ASHOK V. GOKANI, MUMBAI v. ITO WD 25(3)(3), MUMBAI

ITA 4486/MUM/2015 | 2008-2009
Pronouncement Date: 30-09-2016

Appeal Details

RSA Number 448619914 RSA 2015
Bench Mumbai
Appeal Number ITA 4486/MUM/2015
Duration Of Justice 1 year(s) 2 month(s)
Appellant ASHOK V. GOKANI, MUMBAI
Respondent ITO WD 25(3)(3), MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 30-09-2016
Appeal Filed By Assessee
Bench Allotted D
Tribunal Order Date 30-09-2016
Assessment Year 2008-2009
Appeal Filed On 30-07-2015
Judgment Text
1 I.T.A. NO.4486/MUM/2015 IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES D MUMBAI BEFORE SHRI SANJAY GARG (JUDICIAL MEMBER) AND SHRI ASHWANI TANEJA (ACCOUNTANT MEMBER) I.T.A. NO.4486/MUM/2015 (ASSESSMENT YEAR: 2008-09) SHRI ASHOK V GOKANI F-401 PUSHPA HERITAGE OFF GOKHALE ROAD KANDIVALI (W) MUMBAI 67 VS THE ITO WD.25(3)(3) MUMBAI PAN : (APPELLANT) (RESPONDENT) APPELLANT BY SHRI GYANESHWAR KATARAM RESPONDENT BY SHRI B.S. BIST ( DR) DATE OF HEARING : 28-09-2016 DATE OF PRONOUNCEMENT : 30 -09-2016 O R D E R PER ASHWANI TANEJA AM: THIS APPEAL HAS BEEN FILED AGAINST THE ORDER OF TH E COMMISSIONER OF INCOME-TAX (APPEALS)-45 MUMBAI (HEREINAFTER CALLED CIT(A)] DATED 31-03-2015 PASSED AGAINST THE PENALTY ORDER OF THE AO U/S 271( 1)(C) DATED 09-01-2013 FOR A.Y. 2008-09. 2 I.T.A. NO.4486/MUM/2015 2. THE BRIEF BACKGROUND AND FACTS OF THE CASE FOR LEVY ING THE PENALTY BY THE AO WAS THAT RETURN OF INCOME WAS FILED ON 31ST MARC H 2009 AT A TOTAL INCOME OF RS.92 765/ . THE ASSESSEE IS PROPRIETOR OF M/S BEARING TRADE CENTRE ENGAGED IN THE BUSINESS OF TRA DING IN BEARINGS. DURING THE YEAR THE AO HAD AIR INFORMATION THAT TH ERE WAS CASH DEPOSIT OF RS.12 30 167/- IN THE SAVINGS BANK ACCOU NT MAINTAINED WITH THE IDBI BANK LTD. A SHOW CAUSE NOTICE WAS ISS UED TO THE ASSESSEE TO SUBMIT THE DETAILS OF CASH DEPOSITS IN THE BANK ACCOUNT. THE ASSESSEE SUBMITTED THAT THE ACCOUNT CO NTAINS THE RECEIPT FROM OTHER STATES RELATED TO THE TRADING BU SINESS. THE AMOUNT HAS BEEN WITHDRAWN IN MUMBAI. THE ASSESSEE H AS SHOWN THE CASH SALES IN THE PROPRIETARY CONCERN DUR ING THE YEAR OF RS.3 48 400/-. THE AO REFERRED TO THE DECISION I N THE CASE OF ALUMINIUM SMALL INDUSTRIES VS ITO (KOL.) 103 LTD 14 2 WHEREIN IT WAS HELD THAT THE ONUS WAS ON THE ASSESSEE TO PROVE PRIMA FACIE ITS CASE U/S 68 WITH REGARD TO SOURCE OF THE DEPOSITS. THE A MOUNT OF RS.8 81 767/- WAS ADDED BACK AS EXPLAINED. AS REGAR DS THE EXPLANATION REGARDING THE REMAINING CASH DEPOSITS O F RS.3 48 01/- THOUGH THE ASSESSEE HAD SUBMITTED THAT THESE WERE O UT OF CASH SALES HOWEVER AS PER AO IT WAS NOTICED BY HIM THAT FROM T HE CASH BOOK ONLY AN AMOUNT OF RS.23 105/ WAS DEPOSITED IN THE IDBI B ANK. THEREFORE THE ASSESSEES EXPLANATION WITH RESPECT TO THE REST OF THE CASH DEPOSITS OF RS.3 25 295/- WAS NOT ACCEPTED. THUS KEEPING BO TH THE AMOUNT TOGETHER THE ADDITION ON ACCOUNT OF UNEXPLAINED CA SH CREDITS WAS MADE AT RS.12 07 062/-. SUBSEQUENTLY THE AO ISSUED NOTI CE U/S 271(1)(C) AND PENALTY OF RS.3 84 028/- HAS BEEN IMPOSED CONSIDERING THAT THE ASSESSEE WAS NOT ABLE TO EXPLAIN THE SOURC E OF 3 I.T.A. NO.4486/MUM/2015 RS.12 07 062/-. AGGRIEVED THE ASSESSEE FILED APPE AL BEFORE THE CIT(A) AND EXPLAINED IN DETAIL THAT IN THIS CASE TH OUGH THE ADDITION WAS MADE FOR WANT OF PROPER EVIDENCES BUT THE AO COULD NOT ESTABLISH THAT THE AMOUNT ADDED BY HIM WAS CONC EALED INCOME OF THE ASSESSEE AND PLEADED FOR DELETING THE PENALTY BUT LD.CIT(A) WAS NOT SATISFIED AND THEREFORE THE APP EAL OF THE ASSESSEE WAS DISMISSED AND PENALTY LEVIED BY THE AO WAS CONFIRMED. BEING AGGRIEVED THE ASSESSEE IS IN APP EAL BEFORE THE TRIBUNAL. 3. WE HAVE HEARD BOTH THE PARTIES ON THIS ISSUE. IT I S NOTED THAT THE ADDITION HAS BEEN CONFIRMED BY THE TRIBUNAL INTER-ALIA ON THE GROUND THAT THE ASSESSEE WAS NOT ABLE TO PROVE THAT THE AMOUNT WITHDRAWN FROM ONE BANK ACCOUNT OF THE ASSESSEE WAS DEPOSITED IN OTHER BANK ACCOUNT OF THE ASSESSEE. WE HAVE CAR EFULLY GONE THROUGH THE ORDERS PASSED BY LOWER AUTHORITIES AS W ELL AS THE ORDER OF THE TRIBUNAL FOR UPHOLDING THE ADDITION MA DE IN THE QUANTUM PROCEEDINGS. WE FIND THAT ADDITION WAS MAD E ON THE GROUND THAT THE ASSESSEE WAS NOT ABLE TO PROVE THE AMOUNT OF CASH DEPOSITED IN HIS BANK ACCOUNT AGGREGATING TO R S.12 07 062/-. IT IS NOTED FROM THE PERUSAL OF THE ORDER OF THE TR IBUNAL THAT ASSESSEE HAD CONTESTED THE ADDITION ON FOLLOWING FO UR PROPOSITIONS AS REPRODUCED BY THE ITAT IN ITS ORDE R: 1) SECTION 68 IS NOT APPLICABLE AS THE AMOUNT WAS FOUND CREDITED IN THE BANK AND THE BANK STATEMENT CANNOT BE CONSTRUED AS BOOK OF THE ASSESSEE. THE LD. COUNSEL RELIED UPON THE DECISION OF LUCKNOW BENCH OF ITAT 143 ITD 686 AND ON THE DECISION OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF BHAICHAND H. GANDHI 141 ITR 67. 4 I.T.A. NO.4486/MUM/2015 2) ONLY PEAK CREDIT SHOULD HAVE BEEN ADDED WHICH WAS O N SEPTEMBER 2007 AT RS. 1 61 074/- 3) THE ASSESSEE SHOULD ALSO GET THE BENEFIT OF CASH SA LES AMOUNTING TO RS. 3 48 400/-. 4) SINCE THE ASSESSEE IS A TRADER AND THE DEPOSITS AND WITHDRAWALS IN THE SAID BANK ACCOUNT RELATE TO THE TRADING BUSINESS OF THE ASSESSEE ONLY GROSS PROFIT SHOULD HAVE BEEN ADDED. 3.1. DURING THE COURSE OF HEARING BEFORE US IT HAS BEE N VEHEMENTLY ARGUED THAT THOUGH THE ADDITION WAS CONF IRMED ON THE GROUND THAT THE ASSESSEE COULD NOT SUBSTANTIATE THE DEPOSITS WITH OVERWHELMING EVIDENCES BUT THE FACT REMAINS T HAT WHILE CONFIRMING THE ADDITIONS ALL THE FOUR PROPOSITIONS NOTED ABOVE HAVE NOT BEEN PROPERLY DEALT WITH IN ITS ORDER BY T HE HONBLE TRIBUNAL WHILE CONFIRMING THE ADDITION. THUS THOU GH ADDITION MADE BY THE AO WAS CONFIRMED BUT THE SAME BEING ILL EGAL CAN BE INDEPENDENTLY CONTESTED AGAIN BY THE ASSESSEE IN TH E PENALTY PROCEEDINGS ON ALL THE GROUNDS TO SHOW THAT THERE W AS NO CONCEALMENT OF INCOME. 3.2. WE HAVE GONE THROUGH THE ORDERS OF LOWER AUTHORITI ES AND SUBMISSIONS MADE BY BOTH SIDES. WE FIND FORCE IN TH E ARGUMENTS OF LD. COUNSEL OF THE ASSESSEE AS NOTED IN ABOVE PA RA. FURTHER WHEN THE AMOUNT HAS BEEN ADMITTEDLY WITHDRAWN FROM ONE BANK ACCOUNT UNLESS CONTRARY IS PROVED BY THE REVENUE IT CANNOT BE TOTALLY RULED OUT THAT CASH MAY HAVE BEEN AVAILABLE WITH THE ASSESSEE TO BE DEPOSITED IN ANOTHER BANK ACCOUNT OF THE ASSESSEE. THUS IT CAN BE SAID THAT AT THE WORST THE CASE OF THE ASSESSEE REMAINED UNPROVED WHEREAS BEFORE LEVYING THE PENALTY THE AO IS REQUIRED TO DISPROVE THE CASE OF THE ASSE SSEE. FURTHER 5 I.T.A. NO.4486/MUM/2015 ASSESSEES ARGUMENT THAT IN ANY CASE THE WHOLE OF AMOUNT COULD NOT HAVE BEEN ADDED AS ONLY PEAK AMOUNT COULD HAVE BEEN ADDED HAS NOT BEEN PROPERLY ANALYSED ON FACTS. TH EREFORE THE QUANTUM OF ADDITION IS ALSO SUBJECT TO IFS AND BUTS THUS UNDER THE SHADOW OF DOUBTS. FURTHER THE ARGUMENTS OF TH E ASSESSEE THAT THE AO HAD MADE ADDITION U/S 68 WHICH WAS BEYO ND JURISDICTION AS NO ADDITION COULD HAVE BEEN MADE U/ S 68 ON ACCOUNT OF CASH DEPOSIT IN THE BANK ACCOUNT IN VIEW OF THE DIRECT JUDGEMENT OF THE HONBLE BOMBAY HIGH COURT IN THE C ASE OF BHAICHAND H GANDHI 141 ITR 67 (BOM) ALSO REMAINED T O BE ADDRESSED BY THE REVENUE. ON THIS GROUND ALSO ADDI TION WAS NOT STRICTLY WITHIN THE FOUR CORNERS OF LAW. THUS IT IS NOT A FIT CASE FOR LEVY OF PENALTY. 3.3. WE HAVE CONSIDERED ALL THE ARGUMENTS AND FACTS AND CIRCUMSTANCES OF THE CASE AND FIND THAT IN THIS CAS E PENALTY SHOULD NOT BE LEVIED. WE FURTHER DERIVE OUR SUPPORT FROM JUDGMENT OF HONBLE BOMBAY HIGH COURT IN THE CASE O F U PENDRA V.M ITHANI ( INCOME TAX APPEAL (L) NO.1860 OF 2009 5TH AUGUST 2009) WHEREIN THEIR LORDSHIPS HAD OBSERVED AS UNDER: THE ISSUE INVOLVED IN THE APPEAL REVOLVES AROU ND DELETION OF PENALTY UNDER SECTION 271(1)(C) OF THE I.T.ACT. TH E TRIBUNAL HAS CONCURRED WITH THE VIEW TAKEN BY THE COMMISSIONER O F INCOME TAX (A). THE COMMISSIONER OF INCOME TAX (A) H AS RIGHTLY TAKEN A VIEW THAT NO PENALTY CAN BE IMPOSED IF THE FACTS AND CIRCUMSTANCES ARE EQUALLY CONSISTENT WITH THE HYPOT HESIS THAT THE AMOUNT DOES NOT REPRESENT CONCEALED INCOME AS W ITH THE 6 I.T.A. NO.4486/MUM/2015 HYPOTHESIS THAT IT DOES. IF THE ASSESSEE GIVES AN EXPLANATION WHICH IS UNPROVED BUT NOT DISPROVED I.E. IT IS NOT ACCEPTED BUT CIRCUMSTANCES DO NOT LEAD TO THE REASONABLE AND POS ITIVE INFERENCE THAT THE ASSESSEES CASE IS FALSE. THE V IEW TAKEN BY THE TRIBUNAL IS A REASONABLE AND POSSIB LE VIEW. THE APPEAL IS WITHOUT ANY SUBSTANCE. THE SAME IS D ISMISSED IN LIMINE WITH NO ORDER AS TO COSTS. THUS TAKING INTO ACCOUNT ALL PECULIAR FACTS OF THE CASE AND THE LEGAL POSITION AS DISCUSSED ABOVE WE FIND THAT NEI THER CONCEALMENT NOR FURNISHING OF PARTICULARS OF INCOME COULD BE ESTABLISHED BY THE AO IN THIS CASE THEREFORE PENA LTY SHOULD NOT BE LEVIED IN THIS CASE AND THEREFORE THE SAME IS DIRECTED TO BE DELETED. 4. IN THE RESULT APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE COURT ON THIS 30 TH DAY OF SEPTEMBER 2016. (SANJAY GARG) (ASHWANI TANEJA) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI DT : 30 TH SEPTEMBER 2016 PK/- COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. THE CIT 5. THE LD. DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE D-BENCH (TRUE COPY) BY ORDER 7 I.T.A. NO.4486/MUM/2015 ASSTT.REGISTRAR ITAT MUMBAI BENCHES