AVIS MARIANE ENGINEERS P.LTD, MUMBAI V. ITO 3(1)(1), MUMBAI

ITA 2223/MUM/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 84203 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 7 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-11-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 07-10-2014
• Assessment Year: 2001-2002
• Appeal Filed On: 03-04-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: VIVEK BATRA
• Keywords: Unexplained cash credit; Additional evidence
• Section: 143(3); 133(6); 68; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, MUMBAI BEFORE SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER AND SHRI SANJAY GARG, JUDICIAL MEMBER ./I.T.A. NO. 2223/M/2012 ( AY: 2001 - 2002 ) AVIS MARINE ENGINEERS PVT LTD., 715, RAHEJA CHAMBERS, NARIMAN POINT, MUMBAI 400 021. / VS. ITO - 3(1)(1), AAYAKAR BHAVAN, M.K. ROAD, MUMBAI 400 020. ./ PAN : AAACA4239L ( / APPELLANT) .. ( / RESPONDENT ) / APPELLANT BY : SHRI PRAKASH PANDIT / RESPONDENT BY : SHRI VIVEK BATRA / DATE OF HEARING : 07 .10.2014 / DATE OF PRONOUNCEMENT : 14 .11.2014 / O R D E R PER D. KARUNAKARA RAO, AM: THIS APPEAL FILED BY THE ASSESSEE ON 3.4.2012 IS AGAINST THE ORDER OF THE CIT (A) - 5, MUMBAI DATED 13.1.2012 FOR THE ASSESSMENT YEAR 2001 - 2002. 2. IN THIS APPEAL, ASSESSEE RAISED THE FOLLOWING GROUNDS WHICH READ AS UNDER: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, LD CIT (A) ERRED IN LAW IN UPHOLDING THE ADDITION OF RS. 8,00,000/ - AS UNEXPLAINED CASH CREDIT WITHOUT APPRECIATING THE FACTS THAT APPELLANT HAS ESTABLISHED THE IDENTITY OF THE CREDITOR. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD CIT (A) ERR ED IN LAW IN UPHOLDING THE AOS ORDER OVERLOOKING THE FACT THAT THE ASSESSEE HAD PRODUCED FULL DETAILS OF THE PERSON FROM WHOM THE CASH DEPOSIT WAS RECEIVED. 3. BRIEFLY STATED RELEVANT FACTS OF THE CASE ARE THAT THE ASSESSEE IS ENGAGED IN HIRING DIESEL GE NERATOR SETS. ASSESSEE FILED THE RETURN OF INCOME DECLARING THE TOTAL LOSS OF RS. 1,23,384/ - . IN THE SCRUTINY ASSESSMENT, AO MADE ADDITION OF RS. 8 LAKHS. MATTER TRAVELLED TO THE ITAT AND THE ISSUES WERE REMANDED BY THE TRIBUNAL FOR DE NOVO ADJUDICATION OF THE ISSUE RELATING TO THE SAID ADDITION OF RS. 8 LAKHS U/S 68 OF 2 THE ACT. THE PRESENT APPEAL EMANATES FROM THE ASSESSMENT ORDER PASSED U/S 143(3) R.W.S. 254 OF THE ACT. RELEVANT FACTS RELATING TO THE ADDITION OF RS. 8 LAKHS ARE THAT THE ASSESSEE RECE IVED RS. 8 LAKHS IN CASH IN TWO SPELLS IE., ON 26.9.2000 (RS. 2 LAKHS) AND 14.12.2000 (RS. 6 LAKHS) FROM MR. N. VENKATARAMAN AND THE SAME WAS INTENDED FOR THE PURCHASE OF FACTORY BUILDING FOR A TOTAL SUM OF RS. 53,00,050/ - . AN AGREEMENT IN SUPPORT OF THE SAME IS PLACED ON RECORD. THE SAID SUM OF RS. 8 LAKHS CONSTITUTES 15% OF THE GROSS PRICE RECEIVED BY THE ASSESSEE. A QUESTION WAS RAISED BY THE AO ABOUT THE SOURCE OF SAID CASH CREDITS. INITIALLY, ASSESSEE DID NOT FILE ANY INFORMATION . B UT IN THE SECON D ROUND , ASSESSEE FURNISHED RECEIPTS FOR THE SUM S OF RS. 2 LAKHS AND RS. 6 LAKHS. TH E COPIES OF THE SAID RECEIPTS ARE PLACED AT PA GES 27 AND 28 OF THE PAPER BOOK. FURTHER, THE DEMAND DRAFT IS PLACED AT PA GE 10 AND 11 OF THE PAPER BOOK. T HE BANK EXTRACT OF THE ASSESSEE SHOWING THE CREDITS OF THE SAID AMOUNTS IN THE RELEVANT DATES IS ALSO FILED BY THE ASSESSEE . ASSESSEE ALSO SUBMITTED THAT THE SAID AGREEMENT WAS CANCELLED ORALLY AND THE AMOUNT WAS RETURNED BY WAY OF DEMAND DRAFT. FURTHER, ASSESSEE ALSO SUBMITTED A COPY OF THE CONFIRMATION FROM THE BANK ABOUT THE PAYMENT OF DEMAND DRAFT ON 4.5.2001. HOWEVER, ASSESSEE NE I THER PRODUCE D SH RI N. VENKATARAMAN NOR HIS CONFIRMATION LETTER BEFORE THE AO. THEREFORE , AO INITIATED THE INVESTIGATION INTO THE GENUIN ENESS OF THE TRANSACTION. IN THIS REGARD, HE ISSUED A COMMISSION TO THE INVESTIGATION WING, HYDERABAD FOR RECORDING THE STATEMENT FROM SHRI VENKATARAMAN. ACCORDINGLY, A STATEMENT WAS RECORDED BY THE ADIT ON 27.4.2004. THE COPY OF THE STATEMENT IS PLACED ON RECORD AND THE SAME WAS MADE AVAILABLE TO THE ASSESSEE FOR HIS COMMENTS. THE SAID STATEMENT CONTAINS THE SPECIFIC QUESTIONS ABOUT THE GENUINENESS OF THE TRANSACTIONS AND HIS CONNECTION TO THE TRANSACTIONS. PAGE 14 TO 16 OF THE PAPER BOOK ARE RELEVANT HERE. IN RESPONSE TO THE QUESTION NO .15 (HAVE YOU EVER ENTERED I NTO AN AGREEMENT IN RESPECT OF ACQUIRING LAND WITH M/S. AVIS MARINE ENGINEERS P LTD, MUMBAI) , SHRI VENKATARAMAN RESPONDED NEGATIVELY (NO. I HAVE NEVER ENTERED INTO AN AGREEMENT IN RESPECT OF ACQUIRING LAND WITH M/S. AVIS MARINE ENGINEERS P LTD, MUMBAI). R ELYING ON THE SAID STATEMENT DEPOSED BY SHRI VENKATARAMAN, ASSESSING OFFICER WAS NOT SATISFIED ABOUT THE GENUINENESS OF THE TRANSACTION. ON THE ASSESSEES ASSERTION ABOUT THE RETURN OF THE SAID RS. 8 LAKHS BY DEMAND DRAFT, AO MENTIONED THAT THE PAYMENT OF THE SAME TO SHRI VENKATARAMAN WAS NOT BORNE ON 3 THE BANK STATEMENT FURNISHED TO THE AO. REGARDING THE SIGNATURE AVAILABLE ON RECORDS, AO IS OF THE OPINION THAT THE SAID SIGNATURES ARE DENIED BY THE ASSESSEE IN THE STATEMENT AND IN SUCH CIRCUMSTANCES, THE TRANSACTION BECOMES NON - GENUINE. ACCORDINGLY, HE PROCEEDED TO MAKE ADDITION OF RS. 8 LAKHS U/S 68 OF THE ACT. MATTER TRAVELLED TO THE CIT (A) . 4. DURING THE PROCEEDINGS BEFORE THE FIRST APPELLATE AUTHORITY ASSESSEE MADE WRITTEN SUBMISSIONS AND ALSO FURNI SHED ADDITIONAL EVIDENCES WHICH IS DISCUSSED IN PARA 3 OF THE IMPUGNED ORDER. IN THE S UBMISSIONS, IN CONNECTION WITH THE STATEMENT DATED 27.4.2004 BY SHRI VENKATARAMAN, ASSESSEE SOUGHT AN OPPORTUNITY FOR CROSS EXAMINING MR. VENKATARAMAN. ASSESSEE IS CRIT ICAL OF AOS FAILURE TO FURNISH SHRI VENKATARAMAN FOR CROSS EXAMINATION. ASSESSEE ALSO RELIED ON THE REFUND OF RS. 8 LAKHS BY VIRTUE OF DEMAND DRAFT AND THE ENCASHMENT OF THE SAME BY SHRI VENKATARAMAN. ON CONSIDERING THE SAID SUBMISSIONS OF THE ASSESSEE , CIT (A) IS OF THE OPINION THAT THE CROSS EXAMINATION IS UNCALLED FOR IN THIS CASE AS SHRI VENKATARAMAN IS NOT A THIRD PARTY AND HE IS A WITNESS OF THE ASSESSEE, WHO SHOULD HAVE PRODUCED SHRI VENKATARAMN BEFORE THE AO AS HIS WITNESS. IT IS SETTLED LEGAL PROPOSITION THAT THE A SSESSEE IS SUPPOSED TO HAVE FURNISH ED THE IDENTITY , CREDITWORTHINESS OF SHRI VENKATARAMAN AND THE GENUINENESS OF THE TRANSACTION TO THE SATISFACTION OF THE AO AND , THE ASSESSEE FAILED IN THIS REGARD. THEREFORE, CIT (A) CAME TO THE CO NCLUSION THAT THE ADDITION MADE BY THE AO IS REASONABLE. THE FACT THAT SHRKI VENKATARAMAN DENIED OF HAVING BEEN GIVEN ANY ADVANCE TO THE ASSESSEE OR HAVING ENTERED INTO ANY AGREEMENT WITH THE ASSESSEE WAS ALSO HIGHLIGHTED IN HIS ORDER FROM PARA 3.4.1 OF T HE IMPUGNED ORDER. CIT (A) RELIED ON THE ITAT, LUCKNOW BENCH DECISION IN THE CASE OF SRI RAJESH KUMAR GUPTA VS. ACIT VIDE ITA NO.359/LUC/05), DATED 10.8.2007 AND EXTRACTED PARA 15 OF THE SAID DECISION IN HIS ORDER. AGGRIEVED WITH THE SAID DECISION OF THE CIT (A), ASSESSEE FILED AN APPEAL BEFORE US. 5. DURING THE PROCEEDINGS BEFORE US, LD COUNSEL FOR THE ASSESSEE BROUGHT OUR ATTENTION TO EACH PAGE OF THE PAPER BOOK FILED BEFORE US AND MENTIONED THAT THE ARGUMENTS SUBMITTED TO THE LOWER AUTHORITIES ARE RELE VANT AND THEREFORE, HE REITERATED THE SAME. 4 6. PER CONTRA, LD DR ARGUED STATING THAT IT IS THE RESPONSIBILITY OF THE ASSESSEE TO FURNISH THE PRELIMINARY DETAILS RELATING TO THE IDENTITY, CREDITWORTHINESS AS WELL AS THE GENUINENESS OF THE TRANSACTION AS ENS HRINED IN THE PROVISIONS OF SECTION 68 OF THE ACT. ASSESSEE FAILED TO PRODUCE SHRI VENKATARAMAN BEFORE THE AO BUT ALSO FAILED TO SUBMIT THE CREDITWORTHINESS OF SHRI VENKATARAMAN AS WELL AS THE GENUINENESS OF THE TRANSACTION TO THE SATISFACTION OF THE ASSE SSING OFFICER. BRINGING OUR ATTENTION TO THE COPY OF THE AGREEMENT DATED 26.9.2000 (PAGE 18 OF THE PB) LD DR MENTIONED THAT THE STAMP PAPER DATED 29.3.1999 WAS NOT PURC HASED IN THE NAME OF THE ASSESS EE AND THEREFORE, THE CREATION OF AGREEMENT TO SALE IS A N OBJECT OF AFTERTHOUGHT. FURTHER, BRINGING OUR ATTENTION TO THE SO CALLED CONFIRMATION ISSUED BY THE SBI, LD DR MENTIONED THAT THE SAID CONFIRMATION DATED 29.4.2010 DOES NOT MENTION ABOUT THE BANK A/C NO AND THE BENEFICIARY OF THE DEMAND DRAFT IS SHRI VE NKATARAMAN, ALLEGED PURCHASER OF THE LAND AND THE INDUSTRIAL BUILDING. FURTHER, RELYING HEAVILY ON THE STATEMENT GIVEN BY SHRI VENKATARAMAN, WHO DENIED OF HAVING ENTERED INTO ANY TRANSACTION WITH THE ASSESSEE , LD DR BROUGHT OUR ATTENTION TO THE RELEVANT Q UESTIONS AND ANSWERS (Q NO.14 TO 16) TO DEMONSTRATE THE NON - GENUINENESS OF THE IMPUGNED TRANSACTIONS. FURTHER, HE ALSO READ OUT RELEVANT PARAS OF THE IMPUGNED ORDER TO DEMONSTRATE THAT SHRI VENKATARAMAN IS THE PA RTY TO THE IMPUGNED TRANSACTION. IT IS FOR THE ASSESSEE TO PRODUCE HIM BEFORE THE AUTHORITIES. HE REJECTED THE ASSESSEES SUBMISSION THAT SHRI VENKATARAMAN SHOULD BE PRODUCED BY THE AO TO THE ASSESSEE FOR CROSS EXAMINATION. 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE ORDERS OF THE REVENUE AUTHORITIES AS WELL AS THE RELEVANT DOCUMENTS PLACED BEFORE US. IT IS AN UNDISPUTED FACT THAT THE SUM OF RS. 8 LAKHS IS A CASH CREDIT IN THE BOOKS . THEREFORE, THE PROVISIONS OF SECTION 68 ARE RIGHTLY INVOKED BY THE AO. ACCORDING TO THE PROVISIONS OF THE SAID SECTION, ASSESSEE IS LIABLE TO FURNISH THE INFORMATION ABOUT THE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTIONS. IT IS ALSO AN UNDISPUTED FACT THAT SHRI VENKTARAMAN DID NOT RESPOND TO THE NOTICE ISSUED BY THE AO U/S 133(6) OF THE ACT , AND THERE ARE NO DETAILS ABOUT HIS CREDITWORTHINESS . O NLY THE COPY OF THE BANK ACCOUNT WAS MADE AVAILABLE TO THE AO. REGARDING THE GENUINENESS OF THE TRANSACTION THERE ARE NUMBER OF T WISTS LEADING TO THE CREATION OF DISPUTE ABOUT THE 5 GENUINENESS OF THE TRANSACTION. THE SIGNATURES ON THE IMPUGNED AGREEMENT TO SALE TALLIES WITH THE STATEMENT RECORDED BY THE INVESTIGATIVE WING, HYDERABAD DATED 27.4.2004. ON THE OTHER HAND, SHRI VENKATARA MAN HAD DENIED OF HAVING ENTERED INTO ANY TRANSACTION WITH THE ASSESSEE FOR PURCHASE OF LAND AND THE INDUSTRIAL BUILDING. THE BANK CONFIRMATION DOES NOT INDICATE THAT SHRI VENKATARAMAN IS THE RECIPIENT OF THE SUM OF RS. 8 LAKHS. IN THESE CIRCUMSTANCES, W E ARE OF THE OPINION THAT ASSESSEE FAILED TO DISCHARGE THE ONUS FULLY . IN OUR OPINION, SHRI VENKATARAMAN CONTINUES TO BE THE WITNESS OF THE ASSESSEE WHO GAVE STATEMENT AGAINST THE ASSESSEE AND RAISED QUESTIONS ABOUT THE GENUINENESS OF THE TRANSACTION. IT IS A SETTLED LEGAL PROPOSITION THAT THE BANKING TRANSACTIONS / DD ARE NOT SACROSANCT. PROPOSED AGREEMENT (SUPRA) IS NOT FREE FROM DISPUTES. IN THE CIRCUMSTANCES, WE ARE OF THE CONSIDERED OPINION THAT THE DECISION OF THE CIT (A) IS FAIR AND REASONABLE AN D IT DOES NOT CALL FOR ANY INTERFERENCE. ACCORDINGLY, GROUNDS RAISED BY THE ASSESSEE ARE DISMISSED. 8. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMISSED. ORDER P RONOUNCED IN THE OPEN COURT ON 1 4 T H NOVEMBER , 2014. SD / - S D / - ( SANJAY GARG ) (D. KARUNAKARA RAO ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI ; 1 4 /11/2014 . . ./ OKK , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . 6 //TRUE COPY// / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI