AI Insights
The case involves Sharad Vishwakarma, who appealed against the order of the Commissioner of Income-Tax (Appeals), which confirmed the addition of Rs.19,71,000 to his income for the assessment year 2014-15. This addition was initially made by the A.O under sections 147, 144, and 144B of the Income-tax Act, 1961, based on unexplained cash deposits in the assessee's bank account. The ITAT found that while the assessee had some plausible sources for the cash deposits, he failed to substantiate these claims adequately, leading to the reduction of the addition but not its complete removal.
Appeal Details
Counselvise Citation
[2024] 140 COUNSELVISE.COM (IT) 469745 (ITAT-RAIPUR)
Assessee PAN
Bench
Appeal Number
CRN Number
Duration Of Justice
15 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
28-11-2024
Appeal Filed By
Assessee
Order Result
Partly Allowed
Bench Allotted
SMC
Next Hearing Date
26-11-2024
Assessment Year
2014-2015
Appeal Filed On
13-11-2024
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.484/RPR/2024 Ǔनधा[रण वष[ / Assessment Year : 2014-15 Sharad Vishwakarma Teli Para, Azad Chowk, Rajnandgaon (C.G.)-491 441 PAN: ADPPV9655G .......अपीलाथȸ / Appellant बनाम / V/s. The Income Tax Officer, Ward-1, Rajnandgaon (C.G.) ……Ĥ×यथȸ / Respondent Assessee by : Shri Deepak Meghani, CA Revenue by : Dr. Priyanka Patel, Sr. DR सुनवाई कȧ तारȣख / Date of Hearing : 26.11.2024 घोषणा कȧ तारȣख / Date of Pronouncement : 28.11.2024 2 Sharad Vishwakarma Vs. ITO, Ward-1, Rajnandgaon ITA No. 484/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), National Faceless Appeal Center (NFAC), Delhi, dated 18.09.2024, which in turn arises from the order passed by the A.O under Sec. 147 r.w.s.144 r.w.s.144B of the Income-tax Act, 1961 (in short ‘the Act’) dated 24.09.2021 for the assessment year 2014-15. The assessee has assailed the impugned order on the following grounds of appeal: “1. The Ld. CIT(A) erred in confirming addition of Rs.19,71,000/- made by the A.O on account of cash deposited in bank account of the appellant, holding it to be unexplained money u/s. 69A. The addition made by the A.O and confirmed by the Ld. CIT(A) is arbitrary, illegal and not justified. 2. The appellant reserves the right to amend, modify or add any of the ground/s of appeal.” 2. Succinctly stated, the A.O based on information that the assessee during the year under consideration, i.e. A.Y.2014-15 had though made cash deposits of Rs.19,71,000/- and was in receipt of interest income of Rs.32,244/-, but had not filed his return of income for the said year, initiated proceedings u/s. 147 of the Act. Notice u/s. 148 of the Act, dated 05.03.2020 was issued to the assessee. 3 Sharad Vishwakarma Vs. ITO, Ward-1, Rajnandgaon ITA No. 484/RPR/2024 3. During the course of the assessment proceedings, the A.O queried the assessee about the source of the cash deposits of Rs.19,71,000/-. In reply, it was stated by the assessee that he was a commerce graduate and was earning commission income a/w. income from part time job. The assessee stated that as his income during the subject year was below the taxable limit, therefore, for the said reason the return of income was not filed by him. Apropos the source of the cash deposits, the assessee had filed before the A.O a fund flow statement, wherein he had claimed to be in possession of opening cash in hand at the beginning of the F.Y 2012 of Rs.20,03,135/-. Further, it was stated by him that he had during the year under consideration earned an income of Rs.1,95,750/-, out of which, after making a withdrawal of Rs.85,500/-, the closing balance of capital available with him as on 31.03.2014 amounted to Rs.21,13,385/-. Apart from that, it was stated by the assessee that he had received gift of Rs.3 lacs from his father, viz. Shri Prem Lal Vishwakarma during the F.Y.2012- 13. Also, it was stated by him that an amount of Rs.3.50 lacs was received by him as gifts at the time of his marriage on 12th June, 2005. Although the A.O had specifically directed the assessee to substantiate his claim as regards the availability of the aforementioned amounts, but he failed to do the needful. 4. The A.O based on the information gathered u/s.133(6) of the Act from State Bank of India, Branch: Goshala Para, Rajnandgaon, observed 4 Sharad Vishwakarma Vs. ITO, Ward-1, Rajnandgaon ITA No. 484/RPR/2024 that the assessee was engaged in private job in “New Creative Fibre”, Raipur and was also carrying on wholesale business under the name of “Suman Combines”. The A.O further observed that the assessee had made cash withdrawals from his bank account from different ATMs. As the assessee had failed to comply with the notice issued by the A.O u/s. 142(1) of the Act, therefore, the latter was constrained to proceed with and frame the assessment u/s. 144 of the Act. 5. After perusing the bank account of the assessee, the A.O observed that there were cash/credit entries appearing in his bank account aggregating to an amount of Rs.20,25,758/-(including bank interest of Rs.26,654/-) and also receipt of interest of Rs.5,590/- from Union Bank. As the assessee had failed to come forth with any plausible explanation as regards the subject cash deposits, therefore, the A.O held the same as his unexplained money u/s. 69A of the Act. Thereafter, the A.O after relying upon a host of judicial pronouncements held the amount of Rs.20,25,758/-, viz. (i) cash deposits: Rs.19,71,000/-; (ii) credit entries: Rs.54,758/-; and (iii) bank interest credit: Rs.26,654/-, as the assessee’s unexplained income. Accordingly, the A.O vide his order passed u/s. 147 r.w.s.144 r.w.s. 144B of the Act, dated 24.09.2021, determined the income of the assessee at Rs.20,31,350/-. 5 Sharad Vishwakarma Vs. ITO, Ward-1, Rajnandgaon ITA No. 484/RPR/2024 6. Aggrieved, the assessee carried the matter in appeal before the CIT(Appeals). As the assessee despite having been afforded two opportunities i.e. on 08.02.2023 and 16.02.2023 had failed to participate in the proceedings before the first appellate authority, therefore, the latter was constrained to proceed with and dispose off the appeal on an ex-parte basis. The CIT(Appeals), taking cognizance of the fact that as the assessee had failed to place on record any material to dislodge the observation of the A.O, upheld the addition made by him. For the sake of clarity, the observations of the CIT(Appeals) are culled out as under: “5.4. The conduct of the Appellant, as inferred from the aforesaid table, evidences that the Appellant is not interested in prosecuting the Appeal. 5.5. The law aids those who are vigilant, not those who sleep upon their rights. This principle is embodied in the well-known Latin dictum, \"VIGILANTIBUS ET NON DORMIENTIBUS JURA SUB VENIUNT\". The conduct of the Appellant, as inferred from the aforesaid table, evidences that the Appellant fails on this principle of equity. Even the Hon'ble Courts, in various pronouncements, have frowned upon the Appellants who file appeals but thereafter do not take any further interest in prosecuting those appeals. I) The Hon'ble Income Tax Appellate Tribunal — Kolkata in the case of Pradeep Kumar Jhawar Kolkata vs. DCIT — CC - XXI (15 March, 2016) (ITA Nos. 450/Kol/2013 for Asstt. Year: 2006-07) dismissed the appeal of the Appellant for non- prosecution. II) The Hon'ble Madhya Pradesh High Court in the case of Estate of Late Tukojirao Holkar vs. CWT (223 ITR 480) held as under: \"If the party, at whose instance the reference is made, fails to appear at the hearing, or fails in taking steps for preparation of the paper books so as to enable hearing of the reference, the court is not bound to answer the reference.\" 6 Sharad Vishwakarma Vs. ITO, Ward-1, Rajnandgaon ITA No. 484/RPR/2024 III) Similarly, the Hon'ble Punjab & Haryana High Court in the case of New Diwan Oil Mills vs. CIT [(2008) 296 ITR 495] returned the reference unanswered since the assessee remained absent and there was no assistance from the assessee. 5.6. It is settled position that the onus is upon the appellant to prove genuineness of each and every transactions entered into. In land mark cases like Kale Khan Mohammad Hanif v CIT [1963] 50 ITR 1 (SC), Roshan Di Hatti v CIT [1977] 107 ITR (SC) it has been held that the law is well settled that the onus of proving the source of a sum of money found to have been received by an appellant, is on him. Where the nature and source thereof cannot be explained satisfactorily, it is open to the revenue to hold that it is the income of the appellant and no further burden is on the revenue to show that the income is from any particular source. 5.7. Based on the above trail of opportunities provided to the appellant, it appears that the assessee is not keen on pursuing the appeal. Accordingly, given that this office has not received any information or document so as to make a judgment based on merits, this office is left with no option but to confirm the addition carried out by the Ld. AO. Further, the appellant has merely filed an appeal but had not pursued the same by filing requisite details to substantiate his claim. Therefore, the addition to total income as challenged in the Grounds of Appeal and in the Appeal Memo are hereby confirmed. 5.8. Accordingly, the appeal of the Appellant for AY 2014-15 is disposed by confirming the assessment order passed the Ld. AO.” 7. The assessee being aggrieved with the order of the CIT(Appeals) has carried the matter in appeal before the Tribunal. 8. I have heard the Ld. Authorized Representatives of both the parties, perused the orders of the lower authorities and the material available on record, as well as considered the judicial pronouncements that have been pressed into service by the Ld. AR to drive home his contentions. 7 Sharad Vishwakarma Vs. ITO, Ward-1, Rajnandgaon ITA No. 484/RPR/2024 9. Shri Deepak Meghani, Ld. Authorized Representative (for short ‘AR’) for the assessee at the threshold submitted that both the lower authorities had erred in treating the cash deposits/credits in the bank account of the assessee as unexplained money u/s. 69A of the Act. Elaborating further on his contention, the Ld. AR submitted that the cash deposits of Rs.19.71 lacs made by the assessee during the subject year in his bank account with State Bank of India, Branch: Goshala Para in three tranches, viz. (i) 30.03.2013: Rs.1,000/-; (ii) 03.05.2013: 9,70,000/-; and (iii) 21.10.2013: Rs.10,00,000/- were sourced out of explained sources. Carrying his contention further, the Ld. AR submitted that as the aforementioned cash deposits in the assessee’s bank account were sourced out of, viz. (i) past/accumulated savings; (ii) current year income; (iii) cash gift received from his father, viz. Shri Prem Lal Vishwakarma: Rs.3 lacs; and (iv) cash gifts received at the time of his marriage on 12.06.2005 : Rs.3.50 lacs, therefore, there was no justification for the A.O to have summarily held the entire amount of the same as his unexplained money. The Ld. AR further submitted that as the assessee was residing in a village, therefore, as a matter of normal practice he had accumulated his savings instead of depositing the same in his bank account. Apart from that, the Ld. AR submitted that the amount of cash deposits in the assessee’s bank account had thereafter been channelized by him for self purposes, viz. (i) towards purchase of land for constructing residential house: Rs. 8 Sharad Vishwakarma Vs. ITO, Ward-1, Rajnandgaon ITA No. 484/RPR/2024 5,50,000/-; and (ii) for purchasing fixed deposits: Rs.10 lacs, therefore, it could safely be inferred that the investment so made by the assessee were duly sourced out of his past/accumulated savings. 10. Per contra, Dr. Priyanka Patel, Ld. Sr. Departmental Representative ( for short ‘DR’) relied on the orders of the lower authorities. 11. I have heard the Ld. Authorized Representatives of both the parties in the backdrop of the issue in question i.e. the sustainability of the addition made by the A.O u/s. 69A of the Act of Rs.19.71 lacs (out of Rs.20,31,000/-). A perusal of the assessee’s bank account No.20151492148 with State Bank of India, Branch: Goshala Para, Rajnandgaon reveals that the assessee had during the subject year made cash deposits of Rs.19.71 lacs, viz. (i) 30.03.2013: Rs.1,000/-; (ii) 03.05.2013: 9,70,000/-; and (iii) 21.10.2013: Rs.10,00,000/-. Ostensibly, the aforesaid cash deposits were thereafter routed by the assessee for making two investments viz. (i) towards purchase of land: Rs. 5,50,000/- and (ii) for purchasing fixed deposits: Rs.10 lacs. Although it is the claim of the Ld. AR that as the cash deposits in her bank accounts were duly utilized by him for purchase of a land for constructing residential house/making FDRs, therefore, the said fact in itself substantiates his claim that the respective investments were sourced out of his past/accumulated savings, but I am unable to persuade myself to concur 9 Sharad Vishwakarma Vs. ITO, Ward-1, Rajnandgaon ITA No. 484/RPR/2024 with the same. As per the mandate of Section 69A of the Act the assessee is obligated to explain the “nature” and “source” of the acquisition of money, failing which, the same may be deemed to be his income for such financial year. As in the case before me, I am of a firm conviction that the assessee except for harping on the fact that the amount of the subject cash deposits of Rs.19.71 lacs were sourced out of his past/accumulated savings, had however failed to place on record any evidence to substantiate the same. Apart from that, the claim of the assessee that he was in receipt of cash gifts from his father of Rs.3 lacs and cash gifts at the time of marriage on 12.06.2005 of Rs.3.50 lacs, the same not only in absence of any supporting material cannot be summarily accepted on the very face of it; but even otherwise, considering the fact that the said amounts are stated to have been received way back in the year 2012 & 2005, respectively, therefore, the availability of the same with the assessee as on the date of making the cash deposits in his bank account is incomprehensible. 12. As regards the reliance placed by the Ld. AR on the judgment of the Hon'ble Supreme Court in the case of CIT vs. Smt. P.K. Noorjahan (1999) 237 ITR 570 (SC), the same being distinguishable on facts would not carry his case any further. The facts before the Hon'ble Supreme Court were that a lady aged 20 years, had during the A.Y.1968- 69 and A.Y.1969-70 purchased certain pieces of land on November 27, 10 Sharad Vishwakarma Vs. ITO, Ward-1, Rajnandgaon ITA No. 484/RPR/2024 1968, for Rs.25,902/- and on November 15, 1969, for Rs.34,628/-. The assessee on being queried about the source of the aforesaid investments, had stated before the A.O. that the same were sourced from savings from the income of the properties which were left by her mother's first husband. The A.O. rejected the aforesaid explanation and held the respective investments as having been made by the assessee from her unexplained sources and made an addition of the same u/s. 69 of the Act. 13. On appeal, the Hon'ble Apex Court after deliberating on the term \"may\" used in Section 69 of the Act, observed that the same indicated that the legislature in all its wisdom had conferred a discretion on the Income- tax Officer in the matter of treating the source of an investment which has not been satisfactorily explained by the assessee as the income of the assessee. The Hon’ble Apex Court observed that the Income-tax Officer is not obliged to treat the source of investment as income in every case where the explanation offered by the assessee is found to be not satisfactory. It was further observed that the question as to whether the source of the investment should be treated as income or not u/s.69 of the Act has to be considered in the light of the facts of each case. In other words, discretion has been conferred on the Income-tax Officer u/s. 69 of the Act to treat the source of investment as the income of the assessee if the explanation offered by the assessee is not found satisfactory and the said discretion 11 Sharad Vishwakarma Vs. ITO, Ward-1, Rajnandgaon ITA No. 484/RPR/2024 has to be exercised keeping in view the facts and circumstances of the particular case. 14. As the assessee in the present case before me had failed to come forth with any plausible explanation both before the A.O/CIT(Appeals) as regards the source of the cash deposits of Rs.19.71 lacs in his bank account, therefore, I principally concur with the view taken by them. At the same time, I am of a firm conviction that it would be incorrect on my part to not consider the fact that the assessee being a 44 years old commerce graduate would have some amount of cash in hand out of his past savings/current years income in his possession, viz. (i) private job with New Creative Fibre; (ii) wholesale business in the name of “Suman Combines”; and (iii) past accumulated savings as on the date of making the cash deposits in his bank account. Considering the aforesaid facts, I am of the firm conviction that an amount of Rs.2 lacs can safely be held that he would have been in possession of the assessee at the time of depositing of cash in his bank account during the year under consideration. Accordingly, I scale down the addition made by the A.O to Rs.17.91 lacs [Rs.19.71 lacs (-) Rs. 2 lacs]. 12 Sharad Vishwakarma Vs. ITO, Ward-1, Rajnandgaon ITA No. 484/RPR/2024 15. In the result, appeal of the assessee is partly allowed in terms of the aforesaid observations. Order pronounced in open court on 28th day of November, 2024. Sd/- (रवीश सूद /RAVISH SOOD) ÛयाǓयक सदèय/JUDICIAL MEMBER रायपुर/ RAIPUR ; Ǒदनांक / Dated : 28th November, 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. "
Other Referred Cases
CIT vs. Smt. P.K. Noorjahan (1999) 237 ITR 570 (SC), Pradeep Kumar Jhawar Kolkata vs. DCIT \/ CC - XXI (15 March, 2016), Estate of Late Tukojirao Holkar vs. CWT (223 ITR 480), New Diwan Oil Mills vs. CIT [(2008) 296 ITR 495], Kale Khan Mohammad Hanif v CIT [1963] 50 ITR 1 (SC), Roshan Di Hatti v CIT [1977] 107 ITR (SC)
Laws Referred To
Income-tax Act, 1961
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