Kirti Prataprai Desai, Mumbai vs Assessee

This appeal by the assessee is directed against the order passed by CIT(A)-34, Mumbai and it pertains to A.Y. 2006-07.

2. Addition of `20,83,621/-, made by the AO under section 68 of the Act is subject matter of dispute before us.

3. Though notices were sent to the assessee from time to time, none appeared on behalf of the assessee. We therefore proceed to dispose of the appeal exparte, qua assessee. The facts of the case revolve in a narrow compass. Assessee is engaged in retail trade and for the year under consideration he declared business income of `55,341/- and income from other sources at `20,433/-. Though the return was processed under section 143(1) of the Act, it was later on taken up for scrutiny by issuing notice under section 143(2) of the I.T. Act, 1961. It may be noticed that, as per AIR data available with the AO, assessee's saving bank account No. 16865 contained a deposit of `20,84,621/- in Saraswat Co-op. Bank Ltd. (earlier known as Mandvi Co-op. Bank Ltd.). Therefore, the case was selected for scrutiny under 2 ITA No. 1655/Mum/2011 Shri Kirti Prataprai Desai

CASS and the assessee was called upon to furnish the nature and source of the deposit. Notice was issued on 24.10.2007 calling upon the assessee to appear in person on 14.11.2007 and thereafter five more opportunities were given but none appeared for the assessee. Under these circumstances the AO proceeded to make an exparte assessment on the basis of the material available on record. In this regard he observed that the bank account was not declared either in the return of income or during the course of assessment proceedings and hence he has no choice except to hold that the cash deposit of `20,84,621/- is liable to be added under section 68 of the Act as unexplained cash deposit. Assessment was completed accordingly.

4. Aggrieved, assessee contended before the CIT(A) that the cash deposits in the saving bank account are against the sales made by the assessee and the payments made are for the purchases made for that business only and hence the addition under section 68 of the Act is not maintainable. He further submitted that the income of the assessee was computed by considering all bank accounts operated in his name; photocopy of bank statement/pass books were submitted at the time of assessment proceedings along with various loan confirmations. It was further submitted that section 68 cannot be invoked for the entries in the bank statement. Before the learned CIT(A) it was contended that the bank account was opened only on 4th April, 2006 and hence the question of any cash deposit in the said account during F.Y. 2005-06 does not arise. Copy of the bank account was said to have been submitted before the CIT(A) which reflected the first deposit of `500/- on 4th April, 2006.

5. The learned CIT(A) observed that as per the AIR information, deposit having been made in cash in the SB Account No. 16865 in Saraswat Co-op. Bank Ltd. and assessee having not placed any material to contradict the findings of the AO, the AO was justified in making the addition.

6. Further aggrieved, assessee is in appeal before us. None appeared for the assessee. We have gone through the orders passed by the CIT(A) as well as the AO. The only basis for making the impugned addition is the AIR information whereas the assessee, before the learned CIT(A), submits that 3 ITA No. 1655/Mum/2011 Shri Kirti Prataprai Desai

the said account was opened only on 4th April, 2006. Since the date of opening of the bank account goes to the root of the matter, we called upon the learned D.R. to furnish the details in the possession of the AO. The learned D.R. could not furnish any material. In fact before the learned CIT(A) the assessee categorically submitted that the account was opened only on 4th April, 2006 and without bringing on record any material to contradict the statement of the assessee he merely proceeded to uphold the addition on the ground that the AO has given sufficient opportunity and the assessee having not availed those opportunities, the information in the possession of the AO cannot be said to be wrong or it pertains to some other person.

7. We may state here that the Tribunal is the final fact finding authority and it is for the parties to produce before us the basis upon which an addition is made. The onus is upon the Revenue to prove that the addition is based on cogent material which, in the instant case, is supposed to be the AIR information. Since the said document is not placed before us, it is difficult to come to any conclusion as to whether there is any other bank account in the name of the assessee during the financial year relevant to the assessment year under consideration, having a credit of `20,83,621/-. In the interest of substantial justice we set aside the matter to the file of the AO, who is directed to bring on record the information available with him to conclusively prove that the deposit was made in the previous year relevant to the assessment year under consideration. Therefore the order passed by the learned CIT(A) is set aside and the AO is directed to reconsider the matter after reanalysing the claim of the assessee.

8. In the result, appeal filed by the assessee is allowed for statistical purposes.

Order pronounced in the open court on 23rd June, 2015.

Sd/- Sd/- (D. Manmohan) (Sanjay Arora) Vice President Accountant Member

Mumbai, Dated: 23rd June, 2015 4 ITA No. 1655/Mum/2011 Shri Kirti Prataprai Desai

Copy to:

1. The Appellant 2. The Respondent 3. The CIT(A) - 34, Mumbai 4. The CIT- 24, Mumbai City 5. The DR, "I" Bench, ITAT, Mumbai

By Order

//True Copy// Assistant Registrar ITAT, Mumbai Benches, Mumbai n.p.