APURVA PARESH SHAH,MUMBAI vs. ITO 32(1)(2), MUMBAI
Facts
The assessee, a partner in a construction and property renting firm, filed an income return for AY 2014-15. The Assessing Officer (AO) made additions to the total income based on observed cash deposits and unsecured loans, which the assessee explained as cash in hand and from genuine lenders. The CIT(A) upheld the AO's additions.
Held
The Tribunal observed that the assessee failed to prove the identity and creditworthiness of parties and the genuineness of transactions before the AO and CIT(A). Even before the Tribunal, no supporting documentary evidence was provided. The CIT(A) had not decided the issues on merits, hence the case was remanded.
Key Issues
Failure of the assessee to prove the genuineness, identity, and creditworthiness of transactions and parties, and the adequacy of cash in hand and unsecured loans.
Sections Cited
250, 143(3), 143(2), 142(1), 234B, 234C, 271(1)(C), 143(1)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “A” BENCH, MUMBAI
IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, MUMBAI
BEFORE SHRI OM PRAKASH KANT, AM AND MS. KAVITHA RAJAGOPAL, JM
ITA No. 3725/Mum/2023 (Assessment Year: 2014-15) Apurva Paresh Shah ITO 32 (1)(2) A 501, Nirmal Sagar, Mumbai Vs. Devidas Road, Borivali (W), Mumba-400 092 PAN/GIR No. AMTPS 9910 Q (Assessee) : (Respondent) Assessee by : None : Shri Manoj Kumar Sinha Respondent by Date of Hearing : 29.02.2024 : 29.02.2024 Date of Pronouncement
O R D E R Per Kavitha Rajagopal, J M:
This appeal has been filed by the assessee, challenging the order of the learned
Commissioner of Income Tax (Appeals) (‘ld.CIT(A) for short), National Faceless Appeal
Centre (‘NFAC’ for short) passed u/s.250 of the Income Tax Act, 1961 (‘the Act'),
pertaining to the Assessment Year (‘A.Y.’ for short) 2014-15.
As there was representation on behalf of the assessee, we hereby proceed to decide
this appeal by hearing the learned Departmental Representative ('ld.DR' for short) and on
perusal of the materials available on record.
The assessee has challenged this appeal on the following grounds: "1. On the facts and circumstances of the case, the learned assessing officer has erred in holding that decrease in rental income in previous year as compared to AY 2013-14 is income in form of undisclosed rental income. The Len. Assessing officer has made the additions just on guess work, surmises and conjectures.
2 ITA No.3725/Mum/2023 (A.Y.2014-15) Apurva Paresh Shah vs. ITO 2. The cash deposits of Rs.29 ,41,928/- was from cash in hand only which was withdrawn from time to time from Banks only. The nature of business of assesse is such that it was necessary to keep cash in hand. 3. On the facts and circumstances of the case, the learned assessing officer was in hurry to pass the order u / s 143(3) of the Income Tax Act, 1961 in December time barring matters and has erred in holding that the appellant has not established the genuineness, identity and creditworthiness of the loan creditors of Rs.90,00,000/-. All are genuine lenders. The Len. Assessing officer has made the additions just on guess work, surmises and conjectures. 4. The A.O. erred in charging interest u / s 234B and 234 C of the Income Tax Act, 1961. 5. On the facts and circumstances of the case and in law, the learned assessing officer has erred in initiating penalty proceedings u / s 271(1)(C) of the Income Tax Act, 1961.
The brief facts are that the assessee is an individual and a partner in partnership
firm engaged in the business of construction and renting of property. The assessee has
filed his return of income on 05.07.2015, declaring total income at Rs.13,26,181/- out of
salary income, business income, income from house property and income from other
sources and the same was processed u/s. 143(1) of the Act. The assessee’s case was then
selected for scrutiny under CASS and notice u/s. 143(2) and 142(1) were duly issued and
served upon the assessee.
The ld. Assessing Officer ('A.O.' for short) observed that the there had been a cash
deposit in the assessee’s account with Kapol Co-operative Bank Ltd. amounting to
Rs.20,90,000/- and Rs.32,00,000/- in the bank account maintained with Bank of Baroda.
The ld. A.O. sought for details pertaining to the said cash deposits. The assessee had
stated the the opening cash balance was Rs.23,68,110/- and the total withdrawal was
Rs.65,81,741/- and further the unsecured loan as per the balance sheet was Rs.90,00,000/-
from M/s. SS Developers. The ld. A.O. not satisfied with the assessee’s explanation
determined the total income at Rs.1,36,12,760/- by making various additions.
Aggrieved the assessee was in appeal before the ld. CIT(A) who upheld the
addition made by the ld. A.O. on the ground that the assessee has been non compliant
3 ITA No.3725/Mum/2023 (A.Y.2014-15) Apurva Paresh Shah vs. ITO throughout the appellate proceeding and had failed to substantiate his claim by any
documentary evidence.
The assessee is in appeal before us, challenging the impugned order of the ld.
CIT(A).
We have heard the learned Departmental Representative ('ld.DR' for short) and
perused the materials available on record. It is observed that the assessee has not proved
the identity and creditworthiness of the parties and the genuineness of the transaction
neither before the ld. A.O. nor before the ld. CIT(A). It is also pertinent to point out that
even before us, the assessee has not furnished any submission nor any supporting
documentary evidence to substantiate the claim of the assessee, failing which the assessee
has failed to discharge the initial onus casted upon him. As it is observed that the ld.
CIT(A) has not decided the issues on the merits of the case, we deem it fit to remand this
issue back to the file of the ld. CIT(A) on the principles of natural justice with the
direction that the assessee should co-operative with the proceeding before the first
appellate authority without any undue delay.
In the result, the appeal filed by the assessee is allowed for statistical purpose.
Order pronounced in the open court on 29.02.2024
Sd/- Sd/-
(Om Prakash Kant) (Kavitha Rajagopal) Accountant Member Judicial Member Mumbai; Dated : 29.02.2024 Roshani, Sr. PS
4 ITA No.3725/Mum/2023 (A.Y.2014-15) Apurva Paresh Shah vs. ITO
Copy of the Order forwarded to : 1. The Appellant 2. The Respondent 3. CIT - concerned 4. DR, ITAT, Mumbai 5. Guard File BY ORDER,
(Dy./Asstt. Registrar) ITAT, Mumbai
