V. ARUMUGAPANDI, COIMBATORE V. THE ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-1, COIMBATORE

ITA 974/CHNY/2020

• Counselvise Citation: [2022] 106 COUNSELVISE.COM (IT) 6508 (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: 2013-2014
• Appeal Filed On: 15-12-2020
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Unexplained investment; Document seized; Principle of natural justice; Documents seized

Judgement Text

आयकर अपीलसं./ITA No.974/Chny/2020 िनधा रण वष /Assessment Year: 2013-14 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 2014-15. 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.974/Chny/2020 :: 2 :: 2. The CIT (Appeals) failed to appreciate the facts that the loan of Rs.20 lakh was taken to purchase 2nd hand Benz car as on 31.03.2013 3 EMI @ Rs.53,400/- was paid. The loan outstanding as per EMI schedule and the statement of affairs as on 31.03.2013 was Rs.19,02,486/-. Hence there is no deficit of Rs.53,486/-. 3. The CIT (Appeals) failed to appreciate 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. The Appellant had repaid the loan received then and there out of other borrowings by rotation and will replace the existing loans with new one. Thus, repaid the loan of Rs. 12,34,OOO/- out of his other borrowings. However the Assessing Officer has rejected the same and added the loan as unproved loan and brought to tax and added under the head "Income from other Source" hence the disallowance/ rejection is without appropriate Justification. 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 the CIT (Appeals) 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 Unproved Liabilities on reaching irrelevant conclusions while sustaining such sum drawing in the computation of taxable total income without assigning proper reasons and justifications. 6. The CIT (Appeals) failed to appreciate the facts that the Appellant submitted the detailed drawings of the Appellant and his wife Mrs.Brinthalaxmi including the house hold expenses shared by both husband and wife and it was accepted by the Assessing Officer. It was submitted that all Jewels purchased during the year were shown under Mrs.Brinthalaxmi's drawing account and it was well within the limit of her total drawings. However the Assessing Officer rejected and brought to tax as unexplained investment under the head "Income from other sources". Hence the disallowance/ rejection is without appropriate Justification. 7. 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. 8. 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. 9. The CIT (Appeals) failed to appreciate the explanations offered. 10. 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. ITA No.974/Chny/2020 :: 3 :: 11. 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. 12. 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. 13. The CIT (Appeals) passed the impugned order without hearing the Appellant in violation of principles of natural justice would be nullity in law. 14. 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. 4. None appeared on behalf of the assessee. It is observed that this appeal was scheduled for hearing on multiple occasions. None appeared on scheduled dates. 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 AO has made the following additions in the assessment order: Income returned in response to Notice u/s.153A 5,44,510 Add: Deficit in statement of affairs on account of overstated loan liability Para 3.a 52,486 Add: Deficit in statement of affairs on account of non- existent gold loans Para 3.b 12,34,000 Add: Unaccounted purchase of jewellery 4,93,424 Assessed income 23,24,420 6. It is mentioned in the assessment order that assessee has shown outstanding loan of Rs.19,02,486/- as on 31.3.2013 , however the actual outstanding was Rs.1852000/-, thus there was difference of Rs.52486/-. ITA No.974/Chny/2020 :: 4 :: Since assessee could not explain the difference, the AO added the amount. The CIT(A) confirmed it. Before us the Assessee has not filed any evidence to explain the difference. Therefore, we uphold the addition of Rs.52486/-. 7. It is also mentioned in the assessment order that assessee had obtain loan from the Axis bank which was shown as outstanding in the balance sheet. The amount shown as outstanding was Rs.12,34,000/-. However, the AO collected information from the Bank and noted that the loan was repaid before 28/2/2013. Thus there was no outstanding as on 31 st March. Since the Assessee could not explain it, the AO added the amount. The CIT(A) confirmed it. Before us the assessee has not filed any documents to substantiate the outstanding amount. The onus is on assessee. Therefore, we uphold the addition of Rs.12,34,000/-. 8. As per the seized documents the assessee had purchased jewellary of Rs.493424 on the dates mentioned in the seized documents. The assessee in his statement accepted that the source of these investments could not be explained. Therefore, the AO added the amount as unexplained investment. The CIT(A) has confirmed the addition. Before us the Assessee has not filed any documents to explain the source of the investments. The onus is on the assessee to explain the source of the investments. The assessee failed to explain the source of the investment. Therefore we uphold the addition of Rs.4,93,424/-. ITA No.974/Chny/2020 :: 5 :: 9. It is observed by us that the AO and the CIT(A) had given opportunity to the assessee. On the facts and circumstances of the case both the AO and CIT(A) has passed the speaking order. Therefore, all the grounds of appeal of the assessee are dismissed. 10. 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