Shri Rajubhai S.Patel, Anand v. The Income tax Officer,Intl.Taxn.,, Baroda

ITA 888/AHD/2011 | 2003-2004
Pronouncement Date: 30-08-2011 | Result: Dismissed

Appeal Details

RSA Number 88820514 RSA 2011
Assessee PAN AZPPP5546G
Bench Ahmedabad
Appeal Number ITA 888/AHD/2011
Duration Of Justice 5 month(s) 6 day(s)
Appellant Shri Rajubhai S.Patel, Anand
Respondent The Income tax Officer,Intl.Taxn.,, Baroda
Appeal Type Income Tax Appeal
Pronouncement Date 30-08-2011
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted SMC
Tribunal Order Date 30-08-2011
Date Of Final Hearing 05-05-2014
Next Hearing Date 05-05-2014
Assessment Year 2003-2004
Appeal Filed On 24-03-2011
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL : SMC BENCH : AHMEDABAD (BEFORE HONBLE SHRI T.K. SHARMA J.M .) I.T.A. NO. 888/AHD./2011 ASSESSMENT YEAR : 2003-2004 SHRI RAJUBHAI S. PATEL ANAND -VS- ITO (INT ERNATIONAL TAXATION) BARODA (PAN : AZPPP 5546G) (APPELLANT) (RESPO NDENT) APPELLANT BY : SHRI A.L.THAKKAR A.R . RESPONDENT BY : SHRI VINOD TANWANI SR. D.R. DATE OF HEARING : 19.08.2011 DATE OF PRONOUNCEMENT : 30.08.2011 O R D E R THIS APPEAL FILED BY THE ASSESSEE IS AGAINST THE O RDER DATED 18.01.2011 PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-IV AHMEDABAD CONFIRMING THE ADDITION OF RS.1 50 000/- UNDER SECTION 69 WHICH W AS MADE BY THE AO UNDER SECTION 68 OF THE I.T. ACT FOR THE ASSESSMENT YEAR 2003-2004. 2. BRIEFLY STATED THE FACTS ARE THAT THE ASSESSEE IS AN INDIVIDUAL. THE AO FRAMED THE ASSESSMENT UNDER SECTION 143(3) ON 24.12.2009 AT A TOTAL INCOME OF RS.1 50 000/- AS AGAINST NIL INCOME DECLARED BY THE ASSESSEE. THIS ADDITION WAS MADE UNDER SECTION 68 OF THE I.T. ACT 1961. THE REASONING GIVEN BY THE A O IS THAT CONFIRMATION LETTER OF SHRI ANWAR KAPADIA IS ONLY ON PLATE PAPER WITHOUT QUOTIN G PAN GENUINENESS OF THE TRANSACTION AND WITHOUT ANY SUPPORTING DOCUMENTS/EV IDENCES. FURTHER THE AO HAS MENTIONED THAT ON VERIFICATION OF COMPUTERIZED BANK STATEMENT IT IS SEEN THAT ON 10.06.2002 THERE IS A FIRST ENTRY OF CASH DEPOSIT O F RS.1 50 000/- AND THEREAFTER THE 2 ITA NO. 888-AHD-2011 ASSESSEE HAS ISSUED CHEQUE OF RS.3 50 000/- WHICH I S SHOWN AS WITHDRAWN FROM THE BANK. THE ASSESSEE HAS SIMPLY FILED A LETTER FROM M/S. AN VARBHAI ADAMBHAI KAPADIA STATING THAT AS WE HAVE NO NEED OF RS.1 50 000/- HENCE IT IS RETURNED. HOWEVER THE ASSESSEE DID NOT PRODUCE THE COPY OF BANK PASSBOOK/BANK STAT EMENT OF M/S. ANVARBHAI ADAMBHAI KAPADIA. THE AO OBSERVED THAT THE WITHDRAWAL OF RS. 1 50 000/- HAS BEEN MADE ON THE SAME DAY FROM THE BANK ACCOUNT IN WHICH CHEQUE OF R S.3 50 000/- WAS DEPOSITED BY M/S. ANVARBHAI ADAMBHAI KAPADIA. HENCE THE AO OBSERVED THAT THE ASSESSEE FAILED TO PROVE THE GENUINENESS OF THE TRANSACTION AND HENCE THE AD DITION OF RS.1 50 000/- IS MADE AS CASH DEPOSITED FROM UNDISCLOSED SOURCE OF INCOME UN DER SECTION 68 OF THE I.T. ACT 1961. 3. ON APPEAL BEFORE THE LD. CIT(A) THE A.R. FILED THE WRITTEN SUBMISSIONS THE RELEVANT PORTION OF WHICH HAS BEEN REPRODUCED BY TH E LD. CIT(A) IN PARA 2.1 OF THE IMPUGNED ORDER WHICH IS GIVEN HEREUNDER: THE APPELLANT HAD FILED HIS RETURN OF INCOME IN RE SPONSE TO NOTICE U/S 148 OF THE IT ACT DECLARING NIL INCOME. THE AO PASSED THE ORDE R AT AN INCOME OF RS. 1 50 000/- AFTER MAKING ADDITION OF RS. 1 50 000/- U/S 68 OF THE IT ACT 1961. 1. ON VERIFICATION OF FOOD ACCOUNT WITH DENA BANK THE AO ASKED THE APPELLANT TO CLARIFY THE ENTRIES OF CASH DEPOSIT OF RS. 1 50 000/- ON 10/6/2002 AND DEPOSIT BY WAY OF TRANSFER ENTRY OF RS. 5 00 000/- ON 24/7/200 2. IN THIS REGARD IT WAS CLARIFIED THAT RS.1 50 000/-WAS RECEIVED FROM ANWAR KAPADIA A ND RS.5 00 000/- WAS RECEIVED FROM SAMIR MOTORS. FURTHER IT WAS EXPLAIN ED THAT AT THE FIRST INSTANCE THE LOAN WAS ADVANCED TO THEM FROM THE SAME BANK ACCOUN T AND SUBSEQUENTLY THE AMOUNT WAS RECEIVED BACK AND CREDITED TO THE 00 ACC OUNT. EVEN THE CONFIRMATIONS WERE SUBMITTED TO THE AO. HOWEVER THROUGH INADVERT ENCE THE PAN OF ANWAR KAPADIA WAS NOT MENTIONED IN THE CONFIRMATION LETTE R AND THE SAME WAS MENTIONED IN THE REPLY TO SHOW CAUSE NOTICE. THE AO ARGUED TH AT THE CONFIRMATION OF ANWAR KAPADIA WAS ON A PLAIN PAPER WITHOUT ANY SUPPORTING EVIDENCES. THE AO ALSO ASKED FOR THE COPY OF BANK ACCOUNT OF ANWAR KAPADIA IN WHICH HE DEPOSITED THE MONEY RECEIVED AND HAD WITHDRAWN THE AMOUNT PAID BA CK TO THE APPELLANT. I. IN THIS REGARD IT IS RESPECTFULLY SUBMITTED T HAT THE APPELLANT HAD FIRST ADVANCED THE MONEY TO THE ABOVE MENTIONED PARTIES A ND THE SAME HAS BEEN RECOVERED BACK AND AS SUCH THE APPELLANT HAS NOT BO RROWED ANY MONEY FROM THEM. THIS IS NOT A CASE WHERE THE APPELLANT HAD RECEIVED LOAN/DEPOSIT AND DUE TO WANT OF CONFIRMATION THE ADDITION IS MAD E. INSTEAD IT IS APPELLANTS OWN MONEY THAT HAS BEEN RECEIVED BACK AN D HENCE THERE IS NO ELEMENT OF INCOME IN THE HANDS OF THE APPELLANT. AL SO BE IT ANY FORM OF 3 ITA NO. 888-AHD-2011 CONFIRMATION WHAT HAS TO BE CONSIDERED IS THE FACT OF THE MATTER AND NOT THE TYPE OF PAPER USED OR ANY IMMATERIAL THING. ALSO A S REGARDS THE COPY OF BANK ACCOUNT OF ANWAR KAPADIA IS CONCERNED IT IS P ERTINENT TO NOTE THAT SINCE THE APPELLANTS OWN FUNDS HAVE BEEN RECEIVED B ACK THERE IS NO NEED TO PROVE THE CREDITWORTHINESS OF THE PAYER AND SUPPORT IT WITH ANY DOCUMENTARY EVIDENCE II. HOWEVER IN PARA 3.2 OF THE ORDER THE AO HAS STATED THAT THE SUBMISSION OF ASSESSEE IS NOT ACCEPTABLE AND HAS AL SO GIVEN THE REASON FOR NOT ACCEPTING THE SAME. REGARDING THE SAME HE HAS MENTIONED THAT IN THE STATEMENT OF ACCOUNT OF THE APPELLANT WITH DENA BAN K THE FIRST ENTRY ON 10/6/2002 IS FOR CASH DEPOSIT OF RS. 1 50 000/- AND SECOND ENTRY IS DEBITED FOR THE CHEQUE ISSUED TO ANWARBHAI FOR RS. 3 50 000/-. IN THIS REGARD IT IS SUBMITTED THAT THE BOTH THE ENTRIES ARE ON THE SAME DAY AND HENCE THE CONTENTION OF AO IS NOT CORRECT AS GENERALLY THE ENTRY FOR CASH DEPOSIT/WITHDRAWAL FROM BANK IS IMMEDIATELY PASSED WHILE THE ENTRY FOR CHEQUE DEPOSIT/WITHDRAWAL IS PASSED BY THE BANK AT THE TIME OF CLEARING OF THE CHEQUE. HENCE THE SEQUENCE OF ENTRIES IS NOT CO NCLUSIVE IN ORDER TO BRING THE SAME TO TAX U/S 68 OF THE IT ACT. III. ALSO THE FACTS WERE SAME IN CASE OF BOTH T HE PARTIES. HOWEVER THE AO ACCEPTED THE EXPLANATION IN CASE OF SAMIR MOTORS AN D REJECTED THE SAME IN CASE OF ANWAR KAPADIA. IN THIS REGARD IT HAS BEEN H ELD BY THE KERALA HIGH COURT IN CASE OF CIT VS. C.P. ADAM (1976) 105 ITR 4 65 (KER) THAT WITH REGARDS TO CASH CREDITS THE SAME REASONING MUST BE ADOPTED FOR IDENTICAL EXPLANATIONS. 2. WITHOUT PREJUDICE TO ABOVE IT IS RESPECTFULLY SUBMITTED THAT THE APPELLANT HAS NOT MAINTAINED ANY BOOKS OF ACCOUNTS FOR THE RE LEVANT PERIOD. SINCE THE APPELLANT IS NOT MAINTAINING THE BOOKS OF ACCOUNTS THE PROVISIONS OF SECTION 68 OF THE I.T. ACT ARE NOT APPLICABLE. IN THIS REGARD WE RELY ON THE UNDER MENTIONED JUDICIAL DECISIONS:- I. CIT VS. BHAICHAND H. GANDHI (1983) 141 ITR 67 (B OM) CREDIT APPEARING IN THE PASS BOOK BUT NOT IN THE B OOKS OF THE ASSESSEE IN A PARTICULAR PREVIOUS YEAR CANNOT BE CHARGED TO INCOM E UNDER SECTION 68 II. MS. MAYAWATI VS. DY.CIT (2008) 113 TTJ (DELHI T RIB) 178 : (2008) 19 SOT 460 (DELHI TRIB) SECTION 68 WOULD HAVE NO APPLICATION WHERE THE ASS ESSEE WAS NOT MAINTAINING ANY BOOKS OF ACCOUNTS 3.1 AFTER CONSIDERING THE AFORESAID WRITTEN SUBMISS IONS OF THE LD. A.R. AND THE ASSESSMENT ORDER AND ALSO THE JUDICIAL DECISIONS R ELIED ON BY THE LD. A.R. THE LD. CIT(A) 4 ITA NO. 888-AHD-2011 CONFIRMED THE ADDITION OF RS.1 50 000/- MADE BY THE AO ON ACCOUNT OF UNDISCLOSED INCOME FOR THE DETAILED REASONS GIVEN IN PARA 2.2. AND 2.3 OF THE IMPUGNED ORDER. 2.2 I HAVE CAREFULLY CONSIDERED THE SUBMISSION OF THE LD. COUNSEL AS WELL AS THE FACTS OF THE CASE. THERE IS NO SUBSTANCE IN THE SUB MISSION OF THE LD. COUNSEL. THERE IS A DEPOSIT OF RS. 1 50 000/- IN APPELLANT'S BANK ACCOUNT. THE APPELLANT WAS THEREFORE REQUIRED TO EXPLAIN THE SOURCE OF DEPOSI T WITH PLAUSIBLE EVIDENCE. THE EXPLANATION OF THE APPELLANT THAT THE CASH WAS RECE IVED FROM SHRI ANVARBHAI KAPADIA WITHOUT ANY SUPPORTING EVIDENCE CANNOT BE S AID TO BE SATISFACTORY EXPLANATION. THE APPELLANT WAS REQUIRED TO ESTABLIS H WITH SUPPORTING EVIDENCE AS TO FROM WHERE SHRI ANVARBHAI KAPADIA ARRANGED THE C ASH OF RS. 1 50 000/- FOR HANDING OVER TO THE APPELLANT. IF IT WAS WITHDRAWN FROM HIS BANK ACCOUNT THEN THE EVIDENCE IN THE NATURE OF BANK STATEMENT OF SHRI AN VARBHAI KAPADIA WAS TO BE SUBMITTED. THE CONFIRMATION OF SHRI ANVARBHAI KAPAD IA IS FAULTY AS FROM IT THE GENUINENESS OF THE TRANSACTION AND CREDITWORTHINESS OF SHRI ANVARBHAI KAPADIA COULD NOT BE PROVED. THE STORY COOKED UP BY THE APP ELLANT IS FAR FROM ACCEPTANCE. THE CASH WAS DEPOSITED ON 10.06.2002 BEFORE THE CLE ARANCE OF CHEQUE THEREFORE THE WITHDRAWAL BY SHRI ANVARBHAI KAPADIA FROM THE L OAN AMOUNT OF RS. 3 50 000/- GIVEN BY CHEQUE CANNOT BE PRIOR TO THE TIME OF CASH DEPOSIT IN BANK BY THE ASSESSEE. CONSIDERING THE FACTS OF THE CASE AND THE ABOVE DISCUSSION I AM OF THE OPINION THAT THE APPELLANT HAD FAILED TO PROVE THE GENUINENESS OF THE TRANSACTION AND CREDITWORTHINESS OF SHRI ANVARBHAI KAPADIA FROM WHOM CASH OF RS. 1 50 000/- WAS ALLEGED TO BE RECEIVED. THE EXPLANAT ION OF THE APPELLANT THEREFORE CANNOT BE CONSIDERED AS SATISFACTORY AND IT IS HELD THAT THE APPELLANT HAD DEPOSITED THE CASH OF RS. 1 50 000/- IN HIS BANK ACCOUNT OUT OF HIS UNDISCLOSED INCOME. THE ASSESSING OFFICER WAS THUS JUSTIFIED IN MAKING THE ADDITION OF RS. 1 50 000/- TO THE INCOME OF THE APPELLANT AND THE FINDING OF THE ASSE SSING OFFICER IN THIS RESPECT IS SUSTAINED AND THE ADDITION IS CONFIRMED. 2.3 THE ASSESSING OFFICER HAD MADE THE ADDITION U/S 68 OF THE ACT. THE APPELLANT NEVER BROUGHT TO THE NOTICE OF THE ASSESSING OFFICE R THAT HE WAS NOT MAINTAINING THE BOOKS OF ACCOUNT. THE LD. COUNSEL HAD NOW CHALL ENGED THE ADDITION U/S 68 ON THE GROUND THAT THE APPELLANT HAD NOT MAINTAINED TH E BOOKS OF ACCOUNT THEREFORE ADDITION CANNOT BE MADE U/S 68 OF THE ACT. RELIANCE WAS PLACED ON THE DECISIONS OF THE HON'BLE BOMBAY HIGH COURT AND THE HON'BLE DELHI TRIBUNAL AS REFERRED TO IN PARA-2.1 ABOVE. HOWEVER THE HON'BLE KERALA HIGH CO URT IN A LATTER DECISION IN THE CASE OF SMT INDIRA RANI VS CIT 211 ITR 346 (KER .) HAD HELD THAT IN ABSENCE OF PROPER EXPLANATION ADDITION U/S 68 CAN BE MADE FOR THE CREDIT IN SAVING BANK ACCOUNT. LIKEWISE THE HON'BLE RAJASTHAN HIGH COURT IN THE CASE OF INDIAN WOOLLEN CARPET FACTORY VS. ITAT 260 ITR 658 (RAJ.) HAS HELD THAT ASSESSEE HAD FAILED TO DISCHARGE THE ONUS TO PROVE THE GENUINENE SS OF THE TRANSACTIONS MERE MENTIONING OF SEC 68 DOES NOT AFFECT THE ADDITION. SINCE THE APPELLANT COULD NOT ABLE TO DISCHARGE THE ONUS TO PROVE THE CREDIT OF R S. 1 50 000/- IN HIS BANK ACCOUNT THE MERE MENTIONING OF SEC. 68 DOES NOT AF FECT THE ADDITION. HOWEVER TO 5 ITA NO. 888-AHD-2011 SET AT REST THE CONTROVERSY THE ADDITION OF UNEXPL AINED DEPOSIT IN THE BANK ACCOUNT OF THE APPELLANT IS TREATED AS UNEXPLAINED INVESTME NT AND THE ADDITION IS CONFIRMED U/S 69 OF THE ACT. THE ONLY GROUND OF APPEAL IS DIS MISSED. 4. AGGRIEVED THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 5. AT THE TIME OF HEARING ON BEHALF OF THE ASSESSE E SHRI A.L.THAKKAR APPEARED AND REITERATED THE SUBMISSIONS MADE BEFORE THE LD. CIT( A). HE FURTHER POINTED OUT THAT THE ASSESSEE HAS SUBMITTED THE CONFIRMATION TO THE AO B UT THE AO DID NOT CONSIDER THE CONFIRMATION ON THE GROUND THAT THE ASSESSEE FAILED TO PRODUCE THE BANK ACCOUNT OF ANWAR KAPADIA. THE PAN OF ANWAR KAPADIA WAS ALSO FURNISHE D. THE LD. COUNSEL FAIRLY ADMITTED THAT BOTH THE ENTRIES I.E. THE FIRST ENTRY ON 10.6 .2002 FOR CASH DEPOSIT OF RS.1 50 000/- AND SECOND ENTRY FOR DEBITING THE CHEQUE ISSUED TO ANWA RBHAI FOR RS.3 50 000/- ARE ON THE SAME DAY BUT THE CONTENTION OF THE AO THAT THESE A RE NOT POSSIBLE IS NOT ACCEPTABLE. HE POINTED OUT THAT THE SEQUENCE OF ENTRIES IS NOT CON CLUSIVE IN ORDER TO INVOKE THE PROVISIONS CONTAINED IN SECTION 68 OF THE I.T. ACT 1961. HE ACCORDINGLY CONTENDED THAT THIS ISSUE BE RESTORED TO THE FILE OF THE AO FOR MAKING FURTHE R INVESTIGATION IN THE MATTER. 6. ON THE OTHER HAND SHRI VINOD TANWANI APPEARING ON BEHALF OF THE REVENUE VEHEMENTLY SUPPORTED THE ORDERS OF BOTH THE DEPARTM ENTAL AUTHORITIES. THE LD. D.R. POINTED OUT THAT THE BURDEN OF PROVING THE IDENTITY OF THE CREDITOR GENUINENESS OF THE TRANSACTION AND ALSO TO GIVE THE SOURCE OF DEPOSIT LIES ON THE ASSESSEE WHERE THERE IS AN UNEXPLAINED CASH CREDIT. IT IS OPEN TO THE AO TO HO LD THAT IT IS THE INCOME OF THE ASSESSEE AND NO FURTHER BURDEN LIES ON THE AO TO SHOW THAT I NCOME IN QUESTION COMES FROM ANY PARTICULAR SOURCE. THE ASSESSEE RECEIVED THE AMOUNT IN QUESTION OF RS.1 50 000/- IN CASH EVEN THOUGH THE PERSON TO WHOM IT IS RECEIVED IS HAVING BANK ACCOUNT. THE AO ASKED THE ASSESSEE TO PRODUCE THE BANK ACCOUNT OF SHRI AN WAR KAPADIA. IT WAS NEITHER PRODUCED BEFORE THE AO NOR BEFORE THE LD. CIT(A). EVEN BEFOR E THE TRIBUNAL HE HAS NOT PRODUCED THE SAME. KEEPING IN VIEW OF THESE FACTS THE LD. D .R. FURTHER POINTED OUT THAT THE ADDITION WAS RIGHTLY MADE BY THE AO AND CONFIRMED BY THE LD. CIT(A). THEREFORE THE ORDER OF THE LD. CIT(A) BE UPHELD. 6 ITA NO. 888-AHD-2011 7. HAVING HEARD BOTH THE SIDES I HAVE CAREFULLY GO NE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. IT IS PERTINENT TO NOTE THAT DES PITE THE EXPLANATION SOUGHT FROM THE AO THE ASSESSEE HAS NOT FURNISHED THE SOURCE OF DEPOSI T WITH PLAUSIBLE EVIDENCE EXCEPT THAT OF THE CONFIRMATION LETTER ON A PLAIN PAPER. THE AS SESSEE FAILED TO PROVE WITH SUPPORTING EVIDENCE LIKE BANK STATEMENT OF SHRI ANVARBHAI KAP ADIA WHO ARRANGED THE CASH OF RS.1 50 000/- FOR HANDING OVER TO THE ASSESSEE. FRO M THE BANK STATEMENT FURNISHED BY THE ASSESSEE IT IS CLEAR THAT CASH WAS DEPOSITED ON 10 .06.2002 BEFORE THE CLEARANCE OF CHEQUE THEREFORE THE WITHDRAWAL BY SHRI ANVARBHAI KAPADIA FROM THE LOAN AMOUNT OF RS.3 50 000/- GIVEN BY CHEQUE CANNOT BE PRIOR TO TH E TIME OF CASH DEPOSIT IN BANK BY THE ASSESSEE. THEREFORE THE ASSESSEE HAS FAILED TO PRO VE THE GENUINENESS OF THE TRANSACTION AND CREDITWORTHINESS OF SHRI ANVARBHAI KAPADIA THE CREDITOR. REGARDING SECOND PLEA OF THE ASSESSEE THAT THE ASSESSEE NEVER MAINTAINED TH E BOOKS OF ACCOUNTS AND THEREFORE THE ADDITION UNDER SECTION 68 CAN NOT BE MADE IS ALSO NOT TENABLE AS THE HONBLE KERALA HIGH COURT IN A LATEST DECISION IN THE CASE OF SMT. IND IRA RANI-VS- CIT REPORTED IN 211 ITR 346 (KER.) HAS HELD THAT IN ABSENCE OF PROPER EXPL ANATION ADDITION UNDER SECTION 68 CAN BE MADE FOR THE CREDIT IN BANK ACCOUNT. THE LD. CIT (A) ALSO FOLLOWED THE DECISION OF THE HONBLE RAJASTHAN HIGH COURT IN THE CASE OF INDIAN WOOLLEN CARPET FACTORY VS- ITAT REPORTED IN 260 ITR 658 (RAJ.). THEREFORE I AM OF THE VIEW THAT ADDITION OF RS.1 50 000/- WAS RIGHTLY MADE BY THE AO AND CONFIRMED BY THE LD. CIT(A) IN THE IMPUGNED ORDER. HENCE I INCLINE TO UPHOLD THE ORDER OF THE LD. CIT (A). RESULTANTLY THE APPEAL OF THE ASSESSEE IS DISMISSED. 8. IN THE RESULT THE APPEAL FILED BY THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 30. 08.2011. SD/- (T.K. SHARMA) JUDICIAL MEMBER DATED : 30/08/2011 7 ITA NO. 888-AHD-2011 COPY OF THE ORDER IS FORWARDED TO : 1) THE ASSESSEE 2) THE DEPARTMENT. 3) CIT(A.) CONCERNED 4) CIT CONCERNED 5) D.R. ITAT AHMEDABAD. TRUE COPY BY ORDER DEPUTY REGISTRAR ITAT AHMEDABAD TALUKDAR/SR.P.S.