Naynaben G.Sheth, Ahmedabad V. The Income tax Officer,Ward-11(2), Ahmedabad

ITA 327/AHD/2012

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 89651 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 4 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 29-06-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 03-02-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: ROOP CHAND
• Assessee Lawyers: G A MOHTA
• Keywords: Unexplained cash credit; Business income; Additional evidence; Reason to believe
• Section: 147; 68; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BEN CH, AHMEDABAD (BEFORE SHRI SHAILENDRA KR. YADAV, J.M. & SHRI ANIL CHATURVEDI, A.M.) I.T. A. NO. 327 /AHD/2012 (ASSESSM ENT YEAR: 2007-08) SMT. NAYNABEN GAUTAMKUMAR SHETH, 6/9,VITRAG SOCIETY, P.T.COLLEGE ROAD, PALDI, AHMEDABAD V/S I.T.O., WARD-11(2), AHMEDABAD (APPELLANT) (RESPONDENT) PAN: CCRPS8870D APPELLANT BY : SHRI G.A. MOHTA, A.R. RESPONDENT BY : SHRI ROOP CHAND, SR. D.R. ( )/ ORDER DATE OF HEARING : 29-06-2015 DATE OF PRONOUNCEMENT : 30 -06-2015 PER SHRI ANIL CHATURVEDI,A.M. 1. THIS APPEAL FILED BY THE ASSESSEE IS AGAINST THE OR DER OF CIT(A)-XVI, AHMEDABAD DATED 22.11.2011 FOR A.Y. 2007-08. 2. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERIAL ON RECORD ARE AS UNDER. 3. ASSESSEE IS AN INDIVIDUAL STATED TO BE TRADING IN P HOTOGRAPHIC GOODS. IN THIS CASE, A.O HAS NOTED THAT ASSESSEE DID NOT FILE RETU RN OF INCOME AND THEREFORE NOTICE U/S. 148 OF THE ACT WAS ISSUED ON 13.11.2009 AND IN RESPONSE TO WHICH ASSESSEE FILED HER RETURN OF INCOME ON 24.12.2009 D ECLARING TOTAL INCOME OF ITA NO 327/A HD/2012 . A.Y. 2007-08 2 RS. 1,26,820/-. A.O NOTICED THAT DURING THE YEAR AS SESSEE HAD DEPOSITED CASH OF RS. 10,75,250/- IN NATIONAL CO-OP. BANK LTD. AND THEREFORE ASSESSEE WAS ASKED TO EXPLAIN THE SOURCE OF CASH DEPOSITS. A.O HAS NOTED THAT THOUGH ASSESSEE HAD FILED PROFIT AND LOSS ACCOUNT AND BALA NCE SHEET BUT DID NOT PRODUCE THE PURCHASE AND SALES BILLS FOR VERIFICATI ON THOUGH THE ASSESSEE WAS ASKED TO PRODUCE THE SAME ON SEVERAL OCCASIONS. A.O NOTED THAT THE BOOKS OF ACCOUNT WERE PREPARED BY THE ASSESSEE POST ASSESSME NT PROCEEDINGS AND ASSESSEE DID NOT FILE THE RETURN OF INCOME WITHIN T HE TIME ALLOWED U/S. 139(1) OF THE ACT THOUGH THE INCOME CHARGEABLE EXCE EDED THE LIMIT. IN THE ABSENCE OF SALES AND PURCHASE BILLS, THE EXPLANATIO N OF THE ASSESSEE ABOUT THE CASH DEPOSIT BEING THE RECEIPTS ON ACCOUNT OF B USINESS OF PHOTOGRAPHIC GOODS WAS ALSO THEREFORE NOT ACCEPTED. A.O THEREFOR E CONSIDERED THE CASH DEPOSITS OF RS. 10,75,250/- IN THE NATIONAL CO-OP. BANK LTD. AS CASH CREDIT U/S. 68 OF THE ACT AND ADDED TO THE INCOME. AGGRIEV ED BY THE ORDER OF A.O., ASSESSEE CARRIED THE MATTER BEFORE LD. CIT(A) WHO C ONFIRMED THE ORDER OF A.O BY HOLDING AS UNDER:- 2.0 THE COUNSEL OF THE APPELLANT HAD FURNISHED CERT AIN ADDITIONAL EVIDENCES BUT THE SAME CANNOT BE ADMITTED AS THE APPELLANT HAD NO T ESTABLISHED AS TO HOW THE SAME WERE NOT PRODUCED BEFORE THE ASSESSING OFFICER . NUMBER OF OPPORTUNITIES WERE GIVEN TO THE APPELLANT AS IS EVIDENT FROM PAGE -1 OF THE ASSESSMENT ORDER. THE APPELLANT'S CASE IS NOT COVERED BY THE PROVISIO NS OF RULE-46A OF THE INCOME- TAX RULES, 1962. IN VIEW THEREOF, THE ADDITIONAL EV IDENCES ARE NOT ADMITTED AND THE APPEAL IS DECIDED ON THE MATERIAL ON RECORD. 3. THE ONLY GROUND OF APPEAL IS REGARDING THE ADDIT ION OF RS. 10,75,250/- MADE ON ACCOUNT OF UNEXPLAINED CASH DEPOSITS IN BANK ACC OUNT. THE APPELLANT HAD SUBMITTED BEFORE THE ASSESSING OFFICER THAT CASH DE POSITS IN THE BANK WAS ON ACCOUNT OF SALES REFLECTED IN THE P&L ACCOUNT. THE ADDITION WAS MADE ON THE REASONING THAT THE ASSESSEE HAD NOT PRODUCED THE CO PIES OF PURCHASE AND SALE ITA NO 327/A HD/2012 . A.Y. 2007-08 3 BILLS WHICH ARE THE BASIC DOCUMENTS. AS PER THE COP Y OF SO CALLED PROFIT AND LOSS, THERE IS NO OPENING STOCK NOR THE CLOSING STOCK. TH E OPENING CAPITAL AS WELL AS THE CLOSING CAPITAL WAS IN CASH FOR RS. 41,469/- AN D RS. 43,356/- RESPECTIVELY. NO ASSETS SHOWN EXCEPT CASH OF RS. 43,356/- WAS SHOWN IN THE BALANCE SHEET. THE LD. COUNSEL COULD NOT EXPLAIN THE CASH DEPOSITED IN THE BANK ACCOUNT EXCEPT BY SAYING THAT THE SAME WAS DEPOSITED OUT OF CASH SALE S. THE APPELLANT HAD NOT FURNISHED THE COPIES OF THE PURCHASE AND SALE BILLS NEITHER DURING THE COURSE OF ASSESSMENT PROCEEDINGS NOR DURING APPELLATE PROCEED INGS, THE STORY COOKED FOR THE PURCHASE AND SALE IS NOT ACCEPTABLE AND THE SAM E IS HEREBY REJECTED. THE BANK ACCOUNT WAS UTILIZED FOR SPECIFIC PURPOSE FOR A LIMITED PERIOD FROM 31.07.2006 TO 30.11.2006. CASH WAS DEPOSITED AND WI THDRAWN BY CHEQUES. THE STORY OF PURCHASE AND SALE IS ALSO FOR THE SAME PER IOD AND HAS BEEN COOKED UP TO EXPLAIN THE CASH DEPOSITS IN BANK ACCOUNT. SINCE , THE APPELLANT HAS FAILED TO SUBSTANTIATE THE EXPLANATION OF THE SOURCE OF CASH DEPOSITS IN BANK ACCOUNT, THE SAME WERE RIGHTLY TREATED AS UNEXPLAINED CASH DEPOS ITS U/S 68 OF THE ACT AND THE FINDING RECORDED BY THE ASSESSING OFFICER IN THIS R EGARD IS SUSTAINED AND THE ADDITION SO MADE FOR RS. 10,75,000/- IS CONFIRMED. THE GROUND OF APPEAL IS ACCORDINGLY DISMISSED. 4.0 IN THE RESULT, THE APPEA L IS DISMISSED. 4. AGGRIEVED BY THE AFORESAID ORDER OF LD. CIT(A), ASS ESSEE IS NOW IN APPEAL BEFORE US AND HAS RAISED THE FOLLOWING GROUNDS:- 1. THE LD. CIT(A) HAS BEEN ERRED IN UPHOLDING THE A SSESSMENT ORDER PASSED BY I.T.O., WARD 11(2) FOR ADDITION MADE OF RS. 10,75,2 50/- UNDER SECTION 68 CASH CREDIT. 5. SUBSEQUENTLY VIDE LETTER DATED 26.03.2012, ASSESSEE HAS RAISED THE ADDITIONAL GROUNDS WHICH READS AS UNDER:- 1. THE APPELLANT SUBMITS THE FOLLOWING ADDITIONAL G ROUNDS WITH THE PERMISSION OF HON. BENCH TO BE CONSIDERED WITH THE GROUNDS OF APP EAL SUBMITTED WITH THE APPEAL FILED ON 3-02-2012: ITA NO 327/A HD/2012 . A.Y. 2007-08 4 (A) THE APPELLANT SUBMITS THAT THE ISSUE OF NOTICE U/S 148 AND ASSESSMENT U/S 147 MADE BY THE AO AND CONFIRMED BY THE ID CIT(A) I S ILLEGAL AS THERE WAS NO REASON TO BELIEVE THAT THE INCOME OF RS. 10,75,250/ - HAS ESCAPED ASSESSMENT ONLY ON THE GROUND THAT THE APPELLANT HA S DEPOSITED CASH OF RS. 10,75,250/- IN BANK ACCOUNT. (B) THE APPELLANT SUBMITS THAT THE ADDITION OF RS. 10,75,250/- U/S 68 MADE BY AO AND CONFIRMED BY THE ID CIT(A) IS ILLEGAL IN VIEW O F THE FACT THAT THE ASSESSMENT OF BUSINESS INCOME OF RS. 1,26,820/- WAS MADE BY THE AO U/S 44 AF OF I.T ACT WHICH IS APPLICABLE IN THE CASE OF AP PELLANT ENGAGED IN RETAIL TRADE OF PHOTOGRAPHIC GOODS HAVING TURNOVER OF RS. 12,83,962/- ONLY AS PER BOOKS OF ACCOUNTS DURING THE YEAR. 6. 1 ST GROUND IS WITH RESPECT TO CHALLENGING THE ASSESSME NT MADE U/S. 147 OF THE ACT. BEFORE US, LD. A.R. DID NOT SERIOUSLY ARGUED N OR DEMONSTRATED AS TO HOW THE ASSESSMENT MADE BY THE A.O U/S. 147 WAS NOT IN ORDER. IN VIEW OF THE AFORESAID FACTS, WE ARE OF THE VIEW THAT THERE IS N O INFIRMITY IN THE ORDER PASSED BY A.O AND THUS THE FIRST GROUND IS DISMISSE D. 7. 2 ND GROUND IS WITH RESPECT TO ADDITION MADE U/S. 68 OF THE ACT. 8. A.O IN THE ASSESSMENT ORDER HAS NOTED THAT ASSESSEE HAD DEPOSITED CASH OF RS.10,75,250/- IN HIS BANK ACCOUNT AND WHEN ASSESSE E WAS ASKED TO EXPLAIN THE SOURCE IT WAS STATED TO BE OUT OF SALES REALIZA TION FROM BUSINESS. A.O HAS NOTED THAT THOUGH THE ASSESSEE WAS ASKED TO PRODUCE THE PURCHASE AND SALES BILLS FOR VERIFICATION, BUT THE SAME WERE NOT PRODU CED BEFORE A.O. A.O HAS ALSO NOTED THAT IT WAS STATED THAT THE BILLS ARE NO T AVAILABLE. IN THE ABSENCE OF ANY PROPER EXPLANATION A.O CONSIDERED THE CASH DEPO SITS IN NATIONAL CO-OP. BANK TO BE UNEXPLAINED CASH CREDIT U/S. 68 OF THE A CT. ITA NO 327/A HD/2012 . A.Y. 2007-08 5 9. BEFORE US, LD. A.R. SUBMITTED THAT THE CASH DEPOSIT S WERE THE CASH RECEIPTS OF THE BUSINESS OF PHOTOGRAPHIC MATERIAL. HE FURTHER S UBMITTED THAT THE A.O DID NOT ISSUE SUMMONS TO ANY OF THE PARTIES FOR VERIFIC ATION OF SALES OR PURCHASE AND IN SUCH CIRCUMSTANCES, HE SUBMITTED THAT NO ADD ITION U/S. 68 COULD HAVE BEEN MADE AND THEREFORE NO ADDITION WAS CALLED FOR. THE LD. D.R. ON THE OTHER HAND SUPPORTED THE ORDER OF A.O AND LD. CIT(A ) AND SUBMITTED THAT DESPITE VARIOUS OPPORTUNITIES ASSESSEE DID NOT PROD UCE ANY DETAILS OF PURCHASE AND SALES AND IN SUCH CIRCUMSTANCES, THE A .O WAS FULLY JUSTIFIED IN MAKING THE ADDITION U/S. 68. 10. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE ISSUE IN THE PRESENT CASE IS WITH RESPECT TO CASH D EPOSITED BY THE ASSESSEE IN THE BANK ACCOUNT. IT IS THE SUBMISSION OF THE ASSES SEE THAT THE CASH DEPOSITS REPRESENTS THE SALES REALIZATION FROM THE BUSINESS OF PHOTOGRAPHIC GOODS BUT WE FIND THAT LD. CIT(A) HAS NOTED THAT THE ASSESSEE HAS NOT PRODUCED THE COPIES OF PURCHASE AND SALES NEITHER DURING THE ASS ESSMENT PROCEEDINGS NOR DURING THE APPELLATE PROCEEDINGS. HE HAS ALSO NOTED THAT THE BANK ACCOUNT WAS UTILIZED FOR DEPOSITING CASH AND WITHDRAWALS BY CHEQUE AND FOR A LIMITED PERIOD WITHIN 31.07.2006 TO 30.11.2006. HE HAS FURT HER NOTED THAT ASSESSEE HAS FAILED TO SUBSTANTIATE THE EXPLANATION OF SOURC E OF CASH IN THE BANK ACCOUNT. BEFORE US, LD. A.R. HAS NOT PRODUCED ANY M ATERIAL TO CONTROVERT THE FINDINGS OF LD. CIT(A) NOR HAS PLACED ANY DOCUMENTA RY EVIDENCE LIKE SALES TAX REGISTRATION NUMBER ETC TO PROVE THAT ASSESSEE WAS INDEED DOING THE BUSINESS AND THE DEPOSITS IN BANK WERE RECEIPTS OF BUSINESS. FURTHER, THE SUBMISSION OF LD. A.R. ON NON ISSUANCE OF SUMMONS F OR INQUIRY FROM THE PARTIES ABOUT THE TRANSACTION ALSO CANNOT BE ACCEPT ED WHEN THE ASSESSEE HAD ITA NO 327/A HD/2012 . A.Y. 2007-08 6 NOT FURNISHED ANY DETAILS LIKE THE NAME, ADDRESS, P AN NUMBERS ETC OF THE PURCHASERS/SELLERS BEFORE THE A.O SO AS TO ENABLE H IM TO MAKE THE NECESSARY ENQUIRIES. IN VIEW OF THE AFORESAID FACTS, WE FIND NO REASON TO INTERFERE WITH THE ORDER OF LD. CIT(A) AND THUS DISMISS THIS GROUN D OF ASSESSEE. 11. IN THE RESULT, THE APPEAL OF ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 30 - 06 - 2015. SD/- SD/- (SHAILENDRA KR. YADAV) (ANIL CHATURVEDI) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD. TRUE COPY RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AH MEDABAD