M.Babulal Gulecha, CHENNAI V. ACIT, CHENNAI

ITA 1993/CHNY/2011

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 68665 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 8 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-08-2013
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 13-08-2013
• Assessment Year: 2006-2007
• Appeal Filed On: 09-12-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: T N BETGIRI
• Assessee Lawyers: T VASUDEVAN

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : CHENNAI [BEFORE DR. O.K. NARAYANAN, VICE PRESIDENT & SHRI VIKAS AWASTHY, JUDICIAL MEMBER] I.T.A. NO. 1993/MDS/2011 ASSESSMENT YEAR : 2006-07 SHRI M. BABULAL GULECHA, 390/2, MINT STREET, SOWCARPET, CHENNAI 600 079. [PAN: AACPG 7222 Q] VS ASST. COMMISSIONER OF INCOME TAX, BUSINESS CIRCLE-X, KANNAMMAI BUILDING, CHENNAI 600 006. I.T.A. NO. 1994/MDS/2011 ASSESSMENT YEAR : 2006-07 SHRI M. BHAGIACHAND GULECHA, 390/2, MINT STREET, SOWCARPET, CHENNAI 600 079. [PAN: AACPG 7201 K] VS ASST. COMMISSIONER OF INCOME TAX, BUSINESS CIRCLE-X, KANNAMMAI BUILDING, CHENNAI 600 006. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI T.VASUDEVAN, ADVOCATE RESPONDENT BY : SHRI T.N.BETGIRI, JCIT DATE OF HEARING : 13-08-2013 DATE OF PRONOUNCEMENT : 28-08-2013 O R D E R PER VIKAS AWASTHY, JUDICIAL MEMBER: THE AFORESAID APPEALS HAVE BEEN FILED BY THE ASSES SEES AGAINST THE COMMON ORDER OF THE COMMISSIONER OF INC OME TAX I.T.A. NOS. 1993-1994/MDS/2011 2 (APPEALS)-IV, CHENNAI DATED 29-09-2011. SINCE THE ISSUE INVOLVED IN BOTH THE APPEALS IS COMMON, BOTH THE APPEALS ARE TAKEN UP TOGETHER FOR ADJUDICATION. IN BOTH THE CASES, ADDI TION OF ` 12,55,000/- AND 14,37,000/- RESPECTIVELY HAS BEEN M ADE BY THE ASSESSING OFFICER ON ACCOUNT OF UN-EXPLAINED SOURCE OF CASH DEPOSITS MADE IN THE BANK ACCOUNT. AGGRIEVED AGAINST THE ADDITIONS MADE BY THE ASSESS ING OFFICER FOR THE AY. 2006-07, BOTH THE ASSESSEES PRE FERRED APPEALS BEFORE THE CIT(APPEALS). THE CIT(APPEALS) AFTER CO NSIDERING THE SUBMISSIONS MADE BY THE AR OF THE ASSESSEE, DISMISS ED BOTH THE APPEALS. AGGRIEVED AGAINST THE ORDER OF THE CIT(APPEALS), T HE ASSESSEES HAVE COME IN SECOND APPEAL BEFORE THE TRI BUNAL. 2. SHRI T. VASUDEVAN, ADVOCATE APPEARING ON BEHALF OF THE ASSESSEES SUBMITTED THAT BOTH THE ASSESSEES HAVE EN TERED INTO AN AGREEMENT OF SALE DATED 14-05-2005 WITH M/S. PENTAG ON GLOBAL SERVICES LIMITED FOR A CONSIDERATION OF ` 40 LAKHS. BOTH THE ASSESSEES I.E., MR. M. BABULAL GULECHA AND MR. M. B HAGIACHAND GULECHA RECEIVED ` 12,00,000/- EACH AS ADVANCE FROM THE PURCHASER IN CASH. THE AMOUNTS WERE DEPOSITED BY T HE ASSESSEES IN THEIR RESPECTIVE BANK ACCOUNTS. SUBSEQUENTLY, T HE AGREEMENT I.T.A. NOS. 1993-1994/MDS/2011 3 WAS CANCELLED AND THE ASSESSEES PAID BACK THE AMOU NTS RECEIVED AS ADVANCES TO M/S. PENTAGON GLOBAL SERVICES LIMITE D AFTER WITHDRAWING THE AMOUNTS FROM THEIR RESPECTIVE BANKS IN CASH. THE ASSESSING OFFICER DID NOT ACCEPT THE VERSION OF THE ASSESSEES AND MADE ADDITION. IN APPEAL, THE CIT(APPEALS) ALSO DI S-BELIEVED THE SUBMISSIONS OF THE ASSESSEES AND DISMISSED THE APPE ALS. THE LD. COUNSEL FOR THE ASSSESSEES SUBMITTED THAT THE AUTHO RITIES BELOW HAVE FAILED TO TAKE INTO CONSIDERATION THE FACT THA T THE AMOUNT WAS DEPOSITED IN THE BANK ACCOUNT AND CORRESPONDING DEB IT ENTRY WAS MADE WHEN THE AMOUNT WAS WITHDRAWN AFTER THE SALE A GREEMENT WAS CANCELLED BETWEEN THE PARTIES. THE LD. COUNSEL FOR THE ASSESSEE CONTENDED THAT THE AFFIDAVIT OF THE DIRECT OR OF THE VENDEE COMPANY WAS FILED BEFORE THE CIT(APPEALS) BUT THE C IT(APPEALS) DID NOT CONSIDER THE SAME. THE AMOUNT DEPOSITED IN THE BANK WAS WITHDRAWN AND RE-PAID TO THE PURCHASER FROM THE SAM E ACCOUNT. 3. ON THE OTHER HAND, SHRI T.N. BETGIRI, APPEARING ON BEHALF OF THE REVENUE SUBMITTED THAT THE ASSESSEES HAVE FAILE D TO PRODUCE ANY COGENT EVIDENCE IN SUPPORT OF THEIR SUBMISSIONS . THE ASSESSEES DID NOT PRODUCE MR. T. MAHADEVAN, DIRECTO R OF THE ALLEGED PURCHASER COMPANY, WHO HAS FILED AFFIDAVIT WHICH STATES THAT THE COMPANY HAD ADVANCED ` 24 LAKHS TO THE ASSESSEES AND I.T.A. NOS. 1993-1994/MDS/2011 4 THE SAME WAS RECEIVED BACK BY THE COMPANY IN MARCH 2006. THE LD. DR FURTHER REFERRED TO THE FINDINGS OF THE ASSE SSING OFFICER WHEREIN IT HAS BEEN CATEGORICALLY STATED THAT THERE IS NO INDICATION IN THE SALE AGREEMENT ABOUT THE MODE OF PAYMENT/RE- PAYMENT AND THERE IS NO DEPOSIT IN THE BANK ON THE CORRESPONDIN G DATE OF RECEIPT OR IN THE SUBSEQUENT DATES, THERE IS NO CASH BOOK T O VERIFY SOURCES OF INFLOW. THE LD. DR STRONGLY SUPPORTED THE ORDER S OF THE AUTHORITIES BELOW AND PRAYED FOR THE DISMISSAL OF T HE APPEAL. 4. WE HAVE HEARD THE SUBMISSIONS MADE BY THE REPRESENTATIVES OF BOTH THE SIDES AND HAVE PERUSED THE ORDERS OF THE AUTHORITIES BELOW. THE LD. COUNSEL FOR THE ASS ESSEE HAS STATED THAT THE AMOUNT WAS RECEIVED BY THE ASSESSEES IN PU RSUANCE TO THE SALE AGREEMENT OF PROPERTY. THE SAID AMOUNTS W ERE DEPOSITED BY THE ASSESSEES IN THEIR RESPECTIVE BANK ACCOUNTS. SUBSEQUENT TO THE CANCELLATION OF SALE AGREEMENT, THE ADVANCE RECEIVED BY THE ASSESSEES WAS REFUNDED TO THE PURCHASER IN CASH AFT ER WITHDRAWING THE AMOUNT FROM THE SAME BANK ACCOUNTS. IN ORDER TO SUPPORT THEIR CONTENTIONS, THE ASSESSEES HAVE PLACE D ON RECORD AN AFFIDAVIT OF THE DIRECTOR OF THE COMPANY ONLY WITH WHOM THE ASSESSEES HAD ENTERED INTO SALE AGREEMENT. WE ARE OF THE OPINION THAT, THE ASSESSEES HAVE NOT BEEN ABLE TO B RING ON RECORD I.T.A. NOS. 1993-1994/MDS/2011 5 ANY COGENT EVIDENCE TO SUPPORT THEIR CONTENTIONS. ALTHOUGH THE AGREEMENT WAS ENTERED INTO BY THE ASSESSEE WITH THE LIMITED COMPANY, NO REASON IS GIVEN AS TO WHY SUCH HUGE PAY MENTS WERE TRANSACTED IN CASH AND NOT THROUGH ANY BANKING CHAN NEL OR INSTRUMENT. AS HAS BEEN POINTED OUT BY THE ASSESSI NG OFFICER, THERE IS NO BANK TRANSACTION CORRESPONDING TO THE D ATE OF RECEIPT OF THE ALLEGED ADVANCE MONEY. THE ASSESSEES HAVE FAIL ED TO PRODUCE THE DIRECTOR OF THE COMPANY WHO HAS EXECUTE D AN AFFIDAVIT TO SUPPORT THE VERSION OF THE ASSESSEES FOR CROSS-E XAMINATION. THE AFFIDAVIT OF THE DIRECTOR OF THE COMPANY IS SKE TCHY AND DOES NOT GIVE THE COMPLETE INFORMATION REGARDING MODE OF PAYMENT ETC., EVEN BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE HA VE NOT BEEN ABLE TO GIVE ANY VALID REASON FOR THE CASH TRANSACT IONS. WE DO NOT FIND ANY MERIT IN THE APPEALS OF THE ASSESSEES. TH EREFORE, BOTH THE APPEALS ARE DISMISSED BEING DEVOID OF MERIT. ORDER PRONOUNCED ON WEDNESDAY, THE 28 TH AUGUST, 2013 AT CHENNAI. SD/- SD/- (DR. O.K. NARAYANAN) (VIK AS AWASTHY) VICE PRESIDENT JUDICIAL MEMBER DATED: 28 TH AUGUST, 2013 TNMM COPY TO: APPELLANT/RESPONDENT/CIT(A)/CIT/DR