L.Prakashmal Jain, CHENNAI V. ACIT, CHENNAI

ITA 1119/CHNY/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 5632 (ITAT-CHENNAI)
• Duration Of Justice: 7 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-12-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2009-2010
• Appeal Filed On: 04-05-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: B SAGADEVAN JCIT D R
• Assessee Lawyers: N K MOHNOT ITP
• Section: 68

Judgement Text

, C/ SMC , IN THE INCOME TAX APPELLATE TRIBUNAL C/SMC BENCH, CHENNAI . , BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER I.T.A.NO.1119 /MDS./2017 ( ASSESSMENT YEAR : 2009-10 ) MR.L.PRAKASHMAL JAIN , 62,AUDIAPPA STREET, SOWCARPET, CHENNAI 600 079. VS. THE ACIT, [COMPANY CIRCLE II(2)] PRESENTLY CORPORATE CIRCLE-2(1), CHENNAI-34. PAN AFKPP 7422 A ( / APPELLANT ) ( / RESPONDENT ) / APPELLANT BY : MR.N K MOHNOT , ITP / RESPONDENT BY : MR.B.SAGADEVAN, JCIT, D.R ! ' / DATE OF HEARING : 05.12.2017 #$%& ! ' /DATE OF PRONOUNCEMENT : 21.12.2017 / O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER: THIS APPEAL IS FILED BY THE ASSESSEE, AGGRIEVED BY THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX(A)-9, CHENNA I DATED 30.03.2017 PERTAINING TO ASSESSMENT YEAR 2009-10. ITA NO. 1119/MDS/2017 2 2. THE MAIN GRIEVANCE OF THE ASSESSEE IN HIS APPEA L IS WITH REGARD TO CONFIRMATION OF ADDITION OF ` 16,89,051/- U/S.68 OF THE ACT. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESS EE IS A M.D OF COMPANY CALLED GURUDEV FOUNDATIONS PVT. LTD., AND I S ENGAGED IN THE BUSINESS OF REAL ESTATE. DURING THE FINANCIAL Y EAR 2007-08, THE ASSESSEE ENTERED INTO AN ORAL UNDERSTANDING WITH ON E MR.N K KOTHARI TO SALE THE PLOT BEARING NO.30 & 1 AT NO.153, PERUM BAKKAM VILLAGE, TAMBARAM AND RECEIVED THE PAYMENTS FROM MR.N.K.KOTH ARI DURING FINANCIAL YEAR 2007-08. 3.1 DURING THE COURSE OF ASSESSMENT PROCEEDINGS, T HE AO NOTICED FROM THE BALANCE SHEET AS ON 31.03.2009 THAT ` 18,53,637/- WAS SHOWN AS CASH IN HAND IN CURRENT ASSETS AND THE COR RESPONDING AMOUNT AS ON 31.03.2008 WAS ` 1,63,986/-. THE AO ASKED THE ASSESSEE TO SUBMIT THE DETAILS FOR THE CASH IN HAND . THE AR OF THE ASSESSEE VIDE LETTER DATED 16.12.2011 SUBMITTED THA T THE ASSESSEE RECEIVED A SUM OF ` 16,65,000/- ON VARIOUS DATES FROM SHRI N K KOTHARI, AS ADVANCE TOWARDS THE LAND DURING THE FIN ANCIAL YEAR 2007- 08. THE ASSESSEE DUE TO DISPUTE DID NOT MIX THE AMO UNT WITH OTHER CASH BALANCE ASSUMING THAT HE WAS NOT THE ABSOLUTE OWNER OF THE ITA NO. 1119/MDS/2017 3 SAID SUM AND DID NOT ENTER THE SAME IN THE RETURN O F INCOME FOR THE ASSESSMENT YEAR 2008-09. THE ASSESSEE TOOK THE SAID AMOUNT INTO ACCOUNT ONLY IN THE FINANCIAL YEAR 2008-09 AFTER AR RIVING AT A SETTLEMENT AND INCLUDED THE SAME IN HIS BOOKS OF AC COUNT AND PASSED NECESSARY ENTRIES THE AO DID NOT ACCEPT THE SUBMISS ION OF THE ASSESSEE FOR THE REASONS THAT AS THE AR DID NOT SUB MIT ANY PROOF FOR THE MONEY BEING SECURED BY THE ASSESSEE FROM SHRI, N.K, KOTHARI DURING HEARING AND FILED A REVISED BALANCE SHEET AS ON 31.03.2008 ONLY WHEN THE AO POINTED OUT THAT THE CASH BALANCE WAS ` 1,63,986/- DURING THE RELEVANT ASSESSMENT YEAR. THE AO ALSO OB SERVED THAT THE ASSESSEE HAS NOT FILED ANY WEALTH TAX RETURN OF THE ASSESSMENT YEAR 2008-09 AND IF HE HAD RECEIVED THE MONEY IN THE ASS ESSMENT YEAR 2008-09, THE CASH BALANCE IN HAND WOULD BE ` 18,14,416/- WHICH WAS ABOVE THE NON-TAXABLE WEALTH TAX LIMIT OF ` 15,00,000/-. THE AO ALSO OBSERVED THAT THE ASSESSEE HAS NOT SUBMITTED ANY PR OOF THAT HE ACTED ONLY IN TRUST AND HE WAS NOT THE ABSOLUTE OWN ER OF THE CASH RECEIVED BY WAY OF AGREEMENT BETWEEN SHRI N K KOTHA RI AND THE ASSESSEE. NO DETAILS WERE SUBMITTED REGARDING HOW THE DISPUTE WAS SETTLED. HENCE, THE LD. ASSESSING OFFICER BROUGHT T O TAX ` 16,89,651/- ITA NO. 1119/MDS/2017 4 U/S 68 (BY MISTAKE TAKEN AS ` 16,9,051/- IN THE ASSESSMENT ORDER) BEING THE DIFFERENCE BETWEEN THE AMOUNT CREDITED OF RS 1,53,637/- IN ASSESSMENT YEAR 2009-10 AND RS 1,63,986/- IN ASSESS MENT YEAR 2008-09 AS THE ASSESSEE HAS NOT GIVEN ANY SATISFACT ORY EXPLANATION. AGGRIEVED BY THE ORDER OF LD. ASSESSING OFFICER, TH E ASSESSEE CARRIED THE APPEAL BEFORE THE LD.CIT(A). 3.2 BEFORE THE LD.CIT(A), THE LD.A.R SUBMITTED THA T THE APPELLANT IS THE MANAGING DIRECTOR OF A COMPANY CALLED M/S. GURU DEV FOUNDATIONS PVT. LTD.,. IT IS SUBMITTED, THAT THE A PPELLANT ON BEHALF OF .M/S GURUDEV FOUNDATIONS PVT. LTD., ENTERED INTO AN UNDERSTANDING WITH SHRI. N.K. KOTHARI TO PURCHASE HIS PROPERTY AN D ACCORDINGLY A SUM OF ` 16,65,000/- WAS PAID DURING THE FINANCIAL YEAR 2007 -08. THE APPELLANT SUBMITTED THAT THE SALE DEED WAS REGISTER ED ON 12.01.2009 FOR A TOTAL SUM OF RS.2 1.50 LAKHS, OUT OF WHICH ` 4,35,000/- WAS DIRECTLY PAID BY MR. N K KOTHARI TO M/ S GURUDEV FO UNDATIONS PVT LTD, AND A SUM OF RS 16,65,000/- WAS PAID BY SHRI N K KO THARI THROUGH THE APPELLANT. ACCORDING TO LD.CIT(A), THE SUBMISSI ONS OF THE ASSESSEE WAS THAT THE ASSESSEE MERELY ACTED AS AN AGENT FOR M/S. GURUDEV FOUNDATIONS PVT. LTD., AND THEREFORE ASSESS MENT OF THAT ITA NO. 1119/MDS/2017 5 INCOME WOULD NOT ARISE IN ASSESSEES CASE AND THE S ECOND ARGUMENT OF THE APPELLANT IS THAT TRANSACTION TOOK PLACE IN THE FINANCIAL YEAR 2007-08 RELEVANT TO THE ASSESSMENT YEAR 2008-09 AND THEREFORE THE SUM COULD NOT BE CONSIDERED FOR THE ASSESSMENT YEAR 2009-10. 3.4 ON APPEAL, THE LD.CIT(A) OBSERVED THAT THE SUB MISSION OF THE APPELLANT IS NOT ACCEPTABLE IF THE APPELLANT STOOD AS AN AGENT FOR M/S. GURUDEV FOUNDATIONS PVT. LTD., THERE IS NO NEED FOR REFLECTING THE SUM OF RS. 16,65,000/- AS CASH IN HAND IN THE BOOKS OF THE APPELLANT. THE ENTRY WHICH COMES INTO THE BALANCE SHEET OF THE APPELLANT MUST BELONG TO HIM. IT IS ONLY THEN SUCH ENTRY SHOULD BE MADE IN HIS BOOKS OF ACCOUNT. ACCORDING TO LD.CIT(A), THE APPELLANT H AS NOT SUBMITTED ANY EVIDENCE IN SUPPORT OF HIS CONTENTION THAT HE A CTED AS AN AGENT FOR M/S. GURUDEV FOUNDATIONS PVT. LTD., AND THE MON EY WAS RECEIVED DURING THE FINANCIAL YEAR 2007-08. FILING OF REVISE D BALANCE SHEET FOR THE YEAR ENDING 31.03.2008 AFTER INITIATION OF ENQU IRY BY THE AO CANNOT BE ACCEPTED AS EVIDENCE IN THE ABSENCE OF AN Y OTHER EVIDENCES IN SUPPORT OF THE CLAIM. THE APPELLANT CO ULD NOT EVEN FURNISH CONFIRMATION FROM SHRI. N.K. KOTHARI TO SUB STANTIATE HIS CLAIM. IN THESE CIRCUMSTANCES, LD.CIT(A) CAME TO A CONCLUS ION THAT THE ITA NO. 1119/MDS/2017 6 APPELLANT HAS NOT EXPLAINED THE SOURCES FOR ` 16,65,000/- AND SUCH UNEXPLAINED SUM IS REQUIRED TO BE ASSESSED DURING T HE PREVIOUS YEAR 2008-09 RELEVANT TO THE ASSESSMENT YEAR 2009-10 BEC AUSE IT IS IN THAT YEAR THAT THE SUM WAS INTRODUCED IN THE BOOKS OF ACCOUNT. THEREFORE, THE ADDITION RS. 16,65,000/- IS HEREBY C ONFIRMED BY THE LD.CIT(A). AGAINST THE ORDER OF LD.CIT(A), NOW T HE ASSESSEE IS IN APPEAL BEFORE TRIBUNAL. 4. I HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL ON RECORD. THE CONTENTION OF THE LD.A.R IS THAT THE A SSESSEE IS A MANAGING DIRECTOR OF THE COMPANY, M/S. GURUDEV FOUN DATIONS PVT. LTD., WHICH DEALS IN REAL ESTATE. DURING THE ASSESS MENT YEAR UNDER CONSIDERATION, THE ASSESSEE ON BEHALF OF THE SAID C OMPANY RECEIVED THE SAID SUM FOR THE SALE OF PROPERTY AT PLOT BEAR ING NO.30 & 1 AT NO.153, PERUMBAKKAM VILLAGE, TAMBARAM AND THE AMOUN T HAS BEEN RECEIVED BY THE ASSESSEE ONLY AS THE TRUSTEE AND FI NALLY M/S. GURUDEV FOUNDATIONS PVT. LTD., ENTERED INTO SALE DE ED WITH SHRI. N.K. KOTHARI. IN MY OPINION, THE ASSESSEE HAS MADE MAKE BELIEVE STORY FOR SELF-SERVING PURPOSE, WHICH CANNOT BE GIVEN ANY CREDIT. THE ITA NO. 1119/MDS/2017 7 ASSESSEE HAS NOT PLACED ANY EVIDENCE TO SHOW THAT T HE ASSESSEE HAS RECEIVED MONEY FROM SHRI. N.K. KOTHARI ON BEHAL F OF M/S. GURUDEV FOUNDATIONS PVT. LTD., IN THE ABSENCE OF E VIDENCE BROUGHT ON RECORD, I AM NOT IN A POSITION TO APPRECIATE THE ARGUMENT OF LD.A.R. FURTHER, THE LD.A.R MADE A PLEA THAT THE TRANSACTI ON IS NOT RELATED TO THE ASSESSMENT YEAR UNDER CONSIDERATION I.E. 2009-1 0, INSTEAD IT WAS RELATED TO ASSESSMENT YEAR 2008-09. THIS ARGUMENT A LSO IS NOT SUPPORTED BY ANY RELEVANT EVIDENCES. HENCE, I AM N OT IN A POSITION TO APPRECIATE THE ARGUMENT OF THE LD.A.R. 5. IN THE RESULT, THE APPEAL OF ASSESSEE IS DISMIS SED. ORDER PRONOUNCED ON 21.12.2017. SD/- ( ) ( CHANDRA POOJARI ) /ACCOUNTANT MEMBER CHENNAI, DATED THE 21.12.2017 K S SUNDARAM. ' ( )!*+ ,+%! / COPY TO: 1 . / APPELLANT 3. ' ' -! () / CIT(A) 5. +0 1 )!)23 / DR 2. / RESPONDENT 4. ' ' -! / CIT 6. 1 45 6 / GF