Case Law Details
Shivam Leasing Pvt Ltd Vs ITO (ITAT Delhi)
ITAT Delhi held that addition under section 69A on account of income from undisclosed source sustained in assessee deliberately failed to produce all the books of accounts and no material evidence furnished by the assessee.
Facts- The assessee filed its return of income on 29.09.2008 which was processed u/s 143(1) of the Income-tax Act, 1961. Subsequently, on the basis of information that assessee company had introduced unaccounted money in its books of accounts during F.Y. 2007-08 relevant to A.Y. 2008-09, the assessment was reopened u/s 147 of the Act.
In response to notice u/s 148 of the Act the assessee submitted that return of income filed on 29.02.2016 may be treated as its return of income filed against notice u/s 148 of the Act. Considering the submissions furnished on behalf of assessee during assessment proceedings the AO completed the assessment u/s 147 r.w.s. 143(3) of the Act at Rs. 1,05,31,500/- by adding Rs. 1,05,18,095/- on account of income from undisclosed sources.
CIT(A) dismissed the appeal. Being aggrieved, the present appeal is filed.
Conclusion- Held that after carefully going through the order of learned CIT(A) we find that in confirming the impugned addition of Rs. 1,05,31,500/- made by the AO the learned CIT(Appeals) has duly examined the explanation offered by the assessee and has given categorical finding that assessee deliberately failed to produce all books of accounts during the assessment proceedings. No material evidence to the contrary has been filed by the assessee. Therefore, we do not find any reason to interfere in the finding of learned CIT(A).
FULL TEXT OF THE ORDER OF ITAT DELHI
This appeal, by the assessee, is directed against the order of the learned Commissioner of Income-tax (Appeals)-30, New Delhi, dated 13.09.2018, pertaining to the assessment year 2008-09. The assessee has raised following grounds of appeal:
“1. That on the facts and in the circumstances of the case and in law, ld CIT(A) erred in sustaining the order passed by Ld AO u/s 147/143(3) without appreciating that assumption of jurisdiction u/s 148 was by Ld AO was in violation of mandatory jurisdictional conditions stipulated under the Act;
1.1 That on the facts and in the circumstances of the case and in law, ld CIT(A) erred in sustaining the order passed by Ld AO u/s 147/143(3) without appreciating that basis of reopening being stated investment of Rs 50lacs in M/s Goldline Enterprises Ltd no addition was made by Ld AO for the same and addition was made u/s 69A for Rs 105,31,500 for stated cash deposits which gets endorsed from finding of CIT-A at para 6.3 of the order which is sufficient to quash the reopening action and consequent orders passed by Ld AO and Ld CIT(A);
(Principle of sublato fundamento cadit opus when foundation fails superstructure falls applies to present facts)
1.2 That on the facts and in the circumstances of the case and in law, Id CIT(A) erred in sustaining the order passed by Ld AO u/s 147/143(3) without appreciating that basis of reopening being stated investment of Rs 50lacs in M/s Goldline Enterprises Ltd which is based on non application of mind as said investment is duly recorded and accounted and said fact is never disputed by Ld AO, which is sufficient to quash the reopening action and consequent orders passed by Ld AO and Ld CIT(A);
1.3 That on the facts and in the circumstances of the case and in law, ld CIT-A erred in sustaining the order passed by Ld AO u/s 147/143(3) at para 5.3 of impugned order without appreciating that undated reasons (mere extract given without sanction from higher authority) supplied are based on i) borrowed satisfaction ii) reasons to suspect iii) incorrect factual assumption based on mere presumptions which is sufficient to quash the reopening action and consequent orders passed by Ld AO and Ld CIT-A;
1.4 That on the facts and in the circumstances of the case and in law, ld CIT-A erred in sustaining the order passed by Ld AO u/s 147/143(3) without appreciating that no back material was lawfully confronted to assessee thus invalidating entire reopening:
1.5 That on the facts and in the circumstances of the case and in law, Id CIT-A erred in sustaining the order passed by Ld AO u/s 147/143(3) as none of the assessee submission is appreciated while adjudicating the appeal; Merits of the case
2. That on the facts and in the circumstances of the case and in law ld CIT-A erred in sustaining the order passed by Ld AO u/s 147/143(3) without appreciating that on basis of prodigious evidences on records burden u/s 69A lying on assessee has been fully discharged and met so addition made by Ld AO (RS 105,31,500) and confirmed by CIT-A in impugned order deserves to be deleted.
That the appellant craves leave to add add/alter any/all grounds of appeal before or at the time of hearing of the appeal.”
2. At the time of hearing no one attended the proceedings. It is seen from the records that there is no representation on behalf of the assessee since 17.08.2022. Multiple opportunities have been given to the assessee. Notice of hearing sent to the assessee has been received back with postal remarks “Refused”. Thus, the appeal is taken up for hearing in the absence of the assessee and is being decided on the basis of material available on record.
3. Facts giving rise to the present appeal are that for A.Y. 2008-09 the assessee filed its return of income on 29.09.2008 declaring income of Rs. 13,045/- which was processed u/s 143(1) of the Income-tax Act, 1961, hereinafter referred to as the “Act”. Subsequently, on the basis of information received from the office of Dy. Director of Income-tax (Investigation), that assessee company had introduced unaccounted money in its books of accounts during F.Y. 2007-08 relevant to A.Y. 2008-09 the assessment was reopened u/s 147 of the Act. In response to notice u/s 148 of the Act the assessee submitted that return of income filed on 29.02.2016 may be treated as its return of income filed against notice u/s 148 of the Act. Considering the submissions furnished on behalf of assessee during assessment proceedings the AO completed the assessment u/s 147 read with section 143(3) of the Act at Rs. 1,05,31,500/- by adding Rs. 1,05,18,095/- on account of income from undisclosed sources. Aggrieved against this the assessee preferred appeal before learned CIT(A), who dismissed the appeal and affirmed the addition made by the AO. Aggrieved against this now the assessee is in appeal before this Tribunal.
4. We have heard learned DR and gone through the material available on record. Apropos to the grounds of appeal, learned DR supported the orders of the authorities below. In respect of grounds no. 1 to 1.5, which are against reopening of the assessment, learned DR submitted that the Assessing Officer on the basis of information received from Investigation Wing that during F.Y. 2007-08 relevant to A.Y. 2008-09 assessee company had introduced unaccounted money in its books of account and thus income had escaped assessment reopened the assessment for the year under appeal. She submitted that there is no infirmity into the order of Assessing Authority as the Assessing Authority had duly considered the objections of the assessee and disposed of the same as per law. In appeal, the learned CIT(A) affirmed the action of the AO. He relied upon the orders of authorities below on the issue in question.
5. After going through the orders of authorities below and considering the submissions of the learned DR we find that the learned CIT(A) after discussing the facts in detail and considering the case laws referred to before him concluded that AO had sufficient material before him to arrive at satisfaction for reopening the assessment. He, accordingly, upheld the action of AO in reopening the assessment. Before us, Assessee could not controvert the finding of authorities below in reopening of assessment by placing any contrary material on record. We see no reason to deviate from the finding of learned CIT(A) on the issue of reopening of assessment. Accordingly, grounds no. 1 to 1.5 of assessee’s appeal are dismissed.
6. Apropos to ground no. 2 relating to the addition of Rs. 1,05,31,500/- made by the AO on account of unexplained cash deposits in the bank account and affirmed by the learned CIT(A), learned DR submitted that the learned CIT(A) in upholding the additions made by the AO has duly considered the explanation offered by the assessee. He submitted that learned CIT(A) has given a well reasoned findings and the same do not call for any interference.
7. It is noticed that with regard to addition of Rs. 1,05,31,500/- the learned CIT(A) confirmed the addition made by the AO, inter alia, by observing as under:
“6.3 I have examined the facts at hand and the submissions of the appellant. The report of the Investigation Authorities was comprehensive and was based on enquiries carried out by them. The report of the Investigation Authorities revealed the modus operandi and the manner of earning hitherto undisclosed income, and utilization/ investment of same. The meagre figures of income are a pointer to this fact. The appellant has pointed out that the ground on which assessment was reopened does not form part of final addition. In this connection, I note that the reason for reopening of assessment was that income of the appellant, which had not been offered for taxation. The figure of the same was taken at Rs. 50,00,000/-. However, the figure is varied upwards, and in the assessment order addition amounting to Rs. 1,05,31,500/- was made being unexplained cash deposits in the bank account. ……….. .
It is also noted that during the course of assessment proceedings, in spite of being specifically required, the appellant failed to furnish proof of purchase of milk from companies being vendors and repeatedly failed to present books of accounts. The whole scheme is indicative of deposit of cash in the bank account to generate balance in the bank giving it a garb of explained money. I agree with the AO that the appellant deliberately failed to produce all books of accounts during the assessment proceedings.
On the basis of my analysis as aforesaid, I uphold the AO’s finding that the source of cash generation (which has been deposited in bank account), does not stand established as neither the purchases nor the sale have been proved.”
8. After carefully going through the order of learned CIT(A) we find that in confirming the impugned addition of Rs. 1,05,31,500/- made by the AO the learned CIT(Appeals) has duly examined the explanation offered by the assessee and has given categorical finding that assessee deliberately failed to produce all books of accounts during the assessment proceedings. No material evidence to the contrary has been filed by the assessee. Therefore, we do not find any reason to interfere in the finding of learned CIT(A). Same is hereby affirmed. Ground no. 2 is rejected.
10. Appeal of the assessee is dismissed.
Order pronounced in open court on 24th September, 2024.
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