BIJU R. KOLATH, MUMBAI V. ITO WD 17(2)(2), MUMBAI

ITA 3093/MUM/2014

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 83945 (ITAT-MUMBAI)
• Duration Of Justice: 5 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-10-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 02-05-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: VIJAY KUMAR BORA SR AR
• Assessee Lawyers: HITESH P SHAH
• Keywords: Corroborative evidences
• Section: 68

Judgement Text

ITA NO.3093/MUM/2014 1 , , , , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES B, MUMBAI , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER AND SHRI N. K. BILLAIYA, ACCOUNTANT MEMBER ITA NO.3093/MUM/2014 (A.Y. 2008-09) SHRI BIJU R. KOLATH 15, LBS MARKET MATUNGA MUMBAI-400 019. / VS. THE ITO WARD 17(2)(2), 212, 2 ND FLOOR, PIRAMAL CHAMBERS, LALBAUGH MUMBAI-400 013. ( ! / // / APPELLANT) ( '# ! / RESPONDENT) P.A. NO.ADOPR 1942 B ! $ % $ % $ % $ % /APPELLANT BY : SHRI HITESH P. SHAH '# ! $ % $ % $ % $ % /RESPONDENT BY : SHRI VIJAY KUMAR BORA SR. AR $ &'( / / / / DATE OF HEARING : 27.10.2014 )*+ $ &'( / DATE OF PRONOUNCEMENT : 27.10.2014 ,- ,- ,- ,- / / / / O R D E R PER JOGINDER SINGH (JM) : THE ASSESSEE IS AGGRIEVED BY THE IMPUGNED ORDER DATED 28/3/2014 OF THE LD. FIRST APPELLATE AUTHORIT Y ON THE GROUND THAT THE LD. CIT(A) CONFIRMED THE ADDITION M ADE U/S. 68 OF THE ACT FOR THE WHOLE CASH SALE AMOUNTING TO RS. 2,01,68,273/- , DEPOSITED IN THE BANK BY OPINING THE SAME TO BE U NEXPLAINED INCOME OF THE ASSESSEE . ITA NO.3093/MUM/2014 2 2. DURING HEARING OF THIS APPEAL THE LD. COUNSEL FO R THE ASSESSEE SHRI HITESH P. SHAH ADVANCED HIS ARGUMENTS WHICH IS IDENTICAL TO THE GROUND RAISED BY SUBMITTING THAT T HE LD. CIT(A) WHILE ARRIVING AT A PARTICULAR CONCLUSION DID NOT C ONSIDER THE FACTS IN PROPER PERSPECTIVE AND DUE OPPORTUNITY WAS NOT PROVIDED TO THE ASSESSEE TO EXPLAIN HIS CASE. PLEA WAS ALSO RAISED THAT THE NECESSARY DETAILS FILED DURING SECOND REMAND REPORT WERE ALSO NOT CONSIDERED BY THE CIT(A) DISREGARDING THE PAN O F THE SUPPLIERS. ON THE OTHER HAND THE LD. DR SHRI VIJAY KUMAR BORA STRONGLY DEFENDED THE CONCLUSION OF THE LD. CIT(A). OUR ATTENTION WAS INVITED TO PAGE-5 OF THE IMPUGNED ORDER BY CONT ENTING THAT THE CLAIMED PAN WERE INVALID. 2.1 WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE FACTS IN BRIEF ARE THAT THE ASSESSEE CLAIMED TO HAVE DERIVED INCOME FR OM SALE OF VEGETABLE AND FRUITS. FROM THE COPY OF BANK DETAILS THE ASSESSING OFFICER FOUND THAT THE ASSESSEE MADE HUGE CASH DEPO SITS IN THREE ACCOUNTS WITH DHANLAXMI BANK, CITI CO-OPERATIVE BAN K AND ICICI BANK. VIDE SHOW CAUSE DATED 16/12/2010 THE AS SESSEE WAS ASKED TO EXPLAIN THE NATURE AND SOURCE OF CASH DEPOSIT IN THE BANK TO THE TUNE OF RS.2,41,45,538/- AND ALSO A S TO WHY THE AMOUNT SHOULD NOT BE TREATED AS UNEXPLAINED CASH CR EDIT U/S. ITA NO.3093/MUM/2014 3 68 OF THE ACT. IN RESPONSE TO WHICH THE ASSESSEE VI DE LETTER DATED 22/12/2010 MADE HIS SUBMISSIONS AS HAS BEEN REPRODU CED AT PAGE 2 ONWARDS OF THE ASSESSMENT ORDER. THE CLAIM O F THE ASSESSEE WAS CONSIDERED. THE ASSESSING OFFICER FOUN D THE SUBMISSIONS OF THE ASSESSEE TO BE CONTRADICTORY AND FICTITIOUS. IN HIS P&L ACCOUNT THE ASSESSEE SHOWED PURCHASES WORTH RS.33,73,713/- AND SALES OF RS.39,76,745/-. THE ASS ESSEE DID NOT PROVIDE THE FIGURES OF SALES MADE DURING THE YE AR AND EVEN THE BILL/VOUCHER OR ANY DOCUMENTARY EVIDENCE IN SUP PORT OF THE CLAIM WERE NOT FURNISHED. AS PER THE REVENUE THE SO URCE AND NATURE OF THE CASH HAS TO BE EXPLAINED BY THE ASSES SEE. FINALLY THE LD. ASSESSING OFFICER MADE THE ADDITION U/S. 68 OF THE ACT. 2.3 THE ASSESSEE CARRIED THE ASSESSMENT ORDER IN AP PEAL BEFORE THE CIT(A) WHEREIN IT WAS CONCLUDED AS UNDER :- 5. I HAVE GONE THROUGH THE IMPUGNED ASSESSMENT ORDER, REMAND REPORT FILED BY THE ASSESSING OFFICER AND THE REJOINDERS FILED BY THE APPELLANT AND THE MATER IAL AVAILABLE ON RECORD. DURING THE COURSE OF ASSESSMEN T PROCEEDINGS THE APPELLANT HAS SUBMITTED THAT SINCE HE IS DEALING IN FRUITS AND VEGETABLES, THE MAJORITY O F SALES ARE ON CASH BASIS TO AVOID THE RISK OF DISHONOURING OF CHEQUES. THE SUPPLIERS ARE PAID BY CHEQUES. THEY AR E PURELY BUSINESS TRANSACTIONS. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE APPELLANT HAS SUBMITTED CASH BOOK. HOWEVER, THE APPELLANT DID NOT PRODUCE T HE DATEWISE SALE REGISTER/PURCHASE REGISTER TO ASCERTA IN THE CORRECT AMOUNT OF SALES OF GOODS IN CASH AND TH E AMOUNT DEPOSITED IN BANK IS OUT OF SALE OF GOODS. T HE TOTAL AMOUNT OF PURCHASE OF GOODS MADE BY PARTY AS ITA NO.3093/MUM/2014 4 PER APPELLANT'S SUBMISSION IS U,93,27,258/-. THE PARTIES FROM WHOM THE APPELLANT HAS MADE PURCHASES OF GOODS AND PAYMENT MADE IS .1,89,45,712/- AND HENCE BOTH THE FIGURES ARE NOT TALLYING. ON THE ONE HAND THE APPELLANT HAS MADE THE PURCHASES OF .,93,27,258 /- FOR WHICH THESE AMOUNTS WERE PAID THROUGH THE BANK AND ON THE OTHER HAND FROM THE LIST OF THE PARTIES HE HAS PURCHASED THE GOODS FOR AN AMOUNT OF .1,89,45,712/- . THUS THE APPELLANT'S SUBMISSION IS ITSELF CONTRADIC TORY AND FICTITIOUS. HE HAS MADE THE FICTITIOUS LIST OF THE PARTIES TO SUBSTANTIATE HIS CLAIM. FURTHER, THE APP ELLANT IN HIS PROFIT & LOSS ACCOUNT, HE HAS SHOWN THE PURCHASES OF .33,73,713/- AND SALES OF .39,76,745/- . HOWEVER, THE APPELLANT HAS NOT PROVIDED THE ACTUAL FIGURE OF SALE DURING THE YEAR. THE APPELLANT HAS N OT SUBMITTED ANY BILL/ VOUCHER OR AN Y DOCUMENTARY EVIDENCE TO SUBSTANTIATE HIS CLAIM. IT CAN BE SEEN FROM THE REMAND REPORT THAT THE POSITION OF THE PAN VERIFICATION IS 'AS PER AIS SYSTEM PAN IS INVALID' IN RESPECT 14 PARTIES AS MENTIONED IN PARA 5 OF THE REMAND REPORT. THE APPELLANT HAS MISCHIEVOUSLY FURNISHED INCORRECT CONFIRMATIONS OF NON EXISTING P ARTIES BEFORE ME AND THAT 15 THE REASON WHY THE PAN IS INVALID IN ALL 14 PARTIES, FURTHER, IN THE CASE OF MR TIRUMOOHY, IT IS REVEALED FROM PAN DIRECTORY THAT H E IS HAVING TWO PAN NOS. VIZ.AGCPT5126E AS MENTIONED IN AFFIDAVIT AND ATZPM399C AS MENTIONED IN CONFIRMATIO N FILED. HOWEVER, THE APPELLANT HAS FAILED TO PROVE W ITH EVIDENCE WHETHER THESE ARE TWO DIFFERENCE PARTIES O R IT IS ONE PARTY. IN THE REMAND REPORT THE ASSESSING OF FICER HAS REPORTED THAT AFFIDAVITS ARE NOT EVIDENCE EITHE R BEFORE UASI JUDICIAL AUTHORITY AND AFFIDAVIT IS NOT AN EVIDENCE BEFORE HIM EITHER IN HIS CAPACITY AS A JUD ICIAL AUTHORITY OR AS AN INVESTIGATING AUTHORITY. HENCE T HE AFFIDAVITS PRODUCED BY THE APPELLANT MAY NOT BE TRE ATED AS EVIDENCE IN VIEW OF SECTION 1 OF THE EVIDENCE AC T, 1872. THE APPELLANT HAS ALSO NOT FILED CONFIRMATION S FOR SALES ALONG WITH SUPPORTING EVIDENCES. AFFIDAVITS F ROM THE SUPPLIERS WERE FILED GIVING DETAILS ABOUT THE AGRICULTURAL ACTIVITIES OF ALL THE SUPPLIERS. HOWEV ER, IT IS NOT PROVED WITH EVIDENCES OF INCOME TAX RETURNS THA T ALL THESE SUPPLIERS ARE SHOWING AGRICULTURAL INCOME IN THEIR RETURN OF INCOME THE PAST HISTORY OF THE APPE LLANT ON VERIFICATION OF RECORDS ALSO SHOWS THAT THE APPE LLANT HAS NOT DISCLOSED SUCH A HUGE TURNOVER AS EVIDENT F ROM ITA NO.3093/MUM/2014 5 THE FIGURES OF LAST YEAR TURNOVER I.E. TURNOVER OF 7.37,58,942/- FOR A.Y.2007-08. IN VIEW OF THE ABOVE DISCUSSION AND THE REMAND REPORT, THE ADDITION MADE BY THE ASSESSING OFFICER U/S.68 IS CONFIRMED. THE GROUNDS OF APPEAL RAISED ARE DISMISSED. 6. IN THE RESULT, THE APPEAL IS DISMISSED. 3. THE AGGRIEVED ASSESSEE IS IN APPEAL BEFORE THIS TRIBUNAL. IF THE BASIS OF ADDITION MADE U/S. 68 OF THE ACT BY TH E ASSESSING OFFICER, CONCLUSION DRAWN IN THE IMPUGNED ORDER AND THE ASSERTIONS MADE BY THE LD. RESPECTIVE COUNSELS, IF KEPT IN JUXTAPOSITION, WE NOTE THAT THE ASSESSEE CLAIMED TO HAVE MADE CASH SALES. THE ASSESSEE RIGHT FROM ASSESSMENT STAG E DID NOT PRODUCE THE DATE WISE SALE/PURCHASE REGISTER SO THA T THE CORRECT AMOUNT OF PURCHASE AND SALES COULD BE ASCERTAINED. UNCONTROVERTEDLY, AS PER THE REQUIREMENT OF SECTION 68 THE ASSESSEE HAS TO EXPLAIN THE NATURE AND SOURCE OF DE POSIT MADE IN HIS BANK ACCOUNT. ON THE ONE HAND THE ASSESSEE CLA IMED TO HAVE MADE THE PURCHASES OF RS.93,27,258/- AND ON TH E OTHER HAND HE CLAIMED THROUGH THE LIST OF PARTIES THAT HE PURCHASED GOODS AMOUNTING TO RS.1,89,45,712/-. THE ASSESSEE I N HIS P&L ACCOUNT SHOWED PURCHASES OF RS.33,73,713/- AND SALE S TO THE TUNE OF RS.39,76,745/-. AT THE SAME TIME THE ASSESS EE DID NOT PRODUCE ANY BILL/VOUCHERS TO SUBSTANTIATE HIS CLAIM . FURTHER ON VERIFICATION OF PAN, AS PER AIS SYSTEM, THESE WERE FOUND INVALID. ITA NO.3093/MUM/2014 6 THE ASSESSEE ALSO DID NOT FILE CONFIRMATION OF SALE S WITH SUPPORTING EVIDENCE. THE PA NOS. AS MENTIONED AT PA GE-5 OF THE ORDER OF THE LD. CIT(A), THESE WERE FOUND INVALID. IT IS FURTHER NOTED THAT REMAND REPORT WAS SOUGHT FROM THE ASSESS ING OFFICER PURSUANT TO THE REPLY OF THE ASSESSEE. AND SUCH REM AND REPORT WAS CONFRONTED TO THE ASSESSEE. THE CONTENTS OF THE RE-JOINDER WERE ALSO CONSIDERED BY THE LD. CIT(A). TOTALITY OF FACTS CLEARLY INDICATE THAT EVEN THE CLAIM OF THE ASSESSEE IS ITS ELF CONTRADICTORY. THE ASSESSEE ALSO FILED ANOTHER LETT ER 25/10/2013 TO WHICH AGAIN THE REMAND REPORT SOUGHT. IN THIS SE COND REMAND REPORT ALSO, EITHER THE PAN WERE FOUND INVALID OR W ITHIN THE JURISDICTION OF DIFFERENT OFFICERS. UNCONTROVERTED FINDING OF THE LD. CIT(A) IS THAT THE APPELLANT HAS MISCHIEVOUSLY FURNISHED INCORRE CT CONFIRMATIONS OF NON-EXISTING PARTIES BEFORE ME AND THAT IS THE REASON WHY THE PAN IS INVALID IN ALL 14 PARTIES .AS PER SECTION 68 OF THE ACT THE ONUS IS UPON THE ASSESSEE TO PROVE T HE NATURE AND SOURCE OF RECEIPT AS WAS HELD BY HON'BLE APEX COURT IN ROSHAN DI HATTI VS. CIT (107 ITR 938) AND KALE KHAN MOHAMMED HANIF (50 ITR 1)(SC). IN SUMATI DAYAL VS. CIT (214 ITR 801) T HE HON'BLE APEX COURT HELD, THAT IF EXPLANATION OF THE ASSESSEE IS UNSATI SFACTORY THE AMOUNT CAN BE TREATED AS INCOME OF THE ASSESSEE . A HARMONIOUS CONSTRUCTION OF SECTION 106 OF THE EVIDE NCE ACT AND SECTION 68 OF THE I.T. ACT WILL BE THAT THOUGH APAR T FROM ITA NO.3093/MUM/2014 7 ESTABLISHING THE IDENTITY OF THE CREDITOR, THE ASSE SSEE MUST ESTABLISH THE GENUINENESS OF THE TRANSACTION AS WEL L AS CREDITWORTHINESS OF ITS CREDITORS. THE HONBLE RAJASTHAN HIGH COURT IN R.S. RATHORE ( 212 ITR 390) , HELD THAT EACH ENTRY MUST BE SEPARATELY EXPLAINED AND MERE MENTION OF INCOME TAX FILE NO. OF THE CREDITOR WILL NOT SUFFICE (CIT VS. KORLAY TRADING CO.(232 ITR 820)(CAL.) . ONE CLEAR FACT IS OOZING OUT THAT THE ASSESSEE HA S NOT SATISFACTORILY EXPLAINED THE NATURE AND SOURCE OF D EPOSITS FOUND IN HIS BANKS, THEREFORE, WE FIND NO INFIRMITY IN TH E CONCLUSION DRAWN BY THE LD.CIT(A). IT IS AFFIRMED. 4. FINALLY, APPEAL OF THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. REPRESENTATIVES FROM BOTH SIDES AT THE CONCLUSION O F THE HEARING ON 27 TH DAY OF OCTOBER, 2014 . ,- $ )*+ .,/ 27.10.2014 * $ 6 SD/- SD/- (N.K. BILLAIYA) (JOGINDER SINGH) ( ,7 ( ,7 ( ,7 ( ,7 / ACCOUNTANT MEMBER ,7 ,7 ,7 ,7 / JUDICIAL MEMBER MUMBAI; ., DATED : 27 TH OCT. 2014. ../ JV, SR.PS . ITA NO.3093/MUM/2014 8 ,- $ '&8 98+& ,- $ '&8 98+& ,- $ '&8 98+& ,- $ '&8 98+&/ COPY OF THE ORDER FORWARDED TO : 1. ! / THE APPELLANT 2. '# ! / THE RESPONDENT. 3. : ( ) / THE CIT, MUMBAI. 4. : / CIT(A)-13, MUMBAI 5. 8=6 ' & , , / DR, ITAT, MUMBAI 6. 6> ? / GUARD FILE. ,- ,- ,- ,- / BY ORDER, #8& '& //TRUE COPY// @ @@ @/ // /A B A B A B A B (DY./ASSTT. REGISTRAR) , , , , / ITAT, MUMBAI