SHRI DARASHANSINGH A. BINDRA,,NASHIK vs. ASSISTANT COMMISSIONER OF INCOME-TAX, CENTARAL CIRCLE -2, NASHIK

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ITSSA 43/PUN/2022Status: DisposedITAT Pune06 July 2023AY 2003-0412 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 the appeals filed by Jagdishsingh A. Bindra and Darshansingh A. Bindra. Regarding the first issue, the Tribunal held that the assessees failed to adduce cogent evidence to disprove the findings of the CIT(A) or to bring out variations in the factual position. Citing the Supreme Court's ratio in 'Hindustan Ferodo Ltd. Vs CCE' and 'Parimisetti Seetharamamma Vs CIT', the Tribunal stated that when a claimant fails to adduce evidence to discharge the onus, the claim fails. Therefore, the arguments challenging the sustenance of the addition of ₹25,50,000/- were rejected. For the second issue concerning AY 2003-04, the Tribunal noted that the assessee had failed to adduce any evidential material before the AO or the first appellate authority, despite multiple opportunities. The CIT(A) had dismissed the appeal on the grounds that the assessee failed to show how the cash flow arrived at by the AO was incorrect and that there would be no cash balance left to carry forward from AY 2002-03 due to upheld additions. The Tribunal concurred with this reasoning, finding no infirmity in the AO's order and upholding the addition of ₹18,69,194/-. Consequently, all grounds raised by the assessees were dismissed.

What were the facts?

The Income Tax Appellate Tribunal (ITAT), Pune Bench, heard appeals filed by Jagdishsingh A. Bindra and Darshansingh A. Bindra against orders of the CIT(A)-12, Pune. These orders arose from assessment orders passed by the Assistant Commissioner of Income Tax, Central Circle-2, Nashik, for Assessment Years (AY) 2002-03 and 2003-04. A search and seizure action under Section 132 of the Income Tax Act, 1961, was conducted on the Bindra Group on March 15, 2007. The assessees were engaged in the transportation business and offered income under Section 44AE. In the absence of books of accounts, cash flow statements were rejected, and undisclosed investments were brought to tax. Previous appeals to the ITAT had resulted in directions to allow a 40% credit on claims made in the cash-flow statements.

What were the issues?

1. Whether the Tribunal was justified in upholding the addition of ₹25,50,000/- representing the appellant's 50% share in undisclosed investment in properties, as per the seized diary entries, for AY 2002-03 and 2003-04? The assessee contended that they had provided sufficient evidence and that the cash flow statements, though not books of accounts, should have been considered. The revenue argued that the assessee failed to discharge the onus of proof regarding the correctness of their claims and the nature of the investments. 2. Whether the addition of ₹18,69,194/- on account of a negative cash balance for AY 2003-04 was justified? The assessee argued that the AO's calculation of the negative cash balance was incorrect. The revenue contended that the assessee failed to provide any evidential material to support their grounds of appeal and that the negative cash balance was a consequence of upheld additions in the preceding year.

Which sections of the Income-tax Act were involved?

Section 132,Section 143(3),Section 153A,Section 250,Section 254,Section 44AE

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, PUNE “A” BENCH, PUNE

Before: SHRI S S VISWANETHRA RAVI & SHRI G. D. PADMAHSHALI

For Appellant: Shri M. K. Kulkarni & Smt. J. R. Chandekar
For Respondent: Shri B. Koteswara Rao
Pronounced: 06/07/2023

आदेश / ORDER PER BENCH ; These captioned appeals of different assessee’s are assailed against the separate orders of Commissioner of Income Tax (Appeals)-12, Pune [for short ‘CIT(A)’] dt. 24/03/2022 passed u/s 250 of the Income-tax Act,1961 [for short ‘the Act’], which ascended out of assessment order dt. 30/03/2015 passed u/s 254 r.w.s. 153(A) of the Act by the Asstt Commissioner of Income Tax, Central Circle–2, Nashik[for short ‘AO’] for the assessment year [for short ‘AY’] 2002-03 & 2003-04.

2.

Since these appeals are inter connected and based on common facts involving common issues, hence for the purpose of brevity and convenience these are heard together for a common & consolidated order.

3.

Briefly stated common facts of these appeals are; 3.1 A search and seizure action u/s 132 of the Act was conducted on Bindra Group on 15/03/2007 including the present appellants who were engaged in playing trucks for transportation of material, and resultant income therefrom were offered to tax u/s 44AE of the Act.

ITAT-Pune Page 2 of 12 3.2 In the absence of books of accounts, cash flow- statements submitted by these appellants were turned off and the undisclosed investment into asset found during the course of search was brought to tax by the Ld. AO vide dt. 24/12/2008 u/s 153A r.w.s. 143(3) of the Act.

3.3 On being unsuccessful before first appellate authority, the aforestated matters on earlier occasion travelled to this Tribunal in ITA 873/PN/2013, 869/PN/2013 & 953/PN/2013. In so far as rejection of cash-flow statement furnished by the appellant is concerned, in first round of appeal the Co-ordinate bench vide its order dt. 29/11/2013 in ITA 873/PN/2013, 869/PN/2013 & 953/PN/2013 followed its decision rendered earlier dt. 29/08/2013 in ITA No. 872/PN/2013 and thereby directed the Ld. AO to assess the corresponding income representing investment into undisclosed assets after allowing these appellants a 40% credit claimed in the cash-flow statement so submitted, para 18 as under; “18. At the outset. . . . . “15 In the final analysis, . . . . . Therefore, we deem it fit and proper to direct the Assessing Officer to allow credit to the extent of 40% of the claim made by the assessee in the cash- flow statement for each year. . . .” (Emphasis supplied)

ITAT-Pune Page 3 of 12

4.

In the light of aforestated common facts, let us deal with the ITA No. 42/PUN/2022 & ITA No. 41/PUN/2022 together, considering ITA No. 42/PUN/2022 as lead case, consequently the adjudication laid hereinafter shall mutatis-mutandis apply to ITA No. 41/PUN/2022: 4.1 In this case original assessment was completed u/s 143(3) r.w.s. 153A of the Act vide order dt. 24/12/2008 determining total income at ₹9,03,820/- as against the return of income filed declaring total income of ₹6,11,820/-.

4.2 The foregoing additions were assailed before first appellate authority, wherein the Ld. CIT(A) enhanced the addition by further ₹39,96,000/- towards appellant’s 50% share in the undisclosed investment in the properties found from the entries noted in the diary which was seized in the search action.

4.3 When the matter travelled in an appeal to the Tribunal, the Co-ordinate bench vide its order dt. 29/11/2013 set aside the matter to the AO for reworking cash flow and re-frame the assessment accordingly.

ITAT-Pune Page 4 of 12 4.4 Pursuant to direction of Tribunal, the Ld. AO reframed the assessment a fresh u/s 143(3) r.w.s. 153A r.w.s. 254 of the Act in the light of revised cash flow statement placed on record and has reconfirmed the addition as was there before the remand of file by the Tribunal.

4.5 This reframed assessment was again challenged by the appellant before Ld. CIT(A) in second round of appeal by adducing additional evidential material against such additions retained by the Ld. AO. The Ld. CIT(A) appreciating the evidences has granted a part relief to the extent of ₹12,75,000/- noting his clear findings as dilated at para 4.17 placed at page 18 of the impugned order; „4.17 Now, the only issue that remains is that of consideration. As per the notings, the shops were sold for 1o lakhs and 16 lakhs while as per the Sathekhats prduced by Shri Rajiv Karambelkar, 2 shops were sold for 5 lakhs a. nd 7 lakhs at Manas Arcade, which were received in cash. Also, the notings in respect of residential properties of Panchvati Manas/ Manas Arcade, the noting mention amount of "5" and "20", while as per Sathkhats

ITAT-Pune Page 5 of 12 produced by Shri Rajiv Karambelkar and noted in the earlier order of CIT(A), three flats at Manas Arcade were sold for 12 lakhs i.e. Rs. 4 lakhs each. However, neither any details of those payments were given nor any attempt was made by the appellant to reconcile the same and whether the amounts mentioned in Sathekhats were from accounted sources or whether this amount was over and above the amounts mentioned in the notings. In this regard, as noted by the CIT(A) in the first round of litigation and also mentioned above, it is to be taken into consideration that there were similar type of noting made by the appellant at page 36 of annexure A-48 in respect of purchase of shops in Walzade Arcade, wherein the appellant and his brother themselves have accepted undisclosed investments in the above properties during statements recorded during search and post search investigations on the basis of these noting. Also, the appellant is shown to have purchased shop No. 6A & 7A Rajan Complex at L 3,50,000/-, against stamp duty valuation of L 28,42,000/-. Therefore, the transactions were recorded at much lower value in the documents than the actual value of transactions.

ITAT-Pune Page 6 of 12 Considering all these facts, it is clear that the amounts mentioned in the impugned notings are the investments made by the appellant in these properties and these are to be considered accordingly. The total investment noted in the impugned document against shops at Manas Arcade was of Rs. 10+16=26 lakhs while the investment in Panchvati Manas/ Manas Arcade was Rs. "5" +"20" = 25 lakhs. The same was not accounted for by the appellant and his brother and therefore, the total undisclosed investment made as per these notings was Rs. 51 lakhs for them. The appellant's share in this undisclosed investment is Rs. 25.5 lakhs i.e. ½ of Rs. 51 lakhs. Thus, addition to the extent of Rs. 25.5 lakhs out of Rs. 38.25 lakhs is hereby upheld. The AO is directed to delete the balance addition of Rs. 12.75 lakhs.

4.18 Thus, addition to the extent of Rs.27,21,000/- (25,50,000 + 1,71,000) out of total addition of Rs. 39,96,000/- is upheld and the appellant gets relief of Rs.12,75,000/-. These grounds raised by the appellant are partly allowed.‟ (Emphasis supplied)

ITAT-Pune Page 7 of 12 4.6 In the extant appeal, the appellant raised as much as five grounds. Ground no. 5 being general requires no adjudication, whereas ground no. 4 being consequential shall follow the adjudication on sole & substantive ground of addition raised in ground no. 1 to 3.

4.7 The Ld. AR has reiterated all contention put forth before first appellate authority without bringing on record any additional material in support of substantive ground raised against sustenance of addition of ₹25,50,000/- being 50% share of the appellant in the undisclosed investment found made from the entries of diary, which was seized during the course of search action. Admittedly the appellant did maintain no books of accounts and the value of undisclosed investment surfaced upon search action from the entries of seized diary remained uncontroverted during first as well second round of appellate proceedings. Insofar as the present proceedings are concerned, it rather emerges that appellant neither could adduce any cogent evidence in disproving the correctness of findings of Ld. CIT(A) nor

ITAT-Pune Page 8 of 12 could bring out variation in the factual position, faced with the situation, we do not see any reasons to interfere with impugned in the light of Hon’ble Supreme Court ratio laid in in ‘Hindustan Ferodo Ltd. Vs CCE’, reported in 1997 (89) ELT 16(SC), that while discharging the onus for proving any claim, the claimant fails to adduce or led any evidence, the onus stands not discharged, thus the claim fails. This ratio was also reiterated in ‘Parimisetti Seetharamamma Vs CIT’ reported in 57 ITR 532 holding that, the claimant must discharge the burden of proof and its failure shall not reverse the burden on other party to prove the negative. Thus rejecting all the arguments raised by the appellant in support of ground no. 1 to 3, we dismiss the ITA No. 42/PUN/2022 and the ITA No. 41/PUN/2022 also stands dismissed accordingly.

5.

Now will deal with ITA No. 43/PUN/2022 5.1 In this case original assessment was completed u/s 143(3) r.w.s. 153A of the Act vide order dt. 24/12/2008 with an addition of ₹75,000/- (as per original assessment) and addition towards unexplained investment for ₹16,75,000/- and ₹13,00,000/-.

ITAT-Pune Page 9 of 12 5.2 The foregoing additions were assailed before first appellate authority, wherein the Ld. CIT(A) granted a part relief. When the matter travelled in an appeal to the Tribunal, the Co-ordinate bench vide its order dt. 29/11/2013 set aside the matter to the AO for reworking cash flow and reframed the assessment accordingly. 5.3 Pursuant to direction of Tribunal, the Ld. AO reframed the assessment a fresh u/s 143(3) r.w.s. 153A r.w.s. 254 of the Act in the light of revised cash flow statement worked out a negative closing balance of ₹18,69,194/- considering the opening balance as NIL.

5.4 This reframed assessment was again challenged by the appellant assessee before Ld. CIT(A) without adducing any evidential material in support of grounds assailed, for the reason the Ld. FAA vide para 11 dismissed to entertain the appeal with a clear findings that; „11. Vide these grounds of appeal, the appellant challenged the order passed by the AO following the direction of Hon‟ble Pune Tribunal. This office issued notices u/s 250 on 10.04.2018, 13.08.2018,

ITAT-Pune Page 10 of 12 10.09.2018, 01.07.2019, 16.07.2020, 05.03.2021, 16.04.2021, 08.06.2021, 29.06.2021, 08.03.2022 for filing submission against the ground raised in spite of providing multiple opportunities, the appellant failed to make any submission in support of the grounds raised. Therefore, the appellant failed to show how the cash flow arrived by the AO was incorrect. Further, in A.Y. 2002-03 addition to the extent of Rs. 27,21,000/- and Rs. 2,50,000/- was upheld, therefore the appellant would have no cash balance left in A.Y. 2002-03 to carry over to A.Y. 2003-04. In view of this, I find no infirmity in the order of the AO. The addition made by the AO of Rs.18,69,194/- on account of negative cash balance is upheld. Grounds raised by the appellant are thus dismissed.‟

5.5 During the course of physical hearing also the appellant could hardly be any different as he has failed to adduce any evidence in support grounds raised in the extant appeal. It rather emerges that appellant neither could adduce any evidence before the Ld. AO nor before first appellate authority. We also note that in-spite as much as of ten notices issued by first appellate authority

ITAT-Pune Page 11 of 12 in second round of appeal before him, the appellant opted out deliberately and thus failed to respond so has to prove his claim on merits. In the present proceedings as well the appellant could hardly be different. Faced with the situation, in the light of Hon’ble Supreme Court ratio laid in in ‘Hindustan Ferodo Ltd. Vs CCE’(supra) and Parimisetti Seetharamamma Vs CIT,(supra) we reject all assessee’s argument in challenging the impugned addition, resultantly sole and substantive ground no. 1 stands dismissed, therefore ground no. 2 being consequential one shall follow adjudication accordingly.

6.

In result, all three appeals of different assessee are DISMISSED. In terms of rule 34 of ITAT Rules, the order pronounced in the open court on this Thursday 06th day of July, 2023.

-S/d- -S/d- S S VISWANETHTRA RAVI G. D. PADMAHSHALI JUDICIAL MEMBER ACCOUNTANT MEMBER पुणे / PUNE ; दिन ांक / Dated : 06th day of July, 2023. आदेश की प्रधिधलधप अग्रेधिि / Copy of the Order forwarded to : 1.The Appellant. 2. The Respondent. 3. The Pr.CIT (Central),Nashik (MH-India) 6. ग र्डफ़ इल / Guard File. 5. DR, ITAT, Pune Bench ‘A’, Pune 4. The CIT(A) -12, Pune(MH-India) Ashwini (1:2) By Order वरिष्ठ दनजी सदिव / Sr. Private Secretary आयकि अपीलीय न्य य दिकिण, पुणे / ITAT, Pune.

ITAT-Pune Page 12 of 12

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