Viva Laboratories Pvt.Ltd., Ahmedabad V. The Income Tax Officer, Ward-8(4), Ahmedabad

ITA 1664/AHD/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 9510 (ITAT-AHMEDABAD)
• Duration Of Justice: 8 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-02-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Next Hearing Date: 25-02-2016
• Assessment Year: 2002-2003
• Appeal Filed On: 10-06-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SANTOSH KARNAMI
• Assessee Lawyers: S N DIVATIA
• Keywords: Unexplained cash credit; Principle of natural justice
• Section: 68

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, AHMEDABAD BEFORE SHRI B.P. JAIN, ACCOUNTANT MEMBER ./ ITA.NO.1663, 1664, 1665 AND 1666/AHD/2015 / ASSTT. YEAR: 1996-97, 2002-03, 2003-04 AND 2003-200 4 VIVA LABORATORIES PVT. LTD. A-1, MANTHAN APTS., NR.SUN-N- STEP CLUB GHATLODIA, AHMEDABAD. PAN : AAACV 3958 M VS DCIT, CO.CIR.7(1) AMBAWADI AHMEDABAD. ! / (APPELLANT) '# ! / (RESPONDENT) ASSESSEE BY : SHRI S.N. DIVATIA, AR REVENUE BY : SHRI SANTOSH KARNAMI, SR.DR / DATE OF HEARING : 25/02/2016 / DATE OF PRONOUNCEMENT: 25/02/2016 $%/ O R D E R THESE FOUR APPEALS OF THE ASSESSEE AROSE FROM FOUR DIFFERENT ORDERS OF THE LD. CIT(A)-8, AHMEDABAD FOR THE ASSTT.YEAR 1996 -97, 2002-03, 2003-04 AND 2003-04. SINCE ISSUE IN ALL THE APPEALS IS IDE NTICAL, THEREFORE, ALL THE APPEALS ARE BEING TAKEN UP BY THIS CONSOLIDATED ORD ER. 2. FIRST OF ALL, I TAKE UP THE APPEALS IN THE CASE OF ASSESSEE IN ITA NO.1663/AHD/2015. THE ASSESSEE HAS RAISED THE FOLL OWING GROUNDS OF APPEAL: 1.1 THE ORDER PASSED U/S.250 ON 9-3-2015 FOR A. Y. 1996-97 BY CIT(A)-8, ABAD UPHOLDING THE ADDITIONS TO THE EXTEN T OF RS.10,96,100/- AS UNEXPLAINED CASH CREDITS MADE BY AO IS WHOLLY IL LEGAL, UNLAWFUL AND AGAINST THE PRINCIPLES OF NATURAL JUSTICE. ITA NO.1663 TO 1666/AHD/2015 2 1.2 THE LD. CIT(A) HAS GRIEVOUSLY ERRED IN LAW AND OR ON FACTS IN NOT CONSIDERING FULLY AND PROPERLY THE SUBMISSIONS MADE AND EVIDENCE PRODUCED BY THE APPELLANT WITH REGARD TO THE IMPUGN ED ADDITIONS. THE OBSERVATIONS MADE AND CONCLUSIONS REACHED BY CIT(A) IN UPHOLDING THE ADDITIONS ARE NOT ADMITTED BY THE APPELLANT AND THE SAME ARE CONTRARY TO THE EVIDENCE ON RECORD. 2.1 THE LD.CIT(A) HAS GRIEVOUSLY ERRED IN LAW A ND ON FACTS IN CONFIRMING THE FOLLOWING ADDITIONS: (I) DEPOSITS IN CASH (EXHIBIT-A) RS. 1,66,000 (II) DEPOSITS BY CHEQUES (EXHIBIT-C) RS. 4,46,150 (III) DEPOSITS BY CHEQUES (EXHIBIT-B) RS. 4,83,950 2.2 THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE AS WELL AS IN LAW, THE LD.CIT(A) OUGHT NOT TO HAVE UPHELD THE ADDITION S TO THE EXTENT OF RS.10,96100/- 3.1 THE LD.CIT(A) HAS GRIEVOUSLY ERRED IN LAW AN D ON FACTS IN CONFIRMING THE DISALLOWANCE OF INTEREST PAID ON THE IMPUGNED CASH CREDITS. 4.1 THE LD.CIT(A) HAS GRIEVOUSLY ERRED IN LAW A ND ON FACTS IN HOLDING THE APPELLANT WAS ALLOWED SUFFICIENT OPPORT UNITIES TO PRODUCE EVIDENCE RELATING TO THE CASH CREDITS. THE APPELLAN T WAS NOT CONFRONTED WITH THE OBSERVATIONS MADE BY CIT(A) IN PARA- 6.6 O F THE ORDER. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSMENT ORDER WAS PASSED ON 16.3.1999 ASSESSING TOTAL INCOME AT RS.30,781/-. T HEREAFTER, ORDER WAS PASSED ON 16/03/1999 ASSESSING TOTAL INCOME AT RS. 30781. IN THE ORDER PASSED FOLLOWING ADDITIONS UNDER SECTION 68 WERE MADE: A. DEPOSITS IN CASH DECLARED BY THE ASSESSEE COMPA NY VIDE LETTER DATED 29/01/1999 RS.424000/- B. DEPOSITS IN CASH NOT PROVED BUT NOT DECLARED BY THE COMPANY - RS.2,16,000/- C. DEPOSITS BY CHEQUES CREDITWORTHINESS NOT PROVED RS.5,02,950/- ITA NO.1663 TO 1666/AHD/2015 3 D. DEPOSITS BY CHEQUES WITHOUT CONFIRMATION RS.4, 46,150/- TOTAL: RS.1589100. THE ASSESSEE FILED AN APPEAL BEFORE CIT(APPEALS). T HE ORDER WAS PASSED VIDE ORDER DATED 11/02/2003 AND APPELLANT'S APPEAL WAS DISMISSED. AGAINST THIS ORDER THE APPELLANT WENT IN APPEAL TO ITAT WHERE IN ITA NUMBER 1916/AHD/2003 VIDE ORDER DATED 30/06/2004, THE ITAT CONFIRMED ADDITION OF RS. 4,24,000/-, HOWEVER, FOR REMAINING THREE DEPOSI TS THE MATTER WAS SET ASIDE TO CIT(APPEALS). CONSEQUENTLY, CIT(APPEALS) PASSED AN ORDER DATED 18/01/2006 WHERE APPEAL WAS AGAIN DISMISSED AS NO F RESH EVIDENCES WERE PRODUCED IN RESPECT OF CASH CREDITS. 4 . THE ITAT VIDE ORDER DATED 13/10/2006 IN ITA NUMB ER 730/AHD/06 HAS AGAIN SET ASIDE THE MATTER WITH THE DIRECTION T O DECIDE THE ISSUE AFRESH IN ACCORDANCE WITH LAW AND KEEPING IN VIEW THAT POINTS FOR DETERMINATION SHOULD BE DETERMINED AND DECISION THEREON AND THE REASONS FOR THE DECISION SHOULD BE CLEARLY STATED IN THE ORDER PASSED. THE ASSESSEE AG ITATED IN APPEAL BEFORE THE LD.CIT(A) ON THE ADDITIONS OF RS.2,16,000/-, RS.5,0 2,950/- AND RS.4,46,150/-. THE LD.CIT(A) CONFIRMED THE ACTION OF THE AO AFTER GETTING REMAND REPORT FROM THE AO. 5. I HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE F ACTS ON RECORD. ELABORATE ARGUMENTS WERE MADE BY BOTH THE PARTIES W HICH ARE TAKEN INTO CONSIDERATION, AND I AM OF THE VIEW THAT THE DETAIL S OF THE SUNDRY CREDITORS IN EXHIBIT-A, EXHIBIT-B AND EXHIBIT-C, WHERE THE ADDIT IONS HAVE BEEN CONFIRMED BY THE LD.CIT(A) ARE OF RS.1,66,000/-, 4,83,950/- A ND RS.4,46,150/- OUT OF TOTAL ADDITION OF RS.2,16,000/-, RS.5,02,950/- AND 4,46,150/- AS SHOWN AT PAGE NO.13, 14 AND 15 OF THE LD.CIT(A)S ORDER, AND IN F ACT, DETAILS OF NAMES OF DEPOSITORS, DATE OF DEPOSITS, AMOUNT, APPELLANTS C ONTENTIONS AND THE DECISIONS ITA NO.1663 TO 1666/AHD/2015 4 OF THE LD.CIT(A) AND ADDITION CONFIRMED ARE AVAILAB LE AT PAGE NOS.11 TO 15 OF THE LD.CIT(A)S ORDER. ON PERUSAL OF EACH AND EV ERY CREDITOR CAREFULLY AND VARIOUS PAPER BOOKS FILED, AND AFTER TAKING INTO CO NSIDERATION ARGUMENTS OF BOTH THE PARTIES, I AM OF THE VIEW THAT THERE ARE M ANY CASES IN THE LD.CIT(A)S ORDER, WHERE IT HAS BEEN OBSERVED THAT THE ASSESSEE HAS NOT FILED ANY CONFIRMATION OF THE LOAN RAISED. IN SUCH CASES, TH E LD.AR STILL PLEADED TO DELETE THE ADDITION. 6. WHEN NO CONFIRMATION HAS BEEN FILED BEFORE ANY O F THE AUTHORITIES BELOW AND BEFORE ME, IDENTITY, CREDIT-WORTHINESS AN D GENUINENESS OF THE TRANSACTION IS NOT ESTABLISHED. IN SUCH CASES, THE ADDITIONS HAVE RIGHTLY BEEN CONFIRMED BY THE LD.CIT(A). THE AO IS DIRECTED TO SUSTAIN ALL THESE ADDITIONS, WHERE NO CONFIRMATION HAS BEEN FILED EITHER BEFORE THE TRIBUNAL OR BEFORE THE AO OR LD.CIT(A) IN WHICH EXHIBIT-A, EXHIBIT-B AND E XHIBIT-C REPRODUCED AT PAGE NOS.11 AND 15 OF THE LD.CIT(A)S ORDER, AND TH EREFORE, THE AO IS DIRECTED TO SUSTAIN SUCH ADDITIONS. 7. AS REGARDS OTHER CREDITORS, WHERE THE ASSESSEE H AS FILED CONFIRMATIONS, BUT THE LD.CIT(A) HAS NOT SATISFIED WITH THE CREDIT -WORTHINESS OF THE CREDITORS, IN SUCH CASES, NO VALID REASON OR BASIS HAVE BEEN B ROUGHT ON RECORD BY THE LD.CIT(A), AND THEREFORE, I DIRECT DELETION OF SUCH ADDITIONS, AND THE AO IS DIRECTED TO ACT ACCORDINGLY, AND ALLOW THE RELIEF T O THE ASSESSEE. ACCORDINGLY, THE APPEAL OF THE ASSESSEE IN ITA NO.1663/AHD/2015 IS PARTLY ALLOWED. 8. NOW I TAKE UP THE APPEAL IN ITA NO.1664 AND 1665 /AHD/2015 WHERE THE ONLY INTEREST OF SUCH SUNDRY CREDITORS, WHERE A DDITIONS HAVE BEEN MADE DURING THE YEAR 1996-97. SINCE, I HAVE DIRECTED TH E DELETION OF CERTAIN ADDITIONS IN OUR ORDER IN ITA NO.1663/AHD/2015, AND ACCORDINGLY, THE INTEREST OF SUCH CREDITORS IS ALSO DIRECTED TO BE D ELETED AND THE REST OF THE ITA NO.1663 TO 1666/AHD/2015 5 INTEREST ACCORDINGLY SHALL BE SUSTAINED BY THE LD. AO. IT IS ORDERED ACCORDINGLY. 10. THE APPEALS OF THE ASSESSEE IN ITA NO.1664 AND 1665/AHD/2015 ARE PARTLY ALLOWED. 11. AS REGARDS ITA NO.1666/AHD/2015 FOR IMPOSITION OF PENALTY OF RS.7300/- LEVIED UNDER SECTION 271(1)(C) OF THE ACT , THE ASSESSEE HAS SUBMITTED THE EXPLANATION WITH REGARD TO SUCH CREDI TORS AND ESPECIALLY IN ITEM NO.1 TO 6 AVAILABLE AT PAGE NO.3 OF THE PENALTY ORD ER. THE ASSESSEE HAS FILED CONFIRMATION AND NO DEFECT HAS BEEN POINTED OUT AND THE AMOUNT HAS BEEN RECEIVED THROUGH ACCOUNT PAYEE CHEQUE FROM THE CLOS E RELATIVES. NO INQUIRY HAS BEEN CONDUCTED BY THE AO OR LD.CIT(A) , AND THE REFORE, NO PENALTY CAN BE LEVIED IN SUCH CASES. ACCORDINGLY, THE GROUNDS OF THE APPEAL OF THE ASSESSEE ARE ALLOWED. 12. IN THE RESULT, APPEALS OF THE ASSESSEE, IN ITA NO.1663 TO 1665/AHD/2015 ARE PARTLY ALLOWED AND ITA NO.1666/AH D/2015 IS ALLOWED. ORDER PRONOUNCED IN THE COURT ON 25 TH FEBRUARY, 2016 AT AHMEDABAD. SD/- ( B.P. JAIN ) ACCOUNTANT MEMBER AHMEDABAD; DATED 25/02/2016