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Income Tax Officer-20(3)(4), 5 th floor, Piramal Chambers, Lalbaug, Mumbai-400012 Vs. Vivek V Sharma, C-18, Uttarayan CHS, Mahakali Caves Road, Andheri(E), Mumbai.
September, 03rd 2014
                     ,                                  ""  

                    AND B.R.BASKARAN (AM)
        , .  ,                            .. ,   

                    ./I.T.A. No.3674/Mum/2013
                  (   / Assessment Year : 2009-10)

 Income Tax Officer-20(3)(4),      /         Vivek V Sharma,
 5th floor, Piramal Chambers,      Vs.       C-18, Uttarayan CHS,
 Lalbaug,                                     Mahakali Caves Road,
 Mumbai-400012                               Andheri(E),
        ( /Appellant)               ..       (    / Respondent)

          . /   . /PAN/GIR No. : BEUPS9312C

            / Appellant by               :   Shri Sunil Kumar Singh
              /Respondent by :               None

             / Date of Hearing
                                                 : 18.8.2014
            /Date of Pronouncement : 28.8.2014

                                  / O R D E R

Per B.R.BASKARAN, Accountant Member:

      The appeal filed by the revenue is directed against the order dated 05-02-

2013 passed by Ld CIT(A)-13, Mumbai and it relates to the assessment year

2009-10. The revenue is aggrieved by the decision of Ld CIT(A) in deleting the

addition of Rs.27,68,900/- made by the AO u/s 68 of the Act. None appeared on

behalf of the assessee and hence we proceed to dispose of this appeal ex-parte,

without the presence of the assessee.

2.    The facts relating thereto are state in brief.           During the course of

assessment proceeding, the AO noticed that the assessee has deposited cash

aggregating to Rs.29,18,900/- in his bank account maintained with Punjab
                                          2                        ITA 3674/Mum/2013

Maharashtra Co-op Bank Ltd. Since no explanation was forthcoming from the

assessee, the AO assessed the same as the income of the assessee u/s 68 of the

Act. It is to be mentioned here that the AO has completed the assessment to

the best of his judgment u/s 144 of the Act, since the assessee did not appear

before him at all during the course of assessment proceeding. However, the AO

has wrongly mentioned in the assessment order that the assessment has been

completed u/s 143(3) of the Act.

3.        Before Ld CIT(A), the assessee submitted all the details pertaining to the

bank deposits.      Hence, the Ld CIT(A) called for a remand report from the

assessing officer. In the remand report, the AO reported that the cash deposits

made into the bank account are duly reflected in the cash book / books of

account and are supported by the documentary evidences except for a sum of

Rs.1,50,000/-. For the sake of convenience, we extract below the observations

made in the remand report, which are extracted by Ld CIT(A) in para 5.2 of his


                   "5.2 In response to the same, the Assessing Officer has
      submitted his remand report vide letter dated 18-01-2013 and the
      contents thereof are reproduced below:

                "2. In this case, assessment was completed u/s 144 as no details
                were furnished. In the assessment order, addition was made for
                cash deposits in Punjab Maharashtra Co-op Bank, Andheri(E),
                Mumbai, by the assessee treated as unexplained cash credit u/s 68
                of the Income Tax Act, 1961 of Rs.29,18,900/-. The addition was
                made as the AIR information of cash deposits was not explained. In
                appellate proceedings, the assessee claimed that the cash deposits
                in bank account are explained and submitted that the addition is
                not called for.

                3.    In appellate proceedings, a paper book containing various
                documents in support of the above claimed was filed as additional
                evidences under Rule 46A by the assessee. Copy of the same was
                sent to this office for verification. In order to verify these
                                       3                        ITA 3674/Mum/2013

             documentary evidences filed by the assessee, the books of
             accounts and other supporting documents were called for.

             4.     In response to the above, Shri Ashok Ladha, FCA from M/s
             Laddha & Laddha, Chartered Accountants and representative of the
             assessee company attended and explained the case. It is seen that
             cash deposits in bank account are duly reflected in the cash book /
             books of account and are supported by the documentary evidence
             except Rs.1,50,000/. The assessee has claimed that he deposited
             cash in bank account on 5.6.2008 out of the sum belonging to his
             grand ­father amounting to Rs. 1,50,000/- which was temporarily
             lying with him. On being asked, the assessee furnished the
             confirmatory letter for the same. It is seen that the grandfather of
             the assessee is not assessed to tax and he retired from service long
             back and is a senior citizen aged more than 75 years old. The claim
             of the assessee is not substantiated for Rs.1,50,000/- and therefore
             the addition for this amount needs to be upheld".

The Ld CIT(A) supplied a copy of the remand report to the assessee and sought

for his explanations/ objections. After considering the explanations / objections

of the assessee, the Ld CIT(A) sustained the addition to the extent of

Rs.1,50,000/- and deleted the balance amount of addition. Aggrieved by the

order passed by Ld CIT(A), the revenue has filed this appeal before us.

4.    We have heard Ld D.R and perused the record. We have already noticed

that the Ld CIT(A) has followed the view expressed by the assessing officer in

the remand report given to him and accordingly confirmed the addition to the

extent of Rs.1,50,000/- and deleted the balance amount of addition. The AO has

made the addition of Rs.27,68,900/- only for want of evidences / sources for

making the deposits. In fact, the assessment was completed to the best of

judgement of the assessing officer u/s 144 of the Act. However, in the appellate

proceedings before ld CIT(A), the assessee has explained the sources of the

deposits and the assessing officer has also examined the said explanations and

accordingly gave the remand report by expressly stating that the above said
                                         4                      ITA 3674/Mum/2013

amounts, except for a sum of Rs.1,50,000/-, are duly reflected in the cash book /

books of account. Under these set of facts, we are unable to understand as to

how the revenue is aggrieved by the decision rendered by Ld CIT(A), when he

has simply followed the view expressed by the assessing officer in the remand

report. Hence, we do not find any merit in the grounds urged by the revenue.

5.   We have already noticed that the assessment was completed u/s 144 of the

Act, but it was wrongly mentioned as se. 143(3) in the assessment order. We

notice that the Registry has sent a defect memo to the revenue pointing out this

defect, but till date the revenue has taken no step to rectify the same. Hence,

on this count also, this appeal deserves to be dismissed.

6.   The foregoing discussions would show that the impugned appeal falls in the

category of "frivolous appeal".   We have been reading in the news papers that

the Government of India is discouraging filing of such frivolous appeals, since it

is causing unwarranted harassment to the assessees and also over burdens the

judiciary, which is already hard pressed for time and resources for disposing of

long pending appeals. Before us, the Ld D.R submitted the Government of India

has already formed a committed to identify the ways and means to reduce /

weed out such kind of frivolous appeals and accordingly submitted that such kind

of frivolous appeals shall be avoided in future.

7.      Various benches of this Tribunal is noticing that the revenue has been

filing such kind of frivolous appeals before the Tribunal in a routine manner

without properly appreciating the facts available in each cases. A Co-ordinate

bench of Tribunal consisted of Hon'ble Vice President as one of the parties, has

already expressed its displeasure over the conduct of the revenue by making
                                        5                        ITA 3674/Mum/2013

following observations in its order dated 13.06.2014 passed in the case of ITO

Vs. M/s Growel Energy Co. Ltd in ITA No.338/Mum/2011(AY-2007-08) (para 2

and 28 (pgs.1 and 14 of the order):

      "2. At the outset it may be mentioned that the Income Tax Officer, who is
      the appellant herein, as well as the Commissioner of Income Tax, who has
      authorised the AO to prefer an appeal, did not apply their mind in the
      correct perspective and in a very lacklustre and routine manner filed the
      appeal which, in turn, resulted in wastage of time of the court which would
      be highlighted at appropriate places.

      28.   As we have already mentioned, on account of improper action on
      the part of the Commissioner of Income Tax as well as the AO, the
      assessee had to engage a counsel and incur substantial expenditure to
      defend its case. Therefore we award a token cost of `5,000/- upon the
      Commissioner of Income tax who has given the authorisation and cost of
      Rs.10,000/- upon the AO who has filed this appeal."

8.      It is unfortunate that the assessing officer, after expressing satisfaction

over the explanations / information furnished by the assessee during the remand

proceedings with regard to the sources of the impugned deposits, has chosen to

file the present appeal.   The authorisation given by the Ld Commissioner of

Income tax, a top level officer of the department, only shows that he has not

applied his mind at all in the impugned matter. From the facts prevailing in the

instant case, it can be seen that the issue contested before us does not involve

any substantial question of law, which may some times compel the revenue to

file appeals in order to keep the issue alive. It is high time that the revenue

should take this matter seriously and may consider withdrawing frivolous appeals

filed by them, which will benefit all the concerned. Further it would also save the

time and resources of revenue, which can be utilized in a meaningful and

profitable manner.
                                          6                         ITA 3674/Mum/2013

9.    Hence, it is regrettable that both the officers have lost sight of the fact that

their action would put the assessee in a uncomfortable situation and would also

compel him to spend money and time in defending the appeal. Therefore, in

order to discourage the revenue from filing the frivolous appeals, that too

without proper application of mind, we award a token cost of Rs.1,000/- (One

thousand) upon the revenue.

10.   The said payment should be made to the assessee within one month from

the date of receipt of this order.

11.    Accordingly, the appeal filed by the revenue is dismissed with costs.

       The above order was pronounced in the open court on 28th Aug, 2014.

           28 th                              Aug, 2014    

       Sd                                                    sd

(.  /D. MANMOHAN)                             (..  ,/ B.R. BASKARAN)
            /VICE- PRESIDENT                 /ACCOUNTANT MEMBER

  Mumbai: 28th Aug,2014.

. ../ 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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