Tca/895/2017 Of Sri I.m.farvis Ahmed v. The Income Tax Officer

In the High Court of Judicature at MadrasDated : 16.7.2019 The Honourable Mr.Justice T.S.SIVAGNANAMand The Honourable Mrs.Justice V.BHAVANI SUBBAROYAN Tax Case Appeal No.895 of 2017 Sri.I.M.Farvis Ahmed...Appellant The Income Tax Officer, BusinessWard – XIII(4), Chennai...Respondent APPEAL under Section 260A of the Income Tax Act, 1961 againstthe order dated 24.7.2017 made in ITA.No.1995/Mds/2016 on thefile of the Income Tax Appellate Tribunal, Chennai C/'SMC' Benchfor the assessment year 2009-10, against the Order dated28/04/2016 and made in ITA No.28/CIT(A)-7/2011-12, on the fileof the Commissioner of Income Tax (Appeals)-7, Chennai - 34, andagainst the Order dated 27/12/2011 and made in PANNo.AAFPF1394M, on the file of the Income Tax Officer, BusinessWard XIII(4), Chennai - 34. Judgment was delivered by T.S.SIVAGNANAM,J We have heard Mr.S.Rajasekar, learned counsel for theappellant – assessee and Mr.S.Rajesh, learned Junior StandingCounsel appearing for the respondent – Revenue. 2. This appeal filed by the assessee under Section 260A ofthe Income Tax Act, 1961 (for short, the Act) is directedagainst the order dated 24.7.2017 made in ITA.No.1995/Mds/2016on the file of the Income Tax Appellate Tribunal, ChennaiC/'SMC' Bench (hereinafter called the Tribunal) for theassessment year 2009-10. 3. The assessee has filed this appeal by raising thefollowing substantial questions of law : https://hcservices.ecourts.gov.in/hcservices/ “i. Whether, on the facts and thecircumstances of the case, the Tribunal wasright in holding that the entire cashdeposit is to be assessed as income of theappellant under Section 69 of the Income TaxAct disregarding the fact that the same isincome from business and hence, only profitmargin is assessable to income ? Andii. Is the finding of the Tribunal thatthe purchases and expenses were alreadyrecorded in the books and therefore, thereis no need to consider the net profit ratioin making the addition, not perverse?” 4. The assessee is an individual stated to be running a snackbar and trading in edible essences. For the assessment yearunder consideration namely 2009-10, the assessee filed return ofincome on 20.10.2009. The return was processed under Section 143(1) of the Act on 27.9.2010. The case was selected for scrutinyand a notice under Section 143(2) of the Act was issued on26.8.2010. A questionnaire was issued to the assessee callingfor details. The representative of the assessee appeared and thematter was heard on different dates and on 23.12.2011, theassessee filed the profit and loss account and the balancesheet. As per the AIR information, the assessee made cashdeposits of Rs.41,80,050/- during the year 2008-09 in a savingsbank account with M/s.Axis Bank and in his current account withM/s.ICICI Bank and paid an amount of Rs.2,38,373/- towardscredit card expenses. 5. The Assessing Officer found that there were no cashwithdrawals, that the entire credits were from the collectionin the business run by the assessee, that the total turnover wasshown as Rs.36,95,266/- alone and that the difference in theamount credited into the bank and the amount shown as turnoverwas added to the total income. The Assessing Officer furtherfound that the assessee deposited cash totaling to Rs.9,40,000/-in the ICICI Bank current account. Since the assessee did notdisclose the details, the Assessing Officer addressed a letterto the ICICI Bank and called for details. However, the bank didnot furnish the copy of the accounts, but stated that theaccount was closed on 09.10.2009. During the course ofassessment proceedings, the assessee accepted that the bookswere prepared only on the basis of the Axis Bank account andthat the deposits in the other account were not considered whilepreparing the books. Hence, the deposits in the ICICI Bankamounting to Rs.9,40,000/- were added to the total income. Apartfrom that, the credit card expenses were taken intoconsideration and ultimately, the assessment was completed byorder dated 27.12.2011. 6. The assessee preferred an appeal before the Commissionerof Income Tax (Appeals)-7, Chennai [for brevity, the CIT(A)].The First Appellate Authority, after considering the facts ofthe case, found that the explanation offered by the assessee wasnot satisfactory and dismissed the appeal. On further appeal bythe assessee, the Tribunal concurred with the view taken by theCIT(A) and dismissed the appeal. This is how the assessee isbefore us by way of this appeal. 7. From the facts, it is evidently clear that the explanationoffered by the assessee was found to be not satisfactory by theAssessing Officer. The CIT(A) re-examined the factual matrix,considered the sufficiency of the explanation and held that inthe absence of verifiable evidence, the bank deposits could notbe presumed to be a part of sales turnover. The Tribunal alsotook into consideration the facts and held that the entireunaccounted deposits were to be considered as unexplained incomeof the assessee under Section 69 of the Act. 8. A thorough fact finding exercise has been done by both theCIT(A) as well as the Tribunal. While exercising power underSection 260A of the Act, we cannot consider ourselves as theThird Appellate Authority and re-examine the facts. We find thatno substantial question of law arises for consideration in thisappeal. 9. Accordingly, the above tax case appeal is dismissed. Nocosts. Sd/- Assistant Registrar //True Copy// RSTo Sub Assistant Registrar 1.The Income Tax Appellate Tribunal, Chennai C/SMC Bench. 2.The Income Tax Officer, Business Ward – XIII(4), Chennai. 3.The Commissioner of Income Tax (Appeals)-7, Chennai -34. +1 cc to M/s.R.Hemalatha, Advocate, S.R.No.60424+1 cc to M/s.Karthik Ranganathan, Advocate, S.R.No.60089 VD(CO)SSM(14/08/2019) TCA.No.895 of 2017