The ITO, Ward-1(1), Surat V. M/s. Apex Therm Packaging Pvt.Ltd., Surat

ITA 1151/AHD/2010

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 2063 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-05-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 23-04-2013
• Assessment Year: 2007-2008
• Appeal Filed On: 15-04-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAHUL KUMAR
• Assessee Lawyers: RAMESH KUMAR MAL
• Keywords: Unexplained cash credit
• Section: 143(3); 133(6)

Judgement Text

ITA NO 1151/ A/2010 . A.Y. 2007- 08 1 IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD (BEFORE SHRI G.C.GUPTA VICE PRESIDENT & SHRI ANIL C HATURVEDI, A.M.) I.T. A. NO. 1151 /AHD/2010 (ASSESSMENT YEAR: 2007-08 INCOME-TAX OFICER WARD 1(1), ROOM NO. 113, AAYAKAR BHAVAN, MAJURA GATE SURAT. (APPELLANT) VS. M/S APEX THERM PACKAGING PVT. LTD., 5006, TRADE HOUSE, RING ROAD, SURAT (RESPONDENT) PAN: AAECA 0982 C APPELLANT BY : SHRI RAHUL KUMAR SR. D.R. RESPONDENT BY : SHRI RAMESH KUMAR MALPANI. A. R ( )/ ORDER DATE OF HEARING : 23-04-20 13 DATE OF PRONOUNCEMENT : 10 -05-2013 PER SHRI ANIL CHATURVEDI,A.M. THIS APPEAL IS FILED BY THE REVENUE AGAINST THE OR DER OF CIT(A)-1, SURAT DATED 10.2.2010 FOR ASSESSMENT YEAR 2007-08. 1. THE FACTS AS CULLED OUT FROM THE ORDERS OF THE L OWER AUTHORITIES ARE AS UNDER. 2. ASSESSEE IS A COMPANY ENGAGED TO THE ACTIVITY OF FINANCING. IT. ELECTRONICALLY FILED ITS RETURN OF INCOME FOR ASSES SMENT YEAR 2007- 08 ON 30.10.2007 DECLARING THE TOTAL INCOME OF RS. NIL. THE CASE ITA NO 1151/ A/2010 . A.Y. 2007- 08 2 WAS SELECTED FOR SCRUTINY AND THEREAFTER THE ASSESS MENT WAS FRAMED UNDER SECTION 143(3) OF THE ACT VIDE ORDER D ATED 15.12.2009 AND THE TOTAL INCOME WAS DETERMINED AT R S. 36,40,470/-. AGGRIEVED BY THE ORDER OF ASSESSING O FFICER, ASSESSEE CARRIED THE MATTER BEFORE CIT(A). CIT(A) V IDE ORDER DATED 10.02.2010 GRANTED GAVE PARTIAL RELIEF TO THE ASSESSEE. AGGRIEVED BY THE AFORESAID ORDER OF CIT(A), THE REV ENUE IS NOW IN APPEAL BEFORE US AND HAS RAISED THE FOLLOWING EFFEC TIVE GROUND:- [1] ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A)-1, SURAT HAS ERRED IN DELETING THE ADDITION MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED CASH CREDIT OF RS. 33,35,011/- U/S 68 AND INTEREST OF RS . 3,10,478/- ON THE SO CALLED CASH CREDIT, MADE BY TH E ASSESSING OFFICER. 5. DURING THE COURSE OF ASSESSMENT PROCEEDINGS ON P ERUSING THE RETURN OF INCOME, ASSESSING OFFICER NOTICED THAT ASSESSEE HAS RECEIVED NEW UNSECURED LOAN AGGREGATING TO RS. 33,35,011/- FROM VARIOUS PARTIES LISTED ON PAGE 2 OF THE ORDER. THE ASSESSEE WAS ASK ED TO FURNISH CONFIRMATION LETTER, COPY OF ACKNOWLEDGEMENT OF LEN DERS, THEIR BALANCE SHEET AND THE BANKS STATEMENT. IN RESPONSE THE ASSESSEE SUBMITTED CONFIRMATION LETTER, DETAILS OF ASSESSMEN T AND BALANCE SHEET OF MOST OF THE LENDERS EXCEPT IN CASE OF BHAN WAR LAL PRAJAPAT AND SHRI CHINGALAL PRAJAPAT. SINCE THE COPY OF THE BANK STATEMENT OF THE LENDERS WERE NOT FURNISHED, NOTICE UNDER SECTIO N 133(6) WAS ISSUED TO THE LENDERS WHICH REMAINED UNRESPONDED. A SSESSING OFFICER THUS CONCLUDED THAT THE ASSESSEE HAS FAILED TO DISCHARGE THE ONUS OF PROVING THE GENUINENESS OF TRANSACTION IDEN TITY OF THE LENDERS ITA NO 1151/ A/2010 . A.Y. 2007- 08 3 AND CAPACITY OF THE LENDERS. HE FURTHER NOTICED THA T UNEXPLAINED UNSECURED LOAN FEATURED IN THE CASE OF ASSESSEE A S ALSO ITS GROUP COMPANIES IN EARLIER YEARS WHERE IT WAS FOUND WITH THE ALLEGED LENDERS DID NOT HAVE THE CAPACITY OF ADVANCING UNSE CURED LOAN TO THE ASSESSEE. HE ALSO NOTICED THAT DURING THE COURSE O F ASSESSMENT PROCEEDINGS FOR ASSESSMENT YEAR 2006-07, STATEMENT OF SEVERAL DEPOSITORS WERE RECORDED WHEREIN SOME OF THEM DENIE D GIVING ANY LOAN AND THE OTHERS WERE FOUND TO BE INCAPABLE OF A DVANCING LOAN. THUS THE ASSESSING OFFICER MADE ADDITION UNDER SECT ION 68 OF RS. 33,35,011/-. 7. AGGRIEVED BY THE ORDER OF ASSESSING OFFICER, ASS ESSEE CARRIED THE MATTER BEFORE CIT(A). BEFORE CIT(A) IT WAS INTERALI A SUBMITTED THAT THE ASSESSEE HAD SUBMITTED THE ACCOUNT CONFIRMATIONS M ENTIONING THE NAME, COMPLETE ADDRESS AND PAN NUMBER OF THE LENDER S WITH DETAILS OF TRANSACTION COPIES OF THE IT RETURN ACKNOWLEDGEM ENT, EXCEPT FOR TWO PARTIES, COPIES OF THE BALANCE SHEET AND THUS T HE ASSESSEE HAD DISCHARGED THE ONUS CAST UPON IT TO PROVE THE IDENT ITY OF THE LENDERS, GENUINENESS OF THE TRANSACTION AND CREDITWORTHINESS OF THE LENDERS. IT WAS FURTHER SUBMITTED THAT THE NOTICES UNDER SECTIO N 133 6) ISSUED TO THE LENDERS WERE SERVED UPON THE LENDERS. THERE WAS NO MENTION OF NOTICES BEING UNSERVED. CIT(A) AFTER CONSIDERING T HE SUBMISSIONS OF THE ASSESSEE DELETED THE ADDITION BY HOLDING AS U NDER :- 4.5 IN THE PRESENT CASE AS ADMITTED BY THE A.O. T HAT THE ASSESSEE HAS FILED CONFIRMATIONS WITH NAME, ADDRESS AND PAN, COPY OF LEDGER ACCOUNT IN RESPECT OF ALL THE CREDITORS, COPY OF BA LANCE SHEET AND PROFIT & LOSS ACCOUNT AND COPY OF INCOME-TAX RETURN S AND ITA NO 1151/ A/2010 . A.Y. 2007- 08 4 COMPUTATION OF TOTAL INCOME IN RESPECT OF ALL EXCEPT TWO CREDITORS AND HENCE THE ONUS HAS SHIFTED ON THE A.O. WITH RESPECT TO THE TWO CREDITORS, WHOSE BALANCE SHEET AND INCOME-TAX RETUR NS WERE NOT FILED DURING THE ASSESSMENT PROCEEDINGS, THE APPELL ANT HAS STATED THAT IT HAD STILL FULFILLED THE ONUS OF PROVING THE IDENTITY OF THE CREDITORS, GENUINENESS OF TRANSACTION AND CREDITWORTHINESS IN TERMS OF THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE O F ORISSA CORPORATION LTD. (SUPRA) BY FILING CONFIRMATION WIT H NAME, ADDRESS AND PAN. THIS SHOWS THAT BOTH OF THESE TWO CREDITOR S WERE ALSO INCOME-TAX ASSESSEES WHICH THE A.O. COULD HAVE EASI LY VERIFIED. THE APPELLANT HAS STATED THAT THE BALANCE SHEETS WERE N OT AVAILABLE EARLIER BUT THEY COULD PROCURE THE SAME_NOW AND HAV E FILED THEM DURING THE APPELLATE PROCEEDING. IN THIS CASE, ALL THE LENDERS WERE INCOME TAX ASSESSEE'S AND FILING THEIR RETURNS OF I NCOME, WHICH PROVES THE IDENTITY OF THE LENDERS. ALL THE LOANS W ERE RECEIVED THROUGH CHEQUES. THE ACCOUNT CONFIRMATIONS WHICH WERE DULY SIGNED BY THE LENDERS REFLECTING TRANSACTIONS, NAME, COMPLETE ADDRESS AND PAN OF LENDER PROVES THE GENUINENESS OF THE TRANSACTIONS. THE LOAN AMOUNTS WERE DULY REFLECTED IN THE BALANCE SHEETS O F LENDERS. FROM THE BALANCE SHEETS, THE CREDIT WORTHINESS OF L ENDERS IS PROVED BEYOND ANY DOUBT. THE LENDERS ARE HAVING SUF FICIENT CAPITAL/ SOURCES FOR ADVANCING THESE LOANS TO THE A PPELLANT. THE AO HAS SIMPLY STATED THAT THE ASSESSEE HA S NOT FILED THE BANK STATEMENT AND HAS NOT PRODUCED THE CREDITORS. THE A.O. HAS FURTHER STATED THAT THE NOTICES ISSUED TO THE CREDI TORS HAVE NOT BEEN REPLIED BY THE CREDITORS. AS STATED ABOVE, BY FIL ING THE ABOVE MENTIONED DOCUMENTS THE APPELLANT HAS FULFILLED I TS ONUS IN TERMS OF ITA NO 1151/ A/2010 . A.Y. 2007- 08 5 THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF ORISSA CORPORATION LTD. (SUPRA) AND IN TERMS OF THE DECISI ON OF THE HON'BLE GUJARAT HIGH COURT IN THE CASE OF ROHINI BUILDERS ( SUPRA). IF THE ASSESSEE HAS GIVEN THE ABOVE MENTIONED DOCUMENTS TH EN IT IS THE ONUS OF THE A.O. TO VERIFY THE FACTS. AS STATED B Y THE HON'BLE SUPREME COURT MERELY ISSUING NOTICES TO THE CREDITO RS AND THEN NOT PURSUING THE SAME CANNOT BE HELD AGAINST THE ASSESS EE. FURTHER, AS STATED BY THE HON'BLE GUJARAT HIGH COURT IN THE ABO VE MENTIONED CASE THE ASSESSEE IS NOT REQUIRED TO PROVE HOW THE MONEY WAS DEPOSITED IN THE BANKS OF THE CREDITORS AND, THEREF ORE, IT IS NOT FOR THE ASSESSEE TO GIVE THE BANK STATEMENT BUT FOR THE A.O , TO OBTAIN THEM EITHER FROM THE BANK OR FROM THE CREDITORS IF HE CO NSIDERS IT TO BE NECESSARY. ONCE THE ONUS IS FULFILLED BY THE ASSES SEE IT IS FOR THE A.O. TO EXAMINE AND BRING ANY MATERIAL ON RECORD WH ICH MAY HELP IN REBUTTING THE ONUS OF THE ASSESSEE. SINCE THE A.O . HAS NO MATERIAL ON RECORD, THE ADDITION MADE IN THIS CASE IS, THERE FORE, DELETED IN VIEW OF THE DECISION OF THE HON'BLE GUJARAT HIGH COURT I N THE CASE OF ROHINI BUILDERS (SUPRA) AND IN VIEW OF THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF ORISSA CORPORATION LTD. (SUPRA). SINCE THE CREDITORS HAVE BEEN HELD TO BE GENUINE, THE INTEREST DISALLOWED IS ALSO DELETED. HENCE THESE GROUNDS OF APPEAL A RE ALLOWED . 9. AGGRIEVED BY THE ORDER OF CIT(A), THE REVENUE IS NOW IN APPEAL BEFORE US. 10. BEFORE US, THE LEARNED D.R. RELIED ON THE ORDER OF ASSESSING OFFICER AND ALSO THE DECISION OF DELHI HIGH COURT I N THE CASE OF ITA NO 1151/ A/2010 . A.Y. 2007- 08 6 N.R. PORTFOLIO PVT. LTD. (ITA NO 134/2012 ORDER DAT ED 21.12.2012) THE LEARNED A.R, ON THE OTHER HAND REITERATED THE SUBMISSIONS MADE BEFORE CIT(A) AND THUS SUPPORTED THE ORDER OF CIT(A). 11. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. IT IS AN UNDISPUTED FACT THAT DURING THE Y EAR THE ASSESSEE HAD RECEIVED LOAN FROM 17 PARTIES AGGREGATING TO 33 ,35,011/-. THE DETAILS OF WHICH ARE LISTED AT PAGE 2 OF ASSESSING OFFICER ORDER. CIT(A) WHILE DELETING THE ADDITION HAS GIVEN A FIND ING THAT THE ASSESSEE HAD FILED BEFORE ASSESSING OFFICER THE CON FIRMATIONS WITH NAME, ADDRESS, PAN NUMBER, COPY OF LEDGER ACCOUNT, COPY OF BALANCE SHEET AND PROFIT AND LOSS, ACCOUNT COPY OF INCOME-TAX RETURNS AND COMPUTATION OF TOTAL INCOME IN RESPECT OF ALL THE PARTIES EXCEPT TWO DEPOSITORS. WITH RESPECT TO THE TWO DEPO SITORS, THE ASSESSEE HAD FILED CONFIRMATION, ADDRESS AND PAN NU MBERS AND HENCE THE ASSESSEE HAD ALSO DISCHARGED THE INITIAL ONUS CAST UPON THE ASSESSEE WITH RESPECT TO THE TWO CREDITORS . HE HAS FURTHER NOTED THAT THE LOANS WERE RECEIVED THROUGH CHEQUES AND THE LOAN ACCOUNT WERE DULY REFLECTED IN THE BALANCE SHEET OF LENDERS CIT(A) HAS FURTHER HELD ONCE THE ONUS WAS F ULFILLED BY THE ASSESSEE, IT WAS FOR THE ASSESSING OFFICER TO EXAMI NE AND BRING ANY MATERIAL ON RECORD WHICH MAY HELP IN REBUTTING THE ONUS OF ASSESSEE. THE ASSESSING OFFICER HAS NOT BROUGHT AN Y MATERIAL ON RECORD IN ITS SUPPORT CIT(A) WHILE DELETING THE ADD ITION HAS ALSO RELIED ON THE DECISION OF HON. GUJARAT HIGH COURT, IN THE CASE OF ROHINI BUILDERS 256 ITR 360 AND THE DECISION OF HON . SUPREME COURT, IN THE CASE OF ORISSA CORPORATION LIMITED 153 ITR 78. ITA NO 1151/ A/2010 . A.Y. 2007- 08 7 BEFORE US, NOTHING HAS BEEN BROUGHT ON RECORD BY TH E REVENUE TO CONTROVERT THE FINDINGS OF CIT(A). REVENUE HAS REL IED ON THE DECISION OF HON. DELHI HIGH COURT IN THE CASE OF N. R. PORTFOLIO (SUPRA). WE HOWEVER FIND THAT THE RATIO OF THE AFO RESAID DELHI HIGH COURT DECISION ARE DISTINGUISHABLE ON FACTS AND THE REFORE CANNOT BE APPLIED TO THE FACTS OF THE PRESENT CASE. IN VIE W OF THE AFORESAID FACTS, WE FIND NO REASON TO INTERFERE WITH THE ORDE R OF CIT(A) AND THUS DISMISS THIS GROUND OF REVENUE. 12. THUS THE APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 10 - 05 - 2013. SD/- SD/- (G.C.GUPTA) (ANIL CHATURVEDI) VICE PRESIDENT ACCOUNTANT MEMBER AHMEDABAD. TRUE COPY RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AHMEDA BAD