2015 (5) TMI 996 - AT - Income Tax

Undisclosed receipts - stay of demand seeked - Held that - We have gone through the affidavit of Shri Manish K. Chatwani dated 28.06.2013. We are not sure about the authenticity of the copy of this affidavit. Hence, this affidavit needs verification. Accordingly, Ld. DR was asked to verify this affidavit or the authenticity of this affidavit. The Ld. Sr. DR is also asked to send this affidavit to ITO, Ward 22(3)2, Mumbai and he can call for Shri Manish K. Chatwani for verification whether he admits this amount belongs to him or not and send the report to the Tribunal within a month s time from the date of receipt of this order. In view of the above uncertainty, whether the amount belongs to assessee or Shri Manish K. Chatwani, we are inclined to grant stay of this demand with the following conditions i) The assessee will pay a sum of ₹ 10 lakh on or before 05.06.2015. The assessee will submit the copy of payment of challan to the AO positively by 10th June, 2015 and accordingly AO will report to the Bench that the payment has been made. ii) The assessee will pay next installment of ₹ 10 lakh on or before the last day of the month i.e. 30.06.2015. The installments will continue on monthly basis till the disposal of the appeal, accordingly and in case revenue seeks adjournment the payment of installment will be stopped for that month only.

Summary

Issues:
Stay application for outstanding demand of Rs. 93,77,530 based on undisclosed receipts and TDS; Authenticity of affidavit by Shri Manish K. Chatwani admitting ownership of the disputed amount.

Analysis:
The appellant, a partnership firm in the business of clearing and forwarding agency, sought a stay on the demand of Rs. 93,77,530. During assessment, the AO observed a significant discrepancy in the firm's gross receipts and TDS details. While the receipts were Rs. 2,31,54,644, with TDS of Rs. 5,82,192, the appellant had only disclosed a fraction of these amounts. The AO made a substantial addition of Rs. 2,30,35,707 as undisclosed receipts. The appellant claimed that Shri Manish K. Chatwani fraudulently deposited the amount in two bank accounts using the firm's PAN card without their knowledge. An affidavit by Shri Manish K. Chatwani admitted ownership of the disputed amount, but its authenticity was questioned, leading to a verification request. The Tribunal decided to grant stay on the demand with conditions pending verification. The appellant was directed to make two installments of Rs. 10 lakh each by specified dates and continue monthly payments until the appeal's disposal, with stay subject to these conditions. The appeal was scheduled for hearing on 02.07.2015, with adjournments granted only in exceptional circumstances.

In conclusion, the Stay Petition was allowed based on the specified conditions. The Tribunal emphasized the need for timely payments and adherence to the installment schedule until the appeal's resolution. The decision highlighted the importance of verifying critical documents like the affidavit in question to ensure the accuracy of the information presented before the Tribunal.