Case Law Details
The assessee has failed to bring on record any evidence to establish his claims that the deposits in the ICICI Bank, saving bank account at Khar (W), Mumbai was out of receipts connected with his business transactions. In our view the assessee has failed to controvert the findings of the authorities below that he was not engaged in any business activity during the year under consideration. Therefore, in our considered opinion, the said unexplained deposits amounting to Rs. 27,10,812/-, the source of which has not been satisfactorily explained by the assessee, has been correctly treated as unexplained money under section 69A of the Act and brought to tax in the assessee’s hands.
RELEVANT EXTRACT OF ITAT JUDGMENT
2. The facts of the case, briefly, are as under: –
2.1 The assessee, said to be in business as a travel agent/ ready made garments, did not file his return of income for A.Y. 2009- 10 as required by the provisions of section 139 of the Income Tax Act, 1961 (in short ‘the Act’). Subsequently, proceedings were initiated under section 147 of the Act and the Assessing Officer (AO) states that after recording reasons, notice under section 148 of the Act was issued on 29.02.2012. In response thereto, the assessee filed a return of income for A.Y. 2009- 10 on 22.03.2012 and scrutiny assessment proceedings were taken up by issue of statutory notices under section 143(2)/142(1) of the Act and questionnaire calling for details from the assessee. The AO observed that inspite of many opportunities afforded to the assessee, complete details as required by the questionnaire were not filed and therefore the assessee was issued a show cause notice on 01.03.2013 requiring him to furnish all details called for by notices issued under section 142(1) of the Act and questionnaires. Since the assessee failed to comply with the show cause notice issued, the AO proceeded to complete the assessment exparte based on the material available on record. In the course of proceedings the AO observed that the assessee is maintaining the following two accounts: –
(i) Current Account in Cosmos Bank, Vashi (CA NO. 029100104831) with credits of Rs. 6,00,000/-
(ii) SB Account with ICICI Bank, Khar (W), Mumbai (SB A/c No. 0033801515998) with total credits of Rs. 27,10,812/- inclusive of cash credits of Rs. 16,24,327/-
In the absence of any plausible explanation, the Assessing Officer proceeded to bring to tax in the assessee’s hands Rs. 27,10,812/- under section 68 of the Act under the head income from other sources. On the basis of material on record, the AO also concluded that the assessee was not carrying on any business during the year, as no evidence of carrying out any business was ever placed before him by the assessee. The assessment was completed under section 144 r.w.s. 147 of the Act vide order dated 20.03.2013 wherein the income of the assessee was determined at Rs. 27,10,812/- entirely under the head ‘income from other sources’.
2.2 Aggrieved by the order of assessment dated 20.03.2013 for A.Y. 2009- 10, the assessee preferred an appeal before the CIT(A)-33, Mumbai raising various contentions. On account of non appearance/attendance by the assessee in appellate proceedings also, the learned CIT(A) dismissed the assessee’s appeal exparte vide impugned order dated 23.09.2014. While doing so, he was of the view that the AO ought not to have made the said addition under section 68 of the Act and being of the opinion that the provisions of section 69A of the Act are attracted in the case on hand, directed the AO to treat the amount of Rs. 27,10,812/- being credit in ICICI Bank, Khar (W), Mumbai as unexplained money under section 69A of the Act.
3.1 Aggrieved by the order of the CIT(A)-33, Mumbai dated 23.09.2014 for A.Y. 2009- 10, the assessee has filed this appeal before the Tribunal raising the following grounds: –
“1) Ld. CIT(A) failed in confirming action of Assessing Officer taxing deposit of Rs.27,10,812/- as Unexplained cash credit U/s. 68 of the IT Act, 1961.
2) Ld. CIT(A) failed to appreciate that source of deposit in Bank A/c were related to business transaction.
3) Ld. CIT(A) failed to appreciate that deposit in Bank A/c were from business receipts, out of Opening Cash Balance and out of cash withdrawal from Bank Account and same was shown in cash statement.
4) The Appellant craves the right to leave, to amend, to alter or to delete any of the above grounds.”
3.2 This appeal for A.Y. 2009- 10 was fixed for hearing on many dates, but the record shows that on all the dates of hearing, neither was anybody present for the assessee nor was any adjournment sought on his behalf. Even issue of four notices for hearing to the assessee by RPAD did not evoke any response or compliance by the assessee. We may mention here that even before the authorities below, the AO passed the orders of assessment for the year under consideration exparte under section 144 r.w.s. 147 of the Act due to non appearance before the AO and non filing of details called for and the learned CIT(A) passed the impugned order exparte on the basis of material on record, due non appearance for the many hearings fixed before him. In the situation of the case on hand, as discussed above, it appears to us that the assessee is not interested in pursuing this appeal seriously and we therefore proceed to dispose off this appeal on the basis of material on record and with the assistance of the learned D.R. for Revenue who was present and ready to argue Revenue’s case.
3.3.1 We have heard the learned D.R. for Revenue and perused and carefully considered the material on record. The grounds raised by the assessee at S.No. 1 to 4 (supra) challenge the action of the learned CIT(A) in upholding the AO’s action in taking the deposits of Rs. 27,10,812/- in the assessee’s hands without appreciating that the source of deposits in the ICICI Savings Bank Account at Kher (W), Mumbai were receipts from/ related to business transactions and out of cash withdrawals which were shown in the cash statement. In the impugned order, the learned CIT(A) has considered and dealt with this issue at paras 6.1 to6.5 of the impugned order as under: –
6.1 The facts of the case are that the assessment u/s.144 was completed after affording various opportunities to the assessee to substantiate his claim. During the course of assessment proceedings, the AO noted that the assessee is maintaining two bank accounts one is current account with Cosmos Bank, Vashi and other is savings account with ICICI bank, Khar having balance of Rs. 27,10,812/-. As no one attended before the A.O, in the absence any plausible explanation he added Rs. 27,10,812/- u/s 68, under the head income from other sources. The AO further noted that in the return of income filed, assessee had shown his business as travel agent whereas in the submission filed on 27.3.2012 by the A.R. assessee’s business was shown as that of ready made garments. In view of this and also coupled with the fact that no details or evidences of carrying out business were produced, the AO concluded that the assessee was not carrying out any business during the year.
6.2 I have gone through assessment order and statement of facts filed before me. It is undisputed fact that the appellant was maintaining savings bank account with ICICI bank. It is only on reopening of the assessment by the department, the fact of having bank account by the appellant was discovered. I am unable to understand why these deposit in the said bank account were not considered while computing total income in view of the fact that the appellant himself was maintaining impugned bank account. It would be apt to mention that assessee’s residence and the current account with cosmos bank from where generally the business is operated are in Vashi whereas the impugned bank account with ICICI bank is in Khar. Even in PAN database against office address, the address mentioned is 3-4, B-10/55, Sector- 15, Vashi, Navi Mumbai- 400703.
6.3 The main plank of appellant’s argument in statement of facts is that being a reseller of garments, he had declared more than what is required to be shown u/s 44AF of the Act. That section 44AF is a presumptive scheme of computation of taxation and by which the assessee need not maintain books of accounts. That is fact was overlooked by the A.O. and proceeded to tax full credit u/s 68 of the Act.
6.4 I have considered this plea of the appellant and I am in agreement with the appellant in as much as the addition should not have been made u/s 68 of the Act. In my view, in the absence of any books maintained by the appellant, provisions of section 69A are attracted in the instant case. AO, is therefore, directed to treat the amount of Rs. 24,38,819/- as unexplained money under section 69A of the Act.
6.5 As regards contention of the appellant that he had declared profit at higher than what is required u/s 44AF, in my considered opinion, is only a afterthought action of the appellant to cover up his undisclosed income. The appellant is not negating the possession of bank account and balance in it. However, the question remained unanswered that why these deposits were not offered to taxation. Thus, on merit also, the ground taken by the appellant is dismissed.”
3.3.2 On a perusal of the orders of the authorities below and an appreciation of the facts on record, we find that as argued by the learned D.R. for Revenue, except for raising the grounds of appeal (supra), the assessee has failed to bring on record any evidence to establish his claims that the deposits in the ICICI Bank, saving bank account at Khar (W), Mumbai was out of receipts connected with his business transactions. In our view the assessee has failed to controvert the findings of the authorities below that he was not engaged in any business activity during the year under consideration. Therefore, in our considered opinion, the said unexplained deposits amounting to Rs. 27,10,812/-, the source of which has not been satisfactorily explained by the assessee, has been correctly treated as unexplained money under section 69A of the Act and brought to tax in the assessee’s hands. In this view of the matter, and finding no reason to interfere with the decision of the learned CIT(A) in the impugned order, we uphold the same. Consequently, the grounds at S. No. 1 to 4 raised by the assessee being devoid of merit are dismissed.
