M/s TIRUPATI ENTERPRISES, Kolkata V. ITO WD-33(4), Kolkata

ITA 1758/KOL/2009

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 7952 (ITAT-KOLKATA)
• Duration Of Justice: 5 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-03-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2004-2005
• Appeal Filed On: 16-10-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R K PAUL

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL : B BENCH : KOLKATA [ BEFORE SMT. DIVA SINGH, J.M. & SHRI C.D. RAO, A.M . ] I.T.A.NO. 1758 (KOL) OF 2009 ASSESSMENT YEAR 2004-05 M/S. TIRUPATI ENTERPRISES, -VS- INCOME-T AX OFFICER, WARD-33(4), KOLKATA (PAN-AABFT5859P) C.C.-XXX, KOLKAT A. [APPELLANT] [ RESPONDENT ] APPELLANT BY : SRI SOUMITRA CHOUDHURY RESPONDENT BY : SRI R.K. PAUL, SR. D.R . O R D E R PER SRI C.D. RAO, A.M. : THE APPEAL BY THE ASSESSEE IS DIRECTED AGAINST T HE ORDER DATED 07/08/2009 OF C.I.T.(A)-XX, KOLKATA FOR ASSES SMENT YEAR 2004-05. THE ASSESSEE HAS RAISED SEVERAL GROUNDS, WHICH ARE ALL RELATED T O CONFIRMATION OF ADDITION OF RS.11 LAKHS BY THE C.I.T.(A) ON ACCOUNT OF UNEXPLAINED CA SH CREDIT. 2. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, TH E A.O. FOUND THAT THE ASSESSEE- FIRM OBTAINED FRESH UNSECURED LOAN OF RS.11,00,000/ - DURING THE ASSESSMENT YEAR UNDER APPEAL FROM THREE PERSONS, THE DETAILS OF WHICH ARE AS UNDER :- SL. NO. NAME & ADDRESS OF THE PERSONS AMOUNT OF LOAN GIVEN DATES OF TRANSACTION 1 SUPRIYA DHAR 8C/1G, JOGADYAN LANE, KOL-54 RS. 1,50,000 RS. 1,00,000 RS. 2,00,000 13.12.2003 16.12.2003 26.12.2003 2 TRIPTI MULLICK 8C/1G, JOGADYAN LANE, KOL-54 RS. 2,00,000 16.12.2003 3 JYOTSNA MITRA 8C/1G, JOGADYAN LANE, KOL-54 RS. 1,50,000 RS. 1,00,000 RS. 2,00,000 13.12.2003 16.12.2003 27.12.2003 TOTAL RS.11,00,000 WHEN ASKED TO EXPLAIN THE AFORESAID LOAN TRANSACTIO NS, THE ASSESSEE FILED BEFORE THE A.O. THE LOAN CONFIRMATION CERTIFICATES, ITS BANK S TATEMENT, COPIES OF ACKNOWLEDGEMENT OF FILING OF RETURNS AND ACCOUNTS FILED THEREWITH O F THE RESPECTIVE LOAN CREDITORS. ON 2 VERIFICATION OF THESE DOCUMENTS, THE A.O. OBSERVED THAT EQUAL AMOUNTS OF MONEY WERE DEPOSITED IN CASH IN THE BANK ACCOUNTS OF THE PARTI ES AND ON THE CONSECUTIVE DATES, THE SAME AMOUNTS WERE TRANSFERRED AS LOAN TO THE ASSESS EE-FIRM. HE, THEREFORE, ISSUED NOTICE U/S. 131 TO ALL THESE THREE PERSONS. IN RES PONSE, SMT. SUPRIYA DHAR APPEARED BEFORE THE A.O. AND CONFIRMED HAVING GIVEN LOAN TO THE ASSESSEE. HOWEVER, THE EXPLANATION/REPLIES GIVEN BY SMT. SUPRIYA DHAR WERE NOT FOUND TO BE SATISFACTORY BY THE A.O., AS ACCORDING TO HIM, SMT. SUPRIYA DHAR WAS NO T ENGAGED IN ANY BUSINESS AND HENCE HER CREDITWORTHINESS WAS NOT ESTABLISHED. THE OTHER TWO PERSONS REMAINED ABSENT ON THE GROUND OF THEIR ILLNESS WHICH, ACCORDING TO THE A.O ., WAS DELIBERATE AVOIDANCE. HE, THEREFORE, HELD THAT THE GENUINENESS OF THE LOAN TR ANSACTIONS AND CREDITWORTHINESS OF THESE TWO PERSONS WERE NOT ESTABLISHED. HE THUS HE LD THAT THE IMPUGNED FRESH CASH CREDIT AMOUNTING TO RS.11,00,000/- FOUND RECORDED I N THE ASSESSEES BOOKS OF ACCOUNT WERE UNEXPLAINED AND ADDED THE SAME TO ITS TOTAL IN COME FOR THE ASSESSMENT YEAR UNDER APPEAL. 3. ON APPEAL, THE C.I.T.(A) OBSERVED THAT ONLY ONE PERSON, VIZ., SMT. SUPRIYA DHAR, DID APPEAR BEFORE THE A.O. AND THE OTHER TWO CREDIT ORS AVOIDED THEIR PRESENCE IN RESPONSE TO NOTICE SERVED BY THE A.O. U/S. 131 OF T HE ACT. ACCORDING TO HIM FURTHER, THE A.O. HAS BROUGHT ON RECORD THE POSITIVE MATERIAL TO SHOW THAT THE CREDITWORTHINESS OF THE LOAN CREDITORS COULD NOT BE ESTABLISHED BY THE ASSESSEE. HE, THEREFORE, UPHELD THE ADDITION OF RS.11,00,000/- MADE BY THE A.O. TO THE TOTAL INCOME OF THE ASSESSEE. HENCE THIS APPEAL BY THE ASSESSEE. 4. BEFORE US, THE ASSESSEE HAS FILED A PAPER BOOK CONTAINING 97 PAGES, WHICH ARE COMPRISED OF THE FOLLOWING :- A) CASH FLOW STATEMENT AND BALANCE SHEE T AS ON 31.3.2003 & 31.3.2004 OF THE THREE PERSONS. B) CONFIRMATION OF ACCOUNT & BANK STATEM ENT AS ON 31 ST MARCH, 2004, 2005, 2006 & 2007 OF THESE THREE PERSONS. C) RETURN ACKNOWLEDGEMENT, COMPUTATION O F TOTAL INCOME & TAX, BALANCE SHEET AND P/L ACCOUNT FOR A.YS 1998-99 TO 2004-05 OF ALL THE THREE PERSONS. 3 THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE NOTICES ISSUED U/S. 131 WERE RECEIVED BY THE RESPECTIVE CREDITORS AND ONE OF WHO M ALSO APPEARED BEFORE THE A.O. IN RESPECT OF OTHER TWO CREDITORS, THE ASSESSEE CANNOT FORCE THEM TO MAKE THEIR APPEARANCE BEFORE THE A.O. AND SUCH NON-PRODUCTION OF LOAN CREDITORS CANNOT BE MADE SOLE BASIS FOR MAKING ADDITION IN THE HANDS OF THE ASSESSEE, ESPECIALLY KEEPING IN VIEW THE FACT THAT ALL THE RELEVANT DETAILS, AS STATED ABOVE , WERE MADE AVAILABLE TO THE AUTHORITIES BELOW AND, THEREFORE, CONFIRMATION OF ADDITION OF R S.11,00,000/- IN THE HANDS OF THE ASSESSEE WAS CONTRARY TO THE DECISION OF HONBLE SU PREME COURT IN THE CASE OF CIT VS. ORISSA CORPN. PVT. LTD. [159 ITR 78 (SC)]. HE ALSO RELIED UPON THE DECISIONS IN THE CASES OF JA;AN TIMBERS VS. CIT [223 ITR 11 (GAU)] AND NEM I CHAND KOTHARI VS. CIT [264 ITR 254 (GAU)]. HE, THEREFORE, PLEADED THAT THE ADDITI ON UPHELD BY THE C.I.T.(A) OF RS. 11,00,000/- WAS UNJUSTIFIED AND HENCE SHOULD BE DEL ETED. THE LD. DEPARTMENTAL REPRESENTATIVE, ON THE OTHER HAND, RELIED ON THE OR DERS OF THE AUTHORITIES BELOW. 5. WE HAVE HEARD THE PARTIES AND PERUSED THE MATER IAL PLACED ON RECORD. AFTER CONSIDERING THE FACTS OF THE CASE AND ANALYZING THE CASE LAWS RELIED UPON BY THE PARTIES, WE FIND THAT THE CO-ORDINATE BENCH OF THIS TRIBUNAL ON IDENTICAL FACTS OF THE CASE VIDE ITA NOS. 1174 TO 1179 (KOL)/2004 IN THE CASE OF KUL WINDER PAL SINGH & ORS. VS. ITO HAS OBSERVED THAT WHETHER THE ASSESSEE HAS BEEN ABLE TO DISCHARGE THE ONUS OF PROVING THE CASH CREDIT IS A QUESTION OF FACT AND TO BE ANSWERE D AFTER CONSIDERING THE FACTS OF EACH CASE. IN THE CASE OF THE ASSESSEE BEFORE US, AFTER CONSIDERING THE FACTS OF THE CASE, IT IS ESTABLISHED FROM THE DOCUMENTS FILED BY THE ASSE SSEE BEFORE THE REVENUE AUTHORITIES THAT THE ASSESSEE WAS GETTING LOANS FROM THE SAME C REDITORS CONTINUOUSLY FOR THE PAST TWO TO THREE YEARS. FROM THE DOCUMENTS LIKE CASH F LOW STATEMENT, BALANCE SHEET ETC. FILED IN THE PAPER BOOK BEFORE US IN RESPECT OF ALL THE THREE PERSONS (WHO ARE ALSO ASSESSED TO TAX) FOR SEVERAL ASSESSMENT YEARS, IT I S EVIDENT THAT IN PRECEDING YEARS RELEVANT TO ASSESSMENT YEAR UNDER APPEAL, THERE WER E ENTRIES IN THE BALANCE SHEETS OF THESE PERSONS SHOWING LOAN TO TIRUPATI ENTERPRISES UNDER THE HEAD LOANS, ADVANCES & DEPOSITS. FURTHER, THEY HAVE ADVANCED LOAN IN TH ESE YEARS TO OTHER PARTIES ALSO. THEREFORE, CONSIDERING THE FACTS OF THE CASE, WE AR E OF THE CONSIDERED OPINION THAT THE 4 ASSESSEE HAS DISCHARGED ITS ONUS LAID UPON IT. HEN CE, WE FIND NO JUSTIFICATION ON THE PART OF THE REVENUE AUTHORITIES TO MAKE THE ADDITION IN THE HANDS OF THE ASSESSEE-FIRM. HOWEVER, WE MAY ADD THAT IF THE REVENUE IS NOT SATI SFIED ABOUT THE CASH DEPOSITS MADE BY THE LOAN CREDITORS IN THEIR RESPECTIVE BANK ACCO UNTS, THEY ARE AT LIBERTY TO CONDUCT ENQUIRIES AND MAKE THE ADDITIONS IN THE HANDS OF TH OSE CREDITORS, IF IT IS REQUIRED. WITH THIS OBSERVATION, WE SET ASIDE THE ORDERS OF THE AU THORITIES BELOW AND DIRECT THE A.O. TO DELETE THE ADDITION OF RS11,00,000/- MADE ON THIS A CCOUNT IN THE HANDS OF THE ASSESSEE. 6. IN THE RESULT, THE ASSESSEES APPEAL IS ALLOWED . ORDER IS PRONOUNCED IN THE COURT ON 31.3.2010. SD/- SD/- [DIVA SINGH] [C.D. RAO] JUDICIAL MEMBER ACCOUNTANT MEM BER DATED : 31-03-2010 COPY FORWARDED TO : 1. M/S. TIRUPATI ENTERPRISES, 63/2B, SURYA SEN STREET, KOLKATA-700 009. 2. I.T.O., WARD-33(4), KOLKATA. (3) THE C.I.T.(A)-X X, KOLKATA. 4. C.I.T., KOL- (5) THE DE PARTMENTAL REPRESENTATIVE, ITAT, KOLKATA. TRUE COPY, BY ORDER (DKP) DY.REGISTRAR.