Deputy Commissioner of Income Tax Circle-6(2)(1), Bangalore V. Sri Ramakrishna Manjunath , Bangalore

ITA 2116/BANG/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 7794 (ITAT-BANGALORE)
• Duration Of Justice: 9 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-04-2019
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2013-2014
• Appeal Filed On: 03-07-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: VANI H
• Keywords: Unexplained cash credit; Opportunity of being heard; Additional evidence; Assessment record; Set aside
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : BANGALORE BEFORE SHRI N.V. VASUDEVAN, VICE PRESIDENT AND SHRI JASON P. BOAZ, ACCOUNTANT MEMBER ITA NO. 2116/BANG/2018 ASSESSMENT YEAR : 2013-14 DY. COMMISSIONER OF INCOME TAX, CIRCLE-6(2)(1), BANGALORE VS. SRI RAMAKRISHNA MANJUNATH, NO.48, SHIVA FARMS, KAMAKSHIPALYA, BANGALORE [PAN: AKXPM9955F] APPELLANT RESPONDENT APPELLANT BY : SHRI R.N. SIDDAPPAJI, ADDL.CIT RESPONDENT BY : SMT. VANI H, ADVOCATE DATE OF HEARING : 16-04-2019 DATE OF PRONOUNCEMENT : 24-04-2019 O R D E R PER N V VASUDEVAN, VICE PRESIDENT : THIS IS AN APPEAL BY THE REVENUE AGAINST THE ORDER DATED 27-02-2018 OF THE COMMISSIONER OF INCOME TAX (APPEA LS)-6, BENGALURU, RELATING TO ASSESSMENT YEAR 2013-14. 2. THE GROUNDS OF APPEAL RAISED BY THE REVENUE, REA DS AS FOLLOWS: 1. THE ORDER OF THE CIT(APPEALS) IS OPPOSED TO LAW AND THE FACTS AND CIRCUMSTANCES OF THE CASE. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, WHET HER THE LD.CIT(A) WAS RIGHT IN PASSING THE ORDER WITHOUT PROVIDING AN OPP ORTUNITY TO THE AO TO : 2 : ITA NO. 2116/BANG/2018 EXAMINE THE ADDITIONAL EVIDENCE SUBMITTED BY THE AS SESSEE AS PER THE PROVISIONS OF RULE 46A OF IT RULES. 3. FOR THESE AND SUCH OTHER GROUNDS THAT MAY BE URG ED AT THE TIME OF HEARING, IT IS HUMBLY PRAYED THAT THE ORDER OF THE CIT(A), IN SO FAR AS IT RELATES TO THE ABOVE GROUNDS MAY BE REVERSED AND TH AT OF THE ASSESSING OFFICER BE RESTORED. 4. THE APPELLANT CRAVES LEAVE TO ADD, TO ALTER, TO AMEND OR DELETE ANY OF THE GROUNDS THAT MAY BE URGED AT THE TIME OF HEARING OF THE APPEAL 3. THE ASSESSEE IS AN INDIVIDUAL, WHO DERIVES INCOM E FROM HOUSE PROPERTY, INCOME FROM BUSINESS AND INCOME FROM OTHE R SOURCES. IN THE COURSE OF ASSESSMENT PROCEEDINGS FOR THE AY. 2013-1 4, THE ASSESSING OFFICER (AO) NOTICED THAT THERE WERE UNSECURED LOAN S TOTALING TO RS. 1,03,78,910/-, APPEARING IN THE BALANCE SHEET OF TH E ASSESSEE AS ON 31- 03-2013. THE DETAILS OF THE INDIVIDUALS AND UNSECU RED LOANS OUTSTANDING AGAINST EACH OF THEM WERE AS FOLLOWS: SL.NO. NAME OF THE CREDITORS (SHRI/SMT/KUM) AMOUNT (RS) 1 ANNAPURNA 2,50,000 2 RAM MURTHY 1,50,000 3 BORE GOWDA 3,00,000 4 JAYA 2,00,000 5 KAMAL KISHORE 2,80,000 6 CHANNEGOWDA 3,20,000 7 KARTHIK 3,50,000 8 LINGAPPA 3,00,000 9 PRAKASH 3,50,000 10 RAMACHANDRA 3,20,000 11 LINGAPPA 3,80,000 12 RENT ADVANCE RECEIVED 14,10,000 13 PUNITH 3,15,910 : 3 : ITA NO. 2116/BANG/2018 14 RAMU 3,15,000 15 SRINIVAS 4,50,000 16 AJAY 3,50,000 17 PRAKASH 4,00,000 18 DILIP 3,50,000 19 MAHALINGAPPA 7,50,000 20 RAJU 5,00,000 21 GIRISH 15,50,000 22 KUMAR 4,35,000 23 LOKESH 3,53,000 TOTAL 1,03,78,910 3.1. ACCORDING TO THE AO, THE ASSESSEE DID NOT FILE ANY DOCUMENTARY EVIDENCE TO PROVE THE IDENTITY OF THE CREDITORS, GE NUINENESS OF THE TRANSACTION AND CREDITWORTHINESS OF THE CREDITORS A ND HE THEREFORE ADDED THE TOTAL OF THE UNSECURED CREDITORS AS AFORESAID T O THE TOTAL INCOME OF THE ASSESSEE AS UNEXPLAINED CREDIT U/S. 68 OF THE I NCOME TAX ACT, 1961 (ACT). 4. BEFORE THE CIT(A), ASSESSEE SUBMITTED THAT OUT O F THE SUM OF RS. 1,03,78,910/-, APPEARING AS UNSECURED LOANS IN THE BALANCE SHEET, A SUM OF RS. 98,65,410/- WAS OPENING BALANCE IN THE C REDITORS A/C AS ON 1.4.2013 AND SINCE OPENING BALANCE IS THE CLOSING B ALANCE AS ON 31.3.2013 RELEVANT TO AY 2012-13, THE SAME CANNOT B E SUBJECT MATTER OF INVESTIGATION IN THE AY. 2013-14 AND IN THIS REG ARD RELIED ON THE DECISION OF THE HON'BLE KARNATAKA HIGH COURT IN THE CASE OF CIT VS. N.L. SATYANARAYANA SHETTY [129 ITR 226] (KAR), WHER EIN IT WAS HELD THAT IT IS ONLY CREDITS THAT ARE APPEARING IN THE B OOKS OF ACCOUNTS OF AN ASSESSEE FOR THE RELEVANT PREVIOUS YEAR, THE PROVIS IONS OF SEC.68 OF THE ACT WILL BE ATTRACTED. THE ASSESSEE SUBMITTED COPIE S OF LEDGER ACCOUNTS : 4 : ITA NO. 2116/BANG/2018 RELATING TO THE AFORESAID UNSECURED CREDITORS BEFOR E THE CIT(A). THE DETAILS GIVEN BY THE ASSESSEE BEFORE THE CIT(A) WER E AS FOLLOWS: SL. NO. NAME OF THE CREDITORS BROUGHT FORWARD BALANCE AS ON 01-04-2012 AMOUNT RECEIVED DURING 01-04-2012 TO 31-03-2013 TOTAL LIABILITY PAYABLE AS ON 31-03-2013 1 AJAY 3,50,000 NIL 3,50,000 2 ANNAPURNA 2,50,000 NIL 2,50,000 3 BORE GOWDA 3,00,000 NIL 3,00,000 4 CHINNEGOWDA 3,20,000 NIL 3,20,000 5 DILIP 1,52,410 1,97,590 3,50,000 6 GIRISH 15,50,000 NIL 15,50,000 7 JAYA 2,00,000 NIL 2,00,000 8 KAMAL KISHORE 2,80,000 NIL 2,80,000 9 KARTHIK 2,00,000 1,50,000 3,50,000 10 KUMAR 4,35,000 NIL 4,35,000 11 LINGAPPA 3,80,000 NIL 3,80,000 12 LINGAPPA N 3,00,000 NIL 3,00,000 13 LOKESH 3,53,000 NIL 3,53,000 14 MAHALINGAPPA 7,50,000 NIL 7,50,000 15 PRAKASH 3,50,000 NIL 3,50,000 16 PRAKASH K 4,00,000 NIL 4,00,000 17 PUNITH 1,50,000 1,65,910 3,15,910 18 RAJU 5,00,000 NIL 5,00,000 19 RAMACHANDRA 3,20,000 NIL 3,20,000 20 RAMMURTHY 1,50,000 NIL 1,50,000 21 RAMU 3,15,000 NIL 3,15,000 22 SRINIVAS 4,50,000 NIL 4,50,000 23 RENTAL ADVANCE 1. ADIGAS FAST FOOD PVT LTD., 2. M/S. VEON RETAIL VENTURES PVT. LTD., 3. M/S. COSMO CLOTHING 2,80,000 2,80,000 8,50,000 NIL NIL NIL 2,80,000 2,80,000 8,50,000 TOTAL 98,65,410 5,13,500 1,03,78,910 : 5 : ITA NO. 2116/BANG/2018 4.1. LD.CIT(A) ON A CONSIDERATION OF THE ABOVE SUBM ISSIONS, DELETED THE ADDITION ACCEPTING THE CONTENTIONS OF THE ASSES SEE TO THE EXTENT OF RS. 98,65,410/-, OBSERVING AS FOLLOWS: 6. THE APPELLANT SUBMITS HEREWITH THE LEDGER FOLIO S OF THE CREDITORS IN RESPECT OF THE AMOUNT OF BROUGHT FORWARD LIABILITY AS ON 01-04-2012 AMOUNTING TO RS. 98,65,410/- INCLUSIVE OF RENTAL AD VANCE OF RS. 14,10,000/-. THE APPELLANT ALSO SUBMITS HEREWITH THE RELEVANT CA SE LAWS OF THE CASES MENTIONED ABOVE FOR KIND PERUSAL AND CONSIDERATION. THEREFORE THE LD.AO WAS NOT JUSTIFIED TO HOLD A SUM OF RS. 98,65,410/- AS INCOME CHARGEABLE TO TAX U/S. 68 OF THE ACT WHICH I S NOT APPLICABLE TO THE APPELLANTS CASE. HENCE THE ADDITION MADE OF RS. 1 ,03,78,910/- INCLUSIVE OF RS. 5,13,500/- BEING THE ADVANCE RECEIVED RELATING TO THE AMOUNT OF LIABILITY RECEIVED DURING THE PREVIOUS YEAR ENDING 31-03-2013 RELEVANT TO THE A.Y 2013-14. THEREFORE THE ADDITION OF RS. 1,03,78,910 /- IS NOT JUSTIFIABLE IN LAW AS THE SAID CREDITS WERE NOT FOUND CREDITED DURING THE PREVIOUS YEAR EXCEPT A SUM OF RS. 5,13,500/-. 4.2. AGGRIEVED BY THE ORDER OF CIT(A), THE REVENUE HAS FILED THE PRESENT APPEAL BEFORE THE TRIBUNAL. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS. LD. COUNSEL FOR THE ASSESSEE WHO TRIED TO POINT OUT THAT IN THE ASSESSM ENTS COMPLETED FOR THE EARLIER ASSESSMENT YEAR I.E., FOR THE AY. 2012- 13, THE DETAILS OF UNSECURED LOANS AS ON 31-03-2012 APPEARING IN SCHED ULE-3 OF THE BALANCE SHEET, WHICH WAS PART OF ASSESSMENT RECORDS OF THE ASSESSEE WERE AVAILABLE BEFORE THE AO AND THEREFORE, THERE W AS NO VIOLATION OF RULE 46A OF THE INCOME TAX RULES, 1962 (RULES). 5.1. WE HAVE CONSIDERED THE SUBMISSIONS OF LD. COUN SEL FOR THE ASSESSEE AND WE FIND THAT THE LEDGER ACCOUNTS WHICH WERE FILED BEFORE : 6 : ITA NO. 2116/BANG/2018 THE CIT(A) WERE ADMITTEDLY AN ADDITIONAL EVIDENCE, WHICH WERE NOT CONFRONTED TO THE AO BY THE CIT(A) AS PER THE MANDA TE LAID DOWN IN RULE 46A OF THE RULES. WE ALSO FIND THAT SCHEDULE- 3 OF THE BALANCE SHEET AS ON 31-03-2012 AND THE DETAILS OF SUNDRY CR EDITORS AS ON 01- 04-2012 AS APPEARING IN THE ORDER OF THE CIT(A), WH ICH WE HAVE EXTRACTED IN THE EARLIER PART OF THE ORDER, DOES NO T TALLY AND THERE ARE SOME DISCREPANCIES. IN THESE CIRCUMSTANCES, WE ARE OF THE VIEW THAT IT WOULD BE JUST APPROPRIATE TO SET ASIDE THE ORDER OF CIT(A) AND REMAND THE ISSUE TO THE FILE OF CIT(A) FOR FRESH CONSIDERA TION. THE CIT(A) WILL CONFRONT THE EVIDENCE FILED BY THE ASSESSEE BEFORE THE CIT(A) TO THE AO AND GET THE REMAND REPORT OF THE AO AND THEREAFT ER DECIDES THE ISSUE AFTER AFFORDING OPPORTUNITY OF BEING HEARD TO BOTH THE PARTIES. 6. IN THE RESULT, THE APPEAL OF REVENUE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON THIS 24 TH DAY OF APRIL, 2019 SD/- SD/- ( JASON P. BOAZ ) ( N.V. VASUDEV AN) ACCOUNTANT MEMBER VICE PRESIDENT BANGALORE, DATED, THE 24 TH APRIL, 2019. TNMM : 7 : ITA NO. 2116/BANG/2018 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, ITAT, BANGALORE