Shri Jatin M. Shah, Ahmedabad V. The Income Tax Officer, Ward-5(3)(4), Ahmedabad

ITA 992/AHD/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 8571 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 4 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-09-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2012-2013
• Appeal Filed On: 21-04-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: PF JAIN
• Keywords: Business income

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD SMC BENC H (BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER & SHRI MAHAVIR PRASAD, JUDICIAL MEMBER) ITA. NO: 712/AHD/2015 & 992/AHD/2016 (ASSESSMENT YEARS: 2011-12 & 2012-13) SHRI JATIN M. SHAH SHREE KRISHNA CARGO, M-7, SHREE GHANTAKARAN MAHAVIR MARKET, NEW CLOTH MARKET, AHMEDABAD- 380022 V/S INCOME TAX OFFICER, WARD- 3 (2), AHMEDABAD & INCOME TAX OFFICER, WARD- 5(3)(4), AHMEDABAD (APPELLANT) (RESPONDENT) PAN: APZPS2196H APPELLANT BY : SHRI P. F. JAIN, AR RESPONDENT BY : SHRI JAMES KURIAN, SR. D.R. ( )/ ORDER DATE OF HEARING : 31 -08-201 7 DATE OF PRONOUNCEMENT : 06 -09-2017 PER N.K. BILLAIYA, ACCOUNTANT MEMBER: 1. ITA NOS. 712/AHD/2015 & 992/AHD/2016 ARE TWO SEPARA TE APPEALS BY THE ASSESSEE PREFERRED AGAINST TWO SEPARATE ORDERS OF T HE LD. CIT(A)-10 & LD. ITA NOS. 712 /A/2015 & 992/A/2016 . A.YS. 2011-1 2 & 2012-13 2 CIT(A)-5, AHMEDABAD DATED 09.01.2015 & 28.03.2015 P ERTAINING TO A.YS. 2011-12 & 2012-13 RESPECTIVELY. 2. AS FACTS IN ISSUE ARE COMMON IN BOTH THESE APPEALS, THEY WERE HEARD TOGETHER AND ARE DISPOSED OF BY THIS COMMON ORDER FOR THE SA KE OF CONVENIENCE. 3. IT WAS AGREED THAT FACTS OF ITA NO. 712/AHD/2015 SH OULD BE TAKEN INTO CONSIDERATION FOR THE DISPOSAL OF THE APPEALS. ON S UCH CONCESSION, WE HEARD THE RIVAL SUBMISSIONS AND HAVE CAREFULLY PERUSED THE OR DERS OF THE AUTHORITIES BELOW. 4. DURING THE COURSE OF THE SCRUTINY ASSESSMENT PROCEE DINGS, THE ASSESSEE WAS CONFRONTED WITH THE CASH DEPOSITED IN THE BANK ACCO UNT WITH INDUSLND BANK. THE ASSESSEE WAS ASKED TO EXPLAIN THE SOURCES OF TH E CASH FOUND TO BE DEPOSITED IN THE SAID SAVINGS BANK ACCOUNT IN THE R ESPECTIVE ASSESSMENT YEARS UNDER CONSIDERATION. 5. IN ITS REPLY, THE ASSESSEE STATED THAT THE CASH BEL ONG TO THE FIRM M/S. KRISHNA CARGO WHEREIN HE IS A PARTNER. IT WAS EXPLAINED THA T TO MEET THE LIQUIDITY REQUIREMENTS OF THE FIRM AT TIMES MONEY HAD TO BE R AISED THROUGH UNSECURED LOAN IN CASH. IT WAS FURTHER EXPLAINED THAT THE MON EY SO RAISED WAS IMMEDIATELY TRANSFERRED TO THE FIRM TO MEET OUT THE PAYMENT COM MITMENT. IT WAS FURTHER CONTENDED THAT THE CASH DEPOSITED IN THE SAVINGS BA NK ACCOUNT REMAINED TO BE INCLUDED IN THE GROSS RECEIPTS OF THE FIRM. THIS EX PLANATION OF THE ASSESSEE WAS FOUND TO BE WITHOUT ANY SUBSTANCE BY THE A.O. WHO M ADE THE ADDITION OF RS. 39,00,300/- IN A.Y. 2011-12 AND RS. 13,10,400/- IN A.Y. 2012-13. ITA NOS. 712 /A/2015 & 992/A/2016 . A.YS. 2011-1 2 & 2012-13 3 6. ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT(A) B UT WITHOUT ANY SUCCESS. 7. BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE TOOK AN ALTOGETHER NEW PLEA STATING THAT THE MONEY WAS DEPOSITED FROM THE BUSINESS DONE OUTSIDE THE BOOKS OF THE ASSESSEE AND, THEREFORE, ONLY MARGIN OF PROFIT SHOU LD BE ADDED. THE LD. COUNSEL DREW OUR ATTENTION TO THE COPY OF THE LEDGER ACCOUN T OF INDUSLND BANK AND POINTED OUT THAT WHENEVER THE CASH WAS DEPOSITED, I T WAS IMMEDIATELY TRANSFERRED TO M/S. SHRI KRISHNA CARGO. THEREFORE, THE SAME SHOULD BE CONSIDERED AS PART OF THE GROSS RECEIPTS AND ONLY P ROFIT SHOULD BE ADDED. 8. PER CONTRA, THE LD. D.R. STRONGLY SUPPORTED THE FIN DINGS OF THE A.O. 9. THERE IS NO DISPUTE THAT RS. 39,00,300/- WAS FOUND TO BE DEPOSITED IN THE SAVINGS BANK ACCOUNT WITH INDUSLND BANK IN A.Y. 201 1-12 AND RS. 13,10,400/- WAS FOUND TO BE DEPOSITED IN A.Y. 2012-13. IT IS EQ UALLY TRUE THAT THE EXPLANATION OF THE ASSESSEE IS WITHOUT ANY SUBSTANC E. HOWEVER, AT THE SAME TIME, ON PERUSING THE LEDGER ACCOUNT OF INDUSLND BA NK, WE FIND THAT WHENEVER THE CASH WAS DEPOSITED, IT WAS IMMEDIATELY TRANSFER RED TO M/S. SHRI KRISHNA CARGO. THEREFORE, THE CONTENTIONS THAT THE SAME FOR MS PART OF THE BUSINESS RECEIPTS CANNOT BE BRUSHED ASIDE LIGHTLY. 10. THE ASSESSEE HAS NOT FURNISHED ANY DETAIL IN SUPPOR T OF ITS CLAIM OF BUSINESS RECEIPTS. IN OUR CONSIDERED OPINION AND CONSIDERING THE MANNER IN WHICH THE CASH WAS DEPOSITED AND TRANSMITTED TO THE FIRMS ACC OUNT, 50% OF THE CASH DEPOSITED SHOULD BE TREATED AS THE INCOME OF THE AS SESSEE. WE MODIFY THE FINDINGS OF THE LD. CIT(A) AND DIRECT THE A.O. TO T REAT 50% OF THE CASH DEPOSITED AS UNDISCLOSED INCOME OF THE ASSESSEE. ITA NOS. 712 /A/2015 & 992/A/2016 . A.YS. 2011-1 2 & 2012-13 4 11. IN THE RESULT, THE APPEALS OF THE ASSESSEE ARE PART LY ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 06- 09- 20 17 SD/- SD/- (MAHAVIR PRASAD) (N. K. BILLAIYA) JUDICIAL MEMBER TRUE COPY ACCOUNTANT MEMBER AHMEDABAD: DATED 06/09/2017 RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AHME DABAD