Mrs. Ujawala Umesh Shetye, Ratnagiri V. Deputy Commissioner of Income-tax,

ITA 279/PUN/2014

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 9151 (ITAT-PUNE)
• Duration Of Justice: 3 year(s) 5 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-07-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 29-06-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 13-02-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Unexplained investment; Reasonable cause; Corroborative evidences; Assessment record
• Section: 143(3); 142(1); 133A; 131

Judgement Text

] IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE MS. SUSHMA CHOWLA, JM AND SHRI ANIL CHATURVEDI, AM . / ITA NOS.278/PUN/2014 [ [ / ASSESSMENT YEAR : 2009-10 MR. UMESH SHRIKANT SHETYE, FLAT NO.202, 2 ND FLOOR, A WING, SAIRAJ APARTMENTS, TELI ALI BAZAR PETH, RATNAGIRI 415612. PAN NO.AFPPS 3646N . / APPELLANT V/S DY. COMMISSIONER OF INCOME TAX, RATNAGIRI CIRCLE, RATNAGIRI. . / RESPONDENT . / ITA NOS.279/PUN/2014 [ [ / ASSESSMENT YEAR : 2009-10 MRS. UJAWALA UMESH SHETYE, FLAT NO.202, 2 ND FLOOR, A WING, SAIRAJ APARTMENTS, TELI ALI BAZAR PETH, RATNAGIRI 415612. PAN NO.AEPPS 5630H . / APPELLANT V/S DY.COMMISSIONER OF INCOME TAX, RATNAGIRI CIRCLE, RATNAGIRI. . / RESPONDENT ASSESSEE BY : NONE REVENUE BY : SHRI AJAY MODI / ORDER / DATE OF HEARING : 29.06.2017 / DATE OF PRONOUNCEMENT: 26 .07.2017 2 PER ANIL CHATURVEDI, AM : THESE TWO APPEALS FILED BY TWO DIFFERENT ASSESSEES ARE EMANATING OUT OF THE TWO SEPARATE ORDERS OF COMMISSIONER OF INCOME-TAX (A) - II, KOLHAPUR, DT.12.11.2013 FOR THE ASSESSMENT YEAR 2009-10. BEFORE US, LD.D.R. SUBMITTED THAT BOTH THE ASSESSEES IN THE ABOVE APPEALS ARE RELATED (WIFE AND HUSBAND) TO EACH OTHER, THE FACTS AND ISSUES INVOLVED IN BOTH THE APPEALS ARE IDENTICAL EXCEPT THE AMOUNTS INVOLVED THEREIN. HE THEREFORE SUBMITTED THAT BOTH THE APPEALS CAN BE HEARD AND DISPOSED OF TOGETHER. WE FOR THE SAKE OF CONVENIENCE PROCEED TO DISPOSE OF BOTH THE APPEALS BY A CONSOLIDATED ORDER. WE THUS PROCEED WITH NARRATING THE FACTS AND ISSUES IN ITA NO.278/PUN/2014. 2. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERIAL ON RECORD ARE AS UNDER :- 2.1 ASSESSEE IS AN INDIVIDUAL STATED TO BE ENGAGED IN THE RETAIL TRADING OF GENERAL ITEMS UNDER THE NAME AND STYLE OF KETAN PAN SHOP AND GENERAL STORES AND RUNNING MANGAL KARYALAYA. AO NOTICED THAT THE RETURN OF INCOME FOR A.Y. 2009-10 WAS DUE TO BE FILED ON 31.07.2009. AS THE ASSESSEE HAD NOT FILED THE RETURN OF INCOME TILL 03.08.2009, NOTICE U/S 142(1) OF THE ACT WAS ISSUED ON 03.08.2009 AND SERVED ON ASSESSEE AS WELL AS HIS AUTHORISED REPRESENTATIVE ON 07.08.2009. IN RESPONSE TO THE NOTICE, ASSESSEE ELECTRONICALLY FILED HIS RETURN OF INCOME FOR A.Y. 2009-10 ON 27.10.2010 DECLARING TOTAL INCOME OF RS.10,34,310/-. THE CASE WAS TAKEN UP FOR SCRUTINY AND THEREAFTER ASSESSMENT WAS FRAMED U/S 143(3) OF THE ACT VIDE ORDER DT.26.12.2011 AND THE TOTAL INCOME WAS DETERMINED AT RS.1,20,22,690/-. AGGRIEVED BY THE ORDER OF AO, ASSESSEE CARRIED THE MATTER BEFORE LD.CIT(A), WHO VIDE ORDER 3 DT.12.11.2013 (IN APPEAL NO.RTN/610/11-12) DISMISSED THE APPEAL OF THE ASSESSEE. AGGRIEVED BY THE ORDER OF LD.CIT(A), ASSESSEE IS NOW IN APPEAL BEFORE US AND HAS RAISED THE FOLLOWING GROUNDS : I N THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE FOLLOWING ADDITIONS CONFIRMED BY THE LEARNED C.I . T . [A] MAY PLEASE BE DELETED AS THE SAME ARE ARBITRARY , PERVERSE AND DEVOID OF MERITS : I. AN ADDITION OF RS . 8,05,700.00 MADE ON ALLEGED GROUND OF EXCESS CASH II. AN ADDITION OF RS . 6,43,700.00 MADE ON ACCOUNT OF ALLEGED RECEIVABLES III. AN ADDITION OF RS . 18,75,600.00 MADE ON ACCOUNT O F ALLEGED INVESTMENT IN PURCHASE OF GOLD ORNAMENTS IV. AN ADDITION OF RS . 47,86,200.00 MADE ON ACCOUNT OF ALLEGED INVESTMENT IN FURNITURE AND INTERIOR V. THE ADDITIONS OF RS.3,27,600.00, RS.2,10, 000.00 AND RS . 2,07 , 480.00 MADE ON ACCOUNT OF ALLEGED PROPERTY INCOME VI. AN ADDITION OF RS . 9,16,000.00 MADE ON ACCOUNT OF INCOME FROM MANGAL KARYALAYA VII. AN ADDITION OF RS.2,24,000.00 MADE ON ACCOUNT OF ALLEGED COMMISSION FROM CATERING CONTRACT VIII. AN ADDITION OF RS.3,19,500.00 MADE ON ACCOUNT OF ALLEGED SALE OF PLOTS IX. AN ADDITION OF RS.6,72,600 . 00 AS INCOME FROM OTHER SOURCES B Y DISALLOWING THE AGRICULTURE I NCOME 2. WITHOUT PREJUDICE TO ABOVE AND BY WAY OF AN ALTERNATE SUBMISSION, THE APPELLANT SUBMITS THAT THERE WAS A REASONABLE CAUSE FOR THE APPELLANT FOR NON ATTENDANCE BEFORE THE LEARNED C.I . T.[A] . IN THE CIRCUMSTANCES THE APPELLANT PRAYS THAT THE MATTER MAY PLEASE BE RESTORED TO THE FILE OF THE LEARNED C.I . T . [A] FOR FRESH ADJUDICATION ON MERITS. 3. ON THE DATE OF HEARING, NONE APPEARED ON BEHALF OF THE ASSESSEE NOR ANY ADJOURNMENT APPLICATION WAS FILED ON HIS BEHALF. THE CASE FILE FURTHER REVEALS THAT IN THE PAST ON SEVERAL OCCASIONS, THE HEARING WAS ADJOURNED AT THE REQUEST OF ASSESSEE (16.02.2016, 05.05.2016, 20.07.2016, 01.09.2016, 08.11.2016 AND 18.01.2017). 4 AT THE TIME OF LAST HEARING ON 06.04.2017, THE HEARING WAS AGAIN ADJOURNED TO THE PRESENT DATE AS THE COUNSEL SHRI SUNIL GANOO, WHO WAS REPRESENTING THE ASSESSEE HAD WITHDRAWN HIS POWER OF ATTORNEY VIDE APPLICATION DT.06.04.2017 AND THEREAFTER NOTICE WAS SERVED ON THE ASSESSEE INTIMATING ABOUT THE HEARING ON 29.06.2017. AS NONE APPEARED ON BEHALF OF THE ASSESSEE, WE PROCEED TO DISPOSE OF THE APPEAL EX-PARTE QUA THE ASSESSEE ON THE BASIS OF MATERIAL ON RECORD AND AFTER HEARING LD.D.R. 4. ALL THE GROUNDS BEING INTER-CONNECTED ARE CONSIDERED TOGETHER. 5. A SURVEY ACTION WAS CONDUCTED ON 26.02.2009 WHEREIN TWO POCKET DIARIES HAVING NOTINGS REGARDING DETAILS OF EXPENDITURE MADE BY THE ASSESSEE FOR CONSTRUCTION OF RESIDENTIAL HOUSES AT RATNAGIRI AND FARM HOUSE AT KURLI VILLAGE WERE FOUND BY SURVEY PARTY. ON THE BASIS OF DETAILS IN THE DAIRY, THE ADDITIONAL INCOME OF RS.68,11,200/- WAS DISCLOSED BY THE ASSESSEE IN THE STATEMENT RECORDED U/S 133A OF THE ACT. THE BREAKUP OF ADDITIONAL INCOME IS AS UNDER : AO NOTICED THAT AT THE TIME OF SURVEY ASSESSEE HAD DISCLOSED ADDITIONAL INCOME OF RS.68,11,200/- FOR THE YEAR UNDER CONSIDERATION. HOWEVER NO SUCH INCOME WAS OFFERED IN THE RETURN I) EXCESS CASH : RS.8,05,700/- II) RECEIVABLES (AS PER POCKET DIARY) : RS.6,43,700/- III) EXPENDITURE IN CASH ON FURNITURE IN RESIDENTIAL HOUSE : RS.47,86,200/- IV) INVESTMENT IN GOLD : RS.5,75,600/- TOTAL : RS.68,11,200 5 OF INCOME. THE ASSESSEE WAS THEREFORE ASKED TO EXPLAIN THE DIFFERENCE IN THE RETURN OF INCOME AND THE INCOME DECLARED DURING THE COURSE OF SURVEY. AO NOTED THAT DURING THE COURSE OF SURVEY ASSESSEE HAD STATED THAT HE HAS NOT MAINTAINED ANY BOOKS OF ACCOUNTS. HE HAS FURTHER NOTED THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, ASSESSEE COULD NOT PRODUCE ANY EVIDENCE TO SHOW THAT HE WAS ACTUALLY HAVING CASH BALANCE OF RS.8,30,700/- ON 26.02.2009 PERTAINING TO HIS OFFICE BUSINESS. THE AMOUNT WAS THEREFORE CONSIDERED AS INCOME OF THE ASSESSEE. WITH RESPECT TO THE ADDITION OF RS.6,43,700/- ON ACCOUNT OF RECEIVABLES AND RS.18,75,600/- ON ACCOUNT OF RECEIVABLES IN PURCHASE OF GOLD, ENTRIES WERE FOUND IN THE DIARY IN ASSESSEES OWN HAND-WRITING. THE COPY OF THE DIARIES IS REPRODUCED BY THE AO AT PAGE 4 AND 5 OF THE ASSESSMENT ORDER. DURING THE COURSE OF SURVEY THE ASSESSEE WAS ASKED TO EXPLAIN THE ENTRIES. ASSESSEE ACCEPTED THE INVESTMENT IN PURCHASE TO BE OUT OF THE BOOKS AND OFFERED IT AS ADDITIONAL INCOME. HOWEVER, THE SAME WAS NOT INCLUDED IN THE INCOME FILED BY THE ASSESSMENT. THE ASSESSEE WAS ASKED TO RECONCILE THE INCOME IN THE STATEMENT GIVEN AT THE TIME OF SURVEY AND THAT FILED IN THE RETURN OF INCOME. ASSESSEE INTER-ALIA SUBMITTED THAT THE STATEMENT DURING THE COURSE OF SURVEY WAS NOT BINDING ON HIM. THE SUBMISSIONS OF THE ASSESSEE WAS FOUND NOT ACCEPTABLE TO THE AO AS ASSESSEE COULD NOT SUBMIT HIS BOOKS OF ACCOUNT NOR DID THE ASSESSEE SUBMIT THE BANK ACCOUNT SHOWING THE AMOUNTS ADVANCES AND WITHDRAWALS FOR PURCHASE OF GOLD. IN THE ABSENCE OF ANY EVIDENCE, THE AMOUNT OF RS.6,43,700/- AND RS.18,75,600/- BEING INVESTMENT IN GOLD WAS ADDED TO THE INCOME OF THE ASSESSEE. WITH RESPECT TO UNACCOUNTED INVESTMENT IN FURNITURE AND INTERIOR DECORATION, IT WAS NOTICED THAT ASSESSEE HAD MADE INVESTMENT 6 AGGREGATING TO RS.47,86,200/- WHICH WAS NOTED IN THE DIARIES IMPOUNDED AT THE TIME OF SURVEY. SINCE IT WAS ALSO NOTICED BY THE AO THAT SUCH INVESTMENT WAS NOT DISCLOSED BY THE ASSESSEE IN THE BALANCE-SHEET, AO CONSIDERED THE AMOUNT OF RS.47,86,200/- AS INCOME OF THE ASSESSEE. AO NOTICED THAT ASSESSEE WAS OWNER OF VARIOUS HOUSING PROPERTIES LISTED AT PAGE 7 OF THE ASSESSMENT ORDER. AO NOTED THAT ONE OF THE PROPERTY WAS OCCUPIED AND FOR OTHER WAS USED FOR RUNNING BUSINESS OF MANGAL KARYALAYA. ASSESSEE HAD NOT OFFERED ANY INCOME FROM THE OTHER PROPERTIES. AFTER CONSIDERING THE LOCATION OF THE PROPERTY, AO ESTIMATED THAT THE INCOME EXPECTED TO BE LET OUT FROM THOSE PROPERTIES TO BE AT RS.3,27,600/-. HE ACCORDINGLY MADE ITS ADDITION TO HIS INCOME FROM HOUSE PROPERTY U/S 24 OF THE ACT. FOR THE PROPERTIES THAT WERE OWNED BY THE ASSESSEE FROM WHICH INCOME WAS NOT OFFERED BY THE ASSESSEE AO ESTIMATED THE ACTUAL RENT AND MADE ITS ADDITION. AGGRIEVED BY THE ORDER OF AO, ASSESSEE CARRIED THE MATTER BEFORE LD.CIT(A), WHO UPHELD THE ORDER OF AO BY HOLDING AS UNDER :- 5. GROUND NO. 1 IS REGARDING ADDITION ON ACCOUNT OF EXCESS CASH OF RS. 8,05,700/- FOUND DURING THE SURVEY. GROUND NO. 2 IS REGARDING ADDITION OF RS. 6,43,700/- ON ACCOUNT OF RECEIVABLES AS PER DIARIES FOUND FROM APPELLANT'S PREMISES. GROUND NO. 3 IS REGARDING UNACCOUNTED INVESTMENT IN GOLD AND GROUND NO. 4 IS REGARDING UNACCOUNTED INVESTMENT IN FURNITURE AND INTERIOR AMOUNTING TO RS. 47,86,200/-. EXCESS CASH WAS OFFERED BY THE APPELLANT AS PART OF HIS EXCESS INCOME IN THE STATEMENT DURING SURVEY. THIS INCOME WAS HOWEVER, NOT INCLUDED IN THE RETURN FILED. DETAILS OF THE RECEIVABLES AND INVESTMENT OF RS. 5,75,600/- IN GOLD PURCHASED WERE AVAILABLE FROM THE DIARY IMPOUNDED FROM APPELLANT'S PREMISES. ALSO, FRESH INVESTMENT OF RS. 18,75,600/- IN GOLD WAS REFLECTED IN THE BALANCE SHEET FOR ASSESSMENT YEAR 2009- 10. AMOUNT OF INVESTMENT IN FURNITURE AND INTERIOR WAS ALSO FOUND FROM THE DIARIES FOUND FROM THE PREMISES. THE ASSESSING OFFICER ASKED THE APPELLANT TO EXPLAIN ITS CASE AND SHOW CAUSE WHY NOT THE ADDITIONAL INCOME OFFERED DURING SURVEY WAS NOT DISCLOSED IN THE RETURN OF INCOME. IT WAS REPLIED BY THE APPELLANT VIDE HIS SUBMISSION DATED 11/03/2011 THAT THE DOCUMENTS FOUND AT THE TIME OF SURVEY WERE MINUTELY INSPECTED AND INSPECTED, HOWEVER, NO OBJECTIONABLE NOTING, PAPERS OR RECORD OF ANY KIND WERE FOUND WHICH COULD INDICATE THAT HE WAS INVOLVED IN ANY ACTIVITIES LEADING TO GENERATION OF INCOME OUT OF BOOKS. THE APPELLANT MENTIONED DECISION OF HONOURABLE KERALA HIGH COURT IN THE CASE OF PAUL MATHEWS AND 7 SONS VIS CIT (2003) 263 ITR 101 AS PER WHICH THE STATEMENT RECORDED UNDER SECTION 133A HAS NO EVIDENTIARY VALUE. THE APPELLANT ALSO RELIED UPON THE DECISIONS IN THE CASES OF CIT V/S S KADERKHAN SONS (2008) 300 ITR 357 AND ITO VIS VIJAY KUMAR DAS 327 ITR 497. THE ASSESSING OFFICER HAS CONSIDERED THE APPELLANT'S SUBMISSION AND HE HAD INFERRED THAT IF THE ASSESSEE'S SUBMISSION IS ACCEPTED THAT THE DISCLOSURE DURING SURVEY IS NOT MANDATORY ON HIM AND HAS NO EVIDENTIARY VALUE, THE BASIC FACT THAT HE COULD NOT GIVE ANY EVIDENCE DURING THE SURVEY THAT THE EXCESS CASH WAS OUT OF THE CASH BALANCE OF HIS BUSINESS, COULD NOT BE IGNORED. IT IS PERTINENT TO NOTE THAT THE ASSESSEE HAS NOT OBJECTED OR QUESTIONED TO THE CASH PHYSICALLY FOUND DURING THE SURVEY. IT IS NOT DENIED THAT ASSESSEE WAS HOLDING EXCESS CASH. HE HAS SUBMITTED TRADING AND PROFIT AND LOSS ACCOUNT AND BALANCE SHEET ETC. BUT COULD NOT PRODUCE THE RELEVANT CASH BOOK AND LEDGER FOR VERIFICATION. EVEN DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSEE COULD NOT PRODUCE ANY SALE BILLS, PURCHASE BILLS OF HIS BUSINESS. THE RELEVANT PAGES OF DIARY FOUND FROM THE PREMISES HAVE BEEN MADE PART OF THE ASSESSMENT ORDER IN WHICH ENTRIES REGARDING RECEIVABLES, INVESTMENT IN GOLD PURCHASED AND INVESTMENT IN FURNITURE AND INTERIOR DECORATION HAVE BEEN ENTERED IN ASSESSEE'S HANDWRITING IN MARATHI. THE STATEMENT UNDER SECTION 133A MAY NOT HAVE EVIDENTIARY VALUE BUT THE EVIDENCE IN THE FORM OF TWO POCKET DIARIES STILL HOLD GOOD. THESE DIARIES WERE WRITTEN BY THE ASSESSEE IN HIS OWN HANDWRITING. THEREFORE, IN THE ABSENCE OF ANY EXPLANATION, THE AMOUNTS IN RESPECT OF EXCESS CASH, INVESTMENT IN GOLD PURCHASED AND FURNITURE, INTERIOR AND RECEIVABLES HAVE BEEN ADDED TO ASSESSEE'S INCOME AND PROCEEDINGS UNDER SECTION 271(1)(C) HAS ALSO BEEN INITIATED. 6. DURING THE APPELLATE PROCEEDINGS, THE ONLY EXPLANATION WAS THAT THE STATEMENT WAS RECORDED LATE NIGHT AT AROUND 2:30 A.M. AND AT THAT TIME HE HAD GIVEN THE AFORESAID DISCLOSURE JUST TO BUY PEACE OF MIND. FURTHER, ENTIRE ADDITIONAL INCOME DISCLOSED AT THE TIME OF SURVEY HAS BEEN FULLY DISCLOSED WHILE FILING THE RETURN AFTER SURVEY. IN THE SUBMISSION DATED 28/02/2013 IT WAS SUBMITTED THAT AFTER THE SURVEY THE ASSESSEE HAS FILED RETURN OF INCOME ALONG WITH BALANCE SHEET IN WHICH IT WAS SHOWN AS THE CASH IN HAND OF RS. 8,19,406.90, RECEIVABLES OF RS. 6,43,700/- AND INVESTMENT IN GOLD OF RS. 18,75,600/- WHICH INCLUDED RS. 13,00,000/- MADE IN THE NAME OF HIS WIFE AND BALANCE OF RS. 5,75,600/- IN HIS OWN NAME. REGARDING THE INVESTMENT IN FURNITURE, IT WAS STATED THAT THE SAME HAS ALREADY BEEN DECLARED. 7. ON GOING THROUGH THE SUBMISSION OF THE APPELLANT, NOTHING CAN BE MADE OUT REGARDING THE SOURCE OF INVESTMENT IN CASH, RECEIVABLES, GOLD AND FURNITURE. THE RETURN OF INCOME HAS BEEN FILED SHOWING TOTAL INCOME OF RS. 10,34,310/-. INVESTMENT IN THE ABOVE ITEMS ACCEPTED DURING THE SURVEY WAS RS. 68,11,200/-. IF THE APPELLANT'S CLAIM IS THAT THESE INVESTMENTS HAVE BEEN MADE OUT OF INCOME OF RS.10,34,310/-, THE SAME CANNOT BE ACCEPTED. IT WAS THE DUTY OF THE APPELLANT TO EXPLAIN HOW THE INCOME WAS ARRIVED AT RS. 10,34,310/- INSPITE OF TAKING INTO ACCOUNT THE ABOVE AMOUNTS OF UNEXPLAINED INVESTMENT. HE HAS NOT TAKEN THE OPPORTUNITY TO EXPLAIN THE SAME BEFORE THE ASSESSING OFFICER. BEFORE THE UNDERSIGNED ALSO INSPITE OF NUMEROUS OPPORTUNITIES, NO ATTEMPT HAS BEEN MADE TO EXPLAIN THE SAME. IT IS NOT ENOUGH TO RELY ON THE DECISIONS OF HIGHER AUTHORITIES THAT STATEMENT UNDER SECTION 133A HAS NO EVIDENTIARY VALUE. IT IS THE BOUNDEN DUTY OF THE APPELLANT TO EXPLAIN THE STATEMENT OF AFFAIRS FOUND DURING THE SURVEY WITH RESPECT TO CASH BOOK, LEDGER AND OTHER BOOKS OF ACCOUNT. EVEN IF THE STATEMENT IS DISREGARDED, HAVING NO EVIDENTIARY VALUE, THE FACT IS 8 THAT STATEMENT OF AFFAIRS FOUND DURING THE SURVEY REMAINED UNEXPLAINED. THEREFORE, THE ASSESSING OFFICER WAS PERFECTLY JUSTIFIED IN MAKING THESE ADDITIONS. GROUNDS NO. 1 TO 4 ARE REJECTED AND RESPECTIVE ADDITIONS ARE CONFIRMED. 8. GROUND NO. 5 IS REGARDING ADDITION OF RS.3,27,600/- ON ACCOUNT OF INCOME FROM HOUSE PROPERTY. AS PER BALANCE SHEET FILED BY THE APPELLANT, THE APPELLANT OWNED A TOTAL OF TEN PROPERTIES. THESE HAVE BEEN LISTED IN THE ASSESSMENT ORDER ON PAGE NO. 7. ONE OF THE PROPERTIES MENTIONED AT SR. NO. 8 HAS BEEN OPTED AS SELF-OCCUPIED PROPERTY. THE APPELLANT HAS NOT DECLARED ANY INCOME FROM THE HOUSE PROPERTIES AT SR. NOS. 1 TO 7. THE ASSESSING OFFICER HAS NOTED THAT ALL THESE PROPERTIES ARE LOCATED IN THE HEART OF THE CITY AND NEAR MARKET PLACES. CONSIDERING THE AREA OF THESE PROPERTIES AND THEIR USE, THE ASSESSING OFFICER HAS ESTIMATED INCOME FROM THE PROPERTIES. TOTAL OF THE INCOME FROM THE SEVEN PROPERTIES WAS ADDED AS INCOME FROM HOUSE PROPERTIES WHICH WAS RS. 3,27,600/-. 9. VIDE THE SUBMISSION DATED 28/02/2013 IT WAS STATED THAT THE PROPERTIES LISTED AT SERIAL NUMBERS 5, 6 AND 7 ARE NOT OWNED BY THE ASSESSEE NOR THE SAME HAS BEEN DISCLOSED IN THE BALANCE SHEET. HENCE, ADDITION OF RENT IN RESPECT OF THESE PROPERTIES SHOULD BE DELETED. THERE IS NO EXPLANATION REGARDING THE OTHER PROPERTIES LISTED BY THE ASSESSING OFFICER. IT WAS THE DUTY OF THE APPELLANT TO APPEAR BEFORE THE ASSESSING OFFICER OR BEFORE THE UNDERSIGNED TO RECONCILE THE BALANCE SHEET FIGURES WITH THE VALUE OF PROPERTIES OWNED BY THE APPELLANT. HAVING FAILED TO DO SO, I FIND THAT THE ASSESSING OFFICER WAS JUSTIFIED IN ADDING THE RENTAL VALUE FROM THESE PROPERTIES IN THE HANDS OF THE APPELLANT. THE GROUND IS REJECTED AND THE ADDITION IS CONFIRMED. 10. GROUND NO. 6 IS REGARDING ADDITION ON ACCOUNT OF INCOME FROM HOUSE PROPERTY IN RESPECT OF PROPERTIES NOT DISCLOSED. THE APPELLANT IS A POLITICAL PERSON OF RATNAGIRI. HE HAD FILED AN AFFIDAVIT BEFORE THE ELECTION COMMISSION DURING HIS CANDIDATURE TO THE STATE COUNCIL. AS PER THIS AFFIDAVIT, THE APPELLANT WAS OWNER OF RESIDENTIAL PROPERTY AT FLAT NO. 8, URANWALA MANSION, 3 RD FLOOR, SHERBANOO AND NADIRSHAW CO-OP. HOUSING SOCIETY LTD., DR. AMBEDKAR ROAD, BHOIWADA CROSS ROAD, MUMBAI. THE PROPERTY IS HAVING A BUILT UP AREA OF 1440 SQ.FT. AND ITS PRICE HAS BEEN SHOWN AS RS. 45 LAKHS. THE ASSESSING OFFICER GOT THE SAID FACT CONFIRMED FROM THE HOUSING SOCIETY. HE HAS ESTIMATED RS. 25,000/- PER MONTH AS RENTAL INCOME FROM THE PROPERTY AND AFTER ALLOWING DEDUCTION OF RS. 90,000/- UNDER SECTION 24(A), RS. 2,10,000/- WAS ADDED TO THE TOTAL INCOME OF THE ASSESSEE. IN APPEAL, VIDE SUBMISSION DATED 28/02/2013 IT HAS BEEN STATED THAT THE SUBMISSION REGARDING THIS ADDITION WOULD BE MADE AT A LATER DATE. HOWEVER, THE SAID SUBMISSION HAS NEVER BEEN FILED. THEREFORE, THE ADDITION MADE BY THE ASSESSING OFFICER IS HEREBY CONFIRMED. 12. GROUND NO. 7 IS REGARDING FURTHER ADDITION OF RS. 2,07,480/- MADE TO THE INCOME FROM HOUSE PROPERTY. DURING THE SURVEY ACTION IN THE APPELLANT'S PREMISES, THERE WAS SOME SUSPICION REGARDING SOME FURTHER PROPERTIES OWNED BY THE APPELLANT. ENQUIRIES WERE MADE THROUGH THE INSPECTOR OF INCOME-TAX WHO VISITED THE VARIOUS PREMISES SUSPECTED TO BE OWNED BY THE APPELLANT AND RECORDED STATEMENT UNDER SECTION 131 OF PERSONS IN CHARGE OF THESE PROPERTIES. FIVE SUCH PROPERTIES HAVE BEEN LISTED BY THE ASSESSING 9 OFFICER AT PAGES NO. 8 AND 9 OF THE ASSESSMENT ORDER. TENANTS IN THESE PROPERTIES HAVE CONFIRMED THAT THE APPELLANT IS THE OWNER OF THE PROPERTIES AND THEY ARE PAYING MONTHLY RENT IN RESPECT OF THE SAME. BASED ON THE INFORMATION RECEIVED FROM THE TENANTS, THE TOTAL ANNUAL RENT WAS WORKED OUT AT RS. 2,96,400/-. AFTER GIVING DEDUCTION UNDER SECTION 24(A) THE BALANCE OF RS. 2,07,480/ - HAS BEEN ADDED TO THE INCOME FROM HOUSE PROPERTY. 13. IN THE SUBMISSION IT WAS STATED THAT OUT OF THESE PROPERTIES, THOSE MENTIONED AT SR. NOS. 3 AND S ARE PLACES OF BUSINESS OF ASSESSEE'S WIFE. THE PROPERTY MENTIONED AT SR. NO. 4 IN THE ASSESSMENT ORDER IS USED BY THE APPELLANT TO RUN HIS BUSINESS AND THE PROPERTIES LISTED AT SR. NOS. 1 AND 2 ARE NOT OWNED BY HIM. THE APPELLANT HAS FILED NO DOCUMENT IN SUPPORT OF THE SUBMISSION. IN ORDER TO VERIFY HIS SUBMISSION, ASSESSMENT RECORDS OF THE APPELLANT AS WELL AS HIS WIFE SMT. UJWALA U SHETYE WERE REQUISITIONED FROM THE ASSESSING OFFICER. THE BALANCE SHEET FOR ASSESSMENT YEAR 2009- 10 FILED BEFORE THE ASSESSING OFFICER BY SMT. UJWALA U SHETYE DOES NOT REFLECT ANY COMMERCIAL PROPERTY. IN THE BALANCE SHEET OF THE APPELLANT, THE ONLY COMMERCIAL ASSET I.E. MANGAL KARYALAYA HAS BEEN SHOWN. THEREFORE, EXPLANATION OF THE APPELLANT IS NOT SUBSTANTIATED BY THE RECORDS. THEREFORE, THE ADDITION IS HEREBY CONFIRMED. 14. GROUND NO. 8 IS REGARDING ADDITION ON ACCOUNT OF INCOME FROM MANGAL KARYALAYA. AS HAS BEEN MENTIONED WHILE DISCUSSING GROUND NO. S ABOVE, THE APPELLANT WAS FOUND TO OWN TEN PROPERTIES WHICH WERE LISTED BY THE ASSESSING OFFICER AT PAGE NO. 7 OF THE ASSESSMENT ORDER. THESE INCLUDED TWO COMMERCIAL PROPERTIES AT SHANKESHWAR ARCADE, FLAT NO. 1, 1 ST FLOOR, E-WING AND FLAT NO. 2, 2ND FLOOR, E-WING. AS PER THE AGREEMENT TO SALE, THE AREA OF THE PROPERTIES IS AT 3024 SQ.FT. EACH. THE APPELLANT RUNS CELEBRATION HALLS / MANGAL KARYALAYA IN THESE HALLS. DURING THE SURVEY PROCEEDINGS, STATEMENT ON OATH WAS RECORDED OF THE MANAGER OF THESE HALLS VIZ. SHRI VAMAN VITHAL KAME. BOOKS OF ACCOUNT OF ASSESSEE'S MAN GAL KARYALAYA BUSINESS WERE ALSO FOUND WHICH WERE INVENTORIZED. IT WAS FOUND THAT THE ASSESSEE GAVE THESE HALLS ON RENT FOR VARIOUS FUNCTIONS AND GETS BOOKING AMOUNTS FOR THE SAME. THE ASSESSEE HAS ALL THE REQUIRED INFRASTRUCTURE FOR SUCH BUSINESS SUCH AS FURNITURES, UTENSILS, ETC. SHRI V V KAME HAS BEEN APPOINTED AS MANAGER FOR THESE HALLS TO LOOK AFTER DAY TO DAY ACTIVITIES. SHRI KAME HAS BEEN GRANTED THE JOB OF SUPPLYING OF CATERING REQUIREMENTS OF THE HALLS DURING FUNCTIONS AND HE PAYS RS.20/- PER PLATE TO THE ASSESSEE OUT OF CATERING RECEIPTS. HOWEVER, THE APPELLANT HAS SHOWN INCOME FROM HOUSE PROPERTY IN RESPECT OF KETAN MANGAL KARAYALAYA AT RS. 1,20,000/- AND HE HAS NOT SHOWN ANY INCOME FROM VAKRATUND HALL. THE ASSESSING OFFICER HAS ESTIMATED INCOME FROM THESE BUSINESS CONSIDERING AVERAGE 100 DAYS EVENTS DURING THE YEAR AND TAKING THE BOOKING AMOUNT OF RS.10,000/- PER DAY. ESTIMATED EXPENDITURE HAS ALSO BEEN ALLOWED BY THE ASSESSING OFFICER AND AN AMOUNT OF RS. 9,16,000/- HAS BEEN ADDED TO THE ASSESSEE'S INCOME. 15. IN THE SUBMISSION IT WAS STATED BY THE APPELLANT THAT THE PROPERTY ALONG WITH FURNITURE AND UTENSILS HAVE BEEN GIVEN ON RENT TO OUTSIDE PARTY WHO CARRIES BUSINESS AND PAYS ONLY RENT FOR THE PROPERTY AND FURNITURE AND UTENSILS. IT WAS CLAIMED THAT HE DOES NOT KNOWN MANAGER, SHRI KAME. THE APPELLANT HAS NOT PROVIDED THE INFORMATION REGARDING WHO IS THE TENANT OF THE PROPERTY RUNNING THE BUSINESS. ALTHOUGH HE CLAIMS THAT HE EARNS RENTAL INCOME FROM THE PROPERTY BUT THE STATEMENT OF MANAGER REVEALS DIFFERENT FACTS. THE APPELLANT HIMSELF RUNS THE BUSINESS BY APPOINTING MANAGER WHO LOOKS AFTER THE WORK. EVEN BEFORE THE UNDERSIGNED NO 10 DOCUMENTARY EVIDENCE WAS FURNISHED TO ESTABLISH HIS CLAIM. THEREFORE, THE ADDITION MADE BY THE ASSESSING OFFICER IS CONFIRMED AND THE GROUND IS REJECTED. 16. GROUND NO. 9 IS REGARDING INCOME FROM CATERING COMMISSION OF RS.2,24,000/-. AN AMOUNT OF RS. 2,24,000/- WAS ADDED BY ESTIMATING INCOME FROM CATERING ON THE BASIS OF STATEMENT OF MANAGER, SHRI V V KAME THAT HE PAID RS. 20/- PER PLATE. THIS ADDITION IS CONFIRMED DUE TO THE REASON AS DISCUSSED IN PREVIOUS GROUND NO. 8. 17. GROUND NO. 10 IS REGARDING ADDITION ON ACCOUNT OF INCOME FROM SALE OF PLOTS ON POWER OF ATTORNEY. AT THE TIME OF ASSESSMENT PROCEEDINGS, AS PER INFORMATION CALLED FOR FROM SUB-REGISTRAR, RATNAGIRI IN RESPECT OF VARIOUS TRANSACTIONS OF THE ASSESSEE, IT WAS FOUND THAT THE ASSESSEE HAD SOLD A PROPERTY AT S.NO. 110, H.NO. 2A, 36/21, CITY SURVEY NO. 54/42/21 TO SHRI RAHIL ABDUL WAHEB MUJAWAR FOR RS. 3,19,500/-. THE VALUE ADOPTED BY THE STAMP VALUATION AUTHORITY IS RS. 5,57,500/-. THE PROPERTY IS SOLD BY THE ASSESSEE IN THE CAPACITY OF POWER OF ATTORNEY HOLDER OF SHRI GOVIND GOPAL BERDE AND FAMILY. THE ASSESSEE HAS NO RELATION TO THIS PARTY FOR WHICH POWER OF ATTORNEY AUTHORIZING HIM WAS OBTAINED. THE ASSESSING OFFICER HAS INFERRED THAT ONE CANNOT HOLD UNCONDITIONAL POWER OF ATTORNEY WITHOUT HAVING ANY INTEREST IN THE SAME. THEREFORE, RS. 3,19,500/- WAS TREATED AS APPELLANT'S INCOME. 18. IT WAS SUBMITTED BY THE APPELLANT THAT HE SOLD HIS PROPERTY AS POWER OF ATTORNEY HOLDER. HE HAS NOT GENERATED ANY PROFIT THROUGH THIS TRANSACTION. CONCLUSION OF THE ASSESSING OFFICER IS NOT CORRECT AND THIS ADDITION SHOULD BE DELETED. HOWEVER, NO EVIDENCE HAS BEEN FURNISHED IN RESPECT OF THE SUBMISSION MADE. NO CIRCUMSTANCES HAVE BEEN EXPLAINED UNDER WHICH HE HAD OBTAINED POWER OF ATTORNEY AND EXECUTED THE SALE DEED. IT IS NOT ESTABLISHED THAT THE INCOME DID NOT RELATE TO THEREFORE, THE ADDITION IS CONFIRMED AND THE GROUND IS REJECTED. 19. GROUND NO.11 IS REGARDING ADDITION ON ACCOUNT OF AGRICULTURAL AS INCOME FROM OTHER SOURCES. THE APPELLANT HAS CREDITED RS.6,72,000/- AS AGRICULTURAL INCOME. HOWEVER, NO SUPPORTING EVIDENCE SUCH AS COPY OF 7/12 EXTRACTS SHOWING AGRICULTURAL PRODUCE, COPIES OF SALE PATTIES, EXPENDITURE DETAILS ETC. WERE SUBMITTED. THEREFORE, THE AMOUNT WAS ADDED AS INCOME FROM OTHER SOURCES. 20. IT WAS SUBMITTED BY THE APPELLANT THAT HE HAD MADE ELABORATE REPLY BEFORE THE ASSESSING OFFICER AND EXPLAINED THE GENUINENESS OF AGRICULTURAL INCOME. HOWEVER, THE ASSESSING OFFICER HAS NOT CONSIDERED HIS REPLY. AGAIN, NO EVIDENCE WAS FURNISHED BEFORE THE UNDERSIGNED. AT LEAST THE APPELLANT COULD HAVE SUBMITTED COPY OF SUBMISSION MADE BEFORE THE ASSESSING OFFICER WHICH WAS ALSO NOT DONE. IN THE ABSENCE OF ANY MATERIAL TO CONSIDER, THE ADDITION MADE BY THE ASSESSING OFFICER IS CONFIRMED AND THE GROUND IS REJECTED. AGGRIEVED BY THE ORDER OF LD.CIT(A), ASSESSEE IS NOW IN APPEAL BEFORE US. 11 6. BEFORE US, LD.D.R. SUPPORTED THE ORDER OF AO AND LD.CIT(A) AND SUBMITTED THAT ASSESSEE HAS NEITHER FURNISHED ANY PLAUSIBLE EXPLANATION BEFORE THE AO AND EVEN BEFORE LD.CIT(A) DESPITE VARIOUS OPPORTUNITIES, THERE IS NO APPEARANCE FROM THE SIDE OF THE ASSESSEE. HE SUBMITTED THAT EVEN BEFORE TRIBUNAL DESPITE VARIOUS OPPORTUNITIES GRANTED THERE WAS NO APPEARANCE FROM THE SIDE OF ASSESSEE. HE THEREFORE SUBMITTED THAT THE ADDITIONS HAVE RIGHTLY BEEN MADE BY THE AO AND CONFIRMED BY LD.CIT(A). HE THUS SUPPORTED THE ORDER OF LOWER AUTHORITIES. 7. WE HAVE HEARD THE LD.D.R. AND PERUSED THE MATERIAL ON RECORD. THE ISSUE IN THE PRESENT CASE IS ADDITION MADE ON THE BASIS OF MATERIAL FOUND AT THE TIME OF SURVEY. ON PERUSING THE ORDER OF AO AND LD.CIT(A), IT IS SEEN THAT DESPITE VARIOUS OPPORTUNITIES GRANTED BY THE RESPECTIVE AUTHORITIES, ASSESSEE DID NOT OFFER ANY PLAUSIBLE EXPLANATION. THE ASSESSEE HAD OFFERED ADDITIONAL INCOME OF RS.68,11,200/- DURING THE COURSE OF SURVEY BUT THE SAME WAS NOT INCLUDED IN THE RETURN OF INCOME FILED BY THE ASSESSEE. THE NON-INCLUSION OF INCOME IN THE RETURN OF INCOME WAS NOT SUPPORTED BY ANY REASONS OR EVIDENCE. WE FURTHER FIND THAT LD.CIT(A) AFTER CONSIDERING THE TOTALITY OF FACTS HAS CONFIRMED THE ADDITION. EVEN BEFORE US, ASSESSEE HAS NOT APPEARED NOR HAS FURNISHED ANY MATERIAL ON RECORD TO CONTROVERT THE FINDINGS OF LOWER AUTHORITIES. CONSIDERING THE TOTALITY OF THE AFORESAID FACTS, WE ARE OF THE VIEW THAT NO INTERFERENCE TO THE ORDER OF LD.CIT(A) IS CALLED FOR AND THUS THE GROUNDS OF THE ASSESSEE ARE DISMISSED. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IN ITA NO.278/PUN/2014 IS DISMISSED. 12 9. AS FAR AS APPEAL IN ITA NO.279/PUN/2014 IS CONCERNED, AS THE FACTS AND ISSUES OF THE CASE FOR THE APPEAL IN ITA NO.278/PUN/2014 BEING IDENTICAL TO THE FACTS AND ISSUES OF THE CASE IN ITA NO.279/PUN/2014, WE, THEREFORE, FOR THE REASONS STATED HEREIN WHILE DISPOSING OF THE APPEAL IN ITA NO.278/PUN/2014 AND FOR SIMILAR REASONS, DISMISS THE GROUNDS OF APPEAL OF ASSESSEE. THUS, THE GROUNDS OF THE ASSESSEE ARE DISMISSED. 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE IN ITA NO.279/PUN/2014 IS DISMISSED. 11. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED ON 26 TH JULY, 2017. SD/- SD/- ( SUSHMA CHOWLA ) ( ANIL CHATURVEDI ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER PUNE; DATED : 26 TH JULY, 2017. YAMINI / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3 . 4. 5. 6. CIT(A)-KOLHAPUR. CIT-I / II, KOLHAPUR OR CIT (CENTRAL), PUNE. , , / DR, ITAT, B PUNE; [ / GUARD FILE. / BY ORDER , //TRUE COPY// / SR. PRIVATE SECRETARY , / ITAT, PUNE