Sh. Kamaljit Singh Prop., Bathinda V. The Income tax Officer, Bathinda

ITA 675/ASR/2013

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 7750 (ITAT-AMRITSAR)
• Duration Of Justice: 3 year(s) 11 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-10-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 19-07-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 14-11-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: RAHUL DHAWANLD
• Assessee Lawyers: ASHWANI KALIA LD
• Keywords: Depreciation; Principle of natural justice; Additional evidence; Wrong claim
• Section: 142(1); 69; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR BEFORE SH. T.S. KAPOOR, ACCOUNTANT MEMBER AND SH. N.K.CHOUDHRY, JUDICIAL MEMBER I.T.A NO.675(ASR)/2013 ASSESSMENT YEAR:200 9-10 SH. KAMALJIT SINGH PROP. M/S DHANOA BROTHERS, BATHINDA. PAN:AZOPS-2539R VS. INCOME TAX OFFICER, WARD-1(1), BATHINDA. (APPELLANT) (RESPONDENT) APPELLANT BY: SH. ASHWANI KALIA (LD. CA) RESPONDENT BY: SH. RAHUL DHAWAN (LD. D.R) DATE OF HEARING: 06.09.2017. DATE OF PRONOUNCEMENT: 25.10.2017 ORDER PER N.K.CHOUDHRY: THE INSTANT APPEAL HAS BEEN PREFERRED BY THE ASSESSEE, ON FEELING AGGRIEVED AGAINST THE ORDER DATED 16.08.201 3 PASSED BY THE LD. CIT(A), BATHINDA, FOR ASST. YEAR:2009-10. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APP EAL. 1. THAT THE LD. CIT(A) HAS ERRED IN CONFIRMING T HE ASSESSMENT FRAMED U/S 144 BY THE A.O. 2. THAT THE LD. CIT(A) HAS ERRED IN LAW AND ON FA CTS IS SUSTAINING THE ADDITION OF RS.15,86,371/- MADE BY THE A.O. BY INVO KING THE PROVISIONS OF SECTION 69 OF THE ACT. 3. THAT THE LD. CIT(A) HAS ERRED IN CONFIRMING THE DISALLOWANCE OF RS.50,000/- OUT OF VARIOUS EXPENSE ON ADHOC BASIS. 4. THAT THE ORDER IS BAD IN LAW AND ON FACTS. 3. THE BRIEF FACTS OF THE CASE ARE AS UNDER: THE ASSESSEE IS A CEMENT DEALER AND FILED HIS RETUR N OF INCOME BY DECLARING AN INCOME OF RS.1,88,390/- FOR THE ITA NO.675 (ASR)/2013 ASST. YEAR :2009-10 2 ASST. YEAR 2009-10 ON 30.09.2009. THE CASE WAS SELE CTED FOR SCRUTINY UNDER CASS. STATUTORY NOTICES HAVE BEE N ISSUED AND THE COPY OF AUDIT REPORT ALONGWITH CAPITAL ACCO UNT, TRADING & PROFIT & LOSS ACCOUNT, BALANCE SHEET AND OTHER DOCUMENTS WERE OBTAINED AND PLACED ON FILE. THEREAF TER, A DETAILED QUESTIONNAIRE ALONGWITH NOTICE U/S 142(1) WAS ALSO ISSUED ON 19.01.2011 AND THEREAFTER, AROUND 17 OPPORTUNITIES HAVE BEEN OFFERED TO THE ASSESSEE, HO WEVER, THE ASSESSEE ON SOME OF THE DATES, ON THE ONE OR OT HER GROUND SOUGHT ADJOURNMENT AND DID NOT CO-OPERATE WI TH THE ASSESSMENT PROCEEDING AND NO BOOKS OF ACCOUNT EVER PRODUCED EXCEPT WRITTEN REPLY AND FINALLY THE ASSES SING OFFICER WAS HAVING NO OPTION EXCEPT TO FRAME THE ASSESSMENT IN ACCORDANCE WITH THE SEC.144 OF THE I. T. ACT. IT WAS HELD IN THE ASSESSMENT THAT THE ASSESSEE HAS MAINTAINED A SAVING BANK ACCOUNT NO.2420 1010, 012 5031 WITH THE AXIS BANK, BATHINDA AND HAS DEPOSITED AN A MOUNT OF RS.25,20,000/- IN THE SAID ACCOUNT IN CASH DURIN G THE YEAR UNDER CONSIDERATION AND THE CLOSING BALANCE IN THE SAID ACCOUNT AS ON 31 ST MARCH, 2009 STANDS AT RS.8,030/-. THE ASSESSEE WAS ASKED TO EXPLAIN THE SOURCE OF AMOUNT DEPOSITED IN THE SAID ACCOUNT AND IN REPLY THEREOF THE ASSESSEE HAS SUBMITTED THAT DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE HAD TRIED TO GET C&F OF A CEMENT COMPANY AND APPOINTED NEW AS WELL AS HIS SOL E DEALERS TO TAKE THE SAID C&F AND RECEIVED SOME AMOU NTS AS REFUNDABLE SECURITY DEPOSIT FROM THEM. THE ASSESSEE HAS ALSO SUBMITTED A LIST OF 81 SUCH PERSONS FROM WHOM THE ASSESSEE HAS RECEIVED AN AMOUNT OF RS.19,500/- DURI NG THE PERIOD FROM 29 TH NOV.2008 TO 01.12.2008 I.E. WITHIN 3 DAYS. SURPRISINGLY THE AMOUNT RECEIVED IS RS.19,500/- FRO M 8 ITA NO.675 (ASR)/2013 ASST. YEAR :2009-10 3 PERSONS EACH AND IS INVARIABLY IN CASH IN EACH CASE . THE ASSESSEE WAS REQUIRED TO PRODUCE IDENTITY AND CAPAC ITY OF THE ABOVE PERSONS AS WELL AS GENUINENESS OF THE TRANSACTIONS. HOWEVER, DESPITE SO MANY OPPORTUNITIE S PROVIDED, THE ASSESSEE HAS NOT PROVIDED A SINGLE DO CUMENT TO PROVE THE SAME. EVEN ACCOUNT BOOKS HAVE NOT BEEN PRODUCED. FURTHER, THE ASSESSEE ALSO FAILED TO EXPLAIN AS TO WHY CLOSING BALANCE OF RS.8,030/- OF THE SAID ACCOUNT I S NOT APPEARING IN THE BALANCE SHEET OF THE ASSESSEE, ALT HOUGH, IT WAS SUBMITTED BY THE ASSESSEE THAT HE HAS FAILED TO TAKE THE C&F FROM THE COMPANY, HOWEVER, FROM THE AFORESA ID FACTS, THE ASSESSEE WAS UNABLE TO FURNISH ANY DOCUM ENTARY EVIDENCE QUA SOURCE OF AMOUNT INVESTED BY HIM IN TH E SAVING BANK ACCOUNT WITH THE AXIS BANK LTD. BATHIND A, THEREFORE, IN ORDER TO GIVE NATURAL JUSTICE THE ASS ESSING OFFICER WORKED OUT THE AMOUNT OF RS.15,86,371/- AS PEAK AMOUNT FROM THE BANK STATEMENT AND ADDED THE SAME T O THE INCOME OF THE ASSESSEE U/S 69 OF THE I.T. ACT. FURTHER, INSURANCE COMMISSION OF RS.1,920/- WAS ALSO ADDED TO THE INCOME OF THE ASSESSEE AND RS.50,000/- IN L UMP SUM OUT OF THE EXPENSES DEBITED TO P&L ACCOUNT WAS ALSO DISALLOWED BY THE ASSESSING OFFICER. 4. ON FEELING AGGRIEVED AGAINST THE ASSESSMENT ORDER, T HE ASSESSEE PREFERRED THE FIRST APPEAL BEFORE THE LD. CIT(A), WH O DISMISSED THE APPEAL OF THE ASSESSEE. ITA NO.675 (ASR)/2013 ASST. YEAR :2009-10 4 5. THE ASSESSEE FURTHER CARRIED THE MATTER BEFORE US BY FILI NG THE INSTANT APPEAL AND IN SUPPORT OF ITS CASE SUBMITTED THAT THE ASSESSEE IS PROPRIETOR OF FIRM M/S. DHANOA BROS AND IS ENGAGED IN THE BUSINESS OF TRADING IN CEMENT. IN ADDITION TO THE ABOVE THE ASSESSEE IS ALSO ENGAGED IN THE RENTING OF SHUTTERING MATERIAL AND EA RNING COMMISSION INCOME ON PURCHASE AND SALE OF PROPERTY. THE TOTAL RETU RNED INCOME OF THE ASSESSEE FOR THE YEAR UNDER APPEAL WAS RS.1,99,989/- INCLUDING COMMISSION INCOME OF RS.50,000/- AND INCOME FROM LEASING O F SHUTTERING INCOME OF RS.48,427/-. IT WAS FURTHER SUBMITTED THE LD. AR THAT THE ASSESSEE IS ABSOLUTELY ILLITERATE AND LAY MAN AND HAD NO KNOWLED GE OF TAX MATTERS. THIS IS EVIDENT FROM THE FACT THAT EVEN HE CANNOT PUT HIS SIGNATURE IN ENGLISH AND THE ASSESSEE HAD ENGAGED AN LAWYER SH. ANIL KUMAR JAIN WHO ATTENDED THE PROCEEDINGS ON BEHALF OF THE ASSESSEE AN D DURING THE FINANCIAL YEAR: 2008-09 RELEVANT TO ASSESSMENT YEAR 2009-10 HAD OPENED ONE SAVING A/C WITH AXIS BANK ON 5.9.2008 IN W HICH CASH DEPOSITED OF RS.2520000 WAS MADE. THE AO MADE ENQUIRY AS REGARDS THE SOURCE OF DEPOSIT OF THE SAID CASH IN BANK AND THE ASSE SSEES COUNSEL WITHOUT CONSULTING WITH THE ASSESSEE FILED EXPLANA TION THAT THE SAID AMOUNT WAS RECEIVED FROM CERTAIN PERSONS BY WAY OF SE CURITY DEPOSIT FOR BEING APPOINTED AS DEALERS OF CEMENT AND SAM E WAS REQUIRED TO DEPOSIT WITH COMPANY FOR GETTING C & F OF A PARTICULAR CEMENT COMPANY AND HE HAS ALSO FILED LIST OF PERSONS BEFO RE THE AO WHO HAD GIVEN THE SAID AMOUNT TO THE ASSESSEE BE KEPT A S SECURITY DEPOSIT AND THIS ALL WAS DONE BY ASSESSEES COUNSEL AND THE ASSESSEE SIGNED CERTAIN STATEMENTS AS ADVISED BY HIS COUNSEL A ND THE ASSESSEE WAS ABSOLUTELY NEITHER KNOWING THE SAME NO R HE UNDERSTOOD THE IMPLICATION OF THE INCOME TAX LAWS B EING A LAY MAN AND THE AO DISBELIEVED THE EXPLANATION REGARDIN G THE SOURCE OF DEPOSIT OF CASH IN THE BANK AND ADDED PEAK AMOUN T OF DEPOSIT ITA NO.675 (ASR)/2013 ASST. YEAR :2009-10 5 OF RS.15,86,176/- IN THE BANK BY INVOKING THE PROVI SIONS OF SECTION 69A TO THE RETURNED OF INCOME. IT WAS FURTHER SUBMITTED BEFORE THE LD. CIT(A) THAT SINCE THE ASSESSEE WAS ALSO ENGAGED IN THE BUSINESS OF PR OPERTY DEALER, AT TIMES THE BUYER OF PROPERTY USED TO PAY HIM AMOUNT IN ADVANCE FOR THE PURCHASE OF PROPERTY AS PER THEIR N EEDS AND IN ONE OF SUCH CASE, ONE SH. JASBIR SINGH, R/O TALWANI D SABO DISTT. BATHINDA GAVE RS.15 LACS FOR THE PURCHASE OF PROPER TY AND THE SAID AMOUNT OF RS.15 LACS WAS DEPOSITED BY THE ASSE SSEE IN HIS SAVING BANK ON 2.12.2008 AND THEREAFTER, IMMEDIATEL Y, WITHDRAWN ON 4.12.2008 FOR THE PURCHASE OF PROPERTY FOR JAGSIR SINGH AND THE SAID AMOUNT OF RS.15 LACS WAS RECEIVE D BY JAGSIR SINGH ON THE SALE OF HIS HOUSE ON 12.9.2008 SITUATE D AT ADARSH NAGAR, BATHINDA. COPY OF THE SAID SALE DEED WAS ALS O FILED BEFORE THE CIT(A) AND IT WAS ALSO SUBMITTED THAT OUT OF T HE SAID AMOUNT OF ADVANCE, THE ASSESSEE PAID ON BEHALF OF SAID JAG SIR SINGH FOR PURCHASE OF LAND IN VILLAGE BOKHRA FOR RS.660000 (R S.604000 COST OF LAND & RS.54000 COST FOR STAMP PAPERS ETC.) ON 4 .12.2008 AND BALANCE AMOUNT OF RS.870000 WAS RE-DEPOSITED IN THE BANK ON 17.12.2008 AS PER THE INSTRUCTIONS OF SH. JAGSIR SI NGH FOR THE PURCHASE OF ANOTHER PROPERTY. HOWEVER, SINCE SUBSEQUENTLY NO SUITABLE PROPERTY C OULD BE FOUND, THEREFORE, THE BALANCE AMOUNT WAS RETURNED T O SH. JASBIR SINGH AFTER WITHDRAWING THE SAME FROM BANK WITHIN 1 0-12 DAYS AND THE WHOLE TRANSACTIONS IN THE BANK OF DEPOSITS, WITHDRAWALS, REDEPOSIT AND WITHDRAWALS ARE IN ONE MONTH ONLY I.E . MONTH OF DECEMBER 2012 AND THE COPY OF SALE DEED OF HOUSE BY JAGSIR SINGH AND COPY OF PURCHASE DEED OF LAND FOR JAGSIR SINGH WERE FILED BEFORE CIT(A). HOWEVER, THE LD. CIT(A) DISBEL IEVED THE ITA NO.675 (ASR)/2013 ASST. YEAR :2009-10 6 SUBMISSION OF THE ASSESSEE ON THE GROUND THAT THE A SSESSEE HAD GIVEN DIFFERENT EXPLANATION BEFORE AO AND HE HAS SU BMITTED DIFFERENT EXPLANATION BEFORE HIM AND REFUSED TO TAK E THE FRESH EVIDENCE ON RECORD ON THE GROUND THAT SUFFICIENT OP PORTUNITIES WERE GIVEN TO THE ASSESSEE BY AO TO SUBMIT THE NECE SSARY EVIDENCES AND CANNOT BE ACCEPTED BY HIM UNDER RULE 46A AS SUFFICIENT OPPORTUNITIES WAS GIVEN TO THE ASSESSEE BY THE A.O. FURTHER, IT WAS SUBMITTED BY THE LD. AR THAT THE ASS ESSEES CASE FALLS SQUARELY IN CLAUSE (1) SUB CLAUSE (B) AN D (C) OF RULE 46A AS HE WAS PREVENTED BY SUFFICIENT CAUSE FOR NOT PRODUCING THE CORRECT AND NECESSARY EVIDENCE BEFORE AO AS THE ASSESSEE HAD NO KNOWLEDGE ABOUT THE EXPLANATION BEING SUBMIT TED BY HIS COUNSEL BEFORE THE AO AS HE WAS KEPT IN DARK BY THE COUNSEL AND HE CAME TO KNOW AS TO WHAT HAD HAPPENED ONLY AFTER RECEIVING THE ASSESSMENT ORDER AND MOREOVER, IF THE CIT(A) WA S NOT INCLINED THE ACCEPT THE ADDITIONAL EVIDENCE THEN TH ERE WAS NO NEED TO SEEK THE REMAND REPORT FROM THE AO. FURTHER, IT WAS SUBMITTED BY THE LD. AR THAT THERE IS ONLY ONE DEPOSIT OF RS.15,75,000/- IN THE ACCOUNT WHICH SUPPORT THE ASSESSEES CONTENTION THAT THIS AMOUNT WAS RECEIVED FROM BUYER OF PROPERTY AND THERE ARE NO REGULAR OPERATIONS IN THE BANK ACCOUNT AND AFTER THE WITHDRAWN RS.6,60,000/- WAS S PENT AND BALANCE AMOUNT WAS REDEPOSITED WHICH WAS SUBSEQUENT LY WITHDRAWN WITHIN 10-12 DAYS FOR REPAYMENT TO JAGSIR SIINGH AND FURTHER THE ASSESSEE RELIED UPON THE DECISION OF BO MBAY HIGH COURT IN THE CASE OF SMT. PRABHAVATI S. SHAH VS. CI T 231 ITR 1 (1998) WHEREIN IT WAS HELD AS UNDER: ITA NO.675 (ASR)/2013 ASST. YEAR :2009-10 7 THE INFORMATION SOUGHT TO BE PRODUCED BY THE APPEL LANT WAS NECESSARY TO DECIDE THE CONTROVERSY IN REGARD TO TH E GENUINENESS OF THE LOAN TAKEN BY THE ASSESSEE AND, THEREAFTER, THE FIRST APPELLATE AUTHORITY SHOULD HAVE EXERCISE THE POWERS CONFERRED UPON IT U/S 250(4) AND TAKEN ON RECORD SUCH INFORMATION AND CON SIDERED THE SAME FOR DECIDING THE GENUINENESS OF THE LOAN. IN SUPPORT OF GROUND NO.3 QUA DISALLOWANCE OF RS.50,000 /- OUT OF VARIOUS EXPENSES, IT WAS SUBMITTED BY THE LD. AR THA T FROM THE COPY OF TRADING & PROFIT & LOSS ACCOUNT, IT WILL BE OBSERVED THAT THE ASSESSEE HAD TOTAL SALE OF MORE THAN RS.1 CRORE AND TOTAL EXPENSES ARE ONLY RS.2 LACS APPROXIMATELY WHICH INCLUDES INTEREST OF RS.82,722/- AND DEPRECIATION OF RS.38,753/-, THEREFORE , THE ADDITION OF RS.50,000/- MADE BY THE AO AND CONFIRMED BY THE LD. C IT(A) WITHOUT ANY JUSTIFICATION IN VIEW OF THE FACT THAT TOTAL EXPE NSES ARE VERY NOMINAL. THE TOTAL EXPENSES ARE ONLY RS.78,000/- APPRO XIMATELY AND OUT OF THESE THE DISALLOWANCE OF RS.50,000/- IS HIGHLY E XCESSIVE AND NEEDS TO BE DELETED. 6. ON THE OTHER HAND, THE LD. DR VEHEMENTLY RAISED THE OBJECTION WITH REGARD TO THE MAINTAINABILITY OF THE ADDITIONA L EVIDENCES UNDER RULE-46 OF THE I.T. RULES AND FURTHER SUBMITTED THAT STORY PUTFORTH BEFORE THE ASSESSING OFFICER AND THE LD. CIT(A) ARE ALTO GETHER DIFFERENT WHICH IN ANY CASE CANNOT BE ALLOWED TO BE ENTERTAINED AND IF ENTERTAIN WILL OPEN PANDORA BOX FOR EACH AND EVERY CASE. 7. WE HAVE GONE THROUGH WITH THE FACTS AND CIRCUMSTANCES OF THE CASE, IT IS NOT IN CONTROVERSY THAT DESPITE OFFERING 17 OPPORTUNITIES, THE ASSESSEE DID NOT CO-OPERATE WITH THE ASSESSMENT PROCEEDING A ND ON THE ONE OR THE OTHER PRETEXT EVADED THE ASSESSMENT PROCE EDINGS AND FAILED TO EXPLAIN THE NATURE AND SOURCE OF THE CASH DEP OSIT OF RS.25,20,000/-IN HIS BANK ACCOUNT, THEREFORE, IN COMPELL ING CIRCUMSTANCES, FINDING NO ALTERNATIVE, THE ASSESSING OFFICER PROCEEDED WITH THE ASSESSMENT U/S 144 AND FURTHER CONSIDERING THE E XPLANATION ITA NO.675 (ASR)/2013 ASST. YEAR :2009-10 8 OF ASSESSEE WITH REGARD TO TRYING TO GET C & F OF A CEME NT COMPANY AND APPOINTED NEW AS WELL AS HIS SOLE DEALERS TO TAKE TH E SAID C&F AND RECEIVED SOME AMOUNTS AS REFUNDABLE SECURITY DEPOSIT FROM THEM AND THE ASSESSEE HAS ALSO SUBMITTED A LIST OF 81 SUCH PERSONS FROM WHOM THE ASSESSEE HAS RECEIVED AN AMOUNT OF RS.19,500/- EACH DU RING THE PERIOD FROM 29.11.2008 TO 01.12.2008 I.E., WITHIN 3 DAYS INVARIABLY IN CASH IN EACH CASE, FINALLY THE ASSESSING OFFICER WORKED OUT T HE PEAK AMOUNT AT RS.15,86,371/- AND ADDED TO THE INCOME OF T HE ASSESSEE. HOWEVER, IN THE APPELLATE PROCEEDINGS, THE ASSESSEE HAD TA KEN ALTOGETHER DIFFERENT STANDS/PLEAS THAT THE ASSESSEE WAS IGNORANT ABOUT THE EXPLANATION GIVEN BY THE ERSTWHILE COUNSEL OF THE APPELLANT, WHILE THE TRUTH OF THE MATTER WAS THAT THE AMOUNTS DEPOSITED IN THE BANK REPRESENTED THE ADVANCE MONEY RECEIVED FROM THE CLIE NTS WHO WERE DESIROUS TO PURCHASE THE PROPERTY AND THIS FACT ALSO STOOD CORROBORATED FROM THE FACT THAT THE ASSESSEE HAD DISCLOSED INCOME OF RS.50 ,000/- UNDER THE HEAD OTHER INCOME. FURTHER THE LD. AR AL SO RELIED UPON A COPY OF REGISTRATION DEED NO. 9120 DATED 12.09.2008 I N ORDER TO SHOW THAT ONE PERSON SH. JAGSIR SINGH HAVE BEEN SOLD A PR OPERTY WORTH OF RS.15,00,000/- AND THE SAID AMOUNT WAS GIVEN TO THE ASSE SSEE FOR PURCHASE OF ANOTHER PROPERTY AND THE ASSESSEE DEPOSITED TH E SAME IN HIS ACCOUNT WITH AXIS BANK ON 02.12.2008 AND THE SAID AM OUNT WAS WITHDRAWN ON 04.12.2008 FOR PURCHASE OF LAND IN VILLA GE BHOKRA IN THE NAME OF SH. JAGSIR SINGH, SMT. GURPREET KAUR AND S HRI KAMALJIT SINGH FOR CONSIDERATION OF RS.6,05,000/- AND THE BALANCE AMOU NT WAS AGAIN DEPOSITED IN THE BANK. THE REMAINING AMOUNT WAS WITHD RAWN IN THE MONTH OF DECEMBER, 2008 AND RETURNED TO THE SAID OF S H. JASGIR SINGH BECAUSE HE WAS NOT INTERESTED TO PURCHASE OF HIS PROPERTY. AS WE REALIZE THAT THE LD. CIT(A) WHILE PASSING THE I MPUGNED ORDER, CAREFULLY PERUSED THE SUBMISSIONS OF THE LD. AR, A SSESSMENT ORDER AS WELL AS REMAND REPORT OF THE AO AND CAME TO T HE CONCLUSION ITA NO.675 (ASR)/2013 ASST. YEAR :2009-10 9 THAT DURING THE ASSESSMENT PROCEEDINGS, IT WAS CONTENDED BY THE APPELLANT THAT THE CASH DEPOSITS IN THE BANK WERE OUT O F THE SECURITIES ADVANCES RECEIVED FROM 81 PERSONS AND EACH PERSON DEPOSITED RS.19,500/- AND IT WAS NEVER BEEN CONTENDED BY THE ASSESSE E THAT THE CASH DEPOSIT IN THE AXIS BANK WAS OUT OF ADVANCES RECEIVE D FROM THE CUSTOMERS FOR PURCHASE OF IMMOVABLE PROPERTY. THE LD. C IT(A) WHILE CONSIDERING THE APPLICATION U/S 46A OF THE I.T. RULE 19 62 CAME TO THE CONCLUSION THAT FROM THE PERUSAL OF THE ASSESSMENT ORDER, IT IS FOUND THAT AO AT NO STAGE REFUSED TO ADMIT ANY ADDITIONAL E VIDENCE WHICH OUGHT TO HAVE BEEN ADMITTED EVEN THE APPELLANT HAS N OT BEEN ABLE TO MAKE OUT ANY CASE THAT WHICH WAS PREVENTED BY SUFFICIENT CAUSE FROM PRODUCING THE EVIDENCE WHICH WAS CALLED FOR PRODUCED BY T HE A.O. AND FROM THE ASSESSMENT ORDER IT CLEARLY REFLECTS THAT THE CASE OF THE ASSESSEE WAS FIXED FOR HEARING ON 17 OCCASIONS DURING THE MORE ONE YEAR BUT AT NO STAGE THE ASSESSEE EXPRESSED ANY INTENTION TO ADDUCE ANY SUCH EVIDENCE AS IS BEING ADDUCED AT THE APPELLATE STA GE, THEREFORE, IT CANNOT BE SAID THAT THE ASSESSEE WAS PREVENT ED BY A SUFFICIENT CAUSE FROM PRODUCING THE EVIDENCE WHICH WAS CALL ED UPON TO PRODUCE BY THE AO, AND ALSO PREVENTED BY A SUFFICIENT CASE FROM PRODUCING BEFORE THE AO ANY EVIDENCE WHICH WAS RELEVAN T TO ANY GROUND OF APPEAL. WE HAVE GIVEN THOUGHTFUL CONSIDERATION TO THE OBSERVA TION MADE BY LD. CIT(A), WHILE DECIDING AN APPLICATION U/S 46A O F THE APPELLANT HEREIN, ALTHOUGH THE ASSESSEE/APPELLANT HAS NOT RAISED A NY SPECIFIC GROUND WITH REGARD TO THE REJECTION OF ITS APPLICATIO N BEFORE US, HOWEVER, WE ARE OF THE CONSIDERED OPINION THAT THE LD . CIT(A) RIGHTLY REJECTED THE SAME BECAUSE THE ASSESSEE WAS UNABLE TO DEMONSTR ATE ANY REASON TO SUBSTANTIATE ITS GROUND TO FALL UNDER THE SUB-RULE OF CLAUSE (1) SUBCLAUSE (B) AND (C) OF RULE 46A. ITA NO.675 (ASR)/2013 ASST. YEAR :2009-10 10 WHILE COMING TO THE MERIT OF THE CASE AND SPECIFIC FOR ADJUDICATION OF GROUND NO.2, WE HAVE REALIZED THAT T HE ASSESSEE HAS FAILED TO MAKE OUT HIS CASE IN ANY STRETCH OF IMAGINATI ON BECAUSE IN THE ASSESSMENT PROCEEDINGS, THE ASSESSEE SPECIFICALLY TAKEN THE STAND WITH REGARD TO CASH DEPOSIT OF RS.25,20,000/-, BY EXPL AINING THAT HE WANTED TO GET C & F OF A CEMENT COMPANY AND APPOINT ED NEW AND SOLE DEALERS FROM WHOM SOME AMOUNTS IN THE SHAPE OF REF UNDABLE SECURITY WAS RECEIVED. IN SUPPORT OF THE SAID CONTENTION , THE ASSESSEE SUBMITTED A LIST OF 81 PERSONS WHICH WAS DULY SIGNED BY 81 PERSONS AND FURTHER STATED THAT FROM EACH SUCH PERSON AN AMOUNT OF RS.19,500/- WAS RECEIVED. IT WAS NEVER BEEN BROUGHT ON RECORD BY THE ASSESSEE DIRECTLY OR IN DIRECTLY THAT THE ASSESSEE HAS DOUBT I N THE INTEGRITY OF HIS COUNSEL AND /OR SUBMISSIONS OF HIS COUNSEL. ONCE THE VAKALTNAMA HAS BEEN FILED ON BEHALF OF THE PARTY, WH ICH IN THIS CASE HAS NOT BEEN DISPUTED, EVERY AUTHORITY CONFERRED TO IT S COUNSEL TO PLEAD HIS CASE BY TAKING ANY GROUND/OBJECTION AND OR AN Y DEFENCE ON BEHALF OF THE ASSESSEE AND IF WRONG SUBMISSIONS HAS BEEN MADE BY COUNSEL ON BEHALF OF THE ASSESSEE BY GETTING SIGNATURE OR WITH OR WITHOUT HIS ASSENT, THEN ALSO BECAUSE OF VAKALTNAMA, THE ASSESSEE IS LIABLE FOR CONSEQUENCES DIRECTLY OR INDIRECTLY. IF WE SERI OUSLY CONSIDER THE ISSUE UNDER HAND AS IT REFLECTS THAT THE ASSESSEE HAS TAK EN STAND THAT HE HAD RECEIVED SECURITY ADVANCE OF 81 PERSONS AND ALSO FILED A LIST OF WHICH IS SIGNED BY 81 PERSONS IN THE ASSESSMENT PRO CEEDINGS, HOWEVER, DURING THE APPELLATE PROCEEDING THE SAME WAS DENIED ON THE PRETEXT THAT THE ASSESSEE BEING IGNORANT HAVING NO PRO PER KNOWLEDGE ABOUT THE EXPLANATION GIVEN BY THE COUNSEL WHILE TH E TRUTH OF THE MATTER WAS DIFFERENT, IT PRIMA-FACIE SHOWS THAT THE ASSESSEE HAD PRODUCED FORGE AND FABRICATED DOCUMENTS IN THE ASSESSMENT PROCEEDINGS FOR WHICH THE ASSESSEE ALONG WITH HIS ERSTWHILE COUNSEL LIABLE FOR THE APPROPRIATE PROCEEDINGS UNDER CIVIL A ND CRIMINAL LAW AND EVEN OTHERWISE IT IS NOT A CASE OF THE ASSESSEE THAT THE A SSESSEE HAS ITA NO.675 (ASR)/2013 ASST. YEAR :2009-10 11 ALREADY INITIATED ANY CRIMINAL PROCEEDINGS AGAINST HIS E RSTWHILE COUNSEL FOR MAKING FORGE/FALSE CLAIM IN THE ASSESSMENT PROCEEDING S. FROM THE FACTS AS EMERGED FROM THE ASSESSMENT PROCEEDINGS AS WELL AS THE APPELLATE STAGE, WE ARE OF THE CONSIDERED OPINION, THA T THERE ARE PLETHORA OF CONCOCTED STORIES AND MALAFIDE CLAIMS WHICH IN OUR CONSIDERED OPINION CANNOT BE SUSTAINED. THE ASSESSEE HAS FAILED TO BRING ON RECORD ANY RECEIPT OF HAVING RECEIVED ANY AMOUNT FROM THE PROPRIETIES BUYER AND EV ENOTHERWISE FROM THE PROPERTY DOCUMENT IT DOES NOT REFLECTS THAT TH E SAME HAVE BEEN PURCHASED THROUGH ASSESSEE AND CONSIDERATION AMOUNT HA S ALSO BEEN GIVEN BY ASSESSEE. EVEN OTHERWISE FROM THE PROFIT AND LOSS ACCOUNT OF THE ASSESSEE, IT REFLECTS THAT THE ASSESSEE HAD MADE SALE OF MORE THAN R S.1 CRORE, THEREFORE, FROM THE TOTAL SALE IT CAN EASILY BE CONSTRUE D THAT THE ASSESSEE IS MUCH COMPETENT AND KNOWLEDGEABLE TO RUN THE B USINESS AND HAVING BASIC SENSE AT LEAST, THEREFORE, THE EXPLAN ATION THAT BEING IGNORANT HAVING NO PROPER KNOWLEDGE ABOUT THE EXPLA NATION GIVEN BY THE COUNSEL SEEMS TO BE ILLOGICAL AND IGNORANT OF LAW OR ITS IMPROPER KNOWLEDGE HAVE NO EXCUSE IN LAW. ON THE AFORESAID OBSERVATIONS, WE ARE OF THE CONSIDERE D OPINION THAT THE ASSESSEE HAS FAILED TO OFFER ANY STATUTORY EXPLA NATION ABOUT THE NATURE AND SOURCE OF RS.25,20,000/-. HENCE, WE AFFIRM THE ADDITION OF RS.15,86,371/-. WITH REGARD TO GROUND NOS. 1, 4 & 5 NO SPECIFIC AVERMENTS/ARGUMENT HAVE BEEN MADE BY THE LD. AR, HE NCE, DOES NOT REQUIRE ANY SPECIFIC ADJUDICATION AS THE SAME ARE FORMAL IN NATURE. NOW COMING TO GROUND NO.3 AS TO CONFIRM THE DISALLOWANCE OF RS.50,000/- OUT OF VARIOUS EXPENSES ON ADHOC BASIS AS IT WA S ARGUED ITA NO.675 (ASR)/2013 ASST. YEAR :2009-10 12 BY THE LD. AR THAT TOTAL EXPENSES WHICH IS CLAIMED BY TH E ASSESSEE WAS RS.2 LAKHS APPROXIMATELY WHICH INCLUDES INTEREST OF R S.87,722/- AND DEPRECATION OF RS.38,753/- WHICH IN ACTUAL FREQUENCI ES, TOTAL EXPENSES COME TO RS.78,000/- APPROXIMATELY AND OUT OF T HESE EXPENSES, RS.50,000/- WAS DISALLOWED. WE HAVE GIVEN THOUGHTFUL CONSIDERATION AND GONE THR OUGH WITH THE ASSESSMENT ORDER WHERE IT IS NOT SPECIFIED THAT HOW MU CH EXPENSES HAVE BEEN DEBITED BY THE ASSESSEE QUA TELEPHONE , VEHICLE, STATIONARY, ELECTRICITY ETC. IN P&L ACCOUNT, HOWEVER, A S THE ASSESSEE HAD FAILED TO FURNISH ANY EXPENDITURE VOUCHERS OR OTH ER DOCUMENTARY EVIDENCE AND THE BOOKS OF ACCOUNT,, THEREFORE, THE ASSESSI NG OFFICER DISALLOWED A SUM OF RS.50,000/- IN LUMPSUM OUT OF EXPEN SES FROM THE P&L ACCOUNT OF THE ASSESSMENT YEAR UNDER CONSIDERATION. IT REFLECTS THAT THE ASSESSEE HAS CLAIMED VARIOUS EXPENSES WHICH IS OF RS.20,0524/- WHICH INCLUDES INTEREST OF RS.82,722/- AND DEPRECIATION OF RS.38,753/- AND REMAINING AMOUNT COMES TO RS.74,549/ -ONLY, HOWEVER, THE ASSESSING OFFICER DISALLOWED RS.50,000/- OUT OF THE SAID EXPENSES WHICH IN OUR CONSIDERED OPINION EXCESSIVELY HIGH, THEREFORE, WE RESTRICT THE SAME TO THE TUNE OF RS.7,500/- ONLY, BE ING 10% OF EXPENSES OF RS.75,000/-. HENCE, GROUND NO.3 OF THE APPEAL IS PARTLY ALLOWED . 8. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PART LY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 25.10.2017. SD/- SD/- (T. S. KAPOOR) (N.K.CHOUDHRY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 25.10.2017. /PK/ PS. COPY OF THE ORDER FORWARDED TO: ITA NO.675 (ASR)/2013 ASST. YEAR :2009-10 13 (1) THE ASSESSEE: (2) THE (3) THE CIT(A), (4) THE CIT, (5) THE SR DR, I.T.A.T., TRUE COPY BY ORDER