LAL Ji Shivhare, Bhopal V. ACIT Central-1, Bhopal

ITSSA 175/Ind/2021

AI Insights

The appeals filed by the assessee, Lal Ji Shivhare, against the orders of the CIT(A)-3, Bhopal, pertained to the assessment years 2010-11 and 2013-14. The primary issues revolved around additions made by the Assessing Officer (AO) regarding unexplained investments in syndicate business, jewelry, and payments to Mahindra Finance. The tribunal admitted the appeals despite a delay in filing, citing an extension of the limitation period by the Supreme Court. For A.Y. 2013-14, the tribunal found that part of the investment in jewelry was substantiated by bank transactions and thus deleted that addition. However, the addition related to the payment to Mahindra Finance was upheld due to insufficient explanation and documentation from the assessee.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 122630 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 1 month(s) 13 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 09-02-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 16-11-2022
• Assessment Year: 2010-2011
• Appeal Filed On: 27-12-2021
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained investment; Period of limitation; Set aside
• Section: 119

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH: DB: INDORE BEFORE SHRI CHANDRA MOHAN GARG, JUDICIAL MEMBER AND SHRI BHAGIRATH MAL BIYANI, ACCOUNTANT MEMBER IT (SS) A Nos.175 & 176/Ind/2021 Assessment Years: 2010-11 & 2013-14 Lal Ji Shivhare, Bank Colony, Gandhi Colony Road, Shivpuri, MP 473551 PAN AYYPS8881M vs. The ACIT Central-1, Bhopal, (MP) 462001 (Appellant) (Respondent) For Assessee : Shri Anil Kamal Garg, CA Shri Arpit Gaur CA Shri Devendra Bansal For Revenue: Shri P.K. Mishra, CIT(DR) Date of Hearing : 17.11.2022 Date of Pronouncement : 10.02.2022 ORDER PER CHANDRA MOHAN GARG, J.M. The above captioned appeals have been filed by the Assessee against the order of Ld. CIT(A)-3, Bhopal order dated 16.03.2021 relating to Assessment Years 2010-11 & 2013-14. IT (SS) A Nos.175 & 176/Ind/2021 Assessment Years: 2010-11 & 2013-14 Page 2 of 9 2. The Ld. CIT(DR) in all fairness, agreed to the contention of Ld. AR that the learned Commissioner of Income Tax (A)-3, Bhopal passed order of both appeals on 16.03.2021 and assessee filed both appeals against the said order on 28.12.2021 by the delay of 183 days and this period is covered by the suo moto order of Hon’ble Supreme Court wherein the time limitation for filing cases/applications/appeals was extended till 15.02.2022. The period of delay falls within the said extended period of limitation. Therefore the appeal is admitted for hearing. ITA No. 175/Ind/2021 3. The grounds of appeal raised by the assessee read as under: 1. On the facts and circumstances of the case the Ld. CIT(A) has erred in confirming addition of Rs. 1116589/- on account of investment in syndicate business as unexplained investment is illegal unjustified and bad-in-law. IT (SS) A Nos.175 & 176/Ind/2021 Assessment Years: 2010-11 & 2013-14 Page 3 of 9 4. The learned AR submitted that the assessee does not want to sole ground in this appeal therefore the same is dismissed has not pressed. ITA No. 176/Ind/2021 5. The grounds of appeal raised by the assessee read as under 1. On the facts and circumstances of the case the Ld. CIT(A) has erred in confirming addition of Rs. 465330/- on account of investment in Jewellery as unexplained investment is illegal, unjustified and bad-in-law. 2. On the facts and circumstances of the case the Ld. CIT(A) has erred in confirming addition of Rs. 1018000/- on account of payment to Mahindra Finance as unexplained investment is illegal, unjustified and bad-in-law. 6. The learned AR submitted that the Ld. CIT(A) has erred in confirming addition of Rs. 4,65,330/- on account of investment in Jewellery as unexplained investment which is illegal, unjustified and bad-in-law. Therefore the same may kindly be dismissed. The learned AR also submitted that the amount of Rs. 2,31,000/- was paid through cheque which is also evident from the copy of purchase bill itself and remaining amount of Rs. 2,34,330/- was incurred out of share of profit of business of assessee which was Rs. IT (SS) A Nos.175 & 176/Ind/2021 Assessment Years: 2010-11 & 2013-14 Page 4 of 9 21,91,110/- as per AO’s findings recorded at page no. 18 of the assessment order. The learned AR also drew our attention towards page no. 119 of first appellate order and submitted that the copy of purchase bill clearly supports the factum of payment of Rs. 2,31,000/- through cheque. Therefore no addition is called for in this regards. 7. Replying to the above the Ld. CIT(DR) supported the action of the AO as well as first appellate order and submitted that the assessee could not substantiate and explain the source of purchase of jewellery therefore the same was rightly treated as unexplained investment of assessee and rightly added to the taxable income of the assessee for A.Y. 2013-14. 8. On careful consideration of rival submissions we are of the considered view that the page no. 119 of assessee paper book clearly reveals that the amount of Rs. 2,31,000/- has been paid through cheque and this amount paid through banking channel IT (SS) A Nos.175 & 176/Ind/2021 Assessment Years: 2010-11 & 2013-14 Page 5 of 9 cannot be disputed without any other positive adverse evidence against the assessee. So far as remaining part of Rs. 2,34,000/- is concerned AO himself noted undisclosed income of assessee during A.Y. 2010-11 to 2012-13 and 2014-15, 2015-16 totalling of Rs. 1,29,18,303/- which includes amount to Rs. 21,38,536/- for A.Y. 2012-13 immediately preceding A.Y. 2012-13 and Rs. 23,12,214/- during immediately succeeding A.Y. 2014-15 therefore the amount of Rs. 2,34,330/- cannot be disputed and treated as undisclosed investment in purchase of jewellery. We are in the agreement with the contention of the learned AR that the addition made by the AO and confirmed by the Ld. CIT(A) does not have lacks to stand on the principles of taxation. Therefore the AO is directed to delete the addition made on investment in purchase of jewelleries by the assessee during A.Y. 2013-14. Accordingly ground no. 1 of assessee is allowed. Ground No. 2 9. Apropos ground no. 2 learned AR submitted that the Ld. CIT(A) has erred in confirming addition of Rs. 10,18,000/- made on IT (SS) A Nos.175 & 176/Ind/2021 Assessment Years: 2010-11 & 2013-14 Page 6 of 9 account of payment to Mahindra Finance as unexplained and the same is illegal, unjustified and bad-in-law. Therefore the same may kindly be set aside. 10. Replying to the above the Ld. CIT(DR) took us through para 12 of assessment order and submitted that as per LPS-4 seized from liquor shop and office in front of Axis Bank, Near Petrol Pump, Gurudwara Chowk, A B Road, Shivpuri it was revealed that assessee has made payments amounting to Rs. 10,18,000/- to M/s. Mahindra Finance and failed to explained the source of said payment as well as purpose for which the payments have been done. The Ld. CIT(DR) submitted that the assessee filed reply dated 30.07.2018 to the show cause notice to the AO by submitting requesting to grant 15 days time to submit para wise/item wise reply to the notice and did not comply with the directions of the AO and thus failed in submitting the source of said payments to M/s. Mahindra Finance therefore the AO was right in making the additions in the hands of assessee treating the same as undisclosed IT (SS) A Nos.175 & 176/Ind/2021 Assessment Years: 2010-11 & 2013-14 Page 7 of 9 investment. The Ld. CIT(A) also strongly supported the first appellate order and submitted that the addition may kindly be confirmed by dismissing the ground of assessee. 11. On careful consideration of above submissions we note that during the search & seizure operation at the residential and office premises of assessee a document LPS-4 was seized which was showing that the assessee has made payments amounting to Rs. 10,18,800/- to M/s. Mahindra Finance and despite show cause notice by the A.O the assessee did not comply and filed any reply and sought some time to filed the reply. Finally the assessee did not comply with the directions with the AO and failed to submit the source of said payment therefore the AO was right in treating the same as undisclosed investment of assessee for A.Y. 2013-14. We are unable to see any ambiguity perversity or any other valid reason interfere with the findings recorded by the Ld. CIT(A). During the arguments the learned AR submitted that the said payment was duly recorded in the books of accounts of assessee but on being IT (SS) A Nos.175 & 176/Ind/2021 Assessment Years: 2010-11 & 2013-14 Page 8 of 9 asked by the Bench the AR could not successfully established that the said payments to M/s. Mahindra Finance was recorded in the books of accounts of assessee and source thereof was explained before the authorities below. Therefore we are inclined to agree with the findings recorded by the AO and Ld. CIT(A) and thus we uphold the same. Accordingly ground no. 2 of assessee is dismissed. 12. In the result ITA 175/Ind/2021 for A.Y. 2010-11 is dismissed and ITA 176/Ind/2021 for A.Y.2013-14 is partly allowed. Order pronounced in the open court on .02.2023. (BHAGIRATH MAL BIYANI) (CHANDRA MOHAN GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: February, 2023. NV/- Copy forwarded to : IT (SS) A Nos.175 & 176/Ind/2021 Assessment Years: 2010-11 & 2013-14 Page 9 of 9 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR // By Order // Asstt. Registrar, ITAT, Indore Date 1. Draft dictated on 03.02.2023 2. Draft placed before the author 06.02.2023 3. Draft placed before the other Member .02.2023 4. Approved Draft comes to the Sr.PS/PS .02.2023 5. Order uploaded on .02.2023 6. File sent to the Bench Clerk .02.2023 7. Date on which file goes to the Head Clerk. 8. Date on which file goes to the AR 9. Date of dispatch of Order.