Uraaz Santosh Bahl, Mumbai vs Assessee

आयकर अपीलीय अिधकरण "ऐफ" यायपीठ मुब ं ई म । IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH "F", MUMBAI ी आर. आर. सी. सी. शमा , लेखा सद"य एवं ी िववेक वमा , याियक सद"य के सम& । BEFORE SHRI R.C. SHARMA, ACCOUNTANT MEMBER AND SHRI VIVEK VARMA, JUDICIAL MEMBER ITA No. : 7030/Mum/2011 (Assessment year: 2006-07) Shri Uraaz Santosh Bahl, Vs Income Tax Officer-12(3)(2), 808, Maker Chambers, V, Room No. Aayakar Bhavan, Nariman Point, 1st Floor, M K Road, Mumbai -400 021 Mumbai -400 020 ःथयी लेखा सं.:PAN: ADXPB 6337 R अपीलाथ (Appellant) ू यथ (Respondent) अपीलाथ क औरसे : ी कश जोतवािन Appellant by Shri Prakash Jotwani ू यथ क औरसे : ी सािचदानंद दुबे Respondent by Shri Sachchidanand Dubey

सुनवाई क तार ख /Date of Hearing : 14-01-2015 घोषणा क तार ख /Date of Pronouncement : 25-02-2015

आदेश ORDER ी िववेक वमा , या स: PER VIVEK VARMA, JM:

Instant appeal is filed by the assessee against the order of CIT(A) 23, Mumbai, dated 14.07.2011, wherein the solitary issue pertains to sustaining the addition of Rs. 8,52,000/- u/s 68 of the Income Tax Act, 1961.

2. The facts are that the assessee received AIR information with regard to cash deposits made with HSBC Bank by the assessee. In the course of assessment proceeding the assessee submitted that Rs. 7,30,000/- was the opening balance. The assessee also explained to the AO that certain old items were sold in April and May of 2005 for Rs. 50,500/- and Rs. 40,250/- and certain gifts received from relatives and friends at house 2 Shri Uraaz Santosh Bahl ITA 7030/M/2011

warming function aggregating to Rs. 41,250/-. The assessee also explained that Rs. 2,00,000/- was withdrawal and not deposit. The AO, aggregated the above sums and added the same to the income of the assessee u/s 68, which came to Rs. 10,52,000/-.

3. The assessee approached the CIT(A), before whom the assessee placed certain evidence, which was not submitted before the AO. The CIT(A) sent the evidence to the AO for his objections if any and his comments. The AO, responded vide letter dated 21.02.2011 that the evidence cannot be entertained, as sufficient opportunity was provided to the assessee to lead evidence.

4. The CIT(A), the proceeded on merits and sustained the addition of Rs. 8,52,000/-, but deleted Rs. 2,00,000/-. The CIT(A) basically held that the assessee could not have held cash in hand for a longer time and he therefore, held that Rs. 7,50,000/- was a made up story as opening balance, coming from assessment year 2004-05. He also rejected assessee's explanations with regard to smaller additions of Rs. 40,500/-; Rs. 40,250/-, Rs. 41,250/- and Rs. 2,00,000/-.

5. Against these additions, the assessee is now before the ITAT.

6. Before us, the AR submitted that the CIT(A) did not consider the entire explanation of the assessee and sustained the order of the AO.

7. The AR therefore submitted that in such a case, the order of the CIT(A) should be reversed.

8. The DR on the other hand supported the orders of the revenue authorities and submitted that both the authorities 3 Shri Uraaz Santosh Bahl ITA 7030/M/2011

have given well reasoned orders & there is no infirmity in the orders.

9. We have heard the contentions of both the parties and we do find merit in the submissions made by the assessee with regard to Rs. 7,30,000/- that it was an opening balance. The reason that the assessee cannot hold this much amount in hand for such a long period of time, is, basically a bald observation made by the CIT(A). The CIT(A) has seen from the facts that the amount was actually pertaining to preceding year is not controverted even by the DR. In such a case, we cannot sustain the addition of Rs. 7,30,000/-.

10. Coming to the smaller additions of Rs. 40,500/- and Rs. 40,250/- wherein the assessee sold his old items of furniture. The CIT(A) went through the evidence as filed by the assessee. The fact that the assessee sold certain old furniture items is mentioned in the impugned order. The main reason for rejecting the assessee claim is an apprehension that the furniture items may be capital asset. At the outset, we find this argument of the CIT(A) to be incomprehensible as to how an item of furniture could become capital asset. We, therefore are inclined to accept the argument of the AR and reverse the findings of the CIT(A).

11. Coming to addition of Rs. 41,250/- received gifts at house warming ceremony. The assessee has submitted the card before the CIT(A), who has rejected the explanation and evidence. On going though the order of the CIT(A), we feel that the CIT(A) has held the issue dispassionately, because during ceremonies like this, some kind of gift, which is either in cash or kind is received by the person, who is performing the ceremony. In such a case, we reverse the order of the CIT(A) on this issue.

4 Shri Uraaz Santosh Bahl ITA 7030/M/2011

12. Coming to addition of Rs. 2,00,000/-, which is explained by the assessee/AR that it is actually withdrawal and not deposit. This issue once again has been dealt with by the CIT(A), who has negated the explanation of the assessee, by simply saying that assessee's explanation cannot be accepted.

13. This issue, according to us, needs fresh adjudication at the level of the AO. We, therefore, set aside the issue of addition sustained of Rs. 2,00,000/- by the CIT(A) and restore it to the file of the AO, who shall reexamine this issue (not the issue of Rs. 2,00,000/- on which the CIT(A) has given the relief), needless to mention that the AO shall afford reasonable and adequate opportunity to the assessee to present his case.

14. As a result, the assessee gets relief for Rs. 7,30,000/-, Rs. 40,500/-, Rs. 40,250/- and Rs. 41,250/- & Rs. 2,00,000/- issue is set aside to the file of the AO.

15. The appeal of the assessee is therefore treated as allowed for statistical purposes.

Order pronounced in the open Court on 25/02/2015.

(आर.

आर. सी.

सी. शमा ) (िववेक वमा ) Sd/- Sd/-

लेखा सदःय &याईक सदःय (R C SHARMA) (VIVEK VARMA) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai, Date: 25/02/2015

ूित/Copy to:-

1) अपीलाथ /The Appellant. 2) ू यथ /The Respondent. 3) The CIT(A) -23, Mumbai.

4) The CIT-12, Mumbai/CIT -12, Mumbai.

5 Shri Uraaz Santosh Bahl ITA 7030/M/2011

5) िवभागीय ितिनिध "ऐफ", आयकर अपीलीय अिधकरण, मुंबई/ The D.R. "F" Bench, Mumbai.

6) गाड* फाईल Copy to Guard File.

आदे शानुसार/By Order / / True Copy / /

उप/सहायक पंजीकार आयकर अपीलीय अिधकरण, मुबं ई Dy./Asstt. Registrar I.T.A.T., Mumbai

*च हान व.िन.स *Chavan, Sr.PS