Sh. Krishan Kumar, Rajpura Town V. ITO, Rajpura

ITA 70/CHANDI/2014

• Counselvise Citation: [2016] 121 COUNSELVISE.COM (IT) 3841 (ITAT-CHANDIGARH)
• Duration Of Justice: 2 year(s) 10 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-12-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 06-09-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 10-01-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: S K MITTAL
• Keywords: Depreciation
• Section: 234B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER ITA NO. 70/CHD/2014 ASSESSMENT YEAR: 2008-09 SHRI KRISHAN KUMAR, VS THE ITO, HOUSE NO. 2445, WARD, ANAND NAGAR, RAJPURA. RAJPURA TOWN. PAN: ANYPK6045Q (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI TEJ MOHAN SING H RESPONDENT BY : SHRI S.K.MITTAL, DR DATE OF HEARING : 01.12.2016 DATE OF PRONOUNCEMENT : 01.12.2016 O R D E R THIS APPEAL BY ASSESSEE HAS BEEN DIRECTED AGAINST THE ORDER OF LD. CIT(APPEALS) PATIALA DATED 29.10.2 013 FOR ASSESSMENT YEAR 2008-09. 2. I HAVE HEARD LD. REPRESENTATIVES OF BOTH THE PAR TIES AND PERUSED THE FINDINGS OF AUTHORITIES BELOW. 3. THE LD. COUNSEL FOR THE ASSESSEE DID NOT PRESS GROUND NO. 1 OF THE APPEAL OF THE ASSESSEE, SAME IS DISMISSED AS NOT PRESSED. GROUND NO. 7 IS GENERAL AND NEED NO ADJUDICATION. 2 4. GROUND NOS. 2 AND 3 READ AS UNDER : 2. WITHOUT PREJUDICE TO THE ABOVE, THE LD. COMMIS SIONER OF INCOME TAX (APPEALS) HAS ERRED IN LAW AS WELL AS ON FACTS IN UPHOLDING THE ADDITION OF RS.26,68,525/- UNDER SECT ION 69A OF THE ACT ON ACCOUNT OF CASH DEPOSITS IN THE BANK ACCOUNT IN UTTER DISREGARD OF THE EXPLANATION RENDERED DURING THE COURSE OF AS SESSMENT PROCEEDINGS WHICH IS ARBITRARY AND UNJUSTIFIED. 3. THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS ) HAS ERRED IN NOT ACCEPTING THE SALES AT RS.29,00,000/- MADE BY T HE ASSESSEE ONLY ON THE BASIS OF THE VAT RETURN WHEREIN LESSER SALES HAD BEEN DECLARED IN UTTER DISREGARD OF THE FACTUAL POSITION WHICH IS ARBITRARY AND UNJUSTIFIED. 5. THE FACTS OF THE CASE ARE THAT THE ASSESSEE DECL ARED INCOME OF RS. 1,40,000/- ON ESTIMATE BASIS INCLUSIV E OF RS. 1,20,000/- AS ESTIMATED INCOME FROM AUTO PARTS BUSINESS AND RS. 20,000/- FROM LABOUR JOB. THE ASSESSEE IS INDIVIDUAL AND IS CARRYING ON BUSINESS OF TRADING IN AUTO PARTS UNDER THE NAME AND STYLE OF M /S UNITED TRADERS AS A PROPRIETOR. REGARDING THE ESTI MATED INCOME FROM AUTO PARTS BUSINESS, THE ASSESSEE IN COLUMN NO. 51 OF ITR 4 DECLARED HIS CASE AS NO ACCOUNTS CASE WITH A GROSS RECEIPTS OF RS. 9 LACS AND NET PROFIT OF RS. 1,20,000/-. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE A.O. OBTAINED THE COPY OF VAT RETURN FROM THE SALES TAX OFFICE WHERE THE DECL ARED SALES IS FOUND TO BE RS.9,65,170/-. ON THE CONTRARY , DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE SUBMITTED THAT THE ACTUAL GROSS RECEIPT IS 29 LACS AND NOT 9 LACS WHICH HAS BEEN WRONGLY WRITTEN IN 3 THE RETURN. HOWEVER, THE ASSESSEE FAILED TO SUBMIT ANY DOCUMENT IN SUPPORT AND ALSO CONTENDED THAT THE PURCHASE FILE AND VAT RETURNS ARE NOT AVAILABLE. NO EVIDENCE WAS SUBMITTED WITH REGARD TO SALES OR PURCHASES MADE. IN THE AIR (ANNUAL INFORMATION RETU RN) INFORMATION AVAILABLE, IT WAS FOUND THAT THE ASSESS EE HAD MADE CASH DEPOSITS OF RS. 37,73,695/- IN HIS SB ACCOUNT. 5(I) ON BEING CONFRONTED, THE ASSESSEE FURNISHED A CASHFLOW CHART DURING THE COURSE OF ASSESSMENT PROCEEDINGS AS REPRODUCED IN PAGE 5 OF THE ASSESSME NT ORDER AND TRIED TO EXPLAIN THE SOURCE OF DEPOSIT FI RSTLY FROM SALES OF RS.29 LACS .HOWEVER AS ALREADY DISCUS SED ABOVE, THE SALES ARE FOUND TO BE RS.9,65,170/- AND NOT 29 LACS. FURTHER, THE ASSESSEE TRIED TO EXPLAIN THE SOURCE OF DEPOSIT FROM WITHDRAWALS FROM ACCOUNT AT RS.5,54,900/-, AND ADVANCES FROM PARTIES AT RS.1,57,700/-. HOWEVER, NO EVIDENCE IN SUPPORT OF T HE SAME WERE FILED DURING THE COURSE OF ASSESSMENT PROCEEDINGS. THEREFORE, THE A.O. REJECTED THIS PART OF THE EXPLANATION. IN THE CASH FLOW STATEMENT, THE ASSESSEE HAS FURTHER SHOWN INCREASE IN CREDITORS AT RS.30,000/-, ADDITION OF INCOME OF RS.1,40,000/- AN D DEPRECIATION OF RS.500/-. THE A.O. HELD THAT NONE O F THESE HEADS ACTUALLY GENERATES ANY CASHFLOW AND, THEREFORE, CAN'T BE CONSIDERED AS AN EXPLANATION FO R SOURCE OF THE DEPOSIT MADE IN THE BANK. THE ASSESSE E 4 HAS FURTHER SHOWN UNSECURED LOAN OF RS.1,40,000/-. IN THIS CONNECTION, IN PARA 5.5 OF THE ASSESSMENT ORDE R, THE A.O. HAS NOTED THAT COMPLETE PARTICULARS OF THE SE LOANS HAVE BEEN GIVEN AND, THEREFORE, CREDIT OF THE SAME IS ALLOWED. THEREAFTER, THE A.O. ACCEPTED SOURCE OF RS.9,65,170/- (SALES) AND 1,40,000/- (UNSECURED LOA NS) AND ADDED THE BALANCE AMOUNT OF RS. 26,68,525/- U/S 69A OF THE IT ACT,1961. 6. THE ASSESSEE CHALLENGED THE ADDITION BEFORE LD. CIT(APPEALS) AND REITERATED THE SUBMISSIONS MADE BEFORE ASSESSING OFFICER. THE LD. CIT(APPEALS), HO WEVER, NOTED THAT ASSESSEE HAS FAILED TO SUBMIT ANY EVIDEN CE IN SUPPORT OF HIS CONTENTION. RATHER, THE SUBMISSION REGARDING SALES AT RS. 29 LACS IS FOUND TO BE INCOR RECT AND FALSE IN VIEW OF THE VAT RETURN SUBMITTED BY TH E ASSESSEE. THE LD. CIT(APPEALS), ACCORDINGLY, DISMI SSED THIS GROUND OF APPEAL OF THE ASSESSEE. 7. AFTER CONSIDERING RIVAL SUBMISSIONS, I AM NOT INCLINED TO INTERFERE WITH THE ORDERS OF THE AUTHOR ITIES BELOW. THE ASSESSEE FILED RETURN OF INCOME CLAIMIN G HIS CASE AS NO ACCOUNT CASE DESPITE THE FACT THAT ASS ESSEE WAS REQUIRED TO MAINTAIN BOOKS OF ACCOUNT AS PER LA W. THE ASSESSING OFFICER OBTAINED COPY OF VAT RETURN F ROM THE SALES TAX OFFICE WHERE THE ASSESSEE DECLARED SA LES AT RS. 9,65,170/-. THE ASSESSEE, HOWEVER, CLAIMED BEFORE ASSESSING OFFICER THAT ACTUAL GROSS RECEIPTS ARE RS. 29 LACS AND NOT RS. 9 LACS WHICH HAVE BEEN WRON GLY 5 WRITTEN IN THE RETURN. THE ASSESSEE, HOWEVER, FAIL ED TO SUBMIT ANY DOCUMENT IN SUPPORT AND DID NOT FILE COP Y OF THE VAT RETURN BEFORE THE ASSESSING OFFICER. NO EVIDENCE WAS SUBMITTED WITH REGARD TO SALES OR PURCHASES MADE. THE ASSESSEE MADE CASH DEPOSIT OF RS. 37,73,695/- IN HIS SB ACCOUNT, HOWEVER, ASSESSEE FA ILED TO EXPLAIN ANY SOURCE OF SUCH DEPOSIT IN THE BANK ACCOUNT. WHATEVER CONTENTION WAS RAISED BY ASSESSE E, WERE FOUND TO BE FALSE AND FABRICATED. THE CLAIM O F THE ASSESSEE OF ESTIMATED SALES OF RS. 29 LACS WAS NOT SUPPORTED BY ANY EVIDENCE OR MATERIAL ON RECORD. T HE ASSESSEE IN THE IT RETURN AND IN THE VAT RETURNS, H AVE NOT DISCLOSED GROSS SALES OF RS. 29 LACS. NO EVIDE NCE WAS FILED BEFORE THE AUTHORITIES BELOW IN SUPPORT O F ANY OF THE EXPLANATION, THEREFORE, SOURCE OF THE CASH DEPOSITED IN THE BANK ACCOUNT REMAINED UNEXPLAINED. EVEN BEFORE ME, NO EVIDENCE OF ANY SOURCE OF BANK DEPOSIT HAS BEEN FURNISHED. IN THE ABSENCE OF ANY EVIDENCE OR MATERIAL ON RECORD TO EXPLAIN THE CASH DEPOSITS IN THE BANK ACCOUNT OF THE ASSESSEE, I AM NOT INCLINED TO INTERFERE WITH THE ORDERS OF AUTHORITIE S BELOW. THESE GROUNDS, THEREFORE, STAND DISMISSED. 8. GROUND NO. 4 READS AS UNDER : 4. THAT THE LD. COMMISSIONER OF INCOME TAX (APPEAL S) HAS FURTHER ERRED IN LAW AS WELL AS ON FACTS IN UPHOLDING THE A DDITION OF RS.7,21,958/- ON ACCOUNT OF ALLEGED LESSER CLOSING STOCK DECLARED AT RS.4,30,000/- IN INCOME TAX RETURN AS AGAINST RS.L 1,51,958/- DECLARED IN VAT RETURN WHICH IS ARBITRARY & UNJUSTIFIED. 6 9. IT IS NOTED BY THE AUTHORITIES BELOW THAT ASSESS EE HAS SHOWN CLOSING STOCK OF RS. 4,30,000/-IN COLUMN NO. 6 OF THE RETURN OF INCOME. HOWEVER, IN THE VAT RET URN, SAME IS SHOWN AT RS. 11,51,958/-. THE ASSESSING OFFICER, THEREFORE, ADDED RS. 7,21,958/- TO THE INC OME OF THE ASSESSEE ON THE PREMISE THAT ASSESSEE HAS SHOWN LESSER CLOSING STOCK, THEREBY REDUCED THE PROFIT. THE ASSESSEE DID NOT SUBMIT ANY EVIDENCE BEFORE AUTHORI TIES BELOW THEREFORE, ADDITION OF RS. 4,30,000/- WAS MAD E. THE ASSESSEE DID NOT EXPLAIN THE DISCREPANCY FOUND VIS- -VIS VAT RETURN THEREFORE, LD. CIT(APPEALS) DISMIS SED THIS GROUND OF APPEAL OF THE ASSESSEE. THE LD. COU NSEL FOR THE ASSESSEE DID NOT POINT OUT ANY INFIRMITY IN THE ORDER OF THE AUTHORITIES BELOW IN MAKING THIS ADDIT ION. IN THE ABSENCE OF ANY SPECIFIC ARGUMENT OR MATERIAL TO POINT OUT ANY ERROR IN THE ORDERS OF AUTHORITIES BE LOW, I AM NOT INCLINED TO INTERFERE WITH THE ORDERS OF AUTHORITIES BELOW. THIS GROUND OF APPEAL OF THE AS SESSEE IS DISMISSED. 10. GROUND NO. 5 READS AS UNDER : THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS FURTHER ERRED IN LAW AS WELL AS ON FACTS IN UPHOLDING THE A DDITION OF RS.80,000/- ON ACCOUNT OF ALLEGED LESSER LABOUR JOB DECLARED WHICH IS ARBITRARY & UNJUSTIFIED. 11. THE FACTS OF THE CASE ARE THAT THE ASSESSEE HAS SHOWN ESTIMATED INCOME FROM LABOUR JOB AT RS. 20,00 0/- 7 IN THE RETURN OF INCOME WHEREAS THE SAME IS DECLARE D AT RS. 1 LAC IN THE VAT RETURN. THE ASSESSING OFFICER , THEREFORE, ADDED RS. 80,000/- TO THE RETURNED INCOM E ON ACCOUNT OF UNDISCLOSED INCOME. THE ASSESSEE FAILED TO JUSTIFY ANY CONTENTION BEFORE LD. CIT(APPEALS), THE REFORE, THIS GROUND OF APPEAL OF THE ASSESSEE WAS DISMISSED . 12. THE LD. COUNSEL FOR THE ASSESSEE DID NOT POINT OUT ANY ERROR IN THE ORDERS OF AUTHORITIES BELOW THEREF ORE, IN THE ABSENCE OF ANY ARGUMENT OR MATERIAL ON RECORD, I AM NOT INCLINED TO INTERFERE WITH THE ORDERS OF AUTHOR ITIES BELOW. THIS GROUND OF APPEAL OF THE ASSESSEE IS ACCORDINGLY, DISMISSED. 13. ON GROUND NO. 6, ASSESSEE CHALLENGED THE CHARGI NG OF INTEREST UNDER SECTION 234B OF THE INCOME TAX AC T, WHICH IS MANDATORY AND CONSEQUENTIAL AND HAVE NOT BEEN ARGUED BY LD. COUNSEL FOR THE ASSESSEE. THIS GROUND OF APPEAL OF THE ASSESSEE IS ACCORDINGLY, DISMISSED. 14. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMISSE D. ORDER PRONOUNCED IN THE OPEN COURT. SD/- (BHAVNESH SAINI) JUDICIAL MEMBER DATED : IST DECEMBER,2016. POONAM COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. THE CIT,DR ASSISTANT REGISTRAR, ITAT CHANDIGARH