Sri.Abdulkhader Mundol, Kasargode v. ITo, Kasargode

ITA 286/COCH/2013 | 2006-2007
Pronouncement Date: 14-11-2014

Appeal Details

RSA Number 28621914 RSA 2013
Assessee PAN ACBPA9404D
Bench Cochin
Appeal Number ITA 286/COCH/2013
Duration Of Justice 1 year(s) 6 month(s) 4 day(s)
Appellant Sri.Abdulkhader Mundol, Kasargode
Respondent ITo, Kasargode
Appeal Type Income Tax Appeal
Pronouncement Date 14-11-2014
Appeal Filed By Assessee
Bench Allotted DB
Tribunal Order Date 14-11-2014
Date Of Final Hearing 20-10-2014
Next Hearing Date 20-10-2014
Assessment Year 2006-2007
Appeal Filed On 10-05-2013
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH COCHIN BEFORE S/SHRI N.R.S.GANESAN JM AND CHANDRA POOJ ARI AM I.T.A. NO. 286/COCH/2013 ASSESSMENT YEAR : 2006-07 SHRI ABDUL KHADER MUNDOL THEKKIL P.O. KASARGOD [PAN: ACBPA 9404D] VS. THE INCOME-TAX OFFICER WARD-1 KASARGOD. (ASSESSEE -APPELLANT) (REVENUE-RESPONDEN T) ASSESSEE BY SHRI C.B.M. WARRIER CA REVENUE BY SHRI K.K.JOHN SR. DR DATE OF HEARING 20/10/2014 DATE OF PRONOUNCEMENT 14/11/2014 O R D E R PER CHANDRA POOJARI ACCOUNTANT MEMBER: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER DATED 28- 02-2009 PASSED BY THE CIT(A) KOZHIKODE FOR THE ASS ESSMENT YEAR 2006-07. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROU NDS: 1)THE CIT(A) HAS GONE WRONG IN CONFIRMING THE ADDITION OF RS.22 13 000/- AS THE INCOME OF THE ASSESSEE. THE ASSESSEE IS ENGAGED IN THE BUILDING CONSTRUCTION AND AMOUNTS WERE RECE IVED FROM THE CUSTOMERS WHICH ARE DEPOSITED IN THE BANK ACCOUNT AND THE RESPECTIVE PARTIES HAVE CONFIRMED SUCH TRANSACTIONS WITH THE ASSESSEE. THE CIT(A) HAS CONSIDERED THE AMOUNT RECEIVED IN THE BANK ACC OUNT AS THE INCOME THE ASSESSEE WITHOUT VERIFICATION. 2) THE ASSESSEE RECEIVED RS.5 00 000/- FROM THE AS SESSEES WIFE SMT. AMINA MUNDOL WHO IS PRACTICING DOCTOR AND THE CIT( A) HAS GONE WRONG I.T.A. NO.286/COCH/2013 2 IN CONFIRMING THE ASSESSMENT OF THIS AMOUNT AS INC OME U/S. 68 OF THE ACT. 3) THE CIT(A) HAS GONE WRONG IN CONFIRMING THE ASS ESSMENT OF RS.3 00 000/- THE AMOUNT RECEIVED AS LOAN FROM THE ASSESSEES SISTER SAFIYA ABDULLA. THE ASSESSEES SISTER CONFIRMED T HE TRANSACTION AND EXPLAINED THE SOURCE FROM WHERE THIS AMOUNT WAS AD VANCED TO THE ASSESSEE AND HENCE THE ASSESSMENT OF THIS AMOUNT U /S. 68 OF THE ACT WITHOUT CONSIDERING THE EVIDENCE IS NOT JUSTIFIED. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS A CIVIL CONTRACTOR MAINLY ENGAGED IN CONSTRUCTION OF RESIDENTIAL HOUSE S AND COMMERCIAL BUILDINGS. RETURN OF INCOME FOR THE YEAR WAS FILED ON 12-03-20 07 DECLARING INCOME AT RS.1 50 500/-. THE RETURN WAS PROCESSED U/S. 143(1 ) AND SUBSEQUENTLY SELECTED FOR SCRUTINY BY ISSUE OF NOTICE U/S. 143(2 ). DURING THE ASSESSMENT PROCEEDINGS THE ASSESSEE SUBMITTED THAT HE HAD REC EIVED ADVANCE AMOUNTS FROM PARTIES AND THIS WAS CREDITED TO HIS BANK ACCO UNT AND LEDGER AND THE AMOUNTS WERE WITHDRAWN FROM THE BANK FOR EXPENSES I N CONNECTION WITH CONSTRUCTION AND FINALLY AT THE END OF THE FINANCIA L YEAR EXCESS OF EXPENDITURE OVER THE RECEIPTS OF ADVANCE WAS TAKEN TO THE BALAN CE SHEET. THE ASSESSING OFFICER VERIFIED THE INCOME FROM PROFESSION AND THE SAME WAS ACCEPTED. 4. THERE WAS AIR INFORMATION THAT HUGE CREDIT BALAN CE WAS THERE IN THE SB ACCOUNT OF ASSESSEE WITH UNION BANK OF INDIA KASAR GOD. THE TOTAL CASH BALANCE AS ON 31-03-2006 WAS RS.20 25 000/-. THE A SSESSEE WAS ASKED TO FILE A COPY OF STATEMENT OF ACCOUNT WITH UBI AND HE FILE D THE SAME AND AS PER THE CLOSING BALANCE AS ON 29-03-2006 WAS RS. 22 13 000/ -. WHEN ASKED FOR I.T.A. NO.286/COCH/2013 3 EXPLANATION THE ASSESSEE FILED A REVISED BALANCE S HEET SHOWING A NEW ENTRY OF RS.22 13 000/- IN THE LIABILITY SIDE AND THE SAME W AS ADDED TO THE FIGURE SHOWN IN ASSETS SIDE TOWARDS CASH AT BANK AND IN HAND. T HE ASSESSEE WAS ASKED TO FURNISH THE DETAILS OF ADVANCES RECEIVED. IN RESPO NSE THE ASSESSEE FILED A LETTER SIGNED ON BEHALF OF SHRI NA MOHAMMED IN WHI CH IT WAS STATED BY THE SAID PERSON THAT HE AND HIS THREE BROTHERS ARE PROM OTERS OF KALLUVALAPPIL TRADE CENTRE NEAR MUNICIPAL BUS STAND KASARGOD. FURTHE R IT WAS STATED THAT SINCE ALL OF THEM WERE NRIS THEY WERE UNABLE TO CONTROL THE CONTRACTORS AND THEREFORE THEY TRANSFERRED THE MONEY DIRECTLY TO T HE ACCOUNT OF THE ASSESSEE WHO MADE FURTHER PAYMENTS TO THE CONTRACTORS. THE ASSESSEE ALSO FILED A STATEMENT BEFORE THE ASSESSING OFFICER SHOWING RECE IPT OF MONEY FROM SHRI NA MOHAMMED AND PAYMENTS MADE OUT OF THE RECEIPTS AND AS PER THIS STATEMENT THE TOTAL AMOUNT RECEIVED WAS RS.50 31 370/- AND TH E TOTAL PAYMENT WAS RS.72 44 370/- AND THE BALANCE WAS STATED TO BE THE ADVANCE AVAILABLE IN HAND RELATED TO THE CONCERN. EVEN THOUGH THE LETTER OF S HRI NA MOHAMMED WAS UNSIGNED THE ASSESSING OFFICER GAVE FURTHER OPPORT UNITY TO THE ASSESSEE TO PRODUCE THE SAID NA MOHAMMED AND ALSO THE DETAILS O F PAYMENT RECEIVED FROM HIM. THE ASSESSEE DID NOT PRODUCE SHRI NA MOHAMMED NOR THE DETAILS OF PAYMENTS RECEIVED FROM HIM. THEREFORE THE ASSESSI NG OFFICER CAME TO THE CONCLUSION THAT RS.22 13 000/- SHOWN IN THE LIABILI TY SIDE OF THE BALANCE SHEET WAS HIS INCOME FROM CONTRACT BUSINESS AND ADDED TO THE INCOME RETURNED ACCORDINGLY. I.T.A. NO.286/COCH/2013 4 5. ON APPEAL THE CIT(A) AGREED WITH THE FINDINGS O F THE ASSESSING OFFICER. ACCORDING TO THE CIT(A) THE ASSESSING OFFICER HAS DISCUSSED THE RECEIPT OF MONEY FROM THIRD PARTIES IN DETAIL AND IT WAS FURTH ER NOTICED THAT THE ASSESSING OFFICER HAS GIVEN MORE THAN ENOUGH OPPORTUNITIES TO THE ASSESSEE TO PRODUCE EVIDENCES IN SUPPORT OF HIS CLAIM THAT MONEY WAS RE CEIVED FROM THESE PERSONS. THE CIT(A) OBSERVED THAT THE ONUS TO PROVE RECEIPT OF MONEY IS ON THE ASSESSEE AND HE HAS MISERABLY FAILED TO DISCHARGE H IS RESPONSIBILITY. THE CIT(A) OBSERVED THAT DURING THE APPELLATE PROCEEDIN GS ALSO THE LD. COUNSEL HAS NOT PRODUCED ANY EVIDENCE TO PROVE THAT MONEY H AS ACTUALLY RECEIVED FROM THESE PERSONS. ACCORDINGLY THE CIT(A) CONFIRMED T HE ORDER OF THE ASSESSING OFFICER. AGAINST THIS ADDITION THE ASSESSEE IS IN APPEAL BEFORE US. 6. THE LD. AR SUBMITTED THAT IN THE ORIGINAL BALAN CE SHEET WHICH WAS PREPARED ON THE BASIS OF BOOKS OF ACCOUNTS AS ON 31 -03-2006 THE ASSESSEE HAD INADVERTENTLY LEFT OUT THE SAVING BANK ACCOUNT WHEREIN THE ASSESSEE HAS DEPOSITED THE ADVANCE RECEIVED FROM CONTRACTS. THEREFORE HE FILED THE REVISED BALANCE SHEET. WE FIND THAT THE MISTAKE WA S BONAFIDE. FURTHER THE ASSESSEE HAS FURNISHED DETAILS OF CONTRACT RECEIPTS DEPOSITED IN THE SAVING BANK ACCOUNT AND ALSO EXPLAINED THE REASONS FOR SUC H DISCREPANCY. IN SPITE OF THIS THE LOWER AUTHORITIES HAVE NOT ACCEPTED TH E EXPLANATION OF THE I.T.A. NO.286/COCH/2013 5 ASSESSEE. ACCORDING TO THE LD. AR THE ASSESSEE HA S EXPLAINED THE SOURCE OF DEPOSIT FROM WHOM HE HAS RECEIVED AND IT CANNOT BE CONSIDERED AS UNEXPLAINED INVESTMENT IN THE HANDS OF THE ASSESSEE . 7. ON THE OTHER HAND THE LD. DR SUBMITTED THAT THE ORIGINAL BALANCE SHEET WAS FILED AS ON 31-03-2006 AND THE REVISED BA LANCE SHEET. ACCORDING TO HIM THE ASSESSEE EXPLAINED THAT THE ASSESSEE HA S NOTHING TO CONCEAL IN THE SAVING BANK ACCOUNT. HOWEVER ACCORDING TO THE LD. DR AS PER THE INFORMATION RECEIVED FROM AIR IT WAS NOTICED THAT THE ASSESSEE HAS A BALANCE OF RS.20 25 000/- IN SB ACCOUNT NO. 288 IN UNION BANK OF INDIA AS ON 31-03-2006. THE ASSESSEE WAS ASKED TO PRODUCE CO PY OF BANK ACCOUNT DETAILS AND THE SOURCE OF DEPOSIT IN RESPONSE TO W HICH THE ASSESSEE FILED A COPY OF STATEMENT OF ACCOUNT HELD WITH UNION BANK O F INDIA. HE FURTHER SUBMITTED THAT ONLY BECAUSE OF INFORMATION FROM AIR THE ASSESSEE FURNISHED THE REVISED BALANCE SHEET. HOWEVER THE ASSESSEE HAS FAILED TO EXPLAIN AS TO HOW IT CANNOT BE CONSIDERED AS INVEST MENT INCOME IN THE HANDS OF THE ASSESSEE. 8. WE HAVE HEARD THE PARTIES AND PERUSED THE RECORD . WE HAVE GONE THROUGH THE REVISED BALANCE SHEET FILED SUBSEQUENTL Y BY THE ASSESSEE AS ON 31-03-2006 AND ALSO COPY OF SAVINGS BANK ACCOUNT HE LD WITH UNION BANK OF INDIA AND BANK FUND FLOW STATEMENT AS ON 31-03-2006 WHEREIN THE CLOSING I.T.A. NO.286/COCH/2013 6 BALANCE WAS SHOWN AS RS.22 13 000/- IN ITS ACCOUNTS WHICH WAS NOT SHOWN IN THE ORIGINAL BALANCE SHEET. ON ACCOUNT OF AIR INFORMATION THE ASSESSING OFFICER CALLED FOR SOURCE FOR THIS DEPOSIT. THEREA FTER THE ASSESSEE FILED A REVISED BALANCE SHEET EXPLAINING THE SOURCE OF DEPO SIT AS ADVANCE RECEIVED FROM THE PARTIES. THE ASSESSING OFFICER GAVE AMP LE OPPORTUNITY TO EXPLAIN THE SOURCE OF DEPOSIT IN THE SAVING BANK ACCOUNT. THE ASSESSEE EXPLAINED THAT HE WAS DOING CONTRACT WORK IT WAS FROM CONTRA CT RECEIPTS. THOUGH THE ASSESSEE STATED THAT IT IS FROM CONTRACT BUSINESS THERE IS NO PROPER EVIDENCE TO SUPPORT THE CLAIM. THE ASSESSEE HAS FI LED A COPY OF LETTER DATED 27-11-2008 FROM MRS. NISHAT STATING THAT SHE HAS GI VEN RS.10 25 000/- OF CONTRACT TO THE ASSESSEE FOR CONSTRUCTION OF RESIDE NCE SIMILARLY THERE IS A LETTER FROM KALLUVALAPPIL TRADE CENTRE DATED 27/11/ 2008 WHEREIN IT IS STATED THAT SUM OF RS.32 00 000/- TOWARDS PAYMENT MADE TO THE ASSESSEE FOR CONSTRUCTION OF COMMERCIAL COMPLEX. ANOTHER LETTER FROM MR. ABDUL BASHEER DATED 27-11-2008 STATING THAT A SUM OF RS.12 20 000 /- WAS ADVANCED TO THE ASSESSEE FOR CONSTRUCTION OF RESIDENCE. THERE IS A LSO ANOTHER LETTER DATED 27-11-2008 FROM MR. K.P. ABDUL AZEEZ STATING THAT A SUM OF RS.16 10 000/- WAS ADVANCED TO THE ASSESSEE FOR CONSTRUCTION OF RE SIDENCE. ALL THESE LETTERS WERE FILED BEFORE THE CIT(A). HOWEVER THES E LETTERS DO NOT BEAR THE CORRECT PAN NO. AND INCOME TAX DETAILS OF THE CREDI TORS. ALL THESE LETTERS ARE BEARING THE SAME DATE AND ARE STEREOTYPED LETTE RS. WE CANNOT GIVE CREDIT TO THESE LETTERS IN THE ABSENCE OF SUBSTANTI AL EVIDENCE EXPLAINING THE I.T.A. NO.286/COCH/2013 7 CAPACITY OF THESE PERSONS TO ADVANCE THE ABOVE AMOU NTS TO THE ASSESSEE. BEING SO IN THE ABSENCE OF ANY SUPPORTING EVIDENCE WE ARE INCLINED TO HOLD THAT THE ASSESSEE MADE THE ENTRY IN THE LIABILITY S IDE OF THE BALANCE SHEET AS AN AFTER THOUGHT TO SUIT THE BALANCE IN THE SAVING BANK ACCOUNT. HENCE WE CONFIRM THE ORDER OF THE LOWER AUTHORITIES ON THIS ISSUE. 9. THE NEXT GROUND IS WITH REGARD TO ADDITION OF RS .5 00 000/-. 10. THE BRIEF FACTS OF THE CASE ARE THAT THIS AMOUN T IS SAID TO BE RECEIVED FROM HIS WIFE SMT. AMINA MUNDOL A DOCTOR BY PROFES SION. THE SOURCE OF THE AMOUNT WAS EXPLAINED TO BE THE PAST SAVINGS. THOUG H THE ASSESSING OFFICER GAVE SUFFICIENT OPPORTUNITIES TO PROVE HIS CLAIM T HE ASSESSEE COULD NOT PRODUCE ANY EVIDENCE AND HENCE THE ASSESSING OFFICER DISALL OWED THE CLAIM TREATING IT AS UNEXPLAINED CAPITAL ATTRACTING THE PROVISIONS O F SEC. 68 OF THE I.T. ACT. 11. ON APPEAL THE CIT(A) CONFIRMED THE ORDER OF TH E ASSESSING OFFICER. AGAINST THIS THE ASSESSEE IS IN APPEAL BEFORE US. 12. THE LD. AR SUBMITTED THAT THE ASSESSEE FILED CO NFIRMATION LETTER DATED 27-11-2008 STATING THAT SMT. AMINA MUNDOL HAS ADVAN CED THE AMOUNT TO THE ASSESSEE FOR HIS BUSINESS PURPOSES. I.T.A. NO.286/COCH/2013 8 13. ON THE OTHER HAND THE LD. DR RELIED ON THE ORD ER OF THE CIT(A). 14. WE HAVE CAREFULLY GONE THROUGH THE DETAILS OF B ANK STATEMENT OF UNION BANK OF INDIA AS ON 30-09-2005 AND 31-03-2006. IN OUR OPINION IT IS PROPER TO HAVE A LOOK AT THE STATEMENT OF ACCOUNTS FURNISHED BY THE ASSESSEE. ACCORDINGLY WE REMIT THIS ISSUE BACK TO THE FILE O F THE ASSESSING OFFICER TO EXAMINE HER CAPACITY TO ADVANCE THE AMOUNT TO THE A SSESSEE AND DECIDE THE ISSUE IN ACCORDANCE WITH LAW AFTER GIVING REASONAB LE OPPORTUNITY OF HEARING TO THE ASSESSEE. ACCORDINGLY THIS ISSUE IS PARTLY A LLOWED FOR STATISTICAL PURPOSES. 15. THE NEXT GROUND IS WITH REGARD TO ADDITION OF R S. 3 00 000/- TOWARDS UNEXPLAINED LOAN CREDIT U/S. 68 OF THE I.T. ACT SIN CE THE EXPLANATION OFFERED BY THE ASSESSEE FOR THE SOURCE WAS NOT SATISFACTORY. 16. THE BRIEF FACTS OF THE CASE ARE THAT ON THE LIA BILITIES SIDE OF THE BALANCE SHEET THE ASSESSING OFFICER NOTICED THAT THE ASSES SEE HAS RECEIVED AN AMOUNT OF RS. 8 00 000/- FROM SMT. SAFIYA ABDULLA. THE AS SESSEE HAD PRODUCED PROOF OF CREDIT AND DRAWAL OF RS.5 00 000/-. HOWEVER A SUM OF RS.3 00 000/- WAS NOT SEEN CREDITED TO ANY OF THE ACCOUNT OF THE ASSE SSEE AND WITHDRAWN FOR THE PURPOSE. THE ASSESSING OFFICER GAVE ENOUGH OPPORTU NITIES TO THE ASSESSEE TO PROVE THE GENUINENESS OF THE LOAN BUT HE COULD NOT COMPLY WITH THE REQUIREMENT AS PER THE PROVISIONS OF THE ACT. IN T HE CIRCUMSTANCES THE I.T.A. NO.286/COCH/2013 9 ASSESSING OFFICER ADDED RS.3 00 000/- TOWARDS UNEXP LAINED LOAN CREDIT U/S. 68 OF THE I.T. ACT SINCE THE EXPLANATION OFFERED BY T HE ASSESSEE FOR THE SOURCE WAS NOT SATISFACTORY. 17. ON APPEAL THE CIT(A) CONFIRMED THE ORDER OF TH E CIT(A). AGAINST THIS THE ASSESSEE IS IN APPEAL BEFORE US. 18. THE LD. AR SUBMITTED THAT THE ASSESSEES SISTER SMT. SAFIYA ABDULLA CONFIRMED THE TRANSACTION AND EXPLAINED THE SOURCE FROM WHERE THE AMOUNT OF RS.8 00 000/- WAS ADVANCED TO THE ASSESSEE. ACCORD ING TO THE LD. AR SHE HAS CONFIRMED VIDE LETTER DATED 29/11/2008 THAT SHE HAS ADVANCED A SUM OF RS. 5 00 000 ON 18/04/2005 AND RS. 3 00 000/- ON 19/04/ 2005 (TOTAL 8 00 000/-) TO THE ASSESSEE THROUGH HER NRI ACCOUNT FROM HER NR I SOURCES FOR HIS BUSINESS PURPOSES. 19. ON THE OTHER HAND THE LD. DR RELIED ON THE ORD ER OF THE CIT(A). AGAINST THIS THE ASSESSEE IS IN APPEAL BEFORE US. 20. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE RECORD. THOUGH THE ASSESSEE HAS FILED THE CONFIRMATION LETTER IT HAS NOT FURNISHED THE NECESSARY EVIDENCE REGARDING THE CAPACITY OF SMT. SAFIYA ABDU LLA TO ADVANCE THIS AMOUNT TO THE ASSESSEE. BEING SO WE REMIT THIS ISSUE BAC K TO THE FILE OF THE ASSESSING I.T.A. NO.286/COCH/2013 10 OFFICER TO EXAMINE THE DETAILS OF INCOME AND EXPEND ITURE ACCOUNT WITH STATEMENT OF AFFAIRS AS ON 31/03/2006 AND DECIDE TH E ISSUE IN ACCORDANCE WITH LAW AFTER GIVING ENOUGH OPPORTUNITY OF HEARING TO THE ASSESSEE. IN THE RESULT THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED ACCORDINGLY ON 14-11-2014 SD/- SD/- (N.R.S.GANESAN) (CHANDRA POOJARI) JUDICIAL MEMBER ACC OUNTANT MEMBER PLACE: KOCHI DATED: 14 TH NOVEMBER S2014 GJ COPY TO: 1. SHRI ABDUL KHADER MUNDOL THEKKIL P.O. KASARGOD . 2. THE INCOME TAX OFFICER WARD-1 KASARGOD. 3. THE COMMISSIONER OF INCOME-TAX(APPEALS) KOZHIKO DE. 4. THE COMMISSIONER OF INCOME-TAX KOZHIKODE. 5. D.R. I.T.A.T. COCHIN BENCH COCHIN. 6. GUARD FILE. BY ORDER (ASSISTANT REGISTRAR) I.T.A.T. COC HIN