GANESH NEGI,HARIDWAR vs. ITO, UTTRAKHAND
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Income Tax Appellate Tribunal, DEHRADUN CIRCUIT BENCH: DEHRADUN
This is an appeal against order dated 22.02.2017 passed by
learned Commissioner of Income Tax (Appeals) [ hereinafter referred
to as the learned CIT(A) ], Dehradun, pertaining to assessment year
2009-10.
ITA No.2840/Del/2017 AY: 2009-10 2. None appeared on behalf of the assessee despite service of
notice on various occasions on the address mentioned in Form No.
This appeal was filed by the assessee on 08.05.2017. The first
notice of hearing was issued on 10.11.2021, on which date, the
case was adjourned at the request of the assessee. Later on, the
matter was listed for hearing on 20.01.2022, 24.05.2022,
26.08.2022, 16.10.2022, 27.04.2023 and on 20.06.2023, i.e.,
today. On none of these occasions, the assessee was present either
in person or through Authorized Representative. Since, sufficient
opportunities have been given to the assessee, we proceed to
dispose of this appeal on hearing the learned DR and after perusing
the material available on record. The assessee raised the following
grounds of appeal before us:-
Because on facts and in circumstances of the case, the CIT (A) Dehradun has erred in confirming the addition of Rs 4,79,305.00 in the hands of the assessee although the same income was also assessed to the income of another assessee - Sh. Vinod Kumar, as has also been confirmed by the AO.
Because on facts and in circumstances of the case, the CIT(A), Dehradun has erred in treating the receipts of rs 9,50,000.00 as relating to liqour business, although the same pertain to contract business, and thus not allowing the benefit presumptive income u/s 44ad
ITA No.2840/Del/2017 AY: 2009-10 3. Because on facts and in circumstances of the case, the CIT(A), Dehradun has erred by not appreciating the submissions made by the assessee as well as - brushing aside the various court pronouncements & material made available to him.
That the assesee reserves the right to introduce any other ground of appeal and new facts with the kind permission of your Honours.
We have heard learned DR and perused the materials available
on record. The original return of income was filed by the assessee
on 08.03.2010 and assessment was framed under section 144 of
the Act on 28.11.2011 determining the total income at
Rs.51,85,026/-. After completion of assessment proceedings, based
on AIR information received regarding cash deposits made by the
assessee in the bank account to the tune of Rs.81,51,305/-, the
learned Assessing Officer issued notice under section 133(6) of the
Act to the assessee on 14.06.2012, which was not complied by the
assessee. Later, the copy of savings bank account was obtained
from the AIR Filer i.e. the Punjab National Bank (PNB). Perusal of
the said bank statements revealed that the cash deposit in PNB was
not considered by the learned Assessing Officer during the course of
framing original assessment under section 144 of the Act.
ITA No.2840/Del/2017 AY: 2009-10 4. Accordingly, the assessment for assessment year 2009-10 was
sought to be reopened by learned Assessing Officer after recording
reasons that the income of the assessee has escaped assessment. A
notice under section 148 of the Act was issued on 30.09.2013. The
assessee through his Authorized Representative replied that the
original return filed may be treated as a return in response to notice
under section 148 of the Act. The learned Assessing Officer
observed that the assessee has maintained bank account with PNB
Bank, Syndicate Bank, ICICI Bank and Allahabad Bank. Since the
cash deposits made in the ICICI Bank and Syndicate Bank were
already considered in the original assessment framed under section
144 of the Act on 28.11.2011, the learned Assessing Officer sought
an explanation together with the source for making cash deposit in
PNB Bank from the assessee in the impugned proceedings. During
the course of reassessment proceedings, the assessee claimed that
apart from retail trading of garments, he is also engaged in the
business of petty civil contracts. However, no details with regard to
assessee carrying on civil contract business were furnished with
cogent evidence before the learned Assessing Officer. Accordingly,
ITA No.2840/Del/2017 AY: 2009-10 with regard to cash deposits made in PNB amounting to
Rs.81,51,305/-, the assessee stated that he was working as sales
man for liquor licencee Sh. Vinod Kumar and all the transactions
were made on behalf of Sh. Vinod Kumar.
The assessee has also submitted affidavit of Sh. Vinod Kumar
along with the evidence of award of liquor licence to Sh. Vinod
Kumar. A statement on oath of Sh. Vinod Kumar was also recorded
under section 131 of the Act by learned Assessing Officer, who
confirmed the statement of the assessee. The assessee merely
stated that all the transactions in the said bank account belong to
Sh. Vinod Kumar and his bank account was merely used by Sh.
Vinod Kumar for the purposes of meeting day-to-day expenses of
wine shop, such as, payment of excise duty, Adhibhar, licence fees,
staff salary, rent, business promotion, electricity, telephone, freight
etc. The assessee also submitted copies of excise challans, excise
records and TCS certificate of Sh. Vinod Kumar in support of his
claim. Learned Assessing Officer observed that out of total deposits
in the bank account amounting to Rs.83,40,029/-, he gave benefit
of Rs.4,70,482/-, which was paid to M/s. Jagjeet Industries and
ITA No.2840/Del/2017 AY: 2009-10 M/s. National Industries, which was also declared as purchase by
Sh. Vinod Kumar. After deducting the said sum, the remaining
amount of Rs.78,69,574/- was added as unexplained money of the
assessee in the assessment.
With regard to cash deposit of Rs.9,50,000/- made in
Allahabad Bank, the assessee stated that he was a petty civil
contractor and the said deposits were made out of the payments
received against civil construction work. In support of this claim,
the assessee submitted affidavits of Sh. Rajneesh Singh, Sh. Kamal
Singh, Sh. Jagdish Singh, and Sh. Jaswant Singh. The assessee
also produced Sh. Rajneesh Singh, Sh. Kamal Singh and Sh.
Jaswant Singh before learned Assessing Officer for recording
statements from them. Those parties also filed affidavits before the
leaned Assessing Officer. The learned Assessing Officer, however,
brushed aside the affidavits and statements of these persons by
stating that this exercise was made only to justify the incorrect
claim of the assessee. The learned Assessing Officer observed that
all these three persons claimed their income to be below Rs 1 lakh
in a year, whereas, they had made payments of Rs.3,40,000;
ITA No.2840/Del/2017 AY: 2009-10 Rs.4,25,000/- and Rs.13,90,000/- respectively to the assessee. No
details of payments made by Sh. Jagdish to the assessee were filed.
Learned Assessing Officer also observed that not a single person
was found owner of the house, on which construction work was
claimed allegedly by the assessee. The Inspector of Income Tax
Department attached to the Assessing Officer was also deputed to
make spot inquiries in the case of Sh. Kamal Singh, which revealed
that only some grout work on the roof was made 4 to 5 years back,
which contradicts the statements given by Sh. Kamal Singh that he
paid Rs.4,25,000/- to the assessee for such small work.
With the aforesaid observations, learned Assessing Officer
disbelieved the existence of business of civil construction work
carried out by the assessee. The learned Assessing Officer also
obtained the entire bank statements of Allahabad Bank account by
issuing notice under section 133(6) of the Act to the bank. On an
analysis of the transactions in the said bank account, the learned
Assessing Officer concluded that no payments were made in
connection with civil construction work allegedly carried out by the
ITA No.2840/Del/2017 AY: 2009-10 assessee. This strengthens the belief of the learned Assessing
Officer that no civil construction business was, indeed, carried out
by the assessee. Accordingly, the learned Assessing Officer treated
the deposits in the Allahabad Bank amounting to Rs.9,50,000/- as
unexplained money belonging to the assessee and added the same
in the assessment year.
A written submission was filed before the learned
Commissioner of Income Tax (Appeals) [hereinafter referred to as
‘CIT(A)] on behalf of the assessee. Based on the contentions raised
in the written submission, learned CIT(A) called for a remand report
from learned Assessing Officer. The remand report was submitted
by learned Assessing Officer vide letter dated 20th January, 2017.
Learned CIT(A) after considering the remand report and the written
submissions of the assessee, disposed of the grounds raised by the
assessee before him by observing as under:
“14. I have duly considered the facts and circumstances of the case. Since the AO after examining the case of both, the assesses and Sh. Vinod Kumar is now convinced that the cash deposit of Rs. 76.72 lacs made in the PNB Saving Bank account of Sh. Ganesh Negi were the sale deposits of liquor business of Sh. Vinod Kumar and that the income from such liquor business was to be assessed in the hands of Sh. Vinod Kumar as he was the actual owner and 8
ITA No.2840/Del/2017 AY: 2009-10
the assesses was only a salesman, it is clear that the deposit in the bank account at PNB, Pauri cannot be added to the income of the assesses. Therefore, of the addition of Rs. 78.69,574/-, a sum of Rs. 76.72 lacsidentified as cash deposit on account of liquor business cannot be sustained in thehands of the assesses. This leaves the balance of Rs. 1,97,574/- which is still unexplained. It is observed that there is no explanation for this excess amount and also no explanation for the remaining deposit of Rs. 2,81,731/- that, total up to deposit of Rs. 81.51,305/- in the said account. Therefore, of the total of Rs. 81,51,305/-, a sum of Rs. 4,79,305/- is assessed as unexplained investment in the bank account at PNB, Pauri while the balance is treated as cash deposit of liquor business of Sh. Vinod Kumar and no adverse inference is drawn against the same. Accordingly, the same is deleted.
With regard to the explanation of deposit of Rs. 9,50,000/- in the account at Allahabad Bank, it is quite - clear from the detailed analysis of the withdrawals and deposits done by the AO that this account was not used for contras business as submitted by the assesses but also used for making payments for liquor business. The assesses has not furnished a satisfactory explanation for the receipts tn the bank account. The persons from whom the payments are purported to be received are ,men of no means and the houses on which the work was supposed to have been done were not owned by them. No details or proof of payment could be provided. Hence, the deposit is quite clearly unexplained and deserves to be rought to tax as unexplained investment u/s 69. The addition is accordingly confirmed. In the result, the appeal is partly allowed.” 16.
The assessee before us was not able to controvert the aforesaid
findings of learned CIT(A) and hence, we do not deem it fit to
interfere in the said order of learned CIT(A). Accordingly, grounds
raised by the assessee are dismissed.
ITA No.2840/Del/2017 AY: 2009-10
In the result, appeal of the assessee is dismissed.
Order pronounced in Open Court on 23rd June, 2023
Sd/- Sd/- (SAKTIJIT DEY) (M. BALAGANESH) VICE PRESIDENT ACCOUNTANT MEMBER
Dated: 23/06/2023 RK/Sr.PS Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI (Dehradun Circuit Bench, Dehradun)
