H.A. Management Consultants Pvt. Ltd., New Delhi V. ITO, New Delhi

ITA 1852/DEL/2011

• Counselvise Citation: 185220114 RSA 2011
• Duration Of Justice: 6 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-11-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Next Hearing Date: 19-10-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 15-04-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SALIL MISHRA
• Assessee Lawyers: K P GARG
• Keywords: Unexplained cash credit; Additional evidence; Reasonable cause; Onus to prove
• Section: 131; 68; 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH C, NEW DELHI BEFORE SHRI C.L. SETHI, JUDICIAL MEMBER & SHRI K.G. BANSAL, ACCOUNTANT MEMBER ITA NO.1852/DEL/2011 ASSESSMENT YEAR: 2006-07 H.A. MANAGEMENT CONSULTANTS PVT. LTD., VS. ITO, 203, 2 ND FLOOR, 20, ANSARI ROAD, WARD 12(3), NEW DELHI. ROOM NO. 331, AABCH3117R C.R. BLDG., NEW DELHI. (APPELLANT) (RESPONDENT) APPELLANT BY : SH. K.P. GARG, CA RESPONDENT BY : SH. SALIL MISHRA, DR ORDER PER C.L. SETHI, J.M. THE ASSESSEE IS IN APPEAL AGAINST THE ORDER DATED 11.11.2010 PASSED BY THE LD. CIT(A) IN THE MATTER O F AN ASSESSMENT MADE BY THE ASSESSING OFFICER U/S 143(3) OF THE INCOME TAX ACT, 1961 FOR THE A.Y. 2006-07. 2. THE GROUND NO. 1 WHICH IS DIRECTED AGAINST CIT(A )S ORDER IN CONFIRMING THE ADDITION OF RS. 59,00,000/- MADE BY THE AO, IS AS UNDER: - ITA NO. 1852/D/11 2 1. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS I N UPHOLDING THE IMPUGNED ADDITION OF RS. 59,00,000/- MADE BY THE LD. AO ON ACCOUNT OF ALLEGED UNEXPLAINED CASH CREDIT U/S 68 ADVANCE FROM CUSTOMERS, MERELY ON THE GROUND THAT THE PARTIES DID NOT RESPOND TO NOTICE U/S 131, IGNORING THE EVIDENCE BROUGHT ON RECORD BY THE APPELLANT. A. RS. 39,00,000/- RECEIVED BY CROSSED PAYEES ACCOUNT CHEQUES FROM A REGULAR CUSTOMER TO WHOM SUPPLIES HAVE BEEN MADE ON REGULAR BASIS DURING AND AFTER THE CLOSE OF THE YEAR VIZ. H.G. EXIM PVT. LTD. B. RS. 20,00,000/- RECEIVED BY CROSSED PAYEES ACCOUNT CHEQUES FROM A REGULAR CUSTOMER AS ADVANCE TO WHOM SUPPLIES HAVE NOT BEEN MADE AT ALL VIZ. RASHI INTERNATIONAL. 3. IN THIS CASE, THE ASSESSEE FILED ITS RETURN OF I NCOME ON 30.11.2006 DECLARING TOTAL INCOME AT RS. 1,95,398/- . THE RETURN WAS SELECTED FOR SCRUTINY. NOTICES U/S 143( 2) WERE ISSUED AND SERVED UPON THE ASSESSEE. IN RESPONSE T O THE NOTICE U/S143(2), ASSESSEES AUTHORIZED REPRESENTAT IVE APPEARED BEFORE THE AO ON VARIOUS DATES AND FILED C ERTAIN ITA NO. 1852/D/11 3 DETAILS. THE BOOKS OF ACCOUNTS WERE PRODUCED AND T EST CHECKED. 4. IN THE COURSE OF ASSESSMENT PROCEEDINGS, IT WAS NOTICED BY THE AO THAT THE ASSESSEE HAD TAKEN UNSECURED LOA NS OF RS. 39,00,000/- AND RS. 20,00,000/- FROM M/S H.G. E XIM PVT. LTD. AND M/S RASHI INTERNATIONAL RESPECTIVELY, DURI NG THE YEAR UNDER CONSIDERATION. THE ASSESSEE WAS ASKED TO FIL E NECESSARY DOCUMENTS AND EVIDENCES TO PROVE THE EXIS TENCE AND CREDIT WORTHINESS OF THE SAID PARTIES AND ALSO TO PROVE THE GENUINENESS OF THE LOAN TRANSACTIONS. THE ASSESSEE VIDE LETTER DATED 8.12.2008 SUBMITTED BEFORE THE AO THAT DESPITE BEST EFFORT, THE ASSESSEE WAS NOT IN A POSITION TO FILE THE BANK STATEMENTS, COPIES OF INCOME TAX RETURNS AND BALANC E SHEET OF THE AFORESAID PARTIES FROM WHOM THE LOANS WERE T AKEN. HOWEVER, THE ASSESSEE FURNISHED THE ADDRESSES OF BO TH THE PARTIES AND REQUESTED THAT THE PARTIES MAY BE SUMMO NED DIRECTLY AND NECESSARY DETAILS/DOCUMENTS MAY BE OBT AINED FROM THESE PARTIES. ACCORDINGLY, SUMMON U/S 131 ON 8.12.2008 TO BOTH THE PARTIES ASKING THEM TO FILE T HE CONFIRMATION, COPY OF I.T. RETURN WITH BALANCE SHEE T AND BANK STATEMENT OF THE RELEVANT PERIOD. THE SUMMONS WERE SENT BY ITA NO. 1852/D/11 4 SPEED POST, BUT NEITHER THE SUMMONS COME BACK UN-SE RVED NOR ANY DETAILS OR DOCUMENTS WERE FILED BY THESE PA RTIES. IN THE ABSENCE OF THE VARIOUS DETAILS AND EVIDENCES, T HE AO HAD TAKEN A VIEW THAT ASSESSEE HAS FAILED TO DISCHARGE ITS BURDEN TO PROVE THE CREDIT WORTHINESS OF THE PARTIES AND H AS ALSO FAILED TO PROVE THE GENUINENESS OF THE LOAN TRANSAC TIONS. THE AO, THEREFORE, TREATED THE ALLEGED LOAN AMOUNT TO B E IN THE NATURE OF THE BOGUS CASH CREDIT AND ADDED THE SAME TO THE TOTAL INCOME OF THE ASSESSEE AS INCOME FROM UNDISCL OSED SOURCES. 5. BEING AGGRIEVED, THE ASSESSEE PREFERRED AN APPE AL BEFORE THE LD. CIT(A). 6. DURING THE COURSE OF THE APPELLATE PROCEEDINGS, THE ASSESSEE FURNISHED VARIOUS DOCUMENTS BEFORE THE LD. CIT(A), WHICH WERE FORWARDED TO THE ASSESSING OFFICER FOR H IS COMMENT. THEREAFTER, THE AO SUBMITTED HIS REMAND R EPORT VIDE LETTER DATED 13.09.2010. HOWEVER, THE ASSESSE E DID NOT FILE ANY REJOINDER TO THE REMAND REPORT. THE AOS COMMENT AND THE ASSESSEES SUBMISSIONS WERE CONSIDERED BY T HE LD. CIT(A). ITA NO. 1852/D/11 5 7. WITH REGARD TO THE UNSECURED LOANS OF RS. 39,00, 000/- TAKEN FROM M/S H.G. EXIM PVT. LTD. THE ASSESSEE FUR NISHED THE FOLLOWING DETAILS/EVIDENCES: - (I) AFFIDAVIT OF DIRECTOR OF ASSESSEE COMPANY; (II) BANK STATEMENT OF THE ASSESSEE; (III)CONFIRMATION OF ACCOUNT FROM H.G. EXIM P. LTD. ; (IV)COPY OF LEDGER ACCOUNT OF H.G. EXIM P. LTD. AS APPEARING IN THE ASSESSEES BOOKS FOR THE PERIOD FROM 1.04.2005 TO 31.03.2007. (V)COPY OF LEGER ACCOUNT SHOWING TRADING TRANSACTIONS WITH H.G. EXIM P. LTD. FOR THE PERIOD FROM 1.04.2005 TO 31.03.2007. 8. WITH REGARD TO THE LOAN OF RS. 20,00,000/- TAKEN FROM M/S RASHI INTERNATIONAL, THE ASSESSEE FURNISHED FOL LOWING DETAILS: - (I) COPY OF AFFIDAVIT OF ASSESSEES DIRECTOR; (II) BANK STATEMENT OF ASSESSEE; (III)COPY OF LEDGER ACCOUNT OF RASHI INTERNATIONAL IN THE ASSESSEES BOOKS FOR THE PERIOD FROM 1.04.2005 TO 31.03.2007; (IV)CONFIRMATION OF ACCOUNT OF RASHI INTERNATIONAL. 9. IN THE REMAND REPORT, THE AO STATED THAT ASSESSE E HAS FAILED TO GIVE ANY SUFFICIENT AND REASONABLE CAUSE FOR NOT ITA NO. 1852/D/11 6 PRODUCING THE VARIOUS DETAILS BEFORE HIM SO AS TO A LLOW THE ASSESSEE TO FILE ADDITIONAL EVIDENCES BEFORE THE LD . CIT(A). THE AO FURTHER STATED THAT MERE GIVING PAN NUMBER, THE IDENTITY AND CREDIT WORTHINESS OF THE CONCERNED PAR TY CANNOT BE ESTABLISHED. HE FURTHER POINTED OUT THAT ASSESS EE HAS NOT BEEN ABLE TO PROVE THE GENUINENESS OF THE TRANSACTI ON. 10. AFTER CONSIDERING THE AOS REMAND REPORT AND ASSESSEES SUBMISSION AND IN THE ABSENCE OF ANY REJ OINDER OF THE ASSESSEE TO THE REMAND REPORT, THE LD. CIT(A) U PHOLD THE ADDITION OF RS. 59 LAKH MADE BY THE AO. 11. HENCE, THE ASSESSEE IS IN FURTHER APPEAL BEFORE THE TRIBUNAL. 12. THE LD. COUNSEL FOR THE ASSESSEE HAS INVITED OU R ATTENTION TO THE VARIOUS DOCUMENTS AND PAPERS PLACE D IN THE PAPER BOOK, AND SUBMITTED THAT IN THE LIGHT OF THE PAPERS OR EVIDENCES FILED BY THE ASSESSEE, THE ASSESSEE HAS B EEN ABLE TO PROVE AND ESTABLISH THE IDENTITY AND CREDIT WORT HINESS OF THE CONCERNED PARTIES AS WELL AS THE GENUINENESS OF THE TRANSACTION. HE FURTHER SUBMITTED THAT MERE BECAUS E THE CREDITORS DID NOT APPEAR BEFORE THE AO IN RESPONSE TO THE ITA NO. 1852/D/11 7 SUMMON ISSUED U/S 131 OF THE ACT, THE ASSESSEE CANN OT BE HELD RESPONSIBLE FOR THE SAME AND A LOAN TAKEN FROM THE CONCERNED PARTIES BY BANKING CHANNELS CANNOT SAID T O BE BOGUS AND NON-GENUINE ONE. HE FURTHER SUBMITTED TH AT ASSESSEE HAS FILED CONFIRMATION FROM BOTH THE PARTI ES STATING THEIR PAN NO. AND, THEREFORE, THE INITIAL BURDEN OF THE ASSESSEE TO PROVE AND EXPLAIN THE NATURE AND CHARAC TER OF LOAN HAS BEEN DISCHARGED. HE, THEREFORE, SUBMITTED THAT THE ADDITION SUSTAIN BY THE LD. CIT(A) IS UNJUSTIFIED A ND IS DESERVE TO BE DELETED. 13. THE LD. DEPARTMENTAL REPRESENTATIVE ON THE OTHE R HAND, SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW AND S UBMITTED THAT THE ASSESSEE HAS NOT BEEN ABLE TO PROVE AND ES TABLISH THE CREDIT WORTHINESS OF THE PARTIES AS WELL AS THE GENUINENESS OF THE TRANSACTION AND EVEN THE IDENTITY OF THE PAR TIES. HE THEREFORE, SUBMITTED THAT AUTHORITIES BELOW HAVE RI GHTLY TREATED THE ALLEGED LOAN OF RS. 59 LAKH AS ASSESSEES INCOM E FROM OTHER SOURCES WITHIN THE MEANING OF SEC. 68 OF THE ACT. 14. WE HAVE HEARD THE RIVAL CONTENTION OF BOTH THE PARTIES AND HAVE CAREFULLY PERUSED THE ORDERS OF THE AUTHOR ITIES BELOW ITA NO. 1852/D/11 8 AS WELL AS THE VARIOUS PAPERS PLACED IN THE PAPER B OOK FILED BY THE ASSESSEE. 15. WE SHALL FIRST DEAL WITH THE ISSUE REGARDING AD DITION OF RS. 39 LAKH ON ACCOUNT OF ALLEGED UNEXPLAINED LOAN TAKEN FROM M/S H.G. EXIM P. LTD. THE ASSESSEE IS MAINTAINING TWO LEDGER ACCOUNTS IN THE NAME OF H.G. EXIM P. LTD. IN ITS BOOKS, NAMELY LOAN ACCOUNT AND CURRENT ACCOUNT. IN THE LO AN ACCOUNT FOR THE PERIOD FROM 01.04.2005 TO 31.03.2006, THE A SSESSEE HAS SHOWN THE RECEIPT OF RS. 41,50,000/- BY BANKING CHANNELS ON THE FOLLOWING DATES: - 14.03.2006 - RS. 2,50,000/- 24.03.2006 - RS. 20,00,000/- 30.03.2006 - RS. 19,00,000 /- TOTAL RS. 41,50,000 /- OUT OF THIS CREDIT OF RS. 41,50,000/-, THE ASSESSEE HAD SHOWN THE REPAYMENT OF RS. 2,50,000/- ON 16.03.2006 LEAVI NG A BALANCE OF RS. 39 LAKH AS ON 31.03.2006. THE ADDIT ION MADE BY THE AO IS ONLY IN RESPECT OF THE CLOSING BALANCE OF RS. 39 LAKH REPRESENTING TWO CREDITS RECEIVED ON 24.03.200 6 AND 30.03.2006. THE RECEIPT OF RS. 2,50,000/- ON 14.03 .2006 FROM THE SAME PARTY HAS NOT BEEN CONSIDERED TO BE THE UNEXPLAINED CREDIT IN THE HANDS OF THE ASSESSEE. T HE CREDIT OF RS. 2,50,000/- RECEIVED ON 14.03.2006 WERE REPAID O N ITA NO. 1852/D/11 9 16.03.2006 DURING THE SAME YEAR ITSELF, AND THE SAM E HAS NOT BEEN DOUBTED BY THE AO. THE CLOSING BALANCE OF RS. 39 LAKH AS ON 31.03.2006 HAS BEEN CARRIED FORWARD TO THE NE XT YEAR AS OPENING BALANCE AS ON 01.04.2006. THIS AFORESAID A MOUNT OF RS. 39 LAKH CARRY FORWARD FROM EARLIER YEAR HAS BEE N SHOWN AS LIQUIDATED IN THE F.Y. 2006-07 BY SHOWING THE PAYME NTS ON FOLLOWING DATES: - (I) 1.12.2006 BY CHEQUE RS. 9,00,000/- (II) 23.12.2006 BY CHEQUE RS. 25,00,000/- (III)TRANSFER TO CURRENT ACCOUNT RS. 2,15,000/- (IV) 26.12.2006 BY CHEQUE RS. 2,85,000 /- TOTAL RS. 39,00,000/- FROM THE SAID DETAILS, IT IS SEEN THAT THE ASSESSEE HAS REPAID THE AMOUNT OF RS. 9,00,000/-, RS. 25,00,000/- & RS. 2,85,000/- BY CHEQUE DRAWN ON HDFC BANK ON 1.12.2006, 23.12.20 06 & 26.12.2006 RESPECTIVELY AND DEBITED THE SAME TO THE CREDITORS ACCOUNT. THE ASSESSEE HAS PRODUCED BEFORE US THE B ANK STATEMENT OF THE ASSESSEE WITH HDFC BANK SHOWING TH AT THE AFORESAID AMOUNT OF RS. 9,00,000/-, RS. 25,00,000/- & RS. 2,85,000/- WERE TRANSFERRED FROM ASSESSEES BANK AC COUNT THROUGH CHEQUE TO THE ACCOUNT NO. 3142320001088 OF DARYAGANJ BRANCH. THE AMOUNT OF RS. 2,50,000/- REC EIVED BY THE ASSESSEE ON 14.03.2006 AND THEN REPAID ON 16.03 .2006 WAS ALSO TRANSFERRED FROM AND TO THE ACCOUNT NO. ITA NO. 1852/D/11 10 3142320001088 OF DARYAGANJ. IT IS ALSO SEEN THAT T HE AMOUNT OF RS. 20,00,000/- AND RS. 19,00,000/- RECEIVED BY THE ASSESSEE ON 24.03.2006 AND 30.03.2006 IS ALSO RECEI VED FROM ACCOUNT NO. 3142320001088 OF DARYAGANJ. THE AMOUNT OF RS. 2,50,000/- RECEIVED ON 14.03.2006 AND THEN REPA ID ON 16.03.2006 THROUGH THE ACCOUNT NO. 3142320001088 IS NOT IN DISPUTE AS NO ADDITION HAS BEEN MADE BY THE AO ON A CCOUNT OF CREDIT OF RS. 2,50,000/- RECEIVED BY THE ASSESSE E ON 14.03.2006 FROM ACCOUNT NO. 3142320001088. FROM TH E DISCUSSION MADE ABOVE, IT IS THUS, CLEAR THAT THE A SSESSEE RECEIVED THE AMOUNT FROM ACCOUNT NO. 3142320001088 AND THEREAFTER, REPAID THE AMOUNT, WHICH HAS BEEN TRANS FERRED TO THE ACCOUNT NO. 3142320001088. FROM THE AFORESAID TRANSACTIONS IT IS THUS, CLEAR THAT THE AMOUNT OF R S. 39,00,000/- REMAINING OUTSTANDING AS ON 31.03.2006 HAS BEEN REP AID BY THE ASSESSEE IN THE SUBSEQUENT F.Y. 2006-07 EXCEPT BY AN AMOUNT OF RS. 2,15,000/- TRANSFERRED TO CURRENT ACC OUNT OF THE CREDITOR. 16. WE HAVE ALSO EXAMINED THE CURRENT ACCOUNT OF TH E CREDITOR H.G. EXIM PVT. LTD. FOR THE YEAR FROM 01.0 4.2005 TO 31.03.2007 SUMMARY OF WHICH IS REPRODUCED BELOW: - ITA NO. 1852/D/11 11 (01.04.2005 TO 31.03.2006 ) PARTICULARS CREDIT AMOUNT BY DD ON ACCOUNT OF SALE TAX RS. 78,336.00 BY DD ON ACCOUNT OF SALE TAX RS. 1,80,000.00 BY CHEQUE RS. 5,52,115.00 BY REBATE & DISCOUNT RS. 468.20 TOTAL RS. 8,10,919.20 PARTICULARS DEBIT AMOUNT TO SALES RS. 5,52,115.20 TO SALES RS. 2,58,804.00 TOTAL RS. 8,10,919.20 (01.04.2006 TO 31.03.2007 ) PARTICULARS CREDIT AMOUNT BY CHEQUE ON 17.04.2006 RS. 6,50,000/- BY CHEQUE ON 18.04.2006 RS. 7,20,000/- BY CHEQUE ON 19.04.2006 RS. 6,00,000/- BY 23.12.2006 TRANSFER FROM LOAN ACCOUNT RS. 2,15,000 /- TOTAL RS. 21,85,000 /- PARTICULARS DEBIT AMOUNT TO CHEQUE ON 07.09.06 RS. 3,50,000/- TO CHEQUE ON 07.11.06 RS. 5,00,000/- TO CHEQUE ON 11.11.06 RS. 5,02,000/- TO CHEQUE ON 17.11.06 RS. 8,33,000 /- TOTAL RS. 21,85,000 /- 17. FROM THE AFORESAID LEDGER ACCOUNT, IT IS SEEN T HAT ASSESSEE HAD MADE SALES OF RS. 8,10,919.20 IN THE F .Y. ITA NO. 1852/D/11 12 2005-06 TO M/S H.G. EXIM P. LTD. AND RECEIVED THE P AYMENT IN THAT YEAR ITSELF ON VARIOUS DATES AS NOTED ABOVE. IN THE NEXT F.Y. 2006-07 THE ASSESSEE RECEIVED CERTAIN PAYMENTS FROM H.G. EXIM P. LTD. AND REPAID THE SAME DURING THE YE AR ITSELF. ALL THESE TRANSACTIONS MADE BY THE ASSESSEE WITH M/ S H.G. EXIM P. LTD. HAVE NOT BEEN FOUND TO BE BOGUS. THE AO HAS MADE THE ADDITION MERELY BECAUSE M/S H.G. EXIM P. L TD. HAD FAILED TO APPEAR BEFORE HIM AND FILE DOCUMENTS IN R ESPONSE TO THE SUMMON ISSUED U/S 131 OF THE ACT. IN THIS CONN ECTION, THE ASSESSEE HAS PRODUCED ALL THE RELEVANT DETAILS BEFO RE THE AO AND HAS ALSO SUPPLIED THE ADDRESS OF H.G. EXIM P. L TD. VIDE ASSESSEES LETTER DATED 8.12.08, WHERE THE PERMANEN T ACCOUNT NUMBER OF H.G. EXIM LTD. WAS ALSO SUPPLIED AS PAN N UMBER AABCI3072R. THE PRESENT ASSESSEE IS ASSESSED BY TH E INCOME TAX OFFICER, WARD 12(3), NEW DELHI. THE CRE DITOR M/S H.G. EXIM LTD. IS ALSO ASSESSED BY ITO, WARD 12(3), NEW DELHI. THE AO COULD HAVE VERIFIED THE ASSESSMENT R ECORDS OF THE CREDITOR, NAMELY, H.G. EXIM P. LTD., WHICH IS R EGISTERED COMPANY HAVING REGISTERED OFFICE AT FIRST FLOOR, KR ISHNA-A, EXTN., TILAK NAGAR, NEW DELHI WITH REGISTRATION NO. 118856 WITH THE REGISTRAR OF THE COMPANIES. AS PER THE CO MPANY MASTER DETAILS AVAILABLE AS ON 6.12.2008, THE COMPA NY ITA NO. 1852/D/11 13 FURNISHED ITS LAST BALANCE SHEET AS ON 31.3.07 BEFO RE THE REGISTRAR OF COMPANIES AND COMPANYS STATUS HAS BEE N SHOWN AS ACTIVE. 18. IN THE LIGHT OF THE DISCUSSIONS MADE ABOVE, IT IS THUS, CLEAR THAT THE ASSESSEE HAS BEEN ABLE TO PROVE THE IDENTITY OF THE CREDITOR AS WELL THE CREDIT WORTHINESS OF THE C REDITOR AND GENUINENESS OF THE TRANSACTION. THEREFORE, THE ADD ITION OF RS. 39 LAKH MADE BY THE AO ON ACCOUNT OF LOAN TAKEN FRO M H.G. EXIM P. LTD. STANDS DELETED. 19. THE NEXT ADDITION IS WITH REGARD TO THE AMOUNT OF RS. 20 LAKH BEING AN ALLEGED LOAN CLAIMED TO HAVE BEEN TAK EN FROM ONE M/S RASHI INTERNATIONAL. IT HAS BEEN CLAIMED B Y THE ASSESSEE THAT ASSESSEE HAD TAKEN LOAN OF RS. 20 LAK H FROM RASHI INTERNATIONAL BY CHEQUE ON FOLLOWING DATES: - 19.10.2005 RS. 5,00,000/- 28.10.2005 RS. 5,00,000/- 02.11.2005 RS. 5,00,000/- 10.03.2006 RS. 2,50,000/- 11.03.2006 RS. 2,50,000 /- TOTAL RS. 20,00,000 /- THE WHOLE AMOUNT OF RS. 20,00,000/- HAS BEEN SHOWN AS OUTSTANDING AS ON 31.03.2006. THE SAID AMOUNT HAS BEEN ITA NO. 1852/D/11 14 CARRIED FORWARD TO THE NEXT YEAR SHOWING OPENING BA LANCE AS ON 1.04.2006 AT RS. 20,00,000/-. IN F.Y. 2006-07 T HE ASSESSEE HAS FURTHER SHOWN THE DEPOSIT OF RS. 2,50, 000/- EACH ON 07.04.2006 AND 18.04.2006 MAKING THE TOTAL BALANCE OF RS. 25,00,000/-, WHICH WAS REMAINING OUTSTANDING AS ON 31.03.2007. IN THE COURSE OF HEARING THE LD. COUNS EL FOR THE ASSESSEE WAS ASKED TO EXPLAIN AS TO WHETHER THE AFO RESAID AMOUNT OF RS. 25,00,000/- AS ON 31.03.2007 IS STILL OUTSTANDING OR HAS BEEN REPAID IN SUBSEQUENT YEARS. BUT THE LD. COUNSEL FOR THE ASSESSEE EXPRESSED HIS INABILIT Y TO FURNISH THE DETAILS. THE CREDIT HAS BEEN SHOWN IN THE NAME OF RASHI INTERNATIONAL. IT IS NOT CLEAR AS TO WHETHER RASHI INTERNATIONAL IS A COMPANY OR A PARTNERSHIP FIRM OR A PROPRIETORS HIP FIRM OF SOME INDIVIDUAL. AGAINST THE NAME OF RASHI INTERNA TIONAL, NO DETAILS HAVE BEEN GIVEN BY THE ASSESSEE AS TO WHETH ER IT IS A PRIVATE LIMITED COMPANY OR LIMITED COMPANY OR A PARTNERSHIP FIRM OR A PROPRIETORSHIP CONCERN. THE NAME OF THE CREDITOR IN THE BOOKS OF ACCOUNT OF THE ASSESSEE AN D ALLEGED CONFIRMATION LETTER IS MENTIONED AS RASHI INTERNATI ONAL WITHOUT STATING ANY FURTHER ABOUT ITS STATUS. NO DETAILS R EGARDING COMPANY MASTER DETAILS COLLECTED FROM WEBSITE OF RE GISTRAR OF COMPANIES HAS BEEN PLACED BEFORE US SO AS TO SHOW A ND ITA NO. 1852/D/11 15 ESTABLISH WHETHER RASHI INTERNATIONAL IS A COMPANY REGISTERED UNDER INDIAN COMPANIES ACT THOUGH SUCH DETAILS HAS BEEN FURNISHED BY THE ASSESSEE IN THE CASE OF OTHER CRED ITOR, NAMELY, M/S H.G. EXIM P. LTD. THE ASSESSEE HAS PRO DUCED ONE COPY OF CONFIRMATION ACCOUNT FROM RASHI INTERNA TIONAL CLAIMED TO HAVE BEEN SIGNED BY ONE MR. PAWAN AGGARW AL WITH PAN NO.AABCR7244K WITH THE ADDRESS AT 9, MANAGOE LA NE, 2 ND FLOOR, KOLKATA. IN THE CONFIRMATION LETTER, DETAI LS ABOUT STATUS AND IDENTITY OF RASHI INTERNATIONAL IS NOT M ENTIONED. IT IS ALSO NOT CLEAR AS TO IN WHAT CAPACITY, ONE MR. P AWAN AGGARWAL HAS SIGNED THE CONFIRMATION LETTER. THE A SSESSEE HAS FURNISHED BEFORE US COPY OF ITS BANK ACCOUNT BE GINNING FROM 19.01.2006 AND THEREAFTER. THE ASSESSEE HAS S HOWN THE RECEIPT OF AMOUNT OF RS. 5,00,000/- EACH ON 19.10.2 005, 28.10.2005 & 02.11.2005 IN RESPECT OF WHICH NO BANK STATEMENT HAS BEEN PRODUCED. THOUGH IT HAS BEEN ME NTIONED BY THE ASSESSEE THAT ASSESSEE HAS FILED STATEMENT O F ITS BANK ACCOUNT WITH HDFC FOR THE PERIOD FROM 11.07.2005 TO 11.01.2007 PLACED AT PAGES 15 TO 19 OF THE PAPER BO OK, THE STATEMENT OF BANK ACCOUNT PLACED AT PAGES 15 TO 19 OF THE PAPER BOOK SHOWS THAT THE STATEMENT FROM 11.07.2005 PRIOR TO 19.01.2006 HAS NOT BEEN FILED BY THE ASSESSEE. AT PAGE 15 OF ITA NO. 1852/D/11 16 THE PAPER BOOK, BANK STATEMENT FROM 19.01.2006 TO 13.03.2006 IS PLACED, AT PAGE 16, THE BANK STATEMEN T UPTO 30.03.2006 IS PLACED, AT PAGE 17 BANK STATEMENT FRO M 12.11.2006 TO 11.12.2006 IS PLACED, AND AT PAGE 18 & 19, BANK STATEMENT FROM 12.12.2006 TO 11.01.2007 HAS BE EN PLACED. WE, THEREFORE, FIND THAT BANK STATEMENT FR OM 11.07.2005 TO PRIOR 19.01.2006 HAS NOT BEEN FILED. IN THE CONFIRMATION OF ACCOUNT ALSO, THE MODE OF TRANSACTI ON IS MENTIONED AS BANK ONLY WITHOUT MENTIONING THE DET AILS OF CHEQUE NUMBER AND THE BANK ON WHICH THE CHEQUES WER E DRAWN. FURTHER, IN THE GROUND OF APPEAL AS WELL IN THE COURSE OF THE HEARING OF THIS APPEAL, THE ASSESSEE HAS STA TED THAT THE RASHI INTERNATIONAL IS THE ASSESSEES REGULAR CUSTO MER FROM WHOM THE ADVANCE WERE RECEIVED AGAINST SUPPLIES, WH ICH COULD NOT BE MADE AT ALL. BUT, THE ASSESSEE HAS FA ILED TO GIVE ANY IOTA OF EVIDENCE TO SHOW AND ESTABLISH THAT M/S RASHI INTERNATIONAL WAS EVEN ASSESSEES REGULAR CUSTOMER. MOREOVER, THE ASSESSEE HAS FAILED TO EXPLAIN EVEN T HE STATUS AND IDENTITY OF RASHI INTERNATIONAL. IN THE COURSE OF HEARING, THE LD. COUNSEL FOR THE ASSESSEE WAS ASKED TO EXPLA IN AS TO WHY THE RASHI INTERNATIONAL HAD GIVEN LOAN TO THE A SSESSEE WITHOUT CHARGING AN INTEREST, IN RESPECT OF WHICH H E COULD NOT ITA NO. 1852/D/11 17 ABLE TO GIVE ANY SATISFACTORY EXPLANATION EXCEPT BY SAYING THAT THE AMOUNT WAS RECEIVED IN ADVANCE FROM A REGULAR C USTOMER. HOWEVER, AS ALREADY STATED ABOVE, THE ASSESEE HAS N OT BEEN ABLE TO PROVE AND ESTABLISH THAT RASHI INTERNATIONA L IS A REGULAR CUSTOMER OF THE ASSESSEE AND HAS NOT EVEN A BLE TO PROVE AND EXPLAIN ITS IDENTITY. THE ASSESSEE HAS AL SO SUBMITTED BEFORE US THAT ASSESSEE WAS NOT ABLE TO P ROCURE COPIES OF BANK STATEMENT AND INCOME-TAX ASSESSMENT DETAILS OF RASHI INTERNATIONAL. MORE FILING SELF SERVING A FFIDAVIT BY ASSESSEES DIRECTOR THAT THE ASSESSEE COMPANY HAS T AKEN LOAN IS NOT SUFFICIENT TO PROVE THE IDENTITY AND CR EDIT WORTHINESS OF THE CREDITOR AND GENUINENESS OF THE TRANSACTION. IT IS THUS, CLEAR THAT ASSESSEE HAS NOT EVEN ABLE TO ESTABLISH THE IDENTITY OF RASHI INTERNATIONAL. THE ASSESSEE HAS ALSO NOT BEEN ABLE TO ESTABLISH THE GENUINENESS OF THE TRANSACTION AS WELL AS THE CREDIT WORTHINESS OF RASHI INTERNATIONAL. WE, THER EFORE, HOLD THAT THE PRIMARY BURDEN THAT LIES UPON THE ASSESSEE U/S 68 OF THE ACT HAS NOT EVEN BEEN DISCHARGED BY THE ASSESSE E IN RESPECT OF LOAN OF RS. 20 LAKH CLAIMED TO HAVE BEEN TAKEN FROM ONE RASHI INTERNATIONAL. THUS, THE ORDER OF C IT(A) IN CONFIRMING THE ADDITION OF RS. 20 LAKH ON THIS ACCO UNT IS UPHELD. ITA NO. 1852/D/11 18 20. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. THIS DECISION IS PRONOUNCED IN THE OPEN COURT ON 4 TH NOVEMBER, 2011. SD/- SD/- (K.G. BANSAL) (C.L. SETH I) ACCOUNTANT MEMBER JUDICIAL MEMB ER DATED: 4.11.11 *KAVITA COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT TRUE COPY BY ORDER, DEPUTY REGISTRAR ITA NO. 1852/D/11 19