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Income Tax Appellate Tribunal, “ SMC ” BENCH, AHMEDABAD
Before: SHRI PRAMOD KUMAR & SHRI MAHAVIR PRASAD
आदेश / O R D E R
PER MAHAVIR PRASAD, JUDICIAL MEMBER : This appeal of the assessee relating to assessment year 2010-11 is directed against the order of Learned Commissioner of Income Tax (Appeals)-Gandhinagar, Ahmedabad dated 30.09.2015 which is arising out of order u/s.143(3) of the Income Tax Act, 1961, vide appeal no.CIT(A)/GNR/14/2014-15.
Assessee has taken following Grounds of appeal: 1. On the facts and in circumstances of the case as well as law on the subject, the learned Commissioner of Income-tax (Appeals)
ITA No.3226/Ahd/2015 Shri Kanjibhai Vashibhai Rabari vs. JCIT Asst.Year –2011-12 - 2 - has erred in confirming addition of Rs.7,00,000/- as un explained credit in capital account. 2. On the facts and in circumstances of the case as well as law on the subject, the learned Commissioner of Income-tax (Appeals) has erred in confirming addition of Rs.6,00,000/- as un explained credit in the name of M/s Shree Gurudev Enterprise. 3. On the facts and in circumstances of the case as well as law on the subject, the learned Commissioner of Income-tax (Appeals) has erred in confirming addition of Rs.12,90,000/- as un explained cash deposited in the Bank Account. 4. It is prayed that above additions made by Assessing Officer and confirmed by Commissioner of Income-tax (Appeals) may please be deleted. 5. Appellant craves leave to add, alter or delete any ground(s) either before or in the course of hearing of the appeal. 3. The relevant facts as culled out from the materials on record are as under:- During the relevant financial year, in the capital account of the assessee, addition of Rs.7,00,000/- has been shown. Vide show cause notice dated 06/03/2014, the assessee was asked to satisfactorily explain the nature and source of this credit. Vide letter dated 13/03/2014, following reply in this regard has been submitted: “As regards credit of Rs.7,00,000/- in the capital account, (point No.2 of your notice) I have explained the same in my letter dated 13.12.2013. I again submit that out of Rs.7,00,000/- credit during the year, Rs.2,00,000/- is in respect of payment made by Meet Enterprise directly to Gurudev Enterprise. However by mistake, the same was credited to capital account which entry is corrected in later year by crediting to Meet Enterprise and debiting to Capital account. Thus actual receipt or credit during the year is Rs.5,00,000/-. For this amount the amount of Rs.2,50,000/- is cash received from the personal books of mine. A copy of which is already earlier submitted showing withdrawal of cash and deposit in the capital account with proprietary concern i.e. Ganesh Trading Co. As regards balance Rs.2,50,000/- it is withdrawn from Ganesh trading and again credited to capital account. Thus the capital account is fully explained and verifiable from the above account.”
ITA No.3226/Ahd/2015 Shri Kanjibhai Vashibhai Rabari vs. JCIT Asst.Year –2011-12 - 3 - 3.1 The reply of the assessee has been considered. However, the facts remains that in respect of this credit of Rs.7,00;000/- in assessee's capital account during the relevant previous year, none of credit entries is explainable. Regarding alleged payment of Rs.2,00,000/- by M/s. meet Enterprise, despite several opportunities assessee could not file any evidence in this regard regarding identity, etc. of this concern.
3.2 Further, in respect of balance amount of Rs.5,00,000/-, it is claimed that Rs.2,50,000/- had been received from personal books. The details of these alleged books filed in the course of scrutiny revealed the source of this amount as cash sales. However, no documentary evidence regarding availability of stock and sale thereof has been filed by the assessee. Therefore, the source of this amount in the personal books is also not satisfactorily explained.
3.3 Furthermore, in respect of remaining amount of Rs.2,50,000/-, it is asserted that this was withdrew from the proprietary concern of assessee namely M/s. Shree Ganesh Trading & hence is explained. This is not correct because impugned credit of Rs. 7,00,000/- under discussion had been shown in the capital account of the assessee in his proprietary concern Shree Ganesh Trading itself When it is claimed that he has maintained two sets of books of accounts, one in personal capacity and another in Shree Ganesh Trading, then how the withdrawal from Shree Ganesh Trading can be claimed to be reflected in the capital account with this firm itself.
ITA No.3226/Ahd/2015 Shri Kanjibhai Vashibhai Rabari vs. JCIT Asst.Year –2011-12 - 4 - 3.4 In view of entire discussion made above, it is held that the nature and source of the entire credit of Rs.7,00,000/- in assessee's capital account not satisfactorily explained and hence, this amount is treated as unexplained deposits in the books of accounts of the assessee and added to his income u/s. 68 of the Act. Penalty proceedings u/s. 271(l)(c) of the Act are being initiated separately for furnishing inaccurate particulars of income which leads to concealment of income with respect to addition to the above extent.
Credit in the account of M/s. Shree Gurudev Enterprise : In the course of scrutiny, it was found that in the name of M/s. Shree Guradev Enterprise the assessee has shown Rs.16,00,000/- credited in this financial year. Out of this credit, an amount of Rs.10,00,000/- has been found explained from the verification of the bank statement of the account of M/s. Shree Gurudev Enterprise, Kadi which has been called for u/s. 133(6) of the Act. It has to be so obtained because assessee had expressed his inability to file a confirmation from M/s. Shree Gurudev Enterprise, Kadi.
4.1 Regarding balance amount of Rs.6,00,000/- credited on 20.11.2010, assessee has claimed vide letter deled 13.03.2014 that this concern paid this amount directly to the official liquidator on assessee's behalf for purchase of land situated at Survey/Block No.165 of Village Dhanot, Chhatral-Kalol Road on 19.04.2011. However, this payment through D.D. is not reflected in the aforesaid statement of bank account of Shree Gurudev Enterprise. Assessee has also shown his inability to file
ITA No.3226/Ahd/2015 Shri Kanjibhai Vashibhai Rabari vs. JCIT Asst.Year –2011-12 - 5 - a confirmation in this regard on the pretext that Shree Gurudev Enterprise is not co-operating with him. In this view of the matter, since the onus lying upon the assessee to explain the credit of balance amount of Rs.6,00,000/- in the account of M/s. Shree Gurudev Enterprise by furnishing corroborative evidences in support of his claim, has not been discharged, it is held that nature and source of this credit could not be explained satisfactorily. Accordingly, said amount is treated as unexplained cash credits in terms of the provisions of section 68 of the Act and added to the income declared by the assessee. Penalty proceedings u/s.271(l)(c) of the Act are being initiated separately for furnishing inaccurate particulars of income which leads to concealment of income with respect to addition to the above extent.
Unexplained Cash deposits in the Bank account : During the course of the assessment proceedings, it is found that in the bank accounts of the assessee maintained with HDFC Bank, Kadi and Mehsana Urban Co-operative Bank Ltd., Kadi branch. Certain amounts were deposited in cash but assessee has no satisfactory explanation regarding the nature and source of these credits. These deposits are as under: HDFC Bank, Kadi - Account No. 03852020001777
Sr. Date Cash deposit Source as explained by the assessee No. (Rs.) 1. 06.10.2010 10,000 Re-payment of loan by one Shri Dilip Singh Jhala who has expired 2. 20.10.2010 30,000 Shri Padam Singh Rao
ITA No.3226/Ahd/2015 Shri Kanjibhai Vashibhai Rabari vs. JCIT Asst.Year –2011-12 - 6 - 3 27.12.2010 75,000 Re-payment of loan by one Shri Dilip Singh Jhala who has expired 4 29.12.2010 10,000
5 13.10.2010 1,50,000 From the sale proceeds, of (i) old machinery valuing Rs.10,71,000/-sold in cash to one Shri Virendra Kumar, 6 15.10.2010 1,00,000 Shri Narain Gajjar, T-9, Distt: Rewari (Haryana)(PAN 7 20.10.2010 2,00,000 BMHPK2759J) on 01.09.2010 and (2) of a vehicle No.GJ-3-18AH-5709 8 19.11.2010 2,50,000 also in cash sold to one Shri Vinodbhai Sagarbhai Desai on 9 22.11.2010 4,50,000 15.11.2010 for Rs.3,85,000/-. 10 23.11.2010 4,00,000
Total 16,75,000
5.1 In view of assessee's explanation regarding source of the aforesaid deposits in banks, he was asked to submit proper evidences in this regard. However, except one sale-cum-delivery note dated 15.11.2010 in respect of sale of aforesaid vehicle and a hand written note alleged by signed by the son of late Shri Dilip Singh Jhala, no other evidence regarding genuineness of the claimed source of the aforesaid cash deposits could be filed. Therefore, it is clear that except the source of Rs.3,85,000/- on the sale of aforesaid vehicle, the source of other deposits has not been satisfactorily explained with the help of proper documentary evidences. Accordingly, it is held that out of aforesaid total cash deposits of Rs.16,75,000/-, only the source of Rs.3,85,000/- is explained. Hence, the balance amount of such deposits i.e. Rs.12,90,000/- is added to the
ITA No.3226/Ahd/2015 Shri Kanjibhai Vashibhai Rabari vs. JCIT Asst.Year –2011-12 - 7 - income of the assessee for A.Y. 2011-12, u/s. 69 of the Act being the amount of cash deposits in bank whose nature & source has not been satisfactorily explained. Penalty proceedings u/s. 271(l)(c) of the Act are being initiated separately for furnishing inaccurate particulars of income which leads to concealment of income with respect to addition to the above extent.
Against the all three additions assessee preferred first statutory appeal before the ld. CIT(A) who dismissed the appeal of the appellant.
Now appellant’s appeal is before us.
We have gone through the relevant record and impugned order. So far Ground No.1 is concerned. Ld. AR has not pressed this ground.
So far Ground no.2 regarding confirmation of addition of Rs.6,00,000/- as un explained credit in the name of M/s. Shree Gurudev Enterprise is concerned. During the assessment proceedings and appellate stage, appellant has shown his inability to file confirmation in this regard and citing the reason that M/s. Shree Gurudev Enterprise is not co- operating with him. Since appellant has failed to furnish corroborative evidences in support of the claim. This ground of appeal is dismissed.
So far Ground No.3 regarding confirmation of addition of Rs.12,90,000/- as un explained cash deposited in the Bank Account is concerned. An amount of Rs.10,71,000/- being receipt from machinery
ITA No.3226/Ahd/2015 Shri Kanjibhai Vashibhai Rabari vs. JCIT Asst.Year –2011-12 - 8 - sales in which the appellant deals and ld.AO has accepted the sales recorded amounting to Rs.10,71,000/- in cash book on 01/09/2010 and as per AR copy of relevant cash book were also submitted before the authorities below and a copy of audited Profit and Loss account with scheduled were also filed before the lower authorities. We send this matter pertaining to Rs.10,71,000/- to the file of the AO to examine the same and if it is found correct then give the benefit of the same to the appellant.
In the result appeal filed by the appellant is partly allowed. This Order pronounced in Open Court on 02/02/2018
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Ahmedabad; Dated 02/02/2018 Priti Yadav, Sr.PS आदेश क� ��त�ल�प अ�े�षत/Copy of the Order forwarded to : 1. अपीलाथ� / The Appellant 2. ��यथ� / The Respondent. 3. संबं�धत आयकर आयु�त / Concerned CIT 4. आयकर आयु�त(अपील) / The CIT(A)-Gandhinagar, Ahmedabad. �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, अहमदाबाद / DR, ITAT, Ahmedabad 5. 6. गाड� फाईल / Guard file. आदेशानुसार/ BY ORDER, स�या�पत ��त //True Copy// उप/सहायक पंजीकार (Dy./Asstt.Registrar) आयकर अपील�य अ�धकरण, अहमदाबाद / ITAT, Ahmedabad