Shantilal Kaluram Shah, Surat vs Assessee

Shantilal Kaluram Shah 31, Harinandan Society, Hira Baug, Varachha Road, Surat Appellant

Vs.

The Income Tax Officer Ward-9(4), Surat Respondent

PAN: ALLPS9411R

अपीलाथ क ओर से /By Appellant : Shri M. K. Patel, A.R. ू यथ क ओर से/By Respondent : Shri M. K. Singh, Sr. D.R. सुनवाई क तार!ख/Date of Hearing : 25.02.2015 घोषणा क तार!ख/Date of Pronouncement : 30.03.2015 ITA No. 2815/Ahd/12 A.Y. 09-10 [Shantilal Kaluram Shah vs. ITO] Page 2

ORDER

PER SHAILENDRA KUMAR YADAV, J.M:

This appeal has been filed by the assessee against the order of Commissioner of Income Tax (Appeals)-V, Surat, dated 22.10.2012 for A.Y. 2009-10 on the following ground:

"1) On the facts and in the circumstances of the case as well as law on the subject, the learned commissioner of the Income Tax (Appeals) has erred in confirming the action of the assessing officer in making addition of Rs.10,65,000/- being cash deposit during the year by treating it as "unexplained cash credit" u/s. 68 of the Income Tax Act, 1961."

2. Assessing Officer in its concluding para held as under:

"The assessee is engaged in the business of Diamond Brokerage income. During the year, the assessee has shown total brokerage income of Rs.2,82,448/-, and N.P. shown of Rs.2,39,942/-, as compared to the earlier year the assessee has shown total brokerage income of Rs.2,05,458/- and N.P. shown of Rs.1,68,244/-. The assessee has furnished necessary details and documents, which are have been randomly verified and the same are placed on record.

Unexplained Cash Deposits

The AIR information in this case revealed that the assessee had made cash deposits of Rs. 10,65,000/- in ICICI Bank, Surat. The said cash deposits were not reflected in the return of income. Therefore, the assessee was asked to asked to explain with evidences the source of such investment and transactions. In response the assessee failed to give any explanation or documentary evidence with ITA No. 2815/Ahd/12 A.Y. 09-10 [Shantilal Kaluram Shah vs. ITO] Page 3

respect to source of the said cash deposits. The assessee failed to discharge his onus of proving the cash credits. Therefore, in absence of any details or evidence, the cash deposits of Rs.10,65,000/- are treated as unexplained cash credits u/s 68 of the Act and added to the total income of the assessee."

2.1 Matter was carried before the First Appellate Authority, wherein various contentions were raised on behalf of assessee and having considered the same, CIT(A) confirmed the order of Assessing Officer.

2.2 Same has been opposed on behalf of assessee inter alia submitted that CIT(A) has erred in confirming the action of Assessing Officer in making addition of Rs.10,65,000/- being cash deposit as unexplained cash credit u/s. 68 of Income Tax Act. Accordingly, same be deleted. On other hand, learned Departmental Representative supported the order of CIT(A).

2.3 After going through rival submissions and material on record, we find that issue before us is regarding addition of Rs.10,65,000/- being cash deposit as unexplained cash credit u/s. 68 of the Act. During appellate proceedings, assessee filed additional evidence. Since these documents were not filed before concerned Assessing Officer, Remand Report was called from Assessing Officer under Rule 46A of the Income Tax Rules. Assessing Officer vide this letter dated 28.08.2012 has objected to the filing of additional evidence on the ground that ITA No. 2815/Ahd/12 A.Y. 09-10 [Shantilal Kaluram Shah vs. ITO] Page 4

those several opportunities were given to assessee but he did not file these documents during assessment proceedings. The stand of assessee has been that Assessing Officer had never called for copy of trading accounts, Balance sheet, copy of Techo Share and Stock etc. In view of this, documents submitted by assessee were important for deciding the issue of source of deposits in the Bank Account and assessment order was also not very clear on the issue of calling for evidences, therefore the fresh evidence were admitted. Coming to the merits, assessee claimed that it is having commission income and also income from agriculture land. Copy of agriculture land holding in Rajasthan was also submitted which is jointly in the name of family members. Assessee submitted that this land is HUF property and he is Karta of HUF but he is neither having a PAN of HUF nor filing any tax return separately for HUF. In remand report, Assessing Officer stated that assessee has neither shown any income from share transaction nor shown any income from agriculture income from agriculture activities and also observed that there is no agriculture land holding individually in the name of assessee. In Remand Report, Assessing Officer also mentioned that to set off of loss on share trading business against any addition of cash deposited in bank account, in fact, assessee has not shown any loss from share trading business. In the original return of income filed for A.Y. 2009-10 nor the assessee filed any revised income of return showing loss from share trading. Therefore, ITA No. 2815/Ahd/12 A.Y. 09-10 [Shantilal Kaluram Shah vs. ITO] Page 5

assessee is not entitled to claim any set off loss which is neither shown in the Original return of income or revised return of income. In First Appellate Proceeding, CIT(A) found that this Bank account would not have come to the knowledge of tax department save the use of technology and collection of information by the Income Tax department regarding high value transactions through Banking and Financial institutions. Assessee's submission that the deposits in Bank accounts were made out of sale proceeds of agriculture land and no accounts were maintained and not supported by any proof or documentary evidence. Accordingly primary onus of assessee to prove the source of cash deposits was not established. In this regard, learned Authorized Representative before us submitted that all details of HUF land were submitted before concerned CIT(A) but they have not been duly appreciated. Alternatively learned Authorized Representative submitted that his plea of set off of loss has not been considered. Taking all facts and circumstances into consideration and in the interest of justice, we restore the matter to Assessing Officer with direction to decide the same as per fact and law on both accounts i.e. agricultural income vis-à-vis agricultural holding and issue of set off of impugned income against loss, if any as per law after providing due opportunity of being heard to assessee, which is alternate contention of assessee. Since, we are restoring the issue of Assessing Officer in light of above ITA No. 2815/Ahd/12 A.Y. 09-10 [Shantilal Kaluram Shah vs. ITO] Page 6

discussion, we are refraining to comment on the merit of issue at hand.

3. As a result, appeal filed by the assessee is allowed for statistical purpose.

Pronounced in the open Court on this the 30th day of March, 2015.

Sd/- Sd/- (ANIL CHATURVEDI) (SHAILENDRA KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad: Dated 30/03/2015 True Copy S.K.SINHA

आदे श क ूितिल'प अमे'षत / Copy of Order Forwarded to:-

1. राजःव / Revenue

2. आवेदक / Assessee

3. संबंिधत आयकर आयु0 / Concerned CIT

4. आयकर आयु0- अपील / CIT (A)

5. 'वभागीय ूितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad

6. गाड9 फाइल / Guard file.

By order/आदे श से,

उप/सहायक पंजीकार आयकर अपीलीय अिधकरण, अहमदाबाद ।