MR PARVEZ MOHD YUSUF KOKANI,NASHIK vs. ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-2, NASHIK, NASHIK

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ITSSA 17/PUN/2023Status: DisposedITAT Pune25 July 2023AY 2010-116 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 dismissed all grounds of appeal. Regarding Ground No. 1, the Tribunal found that incriminating material was indeed seized under section 132 of the Act, as referred to in the assessment order and the CIT(A)'s order. The assessee failed to provide evidence to the contrary, thus the AO's action in issuing notice under section 153A was held valid. For Ground No. 2, the Tribunal concurred with the CIT(A) that the opening cash balance was Nil, as the assessee failed to provide any documents or specify the exact quantum of opening cash balance before the Tribunal or lower authorities. Regarding Ground No. 3, the Tribunal noted that the addition of Rs. 8 lacs had already been deleted by the CIT(A), rendering the ground infructuous and without a cause of action for the assessee to appeal. Consequently, the appeal was dismissed.

What were the facts?

The assessee, Mr. Parvez Mohd. Yusuf Kokani, filed an appeal before the Income Tax Appellate Tribunal (ITAT), Pune Bench, challenging the order of the Commissioner of Income Tax (Appeal) dated 30.09.2021 for Assessment Year 2010-11. The Assessing Officer (AO) had passed an order under section 153A r.w.s 144 of the Income Tax Act, 1961, making additions of Rs. 5,46,000/- for unexplained business expenditure and Rs. 8,00,000/- for unexplained investment. These additions were based on seized documents found during a search under section 132 of the Act on 08.09.2015. The assessee had not filed any reply or return in response to the notice under section 153A, nor complied with subsequent notices. The assessee appealed to the CIT(A), who deleted both additions after considering additional evidence and a remand report. The Revenue did not file an appeal against the CIT(A)'s order.

What were the issues?

1. Whether the entire order passed under section 153A for AY 2010-11 is bad in law, especially in view of the fact that no incriminating material was found for the said assessment year? - Assessee's contention: The AO erred in passing the order under section 153A as no incriminating material was found for the assessment year, rendering the entire order invalid. - Revenue's contention: Not recorded. 2. Whether the Learned CIT(A) erred in considering the opening cash balance as Nil, when the appellant has business and agriculture income in previous years and a reasonable opening balance of Rs. 6,00,000/- should be considered? - Assessee's contention: The CIT(A) incorrectly treated the opening cash balance as Nil, despite the assessee having business and agricultural income in prior years, and argued for a reasonable opening balance of Rs. 6,00,000/-. - Revenue's contention: Not recorded. 3. Whether the lower authorities erred in confirming the addition of Rs. 8,00,000/- based on certain entries in the alleged incriminating material (page 35, Annexure A-1), disregarding the appellant's contention that the entry is not linked to any specific transaction and thus cannot be considered an application of cash in hand balance?

Which sections of the Income-tax Act were involved?

Section 153A,Section 144,Section 139,Section 132,Section 142(1),Section 271(1)(b)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, PUNE BENCHES “B” :: PUNE

Before: SHRI S.S.GODARA & DR. DIPAK P. RIPOTE

For Appellant: Shri Pramod Shingte – AR
For Respondent: Shri Deepak Garg – DR
Hearing: 25/05/2023Pronounced: 25/07/2023

आयकर अपीलीय अिधकरण ”बी” �ायपीठ पुणेम�। IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCHES “B” :: PUNE BEFORE SHRI S.S.GODARA, JUDICIAL MEMBER AND DR. DIPAK P. RIPOTE, ACCOUNTANT MEMBER आयकर अपील सं. / IT(SS)A No.17/PUN/2023 िनधा�रण वष� / Assessment Year : 2010-11 Mr.Parvez Mohd. Yusuf The Assistant Kokani, V Commissioner of Income Flat No.23, Detta Royal s Tax, Central Circle-2, Society, Nashik. Near Ashoka Marg, Nashik – 422011. PAN: AXPK 5901 A Appellant / Assessee Respondent / Revenue Assessee by Shri Pramod Shingte – AR Revenue by Shri Deepak Garg – DR Date of hearing 25/05/2023 Date of pronouncement 25/07/2023 आदेश/ ORDER PER DR. DIPAK P. RIPOTE, AM: This appeal filed by the Assessee is directed against the order of ld.Commissioner of Income Tax (Appeal), Pune-12, dated 30.09.2021 for the A.Y.2010-11. The Assessee has raised the following grounds of appeal : “1. On the facts and in the circumstances of the case and in law, the Learned Assessing Officer erred in passing an order under section 153 A for A.Y. 2010-11 especially in view of the fact that no incriminating material was found for the said assessment year, therefore entire order is bad in law, and deserves to be struck down.

2.

On the facts and in the circumstances of the case and in law, the Learned CIT appeal erred in considering the opening cash balance as Nil, in spite of the fact, that appellant is having business income and agriculture income in previous years also therefore reasonable opening balance to the extent of Rs.6,00,000 may kindly be considered.

3.

On the facts and in the circumstances of the case and in law, the lower authorities have erred it confirming the addition of Rs.8,00,000 on the basis of certain entries in the alleged incriminating material referred as page no 35, as page no annexure A -1 by disregarding appellants contention that the reliant entry does not get linked to any specific transaction, and therefore such addition can not be considered as application of cash in hand balance.”

Findings and Analysis : 2. It is observed that an assessment order under section 144 r.w.s 153A of the Income Tax Act, 1961 was passed for A.Y.2010-11 on 29.12.2017 by the ld.ACIT, Central Circle-2, Nashik. The Assessing Officer(AO) made addition of Rs.5,46,000/- under the head Unexplained Business Expenditure and Rs.8 lacs under the head Unexplained Investment. It is observed that assessee had filed Return of Income under section 139 of the Act on 31.03.2012 declaring total income at Rs.8,89,600/- and agricultural income at Rs.4,90,600/-. There was no regular assessment in the case of assessee for A.Y.2010- 11. A Search under section 132 of the Income Tax Act was carried out by the Income Tax Department on 08.09.2015 at the residential premises of the assessee. Accordingly, the AO issued notice under section 153A of the Act. Assessee had not filed any reply or any return in response to notice under section 153A of the Act. The AO issued various notices under section 142(1) and penalty notice for non-compliance under section 271(1)(b) of the Act. However, assessee had not complied to any of the notices. The AO passed an ex-party order and made the above mentioned additions. The AO has categorically referred in the assessment order the seized documents which were seized at Annexure A-1 from the premises of the assessee during the search under section 132 of the Act. Aggrieved by the assessment order, the assessee filed an appeal before the ld.CIT(A).

3.

The assessee filed certain additional evidences. The ld.CIT(A) had called for Remand Report. The ld.CIT(A) after considering evidences filed by the assessee deleted both the additions. In these facts and circumstances of the case, when the entire addition has been deleted by the ld.CIT(A) and Department has not filed any appeal against the order of the ld.CIT(A), which means the Return of Income filed by the assessee under section 139 attains finality. Thus, there is no cause of action or any grievance for the assessee to file an appeal before this Tribunal.

4.

Be it as it may be, the assessee has raised first ground as legal ground that no incriminating material was found. However, on perusal of the assessment order, ld.CIT(A)’s order and the assessee’s paper book, it is observed that there were seized material seized under section 132 of the Act. The AO and ld.CIT(A) has referred to these materials in the orders. The ld.Authorised Representative has not pointed out before us any evidence to explain that there was no seized documents. In these facts and circumstances of the case, we are convinced that there were incriminating material as mentioned in the assessment order and therefore action of the AO issuing notice under section 153A of the Act is absolutely valid and as per law. Therefore, Ground No.1 of the assessee is dismissed.

Ground No.2 : 5. The assessee’s grievance in this ground is that the ld.CIT(A) while deleting the addition has mentioned that opening cash balance was Nil. Thus, the assessee’s only grievance is that the statement of ld.CIT(A) regarding opening cash balance. However, it is observed that assessee has not filed any documents before us to prove the quantum of opening cash balance, rather it is observed that nowhere in the submission assessee has specifically mentioned the exact quantum of opening cash balance. Assessee has not filed any documentary evidence to prove opening cash balance. In these facts and circumstances of the case, we concur with the ld.CIT(A) that opening cash balance was Nil. Accordingly, Grounds No.2 of the assessee is dismissed.

Ground No.3 6. The ground is regarding addition of Rs.8 lacs which has already been deleted by the ld.CIT(A) in para 4 of the order, therefore, we need not adjudicate the ground as there is no cause of action, accordingly, Ground No.3 is dismissed.

7.

In the result, appeal of the assessee is dismissed. Order pronounced in the open Court on 25th July, 2023.

Sd/- Sd/- (S.S.GODARA) (DR. DIPAK P. RIPOTE) JUDICIAL MEMBER ACCOUNTANT MEMBER पुणे / Pune; �दनांक / Dated : 25th July, 2023/ SGR* आदेशक��ितिलिपअ�ेिषत / Copy of the Order forwarded to : अपीलाथ� / The Appellant. 1. ��यथ� / The Respondent. 2. 3. The CIT(A), concerned. 4. The Pr. CIT, concerned. 5. िवभागीय�ितिनिध, आयकर अपीलीय अिधकरण, “बी” ब�च, पुणे / DR, ITAT, “B” Bench, Pune. गाड�फ़ाइल / Guard File. 6. आदेशानुसार / BY ORDER, // TRUE COPY // Senior Private Secretary आयकर अपीलीय अिधकरण, पुणे/ITAT, Pune.

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