ITO, CHENNAI V. Smt. Simran Raheja, CHENNAI

ITA 2075/CHNY/2010

• Counselvise Citation: 207521714 RSA 2010
• Duration Of Justice: 9 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-10-2011
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 30-08-2011
• Assessment Year: 2007-2008
• Appeal Filed On: 07-12-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: ANIRUDH RAI
• Assessee Lawyers: ANIL NAIR
• Keywords: Unexplained cash credit; Onus to prove; Set aside
• Section: 68

Judgement Text

IN THE INCOME-TAX APPELLATE TRIBUNAL CHENNAI D BENCH, CHENNAI. BEFORE SHRI HARI OM MARATHA, JUDICIAL MEMBER AND SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER I.T.A. NO. 2075/MDS/2010 ASSESSMENT YEAR: 2007-08 THE INCOME TAX OFFICER, WARD XV(3), CHENNAI 600 034. VS. SMT. SIMRAN RAHEJA, NO. 834, ANNA SALAI, II FLOOR, RAHEJA COMPLEX, CHENNAI 2. [PAN: BBTPS6542L] (APPELLANT) (RESPONDENT) REVENUE BY : SHRI ANIRUDH RAI, CIT ASSESSEE BY : SHRI ANIL NAIR, C.A. DATE OF HEARING : 30.08.2011 DATE OF PRONOUNCEMENT 03.10.2011 ORDER PER HARI OM MARATHA, J.M. THIS APPEAL OF THE REVENUE, FOR THE ASSESSMENT YEAR 2007-08, IS DIRECTED AGAINST THE ORDER OF THE LD. CIT(A) XII, CHENNAI, D ATED 29.09.2010. 2. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT T HE ASSESSEE, AN INDIVIDUAL, FILED HER RETURN OF INCOME FOR THE ASSESSMENT YEAR 2007-0 8 ON 27.03.2008 DECLARING TOTAL INCOME OF ` .1,52,620/-. THE ASSESSEE HAS SHOWN A SUM OF ` .26,55,000/- AND ` .27,15,500/- AS BALANCE OF SUNDRY CREDITORS AT THE END OF THE YEAR AMONG OTHER SUNDRY CREDITORS. THESE AMOUNTS HAVE BEEN SHOWN AS DUE TO SHRI T.P. ANANDH AND SMT. KALAVANTHI BHAI, RESPECTIVELY. THE ASSESSI NG OFFICER ISSUED LETTERS TO ALL THE CREDITORS TO VERIFY ALL THESE CREDITORS. A LETT ER WAS ISSUED ON 07.12.2009 TO THE ASSESSEE POINTING OUT THE NAMES OF TWELVE CREDITORS TO WHOM LETTERS WERE ISSUED SEEKING CONFIRMATION OF THEIR CREDITS, BUT NO CONFI RMATIONS WERE RECEIVED, TILL THAT DATE FROM THEM. AGAIN THE ASSESSEE WAS GIVEN OPPORT UNITY TO PROVE THE I.T.A. I.T.A. I.T.A. I.T.A. NO. NO. NO. NO.2075/ 2075/ 2075/ 2075/MDS/ MDS/ MDS/ MDS/10 1010 10 2 GENUINENESS OF THE CREDITS RECEIVED FROM THESE PERS ONS. DURING THIS PERIOD, REPLIES FROM SOME CREDITORS WERE RECEIVED DIRECTLY, CONFIRM ING THEIR CREDITS. THE ASSESSEE PRODUCED CONFIRMATION, ALONG WITH THEIR PAN, IN SOM E OTHER CASES. THE ASSESSEE REPLIED VIDE LETTER DATED 16.12.2009 THAT SHE WAS G IVEN TO UNDERSTAND THAT SHRI T.P. ANANDH AND SMT. KALAVANTHI BHAI WERE NOT ALIVE. ON 31.03.2009, THE ASSESSEE FURNISHED A COPY OF HER OWN BANK ACCOUNT IDENTIFYIN G THE CREDITS WHICH SHE CLAIMED AS CREDITS FROM SHRI T.P.ANANDH AND SMT. KALAVANTHI BHAI. FROM THERE, THE ASSESSING OFFICER ACCEPTED THE IDENTITY OF BOTH OF THEM, BUT REGARDING THEIR CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTION S STILL REMAINED TO BE PROVED. CONSEQUENTLY, HE HAS ADDED THE TOTAL CREDIT AMOUNTS STANDING IN THE NAMES OF SHRI T.P.ANANDH OF ` .30,05,000/- AND IN THE NAME OF SMT. KALAVANTHI BHA I TOTALING TO ` .27,50,000/- AS CREDITWORTHINESS OF THE CREDITORS S O ALSO THE GENUNITY OF THE TRANSACTION WAS NOT ACCEPTED AS ESTABLISHED ON RECO RD. 3. AGGRIEVED, THE ASSESSEE TOOK THIS MATTER BEFORE THE LD. CIT(A), WHO HAS DELETED THE ENTIRE ADDITIONS SO MADE IN HER HANDS. 4. NOW THE REVENUE IS AGGRIEVED. FOLLOWING GROUNDS HAVE BEEN RAISED: 1. THE ORDER OF THE LEARNED CIT(A) IS CONTRARY TO LAW AND FACTS OF THE CASE. 2. THE ID CIT(A) ERRED IN DELETING THE ADDITION OF ` .57,55,000/- MADE U/S 68 AS UNEXPLAINED CREDITS. 3. THE ID CIT(A) OUGHT TO HAVE APPRECIATED THE FAC T THAT THE ASSESSEE HAD NOT DISCHARGED HIS ONUS FULLY AS THE C REDIT WORTHINESS OF THE CREDITORS WERE NOT ESTABLISHED BY THE ASSESSEE AND EVEN CONFIRMATION LETTERS FROM THE CREDITORS / THEIR LEG AL HEIRS WERE NOT PRODUCED. 4. THE ID CIT(A) OUGHT TO HAVE APPLIED THE DECISIO N OF THE MADRAS HIGH COURT IN THE CASE OF MANGILAL JAIN (315 ITR 10 5) WHEREIN IT WAS I.T.A. I.T.A. I.T.A. I.T.A. NO. NO. NO. NO.2075/ 2075/ 2075/ 2075/MDS/ MDS/ MDS/ MDS/10 1010 10 3 HELD THAT THE ASSESSEE SHOULD PROVE THE CREDITWORTH INESS AND THE GENUINENESS OF THE TRANSACTION BEYOND REASONABLE DO UBT. 5. FOR THESE AND OTHER GROUNDS THAT MAY BE ADDUCED AT THE TIME OF HEARING, IT IS PRAYED THAT THE ORDER OF THE LEARNED CIT(A) MAY BE SET ASIDE AND THAT OF THE ASSESSING OFFICER RESTORED. 5. WE HAVE HEARD RIVAL SUBMISSIONS AND WE ARE CON VINCED BEYOND REASONABLE DOUBT, EXCEPT FOR THE IDENTIFICATION OF THE CREDITO RS, NEITHER THEIR CREDITWORTHINESS NOR THE GENUINTY OF THE TRANSACTION STAND PROVED ON RECORD. THE ONUS TO PROVE THE CREDITWORTHINESS OF THE CREDITORS ALWAYS LIES, PRIM ARILY, ON THE ASSESSEE. THE REVENUE HAS RELIED ON THE DECISION OF THE HONBLE M ADRAS HIGH COURT RENDERED IN THE CASE OF MANGILAL JAIN REPORTED IN 315 ITR 105, WHEREIN IT HAS BEEN HELD THAT THE ASSESSEE SHOULD PROVE THE CREDITWORTHINESS AND THE GENUINENESS OF THE TRANSACTIONS BEYOND REASONABLE DOUBT. WE HAVE FOUND THAT THIS ONUS HAS NOT BEEN DISCHARGED BY THE ASSESSEE AND IN OUR CONSIDERED OP INION, THE DELETION OF THE ENTIRE ADDITION BY THE LD. CIT(A) IS NOT JUSTIFIED. ACCORDINGLY, WE SET ASIDE THE FINDINGS OF THE LD. CIT(A) AND MAINTAIN THE IMPUGNE D ADDITION OF ` .57,55,000/- MADE UNDER SECTION 68 OF THE ACT AS UNEXPLAINED CRE DITS. 6. IN THE RESULT, THE APPEAL OF THE REVENUE STANDS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 03.10.2011. SD/- SD/- (ABRAHAM P. GEORGE) ACCOUNTANT MEMBER (HARI OM MARATHA) JUDICIAL MEMBER CHENNAI, DATED, THE 03.10.2011 VM/- TO: THE ASSESSEE//A.O./CIT(A)/CIT/D.R.