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Shri M Rangaswamy Versus The Income-tax Officer, Ward-6 (3) , Bangalore

2015 (10) TMI 2426 - ITAT BANGALORE

Unexplained cash credits u/s 68 - Held that:- We are inclined to allow the assessee another opportunity only because the addition has been made by the Assessing Officer and upheld by the learned CIT(A) due to the lack of evidence put forth by the assessee. The purpose of assessment is to determine the correct income of the assessee and we are of the view that the assessee has realized his errors and has attempted to file additional evidence before us in an attempt to show that he had sufficient .....

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h the matter relating to the addition of ₹ 31,00,000/- u/s 68 after affording the assessee adequate opportunity of being heard. We are not passing any order on the admission of additional evidence put forth by the assessee in terms of Rule 29. However, liberty is given to the assessee to produce before the Assessing Officer material/details/evidence in support of the claim of genuineness of the cash credit. The Assessing Officer shall also be at liberty to examine the matter afresh, gather .....

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al by the assessee is directed against the order of the Commissioner of Income-tax (Appeal) - III, Bangalore dated 31/5/2013 for asst. year 2006-07. 2. The facts of the case, briefly, are as under: 3. The assessee, an individual engaged in the business of running a petrol bunk in the name and style of M/s Swami Service Station, filed his return of income for the asst. year 2006-07 on 27/10/2006 declaring total income of ₹ 1,85,219/-. The return was processed u/s 143(1) of the Income-tax Ac .....

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nd brought the same to tax in the assessee s hands. The assessment was concluded u/s 143(3) of the Act vide order dated 28/11/2008, wherein the income of the assessee was determined at ₹ 32,85,219/- as against the returned income of ₹ 1,85,219/-, in view of the addition of ₹ 31,00,000/- on account of unexplained cash credits u/s 68 of the Act. 2.2 Aggrieved by the order of the assessment for asst. year 2006-07 dated 28/11/2008, the assessee preferred an appeal before the CIT(A) .....

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oth for inordinate delay in filing the appeal and also on merits; recording that the assessee had failed to discharge his onus of defending his case with evidences and proof, holding as under at para 2 and 3 thereof:- 2. I have to note that the delay in filing the appeal is of 146 days. The case was fixed for hearing on various dates where the representatives sought adjournments from time to time. The record shown that there had been eight requests for adjournments claiming that the details are .....

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laiming the entry of ₹ 31,00,000/- into the cash book on 5-4-2005 to be out of explained sources. The claim of the amount having been accumulated out of funds in the appellant s HUF remains unsubstantiated in the course of the appellate proceedings in spite of more than adequate opportunities having been given. I therefore have to reluctantly come to the conclusion that the appellant has failed to discharge its onus of defending his case with evidences and proof [both on merits and in the .....

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justified in refusing to condone the delay in filling the appeal on the ground that the appellant has not substantiated his case on merits under the facts and in the circumstances of the appellant s case. iii. Without prejudice to the above, the learned CIT(A) is not justified in sustaining the addition of ₹ 31,00,000/- as unexplained cash credit u/s 68 of the Act under the facts and in the circumstances of the appellant s case. iv. Without prejudice to the right to seek waiver with the H .....

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t of the costs. 4. The grounds at SNo. 1 and 5 being general in nature, and not being urged before us, are dismissed as infructuous. 5. In Ground at SNo.5, the assessee has denied himself liable to be charged interest u/s 234A and 234B of the Act. The charging of interest is consequential and mandatory and the Assessing Officer has no discretion in the matter. This proposition has been upheld by the Hon ble Apex Court in the case of Anjum Ghaswalla & Others in 252 ITR 1 (SC) and we, therefor .....

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Act. According to the learned AR for the assessee, the assessee has brought in capital into the business of running the petrol bank from out of his past savings and the funds of the assessee s HUF on various dates during the year and that the same was also entirely withdrawn by the assessee during the year. However, before the Assessing Officer, it was shown that the entire funds was brought in on a single day ie. 5/4/2005. It is submitted that it was in these circumstances the addition was mad .....

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mount of ₹ 31,00,000/- sought to be introduced as capital. 6.2 Per contra, the learned DR for Revenue supported the impugned order of the learned CIT(A), submitting that the assessee was afforded adequate opportunity to present its case on the issue in appeal both before the Assessing Officer and the learned CIT(A). The learned DR contended that the plea for a fresh opportunity to the assessee to represent its case at this stage was not justified. The learned DR also placed reliance on the .....

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on merits of the grounds raised; that the assessee has not discharged the onus of proving the credits with evidence and that the reasons for seeking condonation of delay were not acceptable. On an appreciation of the material on record we feel that the learned CIT(A) ought not to have rejected the appeal of the assessee on the question of delay of 146 days in filing the appeal. The assessee has submitted that the delay of 146 days was due to the advice of its counsel to accept the assessment to .....

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t the order of the learned CIT(A) on the issue of condonation of delay requires to be vacated and hold accordingly. 6.3.2 On the merits of the case, we decline to express any opinion on the additional evidence put forth by the assessee at this stage as we are confining ourselves to the prayer of the assessee for another opportunity to plead his case before the Assessing Officer. We are inclined to allow the assessee another opportunity only because the addition has been made by the Assessing Off .....

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