Jayesh Kanjibhai Patel(HUF), Surat V. The Income tax Officer,Ward-2(3), Surat

ITA 425/AHD/2008

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 6688 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 2 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-04-2011
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 28-04-2011
• Assessment Year: 1999-2000
• Appeal Filed On: 06-02-2008
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: H P MEENA
• Keywords: Unexplained cash credit
• Section: 131; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH AHMEDABAD (BEFORE S/SHRI G. D. AGARWAL, VP AND BHAVNESH SAINI , JM) ITA NO.425/AHD/2006 A. Y.: 1999-2000 SHRI JAYESH KANJIBHA PATEL (HUF), 107, INDRAPRASTH BUNGALOWS, BEHIND NITI- NAGAR, UDHNA MAGDALLA ROAD, SURAT VS THE INCOME TAX OFFICER, WARD 2 (3), SURAT PA NO. - (APPELLANT) (RESPONDENT) APPELLANT BY NONE (WRITTEN SUBMISSION) RESPONDENT BY SHRI H. P. MEENA, SR. DR O R D E R PER BHAVNESH SAINI: THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LEARNED CIT(A)-II , SURAT DATED 27 TH NOVEMBER, 2007 FOR ASSESSMENT YEAR 1999-2000 CHALLE NGING THE ADDITION OF RS.8,94,789/- 2. NONE APPEARED ON BEHALF OF THE ASSESSEE DESPITE SERVICE OF NOTICE. WRITTEN SUBMISSION IS FORWARDED WHICH IS TA KEN INTO CONSIDERATION. WE HAVE HEARD THE LEARNED DR AND PER USED THE FINDINGS OF THE AUTHORITIES BELOW. 3. BRIEFLY, THE FACTS OF THE CASE LEADING TO THE AD DITION ARE THAT SURVEY U/S 133 A OF THE IT ACT WAS CONDUCTED AT THE PREMISES OF SHRI PANKAJ DANAWALA, CHARTERED ACCOUNTANT AND IT WAS FO UND THAT BOGUS ITA NO.425/AHD/2008 SHRI JAYESH KANJIBHAI PATEL (HUF) VS ITO, WARD 2(3) , SURAT 2 CAPITAL IN THE NAME OF SEVERAL PERSONS HAVE BEEN SH OWN. SUCH CAPITAL WAS THEN SHOWN TO HAVE BEEN GIVEN AS LOAN T O DIFFERENT FICTITIOUS AND INTERESTED PERSONS. THE DOCUMENT IMP OUNDED INCLUDES DOCUMENT PERTAINING TO THE ASSESSEE WHICH WAS MARKE D AS ANNEXURE A/517. THE DOCUMENT SHOWS THAT THE ASSESSEE HAD FIL ED HIS RETURN OF INCOME FOR THE ASSESSMENT YEAR UNDER APPEAL ON 28-0 3-2001 DECLARING TOTAL INCOME AT RS.49,850/-. CAPITAL ACCO UNTS OF THE ASSESSEE FOR THE YEARS PERTAINING TO 1990-91 TO 199 8-99 WERE ALSO FOUND AS IMPOUNDED. THE CAPITAL ACCOUNT FOR THE YEA R UNDER CONSIDERATION SHOWED OPENING CAPITAL BALANCE OF RS. 8,68,939/- AND CLOSING BALANCE AT RS.8,94,789/-. RE-ASSESSMENT PRO CEEDINGS WERE INITIATED AND THE ASSESSEE SUBMITTED THAT SINCE NO INCOME IS EARNED, THEREFORE, THERE IS NO QUESTION OF RE-OPENING OF TH E ASSESSMENT. HOWEVER, THE ASSESSEE FAILED TO EXPLAIN THE OPENING CAPITAL BALANCE. THE AO NOTED THAT THE ASSESSEE FAILED TO EXPLAIN TH E SOURCE OF THE OPENING CAPITAL WHICH WAS SEEN FROM THE BALANCE SHE ET FILED WITH THE RETURN OF INCOME AND THAT THE ASSESSEE HAD GIVEN LO ANS AND ADVANCES OUT OF THE SAME TO SOME OTHER PARTIES. THE AO EXAMINED THE ASSESSEE ON OATH U/S 131 OF THE IT ACT AND THE ASSESSEE DENIED TO HAVE FILED ANY RETURN OF INCOME FOR THE ASSESSME NT YEAR UNDER CONSIDERATION. HE HAS ALSO DENIED TO HAVE EARNED AN Y INCOME. THE EXPLANATION OF THE ASSESSEE WAS REJECTED AND ADDITI ON WAS MADE FOR UNEXPLAINED CREDIT U/S 68 OF THE IT ACT. SAME SUBMI SSIONS WERE REITERATED AND IT WAS SUBMITTED THAT NO CORROBORATI VE EVIDENCE WAS FOUND REGARDING THE DETAILS SHOWN IN THE BALANCE SH EET OF THE ASSESSEE. IT WAS ALSO EXPLAINED THAT NO BANK ACCOUN T WAS FOUND TO HAVE DEPOSITED THE SAID CAPITAL. IN THE ALTERNATE C ONTENTION, IT WAS ITA NO.425/AHD/2008 SHRI JAYESH KANJIBHAI PATEL (HUF) VS ITO, WARD 2(3) , SURAT 3 SUBMITTED THAT THE OPENING CAPITAL BALANCE OF THE E ARLIER YEARS MAY NOT BE ADDED IN THE ASSESSMENT YEAR UNDER APPEAL. T HE LEARNED CIT(A) CONSIDERING THE MATERIAL AND SUBMISSION OF T HE ASSESSEE NOTED THAT THE ASSESSEE FILED A RETURN OF INCOME FO R THE ASSESSMENT YEAR UNDER APPEAL DECLARING INCOME AT RS.49,850/- A ND THIS FACT IS CONFIRMED ON OATH BEFORE THE AO. THE LEARNED CIT(A) ALSO NOTED THAT THE RETURN OF INCOME IS SIGNED BY THE ASSESSEE HIM SELF WHICH WAS ALSO ADMITTED IN HIS STATEMENT MADE BEFORE THE AO. THE CAPITAL ACCOUNT HAD ADMITTEDLY BEEN FILED ALONG WITH THE RE TURN OF INCOME FILED BY THE ASSESSEE WHICH WAS ALSO IMPOUNDED DOCU MENT SHOWING OPENING CAPITAL BALANCE OF RS.8,68,939/-. THE LEARN ED CIT(A), THEREFORE, NOTED THAT DENIAL OF THE ASSESSEE FOR NO T EARNING INCOME OR NOT FILING OF RETURN OF INCOME IS LIABLE TO BE REJE CTED AND THE ASSESSEE CANNOT ABSOLVE FROM HIS RESPONSIBILITY. THE LEARNED CIT(A) HELD THAT ONCE VALID RETURN OF INCOME IS FILED ALONG WITH THE DOCUMENTS WHICH HAVE BEEN ADMITTED ALSO, THEN ONUS IS UPON THE ASSE SSEE TO SHOW AND EXPLAIN THE SOURCES OF CAPITAL BALANCE. THE LEA RNED CIT(A) REJECTED THE CONTENTION OF THE ASSESSEE. HE HAS ALS O REJECTED THE CONTENTION OF THE ASSESSEE THAT EARLIER YEAR OPENIN G BALANCE CANNOT BE ADDED BECAUSE THE OPENING CAPITAL BALANCE HAD BE EN BUILT UP THROUGH THE BALANCE SHEET FILED WITH THE RETURN OF INCOME. SINCE THE CLAIM IS MADE FOR THE FIRST TIME IN THE ASSESSMENT YEAR UNDER APPEAL, THEREFORE, ADDITION SHALL HAVE TO BE MADE ON ACCOUN T OF UNEXPLAINED CAPITAL. THE APPEAL OF THE ASSESSEE WAS ACCORDINGLY DISMISSED. 4. ON CONSIDERATION OF THE WRITTEN SUBMISSION AND T HE SUBMISSION OF THE LEARNED DR, WE DO NOT FIND ANY MERIT IN THE APPEAL OF THE ITA NO.425/AHD/2008 SHRI JAYESH KANJIBHAI PATEL (HUF) VS ITO, WARD 2(3) , SURAT 4 ASSESSEE. IT IS ADMITTED FACT THAT RETURN OF INCOME IS FILED FOR THE FIRST TIME BY THE ASSESSEE FOR THE ASSESSMENT YEAR UNDER APPEAL UNDER THE SIGNATURE OF THE ASSESSEE. THE CAPITAL ACCOUNT WAS ALSO FILED ALONG WITH RETURN OF INCOME. IN THE CAPITAL ACCOUN T FILED FOR THE FIRST TIME WITH THE REVENUE DEPARTMENT, THE ASSESSEE CLAI MED BENEFIT OF CAPITAL OF RS.8,94,789/-. PRIOR TO THAT NO RETURN O F INCOME IS FILED BY THE ASSESSEE AND NO CAPITAL ACCOUNT OR BALANCE SHEE T WAS EVER FILED WITH THE REVENUE DEPARTMENT. NO SOURCE OF INCOME FO R PRECEDING ASSESSMENT YEAR WAS ALSO FILED. THEREFORE, THE AO W AS JUSTIFIED IN CONSIDERING THE OPENING CAPITAL BALANCE SHOWN IN TH E ASSESSMENT YEAR UNDER APPEAL. SINCE THE GENERATION OF THE CAPI TAL WAS NOT EXPLAINED, THEREFORE, ADDITION HAS BEEN RIGHTLY MAD E AGAINST THE ASSESSEE. THE ASSESSEE AT SOME STAGE DENIED TO HAVE EARNED INCOME OR TO HAVE FILED RETURN OF INCOME BUT THE RE CORD SHOWS SOMETHING ELSE. IF THE ASSESSEE IS IN DOUBT THAT EV ERYTHING IS DONE BY SHRI PANKAJ DANAWALA, CHARTERED ACCOUNTANT, HE SHOU LD HAVE TAKEN ACTION AGAINST HIM. BUT, NOTHING IS BROUGHT ON RECO RD IF ANY ACTION IS TAKEN AGAINST HIM IN THIS REGARD. THE ASSESSEE IN T HE WRITTEN SUBMISSION REFERRED TO ORDER OF ITAT AHMEDABAD BENC H IN THE CASE OF BABUBHAI KANJIBHAI PATEL (HUF) DATED 26-03-2010 (PB-11) IN WHICH DEPARTMENTAL APPEAL HAS BEEN DISMISSED. IN TH IS CASE THE LEARNED CIT(A) DELETED THE ADDITION ON THE GROUND T HAT THE ASSESSEE HAD NOT FILED ANY RETURN OF INCOME FOR THE YEAR UND ER CONSIDERATION AND ENTRIES MADE BY SHRI PANKAJ DANAWALA WAS NOT SU PPORTED BY CORROBORATIVE EVIDENCE AND FURTHER THE PAPERS DID N OT CONTAIN SIGNATURE OF THE ASSESSEE. FURTHER, DECISION OF TH E TRIBUNAL IN THE CASE OF TARAMANI M. GATANI WAS ALSO RELIED UPON (PB -21) IN WHICH ITA NO.425/AHD/2008 SHRI JAYESH KANJIBHAI PATEL (HUF) VS ITO, WARD 2(3) , SURAT 5 REOPENING OF THE ASSESSMENT WAS CANCELED BUT THE AP PEAL WAS NOT DECIDED ON MERIT. THESE DECISIONS WOULD NOT SUPPORT THE CASE OF THE ASSESSEE IN ANY MANNER BECAUSE IN THE PRESENT CASE, IT IS ADMITTED FACT THAT THE ASSESSEE FILED RETURN OF INCOME ALONG WITH CAPITAL ACCOUNT SHOWING SIGNATURE OF THE ASSESSEE IN WHICH THE ASSESSEE CLAIMED OPENING CAPITAL WHICH WAS NOT EXPLAINED AT ALL. IN THIS CASE, THE ASSESSEE MADE CLAIM OF GENERATED CAPITAL IN THE CAPITAL ACCOUNT FOR THE FIRST TIME AND NO EVIDENCE IS FILED EITHER IN THE YEAR UNDER CONSIDERATION FOR ACCUMULATING THE CAPITAL OR ACCUM ULATION OF THE CAPITAL IN THE PRECEDING ASSESSMENT YEARS. THEREFOR E, THE AUTHORITIES BELOW WERE JUSTIFIED IN SCRUTINY THE CLAIM OF THE A SSESSEE IN THE YEAR UNDER CONSIDERATION BECAUSE THE CAPITAL ACCOUNT AND BALANCE SHEET IS FILED ALONG WITH THE RETURN OF INCOME FOR THE FI RST TIME IN THE ASSESSMENT YEAR UNDER APPEAL. IN THE CASE OF VISHWA NATH CLORINATE AND CHEMICALS PVT. LTD. VS ITO 8 ITR (TRIB) 387, IT AT AHMEDABAD A BENCH CONSIDERED THE ISSUE IN WHICH RETURN WAS PROCESSED U/S 143(1) OF THE IT ACT. THE BALANCE SHEET SHOWED INCR EASE IN THE PAID UP SHARE CAPITAL AND RESERVES. ON ENQUIRY, THE LETT ERS SENT TO SUBSTANTIAL SHAREHOLDERS RETURNED UN-SERVED. THE AS SESSEE DID NOT FILE ANY REPLY. THE ASSESSEE DENIED FILING OF RETUR N AND REPUDIATED BALANCE SHEET. IT WAS HELD THAT SUCH A COURSE IS NO T PERMISSIBLE UNDER THE LAW. ADDITION OF CASH CREDIT WAS CONFIRMED BY D ISMISSING THE APPEAL OF THE ASSESSEE. IN THE ABSENCE OF ANY MATER IAL EVIDENCE ON RECORD, THE ASSESSEE CANNOT BE PERMITTED TO DENY TH E FILING OF THE GENUINE RETURN OF INCOME AND THE DOCUMENTS. ONUS WA S UPON THE ASSESSEE TO PROVE ITS CASE AND SUCH ONUS WAS NOT DI SCHARGED. THE AUTHORITIES BELOW HAD RIGHTLY CONSIDERED THE ADDITI ON AGAINST THE ITA NO.425/AHD/2008 SHRI JAYESH KANJIBHAI PATEL (HUF) VS ITO, WARD 2(3) , SURAT 6 ASSESSEE. CONSIDERING THE FACTS AND CIRCUMSTANCES N OTED ABOVE, WE ARE OF THE VIEW THERE IS NO INFIRMITY IN THE ORDER OF THE LEARNED CIT(A) IN CONFIRMING THE ADDITION. WE ACCORDINGLY, DISMISS THE APPEAL OF THE ASSESSEE. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DIS MISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 29-04-2011 SD/- SD/- (G. D. AGARWAL) VICE PRESIDENT (BHAVNESH SAINI) JUDICIAL MEMBER DATE : 29-04-2011 LAKSHMIKANT/ LAKSHMIKANT/ LAKSHMIKANT/ LAKSHMIKANT/- -- - COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE BY ORDER DY. REGISTRAR, ITAT, AHMEDABAD