Income Tax Appellate Tribunal - Ahmedabad
Shri Dahyabhai M. Patel,, Ahmedabad vs The Income Tax Officer, Ward-2,, ... on 18 May, 2017
आयकर अपील य अ धकरण, अहमदाबाद यायपीठ, अहमदाबाद ।
IN THE INCOME TAX APPELLATE TRIBUNAL
" SMC " BENCH, AHMEDABAD
सव ी एस.एस.गोदारा, या यक सद य एवं द प कुमार के डया, लेखा सद य के सम ।
BEFORE SHRI S.S. GODARA, JUDICIAL MEMBER &
SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER
आयकर अपील सं./I.T.A. No.2283/Ahd/2013
( नधा रण वष / Assessment Year : 2008-09)
Shri Dahyabhai M. Patel\ बनाम/ The Income Tax Officer
Nr.Swami narayan Temple Vs. Ward-2
Patidar Punchwadi Street Bharuch
Zadeshwar Road
Opp. Gram Panchayat,
Bharuch
थायी ले खा सं . /जीआइआर सं . / PAN/GIR No. : AVRPP 2711 J
(अपीलाथ' /Appellant) .. ( (यथ' / Respondent)
अपीलाथ' ओर से / Appellant by : Written submissions
(यथ' क* ओर से/Respondent by : Smt. Anita Suresh Hardasani, Sr.DR
ु वाई क* तार ख /
सन Date of Hearing 26/04/2017
घोषणा क* तार ख /Date of Pronounce ment 18/ 05/2017
आदे श / O R D E R
PER PRADIP KUMAR KEDIA, AM:
The captioned appeal by the Assessee is directed against the order of the Commissioner of Income Tax(Appeals)-II, Baroda [CIT(A) in short] dated 23/05/2013 for the Assessment Year (AY) 2008-09.
2. The grounds of appeal raised by the Assessee read as under:-
ITA No. 2283/Ahd/2013Shri Dahyabhai M. Patel vs. ITO Asst.Year - 2008-09 -2- I. The CIT(A) has erred both in Law and in fact in confirming addition of Rs.11,00,000/- u/s.68 made by the Assessing Officer.
It is submitted by your Appellant that Sec.68 does not apply to facts of the case and various depositors were known person who had proved the identity, their creditworthiness and source of investment made by them and therefore the entire addition be deleted.
II. The CIT(A) has erred in confirming addition of Rs.2,15,400 as of alleging it to be income from unexplained source.
Your Appellant is agriculturist and in Return of Income he had declared his net Agricultural Income of Rs.2,15,400/- which was backed by proof of Agricultural Activities which ought to have been accepted and treatment to same as "Agricultural Income"
ought to have been given.
III. Without Prejudice to above it is submitted that the principal of 'Peak Credit' applies and addition of Rs.11,00,000/- u/s.68 of the Act to addition of Rs.2,15,400/- amount of double addition which is against principal of accountancy and therefore principal of "Telescoping" be applied and addition if any liable to be made be reworked accordingly.
3. First ground relates to addition of Rs.11 lakhs under s.68 of the Income Tax Act, 1961 (hereinafter referred to as "the Act"). Relevant facts concerning the issue are that the assessee is a retired teacher from Bharuch school, drawing pension of about Rs.6,500/- p.m. The Financial Intelligence Unit (FTU) found that the assessee made payment of Rs.11 lakhs towards subscription of policy of Kotak Mahindra Old Mutual Life ITA No. 2283/Ahd/2013 Shri Dahyabhai M. Patel vs. ITO Asst.Year - 2008-09 -3- Insurance Ltd. on a single day i.e. 24/01/2008 by multiple Demand Drafts and cash transactions each denominated for less than Rs.50,000/-. It was thus found that such huge payment is not commensurate with the source of income of the assessee. The case was accordingly selected for scrutiny. The assessee claimed before the Assessing Officer (AO) that it was agricultural income ranging from Rs.2 lakhs to Rs.3 lakhs per annum and the source of investment of Rs.11 lakhs is from the accumulated cashfrom the agricultural income earned over the years. The assessee also claimed that a part of investment is from sale of old gold jewellery owned by the assessee. The AO found that claim of sale of gold ornaments was false since the jewellery shop whose address was noted on the sale voucher was found to be non-existence at the said address. The AO also noted that multiple DDs and cash transactions on a single day each denominated for not less than Rs.50,000/- remains unexplained. The onus for proving the source of payment has not been discharged. The AO consequently concluded that the aforesaid payment of Rs.11 lakhs has been made out of unexplained source of income and accordingly brought the same to tax under s.68 of the Act.
4. In first appeal, the CIT(A) noted that in spite of repeated opportunity, the assessee did not appear for hearing. The appeal was accordingly dismissed by the CIT(A) ex-parte.
ITA No. 2283/Ahd/2013Shri Dahyabhai M. Patel vs. ITO Asst.Year - 2008-09 -4-
5. Aggrieved thereto, the assessee is in second appeal before the Tribunal.
6. Before the Tribunal also, none appeared for the assessee. However, written submissions dated 08/07/2016 were filed and the right of oral hearing was waived. Accordingly, the matter was proceeded on the basis of written submissions of the assessee and reply of the revenue thereon.
7. On perusal of the written submissions, we find that the assessee has broadly sought to reiterate that he is holding agricultural land and agricultural income was generated over a period of time. The assessee strongly objected to the order of the Revenue on the ground that section 68 has no application in the facts of the case as the assessee has subscribed to the policy of Kotak Mahindra Old Mutual Life Insurance Ltd. on the ground that the aforesaid subscription does not involve credit entry. Also, the assessee is not maintaining any books of accounts. The assessee further harped that the agricultural land was sufficient to produce the amount of premium. The assessee accordingly urged for reversal of the action of the CIT(A).
8. The Ld.DR for the Revenue, on the other hand, relied upon the orders of the AO and the CIT(A).
ITA No. 2283/Ahd/2013Shri Dahyabhai M. Patel vs. ITO Asst.Year - 2008-09 -5-
9. On careful consideration of the written submissions made and reply of the Revenue thereon, we find no merit in the plea of the assessee. No documentary evidences have been furnished either before the AO or before the CIT(A) to corroborate the assertions made towards sources of payment. The averments made before the AO are bald and without any supporting material. The assessee in spite of repeated opportunities, squandered the same to defend the case. Even before the Tribunal, no corroborative material has been placed on record to prove the source of deposits. In the written submissions, the assessee has mainly harped that section 68 of the Act is not applicable in the facts of the case and therefore addition cannot be sustained. We are not impressed by such line of argument. A wrong quoting of section per se will not vitiate the conclusion towards undisclosed income. As long as the assessing authority has a requisite power for particular act, invocation of wrong section is not material. This observation is supported by the decision of L.Hazarimal Kuthiala vs. ITO 41 ITR 12(SC). In the instant case, we find that the assessee hardly has any income at its disposal for making such huge investment. The theory propounded by the assessee that staggering amount of Rs.11 lacs have been accumulated in cash out of agricultural produce over a period of time is in one realm of fantastical explanation. It is highly unpalatable to agree to such plea that such large cash for long allegedly generated from sale of agricultural produce will be kept in cash without putting it in bank account which the ITA No. 2283/Ahd/2013 Shri Dahyabhai M. Patel vs. ITO Asst.Year - 2008-09 -6- assessee is duly maintaining as a school teacher. It is not shown as to how much agricultural income was produced and accumulated. The other explanation of the assessee that certain gold ornaments were also sold was found false on enquiry by the AO. We fail to see the rationale for making cash deposit of less than Rs.50,000/- in multiple times and also by way of DDs on the same day instead of making a single payment of the aforesaid amount. It is apparent this was done in an attempt to invest with anonymity and to by-pass the surveillance system of the income-tax agencies. The conduct of the assessee is far from befitting. The plea raised by the assessee is an argument of despair. In the totality of these circumstances, we do not see any reason to interfere with the orders of the authorities below. Ground No.1 is dismissed.
10. The second ground relates to addition of Rs.2,15,400/- claimed as exempt by the assessee on the ground that the aforesaid income represents agricultural income. We find that the assessee has failed to produce any corroborative evidence of agricultural activities before any of the authorities below or before us. It is for the assessee to prove that it has carried out basic operations on the agricultural land and generated income from agricultural activities. Bald assertions made in this regard cannot be taken as sufficient. However, we notice from assessment order that assessee holds 69 hectares of land. Thus, the fact of existence of agriculture income cannot be outrightly rejected. We accordingly ITA No. 2283/Ahd/2013 Shri Dahyabhai M. Patel vs. ITO Asst.Year - 2008-09 -7- consider 50% of Rs.2,15,400/- as derived from agriculture receipts and grant part relief. Ground No.2 is accordingly partly allowed.
11. By way of ground No.3, the assessee seeks to raise alternative contention that principle of peak credit theory should be applied and benefit of telescoping should be given. However, while agreeably such benefits are available to the assessee when the appropriate circumstances exist, we find that the assessee has failed to show existence of any such circumstances and the working for availing such benefit. No averments have been made to this effect in the written submissions or before the lower authorities. In the circumstances, we find no merit in this ground of appeal.
12. In the result, appeal of the assessee is partly allowed..
This Order pronounced in Open Court on 18/ 05/2017
Sd/- Sd/-
(एस.एस.गोदारा) ( द प कुमार के डया)
या यक सद य लेखा सद य
( S.S. GODARA ) ( PRADIP KUMAR KEDIA )
JUDICIAL MEMBER ACCOUNTANT MEMBER
Ahmedabad; Dated 18/ 05 /2017
ट .सी.नायर, व. न.स./T.C. NAIR, Sr. PS
ITA No. 2283/Ahd/2013
Shri Dahyabhai M. Patel vs. ITO
Asst.Year - 2008-09
-8-
आदे श क त"ल#प अ$े#षत/Copy of the Order forwarded to :
1. अपीलाथ' / The Appellant
2. (यथ' / The Respondent.
3. संबं6धत आयकर आयु8त / Concerned CIT
4. आयकर आयु8त(अपील) / The CIT(A)-II, Baroda
5. 9वभागीय त न6ध, आयकर अपील य अ6धकरण, अहमदाबाद / DR, ITAT, Ahmedabad
6. गाड फाईल / Guard file.
आदे शानुसार/ BY ORDER, स(या9पत त //True Copy// उप/सहायक पंजीकार (Dy./Asstt.Registrar) आयकर अपील य अ धकरण, अहमदाबाद / ITAT, Ahmedabad
1. Date of dictation .. 16.5.17(dictation-pad 17- pages attached at the end of this appeal-file)
2. Date on which the typed draft is placed before the Dictating Member ...16.5.17
3. Other Member...
4. Date on which the approved draft comes to the Sr.P.S./P.S.................
5. Date on which the fair order is placed before the Dictating Member for pronouncement......
6. Date on which the fair order comes back to the Sr.P.S./P.S.......
7. Date on which the file goes to the Bench Clerk.....................
8. Date on which the file goes to the Head Clerk..........................................
9. The date on which the file goes to the Assistant Registrar for signature on the order..........................
10. Date of Despatch of the Order..................