DEEPAK MADHUKAR MAYEKAR, MUMBAI v. ITO 18(2)(2), MUMBAI

ITA 4182/MUM/2014 | 2009-2010
Pronouncement Date: 30-09-2016 | Result: Allowed

Appeal Details

RSA Number 418219914 RSA 2014
Assessee PAN AAMPM7056N
Bench Mumbai
Appeal Number ITA 4182/MUM/2014
Duration Of Justice 2 year(s) 3 month(s) 20 day(s)
Appellant DEEPAK MADHUKAR MAYEKAR, MUMBAI
Respondent ITO 18(2)(2), MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 30-09-2016
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted D
Tribunal Order Date 30-09-2016
Assessment Year 2009-2010
Appeal Filed On 09-06-2014
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES D MUMBAI BEFORE SHRI SAKTIJIT DEY(JUDICIAL MEMBER) AND SHRI N.K. PRADHAN (ACCOUNTANT MEMBER) ITA NO. 4182 /MUM/201 4 ASSESSMENT YEAR: 200 9 - 10 DEEPAK MADHUKAR MAYEKAR VS. ITO 1 8 ( 2 )( 2 ) 4/410 SAI SADAN RAJABHAU DESAI RD PIRAMAL CHAMBERS NEW PRABHADEVI 1 ST FLOOR PAREL MUMBAI - 400025 MUMBAI 4000 12 PAN NO. AA MPM7056N (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI. M. S. SHETH REVENUE BY : SHRI. B. S. BIST DATE OF HEARING: 2 5 /08/2016 DATE OF PRONOUNCEMENT: 30 /0 9 /2016 ORDER PER N.K. PRADHAN A.M . THIS IS AN APPEAL FILED BY THE ASSESSEE. THE RELEVANT ASSESSMENT YEAR IS 200 9 - 10 . THE APPEAL IS DIRECTED AGAINST THE ORDER OF THE CIT(A) - 29 MUMBAI AND ARISES OUT OF THE ASSESSMENT COMPLETED U/S 143(3) O F THE I NCOME T AX ACT 1961 (THE ACT). 2. THE SOLE GROUND OF APPEAL RAISED BY THE ASSESSEE IS THAT THE LD. CIT(A) ERRED IN ADDING THE ENTIRE CASH DEPOSIT OF RS.41 80 000/ - IN THE INCOME WITHOUT APPRECIATING THE FACT THAT THE ENTIRE CASH DEPOSITS ARE SALE PROCEEDS AND ONLY NET PROFIT TO BE ADDED OF RS.4 01 750/ - . WITHOUT PREJUDICE TO THE ABOVE IT IS FURTHER STATED THAT THE LD. CIT(A) ERRED IN ADDING ENTIRE CASH DEPOSIT BEING S ALE PROCEEDS OF RS.41 80 000/ - IN THE INCOME IGNORING APPELLANTS CLAIM OF DEDUCTION OF CORRESPONDING PURCHASE OF RS.37 78 250/ - IN SPITE OF AN AMOUNT OF RS.15 48 810/ - CONFIRMED IN PERSON BEFORE ASSESSING OFFICER(AO) BY SIX SUPPLIERS AND RS.9 11 190/ - ARE ALREADY PAID IN CASH TO OTHER TWO SUPPLIERS OUT OF SAID CASH DEPOSIT AS EVIDENT FIRM BANKS STATEMENT AND REMAINING FOUR SUPPLIERS FOR BALANCE AMOUNT OF RS.13 18 250/ - FOR WANT OF CONFIRMATION DUE TO THEIR NON - AVAILABILITY AT THE RELEVANT TIME. ITA NO. 4182 /MUM/2014 2 3. THE ASSESSEE TRADES IN FISH. HE FILED HIS RETURN INCOME FOR THE A.Y. 2009 - 10 ON 30.09.2009 DECLARING TOTAL INCOME AT RS. 74 921/ - . THE AO CAME TO KNOW FROM THE AIR INFORMATION THAT DURING THE IMPUGNED ASSESSMENT YEAR THE ASSESSEE HAS DEPOSITED CASH OF RS.29 8 0 000/ - IN SARASWAT CO - OPERATIVE BANK. THE AO VIDE NOTICE U/S 142(1) ASKED THE ASSESSEE TO FURNISH DETAILS OF ALL BANK ACCOUNT STATEMENTS. THE ASSESSEE FURNISHED DETAILS OF ONLY ONE SAVING BANK ACCOUNT N O. 0168 MAINTAINED WITH CORPORATION BANK. THE AO THEN CALLED INFORMATION FROM SARASWAT CO - OPERATIVE BANK BY ISSUING NOTICE U/S 133(6) OF THE ACT. IN RESPONSE TO IT THE SAID B ANK PROVIDED COPIES OF BANK ACCOUNT STATEMENT FOR A/C N O. SBPUB 7196 AND ALSO INFORMED THAT THE ASSESSEE IS MAINTAINING JOINT ACCOUNT WITH HIS WIFE AND OPENED A CURRENT ACCOUNT SINCE 2010. THE AO HA VING GONE THROUGH THE BANK ACCOUNT STATEMENT OF A/C N O. 7196 FOUND THAT THE ASSESSEE HAS DEPOSITED CASH OF RS.29 80 000/ - IN SAVINGS BANK ACCOUNT. ON BEING ASKED BY THE AO TO FURNISH DETAILS OF SOURCE OF INCOME OF THESE CASH DEPOSITS AND THE DETAILS OF JOINT ACCOUNTS HELD WITH HIS WIFE AND CURRENT ACCOUNT THE ASSESSEE FURNISHED DETAILS OF THE ABOVE. ON EXAMINATION OF JOINT ACCOUNT THE AO FOUND THAT THERE IS CASH DEPOSIT OF RS.12 00 000/ - AND CURRENT ACCOUNT IS OPENED ON 8 /09/ 2010 . T HE AO THEN ASKED THE ASSESSEE TO FURNISH SOURCE OF INCOME OF CASH DEPOSITS MADE IN HIS INDIVIDUAL ACCOUNT OF RS.29 80 000/ - AND IN JOINT ACCOUNT OF RS.12 00 000/ - WITH SUPPORTING DOCUMENTARY EVIDENCE . THE ASSESSEE VIDE HIS LETTER DATED 14 /11/ 2011 FILED REVISED PROFIT & LOSS ACCOUNT SHOWING TOTAL SALES AT RS.1 47 81 961/ - AND INFORMED THAT HE HAD DEPOSITED SOME CASH IN HIS SAVINGS ACCOUNT IN SARASWAT BANK WHICH WAS SALES IN CASH. THE AO WAS NOT CONVINCED WITH THE ABOVE EXPLANATION OF THE ASSESSEE AS HE FOUND THAT THE ASSESSEE HAS NOT DECLARED HIS INDIVIDUAL ACCOUNT AND JOINT ACCOUNT MAINTAINED WITH SARASWAT BANK IN THE ORIGINAL RETURN FILED. ALSO THE AO FOUND THAT THE ASSESSEE HAS MADE INVESTMENT IN FDRS OF RS.30 00 000/ - IN SARASWAT BANK (RS.18 00 000/ - FROM INDIVIDUAL ACCOUNT AND RS.12 00 000/ - FROM JOINT ACCOUNT ) . THE ASSESSEE HAD NEITHER DECLARED THE FDR IN THE RETURN OF INCOME FILED NOR SHOWN THE INTEREST OF RS.40 786/ - THEREOF IN HIS RETURN OF INCOME. IN VIEW OF THE ABOVE THE AO MADE AN ADDITION OF CASH DEPOSIT OF RS.29 80 000/ - IN A/C NO. SBPUB/7196 AND RS.12 00 000/ - IN A/C NO .SB/11108 MAINTAINED WITH SARASWAT BANK (TOTAL RS.41 80 000/ - ) U/S 69A. THE AO ALSO MADE AN ADDITION OF INTEREST RECEIPT OF RS.40 786 / - ON FDRS MADE FROM THESE CASH DEPOSITS. ITA NO. 4182 /MUM/2014 3 4. THE LD. CIT(A) DURING THE COURSE OF APPELLATE PROCEEDINGS ADMITTED THE ADDITIONAL EVIDENCES FILED BY THE ASSESSEE AS FRESH EVIDENCE UNDER RULE 46A AND SENT IT TO THE AO ASKING HIM TO SEND A REMAND REPORT ON THE ISSUE AFTER MAKING THE NECESSARY INQUIRIES IN THE MATTER. THE AO SENT A REMAND REPORT DATED 19 /02/ 2014 WHICH HAS BEEN EXTRACTED AT PAGE 5 - 9 OF THE ORDER OF THE LD. CIT(A). IN RESPONSE TO A COPY OF THE REMAND REPORT GIVEN TO HIM BY THE LD. CIT(A) THE ASSE SSEE FILED A SUBMISSION DATED 28 /03/ 2014 WHICH HAS BEEN EXTRACTED AT PAGE 9 - 10 OF THE APPELLATE ORDER. HAVING GONE THROUGH THE DETAILS AND REPLY SUBMITTED BY THE ASSESSEE THE LD. CIT(A) OBSERVED THAT THE ONLY CONTENTION OF THE ASSESSEE IS THAT THESE CASH DEPOSITS REPRESENT THE CASH SALES WHICH WERE NOT SHOWN IN THE ORIGINAL RETURN OF INCOME FILED . THE ASSESSEE CONTENDED BEFORE THE LD. CIT(A) THAT THESE CASH DEPOSITS BELONG TO THE CREDITORS WHO WERE PAID IN THE NEXT YEAR BY WITHDRAWING CASH FROM THE BANK A CCOUNT. THE ASSESSEE FAILED TO FILE BEFORE THE LD. CIT(A) DOCUMENTARY EVIDENCE FOR THE SOURCE OF THE CASH DEPOSITS IN THE ABOVE TWO BANK ACCOUNTS . THE ONLY EXPLANATION BY THE ASSESSEE BEFORE HIM WAS THAT IT WAS A PART OF THE CASH SALES AND AUCTION SALE MAD E BY HIM DURING THE PERIOD AND HIS ACCOUNTANT HAD NOT RECORDED THE SALE ENTRIES PROPERLY AT THE TIME OF SUBMITTING THE RETURN OF INCOME AND ALSO SOME OF THE PURCHASE VOUCHERS REMAINED TO BE INCLUDED INTO THE ACCOUNTS . THE LD. CIT(A) ALSO FOUND IT STRANGE THAT THE UNACCOUNTED SALES OF RS.1 47 81 961/ - ARE SHOWN TO HAVE BEEN MADE TO ONE PARTY I.E. M/S VIPUL IMPEX AND INFRA BUILD LTD. WHICH APPEARS TO BE INFRASTRUCTURE CONSTRUCTION COMPANY AND HAS NOTHING TO DO WITH THE FISH BUSINESS OF THE ASSESSEE . ALSO THE ASSESSEE FAILED TO PRODUCE BEFORE THE LD. CIT(A) ANY BILL / VOUCHER IN SUPPORT OF THE ABOVE SALES MADE TO M/S VIPUL IMPEX AND INFRA BUILD LTD. THE LD. CIT(A) THUS CAME TO A FINDING THAT THE CASH DEPOSITS IN BOTH THE BANK ACCOUNTS OF THE ASSESSEE REMAIN UNEXPLAINED. THE LD. CIT(A) ALSO DID NOT ACCEPT THE THEORY PROVIDED BY THE ASSESSEE REGARDING THE CASH DEPOSITS THAT IT RE PRESENTED THE OUTSTANDING PAYMENTS TO THE CREDITORS WHICH WERE PAID OF F IN THE NEXT YEAR IN VIEW OF THE INVESTIGATIONS CARRIED OUT BY THE AO DURING THE REMAND PROCEEDINGS AND THE FINDINGS THEREOF. IN VIEW OF THE ABOVE THE LD. CIT(A) CONFIRMED THE ADDITION OF RS. 41 80 000/ - MADE BY THE AO U/S 69A AND ALSO THE INTEREST EARNED OF RS.40 786/ - FROM FDRS . 5. THE LD. COUNSEL OF THE ASSESSEE REFERRED TO THE REMAND REPORT DATED 19/02/2014 SEN T BY THE AO TO THE LD. CIT(A) AND STATED THAT THE LD. CIT(A) HAS CONCLUDED THAT THE ITA NO. 4182 /MUM/2014 4 ENTIRE TURNOVER OF RS.1 47 81 961/ - MADE TO A SINGLE PARTY I.E. M/S VIPUL IMPEX AND INFRA BUILD LTD. IS UNACCOUNTED SALES DISREGARDING THE FACTS REVEALED IN THE REMAND REPORT THAT THE ABOVE TURNOVER INCLUDES CASH SALES OF RS.41 80 000/ - . A LSO IT WAS SUBMITTED THAT THE LD. CIT(A) FAILED TO APPLY HIS MIND ON THE CONFIRMATION OF CREDITORS STATED IN THE REMAND REPORT AND TOTALLY RELIED ON THE VIEWS OF THE AO AS OUTLINED IN THE REMAND REPORT. 6. THE LD. DR REFERRED TO A/C N O. 7196 OF THE ASSESS EE IN THE SARASWAT CO - OPERATIVE BANK LTD. ALSO HE REFERRED TO THE JOINT ACCOUNT OF THE ASSESSEE WITH HIS WIFE BEARING N O. SB - 11108 IN THE ABOVE B ANK. IT IS STATED BY HIM THAT CASH AMOUNTING TO RS.29 80 000/ - WAS DEPOSITED IN A/C NO. SBPUB/7196 AND RS.12 00 000/ - IN A/C NO. SB/11108 MAINTAINED WITH SARASWAT BANK BY THE ASSESSEE . A ND THAT THE ASSESSEE FAILED TO PROVIDE BEFORE THE AO AND ALSO BEFORE LD. CIT(A) THE SOURCE OF THE ABOVE CASH DEPOSITS. AS THE ACCOUNTS OF THE ASSESSEE ARE AUDITED U/S 44AB IT IS S TATED THAT THE LD. CIT(A) HAS RIGHTLY UPHELD THE ADDITION OF RS.41 80 000/ - MADE BY THE AO U/S 69A OF THE ACT. 7. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND PERUSING THE RELEVANT MATERIAL ON RECORD WE FIND THAT THERE HAS BEEN CASH DEPOSITS OF RS.29 80 000/ - IN A/C NO. SBPUB/7196 AND RS.12 00 000/ - IN A/C NO. SB/11108 MAINTAINED BY THE ASSESSEE WITH SARASWAT BANK. WE FIND THAT THE LD. CIT(A) HAS OBSERVED THAT THE ENTIRE UNACCOUNTED SALES OF RS.1 47 81 961/ - ARE SHOWN TO HAVE BEEN MADE TO ONE PARTY I.E. M/S VIPUL IMPEX AND INFRA BUILD LTD. WHICH APPEARS TO BE AN INFRASTRUCTURE CONSTRUCTION COMPANY AND HAS NOTHING TO DO WITH THE FISH BUSINESS OF THE ASSESSEE . THE ABOVE FINDING S OF THE LD. CIT(A) DO NOT ORIGINATE FROM THE ASSESSMENT ORDER OF THE AO. IN VIEW OF THE ABOVE WE SET ASIDE THE ORDER OF THE LD. CIT(A) AND RESTORE IT TO FILE OF THE AO TO EXAMINE (I) W HETHER OUT OF TOTAL PURCHASES OF RS.37.78 LACS SUPPLIERS WORTH RS.9.11 LACS WERE PAID IN THE SAME YEAR FROM THE SAID SAVINGS ACCOUNT ITSELF AND BALANCE PURCHASES OF RS.29.67 LACS WERE OUTSTANDING AS ON 31 ST MARCH 2009 WHICH WERE PAID OFF IN IMMEDIATE SUBSEQUENT YEAR B EFORE THE COMMENCEMENT OF NEW SEASON AS CLAIMED BY THE ASSESSEE (I I ) W HETHER THE ENTIRE UNACCOUNTED SALES OF RS.1 47 81 961/ - HAVE BEEN MADE TO ONE PARTY M/S VIPUL IMPEX AND INFRA BUILD LTD. WHICH APPEARS TO BE AN INFR ASTRUCTURE CONSTRUCTION COMPANY AS OB SERVED BY THE LD. CIT(A) AND (III) THE SOURCE OF CASH DEPOSITS OF RS.29 80 000/ - IN ACCOUNT NO. SBPUB/7196 AND RS.12 00 000/ - IN ACCOUNT NO. SB/11108 MAINTAINED WITH SARASWAT BANK. ITA NO. 4182 /MUM/2014 5 7.1 AFTER DUE VERIFICATION OF THE ABOVE AND AFTER GIVING REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE THE AO WOULD PASS AN ORDER AS PER THE PROVISIONS OF THE ACT. 8. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNC ED IN THE OPEN COURT ON 30 /09 /2016 SD/ SD/ (SAKTIJIT DEY) (N.K. PRADHAN) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED: 30 /0 9 /2016 A KV (ON TOUR) COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A) - 4. CIT 5. DR ITAT MUMBAI 6. GUARD FILE . BY ORDER //TRUE COPY// (DY./ASSTT. REGISTRAR) ITAT MUMBAI