DCIT, BIKANER V. M/s. R.C. Jewellers, HANUMANGARH

ITA 222/JODH/2013

• Counselvise Citation: 22223314 RSA 2013
• Duration Of Justice: 5 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-09-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 11-04-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N A JOSHI
• Section: 68

Judgement Text

IN THE INCOME TAX APPELALTE TRIBUNAL : JODHPUR BENC H : JODHPUR BEFORE SHRI HARI OM MARATHA, JUDICIAL MEMBER AND SHRI N.K. SAINI, ACCOUNTANT MEMBER. ITA NO.222/JODH/2013 (A.Y. 2009-10) DCIT, VS. M/S. R.C. JEWELLERS, CIRCLE - 2, OLD DHAN MANDI SANGARIA, BIKANER. HANUMANGARH. PAN NO. AAJFR9654E ASSESSEE BY : NONE DEPARTMENT BY : SHRI N.A. JOSHI- D.R. DATE OF HEARING : 09/09/2013. DATE OF PRONOUNCEMENT : /09/2013. O R D E R PER N.K.SAINI, A.M THIS IS AN APPEAL BY THE DEPARTMENT AGAINST THE OR DER OF LD. CIT (A), BIKANER DATED 02/01/2013. THE ONLY GROUND RAISED I N THIS APPEAL READS AS UNDER: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN DELETING ADDITION OF RS. 12,00,000/- MADE U/S 68 OF THE I.T. ACT, 1961. 2 DURING THE COURSE OF HEARING, NOBODY APPEARED ON B EHALF OF ASSESSEE NOR ANY ADJOURNMENT WAS SOUGHT. WE, THERE FORE, PROCEEDED 2 EXPARTE QUA THE ASSESSEE TO DECIDE THIS APPEAL ON MERITS A FTER HEARING THE LEARNED D.R. 2.1. THE FACTS OF THIS CASE IN BRIEF ARE THAT THE ASSES SEE FILED ITS RETURN OF INCOME ON 22/09/2009 DECLARING TOTAL INCOME OF R S. 13,60,860/-. IN THIS CASE, A SURVEY WAS CONDUCTED ON 12/02/2009 AND ACCORDINGLY, CASE WAS SELECTED FOR COMPULSORY SCRUTINY. THE ASSESSIN G OFFICER NOTICED THAT THE ASSESSEE HAD SHOWN LIABILITY OF RS. 73,11,011/- ON ACCOUNT OF UNSECURED LOANS, THE ASSESSEE WAS ASKED TO FILE COP IES OF ALL THE DEPOSITORS. FROM THE SAID DETAILS, THE ASSESSING O FFICER NOTICED THAT THERE WERE CERTAIN FRESH DEPOSITS/CASH CREDITS DURI NG THE YEAR UNDER CONSIDERATION. THE DETAIL OF THOSE DEPOSITS/CASH C REDITS HAS BEEN MENTIONED BY THE ASSESSING OFFICER AT PAGE 2 OF THE ASSESSMENT ORDER, FOR THE COST OF REPETITION, THE SAME IS NOT REPRODUCED HEREIN. ACCORDING TO ASSESSING OFFICER, THE ASSESSEE HAD NOT DISCHARGED THE ONUS FOR PROVING CREDITWORTHINESS OF THE DEPOSITORS AND GENUINENESS OF THE TRANSACTION AND THAT A MERE PAYMENT BY THE ACCOUNT PAYEE CHEQUE WAS NOT SACROSANCT NOR IT CAN MAKE A NON-GENUINE TRANSACTION AS GENUIN E. RELIANCE WAS PLACED ON THE JUDGMENT OF HON'BLE CALCUTTA HIGH COU RT REPORTED IN 208 ITR 465 AND 132 ITR 820 . THE ASSESSING OFFICER WAS OF THE VIEW THAT THE ASSESSEE HAD NOT FULFILLED ALL THE THREE CONDITIONS I.E. IDENTITY OF THE 3 CREDITORS, THEIR CREDITWORTHINESS AND GENUINENESS O F THE TRANSACTION. HE, THEREFORE, HELD THAT THE CASH CREDITS AMOUNTING TO RS. 12,00,000/- WERE NON-GENUINE AND CHARGED THEM TO INCOME TAX AS INCOM E OF THE ASSESSEE UNDER SECTION 68 OF THE I.T. ACT, 1961 (HEREINAFTER REFERRED TO AS ACT, FOR SHORT), AS PER FOLLOWING DETAIL:- 1. MINAKSHI SONI BUNPS1312K RS. 1,00,000/ - 2. LAXMI DEVI SONI BUNPS1314R RS. 1,00,000/ - RS. 1,00,000/- 3 LILA DEVI SONI BUNPS1315Q RS. 2,00,000/ - 4 GOPI RAM SONI ABMPS5154Q RS. 2,50,000/ - 5 MAHINDRA PAL SONI ABMPS5183R RS. 1,00,000/ - 6 ASHOK KUMAR SINGHLA AIDPS2134E RS. 1,50,000/ - 7 KUSUM GARG ASTPG2064K RS. 2,00,000/ - TOTAL RS. 12,00,000/ - 3. BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTER T O THE LEARNED CIT(A) AND SUBMITTED THAT THE ASSESSEE HAD TAKEN LO AN FROM 05 CREDITORS THROUGH ACCOUNT PAYEE CHEQUES AND SUBMITTED AFFIDAV ITS, CONFIRMATION LETTERS, COPY OF ITRS FILED IN TWO CASES, COPY OF B ALANCE SHEET AND COPY OF THEIR BANK ACCOUNTS FROM WHERE THEY HAD ISSUED ACCO UNT PAYEE CHEQUE TO THE ASSESSEE. IT WAS CONTENDED THAT THE ASSESSING OFFICER ASKED THE ASSESSEE FOR PRESENCE OF THOSE CREDITORS, IN RESPON SE TO THE SAME, ALL THE FIVE CREDITORS APPEARED BEFORE THE ASSESSING OFFICE R, WHO HAD ACCEPTED THAT THEY HAD GIVEN LOAN THROUGH A/C PAYEE CHEQUES TO THE ASSESSEE FROM 4 THEIR OWN SOURCE. IT WAS ALSO CONTENDED THAT ASSES SING OFFICER HAD TREATED THOSE LOANS AS NON-GENUINE BY GIVING FINDIN G THAT THE CREDITORS HAD NOT PROVED THEIR CREDITWORTHINESS AND GENUINENE SS OF THE TRANSACTION, WITHOUT BRINING ANY MATERIAL ON RECORD TO PROVE THA T THOSE PEOPLE HAD GIVEN WRONG STATEMENT THAT THEY HAD GIVEN LOAN TO T HE ASSESSEE FROM THEIR OWN SOURCES. IT WAS FURTHER CONTENDED THAT TH E ASSESSING OFFICER HAD ALSO NOT BROUGHT ANY MATERIAL ON RECORD TO PROV E THAT HOW THE DEPOSITS IN BANK ACCOUNTS OF THOSE CREDITORS WERE O F ASSESSEE AND HOW THE SAID AMOUNT WAS ORIGINALLY OWNED BY THE ASSESSEE. IT WAS POINTED OUT THAT THE ASSESSEE HAD PAID INTEREST OF RS. 1,00,436 /- ON THE FOLLOWING LOAN AMOUNT AFTER DEDUCTING TDS/SUBMISSION OF FORM 15H AND FILED TDS RETURNS ACCORDINGLY: NAME OF THE PERSON S INTEREST AMOUNT MEENAKSHI SONI 10,500/ - LAXMI DEVI SONI 10,693/ - LILA DEVI SONI 24,000/ - GOPI RAM SONI 26,250/ - MAHENDRA PAL SONI 28,993/ - TOTAL 1,00,436/ - IT WAS STATED THAT THE ASSESSING OFFICER HAD ACCEP TED THE PAYMENT OF INTEREST AS GENUINE AND WHEN PAYMENT OF INTEREST WAS TREATED AS GENUINE AND DEDUCTION WAS ALLOWED, THEN HOW THE PRI NCIPAL LOAN AMOUNT WOULD NOT BE GENUINE. 5 4. LEARNED CIT(A) AFTER CONSIDERING THE SUBMISSIONS O F ASSESSEE OBSERVED THAT ASSESSEE HAD SUBMITTED AFFIDAVIT, CON FIRMATION LETTER, COPY OF ITR IN TWO CASES, COPY OF BALANCE SHEET AND COPY OF BANK STATEMENT OF CREDITORS AND THAT ALL THE CREDITORS HAD PRESENTED THEMSELVES BEFORE ASSESSING OFFICER, THUS, THE ASSESSEE HAD DISCHARGE D ITS LIABILITY TO PROVE THE IDENTITY OF PEOPLE, WHO HAD GIVEN LOAN TO THE A SSESSEE AND THEIR CREDITWORTHINESS. HE, THEREFORE, DELETED THE ADDIT ION AMOUNTING TO RS.8,50,000/- ON ACCOUNT OF 05 CREDITORS. AS REGAR DS TO THE LOANS TAKEN FROM OTHER TWO PERSONS, NAMELY, SHRI ASHOK KUMAR SI NGLA AND SMT. KUSUM GARG THROUGH A/C PAYEE CHEQUES, THE LEARNED CIT(A) OBSERVED THAT THE ASSESSEE HAD SUBMITTED AFFIDAVIT, CONFIRMATION LETT ER, COPY OF INCOME-TAX RETURN OF ASHOK KUMAR SINGLA COPY OF BANK ACCOUNT W ITH OTHER RELEVANT DOCUMENTS AND THE ASSESSING OFFICER HAD NOT DOUBTED THE IDENTITY OF THE CREDITORS AFTER FILING OF THE AFORESAID DOCUMENTS, THUS, THE SAME WAS ACCEPTED AS GENUINE. AS REGARDS TO THE CREDITWORTH INESS WAS CONCERNED, THE LEARNED CIT(A) OBSERVED THAT THE ASSESSEE HAD D ISCHARGED ITS BURDEN BY SUBMITTING AFORESAID DOCUMENTS, THEREFORE, NON-P RESENCE OF CREDITORS BEFORE ASSESSING OFFICER COULD NOT BE A GROUND FOR MAKING ANY ADDITION. LEARNED CIT(A) ALSO OBSERVED THAT ASSESSING OFFICER HAD NOT BROUGHT ANY MATERIAL ON RECORD TO PROVE THE SOURCE OF AMOUNT DE POSITED IN CASH BY 6 THE CREDITORS IN THEIR BANK ACCOUNT DID NOT BELONG TO THE CREDITORS THEMSELVES AND THE SAME WAS OWNED BY THE ASSESSEE ITSELF. HE ALSO POINTED OUT THAT THE ASSESSEE HAD PAID INTEREST OF RS. 43,750/- AND RS. 11,250/- TO SHRI ASHOK KUMAR SINGLA AND KUSUM GARG RESPECTIVELY, WHICH WAS ACCEPTED AS GENUINE BY THE ASSESSING OFFICER, W HO ALLOWED THE DEDUCTION OF SAID INTEREST, THEREFORE, THE LOAN AMO UNT RECEIVED FROM THOSE PERSONS COULD NOT BE TREATED AS NON-GENUINE. ACCORDINGLY, ADDITION OF RS. 3,50,000/- WAS ALSO DELETED. RELIANCE WAS P LACED ON THE FOLLOWING CASE-LAWS:- 1) CIT VS. METCHEM INDUSTRIES (245 ITR 160) 2) NEMI CHAND KOTHARI VS. CIT(A) (265 ITR 254) LEARNED CIT(A) HELD THAT SINCE THE ASSESSEE HAD D ISCHARGED THE BASIC ONUS PLACED ON IT FOR PROVING GENUINENESS OF CREDITS, THE ADDITION OF RS. 12,00,000/- MADE BY ASSESSING OFFICER WAS NOT J USTIFIED. ACCORDINGLY, THE SAME WAS DELETED. NOW, THE DEPARTMENT IS IN A PPEAL. 5. LD. D.R. SUPPORTED THE ORDER OF ASSESSING OFFICER AND REITERATED THE OBSERVATIONS MADE IN THE ASSESSMENT ORDER. 6. WE HAVE CONSIDERED THE SUBMISSIONS OF LEARNED D.R. AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. IN THE PRESENT CASE, IT IS AN ADMITTED FACT THAT THE ASSESSING OFFICER MADE AN ADDITION OF RS. 7 12,00,000/- UNDER SECTION 68 OF THE ACT BY CONSIDER ING THE CASH CREDITS AMOUNTING TO RS. 12,00,000/- FROM 07 PERSONS AS NON -GENUINE. AT THE SAME TIME, HE ALLOWED THE INTEREST ON THE SAID CASH CREDITS BY CONSIDERING THE SAME AS GENUINE. IN OUR OPINION, W HEN THE INTEREST ON THE LOANS WAS ALLOWED AS GENUINE, THEN THERE WAS NO OCCASION TO CONSIDER THE LOANS, ON WHICH THE SAID INTEREST WAS PAID BY T HE ASSESSEE, AS NON- GENUINE. THEREFORE, WE ARE OF THE VIEW THAT THE LEA RNED CIT(A) HAS RIGHTY DELETED THE IMPUGNED ADDITION MADE BY THE ASSESSING OFFICER. ACCORDINGLY, WE DO NOT SEE ANY MERIT IN THIS DEPART MENTAL APPEAL. 7. IN THE RESULT, APPEAL OF THE DEPARTMENT IS DISMISS ED. (ORDER PRONOUNCED IN THE COURT ON SEPTEMBER, 20 13). (HARI OM MARATHA) (N.K.SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : SEPTEMBER, 2013. VR/- COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE LD.CIT 4. THE CIT(A) 5. THE D.R ASSISTANT REGISTRAR, ITAT, JODHPUR.