Shri Vinod K.Patel, Baroda V. The ACIT.,Cent.Circle-1, Baroda

ITA 2089/AHD/2009

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 51101 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 5 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-12-2011
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 29-12-2011
• Assessment Year: 2001-2002
• Appeal Filed On: 01-07-2009
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: AWIJIT RAKSHIT
• Assessee Lawyers: VIJAY RANJAN
• Keywords: Unexplained expenditure; Source of fund; Additional evidence

Judgement Text

, , , , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD , .. !', #$ # % BEFORE SHRI MUKUL KR.SHRAWAT, JUDICIAL MEMBER AND SHRI B.P.JAIN, ACCOUNTANT MEMBER 1. ./ I.T.A.NO.2089/AHD/2009 - ' ' ' ' ' ' ' ' / A.Y.2001-02 2. ./ I.T.A.NO.2090/AHD/2009 - ' ' ' ' ' ' ' ' / A.Y.2004-05 3. ./ I.T.A.NO.2091/AHD/2009 - ' ' ' ' ' ' ' ' / A.Y.2006-07 4. ./ I.T.A.NO.2649/AHD/2009 - ' ' ' ' ' ' ' ' / A.Y.2001-02 5. ./ I.T.A.NO.2650/AHD/2009 - ' ' ' ' ' ' ' ' / A.Y.2004-05 SHRI VINOD K.PATEL 5, DARSHAN PARK-II, VIP ROAD KARELIBAUG, BARODA ' ' ' ' / / / / VS . ACIT CENTRAL CIRCLE-1 BARODA ( #$ ./ ) ./ PAN/GIR NO. : ADKPP 1888 N ( (* / // / APPELLANT ) .. ( +,(* / RESPONDENT ) (* - # / APPELLANT BY : SHRI VIJAY RANJAN, A.R. +,(* . - # / RESPONDENT BY : SHRI AWIJIT RAKSHIT, SR.D.R. '/ . 0$ / / / / DATE OF HEARING : 29/12/2011 12' . 0$ / DATE OF PRONOUNCEMENT : 30/12/2011 #3 / O R D E R PER BENCH:: ALL THESE 5 APPEALS HAVE BEEN FILED BY THE ASSESSEE ARISING FROM SEPARATE ORDERS OF CIT(A)-IV, AHMEDABAD DATED 13/0 1/2009 IN RESPECT OF THE QUANTUM ADDITION AND DATED 19/03/2009 IN RES PECT OF CONFIRMATION OF PENALTY LEVIED U/S.271(1)(C) OF THE IT ACT. ITA NOS.2089,2090,2091 & 2649-2650/AHD/2009 SHRI VINOD K.PATEL VS. ACIT - 2 - [A] ITA NO.2089/AHD/2009 (A.Y. 2001-02) 2. THE ONLY GROUND IS AS FOLLOWS:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE LEARNED CIT(A) GROSSLY ERRED IN CONFIRMING THE ADDITION OF RS.1,31,000 MADE BY THE ASSESSING OFFICER ON THE ALLEGED GROUND OF UNEXPLAINED EXPENDITURE. 2.1. FACTS IN BRIEF AS EMERGED FROM THE CORRESPONDI NG ASSESSMENT ORDER PASSED U/S.143(3) R.W.S.153A OF THE INCOME-T AX ACT, 1961 DATED 20/12/2007 WERE THAT A SEARCH U/S.132 WAS CARRIED OUT ON THE MANGLA GROUP OF THE ASSESSEE. DURING THE COURSE OF SEARCH , CERTAIN DOCUMENTS WERE SEIZED AND FOR A.Y. 2001-02 IT WAS FOUND THAT PAYMENT OF RS.1,31,000/- WAS MADE IN CASH. IN RESPECT OF TH E SAID AMOUNT, THE EXPLANATION OF THE ASSESSEE WAS THAT IT WAS AN EXPE NDITURE WHICH WAS INCURRED BY HIS LATE FATHER. IN THE ABSENCE OF AN Y EVIDENCE OR EXPLANATION, THE SAID AMOUNT WAS ADDED IN THE RETUR NED INCOME AS AN UNDISCLOSED EXPENDITURE. BEING AGGRIEVED THE MATTE R WAS CARRIED BEFORE THE FIRST APPELLATE AUTHORITY. 3. AFTER HEARING THE SUBMISSIONS OF THE ASSESSEE, L D.CIT(A) HAS CONFIRMED THE ADDITION AS FOLLOWS:- 3.1. I HAVE CAREFULLY CONSIDERED THE CONTENTIONS OF THE LEARNED COUNSEL AS WELL GONE THROUGH THE RECORDS. IT WAS C ONTENDED BY LEARNED COUNSEL THAT THE PAYMENT FOR EXPENSE WAS AC TUALLY MADE OUT OF THE WITHDRAWALS FROM THE BANK ACCOUNT OF HIS FATHER SHRI KIRITBHAI PATEL AND MOTHER SMT. HANSABEN K.PATEL FO R RS.50,700/- AND REMAINING EXPENSE WAS INCURRED BY THE APPELLANT FROM IMPREST CASH BALANCE ON HAND WITH THE WITHDRAWALS M ADE OUT OF HIS IMPREST CASH ACCOUNT LYING WITH MANGLA PROPERTI ES PVT.LTD. ITA NOS.2089,2090,2091 & 2649-2650/AHD/2009 SHRI VINOD K.PATEL VS. ACIT - 3 - HOWEVER, NO EVIDENCE WAS FURNISHED BY THE APPELLANT BEFORE THE ASSESSING OFFICER DURING ASSESSMENT PROCEEDINGS THA T RS.50,700/- WAS INCURRED BY APPELLANTS LATE FATHER ALTHOUGH HE MIGHT BE HAVING HIS SOURCES OF INCOME AS CONTENDED BY LEARNE D COUNSEL. FURTHER, NO EVIDENCE WAS FURNISHED BY THE APPELLANT REGARDING REMAINING PAYMENTS. HENCE, THE CONTENTIONS OF LEAR NED COUNSEL CANNOT BE ACCEDED TO, WHICH ARE HEREBY REJECTED. T HE CASES RELIED UPON BY LEARNED COUNSEL ARE NOT APPLICABLE TO THE F ACTS OF THE PRESENT CASE SINCE FACTS OF THE PRESENT CASE ARE DI FFERENT FROM THE FACTS OF THE CASES RELIED UPON BY LEARNED COUNSEL. KEEPING IN VIEW THE FACTS AND CIRCUMSTANCES OF THE CASE, THE A DDITION MADE IS HEREBY CONFIRMED AND SECOND GROUND OF APPEAL IS DIS MISSED. 4. SINCE THE ADDITION WAS CONFIRMED NOW THE ASSESSE E IS FURTHER IN APPEAL, REPRESENTED BY LD.AR MR.VIJAY RANJAN. FROM THE SIDE OF THE REVENUE, LD.SR.DR MR.AWIJIT RAKSHIT SUPPORTED THE O RDERS OF THE AO AND CIT(A). THE MAIN ARGUMENT OF LD.AR IS THAT THE A SSESSEE HAS RECEIVED A SUM OF RS.2,55,000/- IN CASH ON 24/11/2005, I.E. ON THE DATE OF SEARCH. THROUGH THOSE DOCUMENTS, LD.AR HAS TRIED TO DEMONST RATE THAT OUT OF THE SAID AVAILABLE CASH THE EXPENDITURE WAS INCURRED. MOREOVER, HE HAS ALSO STATED THAT A SUM OF RS.50,700/- WERE CONTRIBUTED B Y APPELLANTS FATHER AND MOTHER. HAVING HEARD THE SUBMISSIONS OF BOTH THE SIDES, WE WANT TO PLACE ON RECORD THAT NO SUCH EVIDENCE WAS FILED BEF ORE THE AO. FURTHER WE MAY LIKE TO MENTION THAT EVEN BEFORE THE FIRST A PPELLATE AUTHORITY THERE WAS NO SUCH EVIDENCE, HENCE THERE WAS NO DISCUSSION IN THE BODY OF THE APPELLATE ORDER. THE ONLY DISCUSSION IS IN RESPECT OF A WITHDRAWAL ALLEGEDLY MADE FROM THE BANK BY THE PARENTS OF THE ASSESSEE OF RS.50,700/-. EVEN THAT EXPLANATION REMAINED UNSUPP ORTED BY ANY COGENT EVIDENCE. IT IS ALSO NECESSARY TO MENTION THAT IT IS NOT THE CLAIM OF THE ASSESSEE THAT THE ACCOUNT IN THE BOOKS OF MANGLA PR OPERTIES PVT.LTD.AS ITA NOS.2089,2090,2091 & 2649-2650/AHD/2009 SHRI VINOD K.PATEL VS. ACIT - 4 - PLACED BEFORE US DURING THE COURSE OF HEARING WAS I N FACT FILED BEFORE THE REVENUE AUTHORITIES AT ANY STAGE OF PROCEEDINGS IN THE CASE OF THE ASSESSEE. NOR THERE IS ANY APPLICATION FOR ADMISSI ON OF ADDITIONAL EVIDENCE. EVEN THE BENCH HAS NOT CALLED FOR ANY SU CH EVIDENCE. SINCE THE EXPLANATION OF THE ASSESSEE WAS MERELY A BOLD E XPLANATION WHICH WAS NOT SUPPORTED BY ANY EVIDENCE, WHAT TO SAY ANY COGE NT EVIDENCE, THEREFORE WE HEREBY CONFIRM THE FACTUAL FINDINGS OF THE AUTHORITIES BELOW AND DISMISS THIS GROUND. FOR THIS YEAR, APPEAL IS DISMISSED. [B] ITA NO.2090/AHD/2009 (A.Y. 2004-05) 5. THE ONLY GROUND READS AS FOLLOWS: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LEARNED CIT(A) GROSSLY ERRED IN CONFIRMING THE ADDITION OF RS.50,000 MADE BY THE ASSESSING OFFICER ON THE ALLEGED GROUND OF U NEXPLAINED INVESTMENT. 5.1. THE AO HAS NOTED THAT ONE FDR BEARING NO.1975 OF RS.50,000/- WAS FOUND IN THE NAME OF ONE SMT.ILA WIFE OF THE AS SESSEE PERTAINING TO THE AY 2004-05. THE EXPLANATION OF THE ASSESSEE WA S THAT CERTAIN WITHDRAWALS FROM THE PPF ACCOUNT IN THE YEAR 2003 W ERE MADE BY THE ASSESSEE AND HIS WIFE. IT WAS ALSO SAID THAT A PE RSONAL LOAN WAS TAKEN FROM STANDARD CHARTERED BANK IN THE F.Y. 2003. HO WEVER, THAT EXPLANATION OF THE ASSESSEE WAS REJECTED BY THE AO PRIMARILY ON THE GROUND THAT THE ASSESSEE IS GIVING THE DETAILS OF A LL KINDS OF WITHDRAWAL IN ORDER TO EXPLAIN THE SOURCE OF THE SAID FDR, BUT TH OSE WITHDRAWALS WERE MADE EARLIER, HENCE THE EXPLANATION WAS NOT SATISFA CTORY. IN THE RESULT, AN ADDITION OF RS.50,000/- WAS MADE. THE SAID ADDI TION WAS CONFIRMED BY THE LD.CIT(A). THE VEHEMENT CONTENTION OF TH E ASSESSEE BEFORE US IS ITA NOS.2089,2090,2091 & 2649-2650/AHD/2009 SHRI VINOD K.PATEL VS. ACIT - 5 - THAT THE FDR WAS NOT IN THE NAME OF THE ASSESSEE BU T ADMITTEDLY IT WAS IN THE NAME OF HIS WIFE. THE AO HAS ALSO ADMITTED TH AT THE SAID FDR OF RS.50,000/- IN FACT WAS IN THE NAME OF SMT. ILA. WITH THIS BACKGROUND, LD.AR HAS CONTESTED THAT NATURALLY THE ASSESSEES W IFE STAYS WITH HER HUSBAND, WHO WAS SUBJECTED TO SEARCH, THEREFORE AN ASSET IN THE SHAPE OF FDR WHICH BELONGED TO HIS WIFE WAS FOUND FROM THE A SSESSEES PREMISES. BUT IN FACT, THAT FDR BELONGED TO HIS WIFE, THEREFO RE SHOULD NOT BE TAXED IN ASSESSEES HAND. SINCE THE IMPUGNED AMOUNT IS T RIFLE IN NATURE AND THAT THE LEGAL OBJECTION OF TAXING AN ASSET IN THE HANDS OF THE ASSESSEE THOUGH ADMITTEDLY THAT ASSET BELONGED TO A THIRD PA RTY HAS SOME LEGAL FORCE, THEREFORE WITHOUT MUCH DELIBERATION ANYMORE, WE HEREBY EXERCISE OUR DISCRETIONARY POWER, THOUGH SHOULD BE USED SPAR INGLY, AND DIRECT THE AO TO DELETE THE ADDITION. THIS GROUND OF THE ASSE SSEE IS ALLOWED. FOR THIS YEAR APPEAL IS ALLOWED. [C] ITA NO.2091/AHD/2009 (A.Y. 2006-07) 6. THE GROUNDS READ AS FOLLOWS: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE LEARNED CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.4,00, 000 MADE BY THE ASSESSING OFFICER ON THE ALLEGED GROUND OF UNEX PLAINED INVESTMENT IN DEPOSIT WITH THE PARTNERSHIP FIRM MAN GLA LAND DEVELOPMENT CORPORATION IN THE NAME OF NIDHI V.PATE L 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE LEARNED CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.1,91, 604/- MADE BY THE ASSESSING OFFICER ON THE ALLEGED GROUND OF UNEX PLAINED EXPENDITURE. 6.1. APROPOS TO GROUND NO.1 AND FDR OF RS.4 LACS IN THE NAME OF MS.NIDHI, DAUGHTER OF THE ASSESSEE WAS FOUND AND SE IZED BEARING FDR ITA NOS.2089,2090,2091 & 2649-2650/AHD/2009 SHRI VINOD K.PATEL VS. ACIT - 6 - NO.2221. THE EXPLANATION OF THE ASSESSEE WAS THAT THERE WERE WITHDRAWALS FROM PPF ACCOUNT IN THE YEAR 2003. HOW EVER, THE AO HAS FOUND THAT THE FDR WAS MADE IN THE ASST.YEAR 2006-0 7, WHEREAS THE WITHDRAWALS OR THE LOANS WERE WAY BACK IN A.Y. 2004 -05. THE EXPLANATION OF THE ASSESSEE WAS DISPENSED AND ACCOR DINGLY TAXED. THE MATTER WAS CARRIED BEFORE THE LD.CIT(A). 7. THE LD.CIT(A) HAS HELD THAT THE WITHDRAWALS FROM PPF ACCOUNT WERE IN THE YEAR 2003, HOWEVER THE FDR WAS MADE IN THE ASST.YEAR UNDER CONSIDERATION AND THERE WAS NO EVIDENCE THAT THE FUNDS WHICH WERE WITHDRAWN WERE USED FOR FDR. IN THE RESULT, THE AD DITION WAS, THEREFORE, CONFIRMED. 8. EVEN BEFORE US, THOSE VERY EVIDENCES WERE RELIED UPON. HOWEVER, ON HEARING THE SUBMISSIONS OF BOTH THE SIDES, WE AR E ALSO NOT CONVINCED. THE ADMITTED FACTUAL POSITION IS THAT THE ASSESSEE WAS SUBJECTED TO SEARCH AND THEREUPON THE IMPUGNED FDR WAS UNEARTHED. THE ASSESSEE WAS UNDER STRICT OBLIGATION TO PROVE THE SOURCE OF FDR. HE HAS SIMPLY STATED THAT CERTAIN WITHDRAWALS WERE MADE BUT THE ONUS WAS ON THE ASSESSEE TO PROVE THE NEXUS THAT THOSE VERY FUNDS WERE UTILIZED FOR MAKING THE IMPUGNED FDR. IN THE ABSENCE OF ANY CONVINCING O R COGENT EVIDENCE, WE ARE NOT INCLINED TO INTERFERE WITH THE FACTUAL F INDINGS OF THE AUTHORITIES BELOW. IN THE RESULT, THIS GROUND IS DISMISSED. 9. APROPOS TO GROUND NO.2, THE AOS OBSERVATION WAS THAT CERTAIN EXPENDITURE WAS INCURRED AND A LIST WAS MADE FOR TH E EXPENDITURE WHICH WERE FOUND TO BE INCURRED IN A.Y. 2006-07. WHILE D EALING THIS VERY ISSUE ITA NOS.2089,2090,2091 & 2649-2650/AHD/2009 SHRI VINOD K.PATEL VS. ACIT - 7 - IN A.Y. 2001-02, WE HAVE HELD THAT THE EXPLANATION OF THE ASSESSEE WAS NOT CONVINCING. SINCE THE FACTS FOR THIS YEAR ARE IDENTICAL, THEREFORE FOLLOWING THOSE REASONINGS FOR THIS YEAR AS WELL WE ARE NOT INCLINED TO DISTURB THE FACTUAL FINDINGS OF THE REVENUE AUTHORI TIES. THIS GROUND IS ALSO DISMISSED. IN THE RESULT, APPEAL IS DISMISSED . [D] ITA NO.2649/AHD/2009 (A.Y. 2001-02) 10. THE ONLY GROUND READS AS FOLLOWS: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE, THE DEPARTMENTAL AUTHORITIES HAVE ERRED IN INVOKING THE PROVISIONS OF SECTION 271(1)(C) IN THIS CASE AND HAVE FURTHER ERR ED IN LEVYING / CONFIRMING A PENALTY IN A SUM OF RS.45,980/- [E] ITA NO.2650/AHD/2009 (A.Y. 2004-05) 10.1. THE ONLY GROUND READS AS FOLLOWS: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE, THE DEPARTMENTAL AUTHORITIES HAVE ERRED IN INVOKING THE PROVISIONS OF SECTION 271(1)(C) IN THIS CASE AND HAVE FURTHER ERR ED IN LEVYING / CONFIRMING A PENALTY IN A SUM OF RS.15,000/- 10.2. THESE PENALTIES WERE LEVIED BECAUSE OF THE RE ASON THAT THE ASSESSEE WAS UNABLE TO SATISFACTORILY EXPLAIN THE SOURCE OF EXPENDITURE OF RS.1,31,000/- FOR A.Y. 2001-02 AND SOURCE OF INVEST MENT IN FDR OF RS.50,000/- FOR A.Y. 2004-05. 11. AS FAR AS THE PENALTY FOR A.Y. 2004-05 IS CONCE RNED, WE HAVE ALREADY DELETED THE ADDITION AND ALLOWED THE APPEAL OF THE ASSESSEE FOR A.Y. 2004-05. IN CONSEQUENCE THEREUPON, THE PE NALTY IS HEREBY DELETED. ITA NOS.2089,2090,2091 & 2649-2650/AHD/2009 SHRI VINOD K.PATEL VS. ACIT - 8 - 12. AS FAR AS THE PENALTY FOR A.Y. 2001-02 IS CONCE RNED, IT IS A TRITE LAW THAT PENALTY PROCEEDINGS ARE SEPARATE AND INDEPENDE NT PROCEEDINGS, THEREFORE, THE FINDINGS GIVEN IN THE QUANTUM PROCEE DINGS DO NOT AS IT IS APPLY IN THE PENALTY PROCEEDINGS. THE ASSESSEE HAS OFFERED AN EXPLANATION BUT THAT EXPLANATION COULD NOT BE PROVE D UPTO THE HILT. THIS WAS ONE ASPECT OF THE CASE, HOWEVER, ON THE OTHER H AND, THE REVENUE HAS ALSO NOT DISPROVED THAT EXPLANATION. IT WAS ALSO NOT THE CASE OF THE REVENUE THAT THE EXPLANATION GIVEN BY THE ASSESSEE WAS FALSE OR UNTRUE. THE CASE OF THE REVENUE WAS THAT THE ASSESSEE HAD T RIED TO LINK THE SOURCE OF EXPENDITURE FROM SOME WITHDRAWALS BUT THAT EXPLA NATION WAS OVERTURNED. EVEN WE HAVE UPHELD THE VIEW OF THE REVENUE BUT WE ARE FULLY CONSCIOUS WHILE DEALING WITH THE PENALTY PROC EEDINGS THAT MERELY REJECTION OF AN EXPLANATION DO NOT AUTOMATICALLY LE AD TO A CONCLUSION THAT THERE WAS A DELIBERATE CONCEALMENT. ACCORDINGLY, WE HEREBY REVERSE THE FINDINGS OF THE AUTHORITIES BELOW AND DELETE THIS P ENALTY AS WELL. IN THE RESULT, BOTH THE PENALTY APPEALS ARE ALLOWED. 9. WE SUMMARIZE THE RESULT AS UNDER:- 1. ITA NO.2089/AHD/2009 FOR A.Y. 2001-02 IS DISM ISSED. 2. ITA NO.2090/AHD/2009 FOR A.Y. 2004-05 IS ALLO WED. 3. ITA NO.2091/AHD/2009 FOR A.Y. 2006-07 IS DISM ISSED. 4. ITA NO.2649/AHD/2009 FOR A.Y. 2001-02 IS ALLO WED. 5. ITA NO.2650/AHD/2009 FOR A.Y. 2004-05 IS ALLO WED. SD/- SD/- ( .. !' ) ( ) #$ ( B.P. JAIN ) ( MUKUL KR. SHRAWAT ) ACCOUNTANT MEMBER JUDICIAL ME MBER AHMEDABAD; DATED 30 / 12 /2011 40..', .'../ T.C. NAIR, SR. PS ITA NOS.2089,2090,2091 & 2649-2650/AHD/2009 SHRI VINOD K.PATEL VS. ACIT - 9 - #3 . +5 6#5' #3 . +5 6#5' #3 . +5 6#5' #3 . +5 6#5'/ COPY OF THE ORDER FORWARDED TO : 1. (* / THE APPELLANT 2. +,(* / THE RESPONDENT. 3. 7 / CONCERNED CIT 4. 7() / THE CIT(A)-IV, AHMEDABAD 5. 5:; +' , , / DR, ITAT, AHMEDABAD 6. ;< =/ / GUARD FILE. #3' #3' #3' #3' / BY ORDER, ,5 + //TRUE COPY// > >> >/ // / ( DY./ASSTT.REGISTRAR) , , , , / ITAT, AHMEDABAD 1. DATE OF DICTATION..29/12/2011 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 29/12/2011 OTHER MEMBER 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S 30/12/2011 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 30/12/2011 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 9. DATE OF DESPATCH OF THE ORDER