FINO FINTECH FOUNDATION, MUMBAI V. DCIT 10(3), MUMBAI

ITA 1914/MUM/2016

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 5480 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 3 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-07-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2011-2012
• Appeal Filed On: 28-03-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: RAM TIWARI
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH J MUMBAI BEFORE SHRI JOGINDER SINGH (JUDICIAL MEMBER) AND SHRI N.K. PRADHAN (ACCOUNTANT MEMBER) ITA NO. 1914/MUM/2016 ASSESSMENT YEAR: 2011 - 12 FINO FINTECH FOUNDATION TARUN BHARAT, PLOT NO. 38/39 SEC - 30 NEAR SANPADA RLY STN NAVI MUMBAI - 400705. VS. DCIT - 10(3) MUMBAI PAN NO. AABCF1125D APPELLANT RESPONDENT ASSESSEE BY : NONE REVENUE BY : MR. RAM TIWARI, DR DATE OF HEARING : 10 /07/2018 DATE OF PRONOUNCEMENT : 18/07/2018 ORDER PER N.K. PRADHAN, AM THIS IS AN APPEAL FILED BY THE ASSESSEE. THE RELEVANT ASSESSMENT YEAR IS 2011 - 12 . THE APPEAL IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) - 2 4 [IN SHORT CIT(A) ], MUMBAI AND ARISES OUT OF THE ASSESSMENT COMPLETED U/S 143(3) (II) OF THE INCOME TAX ACT 1961, (THE ACT). THOUGH THE CASE WAS FIXED FOR HEARING ON 12.12.2017, 23.05.2018 AND 10.07.2018, NEITHER THE ASSESSEE NOR HIS AUTHORIZED REPRESENTATIVE APPEARED ON THE ABOVE DATES. AS THERE IS REPEATED NON - COMPLIANCE BY THE ASSESSEE, WE DISPOSE OF THIS MATTER AFTER HEARING THE LD. DR AND GOING THROUGH THE RELEVANT DOCUMENTS ON RECORD. FINO FINTECH FOUNDATION ITA NO. 1914/MUM/2016 2 2. THE GROUNDS OF APPEA L FILED BY THE ASSESSEE READ AS UNDER: 1. THE ORDER OF THE CIT(A) IS AGAINST THE FACTS AND CIRCUMSTANCES OF THE CASE AND AGAINST THE PREPONDERANCES OF PROBABILITY OF THE CIRCUMSTANTIAL EVIDENCES. 2. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE CIT(A ) IS JUSTIFIED IN CONFIRMING THE ADDITION OF RS.1 , 87 ,3 1,000/ - U/S 68 MADE BY AO WHICH IS AGAINST THE SUBMISSION MADE BY THE APPELLANT COMPANY DURING THE COURSE OF ASSESSMENT PROCEEDINGS. 3. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICE R (AO) FOUND THAT THE APPELLANT HAD CREDITS OF RS.1,87,31,000/ - IN ITS BOOKS OF ACCOUNTS AGAINST THE NAME OF A LARGE NUMBER OF PERSONS. THE AO ASKED THE ASSESSEE TO GIVE THE NAME AND ADDRESS OF SUCH AGENTS IN THE RURAL PLACES FROM WHOM DEPOSITS WERE RECEIV ED. THE AO THEN ASKED THE ASSESSEE TO PRODUCE THE AGENTS WHO HAD ADVANCED SECURITY DEPOSITS DURING THE YEAR UNDER CONSIDERATION. THE AO NOTED THAT THE ASSESSEE FAILED TO SUBSTANTIATE THE CLAIM OF RECEIPT OF SECURITY DEPOSITS IN THE BOOKS OF ACCOUNTS. DES PITE BEING GIVEN THE SHOW CAUSE TO EXPLAIN WHY THESE CREDITS SHOULD NOT BE TREATED AS UNEXPLAINED, THE ASSESSEE FAILED TO GIVE ANY SATISFACTORY EXPLANATION OR FILE ANY DOCUMENTARY EVIDENCE FOR THE CREDITS IN THE BOOKS OF ACCOUNTS. THE AO FOUND THAT THE IDENTITY AND CREDITWORTHINESS OF THE LENDERS ARE IN SERIOUS DOUBT. THE MODE OF TRANSACTION BEING IN CASH, THE GENUINENESS OF THE SAME IS ALSO IN SERIOUS DOUBT. IN ABSE NCE OF THE NAME AND ADDRESS OF THE PERSONS, IT WAS NOT POSSIBLE ON THE PART OF THE AO TO CROSS - VERIFY THE TRANSACTIONS. HENCE, THE AO MADE AN ADDITION OF RS.1,87,31,000/ - U/S 68 OF THE ACT. FINO FINTECH FOUNDATION ITA NO. 1914/MUM/2016 3 4. AGGRIEVED BY THE ORDER OF THE AO, THE ASSESSEE FILED AN APPEAL BEFORE THE LD. CIT(A). WE FIND THAT THE LD. CIT(A) HAS RELIED ON THE DECISION THE DECISION OF THE HONBLE SUPREME COURT IN CIT V. DURGA PRASAD MORE 82 ITR 540 (SC), SUMATI DAYAL V. CIT 214 ITR 801 (SC), SRI MEENAKSHI MILLS LTD. 63 ITR 609 (SC), CIT V. DAU LAT RAM RAWATMULL (1973) 87 ITR 349 (SC), CHUHARMAL V. CIT (1988) 172 ITR 250 (SC) , DHAKESHWARI COTTON MILLS LTD. V. CIT (1954) 26 ITR 775 AND CONFIRMED THE ADDITION OF RS.1,87,31,000/ - MADE BY THE AO. 5. BEFORE US, THE LD. DR RELIES ON THE ORDER OF THE L D. CIT(A). 6. WE HAVE HEARD THE LD. DR AND PERUSED THE RELEVANT MATERIALS ON RECORD. IT IS WELL SETTLED THAT IN ORDER TO DISCHARGE THE ONUS U/S 68, THE ASSESSEE MUST PROVE THE FOLLOWING: (I) THE IDENTITY OF THE CREDITOR, (II) THE CAPACITY OF THE CREDITOR TO ADVANCE MONEY; AND (III) THE GENUINENESS OF THE TRANSACTION. AFTER THE ASSESSEE HAS ADDUCED EVIDENCE TO ESTABLISH PRIMA FACIE THE AFORESAID, THE ONUS SHIFTS TO THE DEPARTMENT. IN THE INSTANT CASE THE ASSESSEE HAS FA ILED TO ADDUCE BEFORE THE AO EVIDENCE TO ESTABLISH PRIMA FACIE THE AFORESAID. THE HONBLE SUPREME COURT IN THE CASE OF KALEKHAN MOHAMMED HANIF V. CIT 50 ITR 1 (SC) HAS HELD THAT THE ONUS IS ON THE ASSESSEE TO EXPLAIN THE NATURE AND SOURCE OF CASH CREDITS, WHETHER THEY STAND IN THE ASSESSEES ACCOUNT OR IN THE ACCOUNT S OF A THIRD PERSON. ALSO IT HAS BEEN HELD BY THE HONBLE SUPREME COURT IN GOVINDARAJULU V. CIT 34 ITR 807 (SC), LAKHMICHAND V. CIT 35 ITR 416 FINO FINTECH FOUNDATION ITA NO. 1914/MUM/2016 4 (SC), JAMNAPRASAD V. CIT 130 ITR 244 (SC) THAT WH ERE AN ASSESSEE HAS FAILED TO PROVE SATISFACTORILY THE SOURCE AND NATURE OF CERTAIN AMOUNTS OF CASH RECEIVED DURING THE ACCOUNTING YEAR, THE AO IS ENTITLED TO DRAW THE INFERENCE THAT THE RECEIPTS ARE OF AN INCOME NATURE. IN THE INSTANT CASE, THE ASSESSEE HAS FAILED TO PROVE BEFORE THE AO SATISFACTORILY THE SOURCE AND NATURE OF THE AMOUNTS OF CASH RECEIVED DURING THE YEAR UNDER CONSIDERATION. HENCE WE UPHOLD THE ORDER OF THE LD. CIT(A). 7. IN THE RESULT, THE APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 18/07/2018. SD/ - SD/ - ( JOGINDER SINGH) (N.K. PRADHAN) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED: 18/07/2018 RAHUL SHARMA, SR. P.S. COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A) - 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE . BY ORDER, //TRUE COPY// (DY./ASSTT. REGISTRAR) ITAT, MUMBAI