M/s. Vijay H. Lilawala,, Surat v. The Income Tax Officer, Ward-1(2)(5),, Surat

ITA 2044/AHD/2016 | 2008-2009
Pronouncement Date: 11-02-2020 | Result: Allowed
Expert Summary: Where the assessee explains that the cash deposits in bank represents business of assessee however no details of such business are furnished by the assessee, the entire transaction appearing the bank account cannot be added instead only the profit embedded therein is to be added. Here in the case, the profits declared by the assessee were more than the peak credit in bank and therefore addition made was deleted. [Referred case: CIT vs. Pradeep Shantilal Patel (42 taxmann.com 2)]

Appeal Details

RSA Number 204425614 RSA 2016
Assessee PAN AAZPL4924F
Bench Surat
Appeal Number ITA 2044/AHD/2016
Duration Of Justice 3 year(s) 6 month(s) 7 day(s)
Appellant M/s. Vijay H. Lilawala,, Surat
Respondent The Income Tax Officer, Ward-1(2)(5),, Surat
Appeal Type Income Tax Appeal
Pronouncement Date 11-02-2020
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted DB
Tribunal Order Date 11-02-2020
Assessment Year 2008-2009
Appeal Filed On 04-08-2016
Judgment Text
M/S. VIJAY H LILAWALA V. ITO WARD-1(2)(5) SURAT/ITA. 2044/AHD/2016/A.Y.2008-09 PAGE 1 OF 4 IN THE INCOME TAX APPELLATE TRIBUNAL SURAT BENCH SURAT BEFORE SHRI SANDEEP GOSAIN JUDICIAL MEMBER AND SHRI O.P.MEENA ACCOUNTANT MEMBER . . ./ I.T.A NO.2044/AHD/2016 / ASSESSMENT YEAR: 2008-09 M/S. VIJAY H LILAWALA 2/1174 SAKDISWERI SANGRAMPUR SURAT-395 002. [PAN: AAZPL 4924 F] V . INCOME TAX OFFICER WARD-1(2)(5) SURAT. / APPELLANT /RESPONDENT /ASSESSEE BY SHRI MEHUL SHAH CA /REVENUE BY MS. ANUPAMA SINGLA SR. DR / DATE OF HEARING: 11 - 02 - 2020 /PRONOUNCEMENT ON: 12 - 02 - 2020 /O R D E R PER O.P.MEENA AM: 1. THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME-TAX (APPEALS)-II SURAT [IN SHORT THE CIT(A)] DATED 24-05-2016 FOR THE ASSESSMENT YEAR 2008-09. 2. GROUND NO.1 & 3 ARE REOPENING OF ASSESSMENT IS NOT PRESSED BEFORE US HENCE THE SAME IS TREATED AS DISMISSED AS NOT PRESSED. 3. GROUND NO.2 RELATES TO CONFIRMING THE ACTION OF THE AO IN MAKING ADDITION OF RS.20 38 261/- ON ACCOUNT OF DEPOSIT IN THE BANK ACCOUNT FROM UNDISCLOSED SOURCES. 4. BRIEF FACTS OF THE CASES ARE THAT THE AO NOTICED THAT THERE ARE DEPOSITS TO THE TUNE OF RS.20 38 261/- IN HIS BANK ACCOUNT FOR THE YEAR UNDER CONSIDERATION. IT WAS EXPLAINED THAT THE CASH DEPOSIT IN THE BANK ACCOUNT M/S. VIJAY H LILAWALA V. ITO WARD-1(2)(5) SURAT/ITA. 2044/AHD/2016/A.Y.2008-09 PAGE 2 OF 4 REPRESENTS CASH RECEIVED FROM RETAIL TRADING OF PLASTIC BAGS. HOWEVER THE ASSESSEE HAS FAILED TO FURNISH ANY DETAILS REGARDING PLASTIC BAGS THEREFORE THE AO TREATED THE SAME AS UNEXPLAINED AND MADE THE ADDITION ACCORDINGLY. 5. BEING AGGRIEVED THE ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT(A). WHEREIN IT WAS SUBMITTED THAT THE ASSESSEE HAS RETAILER TRADING OF PLASTIC BAGS HAVING TURN OF RS.13 27 900/- AND NET PROFIT SHOWS AT RS.1 08 290/-. HOWEVER THE CIT(A) OBSERVED THAT THE APPELLANT HAD NEVER FILED ANY APPEAL FOR THE RELEVANT ASSESSMENT YEAR. FURTHER NO DETAILS OF REGISTRATION WITH VAT/SALES TAX AUTHORITIES ANY REGISTRATION WITH LOCAL AUTHORITIES FOR RUNNING THE BUSINESS UNDER THE SHOP AND ESTABLISHMENT ACT ETC. WAS FURNISHED. THE BANK ACCOUNT HAS NOT BEEN GIVEN HENCE THE EXPLANATION OF THE ASSESSEE WAS NOT FOUND ACCEPTABLE. ACCORDINGLY THE ADDITION MADE BY THE AO WAS CONFIRMED. 6. BEING AGGRIEVED THE ASSESSEE FILED AN APPEAL BEFORE THIS TRIBUNAL. THE LD. COUNSEL SUBMITTED THAT THE ASSESSEE IS A RETAIL TRADERS OF PLASTIC BAG HAVING TURNOVER OF RS.21 55 084/-. THE ASSESSEE IS VERY SMALL RETAIL DEALER IN PLASTIC BAG AND AFTER DEATH OF HIS BROTHER IN A CAR ACCIDENT AS ON 03-03-2013 AND HIS FAMILY FACING COMPLETE FINANCIAL CRISES AND SOMEHOW MANAGING AFFAIRS OF THE FAMILY. THEREFORE IT WAS CONTENDED THAT TOTAL TRANSACTIONS APPEARED IN THE BANK ACCOUNT CANNOT BE ADDED INSTEAD OF PROFIT EMBEDDED THEREIN CAN BE ADDED. THE LD. COUNSEL DRAWN OUT ATTENTION TO BANK ACCOUNT STATEMENT REFERRED AT PAPER BOOK PAGE 1 2 3 & 4. WE SHOW THAT CREDIT AND DEBITS AS WELL AS THE DEBITS ARE APPEARING IN THE NAME OF VARIOUS BUSINESS CONCERNS. WE SUGGEST THAT THE ASSESSEE WAS ENGAGED IN RETAIL BUSINESS MORE M/S. VIJAY H LILAWALA V. ITO WARD-1(2)(5) SURAT/ITA. 2044/AHD/2016/A.Y.2008-09 PAGE 3 OF 4 OVER THE ENTIRE DEPOSITS IN THE BANK ACCOUNT CAN BE ADDED AND ONLY PEAK CREDIT BALANCE CAN BE ADDED WHICH IS AT RS.68016.00 CRORE AS ON 27-11-2007 WHEREAS THE ASSESSEE HAS ALREADY DECLARED INCOME OF RS.1 08 289/- IN THE RETURN OF INCOME IN NET PROFIT @5% WHICH IS NET PROFIT @5%. THEREFORE PLACING RELIANCE ON THE DECISION OF ITAT AHMEDABAD IN THE CASE OF RAMILABEN B. PATEL V. ITO (2018) 100 TAXMANN.COM 325 (AHMEDABAD) SUBMITTED THAT THE BANK STATEMENT IS NOT CONSIDERED AS BOOKS OF ACCOUNT AND THEREFORE ANY SUM HAVE BEEN CREDIT BUSINESS CANNOT BE TREATED UNEXPLAINED CASH CREDIT. THE LD. COUNSEL FURTHER PLACE RELIANCE ON THE DECISION OF HONBLE GUJARAT HIGH COURT IN THE CASE OF CIT V. PRADEEP SHANTILAL PATEL [42 TAXMANN.COM 2] WHEREIN IT WAS HELD THAT WHERE THE ASSESSEE ADMITTED THAT CASH DEPOSITS PERTAINED TO HIS RETAIL BUSINESS BUT DETAILS AND NATURE OF BUSINESS WERE NOT FORTHCOMING FROM RECORD CONSIDERING TOTAL TURNOVER OF ASSESSEE NET INCOME HAD TO BE DETERMINED UNDER SECTION 44AF. 7. PER CONTRA THE LD. SR. DR SUPPORTED THE ORDER OF THE LOWER AUTHORITIES. 8. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. WE FIND THAT THE SUM OF RS.20 38 261/- FOUND CREDITED IN THE ASSESSEES BANK ACCOUNT WHICH WERE CLAIMED TO BE SALES RECEIPT OF PLASTIC BAG. ON-GOING THROUGH THE DETAILS OF BANK ACCOUNT IT IS NOT SEEN THAT THERE ARE CASH DEPOSITS AS WELL AS CASH WITHDRAWALS AND WITHDRAWALS APPEARED IN THE NAME OF VARIOUS BUSINESS CONCERNS. IN SUCH CASE THE ADDITION OF ENTIRE AMOUNT CANNOT BE ADDED AS HELD BY HONBLE GUJARAT HIGH COURT IN THE CASE OF CIT V. PRADEEP SHANTILAL PATEL (SUPRA). SINCE THE M/S. VIJAY H LILAWALA V. ITO WARD-1(2)(5) SURAT/ITA. 2044/AHD/2016/A.Y.2008-09 PAGE 4 OF 4 ASSESSEE HAS ALREADY DISCLOSED AN AMOUNT OF RS.1 08 289/- ON THE TOTAL TURNOVER OF RS.21 28 261/- WHICH IS NP RATE OF 5% ON PRESUMPTIVE BASIS BEING NO BOOKS CASE WHICH IS MORE THAN PEAK CREDIT BALANCE APPEARED IN THE ACCOUNT OF THE ASSESSEE. THEREFORE WE ARE OF THE CONSIDERED OPINION THAT THE ADDITION MADE BY THE AO IS NOT SUSTAINABLE. IN VIEW OF THIS FACT THE ADDITION MADE BY THE AO IS DELETED. ACCORDINGLY THIS APPEAL OF THE ASSESSEE IS ALLOWED. 9. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALLOWED. 10. THE ORDER PRONOUNCED IN THE OPEN COURT ON 12-02-2020 SD/- SD/- (SANDEEP GOSAIN) (O.P.MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER SURAT: DATED: 12 TH FEB 2020 / SAMANTA PS COPY OF ORDER SENT TO- ASSESSEE/AO/PR. CIT/ CIT (A)/ ITAT (DR)/ GUARD FILE OF ITAT. BY ORDER // TRUE COPY // ASSISTANT REGISTRAR SURAT