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Income Tax Appellate Tribunal, RAJKOT BENCH, RAJKOT
Before: Shri Waseem Ahmed & Shri Siddhartha Nautiyal
आदेश/ORDER PER : SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER:-
This assessee’s appeal for A.Y. 2013-14, arises from order of the CIT(A)-2, Rajkot dated 12-01-2018, in proceedings under section 250 of the Income Tax Act, 1961; in short “the Act”.
Page No 2 Vashram Savabhai Sindhav vs. ITO
The assessee has raised the following grounds of appeal:-
“1. The grounds of appeal mentioned hereunder are without prejudice to one another:
2. The learned Commissioner of Income Tax (Appeals)-2, Rajkot [hereinafter referred to as the “CIT(A)”] erred on facts as also in law in confirming addition of Rs. 44,49, 880/- made u/s. 69 of the Act being investment made in agricultural land at Kuvadava. The addition may kindly be deleted. 3.0 Your Honor's appellant craves leave to add, amend, alter, or withdraw any or more grounds of appeal on or before the hearing of appeal.”
3. On merits, the facts of the case are that during the year under consideration, the assessee has shown income from job work of silver and agricultural income. During the year, the assessee had purchased a piece of agricultural land at Kuvada for an amount of � 1,16,86,000/- along with Smt. Savitaben and Smt. Bhartiben. The assessee’s share comes to � 44,49,880/- (including stamp duty and registration). During the course of assessment, the AO asked the assessee to explain the source of investment. The Ld. Assessing Officer observed from the records that in the immediately preceding assessment year 2012-13, the assessee has shown agricultural income of � 2.80 lakhs only whereas during the impugned assessment year 2013-14, the assessee has shown agricultural income of 20.04 lakhs, which as per the AO was both doubtful and intriguing. The AO further observed that in the original return of income filed on 26-01-2014, the assessee had Page No 3 Vashram Savabhai Sindhav vs. ITO shown unsecured loan of � 33 lakhs and fixed assets of � 68.45 lakhs, whereas in the revised return filed by the assessee on 31-03-2015, the assessee has shown unsecured loan of � � 28 lakhs and fixed assets of 63.51 lakhs. The assessee was asked to produce details of all unsecured loans but the assessee was unable to produce any details during the course of assessment proceedings. This fact shows that the assessee had filed revised return of income only after the case was selected for scrutiny and the AO was seized of the matter. Regarding the sale of agricultural produce to M/s Vaibhav Cotton, the AO observed that the assessee produced four bills from M/s Vaibhav Cotton in a single date i.e. 12-04-2012 and hence the sale bills produced by the assessee are clearly not genuine. Accordingly, notice under section 133 (6) was issued to M/s Vaibhav Cotton, which remained uncompiled with since M/s Vaibhav Cotton did not respond to the aforesaid notices issued by the Ld. Assessing Officer. Therefore, the assessee was requested to produce books of accounts, but the assessee failed to produce the same as well. Further, the AO observed that the assessee had not incurred any agricultural expenses as well during the year under consideration. Accordingly, the AO held that from the facts of the case, it is evident that the assessee has shown agricultural income and unsecured loan in order to cover up the investment in property. Accordingly, in the instant facts, the AO held that the investment in property amounting to � 44,49,880/- as unexplained and unaccounted investment under section 69 of the Act and added the same to the total income of the assessee.
In appeal before Ld. CIT(Appeals), he dismissed the appeal of the assessee with the following observations:
Page No 4 Vashram Savabhai Sindhav vs. ITO
“3.2.3 Decision Having considered facts and circumstances of the case and rival contentions, I find that the assessed had not disclosed the impugned property purchase in the return of income. When faced with inquiries by the ITO (I&CI) the assessee did not explain the source of purchase of the property. Before the Assessing Officer also, the assessee did not furnish any explanation. He did not respond to the show cause notices issued by Assessing Officer, However the assessee showed agricultural income of 20,04,177/- in the revised return of income. The Assessing Officer has very cogently brought out that assessee had agricultural income of Rs. 2,80,640/- in AY 2011-12 that agricultural income shown in revised return was unreasonably high and was not proved genuine with any evidence.
It is noteworthy that the agricultural income credited in the revised return of income at Rs. 20,04,177/- was exactly equal to sale bill in name of Vaibhav Cotton Company. No expenses from this said receipt were deducted towards agricultural expenses. Notices issued u/s 133(6) to Vaibhav Cotton Company by the Assessing Officer were not responded. This fact was communicated to assessee and he was asked by AO to produce books of A/c and prove genuineness of claim of agricultural income. The assessee did not respond. All these facts amply prove that claim of assessee is an afterthought without any evidence.
Nor did the assessee prove genuineness of the unsecured loans. The onus to prove the unsecured loan genuine by establishing identity of creditors, their credit worthiness and genuineness of credits is squarely on assessee. This onus has not been discharged.
Neither has the assessee proved genuineness of the agricultural income nor has he proved the unsecured loan to be genuine.
The Assessing Officer has thus rightly held the investments to be out of unexplained sources. The addition is sustained. The grounds of appeal 2 and 3 are rejected.”
Page No 5 Vashram Savabhai Sindhav vs. ITO
The assessee is in appeal before us against the order passed by Ld. CIT(Appeals) dismissing the appeal of the assessee. Despite several opportunities given to the assessee for appearance, none has appeared before us on behalf of the assessee to argue the case on merits. Accordingly, we are passing the order on the basis of material before us. On going through the assessment and the appellate records, we find no infirmity in the order of AO/ CIT(Appeals) so as to call for any interference. The assessee had purchased land in Kuvada and when asked to explain the source of such investment, the assessee submitted that the same was funded firstly out of sale of agricultural produce to M/s Vaibhav Cotton and secondly out of unsecured loans. As per observations made by the AO in the assessment order, and notice under section 133(6) issue to M/s Vaibhav Cotton, the AO observed that the assessee has not been able to establish sale of agricultural produce to M/s Vaibhav Cotton. Further, the AO observed that the assessee has not incurred any agricultural expenses during the year under consideration. The AO further observed that from the facts it is evident that the revised return was filed by the assessee only with a view to cover of the source of investment for purchase of land situated at Kuvada, which was subject to scrutiny by the AO during the course of assessment proceedings. Further, the Ld. Assessing Officer observed that the assessee has not produced any details of unsecured loans during the course of assessment proceedings. In our considered view, the AO and Ld. CIT(Appeals) have rightly held that assessee has not been able to explain the source of investments made by the assessee in the aforesaid property and rightly added the aforesaid sums as unexplained investments in the hands of the assessee under section 69 of the Act.
Page No 6 Vashram Savabhai Sindhav vs. ITO
In the result, appeal of the assessee is dismissed.
Order pronounced in the open court on 14-03-2023