2022 (4) TMI 1226 - AT - Income Tax

Transfer of the case u/s 127 from Jalgaon to Nashik - HELD THAT - It is trite law that an assessee is barred from raising contention that no opportunity was given to the assessee while transferring the jurisdiction of the case u/s 127 from Jalgaon to Nashik as the order of the transfer of case u/s 127 was within the knowledge of the assessee during the course of assessment proceedings and still the assessee had chosen not to participate in the matter of jurisdiction of the AO to whom the case has been transferred. The assessee cannot be allowed latter to challenge the jurisdiction of the AO as held in the case of Pannalal Binjraj vs. Union of India 1956 (12) TMI 1 - SUPREME COURT AND SHIVABHAI KHODABHAI PATEL 1999 (12) TMI 31 - GUJARAT HIGH COURT Thus objection raised by the assessee challenging the transfer of jurisdiction of the case does not stand the test of the law. Thus, this contention is devoid of any merit and, accordingly, we dismiss the same. Unexplained investments out of undisclosed sources - HELD THAT - We have carefully gone through the said loose documents which is also extracted by the AO wherein, the documents indicates total payment - Obviously contents of the notings clearly indicate the payment of interest which means the appellant either repaid the loan with interest or made advance of loan for interest. Notings found therein represents the unexplained income out of which the loan or advance was made warranting addition under the provisions of section 69 of the Act. When this information/material was confronted to the appellant, the appellant had failed to explain the contents of the documents. Therefore, the Assessing Officer was justified in making the addition. Thus, we confirm the addition - Thus, the ground of appeal no.2 raised by the appellant stands dismissed. Unexplained expenditure - Receipts and payments made in connection with the purchase and sale of share of M/s S.V. Electricals and it reflects the name of Shri Deelip V. Kotecha, the appellant before us, had paid cash to the agent involving in booking of accommodations entries. CIT(A) had clearly narrated the transaction that would have taken place the findings recorded by CIT(A) remains uncontroverted by the appellant. When this matter was confronted to the appellant, he gave vague answers and, therefore, presumption created u/s 132(4A) remains un-rebutted. In the circumstances, the lower authorities were justified in making the addition as undisclosed investments u/s 69 of the Act. Thus, the ground of appeal no.3 raised by the appellant stand dismissed.

Summary

Issues Involved:
1. Jurisdiction of the Assessing Officer due to the transfer of the case under Section 127.
2. Addition of ?1,38,38,000/- as expenditure incurred out of undisclosed sources.
3. Addition of ?6,20,00,000/- as investments out of undisclosed sources.
4. Opportunity of being heard under Section 143(3) read with Section 153A.
5. Credit of cash seizure of ?32,00,000/- and interest computation under Section 234A, B & C.

Detailed Analysis:

1. Jurisdiction of the Assessing Officer due to the transfer of the case under Section 127:
The appellant contended that the transfer of jurisdiction from Jalgaon to Nashik was invalid, thereby rendering the assessment order without jurisdiction. The Tribunal held that the issue of jurisdiction under Section 127 cannot be agitated in assessment proceedings. The proceedings under Section 127 are independent, and any grievance should be addressed separately. The Tribunal cited the Hon’ble Punjab & Haryana High Court in Jaswinder Kaur Koover vs. CIT and the Hon’ble Supreme Court in Pannalal Binjraj vs. Union of India, establishing that once an assessee acquiesces to the jurisdiction, they cannot later challenge it. Thus, the objection was dismissed.

2. Addition of ?1,38,38,000/- as expenditure incurred out of undisclosed sources:
The Assessing Officer added ?1,38,38,000/- as unexplained expenditure based on seized loose sheets during the search. The appellant failed to explain the contents of these documents, which indicated payments of ?1,38,38,000/-. The Tribunal upheld the addition, confirming that the notings represented unexplained income used for loans or advances, warranting addition under Section 69 of the Act.

3. Addition of ?6,20,00,000/- as investments out of undisclosed sources:
The Assessing Officer added ?6,20,00,000/- based on notings in seized loose sheets indicating payments outside the books of accounts. The Tribunal reviewed the seized documents and found that the appellant had paid ?6,20,00,000/- in cash, which was not recorded in the books. The appellant's vague responses failed to rebut the presumption under Section 132(4A). Thus, the Tribunal upheld the addition as undisclosed investments under Section 69.

4. Opportunity of being heard under Section 143(3) read with Section 153A:
The appellant argued that the assessment order was passed without giving a proper opportunity of being heard. However, this ground was not pressed during the hearing and was subsequently dismissed as not pressed.

5. Credit of cash seizure of ?32,00,000/- and interest computation under Section 234A, B & C:
The appellant claimed that the seized cash of ?32,00,000/- was not credited against the tax liability. The Tribunal found that this issue did not emanate from the assessment order and dismissed the ground.

Conclusion:
The appeal filed by the assessee was dismissed in its entirety. The Tribunal upheld the jurisdiction of the Assessing Officer, confirmed the additions of ?1,38,38,000/- and ?6,20,00,000/- as unexplained expenditure and investments, respectively, and dismissed the grounds related to the opportunity of being heard and credit of seized cash.