Sri M. Venkatesh, Bangalore V. DCIT, Bangalore

ITA 803/BANG/2009

• Counselvise Citation: [2009] 115 COUNSELVISE.COM (IT) 0633 (ITAT-BANGALORE)
• Duration Of Justice: 3 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-11-2009
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 18-11-2009
• Assessment Year: 2005-2006
• Appeal Filed On: 10-08-2009
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: V S SREELEKHA
• Assessee Lawyers: R CHANDRASHEKAR
• Keywords: Unexplained investment; Principle of natural justice; TDS; Set aside
• Section: 142(1); 69; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : BANGALORE BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER AND SHRI AKBER BASHA, ACCOUNTANT MEMBER ITA NO.803/BANG/2009 ASSESSMENT YEAR : 2005-06 SHRI M.L. VENKATESH, NO.252, 13 TH MAIN, I STAGE, I PHASE, GOKUL, BANGALORE. : APPELLANT VS. THE DY. COMMISSIONER OF INCOME TAX (TDS), CIRCLE 18(1), BANGALORE. : RESPONDENT APPELLANT BY : SHRI R. CHANDRASHEKAR RESPONDENT BY : SMT. V.S. SREELEKHA O R D E R PER AKBER BASHA, ACCOUNTANT MEMBER THIS APPEAL BY THE ASSESSEE IS AGAINST THE ORDER OF THE CIT(APPEALS)-IV, BANGALORE DATED 24.6.09 AND THE OR DER OF THE ASSESSING OFFICER U/S .144 OF THE INCOME-TAX ACT FOR THE ASSE SSMENT YEAR 2005-06. 2. THE FOLLOWING GROUNDS OF APPEAL ARE RAISED: (1) THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS ) ERRED IN CONFIRMING THE ASSESSMENT MADE U/S. 144 OF THE A CT, DETERMINING THE INCOME OF THE APPELLANT AT RS.48,23 ,926 BASED ON THE DEPOSITS MADE IN THE BANK ACCOUNT. ITA NO.803/BANG/09 PAGE 2 OF 5 (2) THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS ) ERRED IN NOT CONSIDERING THE RETURN OF INCOME FILED BY TH E APPELLANT ON 31-3-2006 WHICH WAS PRIOR TO THE ISSUE OF NOTICE U/ S. 142(1) OF THE ACT. (3) THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS ) ERRED IN COMING TO THE CONCLUSION THAT THE APPELLANT HAS NOT DISCLOSED TRUE AND CORRECT INCOME, AS THE INCOME FILED BY THE APPELLANT WAS NEVER CONSIDERED BY EITHER LEARNED COMMISSIONER OF INCOME TAX (APPEALS). (4) THE LEARNED COMMISSIONER HAVING ACCEPTED THAT T HE APPELLANT HAS TRANSACTIONS WITH SHARE BROKERS, OUGH T NOT HAVE CONFIRMED THE DETERMINATION OF INCOME BASED ON THE DEPOSITS MADE IN THE BANK AND SHOULD HAVE DIRECTED THE LEARN ED ASSESSING AUTHORITY TO CONSIDER THE RETURN FILED ON 31-3-2006 AND DETERMINE THE INCOME OF THE APPELLANT. (5) THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL S) ON GUESS WORK AND SURMISES AFFIRMED THE ORDER OF THE A SSESSMENT MADE U/S. 144 OF THE ACT. (6) THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL S) HAS FAILED TO CONSIDER THE EXPLANATION FILED BY THE APP ELLANT FOR THE RECEIPT OF RS.17,76,550/- WHICH IS THE CLEARING OF CHEQUES ISSUED BY THE SHARE BROKERS. (7) THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS ) DID NOT APPRECIATE THE EXPLANATION IN REGARD TO RS.2,57 ,234/- WHICH WAS THE COMMISSION ADMITTED IN THE RETURN OF INCOME . (8) THE APPELLANT SUBMITS THAT IT HAS EXPLAINED IN WRITTEN SUBMISSIONS THE TOTAL DEPOSITS INTO THE BANK. (9) THE LEARNED RESPONDENT ERRED IN COMPLETING THE ASSESSMENT U/S. 144 OF THE ACT, TREATING THE ENTIRE DEPOSITS MADE IN THE BANK ACCOUNT AS INCOME OF THE APPELLANT. (10) THE ORDER OF ASSESSMENT MADE IS OPPOSED TO PRI NCIPLES OF NATURAL JUSTICE. 3. THE BRIEF FACTS OF THE CASE ARE THAT BASED ON AI R INFORMATION PERTAINING TO DEPOSIT IN THE SB ACCOUNT, A NOTICE U /S. 142 DATED 13.9.07 WAS ISSUED TO THE ASSESSEE CALLING FOR RETURN OF IN COME ALONG WITH DETAILS OF ITA NO.803/BANG/09 PAGE 3 OF 5 DEPOSITS IN THE SB ACCOUNT. THE ASSESSEE FAILED TO REPLY TO THIS NOTICE AND REMINDERS OF THE DEPARTMENT. A SHOW CAUSE NOTICE W AS ISSUED IN THE FORM OF PROPOSAL TO ASSESS THE INCOME OF THE ASSESSEE AS TO WHY ASSESSMENT SHOULD NOT BE COMPLETED U/S. 144 ON THE BASIS OF TH E INFORMATION AVAILABLE ON RECORD. EVEN THE ASSESSEE FAILED TO REPLY TO TH E PROPOSAL. HENCE THE AO AFTER GIVING SUFFICIENT OPPORTUNITY, PASSED AN O RDER U/S. 144 AND TREATED THE DEPOSIT IN THE SB ACCOUNT AS UNEXPLAINED INVEST MENT U/S. 69 OF THE ACT AND ASSESSED TO TAX RS.48,23,925. AGGRIEVED BY THE ORDER, THE ASSESSEE FILED AN APPEAL BEFORE THE CIT(APPEALS) AND SUBMITT ED THAT THE ASSESSEE FILED RETURN OF INCOME ON 31.3.06 DECLARING INCOME OF RS.97,870 AND THE SAME WAS NOT CONSIDERED BY THE ASSESSING OFFICER. 4. THE CIT(APPEALS) ON ELABORATE FINDINGS IN PARA 9 OF HIS ORDER, CONFIRMED THE ACTION OF THE AO AND THUS DISMISSED T HE APPEAL OF THE ASSESSEE. THE CIT(APPEALS) AFTER CONSIDERING THE F ACTS AND CIRCUMSTANCES, HELD THAT THE ASSESSEE HAS NOT DISCL OSED TRUE AND CORRECT INCOME FOR THE ASSESSMENT YEAR UNDER CONSIDERATION IN HIS RETURN OF INCOME AND ALSO HELD THAT IF AT ALL, RETURN OF INCOME HAS TO BE ACCEPTED AS CORRECT AND TRUE, THE ASSESSEE SHOULD HAVE COOPERATED WITH THE AO AND FURNISHED THE DETAILS OF BANK STATEMENT ETC. WITH THE AO. HE ALSO HELD THAT THE ASSESSEE HAS NOTHING TO PROVE THAT THE ASSESSEE HAS SHOWN ALL THE CASH RECEIPTS, COMMISSION, ETC. AND PAID TAXES ACCORDING LY AND HELD THAT THE AO WAS RIGHT IN ADDING THE INCOME AS UNEXPLAINED INVES TMENT U/S. 69 OF THE ACT. AGGRIEVED, THE ASSESSEE IS BEFORE US. 5. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE LD. CIT(APPEALS) HAVING ACCEPTED THAT THE ASSESSEE HAS TRANSACTION W ITH THE SHARE BROKER, ITA NO.803/BANG/09 PAGE 4 OF 5 HE SHOULD NOT HAVE CONFIRMED THE SAID UNEXPLAINED I NVESTMENT IN THE HANDS OF THE ASSESSEE BASED ON THE DEPOSITS MADE IN THE B ANK, INSTEAD HE SHOULD HAVE DIRECTED THE AO TO CONSIDER THE RETURN FILED O N 31.3.06 AND DETERMINE THE INCOME OF THE ASSESSEE ACCORDINGLY. HE SUBMITT ED THAT THE ASSESSMENT WAS MADE IS OPPOSED TO THE PRINCIPLES OF NATURAL JUSTICE. HENCE, THE CASE MAY BE RESTORED BACK TO THE FILE OF THE AO ON THE GROUND OF PRINCIPLES OF NATURAL JUSTICE. HE MADE ELABORAT E SUBMISSIONS IN THE GROUNDS OF APPEAL AND SUBMITTED THAT BOTH LOWER AUT HORITIES ORDERS MAY BE SET ASIDE AND REMIT THE MATTER BACK TO THE AO FOR F RESH CONSIDERATION. 6. THE LD. DR, SMT. V.S. SREELEKHA, SUBMITTED THAT THE ASSESSEE EVEN BEFORE THE CIT(APPEALS) HAS NOT FURNISHED THE REQUI RED DETAILS TO DETERMINE THE TAXABLE INCOME OF THE ASSESSEE. EVEN THE ASSES SEE HAS NOT GIVEN DETAILS OF BANK STATEMENTS ETC. OR DID NOT COMPLY W ITH THE OPPORTUNITIES GIVEN TO HIM BEFORE THE AO. THERE IS NOTHING TO PRO VE BY THE ASSESSEE THAT HE HAS SHOWN ALL THE RECEIPTS, CASH DEPOSITS, COMMI SSION, ETC. IN THE RETURN AND PAID TAXES ACCORDINGLY. HENCE, CIT(APPEALS) J USTIFIED IN CONFIRMING THE ORDERS OF THE AO AND THE SAME MAY BE CONFIRMED. 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE R ECORDS. WE FIND THAT THE AO HAD GIVEN SUFFICIENT OPPORTUNITY TO THE ASSESSEE TO PROVE THAT THE SAID DEPOSIT IS NOT UNEXPLAINED INVESTMENT OF T HE ASSESSEE. THE CIT (APPEALS) ALSO, IN HIS FINDINGS, POINTED OUT VARIOU S DIFFERENCES IN THE RETURN FILED BY THE ASSESSEE AND THE ACTUAL AMOUNT OF COMM ISSION RECEIVED BY THE ASSESSEE. THE ASSESSEE NOT SHOWN THE DEPOSITS MADE TO MOTILAL OSWAL AND COMMISSION RECEIVED IN THE RETURN OF INCOME. T HE ASSESSEE SHOULD HAVE FILED THE RETURN OF INCOME BEFORE THE DUE DATE PRESCRIBED WHICH WAS ITA NO.803/BANG/09 PAGE 5 OF 5 NOT DONE BY THE ASSESSEE AND ALSO THE ASSESSEE COU LD NOT SUBSTANTIATE CONVINCINGLY, THAT THE RETURNED INCOME BY THE ASSES SEE IS TRUE AND CORRECT. IF THE RETURN FILED BY THE ASSESSEE IS TO BE ACCEPT ED AS CORRECT AND TRUE, THE ASSESSEE SHOULD CO-OPERATED WITH THE AO AND SHOULD HAVE FURNISHED THE REQUISITE DETAILS BEFORE HIM TO ACCEPT THE RETURN F ILED. HE FAILED TO DO SO. UNDER THIS CIRCUMSTANCES, WE DO NOT HAVE ANYTHING T O ADD, EXCEPT TO CONFIRM THE CIT(APPEALS) ORDER. MOREOVER, IN OUR C ONSIDERED OPINION, WE DO NOT SEE ANY MERIT IN REMITTING THE MATTER TO THE FILE OF THE AO ON THE FACTS AND CIRCUMSTANCES OF THIS CASE. IN VIEW OF THE ABO VE, WE DO NOT SEE ANY INFIRMITY IN THE ORDER OF THE CIT(APPEALS), THE SAM E IS CONFIRMED. 8. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS DISMISSED. PRONOUNCED IN THE OPEN COURT ON THIS 20 TH DAY OF NOVEMBER, 2009. SD/- SD/- (SHAILENDRA KUMAR YADAV ) (AKBER BAS HA ) JUDICIAL MEMBER ACCOUNTANT MEMBER BANGALORE, DATED, THE 20 TH NOVEMBER, 2009. DS/- COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE (1+1) BY ORDER ASSISTANT REGISTRAR ITAT, BANGALORE.