A.Godwin Maria Visuvasam, CHENNAI V. ITO, Coimbatore

ITA 979/CHNY/2014

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 4547 (ITAT-CHENNAI)
• Duration Of Justice: 3 year(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-05-2017
• Appeal Filed By: Assessee
• Bench Allotted: D
• Next Hearing Date: 21-02-2017
• Assessment Year: 2007-2008
• Appeal Filed On: 21-04-2014
• Court: TRIBUNAL
• Department Lawyers: M GOPIKRISHNA JT
• Assessee Lawyers: A S SRIRAMAN
• Keywords: Unexplained cash credit; Additional evidence; Accommodation entries; Onus to prove
• Section: 143(3); 68

Judgement Text

, / , IN THE INCOME TAX APPELLATE TRIBUNAL BENCH D/SMC, CHENNAI , BEFORE SHRI SANJAY ARORA, ACCOUNTANT MEMBER ./ITA NO.979/MDS/2014 ! ' #$' / ASSESSMENT YEAR : 2007-08 A. GODWIN MARIA VISUVASAM, 4/1, DHAMU NAGAR, KONDASAMY STREET, PULIAKULAM, COIMBATORE 641 045. [PAN: AEFPV 0151A] ( %& /APPELLANT) VS. INCOME TAX OFFICER, WARD-III(2), COIMBATORE. ( '(%& /RESPONDENT) %& ) * /APPELLANT BY : SHRI A.S.SRIRAMAN, ADVOCATE '(%& ) * /RESPONDENT BY : SHRI M.GOPI KRISHNA, JT. CIT + # ) , /DATE OF HEARING : 21.02.2017 -$ ) , /DATE OF PRONOUNCEMENT : 19.05.2017 /O R D E R PER SANJAY ARORA, AM : THIS IS AN APPEAL BY THE ASSESSEE DIRECTED AGAINST THE ORDER BY THE COMMISSIONER OF INCOME TAX (APPEALS)-I, COIMBATORE (CIT(A) FOR SHORT) DATED 14.03.2014, PARTLY ALLOWING THE ASSESSEES AP PEAL CONTESTING ITS ASSESSMENT U/S. 143(3) OF THE INCOME TAX ACT, 1961 (THE ACT HEREINAFTER) DATED 30.12.2009 FOR ASSESSMENT YEAR (AY) 2007-08. 2 ITA NO.979 /MDS/2014 (AY 2007-08) A.GODWIN MARIA VISUVASAM V. ITO 2. THE FACTS OF THE CASE ARE THAT THE ASSESSEE, AN INDIVIDUAL IN CIVIL CONSTRUCTION BUSINESS (THROUGH HIS PROPRIETARY CONC ERN, M/S. GOODWIN CONSTRUCTIONS), WAS FOUND IN THE COURSE OF THE ASSE SSMENT PROCEEDINGS TO HAVE AN AGGREGATE OUTSTANDING CREDIT BALANCES OF RS.29,5 0,300/- IN THE BALANCE SHEET OF GOODWIN CONSTRUCTIONS AS AT THE YEAR-END UNDER T HE ACCOUNT HEAD ADVANCE FROM CUSTOMERS, OF WHICH RS.24 LACS WAS RECEIVED D URING THE CURRENT YEAR FROM VARIOUS PERSONS, AS UNDER: (AMT. IN RS.) SL.NO. NAME OF THE PERSONS AMOUNT OF CREDIT 1. MR. AROGYASAMY F/O. THE ASSESSEE 250,000 2. SRI G.K. GANESAN 200,000 3. DEVA SENATHIPATHI (RENT ADVANCE) 250,000 4. MS. K.MALLIKA 100,000 5. MS. JENA GODWIN H/O. THE ASSESSEE 200,000 6. MS. PRATIMA 200,000 7. SRI. RAMACHANDRAN 200,000 8. SRI. SENTHILKUMAR 100,000 9. MR. JUDITH 100,000 10. MR. ROBIN 100,000 11. SRI. SUBRAMANI 700,000 TOTAL CREDITS 24,00,000 THE ASSESSEE EXPLAINED IT TO BE UNSECURED LOANS AS WELL AS ADVANCES FROM CUSTOMERS, RECEIVED IN CASH. HOWEVER, HE DID NOT FU RNISH ANY EVIDENCE QUA ANY OF THESE LOANS AND ADVANCES, EXCEPT THE RENT ADVANC E OF RS. 2.50 LAKHS (SR. NO.3), TOWARD WHICH A COPY OF THE LEASE AGREEMENT D ATED 01.5.2006 (ENTERED INTO BETWEEN THE ASSESSEE AND THE SAID PAYER-ADVANC ER) WAS ADDUCED. ACCEPTING THE SAME, THE BALANCE RS. 21.50 LACS WAS REGARDED A S UNEXPLAINED CASH CREDIT AND DEEMED AS THE INCOME, ASSESSING IT AT RS. 24,55 ,580/- AS AGAINST THE RETURNED 3 ITA NO.979 /MDS/2014 (AY 2007-08) A.GODWIN MARIA VISUVASAM V. ITO INCOME OF RS. 3,05,580 (VIDE RETURN OF INCOME FILED ON 11/10/2007/COPY ON RECORD). IN APPEAL, THERE WAS NO RESPONSE BY THE ASSESSEE DE SPITE BEING AFFORDED SEVERAL OPPORTUNITIES, CONSTRAINING THE LD. CIT(A) TO DECIDE THE APPEAL EX PARTE , ALBEIT ON MERITS. THERE BEING NO IMPROVEMENT IN THE ASSESSEES CASE, THE IMPUGNED ADDITION WAS CONFIRMED VIDE ORDER DATED 07 /03/2011/COPY ON RECORD). IN FURTHER APPEAL TO THE TRIBUNAL, THE ASSESSEE CON TENDED THAT ON ACCOUNT OF SOME MISTAKE BETWEEN THE ASSESSEE AND HIS COUNSEL, SHRI K. SRINIVASAN, FCA, HE WAS KEPT IN THE DARK, AND WAS NOT EVEN AWARE OF THE (FIRST) APPELLATE PROCEEDINGS, ABOUT WHICH HE CAME TO KNOW ONLY ON TH E RECEIPT OF THE SHOW CAUSE NOTICE DATED 8/3/2012 BY THE ASSESSING OFFICE R (AO). AND THAT, THEREFORE, ANOTHER OPPORTUNITY BE AFFORDED TO HIM IN THE INTER EST OF JUSTICE. THE SAME WAS ACCORDINGLY ALLOWED BY THE TRIBUNAL, SETTING ASIDE THE IMPUGNED ORDER FOR FRESH ADJUDICATION, FURTHER DIRECTING THE ASSESSEE TO COO PERATE BY NOT TAKING ANY ADJOURNMENT, VIDE ITS ORDER DATED 20/12/2013 (COPY ON RECORD). IN THE SECOND ROUND BEFORE THE LD. FIRST APPELLATE AUTHORITY, HE DECIDED THE SAME ADMITTING ADDITIONAL EVIDENCES SOUGHT TO BE RELIED UPON BY TH E ASSESSEE, WHO WAS REPRESENTED BY ANOTHER COUNSEL, SHRI C. RAMACHANDRA N, FCA, PARTLY ALLOWING THE ASSESSEES APPEAL BY CONFIRMING THE IMPUGNED AD DITION, I.E., TO THE EXTENT OF RS.13.50 LACS, SO THAT, AGGRIEVED, THE ASSESSEE IS IN SECOND APPEAL. 3. BEFORE ME, THE ASSESSEES CASE, RELYING ON THE D ECISION IN CIT V. ORISSA CORPORATION PRIVATE LIMITED [1986] 159 ITR 78 (SC), WAS THAT HE HAD BY FURNISHING THE CONFIRMATION LETTERS BY THE LOANEES- ADVANCEES (COPY ON RECORD), DISCHARGED THE ONUS CAST ON HIM BY LAW. NO ADVERSE INFERENCE COULD HAVE BEEN UNDER THE CIRCUMSTANCES DRAWN BY THE AO, WHO HAS NO T BROUGHT ANY CONTRADICTORY MATERIAL ON RECORD. THE REVENUE, ON T HE OTHER HAND, WOULD INSIST ON THE NATURE AND SOURCE OF THE IMPUGNED CREDITS BE ING NOT SATISFACTORILY 4 ITA NO.979 /MDS/2014 (AY 2007-08) A.GODWIN MARIA VISUVASAM V. ITO EXPLAINED, SO THAT IT WAS JUSTIFIED IN TREATING THE SAME AS UNEXPLAINED AND, ACCORDINGLY, TO BRING THE SAME TO TAX U/S. 68. 4. I HAVE HEARD THE PARTIES, AND PERUSED THE MATERI AL ON RECORD. 4.1 SECTION 68 READS AS UNDER: CASH CREDITS. 68. WHERE ANY SUM IS FOUND CREDITED IN THE BOOKS OF AN ASSESSEE MAINTAINED FOR ANY PREVIOUS YEAR, AND THE ASSESSEE OFFERS NO E XPLANATION ABOUT THE NATURE AND SOURCE THEREOF OR THE EXPLANATION OFFERE D BY HIM IS NOT, IN THE OPINION OF THE ASSESSING OFFICER, SATISFACTORY, THE SUM SO CREDITED MAY BE CHARGED TO INCOME-TAX AS THE INCOME OF THE ASSESSEE OF THAT PREVIOUS YEAR. THE SAME HAS BEEN EXPLAINED BY THE HON'BLE APEX COU RT PER A SERIES OF DECISIONS, FROM SOME OF WHICH WE MAY QUOT E AS UNDER: SUMATI DAYAL V. CIT [1995] 214 ITR 801 (SC) IN ALL CASES IN WHICH A RECEIPT IS SOUGHT TO BE TAX ED AS INCOME, THE BURDEN LIES ON THE DEPARTMENT TO PROVE THAT IT IS WITHIN THE TAXING PR OVISION AND IF A RECEIPT IS IN THE NATURE OF INCOME, THE BURDEN OF PROVING THAT IT IS NOT TAX ABLE BECAUSE IT FALLS WITHIN EXEMPTION PROVIDED BY THE ACT LIES UPON THE ASSESSEE. BUT, IN VIEW OF S. 68 OF THE INCOME-TAX ACT, 1961,WHERE ANY SUM IS FOUND CREDITED IN THE BOOKS O F THE ASSESSEE FOR ANY PREVIOUS YEAR THE SAME MAY BE CHARGED TO INCOME-TAX AS THE INCOME OF THE ASSESSEE OF THAT PREVIOUS YEAR IF THE EXPLANATION OFFERED BY THE ASSESSEE ABO UT THE NATURE AND SOURCE THEREOF IS, IN THE OPINION OF THE ASSESSING OFFICER, NOT SATISFACT ORY. IN SUCH A CASE THERE IS, PRIMA FACIE, EVIDENCE AGAINST THE ASSESSEE, VIZ., THE RECEIPT OF MONEY, AND IF HE FAILS TO REBUT THE SAID EVIDENCE, IT CAN BE USED AGAINST HIM BY HOLDING THA T IT WAS A RECEIPT OF AN INCOME NATURE. WHILE CONSIDERING THE EXPLANATION OF THE ASSESSEE T HE DEPARTMENT CANNOT, HOWEVER, ACT UNREASONABLY . (SEE PP. 804H, 805A-C]. A. GOVINDARAJULU MUDALIAR V. CIT [1958] 34 ITR 807 (SC) WHETHER A RECEIPT IS TO BE TREATED AS INCOME OR NOT , MUST DEPEND VERY LARGELY ON THE FACTS AND CIRCUMSTANCES OF EACH CASE. WHERE AN ASSESSEE FAILS TO PROVE SATISFACTORILY THE SOURCE AND NATURE OF CERTAIN AMOUNT OF CASH RECEIVED DURING THE ACCOUNTING YEAR, THE INCOME-TAX OFFICER IS ENTITLED TO DRAW THE INFERENCE THAT THE RECEIPTS ARE OF AN ASSE SSABLE NATURE. WHERE THE EXPLANATIONS OF THE ASSESSEE AS REGARDS A MOUNTS SHOWN IN THE ACCOUNT BOOKS OF A FIRM OF WHICH HE WAS A PARTNER, AS CREDI TS FROM HIM, WERE REJECTED AS UNTRUE: HELD, THAT IT WAS OPEN TO THE INCOME-TAX OFFICER AND THE APPELLATE TRIBUNAL TO HOLD THAT THEY REPRESENTED THE CONCEALED INCOME OF THE ASSESS EE. CIT V. P.MOHANAKALA [2007] 291 ITR 278 (SC) 5 ITA NO.979 /MDS/2014 (AY 2007-08) A.GODWIN MARIA VISUVASAM V. ITO A BARE READING OF SECTION. 68 OF THE INCOME-TAX ACT , 1961 SUGGESTS THAT (I) THERE HAS TO BE CREDIT OF AMOUNTS IN THE BOOKS MAINTAINED BY AN ASS ESSEE; (II)SUCH CREDIT HAS TO BE OF A SUM DURING THE PREVIOUS YEAR; AND (III) EITHER (A) THE ASSESSEES OFFERS NO EXPLANATION ABOUT THE NATURE AND SOURCE OF SUCH CREDIT FOUND IN THE BOOKS; OR (B) THE EXPLANATION OFFERED BY THE ASSESSEE, IN THE OPINION OF THE ASSE SSING OFFICER IS NOT SATISFACTORY. IT IS ONLY THEN THAT THE SUM SO CREDITED MAY BE CHARGED T O INCOME-TAX AS THE INCOME OF THE ASSESSEE OF THAT PREVIOUS YEAR. THE EXPRESSION 'THE ASSESSEE OFFERS NO EXPLANATION' MEANS WHERE THE ASSESSEE OFFER NO PROPER, REASONABLE AND ACCEPTABLE EXPLANATION AS REGARDS THE SUMS FOUND CREDITED IN THE BOOKS MAINTAINED BY THE ASSESSEE. THE OPINION OF THE ASSESSING OFFICER FOR NOT ACCEPTING THE EXPLANATION OFFERED B Y THE ASSESSEE AS NOT SATISFACTORY IS REQUIRED TO BE BASED ON PROPER APPRECIATION OF MATE RIAL AND OTHER ATTENDING CIRCUMSTANCES AVAILABLE ON RECORD. THE OPINION OF T HE ASSESSING OFFICER IS REQUIRED TO BE FORMED OBJECTIVELY WITH REFERENCE TO THE MATERIAL A VAILABLE ON RECORD. APPLICATION OF MIND IS THE SINE QUA NON FOR FORMING THE OPINION. IN CASES WHERE THE EXPLANATION OFFERED BY THE ASSES SEE ABOUT THE NATURE AND SOURCE OF SUMS FOUND CREDITED IN THE BOOKS IS NOT SATISFAC TORY THERE IS, PRIMA FACIE, EVIDENCE AGAINST THE ASSESSEE, VIZ., THE RECEIPT OF MONEY, T HE BURDEN IS ON THE ASSESSEE TO REBUT THE SAME, AND IF HE FAILS TO REBUT IT CAN BE HELD AGAIN ST THE ASSESSEE THAT IT WAS A RECEIPT OF AN INCOME NATURE. THE BURDEN IS ON THE ASSESSEE TO TAKE THE PLEA THAT , EVEN IF THE EXPLANATION IS NOT ACCEPTABLE, THE MATERIAL AND ATTENDING CIRCUMSTANCE S AVAILABLE ON RECORD DO NOT JUSTIFY THE SUM FOUND CREDITED IN THE BOOKS BEING TREATED A S A RECEIPT OF INCOME NATURE. KALE KHAN MOHAMMAD HANIF V. CIT [1963] 50 ITR 1 (SC) IT IS WELL ESTABLISHED THAT THE ONUS OF PROVING THE SOURCE OF A SUM OF MONEY FOUND TO HAVE BEEN RECEIVED BY THE ASSESSEE IS ON HIM. I F HE DISPUTES LIABILITY FOR TAX, IT IS FOR HIM TO SHOW EITHER THAT THE RECEIPT WAS NOT INCOME OR THAT IF IT WAS, IT WAS EXEMPT FROM TAXATION UNDER THE PROVISIONS OF THE INCOME-TAX ACT . IN THE ABSENCE OF SUCH PROOF, THE INCOME-TAX OFFICER IS ENTITLED TO TREAT IT AS TAXAB LE INCOME. THE LAW IN THE MATTER IS THUS WELL SETTLED, AND THE PRIMARY ONUS TO PROVE A CREDIT, EXPLAINING THE NATURE AND SOURCE THEREOF SA TISFACTORILY IS ON THE ASSESSEE. FURTHER, AS EXPLAINED, THE SAME IS ON THE PARAMETER S OF IDENTITY, CAPACITY AND GENUINENESS, BY LEADING RELEVANT MATERIALS, IS ON T HE ASSESSEE. IT IS ONLY THEREUPON THAT THE ASSESSEE CAN BE SAID TO HAVE DIS CHARGED THE BURDEN OF PROOF ON IT, WHICH THEN SHIFTS TO THE AO/ASSESSING AUTHOR ITY. FURTHER, THE DECISION AS TO WHETHER THE CREDIT HAS BEEN, UNDER THE FACTS AND CI RCUMSTANCES, SATISFACTORILY EXPLAINED OR NOT, IS ESSENTIALLY ONE OF FACT, EVEN AS CLARIFIED IN ORISSA CORPORATION (P.) LTD. (SUPRA). 6 ITA NO.979 /MDS/2014 (AY 2007-08) A.GODWIN MARIA VISUVASAM V. ITO 4.2 COMING TO THE FACTS OF THE CASE, THE OBSERVATIO NS AND FINDINGS BY THE LD. CIT(A) QUA EACH OF THE IMPUGNED CREDITS, WHICH ARE UNDER CHAL LENGE, ARE AS UNDER: A. SHRI AROKIYASAMY (RS. 2,50,000/-) THE ADDITION OF RS. 2,50,000/- RECEIVED AS LOAN FR OM APPELLANT'S FATHER SHRI AROKIYASAMY. DURING THE COURSE OF APPELLANT PROCEED INGS, THE APPELLANT SUBMITTED THAT HIS FATHER IS HAVING EXPLAINABLE SOU RCE OF INCOME AND-ALSO FILED THE CONFIRMATION LETTER. AS SEEN FROM THE CON FIRMATION LETTER, SHRI AROKIYASAMY STATED THAT HE PAID RS. 2,50,000/- FROM 2006-07 ON VARIOUS DATES BY CASH TO HELP HIS SON IN THE CONSTRUCTION B USINESS. THE APPELLANT HAS NOT FILED ANY EVIDENCE REGARDING THE SOURCE OF THE FATHER. AS SEEN FROM THE CONFIRMATION LETTER, HIS FATHER IS A RETIRED TEACHE R AND PAID THE AMOUNTS FROM THE GRATUITY AND PENSION SAVINGS IN THE PAST YEARS. THE APPELLANT WAS ASKED TO FURNISH THE DETAILS OF BANK ACCOUNT OF THE FATHE R AND PROVE THE SOURCES. AS SEEN FROM THE SYNDICATE BANK ACCOUNT DETAILS FILED BY THE APPELLANT, SHRI AROKIYASAMY WAS RECEIVING PENSION OF RS.7,800/- PER MONTH. APART FROM THAT THERE WAS NO OTHER CREDITS IN THE BANK ACCOUNT . THERE WERE NO CASH WITHDRAWALS TO PROVE THAT HE HAS ADVANCED AN AMOUNT OF RS. 2,50,000/- TO HIS SON. THE MODE OF RECEIPT OF LOAN IS BY CASH AND THE SOURCES OF THE FATHER COULD NOT BE PROVED WITH ANY EVIDENCE. THE ADDITION MADE BY THE ASSESSING OFFICER IS CONFIRMED. B. SHRI G.K.GANESAN (RS. 2 LAKHS) AS REGARDS ADDITION OF RS.2 LAKHS MADE BY THE ASSES SING OFFICER ON THE AMOUNT ADVANCED BY SHRI G.K. GANESAN. THE APPELLANT DURING THE COURSE OF APPELLATE PROCEEDINGS FILED A CONFIRMATION LETTE R FROM SHRI G.K. GANESAN. AS SEEN FROM THE CONFIRMATION LETTER, AN AMOUNT OF RS.2 LAKHS WAS PAID AS ADVANCE FOR THE RENOVATION WORK OF THE RESIDENTIAL HOUSE OF SHRI GANESAN. IN THE CONFIRMATION LETTER IT WAS STATED THAT SHRI GAN ESAN PAID RS.2 LAKHS ON 02.03.2007 BY CASH AND SHRI GODWIN HAS NOT DONE ANY WORK, UPTO 31.03.2007 AND KEPT AS ADVANCE. HE SUBSEQUENTLY COM PLETED THE WORK IN THE NEXT YEAR. THE AUTHORIZED REPRESENTATIVE WAS ASKED TO FURNISH ANY RECEIPTS ISSUED BY SHRI G.K. GANESAN ALONG WITH THE NATURE OF WORK CARRIED OUT. THE AUTHORIZED REPRESENTATIVE WAS ALSO ASKED TO FILE AN Y INVOICES RAISED BY THE APPELLANT IN THE NAME OF SHRI G.K. GANESAN. THE APPELLANT COULD NOT FURNISH ANY DETAILS APART FROM THE CONFIRMATION LETTER. IN VIEW OF THIS THE ADDITION MADE BY THE-ASSESSING OFFICER IS CONFIRMED. C. SHRI SUBRAMANIAN (RS. 7 LAKHS) IT IS REGARDING THE ADDITION MADE BY THE ASSESSING OFFICER FOR A SUM OF RS.7 LAKHS ON ACCOUNT OF UNEXPLAINED CREDITS RECEIV ED FROM SHRI SUBRAMANIAM. THE ASSESSING OFFICER IN THE ASSESSMEN T ORDER STATED THAT THE APPELLANT HAS NOT FILED ANY CONFIRMATION LETTER EXC EPT FILING COPY OF THE AGREEMENT DATED 07.09.2006. ACCORDING TO THE ASSESS ING OFFICER THE 7 ITA NO.979 /MDS/2014 (AY 2007-08) A.GODWIN MARIA VISUVASAM V. ITO AGREEMENT DOES NOT SHOW ANY PARTICULARS REGARDING A DVANCE MADE, DATE OF ADVANCE AND ALSO MODE OF ADVANCE. DURING THE COURSE OF APPELLATE PROCEEDINGS, THE APPELLANT FILED THE AGREEMENT DATE D 07.09.2006 WHEREIN SOME PAYMENT DETAILS WERE RECORDED. SURPRISINGLY TH ESE PAYMENT DETAILS WERE NOT AVAILABLE WHEN THE SAME AGREEMENT WAS FILE D BEFORE THE ASSESSING OFFICER. AS SEEN FROM THE SCRIBBLING ON THE AGREEME NT THE PAYMENTS WERE RECEIVED IN 2006 AND 2007. THE APPELLANT COULD NOT FURNISH ANY FURTHER EVIDENCE FOR THE AMOUNT OF RS.7 LAKHS. THE AUTHORIZ ED REPRESENTATIVE WAS ASKED TO FURNISH ALL EVIDENCE'S REGARDING THE NATUR E OF WORK DONE ALONG WITH INVOICE RAISED BY THE APPELLANT. THE APPELLANT COUL D NOT FURNISH ANY DOCUMENTARY EVIDENCE APART FROM THE AGREEMENT AS DI SCUSSED ABOVE. EVEN THE AGREEMENT FILED, THERE APPEARS TO BE NO PAYMENT DETAILS IN THE COPY FILED WITH THE ASSESSING OFFICER AND DURING THE COURSE OF APPELLATE PROCEEDINGS THE COPY OF THE AGREEMENT SHOWS SAME PAYMENT DETAIL S. DUE TO LACK OF ANY SUPPLEMENTARY EVIDENCE AND ALSO THE DIFFERENCE IN T HE AGREEMENT FILED BEFORE THE ASSESSING OFFICER AND BEFORE ME, THE PAY MENT DETAILS AS SHOWN IN THE AGREEMENT CANNOT BE CONSIDERED AS CONCLUSIVE PROOF. IN VIEW OF THAT THE ADDITION MADE BY THE ASSESSING OFFICER IS CONFI RMED. D. MISS JUDITH, SHRI ROBIN PAUL JOSEPH & SHRI ROB IN PAUL JOSEPH (RS. 1 LAKH EACH) IT IS REGARDING THE ADDITION OF RS.2 LAKHS MADE BY THE ASSESSING OFFICER ON ACCOUNT OF ADVANCE RECEIVED FROM MISS JU DITH AND SHRI RABIN PAUL JOSEPH. DURING THE COURSE APPELLATE PROCEEDING S, THE AUTHORIZED REPRESENTATIVE FILED CONFIRMATION LETTER FROM MISS JUDITH AND SHRI ROBIN PAUL JOSEPH , SHRI ROBIN PAUL JOSEPH IN HIS CONFIRMATION LETTER S UBMITTED THAT ALTERATION WORK WAS CARRIED OUT IN HIS RESIDENTIAL HOUSE BY SHRI GADWIN MARIA VISUVASAM AND HE HAS ADVANCED AN AMOUNT OF RS . 2 LAKHS, OF WHICH RS. L LAKH ON 01.01.2007 AND RS. L LAKH ON 02.03.20 07. HOWEVER, THE WORK WAS DONE TO THE TUNE OF RS. L LAKH AND THE BA LANCE WAS KEPT AS ADVANCE. THE AUTHORIZED REPRESENTATIVE SUBMITTED TH AT SHRI RABIN PAUL JOSEPH IS OUT OF THE COUNTRY. THE APPELLANT HAS NOT FILED ANY FURTHER EVIDENCE REGARDING THE NATURE OF WORK CARRIED OUT B Y THE APPELLANT AND ALSO INVOICE RAISED FOR SHRI RABIN PAUL JOSEPH. IN THE A BSENCE OF FURTHER EVIDENCE THE ADDITION OF RS.1 LAKH IS CONFIRMED. RE GARDING MISS JUDITH, IT I S SUBMITTED THAT RS. 2 LAKHS WAS GIVEN AS ADVANCE BY MISS JUDITH AND RS. L LAKH WORTH WORK WAS DONE FOR THE PREPARAT ION OF DRAWING, ESTIMATE AND APPROVAL WORK. THE APPELLANT COULD NO T FURNISH ANY EVIDENCE TO PROVE THAT ADVANCE WAS RECEIVED FROM MISS JUDITH . THE APPELLANT COULD NOT FURNISH THE INVOICE RAISED OR ANY OTHER DOCUMEN TARY EVIDENCE TO PROVE THAT THE ADVANCE WAS RECEIVED FROM MISS JUDITH. IN VIEW OF THIS THE ADDITION MADE BY THE ASSESSING OFFICER IS CONFIRMED . 4.3 TO BEGIN WITH, NONE OF THE FINDINGS BY THE LD. CIT(A), SOUGHT TO BE CHALLENGED, HAVE BEEN REBUTTED BEFORE ME. HOW, THEN , COULD THE SAME BE 8 ITA NO.979 /MDS/2014 (AY 2007-08) A.GODWIN MARIA VISUVASAM V. ITO REVERSED OR EVEN MODIFIED, I.E., UNLESS THE SAME AR E SHOWN TO BE IMBUED WITH SOME INFIRMITY? THERE IS NOTHING ON RECORD TOWARD E STABLISHING THE CREDIT- WORTHINESS OF THE CREDITORS AND/OR GENUINENESS OF T HE IMPUGNED CREDITS. MERE FURNISHING OF A CONFIRMATION LETTER BY A CREDITOR, AS IT AGAIN WELL SETTLED, DOES NOT PROVE THE CREDIT; THE SAME WOULD AT BEST ONLY ESTAB LISH THE IDENTITY OF THE CREDITORS, I.E., GIVEN THAT THE REVENUE HAS NOT REQ UIRED THE ASSESSEE TO PROVE THE SIGNATURES ON THE CONFIRMATION LETTERS, SO THAT THE SAME MAY BE REGARDED AS ACCEPTED. THERE IS, AS AFORE-SAID, NO WHISPER OF TH E CAPACITY OR GENUINENESS OF THE LOANS OR ADVANCES. WHERE CLAIMED AS ADVANCES AG AINST WORK DONE, THE ASSESSEE HAS, DESPITE BEING REQUIRED TO, WHICH THE REVENUE IS IN FACT NOT OBLIGED TO CALL FOR, FURNISH ANY EVIDENCE TOWARD THE WORK D ONE FOR THE CONCERNED CREDITORS NOR OF THE INVOICES RAISED ON THEM DURING THE RELEVANT YEAR OR EVEN SUBSEQUENTLY, WHICH WOULD NORMALLY FOLLOW AS A MATT ER OF COURSE. THE ASSESSEE FAILED TO FURNISH THE BANK PASS-BOOK EVEN IN THE CA SE OF HIS FATHER, WHO WAS FOUND TO BE IN RECEIPT OF A MONTHLY PENSION OF RS. 7800/- ONLY. WHY, HE HAS ALREADY EXTENDED A LOAN, IN NO INSUBSTANTIAL SUM, T O THE ASSESSEE IN THE PRECEDING YEAR. THE ASSESSEES WHOLE CASE IS UNSUBSTANTIATED AND WITHOUT ANY MERIT (REFER PARA ). UNDER THE CIRCUMSTANCES, I DO NOT CONSIDE R IT NECESSARY TO DWELL ON EACH OF THE IMPUGNED CREDITS SEPARATELY, ISSUING SEPARAT E FINDINGS QUA EACH, AS IS NORMALLY TO BE THE CASE AND, RELYING ON THE DECISIO N IN CIT V. K.Y. PILLIAH [1967] 63 ITR 411 (SC), ENDORSE THAT BY THE LD. CIT(A). WH Y, A PERUSAL OF THE RECORD ITSELF REVEALS SEVERAL FURTHER INCONSISTENCIES, TO SOME OF WHICH, SO AS TO HIGHLIGHT THE ASSESSEES CONDUCT AND EXPLANATIONS, REFERENCE IS MADE HEREINAFTER. THE RELIANCE ON THE DECISION IN ORISSA CORPORATION (P.) LTD. IS, AGAIN, MISPLACED. NONE OF THE CONFIRMATIONS IN THE PRESENT CASE BEAR THE PERMANENT ACCOUNT NUMBERS (PAN) OF THE CREDITORS. IN THE FACTS OF THA T CASE, THE NAME OF THE ASSESSEE DID NOT APPEAR IN THE LIST OF THE BENEFICI ARIES (OF ACCOMMODATION ENTRIES) IN WHICH THE CREDITORS WHERE PURPORTEDLY E NGAGED IN, CONFIRMATIONS 9 ITA NO.979 /MDS/2014 (AY 2007-08) A.GODWIN MARIA VISUVASAM V. ITO FROM WHOM CLEARLY REFLECTED THEIR INCOME TAX NUMBER S. WHY, THE ASSESSEE RESPONDENT MADE IT ABUNDANTLY CLEAR TO THE REVENUE THAT ALL ITS ATTEMPTS TO PRODUCE THE CREDITORS, WHO HAD BEEN REPAID, HAD FAI LED, AND THAT IT MAY SUMMON THEM. THE SAID CASE LAW IN NO MANNER SUPPORTS THE C ASE OF THE REVENUE. 4.4 BEFORE PARTING WITH THIS ORDER, AS AFORE-STATED , I MAY SET FORTH SOME OBSERVATIONS, UNDERSCORING THE ASSESSEES CASE. THE ASSESSEES BALANCE SHEET REFLECTS THE FOLLOWING ADVANCES (SCHEDULE-II THERET O): SCH-II ADVANCE RECEIVED FROM CUSTOMERS JUDITH 2,0 0,000 LAWRANCE 5,00,000 PROCURATOR 5,00,000 RAJPAUL HOMES 300 ROBIN.C 2,00,000 SUBRAMANI 15 ,50,000 THIS IS COMPLETELY IN CONTRAST WITH THE UNSECURED L OANS AND ADVANCES FURNISHED BY THE ASSESSEE DURING THE COURSE OF ASSE SSMENT PROCEEDINGS (REFER PARA 2), AS ALSO THE LETTER DATED 29/12/2009, COPY OF WHICH IS ON RECORD, AND THE RELEVANT PART OF WHICH READS AS UNDER: WITH REFERENCE TO THE ABOVE, WE OURSELF EXPLAIN THA T THE BREAK UP OF OUR UNSECURED LOAN AND ADVANCE RECEIVED FROM CUSTOMERS IS LISTED BELOW. 1. JEWEL LOAN 200000 2. AROKIASAMY 500000 3. IRUDHAYA JEYA MARRY 50000 4. G.K.GANESAN 200000 5. DEVASENATHIOPATHI 250000 6. K.MALIKA 100000 7. JENE GODWIN 250000 8. PRATIMA 200000 9. RAMACHANDRAN 200000 10. SENTHILKUMAR 100000 11. JUDITH 100000 12. ROBIN 100000 13. SUBRAMANIAN 700000 14. RAJPAL HOMES 300 10 ITA NO.979 /MDS/2014 (AY 2007-08) A.GODWIN MARIA VISUVASAM V. ITO THAT IS TO SAY, THE ASSESSEE HAS NOWHERE EXPLAINED THE SAID DIFFERENCE IN-AS- MUCH AS IT IS ONLY THE SUM ACTUALLY CREDITED IN ITS ACCOUNTS THAT NEED TO BE EXPLAINED. NO DOUBT, THE LEDGER ACCOUNTS OF THE REL EVANT CREDITORS ARE ON RECORD, AND WHICH ARE IN AGREEMENT WITH THE BREAKUP OF THE LOANS AS PROVIDED SUBSEQUENTLY, BUT THEN IT IS ONLY THE ASSESSEE WHO CAN EXPLAIN AS TO HOW ITS BALANCE SHEET, WHICH PURPORTS TO REFLECT ITS STATE OF ITS AFFAIRS AS AT THE YEAR-END PER ITS ACCOUNTS, DISCLOSES A SEPARATE AND DIFFEREN T SET OF FIGURES, INCLUDING THEIR PROFILING. IN THIS REGARD, IT IS NOTABLE THAT ALL T HE LOANS/ADVANCES ARE RECEIVED IN CASH, WITHOUT AS MUCH AS A CASH RECEIPT BEING ISSUE D, SO THE ASSESSEE COULD, AT ANY TIME, CHANGE A CREDITOR, OR THE AMOUNT ASCRIBED TO HIM, TO SUIT HIMSELF. THE REVENUE IS EQUALLY TO BLAME FOR NOT QUESTIONING THE ASSESSEE IN THIS RESPECT, WHICH CLEARLY UNDERMINES, NAY, CASTIGATES, THE ASSE SSEES CASE, WHO ONLY COULD EXPLAIN THE SAID DIFFERENCES. ANOTHER ANOMALY OBSER VED IS THAT THE ASSESSEES STAND BEFORE THE TRIBUNAL IS OF BEING UNAWARE OF TH E APPELLATE PROCEEDINGS BEFORE THE FIRST APPELLATE AUTHORITY (IN THE FIRST ROUND), AND OF HAVING BECOME AWARE OF THE SAME ONLY ON THE RECEIPT OF THE SHOW C AUSE NOTICE DATED 8/3/2012 BY THE AO. THIS IS IN COMPLETE DISAGREEMENT WITH TH E PROCEEDINGS AS RECORDED BY THE LD. CIT(A) AT PARA 4 OF HIS ORDER (DATED 7/3 /2011), WHICH IN ITS RELEVANT PART READS AS UNDER: THE CASE WAS POSTED FOR HEARING ON 15.4.2010, 03.06 .2010, 06.11.2010, 08.12.2010, 21.12.2010 AND 05.01.2011. IN RESPECT OF THESE HEARING NOTICES, THE APPELLANT FILED STEREOTYPED ADJOURNMENT LETTERS ON 8.12.2010, 21.12.2010 AND 05.01.2011 WITH THE SAME VERBATIM THAT A.R. IS NOT WELL HENCE WE OUR SELF REQUEST YOU TO ADJOURN THE APPEAL. SUBSEQUENT TO THE ADJOURNMENT, THE APPELLANT HAS NOT APPEARED FOR ANY OF THE HEARING. IN VIEW OF THIS, THE APPEAL IS DECIDED ON MERITS . IT MAY ALSO BE NECESSARY TO BRING CERTAIN OTHER INC ONSISTENCIES OBSERVED ON RECORD. WHILE THE TRIBUNAL PER ITS ORDER DATED 20/1 2/2013, IN THE FIRST ROUND, STATES OF THE ASSESSEE HAVING RETURNED AGRICULTURAL INCOME AT RS. 1.25 LAKHS FOR THE CURRENT YEAR, THERE IS NO SUCH DISCLOSURE EITHE R IN THE COMPUTATION OF INCOME 11 ITA NO.979 /MDS/2014 (AY 2007-08) A.GODWIN MARIA VISUVASAM V. ITO NOR THE INCOME TAX COMPUTATION FORMING PART OF THE ASSESSMENT ORDER DATED 30/12/2009, COLUMN 2 OF WHICH ( QUA AGRICULTURE INCOME) IS LEFT BLANK. 4.5 IN VIEW OF THE FOREGOING, I FIND NO MERIT IN TH E ASSESSEES CASE AND, CONSEQUENTLY, NO REASON TO INTERFERE WITH THE IMPUG NED ORDER. 5. IN THE RESULT, THE ASSESSEES APPEAL IS DISMISSE D. ORDER PRONOUNCED ON MAY 19, 2017 AT CHENNAI . SD/- ( ) (SANJAY ARORA) /ACCOUNTANT MEMBER /CHENNAI, . /DATED, MAY 19, 2017. EDN / ) '!,01 21$, /COPY TO: 1. %& /APPELLANT, 2. '(%& /RESPONDENT, 3. + 3, ( )/CIT(A), 4. + 3, /CIT, 5. 1#45 '!,! /DR & 6. 5 ' 6 /GF