E BY THE ASSESSING OFFICER. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. AS RIGHTLY SUBMITTED BY THE LD. REPRESENTATIVE FOR THE ASSESSE E THE ONLY ISSUE ARISES FOR CONSIDERATION IS CASH DEPOSIT OF 2,62,000/- IN THE BANK ACCOUNT. THE ASSESSEE EXPLAINED THAT THE INCOME GE NERATED OUT OF TUITIONS AND PAST SAVINGS WERE USED IN MAKING BANK DEPOSIT. THE ASSESSING OFFICER AS WELL AS THE CIT(APPEALS) DISBE LIEVED THE EXPLANATION OF THE ASSESSEE ONLY ON THE GROUND THAT THE ASSESSEE HAS NOT FILED ANY RETURN OF INCOME AFTER THE ASSESS MENT YEAR 2005- 06. 5. THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT WHILE MAKING ADDITION TOWARDS CASH DEPOSIT, THE ECONOMIC SITUATI ON PREVAILING IN 4 I.T.A. NO.888/CHNY/19 THE COUNTRY HAS TO BE TAKEN INTO CONSIDERATION. IN THE ASSESSMENT YEAR 2009-10, THE SALARY OF A MASON WAS AROUND 500 TO 600/- PER DAY. THE OTHER LABOURERS WORKING IN CONSTRUCTION I NDUSTRY WERE GETTING MINIMUM 300 TO 400/- PER DAY. SIMILARLY, THE UNORGANIZED LABOURERS WORKING IN OTHER SECTORS ALSO GETTING A S IMILAR SALARY. THESE SALARIES WILL BE GENERATED / PAID THROUGH CAS H BECAUSE THE RECIPIENTS WOULD BE MOSTLY ILLITERATES. IN A FAMIL Y OF TWO, WHEN THE HUSBAND AND WIFE BOTH WERE WORKING, A MINIMUM OF 1000/- PER DAY COULD BE EARNED. THEREFORE, THE ORDINARY ILLITERAT E FAMILY IN INDIA, WORKING IN UNORGANIZED SECTOR WOULD NATURALLY EARN A MINIMUM OF 1000/- PER DAY. 6. IN THE CASE BEFORE US, THE ASSESSEE CLAIMS THAT HE GENERATED INCOME OUT OF TUITIONS. THEREFORE, THIS TRIBUNAL I S OF THE CONSIDERED OPINION THAT THE PAST SAVINGS OF THE ASSESSEE AS CL AIMED CANNOT TOTALLY BE RULED OUT. IN THE PREVAILING ECONOMIC S ITUATION IN INDIA, MORE PARTICULARLY IN THE STATE OF TAMIL NADU, ORDIN ARY ILLITERATE PERSONS WOULD DEFINITELY EARN 400/- PER DAY PROVIDED THEY WERE GOING FOR WORK. IF SUCH PERSONS ARE ASKED TO PRODU CE EVIDENCE FOR THEIR WORK, IT IS IMPOSSIBLE FOR THEM TO PRODUCE. IN THE UNORGANIZED SECTORS SUCH AS CONSTRUCTION INDUSTRY, AGRICULTURAL SECTOR AND OTHER 5 I.T.A. NO.888/CHNY/19 LABOUR ORIENTED SECTORS, PRODUCING EVIDENCE FOR THE INCOME EARNED IS ALMOST IMPOSSIBLE. BUT, IT DOES NOT MEAN THAT T HE PEOPLE WHO ARE WORKING IN THOSE SECTORS DO NOT EARN ANY MONEY. TH EREFORE, THE OFFICERS / AUTHORITIES WHO ARE PERFORMING JUDICIAL FUNCTION, HAVE TO TAKE NOTE OF THE EXISTING ECONOMIC SCENARIO IN THE COUNTRY. IN OTHER WORDS, THE AUTHORITIES PERFORMING JUDICIAL FUNCTION HAVE TO TAKE JUDICIAL NOTICE OF THE SITUATION PREVAILING IN THIS COUNTRY. 7. HAVING TAKEN NOTE OF THE SITUATION PREVAILING IN UNORGANIZED SECTORS AND ECONOMIC SITUATION IN THIS COUNTRY, THI S TRIBUNAL IS OF THE CONSIDERED OPINION THAT SAVINGS OF 2,62,000/- BY THE ASSESSEE CANNOT BE TOTALLY RULED OUT. THEREFORE, BOTH THE A UTHORITIES BELOW ARE NOT JUSTIFIED IN REJECTING THE EXPLANATION OF T HE ASSESSEE. HENCE, THIS TRIBUNAL IS UNABLE TO UPHOLD ORDERS OF BOTH THE AUTHORITIES BELOW. THE ASSESSEE COULD HAVE VERY WE LL SAVED 2,62,000/- IN THE EARLIER ASSESSMENT YEARS. HENCE, THE ORDERS OF BOTH THE AUTHORITIES BELOW ARE SET ASIDE AND THE AD DITION OF 2,62,000/- IS DELETED. 5. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE STANDS ALLOWED. 6 I.T.A. NO.888/CHNY/19 ORDER PRONOUNCED IN THE COURT ON 19 TH JUNE, 2019 AT CHENNAI. SD/- SD/- ( ! ' ) ( . . . ) (INTURI RAMA RAO) (N.R.S. GANESAN) $ / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 6 /DATED, THE 19 TH JUNE, 2019. KRI. / -278 98)2 /COPY TO: 1. +, /APPELLANT 2. -.+, /RESPONDENT 3. 1 :2 () /CIT(A)-16, CHENNAI 4. PRINCIPAL CIT-6, CHENNAI-34 5. 8; -2 /DR 6. <( = /GF.