DILIPKUMAR BIKJAMCHAND JAIN,MUMBAI vs. DCIT CC 2(4), MUMBAI

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ITA 7187/MUM/2016Status: DisposedITAT Mumbai18 July 2019AY 2013-144 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal found that the assessee needed a further opportunity to explain the sources of cash, deposits, and the claim of gifts. The case was restored to the Assessing Officer for fresh examination.

What were the facts?

During a search operation, cash of Rs. 12.50 lakhs and silver bars worth Rs. 5.30 lakhs were found in a locker rented by the assessee. The assessee also made bank deposits of Rs. 11.94 lakhs and claimed Rs. 2.00 lakhs for household expenses. The assessee initially agreed to offer these as undisclosed income but later provided explanations.

What were the issues?

Whether the assessee could adequately explain the sources of cash, bank deposits, and the claim of gifts received, and whether the additions made by the AO were justified.

Which sections of the Income-tax Act were involved?

Section 132(4)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, MUMBAI BENCHES “SMC”, MUMBAI

Before: Shri B.R. Baskaran

For Appellant: Shri Ritesh Kumar Shah, ld.AR
For Respondent: Shri Chaitnya Anjaria, ld.DR
Hearing: 18.07.2019

Per B.R. Baskaran, Accountant Member

1.

The assessee has filed this appeal challenging the order dated 21-09- 2016 passed by Ld CIT(A)-48, Mumbai and it relates to the assessment year 2013-14. The assessee is aggrieved by the decision of Ld CIT(A) in confirming additions made by the AO.

2.

I heard the parties and perused the record. The revenue carried out search and seizure operations in the case of M/s Gold Sukh Safety Vaults Ltd on 08.11.2012. The said company was providing lockers on rent. The assessee along with some other persons had rented a locker numbered as 599. The revenue also searched the locker held by the assessee along with some other persons. It contained cash of Rs.12.50 lakhs, silver bars weighing 8.44 kgs valued at Rs.5.30 lakhs. The assessee could not explain

[2] Dilipkumar Bikamchand Jain the sources thereof in the statement taken u/s 132(4) of the Act. The assessee, during the course of assessment proceedings, took contradictory stands, i.e., he agreed to offer above amounts as undisclosed income at one stage, but subsequently explained that the cash represents his savings and silver bars represent gifts received from his father in law. The AO did not accept the same and accordingly assessed both the above said amounts as income of the assessee.

3.

The AO also noticed that the assessee has made deposits into his bank accounts aggregating to Rs.11.94 lakhs and the AO also assessed the same as income of the assessee. He also added Rs.2.00 lakhs towards household expenses. In the appellate proceedings, the Ld CIT(A) confirmed all the additions.

4.

The Ld A.R reiterated the submissions made before tax authorities. Inviting my attention to the cash flow statement given in the paper book, the Ld A.R submitted that the cash of Rs.12.50 lakhs and cash deposits of Rs.11.94 lakhs stand fully explained by the cash flow. He submitted that the assessee has received silver bars from his father-in-law only.

5.

The Ld D.R, on the contrary, submitted that the assessee is making self serving statements and hence his explanations were rightly rejected by Ld CIT(A).

6.

I have heard rival contentions and perused the record. During the course of hearing before me, the Ld A.R was asked as to whether the assessee would be in a position to prepare a cash book on day to day basis, instead of cash flow statement furnished in the paper book. The Ld A.R submitted that the cash book could be prepared and the same would explain availability of cash balance as well as the sources for deposits made

[3] Dilipkumar Bikamchand Jain into the bank account. He also submitted that the domestic drawings could also be explained through the cash book. With regard to the claim of receipt of silver bars as gifts from father in law, the Ld A.R submitted that the assessee would be in a position to obtain affidavits from mother-in-law or other close relatives.

7.

In view of the above, I am of the view that, in the interest of natural justice, the assessee may be provided with one more opportunity to explain his case. Accordingly I set aside the order passed by Ld CIT(A) and restore all the issues to the file of the AO for examining them afresh. After affording adequate opportunity of being heard, the AO may take appropriate decision in accordance with law.

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