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Income Tax Appellate Tribunal, MUMBAI BENCHES “E”, MUMBAI
Before: SHRI B.R.BASKARAN (AM) & SHRI RAM LAL NEGI (JM)
The present appeal has been preferred by the assessee against order dated 24/09/2012 passed by the Ld. CIT(Appeals)-I Mumbai for the Asst. Year 2008-09, whereby the Ld. CIT(A) dismissed the appeal filed by the assessee against assessment order dated 31/12/2010 passed by the Assessing Officer u/s 143(3) of the Income Tax Act, 1961 (in short ‘the Act’).
Brief facts which need necessary mention for the purpose of deciding the issue involved in this appeal are that the assessee an individual add advocate by profession filed her return of income for the A.Y. 2008-09 declaring the total income of Rs. 1,92,779/-. During the course of assessment proceedings, assessing officer noticed that the assessee has made huge cash deposits in her bank account No. 08/92 amounting to Rs. 14,67,450/- and in the account No. 018/514 amounting to Rs. 3,20,000/- maintained with the Gopinath Patil Parsik Janta Sahakari Bank during the year under consideration. Accordingly, the assessee was asked to explain the source and nature of the cash deposits in her bank accounts. In response thereof the assessee submitted a copy of balance sheet. However, the assessee neither appeared before the A.O. nor filed any explanation regarding nature and source of cash deposits despite service of summons/notice issued u/s 131 of the Act. Accordingly, the A.O made inter alia addition of the said amounts to the income of the assessee u/s 68 of the Act, holding the same as unproved credits and passed assessment order u/s 143(3) of the Act determining the total income of the assessee at Rs. 26,24,750/-. The assessment order was challenged by the assessee by filing appeal before the Ld. CIT(A). During the course of appellate proceeding it was contended by the appellant/assessee that the cash deposits of Rs. 17,55,450/ in the bank accounts was received from her clients for purchasing land on their behalf. The actual expenses incurred were withdrawn and the balance amounts were returned back to them. The assessee further contended that she could not give the said explanation before the A.O due to paucity of time. To substantiate her claim the assessee filed confirmation of two persons from whom the money was received. The Ld. CIT(A) admitted the additional evidence under rule 46 of the Income Tax Rules and directed the A.O to verify and furnish a remand report in the matter. In response there of the A.O made necessary verification and submitted remand report. The Ld. CIT(A) after going through the same upheld the findings of the Ld. A.O and dismissed the appeal filed by the assessee.
Feeling aggrieved by the impugned order passed by the Ld. CIT(A), the assessee has challenged the assessment order on the following effective grounds of appeal:-
1) The Ld. CIT(A), has erred in confirming the action of A.O of adding cash deposits of Rs. 17,55,450/- u/s. 68.
2) The Ld. CIT(A) has erred in not passing a speaking order so as to rebut the express findings contained in the remand report.
3). The Ld. CIT(A) has also erred in confirming the action of A.O of adding Rs. 6,76,496/- as undisclosed professional receipts.
Ground No 1 and 2 pertain to confirmation of addition of Rs. 17,55,450/- made by the AO. Before us, the Ld. Counsel for the assessee submitted that the Ld. CIT(A) has wrongly confirmed the action of A.O. The assessee has submitted confirmations from Sh. Bhaskar C Sogir and Sh. Balu P Khambalkar who had handed over Rs. 8,00.000/- and Rs. 10,00,000/- respectively in connection with finalization of land deal on their behalf. AO has also recorded their statements u/s 131 of the Act. That the facts of the cases relied upon by the Ld. CIT(A) are distinguishable from the facts of the present case therefore, the ratio laid down in the said case is not applicable in the present case. The Ld. Counsel placed reliance on the judgment delivered by the Hon’ble Supreme Court, in Dhakeshwari Cotton Mills vs CIT 26 ITR 775(SC) and decisions rendered by the ITAT Mumbai Bench in the case of ITO vs Kumar Metal Industries (1991) 36 ITD 261 (Mum) and the Agra Bench in ITO Vs Laxman Dass Makhija[2009]116 ITD 47(AGRA) to substantiate his contentions. The Ld. Counsel further submitted that since the assessee has discharged the onus of explaining the nature and source of the amount in question, the impugned order is liable to be set aside.
On the other hand the Ld. DR relying on the order passed by the Ld. CIT(A) submitted that the additional evidence produced before the appellate authority was an afterthought attempt to explain the source of cash deposits in the bank account of the assessee. This plea was taken for the first time during the appellate proceedings. Even during the appellate proceedings or remand proceedings the assessee has failed to establish creditworthiness of the persons whose confirmations were placed on record.
We have heard the rival submissions and also perused the documents. Admittedly, neither the assessee raised any plea before the AO nor did she submit any documentary evidence to explain the nature and source of the amount in question, except the copy of balance sheet. The plea that the amount in question was received from her clients in connection with purchase of land on their behalf was introduced for the first time during the appellate proceedings and confirmations from two persons/farmers were submitted before the first appellate authority. During the remand proceeding AO recorded the statements of the said farmers u/s 131 of the Act, in their statements they admitted that they handed over amounts in cash to the assessee in connection with their land deals. The Ld. CIT(A) has rejected the contentions of the assessee holding as under:-
“From the analysis of the statements recorded of the two farmers, who have given an advance of Rs. 18,00,000/- to the appellant in cash, clearly point out to the fact that the story of the advance taken from the farmers for purchase of land is an after though attempt to explain the source of cash deposits in the bank account of the appellant. This is because of the reason that this story was never brought before the Assessing Officer by the appellant despite sufficient opportunities given. The A.O even issued summons u/s 131 to the appellant to adduce evidence to prove the source and nature of the cash deposits in her bank account, but the appellant chose neither to attend nor to prove the source of the credits through any satisfactory explanation. So the appellant lost the chances of proving the source and nature of the cash deposits at the very first opportunity offered to prove the same.”
The Ld. CIT(A) further pointed out that the even during the remand proceedings the appellant only produced the confirmations and the statement of two persons aforesaid, however, failed to prove their creditworthiness and their real intention to purchase some land through appellant/assessee. The Ld. CIT(A) has further relied on the decision rendered by the Delhi Tribunal in M.M.Enterprises vs. ACIT (2007) 12 SOT 372(Del-Trib), and the decision of Mumbai Tribunal in the case of ITO Vs. Kumar Metal Industries (1991) 36 ITD 261 (Bom-Trib).
In ITO vs. Kumar Metal Industries (supra), the Co-ordinate bench of the ITAT has held that where it is not proved that cash credit was actually received by the assessee, though the source as well as capacity of the creditor was proved, it cannot be said that the assessee has proved the genuineness of the cash credit. In the present case the assessee has failed to prove the genuineness of the transaction as well as the creditworthiness of the persons who confirmed the payment of amounts in question. Absence of both the things further creates doubt in the version of the witnesses that the amounts were actually handed by them to the assessee. No evidence was brought on record to prove creditworthiness of the persons who furnished the confirmations. In order to prove genuineness of the transaction the assessee could have produced copy of agreement to sell or any other document, particulars of land and its owners from whom the land was to be purchased or the assessee could have examined the owner(s) of the land with whom the deal was/were going to be finalized. The assessee has no answer as to why the unutilized amount was returned in cash. The assessee could have proved the genuineness of the transaction by bringing on record the efforts made by her in finalizing the alleged deal. The assessee is silent as to why any receipt was not furnished to the intending purchasers of the land against the alleged payment. The assessee has failed to prove any communication with the intending buyers or with the seller(s) from whom the deal was to be finalized. The facts of the cases relied upon by the assessee are distinguishable from the facts of the present case.
In view of the aforesaid facts and circumstances of the case we are of the considered view that the impugned order passed by the Ld. CIT(A) does not suffer from any factual or legal infirmity to interfere with the same. We therefore, uphold the order passed by the Ld. CIT(A) and dismiss this ground of appeal of the assessee being devoid of any merit. So far as ground No 3 of the appeal is concerned, since the assessee has not pressed the said ground, the same is dismissed as not pressed.
10 In the result appeal filed by the assessee for A.Y. 2008-09 is dismissed.
Order pronounced in the open court on 18thNovember, 2016