SANDEEP RAMESH SHAH ,MUMBAI V. ITO WARD (169)(1), MUMBAI

ITA 1545/MUM/2025

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The case involves Sandeep Ramesh Shah, the appellant, who contested a penalty imposed by the Commissioner of Income Tax (Appeals) for the Assessment Year 2008-09. The penalty was originally levied following an assessment that added Rs. 11,55,000 as undisclosed income from a cash deposit. The Tribunal had previously accepted the availability of cash through withdrawals and an opening cash balance, which the AO failed to consider in the penalty order. The Tribunal concluded that since the basis for the original assessment (and thus the penalty) had been undermined, the penalty should be annulled.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 653212 (ITAT-MUMBAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-06-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Assessment Year: 2008-2009
• Other Referred Cases: Shri Sandeep Ramesh Shah vs. ITO in ITA No. 745/Mum/2019
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SWAPNIL CHOUDHARY; AR
• Assessee Lawyers: DHIRENDRA SHAH; AR
• Section: 143(3); 271(1)(c)

Judgement Text

" | आयकर अपीलीय अिधकरण ा यपीठ, मुंबई | IN THE INCOME TAX APPELLATE TRIBUNAL “G” BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY, HON’BLE VICE PRESIDENT & SHRI NARENDRA KUMAR BILLAIYA, HON’BLE ACCOUNTANT MEMBER I.T.A. No. 1545/Mum/2025 Assessment Year: 2008-09 Sandeep Ramesh Shah 79, Dariya Mahal No. 2, 80 Neapean Sea Road Walkeshwar Mumbai - 400006 [PAN: AOMPS5930F] Vs Ward, Mum-W-(169)(1), Mumbai Commissioner of Income Tax अपीला थ\u0016/ (Appellant) \u0017\u0018 यथ\u0016/ (Respondent) Assessee by : Shri Dhirendra Shah, A/R Revenue by : Shri Swapnil Choudhary, A/R सुनवाई की तारीख/Date of Hearing : 16/06/2025 घोषणा की तारीख /Date of Pronouncement: 19/06/2025 आदेश/O R D E R PER NARENDRA KUMAR BILLAIYA, AM: This appeal by the assessee is preferred against the order dt. 24/01/2025 by NFAC, Delhi [hereinafter “the ld. CIT(A)”] pertaining to AY 2008-09. 2. The solitary grievance of the assessee is that the ld. CIT(A) erred in confirming penalty of Rs. 2,27,115/- levied u/s 271(1)(c) of the Act. 3. The roots of the levy of penalty lie in the assessment order dated 31/03/2015 framed u/s 143(3) r.w.s. 147 of the Act by which the returned income of the assessee at Rs. 5,34,516/- was assessed at Rs.15,80,680/- after making an addition of Rs. 11,55,000/- being cash deposit treated as undisclosed income. 4. The additions made in the assessment order were challenged by the assessee and quarrel travelled up to the Tribunal and the Co- I.T.A. No. 1545/Mum/2025 2 ordinate Bench in the case of Shri Sandeep Ramesh Shah vs. ITO in ITA No. 745/Mum/2019; AY 2008-09 order dt. 10/02/2020, considered the availability of cash through withdrawal and also opening cash in hand and held as under:- “Thus, to the extent of availability of cash through withdrawal is accepted and same cannot be taken as unexplained cash deposit. The opening cash balance of Rs. 5,42,145/- was sought to be explained by the assessee through his cash summary statement for the year 2007. Looking to the average income of the assessee out of the opening cash balance of Rs. 5,42,145/-, I direct the A.O. to accept Rs. 2.50 lacs as cash in hand as on 04/01/2007. Thus, I direct the A.O. to accept availability of cash to the extent of Rs. 2.50 lacs as opening cash balance and the cash amount withdrawn from bank which was utilized for again deposit in the bank account. I direct accordingly.” 5. While framing the penalty order, though the AO gave relief to the extent of availability of opening cash in hand of Rs. 2.50 Lakhs but inadvertently, completely ignored the relief given to accept availability of cash being withdrawn from bank which was utilised for account deposit in the bank account as per the extract of the relevant decision of the Co-ordinate Bench. 6. Since the availability of cash has been accepted by the Co-ordinate Bench, the very foundation of the additions made in the assessment order has been removed. Since the foundation has been removed, the super structure i.e., the penalty should fall. We direct the AO to delete the impugned penalty. 7. In the result, appeal of the assessee is allowed. Order pronounced in the Court on 19th June, 2025 at Mumbai. Sd/- Sd/- (SAKTIJIT DEY) (NARENDRA KUMAR BILLAIYA) VICE PRESIDENT ACCOUNTANT MEMBER Mumbai, Dated 19/06/2025 *SC SrPs *SC SrPs *SC SrPs *SC SrPs I.T.A. No. 1545/Mum/2025 3 आदेश की \u0014ितिलिप अ\u0019ेिषत /Copy of the Order forwarded to : 1. अपीलाथ\u001b / The Appellant 2. \u0014 थ\u001b / The Respondent 3. संबंिधत आयकर आयु! / Concerned Pr. CIT 4. आयकर आयु! ) अपील ( / The CIT(A)- 5. िवभागीय \u0014ितिनिध ,आयकर अपीलीय अिधकरण, मुंबई /DR,ITAT, Mumbai, 6. गाड% फाई/ Guard file. आदेशानुसार/ BY ORDER TRUE COPY Assistant Registrar आयकर अपीलीय अिधकरण ITAT, Mumbai "