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Income Tax Appellate Tribunal, NAGPUR BENCH : NAGPUR
Before: S.S.VISWANETHRA RAVI & DR. DIPAK P. RIPOTE
ORDER
PER DR. DIPAK P. RIPOTE, AM:
1. This is an appeal filed by the assessee against the order of ld.Commissioner of Income Tax(Appeals)-1, Nagpur dated 11.10.2014 emanating from the order under section 143(3) of the Act dated 27.12.2011 passed by the ITO, Ward-1(3), Nagpur. The appellant has raised the following grounds of appeal:
1. On the facts & circumstances of the case, the assesssment order passed by the learned assessing officer u/s 143(3) is bad in law and on facts and the learned CIT Appeals has erred in confirming the same.
2. On the facts & circumstance of the case, the addition of A.Y.2009-10 Chetan Raghunath Lavania [A]
Rs.1,95,89,857/- made by the assessing officer & confirmed by the learned CIT(A) is bad in law and on facts.
3. On the facts&circumstances of the case,the learnedassessing officer has erred intreating purchases made from" two sundry creditors as bogus and thereby adding Rs 1,95,89,857/-asunexplained income and thelearned CITAppeals has erred in confirming the same.
4. On the facts&circumstances of the case,the learnedassessing officer has erred in treating the entire credit balance of Rs.1,95,89,857/-of two sundry creditors outstanding as on 31st March,2009 as unexplained cash credit and adding the same as income and the learned CIT Appeals has erred in confirming the same. The addition made was contrary to facts and law and that since the addition made included old balances of earlier years also the assessing officer was wrong in treating them as income of the assessee for the year under consideration.
5. The appellant craves leave to add or amend any ground of appeal with the permission of the hon'ble members.”
None appeared on behalf of the assessee. We heard the ld.Departmental Representative(ld.DR) for the Revenue and perused the records.
As per the assessment order, the assessee had filed return of income declaring total income at Rs.8,30,550/- on 26.09.2009 for A.Y.2009-10. The case was selected for scrutiny. The assessee earns income from manufacturing and trading of iron and steel. The assessee was duly represented during the assessment proceedings. During the assessment proceedings, the Assessing Officer(AO) noted
A.Y.2009-10 Chetan Raghunath Lavania [A] that there were certain creditors and AO asked the assessee to submit the details of the creditors. The relevant portion of the assessment order is reproduced here as under: “Theassessee submitted that he had no details about the parties and could notproduce confirmations from these parties. Finally, the assessee surrenderedthese sundry creditors in the current year and had submitted as under:-
M/s Shreeram Steels:- This is to submit that we are unable to procure the balance confirmation from our creditor M/s Shreeram Steels of Rs.1,13,79,161/- which is outstanding in our accounts.
To avoid litigation and to get peace of mind we hereby surrender income of Rs. 1,13,79,161/-. I am ready to pay taxes and will not file appeal against this order.
2. M/s Gurudeo Steel:- This is to submit that we are unable to procure the balance confirmation from our creditor M/s Gurudeo Steel of Rs.82,10,696/- which is outstanding in our accounts.
To avoid litigation and to get peace of mind we hereby surrender income of Rs.82,10,696/-. I am ready to pay taxes and will not file appeal against this order.
The details of the purchases were verified from the ledger and books of accounts of the assessee and it is found that there were no purchase bills wwith the assessee in respect of these purchases and even there were no payments made to these parties during the year. Since the assessee wasunable to produce purchase bills, balance confirmations and the details ofthe whereabouts of the above parties regarding their addresses anddealings with them, these are A.Y.2009-10 Chetan Raghunath Lavania [A]
treated as unexplained income in the hand of the assessee and added to the total income of the assessee. Therefore, the total of the two unexplained creditors i.e. M/s Shreeram Steels of Rs.1,13,79,161/- and M/s Giridep Steel of Rs.82,10,696/- comes to Rs.1,95,89,857/-, which is offered by the assessee as his income for the A.Yr.2009-10, is added to the total income of the assessee.”
The assessee filed appeal before the ld.CIT(A). The ld.CIT(A) has categorically noted the fact that appellant failed to adduce any sort of evidence in support of his claim of genuineness of these creditors during the appellate proceedings. The ld.CIT(A) confirmed the additions. In this case, the main contention of the AO is that assessee had failed to submit any bills etc., for the so-called purchases made from M/s.Sriram Steels, M/s.Gider Steels. It was also observed by the AO that there were no payments made by the assessee to these impugned parties. The assessee also failed to file details of the addresses of the impugned parties. Therefore, the AO treated these as bogus purchases.
5. The assessee has nowhere claimed that the acceptance of additions during the assessment proceedings was due to any coercion, threat or undue influence. It means, assessee had made the declaration before the AO after understanding the implications.
The most important fact in this case is that the assessee has accepted during the assessment proceedings that he is unable to A.Y.2009-10 Chetan Raghunath Lavania [A] produce the details called for and he agreed for the additions and payment of taxes. The assessee had also agreed before the AO that he will not file appeal against these additions. The relevant text is also produced in earlier para. In these facts and circumstances, since assessee has accepted the addition and agreed to pay the taxes one cannot say that assessee was aggrieved by the addition made by the AO, therefore, in principle the Appeal was not maintainable under section 246A of the Act. The Hon’ble Bombay High Court in the case of Ramesh Chandra & Company Vs. CIT [1987] 168 ITR 375 (Bom) has held as under : “9. The assessee had been asked by the Income-tax Officer to explain the discrepancy of 360 bags in a particular account in its books of account. In response, its partner appeared before the Income-tax Officer and expressed in writing the assessee's "inability to reconcile the discrepancies" and he asked that "the amount be added to income." The note of the Income-tax Officer in the order sheet to that effect was signed by the partner. At no time thereafter was the Income-tax Officer approached to rectify the assessment on the ground that the partner had been under a mistaken belief of fact or otherwise. In the grounds of appeal originally filed before the Appellate Assistant Commissioner, there was not a whisper in regard to the addition of the said amount of Rs. 18,052. It would appear that the additional ground in this behalf was taken at the hearing of the appeal before the Appellate Assistant Commissioner, taking advantage of the fact that no one
A.Y.2009-10 Chetan Raghunath Lavania [A] on behalf of the taxing authority was present to represent it. Even at that stage, the additional ground taken did not say that there was any mistaken belief of fact. All that was said was that the addition was "improper, illegal".
Having regard to the statement made by the partner of the assessee, there was nothing either improper or illegal in the order of the Income-tax Officer in regard to the addition. While the statement stood, the assessee could not have a grievance in that behalf and was not entitled to appeal there against. Therefore, the Appellate Assistant Commissioner was manifestly in error in entertaining the appeal.”
Thus, facts mentioned in the case under consideration and in the case of Ramesh Chandra & Company are identical as far as declaration aspect is concerned. In this case also, assessee has not claimed that the declaration was made under coercion, threat or undue influence. Therefore, respectfully following the Hon’ble Jurisdictional High Court, we are of the opinion that appeal of the assessee is not maintainable.
8. Even otherwise on merits, the assessee has not produced any bills to substantiate his claim of purchases. The assessee has not even filed any document to substantiate his claim of purchases. It means the impugned goods were never received by the assessee. The impugned goods were never purchased by the assessee. In these
A.Y.2009-10 Chetan Raghunath Lavania [A] facts and circumstances of case, on merit, we uphold on the additions made by the AO. Accordingly, grounds of appeal raised by the assessee are dismissed.
In the result, appeal of the Assessee is Dismissed. Order pronounced in the open Court on 15th November, 2022.