M/S. ANISH RAMNIKLAL GUDHKA, KALYAN - v. THE ACIT, CIR-1, KALYAN

ITSSA 2/MUM/2006 | misc
Pronouncement Date: 03-07-2013 | Result: Partly Allowed

Appeal Details

RSA Number 219916 RSA 2006
Assessee PAN AAWPG6143L
Bench Mumbai
Appeal Number ITSSA 2/MUM/2006
Duration Of Justice 7 year(s) 5 month(s) 30 day(s)
Appellant M/S. ANISH RAMNIKLAL GUDHKA, KALYAN -
Respondent THE ACIT, CIR-1, KALYAN
Appeal Type Income Tax (Search & Seizure) Appeal
Pronouncement Date 03-07-2013
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted H
Tribunal Order Date 03-07-2013
Date Of Final Hearing 01-07-2013
Next Hearing Date 01-07-2013
Assessment Year misc
Appeal Filed On 04-01-2006
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL H BENCH MUMBAI .. ! '#$ % % % % &'. '.(.. %) * '#$ '+ BEFORE SHRI P.M. JAGTAP AM AND DR. S.T.M. PAVALAN JM ( - . /01 ) './ IT(SS)A. NO. 02/MUM/2006 (BLOCK PERIOD 1-4-1989 TO 28-3-2000) SHRI ANISH RAMNIKLAL GUDHKA C/O A.M. UNADKAT 2/29 PREM KRUPA SOCIETY OAK BAGH NEAR ICE FACTORY KALYAN (W) 421301. DIST. THANE. ) ) ) ) / VS. ASSTT. COMMISSIONER OF INCOME TAX- CIR.1 2 ND FLOOR RANI MANSION MURBAD ROAD KALYAN. $4 ! './ PAN : AAWPG6143L ( 45 / // / APPELLANT ) .. ( 6745 / RESPONDENT ) 45 8 9 ' / APPELLANT BY : SHRI K. GOPAL 6745 8 9 ' / RESPONDENT BY : SHRI K.C.P. PATNAIK ')% 8 ! / // / DATE OF HEARING : 01-07-2013 :;< 8 ! / DATE OF PRONOUNCEMENT : 03.07.2013 # - / O R D E R PER P.M. JAGTAP A.M . : .. ! '#$ THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER OF THE LD. CIT(A) 1 THANE DTD. 28-9-2005. IT(SS)A 02/MUM/2006 2 2. THE FIRST ISSUE RAISED IN GROUND NO. 1 OF THIS A PPEAL RELATES TO THE ADDITION OF RS. 15 92 280/- MADE BY THE A.O. AND CO NFIRMED BY THE LD. CIT(A) ON ACCOUNT OF CASH DEPOSITED BY THE ASSESSEE IN BAN K ACCOUNT TREATING THE SAME AS UNDISCLOSED INCOME OF THE ASSESSEE. 3. THE ASSESSEE IN THE PRESENT CASE IS AN INDIVIDUA L WHO IS ENGAGED IN THE BUSINESS OF SHARE TRADING. HE IS ALSO A PARTNER IN THE PARTNERSHIP FIRM M/S ARIHANT ENTERPRISES. A SEARCH AND SEIZURE ACTION U /S 132 OF THE INCOME TAX ACT 1961 (THE ACT) WAS CONDUCTED IN THE CASE OF M/ S ARIHANT ENTERPRISES. SINCE SOME OF THE DOCUMENTS FOUND AND SEIZED DURING THE COURSE OF THE SAID SEARCH CONTAINED THE TRANSACTIONS RELATED TO THE AS SESSEE NOTICE U/S 158 BD OF THE ACT WAS ISSUED BY THE A.O. ON 14-8-2002 IN RESPONSE TO WHICH THE RETURN FOR THE BLOCK PERIOD WAS FILED BY THE ASSESS EE DECLARING HIS UNDISCLOSED INCOME AT RS. 2 LACS. DURING THE COURSE OF SEARCH THE CURRENT ACCOUNT NO. 1707 MAINTAINED WITH UNITED WESTERN BANK MULUND IN THE NAME OF THE ASSESSEE WAS FOUND. SINCE THE TRANSACTIONS REFLECTE D IN THE SAID BANK ACCOUNTS WERE NOT DISCLOSED BY THE ASSESSEE IN ITS REGULAR RETURNS OF INCOME THE A.O. REQUIRED THE ASSESSEE TO EXPLAIN THE DEPOS ITS AND WITHDRAWALS OF THE SAID ACCOUNT. AS REGARDS THE DEPOSITS AND WITHDRAW ALS BY CHEQUES THE ASSESSEE EXPLAINED THAT THE SAME WERE FROM THE PART NERS OF THE FIRM M/S ARIHANT ENTERPRISES AND ARIHANT DEVELOPERS AND ALSO FROM OUTSIDERS WHO GOT THE CHEQUES DISCOUNTED. THE ASSESSEE ALSO OFFERED A SUM OF RS. 2 LACS AS HIS UNDISCLOSED INCOME TO COVER THE COMMISSION EARNED O N DISCOUNTING CHEQUES. THE EXPLANATION OF THE ASSESSEE REGARDING ENTRIES B Y WAY OF CHEQUES WAS ACCEPTED BY THE A.O. HOWEVER AS REGARDS THE DEPOS ITS AND WITHDRAWALS MADE IN CASH THE EXPLANATION OF THE ASSESSEE WAS NOT AC CEPTED BY THE A.O. AND KEEPING IN VIEW THAT TOTAL CASH DEPOSITS OF RS. 28 05 300/- MADE IN THE SAID ACCOUNT DURING THE PERIOD 1-4-98 TO 31-3-2000 WERE MORE THAN THE CASH WITHDRAWALS OF RS. 12 13 020/- THE DIFFERENCE OF R S. 15 92 280/- WAS TREATED IT(SS)A 02/MUM/2006 3 BY THE A.O. AS UNDISCLOSED INCOME OF THE ASSESSEE. ON APPEAL THE LD. CIT(A) CONFIRMED THE ADDITION MADE BY THE A.O. ON THIS ISS UE. 4. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AN D ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. THE ONLY CON TENTION RAISED BY THE LD. COUNSEL FOR THE ASSESSEE BEFORE US ON THIS ISSUE IS THAT THE CASH DEPOSITS AND CASH WITHDRAWALS MADE DURING THE PERIOD 1-4-98 TO 2 8-3-2000 ONLY WERE CONSIDERED BY THE A.O. FOR MAKING THE IMPUGNED ADDI TION WHILE THE ACCOUNT AS FOUND DURING THE COURSE OF SEARCH WAS MAINTAINED BY THE ASSESSEE RIGHT FROM 7-7-95. HE HAS INVITED OUR ATTENTION TO THE S UMMARY OF CASH DEPOSITS AND WITHDRAWALS MADE FROM THE SAID ACCOUNT DURING T HE PERIOD FROM 7-7-95 TO 28-3-2000 GIVEN ON PAGE 34 OF HIS PAPER BOOK A ND SUBMITTED THAT THE SAID WITHDRAWALS AGGREGATING TO RS. 32 40 800/- BEI NG MORE THAN THE CASH DEPOSITS OF RS. 25 60 340/- NO ADDITION ON THIS CO UNT CAN BE MADE TO THE UNDISCLOSED INCOME OF THE ASSESSEE. WE FIND MERIT I N THIS CONTENTION OF THE LD. COUNSEL FOR THE ASSESSEE. IN OUR OPINION WHEN THE CURRENT ACCOUNT WITH THE UNITED WESTERN BANK LTD. AS FOUND DURING THE COURSE OF SEARCH WAS MAINTAINED IN THE NAME OF THE ASSESSEE FROM 7-7-95 THE WITHDRAWALS AND DEPOSITS SHOULD HAVE BEEN TAKEN INTO CONSIDERATION BY THE A.O. FOR THE PERIOD FROM 7-7-95 TO 28-3-2000 WHICH IS FALLING IN THE BL OCK PERIOD. NEITHER IN THE ASSESSMENT ORDER NOR EVEN IN THE REMAND REPORT SUBM ITTED TO THE LD. CIT(A) THE A.O. HAS GIVEN ANY SOUND OR CONVINCING BASIS AS TO WHY THE TRANSACTIONS OF CASH WITHDRAWALS AND DEPOSITS ONLY FOR THE PERIO D 1-4-98 TO 28-2-2000 WERE CONSIDERED AND NOT FROM 7-7-95 WHEN THE ACCOUN T WAS ACTUALLY OPENED. WE THEREFORE RESTORE THIS ISSUE TO THE FILE OF TH E A.O. WITH A DIRECTION TO RECOMPUTE THE ADDITION TO BE MADE ON THIS ISSUE AFT ER TAKING INTO CONSIDERATION ALL THE CASH WITHDRAWALS AND DEPOSITS FOUND TO BE MADE IN THE RELEVANT BANK ACCOUNT DURING THE PERIOD 7-7-95 TO 2 8-3-2000. GROUND NO. 1 OF ASSESSEES APPEAL IS ACCORDINGLY TREATED AS ALLO WED. IT(SS)A 02/MUM/2006 4 5. THE ISSUE RAISED IN GROUND NO. 2 RELATES TO THE ADDITION OF RS. 2 74 500/- MADE BY THE A.O. AND CONFIRMED BY THE LD . CIT(A) ON ACCOUNT OF MARGIN MONEY ALLEGEDLY PAID BY THE ASSESSEE IN RESP ECT OF SHARE TRANSACTIONS. 6. THE DOCUMENTS FOUND AND SEIZED DURING THE COURSE OF SEARCH WERE RELATED TO THE SHARE TRANSACTIONS MADE BY THE ASSES SEE THROUGH SHRI ANIL RANMAL GUDHKA A STOCK BROKER. ALTHOUGH IT WAS FOU ND THAT THE ASSESSEE IN FACT HAS SUFFERED LOSS IN THE SHARE TRANSACTIONS T HE A.O. FOUND ON PERUSAL OF THE RELEVANT LEDGER ACCOUNT THAT THE ASSESSEE WAS R EQUIRED TO PAY MARGIN MONEY FOR THE SHARE TRANSACTION. SINCE THE PEAK OF THE MARGIN MONEY PAID BY THE ASSESSEE ACCORDING TO THE A.O. WAS RS. 2 74 5 00/- HE TREATED THE SAME AS UNDISCLOSED INCOME OF THE ASSESSEE AND MADE ADDI TION OF RS. 2 74 500/- TO THE UNDISCLOSED INCOME OF THE ASSESSEE FOR THE BLOC K PERIOD WHICH THE LD. CIT(A) CONFIRMED. 7. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AN D ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. THE LD. COU NSEL FOR THE ASSESSEE HAS INVITED OUR ATTENTION TO THE LETTER ISSUED BY THE C ONCERNED BROKER SHRI ANIL RANMAL GUDHKA PLACED AT PAGE 47 OF HIS PAPER BOOK W HEREIN THE SAID PARTY CONFIRMED THAT NEITHER ANY DEPOSIT NOR ANY FIXED MA RGIN MONEY WAS COLLECTED BY HIM FROM THE ASSESSEE. IT WAS ALSO CONFIRMED BY THE SAID BROKER THAT THE AMOUNT OF MARGIN MONEY WAS DEBITED AND CREDITED TO THE ACCOUNT OF THE ASSESSEE AFTER EVERY SETTLEMENT PERIOD AND IT WAS N EVER RECEIVED OR REFUNDED IN CASH OR BY CHEQUE. IT IS OBSERVED THAT THIS STAN D WAS TAKEN BY THE ASSESSEE EVEN BEFORE THE A.O. AS WELL AS LD. CIT(A) DULY SUP PORTED BY THE CONFIRMATION ISSUED BY THE CONCERNED BROKER SHRI ANIL RANMAL GUD HKA BUT THE SAME HAS BEEN REJECTED WITHOUT BRINGING ANYTHING ON RECORD T O SHOW THAT THE AMOUNT OF MARGIN IN QUESTION WAS ACTUALLY PAID BY THE ASSESSE E TO THE CONCERNED BROKER. AT THE TIME OF HEARING BEFORE US THE LD. D.R HAS ALSO NOT BEEN ABLE TO POINT OUT ANYTHING EITHER FROM THE ASSESSMENT ORDER OR EVEN FROM THE REMAND REPORT SUBMITTED BY THE A.O. TO THE LD. CIT(A) WHIC H COULD SUGGEST THAT THE IT(SS)A 02/MUM/2006 5 IMPUGNED MARGIN MONEY AMOUNT WAS ACTUALLY PAID BY T HE ASSESSEE TO THE CONCERNED BROKER. WE ARE OF THE VIEW THAT THE MARG IN MONEY AMOUNT IN QUESTION CANNOT BE TREATED AS UNDISCLOSED INCOME OF THE ASSESSEE UNLESS THERE IS SOME EVIDENCE TO SHOW THAT THE SAID AMOUNT WAS ACTUALLY PAID BY THE ASSESSEE TO THE CONCERNED BROKER AND IN THE ABSENCE OF SUCH EVIDENCE AVAILABLE ON RECORD WE HOLD THAT THE ADDITION MADE ON THIS ISSUE CANNOT BE SUSTAINED. THE SAME THEREFORE IS DELETED ALLOWING G ROUND NO. 2 OF ASSESSEES APPEAL. 8. IN GROUND NO. 3 THE ASSESSEE HAS CLAIMED CREDIT OF RS. 2 LACS DECLARED BY HIM AS UNDISCLOSED INCOME IN THE BLOCK RETURN AG AINST THE ADDITION IF ANY FINALLY SUSTAINED ON ACCOUNT OF HIS UNDISCLOSED INC OME. 9. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AN D ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. IT IS OBSERV ED THAT IN THE BANK ACCOUNT MAINTAINED WITH THE UNITED WESTERN BANK LTD. VARIO US TRANSACTIONS OF DEPOSITS AND WITHDRAWALS MADE IN CHEQUES WERE FOUND TO BE REFLECTED. THE SAID TRANSACTIONS WERE EXPLAINED BY THE ASSESSEE AS INCLUSIVE OF SOME BILL DISCOUNTING TRANSACTIONS AND THE INCOME OF RS. 2 LA CS ON ACCOUNT OF COMMISSION WAS DECLARED IN THE BLOCK RETURN. KEEPIN G IN VIEW OF THIS DECLARATION OF INCOME BY THE ASSESSEE AS WELL AS OT HER SUBMISSIONS MADE THE A.O. ACCEPTED THE EXPLANATION OF THE ASSESSEE WITH REGARD TO DEPOSIT AND WITHDRAWAL TRANSACTIONS FOUND TO BE MADE IN CHEQUES . THE INCOME OF RS. 2 LACS DECLARED BY THE ASSESSEE IN THE BLOCK RETURN T HUS WAS RELATED TO THE BILL DISCOUNTING TRANSACTIONS CLAIMED TO BE MADE BY THE ASSESSEE THROUGH BANK ACCOUNT MAINTAINED WITH THE UNITED WESTERN BANK LTD . AND THE SAID TRANSACTIONS BEING SEPARATE AND DISTINCT FROM THE T RANSACTIONS OF WITHDRAWALS AND DEPOSITS FOUND TO BE MADE IN CASH WE ARE OF TH E VIEW THAT THE CREDIT OF RS. 2 LACS CANNOT BE GIVEN TO THE ASSESSEE AS CLAIM ED. WE THEREFORE FIND NO MERIT IN GROUND NO. 3 RAISED BY THE ASSESSEE AND DI SMISS THE SAME. IT(SS)A 02/MUM/2006 6 10. IN THE RESULT APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. = > *) ?= 8 - $% @ 8 1A ORDER PRONOUNCED IN THE OPEN COURT ON 3 RD JULY. 2013 . # - 8 :;< ! B#)> 3 RD JULY.2013 ; 8 SD/- S D/- (DR. S.T.M. PAVALAN) (P.M. JAGTAP ) * '#$ JUDICIAL MEMBER ! '#$ / ACCOUNTANT MEMBER MUMBAI ; B#) DATED 03.07.2013 %.*).'./ RK SR. PS # - 8 6* C 0 C< # - 8 6* C 0 C< # - 8 6* C 0 C< # - 8 6* C 0 C