DCIT, Ludhiana V. Sh. Atul Jindal, Ludhiana

ITA 182/CHANDI/2017

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 5232 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-02-2018
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2012-2013
• Appeal Filed On: 25-01-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Section: 142(1); 68

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES A, CHANDIGARH BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER & MS. ANNAPURNA GUPTA, ACCOUNTANT MEMBER ITA NO. 182/CHD/2017 ASSESSMENT YEAR: 2012-13 THE DCIT, CIRCLE-6, VS. SH. ATUL JINDAL, LUDHIANA B-XX-2955, GURDEV NAGAR, LUDHIANA PAN NO. ACKPJ4006F & ITA NO. 236/CHD/2017 ASSESSMENT YEAR: 2012-13 SH. ATUL JINDAL, VS. THE ACIT, CIRCLE VI, B-XX-2955, GURDEV NAGAR, LUDHIANA LUDHIANA PAN NO. ACKPJ4006F (APPELLANT) (RESPONDENT) APPELLANT BY : SMT. CHANDERKANTA, ADDL. CIT RESPONDENT BY : SH. SUDHIR SEHGAL DATE OF HEARING : 01.02.2018 DATE OF PRONOUNCEMENT : 12.02.2018 ORDER PER SANJAY GARG, JUDICIAL MEMBER: THE ABOVE CAPTIONED APPEALS ONE BY THE REVENUE AND OTHER BY THE ASSESSEE HAVE ARISEN OUT OF THE ORDER OF COMMIS SIONER OF INCOME TAX (APPEALS), [HEREINAFTER REFERRED TO AS CIT(A)]- 3, LUDHIANA DATED 07.11.2016. 2 2. FIRST COMING TO THE APPEAL OF THE REVENUE, THE R EVENUE HAS AGITATED THE ACTION OF THE CIT(A) IN DELETING THE A DDITION OF RS. 1,76,17,339/- MADE BY THE ASSESSING OFFICER INTO TH E INCOME OF THE ASSESSEE U/S 68 OF THE INCOME-TAX ACT, 1961 (IN SHO RT 'THE ACT') AND FURTHER CONSEQUENTIAL ADDITION OF INTEREST EXPENDIT URE THEREON OF RS. 22,86,727/- ON ACCOUNT OF THE FAILURE OF THE ASSESS EE TO PROVE THE GENUINENESS OF THE UNSECURED LOANS. 3. THE BRIEF FACTS RELATING TO THE ISSUE ARE THAT T HE ASSESSING OFFICER NOTED THAT THE ASSESSEE HAD SHOWN UNEXPLAINED LOANS AMOUNTING TO RS. 1,76,17,339-. THE ASSESSING OFFICER HELD THAT THE A SSESSEE HAD FAILED TO PROVE THE GENUINENESS OF THE TRANSACTIONS AND CREDI TWORTHINESS OF THE CREDITORS, HE THEREFORE, MADE THE IMPUGNED ADDITION S. IN APPEAL, LD. CIT(A) WHILE APPRECIATING THE EVIDENCES ON THE FILE OBSERVED THAT IT WAS UNDISPUTED FACT THAT OUT OF THE AFORESAID AMOUN T OF RS. 1,76,17,339/-, AN AMOUNT OF RS. 1,18,95,000/- WAS O UT OF LOANS PROCURED DURING THE EARLIER ASSESSMENT YEARS AND THAT THE SA ID AMOUNT OF RS. 1,18,95,000/- WAS THE OPENING BALANCE AT THE START OF THE YEAR. DURING THE YEAR, THE ASSESSEE HAD PROCURED ONLY THE UNSECU RED LOANS OF RS. 59,15,000/- OUT OF WHICH A REPAYMENT OF RS. 4 LACS WAS ALSO MADE. THE LD. CIT(A), THEREFORE, OBSERVED THAT THE OPENING BA LANCE COULD NOT BE ADDED TO THE INCOME OF THE ASSESSEE. AT THE BEST, A DDITION COULD BE DONE FOR THE UNSECURED LOANS RECEIVED BY THE ASSESSEE DU RING THE ASSESSMENT YEAR. HE FURTHER OBSERVED THAT THE ASSESSEE HAD F ILED BEFORE THE ASSESSING OFFICER COPY OF ACCOUNTS, PAN NUMBERS AND CONFORMATIONS HAVING THE DETAILS OF UNSECURED LOANS RECEIVED DURI NG THE ASSESSMENT YEAR. HE ALSO OBSERVED THAT IT WAS A FACT ON THE FI LE THAT THE ASSESSING 3 OFFICER INSTEAD OF GOING INTO THE FURTHER VERIFICAT ION AND VERACITY OF THESE NEW UNSECURED LOANS, HAS ADDED THE SAME INTO THE INCOME OF THE ASSESSEE AT THE FAG END OF THE ASSESSMENT YEAR. HE THEREFORE, DELETED THE ADDITIONS SO MADE BY THE ASSESSING OFFICER IN THIS RESPECT. HE ALSO DELETED THE DISALLOWANCE OF INTEREST EXPENDITURE CL AIMED TO HAVE BEEN PAID BY THE ASSESSEE ON THE AFORESAID LOAN AMOUNT. 4. WE HAVE HEARD THE RIVAL CONTENTIONS. A PERUSAL O F THE ASSESSMENT ORDER REVEALS THAT THE ASSESSING OFFICER HAS OBSERV ED IN THE ASSESSMENT ORDER THAT A NUMBER OF OPPORTUNITIES WERE GIVEN TO THE ASSESSEE TO PROVE THE CREDITWORTHINESS OF THE CREDITORS AND GENUINENE SS OF THE TRANSACTIONS. HOWEVER, EVERY TIME INSUFFICIENT AND INCOMPLETE INFORMATION WAS FILED. THE LD. ASSESSING OFFICER H AS GIVEN A CHART IN PARA 3.1 OF THE ORDER ABOUT THE VARIOUS OPPORTUNITI ES GRANTED TO THE ASSESSEE, THE SAME FOR THE SAKE OF REFERENCE IS REP RODUCED HEREIN UNDER:- SR.N DATE REMARKS 1 13.06.2014 QUESTIONNAIRE WAS ISSUED ASKING THE ASSESSEE TO PROVIDE VARIOUS DETAILS INCLUDING THE UNSECURED LOANS. 2 08.07.2014 PARTIAL REPLY OF THE ABOVE QUESTIONNAIRE WAS RECEIVED, BUT NO INFORMATION GIVEN ON UNSECURED LOAN. 3 15.07.2014 THE ASSESSEE SUBMITTED IN HIS POINT NO. 3:- THE DETAILS OF THE UNSECURED LOAN TAKEN DURING THE YEAR IN DESIRED AS REQUIRED BY YOURSELF HAS 'BEEN ENCLOSED. BUT ONLY A FEW CONFIRMED COPIES OF ACCOUNT OF 'THE PARTIES TO WHOM UNSECURED LOANS HAV E BEEN TAKEN WERE PROVIDED. 4 06.08.2014 ASSESSES REQUESTED FOR ADJOURNMENT. NO INFORMATION FILED 4 5 22.09.2014 ON CHANGE OF INCUMBENCY NOTICE U/S 142(1) WAS ISSUED AND ASSESSES WAS ASKED TO APPEAR ON 14.10.2014. 6 14.10.2014 NOBODY APPEARED. 7 29.12.2014 ASSESSEE FILED SOME MORE INFORMATION IN RESPONSE TO QUESTIONNAIRE DATED 13.06.2014 BUT NO INFORMATION REGARDING UNSECURED LOAN WAS FURNISHED. ASSESSEE WAS AGAIN REQUESTED BY, THE A.O. VIDE ORDER SHEET ENTRY TO PROVIDE THE PENDING INFORMATION BY 05.01.2015 8 05.01.2015 NONE APPEARED 9 19.01.2015 ASSESSEE FILED SOME INFORMATION IN RESPONSE TO QUERY RAISED ON 29.12.2014. ON CHANGE ON INCUMBENCY NOTICE U/S 143-(2) WAS ISSUED ALONGWITH A DETAILED QUESTIONNAIRE ASKING AGAIN TO SUBMITTED UNSECURED LOANS. ASSESSEE WAS ASKED TO COMPLY BY 27.01 .2015. 10 27.01.2015 NONE APPEARED 11 19.02.2015 ASSESSEE FILED REPLY TO THE QUESTIONNAIRE DATED 19.01.2015 BUT AGAIN NO REPLY WAS SUBMITTED TO THE QUERY OF UNSECURED LOAN 12 24.02.2015 COUNSEL AGAIN REQUESTED FOR SOME TIME TO PROVIDE THE DETAILS. 13 02.03.2015 AGAIN COUNSEL AGAIN REQUESTED FOR ADJOURNMENT THE A.O. CLEARLY STATED THAT NO FURTHER ADJOURNMENT WILL BE GRANTED. 14 05.03.2015 AGAIN NO INFORMATION WAS FILED. A SHOW CAUSE WAS ISSUED (WHICH HAS BEEN PLACED ON RECORD) AND THE ASSESSEE WAS ASKED TO FILE THE REPLY BY 10.03.2015. 5 15 10.03.2015 A.R. APPEARED AND FILED INCOMPLETE REPLY. THE A.R. SUBMITTED ONLY THE PARTIAL BANK ACCOUNT STATEMENT AND NO ITR'S WERE SUPPLIED. THE ASSESSEE IN HIS REPLY HAD WRITTEN - 'INCOME TAX RETU RN AND BANK ACCOUNT STATEMENT ARC PROVIDED.' BUT NO INCOME TAX RETURN WERE FOUNDING THE ANNEXURE. THEREFORE, THE A.R WAS REQUESTED TO RE-SUBMIT HIS REPLY AFTER PROVIDING THE COMPLETE INFORMATION ON 32.03.2015. 16 12.03.2015 NONE APPEARED 17 13.03.2015 THE A.R. SH. RAJE SH MEHRU, APPEARED IN SOME OTHER CASE AND INFORM THAT THE INFORMATION WILL BE PROVIDED ON 14.03.2015 (THE OFFICE WAS OPENED 'ON 14.03.2015 UNDER ADMINISTRATIVE DIRECTION) 18 14.03.2015 NONE APPEARED. 19 16.03.2015 A.R. APPEARED AND TOLD THAT THE INFORMATION WILL BE PROVIDED IN THE AFTERNOON. BUT NO SUCH INFORMATION PROVIDED TILL DATE AND NONE OF THE ABOVE PARTIES HA VE BEEN PRODUCED TILL DATE. 5. THE LD. ASSESSING OFFICER HAS OBSERVED THAT TILL 18.3.2015, THE ASSESSEE DID NOT FILE THE REQUIRED INFORMATION AND KEPT TAKING ADJOURNMENTS ON ONE PRETEXT OR THE OTHER. HOWEVER, THE ASSESSEE SUBMITTED CERTAIN FORMS AND BANKS STATEMENTS OF THE PARTIES ON 18.3.2015, STILL NO ITRS OF THESE PARTIES WERE PROV IDED AND NONE OF THE ABOVE PARTIES WERE PRODUCED FOR VERIFICATION, THE A SSESSING OFFICER FURTHER OBSERVED THAT THE ASSESSEE HAD DELIBERATELY DELAYED THE FILING OF THE INFORMATION AND THE SAME WAS FILED ON THE FAG E ND OF THE PERIOD WHEN THE ASSESSMENT WAS GOING TO BE TIME BARRED. TH AT IT WAS NOT POSSIBLE AT THAT STAGE TO VERIFY THE INFORMATION AN D THAT WAS ONLY BECAUSE OF THE DELIBERATE ACT OF THE ASSESSEE IN NO T FILING OF THE INFORMATION IN TIME. HE, THEREFORE, MADE THE IMPUGN ED ADDITIONS. 6 6. THOUGH, LD. DR HAS CONCEDED THAT THE REQUIRED IN FORMATION WAS FILED BEFORE THE ASSESSING OFFICER, HOWEVER, THE FA CT REMAINS THAT THE SAME REMAINED UNVERIFIED AT THE LEVEL OF THE ASSESS ING OFFICER. WE FURTHER FIND FROM THE IMPUGNED ORDER THAT EVEN THE LD. CIT(A), WHO HAS POWERS CO-TERMINUS WITH THAT OF THE ASSESSING OFFIC ER, DID NOT MAKE ANY EXERCISE TO VERIFY THE INFORMATION FURNISHED BY THE ASSESSEE IN THE SHAPE OF CONFORMATIONS / ACCOUNT STATEMENT, PAN NOS . / ITRS OF THE CREDITORS. THE LD. CIT(A) ALLOWED THE APPEAL OF TH E ASSESSEE BY MERELY OBSERVING THAT THE ASSESSEE HAD FILED THE INFORMATI ON BEFORE THE ASSESSING OFFICER. HOWEVER, THE FACT REMAINS THAT THE ASSESSING OFFICER HAD GIVEN SUFFICIENT OPPORTUNITY TO THE ASSESSEE TO PRODUCE THE EVIDENCE SO THAT THE SAME MAY BE VERIFIED. THERE IS NO REBU TTAL TO THE FINDINGS OF THE ASSESSING OFFICER THAT CERTAIN INFORMATION W AS FILED ON 18.3.2017 AND THAT BY THAT TIME THE ASSESSING OFFICER WAS NOT LEFT WITH SUFFICIENT TIME TO EXAMINE THE VERACITY OF THE SAID INFORMATIO N FILED. UNDER THESE CIRCUMSTANCES, IN OUR VIEW, THE MATTER IS REQUIRED TO BE RESTORED TO THE FILE OF THE ASSESSING OFFICER. HOWEVER, WE MAY CLA RIFY HERE THAT THE AMOUNT OF UNSECURED LOANS WHICH FORM PART OF THE OP ENING BALANCE CANNOT BE ADDED IN THE YEAR UNDER CONSIDERATION U/S 68 OF THE ACT AND TO THAT EXTENT, WE AGREE WITH THE FINDINGS OF THE LD. CIT(A). IN VIEW OF THE ABOVE, WE RESTORE THE MATTER TO THE FILE OF THE ASSESSING OFFICER TO EXAMINE THE ISSUE AFRESH IN ACCORDANCE WITH LAW. 7. IN THE RESULT, THE APPEAL OF THE REVENUE (ITA NO.182/CHD/2017) IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. 8. SO FAR AS THE ASSESSEES APPEAL (ITA NO.236/CHD/2017) IS CONCERNED, THE LD. COUNSEL FOR THE ASSESSEE HAS SUB MITTED THAT AS PER 7 THE INSTRUCTIONS OF HIS CLIENT, HE WITHDRAWS THE AP PEAL OF THE ASSESSEE. THE LD. COUNSEL FOR THE ASSESSEE HAS PUT HIS REMARK S TO THIS EFFECT ON THE MEMORANDUM OF APPEALS ITSELF. THE APPEAL OF TH E ASSESSEE IS, THEREFORE, DISMISSED AS WITHDRAWN. SD/- SD/- (ANNAPURNA GUPTA) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 12.02.2018 RKK COPY TO:- 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR