Income Tax Appellate Tribunal - Mumbai
Mahendra S. Goyal, Thane vs Assessee
IN THE INCOME TAX APPELLATE TRIBUNAL "SMC" Bench, Mumbai Before Shri Rajendra Singh(AM) ITA No.3364/M/2010 Assessment Year 2005-06 Shri Mahendra S.Goyal The Income Tax Officer House No.1601, Kankiya Spaces Ward 13(3)(4), Mumbai 16th Floor, Teen Hath Naka, Thane (West), 400 604. PAN : AEFPG 8445 L Appellant Respondent Assessee by : None Revenue by : Shri Surendra Kumar O R D E R
PER RAJENDRA SINGH (AM) This appeal by the assessee is directed against order dated 9.6.2009 of CIT(A) for the assessment year 2005-06. The dispute raised by the assessee in this appeal is regarding addition under section 69 on account of unexplained expenditure.
2. Briefly stated the facts of the case are that the AO had received intimation through CIT(CIB) regarding transaction of Rs.4,99,366/- through credit cards. The AO on receipt of information issued notice under section 142(1) calling for return for assessment year 2005-06. The assessee did not file the return nor gave any information regarding return if any already filed. AO therefore issued a final show cause notice that in case the assessee did not comply with the notice under section 142(1) the assessment will be made under section 144 of the I.T.Act. In response to the said show cause notice the authorized representative of the assessee had appeared and submitted that the assessee was earlier at Kolkata and subsequently hand changed address to Mumbai where he was having business. It was explained that due to fire at the premises of the assessee in the year 2003, all the documents were lost. There was also family disruption and the assessee could not take care of the business which resulted into huge loss. The assessee therefore had no income for assessment year 2004-05 to 2007-08. As regards the utilization of credit card, the assessee explained that he had used the credit card to over come the financial problem. The source of payment against liability incurred for credit card was given as under:
Date Bank A/c. Amount 17/10/2004 ICICI Bank 11,600 27/10/2004 ICICI Bank 2,356 22/11/2004 ICICI Bank 12,000 08/12/2004 SBI Credit Card 9,075 29/12/2004 ICICI Bank 13,462 20/10/2005 ICICI Bank 10,000 22/11/2005 Out of cash withdrawn from the bank 4,40,875 Total 4,99,368
3. The AO however observed that the assessee failed to explain the source of Rs.4,99,368/- deposited in the bank accounts. AO also observed that the assessee had stated that he had no income liable to tax for assessment year 2005-06 to 2007-08 but he had withdrawn sum of Rs.4,99,368/- from bank source of which was not explained. The AO therefore added the sum of Rs.4,99,368/- under section 69C of the I.T.Act. In appeal CIT(A) observed that the assessee had failed to explain the source of deposits of Rs.4,99,368/- in the bank accounts which were ultimately used for making the expenses through credit cards. He therefore upheld the addition made by the AO under section 69C aggrieved by which the assessee is in appeal before the tribunal.
4. Before me no one appeared to represent the case on behalf of the assessee though the notice of hearing had been given well in advance nor any adjournment application has been received. I therefore proceed to decide the appeal on the basis of material available on record and after hearing the Learned DR who placed reliance on the orders of authorities below.
5. I have perused the records and considered the matter carefully. The dispute is regarding addition of Rs.4,99,368/- under section 69C of the I.T.Act. The assessee had incurred certain expenditure through credit card against which payment had been made out of withdrawals from bank totaling Rs.4,99,368/-. The details of these payments were given by the assessee before the AO which have been reproduced in para 1 of this order. A perusal of these details shows that out of Rs.4,99,368/- a sum of Rs.10,000/- was paid on 20.10.2005 and Rs.4,40,875/- was paid on 22.11.2005 totalling Rs.4,50,875/-. These amounts do not relate to assessment year 2005-06 in which the additions have been made nor any material has been placed on record by the authorities below to show that these payments were made out of deposits made in assessment year 2005-06. Therefore the sum of Rs.4,50,856/- could not be added in assessment year 2005-06. The authorities below have made the addition without carefully examining the details of payment. I agree with the point made by the assessee in the ground of appeal that AO had passed the order without giving due consideration to the submission made by the assessee. CIT(A) has confirmed the order of AO without any examination. On the basis of material available on record only addition of Rs.48,493/- can be sustained as the balance amount of Rs.4,50,875/- relates to assessment year 2006-07 and can be considered only in that year. I therefore confirm the addition to the tune of Rs.45,493/- and the balance amount is deleted.
6. In the result the appeal of the assessee partly allowed.
The decision was pronounced in the open court today (7.10.2010).
Sd/-
(RAJENDRA SINGH)
ACCOUNTANT MEMBER
Date : 07.10.2010
At :Mumbai
Copy to :
The Appellant
The Respondent
The CIT(A), Mumbai concerned
The CIT, Mumbai City concerned
The DR "SMC" Bench, ITAT, Mumbai
// True Copy//
By Order
Assistant Registrar
ITAT, Mumbai Benches, Mumbai
Alk
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