M/s. Shree Bhagwati Infrastructures Ltd., RAJKOT-GUJARAT V. The Assistant Commissioner of Tax, Circle-5``, RAJKOT-GUJARAT

ITA 386/RJT/2012

• Counselvise Citation: [2012] 120 COUNSELVISE.COM (IT) 0169 (ITAT-RAJKOT)
• Duration Of Justice: 3 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-09-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 12-09-2012
• Assessment Year: 2009-2010
• Appeal Filed On: 08-06-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: GAYA PRASAD
• Assessee Lawyers: D R ADHIA ATP
• Keywords: Unexplained expenditure
• Section: 69C; 133A; 69; 148

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBULAL; RAJKOT BENCH, RAJKOT. . .. . . .. . , , , , . .. . . .. . , , , , $ $ $ $ BEFORE SHRI T. K. SHARMA, JM AND SHRI D. K. SRIVASTAV A, AM ITA NO.386/RJT/2012. / ASSESSMENT YEAR 2000-01 M/S SHREE BHAGVATI INFRASTRUCTURES LTD. C/O D R ADHIA, OM SHRI PADMALAYA BESIDE TRIKAMRAIJI HAVELI, 16, JAGNATH PLOT IMPERIAL PALACE, DR.YAGNIK ROAD, RAJKOT. PAN: NOT ALLOTTED ( * / APPELLANT) VS. ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-5, RAJKOT-360001. +,* / RESPONDENT -. / ASSESSEE BY SHRI D R ADHIA, ATP . / REVENUE BY SHRI. GAYA PRASAD . / DATE OF HEARING 12.9.2012 . / DATE OF PRONOUNCEMENT 21.09.2012 / / / / ORDER . .. . . . . . , , , , / T. K. SHARMA, J. M. THIS APPEAL BY THE ASSESSEE IS AGAINST THE ORDER DATED 27.3.2012 OF CIT(A)- IV, RAJKOT CONFIRMING ADDITION OF AN AMOUNT OF RS.2,65,668/- M ADE BY THE AO TREATING THE SAME AS UNEXPLAINED EXPENDITURE ON ACCOU NT OF NEGATIVE CASH BALANCE FOR THE ASSESSMENT YEAR 2000-01. ITA NO.386/RJT/2012. 2 2. BRIEFLY STATED FACTS OF THE CASE ARE THAT THE ASSESSE E IS A COMPANY. A SURVEY ACTION U/S 133A OF THE INCOME TAX ACT 1961 WAS CARRIED OUT AT THE BUSINESS PREMISES OF M/S BHAGVA TI BRIGHT BARS LTD. ON 3.3.2000. DURING THE COURSE OF SURVEY, CASH AC COUNT OF THE ASSESSEE-COMPANY WAS FOUND IN THE COMPUTER WHICH S HOWS NEGATIVE BALANCE OF RS.2,65,668/-. ACCORDING TO THE AO, THE NEGATIVE BALANCE IN CASH ACCOUNT IS NOTHING BUT UNEXPLAINED EXPENDITURE U/S 69C OF THE ACT. ON THIS BASIS THE AO RE-OPENED THE ASSE SSMENT U/S 148 OF THE ACT AND ISSUED NOTICE TO THE ASSESSEE CALLING UPON I T TO EXPLAINED AS TO WHY THE AMOUNT OF RS. 2,65,668/- SHOULD NOT BE AD DED TO THE INCOME OF THE ASSESSEE-COMPANY BEING UNEXPLAINED EXPENDITURE BY I NVOKING THE PROVISIONS OF SECTION 69C OF THE ACT. IN REPLY, THE ASSE SSEE FILED RETURN OF INCOME DECLARING A LOSS OF RS.4,000/-. IN RESPONSE TO TH E SUBSEQUENT NOTICE ISSUED BY THE AO, ONE OF THE SHAREHOLDER ATTEN DED THE AND SUBMITTED THAT THE ASSESSEE-COMPANY HAS ALREADY CLOSED ITS BUSINESS ACTIVITIES SINCE LONG AND THERE IS NO BUSINESS ACTIVITIES . WITH REGARD TO THE NEGATIVE CASH BALANCE OF RS.2,65,668/-, THE SHAREHOL DER- REPRESENTATIVE HAS SHOWN HIS INABILITY TO EXPLAIN THE SAME. SINCE THE ASSESSEE-COMPANY FAILED TO EXPLAIN THE NEGATIVE CASH BALA NCE, THE AO BY INVOKING THE PROVISIONS OF SECTION 69C TAXED THE SAM E BEING UNEXPLAINED EXPENDITURE AND ADDED IT TO THE TOTAL I NCOME OF THE ASSESSEE. 3. ON APPEAL, BEFORE THE LD. CIT(A), THE ASSESSEE RELI ED ON THE DECISION OF THE RAJKOT BENCH OF THE TRIBUNAL IN THE CASE OF SHRI VALJIBHAI B KHUNT V/S ACIT IN ITA NO.1010/RJT/2009 (AY-2006-0 7) DATED 22.1.2010 AND CONTENDED THAT THE NEGATIVE BALANCE CANNOT BE ADDED U/S 69C OF THE ACT. IN THE IMPUGNED ORDER, THE LD. CIT(A) HELD THAT THE DECISION ITA NO.386/RJT/2012. 3 RELIED UPON BY THE ASSESSEE OF THE RAJKOT BENCH IN THE C ASE OF SHRI VALJIBHAI B KHUNT (SUPRA) IS NOT APPLICABLE ON THE GRO UND THAT THE CASE OF ASSESSEE IS NOT A CASE WHERE THE PHYSICAL CASH FOUND AT THE T IME OF SURVEY WAS LESS THAN THE CASH BALANCE APPEARING IN ITS BOO KS OF ACCOUNT. HE ELABORATELY DISCUSSED THE FACTS AND CONSIDERED EACH AND EVERY CONTENTION OF THE ASSESSEE AND UPHELD THE ACTION OF THE A O IN MAKING THE ADDITION OF RS.2,65,668/- U/S 69C OF THE ACT TO THE T OTAL INCOME OF THE ASSESSEE. AGGRIEVED BY THE ORDER OF THE LD.CIT(A), THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 4. AT THE TIME OF HEARING, BEFORE US, SHRI D.R.ADH IA, THE LD. AR FOR THE ASSESSEE APPEARED AND PRODUCED THE DECISION OF THE RAJKOT BENCH OF THE TRIBUNAL IN THE CASE OF SHRI VALJIBHAI B KHU NT (SUPRA) AND CONTENDED THAT DEPOSIT IN CASH FOUND DURING THE COURSE O F SEARCH CANNOT BE ADDED U/S 69C OF THE ACT. AS AGAINST THIS, SHRI G AYA PRASAD, LD.DR APPEARED FOR THE REVENUE AND CONTENDED THAT THE SAI D DECISION IS NOT APPLICABLE TO THE FACTS OF THE PRESENT CASE, THE LD. DR EXPLAINED THAT IN THAT CASE, THE CASH WAS FOUND AT RS.1,52,200/- WHEREAS AS PER TH E BOOKS OF ACCOUNT OF THE ASSESSEE INCLUDING VARIOUS FAMILY MEMBERS W ERE RS.2,69,430/-. THUS, THERE WAS A DEFICIT OF RS.1,17, 230/-, DEFINITELY THAT CANNOT BE ADDED TO THE INCOME OF THE ASSESSEE U/S 69C. IN THE CASE OF THE PRESENT ASSESSEE, THE CASH BOOKS HAS BEEN FOUND WHICH SHO WS THAT THE ASSESSEE INCURRED VARIOUS EXPENSES WITHOUT OF AVAILA BILITY OF CASH. UNDER THESE CIRCUMSTANCES, THE ADDITION OF RS.2,65,668/- U/S 69C HAS RIGHTLY BEEN MADE BY THE AO AND CONFIRMED BY THE L D. CIT(A). ITA NO.386/RJT/2012. 4 5. HAVING HEARD BOTH THE SIDES, WE HAVE CAREFULLY GON E THROUGH THE ORDERS OF THE AUTHORITIES BELOW. IN OUR CONSIDERED O PINION, THE DECISION OF THE TRIBUNAL IN THE CASE OF SHRI VALJIBHAI B KHUN T (SUPRA) AS RELIED BY THE ASSESSEE BEFORE THE LD. CIT(A) AND EVEN BEFORE US I S NOT APPLICABLE TO THE FACTS OF THE PRESENT CASE. ADMITTEDLY, IN THE P RESENT CASE NO CASH DEPOSIT HAS BEEN FOUND. THERE WAS UNEXPLAINED EXPENDI TURE, WHICH IS EVIDENT FROM THE RECORD AND THE FACTS NARRATED BY THE LD.CIT(A) IN HIS IMPUGNED ORDER AND THE SAME ARE NOT DISPUTED BY THE LD.AR OF THE ASSESSEE. THESE FACTS CLEARLY SHOWS THAT THERE IS UNEXPLAINED EXPENDITURE OR INVESTMENT TO THE TUNE OF RS.3,00,000/ - BETWEEN 1.4.1999 TO 21.8.1999 BY SHOWING NEGATIVE BALANCE OF RS,2,47,9 47/- ON 27.8.1999 IN ITS CASH BOOKS. THESE FACTS HAVE DULY BEEN HIGHLIGH TED BY THE LD. CIT(A) IN THE IMPUGNED ORDER. CONSIDERING THE TOTAL ITY OF THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) IS LEGALLY AND FACTUALLY CORRECT IN CONFIRMING THE ADDITION OF RS.2,65,668/- MADE BY TH E AO U/S 69 OF THE ACT. WE ARE INCLINED TO UPHOLD THE FINDINGS OF THE LD . CIT(A) AND ACCORDINGLY CONFIRM HIS ORDER. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DISMISSE D. THIS ORDER IS PRONOUNCED IN THE OPEN COURT ON THE DAT E MENTIONED HEREINABOVE. SD SD ( .. / D. K. SRIVASTAVA) ( .. / T. K. SHARMA) / ACCOUNTANT MEMBER /JUDICIAL MEMBER 3/ ORDER DATE 21-09-2012. /RAJKOT ITA NO.386/RJT/2012. 5 SRL . .. . +4 +4 +4 [phone] / COPY OF ORDER FORWARDED TO:- 1. * / APPELLANT-, 2. +,* / RESPONDENT- 3. : / CONCERNED CIT. 4. :- / CIT (A). 5. 4 +, , / DR, ITAT, RAJKOT 6. / GUARD FILE. / BY ORDER , TRUE COPY SENIOR PRIVATE SECRETARY , INCOME TAX APPELLATE TRIBUNAL, RAJKOT.