Shri Tarunkumar L.Patel, Surat V. The ACIT.,Circle-2, Surat

ITA 2006/AHD/2009

• Counselvise Citation: [2011] 135 COUNSELVISE.COM (IT) 1769 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 8 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-03-2011
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 10-03-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 19-06-2009
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: M C
• Keywords: Unexplained cash credit
• Section: 68; 6

Judgement Text

IN THE INCOME_TAX APPELLATE TRIBUNAL C BENCH, AHMEDABAD BEFORE SHRI H.L.KARWA AND SHRI A.N.PAHUJA ITA NO.2006/ AHD/2009 (ASSESSMENT YEARS : 2005-06) TARUNKUMAR L. PATEL PROP. : PREM ENTERPRISE B-7/8, TRADE HOUSE, OPP. FIRE BRIGADE, SALABATPURA, SURAT-395002. VS ACIT, CIRCLE-2, SURAT. (APPELLANT) (RESPONDENT) APPELLANT BY : NONE RESPONDENT BY : SHRI M.C.PANDIT, SR. D.R. ( (( ( )/ )/)/ )/ ORDER PER KARWA, JM: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF CIT(A)-II, SURAT DATED 09.3.2009 RELATING TO ASSESSMEN T YEAR 2005-06. 2. THE ONLY EFFECTIVE GROUND RAISED BY THE ASSESSEE IN TH IS APPEAL READS AS UNDER: THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) HAS ERRE D IN LAW AND ON FACTS IN CONFIRMING THE ADDITION TO THE TUNE OF RS.2,25,000/- ON THE GROUND OF ALLEGED UNEXPLAINED CASH CREDITS U/S 6 8 OF THE ACT. 3. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT THE ASSE SSING OFFICER DISALLOWED FOLLOWING LOANS/DEPOSITS U/S 68 OF THE ACT. (I) DASHRATH PATEL RS.306000 II) C.J.PANCHAL RS. 75000 (III) JAYANTILAL MAFATLAL RS. 75000 (IV) AMBALAL PRABHUDAS RS. 75000 (V) VINUBHAI RANCHODDAS RS. 75000 2 4. ON APPEAL, THE CIT(A) CONFIRMED THE ADDITION OF R S.2,25,000/- BEING THE LOANS OF RS.75,000/- EACH SHOWN IN THE NAMES O F SHRI JAYANTILAL MAFATLAL, SHRI AMBALAL PRABHUDAS AND VINUBHAI RANCHO DDAS. THE RELEVANT FINDINGS OF THE CIT(A) ARE AS UNDER: 8. .AS REGARDS, SHRI JAYANTILAL MAFATLAL, SHRI AMB ALAL PRABHUDAS AND SHRI VINUBHAI RANCHODDAS, ENQUIRES IN ASSESSMENT PROCEEDINGS HAD SHOWN THAT THEY WERE ONLY CASUAL LABOURE RS. THEY FAILED TO APPEAR BEFORE THE AO IN REMAND PROCEEDINGS , EVEN THOUGH THE OTHER TWO DEPOSITORS HAD APPEARED. EVEN THOUGH IT IS TRUE THAT NO CASH WAS DEPOSITED IN THEIR BANK ACCOUNTS PRIOR TO GI VING THE LOANS YET, THERE WERE TRANSFERS OF SUBSTANTIAL SUMS TO THE IR BANK ACCOUNTS WHICH ARE NOT EXPLAINED. IT HAS BEEN ARGUED BY THE AR THAT THE FACT THAT THESE THREE PERSONS OPERATED BANK ACCO UNTS, PROVED THEIR EXISTENCE SINCE, NO BANK WOULD OPEN ANY A CCOUNT WITHOUT CARRYING OUT THE REQUISITE VERIFICATIONS. THIS ARGUMENT IS NOT ACCEPTABLE, ESPECIALLY SINCE ALL THE THREE ACCOUNTS ARE I N CO- OPERATIVE . BANKS WHO ARE NOT KNOWN TO BE REALLY FOL LOWING THE GUIDELINES OF THE RBI. SURVEYS AND FIELD ENQUIRES IN T HE CASES OF SEVERAL CO-OPERATIVE BANKS IN SURAT, IN THE NOT SO DIST ANT PAST HAVE SHOWN HOW BOGUS ACCOUNTS HAVE BEEN OPENED IN SUCH BANKS SOME TIMES BY THE DIRECTORS THEMSELVES, AND HOW CRORES OF RUPE ES HAVE BEEN ROTATED AND LAUNDERED THROUGH SUCH ACCOUNTS. THE FA CT OF THE MATTER IS THAT, EVEN THOUGH THE SAID THREE PERSONS MAY HAVE OPENED BANK ACCOUNTS YET, THEY WERE ONLY CASUAL LABOURER S WITH A TEMPORARY ADDRESS, AND THE FACT THAT THEY HAD NOT BEE N AVAILABLE AT THE TIME OF THE REMAND PROCEEDINGS .SIMPLY PROVED THE FACT THAT SOMEBODY ELSE HAD BEEN OPERATING THEIR BANK ACCOUNTS. TH EY COULD NOT BE EXPECTED TO TRANSACT IN SUCH LARGE SUMS OF MONEY. I T IS THEREFORE HELD THAT THE LOANS OF RS.75,000 EACH SHOWN I N THE NAMES OF SHRI JAYANTILAL MAFATLAL, SHIR AMBALAL PRABHUDAS AND SHRI VINUBHAL RARICHHODAS WERE NOT GENUINE. MERE ENTRIES IN BOOKS OR IN BANK ACCOUNTS DO NOT ESTABLISH THE GENUINENESS OF SUCH TRANSACTIONS. SURROUNDING FACTS AND CIRCUMSTANCES NECESSARILY WILL HAVE TO BE TAKEN INTO CONSIDERATION. THEREFORE, THE A DDITION TO THE EXTENT OF RS.2,25,000 IS CONFIRMED, WHILE THE ASSESSEE GET S A RELIEF OF RS.3,81,000. 5. BEING AGGRIEVED BY THE ORDER OF CIT(A), THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 6. THE ABOVE APPEAL WAS FIXED FOR HEARING ON 24.8.20 09. NONE 3 APPEARED FOR THE ASSESSEE IN SPITE OF SERVICE OF NOTICE. T HE ASSESSEE WAS SERVED WITH THE NOTICE ON 19.6.2009 FIXING THE DATE O F HEARING ON 24.8.2009. THE ASSESSEE HAS ALSO NOT FILED ANY APPLICATION FOR ADJOURNMENT OF HEARING. UNDER THE CIRCUMSTANCES, WE ARE CONSTRAINED TO DISPOSE OF THE APPEAL ON MERITS, OF COURSE, AFTER HEARI NG THE LD. D.R. 7. WE HAVE HEARD THE LD. D.R. AT LENGTH AND HAVE AL SO PERUSED THE MATERIALS ON RECORD. IT IS WELL SETTLED THAT IN ORDER T O DISCHARGE THE ONUS U/S 68 OF THE I.T.ACT, 1961,THE ASSESSEE MUST PROVE THE FO LLOWING: I) THE IDENTITY OF THE CREDITOR, II) THE CAPACITY OF THE CREDITOR TO ADVANCE MONEY; AND III) THE GENUINENESS OF THE TRANSACTION. IT IS SEEN THAT THE CREDITORS, NAMELY, SHRI JAYANTILAL MAFATLAL, SHRI AMBALAL PRABHUDAS AND SHRI VINUBHAI RANCHODDAS WERE ONLY CASUAL LABOURERS. THEY DID NOT APPEAR BEFORE THE ASSESSING OFFICER IN THE REMAND PROCEEDINGS. IT IS CLAIMED THAT THERE WERE TRANSFERS OF SUBSTANTIAL SUMS TO THEIR BANK ACCOUNTS WHICH ARE NOT EXPLAINED. IN THE INST ANT CASE, THE ASSESSEE FAILED TO PROVE THE GENUINENESS OF THE TRANSACTION S. IN OUR VIEW, THE CIT(A) HAS CORRECTLY REACHED AT THE CONCLUSION THAT T HE FACT OF THE MATTER IS THAT, EVEN THOUGH THE THREE PERSONS MAY HAV E OPENED BANK ACCOUNTS, YET, THEY WERE ONLY CASUAL LABOURERS WITH A TEM PORARY ADDRESS AND THE FACT THAT THEY HAD NOT BEEN AVAILABLE AT THE TIME OF REMAND PROCEEDINGS SIMPLY PROVED THE FACT THAT SOMEBODY ELSE HAD BEEN OPERATING THEIR BANK ACCOUNTS. THEY COULD NOT BE EXPECTE D TO TRANSACT IN SUCH A LARGE SUMS OF MONEY. THE CIT(A) HAS CORRECTLY OBSE RVED THAT THE LOANS OF RS. 75,000/- EACH SHOWN IN THE NAMES OF SHRI JA YANTILAL MAFATLAL, SHRI AMBALAL PRABHUDAS AND SHRI VINUBHAI RANCHODDAS WE RE NOT GENUINE. IN OUR VIEW, THE MERE FURNISHING OF PARTICULARS, OR T HE MERE FACT OF PAYMENT BY AN ACCOUNT PAYEE CHEQUE, OR THE MERE SUBMISS ION OF A CONFIRMATORY LETTER BY THE CREDITOR IS, BY ITSELF, NOT ENOUGH TO SHIFT THE 4 ONUS TO THE DEPARTMENT. THUS, CONSIDERING THE ENTIRE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE, WE DO NOT FIND ANY INFIR MITY IN THE FINDINGS OF THE CIT(A) ON THIS ISSUE AND ACCORDINGLY, WE UPHOLD THE ORDER OF CIT(A) AND DISMISS GROUND NO.1 OF THE APPEAL. 8. IN THE RESULT, THE APPEAL IS DISMISSED. THE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 28.8. 2009. SD/- (A.N.PAHUJA) ACCOUNTANT MEMBER SD/- (H.L.KARWA) JUDICIAL MEMBER AHMEDABAD, DATED:28.8.2009 PSP* COPY TO : (1) THE ASSESSEE (2) THE ASSESSING OFFICER (3) THE CIT(A) CONCERNED, (4) THE CIT, CONCERNED, (5) THE DR, ITAT, AHMEDABAD, (6) GUARD FILE. BY ORDER ASSTT. REGISTRAR / D EPUTY REGISTRAR ITAT, AHMEDABAD BENCHES AHMEDABAD.