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Income Tax Appellate Tribunal, DELHI BENCH: ‘F’, NEW DELHI
Before: SHRI AMIT SHUKLA & SHRI O.P. KANT
ORDER PER O.P. KANT, AM:
These appeals have been filed by the assessee against a common order dated 08/09/2016 passed by the learned CIT(Appeals)-23, New Delhi [in short ‘the Ld. CIT(A)’] for assessment year 2009-10 to assessment year 2013-14. As these appeals are arising from the common impugned order and identical grounds have been raised in different assessment years, all these appeals were heard together and disposed of by way of this consolidated order for convenience and avoid repetition of facts. As identical grounds have been raised in all the above appeals, we are reproducing here grounds of appeal only for assessment year 2009-10 as under:
1. That the appellant is an individual and based at Himachal Pradesh.
2. That the appellant worked as an employee Director of M/s. India Technomac Co. Ltd. & other group companies during the assessment year in question.
3. That a search and seizure operations u/s 132 of the Income Tax Act were carried out at the residence of the assessee on 09.01.2013. Subsequently, case of the assessee was centralized.
4. That for the assessment year 2009-10, the appellant submitted his return of income from salary amounting to Rs.2,32,000/- and interest income amounting to Rs.2,570/- and claimed deduction u/s 80C for Rs.95,000/-.
5. That vide order passed u/s 153A read with section 143(3)income of the assessee has been assessed at Rs.6,46,396/- and tax on the Income including interest u/s 234 A & B has been imposed amounting to Rs.1,76,263/-, the addition mainly pertains to non- furnishing of proof u/s 80C and documents seized during search operations.
6. That vide orders passed by the CIT(A)-23, New Delhi, the appellant has been granted relief for one addition amounting to Rs.1,29,920/- and one addition has been enhanced by a sum of Rs.1,44,608/-.
At the outset, we may like to mention that despite notifying none attended on behalf of the assessee, nor any adjournment application has been filed. In the circumstances, we are of the opinion that the assessee is not interested in prosecuting the appeal and accordingly, the same were hard ex parte qua the assessee.
Briefly stated facts of the case are that, the assessee was employee Director of M/s Indian Technomac Co. Ltd (ITCOL) during relevant period. The search and seizure action under section 132 of the Income-tax Act, 1961 (in short ‘the Act’) was carried out at the residence of the assessee along with the search and seizure action at the premises of M/s. ITCOL and their Directors. Consequent to the search, notice under section 153A of the Act were issued 01/05/2014 for the relevant years asking the assessee to file return of income. Subsequently, notice under section 142(1) of the Act was also issued along with questionnaire. No compliance was made by the assessee till 05/03/2015 though notice under section 271(1)(b) of the Act dated 09/12/2014 proposing levy of the penalty of Rs 10,000 and summons under section 131 of the Act dated 09/12/2014 asking the assessee to appear on 15/12/2014 were issued. On 05/03/2015, Authorized Representative of the assessee appeared and filed required documents and assessments were accordingly completed after making certain addition/disallowances including addition for unexplained deposit in bank accounts. 3.1 The assessee filed appeal before the Ld. CIT(A) but did not comply with the notices issued by him for a very long period. Thereafter, some additional evidences were filed on behalf of the assessee. The Ld. CIT(A) though deleted most of the additions, however on the issue of the bank deposits, he enhanced the additions. He also confirmed the addition on the basis of the seized documents rejecting the additional evidence filed by the assessee. 3.2 Aggrieved with the additions, the assessee is before the Tribunal raising the grounds in respect of appeals. The assessee is mainly aggrieved with no opportunity provided before enhancing the income of the assessee and not admitting the additional evidences filed by the assessee. 4. We have heard submission of the learned Departmental Representative and perused the relevant material on record including the order of the lower authorities. We find that the Ld. CIT(A), in impugned order for all the years involved in the appeals before us, enhanced the income observing as under: “4.5 Ground no. 03 in AY 2009-10 and ground no. 04 in AYs 2010- 11 to 2013-14 relate to additions on account of deposits in the bank accounts of the appellant, and in AYs 2009-10 & 2010-11 the net receipts determined by the AO on deposits in bank accounts and as per the document page-1 of Annx.-A seized from appellant’s residence. In this regard as per the copies of bank statements in the name of the appellant filed with the WS filed on 06.05.2016 for AY 2009-10 & 26.08.2016 for AYs 2010-11 to 2013-14 the following facts emerge.
AY AY AY AY AY 2013- 2009- 10 2010- 11 2011- 12 2012- 13 14 4. Bank accounts (Amt. in Rs.) Bank Cash - 26000 - - - statement of the Other 751887 100734 232901 72510 ' bank account deposits no.8256 of the Total 751887 126734 232901 72510 appellant with deposits Punjab & .Sind Interest 334 151 712 1089 146 Bank, Paonta Sahib Branch, (no narration) Bank statement of 100000 110000 397310 Cash - - the bank account no. 11693024271 Other - - - 1265822 600 of the appellant deposits with State Bank of Total - 1663132 600 100000 110000 India, Chamukha deposits Sab, Kangra Interest 24 30 44 13 Branch (no narration)
Bank statement of - - Cash 115000 318000 41000 the bank account Other - 426638 349098 425348 127329 no.352302010060 deposits 731 of the Total - 541638 667098 466348 127329 appellant with deposits Union Bank of Interest 239 1064 1428 1040 India, Chamukha Sab, Kangra Branch (with narration)
- Bank statement of Cash 535 458 140000 - the bank account Other - - 585420 no. deposits 155DP0020009 Total - 535 458 725420 " 67 of the deposits appellant with Interest 9 22 90 Kangra Central Cooperative Bank Ltd., Shantla Branch (no narration) Bank statement of Cash - - - - - the bank account Other - - - 1146 233225 no.20155011449 deposits of the appellant Total - - - 1146 233225 with Kangra deposits Central Interest 9 509 Cooperative Bank Ltd., Shantia Branch (no narration) Total Cash - 141000 418458 291000 397310 Total 751887 669507 1000457 1375424 2023686 deposits Interest 358 429 1842 2629 1695
From the above it is observed that a total deposits, including cash deposits, and the interest credited in the bank accounts of the appellant are as above. The AO has taken the figures of Rs.7,52,301/-, Rs.6,67,906/-, Rs. 15,98,242/-, Rs.27,68,527/- & Rs.54,72,430/- as total deposits in the 05 respective years. While the AO has also considered Rs.4,50,000/- loan received on 30.10.2010 from SB! for purchase of Bolero, Rs.15,00,000/- received from appellant’s father, Sh. M.L. Sharma, deposited in the SBI account on 12.03.2012 in AY 2012-13 and Rs.5,94,175/-, Rs. 20.00 lakh being receipt from New India Insurance Company (against theft of Bolero on 16.0J3.2012) and loan from ITCOL respectively in AY 2013-14, there are marginal differences in other years. The figures calculated by me are taken for consideration in this appeal. The receipt of money from Sh. M.L. Sharma as above is considered separately herein below, and the insurance receipt cannot be considered as income.
4.5.2 In the AYs 2009-10 & 2010-11 the AO has further considered ]he entries in the seized document page-1 of Annx.-A the appellant had explained before the AO mentioned at para-12 of the assessment order of these two years, that the amount mentioned in these pages pertain to expenses incurred by the mine manager Sh. K.C Pant, and employ of the same company, and relate to expenses at the lime stone mine and the entries do not relate to the appellant. But the AO concluded that in the absence of any supporting document the contention of the assessee cannot be accepted. But the AO has not made any further enquiry nor did he examine as to whether the entries/expenses as per this document related to M/s Indian Technomac Company Ltd. (ITCOL) which was also assessed by the same AO the primary search being against this company group of Sh. R.K. Sharma, and if these expenses were not accounted the same could have been considered in the accounts of the said company. Besides, the unexplained-deposits in the bank accounts of the appellant have been duly considered for taxation by the AO which could be from any such business carried by the appellant as alleged by the AO, and no co-relation of these entries with the entries in the bank accounts of the appellant including cash deposits and withdrawals as well have been established by the AO. Yet the AO set off the expenses of Rs.1,44,608/- and Rs.8,490/- as per this document against the total deposits in the bank accounts in the two AYs 2009-10 & 2010-11 and brought to tax only the net amount of Rs.3,76,906/- and Rs.4,19,416/- after giving credit for Rs.2,30,787/- and Rs.2,40,000/- on account of salary deposited in the bank accounts in the fwo respective assessment years. In view of the fact that there is no evidence linking the said seized page with the appellant, which the appellant also has denied, and as per my finding herein above it is held that the said seized page do not have any relation with the appellant and cannot be considered in the assessment of income of the appellant. The income assessed in these two assessment years would accordingly be enhanced by the said amount of Rs.1,44,608/- and Rs.8,490/- respectively.
4.5.3 As regard the. bank account, as mentioned at para-4.2 herein above, the appellant was asked to submit an excel sheet statement explaining the source of deposits and the deposits accepted by the AO in respect of the bank account statements but the appellant/appellant’s AR failed to appear or submit said details/explanation. It is therefore held that the entire deposits in the bank accounts of the appellant are to be assessed as undisclosed income of the appellant in all the years, except for those considered separately as noted at para-4.5 above, with due allowance for the salary credited in the bank accounts and already accepted by the AO, as also Rs.4,50,000/- loan received on 30.10.2010 from SBI for purchase of Bolero, Rs. 15,00,000/- received from appellant’s father, Sh. M.L. Sharma, deposited in the SBI account on 12.Q1L2012 in AY 2012-13, considered separately herein below, and Rs.5,94,175/- & Rs. 20,00,000/- lakh being receipt from New India Insurance Company (against theft of Bolero on 1.6.08.2012) and loan from ITCOL respectively in AY 2013- 14. Further,. Rs. 1,500/- and Rs.4,500/- have been found deposited against reimbursement of tuition fees in AYs 2012-13 & 2013-14 which have apparently net been claimed u/s 80C of the Act in the regular returns filed and I have already directed the AO to allow deduction u/s 80C of the Act on account of LIP payments as claimed.
4.5.4 The appellant has also submitted and a common affidavit dt. 02.05.2016 in all the years wherein he has beside statements regarding the seized diary, sale of bus and purchase of Bolero, and FDs in the name of his father, Sh. M.L. Sharma, he has claimed that he was reimbursed monthly fuel and other day-to-day expenses which included entertainment expenses, travelling expenses, conveyance expenses and factory expenses. With the affidavit a certificate signed by Sh. Vivek Gupta, Manager of ITCOL has been submitted wherein various amounts are shown as paid to him by ITCOL by cheque and cash - Rs.2,78,352/- including Rs. 1,35,000/- in cash in AY 2010- 11, Rs.6,63,053/- including Rs.3,70,000/- in cash in AY 2011-12, Rs.3,64.743/- including Rs.41,000/- in cash in AY 2012-13 and Rs.1,44,801/- in AY 2013-14. On perusal of the certificate enclosed with the affidavit it is observed that the appellant has attempted to explain the cash deposits in the bank accounts by alleging receipts from ITCOL but there is no independent corroborative evidence to substantiate this statement. It is settled law that an affidavit without corroborative and supporting evidence is no evidence. Hence, no cognizance of the affidavit is taken to this extent.
4.5.5 Thus, the income to be considered for assessment in these five years would be as under:
AY 2009-10 AY 2010-11 AY 2011-12 AY 2012-13 AY 2013-14 Total deposits in 7,51,887 6,69,507 10,00,457 13,75,424 20,23,686 bank accounts Less: Salary: 2,32,000 2,40,000 2,35,000 2,72,500 3,55,000 Net Income 5,19,887 4,29,507 7,65,457 11,02,924 16,68,686
The income assessed on this account would get modified/enhanced accordingly. These grounds are accordingly dismissed.”
4.1 On perusal of above finding of the Ld. CIT(A), it is apparent that no notice has been issued by the Ld. CIT(A) before enhancing the income of the assessee. In absence of issue of notice before enhancing the income, the assessee has been deprived from submitting his explanation and which has resulted in violation of the principle of the natural justice. In the circumstances, we are of the opinion that matter should be restored back to the Ld. CIT(A) for following the principles of natural justice while adjudicating the appeal of the assessee. In the interest of substantial justice, the additional evidences filed by the assessee, may also be examined in accordance with law. Accordingly, the grounds raised in these appeals are restored back to the file of the Ld. CIT(A) for deciding the same afresh in accordance with law. It is needless to mention that both the parties, i.e, the assessee as well as the Assessing Officer shall be afforded adequate opportunity of being heard. 4.2 In the result, all the above appeals of the assessee are allowed for statistical purposes. Order pronounced in the open court on 20th February, 2020.