Zarnaben Vibhashbhai Sheth, RAJKOT-GUJARAT V. The CIT(A)-3, RAJKOT-GUJARAT

ITA 172/RJT/2018

• Counselvise Citation: [2022] 105 COUNSELVISE.COM (IT) 4950 (ITAT-RAJKOT)
• Duration Of Justice: 3 year(s) 11 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-04-2022
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2004-2005
• Appeal Filed On: 19-04-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Gift; Principle of natural justice
• Section: 271(1)(c); 143(3)

Judgement Text

आयकर अपीलीय अिधकरण आयकर अपीलीय अिधकरणआयकर अपीलीय अिधकरण आयकर अपीलीय अिधकरण, राजकोट 瀈यायपीठ 瀈यायपीठ瀈यायपीठ 瀈यायपीठ, , , , राजकोट IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH, RAJKOT (Conducted Through Virtual Court) ] ] BEFORE SMT.ANNAPURNA GUPTA, ACCOUNTANT MEMBER AND T.R. SENTHIL KUMAR, JUDICIAL MEMBER ITA No.172/RJT/2018 Assessment Year :2004-05 Zarnaben Vibhashbhai Sheth Sanjay & Co. Premises 1 st Floor, Rajput Para Main Road, Rajkot. Vs ITO, Ward-5(1) Rajkot. (Applicant) (Responent) Assessee by : None Revenue by : Shri S.S. Rathi, Sr.DR स ु नवाई क तार ख/D a t e o f H e a r i n g : 3 1 / 0 3 / 2 0 2 2 घोषणा क तार ख /D a t e o f P r o n o u n c e m e n t : 0 8 / 0 4 / 2 0 2 2 आदेश/O R D E R PER T.R. SENTHIL KUMAR, JUDICIAL MEMBER This appeal is filled by the assessee against the order dated 16.3.2018 passed by the ld.Commissioner of Income Tax (Appeals)-3 Rajkot relating to the Asstt.Year 2004-05. 2. Brief facts of the case is that assessee is an individual and proprietor of M/s.D.M. Jewellers and engaged in job work in gold ornaments. Assessee filed return of income on 10.6.2004 showing income at Rs.1,10,860/-. The return was processed under section 143(1) of the Act, and then the case of the assessee was selected for scrutiny assessment under section 143(3) wherein disallowance on account of bogus gift of Rs.3,51,000/-, unexplained credit entries of ITA No.172/RJT/2018 2 Rs.1,05,000/- and Rs.55,000/- were being added. The AO also made further disallowance under short/long term capital gain and thereby determined total income at Rs.6,21,859/-. The above disallowances were challenged by the assessee before the ld.CIT(A) and then to ITAT. The Coordinate Bench of the Tribunal in ITA No.115/Rjt/2011 dated 21.6.2013 restored the following grounds to the file of ld.CIT(A) for reconsideration: “1. The ld.CIT(A) erred in law and on facts in not appreciating the submissions of the appellant and consequently of the appellant and consequently in dismissing the appeal filed against the order under section 143(3) passed by the ITO Ward- 5(1), Rajkot. 2. The ld.CIT(A) erred in not taking into consideration specific grounds of appeal taken before him about the gift of Rs3,51,000/- unexplained ash credits of Rs.1,05,000/- & unexplained credit entry of Rs.55,000/-.” 3. During the pendency of remand appellate proceedings from 2013 to 2017, the ld.CIT(A) has provided numbers opportunities to the assessee for hearing the matter, however, none remained present. However, assessee made a written submission, which as recorded in the impugned order, reads as under: “1. Written submissions already furnished in your honour’s office on 14.3.2017. The same may kindly be considered quantum appeal restored by the Hon. ITAT may kindly be decided first and then this matter may kindly be taken up or both the matter may kindly be taken up simultaneously as deemed fit to your honour.” 4. The ld.CIT(A) after going through the above submissions held that the assessee is referring another appellate proceedings in respect of penalty order under section 271(1)(c) of the Act. However, the present appeal is quantum appeal passed under section 143(2), and the assessee has not submitted any details or evidences in ITA No.172/RJT/2018 3 support of his claim, even after issuance of several notices on the assessee. Therefore, the ld.CIT(A) disposed of the appeal with the available material on record. The findings of the ld.CIT(A) are as follows: “3.0 Appellant has claimed gift of Rs. 3,35,000/- in the relevant previous year from one Shri Amulbhai Chimanlal Kamdar. Appellant has claimed Shri Kamdar to be her brother, The A.O, has recorded statement of Shri Karndar and has also examined the bank statement of Shri Kamdar. It had been clearly noted by the A.O. that contrary to her claim. Shri Kamdar is not brother of appellant; rather he had failed to define his relationship with appellant. The fact that Shri Kamdar had no commensurate income (in his return) has also been brought out by AO. Most significantly, the gift of Rs.3,51,000/- through cheque has been made possible only by depositing equivalent amount in equivalent amount in cash by his donor in his bank account. The donor could not explain source of such cash deposits. These circumstances do not generate any confidence about capacity or genuineness of the said donor to advance impugned gift. Rather the circumstances are clearly suggesting that unaccounted money has been routed through the bank account of the so called donor in the garb of the gift I confirm she action of the A.O. Grounds in this regard are dismissed, 3.1 The other grievance of the appellant is towards additions of unexplained cash credit of Rs.1,05,000/- and unexplained credit entry of Rs. 55,000/-. There is no dispute regarding existence of these entries in the books of the appellant. The appellant had tried to explain the same as advances receipt from one Shri Yatin Kamdar. However no detail regarding identity, nature of the transaction and capacity and genuineness of the transaction was submitted either before the A.O. or during appellate proceeding. In these circumstances, I do not find any fault in the A.O 's order. (of making the addition of Rs.1,05,000 and Rs.55,000/-). Thus ground two is dismissed.” 5. Against this appellate order, the assessee is before the Tribunal with the following grounds: “1. The Ld. CIT(A) has erred in law and facts in confirming order passed by the Ld. A.O. making addition of Rs. 3,51,000/-, Rs.1,05,000/- & Rs.55,000/-, totaling Rs. 5,11,000/-. The same needs cancellation. ITA No.172/RJT/2018 4 2. The hearing of the appeal was fixed on 29-1-2018 and the appeal order is passed exprte on 16-3-2018. During this long gap of about 45 days the Ld. CIT(A) preferred not to give any further opportunity following the principals of natural justice as laid down by the Hon. Supreme Court and decide the appeal exparte. The order needs cancellation. 3. The Ld. CIT(A) has erred in law and facts in confirming order passed by the Ld. A.O. making addition of Rs.3,51,000/-. The same needs cancellation. 4. The Ld. CIT(A) has erred in law and facts in confirming order passed by the Ld. A.O. making addition of Rs. 1,05,000/-. The same needs cancellation. 5. The Ld. CIT(A) has erred in law and facts in confirming order passed by the Ld. A.O. making addition of Rs. 55,000/-. The same needs cancellation. 6. Taking into consideration the legal, statutory, factual and administrative aspects, no addition/disallowances of an amount of Rs. 3,51,000/-, Rs. 1,05,000/-& Rs. 55,000/-, totaling Rs. 5,11,000/- ought to have been confirmed. The additions need deletion. 7. Without prejudice, the assessment made is bad in law and deserves annulment. 8. Without prejudice, no adequate, sufficient and reasonable opportunity has been provided at the time of assessment stage. The assessment needs annulment. 9. Without prejudice, no adequate, sufficient and reasonable opportunity has been provided at the time of appellate stage. The assessment needs annulment 10. The appellant craves leave to add/alter/amend and/or substitute any or all ground of appeal before the actual hearing takes place.” 6. It is to be noted that the above appeal was fixed for hearing on 9.11.2021, 8.12.2021 and 31.3.2022. In spite of service of notice, the assessee has not appeared for the above hearings, nor authorized any professional on his behalf and also not filed any written submission or any materials in support of his claim. This clearly shows that the assessee is not interested in conducting the present appeal before the Tribunal. Therefore, we proceed to dispose ITA No.172/RJT/2018 5 of the appeal ex parte qua the assessee after hearing the ld.DR and material available on record. 7. The ld.DR, Mr.S.S.Rathi submitted that this is second round of litigation before the ld.CIT(A) and the Tribunal. In the first ground of appeal, the ITAT remanded the matter back to the file of the ld.CIT(A) for verification of gifts of Rs.3,51,000/- unexplained cash credit of Rs.1,05,000/- and another unexplained credit entry of Rs.55,000/- relating to the assessment year 2004-05. The assessee claimed gift of Rs3,51,000/- from one Shri Amulbhai Chimanlal Kamdar who said to be her brother. The ld.AO has recorded statement of Shri Kamdar and also examined his bank statement. The AO has noted that Shri Kamdar was not brother of the assessee and he failed to define his relationship with the assessee. Shri Kamdar had no commensurate income to make a gift of Rs.3,51,000/- and he could not explain source of such gifts. As the assessee and the donor failed to prove the source of the gifts, the AO confirmed the same. Similarly, the AO has made detailed inquiry relating to cash credit of Rs.1,05,000/- and unexplained credit entries of Rs.55,000/-. As they were not satisfied with the explanation offered by the assessee, the same was added by the AO. During the remand proceedings, the ld.CIT(A) held that the assessee has not adduced any material evidence to prove that the above transactions are genuine transaction. In the absence of the same, and non-cooperation of the assessee, the ld.CIT(A) confirmed the order passed by the AO, and therefore prayed that the appeal of the assessee be dismissed. 8. We have given our thoughtful consideration and materials available on record. Assessment year involved is 2004-05. As rightly stated by the ld.DR, this is second round of litigation before ITA No.172/RJT/2018 6 us. In terms of remand order given by the Tribunal, the ld.CIT(A) passed a detailed order wherein also the assessee has not appeared and nor provided any material to support her claim, rather by a letter, contending something irrelevant to the proceedings pending before the appellate authority. Further, the assessee has also not chosen to explain how the additions made by the AO are unjustified. In the absence of the same, the grounds raised before us are general in nature without any material support and therefore, we are unable to decide the issues on merits of the case. Therefore, all the grounds raised by the assessee are devoid of any merit, they are accordingly rejected. Further, assessment year involved herein is 2004-05, in the absence of any material, no useful purpose is to be achieved. 9. In the result, appeal of the assessee is dismissed. Order pronounced in the Court on 8 th April, 2022 at Ahmedabad. Sd/- Sd/- (ANNAPURNA GUPTA) ACCOUNTANT MEMBER (T.R. SENTHIL KUMAR) JUDICIAL MEMBER Ahmedabad, dated 8/04/2022 vk*