Shri Murtuzahusain Saiyed, Baroda V. The Income tax Officer,Ward-5(1), Baroda

ITA 3030/AHD/2009

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 6175 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 8 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-07-2011
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 11-07-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 10-11-2009
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: MATHIVANAN M
• Assessee Lawyers: MOHAMMAD ZUBER DADI
• Keywords: Unexplained cash credit; Rejection of books of accounts; Business income; Depreciation; Income from undisclosed sources; Deemed to accrue or arise in india
• Section: 44AD; 68; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH AHMEDABAD (BEFORE S/SHRI BHAVNESH SAINI, JM AND A. K. GARODIA , AM) ITA NO.3030/AHD/2009 A. Y.: 2006-07 MURTUZAHUSSAIN SAIYED, 16, ANURAG APARTMENT, RAMPARK, AJWA ROAD, VADODARA 390 019 VS THE INCOME TAX OFFICER, WARD 5 (1), 5 TH FLOOR, AAYAKAR BHAVAN, RACE COURSE CIRCLE, BARODA 390 005 PA NO. AGLPS 9901 P (APPELLANT) (RESPONDENT) APPELLANT BY SHRI MOHAMMAD ZUBER DADI, AR RESPONDENT BY SHRI MATHIVANAN M., SR. DR O R D E R PER BHAVNESH SAINI: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LEARNED CIT(A)-V, BARODA DATED 07 TH JULY, 2009 FOR ASSESSMENT YEAR 2006-07 ON THE FOLLO WING GROUNDS: 1 UNEXPLAINED CASH CREDIT: I. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE ASSESSING OFFICER ERRED IN MAKING ADDITION OF RS.1,80,000/- ON ACCOUNT OF UNEXPLAINED CASH CREDIT. II. THE ASSESSING OFFICER ERRED IN NOT CONSIDEIRN THE PROVISION OF SECTION 44 AD APPLICABLE TO THE CASE OF ASSESSEE (AS THE TURNOVER ITA NO.3030/AHD/2009 MURTUZAHUSSAIN SAIYED VS ITO W 5(1), BARODA 2 BELOW RS.40 LACS), AND, HAD MADE ADDITION ON PRESUMPTION. 2. THE APPEAL IS TIME BARRED BY 66 DAYS. THE LEARNE D COUNSEL FOR THE ASSESSEE IN SUPPORT OF THE APPLICATION FOR COND ONATION OF DELAY SUBMITTED THAT DUE TO RAMZAN PERIOD, THE ASSESSEE C OULD NOT PREFER THE APPEAL. THERE IS NO OBJECTION TO THE CONDONATIO N OF DELAY. CONSIDERING THE EXPLANATION OF THE ASSESSEE AND AS THERE IS NO OBJECTION IN CONDONATION OF DELAY, THE DELAY IN FIL ING THE APPEAL IS CONDONED. 3. BRIEFLY, THE FACTS OF THE CASE ARE THAT THE AO I SSUED STATUTORY NOTICE FOR COMPLETION OF THE ASSESSMENT ALONG WITH QUESTIONNAIRE FOR SEVERAL DETAILS. THE ASSESSEE HOWEVER, DID NOT COMP LY WITH THE STATUTORY NOTICE. SHOW CAUSE NOTICE U/S 144 OF THE IT ACT WAS ALSO ISSUED CALLING FOR CONFIRMATION OF THE SIX DEPOSITO RS IN WHOSE NAMES RS.1,80,000/- HAS BEEN SHOWN AS CASH CREDIT BY THE ASSESSEE. THE ASSESSEE DESPITE SERVICE OF THE QUESTIONNAIRE AND S TATUTORY NOTICE DELIBERATELY FAILED TO SUBMIT CONFIRMATION LETTERS, THEREFORE, THE AO TREATED THE AMOUNT OF RS.1,80,000/- AS UNEXPLAINED CASH CREDIT AND ADDED THE SAME TO THE INCOME OF THE ASSESSEE. IT WA S SUBMITTED BEFORE THE LEARNED CIT(A) THAT RETURN WAS FILED U/S 44 AD OF THE IT ACT, SUCH ITEMS COULD NOT HAVE BEEN ASKED FOR BY TH E AO, THEREFORE, ADDITION MAY BE DELETED. THE LEARNED CIT(A) NOTED THAT THE AO REJECTED THE RETURN FILED U/S 44AD OF THE IT ACT AS THE MATERIAL FROM THE DETAILS AVAILABLE IN THE RETURN FILED REVEAL TH AT THE ASSESSEE HAS CLAIMED DEPRECIATION FROM THE DEEMED INCOME U/S 44A D OF THE IT ACT, WHICH HAS DISQUALIFIED HIM FROM CLAIMING THAT THE R ETURN WAS FILED U/S ITA NO.3030/AHD/2009 MURTUZAHUSSAIN SAIYED VS ITO W 5(1), BARODA 3 44 AD OF THE IT ACT. FURTHER, THE AO RIGHTLY CALLED FOR THE DETAILS LIKE CONFIRMATION LETTERS, CREDITWORTHINESS OF THE CREDI TORS AND GENUINENESS OF THE TRANSACTIONS WHICH THE ASSESSEE FAILED TO PRODUCE THE SAME. ADDITION WAS ACCORDINGLY CONFIRMED. 4. THE LEARNED COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE LEARNED CIT(A). ON THE OTHER HAND, THE LEARNED DR SUBMITTED THAT SINCE THE ASSESSEE FAILED TO PROVE THE GENUINE CREDITS, THEREFORE, ADDITION HAS BEEN RIGHT LY MADE BY THE AO AND RIGHTLY CONFIRMED BY THE LEARNED CIT(A). 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND DO NOT FIND ANY JUSTIFICATION TO INTERFERE WITH THE ORDER OF THE LE ARNED CIT(A). IT IS SETTLED LAW THAT BOTH THE ADDITION SIMULTANEOUSLY C OULD BE MADE ON ACCOUNT OF UNEXPLAINED CASH CREDITS AS WELL AS PROF IT ESTIMATED ON REJECTION OF BOOKS OF ACCOUNTS. THE HONBLE SUPREME COURT IN THE CASE OF KALE KHAN MOHAMMAD HANIF VS CIT, 50 ITR 1 H ELD AS UNDER: HELD, THAT THE AMOUNTS OF THE CASH CREDITS COULD BE ASSESSED TO TAX AS INCOME FROM UNDISCLOSED SOURCES IN ADDITION TO THE BUSINESS INCOME COMPUTED BY ESTIMATE. THE TAXING AUTHORITIES WERE NOT PRECLUDED FROM TREATING THE AMOUNTS OF CREDIT ENTRI ES AS INCOME FROM UNDISCLOSED SOURCES SIMPLY BECAUSE THE ENTRIES APPEARED IN THE BOOKS OF A BUSINESS WHOSE INCOME THEY HAD PREVIOUSLY COMPUTED ON A PERCENTAGE BASIS 5.1 THE HONBLE SUPREME COURT IN THE CASE OF CIT VS DEVI PRASAD VISHWANATH PRASAD, 72 ITR 194 HELD AS UNDER: ITA NO.3030/AHD/2009 MURTUZAHUSSAIN SAIYED VS ITO W 5(1), BARODA 4 THERE IS NOTHING WHICH PREVENTS THE INCOME- TAX OFFICER IN AN APPROPRIATE CASE IN TAXING BOTH T HE CASH CREDIT, THE NATURE AND SOURCE OF WHICH IS NOT SATISFACTORILY EXPLAINED, AND THE BUSINESS INCOME ESTIMATED BY HIM UNDER SECTION 13 OF THE INDIAN INCOME-TAX ACT, 1922, AFTER REJECTING THE BOOKS OF ACCOUNT OF THE ASSESSEE AS UNRELIABLE. 6. IN VIEW OF THE ABOVE DECISIONS, IT IS CLEAR THA T THE AO HAS RIGHTLY MADE THE ADDITION U/S 68 OF THE IT ACT BECA USE THE ASSESSEE FAILED TO PROVE GENUINE CREDITS IN THE MATTER. THE AO HAS GIVEN SPECIFIC NOTICE TO THE ASSESSEE TO FILE CONFIRMATIO N LETTERS AND OTHER DETAILS BUT THE ASSESSEE FAILED TO FILE CONFIRMATIO N OF ANY OF THE CASH CREDITS. THUS, THE ASSESSEE FAILED TO PROVE THE IDE NTITY OF THE CREDITORS, CREDITWORTHINESS OF THE CREDITORS AND GE NUINENESS OF THE TRANSACTION IN THE MATTER. IT WAS MERELY PLEADED BE FORE THE LEARNED CIT(A) THAT SINCE THE RETURN IS FILED U/S 44AD OF T HE IT ACT BY COMPUTING THE INCOME ON ESTIMATE BASIS AS PER THE P ROCEDURE PROVIDED, THEREFORE, NO SEPARATE ADDITION ON ACCOUN T OF UNEXPLAINED CREDIT COULD BE MADE. SUCH A PLEADING OF THE ASSES SEE IS NOT TENABLE IN LAW, BECAUSE CASH CREDIT ADDITION COULD BE MADE SEPARATELY APART FROM MAKING ADDITION BY ESTIMATING THE PROFIT. THE ADDITION IS MADE BY THE AO ON ACCOUNT OF UNEXPLAINED CASH CREDITS BEING INCOME FROM UNDISCLOSED SOURCES. MOREOVER, THE LEARNED CIT(A) H AS SPECIFICALLY HELD THAT THE AO HAS REJECTED THE CLAIM OF THE ASSE SSEE U/S 44AD OF THE IT ACT. THEREFORE, NO SIGNIFICANCE COULD BE ATT ACHED TO THE SUBMISSION OF THE LEARNED COUNSEL FOR THE ASSESSEE. THERE IS NO MERIT IN THE APPEAL OF THE ASSESSEE. SAME IS ACCORD INGLY DISMISSED. ITA NO.3030/AHD/2009 MURTUZAHUSSAIN SAIYED VS ITO W 5(1), BARODA 5 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DIS MISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 15-07-2011 SD/- SD/- (A. K. GARODIA) ACCOUNTANT MEMBER (BHAVNESH SAINI) JUDICIAL MEMBER DATE : 15-07-2011 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