Prakash Shankarappa Pattanashetti, Bagalkot V. ITO, Bagalkot

ITA 1059/BANG/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 8705 (ITAT-BANGALORE)
• Duration Of Justice: 6 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-01-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 23-12-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 10-07-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUNIL KUMAR AGARWALA JT
• Assessee Lawyers: R CHANDRASHEKAR
• Keywords: Reasonable cause; Condonation of delay
• Section: 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC C BENCH : BANGALORE BEFORE SMT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER ITA NO. 1059/BANG/2015 ASSESSMENT YEAR : 2006-07 SHRI PRAKASH SHANKARAPPA PATTANSHETTI, PROP. PATTANSHETTI PETROLEUM, AMINGAD. TQ. HUNGUND. DIST. BAGALKOT. VS. THE INCOME TAX OFFICER, WARD 1, BAGALKOT. APPELLANT RESPONDENT APPELLANT BY : SHRI R. CHANDRASHEKAR, ADVOCATE RESPONDENT BY : SHRI SUNIL KUMAR AGARWALA, JT. CIT(DR) DATE OF HEARING : 23.12.2015 DATE OF PRONOUNCEMENT : 14.01.2016 O R D E R THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST T HE ORDER DATED 13.04.2015 OF THE CIT(APPEALS), BELAGAVI RELATING T O ASSESSMENT YEAR 2006-07. 2. THE ASSESSEE RUNS A PETROL BUNK. HE FILED RETUR N OF INCOME FOR AY 2006-07 ON 1.7.2008 DECLARING AN INCOME OF RS.12,54 1. THE ASSESSEE DID NOT RESPOND TO VARIOUS NOTICES ISSUED BY THE A.O NO R DID HE PRODUCE BOOKS OF ACCOUNTS AND VARIOUS DETAILS REQUIRED BY THE A.O . THEREFORE, THE A.O ITA NO.1059/BANG/2015 PAGE 2 OF 6 COMPLETED THE ASSESSMENT EX PARTE U/S 144 ON A TOTA L INCOME OF RS.9,52,512 MAKING ADDITIONS ON GROUND OF UNEXPLAIN ED CAPITAL INTRODUCED AND GENUINENESS OF UNSECURED LOANS NOT PROVED AS FO LLOWS:- INCOME AS PER RETURN OF INCOME RS. 12, 541 ADD: OPENING CAPITAL RS. 4,12,541 OUT OF OPENING CAPITAL A SUM OF RS. 2,12,541 IS TAKEN AS PROBABLE SAVINGS AND THE REMAINING RS. 2,00,000/- IS ADDED TO THE INCOME AS SOURCES NOT PROVED. RS. 2,00,00 0 LOAN FROM THE FOLLOWING PERSONS FROM WHOM NO CONFIRMATION LETTERS ARE FURNISHED. (1) SRI. SADASHIV CHINIWALAR RS. 1,55,933 (2) SRI. VEERABHADRAPPA KURATTI RS. 50,000 RS. 2,05,933 --------------- TOTAL INCOME RS.9,52,512 --------------- 3. AGGRIEVED, THE ASSESSEE PREFERRED APPEAL BEFORE THE CIT(APPEALS). THE CASE BEFORE THE CIT(APPEALS) WAS POSTED ON AS M ANY AS 11 OCCASIONS BY ISSUE OF NOTICES, BUT NONE APPEARED ON BEHALF OF THE ASSESSEE NOR ANY WRITTEN SUBMISSIONS WERE FILED. THE CIT(A) WAS OF THE VIEW THAT THE ASSESSEE IS NOT SERIOUS IN CONTESTING THE APPEALS. THEREFORE APPLYING THE DECISION OF THE ITAT DELHI BENCH IN CIT V. MULTIPLAN INDIA LTD. (38 ITD 320) AND THE HONBLE MADHYA PRADESH HIGH COURT JUDGMENT IN THE CASE OF ESTATE OF LATE TUKOJIRAO HOLKAR V. CWT (223 ITR 480 ) , THE CIT(A) HELD THAT THE APPEAL WAS LIABLE TO BE DISMISSED IN LIMINE . ITA NO.1059/BANG/2015 PAGE 3 OF 6 4. EVEN ON THE MERITS OF THE CASE, THE CIT(A) OBSER VED THAT THE ADDITIONS MADE BY THE A.O ARE ON STRONG FOOTINGS WI TH REASONING. HE FURTHER OBSERVED THAT THE ASSESSEE HAS NEITHER DURI NG THE ASSESSMENT PROCEEDINGS NOR DURING THE APPELLATE PROCEEDING BEE N ABLE TO MAKE OUT A CASE PROVING THAT THE ADDITIONS MADE BY THE A.O WER E WRONG. SOURCES OF CAPITAL INTRODUCED OR THE GENUINENESS OF LOANS WERE NOT PROVED BY THE ASSESSEE. SO ALSO, THE CIT(A) NOTED THAT THE ASSESS EE HAS FAILED TO PROVE THE IDENTITY OF THE CREDITORS, GENUINENESS OF THE T RANSACTIONS AND THE CREDITWORTHINESS OF THE CREDITORS. THEREFORE, THE C IT(A) CONFIRMED THE ORDER OF THE AO ON MERITS AS WELL. 5. AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE US. 6. THERE HAS BEEN A DELAY OF 4 DAYS IN FILING THE A PPEAL BEFORE THE TRIBUNAL. IN THIS CONNECTION, THE ASSESSEE HAS FIL ED APPLICATION FOR CONDONATION OF DELAY ALONG WITH AN AFFIDAVIT STATIN G THAT THE IMPUGNED ORDER OF CIT(A) WAS SERVED ON THE ASSESSEE ON 7.5.2015 AN D APPEAL OUGHT TO HAVE BEEN FILED BEFORE THE TRIBUNAL ON OR BEFORE 6. 7.2015. THE REASONS FOR THE DELAY HAVE BEEN STATED TO BE THAT ASSESSEE IS A DIABETIC PATIENT AND WAS TREATED BY FAMILY DOCTOR AT BADAMI, WHO ON 26.6 .2015 ADVISED HIM COMPLETE REST UPTO 10.7.2015. A MEDICAL CERTIFICAT E TO THIS EFFECT HAS BEEN FILED BY THE ASSESSEE. IT IS FURTHER STATED THAT T HE APPEAL PAPERS WERE SENT TO HIM FOR SIGNATURE ON 7.7.2015 AND THE APPEAL WAS FILED BEFORE THE ITA NO.1059/BANG/2015 PAGE 4 OF 6 TRIBUNAL ON 10.7.2015 RESULTING IN A DELAY OF 4 DAY S. IT HAS ACCORDINGLY BEEN PRAYED FOR CONDONATION OF DELAY IN FILING THE APPEAL. 7. WE FIND THAT THE THERE IS REASONABLE CAUSE FOR THE DELAY IN FILING THE APPEAL BEFORE THE TRIBUNAL AND CONDONE THE DELAY. 8. BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE STAT ED THAT THE ASSESSEE HAD AGRICULTURAL LANDS AND ENOUGH AGRICULTURAL INCO ME IN ORDER TO RAISE THE CAPITAL FOR OPENING UP A PETROL BUNK. FURTHER, IT WAS ARGUED THAT OUT OF THE OPENING CAPITAL, ONLY A SUM OF RS.2,12,541 WAS TAKE N AS PROBABLE SAVINGS BY THE AO AND THE REMAINING RS.2 LAKHS WAS ADDED AS INCOME FROM OTHER SOURCES (NOT PROVED). IT WAS SUBMITTED THAT THE A SSESSEE COMES FROM AN AGRICULTURAL FAMILY AND HAS ENOUGH AGRICULTURAL INC OME FOR BRINING ANY CAPITAL FOR THE PETROL BUNK. IT WAS ALSO ARGUED TH AT THE ASSESSEE WOULD HAVE PROVED THE HAND LOANS TAKEN FROM KNOWN PERSONS IF AN OPPORTUNITY WAS PROVIDED, WHICH WAS DENIED AS THE ORDER WAS PAS SED U/S. 144 BY THE AO. IT WAS FURTHER SUBMITTED THAT THE LOANS TAKEN FROM SRI SADASHIV CHINIWALAR OF RS.1,55,933 AND SRI VEERABHADRAPPA KU RATTI OF RS.50,000 WERE ADDED BY THE AO SINCE NO CONFIRMATION LETTERS WERE FURNISHED. THE LD. COUNSEL FOR THE ASSESSEE CONTENDED THAT THE CIT(APP EALS) HAS DISMISSED THE APPEAL EX PARTE AND HAS NOT CONSIDERED THE WRITTEN ARGUMENTS WHICH WERE FILED ON 30.6.2014. HE SUBMITTED THAT THE CIT (A) ALSO FAILED TO CONSIDER THE EARLIER APPEARANCES AND REMAND REPORT OF THE RESPONDENT ITA NO.1059/BANG/2015 PAGE 5 OF 6 DATED 1.3.2011. THE CIT(A) CONFIRMED THE ADDITIONS ON ACCOUNT OF LOANS WITHOUT GIVING OPPORTUNITY TO THE ASSESSEE TO ADDUC E EVIDENCE. 9. THE LD. DR, ON THE OTHER HAND, VEHEMENTLY ARGUED THAT THE CIT(A) ORDER DISMISSING THE APPEAL IN LIMINE IS JUSTIFIED AS THE ASSESSEE COMPLETELY IGNORED TO APPEAR BEFORE THE CIT(A) ON MANY OCCASIO NS AND MERELY FILING WRITTEN ARGUMENTS WOULD ONLY INDICATE THAT THE ASSE SSEE WAS NOT SERIOUS IN PURSUING THE APPEAL. HE SUBMITTED THAT THE CIT(A) ALSO RIGHTLY CONFIRMED THE ORDER OF AO ON MERITS IN THE ABSENCE OF ANY MAT ERIAL PRODUCED BY THE ASSESSEE. 10. WE HAVE HEARD BOTH THE PARTIES. THE FACT REMAI NS THAT THE ASSESSEE HAS FAILED TO PROVE THE SOURCE OF CAPITAL INTRODUCE D TO THE SATISFACTION OF THE LOWER AUTHORITIES. THE ASSESSEES CONTENTION THAT HE HAD AGRICULTURAL LAND SHOULD BE SUBSTANTIATED BY PRODUCTION OF LAND HOLDI NGS AND AGRICULTURAL INCOME DERIVED FROM SUCH LAND. THE ASSESSEE HAS AL SO TO ESTABLISH THAT THE HAD ENOUGH AGRICULTURAL INCOME FROM THE PREVIOU S YEAR OR ACCUMULATED AGRICULTURAL INCOME FROM THE PRECEDING YEARS WHICH WAS UTILIZED TOWARDS CAPITAL FOR THE PETROL BUNK. SECONDLY, WITH RESPE CT TO UNSECURED CREDITORS, THE ASSESSEE HAS TO FURNISH THE LIST AND DETAILS OF CREDITORS AND THAT THEY ARE CONNECTED WITH HIM WITH ENOUGH SOURCE TO ADVANC E THE LOANS TO THE ASSESSEE ALONG WITH CONFIRMATION LETTERS. IN SHORT , THE ASSESSEE HAS TO PROVE THE IDENTITY AND CREDITWORTHINESS OF CREDITOR S AND GENUINENESS OF THE TRANSACTIONS AS HELD IN THE CASE OF R.B. MITTAL V. CIT, 246 ITR 283 (AP) . ITA NO.1059/BANG/2015 PAGE 6 OF 6 HOWEVER, WE ARE OF THE VIEW THAT, IN THE INTEREST O F JUSTICE, ONE MORE OPPORTUNITY IS TO BE PROVIDED TO THE ASSESSEE TO SU BSTANTIATE HIS CLAIM. ACCORDINGLY, WE SET ASIDE THE ORDER OF THE CIT(APPE ALS) AND RESTORE THE ISSUES TO THE FILE OF THE ASSESSING OFFICER. THE A SSESSEE IS DIRECTED TO FURNISH EVIDENCE IN RESPECT OF AGRICULTURAL INCOME, UNSECURED LOANS AND LOANS FROM SRI SADASHIV CHINIWALAR AND SRI VEERABHA DRAPPA KURATTI BEFORE THE AO, WHO SHALL AFTER EXAMINING THE SAME, DECIDE THE ISSUES IN ACCORDANCE WITH LAW. 11. IN THE RESULT, THE APPEAL IS ALLOWED FOR STATI STICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON THIS 14 TH DAY OF JANUARY, 2016. SD/- (ASHA VIJAYARAGHAVAN ) JUDICIAL MEMBER BANGALORE, DATED, THE 14 TH JANUARY, 2016. /D S/ COPY TO: 1. APPELLANT 2. RESPONDEN T 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, ITAT, BANGALORE.