V.ARUMUGAPANDI, COIMBATORE V. THE ASSISTANT COMMISSIONER OF INCOME TAX CENTRAL CIRCLE-I, COIMBATORE

ITA 971/CHNY/2020

• Counselvise Citation: [2022] 106 COUNSELVISE.COM (IT) 6511 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 8 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-08-2022
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2010-2011
• Appeal Filed On: 15-12-2020
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Unexplained investment; Gift; Principle of natural justice

Judgement Text

आयकर अपीलसं./ITA No.971/Chny/2020 िनधा रण वष /Assessment Year: 2010-11 Mr.V.Arumugapandi, No.3/35A, Amman Nagar, Siruvani Nagar, Coimbatore-641 024. v. The Asst. Commissioner – of Income Tax, Central Circle-1, No.63, Race Course Road, Coimbatore-641 018. [PAN:AMLPA 1246 R] (अपीलाथ /Appellant) ( यथ /Respondent) अपीलाथ क ओर से/ Appellant by : None यथ क ओर से /Respondent by : Mr.M.Rajan, CIT सुनवाईक तारीख/Date of Hearing : 16.08.2022 घोषणाक तारीख /Date of Pronouncement : 16.08.2022 आदेश / O R D E R PER BENCH: This appeal filed by the assessee is directed against the consolidated order of the Commissioner of Income Tax (Appeals)-19, Chennai, dated 23.09.2020 pertaining to assessment year 2009-10 to 2014-15. 2. The assessee has raised the following grounds of appeal: 1. The Common order of The Commissioner of Income Tax (Appeals) -18, Chennai - 34 dated 23.09.2020 in ITA Nos. 327 to 332/19-20 in so far as the issue contested in the present appeal pertaining to the above assessment year is contrary to law, facts and in the circumstances of the case. आयकर अपीलीय अिधकरण, ’सी’ यायपीठ, चे ई। IN THE INCOME TAX APPELLATE TRIBUNAL ‘C’ BENCH: CHENNAI ी महावीर िसंह, उपा , एवं डॉ। दीपक पी. रपोटे, लेखा सद के सम BEFORE SHRI MAHAVIR SINGH, VICE PRESIDENT AND DR. DIPAK P. RIPOTE, ACCOUNTANT MEMBER ITA No.971/Chny/2020 :: 2 :: 2. The CIT (Appeals) failed to appreciate the fact that land was taken for lease for 10 years and the copy of the deed was produced along with chitta and adangal in the name of the land owners. As the owner have become aged and not in a position to maintain their land, the Appellant is a family of agricultural background agreed and raised some agricultural products from their land and sold the same to the market and earned some income as agricultural income. Hence this disallowance/ rejection is without proper justification. 3. The CIT (Appeals) failed to note that the Assessing-officer rejected the claim mainly because the Appellant's name has not reflected in the Adangal extract. It is pertinent to note that the lessee's name will not appear in the Adangal as the owner of the land will not agree for the same. 4. The CIT (Appeals) failed to appreciate that the relevant facts were completely ignored despite such facts were brought to the notice of the Assessing Officer and further before him and ought to note that the findings of the Assessing Officer as well as CIT (Appeals) is incorrect both on facts and in law. 5. The CIT (Appeals) erred in sustaining agricultural income on reaching irrelevant conclusions while sustaining such sum as agricultural income in the computation of taxable total income without assigning proper reasons and justifications. 6. The CIT (Appeals) ought to have appreciated the fact that the Appellant was gifted Rs.2,00,000/- in cash to start the business by his father in law. The Assessing Officer rejected the claim that his father in law is not an income tax assesse and he has not shown the gift to his son-in-law in the statement of income that should have been filed with the income tax department. His father in law was doing petty shop business at Bombay and his income was below the limit to file the return. The gift was given from his personal saving over the period of years. The confirmation was not produced as he is not alive during the time of assessment. Hence the disallowance/ rejection is without appropriate justification. 7. The CIT (Appeals) erred in sustaining Gift from Father-in-law on reaching irrelevant conclusions while sustaining such sum as inadequate drawing in the computation of taxable total income without assigning proper reasons and justifications. 8. The CIT (Appeals) failed to appreciate the facts that Rs.7100/- was spent for buying jewellery is well within his personal drawings of Rs.1,20,000/-. 9. The CIT (Appeals) erred in sustaining Unexplained Investment in Jewellery on reaching irrelevant conclusions while sustaining such sum drawing in the computation of taxable total income without assigning proper reasons and justifications. 10. The CIT (Appeals) failed to appreciate that presumption of Income from Other Sources' is wholly unjustified and ought to have appreciated that in the absence of direct evidence, the sustenance of the said additions were wrong, erroneous, unjustified, incorrect and sustainable in law, thereby vitiating the findings in the impugned order. 11. The CIT (Appeals) failed to appreciate the explanations offered. 12. The CIT (Appeals) failed to appreciate that the assessment completed after search was bad in law and in the absence of direct evidence coupled with wrong ITA No.971/Chny/2020 :: 3 :: initiation of the proceedings would vitiate the consequential search assessment on various facts. 13. The impugned order and the assessment order -is a non-speaking order merely confirms the demand that the Appellant has not offered unsustainable and would be nullity in law. 14. The CIT (Appeals) has merely reiterated the order of the Assessing Officer and has not dealt the issues independently by applying laws and the facts. 15. The CIT (Appeals) passed the impugned order without hearing the Appellant in violation of principles of natural justice would be nullity in law. 16. The appellant has reserve his right to file additional grounds/arguments at the time of hearing of appeal. 3. The assessee field an affidavit with a request to condone the delay. We find that the delay was mainly because of pandemic. Hence, delay in filing of the appeals is condoned. 4. None appeared on behalf of the assessee. It is observed that these appeals were scheduled for hearing on multiple occasions. None appeared for assessee on the scheduled dates of hearing. Therefore, this case is decided based on the merits of the case with the help of ld.Departmental Representative (DR). 5. We have heard the ld.DR and perused the materials available on record. The first grounds of appeal is general in nature. Hence, no adjudication is required. Therefore, ground No.1 is dismissed. 6. The Ground Nos.2 to 5 are related to addition of agricultural income of Rs.2,56,571/- in the assessment order. The Ld.CIT(A) has discussed the issue of agricultural income at length. It is observed that the assessee failed to prove that the assessee was having agricultural land ITA No.971/Chny/2020 :: 4 :: and assessee has carried out agricultural activities. The Ld.CIT(A) has given categorical findings that the name of the assessee does not appear in ADANGAL extract neither as owner nor as cultivator. Once this fact is established by the Ld.CIT(A) that the assessee’s name does not appear anywhere in the ADANGAL extract, which is the Revenue record. There is no reason to doubt the contents of the Revenue records, it is obvious that the assessee cannot claim that he has carried out agricultural activities. No evidence has been filed by the assessee to rebut the findings of the lower authorities. In this back ground, we find no reason to interfere with the order of the Ld.CIT(A). Therefore, Ground Nos.2-5 of the assessee are dismissed. 7. The Ground Nos.6 & 7 are related to addition of Rs.2,00,000/- claimed by the assessee as gift from father-in-law. In the assessment order the AO has given the findings that said amount was not shown in the capital account by the assessee for the year under consideration. Only during the assessment proceedings when the AO observed that there was deposit of Rs.2 lakhs in State Bank of India, the assessee gave the explanation the said amount was received from his father-in-law. During the assessment proceedings the AO asked to prove identity of the donor, creditworthiness of the donor and genuineness of the transaction. The assessee could not establish creditworthiness of the donor. The assessee’s father in law had never filed any return of income. Therefore, the AO added Rs.2 lakhs to assessee’s income. Before the CIT(A), no ITA No.971/Chny/2020 :: 5 :: evidence was filed by the assessee. As a result, Ld.CIT(A) dismissed the assessee’s ground related to the gift. Before us, no evidence has been filed by the assessee to prove creditworthiness of the donor. It is also an admitted fact that the donor was not a taxpayer and donor was having a small street shop in Mumbai. Thus, assessee failed to prove creditworthiness of the donor, genuineness of the transaction. Therefore, the orders of the lower authorities are upheld on this issue. Therefore, Ground Nos.6 & 7 are dismissed. 8. Ground Nos.8 & 9 are related to unexplained investment in jewellery. During the course of search, certain documents were seized which evidenced purchase of jewellery of Rs.7,100/-. The assessee in his statement during the search admitted that said jewellery has not been purchased out of drawings. Therefore, the AO made addition of Rs.7,100/- towards unexplained investment in jewellery. Before the Ld.CIT(A), the assessee has not filed any new evidence to rebut the findings of the AO. Therefore, the Ld.CIT(A) confirmed the addition. Before us, the assessee has not filed any evidence to demonstrate that assessee was having sufficient amount to purchase the jewellery. In the absence of evidence, the addition is upheld. Therefore, Ground Nos.8 & 9 are dismissed. 9. Ground Nos.10 to 16 are general in nature. It is observed that sufficient opportunity was given by the Ld.CIT(A) as well as the AO. Both Ld.CIT(A) as well as AO had passed speaking orders. Therefore, there is ITA No.971/Chny/2020 :: 6 :: no merit in the claim of the assessee that orders are non-speaking and without giving any opportunity. Therefore, Ground Nos.10 to 16 are dismissed. 10. In the result, the appeals filed by the assessee is dismissed. Order pronounced on the 16 th day of August, 2022, in Chennai. Sd/- ( महावीर िसंह) (MAHAVIR SINGH) उपा /VICE PRESIDENT Sd/- (डॉ। दीपक पी. रपोटे) (DR. DIPAK P. RIPOTE) लेखासद य/ACCOUNTANT MEMBER चे ई/Chennai, दनांक/Dated: 16 th August, 2022. TLN आदेशक ितिलिपअ$ेिषत/Copy to: 1. अपीलाथ /Appellant 4. आयकरआयु%/CIT 2. यथ /Respondent 5. िवभागीय ितिनिध/DR 3. आयकरआयु% (अपील)/CIT(A) 6. गाड*फाईल/GF