Mr. Ravi Prakash Khemka, CHENNAI V. ACIT, CHENNAI

ITA 2250/CHNY/2008

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 60963 (ITAT-CHENNAI)
• Duration Of Justice: 3 year(s) 3 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-04-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 1997-1998
• Appeal Filed On: 12-12-2008
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: CHANDANA RAMACHANDRAN
• Assessee Lawyers: R SIVARAMAN
• Keywords: Unexplained cash credit; Gift; Additional evidence; Corroborative evidences; Onus to prove
• Section: 142(1); 131; 68; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, CHENNAI BEFORE SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER AND SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER I.T.A. NO. 2250/MDS/2008 (ASSESSMENT YEAR : 1997-98) SHRI RAVI PRAKASH KHEMKA, 36, WALLAJAH ROAD, CHENNAI - 600 002. PAN : AAFPR1962H (APPELLANT) V. THE ASSISTANT COMMISSIONER OF INCOME TAX, COMPANY CIRCLE IV(4), CHENNAI - 600 034 . (RESPONDENT) APPELLANT BY : SHRI R. SIVARAMAN, ADVOCATE RESPONDENT BY : SMT. CHANDANA RAMACHANDRAN, CIT-DR DATE OF HEARING : 11.04.2012 DATE OF PRONOUNCEMENT : 11.04.2012 O R D E R PER ABRAHAM P. GEORGE, ACCOUNTANT MEMBER : THE ISSUE RAISED BY THE ASSESSEE IN THIS APPEAL IS REGARDING AN ADDITION OF ` 80 LAKHS MADE BY THE ASSESSING OFFICER AS UNEXPLAIN ED CASH CREDIT, WHICH WAS CONFIRMED BY THE CIT(APPEALS ). 2. BASIC FACTS AS CULLED OUT FROM AN ORDER OF THIS TRIBUNAL RELATING TO PENALTY APPEAL FOR THE SAME ASSESSMENT YEAR (I.T .A. NO. 1556/MDS/2002 DATED 7 TH SEPTEMBER, 2007), SHOW THAT ASSESSEE HAD NOT FILED HIS RETURN OF INCOME VOLUNTARILY FOR THE IMPUGNED I.T.A. NO. 2250/MDS/08 2 ASSESSMENT YEAR. THEREAFTER, A NOTICE WAS ISSUED U NDER SECTION 142(1) OF INCOME-TAX ACT, 1961 (IN SHORT 'THE ACT') FOR WHICH ALSO THERE WAS NO RESPONSE. ASSESSEE FINALLY FILED HIS RETURN ONLY ON 15.7.99. IT SEEMS ASSESSEE HAD NOT ATTENDED ASSESSMENT PROCEEDI NGS AND THE ASSESSMENT WAS COMPLETED UNDER SECTION 144 OF THE A CT. IN SUCH ASSESSMENTS ALONG WITH CERTAIN ADDITIONS, MADE FOR INVESTMENT MADE BY THE ASSESSEE IN ONE M/S SAI TELEVISIONS LTD., AS SESSING OFFICER ALSO MADE AN ADDITION FOR UNEXPLAINED CASH CREDIT O F ` 80 LAKHS. THE SAID SUM OF ` 80 LAKHS REPRESENTED AMOUNTS DEPOSITED IN AN S.B. ACCOUNT OF THE ASSESSEE IN CANARA BANK, BROADWAY BR ANCH, CHENNAI, ON THE FOLLOWING DATES:- 4.6.96 : ` 30 LAKHS 13.9.96 : ` 20 LAKHS 25.9.96 : ` 30 LAKHS DURING THE COURSE OF ASSESSMENT PROCEEDINGS, ASSESS EE HAD FILED A CONFIRMATION LETTER DATED 23.10.99 EXPLAINING THE A BOVE DEPOSITS AS LOANS FROM ONE M/S NEPC INDIA LTD. AND ONE M/S SKYL INE NEPC. THE DETAILS OF SUCH RECEIPTS, AS PER THIS LETTER, WERE AS FOLLOWS:- M/S NEPC INDIA LTD. ` 10,00,000/ - ON 1.6.96 -DO- ` 30,00,000/- ON 17.6.96 M/S NEPC AIRLINES ` 20,00,000/ - ON 1.6.96 M/S SKYLINE NEPC ` 12,00,000/ - ON 30.5.96 - DO - ` 08,00,000/ - ON 3.6.96 ASSESSING OFFICER DID NOT ACCEPT THE ABOVE EXPLANAT ION AND MADE AN ADDITION OF ` 80 LAKHS, AS ALREADY MENTIONED. THEREAFTER, ASSES SEE I.T.A. NO. 2250/MDS/08 3 FILED AN APPEAL BEFORE LD. CIT(APPEALS) WHEREIN HE ARGUED THAT THE SUM OF ` 80 LAKHS WAS NOT RECEIVED FROM M/S NEPC INDIA LTD. AND M/S SKYLINE NEPC BUT FROM ONE SHRI SURESH KUMAR AGARWAL, 120/6, LAJPATH NAGAR, KANPUR. IT SEEMS ASSESSEE FI LED A LETTER CONFIRMING THIS BEFORE LD. CIT, CENTRAL CIRCLE I, C HENNAI, ON 30.3.2000, BUT THE ASSESSMENT WAS COMPLETED ON THE VERY SAME DAY BY THE ASSESSING OFFICER. THOUGH THE SAME LETTER W AS FILED BEFORE LD. CIT(APPEALS), HE DID NOT ADMIT IT AS ADDITIONAL EVI DENCE SINCE ACCORDING TO HIM, IT WOULD RESULT IN VIOLATION OF R ULE 46A OF INCOME-TAX RULES. TO CUT THE STORY SHORT, HE CONFIRMED THE AD DITION MADE BY THE A.O. 3. ASSESSEE MOVED IN APPEAL BEFORE THIS TRIBUNAL AN D PLEADED THAT THE CIT(APPEALS) ERRED IN NOT CONSIDERING THE ADDITIONAL EVIDENCE BEING THE CONFIRMATION OBTAINED FROM SHRI SURESH KU MAR AGARWAL. THE TRIBUNAL WAS APPRECIATIVE OF THIS CONTENTION. ACCORDING TO IT, ASSESSING OFFICER COULD NOT CONSIDER THE CONFIRMATI ON LETTER SINCE IT WAS NOT THERE BEFORE HIM ON THE DATE OF ASSESSMENT, AND LD. CIT(APPEALS) HAD CONFIRMED THE ADDITION WITHOUT CAL LING FOR A REMAND REPORT FROM ASSESSING OFFICER. AT PARA 19 OF ITS O RDER DATED 24 TH MARCH, 2005, IN I.T.A. NOS. 352 TO 354/MDS/2001, IT WAS HELD BY THE TRIBUNAL AS UNDER:- I.T.A. NO. 2250/MDS/08 4 19. WE HAVE EXAMINED THE ISSUE. ADMITTEDLY, THE AS SESSEE HAS FILED A LETTER ON THE DATE OF PASSING THE ASSES SMENT ORDER I.E. 30.3.2000. HENCE, THE ASSESSING OFFICER HAD N O OPPORTUNITY TO CONSIDER THIS LETTER. AT THE STAGE OF FIRST APP EAL, THE CIT(APPEALS) COULD HAVE CALLED FOR A REMAND REPORT FROM THE ASSESSING OFFICER REGARDING IDENTITY, GENUINENESS A ND CAPACITY OF THE LENDER AND AFTER GOING THROUGH THE SAME, IF THE CIT(APPEALS) FOUND THAT THE EXPLANATION GIVEN BY TH E ASSESSEE WAS NOT SATISFACTORY, HE COULD HAVE SUSTAINED THE A DDITION. THE CIT(APPEALS) HAS NOT CARRIED OUT THIS EXERCISE. TH IS IS A CLEAR MISCARRIAGE OF JUSTICE. SECTION 68 OF THE INCOME-T AX ACT PROVIDES THAT WHERE ANY SUM IS FOUND CREDITED IN TH E BOOKS OF AN ASSESSEE MAINTAINED FOR ANY PREVIOUS YEAR AND THE A SSESSEE OFFERS NO EXPLANATION ABOUT THE NATURE AND SOURCE T HEREOF, OR THE EXPLANATION OFFERED BY THE ASSESSEE IS, IN THE OPINION OF THE ASSESSING OFFICER NOT SATISFACTORY, THE SUM SO CRED ITED MAY BE CHARGED TO INCOME-TAX AS THE INCOME OF THE ASSESSEE OF THAT PREVIOUS YEAR/S. WHENEVER, THE EXPLANATION OFFERED BY THE ASSESSEE IS FOUND TO BE FALSE OR UNBELIEVABLE OR TH AT THE ASSESSEE GIVES EVASIVE REPLIES TO THE QUERIES REGAR DING THE NATURE, SOURCE OF CREDIT ENTRY, THE ASSESSING OFFIC ER COULD PRESUME THE WHOLE RECEIPT TO BE REVENUE RECEIPT AND TAX ACCORDINGLY. THUS, IT IS THE DUTY OF THE ASSESSEE TO EXPLAIN THE NATURE AND SOURCE OF CREDIT FOUND IN THE BOOKS OF A CCOUNT AND WHEN THERE IS SUSPICION ABOUT ENTRIES REGARDING THE ALLEGED BORROWINGS OF SUBSTANTIAL AMOUNTS, IT IS FOR THE AS SESSEE TO SHOW THAT THE ENTRIES ARE GENUINE AND REPRESENTED BORROW INGS FROM A GENUINE PERSON OR CONCERN. ON PRODUCTION OF PRIMA FACIE EVIDENCE IN DISCHARGING THE BURDEN, THE ONUS SHIFTS TO THE REVENUE TO MAKE OUT A CASE THAT THE ENTRIES WERE GE NUINE. THE ASSESSEE IS REQUIRED TO ESTABLISH THE FOLLOWING:- A) PROOF OF IDENTITY OF HIS CREDITORS B) CAPACITY OF CREDITOR TO ADVANCE MONEY C) GENUINENESS OF THE TRANSACTIONS THEREFORE, IN THE INTEREST OF FAIR PLAY AND JUSTICE , WE REMAND THIS ISSUE TO THE FILE OF THE ASSESSING OFFICER TO VERIFY THE IDENTITY, GENUINENESS AND CREDIT WORTHINESS OF THE LENDER AND DECIDE THE ISSUE IN ACCORDANCE WITH LAW, AFTER AFFO RDING OPPORTUNITY OF HEARING TO THE ASSESSEE. I.T.A. NO. 2250/MDS/08 5 4. PURSUANT TO THE ABOVE DIRECTIONS OF THIS TRIBUNA L, THE ASSESSING OFFICER, VIDE HIS LETTER DATED 26.7.2005, REQUIRED THE ASSESSEE TO PRODUCE PROOF OF IDENTITY OF CREDITOR S HRI SURESH KUMAR AGARWAL, CAPACITY OF THE SAID CREDITOR AND TO PROVE GENUINENESS OF THE TRANSACTIONS. ASSESSEE, VIDE HIS LETTER DATED 12.9.2005, FILED THE CONFIRMATION LETTER OBTAINED FROM SHRI SURESH KUMAR AGARWAL. THEREAFTER, ASSESSING OFFICER ISSUED A NOTICE UNDER SECTION 131 OF THE ACT TO THE ASSESSEE TO PRODUCE THE SAID CREDITO R ALONG WITH HIS BOOKS. SHRI SURESH KUMAR AGARWAL PRESENTED HIMSELF BEFORE THE ASSESSING OFFICER ON 25.11.2005 AND AS PER THE A.O. , IN THE STATEMENT RECORDED, SHRI SURESH KUMAR AGARWAL STATE D THAT THE MONEY WAS GIVEN TO THE ASSESSEE FROM HIS BUSINESS A CCOUNTS AND IT WAS GIVEN AS AN INTEREST FREE LOAN. SHRI SURESH KU MAR AGARWAL ALSO MENTIONED THAT THE MONEY WAS ADVANCED THROUGH BANK DRAFTS. ASSESSING OFFICER REQUIRED SHRI SURESH KUMAR AGARWA L TO PRODUCE BOOKS FOR RELEVANT PREVIOUS YEAR. SINCE SHRI SURES H KUMAR AGARWAL FAILED TO PRODUCE SUCH BOOKS OF ACCOUNT, ASSESSING OFFICER, VIDE HIS LETTER DATED 21.12.2005, REQUIRED THE ASSESSEE TO P RODUCE SUCH BOOKS OF ACCOUNT AND ALSO SOUGHT REASONS FROM THE A SSESSEE AS TO WHY THE SUM OF ` 80 LAKHS SHOULD NOT BE TREATED AS UNEXPLAINED CREDIT. ASSESSEE, IN HIS REPLY, STATED THAT SHRI S URESH KUMAR AGARWAL HAD EXPRESSED HIS INABILITY TO PRODUCE THE BOOKS DU E TO THE LONG TIME I.T.A. NO. 2250/MDS/08 6 GAP EXCEEDING EIGHT YEARS. HOWEVER, AS PER THE ASS ESSEE, HE HAD PROVED THE SOURCE FOR ` 80 LAKHS BY PRODUCING SHRI SURESH KUMAR AGARWAL AND AN ADDITION WAS NOT JUSTIFIED. H OWEVER, THE ASSESSING OFFICER WAS NOT IMPRESSED. ACCORDING TO HIM, ASSESSEE HAD FAILED TO PROVE THE CAPACITY OF THE CREDITOR TO ADVANCE THE MONEY AS ALSO IN PROVING THE GENUINENESS OF THE TRANSACTI ON. ACCORDING TO HIM, PROVING THE IDENTITY ALONE WAS NOT SUFFICIENT. HE HELD THAT ASSESSEE HAD NOT DISCHARGED THE ONUS OF PROOF WHICH WAS RESTED ON HIM. HE, THEREFORE, ONCE AGAIN MADE AN ADDITION OF ` 80 LAKHS AS UNEXPLAINED CASH CREDIT UNDER SECTION 68 OF THE ACT . 4. ASSESSEE AGAIN MOVED IN APPEAL BEFORE LD. CIT(AP PEALS). ARGUMENT OF THE ASSESSEE WAS THAT HE HAD, ON 12 TH SEPTEMBER, 2005, FILED A LETTER FROM SHRI SURESH KUMAR AGARWAL, WHER EIN HE HAD GIVEN HIS CHEQUE NUMBERS AND ALSO THE DATES ON WHICH THE AMOUNTS WERE GIVEN TO THE ASSESSEE. ACCORDING TO ASSESSEE, IN A DDITION TO THE ABOVE, SHRI SURESH KUMAR AGARWAL HAD ALSO APPEARED HIMSELF BEFORE THE A.O. ON 25.11.2005 AND CONFIRMED THE LOANS. TH EREFORE, IT WAS ARGUED THAT ASSESSING OFFICER FELL IN ERROR IN MAKI NG AN ADDITION UNDER SECTION 68 OF THE ACT. LD. CIT(APPEALS) WAS NOT IM PRESSED. ACCORDING TO HIM, ASSESSEE HIMSELF WAS NOT SURE ABO UT THE DATES ON WHICH MONEYS WERE RECEIVED AND HE WAS SHIFTING HIS STAND EVERY TIME. DATES OF THE CHEQUES CLAIMED TO HAVE BEEN G IVEN BY SHRI I.T.A. NO. 2250/MDS/08 7 SURESH KUMAR AGARWAL AND THE DATES OF DEPOSITING TH E MONEY IN ASSESSEES BANK ACCOUNT WERE NOT AT ALL TALLYING. ACCORDING TO HIM, JUST BECAUSE EXISTENCE OF THE CREDITOR WAS ESTABLIS HED, THE TRANSACTION COULD NOT BE CONSIDERED AS GENUINE. HE , THEREFORE, CONFIRMED THE ADDITION MADE BY THE A.O. 5. SHRI R. SIVARAMAN, ADVOCATE, APPEARED ON BEHALF OF ASSESSEE ON 10.4.2012 AND ARGUED THE MATTER. ON 11.4.2012, A WRITTEN SUBMISSION WAS ALSO FILED BY THE ASSESSEE. STRONGL Y ASSAILING THE ORDERS OF AUTHORITIES BELOW, LEARNED A.R. SUBMITTED THAT THE TRIBUNAL IN THE FIRST ROUND OF PROCEEDINGS HAD DIRECTED THE ASSESSING OFFICER TO VERIFY THE TRANSACTION OF LOAN RECEIVED FROM SHRI S URESH KUMAR AGARWAL. ACCORDING TO HIM, ASSESSEE HAD DISCHARGED HIS ONUS BY PRODUCING SHRI SURESH KUMAR AGARWAL AND FILING THE CONFIRMATION LETTER FROM SHRI SURESH KUMAR AGARWAL. THE TRANSAC TIONS HAVING BEEN CARRIED OUT THROUGH BANK, THE ONUS SHIFTED TO THE REVENUE TO REBUT THE EXPLANATION GIVEN BY THE ASSESSEE. THERE WAS NO SUCH REBUTTAL. ASSESSING OFFICER, THOUGH HE ACCEPTED TH E IDENTITY OF THE CREDITOR TO HAVE BEEN PROVED, HAD COME TO A WRONG C ONCLUSION THAT THE TRANSACTION WAS NOT A GENUINE. ACCORDING TO HI M, LAW DID NOT CAST ANY DUTY ON THE ASSESSEE TO PROVE THE SOURCE OF THE SOURCE. WHEN THE CREDITOR HIMSELF MENTIONED IN THE CONFIRMATION LETTER HIS PA NUMBER AND HAD APPEARED BEFORE A.O., WITHOUT MAKING ANY EFFORT TO I.T.A. NO. 2250/MDS/08 8 ASCERTAIN WITH THE CONCERNED ASSESSING OFFICER AS T O THE CREDITWORTHINESS OF SHRI SURESH KUMAR AGARWAL, A.O. HAD COME TO A WRONG CONCLUSION THAT THE TRANSACTION WAS NOT GENUI NE AND SHRI SURESH KUMAR AGARWAL WAS NOT CREDITWORTHY. RELYING ON THE DECISION OF HONBLE APEX COURT IN THE CASE OF CIT V. ORISSA CORPORATION P. LTD. (159 ITR 78), LEARNED A.R. SUBMITTED THAT ONCE IT W AS IN THE KNOWLEDGE OF THE REVENUE THAT THE CREDITOR WAS AN I NCOME-TAX ASSESSEE AND ONCE THE REVENUE, AFTER ISSUING NOTICE UNDER SECTION 131 OF THE ACT, HAD NOT EXAMINED THE SOURCE OF INCO ME OF THE CREDITOR TO FIND OUT WHETHER HE WAS CREDITWORTHY, IT WOULD N OT BE APPROPRIATE TO CONCLUDE THAT THE ASSESSEE HAD NOT DISCHARGED THE B URDEN THAT WAS ON HIM. RELIANCE WAS ALSO PLACED ON THE DECISION O F HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. GANI SILK PALACE( 171 ITR 373) FOR REINFORCING HIS ARGUMENT, THAT ONCE AS SESSEE HAD DISCHARGED THE BURDEN THAT WAS ON HIM , ASSESSING OFFICER COULD NOT PROCEED TO MAKE AN ASSESSMENT ESPECIALLY WHEN THERE WERE SPECIFIC DIRECTIONS FROM THE TRIBUNAL. 6. PER CONTRA, LEARNED D.R. STRONGLY SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 7. WE HAVE PERUSED THE ORDERS AND HEARD THE RIVAL S UBMISSIONS. THE CRUX OF THE CONTENTION OF THE ASSESSEE IS THAT HE HAD DISCHARGED I.T.A. NO. 2250/MDS/08 9 HIS BASIC ONUS BY PRODUCING THE CREDITOR AND ALSO F ILING A CONFIRMATION LETTER AND THEREFORE, IT WAS FOR THE R EVENUE TO REBUT SUCH EVIDENCE. THIS ARGUMENT, PRIMA FACIE, IS VERY ATTR ACTIVE. THE CASES RELIED ON BY THE LEARNED A.R. ALSO SUPPORT THIS VIE W. HOWEVER, A CLOSE READING OF THE SAID JUDGMENTS WOULD SHOW THAT THE ASSESSEES IN SUCH CASES, HAD ALL ALONG ARGUED THAT THEY HAD R ECEIVED SUMS FROM A PARTICULAR PERSON OR PERSONS AND HAD STUCK WITH T HAT. THE PARTIES NEVER CHANGED THEIR VERSION. HERE, ON THE OTHER HA ND, ASSESSEE HAD FIRST STATED BEFORE THE ASSESSING OFFICER THAT THE MONEY WAS RECEIVED FROM M/S NEPC INDIA LTD., M/S NEPC AIRLINES AND M/S SKYLINE NEPC. LATER ON, WHEN THE ASSESSING OFFICER ASSESSED THE A MOUNT FINDING THE ASSERTIONS TO BE UNTRUE, ASSESSEE BROUGHT IN A NEW PERSON INTO THE SCENE, NAMED, SHRI SURESH KUMAR AGARWAL, TO TAK E THE EARLIER CREDITORS PLACE. NO DOUBT, THE SAID SHRI SURESH KU MAR AGARWAL DID APPEAR BEFORE THE A.O. AND A.O. HAD RECORDED A STAT EMENT WHEREIN HE ADMITTED TO HAVE GIVEN THE LOANS. THE DATES ON WHICH HE HAD GIVEN THE LOANS, AS IT APPEARS FROM HIS LETTER DATE D 8 TH NOVEMBER, 2000, ARE AS UNDER:- S.NO. CHEQUE NO. DATE AMOUNT DRAWN ON 1. 931467 4.6.96 9,00,000 ORIENTAL BANK OF COMMERCE, KANPUR 2. 631468 4.6.96 9,00,000 - DO - 3. 631469 4.6.96 9,00,000 - DO - 4. 631470 4.6.96 3,00,000 - DO - I.T.A. NO. 2250/MDS/08 10 5. 931707 13.6.96 9,00,000 - DO - 6. 931708 13.6.96 9,00,000 - DO - 7. 931709 13.6.96 2,00,000 - DO - 8. 320073 24.6.96 9,00,000 - DO - 9. 320074 24.6.96 9,00,000 - DO - 10. 320075 24.6.96 9,00,000 - DO - 11. 320076 24.6.96 3,00,000 - DO - 80,00,000 A LOOK AT THE DATES OF CONFIRMATION CLEARLY SHOWS T HAT THE CHEQUES WERE ALL ISSUED, IF AT ALL ISSUED BY HIM, IN THE MO NTH OF JUNE, 1996. NOW, LET US HAVE A LOOK AT THE CREDITS IN THE BANK ACCOUNT OF THE ASSESSEE GIVEN AT PARA 2 ABOVE. THESE WERE, BUT FO R A SUM OF ` 30 LAKHS, IN THE MONTH OF SEPTEMBER, 1996. OF COURSE, A SUM OF ` 30 LAKHS WAS DEPOSITED ON 4 TH JUNE, 1996 AND THIS TALLIED WITH THE FIRST FOUR CHEQUES MENTIONED IN THE TABLE SUPRA. HOWEVER , DESPITE THIS TALLYING, WE ARE UNABLE TO ACCEPT THE CLAIM OF THE ASSESSEE. THIS IS FOR A REASON THAT SHRI SURESH KUMAR AGARWAL IN HIS DEPOSITION BEFORE THE ASSESSING OFFICER HAD STATED THAT MONEY WAS GIV EN THROUGH BANK DRAFTS, WHEREAS, IT IS MENTIONED IN HIS LETTER THAT THESE WERE THROUGH CHEQUES. IN HIS LETTER DATED 28.11.2005 ADDRESSED TO THE ASSESSING OFFICER, SHRI SURESH KUMAR AGARWAL HAS MENTIONED TH AT HIS BANK ACCOUNT WAS IN IDBI BANK, COIMBATORE AND A/C NO.006102000012519. SO, SHRI SURESH KUMAR AGARWAL HIMSELF WAS SHIFTING HIS STAND. AT ONE PLACE, HE SAID HIS BANK WAS IDBI BANK, WHEREAS, CHEQUES WERE ISSUED FROM ORIENTAL BANK OF COMMERCE, KANPUR. ONUS CAST ON THE ASSESSEE FOR PROVING A CA SH CREDIT WILL, IN I.T.A. NO. 2250/MDS/08 11 OUR OPINION, BECOME SUBSTANTIALLY MORE RIGOUROUS WH EN THERE IS A SHIFTING OF STANCE. ASSESSING OFFICER CANNOT BE AS KED TO GO FOR A WILD GOOSE CHASE. AS AND WHEN AN ASSESSEE KEEPS ON CHAN GING THE NAME AND IDENTITY OF A CREDITOR ACCORDING TO HIS FA NCIES, ASSESSING OFFICER CANNOT BE EXPECTED TO KEEP ON MAKING VERIFI CATIONS. INITIAL FINDING OF THE ASSESSING OFFICER WAS THAT THE CREDI TS ORIGINALLY CLAIMED TO HAVE BEEN RECEIVED FROM M/S NEPC INDIA LTD., NEP C AIRLINES AND SKYLINE NEPC WERE NOT GENUINE. ASSESSEE THEN BROUG HT IN A NEW PERSON TO TAKE THEIR PLACE. IN SUCH CIRCUMSTANCES, CAN WE SAY THAT THE RIGOUR OF ONUS VIS--VIS THE NEW CLAIM IS ALSO THE SAME AS IT WAS INITIALLY? THE CASE OF THE ASSESSEE THAT HIS ONUS STOOD DISCHARGED WOULD HAVE BEEN TRUE IF HE HAD STUCK TO HIS EARLIER ARGUMENT THAT THE MONEY HAD COME FROM M/S NEPC INDIA LTD., NEPC AIRLI NES AND M/S SKYLINE NEPC AND SUBSTANTIATED SUCH CLAIM. WHEN HE FOUND THAT THIS WAS DISBELIEVED AND COULD NOT BE PROVED, HE CAME UP WITH A NEW CREDITOR, NAMELY, SHRI SURESH KUMAR AGARWAL. THE R ESPONSIBILITY FOR PROVING THAT THE CREDITS HAD COME FROM SHRI SURESH KUMAR AGARWAL, IN SUCH CIRCUMSTANCES, WAS MORE ONEROUS AND HAD TO BE DISCHARGED IN A MUCH MORE CONVINCING FASHION. THIS HAS NOT BE EN DONE. DURING THE COURSE OF HEARING BEFORE US, A SPECIFIC QUESTIO N WAS RAISED AS TO WHETHER THE LOAN HAD BEEN REPAID TO THE SAID CREDIT OR. FOR THIS, AN AFFIDAVIT WAS FILED BY THE ASSESSEE ALONG WITH A LE TTER DATED 29 TH I.T.A. NO. 2250/MDS/08 12 DECEMBER, 2005 OF SHRI SURESH KUMAR AGARWAL. IN SU CH LETTER, IT IS STATED BY SHRI SURESH KUMAR AGARWAL THAT THE AMO UNT WAS REPAID BY THE ASSESSEE IN THE YEAR 1997-98 AND FOR THIS CL AIM TOO, HE ADMITTED TO HAVE NO SUPPORTING EVIDENCE. NO RELATI ONSHIP WHATSOEVER HAS BEEN CLAIMED BY THE ASSESSEE WITH SH RI SURESH KUMAR AGARWAL, FOR LATTER TO GIVE AN INTEREST FREE LOAN OF ` 80 LAKHS. IF SHRI SURESH KUMAR AGARWAL, HAD AS CLAIMED BY HIM, G IVEN THE MONEY FROM HIS BUSINESS ACCOUNTS THEN NOTHING STOPPED HIM FROM GIVING SOME RECORD WHICH COULD CORROBORATE THAT CLAIM. TH E INCOME-TAX PERMANENT ACCOUNT NUMBER GIVEN BY SHRI SURESH KUMAR AGARWAL READS GA NO.11-013-PQ-8608 AND THIS ALSO IS A SUS PECT SINCE IT IS NOT IN THE FORMAT OF EITHER A P.A. NUMBER OR GENERA L INDEX REGISTER NUMBER. ASSESSEES COUNSEL WAS UNABLE TO PRODUCE T HE COPY OF DEPOSITION GIVEN BY SHRI SURESH KUMAR AGARWAL BEFOR E THE A.O., WHICH IF IT HAD SOMETHING IN SUPPORT OF ASSESSEES CLAIM WOULD HAVE BEEN DEFINITELY PRODUCED. CONSIDERING THESE CIRCUM STANCES, WE CAN UNHESITATINGLY SAY THAT ASSESSEE HAD NOT DISCHARGED HIS ONUS TO PROVE THE CREDIT, IN THE FACE OF HIS OWN SHIFTING S TANCE. THERE IS NO CASE FOR THE ASSESSEE THAT THE AMOUNTS WERE RECEIVE D FOR SOME URGENT PURPOSE. ON THE OTHER HAND, THE AMOUNTS WER E DEPOSITED IN HIS S.B. ACCOUNT. AS MENTIONED BY THE LD. CIT(APPE ALS), THE DATES ON WHICH CHEQUES WERE ISSUED BY SHRI SURESH KUMAR AGAR WAL AND THE I.T.A. NO. 2250/MDS/08 13 CREDITS APPEARING IN THE BANK ACCOUNT OF THE ASSESS EE WERE AT LARGE VARIANCE BUT FOR A SUM OF ` 30 LAKHS. IN THE CASE OF CIT V. DURGA PRASAD MORE (82 ITR 540), IT HAS, OF COURSE, BEEN HELD BY HONBLE APEX COURT THAT APPARENT MUST BE CONSIDERE D REAL UNTIL IT IS SHOWN THAT THERE ARE REASONS TO BELIEVE THAT THE AP PARENT IS NOT THE REAL. IN OUR OPINION, THIS IS A CASE WHERE IT HAS BEEN CLEARLY DEMONSTRATED BY THE REVENUE THAT APPARENT WAS NOT T HE REAL. THE TAXING AUTHORITIES, AS OBSERVED BY HONBLE APEX COU RT, WERE NOT REQUIRED TO PUT ON BLINKERS WHILE LOOKING AT THE DO CUMENTS PRODUCED BEFORE THEM. THEY WERE ENTITLED TO LOOK INTO THE S URROUNDING CIRCUMSTANCES TO FIND OUT THE REALITY OF THE RECITA LS MADE IN THOSE DOCUMENTS. IN THE CASE OF A. GOVINDARAJULU MUDALIA R V. CIT (34 ITR 807) BEFORE HONBLE APEX COURT, HONBLE VENKATARAMA AIYAR, JUSTICE, SPEAKING FOR THE COURT, HAD OBSERVED AS UNDER:- NOW, THE CONTENTION OF THE APPELLANT IS THAT ASSUMI NG THAT HE HAD FAILED TO ESTABLISH THE CASE PUT FORWAR D BY HIM, IT DOES NOT FOLLOW AS A MATTER OF LAW THAT THE AMOUNTS IN QUESTION WERE INCOME RECEIVED OR ACCRUED DURING THE PREVIOUS YEAR, THAT IT WAS THE DUTY OF THE DEPARTMENT TO ADDUCE EVIDENC E TO SHOW FROM WHAT SOURCE THE INCOME WAS DERIVED AND WHY IT SHOULD BE TREATED AS CONCEALED INCOME. IN THE ABSENCE OF SUC H EVIDENCE, IT IS ARGUED, THE FINDING IS ERRONEOUS. WE ARE UNA BLE TO AGREE. WHETHER A RECEIPT IS TO BE TREATED AS INCOME OR NOT , MUST DEPEND VERY LARGELY ON THE FACTS AND CIRCUMSTANCES OF EACH CASE. IN THE PRESENT CASE, THE RECEIPTS ARE SHOWN IN THE ACCOUNT BOOKS OF A FIRM OF WHICH THE APPELLANT AND GOVINDASWAMY M UDALIAR WERE PARTNERS. WHEN HE WAS CALLED UPON TO GIVE EXP LANATION HE PUT FORWARD TWO EXPLANATIONS, ONE BEING A GIFT OF ` 80,000 AND THE OTHER BEING RECEIPT OF ` 42,000 FROM BUSINESS OF WHICH HE I.T.A. NO. 2250/MDS/08 14 CLAIMED TO BE THE REAL OWNER. WHEN BOTH THESE EXPL ANATIONS WERE REJECTED, AS THEY HAVE BEEN IT WAS CLEARLY OPE N TO THE INCOME-TAX OFFICER TO HOLD THAT THE INCOME MUST BE CONCEALED INCOME. THERE IS AMPLE AUTHORITY FOR THE POSITION THAT WHERE AN ASSESSEE FAILS TO PROVE SATISFACTORILY THE SOURCE A ND NATURE OF CERTAIN AMOUNT OF CASH RECEIVED DURING THE ACCOUNTI NG YEAR, THE INCOME-TAX OFFICER IS ENTITLED TO DRAW THE INFERENC E THAT THE RECEIPT ARE OF AN ASSESSABLE NATURE. THE CONCLUSIO N TO WHICH THE APPELLATE TRIBUNAL CAME APPEARS TO US TO BE AMPLY W ARRANTED BY THE FACTS OF THE CASE. THERE IS NO GROUND FOR INTE RFERING WITH THAT FINDING, AND THESE APPEALS ARE ACCORDINGLY DIS MISSED WITH COSTS. WE ARE OF THE OPINION THAT THIS IS A CASE IN WHICH ASSESSEE WAS UNABLE TO SUBSTANTIATE THE CREDIT AND THE ADDITION WAS RIGHTLY MADE UNDER SECTION 68 OF THE ACT. NO INTERFERENCE IS CA LLED FOR. 9. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS D ISMISSED. ORDER PRONOUNCED IN THE OPEN COURT AFTER CONCLUSION OF HEARING ON 11 TH APRIL, 2012. SD/- SD/- (CHALLA NAGENDRA PRASAD) (ABRAHAM P. GEORGE) JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI, DATED THE 11 TH APRIL, 2012. KRI. COPY TO: (1) APPELLANT (2) RESPONDENT (3) CIT(A)-IX, CHENNAI-34 (4) CIT, CHENNAI-III, CHENNAI (5) D.R. (6) GUARD FILE