Shri Shailesh Hiralal Bhatt, Ahmedabad V. The Income tax Officer, Ward-3(4), Ahmedabad

ITA 2488/AHD/2010

• Counselvise Citation: [2011] 135 COUNSELVISE.COM (IT) 2044 (ITAT-AHMEDABAD)
• Duration Of Justice: 6 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-02-2011
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 18-02-2011
• Assessment Year: 2002-2003
• Appeal Filed On: 10-08-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: A C SHAH
• Keywords: Additional evidence
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH AHMEDABAD (BEFORE S/SHRI BHAVNESH SAINI, JM AND D.C. AGRAWAL, AM) ITA NO.2488/AHD/2010 A. Y.: 2002-03 SAILESH HIRALAL BHATT, B-8, SOMNATH COMPLEX, OPP. GANESH APARTMENT, NARODA, AHMEDABAD 380 025 VS THE INCOME TAX OFFICER, WARD -3 (4), AHMEDABAD PA NO. AEJPB 9702 P (APPELLANT) (RESPONDENT) APPELLANT BY SHRI A. C. SHAH, AR RESPONDENT BY SHRI DARSI SUMAN RATNAM, DR O R D E R PER BHAVNESH SAINI: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LEARNED CIT(A), GANDHINAGAR DATED 16 TH JUNE,2010 FOR ASSESSMENT YEAR 2002-03, CHALLENGIN G THE ADDITION OF RS.1,00,000/-. 2. THE FACTS OF THE CASE ARE THAT ITAT AHMEDABAD BE NCH VIDE ORDER DATED 09-08-2007 SET ASIDE THE MATTER REGARDI NG ADDITION OF RS.1,00,000/- MADE BY THE AO IN ORIGINAL ASSESSMENT MADE ON 29-03-2005. THE SAID ADDITION HAS BEEN MADE BY THE AO AS THE ASSESSEES BOOKS SHOWED WITHDRAWAL OF AN AMOUNT OF RS.1,00,000/- FROM THE BANK ON 31-03-2002 AND ITS SUBSEQUENT DISB URSEMENT TO VARIOUS PERSONS ON DATE, BUT NO SUCH WITHDRAWAL HAD BEEN MADE FROM THE BANK ACCOUNT. THE AO TREATED THE MATTER AS AN ISSUE U/S 68 ITA NO.2488/AHD/2010 SAILESH HIRALAL BHATT VS ITO WARD-3(4), AHMEDABAD 2 OF THE IT ACT AND MADE THE ADDITION. THE LEARNED CI T(A) CONFIRMED THE ADDITION. HOWEVER, THE TRIBUNAL SET ASIDE THE M ATTER ON THE GROUND OF ADMISSION OF ADDITIONAL EVIDENCE IN THE S HAPE OF PASS BOOK OF NARODA INDUSTRIAL COOPERATIVE BANK LTD. THE AO A GAIN MADE THE SIMILAR ADDITION WHICH WAS CHALLENGED BEFORE THE LE ARNED CIT(A) AND THE STAND OF THE ASSESSEE WAS SAME AS WAS BEFORE TH E AO AS WELL AS LEARNED CIT(A) THAT THERE HAS BEEN MISTAKE IN RE CORDING THE ENTRY IN THE BOOKS OF ACCOUNTS. THE ENTRY MADE ON 31-03-2 002 REGARDING DISBURSEMENT OF CASH TO SIX SUB-BROKERS HAS BEEN IN CORRECTLY MADE AND THE SAME STAND RECTIFIED ON 01-04-2002. IN FACT NO CASH WAS RECEIVED AND THEREFORE, THERE IS NO QUESTION OF ADD ITION. THE ASSESSEE FURTHER SUBMITTED BEFORE THE LEARNED CIT(A ) THAT THE TRIBUNAL ACCEPTED THE STAND OF THE ASSESSEE WHILE S ETTING ASIDE THE MATTER TO THE FILE OF THE AO FOR DECIDING THE ISSUE AFRESH AFTER ADMITTING THE ADDITIONAL EVIDENCES. THE ASSESSEE PR ODUCED THE RELEVANT ENTRIES AND COPY OF THE PASS BOOK FOR PERU SAL OF THE AUTHORITIES BELOW AND IT WAS ARGUED THAT NO CASH IS RECEIVED AND NO PAYMENT IS MADE. THEREFORE, ADDITION SHOULD NOT BE MADE. THE ASSESSEE FILED COPIES OF PASS BOOK WITH BANK BOOK, ENTRIES MADE ON 31-03-2002 AND 01-04-2002, RELEVANT ENTRIES OF LEDG ER ACCOUNT OF THE PERSONS TO WHOM ALLEGED PAYMENTS HAVE BEEN MADE. TH E LEARNED CIT(A) HOWEVER, DID NOT AGREE WITH THE CONTENTION O F THE ASSESSEE AND DID NOT ACCEPT THE MISTAKE IN THE BOOKS OF ACCO UNTS AS WELL AS DISBURSEMENT OF ALLEGED PAYMENTS TO BE MADE BY THE ASSESSEE LATER ON. THE LEARNED CIT(A) NOTED THAT ONCE ENTRIES OF DISBURSEMENT IS MADE IN THE BOOKS OF ACCOUNT, IT WOULD HAVE BEEN MA DE ON ACTUAL HAPPENING OF THE EVENTS AND AS SUCH THERE CAN NOT B E ANY MISTAKE. ITA NO.2488/AHD/2010 SAILESH HIRALAL BHATT VS ITO WARD-3(4), AHMEDABAD 3 THE LEARNED CIT(A) ALSO NOTED THAT THE CONTENTION O F THE ASSESSEE IS NOT CORRECT THAT THE TRIBUNAL UPHELD THE STAND OF T HE ASSESSEE BECAUSE THE ADDITIONAL EVIDENCE WAS IN FACT WAS ALR EADY BEFORE THE AO WHILE MAKING THE ADDITION WHICH IS BANK PASS BOO K. THE ASSESSEE COULD NOT PROVE THE SOURCE OF THE DISBURSEMENT OF T HE PAYMENTS. THEREFORE, THE ADDITION IS CORRECTLY MADE. THE LEAR NED CIT(A) NOTED THAT SINCE ADDITION IS MADE ON THE BASIS OF ENTRIES CONTAINED IN THE BOOKS OF ACCOUNT AND NO SUFFICIENT EVIDENCE HAS BEE N FILED TO EXPLAIN THE SAME, ADDITION MADE BY THE AO WAS CONFIRMED AND APPEAL OF THE ASSESSEE WAS DISMISSED. 3. THE LEARNED COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW AND S UBMITTED THAT IT WAS A MISTAKE IN MAKING THE ENTRIES IN THE BOOKS OF ACCOUNT WHICH WAS SOFTWARE MISTAKE. THE ASSESSEE DID NOT MAKE ANY AFTERTHOUGHT CLAIM. THE ASSESSEE PRODUCED SUFFICIENT EVIDENCE BE FORE THE AO AS NOTED ABOVE TO PROVE MISTAKES MADE IN THE ENTRIES; THEREFORE, INITIAL BURDEN UPON THE ASSESSEE IS DISCHARGED. HE HAS SUBM ITTED THAT ADDITION IS MADE BY THE AO ON PRESUMPTION ONLY. HE HAS REFERRED TO SEVERAL PAGES FROM THE PAPER BOOK I.E. PB-8 FOR ISS UE OF CHEQUE OF RS.1,00,000/- ON 31-03-2002 AND REVERSE ENTRY MADE ON 01-04-2002 (PB-9). PB- 10 TO 18 ARE REFERRED TO SHOW EARLIER E NTRIES MADE IN THE CASH BOOK AND SHOWING DISBURSEMENT OF PAYMENTS TO S IX SUB-BROKERS AND LATER ON REVERSE ENTRIES ARE MADE AND PAYMENTS WERE MADE LATER ON TO SHOW THAT THERE WAS MISTAKE IN MAKING THE ENT RIES IN THE BOOKS OF ACCOUNT. THE LEARNED COUNSEL FOR THE ASSESSEE, T HEREFORE, ITA NO.2488/AHD/2010 SAILESH HIRALAL BHATT VS ITO WARD-3(4), AHMEDABAD 4 SUBMITTED THAT ADDITION IS CLEARLY UNJUSTIFIED AND THE SAME MAY BE DELETED. 4. ON THE OTHER HAND, THE LEARNED DR RELIED UPON TH E ORDERS OF THE AUTHORITIES BELOW AND SUBMITTED THAT SOURCE OF THE CASH ENTRIES IN THE BOOKS OF ACCOUNT HAS NOT BEEN PROVED THROUGH ANY EV IDENCE. THE PAYMENT OF SIX PERSONS ENTERED IN THE BOOKS OF ACCO UNT AND ON THAT BASIS THE AO MADE THE ADDITION ON MERIT BECAUSE THE ASSESSEE FAILED TO EXPLAIN THE SOURCE OF THE PAYMENT MADE TO THE SU B-BROKERS. THEREFORE, ADDITION IS MADE ON MERIT AND NOT ON MER E PRESUMPTION. HE HAS FURTHER SUBMITTED THAT NO CONFIRMATION FROM THE SUB-BROKERS HAS BEEN FILED TO SHOW THAT THEY HAVE RECEIVED PAYM ENTS LATER ON. LEARNED DR, THEREFORE, SUBMITTED THAT THE ADDITION HAS BEEN RIGHTLY MADE. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND THE MATERIAL AVAILABLE ON RECORD. IT IS UNDISPUTED FACT THAT THE RE WAS NO WITHDRAWAL FROM THE BANK ON THE DATE WHEN ENTRY OF THE CASH IN TRODUCED WAS MADE IN THE BOOKS OF ACCOUNT. THE ENTRIES MADE IN T HE BOOKS OF ACCOUNT ON 31-03-2002 SHOWING INTRODUCTION OF THE C ASH IN THE BOOKS AND PAYMENTS MADE TO THE SIX SUB-BROKERS ARE ALSO N OT DISPUTED. THE ENTRIES IN THE BOOKS OF ACCOUNT, THEREFORE, ON THE CLOSE OF THE FINANCIAL YEAR HAVE NOT BEEN DISPUTED. THE ASSESSEE FILED COP Y OF THE EARLIER ORDER OF THE TRIBUNAL DATED 09-08-2007 IN THE PAPER BOOK. THE ASSESSEES COUNSEL PLEADED BEFORE THE TRIBUNAL IN T HE FIRST ROUND PROCEEDINGS THAT LIC SUB-AGENTS IN TURN ALSO FILED RETURN OF INCOME AND ASSESSEE IS WILLING TO FILE THEIR CONFIRMATION. HOWEVER, THE ITA NO.2488/AHD/2010 SAILESH HIRALAL BHATT VS ITO WARD-3(4), AHMEDABAD 5 ASSESSEE HAS NOT FILED ANY CONFIRMATION FROM THE SU B-BROKERS BEFORE THE AO IN THE SET ASIDE PROCEEDINGS. THUS, THE SUBM ISSION MADE BEFORE THE ITAT IN THE FIRST ROUND PROCEEDINGS HAVE NOT BEEN COMPLIED WITH. THE MERE ENTRIES IN THE NEXT ASSESSM ENT YEAR WITHDRAWING THE EARLIER ENTRIES MADE IN THE PRECEDI NG ASSESSMENT YEAR WOULD NOT BE RELEVANT. IF THE STAND OF THE ASS ESSEE IS ACCEPTED THEN IT WOULD LEAD TO SUCH A SITUATION THAT WHEREVE R ADDITION IS MADE AGAINST THE ASSESSEE, THE ASSESSEE WOULD TAKE LIBER TY IN MAKING REVERSE ENTRY IN SUBSEQUENT YEAR TO THWART THE PROV ISIONS OF LAW. WE MAY ALSO NOTE HERE THAT THE AO VIDE ORDER SHEET DAT ED 01-11-2008 ASKED THE ASSESSEE TO PRODUCE THE VOUCHERS AS REFLE CTED IN THE INDIVIDUAL LEDGER OF SIX SUB-BROKERS TO PROVE ITS B ONA FIDE BUT THE ASSESSEES COUNSEL HAS SHOWN INABILITY TO PRODUCE T HE SAME. FURTHER, THE ASSESSEE WAS DIRECTED TO PRODUCE THE S AME ACCOUNTANT WHO HAS COMMITTED MISTAKE IN THE BOOKS OF ACCOUNT, BUT THE ASSESSEE HAS NOT COMPILED WITH THE SHOW CAUSE NOTIC E OF THE AO. THUS, THE ASSESSEE FAILED TO FILE ANY SATISFACTORY EXPLANATION AND EVIDENCE BEFORE THE AO IN SUPPORT OF THE ARGUMENTS, THEREFORE, ASSESSEE FAILED TO DISCHARGE ONUS UPON HIM. THEREFO RE, IT IS A CASE WHERE THE EXPLANATION OFFERED BY THE ASSESSEE IN TH E OPINION OF THE AO WAS NOT SATISFACTORY. SINCE, THE ASSESSEE FAILED TO COMPLY WITH THE NOTICE OF THE AO, THEREFORE, ADDITION IS MADE O N MERIT BECAUSE THE ASSESSEE FAILED TO EXPLAIN THE SOURCE OF THE CASH I NTRODUCED IN THE BOOKS OF ACCOUNT. THE STORY SET UP BY THE ASSESSEE CLEARLY PROVES THAT IT IS AN AFTERTHOUGHT AND THE AO HAS RIGHTLY M ADE THE ADDITION AGAINST THE ASSESSEE. DURING THE COURSE OF ARGUMENT THE LEARNED COUNSEL FOR THE ASSESSEE HAS SHOWN HIS INABILITY EV EN TO GET THE ITA NO.2488/AHD/2010 SAILESH HIRALAL BHATT VS ITO WARD-3(4), AHMEDABAD 6 ENTRIES VERIFIED IN RESPECT OF LATER PAYMENT MADE T O THE SUB-BROKERS BECAUSE OF LAPSE OF TIME. IN THE ABSENCE OF ANY ADE QUATE EVIDENCE ON RECORD, THE EXPLANATION OF THE ASSESSEE CANNOT B E ACCEPTED. THEREFORE, IT IS PROVED BEYOND DOUBT THAT THE ASSES SEE INTRODUCED UNACCOUNTED CASH IN THE BOOKS OF ACCOUNT WHICH WERE SHOWN TO HAVE BEEN DISBURSED TO SIX SUB-BROKERS. THEREFORE, THE A O WAS JUSTIFIED IN MAKING THE ADDITION. THE LEARNED CIT(A) WAS JUSTIFI ED IN CONFIRMING THE ADDITION. WE, THEREFORE, DO NOT FIND ANY MERIT IN THE APPEAL OF THE ASSESSEE. SAME IS ACCORDINGLY DISMISSED. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DIS MISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 18-02-2011 AT 2PM SD/- SD/- (D. C. AGRAWAL) ACCOUNTANT MEMBER (BHAVNESH SAINI) JUDICIAL MEMBER DATE : 18- 02-2011 LAKSHMIKANT/- COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE BY ORDER D Y. REGISTRAR, ITAT, AHMEDABAD