Shree Gajanan Construction, Nashik V. Assistant Commissioner of Income-tax,

ITA 122/PUN/2014

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 9288 (ITAT-PUNE)
• Duration Of Justice: 3 year(s) 5 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-06-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 15-03-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 16-01-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: CHAVAN
• Keywords: Unexplained investment; Reasonable cause; Retraction; Condonation of delay
• Section: 142(1); 133A; 144

Judgement Text

] IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE MS. SUSHMA CHOWLA, JM AND SHRI ANIL CHATURVEDI, AM . / ITA NO.122/PUN/2014 / ASSESSMENT YEAR : 2009-10 SHREE GAJANAN CONSTRUCTION, PLOT NOS.101 & 102, GAT NO.198A, SHRAMIK NAGAR, SATPUR, NASHIK. PAN : AATFS6790C. . / APPELLANT V/S ASST. COMMISSIONER OF INCOME TAX, CIRCLE-II, NASHIK. . / RESPONDENT / APPELLANT BY : SHRI PRAMOD SHINGTE / RESPONDENT BY : SHRI B.Y. CHAVAN / ORDER PER ANIL CHATURVEDI, AM : THIS APPEAL FILED BY THE ASSESSEE IS EMANATING OUT OF TH E ORDER OF COMMISSIONER OF INCOME TAX (A) II, NASHIK DT.14.06.2012 FOR THE ASSESSMENT YEAR 2009-10. 2. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERIAL ON R ECORD ARE AS UNDER :- 2.1 ASSESSEE IS A PARTNERSHIP FIRM STATED TO BE ENGAGED IN THE BUSINESS OF CONSTRUCTION. ASSESSEE ELECTRONICALLY FILED ITS R ETURN OF INCOME FOR A.Y. 2009-10 ON 29.09.2009 DECLARING INCOME OF / DATE OF HEARING : 19.06.2017 / DATE OF PRONOUNCEMENT: 23.06.2017 2 RS.6,11,110/-. THE CASE WAS SELECTED FOR SCRUTINY AND THE REAFTER NOTICES U/S 143(2) AND 142(1) OF THE ACT WERE ISSUED AND S ERVED ON THE ASSESSEE. AO NOTED THAT NEITHER THE ASSESSEE NOR ITS REPRESENTATIVE APPEARED IN THE CASE. AO THEREAFTER, AFTE R GIVING SEVERAL OPPORTUNITIES, PROCEEDED TO FRAME THE ORDER U/S 144 OF THE ACT. 3. AO NOTICED THAT A SURVEY ACTION U/S 133A WAS COND UCTED IN CASE OF ASSESSEE ON 12.08.2008 AND DURING THE COURSE OF SURVEY, ASSESSEE CONFIRMED UNDISCLOSED INCOME OF RS.81,06,500/- COMPRISING OF THE FOLLOWING : 1) ON MONEY RECEIVED ON SALE OF PATHARDI PROJECT RS.44,56,500/- 2) ON ACCOUNT OF UNEXPLAINED INVESTMENT IN CONSTRUCTION OF PATHARDI PROJECT RS.5,50,000/- 3) ON ACCOUNT OF PROFIT ON SALE OF PATHARDI PROJECT RS.31,00,000/- TOTAL UNDISCLOSED INCOME RS.81,06,500/- AO ON PERUSING THE PROFIT AND LOSS ACCOUNT AND COMPUTA TION OF INCOME, NOTICED THAT ASSESSEE HAD DISCLOSED INCOME ONLY RS.5,50,000/- AS ADDITIONAL INCOME AS AGAINST THE AMOUNT OF RS.81,06,500/- DISCLOSED AT THE TIME OF SURVEY ACTION. IN T HE ABSENCE OF ANY DETAILS OR JUSTIFICATION, AO CONSIDERED THE B ALANCE UNDISCLOSED INCOME AT RS.75,56,500/- (RS.81,06,500/- - RS.5,50,000/-) AS INCOME OF THE ASSESSEE. AGGRIEVED BY THE ORDER OF AO, ASSESSEE CARRIED THE MATTER BEFORE LD.CIT(A), WHO U PHELD THE ORDER OF AO BY HOLDING AS UNDER : 3 12 . TH E STA T EM E NT S OF VA RIOUS PERSONS AS GIVE N A BO VE E S TA BL IS H B EY OND DOUBT THA T THE APPELL A NT FIRM RECEI VE D RS. 44,5 6 ,500/- IN CASH AS ' ON MONEY ' FROM S A NDIP FOUNDATION FOR S A L E OF ITS PROP E RT Y AT SUR V E Y NO. 2 97, P A THARDI . TH E TOTAL CONSIDERATION OF TH E PROP E RT Y WAS RS. 1,21 , 80,000/ - BUT RS. 77 ,2 3 ,500 /- ONL Y WAS S HOWN IN THE SATHEKHAT AGREEMENT DT. 07/08/2008. THE APPELLANT F I RM HAD NOT SHOWN RECEIPT OF CASH AMOUNTING TO RS.44,56,500/- IN ITS BOOKS OF AC COUNTS . THE APPELLANT FIRM COULD ALSO NOT SUBSTANTIATE SOUR CES OF INVESTMENT IN CONSTRUCTION OF THE PROPERTY AND THER EFORE SURRENDERED RS.81 , 06,500 / - AS ADDITIONAL INCOME FOR AY 2009-10 DURING SURVEY. THE APPELLANT R E TRACTED THE DISCLOSURE W ITHOUT FURNISHING ANY EVIDENCE FOR THE S A ID R E TRACTION. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, I AM OF THE CO NSIDERED VIEW THAT RS.75,56,500/- HAS RIGHTLY BEEN ADDED BY THE AO. 13. DURING THE COURSE OF APPELLATE PROCEEDINGS THE APPEAL WAS FI X ED FOR HEARING ON 18/04/2012, 03/05/2012, 22/05/2012 AND FINALLY ON 04/06/2012. THE NOTICES W ERE SENT BY SPEED POST W ITH ACKNOWLEDGEMENT DUE AND HAVE BEEN DULY SERVED . THE APPELLANT ATTENDED THE OFFICE ON 22/05/2012 BUT DID NOT CONTROVERT THE FINDINGS OF T HE AO BY FILING ANY DOCUMENTARY EVIDENCE RELEVANT FOR THE AY UNDER APPEAL. NO DETAILS IN SUPPORT OF ITS GROUNDS OF APP EAL WERE FILED. 14. FROM THE ABOVE IT IS ABUNDANTLY CLEAR THAT THE APPELLANT HAS FAILED TO FURNISH THE R E QUISITE DOCUM E NTS IN SUPPO R T OF HIS GROUNDS OF APPEAL. DUR I NG THE APPELLATE PROCEEDINGS, THE APPELLANT DID NOT COMPLY W ITH THE VARIOUS NOTICES SENT TO HIM FOR ATTENDING THE APPEAL. IN ASSESSMENT PROCEEDINGS ALSO THE APPELLANT DID NOT COMPLY W ITH THE V ARIOUS NOTICES AND FAILED TO FURNISH AN Y DETA I LS. AO WAS LEFT WITH NO OPTION BUT TO COMPLETE THE ASSESSMENT PROCEEDINGS U/S 144 RWS 143 (3) OF THE IT ACT. THE CONDUCT OF THE APPELLANT HAS ESTABL ISHED THAT HE HAS NO DOCUMENTS IN HIS POSSESSION TO E X PLAIN HIS UNDISCLOSED INCOME OFFERED FOR TA X ATION DURING SUR V EY. IT ALSO ESTABLISHES THAT THE APPELLANT IS NO T INTERESTED IN PURSU I NG THE APPE A L DESPITE REPEATED OPPORTUNITIES GIVEN TO IT BY THE UNDERSIGNED, IN THE FACTS AND CIRCUMSTANCES OF THE CASE, I AM OF THE CONSIDERED V IEW THAT AO W AS JUSTIFIED IN MAKING THE ADDITIONS OF RS. 7 5,56 , 500/- FOR AY 2009 - 10. THE SAME IS CONFIRMED. AGGRIEVED BY THE ORDER OF LD.CIT(A), ASSESSEE IS NOW IN AP PEAL BEFORE US AND HAS RAISED THE FOLLOWING GROUNDS : 1. ON THE BASIS OF FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE DELAY IN FILING OF APPEAL PLEASE BE CONDONED. 4 2. ON THE BASIS OF FACTS AND IN THE CIRCUMSTANCES O F THE CASE THE APPEAL MAY PLEASE BE SET ASIDE TO THE FILE OF THE C OMMISSIONER OF INCOME TAX, (APPEAL)-II, NASHIK FOR FRESH ADJUDICAT ION. 3. ON THE BASIS OF FACTS AND IN THE CIRCUMSTANCES O F THE CASE AND AS PER LAW, THE COMMISSIONER OF INCOME TAX, (APPEAL)-I I, NASHIK IS NOT JUSTIFIED IN CONFIRMING THE ADDITION OF RS.44,56,50 0/- MADE BY THE AO ON ACCOUNT OF MONEY RECEIVED ON SALE OF PROJECT OF PATHARDI. 4. ON THE BASIS OF FACTS AND IN THE CIRCUMSTANCES O F THE CASE AND AS PER LAW, THE COMMISSIONER OF INCOME TAX, (APPEAL)-I I, NASHIK IS NOT JUSTIFIED IN CONFIRMING THE ADDITION OF RS.31,00,00 0/- MADE BY THE AO ON ACCOUNT OF PROFIT ON SALE OF PATHARDI PROJEC T. 4. THE CASE FILE REVEALS THAT THERE IS DELAY OF 499 DAYS IN FILING THE PRESENT APPEAL. ASSESSEE HAS PRAYED FOR CONDONATIO N OF DELAY AND HAS FILED THE AFFIDAVIT OF SRI SANJEEV S. MUTHA, PARTNER OF ASSESSEES FIRM, WHEREIN INTER-ALIA, IT HAS BEEN STATED THAT THE C.A. MR. ULHAS PATIL, WHO WAS ENTRUSTED WITH THE FILING OF THE APPE AL DID NOT FILE THE APPEAL THOUGH HE REPRESENTED TO ASSESSEE THAT THE APPEAL HAS BEEN FILED. LATER ON, WHEN IT CAME TO THE NOT ICE OF ASSESSEE THAT THE CA HAS NOT FILED THE APPEAL, ASSESSEE FILED THE PRESENT APPEAL. HE FURTHER SUBMITTED THAT AGAINST THE CONDUCT OF CA, A COMPLAINT HAS BEEN LODGED BY ASSESSEE WITH THE IN STITUTE OF CHARTERED ACCOUNTANTS AND THE SAME IS PENDING. IT WAS THEREFORE SUBMITTED THAT THE DELAY IN FILING THE PRESENT APPEAL BE C ONDONED. LD.D.R. OBJECTED TO THE CONDONATION APPLICATION FILED BY THE ASSESSEE AND SUBMITTED THAT FILING OF COMPLAINT AGAINST THE CA ULHAS PATIL BEFORE THE INSTITUTE OF CHARTERED ACCOUNTAN TS IS AFTER FILING OF APPEAL AND IT IS AFTER THOUGHT AND THEREFORE THE PR AYER FOR CONDONATION OF DELAY MAY BE DISMISSED. 5. WE HAVE HEARD BOTH THE PARTIES ON THE ISSUE OF DELA YED FILING OF PRESENT APPEAL. AFTER CONSIDERING THE SUBMISSIONS OF LD.A .R. 5 AND THE AVERMENTS MADE BY THE PARTNER IN THE SWORN A FFIDAVIT, WE ARE OF THE VIEW THAT THERE WAS A REASONABLE CAUSE FOR D ELAY IN FILING THE APPEAL AND HENCE, THE DELAY IS CONDONED AND THE AP PEAL IS ADMITTED FOR HEARING. 6. ON THE MERITS OF THE ISSUE, LD.A.R. REITERATED THE SUBMISSIONS MADE BEFORE AO AND LD.CIT(A) AND FURTHER SUBMIT TED THAT IN THE PRESENT CASE THE ADDITION HAS BEEN MADE ON LY ON THE BASIS OF STATEMENT RECORDED DURING THE COURSE OF SURVEY AND THE STATEMENT RECORDED DOES NOT CARRY EVIDENTIARY VALUE FOR WHICH HE RELIED ON THE DECISION OF HONBLE SUPREME COURT IN THE CAS E OF CIT VS. S. KHADER KHAN SON (2013) 352 ITR 480 (SC). HE FURT HER SUBMITTED THAT IN THE PRESENT CASE, AS FAR AS ADDITION O F RS.44,56,500/- BEING RECEIPT OF ON MONEY IS CONCERNED, T HE SAME NEEDS TO BE ADDED TO THE INCOME. AS FOR AS ADDITION O F RS.5,50,000/- ON ACCOUNT OF UNEXPLAINED INVESTMENT IN CONSTRUCTION IS CONCERNED, HE SUBMITTED THAT IT HAS BEEN OFFERED TO TAX. HE FURTHER SUBMITTED THAT THE VERIFICATION OF CLAIM OF RS.31,00,000/- OF THE PROFIT HAS NOT BEEN EXAMINED AT THE LOWER LEVEL AND THEREFORE THE MATTER MAY BE REMITTED BACK TO THE AO FOR VERIFICATION. 7. LD.D.R. ON THE OTHER HAND, SUPPORTED THE ORDER OF AO A ND LD.CIT(A) AND FURTHER SUBMITTED THAT THE PAYMENT OF ON M ONEY HAS BEEN CONFIRMED AND SINCE NO BOOKS OF ACCOUNTS WERE MAINTAINED BY THE ASSESSEE AND IN THE ABSENCE OF ANY JU STIFICATION BEFORE AO OR IN APPELLATE PROCEEDINGS DESPITE SEVERAL OPPO RTUNITIES 6 GRANTED BY THEM, AO WAS FULLY JUSTIFIED IN MAKING THE ADDITIO N. HE THUS SUPPORTED THE ORDER OF LD.CIT(A). 8. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MAT ERIAL ON RECORD. THE ISSUE IN THE PRESENT CASE IS WITH RESPECT T O THE ADDITION OF UNDISCLOSED INCOME. LD.CIT(A) WHILE CONFIRMING THE ORDER OF AO HAS NOTED THAT DURING THE COURSE OF SURVEY , ASSESSEE HAD ADMITTED AN UNDISCLOSED INCOME OF RS.81,06,500/- BUT HA D RETRACTED AND OFFERED ONLY RS.5,50,000/- AS ADDITIONAL INCO ME. HE HAS FURTHER GIVEN A FINDING THAT ASSESSEE DID NOT ATTEND ASSESSMENT PROCEEDINGS AND DID NOT FILE ANY DOCUMENTARY EVIDENCE IN SUPPORT OF RETRACTION OF UNDISCLOSED INCOME OFFERED AT T HE TIME OF SURVEY. WE FURTHER FIND THAT LD.CIT(A) HAS NOTED THAT DUR ING THE COURSE OF SURVEY THE PARTNERS OF THE FIRM HAD ADMITTED T O THE RECEIPT OF ON MONEY. HE HAS FURTHER NOTED THAT ASS ESSEE HAD ALSO ADMITTED THAT NO DETAILS OF INVESTMENT FOR CONSTRUCTION WE RE MADE AND THE COST OF CONSTRUCTION WAS AN APPROXIMATE BASIS. LD.CIT(A) HAS ALSO NOTED THAT THOUGH VARIOUS OPPORTUNITIES WERE G RANTED TO THE ASSESSEE BY AO AND CIT(A) BUT ASSESSEE DID NOT AV AIL THE OPPORTUNITY OF FILING THE REQUIRED DETAILS AND THE NECESSARY EVIDENCES. BEFORE US, LD.A.R. COULD NOT CONTROVERT THE FINDI NGS OF LOWER AUTHORITIES. 9. BEFORE US. LD.A.R. HAS RELIED ON THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF KHADER KHAN SON (SUPRA). W E FIND THAT THE RATIO OF THE DECISION OF THE ABOVE IS NOT APPLICAB LE TO THE FACTS OF THE PRESENT CASE. CONSIDERING THE AFORESAID FACTS , WE ARE OF 7 THE VIEW THAT NO INTERFERENCE WITH THE ORDER OF LD.CIT(A) IS CALLED FOR AND THUS THE GROUNDS OF THE ASSESSEE ARE DISMISSED. 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DISMI SSED. ORDER PRONOUNCED ON 23 RD DAY OF JUNE, 2017. SD/- SD/- ( SUSHMA CHOWLA ) ( ANIL CHATURVEDI ) ! / JUDICIAL MEMBER '! / ACCOUNTANT MEMBER . PUNE; ! DATED : 23 RD JUNE, 2017. YAMINI #$%&'('% / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. 4. 5. 6. CIT(A)-II, NASHIK. CIT-2, NASHIK. #$% &&'(,* '(, / DR, ITAT, B PUNE; %,-./ GUARD FILE. / BY ORDER, // TRUE COPY // //// // / 0123 / ASSISTANT REGISTRAR, * '( , / ITAT, PUNE.