KAMDHENU CEMENT LTD., Jaipur V. DCIT, Alwar

ITA 117/JPR/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 99437 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 8 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-10-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 17-02-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SUNIL MATHUR CIT DHK
• Assessee Lawyers: S L PODDAR
• Keywords: Bogus purchase; Unexplained expenditure; Loose papers; Onus to prove
• Section: 69C; 143(3); 133A; 132

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR JH VH-VKJ-EHUK] YS[KK LNL; ,OA JH YFYR DQEKJ] U;KF; D LNL; DS LE{K BEFORE: SHRI T.R.MEENA, AM & SHRI LALIET KUMAR, JM VK;DJ VIHY LA -@ ITA NO. 117/JP/2014 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR : 2009-10. M/S KAMDHENU CEMENT LTD., 5/2, PUNJABI BAGH EXTEN. CLUB ROAD, DELHI- 110015 CUKE VS. DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE, ALWAR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO. AADCK 0766 F VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI S.L. PODDAR (ADV.) JKTLO DH VKSJ LS@ REVENUE BY : SHRI SUNIL MATHUR (CIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 08/10/2015. MN?KKS'K .KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 30/10/2015. VKNS'K@ ORDER PER T.R. MEENA, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER DATED 21/01/2014 OF THE LEARNED C.I.T.(A), ALWAR FOR A.Y. 2 009-10. THE EFFECTIVE GROUNDS OF APPEAL ARE AS UNDER:- 1. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE T HE ASSESSING OFFICER HAS ERRED IN FRAMING THE ASSESSME NT ORDER U/S 143(3)/153A OF INCOME TAX ACT, 1961 WHICH I S VOID AB-INITIO AND BAD IN LAW DESERVES TO BE QUASHED . 2 ITA NO. 117/JP/2014 M/S KAMDHENU CEMENT LTD. VS. DCIT 2. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE TH E LD CIT(A) HAS ERRED IN CONFIRMING THE ADDITION OF RS.2,17,500/- ON ACCOUNT OF UNDISCLOSED INCOME FOR CASH RECEIVED FROM M/S VIZAN ADS & FILS PVT. LTD. 2. GROUND NO. 1 OF THE APPEAL IS AGAINST FRAMING TH E ASSESSMENT U/S 143(3)/153A OF THE INCOME TAX ACT, 1961 (IN SHORT TH E ACT), WHICH HAS NOT BEEN PRESSED, THEREFORE, WE DISMISS THE SAME AS NOT PRESSED. 3. GROUND NO. 2 OF THE ASSESSEES APPEAL IS AGAINST CONFIRMING THE ADDITION OF RS. 2,17,500/- ON ACCOUNT OF UNDISCLOSE D INCOME FOR CASH RECEIVED FROM M/S VIZAN ADS & FILMS PVT. LTD. THE ASSESSEE F ILED RETURN OF INCOME ON 26/09/2009 DECLARING A LOSS OF RS. 22,11,694/-. THE ASSESSEE IS A COMPANY, DERIVED INCOME FROM BUSINESS OF TRADING OF CEMENT, POP AND WALL PUTTY. THE LD ASSESSING OFFICER OBSERVED THAT THERE WAS A SEARC H AND SEIZURE OPERATION U/S 132 OF THE ACT AND SURVEY ACTION U/S 133A OF TH E ACT WAS CARRIED OUT ON 17/09/2008 ON THE MEMBERS OF KAMDHENU GROUP. THE ASS ESSEE COMPANY RELATES TO PRADEEP AGARWAL, SUB-GROUP OF KAMDHENU GR OUP OF BHIWADI. DURING THE COURSE OF SEARCH, CASH, JEWELLERY, STOCK IN TRAD E, VALUABLES, DOCUMENTS, BOOKS OF ACCOUNT AND/OR LOOSE PAPERS WERE FOUND AND SEIZED FROM THE PREMISES OF THE MEMBERS OF PRADEEP AGARWAL SUB GROUP OF ONE SUCH COMPANY HAPPENS TO BE THE ASSESSEE. THE CASE WAS SCR UTINIZED U/S 143(3) OF 3 ITA NO. 117/JP/2014 M/S KAMDHENU CEMENT LTD. VS. DCIT THE ACT BY THE ASSESSING OFFICER. DURING THE COURSE OF SURVEY, DOCUMENT BEARING NO. 23 OF ANNEXURE A/6 WAS SEIZED FROM 5/2 P UNJABI BAGH EXTENSION, NEW DELHI. THE LD ASSESSING OFFICER OBSERVED THAT TH E SAID SEIZED PAPER WAS IN THE NATURE OF LEDGER OF ONE M/S BIJAN ADS & FILM S PVT. LTD. ON PERUSAL OF THAT, WHICH REVEALED THAT THE ASSESSEE HAD RECEIVED CASH ON SEVERAL OCCASIONS, RS. 0.5 LAC ON 14/5/2008, RS. 1 LAC ON 1 9/05/2008 AND RS. 67,500/- ON 05/06/2008 FROM BIJAN ADS TOTALING TO R S. 2,17,500/- WHICH ON VERIFICATION WAS NOT FOUND TO BE DISCLOSED IN THE BO OKS OF THE ASSESSEE. THE LD ASSESSING OFFICER GAVE SHOW CAUSE NOTICE OF THIS SE IZED PAPER TO EXPLAIN THE RECEIPT OF RS. 2,17,500/-. THE ASSESSEE SUBMITTED TH AT THESE PAYMENTS WERE PART OF CASH BOOK. HOWEVER, ON VERIFICATION OF CASH BOOK, THESE CASH HAD NOT FOUND REFLECTED. THEREFORE, HE MADE ADDITION OF RS. 2,17,500/- IN THE INCOME OF THE ASSESSEE AS UNDISCLOSED INCOME. 4. BEING AGGRIEVED BY THE ORDER OF THE ASSESSING OF FICER, THE ASSESSEE CARRIED THE MATTER BEFORE THE LD CIT(A), WHO HAD CONF IRMED THE ADDITION BY OBSERVING AS UNDER:- 5.3 I HAVE GONE THROUGH THE ASSESSMENT ORDER AS WEL L AS SUBMISSIONS MADE BY THE AR AND FIND THAT A.O. HAS M ADE AN ADDITION OF RS. 2,17,500/- ON ACCOUNT OF UNDISCLOSE D INCOME RECEIVED FROM M/S BIJAN ADS & FILMS PVT. LTD.. THIS ADDITION WAS 4 ITA NO. 117/JP/2014 M/S KAMDHENU CEMENT LTD. VS. DCIT MADE ON THE BASIS OF A LEDGER ACCOUNT OF M/S BIJAN ADS & FILMS PVT. LTD. FOR THE PERIOD 01/01/2008 TO 12/09/2008 F OUND AND SEIZED DURING THE COURSE OF SEARCH AT THE PREMISES OF THE APPELLANT. THE A.O. FOUND THAT CERTAIN TRANSACTIONS HAVE BEEN MADE THROUGH BANKING CHANNELS AND WERE REFLECTED IN THE BOOKS OF ACCOUNTS. HOWEVER, THE PAYMENTS MADE IN CASH WERE FOU ND TO HAVE BEEN NOT RECORDED IN THE BOOKS OF ACCOUNTS. IT WAS FOUND BY THE A.O. THAT A PAYMENT OF RS. 50,000/- WAS MADE IN CASH ON 14/05/2008, FURTHER ON 19/05/2008 A CASH PAYMENT OF RS. 1 LAC WAS MADE AND AGAIN ON 05/06/2008 A CASH PAYMENT OF R S. 67,500 WAS MADE. THE PAPER FOUND IN THE COURSE OF SEARCH (PA GE 23 OF ANNEXURE A/6) IS REPRODUCED WITH THE ORDER OF THE LD CIT(A). 5. NOW THE ASSESSEE IS APPEAL BEFORE US. THE LD AR OF THE ASSESSEE HAS SUBMITTED THAT THIS ROUGH PAPER CONTAINING SOME NOT ING, WHICH WAS NOT RELATED TO BUSINESS OF ASSESSEE. NEITHER THE LD ASS ESSING OFFICER CONDUCTED ANY INQUIRY ESTABLISHING THE LINK OF THIS PAPER WITH THE BUSINESS AFFAIRS OF THE ASSESSEE. ALTHOUGH THE SEIZED PAPER APPARENTLY HAVE NOTING OF CERTAIN PARTIES BUT THE LD ASSESSING OFFICER HAD PREFERRED NOT TO E XAMINE ANY. FOR EXAMPLE, PAGE NO. 23 OF ANNEXURE-A/6 ON THE BASIS OF WHICH AD DITION HAS BEEN MADE OF RS. 2,17,500/- CONTAIN LEDGER ACCOUNT OF BIJAN A DS AND FILMS PVT. LTD. THE LD ASSESSING OFFICER HAD NOT GIVEN ANY REASON TO MA KE ADDITION IN THE HANDS OF THE ASSESSEE. THE WRITER OF THESE PAPERS HAD REMAI NED UNEXAMINED. IN 5 ITA NO. 117/JP/2014 M/S KAMDHENU CEMENT LTD. VS. DCIT THESE CIRCUMSTANCES, THERE PAPERS ARE ONLY ROUGH AN D DUMP PAPERS AND REQUIRED TO BE IGNORED AND NO ADDITION COULD HAVE B EEN MADE ON THE BASIS OF THESE PAPERS. THE LD ASSESSING OFFICER MADE ADDITION ON THE GROUND THAT THE ASSESSEE RECEIVED SOME CASH FROM M/S BIJAN ADS AND FILMS PVT. LTD, HOWEVER, THE LD CIT(A) HAS CONFIRMED THE ADDITION BY HOLDING THAT THESE ARE UNEXPLAINED EXPENDITURE U/S 69C OF THE ACT. THIS PAP ER PERTAINS FOR THE PERIOD 01/1/2008 TO 12/09/2009. THIS SHOWS THAT THE PAPER RELATES TO ASSESSMENT YEAR 2008-09 AND 2009-10. THIS ITSELF ES TABLISHES THAT THE PAPER IS OF ROUGH NATURE. OTHERWISE LEDGER ACCOUNT WOULD NO T HAVE BEEN FOR TWO ASSESSMENT YEARS. HE FURTHER ALTERNATIVELY SUBMITTE D THAT THE ASSESSEE GROUP HAVE PREPARED A CASH BOOK OF ALL THE ROUGH PAPERS CONTAINING CASH TRANSACTIONS AND IT WAS ESTABLISHED THAT ASSESSEE WA S ALWAYS HAVING SUFFICIENT CASH TO MEET OUT THE EXPENDITURE. THE ASSESSEE GROUP HAD BEEN PLEADING THAT CASH WAS GENERATED ON ACCOUNT OF CASH CREDIT FA CILITY AVAILED BY THE ASSESSEE FOR BOGUS PURCHASES FOR WHICH CHEQUE PAYME NTS WERE MADE BY THE ASSESSEE AND SAME WERE RECEIVED BACK IN CASH, WHICH WAS AVAILABLE WITH THE ASSESSEE. THUS, THE SOURCE OF CASH IS IN FACT CASH CREDIT FACILITY OBTAINED FROM THE BANK. FURTHER SUBSTANTIAL ADDITION ON ACCOUNT O F SUCH UNEXPLAINED CASH HAS BEEN MADE IN THE HANDS OF DIRECTOR SHRI PRADEEP KUMAR AGARWAL I.E. IN 6 ITA NO. 117/JP/2014 M/S KAMDHENU CEMENT LTD. VS. DCIT A.Y. 2007-08 RS. 39,50,000/- AND IN A.Y. 2008-09 RS . 1,36,00,655/-. EVEN THESE CASH PAYMENTS TREATED UNACCOUNTED, IT CAN BE EXPLAINED BY COVERING THE DISCLOSURE MADE BY THE DIRECTOR. THE SAME ADDITI ONS WERE MADE IN PRECEDING YEAR I.E. A.Y. 2008-09. THE HONBLE ITAT, J AIPUR BENCH, JAIPUR HAD SET ASIDE THE ISSUE TO THE ASSESSING OFFICER IN ITA NO. 97/JP/2013 VIDE ORDER DATED 28/2/2014 FOR A.Y. 2008-09. THEREFORE, HE PRAY ED TO DELETE THE ADDITION. 6. AT THE OUTSET, THE LD SR. DR HAS VEHEMENTLY SUPP ORTED THE ORDER OF THE LOWER AUTHORITIES AND PRAYED TO UPHOLD THE ORDER OF THE LD CIT(A). 7. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON THE RECORD. IT IS UNDISPU TED FACT THAT THIS PAPER WAS SEIZED AS PER PAGE NO. 23 OF ANNEXURE-A/6 FROM 5/2 PUNJABI BAGH EXTENSION, NEW DELHI DURING THE COURSE OF SEARCH CONDUCTED ON 1 7/09/2008. AS PER SECTION 132(4)(A) THERE IS A PRESUMPTION OF THE LAW THAT SUCH BOOKS OF ACCOUNT, OTHER DOCUMENTS BELONGS TO THE ASSESSEE AN D CONTENTS OF SUCH DOCUMENTS ARE TRUE BUT THIS PRESUMPTION IS REBUTABL E. THE ASSESSEE PRODUCED CASH BOOK DURING THE COURSE OF ASSESSMENT PROCEEDIN GS BEFORE THE ASSESSING OFFICER AND THESE CASH PAYMENTS WERE NOT FOUND RECOR DED IN THE REGULAR BOOKS OF ACCOUNT. IT IS ALSO UNDISPUTED FACT THAT O N THIS PAPER BOTH THE YEARS 7 ITA NO. 117/JP/2014 M/S KAMDHENU CEMENT LTD. VS. DCIT I.E. A.Y. 2008-09 AND 2009-10 TRANSACTIONS HAD BEEN RECORDED WITH SOME TRANSACTIONS OF CHEQUE PAYMENTS. IT IS EVIDENT FROM THE CHEQUE PAYMENTS THAT THESE PAYMENTS WERE RELATED TO THE ASSESSEE ITS ELF AS CHEQUE PAYMENTS HAVE BEEN ENTERED IN THE REGULAR BOOKS OF ACCOUNT, HOWEVER, CASH PAYMENTS HAVE NOT BEEN ENTERED IN THE REGULAR BOOKS OF ACCOU NT. THE BURDEN OF PROOF IS ON THE ASSESSEE TO REBUT THAT THESE ENTRIES ON PAPE R ARE NOTINGS WITH EVIDENCE BEFORE THE LOWER AUTHORITIES, WHICH HAS NOT BEEN DISCHARGED BY THE ASSESSEE. THE LD ASSESSING OFFICER ONLY MADE ADDITIO N ON THE BASIS OF ENTRIES RELEVANT TO A.Y. 2009-10, THEREFORE, WE CONFIRM THE ORDER OF THE LD CIT(A). 8. IN THE RESULT, THE ASSESSEES APPEAL IS DISMISSE D. ORDER PRONOUNCED IN THE OPEN COURT ON 30/10/2015. SD/- SD/- YFYR DQEKJ VH-VKJ-EHUK (LALIET KUMAR) (T.R. MEENA) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 30 TH OCTOBER, 2015 RANJAN* VKNS'K DH IZFRFYFI VXZSFKR @ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ @ THE APPELLANT- M/S KAMDHENU CEMENT LTD., DELHI. 2. IZR;FKHZ @ THE RESPONDENT- THE DCIT, CENTRAL CIRCLE, ALWAR. 3. VK;DJ VK;QDR @ CIT 4. VK;DJ VK;QDRVIHY @ THE CIT(A) 8 ITA NO. 117/JP/2014 M/S KAMDHENU CEMENT LTD. VS. DCIT 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ @ DR, ITAT, JAIPUR 6. XKMZ QKBZY @ GUARD FILE (ITA NO.117/JP/2014) VKNS'KKUQLKJ @ BY ORDER, LGK;D IATHDKJ @ ASST. REGISTRAR