ITO, Ward - 1(1), Kolkata, Kolkata V. M/s. Shivalik Merchants Pvt. Ltd., Howrah

ITA 2293/KOL/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 48182 (ITAT-KOLKATA)
• Duration Of Justice: 5 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-06-2011
• Appeal Filed By: Department
• Bench Allotted: B
• Next Hearing Date: 13-06-2011
• Assessment Year: 2004-2005
• Appeal Filed On: 29-12-2010
• Court: TRIBUNAL
• Department Lawyers: G MONDAL
• Assessee Lawyers: MIRAZ D SHAH
• Keywords: Accommodation entries; Assessment record
• Section: 68; 144

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL, BEN CH B, KOLKATA () BEFORE , , , , , SHRI MAHAVIR SINGH, JUDICIAL MEMBER. /AND . .. .!' !'!' !'. .. . , #$ SHRI C.D.RAO, ACCOUNTANT MEMBER % % % % / ITA NO . 2293/KOL/2011 &' ()/ ASSESSMENT YEAR 2004-05 (+, / APPELLANT ) I.T.O., WARD-1(1), KOLKATA - & - - VERSUS - . (./+,/ RESPONDENT ) M/S.SHIVALIK MERCHANTS PVT. LTD., HOWRAH. (PAN: AAHCS 0918 D) +, 0 1 #/ FOR THE APPELLANT: SHRI G.MONDAL ./+, 0 1 #/ FOR THE RESPONDENT: SHRI MIRAZ D.SHAH #2 / ORDER ( (( ( . .. .!' !'!' !'. .. . ) )) ), , , , #$ PER SHRI C.D.RAO, AM THIS APPEAL IS FILED BY THE REVENUE AGAINST THE OR DER DATED 27.09.2010 OF THE CIT(A)-I, KOLKATA PERTAINING TO A.YR. 2004-05. 2. THE ONLY ISSUE RAISED BY THE REVENUE IS REL ATING TO THE ADDITION OF RS.15,00,000/- MADE ON ACCOUNT OF CASH CREDIT U/S 68 OF THE IT ACT . 3. AT THE TIME OF HEARING, THE LD. DR APPEARING ON BEHALF OF THE REVENUE STRONGLY RELIED ON THE ORDER OF THE AO AND THE LD. COUNSEL A PPEARING ON BEHALF OF THE ASSESSEE RELIED ON THE ORDERS OF THE LD.CIT(A). 2 4. AFTER HEARING THE RIVAL SUBMISSIONS AND ON CAREFUL PERUSAL OF MATERIALS AVAILABLE ON RECORD, WE CONSIDER IT TO REPRODUCE THE OBSERVAT IONS OF THE A.O. AS WELL AS THE LD. CIT(A) WHICH READ AS UNDER :- OBSERVATIONS OF THE A.O . : FROM THE LIST OF BENEFICIARIES ENC LOSED WITH THE LETTER DATED 18.03.2009 OF THE ADIT (INV., UNIT-I, AGRA IT REVEA LED THAT THE ASSESSEE COMPANY HAS TAKEN ACCOMMODATION ENTRIES FROM M/S. A YUSHI STOCK BROKERS PVT. LTD. THROUGH BANK OF INDIA, AGRA BRANCH ON 16. 12.2003, 19.12.2003 AND 29.01.2004 RESPECTIVELY. THE TOTAL VALUE OF ACCOMMO DATION ENTRIES ARE RS.15 LAKHS (RS.5 LAKHS ON 16.12.2003 + RS.5 LAKHS ON 19. 12.2003 + RS.5 LAKHS ON 29.01.2004). THE ASSESSEE COMPANY WAS ASKED TO FILE THE CONFIRMATION OF THE TRANSACTION FROM M/S. AYUSHI STOCK BROKERS PVT. LTD . IN RESPECT OF RS.15 LAKHS, WHICH THE ASSESSEE COMPANY CLAIMED TO HAVE RECEIVED AND ALSO ASKED TO FURNISH EXPLANATION ABOUT THE NATURE OF THE SAID TRANSACTIO N FAILING WHICH THE SAID ACCOMMODATION ENTRIES VALUED RS.15 LAKHS SHALL BE A DDED BACK TO THE TOTAL INCOME OF THE ASSESSEE COMPANY U/S 68 OF THE I.T.AC T, 1961 AS CASH CREDIT. THE ASSESSEE WAS GIVEN FURTHER OPPORTUNITY AND THE CASE WAS ADJOURNED TO 24.12.2009 AS FINAL OPPORTUNITY. BUT, NEITHER THE A /R OF THE ASSESSEE COMPANY APPEARED ON THE ADJOURNED DATE NOR ANY SUBMISSION F ILED. IN VIEW OF THE ABOVE FACTS AND UNDER SU CH CIRCUMSTANCES, THE UNDERSIGNED IS LEFT WITH NO OTHER OPTION BUT TO COM PLETE THE ASSESSMENT U/S 144 OF THE I.T.ACT, 1961 CONSIDERING THE TIME BARRED ON E. AS SUCH, THE TRANSACTION IN RESPECT OF RS.15 LAKHS, WHICH THE ASSESSEE CLAIMED TO HAVE RECEIVED FROM M/S. AYUSHI STOCK BROKERS PVT. LTD. IS CONSIDERED AS NOT HING BUT THE UNACCOUNTED MONEY OF THE ASSESSEE COMPANY INTRODUCED IN ITS BUS INESS THROUGH A SEPARATE CASH DEPOSIT ENTITY. HENCE, THE UNACCOUNTED MONEY O F THE ASSESSEE COMPANY IS ADDED BACK TO THE TOTAL INCOME OF THE ASSESSEE COMP ANY AS CASH CREDIT U/S 68 OF THE I.T.ACT, 1961 DUE TO FAILURE TO FURNISH A SATIS FACTORY EXPLANATION REGARDING THE NATURE OF TRANSACTION OF ITS CLAIM AND ALSO NOT FURNISHING THE CONFIRMATION FROM THE PARTY. OBSERVATIONS OF THE CIT(A) : 6. I HAVE CONSIDERED THE SUBMISSION OF THE A/R, PE RUSED THE ASSESSMENT ORDER,. PAPER BOOK. AS THERE WAS CONTRADICTION IN FACTS AS NARRATED BY THE AO AND THE A/R WITH REGARDS TO THE FURNISHING OF EXPLANATIONS AND CONFIRMATION OF THE TRANSACTION, THE ASSESSMENT RECORDS WERE REQUISITIO NED AND EXAMINED. ON PERUSAL OF THE ASSESSMENT RECORDS I FIND THAT BOTH THE EXPLANATION AS FILED BY THE A/R WERE AVAILABLE IN THE ASSESSMENT RECORDS. THE A SSESSEE HAD FILED THE EXPLANATION WITH RESPECT TO THE SAID SUM OF RS.15,0 0,000/- AND ALSO FILED COPIES OF INCOME TAX RETURN, PAN CARD, CERTIFICATE OF INCO RPORATION, AUDITED ACCOUNTS FOR THE YEAR ENDED 31/03/2004 AND CONFIRMA TION OF ACCOUNTS BY AYUSHI STOCK BROKERS P LTD IN RESPECT OF THE TRANSA CTION OF RS.15,00,000/- . FROM THE DOCUMENTS AVAILABLE IN THE ASSESSMENT RECO RDS I FIND THAT THE ASSESSEE FIRST ADVANCED A SUM OF RS.15,00,000/- BY TWO CHEQU ES BOTH DRAWN ON UTI BANK. ONE WAS ON 02/05/2003 FOR RS.5,00,000 AND ANO THER ON 13/11/2003 FOR 3 RS.10,00,000 TO M/S. AYUSHI STOCK BROKERS P LTD. FR OM THESE DOCUMENTS IT IS EVIDENT THAT AS ON 13/11/2003 M/S. AYUSHI STOCK BRO KERS P LTD. OWED A SUM OF RS.15,00,000 TO THE ASSESSEE. I FURTHER FIND THAT M /S.AYUSHI STOCK BROKERS P LTD REFUNDED RS.15,0,000 BY THREE CHEQUES DRAWN ON BANK OF INDIA. ALL THREE CHEQUES WERE FOR RS.500,000 EACH DATED 09/12/2003,. 15/12/2003 AND 28/01/2004 RESPECTIVELY. THUS THE SUM OF RS.15,00,0 00 WAS PAYABLE BY M/S.AYUSHI STOCK BROKERS P LTD TO THE APPELLANT AND THE SAME WAS REFUNDED BY THEM BY THE THREE CHEQUES AS MENTIONED BY THE AO IN HIS ASSESSMENT ORDER. FROM THE DOCUMENTS AVAILABLE ON ASSESSMENT RECORDS IT IS EVIDENT THAT THE AO FAILED TO CONSIDER THE EXPLANATION, EVIDENCES AND D OCUMENTS ON RECORD AND MADE ADDITION OF RS.15,00,000 MERELY ON THE BASIS O F REPORT OF THE ADIT (INV). THE REPORT OF THE ADIT (INV.) WAS THAT THE ASSESSEE RECEIVED ACCOMMODATION ENTRY OF RS.15,00,000 FROM M/S.AYUSHI STOCK BROKERS P LTD WAS NOT CORRECT BECAUSE IT IS APPARENT FROM THE DOCUMENTS ON RECORD THAT AYUSHI STOCK BROKERS P LTD HAD FIRST RECEIVED THE SAID AMOUNT FROM THE A SSESSEE WHICH WAS LATER REFUNDED TO THE ASSESSEE. THE REFUND OF LOAN/ADVANC E CANNOT BE TERMS AS ACCOMMODATION ENTRY. WHEN AN ASSESSEE RECEIVES REFU ND OF LOAN/ADVANCE FROM ITS DEBTOR SUCH REFUND CANNOT BE TREATED AS CASH CR EDIT UNDER SECTION 68 OF THE IT ACT 1961. FURTHER THE DOCUMENTS ON THE ASSESSMEN T RECORD PROVE THE IDENTITY, GENUINENESS AND CREDITWORTHINESS OF M/S. AYUSHI STOCK BROKERS P. LTD. CONSIDERING THE TOTALITY OF FACTS OF THE CASE AND THE EVIDENCES AVAILABLE ON THE ASSESSMENT RECORD AND THE FACT THAT THE SUM REC EIVED BY THE ASSESSEE ACTUALLY REPRESENTED REFUND OF LOAN, CANNOT BE TERM ED AS ACCOMMODATION ENTRY. THE ADDITION OF RS.15,00,000 MADE U/S 68 OF THE IT ACT 1961 WAS UNJUSTIFIED AND THE SAME IS ACCORDINGLY DELETED. 4.1. ON CAREFUL PERUSAL OF THE ABOVE OBSERVATION S AND KEEPING IN VIEW OF THE FACT THAT THE LD. DR COULD NOT CONTRADICT THE FINDINGS OF THE LD. CIT(A) WHICH ARE RECORDED ABOVE WE FIND NO INFIRMITY IN THE ORDERS OF THE LD. CIT(A) TO BE INTERFERED WITH. WE UPHOLD THE SAME AND DISMISS THE APPEAL OF THE REVEN UE. 5. IN THE RESULT THE APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 13.06.2011. SD/- SD/- MAHAVIR SINGH, JUDICIAL MEMBER . .. .!' !'!' !'. .. . , ,, , #$ #$ #$ #$ , C.D.RAO, ACCOUNTANT MEMBER. ( (( ('$ '$ '$ '$) )) ) DATE: 13.06.2011 R.G.(.P.S.) 4 #2 0 .3 4#3(5- COPY OF THE ORDER FORWARDED TO: 1. M/S.SHIVALIK MERCHANTS PVT. LTD., A/3, DOBSON LANE, 7 TH FLOOR, MADHUSUDAN APARTMENT, HOWRAH-711101. 2 THE I.T.O., WARD-1(1), KOLKATA 3. THE CIT, 4. THE CIT(A)-I, KOLKATA. 5. DR, KOLKATA BENCHES, KOLKATA /3 ./ TRUE COPY, #2&:/ BY ORDER, DEPUTY /ASST. REGISTRAR , ITAT, KOLKATA BENCHES