Smt. Anju Jain, New Delhi V. ITO, New Delhi

ITA 1499/DEL/2011

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 52805 (ITAT-DELHI)
• Duration Of Justice: 6 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-10-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 26-09-2011
• Assessment Year: 2007-2008
• Appeal Filed On: 25-03-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MRS ANUSHA KHURANA
• Keywords: Onus to prove
• Section: 133(6); 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH A DELHI BEFORE SHRI I.P. BANSAL AND SHRI K.G. BANSAL ITA NO. 1499(DEL)/2011 ASSESSMENT YEAR: 2007-08 MS. ANJU JAIN, INCOME-TAX OFFICER, PROP. G.C. JAIN ENTERPRISES, VS. WARD 21(1), NEW DELHI. 47, MAHADEV KUNJ, SECTOR-9, ROHINI, NEW DELHI. PAN: AACPJ3340C (APPELLANT) (RESPON DENT) APPELLANT BY : SHRI K.SAMPATH, ADVOCATE & SHRI RAJ KUMAR, ADVOCATE RESPONDENT BY: MRS. ANUSHA KHURANA, SR. DR DATE OF HEARING : 26.09.2011 DATE OF PRONOUNCEMENT: 07.10.2011. ORDER PER K.G. BANSAL : AM THE ONLY GROUND TAKEN BY THE ASSESSEE IN THIS APP EAL IS THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(APPEALS) ERRED IN CONFIRMING THE ADDITION OF RS. 33,12,8 25/- ON ACCOUNT OF SUNDRY CREDITORS. 2. BRIEFLY, THE FACTS ARE THAT THE RETURN WAS FI LED ON 29.10.2007 DECLARING TOTAL INCOME OF RS. 1,20,330/-. THIS RETU RN WAS PROCESSED U/S 143(1) ON 20.09.2008. THEREAFTER, THE CASE WAS PICKED UP FOR SCRUTINY ITA NO. 1499(DEL)/2011 2 BY ISSUING NOTICE U/S 143(2) ON 245.09.2008 T HROUGH SPEED POST. IN THE COURSE OF HEARING, IT WAS FOUND THAT THE ASSESS EE SHOWED SUNDRY CREDITORS AGGREGATING TO RS. 33,12,875/-. THE A SSESSEE DID NOT FILE CONFIRMATION FROM THE CREDITORS. THEREFORE, IT W AS HELD THAT THE BALANCES REMAINED UNVERIFIED AND UNEXPLAINED. ACCORDINGL Y, THE ADDITION OF RS. 33,12,875/- HAS BEEN MADE BY INVOKING THE PROVISION CONTAINED IN SECTION 68. THE DETAILS OF THE SUNDRY CREDITORS ARE AS UNDER:- S. NO. PARTICULARS AMOUNT (RS.) 1. ARUN CHEMICALS 2,00,495/- 2. ACME CHEMICALS & MINERALS 1,02,012/- 3. AHUJA ENTERPRISES 39,000/- 4. DURGA MINERALS 2,84,603/- 5. FAIR DEAL CHEMICALS CO. 87,514.36 6. GUPTA CHEMICALS 8,112/- 7. KRISHNA ENTERPRISES 76,324/- 8. KRISHNA PACKING IND. 1,49,161/- 9. OM SALES 1,62,200/- 10. SAGAR COMPUTER & SOLUTION 3,950/- ITA NO. 1499(DEL)/2011 3 11. SIPER INDIA RUBBER WORKS 27,000/- 12. SONA INDUSTRIES 1,800/- 13. S.K. JAIN ENTERPRISES 14,25,703/- 14. SHIVAM TRADING CO. 5,23,601/- 15. STANDARD TRADING CORP. (REGD.) 2,21,400/- TOTAL: 33,12,875.36 2.1 BEFORE THE LD. CIT(APPEALS), ADDITIONAL EVID ENCE BY WAY OF CONFIRMATION WAS FILED. HE ALSO FOUND DEFECTS IN THE CONFIRMATION, NAMELY, THAT SIX OF THEM ARE UNSIGNED AND THE REMAINING DO NOT CONTAIN PAN OR COMPLETE ADDRESS. THE AO WAS DIRECTED TO MAKE ENQUIRY ABOUT GENUINENESS OF THE CREDITORS, WHO IN TURN REQUESTE D THE ASSESSEE TO FURNISH DETAILS IN TERMS OF COMPLETE ADDRESS. HOWEVER, THE ASSESSEE DID NOT RESPOND TO THIS LETTER. THEREAFTER, HE ISSUED N OTICES U/S 133(6) TO TWO CREDITORS, WHOSE ADDRESSES WERE AVAILABLE ON THE CONFIRMATION LETTERS. THE NOTICE IN THE CASE OF TULSI DASS AHUJA WAS RETUR NED BY THE POSTAL AUTHORITIES WITH THE REMARKS NO SUCH PERSON AT T HIS ADDRESS. IN THE CASE OF M/S SUPER INDIA RUBBER WORKS, THE NOTICE WA S SERVED BUT NO REPLY WAS RECEIVED. THE LD. CIT(APPEALS) CONSIDERED TH E FACTS OF THE CASE. HE ITA NO. 1499(DEL)/2011 4 ALSO CAME TO THE CONCLUSION THAT THE CREDITS REM AINED UNPROVED U/S 68 OF THE ACT. THEREFORE, THE APPEAL OF THE ASSESSEE HAS BEEN DISMISSED. THE FINDINGS OF THE LD. CIT(APPEALS) ARE REPRODUCED A S UNDER:- I HAVE VERIFIED THESE CONFIRMATIONS. IN THE CA SE OF M/S ARUN CHEMICALS, THE XEROX COPY OF THE SAME CONFIRMATI ON FILED ON 11.10.2010 ALSO A XEROX COPY- IS FILED AGAIN, WITH NO ADDRESSOR PAN THEREIN. THE COUNSEL OF THE APPEL LANT, VIDE HIS FORWARDING LETTER, HAS PROVIDED AN ADDRSS O F SHASTRI PARK, INDERLOK, DELHI, AND A MOBILE NUMBER. FOR M/ S ACME CHEMICALS, XEROX COPY OF THE SAME UNSIGNED CONFIRM ATION IS FILED, WITH SEPARATELY PROVIDED ADDRESS OF GALI NO. 1, SAMIPUR, DELHI AND A MOBILE NUMBER. FOR SHRI TU LSI DAS AHUJA, THE SAME ADDRESS IS PROVIDED, AT WHICH TH E POSTAL DEPARTMENT HAS REPORTED NO SUCH PERSON. FOR SHRI RAM NIWAS, AN ADDRESS IS PROVIDED OF LIBASPUR ROAD, SAMIPUR, DELHI, AS PER THE FORWARDING LETTER, BUT THE X EROX COPY OF THE SAME CONFIRMATION, WITH PAN ALREADY VERIFIED B Y THE ASSESSING OFFICER, AND FOUND TO BE NO SUCH PERSO N AT THIS ADDRESS. SIMILAR IS THE CASE WITH ALL THE REMAI NING CREDITORS. NOT A SINGLE CONFIRMATION HAS BEEN FILED WITH SI GNATURE, ADDRESS AND PAN. EVEN IF IT IS ACCEPTED THAT T HE APPELLANT COULD NOT OBTAIN THE CONFIRMATIONS BEFORE THE AS SESSMENT WAS COMPLETED ON 29.12.2009, OVER A YEAR HAS PASSED SINCE THEN. THE APPELLANT TOOK TILL 11.10.2010 TO FILE THE CON FIRMATIONS WHICH WERE FORWARDED TO THE ASSESSING OFFICER. A FTER RECEIPT OF THE REMAND REPORT, WITH THE ADVERSE FINDINGS, ON 16.11.2010, THE APPELLANT SOUGHT ADJOURNMENT AFT ER ADJOURNMENT, AND AFTER BEING REFUSED THE LAST ADJOURNMENT, HAS AGAIN SUBMITTED THE SAME UNSIGNED/INCOMPL ETE CONFIRMATIONS. IT SHOULD BE RECALLED THAT THE APPE LLANT DID NOT COOPERATE IN THE REMAND PROCEEDINGS ALSO, FAILING TO APPEAR BEFORE THE ASSESSING OFFICER. THE PURPOSE OF PROV IDING MOBILE NUMBERS, INSTEAD OF CONFIRMATIONS OF THE CREDITOR S, IS NOT QUITE UNDERSTOOD. WHETHER THE APPELLANT REQUIRES THE APPELLATE AUTHORITY TO DISCHARGE THE APPELLANTS ONUS? EVEN AT THIS ITA NO. 1499(DEL)/2011 5 LATE STAGE, THE APPELLANT HAS NOT EXERTED HERSEL F TO OBTAIN CREDIBLE EVIDENCE. SHE HAS PROVIDED TELEPHONE NUMBERS OF 8 CREDITORS, PAN OF 5 CREDITORS, AND INCOMPLETE A DDRESSES OF 12 CREDITORS. NONE OF THESE DETAILS ARE CONFIRMED BY THE CREDITORS THEMSELVES. I AM CONSTRAINED TO HOLD THAT THE APPELLANT HAS SHOWN NO SERIOUSNESS IN PURSUING THIS APPEAL, AND HAS FAILED TO DISCHARGE THE ONUS OF PROVING THE GENUINENESS OF THE SUNDRY CREDITORS. THE ADDITION OF RS. 33,12,875/- IS ACCORDINGLY UPHELD. GROUND OF APPEA L NO. 1 IS DISMISSED. 3. BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE SUB MITS THAT THE CREDIT BALANCES ARE IN RESPECT OF PURCHASE OF GOODS. THE AO HAS NOT REJECTED THE BOOKS OF ACCOUNT OR DISTURBED THE TRADING ACCOU NT. HE HAS ADDED THE BALANCES IN THE ACCOUNT TO THE INCOME OF THE ASSE SSEE. IT IS FAIRLY STATED THAT THERE HAS BEEN DELAY IN COMPLIANCE BEFORE THE AO BOTH IN THE COURSE OF ORIGINAL ASSESSMENT AND THE REMAND PROCEEDINGS. HOWEVER, THE CREDITS ARE GENUINE AND THE MAJOR CREDIT OF RS. 14,25,7 03/- IN CASE OF S.K. JAIN ENTERPRISES PERTAINS TO THE BROTHER-IN-LAW OF THE ASSESSEE. IN THESE CIRCUMSTANCES, IT IS REQUESTED THAT ONE MORE OPP ORTUNITY MAY BE GRANTED TO THE ASSESSEE TO FILE CONFIRMED ACCOUNTS BEFORE T HE AO. IT IS UNDERTAKEN THAT THE ASSESSEE SHALL NOT DELAY THE MATTER ANY FURTHER AND PRODUCE SATISFACTORY EXPLANATION U/S 68 BEFORE HIM. ON TH E OTHER HAND, THE LD. SR. DR SUBMITTS THAT SUFFICIENT OPPORTUNITIES HAVE B EEN GIVEN BY THE AO IN THE COURSE OF ASSESSMENT AND REMAND PROCEEDINGS, W HICH HAVE NOT BEEN ITA NO. 1499(DEL)/2011 6 AVAILED OF BY THE ASSESSEE. SHE REFERRED TO THE UNSATISFACTORY NATURE OF THE CONTENTS OF CONFIRMATION LETTER AND ARGUED THAT T HE ASSESSEE FAILED TO DISCHARGE THE BURDEN CAST ON HER U/S 68. THEREF ORE, IT IS URGED THAT THE FINDINGS OF THE LOWER AUTHORITIES MAY BE CONFIRMED . 4. WE HAVE CONSIDERED THE FACTS OF THE CASE AND SUBMISSIONS MADE BEFORE US. THE ADDITION IS IN RESPECT OF SUNDRY CREDITORS AND THE BALANCES IN THEIR ACCOUNTS HAVE BEEN ADDED TO THE INCOM E. THERE IS NO DETAILED DISCUSSION WHETHER THERE HAVE BEEN PAYMENTS BY TH E ASSESSEE TO THE CREDITORS IN THE COURSE OF THE YEAR, WHICH COULD HAVE LED TO RECORDING SOME FINDING ON THEIR EXISTENCE ETC. AT THE SAME TIME, IT IS ALSO THE ADMITTED FACT THAT PROPER EXPLANATION COULD NOT BE FURNISHED BEFORE THE LOWER AUTHORITIES BY THE ASSESSEE. IN THESE CIRC UMSTANCES, WE THINK IT FIT TO RESTORE THE MATTER TO THE FILE OF THE AO FOR GRANTI NG ONE MORE OPPORTUNITY TO THE ASSESSEE TO PROVE THE GENUINENESS OF THE CRE DITS. IT MAY BE MENTIONED THAT THE BURDEN TO PROVE THE GENUINENESS U/S 6 8 IS ON THE ASSESSEE, WHICH CAN ONLY BE DISCHARGED BY FILING PROPER EVIDENCE. THEREFORE, THE ASSESSEE IS DIRECTED TO FILE ALL EVIDENCE IN HER POSSES SION AND NOT TO SEEK ADJOURNMENT IN FRESH PROCEEDINGS BEFORE THE AO. W ITH THESE REMARKS, THE ITA NO. 1499(DEL)/2011 7 MATTER IS RESTORED TO THE FILE OF THE AO TO HEAR THE ASSESSEE AGAIN AND DECIDE THE GROUND AS PER LAW. 5. IN THE RESULT, THE APPEAL IS TREATED AS ALLOWE D FOR STATISTICAL PURPOSES. SD/- SD/- (I.P. BANSAL) (K.G.BANSAL) JUDICIAL MEMBER ACCOUNTANT MEMBER SP SATIA COPY OF THE ORDER FORWARDED TO:- MS. ANJU JAIN, PROP. GC JAIN ENTERPRISES, NEW DEL HI. ITO, WARD 21, NEW DELHI. CIT(A) CIT THE DR, ITAT, NEW DELHI. ASSISTANT REGISTRAR.