Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, DELHI “SMC-2” BENCH: NEW DELHI
Before: SHRI KUL BHARAT
ORDER PER KUL BHARAT, JM :
This appeal filed by the assessee for the assessment year 2010-11 is directed against the order of Ld. CIT(A)-32, New Delhi dated 28.10.2019.
The assessee has raised following grounds of appeal:-
I. “That the Income Tax Officer erred in law and on facts to make the addition of Rs.13,00,000/- on the account of treating Cash deposited of Rs.13,00,000/- into Bank Accounts as income from unexplained source u/s 69B of the Income Tax Act, 1961 and CIT (A)-32 was not justified to uphold the order of Income Tax Officer on this Issue.
2. That out of Rs.13,00,000/- cash deposited into Bank account Rs.10,25,000/- was received from farmers for development of land and Rs. 2,75,000/- was out of cash in hand available with appellant as per its books of account.
That Land could not be developed due to unavoidable circumstances and Rs.10,25,000/- were paid in cash to the farmers during the year.
4. That Ld. A.O. and CIT (A) was not justified for not accepting the loss of Rs. 43,525/- from business which the appellant had set off against the income from other sources of Rs.38,599/-. 5. That appellant requested before CIT (A) for filing an application for additional evidence under Rule 46A but CIT (A) did not entertain the application during the appellate proceedings. 6. That neither Ld. A.O. not CIT(A) accepted cash in hand of Rs. 2,75,000/- available in the books of account. 7. That there was no evidence against the appellant for investing of cash. It is intangible addition in the hand of appellant without evidence as such A.O. failed to establish that alleged cash have been invested somewhere. 8. That neither the A.O. nor the CIT(A) considered the debit entries of the Bank Account i.e. the appellant withdrew the cash from Bank to make the payments to farmers due to the failure to develop the land as per their mutual agreement. 9. That Ld. A.O. erred in law and facts of the case in levying Interest u/s 234A & 234B in as much as reasonable and sufficient opportunity before passing the order was not given and CIT (A) was not justified to uphold the Order of Ld. A.O. 10. That Ld. A.O. erred in law and facts of the case for imposing Penalty in as much as reasonable and sufficient opportunity before passing the order was not given and CIT(A) was not justified to uphold the Order of Ld. A.O. 11. The appellant craves leave to add, alter/amend or withdraw herein or add any further ground as may be considered necessary either before or during the hearing.” 2 | P a g e
At the time of hearing, no one appeared on behalf of the assessee. The notice sent through speed post is returned with remark by the Postal Authority “left”. Under these facts and circumstances of the case and as the assessee has not provided any other address, the appeal is taken up for hearing and being disposed off in the absence of the assessee.
3. Ground Nos.1 to 3 are inter-connected and are being disposed off together for the sake of brevity. These grounds are raised against making the addition of Rs.13,00,000/- on account of cash deposits in the bank account of the assessee company.
Facts giving rise to the present appeal are that the Assessing Officer while framing the assessment, noticed that the assessee having Account No.0815113100778 with Oriental Bank of Commerce, depositing cash on 23.10.2009. The assessee was asked to explain the source of cash deposit.
However, no explanation was offered by the assessee before the Assessing Officer. As on the date fixed for hearing, no one attended the proceedings.
Therefore, the Assessing Officer treated the cash deposits as unexplained and added the same in the income of the assessee. The Assessing Officer also made addition of Rs.38,599/- in respect of the interest income received which was not disclosed by the assessee.
Aggrieved against this, the assessee preferred appeal before Ld.CIT(A), who after considering the submissions, dismissed the appeal.
Now, the assessee is in appeal before this Tribunal.
The contention of the assessee before Ld. CIT(A), the assessee had made an application for admission of additional evidences. However, additional evidences so filed, were not considered and the appeal was rejected without considering the evidences so filed.
On behalf of the Revenue, Ld. Sr. DR submitted that the assessee could not substantiate its claim by filing material evidences. Further, he submitted that Ld.CIT(A) has rightly rejected the application as the same did not meet the requirement of law. He submitted that as per Rule 46A of the Income Tax Rules, 1962, the assessee is required to demonstrate the cause of non- submission of evidences that is sought to be placed before Ld.CIT(A) for admission.
I have heard the Ld. Sr. DR and perused the material available on record.
I find that Ld.CIT(A) has decided the issue in para 5.3 to 5.3.6 by observing as under:-
5.3. “Ground 3 &.6 pertain to an addition of Rs.13,00,000/- on account of cash deposit of Rs.13,00,000/- in the bank account of appellant. As per ITS data, AO observed that assessee was having account with Oriental Bank of Commerce bearing a/c no, 08151131000778 and has deposited cash of Rs. 13,00,000/- on 23.10.2009. Since, assessee did not furnish detail regarding source of cash deposited in his bank, Assessing Officer treated the same as unexplained income. During the course of appellate proceedings, appellant has submitted that appellant company is facilitator of real estate company whereby it has agreements with individual land owners to procure-agricultural land measuring 2000 acres in the state of MP. Further. It has been submitted that it has entered into MOU with 4 | P a g e
M/s PACL India Ltd., New Delhi. It has also been submitted that appellant has collected an amount of Rs.10,25,000/- as loan in cash from agriculturists and the balance amount is from cash balance available. 5.3.1. I have carefully considered the observations of AO and submissions of appellant. Appellant has claimed that he has entered into a MOU on 12.10.2009 with M/s PACI, India Ltd. for procuring agricultural land approx, 2000 acre. It has also claimed that it has agreement with individual land owners to procure agricultural land and has collected Rs.10,25,000/- from agriculturists as loan. However, it is not understood as to why the agriculturists will pay cash/loan to appellant who would procure/purchase their land. In my view, the claim of appellant is concocted, bizarre and lacks substance. Further, from perusal of the facts of the case, it is seen that appellant has not moved any application for admission of additional evidence in support of its claim including the reasons as to why the same could not be submitted earlier. Therefore, the copy of agreement with PACL and PAN / Voter ID card of the alleged agriculturists are not admitted as additional evidence. Moreover, during the course of appellate proceedings, appellant was given various opportunities to explain the source of cash deposits in its bank account. However, no details except the voter ID card/PAN has been submitted regarding the claim that the amounts were received from agriculturists. No confirmation has been filed from any of these parties neither any other details regarding the identity of the credit, creditworthiness and genuineness has been submitted. Further, with respect to the claim that amount of Rs.275000/- was cash balance available, it is seen that appellant has also not submitted any evidence in support to the claim that the amount of Rs.2,75,000/- was on account of cash balance available with it. Therefore, the onus cast on the Appellant has not been discharged.
5.3.2. As such, it is apparent that Appellant has not explained the nature and source of the case deposits in its bank account. Onus is on the Assessee to explain the same which has not been discharged. Hon’ble Punjab & Haryana High Court in the case of Sudhir Kumar Sharma (HUF) vs CIT 46 taxman.com 340 (P&H) have held that addition u/s 68 on account of cash deposited in bank was correct when Assessee failed to give explanation regarding the source of cash. In the case of Appellant, it is seen that no details of any of the parties from whom it claims to have received the cash along with confirmation and other details to establish the identity, creditworthiness and genuineness of the transaction has been submitted. Therefore, in view of the facts and circumstances of the case, it is held that Appellant has not been able to explain the source of cash deposits in its bank account. Therefore, I find no basis to interfere in the order of Assessing Officer. Accordingly, disallowance of Rs.13,00,000/- is sustained. As a result, ground no.3 & 6 are dismissed. 5.4. Ground no.4 pertains to initiation of penalty proceedings u/s 271(1)(c) of the Act. This ground is pre-mature at this stage and hence no adjudication is required. 5.5. Ground No.5 pertains to charging of interest u/s 234A & 234B and hence consequential.”
The above finding on fact is not rebutted by the assessee by placing any contrary material on record. Therefore, I do not see any reason to interfere in the finding of the order of Ld.CIT(A), the same is hereby affirmed. Thus, Ground Nos. 1 to 3 raised by the assessee are rejected.
Ground No.4 is against not accepting the loss of Rs.43,525/- from business.
Ld. Sr. DR submitted that the assessee has not filed original return of income therefore, the authorities below were justified in not allowing the business loss.
I have heard the Ld. Sr. DR and perused the material available on record.
The assessee has neither given any justification regarding loss nor filed any supporting evidences. Therefore, I do not see any reason to interfere in the finding of authorities below, the same is hereby affirmed.
Ground No.5 raised by the assessee is against not admitting the additional evidences.
Ld. Sr. DR pointed out that the assessee has not given any reason as to how evidence is sought to be admitted, were not available or he was precluded before filing the same before the Assessing Officer. He submitted that the application seeking additional evidences, cannot be allowed automatically, it has to be in accordance with Rule 46A of the Income tax Rules, 1962.
I have heard the Ld. Sr. DR and perused the material available on record.
The assessee has not substantiated as to how the application for filing additional evidence was maintainable as per Rules. In the absence of the same, I do not see any reason to interfere in the finding of Ld. CIT(A). This ground of appeal is thus, dismissed.
17. Ground Nos. 6 & 7 raised by the assessee are against the failure to accept cash in hand of Rs.2,75,000/-.
18. Ld. Sr. DR opposed the grounds of the assessee and supported the orders of the authorities below. He submitted that the assessee grossly failed to furnish supporting evidences qua the cash in hand.
I have heard the Ld. Sr. DR and perused the material available on record.
In the absence of any supporting evidences and in the form of cash flow etc., the plea of the assessee cannot be accepted that it had cash in hand. Hence, we find no interference in the finding of authorities below, the same is hereby affirmed. Thus, Ground Nos.6 & 7 raised by the assessee are dismissed.
Ground No.8 raised by the assessee is against the debit entries of the bank account i.e. the assessee withdrew the cash from bank to make the payments to the farmers.
Ld. Sr. DR supported the orders of the authorities below and submitted that the assessee has not substantiated its claim.
I have heard the Ld. Sr. DR and perused the material available on record.
I am of the considered view that the onus was upon the assessee to explain the debit and credit entries in the bank accounts. In the absence of supporting evidences, I do not see any infirmity in the order of authorities below, the same is thereby affirmed.
Ground No.9 raised by the assessee is against the alleged charging of interest u/s 234A & 234B of the Act, the same being consequential in nature hence, rejected.
Ground No.10 raised by the assessee is against non-providing the sufficient opportunity to the assessee. It is seen that the assessee has been negligent in not pursuing its case before the authorities below. Even before the Assessing Officer and after seeking adjournment, no one attended the proceedings. Therefore, the assessment was framed ex-parte to the assessee.
Even before Ld.CIT(A), there was no appearance on behalf of the assessee. Even before this Tribunal, there was no appearance on behalf of the assessee. Hence, the conduct of the assessee had been grossly negligent.
Under these facts, the authorities below were justified in making the addition and sustaining the same. Ground No.10 hence, is devoid of any merit, the same is dismissed.
Ground No.11 is general in nature, needs no separate adjudication.
In the result, the appeal of the assessee is dismissed.
Above decision was pronounced on conclusion of Virtual Hearing in the presence of both the parties on 23rd November, 2021.