Shri Deepak Gupta, Noida V. ITO, Noida

CO 184/DEL/2012

• Counselvise Citation: [2015] 123 COUNSELVISE.COM (IT) 0532 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 11 month(s) 29 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 15-05-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 07-05-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 17-05-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: P DAM KANUNJIA
• Keywords: Unexplained cash credit; Opportunity of being heard; Onus to prove
• Section: 133(6)

Judgement Text

1 ITA NO.1536.DEL.12 C.O184.DEL.12 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: B NEW DELHI BEFORE SMT DIVA SINGH, JUDICIAL MEMBER AND SH. T.S.KAPOOR, ACCOUNTANT MEMBER I.T.A .NO. 1536/DEL/2012 (ASSESSMENT YEA R-2008-09) ITO WARD-1(1) G- BLOCK, SHOPPING COMPLEX, SECTOR-20 NOIDA (APPELLANT) VS DEEPAK GUPTA PROP. DEEP GRAPHICS ADVERTISING MARKETING CO.C-88, SECTOR-10 NOIDA AFZPG9323E (RESPONDENT) C.O NO. 184/DEL/2012 (ASSESSMENT YEAR 2008-09) DEEPAK GUPTA PROP. DEEP GRAPHICS ADVERTISING MARKETING CO. C-88, SECTOR-10 NOIDA AFZPG9323E (APPELLANT) ITO WARD-1(1) G- BLOCK, SHOPPING COMPLEX, SECTOR-20 NOIDA (RESPONDENT) APPELLANT BY SH.P. DAM KANUNJIA, SR. DR RESPONDENT BY NONE DATE OF HEARING 07/05/2015 DATE OF PRONOUNCEMENT 15/05/2015 ORDER PER DIVA SINGH, JM BY THE PRESENT APPEAL FILED BY THE REVENUE THE CORR ECTNESS OF THE ORDER DATED 13/01/2012 OF LD. CIT(A), GHAZIABAD PERTAINING TO 2 008-09 ASSESSMENT YEAR HAS BEEN ASSAILED ON THE FOLLOWING GROUNDS. 1. THAT THE LD. CIT(A) HAS ERRED IN LAW AND ON FA CTS IN DELETING THE ADDITION OF RS.24,87,500/- IN RESPESCT OF M/S R.K. TRADERS CONS IDERING THE DOCUMEDNTS PROVIDED BY THE ASSESSEE. THE LD. CIT(A) DID NOT C ONSIDER THE FINDING IN RESPECT OF REPLY RECEIVED BY THE ASSESSING OFFICER (AO) IN RESPONSE TO NOTICE U/S133(6) FROM THE FATHER OIF THE PROPRIETOR OF M/S R.K. TRAD ERS THAT NO TRANSACTIONS WERE MADE BETWEEN THE ASSESSEE AND PROPRIETOR OF M/S R.K . TRADERS NAD WHO WAS ALSO NOT P;RODUCED FOR EXAMINATION. 2.THAT THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.14,78,750/- IN RESPECT OF M/S GANESH ENTERPRISE WITHOUT CONSIDERING THE FACT 2 ITA NO.1536.DEL.12 C.O184.DEL.12 THAT GOVERNMENT POSTAL AUTHORITY HAD INFORMED THAT THE ASSESSEE HAS LEFT AND REPORT OF THE INSPESCTOR OF INCOME TAX THAT NO SUCH PARTY EXISTS AT THE ADDRESS, WHEREAS ASSESSEE HAS SUBMITTED THE PAPERS/LETTERHEA D OF THET SAME ADDRESS, AT WHICH NO PARTY EXISTS AS PER REPORT OF THE GOVERNME NT POSTAL AUTHORITY AND INSPECTOR OF INCOME TAX. 3,THAT THE APPELLANT CRAVES LEAVE TO ADD, ALTER AND AMEND ANY OF THE GROUNDS OF APPEAL ON OR BEFORE HEARING. 4. THAT THE ORDER OF THE LD. CIT (APPEALS) BEING ER RONEOUS IN LAW AND ON FACTS DESERVES TO BE SET ASIDE/CANCELLED AND THE OR DER OF THE AO BE RESTORED. 2. NO ONE WAS PRESENT ON BEHALF OF THE ASSESSEE AT THE TIME OF HEARING. THE RECORD SHOWS THAT NOTICE FOR THE SPECIFIC DATE OF H EARING HAS BEEN ISSUED TO THE ASSESSEE BY SPEED POST ON 18 TH MAY 2015 AT THE ADDRESS INDICATED BY THE ASSESSEE WHICH HAS COME BACK UNSERVED WITH THE COMMENT LEFT WITHOUT ADD. ACCORDINGLY, CONSIDERING THE MATERIAL AVAILABLE ON RECORD THE APPEAL OF THE REVENUE AND THE CO FILED BY THE ASSESSESE ARE BEING DECIDED ON MERIT AFTER HEARING THE LD. SR. DR. 3. LD. SR. DR QUA THE DEPARTMENTAL GROUND RAISED IN VITED ATTENTION TO PARA 3 & 4 OF THE ASSESSMENT ORDER ON THE BASIS OF WHICH IT WAS HIS SUBMISSION THAT IN RESPONSE TO THE LETTER U/S 133(6) ISSUED BY THE ASS ESSING OFFICER IN THE COURSE OF THE ASSESSMENT PROCEEDINGS, THE FATHER OF THE PROPR IETOR OF M/S R. K. TRADERS REPLIED BY SPEED POST AS PER RECORD HAS STATED THAT NO TRANSACTION OF SALE/PURCHASE HAS BEEN MADE WITH M/S DEEP GRAPHICS THE PROPRIETAR Y FIRM OF THE ASSESSEE. REFERRING TO THE ASSESSMENT ORDER IT WAS HIS SUBMIS SION THAT THIS FACT WAS CONFRONTED TO THE ASSESSEE AND HE WAS REQUIRED TO P RODUCE THE PROPRIETOR OF M/S R. K. TRADERS AND SHRI GANESH ENTERPRISES. REFERRING TO THE RECORD IT WAS SUBMITTED THAT REPEATEDLY THE OPPORTUNITIES WERE GIVEN TO PRO VE THE GENUINENESS OF THE TRANSACTIONS AND THE ASSESSEE FAILED TO ADDRESS THE ISSUES. INVITING ATTENTION PARA 4OF THE ASSESSMENT ORDER IT WAS HIS SUBMISSION THAT ON RECORD THERE IS EVIDENCE QUA THE SHREE GANESH ENTERPRISES THAT LETTER U/S133(6) CAME BACK UNSERVED WITH THE 3 ITA NO.1536.DEL.12 C.O184.DEL.12 COMMENT OF THE POSTAL AUTHORITY THAT THERE IS NO SU CH FIRM AT THE ADDRESS GIVEN. THIS FACT IT WAS SUBMITTED WAS CONFRONTED TO THE AS SESSESE AND OPPORTUNITY WAS PROVIDED TO PRODUCE THE PROPRIETOR. THE AO IT WAS SUBMITTED FURTHER MADE ENQUIRIES THROUGH THE INSPECTOR WHO STATED THAT THE RE IS NO SUCH FIRM. INVITING ATTENTION TO THE IMPUGNED ORDER IN PARA 8.3 & 8.4 I T WAS HIS SUBMISSION THAT THE CIT(A) HAS DECIDED THE ISSUE IN FAVOUR OF THE ASSES SEE HOLDING THAT THE ASSESSEE HAS FURNISHED PROOF OF PAYMENT MADE THROUGH ACCOUNT/PAY EE CHEQUES. IT WAS HIS SUBMISSION THAT THE CIT(A) HAS NOT SPECIFICALLY DEA LT WITH THE SPECIFIC FINDINGS OF THE ASSESSING OFFICER AND THE FINDINGS ARRIVED AT C ONSEQUENTLY ARE VITIATED AS THE RELEVANT FACTS HAVE NOT BEEN TAKEN INTO CONSIDERATI ON WHILE ARRIVING AT A CONCLUSION. IN THE CIRCUMSTANCES IT WAS HIS PRAYER THAT THE IMP UGNED ORDER BE SET ASIDE AND THE ADDITIONS MADE IN THE ASSESSMENT ORDER BE SUSTAINED . 4. WE HAVE HEARD THE SUBMISSION AND PERUSED THE MAT ERIAL AVAILABLE ON RECORD. IT IS SEEN THAT THE ASSESSING OFFICER IN PARA 3 & 4 OF THE ASSESSMENT ORDER MADE THE FOLLOWING DISCUSSION ON FACTS FOR MAKING THE AD DITION:- 3. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, ON PERUSAL OF BALANCE SHEET IT IS OBSERVED THAT ASSESSEE HAS SHOWN SUNDRY CREDITORS A MOUNTING TO RS.61,79,038/-. ON 3/12/2010 ASSESSEE FURNISHED LIST OF SUNDRY CREDITO RS AND CONFIRMATION OF CREDITORS. 03/12/2010 SOME LETTERS U/S 133(6) WERE ISSUED TO C ERTAIN PARTIES TO CONFIRM THE TRANSACTION. LETTER U/S 133(6 WAS SENT TO M/S R.K. TRADERS 224, BHAGATPURA, MEERUT. THE REPLY OF THE FATHER OF THE M/S R. K. TRADERS WA S RECEIVED THROUGH SPEED POST WHEREIN HE HAS STATED THAT NO TRANSACTION OF SALE/PURCHASE HAS BEEN MADE WITH M/S DEEP GRAPHICS AND ALSO SAID THAT THE DOCUMENTS RELATING TO HIS SON HAVE BEEN MISUSED BY M/S DEEP GRAPHICS. THEREFORE, VIDE THIS OFFICE LETTER DATED 15/12/2010 THE ASSESSEE WAS ASKED TO PRODUCE M/S R.K. TRADERS. ON 21/12/2010 A SSESSEE FILED APPLICATION THAT HE WAS TRYING TO BEST TO PRODUCE IN PERSON THE CONCERN ED PARTIES (PROPRIETORS OF M/S R.K. TRADERS & M/S SHREE GANESH ENTERPRISES) AND CASE WA S ADJOURNED TO 24/12/2010. ON 24/12/2010 NON-ATTENDED AND A LETTER WAS ISSUED TO THE ASSESSEE PLEASE SHOW CAUSE WHY THE CLOSING BALANCE SHOWN BY YOU IN THE CASE OF M/S R.K. TRADERS MAY NOT BE TREATED AS BOGUS CREDIT AND ADDED BACK TO YOUR INCOME. FURTHE R ON 28/12/2010 COUNSEL OF THE ASSESSEE ATTENDED BUT NOT PRODUCED ANY CREDITOR. T HEREFORE THE CREDITS (CLOSING BALANCE) SHOWN IN THE CASE OF M/S R. K. TRADERS IS BOGUS. T HE ONUS TO PROVE THE GENUINENESS OF TRANSACTION AND CREDITWORTHINESS OF PARTY LIES WITH THE ASSESSEE. BUT ASSESSEE COULD NOT 4 ITA NO.1536.DEL.12 C.O184.DEL.12 PROVE IT. THEREFORE, RS.24,87,500/- SHOWN AS SUNDR Y CREDITORS ARE BEING ADDED IN THE TOTAL INCOME OF THE ASSESSEE. PENALTY PROCEEDINGS U/S 272(1) (C) IS ALSO BEING INITIATED FOR FURNISHING INACCURATE PARTICULARS OF HIS INCOME AND CONCEALING THE INCOME. ADDITION RS.24,87,500/- 4. ASSESSEE HAS SHOWN CREDIT BALANCE AGAINST THE M/ S SHREE GANESH ENTERPRISES FOR RS.14,78,750/-. LETTER U/S 133(6) DATED 3/12/2010 SENT TO M/S SHREE GANESH ENTERPRISES LGF-73, DURGA TOWER, RDC, RAJ NAGAR, GHAZIABAD THRO UGH SPEED POST TO CONFIRM THE TRANSACTION, WHICH WAS RECEIVED BACK UNSERVED WITH THE REMARKS NO SUCH FIRM. SINCE THE TRANSACTION WITH THE SAID PARTY ARE APPEARING I N YOUR BOOKS OF ACCOUNT, THEREFORE, ONUS TO PROVE THE GENUINENESS OF THESE LIES WITH YO UR. THEREFORE, VIDE THIS OFFICE LETTER DATED 15/12/2010 THE ASSESSEE WAS ASKED TO PRODUCE M/S SHREE GANESH ENTERPRISES FOR EXAMINATION ALONG WITH BOOKS OF ACCOUNT IN THIS OFF ICE ON 21/12/2010. ON FIXED DATE NO COMPLIANCE WAS MADE. THE INSPECTOR OF THIS OFFICE WAS DEPUTED TO MAKE LOCAL ENQUIRY ON THE ADDRESS PROVIDE BY ASSESSEE. THE INSPECTOR IN HIS REPORT HAS STATED THAT NO SUCH FIRM EXIST ON THIS ADDRESS. AS THE ONUS TO PROVE THE GEN UINENESS OF THE TRANSACTION AND CREDITWORTHINESS OF THE PARTY LIES WITH THE ASSESSE E. BUT ASSESSEE COULD NOT PROVE IT. THEREFORE, AMOUNT OF RS.14,78,750/- IS BEING ADDED IN THE TOTAL INCOME OF THE ASSESSEE ON ACCOUNT OF UNEXPLAINED CASH CREDITS. PENALTY PROC EEDINGS U/S 271 (1) (C) IS ALSO BEING INITIATED FOR FURNISHING INACCURATE PARTICULARS HIS INCOME AND CONCEALING THE INCOME. ADDITION RS. 14,78,750/- 4.1 ON A PERUSAL OF THE IMPUGNED ORDER IN PARAS 8.3 & 8.4, WE FIND THAT THESE OBJECTIONS HAVE NOT BEEN CONSIDERED BY THE LD. CIT( A). IN THE ABSENCE OF ANY REPRESENTATION ON THE PART OF THE ASSESSEE AND CONS IDERING THE FINDINGS THE CIT(A) WHICH HAVE NOT ADDRESSED THE FINDINGS OF THE ASSESS ING OFFICER WE DEEM IT APPROPRIATE TO SET ASIDE THE IMPUGNED ORDER AND RES TORE THE SAME BACK TO THE SAID AUTHORITY WITH THE DIRECTION TO PASS A SPEAKING ORD ER IN ACCORDANCE WITH LAW AFTER GIVING THE ASSESSEE REASONABLE OPPORTUNITY OF BEING HEARD ADDRESSING THE SPECIFIC FINDINGS OF THE ASSESSING OFFICER. 6. IN THE RESULT THE APPEAL OF THE REVENUE IS ALLOW ED FOR STATISTICAL PURPOSES. 7. THE ASSESSEE IN HIS CROSS-OBJECTION FILED HAS ASSAILED THE ACTION OF THE LD. CIT(A) IN SUSTAINING THE ADDITION OF RS.4,86,196/- MADE BY THE ASSESSING OFFICER. THE FACTS QUA THE SAME ARE FOUND ADDRESSED IN PARA 5 OF THE ASSESSMENT ORDER AND 5 ITA NO.1536.DEL.12 C.O184.DEL.12 PARA 8.5 OF THE CIT(A)S ORDER. IN THE ABSENCE OF ANY REPRESENTATION ON BEHALF OF THE ASSESSEE AS EVIDENTLY NO EFFORT HAS BEEN MADE B Y THE ASSESSEE TO INDICATE ANY CHANGE OF ADDRESS IF ANY, AS THE NOTICE SENT THROUG H SPEED POST HAS COME BACK UNSERVED WITH THE COMMENT LEFT WITHOUT ADDRESS. WE FIND THAT IN THE ABSENCE OF ANY EVIDENCE THE FOLLOWING FINDING ARRIVED AT IN TH E CIRCUMSTANCES OF THE CIT(A) DESERVES TO BE UPHELD. 8.5. GROUND OF APPEAL NO. 4 REGARDING ADDITION O F RS.4,06,496/-. THE AO MADE INQUIRY FROM M/S VARUN PLASTICS, ANOTHE R CLIENT OF THE ASSESSEE AND FOUND THAT THERE IS DIFFERENCE IN BALANCE AS PER LEDGER A CCOUNT MAINTAINED BY THE ASSESSEE VIS-- VIS ACCOUNT MAINTAINED BY M/S VARUN PLASTIC. WHEN GIVEN A CHANCE, THE ASSESSEE WAS UNABLE TO EXPLAIN THE DISCREPANCIES. EVEN IN APPEAL, NO CONCRETE EXPLANATION OR ANY SUPP ORTING EVIDENCES, OF ANY SORT, HAVE BEEN BROUGHT ON RECORD. THEREFORE, I AM CONSTRAINED TO HOLD THAT THE AO WAS CORRECT IN MAKING ADDITION OF UNCONFIRMED/UNPROVED BALANCE. 8. IN THE RESULT, THE APPEAL OF THE REVENUE IS ALLO WED FOR STATISTICAL PURPOSES AND THE C.O FILED BY THE ASSESSEE IS DISMISSED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 15 TH OF MAY , 2015. SD/- SD/- (T. S. KAPOOR) (DIVA SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 15 /05/2015 *R. NAHEED* COPY FORWARDED TO: 6 ITA NO.1536.DEL.12 C.O184.DEL.12 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI SL.NO. DESCRIPTION DA TE 1. DATE OF DICTATION BY THE AUTHOR 07/05/2015 2. DRAFT PLACED BEFORE THE DICTATING MEMBER 08/07/2 015 3. DRAFT PLACED BEFORE THE SECOND MEMBER 4. DRAFT APPROVED BY THE SECOND MEMBER 5. DATE OF APPROVED ORDER COMES TO THE SR. PS 6. DATE OF PRONOUNCEMENT OF ORDER 7. DATE OF FILE SENT TO THE BENCH CLERK 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK 9. DATE OF DISPATCH OF ORDER 7 ITA NO.1536.DEL.12 C.O184.DEL.12