Jagdish N. Thakkar , Mumbai vs Assessee

सव[ौी डȣ. मुमोहन, उपाÚय¢ एवं नरे Ûि कुमार ǒबãलैáया, लेखा सदःय के सम¢

BEFORE SHRI D. MANMOHAN, VICE PRESIDENT AND

SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER

आयकर अपील सं./I.T.A. No. 4787/Mum/2012 िनधा[रण वष[ / Assessment Year : 2005-06 (िनधा[ Shri Jagdish N. Thakkar, बनाम The ITO, Ward 23(2)(3), बनाम/ A/19A, Blue Bells, Pratyakshakar Bhavan, Vs. Devidayal Road, Bandra Kurla Complex, Mulund (W), Mumbai-400 051 Mumbai-400 080 ःथायी ले खा सं . /जीआइआर सं . /PAN/GIR No. :AABPT 4165C (अपीलाथȸ /Appellant) .. (ू×यथȸ / Respondent) अपीलाथȸ ओर से/ Appellant by: Shri Sanjaykumar A Thakkar ू×यथȸ कȧ ओर से/Respondent by: Shri Vivek A perampurna

सुनवाई कȧ तारȣख / Date of Hearing :12.01.2015 घोषणा कȧ तारȣख /Date of Pronouncement :14.01.2015

आदे श / O R D E R

PER N.K. BILLAIYA, AM:

This appeal by the assessee is directed against the order of the Ld. CIT(A)-33, Mumbai dt.28.5.2012 pertaining to A.Y.2005-06.

2. The sole grievance of the assessee is that the Ld. CIT(A) erred in confirming the penalty levied by the AO u/s. 271(1)(c) of the Act.

2 ITA No. 4787/M/2012 3. The root for the levy of penalty lie in the assessment order dt. 31.12.2007 made u/s. 143(3) of the Act. During the course of the assessment proceedings, on the basis of the AIR information, the assessee was asked to explain cash deposits in savings bank account to the tune of Rs. 27.55 lakhs. The assessee was also asked to furnish the source of cash deposits in the bank account with supporting evidences. The assessee filed a daily cash flow statement claiming Rs. 6,85,325/- as cash in hand at the end of the previous year. The assessee also filed peak working of the deposits in the bank and the same was calculated at Rs. 15,12,225/-. The explanation filed by the assessee did not find favour with the AO. The AO was of the opinion that the assessee has failed to file the capital account for the year and also for earlier years. The AO also rejected the claim of the assessee that the deposits in the savings bank account have been made out of the withdrawals. The AO made the addition of Rs. 27.55 lakhs as unexplained cash deposits.

3.1. The assessee carried the matter before the Ld. CIT(A) and once again worked out the peak cash deposit and convinced the Ld. CIT(A) that the peak of the cash balance is Rs. 15,12,225/-. The Ld. CIT(A) confirmed the addition of Rs. 15,12,225/- in the place of Rs. 27.55 lakhs adopted in the assessment order.

3.2. The assessee further preferred an appeal before the Tribunal and claimed to have opening cash balance of Rs. 6,85,325/- and also claimed that the deposits were made out of the withdrawals. After considering the facts and the submissions, the Tribunal in ITA No. 1475/M/09 considered the excess deposits at Rs. 6.05 lakhs and gave credit on estimate basis for the cash available at the beginning of the year at Rs. 25,000/- and restricted the addition to Rs. 5.80 lakhs.

3 ITA No. 4787/M/2012 4. With the above stated facts, the penalty has been levied u/s. 271(1)(c) of the Act. In the penalty proceedings, the assessee stated that the additions have been made on presumptions formulated by the AO and the presumptions would not justify the levy of penalty u/s. 271(1)(c) of the Act. The AO was of the opinion that the assessee has no explanation in respect of the unexplained cash deposited in his bank account. The AO proceeded by levying minimum penalty.

5. Aggrieved by this, the assessee carried the matter before the Ld. CIT(A) but without any success.

6. Aggrieved by this, the assessee preferred an appeal before us. The Ld. Counsel for the assessee reiterated what has been submitted in the quantum proceedings. It is the say of the Ld. Counsel that the entire addition has been made on estimate basis and therefore penalty cannot be levied u/s. 271(1)(c) of the Act. The Ld. Counsel relied upon the decision of the Hon'ble High Court of Rajasthan in the case of Krishi Tyre Retreading & Rubber Industries 44 taxmann. Com 9 (Raj). The Ld. Counsel also relied upon the decision of the Tribunal Chandigarh Bench in the case of Prem Chand Vs ACIT 52 Taxmann. Com 95.

7. Per contra, the Ld. Departmental Representative supported the orders of the lower authorities.

8. We have carefully perused the orders of the authorities below. We have also considered the assessment order and the Appellate orders in the quantum proceedings. It is an undisputed fact that the assessee was found to have deposited cash in his savings bank account to the tune of Rs. 27.55 lakhs. The claim of the assessee that the deposits have been made 4 ITA No. 4787/M/2012

out of withdrawals has been accepted by the Tribunal by its order in ITA No. 1475/M/09. However, at the same time, the Tribunal has confirmed the addition to the extent of Rs. 5.80 lakhs. The claim of the assessee that the addition is made on estimate basis is totally incorrect and against the facts of the case. The addition has been sustained on the basis of cash deposited in the savings bank account and it is not an estimated figure but actual deposits made by the assessee. Therefore, the decisions relied upon by the assessee are misplaced. We find that in the quantum proceedings as well as the penal proceedings, nowhere the assessee has shown his sources of income whether he is doing any business. The assessee has also not filed balance sheet/capital accounts to prove the availability of cash as no direct evidences have been brought on record to establish the nexus between the availability of cash and deposits made in the bank account. In our opinion, levy of penalty u/s. 271(1)© of the Act is justified on the unexplained cash deposit of Rs. 5.80 lakhs made by the assessee in his savings bank account. Dismissing the appeal filed by the assessee, we direct the AO to recompute the penalty on the addition of Rs. 5.80 lakhs.

9. In the result, the appeal filed by the assessee is dismissed.

Order pronounced in the open court on 14th January, 2015

Sd/- Sd/-

(D.MANMOHAN ) (N.K. BILLAIYA) उपाÚय¢ /VICE PRESIDENT लेखा सदःय / ACCOUNTANT MEMBER

मुंबई Mumbai; Ǒदनांक Dated : 14th January, 2015 व.िन.स./ RJ , Sr. PS 5 ITA No. 4787/M/2012

आदे श कȧ ूितिलǒप अमेǒषत/Copy षत of the Order forwarded to :

1. अपीलाथȸ / The Appellant

2. ू×यथȸ / The Respondent.

3. आयकर आयुƠ(अपील) / The CIT(A)-

4. आयकर आयुƠ / CIT

5. ǒवभागीय ूितिनिध, आयकर अपीलीय अिधकरण, मुंबई / DR, ITAT, Mumbai

6. गाड[ फाईल / Guard file.

आदे शानुसार/ ार BY ORDER, स×याǒपत ूित //True Copy// उप/सहायक उप सहायक पंजीकार (Dy./Asstt. Registrar) आयकर अपीलीय अिधकरण, अिधकरण मुंबई / ITAT, Mumbai