Sri Vaishnavi Global Avenues and Infra Solutions Private Limited , Hyderabad V. Income Tax Officer, Ward-3(3), Hyderabad

ITA 1925/Hyd/2018

• Counselvise Citation: [2022] 104 COUNSELVISE.COM (IT) 1408 (ITAT-HYDERABAD)
• Duration Of Justice: 3 year(s) 3 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-01-2022
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB-B
• Next Hearing Date: 27-09-2022
• Assessment Year: 2014-2015
• Appeal Filed On: 18-09-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: ROHIT MAJUMDAR
• Section: 68; 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL Hyderabad ‘ B ‘ Bench, Hyderabad (Through Video Conferencing) Before Shri S.S. Godara, Judicial Member AND Shri Laxmi Prasad Sahu, Accountant Member O R D E R Per S. S. Godara, J.M. This assessee’s appeal for A.Y. 2014-15 arises from the Commissioner of Income Tax (Appeals) - 8, Hyderabad’s order dated 11.04.2018 in ITA No.10300/CIT(A)-8/Hyd/2017-18, involving proceedings u/s. 143(3) of the Income Tax Act, 1961 [in short, ‘the Act’]. Case called twice. None appears at assessee’s behest. It is accordingly proceeded exparte. 2. Coming to the assessee’s sole substantive grievance that both the lower authorities have erred in law and on facts in making unsecured loan addition of Rs.52,17,224/-, we note that ITA No.1925/Hyd/2018 Assessment Year: 2014-15 M/s. Sri Vaishnavi Global Avenues and Infra Solutions Private Limited, Hyderabad. PAN : AAPCS0694C. Vs. The Income Tax Officer, Ward-3(3), Hyderabad. (Appellant) (Respondent) Assessee by: None Revenue by : Shri Rohit Majumdar Date of hearing: 03.01.2022 Date of pronouncement: 05.01.2022 ITA No.1925/Hyd/2018 2 the CTI(A)’s detailed discussion has confirmed the assessment findings to this affect as under : “4. Before me, the AR filed copies of PAN and the account copies of the creditors in the books of the appellant. He submitted that the unsecured creditors, who are none other than the Directors of the company, have not yet filed return of income for the year under consideration. The AR further submitted that they are agriculturists and there is no other source of income. No written submissions were made by the AR before me. 5. I have considered the issue and submissions made by the AR. As per the provisions of section 68, the onus is on the assessee to prove the identity, genuineness and creditworthiness of the unsecured creditor in respect of the amounts credited in the books of accounts of the assessee. In the present case, it is seen that the unsecured creditors are none other than the two Directors of the appellant company. The said two Directors are Sri N. Rajendra Prasad and his Wife Smt. N. Nirmala Devi and have not filed the return of income for the A. Y. 2014-15, When asked to file the confirmations by the AD during the assessment proceedings in respect of the loans given by them, they have filed letters dt. 29.12.2016 stating that they will file the returns of income within 30 days. As submitted by the AR before me, they have still not filed the returns of income. Though it was contended by the AR before me that the said two directors are agriculturists and there is no other source of income, he failed to produce any evidence with regard to the extent of land holding, crops grown, agricultural income derived etc. The contention of the AR that they have no other source of income except agricultural income raises serious doubts on the creditworthiness of the unsecured creditors. As mentioned above, the appellant failed to discharge the onus of Proving the creditworthiness of the unsecured creditors. 5.1 I It is seen from the ledger accounts of Sri N. Rajendra Prasad in the books of the appellant company that he gave Rs. 2,00,000/- in cash on 10.10.2013 apart from transfer of money through banking channels on various dates. It is also seen that there were cash deposits in the bank accounts of the unsecured creditors before issuance of loan by way of cheques to the appellant company. They are as under: Cash deposits in the Andhra Bank SB A/c of Sri N. Rajendra Prasad for the period 01.04.2013 to 31.03.2014. Sl.No. Date Amount (Rs.) 1 22.04.2013 9,00,000 2 02.09.2013 1,00,000 3 30.12.2013 8,00,000 4 01.02.2014 1,00,000 5 06.02.2014 4,00,000 6 22.02.2014 10,000 7 07.03.2014 31,000 ITA No.1925/Hyd/2018 3 Cash deposits in the HDFC Bank SB A/c of Smt. N. Nirmala Devi for the period 01.04.2013 to 31.03.2014. Sl.No. Date Amount (Rs.) 1 03.04.2013 30,000 2 03.04.2013 20,000 3 03.06.2013 50,000 4 24.06.2013 40,000 5 27.08.2013 50,000 6 30.09.2013 50,000 7 02.12.2013 45,000 8 02.01.2014 50,000 9 04.02.2014 50,000 10 04.03.2014 50,000 5.2 Apart from furnishing PAN Number and letter from unsecured creditors that they would be filing the IT returns for the A.Y.2014-15 shortly, the appellant failed to discharge the onus cast on him under the provisions of section 68 of the Act. As stated in the above para, it can be seen that cash was deposited in the accounts of the creditors before issuance of cheques to the appellant company. Furthermore, no returns of income were filed by the unsecured creditors, who are none other than the Directors of the company. It is not known as to how they could generate so much cash for depositing in their Bank A/cs and issuing cheques to the appellant company. Even with regard to cheque entries in the Bank Statements of the creditors no explanation / source was offered. 5.3 All the above mentioned crucial facts coupled in with the failure of the appellant company in proving the creditworthiness of the unsecured creditors would lead to incontrovertible conclusion that the appellant failed to discharge the onus cast u/s 68 of the Act. In view of the above, the action of the AO in making the addition of loan from unsecured creditors of Rs.52,17,224/- is upheld. 5.4 In Ground No.5 of appeal, it was contested that the AO failed to mention the section under which the addition was made. From the facts as narrated in the assessment order, it can be easily understood that the AO was not satisfied with the explanation offered for the claim of unsecured loans from the two directors and therefore addition was made. There is only one section under which the said addition could have been made i.e u/s 68. Mere failure to mention the section under which the addition was made would not be fatal to the assessment order. In view of the above, the addition made by the AO is upheld and the Grounds of appeal are dismissed.” ITA No.1925/Hyd/2018 4 3. It is sufficiently clear from a perusal of the case records that all that the assessee had done was to plead that the impugned sum(s) had come from two of its Directors Shri N. Rajendra Prasad and Smt. N. Nirmala Devi, who had themselves deposited huge cash amounts in the relevant previous year between 03.04.2013 to 07.03.2014; as the case may be(supra). We therefore express our complete agreement with the learned CIT(A)’s detailed discussion that the same raises a serious doubt on genuineness of the impugned unsecured loans. We thus quote Sumati Dayal Vs. CIT (1995) [214 ITR 801] (SC) and CIT Vs. Durga Prasad More (1971) [82 ITR 540] (SC) that any evidence submitted during the course of income tax proceedings has to be examined in light of human probabilities by removing all blinkers and reject the assessee’s sole substantive grounds raised in the instant appeal. 4. This assessee’s appeal is dismissed in above terms. Order pronounced in the Open Court on 5 th January, 2022. Sd/- Sd/- (LAXMI PRASAD SAHU) ACCOUNTANT MEMBER (S.S. GODARA) JUDICIAL MEMBER Hyderabad, dated 5 th January, 2022. TYNM/sps ITA No.1925/Hyd/2018 5 Copy to: S.No Addresses 1 M/s. Sri Vaishnavi Global Avenues and Infra Solutions Private Limited, Plot No.56, Cyber Meadows, Masjid Banda, Kondapur Hyderabad. 2 The Income Tax Officer, Ward – 3(3), Hyderabad. 3 CIT (A)-8, Hyderabad 4 Pr. CIT-3, Hyderabad 5 DR, ITAT Hyderabad Benches 6 Guard File By Order