Sh.Krishan Kumar vs Income Tax Office,Ward-Rajpura

The appellant has filed the present appeal under Section 260A of Income Tax Act, 1961 (for brevity, 'the Act') against the order dated 01.12.2016

passed by Income Tax Appellate Tribunal, Chandigarh (hereinafter referred to as 'the Tribunal') in ITA No.70/CHD/2014 to the assessment year

2008-09, dismissing the appeal of assessee.

As per the appellant, the following substantial question of law arises for consideration in the present appeal:-

“Whether on the facts and in the circumstances of the case the Tribunal was right in law in upholding the addition of Rs. 26,68,525/- under Section

69A of the Income Tax Act, 1961, as confirmed by the CIT(A) in utter disregard of the fact that primarily all the business transactions of the

Assessee were routed through regular Banking Channel vide his Saving Bank account in erstwhile Centurian Bank of Punjab.â€​

The brief facts of the case are that for assessment year 2008-09, the assessee who is a proprietor of M/s United Traders filed Income Tax Return

declaring income of Rs. 1,03,896/-. The department had information by Annual Information Return (AIR) that the assessee had made cash deposit to

the tune of Rs. 37,73,695/- in his saving account with Centurian Bank of Punjab Ltd., (now HDFC) Calibre Mkt., Rajpura The case was selected for

scrutiny. Notice under Section 143(2) of the Act was issued on 02.09.2009. The detailed questionaire dated 29.03.2010 was also issued. The assessee

in the income tax return declared that his case is “No Account Caseâ€​, and showed gross receipts of Rs. 9 lakhs and net profit of Rs. 1,20,000/-.

During the assessment proceedings, the assessee contended that his sales were of Rs. 29 lakhs whereas it was inadvertently declared as Rs. 9

lakhs in the return. It was contended that the assessee was not maintaining any books of account. The Assessing Officer (AO) asked for details of

purchases and sales and the copy of VAT return, but these were not produced on the pretext that VAT returns were not available and the purchase

files were missing. The AO obtained the copy of VAT return from Sales Tax Office, Rajpura. From the return, it was evident that the assessee had

shown sales of Rs. 9,65,170/- in the VAT return and the assessee had also filed a Trading and Profit & Loss account in the balance sheet with the

VAT return.

On being confronted with the documents received from the Sales Tax Department, the assessee furnished a cash flow chart as an explanation, but

it was not accepted as there were number of discrepancies. The entries made in the cash flow charts were not substantiated by any evidence. In

order to explain the cash deposits made, the assessee explained the source as withdrawal of cash from accounts, advances received from the parties

and unsecured loans of Rs. 1,40,000/-. Since, no evidence was produced in support of the claim of withdrawal from accounts and advances from the

parties, the AO rejected the same. The assessee was able to substantiate unsecured loans of Rs. 1,40,000/- and the AO gave the credit of the said

amount. Vide order dated 29.11.2010 the assessment was finalised by making following additions:-

i) Addition of Rs. 26,68,525/- under Section 69A of the Act;

ii) Addition of Rs. 7,21,958/- on account of difference in closing stock figure;

iii) Addition of Rs. 80,000/- on account of undisclosed income from Labour Job.

Aggrieved of the assessment made, the assessee filed an appeal before the Commissioner of Income Tax (Appeals), Patiala (for brevity,

'(CIT(A)'). Appeal was dismissed vide order dated 29.10.2013. Further, appeal was filed before the Tribunal, which was also dismissed vide order

dated 01.12.2016. Hence, the present appeal.

Learned counsel for the appellant argued that the Tribunal erred in upholding the addition of Rs. 26,68,525/- under Section 69A of the Act. He

submitted that the assessee was able to explain the source of cash deposits. It was contended that AO erred in not appreciating the figures of

purchases as per the VAT return as Rs. 13,12,607/-, being coupled with the value of closing stock at Rs. 11,51,958/-.

The contention raised by learned counsel for the appellant that the authorities have not considered the figure of purchase and closing stock as per

the VAT return deserves rejection.

The assessee filed an income tax return showing the gross receipts of Rs. 9 lakhs, on the other hand, there were cash deposits made of more than

Rs. 37 lakhs in the savings bank account. The assessee tried to explain the source of cash deposits by taking a stand that the actual sales were of Rs.

29 lakhs but were wrongly mentioned as Rs. 9 lakhs in the income tax return. The details of the purchases and copy of VAT return were withheld by

the assessee on the excuse that same were not available. The AO got the copy of the VAT return from the Sales Tax Office in which the sales were

mentioned amounting to Rs. 9,65,170/-. Before the AO the stand taken was that the appellant was not maintaining books of account, on the other hand

with the VAT return, the appellant had filed Trading and Profit & Loss Account and the balance sheet. The appellant had withheld the material

information available with him.

All the three authorities below have recorded consistent findings of facts. The appellant has not been able to dispute the findings of facts much less

to prove perversity. No interference is called for in the order passed by the Tribunal.

No substantial question of law is involved. Therefore, the appeal is dismissed.