Nishant Construction Pvt. Ltd., Ahmedabad V. The Income tax Officer,Wrd-5(1), Ahmedabad

ITA 2046/AHD/2010

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 2086 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 10 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-05-2013
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 17-04-2013
• Assessment Year: 2001-2002
• Appeal Filed On: 11-06-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: T SANKAR
• Keywords: Unexplained cash credit; Difference of opinion; Change of opinion
• Section: 143(3); 147; 131; 68; 148

Judgement Text

ITA NO 2046 /A/2010 . A.Y. 2001- 02 1 IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, AHMEDABAD (BEFORE SHRI G.C.GUPTA VICE PRESIDENT & SHRI ANIL C HATURVEDI, A.M.) I.T. A. NO. 2046/AHD/2010 (ASSESSMENT YEAR: 2001-02) NISHANT CONSTRUCTION (P) LTD B- 1, REGENCY PARK, NR. KALAYAN SOC., MITHAKHALI, AHMEDABAD (APPELLANT) VS. THE DCIT, CIRCLE-5 AHMEDABAD (RESPONDENT) PAN:AAACN 3752 B APPELLANT BY : SMT. URVASHI SODHAN A.R. RESPONDENT BY : SHRI T. SANKAR SR. D.R. ( )/ ORDER DATE OF HEARING : 17/04/201 3 DATE OF PRONOUNCEMENT : 10-05-2013 PER SHRI ANIL CHATURVEDI,A.M. 1. THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE ORDER OF LD. CIT(A)-XVI, AHMEDABAD DATED 31.3.2010 FOR THE ASSES SMENT YEAR 2001-02. ITA NO 2046 /A/2010 . A.Y. 2001- 02 2 2. THE FACTS AS CULLED OUT FROM THE ORDERS OF THE L OWER AUTHORITIES AS UNDER. 3. ASSESSEE IS A COMPANY ENGAGED IN THE BUSINESS OF CONSTRUCTION WORK. IT FILED ITS RETURN OF INCOME FOR A. Y. 2001-02 ON 29.10.2001 SHOWING TOTAL INCOME AT RS. 8,12,660/ -. THE ASSESSMENT WAS FINALIZED UNDER SECTION 143(3) VIDE ORDER DATED 23.3.2004 AND TOTAL INCOME WAS DETERMINED AT RS. 19,78,520. AGAINST THE ORDER OF ASSESSING OFFICER, ASSESSEE CARRIED THE MATTER BEFORE CIT(A). IN APPEAL BEFORE CIT(A), THE DISALLOWANCE TO THE EXTENT OF RS. 7,39,846/- WERE D ELETED. SUBSEQUENTLY THE ASSESSMENT WAS REOPENED BY ISSUE O F NOTICE UNDER SECTION 148 DATED 25.3.2008 AND THERERAFTER T HE ASSESSMENT WAS FRAMED U/S 143(3) READ WITH SECTION 147 VIDE ORDER DATED 28.8.2009 AND THE TOTAL INCOME WAS DETE RMINED AT RS. 39,38,670/-. AGGRIEVED BY THE ORDER OF ASSESSI NG OFFICER, ASSESSEE CARRIED THE MATTER BEFORE CIT(A). CIT(A) V IDE ORDER DATED 31.3.2010 GRANTED PARTIAL RELIEF TO THE ASSES SEE. AGGRIEVED BY THE AFORESAID ORDER OF CIT(A), THE ASS ESSEE IS NOW IN APPEAL BEFORE US AND HAS RAISED THE FOLLOWIN G GROUNDS- ITA NO 2046 /A/2010 . A.Y. 2001- 02 3 1. THE ID. CIT (A) HAS GROSSLY ERRED IN LAW AN D ON THE FACTS IN NOT ADJUDICATING THE GROUND TAKEN BY THE APPELLA NT AGAINST THE ACTION OF AO IN FRAMING ASSESSMENT U/S 143 (3) R.W.S. 147 OF THE ACT BEYOND FOUR YEARS FROM THE END OF THE RELEV ANT ASSESSMENT YEAR NOT APPRECIATING THE FACT THAT ALL THE MATERIAL FACTS NECESSARY FOR ASSESSMENT WAS DISCLOSED IN THE ORIGINAL RETURN OF INCOME AND MERE CHANGE OF OPINION DOES NO T EMPOWER THE ASSESSING OFFICER TO REOPEN CONCLUDED ASSESSMENT SIMPLY ON THE BASIS OF SOME VAGUE TAX EV ASION PETITION RECEIVED SUBSEQUENTLY BY AO. THE ORDER OF ID. CIT (A) BEING UNJUST, UNFAIR AND AGAINST PRINCIPLES OF NATU RAL JUSTICE DESERVES TO BE QUASHED. 2. THE ID. CIT (A) HAS GROSSLY ERRED IN LAW AND O N FACTS IN CONFIRMING ACTION OF THE AO IN TREATING BOOKING ADV ANCES OF RS. 8 00,000/- RECEIVED AS UNEXPLAINED CASH CREDIT U/S 68 OF THE ACT. BOTH THE LOWER AUTHORITIES HAVE ERRED IN NOT A PPRECIATING THE PROVISIONS OF SECTION 68 OF THE ACT THAT ONCE T HE APPELLANT HAS PROVED THE IDENTITY, GENUINENESS AND CREDITWORT HINESS OF THE PARTIES NO ADVANCES REMAIN UNEXPLAINED. THE ID. CIT (A) OUGHT TO HAVE DELETED THE ADDITION MADE BY AO. 4. GROUND NO. 1:- THIS GROUND WAS NOT ARGUED AND, T HEREFORE, THE SAME IS DIMISSED AS NOT PRESSED 5. GROUND NO. 2:- ADDITION OF RS. 8 LAC UNDER SECTI ON 68:- DURING THE YEAR UNDER CONSIDERATION THE ASSESSEE HAD CREDI TED LOANS AND DEPOSITS FROM VARIOUS PARTIES AGGREGATING TO RS . 8,00,000/- AS BOOKING DEPOSITS. THE ASSESSMENT WAS REOPENED BY ISSUE OF NOTICE UNDER SECTION 148 DATED 25.3.2008 FOR THE REASON THAT PSEUDONYMOUS TAX EVASION PETITION WAS RECEIVED AGAI NST ASSESSEE WHEREIN IT WAS ALLEGED THAT AMOUNTS SHOWN AS CREDIT ITA NO 2046 /A/2010 . A.Y. 2001- 02 4 IN THE NAME OF VARIOUS PARTIES TOWARDS BOOKING DEPO SIT WERE NOT GENUINE. THE ASSESSEE WAS ASKED TO FILE DETAILS OF BOOKING ACCOUNT RECEIVED AND ALSO TO FURNISH EVIDENCE CONFI RMING THE IDENTITY, CAPACITY, CREDITWORTHINESS AND GENUINENES S OF THE TRANSACTION. THE ASSESSEE SUBMITTED COPIES OF THE LEDGER ACCOUNTS OF THE PARTIES BUT DID NOT SUBMIT CONTRA A CCOUNT, CONFIRMATION PAN NUMBERS FROM WHOM IT HAD RECEIVED THE BOOKING ADVANCE. THE ASSESSING OFFICER ALSO NOTICED THAT ASSESSEE HAD MADE REPAYMENT OF DEPOSITS TO THE PART IES IN A.Y. 2002-2003 IN CASH. THE A.O. THUS CONCLUDED THA T THE PAYMENT OF DEPOSIT BY CASH LEADS TO AN INFERENCE TH AT THE TRANSACTIONS WERE FISHY AND THE INITIAL ACCEPTANCE OF BOOKING ACCOUNT IN THE NAME OF VARIOUS PARTIES WAS JUST ACC OMMODATION ENTRY. HE, THEREFORE CONCLUDED THAT ASSESSEE WAS NO T ABLE TO PRODUCE COGENT AND CONVINCING EVIDENCE WITH RESPECT TO BOOKING ADVANCE AND ACCORDINGLY ADDED THE AGGREGATE AMOUNT OF RS. 8 LACS CREDITED IN ASSESSEES BOOKS AS BOOK ING ADVANCE RECEIVED FROM FOLLOWING PARTIES BY INVOKING THE PRO VISIONS OF SECTION 68. ITA NO 2046 /A/2010 . A.Y. 2001- 02 5 SR. NO. DATE NAME AMOUNT (RS) 1. 8-4-2000 TARACHAND ROOPCHAND, C/0. DEVKINANDAN 1,50,000 2. 8-4-2000 KEY IMPEX (1) PVT. LTD., C/0 DEVKINANDAN 1,50,000 3. 8-4-2000 HASMUKHBHA I CHUNILAL OZA, C/0 DEVIKINANDAN 2,00,000 4. 12-5-2000 MUDRA FINVEST (GUJ) LTD., C/0 DEVIKINANDAN 3,00,000 TOTAL 8,00,000 6. AGGRIEVED BY THE ACTION OF THE A.O. , ASSESSEE C ARRIED THE MATTER BEFORE CIT(A). CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE UPHELD THE ORDER OF A.O. BY HOLDING AS UNDER:- 5. I HAVE CONSIDERED THE SUBMISSIONS. THE FACT TH AT CHEQUES ARE SHOWN AS RECEIVED AND CASH IS SHOWN AS REPAID TO THE CREDITORS CREATES DOUBT ABOUT THE ITA NO 2046 /A/2010 . A.Y. 2001- 02 6 GENUINENESS OF THE CREDITORS. HAD THE CREDITORS BE EN GENUINE, THE APPELLANT WOULD HAVE RETURNED THE ADVA NCES AGAINST BOOKING TO THEM BY CHEQUE, IF THEY HAVE PAI D CHEQUE TO THE APPELLANT. THERE WAS NO NEED FOR THE APPELLANT TO WITHDRAW THE AMOUNT FROM THE BANK AND THEN PAY CASH TO SUCH CREDITORS INSTEAD OF MAKING PAYMEN T BY CHEQUE ITSELF. THE INABILITY OF THE APPELLANT TO P RODUCE THE CREDITORS TO FURNISH THE DETAILS ABOUT THEIR PAN AN D TO PROVE THEIR CREDITWORTHINESS & THE IDENTITY, GOES TO SHOW THAT THE CREDITORS ARE NOT GENUINE. THIS FACT IS SUPPORTED BY THE TAX EVASION PETITION FILED BY THE COMPLAINANT WHOSE ADD RESS WAS USED BY THE APPELLANT AS THE C/0 ADDRESS. THER EFORE, THERE IS NO DOUBT THAT THE CREDITORS ARE NOT GENUIN E, THE CREDITS RECEIVED DURING THE YEAR UNDER APPEAL OF RS . 8 LAC IS THEREFORE HELD TO BE UNEXPLAINED CASH CREDIT U/S. 6 8. IN OTHER WORDS, ADDITION OF RS. 8,00,000/- IS CONFIRME D. 7. AGGRIEVED BY THE ACTION OF THE CIT(A), THE ASSE SSEE IS NOW IN APPEAL BEFORE US. 8. BEFORE US THE LEARNED A.R. SUBMITTED THAT THE A GGREGATE OF RS. 8 LAC THAT WAS RECEIVED BY THE ASSESSEE WAS TOWARDS THE ITA NO 2046 /A/2010 . A.Y. 2001- 02 7 BOOKING OF FLATS AND THE SAME WAS REFLECTED IN THE AUDITED BALANCE SHEET OF THE COMPANY. THE LEARNED A.R. ALS O PLACED ON RECORD THE COPY OF THE LEDGER OF BOOKING ADVANCE . THE LEARNED A.R. THUS SUBMITTED THAT THE BOOKING ADVANC E WAS RECEIVED BY CHEQUE AND WAS ACCOUNTED FOR IN THE BOO KS OF ACCOUNT AND THE BOOKS OF ACCOUNTS ARE AUDITED BY CHARTERED ACCOUNTANTS AND NO ADVERSE COMMENT WAS MADE BY THE AUDITORS. IT WAS THUS SUBMITTED THAT THE ADDITION H AS BEEN WRONGLY MADE AND THE SAME BE DELETED. THE LEARNED D.R. ON THE OTHER HAND SUBMITTED THAT THE ASSESSING OFFICER HAD GRANTED SUFFICIENT OPPORTUNITY TO THE ASSESSEE TO E STABLISH THE CREDITWORTHINESS AND GENUINENESS OF THE PARTIES WHI CH THE ASSESSEE HAS FAILED TO DO. FURTHER NO EVIDENCE HAS BEEN FURNISHED BY THE ASSESSEE ABOUT THE TERMS AND COND ITIONS FOR WHICH THE BOOKING ADVANCE WAS RECEIVED, THE ALLOTME NT LETTER, REASON FOR TERMINATION OF BOOKING. FURTHER THE ASSE SSEE HAS NOT SUBMITTED THE FLAT NUMBER TOWARDS WHICH THE BOOKING ADVANCE WAS RECEIVED AND NO VALID REASON FOR REFUNDING THE AMOUNTING IN CASH WAS GIVEN BY THE ASSESSEE. THE LEARNED D.R . FURTHER IN THE WRITTEN SUBMISSIONS HAS SUBMITTED THAT THE ASSE SSEE HAD ITA NO 2046 /A/2010 . A.Y. 2001- 02 8 MERELY FURNISHED NAMES OF THE PERSONS TO THE ASSESS ING OFFICER WITH AMOUNT BUT WITHOUT ANY ADDRESS. THE LEARNED D. R. THEREFORE SUBMITTED THAT IN THE ABSENCE OF ANY ADDR ESS OF THE PARTIES, THE ASSESSING OFFICER COULD NOT ISSUE SUMM ONS UNDER SECTION 131 OF THE ACT. IT WAS FURTHER SUBMITTED TH AT EVEN IN THE COPY OF THE LEDGER ACCOUNTS THAT WAS SUBMITTED BY T HE ASSESSEE THE ADDRESS WAS NOT MENTIONED. THE LEARNED D.R. FURTHER POINTED OUT TO PARA 4.3 OF THE AO ORDER WHE REIN IT WAS STATED BY THE ASSESSING OFFICER THAT THE TAX EVASIO N PETITION WAS VERY SPECIFIC AND THE COMPLAINANT WHO HAD PROV IDED THE INFORMATION WAS ACTUALLY THE PERSON THROUGH WHOM BO OKING ADVANCE WERE PROCURED BY THE ASSESSEE. THUS THE B ASIC ONUS WAS NOT DISCHARGED BY THE ASSESSEE AND THUS THE ASS ESSEE HAS FAILED TO SATISFY EVEN THE BARE MINIMUM REQUIRE MENT BEFORE ONUS CAN BE SHIFTED TO THE A.O. HE THUS SUPPORTED O F A.O. 9. SUBSEQUENT TO THE DATE OF HEARING, THE LD. A.R. ON 26.4.2013 SUBMITTED THE ADDRESSES OF THE PERSONS FROM WHOM TH E ADVANCE WAS RECEIVED. THE SAME IS NOT TAKEN ON REC ORD FOR THE REASON THAT FIRSTLY THE SUBMISSIONS HAVE BEEN MADE AFTER A WEEK FROM THE DATE OF HEARING AND SECONDLY THE ADDR ESSES THAT ITA NO 2046 /A/2010 . A.Y. 2001- 02 9 WERE SUBMITTED ON 26.4.2013 THE REVENUE DID NOT HAD AN OPPORTUNITY FOR ITS EXAMINATION OR TO ARGUE ON THE SUBMISSIONS AND THIRDLY, THE AFORESAID DETAILS WERE NEVER SUB MITTED BEFORE THE ASSESSING OFFICER OR CIT(A) AND THEREFORE THEY DID NOT HAD ANY OPPORTUNITY OF EXAMINING THE SAME. 10. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSE D THE MATERIAL ON RECORD. IT IS AN UNDISPUTED FACT THAT THE ASSESS EE HAD RECEIVED THE BOOKING ADVANCE AND HAS SHOWN BOOKING ADVANCE IN ITS BALANCE SHEET. THE ASSESSEE HOWEVER DID NOT SUBMIT ANY DETAILS LIKE FLAT NUMBER FOR WHICH THE ADVANCE WAS RECEIVED, THE TERMS AND CONDITIONS OF BOOKING, COPY OF ALLOTMENT LETTER OF BOOKING, ADDRESSES AND PAN NUMBERS OF THE DEPOSITOR S REASONS FOR TERMINATION OF BOOKING, CORRESPONDENCE WITH RESPECT TO BOOKING/CANCELLATION ETC. EITHER BEFORE THE A.O, CIT(A) OR BEFORE US. THE ASSESSEE DID NOT EVEN SUB MIT THE FULL POSTAL ADDRESSES, PAN NUMBERS OF THE PERSON FROM WH OM IT IS ALLEGED TO HAVE RECEIVED THE DEPOSITS AND THEREFORE WE ARE OF THE VIEW THAT ASSESSING OFFICER COULD NOT MAKE NECE SSARY ENQUIRIES BY ISSUE OF SUMMONS. ITA NO 2046 /A/2010 . A.Y. 2001- 02 10 11. IT IS A SETTLED LAW THAT U/S 68 THE INITIAL O NUS IS ON THE ASSESSEE TO PROVE THE THREE INGREDIENTS I.E. IDENTITY,THE CR EDITWORTHINESS OF THE PERSON FROM WHOM THE MONIES WERE TAKEN AND T HE GENUINENESS OF THE TRANSACTION. THE ONUS IS SHIFTED ON THE ASSESSING OFFICER ONCE THE AFORESAID DETAILS ARE SU BMITTED BY THE ASSESSEE. 12. IN THE CASE OF CIT VS. N.R. PORTFOLIO (P) LTD . (2013) 29 TAXMANN. COM 291 (DELHI) THE HON. HIGH COURT HAS OB SERVED AS UNDER:- AN ASSESSEES DUTY TO ESTABLISH THAT THE AMOUNTS W HICH THE ASSESSING OFFICER PROPOSES TO ADD BACK U/S 68 ARE P ROPERLY SOURCED, DOES NOT CEASE BY MERELY FURNISHING THE NA MES, ADDRESSES AND PAN PARTICULARS. THAT APART, THE CON CEPT OF SHIFTING ONUS DOES NOT MEAN THAT ONCE CERTAIN FAC TS ARE PROVIDED, THE ASSESSEES DUTIES ARE OVER. IF ON VER IFICATION OR DURING PROCEEDINGS, THE ASSESSING OFFICER CANNOT CO NTACT THE SHARE APPLICANTS, OR THAT INFORMATION BECOMES UNVER IFIABLE, OR THERE ARE FURTHER DOUBTS IN THE PURSUIT OF SUCH DE TAILS, THE ONUS SHIFTS BACK TO THE ASSESSEE. AT THAT STAGE, IF IT F LATERS, THE CONSEQUENCE MAY BE AN ADDITION U/S 68. 13. IN THE PRESENT CASE THE ASSESSEE FURNISHED THE NAMES BUT DID NOT FURNISH THE PAN NOS, ADDRESSES OF THE DEPOSITOR S AND OTHER DETAILS CALLED FOR BY THE ASSESSING OFFICER. IN THE ABSENCE OF REQUIRED DETAILS, THE ASSESSING OFFICER COULD NOT I SSUE SUMMONS TO THE DEPOSITORS AND THEREFORE COULD NOT C ONTACT THE ITA NO 2046 /A/2010 . A.Y. 2001- 02 11 DEPOSITORS AND THE INFORMATION WAS UNVERIFIABLE, MO RE SO, WHEN THE ASSESSING OFFICER HAD RECEIVED TAX EVASION PETI TION WHEREIN HE WAS INFORMED THAT THE BOOKING DEPOSITS S HOWN BY THE ASSESSEE WERE NOT GENUINE. THUS IT CANNOT BE S AID THAT ASSESSEE HAS DISCHARGED THE INITIAL ONUS CAST UPON IT AS REQUIRED UNDER SECTION 68. WE ALSO FIND SUPPORT TO OUR VIEW BY THE AFORESAID DECISION OF DELHI HIGH COURT. IN VIEW OF THE AFORESAID FACTS, WE FIND NO REASON TO INTERFERE WIT H THE ORDER OF A.O IN MAKING ADDITION U/S 68 AND THUS THIS GROUND OF ASSESSEE IS DISMISSED. 14. THUS, THE APPEAL OF THE ASSESSEE IS DISMISS ED. ORDER PRONOUNCED IN OPEN COURT ON 10 -05 - 2013. SD/- SD/- (G.C.GUPTA) (ANIL CHATURVEDI) VICE PRESIDENT ACCOUNTANT MEMBER AHMEDABAD. TRUE COPY RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AHMEDA BAD