Ramesh J. Warade, Pune V. Income-tax Officer, Ward - 9 (4), Pune

ITA 832/PUN/2019

• Counselvise Citation: [2022] 104 COUNSELVISE.COM (IT) 1480 (ITAT-PUNE)
• Duration Of Justice: 3 year(s) 4 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-10-2022
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 27-09-2022
• Assessment Year: 2015-2016
• Appeal Filed On: 28-05-2019
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Additional evidence; Cost of acquisition; Bogus
• Section: 143(3); 133(6)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH “B”, PUNE BEFORE SHRI S. S. GODARA, JUDICIAL MEMBER AND SHRI G. D. PADMAHSHALI, ACCOUNTANT MEMBER आयकर अपील सं. / ITA No.832/PUN/2019 िनधाᭅरण वषᭅ / Assessment Year: 2015-16 Ramesh J. Warade, RL 156, Shanikrupa, Sahunagar, Chinchwad, Pune- 411044. PAN : AALPW9532E Vs. ITO, Ward- 9(4), Pune. Appellant Respondent आदेश / ORDER PER S. S. GODARA, JM: This assessee’s appeal for assessment year 2015-16 arises against the CIT(A)-6, Pune’s order dated 11.04.2019 passed in case no. PN/CIT(A)-6/ITO Wd. 9(4)/10412/2017-18 involving proceedings u/s 143(3) of the Income Tax Act, 1961; in short “the Act”. Heard both the parties. Case file perused. 2. Coming to the assessee’s sole substantive grievance raises in the instant appeal regarding disallowance/addition of Rs.16,60,697/- representing alleged sundry creditors, we note with the able Assessee by : Shri M. K. Kulkarani Revenue by : Shri M. G. Jasnani Date of hearing : 28.09.2022 Date of pronouncement : 07.10.2022 ITA No.832/PUN/2019 2 assistance from both the learned representatives that the Assessing Officer had added the same amount under the instant head to the tune of Rs.1,84,02,890/- as a bogus and unverified claim. He quoted the assessee’s failure in placing on record the corresponding creditors’ confirmations and their respective returns of income. 3. A perusal of the instant case file reveals that the CIT(A) had sought for a remand report in light of the assessee’s additional evidence. The same came to be filed from the Assessing Officer’s file on 25.03.2019. A perusal of the contents thereof as well as the CIT(A)’s detailed discussion in para 4 to 4.1 indicates that he has already granted relief of Rs.1,67,42,193/- since the Assessing Officer had found nothing wrong once the corresponding sundry creditors had filed their confirmations as follows :- “4. Before me, Shri A.B.Kulkarni ITP & AR appeared and the case was heard and discussed. He filed written submissions including additional evidence in the form of copy of the sale deed for Rs.35,30,000 and bills for expense incurred on that land. The appellant also produced a copy of the purchase deed of this land. He further submitted that the entire set of confirmations from sundry creditors of Rs. 1,84,02,890 along with ledger accounts were filed before the AO during the assessment proceedings itself. In view of the additional evidence and this contention of the appellant, I called for a remand report from the AO in the matter. I pointed out to the AO that he had assessed the entire sale consideration of land amounting to Rs.35,30,000 as LTCG and also that the assessee had admitted before me that he had not declared any LTCG in his original computation. It was also brought to the notice of the AO by me that the appellant had filed revised computation of income wherein, LTCG was computed at Rs.8,53,749. The AO was directed to examine this computation. The remand report of the AO on both these issues has been submitted to me on 25/3/2019 and the relevant extract for the same is as under: 3.1 During the course of assessment proceedings, the addition of Rs. 1,84,02,890/- was made on the account of non-verification of Sundry ITA No.832/PUN/2019 3 Creditors. A letter has been issued to assessee vide dated 04.01.2019 to prove the genuineness of these Sundry Creditors. In reply, the assessee made the submission vide dated 21.01.2019 & 20.02.2019 and submitted the List of Sundry Creditors of Rs. 1,67,42,193/- along with their confirmation, PAN No. & contact Numbers. Subsequently, he also submitted the copy of Bank A/c statement of JantaShakari Bank Ltd and IDBI Bank which had been used by him to make the payment to these Sundry Creditors. A duly basis checking was made with the ledger statement submitted by the assessee of the Sundry Creditors along with the payment made through his bank A/c maintained in JantaSahkari Bank and IDBI Bank. During the checking procedures, it was found that the assessee had made the payment of on duly basis to the Sundry Creditors which is matching the date of payment which had been submitted by these Creditors as Confirmation. In view of the above, it may be drawn that the assessee claim in respect of Sundry Creditor of Rs. 1,67,42,193/- may be genuine. Hence, the additional evidence in respect of Rs. 1,67,42,193/- submitted by the assessee may be accepted. 3.2 However, as the assessee has claimed the Sundry Creditors of Rs. 1,84,02,890/- in his return of income filed, but he has only submitted the ledger statement and confirmation of the Sundry Creditors of Rs. 1,67,42,193/-, therefore there is a difference of Rs. 16,60,697/-(18402890-16742193). During the remand proceeding, the assessee was asked to submit the confirmation of the remained Sundry Creditors of Rs. 16,60,697/-. However, he shows his inability to produce the same and has not submitted any ledger statement, Confirmation or any relevant details for his claim. Hence, it is assumed that he is claiming Rs. 16,60,697/- as bogus therefore the same may be disallowed and added to his income . 3.2 Subsequently, in respect of addition of Rs.35,30,000/- as Long Term Capital Gain, the assessee submitted the copy of Sale/Purchase agreements of Land under question along with the computation of income. On-going through the computation of income, it is seen that he is claiming Rs. 5,28,620/ - as acquisitions expenses. During the remand proceedings, the assessee was asked to submit the bill/vouchers along with the payment detail to whom the said payment had been made and also the confirmation of the related person. However, in this respect, he only submitted the copy of bill issued by M/s Parmeshwar Construction issued on 17.07.2012. To verify the genuineness of the said transactions, a notice u/s 133(6) of IT Act was issued to M/s Parmeshwar Construction on 05.03.2019 and he was asked to submit the copy of Return of income filed, bank A/c statement along with original bill issued to Shri Ramesh JaganathWarade. He was also requested to submit his reply on or before 07.03.2019, however till date no one attended from his side and submitted any proof which shows the genuineness of the said transaction. 3.3. In absence of any proof, it is considered that the assessee is claiming the cost of acquisition of Rs. 5,28,620/ - as bogus, therefore the Capital Gain income of the assessee is recalculated as under: Sale Consideration : 35,30,000/- ITA No.832/PUN/2019 4 Selling expenses : 30,000/- Net Sale Consideration : 35,00,000/- Cost of Acquisition : 15,00,000/- Indexed Cost: 1500000/785*1024 19,56,688/- Net LTCG : 15,43,312/- However, in his computation of income the assessee has already declared the LTCG Income of Rs. 8,53,749/- which is the short of Rs. 6,89,463/- (1543312-853749) as LTCG. As the assessee has claimed wrongly the deduction of Rs. 6,89,463/- as indexation of cost for which he was not eligible to claim, hence the same may be disallowed and added to his income”. 4.1 In respect of the first addition of Rs. 1,84,02,890, towards unproved sundry creditors, it is evident from the report of the AO that he has accepted the confirmations from sundry creditors to the extent of Rs. 1,67,42,193. This has been done after examination of the bank statement of the assessee used to make payments to the creditors. However, the appellant has not been able to produce any confirmation regarding the balance creditors of Rs.16,60,697. In rejoinder, the appellant did not have anything to say in the matter. In the light of this, the addition of Rs. 1,84,02,890 is restricted to Rs. 16,60,697 which are the unproved sundry creditors.” It is in this factual backdrop the impugned addition of balance credits of Rs.16,60,697/- stands upheld in the CIT(A)’s order. 4. Mr. Kulkarani vehemently argued that the impugned sum of Rs.16,60,697/- stood duly paid at the assessee’s behest in the succeeding assessment year to the alleged sundry creditors and therefore, the Assessing Officer needs to re-verify the same afresh. We find no merit in the assessee’s instant arguments once he could not even file the concerned parties’ confirmations before the Assessing Officer as late as in the year 2019. We thus include in this factual background that the CIT(A) has rightly upheld the impugned sundry creditors’ addition of Rs.16,60,697/- in issue. The assessee fails in his instant sole substantive ground. ITA No.832/PUN/2019 5 No other ground and argument has been raised before us. 5. This assessee’s appeal is dismissed in above terms. Order pronounced on this 07 th day of October, 2022. Sd/- Sd/- (G. D. PADMAHSHALI) (S. S. GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBER पुणे / Pune; ᳰदनांक / Dated : 07 th October, 2022. Sujeet आदेश कᳱ ᮧितिलिप अᮕेिषत / Copy of the Order forwarded to : 1. अपीलाथᱮ / The Appellant. 2. ᮧ᭜यथᱮ / The Respondent. 3. The CIT(A)-6, Pune. 4. The Pr. CIT-5, Pune. 5. िवभागीय ᮧितिनिध, आयकर अपीलीय अिधकरण, “B” बᱶच, पुणे / DR, ITAT, “B” Bench, Pune. 6. गाडᭅ फ़ाइल / Guard File. आदेशानुसार / BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलीय अिधकरण, पुणे / ITAT, Pune.