Om Prakash Gupta (HUF), Gwalior V. ACIT, Gwalior

CO 8/AGR/2010

• Counselvise Citation: [2013] 122 COUNSELVISE.COM (IT) 9001 (ITAT-AGRA)
• Duration Of Justice: 3 year(s) 10 month(s) 15 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 29-11-2013
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 28-11-2013
• Assessment Year: 2005-2006
• Appeal Filed On: 13-01-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Opportunity of being heard; Condonation of delay
• Section: 37(1); 131; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, AGRA BENCH, AGRA BEFORE : SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI PRAMOD KUMAR, ACCOUNTANT MEMBER ITA NO. 411/AGRA/2009 ASSTT. YEAR : 2005-06 A.C.I.T., CIRCLE 1, VS. SHRI OM PRAKASH GUPTA ( HUF), GWALIOR. PROP. M/S. ASIAN CHEM DYES CORPN., DAULATGANJ, LASHKAR, GWALIOR. C.O. NO. 08/AGRA/2010 (IN ITA NO. 411/AGRA/2009 ) ASSTT. YEAR : 2005-06 SHRI OM PRAKASH GUPTA (HUF), VS. A.C.I.T., CIRCLE 1, PROP. M/S. ASIAN CHEM DYES CORPN., GWALIOR. DAULATGANJ, LASHKAR, GWALIOR. (APPELLANT) (RESPONDENT) REVENUE BY : SHRI WASEEM ARSHAD, SR. D.R. ASSESSEE BY : SHRI RAJENDRA SHARMA, ADVOCATE DATE OF HEARING : 28.11.2013 DATE OF PRONOUNCEMENT OF ORDER : 29.11.2013 ORDER PER BHAVNESH SAINI, J.M.: THE DEPARTMENTAL APPEAL AND THE CROSS OBJECTION BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDER OF LD. CIT(A), GWALIOR DATED 11.0 6.2009 FOR THE ASSESSMENT YEAR 2005-06. ITA 411/AGRA/2009 & CO. 08/AGRA/10 2 2. THE REVENUE IN THEIR APPEAL, CHALLENGED THE ORDE R OF LD. CIT(A) IN DELETING THE ADDITION OF RS.45,30,500/- ON ACCOUNT OF UNEXPL AINED CASH CREDITS AND DELETED THE ADDITION OF RS.4,27,130/- ON ACCOUNT OF INTERES T ON LOAN. THE ASSESSEE IN THE CROSS OBJECTION CHALLENGED THE CONFIRMATION OF ADDI TION OF RS.6,75,000/- ON THE SAME CASH CREDITS. 3. SINCE THE ISSUES ARE CONNECTED IN THE DEPARTMENT AL APPEAL AND THE CROSS OBJECTION, THEREFORE, THE SAME ARE DISPOSED OF THRO UGH THIS COMMON CONSOLIDATED ORDER. 4. THE CROSS OBJECTION OF THE ASSESSEE IS TIME BARR ED BY TWO DAYS. THE ASSESSEE EXPLAINED THAT DUE TO HIS ILLNESS, THE CROSS OBJECT ION COULD NOT BE FILED WITHIN TIME. THERE IS NO OBJECTION TO THE CONDONATION OF DELAY O F TWO DAYS, WHICH IS ALSO NOT ABNORMAL. WE, THEREFORE, ACCEPT THE EXPLANATION OF THE ASSESSEE AND CONDONE THE DELAY IN FILING THE CROSS OBJECTION. 5. BRIEFLY, THE FACTS OF THE CASE ARE THAT THE AO H AS MADE THE ADDITION OF RS. 52,05,500/- U/S. 68 OF THE 1NCOME TAX ACT, 1961 WIT H THE OBSERVATION THAT THE EXPLANATION FURNISHED BY THE ASSESSEE IS NOT SATISF ACTORY AS DISCUSSED AT PAGE 12 OF THE ASSESSMENT ORDER AS UNDER :- ITA 411/AGRA/2009 & CO. 08/AGRA/10 3 I). SOURCE OF CASH CREDIT I.E. IDENTITY OF CREDITO R, THE CAPACITY OF THE CREDITOR TO ADVANCE THE MONEY AND THE GENUINENESS O F THE TRANSACTIONS. II). THAT THE LOAN WAS ACTUALLY GIVEN BY THE LANDL ORD TO THE ASSESSEE. III). IT IS FOR THE ASSESSEE TO PROVE THAT EVEN IF THE CASH CREDIT REPRESENTS INCOME, IT IS INCOME FROM A SOURCE WHICH HAS ALREAD Y BEEN TAXED. IV). IT MAY PROVE THAT CASH CREDITS ARE NOT TAXABLE UNDER THE HEAD INCOME FROM OTHER SOURCES. IN VIEW OF THE ABOVE, CASH CREDITS OF RS. 55,05,500 /- (AS PER ANNEXURE ATTACHED) IS FOUND CREDITED IN THE BOOKS OF THE ASS ESSEE MAINTAINED FOR THE ASSESSMENT YEAR 2005-06 RELEVANT TO F. Y. 04-05 AND EXPLANATION FURNISHED BY THE ASSESSEE IS NOT SATISFACTORY, AMOUNT OF RS. 52,05,500/- (RS. 55,05,500/- MINUS 3,00,000/- IN RESPECT OF ABOVE CA SH CREDITORS WHO HAVE FURNISHED DETAILS) IS TREATED AS INCOME OF THE ASSE SSEE U/S. 68 OF THE INCOME TAX ACT, 1961 FOR THE YEAR UNDER CONSIDERATION. THE ASSESSEE HAS MADE PAYMENT OF INTEREST AMOUNTING TO RS. 8,54,257/- FOR WHICH NO DETAILS HAVE BEEN FURNISHED AS SUCH 50% OF THE INTEREST AMOUNTIN G TO RS. 4,27,130/- IS DISALLOWED FOR THE YEAR UNDER CONSIDERATION AND IS ADDED TO THE INCOME OF THE ASSESSEE '. 6. BEFORE THE LD. CIT(A), THE LD. COUNSEL FOR THE A SSESSEE SUBMITTED THE WRITTEN SUBMISSION DT. 08.07.08 ALONG WITH COPY OF ACCOUNT OF CREDITOR DULY CONFIRMED BY THEM GIVING COMPLETE NAME, ADDRESS AND PERMANENT AC COUNT NUMBER (NOT IN ALL CASES), NAME OF BROKER, AMOUNT OF LOAN AND MODE OF TRANSACTIONS FIRST TIME DURING APPELLATE PROCEEDINGS WITH THE REQUEST TO ADMIT IN VIEW OF RULE 46 A OF THE INCOME TAX RULES, 1962. SINCE, THESE DOCUMENTS WERE SUBMIT TED FIRST TIME DURING APPEAL PROCEEDINGS, HENCE THE WRITTEN SUBMISSIONS ALONG WI TH THE DOCUMENTS WERE FORWARDED TO THE ASSISTANT COMMISSIONER OF INCOME T AX CALLING THE REMAND REPORT. ITA 411/AGRA/2009 & CO. 08/AGRA/10 4 THEREAFTER THE ASSISTANT COMMISSIONER OF INCOME TAX ISSUED THE SUMMONS TO NINE BROKERS FOR 'EXAMINATION OF THE TRANSACTIONS AND SU BMITTED THE REMAND REPORT DT. 30.03.09 AS UNDER:- THIS IS TO SUBMIT THAT ASSESSEE HAS FILED (AS PER THEIR LETTER DT. 08-07- 2008) CONFIRMATION LETTERS OF PARTIES, FROM WHOM TH E LOANS TAKEN ALONGWITH THE COPY OF ACCOUNTS, PROMISSORY NOTES, BEFORE YOUR HONOUR. THE SUBMISSION OF THE ASSESSEE LIABLE TO BE REJECTED AS THE ASSESS EE HAS GIVEN SUFFICIENT OPPORTUNITY OF BEING HEARD TO SUBMIT THE ABOVE DOCU MENTS DURING THE COURSE OF ASSESSMENT PROCEEDINGS AS UNDER :- VIDE LETTER DT. 10.05.2007 ALONG WITH NOTICE U/S. 1 42(1)/143(2). VIDE ORDERSHEET ENTRY DT. 28.05.2007 VIDE ORDERSHEET ENTRY DT. 18.06.2007 VIDE ORDERSHEET ENTRY DT. 16.10.2007 VIDE ORDERSHEET ENTRY DT. 30.11.2007 VIDE LETTER DT. 13.12.2007 ALONGWITH NOTICE U/S 142 (1)/143(2) VIDE LETTER DT. 24.12.2007 AND VIDE LETTER DT. 27.12.2007 MOREOVER DURING THE COURSE OF ASSESSMENT PROCEEDING S, SUMMONS THROUGH NOTICE SERVER AND INSPECTOR WERE ISSUED TO PARTIES FOR VERIFICATION OF GENUINENESS OF THE LOAN TAKEN ON THE REQUEST OF THE ASSESSEE AS PER THEIR SUBMISSION DATED 24.12.2007. DUE CONSIDERATION HAS BEEN GIVEN TO THE PARTIES WHO HAVE APPEARED AND PROVED THEIR GENUINEN ESS AND CREDITWORTHINESS DURING THE COURSE OF ASSESSMENT PR OCEEDINGS TO THE LEVEL OF MY SATISFACTION. HOWEVER, GIVING RESPECT TO YOUR LETTER CALLING FOR REMAND REPORT, SUMMONS WERE ISSUED TO THE BROKERS (NAME AND ADDRESSES OF B ROKERS ALREADY SUBMITTED DURING THE COURSE OF ASSESSMENT PROCEEDIN GS VIDE LETTER DATED 17- 12-2008.) TO CONFIRM THE GENUINENESS OF THE FRESH DOCUMENTS FILED BEFORE YOU. 2. SUMMONS WERE ISSUED TO THE FOLLOWING BROKERS :- ITA 411/AGRA/2009 & CO. 08/AGRA/10 5 1. SH. LACHMAN DAS BANGAR, DEEDWANA OLI, LASHKAR, GWAL IOR 2. SHRI B.K. BANGAD, DEEDWANA OLI, LASHKAR, GWALIOR 3. SHRI BHAGWAN DAS GOYAL, DEEDWANA OLI, LASHKAR, GWAL IOR 4. SHRI PRAMOD GOYAL, DEEDWANA OLI, LASHKAR, GWALIOR. 5. SH. HEM KUMAR JAIN, SARAFA BAZAR, LASHKAR, GWALIOR 6. SHRI DEEPAK MANGAL, HUZRAT ROAD, LASHKAR, GWALIO R 7. SH. MURLIDHAR CHATURVEDI, SARAFA BAZAR, LASHKAR, GWALIOR 8. SHRI VIJAY KUMAR MEHTA 9. SH. OM PRAKASH DHARIWAL, LALA KA BAZAR, LASHKAR, GWALIOR NONE ATTENDED. THUS GENUINENESS OF THE LOANS/DOCUME NTS FILED BEFORE YOUR HONOUR REMAINS UNVERIFIED. 3. IN VIEW OF THE ABOVE AND UNDER THE CIRCUMSTANCES , IT IS SUBMITTED THAT NOT EVEN A SINGLE BROKER APPEARED BEFORE ME DESPITE OPP ORTUNITY OF BEING HEARD WAS AFFORDED BY ISSUING SUMMONS U/S 131 AND, SERVED THROUGH INSPECTOR OF THIS CIRCLE. HENCE, GENUINENESS OF THE LOANS / DOCUMENTS SUBMITTED BEFORE YOU COULD NOT BE CONFIRMED OR VERIFIED. THEREFORE MY VIEWS TA KEN DURING THE COURSE OF ASSESSMENT PROCEEDINGS REMAINS UNCHANGED AND ASSESS EE DOES NOT DESERVE ANY RELIEF ON THIS GROUND'. 7. A COPY OF THE AFORESAID REMAND REPORT WAS GIVEN TO THE LD. COUNSEL FOR THE ASSESSEE TO FILE THE REJOINDER. THE LD. COUNSEL HAS FILED THE REJOINDER MENTIONING THAT THE REMAND REPORT TO THE EXTENT OF 'NONE ATTEN DED' IS FACTUALLY INCORRECT. ONE BROKER SHRI DEEPAK MANGAL ALONG WITH AUTHORIZED REP RESENTATIVE SHRI ASHOK VIJAYWARGIYA ATTENDED THE OFFICE AND CONFIRMED THE TRANSACTIONS MADE WITH THE APPELLANT. HE FURTHER SUBMITTED THAT THE ASSISTANT COMMISSIONER OF INCOME TAX HAD ISSUED THE SUMMONS TO THE BROKERS FOR VERIFICAT ION OF TRANSACTIONS OF UNSECURED LOAN IN THE NAME OF OM PRAKASH GUPTA (HUF). THE ASS ESSEE CARRIED ON BUSINESS IN THE NAME OF ASIAN CHEM DYES CORPORATION. THE ASSESS EE ACCEPTED THE UNSECURED LOAN THROUGH THE BROKERS IN THE NAME OF TRADE NAME I. E. ASIAN CHEM DYES ITA 411/AGRA/2009 & CO. 08/AGRA/10 6 CORPORATION, GWALIOR. SINCE THE TRANSACTION WAS IN THE NAME OF ASIAN CHEM DYES CORPORATION, HENCE THE BROKERS EXCEPT ONE BROKER SH RI DEEPAK MANGAL HAD REPLIED THROUGH THE REGISTERED POST MENTIONING THAT THERE W AS NO TRANSACTION ROUTED THROUGH THEM IN THE NAME OF OM PRAKASH GUPTA (HUF). THEREFO RE, HE SUBMITTED AND REQUESTED THAT THE TRANSACTIONS ROUTED THROUGH BROK ERS MAY BE VERIFIED THROUGH THEM, WHOSE NAME IS MENTIONED IN COLUMN TITLED AS B ROKER'S NAME AND ADDRESS. THE TRANSACTIONS NOT ROUTED THROUGH BROKERS MAY KIN DLY BE VERIFIED THROUGH THE PARTIES CONCERNED, WHOSE PAN NO. AND COMPLETE ADDRE SS IS GIVEN ON THE CONFIRMATION AND COPY OF ACCOUNT. ON THE DATE OF HE ARING, THE ASSISTANT COMMISSIONER OF INCOME TAX WAS ALSO PRESENT AND REQ UESTED FOR FURTHER TIME TO ISSUE THE SUMMONS TO THE BROKERS FOR VERIFICATION O F TRANSACTIONS IN THE NAME OF APPELLANT AS WELL AS HIS TRADE NAME. 8. AFTER CONSIDERING THE AFORESAID SUBMISSION OF TH E LD. COUNSEL FOR THE ASSESSEE AND REQUEST OF THE ASSISTANT COMMISSIONER OF INCOME TAX, FURTHER TIME WAS ALLOWED. ACCORDINGLY THE ASSISTANT COMMISSIONER OF INCOME TAX, HAD ISSUED SUMMONS TO TWELVE BROKERS ONLY AND EXAMINED THE ISS UE BY RECORDING THE STATEMENT OF BROKERS AND PLACING THE DOCUMENTS, NAM ELY DETAIL TRANSACTION, DETAIL OF DALALI PAID BY THE ASSESSEE, COPY OF INCOME TAX RETURN OF THE BROKERS, WHEREVER AVAILABLE, COPY OF BANK STATEMENTS OF THE BROKERS A ND COPY OF COUNTERFOIL OF ITA 411/AGRA/2009 & CO. 08/AGRA/10 7 DEPOSIT SLIP OF THE BROKERS, ON RECORD. AFTER EXAMI NING THE ISSUE, THE ASSISTANT COMMISSIONER OF INCOME TAX HAD SUBMITTED THE REMAND REPORT AS UNDER :- 'AS DIRECTED, FRESH SUMMONS DATED 5/5/09 WERE ISSUE D IN THIS CASE IN THE NAME OF ASIAN CHEMDYES, DAULATGANJ, GWALIOR TO THE FOLLOWING BROKERS :- 1. SHRI LACHMAN DAS BAGAD, DEEDWANA OLI, LASHKAR, G WALIOR 2. SHRI B. K. BANGAD, DEEDWANA OLI, LASHKAR, GWALIO R 3. SHRI BHAGWAN DAS GOYAL, DEEDWANA OU, LASHKAR, GW ALIOR 4. SHRI PRAMOD GOYAL, DEEDWANA OLI, LASHKAR, GWALIO R 5. SHRI DEEPAK MANGAL, HUZRAT ROAD, LASHKAR, GWALIO R 6. SHRI MURLIDHAR CHATURVEDI, SARAFA BAZAR, LASHKAR , GWALIOR 7. SHRI VIJAY KUMAR MEHTA, SARAFA BAZAR, LASHKAR 8. SHRI OM PRAKASH DHARIWAL, LALA KA BAZAR, LASHKAR , GWALIOR 9. SHRI NATTHULAL GUPTA, LOHIYA BAZAR, LASHKAR, GWA LIOR 10.SHRI SUNIL GOYAL, DEEDWANA OLI, LASHKAR, GWALIOR 11. SHRI SANJAY JAIN, SARAFA BAZAR, LASHKAR, GWALIO R 12. SHRI HEM KUMAR JAIN, SARAFA BAZAR,. LASHKAR, GW ALIOR THE ABOVE PERSONS/DALALS WERE ASKED TO FURNISH THE FOLLOWING INFORMATION/DOCUMENTS : 1. PERSONAL DEPOSITION. 2. COMPLETE BOOKS OF ACCOUNTS, RECEIPT VOUCHERS ALO NGWITH COPY OF THE BANK STATEMENT FOR THE YEAR UNDER CONSIDERATIO N. 3. COPY OF INCOME TAX RETURN FOR THE YEAR UNDER CON SIDERATION. 4. PRODUCE THE PARTIES/DEWAL WHO HAVE ADVANCE LOAN TO THE ABOVE MENTIONEDASSESSEE THROUGH YOU. OUT OF THE TWELVE BROKERS, TEN BROKERS HAVE ATTENDE D THE OFFICE IN RESPONSE TO SUMMON U/S.131 AND SUBMITTED THE FOLLOW ING. 1. ONLY LIST OF PARTIES / DEWAL WHO HAVE ADVANCED L OAN TO THE ABOVE MENTIONED ASSESSEE. ITA 411/AGRA/2009 & CO. 08/AGRA/10 8 2. 5 BROKERS NAMELY SHRI DEEPAK MANGAL, SHRI PRAMOD GOYAL, SHRI SUNIL GOYAL, SHRI BHAGWANDAS GOYAL, SHRI MURLIDHAR CHATURVEDI FURNISHED EVIDENCE REGARDING INCOME TAX RETURN FOR THE YEAR UNDER CONSIDERATION I.E. A. Y. 200506. 3. BROKERS AS ABOVE FURNISHED THE DETAILS OF DALALI RECEIVED FROM THE ASSESSEE. FROM THE PERUSAL OF THE ABOVE, IT IS INFORMED THAT THE ABOVE PERSONS HAVE FAILED TO PRODUCE REQUIRED INFORMATION / DOCUM ENTS AS MENTIONED IN THE SUMMONS EXCEPT MENTIONED ABOVE. IN THE ABSENCE OF C OMPLETE INFORMATION OR DOCUMENTARY EVIDENCES AND VERIFICATION OF PERSONS W HO HAVE GIVEN THE LOANS ETC. THE TRANSACTIONS CLAIMED TO BE ENTERED INTO AN D GENUINENESS OF THE LOANS / DOCUMENTS SUBMITTED BEFORE YOUR HONOUR COULD NOT BE CONFIRMED OR VERIFIED. THEREFORE, MY VIEWS TAKEN DURING THE COUR SE OF ASSESSMENT PROCEEDINGS REMAINS UNCHANGED AND ASSESSEE STILL DO ES NOT DESERVE ANY RELIEF ON THIS GROUND. HENCE, IN VIEW OF THE ABOVE AND UNDER THE CIRCUMSTANCES, THE REQUEST OF THE ASSESSEE MAY NOT BE ENTERTAINED. ' 9. AFTER SUBMITTING THE REMAND REPORT, A COPY OF WH ICH WAS GIVEN TO THE LD. COUNSEL FOR THE ASSESSEE FOR FURNISHING THE REJOIND ER, HE VEHEMENTLY CONTESTED AND SUBMITTED THE WRITTEN SUBMISSIONS AS UNDER :- DURING THE YEAR UNDER CONSIDERATION THE APPELLANT HAS ACCEPTED THE UNSECURED LOANS FROM VARIOUS CREDITORS. OUT OF THOS E UNSECURED LOANS, MOST OF THEM THROUGH BROKERS, SOME OF THE LOANS WERE ACC EPTED DIRECTLY FROM FAMILY MEMBERS AN RELATIVES. DURING COURSE OF ASSES SMENT PROCEEDINGS, THE LD. ASSISTANT COMMISSIONER OF INCOME TAX HAS ACCEPT ED LOANS OF RS.3,00,000/- FROM FEW CREDITORS BUT MADE THE ADDIT ION OF RS.52,05,500/- IN THE NAME OF VARIOUS PERSONS. SINCE THE APPELLANT FE LT SICK WITH THE PARKINSON DISEASE, THEREFORE HE COULD NOT COLLECT THE RELEVAN T DOCUMENTS AND PREVENTED TO FILE THE NECESSARY DOCUMENTS. THE BROKERS AND CR EDITORS DID NOT CO- OPERATE THE STAFF OF THE APPELLANT. THEREFORE, THE APPELLANT PREFERRED AN APPEAL WITH THE REQUEST TO ADMIT THE FRESH EVIDENCE S IN THE SHAPE OF THE CONFIRMATION AND OTHER SUPPORTING DOCUMENTS TO PROV E THE CASH CREDITS IN VIEW OF RULE 46A OF THE INCOME TAX RULES, 1962. ITA 411/AGRA/2009 & CO. 08/AGRA/10 9 ACCORDINGLY THE APPELLANT HAD SUBMITTED WRITTEN SUB MISSION DT. 08.07.08 ALONG WITH THE LIST OF TRANSACTIONS OF UNS ECURED LOAN GIVING DETAILS REGARDING THOSE TRANSACTIONS, PHOTOCOPY OF DISCHARG ED PROMISSORY NOTES, COPY OF ACCOUNT AND CONFIRMATION OF ALL CREDITORS I N DUPLICATE. MOST OF THE TRANSACTIONS WERE THROUGH BROKERS. THE COPY OF WRIT TEN SUBMISSION WAS FORWARDED TO THE LD. ASSTT. COMMISSIONER OF INCOME TAX FOR EXAMINING THE TRANSACTIONS OF UNSECURED LOANS. THE LD. ASSTT. COM MISSIONER OF INCOME TAX HAD OPTED TO ISSUE SUMMONS TO NINE BROKERS AND ACCO RDINGLY ISSUED SUMMONS DT. 25.03.09. THAT, THE LD. ASSISTANT COMMISSIONER OF INCOME TAX HAD ISSUED THE SUMMONS TO THE NINE BROKERS FOR VERIFICATION OF TRA NSACTIONS IN THE CASE OF OM PRAKASH GUPTA HUF, THE APPELLANT. BUT ALL THE TR ANSACTIONS OF UNSECURED LOANS ENTERED INTO BY THE APPELLANT WERE IN THE NAME OF ASIAN CHEM DYES CORPORATION, A PROPRIETORSHIP CONCERN OF THE APPELLANT AND NOT IN THE NAME OF OM PRAKASH GUPTA HUF. BECAUSE OM PRA KASH GUPTA HUF IS PROP. M/S ASIAN CHEM DYES CORPORATION. THEREFORE , THE BROKERS GET CONFUSED AND THEY REPLIED THROUGH REGISTERED POST T HAT NO TRANSACTION WAS ROUTED THROUGH THEM IN THE NAME OF OM PRAKASH GUPTA HUF. ONE BROKER SHRI DEEPAK MANGAL ATTENDED THE OFFICE ON 30.03.09 AND CONFIRMED THE TRANSACTION. ACCORDINGLY, THE LD. ASSISTANT COMMISS IONER OF INCOME TAX HAD SUBMITTED HIS REMAND REPORT DT. 30.03.09 I.E. THE D ATE OF HEARING FIXED MENTIONING THAT 'NONE ATTENDED. THUS GENUINENESS OF THE LOANS / DOCUMENTS FILED BEFORE YOUR HONOUR REMAINS UNVERIFIED'. SINCE THE SUMMONS ISSUED BY THE LD. ASSTT. COMMISSI ONER OF INCOME TAX WAS HAVING INCOMPLETE INFORMATION, HENCE IT WAS REQUEST ED TO KINDLY ISSUE THE SUMMON TO THE PERSON CONCERNED MENTIONING THE NAME OF FIRM ALSO. ACCORDINGLY THE LD. ASSTT. COMMISSIONER OF INCOME TAX HAD OPTED TO ISSU E THE SUMMON AND ACCORDINGLY ISSUED SUMMONS U/S 131 ON 05.05.09 TO T WELVE BROKERS. THAT, IN RESPONSE TO THE SUMMONS ISSUED TO TWELVE B ROKERS ON 05.05.09, TEN BROKERS HAVE ATTENDED THE OFFICE, WHOSE STATEMENTS WERE REC ORDED. DURING COURSE OF STATEMENT, THEY HAVE CONFIRMED THE TRANSACTION OF U NSECURED LOANS IN THE NAME OF THE APPELLANT ROUTED THROUGH THEM. THEY HAVE ALSO C ONFIRMED THE PAYMENT OF BROKERAGE PAID TO THEM BY THE ASSESSEE THROUGH ACCO UNT PAYEE CHEQUE ONLY. ALL THESE BROKERS HAVE SUBMITTED THE COPY OF EITHER THE IR BANK STATEMENT OR COUNTERFOIL OF DEPOSIT SLIP FOR DEPOSITING THE CHEQUE OF BROKER AGE IN THEIR BANK ACCOUNT TO VERIFY THE GENUINENESS OF THE TRANSACTION OF BROKER AGE. THEY HAVE ALSO CONFIRMED ITA 411/AGRA/2009 & CO. 08/AGRA/10 10 THAT THE APPELLANT HAD PAID THE BROKERAGE TO THEM A FTER DEDUCTING TAX AT SOURCE, WHEREVER APPLICABLE. OUT OF TEN BROKERS, FIVE BROKE RS HAVE SUBMITTED THEIR COPY OF ACKNOWLEDGEMENT OF RETURN OF INCOME, TWO BROKERS HA VE GIVEN THEIR PAN NO. AND THREE RE NOT ASSESSED TO TAX. 10. AFTER RECORDING ALL THESE STATEMENTS, THE ASSES SING OFFICER HAS SUBMITTED THE REMAND REPORT DT. 05.06.09 AS UNDER : - OUT OF THE TWELVE BROKERS, TEN BROKERS HAVE ATTEND ED THE OFFICE IN RESPONSE TO SUMMONS U/S. 131 AND SUBMITTED THE FOLLOWING :- 1. ONLY LIST OF PARTIES/DEWAL WHO HAVE ADVANCED LOAN T O THE ABOVE MENTIONED ASSESSEE. 2. FIVE BROKERS NAMELY SHRI DEEPAK MANGAL, SHRI PRAMOD GOYAL, SHRI SUNIL GOYAL, SHRI BHAGWANDAS GOYAL, SHRI MURLIDHA R CHATURVEDI FURNISHED EVIDENCE REGARDING INCOME TAX RETURN FOR THE YEAR UNDER CONSIDERATION I.E. A. Y. 2005-06. 3. BROKERS AS ABOVE FURNISHED THE DETAILS OF DALALI RE CEIVED FROM THE ASSESSEE. 4. FROM THE PERUSAL OF THE ABOVE, IT IS INFORMED TH AT THE ABOVE PERSONS HAVE FAILED TO PRODUCE REQUIRED INFORMATION / DOCUMENTS AS MENTIONED IN THE SUMMONS EXCEPT MENTIONED ABOVE. IN THE ABSENCE OF C OMPLETE INFORMATION OR DOCUMENTARY EVIDENCES AND VERIFICATION OF PERSONS W HO HAVE GIVEN THE LOANS ETC. THE TRANSACTIONS CLAIMED TO BE ENTERED INTO AN D GENUINENESS OF THE LOANS / DOCUMENTS SUBMITTED BEFORE YOUR HONOUR COULD NOT BE CONFIRMED OR VERIFIED. THEREFORE MY VIEWS TAKEN DURING THE COURS E OF ASSESSMENT PROCEEDINGS REMAINS UNCHANGED AND ASSESSEE STILL DO ES NOT DESERVE ANY RELIEF ON THIS GROUND. HENCE, IN VIEW OF THE ABOVE AND UNDER THE CIRCUMSTANCES, THE REQUEST OF THE ASSESSEE MAY NOT BE ENTERTAINED. 11. THE COPY, OF REMAND REPORT WAS GIVEN TO THE LD. COUNSEL FOR THE ASSESSEE WHO HAVE SUBMITTED THE WRITTEN SUBMISSION AS UNDER :- ITA 411/AGRA/2009 & CO. 08/AGRA/10 11 IT IS SUBMITTED THAT THE LD. ASSESSING OFFICER IS NOT JUSTIFIED IN SENDING THE REMAND REPORT NOT ACCEPTING THE TRANSACTIONS OF UNS ECURED LOANS AS GENUINE. THAT THE APPELLANT HAD SUBMITTED THE COPY OF ACCOUN T OF CREDITOR, CONFIRMATION FROM THE CREDITOR GIVING DETAIL OF TRA NSACTION AND COPY OF DISCHARGED PROMISSORY NOTES WITH INCOME TAX PERMANENT ACCOUNT NUMBER OF THE CREDITORS. THE NAME OF BROKER IS MENTIONED ON THE FACE OF DISC HARGED PROMISSORY NOTES. ALL THESE DOCUMENTS WERE SUBMITTED BEFORE YOUR HONOUR A ND FORWARDED TO THE LD. ASSESSING OFFICER. DURING COURSE OF REMAND REPORT T HE LD. ASSTT. COMMISSIONER OF INCOME TAX HAD OPTED TO ISSUE THE SUMMONS TO TWELVE BROKERS ONLY AND ACCORDINGLY ISSUED THE SUMMONS. MEANING THEREBY THE OTHER TRANSACTIONS NOT ROUTED THROUGH THOSE TWELVE BROKERS ARE ACCEPTED BY THE LD. ASSTT. COMMISSIONER OF INCOME TAX. ACCORDINGLY, THE REMAND REPORT TREAT ING THOSE TRANSACTIONS AS NOT GENUINE IS NOT JUSTIFIED. IN RESPONSE TO THE SUMMONS, TEN BROKERS HAVE ATTEND ED THE OFFICE. TWO BROKERS SHRI SANJAY JAIN AND SHRI HEM KUMAR JAIN HA VE NOT ATTENDED THE OFFICE INSPITE OF SERVICE OF THE SUMMONS. SO FAR THE SUMMO NS NOT COMPLIED WITH BY TWO BROKERS IS CONCERNED, THE ATTENDANCE OF THOSE TWO W ITNESSES MUST BE ENFORCED BY THE LD. ASSTT. COMMISSIONER OF INCOME TAX BY EXERCI SING THE POWER U/S 131 READ WITH ORDER 16 RULE 10 OF THE CIVIL PROCEDURE CODE, 1908 IF THEIR EVIDENCE IS MATERIAL IN THE OPINION OF THE LD. ASSTT. COMMISSIO NER OF INCOME TAX. SINCE THE LD. ASSTT. COMMISSIONER OF INCOME TAX HAS NOT EXERCISED THE POWER U/S 131 READ WITH ORDER 16 RULE 10 OF THE CIVIL PROCEDURE CODE, 1908 TO ENFORCE THE ATTENDANCE OF THE WITNESS I.E. TWO BROKERS, HENCE THE REMAND REPO RT TREATING THE TRANSACTION NON GENUINE IN RESPECT OF THE TRANSACTIONS ROUTED THROU GH THOSE TWO BROKERS, IS ALSO NOT JUSTIFIED. THE ADDITION IN RESPECT OF THE TRANSACTIONS ROUTED THROUGH THOSE TWO BROKERS IS NOT JUSTIFIED BECAUSE THEY DID NOT TURN UP INSPI TE OF SUMMONS SERVED UPON THEM. THE APPELLANT CANNOT BE BLAMED AND PENALIZED FOR NO T ATTENDING THE OFFICE IN COMPLIANCE OF THE SUMMON BY THE WITNESS INSPITE OF SERVICE OF THE SUMMONS. RELIANCE IS PLACED ON : SMT. LEELA VS. GOPAL SINGH & OTHERS, 2000(3)MPLT 44 9 (MP): CODE OF CIVIL PROCEDURE (5) OF 1908 ORDER XVI RULE 7A(3). 10 AND SECTION 115 WITNESS DID NOT ATTEND COURT EVEN AFTER SUMMONS SERVED ON THEM TRIAL COURT ITA 411/AGRA/2009 & CO. 08/AGRA/10 12 OPINED THAT IS THE DUTY OF LITIGANT TO KEEP THEM PR ESENT IN CURT EVIDENCE OF PLAINTIFF CLOSED AGAINST IT, THIS REVISION HELD TRIAL COURT SHOULD HAVE COMPELLED THOSE WITN ESSES BY ISSUING THE PROCLAMATION UNDER XVI RULE 10. CPC APPROPRIATE P ROVISIONS OF LAW SHOULD BE APPLIED FOR ADMINISTRATION OF JUSTICE AND FOR MAINT AINING THE DIGNITY OF CORT ORDER OF TRIAL COURT SET ASIDE REVISION ALLOWED. NATHURAM PREMCHAND VS. CIT [1963] 49 ITR 561 (ALL) : INCOME TAX ENQUIRIES EXAMINATION OF WITNESS DU TY OF INCOME TAX OFFICER SUMMON MATERIAL WITNESS NO INFERENCE CAN BE DRAWN AGAINST AN ASSESSMENT MERELY BECAUSE THE ASSESSEE HAD TAKEN A DASTISUMMON FOR PRODUCTION OF A WITNESS AND HAD NOT PRODUCED HIM. IT IS THE DUTY OF THE INC OME TAX OFFICER TO ENFORCE THE ATTENDANCE OF THE WITNESS IF HIS EVIDENCE IS MATERI AL, IN EXERCISE OF HIS POWERS U/S. 37(1) OF THE I.T. ACT, RED WITH ORDER 16 RULE 10 OF THE CPC. CIT VS.U.M. SHAH [1973] 90 ITR 396 (BOM.): IF THE PARTIES HAD RECEIVED THE SUMMONS BUT DID NO T APPEAR, THE ASSESSEE COULD NOT BE BLAMED IN RESPECT OF OTHER TRANSACTIONS ROUTED THROUGH TEN BROKERS, WHO HAVE ATTENDED THE OFFICE AND WHOSE STATEMENTS ARE RECORD ED, IT IS SUBMITTED THAT THEY HAVE CONFIRMED THE FOLLOWING FACTS : 1. THE TRANSACTION OF UNSECURED LOAN ROUTED THROUGH TH EM AND SUBMITTED LIST OF TRANSACTIONS GIVING COMPLETE DETA ILS I.E. NAME, ADDRESS, PAN AND MODE OF TRANSACTION UNDER THEIR SI GNATURE. 2. ALL THE TEN BROKERS HAVE CONFIRMED THAT THEY HAD RE CEIVED THEIR BROKERAGE/DALALI THROUGH ACCOUNT PAYEE CHEQUE FROM THE APPELLANT FOR THE TRANSACTIONS OF LOAN ROUTED THROUGH THEM AN D SUBMITTED THE DETAIL OF BROKERAGE / DALALI RECEIVED BY THEM FROM THE APPELLANT UNDER THEIR SIGNATURE. ITA 411/AGRA/2009 & CO. 08/AGRA/10 13 3. THE CHEUGES OF THE BROKERAGE / DALALI WERE DEPOSITE D IN THEIR BANK ACCOUNT. 4. ALL THE TEN BROKERS HAVE SUBMITTED EITHER THEIR BAN K STATEMENT OR COUNTERFOIL OF DEPOSITS SLIP FOR DEPOSITING THE CHE QUE OF BROKERAGE / DALALI INTO THEIR BANK ACCOUNT. 5. OUT OF TEN BROKERS, FIVE HAVE SUBMITTED COPY OF THE IR ACKNOWLEDGEMENT OF RETURN OF INCOME, TWO HAVE GIVEN THEIR PAN NO. AND THREE ARE NOT ASSESSED_TO TAX. 6. THEY HAVE IDENTIFIED AND CONFIRMED THE PROMISSORY N OTES OF TRANSACTIONS ROUTED THROUGH THEM HAVING NAME OF THE BROKER ON THE FACE OF THE PROMISSORY NOTE. THAT, IN ADDITION TO ABOVE, ALL THE TWELVE BROKERS HAVE GIVEN THE CONFIRMATION FOR ALL THE TRANSACTIONS ROUTED THROUG H THEM IN THE NAME OF ASIAN CHEM DYES CORPORATION. A COPY OF WHICH WAS SU BMITTED BEFORE THE LD. ASSTT. COMMISSIONER OF INCOME TAX ON 22.05.09 A LONG WITH WRITTEN SUBMISSION GIVING DETAIL OF TAX DEDUCTION AT SOURCE FROM BROKERAGE PAID TO THE BROKERS I.E. BEFORE FINALIZING THE REMAND REPOR T. COPY OF LETTER DT. 22.05.09 IS ENCLOSED HEREWITH AN D MARKED AS NNEX.-P-1- 22. THEREFORE, IN VIEW OF THE ABOVE, THE APPELLANT HAS SUBMITTED THE COPY OF ACCOUNT OF THE CREDITORS, CONFIRMATION BY CREDIT ORS GIVING COMPLETE DETAIL I.E. NAME, ADDRESS, PAN, MODE OF TRANSACTIONS AND D ISCHARGED PROMISSORY NOTES ALSO WHICH WERE CONFIRMED BY ALL THE TEN BROK ERS WHO HAVE ATTENDED OFFICE IN COMPLIANCE OF THE SUMMONS AND DETAIL OF T DS MADE FROM BROKERAGE PAID TO BROKERS IN RESPECT OF THOSE TRANSACTIONS OF UNSECURED LOAN ROUTED THROUGH BROKERS. IN VIEW OF ALL THESE, THE ADDITION U/S 68 OF THE ACT TREATING THEM AS NON GENUINE IS NOT JUSTIFIED. CIT VS. ORISSA CORPORATION 'LTD. [1986J 159 ITR (SC ) 0078 ASSESSEE PRODUCING LETTERS OF CONFIRMATION AND DIS CHARGED HUNDIES AND GIVING PARTICULARS OF CREDITORS - CREDITORS ASS ESSEE'S WHOSE INDEX NUMBERS WERE WITH THE DEPARTMENT - NOTICES ISSUED T O CREDITORS FOR ITA 411/AGRA/2009 & CO. 08/AGRA/10 14 APPEARANCE RETURNED WITH ENDORSEMENT 'LEFT' - NO FU RTHER ATTEMPT MADE TO EXAMINE SOURCE OF CREDITS - TRIBUNAL FINDIN G THAT ASSESSEE HAD DISCHARGES ONUS - BASED ON EVIDENCE - NO QUESTI ON OF LAW ARISES - INCOME TAX ACT, 1961, SS. 68, 131, 256. CIT VS. GANI SILK PALACE [1988J 171 ITR 373 (MAD): HELD THAT WHEN THE ASSESSEE ON ITS PART HAD PRODUC ED THE DISCHARGED HUNDIS AND ALSO VOUCHERS SHOWING PAYMENT OF INTERES T, THAT WAS SUFFICIENT FOR THE ASSESSEE TO DISCHARGE ITS INITIA L BURDEN. 12. APART FROM THE AFORESAID WRITTEN SUBMISSION, RE LYING UPON THE DECISION OF HON 'BLE SUPREME COURT IN THE CASE OF CIT VS. SMT. P.K. NOORJAHAN [1999] 237 ITR 570 (SC) AND JINDAL UDYOG VS. ITO [2002] 83 ITD 248 (CHD.) , THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT NORMALLY, W HEN THERE IS A CASH CREDIT IN THE BOOKS OF ACCOUNT MAINTAINED BY THE ASSESSEE FOR ANY PREVIOUS YEAR AND NO EXPLANATION OF THE NATURE AND SOURCE OF CREDIT IS O FFERED BY THE ASSESSEE OR EXPLANATION OFFERED IS NOT CONSIDERED AS SATISFACTO RY BY THE ASSESSING OFFICER, THE CREDIT IS TO BE CHARGED AS INCOME OF THE ASSESSEE. THE RULE CONTAINED IN SECTION 68 IS NOT ABSOLUTE RULE. THE WORDS USED IN SECTION 68 IS 'MAY' AND THEREFORE CREDIT MAY NOT BE CHARGED TO TAX EVEN IF NATURE AND SOURCE THEREOF IS NOT EXPLAINED. THE ASSESSING OFFICER HAS TO USE HIS DISCRETION NOT TO MAKE ANY ADDITION. THE ASSESSING OFFICER IS NOT OBLIGED TO MAKE THE ADDITI ON WHEREVER EXPLANATION REGARDING IT IS NOT SATISFACTORY. THE WORD 'MAY' CA NNOT BE INTERPRETED TO MEAN 'SHALL'. ITA 411/AGRA/2009 & CO. 08/AGRA/10 15 13. THE LD. CIT(A) CONSIDERING THE MATERIAL ON RECO RD, REMAND REPORT AND STATEMENT OF THE BROKERS DELETED THE ADDITION OF RS .45,30,500/- AND INTEREST THEREON, ON WHICH THE REVENUE IS IN APPEAL AND CONFIRMED THE ADDITION OF RS.6,75,000/- ON WHICH THE ASSESSEE IS IN CROSS OBJECTION ABOVE. 14. THE FINDINGS OF THE LD. CIT(A) IN APPELLATE ORD ER ARE REPRODUCED AS UNDER :- I HAVE GONE THROUGH THE WRITTEN SUBMISSION, ORAL A RGUMENTS, REMAND REPORT, ASSESSMENT ORDER AND STATEMENT OF BROKERS R ECORDED BY THE ASSISTANT COMMISSIONER OF INCOME TAX DURING PROCEEDING OF REM AND REPORT. I HAVE GONE THROUGH THE VARIOUS DOCUMENTS, NAMELY COPY OF ACCOU NT DULY CONFIRMED BY THE CREDITORS AND COPY OF DISCHARGED PROMISSORY NOTES ( WHEREVER APPLICABLE' AND AVAILABLE) GIVING THE DETAILS OF NAME, ADDRESS AND PAN NO. (WHEREVER APPLICABLE AND AVAILABLE), SUBMITTED FIRST TIME BEFORE ME AND THE REASON OF NOT SUBMITTING THE SAME DURING COURSE OF ASSESSMENT PROCEEDINGS. THE A PPELLANT COULD NOT SUBMIT THE DOCUMENTS DURING COURSE OF ASSESSMENT PROCEEDINGS B ECAUSE OF NON AVAILABILITY AT THAT TIME. THE APPELLANT COULD NOT COLLECT THOSE DO CUMENTS AND ACCORDINGLY WAS PREVENTED TO FILE THE SAME DURING COURSE OF ASSESSM ENT PROCEEDINGS, WHICH WERE FORWARDED TO THE ASSTT. COMMISSIONER OF INCOME TAX FOR HIS COMMENTS. THEREFORE, AFTER CONSIDERING THE WRITTEN SUBMISSION AND REMAND REPORT THESE DOCUMENTS ARE BEING ADMITTED IN VIEW OF RULE 46A OF THE INCOME TA X RULES, 1962. I HAVE GONE TROUGH THE ASSESSMENT ORDER AND FIND TH AT THE ASSISTANT COMMISSIONER OF INCOME TAX HAS MADE THE ADDITION OB SERVING THAT THE EXPLANATION FURNISHED BY THE ASSESSEE IS NOT SATISFACTORY AND R EITERATED THE SAME FINDING EVEN IN THE REMAND REPORT DT. 30.03.09 AND 05.06.09. ON THE OTHER HAND, THE LD. A.R. OF THE APPELLANT VE HEMENTLY CONTESTED THAT THE APPELLANT HAD SUBMITTED THE DOCUMENTS NAMELY CO PY OF ACCOUNT DULY CONFIRMED BY THE CREDITORS AND COPY OF DISCHARGED PROMISSORY NOTES (WHEREVER APPLICABLE AND AVAILABLE) GIVING THE DETAILS OF NAME, ADDRESS AND PAN NO. (WHEREVER APPLICABLE. AND AVAILABLE). DURING COURSE OF REMAND REPORT, THE ASSISTANT COMMISSIONER OF INCOME TAX HAD OPTED TO ISSUE THE S UMMONS AND ACCORDINGLY ISSUED SUMMON U/S. 131 ON 05.05.09 TO ALL THE TWELV E BROKERS. MEANING THEREBY, ITA 411/AGRA/2009 & CO. 08/AGRA/10 16 THE OTHER TRANSACTIONS NOT ROUTED THROUGH THOSE TWE LVE BROKERS ARE ACCEPTED BY THE ASSISTANT COMMISSIONER OF INCOME TAX. OUT OF TWELVE BROKERS, TWO OF THEM, SHRI HEM KUMAR JAIN AND SHRI SANJAY JAIN DID NOT COMPLY THE SUMMONS INSPITE OF SERVICE OF SUMMONS. THE APPELLANT HAD REQUESTED THE ASSISTANT COMMISSIONER OF INCOME TAX TO ENFORCE THE ATTENDANCE OF THOSE TWO B ROKERS ALSO BY EXERCISING THE POWERS U/S. 131 READ WITH ORDER 16 RULE 10 OF THE C IVIL PROCEDURE CODE, 1908 VIDE WRITTEN SUBMISSION DT. 21.05.09 SUBMITTED ON 22.05. 09, IF THEIR WITNESS IS MATERIAL. THE LD. A.R. OF THE APPELLANT FURTHER SUBMITTED THA T THE ASSISTANT COMMISSIONER OF INCOME TAX HAD NOT ENFORCED THE ATTENDANCE OF THOSE TWO BROKERS BY EXERCISING THE POWERS U/S. 131 READ WITH ORDER 16 RULE 10 OF THE C IVIL PROCEDURE CODE, 1908 INSPITE OF WRITTEN REQUEST DT. 21.05.09 SUBMITTED O N 22.05.09. MEANING THEREBY, THE ASSISTANT COMMISSIONER OF INCOME TAX HAS NOT ENFORC ED THE ATTENDANCE OF THOSE TWO BROKERS. ACCORDINGLY, THE ADDITION OF TRANSACTI ONS ROUTED THROUGH THOSE TWO BROKERS IS NOT SUSTAINABLE IN VIEW OF DECISION IN T HE CASES OF SMT. LEELA VS. GOPAL SINGH & OTHERS 2000(3) MPLT 449 (MP.), NATHURAM PRE MCHAND VS. CIT [1963] 49 ITR 561 (ALL.) AND CIT VS. U.M. SHAH [1973] 90 I TR 396 (BOM.). IN RESPONSE TO SUMMONS, TEN BROKERS HAVE ATTENDED THE OFFICE WHOSE STATEMENTS WERE RECORDED. DURING COURSE OF STATEMENT, THEY HAVE CONFIRMED THE TRANSACTIONS OF UNSECURED LOAN ROUTED THROUGH THEM AND SUBMITTED THE DETAILS OF THOSE TRANSACTIONS, DETAIL OF DALALI RECEIVED BY THEM FROM APPELLANT AFTER DEDUCT ING THE TAX AT SOURCE, WHEREVER APPLICABLE, COPY OF THEIR INCOME TAX RETURN (WHEREV ER AVAILABLE), PAN NO. (WHEREVER APPLICABLE) AND COPY OF THEIR BANK ACCOUN TS AND COPY OF COUNTERFOIL OF DEPOSIT SLIPS FOR DEPOSITING THE CHEQUE OF DALALI I N THEIR RESPECTIVE BANK ACCOUNT. HE FURTHER SUBMITTED THAT A WRITTEN CONFIRMATION FR OM ALL THE TWELVE BROKERS CONFIRMING ALL THE TRANSACTIONS ROUTED THROUGH THEM WAS SUBMITTED ON 22.05.09 BEFORE THE ASSISTANT COMMISSIONER OF INCOME TAX I.E . BEFORE SENDING THE REMAND REPORT. THE LD. A.R. OF THE APPELLANT HAS SUBMITTED THAT THE APPELLANT HAD ACCEPTED THE LOANS THROUGH BROKERS. ACCORDINGLY, THE SOURCE OF LOAN FOR THE APPELLANT IS BROKER. THE APPELLANT SUBMITTED THE CONFIRMATION FR OM BROKER AS WELL AS FROM THE CREDITORS ALSO SOURCE AS WELL AS SOURCE OF SOURCE A LSO EXPLAINED. THEREFORE THE APPELLANT HAD DISCHARGED THE PRIMARY ONUS BY FILING THE RELEVANT DETAILS AND ACCORDINGLY, THE ADDITION FOR CASH CREDITS U/S 68 O F THE ACT IS NOT JUSTIFIED IN VIEW OF DECISION IN THE CASE OF CIT VS. GANI SILK PALACE [1 988] 171 ITR 373(MAD.) AND CIT VS. ORISSA CORPORATION LTD. [1986] 159 ITR (SC) 0078. THE LD. A.R. OF THE APPELLANT, RELYING UPON THE DECISION OF HON 'BLE SU PREME COURT IN THE CASE OF CIT VS. SMT. P.K. NOORJAHAN [1999] 237 ITR 570 (SC) AND JINDAL UDYOG VS. ITO [2002] 83 ITD 248 (CHD.), SUBMITTED THAT NORMALLY, WHEN THERE IS A CASH CREDIT IN THE BOOKS OF ACCOUNT MAINTAINED BY THE ASSESSEE FOR ANY PREVIOUS YEAR AND NO EXPLANATION, OF THE NATURE AND SOURCE OF CREDIT IS OFFERED BY THE ASSESSEE OR EXPLANATION OFFERED IS NOT CONSIDERED AS SATISFACTO RY BY THE ASSESSING OFFICER, THE ITA 411/AGRA/2009 & CO. 08/AGRA/10 17 CREDIT IS TO BE CHARGED AS INCOME OF THE ASSESSEE. THE RULE CONTAINED IN SECTION 68 IS NOT ABSOLUTE RULE. THE WORD USED IN SECTION 68 I S 'MAY' AND THEREFORE CREDIT MAY NOT BE CHARGED TO TAX EVEN IF NATURE AND SOURCE THE REOF IS NOT EXPLAINED. THE ASSESSING OFFICER HAS TO USE HIS DISCRETION NOT TO MAKE ANY ADDITION. THE ASSESSING OFFICER IS NOT OBLIGED TO MAKE THE ADDITION WHEREVE R EXPLANATION REGARDING IT IS NOT SATISFACTORY. THE WORD 'MAY' CANNOT BE INTERPRETED TO MEAN 'SHALL'. I HAVE GONE THROUGH THE DETAIL OF TRANSACTIONS AND STATEMENT OF BROKERS RECORDED DURING COURSE OF REMAND PROCEEDINGS AND OB SERVED THE FACTUAL POSITION AS UNDER:- 1. DETAIL OF TRANSACTIONS OF UNSECURED LOAN THROUGH BROKERS AND DIRECTLY FROM OTHER PARTIES IS AS UNDER :- NAME OF BROKERS TOTAL AMOUNT STATUS OF CONFIRMATI ON BY WAY NUMBER OF INVOLVED OF STATEMENT RECORDED DURING TRANSACTIONS REMAND REPORT. SH.LACHMAN DAS BANGAD 7 4,80,000/- STATEMENT OF BR OKER WAS RECOR- DED WHO HAD CONFIRMED THE TRANSACTIONS AND SUBMITTED THE DETAILS OF TRANSACTIONS UNDER HIS SIGNATURE TALLIED WITH THE DETAILS FLED BY THE APPELLA- NT. BROKER HAS ALSO CONFIRMED DALALI RECEIVED BY HIM THROUGH CHEQUE AFTER MAKING TDS(WHEREVER APPLICABLE) SHRI. B.K. BANGAD 12 8,13,000/- DO SHRI BHAGWAN DAS GOYAL 20 1,20,000/- ..DO SHRI PRAMOD GOYAL 3 2,00,000/- DO SHRI DEEPAK MANGAL 3 1,10,000/- DO SHRI MURLIDHAR CHATURVEDI 1 50,000/- DO SHRI VIJAY KUMAR MEHTA 4 2,30,000/- DO SH. OMPRAKASH DHARIWAL 4 3,15,000/- DO SHRI NATHULAL GUPTA 2 4,00,000/- DO SHRI SUNIL GOYAL 1 1,00,000/- DO SHRI SANJAY JAIN 1 50,000/- BROKER NOT ATTENDE D INSPITE OF SUMMONS SERVED ITA 411/AGRA/2009 & CO. 08/AGRA/10 18 SHRI HEM KUMAR JAIN 13 4,75,000/- DO ------------- TOTAL 44,23,000/- -------------- OTHER TRANSACTIONS 7,82,500 THE ASSISTANT COMMIS SIONER OF INCOME TAX HAD NOT OPTED TO ISSUE THE SUMMONS. -------------- TOTAL 52,05,500 ------------- ON GOING THROUGH THE WRITTEN SUBMISSION, ORAL ARGUM ENT, ASSESSMENT ORDER, REMAND REPORT AND STATEMENT OF BROKERS RECORDED BY THE ASSISTANT COMMISSIONER OF INCOME TAX DURING COURSE OF REMAND PROCEEDING, I FI ND THAT THE APPELLANT HAD DISCHARGED THE ONUS AND ACCORDINGLY CASH CREDIT TO THE EXTENT OF RS. 45,30,500/- [RS. 4,80,000/- THROUGH BROKER SHRI LAXMAN DAS BANG AD, RS. 8,13,000/- THROUGH BROKER SHRI B.K. BANGAD, RS. 12,00,000/- THROUGH BR OKER SHRI BHAGWAN DAS GOYAL, RS. 2,00,000/- THROUGH BROKER SHRI PRAMOD GO YAL, RS. 1,10,000/- THROUGH BROKER SHRI DEEPAK MANGAL, RS. 50,000/- THROUGH BRO KER SHRI MURLI CHATURVEDI, RS. 2,30,000/- THROUGH BROKER SHRI VIJAY KUMAR MEHT A, RS. 3,15,000/- THROUGH BROKER SHRI OM PRAKASH DHARIWAL, RS. 4,00,000/- THR OUGH BROKER SHRI NATHULAL GUPTA, RS. 1,00,000/- THROUGH BROKER SHRI SUNIL GOY AL AND RS. 6,32,500/- (RS. 7,82,500/- - RS. 1,50,000/-) DIRECTLY FROM PARTIES, STOOD ESTABLISHED AND THE CASH CREDITS TO THE EXTENT OF RS. 6,75,000/- (RS. 50,000 /- THROUGH BROKER SHRI SANJAY JAIN, RS. 4,75,000/- THROUGH BROKER SHRI HEM KUMAR JAIN AND RS. 1,00,000/- FROM SMT. ALKA KANKANE AND RS. 50,000/- FROM SMT. PUSHPA JAIN) REMAIN UNEXPLAINED BECAUSE THE TRANSACTIONS ROUTED THROUGH TWO BROKERS NAMELY SHRI SANJAY JAIN AND SHRI HEM KUMAR JAIN COULD NOT BE VERIFIED THROUGH B ROKERS AND THE PERMANENT ACCOUNT NUMBER OF SMT. ALKA KANKANE AND SMT. PUSHPA JAIN COULD NOT BE FURNISHED AND THEY HAVE ALSO NOT ATTENDED THE OFFIC E. ACCORDINGLY, THE APPELLANT COULD NOT SUBSTANTIATE THE CASH CREDITS TO THE EXTE NT OF RS. 6,75,000/- WITH PLAUSIBLE SUBMISSION AND EVIDENCES. THE APPELLANT COULD NOT P RODUCE THE TWO BROKERS NAMELY SHRI SANJAY JAIN AND SHRI HEM KUMAR JAIN TO VERIFY THE TRANSACTIONS. THERE ARE OTHER TWO TRANSACTIONS ALSO IN THE NAME O F SHRI ALKA KANKANE AND SMT. PUSHPA JAIN REMAIN UNPROVED BECAUSE THE APPELLANT H AS ACCEPTED THE LOAN BUT NOT FURNISHED EVEN THE PERMANENT ACCOUNT NUMBER OF THE CREDITORS. THE DETAIL OF TRANSACTIONS THROUGH TWO BROKERS NAMELY SHRI SANJAY JAIN AND SHRI HEM KUMAR ITA 411/AGRA/2009 & CO. 08/AGRA/10 19 JAIN AND OTHER TWO TRANSACTIONS IN THE NAME OF SMT. ALKA KANKANE AND SMT. PUSHPA JAIN, IS AS UNDER :- S. NO. S.NO. AS PER LIST NAME OF CREDITOR PAN NO. AMOUNT NAME OF BROKER 1 5 ANURAG LAMBHA APOPL04820G 25,000/- SHRI HEM KUMAR JAIN 2 17 DEEPAKJAIN ABGPJ1694N 50,000/- SHRI HEM KUM AR JAIN 3 22 DIVYA SUKHIJA ASTPS2248H 50,000/- SHRI HEM KUMAR JAIN 4 38 HIRANAND SUKHIJA ADSPS7821G 25,000/- SHRI HEM KUMAR JAIN 5 50 MANISH PARAKH AABGP8657H 30,000/- SHRI HEM KUMAR JAIN 6 95 SMT.CHANDRA AGARWAL AEDPA0869A 60,000/- SH RI HEM KUMAR JAIN 7 98 SMT. GEETA GOYAL N.A. 30,000/- SHRI HEM KU MAR JAIN 8 1I5 SMT. MEENA AGARWAL ABVPAI025E 25,000/- SH RI HEM KUMAR JAIN 9 1I8 SMT.NIRMALA AGARWAL N.A. 25,000/- SHRI HE M KUMAR JAIN 10. 123 SMT. PUSHPA BAI AEDPA0870R 25,000/- SHR I HEM KUMAR JAIN 11. 162 SMT. MOHINI DEVI AGARWAL ADCPA5263E 50,000/- SHRI HEM KUMAR JAIN 12 167 SMT. VARSHA LUNIYA NA 30,000/- SHRI HEM KUMA R JAIN 13. 168 SURENDRA KUMAR DEVENDRA KUMAR LUTHA NA 50,000/- SHRI HEM KUMAR JAIN 14. 106 SMT. KNT GOGIYA FXPG6242A 50,000/- SHRI SAN JAY JAIN 15. 184 SMT. ALKA KANKANE NA 1,00000/- - 16. 187 SMT. PUSHPA JAIN NA 50,000/- - TOTAL 6,75,000/- THAT, AFTER GOING THROUGH THE WRITTEN SUBMISSION, O RAL SUBMISSION, ASSESSMENT ORDER, REMAND REPORT SUBMITTED BY THE ASSISTANT COM MISSIONER OF INCOME TAX, STATEMENTS OF BROKERS RECORDED AND VARIOUS DOCUMENT S SUBMITTED BY THE BROKERS DURING PROCEEDING OF REMAND REPORT BY THE ASSISTANT COMMISSIONER OF INCOME TAX, I FIND THAT THE LD. A.R. OF THE APPELLANT HAS FURNI SHED THE RELEVANT DETAILS AND COULD SUBSTANTIATE THE TRANSACTIONS OF UNSECURED LOAN TO THE EXTENT OF RS. 45,30,500/- MENTIONED ABOVE. THE REMAINING TRANSACTIONS OF RS. 6,75,000/- COULD NOT BE SUBSTANTIATED. THE APPELLANT HAS NOT PRODUCED THE T WO BROKERS FOR VERIFICATION AS WELL AS HAS NOT SUBMITTED THE PAN OF THE CREDITORS SMT. ALKA KANKANE AND SMT. PUSHPA JAIN. ALTHOUGH THE ASSISTANT COMMISSIONER OF INCOME TAX HAS NOT OPTED TO ISSUE THE SUMMONS IN THOSE TWO CASES SMT. ALKA KANK ANE AND SMT. PUSHPA JAIN. IN VIEW OF ALL THESE, THE CASH CREDITS TO THE EXTENT O F RS. 45,30,500/- STOOD EXPLAINED AND ESTABLISHED LEAVING CASH CREDIT OF RS. 6,75,000 /- AS UNEXPLAINED. ACCORDINGLY, ADDITION TO THE EXTENT OF RS. 6,75,000/- IS HEREBY CONFIRMED. ITA 411/AGRA/2009 & CO. 08/AGRA/10 20 15. THE LD. DR RELIED UPON THE ORDER OF THE AO AND SUBMITTED THAT THE TRANSACTIONS OF CASH CREDIT WERE CARRIED THROUGH BR OKERS. THEREFORE, THE CREDITORS HAVE NOT PROVED THEIR IDENTITY, THEIR CREDITWORTHIN ESS AND GENUINENESS OF THE TRANSACTIONS AND TWO OF THE BROKERS ALSO DID NOT AP PEAR BEFORE THE AO. THEREFORE, THE LD. CIT(A) SHOULD NOT HAVE DELETED THE ADDITION . 16. ON THE OTHER HAND, THE LD. COUNSEL FOR THE ASSE SSEE REITERATED THE SUBMISSIONS MADE BEFORE THE LD. CIT(A) AND SUBMITTED THAT THE L D. CIT(A) DELETED THE ADDITION IN RESPECT OF THE BROKERS WHO HAVE ATTENDED THE PRO CEEDINGS BEFORE THE AO AND CONFIRMED GIVING OF LOAN TO THE ASSESSEE. THE CREDI TORS WERE 194 IN NUMBER. THE DETAILS OF THE SAME ARE FILED IN PAPER BOOK AT PAGE S 1 TO 11 SUPPORTED BY ALL THE DOCUMENTS, I.E., CONFIRMATION, DISCHARGED PROMISSOR Y NOTES AND COPY OF THE ACCOUNT. THE CREDITORS ARE MOSTLY ASSESSED TO TAX A ND THE BROKERS HAVE CONFIRMED GIVING OF LOANS TO THE ASSESSEE. HE HAS SUBMITTED T HAT SINCE LOANS WERE ARRANGED THROUGH BROKERS WHO HAVE CONFIRMED THE LOANS TO THE ASSESSEE AND PROVED THE IDENTITY OF THE CREDITORS, THEIR SOURCE OF INCOME W OULD PROVE THAT THE TRANSACTIONS WITH THE ASSESSEE WERE GENUINE. THEREFORE, THE LD. CIT(A) CORRECTLY DELETED THE ADDITION OF RS.45,30,500/-. THE LD. COUNSEL FOR THE ASSESSEE VERY CLEARLY STATED THAT SINCE THE ASSESSEE COULD NOT SUBSTANTIATE THE CREDI TS TO THE EXTENT OF RS.6,75,000/- ITA 411/AGRA/2009 & CO. 08/AGRA/10 21 BECAUSE OF NON-PRODUCTION OF BROKERS. THEREFORE, TH E MATTER COULD BE DECIDED ON THE BASIS OF THE MATERIAL ON RECORD. 17. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND TH E MATERIAL ON RECORD AND DO NOT FIND ANY JUSTIFICATION TO INTERFERE WITH THE OR DER OF THE LD. CIT(A) IN DELETING THE SUBSTANTIAL ADDITION AND IN CONFIRMING THE PART ADDITION. IT IS NOT IN DISPUTE THAT MOST OF THE LOANS WERE ARRANGED TO THE ASSESSEE THR OUGH THE BROKERS. THE ASSESSEE HAS FILED COPIES OF DISCHARGED PROMISSORY NOTES, CO PY OF ACCOUNT AND THE CONFIRMATION OF ALL THE CREDITORS. TEN BROKERS OUT OF TWELVE ALSO ATTENDED THE PROCEEDINGS BEFORE THE AO AND HAVE CONFIRMED THE AR RANGING AND GIVING LOANS TO THE ASSESSEE. THE EVIDENCES AND MATERIAL ON RECORD WERE, THEREFORE, SUFFICIENT TO PROVE THAT THE ASSESSEE HAS GENUINELY TAKEN THE LOA NS THROUGH BROKERS. THE ASSESSEE HAS THUS BEEN ABLE TO PROVE THAT THE GENUINE CREDIT S HAVE BEEN OBTAINED IN A SUM OF RS.45,30,500/-. THE LD. CIT(A) WAS, THEREFORE, JUST IFIED IN DELETING THE ADDITION TO THAT EXTENT AND INTEREST PAID THEREON. THE DEPARTME NTAL APPEAL IS, THEREFORE, LIABLE TO BE DISMISSED BECAUSE THE REVENUE DEPARTMENT IS N OT ABLE TO POINT OUT ANY INFIRMITY IN THE ORDER OF THE LD. CIT(A). AS FAR AS THE ADDITION OF RS.6,75,000/- IS CONCERNED, THE LD. COUNSEL FOR THE ASSESSEE CLEARLY STATED THAT THE ASSESSEE HAS NOT BEEN ABLE TO SUBSTANTIATE THOSE CREDITS BECAUSE OF NON-PRODUCTION OF BROKERS. CROSS OBJECTION IS, THEREFORE, LIABLE TO BE DISMISSED. IN VIEW OF THE ABOVE DISCUSSION, WE ITA 411/AGRA/2009 & CO. 08/AGRA/10 22 DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD. C IT(A) IN SUSTAINING PART ADDITION OF RS.6,75,000/-. THE CROSS OBJECTION OF THE ASSESS EE IS, THEREFORE, LIABLE TO BE DISMISSED. IN THIS VIEW OF THE MATTER, WE DO NOT FI ND ANY JUSTIFICATION TO INTERFERE WITH THE ORDER OF THE LD. CIT(A). 18. IN THE RESULT, THE DEPARTMENTAL APPEAL AND CROS S OBJECTION OF THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (PRAMOD KUMAR) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER *AKS/- COPY OF THE ORDER FORWARDED TO : 1. APPELLANT 2. RESPONDENT 3. CIT(A), CONCERNED BY ORDER 4. CIT, CONCERNED 5. DR, ITAT, AGRA 6. GUARD FILE SR. PRIVATE SECRETARY TRUE COPY