Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, MUMBAI BENCH “I” MUMBAI
Before: SHRI OM PRAKASH KANT & MS. KAVITHA RAJAGOPAL
were heard together and disposed off by way of this consolidated were heard together and disposed off by way of this consolidated were heard together and disposed off by way of this consolidated order for convenience and avoid repetition of facts. order for convenience and avoid repetition of facts.
As identical grounds have been raised by the As identical grounds have been raised by the assessee in assessee in these appeals, therefore, for brevity , therefore, for brevity, we are reproducing only the grounds we are reproducing only the grounds of appeal of the assessee for assessment year 2016 of appeal of the assessee for assessment year 2016-17 as under: 17 as under:
On the facts in circumstances of the case and in law the issue of On the facts in circumstances of the case and in law the issue of On the facts in circumstances of the case and in law the issue of notice under section 153C of the Income notice under section 153C of the Income Tax Act, 1961 is bad in Tax Act, 1961 is bad in law.
2. On the facts in circumstances of the case and in law the On the facts in circumstances of the case and in law the On the facts in circumstances of the case and in law the impugned assessment order is bad in law as as the notice under impugned assessment order is bad in law as as the notice under impugned assessment order is bad in law as as the notice under section 153C of the Income Tax Act, 1961 has been issued section 153C of the Income Tax Act, 1961 has been issued section 153C of the Income Tax Act, 1961 has been issued without conclusive satisfaction, cogent material without conclusive satisfaction, cogent material and basis of and basis of arriving satisfaction and relying only on incriminating materials arriving satisfaction and relying only on incriminating materials arriving satisfaction and relying only on incriminating materials obtained at search and seizure proceedings on third party without obtained at search and seizure proceedings on third party without obtained at search and seizure proceedings on third party without providing these Statements to the appellant and without giving an providing these Statements to the appellant and without giving an providing these Statements to the appellant and without giving an opportunity to the appellant to cross examine opportunity to the appellant to cross examine the third party. the third party. 3. On the facts in circumstances of the case and in law the learned On the facts in circumstances of the case and in law the learned On the facts in circumstances of the case and in law the learned Income Tax Officer erred in adding Rs.4,50,000/ Income Tax Officer erred in adding Rs.4,50,000/- us 69 of the Income Tax Act, 1961 completely ignoring source of funds Income Tax Act, 1961 completely ignoring source of funds Income Tax Act, 1961 completely ignoring source of funds available with the appellant. available with the appellant. 4. On the facts in circumstances of the case and in law the learned On the facts in circumstances of the case and in law the learned On the facts in circumstances of the case and in law the learned Income Tax Officer erred in charging interest of Rs.86,940,/ Income Tax Officer erred in charging interest of Rs.86,940,/ Income Tax Officer erred in charging interest of Rs.86,940,/- and Rs.1,18,930/ Rs.1,18,930/- u/s 234A and 234B respectively. 2.1 Briefly stated facts of the case are that the assessee is a non Briefly stated facts of the case are that the assessee is a non Briefly stated facts of the case are that the assessee is a non- resident Indian and currently settled in United resident Indian and currently settled in United Kingdom Kingdom (UK) as citizen of UK. The assessee is having certain immovable properties citizen of UK. The assessee is having certain immovable properties citizen of UK. The assessee is having certain immovable properties in India and was showing rental income in the return of income in India and was showing rental income in the return of incom in India and was showing rental income in the return of incom filed for relevant assessment years filed for relevant assessment years from 2016-17 to 2018 17 to 2018-19. During the financial year corresponding to the assessment year During the financial year corresponding to the assessment year During the financial year corresponding to the assessment year 2018-19, the assessee 19, the assessee enter into purchase of a flat in an apartment a flat in an apartment namely ‘Decora Fortune Decora Fortune’, at Rajkot ( Gujrat) for sale consider or sale consideration of Rs.14,00,000/- as recorded in the registered sale agreement as recorded in the registered sale agreement as recorded in the registered sale agreement dated 04.01.2018. A sear dated 04.01.2018. A search was conducted at the premises ch was conducted at the premises of the Ashwinkumar Liladhar Vaidya 3 Ashwinkumar Liladhar Vaidya to 1131/Mum/2023 ITA Nos. 1129 to 1131/Mum/2023 developer of the said said apartment and his associates. During the said apartment and his associates. During the said search a ‘pendrive’ was found and seized on was found and seized on an employee employee of the developer namely ‘Shri Himanshu Raiyani Shri Himanshu Raiyani’, in which ledger account which ledger account of assessee, maintained in maintained in ‘parallel books’ was found. According to was found. According to the said ledger account, the assessee had paid additional sum of the said ledger account, the assessee had paid additional sum of the said ledger account, the assessee had paid additional sum of Rs.10,87,600/- in cash to the developer. In view in cash to the developer. In view in cash to the developer. In view of the incriminating incriminating material material belong belonging to to the the assessee assessee and and the the information therein pertaining information therein pertaining to assessee, the Assessing Officer of he Assessing Officer of the searched person intimated to the Assessing Officer of the the searched person intimated to the Assessing Officer of the the searched person intimated to the Assessing Officer of the assessee, who after following the due procedure of the law is who after following the due procedure of the law is who after following the due procedure of the law issued notice u/s 153C of the Act to the assessee for assessment years notice u/s 153C of the Act to the assessee for assessment year notice u/s 153C of the Act to the assessee for assessment year 2016-17 to 2-18-19. In response, the assessee filed return of 19. In response, the assessee filed return of 19. In response, the assessee filed return of income for all those three assessment years declaring the total income for all those three assessment years declaring the income for all those three assessment years declaring the income which was declared in the original return of income filed. income which was declared in the original return of income income which was declared in the original return of income The Assessing officer completed scrutiny of the return of income The Assessing officer completed scrutiny of the return of income The Assessing officer completed scrutiny of the return of income and issued a draft order u/s 144C r.w.s. 153C of the Act for all the draft order u/s 144C r.w.s. 153C of the Act for all the draft order u/s 144C r.w.s. 153C of the Act for all the three assessment years proposing addition of Rs.4,50,000/- in three assessment years proposing addition of Rs.4,50,000/ three assessment years proposing addition of Rs.4,50,000/ assessment year 2016 assessment year 2016-17, Rs.4,62,600/- in assessment ye in assessment year 2017- 18 and Rs.1,75,000/ 18 and Rs.1,75,000/- in assessment year 2018-19. The assessee 19. The assessee filed objection before the Ld. DRP and the Ld. DRP after considering filed objection before the Ld. DRP and the Ld. DRP after considering filed objection before the Ld. DRP and the Ld. DRP after considering the submission of the assessee held the addition to the extent of the submission of the assessee held the addition to the extent of the submission of the assessee held the addition to the extent of Rs.4,12,000/- in assessment year 2016 in assessment year 2016-17; Rs.1,88,6 Rs.1,88,600/- for assessment year 2017 assessment year 2017-18 and Rs.1,75,000/- for assessment year for assessment year 2018-19. In view of the direction of the Ld. DRP, the Assessing 19. In view of the direction of the Ld. DRP, the Assessing 19. In view of the direction of the Ld. DRP, the Assessing Officer has passed impugned final assessment orders, against Officer has passed impugned final assessment orders Officer has passed impugned final assessment orders
Ashwinkumar Liladhar Vaidya 4 Ashwinkumar Liladhar Vaidya to 1131/Mum/2023 ITA Nos. 1129 to 1131/Mum/2023 which assessee is in appeal before the Tribunal raising the grounds which assessee is in appeal before the Tribunal raising the grounds which assessee is in appeal before the Tribunal raising the grounds as reproduced above. as reproduced above.
Before us, the Ld. Counsel Before us, the Ld. Counsel for the assessee filed a Paper Book the assessee filed a Paper Book containing pages 1 to 136 and submitted that in all the three containing pages 1 to 136 and submitted that in all the three containing pages 1 to 136 and submitted that in all the three assessment years, the Ld. DRP has mere assessment years, the Ld. DRP has merely rejected opening cash ly rejected opening cash balance of Rs.4,12,000/ balance of Rs.4,12,000/- as on 31.03.2015. T . Thus bone of contention in all three assessment years is whether there was contention in all three assessment years is whether there was contention in all three assessment years is whether there was opening cash in hand opening cash in hand of Rs.4,12,000/- was available with the was available with the assessee. The Ld. Counsel The Ld. Counsel for the assessee referred the assessee referred to Paper Book page No. 2 showing the amount of Rs.4,12,000/ page No. 2 showing the amount of Rs.4,12,000/- as opening cash as opening cash balance. Further, the Ld. Counsel of the assessee referred to Page balance. Further, the Ld. Counsel of the assessee referred to Page balance. Further, the Ld. Counsel of the assessee referred to Page No. 8 and 9 of the Paper Book and submitted that assessee had No. 8 and 9 of the Paper Book and submitted that assessee had No. 8 and 9 of the Paper Book and submitted that assessee had incurred cash expenses for additional work in the incurred cash expenses for additional work in the nature of interior nature of interior or furnishing for which assessee paid Rs.9,50,000/- to M/s or furnishing for which assessee paid Rs.9,50,000/ or furnishing for which assessee paid Rs.9,50,000/ ‘Shriram Enterprises ’ and balance Rs.1,37,600/- was reimbursed to was reimbursed to him for stamp duty and registration charges incurred by him on him for stamp duty and registration charges incurred by him on him for stamp duty and registration charges incurred by him on behalf of the assessee. In support of opening cash balance of behalf of the assessee. In support of opening cas behalf of the assessee. In support of opening cas Rs.4,12,000/- the Ld. Counsel the Ld. Counsel for the assessee referred to the the assessee referred to the balance sheet and capital account for assessment year prior to balance sheet and capital account for assessment year prior to balance sheet and capital account for assessment year prior to assessment year 2016 assessment year 2016-17. The Ld. Counsel submitted that in earlier 17. The Ld. Counsel submitted that in earlier years assessee has withdrawn the money from its bank account years assessee has withdrawn the money from its ba years assessee has withdrawn the money from its ba detail of which was filed and available on page 46 of the Ld. DRP. detail of which was filed and available on page 46 of the Ld. DRP. detail of which was filed and available on page 46 of the Ld. DRP. The Ld. Counsel also produced a summary of the said explanation The Ld. Counsel also produced a summary of the said explanation The Ld. Counsel also produced a summary of the said explanation
Ashwinkumar Liladhar Vaidya 5 Ashwinkumar Liladhar Vaidya to 1131/Mum/2023 ITA Nos. 1129 to 1131/Mum/2023 of the cash balance as on 31.03.2015 amounting to Rs.4,12,000/- of the cash balance as on 31.03.2015 amounting to Rs.4,12,000/ of the cash balance as on 31.03.2015 amounting to Rs.4,12,000/ as under:
Particulars Amount (Rs.) Opening Balance as on 01 e as on 01-04-2012 25,000/ 25,000/- Add : Cash withdrawal during the year 2012 Add : Cash withdrawal during the year 2012-2013 1,67,000/~' 1,67,000/~' Closing Balance as on 31 Closing Balance as on 31-03-2013 1,92,000/ 1,92,000/- Add : Cash withdrawal during the year 2013 Add : Cash withdrawal during the year 2013-2014 85,000/ 85,000/- Less: Cash deposited in bank during the year 2013 Less: Cash deposited in bank during the year 2013-2014 5,000/ 5,000/- Closing balance as on 31 Closing balance as on 31-03-2014 2,72,000/ 2,72,000/- Add : Cash withdrawal during the year 2014 Add : Cash withdrawal during the year 2014-2015 1,75,000/~ 1,75,000/~ Less: Cash deposited in bank during the year 2014 Less: Cash deposited in bank during the year 2014-2015 35,000/ 35,000/- Closing Balance as on 31 Closing Balance as on 31-03-2015 4,12,000/ 4,12,000/- 3.1 The Ld. Counsel submitted that the The Ld. Counsel submitted that the assessee has already assessee has already demonstrated separate withdrawal in respect of personal expenses demonstrated separate withdrawal in respect of personal expenses demonstrated separate withdrawal in respect of personal expenses as well as expenses for maintenance of the other let out properties as well as expenses for maintenance of the other let out properties as well as expenses for maintenance of the other let out properties and therefore, the cash balance which was withdrawn from time to and therefore, the cash balance which was withdrawn from time to and therefore, the cash balance which was withdrawn from time to time by the assessee during his visit time by the assessee during his visit to India was available with the was available with the assessee. He submitted that t He submitted that the cash payment of Rs.10,87,600/ he cash payment of Rs.10,87,600/- to M/s Shriram Enterprises is duly explained and hence no addition M/s Shriram Enterprises is duly explained and hence no addition M/s Shriram Enterprises is duly explained and hence no addition for unexplained investment is required to made in the hands of the for unexplained investment is required to made in the hands of the for unexplained investment is required to made in the hands of the assessee for assessment ye assessee for assessment year 2016-17 to assessment year 20181 17 to assessment year 20181- 19.
Per Per contra, the Ld. Departmental Representative (DR) Per contra, the Ld. Departmental Representative (DR) contra, the Ld. Departmental Representative (DR) submitted that there are no evidence in support of that the cash submitted that there are no evidence in support of that the cash submitted that there are no evidence in support of that the cash withdrawn in the assessment years 2012 withdrawn in the assessment years 2012-13 to 2015 13 to 2015-16 was kept with the assessee and therefore, with the assessee and therefore, the Ld. DRP justified in partly the Ld. DRP justified in partly upholding addition in unexplained investment. upholding addition in unexplained investment.
Ashwinkumar Liladhar Vaidya 6 Ashwinkumar Liladhar Vaidya to 1131/Mum/2023 ITA Nos. 1129 to 1131/Mum/2023
We have heard rival submission of the parties on the issue in We have heard rival submission of the parties on the issue in We have heard rival submission of the parties on the issue in dispute and perused the relevant material on record. We find that dispute and perused the relevant material on record. We find that dispute and perused the relevant material on record. We find that the assessee is a non the assessee is a non-resident Indian and purchased a flat in chased a flat in Rajkot. During the course of the search action at the premises of Rajkot. During the course of the search action at the premises of Rajkot. During the course of the search action at the premises of the developer of the flat ledger account of the assessee was found the developer of the flat ledger account of the assessee was found the developer of the flat ledger account of the assessee was found wherein wherein wherein along along along with with with cheque cheque cheque amount, amount, amount, cash cash cash payment payment payment of of of Rs.10,87,600/- was found. According to the Assessing Off was found. According to the Assessing Off was found. According to the Assessing Officer this money was paid for paid for construction of the flat whereas the assessee construction of the flat whereas the assessee submitted that this amount was paid to the developer M/s Shriram submitted that this amount was paid to the developer M/s Shriram submitted that this amount was paid to the developer M/s Shriram Enterprises for carrying out extra/additional work of furnishing and Enterprises for carrying out extra/additional work of furnishing and Enterprises for carrying out extra/additional work of furnishing and for which separate agreement was made with the for which separate agreement was made with the said entity. Thus said entity. Thus it is undisputed that said payment of Rs.10,87,600/- was made in it is undisputed that said payment of Rs.10,87,600/ it is undisputed that said payment of Rs.10,87,600/ cash by the assessee. The only dispute which is left whether the cash by the assessee. The only dispute which is left whe cash by the assessee. The only dispute which is left whe said cash payment was made said cash payment was made out of explained sources or out of explained sources or unexplained sources. The assessee has explained the entire amount unexplained sources. The assessee has explained the e unexplained sources. The assessee has explained the e by way of withdrawals from his bank account and sum of by way of withdrawals from his bank account and sum of by way of withdrawals from his bank account and sum of Rs.4,12,000/- as the opening cash balance as on 01.04.2015. The as the opening cash balance as on 01.04.2015. The as the opening cash balance as on 01.04.2015. The Ld. DRP has rejected the contention of availability of the opening Ld. DRP has rejected the contention of availability of the opening Ld. DRP has rejected the contention of availability of the opening cash balance in the hands of the assessee amounting to cash balance in the hands of the assessee amounting to cash balance in the hands of the assessee amounting to Rs.4,12,000/-. The details of the availability of the opening cash . The details of the availability of the opening cash . The details of the availability of the opening cash balance of Rs.4,12,000/ balance of Rs.4,12,000/- has been stated by the assessee as has been stated by the assessee as withdrawn from the different bank account. The Ld. DRP has withdrawn from the different bank account. The Ld. DRP has withdrawn from the different bank account. The Ld. DRP has rejected this contention observing as under: rejected this contention observing as under:
“6.6.6 Any prudent man woul 6.6.6 Any prudent man would withdraw cash from the bank when the d withdraw cash from the bank when the cash withdrawn earlier is utilised. We may note here that the assessee cash withdrawn earlier is utilised. We may note here that the assessee cash withdrawn earlier is utilised. We may note here that the assessee has deposited an amount as small as Rs. 5,000/ has deposited an amount as small as Rs. 5,000/- in his HSBC Bank in his HSBC Bank
Ashwinkumar Liladhar Vaidya 7 Ashwinkumar Liladhar Vaidya to 1131/Mum/2023 ITA Nos. 1129 to 1131/Mum/2023
Account (NRO) on three different occasions, I.e. 11.01.2014, 15.09.2014 Account (NRO) on three different occasions, I.e. 11.01.2014, 15.09.2014 Account (NRO) on three different occasions, I.e. 11.01.2014, 15.09.2014 & 14.10.2014 besides depositing an amount of Rs. 25,000/ 014 besides depositing an amount of Rs. 25,000/ 014 besides depositing an amount of Rs. 25,000/- on 07.05.2014 in the same bank In view of the aforesaid we are of the 07.05.2014 in the same bank In view of the aforesaid we are of the 07.05.2014 in the same bank In view of the aforesaid we are of the view that the accumulation of cash shown by the assessee at Rs. view that the accumulation of cash shown by the assessee at Rs. view that the accumulation of cash shown by the assessee at Rs. 4,12,000/- as on 31.05.2015 is unacceptable. as on 31.05.2015 is unacceptable. 6.6.7 of Rs. 4,12,000/ 6.6.7 of Rs. 4,12,000/- during the AY 2016-17 can not be held to be 17 can not be held to be explained as almost entire payment of Rs. 4,50,000/ explained as almost entire payment of Rs. 4,50,000/- in the beginning in the beginning of the year itself, is out aforesaid brought forward balance. of the year itself, is out aforesaid brought forward balance.” ” 5.1 We do not agree with the finding of the Ld. DRP on this issue We do not agree with the finding of the Ld. DRP on this issue We do not agree with the finding of the Ld. DRP on this issue because once the money withdrawn from the bank account has money withdrawn from the bank account has money withdrawn from the bank account has been found to be verified been found to be verified, the Ld. DRP cannot decide without support any corroborative evidence support any corroborative evidence that he would have would have incurred that cash against any expenditure. that cash against any expenditure. Only on the basis of the Only on the basis of the presumption, it cannot be held it cannot be held that assessee might have incurred that assessee might have incurred the money withdrawal by the bank and not saved. Unless it is the money withdrawal by the bank and not saved. Unless it is the money withdrawal by the bank and not saved. Unless it is proved otherwise the assessee has proved otherwise the assessee has explained source of the opening explained source of the opening capital of Rs.4,12,000/ capital of Rs.4,12,000/- and there are no documentary evidence and there are no documentary evidence with the Revenue to hold that s with the Revenue to hold that said cash was not accumulated and aid cash was not accumulated and incurred by the assessee merely for the reason that the assessee in incurred by the assessee merely for the reason that the assessee in incurred by the assessee merely for the reason that the assessee in subsequent years has deposited a small amount of Rs.5,000/ as deposited a small amount of Rs.5,000/ as deposited a small amount of Rs.5,000/- and Rs.25,000/- also in the banks. The entire finding of the Ld. DRP is also in the banks. The entire finding of the Ld. DRP is also in the banks. The entire finding of the Ld. DRP is based on the presumptio based on the presumptions and assumptions and not any ns and assumptions and not any documentary evidence and accordingly documentary evidence and accordingly, we reject the contention of we reject the contention of the Ld. DRP. Before us, the Ld. Counsel of the assessee has filed a the Ld. DRP. Before us, the Ld. Counsel of the assessee has filed a the Ld. DRP. Before us, the Ld. Counsel of the assessee has filed a detailed bank statement for the period from 2012 to 2015 and detailed bank statement for the period from 2012 to 2015 and detailed bank statement for the period from 2012 to 2015 and wherein relevant withdrawals h withdrawals have been shown as self withdrawal. been shown as self withdrawal. The Ld. Counsel also placed reliance on the decision of the Tribunal The Ld. Counsel also placed reliance on the decision of the Tribunal The Ld. Counsel also placed reliance on the decision of the Tribunal of 2017 in the case of Dinesh Goswami, Indore ITA No. 277 of 2017 in the case of Dinesh Goswami, Indore ITA No. 277 of 2017 in the case of Dinesh Goswami, Indore
Ashwinkumar Liladhar Vaidya 8 Ashwinkumar Liladhar Vaidya to 1131/Mum/2023 ITA Nos. 1129 to 1131/Mum/2023 Bench, wherein it is held that it is the assessee who has decide wherein it is held that it is the assessee who has decide wherein it is held that it is the assessee who has decide himself whether to keep the m himself whether to keep the money in the locker or deposit in the oney in the locker or deposit in the bank and the Assessing Officer cannot shift himself in position of bank and the Assessing Officer cannot shift himself bank and the Assessing Officer cannot shift himself the assessee.
5.2 In view of the aforesaid discussion, the ground In view of the aforesaid discussion, the ground In view of the aforesaid discussion, the grounds of all three appeal of the assessee on the merit of the addition are allowed. The appeal of the assessee on the merit of the addition are allowed. The appeal of the assessee on the merit of the addition are allowed. The grounds challenging validity of the proceedings u/s 153C of the Act ounds challenging validity of the proceedings u/s 153C of the Act ounds challenging validity of the proceedings u/s 153C of the Act are therefore, rendered academic and same are not adjudicating are therefore, rendered academic and same are not adjudicating are therefore, rendered academic and same are not adjudicating upon.
In the result, all the three appeals of the assessee are allowed. In the result, all the three appeals of the assessee are allowed. In the result, all the three appeals of the assessee are allowed.