Shri Prakash S. Shah, Mumbai V. The Dy. Commr. Income Tax, Cen. Circle-II, RAJKOT-GUJARAT

ITA 117/RJT/2015

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 1619 (ITAT-RAJKOT)
• Duration Of Justice: 3 year(s) 5 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-09-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 06-04-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Unexplained investment; Salary income; Source of fund
• Section: 143(3); 153A; 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH, RAJKOT BEFORE SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER & SHRI MAHAVIR PRASAD, JUDICIAL MEMEBR ./ I.T.A. NO. 117/RJT/2015 ( ASSESSMENT YEAR : 2009-10) PRAKASH SEVANTIBHAI SHAH B-406, KINGSTON HIGH STREETS, NR. D-MART, HIRANANDANI GARDENS, POWAI, MUMBAI - 400076 / VS. THE DY. COMMISSIONER OF INCOME TAX CENTRAL CIRCLE 2, RAJKOT ./ ./ PAN/GIR NO. : AFLPS8954F ( APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : NONE / RESPONDENT BY : SHRI JITENDER KUMAR, CIT. DR DATE OF HEARING 16/07/2018 !'# / DATE OF PRONOUNCEMENT 06/09/2018 / O R D E R PER PRADIP KUMAR KEDIA - AM: THE CAPTIONED APPEAL HAS BEEN FILED AT THE INSTANCE OF THE ASSESSEE AGAINST THE ORDER OF THE CIT(A)-11, AHMEDA BAD (CIT(A) IN SHORT), DATED 19.01.2015 ARISING IN THE ASSESSMENT ORDER DATED 12.03.2013 PASSED BY THE ASSESSING OFFICER (AO) UND ER S. 153A R.W.S. 143(3) OF THE INCOME TAX ACT, 1961 (THE ACT) CONCER NING AY 2009-10. ITA NO. 117/RJT/15 [PRAKASH S. SHAH VS. DCIT] A.Y. 2009-10 - 2 - 2. THE SOLITARY ISSUE RAISED IN THE GROUNDS OF APPE AL IS TOWARDS MAINTAINABILITY OF ADDITION OF RS.66 LAKHS TOWARDS UNEXPLAINED INVESTMENT IN RESIDENTIAL PROPERTY. 3. BRIEFLY STATED, THE ASSESSEE IS STATED TO BE A T ECHNICAL DIRECTOR IN BACKBONE CONSTRUCTION LTD. AND DERIVES INCOME FROM SALARY. A SEARCH ACTION UNDER S.132 OF THE ACT WAS CARRIED OUT AT TH E PREMISES OF THE ASSESSEE ON 24.06.2010. CONSEQUENTLY, PROCEEDINGS U NDER S.153A R.W.S. 143(2) OF THE ACT WERE INITIATED AND THE ASS ESSMENT WAS FRAMED UNDER S.153A R.W.S. 143(3) OF THE ACT. IN THE COUR SE OF THE SEARCH ASSESSMENT, THE AO OBSERVED THAT ON VERIFICATION OF SEARCH FOLDER IN THE CASE OF ASSESSEE, IT WAS NOTICED THAT THE ASSES SEE HAS PURCHASED THE PROPERTY AT B-406, HIRANANDANI TOWERS, MUMBAI FOR R S.66 LAKHS IN JUNE 2008. ON A QUERY IN THIS REGARD, THE ASSESSEE SUBMITTED BEFORE THE AO THAT PAYMENT TOWARDS PURCHASE OF FLAT AT HIR ANANDANI GARDENS IS OUT OF FINANCES PROVIDED BY THE EMPLOYER COMPANY M/S. BACKBONE CONSTRUCTION LTD. THE AO HOWEVER OBSERVED THAT THE ASSESSEE WAS TOTALLY NON-COOPERATIVE IN SUBMISSIONS OF REQUISITE DETAILS AND FAILED TO FURNISH ANY EVIDENCE IN SUPPORT OF THE AVERMENT TOWARDS INVESTMENT IN PROPERTY OUT OF BORROWED FUNDS FROM EMPLOYER COM PANY. THE AO ACCORDINGLY RESORTED TO SECTION 69 OF THE ACT AND H ELD THE INVESTMENT IN PROPERTY OF RS.66 LAKHS TO BE UNEXPLAINED INVEST MENT IN THE ABSENCE OF ANY PROOF REGARDING SOURCE OF FUNDS FOR SUCH INVESTMENTS. 4. AGGRIEVED, THE ASSESSEE PREFERRED APPEAL BEFORE THE CIT(A). 5. BEFORE THE CIT(A) AS WELL, THE ASSESSEE FAILED T O FURNISH ANY EVIDENCE TO SUPPORT HIS EXPLANATION REGARDING SOURC E OF INVESTMENTS. CONSEQUENTLY, THE CIT(A) REFUSED TO INTERFERE WITH THE ORDER OF THE ITA NO. 117/RJT/15 [PRAKASH S. SHAH VS. DCIT] A.Y. 2009-10 - 3 - AO AND CONFIRMED HIS ACTION. THE RELEVANT PARA DEA LING WITH THE ISSUE READS AS UNDER: 6. THE SECOND GROUND OF APPEAL WAS RELATED TO THE ADDITION ON ACCOUNT OF UNEXPLAINED INVESTMENT IN A FLAT IN MUMB AI. THE FACTS, IN BRIEF, ARE THAT THE APPELLANT PURCHASED ONE FLAT IN HIRANANDANI GARDEN IN MUMBAI FOR RS.66,00,000/-. THE A.O., DURING ASSE SSMENT PROCEEDINGS, ASKED THE ASSESSEE TO FURNISH SOURCE O F INVESTMENT IN THE SAID FLAT. THE ASSESSEE, BEFORE THE A.O., SUBMITTED THAT THE FLAT WAS PURCHASED OUT OF LOANS BORROWED FROM HIS EMPLOYER M /S. BACKBONE CONSTRUCTION LTD. WHEREIN HE WAS WORKING AS A TECHN ICAL DIRECTOR. HOWEVER, HE FAILED TO FURNISH ANY EVIDENCE TO SUPPO RT HIS EXPLANATION REGARDING THE SOURCE OF INVESTMENT. THE ASSESSEE EX PLAINED THAT HE WAS NOT IN A CAPACITY TO EXPLAIN THE SOURCE OF INVESTME NT AS HE HAD LEFT JOB AND WAS UNEMPLOYED. 6.1 THE A.O. DID NOT ACCEPT THE EXPLANATION OF THE ASSESSEE ON THE GROUND THAT THE ASSESSEE DID NOT FURNISH ANY PROOF TO ESTABLISH THAT THE INVESTMENT IN THE FLAT WAS MADE OUT OF LOAN FROM M/ S. BACKBONE CONSTRUCTION LTD. AND ONUS WAS UPON THE ASSESSEE TO PROVE SOURCE OF INVESTMENT. ACCORDINGLY, THE A.O. TREATED INVESTMEN T IN FLAT AS UNEXPLAINED INVESTMENT U/S.69 OF THE I.T. ACT. 6.2 DURING APPEAL PROCEEDINGS, HE DID NOT FURNISH A NY EVIDENCE REGARDING SOURCE OF INVESTMENT IN THE SAID PROPERTY . A COPY OF SALE DEED BETWEEN THE APPELLANT AS A BUYER AND SMT. GEET A KASHYAP AS A SELLER IN JULY, 2008 WHEREIN IT WAS MENTIONED THAT THE APPELLANT MADE PAYMENT OF RS.65,00,000/-. THIS COPY OF SALE DEED D ID NOT HAVE ANY VALUE FOR THE PURPOSE OF EXPLANATION REGARDING SOUR CE OF INVESTMENT. HE SUBMITTED THAT THE PAYMENT WAS MADE BY CHEQUE FR OM HDFC BANK, POWAI BRANCH, MUMBAI BUT UNFORTUNATELY HE WAS NOT H AVING ANY PROOF OF THE LOAN TAKEN FOR THE SAID FLAT. HE FURTHER SUB MITTED THAT THE LOAN WAS TAKEN BY M/S. BACKBONE CONSTRUCTION LTD. AND NO T BY THE APPELLANT. THEREFORE, THE LOAN WAS BEING PAID BY THE COMPANY I TSELF, THEREFORE, THE COMPANY WAS BENEFICIARY OF THE INVESTMENT AND NOT T HE APPELLANT. HENCE, THE APPELLANT SHOULD NOT BE SUBJECTED TO INC OME TAX. 6.3 IT WAS EVIDENT FROM THE AGREEMENT FOR SALE THAT THE FLAT WAS PURCHASED BY THE APPELLANT IN HIS OWN NAME. THEREFO RE, HIS EXPLANATION THAT INVESTMENT WAS MADE BY COMPANY I.E. HIS ERSTWH ILE EMPLOYER DID NOT HAVE ANY RELEVANCE TO THE FACTS OF THE CASE. IN VIEW OF THE ABOVE DISCUSSION, THE ACTION OF THE A.O. IS CONFIRMED. 7. THE REMAINING GROUNDS OF APPEAL WERE GENERAL IN NATURE THAT THE A.O. DID NOT PROVIDE EXTRA TIME FOR PRESENTATION OF EVIDENCE WHICH CAUSE HARDSHIP TO THE ASSESSEE. SUCH GROUNDS OF AP PEAL HAVE NO RELEVANCE TO THE ADDITIONS MADE BY THE A.O. IN THE ASSESSMENT ORDER. THEREFORE, THE SAME ARE DISMISSED. ITA NO. 117/RJT/15 [PRAKASH S. SHAH VS. DCIT] A.Y. 2009-10 - 4 - 6. FURTHER AGGRIEVED, THE ASSESSEE PREFERRED APPEAL BEFORE THE TRIBUNAL. 7. WHEN THE MATTER WAS CALLED FOR HEARING, NONE APP EARED FOR THE ASSESSEE DESPITE SERVICE OF NOTICE. IT IS SEEN FRO M THE RECORD THAT THE MATTER WAS FIRST CALLED FOR HEARING ON 22.03.2017 A ND THEREAFTER ON FOUR OCCASIONS. THE ASSESSEE HAS EITHER APPLIED FO R ADJOURNMENT OR REMAINED ABSENT. THEREFORE, IN THE ABSENCE OF ANY SUBSTANTIAL CAUSE OR REASON FOR NON-ATTENDANCE AND FOR SHOWING HAPLESS A TTITUDE, WE ARE CONSTRAINT TO PROCEED EX PARTE FOR ADJUDICATION OF THE APPEAL. 8. THE LEARNED DR FOR THE REVENUE RELIED UPON THE O RDER OF THE CIT(A) AND SUBMITTED THAT THE PRIMARY ONUS IS ALWAY S ON THE ASSESSEE TO EXPLAIN THE SOURCE OF INVESTMENTS. IT WAS SUBMI TTED THAT IT IS VERY STRANGE TO CLAIM THAT ENTIRE INVESTMENTS HAS BEEN M ADE BY THE EMPLOYER COMPANY WITHOUT ANY INVESTMENT BY THE ASSE SSEE. THE ASSESSEE HAS NOT PLACED ANY MATERIAL ON RECORD WHAT SOEVER TO SUPPORT SUCH AUDACIOUS ARGUMENT. IN THE ABSENCE OF ANY BAS IC FACTS, THE REVENUE HAS NO OPTION BUT TO ASSESS THE INVESTMENT TO BE OUT OF UNDISCLOSED SOURCES OF THE ASSESSEE. THE LEARNED D R ACCORDINGLY SUBMITTED THAT NO INTERFERENCE WITH THE ORDER OF TH E CIT(A) IS CALLED FOR. 9. WE HAVE CAREFULLY PERUSED THE ORDER OF THE AO AN D CIT(A) AS WELL AS THE SUBMISSIONS MADE ON BEHALF OF THE REVEN UE. THE AO AND CIT(A) HAS GIVEN A CONCURRENT FINDING THAT THE ASSE SSEE HAS FAILED TO SUPPORT ITS NARRATIVE TOWARDS ENTIRE INVESTMENTS TO BE OUT OF THE FUNDS FROM THE EMPLOYER. IN THE ABSENCE OF ANY CORROBORA TIVE MATERIAL ON RECORD TO ESTABLISH AS TO HOW SUCH INVESTMENT IS NO T IMPRESSED WITH THE CHARACTER OF INCOME, WE DO NOT SEE ANY REASON F OR INTERFERE WITH ITA NO. 117/RJT/15 [PRAKASH S. SHAH VS. DCIT] A.Y. 2009-10 - 5 - THE ORDER OF THE AO AS ENDORSED BY THE CIT(A). THE REASONING GIVEN BY THE CIT(A) AS REPRODUCED IN THE EARLIER PARAGRAP H IS ON A LEGALLY SOUND BASIS AND DOES NOT CALL FOR ANY INTERVENTION. IT MAY ALSO BE PERTINENT TO OBSERVE THAT WHEN SEEN DIFFERENTLY, TH E LOAN FINANCED BY THE EMPLOYER, AS CLAIMED, WOULD BECOME PART OF TAXA BLE SALARY WHEN NOT FOUND RETURNABLE. THUS, THE UNEXPLAINED SOURCE OF INVESTMENT CANNOT ESCAPE TAXATION BY ANY MEANS. THUS, VIEWING FROM ANY PERSPECTIVE, WE DECLINE TO INTERFERE. 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DI SMISSED EX PARTE . SD/- SD/- (MAHAVIR PRASAD) (PRADIP KUMA R KEDIA) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD: DATED 06/09/2018 TRUE COPY S. K. SINHA COPY OF THE ORDER FORWARDED TO:- 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITA T, RAJKOT THIS ORDER PRONOUNCED IN OPEN COURT ON 06/09/2018