V.ARUMUGAPANDI, COIMBATORE V. THE ASSISTANT COMMISSIONER OF INCOMETAX, CENTR A L CIRCLE-1, COIMBATORE

ITA 973/CHNY/2020

• Counselvise Citation: [2022] 106 COUNSELVISE.COM (IT) 6509 (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: 2012-2013
• Appeal Filed On: 15-12-2020
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Depreciation; Principle of natural justice

Judgement Text

आयकर अपीलसं./ITA No.973/Chny/2020 िनधा रण वष /Assessment Year: 2012-13 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 years 2009-10 to 2014-2015. 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. 2. The CIT (Appeals) failed to appreciate the fact that Appellant has purchased a property on 15.11.2011 at pollachi. The property was purchased only to pledge the property document with chit company to avail the prized money for business purpose. The fact is that there was no real cash transactions taken place instead a promissory note was given 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.973/Chny/2020 :: 2 :: by the Appellant to the seller to payout the consideration over the period of 5 years. But for the registration purpose only, the word was added as the entire consideration was paid in cash. The date of cash paid on various dates were not mentioned in the document is clear evidence for the same. The property was purchased by the Appellant for his personal use and never used it for business purpose and claimed depreciation on it. The fact was explained to the Assessing Officer. However the CIT (Appeals) has rejected the same and added the consideration for purchase of property of " Income from Other Sources". Hence the disallowance/ rejection is without appropriate justification. 3. 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. 4. The CIT (Appeals) erred in sustaining Investment in Immovable Property on reaching irrelevant conclusions while sustaining such sum in the computation of taxable total income • without assigning proper reasons and justifications. 5. The CIT (Appeals) ought to have appreciated the fact that the Appellant is doing financial service on small basis by borrowing money from his friends, relatives and pledging own/relatives/friends jewels with banks. As business requires continuous flow of money, the Appellant pledge the jewels either with the bank or with the private parties. Hand Loan availed copies produced to prove but the same was not considered properly. Hence the disallowance/ rejection is without appropriate justification. 6. The CIT (Appeals) erred in sustaining Unproved Loan on reaching irrelevant conclusions while sustaining such sum in the computation of taxable total income without assigning proper reasons and justifications. 7. 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. 8. The CIT (Appeals) failed to appreciate the explanations offered. 9. 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 initiation of the proceedings would vitiate the consequential search assessment on various facts. 10. The impugned order and the assessment order is a non-speaking order merely confirms the demand that the Appellant has not offered any explanation and not objected to the additions is wholly unsustainable and would be nullity in law. 11. 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. 12. The CIT (Appeals) passed the impugned order without hearing the Appellant in violation of principles of natural justice would be nullity in law. 13. 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 appeal is condoned. ITA No.973/Chny/2020 :: 3 :: 4. None appeared on behalf of the assessee. It is observed that this appeal was scheduled for hearing on multiple occasions. 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. There are following additions in the assessment order: Investment in property Rs.16,50,000/- Unproved loan Rs.7,90,000/- 5.1 It is mentioned in the assessment order that assessee has purchased immovable property from Mr.Kannan, for a consideration of Rs.16,50,000/-, by a registered sale deed. As per the registered sale deed Rs.16,50,000/- was paid in cash. The AO asked to produce Mr.Kannan. Assessee failed to produce Mr.Kannan. Therefore, the AO did not accept assessee’s explanation that Rs.16,50,000/- were outstanding payable to Mr.Kannan. The AO added Rs.16,50,000/-. Before the Ld.CIT(A), assessee could not substantiate his claim. Hence, Ld.CIT(A) confirmed the addition. 5.2 Before us, the assessee has not produced any evidence to substantiate his claim that Rs.16,50,000/- were outstanding and not actually paid to Mr.Kannan. It is important to understand here that the sale deed is duly registered. The said sale deed mentions payment of Rs.16,50,000/- in cash. In the absence of any other documentary evidence, the content of sale deed has to be believed. Therefore, we ITA No.973/Chny/2020 :: 4 :: upheld the addition of Rs.16,50,000/-. Thus, Ground No.2 of the assessee is dismissed. 6. Ground Nos.1, 3, 4, 7-9, 11 & 13, are general in nature. Hence, no adjudication is required. Hence, these grounds are dismissed. 7. Ground No.5, 6 are regarding addition of Rs.7,90,000/- on account of deficit in balance sheet on account of non-existent loan. It is mentioned in the assessment order that as per the balance sheet as on 31.03.2012, there was a loan of Rs.7,90,000/-, the assessee claimed that Rs.7,90,000/- were borrowed from ICICI Bank. However, it was observed from the loan statement that assessee had borrowed loan of Rs.7,90,000/- from ICICI Bank on 04.08.2011 and repaid it on 22.11.2011. Thus, as on 31.03.2012 there was no loan outstanding. However, assessee had shown Rs.7,90,000/- as outstanding loan. Since, assessee failed to explain the said transaction of Rs.7,90,000/-, AO added the said amount. Before Ld.CIT(A), assessee failed to file any evidence. Hence, the Ld.CIT(A) confirmed the addition. 8. Before us, no evidence has been filed. The assessee has failed to explain the loan amount appearing in the balance sheet. The onus was on assessee to explain. Hence, the said addition is confirmed. Therefore, Ground Nos.5 & 6 are dismissed. Ground Nos.10 & 12: 9. The assessee claimed that the AO passed a non-speaking order, hence, it is not maintainable. However, we have read the assessment ITA No.973/Chny/2020 :: 5 :: order and it is observed that on the facts and circumstances of the case, the AO has passed a speaking order. Therefore, Ground No.10 is dismissed. 10. In Ground No.12, assessee has claimed that opportunity was not granted by Ld.CIT(A). However, it is observed that Ld.CIT(A) had given substantial opportunities. Therefore, this ground is dismissed. 11. In the result, the appeal 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