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Income Tax Appellate Tribunal, “A” BENCH, PUNE
Before: SHRI SATBEER SINGH GODARA & DR. DIPAK P. RIPOTE
Appellant Respondent Appellant by: None Respondent by: Shri S.P. Walimbe Date of Hearing: 04.05.2022 Date of Pronouncement: 12.05.2022 O R D E R
Per S.S. Godara, JM
This assessee’s appeal for AY 2013-14 is against the CIT(A)-2, Kolhapur’s order dated 05.10.2017 passed in case No. Kop/56/2016-17 involving proceedings under Section 143(3) of the Income Tax Act, 1961 in short the Act.
Case called twice. None appears at assessee’s behalf. A perusal of the file notings reveals that the learned counsel of the assessee had appeared last time on 29.09.2020 only. It is accordingly proceeded ex-parte.
The assessee’s first and foremost substantial grievance challenges correctness of both the lower authorities’ action adding disallowance of Rs.1,75,27,892/- as unexplained cash payments made outside the books. The CIT(A) detailed discussion upholding the AO’s action to this effect reads as under :
“5.1 Grounds 1, 2 & 3: This is against the addition of Rs.1,75,27,892 made by the AO. The facts have been narrated in detail by me. The point of dispute is the source of cash in the hands of the appellant for making the cash payments outside the books. During survey, the loose papers found and impounded revealed that the appellant had incurred Rs.3,01,77,892 as expenditure in cash not recorded in the books of accounts. While filing the ROI, the appellant declared only Rs 1,26,50,000 and retracted Rs.1,75,27,892 claiming that the cash withdrawn from bank accounts was utilised to make these payments. The AO noted that there are discrepancies in the dates of withdrawals and the dates of making cash payments and therefore did not accept the contention of the appellant. To resolve this controversy, it is necessary to examine in depth the entries in the cash book' as well as the loose papers found. The appellant has submitted before me that the cash payments made and recorded in each loose paper is sourced out of withdrawals from bank accounts as under:- Loose paper Source : Bank of India CA No. 2414 Loose Paper No. 1 totalling to 14/06/2012 2892.00 Rs.29,32,892 23/06/2012 30000.00 09/07/2012 600000.00 14/09/2012 2300000.00 Loose Paper No. 2 totalling to 11/04/2012 1700000.00 Rs.62,00,000 17/04/2012 800000.00 19/04/2012 2200000.00 23/04/2012 500000.00 26/04/2012 1000000.00 Loose Paper No. 3 totalling to 11/04/2012 1700000.00 Rs.24,45,000 17/04/2012 800000.00 Loose Paper No. 4 totalling to 23/05/2012 50000.00 Rs.6,50,000 31/05/2012 600000.00 Loose Paper No. 7 totalling to 04/05/2012 2800000.00 Rs.53,00,000 07/05/2012 1200000.00 17/05/2012 1300000.00 The above submissions of the appellant have been examined with regard to the actual loose papers found and impounded. A major discrepancy is observed in loose paper no.
2. The appellant claims that it totals to Rs.62,00,000 whereas the actual loose sheet is as under : 1.4.12 Cash 20,00,000/- 2.7.12 Cash 5000000/- 5.4.12 Cash 2000000/- 5.4.12 Cash 37,50,000/- 27.4.12 Cash 44,00,000/- 13.4.12 Cash 50,00,000/- Cash 30,00,000/- ___________________ 1,88,50,000/- It is evident that the same is titles 'Fund Out Flow' with out flow of cash mentioned as Rs 20,00,000 on 1/4/2012, Rs 50,00,000 and Rs 20,00,000 totalling Rs 70,00,000 on 02/4/2012, Rs 37,50,000 on 5/4/2012, Rs 50,00,000 & Rs 30,00,000 on 13/4/2012 and Rs 44,00,000 on 27/4/2012. The total of this loose paper is Rs 1,88,50,000 and not Rs 62,00,000 claimed by the appellant. The explanation of the appellant before me is therefore factually wrong. I have examined the cash book of the appellant and find that the opening cash balance as on 1/4/2012 is Rs 3,05,872. I also find that these entries of cash outflow is not mentioned or entered in the cash book of the appellant. The appellant has attempted to explain the cash out flow with Rs 62,00,000 withdrawn from his bank account as in the table above. In this regard I find that once again, the cash withdrawn from the bank account has not entered the cash book at all pertaining to the cash withdrawals of Rs 62,00,000 in the cash book. The entries' are however made in the bank book showing these withdrawals, however as the bank book is constructed after the survey, it is of no help to the appellant. The appellant is perhaps trying to state that out of the cash out flow of Rs 1,88,50,000 made in April, he has source of Rs 62,00,000 to explain as withdrawal from the bank and the balance is disclosed as additional income. However this argument of the appellant would actually go against him on facts. I find that the cash out flow on 13/4/2012 is Rs 80,00,000 while the cash withdrawal from bank prior to that date is only Rs 17/00,000. Similarly the cash withdrawals from the bank from 17/4/2012 to 26/4/2012 are Rs 45,00,000, while the cash out flow on 27/4/2012 is Rs 44,00,000. The appellant cannot explain what has happened to the balance Rs 1,00,000 cash in hand as it is neither entered in the cash, book nor anywhere else in the books of account. Similarly the appellant 'is also not able to explain how he could have spent Rs 80;00,000 on 13/4/2612 when the bank withdrawals are only Rs 17,00,000. It should also be kept in mind that the cash physically found as on date of survey was Rs 4,09,506. In case of other loose papers, there is no date of cash payment mentioned thereon. The appellant is therefore trying to randomly link a particular cash from his bank account to the cash payment. The discrepancy pointed out by me above is glaring and cannot be explained by the appellant. I also find that these cash payments are actually expenses made as is clear from the narration of the entries such as 'excise challans', shipment payment, SSK challan etc. However the appellant has not debited the same to his books even after survey and the cash withdrawn and claimed as source of these payments is actually shown on the asset side of the balance sheet as 'Other Assets'. The sub head narration is 'Page/Chit No l' etc. Based on the facts above and the discrepancy pointed out by me, I am not inclined to agree with the appellant and am of the view that the appellant is merely trying to take advantage of the missing dates. The bank book of the appellant reveals entries like 'Page/Chit No 2 Rs 17,00,000' on 11/4/2012 and so on. This is the actual entry in the bank book constructed after the survey. Only the appellant seems to know what these entries represent. I therefore confirm the addition of Rs 1,75,27,892 and dismiss ground 1,2&3.
In the result, the appeal is dismissed.”
We note that the able assistance coming from the revenue side that this disallowance/addition is very much based on the seized material found during the course of section 133A survey exercise dated 7 & 8.11.2012. There could hardly be only dispute that such seized documents very much carry presumption of correctness regarding contents therein as per section 292C of the Act. We further find that the assessee could not reconcile the impugned addition figures in its regular books before the learned lower authorities. We thus conclude in this factual backdrop that the impugned addition of Rs.1,75,27,892/- has been rightly made in both the lower proceedings. The same stands upheld.
Next comes the assessee’s second substantive ground of ad-hoc addition of Rs.7,00,000/- which was pleaded as the 4 substantive ground in the lower appellate proceedings. The Revenue could hardly rebut the fact that the CIT(A) has nowhere adjudicated the same in his order under challenged. We thus restore the assessee’s instant latter substantive ground back to the CIT(A) for his detailed adjudication as per section 250(6) of the Act as per within three effective opportunities of hearing. Ordered accordingly.
This assessee’s appeal is partly allowed for statistical purposes in above terms.
Order pronounced in the open court on 12th May, 2022. Sd/- Sd/- (Dr. Dipak P. Ripote) (Satbeer Singh Godara) Accountant Member Judicial Member पुणे / Pune; दिन ांक / Dated : 12th May, 2022. रवि आिेश की प्रविविवप अग्रेविि / Copy of the Order forwarded to : अपीि र्थी / The Appellant. 1. प्रत्यर्थी / The Respondent. 2. 3. The CIT(A)-5, Pune 4. The Pr. CIT-4, Pune 5. DR, ITAT, “A” Bench, Pune. ग र्ड फ़ इि / Guard File. 6. //सत्य वपि प्रवि// True Copy// आिेश नुस र / BY ORDER,
िररष्ठ वनजी सविि / Sr. Private Secretary आयकर अपीिीय अविकरण ,पुणे / ITAT, Pune