SANDIP SALVE,THANE vs. ITO 16(3)(1), MUMBAI

We would like to mention that at the time when the case was called for hearing before the Bench neither the assessee nor his authorized representative was present to attend the hearing nor any letter of adjournment was filed. The case of the assessee was fixed on 30th May, 2017 and thereafter adjournment to 29.09.2017, 06.12.2017. On 06.12.2017 hearing was finally fixed for 07.05.2018. On the said date even there was no one to represent the assessee during the hearing. We, therefore, deciding the appeal after considering the merits of the case and after hearing the Ld. DR.

The only issue raised by the assessee against the confirmation of addition of Rs.2,76,16,387/- in AY 2005-06 and Rs. 1,05,21,643/- in AY 2006-07 by CIT(A) as made by the AO by treating the full amount received from the cheque discounting business as income of the appellant by way of unexplained credit. The brief facts of the case are that the AO received information from DCP, ACB, Mumbai regarding huge deposits of cash in Kallppanna Awade Ichalkaranji Janta Sehkari. During the investigation, the Anti-Corruption Bureau, Mumbai, it was found that there are several bank accounts opened which were of suspicious nature intended for diversion of funds and one such account belonged to the assessee. Thereafter the case of the assessee was selected for scrutiny and accordingly notice u/s 148 of the Act was issued along with notices u/s 143 (2) and 142 (1) of the Act and served upon the assessee. Several notices and date of hearings remained unattended. In the final show cause, the assessee submitted that the cash book and bank summary for the period since from 1st April 2004 to 31st March, 2005. Thereafter, the assessee given an opportunity to explain credit in the bank account no. 333 to the tune of Rs. 2,76,16,387/-. However, the assessee failed to respond the said notice. Thereafter the same was issued u/s 131 of the I.T. Act dated 08.03.2013 which was complied with by the assessee by personally attending on the said date. However, the assessee failed to give any details as from whom and to whom the cheques received or given. Thereafter the statement of the assessee was recorded which is reproduced by the AO in the assessment order. Finally, the amounts credited in the said bank were treated as unexplained credits and added to the income of the assessee.

In the appellate proceedings, CIT (A) confirmed the order of the AO by observing that the normal pattern transactions in the said bank account is not proportionate to the returned income and also that the transactions are in variance to normal patterns of cheques transactions in the discounting business. The CIT (A) further noted that the assessee could not explain the names and address to whom the cheques were issued and sources from which cheques/ cash were received and deposited in the bank. Ultimately the appeal of the assessee was dismissed with these observations.

After hearing the Ld. DR and perused the material on record including the impugned order we observe that the pattern of transactions in the bank account was suspicious in nature and the assessee could not produce before the authorities below the necessary details as to names and addresses of the parties from whom the money was received and to whom cheques were issued. We find that the Ld.CIT (A) has passed the order only after considering the material of the records and after taking into account the contentions and defenses as put up by the assessee and only then the appeal of the assessee was dismissed. Now, there is no material/evidences are before us to take a contrary view than that of the First Appellate Authority. Accordingly the appeal of the assessee is dismissed by upholding the order of CIT(A).

In the result, both the appeals filed by the assessee are dismissed. Order pronounced in the open court on 24.07.2018.