SHRI ASHISH MUKUND BAJAJ, Nagpur V. ITO-WARD-3(3), Nagpur

ITA 178/NAG/2014

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 1578 (ITAT-NAGPUR)
• Duration Of Justice: 1 year(s) 8 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-12-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2008-2009
• Appeal Filed On: 03-04-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: NARENDRA KANE
• Keywords: Additional evidence
• Section: 143(3)

Judgement Text

1 I TA NO. 178 /NA G/2014 IN TH E INCOME TAX APPELLATE TRIBUNAL: NAGPUR BENCH: NAGPUR BEFORE SHRI MUKUL K. SHRAWAT, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER. I.T.A. NO. 178 /NAG/2014 ASSESSMENT YEAR: 2008 - 09 SHRI ASHISH MUKUND BAJAJ, HIG PLOT NO.578, OPP. INOX MALL , HIWARI LAYOUT, NAGPUR 440 008 PAN:AEOPB7700E VS THE INCOME TAX OFFICER, WARD 3 (3), NAGPUR (APPELLANT) (RESPONDENT) APPELLANT BY NONE RESPONDENT BY SHRI NARENDRA KANE, DR DATE OF HEARING: 19 - 10 - 2015 DATE OF PRONOUNCEMENT: 4 - 12 - 2015 O R D E R PER MUKUL K. SHRAWAT, J.M. THIS IS AN APPEAL FILED BY THE ASSESSEE ARISING FROM THE ORDER OF THE LEARNED CIT (A) - I, NAGPUR DATED 23 - 12 - 2013. THE GROUNDS RAISED BY THE ASSESSEE ARE ARGUMENTATIVE IN NATURE. HOWEVER, THE MAIN ISSUE IS IN RESPECT OF T WO ADDITIONS WHICH WERE STATED TO BE THE CASH DEPOSIT IN THE BANK AND CHALLENGED BEFORE US IN THE FOLLOWING MANNER: - 1. THAT THE LEARNED CIT (A) HAS COMMITTED GROSS MISTAKE IN SUSTAINING THE ORDER OF ASSESSING OFFICE, WHEREBY, THE ASSESSING OFFICER HAS MA DE AN ADDITION OF RS.17,99,000/ - AND RS.10,54,198/ - TOWARDS CASH DEPOSIT IN THE BANK ACCOUNT. THE CASH DEPOSITS WERE MADE FROM THE CASH BALANCE AVAILABLE AS PER BOOKS OF ACCOUNT. ALSO, HE HAS MADE WITHDRAWALS FROM THE BANK ACCOUNTS FROM TIME TO TIME WHICH WERE SUFFICIENT TO MEET THE CASH DEPOSIT IN THE BANK ACCOUNT. AND, AS SUCH THE ADDITIONS MADE NEEDS TO BE DELETED. 2 I TA NO. 178 /NA G/2014 2 . AT THE OUTSET, IT IS WORTH TO MENTION THAT IN THE PAST NOTICES WERE ISSUED FIXING THE DATES OF HEARING BUT NO PROPER COMPLIANCE WAS MADE. IT IS ALSO WORTH TO MENTION THAT THE ADDRESS IN APPEAL FORM NO.36 WAS ALSO CHANGED AND THE NOTICES WERE ISSUED ON THE SAID ADDRESS. THERE WAS A NOTICE FIXING THE DATE OF HEARING ON 09 - 07 - 2015 WHICH WAS SERVED ON THE ADVOCATE OF THE ASSESSEE SHRI M. S. GUP TA, WHO HAS FILED A LETTER INTIMATING THE CHANGE OF ADDRESS OF THE ASSESSEE. ON THE BASIS OF THE ADDRESS GIVEN BY MR. M. S. GUPTA, ADVOCATE, ANOTHER NOTICE WAS ISSUED. THE REVENUE DEPARTMENT HAS ALSO BEEN ASKED TO SERVE NOTICE. A COMPLIANCE REPORT PERTAINI NG TO THE SERVICE OF THE NOTICE HAS ALSO BEEN PLACED BY THE REVENUE DEPARTMENT INFORMING THAT THE NOTICE WAS DULY SERVED ON THE ASSESSEE ON 07 - 10 - 2015 IN RESPECT OF THE HEARING FIXED ON 19 - 10 - 2015. EVEN, ON THIS DATE, NO ONE HAS APPEARED. UNDER SUCH CIRCUM STANCES, WHEN THERE WAS CONTINUOUS NON - COMPLIANCE FROM THE SIDE OF THE APPELLANT, WE HEREBY HOLD THAT THE ASSESSEE IS NOT INTERESTED TO PURSUE THIS APPEAL. HENCE, WE PROCEED FOR EX - PARTE ADJUDICATION AFTER CONSIDERING THE MERITS OF THE CASE. 3. FACTS IN B RIEF, AS EMERGED FROM THE CORRESPONDING ASSESSMENT ORDER PASSED U/S 143(3) DATED 30 TH DECEMBER, 2010 WERE THAT THE ASSESSEE IN INDIVIDUAL CAPACITY IS IN THE BUSINESS OF TRADING OF GRAIN ON WHOLESALE BASIS. IT WAS NOTICED BY THE AO THAT THE A SSESSEE HAD DEP OSITED CASH OF RS .10,54,198/ - IN HIS SAVINGS BANK ACCOUNT WITH AKOLA JANATA COMMERCIAL CO - OPERATIVE BANK LTD. , NANDED AND GANDHIBAGH BRANCH, NAGPUR. THE AO FURTHER NOTICED THAT CERTAIN INFIRMITIES WERE POINTED OUT BY THE AUDITOR. THE AO FURTHER NOTICED FRO M THE BOOKS OF ACCOUNT PRODUCED BY THE APPELLANT THAT THE SAME WERE NOT FOUND SUPPORTED WITH THE BILLS AND VOUCHERS. THE AO FURTHER NOTICED FROM THE BANK BOOK THAT THE OPENING AND CLOSING BALANCES WERE NOT MENTIONED. THE AO, THUS, FOUND THAT IN THE ABSENCE OF BILLS AND VOUCHERS AND THE OPENING AND CLOSING BALANCES OF CASH BOOK COUPLED WITH THE INFIRMITIES POINTED OUT BY THE AUDITORS IN THEIR AUDIT REPORT, CONCLUDED THAT THE VERACITY OF THE TRANSACTIONS OF 3 I TA NO. 178 /NA G/2014 CASH DEPOSITS IN THE BANK ACCOUNTS OF THE APPELLANT CANNOT BE VERIFIED. THE RECEIPTS AND PAYMENTS REFLECTED IN THE ACCOUNTS ARE FOUND TO BE WITHOUT PROPER NARRATION. BESIDES, THE NAMES AND ADDRESSES OF THE BROKERS, THE CASH DEPOSIT SLIPS WERE ALSO NOT PRODUCED BEFORE THE AO. THE APPELLANT ALSO COULD NOT PRO VE THAT THE CASH WITHDRAWALS MADE FROM THE BANK WERE UTILIZED FOR THE CASH DEPOSITS IN THE BANK ACCOUNTS. THE CONFIRMATION LETTERS OF THE PARTIES AND THE BROKERS AS ALSO MENTIONED IN THE AUDIT REPORT WERE NOT FURNISHED BEFORE THE AO. THE AO, THEREFORE, REJ ECTED THE BOOKS OF ACCOUNT OF THE APPELLANT AND MADE THE ADDITIONS OF RS.10,54,198/ - AND RS.17,99,000/ - AS UNEXPLAINED CASH DEPOSITS IN THE BANK ACCOUNTS OF THE APPELLANT, AS THE APPELLANT FAILED TO GIVE ANY PLAUSIBLE EXPLANATION OR ANY OTHER PROOF TO EXPL AIN THE DEPOSITS IN CASH IN HIS BANK ACCOUNTS WITH THE AKOLA JANATA COMMERCIAL CO - OPERATIVE BANK LTD., NAGPUR AND NANDED BRANCHES. BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY. 4. BEFORE THE LEARNED CIT ( A), IT WAS PLEADED THAT THERE WAS SOME PROBLEMS IN THE COMPUTER SOFTWARE DUE TO WHICH THE ACCOUNTS COULD NOT BE RECONCILED. HOWEVER, THE LEARNED CIT (A) CALLED FOR A REMAND REPORT AND THEREAFTER DISPENSED THE ARGUMENTS OF THE ASSESSEE IN THE FOLLOWING MANN ER: - 8 . 0 I HAVE CAREFULLY CONSIDERED THE ORAL AND WRITTEN SUBMISSIONS OF THE AR OF THE APPELLANT AND THE MATERIAL AVAILABLE ON RECORD. A REMAND REPORT IN THIS CASE WAS CALLED FOR ON THE SUBMISSION DATED 06.12.2012 OF THE APPELLANT FROM THE ASSESSING OFFIC ER. THE ASSESSING OFFICER HAS SUBMITTED A REMAND REPORT DATED 15.02.2013M WHEREIN THE ASSESSING OFFICER HAS GIVEN A CATEGORICAL FINDING THAT IN SPITE OF AMPLE OPPORTUNITIES CONFERRED UPON THE APPELLANT DURING THE REMAND PROCEEDINGS, THE APPELLANT HAS FAILE D TO PRODUCE THE BOOKS OF ACCOUNT AND OTHER DOCUMENTARY EVIDENCES, CONSEQUENTLY THE CASH DEPOSITS IN THE SAVINGS BANK ACCOUNTS OF THE APPELLANT, REMAINS UNEXPLAINED. THE AO HAS FURTHER RECORDED A FINDING IN HIS REMAND REPORT THAT, NO DETAILS OF OPENING AND CLOSING CASH BALANCES OF BANK BOOK / CASH BOOK HAS BEEN PROVIDED IN SUPPORT OF HIS CLAIM OF ADDITIONAL EVIDENCE ADDUCED IN THE FORM OF MONTH - WISE CASH AND BANK DEPOSITS AND WITHDRAWALS CHART DURING THE REMAND PROCEEDINGS. THE ADDITIONAL EVIDENCE FURNISH ED BY THE 4 I TA NO. 178 /NA G/2014 APPELLANT IS IN CONTRAVENTION TO RULE 46A OF THE INCOME TAX RULES, 1962. THE AO HAS ALSO SUBMITTED THAT THE RATIO OF THE DECISION OF THE RAJASTHAN HIGH COURT IN THE CASE OF CIT VS G. K. CONTRACTORS (2009) 19 DTR (RAJ.) 305, IS NOT APPLICABLE TO T HE FACTS OF T HE CASE OF THE APPELLANT. THE AO WAS FURTHER CALLED FOR CLARIFICATION ON HIS REMAND REPORT, VIDE THIS OFFICE LETTER DATED 20.02.2013, AS REGARDS TO THE FACT WHETHER THE BANK ACCOUNTS CLAIMED BY THE APPELLANT ARE REFLECTED IN THE BOOKS OF ACCO UNT OF THE APPELLANT. THE AO SUBMITTED FURTHER REMAND REPORT DATED 18.03.2013. IN HIS SUBSEQUENT REMAND REPORT DATED 18.03.2013, THE AO HAS SATED THAT THE APPELLANT HAS FURNISHED A COMPUTERIZED SET OF BOOKS OF ACCOUNT, SHOWING CASH BALANCED OF RS.68,963/ - AS ON 31.03.2008; WHEREAS, AS PER THE MONTH - WISE CASH AND BANK TRANSACTION CHART SUBMITTED BY THE APPELLANT IN THE COURSE OF APPELLATE PROCEEDINGS, THE CASH BALANCE IS SHOWN AT RS.7,11,609/ - AS ON 31.03.2008. THIS FACT CLEARLY DEMONSTRATE THAT THE COMPUTE RIZED BOOKS OF ACCOUNT SUBMITTED BEFORE THE AO DURING THE REMAND PROCEEDINGS ARE NOT RELIABLE, AS THE VARIATION IN THE FIGURES OF THE CASH BALANCE AS ON 31.03.2008, AS EMANATED FROM ASSESSEES OWN VERSION, ARE AT VARIANCE. THIS FACT SHOWS THAT THE SUBMISS IONS MADE BY THE APPELLANT, IN THE COURSE OF APPELLATE PROCEEDINGS, AS REGARDS AVAILABILITY OF CASH FOR DEPOSITS IN THE BANK ACCOUNTS, IN THE FORM OF MONTH - WISE CHART OF OPENING CASH BALANCE, CASH WITHDRAWALS AND DEPOSITS AND CASH AVAILABLE DURING THE FINA NCIAL YEAR, ARE NOT RELIABLE. 9.0 IT IS QUITE MANIFEST FROM ABOVE THAT, IN SPITE OF AMPLE OPPORTUNITIES CONFERRED UPON THE APPELLANT BY THE AO DURING THE ASSESSMENT PROCEEDINGS, THE REMAND PROCEEDINGS AND THE APPELLATE PROCEEDINGS, THE APPELLANT HAS FAIL ED TO EXPLAIN THE DEPOSITS IN THE BANK ACCOUNTS OF THE APPELLANT TO THE TUNE OF RS.10,54,198/ - AND RS.17,99,000/ - MADE DURING THE RELEVANT FINANCIAL YEAR. THE FACT REMAINS THAT THE APPELLANT HAS NOT BEEN ABLE TO GIVE ANY REBUTTAL OR PLAUSIBLE EXPLANATION T O REBUT THE FINDING OF THE AO THAT THE BOOKS OF ACCOUNT MAINTAINED BY T HE APPELLANT ARE DEFECTIVE; HENCE, TRUE PROFITS OF ASSESSEES AFFAIRS CANNOT BE DEDUCED. I, THEREFORE, DECLINE TO INTERFERE WITH THE ORDER OF THE AO. THE AO IS, THEREFORE, JUSTIFIED TO REJECT THE BOOKS OF ACCOUNT OF THE APPELLANT IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE FINDING OF THE AUDITORS POINTING OUT CERTAIN INFIRMITIES IN THE AUDITED BOOKS, WHICH ARE ESTABLISHED BY THE AO IN THE COURSE OF THE ASSESSMENT AND REMAND PROCEEDI NGS. IN VIEW THEREOF, THE ADDITION MADE BY THE AO IS CONFIRMED. THIS GROUND IS DISMISSED ACCORDINGLY. 5. FROM THE SIDE OF THE REVENUE, THE LEARNED DR MR. NARENDRA KANE APPEARED AND SUPPORTED THE ORDERS OF THE AO AND THE LEARNED CIT (A). IT APPEARS THAT TH E ASSESSEE WAS NOT IN A POSITION TO EXPLAIN THE SOURCES OF THE CASH 5 I TA NO. 178 /NA G/2014 DEPOSITED IN THE SAID TWO BANK ACCOUNTS. WE HAVE ALSO NOTICED THAT THE ASSESSEE WAS NOT IN A POSITION TO EXPLAIN THE DISCREPANCIES NOTICED BY THE AO. IN A SITUATION WHEN THERE IS NO COMPLI ANCE, WE HEREBY HOLD THAT THERE IS NO INFIRMITY IN THE FINDINGS GIVEN ON THE FACTS OF THE CASE BY THE LEARNED CIT (A). THE SAME ARE HEREBY CONFIRMED. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE ARE DISMISSED. 6. IN THE RESULT, THE ASSESSEE S APPEAL IS DIS MISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 4 TH DAY OF DECEMBER , 2015. SD/ - SD/ - (SHAMIM YAHYA) (MUKUL K. SHRAWAT) ACCOUNTANT MEMBER JUDICIAL MEMBER NAGPUR, DATED: 4 TH DECEMBER , 2015. LAKSHMIKANT DEKA/SR. PS COPY FORWARDED TO : 1. APPELLANT 2. RESPONDENT 3. C.I.T., CONCERNED 4. CIT ( APPEALS) - I, NAGPUR. 5. D.R., ITAT, NAGPUR. 6. GUARD FILE TRUE COPY BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, NAGPUR BENCH, NAGPUR. 6 I TA NO. 178 /NA G/2014 DATE INITIAL ORIGINAL DICTATION PAD & DRAFT ARE ENCLOSED IN THE F ILE 1. DRAFT DICTATED ON 02.12.2015 SR.PS 2. DRAFT PLACED BEFORE AUTHOR 03.12.2015 SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS 04.12.2015 S R.PS 6. DATE OF PRONOUNCEMENT 04.12.2015 SR.PS 7. FILE SENT TO THE BENCH CLERK 04.12.2015 SR.PS 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK