Assistant Commissioner of Income-tax 2(1), RAIPUR (CG) V. M/s Sunder Nagar Filling Station, RAIPUR (CG)

ITA 117/BIL/2012

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 2252 (ITAT-RAIPUR)
• Duration Of Justice: 3 year(s) 2 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-10-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2005-2006
• Appeal Filed On: 09-08-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJIV VERSHNEY
• Assessee Lawyers: R B DOSHI
• Keywords: Unexplained cash credit; Search and seizure; Additional evidence
• Section: 143(3); 68

Judgement Text

1 ITA NOS. 117 TO 121/BLPR/2012 IN THE INCOME TAX APPELLATE TRIBUNAL, RAIPUR BENCH, RAIPUR BEFORE SHRI MUKUL K. SHRAWAT, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER. S.NO. I.T.A. NO. ASSTT. YEAR. 1. 1 17 /BLPR/2012 200 5 - 06 2. 1 18 /BLPR/2012 200 6 - 07 3. 1 19 /BLPR/2012 200 7 - 08 4. 1 20 /BLPR/2012 200 8 - 09 5. 1 2 1 /BLPR/2012 200 9 - 10 ASSTT. COMMISSIONER OF M/S SUNDER NAGAR FILLING STATION, INCOME TAX - 2(1), RA IPUR. VS. RAIPUR. PAN AA YFS 5808A. APPELLANT RESPONDENT. APPELLANT BY : SHRI RAJIV VERSHNEY RESPONDENT BY : SHRI R.B. DOSHI. DATE OF HEARING : 15 - 10 - 2015. DATE OF PRONOUNCEMENT : 30 TH OCT., 2015. O R D E R PER SHRI SHAMIN YAHYA, A.M . THESE APPEALS BY THE REVENUE ARE DIRECTED AGAINST THE COMMON ORDER OF LEARNED CIT(APPEALS), RAIPUR FOR THE CONCERNED ASSESSMENT YEARS. 2. THE ISSUE RAISED IN ITA NO. 117/BLPR/2012 FOR ASSESS MENT YEAR 2005 - 06 IS THAT THE LEARNED CIT(APPEALS) ERRED IN DELETING THE ADDITION OF RS.15 LAKHS U/S 68 OF I.T. ACT. ANOTHER COMMON ISSUE RAISED IN THESE APPEALS IS THAT THE LEARNED CIT(APPEALS) ERRED IN DISALLOWING INTEREST OF RS.14,796 (A.Y 2005 - 06), R S.1,62,236/ - (A.Y. 2006 - 07), RS.2,71,236/ - (A.Y. 2007 - 08), RS.2,25,882/ - 2 ITA NOS. 117 TO 121/BLPR/2012 (A.Y. 2008 - 09), RS.2,34,133/ - (A.Y. 2009 - 10) ON ACCOUNT OF INTEREST ON THESE UNSECURED LOANS ADDED BY AO U/S 68. 3. IN THIS CASE SEARCH AND SEIZURE ACTION U/S 143(2) WAS CONDUCTED O N 04 - 10 - 2010 AND CONSEQUENTLY ASSESSMENTS FOR ALL THESE YEARS WERE COMPLETED U/S 143(3) READ WITH SECTION 153A. THE AO MADE AN ADDITION OF RS.15 LAKH S AS UNEXPLAINED CASH CREDIT IN THE ASSESSMENT YEAR 2005 - 06 AND ALSO DISALLOWED THE INTEREST PAID ON THE SAID LOAN IN THIS YEAR AND IN ALL SUBSEQUENT ASSESSMENT YEARS UPTO 2010 - 11 IN CONNECTION WITH LOAN OF RS.5 LAKHS TAKEN FROM THREE PARTIES ON THE GROUND THAT THE LOAN CONFIRMATIONS WERE UNSIGNED. HENCE THE AO HELD THAT THE CONFIRMATIONS FILED BY THE ASSESSEE ARE INCOMPLETE AND IT HAS NO RATIFICATION FROM LENDING PARTY. HENCE THE AO TREATED THE SAME AS CASH CREDIT. THE AO FURTHER HELD THAT THE ASSESSEE HAD ALSO PAID INTEREST ON THESE LOANS. THAT SINCE THE GENUINENESS OF THE LOAN IS NOT PROVED, THE INTEREST WAS ALSO DISALLOWED. 3. BEFORE THE LEARNED CIT(APPEALS) THE ASSESSEE SUBMITTED THAT THESE PARTIES WERE NOT COOPERATING AT THE TIME OF ASSESSMENT. HOWEVER , NOW THE ASSESSEE SUBMITTED THE LOAN CONFIRMATIONS AND COPIES OF I.T. RETURNS OF THESE PARTIES. THESE ADDITIONAL EVIDENCES WERE REMANDED TO THE AO. THE AO CONTENDED THAT THE ASSESSEE HAD BEEN GIVEN ADEQUATE OPPORTUNITIES AND HE OBJECTED TO THE ADMISSION OF ADDITIONAL EVIDENCES. CONSIDERING THE ABOVE THE LEARNED CIT(APPEALS) HELD THAT NON SUPPLY OF REQUISITE INFORMATION BY OUTSIDE PARTIES WAS SUFFICIENT CAUSE FOR NOT FURNISHING SUCH EVIDENCES DURING ASSESSMENT AND LEARNED CIT(APPEALS) HELD THAT THESE WERE ADMITTED IN THE INTEREST OF JUSTICE. LEARNED CIT(APPEALS) HELD THAT THESE EVIDENCES ESTABLISH ED THE IDENTITY AND CREDITWORTHINESS OF THE CREDITORS AND GENUINENESS OF THE TRANSACTIONS. THE AO DID NOT CONDUCT ANY ENQUIR Y TO ESTABLISH OTHERWISE. HE HELD TH AT CREDITORS ARE ASSESSED TO INCOME - TAX AT THE SAME PLACE. HENCE THE AO COULD HAVE EASILY INVOKED SUCH ENQUIRY. HE HELD THAT THE AO COULD HAVE ISSUED SUMMONS OR EVEN DEPUTED THE INSPECTOR. HENCE LEARNED CIT(APPEALS) HELD THAT IN CONSIDERING 3 ITA NOS. 117 TO 121/BLPR/2012 THESE CIRCUMST ANCES AND THAT THESE PERSONS ARE REGULARLY ASSESSED TO TAX, SUCH TRANSACTIONS ARE NOT DISPUTED IN THE RESPECTIVE CASES. THE ADDITIONS MADE BY THE AO WERE DELETED. 4. AGAINST THE ABOVE ORDER, REVENUE IS IN APPEAL BEFORE US. 5. LEARNED D.R. CONTENDED THAT LE ARNED CIT(APPEALS) HAS ADMITTED ADDITIONAL EVIDENCES BUT HE HAS NOT GIVEN THE AO AN OPPORTUNITY TO EXAMINE THE VERACITY OF THE SAME. HE ALSO CONTENDED THAT THOUGH THE AO HAS INITIALLY OBJECTED TO THE ADMISSION OF THOSE EVIDENCES BUT ONCE THE CIT(APPEALS ) ADMITS THE SAME, HE SHOULD HAVE AGAIN GIVEN THE AO AN OPPORTUNITY TO EXAMINE THE SAME. HENCE THE LEARNED D.R. SUBMITTED THAT THE MATTER MAY BE REMITTED TO THE FILE OF THE AO. 6. PER CONTRA LEARNED COUNSEL OF THE ASSESSEE CLAIMED THAT THE ASSESSEE HAS SUB MITTED THE REQUISITE DOCUMENTS AND THOUGH THE SAME WERE REMANDED TO THE AO, THE AO HAS CHOSEN NOT TO COMMENT ON THAT. HENCE LEARNED COUNSEL OF THE ASSESSEE SUBMITTED THAT THE ASSESSEE SHOULD NOT BE SUBJECTED TO REMAND PROCEEDINGS ALL THE TIMES WITHOUT ANY REASON. HENCE HE SUBMITTED THAT THE ORDERS OF LEARNED CIT(APPEALS) BE UPHELD. 7. UPON CAREFUL CONSIDERATION IN THIS CASE WE FIND THAT THE AO HAS PICKED UP THREE AMOUNTS OF LOAN OF RS. 5 LAKHS EACH FROM THE BALANCE SHEET OF THE ASSESSEE. THE AO HAD ASKED T HE ASSESSEE TO GIVE NAMES AND COMPLETE POSTAL ADDRESS OF THE LENDERS, THEIR PAN AND AMOUNT OF LOAN ADVANCED BY THEM. IT IS NOT THE CASE OF THE AO THAT THIS INFORMATION WAS NOT PROVIDED. THE AO ALSO ASKED TO PRODUCE THE LOAN CONFIR MATION. HOWEVER, SINCE TH E LOAN CONFIRMATIONS WERE UNSIGNED, HE PROCEEDED TO MAKE THE ADDITION. HERE WE FIND THAT THE AO HAD THE NAMES, ADDRESS AND PAN NOS. OF THE LENDERS. HE CHOSE NOT TO MAKE ANY ENQUIRY. HE HELD THE LOANS UNEXPLAINED ONLY ON THE GROUND THAT CONFIRMATION LETTERS WERE UNSIGNED. LATER ON WHEN CONFIRMATIONS WERE FURNISHED BEFORE THE LEARNED 4 ITA NOS. 117 TO 121/BLPR/2012 CIT(APPEALS) THE SAME WERE REMANDED TO THE AO. INSTEAD OF COMMENTING ON THE VERACITY OF THE ADDITIONAL EVIDENCES THE AO CHOSE TO OBJECT ON THE SAME. IN THESE CIR C UMSTANCES, IN OU R CONSIDERED OPINION, LEARNED CIT(APPEALS) IS CORRECT IN HOLDING THAT THE AO HAS MADE THE ADDITION ON TECHNICAL MANNER. THE AO HAD ALL THE INFORMATIONS AND HE CHOSE NOT TO MAKE ANY ENQUIRY THOUGH THE SAID CREDITORS WERE ASSESSED AT THE SAME PLACE. UNDER THESE CIRCUMSTANCES WHEN ALL THE NECESSARY DETAILS ARE AVAILABLE AND THE PARTIES ARE INCOME - TAX ASSESSES, THEY HAVE ALSO SUBMITTED THEIR STATEMENTS OF ACCOUNT AND SUBMITTED THE REQUISITE CONFIRMATIONS, IN OUR CONSIDERED OPINION, THERE IS NO INFIRMITY IN THE ORDER OF LEARNED CIT(APPEALS). ACCORDINGLY WE UPHOLD THE SAME. 8. IN THE RESULT, THESE APPEALS FILED BY THE REVENUE STAND DISMISSED. O RDER PRONOUNCED IN THE OPEN COURT ON THIS 30 TH DAY OF OCT., 2015. SD/ - SD/ - (MUKUL K. SHRAWAT) ( SHAMIM YAHYA) JUDICIAL MEMBER ACCOUNTANT MEMBER. DATED: 30 TH OCT., 2015. COPY FORWARDED TO : 1. M/S SUNDER NAGAR FILLING STATION, MAHAQDEV GHAT ROAD, SUNDER NAGAR, RAIPUR. 2. A.C.I.T. - 2(1 ), RAIPUR. 3. C.I.T., RAIPUR. 4. CIT(APPEALS), RAIPUR. 5. D.R., ITAT, RAIPUR. 6. GUARD FILE TRUE COPY. BY ORDER WAKODE ASSISTANT REGISTRAR, ITAT, NAGPUR