Shri Bharat Kumar Omprakash Agrawal, Deesa V. The ACIT, Central Circle-2(1), Ahmedabad

ITSSA 394/AHD/2019

• Counselvise Citation: [2022] 104 COUNSELVISE.COM (IT) 3010 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 17 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 30-08-2022
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 12-06-2022
• Assessment Year: 2016-2017
• Appeal Filed On: 12-08-2019
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Section: 132; 139; 153A; 143(2)

Judgement Text

THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “B” BENCH Before: Shri P.M. Jagtap, Vice President And Shri Siddhartha Nautiyal, Judicial Member Shri Bharat Ku mar Omp rakash Agar w al, Agarwal Co mplex, Nr. Lions Hall, Chandralik Ro ad, Deesa, Gujarat-3 85535 PAN: ADCP A438 2J (Appellant) Vs The ACIT, Central Circle-2(1), Ah med abad (Resp ondent) Asses see b y : Shri S. L. Podda r, A. R. Revenue by : Shri J ames Kurian, CIT-D. R. Date of hearing : 13-06 -2022 Date of pronouncement : 31-08 -2022 आदेश/ORDER PER : SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER:- This is an appeal filed by the assessee against the order of the ld. Commissioner of Income Tax (Appeals)-12, Ahmedabad in Appeal no. CIT(A)-12/173 to 178/CC-2(1)/2018-19 vide order dated 17/07/2019 passed for the assessment year 2016-17. IT(SS)A No. 394/Ahd/2019 Assessment Year 2016-17 I.T(SS).A No. 394/Ahd/2019 A.Y. 2016-17 Page No. Bharat Kumar Omprakash Agarwal vs. ACIT 2 2. The assessee has taken the following Grounds of Appeal: “1. Under the facts and Circumstances of the case the learned CIT(A) has erred in confirming the action of the learned AO in passing the order u/s 143(3)/153A of the Income Tax Act, 1961 which is void ab-initio and deserves to be quashed. 2. Under the facts and circumstances of the case the learned CIT(A) has erred in confirming the addition of Rs. 9,73,240/- on account of cash payment to Shri Suresh Bhai Fateh Singh Goel. 3. The assessee craves your indulgence to add amend or alter all or any grounds of appeal before or at the time of hearing.” 3. The brief facts of the case are that a search action under section u/s 132 of the Act was carried out in the group cases of DRA Group on 21-10- 2016. A search warrant of authorisation under section 132 of the Act was issued in the name of the assessee. The notice under section 153A of the Act was issued to the assessee on 07-03-2017. The assessee had furnished his return of income under section 139 of the Act on 21-01-2017 declaring total income of 98,83,550/ -. During the course of survey proceedings at the branch office of DRAIPL, a sale deed bearing number 1282/15 of the property situated at Moje: Sankarda, Vadodara was impounded. On verification of this sale deed, it was noticed that this property was purchased by the assessee for a consideration of 32,04,000/- from Shri Sureshbhai Gohil. On verification of the ledger account submitted by the assessee, the AO noticed that the assessee submitted ledger accounts of Shri Sureshbhai Gohil, wherein payments of 24,19,000/- was made by cheques. However, the AO noted that apart from the cheque payments mentioned above various I.T(SS).A No. 394/Ahd/2019 A.Y. 2016-17 Page No. Bharat Kumar Omprakash Agarwal vs. ACIT 3 cash payments amounting to 7,84,000/- were made to Shri Sureshbhai Gohil which were not recorded in the cash book furnished by the assessee. Apart from the above, the AO observed that the assessee had paid stamp duty of 1,57,000/- and registration of 32,240/- for the above land, but again the same was not recorded in the cash book furnished to the AO. In response, the assessee submitted that the assessee is not an auditable concern and therefore it is not required to maintain books of accounts. Regarding the cash payment of 7,84,000/- to Shri Sureshbhai Gohil, the assessee submitted that the same was paid in cash in 19 instalments of 40,000/-and 24,000/-. Further, regarding the payment of stamp duty of 1,57,000/ - and registration of 32,240/- for the above land, the assessee submitted that the same had been paid in cash to the State Government. The assessee submitted a revised cash book (reflecting the above payments) along with an affidavit of the accountant of the assessee to the effect that the earlier cashbook submitted before AO contained incorrect data. However, the AO rejected the previous cash book placed on record by the assessee on the ground that the same was evidently manipulated and hence could not be relied upon. Accordingly, in absence of any explanation and in view of the fact that the assessee had made certain payments outside the books of accounts (cashbook) furnished during the course of assessment, the AO made addition of 9,73,240/ - ( 7,84,000/ - + 1,57,000/ - + 32,240/ -) as unaccounted cash of the assessee. 4. In appeal, the assessee challenged the jurisdiction to frame assessment under section 153A of the Act. The Ld. CIT(Appeals) however rejected this objection on the ground that for assessment year 2016-17, the time-limit for I.T(SS).A No. 394/Ahd/2019 A.Y. 2016-17 Page No. Bharat Kumar Omprakash Agarwal vs. ACIT 4 issue of notice under section 143(2) of the Act had not yet elapsed on the date of search, and therefore the impugned assessment year is an abated assessment year. Accordingly, the AO is not constrained to confine the additions to the incriminating material found during the course of search. On merits, Ld. CIT(Appeals) dismissed the appeal of the assessee with the following observations: “9.6 During the appeal proceedings it has been submitted by the appellant that the assessee had submitted that the payments were made in cash in installment which were duly recorded in cashbook and the cash-books were also submitted to the AO. The assessee had paid Rs. 7,84,000/- in 19 installments of Rs. 40000/- and Rs. 24000/- but the AO did not accept the contention on the ground that the cashbook filed by him was not genuine and was manipulated one. It is the assertion of the appellant that such action of the AO was without giving any reason for the same and therefore the addition on this account deserved to be deleted. 9.7 I have carefully perused the findings of the AO and the appellant's submissions. Not only there were seized/impounded materials found during the course of search and survey, but the AO had the jurisdiction to make enquiries for A.Y. 2016-17 and additions based on such enquiries beyond incriminating material. Thus in principle, the addition does not suffer from any infirmity on its legality. I am also of the view that it was the primary onus of the appellant to satisfy the AO that the amounts paid in cash were out of disclosed sources but the appellant was not maintaining books of accounts in his personal capacity and that the cash book prepared and submitted earlier during the assessment proceedings was subsequently revised, the cash books had no credibility. Following the legal maxim "falsus in unofalsus in omnibus", I hold that if an explanation is false once, the subsequent explanations are also likely to be false and it is applicable in the circumstance of the appellant. In my considered view the AO is justified in not accepting the revised cash book and the addition made is legally valid. I find no reason to I.T(SS).A No. 394/Ahd/2019 A.Y. 2016-17 Page No. Bharat Kumar Omprakash Agarwal vs. ACIT 5 interfere with the addition of Rs.9,73,240/-. The addition is confirmed and the related ground is rejected.” 5. The assessee is in appeal before us against the aforesaid order of the Ld. CIT(Appeals). Ground number 1: Ld. CIT(Appeals) erred in confirming action of AO in passing order under section 143(3)/ 153A of the Act: 6. At the outset, the counsel for the assessee challenged the assessment order passed under section 143(3)/ 153A of the Act on the ground that it is void since it was not based on any incriminating material found during the course of search. However, we observe that the impugned assessment year 2016-17 is an abated year, as correctly pointed out by the Ld. CIT(Appeals) in his appellate order, since the time-limit for issuance of notice under section 143(2) of the Act had not yet elapsed at the time when the search was carried out. Accordingly, the additions could not be restricted to any incriminating material found during the course of search alone. Without prejudice to the above, on facts, we are not in agreement with the arguments of the counsel for the assessee that the assessment was not framed on the basis of incriminating material found during the course of search. The additions were made on the basis of Sale Deed discovered during the course of search, and hence in our view, the assessment was framed on the basis of incriminating material found during the course of search. We find no merit in the contention of the assessee that the assessment was not framed on the basis of incriminating material found in search. I.T(SS).A No. 394/Ahd/2019 A.Y. 2016-17 Page No. Bharat Kumar Omprakash Agarwal vs. ACIT 6 7. Accordingly, ground number 1 of the assessee’s appeal is dismissed. Ground number 2: Ld. CIT(Appeals) erred in confirming addition of 9, 73,240/- on account of cash payment to Shri Sureshbhai Gohil 8. Before us, the counsel for the assessee primarily reiterated the arguments taken before Ld. CIT(Appeals) in appellate proceedings. He reiterated that the assessee is not required to maintain books of accounts and submitted that the assessee had duly filed affidavit of the accountant admitting the mistake in the earlier cashbook, which was purely inadvertent. The counsel for the assessee further drew our attention to page 10 of the paper book and submitted that the assessee was having opening cash balance of Rs. 6,94,975/- and therefore there was always adequate cash balances the hands of assessee. In response, the Ld. DR drew attention to 2.4 of the assessment order and submitted that from the initial stages of assessment itself, the assessee had submitted a manipulated cashbook, which was sought to be legalised by placing on record a revised cash book correcting the mistakes pointed out by the AO in the earlier cashbook. The DR further placed reliance on the observations made by Ld. CIT(Appeals) in the appellate order, while dismissing the assessee’s appeal. 9. We have heard the rival contentions and perused the material on record. In our considered view, in the instant set of facts, we observe that the assessee had made certain payments amounting to 9,73,240/- outside the books of accounts (towards purchase of land, stamp duty and registration charges). During the course of assessment, the AO observed that the cash book submitted by the assessee was evidently manipulated and hence he I.T(SS).A No. 394/Ahd/2019 A.Y. 2016-17 Page No. Bharat Kumar Omprakash Agarwal vs. ACIT 7 refused to place reliance on the same. Even the assessee during the course of assessment proceedings admitted that the cash book submitted before the AO has been incorrectly prepared and accordingly filed an affidavit of the accountant of the assessee duly admitting the mistake in preparing the passbook (and subsequently assessee prepared a revised passbook accounting for the above cash payments). Accordingly, admittedly, the aforesaid payments made in cash were outside the books of account/cashbook initially furnished by the assessee during the course of assessment proceedings. We are unable to accept the argument of the counsel for the assessee in which he drew our attention to page 10 of the paper book and submitted that the assessee was having balance of Rs. 6,94,975/- and therefore the was always adequate cash balances the hands of assessee since the subsequent cash book placed on record by the assessee cannot be relied upon, especially in light of the fact when the assessee has no valid reason for initially furnishing incorrect cashbook, except for the affidavit of the assessee’s own accountant admitting the fact of preparing incorrect cashbook. In light of the instant facts, we find no infirmity in the order of the Ld. CIT(Appeals) in dismissing the appeal of the assessee on the ground that the AO is justified in not accepting revised cashbook and Ld. CIT(Appeals) has not erred in facts and in law in upholding the order of the assessing officer on the ground that assessee had made certain payments outside the books of accounts for which assessee had no explanation and accordingly the same was to be treated as unaccounted cash of the assessee. 10. In the result, ground number 2 of the assessee’s appeal is dismissed. I.T(SS).A No. 394/Ahd/2019 A.Y. 2016-17 Page No. Bharat Kumar Omprakash Agarwal vs. ACIT 8 11. In the combined result, the assessee’s appeal is dismissed. Order pronounced in the open court on 31-08-2022 Sd/- Sd/- (P.M. JAGTAP) (SIDDHARTHA NAUTIYAL) VICE PRESIDENT JUDICIAL MEMBER Ahmedabad : Dated 31/08/2022 आदेश क त ल प अ े षत / Copy of Order Forwarded to:- 1. Assessee 2. Revenue 3. Concerned CIT 4. CIT (A) 5. DR, ITAT, Ahmedabad 6. Guard file. By order/ आदेश से, उप/सहायक पंजीकार आयकर अपील य अ धकरण, अहमदाबाद