Sujauddin Molla, Kolkata V. ACIT, CIR-53, KOLKATA, Kolkata

ITA 1299/KOL/2016

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 5290 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 11 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-05-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 09-06-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: C J SINGH
• Assessee Lawyers: S K CHHOTOPADHYAY
• Keywords: Unexplained investment; Opportunity of being heard; Source of fund; Additional evidence; Bogus loan; Set aside
• Section: 142(1); 133A; 201; 131; 68; 69; 148

Judgement Text

I.T.A. NO. 1299/KOL/2016 (ASSESSMENT YEAR: 2010-2011) SUJAUDDIN MOLLA 1 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA A BENCH, KOLKATA BEFORE SHRI P.M. JAGTAP, VICE-PRESIDENT (KZ) AND SHRI S.S. VISWANETHRA RAVI, JUDICIAL MEMBER I.T.A. NO. 1299/KOL/2016 ASSESSMENT YEAR: 2010-2011 SUJAUDDIN MOLLA,................................... ............................................. APPEL LANT CHANDANNAGAR, P.S. MAHESHTALA, KOLKATA-700 141 [PAN: AHZPM 2016 N] -VS.- ASSISTANT COMMISSIONER OF INCOME TAX,... ...........RESPONDENT CIRCLE-53, KOLKATA, AAYAKAR BHAWAN, DAKSHIN, 2, GARIAHAT ROAD, SOUTH, KOLKATA-700 068 APPEARANCES BY: SHRI S.K. CHHOTOPADHYAY, ADVOCATE, FOR THE APPELLAN T SHRI C.J. SINGH, JCIT, SR. D.R., FOR THE RESPONDEN T DATE OF CONCLUDING THE HEARING : MARCH 26, 2019 DATE OF PRONOUNCING THE ORDER : MAY 29, 2019 O R D E R PER SHRI P.M. JAGTAP, VICE-PRESIDENT (KOLKATA ZONE) :- THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS)-7, KOLKATA DAT ED 11.03.2016 AND THE SOLITARY ISSUED INVOLVED THEREIN RELATES TO THE ADDITION OF RS.86,87,139/- MADE BY THE ASSESSING OFFICER AND CO NFIRMED BY THE LD. CIT(APPEALS) UNDER SECTION 69 OF THE INCOME TAX ACT , 1961. 2. THE ASSESSEE IN THE PRESENT CASE IS AN INDIVIDUA L, WHO IS ENGAGED IN THE BUSINESS OF JOB WORKS IN GARMENTS UNDER THE NAM E AND STYLE OF HIS PROPRIETARY CONCERN M/S. WINNER GARMENTS PVT. LIMIT ED. A SURVEY UNDER SECTION 133A OF THE ACT WAS CARRIED OUT IN THE BUSI NESS PREMISES OF THE ASSESSEE ON 11.01.2012. DURING THE COURSE OF SURVEY , A BALANCE-SHEET OF M/S. WINNER GARMENTS PVT. LIMITED AS ON 31.03.2010 WAS FOUND SHOWING A LOAN OF RS.86,87,139/- RECEIVED FROM THE ASSESSEE . SINCE THE SAID LOAN I.T.A. NO. 1299/KOL/2016 (ASSESSMENT YEAR: 2010-2011) SUJAUDDIN MOLLA 2 WAS NOT REFLECTED IN THE PERSONAL FILE OF THE ASSES SEE, NOTICE UNDER SECTION 148 WAS ISSUED BY THE ASSESSING OFFICER ON 11.04.20 12. THE ASSESSEE, HOWEVER, DID NOT FILE HIS RETURN OF INCOME IN RESPO NSE TO THE SAID NOTICE. THEREAFTER A NOTICE UNDER SECTION 142(1) WAS ISSUED BY THE ASSESSING OFFICER REQUIRING THE ASSESSEE TO EXPLAIN THE SOURC E OF FUNDS UTILIZED FOR GIVING A LOAN OF RS.86,87,139/- TO M/S. WINNER GARM ENTS PVT. LIMITED. THE ASSESSEE, HOWEVER, FAILED TO OFFER ANY EXPLANATION REGARDING THE NATURE AND SOURCE OF FUNDS UTILIZED FOR GIVING THE SAID LO AN. THE ASSESSING OFFICER, THEREFORE, TREATED THE SAID LOAN GIVEN BY THE ASSESSEE TO M/S. WINNER GARMENTS PVT. LIMITED AS UNEXPLAINED INVESTM ENT OF THE ASSESSEE AND AN ADDITION OF RS.86,87,139/- WAS MADE BY HIM T O THE TOTAL INCOME OF THE ASSESSEE UNDER SECTION 69 IN THE ASSESSMENT COM PLETED UNDER SECTION 147/143(3) VIDE AN ORDER DATED 18.09.2012. 3. AGAINST THE ORDER PASSED BY THE ASSESSING OFFICE R UNDER SECTION 147/143(3), AN APPEAL WAS PREFERRED BY THE ASSESSEE BEFORE THE LD. CIT(APPEALS) CHALLENGING, INTER ALIA, THE ADDITION MADE BY THE ASSESSING OFFICER UNDER SECTION 69. DURING THE COURSE OF APPE LLATE PROCEEDINGS BEFORE THE LD. CIT(APPEALS), IT WAS SUBMITTED BY TH E ASSESSEE THAT HE WAS HAVING A PLOT OF LAND SITUATED AT VILLAGE & P.O. CH ANDANNAGAR, P.S. MAHESHTALA ADMEASURING 10 DECIMAL, WHICH WAS SUPPOS ED TO BE DEVELOPED FOR COMMERCIAL AND RESIDENTIAL PURPOSES. IT WAS SUBMITTED THAT THE ASSESSEE HAD RECEIVED ADVANCES FROM THE FOLLOWI NG SEVEN PARTIES AGAINST THE SALE OF THE PROPOSED DEVELOPED PROPERTY :- SL. NO. NAME AMOUNT 1. SK. MONIRUL 4,50,000 2. SK. SULTAN 7,00,000 3. SK. AMINUL HAQUE 3,40,000 4. HAZI ASRAF ALI MOLLA 6,50,000 5. SK. INTAZ 8,00,000 6. FULENDU CHAKRABORTY 5,50,000 7. SMT. SOVA MUKHERJEE 40,00,000 I.T.A. NO. 1299/KOL/2016 (ASSESSMENT YEAR: 2010-2011) SUJAUDDIN MOLLA 3 THE ASSESSEE ALSO FURNISHED THE ADDRESSES OF THE AB OVE SEVEN PARTIES ALONG WITH THE DOCUMENTARY EVIDENCE IN THE FORM OF AGREEMENTS FOR SALE. 4. THE SUBMISSIONS MADE BY THE ASSESSEE FOR THE FIR ST TIME BEFORE HIM ALONG WITH THE ADDITIONAL EVIDENCE FILED IN SUPPORT WERE FORWARDED BY THE LD. CIT(APPEALS) TO THE ASSESSING OFFICER FOR HIS V ERIFICATION AND COMMENTS. IN THE REMAND REPORT SUBMITTED TO THE LD. CIT(APPEALS), THE FOLLOWING COMMENTS WERE OFFERED BY THE ASSESSING OF FICER IN RESPECT OF EACH AND EVERY ADVANCE CLAIMED TO BE RECEIVED BY TH E ASSESSEE FROM SEVEN PARTIES:- SUMMONS U/S 131 OF THE INCOME TAX ACT WERE ISSUED TO THE VARIOUS PERSONS AS PER THE LIST PROVIDED BY THE ASS ESSEE AND FROM WHOM ADVANCES TO THE TUNE OF RS. 74,90,000/- A ND WHICH AS PER THE ORDER U/S 143(3} THE ASSESSEE HAD GIVEN AS LOAN TO THE COMPANY. TO KEEP IN ACCORDANCE WITH THE FRESH E VIDENCES AS PLACED BEFORE THE LD. CIT(A)-7, KOL. THE ABOVE S UMMONSES WERE ISSUED TO ALL THE PARTIES AS PER THE LIST GIVE N BY THE ASSESSEE ON VARIOUS DATES AS ENUMERATED BELOW.- (A) SK. MONIRUL VIII & P.O. CHANDANNAGAR, MAHESHTALA, K OLKATA-141 SUMMONS U/S 131 WAS ISSUED TO HIM ON 25.09.2014 BUT NO ONE COMPILED, EVEN THOUGH THE SUMMONS HAD BEEN SERVED T O THE RESPECTIVE PERSON. GIVING HIM FURTHER OPPORTUNITY O F BEING HEARD SUMMON U/S 131 WAS ONCE AGAIN ISSUED ON 15.01 .2015 EVEN AFTER THE SUMMON BEING SERVED THE INCUMBENT FA ILED TO APPEAR AND EXPLAIN THE SOURCE AND MODE OF PAYMENT I N RESPECT OF THE ADVANCE GIVEN TO THE ASSESSEE SUJAUDDIN MOLL A. (B ) SK. SULTAN SOUTH JALKHARA, BBT ROAD, P.S. MAHESHT ALA, KOLKATA-141 . SUMMON U/S 131 WAS ISSUED TO HIM ON 25.09.2014 BUT NO ONE COMPILED EVEN THOUGH THE SUMMONS HAD BEEN SERVED TO THE RESPECTIVE PERSON. GIVING HIM FURTHER OPPORTUNITY O F BEING HEARD SUMMON U/S 131 WAS ONCE AGAIN ISSUED ON 15.01 .2015 TO APPEAR ON 27.01.2015. NONE APPEARED. HOWEVER ON 02.02.2015 SHRI SK. SULTAN APPEARED IN THE CHAMBER OF THE UNDERSIGNED. KEEPING IN VIEW THE REMAND PROCEEDINGS AND GIVING THE ASSESSEE ONE MORE OPPORTUNITY A STATEMEN T WAS TAKEN U/S 131. SK. SULTAN STATED THAT HE HAD GIVEN ADVANCE TO THE TUNE OF RS. 7,00,000/- FOR PURCHASING TWO SHOPS AT THE PREMISES WHICH SHRI SUJAUDDIN MOLLA WAS PROMOTING. THE PAYMENTS WERE MADE IN CASH AND THE DETAILS WERE RS. 2 LAKHS ON 2010, RS. 3 LAKHS ON 2011 AND RS. 2 LAKHS ON 201 2. HE WAS ALSO ASKED TO PRODUCE EVIDENCES IN RESPECT OF THE P AYMENT. THE INCUMBENT STATED THAT 'SINCE SUJAUDDIN MOLLA IS MY WIFE'S BROTHER ALL TRANSACTION IS IN GOOD FAITH AND I HAVE NO I.T.A. NO. 1299/KOL/2016 (ASSESSMENT YEAR: 2010-2011) SUJAUDDIN MOLLA 4 EVIDENCES TO SHOW TO YOU.' SK. SULTAN WAS ALSO ASKE D TO SHOW HIS CREDITWORTHINESS. HE STATED THAT HE EARNS AROUN D RS.21,000/- AND HAS A WIFE, 2 DAUGHTERS, 2 SONS AND HIS MOTHER RESIDING WITH HIM. HE DOES NOT HOLD ANY BANK ACCOUN T. (C) SK. AMINUL HAQUE VILL. BISHUHARA, P.O. BUITA, BUDGE BUDGE, SOUTH 24 PARGANAS . SUMMONS U/S 131 WAS ISSUED TO HIM ON 25.09.2014 WIT H NO COMPLIANCE EVEN THOUGH THE SUMMONS HAD BEEN SERVED TO THE RESPECTIVE PERSON. GIVING HIM FURTHER OPPORTUNITY O F BEING HEARD SUMMON U/ S 131 WAS ONCE AGAIN ISSUED ON 15.0 1.2015. NONE APPEARED. HOWEVER ON 09.02.2015 SHRI SK: ANIMU L HAQUE APPEARED IN THE CHAMBER OF THE UNDERSIGNED AND G.S PER STATEMENT U/S 131 SAID THAT HE HAD GIVEN ADVANCE TO THE TUNE OF RS.3,40,000/ - FOR PURCHASING A SMALL OFFICE ROO M (AROUND 250/- SQ. FT.) AT THE PREMISE WHICH SHRI SUJAUDDIN MOLLA IS PROMOTING. THE PAYMENTS WERE MADE IN CASH. HE WAS A LSO ASKED TO PRODUCE EVIDENCES IN RESPECT OF THE PAYMEN T. THE INCUMBENT STATED THAT 'SINCE IT IS A CASH BUSINESS WE PAID IN GOOD FAITH ONE I HAVE NO EVIDENCES TO SHOW TO YOU.' SHRI SK. AMINUL HAQUE STATED TO HAVE RETIRED FROM AN NGO (CI NI) AND WAS EARNING AROUND RS.24,000/ - WHEN IN SERVICE. (E) HAZI ASHRAF ALI MOLLA VILL. BISHUHARA, PO. BUITA, B UDGE BUDGE, SOUTH 24 PARGANAS . SUMMON U/S 131 WAS ISSUED TO HIM ON 25.09.2014 BUT NO ONE COMPLIED EVEN THOUGH THE SUMMONS HAD BEEN SERVED TO THE RESPECTIVE PERSON. GIVING HIM FURTHER OPPORTUNITY O F BEING HEARD SUMMON U/S 131 WAS ONCE AGAIN ISSUED ON 15.01 .2015 EVEN AFTER THE SUMMON BEING SERVED THE INCUMBENT FA ILED TO APPEAR AND EXPLAIN THE SOURCE AND MODE OF PAYMENT I N RESPECT OF THE ADVANCE GIVEN TO THE ASSESSEE SUJAUDDIN MOLL A. (F) SK. LNTIAZ: VIII. SEPAIPARA, P.S. PACHLA DIST. HOWR AH SUMMON U/S 131 WAS ISSUED TO HIM ON 25.09.2014 BUT NO ONE COMPLIED EVEN THOUGH THE SUMMON HAD BEEN SERVED TO THE RESPECTIVE PERSON. GIVING HIM FURTHER OPPORTUNITY O F BEING HEARD SUMMON U/S 131 WAS ONCE AGAIN ISSUED ON 15.01 .2015. NONE APPEARED. HOWEVER ON 06.02.2015 SHRI SK. INTIA Z APPEARED IN THE CHAMBER OF THE UNDERSIGNED AND KEEP ING IN VIEW THE REMAND PROCEEDINGS A STATEMENT U/S 131 WAS TAKEN. SK. INTIAZ STATED THAT HE HAD GIVEN ADVANCE TO THE TUNE OF RS. 4,00,000/- FOR PURCHASING A SMALL OFFICE ROOM (WHOS E TOTAL SALE PRICE WAS RS. 14.50 LAKHS) HE WAS ALSO ASKED T O PRODUCE ALL EVIDENCES IN RESPECT OF THE PAYMENT. THE INCUMB ENT STATED THAT 'ALL THE MONEY WAS PAID IN CASH AND I DO NOT H AVE A BANK ACCOUNT'. IN ORDER TO SUBSTANTIATE HIS CREDIT WORTH INESS SK. INTIAZ ALI WAS ASKED THE SOURCE OF THE ALLEGED ADVA NCE. HE STATED THAT HE IS EMPLOYED IN ALTAZ AT PANCHALA AND EARNS A I.T.A. NO. 1299/KOL/2016 (ASSESSMENT YEAR: 2010-2011) SUJAUDDIN MOLLA 5 MONTHLY SALARY OF RS.15,500/-. HE HAS A WIFE, A SON , MOTHER AND TWO BROTHERS LIVING WITH HIM. (G) FULENDU CHOKROBORTY: VIII. XUSUMOAIA P.O. PADNA HOO GLY 712148 SUMMON U/S 131 WAS ISSUED TO HIM ON 25.09.2014 BUT NO ONE COMPLIED EVEN THOUGH THE SUMMONS HAD BEEN SERVED TO THE RESPECTIVE PERSON GIVING HIM FURTHER OPPORTUNITY OF BEING HEARD. SUMMONS U/S 131 WAS ONCE AGAIN ISSUED ON 15. 01.2015. EVEN AFTER THE SUMMON BEING SERVED THE INCUMBENT FA ILED TO APPEAR AND EXPLAIN THE SOURCE AND MODE OF PAYMENT I N RESPECT OF THE LOAN GIVEN TO THE ASSESSEE SUJAUDDIN MOLLA. AS PER THE WRITTEN SUBMISSION GIVEN BY SHRI FALGUNI MUKHERJEE, (SON OF SHOVA MUKHERJEE) SMT. SHOVA MUKH ERJEE EXPIRED ON 20.05.2013 BUT SHE HAD GIVEN AN ADVENCE OF RS.40,00,000/- FOR BOOKING A FLAT OF 4000 SQ.FT: BU T NOW HE HAS NO INTEREST AND WANTED THE MONEY BACK. BUT HOWEVER IT IS SURPRISING TO NOTE THAT THERE IS NO AGREEMENT IN RE SPECT OF THE PAYMENT WHICH AS PER THE INCUMBENT WAS ONCE AGAIN M ADE IN CASH. WHEN REMAND REPORT SUBMITTED BY THE ASSESSING OFFI CER GIVING HIS ADVERSE COMMENTS IN RESPECT OF EXPLANATION OFFERED BY THE ASSESSEE REGARDING SOURCE OF FUNDS UTILIZED FOR GIVING LOAN TO M/S. WINNER GARMENTS PVT. LIMITED WAS CONFRONTED BY THE LD. CIT (APPEALS) TO THE ASSESSEE, IT WAS SUBMITTED ON BEHALF OF THE ASSESSE E THAT HIS CLAIM OF HAVING RECEIVED THE ADVANCES IN CASH FROM THE CONCE RNED PARTIES WAS DULY SUPPORTED BY EVIDENCE IN THE FORM OF SALE AGREEMENT S AND SINCE FOUR OF SUCH PARTIES OUT OF THE TOTAL SEVEN PARTIES HAD CON FIRMED THE PAYMENT OF ADVANCES, THERE WAS NO REASON TO DOUBT THE GENUINEN ESS OF THE SAID CREDITORS. 5. THE LD. CIT(APPEALS) DID NOT FIND MERIT IN THE S UBMISSIONS OF THE ASSESSEE AND PROCEEDED TO CONFIRM THE ADDITION OF R S.86,87,139/- MADE BY THE ASSESSING OFFICER UNDER SECTION 69 FOR THE F OLLOWING REASONS GIVEN IN HIS IMPUGNED ORDER:- 2.4. I HAVE GONE THROUGH THE SUBMISSIONS MADE BY T HE APPELLANT. A SURVEY UNDER SECTION 133A WAS CONDUCTE D ON 11.01.2012 AND DEPARTMENT HAS COME TO THE KNOW THE LOAN GIVEN BY THE APPELLANT DURING THE SURVEY PROCEEDING S. THE APPELLANT HAS NOT FILED THE RETURN FOR A. Y. 2010-1 1 TILL THE DATE OF SURVEY. THE RETURN WAS FILED ONLY IN RESPON SE TO THE I.T.A. NO. 1299/KOL/2016 (ASSESSMENT YEAR: 2010-2011) SUJAUDDIN MOLLA 6 NOTICE UNDER SECTION 148. DURING THE COURSE OF SURV EY THE APPELLANT DID NOT EXPLAIN THE NATURE AND SOURCE OF THE AMOUNT OF ADVANCE GIVEN TO M/S. WINNER GARMENTS PVT . LTD. DURING THE ASSESSMENT PROCEEDINGS ALSO, THE APPELLA NT DID NOT EXPLAIN THE NATURE AND SOURCE OF THE LOAN GIVEN . 2.5. DURING THE REMAND PROCEEDINGS PERSONS HAVE APPEARED BEFORE THE A.O DEPOSED THE STATEMENT. (A) SK. SULTAN - RS.700,000/- THE CREDITOR HAS APPEARED BEFORE THE ASSESSING OFFI CER AND DEPOSED THAT HE HAS MADE THE PAYMENT OF RS.7,00,000 /- AS ADVANCE FOR PURCHASE OF PROPOSED DEVELOPED PREMISES FROM THE APPELLANT. AS PER HIS STATEMENT HE HAS GIVEN AD VANCE TO THE APPELLANT AS UNDER: RS. 2,00,000/- IN 2010 RS. 3,00,000/- IN 2011 AND RS. 2,00,000/- IN 2012. AS PER THE COPY OF THE AGREEMENT FILED BEFORE ME, T HE AGREEMENT WAS ENTERED ON 9 TH JANUARY, 2010 AND AS PER PAGE NO. 2 CLAUSE NO. 3 OF THE AGREEMENT RS.7,00,000/- W AS PAID TO THE VENDOR ON EXECUTION OF THE AGREEMENT AND THE BA LANCE WILL BE PAID AFTER DELIVERY OF POSSESSION OF THE FL AT. FROM THE ABOVE, IT IS CLEAR THAT THERE WAS A CLEAR INCONSIST ENCY IN THE DEPOSITION MADE BY THE CREDITOR. DURING THE REMAND STAGE BEFORE THE ASSESSING OFFICER THE CREDITOR HAS STATE D THAT THE AMOUNT OF RS.7,00,000/- WAS PAID FROM 2010-2012 IN THREE INSTALMENTS ON VARIOUS OCCASIONS. HE HAS NOT FURNIS HED THE EXACT DATES OF PAYMENTS WHEREAS AS PER THE AGREEMEN T TILE AMOUNT OF RS.7,00,000/- WAS SUPPOSED TO HAVE BEEN P AID ON 09.01.2010. FURTHER, THE CREDITOR STATED THAT HE IS NOT AN INCOME TAX ASSESSEE THE SOURCE WAS NOT EXPLAINED. N O PROOF WAS PRODUCED BEFORE THE A.O. IN SUPPORT OF THE AMOU NT PAID TO SUJAUDDIN MOLLA. HIS TOTAL INCOME WAS OF RS.21,0 00/- AND HE HAS TO TAKE CARE OF HER MOTHER, WIFE, 2 DAUGHTER S, 2 SONS AND HIS INCOME WOULD BE HARDLY SUFFICIENT TO MEET T HE FAMILY NEEDS AND THERE IS NO ROOM TO MAKE SAVINGS TO THE E XTENT OF RS.7,00,000/- TO GIVE AS INTEREST FREE ADVANCE TO T HE APPELLANT. THEREFORE, I AGREE WITH THE A.O. THAT TH E ADVANCE IN THE NAME OF SK. SULTAN IS A BOGUS LOAN AND SK. S ULTAN IS NOT HAVING THE CREDIT WORTHINESS TO ADVANCE SUCH AN AMOUNT AND THE AGREEMENT MADE BY THE APPELLANT WAS AN AFTERTHOUGHT. THEREFORE, THE ADDITION OF RS.7,00,00 0/- IS CONFIRMED. (B) SK. AMINUL HAQUE - RS.3,40,000 IN THE REMAND REPORT THE A.O. STATED THAT THE CREDI TOR IS NOT HAVING CREDIT WORTHINESS TO GIVEN AN ADVANCE OF RS. 3,40,000. AS PER THE REMAND REPORT, CREDITOR HAS APPEARED BEF ORE THE A.C. AND CONFIRMED THE ADVANCE GIVEN TO THE APPELLA NT. AS PER HIS STATEMENT THE ENTIRE ADVANCE WAS PAID IN CA SH. THERE I.T.A. NO. 1299/KOL/2016 (ASSESSMENT YEAR: 2010-2011) SUJAUDDIN MOLLA 7 WAS NO EVIDENCE FOR THE PAYMENT. HOWEVER, THE APPEL LANT HAS FILED COPY OF THE AGREEMENT ENTERED WITH THE CREDIT OR. THE CREDITOR WAS EARNING RS.24,000/- PER MONTH AND RETI RED FROM SERVICE. HE IS NOT AN INCOME TAX ASSESSEE AND THERE WAS NO EVIDENCE FOR ACCUMULATION OF THE MONEY. THEREFORE, I AGREE WITH THE A.O. THAT THE CREDITOR HAS NO CREDIT WORTH INESS TO MAKE ADVANCE OF RS.3,40,000 AND THE ADDITION MADE B Y THE A.O. IS CONFIRMED. (C) SK. INTIAZ (CREDITOR) - RS.800,000 THE CREDITOR APPEARED BEFORE THE A.O. AND DEPOSED T HE STATEMENT. IN HIS STATEMENT THE CREDITOR STATED THA T HE HAS GIVEN AMOUNT OF RS.4,00,000/- FOR SMALL OFFICE ROOM . AGAIN IN THIS CASE ALSO, THE ENTIRE MONEY WAS PAID IN CASH A ND THERE WAS NO BANK ACCOUNT NO EVIDENCE FOR ACCUMULATION OF CASH. THE CREDITOR IS NOT AN INCOME TAX ASSESSEE OR WEALT H TAX ASSESSEE AND MONTHLY SALARY WAS ONLY RS.15,500/- AN D THERE IS NO ROOM FOR MAKING ANY SAVINGS TO GIVE THAT MUCH OF ADVANCE FROM HIS EARNINGS. THEREFORE, THE A.O. HELD THAT THE CREDITOR IS NOT HAVING CREDIT WORTHINESS. I EXAMINE D THE SUBMISSIONS OF THE APPELLANT AS WELL AS THE REMAND REPORT. THERE WAS A CLEAR INCONSISTENCY IN THE RECITALS OF THE AGREEMENT AND THE STATEMENT DEPOSED BY THE CREDITOR . AS PER THE AGREEMENT THE AMOUNT OF RS.7,00,000/- WAS PAID BY THE CREDITOR TO THE APPELLANT ON 09.01.2010 WHEREAS THE CREDITOR STATED BEFORE THE A.O. THAT HE HAS GIVEN ONLY RS.4, 00,000/-. IN VIEW OF THE FINDINGS OF THE ASSESSING OFFICER I AGREE WITH THE A.O. THAT THE CREDITOR IS NOT HAVING CREDIT WOR THINESS AND THE AGREEMENT IS NOTHING BUT AN AFTERTHOUGHT. THE A DDITION OF RS.7,00,000/- IS CONFIRMED. (D) SMT. SOVA MUKHERJEE - RS.40,00,000/- SMT. SOVA MUKHERJEE EXPIRED ON 20.05.2013 ON BEHALF OF HER SON SHRI FALGUNI MUKHERJEE GIVEN A WRITTEN SUBMISSI ON STATING THAT SHE HAS GIVEN ADVANCE OF RS.40,00,000/ - IN CASH BUT THE AMOUNT WAS NOT RETURNED TILL DATE AND THERE WAS NO LEGAL ACTION FROM THE CREDITOR DEMANDING THE PAYMEN T. THE CREDITOR WAS NEITHER AN INCOME TAX ASSESSEE NOR WEA LTH TAX ASSESSEE. THE SOURCES FOR PAYMENT WERE NOT EXPLAINE D BY THE CREDITOR AND THE APPELLANT. THEREFORE THE ADDITION MADE BY THE AO IS CONFIRMED. IN THE CASE OF SK. MONIRUL RS.4,50,000/-, HAZI ASRA F AII MOLLA RS.6,50,000/- AND FULENDU CHAKRABORTY RS.5,50,000/- THERE WAS NO RESPONSE FROM THE CREDITORS. THE APPELLANT HAS PRODUCED FOUR CREDITORS AS DISCUS SED ABOVE. NONE OF THEM HAD MEANS TO GIVE SUCH HUGE ADV ANCES TO THE APPELLANT. ALL OF THEM HAVE STATED THAT THER E WAS NO PROOF FOR THE PAYMENT MADE. WHEREAS SURPRISINGLY TH E APPELLANT HAS FURNISHED THE COPIES OF AGREEMENTS WH ICH CLEARLY SHOWS THAT THE AGREEMENTS WERE MADE SUBSEQU ENTLY TO CREATE AN EVIDENCE FOR THE SOURCE OF INVESTMENT MADE IN I.T.A. NO. 1299/KOL/2016 (ASSESSMENT YEAR: 2010-2011) SUJAUDDIN MOLLA 8 M/S. WINNER GARMENTS PVT. LTD. THE APPELLANT HAS NE ITHER STARTED THE PROPOSED CONSTRUCTION OF THE BUILDING N OR REPAID THE ADVANCE. THE CREDITORS ALSO INSPITE OF HAVING N O MEANS NOT DEMANDING THE AMOUNT. MERE CONFIRMATIONS WITHOU T PROVING THE CREDIT WORTHINESS CANNOT ESTABLISH THE GENUINENESS OF THE ADVANCE. FROM THE DETAILS FILED, IT IS SEEN THAT THE CREDITORS HAD EITHER NIL OR NEGLIGIBLE INC OME. IT IS WELL ESTABLISHED THAT LOAN CREDITS FROM PARTIES, WH O ARE OF NO MEANS CANNOT BE ACCEPTED AS GENUINE. IN THE CASE OF CIT VS.- PRECISION FINANCE (P,) LTD . HON'BE CALCUTTA HIGH COURT ALSO TOOK THE FOLLOWING VIEW :- 'IT IS FOR THE ASSESSEE TO PROVE THE IDENTITY OF TH E CREDITORS, THEIR CREDITWORTHINESS AND THE GENUINENESS OF THE TRANSACTIONS. IN OUR VIEW, ON THE FACTS OF THIS CAS E, THE TRIBUNAL DID NOT TAKE INTO ACCOUNT ALL THESE INGRED IENTS WHICH HAVE TO BE SATISFIED BY THE ASSESSEE. MERE FU RNISHING OF THE PARTICULARS IS NOT ENOUGH. THE ENQUIRY OF THE I NCOME-TAX OFFICER REVEALED THAT EITHER THE ASSESSEE WAS NOT T RACEABLE OR THERE WAS NO SUCH FILE AND, ACCORDINGLY, THE FIRST INGREDIENT AS TO THE IDENTITY OF THE CREDITORS HAD NOT BEEN ES TABLISHED. IF THE IDENTITY OF THE CREDITORS HAD NOT BEEN ESTABLIS HED, CONSEQUENTLY THE QUESTION OF ESTABLISHMENT OF THE GENUINENESS OF THE TRANSACTIONS OR THE CREDITWORTHI NESS OF THE CREDITORS DID NOT AND COULD NOT ARISE. THE TRIB UNAL DID NOT APPLY ITS MIND TO THE FACTS OF THIS PARTICULAR CASE AND PROCEEDED ON THE FOOTING THAT SINCE THE TRANSACTION S WERE THROUGH THE BANK ACCOUNT, ACCORDINGLY, IT IS TO BE PRESUMED THAT THE TRANSACTIONS WERE GENUINE. IT WAS NOT FOR THE INCOME-TAX OFFICER TO FIND OUT BY MAKING INVESTIGAT ION FROM THE BANK ACCOUNTS UNLESS THE ASSESSEE PROVES THE ID ENTITY OF THE CREDITORS AND THEIR CREDITWORTHINESS. MERE PAYM ENT BY ACCOUNT PAYEE CHEQUE IS NOT SACROSANCT NOR CAN IT M AKE A NON-GENUINE TRANSACTION GENUINE. FROM THE ABOVE IT IS CLEAR THAT THE APPELLANT HAS F AILED TO PROVE THE GENUINENESS AND THE CREDIT WORTHINESS OF THE CREDITORS. THEREFORE, THE ADDITION MADE BY THE A.O. AMOUNTING TO RS.86,87,739/- IS CONFIRMED AND THIS G ROUND OF APPEAL IS DISMISSED. 6. AGGRIEVED BY THE ORDER OF THE LD. CIT(APPEALS), THE ASSESSEE HAS PREFERRED THIS APPEAL BEFORE THE TRIBUNAL ON THE FO LLOWING GROUNDS:- (1) THAT THE ORDERS OF THE AO (ACIT, CIRCLE-53, KO LKATA), LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-7, KOL KATA ARE NOT BASED ON FACTS AND HENCE BAD IN LAW AND THE SAM E ORDERS MAY KINDLY BE QUASHED /SET ASIDE. (2) THAT THE ORDERS OF THE LD. CIT(A)-7, KOLKATA CO NFIRMING THE ADDITION OF RS.86,87,139/- BY THE AO DEEMING THE SA ME TO BE I.T.A. NO. 1299/KOL/2016 (ASSESSMENT YEAR: 2010-2011) SUJAUDDIN MOLLA 9 INCOME OF THE APPELLANT U/S 69 OF THE I.T. ACT IS N OT BASED ON FACTS AND HENCE BAD IN LAW. THE SAME MAY BE ORDERED TO BE DELETED AND THE FULL RELIEF MAY BE GRANTED TO THE A PPELLANT. (3) THAT THE CASH ADVANCES OF RS.74.90 LACS HELD TO BE CASH CREDIT, PRESUMABLY U/S 68 OF THE I.T. ACT, BY THE L D. CIT(A), MAY KINDLY BE ORDERED TO BE DELETED. 7. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE CLAIM OF THE ASSESSEE OF HAVING RECEIVED ADVANCES AGAINST SALE O F PROPERTY FROM THE CONCERNED SEVEN PARTIES WAS DULY SUPPORTED BY THE D OCUMENTARY EVIDENCE IN THE FORM OF SALE AGREEMENTS. HE CONTEND ED THAT FOUR OF THE SAID SEVEN PARTIES APPEARED BEFORE THE ASSESSING OF FICER DURING THE COURSE OF REMAND PROCEEDINGS AND CONFIRMED OF HAVIN G GIVEN THE ADVANCES TO THE ASSESSEE. HE CONTENDED THAT THE SOU RCE OF FUNDS UTILIZED BY THE ASSESSEE FOR GIVING LOAN TO M/S. WINNER GARM ENTS PVT. LIMITED THUS WAS DULY ESTABLISHED BY THE ASSESSEE ON EVIDENCE AN D THERE WAS NO REASON FOR THE AUTHORITIES BELOW TO REJECT THE SAME ON THE GROUND THAT CREDITWORTHINESS OF THE CONCERNED CREDITORS WAS NOT ESTABLISHED. RELYING ON THE DECISION OF THE HONBLE MADHYA PRADESH HIGH COURT IN THE CASE OF CIT VS.- METACHEM INDUSTRIES (245 ITR 160), HE CON TENDED THAT IF AT ALL THE CREDITWORTHINESS OF THE CONCERNED PARTIES WAS N OT ESTABLISHED AS HELD BY THE AUTHORITIES BELOW, THE ADDITION SHOULD HAVE BEEN MADE IN THE HANDS OF THE SAID PARTIES AND NOT IN THE HANDS OF T HE ASSESSEE. 8. THE LD. D.R., ON THE OTHER HAND, SUBMITTED THAT INVESTMENT IN THE FORM OF LOAN GIVEN TO M/S. WINNER GARMENTS PVT. LIM ITED WAS MADE BY THE ASSESSEE AS FOUND DURING THE COURSE OF SURVEY AND S INCE THE ASSESSEE FAILED TO EXPLAIN THE SOURCE OF FUNDS UTILIZED FOR MAKING THE SAID INVESTMENT, THE ADDITION UNDER SECTION 69 WAS RIGHT LY MADE TO THE TOTAL INCOME OF THE ASSESSEE BY TREATING THE SAID INVESTM ENT AS UNEXPLAINED. AS REGARDS THE CLAIM OF THE ASSESSEE OF HAVING RECEIVE D ADVANCES FROM SEVEN PARTIES AGAINST SALE OF PROPERTIES, THE LD. D.R. TO OK US THROUGH THE ADVERSE FINDINGS RECORDED BY THE ASSESSING OFFICER IN THE R EMAND REPORT AS WELL AS BY THE LD. CIT(APPEALS) IN HIS IMPUGNED ORDER IN RE SPECT OF EACH AND I.T.A. NO. 1299/KOL/2016 (ASSESSMENT YEAR: 2010-2011) SUJAUDDIN MOLLA 10 EVERY CREDITOR TO POINT OUT THAT THE GENUINENESS OF THE SAID ADVANCES AS WELL AS CREDITWORTHINESS OF THE CONCERNED PARTIES W AS NOT ESTABLISHED. HE CONTENDED THAT ALL THESE ADVANCES WERE RECEIVED BY THE ASSESSEE IN CASH AND NONE OF THE SEVEN PARTIES WAS FOUND TO BE HAVIN G A CAPACITY TO GIVE THE ADVANCES TO THE ASSESSEE AS CLAIMED. HE, THEREF ORE, STRONGLY SUPPORTED THE IMPUGNED ORDER OF THE LD. CIT(APPEALS ) CONFIRMING THE ADDITION MADE BY THE ASSESSING OFFICER UNDER SECTIO N 69 AND URGED THAT THE SAME DESERVES TO BE UPHELD. 9. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND ALS O PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. IT IS OBSERV ED THAT THE ASSESSEE WAS FOUND TO HAVE MADE AN INVESTMENT OF RS.86,87,139/- IN GIVING LOAN TO M/S. WINNER GARMENTS PVT. LIMITED DURING THE YEAR U NDER CONSIDERATION AND THIS FACT WAS REVEALED FROM THE BALANCE-SHEET O F M/S. WINNER GARMENTS PVT. LIMITED AS FOUND DURING THE COURSE OF SURVEY CARRIED OUT IN THE BUSINESS PREMISES OF THE ASSESSEE. SINCE THE SA ID LOAN GIVEN DURING THE YEAR UNDER CONSIDERATION WAS NOT DISCLOSED BY T HE ASSESSEE IN HIS PERSONAL FILE, THE ASSESSING OFFICER REQUIRED THE A SSESSEE TO EXPLAIN THE SOURCE OF FUNDS UTILIZED FOR GIVING THE SAID LOAN. THE ASSESSEE, HOWEVER, FAILED TO OFFER ANY EXPLANATION IN THIS REGARD DURI NG THE COURSE OF ASSESSMENT PROCEEDINGS AND ACCORDINGLY ADDITION OF RS.86,87,139/- WAS MADE BY THE ASSESSING OFFICER TO THE TOTAL INCOME O F THE ASSESSEE BY TREATING THE SAID LOAN AS UNEXPLAINED INVESTMENT OF THE ASSESSEE. DURING THE COURSE OF APPELLATE PROCEEDINGS, THE ASSESSEE C AME UP WITH HIS EXPLANATION THAT THE ADVANCES WERE RECEIVED BY HIM FROM SEVEN PARTIES AGAINST SALE OF PROPERTY AND THE SAME WERE UTILIZED FOR GIVING LOAN TO M/S. WINNER GARMENTS PVT. LIMITED. ALTHOUGH THIS EXPLANA TION OF THE ASSESSEE WAS SUPPORTED BY DOCUMENTARY EVIDENCE IN THE FORM O F SALE AGREEMENT, THERE WERE VARIOUS DISCREPANCIES AND ANOMALIES IN T HE CLAIM OF THE ASSESSEE AS FOUND BY THE ASSESSING OFFICER DURING T HE COURSE OF REMAND PROCEEDINGS AND AS SPECIFICALLY RECORDED BY THE LD. CIT(APPEALS) IN HIS IMPUGNED ORDER. DURING THE COURSE OF REMAND PROCEED INGS, ONLY FOUR OF THE SEVEN PARTIES APPEARED BEFORE THE ASSESSING OFF ICER FOR I.T.A. NO. 1299/KOL/2016 (ASSESSMENT YEAR: 2010-2011) SUJAUDDIN MOLLA 11 EXAMINATION/VERIFICATION AND AS FOUND BY THE ASSESS ING OFFICER, THEY WERE NOT HAVING CAPACITY OR CREDITWORTHINESS TO GIVE THE ADVANCES TO THE ASSESSEE IN CASH AS CLAIMED. IT IS OBSERVED THAT SP ECIFIC ADVERSE FINDINGS/OBSERVATIONS WERE RECORDED BY THE ASSESSIN G OFFICER IN THE REMAND REPORT AS WELL AS BY THE LD. CIT(APPEALS) IN HIS IMPUGNED ORDER TO DOUBT OR DISPUTE THE CLAIM MADE BY THE ASSESSEE OF HAVING RECEIVED THE ADVANCES IN QUESTION IN CASH FROM THE CONCERNED SEV EN PARTIES. AT THE TIME OF HEARING BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE HAS NOT BEEN ABLE TO BRING ANYTHING ON RECORD TO REBUT OR CONTRO VERT THESE ADVERSE FINDINGS RECORDED BY THE ASSESSING OFFICER AS WELL AS BY THE LD. CIT(APPEALS). HE HAS ONLY HARPED ON THE DOCUMENTARY EVIDENCE FILED BY THE ASSESSEE IN THE FORM OF SALE AGREEMENTS AND THE CONFIRMATIONS OF THE FOUR CREDITORS AS MADE BEFORE THE ASSESSING OFFICER DURING THE COURSE OF REMAND PROCEEDINGS. HOWEVER, AS ALREADY NOTED BY US , VARIOUS DISCREPANCIES AND ANOMALIES WERE POINTED OUT BY THE AUTHORITIES BELOW TO SHOW THAT THE DOCUMENTARY EVIDENCE FILED BY THE ASS ESSEE IN THE FORM OF SALE AGREEMENTS WAS AN AFTER-THOUGHT AND NOT RELIAB LE. EVEN THE CAPACITY OR CREDITWORTHINESS OF THE CONCERNED FOUR PARTIES A S FOUND BY THE AUTHORITIES BELOW CLEARLY CONTRADICTED THEIR CONFIR MATIONS OF HAVING GIVEN ADVANCES IN QUESTION TO THE ASSESSEE IN CASH. AS RE GARDS THE RELIANCE PLACED BY THE LD. COUNSEL FOR THE ASSEESSEE ON THE DECISION OF THE HONBLE MADHYA PRADESH HIGH COURT IN THE CASE OF METACHEM I NDUSTRIES (SUPRA), IT IS OBSERVED THAT THE ISSUE INVOLVED THEREIN WAS REL ATING TO THE ADDITION MADE UNDER SECTION 68 ON ACCOUNT OF UNEXPLAINED CAS H CREDIT WHILE THE ISSUE INVOLVED IN THE PRESENT CASE IS IN THE CONTEX T OF ADDITION MADE UNDER SECTION 69 ON ACCOUNT OF UNEXPLAINED INVESTME NT. AS PROVIDED SPECIFICALLY IN SECTION 69, WHERE THE ASSESSEE IS F OUND TO HAVE MADE INVESTMENT IN THE FINANCIAL YEAR IMMEDIATELY PRECED ING THE ASSESSMENT YEAR AND SUCH INVESTMENT IS NOT RECORDED IN THE BOO KS OF ACCOUNT AND THE ASSESSEE OFFERS NO EXPLANATION ABOUT THE NATURE AND SOURCE OF THE INVESTMENT OR THE EXPLANATION OFFERED BY HIM IS NOT , IN THE OPINION OF THE ASSESSING OFFICER SATISFACTORY, THE VALUE OF THE IN VESTMENTS IS DEEMED TO BE THE INCOME OF THE ASSESSEE OF SUCH FINANCIAL YEA R. IN THE PRESENT CASE, I.T.A. NO. 1299/KOL/2016 (ASSESSMENT YEAR: 2010-2011) SUJAUDDIN MOLLA 12 INVESTMENT IN THE FORM OF LOAN GIVEN TO M/S. WINNER GARMENTS PVT. LIMITED WAS FOUND TO BE MADE BY THE ASSESSEE IN THE FINANCIAL YEAR IMMEDIATELY PRECEDING THE ASSESSMENT YEAR UNDER CON SIDERATION AND SINCE THE SAID INVESTMENT WAS NOT RECORDED IN THE B OOKS OF ACCOUNT OF THE ASSESSEE AND THE EXPLANATION OFFERED BY HIM ABOUT T HE NATURE AND SOURCE OF THE SAID INVESTMENT WAS NOT FOUND TO BE SATISFAC TORY, WE ARE OF THE VIEW THAT THE ADDITION MADE BY THE ASSESSING OFFICE R UNDER SECTION 69 WAS FULLY JUSTIFIED AND THERE IS NO INFIRMITY IN TH E IMPUGNED ORDER OF THE LD. CIT(APPEALS) IN CONFIRMING THE SAME. WE, THEREF ORE, UPHOLD THE IMPUGNED ORDER OF THE LD. CIT(APPEALS) CONFIRMING T HE ADDITION MADE BY THE ASSESSING OFFICER UNDER SECTION 69 AND DISMISS THIS APPEAL OF THE ASSESSEE. 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DI SMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON MAY 29, 2019. SD/- SD/- (S.S. VISWANETHRA RAVI) (P.M. JAGTAP) JUDICIAL MEMBER VICE -PRESIDENT (KZ) KOLKATA, THE 29 TH DAY OF MAY, 2019 COPIES TO : (1) SHRI SUJAUDDIN MOLLA, CHANDANNAGAR, P.S. MAHESHTALA, KOLKATA-700 141 (2) ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-53, KOLKATA, AAYAKAR BHAWAN, DAKSHIN, 2, GARIAHAT ROAD, SOUTH, KOLKATA-700 068 (3) COMMISSIONER OF INCOME TAX (APPEALS)-7, KOLKAT A, (4) COMMISSIONER OF INCOME TAX- , (5) THE DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, KOLKATA BENCHES, KOLKATA LAHA/SR. P.S.