NIMESH R. MEHTA, MUMBAI V. ITO 32(2)(4), MUMBAI

ITA 5397/MUM/2016

• Counselvise Citation: [2018] 118 COUNSELVISE.COM (IT) 8077 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 3 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-12-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2005-2006
• Appeal Filed On: 01-09-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: S K MISHRA
• Keywords: Rejection of books of accounts; Source of fund; Deemed to accrue or arise in india; Corroborative evidences; Non compliance; Reassessment proceedings
• Section: 69C; 142(1); 147; 148

Judgement Text

NIMESH R. MEHTA., MUMBAI ITA NO. 5397/MUM/2016 1 IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH B, MUMBAI BEFORE SHRI JOGINDER SINGH, VICE-PRESIDENT AND SHRI M. BALAGANESH, ACCOUNTANT MEMBER ITA NO. : 5397/MUM/2016 (ASSESSMENT YEAR: 2005-06) NIMESH R. MEHTA, RAJKUMAR JAJU, E/302 ASHOK NAGAR OLD, VAZIRA NAKA BORIVALI (W), MUMBAI - 400091 .: PAN: AGCPM5167A VS ITO 32(2)(4), C-11 / 306 PRATYAKSHKAR BHAVAN, BKC, BANDRA (E). MUMBAI 400051. (APPELLANT) (RESPONDENT) APPELLANT BY : NONE RESPONDENT BY : SHRI S.K. MIS HRA (DR) /DATE OF HEARING : 19-12-2018 / DATE OF PRONOUNCEMENT : 19-12-2018 ORDER PER M. BALAGANESH, AM : 1. THIS APPEAL BY THE IS REVENUE AGAINST THE ORDER OF THE LD. CIT(A)-44, MUMBAI FOR THE A.Y 2005-06, WHICH IN ITSELF DIRECTED AGAINST THE ORDER PASSED BY THE ASSESSING OFFICER (FOR SHORT THE A.O) U/S. 147 OF THE INCOME-TAX ACT, 1961 (FOR SHORT THE ACT). 2. NONE APPEARED ON BEHALF OF THE ASSESSEE DESPITE GIVING SEVERAL OPPORTUNITIES TO THE ASSESSEE. IN FACT LAST OPPORTUNITY WAS GRANTED TO THE ASSESSEE BY THIS TRIBUNAL ON 15.01.2018 TO APPEAR ON 05.04.2018. LATER, THE ASSESSEE HAD SOUGHT ADJOURNMENT ON 05.04.2018, 13.06.2018, 02.08.2018, 03.10.2018 AND 04.10.2018 AND FINALLY THE CASE WAS ADJOURNED TO TODAY I.E 19.12.2018. WHEN THE CASE WAS CALLED ON FOR HEARING, NONE APPEARED ON BEHALF OF THE ASSESSEE AND NO ADJOURNMENT PETITION WAS EVEN PREFERRED BY THE ASSESSEE. SINCE SEVERAL OPPORTUNITIES WERE GRANTED TO THE ASSESSEE IN THE INSTANT NIMESH R. MEHTA., MUMBAI ITA NO. 5397/MUM/2016 2 CASE, WE PROCEED TO HEAR THE LD. DR AND DISPOSE OF THIS APPEAL ON MERITS. 3. THE FIRST GROUND OF APPEAL RAISED BY THE ASSESSEE IS CHALLENGING THE VALIDITY OF ISSUANCE OF NOTICE U/S 148 OF THE ACT. WE FIND FROM THE FACTS AVAILABLE ON RECORD THAT NO RETURN OF INCOME WAS ORIGINALLY FILED BY THE ASSESSEE FOR THE A.Y 2005-06. ON THE BASIS OF CERTAIN INFORMATION OBTAINED BY THE LD. AO ON THE CREDIT CARD EXPENSES INCURRED BY THE ASSESSEE, THE LD. AO AFTER OBTAINING STATUTORY APPROVAL FROM JT. CIT AND AFTER RECORDING THE REASONS FOR REOPENING, ISSUED NOTICE U/S 148 OF THE ACT ON 29.03.2012. IN RESPONSE TO THE SAID NOTICE, THE ASSESSEE HAD SUBMITTED THE RETURN OF INCOME ON 09.10.2012 DECLARING TOTAL INCOME OF RS. 48,611/-. IN THIS SCENARIO, THE GROUND RAISED BY THE ASSESSEE THAT NOTICE U/S 148 OF THE ACT HAS BEEN WRONGLY ISSUED, DESERVE TO BE DISMISSED. ACCORDINGLY, THE GROUND NO.1 RAISED BY THE ASSESSEE IS DISMISSED. 4. THE NEXT GROUND TO BE DECIDED IN THIS APPEAL IS AS TO WHETHER THE LD. CIT(A) WAS JUSTIFIED IN CONFIRMING THE ADDITION U/S 69C OF THE ACT TOWARDS CREDIT CARD EXPENSES OF RS. 2,06,186/-, IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 4.1. BRIEF FACTS OF THIS ISSUE ARE THAT THE LD. AO OBSERVED THAT ASSESSEE HAD MADE CREDIT CARD PAYMENTS TO THE TUNE OF RS. 2,06.186/-. DUE TO NON COOPERATION FROM THE SIDE OF THE ASSESSEE MY MAKING COMPLIANCE TO VARIOUS STATUTORY NOTICES ISSUED U/S 142(1) AND 143(2) OF THE ACT IN THE REASSESSMENT PROCEEDINGS, THE LD. AO CONCLUDED THAT THE SOURCE OF THE SAID CREDIT CARD PAYMENTS REMAIN UNEXPLAINED BY THE ASSESSEE AND ACCORDINGLY PROCEEDED TO MAKE AN ADDITION U/S 69C OF THE ACT IN THE SUM OF RS. 2,06,186/- TREATING THE SAME AS DEEMED INCOME OF THE ASSESSEE IN THE PREVIOUS YEAR RELEVANT TO A.Y 2005-06. 4.2. THE ASSESSEE BEFORE THE LD. CIT(A) STATED THAT THE CREDIT CARD PAYMENTS OF RS. 2,06,186/- WERE INCURRED FOR SETTLING THE NIMESH R. MEHTA., MUMBAI ITA NO. 5397/MUM/2016 3 BILLS OF HOSPITAL. THE LD. CIT(A) OBSERVED THAT THE TOTAL GROSS RECEIPTS OF THE ASSESSEE FROM PROFESSION WAS ONLY RS. 2,29,352/- AND THAT THE NET INCOME WAS RS. 45,185/-. HENCE THE CREDIT CARD PAYMENT OF RS. 2,06,186/- CANNOT BE SPENT OUT OF THE AVAILABLE DISCLOSED SOURCE OF INCOME BY THE ASSESSEE. THE LD. CIT(A) ACCORDINGLY CONCLUDED THAT IT IS HIGHLY UNLIKELY THAT ASSESSEE WOULD HAVE MADE REPAYMENT OF CREDIT CARD BILLS THROUGH HIS KNOWN SOURCES OF INCOME AND ACCORDINGLY CONFIRMED THE ADDITION. 4.3. WE HAVE HEARD THE LD. DR. WE FIND FROM THE FACTS AVAILABLE ON RECORD THAT ASSESSEE HAD NOT PROVED THE SOURCE OF INCURRENCE OF CREDIT CARD EXPENDITURE TO THE TUNE OF RS. 2,06,186/- FROM HIS DISCLOSED SOURCES OF INCOME. GOING BY THE TOTALITY AND FACTS AND CIRCUMSTANCES OF THE CASE, WE HOLD THAT THE ADDITION HAD BEEN RIGHTLY CONFIRMED BY THE LD. CIT(A) U/S 69C OF THE ACT. ACCORDINGLY, THE GROUND NO. 2 RAISED BY THE ASSESSEE IS DISMISSED. 5. THE LAST GROUND TO BE DECIDED IS AS TO WHETHER THE LD. CIT(A) WAS JUSTIFIED IN UPHOLDING THE DISALLOWANCE OF EXPENSES @ 25% ON AN ESTIMATED BASIS, IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 5.1 THE LD. AO OBSERVED THAT THE ASSESSEE HAS SHOWN GROSS PROFESSIONAL INCOME OF RS. 2,29,352/- AND THE NET PROFIT AFTER DEBITING VARIOUS EXPENSES WAS SHOWN AT RS. 48,611/-. IN RESPECT OF TOTAL EXPENSES DEBITED BY THE ASSESSEE, DUE TO NON COMPLIANCE ON THE PART OF THE ASSESSEE IN THE REASSESSMENT PROCEEDINGS, THE LD. A.O. DISALLOWED 25% OF THE TOTAL EXPENSES DEBITED IN THE PROFIT AND LOSS ACCOUNT ON AN ESTIMATED BASIS AND MADE DISALLOWANCE OF RS. 45,185/-, WHICH WAS UPHELD BY THE LD. CIT(A). AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE US. 5.2. WE HAVE HEARD THE LD. DR. WE FIND THAT THE ASSESSEE HAD NOT APPEARED EITHER IN PERSON OR THROUGH HIS AR BEFORE THE LD. NIMESH R. MEHTA., MUMBAI ITA NO. 5397/MUM/2016 4 AO AND FURNISHED ANY SUPPORTING EVIDENCES IN RESPECT OF EXPENSES DEBITED IN THE PROFIT AND LOSS ACCOUNT. EVEN BEFORE THE LD. CIT(A,) THE ASSESSEE HAD NOT SUBMITTED ANY DETAILS OF THE EXPENDITURES WITH SUPPORTING EVIDENCES EXCEPT MAKING A BALD STATEMENT THAT THE EXPENSES WERE INCURRED WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF BUSINESS OR PROFESSION OF THE ASSESSEE. THERE IS NO MATERIAL AVAILABLE ON RECORD THAT BOOKS OF ACCOUNTS, IF ANY MAINTAINED, WERE PRODUCED BEFORE THE LD. AO. HENCE, THERE IS NO QUESTION OF REJECTION OF BOOKS OF ACCOUNTS THEREON BY POINTING OUT CERTAIN DEFICIENCIES. IN VIEW OF THESE FACTS AND CIRCUMSTANCES, THE ONLY RECOURSE AVAILABLE TO THE REVENUE IS TO MAKE ESTIMATION OF DISALLOWANCE OF EXPENSES. WE HOLD THAT THE LD. CIT(A) HAD RIGHTLY CONFIRMED THE ADDITION IN THIS REGARD. ACCORDINGLY, THE GROUND NO. 3 RAISED BY THE ASSESSEE IS DISMISSED. 6. GROUND OF APPEAL NO. 4 RAISED BY THE ASSESSEE IS GENERAL IN NATURE AND DOES NOT REQUIRE ANY SPECIFIC ADJUDICATION. 7. IN THE RESULT THE APPEAL FILED BY THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 19 TH DECEMBER, 2018 SD/- SD/- (JOGINDER SINGH) (M. BALAGANESH) VICE PRESIDENT ACCOUNTANT MEMBER MUMBAI, DATE: 19 TH DECEMBER, 2018 / COPY TO:- 1) / THE APPELLANT. 2) / THE RESPONDENT. 3) THE CIT/DRP -11, MUMBAI. 4) THE CIT/DIT CONCERNED , MUMBAI. 5) , , / THE D.R. K BENCH, MUMBAI. 6) [ \ COPY TO GUARD FILE.