V. ARUMUGAPANDI, COIMBATORE V. ASSISTANT COMMISSIONER OF INCOME TAX, COIMBATORE

ITA 975/CHNY/2020

• Counselvise Citation: [2022] 106 COUNSELVISE.COM (IT) 6507 (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: PartlyAllowed
• Bench Allotted: C
• Assessment Year: 2014-2015
• Appeal Filed On: 15-12-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained investment; Document seized; Principle of natural justice; Documents seized

Judgement Text

आयकर अपीलसं./ITA No.975/Chny/2020 िनधा रण वष /Assessment Year: 2014-15 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.975/Chny/2020 :: 2 :: 2. The CIT (Appeals) failed to appreciate the fact that there was a business transaction of money lending by the appellant to one of the clients. The loan was given by him as an individual but the recovery was made either in personal account or through firm account. The Assessing Officer did not give any sufficient time and opportunity to prove the same. As the Assessing Officer wanted to close the case before 31st of March 2016, and added the entire above loan as unproved liability or loan and brought to tax as undisclosed income under the head income from other sources. Hence the disallowance/ rejection is without appropriate justification. 3. The CIT (Appeals) failed to appreciate the fact that the Appellant has availed some jewel loans from Axis Bank by pledging his jewels and submitted the statements to the Assessing Officer. The jewel loans with the banks are permanent and they renew it every quarter. The learned ACIT has not given time and opportunity to the appellant to prove the same. The fact was explained to the Assessing Officer. 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 sources". 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 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 Loan Liabilities 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) failed to appreciate the fact that the Appellant has purchased Jewellery during the year and the bills were seized by the search officer. While attending the hearing the Appellant prepared the detailed drawings of husband and wife and the same was accepted by the Assessing Officer. All jewels purchased during the year were shown under Appellant's wife's drawing account. However the Assessing Officer rejected the same 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. 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. ITA No.975/Chny/2020 :: 3 :: 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 appeals is condoned. 4. None appeared on behalf of the assessee. It is observed that these appeals were scheduled for hearing on multiple. None appeared on the scheduled dates. Therefore, these cases are 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: Returned income 6,52,370 Add: nonexistent liability para 3.a 4,91,000 Add: nonexistent liability para 3.b 8,32,200 Add: nonexistent liability para 3.c 62,000 Add: nonexistent liability para 3.d 63,189 Add: nonexistent liability para 3.e 27,75,000 Add: nonexistent liability para 3.f 23,35,000 Add: Unaccounted purchase of jewellery 8,21,695 Assessed income 80,32,454 6. The assessee has shown vehicle loan outstanding of Rs.4,91,000/-. However, the AO noted that the assessee had paid certain amounts. Therefore, balance as on 31.03.2014 was Rs.1,80,805/-. The AO asked to explain the difference, however, the assessee could not explain the difference. Therefore, the AO added entire amount of Rs.4,91,000/-. It is mentioned in the assessment order that the assessee had not objected to the addition of Rs.4,91,000/-. The Ld.CIT(A) confirmed the addition only on the ground that the assessee had not objected to the addition ITA No.975/Chny/2020 :: 4 :: before the AO. Before us, the assessee has not filed any document to explain the difference between the actual outstanding loan and loan shown as the outstanding in the balance sheet. However, we are of the opinion that when AO has verified that assessee has re-paid Rs.1,80,805/-, the AO has no power to add this amount of Rs.1,80,805/-. The assessee has failed to explain the difference (Rs.4,91,000/- - Rs.1,80,805/- = Rs.3,10,195/-) of Rs.3,10,195/-. Therefore, the AO should have added only the amount of Rs.3,10,195/-. Accordingly, we uphold the addition of Rs.3,10,195/- only. 7. It is mentioned in the assessment order the assessee could not explain the loan of Rs.8,32,200/- claimed to be taken from Gokulam Chits. The Ld.CIT(A) has confirmed the addition as it is mentioned in the assessment order that the assessee did not object to the said addition. Before us, the assessee has not filed any documentary evidence to establish the genuineness of the transaction, identity of the creditor. The onus is on the assessee. Therefore, the said addition is upheld. 8. The assessee has shown loan outstanding from Swetha Nahar. The assessee could not establish the same by filing documentary evidence. Therefore, the AO added Rs.62,000/-. It is mentioned in the assessment order that the assessee has not objected to the said addition. The Ld.CIT(A) merely confirmed the said addition. Before us, the assessee has not filed any documentary evidence to prove genuineness of the ITA No.975/Chny/2020 :: 5 :: transaction, identity of the creditor and creditworthiness of the creditor. The onus is on the assessee. Therefore, we uphold the addition. 9. The assessee has shown an outstanding vehicle loan of Rs.36,20,475/- as on 31.03.2014. However, the AO verified from the HDFC Bank that actual outstanding was only Rs.35,57,286/-. Therefore, the AO added the difference of Rs.63,189/-. The Ld.CIT(A) merely confirmed the said addition. Before us, the assessee has not filed any documentary evidence to explain the difference. Therefore, the said addition is confirmed. 10. The assessee has shown loan outstanding of Rs.27,75,000/-. The assessee in his statement had accepted that he is unable to provide any evidence for the same. It is mentioned in the assessment order that had accepted the addition of Rs.27,75,000/-. Accordingly, the AO made addition of Rs.27,75,000/-. The Ld.CIT(A) confirmed the same. Before us, the assessee has not filed any documentary evidence to prove genuineness of the transaction, identity of the creditor and creditworthiness of the creditor. The onus is on the assessee. Therefore, we uphold the addition. 11. The assessee had taken jewel loan from Axis Bank. The assessee had shown an outstanding of jewel loan of Rs.23,25,000/- as on 31.03.2014. However, the AO verified from the Bank and noted that assessee has already repaid the said amount prior to 31.03.2014. the AO ITA No.975/Chny/2020 :: 6 :: noted that the assessee could not explain the source of the said repayments. Therefore, the AO proposed the addition of Rs.23,25,000/- which according to the AO, was accepted by the assessee. The Ld.CIT(A) confirmed the same. Before us, no documentary evidence was filed to prove the source of the amounts. Therefore, we uphold the addition. 12. As per the seized documents, Page Nos.74 & 106, the assessee had purchased jewellery of Rs.8,21,695/-. The assessee could not explain the source for the said investment. It is mentioned in the assessment order that the assessee has agreed for the addition. Therefore, the AO has made addition of Rs.8,21,695/-. The Ld.CIT(A) confirmed it. Before us, no documentary evidence was filed to prove the source for the investment. The onus is on the assessee. Therefore, the addition is upheld. 13. In the grounds of appeal, the assessee has claimed that sufficient opportunity was not granted by the Ld.CIT(A) and the AO. However, on perusal of the orders, we found that sufficient opportunity was granted. Therefore, the said ground is dismissed. 14. In the result, the appeal filed by the assessee is partly allowed. 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 ITA No.975/Chny/2020 :: 7 :: 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