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Income Tax Appellate Tribunal, JAIPUR BENCHES, ‘’SMC” JAIPUR
Before: SHRI SANDEEP GOSAIN, JM & SHRI RATHOD KAMLESH JAYANTBHAI, AM vk;dj vihy la-@ITA No. 1245/JP/2019
ORDER PER: SANDEEP GOSAIN, JM This appeal filed by the assessee is directed against order of the ld. CIT(A), Ajmer dated 20-08-2019 for the assessment year 2011-12 wherein the assessee has raised the following grounds of appeal. “1. That on the facts and circumstances of the case, the notice issued under section 148 by the Ld. AO is bad in law for various reasons and prayed for being quashed.
2. That on the facts and circumstances of the case, the Ld. AO erred in reopening the assessment without having jurisdiction and also without 2 ITA1245/JP/2019 SHRI BANWARI LAL AGARWAL VS ITO, WARD 2, KISHANGARH having any reasons to believe as on the date of issue of notice U/s 147/148 that income has escaped assessment. The assessment in pursuance of same is thus prayed for being quashed.
3. On the facts and circumstances of the case, the Ld. AO erred in reopening the assessment without obtaining appreciate sanction as provided u/s 151 of the Act and thus assessment in pursuance of same is prayed for being declared void ab initio.
4. On the facts and circumstances of the case, the Ld. CIT(A) erred in confirming the action of Ld. AO of making addition in hands of assessee of an income which does not belong to the assessee at all ignoring the facts and circumstances of the case. Such an addition is invalid and hence prayed for being deleted.
5. That on the facts and circumstances of the case, the Ld. AO erred in concluding the assessment without making proper inquiries in the matter and thus arbitrarily. Such an arbitrary assessment is thus prayed for being quashed.
6. On the facts and circumstances of the case, the Ld. CIT(A) erred in confirming the action of Ld. AO of addition in hands of assessee ignoring the fact that assessee was not indulged in any business activities and had no source from which such huge receipts can be obtained by him. Such an invalid and arbitrary addition is thus prayed for being deleted.
7. On the facts and circumstances of the case and without prejudice to other grounds of appeal, the Ld. CIT(A) had erred in confirming the action of Ld. AO of assessing the income of assessee at Rs. 45,62,075.00 which is in alternate excessive and unjustified. It is hereby prayed for reducing the addition thus made.
3 ITA1245/JP/2019 SHRI BANWARI LAL AGARWAL VS ITO, WARD 2, KISHANGARH 8. The appellant hereby craves leave to add, alter, amend or substitute one or more grounds of appeal at the time of hearing.”
2.1 On the date of hearing, none appeared on behalf of the assessee when the case was called out for hearing. 2.2 The ld. DR attended the case and relied upon the ITAT Jaipur Bench order dated 13-10-2020 already made in the case of the assessee. 2.3 The Bench has heard the ld. DR , perused the order of the ld. CIT(A) and also the order of ITAT Jaipur Bench dated 13-10-2020 passed in the case of the assessee. The Bench noted that against the order of ITAT, Jaipur Bench dated 13- 10-2020, the assessee had filed the Misc. Application No. 15/JP/2021 which was allowed by the Coordinate Bench dated 13-06-2022 by observing as under:- ‘’6. We therefore find that the assessee deserves one more opportunity whereby he can be heard on merits of his case. Accordingly, in the interest of justice, the consolidate order so passed by Coordinate Bench is hereby recalled for providing personal opportunity to the assessee to be heard on merits of the case. The assessee is also directed to seek any adjournment in the matter except with the leave of the Bench on showing reasonable cause. In the result, Miscellaneous application so filed by the assessee are allowed and disposed off in light of aforesaid discussion.’’ 2.4 Now the case of the assessee is fixed for hearing on 14-02-2023 but none appeared on the date of hearing. It appears that the assessee is not interested to 4 ITA1245/JP/2019 SHRI BANWARI LAL AGARWAL VS ITO, WARD 2, KISHANGARH pursue his case. Therefore, the Bench has no other option except to re-confirm its order dated 13-10-2020 passed in the case of the assessee. The relevant paras of its order dated 13-10-2020 are reproduced as under:- ‘’2. None has appeared on behalf of the assessee when this appeal was called for hearing despite the fact that the hearing was adjourned for today i.e. 12.10.2020 at the request of the assessee. Therefore, in the facts and circumstances of the case I propose to hear and dispose off of this appeal ex-parte. The only issue arises in this appeal is regarding addition of Rs. 44,59,430/- was made by the AO on account of commission income for providing accommodation entries of marble sales.
The ld. DR has submitted that the assessee being a proprietor of two proprietary concerns M/s Dangerous Marble Suppliers and M/s Herbal Marble has not filed any return of income U/s 139(1) of the Income Tax Act. The AO received information regarding deposit of Rs. 4,56,20,758/- in the bank account of the assessee during the year under consideration. The said transactions of deposits in the bank account of the assessee was detected during the inquiry conducted by the DDIT(Inv)-II Udaipur and the assessee accepted the fact in his statement recorded on 21.12.2018 U/s 131 of the Act. The ld DR has referred to the assessment order wherein the AO has reproduced the statement of the assessee recorded U/s 131 of the Act. Thus, the ld. DR has submitted that the assessee has accepted the fact of deposit of cash in his bank account however, he has claimed that the assessee has not carried out any transaction of purchase or sale of marble but he has provided bogus accommodation entries to various persons who have deposited cash the account of the assessee. The assessee has also accepted the income on account of commission for providing these accommodation entries. The ld. DR has pointed out that the AO as well as ld. CIT(A) followed the decision of this Tribunal as well as Hon’ble High Court in case of Smt Aanita Choudhari wherein the income @ 10% of the total deposit was upheld. She has relied upon the orders of the authorities below.
Having considered the submissions of the ld. DR and careful perusal of the orders of the authorities below it is noted that 5 ITA1245/JP/2019 SHRI BANWARI LAL AGARWAL VS ITO, WARD 2, KISHANGARH the assessee has not disputed the fact of deposit of more than 4.56 crores in his bank account. The assessee is also having two proprietorship concerns from where the assessee has admitted to have issued bills regarding bogus accommodation entries of sale. The Department has accepted this explanation of the assessee that the amount deposited in the bank account of the assessee is on account of bogus accommodation sale entries provided by the assessee to various parties and the assessee has earned only commission income on such deposit. The AO after considering the statement of the assessee U/s 131 has held as under:- “From the above statements it is clear that the assessee has completely failed to prove that the cash deposits were not pertaining to him and were pertaining to different marble traders of Kishangarh. The assessee has failed to discharge the onus laid upon him as he has no documentary evidence in support of his statements. Therefore, cash deposits in the bank accounts of the assessee are treated as his own cash. In view of above discussed facts of the case and relying upon the decision of Hon’ble Bench of ITAT, Jaipur in case of Smt Anital Choudhary in dated 07.05.2010 which was confirmed by Hon’ble Rajasthan High Court in DBITA No. 289/2010 dated 14.10.2011 income of the assessee for the year under consideration is assessed at Rs. 45,62,075/- which is 10% of the total deposits in the bank account of the assessee i.e. Rs. 4,56,20,758/-. Accordingly difference amount of Rs. 44,59,428/- is added to the income of the assessee (Rs. 44,59,075-Rs. 1,02,647/-).” The assessee challenged the orders of the AO before the ld. CIT(A) and disputed only percentage of commission. The ld. CIT(A) has confirmed the addition made by the AO in para 5.3 is as under:-
6 ITA1245/JP/2019 SHRI BANWARI LAL AGARWAL VS ITO, WARD 2, KISHANGARH “5.3 I have gone through the assessment order, statement of facts, grounds of appeal, written submission, remand report and rejoinder carefully. It is seen that the bank account was in the name of the appellant. The appellant could not furnish any documentary evidence of show that his bank account was used by other persons. The AO in the assessment order has given detailed reason for not accepting the contention of the appellant that his bank account was used by other persons. The AP has been very reasonable in estimating the net profit only at the rate of 10% of the total cash deposits relying on the decision of jurisdictional ITAT and High Court in the case of Smt Anita Choudhary. Therefore, I am of the considered view that the addition of Rs. 45,62,075/- made by the AO is fully justified and as per the provisions of law. Accordingly, the addition of Rs. 45,62,075/- made by the AO is hereby confirmed.” Thus, both the AO as well as the ld. CIT(A) has applied 10% of the total cash deposit as commission income of the assessee by following the decision of this Tribunal in case of Smt. Anita Choudhary in which was upheld by the Hon’ble High Court vide decision dated 14.10.20111 in DBITA No. 289/2010. In the absence of any contrary material the impugned order of the ld. CIT(A) following judgment the jurisdiction High Court is upheld. In the result, the appeal of the assessee is dismissed. ‘’ Since neither the assessee appeared nor controverted the factual findings recorded by Revenue Authorities on the date of hearing nor any contrary material was provided against the order of the ld. CIT(A) or ITAT, Jaipur Bench dated 13-10- 2020, therefore, the Bench has no other option except to re-confirm its order dated 13-10-2020. Thus the appeal of the assessee is dismissed.
7 ITA1245/JP/2019 SHRI BANWARI LAL AGARWAL VS ITO, WARD 2, KISHANGARH 3.0 In the result, the appeal of the assessee is dismissed. Order pronounced in the open court on 28/02/2023.