Shri Kanjibhai Vashibhai Rabari, Kalol V. The Jt. CIT, Patan Range, Patan

ITA 3226/AHD/2015

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 6186 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 2 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-02-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2010-2011
• Appeal Filed On: 10-11-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Corroborative evidences
• Section: 133(6); 68; 69

Judgement Text

, *,L *,L*,L *,L- -- -,E ,E,E ,E- -- -LH LHLH LH* ** * IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, AHMEDABAD IZEKSN DQEKJ IZEKSN DQEKJ IZEKSN DQEKJ IZEKSN DQEKJ BEFORE SHRI PRAMOD KUMAR, ACCOUNTANT MEMBER AND SHRI MAHAVIR PRASAD, JUDICIAL MEMBER I.T.A. NO.3226/AHD/2015 ( / ASSESSMENT YEAR : 2010-11) SHRI KANJIBHAI VASHIBHAI RABARI, 8, MAHALAXMI TENAMENTS, DHUMASAN ROAD, KALOL-382 721 VS. JCIT, PATAN RANGE, PATAN. ! PAN/GIR NO. : AFMPR 6664 Q ( ' / APPELLANT ) .. ( #' RESPONDENT ) '$ APPELLANT BY : SHRI HARDIK VORA, A.R. #'%$ / RESPONDENT BY : SHRI JAMES KURIAN, SR. D.R & ' (%) * / DATE OF HEARING 24/01/2018 +,-. %) * / DATE OF PRONOUNCEMENT 02/02/2018 / O R D E R PER MAHAVIR PRASAD, JUDICIAL MEMBER : THIS APPEAL OF THE ASSESSEE RELATING TO ASSESSMEN T YEAR 2010-11 IS DIRECTED AGAINST THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-GANDHINAGAR, AHMEDABAD DATED 30.09.2015 W HICH IS ARISING OUT OF ORDER U/S.143(3) OF THE INCOME TAX ACT, 1961 , VIDE APPEAL NO.CIT(A)/GNR/14/2014-15. 2. ASSESSEE HAS TAKEN FOLLOWING GROUNDS OF APPEAL: 1. ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE AS WELL AS LAW ON THE SUBJECT, THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ITA NO.3226/AHD /2015 SHRI KANJIBHAI VASHIBHAI RABARI VS. JCIT ASST.YEAR 2011-12 - 2 - HAS ERRED IN CONFIRMING ADDITION OF RS.7,00,000/- A S UN EXPLAINED CREDIT IN CAPITAL ACCOUNT. 2. ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE AS WELL AS LAW ON THE SUBJECT, THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) HAS ERRED IN CONFIRMING ADDITION OF RS.6,00,000/- A S UN EXPLAINED CREDIT IN THE NAME OF M/S SHREE GURUDEV ENTERPRISE. 3. ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE AS WELL AS LAW ON THE SUBJECT, THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) HAS ERRED IN CONFIRMING ADDITION OF RS.12,90,000/- AS UN EXPLAINED CASH DEPOSITED IN THE BANK ACCOUNT. 4. IT IS PRAYED THAT ABOVE ADDITIONS MADE BY AS SESSING OFFICER AND CONFIRMED BY COMMISSIONER OF INCOME-TAX (APPEALS) M AY PLEASE BE DELETED. 5. APPELLANT CRAVES LEAVE TO ADD, ALTER OR DELET E ANY GROUND(S) EITHER BEFORE OR IN THE COURSE OF HEARING OF THE AP PEAL. 3. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERI ALS ON RECORD ARE AS UNDER:- DURING THE RELEVANT FINANCIAL YEAR, IN THE CAPITA L ACCOUNT OF THE ASSESSEE, ADDITION OF RS.7,00,000/- HAS BEEN SHOWN. VIDE SHOW CAUSE NOTICE DATED 06/03/2014, THE ASSESSEE WAS ASKED TO SATISFACTORILY EXPLAIN THE NATURE AND SOURCE OF THIS CREDIT. VIDE LETTER D ATED 13/03/2014, FOLLOWING REPLY IN THIS REGARD HAS BEEN SUBMITTED: AS REGARDS CREDIT OF RS.7,00,000/- IN THE CAPITAL A CCOUNT, (POINT NO.2 OF YOUR NOTICE) I HAVE EXPLAINED THE SAME IN MY LET TER DATED 13.12.2013. I AGAIN SUBMIT THAT OUT OF RS.7,00,000/- CREDIT DUR ING THE YEAR, RS.2,00,000/- IS IN RESPECT OF PAYMENT MADE BY MEET ENTERPRISE DIRECTLY TO GURUDEV ENTERPRISE. HOWEVER BY MISTAKE, THE SAME WAS CREDITED TO CAPITAL ACCOUNT WHICH ENTRY IS CORRECTED IN LATER Y EAR BY CREDITING TO MEET ENTERPRISE AND DEBITING TO CAPITAL ACCOUNT. TH US ACTUAL RECEIPT OR CREDIT DURING THE YEAR IS RS.5,00,000/-. FOR THIS A MOUNT THE AMOUNT OF RS.2,50,000/- IS CASH RECEIVED FROM THE PERSONAL BO OKS OF MINE. A COPY OF WHICH IS ALREADY EARLIER SUBMITTED SHOWING WITHD RAWAL OF CASH AND DEPOSIT IN THE CAPITAL ACCOUNT WITH PROPRIETARY CON CERN I.E. GANESH TRADING CO. AS REGARDS BALANCE RS.2,50,000/- IT IS WITHDRAWN FROM GANESH TRADING AND AGAIN CREDITED TO CAPITAL ACCOUN T. THUS THE CAPITAL ACCOUNT IS FULLY EXPLAINED AND VERIFIABLE FROM THE ABOVE ACCOUNT. ITA NO.3226/AHD /2015 SHRI KANJIBHAI VASHIBHAI RABARI VS. JCIT ASST.YEAR 2011-12 - 3 - 3.1 THE REPLY OF THE ASSESSEE HAS BEEN CONSIDERED. HOWEVER, THE FACTS REMAINS THAT IN RESPECT OF THIS CREDIT OF RS.7,00 ; 000/- IN ASSESSEE'S CAPITAL ACCOUNT DURING THE RELEVANT PREVIOUS YEAR, NONE OF CREDIT ENTRIES IS EXPLAINABLE. REGARDING ALLEGED PAYMENT OF RS.2,00,0 00/- BY M/S. MEET ENTERPRISE, DESPITE SEVERAL OPPORTUNITIES ASSESSEE COULD NOT FILE ANY EVIDENCE IN THIS REGARD REGARDING IDENTITY, ETC. OF THIS CONCERN. 3.2 FURTHER, IN RESPECT OF BALANCE AMOUNT OF RS.5,0 0,000/-, IT IS CLAIMED THAT RS.2,50,000/- HAD BEEN RECEIVED FROM P ERSONAL BOOKS. THE DETAILS OF THESE ALLEGED BOOKS FILED IN THE COURSE OF SCRUTINY REVEALED THE SOURCE OF THIS AMOUNT AS CASH SALES. HOWEVER, NO DO CUMENTARY EVIDENCE REGARDING AVAILABILITY OF STOCK AND SALE THEREOF HA S BEEN FILED BY THE ASSESSEE. THEREFORE, THE SOURCE OF THIS AMOUNT IN T HE PERSONAL BOOKS IS ALSO NOT SATISFACTORILY EXPLAINED. 3.3 FURTHERMORE, IN RESPECT OF REMAINING AMOUNT OF RS.2,50,000/-, IT IS ASSERTED THAT THIS WAS WITHDREW FROM THE PROPRIETAR Y CONCERN OF ASSESSEE NAMELY M/S. SHREE GANESH TRADING & HENCE IS EXPLAIN ED. THIS IS NOT CORRECT BECAUSE IMPUGNED CREDIT OF RS. 7,00,000/- U NDER DISCUSSION HAD BEEN SHOWN IN THE CAPITAL ACCOUNT OF THE ASSESSEE I N HIS PROPRIETARY CONCERN SHREE GANESH TRADING ITSELF WHEN IT IS CLAI MED THAT HE HAS MAINTAINED TWO SETS OF BOOKS OF ACCOUNTS, ONE IN PE RSONAL CAPACITY AND ANOTHER IN SHREE GANESH TRADING, THEN HOW THE WITHD RAWAL FROM SHREE GANESH TRADING CAN BE CLAIMED TO BE REFLECTED IN TH E CAPITAL ACCOUNT WITH THIS FIRM ITSELF. ITA NO.3226/AHD /2015 SHRI KANJIBHAI VASHIBHAI RABARI VS. JCIT ASST.YEAR 2011-12 - 4 - 3.4 IN VIEW OF ENTIRE DISCUSSION MADE ABOVE, IT IS HELD THAT THE NATURE AND SOURCE OF THE ENTIRE CREDIT OF RS.7,00,000/- IN ASSESSEE'S CAPITAL ACCOUNT NOT SATISFACTORILY EXPLAINED AND HENCE, THI S AMOUNT IS TREATED AS UNEXPLAINED DEPOSITS IN THE BOOKS OF ACCOUNTS OF TH E ASSESSEE AND ADDED TO HIS INCOME U/S. 68 OF THE ACT. PENALTY PROCEEDIN GS U/S. 271(L)(C) OF THE ACT ARE BEING INITIATED SEPARATELY FOR FURNISHING I NACCURATE PARTICULARS OF INCOME WHICH LEADS TO CONCEALMENT OF INCOME WITH RE SPECT TO ADDITION TO THE ABOVE EXTENT. 4. CREDIT IN THE ACCOUNT OF M/S. SHREE GURUDEV ENTERP RISE : IN THE COURSE OF SCRUTINY, IT WAS FOUND THAT IN THE NAME OF M/S. SHREE GURADEV ENTERPRISE THE ASSESSEE HAS SHOWN RS.16,00, 000/- CREDITED IN THIS FINANCIAL YEAR. OUT OF THIS CREDIT, AN AMOUNT OF RS.10,00,000/- HAS BEEN FOUND EXPLAINED FROM THE VERIFICATION OF THE B ANK STATEMENT OF THE ACCOUNT OF M/S. SHREE GURUDEV ENTERPRISE, KADI WHIC H HAS BEEN CALLED FOR U/S. 133(6) OF THE ACT. IT HAS TO BE SO OBTAINE D BECAUSE ASSESSEE HAD EXPRESSED HIS INABILITY TO FILE A CONFIRMATION FROM M/S. SHREE GURUDEV ENTERPRISE, KADI. 4.1 REGARDING BALANCE AMOUNT OF RS.6,00,000/- CREDI TED ON 20.11.2010, ASSESSEE HAS CLAIMED VIDE LETTER DELED 13.03.2014 THAT THIS CONCERN PAID THIS AMOUNT DIRECTLY TO THE OFFICIAL L IQUIDATOR ON ASSESSEE'S BEHALF FOR PURCHASE OF LAND SITUATED AT SURVEY/BLOC K NO.165 OF VILLAGE DHANOT, CHHATRAL-KALOL ROAD ON 19.04.2011. HOWEVER, THIS PAYMENT THROUGH D.D. IS NOT REFLECTED IN THE AFORESAID STAT EMENT OF BANK ACCOUNT OF SHREE GURUDEV ENTERPRISE. ASSESSEE HAS ALSO SHOW N HIS INABILITY TO FILE ITA NO.3226/AHD /2015 SHRI KANJIBHAI VASHIBHAI RABARI VS. JCIT ASST.YEAR 2011-12 - 5 - A CONFIRMATION IN THIS REGARD ON THE PRETEXT THAT S HREE GURUDEV ENTERPRISE IS NOT CO-OPERATING WITH HIM. IN THIS VIEW OF THE M ATTER, SINCE THE ONUS LYING UPON THE ASSESSEE TO EXPLAIN THE CREDIT OF BA LANCE AMOUNT OF RS.6,00,000/- IN THE ACCOUNT OF M/S. SHREE GURUDEV ENTERPRISE BY FURNISHING CORROBORATIVE EVIDENCES IN SUPPORT OF HI S CLAIM, HAS NOT BEEN DISCHARGED, IT IS HELD THAT NATURE AND SOURCE OF TH IS CREDIT COULD NOT BE EXPLAINED SATISFACTORILY. ACCORDINGLY, SAID AMOUNT IS TREATED AS UNEXPLAINED CASH CREDITS IN TERMS OF THE PROVISIONS OF SECTION 68 OF THE ACT AND ADDED TO THE INCOME DECLARED BY THE ASSESSE E. PENALTY PROCEEDINGS U/S.271(L)(C) OF THE ACT ARE BEING INIT IATED SEPARATELY FOR FURNISHING INACCURATE PARTICULARS OF INCOME WHICH L EADS TO CONCEALMENT OF INCOME WITH RESPECT TO ADDITION TO THE ABOVE EXT ENT. 5. UNEXPLAINED CASH DEPOSITS IN THE BANK ACCOUNT : DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS, IT IS FOUND THAT IN THE BANK ACCOUNTS OF THE ASSESSEE MAINTAINED WITH HDFC BANK, KADI AND MEHSANA URBAN CO-OPERATIVE BANK LTD., KADI BRANCH. CERTAIN AMOUNTS WERE DEPOSITED IN CASH BUT ASSESSEE HAS NO SATISFAC TORY EXPLANATION REGARDING THE NATURE AND SOURCE OF THESE CREDITS. T HESE DEPOSITS ARE AS UNDER: HDFC BANK, KADI - ACCOUNT NO. 03852020001777 SR. NO. DATE CASH DEPOSIT (RS.) SOURCE AS EXPLAINED BY THE ASSESSEE 1. 06.10.2010 10,000 RE- PAYMENT OF LOAN BY ONE SHRI DILIP SINGH JHALA WHO HAS EXPIRED 2. 20.10.2010 30,000 SHRI PADAM SINGH RAO ITA NO.3226/AHD /2015 SHRI KANJIBHAI VASHIBHAI RABARI VS. JCIT ASST.YEAR 2011-12 - 6 - 3 27.12.2010 75,000 RE- PAYMENT OF LOAN BY ONE SHRI DILIP SINGH JHALA WHO HAS EXPIRED 4 29.12.2010 10,000 5 13.10.2010 1,50,000 FROM THE SALE PROCEEDS, OF (I) OLD MACHINERY VALUING RS.10,71,000/- SOLD IN CASH TO ONE SHRI VIR ENDRA KUMAR, SHRI NARAIN GAJJAR, T-9, DISTT: REWARI (HARYANA)(PAN BMHPK2759J) ON 01.09.20 10 AND (2) OF A VEHICLE NO.GJ-3-18AH- 5709 ALSO IN CASH SOLD TO ONE SHRI VINODBHAI SAGARBH AI DESAI ON 15.11.2010 FOR RS.3,85,000/-. 6 15.10.2010 1,00,000 7 20.10.2010 2,00,000 8 19.11.2010 2,50,000 9 22.11.2010 4,50,000 10 23.11.2010 4,00,000 TOTAL 16,75,000 5.1 IN VIEW OF ASSESSEE'S EXPLANATION REGARDING SOU RCE OF THE AFORESAID DEPOSITS IN BANKS, HE WAS ASKED TO SUBMIT PROPER EV IDENCES IN THIS REGARD. HOWEVER, EXCEPT ONE SALE-CUM-DELIVERY NOTE DATED 15 .11.2010 IN RESPECT OF SALE OF AFORESAID VEHICLE AND A HAND WRITTEN NOT E ALLEGED BY SIGNED BY THE SON OF LATE SHRI DILIP SINGH JHALA, NO OTHER EV IDENCE REGARDING GENUINENESS OF THE CLAIMED SOURCE OF THE AFORESAID CASH DEPOSITS COULD BE FILED. THEREFORE, IT IS CLEAR THAT EXCEPT THE SOURC E OF RS.3,85,000/- ON THE SALE OF AFORESAID VEHICLE, THE SOURCE OF OTHER DEPO SITS HAS NOT BEEN SATISFACTORILY EXPLAINED WITH THE HELP OF PROPER DO CUMENTARY EVIDENCES. ACCORDINGLY, IT IS HELD THAT OUT OF AFORESAID TOTAL CASH DEPOSITS OF RS.16,75,000/-, ONLY THE SOURCE OF RS.3,85,000/- IS EXPLAINED. HENCE, THE BALANCE AMOUNT OF SUCH DEPOSITS I.E. RS.12,90,000/- IS ADDED TO THE ITA NO.3226/AHD /2015 SHRI KANJIBHAI VASHIBHAI RABARI VS. JCIT ASST.YEAR 2011-12 - 7 - INCOME OF THE ASSESSEE FOR A.Y. 2011-12, U/S. 69 OF THE ACT BEING THE AMOUNT OF CASH DEPOSITS IN BANK WHOSE NATURE & SOUR CE HAS NOT BEEN SATISFACTORILY EXPLAINED. PENALTY PROCEEDINGS U/S. 271(L)(C) OF THE ACT ARE BEING INITIATED SEPARATELY FOR FURNISHING INACCURAT E PARTICULARS OF INCOME WHICH LEADS TO CONCEALMENT OF INCOME WITH RESPECT T O ADDITION TO THE ABOVE EXTENT. 6. AGAINST THE ALL THREE ADDITIONS ASSESSEE PREFERR ED FIRST STATUTORY APPEAL BEFORE THE LD. CIT(A) WHO DISMISSED THE APPE AL OF THE APPELLANT. 7. NOW APPELLANTS APPEAL IS BEFORE US. 8. WE HAVE GONE THROUGH THE RELEVANT RECORD AND IMP UGNED ORDER. SO FAR GROUND NO.1 IS CONCERNED. LD. AR HAS NOT PRESSE D THIS GROUND. 9. SO FAR GROUND NO.2 REGARDING CONFIRMATION OF ADD ITION OF RS.6,00,000/- AS UN EXPLAINED CREDIT IN THE NAME OF M/S. SHREE GURUDEV ENTERPRISE IS CONCERNED. DURING THE ASSESSMENT PROC EEDINGS AND APPELLATE STAGE, APPELLANT HAS SHOWN HIS INABILITY TO FILE CO NFIRMATION IN THIS REGARD AND CITING THE REASON THAT M/S. SHREE GURUDEV ENTER PRISE IS NOT CO- OPERATING WITH HIM. SINCE APPELLANT HAS FAILED TO F URNISH CORROBORATIVE EVIDENCES IN SUPPORT OF THE CLAIM. THIS GROUND OF A PPEAL IS DISMISSED. 10. SO FAR GROUND NO.3 REGARDING CONFIRMATION OF AD DITION OF RS.12,90,000/- AS UN EXPLAINED CASH DEPOSITED IN TH E BANK ACCOUNT IS CONCERNED. AN AMOUNT OF RS.10,71,000/- BEING RECEIP T FROM MACHINERY ITA NO.3226/AHD /2015 SHRI KANJIBHAI VASHIBHAI RABARI VS. JCIT ASST.YEAR 2011-12 - 8 - SALES IN WHICH THE APPELLANT DEALS AND LD.AO HAS AC CEPTED THE SALES RECORDED AMOUNTING TO RS.10,71,000/- IN CASH BOOK O N 01/09/2010 AND AS PER AR COPY OF RELEVANT CASH BOOK WERE ALSO SUBMITT ED BEFORE THE AUTHORITIES BELOW AND A COPY OF AUDITED PROFIT AND LOSS ACCOUNT WITH SCHEDULED WERE ALSO FILED BEFORE THE LOWER AUTHORIT IES. WE SEND THIS MATTER PERTAINING TO RS.10,71,000/- TO THE FILE OF THE AO TO EXAMINE THE SAME AND IF IT IS FOUND CORRECT THEN GIVE THE BENEF IT OF THE SAME TO THE APPELLANT. 11. IN THE RESULT APPEAL FILED BY THE APPELLANT IS PARTLY ALLOWED. THIS ORDER PRONOUNCED IN OPEN COURT ON 02/02/2018 SD/- SD/- IZEKSN DQEKJ IZEKSN DQEKJ IZEKSN DQEKJ IZEKSN DQEKJ EGKOHJ IZLKN EGKOHJ IZLKN EGKOHJ IZLKN EGKOHJ IZLKN YKS[KK LN YKS[KK LN YKS[KK LN YKS[KK LNL; L; L; L; U;KF;D LNL; U;KF;D LNL; U;KF;D LNL; U;KF;D LNL; (PRAMOD KUMAR) ( MAHAVIR PRASAD ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 02/02/2018 PRITI YADAV, SR.PS !'# $#! COPY OF THE ORDER FORWARDED TO : 1. ' / THE APPELLANT 2. #' / THE RESPONDENT. 3. 012) & 3) / CONCERNED CIT 4. & 3) 45 / THE CIT(A)-GANDHINAGAR, AHMEDABAD. 5. 67 8)'12 *12. 0 / DR, ITAT, AHMEDABAD 6. 8 9: ( GUARD FILE. % & / BY ORDER, # 6)) //TRUE COPY// '/& () ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD