DHANWANTIBEN DARSHIYANI,,GODHRA vs. THE ACIT, CENTRAL CIRCLE-1,, BARODA

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ITSSA 70/AHD/2018Status: DisposedITAT Ahmedabad28 June 2024AY 2007-087 pages

In favour of the Revenue: the assessee's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the appeal filed by the assessee is dismissed. The primary contention of the assessee that the income of Rs. 1,00,00,000/- had already been offered for taxation in subsequent years was not substantiated with any evidence, neither before the CIT(A) nor before the Tribunal. The CIT(A) had specifically noted this failure to provide evidence. The Tribunal agreed with the CIT(A)'s finding that the receipt of Rs. 1,00,00,000/- on 23/04/2006 clearly pertained to the impugned assessment year 2007-08 (Financial Year 2006-07) and should have been offered to tax in that year. Since the assessee failed to prove the identity, genuineness, and creditworthiness of the transaction, the AO was correct in making the addition under Section 68 of the Act. The Tribunal found no infirmity in the order of the CIT(A) and therefore confirmed the addition. The issue of whether the assessee is required to identify the creditor and establish genuineness in cases of disclosure based on incriminating material found during search was noted but not decided as it was not required for disposal of this appeal.

What were the facts?

The assessee, Dhanwantiben Darshiyani, is in appeal against the order of the Commissioner of Income Tax (Appeals) - 12, Ahmedabad, dated 19/01/2018, for Assessment Year 2007-08. A search under Section 132 of the Income Tax Act, 1961, was conducted on the Dhanjimama Group of cases, including the assessee, on 03/07/2012. During the search, a cash book of unaccounted transactions revealed a cash receipt of Rs. 1,00,00,000/- in the name of 'R.K.' on 23/04/2006, recorded as an advance received. The Assessing Officer (AO) added this amount as unexplained cash credit under Section 68 of the Act, as the assessee could not furnish identity, creditworthiness, or genuineness of the transaction. The CIT(A) confirmed the addition, holding that the receipt pertained to the financial year 2006-07 (Assessment Year 2007-08) and was not offered for taxation in that year, despite disclosures made for subsequent assessment years.

What were the issues?

1. Whether the addition of Rs. 1,00,00,000/- as unexplained cash credit under Section 68 of the Income Tax Act, 1961, is justified, when the assessee claims it forms part of undisclosed books of accounts and was already considered in the return of income filed under Section 153A of the Act. Assessee's Contention: The assessee argued that the Rs. 1,00,00,000/- represents cash received which is part of undisclosed books of accounts and has already been considered in the return of income filed under Section 153A. The transactions arising from this undisclosed income have been duly considered and offered to tax in the appropriate year of taxation, including in subsequent years. The assessee primarily reiterated submissions made before the CIT(A) that the income was offered for taxation in subsequent years. Revenue's Contention: The revenue, through the AO and confirmed by the CIT(A), contended that the cash receipt of Rs. 1,00,00,000/- occurred on 23/04/2006, falling within the financial year 2006-07, corresponding to Assessment Year 2007-08. Since no disclosure was made for this specific year, and the assessee failed to provide evidence of identity, creditworthiness, and genuineness of the transaction, the addition under Section 68 was justified. The CIT(A) specifically noted that the assessee failed to provide evidence that this income was offered to tax in subsequent years.

Which sections of the Income-tax Act were involved?

Section 68,Section 132,Section 153A,Section 250

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, AHMEDABAD “A” BENCH

Before: Smt. Annapurna Gupta & Shri Siddhartha Nautiyal

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “A” BENCH Before: Smt. Annapurna Gupta, Accountant Member And Shri Siddhartha Nautiyal, Judicial Member

IT(SS)A No.70/Ahd/2018 Assessment Year 2007-08

Dhanwantiben Darshiyani The ACIT, 1, “Parth” Vrundavan Central Circle-1, Nagar Society, Vs Baroda Bamroli Road, Godhar 389001 (Respondent) PAN: ADPPD9128C (Appellant) Assessee Represented: Shri Ketan H. Shah, A.R. Revenue Represented: Shri Aarsi Prasad, CIT-DR Date of hearing : 03-04-2024 Date of pronouncement : 28-06 -2024 आदेश/ORDER PER : SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER:-

This is an appeal filed by the assessee against the order of Ld. Commissioner of Income Tax-12, Ahmedabad, in proceeding u/s 250 vide order dated 19/01/2018 passed for the Assessment Year 2007-08.

2.

The assessee has taken following grounds of appeal:

1.01 On the facts and circumstances of appellant's case and in law, the Hon'ble CIT (Appeals) has erred in confirming the action of ld. AO by

I.T.(SS)A No. 70/Ahd/2018 A.Y. 2007-08 2 Dhanwantiben Darshiyani vs. ACIT

making an addition of Rs. 1,00,00,000/- under section 68 of the Income Tax Act, 1961 as unexplained cash credit The Hon'ble CIT (Appeal) failed to appreciate the fact that Rs.1,00,00,000/- refers to the cash received which forms part of undisclosed books of accounts and already considered in the return of income filed under section 153A of the Act.

1.02 Your appellant prays to hold so now and delete the impugned penalty.

3.

The brief facts of the case are that a search was carried out at the premises of Dhanjimama Group of cases u/s. 132 of the Act on 03/07/2012 and included the assessee as well. The assessee filed return of income for A.Y. 2007-08 showing total income of Rs.2,85,390/- along with an agricultural income of Rs.1,10,007/-. The assessing officer called for various details and observed that during the search proceedings, on perusal of the cash book of unaccounted transactions submitted by the assessee, it is seen that a sum of Rs.1,00,00,000/- in the name of “R.K.” was shown to have been received in cash on 23/04/2006. This amount was brought into books as advance received but the assessee had not furnished even the identity, creditworthiness of the person and genuineness of the transaction could not therefore be examined. Since, the genuineness of cash receipt of Rs.1,00,00,000/- could not be proved beyond doubt by the assessee, the A.O. added the amount of Rs.1,00,00,000/- as unexplained cash credit u/s. 68 of the Act.

4.

In appeal before Ld. CIT(A), the assessee submitted that the said amount of Rs.1,00,00,000/- was taken into consideration while working of peak credit and further, the said cash book represents

I.T.(SS)A No. 70/Ahd/2018 A.Y. 2007-08 3 Dhanwantiben Darshiyani vs. ACIT

unaccounted and undisclosed income for various years. The assessee submitted that the transactions arising from said undisclosed income have been duly considered and offered to tax in the appropriate year of taxation. However, Ld. CIT(A) dismissed the appeal of the assessee by observing that this amount of Rs.1,00,00,000/- has been received by the assessee on 23.04.2006 and therefore the said amount has to be taken into account in the working of disclosure of unaccounted receipt for assessment year 2007-08 itself. Though the assessee has made disclosures for assessment years 2008-09 to 2013-14, but the same pertains to later years and therefore, the A.O. is correct in holding that the sum of Rs.1,00,00,000/- in the name of “R.K.” as cash receipt on 23.04.2006 remains unexplained and is liable to be added to the total income for the impugned assessment year. While confirming the addition, the Ld. CIT(A) made the following observations:

“The matter on its facts and in law is very simple. The amount under consideration i.e. the fact of receipt of Rs.1,00,00,000/- form one R. K. on 23/04/2006 in the hands of the appellant is duly admitted by the Group and the appellant as is evident from the cash book drawn by the Group based on various documents unearthed during the course of search. It has only to be seen whether the said amount has been taken into account in the working of disclosure of unaccounted receipt in the hands of the appellant (and for that matter even in the hands of any entity in the Group). No doubt various disclosures have been made by the various entities in the group and the appellant for various years but the fact remains that those disclosures are for the period from A.Y.2008-09 to Α.Υ.2013-14 i.e. for the period after the A.Y. 2007-08 (i.e. F.Y.2006-07 corresponding to 23/04/2006, the date of receipt of unexplained money) and therefore by no principle of accounting whether peak method is considered by the AO or not, it can be conceded that the said amount has been included by the appellant and for that matter by any assessee in the Group in their disclosures made for A.Y.2007-08. Thus the AO is correct in holding that Rs.1,00,00,000/- in the name of R. K. shown as cash receipt

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on 23/04/2006 remains unexplained and is liable to be added to the total income. The addition made by the AO has to be confirmed.”

………………………..

It has been brought to my notice that all the entries including entry under question were reflected as part of undisclosed income which was ultimately taxed in the hands of one or the other group members of appellant. But same is totally wrong assertion by the appellant and not tenable at all. The Ld AR has failed to evidence the assertion. It is may be that theoretically the entry under consideration is receipt shown in cash book of undisclosed income of Shri Mukesh D. Manglani for A.Y.2010-11, but practically the same does not help the situation as the receipt under consideration is of F.Y.2006-07 and therefore whatever be its treatment, it has to be in A.Y. 2007-08 only and not in any other year. Though it is a different matter altogether whether the assessee/appellant in case of disclosure based on incriminating material found during the search is required to identify the creditor and establish the genuineness of transaction and the creditworthiness of the creditor or not, which is not required to be dealt upon in this order.

The argument of the appellant does not in any way prove that there is any dispute about the said entry of Rs.1,00,00,000/- identified by the AO. It is wrong on the part of Appellant on facts and on the principles of accountancy and taxation to assert that the said entry of Rs.1,00,00,000/- identified by the AO is already part of undisclosed books and in turn part of undisclosed income. It is wrong because the receipt and the entry related there to pertain to F.Y.2006-07 i.e. A.Y.2007-08 and for this year no disclosure has been made in the return of income and therefore the AO rightly wanted the appellant to furnish the document to prove identity, genuineness and creditworthiness of said transaction and since the appellant could not submit the same, the AO correctly made addition u/s 68 of the Act. No interference is required to be made in the assessment made. The appellant fails on this account also.

9.

Thus in the result, the addition made by the AO is confirmed and the appeal is dismissed.”

5.

The assessee is in appeal before us against the aforesaid order passed by Ld. CIT(A). The primary contention of the counsel for the assessee before us is that the income of Rs.1,00,00,000/- has

I.T.(SS)A No. 70/Ahd/2018 A.Y. 2007-08 5 Dhanwantiben Darshiyani vs. ACIT

already been offered for taxation in subsequent years and therefore, there is no justification in again making addition of this amount for assessment year 2007-08. Before us, the Counsel for the assessee primarily reiterated the submissions which were made before Ld. CIT(A) during the course of appellate proceedings, which are to the effect that transactions arising from said undisclosed income are considered and are income flowing from the said unaccounted books of accounts is also considered in the appropriate year of taxation. However, on going through the contents of the Ld. CIT(A)’s order, we observe that even before Ld. CIT(A) as well as before us, the Counsel for the assessee has failed to given any evidence to substantiate that this income has been offered to tax by the assessee in subsequent years. We observe that this issue was specifically dealt with by Ld. CIT(A), while dismissing the appeal of the assessee, in the following words:

“It has been brought to my notice that all the entries including entry under question were reflected as part of undisclosed income which was ultimately taxed in the hands of one or the other group members of appellant. But same is totally wrong assertion by the appellant and not tenable at all. The Ld AR has failed to evidence the assertion.”

5.1. Therefore, Ld. CIT(A) has specifically noted that the assessee has failed to substantiate that this income has been offered to tax by the assessee in any subsequent years. Even before us, the assessee has not given any evidence to show that this income has been offered by the assessee to tax in any of the subsequent years. Further, while passing the order, the Ld. CIT(A) has specifically noted that the assessee has not given any rational whatsoever to

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show that this income was liable to be taxed in any subsequent years, especially in the light of the fact that this amount of Rs.1,00,00,000/- was admittedly received by the assessee on 23/04/2006. Accordingly, Ld. CIT(A) has given specific finding that this amount clearly pertains to the impugned year under consideration and accordingly, the same should have been offered to tax by the assessee during the impugned assessment year itself. Accordingly, Ld. CIT(A) held that the A.O. is correct in holding that sum of Rs.1,00,00,000/- in the name of “R.K.” shown as cash receipt on 23/04/2006 remains unexplained and is liable to be added to the total income of the assessee. The Ld. CIT(A) made the following observations in this regard:

“It is wrong on the part of Appellant on facts and on the principles of accountancy and taxation to assert that the said entry of Rs.1,00,00,000/- identified by the AO is already part of undisclosed books and in turn part of undisclosed income. It is wrong because the receipt and the entry related there to pertain to F.Y.2006-07 i.e. A.Y.2007-08 and for this year no disclosure has been made in the return of income and therefore the AO rightly wanted the appellant to furnish the document to prove identity, genuineness and creditworthiness of said transaction and since the appellant could not submit the same, the AO correctly made addition u/s 68 of the Act. No interference is required to be made in the assessment made. The appellant fails on this account also.”

5.2. Accordingly, looking into the instant facts and the documents placed on record before us, we are of the considered view that there is no infirmity in the order of the Ld. CIT(A) so as to call for any interference.

I.T.(SS)A No. 70/Ahd/2018 A.Y. 2007-08 7 Dhanwantiben Darshiyani vs. ACIT

6.

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

Order pronounced in the open court on 28-06-2024

Sd/- Sd/- (ANNAPURNA GUPTA) (SIDDHARTHA NAUTIYAL) ACCOUNTANT MEMBER True Copy JUDICIAL MEMBER Ahmedabad : Dated 28/06/2024 आदेश क� ��त�ल�प अ�े�षत / Copy of Order Forwarded to:- 1. Assessee 2. Revenue 3. Concerned CIT 4. CIT (A) 5. DR, ITAT, Ahmedabad 6. Guard file. By order/आदेश से, उप/सहायक पंजीकार आयकर अपील�य अ�धकरण, अहमदाबाद

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