Vikas Sharma Vs ITO (ITAT Mumbai)
ITAT held that if the cash deposited in assessee’s bank account has already been taxed in the hands of M/s. Kareem’s Hospitality Pvt. Ltd (employer of assessee) or in the hands of the director of the assessee company Mr. Kareem Dhanani then no addition is warranted in the hands of the assessee who was performing the duty of manager in M/s. Kareem Restaurant.
FULL TEXT OF THE ORDER OF ITAT MUMBAI
This is an appeal preferred by the assessee against the order of the Ld. Commissioner of Income Tax (Appeals) (NFAC), Delhi dated 15.11.2021 for assessment year 2010-11.
ITA. No. 49/Mum/2022 (for AY. 2011-12)
ITA Nos. 47, 48, 49 & 51/Mum/2022 A.Ys. 2010-11 & 2011-12 Vikas Sharma
This is an appeal preferred by the assessee against the order of the Ld. Commissioner of Income Tax (Appeals) (NFAC), Delhi dated 22.11.2021 for assessment year 2011-12.
ITA. Nos. 48/Mum/2022 & 51/Mum/2022 (Penalty)
Both are appeals preferred by the assessee against the action of the Ld. Commissioner of Income Tax (Appeals) (NFAC), Delhi dated 15.11.2021 for assessment year 2010-11 and for AY. 2011-12 wherein the Ld. CIT(A) confirmed the penalty levied by the AO u/s 271(1)(c) of the Income Tax Act, 1961 (hereinafter “the Act”).
2. First of all, we will take up the appeal of the assessee for AY. 2010-11. The main grievance of the assessee is against the action of the Ld. CIT(A)/NFAC dismissing the appeal filed by the assessee citing the reason that the assessee has not filed condonation of delay of Seven Sixty One (761) days without calling from the assessee the reasons for delay. The Ld. CIT(A) also on merits confirmed the addition of Rs.36,69,295/- in respect of cash deposits in the bank account (Rs.18,44,255/- in ICICI Bank, Rs.37,65,900/- in Saraswat Co-op Bank A/c No. 197200100000301 and Rs.10,59,140/- in Saraswat Co-op Bank A/c. No. 197200100000355 without considering the submission of the assessee. Thus, the Ld. CIT(A)’s impugned action amounts to dismissing the appeal of the assessee without giving opportunity to the assessee which is in violation of natural justice.
3. Brief facts as noted by the AO are that the assessee is an individual who has derived income from salary, and income from other sources. The AO notes that the assessee had filed return of income on 25.05.2011 declaring total income of Rs.2,85,630/- and the return was processed u/s 143(1) of the Act. Later, the assessment of the assessee was reopened on the basis of information received from the DDIT(Inv.), Mumbai from which it transpired (the adverse information verbatim has been reproduced for easy reference) “the assessee, was a manager in M/s. Kareem’s Hospitality Pvt. Ltd. and Mr. Kareem Dhanani was the Director of the same. Mr. Kareem Dhanani gave his brand “Kareem” on commission to different franchises and collected commission by way of cash and deposited the same into assessee, i.e. Mr Vikas Sharma’s Bank Account.” Based on the aforesaid information, the AO summoned the assessee (Vikas Sharma) and asked him to explain the source of cash deposits in his bank accounts and the evidence of the same. The AO notes that the assessee had attended the office and his statement was recorded u/s 131 of the Act on 30.03.2015 wherein he has admitted that the money in the three (3) bank accounts which were credited where that of the M/s. Kareem’s Hospitality Pvt. Ltd. The AO took note of the following cash deposits which were found to have been made in the accounts of the assessee are as under: –
