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Income Tax Appellate Tribunal, “A” BENCH, MUMBAI
IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, MUMBAI BEFORE SRI MAHAVIR SINGH, JM AND SRI N.K. PRADHAN, AM (A.Y:2009-10) Income Tax Officer Khushboo Ali Khan -22(1)(3), Rook No.406, 4 th Shop No.3, Opp. Shiv Pravha Floor, Tower No.6, Vashi CHS, Asalfa Village, Sakinaka Vs. Railway Station Complex, Vashi Link Road, Ghatkopar(W), Navi Mumbai-400703 Mumbai-400084 PAN No.ALEPK0474B Appellant .. Respondent .. Shri. Rajesh Kumar Yadav, DR Revenue by Assessee by .. Shri Jitendra Singh, AR Date of hearing .. 19-12-2016 Date of pronouncement .. 19-12-2016 O R D E R PER MAHAVIR SINGH, JM:
This appeal by the Revenue is arising out of the order of CIT(A)-33, Mumbai in appeal No. CIT(A)-33/IT/309/13-14 dated 17-07-2014. The Assessment was framed by ITO-22(1)(3), Mumbai for the A.Y. 2009-10 vide order dated 25-03-2013 u/s 144 r. w. s. 147 of the Income Tax Act, 1961 (hereinafter ‘the Act’).
The only issue in this appeal of Revenue is against the order of CIT(A) deleting the addition made by AO being deposited in the bank account of assessee’s brother. For this Revenue has raised following ground No. 1: - “1. On the facts and in the circumstances of the case in law, the Ld. CIT(A) erred in deleting the addition made on account of cash credit without appreciating that the said assessee could not explain as to how said deposits are not of his and are of his brother.”
3. We have heard the rival contentions and gone through the facts and circumstance of the case. Briefly, stated facts are that the AO during the course of the assessment proceedings noticed from the AIR information that the assessee has following cash deposits in the bank accounts.
Name of Bank Account No. Amount SBI 10268643704 10,81,000.00 SBI 000010268621882 37,61,500.00 SBI 00000010268643704 21,99,808.00
Accordingly, the total cash deposited in these bank account was tune of Rs.59,61,308/-. As regards to the bank account No. 000010268621882 is concerned it was claimed by assessee before the CIT(A) that this bank account belongs to his brother and brother was produced before the AO. Before CIT(A) assessee filed the details of this account that the same belonging to assessee’s brother Mr. Nazim Ali Khan and also a letter from SBI (State Bank of India) stating that this account belongs to one Mr. Nazim Ali Khan as son of T. Khan and is being maintained since 23.04.2003. On this very basis the CIT(A) deleting the addition of cash deposit vide para 3.7 as under: -
I have considered the assessment order and the submissions made for the appellant. In so far as addition made by the A.O in respect of account belong to the appellant’s brother is concerned, it is now not in dispute that the account No. 000010268621882 is in the name of the brother of the appellant and, therefore, unless it is proved beyond doubt that the deposits made in such accounts actually pertains to the appellant no addition can be made in the hands of appellant merely on the basis of some information received from AIR report, and when the assessee produces the person concerned before the A.O who admitted the fact that the account belonged to him. Further, merely because the brother of the appellant having not filed his return of income would in no way justify the addition in the hands of the appellant. In the instant case the A.O has not brought on record any material to show that the deposits made in such account actually belonged to the appellant and, therefore, in absence of such findings, I am unable to accept the argument of the A.O that since his brother had not filed return of income, the receipts would partake the character of appellant's income. Hence, considering these facts, I find merits in the appellant's claim that no addition should be made in his hands on accounts of any deposits made in his brother's savings accounts. Therefore, addition made by the A.O in all amounting to Rs.37,61,500/- is deleted. However, the A.O is free to take action in the hands of appellant’s brother, as he may deem fit in accordance with law.
We find that this factual finding is recorded by CIT(A) that this account No. 000010268621882 maintained with SBI belongs to assessee’s brother Mr. Nazim Ali Khan as son of T. Khan and SBI also stated in their letter dated 28-05-2014 this fact. Once this is the position, the deposit made to in this account cannot be added in the hands of the assessee and CIT(A) has rightly deleted this amount of Rs.37,61,500/- and we confirm the order of CIT(A) deleting the addition.
The next issue in this appeal of Revenue is against the order of CIT(A) restricting the addition @ of 10% of deposits at Rs.2,19,980/-as against the addition made by AO of Rs.21,99,808/-. For this Revenue has raised following ground No.2: -
2. On the facts and circumstances of the case and in law, the Ld. CIT(A) eared in restricting the addition to the tune of 10% of deposit without appreciating that the Page 2 of 4 assessee categorically failed to establish that these deposits are related to business transactions.”
We have heard the rival contentions and gone through the facts and circumstances of the case. Before AO as well as before CIT(A) assessee claimed that she is fruit merchant and these two banks belongs to her business and the cash deposits made out of the disclosed sale of Rs. 31,41,487/- on which profit was declared at Rs.1,72,835/-. The assessee has filed a bank statement, balance sheet and accordingly, the assessee claimed that these are cash deposits are out of disclosed sales, but the AO has not believed on the explanation of the assessee and added the sum of Rs.21,99,808/- as unexplained cash deposits in these two banks accounts. Aggrieved, assessee preferred appeal before CIT(A), who restricted the addition to the extent of 10% of deposits by observing in para 3.8 as under: -
3.8 So far as addition pertaining to cash deposited in the bank account No.00000010268643704is concerned, it is now not in dispute that the account pertained to the appellant himself and, therefore, he is bound to explain the deposits made in his account. On appreciation of facts, it is seen that the appellant had during the remand proceedings explained the cash deposits in his accounts by producing the cash account and bank summary which according to the A.O was an afterthought. I am unable to accede to such stand of the AO since whatever is submitted before the A.O in remand proceedings was subjected to his verification and that he could call for any other information which in his opinion was required to find the actual facts of the case. Merely because the appellant had produced evidence in remand proceedings and not in assessment proceedings would not go to make such evidence an afterthought. A.O was required to deliberate on factual matrix of the submission made by the appellant. In the remand proceedings, the AO has not found fault with the cash book and other submission para made explaining the deposits in the said account and, therefore, merely stating the submission being an afterthought cannot be the ground for justifying such addition. However, in the instant case, the appellant has explained the amount deposited as pertained to his business receipts and in absence of independent evidence to show the actual sales made and deposit in bank account, I am of the considered view that addition to the extent of 10% such deposit if sustained would take care of profit element embedded in the said deposits and meet both ends of justice. Therefore, A.O. is directed to restrict the addition to 10% of such deposit in Bank Account No.000000 10268643704 and compute the income accordingly.
Aggrieved, now Revenue is in appeal before Tribunal.
Hearing the rival contentions and goning through the facts of the case, we find that the assessee is a fruit merchant and recorded the turnover in his books of account at Rs.31,41,487/- and declared profit in its account at Rs.1,72,835/-. The CIT(A) further made disallowed of 10% of profit embedded in the deposits and deleted the balance addition. It is Rs. 31,41,487/- and these are deposited in the bank account. We find no infirmity in the order of CIT(A) and hence the deletion is confirmed. Appeal of the Revenue is dismissed.
In the result, the appeal of the Revenue is dismissed. Order pronounced in the open court on 19-12-2016.