M/s Das Cold Storage (P) Ldt., Agra V. A.C.I.T., Central Cirle, Agra

ITA 153/AGR/2013

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 6370 (ITAT-AGRA)
• Duration Of Justice: 3 year(s) 10 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-04-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 04-08-2014
• Assessment Year: 2005-2006
• Appeal Filed On: 13-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Gift; Additional evidence
• Section: 133(6); 68; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AGRA (SMC) BENCH: AGRA BEFORE S HRI A. D. JAIN, JUDICIAL MEMBER I.T.A NO. 1 53 /AGRA/201 3 (ASSESSMENT YEAR - 20 0 5 - 06 ) DAS COLD STORAGE PVT. LTD., D - 15, KAMLA NAGAR, AGRA. PAN NO. AAACD5670N (ASSESSEE) V S .. A CIT - CENTRAL CIRCLE , AGRA. (R EVENUE ) ASSESSEE BY SHRI ANURAG SINHA, AR REVENUE BY SHRI WASEEM ARSHAD, SR.DR. ORDER THIS IS ASSESSEES APPEAL FOR ASSESSMENT YEAR 2005 - 06 AGAINST THE CONFIRMATION OF ADDITION OF RS.11 LACS U/S 68 OF THE INCOME TAX ACT ON ACCOUNT OF UNEXPLAINED UNSECURED LOAN AND INTEREST THEREON, AMOUNTING TO RS.1.32 LACS TOTAL AMOUNTING TO RS.12.32 LACS. 2. I HAVE HEARD BOTH TH E PARTIES AND HAVE PERUSED THE RELEVANT MATERIAL ON RECORD. THE AO MADE THE ADDITION VIDE ORDER DATED 31.12.2007, PASSED U/S 144 OF THE INCOME TAX ACT . T HE ADDITION FOR UNSECURED LOAN AND ESTIMATED INTEREST ON SUCH LOAN HAS BEEN MADE BY THE AO BECAUSE DURI NG THE ASSESSMENT PROCEEDING, THE DATE OF HEARING 11 .0 1 .2017 DATE OF PRONOUNCEMENT 05 . 0 4 .2017 I.T.A NO. 153/AGRA/2013 2 ASSESSEE HAS NOT FURNISHED ANY EVIDENCE TO ESTABLISH THE IDENTITY OF THE CREDITOR GIVING THEIR NAMES & ADDRESS, TERMS OF LOANS AND ITS REPAYMENT AND COPY OF BANK STATEMENT EXPLAINING THE SOURCE OF GIVING OF LOAN. THE AO HA S ALSO RELIED ON A DECISION OF HON'BLE SUPREME COURT IN CASE OF CIT VS. DURGA PRASAD MORE 82 ITR 540 WHEREIN THE HON'BLE SUPREME COURT CLEARLY HELD THAT MERE FILING OF CONFIRMATION IS NOT SUFFICIENT TO PROVE THE GENUINENESS OF LOANS OR GIFTS. SINCE NO DETA ILS OF LOANS WAS FILED BY THE ASSESSEE , THE AO HAS ALSO ESTIMATED THE INTEREST ON SUCH LOAN @ 12% COMPUTING THE INTEREST AMOUNT OF RS. 1,32,000 / - . THUS, THE TOTAL AMOUNT OF RS.12,32,000 / - COMPRISING OF UNSECURED LOAN OF RS.11 LAC AND INTEREST THEREON OF RS .1,32,000/ - HAS BEEN ADDED IN THE INCOME OF THE ASSESSEE U/S.68. 3. BEFORE THE LD. CIT(A) THE ASSESSEE FILED ADDITIONAL EVIDENCE IN THE FORM OF CONFIRMATION LETTERS OF BOTH TRUSTS, COPY OF BANK ACCOUNT OF BOTH TRUSTS SHOWING THE ISSUANCE OF CHEQUES AND COPIES OF THEIR INCOME TAX RETURNS. THE LD. CIT(A) ADMITTED THIS ADDITIONAL EVIDENCE AFTER CONSIDERING THE AOS OBJECTION. 4. THE LD. CIT(A), AS NOTED IN PARA 7.4 OF THE IMPUGNED ORDER, ASKED THE AO TO MAKE INQUIRIES. THE AO REPORTED (IMPUGNED ORDER, PAGE 18 - 19, PARA 7.5) AS UNDER: THE NOTICES U/S. 133(6) WERE SENT TO M/S. BHAGWATI TRUST, 33/81, ADARSH NAGAR, AJMER ROAD, AGRA A ND M/S. BASANT/TRUST, 33/81, ADARSH NAGAR, AJMER ROAD, AGRA TO FURNISH THE COPY OF I.T.A NO. 153/AGRA/2013 3 INCOME TAX RETURN ALONG WITH ENCLOSURES FOR A. Y. 2005 - 06, DETAILS OF TRUSTEES, BENEFICIARIES AND SETTLERS OF TRUST, COPY OF BANK ACCOUNT FROM WHICH LOAN WAS GIVEN TO M/S.DA SS COLD STORAGE (P) LTD. FOR THE PERIOD 01.04.2004 TO 31.03.2005, SOURCE OF LOAN, COPY OF TRUST DEED AND COPY OF ACCOUNT OF M/S.DASS COLD STORAGE (P) LTD., D - 15, KAMLA NAGAR, AGRA FOR F.Y. 2004 - 05. THE DATE OF COMPLIANCE WAS FIXED 29.02.2012. IN COMPLIANCE TO WHICH LETTERS OF THE TRUSTEE OF BOTH THE TRUSTS HAVE BEEN RECEIVED BY POST REQUESTING FOR GRANT EXTENSION OF TIME FOR AT LEAST 15 DAYS FOR FURNISHING THE REQUIRED INFORMATION. THE INSPECTOR POSTED IN THIS CIRCLE WAS ALSO DIRECTED TO FIND OUT THE EXIST ENCE OF THE TRUST AT GIVE ADDRESS. AS PER THE REPORT OF INSPECTOR, THERE IS NO ANY ACTIVITIES OF TRUST ARE BEING DONE AT THE SAID ADDRESS. CONSIDERING THE FACTS NARRATED ABOVE, THERE APPEARS TO BE NO MERIT IN THE APPEAL FILED BY THE ASSESSEE. YOUR GOODSELF IS, THEREFORE, REQUESTED TO KINDLY DISMISS THE SAME AND CONFIRM THE ADDITION MADE BY THE AO WHILE FRAMING THE ASSESSMENT. 5. THE LD. CIT(A) CONFIRMED THE ADDITIONS OF RS.12.32 LACS MADE BY THE AO, OBSERVING THAT: 7.6 AFTER CONSIDERING THE ABOVE RE MAND REPORT OF THE AO, A NOTICE DATED 07.05.2012 WAS ISSUED TO THE APPELLANT REQUIRING HIM TO PRODUCE THE TRUSTEES OF BOTH THE TRUST ALONG WITH ALL THE PARTICULARS TO ESTABLISH THE I.T.A NO. 153/AGRA/2013 4 GENUINENESS OF BOTH TRUSTS AND GENUINENESS OF LOAN GIVEN BY THEM AND AL TERNATIVELY, THE APPELLANT WAS ALSO ASKED TO WHERE THEY ARE FILING THE RETURN SO THAT GENUINENESS OF THE DOCUMENTARY EVIDENCE FILED BY THE ID. AR DURING THE APPELLATE PROCEEDING AS ADDITIONAL EVIDENCES COULD BE EXAMINED AND ALSO THE GENUINENESS OF LOAN SHO WN BY THE ASSESSEE(APPELLANT) COULD BE ASCERTAINED. HOWEVER, AFTER ISSUING OF THE ABOVE NOTICE DATED 07.05.2012 HAS BEEN MADE BY THE ASSESSEE DESPITE ISSUING VARIOUS NOTICES AS I HAVE ALREADY DISCUSSED IN PARA 1 OF THIS ORDER. IN THESE CIRCUMSTANCES, EVEN AFTER ADMITTING THE DOCUMENTARY EVIDENCES FURNISHED BEFORE ME DURING APPELLATE PROCEEDINGS IN ACCORDANCE WITH RULE 46A OF THE INCOME - TAX RULES, 1962, GENUINENESS OF THESE DOCUMEN TARY EVIDENCES COULD NOT BE E S TABLIS HED BECAUSE THE AUTHORS OF THESE DOCUMENTS BEING THE LENDERS OF LOANS COULD NEITHER BE PRODUCED, NOR THEY COULD BE TRACED OUT DURING THE INQUIRY MADE BY THE AO AND HENCE, IT COULD NOT BE ASCERTAINED WHETHER THE IMPUGNED LOANS WERE GIVEN BY BOTH THE TRUSTS OR NOT. EVEN THE BANK STATEMENTS PRODUCED BY THE ID. AR AS EVIDENCE SHOWIN G THE ISSUING OF CHEQUES FOR GIVING IMPUGNED LOANS HAVE BEEN FOUND TO BE O NLY PHOTOCOPIES ON WHICH, THOUGH THE NAME OF THE TRUST HAS BEEN MENTIONED BUT NOWHERE UN THIS PHOTOCOPY NAME OF THE BANK IS VISIBLE. DESPITE FURNISHING THE PHOTOCOPY OF I.T.A NO. 153/AGRA/2013 5 THE BAN K STATEMENT, THE ORIGINAL BANK STATEMENT HAS NOT BEEN PRODUCED FOR NECESSARY VERIFICATION AND EVEN THE PHOTOCOPY OF THE BANK STATEMENT HAS NOT BEEN C ERTIFIED EITHER BY THE BANK OR BY THE TRUST TO WHOM IT HAS BEEN CLAIMED TO BELONG. THEREFORE' SUCH PHOTOCOPY OF BANK STATEMENT WHICH IS NEITHER CERTIFIED, NOR VERIFIED FROM THE ORIGINAL BANK STATEMENT AND ALSO THE NAME OF THE B ANK IS NOT APPEARING ON SUCH PHOTOCOPY OF BANK STATEMENT CANNOT BE RELIED UPON TO FIND OUT THE SOURCE OF GIVING OF LOAN TO THE ASSESSEE. IN ABSENCE OF VERIFICATION OF THE GENUINENESS OF TRUSTS, NON ATTENDANCE OF TRUSTEE OF THE TRUSTS AS REQUIRED BY THE AO AS WELL AS BY ME AND ALSO NON TRACEABILITY OF THE TRUSTEES OF THE TRUSTS AND THE D OCUMENTARY EVIDENCES REDUCED BY THE ID. AR BEING ONLY PHOTOCOPIES THAT TOO NOT CERTIFIED BY THE PERSON OR AUTHORITIES FROM WHERE THESE DOCUMENTARY EVIDENCES HAVE EMANATED, I FIND THAT THE LD. AR HAS FAILED TO ESTABLISH THE GENUINENESS OF UNSECURED LOANS HE LD BY THE AO AS UNEXPLAINED IN THE ASSESSMENT ORDER. 6. IT IS SEEN THAT AS PER THE REMAND REPORT OF THE AO, THE AO STATED THAT A NOTICE U/S 133(6) OF THE ACT HAD BEEN ISSUED TO EACH OF THE TRUSTS FOR FURNISHING OF CERTAIN DETAILS BEFORE THE AO BY 29.02.2 012; THAT IN COMPLIANCE TO THE NOTICES, THE TRUSTS REQUESTED THE AO FOR GRANT OF EXTENSION OF TIME BY AT LEAST 15 DAYS, SO AS TO ENABLE THE REQUIRED INFORMATION TO BE FURNISHED. HOWEVER, AS RIGHTLY CONTENDED, THIS I.T.A NO. 153/AGRA/2013 6 REQUEST WAS NOT REJECTED BY THE AO AND STI LL, THE AO , AS AVAILABLE FROM THE REMAND REPORT (SUPRA), REPORTED NON - COMPLIANCE. THIS IS EX FACIE WRONG, AS IS EVIDENT. FURTHER , THE AO HAS ALSO REPORTED THAT AS PER THE REPORT OF THE INSPECTOR, NO ACTIVITIES OF THE TRUSTS WERE FOUND AT THE ADDRESSES GIVEN. THE INSPECTOR, AS PER THE REMAND REPORT, HAD BEEN DIRECTED TO ASCERTAIN THE EXISTENCE OF THE TRUSTS. HOWEVER, REMARKABLY , IN T HE REMAND REPORT ITSELF, THE AO NOTED HAVING RECEIVED THE LETTERS OF BOTH THE TRUSTS SEEKING EXTENSION OF TIME. THAT BEING SO, THE REPORT OF THE INSPECTOR WAS PALPABLY WRONG. 7. DESPITE THE ABOVE DISCREPANCIES AND INCONGRUITIES IN THE REMAND REPORT, THESE VERY FACTORS HAVE INORDINATELY WEIGH ED WITH THE LD. CIT(A) TO DECIDE THE MATTER AGAINST THE ASSESSEE. THIS COURSE OF ACTION, IN MY CONSIDERED OPINION, IS NOT SUSTAINABLE UNDER THE LAW. 8. IN VIEW OF THE ABOVE, I DEEM IT APPROPRIATE TO REMIT THIS MATTER T O THE FILE OF THE LD. CIT(A), TO BE DECIDED AFRESH IN ACCORDANCE WITH LAW ON OBTAINING A REPORT FROM THE AO, ON THE INQUIRIES AS ORDERED BY HIM VIDE HIS ORDER SHEET ENTRY DATED 25.02.2012, AS REPRODUCED IN PARA 7.4 OF THE IMPUGNED ORDER. THE ASSESSEE AS WE LL AS THE TRUSTS SHALL BE AFFORDED ADEQUATE OPPORTUNITY TO COMPLY WITH THE SAID DIRECTIONS ISSUED BY THE LD. CIT(A). THE AO SHALL ENSURE COMPLIANCE AND AFFORDING OF ADEQUATE OPPORTUNITY. THE ASSESSEE SHALL ALSO BE PROVIDE D DUE AND ADEQUATE I.T.A NO. 153/AGRA/2013 7 OPPORTUNITY OF H EARING TO DEFEND HIS CASE. ALL PLEAS AVAILABLE TO THE ASSESSEE UNDER THE LAW SHALL SO REMAIN AVAILABLE TO IT. 9. IN THE RESULT, FOR STATISTICAL PURPOSES , THE APPEAL OF THE ASSESSEE IS TREATED AS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 05 / 0 4 /2017. SD/ - (A.D. JAIN) JUDICIAL MEMBER DATED 05 /0 4 /2017 *AKV* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR I.T.A NO. 153/AGRA/2013 8 DATE 1. DRAFT DICTATED (DNS) 0 5 .0 4 .2017 PS 2. DRAFT PLACED BEFORE AUTHOR 05 .04.2017 PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS PS/PS 6. KEPT FOR PRONOUNCEMENT ON PS 7. FILE SENT TO THE BENCH CLERK PS 8. DATE ON WHICH FILE GOES TO THE AR 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 10. DATE OF DISPATCH OF ORDER.