M/s Orisons Minerals & Properties, Bhubaneswar V. ITO, Bhubaneswar

ITA 164/CTK/2012

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 61574 (ITAT-CUTTACK)
• Duration Of Justice: 1 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-04-2012
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Assessment Year: 2008-2009
• Appeal Filed On: 27-02-2012
• Court: TRIBUNAL
• Department Lawyers: PARAMITA TRIPATHY
• Assessee Lawyers: S C BHADRA
• Keywords: Unexplained cash credit; Opportunity of being heard

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK BEFORE : SHRI K.K.GUPTA, AM, AND SHRI K.S.S.PRASAD RAO, JM ITA NOS.164 AND 165/CTK/2012 STAY PETITIONS NOS.006 AND 007/CTK/2012 (ASSESSMENT YEARS 2007 - 08 AND 2008 - 09) M/S.ORISONS MINERALS & PROPERTIES, PLOT NO.60,SATYA NAGAR, BHUABENSWAR 751 007 PAN: AABFO 6559 P VERSUS INCOME - TAX OFFICER, WARD 2(2), BHUBANESWAR. (APPELLANT) (RESPONDENT) FOR THE APPELLANT: SHRI S.C.BH A DRA, AR FOR THE RESPONDENT SMT. PARAMITA TRIPATHY, CIT - DR DATE OF HE ARING : 21.03.2012 DATE OF PRONOUNCEMENT : 04.04.2012 ORDER SHRI K.S.S.PRASAD RAO, JM : THESE TWO APPEALS, BY THE ASSESSEE, DIRECTED AGAINST THE CONSOLIDATED ORDER DT.3.10.2011 OF THE COMMISSIONER OF INCOME - TAX (APPEALS) FOR THE AYS 200 7 - 08 AND 2008 - 09 , WERE HEARD TOGETHER AND ARE DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 2. THE ASSESSEE IS A PARTNERSHIP FIRM DERIVES INCOME FROM BUSINESS. DURING THE ASSESSMENT YEAR 2007 - 08, THE ASSESSING OFFICER FOUND 5,09,154 AND 34,89,355 TO HAVE BEEN INTRODUCED CAPITAL BY THE PARTNERS SHRI BISMOY KUMAR MOHAPATRA AND SHRI SAGAR KUMAR ROY. ON THE GROUND THAT THE SOURCE OF SUCH INTRODUCTION HAVING NOT BEEN PROVED WITH DOCUMENTARY EVIDENCE, THE ASSESSING OFFICER ADDE D THE SAME TOTALLING TO 39,98,509 TO THE INCOME OF ASSESSEE U/S.68 HOLDING THE SAME AS UNEXPLAINED CASH CREDITS. WHILE CONSIDERING THE EXPLANATION AS TO THE SUNDRY CREDITORS AMOUNTING TO 39,67,972 THE ASSESSING OFFICER NOTICED DIFFERENCE OF 1,36,443 BETWEEN THE AMOUNTS AS CLAIMED BY THE ASSESSEE AND THE CONFIRMATIONS FURNISHED BY THE TWO SUNDRY CREDITORS, NAMELY M/S.G.CON.ENTERPRISES AND M/S.GLOBAL TRADERS, WHICH THE ASSESSING OFFICER ADDED TO THE RETURNED INCOME ON THE GROUND THAT THE ASSESSEE COUL D NOT FURNISH SUCH EXPLANATION FOR SUCH DIFFERENCE. THE ITA NOS.164 AND 165/CTK/2012 STAY PETITIONS NOS.006 AND 007/CTK/2012 2 ASSESSING OFFICER FOUND THAT THE ASSESSEE HAS PAID 3,86,845 IN CASH TO SIX PARTIES EXCEEDING 20,000 AND THEREFORE, HE ADDED THIS AMOUNT U/S.40A(3) TO THE TOTAL INCOME OF THE ASSESSEE. FURTHER, ON THE FINDING THAT THE ASSESSEE HAS NOT DEDUCTED TAX AT SOURCE AS REQUIRED U/S.194H OF THE ACT ON THE PAYMEN T OF COMMISSION PAID TO SHRI DILIP KUMAR MOHANTY - 1,20,000 AND SHRI DEBAPRASAD NAYAK 66,000, THUS TOTALLING TO 1,86,000, THE ASSESSING OFFICER DISALLOWED THE COMMISSION OF 1,86,000 U/S.40(A)(IA) OF THE ACT. IN ABSENCE OF ANY EVIDENCE PRODUCED B Y THE ASSESSEE, THE AO DISALLOWED 55,000 CLAIMED AS PERMISSION CHARGES. 2.1. DURING THE ASSESSMENT YEAR 2008 - 09 FOR THE VERY SAME REASON THAT THE ASSESSEE COULD NOT EXPLAIN THE SOURCE WITH DOCUMENTARY EVIDENCE, THE ASSESSING OFFICER HELD THE CAPITAL I NTRODUCED OF 69,10,000 BY SRI BIISHMOY MOHAPATRA 9,00,000 AND SHRI SAGAR ROY 60,10,000 AS BOGUS AND NONGENUINE AND THEREFORE, ADDED THE SAME TO THE TOTAL INCOME U/S.68 OF THE ACT. ALSO THE ASSESSING OFFICER MADE ADDITION OF 49,66,683 U/S.68 OF THE ACT TREATING THE SAME AS UNEXPLAINED CREDIT, WHICH WERE CLAIMED BY THE ASSESSEE AS SUNDRY CREDITS FROM GLOBAL TRADERS, MAA BIRAJA TRANSPORT AND PRIMAVVERA. FURTHER, ON THE ALLEGATION THAT THE ASSESSEE COULD NOT FURNISHANY DOCUMENTARY EVIDENCE AND CONFI RMATIONS , THE ASSESSING OFFICER MADE AN ADDITION OF 3,45,95,484 CLAIMED AS ADVANCE RECEIVED. ALSO OBSERVING THAT THE ASSESSEE FAILED TO PRODUCE THE SUPPORTING VOUCHERS IN RESPECT OF SITE EXPENSES TO THE EXTENT OF 2,09,821, THE ASSESSING OFFICER ADDED THE SAME TO THE TOTAL INCOME OF THE ASSESSEE. 3. AGGR IEVED WITH THE ASSESSMENT ORDERS, THE ASSESSEE PREFERRED APPEAL BEFORE THE COMMISSIONER OF INCOME - TAX (APPEALS) AND THE LEARNED CIT(A) CALLED FOR REMAND REPORT. AFTER CONSIDERING THE FACTS AS BROUGHT ON RECORD AND THE REMAND REPORT SUBMITTED BY THE ASSESSI NG OFFICER, THE LEARNED CIT(A) ITA NOS.164 AND 165/CTK/2012 STAY PETITIONS NOS.006 AND 007/CTK/2012 3 CONFIRMED THE ADDITIONS AS MADE BY THE ASSESSING OFFICER IN BOTH THE AYS UNDER CONSIDERATION AND HENCE, THE ASSESSEE IS IN APPEALS BEFORE THE TRIBUNAL. 4. WE HAVE HEARD THE RIVAL CONTENTIONS AND CAREFULLY PERUSED THE IMPUGNED ORDERS OF THE AUTHORITIES BELOW AND MATERIAL AVAILABLE ON RECORD AND WE FIND THAT THE ADDITIONS HA VE BEEN MADE UNILATERALLY WITHOUT AFFORDING PROPER OPPORTUNITY TO THE ASSESSEE WHEN THE ASSESSING OFFICER HAS RE CAPITULATED HIS INFORMATION AND EXPLANATIONS OF THE ASSESSEE AND SUBMITTED TO THE LEARNED CIT(A) BY WAY OF REMAND REPORT. A COPY OF THE REMAND REPORT IS SUBMITTED BY THE LEARNED COUNSEL AS OF NOW WHICH WE PERUSE. WE DO FIND THAT THE REMAND REPORT AS CONSIDERED BY THE LEARNED CIT(A) MAY BE VAGUE BUT DEFINITELY SUGGESTS THAT THE ASSESSEE HAS TRIED TO DISCHARGE ITS ONUS TO EXPLAIN THE SOURCE OF INVESTMENT AS CAPITAL INTRODUCTION BY THE PARTNERS AND ALSO SUNDRY CREDITORS. KEEPING IN VIEW THE HONBLE APEX DECISION IN THE CASE OF CIT V. LOVELY EXPORTS P LT D [216 CTR (SC) 195], WE ARE OF THE CONSIDERED VIEW THAT THE ASSESSEE WAS NOT REQUIRED TO EXPLAIN THE SOURCE OF SOURCE WHICH THE ASSESSING OFFICER HAD ACCESS IN HIS OWN WAY BEING CAPITAL INTRODUCED BY THE PARTNERS RENDERED TO TAX BY THE RESPECTIVE ASSESSEE IN THEIR RETURNS. IT WAS ONLY A MATTER FOR EXPLAINING THE INTRODUCTION . IF THE CAPITAL INTRODUCTION IS HELD AS BOGUS BY THE ASSESSING OFFICER, THE SAME CANNOT BE ADDED IN THE HANDS OF THE ASSESSEE TILL SUCH TIME THE ASSESSING OFFICER HAS EXHAUSTED REMEDIE S AVAILABLE TO HIM TO TAX THE SAME IN THE HA NDS OF THE LOAN CREDITORS ALONE, AFTER HAVING UNILATERALLY OBTAINED INFORMATION WITHOUT A REBUTTAL FROM THE ASSESSEE TO CONTROVERT THE FINDINGS. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE HA S INFORMATION THAT COULD SATISFY THE LEARNED ASSESSING OFFICERS COMPLYING TO THE MANDATE AS PROMULGATED BY THE HONBLE APEX COURT IN THE CASE OF LOVELY EXPORTS P. LTD ITA NOS.164 AND 165/CTK/2012 STAY PETITIONS NOS.006 AND 007/CTK/2012 4 (SUPRA). ACCORDINGLY, WE SET ASIDE THE ORDER OF THE LEARNED CIT(A) FOR BOTH THE AYS AND RESTORE THE ISSUE TO THE FILE OF THE ASSESSING OFFICER WHO HAS TO SATISFY HIMSELF ON THE BASIS WHEN HE REPORTED ON REMAND TO THE LEARNED CIT(A) WITHOUT CONFRONTING THE ASSESSEE. NEEDLESS TO SAY A FAIR OPPORTUNITY OF BEING HEARD BE AFFORDED TO THE ASSESSEE PRIOR TO PASSING THE ORDER. 5. IN THE RESULT, THE APPEALS OF THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. 6. IN VIEW OF DISPOSAL OF THE APPEALS OF THE ASSESSEE, THE STAY PETITIONS FILED BY IT BECOME INFRUCTUOUS AND HENCE THE SAME ARE DISMISSED AS SUC H. SD/ - SD/ - (K.K.GUPTA) ACCOUNTANT MEMBER (K.S.S.PRASAD RAO) JUDICIAL MEMBER DATE: 04.04.2012 H.K.PADHEE, SENIOR PRIVATE SECRETARY. COPY OF THE ORDER FORWARDED TO : 1. THE APPE LLANT: M/S.ORISONS MINERALS & PROPERTIES, PLOT NO.60,SATYA NAGAR, BHUABENSWAR 751 007 2. THE RESPONDENT: INCOME - TAX OFFICER, WARD 2(2), BHUBANESWAR. 3. THE CIT, 4. THE CIT(A), 5. THE DR, CUTTACK 6. GUARD FILE (IN DUPLICATE) TRUE COPY, BY ORDER, SENIOR PRIVATE SECRETARY.