S.P. Prasad, Bangalore v. ACIT, Bangalore

ITA 1006/BANG/2009 | 2005-2006
Pronouncement Date: 29-01-2010 | Result: Dismissed

Appeal Details

RSA Number 100621114 RSA 2009
Assessee PAN GHING7614G
Bench Bangalore
Appeal Number ITA 1006/BANG/2009
Duration Of Justice 2 month(s) 26 day(s)
Appellant S.P. Prasad, Bangalore
Respondent ACIT, Bangalore
Appeal Type Income Tax Appeal
Pronouncement Date 29-01-2010
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted A
Tribunal Order Date 29-01-2010
Assessment Year 2005-2006
Appeal Filed On 03-11-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : BANGALORE BEFORE SHRI GEORGE GEORGE K. JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY ACCOUNTANT MEMBER ITA NOS. 1001 TO 1006/BANG/2009 ASSESSMENT YEAR : 1999-2000 & 2001-02 TO 2005-06 SHRI S.P. PRASAD NO.513 16 TH CROSS II STAGE INDIRANAGAR BANGALORE 560 038. : APPELLANT VS. THE ASSISTANT COMMISSIONER OF INCOME TAX CENTRAL CIRCLE 1(2) BANGALORE. : RESPONDENT APPELLANT BY : SHRI H.N. KHINCHA RESPONDENT BY : SMT. JACINTA ZIMIK VASHAI O R D E R PER A. MOHAN ALANKAMONY ACCOUNTANT MEMBER THESE SIX APPEALS ARE DIRECTED AGAINST THE ORDERS OF THE CIT(A)-VI BANGALORE IN ITA NOS: 128 127 108 129 125 & 126/A CIT CC 1(2)/CIT(A)- VI/2007-08 DATED: 23.9.2009 FOR THE ASSESSMENT YEAR S 1999-2000 2001-02 2002-03 2003-04 2004-05 & 2005-06 [PENALTIES U/S 271(1)(C) OF THE ACT]. 2. THE ASSESSEE HAS RAISED SEVEN IDENTICAL GROUNDS IN ALL THESE SIX APPEALS. GROUND NOS:1 6 AND 7 BEING GENERAL AND N O SPECIFIC ISSUES INVOLVED THEY ARE CONSIDERED AS NON-CONSEQUENTIAL. IN THE RE MAINING GROUNDS THE CRUX OF THE GRIEVANCE OF THE ASSESSEE CAN AT BEST BE R EFORMULATED IN A CONCISE MANNER AS UNDER: ITA NO.1001 TO 1006/BANG/09 PAGE 2 OF 13 THE AO HAD ERRED IN ASSUMING JURISDICTION U /S 271(1)(C ) OF THE ACT AND THAT THERE BEING NO PROPER JURISDICTION THE IMPUGNED OR DER WAS BAD IN LAW WHICH REQUIRES TO BE QUASHED. - THE CIT(A) HAS ERRED IN CONFIRMING THE SAME INSTE AD OF QUASHING THE IMPUGNED ORDERS. A.Y 1999-2000 ITA NO: 1001/09: 3. THE HISTORY OF THE CASE IN BRIEF IS THAT THE A SSESSEE AN INDIVIDUAL CARRYING ON THE BUSINESS IN JEWELLERY. THERE WAS A SEARCH OPERATION U/S 132 OF THE ACT ON 23.7.2004 IN THE PREMISES OF S.P.NARASIM HALU THE FATHER OF THE ASSESSEE AND UNEARTHED BOOKS OF ACCOUNT DOCUMENTS CASH JEWELLERY BELONGED TO THE ASSESSEE AND ON SUBSEQUENT SCRUTINY OF SEIZED DOCUMENTS REVEALED THAT THE ASSESSEE HAD MADE INVESTMENTS IN THE FORM OF DEPOSITS CONTRIBUTION TO CHIT FUND AND ALSO MADE ADVANCES. 3.1. THE ASSESSMENT WAS CONCLUDED U/S 153C RWS 143( 3) OF THE ACT ON A TOTAL INCOME OF RS.2.34 LAKHS AS AGAINST RS.60000/- ADMITTED BY THE ASSESSEE. WHILE DOING SO RS.126000/- AND RS.48100/- WERE TRE ATED AS UNEXPLAINED CREDITS AND EXCESS OF ASSETS OVER LIABILITIES RESP ECTIVELY. SIMULTANEOUSLY INITIATION OF PENAL PROCEEDINGS BY ISSUANCE OF A N OTICE U/S 271(1)(C ) OF THE ACT THE ASSESSEE WAS ASKED TO SHOW-CAUSE AS TO WHY A PENALTY SHOULD NOT BE IMPOSED. 3.2. AFTER DULY CONSIDERING THE FORCEFUL CONTENTION S OF THE ASSESSEE WHICH WERE COUPLED WITH VARIOUS CASE LAWS THE AO FOR TH E ELABORATE REASONS SET-OUT IN THE IMPUGNED ORDER HAD IMPOSED A PENALTY OF RS. 43 500/- U/S 271(1)( C) OF THE ACT. 4. AGGRIEVED THE ASSESSEE TOOK UP THE ISSUE WITH T HE LD. CIT (A) FOR RELIEF. THE GROUNDS RAISED BEFORE THE CIT(A) WERE TWO-FOLD NAMELY: (I) CHALLENGING THE JURISDICTION OF THE AO IN INITIATIN G PENAL PROCEEDINGS U/S 271(1)(C ) OF THE ACT; & ITA NO.1001 TO 1006/BANG/09 PAGE 3 OF 13 (II) IMPOSING OF PENALTY U/S 271(1) (C ) OF THE ACT. 4.1. AFTER DUE CONSIDERATION OF THE ASSESSEES CONT ENTIONS THE CIT (A) WAS OF THE VIEW THAT (I) 2.6..THE ASSESSMENT ORDER PASSED BY THE ASSESSME NT ORDER (SIC) ASSESSING OFFICER UNDER SECTION 153C RWS 143(3) HAS BEEN ACCEPTED BY THE APPELLANT BY NOT FILING ANY APPEAL AGAINST THE ASS ESSMENT ORDER; - PROCEEDINGS UNDER SECTION 271(1)(C) ARE IN CONSEQUE NCE TO THE SATISFACTION OF THE ASSESSING OFFICER IN CONSEQUENCE TO THE PROCEED INGS UNDER THE ACT. ONCE THE ASSESSING OFFICER IS SATISFIED AND THE NOTICE U NDER SECTION 271(1)(C) IS ISSUED THE PROCEEDINGS ARE VALID; - THE PRESENT APPEAL IS AGAINST THE ORDER PASSED UNDE R SECTION 271(1)(C) AND NOT AGAINST THE ASSESSMENT ORDER PASSED U/S 153C R.W.S 143(3) OF I.T. ACT. THEREFORE THE ISSUE HERE FOR DECISION IS THE LEVY OF PENALTY U/S 271(1)(C) AND NOT THE LEGALITY OF ASSESSMENT ORDER. AS THE ASSES SMENT ORDER HAS ALREADY BEEN ACCEPTED BY THE APPELLANT; & - THE APPELLANTS RELIANCE ON THE DECISION IN THE CAS E OF MANISH MAHESWARI (QUOTED SUPRA) IS NO HELP TO THE APPELLANT AS THE APPELLANT HAS NEVER QUESTIONED THE ILLEGALITY OF THE ASSESSMENT ORDER P ASSED UNDER SECTION 153C R.W.S. 143(3) WHICH HAVE BECOME FINAL IN THE ABSENC E OF ANY APPEAL AGAINST THE SAID ORDER. (II) 3.3. IN THE CASE OF THE APPELLANT THE APPELLANT A S PER HIS REPLY DATED: 30.11.06 ADMITTED THAT HE IS UNABLE TO PRODUCE THE CREDITOR IN WHOSE NAME CREDITS OF RS.126000/- WERE INTRODUCED DURING THE Y EAR. IN REGARD O THE ADDITION OF RS.48100/- TOWARDS EXCESS OF ASSET OVER LIABILITIES THE APPELLANT SUBMITTED THAT THERE IS NO ERROR IN ACCOUNTING OF D RAWINGS DRAWINGS ARE PROPERTY SHOWN IN THE CAPITAL ACCOUNT AND BALANCE S HEET. THE APPELLANTS ARGUMENT CANNOT BE ACCEPTED IN VIEW OF THE ADMISSIO N BY THE APPELLANT THAT THE AMOUNTS REPRESENT MISCELLANEOUS RECEIPTS. FURT HER THE APPELLANT EVEN THOUGH IN THE WRITTEN SUBMISSION HAS STATED THAT TH E COPY OF BALANCE SHEET AND CAPITAL ACCOUNT IS ENCLOSED TO PROVE THAT THERE WERE NO CONCEALMENT OF INCOME. HOWEVER FAILED TO FILE THE DOCUMENTS MENT IONED ALONG WITH THE SUBMISSION TO PROVE THE CONTENTION RAISED. 3.4. THE APPELLANTS CASE IS SQUARELY COVERED IN CL AUSE (A) TO EXPLANATION OF SECTION 271(1) ACCORDING TO WHERE IN RESPECT OF AN Y FACTS MATERIAL TO THE COMPUTATION OF THE TOTAL INCOME OF ANY PERSON UNDER THIS ACT SUCH PERSON FAILS TO OFFER AN EXPLANATION OR OFFERS AN EXPLANAT ION WHICH IS FOUND BY THE ASSESSING OFFICER TO BE FALSE THEN THE AMOUNT ADD ED OR DISALLOWED IN COMPUTING THE TOTAL INCOME OF SUCH PERSON AS A RESU LT THEREOF SHALL FOR THE PURPOSES OF CLAUSE (C) OF THIS SUB-SECTION BE DEEM ED TO REPRESENT THE INCOME IN RESPECT OF WHICH PARTICULARS HAVE BEEN CO NCEALED. 3.5. THE HONBLE SUPREME COURT OF INDIA IN THE CASE OF UNION OF INDIA AND ORS. V. DHARMENDRA TEXTILES PROCESSORS AND OTHERS ( 2007) 295 ITR 244 OBSERVED THAT IT MAY BE POINTED OUT THAT THE OBJECT BEHIND THE E NACTMENT OF SECTION 271(1)(C) READ WITH THE EXPLANATION IND ICATES THAT THE SAID SECTION HAS BEEN ENACTED TO PROVIDE FOR A REMEDY FO R LOSS OF REVENUE. THE PENALTY UNDER THE SAID SECTION IS A CIVIL LIABILITY WILLFUL CONCEALMENT IS NOT AN ESSENTIAL INGREDIENT FOR ATTRACTING THE CIVIL LI ABILITY AS IN THE CASE IN THE MATTER OF PROSECUTION UNDER SECTION 276 OF THE ACT. WHILE CONSIDERING AN APPEAL AGAINST AN ORDER MADE U/S 271(1)(C) WHAT IS REQUIRED TO BE EXAMINED IS THE RECORD WHICH THE OFFICER IMPOSING T HE PENALTY HAD BEFORE ITA NO.1001 TO 1006/BANG/09 PAGE 4 OF 13 HIM AND IF THAT RECORD CAN SUSTAIN THE FINDING THAT THERE HAS BEEN CONCEALMENT THAT WOULD BE SUFFICIENT TO SUSTAIN TH E PENALTY. 5. DISENCHANTED THE ASSESSEE HAS COME UP WITH THE PRESENT APPEAL. THE REITERATION OF THE LD. A.R MORE OR L ESS WHAT WAS URGED BEFORE THE FIRST APPELLATE AUTHORITY. IN FURTHERANCE IT WAS SUBMITTED THAT (I) THE CIT(A) ERRED IN SUSTAINING THE PENALTY IMPOSED WITHOUT APPRECIATING AND CONSIDERING THE CONTENTIONS RAISED IN THE COURSE OF APPELLATE PROCEEDINGS AND WRITTEN SUBMISSIONS; (II) THE CIT(A) CONCLUSION THAT THE LEGALITY OF ASSESSM ENT ORDER WAS NOT AN ISSUE DURING THE PENALTY PROCEEDINGS WAS NOT SUPPOR TED BY LAW; & (III) THE ASSESSEE HAD NEITHER CONCEALED THE PARTICULARS OF INCOME NOR FURNISHED ANY INACCURATE PARTICULARS OF INCOME AND THUS THE L EVY OF PENALTY WAS BAD IN LAW WHICH REQUIRES TO BE CANCELLED. 5.1. ON THE OTHER HAND THE LD. D R WAS VERY FIRM I N HER RESOLVE THAT THE ASSESSING OFFICER HAD IN FACT AFTER GIVING DUE WE IGHT-AGE TO THE ASSESSEES EXPLANATION AND ALSO EXTENSIVELY QUOTING THE JUDICI AL PRONOUNCEMENTS HELD THAT THE ASSESSEE HAD CONCEALED HIS PARTICULARS OF INCOME AND FURNISHED INACCURATE PARTICULARS OF INCOME. IT WAS THEREFOR E PLEADED THAT THE STAND OF THE AUTHORITIES BELOW BE SUSTAINED. 6. WE HAVE DULY CONSIDERED THE RIVAL SUBMISSIONS AN D DECISIVELY PERUSED THE RELEVANT RECORDS. (I) WITH REGARD TO THE ASSESSEES ALLEGATION THAT T HE AO HAD ERRED IN ASSUMING JURISDICTION U/S 271(1)(C ) OF THE ACT AND THAT THERE BEING NO PROPER JURISDICTION WE WOULD LIKE TO MAKE IT CRYSTAL CLEA R THAT IN THE IMPUGNED ORDER IT WAS MENTIONED THAT PENALTY PROCEEDINGS UNDER SECTI ON 271(1)(C) INITIATED SEPARATELY. SIMULTANEOUSLY A NOTICE U/S 271 (1)( C) OF THE ACT (INITIATING PENAL PROCEEDING) HAD ALSO ACCOMPANIED THE IMPU GNED ASSESSMENT ORDER. THE ARGUMENT OF THE LD. AR THAT THE SIGNATURE OF TH E ASSESSING OFFICER IS ABOVE THE MENTION OF THE SENTENCES:- ISSUE D.N. AND CHALLAN. PENALTY PROCEEDINGS U/S. 271(1)(C) INITIATED SEPAR ATELY. ITA NO.1001 TO 1006/BANG/09 PAGE 5 OF 13 - AND THEREFORE THE PENALTY PROCEEDINGS ARE INVALI D DOES NOT HOLD ANY WATER BECAUSE THE ENTIRE ORDER IS COMPUTER GENERATED. TH E SENTENCES REFERRED ABOVE EXISTED BEFORE THE LD. AO PENNED HIS SIGNATUR E. IT CANNOT BE CONSTRUED THAT THESE SENTENCES WERE GENERATED SUBSEQUENTLY AN D THEREFORE NOT AUTHORIZED BY THE ASSESSING OFFICER. IT ALSO CANNO T BE CONSIDERED TO BE AN AFTERTHOUGHT. WE THEREFORE DISMISS THIS PLEA RAISE D BY THE ASSESSEE. AS RIGHTLY HIGHLIGHTED BY THE CIT(A) DURING THE A SSESSMENT YEAR UNDER DISPUTE THE ASSESSEE HAD SHOWN INTRODUCTION OF RS .1.26 LAKHS IN THE FORM OF CREDITORS. HOWEVER THE ASSESSEE HAD NEITHER PRODU CED THE CREDITORS NOR PROVIDED THEIR IDENTITIES CREDIT WORTHINESS AND THE GENUINENESS OF SUCH TRANSACTION. IN RESPECT OF ALLEGED MISCELLANEOUS R ECEIPTS OF RS.48100/- WHICH HAS BEEN CAPITALIZED IN THE ACCOUNTS THE ASSESSEE HAD FAILED TO EXPLAIN THE SOURCE FOR SUCH CREDIT. ACCORDINGLY THE AO HAD AD DED RS.1.26 LAKHS AS UNEXPLAINED CREDIT U/S 68 OF THE ACT AND ALSO RS.48 100/- AS SOURCES FOR SUCH CREDITS INTRODUCED IN THE BALANCE SHEET WERE NOT FO RTH-COMING SATISFACTORILY. ACCORDING TO S.271 (1)(C) OF THE ACT IF THE ASSE SSING OFFICER IN THE COURSE OF ANY PROCEEDINGS UNDER THIS ACT IS SATISF IED THAT ANY PERSON HAS CONCEALED THE PARTICULARS OF HIS INCOME OR FURNISHE D INACCURATE PARTICULARS OF INCOME HE MAY DIRECT THAT SUCH PERSON SHALL PAY BY WAY OF PENALTY AS PRESCRIBED IN CLAUSE (III) OF SUB-SECTION 1 OF S.27 1. IN THE CASE ON HAND THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDING WAS SATISFIED THAT THE ASSESSEE HAD DEFAULTED UNDER CLAUSE (C) OF SUB-SECTION (1) OF S.271. ACCORDINGLY HE HAD RECORDED THE INITIATION OF THE PENAL PROCEEDINGS IN THE ASSESSMENT ORDER AND A NOTICE U/S 271(1)(C) OF THE ACT ACCOMPANYING THE ASSESSMENT ORDER WAS SERVED ON THE ASSESSEE. IN VIEW OF THE ABOVE WE ARE IN A FIRM VIEW THAT T HE ISSUANCE OF NOTICE U/S 271(1)(C) OF THE ACT WAS IN CONFORMITY WITH THE PROVISIONS OF THE ACT AND THE AO WAS WITHIN HIS DOMAIN (JURISDICTION) IN DOIN G SO. THEREFORE THE ITA NO.1001 TO 1006/BANG/09 PAGE 6 OF 13 CONTENTION OF THE ASSESSEE THAT THE AO HAD NO PROPE R JURISDICTION U/S 271(1)(C) OF THE ACT DOESNT HAVE LEGS TO STAND AND THEREFOR E THE PLEA OF THE ASSESSEE IS DISMISSED. (II) WITH REGARD TO THE ASSESSEES CONTENTION THAT THE CIT(A)S CONCLUSION THAT THE LEGALITY OF ASSESSMENT ORDER WAS NOT AN I SSUE DURING THE PENAL PROCEEDINGS WAS NOT SUPPORTED BY LAW IT IS PERTIN ENT TO NOTE THAT THE ISSUE BEFORE THE APPELLATE AUTHORITY WAS PROCEEDING U/S 2 71(1)(C) OF THE ACT. SINCE THE ASSESSEE HAD NOT CHALLENGED THE VERACITY OF THE ASSESSMENT ORDER PASSED U/S 153C RWS 143(3) OF THE ACT IT HAS BECOME FINAL AND IN OTHER WORDS THE FINDING OF THE AO HAS BEEN CONCEDED TO BY THE ASSES SEE IN TOTO. FURTHER THE ASSESSEE HAD CHALLENGED THE PENALTY IM POSED U/S 271(1) (C) OF THE ACT BEFORE THE LD. CIT(A) THE CIT (A) WAS EXPE CTED TO CONFINE TO THE ISSUE WHICH HAS BEEN AGITATED BEFORE HIM AND NOT TO INDUL GE IN TO CONSIDER THE LEGALITY OR OTHERWISE OF THE ASSESSMENT PROCEEDING WHICH WAS NOT BEFORE HIM AND THUS THE CIT(A) WAS WITHIN HIS DOMAIN TO OBSE RVE THAT THE ISSUE WAS THE CORRECTNESS OR OTHERWISE OF LEVY OF PENALTY U/S 271(1)(C) AND NOT THE LEGALITY OF ASSESSMENT ORDER. (III) WITH REGARD TO THE ASSERTION OF THE ASSESSEE THAT HE HAD NEITHER CONCEALED THE PARTICULARS OF INCOME NOR FURNISHED A NY INACCURATE PARTICULARS OF INCOME AND THUS THE LEVY OF PENALTY WAS BAD IN LAW WHICH REQUIRES TO BE CANCELLED. FOR PROPER UNDERSTANDING OF THE ISSUE WE SHALL BRI NG OUT THE SEQUENCE OF EVENTS IN BRIEF AS UNDER: (A) THE ASSESSEE WAS REQUIRED BY THE AO TO PRODUCE THE CREDITORS FOR VERIFICATION OF THEIR IDENTITY CREDIT WORTHINESS A ND GENUINENESS OF THE TRANSACTION; - THE ASSESSEE IN HIS LETTER DT.30.11.06 SUBMIT TED THAT THE CREDITORS WERE VERY NATURAL IN THEIR LINE OF BUSINESS AND THEY WER E NOT WILLING TO COME AND EXPLAIN THE TRANSACTION; ITA NO.1001 TO 1006/BANG/09 PAGE 7 OF 13 - IN THE ABSENCE OF DETAILS AND NON-PRODUCTION OF CREDITORS FOR VERIFICATION ETC. IT WAS HELD THAT CREDITORS WERE NOT GENUINE A ND ACCORDINGLY TREATED RS.1.26 AS UNEXPLAINED CREDITS FOR WHICH THE A.R. H AD NO OBJECTION. - IN THE ABSENCE OF PROPER CLARIFICATION RS.48100 /- WAS TREATED AS THE ASSESSEES INCOME. - PENAL PROCEEDINGS WERE INITIATED U/S 271(1)(C) FO R CONCEALMENT AND FURNISHING OF INACCURATE PARTICULARS; (B) BEFORE THE APPELLATE AUTHORITY IT WAS CO NTENDED THAT THE CREDITOR DID NOT CO-OPERATE WITH THE APPELLANT BECAUSE THEY HAVE A P RE-CONCEIVED NOTION REGARDING JUDICIAL PROCEEDINGS INCLUDING I.T. PROVISION. THE APPELLANT COULD NOT FORCE THEM BUT THE I.T.DEPT. HAS VESTED WITH THE POWERS COULD HAVE VERIFIED BY ISSUING SUMMONS; - THE OBSERVATION OF THE CIT(A) WAS THAT 3.2 IN T HE CASE OF CASH CREDITS ONUS LIES ON APPELLANT TO PROVE THE IDENTITY AND CA PACITY OF THE PERSON AND GENUINENESS OF THE TRANSACTION. THE HONBLE SUPREM E COURT IN THE CASE OF KALEKHAN MOHD HANEEF V. CIT 50 ITR 1 HELD THAT IT IS WELL ESTABLISHED THAT ONUS OF PROVING THE SOURCE OF SUM OF MONEY FOUND TO HAVE BEEN RECEIVED BY THE APPELLANT IS ON HIM. IF HE DISPUTES LIABILITY FOR TAX IT IS FOR HIM TO SHOW EITHER THAT THE RECEIPT WAS NOT INCOME OR THAT IF IT WAS IT WAS EXEMPT FROM TAXABLE INCOME. IN THIS CASE THE APPELLANT FAILED TO PRO DUCE THE CREDITORS THE VARIOUS DECISION DISCUSSED BELOW CLEARLY INDICATES THAT THE BURDEN LIES ON THE APPELLANT TO PROVE THE CREDIT INTRODUCED IN THE BOOKS OF ACCO UNTS. (C) EVEN BEFORE US NO TANGIBLE DOCUMENTARY EVIDENC E WAS PRODUCED TO REBUT THE LOWER AUTHORITIES STAND. IN VIEW OF THE ABOVE WE ARE OF THE CONSIDERED VIEW THAT THE ASSESSEE HAD FAILED TO DISCHARGE THE ONUS CAST ON HIM. IN AN OVERALL CONSIDERATION OF THE FACTS AND CIRCUM STANCES OF THE ISSUE AS DISCUSSED IN THE FORE-GOING PARAGRAPHS WE ARE OF T HE UNANIMOUS VIEW THAT (I) THE AO WAS JUSTIFIED IN INVOKING THE PROVISIONS OF S.271(1)(C) OF THE A CT AND IMPOSING THE PENALTY UNDER THE SAID SECTION OF THE ACT AND (II) THE LD. CIT(A) WAS JUSTIFIED IN CONFIRMING THE AOS STAND. IT IS ORDERED ACCORDINGLY. ITA NO.1001 TO 1006/BANG/09 PAGE 8 OF 13 II . A.Y 2001-2002 ITA NO: 1002/09 7. THE ISSUES AGITATED TO AND THE ARGUMENT OF THE L D. A R FOR THE ASSESSMENT YEAR UNDER DISPUTE WERE SIMILAR TO THAT OF THE ASSESSMENT YEAR 1999-2000 REFERRED SUPRA. 7.1. AS THE ISSUES RAISED ARE SIMILAR AND IDENTICAL FOR THE ASSESSMENT YEAR UNDER DISPUTE THE DETAILED REASONS RECORDED AND OU R FINDINGS FOR THE AY 1999- 2000 ARE HOLD GOOD FOR THIS ASSESSMENT YEAR TOO. IT IS ORDERED ACCORDINGLY. III . A.Y 2002-2003 ITA NO: 1003/09: 8. AS THE ISSUES RAISED ARE SIMILAR AND IDENTICAL F OR THE ASSESSMENT YEAR UNDER DISPUTE THE DETAILED REASONS RECORDED AND OU R FINDINGS FOR THE AY 1999- 2000 ARE HOLD GOOD FOR THIS ASSESSMENT YEAR TOO. IT IS ORDERED ACCORDINGLY. IV . A.Y 2003-2004 ITA NO: 1004/09: 9. AS THE FIRST ISSUE RAISED IS SIMILAR AND IDENTIC AL FOR THE ASSESSMENT YEAR UNDER DISPUTE THE DETAILED REASONS RECORDED AND OU R FINDINGS FOR THE AY 1999- 2000 ARE HOLD GOOD FOR THIS ASSESSMENT YEAR TOO. 9.1. FURTHER THE AO HAD MADE AN ADDITION OF RS.932 5/- AS INTEREST ON CAPITAL WHICH WAS NOT OFFERED FOR TAXATION. THE VE RY FACT HAS PERHAPS BEEN CONCEDED DURING THE ASSESSMENT PROCEEDINGS BY THE A SSESSEE. BEFORE THE PENAL PROCEEDINGS TOO ACCORDING TO THE AO THE ASS ESSEE HAD NOT TAKEN ANY OBJECTION FOR THE INTEREST OF RS.9325/- ADDED. EVE N ON A CURSORY PERUSAL OF THE GROUNDS RAISED BEFORE THE CIT(A) THIS ISSUE WAS NO T FINDING A PLACE. HOWEVER THE CIT(A) IN THE IMPUGNED ORDER HAD MENTIONED THAT IN THE APPELLATE PROCEEDINGS ALSO IT IS EXPLAINED THAT INTEREST WAS NOT INCLUDED IN THE RETURN OF INCOME ONLY DUE TO OVERSIGHT AND BY INADVERTENCE. THE ARG UMENT OF THE APPELLANT IS NOT ACCEPTED IN VIEW OF THE FACT THE INTERESTS COULD BE BROUGHT TO TAX ONLY WHEN ON THE INVESTIGATION IT WAS FOUND BY THE ASSESSING OFFICE R THAT THE SAME HAS NOT BEEN OFFERED ITA NO.1001 TO 1006/BANG/09 PAGE 9 OF 13 FOR TAXATION. THEREFORE THE APPELLANT HAS COMMITT ED DEFAULT UNDER SECTION 271(1)(C) AND THEREFORE THE ASSESSING OFFICER WAS RIGHT IN IMPOSING PENALTY UNDER SECTION 271(1)(C) OF THE INCOME-TAX ACT IN REGARD TO THE AD DITION OF THE INTERESTS ALSO. 9.2. DURING THE COURSE OF HEARING BEFORE THIS BENCH NO SPECIFIC ARGUMENT WAS ADVANCED IN RESPECT OF THIS ISSUE. WE ARE THE REFORE IN TOTAL AGREEMENT WITH THE FINDING OF THE LD.CIT(A) ON THIS ISSUE. V . A.Y 2004-2005 ITA NO: 1005/09: 10. AS THE FIRST ISSUE RAISED IS SIMILAR AND IDENTI CAL FOR THE ASSESSMENT YEAR UNDER DISPUTE THE DETAILED REASONS RECORDED AND OU R FINDINGS FOR THE AY 1999- 2000 ARE HOLD GOOD FOR THIS ASSESSMENT YEAR TOO ON THIS COUNT. 10.1. FURTHER DURING THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR UNDER DISPUTE THE ASSESSING OFFICER HAD MADE ADDIT IONS AS UNDER: INVESTMENTS IN NSC RS. 65 000 PURCHASE OF TWO WHEELERS RS. 39 500 ON ACCOUNT OF EXCESS OF ASSET OVER LIABILITIES RS.4 60 000 INTEREST ACCRUED ON NSCS RS. 3 094 10.1.1. THE CONTENTION OF THE ASSESSEE IN BRIEF W AS THAT THE INVESTMENT IN NSC WAS MADE OUT OF DRAWINGS MADE FOR SEVERAL YE ARS. HOWEVER BEFORE THE CIT (A) IT WAS CONCEDED THAT THE INVESTMENT OF RS.65000/- BUT HAD FAILED TO EXPLAIN THE SOURCE OF SUCH INVESTMENT WITHOUT AN Y DOCUMENTARY EVIDENCE TO THE EFFECT THAT THE INVESTMENT WAS MADE OUT OF PAST SAVINGS. LIKEWISE THE INVESTMENTS ON TWO WHEELERS WERE OUT OF PAST SAVING S BUT NO PROOF WAS ADVANCED EVEN AT THIS STAGE OF HEARING. WITH REGARD TO UNEXPLAINED CREDIT OF RS.4.60 LAKHS THE ASSESSEES PLEA WAS THAT THERE W AS NO EXCESS CREDIT IN THE ASSESSEES BOOKS. THE CONTENTION OF THE ASSESSEE G OES AWRY AS THE AO AFTER INVESTIGATION HAD POINTED OUT THAT THE PERSONS FRO M WHOM SUCH CREDITS HAVE ALLEGEDLY BEEN SHOWN WERE NOT REFLECTED IN THE BOOK S OF THE SO CALLED CREDITORS. ITA NO.1001 TO 1006/BANG/09 PAGE 10 OF 13 ACCORDING TO THE AO THE ASSESSEE HAD CONCEDED THE SAME. DURING THE PENAL PROCEEDINGS THE ASSESSEES PLEA WAS THAT THERE WAS NO EXCESS LIABILITY SHOWN AND THUS THERE WAS NO EXCESS OF ASSETS OVER LIABI LITIES. AS NO DOCUMENTARY WAS FORTH-COMING THE AO HAD RIGHTLY BRUSHED ASIDE THE ASSESSEES CONTENTION. THE CIT(A) WAS ALSO UNMOVED BY THE ASSESSEES CONTE NTION WHICH WAS LACKING WITH ANY DOCUMENTARY PROOF TO THE CONTRARY. NO PRO OF WAS FORTH-COMING EVEN AT THIS STAGE OF HEARING AND AS SUCH WE HAVE BEEN LEFT WITH NO ALTERNATIVE BUT TO FALL IN LINE WITH THE STAND OF THE LOWER AU THORITIES. IT IS ORDERED ACCORDINGLY. VI . A.Y 2005-2006 ITA NO: 1006/09: 11. AS THE FIRST ISSUE RAISED IS SIMILAR AND IDENTI CAL FOR THE ASSESSMENT YEAR UNDER DISPUTE THE DETAILED REASONS RECORDED AND OU R FINDINGS FOR THE AY 1999- 2000 ARE HOLD GOOD FOR THIS ASSESSMENT YEAR TOO. 12. FURTHER DURING THE PREVIOUS YEAR RELEVANT TO T HE ASSESSMENT YEAR UNDER DISPUTE THE ASSESSING OFFICER HAD MADE ADDIT IONS AS UNDER: VALUE OF EXCESS GOLD FOUND DURING THE COURSE OF SEA RCH RS.254100 EXCESS CASH [UNACCOUNTED CASH] RS.892000 UNEXPLAINED VALUE OF GOLD JEWELLERY RS.260000 UNEXPLAINED CREDITS RS.286318 INTEREST ACCRUED ON NSC RS. 5740 I. VALUE OF EXCESS GOLD : DURING THE COURSE OF SEARCH GOLD JEWELLERY WEIGHING 7614 GMS WERE FOUND. FOR THE REASONS RECO RDED IN THE ASSESSMENT ORDER THE UNACCOUNTED JEWELLERY WORTH OF RS.254100 /- WAS BROUGHT TO TAX WITH THE CONSENT OF THE ASSESSEE. DURING THE PENAL PROCEEDINGS IT WAS ADMITTED BY TH E ASSESSEE THAT ACTUALLY THERE IS NO INCOME ELEMENT THEREIN. SINCE THERE IS NO DIFFERENCE IN STOCK IT IS NOT KNOWN AS TO HOW THAT EXCESS STOCK OF 484 GRAMS WAS ARRIVED AT. HOWEVER THE ADDITIONS ARE ACCEPTED ONLY TO BUY PEACE AND TO HAV E THE MATTER CLOSED. ITA NO.1001 TO 1006/BANG/09 PAGE 11 OF 13 BEFORE THE CIT(A) TOO THE SAME REASON WAS ORCHESTR ATED. AFTER CONSIDERING THE ASSESSEES ARGUMENT THE CIT(A) HAD OPINED THAT THE ABOVE ARGUMENT OF THE APPELLANT IS NOT ACCEPTABLE IN VIEW OF THE WORKING GIVEN BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER ACCORDING TO WHICH THE JEWELLERY W EIGHING 484 GMS REMAIN UNEXPLAINED. THE SAME WAS BROUGHT TO TAX AT THE AV ERAGE PURCHASE COST OF RS.525 PER GM WHICH HAS WORKED (OUT) TO RS.254100/-. THE SAME WAS ADDED TO INCOME. THE EXPLANATION OFFERED BY THE APPELLANT THUS PROVED FA LSE. II. EXCESS CASH : OUT OF CASH OF RS.1713850 FOUND RS.16 LAKHS WAS SE IZED. AFTER CONSIDERING THE EXPLANATION OFFERED AND EXAMI NING THE BOOKS PRODUCED THE AO HAD PROPOSED TO TREAT THE UNEXPLAINED CASH O F RS.8.92 LAKHS U/S 69A OF THE ACT FOR WHICH THE ASSESSEE HAD CONSENTED. DURING THE PENAL PROCEEDINGS THE ASSESSEES CRYPTI C REPLY WAS THAT .. I WISH TO SUBMIT THAT THERE IS NO UNEXPLAINED CASH AT ALL. THE SOURCES FOR THE CASH ARE DULY EXPLAINED. IT IS NOT KNOWN AS TO HOW THE EXCESS CA SH WAS ARRIVED AT. HOWEVER IN THE CIRCUMSTANCES OF THE CASE THE ADDITION WAS ACCEPTE D ONLY TO BUY PEACE AND TO AVOID PROTRACTED LEGAL PROCEEDINGS. BEFORE THE CIT(A) THE SAME SET OF REASONS WERE REI TERATED. BRUSHING ASIDE THE ASSESSEES STAND THE CIT(A) HAS OBSERVED THAT THE ABOVE ARGUMENT OF THE APPELLANT IS NOT ACCEPTABLE IN VIEW OF THE FINDING GIVEN BY THE ASSESSING OFFICER THAT THE APPELLANT HIMSELF FILED THE STATEMENT OF CASH BALAN CE BELONGING TO FAMILY MEMBERS THE EXAMINATION OF THE BOOKS OF ACCOUNTS RELIEVES (SIC) REVEALS THAT OUT OF RS.1713850/- FOUND DURING THE COURSE OF SEARCH THE AMOUNT OF RS .892000/- WAS REMAINED UNEXPLAINED HENCE THE SAME WAS ADDED TO THE TOTAL INCOME. THE APPELLANT DURING THE COURSE OF ASSESSMENT PROCEEDINGS ALSO AGREED IN REG ARD TO THE UNEXPLAINED CASH. III. UNEXPLAINED INVESTMENT IN GOLD JEWELLERY : ITA NO.1001 TO 1006/BANG/09 PAGE 12 OF 13 WHILE EXAMINING THE GOLD PURCHASES DURING THE PERIO D 1.4.04 TO 23.7.04 IT WAS CLAIMED BY THE ASSESSEE THAT THE GOLD JEWELLERY VALUED AT RS.2.6 LAKHS WAS BELONGING TO SMT.SUBBARATHNAMMA FOR WHICH THE ASSE SSEE HAD NEITHER PRODUCED THE SAID PERSON TO VERIFY THE AUTHENTICITY AND GENUINENESS NOR DISCHARGED THE ONUS OF THE PERSONS IDENTITY ADDRE SS AND CREDIT WORTHINESS ETC. ACCORDING TO THE AO THE ASSESSEE HAD CONSEN TED FOR THIS ADDITION. DURING THE PENAL PROCEEDINGS THE ASSESSEES CLAIM WAS THAT IN THIS CONNECTION I WISH TO STATE THAT THE CLAIM IS VERIFIABLE AND SM T. SUBBARATHNAMMA HAS ALSO CONFIRMED THAT JEWELLERY BELONGS TO HER. HOWEVER WITH A VIEW TO CO-OPERATE AND AVOID PROTRACTED PROCEEDINGS I HAVE ACCEPTED THIS ADDITI ON ALSO THOUGH IN FACT THE AMOUNT OF JEWELLERY BELONGED TO SMT. SUBBARATHNAMMA. ON THIS ISSUE THE CIT(A)S OBSERVATION WAS THAT THE ABOVE ARGUMENT OF THE APPELLANT CANNOT BE ACCEPTED THAT THE APPELLANT FAI LED TO PROVE HIS EXPLANATION THAT THE GOLD JEWELLERY VALUED AT RS.260000/- BELONGED TO SM T. SUBBARATHNAMMA. THE APPELLANT FAILED TO PRODUCE THE PERSON TO WHOM THE JEWELLERY CLAIMED TO BE BELONGING TO. EVEN AT THIS STAGE NO CONCRETE EFFORTS WERE MADE T O REBUT THE FINDINGS OF THE LOWER AUTHORITIES. BEFORE THE CIT (A) IT WAS CONC EDED THAT THE ADDITIONS WERE ACCEPTED ONLY TO BUY PEACE AND TO HAVE THE MATTER C LOSED. AND NOW THE ASSESSEE CANNOT RETRACT HIS ADMISSION WITHOUT ANY D OCUMENTARY EVIDENCE TO THE CONTRARY. IV. UNEXPLAINED CREDITS WITH REGARD TO UNEXPLAINED CREDITS OF RS.286318 AND INTEREST ACCRUED ON NSC OF RS.5740 WE WOULD LIKE TO POINT OUT THAT SI MILAR AND IDENTICAL ISSUES WERE CROPPED UP IN THE ASSESSMENT YEARS 1999-00 AND 2004-05 RESPECTIVELY WHICH HAVE BEEN CONSIDERED AND DECIDED AGAINST THE ASSESSEE FOR THE REASONS ITA NO.1001 TO 1006/BANG/09 PAGE 13 OF 13 RECORDED THEREIN. THE FINDINGS REFERRED SUPRA ARE HOLD GOOD FOR THIS ASSESSMENT YEAR TOO. 12.1. IN AN OVER ALL CONSIDERATION OF THE FACTS AN D CIRCUMSTANCES OF THE ISSUES AS DISCUSSED IN THE FORE-GOING PARAGRAPHS W E ARE OF THE UNANIMOUS VIEW THAT THE STANDS OF THE AO AND THE CIT(A) ARE JUSTIFIED WHICH REQUIRES NO INTERFERENCE AT THIS STAGE. IT IS ORDERED ACCORDINGLY. 13. IN THE RESULT THE ASSESSEES APPEALS FOR THE ASSESSMENT YEARS 1999-00 2001-02 2002-03 2003-04 2004-05 A ND 2005-06 ARE DISMISSED. PRONOUNCED IN THE OPEN COURT ON THIS 29 TH DAY OF JANUARY 2010. SD/- SD/- ( GEORGE GEORGE K. ) (A. MOHAN ALANKAMONY ) JUDICIAL MEMBER ACCOUNTANT MEMBER BANGALORE DATED THE 29 TH JANUARY 2010. DS/- COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. C IT(A) 5. DR ITAT BANGALORE. 6. GUARD FILE (1+1) BY ORDER ASSISTANT REGISTRAR ITAT BANGALORE.