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Income Tax Appellate Tribunal, MUMBAI BENCH “A”, MUMBAI
Before: SHRI RAJENDRA & SHRI SANJAY GARG
आदेश आदेश आदेश Per Sanjay Garg, Judicial Member:
The present appeal has been preferred by the assessee against the order dated 28.01.2014 of the Commissioner of Income Tax (Appeals) [hereinafter referred to as the CIT(A)] relevant to assessment year 2009-10. The assessee, since deceased, now this appeal has been represented by his legal representative/wife Smt. Rupali Arun Bhandare.
The assessee in this appeal is aggrieved against the confirmation of addition of Rs.15,59,178/- by the Ld. CIT(A) being cash deposited in bank account holding the same as ‘Income from undisclosed sources’. The brief facts of the case are that the assessee being an individual had filed return of income on 08.07.10 showing total income of Rs.1,84,430/-. The case was picked up for scrutiny and notice under section 142(1) of the Income
2 Shri Arun Abaji Bhandare Tax Act was issued to the assessee which was not complied with. The Assessing Officer (hereinafter referred to as the AO) noted that as per the AIR information cash deposits of Rs.27,62,400/- and Rs.13,77,550/- were made in the bank account of the assessee during the year under consideration. The AO further noted that the assessee had mentioned his business as ‘service sector’ and that it was a no accounts case. Since the assessee did not comply with the notice issued and did not come forward to disclose the source of deposits, hence the AO treated that the said deposits were the income of the assessee from undisclosed sources. He, therefore, made the addition of the above amount of Rs.41,39,950/- (Rs.13,77,550/- + Rs.27,62,400/-) into the income of the assessee. Being aggrieved by the above order of the AO, the assessee preferred appeal before the Ld. CIT(A).
In appeal before the Ld. CIT(A), the assessee pleaded that the notices received by the assessee were handed over by him to his consultant for representing the case before the Income Tax Officer. However, the said consultant did not appear before the AO and the assessee also was not aware of this fact, hence the necessary details/evidences could not be furnished before the AO. The assessee during the appellate proceedings before the Ld. CIT(A) furnished the additional evidences under rule 46A of the Income Tax Rules and submitted that the assessee was a small broker in second hand cars. His major clients were out stationed. His sub agents were also out of Mumbai. The assessee would derive information regarding the second hand cars available for sale with the parties at Mumbai. The assessee would further pass on that information to his sub agents who would contact the buyers, who would deposit cash from the said prospective buyers into the bank account of the assessee and thereafter the assessee would proceed to finalize the deed. If the deal is finalized, the assessee would issue cheque/pay order in favour of the seller and take his commission out of the deal. However, if the deal is not finalized, the assessee would return the money deposited in his bank account
3 Shri Arun Abaji Bhandare by the prospective buyers/sub agents. Since the major clients of the assessee were placed at Kolhapur, hence most of the amounts were deposited in Kolhapur branch of the bank. The assessee also furnished confirmations from the buyers, sub agents and sellers in support of his contentions. It was further submitted that the assessee did not maintain books of the accounts. A statement showing the details of amount deposited in bank account by car purchasers and the amount given to sellers was also submitted. The Ld. CIT(A) called a remand report from the AO in respect of the above submissions. After considering the remand report, the Ld. CIT(A) held that the AO had not properly examined the evidences and had summarily rejected the additional evidences submitted by the assessee without verifying the same. Thereafter, the Ld. CIT(A) himself proceeded to examine the evidences and found the claim of the assessee was broadly correct. He also noted that the assessee had also furnished confirmations from the brokers of car purchasers and car sellers. He also noted that out of the deposits the assessee had made certain payments to the car sellers by way of cheque/pay order aggregating to Rs.16,31,409/- and Rs.14,65,690/- from the two bank accounts of the assessee. He further noted that the amount deposited in the accounts of the assessee was Rs.39,41,663/- and Rs.17,14,614/- respectively as against considered by the AO of Rs.27,62,400/- and Rs.13,77,550/- respectively. The Ld. CIT(A), thereafter, held that to the extent of the payments made to the sellers the deposits in the bank accounts of the assessee were relating to the car broking business. He, however, held that since the assessee had not returned the remaining amount either to the prospective purchaser or to the sellers, hence remaining amount of Rs.15,59,178/- was the unexplained income of the assessee. He, therefore, confirmed the addition that extent. Being aggrieved by the above order of the Ld. CIT(A), the assessee filed appeal before us.
Smt. Rupali Arun Bhandare widow of the assessee being heir LR appeared before us and has submitted that the cash deposits were made by the 4 Shri Arun Abaji Bhandare sub agents, prospective purchasers of the cars and the necessary confirmations from the prospective purchasers, agents and even from sellers were also filed.
On the other hand, the Ld. D.R. has relied upon the findings of the Ld. CIT(A).
We have considered the rival contentions and have also gone through the records. It may be noted from the order of the Ld. CIT(A) by and large has agreed to the contentions of the assessee regarding the broking business in second hand cars. Further, the Ld. CIT(A) has also held that the assessee has been able to prove that certain deposits used to be made by the prospective buyers and agents who were out stationed into the bank account of the assessee which were further used to be paid by the assessee to the sellers, if the deal gets matured. Even the assessee had been able to prove such payments to the sellers. Under these circumstances, once the Ld. CIT(A) has given a finding that the claim of the assessee regarding the deposits was correct, then, merely because, at the end of the year certain amount was lying deposited in the bank account of the assessee, that itself, is not sufficient to hold that the same was undisclosed income of the assessee. We do not find any justification on the part of the Ld. CIT(A) in partly confirming the addition when he has found the claim of the assessee was broadly correct. In view of this, the additions confirmed by the Ld. CIT(A) are hereby ordered to be deleted.
In the result, the appeal of the assessee is hereby allowed. Order pronounced in the open court on 05.04.2017. आदेश क( घोषणा खुले "यायालय म. /दनांकः आदेश क( घोषणा खुले "यायालय म. /दनांकः 05 आदेश क( घोषणा खुले "यायालय म. /दनांकः आदेश क( घोषणा खुले "यायालय म. /दनांकः 05 05.04 05 04 04.2017 04 2017 2017 को क( गई । 2017 को क( गई । को क( गई । को क( गई । (राजे"" राजे"" / Rajendra) (संजय गग" संजय गग" / Sanjay Garg) राजे"" राजे"" संजय गग" संजय गग" लेखा सद"य / ACCOUNTANT MEMBER "याियक सद"य "याियक सद"य / JUDICIAL MEMBER लेखा सद"य लेखा सद"य लेखा सद"य "याियक सद"य "याियक सद"य /दनांक/Dated 05.04.2017 मुंबई/Mumbai; /दनांक मुंबई मुंबई मुंबई /दनांक /दनांक * Kishore
5 Shri Arun Abaji Bhandare
आदेश क( &ितिलिप अ1ेिषत/Copy of the Order forwarded Copy of the Order forwarded Copy of the Order forwarded to Copy of the Order forwarded to to : to आदेश क( &ितिलिप अ1ेिषत आदेश क( &ितिलिप अ1ेिषत आदेश क( &ितिलिप अ1ेिषत 1. अपीलाथ% / The Appellant अपीलाथ% अपीलाथ% अपीलाथ% 2. &'यथ% / The Respondent. &'यथ% &'यथ% &'यथ% 3. अपील) / The CIT(A)- आयकर आयु2 आयकर आयु2(अपील आयकर आयु2 आयकर आयु2 अपील अपील 4. आयकर आयु2 / CIT आयकर आयु2 आयकर आयु2 आयकर आयु2 5. मुंबई / The DR िवभागीय &ितिनिध िवभागीय &ितिनिध, , , , आयकर अपीलीय अिधकरण िवभागीय &ितिनिध िवभागीय &ितिनिध आयकर अपीलीय अिधकरण आयकर अपीलीय अिधकरण, , , , मुंबई आयकर अपीलीय अिधकरण मुंबई मुंबई Concerned Bench, 6. गाड" फाईल / Guard file. गाड" फाईल गाड" फाईल गाड" फाईल आदेशानुसार/ BY ORDER, आदेशानुसार आदेशानुसार आदेशानुसार स'यािपत &ित //// स'यािपत &ित स'यािपत &ित स'यािपत &ित सहायक पंजीकार (Dy./Asstt.