Income Tax Appellate Tribunal - Pune
Shri Chandrashekhar M. Ashtekar,, Pune vs Ito, Ward 3(2), Pune on 13 January, 2017
आयकर अपील य अ धकरण] पण
ु े यायपीठ "बी" पण
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IN THE INCOME TAX APPELLATE TRIBUNAL
PUNE BENCH "B", PUNE
सु ी सष
ु मा चावला, या यक सद य एवं
ी अ नल चतव
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BEFORE MS. SUSHMA CHOWLA, JM AND
SHRI ANIL CHATURVEDI, AM
आयकर अपील सं. / ITA No.1599/PUN/2013
नधा(रण वष( / Assessment Year : 2009-10
Shri Chandrashekhar M. Ashtekar .......... अपीलाथ /
1206/28A, Shivajinagar,
Appellant
Pune - 411016.
PAN No.AAPBA3061N.
बनाम v/s
Income Tax Officer, .......... यथ /
Ward 3(2), Pune.
Respondent
अपीलाथ क ओर से / Appellant by : Shri Nikhil Pathak /
Shri Sushas Bora
यथ क ओर से / Respondent by : Shri Hitendra Ninawe.
सन
ु वाई क तार ख / घोषणा क तार ख /
Date of Hearing :03.01.2017 Date of Pronouncement: 13 .01.2017
आदे श / ORDER
PER ANIL CHATURVEDI, AM :
This appeal of the assessee is emanating out of the order of Commissioner of Income Tax (A) - II, Pune dated 15.02.2013 for the assessment year 2009-10.
2. The relevant facts as culled out from the material on record are as under :-
2ITA No.1599/PUN/2013
AY.No.2009-10 2.1 Assessee is an individual stated to be having income from House Property, Business and other sources. Assessee filed his return of income for A.Y. 2009-10 on 14.09.2009 declaring total income of Rs.21,43,910/-. The case was selected for scrutiny and thereafter assessment was framed u/s 143(3) of the Act vide order dated 28.12.2011 and the total income was determined at Rs.68,44,411/-. Aggrieved by the order of AO, assessee carried the matter before ld. CIT(A), who vide order dated 15.02.2013 (in appeal No.PN/CIT(A)-II/ITO Wd-3(2), Pn/320/2011-12) dismissed the appeal of the assessee. Aggrieved by the order of ld. CIT(A) assessee is now in appeal before us and has raised following grounds :
"1. The learned, CIT (Appeals), Pune has erred in rejecting thy request of the appellant for admission of additional evidence under Rule 46A on the ground that it does not fulfill the requirement of Rule 46A.
2. The learned CIT (Appeals) ought to have admitted the additional evidence under Rule 46A when he has technically admitted such additional evidence by commenting on the merits thereof and the comments of the AO.
3. The learned CIT (Appeals), Pune has erred in law and on facts in confirming action of the AO of making an addition on account of cash deposits in the bank U/sec. 69A as unexplained money.
4. The learned CIT (Appeals), Pune has erred in law and on facts in not appreciating the following important factors:
a. Appellant does not hold any account with Bank of India and the account is held in the name of HUF.
b. The amount deposited does not take character of income in hands of the appellant.
c. Appellant has explained the source of all funds deposited and also submitted confirmations of parties from whom the amounts were received,
5. The appellant may kindly be permitted to add to or alter any of grounds of appeal, if deemed necessary"
3. Before us, at the outset, ld.A.R. submitted that he did not wish to press ground Nos.1, 2 and 4(a). He further submitted that 3 ITA No.1599/PUN/2013 AY.No.2009-10 ground No.3 and ground No.4(b) and (3c) are connected to Ground No.3 and therefore can be considered together. In view of the aforesaid submission, ground Nos.1, 2 and 4(a) are dismissed as not pressed. Since ground No.4(b) and (c) and ground No.3 are inter-connected, all the grounds are considered together.
4. On the basis of AIR information received by AO, it was noticed by him that assessee has deposited cash in savings bank account maintained by the assessee with the Bank of India and the total cash deposits were Rs.47,00,501/-. The assessee was asked to explain the source. The assessee inter-alia submitted that the bank account that was opened by him was with respect to the HUF and appeared in the books of accounts of HUF. It was further submitted that his friends and close relatives had decided to collect monthly amount from each person in the group and the assessee was appointed as custodian and accordingly he collected amounts from 24 persons and deposited the same in the bank account. From February, 2009 the amount collected from each member was repaid. The assessee also furnished the list of depositors. It was also submitted that the entire transaction was in capacity of HUF and the interest income was disclosed in the revised return of HUF for A.Y. 2009-10 and therefore the amount of cash deposits cannot be considered as income of the assessee. The submission of the assessee was not found acceptable to the AO inter-alia for the reason that initially assessee had denied of having any bank account with the Bank of India but later on he admitted of having account with Bank of India, Lakshmi Road Branch, Pune. On perusing the income-tax return of HUF, AO noticed that for A.Y. 2007-08 4 ITA No.1599/PUN/2013 AY.No.2009-10 assessee had shown income of Rs.133/- being Bank interest and for A.Y. 2008-09, the interest was nil. For A.Y. 2009-10 in the original return, the income of HUF was shown as nil but in the revised return filed during the course of assessment proceedings i.e., on 23.12.2011, income was shown as Rs.1,50,002/- whereas the Bank interest income was as Rs.1,00,002/-. AO therefore concluded that the revision of return of income of HUF for A.Y. 2009-10, to be after- thought. AO also noted that the claim of the assessee of having collected the amounts from 24 persons including family persons and repayment of the same during the year was also not supported by any substantial evidence. He therefore considered the cash deposits of Rs.47,00,501/- in the bank account as unexplained and made its addition u/s 69A of the Act. Aggrieved by the order of AO, assessee carried the matter before ld. CIT(A) who after considering the submissions of the assessee, the remand report from AO and assessee's submission to the remand report, upheld the order of AO by holding as under :
"4.2 The submission made by the appellant has been duly considered along with additional evidence filed u/r 46A, the remand report sent by the Assessing Officer and also the rejoinder filed by the appellant. The appellant is a partner in a firm under the name and style of 'Ashtekar Jewellers' and has income from various sources which includes share of profit, interest and remuneration from the firm and interest from various sources and also rental income. The Assessing Officer had the specific AIR information/ITS details of the cash deposits in the saving bank account of Bank of Baroda amounting to Rs. 47,00501/-. The assessment proceedings actually started from 12-10-2011 and the same was concluded on 28-12-2011 with the passing of the order u/s 143(3).The authorized representatives of the appellant attended the assessment proceedings from time to time till the passing of the order by the Assessing Officer. It is seen that the appellant had initially denied to have had made any transaction with the Bank of India and for which he had also filed an affidavit wherein had stated (hat he was having fixed deposit with the Bank of India, Laxmi road branch, Pune and the information received 'in ITS details were incorrect regarding the transaction of Rs. 47,00,501/-. It was only after the Assessing Officer carried out enquiries with the bank 5 ITA No.1599/PUN/2013 AY.No.2009-10 which revealed further by letter dated 09-12-2011 that the saving bank account No. 4381 at the said bank contained the cash deposits of Rs. 47,00,501/-, that the appellant in its submission dated 23-12-2011 before the Assessing Officer came out with an explanation that the said bank account was opened by the appellant though the deposits were considered in the books of account of the HUF and for which also filed a revised return of income on 23-12-2011 wherein the entire interest income earned of Rs.1,00,002/- was disclosed along with other income at Rs.1,50,002/- was disclosed as against 'NIL' income filed in the original return. The details obtained from the bank clearly revealed that the said bank account stood in the name of the appellant in the capacity of an individual and not in the capacity of HUF. Further the appellant's contention of the collection of amounts from 24 persons and its repayment during the same financial year were not supported by way of any evidence except for the names and addresses and PAN Nos. is some cases. The appellant on an average had taken 2.20 lacs from each person. The fact brought on record before the Assessing Officer clearly shows the action of the appellant in filing the revised return to be an afterthought as the event of the cash deposits took place primarily during the month of April to July 2008 and the filing of the revised return was only on 23-12- 2011 when the Assessing Officer had already confronted the appellant with the entire fact gathered by him. The appellant in its HUF capacity had been showing and filing 'Nil' income as was revealed in verification of the return of income for A.Yrs. 2007-08 to 2010-11. The additional evidence filed by the appellant u/r 46A in the form of letters dated 7-4-2008/9- 4-2008 addressed to Bank of India, Laxmi road branch requesting to change of PAN was neither claimed to have been filed before the Assessing Officer nor the same were actually filed before the Assessing Officer. The appellant has filed the additional evidences u/r 46A which were also sent to The Assessing Officer. The Assessing Officer in its report dated 27
-11-2012 has noted that the appellant was provided with ample opportunity to explain the cash deposits and that the PAN could not be collected even after four years of making the application to the bank and hence the explanation of the assessee appears to be an afterthought. The appellant in the rejoinder to the remand report has submitted that the observation of the Assessing Officer of the appellant intentionally avoiding to state the PAN was wrongly quoted in the hank in individual capacity as against HUF PAN is without any basis. The appellant has thereafter reiterated the submissions made earlier before the A.O. during the assessment proceedings.
4.3 It is true that an appellate authority can receive additional evidence from either side for a fair decision on all relevant materials, but the normal expectation is that all the evidences should be available at the first stage. It is for this reason that conditions are prescribed for admission of evidence in appeal stage. Rule 46A lists the circumstances where evidence could not be filed before the Assessing Officer due to non availability of sufficient opportunity or otherwise prevented by sufficient cause, so that such cause must be indicated while filing fresh evidence. The appellant, it has already been seen and also noticed had been provided with a number of opportunities by the Assessing Officer, and even after its attendance, the requisite 6 ITA No.1599/PUN/2013 AY.No.2009-10 details as sought for by the Assessing Officer could not be furnished by the appellant. Thus the contention raised by the appellant that the detail could not be furnished due to inadequate time is not correct and proper. Thus where additional evidence is sought to be relied upon, the assessee is expected under Rule 46A to give explanation as to why it could not be filed before the Assessing Officer and in the present case a number of opportunities was provided by the Assessing Officer to the appellant to prove the claim made that the cash deposits represented collections from 24 persons and in such a situation the credibility of the additional evidence apparently could not be believed and becomes doubtful. The commissioner has power to admit additional "evidence subject to the requirement of Rule 46A which permits entertainment of additional evidence during hearing of appeal subject to the procedure prescribed therein. The' present case does not come under the purview of 46A (b) (c) or
(d) hence the request for the admission of additional evidence is rejected and cannot be entertained at this stage. The reliance placed by the appellant on a few judicial decisions are not applicable to the facts of the present case as sufficient opportunity was provided to the appellant by the Assessing Officer during the assessment proceedings and, therefore, the appellant was not prevented by sufficient cause from producing any such evidence. The appellant had sufficient time to furnish the details of the claim made but still the same could not be produced before the Assessing Officer. The facts as brought on record prima facie indicate that the entire exercise of making the claim of advances to explain the cash deposited in the bank is colorable transaction which is difficult to be believed. The contention raised by, the appellant is not backed by proper proof and evidence so as to justify the claim of explaining the cash deposits by way of advances.
The reliance placed by the appellant on the judicial decisions as above is out of context and not applicable to the facts of the present case.
4.4 The appellant's contention that the AO. erred in making the addition u/s 69A as unexplained money deposited in bank, therefore, the order was incorrect, invalid and ought to be deleted. In this regard it is relevant to indicate that as per the Special Bench in the case of Manoj Agarwal Vs DCIT (2008) 117 TTJ 145, (Del)(SB), on the basis of the judgement of the Supreme Court in the case of A Govindrajulu Mudaliar Vs CIT (1958) 34 ITR 807 (SC) held. It is the onus of the assessee to explain the cash received by him and if there is no explanation or acceptable evidence to prove the nature and source of the receipt, the amount may be added as the assessee's income on general principles. The Special Bench had further held that in the absence of any clinching evidence to show the nature and source of the monies deposited into the bank account which belong to the assessee, the AO. was justified in adding the amount as the assessee's unexplained income. In the case of CIT Vs K. Chinnathamhan (2007) 292 ITR 682 (SC), it was held that in the absence of any evidence forthcoming as to the source of deposits, the AO was justified in making addition u/s 69A of the LT. Act, 1961. 4.5 The appellant has also not been able to submit any explanation or bring any evidence or material on record to prove that the cash deposits are genuine either at the stage of assessment or during the appellate proceedings. Under the 7 ITA No.1599/PUN/2013 AY.No.2009-10 deeming provisions of the LT. Act, 1961, the position is that the mere existence of a credit entry is sufficient to attract the provisions and once the appellant's explanation is not satisfactory, the cash credits are to be charged to tax in an exceptionable manner. It was so held in one or the most landmark cases of the Hon'ble Supreme Court of Sumati Dayal (1995) 214 ITR 801 (SC). From a plain reading of the requisite sections it is evident that when the assessee offers no explanation about the nature and source of the credits, its value could be deemed income of the assessee. An explanation offered, if not accepted is no explanation in law and not only this the legislature while enacting the deeming provisions of the I.T. Act falling under sections 68, 69 to 690 of the --I. T. Act, 1961, has clarified that in case the explanation offered is not satisfactory the value of the unexplained deposits shall be deemed to be the income of the assessee, There can be no general proposition of law applicable to all cases irrespective of the facts and circumstances thereof. One thing which can be said without much hesitation is that the burden is always on the assessee, if an explanation is asked for by the taxing authorities to indicate the source of acquisition of a particular asset admittedly owned by the person concerned. The burden cast upon the appellant has not been discharged either at the stage of assessment or during the appellate proceedings by furnishing any acceptable explanation.
4.6 From the plain reading of section 69A, it is evident that when the assessee offers no explanation about the nature and source of acquisition of the money, bullion, jewellery or other valuable articles in value would be deemed Income of the assessee, An explanation offered, if not accepted is no explanation in law and not only this, the legislature while enacting section 69A has clarified that in case the explanation offered is not satisfactory the value of the valuable articles shall be deemed to be the income of the assessee. 4.7 Section 110 of the Evidence Act is material in this respect which stipulates that when the question is whether any person is owner of anything of which he is shown to be in possession, the onus of proving that he is not the owner, is on the person who affirms that he is not the owner. In other words, it follows from well settled principle of law that normally, unless contrary is established, title always follows possession. Chuharmal vs CIT (1988) 172 ITR 250 (SC). Documentary evidence plays an important part in law. The Courts attach great value for documentary evidence. The Punjab & Haryana High Court in the case of Paramjit Singh Vs ITO (2010) 323 ITR 588 (P & H) pointed out that oral evidence is not conclusive as against documentary evidence under sections 91 and 92 of the Indian Evidence Act, 1872. 4.8 In view of the above facts, the disallowance made by the N.O. is upheld and the ground of appeal no. 2 raised by the appellant is liable to be dismissed."
Aggrieved by the order of ld. CIT(A), assessee is now in appeal before us.
8ITA No.1599/PUN/2013
AY.No.2009-10
5. Before us, ld.A.R. reiterated the submissions made before AO and ld. CIT(A). He further submitted that through oversight the account was opened for HUF and the Pan No. of the assessee was submitted. It was further submitted that the addition be deleted. Ld. D.R. on the other hand supported the order of AO and ld. CIT(A).
6. We have heard the rival submissions and perused the material on record. The issue in the present case is with respect to making addition of cash deposits in bank as unexplained money u/s 69A of the Act. We find that ld. CIT(A) while confirming the addition has noted that assessee has not placed any evidence or placed on record any material which could show that cash deposits were genuine either at the assessment stage or at the appellate proceedings. He has further noted that assessee had initially denied to have made any transaction with Bank of India and for which he also filed an affidavit, wherein it was inter-alia stated that information received in ITS deals were incorrect. Regarding the transactions of Rs.47,00,501/-. Ld. CIT(A) has further noted that only after AO carried out enquiries with the Bank it was revealed that the savings bank account No.4381 contained cash deposits of Rs.47,00,501/-. Thereafter, the assessee came with an explanation that the bank account though was opened by him but were appearing in the books of account of HUF and a revised return of income of HUF was filed on 23.12.2011 wherein the interest income earned was disclosed as against the nil income filed in the original return. Ld. CIT(A) has also noted that assessee has not placed any material to demonstrate that the cash transactions are justified and to be the advances. Before us, assessee has not brought any 9 ITA No.1599/PUN/2013 AY.No.2009-10 material on record to controvert the findings of ld. CIT(A). In view of the totality of the aforesaid facts, we find no reason to interfere with the order of ld. CIT(A). Thus, the grounds of the assessee are dismissed.
7. In the result, the appeal of the assessee is dismissed.
Order pronounced on the 13th day of January, 2017.
Sd/- Sd/-
(SUSHMA CHOWLA) (ANIL CHATURVEDI)
या यक सद य / JUDICIAL MEMBER लेखा सद य / ACCOUNTANT MEMBER
पण
ु े Pune; दनांक Dated : 13th January, 2017.
Yamini
आदे श क* + त,ल-प अ.े-षत/Copy of the Order forwarded to :
1. अपीलाथ / The Appellant
2. यथ / The Respondent
3. The CIT-(A)-II, Pune
4. The CIT-II, Pune.
5. #वभागीय &त1&न'ध, आयकर अपील य अ'धकरण, "बी" / DR, ITAT, "B" Pune;
6. गाड, फाईल / Guard file आदे शानस ु ार/ BY ORDER,स या////// True Copy //T // // True Copy // सहायक रिज12ार/ Assistant Registrar, आयकर अपील य अ'धकरण ,पुणे / ITAT, Pune.