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Income Tax Appellate Tribunal, “D”, BENCH MUMBAI
Before: SHRI SAKTIJIT DEY & SHRI G. MANJUNATHA
Date of Hearing 04/12/2019 Date of Pronouncement 04/12/2019 आदेश आदेश / O R D E R आदेश आदेश PER G.MANJUNATHA (A.M):
This appeal filed by the assessee is directed against, the order of the Ld. Commissioner of Income Tax (Appeals)–28, Mumbai, dated 21/04/2017 and it pertains to Assessment Year 2009-10
The assessee has raised the following grounds of appeal:-
1. The Learned Com. Of Income Tax (Appeals) has erred in confirming the addition of Rs.1,55,86,802/- being unexplained Cash Deposit u/s 68 made by the Learned Assessing Officer. The Learned Com. Income Tax (Appeals) ought to have applied Peak theory whenever there are Cash Deposits out of cash withdrawals and as a consequence commission of 0.1% only on the Net Deposits should have been added to the Income.
Mohd. Soyeb Haji Farooq Motorwala 3. The brief facts of the case are that the assesee is an individual, filed his return of income for AY 2009-10, declaring total income at Rs. 2,04,330/-. The case was selected for scrutiny and during the course of assessment proceedings before the Ld. AO, the assesee did not appear, despite number of opportunities were given to explain his case. Therefore, the Ld. AO on the basis of information available on record and also taken note of bank statements obtained from Canara Bank, Abdul Rehman Street Branch, noticed that the assessee has made total cash deposits of Rs. 1,60,75,362/- for the period from 01/04/2008 to 31/03/2009. Since, the assesee has not appeared before the Ld. AO to explain cash deposits found in bank account, the ld. AO has made additions of Rs. 1,55,86,802/-( Rs.1,60,73,362 - Rs.4,38,560) being difference between cash deposits and gross receipts admitted in return of income as unexplained income of the assessee.
Aggrieved by the assessment order, the assessee preferred an appeal, before the Ld.CIT(A). Before the Ld.CIT(A), the assessee did not appeared, but filed witten submissions on 01/03/2013 and 09/12/2013 and explained that cash deposits found in Canara Bank account are received from M/s. Bombay Indore Transport towards cheque discounts with Bombay Mercantile Co-op Bank. The assesee further submitted that it has earned commission income of 0.1%, which is already included in the return of income filed for the year. Therefore, no addition could be made towards cash deposits found in Canara Bank account. The Ld.CIT(A) after considering relevant submission of the assesee and also taken note of the fact that the no evidences has been filed to explain the case of the assesee, confirmed additions made by the AO towards cash
Mohd. Soyeb Haji Farooq Motorwala deposits, as well as low withdrawal for household expenses. Aggrieved by the Ld.CIT(A) order, the assesee is in appeal before us.
The Ld. AR for the assessee submitted that the Ld.CIT(A) was erred in confirmed additions made towards cash deposits, ignoring detailed submissions filed by the assesee explaining the modus operandi of the assessee to issue cheques and take back cash from the parties. The Ld. AR further submitted that although, the assesee has not appeared before the lower authorities, but, explained his case with cash deposits found in bank account and corresponding cheque issued to Bombay Indore Transport. Similarly the assesee has also filed bank statements of Bombay Indore Transport company to match cheque issued by the assesee with bank account of the party, but the Ld.CIT(A) ignored all evidences and confirmed additions made by the Ld. AO. He, further, submitted that he had earned commission income of 0.1% and the same is offered to tax in regular return of income and hence further addition is incorerct and needs to be deleted.
The Ld. DR for the assesee, on the other hand, strongly supporting order of the Ld.CIT(A) submitted that although, the assesee claims that he was involved in cheque discounting business for commission, but failed to file necessary evidences, including confirmation from the parties from whom cash received for issuing cheques. Therefore, there is no merit in the arguments of the ld. AR for the assesee and hence, the additions made by the Ld. AO should be upheld.
Mohd. Soyeb Haji Farooq Motorwala 7. We have heard both the parties, perused the material available on record and gone through orders of the authorities below. It is an admitted fact that the assesee has made periodic cash deposits into Canara Bank account and issued equal amount of cheques to Bombay Indore Transport Company. The assesee claims that he is involved in cheque discounting business and accordingly, issued cheques in the name of Bombay Indore Transport Company and the said firm deposited cheques in Bombay Mercantile Co-op Bank and drawn cash from the bank. Further, the party has returned cash to the assesee and the same has been deposited into Canara Bank account. Although, the assesee claims that he is into cheque discounting business and amount equal to cheque issued to the Bombay Indore Transport company has been received from said party, but no evidences including confirmation has been filed from the above party, either before the lower authorities or before us. Therefore, we are of the considered view that the issues needs to go back to the file of the Ld. AO to ascertain the correct facts with regard to source of cash deposits found in Canara Bank Savings Bank account, in light of the claim of the assessee that the amount has been received from Bombay Indore Transport company. Hence, we set aside the issue to the file of the Ld. AO and direct him to re- do the assessment in accordance with law.
In the result, appeal filed by the assessee is allowed for statistical purpose.
Order pronounced in the open court on this 04 /12/2019
Mohd. Soyeb Haji Farooq Motorwala