Sri. Rangappa, Channapatna V. ITO, Mandya

ITA 630/BANG/2011

• Counselvise Citation: 63021114 RSA 2011
• Duration Of Justice: 1 year(s) 1 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-07-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 27-06-2012
• Assessment Year: 2004-2005
• Appeal Filed On: 01-06-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SARAVANAN B
• Assessee Lawyers: BALRAM R RAO
• Section: 148; 143(3); 133A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BANGALORE BANGALORE BANGALORE BENCH BENCH BENCH BENCH A AA A BEFORE BEFORE BEFORE BEFORE SHRI SHRI SHRI SHRI N. N. N. N. BARAT BARAT BARAT BARATH HH HVAJA SANKAR, VICE VAJA SANKAR, VICE VAJA SANKAR, VICE VAJA SANKAR, VICE- -- -PRESIDENT PRESIDENT PRESIDENT PRESIDENT A AA AND NDND ND SHRI SHRI SHRI SHRI N.V.VASUDEVAN N.V.VASUDEVAN N.V.VASUDEVAN N.V.VASUDEVAN, JUDICIAL MEMBER , JUDICIAL MEMBER , JUDICIAL MEMBER , JUDICIAL MEMBER ITA NO.630/BANG/2011 (ASSESSMENT YEAR: 2004-05) SHRI RANGAPPA, M/S.RANGANATHA BOREWELLS, MASJID STREET, HONGANUR VILLAGE & POST, CHANNAPATNA TALUK. APPELLANT AEFPR 4322 B VS INCOME-TAX OFFICER, WARD 3, MANDYA. RESPONDENT APPELLANT BY: SHRI BALRAM R RAO, ADVOCATE. RESPONDENT BY : SHRI SARAVANAN B, JCIT. DATE OF HEARING : 17-07-2012. DATE OF PRONOUNCEMENT: 24-07-2012. O R D E R O R D E R O R D E R O R D E R PER N. BARATHVAJA SANKAR, VP: PER N. BARATHVAJA SANKAR, VP: PER N. BARATHVAJA SANKAR, VP: PER N. BARATHVAJA SANKAR, VP: THIS IS AN APPEAL PREFERRED BY THE ASSESSEE SHRI RANGAPPA OF HONGANUR VILLAGE & POST, CHANNAPATNA TA LUK AGAINST THE APPELLATE ORDER DATED 11-1-2010 OF THE CIT(A), MYSORE, FOR THE ASSESSMENT YEAR 2004-05. 2. THE GROUNDS OF APEAL BY THE ASSESSEE READ AS UND ER: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD.CIT(A) OUGHT TO HAVE REFRAINED FROM UPHOLDING THE ADDITION OF `12,49,266/- ON THE PREMISE THAT THE APPELLANT HAD NOT DECLARED CASH AT BANK. ITA NO.630/BANG/2011 PAGE 2 OF 5 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD.CIT(A) HAS ERRED IN UPHOLDING THE ADDITION MADE BY THE ASSESSING OFFICER WITHOUT CONSIDERING THE EXPLANATION MADE TO THE ASSESSING OFFICER VIDE LETTER DT.25-11-2009. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD.CIT(A) ERRED IN UPHOLDING THE ENHANCEMENT OF NET INCOME AT 12% WITHOUT ANY JUSTIFIED REASON AND THEREFORE IS LIABLE TO BE SUBSTANTIALLY REDUCED. 4. WITHOUT PRE JUDICE THE ADDITIONS UPHELD BY THE CIT(A) IS ARBITRARY, UNJUST AND UNCALLED FOR AND THEREFORE THE ADDITION MADE IS LIABLE TO BE DELETED. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS AN INDIVIDUAL CARRYING ON BORE WELL CONTRACT BUSINESS AND FILED HIS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2004-05 ON 22-6-2004 DECLARING A TOTAL INCOME OF `1,57,660/-. A SURVEY U/S 133A OF THE INCOME-TAX ACT, 1961 [HEREINAFTER REFERRED TO A S 'THE ACT'] WAS CONDUCTED BY THE IT DEPARTMENT IN THE BUSINESS PREMISES OF THE ASSESSEE, DURING THE COURSE OF WHICH CERTAIN DOCUMENTS AND PAPERS WERE IMPOUNDED. ON THE PREMISE THAT CAS H AT BANK AS ON 31-3-2004 WAS NOT DECLARED IN THE BALANCE SHE ET, THE AO ISSUED NOTICE U/S 148 OF THE ACT. AFTER HEARING TH E ASSESSEE AND AFTER VERIFYING THE DETAILS, THE AO CONCLUDED THE A SSESSMENT U/S 143(3) AND DETERMINED THE TOTAL INCOME AT `14,06,92 0/- BY MAKING AN ADDITION OF `12,49,266/- ON THE PREMISE T HAT THE CASH AT BANK WAS NOT DISCLOSED. 3. AGGRIEVED BY THIS ORDER, THE ASSESSEE MOVED THE MATTER IN APPEAL BEFORE THE FIRST APPELLATE AUTHORI TY. THE ASSESSEE TOOK SOMEWHAT STRANGE ARGUMENT THAT HE HAD AGREED TO DISCLOSE 12% OF THE PROFIT IN THE SUBSEQUENT ASS ESSMENT ITA NO.630/BANG/2011 PAGE 3 OF 5 YEARS AS PER THE AOS ADVICE AND NO FURTHER ADDITIO N SHOULD HAVE BEEN MADE. IN THE COURSE OF APPELLATE PROCEED INGS BEFORE THE CIT(A), THE ASSESSEE FILED COPY OF THE STATEMEN T OF HIS BANK ACCOUNT. THE CIT(A) NOTICED THAT THE CLOSING BALAN CE AS MENTIONED IN THE ASSESSMENT ORDER WAS CORRECT. HE WAS OF THE VIEW THAT THE ASSESSEE HAS NOT TRIED TO EXPLAIN AS TO WHY THE BALANCE HAD NOT BEEN REFLECTED IN THE BALANCE SHEET PREPARED AND FILED WITH THE RETURN OF INCOME. THERE WAS NO EXPLANATION FILED ABOUT CREDITS OR DEPOSITS IN THE BANK ACCOUNT WHICH HAD ULTIMATELY RESULTED IN THIS BALANCE. THE ASSESSEE S INABILITY TO FURNISH ANY EXPLANATION JUSTIFIED THE AOS INFERENC E THAT CASH BALANCE REPRESENTED UNACCOUNTED ASSETS OF THE ASSES SEE. AS THE BANK BALANCE WAS NOT REFLECTED IN THE BALANCE S HEET PREPARED AS PER THE BOOKS MAINTAINED AND THERE WAS NO SATISFACTORY EXPLANATION FOR THIS OMISSION, THE BOO KS ARE LIABLE TO BE REJECTED. THE CASH BALANCE AT THE END OF THE YE AR COULD BE CONSIDERED AS ASSESSEES INCOME FOLLOWING THE ASSET ACCRETION METHOD. THERE WAS NO PROOF OF ANY CORRESPONDING OU TSTANDING LIABILITIES. THUS, THE ADDITION WAS TO BE CONFIRME D FROM THIS ANGLE AS WELL, ACCORDING TO THE CIT(A). THE INCOME DISCLOSED IN THE SUBSEQUENT YEARS HAD NO RELEVANCE TO THE ADDITI ONS MADE AS OBSERVED IN THE CIT(A)S ORDER. THE ASSESSEE HA S NEITHER CLAIMED NOR IS THERE ANY EVIDENCE ON THE FILE TO SH OW THAT THE CLOSING BALANCE AT THE BANK REPRESENTED ANY ADVANCE RECEIPTS CORRESPONDING TO THE INCOME TAXED IN THE SUBSEQUENT YEARS. CONSIDERING THE ABOVE, THE GROUNDS OF APPEAL OF THE ASSESSEE ITA NO.630/BANG/2011 PAGE 4 OF 5 WERE DISMISSED BY THE CIT(A) AND THE ADDITION MADE BY THE AO WAS CONFIRMED. 4. AT THE TIME OF HEARING, LEARNED COUNSEL FOR THE ASSESSEE REITERATED THE GROUNDS OF APPEAL AS HIS SU BMISSIONS BEFORE US. HE ALSO REITERATED THE SAME ARGUMENTS M ADE BEFORE THE LOWER AUTHORITIES BEFORE US ALSO. PER CONTRA, LEARNED DEPARTMENTAL REPRESENTATIVE STRONGLY SUPPORTED THE ORDERS OF THE LOWER AUTHORITIES AND PLEADED THAT THERE IS NO NEED FOR DISTURBING THE ORDER OF THE CIT(A). 5. WE HAVE HEARD RIVAL SUBMISSIONS AND CONSIDERED T HE FACTS AND MATERIALS ON RECORD. THE FACT REMAINS TH AT THE ASSESSEE COULD NOT EXPLAIN EVEN BEFORE US THE ABOVE CREDITS FOR DEPOSITS IN THE BANK ACCOUNT WHICH HAD ULTIMATELY R ESULTED IN THE BALANCE OF `12,49,266/-. AS RIGHTLY OBSERVED B Y THE CIT(A), THE INCOME DISCLOSED IN THE SUBSEQUENT YEAR HAS NO RELEVANCE TO THE ADDITION MADE IN THE ASSESSMENT YEAR 2004-05 . WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE CIT(A) A ND WE TOTALLY CONCUR WITH THE REASONING RECORDED THEREIN BY HIM. HENCE, WE DO NOT HESITATE TO CONFIRM THE ORDER OF THE CIT(A) AND DISMISS THE GROUNDS OF APPEAL OF THE ASSESSEE. 6. IN THE RESULT, THE ASSESSEES APPEAL IS DISMISSE D. ORDER PRONOUNCED IN THE OPEN COURT ON 24 TH JULY, 2012 . SD/- SD/- (N. (N. (N. (N.V. V.V. V.VASUDEVAN VASUDEVAN VASUDEVAN VASUDEVAN) )) ) JUDICIAL JUDICIAL JUDICIAL JUDICIAL MEMBER MEMBER MEMBER MEMBER (N.BARATHVAJA SANKAR) (N.BARATHVAJA SANKAR) (N.BARATHVAJA SANKAR) (N.BARATHVAJA SANKAR) VICE VICE VICE VICE- -- -PRESIDENT PRESIDENT PRESIDENT PRESIDENT EKS ITA NO.630/BANG/2011 PAGE 5 OF 5 COPY TO : 1. APPELLANT 2. RESPONDENT 3. CIT(A) CONCERNED 4. CIT 5. DR, ITAT, BANGALORE 6. GUARD FILE BY ORDER SENIOR PRIVATE SECRETARY ITAT, BANGALORE