Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, INDORE BENCH, INDORE
Before: SHRI KUL BHARAT & SHRI MANISH BORAD
आदेश / O R D E R
PER KUL BHARAT, J.M: This appeal by the Assessee is directed against the order of Ld. Commissioner of Income Tax(Appeals)-I, Indore, (in short ‘CIT(A)’), dated 30.09.2014 pertaining to A.Y. 2011-12. The assessee has raised the following grounds of appeal: 1. On the facts and circumstances of the case and law, Learned CIT(A) erred in upholding issuance of notice u/s 148 of the
Kailash Chandra Garg
Income tax by Assessing Officer for reopening of assessment proceedings of appellant and consequent assessment order passed by Assessing Officer. 2. The learned Respondent and CIT(A) failed to appreciate provision of Section 147 read with section 282 of the Income Tax Act, 1961for initiation of reassessment proceeding and thereby made an error in passing order without referring necessary proof, evidences and documents by same to appellant; Relief Claimed: Notice u/s 148 dated 28.03.2012 issued by Assessing Officer deserves to be annulled and assessment framed consequent there to deserves to be declared ultra virus and accordingly by quashed. Also it may kindly be declared that no further incidental proceedings initiated thereon be continued and accordingly said proceedings have to be dropped then order passed there on are to be declare as ultra virus and invalid.
At the time of hearing Ld. counsel for the assessee submitted that he does not wish to press Ground No.1 & 2. He further submitted that ground no.7 is consequential and grounds No.8 & 9 are general in nature. He, therefore, urged that only effective ground is ground No.3, and Ground No.4, 5, & 6 are related to the same ground and hence we adjudicate the ground no.3 that reads as under: “On the fact and circumstances of the case and in law, the learned CIT(A) erred in confirming addition of Rs.2,26,30,000/- contrary to the statutory records and public documents and filing with ROC of Ambika Solvex Ltd. and without any positive proof of appellant actually having invested such amount as share application.”
Kailash Chandra Garg
Facts giving rise to the filing of present appeal are that the case of the assessee was reopened for assessment and assessment u/s 143(3) r.w. section 147 of the Income Tax Act 1961(hereinafter called as ‘the Act’) was framed vide order dated 28.03.2013. While framing the assessment, the Assessing Officer (in short ‘AO’) computed total income at Rs.2,29,07,220/- against the return of income at Rs.2,77,219/- thus, made addition of Rs.2,26,30,000/- u/s 69 in respect of the investment made in share capital of M/s. Ambika Solvex Ltd. Aggrieved by this the assessee filed an appeal before the Ld. CIT(A) who after considering the submissions in para 4.3 of the order confirmed the addition. 4. Now the assessee is in further appeal. 5. The Ld. counsel for the assessee contended that the authorities below failed to appreciate the facts that the assessee had not made investment of Rs.3,34,00,000/- as same appeared in the notes of account wrongly. He contended that this issue can be verified at the end of the AO and issue may be restored to the AO for this purpose of verification of the claim of the assessee. 6. Ld. DR supported the order of the authorities below and opposed the submissions of Ld. counsel for the assessee. 7. We have heard the rival contentions and perused material on record. The Ld. CIT(A) has decided the issue in para 4.3 as under: Ground No. 3.4 & 5:- Though these ground of appeal the appellant has challenged the addition of Rs.2,26,30,000/- on account of unexplained investment u/s 69 of the I.T Act. The appellant has filed the original return of income declaring total
Kailash Chandra Garg
income of Rs. 2,77,219/- on 31-10-2005.As per the balance sheet filed by the appellant along with the return of Income the appellant had shown along with the return of income the appellant had shown the investment of Rs. 1,07,70,000/- in M/s Ambika Solvex Ltd. share application money of Rs. 3,34,00,000/- has been shown as received from Shri Kailash Chandra Grag Thus, there was a difference of Rs.2,26,30,000/- as Shown by the appellant and by Ambika Solvex Ltd. pertaining to 2004-05 was signed by the appellant in the capacity of the director of the company. Since the appellant is the signatory of the return of income along with other enclosures, it was within the knowledge of the appellant regarding this difference in two sets of the accounts. Therefore the appellant’s contention that it is a typographical error is not acceptable. it is also to be mentioned that there was a difference on the same account in the A.y.2004-05 also has been signed by the appellant. Since by the appellant. Since the same person i.e. the appellant is signatory at both the places, therefore, it cannot be considered as merely a typographical error. The company’s audit report specifically mentions the share application money deposited by the appellant at Rs. 3, 34,00,000/-. During the course of appellate proceedings the appellant has produced has the return of income filed by the company. In the notes of account the same figure is appearing as filed with the Assessing Officer during the course of assessment proceedings. During the course of assessment proceedings as well as appellate proceedings the appellant failed to reconcile the difference in respect of the investment shown by the appellant in his return of income and as appearing in the audit report submitted by M/s Ambika Solvex Ltd. The appellant failed to produce the books of account during the course of assessment proceedings. By not producing books of account the appellant failed to discharge the onus cast upon him. The appellant has made the investment of Rs.3,34,00,000/- in M/s Ambika solvex Ltd. which is appearing in the books of the said company. Since the appellant is signing the return of income of M/s. Ambika solvex Ltd. then he cannot deny now that the notes to the accounts were not correct and was as result of clerical error. It 4
Kailash Chandra Garg
is to be mentioned that there cannot be an incorrect entry in the notes on accounts of the company which got its accounts audited under statutory provision of the law. The appellant has made the investment in the said company, therefore, the appellant’s name is appearing in the notes of the accounts. The appellant failed to give the source of investment by producing bank statement from where the investment has been made. The appellant has been given sufficient opportunity during the course of assessment proceedings as well as appellate proceeding, but failed to clarify the figures appearing in the notes to the account for this assessment year. Section 69 provides that any investment found in the books relating to which appellant offers no explanation about the nature and source thereof or such explanation is unsatisfactory, such investments could be charged to tax as income of the appellant. The principle embodied in section 69 is only a statutory recognition of what was always understood to be the law based upon the rule that burden of proof is on the taxpayer to prove the genuineness of the investment in his books, since the relevant facts are exclusively within his knowledge. The expression “nature and source has to be understood together as a requirement of identification of the source and the nature of the source, so that the genuineness or otherwise could be inferred. It is settled law that while considering the question whether the alleged investment made by the appellant was a genuine transaction, the initial onus is always upon the appellant and if no explanation is given or the explanation given by the appellant is not satisfactory, the Assessing Officer can disbelieve the alleged transaction of such investment. But the law is equally settled that if the initial burden is discharged by the appellant by producing sufficient materials in support of the investment transaction, the onus shifts upon the Assessing Officer and after verification, he can call for further explanation from the appellant and in the process, the onus may again shift from the Assessing Officer to the appellant. Therefore, the appellant failed to discharge the burden of proof by not establishing the genuineness of investment. Therefore,
Kailash Chandra Garg
the addition made by the AO amounting to Rs.2,26,30,000/- is confirmed. Therefore, appeal on these grounds are dismissed.”
The contentions of the assessee is that the assessee had not made an investment of Rs.2,26,30,000/-. In facts, the assessee had made investment of Rs.3,24,000/- through two cheques of Rs. 1,62,000/- each. In our considered view, the contentions of the assessee ought to have been verified and rebutted by the authorities below by bringing any contrary material on record. Therefore, in the interest of justice and fair play the order of the authorities below is set aside on this issue and restore to the file of the AO for decision afresh. The AO is directed to verify the claim of the assessee by making inquiry. The assessee is directed to furnish the details as called upon by the assessee. Ground No. 2 to 6 are allowed for statistical purposes. 9. In the result, the appeal of the Assessee is partly allowed. Order was pronounced in the open court on 16 .01.2018.
Sd/- Sd/- (MANISH BORAD) (KUL BHARAT) ACCOUNTANT MEMBER JUDICIALMEMBER Indore; �दनांक Dated : 16/ 01/2018 ctàxÄ? P.S/.�न.स.
Copy to: Assessee/AO/Pr. CIT/ CIT (A)/ITAT (DR)/Guard file. By order Private Secretary/DDO, Indore