Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, MUMBAI BENCHES “D” MUMBAI
Before: SHRI SAKTIJIT DEY & SHRI N.K. PRADHAN
ORDER PER N.K. PRADHAN, AM
This is an appeal filed by the revenue. The relevant assessment year is 2004-05. The appeal is directed against the order of the Commissioner (Appeals) – 34, Mumbai and arises out of order u/s 143(3) of the Income Tax Act, 1961 (the “Act”).
The grounds of appeal filed by the revenue read as under:-
i. On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in deleting an amount of Rs. 13,51,693/- deposited by the assessee in her bank accounts No. 3826 with NKSGB Bank and No. 785 with Bharat Co. Op. Bank holding that the assessee’s husband confirmed the loan transaction and even on merits none of the entries in the bank accounts warranted any addition in form of unexplained cash credits, without verifying the supporting documentary evidences and without considering that this amount also includes the loan taken from parties other than assessee’s husband. ii. On the facts and in the circumstances of the case and in law, ld. CIT(A) erred in deleting the addition made by the A.O. of Rs. 12,66,000/- on account of cash sales of wedding cards and Rs. 5,80,555/- on account of cash loans, without verifying these purchase parties or remanding the issue back to AO for re-verification and admitting the additional evidence with regard to cash loans in contravention to Rule 46A of the I.T. Rules, 1961.
The 1st ground raised in this appeal pertains to the addition of Rs. 13,51,693/- as unexplained cash credit in respect of deposits made in NKGSB bank account number 3826 and Bharat Co. Op. Bank Ltd. bank account number 785. The Assessing Officer (AO) made an addition of the above sum as the assessee failed to furnish any documentary evidence before him. The assessee preferred an appeal against the order of the AO before the learned CIT(A). We find that the learned CIT(A) observed that since these bank accounts were disclosed, no addition could have been made on the basis of entries made therein. Therefore he deleted the addition of Rs. 13,51,693/- made by the AO as unexplained cash credit.
3.1 Before us, the learned counsel of the assessee relies on the order of the learned CIT(A). On the other hand, the learned DR supports the order of the A.O.
3.2 We have heard the rival submissions and perused the relevant material on record. It is found that the AO has made the following observations while making an addition of Rs. 13,51,693/-: “From the above submission of the assessee it is seen that the receipts in bank accounts on account dividend of Rs. 2,77,650/-, Gold Loan of Rs. 77,000/- in Bharat Co. Op. Bank Ltd., appears to be explained. Similarly the receipts on account of divided of Rs. 1,93,309/- and bank interest of Rs. 234/- and Loan from R.S. Maroo of Rs. 3,25,000/- (squared off during the year) appears to be explained. Thus, out of total cheque deposits in the aforesaid bank accounts an amount of Rs. 8,73,193/- (277650 + 77000 + 193309 + 234 + 325000) appears to be explained. As regards other receipts in the form of loans and consultancy for wedding, receipt from V.R. Gems & Jewellery, etc., cannot be acceptable as the assessee has not furnished any documentary evidences namely, copy of loan confirmation, copy of bank statement copy of return, copy of purchase and sales bills from V.R. Gems & Jewellery etc. In absence of basic details, the claim of receipt and loan from the above said entitles cannot be acceptable and accordingly, the same is added to the total income on account of unexplained cash credits in the hands of the assessee. Thus, an addition of Rs. 13,51,693/- [(1016680 + 1208206) – 873193] is made to the total income of the assessee.”
From the above we find that the AO is not sure about the certainty of expenditure as he has mentioned “appears to be explained”. We find that the learned CIT(A) has rightly concluded that the AO has not found any discrepancy in the books of accounts of the assessee vis-a-vis the impugned bank account No. 3826 and account No. 785. In view of the above, we uphold the order of the learned CIT(A) on the above issue. Thus ground No. 1 filed by the revenue is dismissed.
The 2nd ground in this appeal relates to the addition of Rs. 20,09,770/- made by the AO as unexplained cash credit in respect of transactions of sale of wedding cards and cash loans. The AO during the course of assessment proceedings issued notices u/s 131 to various parties. He found that M/s. Porwal Creative Vision Pvt. Ltd., M/s Remco Card Manufacturing, M/s Anita Art Printers and M/s Jain Paper Agency have stated that they had not carried out any transaction with the assessee. Therefore, he made an addition of Rs. 20,09,770/- as unexplained cash credit. The learned CIT(A) observed that since the business was done by the assessee in the name of M/s. Ajay Cards, confusion arose during the course of assessment proceedings as the AO inquired about the transactions with the assessee and not the transactions of the parties with M/s. Ajay Cards. M/s. Ajay Cards being a proprietary concern of the assessee and nothing adverse having been found, the learned CIT(A) deleted the addition of Rs. 20,09,770/- made by the AO.
4.1 Before us, the learned counsel of the assessee relies on the order of the learned CIT(A). On the other hand, the learned DR supports the order of the A.O.
4.2 We have heard the rival submissions and perused the relevant material on record. We find that the learned CIT(A) has arrived at a finding that the concerned parties have never said that they have not done any transaction with the proprietary concern M/s. Ajay Cards, Goregoan (West), Mumbai on which the bills were raised by them. The learned CIT(A) has taken into account the contention of the assessee that since the business was done in the name of M/s. Ajay Cards, the confusion arose during the course of assessment proceedings because the AO asked the transactions with Smt. Renuka Maroo and he had not enquired about the transactions of the parties with M/s Ajay Cards. It is found that the above clarification like having transactions of the parties with M/s. Ajay Cards was not filed before the AO. In view of the above, the order of the learned CIT(A) in respect of ground No. 2 of this appeal is set aside and the same is restored back to the file of the AO for making an assessment as per the provisions of the Act after giving a reasonable opportunity of being heard to the assessee. The assessee is directed to file the relevant details before the AO. Thus the 2nd ground of appeal filed by the revenue is allowed for statistical purposes.
In the result, the appeal is partly allowed.
Order pronounced in the open court on 29/03/2017