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Before: Shri Duvvuru RL Reddy & Shri D.S. Sunder Singh
O R D E R
PER DUVVURU RL REDDY, JUDICIAL MEMBER:
Both the cross appeals filed by the assessee as well as the Revenue are directed against the order of the ld. Commissioner of Income Tax (Appeals) 3, Coimbatore dated 30.12.2015, wherein, the assessee has challenged with regard to the confirmation of additions of (i) unexplained investment in land of ₹.12,35,579/- and (ii) suppression of interest of ₹.6,89,271/-, whereas, the Revenue has challenged with regard to deletion of addition of ₹.65,69,350/- on account of unexplained sources for cash deposits by the assessee in various bank accounts.
Brief facts of the case are that the assessee has filed his return of income on 13.12.2011 admitting a total income of ₹.1,56,360/-. The return filed by the assessee was processed under section 143(1) of the Income Tax Act, 1961[“Act” in short]. Subsequently, the case of the assessee was selected for scrutiny and notice under section 143(2) of the Act was issued and duly served on the assessee on 04.08.2012. Since the assessee has not complied with this notice, notice under section 142(1) of the Act was issued on various dates for which also the assessee has neither appeared nor furnished any details. Since the assessee has not complied with the notices issued under section 142(1) of the Act, penalty proceedings under section 271(1)(b) of the Act was initiated and a sum of ₹.10,000/- per notice has also been levied. Meanwhile, the Department has obtained details from the banks and other agencies. As the assessee has failed to response to all the notices issued, summon under section 131 of the Act was issued and the sworn statement was recorded from him on 10.01.2014. In the sworn statement, the assessee has deposed with respect to the source for the cash deposits in UCO Bank that he had obtained a jewel loan of ₹. 10 lakhs from IOB, main branch, Erode and also from Indian Bank, Erode and also assured to submit all the details positively on 16.01.2014. However, the assessee has failed to submit any details till finalization of the assessment proceedings. The Assessing Officer has also noted that the assessee has not maintained nay books of account. After gathering details from the bank, Registration Department and the details deposed in the sworn statement, the Assessing Officer has completed the assessment under section 143(3) of the Act on 31.01.2014 assessing total income of the assessee at ₹.87,19,360/- by making addition on account of unexplained source for the cash deposit of ₹.65,69,350/-, unexplained investments in land at ₹.12,35,579/-, suppression of capital gains at ₹.3,50,000/- and suppression of interest at ₹.6,89,271/-.
Against the above additions, the assessee carried the matter in appeal before the ld. CIT(A). During the course of appellate proceedings, the AR of the assessee has produced additional evidence for the above investments and the same was sent to the Assessing Officer for comments as required under Rule 46A of the IT Rules. After considering the details filed by the assessee, the ld. CIT(A) deleted the addition made on account of unexplained investment of ₹.65,69,350/-, against which the Revenue is in appeal before the Tribunal. With regard to unexplained investment in land of ₹.12,35,579/-, the assessee has not explained the source for purchase of land satisfactorily, the ld. CIT(A) confirmed the addition made on this account. With regard to suppression of interest, the ld. CIT(A) has observed that the suppression of interest was reasonably estimated at 12% on the amount lent in finance business, which was not rebutted with any cogent evidence, the ld. CIT(A) confirmed the addition of ₹.6,89,277/- made on this account. Against the confirmation of both the additions, the assessee is in appeal before the Tribunal.
We have heard both sides, perused the materials available on record and gone through the orders of authorities below. With regard to the addition in respect of unexplained source for cash deposit of ₹.65,69,350/-, prima facie, at page No.2 of the assessment order, the Assessing Officer has observed that “It is also seen that the assessee has not maintained any books of account”. Further, the assessee has not filed any details before the Assessing Officer. However, in the appellate order, at para 6.1, the ld. CIT(A) has gave a contrary findings that entries in the bank account with UCO Bank, Indian Overseas Bank, Indian Bank are reflected in the books of accounts of the assessee and the entries are reflected in the cash book and ledger and the same have been verified. In para 6.0, the ld. CIT(A) has stated that the additional evidence for the investments has been sent to the Assessing Officer for comments as required under Rule 46A of the IT Rules.
But, no details of additional evidence filed by the assessee was available in the appellate order and also what was given in the remand report by the Assessing Officer with regard to the additions has also not been discussed in the appellate order. Moreover, the assessee has not filed any details before the Tribunal, which was stated to have been filed before the ld. CIT(A). Despite service of various notices under section 143(2)/142(1) of the Act, the assessee has not explained as to what prevented the assessee not to file the books of accounts, cash book, ledger, etc. before the Assessing Officer. Under these facts and circumstances, we remit the matter back to the file of the Assessing Officer to verify the details as was filed by the assessee before the ld. CIT(A) and decide the issue afresh in accordance with law after allowing opportunity of hearing to the assessee. Thus, the ground raised by the Revenue is allowed for statistical purposes.
With regard to confirmation of additions in respect of unexplained investment in land at ₹.12,35,579/-, the ld. Counsel for the assessee has pleaded for deletion of addition with regard to unexplained investment in land without explaining the source for purchase of the land. Since the assessee has not filed any details with regard to the source and explained satisfactorily, the ld. CIT(A) confirmed the addition. Before the Tribunal also, the assessee has not filed any details or any written submission with regard to this addition. In view of the above, we find no reason to interfere with the order passed by the ld. CIT(A) and accordingly, the ground raised by the assessee is dismissed.
As regards addition for suppression of interest, the Assessing Officer has estimated at 12% on the amount lent in finance business. The ld. CIT(A) has observed that the estimation is reasonable and the assessee has not rebutted the estimation with any cogent evidence and accordingly he confirmed the addition made on this account. Before the Tribunal also, the assessee has not rebutted the estimation with any cogent material or filed any written submission to take a different view. Thus, the addition confirmed by the ld. CIT(A) stands sustained and the ground raised by the assessee is dismissed.
In the result, the appeal filed by the Revenue is allowed for statistical purposes and the appeal filed by the assessee is dismissed. Order pronounced on the 09th June, 2017 at Chennai.