Manoharla Rathilal Vasani, CHENNAI V. ITO, Tiruppur

ITA 357/CHNY/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 77297 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 2 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-05-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 19-05-2014
• Assessment Year: 2007-2008
• Appeal Filed On: 27-02-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: PRAMOD NANGIA IRS
• Assessee Lawyers: DR ANITA SUMANTH
• Keywords: Depreciation; Principle of natural justice; Wrong claim
• Section: 68

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI . . . , !' , # $! % BEFORE DR. O.K.NARAYANAN, VICE-PRESIDENT AND SHRI VIKAS AWASTHY, JUDICIAL MEMBER ./ ITA NO. 357/(MDS)/2013 / ASSESSMENT YEAR : 2007-08 SHRI MANOHARLAL RATHILAL VASANI, PROP. K.R.V.HOSIERY MILLS, 7, UNIVERSAL THEATRE ROAD TIRUPUR 641 604 NOW AT D.NO.49, K.P.N. COLONY 3 RD STREET, TIRUPUR 641 601 PAN ACWPM5917C APPELLANT) V. THE INCOME-TAX OFFICER, WARD-1(2), TIRUPUR. RESPONDENT) /APPELLANT BY : DR. ANITA SUMANTH, ADVOCATE / RESPONDENT BY : SHRI PRAMOD NANGIA, IRS, CIT ! / DATE OF HEARING : 19 TH MAY, 2014 '# ! / DATE OF PRONOUNCEMENT : 26 TH MAY, 2014 $& / O R D E R PER DR.O.K.NARAYANAN, VICE-PRESIDENT THIS APPEAL IS FILED BY THE ASSESSEE. THE RELEVANT ASSESSMENT YEAR IS 2007-08. THE APPEAL IS DIRECTED AGAINST THE APPELLATE ORDER PASSED BY THE COMMISSIONER OF INCOM E- - - ITA 357/13 2 TAX(APPEALS)-II AT COIMBATORE ON 22.5.2012. THE A PPEAL ARISES OUT OF THE ASSESSMENT COMPLETED UNDER SEC.143(3) OF THE INCOME- TAX ACT, 1961. 2. IN THE PRESENT CASE, THE ASSESSEE, AN INDIVIDUA L IS THE PROPRIETOR OF M/S.K.R.V.HOSIERY MILLS AND M.R.V. TR ADING CORPORATION AT TIRUPUR. THOSE CONCERNS ARE ENGAGED IN THE BUSINESS OF MANUFACTURE AND EXPORT OF HOSIERY GARME NTS. THE ASSESSEE FILED ITS RETURN OF INCOME, FOR THE IMPUGN ED ASSESSMENT YEAR, ON A TOTAL INCOME OF ` 1,28,840/-. THE ASSESSMENT WAS COMPLETED UNDER SEC.143(3) DETERMINING A TOTAL INCO ME OF ` 58,56,023/-. THE TOTAL ADDITION MADE BY THE ASSESS ING OFFICER AMOUNTED TO ` 57,27,183/-. 3. THE DETAILS OF THE TOTAL ADDITION OF ` 57,27,183/- ARE AS FOLLOWS : DIFFERENCE IN PURCHASES ` 1,00,000/- WRONG CLAIM OF DEPRECIATION ` 80,800/- UNACCOUNTED PAYMENTS TO CREDITORS M/S. MAKESH KUMAR SPINNING MILLS PVT. LTD. ` 23,63,000 M/S.MAKESH KUMAR EXPORTS ` 4,51,909 M/S.MAHAVIR SPINNING MILLS LTD. ` 27,31,474 ` 55,46,383/- ` 57,27,183/- -------------------- - - ITA 357/13 3 4. IN THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER FOUND THAT THE PURCHASE BILL ISSU ED BY M/S. MAKESH KUMAR SPINNING PVT. LTD. FOR ` 1,00,000/- WAS IN FACT DATED 28.4.2007, WHICH IS AFTER THE CLOSE OF THE IM PUGNED PREVIOUS YEAR. AT THE SAME TIME, THE ASSESSEE HAS MADE AN E NTRY OF PURCHASE IN THE PREVIOUS YEAR ITSELF, ON 28.3.2007. ON ENQUIRY, IT WAS FOUND THAT THE GOODS WERE RECEIVED BY THE ASSES SEE ONLY AFTER THE CLOSE OF THE PREVIOUS YEAR ENDED ON 31.3 .2007 AND, THEREFORE, THIS PURCHASE DID NOT RELATE TO THE IMPU GNED ASSESSMENT YEAR. ACCORDINGLY, THE ADDITION OF ` 1,00,000/- WAS MADE. 5. WHILE GOING THROUGH THE DEPRECIATION STATEMENT FILED BY THE ASSESSEE, THE ASSESSING OFFICER FOUND THAT T HE ASSESSEE HAS CLAIMED DEPRECIATION OF ` 80,800/- ON A FLAT OWNED BY THE ASSESSEE AT MANGALORE. THE ASSESSEE HAS CLAIMED DE PRECIATION ON THE GROUND THAT THE SAID FLAT WAS USED BY THE A SSESSEE FOR ITS BUSINESS PURPOSES. BUT THE ASSESSING OFFICER FOUND THAT THE SAID FLAT IS A RESIDENTIAL FLAT SITUATED AT MANGALORE AN D NOT USED FOR THE PURPOSES OF THE BUSINESS OF THE ASSESSEE. ACCORDIN GLY, THE DEPRECIATION PERTAINING TO THE SAID RESIDENTIAL FLA T AMOUNTING TO ` - - ITA 357/13 4 80,800/- HAS BEEN DISALLOWED AND ADDED TO THE INCOM E OF THE ASSESSEE. 6. WHILE SCRUTINIZING THE DETAILS OF THE CREDITORS , THE ASSESSING OFFICER FOUND THAT THE ASSESSEE HAS MADE CERTAIN PAYMENTS TO ITS CREDITORS BUT NOT ACCOUNTED IN THE BOOKS OF ACCOUNT. IN THE CASE OF M/S. MAKESH KUMAR SPINNING MILLS PVT. LTD., THE ASSESSING OFFICER FOUND THAT THE ASSESSEE HAS MADE CASH PAYMENTS TO THE EXTENT OF ` 23,63,000/-, AS IT IS EVIDENT FROM THE STATEMENT OF ACCOUNTS FURNISHED BY THE SAID PAR TY. THE PAYMENTS ARE NOT REFLECTED IN THE BOOKS OF ACCOUNT. THE ASSESSEE WAS ASKED TO EXPLAIN THIS DISCREPANCY. AT THE TIME OF HEARING OF THE CASE, BEFORE THE ASSESSING OFFICER, ON 23.12.20 09, THE AUTHORIZED REPRESENTATIVE APPEARING FOR THE ASSESSE E ADMITTED THAT THOSE CASH PAYMENTS MADE TO M/S. MAKESH KUMAR SPINNING MILLS PVT. LTD., WERE NOT ACCOUNTED BY THE ASSESSEE . ACCORDINGLY, THE ASSESSING OFFICER MADE AN ADDITION OF ` 23,63,000/- TO THE RETURNED INCOME OF THE ASSESSEE. 7. IN THE CASE OF ANOTHER TRADER, M/S. MAKESH KUMA R EXPORTS, THE ASSESSING OFFICER FOUND THAT THERE WAS A CREDIT BALANCE OF ` 4,51,909/- OUTSTANDING IN THE NAME OF THE SAID PAR TY - - ITA 357/13 5 IN THE BOOKS OF ACCOUNT OF THE ASSESSEE, WHEREAS M/ S. MAKESH KUMAR EXPORTS HAS STATED THAT NO SUCH BALANCE IS O UTSTANDING IN THE ACCOUNTS. THE ASSESSEE DID NOT EXPLAIN THE POS ITION. THEREFORE, THE ASSESSING OFFICER MADE ANOTHER ADDIT ION OF ` 4,51,909/-. 8. M/S. MAHAVIR SPINNING MILLS LTD. IS ANOTHER PAR TY HAVING TRANSACTIONS WITH THE ASSESSEE. THE BALANCE OUTSTANDING IN THE NAME OF M/S. MAHAVIR SPINNING MILLS LTD. IN THE BOOKS OF ACCOUNT OF THE ASSESSEE WAS ` 27,31,474/-. THE ASSESSING OFFICER ASKED THE ASSESSEE TO PROVE THE GENUINENESS OF THIS LIABILITY SHOWN AGAINST M/S. MAHAVIR SPINNING MILLS LTD. IT REPLIED THAT IT WOULD BE DIFFICULT FOR THE ASSESSEE FOR OBT AINING THE STATEMENT AND CONFIRMATION FROM THE SAID PARTY AND ALSO STATED THAT THE ASSESSEE HAD SQUARED UP THE ACCOUNTS MORE THAN 10, 12 YEARS BACK EVEN THOUGH THE BALANCE CONTINUED TO REM AIN IN THE BOOKS OF ACCOUNT. AS THESE EXPLANATIONS WERE NOT C ONVINCING, THE ASSESSING OFFICER ADDED THE SAID AMOUNT OF ` 27,31,474/- TO THE INCOME OF THE ASSESSEE. - - ITA 357/13 6 9. IT IS IN THE ABOVE FASHION THAT THE ASSESSING O FFICER HAS MADE A TOTAL ADDITION OF ` 57,27,183/- TO THE INCOME RETURNED BY THE ASSESSEE. 10. IN FIRST APPEAL, ALL THESE ADDITIONS WERE CONS IDERED BY THE COMMISSIONER OF INCOME-TAX(APPEALS) IN A VERY D ETAILED MANNER. THE COMMISSIONER OF INCOME-TAX(APPEALS) HA S GIVEN NUMBER OF OPPORTUNITIES TO THE ASSESSEE TO PRODUCE AVAILABLE DETAILS, BEFORE HIM. IN FACT, THE ASSESSEE HAD MAD E A SUBMISSION BEFORE THE COMMISSIONER OF INCOME-TAX(APPEALS) THAT ALL THE NECESSARY PARTICULARS TO PROVE THE GENUINENESS OF T HE CREDIT BALANCES AND OUTSTANDING AMOUNTS WERE AVAILABLE WIT H THE ASSESSEE AND IT WOULD PRODUCE ALL THOSE MATERIALS T O THE SATISFACTION OF THE COMMISSIONER OF INCOME-TAX(APPE ALS). IT IS ON THE BASIS OF THE ABOVE SUBMISSION THAT THE COMMISSI ONER OF INCOME-TAX(APPEALS) HAS GRANTED UMPTEEN NUMBER OF OPPORTUNITIES. BUT AS OBSERVED BY THE COMMISSIONER OF INCOME- TAX(APPEALS), NO SUCH DETAILS WERE HOWEVER PLACED B EFORE HIM AND, THEREFORE, HE HAD TO DISPOSE OF THE APPEAL ON THE BASIS OF MATERIALS AVAILABLE ON RECORD. - - ITA 357/13 7 11. AS FAR AS THE MERITS OF THE CONTENTIONS OF THE ASSESSEE ARE CONCERNED, THE COMMISSIONER OF INCOME- TAX(APPEALS) FOUND THAT THE ASSESSING OFFICER HAS M ADE THE ADDITIONS ON VALID GROUNDS, AS DISCREPANCIES EXISTE D IN THE BOOKS OF ACCOUNT MAINTAINED BY THE ASSESSEE WHEN COMPARE D TO THE STATEMENTS OF ACCOUNT FURNISHED BY THE CREDITORS. HE ALSO FOUND THAT THE PURCHASE MADE IN THE SUBSEQUENT PREVIOUS Y EAR HAS BEEN DEBITED IN THE PREVIOUS YEAR AND TO THAT EXTENT, TH E ASSESSEE HAS UNDERSTATED THE INCOME OF THE ASSESSEE. HE ALSO A GREED THAT THE RESIDENTIAL FLAT AT MANGALORE WAS NOT PROVED TO BE USED FOR THE BUSINESS OF THE ASSESSEE AND, THEREFORE, CLAIM OF D EPRECIATION MADE BY THE ASSESSEE ON THAT RESIDENTIAL FLAT WAS N OT JUSTIFIED. ACCORDINGLY, HE CONFIRMED THE ORDER OF THE ASSESSIN G OFFICER AND DISMISSED THE APPEAL FILED BEFORE HIM. 12. THE ASSESSEE IS AGGRIEVED AND, THEREFORE, THE SECOND APPEAL BEFORE THE TRIBUNAL. 13. THE GROUNDS RAISED BY THE ASSESSEE READ A BEL OW : 1. THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) DATED 22.05.2012 IS CONTRARY TO LAW, FACT S AND CIRCUMSTANCES OF THE CASE AND OPPOSED TO PRINCIPLE S OF NATURAL JUSTICE. - - ITA 357/13 8 2. THE COMMISSIONER OF INCOME TAX (APPEALS) ERRED I N DISPOSING OFF THE APPEAL WITHOUT AFFORDING A PROPER OPPORTUNITY TO THE APPELLANT HEREIN. HE OUGHT TO HA VE NOTED THAT THE APPELLANT HAD FULL PARTICULARS TO SU PPORT THE VARIOUS GROUNDS OF APPEAL RAISED BY HIM AND OUG HT TO HAVE ALLOWED A PROPER OPPORTUNITY OF PRODUCTION OF THE SAME. 3. THE COMMISSIONER OF INCOME TAX (APPEALS) ERRED I N CONFIRMING THE ADDITION OF RS.1,00,000/- ON ACCOUNT OF DIFFERENCE IN PURCHASES. HE OUGHT TO HAVE SEEN THAT THE GOODS HAD BEEN RECEIVED IN FINANCIAL YEAR 2006-07 A ND FORMED PART OF THE CLOSING STOCK AS ON 31.03.2007. THE INVOICE IN RESPECT THEREOF HAD BEEN RECEIVED LATER. THE ADDITION IS THEREFORE UNWARRANTED. 4. THE COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRONEOUSLY DISALLOWED DEPRECIATION OF RS.80,800/- ON THE FLAT OWNED BY THE APPELLANT AT MANGALORE IN SO FAR AS THE SAME WAS WHOLLY USED FOR THE PURPOSE OF BUSINES S. 5. THE COMMISSIONER OF INCOME TAX (APPEALS) OUGHT T O HAVE NOTED THAT THE APPELLANT CARRIES ON OPERATIONS IN SOUTH AND NORTH KANARA AND UTILIZED THE PREMISES FO R STORAGE OF GOODS. THE ADDITION IS THUS WHOLLY UNWARRANTED AND LIABLE TO BE DELETED. 6. THE COMMISSIONER OF INCOME TAX (APPEALS) ERRED I N CONFIRMING THE ADDITION OF RS.27,31,474/- UNDER SEC .68 - - ITA 357/13 9 OF THE IT ACT WITHOUT CONSIDERING THE EXPLANATION O FFERED BY THE APPELLANT. 7. THE COMMISSIONER OF INCOME TAX (APPEALS) OUGHT T O HAVE SEEN THAT NO OPPORTUNITIES WERE GIVEN TO THE APPELLANT TO SUBSTANTIATE THE GENUINENESS OF THE TRANSACTIONS. HENCE THE ADDITION UNDER SEC.68 OF TH E IT ACT IS UNJUSTIFIED AND LIABLE TO BE DELETED. 8. THE COMMISSIONER OF INCOME TAX (APPEALS) ERRED I N NOT NOTING THE CIRCUMSTANCES IN WHICH THE TRANSACTI ONS RELATING TO THE CREDIT OF RS.27,31,474/- AND ERRED IN CONFIRMING THE ASSESSMENT OF THE SAME U/S 68 MERELY ON THE BASIS OF THE STATEMENT OF ACCOUNTS OF M/S. MAHAVIR SPINNING MILLS LTD. THE AUTHORITY OUGHT TO HAVE GRANTED AN OPPORTUNITY FOR PRODUCTION OF EVIDENCE I N THIS REGARD AND TAKEN INTO CONSIDERATION THE SPECIFIC SUBMISSIONS MADE BY THE APPELLANT HEREIN. 9. THE COMMISSIONER OF INCOME TAX (APPEALS) ERRED I N NOT NOTING THAT THE PROVISIONS OF SEC.68 OF THE ACT DO NOT APPLY TO THE SAID TRANSACTION AT ALL. 10. THE ASSESSING AUTHORITY ERRED IN NOT DELETING THE LEVY OF INTEREST U/S 234 B. 11. ANY OTHER GROUND THAT MAY BE RAISED AT THE TIME OF PERSONAL HEARING. - - ITA 357/13 10 14. WE HEARD DR. ANITA SUMANTH, THE LEARNED COUNSE L APPEARING FOR THE ASSESSEE AND SHRI PRAMOD NANGIA, THE LEARNED COMMISSIONER OF INCOME-TAX, APPEARING FOR THE REVEN UE. BOTH SIDES ARE ARGUED AT LENGTH. 15. IN SPITE OF SEPARATE GROUNDS RAISED BY THE ASS ESSEE ON INDIVIDUAL ADDITION, THE THRUST OF THE ARGUMENT OF THE LEARNED COUNSEL APPEARING FOR THE ASSESSEE IS THAT THE ASS ESSEE MAY BE GIVEN ONE MORE OPPORTUNITY TO PRESENT ALL THE NECES SARY EVIDENCES AND PARTICULARS BEFORE THE ASSESSING OFFICER, SO TH AT THE ASSESSEE WILL BE ABLE TO CONVINCE THAT NO DISCREPANCY IN THE CREDIT BALANCES EVER EXISTED AS PRESUMED BY THE ASSESSING AUTHORITY . SHE EXPLAINED THAT EACH AND EVERY ADDITION MADE BY THE ASSESSING OFFICER IS WITHOUT ANY BASIS FOR THE REASON THAT TH E ASSESSEE HAS MAINTAINED PROPER BOOKS OF ACCOUNT AND ALL THE DISC REPANCIES POINTED OUT BY THE ASSESSING AUTHORITY ARE SUPPORTE D BY EVIDENCES AND MATERIALS. SHE FURTHER EXPLAINED THAT THESE MA TERIALS COULD NOT BE PRODUCED BEFORE THE ASSESSING OFFICER BUT TH OSE MATERIALS WERE AVAILABLE WITH THE ASSESSEE, WHEN THE FIRST A PPEAL WAS TAKEN FOR HEARING. BUT BECAUSE OF SOME DIFFICULTIES FACE D BY THE ASSESSEE, THOSE DETAILS COULD NOT BE PRODUCED BEFOR E THE - - ITA 357/13 11 COMMISSIONER OF INCOME-TAX(APPEALS). IT IS THE PLE A OF THE LEARNED COUNSEL THAT JUSTICE MAY BE DONE TO THE ASS ESSEE AND ATLEAST ONE MORE OPPORTUNITY MAY BE GIVEN TO PRODUC E THE NECESSARY DETAILS AND PARTICULARS. 16. THE LEARNED COMMISSIONER OF INCOME-TAX, APPEAR ING FOR THE REVENUE EXPLAINED THAT THE ASSESSING OFFICE R, HIMSELF HAD GIVEN SUFFICIENT OPPORTUNITIES TO THE ASSESSEE TO P RODUCE EVIDENCES OR DETAILS TO REBUT THE FINDINGS ARRIVED AT BY THE ASSESSING AUTHORITY. THE LEARNED COMMISSIONER ARGU ED THAT IN THE CASE OF ADDITION OF ` 23,63,000/-, THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE, HIMSELF HAS ADMITTED BEFORE THE ASSES SING OFFICER THAT THOSE CASH PAYMENTS MADE TO M/S. MAKESH KUMAR SPINNING MILLS PVT. LTD. WERE NOT ACCOUNTED BY THE ASSESSEE. THE LEARNED COMMISSIONER HAS FURTHER POINTED OUT THAT IN THE CA SE OF M/S. MAHAVIR SPINNING MILLS LTD., THE ASSESSEE HAS CLEAR LY STATED BEFORE THE ASSESSING AUTHORITY THAT IT WAS NOT POSS IBLE FOR IT TO FURNISH THE DETAILS FROM THE CREDITOR. THE ASSESSE E HAS ALSO POINTED OUT BEFORE THE ASSESSING OFFICER THAT OUTST ANDING AMOUNTS WERE IN FACT PAID LONG BACK AND THE BALANCES WERE J UST CONTINUING IN THE BOOKS OF ACCOUNT. THE LEARNED COMMISSIONER POINTED OUT - - ITA 357/13 12 THAT THIS ITSELF SHOWS THAT NO SUCH LIABILITY EXIST ED IN THE BOOKS OF ACCOUNT OF THE ASSESSEE AGAINST M/S. MAHAVIR SPINNI NG MILLS LTD. AND STILL THE ASSESSEE DID NOT OFFER IT AS ITS INCO ME SO FAR. 17. THEREFORE, THE LEARNED COMMISSIONER OF INCOME- TAX SUBMITTED THAT ON THE ISSUE OF OPPORTUNITY AS WELL AS ON MERITS, THE ASSESSEE HAS NO CASE AND THE APPEAL BE DISMISSE D. 18. WE CONSIDERED THE MATTER IN DETAIL. 19. AS FAR AS THE QUESTION OF OPPORTUNITY IS CONCE RNED, WE MAY NOT BE ABLE TO AGREE WITH THE PLEADINGS MADE BY THE LEARNED COUNSEL APPEARING FOR THE ASSESSEE. THE CO MMISSIONER OF INCOME-TAX(APPEALS) HAS GIVEN A NUMBER OF OPPORT UNITIES TO THE ASSESSEE TO PRODUCE THE DETAILS AND EVIDENCES, IF ANY, AVAILABLE WITH IT BETWEEN 14.11.2011 TO 17.5.2012. THE COMMI SSIONER OF INCOME-TAX(APPEALS) HAS KEPT THE HEARING OF THE APP EAL IN PENDING FOR ALMOST A PERIOD OF SIX MONTHS. THE ASSESSEES REPRESENTATIVE APPEARED ONLY ON 1.2.2012. THEREAFTER, IT SOUGHT A DJOURNMENT AFTER ADJOURNMENT. IT IS AFTER A LONG TIME WAITING THAT THE COMMISSIONER OF INCOME-TAX(APPEALS) HAS FINALLY PRO CEEDED TO DISPOSE OF THE APPEAL FILED BEFORE HIM. THE ASSESS ING OFFICER HAS - - ITA 357/13 13 ALSO GIVEN A LOT OF OPPORTUNITIES TO THE ASSESSEE. BUT IT IS A MATTER OF FACT ON RECORD THAT THE ASSESSEE WAS NOT AT ALL CURIOUS ENOUGH TO UTILIZE THE OPPORTUNITIES GIVEN BY THE SUCCESSIV E AUTHORITIES. THEREFORE, AT THIS STAGE, THE PLEA OF ONE MORE OPPO RTUNITY IS ONLY A REPETITION OF THE SAME CONDUCT, THE ASSESSEE HAD AD OPTED BEFORE THE LOWER AUTHORITIES. THEREFORE, WE ARE NOT INCLI NED TO REMIT BACK THE MATTER FOR GIVING FURTHER OPPORTUNITY TO THE AS SESSEE. THIS PRELIMINARY PLEA IS THUS, REJECTED. 20. IF WE GO THROUGH THE ASSESSMENT ORDER, IT IS V ERY CLEAR THAT THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE, HIMSELF HAS ADMITTED BEFORE THE ASSESSING OFFICER THAT CASH PAY MENTS MADE TO M/S. MAKESH KUMAR SPINNING MILLS PVT. LTD. TO THE E XTENT OF ` 23,63,000/- WERE NOT ACCOUNTED IN THE BOOKS OF ACCO UNT OF THE ASSESSEE. REGARDING THE ADDITION OF ` 27,31,474/-, THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE HAS ADMITTED BEFORE THE ASSESSING OFFICER THAT THE SAID CREDIT BALANCE WAS PAID OFF L ONG BACK AND THE ASSESSEE WAS ONLY CARRYING FORWARD THE BALANCE IN T HE BOOKS OF ACCOUNT. THE ASSESSEE COULD NOT PRODUCE ANY DETAIL S REGARDING EITHER THE PAYMENTS SAID TO HAVE BEEN MADE IN THE E ARLIER ASSESSMENT YEARS OR ANY SUPPORT FOR THE OUTSTANDING BALANCE ON - - ITA 357/13 14 THE LAST DAY OF THE IMPUGNED PREVIOUS YEAR. THEREF ORE, IT IS TO BE SEEN THAT REGARDING THE TWO ADDITIONS MADE BY THE A SSESSING OFFICER, WHICH ARE THE MOST IMPORTANT, THE ASSESSEE DID NOT HAVE ANY MATERIALS AT THE ASSESSMENT STAGE ITSELF. THE SUBSEQUENT CONDUCT OF THE ASSESSEE BEFORE THE COMMISSIONER OF INCOME- TAX(APPEALS) SHOWS THAT IN FACT THE ASSESSEE DID N OT HAVE ANY EVIDENCE/MATERIAL TO PRODUCE EVEN BEFORE THE COMMIS SIONER OF INCOME-TAX(APPEALS), AS OTHERWISE ARGUED BY THE ASS ESSEE. THEREFORE, THE ARGUMENTS ON THE AVAILABILITY OF EVI DENCES AND MATERIALS ARE NOT CONVINCING AND THIS ITSELF IS A R EASON NOT TO GIVE ONE MORE OPPORTUNITY TO THE ASSESSEE, AS IT WILL BE ONLY AN EMPTY FORMALITY. 21. NOW, REGARDING THE MERITS OF THE ISSUES, WE FI ND THAT THE ASSESSEE IS TO LOOSE ALL THE WICKETS. A PURCH ASE OF ` 1,00,000/- WAS MADE BY THE ASSESSEE IN THE SUBSEQUE NT ASSESSMENT YEAR, BUT THE ASSESSEE HAS INCLUDED THE SAID AMOUNT OF ` 1,00,000/- IN THE PURCHASE ACCOUNT OF THE IMPUGNED ASSESSMENT YEAR. IT IS A PRE-BOOKING OF PURCHASE, WHICH HAS RESULTED IN UNDERSTATING THE PROFIT OF THE IMPUGNED ASSESSMENT - - ITA 357/13 15 YEAR. THIS ADDITION IS THEREFORE, RIGHTLY MADE BY THE ASSESSING OFFICER. 22. REGARDING THE CLAIM OF DEPRECIATION OF ` 80,800/-, ON THE FLAT AT MANGALORE, THERE IS NO EVIDENCE ON RECO RD TO SHOW THAT THE SAID FLAT WAS USED BY THE ASSESSEE FOR THE PURP OSES OF BUSINESS CARRIED ON BY IT. THE FLAT WAS NOT A BUS INESS PROPERTY AS SUCH; IT IS A RESIDENTIAL FLAT. THEREFORE, IT IS T HE ONUS OF THE ASSESSEE TO SHOW THAT THE SAID RESIDENTIAL FLAT WA S IN FACT USED BY THE ASSESSEE FOR THE PURPOSES OF ITS BUSINESS. TH E ASSESSEE HAS ALSO NOT SHOWN THE COST OF THE FLAT IN ITS ACCOUNTS , IF IT WAS USED, WHICH WAS NOT BROUGHT FOR BUSINESS PURPOSES. THERE FORE, WE FIND THAT THE CLAIM OF DEPRECIATION OF THE ASSESSEE ON T HE RESIDENTIAL FLAT AT MANGALORE CANNOT BE ACCEPTED. THE ASSESSIN G OFFICER HAS RIGHTLY DISALLOWED THE CLAIM OF DEPRECIATION MADE B Y THE ASSESSEE. 23. REGARDING THE ADDITION OF ` 23,63,000/-, WE HAVE TO STATE THAT THE AUTHORIZED REPRESENTATIVE OF THE ASS ESSEE HAS ALREADY STATED BEFORE THE ASSESSING OFFICER THAT TH E ENTIRE AMOUNT HAS BEEN PAID BY THE ASSESSEE IN CASH AND THOSE CA SH PAYMENTS MADE TO M/S. MAKESH KUMAR SPINNING MILLS PVT. LTD. HAVE NOT BEEN RECORDED IN THE BOOKS OF ACCOUNT. EVEN IF THA T ADMISSION - - ITA 357/13 16 MADE BEFORE THE ASSESSING OFFICER, COULD BE REBUTTE D FOR THE SAKE OF ARGUMENT, STILL IT IS A FACT THAT THE ASSESSEE H AS NOT PRODUCED ANY EVIDENCE TO SHOW THAT THOSE PAYMENTS WERE IN FA CT ACCOUNTED. WHEN NO DETAILS/EVIDENCES ARE AVAILABLE AS SUCH, IT IS QUITE INCUMBENT ON THE ASSESSING OFFICER TO HOLD THAT THE ASSESSEE HAS MADE UNACCOUNTED PAYMENTS IN CASH TO THE EXTENT OF ` 23,63,000/-. THEREFORE, IT IS TO BE SEEN THAT THE SAID ADDITION HAS RIGHTLY BEEN MADE BY THE ASSESSING OFFICER. 24. REGARDING THE ADDITION OF ` 4,51,909/- PERTAINING TO M/S. MAKESH KUMAR EXPORTS, THE SAID BALANCE IS NOT VISIBLE IN THE STATEMENT OF ACCOUNTS FURNISHED BY THE SAID CREDITO R. THE ASSESSEE HAS NOT MADE ANY ATTEMPT TO RECONCILE THE POSITION NOR BROUGHT ANY CLARIFICATION FROM M/S. MAKESH KUMAR EX PORTS TO THE SATISFACTION OF THE ASSESSING OFFICER. IN SUCH CIR CUMSTANCES, IT IS TO BE HELD THAT THE AMOUNT OF ` 4,51,909/- IS A CREDIT UNEXPLAINED. THE SAID ADDITION IS, THEREFORE, CONFIRMED. 25. REGARDING THE ADDITION OF ` 27,31,474/-, ON ONE STAGE THE ASSESSEE EXPLAINED THAT IT WOULD BE DIFFICULT FOR IT TO OBTAIN THE STATEMENT OF ACCOUNTS/CONFIRMATION FROM THE SAID PA RTY AND, THEREFORE, THE ASSESSEE WOULD NOT BE ABLE TO FURNIS H ANY FURTHER - - ITA 357/13 17 LIGHT INTO THE GENUINENESS OF THE SAID BALANCE OUTS TANDING TO THE CREDIT OF M/S. MAHAVIR SPINNING MILLS LTD. THEREAF TER, THE ASSESSEE CHANGES ITS STAND AND SUBMITS THAT THE AMO UNT OF ` 27,31,474/- WAS IN FACT PAID 10, 12 YEARS BACK AND NO BALANCE WAS PAYABLE TO M/S. MAHAVIR SPINNING MILLS LTD. IF THAT IS THE CASE, THE ASSESSEE HAS NOT SHOWN THE ACCOUNTS TO THE ASSE SSING OFFICER, HOW AND WHEN THOSE REPAYMENTS WERE MADE BY THE ASSESSEE. NOTHING IS VISIBLE IN THE ACCOUNTS. AL TERNATIVELY, THE ASSESSEE DID NOT EXPLAIN, WHY THE PAID OFF BALANCE WAS CARRIED ON BY THE ASSESSEE YEAR AFTER YEAR. IN THE FINAL ANAL YSIS, THE AMOUNT SHOULD BE TREATED EITHER AS A CASE OF UNACCOUNTED P AYMENTS OR AS A CASE OF INCOME BY WAY OF NON-EXISTENT LIABILITY. THEREFORE, THERE IS NO CHOICE BEFORE THE ASSESSING OFFICER EXCEPT TO ADD THE SAID AMOUNT OF ` 27,31,474/- TO THE INCOME OF THE ASSESSEE. 26. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, WE FIND THAT ALL THE ADDITIONS HAVE BEEN MADE BY THE ASSESS ING OFFICER FOR VALID GROUNDS. THOSE ADDITIONS ARE SUSTAINABLE BOT H, IN FACT AND LAW. THE COMMISSIONER OF INCOME-TAX(APPEALS) HAS R IGHTLY DISMISSED THE FIRST APPEAL FILED BY THE ASSESSEE. - - ITA 357/13 18 27. IN RESULT, THIS APPEAL FILED BY THE ASSESSEE I S DISMISSED. ORDER PRONOUNCED ON MONDAY, THE 26 TH OF MAY, 2014 AT CHENNAI. SD/- SD/- ( $ % ) ( &' . . . ( (VIKAS AWASTHY) (DR . O.K.NARAYANAN) ) *% /JUDICIAL MEMBER +,- /VICE-PRESIDENT .) /CHENNAI, /* /DATED, THE 26 TH MAY, 2014. MPO* *0 1$2$ /COPY TO: 1. /APPELLANT 2. /RESPONDENT 3. 3( /CIT(A) 4. 3 /CIT 5. $45 6 /DR 6. 5&7 /GF.