KAMRAN MOOSA SIWANI,MUMBAI vs. ITO 15(1)(2), MUMBAI

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ITA 3252/MUM/2013Status: DisposedITAT Mumbai18 August 2016AY 2008-093 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that Section 69 is attracted when investments are not recorded in books of account or the explanation is unsatisfactory. Since the assessee's bank accounts were disclosed and books of account were not rejected, the deposits were considered accounted for.

What were the facts?

The Assessing Officer observed cash deposits and withdrawals in the assessee's bank account. The assessee explained the deposits as coming from business receipts and re-deposits of withdrawals, but the AO was not satisfied and added the peak deposit as unexplained investment.

What were the issues?

Whether cash deposits in a disclosed bank account, supported by business receipts and re-deposits, can be added as unexplained investment under Section 69 when the assessee's books of account have not been rejected.

Which sections of the Income-tax Act were involved?

Section 69

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, MUMBAI BENCH “A”, MUMBAI

Before: SHRI B.R. BASKARAN & SHRI SANJAY GARG

For Appellant: Shri Gyaneshwar Kataram, A.R
For Respondent: Shri A. Ramachandran, D.R
Hearing: 18.08.2016Pronounced: 18.08.2016

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH “A”, MUMBAI BEFORE SHRI B.R. BASKARAN, ACCOUNTANT MEMBER AND SHRI SANJAY GARG, JUDICIAL MEMBER Assessment Year: 2008-09 Shri Kamran M. Siwani, CIT (A) 26, Mumbai, 95, Morland Road, Mahalaxmi Chambers, Halima Apartment, Vs. Ground Floor, B Wing, Flat No.303, Mahalaxmi, Mumbai – 400 008 Mumbai – 400 034 PAN: AWPPS9278M (Appellant) (Respondent) Present for: Assessee by : Shri Gyaneshwar Kataram, A.R. Revenue by : Shri A. Ramachandran, D.R. Date of Hearing : 18.08.2016 Date of Pronouncement : 18.08.2016 O R D E R Per Sanjay Garg, Judicial Member:

The present appeal has been preferred by the assessee against the order dated 04.02.2013 of the Commissioner of Income Tax (Appeals) [hereinafter referred to as the CIT(A)], relevant to assessment year 2008-09.

2.

The assessee through his grounds of appeal has agitated the action of the Ld. CIT(A) in confirming the addition of Rs.4,22,028/- into the total income of the assessee as income from undisclosed sources under section 69 of the Income Tax Act.

3. The brief facts of the case are that during the assessment proceedings, the Assessing Officer (hereinafter referred to as the AO) observed that in the bank account of the assessee there were cash deposits and cash withdrawals of Rs.10,96,960/- & Rs.7,70,400/- respectively. In this regard, it was explained by the assessee that the cash deposits have come out of receipts of cosmetic business and by re-deposits out of cash withdrawals. The AO was not satisfied with the explanation of the assessee as the same was not supported by any 2 Shri Kamran M. Siwani evidence. Under these circumstances, the AO worked out the peak deposit of Rs.4,22,028/- and added the same as unexplained investment in bank deposits u/s.69 of the Act.

4. In appeal, the Ld. CIT(A) passed an ex-parte order confirming the additions made by the AO. The assessee, has, thus come in appeal before us.

5.

We have heard the rival contentions and have also gone through the records. The Ld. A.R. of the assessee has brought to our notice that the assessee has been maintaining proper accounts and all the accounts of the assessee were fully disclosed in the return of income. The bank accounts of the assessee were duly disclosed in the books of the account. The books of accounts have not been rejected by the AO during the assessment proceedings. Under such circumstances, the deposits in the bank accounts were duly accounted for and were disclosed in the return of income. The provisions of section 69 are attracted when any investments made by the assessee are found to be not recorded in the books of account and the assessee offers no explanation about the nature and source of investments or the explanation offered by the assessee is not, in the opinion of the AO, satisfactory. However, in the case in hand, the bank accounts of the assessee are fully disclosed. The assessee has been maintaining proper books of account and the same have not been rejected by the AO. In view of this, no additions under section 69 are warranted. We therefore set aside the order of the lower authorities and deeted the additions so made by the AO.

6.

In the result, the appeal of the assessee is hereby allowed. Order pronounced in the open court on 18.08.2016.

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