INCOME TAX OFFICER ,WARD-1(1), BILASPUR(CG) V. M/S WALRAJ SERVICE CENTRE, BILASPUR(CG)

ITA 150/BIL/2011

• Counselvise Citation: 15024714 RSA 2011
• Duration Of Justice: 3 year(s) 6 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-12-2014
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2005-2006
• Appeal Filed On: 30-06-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: B LAHARI
• Assessee Lawyers: SUNIL KUMAR AGRAWAL CA
• Keywords: Unexplained cash credit; Unexplained investment; Reassessment proceedings
• Section: 147; 68; 69; 148; 154; 142(1)

Judgement Text

INCOME TAX APPELLATE TRIBUNAL,BENCH -RAIPUR . .. . . .. . , ,, , , ,, , . .. . . .. . BEFORE S/SH.H.L.KARWA,PRESIDENT AN D RAJENDRA,ACCOUNTANT MEMBER ./ ././ ./ ITA NOS.150-51/BLPR/2011- ' ' ' ' # # # #/ // / ASSESSMENT YEARS-2005-06 &2006-07 INCOME TAX OFFICER, WARD 1(1) BILASPUR. $' % V/S. M/S.WALRAJ SERVICE CENTER, LINK ROAD,BILASPUR PAN: AAAFW5576D ( &' / // / APPELLANT ) ( ()&' / RESPONDENT ) REVENUE BY : SH.B. LAHARI, SR. DR ASSESSEE BY : SH.SUNIL KUMAR AGRAWAL, CA ' * + , - / DATE OF HEARING : 17-12-2014 ./# + , - /DATE OF PRONOUNCEMENT : 31-12-201 4 '% '% '% '% , 1961 1961 1961 1961+ + + + 254 254 254 254( (( (1 11 1) )) ) ,8, ,8, ,8, ,8, 9: 9: 9: 9: ORDER U/S.254(1)OF THE INCOME-TAX ACT,1961(ACT) PER RAJENDRA,AM - -- - 9< 9< 9< 9<, ,, , ' ' ' ' : CHALLENGING THE ORDERS DTD.31.03.2011 OF THE CIT(A) ,RAIPUR,THE ASSESSING OFFICER(AO) HAS RAISED ALMOST SIMILAR GROUNDS OF APPEAL FOR THE ABO VE REFERRED TWO ASSESSMENT YEARS(AY.S.). ONLY DIFFERENCE IN THE GROUNDS IS ABOUT THE AMOUNTS INVOLVED.FIRST WE WILL TAKE THE APPEAL FOR THE AY.2005-06. ITA NOS.150/BLPR/2011-AY.2005-06 : 1(A)THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE, THE LEARNED CIT (A) ERRED IN LAW AND IN FACT IN ALLOWING THE RELIEF OF RS.35,58,006/ - BY DELETING THE ADDITION MADE BY THE U/S 69 OF THE ACT BY HOLDING THAT THE ADDITION MADE BY THE A.O. IS ON MERE SUSPICIONS. (B)THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE EARNED CIT (A) ERRED IN LAW AND IN FACT IN ALLOWING THE ABOVE RELIEF BY IGNORING TH E DETAILED REMAND REPORT DATED 30.11.2010 SUBMITTED BY THE A.O. TO THE C.I.T.(A) AS ON 01.12. 2010 ON REQUISITION BY THE C.I.T(A) VIDE LETTER DATED 23.11.2010. (C)THAT IN THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LEARNED CIT (A) ERRED IN LAW AND IN FACT IN ALLOWING THE ABOVE RELIEF WITH A WRONG O BSERVATION (PARA-1.I OF THE APPELLATE ORDER) THAT NOTICE U/S 143(2) WAS ISSUED FOR THE FIRST TI ME ON 31.07.2008 WHICH TOO WAS NOT ACCOMPANIED BY ANY QUERY LETTER. THE APPELLANT COMP LIED WITH THIS NOTICE. THEREAFTER TILL LAST WEEK OF DECEMBER,2008 THE MATTER WAS ALLOWED TO BE SLEPT OVER AND ON 24.12.2008 NOTICE U/S 142(1) WITH VARIOUS QUERIES, WAS SERVED AND IN COMP LIANCE, THE APPELLANT PRODUCED.BUT THE ACTUAL FACT IS THAT THE ASSESSEE/APPELLANT HAS NOT COMPLIED WITH THE NOTICE U/S 143(2) DATED 31.07.2008 AND NOTICE U/S 142(1) ALONG WITH THE QUE RIES HAS WELL BEEN ISSUED BY THE A.O. AS ON 13.10.2008 AND IN THE COMPLIANCE AS ON 20.10.200 8 THE ASSESSEE/APPELLANT HAS PREFERRED ADJOURNMENT, AGAIN ON 30.10.2008 THE ASSESSEE HAS P REFERRED AN ADJOURNMENT, AGAIN ON 12.11.2008 THE ASSESSEE REQUESTED FOR ADJOURNMENT A ND ON 19.11.2008 THE ASSESSEE HAS NOT EVEN PREFERRED TO ATTEND BEFORE THE A.O. (D)THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LEARNED CIT (A) ERRED IN LAW AND IN FACT IN ALLOWING THE ABOVE RELIEF IN SPITE O F THE FACTS ON RECORD THAT THE ASSESSEE HAS NOT QUESTIONED THE VALIDITY OF THE ISSUE OF NOTICE U/S 148 BEFORE THE COMMENCEMENT OF THE RE- ASSESSMENT PROCEEDINGS (RELIANCE IS PLACED ON JUDGM ENT MADE BY THE APEX COURT IN THE CASE OF GKN DRIVESHAFTS (INDIA) LTD VS. I.T.O. (2002) 12 5 TAXMAN 963(S.C.)] AND THE SAME HAS BEEN RAISED 1 ST TIME BEFORE THE C.I.T.(A) WHO HAS ENTERTAINED TH E SAME WITHOUT EVEN GOING THROUGH THE SUBMISSIONS MADE BY THE A.O. THROUGH HI S REPORT. (E)THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LEARNED CIT (A) ERRED IN LAW ITA/150-51/BLPR/2011,AY.05-06&06-07-WSC 2 AND IN FACT IN ALLOWING THE ABOVE RELIEF IN SPITE O F THE FACTS ON RECORD THAT THE ASSESSEE FIRM HAD NOT DISCLOSED BANK ACCOUNT HAVING WITH BANK OF INDIA, BRANCH-VAYAPAR VIHAR, BILASPUR VIDE A/C NO.- CD-231 IN THE RETURN OF INCOME AND TO TAL TURNOVER IN THIS ACCOUNT RELEVANT FOR THE A.Y.2005-06 WORKED OUT TO RS. 1,03,14,576/- AND MAXIMUM CREDIT BALANCE I.E. PEAK-CREDIT IN THE RELEVANT ASSESSMENT YEAR IS RS. 36,58,006/-. (F) THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE, THE LEARNED CIT (A) ERRED IN LAW AND IN FACT IN ALLOWING THE ABOVE RELIEF AND COMPLETELY IGNORED THE METICULOUS FINDINGS OF THE A.O. THAT ONE OF THE PARTNERS OF THE FIRM MOHD.ARIF HAS SIGNED THE ACCOUNT OPENING FORM WHILE OPENING THE SAID ACCOUNT IN THE NAME OF THE ASSESSE E FIRM. 2.(A)THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED CIT (A) HAS ERRED IN LAW AND ON FACTS IN ALLOWING THE RELIEF OF RS. 85,0 00/-BY DELETING THE ADDITIONS MADE BY THE A.O. U/S 68 OF THE ACT. (B)THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LEARNED CIT(A) HAS EARED IN LAW AND FACTS IN ALLOWING THE RELIEF IN SPITE OF THE FA CTS ON RECORDS THAT THE A.O. HAS ALLOWED AMPLE OPPORTUNITY TO THE ASSESSEE TO PRODUCE THE UNSECURE D CREDITORS NAMELY M/S.AGARWAL METADOR AND SUPER CONSTURCTION AND FOR PERSONAL VERIFICATIO N AND THE ASSESSEE HAS FAILED TO PRODUCE THE SAME. THEREFORE, THE ONUS LIES ON THE ASSESSEE TO EXPLAIN THE IDENTITY, CREDITWORTHINESS AS WELL AS GENUINENESS OF THE UNSECURED CREDITORS WHIC H THE FIRM FAILED TO DO SO. FURTHER, THE AFFIDAVITS SWORN IN BY THE UNSECURED CREDITORS ARE ONLY SELF SERVING STATEMENTS AND THE OTHER IMPORTANT INGREDIENTS I.E. CREDITWORTHINESS OF THE CREDITORS HAVE NOT BEEN PROVED. 3.THAT THE LD. CIT (A)S ORDER BEING ERRONEOUS, PER VERSE AND CONTRARY TO THE FACTS ON RECORD, THE SAME MAY BE REVERSED WHILE THAT OF THE A.O. BE RESTORED. 4.THAT THE APPELLANT ASSESSING OFFICER RESERVES THE RIGHT TO AMEND, MODIFY OR ADD ANY OF THE GROUNDS OF APPEAL PREFERRED. ITA NOS.151/BLPR/2011-AY.2006-07 : 1(A)THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE, THE LEARNED CIT (A) ERRED IN LAW AND IN FACT IN ALLOWING THE RELIEF OF RS. 17,86,000 /- BY DELETING THE ADDITION MADE BY THE U/S 69 OF THE ACT BY HOLDING THAT THE ADDITION MADE BY THE A.O. IS ON MERE SUSPICIONS. (B)THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE EARNED CIT (A) ERRED IN LAW AND IN FACT IN ALLOWING THE ABOVE RELIEF BY IGNORING TH E DETAILED REMAND REPORT DATED 30.11.2010 SUBMITTED BY THE A.O. TO THE C.I.T.(A) AS ON 01.12. 2010 ON REQUISITION BY THE C.I.T(A) VIDE LETTER DATED 23.11.2010. (C)THAT IN THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LEARNED CIT (A) ERRED IN LAW AND IN FACT IN ALLOWING THE ABOVE RELIEF WITH A WRONG O BSERVATION (PARA-1.I OF THE APPELLATE ORDER) THAT NOTICE U/S 143(2) WAS ISSUED FOR THE FIRST TI ME ON 31.07.2008 WHICH TOO WAS NOT ACCOMPANIED BY ANY QUERY LETTER. THE APPELLANT COMP LIED WITH THIS NOTICE. THEREAFTER TILL LAST WEEK OF DECEMBER,2008 THE MATTER WAS ALLOWED TO BE SLEPT OVER AND ON 24.12.2008 NOTICE U/S 142(1) WITH VARIOUS QUERIES, WAS SERVED AND IN COMP LIANCE, THE APPELLANT PRODUCED.BUT THE ACTUAL FACT IS THAT THE ASSESSEE/APPELLANT HAS NOT COMPLIED WITH THE NOTICE U/S 143(2) DATED 31.07.2008 AND NOTICE U/S 142(1) ALONG WITH THE QUE RIES HAS WELL BEEN ISSUED BY THE A.O. AS ON 13.10.2008 AND IN THE COMPLIANCE AS ON 20.10.200 8 THE ASSESSEE/APPELLANT HAS PREFERRED ADJOURNMENT, AGAIN ON 30.10.2008 THE ASSESSEE HAS P REFERRED AN ADJOURNMENT, AGAIN ON 12.11.2008 THE ASSESSEE REQUESTED FOR ADJOURNMENT A ND ON 19.11.2008 THE ASSESSEE HAS NOT EVEN PREFERRED TO ATTEND BEFORE THE A.O. (D)THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LEARNED CIT (A) ERRED IN LAW AND IN FACT IN ALLOWING THE ABOVE RELIEF IN SPITE O F THE FACTS ON RECORD THAT THE ASSESSEE HAS NOT QUESTIONED THE VALIDITY OF THE ISSUE OF NOTICE U/S 148 BEFORE THE COMMENCEMENT OF THE RE- ASSESSMENT PROCEEDINGS (RELIANCE IS PLACED ON JUDGM ENT MADE BY THE APEX COURT IN THE CASE OF GKN DRIVESHAFTS (INDIA) LTD VS. I.T.O. (2002) 12 5 TAXMAN 963(S.C.)] AND THE SAME HAS BEEN RAISED 1ST TIME BEFORE THE C.I.T.(A) WHO HAS E NTERTAINED THE SAME WITHOUT EVEN GOING THROUGH THE SUBMISSIONS MADE BY THE A.O. THROUGH HI S REPORT. (E)THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LEARNED CIT (A) ERRED IN LAW AND IN FACT IN ALLOWING THE ABOVE RELIEF IN SPITE O F THE FACTS ON RECORD THAT THE ASSESSEE FIRM HAD NOT DISCLOSED BANK ACCOUNT HAVING WITH BANK OF INDIA, BRANCH-VAYAPAR VIHAR, BILASPUR ITA/150-51/BLPR/2011,AY.05-06&06-07-WSC 3 VIDE A/C NO.- CD-231 IN THE RETURN OF INCOME AND TO TAL TURNOVER IN THIS ACCOUNT RELEVANT FOR THE A.Y.2005-06 WORKED OUT TO RS. 1,28,43,320/- AND MAXIMUM CREDIT BALANCE I.E. PEAK-CREDIT IN THE RELEVANT ASSESSMENT YEAR IS RS. 17,86,000/-. (F) THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE, THE LEARNED CIT (A) ERRED IN LAW AND IN FACT IN ALLOWING THE ABOVE RELIEF AND COMPLETELY IGNORED THE METICULOUS FINDINGS OF THE A.O. THAT ONE OF THE PARTNERS OF THE FIRM MOHD. ARIF HAS SIGNED THE ACCOUNT OPENING FORM WHILE OPENING THE SAID ACCOUNT IN THE NAME OF THE ASSESSE E FIRM. 2.(A)THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED CIT (A) HAS ERRED IN LAW AND ON FACTS IN ALLOWING THE RELIEF OF RS. 8,98 ,807/-BY DELETING THE ADDITIONS MADE BY THE A.O. U/S 68 OF THE ACT. (B)THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LEARNED CIT(A) HAS EARED IN LAW AND FACTS IN ALLOWING THE RELIEF IN SPITE OF THE FA CTS ON RECORDS THAT THE A.O. HAS ALLOWED AMPLE OPPORTUNITY TO THE ASSESSEE TO PRODUCE THE UNSECURE D CREDITORS NAMELY MOHD. IRFAN, SHRI PRADEEP GUPTA AND FOR PERSONAL VERIFICATION AND THE ASSESSEE HAS FAILED TO PRODUCE THE SAME. THEREFORE, THE ONUS LIES ON THE ASSESSEE TO EXPLAIN THE IDENTITY, CREDITWORTHINESS AS WELL AS GENUINENESS OF THE UNSECURED CREDITORS WHICH THE FI RM FAILED TO DO SO. FURTHER, THE AFFIDAVITS SWORN IN BY THE UNSECURED CREDITORS ARE ONLY SELF S ERVING STATEMENTS AND THE OTHER IMPORTANT INGREDIENTS I.E. CREDITWORTHINESS OF THE CREDITORS HAVE NOT BEEN PROVED. 3.THAT THE LD. CIT (A)S ORDER BEING ERRONEOUS, PER VERSE AND CONTRARY TO THE FACTS ON RECORD, THE SAME MAY BE REVERSED WHILE THAT OF THE A.O. BE RESTORED. 4.THAT THE APPELLANT ASSESSING OFFICER RESERVES THE RIGHT TO AMEND, MODIFY OR ADD ANY OF THE GROUNDS OF APPEAL PREFERRED. DURING THE COURSE OF HEARING BEFORE US,THE DEPARTME NTAL REPRESENTATIVE(DR)TOOK THE PRELIMN -ARY OBJECTION WITH REGARD TO NON-CONSIDERATION OF THE REMAND REPORT BY THE FIRST APPELLATE AUTHORITY(FAA).HE STATED THAT THE AO HAD SUBMITTED THE REPORT AS PER THE DIRECTION OF THE FAA,BUT HE DID NOT CONSIDER IT WHILE DECIDING THE A PPEAL.THE AUTHORISED REPRESENTATIVE (AR)CONCEDED THAT THE REPORT WAS NOT CONSIDERED BY THE FAA. ASSESSEE-FIRM,DRIVING INCOME FROM TRADING IN PETROL EUM,DIESEL AND LUBRICANTS,FILED ITS RETURN OF INCOME ON 26.10.2005,DECLARING TOTAL INCOME OF R S12,380/-.THE AO COMPLETED THE ASSESSMENT,U/S.143(3)R.W.S.147OF THE ACT,DETERMININ G HIS INCOME AT RS.37,81,360/-.REASSESS MENT PROCEEDINGS WERE INITIATED BY THE AO AFTER RE CEIVING INFORMATION ABOUT A BANK ACCOUNT. BRIEF FACTS: 2. ON 29-11-07,ASSESSMENTS FOR BOTH THE YEARS WERE RE- OPENED BY ISSUING NOTICES U/S.148 OF THE ACT.VIDE ITS REPLY DATED 24-12-07,THE ASSESSEE REQUESTED THE AO TO ACCEPT THE ORIGINAL RETURNS FILED ON 26-10-05 AND 31-10-06 FOR AY.05-06 AND 06-07 RESPECTIVELY IN RESPONSE REASSESSMENT-NOTICES.THEREAFTER,A NOTICE U/S143(2) WAS ISSUED ON 31-7-08 AND QUESTIONNAIRE U/S.42(1)WAS ISSUED ON 13-10-08.ON 24-12-08, NOTICE U/S142(1) WITH VARIOUS QUERIES WAS ISSUED.AS PER THE ASSESSEE NOTHING WAS ASKED ABOUT A BANK ACCOUNT (I.E., BANK OF INDIA, BILASPUR CD-231).ON 29-12-08, THE AO SHOWED THE ABO VE REFERRED BANK ACCOUNT APPEARING IN THE NAME OF WALRAJ SERVICE CENTRE TO THE ASSESSEE -FIRM AND ASKED TO EXPLAIN THE TRANSACTIONS APPEARING IN IT.ON 30-12-08, THE REASSESSMENT ORDER U/S 147 WAS PASSED BY THE AO FOR BOTH THE AYS, BY MAKING ADDITION OF RS.36,58,006 IN AY.0 5-06 AND RS.17,86,000 IN THE AY06-07 U/S.69 BEING TREATED AS UNEXPLAINED INVESTMENT MADE IN THE UNDISCLOSED BANK ACCOUNT MAINTAINED BY THE ASSESSEE-FIRM.THE AO WAS OF THE O PINION THAT THE IMPUGNED ACCOUNT WAS OPERATED AND MAINTAINED BY THE ASSESSEE-FIRM.MEANWH ILE,REASSESSMENT PROCEEDINGS WERE ALSO INITIATED IN THE CASE OF MOHD.ARIF,ONE OF THE PARTN ERS OF THE FIRM,FOR THE SAME AMOUNTS FOR THE SAME AY.S.THE AO MADE THE SUBSTANTIVE ADDITIONS IN THE HANDS OF THE ASSESSEE-FIRM AND MADE PROTECTIVE ASSESSMENT IN THE HANDS OF MOHD.ARI F. 2.1. AGGRIEVED BY THE ORDER OF THE AO,THE ASSESSEE PREFE RRED AN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY(FAA).BEFORE HIM IT WAS SUBMITTE D THAT THE IMPUGNED BANK ACCOUNT DID ITA/150-51/BLPR/2011,AY.05-06&06-07-WSC 4 NOT BELONG TO THE FIRM.HE CALLED FOR A REMAND REPOR T FROM THE AO,BUT DID NOT CONSIDER IT WHILE ADJUDICATING THE APPEAL,AS STATED EARLIER.HOW EVE,AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE AND THE ASSESSMENT ORDER OF THE FIRM A ND MOHD.ARIF,HE HELD THAT THE BANK ACCOUNT DID NOT BELONG TO THE ASSESSEE,THAT MOHD.AR IF HAD OPENED THE ACCOUNT IN HIS PERSONAL CAPACITY,THAT HE HAD SHOWN THE INCOME FROM THE SAID ACCOUNT IN HIS RETURNS OF INCOME FOR THE RESPECTIVE YEARS,THAT THE ADDITION MADE BY THE AO I N THE HANDS OF THE ASSESSEE-FIRM WAS NOT SUSTAINABLE IN LIGHT OF THE RETURNS FILED BY MOHD.A RIF FOR THE IMPUGNED BANK ACCOUNTS. 2.2. BEFORE US,THE DR ARGUED THAT THE FAA HAD CALLED FOR THE REMAND REPORT AND SAME WAS SUBMITTED BY THE AO WITHIN SEVEN DAYS,THAT HE DID N OT CONSIDER IT,THAT AMOUNT APPEARING IN THE BANK ACCOUNT HAD TO ASSESSED IN ONE OF THE HAND S EITHER IN THE HANDS OF THE FIRM OR THE PARTNER.THE AR CONTENDED THAT THERE WAS NO JUSTIFI CATION FOR MAKING ADDITION IN THE HANDS OF THE FIRM,THAT IT HAD NOT OPENED THE ACCOUNT OR OPER ATED IT,THAT MOHD.ARIF HAD ADMITTED TO HAVE OPENED THE ACCOUNT. 2.3. WE HAVE CONSIDERED THE MATERIAL AVAILABLE ON RECORD .WE FIND THAT THE FAA HAD CALLED FOR A REMAND REPORT(RR)FROM THE AO VIDE HIS LETTER DATE D 23.11.2010.THE AO HAD SENT THE RR TO THE FAA ON 30.11.2010.VIDE HIS LETTER F.NO.ITO/W D.1.(1)/BSP/10-11/.IT APPEARS THAT THE FAA HAD FORWARDED THE COPY OF THE RR TO THE ASSESS EE ON 29.03.2011(PG.NO.25 OF THE PAPER BOOK) AND DIRECTED THE ASSESSEE TO PRODUCE CERTAIN DETAILS AND REPLY BY 31.03.2011.THE FAA DECIDED THE APPEALS OF THE ASSESSEE-FIRM ON 31.03.2 011.WE HAVE PERUSED THE 15 PAGE ORDER OF THE FAA,BUT WE DO NOT FIND ANY MENTION OF THE RR IN IT.ONCE HE HAD CALLED FOR THE RR AND HAD RECEIVED IT WITHIN 8 DAYS,IT WAS HIS DUTY TO TA KE NOTE OF THE REPORT WHILE ADJUDICATING THE APPEAL.IT IS NOT KNOWN THAT WHY HE DID NOT CALL FOR COMMENTS OF THE ASSESSEE TILL 29. 03. 2011,THOUGH THE RR WAS SENT BY THE AO ON 30.11.2010 .FROM THE MONTH OF DECEMBER,2010 TILL 29.03.2011,THE FAA KEPT THE RR WITH HIMSELF AN D SUDDENLY HE DIRECTED THE ASSESSEE TO FILE COMMENTS BY 31.03.2011.WE DO NOT KNOW AS TO WH ETHER THE ASSESSEE HAD FILED ANY COMMENTS OR NOT BEFORE THE FAA WITH REGARD TO THE R R.WITHOUT WAITING FOR THE REPLY OF THE ASSESSEE AND WITHOUT REFERRING TO THE RR THE FAA PA SSED THE ORDER ON 31. 03. 2011WE ARE OF THE OPINION THAT ONCE THE REPORT WAS CALLED FOR THE FAA SHOULD HAVE DISCUSSED IT WHILE DECIDING THE APPEAL.IN THESE CIRCUMSTANCES,WE ARE O F THE OPINION THAT THE GRIEVANCE OF THE AO IS JUSTIFIED ABOUT NON CONSIDERATION OF RR.THEREFOR E,IN THE INTEREST OF JUSTICE,WE SET ASIDE THE ORDER OF THE FAA AND REMAND THE MATTER TO THE FILE OF THE FAA FOR FRESH ADJUDICATION.HE IS DIRECTED TO DECIDE THE MATTER AFRESH AFTER GIVING R EASONABLE OPPORTUNITY OF HEARING TO BOTH THE PARTIES.APPEAL FILED BY THE AO IS ALLOWED FOR STATI STICAL PURPOSES. 3. NEXT GROUND IS ABOUT ADDITION MADE BY THE ASSESSING OFFICER (AO) U/S. 68 OF THE ACT. DURING THE ASSESSMENT PROCEEDINGS, THE AO FOUND THA T THE ASSESSEE HAD SHOWN FRESH UNSECURED LOANS FROM THE TWO PERSONS DURING THE YEA R UNDER CONSIDERATION NAMELY AGARWAL METADOR 25,000/- AND SUPER CONSTRUCTION (60,000/-). HE DIRECTED THE ASSESSEE TO EXPLAIN THE CASH CREDIT AND TO PRODUCE THE CREDITORS FOR PERSON AL EXAMINATION AND VERIFICATION. AS PER THE AO,THE ASSESSEE DID NOT PRODUCE THE CREDITORS OR FU RNISH ANY AUTHENTIC EVIDENCE TO PROVE THE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE T RANSACTION. AS A RESULT, HE MADE AN ADDITION OF RS.85,000/- TO THE INCOME OF THE ASSESSEE U/D 68 OF THE ACT. 3.1. AGGRIEVED BY THE ORDER OF THE AO THE ASSESSEE PREFE RRED AN APPEAL BEFORE THE FAA.IT WAS SUBMITTED THAT IT HAD FURNISHED ALL THE DETAILS ABO UT THE CREDITORS,THAT IT HAD DISCHARGED THE BURDEN OF PROVING ALL THE THREE INGREDIENTS OF SECT ION 68 OF THE ACT.AFTER CONSIDERING THE ASSESSMENT ORDER AND SUBMISSION OF THE ASSESSEE,THE FAA HELD THAT CONFIRMATION LETTERS WERE UNSECURED LOAN CREDITORS WERE FURNISHED,THAT ALL TH E TRANSACTIONS WERE ROUTED THROUGH BANK CHANNELS,THAT COPY OF RELEVANT BANK ACCOUNT WERE FI LED DURING THE ASSESSMENT PROCEEDINGS, THAT THE ADDRESSES OF THE UNSECURED LOAN CREDITORS WERE ALSO FURNISHED,THAT THE ASSESSEE HAD DISCHARGED THE INITIAL BURDEN CAST UPON IT, THAT EV IDENCES WERE PRODUCED IN RESPONSE TO THE ITA/150-51/BLPR/2011,AY.05-06&06-07-WSC 5 NOTICE U/S 142(1),THAT NONE OF THEM PROVED FALSE, T HAT NO PROPER AND MEANINGFUL OPPORTUNITY WAS AFFORDED TO THE ASSESSEE FOR PRODUCTION OF UNSE CURED LOAN CREDITORS, THAT THE AO WAS RUNNING AGAINST TIME DUE TO FAST APPROACH LIMITATIO N FOR COMPLETION OF THE IMPUGNED ASSESSMENT BY 31.12.2008, THAT HE CHOSE A SHORT-CUT METHOD AND ADDED AMOUNT OF UNSECURED LOAN CREDITORS ON THE PRETEXT THAT THEY WERE NOT PR ODUCE BEFORE HIM, THAT THE COPIES OF THE AFFIDAVITS SWORN IN BY THE UNSECURED LOAN CREDITORS ,CONFIRMING THE SUM ADVANCED BY THE TO THE ASSESSEE TOGETHER WITH THEIR SOURCE FOR MAKING THE ADVANCES, WERE SUBMITTED,THAT AO HAD WRONGLY INVOKED THE PROVISIONS OF SECTION 68 FOR BR INGING THE GENUINE TRANSACTIONS WITHIN THE AMBIT BY THE DEEMING PROVISIONS.FINALLY, HE HELD TH AT AO HAD BROUGHT NOTHING ON RECORD TO PROVE THAT THE CLAIM MADE BY THE ASSESSEE WAS FACTU ALLY INCORRECT, THAT ADDITIONS MADE BY HIM WERE UNSUSTAINABLE ON FACTS AND IN LAW. 3.2. BEFORE US, THE DEPARTMENTAL REPRESENTATIVE(DR)SUPPO RTED THE ORDER OF THE AO.THE AUTHORISED REPRESENTATIVE(AR)STATED THAT ALL THE NE CESSARY DOCUMENTARY EVIDENCES WERE PRODUCE BEFORE THE AO THAT AO DID NOT MAKE ANY ENQU IRY AFTER RECEIVING THE DOCUMENTS FROM THE ASSESSEE. 3.3. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL BEFORE US. WE FIND THAT THE AO HAS MADE AN ADDITION OF RS.85,000/- (25,000/-+60 ,000/-) U/S. 68 OF THE ACT ON ACCOUNT OF UNEXPLAINED CASH CREDITS FROM TWO PARTIES,THAT AS P ER THE AO THE CREDITORS WERE NOT PRODUCED BEFORE HIM,THAT THE FAA HAD GIVEN A CATEGORICAL FIN DING OF FACT THAT CONFIRMATION,BANK ACCOUNTS AND THE AFFIDAVITS OF THE CREDITORS WERE F URNISHED DURING THE COURSE OF ASSESSMENT PROCEEDINGS.IF THE FACTS MENTIONED BY THE FAA WERE INCORRECT,THE AO WOULD HAVE MOVED AN APPLICATION U/S 154 OF THE ACT BEFORE THE FAA TO AS SERT THAT DOCUMENTARY EVIDENCES WERE NOT FILED BEFORE HIM. IN THESE CIRCUMSTANCES,WE ARE OF THE OPINION THAT STAND TAKEN BY THE FAA, WHO,AFTER GOING THROUGH THE RECORDS HAD GIVEN A FIN DING OF FACT,HAS TO BE UPHELD.IN OUR OPINION,ONCE THE ASSESSEE FILES DOCUMENTARY EVIDENC ES ABOUT THE CREDITORS THE BURDEN OF PROVING THEM NOT GENIUNE SHIFTS TO THE AO AND HE HA S TO PROVE THAT THE DOCUMENTS FURNISHED BY THE ASSESSEE WERE FACTUALLY INCORRECT. IN THE CA SE UNDER CONSIDERATION THE AO HAS NOT MADE ANY ENQUIRY ABOUT THE CRESITORS AND JUST MADE THE A DDITION.THEREFORE,WE ARE OF THE OPINION THAT THE ORDER OF THE FAA DOES NOT SUFFER FROM ANY LEGAL OR FACTUAL INFIRMITY. UPHOLDING HIS ORDER,WE DECIDE GROUND NO.2 AGAINST THE AO. ITA/151/BLPR/2011-AY.2006-07: 4. FACTS AND CIRCUMSTANCES OF THE CASE FOR THE YEAR UN DER CONSIDERATION ARE IDENTICAL TO THE FACTS OF THE EARLIER AY.FOLLOWING OUR ORDER FOR AY. 2005-06,WE SET ASIDE THE ORDER OF THE FAA FOR THE YEAR UNDER CONSIDERATION ALSO.HE SHOULD DECIDE THE APPEAL AFRESH,AS PER THE DIRECTIONS ISSUED BY US FOR THE EARLIER YEAR.GROUND NO.1 IS DECIDED IN FAVOUR OF THE AO FOR STATISTICAL PURPOSES. 4.1. AS THE FACTS AND CIRCUMSTANCES WITH REGARD TO GROUN D NO.2 ARE SAME AS THAT OF THE EARLIER YEAR,EXCEPT FOR THE AMOUNT INVOLVED,SO,WE DECIDE IT AGAINST THE AO,FOLLOWING OUR ORDER FOR THE AY.2005-06. AS A RESULT, APPEALS FILED BY THE AO FOR BOTH THE A Y.S.STAND ALLOWED,IN PART. =,> ' ?,- - @ 9/'A ' #B 9 C + 8D E :,> %F + , GH. ORDER PRONOUNCED IN THE OPEN COURT ON 31 ST ,DECEMBER,2014. 9: + ./# %E 31 I9$ , 2014 / + 8* . SD/- SD/- (H.L.KARWA/ . .. . . .. . ) ( / RAJENDRA) PRESIDENT/ 9< 9< 9< 9< /ACCOUNTANT MEMBER ITA/150-51/BLPR/2011,AY.05-06&06-07-WSC 6 /. I9' DATE: 31.12.2014 9: 9: 9: 9: + ++ + (,J (,J (,J (,J KJ#, KJ#, KJ#, KJ#, / COPY OF THE ORDER FORWARDED TO : 1. APPELLANT / &' 2. RESPONDENT / ()&' 3. THE CONCERNED CIT(A)/ $L M , 4. THE CONCERNED CIT / $L M 5. DR ITAT,RAIPUR BENCH/ JN 8 (,' , . . . , 6. GUARD FILE/ 8 = * . ) J, (, //TRUE COPY// 9: ' / BY ORDER, O / G DY./ASST. REGISTRAR , /ITAT, RAIPUR