Shri Ajababhai Anadabhai Patel, Ahmedabad V. The ITO, Ward-3, Palanpur

ITA 1761/AHD/2019

• Counselvise Citation: [2022] 106 COUNSELVISE.COM (IT) 0143 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 1 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-01-2022
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 25-11-2019
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: V.K. SINGH
• Keywords: Transactions in derivatives

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, AHMEDABAD ( Conducted Through Virtual Court ) BEFORE SHRI RAJPAL YADAV, VICE PRESIDENT आयकर अपील सं./ITA No. 1761/Ahd/2019 ( /A s s es s me nt Y e a r : 2 0 1 1 - 1 2 ) Ajabab hai Anadabhai Patel At Po st Village Mo ti Dugd ol Tal : Dhanera Banaskantha – 385 3 10 / Vs. The Income Tax O fficer Ward-3 Palanpur यी ल सं./जीआइआर सं./PA N/GI R No. : ASZP P5027 F (अपील /Appellant) . . ( य / Respondent) अपील र स / Appellant by : None (Written submission) य क र स /Respondent by: Shri V.K. Singh, Sr.DR स क र / D a t e o f H e a r i n g 05/01/2022 !"# क र /D a t e o f P r o n o u n c e m e n t 17/01/2022 आद श / O R D E R This is an appeal filed by the assessee against the order of Ld.Commissioner of Income Tax(Appeals)-4, Ahmedabad [‘CIT(A)’ in short] vide order in CIT(A)-4/10559/2018-19 dated 01/10/2019 passed for the Assessment Year (AY) 2011-12. 2. The Assessee has raised following grounds of appeal: 1. The learned CIT(A) has erred both in law and on the facts of the case in confirming the action of AO made addition to tune of Rs.29,41,794/- as 1% of Total Transaction on Non Speculative Business of Rs.29,41,79,375/- without giving effect of the gross ITA No.1761/Ahd/2019 Shri Ajababhai Anadabhai Patel vs.ITO Asst.Year – 2011-12 - 2 - purchase of the share transaction, and raised tax demand of Rs.21,31,730/-. 2. The learned CIT(A) has erred both in law and on the facts of the case for considering that the Bank account of the Sub Broker is bank Account of the assessee. 3. The learned CIT(A) ahs erred both in law and on the facts of the case in confirming that assessee has made Non Speculative loss of Rs.21,29,208/- during the A.Y. 2011-12. 3. When the matter is called for hearing, the Assessee’s Representative was not present. However, a written submission dated 03/01/2022 was filed before the Tribunal. Based on the above written submission and the submission of the Ld.DR, the case is decided with available material on record. 4. The brief facts of the case is that for the Assessment Year 2011-12, the assessee has not filed his Return of Income. However, the assessee had made a total transaction on Non Speculative Business of ₹29,41,79,375/- . As this income has not been offered by the assessee for taxation, a notice u/s.148 of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) was issued on 24/03/2018 which was duly served upon the assessee by Speed Post. In response to the same, no Return of Income was filed by the assessee. Therefore, the Assessing Officer issued further notices u/s.142(1) of the Act and also a show-cause notice dated 13/12/2018 fixing the case for hearing on 19/12/2018, which was served upon the assessee as there was no response for the above notices, the Assessing Officer framed the assessment u/s.144 ITA No.1761/Ahd/2019 Shri Ajababhai Anadabhai Patel vs.ITO Asst.Year – 2011-12 - 3 - r.w.s. 147 of the Act. Further, the assessee has not co-operated with the Department, the Assessing Officer estimated the profit on Share Commodity Transaction amounting to Rs.29,41,79,375/- at 1% which is found to be reasonable and demanded a tax thereon. 5. Aggrieved against the assessment order, assessee filed appeal before the ld.CIT(A)-4, Ahmedabad challenging the ex-parte order. After considering the reply given by the assessee’s representative, the Ld.CIT(A) held as follows: “The appellant was given a notice of enhancement of assessment enhancing the income from Rs.29,41,790/- to Rs.41,30,000/- on 16.09.2019. The appellant attended and filed the explanation as under: “That Your honor has issued notice dated 16.9.19 received as on 28.9.19 asking for cash deposit in bank statement of Rs.41,60,000/- for that it is fruitfully to mention here that Bank statement which was given was not appellant but the same is bank statement of the Kalabhai who was the sub broker, so that appellant has not deposit any cash his bank during the relevant AY. By giving Bank statement of kalabhai, we can prove easily that the Transaction show in the ledger of the Alpha commodity of the appellant and bank statement to the kalabhai are matched. Your honor, I hope that the above data is sufficient for your kind perusal.” The AR commented on 01.10.2019 that the appellant is small time villager who is not able to pay his fee not to talk about payment of outstanding taxes. The appellant has tried to say that cash ITA No.1761/Ahd/2019 Shri Ajababhai Anadabhai Patel vs.ITO Asst.Year – 2011-12 - 4 - deposited in the bank account of Kalabhai should be questioned in the file of Kalabhai as he knows that the assessment for A.Y. 2011- 12 cannot be reopened in his case. Also it was claimed that no payment has been made by him to Kalabhai as the payment to him is still pending as unsecured loan of Rs.21,83,530/-. Neither any confirmation from Kalabhai was filed nor it was explained as to how the payment can be kept pending/unsettled especially when the transactions are in commodity stock exchange. The appellant never filed return of income as per time stipulated u/s.139(1) of the I.T. Act, therefore, the claim of alleged loss incurred in commodity transactions is not permissible as per law. The fact remains that the appellant has introduced cash in the system for which self serving statements are being made. Technically, the cash is in the bank account of Kalabhai therefore, the total cash of Rs.41,30,000/- cannot be taxed in the hands of appellant. In the circumstances and as per facts of the case it is felt that the addition made by AO is on estimation basis and the same is within parameters upheld by various courts. In the circumstances, a benefit of doubt is given to the appellant and an addition of Rs.29,41,790/- is upheld with the comment that the appellant has introduced unexplained cash to the extent of Rs.29,41,790/-. The ground nos.1&2 of appeal are dismissed.” 6. I have carefully considered the written submissions filed by the assessee. There is no any material evidence in respect of its claim except disputing the estimation of 1% made by the Assessing Officer. As the assessee has not filed the Return of Income in the normal course and also in response to the notice issued u/s.148 of the Act and consistently not produced any evidence to its claim, the estimation made by the Assessing Officer at 1% does not require any interference and thus the grounds of appeal raised the assessee are dismissed. ITA No.1761/Ahd/2019 Shri Ajababhai Anadabhai Patel vs.ITO Asst.Year – 2011-12 - 5 - 7. In the result, appeal of the assessee stands dismissed. This Order pronounced in Open Court on 17/01/2022 Sd/- ( RAJPAL YADAV ) VICE PRESIDENT Ahmedabad; Dated 17/01/2022 & .सी. यर, .( .स./T.C. NAIR, Sr. PS ! " # " /Copy of the Order forwarded to : 1. अपील / The Appellant 2. य / The Respondent. 3. सं)ं*+ आयकर आय , / Concerned CIT 4. आयकर आय , (अपील) / The CIT(A)-4, Ahmedabad 5. / 0 1ीय ( ( *+, आयकर अपील य अ*+कर#, अहमद ) द / DR, ITAT, Ahmedabad 6. 1 45 फ ल / Guard file. ु स / BY ORDER, //स य /प ( //True Copy// उ /स ंज (Dy./Asstt.Registrar) , / ITAT, Ahmedabad 1. Date of dictation 05.1.2022 (ITA 1760/Ahd/2019 followed and dictation pad 2-pages attached at the end of this appeal-file) 2. Date on which the typed draft is placed before the Dictating Member ...06.01/2022 3. Other Member... 4. Date on which the approved draft comes to the Sr.P.S./P.S ... 5. Date on which the fair order is placed before the Dictating Member for pronouncement...... 6. Date on which the fair order comes back to the Sr.P.S./P.S....... 7. Date on which the file goes to the Bench Clerk................................17.1.22 8. Date on which the file goes to the Head Clerk.................................17.1.22 9. The date on which the file goes to the Assistant Registrar for signature on the order.......................... 10. Date of Despatch of the Order...............