IQBAL USMANGANI KHATRI,MUMBAI vs. DCIT CEN CIR 2(3), MUMBAI
What did the Tribunal hold?
The Tribunal found that the CIT(A) had passed the order in a mechanical manner without appreciating the evidence and submissions. The issues required fresh adjudication on merits.
What were the facts?
The assessee, engaged in property development and trading, had its assessment reopened based on information about significant cash deposits and withdrawals. The Assessing Officer (AO) made additions under Section 68 and 69A for unexplained cash credits.
What were the issues?
Whether the CIT(A) properly considered the evidence and submissions regarding unexplained cash credits, and whether the penalty and interest charges were justified.
Which sections of the Income-tax Act were involved?
Section 68,Section 69A,Section 271(1)(c),Section 234A,Section 234B,Section 234C,Section 234D
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, MUMBAI BENCHES “C”, MUMBAI
Before: SHRI RAJESH KUMAR (AM) & SHRI RAM LAL NEGI (JM)
Assessee by : Shri Hari S Raheja (AR) Revenue by : Ms. Neha Thakur (DR) Date of Hearing: 25/09/2020 Date of Pronouncement: 04/12/2020 O R D E R
PER RAM LAL NEGI, JM
The assessee has filed the present appeal against the order dated 19.12.2017 passed by the Commissioner of Income Tax (Appeals)-48 (for short ‘the CIT(A), Mumbai, which pertains to the the assessment year 2008-09, vide which, the Ld. CIT(A) has dismissed the appeal filed by the assessee, against the assessment order passed u/s 143 (3) r.w.s. 147of the Income Tax Act, 1961 (for short the ‘Act’).
Brief facts of the case are that the assessee engaged in the business of property development, undertaking civil contract work and trading in building material, filed its return of income for the assessment year under consideration declaring total income of Rs. 15,55,937/-. The return was processed and assessment order was passed u/s 143 (3) of the Act. Subsequently, the AO reopened the assessment, based on the information received from DDIT (Inv.) Assessment Year: 2008-09 to the effect that the assessee had deposited cheque of Rs. 2 crore in his account, maintained with HSBC on 23.01.2008 and the same was withdrawn on 29.01.2008. Further, the assessee had deposited Rs. 12,50,000/- in account maintained with Deutsche Bank, Khar, Mumbai on various dates and also withdrawn the cash from time to time. Accordingly, the AO passed the assessment order u/s 143(3) r.w.s. 147 of the Act, determining total income of the assessee at Rs. 2,19,55,940/- (rounded off), after making addition of Rs. 2,00,00,000/- u/s 68 and addition of Rs. 3,00,000/- u/s 69A of the Act. The assessee challenged the assessment order before the Ld.CIT (A). The Ld.CIT (A) after hearing the assessee dismissed the assessee’s appeal and confirmed the action of the AO. Against the said order, the assessee is in appeal before this Tribunal. 3. The assessee has challenged the impugned order passed by the Ld. CIT (A) on the following effective grounds:- Ground No. 1: Unexplained cash credit u/s 68 On the facts and in the circumstances of the case and in law, the Ld. Dy. CIT (AO) erred in making addition of Rs. 2,00,00,000/- (Rupees Two Crores) arbitrarily by treating the advance received from Yash Birla Construction Group as unexplained cash credit u/s 68 of the I.T. Act 1961 by ignoring the confirmation of account and without assigning any valid reasons. The learned CIT (Appeal)-48 Mumbai upheld the order of Assessing Officer Dy. CIT-2(3) Mumbai in total disregard to facts of the case and evidence and material on record filed before the A.O. and CIT (Appeal) by stating in her order in para 5.1 that only one document consisting of confirmation is filed and no other detail regarding genuineness of transaction and credit worthiness of the party have been filed. Appellant prays addition of Rs. 2 crores may please be deleted.
Ground No. 2: Unexplained cash credit u/s 69A On the facts and in the circumstances of the case and in law, the Ld. Dy. CIT (AO) erred in making addition of Rs. 3,00,000/- (Rupees Three Lacs) arbitrary by treating the peak of cash credit of Rs. 3,00,000/- as deemed income of appellant. The Assessment Year: 2008-09 learned CIT (Appeal)-48 Mumbai upheld the order of Assessing Officer Dy CIT – 2(3) by stating in her order in para 5.2 since assesse could not explain source of this peak, the addition was made by the AO. Appellant prays addition of Rs. 3 lacs may please be deleted.
Ground No. 3: Penalty u/s 271 (1) (C)
On the facts and in the circumstances of the case and in law, the Ld. Dy. CIT (AO) erred in initiating penalty proceeding u/s 271 (1) (c) for inaccurate particulars of income (relevant to Ground No. 1) and concealment of income (relevant to Ground No. 1) and concealment of income (relevant to Ground No. 2.) The Ld. CIT (A) was not justified to dismiss this ground of appeal by merely stating in her order in para 5.4, penalty proceedings are separate proceedings and merely on initiating no injury occurred to assessee. Appellant prays proceedings initiated may please be quashed.
Ground No. 4: Interest U/s 234 A, 234B, 234C & 234D
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