SMT OM KANWR, Jaipur V. ITO, Jaipur

ITA 7/JPR/2017

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 5571 (ITAT-JAIPUR)
• Duration Of Justice: 2 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-02-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2007-2008
• Appeal Filed On: 03-12-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: R A VERMA CIT DHK
• Keywords: Reopening of assessment; Unexplained cash credit; Competent authority
• Section: 143(3); 147; 68; 148

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES (SMC), JAIPUR JH HKKXPAN] YS[KK LNL; ] DS LE{K BEFORE: SHRI BHAGCHAND, ACCOUNTANT MEMBER VK;DJ VIHY LA-@ ITA NO. 07/JP/2017 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2007-08 OM KANWAR, P/O M/S JAIPUR ENGINEERS, E- 295, ROAD NO. 14, VKI AREA, JAIPUR. CUKE VS. INCOME TAX OFFICER, WARD 4(2), JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AUDPK 1228 P VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : NONE (NOTICE RETURNED UNSERVED) JKTLO DH VKSJ LS@ REVENUE BY : SHRI R.A. VERMA (ADDL.CIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 28/02/2017 MN?KKS'K.KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 28/02/2017 VKNS'K@ ORDER PER: BHAGCHAND, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER DATED 26/09/2016 PASSED BY THE LD CIT(A)-5, JAIPUR FOR TH E A.Y. 2007-08, WHEREIN THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL: 1. THAT THE LD. CIT(A) HAS ERRED IN HOLDING THAT THE ASSESSING OFFICER WAS JUSTIFIED IN REOPENING THE CAS E OF THE APPELLANT. THE SAID ACTION IS ILLEGAL AND UNJUSTIFIED. THE REOPENING OF ASSESSMENT ITA 07/JP/2017_ OM KANWAR VS ITO 2 PROCEEDINGS WERE INCORRECTLY TAKEN IN THIS CASE AND THE ORDER PASSED U/S 148 IS ILLEGAL. 2. THAT THE LD. CIT(A) HAS ERRED IN HOLDING THAT THE ASSESSEE HAS NOT BEEN ABLE TO SUBSTANTIATE THE OPENING CASH BALANCE OF RS. 62,500/- IN THE CASE FLOW STATEMENT. THE SAID FINDING IS ILLEGAL. 3. THAT THE LD. CIT(A) HAS ERRED IN HOLDING THAT THE ASSESSEE HAS NOT BEEN ABLE TO ESTABLISH THE CREDITWORTHINESS OF THE CREDITORS SHRI HANUMAN SAHAI JAT RS. 19,200/-, SHRI GAJANAND JANGIR RS. 18,000/- AND SMT. REKHA DEVI PAREEK RS. 17,400/-. HENCE, THESE CASH CREDITS ARE EXPLAINED WITHIN THE MEANING OF SECTION 68 OF THE IT ACT. THE SAID FINDING IS ILLE GAL AND UNJUSTIFIED. 4. THAT THE LD. CIT(A) HAS ERRED IN HOLDING THAT THE ASSESSEE HAD FAILED TO EXPLAIN THE SOURCE OF CAPITA L OF RS. 1,61,000/- INTRODUCED IN THE FIRM M/S JAIPUR ENGINEERS AND CONFIRMING THE ADDITION MADE BY THE ASSESSING OFFICER. THE ADDITION MADE TO THE INCOME IS ILLEGAL, UNJUSTIFIED AND EXCESSIVE. 5. THAT THE LD. CIT(A) HAS ERRED IS NOT ALLOWING CREDI T EVEN FOR THE INCOME WHICH HAS BEEN DECLARED BY THE ASSESSEE DURING THE YEAR UNDER ASSESSMENT AND ACCEPTED BY THE LOWER AUTHORITIES. THE SAID ACTION IS ILLEGAL AND UNJUSTIFIED. 2. NONE ATTENDED ON BEHALF OF THE ASSESSEE. LD. SR. DR WAS HEARD. AFTER HEARING THE LD. SR. DR, THE APPEAL IS BEING DECIDED . 3. GROUND NO. 1 OF THE APPEAL IS REGARDING REOPENIN G OF ASSESSMENT PROCEEDINGS BY INVOKING THE PROVISIONS OF SECTION 1 48 OF THE INCOME TAX ITA 07/JP/2017_ OM KANWAR VS ITO 3 ACT, 1961 (IN SHORT THE ACT). THE LD. CIT(A) HAS DIS MISSED THIS GROUND BY OBSERVING AS UNDER:- 2.3. I HAVE CONSIDERED THE FACTS OF THE CASE, THE ASSESSMENT ORDER AND THE SUBMISSIONS OF THE APPELLANT. IN THIS CASE, THE LD. CIT(A) WHILE DECIDING THE CASE OF M/S JAIPU R ENGINEERS FOR A.Y. 2007-08 HAS ONLY DIRECTED THE AO OF M/S JAIPUR ENGINEERS TO INTIMATE THE AO OF THE APPE LLANT TO TAKE REMEDIAL ACTION U/S 147 IF SO WARRANTED. THIS IS NOT A DIRECTION TO THE A.O. OF THE APPELLANT TO REO PEN CASE OF THE APPELLANT. THE CIT(A) HAS JUST GIVEN HIS OPINION THAT APPLICABILITY OF SECTION 148 NEEDS TO BE EXAMINED IN THE CASE OF APPELLANT APROPOS SOURCES I N HANDS OF THE APPELLANT FOR 1,61,000/-. IN THE ORDER U/S 147 R.W.S. 143(3) IN CASE OF APPELLANT ALSO, IT IS MENTIONED THAT CIT(A) HAS OPINED THAT AMOUNT OF RS. 1,61,000/- WAS ASSESSABLE IN HANDS OF THE ASSESSEE. IT IS NOWHERE MENTIONED THAT THERE IS SUCH DIRECTION BY CIT(A). THE AO, HOWEVER, TOOK REFERENCE FROM THE ABOV E INFORMATION AND APPLIED HIS MIND AND RECORDED REASO NS U/S 148 AFTER ARRIVING AT HIS OWN SATISFACTION AND INITIATED THE PROCEEDINGS U/S 147 AFTER APPROVAL OF THE COMPE TENT AUTHORITY. CONSIDERING THE ABOVE FACTS, THE REOPENI NG OF THE CASE OF THE APPELLANT IS IN ORDER AND ACCORDING LY, THE FIRST GROUND OF THE APPEAL IS DISMISSED. 3.1 FROM PERUSAL OF RECORD, I HAVE FOUND THAT THERE IS NO CONTRARY MATERIAL WHATEVER REPORTED BY THE LD. CIT(A) IN HIS O RDER, THEREFORE IN ITA 07/JP/2017_ OM KANWAR VS ITO 4 ABSENCE OF ANY MATERIAL AGAINST THE FINDING OF THE LD. CIT(A), I HAVE ALTERNATE BUT TO CONCUR WITH THE FINDING OF THE LD. CIT(A), ACCORDINGLY, THIS GROUND OF REOPENING OF ASSESSMENT PROCEEDINGS IS DI SMISSED AS THERE WAS SUFFICIENT MATERIAL/INFORMATION AVAILABLE WITH THE A SSESSING OFFICER TO RECORD HIS SATISFACTION FOR INITIATING THE PROCEEDINGS U/S 147 OF THE ACT AFTER APPROVAL OF THE COMPETENT AUTHORITY. THEREFORE, I UPHOLD THE ORDER OF THE LD. CIT(A) ON THIS ISSUE. ACCORDINGLY, THIS GROUND O F ASSESSEES APPEAL IS DISMISSED. 4. GROUNDS NO. 2 TO 5 OF THE APPEAL ARE AGAINST SUS TAINING THE ADDITION OF RS. 62,500/-, TO ESTABLISH THE CREDITWORTHINESS OF THE CREDITORS AND TO EXPLAIN THE SOURCE OF CAPITAL OF RS. 1,61,000/- INT RODUCED IN THE FIRM M/S JAIPUR ENGINEERING. 5. THE LD. CIT(A) HAS DECIDED THESE ISSUES AGAINST TH E ASSESSEE BY HOLDING AS UNDER:- 2.3. I HAVE CONSIDERED THE FACTS OF THE CASE, THE ASSESSMENT ORDER AND THE SUBMISSIONS OF THE APPELLANT. THE AO H AS MADE ADDITION OF RS. 1,61,000/- BY TREATING HER INVESTMENT AS CAPITAL IN M/S JAIPUR ENGINEERS, AS UNEXPLAINED CASH. THE CAPITAL CONTRIBUTION AMOUNT OF RS. 1,61,000/- HAS BEEN INTRODUCED IN CASH. 2.3.1 DURING THE APPELLATE PROCEEDINGS, THE APPELLA NT SUBMITTED CASH FLOW STATEMENT OF SMT. OM KANWAR. THERE IS AN OPENING BALANCE OF RS. 62,500/- WHICH IS ITA 07/JP/2017_ OM KANWAR VS ITO 5 EXPLAINED BY THE APPELLANT AS HER SAVINGS OVER LAST FEW YEARS EARNED BY PETTY JOB WORK OF SAREES BUT THE ASSESSEE FAILED TO SUBMIT ANY DOCUMENTARY EVIDENCE IN SUPPORT OF EARNING SUCH INCOME, INCLUDING EXPENSES INCURRED AND INVESTMENT IN THE PROCESS AS WELL AS I. T. RETURNS SHOWING SUCH INCOME OR EVEN BANK ACCOUNTS IN WHICH SUCH INCOME WAS CLAIMED TO BE CREDITED FROM YEA R TO YEAR. ACCORDINGLY, THE OPENING CASH BALANCE OF R S. 62,500/- IS NOT SUBSTANTIATED. 2.3.2 THE APPELLANT ALSO SUBMITTED COMPUTATION OF IN COME OF THREE CASH CREDITORS NAMELY REKHA, HANUMAN SAHAI JA T AND GAJANAND JANGID BUT AGAIN NO BANK STATEMENT HAV E BEEN SUBMITTED IN THIS REGARD. THE APPELLANT SUBMIT TED THAT OUT OF THE ABOVE CREDITORS, ONLY SMT. REKHA HA S FILED HER ITR, THAT TOO SHOWING INCOME OF ONLY RS. 97,370 AND PAYING NO TAXES THEREON. THE REST OF THE CREDITORS HAVE NOT FILED ANY ITR FOR A.Y. 2007-08. TH E ASSESSEE FAILED TO PRODUCE THE SAID CREDITORS. ALSO THE AMOUNTS CLAIMED TO BE RECEIVED FROM ALL THE CREDITO RS IS IN CASH AND THAT TOO JUST BELOW RS. 20,000/- PURPORT EDLY TO AVOID THE PROVISIONS OF SEC. 269SS AND 269TT. THE REPAYMENT IS ALSO IN CASH AND NO INTEREST HAS BEEN PAID. THUS, THE VERACITY OF THESE TRANSACTIONS IS NOT PROV ED. SIMILARLY, CREDITWORTHINESS OF CREDITORS IS NOT PROV ED. HENCE, THESE CASH CREDITS ARE UNEXPLAINED WITHIN THE MEANING OF SECTION 68. 2.3.3 FURTHER THE APPELLANT HAS ALSO SUBMITTED THAT THE ITA 07/JP/2017_ OM KANWAR VS ITO 6 APPELLANT WAS NEITHER MAINTAINING ANY BANK ACCOUNT N OR FILED ANY ITR FOR ANY YEAR BEFORE THE YEAR UNDER CONSIDERATION. 2.3.4 FURTHER THE ITR FILED FOR A.Y. 2007-08 SHOWS INCOME BELOW TAXABLE LIMIT AND HAS APPARENTLY BEEN FILED ON LY AS A CAPITAL BUILD UP EXERCISE. THE ASSESSEE FAILED TO PRODUCE ANY EVIDENCE REGARDING CLAIMED OPENING CASH BALANCE OF RS. 62,500/-. FURTHER THE CASH FLOW STATE MENT SUBMITTED BY HER SHOWING SUCH OPENING BALANCE IS NOT A PART OF ANY IT RETURN FILED BY HER. IN FACT, SHE HA S NEVER FILED AY BALANCE SHEET WITH THE I.T. RETURN. THEREFOR E THE SAID CASH FLOW STATEMENT APPEARS TO BE AN AFTERTHOUGHT. THE FURTHER SOURCE AMOUNT OF RS. 54,60 0 CLAIMED TO BE LOANS FROM ABOVE MENTIONED 3 CREDITOR S IS ALSO NOT PROVED FOR REASONS STATED EARLIER. MOREOVE R, THE JOB WORK RECEIPTS CLAIMED BY HER ARE NOT SUPPORTED B Y ANY EVIDENCE AND APPEAR TO BE A CAPITAL BUILD UP EXERCISE, MORE SO SINCE NO TAX HAS EVER BEEN PAID B Y HER. 2.3.5 CONSIDERING THE ABOVE FACTUAL MATRIX, IT IS H ELD THAT THE APPELLANT HAS FAILED TO EXPLAIN THE SOURCE OF CAPIT AL OF RS. 1,61,000/-INTRODUCED INTO THE FIRM, JAIPUR ENGI NEERS. THEREFORE, THE ADDITION OF RS. 1,61,000/- AS UNEXPL AINED CASH CREDIT IN THE HANDS OF THE ASSESSEE IS CONFIRM ED. 6. FROM PERUSAL OF RECORD, I HAVE FOUND THAT THERE IS NO CONTRARY MATERIAL WHATEVER REPORTED BY THE LD. CIT(A) IN HIS O RDER, THEREFORE IN ITA 07/JP/2017_ OM KANWAR VS ITO 7 ABSENCE OF ANY MATERIAL AGAINST THE FINDINGS OF THE LD. CIT(A), I HAVE NO ALTERNATE BUT TO CONCUR WITH THE FINDINGS OF THE LD. CIT(A), THEREFORE, I UPHOLD THE ORDER OF THE LD. CIT(A) ON THESE ISSUES. ACCORDINGLY, THESE GROUNDS OF ASSESSEES APPEAL ARE DISMISSED. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DIS MISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 28/02/2017. SD/- HKKXPAN (BHAGCHAND) YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 28 TH FEBRUARY, 2017 *RANJAN VKNS'K DH IZFRFYFI VXZSFKR @ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ @ THE APPELLANT- SMT. OM KANWAR, JAIPUR. 2. IZR;FKHZ @ THE RESPONDENT- THE ITO, WARD 4(2), JAIPUR. 3. VK;DJ VK;QDR @ CIT 4. VK;DJ VK;QDRVIHY @ THE CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ @ DR, ITAT, JAIPUR 6. XKMZ QKBZY @ GUARD FILE (ITA NO. 07/JP/2017) VKNS'KKUQLKJ @ BY ORDER, LGK;D IATHDKJ @ ASST. REGISTRAR