Income Tax Officer, Ward-10(2), Hyderabad V. M/s. Laxmi Logistics, Secunderabad

ITA 1447/HYD/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 77985 (ITAT-HYDERABAD)
• Duration Of Justice: 8 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-07-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2005-2006
• Appeal Filed On: 31-10-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: LAXMINIWAS SHAR MA
• Keywords: Unexplained cash credit

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES B : HYDERABAD BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER AND SMT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER ITA.NO.1447/HYD/2013 ASSESSMENT YEAR 2005-06 INCOME TAX OFFICER WARD 10 (2) HYDERABAD. VS. M/S. LAXMI LOGISTICS SECUNDERABAD PAN AACL-0867-C (APPELLANT) (RESPONDENT) FOR REVENUE MR. SOLGY JOSE T. KOTTARAM FOR ASSESSEE MR. LAXMINIWAS SHARMA DATE OF HEARING 30.06.2014 DATE OF PRONOUNCEMENT 04.07.2014 ORDER PER B. RAMAKOTAIAH, A.M. THIS APPEAL BY REVENUE IS DIRECTED AGAINST THE ORDER OF THE CIT(A)-VI, HYDERABAD DATED 29.07.2013. THE ONLY ISSUE INVOLVED IN THIS APPEAL IS ON THE ADDITION OF UNSECURED LOAN CREDITORS TREATED AS UNEXPLAINED CREDITS ON WH ICH LD. CIT(A) GAVE PARTIAL RELIEF. REVENUE HAS RAISED THE FOLLOWING THREE GROUNDS : 1. WHETHER THE CIT(A) WAS CORRECT IN FACT AND IN LAW IN ACCEPTING THE CONTENTION OF THE ASSESSEE FIRM VIS- -VIS SOME OF THE LOAN CREDITORS, WHEN IT APPEARS THAT TH EY WERE ONLY MAKE BELIEVE, BEING FROM FAR-OFF PLACES, AND THAT THE ASSESSEE HAD NOT DISCHARGED ITS PRIMARY ON US OF PRODUCING THEM BEFORE THE A.O. 2. WHETHER THE CIT(A) WAS CORRECT IN FACT AND IN LAW I N ACCEPTING THE CONTENTION OF THE ASSESSEE FIRM THAT ITS CREDITS WERE FROM LOANS TAKEN FROM PEOPLE WHEREAS T HE 2 ITA. NO. 1447/HYD/2013 M/S. LAXMI LOGISTICS, SECUNDERABAD SURROUNDING CIRCUMSTANCES AND PROBABILITY WOULD NOT APPEAR TO SUPPORT ITS CONTENTION. 3. WHETHER THE CIT(A) WAS CORRECT IN FACT AND IN LAW I N ACCEPTING THE CONTENTION OF THE ASSESSEE FIRM WITHO UT CALLING FOR FURTHER VERIFICATION (OR REMAND REPORT) TO ESTABLISH THE GENUINENESS OR OTHERWISE OF THE LOAN CREDITORS, BY ISSUE OF COMMISSION AS THAT WAS THE P LEA TAKEN BY THE ASSESSEE. 2. BRIEFLY STATED, ASSESSEE FIRM IS ENGAGED IN THE BUSINESS OF DISTRIBUTION OF HOUSE HOLD GOODS AND FI LED RETURN OF INCOME ADMITTING RS.1,58,857/- FOR THE YEAR UNDER R EFERENCE. WHILE SCRUTINIZING THE CASE, A.O. NOTICED THAT ASSE SSEE OBTAINED UNSECURED LOANS OUTSTANDING AS ON 31.03.20 05 TO AN EXTENT OF RS.1,45,59,022/-. OUT OF THIS, A.O. PICKE D-UP FEW CREDITORS WHO ARE AGRICULTURISTS HAILING FROM RAJAS THAN AND ASKED THE ASSESSEE TO PRODUCE THE SAID CREDITORS BE FORE HIM ALONG WITH INFORMATION RELATED TO (1) IDENTITY PROO F (2) CREDITWORTHINESS AND (3) GENUINENESS OF THE TRANSAC TION. DUE TO DISTANCE INVOLVED IN PRODUCING THE CREDITORS ASS ESSEE FURNISHED CONFIRMATION LETTERS FROM THE PARTIES ALO NG WITH IDENTITY PROOF IN THE FORM OF ELECTION CARD/HOUSE H OLD CARDS AND COPY OF THE PAHANIES OWNING THE LAND. HOWEVER, A.O. OBSERVED THAT ASSESSEE FAILED TO PRODUCE THE PARTIE S FOR EXAMINATION. HE ALSO NOTICED THAT IN 5 CASES SIGNAT URES IN THE CONFIRMATION FURNISHED BY THE ASSESSEE ARE DIFFEREN T FROM THE CONFIRMATIONS OBTAINED DIRECTLY BY THE A.O. ACCORDI NGLY, HE WAS OF THE OPINION THAT ASSESSEE DID NOT PROVE THE CREDITS AND ABOUT 21 CREDITS STANDING IN THE NAME OF DIFFERENT PARTIES TO THE EXTENT OF RS.15,21,000/- WERE TREATED AS UNSECU RED CASH CREDITS. 3 ITA. NO. 1447/HYD/2013 M/S. LAXMI LOGISTICS, SECUNDERABAD 3. BEFORE THE LD. CIT(A), IT WAS SUBMITTED THAT ASSESSEE COULD NOT PRODUCE THE PARTIES AS DIRECTED BY THE A.O. AS THEY ARE AVAILABLE IN FAR OFF PLACE AND SHORT TI ME GIVEN. MOREOVER, IT WAS ALSO POINTED OUT TO THE LD. CIT(A) THAT ASSESSEE DID FURNISH VARIOUS CONFIRMATION LETTERS A ND CLARIFIED THE OBSERVATIONS OF THE A.O. IN DETAIL AS EXTRACTED BY LD. CIT(A) IN PARA 5.1 AND 5.2 IN HIS ORDER. THEREAFTER, LD. C IT(A) ANALYSED THE CONFIRMATIONS FILED BEFORE THE A.O. AN D CATEGORISED THEM INTO THREE CREDITS I.E., (1) ACCEP TING IN CASH BUT WITHOUT PAN, (2) CREDITS NOT SUPPORTED BY CONFI RMATION LETTERS AND (3) CREDITS NOT SUPPORTED BY THE SOURCE OF INCOME. THUS, THESE THREE TYPES OF CREDITS TO AN EXTENT OF RS.2,79,000/- WERE CONFIRMED BY LD. CIT(A) AS NOT GENUINE. ASSESS EE IS NOT IN APPEAL ON THE ABOVE THREE TYPES OF CREDITS CONFIRME D. WITH RESPECT TO BALANCE OF CREDITS, THE LD. CIT(A) EXAMI NED AND ACCEPTED THEM AS GENUINE AND DIRECTED THE A.O. TO D ELETE THE SAME. THE REVENUE IS IN APPEAL ON THE ABOVE. 4. AFTER CONSIDERING THE RIVAL CONTENTIONS AND PERUSING THE DETAILS ON RECORD, WE DO NOT SEE ANY R EASON TO INTERFERE WITH THE WELL REASONED ORDER OF THE LD. C IT(A). LD. CIT(A) HAS UNDERTAKEN TO ANALYSE ALL CREDITS AND CO NFIRMED THOSE CREDITS WHICH A.O. HAS EXPRESSED CERTAIN DOUB TS. WHEREVER ASSESSEE COULD FURNISH CREDITWORTHINESS AN D CONFIRMATIONS HE HAS ACCEPTED THEM. THE ORDERS OF L D. CIT(A) ARE ACCORDING TO THE FACTS AVAILABLE ON RECORD. THE REVENUE GROUNDS PARTICULARLY ARE NOT WITH REFERENCE TO CRED ITS AS SUCH BY THE PROCEDURE ADOPTED BY THE LD. CIT(A). LD. CIT (A) HAS CO- TERMINUS POWERS WITH THAT OF A.O. AND HE UNDERTOOK THE VERIFICATION. WE DO NOT FIND ANY REASON TO INTERFER E WITH THE ORDER OF THE LD. CIT(A). THERE IS ALSO NO NEED FOR ANY REMAND REPORT WHEN ALL THE FACTS WERE PLACED BEFORE THE A. O. IN THE 4 ITA. NO. 1447/HYD/2013 M/S. LAXMI LOGISTICS, SECUNDERABAD ASSESSMENT PROCEEDINGS ITSELF. MOREOVER, ASSESSEE A LSO EXPRESSED HIS INABILITY TO FURNISH THE CREDITORS BE FORE THE A.O. NOT ONLY DUE TO DISTANCE INVOLVED BUT ALSO SHORT TI ME PROVIDED BY THE A.O. ON THE FACTS AND CIRCUMSTANCES OF THE C ASE, WE CONFIRM THE ORDER OF THE LD. CIT(A). REVENUE GROUND S ARE DISMISSED. 5. IN THE RESULT, APPEAL OF REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 04.07.2014. SD/- SD/- (ASHA VIJAYARAGHAVAN) (B.RAMAKOTAIAH) JUDICIAL MEMBER ACCOUNTANT MEMBER HYDERABAD, DATED 04 TH JULY, 2014 VBP/- COPY TO 1. INCOME TAX OFFICER, WARD 10(2), ROOM NO.514, BLO CK A, 5 TH FLOOR, IT TOWERS, AC GUARDS, HYDERABAD. 2. M/S. LAXMI LOGISTICS, SURVEY NO.133, PLASSEY LAN E, BOWENPALLY, SECUNDERABAD. 3. CIT(A)-VI, HYDERABAD 4. CIT-V, HYDERABAD 7. D.R. B BENCH, ITAT, HYDERABAD.