Shri Krushnakant Bhailalbhai Patel, Kheda v. ITO, Ward-2, , Nadiad

- IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH SMC BEFORE SHRI RAJPAL YADAV JUDICIAL MEMBER ./ ITA NO. 2329/AHD/2017 / ASSESSMENT YEAR: 2010-11 SHRI KRUSHNAKANT BHAILALBHAI PATEL AT MAHUDHA NAGARWADA NR.GUJARATI SCHOOL AT & POST MAHUDHA DIST. KHEDA. PAN : AWKPP 7005 Q VS ITO WARD-2 NADIAD. / (APPELLANT) / (RESPONDENT) ASSESSEE BY : WRITTEN SUBMISSIONS REVENUE BY : SHRI N.K. GOEL SR.DR / DATE OF HEARING : 14/11/2019 /DATE OF PRONOUNCEMENT : 15/11/2019 O R D E R ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL AGAINST O RDER OF LD.CIT(A)-2 VADODARA DATED 19.07.2017 PASSED FOR T HE ASSTT.YEAR 2010- 11. 2. ASSESSEE HAS TAKEN TWO GROUNDS OF APPEAL; OUT OF WHICH GROUND NO.2 IS GENERAL IN NATURE WHICH DOES NOT CALL FOR RECORDING OF ANY FINDING HENCE REJECTED. IN GROUND NO.1 THE ASSE SSEE HAS PLEADED THAT THE LD.CIT(A) HAS ERRED AND CONFIRMED ADDITION OF R S.12 LAKHS WHICH WAS ADDED BY THE AO WITH AID OF SECTION 69 OF THE I NCOME TAX ACT 1961. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE HA S NOT FILED ANY RETURN OF INCOME UNDER SECTION 139 OF THE ACT. IT APPEARS THAT DEPARTMENT GOT INFORMATION EXHIBITING THE FACT THAT THE ASSESSEE H AS DEPOSITED A SUM OF ITA NO.2329/AHD/2017 - 2 RS.12 74 400/- IN CASH IN HIS SAVING BANK ACCOUNT WITH DENA BANK MAHUDHA BRANCH. ASSESSMENT WAS REOPENED UNDER SECT ION 147 AND NOTICE UNDER SECTION 148 WAS ISSUED AND SERVED UPON THE ASSESSEE. THE ASSESSEE WAS CONFRONTED WITH REGARD TO THE SOURCE O F SUCH DEPOSITS WITH THE BANK. HIS STATEMENT WAS RECORDED UNDER SECTION 131 OF THE ACT. THE STAND OF THE ASSESSEE WAS THAT HE WAS AGRICULTURIST . OUT OF THE PAST SAVING OF TWO-THREE YEARS HE HAS DEPOSITED THE ABO VE CASH IN THE BANK ACCOUNT. THE LD.AO WAS NOT SATISFIED WITH THE ABOV E EXPLANATION ON THE GROUND THAT THE ASSESSEE WAS HAVING 15-16 BIGHAS OF AGRICULTURE LAND WHICH IS JOINTLY HELD BY NINE COPARCENERS AND THER EFORE HE WAS NOT POSSESSING SUFFICIENT AGRICULTURE LAND WHICH COULD DEMONSTRATE GENERATION OF INCOME TO THIS EXTENT THAT OUT OF TH E SAVING RS.12 74 400/- COULD BE DEPOSITED. HENCE HE TREATED THE DEPOSIT OF RS.12 LAKHS OUT OF UNEXPLAINED SOURCES. ACCORDINGLY HE MADE THE ADDI TION. APPEAL TO THE CIT(A) DID NOT BRING ANY RELIEF TO THE ASSESSEE. 4. IN RESPONSE TO THE NOTICE OF HEARING CNK & ASSO CIATES LLP CHARTERED ACCOUNTANTS UNDER THE SIGNATURE OF ALOK B . SHAH PARTNER OF THE FIRM FILED WRITTEN SUBMISSIONS. HOWEVER NO ON E HAS COME PRESENT ON BEHALF OF THE ASSESSEE TO ARGUE THE APPEAL. 5. WITH THE ASSISTANCE OF THE LD.DR I HAVE GONE TH ROUGH THE RECORD CAREFULLY ALONG WITH THE SUBMISSIONS. THE ASSESSEE HAS ANNEXED DETAILS OF AGRICULTURE LAND IN THE SHAPE OF FORM NO.7/12. THOUGH THE DOCUMENTS ARE IN GUJARATI BUT I HAVE PERUSED IT. THE EMPHAS IS OF THE ASSESSEE IS THAT SECTION 69 UNDER WHICH ADDITION HAS BEEN MADE IS NOT APPLICABLE IN THE CASE OF THE ASSESSEE. HE FURTHER CONTENDED THA T THIS SECTION EMPLOYS ITA NO.2329/AHD/2017 - 3 EXPRESSION MAY WHICH CONTEMPLATES THAT IF THE ASSESSEE FAILED TO EXPLAIN THE SOURCE THEN SUCH MONEY MAY D EEMED TO BE THE INCOME OF THE ASSESSEE FOR THE SAID FINANCIAL YEAR. THUS ACCORDING TO THE ASSESSEE THIS EXPRESSION GIVES A DISCRETION TO THE AO TO TREAT THE SAID DEPOSITS WITH THE BANK AS UNEXPLAINED INCOME OF THE ASSESSEE OR NOT. SINCE THE ASSESSEE IS AN AGRICULTURIST HE HAS NO O THER SOURCE OF INCOME THEREFORE ON THE STRENGTH OF THE DECISION OF THE H ONBLE SUPREME COURT IN THE CASE OF CIT VS. NOORJAHAN NOORJAHAN 237 ITR 570 (SC) WHICH AFFIRMED THE DECISIONS IN THE CASE OF CIT VS. NOORJ EHAN 123 ITR 3 CIT VS. MOGHUL DARBAR 216 ITR 301 DCIT VS. ROHINI BUI LDERS 256 ITR 360 AND MITESH ROLLING VS. CIT 258 ITR 278 IT IS SUBM ITTED THAT ADDITIONS OUGHT NOT TO HAVE BEEN MADE. IN THE SUBMISSIONS T HE LD.COUNSEL FOR THE ASSESSEE HAS MADE REFERENCE TO THE FOLLOWING DECISI ONS: I) CIT VS. MEGHA INDUSTRIES (103) 7 TAXCORP (DT) 54015 (GUJARAT); II) CIT VS. RAVI KUMAR 294 ITR 78; III) ITO VS. MRS. DEEPALI SEHGAL ITA NO.5660/DEL/201 2. ON THE OTHER HAND THE LD.DR RELIED UPON THE ORDERS OF THE REVENUE AUTHORITIES. 6. I HAVE GONE THROUGH THE RECORD CAREFULLY. SECTI ON 69 OF THE INCOME TAX CONTEMPLATES THAT WHERE IN ANY FINANCIAL YEAR T HE ASSESSEE IS FOUND TO BE THE OWNER OF ANY MONEY BULLION JEWELLERY OR OTHER VALUABLE ARTICLES AND SUCH ARTICLE IS NOT RECORDED IN THE B OOKS OF ACCOUNT IF ANY MAINTAINED BY HIM FOR ANY SOURCE OF INCOME AND THE ASSESSEE OFFERS NO EXPLANATION ABOUT THE NATURE AND SOURCE OF ACQUISIT ION OF SUCH VALUABLE ARTICLES OR THING OR THE EXPLANATION OFFERED BY HI M IS NOT IN THE OPINION OF THE AO SATISFACTORY THEN SUCH VALUABLES MAY BE DEEMED TO BE THE ITA NO.2329/AHD/2017 - 4 INCOME OF THE ASSESSEE FOR SUCH FINANCIAL YEAR. THERE IS NO DISPUTE THAT THIS SECTION EMPLOYS MAY. IT CONTEMPLATES T HAT THE OBSERVATION OF THE AO TO TREAT THE MONEY BULLION JEWELLERY ETC. FOUND IN THE POSSESSION OF THE ASSESSEE WHOSE SOURCE WAS NOT EXPLAINED AS INCOME OF THE ASSESSEE. IT IS PERTINENT TO BEAR IN MIND THAT TH IS DISCRETION HAS TO BE EXERCISED JUDICIOUSLY AFTER CONSIDERING OVERALL FAC TS AND CIRCUMSTANCES OF THE CASE. IN THE CASE OF P.K. NOORJAHAN THIS LADY WAS A PARDASHIN ( !'). THUS ACCORDING TO THE CUSTOM SHE COULD NOT VENTUR E OUT OF THE HOME AND IF THAT BE SITUATION HOW ONE CAN ASSU ME THAT SHE HAS EARNED UNEXPLAINED INCOME. IN THAT STATE OF AFFAIR S THE HONBLE SUPREME COURT HAS EXPLAINED THE MEANING OF EXPRESSI ON MAY AND OBSERVED THAT THE AO HAS DISCRETION TO TREAT A PART ICULAR ITEM AS EXPLAINED OR NOT. IN THE PRESENT CASE SUCH CIRCUMST ANCES ARE NOT DISCERNIBLE. THE ASSESSEE HAS BEEN MAINTAINING A S AVING BANK ACCOUNT. HE HAS DEPOSITED MONEY IN THAT ACCOUNT. HE IS BOUN D TO EXPLAIN THE SOURCE OF SUCH MONEY. HE SIMPLY STATED THAT HE IS AGRICULTURIST BUT HE FAILED TO PROVE THE SOURCE OF AGRICULTURE INCOME. THE LAND HOLDING SHOWN TO THE AO IS INSUFFICIENT TO BELIEVE THAT IT HAS GIVEN RISE OF THE INCOME TO THIS EXTENT. THEREFORE AFTER PERUSING T HE ORDERS OF THE REVENUE AUTHORITIES I DO NOT FIND ANY MERIT IN THI S APPEAL. IT IS DISMISSED. 7. IN THE RESULT APPEAL OF THE ASSESSEE IS DISMISS ED. PRONOUNCED IN THE OPEN COURT ON 15 TH NOVEMBER 2019. SD/- (RAJPAL YADAV) JUDICIAL MEMBER AHMEDABAD; DATED 15 /11/2019