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Income Tax Appellate Tribunal, NAGPUR BENCH, NAGPUR
Before: SHRI V. DURGA RAO & SHRI K.M. ROY, ACCOUNTANT, MEMBER
Date of Hearing – 05/08/2024 Date of Order – 08/08/2024
O R D E R PER V. DURGA RAO, J.M.
The present appeals have been filed by the Revenue challenging the impugned orders of even date 29/03/2023, passed by the learned Commissioner of Income Tax (Appeals)–3, Nagpur, [“learned CIT(A)”], for the assessment year 2018–19 and 2019–20.
Shri Ramakant Govindrao Mendhe ITA no.162–163/Nag./2023
2. When the case was called for hearing, neither the assessee respondent nor any of its authorised representatives appeared before us to assist the Bench and argue the matter. There is no application for adjournment either. However, the Bench was of the opinion to dispose off the matter in the absence of the assessee respondent after hearing the learned Departmental Representative and on the basis of material available on record.
Since both these appeals pertain to the same assessee involving common issues arising out of identical set of facts and circumstances, except variation in figures, therefore, as a matter of convenience, these appeals were heard together and are being disposed off by way of this consolidated order. However, in order to understand the implication, it would be necessary to take note of the facts of one appeal. We are, accordingly, narrating the facts, as they appear in the appeal in ITA no.162/Nag./2023, for assessment year 2018–19. The findings / decisions of this appeal will mutatis mutandis apply to the other appeal as well. ./2023 Revenue’s Appeal – A.Y. 2018–19
3. In its appeal, the Revenue has raised following grounds:– “1. On the fact and in the circumstances of the case, Ld. CIT(A) has erred in deleting the addition of Rs.51,70,000/- on account of unexplained expenditure u/s 69C of I.T. Act and addition of Rs.18,58,555/- on account of undisclosed income u/s 69A of I.T. Act, which were added by the AO based on the impounded documents, considering importance and value of noting made in the documents.
2. On the fact and in the circumstances of the case, Ld. CIT(A) has erred in deleting the addition of Rs.51,70,000/- on account of unexplained expenditure u/s 69C of I.T. Act and addition of Rs.18,58,555/- on account of undisclosed income ignoring the fact that the assessee was failed to explain the Page | 2
Shri Ramakant Govindrao Mendhe ITA no.162–163/Nag./2023 transaction recorded in the impounded documents, as such the order was completed u/s 144 of the I.T. Act.
On the fact and in the circumstances of the case, Ld. CIT(A) failed to appreciate the facts that due to the survey conducted at the premise of M/s Tirupati Developers, the huge transaction of Rs.51,70,000/- an Rs.18,58,555/- in respect of the assessee unearthed, which otherwise would have escaped assessment, as such the Ld. CIT(A) has erred in deleting the addition made by the AO on the basis of impounded material.
4. Any other grounds that may be raised during the appellate proceedings.”
Facts in Brief:– A survey action under section 133A of the Income Tax Act, 1961 ("the Act") was conducted at the business premises of M/s. Tirupati Developers. During the survey proceedings many incriminating documents related to the assessee were found and impounded. It was ascertained that the assessee has entered into cash transaction which was given to M/s. Tirupati Dvelopers, and the assessee is a beneficiary of cash related transaction during the previous year relevant to assessment year under consideration. For the year under consideration, the assessee filed his original return of income on 24/07/2018, declaring total income of ` 3,18,980. In response to notice under section 148 of the Act, which was issued on 17/02/2021, the assessee did not comply it, hence notice under section 142(1) of the Act was issued on 10/03/2021. However, no compliance was made from the assessee. Subsequently, notice under section 142(1) of the Act was also issued on 02/12/2021, 17/12/2021, 28/12/2021 and 10/02/2022. Again there was no compliance from the assessee. The Assessing Officer made assessment under section 147 r/w section 144 of the Act on 24/03/2022, determining total assessed income at ` 73,47,535, after making addition of ` 51,70,000, as unexplained expenditure under section 69C and ` 18,58,555, as undisclosed income under section 69A of the Act. Page | 3
Shri Ramakant Govindrao Mendhe ITA no.162–163/Nag./2023
When the matter was carried before the first appellate authority, the learned CIT(A) deleted the addition of ` 51,70,000, on account of unexplained expenditure under section 69C of the Act as well the addition of ` 18,58,555, on account of undisclosed income under section 69A of the Act. The observations of the learned CIT(A) are as follows:–
“The grounds no. 3 & 4 are regarding addition of Rs. 51,70,000/- on account of unexplained expenditure u/s 69C of the Act and Rs. 18,58,555/- on account of undisclosed income u/s 69A of the Act respectively. I have carefully perused the assessment order of the AO and the submission made by the appellant. The legal representative of the assessee is a house wife. She does not know anything about the transaction made by the appellant, as the appellant was not discussing the business transactions with her. The assessee was suffering from ill health from past few months before his demise because of which he couldn't reply at the time of assessment proceeding. Due to his ill health the assessee could not make the compliance against the notices issued u/s 148 & 142(1) of the Income Tax Act, 1961. The addition to total income of Rs. 51,70,000/- was made on account of loose paper/register wherein amount paid in cash has been framed as undisclosed income u/s 69C as per Para 8 of Assessment Order. The Assessing Officer had made addition to the income of the assessee on the basis of loose papers which are not supported by any evidence. The documents found were neither written by the appellant nor it was signed by the appellant. The appellant has relied on the judgement of ITAT New Delhi in the case of Atul Gupta, New Delhi vs Department of Income Tax where it was held that "The revenue could not establish that Atul noted in this diary is as Atul Kumar Gupta i.e. the assessee. Neither the diary was found from the premises of the assessee nor it is in the handwriting of the assessee, any third person may right the name of any person at his sweet will then an assessee cannot be burdened with liability on the basis of such writing. Further the appellant has made various judicial references in his submission regarding addition made u/s 69C. In view of the above facts and circumstances and the judicial references quoted by the appellant I am of the opinion that the addition made by the AO of Rs. 51,70,000/- on account of unexplained expenditure u/s 69C of the Act is unjustified and deserves to be deleted. Hence ground no.3 is allowed. Further the AO has made the addition of Rs.18,58,555/ on account of undisclosed income u/s 69A of the Act, on the basis of the documents impounded during the survey proceedings. The documents found were neither written by the appellant nor was it signed by the appellant. The evidence found on record is not sufficient to support the income earned by the appellant. The appellant has relied on the case law of Nagarjuna Construction Company vs Department of Income Tax on 9 February, 2012 IN THE INCOME Page | 4
Shri Ramakant Govindrao Mendhe ITA no.162–163/Nag./2023
TAX APPELLATE TRIBUNAL, Hyderabad. Further the appellant has made various judicial references in his submission regarding addition made u/s 69A. In view of the above facts and circumstances and the judicial references quoted by the appellant I am of the opinion that the additions made by the AO of Rs.18,58,555/– on account of undisclosed income u/s 69A is unjustified and deserves to be deleted. Hence ground no 4 is allowed.”
None appeared on behalf of the assessee respondent.
The learned Departmental Representative supported the order of the learned CIT(A).
Having heard the learned Departmental Representative and on a perusal of the material available on record, we find that the impugned order passed by the learned CIT(A) is not a speaking and reasoned order and the same is issued without assigning any cogent reason. The learned CIT(A) ought to have required to consider the entire matter in the light of the right perspective and then to pass a speaking and well–reasoned order to decide the grievance of the assessee, which is totally missing in the in the order passed by the learned CIT(A). Simply allowing the claims of the assessee without giving any cogent reason is not enough to pass a speaking order. Considering this aspect that the learned CIT(A) has not passed speaking or reasoned order and seen the order from any angle, the impugned order cannot legally be sustained. Accordingly, we reverse the impugned order passed by the learned CIT(A) by allowing the grounds of appeal raised by the Revenue.
In the result, appeal filed by the Revenue for the assessment year 2018–19 is allowed.
Shri Ramakant Govindrao Mendhe ITA no.162–163/Nag./2023 ./2023 Revenue’s Appeal – A.Y. 2019–20
In its appeal, the Revenue has raised following grounds:– “1. On the fact and in the circumstances of the case, Ld. CIT(A) has erred in deleting the addition of Rs.81,31,000/- on account of unexplained expenditure u/s 69C of I.T. Act and addition of Rs.30,82,000/- on account of undisclosed income u/s 69A of I. T. Act, which were added by the AO based on the impounded documents, considering importance and value of noting made in the documents.
2. On the fact and in the circumstances of the case, Ld. CIT(A) has erred in deleting the addition of Rs.81,31,000/- on account of unexplained expenditure u/s 69C of I.T. Act and addition of Rs.30,82,000/- on account of undisclosed income ignoring the fact that the assessee was failed to explain the transaction recorded in the impounded documents, as such the order was completed u/s 144 of the I.T. Act.
3. On the fact and in the circumstances of the case, Ld. CIT(A) failed to appreciate the facts that due to the survey conducted at the premise of M/ Tirupati Developers, the huge transaction of Rs.81,31,000/- an Rs.30,82,000/- in respect of the assessee unearthed, which otherwise would have escaped assessment, as such the Ld. CIT(A) has erred in deleting the addition made by the AO on the basis of impounded material.
4. On the fact and in the circumstances of the case, Ld. CIT(A) failed to appreciate the fact that the identity, creditworthiness & genuineness and the actual transaction of the business of the assessee, the onus of the same lies on the legal heir of the assessee.
5. Any other grounds that may be raised during the appellate proceedings.”
After haring both the parties and on a perusal of the material available on record, we find that identical issue has been raised by the assessee in its appeal being ITA no.162/Nag./2023, for the assessment year 2018–19, wherein, vide ground no.1, 2 and 3, we have decided this issue in favour of the Revenue and against the assessee in Para–8, of this order. Since the issue for our adjudication being identical, except variation in figures, cconsistent with the view taken therein in Revenue’s appeal cited supra and Shri Ramakant Govindrao Mendhe ITA no.162–163/Nag./2023 following the findings given therein, we reverse the order passed by the learned CIT(A) and allow the grounds of appeal raised by the Revenue.
In the result, appeal filed by the Revenue for the A.Y. 2019–20 is allowed.
To sum up, both the appeals filed by the Revenue are allowed. Order pronounced in the open Court on 08/08/2024