Shri Anish V. Shah, Surendranagar V. The Income Tax Officer, Ward-2, Surendranagar

ITA 41/RJT/2013

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 4549 (ITAT-RAJKOT)
• Duration Of Justice: 7 year(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-02-2020
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 16-01-2020
• Assessment Year: 2008-2009
• Appeal Filed On: 15-02-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: DEEPAK RINDANI
• Keywords: Unexplained cash credit; Initiation of penalty proceedings; Corroborative evidences
• Section: 271(1)(c); 143(3); 133(6); 250; 143(2); 13; 22; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH , RAJKOT BEFORE: SHRI MAHAVIR PRASAD , JUDICIAL MEMBER AND S H RI AMARJIT SINGH , ACCOUNTANT MEMBER [CONDUCTED THROUGH E - COURT AT AHMEDABAD] SHRI ANISH V. SHAH, B - 19, 5 TH FLOOR, PRATIK TOWER NR. VANDANA TOWER N R. VANDANA HOTEL JI NTAN ROAD, SURENDRANAGAR PAN: AWWPS3129G (APPEL LANT) VS THE ITO, WARD - 2, SURENDRANAGAR (RESPONDENT) REVENUE BY : S H RI ANIL KUMAR DAS , SR. D . R. ASSESSEE BY: S H RI DEEPAK RINDANI , A.R. DATE OF HEARING : 20 - 0 1 - 2 020 DATE OF PRONOUNCEMENT : 17 - 02 - 2 020 / ORDER P ER : AMARJIT SINGH, ACCOUNTANT MEMBER : - THI S ASSESSEE S APPEAL FOR A.Y. 2008 - 09 , AR ISES FROM ORDER OF THE CIT(A) - XVI, AHMEDABAD DATED 06 - 12 - 2012 , I N PROCEEDINGS UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT . 2. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL: - 1. THE LEARNED CIT(A) ERRED IN LAW AND IN FACT IN CONFIRMING ADDITION OF RS. 26,12,900 MADE BY ASSESSING OFFICER AND DISMISSING GROU NDS OF APPEAL OF THE ASSESSEE. I T A NO . 41 / RJT /20 13 A SSESSMENT YEAR 200 8 - 09 I.T. A NO. 41 /RJT /20 13 A.Y. 2008 - 09 PAGE NO SHRI ANISH V. SHAH VS. ITO 2 2. THE LEARNED CIT(A) ERRED IN LAW AND IN FACT ON DISMISSING THE APPEAL REGARDING CHARGING OF INTEREST U/S 234B, 234C AND 234D OF THE INCOME TAX ACT. 3. THE LEARNED CIT(A) ERRED IN LAW AND IN FACT ON DISMISSING APPEAL THAT PENALTY PROVISION OF SECTION 271(1)(C) SHOULD NOT BE INITIATED IN THE GIVE N CIRCUMSTANCES. 4. THE LEARNED CIT(A) ERRED IN LAW AND IN FACT FOR NOT CONSIDERING PROPERLY, THE DOCUMENTS AND EXPLANATIONS PUT ON RECORD BY THE ASSESSEE. 5. THE LEARNED CIT(A) ERRED IN LAW AND IN FACT ON FRAMING ORDER BY RELYING UPON FRESH DOCUMENTS/IN QUIRIES MADE BY HIMSELF AND ALSO BY ASSESSING OFFICER WITH REFERENCE TO REMAND REPORT CALLED FOR BY CIT( A). 6. THE LEARNED CIT(A) ERRED IN LAW AND IN FACT IN TAKING NEW BASE THAT, SALE/PURCHASE OF SHARES WHERE AFTERTHOUGHT, TO JUSTIFY CASH DEPOSIT OF RS.26 ,12,900/ - FOR DISMISSING APPEAL. 7. THE LEARNED CIT(A) ERRED IN LAW AND IN FACT IN NOT ACCEPTING THE REAL STATUS OF T.H.VAKIL AS ABSCONDING, BANKRUPTCY AND 'STRIKING OFF' OF COMPANY. 3. GROUND NOS. 1,4,5,6, AND 7 ARE PERTAINED TO THE ISSUE OF CONFIRMING ADDITION OF RS. 26,12,900/ - FOR CASH DEPOSIT THEREFORE ALL THESE GROUNDS OF APPEAL ARE ADJUDICATED TOGETHER FOR THE SAKE OF CONVENIENCE. 4. THE FACT IN BRIEF IS THAT ASSESSEE HAS FILED RETURN OF INCOME DECLARING INCOME OF AT RS. 54 , 030 ON 22 ND JAN, 200 9. THE CASE WAS SUBJECT TO SCRUTINY AND NOTICE U/S. 143(2) OF THE ACT WAS ISSUED ON 7 TH SEP, 2009. DURING THE COURSE OF ASSESSMENT ON VERIFICATION OF THE CASH BOOK , THE ASSESSING OFFICER NOTICED CREDIT CASH RECEIPT IN THE BOOKS OF ACCOUNT OF THE ASSESSE E ON DIF FERENT DATES TO THE AMOUNT FOR RS . 26 , 12 , 900/ - AS UNDER: - DATE AMOUNT DATE AMOUNT 22 - 6 - 2007 800000 26 - 9 - 2007 150000 26 - 11 - 2007 300000 4 - 12 - 2007 515000 15 - 12 - 2007 300000 21 - 12 - 2007 200000 10 - 1 - 2008 110000 19 - 1 - 2008 200000 21 - 1 - 2008 37900 TOTAL 26,12,900 I.T. A NO. 41 /RJT /20 13 A.Y. 2008 - 09 PAGE NO SHRI ANISH V. SHAH VS. ITO 3 ON QUERY MADE BY THE ASSESSING OFFICER, THE ASSESSEE HAS EXPLAINED THAT THE ABOVE CITED CASH RECEIPT WAS RECEIVED AS SALE CONSIDERATION OF SALE OF SHARES OF SURYADEEP SALT PVT. LTD. FROM SHREE T.H. VAKIL SHARES AND SECURITIES PVT. LTD. THE ASSESSEE WAS ASKED TO FURNISH COPY OF CONTRA ACCOUNT FROM BOOKS OF SHREE T.H. VAKIL S HARES AND SECURITIES PVT. LTD. T HE ASSESSEE HAS FURNISHED UNSIGNED CONTRA ACCOUNT AND CLAIM ED THAT THESE CONTRA ACCOUNTS WERE OBTAINED FROM T HE BOOKS OF THE ABOVE PARTY. THE ASSESSING OFFICER HAS NOT SATISFIED WITH THE SUBMIS SION OF THE ASSESSEE THAT THE PRIVATE COMPANY HAS MADE PAYMENT IN CASH OF RS. 26,12,900/ - FOR PURCHASE OF SHARES . T HEREFORE A NOTICE U/S. 133(6) OF THE ACT WAS ISSUED TO SHREE T.H. VAKIL SHARES AND SECURITIES PVT. LTD. AS PER ADDRESS REFLECTED ON THE COPY OF BILL FURNISHED BY THE ASSESSSEE . H OWEVER , THE NOTICE U/S. 133(6) OF THE ACT WAS RETURN UN - SERVED WITH THE REMARK THAT CLOSED . IT CLEARLY ESTABLISHED THAT THE PA RTY WAS NOT EXISTED AT THE ADDRESS SHOWN IN THE COPY OF BILL. EVEN WITHOUT SERVING ANY NOTICE U/S. 133(6) , THE ASSESSING OFFICER HAS RECEIVED COPY OF ACCOUNT OF THE ASS ESSEE FROM THE BOOKS OF ACCOUNT OF T.H. VAKIL SHARES AND SECURITIES PVT. LTD. THROUGH ANGADI A WITHOUT ANY FORWARDING LETTER WHICH MIGHT HAVE BEEN FORWARD ED BY THE ASSESSEE . THEREFORE , A SHOW CAUSE NOTICE WAS ISSUED TO THE ASSESSEE TO EXPLAIN WH Y NOT CASH CREDIT AMOUNTING TO R S. 26 , 12 , 900/ - BE TREATED AS UNEXPLAINED U/S. 68 OF THE ACT AS THE GENUINENESS OF THE SAME WAS NOT PROVED. THE ASSESSEE EX PLA I NE D THAT COPY OF SALE BILL OF SHREE T.H. VAKIL SHARES AND SECURITIES PVT. LTD. WAS FILED ALONG WITH COPY OF RECEIPT OF PHYSICAL DELIVERY OF SHARES ISSUED BY THE PARTY. THE ASSESSEE HAS AL SO SUBMITTED C OPY OF BANK STATEMENT SHOWING CASH DEPOSITED AND SUBMITTED THAT THE SHREE T.H. VAKIL SHARES AND SECURITIES PVT. LTD. WAS ON THE VERGE OF INSOLVENCY, THEREFORE, HE HAD RECEIVED CASH FROM I.T. A NO. 41 /RJT /20 13 A.Y. 2008 - 09 PAGE NO SHRI ANISH V. SHAH VS. ITO 4 THE SAID PARTY ON THE SALE OF SHARES. THE ASSESSEE HAS ALSO SUBMITTED THAT SAID PARTY WAS NOT TRACEABLE AND THEREFORE SUGGESTED THAT TH E NOTICE U/S. 133(6) MIGHT HAVE RETURNED UN - SERVED. THE ASSESSING OFFICER HAS NOT ACCEPTED THE REPLY OF TH E ASSESSEE STATING THAT IT WAS NOT PR OVED THAT PAYMENT AMOUNTING TO R S. 26,12,900/ - WAS RECEIVED I N CASH BY THE ASSESSEE FROM SHREE T.H. VAKIL SHARES AND SECURITIES PVT. LTD. IN THE ABSENCE OF EVIDENCE, THE TRANSACTION RECORDED WAS NOT ESTABLISHED TO BE GENUINE, THEREFORE , CASH CREDIT OF R S. 2 6 , 12 , 900/ - WAS TREATED AS UNEXPLAINED CASH CREDIT U/S. 68 OF THE ACT AND ADDED TO THE TOTAL INCOME OF THE ASSESSEE. 5. AGGRIEVED ASSESSEE HAS FILED APPEAL BEFORE THE LD. CIT(A). THE LD. CIT(A) HAS DISMISSED THE APPEAL OF THE ASSESSEE 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND P ERUSED THE MATERIAL ON RECORD. WE DO NOT FIND ANY INFIRMITY IN THE OBSERVATION OF THE LD. CIT(A) THAT SUB - SECTION 4 OF SECTION 250 EMPOWERS A COMMISSIONER OF APPEAL TO WHILE DISPOSING ANY APPEAL EITHER HIMSELF MAKE SUCH FURTHER INQUIRY AS HE THINKS FIT O R MAY DIRECT THE ASSESSING OFFICER TO CONDUCT THE INQUIRES AND REPORT RESULT THEREOF. DURING THE COURSE OF ASSESSMENT PROCEED INGS ON EXAMINATION OF BOOKS OF ACCOUNT S, THE ASSESSING OFFICER NOTICED THAT ASSESSEE HAD CREDITED CASH RECEIPT AMOUNTING TO RS. 26 , 12 ,900/ - . THE ASSESSEE HAS FURNISHED UNSIGNED CONTRA ACCOUNT FROM THE BOOKS OF THE SHREE T.H. VAKIL SHARES AND SECURITIES PVT. LTD . THE ASSESSING OFFICER HAS ISSUED NOTICE U/S. 133(6) OF THE ACT TO THE SHREE T.H. VAKIL SHARES AND SECURITIES PVT. LTD. AND THE NOTICE WAS RETURNED UN - SERVE D. THE LD. CIT(A) HAS NOTICED FROM THE DOCUMENT FURNISHED BY THE ASESSEE PLACED AT PAGE NO. 13 TO 14 OF THE ORDER I.T. A NO. 41 /RJT /20 13 A.Y. 2008 - 09 PAGE NO SHRI ANISH V. SHAH VS. ITO 5 OF CIT(A) THAT THE SALE PURCHASE OF SHARE S ON BEHALF OF THE ASSESSEE WAS CONDUCT ED BY THE SHREE T.H. VAK IL SHARES AND SECURITIES PVT. LTD. ON THE FLOOR OF EXCHANGE (MUMBAI STOCK EXCHANGE). IN THE REMAND REPORT, I T WAS REPORTED THAT MUMBAI STOCK EXCHANGE HAD INFORMED THE ASSESSING OFFIC ER THAT THE TERMINAL OF M/S SHREE T.H. VAKIL SHARES AND SECURITIES PVT. LTD. WAS DE - ACTIVATED W.E.F. JULY 23, 2003 . IT IS ALSO REPORTED IN THE F INDING OF LD. CIT(A) THAT THE MU MB AI STOCK EXCHANGE HAS CERTIFIED THAT THE TRANS ACTION CONTA INED IN CONTRACT NOTES ISSUED BY SHREE T.H. VAKIL SHARES AND SECURITIES PVT. LTD. WERE NOT TAKEN PLACE IN THE FLOOR OF THE HOUSE. EVEN THE ASSESSEE HAS FAILED TO ESTABLISH WITH RELEVANT SUPPORTING EVIDENCES THAT SALE TRANSACTIONS OF SHARES W E RE CONDU C TED IN THE OFF MARKET. IN O RDER TO PROVE THE GENUINENESS OF THE CLAIM OF THE ASSESSEE T HA T IMPUGNED CASH OF RS. 26 , 12 , 900/ - WAS PROVIDED BY M/S. T.H. VAIL SHARES AND SECURITIES PVT. LTD. , THE ASSESSING OFFICER HAS CARRIED O UT NECESSARY INVESTIGATION BY ISSUIN G OF NOTICE U/S. 133(6) OF THE A CT TO T HE SAID PARTY, HOWEVER, THE NOTICE WAS RETURNED UN - SERVED A ND THE PARTY WAS FOUND NOT TO BE EXISTED AT THE GIVEN ADDRESS . EVEN THE ASSESSEE HAS FAILED TO PRODUCE THE SAID PARTY DURING THE ASSESSMENT PROCEEDINGS AS WELL AS APPELLATE PROCEEDINGS TO PROVE TH E GENUINENESS OF THE CASH TRANSACTIONS . IN THE LIGHT OF THE ABOVE FACTS AND CIRCUMSTANCES , WE OBSERVE THAT ASSESSEE HAS FAILED TO ESTABLISH THE GENUINE NESS OF CASH CREDIT IN HIS BOOK OF ACCOUNTS AS STIPULATED IN SECTION 68 OF THE A CT. CONSIDERING THE ABOVE FACTS AND FINDINGS , WE DO NOT FIND ANY REASO N TO INTERFERE IN THE DECISION OF LD. CIT(A). THEREFORE, GROUNDS OF APPEAL NOS. 1, 4, 5, 6 & 7 ARE DISMISSED. I.T. A NO. 41 /RJT /20 13 A.Y. 2008 - 09 PAGE NO SHRI ANISH V. SHAH VS. ITO 6 7. GROUND NO. 2 PERTAINING U/S. 23 4 B, 234C & 234D IS NOT REQUIRED ANY ADJUDICATION AS THE INTEREST IS TO BE CHARGED UNDER THESE SECTIONS MANDA TORY AS PER PROVISION OF LAW. 8. GROUND NO. 3 OF THE ASSESSEE IS AGAINST INITIATION OF PENALTY PROCEEDINGS U/S. 271(1)(C) IS IMMATURE AT THIS STAGE, THEREFORE, THE SAME IS NOT REQUIRED ANY ADJUDICATION AND THE SAME IS DISMISSED. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DISMISSED. ORDER PR ONOUNCED IN THE OPEN C OUR T ON 17 - 02 - 20 20 SD/ - SD/ - (MAHAVIR PRASAD ) ( AMARJIT SINGH ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD : DATED 1 7 /02 /2020 / COPY OF ORDER FORWARDED TO: - 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER, ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, RAJKOT