Shirdi Sai Developers, Bangalore V. ACIT, Bangalore

ITA 150/BANG/2010

• Counselvise Citation: [2011] 135 COUNSELVISE.COM (IT) 1627 (ITAT-BANGALORE)
• Duration Of Justice: 11 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-01-2011
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 11-01-2011
• Assessment Year: 2002-2003
• Appeal Filed On: 09-02-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: MEERA SRIVASTAV
• Assessee Lawyers: H N KHINCHA
• Keywords: Unexplained cash credit; Difference of opinion
• Section: 143(3); 153A; 234B; 68

Judgement Text

PAGE 1 OF 6 ITA NO.150/BANG/2010 1 IN THE INCOME TAX APPELLATE TRIBUNAL, BANGALORE BENCH B BEFORE SHRI GEORGE GEORGE K., J.M. AND SHRI A MOHAN ALANKAMONY, A.M. ITA NO. 15 0/BANG/2010 (ASST. YEAR 200 2 - 0 3 ) SHIRDI SAI DEVELOPERS, NO.77, 3 RD CROSS, NANDIDURGA EXTENSION, OPP. JANATA BAZAR, BANGALORE. - APPELLANT VS THE ASST. COMMISSIONER OF INCOME - TAX, CENTRAL CIRCLE - 2(3), BANGALORE. - RESPONDENT APPELLANT BY : SHRI H N KHINCHA, C.A. RESPONDENT BY : SMT. MEERA SRIVASTAV, JCIT O R D E R PER GEORGE GEORGE K : THIS APPEAL , PREFERRED BY THE ASSESSE E , IS DIRECTED AGAINST THE CIT(A) - V I 'S ORDER DATED 15 . 1 .20 10 . THE RELEVANT ASSESSMENT YEAR IS 200 2 - 0 3 . 2. GROUND NO.1 AND 6 ARE GENERAL IN NATURE AND NO SPECIFIC ADJUDICATION IS CALLED FOR AND HENCE, THE SAME ARE DISMISSED. 3. GROUND NO.5 IS REGARDING LEVY OF INTEREST U/S 234A, 234B AND 234C OF THE I T ACT. PAGE 2 OF 6 ITA NO.150/BANG/2010 2 3.1 THE LEVY OF INTEREST U/S 234A, 234B AND 234C IS MANDATORY AND CONSEQUENTIAL IN NATURE. HENCE, THIS GROUND IS DISMISSED. 4. THE OTHER GROUNDS, NAMELY, GROUND NOS .2, 3 AND 4 RELATES TO THE ISSUE OF ADDITION OF A SUM OF RS.9,66,288/ - AS UNEXPLAINED CASH CREDIT U/S 68 OF THE I T ACT. 5. BRIEFLY STATED THE FACTS ARE AS FOLLOWS: - THE ASSESSEE IS A PARTNERSHIP FIRM. IT IS ENGAGED IN THE BUSINESS OF LAND DEVELOPMENT AND CONSTRUCTION. FOR THE CONCERNED ASST. YEAR, IN RESPONSE TO THE NOTICE U/S 153A R.W.S. 153C, RETURN OF INCOME WAS FILED ON 9.4.2008 DECLARING A TOTAL INCOME OF RS.58,12,831/ - . THE ASSESSMENT WAS COMPLETED U/S 143(3) R.W.S. 153C OF THE ACT ON 29.12.20 08 DETERMINING THE TOTAL INCOME AT RS.67,79,120/ - . THE INCOME WAS INCREASED BECAUSE OF THE ADDITION OF AN AMOUNT OF RS.9,66,288/ - , AS DUE TO SMT. JAYASHREE SHETTY UNDER THE HEAD SUNDRY CREDITORS . THE RELEVANT FINDING OF THE AO READS AS FOLLOWS: - THE B ALANCE SHEET OF THE ASSESSEE AS AT 31.3.2002 REFLECTS A SUM OF RS.9,66,288/ - FROM SMT. JAYASHREE SHETTY, UNDER THE HEAD SUNDRY CREDITORS. THE ASSESSEE WAS REQUESTED TO FURNISH CONFIRMATION OF THE ABOVE LOAN FROM THE CREDITOR. HOWEVER, DESPITE SEVERAL OPP ORTUNITIES ALLOWED TO HIM, THE ASSESSEE HAS NOT FURNISHED CONFIRMATION IN RESPECT OF THE ABOVE LOAN. SINCE THE ASSESSEE HAS NOT BEEN ABLE TO DISCHARGE HIS PRIMARY OBLIGATION OF FURNISHING CONFIRMATION OF THE ABOVE LOAN, THE SUM OF RS.9,66,288/ - IS TREATED AS PAGE 3 OF 6 ITA NO.150/BANG/2010 3 UNPROVED LIABILITY AND THE SAME IS ADDED AS INCOME . 6. THE ASSESSEE, BEING AGGRIEVED BY THE ADDITION OF RS.9,66,288/ - , FILED APPEAL BEFORE THE FIRST APPELLATE AUTHORITY. 7. IT WAS CONTENDED BEFORE THE FIRST APPELLATE AUTHORITY THAT THE LOAN AMOUNT OUTSTANDING IN THE BOOKS OF THE FIRM WAS NOT A NEW LOAN TAKEN BY THE FIRM BUT RATHER WAS A LIABILITY TRANSFERRED FROM ANOTHER FIRM. SHRI N T SAGAR, WHO IS A PARTNER OF THE FIRM M/S SHIRDI SAI DEVELOPERS (ASSESSEE FIRM) WAS ALSO A PARTNER OF M/S BOMBAY LA ND DEVELOPERS ALONG WITH JAYASHREE SHETTY AND PREM SUVARNA, ALL HAVING EQUAL SHARE (COPY OF THE DEED ENCLOSED). THE FIRM M/S BOMBAY LAND DEVELOPERS WAS DISSOLVED. AS ON THE LAST DAY OF CLOSURE OF THE FIRM, THE BALANCE SHEET OF M/S BOMBAY LAND DEVELOPERS REFLECTED THE FOLLOWING CAPITAL BALANCES OF THE 3 PARTNERS: - 1. N T SAGAR RS.13,09,025/ - 2. PREM SUVARNA RS.NIL 3. JAYASHREE SHETTY RS.9,66,288/ - IT WAS ORALLY AGREED UPON BY ALL THE PARTNERS THAT SRI N T SAGAR WOULD TAKE UP THE ASSETS/LIABILITIES OF THE FIRM AND WOULD PAY OFF JAYASHREE SHETTY S CAPITAL BALANCE. IT WAS CONTENDED THAT THIS IS NOT A NEW LOAN (NOT A NEW TAX CREDIT) TAKEN BY THE ASSESSEE. IT WAS SUBMITTED THAT T HE PARTY IS IDENTIFIABLE , B UT DUE TO DIFFERENCE OF OPINION , THE CONFIRMAT ION COULD NOT BE OBTAINED. PAGE 4 OF 6 ITA NO.150/BANG/2010 4 8. THE CIT(A), HOWEVER, REJECTED THE CONTENTIONS OF THE ASSESSEE AND DISMISSED THE APPEAL. THE CIT(A) WAS OF THE VIEW THAT IT IS THE BURDEN OF THE ASSESSEE TO PROVE THE CREDIT APPEARING IN IT S BOOKS OF ACCOUNTS AND H AVING FAIL ED TO FURNISH , THE CONFIRMATION LETTER FROM THE CREDITOR , HAS FAILED TO DISCHARGE THE PRIMARY ONUS THAT LA Y ON HIM. 9. THE ASSESSEE, BEING AGGRIEVED, IS IN APPEAL BEFORE US. 10. THE LEARNED AR REITERATED THE SUBMISSIONS MADE BEFORE THE INCOME TAX AUT HORITIES . 11. THE LEARNED DR, ON THE OTHER HAND, SUPPORTED THE FINDING/CONCLUSION OF THE CIT(A). 12. WE HAVE HEARD THE RIVAL SUBMISSION AND PERUSED THE MATERIAL ON RECORD. IT IS NECESSARY FOR THE ASSESSEE TO PROVE PRIMA FACIE THE TRANSACTION WHICH R ESULTS IN A CASH CREDIT IN HIS BOOKS OF ACCOUNT. SUCH PROOF INCLUDES PROOF OF THE IDENTITY OF HIS CREDITOR, THE CAPACITY OF SUCH CREDITOR TO ADVANCE THE MONEY AND, LASTLY, THE GENUINENESS OF THE TRANSACTION. THESE THINGS MUST BE PROVED PRIMA FACIE BY THE ASSESSEE AND ONLY AFTER THE ASSESSEE HAS ADDUCED EVIDENCE TO ESTABLISH PRIMA FACIE THE AFORESAID, THE ONUS SHIFTS ON THE PAGE 5 OF 6 ITA NO.150/BANG/2010 5 DEPARTMENT. MERELY ESTABLISHING THE IDENTITY OF THE CREDITOR IS NOT ENOUGH. THE ABOVE VIEW IS SUPPORTED BY THE FOLLOWING DECISIONS: - SS M A UNNEERI KUTTY V CIT (1992) 198 ITR 147, 150 (KER.), SPECIAL LEAVE PETITION DISMISSED BY THE SUPREME COURT: (1993) 201 ITR (ST.) 23 (SC); SS CIT V PRECISION FINANCE PVT. LTD. (1994) 208 ITR 465, 470 (CAL.) THE ASSESSEE HAS ASSERTED THAT THE SUNDRY CRED ITOR IS AT LOGGERHEAD WITH THE ASSESSEE AND HENCE, HAS NOT GIVEN THE CONFIRMATION LETTER. THE ASSESSEE IN SUCH CIRCUMSTANCES OUGHT TO HAVE GIVEN COMPLETE DETAILS OF THE SUNDRY CREDITORS AND SHOULD HAVE SPECIFICALLY REQUESTED THE AO TO ISSUE SUMMONS TO THE SUNDRY CREDITORS FOR EXAMINATION. WE FIND NO SUCH ATTEMPT HAS BEEN MADE BY THE ASSESSEE IN THIS CASE. THEREFORE, HIS PLEA THAT HE IS UN ABLE TO DO THE IMPOSSIBILITY IN FURNISHING THE CONFIRMATION LETTER IS WITHOUT ANY SUBSTANCE. IN THE LIGHT THE ABOVE SAID REASONS, WE FIND THERE IS NO INFIRMITY IN THE IMPUGNED ORDERS OF THE INCOME TAX AUTHORITIES AND ACCORDINGLY, WE SUSTAIN THE ADDITION U/S 68 OF THE ACT. 13. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS DISMISSED. THE ORDER PRONOUNCED ON THURS DAY , THE 13 TH DAY OF JANUARY , 201 1 AT BANGALORE. SD/ - SD/ - (A MOHAN ALANKAMONY) (GEORGE GEORGE K) ACCOUNTANT MEMBER JUDICIAL MEMBER PAGE 6 OF 6 ITA NO.150/BANG/2010 6 COPY TO : 1) THE ASSESSEE (2) THE REVENUE (3) THE CIT(A) CONCERNED. (4) THE CIT CO NCERNED. (5) THE DR (6) GUARD FILE. (7) GUARD FILE, NEW DELHI. MSP/ 12 . 1. BY ORDER ASST. REGISTRAR, ITAT, BANGALORE.