SHRI KISHOREBHAI V. VITHLANI,,AHMEDABAD vs. THE INCOME TAX OFFICER, WARD-6(3),, BARODA

The grounds of appeal taken by the assessee are not in consonance with the Rule 8 of the Income Tax (Appellate Tribunal) Rules, 1963 - they are descriptive and argumentative in nature. In brief the grievance of the assessee is that the ld.CIT(A) has erred in upholding reopening of the assessment under section 147 of the Income Tax Act and confirmed the addition of Rs.9,43,500/- which was added by the AO under section 69A of the Act.

Brief facts of the case are that the assessee is an individual deriving income from share trading, pension and other sources.

On the basis of the above, the ld.AO reopened the assessment. The assessee was not satisfied with the action of the AO. He challenged reopening, but the ld.First Appellate Authority has upheld reopening of the assessment.

Before me, the ld.counsel for the assessee contended that on the basis of information received under AIR wing that cash was being deposited in the saving bank account, the AO cannot finally conclude that income has escaped the assessment. He ought to have collected more evidence before the formation of such opinion. His emphasis was that cash deposited in the bank account cannot be equated with escaped income. In support of his contentions, he relied upon the following decisions:

The ld.DR, on the other hand, relied upon orders of the ld.Revenue authorities and pointed out that the assessee has never filed return of income. How, the AO could verify, whether it was simplicitor cash available with the assessee or it is escaped income. He has to only form a prima facie opinion before issue of notice. He has formed that opinion.

I have duly considered rival submissions and gone through the record carefully. No doubt cash deposited in the bank account simplicitor cannot be construed as escaped income, because an assessee could have many source for availability of cash. If an assessee has explained source of cash and that was deposited then it would not be an escaped income. For example, the assessee has sold the land. He has the cash and he deposited the same in the bank account. It does not mean that it will be become escaped income automatically; but the question here is how to verify that fact. The assessee has not filed his return of income. Taking example given above further, the sale proceeds of land could have been considered by the assessee in the capital gain under normal and thereafter exemption under section 54, 54F etc., could be claimed. In that case the assessee can plead that; look I have all the details/information which can be compared, and only thereafter a prima facie opinion could be

In the next fold of grievance, the assessee has submitted that the ld.CIT(A) has erred in confirming the addition of Rs.9,43,500/- on account of unexplained investment in the bank account. The ld.counsel for the assessee compiled the details in tabular form. Let me take note of these details, which reads as under: Rs. Asstt.Order Appeared Para but denial having given loan 1. Khumanbhai B. Ahir 1,37,000 3.1 131 denied 2. Mahesh A. Patel 1,69,900 131 denied 3. Bharat Jadvi 1,00,000 131 denied (Ktchhi) 4. Dipak Patel 10,000 Address not known 5. Jayaram G. Fatak 1,50,000 Address not

A perusal of the above details would indicate that the assessee has explained the source from the above persons. Notices were sent to them, and three persons have denied of giving any loan to the assessee. Rest three could not be traced. The assessee was bound to give explanation of the source of deposits, which he miserably failed. The ld.counsel for the assessee made reference to the judgment of Hon’ble Supreme Court in the case Anandman Timber and Kishanchand Vs. CIT, 125 ITR 713 and submitted that no cross-examination was given to the assessee qua these persons.

It is pertinent to observe that they are the witnesses of the assessee. It is for the assessee to bring positive evidence on record demonstrating the identity of the person from whom he has taken loans. Their credit-worthiness and genuineness of the transactions. He failed to fulfill any of the ingredients. The Branch Manager has just given copy of bank statement, which is a fact. The assessee has not denied the fact that this account does not belong to him, and he has not deposited money in the account. The ld.counsel for the assessee further contended that the ld.CIT(A) did not permit him to produce additional evidence. What additional evidence assessee wants to produce ? Had he collected confirmation these persons or how they have taken ‘U- turn’ of their denial ? There is no evidence produced by the assessee for substantiating his claim. The case laws referred by him in the chart are not on the point, rather these are being referred only for the sake of reference. I do not wish to make

Next challenge made by the assessee is with regard to the levy of interest under section 234. It is consequential in nature, and this fold of grievance is also rejected.

In the result, the appeal of the assessee is dismissed.