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IN THE INCOME TAX APPELLATE TRIBUNAL
MUMBAI BENCHES "G", MUMBAI
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Before Shri Joginder Singh, Judicial Member, and
Shri N.K. Billaiya, Accountant Member
Assessment Year: 2005-06
Zelig Exports Pvt. Ltd. ITO, Ward-8(3)(4)
1201, Brookhill Tower / Mumbai
Andheri (W), Mumbai 400 053 Vs.
/ Appellant / Respondent
/ Revenue by Shri N.V. Nadkarni
/ Assessee by Shri R.C. Modi
/ Date of Hearing 27/5/2015
/Date of Order: 04 /6/2015
/ O R D E R
Per Joginder Singh (Judicial Member)
This appeal is by the assessee for the assessment year
2005-06, directed against the impugned order dated 28 th May
2 Zelig Exports Pvt. Ltd.
2013, passed by the learned Commissioner of Income Tax
2. The first ground raised by the assessee pertains to
upholding the entire cash deposited in the Banks amounting to
Rs.52,13,000, u/s 68 of the Income Tax Act, 1961 (hereinafter
"the Act"). The crux of the argument advanced by Shri R.C.
Mody, learned Counsel for the assessee is that the assessee
fulfilled the ingredients of section 68, therefore, the addition was
wrongly affirmed by the learned Commissioner of Income Tax
(Appeals). It was pleaded that the assessee having a domestic
sale, which was in cash and if the audited accounts are accepted
by the Department, then how the sale can be discarded. On the
other hand, the learned D.R., Mrs. N.V. Nadkarni, defended the
conclusion drawn in the impugned order by submitting that
there was no evidence of source of cash deposit, thus, onus has
not been discharged by the assessee and even no documentary
evidence was produced by the assessee at any stage, therefore,
the addition was rightly made.
2.1 We have considered the rival submissions and perused the
material available on record. If the observation made in the
assessment order, leading to addition made to the total income,
conclusion drawn in the impugned order, material available on
record, assertions made by the ld. respective counsels, if kept in
juxtaposition and analyzed, we note that the amount of
Rs.52,13,000, was found deposited in cash in two current bank
accounts of the assessee. On asking by the Assessing Officer,
3 Zelig Exports Pvt. Ltd.
the assessee did not furnish any details with respect to source of
such cash deposits in the bank account. Even on questioning by
the Bank with respect to the sales details, the assessee
contended that no such details are available with him. Even the
day-to-day details of cash book were also never produced by the
assessee right from the assessment stage. The learned Counsel
merely contended that estimation of income may be made. We
are not agreeing with this suggestion of the learned Counsel for
the assessee, because the amounts were deposited in cash on
various dates. In Vijaya Bank, the total cash deposited was
Rs.49,45,000, and in the Indian Overseas Bank, the cash
deposited was Rs.2,68,000. The requirement of section 68 of the
Act, is that the assessee has to prove the source of sum found
with the assessee and nature of source has to be satisfactorily to
be explained by the assessee itself. If the explanation of the
assessee is an unsatisfactory, it may be treated as income of the
assessee. The law is well settled that onus of proving the source
is upon the assessee only. Our view find support from the
decisions from Hon'ble Apex Court in Roshan Di Hatti v/s CIT,
107 ITR 938 (SC), Kale Khan Mohammad Hanif v/s CIT, 50 ITR
1 (SC), Sumati Dayal v/s CIT, 214 ITR 801 (SC), Kamal Motors
v/s CIT, 131 Taxman 155 (Raj.), ratio laid down in Nemichand
Kothari v/s CIT, 136 Taxman 212 (Gauwahati), CIT v/s R.S.
Rathore, 212 ITR 390 (Raj.), CIT v/s Korlay Trading Company
Ltd., 232 ITR 820 (Cal.). Since the assessee has not satisfactorily
explained the source of cash, therefore, we find no justification
to interfere with the uncontroverted findings contained in the
4 Zelig Exports Pvt. Ltd.
impugned order, therefore, this ground of the assessee is having
no merit, consequently, dismissed.
3. The next ground pertains to upholding the addition of
Rs.5,95,422, as unexplained investment u/s 69 of the Act.
3.1 The crux of the argument is identical to the ground raised
by submitting that the addition has been made on the basis of
tax audit report which was wrong. On the other hand, the
learned D.R. defended the conclusion arrived at in the impugned
3.2 We have considered the rival submissions and perused the
material available on record. The facts in brief are that on a
perusal of the tax audit report, Column no.23, the Assessing
Officer observed that the ass advanced loan to Shri Faizal A.
Khan, director of the Company, in cash amounting to
Rs.11,98,122. The Assessing Officer found that as per bank
account of the assessee with the Indian Overseas Bank, there
was cash withdrawn of Rs.6,00,000, but there was no cash
withdrawal from Vijaya Bank. However, as per the audit report,
the assessee paid a cash loan to Shri Faizal A. Khan, amounting
to Rs.11,98,122. The assessee did not explain the source of cash
loan, therefore, the amount of Rs.5,95,422 (Rs.11,98,122
Rs.6,02,700) was treated as unexplained investment u/s 68 of
the Act. We note that right from the assessment stage, no
documentary evidence was produced by the assessee and merely
claimed that the relevant bills / vouchers were lost while shifting
5 Zelig Exports Pvt. Ltd.
the office. Even before us, no documentary evidence was
produced. There is uncontroverted finding that as per tax audit
report the assessee gave cash loan of Rs.11,98,122, whereas the
assessee withdrew only Rs.6 lakhs in cash from his bank
account. Thus, the remaining amount of Rs.5,95,422, was
rightly treated as unexplained investment. The learned
Commissioner of Income Tax (Appeals) has already mentioned
the decision in the case of CIT v/s Jayalaxmi Devarajan, 286 ITR
412 and Third member decision of the Chandigarh Tribunal in
the case of Baldev Krishan Kapoor v/s ACIT. Even otherwise, the
ratio laid down in Sanjay v/s CIT, 154 Taxman 101 (M.P) and
Century Foam Pvt. Ltd. v/s CIT, 210 ITR 625 (All.) further
supports the case of the Revenue. This ground of the assessee
is, therefore, also having no merit, consequently, dismissed.
4. The last ground with respect to disallowance of expenses.
This ground was not pressed by the learned Counsel for the
assessee and, therefore, the ground is dismissed.
Finally, the appeal of the assessee is dismissed.
This order was pronounced in the open Court in the
presence of learned Representatives from both the sides at the
conclusion of the hearing on 4th June 2015.
(N.K. Billaiya) (Joginder Singh)
/ ACCOUNTANT MEMBER / JUDICIAL MEMBER
Mumbai; Dated : 04/06/2015
6 Zelig Exports Pvt. Ltd.
. / Pradeep J. Chowdhury
/ Sr. Private Secretary
/Copy of the Order forwarded to :
1. / The Appellant
2. / The Respondent.
3. () / The CIT, Mumbai.
4. / CIT(A)- , Mumbai
5. , , / DR,
6. / Guard file.
/ BY ORDER,
/ (Dy./Asstt. Registrar)
, / ITAT, Mumbai