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Income Tax Appellate Tribunal, MUMBAI BENCH “G”, MUMBAI
Before: SHRI KULDIP SINGH & SHRI GAGAN GOYAL
ORDER PER GAGAN GOYAL, A.M: These two appeals by assessee are directed against the order passed by the Commissioner of Income Tax (Appeals)-11, Pune [for short ‘CIT(A)’], vide orders dated 27.10.2016 & 15.02.2017 for Assessment Years (AY) 2009-10 & 2010-11 respectively. We shall first take up appeal of assessee for A.Y. 2009-10 as lead case. The assessee has raised the following grounds of appeal:
2999/Mum/2017 Shri Ghanshyam A Dubey “1. The Learned Commissioner of Income Tax (Appeals) 11 on facts and in the circumstances of the case and in law erred in confirming Rs.9,00,000/- as normal income instead of agriculture income in which the assessee had earned during the assessment year.
2. The Learned Commissioner of Income Tax (Appeals) 11 on facts and in the circumstances of the case and in law erred in confirming Rs.81,060/- on account of deemed rent for three flats and three shops.
3. The Learned Commissioner of Income Tax (Appeals) 11 on facts and in the circumstances of the case and in law erred in confirming Rs. 10,00,000/- on account of unexplained cash expenses as per the noting page no. 100 & 101 of bundle no.1 of the seized documents.
The Learned Commissioner of Income Tax (Appeals) 11 on facts and in the circumstances of the case and in law erred in confirming Rs. 10,00,000/- on account of declaration of assessee on account of advance cash received for sale of property at Bhiwandi.”
In the assessee has raised the following grounds of appeal: “1. The Learned Commissioner of Income Tax (Appeals) 11 on facts and in the circumstances of the case and in law erred in adding Rs. 1,73,880/- on account of deemed rent for three flats and one shop.
2. The Learned Commissioner of Income Tax (Appeals) 11 on facts and in the circumstances of the case and in law erred in adding Rs. 4,25,000/- onaccount of unexplained cash deposits as per the noting page no. 73, 74, 75,76 of bundle no. 1 of the seized documents.
3. The Learned Commissioner of Income Tax (Appeals) 11 on facts and in the circumstances of the case and in law erred in adding Rs. 8,50,000/- on account of unexplained cash expenses as per the noting page no. 84 of bundle 1 of seized documents.”
Brief facts of the case are that assessee’s premises was searched u/s 132 in consequence to search at SMC group on 23-05-2012. The assessee Shri Ghanshyam Amarnath Dubey is one of the director and promoter of M/s Rohit Infra project Pvt Ltd (RIPL) which has a JV with SMC Group for executing contracts. The case of the assessee was centralised and a notice u/s 153(A) of the 2999/Mum/2017 Shri Ghanshyam A Dubey Act was issued on 31-07-2013. In response to the notice u/s 153A assessee filed e- return of income on 10-11-2014. During the assessment proceedings addition of Rs 3,57,320/- was made on account of salary, Rs 9,00,000/- on account of agriculture income treated as non-agriculture income, Rs 81060/- on account of deemed rental, Rs 10,79,591/- on account of unexplained investment in flat at Thane u/s 69B, addition on account of unexplained expenditure based on seized papers amounting to Rs 52,00000/-(Rs 42,00,000+Rs1,00,0000) u/s 69C and addition on account of undisclosed income of Rs 10,00,000/-.
4. Against this addition assessee preferred an appeal before the Ld.CIT (A). In his order assessee got part relief from the office of Ld.CIT (A). For other issues on which assessee have not succeeded before the Ld.CIT (A) preferred an appeal before us. 5. Both these appeals were filed on 26.04.2017. Thereafter many opportunities by way of issuance of notices were given and 23.02.2022, 25.04.2022 assessee was duly represented through Sh. Dipen Tanna and Sh. Viraj Mehta respectively and they got adjournment from subsequent dates of hearing none appeared on behalf of assessee nor made any request for adjournment. It appears that assessee is not interested in arguing these appeals. Since these appeals are oldest one, the bench has decided to dispose of the same on the basis of material available on record with the assistance of Ld. DR for the Revenue. 6. We have gone through the order of AO, order of the Ld.CIT (A) and the submissions of the assessee. Assessee raised total 4 effective grounds to be adjudicated we are proceeding on the matter ground wise.
2999/Mum/2017 Shri Ghanshyam A Dubey 7. Ground No.1 pertains to income shown by the assessee as agricultural income but AO treated the same as non agricultural income and Ld.CIT (A) also sustained the view of the AO. On this ground we observed that assessee had furnished papers which are copies of the agricultural lands purchased by the assessee and assessee wife vide document dated 03-03-2008 in the name of Shrimati Kusum Dubey for consideration of Rs 4.4 lakhs, document dated 15-12- 2008 in the name of Shri Ghanshyam Amarnath Dubey for consideration of Rs 5 lakhs and document dated 27-06-2009 in the name of Shrimati Kusum Dubey for consideration of Rs 1.75 lakhs. We observed that total investment by assessee and his wife in total amounting to Rs 11.15 lakhs.
Out of the facts following trajectory can be visualised and observed as under: a) How assessee can consider agriculture income arisen on account of the land in the name of his wife ; b) Agriculture is not that lucrative vocation for process where buy an investment of Rs 11.15 lakhs one can earn a handsome return of Rs 9 lakhs; c) It is further observed that assessee never disclosed any agriculture income in any earlier assessment years and in succeeding years; d) To establish income under the head of agriculture,assessee is burdened with an onus to produce supporting documents like sale receipt of agricultural produce at local APMC or like organisations, entry in the revenue record of the state government, bills of purchase of necessary inputs required to cultivate the land and evidence relating to involvement of labour etc. none of these essential documents to support the claim of 2999/Mum/2017 Shri Ghanshyam A Dubey the assessee were ever produced before any of the authorities below and even before us.
In terms of the above facts emerged out of records before us, we sustain the decision of the Ld.CIT (A) and resultantly Ground No.1 raised by the assessee is dismissed 10. Ground No.2 pertains to deemed rent of Rs 81,060/- on account of three flats and one half share of shop at Meera road, of this issue we have gone through t9he order of Ld.CIT(A) where assessee himself wished not to press the same hence dismissed. As the issue not pressed before the first appellant authority but raised before us, the same can’t be adjudicated by us in absence of any findings by the Ld.CIT (A) in the result this ground of assessee is also dismissed on technical terms.
Ground No.3 pertains to addition on account of unexplained cash expenses u/s 69C. This addition is based on the entries recorded on page no. 100 and 101 of bundle no.1 of the seized documents found at the time of search from assessee residence. As per assessee a letter of credit (L.C) was taken out by RIPL (assessee is a director and promoter) in favour of M/s Parth Traders. It is observed by referring the workings /noting’s on page no. 101 that this L.C is settled partly through bills of supplies and partly in cash. As per section 132 onus to prove contents of the document (found at the time of search at the premises of the assessee), otherwise is on the assessee. In our observation based on the records before us assessee failed to produce any evidence that this cash paid to settle the L.C was recorded in the regular books of the assessee or RIPL. As per the provisions of section 132(4A) it is to be presumed that the documents and 2999/Mum/2017 Shri Ghanshyam A Dubey contents therein found at the time of search from the premises of the assessee belongs to the assessee and true in nature. Above noting’s can’t be treated as dumb until unless assessee proofs otherwise. 12. assessee is the best person to explain the nature of documents found and contents therein otherwise as per the provisions of sec 132(4A) an adverse inference has to be drawn against the assessee. in view of above it can be summed up that L.C in question was taken out on 15-01-2009 for Rs 25 lakhs and to settle the same use of cash amounting to Rs 10,00,000/- were made. Assessee is not able to explain the source of this cash of Rs 10,00,000/- hence the same has to be added in the income of the assessee u/s 69C resultantly we sustain the order of Ld.CIT(A) and Ground No.3 raised by the assessee is dismissed.
Ground No. 4 pertains to declaration of assessee on account of advanced cash received for Bhiwandi property amounting to Rs. 10 Lacs. This issue crop up because of the statement given u/s. 132(4) on 16.07.2002 by the business partner of assessee Sh. B.T. Mishra on account of sale of cash received against sale of Bhiwandi propertyat the time of closure of search. He further accepted and declared undisclosed income of Rs. 67 Lacs in his own hands and also Rs. 10 Lacs in the hands of assessee.
Not only he given a statement, but also provided details of utilisation of money, i.e. towards acquisition of further shares of M/s. RIPL. As per legal corollary statement given u/s. 132(4) is binding in nature. It is pertinent to mention here that statement was given by none else but the business partner of the assessee and he never retracted from the same and whatever the disclosure he made in his own hands he honoured the same in his personal case 2999/Mum/2017 Shri Ghanshyam A Dubey 15. Moreover, assessee never came up with any satisfactory explanation to contradict the statement given by the assessee partner. Whatever the money assessee received for sale of Bhiwandi property by cheque only for that assessee is able to produce ledger account but that will not explain the statement given by assessee partner about declaring additional income of Rs 10, 00,000/- in cash against sale of property. We observed that although no cash in physical terms found during the search but the evidence in the form of partners’ statements is crucial here. As he honoured his statement w.r.t offering tax on Rs 67 lakhs, non- retraction of the statement and assessee also never challenged the statement of his business partner.
In view of above factual matrix we found that assessee actually received the cash which he never disclosed under any head in his ROI and was not able to explain the same, resultantly we sustain the order of Ld.CIT (A) and Ground No.4 raised by the assessee is dismissed.
In the result, appeal filed by the assessee is dismissed. (A.Y. 2010-11)
In this appeal Ground No.1 pertains to addition on account of deemed rent for 3 flats and one-half shop amounting to Rs 1,73,880/-. In this regard we have considered the order of the Ld.CIT (A) wherein assessee himself do not press the ground hence the same was dismissed and addition was confirmed. As the ground raised by the assessee not pressed before the Ld.CIT (A) and now the same has been raised before us, which is not possible in technical terms. In these terms this ground of appeal raised by the assessee is found to be infructuous and rejected.
2999/Mum/2017 Shri Ghanshyam A Dubey
Ground No.2 raised by the assessee pertains to addition on account of cash deposits amounting to Rs 4.25 lakhs as per the noting’s on page no.73 to 76 of bundle no. 1 of the seized documents. We have gone through the order of AO, order of Ld.CIT (A) and submissions of the assessee. we observe that the assessee deposited Rs 1.5 lakhs through cheque on 14-10-2002 in the account of Sushil Kumar Mishra, deposited Rs 50,000/- through cheque on 10-08-2009 in the account of Ram Samujh Singh, deposited Rs 1lakhs in cash on20-07-2009 in the account of Shailesh Dubey,deposited Rs 25,000/- in cash on15-05-2009 in the account of R.C. Patel and Company and deposited Rs 3 lakhs in cash on 12-05- 2009 in the account of Siddharth Enterprise .Ld.CIT(A) allowed deposits made through cheque and sustain addition of Rs 4.25 lakhs as the same has been deposited in cash.
Assessee furnished his personal and RIPL’s cash book also to justify the cash deposited in various people’s account. We have considered the same but found the same to be a self-convincing document only. No proper explanation of source of inflows and nature of outflows furnished by the assessee. No supporting document or any Audit Report is there to confirm the books of assessee. In these circumstances, we are not inclined to interfere in the order of Ld. CIT (A), hence sustained and ground no. 2 raised by the assessee is dismissed.
Ground No. 3 pertains to addition of Rs. 8.5 lakhs on account of unexplained cash expenses as per the noting page no. 84 of bundle 1 of seized documents.
2999/Mum/2017 Shri Ghanshyam A Dubey 22. In this regard, we have gone through the order of Ld. CIT(A), order of AO and submissions of assessee, we found findings of Ld. CIT(A) relevant on this issue and are being reproduced here as under:
15. I have considered the facts regarding this addition. The relevant seized paper contains certain notings. On the top is written the date- 14/04/2009. Thus it can be assumed that the notings pertain to this asst year. The paper contains a list of different officials of MMRDA because on the top of the list is written MMRDA. There are 10 names in the list such as Tawade Sahab. Bangere Sahab, Dhabalkar Sahab and so on. Against each name certain amount is mentioned e g against Shri Bangere a sum of Rs. 2,00,000/- is mentioned. Total expenditure is mentioned as 8.50.000/-.The appellant has not denied these payments. He claims that the payments were made by the company Rohit Infra. But the appellant has not produced any ledger account etc to substantiate this claim. The payments were made in cash and appear to be in the nature of illegal payments to individual officers. It is highly unlikely that the company would have kept vouchers and accounted for such payments in its books of accounts. No such documents have been furnished. As the payments have been made in cash and are unaccounted payments, the same need to be added as unexplained expenditure u/s 69C of the Act. As the impugned paper was seized from the appellant's residence, it can reasonably be assumed that the said payments, were made by the appellant. The addition made by the AO is therefore perfectly justified and confirmed as such. The relevant ground of appeal is dismissed.
23. None appeared on behalf of assessee to counter this finding of Ld. CIT(A), moreover, the submissions of assessee before Ld. CIT(A) are also found to be vague. Before us assessee do not even bothered to represent this issue through verbal or legal submissions. In the light of above, we are of the view that assessee has nothing to say over this issue, hence, Ground No.3 raised by assessee is also dismissed.
In the result, both the appeals filed by assessee are dismissed.
2999/Mum/2017 Shri Ghanshyam A Dubey Order pronounced in the open court on 16th day of December, 2022.