Shri Manharbhai Namdeo Bhardwaj, Surat V. The Income tax Officer,Ward-9(3), Surat

ITA 229/AHD/2009

• Counselvise Citation: 22920514 RSA 2009
• Duration Of Justice: 2 year(s) 11 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-12-2011
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 22-12-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 23-01-2009
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: B L YADAV
• Assessee Lawyers: K N BHATT
• Keywords: Additional evidence; Tax effect
• Section: 68

Judgement Text

-1- IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH 'D' BEFORE SHRI BHAVNESH SAINI JM & SHRI B P JAIN -AM ITA NO.229/AHD/2009 (ASSESSMENT YEAR:-2005-06) SHRI MANHARBHAI NAMDEO BHARDWAJ, 45, SAIFEE SOCIETY, LAMBE HANUMAN ROAD, SURAT V/S THE INCOME-TAX OFFICER, WARD-9(3), SURAT PAN: ACKPB 2580 N [APPELLANT] [RESPONDENT] ASSESSEE BY :- SHRI K N BHATT, AR REVENUE BY:- SHRI B L YADAV, DR DATE OF HEARING:- 22-12-2011 DATE OF PRONOUNCEMENT:- 30-12-2011 O R D E R PER B P JAIN (AM) :- THIS APPEAL OF THE ASSESSEE ARISES FROM THE ORDER OF THE LEARNED CIT(A)-V, SURAT DATED 24-11-20 08 FOR THE ASSESSMENT YEAR 2005-06. THE ASSESSEE HAS RAISED TH E FOLLOWING GROUNDS OF APPEAL:- [1] IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE C ASE THE LD. CIT(A) OUGHT TO HAVE DELETED THE ADDITION OF RS.11, 00,000/- MADE BY THE LD. AO U/S 68 AND HENCE YOUR APPELLANT PRAYS THAT THE ADDITION SO MADE BY THE LD. AO BE DELETED. [2] SUCH OTHER RELIEF(S) TO WHICH THE APPELLANT MAY BE LAWFULLY ENTITLED TO. 2 2 THE BRIEF FACTS AS EMANATING FROM THE ORDER OF TH E AO ARE THAT THE AO OBSERVED THAT ON COMPARING THE BALANCE SHEET OF PRECEDING PREVIOUS YEAR WITH THAT OF THE CURRENT YE AR IT WAS FOUND THAT THE AMOUNT SHOWN AS PAID AGAINST PURCHASE OF I MMOVABLE PROPERTY WAS NOT APPEARING IN THE BALANCE SHEET OF THE CURRENT YEAR. AS ALSO THERE WAS NO CORRESPONDING INCREASE I N IMMOVABLE PROPERTY MEANING THEREBY THAT SUCH AMOUNT WAS RECEI VED BACK. ON FURTHER VERIFICATION OF THE BOOKS OF ACCOUNT IT WAS FOUND THAT THE ASSESSEE HAD RECEIVED BACK THIS AMOUNT IN CASH AND THAT THE SAME WERE DEPOSITED IN BANK OF BARODA KHAND BAZAR B RANCH. IN THIS REGARD THE ASSESSEE WAS ASKED TO PRODUCE THE C ONFIRMATIONS FROM THE PARTIES WHO HAD PURPORTEDLY RETURNED SUCH AMOUNT. HOWEVER ON THE APPOINTED DAY NO BODY APPEARED AND T HEREFORE A SHOW CAUSE NOTICE WAS ISSUED TO PRODUCE THE PARTIES AND THEIR CONFIRMATIONS IN THIS REGARD. IN RESPONSE TO WHICH THE ASSESSEE HAD SUBMITTED THAT SUM OF RS.1,00,000/- WAS RECEIVE D FROM ONE OF THE RELATIVE AS LOAN, THE AMOUNT WAS THEN WITHDR AWN FROM THE BANK BUT THE TRANSACTIONS WAS NOT RECORDED IN THE B OOKS DUE TO INADVERTENT ERROR. ACCORDING TO THE ASSESSEE THIS T RANSACTION WOULD NOT HAVE ANY EFFECT ON PROFIT OF THE ASSESSEE . FURTHER ACCORDING TO THE ASSESSEE IT HAD RECEIVED BACK HIS FUNDS PAID FOR PURCHASE OF PROPERTIES ON CANCELLATION OF SUCH DEAL AND THE SAME WAS DEPOSITED IN THE BANK ACCOUNT HOWEVER THOSE PRO PERTIES WERE LATER PURCHASED FROM THE SAME PARTIES FROM WHOM THE AMOUNT WAS RECEIVED ON CANCELLATION OF DEAL. IT WAS THUS SUBMI TTED THAT CASH DEPOSIT WAS MADE OUT OF OPENING CASH BALANCE OF RS. 575674/- AND FROM REFUND OF ADVANCES RECEIVED FROM THE PARTI ES TO WHOM ADVANCES WERE PAID AGAINST PURCHASE OF PROPERTIES. ACCORDING TO 3 THE ASSESSEE ONLY SUM OF RS.2,25,000/- WAS RECEIVED BACK AGAINST CANCELLATION OF SUCH DEAL AND ALL OTHER AMOUNT WERE DEPOSITED EITHER OUT OF CASH WITHDRAWN FROM THE BANK OR FROM OPENING CASH BALANCE AVAILABLE WITH THE ASSESSEE. THE ASSESSEE H AD GIVEN SUCH DETAILS WHICH IS REPRODUCED BY THE AO ON PAGE NO. 5 OF THE ORDER. 3 HOWEVER ACCORDING TO THE AO THE ASSESSEE'S PLEA W AS NOT ACCEPTABLE. SINCE THE ASSESSEE HAD NEITHER PRODUCED THE CONFIRMATIONS NOR HAD PRODUCED THE PARTY WITH RESPE CT TO RECEIPT OF RS.1.00 LAC. FURTHER THE ASSESSEE HAD FAILED TO EXPLAIN CREDIT ENTRY IN RESPECT OF CHEQUE RECEIVED THROUGH CLEARIN G AND DEPOSITED IN BANK ON 18.5.2004 AMOUNTING TO RS.2,00 ,000/-AND THEREFORE ACCORDING TO THE AO THE ASSESSEE'S BOOKS OF ACCOUNT WERE UNRELIABLE AND COULD NOT BE ACCEPTED. AS REGAR D CASH DEPOSIT OF RS.8,00,000/- IT WAS NOTICED THAT ASSESS EE HAD MADE ENTRIES IN THE NAME OF THREE PERSONS FROM WHOM IT W AS SHOWN TO HAVE RECEIVED CASH IN ALL AMOUNTING TO RS.7,70,101/ - THE DETAILS OF SUCH PERSONS IS GIVEN IN CLAUSE (B) ON PAGE 7 OF THE ORDER. FURTHER THE AO ALSO OBSERVED CERTAIN CASH CREDITS F OR AN AMOUNT LESS THAN RS.20000/- IN VARIOUS NAMES. THE ASSESSEE WAS ASKED TO PRODUCE THOSE PARTIES AND THEIR CONFIRMATIONS WHICH THE ASSESSEE HAD FAILED TO DO SO. DESPITE SUCH INITIAL SUBMISSIO N ALREADY MADE LATER, THE ASSESSEE HAD EXPLAINED SUCH AMOUNT OF DE POSIT AS PARTLY FROM CASH BALANCE AND PARTLY FROM REFUND OF ADVANCE RECEIVED ON CANCELLATION OF SUCH PURCHASE CONTRACT. THUS ACCORD ING TO THE AO THE ASSESSEE HAD MADE DIFFERENT STATEMENTS AT DIFFE RENT TIMES AND HENCE THE SAME COULD NOT BE RELIED UPON. THUS CONSI DERING THESE 4 FACTS THE AO MADE AN ADDITION OF RS.11,00,000/- BEI NG AMOUNT OF CASH LOAN PURPORTED TO HAVE BEEN RECEIVED FROM RELA TIVES AND NOT ENTERED IN THE BOOKS, RS.2,00,000/- BEING AMOUNT OF CHEQUE RECEIVED AND DEPOSITED IN BANK FOR WHICH NO EXPLANA TION WAS FURNISHED AND SUM OF RS.8,00,000/- BEING CASH DEPOS ITED IN BANK FOR WHICH NO PROPER REPLY WAS RECEIVED FROM THE ASS ESSEE. 4 THE LEARNED CIT(A) CONFIRMED THE ACTION OF THE AO . 5 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED T HE FACTS OF THE CASE. AS REGARDS LOAN OF RS.1,00,000/- FROM THE RELATIVE, THE ASSESSEE HAS NOT SUBMITTED ANY CONFIRMATION. TH E ASSESSEE HAS NOT ENTERED THE TRANSACTIONS IN HIS BOOKS OF AC COUNT. THE EXPLANATION THAT THE TRANSACTIONS WILL NOT HAVE ANY TAX EFFECT, CANNOT BE TREATED AS COGENT EXPLANATION. SIMILARLY, THE ASSESSEES ACCOUNT HAS BEEN CREDITED WITH RS.2,00,000/- BY CLE ARING ON 18- 05-2004. THE ASSESSEE HAS NOT SUBMITTED ANY EXPLANA TION WITH REGARD TO SOURCE OF SUCH CREDIT WITH SUPPORTING EVI DENCE. THE EXPLANATION BEFORE THE LEARNED CIT(A) THAT THE SAID AMOUNT IS THE RETURN OF MONEY IS WITHOUT ANY SUPPORTING DOCUMENT. THEREFORE, THE LEARNED CIT(A) HAS RIGHTLY NOT ACCEPTED THE EXP LANATION GIVEN BEFORE HIM, SINCE THE ASSESSEE HAS NOT SUBMITTED AN Y CONFIRMATION OR ANY OTHER ADDITIONAL EVIDENCE UNDER THE INCOME TAX RULES. 6 AS REGARDS CASH DEPOSITS OF RS.8,00,000/- IN THE BANK ACCOUNT, THE ASSESSEE HAS MADE ENTRIES IN THE NAMES OF FOLLOWING PERSONS:- 5 SHRI VASHANTBHAI MOTIRAM PATEL RS. 70,000/- DR. VIKASH KANADE RS.5,00,101/- SMT. SIMABEN SANJAYBHAI NERKAR RS.2,00,000/- ---------------- RS.7,70,101/- SIMILARLY, THE ASSESSEE HAD ENTERED CERTAIN CASH LO ANS WHICH ARE BELOW RS.20,000/- IN THE NAMES OF VARIOUS PERSONS. ON SHOW CAUSE GIVEN, THE ASSESSEE NEITHER PRODUCED ANY CONF IRMATION FROM SUCH PARTIES NOR THE SAID PARTIES WERE PRODUCED FOR VERIFICATION. DURING THE YEAR, THE ASSESSEE HAS PURCHASED THREE M ORE PROPERTIES AMOUNTING TO RS.7,54,000/-. THEREFORE, THE ASSESSEE S EXPLANATION WHICH IS CONTRARY TO THE EXPLANATION ON 7-12-2007 THAT AVAILABILITY OF CASH AS ON 1-4-2004 OF RS.5,75 ,000/- AND RS.2,25,000/- FROM CANCELLATION MONEY RECEIVED, HAS NOT BEEN ACCEPTED BY THE AO. THE LEARNED CIT(A) HAS RIGHTLY OBSERVED THAT THE ASSESSEE HAS BEEN CHANGING THE STAND TO ME ET HIS OWN MEANS REGARDING THE CASH DEPOSITS AND PURCHASE OF P ROPERTIES. THE AFFIDAVIT OF ONE OF THE PERSONS FROM WHOM THE A SSESSEE CLAIMS THE ADVANCES TO HAVE BEEN RECEIVED BACK, CAN NOT BE ACCEPTED, HAS RIGHTLY BEEN OBSERVED BY THE LEARNED CIT(A) THAT THE ASSESSEE HAD LATER RE-PURCHASED THE SAME PROPER TIES FOR WHICH DEALS HAVE BEEN STATED TO HAVE BEEN CANCELLED. THER E IS NOTHING BROUGHT ON RECORD TO SHOW BY THE ASSESSEE AS TO HOW SAID DR. KANADE HAD PAID CASH ON VARIOUS DATES AND THEREFORE , IN THE ABSENCE OF ANY SUCH MATERIAL, THE CREDIBILITY OF SU CH EVIDENCE CANNOT BE ACCEPTED. IN THE CIRCUMSTANCES AND FACTS OF THE CASE, WE FIND NO INFIRMITY IN THE ORDER OF THE LEARNED CI T(A) WHO HAS RIGHTLY CONFIRMED THE ACTION OF THE AO. THUS, GROUN D NO.1 OF THE ASSESSEES APPEAL IS DISMISSED. 6 7 GROUND NO.2 OF THE ASSESSEES APPEAL IS GENERAL I N NATURE AND DOES NOT REQUIRE ANY ADJUDICATION. 8 IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE I S DISMISSED. ORDER PRONOUNCED IN THE COURT TODAY ON 30-12-2011 SD/- SD/- (BHAVNESH SAINI) JUDICIAL MEMBER (B P JAIN) ACCOUNTANT MEMBER DATE : 30-12-2011 COPY OF THE ORDER FORWARDED TO: 1. SHRI MANHARBHAI NAMDEO BHARDWAJ, 45, SAIFEE SOCI ETY, LAMBE HANUMAN ROAD, SURAT 2. THE INCOME-TAX OFFICER, WARD-9(3), SURAT 3. CIT CONCERNED 4. CIT(A)-V, SURAT 5. DR, ITAT, AHMEDABAD BENCH-D, AHMEDABAD 6. GUARD FILE BY ORDER DEPUTY REGISTRAR ASSISTANT REGISTRAR ITAT, AHMEDABAD