NIRMALESHWER PRASAD SHARMA, BHILAI,DURG V. ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-1, RAIPUR, RAIPUR

ITA 383/RPR/2024

AI Insights

The case involves an appeal by Nirmaleshwar Prasad Sharma against the order of the Commissioner of Income-Tax (Appeals), Raipur, which sustained an ex-parte assessment order passed by the Assessing Officer (A.O) under Section 144 of the Income-tax Act, 1961. The A.O had made an addition of Rs. 46,48,425 as unrecorded investment under Section 69, following a search and seizure operation at the assessee's premises. The Tribunal noted the assessee's repeated failure to appear and provide necessary explanations during the proceedings, leading to the dismissal of the appeal.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 35775 (ITAT-RAIPUR)
• Duration Of Justice: 3 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-11-2024
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Next Hearing Date: 21-11-2024
• Assessment Year: 2014-2015
• Appeal Filed On: 20-08-2024
• Other Referred Cases: Estate of Late Tukojirao Holkar vs. CWT, Kalsaria Diamonds Pvt Ltd vs Addl.C1T
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: MOHAL AGRAWAL
• Keywords: Unexplained investment; Search and seizure
• Section: 144; 132; 69

Judgement Text

"आयकर अपीलȣय अͬधकरण Ûयायपीठ “एक-सदèय” मामला रायपुर मɅ IN THE INCOME TAX APPELLATE TRIBUNAL RAIPUR BENCH “SMC”, RAIPUR Įी रवीश सूद, ÛयाǓयक सदèय क े सम¢ BEFORE SHRI RAVISH SOOD, JUDICIAL MEMBER आयकर अपील सं. / ITA No. 383/RPR/2024 Ǔनधा[रण वष[ / Assessment Year : 2014-15 Nirmaleshwar Prasad Sharma Aditya, 1/68, Pushpak Nagar, Bilai-490 001 PAN: CMIPS6286C .......अपीलाथȸ / Appellant बनाम / V/s. The Assistant Commissioner of Income Tax, Central Circle-1, Raipur (C.G.) ……Ĥ×यथȸ / Respondent Assessee by : None Revenue by : Shri Mohal Agrawal, Sr. DR सुनवाई कȧ तारȣख / Date of Hearing : 21.11.2024 घोषणा कȧ तारȣख / Date of Pronouncement : 25.11.2024 2 Nirmaleshwar Prasad Sharma Vs. ACIT, CC-1, Raipur ITA No.383 /RPR/2024 आदेश / ORDER PER RAVISH SOOD, JM: The present appeal filed by the assessee is directed against the order passed by the Commissioner of Income-Tax (Appeals), Raipur-3, dated 24.06.2024, which in turn arises from the order passed by the A.O under Sec. 144 of the Income-tax Act, 1961 (in short ‘the Act’) dated___03.2016 for the assessment year 2014-15. The assessee has assailed the impugned order on the following grounds of appeal: “1. On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in sustaining the order of the A.O. wherein the Ld.A.O. has erred in passing the assessment order ex-parte u/s 144 of I.T. Act 1961 even though the appellant has duly complied with the terms of notice u/s.142(1)/143(2) of the Act. Therefore, ex- parte assessment order passed u/s.144 by the A.O. and sustained the same by the CIT-Appeal is unjustified, unwarranted and uncalled for and deserves to be quashed. 2. On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in sustaining the order of the A.O. wherein the A.O. has erred in making addition of Rs. 46,48,425/- on account of unrecorded investment u/s 69. The addition made by the A.O. and sustained by the CIT-A is unjustified, unwarranted and uncalled for. 3. The appellant reserves the right to add, amend or alter any grounds of appeal at any time of hearing.” 2. On a perusal of the records, it transpires that though the appeal was fixed before me for the first time on 01.10.2024, but the same in absence of any appearance on the part of the assessee was adjourned to 3 Nirmaleshwar Prasad Sharma Vs. ACIT, CC-1, Raipur ITA No.383 /RPR/2024 03.10.2024. On 03.10.2024, nobody had put up an appearance, and a perusal of the record revealed that the notice intimating the fixation of the appeal was returned back by the postal authority with an endorsement “refused”. Considering the aforesaid facts, the Ld. Sr. DR was directed to affect the service of notice through department and the matter was thereafter adjourned on two occasions i.e. on 08.10.2024 and 09.10.2024. On 09.10.2024, as there was no appearance on behalf of the assessee, therefore, the matter was once again adjourned to 21.11.2024. On 21.11.2024, when the matter was called for hearing, the Ld. Departmental Representative (for short ‘DR’) had informed that the notice intimating the fixation of the appeal for today i.e. 21.11.2024 was dropped in the email account of the counsel of the assessee, i.e. [e-mail]. 3. As the assessee despite sufficient opportunity had failed to put up an appearance, therefore, I am constrained to proceed with and dispose of the appeal as per Rule 24 of the Income Tax Appellate Tribunal Rules 1963 after hearing the respondent revenue and perusing the orders of the lower authorities. 4. On a perusal of the records, it transpires that during the course of the search and seizure proceedings conducted at the residential premises of the assessee i.e. 1/61, Sadak No.3, Ward No.58, Pushpak Nagar, Durg- Bhilai one mobile phone (IMEI Code 353824056949734) belonging to the 4 Nirmaleshwar Prasad Sharma Vs. ACIT, CC-1, Raipur ITA No.383 /RPR/2024 assessee was found and seized, which revealed certain messages regarding monetary transactions, as under: It was observed by the A.O that the aforesaid information qua the monetary transaction was passed on from aforementioned mobile phone through a whatsapp message dated 21.11.2013 to Shri Yogesh Silwasa. Also, a perusal of the assessment order revealed that on the same date, the assessee had sent one message to Shri Yogesh Silwasa intimating him that an amount of Rs.19,63,881/- was transferred in his account through cheque. The A.O referring to the aforesaid extract of the message, observed that the assessee had made the balance payment of Rs.26,84,544/- (out of an amount of Rs.46,48,425/-) to Shri Yogesh Silwasa in cash. As observed by the A.O in the assessment order, the assessee in his statement recorded 5 Nirmaleshwar Prasad Sharma Vs. ACIT, CC-1, Raipur ITA No.383 /RPR/2024 on oath u/s. 132(4) of the Act had accepted that an amount of Rs.46,48,425/- was paid by him through hawala. Although the assessee was afforded sufficient opportunity to reconcile the aforesaid transaction with his regular books of accounts but he failed to do so. The A.O based on the aforesaid facts held the cash payment of Rs.46,48,425/- as an unexplained investment of the assessee u/s. 69 of the Act. Accordingly, the A.O vide his order passed u/s.144 of the Act, dated ___03.2016 determined the income of the assessee for the subject year at Rs.48,65,690/-. 5. Aggrieved, the assessee carried the matter in appeal before the CIT(Appeals). As the assessee despite having been afforded 9 opportunities had failed to participate in the proceedings before the first appellate authority, therefore, the latter held a firm conviction that the he was not keen to pursue the appeal and thus, proceeded with and disposed of the appeal vide an ex-parte order. The CIT(Appeals), after taking cognizance of the observation of the A.O, observed that as nothing was placed on record to rebut the adverse inferences that were drawn by the A.O, therefore, he in absence of any explanation forthcoming from the assessee confirmed the addition that was made by the A.O. For the sake of clarity, the observation of the CIT(Appeals) is culled out as under: “4. Ground No. 2 :- During the course of assessment proceedings, copy of seized materials and accounts, as listed in 6 Nirmaleshwar Prasad Sharma Vs. ACIT, CC-1, Raipur ITA No.383 /RPR/2024 the inventory of Panchnama were provided to the assessee. The seized materials and books of accounts are examined and verified. On examination of corroboratory material in possession, it is noticed that common issues are involved in the entire block period. During the search and seizer operations at the residential premise of the assessee, located at 1/61, Sadak No.3, Ward No. 58, Pushpak Nagar, Durg Bhilai, one mobile phone (IMEI code 353824056949734) belonging to the assessee, was found and seized in which certain messages regarding monetary transactions were found recorded. Following is the table in the same format as found from the cell phone:- Bottidino - 4500*290=1305000 Bottidino- 6111*280= 1772190 Braccia Marina- 3050*245=747250 Braccia — 1300*245= 318500 Silver Pravitino- 800* 325= 260000 15761 4402940 Bill- 12610 1963881 245485 4402940 + 245485 _____________________________________________________________ 4648425  1963881 Cheques 2684544 Cash The above information was passed on the Yogesh Silwasa through whatsapp application message dated 21st November 2013 and further, through a message on the same date from the assessee, Shri Yogesh Silwasa was informed that Rs. 19,63,881/- have been transferred into his account through cheque. The balance amount of Rs. 26,84,544/- was given to Yogesh Silwasa in cash on account of purchase of marble amounting to Rs. 46,48,425/-. During search proceedings, statement of the assessee was recorded on oath, and he has accepted an amount of Rs. 46,48,425/- was paid by him 7 Nirmaleshwar Prasad Sharma Vs. ACIT, CC-1, Raipur ITA No.383 /RPR/2024 through hawala. As the assessee was given opportunity to explain the above transaction and to reconcile it with his regular books of accounts, but he failed to explain the nature and sources of the cash payment and source of purchase of marble, so the undersigned has considered the entire amount of cash payment of Rs. 46,48,425/- as unrecorded investment made by the assessee u/s 69 for the F.Y. 2013-14 relevant for the A.Y. 2014-15. Merely explanation, without having corroboratory evidence is not sufficient to justify his unexplained money. The onus lies with the assessee and was not discharged. Thus. Rs. 46,48,425/- is added to the total income of the assessee. During the appeal proceedings, the appellant has not filed any written submission, the appellant has shown that he is not interested in pursuing the appeal. The laws aid those who are vigilant, not those who sleep upon their rights. Under these circumstances, in my opinion the appellant is not interest in the appeal. In view of these facts, the appeal of the appellant deserves to be dismissed as it cannot be kept pending adjudication for indefinite period. It is the duty of the appellant to make necessary arrangements for effective representation on the appointed date. Mere filing of an appeal is not enough, rather it requires effective hearing also. Therefore, the appeal is found liable for dismissal. This view is supported by the following judicial pronouncements:- (i) In the case of Estate of Late Tukojirao Holkar vs. CWT 223 ITR 480 (M.P.) Hon'ble MP High Court has held as under:- 4. As held in Jamunadas v. CST [1993] 38 MPLJ 462 (MP) and the common order passed in Miscellaneous Civil Case No. 303 of 1986--B. R. Phosphate v. CST and Miscellaneous Civil Case No. 304 of 1986--B. R. Phosphate v. CST by this court on November 6, 1995, this court is not bound to answer the reference. In Jamunadas v. CST [1993] 38 MPLJ 462, it is held as under \" For the foregoing reasons, we are of the opinion that if the party at whose instance the reference is made, fails to appear at the hearing, or fails taking steps for preparation of the paper books so as to enable hearing of the reference, this court is not bound to answer the reference. We refuse to answer the reference and also saddle the assessee with the costs of the Department quantified at Rs. 150.\" (ii) In the case of Kalsaria Diamonds Pvt Ltd vs Addl.C1T in ITA NO 1783/Mum/2012 dated 05.09.2013, Hon'ble Mumbai ITAT 8 Nirmaleshwar Prasad Sharma Vs. ACIT, CC-1, Raipur ITA No.383 /RPR/2024 placing reliance on decision of Hon'ble MP High court in the case of Estate of Late Tukojirao Holkar (supra) has held as under:- \"2. Earlier this appeal was fixed for hearing on 21/3/2013, when nobody attended on behalf of the assessee, therefore, as per directions of the Tribunal the matter was adjourned to 05/09/2013 and notice was directed to be issued through RPAD. Accordingly, notice was sent through RPAD at the address given in Form No.36. However, the said notice was received back from the postal authorities with the remark \"Unclaimed -Return to Sender\". The assessee has not intimated any change of address to the registry. Adjournment application has also not been filed. Therefore, in the facts and circumstances of the case, we presume that the assessee is not interested in prosecuting this appeal. Following the decision of the Tribunal reported in the case of CIT vs. Multiplan India (P) Ltd.38 lTD 320 (Del) and the decision of the Hon'ble Madhya Pradesh High Court in the case of Estate of Late Tukojirao Holkar vs. CWT, 223 ITR 480 (M.P) we dismiss the appeal filed by the assessee in limine.\" No explanation has been furnished by the appellant at this stage on the findings and conclusion of the Ld. AO. In absence of any explanation & on the basis of facts gathered and discussed by the Ld. AO, considering entire facts in the assessment order. I find that Ld. AO is justified in assessing the total income of the appellant as discussed above. when repeated opportunity in this regard was provided clearly shows that the appellant is not interested in pursuing the appeal. In these circumstances, I have no option but to confirm the addition made by the Ld. AO and dismiss the grounds of appeal of the appellant. Respectfully, following the view taken in the case cited above, the appeal filed by the appellant deserves to be dismissed. Therefore, appeal on these grounds is dismissed.” 6. The assessee being aggrieved with the order of the CIT(Appeals) has carried the matter in appeal before the Tribunal. 7. Admittedly, the retrieved messages from the mobile phone of the assessee (IMEI Code 353824056949734) that was found and seized in the 9 Nirmaleshwar Prasad Sharma Vs. ACIT, CC-1, Raipur ITA No.383 /RPR/2024 course of search and seizure proceedings conducted u/s. 132 of the Act at the residential premises of the assessee on 14.01.2014 made a reference about certain monetary transactions. Also, a message retrieved from the aforesaid mobile dated 21.11.2013 revealed that an information was passed on from the aforesaid mobile belonging to the assessee to Shri Yogesh Silwasa that a payment of Rs.19,63,881/- was transferred to latter’s account through cheque. The A.O, based on the aforesaid information observed that the assessee had made an unexplained investment towards purchase of marble from Shri Yogesh Silwasa, and the payment was made in two tranches, viz. (i) through cheque: Rs.19,63,881/-; and (ii) through cash : Rs.26,84,544/-. At this stage, I may herein observe that not only the assessee had failed to reconcile the aforesaid transactions with his regular books of accounts but as observed by the A.O, he had in his statement recorded u/s. 132(4) of the Act accepted that the aforementioned amount of Rs.46,48,425/- was paid by him through hawala. The A.O considering the aforesaid factual position had held the entire amount of payment aggregating to Rs.46,48,425/- as the assessee’s unrecorded investment within the meaning of Section 69 of the Act. 8. Also, on appeal, the CIT(Appeals) in absence of any explanation forthcoming as regards the “nature” and “source” of the aforesaid investment had upheld the addition made by the A.O. 10 Nirmaleshwar Prasad Sharma Vs. ACIT, CC-1, Raipur ITA No.383 /RPR/2024 9. I have thoughtfully considered the facts involved in the present case in the backdrop of the orders of the lower authorities. At this stage, it would be relevant to point out that as observed by the A.O, the assessee in the course of the search and seizure proceedings despite having been afforded sufficient opportunity had failed to reconcile the payment of Rs.46,48,425/- with his regular books of accounts. Accordingly, I am of the view that the investment of Rs.46,48,425/- made by the assessee towards purchase of marbles was not recorded in his books of accounts. As the assessee had till date failed to come forth with any explanation about the “nature” and “source” of acquisition of the valuable articles i.e. marbles, therefore, I, find no infirmity in the view taken by the lower authorities who had rightly held the same as an unexplained investment made by him u/s.69 of the Act. Accordingly, I, thus, in terms of my aforesaid observations, finding no infirmity in the view taken by the CIT(Appeals), uphold the same. 10. In the result, appeal of the assessee is dismissed in terms of the aforesaid observations. Order pronounced in open court on 25th day of November, 2024. Sd/- (रवीश सूद /RAVISH SOOD) ÛयाǓयक सदèय/JUDICIAL MEMBER रायपुर/ RAIPUR ; Ǒदनांक / Dated : 25th November, 2024. 11 Nirmaleshwar Prasad Sharma Vs. ACIT, CC-1, Raipur ITA No.383 /RPR/2024 ***SB, Sr. PS आदेश कȧ ĤǓतͧलͪप अĒेͪषत / Copy of the Order forwarded to : 1. अपीलाथȸ / The Appellant. 2. Ĥ×यथȸ / The Respondent. 3. The CIT(Appeals)-1, Raipur (C.G) 4. The Pr. CIT-1, Raipur (C.G) 5. ͪवभागीय ĤǓतǓनͬध, आयकर अपीलȣय अͬधकरण,रायपुर बɅच, रायपुर / DR, ITAT, Raipur Bench, Raipur. 6. गाड[ फ़ाइल / Guard File. आदेशानुसार / BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलȣय अͬधकरण, रायपुर / ITAT, Raipur. "