Smt. Truptiben Bakulbhai Patel, Surat V. The Income Tax Officer, Ward 3(1), Surat

ITA 1934/AHD/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 0328 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 2 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-10-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 20-07-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 12-07-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: O P MEENA
• Assessee Lawyers: SAPNESH SHETH
• Keywords: Unexplained cash credit; Income from undisclosed sources
• Section: 68

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER ./ ITA.NO.1934/AHD/2014 / ASSTT. YEAR: 2009-2010 TRUPTIBEN BAKULBHAI PATEL G-5, AKSHAR PARK B/H. ATOP TOWER BHATAR ROAD SURAT 395 007. PAN : ABTPP 9863 C VS ITO, WARD - 3(1) SURAT. ! / (APPELLANT) '# ! / (RESPONDENT) ASSESSEE BY : SHRI SAPNESH SHETH, AR REVENUE BY : SHRI O.P. MEENA, SR.DR / DATE OF HEARING : 20/07/2016 / DATE OF PRONOUNCEMENT: 04/10/2016 $%/ O R D E R ASSESSEE IS IN APPEAL AGAINST ORDER OF THE LD.CIT(A )-IV, SURAT DATED 27.5.2013 PASSED FOR THE ASTT.YEAR 2009-10. 2. ASSESSEE HAS TAKEN FOLLOWING GROUNDS OF APPEAL: 1. ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE AS WELL AS LAW ON THE SUBJECT, THE LEARNED COMMISSIONER OF INCOME-TAX (AP PEALS) HAS ERRED IN PASSING EX-PARTE ORDER WITHOUT PROVIDING SUFFICI ENT OPPORTUNITY OF HEARING TO ASSESSEE. 2. ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE AS WELL AS LAW ON THE SUBJECT, THE LEARNED COMMISSIONER OF INCOME-TAX (AP PEALS) HAS ERRED IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER I N MAKING ADDITION OF RS. 20,03,000/- AS UNEXPLAINED CASH CREDIT U/S 68 O F THE IT. ACT, 1961 AND OF 8,271/- ON ACCOUNT OF UNDISCLOSED INTEREST I NCOME. 3. ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE AS WELL AS LAW ON THE SUBJECT, THE LEARNED COMMISSIONER OF INCOME-TAX (AP PEALS) HAS ERRED IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER I N NOT ALLOWING SET-OFF ITA NO.1934/AHD/2013 2 OF LOSS OF RS.30,36,815/- ON TRADING OF SHARES AGAI NST THE ADDITIONS OF RS.20,11,271/- (20,03,000 + 8,271) MADE AS ABOVE. 4. IT IS THEREFORE PRAYED THAT ABOVE ADDITIONS A ND DISALLOWANCES CONFIRMED BY THE COMMISSIONER OF INCOME-TAX (APPEAL S) MAY PLEASE BE DELETED. 5. APPELLANT CRAVES LEAVE TO ADD, ALTER OR DELETE ANY GROUND(S) EITHER BEFORE OR IN THE COURSE OF HEARING OF THE APPEAL. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE HA S FILED HER RETURN OF INCOME ON 31.12.2009 DECLARING TOTAL INCOME AT RS.1 ,73,480/-. THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY ASSESSMENT A ND NOTICE UNDER SECTION 143(2) WAS ISSUED AND SERVED UPON THE ASSESSEE. TH E AO GOT INFORMATION FROM AIR WING EXHIBITING THE FACT THAT THE ASSESSEE WAS HOLDING BANK ACCOUNT OF ICICI BANK LTD. SHE HAS DEPOSITED A SUM OF RS.1 9,96,500/- ON VARIOUS DATES IN THIS ACCOUNT. WHEN THE LD.AO HAS CALLED F OR DETAILS FROM THE ASSESSEE WITH REGARD TO SOURCE OF AMOUNTS DEPOSITED IN THIS ACCOUNT, THEN, IT REVEALED THAT THE ASSESSEE HAS DEPOSITED A TOTAL SUM OF RS.7 3,24,946/- WHICH INCLUDED SUM OF RS.19,96,500/-. THE ASSESSEE CONTENDED THAT SHE HAS CARRIED OUT TRADING IN SHARES, AND SHE SUFFERED A LOSS OF RS.30 ,36,815/-. THE ASSESSEE FAILED TO EXPLAIN SOURCE OF DEPOSITS IN THIS ACCOUN T. THE ASSESSEE TOOK A PLEA THAT THIS UNEXPLAINED CASH CREDIT EVEN IF IT IS TRE ATED AS HER INCOME, THEN IT BE SET OFF AGAINST THE LOSS SUFFERED IN SHARE TRADING BUSINESS. THIS CONTENTION OF THE ASSESSEE HAS BEEN REJECTED BY THE AO BY OBSERVI NG AS UNDER: 7.3 THUS, IT IS CRYSTAL CLEAR THAT THE ASSESSEE HA S MAINTAINED AN UNDISCLOSED BANK ACCOUNT AND DEPOSITED UNACCOUNTED INCOME EARNED DURING THE YEAR UNDER CONSIDERATION IN IT. IT IS WO RTHWHILE TO MENTION HERE THAT THE NARRATION OF DEBIT ENTRIES OF THE SAI D BANK ACCOUNT SHOWS THAT THE ASSESSEE HAS MADE INVESTMENT AND INCURRED EXPENDITURE, WHICH ARE UNACCOUNTED AND MADE OUT OF SUCH UNACCOUNTED IN COME REFLECTED AT THE CREDIT SIDE OF THE SAID BANK ACCOUNT. ITA NO.1934/AHD/2013 3 7.4 THE ASSESSEE HAS ALSO FAILED TO EXPLAIN THE SO URCE OF AMOUNT CREDITED BY CHEQUES. IT PROVES THAT IT IS NOTHING B UT THE ASSESSEE HAS ALSO EARNED UNACCOUNTED INCOME BY CHEQUES AND THAT IS WHY, SUCH CHEQUES HAVE BEEN DEPOSITED IN THIS UNDISCLOSED BAN K ACCOUNT. FURTHERMORE, THE ASSESSEE COULD NOT FURNISH ANY EXP LANATION IN RESPECT OF DEBIT ENTRIES APPEARING IN THE SAID BANK .ACCOUN TS AND CONTRARY, THE ASSESSEE HAS ISSUED SEVERAL CHEQUES WITHIN FEW DAYS OF DEPOSITING THE CASH IN THE SAID BANK A/'C. IT PROVES THAT DEBIT EN TRIES APPEARING IN THE SAID BANK ACCOUNT IS NOTHING BUT ASSESSEE'S OWN UNA CCOUNTED INVESTMENT IN UNDISCLOSED ASSETS, WHICH IS NOT DISC LOSED BEFORE THE INCOME-TAX DEPARTMENT IN HER RETURN OF INCOME OR BO OKS OF ACCOUNTS. 7.5 THEREFORE, IT IS CRYSTAL CLEAR THAT THE ASSESSE E HAS NO EXPLANATION REGARDING THE ENTRIES APPEARING EITHER ON DEBIT SID E OR CREDIT SIDE OF UNDISCLOSED BANK ACCOUNTS AND THEREBY, IT IS ESTABL ISHED THAT THE TOTAL AMOUNT DEPOSITED EITHER IN CASH OR BY CHEQUES, IS N OTHING BUT THE ASSESSEE'S NET UNACCOUNTED INCOME, WHICH HAS BEEN E ARNED DURING THE YEAR UNDER CONSIDERATION ITSELF. 8. IN SUPPORT OF HER CLAIM TO HAVE DEPOSIT CASH IN ICICI BANK WHICH IS PROVED TO BE UNACCOUNTED AND ALSO ADMITTED BY TH E ASSESSEE AS SUCH SHE HAS SUBMITTED P&L ACCOUNT, BALANCE SHEET, CAPIT AL ACCOUNT RELATED TO UNACCOUNTED/UNDISCLOSED SHARE TRADING ACCOUNT AN D THE CASH BOOK OF ABOVE REFERRED SAVING BANK ACCOUNT AND CLAIMED THE SHARE TRADING NET LOSS OF RS. 30,36,815/-. SINCE THE ASSESSEE HAS NOT DISCLOSED THE ENTIRE AFFAIR OF THE ABOVE MENTIONED BANK ACCOUNT AND SHAR E TRADING IN HER RETURN OF INCOME THE LOSS AMOUNTING TO RS. 30,36,81 57- CLAIMED BY THE ASSESSEE IS NOT ALLOWED. ' 4. THE LD.AO, ACCORDINGLY, MADE ADDITION OF RS.20,0 4,571/-. BEFORE THE LD.CIT(A) ASSESSEE DID NOT APPEAR AND DID NOT SUBMI T ANY EXPLANATION. THE LD.CIT(A) CONSIDERING THE ISSUE, DECIDED THE APPEAL OF THE ASSESSEE EX PARTE . THE LD.CIT(A) HAS OBSERVED THAT THE ASSESSEE FAILED TO DEMONSTRATE THAT SHE HAS CARRIED OUT ANY SHARE TRADING ACTIVITIES AND SU FFERED A LOSS OF RS.30,36,815/-. BEFORE ME, ON THE STRENGTH OF SECT ION 71 OF THE INCOME TAX ACT, THE LD.COUNSEL FOR THE ASSESSEE CONTENDED THAT INCOME ADDED BY THE AO ON ACCOUNT OF UNEXPLAINED CASH CREDIT IS TO BE SET OFF AGAINST THE LOSS IN THE SHARE TRADING BUSINESS. FOR SUPPORTING HIS CONTENT IONS, THE LD.COUNSEL FOR THE ITA NO.1934/AHD/2013 4 ASSESSEE RELIED UPON THE ORDER OF THE ITAT IN THE C ASE OF K.R. AUTOMOBILES VS. ACIT, IN ITA NO.1972/AHD/2012. HE PLACED ON RE CORD COPY OF THE ORDER. 5. ON THE OTHER HAND, THE LD.DR RELIED UPON THE ORD ER OF THE REVENUE AUTHORITIES. 6. I HAVE CONSIDERED RIVAL CONTENTIONS AND GONE THR OUGH THE RECORD CAREFULLY. SUB-SECTION 1 OF SECTION 71 CONTEMPLATE S THAT WHERE THE NET RESULT OF COMPUTATION MADE FOR ANY ASSESSMENT YEAR IN RESP ECT OF ANY HEAD OF INCOME, IS A LOSS, THE SAME CAN BE SET OFF AGAINST THE INCOME FROM OTHER HEADS. SIMILARLY, IN THE CASE OF K.R. AUTOMOBILES (SUPRA), THE TRIBUNAL HAS ALLOWED SET OFF INCOME AGAINST THE LOSS. THE TRIBUNAL HAS PLACED RELIANCE UPON THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT I N THE CASE OF CIT VS. SHILPA DYEING & PRINTING MILLS P. LTD., (2013) 39 T AXMANN.COM 3 (GUJ). AS FAR AS PROPOSITION OF LAW IS CONCERNED, THERE IS NO DISPUTE WITH REGARD TO THEM. BUT IN THE PRESENT CASE, THE ASSESSEE HAS NOT FILED ANY RETURN DECLARING LOSS. SHE HAS NOT SHOWN LOSS IN HER BOOKS OF ACCOUNTS. S HE HAS JUST CLAIMED LOSS BY WAY OF SUBMISSION. FACTUM OF LOSS WAS NOT PROVED B EFORE THE AO. THE LD.AO DID NOT TAKE COGNIZANCE OF HER BALD SUBMISSIO NS. LOSS HAS NOWHERE BEEN ASSESSED. IN SUCH SITUATION, HOW AN ASSESSEE CAN CLAIM SET OFF AGAINST OF THIS ALLEGED INCOME UNDER ANY OTHER HEAD AGAINST SU CH UNVERIFIED UNCLAIMED LOSS. THEREFORE, THE LD.REVENUE AUTHORITIES HAVE R IGHTLY NOT GRANTED ANY SET OFF SUCH LOSS TO THE ASSESSEE. I DO NOT FIND ANY M ERIT IN THIS APPEAL OF THE ASSESSEE. IT IS DISMISSED. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMISS ED. ORDER PRONOUNCED IN THE COURT ON 4 TH OCTOBER, 2016 AT AHMEDABAD. SD/- (RAJPAL YADAV) JUDICIAL MEMBER AHMEDABAD; DATED 04/10/2016