ITO WD 21(3)(2), MUMBAI v. SANDEEP KUMAR SAHU, MUMBAI

ITA 918/MUM/2013 | 2009-2010
Pronouncement Date: 19-11-2014

Appeal Details

RSA Number 91819914 RSA 2013
Assessee PAN EMBER2014S
Bench Mumbai
Appeal Number ITA 918/MUM/2013
Duration Of Justice 1 year(s) 9 month(s) 15 day(s)
Appellant ITO WD 21(3)(2), MUMBAI
Respondent SANDEEP KUMAR SAHU, MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 19-11-2014
Appeal Filed By Department
Bench Allotted E
Tribunal Order Date 19-11-2014
Date Of Final Hearing 13-11-2014
Next Hearing Date 13-11-2014
Assessment Year 2009-2010
Appeal Filed On 04-02-2013
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH MUMBAI JH FOT; IKY JKO] U;KF;D LNL; JH FOT; IKY JKO] U;KF;D LNL; JH FOT; IKY JKO] U;KF;D LNL; JH FOT; IKY JKO] U;KF;D LNL; OA OA OA OA JH CH JH CH JH CH JH CH- -- - VKJ VKJVKJ VKJ- -- - CKLDJ.K] YS[KK LNL; CKLDJ.K] YS[KK LNL; CKLDJ.K] YS[KK LNL; CKLDJ.K] YS[KK LNL; DS LE{K DS LE{K DS LE{K DS LE{K BEFORE SHRI VIJAY PAL RAO JUDICIAL MEMBER AND SHRI B.R. BASKARAN ACCOUNTANT MEMBER ITA NO.918/MUM/2013 ASSESSMENT YEAR: - 2009-10 I.T.O -21(3)(2) ROOM NO. 508 5 TH FLOOR PRATYAKSHAKAR BHAVAN BANDRA-KURLA COMPLEX BANDRA MUMBAI. V S. ` SHRI SANDEEP KUMAR SAHU ROOM NO. 10 1 ST FLOOR BATTI WALA SOCIETY HANUMAN LANE TAKAWAD KURLA (W) MUMBAI 400 070. APPELLANT RESPONDENT CO NO. 50/MUM2014 ARISING OUT OF ITA NO. 918/MUM/2013 ASSESSMENT YEAR 2009-10 SHRI SANDEEP KUMAR SAHU ROOM NO. 10 1 ST FLOOR BATTI WALA SOCIETY HANUMAN LANE TAKAWAD KURLA (W) MUMBAI 400 070. V S. ` I.T.O -21(3)(2) ROOM NO. 508 5 TH FLOOR PRATYAKSHAKAR BHAVAN BANDRA-KURLA COMPLEX BANDRA MUMBAI. APPELLANT RESPONDENT ORDER PER VIJAY PAL RAO JM THIS APPEAL BY THE REVENUE AND CROSS OBJECTION BY TH E ASSESSEE ARE DIRECTED AGAINST THE ORDER DATED 5.11.2012 OF CIT( A) FOR THE A.Y. 2009-10. THE REVENUE HAS RAISED FOLLOWING GROUNDS:- REVENUE BY SHRI NEIL PHILIP ASSESSEE BY SHRI ARJUN SAINI DATE OF HEARING 13.11.2014 DATE OF PRONOUNCEMENT 19-11-2014 SHRI SANDEEP KUMAR SAHU 2 | P A G E 1 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE CIT(A) HAS ERRED IN RESTRICTING THE ADDITION OF RS. 11 78 031/- MADE ON ACCOUNT OF CASH DEPOSITS TO THE EXTENT OF RS. 86 26 3/- BY NOT CONSIDERING THAT THE ASSESSEE HAD FAILED TO SUBMIT ANY EXPLANAT ION/DETAILS DURING THE COURSE OF ASSESSMENT PROCEEDINGS. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW THE CIT(A) HAS ERRED IN DELETING THE ADDITION MADE OF R S. 2 48 000/- BY ADMITTING ADDITIONAL EVIDENCES IN CONTRAVENTION TO RULE 46A DURING THE COURSE OF APPEAL PROCEEDINGS. 2. GROUND NO. 1 AND 2 IS REGARDING DELETION OF ADDIT ION MADE BY ASSESSING OFFICER ON ACCOUNT OF CASH DEPOSITS IN THE BANK ACCOU NT U/S 68 OF INCOME TAX ACT. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER ASKED THE ASSESSEE TO SUBMIT THE COMPLETE BANK STATEMENT S OURCE OF CASH DEPOSITED IN THE BANK ACCOUNT CASH BOOK CASH FLOW STATEMENT AN D DETAILS OF OTHER DEPOSITS IN ICICI BANK. THE ASSESSEE NEITHER ATTENDE D ON THE APPOINTED DATE I.E. 5.9.2011 NOR FURNISHED ANY DETAIL AS REQUIRED B Y THE ASSESSING OFFICER. THE ASSESSING OFFICER AGAIN VIDE LETTER DATED 27.09.2011 CALLED UPON FOR CERTAIN INFORMATION ON 5.10.2011 WHICH WAS RECEIVED BACK UN- SERVED BY THE POSTAL AUTHORITY. CONSEQUENTLY THE ASSESSING OFFICER AGAIN CALLED UPON THE ASSESSEE VIDE LETTER DATED 27.10.2011 TO FURNISH THE DETAILS A ND OTHER RELEVANT INFORMATION AND EVIDENCE WITH RESPECT TO THE CASH DEPO SITS OF RS. 11 06 031/- WITH THE ICICI BANK AND RS. 2 00 000 WITH PUNJAB NATI ONAL BANK. DESPITE THE REPEATED LETTERS ISSUED BY THE ASSESSING OFFICER THE ASSESSEE DID NOT FILE ANY DETAILS. ACCORDINGLY THE ASSESSING OFFICER MADE THE AD DITION OF RS. 11 78 031/- ON ACCOUNT OF CASH DEPOSIT IN ICICI BANK AS WELL AS THE ADDITION OF RS. 2 00 000/- ON ACCOUNT OF CASH DEPOSIT IN THE PUNJAB N ATIONAL BANK. THE ASSESSING OFFICER HAS ALSO MADE AN ADDITION OF RS. 48 800/- AS INTEREST CREDITED TO THE SAVINGS BANK ACCOUNT MAINTAINED WITH I CICI BANK. THUS THE SHRI SANDEEP KUMAR SAHU 3 | P A G E TOTAL ADDITION ON ACCOUNT OF BANK DEPOSIT AND INTER EST WAS MADE BY THE ASSESSING OFFICER AMOUNTING TO RS. 14 31 713/-. 3. ON APPEAL BEFORE THE CIT(A) THE ASSESSEE SUBMITT ED THAT IT RUNS A SMALL TRADING SHOP IN READYMADE GARMENTS AND ALL PURCHASES A ND SALES ARE IN CASH ONLY. THE CASH DEPOSITED IN THE BANK A/C IS OUT OF DA ILY CASH SALES ONLY AND WITHDRAWALS ARE MADE FROM SAID A/C FOR MAKING PURCHAS ES. IT WAS FURTHER SUBMITTED THAT THE AMOUNT OF RS. 2 00 000/- WAS RECEI VED BY THE ASSESSEE AS REFUND OF SECURITY DEPOSIT ON EXPIRY OF RENT AGREEME NT WHEREAS THE AMOUNT OF RS. 48 800/- WAS THE CREDIT ON MATURITY OF TERM DEPO SIT. THE ASSESSEE PRODUCED THE RENT AGREEMENT AS WELL AS OTHER DOCUMENT S REGARDING THE DEPOSITS OF RS. 2 00 000/- AND 48 800/- BEFORE THE C IT(A). AFTER CONSIDERING THE EXPLANATION AS WELL AS THE DOCUMENTARY EVIDENCE F ILED BY THE ASSESSEE THE CIT(A) HAS RESTRICTED THE ADDITION TO RS. 86 263/- A ND THEREFORE THE SUBSTANTIAL ADDITION MADE BY THE ASSESSING OFFICER O N ACCOUNT OF CASH DEPOSITS AND CREDIT IN THE BANK A/C WAS DELETED. 4. BEFORE US THE LD. DR HAS SUBMITTED THAT DESPITE RE PEATED LETTERS AND NOTICES ISSUED BY THE ASSESSING OFFICER THE ASSESSEE DID NOT RESPOND OR FILED ANY DETAIL REQUIRED BY THE ASSESSING OFFICER. THE CIT( A) HAS CONSIDERED THE EXPLANATION AS WELL AS FRESH EVIDENCE OF THE ASSESSEE WITHOUT GIVING AN OPPORTUNITY TO THE ASSESSING OFFICER TO REBUT THE SA ME. EVEN THE EVIDENCE AND EXPLANATION FURNISHED BEFORE THE CIT(A) WERE NOT ALLO WED TO BE VERIFIED BY THE ASSESSING OFFICER. THUS THE LD. DR HAS SUBMITTED THAT T HE CIT(A) HAS CONSIDERED THE ADDITIONAL EVIDENCES AS WELL AS FRESH EXPLANATION AND DETAILS FILED BY THE ASSESSEE IN CONTRAVENTION OF RULE 46A O F THE INCOME TAX RULES. SHRI SANDEEP KUMAR SAHU 4 | P A G E 5. ON THE OTHER HAND THE LD. AUTHORIZED REPRESENTATIV E OF THE ASSESSEE HAS SUBMITTED THAT ALL THE DETAILS WERE AVAILABLE BEFORE THE ASSESSING OFFICER IN THE SHAPE OF ACCOUNTS AS WELL AS THE BANK STATEMENTS. AS REGARDS THE ADDITIONAL EVIDENCE PRODUCED BEFORE THE CIT(A) THE LD. AUTHORIZE D REPRESENTATIVE HAS NOT DISPUTED THIS FACT THAT THOSE WERE NOT PRODUCED B EFORE THE ASSESSING OFFICER. THE LD. AUTHORIZED REPRESENTATIVE HAS SUBMIT TED THAT THE EVIDENCE PRODUCED BY THE ASSESSEE DOES NOT REQUIRE ANY VERIFI CATION AND THE CIT(A) HAS CONSIDERED THE SAME WHILE PASSING THE IMPUGNED ORDER. T HEREFORE NO ADDITION WAS JUSTIFIED ON ACCOUNT OF CASH DEPOSITED IN THE BAN K ACCOUNT WHEN THE ASSESSEE IS A SMALL TRADER AND THE DEPOSITS IN THE BA NK WAS OUT OF CASH SALES OF THE ASSESSEE AND FURTHER THE ASSESSEE HAS BROUGHT ON REC ORD THE DEPOSITS IN THE PUNJAB NATIONAL BANK AS REFUND OF SECURITY IN THE RE NT AGREEMENT AND ANOTHER AMOUNT OF RS. 48 800/- AS INTEREST CREDITED ON MATU RITY OF FIXED DEPOSIT. THE LD. AUTHORIZED REPRESENTATIVE HAS SUBMITTED THAT THE E VIDENCE PRODUCED BY THE ASSESSEE IS BEYOND ANY DOUBT AND WAS RIGHTLY ACCEP TED BY THE CIT(A). 6. HAVING CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS RELEVANT MATERIAL ON RECORD WE NOTE THAT THE ASSESSEE HAD FAILED EVEN TO P RODUCE THE BARE MINIMUM DETAILS AND EVIDENCE IN SUPPORT OF CASH DEPOSITED I N THE BANK AND FURTHER THE ASSESSEE HAS NOT EXPLAINED BEFORE THE ASSESSING OFFICE R REGARDING THE DEPOSITS OF RS. 2 00 000/- AS WELL AS THE CREDIT OF RS. 48 80 0/- IN THE PUNJAB NATIONAL BANK AS WELL AS IN THE CKP CO-OPERATIVE BANK LTD. RESPECTIVELY. THE ASSESSING OFFICER HAS ISSUED THE REPEATED LETTERS AND REMINDERS FOR PRODUCTION OF DETAILS AND RELEVANT DOCUMENTARY EVIDENCE TO EXP LAIN THE CASH DEPOSIT AND THEREFORE ON FAILURE ON THE PART OF THE ASSESSEE TO PRODUCE ANY EVIDENCE OR DETAIL OR EXPLANATION THE ASSESSING OFFICER MADE THE ADDITION IN QUESTION. BEFORE THE CIT(A) THE ASSESSEE CAME OUT WITH THE EXPLAN ATION THAT THE CASH DEPOSITED IN THE BANKS ARE FROM THE CASH SALES PROCEED S. AS FAR AS THE DEPOSITS SHRI SANDEEP KUMAR SAHU 5 | P A G E IN THE ICICI BANK ARE CONCERNED THE ASSESSEE HAS ALSO FURNISHED THE FRESH EVIDENCE IN THE SHAPE OF RENT AGREEMENT TO SHOW THE DE POSIT OF RS. 2 00 000/- BEING SECURING REFUND OF RENT AGREEMENT AND ANOTHER C REDIT OF RS. 48 800/- BEING INTEREST ON MATURITY OF FIXED DEPOSITS. UNDI SPUTEDLY THE CIT(A) HAS CONSIDERED THE FRESH EVIDENCE AS WELL AS THE EXPLANATI ON FIRST TIME FURNISHED BY THE ASSESSEE WITHOUT GIVING AN OPPORTUNITY TO THE ASS ESSING OFFICER TO EXAMINE AND REBUT THE SAME. THEREFORE WE ARE OF THE VIEW THAT THERE IS A VIOLATION OF RULE 46A WHEN THE CIT(A) HAS CONSIDERED THE FRESH EXPLA NATION AND DETAILS AS WELL AS EVIDENCE WITHOUT GIVING OPPORTUNITY TO THE AS SESSING OFFICER. HENCE THE ISSUE OF ADDITION ON ACCOUNT OF CASH DEPOSITED IN THE BANK ACCOUNT AS RAISED IN GROUND NO. 1 AND 2 OF THE REVENUES APPEAL IS SET ASIDE TO THE RECORD OF ASSESSING OFFICER TO VERIFY THE FRESH EVIDENCE FIL ED BY THE ASSESSEE AS WELL AS THE EXPLANATION AND THEN DECIDE THE SAME AS PER LAW. 7. IN THE CROSS OBJECTION THE ASSESSEE HAS RAISED FO LLOWING GROUNDS:- 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) ERRED IN TREATING BOGUS CREDITORS TO THE TUN E OF RS. 86 263/- 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE LD. CIT(A) ERRED IN NOT ALLOWING DEDUCTION U/S 80GG OF THE INCOME TAX ACT 1961. 8. GROUND NO. 1 IS REGARDING THE PART CONFIRMATION OF ADDITION ON ACCOUNT OF CASH DEPOSITED IN THE BANK TO THE EXTENT OF RS. 86 263 /-. 9. THE LD. AUTHORIZED REPRESENTATIVE OF THE ASSESSEE HA S SUBMITTED THAT WHILE RESTRICTING THE ADDITION THE CIT(A) HAS NOT CONS IDERED THE OPENING BALANCE OF THE CREDITORS AND THEREFORE THE ADDITION CONFIRMED BY THE CIT(A) IS NOT SUSTAINABLE IF THE OPENING BALANCE OF THE CREDI TORS IS TAKEN INTO ACCOUNT. SHRI SANDEEP KUMAR SAHU 6 | P A G E 10. HAVING CONSIDERED THE SUBMISSIONS OF LD. AUTHORIZE D REPRESENTATIVE AS WELL AS LD. DR AND CAREFUL PERUSAL OF RELEVANT RECO RD WE NOTE THAT THE ASSESSEE HAS SHOWN A SUM OF RS. 83 800/- UNDER THE HEAD LOAN FR OM OTHERS IN THE BALANCE SHEET AS ON 31.03.2008. THE SAID AMOUNT IS A CLOSING BALANCE AND WILL BE THE OPENING BALANCE FOR THE A.Y. UNDER CONSIDERATIO N THEREFORE THIS FACT REQUIRES VERIFICATION. ACCORDINGLY WE SET ASIDE THI S ISSUE TO THE RECORD OF ASSESSING OFFICER AND DIRECT THE ASSESSING OFFICER THAT AT THE TIME OF DECIDING THE ISSUE OF CASH CREDIT AS ALREADY SET ASIDE IN THE R EVENUES APPEAL THE ISSUE RAISED BY THE ASSESSEE IN CROSS OBJECTION ALSO REQUI RES TO BE EXAMINED. 11. GROUND NO. 2 IS REGARDING REJECTION OF CLAIM OF DEDUCTION U/S 80GG. 12. THE LD. AUTHORIZED REPRESENTATIVE OF THE ASSESSEE HAS SUBMITTED THAT THE CIT(A) HAS REJECTED THE CLAIM OF THE ASSESSEE ON THE GR OUND THAT THE RENT PAID BY THE ASSESSEE AS PER THE RENT AGREEMENT PERTAINS TO SHOP WHICH HAS ALREADY BEEN ALLOWED AS BUSINESS EXPENDITURE THEREFORE THE CLAIM OF THE ASSESSEE U/S 80GG IS REGARDING THE RENT OF RESIDENTIAL ACCOMMODAT ION WAS DISALLOWED BY THE CIT(A). HE HAS POINTED OUT THAT THE ASSESSEE FILED COPIES OF TWO AGREEMENTS ONE IS REGARDING SHOP AND ANOTHER DATED 4.6.2008 REG ARDING THE HOUSE ACCOMMODATION. THEREFORE THE CIT(A) HAS IGNORED THE RE LEVANT AGREEMENTS WHILE DECIDING THE ISSUE OF DEDUCTION U/S 80GG. 13. THE LD. DR HAS SUBMITTED THAT THESE CLAIMS WERE MAD E BY THE ASSESSEE BEFORE THE CIT(A) AND THEREFORE WERE NOT EXAMINED B Y THE ASSESSING OFFICER. 14. HAVING CONSIDERED THE RIVAL SUBMISSIONS AS WELL A S RELEVANT MATERIAL ON RECORD WE NOTE THAT WHILE DECIDING THE ISSUE OF DEDUCT ION U/S 80GG THE CIT(A) HAS HELD THAT THE AGREEMENT DATED 14.08.2008 PER TAINS TO SHOP NO. 7 SHRI SANDEEP KUMAR SAHU 7 | P A G E AND THE RENT PAID BY THE ASSESSEE HAS BEEN CLAIMED IN THE PROFIT & LOSS ACCOUNT AS BUSINESS EXPENDITURE THEREFORE NO DEDUCTION U/S 80GG IS AVAILABLE TO THE ASSESSEE. WE FIND THAT THE ASSESSEE IS CLAIMING THE DE DUCTION U/S 80GG REGARDING THE RENT PAID FOR THE HOUSE ACCOMMODATION VIDE AGREEMENT DATED 4.06.2008 AND NOT REGARDING THE RENT PAID FOR THE SHOP VIDE AGREEMENT DATED 14.08.2008. ACCORDINGLY IN THE FACTS AND CIRCUMSTA NCES OF THE CASE WE SET ASIDE THIS ISSUE TO THE RECORD OF ASSESSING OFFICER FO R CONSIDERING THE CLAIM OF THE ASSESSEE AFTER EXAMINATION OF THE RELEVANT EVIDE NCE INCLUDING THE RENT AGREEMENT AS WELL AS PAYMENT OF RENT BY THE ASSESSEE . 15. IN THE RESULT APPEAL OF THE REVENUE AND CO OF THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 19 TH DAY OF NOVEMBER 2014 SD/- SD/- (B.R.BASKARAN) (VIJAY PAL RAO) (ACCOUNTANT MEMBER/ YS[KK LNL; YS[KK LNL; YS[KK LNL; YS[KK LNL; ) (JUDICIAL MEMBER/ U;KF;D LNL; U;KF;D LNL; U;KF;D LNL; U;KF;D LNL; ) MUMBAI DATED 19-11 -2014 SKS SR. P.S COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CONCERNED CIT(A) 4. THE CONCERNED CIT 5. THE DR E BENCH ITAT MUMBAI BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES MUMBAI