2015 (4) TMI 877 - HC - Income Tax

Unaccounted cash - suppression of professional receipts - assessee took a plea that on the date of payment of the said amount to Shri Renavikar viz. 30th June, 2001, there was a cash balance in the books and to the extent of ₹ 10,22,850/-. Hence this amount was utilized for making payment to Shri Renavikar. The assessee declared the balance amount of ₹ 29,75,150/- towards unaccounted investment - Set off claim - Held that - The Assessing Officer rejected this stand on clear and sound reasoning. There was evidence that the assessee indulged in suppression of professional receipts. There was documentary evidence in the form of diaries from 16th August, 2001 to 29th March, 2002. That was for 166 working days which is referred to at page 33 of the assessment order. The assessee voluntarily offered ₹ 24,45,520/- towards suppression of professional receipts. These are operational receipts. On the basis of the incriminating evidence the Tribunal found that it is difficult to accept the statement that the assessee had with him the sum and which was required to be paid to Shri Renavikar. The Tribunal noted that the assessee also took the stand that there was one transaction with Shri Doke. That was a sum given to Shri Doke, but that transaction did not materialise. Shri Doke returned the entire sum. The assessee, therefore, pleaded that ₹ 25,00,000/- returned by Shri Doke and cash available with assessee was utilised for making payment to Shri Renavikar and to that extent the set off of the amount may be given. Thus, the Tribunal found that such a stand and which is raised during the course of assessment proceedings cannot discharge the burden and which is on the assessee. The desired presumption that the assessee has made the investment to the extent from the available cash balance cannot be raised. It is not the case that there is no transaction after 30th June, 2001. The source of this transaction was not proved is the first conclusion. The alternate contention and from the transaction of Shri Doke would denote that there is no evidence except the statement of Shri Doke that the amounts were returned. Presuming that the transaction did not materialise and the amount was returned by Shri Doke, there has to be a supporting evidence to show that Doke returned the amount on or before the date of the transaction with Shri Renavikar. Therefore, both contentions have been rightly rejected. With regard to the suppressed professional receipt of ₹ 14,30,225/- once again the Tribunal found that for a substantial period the assessee was maintaining parallel record suppressing professional receipts. It is true that there is no specific evidence for the period 1st April, 2001 to 30th June, 2001. However, the assessee himself admitted the modus operandi that he was not fully recording the receipts in the books of account. That is how the Assessing Officer's order has been confirmed. The Tribunal found that though there is no direct evidence, but the circumstances indicating to the contrary and against the assessee, the addition to the extent of 10% has alone been sustained. No substantial question of law - Appeal dismissed - Decided against assessee.

Summary

Issues:
Concurrent findings challenged by the assessee regarding undisclosed income and suppressed professional receipts.

Analysis:
1. The appeal challenges concurrent findings against the assessee up to the Tribunal level for the assessment year 2002-2003. The dispute arose from an unaccounted payment of Rs. 40,00,000 to Shri Renavikar, not reflected in the regular books of accounts. The assessee claimed to have utilized a cash balance of Rs. 10,22,850 for this payment, offering the remaining amount to tax as unaccounted investment.

2. The Assessing Officer rejected the set-off plea and added Rs. 10,22,850 to the income. The Commissioner of Appeals upheld this decision, leading the assessee to approach the Tribunal. The Tribunal found insufficient evidence to support the claim that available funds were used for the payment, citing suppression of professional receipts and lack of proof for transactions. The Tribunal rejected the set-off claim, sustaining the additions made by the Assessing Officer.

3. In a similar case, the Tribunal had previously ruled in favor of an assessee, emphasizing the need for a direct correlation between the undisclosed income and the additional value. The Tribunal in the present case found no direct link between the available cash balance and the unaccounted payment to Shri Renavikar, dismissing the appeal raised by the assessee's counsel.

4. Regarding suppressed professional receipts of Rs. 14,30,225, the Tribunal acknowledged the lack of direct evidence but upheld a 10% addition due to circumstantial indications against the assessee. The counsel cited a Supreme Court judgment to challenge this addition, but the Court differentiated the present case from the precedent, emphasizing the factual distinctions and the absence of arbitrariness in the Tribunal's decision.

5. The Court dismissed the appeal, concluding that no substantial question of law was raised, and upheld the Tribunal's findings based on the evidence presented. The order passed in one appeal was deemed applicable to related appeals, all of which were subsequently dismissed without costs.