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IN THE INCOME TAX APPELLATE TRIBUNAL "SMC" BENCH, MUMBAI
BEFORE S/SHRI B.R.BASKARAN (Accountant Member
.. ,
./I.T.A. No.1567/Mum/2015
( / Assessment Year :2005-06)
M/s Shama Akil Sarang / Income Tax Officer, 13(3)(4),
34 Abu Bakar Manzil, Now 17(3)(3),
Vs.
Nishan Pada Road, Dongri, Mumbai.
Mumbai-400003
( /Appellant) .. ( / Respondent)
. / . /PAN/GIR No. :AOGPS8450J
/ Appellant by None
/Rspondent by Shri K P R R Murty
/ Date of Hearing : 4.8.2015
/Date of Pronouncement : 4.8.2015
/ O R D E R
PER BENCH:
The assessee has filed this appeal challenging the order dated
1.10.2013 passed by the ld. CIT(A)-24, Mumbai and it relates to the
assessment year 2005-06.
2. None appeared on behalf of the assessee even though the notice of
hearing was sent to the assessee by Registered Post Acknowledgment on
two occasions. Hence, I proceed to dispose of the appeal ex-parte, without
the presence of assessee.
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3. Appeal is barred by limitation by 378 days. The assessee has filed
an affidavit requesting the Bench to condone the delay. The affidavit
reads as under:
"I Shama Akil Sarang would like to state that I am having serious
health problems (including frequent hospitalizations) and under the
influence of heavy medications, majority of the times I am on bed
rest since August 2013. I received order of CIT(A)-24, Mumbai some
where around 15th January 2014 But I just received the envelope
containing the order but was not in a position to open and read the
same due to above reason. Even till date I am in the same situation
and just last week only opened the envelope and forwarded the
same to my AR Advocate Sanjaykumar A Thakkar. Further on 24th
August, 2014 my husband passed away due to which I was not in a
good state of mind. Due to above reasons I was not in a condition
to file the appeal within prescribed time. So I hereby apply for
condonation of delay in filing the appeal."
4. I heard the ld. DR on this preliminary issue of delay. Having regard
to the submissions made in the affidavit, I am of the view that there is
sufficient cause in filing the appeal belatedly. Accordingly, I condone the
delay and admit the appeal for hearing.
5. The only issue contested in this appeal is with regard to addition of
Rs.2,03,269/- confirmed by the ld. CIT(A).
6. I heard the ld. DR and perused the record. I notice that the
Tribunal, on an earlier occasion, has considered the appeal of the assessee
for the very same assessment year with regard to the addition of
Rs.5,06,621/- confirmed by the ld. CIT(A). After hearing the parties the
Tribunal, vide order dated 20.8.2010 passed in ITA No.2443/M/2009, has
restored the matter to the file of the AO for fresh examination of the
same. The addition of Rs.5,06,621/- related to unexplained investment
assessed u/s 69 of the Act. In the set aside proceedings, the AO again
confirmed the addition of Rs.5,06,621/-. The said unexplained investment
3 I T A N o . 1 5 6 7 / Mu m / 2 0 1 5
was related to flat purchased by the assessee along with her daughter
Asma A Sarang and also said expenditure incurred by the assessee.
7. In the appellate proceedings, the ld. CIT(A) examined the books of
account and bank account of the assessee and accordingly came to the
conclusion that the assessee has explained the sources to the extent of
Rs.3,03,352/. After giving credit for the same, the ld.CIT(A) sustained the
addition to the extent of Rs.2,03,269/-. The relevant observations made
by the ld. CIT(A) are extracted below:
"4.1.8 Assessee has claimed that she is running a beauty parlour
business and appears to have maintained accounts on cash system
of accounting and therefore, cash receipts and payments reflected in
the bank account/s and cash receipts and payments not reflected in
the bank account/s will form the basis of the determination of
assessee's correct income. It appears from the analysis of the debits
to the P&L Account, Capital Account and other payments reflected in
the return of income and accretion to assets account that assessee
had incurred expenditure of Rs. 94,152/- on buying materials,
and other items, made payment of Rs. 32,372/- to LIC and had
withdrawn, Rs. 24,000/-and had invested Rs.10,000/- (u/s.80CCCO
and Rs. 5,000/- (88C) during the year whereas total withdrawals
from the bank account after excluding Rs. 2,35,000/-(2,00,000/-
towards payment to Anik and Rs. 35,000/- towards payment to Citi
Bank) came to Rs. 73,155/- (3,08,155 - 2,35,000) only, thus leaving a
gap of unexplained expenditure of RS.77,369/- (1,50,524 - 73,155)
in cash and Rs. 15,000/-(10,000+5,000) in investments by the
assessee. Similarly, total deposits during entire financial year in bank
account were Rs.3,35,000/- whereas total receipts from the business
of running a beauty parlour were Rs. 2,24,100/- only thus leaving a
gap unexplained deposits of Rs. 1,10,900/- (3,35,000 - 2,24,100) in
respect of the source funds. It may be noted here that the
unexplained expenditure of Rs.77,369/- and unexplained
investments/expenditure of Rs. 15,000/- were made from funds
outside the banking system whereas the unexplained deposits were
made In the bank accounts and therefore, the unexplained
expenditure/investments totalling Rs. 92,3,69/-(77,369+15000) have
no correlation and have to be considered independently of each
other.
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4.1.9 All these issues, except the set aside issue of verification of
source of funds of Rs. 5,06,621/-, stand conclusively adjudicated by
!TAT, Mumbai in its order dated 20/10/2010 and therefore, these
issues stand settled and cannot be adjudicated in this appeal.
Assessee has also raised issues at item numbers (a) to (n) of
paragraph marked "Contention of the assessee" and the main
substantive issues are discussed in the following paragraphs:
4.1.10 Issues regarding CIT(A) invoking section 69 instead of
section 68 and issue of notice on 11/09/2007 by the Assessing
Officer for the original assessment made vide order dated
14/11/2007 stand settled by the order of the ITAT, Mumbai dated
20/10/2010 and even otherwise these issues do not arise from the
assessment order dated 14/11/2011 and therefore, these
submissions are not relevant and dismissed. Assessee's contention
that assessee and her daughter are two joint owners of the
property and are separately assessed to tax and therefore, the
source of entire funds of Rs. 5,06,621/- should not be considered in
assessee's case only but separately, is accepted and this order has
covered only the cash credits, unexplained investments and
unexplained expenditure with reference to the P&L Account, Capital
Account and Balance Sheet as well as entries in the passbook of the
assessee only and arrived at the conclusions and therefore,
assessee's grievance strands redressed on this issue. It has
also been contended that assessee belongs to muslim community
and according to shariat law applicable to her, she is not supposed
to earn interest from any person including bank and she had kept
her earnings in the form of cash which was duly
deposited at the time of purchase of property. Be that as it may,
assessee was not prevented from opening a current account with a
bank on which assessee would not have earned any interest, but
that was not done. Moreover, sudden deposits of Rs. 2,20,000/- by
assessee within a period of 11 days starting from 14/09/2004 and
ending with 24/09/2004 definitely proves the unexplained nature of
cash deposits which was not related to any business but from some
unexplained source. Moreover, these deposits were made
immediately before the issue of cheques for either payment to
builder or for meeting expenses/payment towards electricity,
telephone, insurance payments, etc. and clearly shows that as and
when assessee needed to make payments towards the cost of flat
and/or towards other expenses, she decided to deposit cash in her
accounts. Thus, all these submissions made by the assessee's CA
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are irrelevant and dismissed.
4.1.11 In this regard, deposits made in bank account of the
assessee's daughter Asma A. Sarang and entries in P&L Account,
Capital Account and Balance Sheet for financial year were also
examined critically and it appears that assessee's daughter Asma A.
Sarang has also made deposits in cash in similar fashion
immediately before payments/debits in her bank account through
out the year and also claimed to have carried on similar business of
running a beauty parlour and also filed her return of income on the
same date. Prima facie, it appears that the cash deposits made in
the bank account of assessee's daughter Asma A. Sarang and
entries in P&L Account, Capital Account and Balance Sheet for
financial year relevant to A.Y. 2005-06 are held to be the property of
assessee's daughter and therefore, these have been excluded while
deciding assessee's appeal. It is a separate case by itself and these
cash deposits require to be examined afresh by the Assessing
Officer in assessee's daughter's case.
4.1.12 Therefore, assessee has failed to provide explanation for the
sources of unexplained expenditure/investments/deposits in bank
account totalling Rs. 2,03,269/-(92,369+1,10,900) u/s 69, 69B and
69C of IT Act, 1961 of IT. Act, 1961 and therefore, the additions of
Rs. 2,03,269/- are fully justified in assessee's case and the balance
additions of Rs.3,03,352/- (5,06,621 - 2,03,269) are herby deleted.
In nutshell, assessee's appeal is partly allowed.
8. On careful perusal of the order of ld. CIT(A) I find that the First
Appellate Authority has examined the issue in a proper perspective by duly
considering the bank statement and books of account and hence, I find no
infirmity in the order of ld. CIT(A). Accordingly, I dismiss the appeal filed
by the assessee.
Pronounced accordingly on 4th August 2015.
4th August, 2015
sd
(.. / B.R. BASKARAN)
/ ACCOUNTANT MEMBER
Mumbai: 4th Aug, 2015.
6 I T A N o . 1 5 6 7 / Mu m / 2 0 1 5
. ../ SRL , Sr. PS
/Copy of the Order forwarded to :
1. / The Appellant
2. / The Respondent.
3. () / The CIT(A)- concerned
4. / CIT concerned
5. , , /
DR, ITAT, Mumbai concerned
6. / Guard file.
/ BY ORDER,
True copy
(Asstt. Registrar)
, /ITAT, Mumbai
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