S PRATHICK KUMAR, CHENGALPATTU V. DCIT , CHENNAI

ITA 972/CHNY/2022

AI Insights

The case involves Shri S. Prathick Kumar, an individual engaged in the trading of diamond and gold jewelry, who appealed against the additions made to his income for the assessment year 2018-19. The additions were made following a survey under section 133A of the Income Tax Act, 1961, which revealed excess stock and cash at his business premises. The AO added the value of the excess stock and cash as unexplained investments and money under sections 69B and 69A of the Act, respectively. The CIT(A) confirmed these additions, which were subsequently upheld by the Income Tax Appellate Tribunal.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 135241 (ITAT-CHENNAI)
• Duration Of Justice: 9 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-09-2023
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 04-09-2023
• Assessment Year: 2018-2019
• Appeal Filed On: 16-11-2022
• Other Referred Cases: SVS Oil Mills (402 ITR), Subramaniam-vs-Siemens India Ltd. (198s) 156 ITR 11 (Bom)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Unexplained investment
• Section: 69B; 69A

Judgement Text

आयकर अपीलीय अिधकरण, ‘सी’ ᭠यायपीठ,चे᳖ई IN THE INCOME TAX APPELLATE TRIBUNAL ‘C’ BENCH, CHENNAI ᮰ी महावीर ᳲसह, उपा᭟यᭃ एवं ᮰ी मंजुनाथ. जी, लेखा सद᭭य के समᭃ BEFORE SHRI MAHAVIR SINGH, VICE PRESIDENT AND SHRI MANJUNATHA.G, ACCOUNTANT MEMBER आयकर अपील सं./ITA No.: 972/CHNY/2022 िनधाᭅरण वषᭅ/Assessment Year: 2018-19 Shri S. Prathick Kumar, 56, High Road, Chengalpattu – 603 002. PAN: AJOPP 5977G vs. The DCIT, Central Circle 3(3), Chennai. (अपीलाथᱮ/Appellant) (ᮧ᭜यथᱮ/Respondent) अपीलाथᱮ कᳱ ओर से/Appellant by : None ᮧ᭜यथᱮ कᳱ ओर से/Respondent by : Shri P. Sajit Kumar, JCIT सुनवाई कᳱ तारीख/Date of Hearing : 05.09.2023 घोषणा कᳱ तारीख/Date of Pronouncement : 05.09.2023 आदेश /O R D E R PER MAHAVIR SINGH, VICE PRESIDENT: This appeal by the assessee is arising out of the order of the Commissioner of Income Tax (Appeals)-18, Chennai in DIN:ITBA/APL/2022-23/1045336257(1) dated 09.09.2022. The assessment was framed by the DCIT, Central Circle 3(3), Chennai 2 ITA No. 972/Chny/2022 for the assessment year 2018-19 u/s.143(3) of the Income Tax Act, 1961 (hereinafter the ‘Act’), vide order of dated 17.09.2021. 2. At the outset, it is noticed that the assessee despite service of notice on all occasions has not represented his case. This case was posted for hearing seven times, hence we proceed to hear the matter and will decide the issue on merits, after hearing ld. Senior DR. Further, it is noticed that the grounds raised by assessee are argumentative in detail and running into 8 pages. The only issue emerged out of the grounds of 8 pages that where the excess stock found during the course of survey conducted by the Income-Tax Department on the business premises of the assessee u/s.133A of the Act and added by the AO u/s.69B of the Act as unexplained investment u/s.69B of the Act and also addition of excess cash of Rs.5,01,438/- 3. Brief facts are that the assessee is an individual engaged in the business of trading of diamond and gold jewellery. A survey was conducted on the business premises of the assessee u/s.133 of the Act on 01.02.2018. The assessee filed the return of income for the relevant assessment year 2018-19 on 31.10.2018. The AO completed the assessment by adding (i) excess stock of gold bullion 3 ITA No. 972/Chny/2022 & gold jewellery u/s.69B as unexplained investment of Rs.2,56,86,300/-, (ii) excess cash Rs.5,01,438/- and (iii) personal expenditure Rs.15,000/-. The assessee challenged the additions before CIT(A). The CIT(A) after considering the submissions and arguments of assessee confirmed the action of AO in holding the addition on account of unexplained investment being excess value of stock found and unexplained cash u/s.69B and 69A of the Act respectively and levied taxes @ 60% u/s.115BBE of the Act by observing in para 7.4 as under:- 7.4 I have considered the submission of the appellant. The AO treated the value of excess stock found as income from other sources relying on the decision of the jurisdictional Madras High Court in the case of SVS Oil Mills (402 ITR), It is well settled principle of law that if there is conflicting rendered by different High Courts, the view taken by the jurisdictional High Court is binding in the jurisdictional area of the respective High Court. The Hon'ble Bombay High Court in the case of Subramaniam-vs-Siemens India Ltd. (198s) 156 ITR 11 (Bom) held that so far as the legal position is concerned, the ITO would be bound by a decision of the Supreme Court as also by a decision of the High Court of the State within whose jurisdiction he is functioning, irrespective of the pendency of any appeal or special leave application against the judgment. He would equally be bound by a decision of another High Court on the point, because not to follow that decision would be to cause grave prejudice to the assessee. However, in the case where there is conflict of views between different High Courts, ITO must follow the decision of the High Court within whose jurisdiction he is functioning. In view of the above settled law, I am bound to follow the jurisdictional Madras High Court in the case of SVS Oil Mills relied on by the AO and have no other alternative except to confirm the order of the AO assessing the unexplained excess stock as unexplained investment u/s 69B of the Act. The fact that the appellant had offered the entire purchases in GST returns is only to regularize the accounts after having found by the department that there existed excess stock of gold jewellery. Similar view 4 ITA No. 972/Chny/2022 has to be taken in respect of unexplained cash of Rs.5,01,438 offered by the appellant as business income but treated as unexplained money under section 69A of the Act, I therefore dismiss the grounds raised by the appellant and confirm the additions made by the AO. 4. We have heard ld. Senior DR and gone through facts and circumstances of the case. We have gone through the case records including submissions made before CIT(A) and noted that the assessee could not explain the sources of unexplained stock as well as cash and hence, we find no infirmity in the order of CIT(A) and hence, these two issues of assessee’s appeal are dismissed. 5. In the result, the appeal filed by the assessee is dismissed. Order pronounced in the open court on 5 th September, 2023 at Chennai. Sd/- Sd/- (मंजुनाथ. जी) (MANJUNATHA.G) लेखा सद᭭य/ACCOUNTANT MEMBER (महावीर ᳲसह ) (MAHAVIR SINGH) उपा᭟यᭃ /VICE PRESIDENT चे᳖ई/Chennai, ᳰदनांक/Dated, the 5 th September, 2023 RSR आदेश कᳱ ᮧितिलिप अᮕेिषत/Copy to: 1. अपीलाथᱮ/Appellant 2. ᮧ᭜यथᱮ/Respondent 3. आयकरआयुᲦ /CIT 4. िवभागीय ᮧितिनिध/DR 5. गाडᭅ फाईल/GF.