Dy.C.I.T.-4(1), Agra V. M/s Vardhman Resorts Pvt. Ltd., Agra

ITA 221/AGR/2010

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 0366 (ITAT-AGRA)
• Duration Of Justice: 8 year(s) 11 month(s) 13 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 16-05-2019
• Appeal Filed By: Department
• Bench Allotted: DB
• Next Hearing Date: 15-06-2011
• Assessment Year: 2004-2005
• Appeal Filed On: 03-06-2010
• Court: TRIBUNAL
• Assessee Lawyers: A K SEHGAL
• Keywords: Income from undisclosed sources
• Section: 142(1); 131; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AGRA BENCH, AGRA BEFORE SHRI P.K. BANSAL, ACCOUNTANT MEMBER AND SHRI H.S. SIDHU, JUDICIAL MEMBER ITA NO.221/AGR/2010 ASST. YEAR: 2004-05 DY. COMMISSIONER OF INCOME TAX 4(1), VS. M/S VARDHM AN RESORTS (P) LTD. AGRA. 3A, MANGLIK COLONY, VIBHAV NAGAR, AGRA. (PAN : AABCV 5485 A). (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI WASEEM ARSHAD, SR. D.R. RESPONDENT BY : SHRI A.K. SEHGAL, ADVOCATE ORDER PER H.S. SIDHU, J.M. : THE REVENUE HAS FILED THE PRESENT APPEAL AGAINST TH E ORDER DATED 08.03.2010 PASSED BY THE LD. CIT(A)-II, AGRA ON THE FOLLOWING GROUNDS :- 1) THAT THE LEARNED CIT(A) II, AGRA HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF ` 68 LACS MADE BY THE ASSESSING OFFICER U/S 68 OF I.T. ACT, 1961 WITHOUT APPRECIATING THE FACTS THAT THE ASSESSEE COULD NOT DISCHARGE HIS ONUS OF PROVING THE GENUINE NESS OF THE CASH CREDIT BEFORE THE ASSESSING OFFICER DURING THE COUR SE OF ASSESSMENT PROCEEDINGS. 2. THAT THE LD. CIT(A) HAS ERRED IN DECIDING THE AP PEAL BY RELYING UPON THE PAPERS FILED BY THE ASSESSEE WITHOUT EXAMI NING THE VERACITY OF THOSE DOCUMENTS IGNORING THE FACT MERELY ON THE BASIS OF PAPER TRANSACTION A NON-GENUINE CASH CREDIT CAN NOT BE TR EATED AS GENUINE. 2 3. THAT THE ORDER OF THE LEARNED CIT(A) DESERVES TO BE CANCELLED AND THAT OF THE ASSESSING OFFICER BE RESTORED. 4. THAT THE APPELLANT CRAVES LEAVE TO ADD AND/OR AL TER, AMEND MODIFY ANY OR MORE GROUND OR GROUNDS OF APPEAL AS M AY BE DEEMED FIT AT THE TIME OF HEARING OF APPEAL. 2. THE BRIEF FACTS RELATING TO THE ISSUE IN DISPUTE ARE THAT THE ASSESSEE FILED ITS RETURN OF INCOME ON 31.10.004 DECLARING LOSS OF ` 9,23,385/-. THE ASSESSING OFFICER FOUND THAT THE ASSESSEE HAS TAKEN THE LOANS IN THE FINANCIAL YEAR 2003-04 RELEVANT TO THE ASSESSMENT YEAR 2004-05 AND ISSUED NOTICE UNDER SECTION 148 OF THE INCOME TAX ACT, 1961 (THE ACT HEREINAFTER) DA TED 30.03.2007 FOR INCOME ESCAPING ASSESSMENT IN THE HANDS OF THE ASSESSEE CO MPANY AFTER RECORDING THE REASONS. IN COMPLIANCE OF THE SAID NOTICE, THE ASS ESSEE FILED ITS REPLY DATED 14.04.2007 STATING THAT THE RETURN FOR AFORESAID AS SESSMENT YEAR STANDS ALREADY FILED ON 31.10.2004, HOWEVER, FOR THE SAKE OF TECHN ICAL COMPLIANCE, THE ASSESSEE HAS REQUESTED TO TREAT THE SAID RETURN FILED IN COM PLIANCE OF THE AFORESAID NOTICE. THE ASSESSEE HAS ALSO RAISED OBJECTION VIDE LETTER DATED 25.09.2007 REGARDING THE ISSUE OF VALIDITY OF NOTICE WHICH WAS REJECTED BY T HE ASSESSING OFFICER. THE ASSESSING OFFICER AGAIN ISSUED NOTICE UNDER SECTION 142(1) DATED 01.09.2008 REQUIRING THE ASSESSEE TO MAKE COMPLIANCE OF THE NO TICE DATED 26.11.2007. IN COMPLIANCE OF THE SAME, THE LD. AUTHORISED REPRESEN TATIVE OF THE ASSESSEE APPEARED BEFORE THE ASSESSING OFFICER AND FURNISHED REPLIES AND DISCUSSED THE MATTER WITH THE ASSESSING OFFICER FROM TIME TO TIME. THE ASSES SING OFFICER REQUESTED THE 3 ASSESSEE TO FURNISH THE COMPLETE ADDRESSES OF ALL T HE CREDITORS, PROVE THEIR IDENTITY, CREDITWORTHINESS, GENUINENESS OF TRANSACTION WITH S UPPORTING DOCUMENTARY EVIDENCES, TERMS AND CONDITIONS OF THE LOANS, PURPO SE OF TAKING SUCH LOANS. THE ASSESSING OFFICER ALSO ISSUED SUMMONS UNDER SECTION 131 OF THE ACT TO THE CREDITORS NAMED M/S. FRIENDS BUILDTECH & DEVELOPERS PVT. LTD. AND M/S SASA FOODS PVT. LTD. IN COMPLIANCE OF THE SAME, THE AUT HORISED REPRESENTATIVES OF THE COMPANIES ATTENDED AND FILED REPLIES OF THE SAID CO MPANIES ENCLOSING COPY OF LEDGER ACCOUNT, BANK ACCOUNT, ACKNOWLEDGEMENT OF IN COME TAX RETURNS AND ALSO FILED A SEPARATE REPLY SUBMITTING THAT THE DIRECTOR S SHRI ANIL AGARWAL AND SMT. NEETI AGARWAL RESPECTIVELY OF BOTH THE AFORESAID CO MPANIES CANNOT APPEAR IN PERSON DUE TO UNAVOIDABLE CIRCUMSTANCES AND ALSO TH AT THE BOOKS OF ACCOUNT OF BOTH THE CONCERNS CANNOT BE PRODUCED. AFTER EXAMINING C OPY OF LEDGER ACCOUNT OF THE SAID COMPANIES, THE ASSESSING OFFICER FOUND THAT M/ S. SASA FOOD PVT. LTD. HAS GIVEN LOAN OF ` 38,00,000/- AND M/S. FRIENDS BUILDTECH DEVELOPERS P VT. LTD. OF ` 30,00,000/-. THE SAID COMPANIES HAVE NOT PRODUCED THE BOOKS OF ACCOUNT REGARDING SOURCE OF ` 68,00,000/- WHICH IS IN DISPUTE. AFTER EXAMINING A LL THE DOCUMENTARY EVIDENCES PRODUCED BY THE ASSESSING OFF ICER, THE ASSESSING OFFICER WAS OF THE OPINION THAT THE DIRECTORS OF BOTH THE C OMPANIES DELIBERATELY DID NOT APPEAR BEFORE HIM TO EXPLAIN THE NATURE OF TRANSACT ION AND TO RECONCILE THESE TRANSACTIONS WITH REGULAR BOOKS OF ACCOUNT AND THE LENDERS/CREDITORS COULD NOT BRING ANY EVIDENCE TO PROVE THE SOURCE OF THESE FUNDS OF ` 68,00,000/- AND THEY COULD NOT 4 EXPLAIN THE NATURE OF TRANSACTION. THESE COMPANIES ARE NOT ENGAGED IN ANY KIND OF BUSINESS ACTIVITY BUT ARE ENGAGED IN PROVIDING BOGU S ENTRIES TO OTHERS. THE ASSESSING OFFICER ALSO WAS OF THE OPINION THAT THER E IS NO LAW WHICH SAYS THAT THE TRANSACTIONS MADE FROM BANKING CHANNEL ARE SACROSAN CT AND THEY CANNOT BE DOUBTED. THE ASSESSING OFFICER, AFTER RELYING ON V ARIOUS DECISIONS RENDERED BY THE HONBLE SUPREME COURT OF INDIA AS WELL AS VARIOUS H ONBLE HIGH COURTS, COMPLETED THE ASSESSMENT BY HOLDING THAT EVEN IF TH E AMOUNTS WERE GIVEN BY CHEQUE, THE DEPOSITORS WERE PRODUCED BEFORE THE ASS ESSING OFFICER WHO HAD ADMITTED THE TRANSACTIONS, THEY WERE ASSESSED TO TA X, THE DEPOSITS CAN STILL BE TREATED AS UNEXPLAINED UNDER SECTION 68 OF THE ACT. THE AS SESSING OFFICER HELD THAT THE ASSESSEE COULD NOT PROVE THE CREDITWORTHINESS AND G ENUINENESS OF THE TRANSACTION AND, THEREFORE, AN ADDITION OF ` 68,00,000/- WAS BEING MADE TO THE INCOME OF THE ASSESSEE COMPANY UNDER SECTION 68 OF THE ACT AS UNE XPLAINED INCOME FROM UNDISCLOSED SOURCES BY COMPLETING THE ASSESSMENT UN DER SECTION 147/143(3) OF THE ACT ON 12.12.2008. AGGRIEVED BY THE SAME, THE ASSE SSEE FILED APPEAL BEFORE THE LD. FIRST APPELLATE AUTHORITY WHO VIDE THE IMPUGNED ORD ER DATED 08.03.2010 DELETED THE ADDITION IN DISPUTE BY RELYING UPON VARIOUS DEC ISIONS RENDERED BY THE HONBLE SUPREME COURT OF INDIA AS WELL AS HONBLE HIGH COUR TS AND DELETED THE ADDITION IN DISPUTE. NOW THE REVENUE HAS FILED THE PRESENT APP EAL AGAINST THE IMPUGNED ORDER DATED 08.03.2010. 5 3. AT THE TIME OF HEARING, THE LD. DEPARTMENTAL REP RESENTATIVE RELIED UPON THE ORDER PASSED BY THE ASSESSING OFFICER AND, ON THE C ONTRARY, THE LD. COUNSEL FOR THE ASSESSEE RELIED UPON THE ORDER PASSED BY THE LD. FI RST APPELLATE AUTHORITY. THE LD. COUNSEL FOR THE ASSESSEE ALSO FILED A PAPER BOOK CO NTAINING PAGES 1 TO 88 IN WHICH HE HAS FILED VARIOUS DOCUMENTARY EVIDENCES SUPPORTI NG THE ORDER OF THE LD. FIRST APPELLATE AUTHORITY. HE HAS ALSO CERTIFIED THAT TH IS PAPER BOOK CONTAINS 88 PAGES AND ALL THE DOCUMENTS OF THIS PAPER BOOK (EXCEPT PA GE NOS.1 TO 4 WHICH IS WRITTEN SUBMISSION BEFORE THE ITAT AND PAGE NOS.36 TO 88 WH ICH ARE PHOTOCOPIES OF CERTAIN CASE LAWS) WERE ALSO FILED/PLACED BEFORE TH E ASSESSING OFFICER AND CIT(A). HE LASTLY RELIED UPON THE ORDER OF LD. THIRD MEMBER OF ITAT, AGRA BENCH, AGRA IN ITA NO.231/AGR/2006 IN THE CASE OF M/S. UMESH EL ECTRICALS, AGRA VS. ACIT-I, AGRA DECIDED ON 17.01.2011 WHICH HE HAS ATTACHED AT PAGE NOS.69 TO 88 OF THE PAPER BOOK. HE STATED THAT THE LD. THIRD MEMBER HA D DECIDED THE ISSUE IN DISPUTE IN FAVOUR OF THE ASSESSEE AFTER APPRECIATING VARIOU S DECISIONS OF HONBLE SUPREME COURT OF INDIA AS WELL AS THE DECISIONS OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. RAJESH DAL MILL, MATHURA IN REFEREN CE NO.12 OF 1994 DATED 22.09.2006, THE DECISION OF HONBLE GUJARAT HIGH CO URT IN THE CASE OF CIT VS. PRAGATI CO-OPERATIVE BANK LIMITED (2005) 278 ITR 17 0 (GUJ.) AND MURLIDHAR LAHORIMAL VS. CIT (2006) 280 ITR 512 (GUJ.). HE RE QUESTED THAT THE ISSUE IN DISPUTE HAS ALREADY BEEN DECIDED BY THIS BENCH IN F AVOUR OF THE ASSESSEE. 6 RESPECTFULLY FOLLOWING THE SAME, THE APPEAL FILED B Y THE REVENUE MAY BE DISMISSED. 4. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE R ELEVANT RECORDS AVAILABLE WITH US. WE ARE OF THE CONSIDERED OPINION THAT THE ISSUE IN DISPUTE HAS ALREADY BEEN DECIDED BY THE LD. THIRD MEMBER OF THIS BENCH, I.E. LD. ACCOUNTANT MEMBER, ON 17.01.2011 IN ITA NO.231/AGR/2006 FOR ASSESSMENT YEAR 2000-01 IN THE CASE OF M/S. UMESH ELECTRICALS, AGRA VS. ACIT-I, AGRA. AFTER PERUSING THE EVIDENCES PRODUCED BY THE ASSESSEE BEFORE THE REVENUE AUTHORI TIES BELOW AS WELL AS BEFORE US, WE ARE OF THE CONSIDERED OPINION THAT THE ASSES SING OFFICER, WITHOUT LOOKING INTO THE FACTS AND BRINGING ANY EVIDENCE TO THE CON TRARY, REJECTED THE EXPLANATION OF THE ASSESSEE WHICH IS NOT PERMISSIBLE UNDER LAW. T HE LD. THIRD MEMBER HAS ADJUDICATED AND DECIDED SIMILAR ISSUE IN DISPUTE IN FAVOUR OF THE ASSESSEE AFTER THOROUGHLY GOING THROUGH VARIOUS DECISIONS OF HONB LE SUPREME COURT OF INDIA AND HONBLE HIGH COURTS. RESPECTFULLY FOLLOWING TH E SAME, WE ARE OF THE OPINION THAT THE ASSESSING OFFICER HAS MADE THE ADDITION IN DISPUTE WITHOUT APPRECIATING THE EVIDENCES PRODUCED BY THE ASSESSEE AND WRONGLY REJECTED THE EXPLANATION OF THE ASSESSEE WITHOUT ANY BASIS AND THE LD. FIRST APPELL ATE AUTHORITY HAS RIGHTLY APPRECIATED THE SAME AND DELETED THE ADDITION IN DI SPUTE AFTER APPRECIATING VARIOUS DECISIONS RENDERED BY THE HONBLE SUPREME COURT OF INDIA AS WELL AS HONBLE HIGH COURTS. 7 5. KEEPING IN VIEW THE FACTS AND CIRCUMSTANCES EXPL AINED ABOVE, WE ARE OF THE CONSIDERED OPINION THAT THE LD. FIRST APPELLATE AUT HORITY HAS RIGHTLY DELETED THE ADDITION IN DISPUTE. WE UPHOLD THE IMPUGNED ORDER BY DISMISSING THE APPEAL FIELD BY THE REVENUE. 6. IN THE RESULT, APPEAL FILED BY THE REVENUE IS DI SMISSED. (ORDER PRONOUNCED IN THE OPEN COURT ON 30.06.2011 ). SD/- SD/- (P.K. BANSAL) (H.S. SIDHU) ACCOUNTANT MEMBER JUDICIAL MEMBER PLACE: AGRA DATE: 30 TH JUNE, 2011 PBN/* COPY OF THE ORDER FORWARDED TO: 1. APPELLANT 2. RESPONDENT BY ORDER 3. CIT CONCERNED 4. CIT (APPEALS) CONCERNED 5. DR, ITAT, AGRA BENCH, AGRA 6. GUARD FILE ASSISTANT REGISTRAR INCOME-TAX APPELLATE TRIBUNAL, AGRA TRUE COPY