Dangar Vasan Rata, RAJKOT-GUJARAT V. The Income Tax Officer, Ward-1, RAJKOT-GUJARAT

ITA 112/RJT/2012

• Counselvise Citation: 11224914 RSA 2012
• Duration Of Justice: 1 year(s) 3 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-07-2013
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 06-06-2013
• Assessment Year: 2005-2006
• Appeal Filed On: 28-03-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: K C MATHEWS
• Assessee Lawyers: DR ADHIA
• Keywords: Unexplained cash credit; Principle of natural justice; Peak credit
• Section: 142(1); 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBULAL: RAJKOT BENCH: RAJKOT BEFORE SHRI T K SHARMA, JM AND SHRI D K SRIVASTAVA, AM ITA NO. 112 /RJ T/201 2 ASSESSMENT YEAR : 200 5 - 0 6 DANGAR VASAN RATA, PROP. M/S. GEETA STD PCO, MADHAPAR HIGHWAY, MADHAPAR, TAL. BHUJ PAN: AINPD 7586 P V. ITO, WARD - 1, BHUJ DATE OF HEARING : 06 .0 6 .2013 DATE OF PRONOUNCEMENT : 10 .0 7 .2013 ASSESSEE BY : SHRI D R ADHIA, AR REVENUE BY : SHRI K C MATHEWS, DR ORDER D. K. SRIVASTAVA : THE APP EAL FILED BY THE ASSESSEE IS DIRECTED AGAINST T HE ORDER PASSED BY THE CIT(A) - II, RAJKOT ON 30 . 11 .20 11 , ON THE FOLLOWING GROUNDS: - 1.1 THE HEARING FIXED ON 29 - 11 - 2011 WAS ATTENDED BEFORE THE LD. CIT(A), BY THE A.R. OF THE ASSESSEE ALONG WITH OTHER MATTERS HEARD AND ADJOURNMENT PETITION FOR THIS MATTER WAS SUBMITTED WHICH THE LD. CIT(A) REFUSED TO ACCEPT AND ALSO ASKED HIS STAFF NOT TO ACCEPT TO SAME AND THERE AFTER HE MENTIONED AT PARA 2.9 THAT NONE ATTENDED ON 29.11.2011 IS FAR FROM TRUTH AND TOTALLY INJU STICE TO APPELLANT BECAUSE THE C.I.T.(A) WAS AT LIBERTY TO REJECT ADJOURNMENT BUT HE PREFERRED NOT TO ACCEPT APPLICATION AND THEN TO MENTIONED THAT NOBODY ATTENDED. THUS THE GROSS INJUSTICE TO THE APPELLANT NEEDS CORRECTION. 1.2 THE APPELLANT HUMBLY BEGS TO SUBMIT THAT THE APPEAL FEES PAID BY HIM NEEDS TO BE REFUNDED TO HIM THROUGH DEPARTMENT SINCE THE APPELLATE ORDER IS BASED ON UNTRUTH FULLNESS. 1.3 NOT ONLY THIS THE LD. CIT(A) PASSED NO SPEAKING ORDER AND ALTHOUGH PROVIDED UNDER THE ACT AND SIMPLY CONF IRMED THE ORDER PASSED BY THE LD. A.O. WITHOUT SPECKING ORDER. THE SAME NEEDS CORRECTION. 2. THE LD. C.I.T. (A) ERRED IN LAW AND FACTS IN CONFIR MING ADDITION OF RS.10,16,677/ - . THE SAME NEEDS DELETION. 2 112 - RJT - 2012 DANGAR VASAN RATA 3. THE LD. C.I.T.(A) ERRED IN LAW AND FACTS IN CONFI RMING ADDITION OF RS.10,16,677/ - WITHOUT PROPERLY VERIFYING THE FACTS ON THE CASE THAT THE AMOUNT WAS NOT TAXABLE AT ALL IN THE HANDS OF THE APPELLANT. THE ADDITION NEEDS DELETION. 4. THE ASSESSMENT ORDER IS TOTALLY NON - SPEAKING IN RESPECT OF ADDITIONS OF RS.10,16,677/ - AND AS SUCH ILLEGAL NEEDS ANNULMENT. 7 . TAKING INTO CONSIDERATION, THE LEGAL, STATUTORY AS WELL AS FACTUAL POSITION, NO ADDITION OUGHT TO HAVE BEEN MADE. THE ADDITION NEEDS CANCELLATION. 8. WITHOUT PREJUDICES, THE ORDER PASSES WITHOUT PRO VIDING ADEQUATE STATUTORY OPPORTUNITY THE APPELLANT HAS BEEN DEPRIVED OF HIS RIGHTS TO APPROACH U/S 144A. AS SUCH IT IS BAD IN LAW, DESERVES CANCELATION. 9. WITHOUT PREJUDICES, THE ORDER PASSED IS WITHOUT PROVIDING ADEQUATE OPPORTUNITY AND IS AGAINST THE PRINCIPLES OF NATURAL JUSTICE. 10. WITHOUT PREJUDICES, THE LD. C.I.T.(A) FAILED TO CONSIDER THE PROVISIONS OF PEAK WORKING. THE SAME NEEDS CONSIDERATION. 11. THE APPELLANT CRAVES LEAVE TO ADD / ALTER / AMEND AND / OR SUBSTITUTE ANY OR ALL GROUNDS OF APP EAL BEFORE THE ACTUAL HEARING TAKES PLACE. 2. THE ASSESSEE IS AN INDIVIDUAL. HE FILED HIS RETURN OF INCOME ON 08.09.2008 DECLAR ING TOTAL INCOME AT RS.23,800/ - IN RESPONSE TO THE NOTICE ISSUED BY THE ASSESSING OFFICER U/S 147/148 OF THE INCOME - TAX ACT ON 27.06.2008 . STATUTORY NOTICES ISSUED BY THE ASSESSING OFFICER U/S 142(1) AND 143(2) WERE NOT COMPLIED WITH BY THE ASSESSEE. A SHOW - CAUSE NOTICE WAS ALSO ISSUED BY THE ASSESSING OFFICER CALLING UPON THE ASSESSEE TO EXPLAIN THE NATURE AND SOURCE OF RS.10,16, 677/ - FOUND TO HAVE BEEN DEPOSITED IN HIS BANK ACCOUNT WITH BANK OF BARODA. THE AFORESAID SHOW - CAUSE NOTICE WAS ALSO NOT COMPLIED WITH BY THE ASSESSEE. THE ASSESSEE WAS CALLED UPON TO EXPLAIN THE NATURE AND SOURCE OF THE 3 112 - RJT - 2012 DANGAR VASAN RATA AFORE SAID DEPOSIT. BUT T HE ASSESSEE DID NOT OFFER ANY EXPLANATION. IN THIS VIEW OF THE MATTER, THE ASSESSING OFFICER TREATED THE SAID SUM OF RS.10,16,677/ - AS UNEXPLAINED INCOME OF THE ASSESSEE AND SUBSEQUENTLY BROUGHT THE SAME TO THE CHARGE OF INCOME - TAX WITH THE FOLLOWING OBSERVATIONS: - 2.2 THOUGH THE ASSESSEE WAS GRANTED OPPORTUNITY OF ATTENDANCE, HE HAS NEITHER ATTENDED NOR PRODUCED ANY DETAILS. THE AMOUNT OF RS.10,16,677/ - DEPOSITED IN THE ASSESSEES ACCOUNT IS NOT EXPLAINED. 2.3 A FEW DECISIONS IN THIS REGARD ARE MENTIONED AS UNDER WHICH PROVE THAT THE ONUS SHOULD BE DISCHARGED BY THE ASSESSEE. WHEN A CASH CREDIT ENTRY APPEARS IN THE ASSESSEES BOOKS OF ACCOUNT IN AN ACCOUNTING YEAR, THE ASSESSEE HAS A LEGAL OBLIGATION TO EXPLAIN THE NATURE AND SOURCE OF SUCH CREDIT [SREELEKHA BANER JEE V. CIT, (1963) 49 ITR (SC) 112, 117] MERE FURNISHING OF THE PARTICULARS IS NOT ENOUGH. MERE PAYMENT BY ACCOUNT PAYEE CHEQUE IS NOT SACROSANCT NOR CAN IT MAKE A NON - GENUINE TRANSACTION GENUINE [CIT V. PRECISION FINANCE PVT. LTD., (1994) 208 ITR 465, 47 0, 471 (CAL). CF. NIZAM WOOL AGENCY V. CIT, (1992) 193 ITR 318, 320 (AII)]. WHERE THERE IS AN UNEXPLAINED CASH CREDIT, IT IS OPEN TO THE ASSESSING OFFICER TO HOLD THAT IT IS INCOME OF THE ASSESSEE AND NO FURTHER BURDEN LIES ON THE ASSESSING OFFICER TO SHO W THAT INCOME IS FROM ANY PARTICULAR SOURCE. IT IS FOR THE ASSESSEE TO PROVE THAT EVEN IF THE CASH CREDIT REPRESENTS INCOME, IT IS INCOME FROM A SOURCE WHICH HAS ALREADY BEEN TAXED. [CIT V. DEVI PRASAD VISHVANATH PRASAD, (1969) 72 ITR 194 (SC); CIT V. MADH AVNAGAR COTTON MILS LTD., (1976) 104 ITR 493 (BOM); ROSHAN DI HATTI V. CIT., (1977) 107 ITR 938 (SC); CIT V. DALURAM PANNALAL MODI, (1981) 129 ITR 398 (MP)]. 2.3 AS SUCH THE AMOUNT OF RS.10,16,677/ - IS TREATED AS UNDISCLOSED INCOME OF THE ASSESSEE AND IS ADDED TO HIS TOTAL INCOME UNDER THE PROVISION OF SECTION 68 OF THE ACT. SINCE THE ASSESSEE HAS CONCEALED THE PARTICULARS OF INCOME, PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT IS SEPARATELY INITIATED. 4 112 - RJT - 2012 DANGAR VASAN RATA 3. ON APPEAL AGAINST THE EX - PARTE ORDER PASSED BY T HE ASSESSING OFFICER ON 17.12.2008, THE LD CIT(A) GRANTED AS MANY AS TEN OPPORTUNITIES OVER A PERIOD OF ONE AND A HALF YEARS BUT THE ASSESSEE DID NOT ENTER APPEARANCE BEFORE THE LD CIT(A). THE ASSESSEE TOOK NO CARE TO REBUT THE FINDINGS RECORDED IN THE AS SESSMENT ORDER BEFORE THE LD CIT(A). THE LD CIT(A) HAD NO OPTION EXCEPT TO ENDORSE THE ORDER PASSED BY THE ASSESSING OFFICER. 4. AGGRIEVED BY THE ORDER PASSED BY THE LD CIT(A), THE ASSESSEE IS NOW IN APPEAL BEFORE THIS TRIBUNAL. IN SUPPORT OF APPEAL, TH E LD AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE HAS FILED WRITTEN SUBMISSIONS WHICH READ AS UNDER: - 1. THE A.O. MADE ADDITION OF RS.10,16,677/ - MENTIONING THAT THE SAID AMOUNT IS DEPOSITED ON VARIOUS DATES WITH THE SAVING ACCOUNT NO.14036 MAINTAINED WITH BANK OF BARODA, MADHAPAR. FOR THIS THE RELIED ON A COPY OF BANK ACCOUNT OBTAINED FROM BANK FOR THE PERIOD FROM 3.4.2004 TO 2.2.2005 (COPY ENCLOSED). 2. THE LD A.O. DID NOT CONSIDER THAT THE BANK ACCOUNT IS MAINTAINED BY THE ASSESSEE FROM 25.7.2002 AND DU RING THE PERIOD 25.7.2002 TO 3.4.2004 ASSESSEE HAS CARRIED OUT THE FOLLOWING TRANSACTIONS AS SHOWN IN THE BANK ACCOUNT (COPY ENCLOSED). FOR THE PERIOD FROM 25.7.2002 TO 2.4.2004 WITHDRAWAL DEPOSIT BALANCE 10,65,950/ - 12,01,806/ - 1,35,856/ - 3. THUS THE HUGE AMOUNT OF RS.12,01,806/ - DEPOSITED DURING THE PREVIOUS YEAR HAS NOT BEEN CONSIDERED BY THE LD. A.O. AND HUGE WITHDRAWAL OF RS.10,16,677/ - MADE WAS AVAILABLE FOR RE - INVESTMENT IN CURRENT A.Y. HAS NOT BEEN CONSIDERED BY THE LD. A.O. 4. AS MENTIONE D IN THE STATEMENT OF FACTS NO ADEQUATE OPPORTUNITY WAS GIVEN BY THE LD. A.O. AND DURING THE COURSE OF SCRUTINY ASSESSMENT FROM 27.06.2008 TO 17.12.2008 DUE TO SHORT TIME GIVEN AND NON - RECE I PT OF ENTIRE 5 112 - RJT - 2012 DANGAR VASAN RATA BANK STATEMENT FROM 25.7.2002 TO 3.4.2004 THE SAME CO ULD NOT BE FURNISHED AT ASSESSMENT STAGE. HOWEVER WHEN THE LD. A.O. HAS RELIED ONLY ON THE BANK STATEMENT HE OUGHT TO HAVE CALLED FOR PREVIOUS DETAILS ALSO TO MAINTAIN THE EQUALITY OF JUSTICE WHICH HE DID NOT. THIS HAS RESULTED IN UNDUE ADDITION TO THE ASS ESSMENT EVEN WITHOUT CONSIDERING PEAK WORKING WHICH THE LD. A.O. OUGHT TO HAVE DONE SUE MOTO. HOWEVER HE HAS NOT DONE SO. 5. IT IS THEREFORE PRAYED THAT THE ASSESSMENT MAY KINDLY BE SET ASIDE AND RESTORED BACK TO THE A.O. FOR THE FOLLOWING. TO GIVE BENE FIT OF PEAK CREDIT TO THE ASSESSEE AFTER CONSIDERING BANK STATEMENT FOR THE PERIOD FROM 25.7.2002 TO 3.4.2004 AND ALSO FOR THE PERIOD FROM 3.4.2004 TO 2.2.2005 ON WHICH THE LD. A.O. HAS RELIED BUT HAS NOT GRANTED PEAK CREDIT. 5 . IN REPLY, THE LD DEPARTME NTAL REPRESENTATIVE SUPPORTED THE ORDER PASSED BY THE ASSESSING OFFICER AND THE LD CIT(A). HE SUBMITTED THAT THE ASSESSEE PREFERRED TO SEEK ADJOURNMENTS EVEN AFTER GIVING UNDERTAKING TO THE CIT(A) THAT NO FURTHER ADJOURNMENT WOULD BE SOUGHT FOR. 6 . WE HAV E HEARD BOTH THE PARTIES AND CAREFULLY CONSIDERED THEIR SUBMISSIONS. IT IS A CASE OF REPEATED AND PERSISTENT FAILURE ON THE PART OF THE ASSESSEE IN ENTERING APPEARANCE FIRSTLY BEFORE THE ASSESSING OFFICER AND THEREAFTER BEFORE THE LD CIT(A). PERUSAL OF THE ASSESSMENT ORDER SHOWS THAT STATUTORY NOTICES ISSUED BY THE ASSESSING OFFICER U/S 142(1) AND 143(2) WERE NOT COMPLIED WITH BY THE ASSESSEE. EVEN SHOW - CAUSE NOTICE ISSUED BY THE ASSESSING OFFICER CALLING UPON THE ASSESSEE TO EXPLAIN THE NATURE AND SOURCE O F THE IMPUGNED DEPOSITS WAS NOT COMPLIED BY THE ASSESSEE. THE ASSESSING OFFICER HAD NO OPTION EXCEPT TO TREAT THE IMPUGNED DEPOSIT S AS UNEXPLAINED INCOME FOR WANT OF ANY EXPLANATION AS REGARDS THEIR NATURE AND SOURCE AND SUBSEQUENTLY BRING THE SAME TO THE CHARGE OF INCOME - TAX. THOUGH THE ASSESSEE HIMSELF FILED THE APPEAL BEFORE THE LD CIT(A), HE DID NOT ENTER APPEARANCE BEFORE THE LD CIT(A) INSPITE OF SEVERAL OPPORTUNITIES GRANTED BY THE LD CIT(A) OVER A PERIOD OF ONE AND A HALF YEAR. EVEN AFTER GIVING UNDE RTAKING BEFORE 6 112 - RJT - 2012 DANGAR VASAN RATA THE CIT(A) THAT THE ASSESSEE WOULD NOT SEEK ANY ADJOURNMENT BEFORE THE LD . CIT(A), THE ASSESSEE STILL DID NOT TURN UP FOR HEARING. PAST CONDUCT OF THE ASSESSEE BEFORE BOTH THE AO AND CIT(A) SHOWS THAT HE HAS BEEN PERSISTENT IN HIS DEFAULT. SUBMISSION OF THE ASSESSEE THAT THE CIT(A) HAD REFUSED TO ACCEPT APPLICATION FOR ADJOURNMENT ON 29 - 11 - 2011 BEING THE 10 TH OCCASION FOR SEEKING ADJOURNMENT BEFORE THE CIT(A) AND THAT TOO AFTER GIVING UNDERTAKING BEFORE THE CIT(A) THAT NO ADJOURNMENT WOULD B E SOUGHT, IS NOT SUPPORTED BY ANY EVIDENCE INCLUDING THE AFFIDAVIT OF THE CONCERNED PERSON. PERUSAL OF RECORDS SHOWS THAT THE ASSESSEE HAS BEEN SEEKING ADJOURNMENTS AFTER ADJOURNMENTS (TAREEKH PE TAREEKH) EVEN BEFORE THIS TRIBUNAL. THE ASSESSEE SOUGHT ADJO URNMENTS ON 23.07.2012, 18.10.2012, 22.01.2013 AND 05.06.2013. THE APPEAL WAS ULTIMATELY HEARD ON 06.06.2013 AFTER THE BENCH SHOWED ITS RELUCTANCE ON 05.06.2013 IN GIVING FURTHER ADJOURNMENTS. 7 . THE ASSESSEE HAS SOUGHT TO FILE A COPY OF ASSESSEES BANK ACCOUNT WITH BANK OF BARODA FROM 25.07.2002 TO 21.03.2003. THERE IS NOTHING ON RECORD TO SHOW THAT THE AFORESAID EVIDENCE WAS FILED BY THE ASSESSEE EITHER BEFORE THE ASSESSING OFFICER OR BEFORE THE LD CIT(A). THE ASSESSEE HA D MORE THAN SUFFICIENT OPPORTUNI TY TO FILE THE AFORESAID EVIDENCE FIRSTLY BEFORE THE AO AND THEREAFTER BEFORE THE CIT(A) WHO GAVE 10 OPPORTUNITIES TO THE ASSESSEE OVER A PERIOD OF ONE AND A HALF YEAR. BESIDES, T HE PLEA OF THE ASSESSEE THAT HE HAS MADE WITHDRAWALS AMOUNTING TO RS.10,65,95 0/ - FROM 25.07.2002 TO 02.04.2004 AND HENCE THE SAME SHOULD BE CONSIDERED AS THE AMOUNT AVAILABLE FOR MAKING THE IMPUGNED DEPOSITS CANNOT BE ACCEPTED ON THE FACE OF IT UNLESS THE ASSESSEE EXPLAINS THE REASONS FOR WHICH SUCH WITHDRAWALS WERE MADE FROM THE B ANK ACCOUNT AND ALSO ESTABLISHES THAT THE WITHDRAWALS SO MADE WERE RETAINED BY HIM IN CASH FOR SEVERAL MONTHS FOR MAKING THE IMPUGNED DEPOSITS. IT IS AGAINST THE ORDINARY COURSE OF HUMAN CONDUCT THAT A PERSON WOULD MAKE REPEATED WITHDRAWALS FROM HIS BANK A CCOUNT FOR DEPOSITING THE SAME AGAIN AND AGAIN IN THE SAME BANK ACCOUNT . IT IS SEEN THAT A SUM OF RS.45,000/ - , RS.45,000 / - , RS.40,000/ - , RS.40,000/ - AND RS.46,000/ - W AS ALSO DEPOSITED ON 05.04.2003, 07.04.2 003, 08.04.2003, 22.04.2003 AND 01 .05.2003 RESPECT IVELY. WITHDRAWAL AMOUNTING TO RS.1,60,000/ - WAS MADE ON 21.05.2003 . OBVIOUSLY THE SAID WITHDRAWAL WAS NOT AVAILABLE FOR MAKING THE DEPOSITS ON EARLIER 7 112 - RJT - 2012 DANGAR VASAN RATA DATES. BESIDES, T HERE IS NO EXPLANATION WITH REGARD TO THE PURPOSE FOR WHICH THE AFORESAID WITHDRAWAL WA S MADE. THERE IS ALSO NO EVIDENCE TO ESTABLISH THAT THE AFORESAID WITHDRAWAL WAS RETAINED IN CASH FOR MAKING DEPOSITS ON OTHER DATES. SIMILAR IS THE CASE WITH REGARD TO OTHER WITHDRAWALS AND DEPOSITS. THE STORY PUT FORWARD BY THE ASSESSEE REGARDING PEAL CR EDIT AT THIS BELATED STAGE DOES NOT INSPIRE CONFIDENCE. IT IS A SIMPLE CASE WHERE THE REVENUE DETECTED DEPOSITS IN THE BANK ACCOUNT OF THE ASSESSEE AFTER WHICH NOTICE U/S 147/148 WAS ISSUED BY THE AO. IN SPITE OF SEVERAL OPPORTUNITIES GIVEN BY THE AO/CIT(A ), THE ASSESSEE DID NOT OFFER ANY EXPLANATION REGARDING THE NATURE AND SOURCE OF THE IMPUGNED DEPOSITS EITHER BEFORE THE AO OR BEFORE THE CIT(A). IN THIS VIEW OF THE MATTER, THE ORDER PASSED BY THE ASSESSING OFFICER AND THE LD . CIT(A) IS CONFIRMED. THE APP EAL FILED BY THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED ON 10 . 0 7 . 201 3 SD/ - SD/ - (T. K. SHARMA) ( D. K. SRIVASTAVA) JUDICIAL MEMBER ACCOUNTANT MEMBER RAJKOT: 10 .07 .2013 B T COPY OF ORDER FORWARDED TO: - 1. APPELLANT DANGAR VASAN RATA, PROP. M/S. GEETA STD PCO, MADHAPAR HIGHWAY, MADHAPAR, TAL. BHUJ 2 . RESPONDENT - ITO, WARD - 1, BHUJ 3 . CONCERNED CIT - I, RAJKOT 4 . CIT (A) - II , RAJKOT 5 . DR, ITAT, RAJKOT 6 . GUARD FILE. BY ORDER TRUE COPY PRIVATE SECRETARY, ITAT, RAJKOT