VIJAY T. ARBAN, MUMBAI V. ITO 22(2)(2), NAVI MUMBAI

ITA 920/MUM/2017

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 6696 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 4 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-06-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2010-2011
• Appeal Filed On: 09-02-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: M V RAJGURU
• Keywords: Unexplained cash credit; Unexplained investment; Principle of natural justice; Initiation of penalty proceedings; Assessment record
• Section: 142(1); 234B

Judgement Text

1 ITA 920/MUM/2017 IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH F, MUMBAI BEFORE SHRI MAHAVIR SINGH(JUDICIAL MEMBER) AND SHRI G MANJUNATHA (ACCOUNTANT MEMBER) I.T.A NO.920/MUM/2017 (ASSESSMENT YEAR: 2010-11) SHRI VIJAY T ARBAN 44, NAGDEVI X LANE 3 RD FLOOR OFFICE NO.25, NAGDEVI, MUMBAI-3 PAN : ADHPA3223F VS ITO 22[2]-2, MUMBAI APPELLANT RESPONDENT APPELLANT BY NONE RESPONDENT BY SHRI M.V. RAJGURU DATE OF HEARING 20-06-2018 DATE OF PRONOUNCEMENT 29-06-2018 O R D E R PER G MANJUNATHA, AM : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGA INST THE ORDER OF CIT(A)-25, MUMBAI DATED 11-11-2016 AND IT PERTAINS TO AY 2010-11. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF AP PEAL:- 1. CIT [A] HAS ERRED IN PASSING EXPARTE ORDER. A PPELLANT WAS PREVENTED BY SUFFICIENT CAUSE FOR NON ATTENDING ON THE APPOINTED DATE. 2. CIT [A] HAS ERRED IN CONFIRMING THE ORDER WHIC H IS PASSED BY VIOLATING THE PRINCIPLE OF NATURAL JUSTICE. IN EXPARTE ASSESSMENT THERE MAY BE SOME GUESS WORK BUT NOT WILD ONE WHICH AO HAS DONE. 3. CIT [A] HAS ERRED IN CONFIRMING ADDITION MADE BY AO TO THE TOTAL INCOME TOTAL OF CREDIT SIDE OF BANK PASS BOOK. WHERE AO HAS IGNO RED CHEQUE RETURN ENTRIES ALSO ON CREDIT SIDE OF PASS BOOK WHEN THE COPY OF PASS B OOK COLLECTED BY AO FROM BANK OF BARODA. 4. CIT[A] HAS ERRED IN CONFIRMING INCOME WHICH IS TWICE ADDED TO THE INCOME OF ASSESSEE. ADDITION OF PURCHASE & SALE OF SHARES OPE NING BALANCE OF SHARES ON 2 ITA 920/MUM/2017 PRESUMPTION WHEREAS IN FACT BANK PASS BOOK IS HAVIN G ALL ENTRY .IT AMOUNT TO DOUBLE ADDITION ONCE TOTAL CREDIT HAS BEEN ADDED AG AIN SALE OF SHARE HAS BEEN ADDED WHICH ARE ALREADY INCLUDED IN THE CREDIT SIDE OF PASS BOOK. 5. CIT [A] HAS NOT ADJUDICATED LEGAL ISSUE SUCH A S NOTICE U/S 143[2] NO SHOW CAUSE NOTICE HAS BEEN ISSUED HENCE ORDER OF CIT[A] IS BAD IN LAW. 6. CREDIT IN PASS BOOK CANNOT BE INCOME UNDER SEC TION 68, NO CREDIT IN THE BOOKS OF ACCOUNT AND BANK PASS BOOK IS NOT BOOKS OF ACCOU NT MAINTAINED BY ASSESSEE. 7. CIT[A] HAS ERRED IN CONFIRMING ORDER OF AO WHI CH IS PASSED WITHOUT ISSUING SHOW CAUSE NOTICE. 8. APPELLANT IS HAVING ALL INFORMATION IN HIS POS SESSION ONE MORE OPPORTUNITY MAY BE GIVEN TO GET JUSTICE. 9. APPELLANT IS NOTHING GAINING BY NOT PRODUCING DOCUMENTS BEFORE AO. DUE TO UNAVOIDABLE CIRCUMSTANCES IT WAS NOT PRODUCE. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E HAD FILED HIS RETURN OF INCOME FOR AY 2010-11 ON 14-06-2010 DECLARING T OTAL INCOME AT RS.1,62,194. THE CASE HAS BEEN SELECTED OR SCRUTIN Y AND NOTICES U/S 143(2) AND 142(1) OF THE ACT, WERE ISSUED. BUT, NO NE APPEARED FOR THE ASSESSEE ON THE DATE OF HEARING. THEREAFTER, THE C ASE HAS BEEN POSTED ON VARIOUS DATES AS MENTIONED BY THE AO IN HIS ORDE R, BUT THE ASSESSEE NEITHER APPEARED NOR FURNISHED ANY DETAILS. SINCE, ASSESSEE DID NOT FURNISH ANY INFORMATION, THE AO CALLED UPON THE DET AILS FROM THE MANAGER OF BANK OF BARODA TO FURNISH BANK STATEMENT OF ACCO UNTS MAINTAINED BY THE ASSESSEE. SIMILARLY, THE AO ALSO SOUGHT CERTA IN INFORMATION FROM BSE & NSE ABOUT PURCHASE AND SALE OF SHARES. THE A O, ON THE BASIS OF INFORMATION RECEIVED FROM BANK OF BARODA FOUND T HAT THE TOTAL CREDITS FOUND IN THE BANK ACCOUNT FOR THE YEAR STOOD AT RS. 2,09,05,291. AS THE ASSESSEE HAS NOT COMPLIED WITH ANY OF THE NOTICES T O EXPLAIN THE CREDITS FOUND IN BANK ACCOUNT, THE AO HAS TREATED TOTAL CRE DITS FOUND IN THE BANK 3 ITA 920/MUM/2017 AS UNEXPLAINED CREDITS AND ADDED TO THE TOTAL INCOM E. SIMILARLY, THE AO MADE ADDITION TOWARDS UNEXPLAINED INVESTMENTS IN PU RCHASE AND SALE OF SHARES OF GEODESIC AND PETRONET FOR AN AMOUNT OF RS .44,15,775. 3. AGGRIEVED BY THE ASSESSMENT ORDER, ASSESSEE PREF ERRED APPEAL BEFORE THE CIT(A). BEFORE THE CIT(A), ASSESSEE NEI THER APPEARED NOR FURNISHED ANY DETAILS WHICH IS EVIDENT FROM THE FAC T THAT THE LD.CIT(A) HAS AFFORDED NUMBER OF OPPORTUNITIES TO THE ASSESSE E ON VARIOUS DATES AS MENTIONED AT PARA 8 OF HIS ORDER. ALTHOUGH, THE ASSESSEE SOUGHT ADJOURNMENT BY FILING LETTER ON THE DATE FIXED FOR HEARING, BUT ON THE NEXT DATE OF HEARING, THE ASSESSEE NEITHER APPEARED NOR FURNISHED ANY DETAILS. THEREFORE, THE LD. CIT(A) LEFT WITH NO OP TION BUT TO PROCEED TO DISPOSE OF THE APPEAL ON THE BASIS OF FINDINGS OF A O AND ACCORDINGLY CONFIRMED ADDITION MADE BY THE AO TOWARDS UNEXPLAIN ED CREDITS FOUND IN BANK ACCOUNT AND UNEXPLAINED INVESTMENT IN PURCHASE OF SHARES. THE RELEVANT PORTION OF THE ORDER OF THE LD.CIT(A) IS E XTRACTED BELOW:- 8. AFTER FILING OF THE PRESENT APPEAL, THE CASE WAS FIXED FOR HEARING VIDE NOTICE DATED 20/03/2014 ASKING THE APPELLANT TO APPEAR ON 28/04/2014.THE NOTICE WAS DULY SERVED ON THE APPELLANT. THE APPELLANT FILED A LETT ER DTD 28/04/2014 ASKED FOR ADJOURNMENT BUT NONE ATTENDED ON THE APPOINTED DATE NOR WAS ANY APPLICATION FOR ADJOURNMENT FILED THE CASE WAS AGAIN FIXED FOR HEA RING VIDE NOTICE DATED 26/08/2014 ASKING THE APPELLANT TO APPEAR ON 09/09/2014. ON T HE DATE OF.HEARING THE APPELLANT FILED LETTER DTD. 09/09/2014 SEEKING ADJOURNMENT. THE CASE WAS FIXED FOR HEARING VIDE NOTICE DTD. 10/12/2014 ASKING THE APPELLANT TO APPEAR ON 19/12/2014 BUT AGAIN NO ONE ATTENDED. ON THE DATE OF HEARING THE APPELLA NT FILED LETTER DTD. 19/12/2014 SEEKING ADJOURNMENT. ANOTHER NOTICE DTD 24/02/2 015 WAS SERVED ASKING THE APPELLANT TO APPEAR ON 04/03/2015 AND AGAIN ON THE APPOINTED DATE NO ONE ATTENDED NOR ANY APPLICATION WAS FILED. THE CASE WAS 3GA:N F IXED FOR HEARING VIDE NOTICES DTD. 16/07/2015 AND 04/08/2015, ASKING THE APPELLANT TO APPEAR ON 29/07/2.015 AND 29/08/2015 RESPECTIVELY, BUT AGAIN NO ONE ATTENDED. ON THE DATE OF HEARING THE APPELLANT FILED LETTER DTD. 19/08/2015 SEEKING ADJO URNMENT. THEREAFTER, NOTICES U/S 250 WERE ISSUED ON 13/10/2015, 30/03/201G, 22/06/2016, 31/08/2016, AND 4 ITA 920/MUM/2017 16/09/2016, 07/10/2016 AT THE APPELLANT'S ADDRESS A ND AGAIN ON THE APPOINTED DATES NO ONE ATTENDED NOR ANY APPLICATION WAS FILED. A FI NAL OPPORTUNITY WAS GRANTED AND THE CASE WAS FIXED FOR HEARING VIDE NOTICE DATED 07 /10/2016 ASKING THE APPELLANT TO APPEAR ON 10/11/2016. EVEN IN THE CASE OF LAST OPPO RTUNITY, NO BODY ATTENDED. THUS IT IS CLEAR THAT THE APPELLANT HAS REPEATED THE SAME C ONDUCT OF NON-COMPLIANCE ON THE APPOINTED DATES. TILL DATE, NEITHER THE APPELLANT N OR HIS AUTHORIZED REPRESENTATIVES HAS EVER ATTENDED THE APPELLATE PROCEEDINGS OR FILE D ANY DETAILS. 9. FROM THE ABOVE SEQUENCE OF THE NON-COMPLIANCES A ND THE NON-SERIOUSNESS OF THE APPELLANT IN THE MATTER OF PRESENT APPEAL AND WITH SUCH IRRESPONSIBLE CONDUCT OF THE APPELLANT, IT IS CLEAR THAT THAT THE APPELLANT IS NOT INTERESTED IN PROSECUTING THE APPEAL. THEREFORE, THIS APPEAL IS BEING DECIDED ON MERITS AS PER THE MATERIAL AVAI LABLE ON RECORD. 10. GROUND NO. 1 TO 5 AND 10. THE GROUNDS OF APPEAL NO. 1 TO 5 AND 10 ARE AGAINST THE ACTION OF THE AO IN PASSING AN EX PARTE ASSESSMENT WITHOUT GIVING THE APPELLANT AN OPPORTUNITY TO PRESENT HIS CASE. I FIN D THAT TRIE AO HAS GIVEN MORE THAN ENOUGH OPPORTUNITIES TO THE APPELLANT TO APPEA R BEFORE HIM AND PRESENT HIS CASE. FOR REASONS BEST KNOWN TO THE APPELLANT, THES E OPPORTUNITIES HAVE NOT BEEN AVAILED. I THEREFORE FIND NO FORCE IN THE ARGUMENT OF THE APPELLANT TNAT THE AO PASSED AN EX PARTE ASSESSMENT. I THEREFORE DISMISS THESE GROUNDS OF APPEAL. 11. GROUND; NO. 6 TO 9 AND 11: THE GROUNDS OF APPEAL NO. 5 TO 9 AND 11 ARE AGAINST THE ACTION OF THE ASSESSING OFFICER IN THE ADDITION OF UNDISCLOSED INCOME RELATED TO BANK DEPOSIT IN BOB AND PERTAINING TO SH ARE TRANSACTION 12. FROM THE FACTS OF THE CASE, IT IS OBSERVED THAT THERE WAS UNACCOUNTED AND UNDISCLOSED INCOME WHICH COULD NOT BE EXPLAINED BY THE APPELLANT BEFORE THE AO DURING THE ASSESSMENT PROCEEDINGS. IN SPITE OF REPE ATED REQUEST BY THE AO NOTHING WAS PRODUCED FOR VERIFICATION. DURING APPEL LATE PROCEEDINGS, THE APPELLANT NEITHER ATTAIN NOR DEMONSTRATE AS TO HOW THE ACTION OF THE AO WAS WRONG, AS NO REPLY WAS SUBMITTED. LOOKING TO THE TO TALITY OF THE FACTS AND CIRCUMSTANCES OF THE CASE, I HAVE NO OPTION BUT TO CONFIRM THE ACTION OF THE AO IN BRINGING UNDISCLOSED INCOME AMOUNTING TO RS. 2,54,2 7,901/- TO TAX. HENCE, THESE GROUNDS OF APPEAL ARE V DISMISSED. 13. GROUND NO. 12 : THIS GROUND IS AGAINST THE INITIATION OF PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) OF THE ACT. IT IS OBSERVED THAT THE AO HAS JUST INITIATED THE PENALTY PROCEEDINGS AND NOT IMPOSED IT. HENCE, IT G ROUND IS PREMATURE. ACCORDINGLY, THE GROUND OF APPEAL NO. 5 IS DISMISSE D. 14. GROUND NO. 13: THIS GROUND OF APPEAL RELATES TO CHARGING OF INTEREST U/S 234B AND 234C OF THE IT. ACT, 1961. IN THIS REG ARD, I FIND THAT CHARGING OF INTEREST IS CONSEQUENTIAL AND MANDATORY IN NATUR E. THEREFORE, THERE IS NO MERIT IN THE CLAIM OF THE APPELLANT. HENCE, THE GRO UND NO. 4 IS DISMISSED. 15. BEFORE CONCLUDING, IT IS BROUGHT ON RECORD THAT THEIR LORDSHIPS OF HON'BLE SUPREME COURT IN THE CASE OF CIT VS. B.N. BHATTACHARJEE AND ANOTHER 118 ITR 461 AT PAGE 477-78 HAS HELD THAT THE APPEAL DOES NOT MEAN, MERE FILING OF THE MEMO OF APPEAL BUT EFFECTIVELY PURSUING THE SAME. 4. WE HAVE HEARD THE LD.DR AND PERUSED THE MATERIAL AVAILABLE ON RECORD IN THE ABSENCE OF ASSESSEES PRESENCE. ON P ERUSAL OF THE ASSESSMENT RECORDS, IT REVEALS THAT THE ASSESSEE IS A HABITUAL NON 5 ITA 920/MUM/2017 COMPLIER TO THE PROCEEDINGS BEFORE THE LOWER AUTHOR ITIES WHICH IS EVIDENT FROM THE FACT THAT THE AO HAS GIVEN AMPLE OPPORTUNI TIES TO THE ASSESEE TO COMPLY WITH NOTICES BUT THE ASSESSEE NEITHER APP EARED NOR FILED ANY DETAILS. DURING APPELLATE PROCEEDINGS, THE LD.CIT( A), HAS GIVEN NUMBER OF OPPORTUNITIES, BUT ASSESSEE FAILED TO MAKE USE O F THE OPPORTUNITIES GIVEN BY THE LD.CIT(A) TO EXPLAIN HIS CASE. THE NO N ATTENDANCE / NON CO-OPERATION IS ALSO SEEN BEFORE THE TRIBUNAL, AS WHEN THE CASE WAS POSTED FOR HEARING ON 24-05-2018, THE ASSESSEE NEIT HER APPEARED NOR SOUGHT ANY ADJOURNMENT. THE CASE HAS BEEN AGAIN PO STED FOR HEARING ON 20-06-2018. ON THIS DATE ALSO, THE ASSESSEE, NE ITHER APPEARED, NOR FILED ANY DETAILS. THEREFORE, WE ARE OF THE CONSID ERED VIEW THAT THE ASSESSEE IS NOT INTERESTED TO EXPLAIN ADDITION MADE BY THE AO TOWARDS UNEXPLAINED CASH CREDITS AND INVESTMENT IN SHARES. THE LD.AO HAS MADE ADDITIONS ON THE BASIS OF BANK STATEMENT AND B SE INFORMATION. THE ASSESSEE DID NOT TURN UP TO EXPLAIN CREDITS IN BANK ACCOUNT AND PURCHASE OF SHARES. IN THE ABSENCE OF ANY EXPLANAT ION FROM ASSESSEE, WE ARE HELPLESS TO GIVE ANY BENEFIT TO THE ASSESSEE . THEREFORE, WE ARE OF THE CONSIDERED VIEW THAT THE LD.CIT(A) WAS RIGHT IN CONFIRMING ADDITION MADE BY THE AO. WE DO NOT FIND ANY ERROR OR INFIRM ITY IN THE ORDER OF THE LD.CIT(A). HENCE, WE ARE INCLINED TO UPHOLD THE FI NDINGS OF LD.CIT(A) AND DISMISS THE APPEAL FILED BY THE ASSESSEE. 6 ITA 920/MUM/2017 4. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS D ISMISSED. 3. ORDER PRONOUNCED IN THE OPEN COURT ON 29 TH JUNE, 2018. SD/- SD/- (MAHAVIR SINGH) (G MANJUNATHA) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DT : 29 TH JUNE, 2018 PK/- COPY TO : 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR /TRUE COPY/ BY ORDER SR.PS, ITAT, MUMBAI