Shri Darshan U. Dave, Gandhinagar V. The Income Tax Officer, Ward-1, Gandhinagar

ITA 124/AHD/2016

• Counselvise Citation: [2021] 104 COUNSELVISE.COM (IT) 6934 (ITAT-AHMEDABAD)
• Duration Of Justice: 5 year(s) 10 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-12-2021
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 17-01-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S.S. SHUKLA
• Keywords: Unexplained investment; Principle of natural justice
• Section: 131

Judgement Text

ITA No.124/Ahd/2016 A.Y. 2011-12 Page 1 of 5 IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “SMC” BENCH, AHMEDABAD BEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBER AND Ms. SUCHITRA KAMBLE, JUDICIAL MEMBER (Conducted through Virtual Court) ITA No.124/Ahd/2016 Assessment Year: 2011-12 Darshan U. Dave, vs. Income Tax Officer, C/1, Rudraksh Bunglows, Ward - 1, Gandhinagar. Near Urjanagar -2, Randhesan, Gandhinaghar – 382421. [PAN – AFBPD 9027 N] (Appellant) (Respondent) Appellant by : Shri S.N. Divatia, A.R. Respondent by : Shri S.S. Shukla, Sr. D.R. Date of hearing : 02.12.2021 Date of pronouncement : 07.12.2021 O R D E R PER SUCHITRA KAMBLE, JUDICIAL MEMBER : This appeal is filed by the assessee against the order dated 11.12.2015 passed by the CIT(A), Gandhinagar, Ahmedabad for the Assessment Year 2011-12. 2. The grounds of appeal raised by the assessee are as under : 1) The Ld. CIT(A) has grievously erred in law or on facts in confirming the following disallowances. a) Unexplained Investment in the Bank Deposit Rs.7,45,000/- b) Unexplained investment on a/c. of Rs.15,00,000/- cash deposit received from outstation c) Unexplained Investment on a/c. of Cash Rs.19,00,000/- & cheque for which no Explanation given ITA No.124/Ahd/2016 A.Y. 2011-12 Page 2 of 5 d) Undisclosed income which has no source Rs.3,17,710/- Total amount Disallowances Rs.44,62,710/- 2) The Ld. CIT(A) has also grievously erred in law or on facts in not considering fully and properly the submissions made and evidences produced by the appellant and also the remand report submitted by the Ld. AO with regard to impugned disallowances. 3) The order passed by the Ld. CIT(A) dated 11.12.2015 confirming the additions made by the Ld. AO is wholly illegal, unlawful and against the principles of natural justice. 4) That in the facts and circumstances as well as in law, the Ld. CIT(A) ought not to have upheld the said disallowances. 5) It is therefore prayed that the disallowance of Rs.44,62,710/- upheld by the Ld. CIT(A) may kindly be deleted.” 3. The assessee is in the business of construction activities as per the submissions made before us. The assessee filed return of income showing income of Rs.2,14,624/- on 31.03.2012. The Assessing Officer made addition of Rs.3,17,710/- as undisclosed and accounted income from other sources, Rs.15,00,000/- as unexplained investment in Bank Account, Rs.19,00,000/- as unexplained investment in respect of cheque deposits/receipts. The Assessing Officer also made addition of Rs.2,756/- in respect of disclosed interest, Rs.9,703/- as unexplained investments related to certain receipts. 4. Being aggrieved by the assessment order, the assessee filed appeal before the CIT(A). The CIT(A) dismissed the appeal of the assessee. 5. The Ld. AR submitted that the assessee through submission dated 03.03.2014 explained each and every entry of 7 Banks viz. Bank of Baroda, Gandhinagar Nagarik Co-operative Bank, HDFC Bank, IDBI Bank, State Bank of India, Gandhinagar Urban Co-operative Bank, Gandhi Nagar Urban Co-operative Bank Account No.29. The details were filed as per the questionnaire of the Assessing Officer under Section 142(1) of the Income Tax Act, 1961. Vide submission dated 27.01.2014, the Ld. AR further submitted that in respect of notice dated 11.02.2014, the assessee filed the statement showing cash deposits and withdrawals from Bank of Baroda, State Bank of India, HDFC Bank, IDBI Bank etc. and has given the explanation of cash deposit of ITA No.124/Ahd/2016 A.Y. 2011-12 Page 3 of 5 Rs.13,65,286/-. The Ld. AR submitted that the Assessing Officer has made an addition of Rs.44,75,169/- in total under unexplained investment which was totally not as per the actual facts of the case. The Assessing Officer has not totally ignored the detailed explanation given by the assessee along with the evidences produced before the CIT(A). Though the CIT(A) called for remand report and there was no adverse remark in respect of explanation given by the assessee along with evidences, yet the CIT(A) confirmed the additions without giving justified reasons. 6. The Ld. DR submitted that as regards addition of Rs.7,45,000/- regarding unexplained investment in the Bank deposit, the assessee in respect of sale deed has not explained as to why the cash amount was given in instalment and there is no date mentioned in respect of instalment to be given for this specific period. The Ld. DR further submitted that assets were not disclosed and the CIT(A) has rightly mentioned that the source was not mentioned at all. As regards Rs.15,00,000/- and Rs.19,00,000/- that of unexplained investment on account of cash deposit received from outstation and in which cash and cheques were not explained by the assessee, the assessee never explained the identity of the parties and has never established the commercial status of the said investment. The Ld. DR demonstrated that before the cash deposit and after the cash deposit the bank balance of those parties were very low and that was not explained by the assessee at all. As regards interest income of Rs.1,654/- and the difference amount, the same was also not explained by the assessee. 7. We have heard both the parties and perused all the relevant materials available on record. As regards ground no.1(a), the Ld. AR demonstrated before us that the sale deed has categorically mentioned in respect of the payment of instalment of Rs.14,00,000/- in cash and there is no confirmation obtained from the party along with copy of return of income of the said parties. This explanation and evidences were before the CIT(A) and it was duly sent to the Assessing Officer for giving remand report. In remand report, no adverse remark or any distinguishing fact or doubt was explained by the Assessing Officer either that of sale deed or that of confirmations as well as copy of return of income of those parties. Thus, the source, identity and the genuineness as well as creditworthiness was properly explained by the assessee before the CIT(A) and the Assessing Officer has also verified the same. The ITA No.124/Ahd/2016 A.Y. 2011-12 Page 4 of 5 evidences were not at all considered by both the Revenue Authorities which is not proper and just. Hence, ground no.1(a) of the assessee is allowed. 8. As regards ground no.1(b), the assessee submitted bank books and bank statements during the assessment proceedings of the parties from whom cheques were received. The remand report has simply stated that proof of identity was not produced by the assessee in respect of the party who has given the amount to the assessee. At the time of assessment proceedings, the Assessing Officer could have called those parties by issuing notice under Section 131 read with Section 133, but the same was not done by the Assessing Officer at that stage. The CIT(A) has also not called for any further evidences. The explanation given by the assessee was in fact accepted by the Assessing Officer in indirect manner and at any stage the identities, creditworthiness and genuinity of the parties were not doubted. Thus, the finding given by the CIT(A) is contrary to the facts before us and hence ground no.1(b) is allowed. 9. As regards ground no.1(c), the assessee has given the proper explanation and there is no need to doubt about the evidences when it clearly set out the transactions between the parties and the source of the investments was properly explained by the assessee. The nexus of the cash deposits was properly explained by the assessee before both the Revenue Authorities. But, the same was totally ignored. Hence, ground no.1(c) is allowed. 10. As regards ground no.1(d), the explanation was properly given by the assessee and the Ld. AR submitted that the entire amount which was declared as profit of 26.37% be taken into account. The Schedule BP is not on presumptive business income calculation and hence the assessee properly calculated the G.P. at 26.36%. Therefore, ground no.1(d) is allowed. 11. As regards ground nos. 2, 3, 4 & 5 which are general in nature, hence require no adjudication and hence they are dismissed. Appeal of the assessee is thus partly allowed. ITA No.124/Ahd/2016 A.Y. 2011-12 Page 5 of 5 12. In the result, appeal of the assessee is partly allowed. Pronounced in the open Court on this 7 th day of December, 2021. Sd/- Sd/- (WASEEM AHMED) (SUCHITRA KAMBLE) Accountant Member Judicial Member Ahmedabad, the 7 th day of December, 2021 PBN/* Copies to: (1) The appellant (2) The respondent (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File By order UE COPY Assistant Registrar Income Tax Appellate Tribunal Ahmedabad benches, Ahmedabad