Adwitiya Projects India Pvt.Ltd, Pune V. Income-tax Officer, Pune

ITA 849/PUN/2017

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 0649 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 8 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-12-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2013-2014
• Appeal Filed On: 07-04-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: HOUSHANG BOMAN IRANI
• Keywords: Salary income
• Section: 143(3); 68

Judgement Text

] IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE SHRI ANIL CHATURVEDI, AM AND SHRI PARTHA SARATHI CHAUDHURY, JM . / ITA NO.849/PUN/2017 / ASSESSMENT YEAR : 2013-14 ADWITIYA PROJECTS INDIA PVT. LTD., 301, SUPREME ICON, BANER ROAD, NEAR SAKAL NAGAR, AUNDH, PUNE 411 007. PAN : AAJCA4323N. . / APPELLANT V/S THE INCOME TAX OFFICER, WARD 1(3), PUNE. . / RESPONDENT ASSESSEE BY : SHRI SUHAS BORA. REVENUE BY : SHRI HOUSHANG BOMAN IRANI. / ORDER PER ANIL CHATURVEDI, AM : 1. THIS APPEAL FILED BY THE ASSESSEE IS EMANATING OUT OF THE ORDER OF COMMISSIONER OF INCOME TAX (A), PUNE 1 DATED 30.01. 2017 FOR THE ASSESSMENT YEAR 2013-14. 2. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERIAL ON RE CORD ARE AS UNDER :- ASSESSEE IS A COMPANY STATED TO BE ENGAGED IN THE BUS INESS OF CIVIL CONTRACTOR AND PROVIDES SERVICE TO MOSTLY INDUSTRIAL AND PRIVATE / DATE OF HEARING : 19.12.2019 / DATE OF PRONOUNCEMENT: 19.12.2019 2 CLIENTS. ASSESSEE FILED ITS RETURN OF INCOME FOR A.Y. 2013-1 4 ON 28.09.2013 DECLARING TOTAL INCOME OF RS.2,97,31,804/-. THE CAS E WAS SELECTED FOR SCRUTINY AND THEREAFTER, ASSESSMENT WAS FRAM ED U/S 143(3) OF THE ACT VICE ORDER DATED 29.03.2016 AND THE TO TAL INCOME WAS DETERMINED AT RS.5,31,46,451/-. AGGRIEVED BY THE ORDER OF AO, ASSESSEE CARRIED THE MATTER BEFORE LD.CIT(A), WHO VIDE O RDER DATED 30.01.2017 (IN APPEAL NO.CIT(A), PUNE-1/10278/2016-17) GRANT ED PARTIAL RELIEF TO THE ASSESSEE. AGGRIEVED BY THE ORDER OF LD.CIT(A), ASSESSEE IS NOW IN APPEAL BEFORE US AND HAS RAISED THE FO LLOWING GROUNDS : 1. THE LD CIT (A) HAS ERRED IN CONFIRMING THE ADDIT ION OF RS.15,57,000/- U/S 68 O F THE ACT MADE BY THE AO ONLY ON THE GROUND THAT THE DEPOSITOR HAS NOT PROPERLY EXPLAINED THE S OURCE OF AMOUNT DEPOSITED IN THE BANK, AND THE SAME WAS UNEXPLAINED FOR THE REASON THAT THERE WAS NO REASONABLE EXPLANATION OF THE SOU RCE OF CASH DEPOSIT WITHOUT APPRECIATING THE FACTS AND DISREGARDING THE SUBMISSIONS MADE BY THE APPELLANT. 2. THE LD CIT (A) WHILE CONFIRMING THE ADDITION U/S 68 OF THE ACT HAD FAILED TO APPRECIATE THE FOLLOWING IMPORTANT FA CTORS: A. THAT THE LENDER OF THE AMOUNT IS DULY ASSESSED TO T AX. B. THE LENDER HAS SUBSTANTIAL ASSETS. C. THAT THE APPELLANT HAD COMPLIED WITH ALL THE CONDIT IONS OF SEC. 68 OF THE ACT. D. THAT THE ADDITION MADE BY THE AO ON THE GROUND THE LENDER HAD DEPOSITED THE CASH IN HIS SAVING ACCOUNT IS NOT JUSTIFIED IN LAW. 3. ALL THE GROUNDS BEING INTER-CONNECTED ARE CONSIDERED TOGETH ER. 4. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, AO ON P ERUSING THE BALANCE-SHEET NOTICED THAT THERE WAS AN ADDITION ON ACCOUNT OF RECEIPT OF SHARE APPLICATION MONEY OF RS.1 CRORE AND UNSEC URED LOANS OF RS.2,40,45,274/- FROM MR. UTTAM CHORDIYA, DIRECTOR OF THE ASSESSEE COMPANY. THE ASSESSEE WAS ASKED TO FURNISH THE DETAILS OF 3 INTRODUCTION OF SHARE APPLICATION MONEY, UNSECURED LOANS AND CREDITWORTHINESS OF THE INVESTOR. ON PERUSING THE LEDGER ACCOUNT FURNISHED BY THE ASSESSEE, IT WAS NOTICED THAT ALL THE UNS ECURED LOANS RECEIVED BY THE ASSESSEE FROM MR. UTTAM CHORDIYA OUT O F WHICH RS.2 LAKH WAS RECEIVED IN CASH ON 15.09.2012. HE ALSO NOTICED THAT THERE WERE VARIOUS CASH DEPOSITS IN THE BANK ACCOUNT OF LENDER MR. UTTAM CHORDIYA BEFORE THE ISSUE OF CHEQUE OF SHARE APPLICATION MONEY AND UNSECURED LOANS (THE DETAILS OF WHICH ARE TABULATED BY TH E AO IN PAGE 9 OF THE ORDER). THE ASSESSEE WAS THEREFORE ASKED TO FURNISH THE SOURCE OF CASH DEPOSITS AND THE AVAILABILITY OF THE CASH. ASSESSEE INTER-ALIA SUBMITTED THAT THE CASH WAS DEPOSITED FROM THE CASH BALANCE AVAILABLE IN HIS BANKS. THE SUBMISSIONS OF THE ASSES SEE WERE NOT FOUND ACCEPTABLE TO THE AO. AO NOTED THAT NO DET AILS AS TO WHETHER THE BOOKS OF ACCOUNTS WERE MAINTAINED BY MR. UT TAM CHORDIYA, THOUGH HE WAS A SALARIED EMPLOYEE WAS NOT CLARIFIED BY TH E ASSESSEE. THE SUBMISSION OF THE ASSESSEE OF HAVING CASH DEPOSITS OUT OF THE CASH WITHDRAWALS WERE ALSO NOT FOUND ACCEPTABLE T O THE AO IN VIEW OF THE FACT THAT ASSESSEE HAS STATED TO WITHDRAWN THE CASH OF RS.2,90,000/- FOR HOUSEHOLD AND PERSONAL EXPENSES. AO ALS O NOTICED THAT MR. UTTAM CHORDIYA, HAS SHOWN INCOME FROM SALARY ONLY AT RS.7,97,540/- WHICH WAS OFFERED TO TAX IN A.Y. 2013-14. H E THEREFORE DID NOT ACCEPT THE SUBMISSION OF THE ASSESSEE OF HAVING C ASH DEPOSITS MADE OUT OF THE CASH WITHDRAWALS. HE ACCORDINGLY HELD TH AT ASSESSEE HAS FAILED TO EXPLAIN THE CREDITWORTHINESS OF THE TRANSACTIO N OF SHARE APPLICATION MONEY AND UNSECURED LOANS AND THEREFORE MADE AN ADDITION OF RS.15,57,000/- U/S 68 OF THE ACT. AGGRIEVED BY THE ORDER O F AO, ASSESSEE CARRIED THE MATTER BEFORE LD.CIT(A), WHO UPHE LD THE ORDER OF AO BY OBSERVING AS UNDER : 4 13. I HAVE CAREFULLY CONSIDERED THE FACTS OF THE C ASE AS WELL AS REPLY OF THE APPELLANT. IN THIS CASE, IT IS CLEAR THAT THE APPELLANT HAS TAKEN LOAN OF RS.15,57,000/- FROM MR. UTTAM CHORDIYA, ONE OF T HE DIRECTORS OF THE COMPANY. OUT OF THE ABOVE RS. 2 LACS WERE RECEIVED IN CASH ON 15/9/2002. REGARDING BALANCE AMOUNT OF RS.13,57,000 /- THE AO FOUND THAT EQUAL AMOUNT WAS DEPOSITED IN CASH IN THE BANK ACCOUNT OF MR. UTTAM CHORDIYA. THE APPELLANT COULD NOT EXPLAIN THE SOURCE OF CASH DEPOSIT IN THE BANK ACCOUNT SATISFACTORILY BEFORE T HE AO. IN ITS REPLY, IT CLAIMS THAT THE APPELLANT IS NOT REQUIRED TO PROVE THE SOURCE OF SOURCE I.E. SOURCE OF CASH DEPOSIT IN THE BANK ACCOUNT OF MR. U TTAM CHORDIYA. THIS IS NOTHING BUT TRYING TO SHIFT THE ONUS. IT MUST BE APPRECIATED THAT MR. UTTAM CHORDIYA THOUGH A DIFFERENT ENTITY IS NOT A T HIRD PARTY IN REAL SENSE. IN A PRIVATE LIMITED COMPANY THE ROLE OF DIR ECTOR IS NO DIFFERENT THAN PARTNER OF A FIRM AND THEREFORE, THE SOURCE OF CASH DEPOSIT IN THE BANK ACCOUNT OF MR. UTTAM CHORDIYA COULD HAVE BEEN EASILY EXPLAINED HAD THE APPELLANT WANTED TO. THIS HAS NOT BEEN EXPL AINED FOR THE OBVIOUS REASON THAT THERE WAS NO PLAUSIBLE EXPLANAT ION REGARDING THE SOURCE OF CASH DEPOSIT. ACCORDINGLY, I DO NOT FIND ANY MERIT IN THE SUBMISSION OF THE APPELLANT AND THE ACTION OF THE A O IN MAKING ADDITION OF RS.15,57,000/- IS UPHELD. THUS, THE GROUND IS D ISMISSED. AGGRIEVED BY THE ORDER OF LD.CIT(A), ASSESSEE IS NOW BEFORE US. 5. BEFORE US, LD.A.R. REITERATED THE SUBMISSIONS MADE BEFOR E AO AND LD.CIT(A) AND FURTHER SUBMITTED THAT ASSESSEE IS NOT REQUIRED TO PROVE THE SOURCE OF SOURCE OF CASH DEPOSITS. HE FUR THER SUBMITTED THAT IF AT ALL ANY ADDITION WAS REQUIRED IT WAS TO BE MADE IN THE HANDS OF MR. UTTAM CHORDIYA AND NOT THE ASSESSEE. HE THEREFOR E SUBMITTED THAT THE ADDITION MADE BY THE AO BE DELETED. LD. D.R. ON THE OTHER TOOK US THROUGH THE ORDER OF AO AND SUPPORTED THE ORDER OF LD.CIT (A). 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE ISSUE IN THE PRESENT CASE IS WITH RESPEC T TO THE ADDITION OF RS.15,57,000/- U/S 68 OF THE ACT. WE FIND THAT AO HAD C ONCLUDED THAT ASSESSEE HAS NOT EXPLAINED THE SOURCE OF CASH DEP OSITS IN THE BOOKS OF ACCOUNTS SATISFACTORILY AS THERE WAS EQUAL AMOU NT OF CASH DEPOSITS BEFORE THE GIVING OF LOAN BY MR. UTTAM CHORDIYA T O ASSESSEE. BEFORE US, ASSESSEE HAS NOT CONTROVERTED THE SUBMISSION S MADE BY LD. D.R. BUT HAS SIMPLY STATED THAT ASSESSEE HAD FURNISH ED THE 5 CONFIRMATION AND HIS PAN NO. AND THUS ASSESSEE HAS COMPLIE D WITH THE REQUIREMENTS OF SEC.68 OF THE ACT. BEFORE US ALSO NO SATISFACTORY EXPLANATION ABOUT THE SOURCE OF CASH DEPOSITS IN THE BAN K ACCOUNT OF MR. UTTAM CHORDIYA HAS BEEN PROVIDED BY THE ASSESSEE. IN SUCH A SITUATION, CONSIDERING THE TOTALITY OF THE FACTS, WE FIND NO R EASON TO INTERFERE WITH THE ORDER OF LD.CIT(A). THUS, THE GROUNDS OF THE ASSESSEE ARE DISMISSED. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DISMIS SED. ORDER PRONOUNCED ON 19 TH DAY OF DECEMBER, 2019. SD/- SD/- ( PARTHA SARATHI CHAUDHURY ) ( ANIL CHATURVEDI ) ! / JUDICIAL MEMBER '! / ACCOUNTANT MEMBER PUNE; DATED : 19 TH DECEMBER, 2019. YAMINI #$%&'('% / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. 4. 5. 6. CIT(A) 1, PUNE. . PR.CIT-1, PUNE. '#$ %%&',) &', / DR, ITAT, B PUNE; $*+,/ GUARD FILE. / BY ORDER , / / TRUE COPY / / //T// TRUE COPY // -./%0&1 / SR. PRIVATE SECRETARY ) &', / ITAT, PUNE.