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Income Tax Appellate Tribunal, “C” BENCH, AHMEDABAD
Before: SHRI P.M. JAGTAP, VICE- & SHRI T.R. SENTHIL KUMAR
आयकर अपील"य अ"धकरण, अहमदाबाद "यायपीठ ‘‘सी’’ अहमदाबाद। IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH, AHMEDABAD (through web-based video conferencing platform) ] ] BEFORE SHRI P.M. JAGTAP, VICE-PRESIDENT AND SHRI T.R. SENTHIL KUMAR, JUDICIAL MEMBER Assessment Years : 2011-12 Shri Ramsangbhai Bachubhai Solanki, Income-Tax Officer, 299, Rajput Vas, Darbar Vas, Vs Ward 7(3), Rethal, Tal: Sanand, Ahmedabad Dist. Ahmedabad- 382210 PAN : BWGPS 3056 P अपीलाथ"/ (Appellant) "" यथ"/ (Respondent) Assessee by : None Revenue by : Shri V.K. Singh, Sr DR सुनवाई क" तार"ख/Date of Hearing : 24/02/2022 घोषणा क" तार"ख /Date of Pronouncement: 02/03/2022 आदेश/O R D E R PER P.M. JAGTAP, VICE-PRESIDENT :
This appeal filed by the assessee is directed against the order of learned Commissioner of Income-Tax (Appeals)-3, Ahmedabad (“CIT(A)” in short) dated 30.11.2017 whereby he confirmed the addition of Rs.84,19,000/- made by the Assessing Officer to the total income of the assessee.
The assessee, in the present case, is an individual who filed his return of income for the year under consideration on 23.08.2012 declaring total income of Rs.4,66,510/-. The said return was selected for scrutiny under CASS and a notice under Section 143(2) of the Income-tax Act, 1961 (“the Act” in short) was issued by the Assessing Officer to the assessee. The said notice issued by the Assessing Officer under 143(2) of the Act as well as the subsequent notices issued by him under Section 142(1) of the Act, however, remained uncomplied with by the assessee. The Assessing Officer, Shri Ramsangbhai Bachubhai Solanki Vs. ITO AY : 2011-12 2
therefore, was left with no option but to complete the assessment ex-parte to the best of his judgement on the basis of material available on record. In the assessment so completed under Section 144 of the Act vide order dated 20.03.2014, the Assessing Officer determined the total income of the assessee at Rs.88,85,510/-, after making the following additions:-
i) Unexplained cash deposit in HDFC Bank - Rs.32,00,000/- ii) Unexplained cash deposit in the Kalupur - Rs.12,19,000/- Commercial Co-Op. Bank Ltd iii) Unexplained investment in immovable property - Rs.40,00,000/-
Against the order passed by the Assessing Officer under Section 144 of the Act, an appeal was preferred by the assessee before the learned CIT(A) and the non-compliance before the Assessing Officer during the course of assessment proceedings was explained by the assessee before the leaned CIT(A). The assessee also filed certain details and documents to support and substantiate his case that all the three additions made by the Assessing Officer aggregating to Rs.84,19,000/- were not sustainable. The learned CIT(A) forwarded the same to the Assessing Officer seeking the remand report and after taking into consideration the remand report submitted by the Assessing Officer, the submissions made by the assessee and the material available on record, the learned CIT(A) proceeded to confirm the entire addition of Rs.84,19,000/- made by the Assessing Officer to the total income of the assessee for the following reasons given in paragraph No.5 of his impugned order:-
“5. Decision: I have considered the facts mentioned in the assessment order and the remand report of the AO and the submission and rejoinder of the appellant carefully. After considering all the facts and circumstances, the additional evidence submitted by the appellant is admitted as there was a reasonable cause for not producing the evidences before the A. O. and the same is considered necessary to go to the root of the controversy involved. Therefore, same are admitted for adjudication to provide natural justice to appellant and such admission is supported by following case laws: Shri Ramsangbhai Bachubhai Solanki Vs. ITO AY : 2011-12 3
- Kamlaben S Bhatti 44 Taxman.com 459 (Guj.) - Dharmamdev Finance Pvt Limited 43 taxman.com 395 (Guj.). - ACIT Vs Jogindersingh (ITA No. 2942/DELHI/2011) ITAT, Delhi - Anmol Colour India Pvt. Ltd. Vs. ITO 31 SOT 18 (JP) 121 ITJ 269: ITAT, Jaipur. - CIT Vs. Khanpur Cool Synthicate (1964) 53 ITR 225 (SC): The appellant has submitted that the funds in A.Y.2011-12 have came largely through banking channel i.e. A/c No.16771530000018 of HDFC Sanand, therefore, it was incumbent upon the undersigned to inquire about entries in the Sanand, HDFC Bank account. The ratio in the case of Jute Corporation of India Ltd. - 187 ITR 688 is applied. Hence the appellant was specifically asked to explain the issue vide letter dated 05.04.2017 which is reproduced as under:
"Please refer to appellate hearing dated 24.01.2017 wherein the source of incoming funds dated 09.02.2010, 18.02.2010, 08.03.2010 and 19.03.2010 in HDFC bank, Sanand account No. 16771530000018 of Shri Ramsangbhai B. Solanki was specifically inquired and the AR promised to file all necessary details to justify the genuineness of the funds by 11.00 A.M. on 08.02.2107. On 23.02.2017 one Shri Jayendra B. Parmar from Umesh Shukla & Co., CAs attended and sought last opportunity to file the final details about impugned credit entries in HDFC, Sanand Account by 11.00 A.M.27.02.2017. 2. The basic facts are not on record inspite of case being adjourned as per request for over 20 times. In the circumstances, the appellant is requested once again to file credible evidences as desired by 11.00A.M. on 24.04.2017, failing which the case would be decided as per facts on record." However, appellant has not come forward to submit any explanation inspite of several opportunities granted. Appellant sought last adjournment on 23.02.2017 which was granted by fixing the case on 27.02.2017 but remained inconsequential. The situation remained unchanged even as on today because of recalcitrant attitude of the appellant. Consequently, I find that credits in that HDFC bank account No.16771530000018, Sanand Branch remained unexplained as under:
Date of funds transfer Amount of transfer Bank balance on the day 09.02.2010 20,00,000/- < 600/- 18,02.2010 20,00,000/- < 200/- 08.03,2010 20,00,000/- < 200/- 19.03.2010 20,00,000/- <90,000/- 80,00,000/- Shri Ramsangbhai Bachubhai Solanki Vs. ITO AY : 2011-12 4
Once credit came in impugned account, the cheques have been issued to withdraw the cash. It is the same cash which is attempting to explain the unexplained cash deposits (HDFC and KCC Bank Ltd.) questioned by the AO. On the day each of such credits of Rs.20,00,000/- each, the bank balance was minimum as depicted in last column of chart above. It is observed that the above amounts have come through transfer entries from some other account which appears to be weakest link of appellant's economic affairs. The appellant has deposited cash in some account in his name or in the name of family members which has been transferred to Sanand HDFC Account No.16771530000018 so as to avoid the scrutiny by the IT department. Consequently, the appellant is trying to explain either cash deposit or investment in property to the extent of at least Rs.80,00,000/-, the source of which has remained unexplained in A.Y.2011-12. In view of these facts, the addition made by the AO in assessment order vide para 3 & 4 of Rs.84,19,000/- is found to be correct. The appellant has tried to confuse the issue but the essence and in substance the transaction is quite different. The true character of the issue involved, is required to be understood in holistic sense. The ratio laid down in following case laws is being applied:
Motor and General Stores Pvt. Ltd. - 66 ITR 692 (SC): "The name given to a transaction by the parties concerned does not necessarily decide the nature of the transaction, the question always is what is the real character of the transaction and not what parties call it."
Workmen vs. Associated Rubber Industries - 157 ITR 77 (SC): "It is duty of the Court in every case where ingenuity is expressed to avoid taxing and welfare legislation to get behind the smoke screen and discover the true state of affairs."
In view of the ratio laid down by the Apex Court in various case laws (supra) and the facts of the case, I am convinced with the findings of AO and don't intend to interfere. In the circumstances, the addition made by AO is hereby confirmed and ground No.4 & 5 of appeal are dismissed.”
Aggrieved by the order of the learned CIT(A), the assessee has preferred this appeal before the Tribunal on the following grounds:-
That the learned CIT(A)-3 has erred both in law and on the facts of the case in dismissing the appeal of the appellate without considering the submissions made by the appellant on various dates during the course of appeal hearing. Shri Ramsangbhai Bachubhai Solanki Vs. ITO AY : 2011-12 5 2. That the order passed by learned A.O. U/s 143(3) r.w.s. 144 is not legal and valid in law. Even though no notice have been served on the appellant and as such the same deserves to be cancelled. 3. On the facts and circumstances of the case of the appellant, the additions made by learned A.O. amounting to Rs.44,19,000/- being amount deposited in bank account and out of which investment was made in purchase of property, however, the learned A.O. has made both the additions totaling to Rs. 84,19,000/- is unjust, unfair and undesirable which requires to be deleted.
That the appellant has invested amount for purchase of house property by issuing cheque from Bank account and therefore additions made by learned A.O. and confirmed by learned CIT(A) requires to be deleted.
Having regard to the peculiar facts and circumstances of the case of the appellant, the additions made by learned A.O. as income from other sources and confirmed by learned CIT(A)-3 which is not legal and valid in law as per the provisions of the Act which requires to be deleted. 6. That the learned CIT(A) has without considering the documentary evidences submitted by the appellant during the course of appellate proceedings, dismissed the appeal, which requires to be considered on merits and additions requires to be deleted.”
At the time of hearing fixed in this case on 24.02.2022, none has put in appearance on behalf of the assessee. There was similar non- compliance on the part of the assessee when this appeal was earlier fixed for hearing on 03.10.2019, 13.01.2020, 08.09.2020, 18.02.2021, 31,08.2021 and 15.11.2021. This appeal of the assessee is, therefore, being disposed of ex- parte, after considering the arguments of learned Departmental Representative and perusing the relevant material available on record.
As regards the issue raised by the assessee regarding lack of proper and sufficient opportunity and non-consideration of his submissions by the learned CIT(A), it is observed that, even though the assessment was completed by the Assessing Officer ex-parte under Section 144 of the Act due to non-compliance on the part of the assessee to the notices issued under Section 143(2) and 142(1) of the Act, the learned CIT(A) allowed proper and Shri Ramsangbhai Bachubhai Solanki Vs. ITO AY : 2011-12 6
sufficient opportunity of being heard to the assessee by fixing the appeal of the assessee on various dates as enumerated on page No.2 of his impugned order. He also allowed the assessee to file the relevant details & documents and forwarded the same to the Assessing Officer for his verification and comments. After taking into consideration the remand report submitted by the Assessing Officer, the submissions made by the assessee and the relevant material available on record, he disposed of the appeal of the assessee by passing a well reasoned and well discussed order. In our opinion, it therefore cannot be said that it is a case where the assessee was not given proper and sufficient opportunity of being heard and his submissions were not considered. We, therefore, find no merit in Ground Nos.1, 2, 5 and 6 raised by the assessee in this appeal and dismiss the same.
As regards Ground Nos. 3 & 4, it is observed that limited issue raised by the assessee in the said grounds is that the investment of Rs.40,00,000/- in purchase of immovable property was made by him from the deposits of Rs.32,00,000/- and Rs.12,19,000/- made in the bank accounts with HDFC Bank and the Kalupur Commerical Co. Op. Bank Ltd.; and, the said deposits being the source of investment made in purchase of immovable property, the addition of Rs.40,00,000/- made by the Assessing Officer and confirmed by the learned CIT(A) is not justified as it amounted to double addition. In this regard, it is observed that similar contention was specifically raised by the assessee in the written submissions filed before the learned CIT(A), but the learned CIT(A) has not given any finding/decision on this aspect of the matter in his impugned order. Even the learned Departmental Representative has not been able to dispute this position. We, therefore, consider it fair and proper and in the interest of justice to restore this issue to the file of the Assessing Officer for the limited purpose of verifying the claim of the assessee of having made the investment of Rs.40,00,000/- in Shri Ramsangbhai Bachubhai Solanki Vs. ITO AY : 2011-12 7
purchase of immovable property from the deposits of Rs.44,19,000/- found to be made in the bank accounts with HDFC Bank and the Kalupur Commercial Co. Op. Bank Ltd. which are treated as unexplained and added to the total income of the assessee. If the claim of the assessee is found to be correct on verification, the addition of Rs.40,00,000/- made on account of investment in immovable property is liable to be deleted since it clearly amounts to double addition. The Assessing Officer is directed to give proper and sufficient opportunity of being heard to the assessee before deciding this issue and the assessee is also directed to make due compliance before the Assessing Officer and extend all the possible co-operation in order to enable the Assessing Officer to decide the issue expeditiously.
In the result, the appeal of the assessee is treated as partly allowed for statistical purposes.
Order pronounced in the Court on 2nd March, 2022 at Ahmedabad. (T.R. SENTHIL KUMAR) VICE-PRESIDENT Ahmedabad, Dated 02/03/2022 *Bt
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)- 5. "वभागीय ""त"न"ध आयकर अपील"य अ"धकरण/DR,ITAT, Ahmedabad, , 6. गाड" फाईल /Guard file.
आदेशानुसार/ BY ORDER,सहायक पंजीकार (Asstt.