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Income Tax Appellate Tribunal, “E” BENCH, MUMBAI
Before: SHRI MAHAVIR SINGH, JM & SHRI MANOJ KUMAR AGGARWAL, AM
Per Manoj Kumar Aggarwal (Accountant Member)
The captioned appeal by assessee for Assessment Year [AY] 2010- 11 assails the order of Ld. Commissioner of Income tax (Appeal)-25, [CIT(A)], Mumbai dated 01/11/2016 by raising five grounds of appeal. Ground No. 5 is general in nature. Ground No. 1 & 3 has not been pressed by Ld. Counsel for the assessee during proceedings before us and hence the same are being dismissed as ‘not pressed’. Now, we proceed to dispose-off Ground No. 2 & 4 which are related with confirmation of certain cash credit of Rs.71,05,742/- and direction by Ld. CIT(A) to initiate penalty proceedings.
2. Briefly stated the assessee, being resident individual engaged in the business of mobiles, was assessed for impugned AY u/s 143(3) at Rs.1,76,01,400/- after certain adjustments / disallowances vide Assessing Officer [AO] order dated 20/03/2013 as against returned income of Rs.9,43,400/- filed by assessee on 01/07/2010. The issue under dispute is related with cash deposit of Rs.89.78 Lacs in one of the current account maintained by the assessee with Syndicate bank. The assessee attributed the same as receipt of loans which were advanced by the assessee in earlier years. To verify the same, the assessee was asked to produce capital account and Balance Sheet of the last two preceding years which he failed to do so which led the AO to believe that the assessee failed to prove identity, genuineness and creditworthiness Subhash Jain Assessment Year-2010-11 of these cash credits and added the same to the income of the assessee.
3. The assessee contested the same with partial success before Ld. CIT(A) vide impugned order dated 01/11/2016 where the assessee contended that cash of Rs.9,62,258/- was deposited out of opening cash balance of Rs10,29,556/- held by the assessee and further there was a cash withdrawal of Rs.42.25 Lacs which was re-deposited and a sum of Rs.28,80,742/- was received from surbhi jewelers prop. Bhanwaribai Jain against loan advanced by assessee in earlier years. The balance amount of Rs.9.10 Lacs was attributed to gift received by the assessee. The assessee, during remand proceedings, submitted Balance sheet and Loan confirmation from assessee’s mother Bhanwaribai Jain Prop. Surbhi Jewellers to establish repayment of loan. However, Ld. CIT(A) noted various discrepancies in assessee’s submissions and after analyzing cash transaction pattern of the assessee was not fully satisfied with the explanation offered by the assessee. Finally, after appreciating the remand report, submissions of the assessee and material on record, the Ld. CIT(A) provided relief to the extent of Rs.18.72 Lacs against opening cash balance for Rs.9.62 Lacs and cash gift of Rs.9.10 Lacs received by the assessee during the year and confirmed balance addition of Rs.71.06 Lacs, against which the assessee is in appeal before us.
The Ld. Counsel for assessee [AR], while placing various documents in the paper-book, contended that the assessee made cash withdrawals of more than Rs.42 Lacs from the said account and re- Subhash Jain Assessment Year-2010-11 deposited the same, the benefit of which has not been given to the assessee and the same is unjustified. Therefore, the additions, if any, which are to be made, should be to the extent of peak cash deficit only as per the books of accounts of the assessee. To support the same, the Ld. AR produced before us peak cash deficit working (cash book) from 01/04/2009 to 31/03/2010. It was further contended that the assessee received back loan of Rs.27.54 Lacs advanced by him to surbhi jewelers prop. Bhanwaribai Jain in earlier years, a duly signed ‘confirmation of accounts’ of which was in the possession of the assessee. The Ld. AR fairly contended that as the assessee was in possession of sufficient evidences to substantiate his claim, he may be provided another opportunity to demonstrate the same before Ld. AO.
Per contra, the Ld. Departmental Representative contended that the assessee made heavy deposit in the Bank account but still could not substantiate the same despite being provided with several opportunities. The assesse also failed to produce its financial statements for the past two years as per the request of Ld. AO which cast serious doubt on the submissions made by the assessee.
We have heard rival contentions and perused relevant material on record. The assessee has placed ‘confirmation of account’ from surbhi jewelers and peak cash deficit working in the paper-book which lend, feeble support to various arguments of the assessee. No doubt, the onus to prove the cash credit squarely lied on the assessee but he has failed to prove the same conclusively. However, since the matter is a factual one and matter of reconciliation only, in the interest of justice, we Subhash Jain Assessment Year-2010-11 see no harm in providing another opportunity to assessee to substantiate his claim before Ld. AO by adducing sufficient evidences in this regard. Therefore, we deem it fit to restore the matter back to the file of Ld. AO to re-appreciate the additional evidences in the form of ‘confirmation of accounts’ and ‘peak cash deficit working’ submitted by the assessee vis-à-vis his financial statements for the last couple of years. The assessee is also directed to substantiate his claim in this regard by producing necessary documents / information forthwith failing which the Ld. AO shall be at liberty to dispose-off the same on the basis of material available on record. Resultantly, the assessee’s ground of appeal stands allowed for statistical purposes.
7. In Ground No.4, the assessee is aggrieved by directions given by Ld. CIT (A) for initiation of penalty for violation of Section 269SS / 269T. Since, the penalty proceedings are separate, the same may be agitated by the assessee at appropriate level and our interference, at this stage is not required. Therefore, the same is dismissed.
In nutshell the assessee’s appeal stands partly allowed for statistical purposes.
Order pronounced in the open court on 12th May, 2017.