Ghanshyam Bafna, Neemuch V. The ITO, Neemuch

ITA 381/IND/2013

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 2283 (ITAT-INDORE)
• Duration Of Justice: 3 year(s) 11 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-05-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 31-05-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: MOHD JAVED
• Assessee Lawyers: S S DESHPANDE
• Keywords: Audit objection; Additional evidence; Tax effect

Judgement Text

SHRI GHANSHYAM BAFNA V. ITO- NEEMUCH / I.T.A. NO.38 1&408 /IND/2013/A.Y.:09-10 PAGE 1 OF 7 , , , ' .., ( IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE SHRI CHANDRA MOHAN GARG, JM, AND SHRI O.P.MEENA, AM ... / I.T.A. NO.381 &408 /IND/2013 / ASSESSMENT YEAR: 2009-10 1.SHRI GHANSHYAM BAFNA 35- A,14/3, VIKAS NAGAR NEEMUCH 2. INCOME TAX OFFICER , NEEMUCH VS. 1. INCOME TAX OFFICER, NEEMUCH 2.SHRI GHANSHYAM BAFNA 35- A,14/3, VIKAS NAGAR NEEMUCH . . ./ PAN:ADYPB 7650 E , / APPELLANT -., / RESPONDENT , / / APPELLANT BY SHRI S.S. DESHPANDE, CA -., / / RESPONDENT BY SHRI MOHD. JAVED, SR. D.R. / / DATE OF HEARING 15-05-2017 3 / / DATE OF PRONOUNCEMENT .16.-05-2017 / O R D E R PER O.P. MEENA, ACCOUNTANT MEMBER. 1. THESE ARE CROSS APPEALS FILED BY THE ASSESSEE AND R EVENUE AGAINST THE ORDER OF COMMISSIONER OF INCOME-TAX (AP PEALS)-UJJAIN (IN SHORT CIT(A)) DATED 28-03-2013 FOR THE ASSESSMENT Y EAR 2009-10. 2. FIRST WE DEAL WITH REVENUE`S APPEAL IN I.T.A. NO . 408/IND/2013/AY09-10 3. WE HAVE HEARD BOTH THE SIDES. WE FIND THAT THE CBDT VIDE CIRCULAR NO.21/2015 ISSUED ON 10.12.2015 [F. NO. 27 9/MISC. 142/2007- ITJ (PT)] HAS REVISED THE MONETARY LIMIT FOR FILING OF APPEAL BEFORE TRIBUNAL FIXING THE TAX EFFECT LIMIT AT RS.10 LACS. THE SAID CIRCULAR SUPERSEDES THE EARLIER INSTRUCTIONS/CIRCULAR ISSUED ON THE SUBJECT OF TAX EFFECT AND APPLIES TO ALL PENDING APPEAL RETROSPECT IVELY. THE RELEVANT SHRI GHANSHYAM BAFNA V. ITO- NEEMUCH / I.T.A. NO.38 1&408 /IND/2013/A.Y.:09-10 PAGE 2 OF 7 PARA 10 OF CIRCULAR IS AS FOLLOWS FOR READY REFEREN CE: - 10.THIS INSTRUCTION WILL APPLY RETROSPECTIVELY TO PENDING A PPEALS AND APPEALS TO BE FILED HENCEFORTH IN HIGH COURTS/ TRIBUNALS. PEND ING APPEALS BELOW THE SPECIFIED TAX LIMITS IN PARA-3 ABOVE MAY BE WIT HDRAWN/NOT PRESSED. APPEALS BEFORE THE SUPREME COURT WILL BE GOVERNED B Y THE INSTRUCTIONS ON THIS SUBJECT, OPERATIVE AT THE TIME WHEN SUCH AP PEAL WAS FILED. THE BOARD HAS PROVIDED EXEMPTIONS AT CLAUSE (8) OF THE INSTRUCTIONS WHEREIN IT HAS BEEN PROVIDED THAT THESE INSTRUCTION S WILL NOT BE APPLICABLE, IF VIRES OF ANY PROVISIONS HAS BEEN QUA SHED BY IMPUGNED ORDER OR ADDITION WAS MADE ON SOME AUDIT OBJECTIONS OR THE ADDITION RELATES TO UNDISCLOSED FOREIGN ASSETS/BANK ACCOUNTS , ETC. WE FIND THAT THE PRESENT CASE DOES NOT FALL WITHIN THE EXEMPTION CLAUSE AND THE TAX IS LESS THAN RS.10 LACS. THEREFORE, THE PRESENT APP EAL IS NOT MAINTAINABLE AND HENCE DISMISSED. 4. IN THE RESULT, THE APPEAL OF THE REVENUE STANDS DIS MISSED. 5. NOW WE SHALL TAKE UP THE ASSESSEE`S APPEAL IN I. T.A. NO. 381/IND/2013/A.Y. 09-10. 6. GROUND NO. 1 RELATES NOT CONSIDERING THE SOURCE OF CASH DEPOSIT OF RS. 18 LACS INTO BANK ACCOUNT WITHOUT AP PRECIATING FACTS THAT SAME WAS RECEIVED BY THE ASSESSEE AGAINS T AGREEMENT TO SALE OF PROPERTY. 7. FACTS APROPOS OF THIS GROUND ARE THAT THE ASSESSEE HAS SHOWN CASH DEPOSITOFRS 27,41,000/- IN HIS BANK ACCOUNT MA INTAINED WITH HDFC BANK. HOWEVER, NO SOURCE OF THE SAME WAS EXPLA INED HENCE, SAME WERE TREATED AS UNEXPLAINED BY THE AO. 8. IN APPEAL BEFORE THE LD. CIT (A), IT WAS CLAIMED TH AT THE RECEIPT OF RS. 18 LACS ARE IN RESPECT OF LAND ADMEASURING 700 SQ. FT. AT SITUATED AT MHOW, NASIRABAD MAIN ROAD, NEEMUCH AGAI NST THE AGREEMENT TO SALE DATED 04-05-2008, ENTERED IN TO W ITH SHRI NARENDRA SINGH AND SHRI VINOD KUMAR GEHLOT. THE LAND UNDER C ONSIDERATION RECEIVED BY THE ASSESSEE ON RENT OF RS. 7,000 PER A NNUM AS PER RENT SHRI GHANSHYAM BAFNA V. ITO- NEEMUCH / I.T.A. NO.38 1&408 /IND/2013/A.Y.:09-10 PAGE 3 OF 7 AGREEMENT DATED 25-07-1995 WITH MUNICIPAL COUNCIL NEEMUCH FOR A PERIOD FROM 11-07-1995 TO 10-07-1996, WHICH COULD B E RENEWED FOR FURTHER PERIOD. HOWEVER, THE LD. CIT (A) OBSERVED T HAT AS PER THE CONDITIONS LAID DOWN IN THE RENT AGREEMENT DATED 25 -07-1995, THE ASSESSEE CAN UTILISE SAID LAND FOR HIS BUSINESS PUR POSE BUT HAD NO AUTHORITY TO TRANSFER THE LAND TO ANY OTHER PERSON WITHOUT THE PERMISSION OF THE MUNICIPAL CORPORATION. THE ASSESS EE HAS NO OWNERSHIP ON THE SAID LAND. FURTHER NO PERMISSION T AKEN FROM MUNICIPAL CORPORATION FOR TRANSFER. THE APPELLANT H AS FAILED TO FURNISH ANY DOCUMENT TO PROVE THAT THE APPELLANT HAS TAKEN ANY PERMISSION FROM MUNICIPAL CORPORATION, NEEMUCH FOR RENEWAL OF RENT AGREEMENT AS WELL AS TRANSFER OF PROPERTY TO OTHER PERSONS. THE APPELLANT HAS NO RIGHT ON ALLEGED PROPERTY TO SELL OFF THE SAME. THE IDENTITY AND SOURCE OF ALLEGED BUYERS ALSO COULD NOT BE ESTABLISHED BY THE APPELLANT. MOREOVER, THE APPELLANT HAS REFLECTED THIS RECEIPT AS UNSECURED LOAN IN HIS BALANCE SHEET. ALL THESE FACTS GO AGAINST THE A PPELLANT ESTABLISHING THAT THE ALLEGED TRANSACTION IN SUPPORT OF WHICH HE FURNISHED THE DOCUMENTS TO EXPLAIN THE SOURCE OF CASH DEPOSIT IN BANK ACCOUNT ARE NOT GENUINE. CONSIDERING ABOVE THE LD. CIT (A) UPHE LD THE ADDITION OF RS. RS. 18 LACS ON THIS ACCOUNT . THE LD. CIT (A) F URTHER CONFIRMED THE ADDITION OF RS. 3,42,677/- CLAIMED TO BE OUT OF SUN DRY ADVANCES AS THE ASSESSEE HAS FAILED TO FURNISH COPY OF ACCOUNT , CO NFIRMATION , POSTAL ADDRESS AND ASSESSMENT PARTICULARS OF SUCH CREDITOR S. THE LD. CIT (A) HAS ALSO CONFIRMED THE ADDITION OF RS. 1 CLAIMED TO HAVE BEEN RECEIVED AS LOAN FROM VARIOUS FAMILY MEMBERS TO EXP LAIN THE CASH DEPOSIT IN BANK ACCOUNT. HOWEVER, THE ASSESSEE HAS FAILED TO FURNISH THE COMPLETE ADDRESS, IDENTITY OF PERSON AND PAN ET C. THUS, ADDITION OF RS. OF RS. 22,42,677/-WAS CAME TO BE CONFIRMED. 9. BEING, AGGRIEVED THE ASSESSEE FILED THIS APPEAL BEF ORE THE TRIBUNAL. THE LEARNED COUNSEL FOR THE ASSESSEE, S UBMITTED THAT WHILE FRAMING THE ASSESSMENT THE AO MADE ADDITION OF RS. 27,41,000/- ON SHRI GHANSHYAM BAFNA V. ITO- NEEMUCH / I.T.A. NO.38 1&408 /IND/2013/A.Y.:09-10 PAGE 4 OF 7 ACCOUNT OF DEPOSITS IN BANK ACCOUNT AND RS. 19,76,5 31/- ON ACCOUNT OF UNSECURED LOANS. HOWEVER, AFTER CONSIDERING THE EXP LANATION, THE CIT (A) HAS DELETED THE ADDITION OF RS. OF SUNDRY ADVAN CES. HOWEVER, WITH REGARD TO CASH DEPOSIT OF RS. 27,41,000/- , IN THE HDFC BANK ACCOUNT , THE CIT (A) NOTED THAT DEPOSITS OF RS. 50,43,600/- ARE MADE IN VARIOUS BANK ACCOUNTS AND NOT RS. 27,41,000/-HOWEVER, AFTER CONSIDERING THE CASH AVAILABILITY OF RS. 29,57,799/- AND AFTER DEDU CTING THE HOUSE HOLD EXPENSES DELETED THE ADDITION OF RS. OF RS. 28,00 ,923/- AND UPHELD THE ADDITION OF RS. 22,42,677/- BEING ADVANCE RECEI VED. THE LEARNED COUNSEL SUBMITTED THAT THE ASSESSEE HAD TAKEN LAND ON LEASE FROM THE MUNICIPAL CORPORATION IN INDUSTRIAL ESTATE. THIS LA ND WAS SOLD TO SHRI VINOD KUMAR AND SHRI NARENDRA SISODIYA FOR A CONSID ERATION OF RS. 20 LACS AND RECEIVED ADVANCE OF RS. 18 LACS [PB-41]. T HE AFFIDAVITS, AND CONFIRMATION OF PARTIES ARE FILED AT PAPER BOOK PAG E NO 64 TO 68 . THE BANK STATEMENT OF SHRI VINOD KUMAR FILED SHOWING WI THDRAWAL OF CASH OFFER 18 LACS ON 05-05-2008 (PB-61) . THE SAID PART IES ARE IN POSSESSION OF LAND EVEN TODAY. THEREFORE, THE TRANS ACTION SHOULD HAVE BEEN ACCEPTED BY THE LOWER AUTHORITIES. 10. PER CONTRA, THE LEARNED SR. D.R. CONTENDED THAT THE ASSESSEE HAD NO AUTHORITY TO SEL THE LAND IN QUESTION. THE A SSESSEE HAD SHOWN THE ALLEGED AMOUNT OF RS. 18 LACS RECEIVED AS ADVAN CES IN HIS BOOKS OF ACCOUNTS AND BALANCE SHEET AS LOAN. NO SALE DEE DS HAS BEEN EXECUTED TILL DATE . NO PERMISSION OF MUNICIPAL COR PORATION WAS EVER TAKEN FOR SALE OF LAND. THE COPY OF AFFIDAVIT FILED AS PER PAPER BOOK WERE NOT PRODUCED BEFORE CIT(A) AS COULD BE SEEN TH AT THE AFFIDAVIT ARE DTD. 28-08-2013 WHEREAS ORDER OF CIT(A) WAS PAS SED ON 28-03- 2013. HENCE, THESE COULD NOT BE ADMITTED AS OF NOW . THEREFORE, FINDING OF LD. CIT (A) MAY BE UPHELD. 11. WE HAVE HEARD THE RIVAL SUBMISSIONS OF BOTH THE PAR TIES AND HAVE PERUSED THE MATERIAL AVAILABLE ON RECORD. WE F IND THAT AS PER TERMS AND CONDITIONS OF LEASE RENT AGREEMENT DATED 25-07-1995, THE SHRI GHANSHYAM BAFNA V. ITO- NEEMUCH / I.T.A. NO.38 1&408 /IND/2013/A.Y.:09-10 PAGE 5 OF 7 LAND UNDER CONSIDERATION WAS ONLY GIVEN FOR THE BUS INESS USE OF THE ASSESSEE ONLY. FOR PERIOD FROM 11-07-1995 TO 10-07- 1996 @ RENT OF RS. 7,000/- PER ANNUM. THE ASSESSEE WAS NOT ALLOWED TO SELL THE SAID LAND WITHOUT PERMISSION OF MUNICIPAL CORPORATION NE EMUCH. THE LEASE RENT AGREEMENT WAS EXPIRED ON 10-07-1996. THE ASSES SEE HAS NOT FILED ANY EVIDENCE TO SHOW THAT THE SAID LEASE RENT AGREEMENT WAS RENEWED THEREAFTER. NO EVIDENCE OF ANY KIND OF PER MISSION TAKEN FOR TRANSFER OF SAID LAND FROM MUNICIPAL CORPORATION IS ADDUCED. THEREFORE, WE ARE OF THE VIEW THAT THE ASSESSEE WAS NOT A LEGA L OWNER OF SAID LAND TO EITHER TO SALE , TRANSFER OR IN ANY WAY PAR T WITH POSSESSION. THE ASSESSEE HAS NOT FILED ANY EVIDENCE TO ESTABLISH TH AT HE WAS LEGALLY ENTITLED TO EFFECT SUCH TRANSFER WITHOUT PERMISSION AND VALID RENEWAL OF LEASE. WE ALSO FIND THAT ALLEGED AMOUNT OF RS. RS. 18 LACS IS CLAIMED TO HAVE BEEN RECEIVED FROM SHRI VINOD KUMAR AND SHR I NARENDRA SISODIYA IS SHOWN BY THE ASSESSEE HIMSELF AS LOAN I N HIS BOOKS OF ACCOUNTS AND BALANCE SHEET (PB-14). IF THERE HAD BE EN ANY TRUTH IN THE CONCOCTED STORY OF THE ASSESSEE , THE SAID AMOUNT COULD HAVE BEEN SHOWN AS ADVANCE AGAINST PROPOSED SALE OF LAND. MOR EOVER, WE FURTHER FIND THAT THE SO CALLED AFFIDAVITS OF SHRI VINOD KUMAR DTD. 28- 08-2013(PB-64-65) AND SHRI NARENDRA SISODIYA DTD. 2 8-08- 2013(PB68-69) WERE EVER FILED BEFORE THE ASSESSING OFFICER OR COMMISSIONER OF INCOME-TAX (APPEALS). WE FIND THAT THE APPEAL ORDER WAS PASSED ON 28-03-2013 WHEREAS THE AFFIDAVITS ARE DATED 28-008- 2013. MEANING THEREBY THE THESE EVIDENCES WERE NO B EFORE THE CIT(A).THEREFORE, THE VERIFICATION MADE BY THE ASSE SSEE THAT THESE PAPERS /DOCUMENTS WERE FILED BEFORE THE LOWER AUTHO RITIES IS NOT CORRECT AND MISLEADING. FURTHER, THERE IS NO APPLIC ATION FOR ADMITTING THESE AS ADDITIONAL EVIDENCE BEFORE US FILED. THERE FORE, THESE EVIDENCE ARE WITHOUT ANY BASIS AND HENCE, REJECTED. WE ALSO PERUSED THE COPY OF BANK STATEMENT OF SHRI VINOD KUMAR AND SHRI NARE NDRA SISODIYA AND FIND THAT THESE PERSON HAVE SUFFICIENT BANK B ALANCES IN THEIR BANK SHRI GHANSHYAM BAFNA V. ITO- NEEMUCH / I.T.A. NO.38 1&408 /IND/2013/A.Y.:09-10 PAGE 6 OF 7 ACCOUNT. THEY WERE ALSO EFFECTING TRANSACTION BY CH EQUE, THEREFORE, IT IS NOT UNDER STOOD AS TO HOW THE AMOUNT CLAIMED TO HAVE GIVEN TO THE ASSESSEE IN CASH INSTEAD BY CHEQUE. THE LEARNED CO UNSEL FOR THE ASSESSEE, HAS CLAIMED THAT SHRI VINOD KUMAR HAD WIT HDRAWN CASH OF RS. 18 LACS ON 05-05-2008, AND OUT OF SAID WITHDRAW AL THE AMOUNT OF RS. 14,40,000/- WAS GIVEN TO THE ASSESSEE ON VARIOU S DATES. WE ARE NOT PERSUADED WITH THIS LOGIC. WE FIND THAT CASH OF RS. 18 LACS WAS WITHDRAWN ON 05-05-2008 WHEREAS THE AMOUNT IN CASH IS RECEIVED BY THE ASSESSEE ON 05-05-2008 RS. 6,40,000/-, RS. 4 LA CS ON 04-08-2008, RS. 2.40 LACS ON 27-08-2008 AND RS. 1.60 LACS ON 10 -10-2008. HOW THE CASH OF RS. 18 LACS WITHDRAWN BY SELF WAS KEPT FOR PAYING THE ASSESSEE ON VARIOUS DATES FALLING WITHIN THE PERIOD OF 6 MONTHS. SIMILAR IS THE CASE IN THE CASE OF SHRI NARENDRA SI SODIYA. THAT THE CORRESPONDING DATES OF SO CALLED TRANSACTION IS NOT MATCHING OR TALLYING WITH CORRESPONDING CASH WITHDRAWAL. THEREFORE, WE OF THE CONSIDERED OPINION THAT THIS EXPLANATION PUT FORWARD BY THE AS SESSEE IS COOKED UP STORY WITH A VIEW TO CREATE TO EXPLAIN THE SOURCE OF UNEXPLAINED CASH DEPOSIT MADE OUT OF UNDISCLOSED SOURCES. HENCE, THI S STORY HAS NO LEGS TO STAND. CONSIDERING THE AFOREMENTIONED FACT S, CIRCUMSTANCES, AND FACTUAL POSITION, WE FIND THE LD. CIT (A) HAS C OMMITTED NO ERROR IN CONFIRMING THE ADDITION OF RS. 22,42,677/- AS UNEXP LAINED CASH CREDIT. HENCE, SAME IS SUSTAINED. THE GROUND NO. 1 OF THE A PPEAL AS TAKEN BY THE ASSESSEE IS THEREFORE, DISMISSED. 12. GROUND NO. 2 RELATES TO CONFIRMING THE ADDITIO N OF RS. OF RS. 39,53,600/- AS CASH DEPOSIT IN HDFC BANK ACCOUN T WHEREAS THE AMOUNT DEPOSIT IN CASH WAS AT RS. 39,33,600/ 13. DURING THE COURSE OF HEARING BEFORE US , THIS GROUN D WAS NOT PRESSED, HENCE, IT IS TREATED AS DISMISSED AS NOT P RESSED. 14. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DISMISSED. 15. THE ORDER PRONOUNCED IN THE OPEN COURT ON 16.5.2017 SHRI GHANSHYAM BAFNA V. ITO- NEEMUCH / I.T.A. NO.38 1&408 /IND/2013/A.Y.:09-10 PAGE 7 OF 7 SD/- SD/- ( C.M. GARG) (O.P. MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 16 TH MAY,2107 OPM