PONIDEVI P. CHOUDHARY, NAVI MUMBAI v. CIT 22, MUMBAI

ITA 315/MUM/2014 | 2009-2010
Pronouncement Date: 11-04-2014 | Result: Partly Allowed

Appeal Details

RSA Number 31519914 RSA 2014
Assessee PAN AEAPC5943E
Bench Mumbai
Appeal Number ITA 315/MUM/2014
Duration Of Justice 2 month(s) 29 day(s)
Appellant PONIDEVI P. CHOUDHARY, NAVI MUMBAI
Respondent CIT 22, MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 11-04-2014
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted C
Tribunal Order Date 11-04-2014
Date Of Final Hearing 06-03-2014
Next Hearing Date 06-03-2014
Assessment Year 2009-2010
Appeal Filed On 13-01-2014
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH MUMBAI BEFORE SHRI R.C.SHARMA A M & DR.STM PAV A LAN J M ITA NO. 31 5 / MUM/20 1 4 ( ASSESSMENT YEAR : 200 9 - 10 ) SMT. PONIDEVI P. CHOUDHARY GULAB SONS DAIRY 101 TJ COMPLEX PLOT NO. 85 SECTOR NO.15 KOPARKHAIRANE NAVI MUMBAI - 400 709 VS. ITO WD.22(3)(3) MUMBAI PAN/GIR NO. : A E A P C 5943 E ( APPELLANT ) .. ( RESPONDENT ) /ASSESSEE BY : M R. BABOOLAL M.OSTWAL /REVENUE BY : MR. M.L.PERUMAL DATE OF HEARING : 2 ND APRIL 201 4 DATE OF PR ONOUNCEMENT : 11 TH APRIL 201 4 O R D E R PER R.C.SHARMA ( A .M.) : THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT DATED 31 - 12 - 2013 FOR THE ASSESSMENT YEAR 200 9 - 10 IN THE MATTER OF ORDER PASSED UNDER SECTION 263 OF TH E I.T. ACT WHEREIN FOLLOWING GROUNDS HAVE BEEN RAISED : - 1. ON THE FACTS AND CIRCUMSTANCES THE LD. CIT ERRED IN ASSUMING THE JURISDICTION UNDER SEC.263 OF THE IT ACT. 2. ON THE FACTS AND CIRCUMSTANCES THE LD. CIT ERRED IN SETTING ASIDE TO THE FILE OF R ESPONDENT AO FOR RE - LOOKING IN DETAIL THE ISSUE OF CASH DEPOSIT IN BANK WHICH FOUND TO HAVE OR LOOKED/OMITTED IN ASSESSMENT PROCEEDINGS U/S.143 OF THE IT ACT. 2 . RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORD PERUSED. FACTS IN BRIEF ARE THAT THE ASSESSEE IS AN INDIVIDUAL AND IS ENGAGED IN THE ITA NO. 315 / 1 4 2 BUSINESS OF PREPARATION OF HOUSEHOLD MASALA ITEMS AND FILED HER RETURN OF INCOME DECLARING TOTAL INCOME OF RS.1 53 590/ - ALONG WITH BALANCESHEET AND OTHER DETAILS. THEREAFTER THE CASE OF THE ASSESSEE SELECTED FOR SCRUT INY WHEREIN THE AO ACCEPTED THE INCOME OF THE ASSESSEE AS BUSINESS INCOME. THEREAFTER ON AIR INFORMATION IT WAS NOTICED BY THE CIT THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF PREPARATION OF HOUSEHOLD MASALA ITEMS AND DEPOSITED CASH TO THE TUNE OF RS . 19.85 LACS IN HER SAVING BANK ACCOUNT WITH THE CHEMBUR NAGRIK SAHAKARI BANK LTD. KOPARA KHAIRANE BRANCH AND THE SAID BANK ACCOUNT IS NOT REFLECTED IN THE COPY OF ACCOUNT FILED BY THE ASSESSEE. N EITHER ANY EXPLANATION IS ON THE RECORD AS TO WHY THE TRANSAC TION MADE IS NOT REFLECTED IN THE ACCOUNTS NOR THE SOURCE OF CASH DEPOSITS IS EXPLAINED. THE CIT OBSERVED THAT FOR THIS IRREGULARITY OF THE ASSESSEE THE AO HAS NEITHER MADE ANY ENQUIRY NOR MADE ANY ADDITION WHICH IS ERRONEOUS ON THE PART OF THE AO AND P REJUDICIAL TO THE INTEREST OF REVENUE. IN SUCH CIRCUMSTANCES A NOTICE U/S.263 WAS ISSUED TO THE ASSESSEE ON THE FOLLOWING QUESTIONS : - 2. ON VERIFICATION OF THE RECORDS FROM INFORMATION R ECEIVED ON AIR IT IS SEEN THAT YOU HAD DEPOSITED CASH OF RS.19.85 LACS IN YOUR BANK ACCOUNT. HOWEVER IT IS SEEN THAT YOU HAD NOT OFFERED ANY EXPLANATION REGARDING EXCESS CASH DEPOSIT IN THE BANK ACCOUNT. 3. YOU ARE THEREFORE ALLOWED AN OPPORTUNITY OF BEING HEARD AND SHOW CAUSE AS TO WHY AN ORDER ENHANCING OR MODIFYI NG THE ASSESSMENT OR CANCELLING THE ASSESSMENT AND DIRECTING A FRESH ASSESSMENT WITHIN THE MEANING OF SECTION 263 OF THE I.T. ACT MAY NOT BE PASSED IN YOUR CASE. ITA NO. 315 / 1 4 3 3 . IN RESPONSE TO THE SAID NOTICE BEFORE THE CIT THE ASSESSEE VIDE LETTER DATED 30 - 12 - 201 3 STATED THAT DURING THE ASSESSMENT PROCEEDING SHE MADE ALLEGED CASH DEPOSITS FROM THE SALE PROCEEDS OF TRADING OF MASALA ITEMS IN CHEMBUR NAGRIK SAHAKARI BANK WHICH WAS INADVERTENTLY OMITTED TO BE TAKEN CARE IN RETURN OF INCOME AS WELL AS BEFORE THE AO WHILE ASSESSMENT PROCEEDINGS BUT THE INCOME COMPONENT IN SUCH DEPOSITS FALLS IN THE AMBIT OF SEC.44AF.THEREFORE RS. 14 85 500/ - BEING CASH WITHDRAWAL AND PAID TO SUPPLIERS AND CORRESPONDING BALANCE WITH THE ABOVE SAID BANK WAS ALSO INCREASED BY THE SAME AMOUNT. SHE ALSO STATED THAT THE AO MIGHT NOT HAVE DISCUSSED IT APPROPRIATELY IN THE ASSESSMENT ORDER BEING SATISFIED WITH THE EXPLANATION GIVEN IN THE SAID LETTER. HENCE THE CIT FOUND THAT THE ASSESSMENT ORDER PASSED BY THE AO WAS ERRONEOUS AND PREJUDIC IAL TO THE INTEREST OF REVENUE AND SET ASIDE THE SAME. NOW THE ASSESSEE IS APPEAL BEFORE US. 4 . LEARNED AR SUBMITTED THAT THE QUESTION NO.1 RAISED BY THE CIT IS INCORRECT WHICH CANNOT BE A GROUND FOR INITIATION OF PROCEEDINGS U/S.263 WHEN THE AO HAS CON DUCTED THE NECESSARY INQUIRY AND APPLIED HIS MIND IN PASSING THE ORDER WHICH SOUGHT TO BE REVISED. HOWEVER THE SUFFICIENCY OR CORRECTNESS OF THE EXPLANATION IS ANOTHER ISSUE ON WHICH THE CIT COULD HAVE INVOKED THE REVISIONARY POWERS U/S.263. ITA NO. 315 / 1 4 4 5. ON THE O THER HAND LEARNED DR SUBMITTED THAT THE ORDER PASSED BY THE CIT U/S.263 IS JUS AND PROPER WHICH REQUIRES NO INTERVENTION. HENCE THE APPEAL OF THE ASSESSEE DESERVES TO BE DISMISSED. 6 . WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND PERUSED THE RECORD. WE FOUND THAT AN ORDER CANNOT BE TERMED AS ERRONEOUS UNLESS IT IS NOT IN ACCORDANCE WITH LAW. IF AN INCOME - TAX OFFICER ACTING IN ACCORDANCE WITH LAW MAKES A CERTAIN ASSESSMENT THE SAME CANNOT BE BRANDED AS ERRONEOUS BY THE COMMISSIONER SIMPLY BECAUSE ACCORD ING TO HIM THE ORDER SHOULD HAVE BEEN WRITTEN MORE ELABORATELY THIS SECTION DOES NOT VISUALISE A CASE OF SUBSTITUTION OF THE JUDGMENT OF THE COMMISSIONER FOR THAT OF THE INCOME - TAX OFFICER WHO PASSED THE ORDER UNLESS THE DECISION IS HELD TO BE ERRONEOUS. CASES MAY BE VISUALISED WHERE THE INCOME - TAX OFFICER WHILE MAKING AN ASSESSMENT EXAMINES THE ACCOUNTS MAKES ENQUIRIES APPLIES HIS MIND TO THE FACTS AND CIRCUMSTANCES OF THE CASE AND DETERMINES THE INCOME EITHER BY ACCEPTING THE ACCOUNTS OR BY MAKING SOM E ESTIMATE HIMSELF. THE COMMISSIONER ON PERUSAL OF THE RECORDS MAY BE OF THE OPINION THAT THE ESTIMATE MADE BY THE OFFICER CONCERNED WAS ON THE LOWER SIDE AND LEFT TO THE COMMISSIONER HE WOULD HAVE ESTIMATED THE INCOME AT A FIGURE HIGHER THAN THE ONE DET ERMINED BY THE INCOME - TAX OFFICER. 6.1 AFTER GOING THROUGH THE ORDER OF THE AO IT IS QUITE CLEAR THAT HE HAS NOT APPLIED HIS MIND WITH RESPECT TO THE DEPOSIT IN BANK ACCOUNT WHICH LED TO INCREASE IN THE CAPITAL OF THE ASSESSEE. THERE IS NO DISPUTE ITA NO. 315 / 1 4 5 TO T HE WELL SETTLED PROPOSITION THAT WHERE THE AO FRAMES ASSESSMENT WITHOUT APPLICATION OF MIND AND WITHOUT MAKING ENQUIRY THE ORDER OF THE AO BECOMES ERRONEOUS AS WELL AS PREJUDICIAL TO THE INTEREST OF REVENUE. IN THE INSTANT CASE BEFORE US IT IS CLEAR FROM THE REPLY OF THE ASSESSEE BEFORE THE CIT THAT BANK ACCOUNT IN WHICH AMOUNT OF RS. 19 85 500/ - WAS DEPOSITED WAS NOT DISCLOSED IN THE RETURN OF INCOME. AT THE VERY SAME TIME IT WAS ALSO CONTENTION OF THE ASSESSEE THAT THE AMOUNTS SO RECEIVED AND DEPOSIT ED WAS ON ACCOUNT OF SALE O F BUSINESS WHICH COMES UNDER SECTION 44AF. ACCORDINGLY WE MODIFY THE ORDER OF THE CIT AND DIRECT THE AO TO EXAMINE THE APPLICABILITY OF PROVISIONS OF SECTION 44AF WHILE DECIDING THE ISSUE AFRESH WITH REGARD TO DEPOSIT OF CASH AM OUNT IN THE BANK AND CONSEQUENT INCREASE IN CAPITAL ACCOUNT. WE DIRECT ACCORDINGLY. 7 . IN THE RESULT APPEAL FILED BY THE ASSESSEE IS ALLOWED IN PART FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 11 TH APRIL . 201 4 . 11 TH APRIL 2014 SD/ - SD/ - ( ) ( DR. S.T.M. PAV A LAN ) ( ) ( R.C.SHARMA ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI ; DATED 11 /04 /2014 /PKM PS ITA NO. 315 / 1 4 6 COPY OF THE ORDER FORWARDED TO : / BY ORDER ( ASSTT. REGISTRAR) / ITAT MUMBAI 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / THE CIT(A) MUMBAI. 4. / CIT 5. / DR ITAT MUMBAI 6. GUARD FILE. //TRUE COPY//