Raghuvir Construction Co., Baroda V. The ACIT., Circle-3, Baroda

ITA 2113/AHD/2011

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 85699 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 5 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-02-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 12-02-2015
• Assessment Year: 2003-2004
• Appeal Filed On: 26-08-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MK SINGH
• Assessee Lawyers: M J SHAH
• Keywords: Additional evidence
• Section: 68

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, AHMEDABAD .., , BEFORE SHRI N.S. SAINI, ACCOUNTANT MEMBER AND SHRI KUL BHARAT, JUDICIAL MEMBER 1. ./ I.T.A. NO.1030/AHD/2011 A.Y. 2003-04 2. ./ I.T.A. NO.2113/AHD/2011 A.Y. 2003-04 M/S.RAGHUVIR CONSTRUCTION CO. 201, JALARAM HOUSE NR.ATMAJYOTI ASHRAM ELLORAPARK, VARODARA / VS. THE ASST.CIT CIRCLE-3 BARODA ./ ./ PAN/GIR NO. : AABFR 7822 C ( # / APPELLANT ) .. ( $% # / RESPONDENT) #& / APPELLANT BY : SHRI M.J. SHAH, AR $% #'& / RESPONDENT BY : SHRI M.K.SINGH, SR.DR ()'* / DATE OF HEARING 12/02/2015 +,-.'* / DATE OF PRONOUNCEMENT 20/02/2015 / O R D E R PER SHRI KUL BHARAT, JUDICIAL MEMBER : THESE TWO APPEALS (QUANTUM AND PENALTY) BY THE ASSE SSEE ARE DIRECTED AGAINST THE SEPARATE ORDERS OF THE LD.COMM ISSIONER OF INCOME TAX(APPEALS)-IV, BARODA (CIT(A) IN SHORT) DATED 17/01/2011 AND 13/06/2011 PERTAINING TO ASSESSMENT YEAR (AY) 2003- 04 RESPECTIVELY. THESE APPEALS WERE HEARD TOGETHER AND ARE BEING DIS POSED OF BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. ITA NOS.1030/A HD/2011 & 2113 /AHD/2011 M/S.RAGHUVIR CONSTRUCTION CO. VS. ACIT ASST.YEAR 2003-04 - 2 - 2. FIRST, WE TAKE UP THE QUANTUM APPEAL, I.E. ITA N O.1030/AHD/2011 FOR AY 2003-04. THE ASSESSEE HAS RAISED THE FOLLOW ING GROUNDS OF APPEAL:- 01. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AS WELL AS IN LAW, THE LRD.CIT(A)-IV, BARODA, WAS ERRED IN CONFIRMING ADDI TION U/S.68 ON THE GROUND THAT APPELLANT WAS FAILED TO PROVE PRIMARY O NUS EVENTHOUGH APPELLANT HAS DISCHARGED PRIMARY ONUS AND GIVE SUFF ICIENT DETAILS. 02. APPELLANT PRAY YOU HONOUR TO DELETE THE ADDITI ON U/S.68. RELIEF CLAIMED IN APPEAL ADDITION MADE U/S.68 OF RS.15 LACS MAY BE DELETED O R APPROPRIATE RELIEF AS PER FACTS AND CIRCUMSTANCE OF THE CASE. 3. BRIEFLY STATED FACTS ARE THAT THIS IS A SECOND R OUND OF LITIGATION. IN EARLIER ROUND, THE TRIBUNAL (ITAT C BENCH AHMEDAB AD) HAD RESTORED THE ISSUE OF ADDITION OF RS.15 LACS MADE U/S.68 OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) TO THE FILE OF LD.CIT(A) IN ITA NO.2939/AHD/2006 FOR AY 2003-04 VIDE ORDER DATED 14 /12/2007. HOWEVER, THE LD.CIT(A), AFTER OBTAINING REMAND REPO RT FROM THE ASSESSING OFFICER ((AO IN SHORT), AGAIN CONFIRMED T HE ADDITION ON THE BASIS THAT THE ASSESSEE COULD NOT ESTABLISH THE IDE NTITY OF THE CREDITORS, GENUINENESS OF THE TRANSACTION AND CREDITWORTHINESS OF THE CREDITORS. AGAINST THIS, THE ASSESSEE HAS FILED THE PRESENT AP PEAL. ITA NOS.1030/A HD/2011 & 2113 /AHD/2011 M/S.RAGHUVIR CONSTRUCTION CO. VS. ACIT ASST.YEAR 2003-04 - 3 - 4. GROUND NOS.1 & 2 ARE INTER-RELATED AND, THEREFOR E, THE SAME ARE DECIDED TOGETHER. THE LD.COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE AUTHORITIES BELOW WERE NOT JUSTIFIED IN MAKING THE ADDITION AND CONFIRMING THE SAME. HE SUBMITTED THAT THE ASSESSE E HAD OBTAINED CONFIRMATIONS FROM ALL THE CREDITORS. SUCH CONFIRM ATIONS WERE PLACED BEFORE THE LD.CIT(A). THE LD.COUNSEL FOR THE ASSES SEE SUBMITTED THAT WE HAVE WRITTEN TO THE CREDITORS VIDE LETTER DATED 16/ 10/2010 TO FURNISH XEROX COPY OF PAN CARD, OTHER IDENTITY CAR, 7/12 & 8/12 EXTRACT, SALE BILL OF AGRICULTURE FOR THE YEAR 2002-03 AND ONWARDS AND COPY OF INCOME-TAX RETURNS BEFORE THE AO. HE SUBMITTED THAT THE CREDI TORS DESPITE HAVING REMINDERS DID NOT TURN UP BEFORE THE ASSESSING AUTH ORITY. HE FURTHER SUBMITTED THAT THE ASSESSEE HAS NO CONTROL OVER THE CREDITORS AND CANNOT ENFORCE THEIR PRESENCE BEFORE THE ASSESSING AUTHORI TY. HE SUBMITTED THAT IT WAS CATEGORICALLY WRITTEN TO THE CREDITORS MENTI ONING THE CHEQUE NUMBERS VIDE WHICH THE LOAN AMOUNT WAS RECEIVED. H ENCE, THE LOAN TRANSACTIONS WERE EFFECTED THROUGH BANKING CHANNELS . HE SUBMITTED THAT THE AO OUGHT TO HAVE ENFORCED THE PRESENCE OF CREDI TORS BY EXERCISING THE POWERS AS CONFERRED ON THE AO BY THE ACT. HE SUBMI TTED THAT UNDER THESE FACTS, THE AO SHOULD NOT HAVE MADE ADDITION. HE FURTHER SUBMITTED THAT THE ASSESSEE CANNOT BE FASTENED WITH UNREASONA BLE TAX LIABILITY. 4.1. ON THE CONTRARY, LD.SR.DR SHRI M.K.SINGH VEHEM ENTLY OPPOSED THE SUBMISSIONS OF THE LD.COUNSEL FOR THE ASSESSEE AND POINTED OUT THAT THE ASSESSEE WAS GIVEN SUFFICIENT OPPORTUNITIES BY THE AUTHORITIES BELOW TO ITA NOS.1030/A HD/2011 & 2113 /AHD/2011 M/S.RAGHUVIR CONSTRUCTION CO. VS. ACIT ASST.YEAR 2003-04 - 4 - PRODUCE THE EVIDENCES PROVING THE GENUINENESS OF TH E TRANSACTIONS AND CREDITWORTHINESS OF THE CREDITORS. HE SUBMITTED TH AT THE ONUS WAS UPON THE ASSESSEE TO FURNISH THESE PRIMARY EVIDENCES. H E SUBMITTED THAT THE AUTHORITIES BELOW HAVE CATEGORICALLY GIVEN A FINDIN G THAT THE ASSESSEE COULD NOT PROVE THE CREDITWORTHINESS OF THE CREDITO RS AND ALSO THE SUMMON(S) ISSUED TO SOME OF THE PARTIES; NAMELY, DH IRUBHAI P.PATEL WHICH WAS RETURNED WITH THE POSTAL REMARKS THAT NO SUCH PERSON EXISTED THERE. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. WE FIND THAT THE LD.CIT(A) IN PARA-3 OF HIS ORDER H AS DECIDED THIS ISSUE BY OBSERVING AS UNDER:- 3. I HAVE CONSIDERED THE MATTER. WHEN A QUESTION ARISES AS TO WHETHER A CASH CREDIT APPEARING IN THE BOOKS OF ACC OUNT OF AN ASSESSEE HAS TO BE ACCEPTED OR TO BE REJECTED AND A DDITION TO BE MADE IN ACCORDANCE WITH SECTION 68, THE ASSESSEE IS REQUIRED TO ESTABLISH IDENTITY OF CREDITOR, CAPACITY OF THE CRE DITOR TO ADVANCE THE MONEY AND GENUINENESS OF THE TRANSACTION. IF T HE ASSESSEE ESTABLISHES THE AFORESAID THREE PRE-CONDITIONS, THE N IT WOULD BE FOR THE DEPARTMENT TO DISPROVE THE SAME [CIT VS. BAISHN AV CHARAN MOHANTY (1955) 212 ITR 199, 201 (ORISSA)]. MERE FI LING OF CONFIRMATORY LETTERS DOES NOT DISCHARGE THE ONUS TH AT LIES ON THE ASSESSEE [BHARTI PVT.LTD. VS. CIT (1978) 111 ITR 95 1 (CAL); CIT VS. W.J. WALKER & CO. (1979) 117 ITR 690, 694 (CAL) ; CIT VS. UNITED COMMERCIAL & INDUSTRIAL CO. (PVT.) LTD. (199 1) 187 ITR 596, 599 (CAL)]. MERE FURNISHING OF THE PARTICULAR S IS NOT ENOUGH. ITA NOS.1030/A HD/2011 & 2113 /AHD/2011 M/S.RAGHUVIR CONSTRUCTION CO. VS. ACIT ASST.YEAR 2003-04 - 5 - MERE PAYMENT BY ACCOUNT PAYEE CHEQUE IS NOT SACROSA NCT NOR CAN IT MAKE A NON GENUINE TRANSACTION GENUINE [CIT VS. PRECISION FINANCE PVT.LTD. (1999) 208 ITR 465, 470, 471 (CAL) ]. IT IS THUS AN ESTABLISHED POSITION IN LAW THAT THE ONUS WAS ON THE APPELLANT TO ADDUCE SUFFICIENT EVIDENCE TO PROVE IDENTITY OF THE CREDITORS, THEIR CREDITWORTHINESS OR CAPACITY TO ADVANCE THE MONEY A ND GENUINENESS OF THE TRANSACTIONS. APPELLANT FILED C ONFIRMATIONS; HOWEVER, THE CAPACITY OF THE CREDITORS TO ADVANCE T HE MONEY COULD NOT PROVED. IN ALL THE CASES, LOANS WERE CLAIMED T O HAVE BEEN GIVEN OUT OF AGRICULTURAL INCOME DERIVED BY THE CRE DITORS BUT NO EVIDENCE, NOT EVEN PROOF OF LAND HOLDING COULD BE FILED BY THE APPELLANT TO SUBSTANTIATE THIS CLAIM. IN THREE CAS ES, THE LAND RECORDS FILED WERE PERTAINING TO PERSONS OTHER THAN THE CREDITORS AND IN ONE CASE, THE LAND RECORDS PERTAINED TO YEAR UNDER THAN F.Y. 2002-03. IT WAS APPELLANT WHO FILED THIS EVID ENCE IN THE FIRST PLACE AND IT WAS UPTO THE APPELLANT ONLY TO HAVE FI LED FURTHER EVIDENCE AFTER ASSESSING OFFICERS OBSERVATIONS REG ARDING DEFECTS IN LAND RECORDS WERE CONVEYED TO THE APPELLANT. AS REGARDS APPELLANTS CONTENTION ABOUT LAPSE OF TIME, THE MAT TER WAS SET ASIDE BY THE HONBLE ITAT AT APPELLANTS BEHEST FOR PROVIDING ANOTHER OPPORTUNITY TO FILE ADDITIONAL EVIDENCES. IT IS NOT OPEN TO THE APPELLANT NOW TO TURN AROUND AND SAY THAT AFTER SO MANY YEARS, IT IS NOT POSSIBLE FOR HIM TO LEAD EVIDENCE [PUSHP TRADING CO. VS. CIT (1991) 190 ITR 618 (DEL)]. APPELLANTS CONTENT ION THAT ONUS WAS SHIFTED TO THE DEPARTMENT IS TOTALLY UNACCEPTAB LE. THE GENERAL PRINCIPLE AS TO WHEN THE ONUS SHIFTS, AS LAID DOWN IN STONEY VS. EASTBOURNE RD COUNCIL (1927) 1 CH.367, 397 IS THERE CAN ONLY BE SUFFICIENT EVIDENCE TO SHIFT THE ONUS FROM ONE SIDE TO THE OTHER IF THE EVIDENCE IS SUFFICIENTLY P RIMA FACIE TO ESTABLISH THE CASE OF THE PARTY ON WHOM THE ONUS LI ES. IT IS NOT MERELY A QUESTION OF WEIGHING FEATHERS ON THE ONE S IDE OR THE OTHER, AND ON SAYING THAT IF THERE WERE TWO FEATHER S ON ONE SIDE AND ONE ON THE OTHER, THAT WOULD BE SUFFICIENT TO S HIFT THE ONUS. ITA NOS.1030/A HD/2011 & 2113 /AHD/2011 M/S.RAGHUVIR CONSTRUCTION CO. VS. ACIT ASST.YEAR 2003-04 - 6 - WHAT IS MEANT IS, THAT IN THE FIRST INSTANCE, THE P ARTY ON WHOM THE ONUS LIES MUST PROVE HIS CASE SUFFICIENTLY TO JUSTI FY A JUDGEMENT IN HIS FAVOUR IF THERE IS NO OTHER EVIDENCE. APPELLANT HAS NOT BEEN ABLE TO ADDUCE SUFFICIENT EV IDENCE TO PRIMA FACIE ESTABLISH ITS CASE REGARDING IDENTITY OF THE CREDITORS OR THEIR CAPACITY TO ADVANCE THE MONEY. IT WAS APPELLANTS RESPONSIBILITY TO PROVIDE WHEREABOUTS OF THE CREDITORS CORRECTLY O R PRODUCE THEM BEFORE THE ASSESSING OFFICER FOR VERIFICATION. APP ELLANT DID NOT PRODUCE THE CREDITORS BEFORE THE ASSESSING OFFICER. THERE WAS NO RESPONSE BY THE CREDITORS TO THE SUMMONS U/S.131 IS SUED BY THE ASSESSING OFFICER AT APPELLANTS REQUEST. ON OTHER HAND, ONE OF THE LETTERS (DHIRUBHAI P.PATEL) RETURNED WITH THE P OSTAL REMARKS THAT NO SUCH PERSON EXISTED THERE. AUTHENTICITY OF CONFIRMATIONS PROVIDED BY THE APPELLANT OR CORRECTNESS OF CREDITO RS ADDRESSES SUPPLIED BY THE APPELLANT IS THEREFORE NOT ESTABLIS HED. IT CANNOT THEREFORE BE SAID THAT APPELLANT DISCHARGED ONUS OF ESTABLISHING IDENTITY OF THE CREDITORS. FURTHER, ONUS OF PRIMA FACIE ESTABLISHING CAPACITY OF THE CREDITORS TO ADVANCE THE MONEY CANN OT BE SAID TO HAVE BEEN DISCHARGED WHEN LAND RECORDS IN THEIR NAM ES COULD NOT BE FILED TO JUSTIFY EVEN PRIMA FACIE THEIR CLAIMED SOURCE OF AGRICULTURAL INCOME, EQUIVALENT AMOUNT OF CASH WAS DEPOSITED IN CREDITORS BANK ACCOUNTS IMMEDIATELY BEFORE ISSUING CHEQUES IN FAVOUR OF THE APPELLANT AND THERE WERE NO OTHER TRA NSACTIONS IN THEIR BANK ACCOUNTS DURING THE ENTIRE YEAR. SINCE APPELLANT HAS NOT BEEN ABLE TO DISCHARGE THE INITIAL ONUS U/S.68, THERE IS NO QUESTION OF ONUS SHIFTING TO THE ASSESSING OFFICER. IT IS HELD THAT THE ADDITION OF RS.15,00,000/- U/S.68 IS JUSTIFIED AND THE SAME IS CONFIRMED. 5.1. IT IS SETTLED PRINCIPLE OF LAW THAT THE ASSESS EE IS REQUIRED TO PROVE GENUINENESS OF TRANSACTION, IDENTITY OF CREDITORS A ND CREDITWORTHINESS OF SUCH CREDITORS. IN THE ABSENCE OF SUCH PROOF, THE ASSESSING AUTHORITY ITA NOS.1030/A HD/2011 & 2113 /AHD/2011 M/S.RAGHUVIR CONSTRUCTION CO. VS. ACIT ASST.YEAR 2003-04 - 7 - WOULD BE JUSTIFIED IN MAKING ADDITION BY INVOKING P ROVISIONS OF SECTION 68 OF THE ACT. IN THE CASE IN HAND, ADMITTEDLY, TH E ASSESSEE COULD NOT FURNISH THE EVIDENCES FOR PROVING CREDITWORTHINESS OF THE CREDITORS. THEREFORE, WE DO NOT FIND ANY INFIRMITY IN THE ORDE R OF THE LD.CIT(A), SAME IS HEREBY UPHELD. THUS, GROUNDS OF ASSESSEE S APPEAL ARE REJECTED. AS A RESULT, ASSESSEES QUANTUM APPEAL IN ITA NO.10 30/AHD/2011 IS DISMISSED. 6. NOW, COMING TO THE PENALTY APPEAL, I.E. ITA NO.2113/AHD/2011 FOR AY 2003-04. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL:- 01. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AS WELL AS IN THE LAW, THE LRD.CIT(A)-IV, WAS ERRED IN CONFIRMING PEN ALTY U/S.271(1)(C) ON THE GROUND THAT APPELLANT HAS FILE D INACCURATE PARTICULARS OF INCOME AND WAS ALSO ERRED IN FOLLOWI NG DECISION OF HONBLE S.C. IN THE CASE OF DHARMENDRA TEXTILE V S. UNION OF INDIA REPORTED IN (2008) 306 ITR 277. 02. THE APPELLANT PRAYS TO LEAVE, AMEND, ALTER OR CANCE L GROUND OF APPEAL AT THE TIME OF HEARING. RELIEF CLAIMED IN APPEAL WE REQUEST YOUR HONOR TO DELETE THE PENALTY LEVIED U/S.271(1)(C). 6.1. BRIEFLY STATED FACTS ARE THAT THE CASE OF T HE ASSESSEE WAS PICKED UP FOR SCRUTINY ASSESSMENT AND THE ASSESSMENT U/S.143( 3) OF THE ACT WAS FRAMED VIDE ORDER DATED 31/03/2006, THEREBY THE AO MADE VARIOUS ADDITIONS AND ALSO INITIATED PENALTY PROCEEDINGS U/ S.271(1)(C) OF THE ACT ITA NOS.1030/A HD/2011 & 2113 /AHD/2011 M/S.RAGHUVIR CONSTRUCTION CO. VS. ACIT ASST.YEAR 2003-04 - 8 - ON SUCH ADDITIONS. OUT OF THREE ADDITIONS; NAMELY, ADDITION AMOUNTING TO RS.50,12,491/- ON ACCOUNT OF PAYMENT MADE TO SUB-CO NTRACTORS/LABOUR CONTRACTORS BY TREATING THE SAME AS BOGUS, ADDITION OF RS.15 LACS MADE ON ACCOUNT OF UNEXPLAINED LOAN BY TREATING THE SAME AS ASSESSEES INCOME FROM UNDISCLOSED SOURCE AND ADDITION OF RS.41,626/- BEING THE DIFFERENCE IN CLOSING STOCK OF M/S.A.P.CONSTRUCTION. ON APPEA L, THE LD.CIT(A) SUSTAINED THE ADDITIONS OF RS.15 LACS & RS.14,626/- AND DELETED THE ADDITION OF RS.50,12,491/-. ON THIS SUSTAINED ADDI TION, THE AO LEVIED THE PENALTY AT 100%. AGAINST THIS, ASSESSEE FILED AN APPEAL BEFORE THE LD.CIT(A), WHO AFTER CONSIDERING THE SUBMISSIONS, D ISMISSED THE APPEAL. NOW, THE ASSESSEE IS FURTHER IN APPEAL BEFORE THIS TRIBUNAL. 7. AT THE OUTSET, THE LD.COUNSEL FOR THE ASSESSEE S UBMITTED THAT THE AUTHORITIES BELOW FAILED TO APPRECIATE THE FACT THA T THE PENALTY PROCEEDINGS AND THE ASSESSMENT PROCEEDINGS ARE TWO DIFFERENT AND DISTINCT PROCEEDINGS AND TO BE APPRECIATED IN ACCOR DANCE WITH THE PROVISIONS GOVERNING THE SAME. HE SUBMITTED THAT T HIS IS NOT THE CASE WHERE THE ASSESSEE HAS CONCEALED THE INCOME, BUT IT IS THE CASE WHERE THE ASSESSEE HAD ACCEPTED THE DEPOSITS FROM VARIOUS PER SONS. HE SUBMITTED THAT THE ASSESSEE MADE ALL THE EFFORTS AND CO-OPERA TED IN THE PROCEEDINGS BELOW THE AUTHORITIES TO FURNISH THE EVIDENCES. HE SUBMITTED THAT THE ASSESSEE HAD DISCLOSED ALL MATERIAL PARTICULARS REL ATED TO THESE CREDITS. HE SUBMITTED THAT UNDER THE IDENTICAL FACTS, A VIEW HA S BEEN TAKEN BY THE JURISDICTIONAL HIGH COURT THAT THE PENALTY CANNOT B E SUSTAINED. HE ITA NOS.1030/A HD/2011 & 2113 /AHD/2011 M/S.RAGHUVIR CONSTRUCTION CO. VS. ACIT ASST.YEAR 2003-04 - 9 - PLACED RELIANCE ON THE JUDGEMENT(S) OF HONBLE GUJA RAT HIGH COURT RENDERED IN THE CASE OF CIT VS. JALARAM OIL MILLS R EPORTED AT (2002) 253 ITR 192 (GUJ.) AND OF NATIONAL TEXTILES VS. CIT REP ORTED AT (2001) 249 ITR 125 (GUJ.) TO BUTTRESS ITS CONTENTION THAT THER E MUST BE SOME MATERIAL OR CIRCUMSTANCES LEADING TO THE REASONABLE CONCLUSI ON THAT THE AMOUNT DOES REPRESENT THE ASSESSEES INCOME. HE FURTHER P LACED RELIANCE ON THE DECISION(S) OF COORDINATE BENCHES (ITAT AHMEDABAD) RENDERED IN THE CASE OF SHRI NATUBHAI NARANBHAI VIRANI VS. ITO IN I TA NO.1433/AHD/09 FOR AY 2003-04, DATED 07/08/2009 AND OF ACIT VS. MA NISH ORGANICS INDIA LTD. REPORTED AT (2012) 17 TAXMANN.COM 25 (AH D.):: ITA NO.2155/AHD/2010 FOR AY 1994-95, DATED 30/11/2011. HE SUBMITTED THAT THE ASSESSEE MADE ALL EFFORTS TO PRODUCE THE PERSONS WHO HAD GIVEN LOANS TO THE ASSESSEE. HE FURTHER SUBMITTED THAT T HERE IS NO FINDING THAT THE IMPUGNED AMOUNT WAS RECEIVED BY THE ASSESSEE RE PRESENTED THE INCOME OF THE ASSESSEE AND THERE IS NO FINDING BY T HE AUTHORITIES BELOW THAT THE AMOUNT BELONGING TO THE ASSESSEE CAME THRO UGH SUCH CREDITS. HE SUBMITTED THAT IN THE ABSENCE OF SUCH FINDING, PENA LTY OUGHT NOT TO HAVE BEEN IMPOSED. 7.1. ON THE CONTRARY, THE LD.SR.DR SUPPORTED THE OR DERS OF THE AUTHORITIES BELOW AND SUBMITTED THAT THE ASSESSEE W AS GIVEN SUFFICIENT OPPORTUNITIES BY THE AUTHORITIES BELOW TO PROVE THE CREDITWORTHINESS OF THE DEPOSITORS. HE SUBMITTED THAT THE ASSESSEE FAI LED TO DISCHARGE THIS PRIMARY ONUS BY FURNISHING THE EVIDENCES. ITA NOS.1030/A HD/2011 & 2113 /AHD/2011 M/S.RAGHUVIR CONSTRUCTION CO. VS. ACIT ASST.YEAR 2003-04 - 10 - 8. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHOR ITIES BELOW AS WELL AS THE JUDGEMENTS/DECISIONS RELIED UPON BY THE LD.COUN SEL FOR THE ASSESSEE. ADMITTEDLY, THE DEPOSITS HAVE BEEN RECEIVED THROUGH BANKING CHANNELS. THE ASSESSEE HAS FURNISHED CONFIRMATIONS FROM CREDI TORS. HOWEVER, THE ASSESSEE COULD NOT ENFORCE THE PRESENCE OF THE CRED ITORS BEFORE THE ASSESSING AUTHORITY. THERE IS NO FINDING BY THE AU THORITIES BELOW THAT THE MONEY BELONGING TO THE ASSESSEE HAS BEEN CIRCULATED THROUGH THE SO- CALLED CREDITORS. THE ADDITION HAS BEEN SUSTAINED ON THE BASIS THAT THE ASSESSEE COULD NOT DISCHARGE ITS ONUS WITH REGARD T O THE CREDITWORTHINESS OF THE CREDITORS. THE HONBLE GUJARAT HIGH COURT RENDERED IN THE CASE OF NATIONAL TEXTILES VS. CIT (SUPRA) HELD AS UNDER: - 22. IN ORDER TO JUSTIFY THE LEVY OF PENALTY, TWO FACTO RS MUST CO-EXIST, (I) THERE MUST BE SOME MATERIAL OR CIRCUMSTANCES LEADIN G TO THE REASONABLE CONCLUSION THAT THE AMOUNT DOES REPRESENT THE ASSES SEES INCOME. IT IS NOT ENOUGH FOR THE PURPOSE OF PENALTY THAT THE AMOU NT HAS BEEN ASSESSED AS INCOME, AND (II) THE CIRCUMSTANCES MUST SHOW THAT THERE WAS ANIMUS I.E., CONSCIOUS CONCEALMENT OR ACT OF FURNIS HING OF INACCURATE PARTICULARS ON THE PART OF THE ASSESSEE. THE EXPLAN ATION HAS NO BEARING ON FACTOR NO. 1 BUT IT HAS BEARING ONLY ON FACTOR N O. 2. THE EXPLANATION DOES NOT MAKE THE ASSESSMENT ORDER CONCLUSIVE EVIDE NCE THAT THE AMOUNT ASSESSED WAS IN FACT THE INCOME OF THE ASSES SEE. NO PENALTY CAN BE IMPOSED IF THE FACTS AND CIRCUMSTANCES ARE EQUAL LY CONSISTENT WITH THE HYPOTHESIS THAT THE AMOUNT DOES NOT REPRESENT C ONCEALED INCOME AS WITH THE HYPOTHESIS THAT IT DOES. IF A ASSESSEE GIV ES AN EXPLANATION WHICH IS UNPROVED BUT NOT DISPROVED I.E., IT IS NOT ACCEP TED BUT CIRCUMSTANCES DO NOT LEAD TO THE REASONABLE AND POSITIVE INFERENC E THAT THE ASSESSEES ITA NOS.1030/A HD/2011 & 2113 /AHD/2011 M/S.RAGHUVIR CONSTRUCTION CO. VS. ACIT ASST.YEAR 2003-04 - 11 - CASE IS FALSE, THE EXPLANATION CANNOT HELP THE DEPA RTMENT BECAUSE THERE WILL BE NO MATERIAL TO SHOW THAT THE AMOUNT IN QUES TION WAS THE INCOME OF THE ASSESSEE. 8.1. FURTHER, THE HONBLE GUJARAT HIGH COURT RENDER ED IN THE CASE OF CIT VS. JALARAM OIL MILLS(SUPRA), HAS HELD THAT APP LYING THE RATIO LAID DOWN BY THE HONBLE APEX COURT IN THE CASE OF CIT V S. ANWAR ALI (1970) 76 ITR 696(SC) AND OF CIT VS. KHODAY ESWARS A AND SONS (1972) 83 ITR 369(SC), IT CAN BE STATED ON THE BASIS OF TH E ASSESSEE AGREEING TO HAVE THE CREDIT ENTRIES IN ITS BOOKS OF ACCOUNT TRE ATED AS ITS INCOME, BY VIRTUE OF THE PROVISIONS OF SECTION 68 OF THE ACT, THE SAID SUMS SHALL BE DEEMED TO BE INCOME OF THE YEAR UNDER CONSIDERATION . HOWEVER, DE HORS THE SAID PROVISION, IT IS NOT POSSIBLE TO STATE WIT H CERTAINTY THAT THE SAID SUMS WOULD BE CONCEALED INCOME OF THE ASSESSEE FO R THE YEAR UNDER CONSIDERATION. IN THE INSTANT CASE ALSO, IT CANNOT BE SAID WITH CERTAINTY THAT THE SUM RECEIVED FROM THE CREDITORS WOULD BE CONCEALED INCOME OF THE ASSESSEE. THE COORDINATE BENCH (ITAT AHMEDABAD BENCH A) IN THE CASE OF ACIT VS. MANISH ORGANICS INDIA LTD.(SUP RA) HAS FOLLOWED THE JUDGEMENT OF HONBLE JURISDICTIONAL HIGH COURT IN T HE CASE OF NATIONAL TEXTILES VS. CIT(SUPRA). THE REVENUE HAS NOT PLACE D ANY MATERIAL TO TAKE A DIFFERENT VIEW THAN TAKEN BY THE COORDINATE BENCH IN THE CASE OF ACIT VS. MANISH ORGANICS INDIA LTD.(SUPRA). IN VIEW OF THE RATIO LAID DOWN BY THE HONBLE JURISDICTIONAL HIGH COURT IN THE CAS E(S) OF NATIONAL ITA NOS.1030/A HD/2011 & 2113 /AHD/2011 M/S.RAGHUVIR CONSTRUCTION CO. VS. ACIT ASST.YEAR 2003-04 - 12 - TEXTILES VS. CIT(SUPRA) AND OF CIT VS. JALARAM OIL MILLS(SUPRA), THIS IS NOT A CASE WHERE PENALTY CANNOT BE SUSTAINED. THE REFORE, THE AO IS HEREBY DIRECTED TO DELETE THE ADDITION. AS A RES ULT, ASSESSEES APPEAL(PENALTY) IN ITA NO.2113/AHD/2011 IS ALLOWED. 9. IN THE COMBINED RESULT, ASSESSEES APPEAL(Q UANTUM) IN ITA NO.1030/AHD/2011 FOR AY 2003-04 IS DISMISSED, WHERE AS ASSESSEES APPEAL(PENALTY) IN ITA NO.2113/AHD/2011 FOR AY 2003 -04 IS ALLOWED. ORDER PRONOUNCED IN THE COURT ON FRIDAY, THE 20 TH DAY OF FEBRUARY, 2015 AT AHMEDABAD. SD/- SD/- ( .. ) ( ) ( N.S. SAINI ) ( KUL BHARAT ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 20/ 02 /2015 2*..,(.../ T.C. NAIR, SR. PS !'#$%$&' / COPY OF THE ORDER FORWARDED TO : 1. # / THE APPELLANT 2. $% # / THE RESPONDENT. 3. 345 6 / CONCERNED CIT 4. 6 ( ) / THE CIT(A)-IV, BARODA 5. 7(8$45 , *45. , 3 / DR, ITAT, AHMEDABAD 6. 8:;<) / GUARD FILE. / BY ORDER, %7$ //TRUE COPY// / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD ITA NOS.1030/A HD/2011 & 2113 /AHD/2011 M/S.RAGHUVIR CONSTRUCTION CO. VS. ACIT ASST.YEAR 2003-04 - 13 - 1. DATE OF DICTATION ..12.2.15 (DICTATION-PAD 18- PAGES ATTACHED AT THE END OF THIS FILE)Z 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER ..12/19.2.15 3. OTHER MEMBER... 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. P.S./P.S.23.2.15 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 23.2.15 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER