Shri Dhaval Ramehschandra Shah, Ahmedabad V. The Income Tax Officer, Ward-5(1)(3), Ahmedabad

ITA 121/AHD/2017

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 2339 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 7 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-09-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2008-2009
• Appeal Filed On: 13-01-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: T SANKAR
• Keywords: Unexplained cash credit; Corroborative evidences
• Section: 142(1); 143(1); 148; 144; 68

Judgement Text

, SMC IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, AHMEDABAD BEFORE SHRI MAHAVIR PRASAD, JUDICIAL MEMBER &SHRI AMARJIT SINGH, ACCOUNTANT MEMBER ./I.T.A. NO. 121/AHD/2017 ( / ASSESSMENT YEAR: 2008-09) DHAVAL RAMESHCHANDRA SHAH 8-A REGENCY PARK, NR. MITHAKHALI GAM, MITHAKHALI, AHMEDABAD- 380006 / VS. ITO WARD-5(1)(3), 6 TH FLOOR, NATURE VIEW BUILDING, NR. HK HOUSE, ASHRAM ROAD, AHMEDABAD- 380009 ./ ./PAN/GIR NO. : ANJ PS4 371 G ( /APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : SHRI PARIN SHAH, AR / RESPONDENT BY: SHRI T. SANKAR, SR. DR ! /DATE OF HEARING 08/07/2019 '# ! / DATE OF PRONOUNCEMENT 04/09/2019 $% /O R D E R PER AMARJIT SINGH - AM: THE APPEAL FILED BY THE ASSESSEE FOR A.Y. 2008-09, ARISE FROM ORDER OF THE CIT(A)-5, AHMEDABAD DATED 17.10.2016, IN PROCEEDINGS UNDER SECTION 144 R.W.S. 147 OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT. 2. THE ASSESSEE HAS MAINLY RAISED TWO GROUNDS OF APP EAL AGAINST THE DECISION OF LD. CIT(A) IN CONFIRMING THE ASSESSMENT PROCEEDIN GS U/S. 144 R.W.S. 147 OF THE ACT AND THE OTHER GROUND IN CONFIRMING THE ADDITION OF RS. 10,84,100/- MADE U/S. 68 OF THE ACT BY THE AO. ITA NO. 121/AHD/2017 A.Y. 2008-09 2 3. THE FACT IN BRIEF IS THAT THE ASSESSEE HAS FILED RETURN OF INCOME ON 19.09.2008 SHOWING TOTAL INCOME OF RS. 3,41,908/-. THE RETURN WAS PROCESSED U/S. 143(1) OF THE ACT. SUBSEQUENTLY, IT WAS NOTICED THA T ASSESSEE HAD DEPOSITED CASH TO THE AMOUNT OF RS. 10,84,100/- DURING THE PERIOD 01. 04.2007 TO 31.03.2008 IN HIS SAVINGS BANK ACCOUNT NO. 1010117950 MAINTAINED WITH KALUPUR COMMERCIAL CO- OPERATIVE BANK ASHRAM ROAD, AHMEDABAD. THE AO HAS A LSO NOTICED THAT THE ASSESSEE HAD NOT SHOWN ANY INFORMATION RELATED TO S UCH TRANSACTION IN HIS RETURN OF INCOME FILED ON 19.09.2008. THE CASE OF THE ASSESSE E WAS REOPENED U/S. 147 OF THE ACT BY ISSUING OF NOTICE U/S. 148 OF THE ACT ON 03. 03.2014. IN RESPONSE TO THE NOTICE U/S. 148 THE ASSESSEE HAS NEITHER FILED ANY RETURN OF INCOME NOR RAISED ANY OBJECTION AGAINST THE REOPENING OF THE ASSESSMENT. THE ASSESSEE HAS ALSO NOT MADE COMPLIANCE TO THE NOTICES ISSUED U/S. 142(1) OF THE ACT BY THE AO TILL 27.01.2014. THE AUTHORISE REPRESENTATIVE OF THE ASSESSEE ATTENDE D ON 10.03.2015 AND 12.03.2015 AND FURNISHED WRITTEN SUBMISSION BEFORE THE AO. THE AO HAS VERIFIED THE SAME AND PLACED ON RECORD. SINCE THE ASSESSEE HAS NOT FILED THE COMPLETE INFORMATION AND RETURN OF INCOME IN RESPONSE TO THE NOTICE ISSUED U/S. 148 OF THE ACT THEREFORE THE AO HAS FINALISED THE ASSESSMENT U /S. 144 OF THE ACT. ON VERIFICATION OF THE INFORMATION FILED BY THE AR OF THE ASSESSEE, THE AO HAS NOTICED THAT ASSESSEE HAS OBTAINED CASH LOAN AGGREGATING TO RS. 11,31,000/- FROM 58 INDIVIDUALS TO THE AMOUNT OF RS. 19,500/- PER INDIV IDUAL ON DIFFERENT DATES. THE ASSESSEE HAS ONLY FILED COMBINED DECLARATION STATIN G THAT 58 PERSONS HAVE ADVANCED RS. 19,500/- EACH TO THE ASSESSEE WITHOUT CHARGING ANY INTEREST AND THE SAME HAS BEEN REPAID ON 24.01.2014. THE ASSESSEE HAS NOT FIL ED ANY SUPPORTING EVIDENCES TO PROVE THE CREDITWORTHINESS AND GENUINENESS OF THE T RANSACTION, EXCEPT THE XEROX COPY OF A COMMON AFFIDAVIT OF 58 PERSONS STATING TH AT EACH PERSON HAS ADVANCED RS. 19,500/- IN CASH TO THE ASSESSEE DURING THE F.Y . 2007-08 AND XEROX COPIES OF AADHAR CARD, ELECTION ID CARD, DRIVING LICENSES OF TH E CASH CREDITORS. THE AO HAS STATED THAT BARRING A COMMON AFFIDAVIT OF 58 PE RSONS FILED AT THE FAG END OF THE TIME BARRING PERIOD THE ASSESSEE HAS NOT FILED ANY EVIDENCE TO PROVE THE CAPACITY AND CREDITWORTHINESS OF THE CREDITORS. THE AO OBSER VED THAT MERE FURNISHING OF A ITA NO. 121/AHD/2017 A.Y. 2008-09 3 XEROX COPY OF COMMON AFFIDAVIT IN RESPECT OF 58 CAS H CREDITORS WOULD NOT BY ITS PROVE THAT THE CASH CREDITS HAVE BEEN ACTUALLY OBTA INED FROM SUCH PERSON AND THEY HAD CREDITWORTHINESS TO LEND THIS AMOUNT. CONSEQUE NTLY, THE AMOUNT OF RS. 10,84,100/- FOUND INTRODUCED/DEPOSITED IN THE BANK ACCOUNT IN CASH WAS ADDED TO THE TOTAL INCOME OF THE ASSESSEE AS UNEXPLAINED DEP OSIT U/S. 68 OF THE ACT. 4. AGGRIEVED ASSESSEE HAS FILED BEFORE THE LD. CIT(A ). THE LD. CIT(A) HAS DISMISSED THE APPEAL OF THE ASSESSEE. 5. WE HEARD THE RIVAL CONTENTION AND PERUSED THE MA TERIAL ON RECORD. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE AO HAS NOT ICED THAT ASSESSEE HAD DEPOSITED CASH AGGREGATING TO RS. 10,84,100/- DURIN G THE FINANCIAL YEAR RELEVANT TO THE ASSESSMENT YEAR UNDER CONSIDERATION. SINCE TH E ASSESSEE HAD NOT SHOWN THE RELEVANT TRANSACTION IN THE RETURN OF INCOME THEREF ORE THE AO HAS INITIATED PROCEEDINGS U/S. 147 OF THE ACT BY ISSUING OF NOTIC E U/S. 148 OF THE ACT. IN SPITE OF GIVING NUMBER OF OPPORTUNITY THE ASSES SEE HAS FAILED TO MAKE FULL COMPLIANCE BEFORE IN THE ASSESSMENT PROCEEDINGS. TH E AR OF THE ASSESSEE HAS SUBMITTED ONLY PARTIAL INFORMATION BEFORE THE AO WH ICH WAS CONSIDERED AND PLACED ON THE RECORD. HOWEVER, ON ACCOUNT OF NOT FURNISHI NG COMPLETE INFORMATION AND NOT MAKING COMPLIANCE TO THE NOTICES ISSUED THE AO HAS COMPLETED ASSESSMENT U/S. 144 R.W.S. 147 OF THE ACT. CONSIDERING THE ABOVE F ACTS AND CIRCUMSTANCES WE DO NOT FIND ANY FORCE IN THE GROUND OF APPEAL OF THE A SSESSEE AGAINST CONFIRMING THE ASSESSMENT PROCEEDING U/S. 144 R.W.S. 147 OF THE AC T BY THE LD. CIT(A) AND THE SAME IS DISMISSED. REGARDING OTHER GROUNDS OF APPEAL 2 TO 3 RELATING TO CONFIRMING THE ADDITION OF RS. 14,84,100/- MADE U/S. 68 OF THE ACT, IT IS N OTICED THAT ASSESSEE HAS NOT PROVED THE CAPACITY AND CREDITWORTHINESS OF THE DEP OSITORS FROM WHOM THE ASSESSEE HAS CLAIMED TO HAVE RECEIVED THE DEPOSIT IN CASH TO THE AMOUNT OF RS. 10,84,100/-. THE ASSESSEE HAS ONLY FURNISHED COPIES OF DECLARATIO N FILED BY THE 58 PERSONS ON ITA NO. 121/AHD/2017 A.Y. 2008-09 4 COMMON AFFIDAVIT STATING THAT EACH PERSON HAS ADVAN CED RS. 19,500/- IN CASH TO THE ASSESSEE. THE ASSESSEE HAS ONLY FILED XEROX COPY OF AADHAR CARD, ELECTION CARD, AND DRIVING LICENSES OF SUCH CASH DEPOSITOR AND FAIL ED TO FURNISH RELEVANT SUPPORTING DOCUMENT TO ESTABLISH THE CREDITWORTHINE SS OF THE CREDITORS AND GENUINENESS OF THE TRANSACTION. LOOKING TO THE FACT S OF THE CASE OF THE ASSESSEE WE CONSIDER THAT MERELY FURNISHING OF A XEROX COPY OF COMMON AFFIDAVIT IN RESPECT OF 58 CASH CREDITORS WOULD NOT BY ITSELF PROVE THAT TH E CASH CREDIT HAVE BEEN ACTUALLY OBTAINED FROM SUCH PERSON AND THEY HAD CREDITWORTHI NESS TO LEND THIS AMOUNT. WE OBSERVE THAT AO HAS RIGHTLY CONSIDERED ON THE FOLLO WING RATIONALE THAT ASSESSEE HAS FAILED TO PROVE THE GENUINENESS OF THE CASH DEPOSIT FOUND IN HIS BANK ACCOUNT:- (I) WHILE PREPARING THE LIST OF SUCH CASH CREDITOR S, THE ASSESSEE HAS TAKEN CARE TO KEEP THE AMOUNTS BELOW RS. 20,000/- SO AS NOT ATTRA CT THE PROVISIONS OF SECTION 269SS/269T. (II) THE ASSESSEE HAS NOT FURNISHED ANY EVIDENCES T O PROVE THAT THE SO CALLED CASH CREDITORS HAD THE CAPACITY TO ADVANCE LOANS OF RS. 19,500/- TO THE ASSESSEE FOR A LONG PERIOD OF 8 YEARS WITHOUT CHARGING ANY INTEREST. T HE ASSESSEE HAS NOT FURNISHED DETAILS OF BANK ACCOUNTS, SOURCE OF INCOME, PAN AND INCOME TAX RETURNS OF THESE PARTIES. (III) THERE IS NO EXPLANATION OR EVIDENCE TO SHOW T HAT THESE PERSONS ARE, IN ANY WAY, RELATED OR CONNECTED WITH THE ASSESSEE. (IV) ALL THE LOANS WERE ALLEGEDLY REPAID AFTER 8 YE ARS ON THE SAME DAY I.E. 24.01.2015 AFTER INITIATION OF PROCEEDINGS U/S. 148 OF THE ACT. THE CLAIM OF REPAYMENT IS ALSO NOT SUPPORTED BY EVIDENCES. THE ASSESSEE H AS FURNISHED A XEROX OF BANK PASSBOOK WHEREIN SOME DEPOSIT/CREDITS AND WITHDRAWA LS ARE REFLECTED. HOWEVER, IT IS NOT EVIDENT FROM COPY OF ONE PAGE OF PASSBOOK WHETH ER THIS ACCOUNT BELONGS TO ASSESSEE AS THERE IS NO MENTION OF NAME OF THE ACCO UNT HOLDER IN THE GIVEN PAGE. IT IS CLEARLY DEMONSTRATED FROM THE FACTS AS CITED ABOVE IN THIS ORDER THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASS ESSEE HAS FURNISHED INCOMPLETE INFORMATION IN RESPECT OF HIS CLAIM OF OBTAINING CA SH LOAN OF RS. 10,84,100/- OBTAINED FROM 58 PERSONS. IN SPITE OF GIVING SUFFI CIENT OPPORTUNITY THE ASSESSEE HAS FAILED TO SATISFY THE CREDITWORTHINESS OF THE CREDI TORS AND GENUINENESS OF THE TRANSACTIONS. WE ALSO CONSIDER THAT THE HONBLE JU RISDICTIONAL HIGH COURT IN THE CASE OF PAVANKUMAR M. SANGHVI VS. ITO VIDE 404 ITR 6 01 (GUJARAT) HAS UPHELD ITA NO. 121/AHD/2017 A.Y. 2008-09 5 THE ORDER OF THE ITAT AHMEDABAD FOR SUSTAINING THE ADDITION U/S 68 ON ACCOUNT OF THE ASSESSEES INABILITY TO PROVE THE GENUINENESS O F THE CREDIT TRANSACTIONS. THE LD. COUNSEL HAS REFERRED THE JUDICIAL PRONOUNCE MENT IN THE CASE OF RAJESH BABUBHAI DAMANIA VS. ITO 169 CTR 346 (GUJARAT ). HOWEVER, IT IS NOTICED THAT FACTS OF THE AFORESAID CASE REFERRED BY THE LD. COUNSEL ARE DISTINGUISHABLE FROM THE CASE OF THE ASSESSEE. IN THE REFERRED CASE THE ASSESSEE HAD REPEATEDLY PRODUCED CREDITORS BEFORE THE AO, FILED CONFIRMATION WITH PR OPER NAME AND ADDRESS OF THE CONCERNED PARTIES AS WELL AS PROVED REPAYMENT BY AC COUNT PAYEE CHEQUES. ON THE SIMILAR BASIS OTHER CASES REFERRED BY THE LD. COUNS EL I.E. 117 TAXMAN 25 (AHD) 80 TAXMANN.COM 272 ARE ALSO DISTINGUISHABLE FROM THE FA CTS OF THE CASE OF THE ASSESSEE. THE LD. COUNSEL HAS ALSO REFERRED ALTERNAT IVE JUDICIAL CASES I.E. 100 TAXMANN.COM 325 THAT ANY SUM FOUND CREDITED IN BANK PASS BOOK STATEMENT CANNOT BE TREATED AS AN UNEXPLAINED CASH CREDIT. THE LD. DR HAS REFERRED THE DECISION OF SPECIAL BEN CH OF DELHI ITAT IN THE CASE OF MANOJ AGARWAL (2008) 113 ITD 377 (DELHI)(SB ) WHEREIN IT IS HELD THAT NON-MAINTENANCE OF BOOKS OF ACCOUNT IS NOT A MATERI AL FACTOR AND WRONG MENTIONING OF SECTION IS NOT FATAL. WE HAVE ALSO C ONSIDERED THE CASE OF ARUNKUMAR J. MACHHALA VS. CIT OF HONBLE BOMBAY HIGH COURT WHE REIN THE ADDITION U/S. 68 WAS SUSTAINED AFTER REJECTING THE CONTENTION OF THE ASSESSEE THAT HE HAD NOT MAINTAINED BOOKS OF ACCOUNT. WE HAVE ALSO CONSIDER ED THE DECISION OF SUDHIR KUMAR (HUF) VS. CIT 224 TAXMAN 178 OF HONBLE PUNJA B AND HARYANA HIGH COURT WHEREIN IT IS HELD THAT WHEN DURING THE ASSESSMENT PROCEEDINGS AO NOTICED THAT ASSESSEE HAD DEPOSITED HUGE AMOUNT OF CASH IN HIS B OOK ACCOUNT, THE ADDITION OF THE SAID AMOUNT IN THE INCOME OF THE ASSESSEE BY IN VOKING THE PROVISION OF SEC. 68 OF THE INCOME TAX ACT IS JUSTIFIED. IN THE LIGHT OF THE ABOVE FACTS AND FINDINGS WE DO NOT FIND ANY SUBSTANCE IN THE PLEA OF THE ASSESSEE AND CONSIDER THAT IT WAS T HE BOUNDEN DUTY OF THE ASSESSEE TO ITA NO. 121/AHD/2017 A.Y. 2008-09 6 EXPLAIN THE NATURE AND SOURCE OF CASH DEPOSITS FOUN D IN HIS BANK ACCOUNT AS ELABORATED ABOVE. IN THE LIGHT OF THE ABOVE FACTS AND FINDINGS WE CO NSIDER THAT ASSESSEE HAS FAILED TO EXPLAIN THE CASH DEPOSIT MADE IN HIS BANK ACCOUNT WITH RELEVANT SUPPORTING EVIDENCES TO PROOF THE GENUINENESS AND C REDITWORTHINESS OF HIS CLAIM THAT IMPUGNED CASH LOAN WAS RECEIVED FROM 58 DIFFER ENT PERSONS. CONSIDERING ABOVE WE DO NOT FIND ANY INFIRMITY IN THE DECISION OF LD. CIT(A) IN SUSTAINING THE ADDITION MADE BY THE AO BY TREATING THE AFORESAID C ASH DEPOSIT AS UNEXPLAINED 68 OF THE ACT. THEREFORE, APPEAL OF THE ASSESSEE IS D ISMISSED. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DIS MISSED. SD/- SD/- (MAHAVIR PRASAD) (AMARJIT SINGH) JUDICIAL MEMBER ACCOUNT ANT MEMBER AHMEDABAD: DATED 04/09/2019 TANMAY TRUE COPY / COPY OF ORDER FORWARDED TO:- 1. / REVENUE 2. $ / ASSESSEE 3. &' ( / CONCERNED CIT 4. ( - / CIT (A) 5. )*+ ' , ! ' , ,-$&$ / DR, ITAT, AHMEDABAD 6. +. / / GUARD FILE. BY ORDER / $% , 0 / , ! ' , ,-$&$ 1 1.DATE OF DICTATION ON 06.08.2019 2.DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE TH E DICTATING MEMBER 07.08.2019 3.DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P.S./P.S. 03.09.2019 4.DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT 04.09.2019 5.DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR . P.S./P.S 04.09.2019 6.DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 05.09.2019 7.DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 8.THE DATE ON WHICH THE FILE GOES TO THE ASSTT. REG ISTRAR FOR SIGNATURE ON THE ORDER 9.DATE OF DESPATCH OF THE ORDER THIS ORDER PRONOUNCED IN OPEN COURT ON 0 4/09/2019