I.M.Farvis Ahmed, CHENNAI V. ITO, CHENNAI

ITA 1995/CHNY/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 4031 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-07-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 10-07-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 01-07-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: B SAGADEVAN JCIT D R
• Assessee Lawyers: K MEENAKSHISUNDARAM ITP
• Keywords: Unexplained investment; Onus to prove
• Section: 69

Judgement Text

, C/ SMC , IN THE INCOME TAX APPELLATE TRIBUNAL C/SMC BENCH, CHENNAI . , BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER I.T.A.NO.1995 /MDS./2016 ( ASSESSMENT YEAR : 2009-10) SRI I.M.FARVIS AHMED , NO.21/18, PERIYAR , 2 ND CROSS TMP NAGAR, PADI STREET, CHENNAI 600 050. VS. THE INCOME TAX OFFICER, BUSINESS WARD III(4), CHENNAI. PAN AAHFS 6094 F ( / APPELLANT ) ( / RESPONDENT ) / APPELLANT BY : MR.K.MEENAKSHI SUNDARAM, ITP / RESPONDENT BY : MR.B.SAGADEVAN, JCIT, D.R ! ' / DATE OF HEARING : 10.07.2017 #$%& ! ' /DATE OF PRONOUNCEMENT : 24.07.2017 / O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER: THIS APPEAL IS FILED BY THE ASSESSEE, AGGRIEVED BY THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX(A)-7, CHENNA I DATED 28.04.2016 PERTAINING TO ASSESSMENT YEAR 2009-10. 2. THE ASSESSEE RAISED THE GROUNDS WITH REGARD TO SUSTAINING ADDITION OF ` 6,01,489/-, WHICH IS FOR CASH DEPOSITED INTO SAVIN GS ITA NO. 1995/MDS/2016 2 BANK ACCOUNT AND A SUM OF ` 9,40,000/-, WHICH IS BEING THE AMOUNT DEPOSITED INTO CURRENT ACCOUNT OF THE ASSESSEE. 3. THE FACTS OF THE CASE ARE THAT THE ASSESSEE IS AN INDIVIDUAL, EARNING INCOME FROM SNACK BAR BUSINESS AND TRADING IN EDIBLE ESSENCES. SUBSEQUENTLY, THE CASE WAS SELECTED FOR S CRUTINY AND NOTICE U/S.143(2) WAS ISSUED ON 14.06.2011. IN RESP ONSE, THE LD.A.R SUBMITTED P&L ACCOUNT AND BALANCE SHEET OF THE ASS ESSEE. DURING THE ASSESSMENT PROCEEDINGS, THE AO FOUND THAT AS PE R THE AIR INFORMATION, THE ASSESSEE HAS MADE CASH DEPOSITS OF ` 41,80,050/- DURING THE YEAR 2008-09 IN SB ACCOUNT WITH M/S.AXIS BANK AND HAS MADE SOME CASH DEPOSITS IN HIS CURRENT ACCOUNT WITH ICICI BANK AND PAID AN AMOUNT OF ` 2,38,373/- FOR CREDIT CARD EXPENSES. AS PER THE BALANCE SHEET SUBMITTED BY THE ASSESSEE, IT IS SEEN THAT ONLY THE SB ACCOUNT BALANCE IS APPEARING IN IT AND NOT THE CURR ENT ACCOUNT BALANCE. THE TURNOVER DISCLOSED BY THE ASSESSEE IS ` 36,95,366/-. ON VERIFICATION OF THE BANK ACCOUNT OF THE ASSESSEE AT AXIX BANK, THE AO FOUND TOTAL DEPOSITS OF ` 42,96,735/-, OUT OF WHICH ` 41,80,050/- WAS DEPOSITED IN CASH. THE AO HAS TREATED AN AMOUNT OF ` 6,01,489/- BEING THE DIFFERENCE IN THE AMOUNT CREDITED IN THE BANK AND THE ITA NO. 1995/MDS/2016 3 AMOUNT SHOWN AS TURNOVER AS CASH CREDITS. FURTHER, ACCORDING TO AO, THE DEPOSIT OF CASH INTO THE ICICI BANK OF ASSESSEE AGGREGATING TO ` 9,40,000/- WAS ADDED TO THE TOTAL INCOME OF ASSESSE E , IN THE ABSENCE OF PRODUCTION OF BANK STATEMENT, BOOKS OF ACCOUNT AND ANY CREDIBLE INFORMATION WITH REGARD TO THE SOURCE OF T HE AFORESAID DEPOSITS. ANOTHER AMOUNT OF ` 66,728/- WAS ADDED TO THE TOTAL INCOME OF ASSESSEE ON ACCOUNT OF INSUFFICIENT DRAWI NGS. AGGRIEVED BY THE ORDER OF LD. ASSESSING OFFICER, THE ASSESSEE CA RRIED THE APPEAL BEFORE THE LD.CIT(A). 3.1 ON APPEAL, THE CIT(A) CONFIRMED THE ORDER OF T HE AO BY OBSERVING THAT THIS IS BEING AN UNEXPLAINED BANK DE POSIT AND THE ASSESSEE COULD NOT PRODUCE ANY COGENT EVIDENCE TO E XPLAIN THE SOURCE OF THE SAME. AGAINST THE ORDER OF LD.CIT(A) , NOW THE REVENUE/ASSESSEE IS IN APPEAL BEFORE US. 4. BEFORE US, THE LD.A.R SUBMITTED THAT THESE DEPO SITS WERE MADE OUT OF DISCLOSED SALES TURNOVER, BEING SO, ONLY GP ON IT TO BE ESTIMATED. FURTHER, HE SUBMITTED THAT IN TERMS OF S EC.285A OF THE ACT, ANNUAL INFORMATION RETURN SHOULD REPORT ONLY THE CA SH DEPOSITS IN A SAVINGS BANK ACCOUNT FOR ASSESSMENT PURPOSES AND A NY CASH ITA NO. 1995/MDS/2016 4 DEPOSITS INTO THE CURRENT ACCOUNT CANNOT BE CONSIDE RED FOR MAKING ASSESSMENT AS UNEXPLAINED INVESTMENT. 5. ON THE OTHER HAND, LD.D.R RELIED ON THE ORDER O F LOWER AUTHORITIES AND SUBMITTED THAT THESE DEPOSITS IS UN DISCLOSED SALES TURNOVER OF THE ASSESSEE AND THE ASSESSEE HAS ALREA DY ACCOUNTED FOR PURCHASE AND EXPENSES RELATING TO THESE TURNOVERS A ND HENCE, THE ENTIRE AMOUNT OF UNEXPLAINED DEPOSITS INTO SAVINGS BANK ACCOUNT AS WELL AS CURRENT ACCOUNT IS TO BE CONSIDERED AS UNEX PLAINED INCOME OF ASSESSEE U/S.69 OF THE ACT. 6. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. IN THE PRESENT CASE, THE AMOUNT OF ` 6,01,489/- REPRESENTS THE UNEXPLAINED DEPOSIT INTO SAVING BANK ACCOUNT OF THE ASSESSEE AND ANOTHER AMOUNT OF ` 9,40,000/- REPRESENTS THE UNEXPLAINED CASH DEPOSIT INTO CURRENT ACCOUNT OF ASSESSEE. SECTION -69 MAKES IT CLEAR THAT ONUS IS ON THE ASSESSEE AS REGARDS FURNISHING OF EXPLANATION RELATING TO DEPOSITS, WHICH IS NOT RECORDED IN THE BOOKS OF ACCOUNTS, IF ANY, MAINTAINED BY THE ASSESSEE. WHERE THE ASSESSE E OFFERS NO EXPLANATION OR WHERE THE EXPLANATION OFFERED BY THE ASSESSEE IS NOT SATISFACTORY IN THE AOS OPINION, THE VALUE OF THE UNEXPLAINED ITA NO. 1995/MDS/2016 5 INVESTMENTS, THE VALUE OF THE UNEXPLAINED INVESTMEN TS WOULD BE TREATED AS INCOME OF THE FINANCIAL YEAR IN QUESTION . WHENEVER EXPLANATION OFFERED BY THE ASSESSEE WERE NOT FULLY RELIED UPON BY THE DEPARTMENT, IT CANNOT BE SAID THAT THE DEPARTMENT H AD ANY FURTHER BURDEN TO PROVE THAT THIS WAS AN INCOME OF ASSESSEE . WHERE THE ASSESSEE HAD FAILED TO PROVE THE SOURCE OF INVESTME NTS TO THE SATISFACTION OF THE AO, THE AO SHOULD BE JUSTIFIED IN TREATING THE SAME AS UNEXPLAINED INVESTMENT U/S.69 OF THE ACT. 6.1 IN THE PRESENT CASE, THE PLEA OF ASSESSEE IS T HAT IT IS THE PART OF THE UNDISCLOSED TURNOVER AND BEING SO, ONLY GP OF S UCH TO BE ESTIMATED AS INCOME OF ASSESSEE. THE ASSESSEE, BEF ORE US, WAS NOT ABLE TO SHOW THE DETAILS OF THE SALES MADE BY THE A SSESSEE WITH REFERENCE TO ANY PURCHASE. IN OTHER WORDS, IN MY OP INION, AS RIGHTLY POINTED OUT BY THE LD.D.R, ALL THE PURCHASES AND E XPENDITURE ALREADY RECORDED BY THE ASSESSEE IN ITS BOOKS OF ACCOUNTS A ND ONCE THE PURCHASES AND EXPENSES WERE ALREADY RECORDED BY THE ASSESSEE IN HIS BOOKS OF ACCOUNTS, THERE IS NO QUESTION OF ESTI MATING ANY INCOME. ON SUCH DEPOSITS MADE INTO BANK ACCOUNT, THE ENTIRE UNACCOUNTED ITA NO. 1995/MDS/2016 6 DEPOSITS TO BE CONSIDERED AS UNEXPLAINED INCOME OF ASSESSEE U/S.69OF THE ACCOUNT. 6.2 ANOTHER ARGUMENT OF THE LD.A.R IS THAT SEC.285 A PROVIDES ONLY INFORMATION WITH REGARD TO CASH DEPOSIT INTO SB A/C AND IT DOES NOT AUTHORIZE THE AO TO COLLECT INFORMATION WITH REFERE NCE TO CURRENT ACCOUNT. IN MY OPINION, ADDITION MADE BY THE AO U/S .69 OF THE ACT AS EXPLAINED EARLIER. SECTION 69 AUTHORIZES THE AO TO CONSIDER UNEXPLAINED DEPOSITS INTO BANK ACCOUNT, WHENEVER AS SESSEE FAILED TO EXPLAIN THE SOURCE OF SUCH DEPOSITS. BEING SO, I DO NOT FIND ANY INFIRMITY IN THE ORDER OF LOWER AUTHORITIES AND THE SAME IS CONFIRMED. HENCE, THE GROUNDS RAISED BY THE ASSESSEE STAND REJ ECTED. 7. IN THE RESULT, THE APPEAL OF ASSESSEE IS DISMIS SED. ORDER PRONOUNCED IN THE OPEN COURT ON 24 TH JULY, 2017. SD/- ( ) ( CHANDRA POOJARI ) /ACCOUNTANT MEMBER DATED THE 24 TH JULY, 2017 AT CHENNAI . K S SUNDARAM. ' ( )!*+ ,+%! / COPY TO: 1 . / APPELLANT 3. ' ' -! () / CIT(A) 5. +0 1 )!)23 / DR 2. / RESPONDENT 4. ' ' -! / CIT 6. 1 45 6 / GF