Shri Pyare Lal Gabra Proprietor M/S Gabra Marketing vs. Income Tax Officer

1 ITA No. 9/2014 (Shri Pyare Lal Babra Vs. Income Tax Officer) 13.10.2014 Shri Pawan Dwivedi, Advocate for the appellant. Shri DPS Bhadoria, Advocate for the respondent. Being aggrieved by the order dated 19/10/2012, passed by Income Tax Appellate Tribunal, Agra in ITA No. 239/AGRA/2012 for assessment year 2003-04, this appeal under Section 260-A of Income Tax Act is filed at the instance of assessee against the addition of Rs. 1 lac found to have been an undisclosed investment in the form of fixed deposits in UCO Bank under Section 69 of the Income Tax Act (for short “Act”). The Assessing Officer, in the assessment order dated 31/12/2009 framed under Section 143(3)/147 of the Act consequent upon re-assessment, preceeded by notice under Section 148 of Act, has found that investment of Rs. 1 lac in the form of FDRs together with Rs. 18,000/- in the matter of purchase of secondhand loading auto has remained unexplained on the premise that there is no evidence on records that the assessee has made the aforesaid investment out of his income. Neither any accounts were maintained nor any books of accounts were produced before the Assessing Officer to indicate that aforesaid investments were out of his income. Before CIT (Appeals), Gwalior, appellant submitted that he 2 ITA No. 9/2014 was in business of wholesale traders in general items since 1997 and prior to that he carried on the business of clothe merchant and served on the salary basis for some of the year, his total earning period upto financial year 2002-2003 was about 20 years as he claimed to have started earning at the age of 20 years, but he had not submitted his return of income because according to him, he was having income less than the exemption limit under the Act. Therefore, according to appellant his total income comes to Rs. 6,32,140/- and after deducting 50% towards personal expenses, net income comes to Rs. 3,16,070/-, therefore, net cash available for investment to the tune Rs. 1,18,000/- was out of aforesaid surplus income. This submission has been considered by the CIT in para 5.2 of the order. It has been found that undisputedly, books of account were not maintained in regular course of business. No books of accounts, no cash flow statement, no capital account etc. were submitted in support of alleged cash availability of Rs. 3,16,070/-. Therefore, CIT (Appeals) has rejected the contention that appellant had surplus income of Rs. 3,16,070/- for making investment of Rs. 1,00,000/- in FDR form. As per the return of the assessment year 2003-2004 the declared income of the appellant is Rs. 1,05,500/- only. No interest income has been declared by the appellant for the year or during the assessment year 2004-2005. It is observed that after meeting the household expenses, etc, the 3 ITA No. 9/2014 appellant's explanation is acceptable to the extent of purchase of secondhand loading auto to the tune of Rs. 18,000/- out of net income/surplus income. But under such circumstances, CIT (Appeals) held that FDR of Rs. 1,00,000/- remained unexplained as there was no funds in the hands of assessee as per return of income. Accordingly no fault has been found with the order of Assessment Officer making addition of Rs. 1 lac in the hands of Assessee. Tribunal has confirmed the order passed by the CIT (Appeals) as indicated in para 7 of the order. Having gone through the order impugned, this Court is of the view that CIT (Appeals) as well as ITAT, Agra has rightly held FDR to the tune of Rs. 1 lac remained unexplained in terms of Section 69 of IT Act. Before adverting to the order impugned, it is considered apposite to quote Section 69 of the Income Tax Act regarding unexplained investments:- “69. Where in the financial year immediately preceding the assessment year the assessee has made investments which are not recorded in the books of account, if any, maintained by him for any source of income, and the assessee offers no explanation about the nature and source of the investments of income, and the assessee offers no explanation about the nature and source of the investment or the explanation offered by him is not, in the opinion of the (Assessing) Officer, satisfactory, the value of the 4 ITA No. 9/2014 investments may be deemed to be the income of the assessee of such financial year.” There is no dispute that no books of accounts were maintained by the assessee in regular course. No books of accounts, no cash flow statement, no capital account, return of income etc. were submitted in support of alleged claim to have the capital/accumulation to the tune of Rs. 3,16,070/-. As such, the CIT (Appeals) was fully justified having rejected the contention of appellant in this regard for want of explanation as regards source of income. The opinion formed by CIT (Appeals) is found to be recorded satisfactorily within its appellate jurisdiction in the context of Section 69 of the Act. The Tribunal has not committed any error of law while confirming the order passed by CIT (Appeals). No question of law much less substantial question of law is arises in this appeal to invoke jurisdiction under Section 260-A of the Income Tax Act, appeal sand merits, is therefore, dismissed. (S.K.Gangele) (Rohit Arya) Judge Judge jps/-