SMITA BALASAHEB MADHWAI,NASHIK vs. INCOME TAX OFFICER, WARD -1(4), NASHIK

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ITA 369/PUN/2020Status: DisposedITAT Pune23 December 2022AY 2008-200913 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 noted that the assessee did not appear for hearings before the ITAT, nor did they file any written submissions or adjournment letters. There was no evidence on record from the assessee's Authorized Representative (AR) to rebut or controvert the additions confirmed by the CIT(A). The Tribunal found merit in the order of the CIT(A) and upheld it. Specifically, regarding Ground No. 1 (section 40A(3)), the CIT(A) had upheld a disallowance of Rs. 17,06,500/- (though the assessee's grounds refer to Rs. 60,36,500/- and Rs. 64,66,000/-). The CIT(A) found that the assessee could not demonstrate any exception under Rule 6DD. Regarding Ground No. 2 (section 69A/69), the CIT(A) confirmed an addition of Rs. 60,36,500/-. The CIT(A) observed that the entire transactions of Rs. 60,36,500/- were made in cash, making the money trail impossible to establish, and that the AO had correctly exercised his discretion. The CIT(A) also upheld the addition made by the AO under section 69 of Rs. 57,56,500/- as the assessee could not explain the source of investment on a one-to-one basis. The net addition sustained by the CIT(A) under section 40A(3) and section 69 was Rs. 60,36,500/-. The Tribunal, in the absence of any rebuttal from the assessee, dismissed the assessee's grounds of appeal and upheld the CIT(A)'s order. The principle cited is that the ITAT is the final fact-finding authority, and if it fully agrees with the lower appellate authority and has no other grounds, it does not act illegally by not repeating the reasons.

What were the facts?

The assessee, Smt. Smita Balasaheb Madhwai, an individual engaged in land dealings, is in appeal before the ITAT Pune against the order of the CIT(A)-1, Nashik, dated July 13, 2017. This order emanated from an assessment order passed by the Assessing Officer (AO) on March 10, 2016, under section 144A read with section 147 of the Income Tax Act, 1961, for Assessment Year 2008-09. The AO had made an addition of Rs. 1,74,36,500/-. The assessee did not file a return for the AY 2008-09. A survey under section 133A was conducted on January 22, 2015. Based on impounded documents, the AO noted cash payments exceeding Rs. 20,000/- totaling Rs. 1,74,36,500/- and unexplained sources for this amount. The CIT(A) granted partial relief. The assessee is aggrieved by the CIT(A)'s order and has filed this appeal.

What were the issues?

1. Whether the disallowance of Rs. 60,36,500/- made by the CIT(A) under section 40A(3) of the Income Tax Act, 1961, on account of cash payments for land purchases is justified, considering business expediency and judicial precedents. Assessee's Contention: The assessee argued that the CIT(A) erred in disallowing the amount under section 40A(3) without considering business expediency and judicial pronouncements, citing Anupam Tele Services Vs. ITO (Guj. HC), Shri. Gangadhar Karbhari Jadhav Vs. DCIT (ITAT Pune), and Dyaneshwar Dhamne Vs. ITO (ITAT Pune). The assessee also contended that the CIT(A) erred in holding the amount of Rs. 64,66,000/- (stated as Rs. 60,36,500/- in the grounds) as hit by section 40A(3). Revenue's Contention: Not recorded. 2. Whether the addition of Rs. 60,36,500/- under section 69 of the Income Tax Act, 1961, for unexplained investment is justified, given that the CIT(A) did not specify how section 69 is attracted and failed to dwell into the issue in detail. Assessee's Contention: The assessee argued that the CIT(A) erred in holding the amount of Rs. 60,36,500/- as hit by section 69 without specifying its applicability and without considering the issue in its entirety. Revenue's Contention: Not recorded.

Which sections of the Income-tax Act were involved?

Section 40A(3),Section 69,Section 69A,Section 144A,Section 147,Section 133A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, PUNE BENCHES “B” :: PUNE

Before: SHRI S.S.GODARA & DR. DIPAK P. RIPOTE

For Respondent: Shri M.G.Jasnani— DR
Hearing: 19/12/2022Pronounced: 23/12/2022

ORDER

PER DR. DIPAK P. RIPOTE, AM:

1.

This appeal filed by the Assessee is directed against the order of ld.Commissioner of Income Tax(Appeals)-1, Nashik dated 13.07.2017 emanating from assessment order of Assessing officer dated 10.03.2016 under section 144(A) r.w.s 147 of the I.T.Act, 1961 for the A.Y.2008-09. The Assessee has raised the following grounds of appeal: 40A(3) Disallowance against cash payments The Ld. CIT (A) in her order dated 13/07/2017 has held that and amount of Rs.60,36,500/- paid by the appellant in cash to the persons from whom land was purchased to be hit by the provisions of section 40A (3) of the IT Act 1961. Here the Ld. CIT (A) has not considered the fact that while deciding issues related to the provisions of section 40A(3) of the IT Act 1961 the fact that the Smt.Smita Balasaheb Madhwai [A] payments have been endorsed by the H’ble Sub- Registrar, business expediencies, etc. as has been decided in Judicial forums, should have been considered.

In this regard a kind reference is invited to Honorable Guj'rat High Court’s Judgment covering the similar issues in case of Anupam Tele Services Vs. ITO in Tax Appeal No. 556 of 2013 reported in 268 CTR 121 (Guj.). It has been held that, the paramount consideration of section 40A(3) is to curb and reduce the possibilities of black money transactions and as held by the H’ble Supreme Court in the case of Attar Singh Grumukh Singh (1991) 191 ITR667 (SC), section 40A(3) of the Act does not eliminate considerations of business expediencies.

The appellants further invite a kind attention to the judgment delivered by ITAT Pune in the cases of Shri. Gangadhar Karbhari Jadhav Vs. DCIT in its order in dated 21.04.2017 and Dyaneshwar Dhamne Vs ITO in ITA No. 202/PN/2016 dated 08.07.2016 has held in similar facts and circumstances that such payments are not hit by the provisions of section 40A (3) of the IT Act 1961.

Therefore appellants state that, on the facts and in the circumstances of the case and in law, the Ld. CIT (A) has erred in holding that the amount of Rs. 64,66,000/- is hit by the provisions of section 40A (3) of the IT Act 1961, without considering the issue in its entirety.

69 unexplained investment:-

The Ld. CIT (A) in her order dated 13/07/2017 has held that and amount of Rs.60,36,500/- paid by the appellant in cash to the persons from whom land was purchased to be hit by the provisions of section 40A (3) of the IT Act 1961 as also the provisions of section 69 of the IT Act 1961. Here the Ld. CIT (A) has not specified how the provisions of section 69 of the IT Act 1961 are also attracted to the impugned addition without dwelling into this issue in detail and without stipulating the details.

On the facts and in the circumstances of the case and in law, the Ld. CIT (A) has erred in holding that the amount of Rs.60,36,500/- is hit by the provisions of section 40A (3) as also section 69 of the Smt.Smita Balasaheb Madhwai [A] IT Act 1961, without considering the issue in its entirety and without specifying how the provisions of the section 69 of the IT Act 1961 would apply.

The appellant craves for addition, deletion, alteration, and modification etc. of the grounds of appeal.”

2. Briefly facts of the case are that the appellant is an individual engaged in the business of plots and land dealings. The return of income for A.Y. 2008-09 was not filed. The appellant is director in M/s.Satyaroop Buildcon Pvt. Ltd., and partner in M/s.Tirtharoop Buildcon. A survey action u/s.133A was conducted in the case of appellant on 22.01.2015. On the basis of the impounded documents, the Assessing Officer held that the assessee has made cash payments exceeding Rs.20,000/- to five parties, totaling to Rs.1,74,36,500/-. The Assessing Officer also held that the assessee has not explained the source of Rs.1,74,36,500/-. The Assessing Officer made an addition of Rs.1,74,36,500/- and assessed the income of the appellant at Rs.1,74,36,500/-.

3. Aggrieved by the addition made by the AO, the assessee filed appeal before the ld.CIT(A). The ld.CIT(A) gave part relief to the appeal of the assessee.

4. Aggrieved by the order of the ld.CIT(A), the assessee filed appeal before this Tribunal. Smt.Smita Balasaheb Madhwai [A] 5. The ld.CIT(A) in para 5.4 to 5.25 held as under:

ITA No.369/PUN/2020 Smt.Smita Balasaheb Madhwai [A] Smt.Smita Balasaheb Madhwai [A] ITA No.369/PUN/2020 Smt.Smita Balasaheb Madhwai [A] ITA No.369/PUN/2020 Smt.Smita Balasaheb Madhwai [A] ITA No.369/PUN/2020 Smt.Smita Balasaheb Madhwai [A] ITA No.369/PUN/2020 Smt.Smita Balasaheb Madhwai [A] ITA No.369/PUN/2020 Smt.Smita Balasaheb Madhwai [A] ITA No.369/PUN/2020 Smt.Smita Balasaheb Madhwai [A]

6.

None appeared on behalf of the assessee. We heard ld.DR for the Revenue. We find from the record that even before this Tribunal, the assessee has continuously not attended the hearing before the Bench i.e. 12.11.2021, 20.12.2021, 12.07.2022, 11.10.2022 and 19.12.2022. No written submissions filed, no adjournment letter filed. There is no evidence on record from ld.AR to rebut/controvert the said additions confirmed by the ld.CIT(A).

7.

Thus, in view of the aforesaid factual position and discussion of the ld.CIT(A), we find merit in the order of the ld.CIT(A), hence, Smt.Smita Balasaheb Madhwai [A] we uphold the order of the ld.CIT(A). Accordingly, Ground No.1 & 2 of the assessee are dismissed.

8.

We find support from the orders of Hon’ble Supreme Court in the case of CIT Vs. K.Y.Pilliah 63ITR 411 (SC) in which Hon’ble Supreme Court observed as under: “The Income-tax Appellate Tribunal is the final fact-finding authority and normally to should record its conclusion on every disputed question raised before, it setting out its reasons in support of its conclusion. But, in failing to record reasons, when the Appellate Tribunal fully agrees with the view expressed by the Appellate Assistant Commissioner and has no other ground to record in support of its conclusion, it does not act illegally or irregularly, merely because it does not repeat the grounds of the Appellate Assistant Commissioner on which the decision was given against the assessee or the department.”

9.

In the result, appeal of the Assessee is Dismissed. Order pronounced in the open Court on 23rd December, 2022.

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