Deputy Commissioner of Income Tax Circle-1 , Tumkur V. Sri C Nagesh Babu , Tumkur

ITA 1530/BANG/2018

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 9267 (ITAT-BANGALORE)
• Duration Of Justice: 2 year(s) 3 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-08-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 06-08-2020
• Assessment Year: 2014-2015
• Appeal Filed On: 10-05-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANJEET SINGH CIT BENGALURU
• Assessee Lawyers: PRASHANTH G S
• Keywords: Unexplained cash credit
• Section: 201

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : BANGALORE BEFORE SHRI A. K. GARODIA, ACCOUNTANT MEMBER AND SMT. BEENA PILLAI, JUDICIAL MEMBER REVENUES APPEAL ITA NO. 1530 /BANG/20 1 8 ASSESSMENT YEAR : 201 4 - 1 5 ASSISTANT COMMISSIONER OF INCOME-TAX, CIRCLE 1, TUMAKURU. VS. SHRI. C NAGESH BABU, PROP. JAIMATHA RICE INDUSTRIES, NO.92,93, 94, 95 2 ND PHASE, ANTHRASANHALLI INDUSTRIAL AREA, TUMAKURU. PAN : ACHPN 5192 M APPELLANT RESPONDENT ASSESSEES C.O. C. O. NO.102/BANG/2018 (IN ITA NO. 1 5 30 /BANG/201 8 ) ASSESSMENT YEAR : 2014-15 SHRI. C NAGESH BABU, TUMAKURU. PAN : ACHPN 5192 M VS. ASSISTANT COMMISSIONER OF INCOME-TAX, CIRCLE 1, TUMAKURU. APPELLANT RESPONDENT REVENUE BY : SHRI. MANJEET SINGH , ADDL. CIT (DR)(ITAT), BENGALURU ASSESSEE BY : SHRI. PRASHANTH G. S, CA DATE OF HEARING : 06 .0 8 .2020 DATE OF PRONOUNCEMENT : 14 .0 8 .2020 ITA NO.1530/BANG/2018 C.O. NO.102/BANG/2018 PAGE 2 OF 11 O R D E R PER A. K. GARODIA, A.M.: THIS APPEAL IS FILED BY THE REVENUE AND THE C.O. IS FILED BY THE ASSESSEE AND THESE ARE DIRECTED AGAINST THE ORDER OF LEARNED CIT(A)-10, BENGALURU, DATED 12.02.2018, FOR ASSESSMENT YEAR 2014-15. 2. AT THE VERY OUTSET, LEARNED AR OF THE ASSESSEE SUBMITTED THAT THE C.O. FILED BY THE ASSESSEE IS NOT PRESSED BECAUSE THE GROUNDS RAISED BY THE ASSESSEE IN C.O. ARE ONLY IN SUPPORT OF THE ORDER OF CIT(A). ACCORDINGLY, THE C.O. FILED BY THE ASSESSEE IS DISMISSED AS NOT PRESSED. THE GROUNDS RAISED BY THE REVENUE IN THIS APPEAL IN THIS APPEAL IS AS UNDER: 1. THE ORDER OF THE LEARNED CIT(A) IS OPPOSED TO LAW AND FACTS OF THE CASE. 2. 'WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE CIT(A) WAS JUSTIFIED IN LAW IN ALLOWING THE APPEAL OF THE ASSESSEE, THOUGH THE CONFIRMATIONS PRODUCED BY THE ASSESSEE FROM VARIOUS SUNDRY CREDITORS ARE VAGUE AND DO NOT STAND THE TEST OF EVIDENCE '? 3. 'WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE CIT(A) WAS JUSTIFIED IN LAW IN ALLOWING THE APPEAL OF THE ASSESSEE THOUGH THE SAME IS CONTRARY TO THE FINDINGS OF THE AO'? 4. 'THE CIT(A) ERRED IN ALLOWING THE APPEAL IN ASSESSEE'S FAVOUR, WHICH IS NOT IN CONFORMITY WITH THE AO'S VIEW IN THE REMAND REPORTS DATED 17.08.2017 & 11.01.2018'? 5. FOR THESE AND OTHER GROUNDS THAT MAY BE URGED AT THE TIME OF HEARING, IT IS PRAYED THAT THE ORDER OF THE CIT(A) IN SO FAR AS IT RELATES TO THE ABOVE GROUNDS MAY BE REVERSED AND THAT OF THE ASSESSING OFFICER MAY BE RESTORED. ITA NO.1530/BANG/2018 C.O. NO.102/BANG/2018 PAGE 3 OF 11 6. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND AND/OR DELETE ANY OF THE GROUNDS MENTIONED ABOVE. 3. LEARNED DR OF THE REVENUE SUPPORTED THE ASSESSMENT ORDER WHEREAS LEARNED AR OF THE ASSESSEE SUPPORTED THE ORDER OF CIT(A). HE ALSO SUBMITTED THAT REMAND REPORT WAS OBTAINED BY THE LEARNED CIT(A) FROM THE AO AND COPY OF REMAND REPORT IS AVAILABLE ON PAGES 78 TO 81 OF THE PAPER BOOK. HE ALSO POINTED OUT THAT IN THE REMAND REPORT, THE AO HAS NOTED IN PARAS 4 AND 7 THAT THE ASSESSEE HAS PRODUCED CONFIRMATION OF CREDITORS ON AFFIDAVIT ALONG WITH BILLS AND IDENTITY PROOF OF THE CREDITORS AND THE AO HAS ALSO NOTED THAT THE OUTSTANDING AMOUNT OF THESE CREDITORS AS PER ASSESSMENT ORDER AND AS PER CONFIRMATION LETTER AND FROM THE SAME, IT CAN BE SEEN THAT ONLY IN SOME CASES, THERE IS A VERY SMALL DIFFERENCE IN THESE TWO AMOUNTS AND IT WAS EXPLAINED BY THE ASSESSEE THAT THE SAME ARE ON ACCOUNT OF VARIOUS DISCOUNT ENTRIES PASSED BY THE CREDITOR AND THEREFORE, NO ADDITION IS JUSTIFIED ON THE BASIS OF THESE SMALL DIFFERENCES. HE ALSO SUBMITTED THAT LEARNED CIT(A) HAS NOTED IN HIS ORDER IN PARA 8 THAT IN RESPECT OF CREDITORS I.E., (1) MR. ARUMUGAM, OUTSTANDING AMOUNT IS RS.2,63,200, (2) MR. MENSOOR, OUTSTANDING AMOUNT IS RS.6,91,615/- (3) MR. RAMAMURTHY, OUTSTANDING AMOUNT IS RS.4,00,380/- (4) MR. RAMACHANDRA, OUTSTANDING AMOUNT IS RS. 3,67,500/- AND (5) MR. MANJUNATHA, OUTSTANDING AMOUNT IS RS.3,56,200/-. THESE PARTIES ARE NOT TRACEABLE AND NO PROOF OF IDENTITY IS FURNISHED NOR ANY PROOF OF TRANSACTION LIKE BANK STATEMENT, ETC., WERE FURNISHED AND THEREFORE, THESE CREDITORS SHOULD BE CONSIDERED AS UNEXPLAINED CREDITORS. BUT THEREAFTER IT IS NOTED BY LEARNED CIT(A) THAT ABOUT THESE CREDITORS ALSO, THE ASSESSEE HAS GIVEN PROPER EXPLANATION AND IN PARA 5.4, IT WAS NOTED THAT ONLY IN 4 CASES NAMELY, M/S. MANJUSHREE AND CO., MR. ARUMUGAM, MR. MENSOOR AND MR. RAMAMURTHY PROPER CONFIRMATION, ETC., IS NOT MADE AVAILABLE. HE HAS ALSO NOTED IN PARA 5.5 OF HIS ORDER THAT WITH REGARD ITA NO.1530/BANG/2018 C.O. NO.102/BANG/2018 PAGE 4 OF 11 TO TRANSACTION WITH M/S. MANJUSHREE AND CO., THE LEARNED AR STATED THAT THIS PARTY HAS CLOSED DOWN HIS BUSINESS AND BECAUSE OF THIS, THE ASSESSEE COULD NOT OBTAIN CONFIRMATION FROM IT AND HE HAS ALSO NOTED THAT THE ASSESSEE HAS PRODUCED EVIDENCE TO PROVE THAT THE PARTY HAS CLOSED HIS BUSINESS AND THE ASSESSEE HAS ALSO PRODUCED THE COPY OF THE LEDGER ACCOUNT OF THE PARTY ALONG WITH THE BANK STATEMENT TO SHOW THAT THE AMOUNT OF RS.6,67,612/- WAS OUTSTANDING AND IT WAS SUBSEQUENTLY PAID BY CASES NOS.662 AND 938 AND CIT(A) HAS REPRODUCED THE LEDGER ACCOUNT COPY FOR THE NEXT YEAR I.E., FINANCIAL YEAR 2014-15 AS PER WHICH, TWO PAYMENTS ARE MADE OF RS.3,65,500/- & RS. 3,00,000/- AND A CASH DISCOUNT WAS RECEIVED OF RS.2,112/-. REGARDING REMAINING THREE PARTIES ALSO, LEARNED CIT(A) HAD REPRODUCED THE RELEVANT LEDGER ACCOUNT FOR NEXT YEAR AND FROM THE SAME, IT IS SEEN THAT IN THE NEXT YEAR, THE OUTSTANDING AMOUNT WAS SQUARED UP BY WAY OF PAYMENT BY CHEQUE AND THEREFORE, THE ORDER OF CIT(A) SHOULD BE CONFIRMED. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. FOR READY REFERENCE, WE REPRODUCE PARAS 5 TO 5.6 FROM THE ORDER OF CIT(A). THESE PARAS ARE AS UNDER: ITA NO.1530/BANG/2018 C.O. NO.102/BANG/2018 PAGE 5 OF 11 ITA NO.1530/BANG/2018 C.O. NO.102/BANG/2018 PAGE 6 OF 11 ITA NO.1530/BANG/2018 C.O. NO.102/BANG/2018 PAGE 7 OF 11 ITA NO.1530/BANG/2018 C.O. NO.102/BANG/2018 PAGE 8 OF 11 ITA NO.1530/BANG/2018 C.O. NO.102/BANG/2018 PAGE 9 OF 11 5. FROM THE ABOVE PARAS REPRODUCED FROM THE ORDER OF CIT(A), IT IS SEEN THAT IN RESPECT OF 23 PARTIES PRODUCED BEFORE THE AUTHORITIES BELOW, CONFIRMATION LETTER IS RECEIVED AS PER WHICH THE OUTSTANDING AMOUNT IS EITHER ITA NO.1530/BANG/2018 C.O. NO.102/BANG/2018 PAGE 10 OF 11 TALLYING EXACTLLY OR THERE IS VERY SMALL DIFFERENCE. MAXIMUM DIFFERENCE IS IN THE CASE OF MR. SATISH, SL. NO.26 OF RS.12,100/- BECAUSE AS PER THE ASSESSMENT ORDER, THE OUTSTANDING AMOUNT IS RS.4,64,500/- AND AS PER CONFIRMATION LETTER, THE OUTSTANDING AMOUNT IS RS.4,52,400/-. REGARDING THIS SMALL DIFFERENCE, THIS WAS THE EXPLANATION THAT THE CREDITOR MIGHT HAVE GIVEN SOME DISCOUNT WHICH IS ACCOUNTED BY THE CREDITOR BUT THE SAME COULD NOT BE ACCOUNTED FOR BY THE ASSESSEE BECAUSE THE ASSESSEE DID NOT GET THE INFORMATION ABOUT THE DISCOUNT AND THE SAME WAS ACCOUNTED BY THE ASSESSEE IN THE SUBSEQUENT YEAR. REGARDING THE 4 PARTIES FOR WHOM CONFIRMATION COULD NOT BE MADE AVAILABLE ALSO, LEARNED CIT(A) HAS NOTED THAT THE OUTSTANDING AMOUNT WAS PAID BY THE ASSESSEE IN THE NEXT YEAR BY WAY OF CHEQUE. UNDER THESE FACTS, WE ARE OF THE CONSIDERED OPINION THAT THERE IS NO INFIRMITY IN THE ORDER OF CIT(A). 6. IN THE RESULT, APPEAL OF THE REVENUE AND C.O. OF THE ASSESSEE ARE DISMISSED. PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE. SD/- SD/- (BEENA PILLAI) (A.K. GARODIA) JUDICIAL MEMBER ACCOUNTANT MEMBER BANGALORE, DATED: 14 TH AUGUST, 2020. /NS/* ITA NO.1530/BANG/2018 C.O. NO.102/BANG/2018 PAGE 11 OF 11 COPY TO: 1. APPELLANTS 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, ITAT, BANGALORE.