SANGEETA GOEL,JAIPUR vs. ITO, JAIPUR

PDF · subscribers
ITA 196/JPR/2017Status: DisposedITAT Jaipur29 June 2017AY 2012-1310 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal found that the issues were not properly examined by the lower authorities and the assessee did not provide a reasonable cause for non-appearance or lack of evidence. Therefore, the case was set aside to the AO for fresh adjudication, with a direction for a proper opportunity to be given to the assessee.

What were the facts?

The assessee's appeal concerns assessment year 2012-13, where additions were made for cash deposits, other deposits, and undisclosed rental income. The assessee claimed the deposits were from various sources like withdrawals, sale of assets, and loans, but lacked supporting evidence. The CIT(A) passed an ex-parte order confirming these additions.

What were the issues?

Whether the additions made by the AO and confirmed by the CIT(A) were justified without proper examination and opportunity to the assessee. Whether the explanation for cash and other deposits was adequately considered.

Which sections of the Income-tax Act were involved?

Section 68,Section 69

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, JAIPUR BENCHES, JAIPUR

Before: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM vk;dj vihy la-@ITA No. 196/JP/2017

For Appellant: Shri Devendra Kumar (Advocate) jktLo dh vksj ls@

PER VIJAY PAL RAO, JM :

This appeal by the assessee is directed against the order dated 23rd

December, 2016 of ld. CIT (A)-1, Jaipur for the assessment year 2012-13. The

assessee has raised the following grounds :-

“ 1. On the facts and in the circumstances of the case and in law, ld. CIT (A) erred in passing order without providing proper opportunity of being heard, thus the order so passed is bad in law and deserves to be quashed.

2.

On the facts and in the circumstances of the case and in law, ld. CIT (A) erred in confirming assessment order passed by ld. AO without considering the submission and evidence adduced by A/R of the assessee when assessee had categorically denied of giving any Power of Attorney in the name of A/R to authorize him to attend her case, therefore, order so passed based on the documents submitted by unauthorized person deserved to hold bad in law.

2 ITA No. 196/JP/2017 Smt. Sangeeta Goel, Jaipur.

2.1. That, the ld. AO has further erred in ignoring the fact that assessee in her previous replies the stated that her CA or A/R has submitted wrong documents/Xerox in support of his replies, thus order so passed deserves to be deleted in toto.

Without prejudice to the legal ground appeal on merits.

3.

On the facts and in the circumstances of the case and in law, ld. CIT (A) erred in confirming the addition of Rs. 37,96,500/- made by ld. AO u/s 68 by alleging the amount as unexplained income arbitrarily. Appellant prays addition of Rs. 37,96,500/- confirmed by ld. CIT (A) may please be deleted.

3.1. That the ld. CIT (A) has further erred in not appreciating the fact that assessee was not in the possession of sale deed, bills and vouchers which truly explains the sources deposit cash of Rs. 37,96,500/-, thus addition so made deserves to be deleted.

4.

On the facts and in the circumstances of the case and in law, ld. CIT (A) erred in confirming the addition of Rs. 1,68,000/- made by ld. AO allegedly on account of undisclosed rental income on the basis of replies made by A/R who has no authority to testify for assessee and further by not providing proper opportunity to assessee of being getting heard, thus addition of Rs. 1,68,000/- may please be deleted.

5.

On the facts and in the circumstances of the case and in law, ld. CIT (A) erred in confirming the addition of Rs. 34,56,400/- made by ld. AO on account of alleged unexplained deposits just on assumption and presumption basis and further without appreciating the submissions made and evidence adduced before the ld. AO during the assessment proceedings thus addition of Rs. 34,56,400/- may please be deleted.

6.

That the appellant craves the right to add, delete, amend or abandon the ground of this appeal at the time or before the actual hearing of the case.

2.

The assessee is an individual and proprietor of M/s. Rajwada Exports. She is

also Director of M/s. Rajwada Handicraft Textiles Pvt. Ltd. The assessee filed her return of income on 20th March, 2013 declaring total income of Rs. 1,84,780/-.

During the scrutiny assessment, the AO noted that the assessee has made cash

3 ITA No. 196/JP/2017 Smt. Sangeeta Goel, Jaipur.

deposit of Rs. 37,96,500/- in the Savings Bank Account with Axis Bank Ltd. and also

made deposits of Rs. 34,56,400/- through other modes. Accordingly, the AO asked

the assessee to show cause as to why the cash deposits as well as the other

deposits should not be added to the income of the assessee under section 68 of the

IT Act. The assessee explained before the AO that the cash deposits are made from

her withdrawal from the proprietorship concern, withdrawal of cash from the same

bank account, proceeds of car sold during the year, jewellery loans taken by the

husband and jewellery sold by the assessee herself. Thus the assessee explained

that the total amount of Rs. 43,17,400/- was available with the assessee out of

which the cash deposit of Rs. 37,96,500/- was made in the bank account. The AO

did not accept this contention of the assessee as the assessee did not produce the

supporting evidence showing the availability of cash and various transactions of sale

and loan taken by the husband of the assessee. Further, since the assessee is not

maintaining the proper accounts, therefore, the claim of withdrawal from the

proprietorship concern i.e. M/s. Rajwada Exports was also denied. As regards the

other deposits made by the assessee, the assessee submitted that the deposits were

made through cheques and it was the amount received back from the persons to

whom the assessee has given the amount. The assessee submitted that apart from

the amounts given to the persons, namely, Shri Rajesh Goel, the assessee has also

taken loans from Shri Sunil Pondrik, Shri Dinesh Verma and Shri Manoj Swami.

However, the AO did not accept this explanation and made the addition of the said

amount. The AO while completing the assessment has also made an addition on

account of undisclosed rental income of Rs. 1,68,000/-. The assessee challenged

the action of the AO before the ld. CIT (A). However, nobody had appeared before

4 ITA No. 196/JP/2017 Smt. Sangeeta Goel, Jaipur.

the ld. CIT (A) despite various notices issued to the assessee and consequently, the

ld. CIT (A) has confirmed the additions made by the AO while passing the impugned

ex parte order.

3.

Before us, the ld. A/R of the assessee has submitted that due to the disputes

between the assessee and her previous Chartered Accountant, the ld. AR/CA Shri

Satish Sareen neither attended the proceedings before the ld. CIT (A) nor filed the

relevant documents in support of the claim of deposits made in the bank account.

Thus the ld. A/R has submitted that the assessee could not produce the relevant

evidence before the authorities below as the CA who was representing before the

authorities below did not attend the proceedings and, therefore, the ld. CIT (A) has

passed the impugned order ex parte. He has further contended that even otherwise

the AO while making the addition has completely ignored the evidence produced by

the assessee and the entries in the bank account itself were not properly considered

by the AO. He has referred to the various entries in bank account and submitted

that even the income-tax refund as well as savings bank interests was added by the

AO treating the same as unexplained deposits. Further, the ld. A/R has submitted

that there are contra entries in the bank account – one was payment of certain

amounts to these persons and thereafter the assessee has received back the amount

through cheques, the same is appearing on credit side. Therefore, making the

addition of entire amount of deposit is not justified when there are contra entries of

payments of the said amount prior to the said deposits in bank. Further, the ld. A/R

has submitted that the assessee has explained the deposit of cash by giving the

details of source of deposit as withdrawal from the Axis Bank to the extent of

9,88,900/-, the sale proceeds of car sold during the year of Rs. 13,82,000/-,

5 ITA No. 196/JP/2017 Smt. Sangeeta Goel, Jaipur.

jewellery loan taken by the husband of the assessee from IIFL, withdrawal from

Rajwada Exports of Rs. 1,89,000/- and sale of jewellery by the assessee herself of

Rs. 5,77,500/-. As regards the deposits made through cheques, the ld. A/R has

pointed out that the assessee has produced the copies of statements of accounts of

the persons who have given the cheques and also explained that in some of the

cases the assessee earlier advanced the money to these persons and it was

subsequently received and, therefore, it was nothing but the money given by the

assessee earlier was received back which cannot be added as income for want of

source of deposit. The ld. A/R has further pointed out the assessee produced the

confirmations of accounts of Shri Sunil Pondrik, Shri Dinesh Verma and Shri Manoj

Swami from whom cheques of the respective amounts were received. However, the

AO without even looking into the primary and basic facts of transactions recorded in

the bank account, has treated the entire deposit as unexplained income of the

assessee. As regards the rental income, the ld. A/R has submitted that the AO has

made the addition on account of undisclosed rental income without even giving a

show cause notice to the assessee or discussing the matter in the assessment order.

Only in the computation of total income, the AO has added the said amount of Rs.

1,68,000/- by treating the undisclosed rent of Rs. 2,40,000/- and allowed the

deduction under section 24 being 30%, the net undisclosed income was added at

Rs. 1,68,000/-. Hence the ld. A/R has submitted that since the assessee could not

produce the relevant supporting evidence due to the reasons and circumstances

which were beyond the control of the assessee, therefore, one more opportunity

may be granted to the assessee to present her case and produce the relevant

supporting evidence.

6 ITA No. 196/JP/2017 Smt. Sangeeta Goel, Jaipur.

4.

On the other hand, the ld. D/R has submitted that despite the sufficient

opportunities given by the AO as well as by the ld. CIT (A), the assessee did not

furnish the relevant documents. Though the assessee has claimed the source of

cash deposit in the bank, however, not a single document was produced by the

assessee to prove the said claim and, therefore, the AO has rightly added the

deposits made in the account to the income of the assessee. He has referred to the

finding of the ld. CIT (A) and submitted that though the AO made the addition under

section 68 of the IT Act, however, the ld. CIT (A) while passing the impugned order

has modified the said order and treated the addition as made under section 69 of

the Act. He has relied upon the orders of the authorities below.

5.

We have considered the rival submissions as well as the relevant material on

record. The AO while completing the assessment has made three additions as under

:-

(1) Rs. 37,96,500/- on account of cash deposit in the Savings Bank account with Axis Bank. (2) Rs. 1,68,000/- on account of undisclosed rental income. (3) Rs. 34,56,400/- on account of deposits in the bank through modes other than cash.

We find that the assessee has also explained the source of deposit before the AO,

however, for want of supporting evidence the AO did not accept the explanation

furnished by the assessee. Before the ld. CIT (A), none has appeared on behalf of

the assessee despite various notices issued for the date of hearing on 03.08.2016,

29.08.2016, 10.10.2016 03.11.2016 and 21.12.2016, therefore, the ld. CIT (A) has

7 ITA No. 196/JP/2017 Smt. Sangeeta Goel, Jaipur.

passed the impugned order ex parte. As regards the addition of Rs. 37,96,500/-,

the assessee has explained the source of cash deposit as under :-

”Withdrawn from Axis Bank Rs. 9,88,900/- Car sold during the year Rs. 13,82,000/- Jewellery Loan from IIFC by husband Rs. 11,80,000/- Withdrawal from Rajwada Exports Rs. 1,89,000/- Jewellery sold as my stridhan Rs. 5,77,500/- Total : Rs.43,17,400/- “ --------------------

We find that the AO as well as the ld. CIT (A) denied these explanations for want of

evidence. However, the ld. CIT (A) in the finding has accepted the fact that the loan

shown by the husband of the assessee in fact was taken by Shri Manoj Swami who

is Accountant of the assessee. Therefore, the explanation of the assessee was not

accepted. It may be a case of furnishing some incorrect details and documents in

support of the claim of the assessee as we find that the assessee has claimed the

source of other than cash deposits as loan from Shri Manoj Swami which was also

denied by the authorities below. Once the ld. CIT (A) has found the fact that the

said loan of Rs. 15 lacs was taken by Shri Manoj Swami from IIFL, then the source

explained by the assessee to the extent of loan taken from Shri Manoj Swami cannot

be rejected. However, we find that some confirmations filed by the assessee were

rejected by the ld. CIT (A) due to the reason that the assessee has filed only

photocopy. Thus it is clear that the issues were not properly examined by the

authorities below and further the assessee also did not furnish the relevant evidence

in support of the source of deposits made in the bank account. However, we note

that neither the AO nor the ld. CIT (A) has even properly examined the bank

account details and entries and the entire credit side of the bank account as income

8 ITA No. 196/JP/2017 Smt. Sangeeta Goel, Jaipur.

of the assessee without even considering the fact that some of the entries are self

explanatory being refund of income-tax and savings bank interest which cannot be

added under section 68 or 69 of the IT Act. As regards the addition made on

account of undisclosed rental income, we find that the AO neither issued show cause

notice nor the matter is discussed in the assessment order as to how the AO

estimated the rental income at Rs. 2,40,000/- and consequently made an addition of

Rs. 1,68,000/- after allowing the deduction under section 24 of Rs. 72,000/-. The ld.

CIT (A) has confirmed all these additions ex parte. Having regards to the facts and

circumstances of the case when these issues were not properly examined by the

authorities below and the assessee has also not explained the reasonable cause for

not furnishing the relevant material evidence as well as reason for not appearing

before the ld. CIT (A), we, in the interest of justice set aside these issues to the

record of the AO for fresh examination and denovo adjudication of these issues.

Needless to say that the assessee be given a proper opportunity of hearing as well

as to file the relevant evidence in support of the claim.

6.

In the result, appeal of the assessee is allowed for statistical purposes.

Order is pronounced in the open court on 30/10/2018.

Sd/- Sd/- (foØe flag ;kno) (fot; iky jkWo ½ (VIKRAM SINGH YADAV ) (VIJAY PAL RAO) U;kf;d lnL;@Judicial Member ys[kk lnL;@Accountant Member

Jaipur Dated:- 30/10/2018. Das/

9 ITA No. 196/JP/2017 Smt. Sangeeta Goel, Jaipur.

आदेश की प्रतिलिपि अग्रेषित@ब्वचल वf जीम वतकमत वितूंतकमक जवरू

1.

The Appellant- Smt. Sangeeta Goel, Jaipur. 2. The Respondent – The ITO Ward 2(2), Jaipur. 3. The CIT(A). 4. The CIT, 5. The DR, ITAT, Jaipur 6. Guard File (ITA No. 196/JP/2017) vkns'kkuqlkj@ By order,

सहायक पंजीकार@ Aेेपेजंदज. त्महपेजतंत

10 ITA No. 196/JP/2017 Smt. Sangeeta Goel, Jaipur.

More judgments on Section 68

All 29,931 judgments and leading authorities on Section 68 →

Recent GST High Court judgments

Search GST case law →