Smt. Mahekben Premkumar Mehta, Surat V. The Income tax Officer, Ward-3(2), Surat

ITA 2913/AHD/2016

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 4452 (ITAT-SURAT)
• Duration Of Justice: 4 year(s) 2 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-01-2021
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 09-11-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: ANUPAMA SINGLA
• Keywords: Reopening of assessment; Unexplained cash credit; Audit objection; Peak credit; Difference of opinion; Reason to believe; Change of opinion; Reassessment proceedings
• Section: 143(3); 133(6); 147; 148

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL SURAT BENCH, SURAT BEFORE SHRI PAWAN SINGH, HON'BLE JUDICIAL MEMBER AND DR. ARJUN LAL SAINI, HON'BLE ACCOUNTANT MEMBER (VIRTUAL HEARING) . . ./ I.T.A NO.2913/AHD/2016 [ [ / ASSESSMENT YEAR: 2009-10 SMT.MAHEKBEN PREMKUMAR MEHTA, 41, FUDINAWADI, NEARJASH MARKET, RING ROAD, SURAT. [PAN: AMQPM 1139 E] VS. THE INCOME TAX OFFICER, WARD-3(2), SURAT. / APPELLANT /RESPONDENT [ /ASSESSEE BY NONE. /REVENUE BY SMT. ANUPAMA SINGLA SR. DR / DATE OF HEARING: 20 . 01 .20 2 1 /PRONOUNCEMENT ON: 20 . 01 .20 2 1 /O R D E R PER PAWAN SINGH, JUDICIAL MEMBER: 1. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-II, SURAT DATED 07.12.2015 FOR THE A.Y. 2009-10. THE ASSESSEE RAISED THE FOLLOWING GROUNDS OF APPEAL: (1) THAT ON FACTS AND IN LAW, THE LEARNED CIT(A) HAS GRIEVOUSLY ERRED IN HOLDING THAT THE RE-OPENING OF ASSESSMENT U/S 147 OF THE ACT IS VALID. (2) THAT ON FACTS AND EVIDENCE ON RECORD, IT OUGHT TO HAVE BEEN HELD THAT IT IS BASED ON AUDIT OBJECTION AND ALSO A CHANGE OF OPINION ON THE SAME SET OF FACTS AND CIRCUMSTANCES, AND HENCE THE RE- ASSESSMENT ORDER IS INVALID AND VOID AB-INITIO. (3) THAT ON FACTS, AND IN LAW, THE LEARNED CIT(A) HAS GRIEVOUSLY ERRED IN CONFIRMING THE ADDITION ON MERITS OF RS.38,22,563/- REGARDING THE ENTIRE CASH DEPOSITS IN THE BANK ACCOUNT. (4) THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND ANY GROUND OF APPEAL 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS RUNNING A PROPRIETARY FIRM IN HER NAME, ENGAGED IN THE BUSINESS OF TRADING OF SMT. MAHEKBEN PREMKUMAR MEHTA VS. ITO, WARD-3(2), SURAT./ ITA NO.2913/AHD/2016 FOR A.Y.2009-10 2 ART SILK CLOTH. THE ASSESSEE FILED HER RETURN OF INCOME FOR A.Y. 2009-10 ON 04.01.2009 DECLARING OF INCOME OF RS.1.84,600/-. THE RETURN WAS SELECTED FOR SCRUTINY AND ASSESSMENT ORDER WAS PASSED UNDER SECTION 143(3) OF THE ACT ON 13.12.2011 ASSESSING TOTAL INCOME AT RS.7,67,040/-. ON APPEAL, THE ASSESSEE WAS GRANTED PARTIAL RELIEF, WHICH RESULTING IN REDUCE OF ASSESSED INCOME TO RS.6.54 LAKHS. THE CASE OF ASSESSEE WAS REOPENED UNDER SECTION 147 OF THE ACT. THE ASSESSING OFFICER REOPENED THE CASE ON THE BASIS OF AUDIT OBJECTION THAT ASSESSEE INSTEAD OF MAINTAINING THE CURRENT BANK ACCOUNT, MAINTAINING SAVINGS BANK ACCOUNT FOR HER PROPRIETORSHIP CONCERN. ON SUCH OBJECTION, THE ASSESSING OFFICER MADE VERIFICATION FROM STATE BANK OF INDIA AND FOUND THAT ASSESSEE MADE HUGE CASH DEPOSIT IN THE SAVING BANK ACCOUNT. NOTICE UNDER SECTION 148 OF THE ACT WAS ISSUED ON 18.09.2012 SERVED ON ASSESSEE ON 24.09.2012. THE SAID BANK ACCOUNT IN SBI WAS NOT REFLECTED IN THE BOOKS OF ACCOUNTS MAINTAINED BY THE ASSESSEE. ON THE BASIS OF INFORMATION RECEIVED FROM THE BANK, THE ASSESSING OFFICER HAD REASON TO BELIEVE THAT INCOME OF ASSESSEE HAS ESCAPED ASSESSMENT. DURING THE REASSESSMENT, WHEN THE ASSESSEE WAS CONFRONTED WITH THE AFORESAID FACTS, THE ASSESSEE STATED THAT BANK ACCOUNT COULD NOT BE DISCLOSED DUE TO OVERLOOK. THE ASSESSEE PRAYED FOR MAKING ADDITION ON THE BASIS OF PEAK CREDIT IN THE SAID ACCOUNT. THE EXPLANATION FURNISHED BY ASSESSEE WAS NOT ACCEPTED BY THE ASSESSING OFFICER. THE ASSESSING OFFICER MADE ADDITION OF RS.38,22,463/- ON ACCOUNT OF UNEXPLAINED CASH DEPOSIT. SMT. MAHEKBEN PREMKUMAR MEHTA VS. ITO, WARD-3(2), SURAT./ ITA NO.2913/AHD/2016 FOR A.Y.2009-10 3 3. ON APPEAL BEFORE THE LD.CIT(A), THE ASSESSEE CHALLENGED THE VALIDITY OF REOPENING OF AS WELL AS ADDITION ON ACCOUNT OF UNEXPLAINED CASH DEPOSIT. THE LD.CIT(A) UPHELD THE ACTION OF ASSESSING OFFICER FOR REOPENING AS WELL AS ON ADDITION OF RS.38,22,463/- ON ACCOUNT OF UNEXPLAINED CASH CREDIT. FURTHER AGGRIEVED, THE ASSESSEE WAS FILED THIS APPEAL BEFORE THIS TRIBUNAL. 4. NONE APPEARED ON BEHALF OF THE ASSESSEE, DESPITE THE SERVICE OF NOTICE THROUGH REGISTER POST ACKNOWLEDGMENT DUE (RPAD) FOR FOR THAN ONE OCCASIONS I.E. ON 11.11.2020 AND AGAIN ON 20.01.2021 NOR ANY APPLICATION FOR ADJOURNMENT APPLICATION IS FILED. PERUSAL OF RECORD SHOWS THAT AUTHORITY LETTER OF K.C.PATEL, R.K.PATEL AND M.K.PATEL AND B.D.KARIA ADVOCATES, IS FILED ON RECORD. IN THESE CIRCUMSTANCES, WE LEFT NO OPTION EXCEPT TO DECIDE THE APPEAL AFTER HEARING THE SUBMISSION OF DEPARTMENTAL REPRESENTATIVE (DR) FOR THE REVENUE AND ON THE MATERIAL AVAILABLE ON RECORD. THE DR FOR THE REVENUE SUBMITS THAT ASSESSEE IS RUNNING HIS BUSINESS IN THE TRADING OF CLOTH. THE ASSESSEE WAS MAINTAINING SAVINGS BANK ACCOUNTS IN STATE BANK OF INDIA (SBI). BANK ACCOUNT IN SBI WAS NOT DISCLOSED IN THE BOOKS OF ACCOUNTS OF ASSESSEE. THE ASSESSEE MADE HUGE CASH DEPOSIT IN THE SAVINGS BANK ACCOUNT IN SBI. THE ASSESSING OFFICER REOPENED THE CASE ON THE BASIS OF AUDIT OBJECTION THAT ASSESSEE INSTEAD OF MAINTAINING THE CURRENT BANK ACCOUNT WAS MAINTAINING SAVINGS BANK ACCOUNT FOR HER PROPRIETORSHIP CONCERN. ON SUCH OBJECTION, THE ASSESSING OFFICER MADE VERIFICATION FROM STATE BANK OF INDIA AND FOUND THAT ASSESSEE HAS HUGE CASH DEPOSIT. DURING THE REASSESSMENT, THE ASSESSING OFFICER SMT. MAHEKBEN PREMKUMAR MEHTA VS. ITO, WARD-3(2), SURAT./ ITA NO.2913/AHD/2016 FOR A.Y.2009-10 4 CONFRONTED THE MATERIAL ABOUT THE CASH CREDIT TO THE ASSESSEE. THE ASSESSEE CONTENDED THAT THE NET PROFIT MAY BE TAKEN AT 5% OF TURNOVER. THE ASSESSEE HAS ALREADY SHOWN TURNOVER OF RS.9.73 LAKHS ON GROSS PROFIT @11.54 IS DECLARED. THE ASSESSEE CLAIM FOR CONSIDERING THE SAME GROSS PROFIT ON THE TOTAL TURNOVER. THE ASSESSEE ALSO PRAYED FOR ADDITION ON THE BASIS OF PEAK CREDIT IN THE BANK ACCOUNT. AS PER THE BANKING GUIDELINES, THE ASSESSEE WAS REQUIRED TO MAINTAIN CURRENT ACCOUNT INSTEAD OF SAVINGS BANK ACCOUNT. THUS, THE PLEA OF ASSESSEE WAS NOT ACCEPTED. THE ASSESSING OFFICER MADE ADDITION OF ENTIRE CASH DEPOSITS WHILE PASSING THE ASSESSMENT ORDER. EVEN BEFORE THE LD.CIT(A), THE ASSESSEE COULD NOT SUBSTANTIATE VARIOUS GROUNDS OF APPEALS RAISED BY HER. THE LD.CIT(A) ASKED VERY DETAILED AND REASONED ORDER ON VARIOUS PLEAS RAISED BY THE ASSESSEE. THE DEPARTMENTAL REPRESENTATIVE PRAYED FOR CONFIRMING THE ORDER OF LOWER AUTHORITIES. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSION OF PARTIES AND PERUSED THE LOWER AUTHORITIES CAREFULLY. GROUND NO.1 AND 2 RELATES TO VALIDITY OF REOPENING OF ASSESSMENT UNDER SECTION 147 OF THE ACT. WE HAVE NOTED THAT THE ASSESSING OFFICER MADE REOPENING ON THE BASIS OF INFORMATION CALLED FROM STATE BANK OF INDIA IN RESPONSE TO NOTICE UNDER SECTION 133(6) OF THE ACT THAT ASSESSEE WAS HAVING CASH DEPOSIT IN HER SAVINGS BANK ACCOUNT. THE ASSESSEE HAS NOT SHOWN SUCH ACCOUNT IN HIS BOOKS OF ACCOUNTS. THUS, ON THE BASIS OF SUCH INFORMATION THE ASSESSING OFFICER HAD A REASON TO BELIEVE THAT INCOME RESULTED INTO UNDERASSESSMENT WITH SHORT LEVY OF TAX SMT. MAHEKBEN PREMKUMAR MEHTA VS. ITO, WARD-3(2), SURAT./ ITA NO.2913/AHD/2016 FOR A.Y.2009-10 5 OF RS.12,20,353/-. EVEN OTHERWISE NEITHER THE ASSESSEE CAME FORWARD NOR FILED WRITTEN SUBMISSION AGAINST GROUND NO.1 AND 2. IN OUR VIEW, THERE WAS SUFFICIENT MATERIAL FOR MAKING REOPENING. THUS, WE UPHELD THE VALIDITY OF REOPENING. THEREFORE, WE DO NOT FIND ANY MERIT IN THE GROUNDS WHICH WE REJECT. 6. GROUND NO.3 RELATES TO CONFIRMING THE ADDITION OF RS.38,22,563/-. THE ASSESSING OFFICER IN THE REASSESSMENT PROCEEDINGS MADE ADDITION OF RS.38,22,563/- BY TAKING VIEW THAT ASSESSEE FAILED TO SUBMIT ANY REPLY DESPITE GIVING SUFFICIENT OPPORTUNITY. THE ASSESSEE HAS NOT PROVED THE NATURE AND SOURCE OF MONEY SATISFACTORILY. THE LD.CIT(A) ALSO AFFIRMED THE ACTION THAT ASSESSEE FAILED TO DISCHARGE HIS ONUS THAT CASH CREDIT IS GENUINE OR INVESTMENT IS NOT UNEXPLAINED. BEFORE US, NEITHER THE ASSESSEE HAS COME FORWARD TO EXPLAIN, NOR IS ANY WRITTEN SUBMISSION PLACED ON RECORD. THEREFORE, WE DO NOT FIND ANY REASON TO INTERFERE WITH THE FINDING OF LOWER AUTHORITIES. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED ON 20-01-2021 BY PLACING RESULT ON NOTICE BOARD. SD/- SD/- (DR.ARJUN LAL SAINI) (PAWAN SINGH) ( /ACCOUNTANT MEMBER ( /JUDICIAL MEMBER) / SURAT, DATED : 20 TH JAN , 2021 / #SGR COPY OF ORDER SENT TO- ASSESSEE/AO/PR. CIT/ CIT (A)/ ITAT (DR)/GUARD FILE OF ITAT. BY ORDER / / TRUE COPY / / ASSISTANT REGISTRAR, SURAT