Dr. Jitendra Bandu Bhosale, Kolhapur V. Income-tax Officer,

ITA 1999/PUN/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 1590 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 7 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-07-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 05-07-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 13-11-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SAMRAT RAHI
• Keywords: Unexplained investment; Gift; Opportunity of being heard; Peak credit
• Section: 234B; 68

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE . . , ! , # $ BEFORE SHRI R.K. PANDA, AM AND SHRI VIKAS AWASTHY, JM . / ITA NO.1999/PN/2013 #& & / ASSESSMENT YEAR : 2009-10 DR. JITENDRA BANDU BHOSALE, 1460-C, GALA NO.7, LAXMIPURI, KOLHAPUR 416 002 PAN NO. AJEPB7494A . / APPELLANT V/S ITO, WARD-1(1), KOLHAPUR . / RESPONDENT / APPELLANT BY : NONE / RESPONDENT BY : SHRI SAMRAT RAHI / ORDER PER R.K.PANDA, AM : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 18-01-2012 OF THE CIT(A), KOLHAPUR RELATING TO ASS ESSMENT YEAR 2009-10. 2. DESPITE SERVICE OF NOTICE NONE APPEARED ON BEHALF OF THE ASSESSEE. IT WAS SEEN FROM THE ORDER SHEET ENTRIES TH AT WHEN THE MATTER WAS FIXED FOR HEARING ON 15-02-2016 THE LD. COUN SEL FOR THE ASSESSEE SHRI M.K. KULKARNI INFORMED THE BENCH THAT HE IS WITHDRAWING HIS POWER OF ATTORNEY. ACCORDINGLY, FRESH NOTIC E WAS ISSUED FIXING THE HEARING ON 04-05-2016. THE NOTICE WAS ISSUED THROUGH RPAD. HOWEVER, THE POSTAL AUTHORITIES RETURNED THE NOTICE / DATE OF HEARING :05.07.2016 / DATE OF PRONOUNCEMENT: 08.07.2016 2 ITA NO.1999/PN/2013 WITH A REMARK NOT KNOWN. THEREFORE, THE CASE WAS ADJ OURNED TO 05- 07-2016 BY ISSUE OF FRESH NOTICE. HOWEVER, WHEN THE NAME OF THE ASSESSEE WAS CALLED NONE APPEARED ON BEHALF OF THE ASSES SEE NOR ANY PETITION SEEKING ADJOURNMENT OF THE APPEAL WAS FILED. IT W AS FURTHER SEEN FROM THE ORDER OF THE CIT(A) THAT DESPITE REPEATED OPPORTUNITIES GRANTED BY HIM THERE WAS NON-COMPLIANCE FOR WHICH HE HAS PASSED EXPARTE ORDER. UNDER THESE CIRCUMSTANCES AND AFTER CO NSIDERING THE TOTALITY OF THE FACTS OF THE CASE WE PROCEED TO DECIDE TH E APPEAL ON THE BASIS OF MATERIAL AVAILABLE ON RECORD. 3. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESSEE IS A N INDIVIDUAL AND DOCTOR BY PROFESSION. HE FILED HIS RETURN OF INCOME ON 16-10-2009 DECLARING TOTAL INCOME OF RS.2,44,890/-. DURING THE COURSE O F ASSESSMENT PROCEEDINGS THE AO NOTED THAT THE ASSESSE E HAS DEPOSITED AN AMOUNT OF RS.23,13,000/- IN HIS SAVINGS BANK ACCOUNT MA INTAINED WITH BANK OF MAHARASHTRA, TARABAI PARK BRANCH AND HAS ALSO DEPOSITED AN AMOUNT OF RS.3,33,000/- IN SAVINGS BANK ACCOU NT MAINTAINED WITH STATE BANK OF INDIA. HE, THEREFORE, ASKED TH E ASSESSEE TO EXPLAIN THE SOURCE OF THESE CASH DEPOSITS IN THE ABOV E BANK ACCOUNTS. IT WAS EXPLAINED BY THE ASSESSEE THAT THE JO INT BANK ACCOUNT AT BANK OF MAHARASHTRA IS OPERATED BY THE ASS ESSEE AND HIS SPOUSE WHO IS ENGAGED IN FILM AND CD MUSIC PRODUCTION. TH E AO, THEREAFTER, ASKED THE ASSESSEE TO EXPLAIN THE SOURCE OF CASH DEPOSITS IN THE ABOVE BANK ACCOUNT AND INFORMATION REGARDING UNSECU RED LOANS, REASONS FOR DECREASE IN GP, LOW HOUSEHOLD WITHDRAWAL, NUMB ER OF CARS SOLD ETC. THE ASSESSEE REITERATED THE SAME SUBMISSIONS AS MADE EARLIER. THE AO, THEREFORE, AGAIN ASKED THE ASSESSEE TO E XPLAIN THE SOURCE OF CASH DEPOSITS IN THE BANK ACCOUNTS. IT WAS S UBMITTED THAT AN AMOUNT OF RS.9,42,980/- DEPOSITED BY THE ASSESSEE IS OUT OF SALE PROCEEDS OF RS.7,96,980/-, SALE OF CAR RS.92,000/- AND SALE O F GOLD 3 ITA NO.1999/PN/2013 ORNAMENT RS.54,000/-. THE AMOUNT OF RS.14,06,920/- HAS BE EN DEPOSITED BY THE SPOUSE OF THE ASSESSEE WHICH IS OUT OF SALE PROCEEDS OF CD CASSETTES AMOUNTING TO RS.13,52,250/- AND OPENING C ASH BALANCE OF RS.1,50,000/-. SINCE THE ASSESSEE COULD NOT SA TISFACTORILY EXPLAIN THE ABOVE ENTRIES BY PRODUCING NECESSARY EVIDENC E FOR SALE OF MOTOR CAR, SALE OF GOLD ORNAMENTS, SALE OF CD CASSETTES BY HIS SPOUSE, THE AO MADE ADDITION OF RS.18,49,020/- U/S.69B OF THE ACT O N ACCOUNT OF UNEXPLAINED CASH DEPOSITS IN BANK ACCOUNT. 4. SIMILARLY, THE AO MADE ADDITION OF RS.8,55,243/- U/S.69B ON ACCOUNT OF UNEXPLAINED INVESTMENT IN INSURANCE PREMIUM S INCE THE ASSESSEE COULD NOT EXPLAIN THE SOURCE FOR SUCH DEPOSITS TOWARDS LIC PREMIUM. FURTHER, IN ABSENCE OF ANY SATISFACTORY EXPLANATIO N REGARDING UNSECURED LOAN THE AO MADE ADDITION OF RS.3,21,0 00/- U/S.68 OF THE I.T. ACT. THE AO ALSO MADE ADDITION OF RS.2,70 ,000/- ON ACCOUNT OF DIFFERENCE IN BALANCE IN OPENING AND CLOSING BALANC E IN THE CAPITAL BALANCE, RS.47,400/- ON ACCOUNT OF UNEXPLAINED INVES TMENT IN FLAT U/S.69B AND RS.54,880/- ON ACCOUNT OF UNEXPLAINED EXPE NDITURE U/S.69C OF THE I.T;. ACT. THE AO ALSO MADE ADDITION OF RS.64 4/- ON ACCOUNT OF INTEREST ON SAVINGS BANK ACCOUNT WHICH WAS N OT DISCLOSED BY THE ASSESSEE AFTER ALLOWING DEDUCTION U/S.80C ETC. THE AO DETERMINED THE TOTAL INCOME OF THE ASSESSEE AT RS.28,99,32 0/- AS AGAINST THE RETURNED INCOME OF RS.2,44,890/-. SINCE THERE WAS NON- COMPLIANCE BEFORE THE LD.CIT(A). THE LD.CIT(A) AFTER CONSIDERIN G THE MATERIAL AVAILABLE ON RECORD DISMISSED THE APPEAL FILED BY THE ASSESSEE BY PASSING A VERY ELABORATE ORDER. 5. AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE ASSESSEE IS IN APPEAL BEFORE US WITH THE FOLLOWING GROUNDS : 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A)-KOLHAPUR WAS NOT JUSTIFIED IN PASSING EXPARTE AP PEAL ORDER WITHOUT 4 ITA NO.1999/PN/2013 AFFORDING PROPER OPPORTUNITY OF BEING HEARD. ON EAR LIER FOUR DATES OF HEARINGS MENTIONED ON PAGE 2, THERE ADJOURNMENTS WERE SOUGHT . AGAINST THE DATE OF HEARING ON 26-06-2013 IT IS MENTIONED 'U NDERSIGNED WAS ON LEAVE'. THE SUBSEQUENT HEARING ON 10-07-2013 COULD NO T BE ATTENDED BY AR OF THE ASSESSEE AT KOLHAPUR . THE LD. CIT(A) MENTIONED ABOUT HEARING ON 07-08-2013 THE UNDERSERVED REMARK 'PERSON FROM OFF ICE OF AR, PRESENTED HIMSELF WITHOUT AUTHORIZATION AND WAS NOT EN TERTAINED. IN VIEW OF THIS THE APPEAL ORDER IS NOT JUDICIOUS ORDER' AND I T BE SET ASIDE. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LA W THE LD. CIT(A) - KOLHAPUR DID NOT PASS A 'SPEAKING ORDER' AS MANDATED BY S. 254(6) OF THE ACT. THE PERUSAL OF THE APPEAL ORDER WOULD SHOW THAT AFTER REPRODUCING THE GROUNDS OF APPEAL RAISE, THE PARA NOS. 4 TO 4.11 A RE DEVOTED REPRODUCING THE ORDER OF THE A.O. THE PARA NOS. 5 T O 17 OF THE APPEAL ORDER SIMPLY CONFIRMS THE ADDITIONS MADE BY THE A.O. BUT WIT HOUT PROPERLY APPRECIATING THE WRITTEN SUBMISSIONS OF THE ASSESSEE. THE LD. CIT(A) FAILED TO APPLY HIS MIND WHILE CONFIRMING THE ADDITIONS MADE BY THE A.O. AND THE ADDITIONS BE SET ASIDE. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LA W THE LD. CIT(A) CONFIRMED THE ADDITION RS. 18,49,020/- MADE BY A.O. UNDER SECTION 69B OF THE ACT, BEING CASH DEPOSITED INTO BANK ACCOUNT BUT W ITHOUT CONSIDERING THE WITHDRAWALS FROM THE SAME A CCOUNT FOR EXPENSES. THE ASSESSEE HAD SUBMITTED DETAILED WRITTEN SUBMISSIONS BEFORE CIT(A) IN THIS RESPECT. SINCE THE APPEAL ORDER IS WITHOUT CONSIDERING THE WRI TTEN ARGUMENTS THE APPEAL ORDER IS NOT IN CONSONANCE WITH THE PROVISIONS O F LAW. IT BE SET ASIDE. 4. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LA W THE LD. CIT(A)-KOLHAPUR WAS NOT JUSTIFIED IN CONFIRMING THE ADDITION OF RS.85,243/- MADE BY A.O. U/S. 69B OF THE ACT WITHOUT PROPERLY APPRECIATING THE WRITTEN SUBMISSIONS SUBMITTED BEFORE HI M. THE ADDITION BE DELETED. 5. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LA W THE LD. CIT(A)-KOLHAPUR WAS NOT JUSTIFIED IN CONFIRMING THE ADDITION OF RS.3,21,000/- MADE BY A.O. U/S. 68 OF THE ACT WITHOUT PROPERLY APPRECIATING THE WRITTEN SUBMISSIONS SUBMITTED BEFORE HI M. THE ADDITION BE DE L ETED. 6. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LA W THE LD. CIT(A)-KOLHAPUR WAS NOT JUSTIFIED IN CONFIRMING THE ADDITION OF RS.54,850/- MADE BY A.O. U/S. 69B OF THE ACT WITHOUT PROPERLY APPRECIATING THE WRITTEN SUBMISSIONS SUBMITTED BEFORE HI M. THE ADDITION BE DELETED. 7. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LA W THE LD. CIT(A) - KOLHAPUR WAS NOT JUSTIFIED IN CONFIRMING THE ADDITIO N OF RS.2,70,000/- MADE BY A.O. ON ACCOUNT OF ALLEGED DIF FERENCE IN BALANCE SHEET WITHOUT PROPERLY APPRECIATING THE WRITTEN SUBMI SSIONS SUBMITTED BEFORE HIM. THE ADDITION BE DELETED. 8. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LA W THE LD.CIT(A)- KOLHAPUR WAS NOT JUSTIFIED IN CONFIRMING THE ADDITION OF RS. 47,400/- MADE BY A.O. OF THE ACT WITHOUT PROPERLY APPRECIATING TH E WRITTEN SUBMISSIONS SUBMITTED BEFORE HIM. THE ADDITION BE DELETED . 5 ITA NO.1999/PN/2013 9. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW THE LEVY OF INTEREST U/S.234A, 234B AND 234C IS NOT JUSTIFIED. THE LEVY OF INTEREST BE QUASHED. 10. THE APPELLANT CRAVES/LEAVE TO ADD, AMEND OR ALTE R ANY OF THE ABOVE GROUNDS OF APPEAL. 6. WE HAVE PERUSED THE MATERIAL AVAILABLE ON RECORD AND HEARD THE LD. DEPARTMENTAL REPRESENTATIVES. WE DO NOT FIND ANY INFIRM ITY IN THE ORDER OF THE CIT(A). SO FAR AS ADDITION OF RS.18,49,020/- IS CONCERNED THE LD.CIT(A) UPHELD THE ACTION OF THE AO BY OBSERVING AS UNDER : 5. THUS, IT IS SEEN FROM THE ASSESSMENT PROCEEDINGS NARRAT ED BY THE ASSESSING OFFICER AS REPRODUCED, THE ASSESSING OFFICER HAS RE PEATEDLY ASKED THE APPELLANT TO FURNISH DETAILS AS PER VARIOUS LETTER S. ONUS WAS ON THE APPELLANT TO FURNISH DETAILS AND DOCUMENTS TO SUBSTANTIA TE THE FIGURES OF INCOME AND EXPENDITURE FILED WITH THE RETURN OF INC OME. THE ASSESSING OFFICER, DURING THE COURSE OF ASSESSMENT ASKED THE APPELL ANT TO FURNISH VARIOUS DETAILS/INFORMATION ETC. AFTER THIS, VIDE QUE STIONNAIRE DATED 01/07/2011 DETAILS AND SOURCE OF CASH DEPOSITS IN BANK A CCOUNTS WERE REQUISITIONED. THEN, LETTERS DATED 29/08/2011 AND 27/ 09/2011 WERE ISSUED, CALLING FOR INFORMATION. IN RESPONSE TO ALL THE SE LETTERS ASKING THE APPELLANT REPEATEDLY TO FURNISH DETAILS AND DOCUMENTS WHAT THE APPELLANT HAS SUBMITTED IS THAT THE CASH DEPOSITS IN BANK ACCOUNTS A RE MADE BY HIMSELF AND HIS WIFE. THAT HE HAS NO DOCUMENTS REGARDIN G SALE OF CAR AND SALE OF GOLD ORNAMENTS, THE PROCEEDS OF WHICH HAVE BEE N DEPOSITED. HIS WIFE HAS BEEN MAKING EXPENSES FROM 2001-02 TO 2008-09 WITHOUT SALE OF ANY CASSETTES AND IN THE END THE APPELLANT OFFERS RS.5,6 9,742/- INCLUDING PEAK BALANCE IN THE BANK ACCOUNT AS ADDITIONAL INCOM E TO BUY PEACE. 6. IN THE APPELLATE PROCEEDINGS ALSO, THE APPELLANT D OES NOT TAKE THE BENEFIT OF REPEATED OPPORTUNITIES OFFERED TO HIM TO EXPLAIN HIS CASE AND FURNISH EVIDENCE OF CASH DEPOSIT. IT WAS STATED THAT THE APPELL ANT IS A DOCTOR BY PROFESSION AND IT IS REMOTELY IMPOSSIBLE FOR HIM TO CARR Y ON THE BUSINESS OF FILM AND MUSIC CD. THE LEARNED ASSESSING OFFICER SHOULD HAVE EXAMINED WIFE OF APPELLANT WHO SAYS THAT THE CASH WAS FROM HER B USINESS OF PRODUCTION OF CD. THE APPELLANT HAS MISSED THE POINT T HAT WIFE OF THE APPELLANT IS HER WITNESS AND NOT ASSESSING OFFICER'S WITNESS. IT IS THE APPELLANT WHO CLAIMED WITHOUT ANY SUPPORTING DOCUMEN TS THAT PART OF THE CASH WAS DEPOSITED BY HIS WIFE. THE ONUS IS ON THE APPELL ANT TO ESTABLISH THE GENUINENESS OF SOURCE OF CASH DEPOSIT BY FURNISHING SU ITABLE EVIDENCE / WITNESSES OR PRODUCING HIS WIFE FOR EXAMINATION. THE APPELLANT HAS FAILED TO PRODUCE HIS WIFE IF HE CLAIMS THAT CASH HAS COME FRO M HER. HAVING FAILED TO DO SO BEFORE THE ASSESSING OFFICER, HE HAD ANOTHER OP PORTUNITY TO SUBSTANTIATE HIS CASE BEFORE THE UNDERSIGNED. HAVING FAI LED TO DO SO, THE FACTS BEFORE THE UNDERSIGNED ARE THE SAME AS THOSE BEFO RE THE ASSESSING OFFICER THAT THE CASH HAS BEEN DEPOSITED IN THE BANK A CCOUNTS BELONGING TO APPELLANT, THE SOURCE OF WHICH IS NOT EXPLAINED. ON T HESE FACTS, I HAVE NO OPTION BUT TO SUSTAIN THE ADDITION MADE BY THE ASSESSING OFFICER. THE GROUND IS REJECTED. 6 ITA NO.1999/PN/2013 7. SO FAR AS THE ADDITION OF RS.85,243/- U/S.69B OF THE I. T. ACT IS CONCERNED THE LD.CIT(A) UPHELD THE ADDITION MADE BY THE AO ON THE GROUND THAT THERE WAS NO EXPLANATION TO SUBSTANTIATE T HE LIC PREMIUM OF RS.85,243/- ESPECIALLY WHEN THE TOTAL WITHDRAWAL SHOWN B Y THE ASSESSEE IN THE CAPITAL ACCOUNT IS ONLY RS.1,45,398/- WHICH IS NOT EVEN SUFFICIENT TO MEET THE HOUSEHOLD EXPENSES. SO FAR AS THE ADDITION OF RS.3,21,000/- U/S.68 OF THE ACT IS CONCERNED, HE UPHELD THE ADDITION MADE BY THE AO ON THE GROUND THAT THERE WAS NOTHING IN THE RETURN OF INCOME OF HIS WIFE TO SUPPORT THE CLAIM THAT SHE HAS GIVEN GIFT TO HER HUSBAND. THE ASSESSEE WAS NOT PREVENTED FROM FURNISHIN G ANY DOCUMENT HE WISHES TO FURNISH IN SUPPORT OF HIS CLAIM. AS REGARDS THE ADDITION OF RS.54,850/- U/S.69B IS CONCERNED THE LD.CIT(A) U PHELD THE ADDITION MADE BY THE AO ON THE GROUND THAT ASSESSEE H AS PURCHASED THE FLAT DURING THE YEAR FOR WHICH RS.54,880/- WAS SPENT O N STAMP DUTY, REGISTRATION CHARGES AND COPYING CHARGES ETC. SINC E THE SAME WAS NEITHER SHOWN BY THE ASSESSEE NOR BY HIS SPOUSE IN THEIR RESPECTIVE RETURN OF INCOME AND NO EVIDENCE WAS PRODUCE D TO SUBSTANTIATE THIS EXPENDITURE HE SUSTAINED THE ADDITION M ADE BY THE AO. AS REGARDS THE ADDITION OF RS.2,70,000/- ON ACCOUNT OF DIFFERENCE IN OPENING AND CLOSING BALANCES IS CONCERNED HE UPHELD THE ADDITION MADE BY THE AO ON THE GROUND THAT THE CLOSING BALANCE OF CAPITAL AS ON 31-03-2008 WAS SHOWN AT RS.2,91,320/- WHEREAS THE OPEN ING BALANCE AS ON 01-04-2008 WAS SHOWN AT RS.5,61,320/-. THE ASSE SSEE COULD NOT EXPLAIN THE DIFFERENCE OF RS.2,70,000/- FOR WHICH HE SUSTA INED THE ADDITION. SO FAR AS THE ADDITION OF RS.47,400/- U/S.69B IS C ONCERNED HE UPHELD THE ADDITION ON THE GROUND THAT THE VALUE OF FLAT AS PER REGISTERED SALE DEED DATED 22-01-2009 WAS RS.12 LAKHS W HEREAS THE ASSESSEE HAS SHOWN SUCH INVESTMENT BY HIMSELF AND IN THE NAME OF 7 ITA NO.1999/PN/2013 HIS SPOUSE AT RS.11,52,600/-. SINCE THE DIFFERENCE COULD NOT BE EXPLAINED THE ADDITION WAS SUSTAINED BY THE CIT(A). 8. IN VIEW OF THE ABOVE DISCUSSION AND THE ELABORATE ORD ER PASSED BY THE LD.CIT(A) WE DO NOT FIND ANY INFIRMITY IN HIS ORDER. A CCORDINGLY, WE UPHOLD THE SAME AND THE GROUNDS RAISED BY THE ASSE SSEE ARE DISMISSED. 9. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 08-07-2016. SD/- SD/- (VIKAS AWASTHY) (R.K. PANDA) JUDICIAL MEMBER ACCOUNTANT MEMBER PUNE; ' DATED :08 TH JULY, 2016. ) *#,! -!/ COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3 . THE CIT(A ) - I & II , KOLHAPUR 4. 5. 6. THE CIT CENTRAL, PUNE $ ''( , ( , / DR, ITAT, B PUNE; + / GUARD FILE. / BY ORDER, // TRUE COPY // // $ ' //TRUE -. ' ( / SR. PRIVATE SECRETARY ( , / ITAT, PUNE