Shri Chandrashekhar N. Ayachi, Gandhidham, RAJKOT-GUJARAT V. The Addl. CIT, GANDHIDHAM

ITA 281/RJT/2014

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 6003 (ITAT-RAJKOT)
• Duration Of Justice: 5 year(s) 3 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-07-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 25-04-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: MRS NAMITA KHURANA
• Keywords: Unexplained investment; Opportunity of being heard; Additional evidence
• Section: 143(3); 131; 68; 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH , RAJKOT BEFORE: SHRI RAJPAL YADAV, JUDICIAL MEMBER AND S H RI AMARJIT SINGH , ACCOUNTANT MEMBER [CONDUCTED THROUGH E - COURT AT AHMEDABAD] SHRI CHANDRASEKHAR N. AYACHI, GANDHIDHAM, PAN: ABUPA6576E (APPELLANT) VS THE ACIT, GANDHIDHAM RANGE, GANDHIDHAM (RESPONDENT) RE VENUE BY : MRS. NAMITA KHURANA , SR. D . R. ASSESSEE BY: S H RI KALPESH DOSHI , A.R. DATE OF HEARING : 16 - 07 - 2 019 DATE OF PRONOUNCEMENT : 31 - 07 - 2 019 / ORDER P ER : AMARJIT SINGH, ACCOUNTANT MEMBER : - THI S ASSESSEE S APPEAL FOR A.Y. 2009 - 10 , AR ISES FROM ORDER OF THE CIT(A) - II, RAJKOT DATED 31 - 03 - 2014 , I N PROCEEDINGS UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT 2. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL: - 1 THAT, THE LD. CIT(A) HAS PASSED THE ORDER WITHOUT GIVING PROPER OPPORTUNITY OF BEING HEARD, AS THE ASSESSING OFFICER HAS NOT COMPLIED WITH THE DIRECTION GIVEN IN THE REMAND REPORT AND LD. CIT(A) HAS PASSED TH E ORDER ON THE BASIS OF SUCH INCOMPLETE REMAND REPORT. 2 THAT, THE LD. CIT (A) HAS WRONGLY CONFIRMED THE ADDITION OF RS. 37,02,006/ - ON ACCOUNT OF UNEXPLAINED DEPOSIT U/S 68 OF THE I.T. ACT. I T A NO . 281 / RJT /20 14 A SSESSMENT YEAR 200 9 - 10 I.T.A NO. 281 /RJT /20 14 A.Y. 2009 - 10 PAGE NO SHRI CHANDRASEKHAR N. AYACHI VS. ACIT 2 3 THAT, THE LD. CIT (A) HAS WRONGLY CONFIRMED THE ADDITION OFRS . 12,75,542/ - ON ACCOUNT OF UNEXPLAINED INVESTMENT U/S 69 AND U/S 69A OF THE I.T. ACT. 4 THAT, THE FINDINGS OF LD. CIT(A) AS STATED ABOVE ARE NOT JUSTIFIED AND REQUIRED TO BE DELETED. 3 . THE FACT IN BRIEF IS THAT RETURN OF INCOME DECLARING INCOME OF R S. 1 , 32 , 64 ,254/ - / - WAS FILED ON 17 TH DECEMBER, 2009. SUBSEQUENTLY, THE CASE WAS SELECTED UNDER SCRUTINY BY ISSUING OF NOTICE U/S. 143(2) OF THE ACT ON 18 TH AUGUST, 2010. DURING THE COURSE OF ASSESSMENT ON PERUSAL OF BANK STATEMENT AND DETAIL FURNISHED B Y THE ASSESSEE, THE ASSESSING O FFICER NOTICED VARIOUS DEPOSITS REFLECTED IN THE BANK A/C OF THE ASSESSEE. T HE ASSESSEE HAS NOT EXPLAINED THE NATURE OF CREDIT ENTRIES APPEARING IN HIS BANK ACCOUNT IN SPITE OF REPEATEDLY REMINDED BY THE ASSESSING OFFIC ER. T HE ASSESSING OFFICER HAS GIVEN A FINAL OPPORTUNITY TO THE ASSESSEE BY ISSUING OF LETTER DATED 5 TH DECEMBER, 2011 STATING THAT ASSESSEE HAS NOT FURNISHED EVEN CONFIRMATION LETTER TILL DATE IN RESPECT OF FOLLOWING DEPOSITS : - SR. NO. NAME OF THE DEPOSI TORS AMOUNT OF DEPOSIT INTEREST CREDITED TOTAL 1. BABU SHAMBHU KHOLI 5,00,000/ - 44,384/ - 5,44,384/ - 2. COSMOS CONSTRUCTION CO 5,00,000/ - 44,877/ - 5,44,877/ - 3. SHAILESH P. MADHVI 5,00,000/ - 44,877/ - 5,44,877/ - 4. VISHNUSINGH J RAJPU ROHIT 16,00,000/ - 1,41,238/ - 17,41,238/ - 5. HITESH ENTERPRISE (LACHU) 3,00,000/ - 26,630// - 3,26,630/ - TOTAL 34,00,000/ - 3,02,006/ - 37,02,006/ - I N SPITE OF GIVING A NUMBER OF OPPORTUNITIES , THE ASS ESSEE HAS FAILED TO FURNISH EVEN IDENTIT Y PROOF, ADDRESS AND ANY OTHER INDEPENDENT EVIDENC E S TO PROVE THE GENUINENESS OF THE DEPOSITS REFLECTED IN THE BANK ACCOUNT. THE ASSESSING OFFICER STATED THAT THE ASSESSE HAS DENIED MAINTENANCE OF REGU L AR I.T.A NO. 281 /RJT /20 14 A.Y. 2009 - 10 PAGE NO SHRI CHANDRASEKHAR N. AYACHI VS. ACIT 3 BOOKS OF ACCOUNT THEREFORE THE DEPOSIT APPEARED IN THE BANK ACCOUNT WAS TREATED AS UNEXPLAINED INVESTMENT U/S. 69 OF THE ACT AND ALTERNATIVELY CONSIDERED AS UNEXPLAINED U/S. 69A OF THE ACT. IN RESPECT OF FOLLOWING FOUR DEPOSITORS , THE ASSESSEE HAS FILED CONFIRMATION LETTERS AND BANK STATEMENT S : - SR. NO. NAME OF THE DEPOSITORS AMOUNT OF DEPOSIT INTEREST CREDITED TOTAL 1. SHRI ANAND B. VARMA 7,00,000/ - 62,827/ - 7,62,827/ - 2. GEETABEN V. THACKER 2,00,000/ - 5,086/ - 2,05,086/ - 3. SHRI SURESH THACKER 1,00,000/ - 2,543/ - 1,02,543/ - 4. SH RI VIPUL RAICHAND THACKER 2,00,000/ - 5,086/ - 2,05,086/ - TOTAL 12,00,000/ - 75,542/ - 12,75, 542/ - ON GOING THROUGH T HE BANK STATEMENT S OF ABOVE CITED DEPOSITORS, T HE ASS ESSING OFFICER OBSERVED THAT CASH OF EQUIVALENT AMOUNT W AS DEPOSITED IN THE BANK A/C BEFORE ISSUING THE DEPOSIT CHEQUE TO THE ASSESSEE . THE ASSESSING OFFICER FURTHER STATED THAT ASSESSEE HAS FAILED TO ADDUCE EVIDENCES TO DEMONSTRATE THAT AFORESAID DEPOSITORS WERE HAVING CREDITWORTHINES S . SINCE THE BASIC ONUS IN RELATION TO CAPA CITY OF THE DEPOSITORS WAS NOT DISCHARGED THEREFORE THE ASSESSING OFFICER HAS MADE ADDITION OF RS. 12,75,54 2/ - AS UNEXPLAINED INVESTMENT U/S. 69/ 69A OF THE ACT. 4. AGGRIEVED ASSESSEE HAS FILED APPEAL BEFORE THE LD. CIT(A). THE LD. CIT(A) HAS DISMISSED THE APPEAL OF THE ASSESSEE. 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MA TERIAL ON RECORD. THE ASSESSING OFFICER HAS MADE ADDITION OF RS. 37 , 02 , 006/ - ON ACCOUNT OF UNEXPLA INED DEPOSIT AS THE ASSESSEE HAS FAILED TO FILE THE BASIC I.T.A NO. 281 /RJT /20 14 A.Y. 2009 - 10 PAGE NO SHRI CHANDRASEKHAR N. AYACHI VS. ACIT 4 INFORMATION I .E. CONFIRMATION, IDENTITY PROOF, CREDITWORTHINESS IN RESPECT OF CAPACITY IN RESPECT OF FIVE DEPOSITORS. DURING THE COURSE OF APPELLATE PROCEEDINGS BEFORE THE LD. CIT(A), THE ASSESSEE HAS FILED ADDITIONAL EVIDENCES I.E. COPIES OF CONFIRMATION, COPIES OF LEDGER ACCOUNT S AND COPIES OF BANK STA TEMENT S OF THE AFORESAID LENDERS. T HE LD. CIT(A) HAS ADMITTED THOSE ADDITIONAL EVIDENCES UNDER RULE 46A OF THE I.T. RULE AND CALLED REMAND REPORT FROM THE ASSESSING OFFICER. THE ASSESSING OFFICER H AS REPORTED THAT D EPOSIT OR NAMED VIS HNU J R APUROHIT HAD FILED HIS RETURN OF INCOME WITH ITO WARD - 3(1), JODHPUR, HAVING GROSS TOTAL INCOME OF RS. 2 , 06 , 930/ - FOR ASSESSMENT YEAR 2009 - 10 WHEREA S HE HAS ADVANCED LOAN OF RS. 17 LACS TO THE ASSESSEE. FURTHER , ON PERUSAL OF THE B ANK STATEMENT OF OTHER DEPOSITORS CASH OF THE EQUIVA LENT AMOUNT WAS DEPOSITED IN THE BANK ACCOUNT AND THE CHEQUE OF THE SAME AMOUNT WAS GI V EN TO THE ASSESSEE AS LOAN . IT WAS ALSO REPORTED BY THE ASSESSING OFFICER THAT CONFIRMATION LETTERS IN RESPECT OF TH REE DEPOSITORS WERE UN - SIGNED. ON PERUSAL OF THE MATERIAL ON RECORD, IT IS NOTICED THAT ASSESSEE HAS FI L E D COP Y OF PAN CARD, COPY OF CONFIRMATION, COPY OF INCOME TAX RETURN , COP Y OF LEDGER ACCOUNT IN THE CASE O F THE LENDER SHRI VISHNU SINGH RA J PUROHIT. HOWEVER TO DISPROVE THE FACTS REPORTED BY T H E ASSESSEE, THE ASSESSING OFFICER HAS NOT CARRIED OUT ANY FURTHER VERIFICATION AND INVESTIGATION. THE ASSESSING OFFICER HAS NEITHER ASKED THE ASSESSEE TO PRODUCE THE DEPOSITORS FOR EXAMINATION NO R ISSUED ANY SU MMONS U/S. 131 O F THE ACT TO THE SAID DEPOSITORS TO FURTHER PROVE AND EXAMINE THE CREDITWORTHINESS OF THE LENDERS . . REGARDING LOAN OF RS. 3 , 26 , 630/ - OBTAINED FROM HITESH ENTERPRISE , IT IS NOTICED THAT COPY OF PAN CARD, COPY OF CONFIRMATION, COPY OF INCO ME TAX RETURN, COPY OF BANK STATEMENT, COPY OF AFFIDAVIT, COPY OF BALANCE SHEET OF I.T.A NO. 281 /RJT /20 14 A.Y. 2009 - 10 PAGE NO SHRI CHANDRASEKHAR N. AYACHI VS. ACIT 5 THE LENDER WERE FILED WITH THE ASSESSING OFFICER. T HE ASSESSING OFFICER HAS NEITHER ISSUED ANY SUMMONS U/S. 131 IN RESPECT OF THE ABOVE TWO PARTIES TO FURTHER VERIFY AND EXAMINE CREDITWORTHINESS OF TH E AFORESAID PARTIES TO THE EXTENT OF RS. 17 , 41 , 238/ - + RS. 3 , 26 , 630/ - = 20,67,868/ - OBTAINED FROM THE ABOVE PARTIES , T HEREFORE THE ADDITION TO THAT EXTENT IS DELETED. I N RESPECT OF FOLLOWING THREE DEPOSITORS (I) BABU SHAMBU KHOLI RS. 5,44,38 4/ - (II) COSMOS C ONSTRUCTION COMPANY RS. 5,44,877/ - (III) SHAILESH MADHUVI RS. 5,44,877/ - T HE ASSESSEE HAS FAILED TO FURNISH THE BASIC PRIMARY INFORMATION TO SUBSTANTIATE THE GENUINENESS OF UNSECURED LOAN AS T HE ASSESSE E HAS ONLY FURNISH ED COPIES OF CONFIRMATION AND COPY OF LEDGER ACCOUNT BUT FAILED TO FURNISH THE OTHER PRIMARY INFORMATION LIKE PAN, BANK STATEMENT, INCOME TAX RETURN ETC. THERE WAS NO SUFFICIENT MATERIAL FURNISHED ON THE BASIS OF WHICH , THE ASSESSING OFFICER COULD HAVE IN DEPENDENTLY EXAMINE D THE CREDITWO RTHINESS AND GENUINENESS OF THE UNSECURED LOAN CLAIMED TO BE OBTAINED FROM THE ABOVE CITED THREE PERSONS. THEREFORE, WE SUSTAIN THE ADDITION TO THE AMOUNT OF RS. 5 , 44,384/ - + RS. 5 , 44 , 877/ - +RS. 5 , 44 , 877/ - = RS. 16,34,138 / - AS UNEXPLAINED U/S. 68 OF THE ACT. ACCORDINGLY, THE APPEAL OF THE ASSESSEEE ON THIS ISSUE IS PARTLY ALLOWED. 6. IN RESPECT OF ADDITION OF RS. 12,75 , 542/ - MADE BY T H E ASSESSING OFFICER U/S. 69 OF THE ACT AS UNEXPLAINED DEPOSIT, WE HAVE NOTICED FROM THE MATERIAL ON RECORD THAT ASSESSEE HAS FILED COPY OF CONFIRMATION, COPY OF INCOME TAX RETURN , COPY OF BANK STATEMENT, COPY OF AFFIDAVIT ETC. IN RESPECT OF ALL THE FOUR PARTIES FROM WHOM THE ASSESSEE HAS OBTAINED DEPOSIT. THE ASSESSING I.T.A NO. 281 /RJT /20 14 A.Y. 2009 - 10 PAGE NO SHRI CHANDRASEKHAR N. AYACHI VS. ACIT 6 OFFICER HAS NEIT HER EXAMINED THOSE PARTIES BY ISSUING OF SUMMONS U/S. 131 OF THE ACT TO VERIFY CREDITWORTHINESS OF THE AFORESAID PARTIES, NOR DIRECTED THE ASSESSE E TO PRODUCE THESE DEPOSITORS TO EXAMINE THE CREDITWORTHINESS OF THE LENDERS. IN THE LIGHT OF THE ABOVE FACTS AND CIRCUMSTANCES, THE ASSESSING OFFICER HAS MADE THE ADDITION ON ASSUMPTION BASIS WITHOUT INITIATING FURTHER ACTION AS CITED ABOVE TO CONTROVERT THE MATERIAL FURNISHED BY THE ASSESSEE. IN THE LIGHT OF THE ABOVE INFIRMITIES AND DEFICIENCIES IN THE FINDIN GS OF THE ASSESSING OFFICER, THE ADDITION TO THE EXTENT OF RS. 12 , 75 , 542/ - IS DELETED. 7 . IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PR ONOUNCED IN THE OPEN C OUR T ON 3 1 - 0 7 - 201 9 SD/ - SD/ - (RAJPAL YADAV ) ( AMARJIT S INGH ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD : DATED 31 /0 7 /201 9 / COPY OF ORDER FORWARDED TO: - 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER, ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, RAJKOT