PRITHVI STEEL ROLLING MILLS P LTD., Jaipur V. ACIT, Jaipur

ITA 233/JPR/2011

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 47979 (ITAT-JAIPUR)
• Duration Of Justice: 3 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-07-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2006-2007
• Appeal Filed On: 15-03-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D K MEENA
• Keywords: Unexplained cash credit; Source of fund; Additional evidence
• Section: 234B

Judgement Text

1 ITA 233-11 IN THE INCOME TAX APPELLATE TRIBUNAL JAIPUR BENCH B JAIPUR BEFORE SHRI R.K. GUPTA AND SHRI N.L. KALRA ITA NO. 233/JP/2011 ASSTT. YEAR : 2006-07. SHREE PRITHVI STEEL ROLLING MILLS P. LTD. VS. THE A CIT, CIRCLE-4, 230A ROAD NO. 9, VKI AREA, JAIPUR. JAIPUR. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI ASHISH SHARMA RESPONDENT BY : SHRI D.K. MEENA ORDER DATE OF ORDER : 14/07/2011. PER R.K. GUPTA, J.M. THIS IS AN APPEAL BY ASSESSEE AGAINST THE ORDER OF LD. CIT (A) RELATING TO ASSESSMENT YEAR 2006-07. 2. THE ASSESSEE IS OBJECTING IN CONFIRMING THE ADDI TION OF RS. 3,00,000/- MADE ON ACCOUNT OF ALLEGED UNEXPLAINED CASH CREDIT UNDER SE CTION 68. 3. DURING THE ASSESSMENT PROCEEDINGS, THE AO NOTICE D THAT ASSESSEE HAS RECEIVED UNSECURED LOANS OF RS. 3,00,000/- FROM SMT. KUSUM B AKSHI IN THE CURRENT YEAR. THE CREDITOR WAS NOT ASSESSED TO TAX. INSPITE OF REPEAT ED OPPORTUNITY, THE ASSESSEE COULD NOT EXPLAIN THE SOURCE OF LOAN ADVANCED BY HER. THE AO DIRECTED THE ASSESSEE TO PRODUCE THE CREDITOR AND SUBMIT HER BANK STATEMENT. BY FURTHER OBSERVING THAT SINCE AMPLE OPPORTUNITY WAS ALLOWED TO THE ASSESSEE AND CREDITW ORTHINESS OF THE AMOUNT TAKEN ON LOAN WAS NOT EXPLAINED, THEREFORE, THE ADDITION WAS MADE UNDER SECTION 68. DURING THE APPELLATE PROCEEDINGS, THE ASSESSEE FILED COPIES OF BANK STATEMENT OF SMT. KUSUM BAKSHI, 2 COPY OF PPF MAINTAINED WITH POST OFFICE WAS ALSO SU BMITTED. AN APPLICATION UNDER RULE 46A OF THE IT RULES WAS ALSO FILED. TO VERIFY THE ADDITIONAL EVIDENCE, THE PREDECESSOR OF THE PRESENT CIT (A) FORWARDED THE SAME TO THE AO FO R HIS COMMENTS. REMAND REPORT VIDE LETTER DATED 8.11.2010 WAS SUBMITTED TO THE LD . CIT (A). IN THE REMAND REPORT IT WAS SUBMITTED THAT AFTER TAKING INTO CONSIDERATION THE CONFIRMATION OF SMT. KUSUM BAKSHI AND FOR THE PURPOSE OF EXAMINATION OF ADDITIONAL EVIDEN CE UNDER RULE 46A, A LETTER WAS ISSUED TO THE ASSESSEE REQUESTING THE ASSESSEE TO PRODUCE SMT. KUSUM BAKSHI AND ALSO PROVIDE THE INCOME-TAX RETURN, COMPUTATION OF INCOME, BALAN CE SHEET ALONG WITH SOURCE OF RS. 95,000/- IN CASH AND RS. 2 LAKH THROUGH CHEQUE WHIC H WAS DEPOSITED IN THE BANK ACCOUNT OF THE ASSESSEE ON 23.4.2005. HOWEVER, THE LD. A/R FAILED TO PRODUCE SMT. KUSUM BAKSHI. IT IS FURTHER MENTIONED THAT LD. A/R OF TH E ASSESSEE PRODUCED COPY OF BANK ACCOUNT OF SMT. KUSUM BAKSHI. IT IS FURTHER STATED THAT AS PER BANK STATEMENT FILED, A SUM OF RS. 2 LAKH HAS BEEN DEPOSITED ONLY TWO DAYS EARL IER BEFORE ISSUING THE CHEQUE. THEREFORE, THE ADDITION MADE BY AO WAS JUSTIFIED. THE LD. CIT (A) HELD THAT SINCE ASSESSEE COULD NOT PROVE THE GENUINENESS AND CREDIT WORTHINESS OF THE TRANSACTION, THEREFORE, THE AO WAS RIGHT IN MAKING THE ADDITION. THE ORDER OF THE AO WAS, THEREFORE, CONFIRMED. 4. NOW THE ASSESSEE IS IN APPEAL HERE BEFORE THE TR IBUNAL. 5. THE CONTENTION RAISED BEFORE THE LOWER AUTHORITI ES WERE REITERATED HERE BEFORE THE TRIBUNAL BY LD. A/R. RELIANCE WAS PLACED ON THE DE CISION OF HONBLE SUPREME COURT IN THE CASE ORISSA CEMENT CORPORATION. 6. ON THE OTHER HAND, LD. D/R PLACED RELIANCE ON TH E ORDERS OF THE AO AND LD. CIT (A). 3 7. AFTER CONSIDERING THE SUBMISSIONS AND PERUSING T HE MATERIAL ON RECORD, WE FIND THAT ASSESSEE DESERVES TO SUCCEED IN THIS GROUND. IT IS SEEN THAT THE ASSESSEE ON ACCOUNT OF MATURITY OF PPF, A SUM OF RS. 95,000/- WAS DEPOSITE D IN THE BANK AND THEREAFTER THE AMOUNT OF RS. 2 LAKH WAS DEPOSITED OUT OF CLEARING FROM OTHERS ACCOUNT THROUGH CHEQUE. CONFIRMATION OF THE SAME WAS FILED BEFORE THE AO AN D AGAIN BEFORE LD. CIT (A). HOWEVER, LD. CIT (A) HAS NOT TAKEN INTO CONSIDERATI ON THE CONFIRMATION AND COPY OF BANK ACCOUNT AS HE WAS IN AGREEMENT WITH THE FINDING OF THE AO THAT ASSESSEE COULD NOT PRODUCE THE CREDITOR, THEREFORE, SOURCE OF FUNDS CO ULD NOT BE EXAMINED. SINCE ASSESSEE HAS FILED CONFIRMATION OF THE CREDITOR, THE AMOUNT HAS BEEN RECEIVED THROUGH ACCOUNT PAYEE CHEQUE. THEREFORE, IN OUR VIEW THE AO AND LD. CIT (A) WERE NOT JUSTIFIED AS CREDITWORTHINESS OF THE AMOUNT IS PROVED. AMOUNT W AS RECEIVED THROUGH ACCOUNT PAYEE CHEQUE, THEREFORE CANNOT BE ANY DOUBT IN RESPECT O F GENUINENESS OF THE TRANSACTION. THE ASSESSEE HAS FILED CONFIRMATION THAT SHE HAS GIVEN LOAN OF RS. 3 LAKHS TO THE ASSESSEE. THEREFORE, CREDITWORTHINESS ALSO SHOULD NOT HAVE BE EN DOUBTED. THE AO WANTS TO KNOW THE SOURCE OF SOURCE WHICH IS NOT JUSTIFIED. 8. IN SIMILAR CIRCUMSTANCES IN THE CASE OF SHRI PRA MOD KUMAR AGARWAL IN ITA NO. 52/JP/2011 DATED 30.6.2011, THE TRIBUNAL HAS DELETE D THE ADDITION OF RS. 9.50 LAKH. FINDING OF THE TRIBUNAL HAS BEEN RECORDED IN PARA 4 .4 WHICH ARE AS UNDER :- 4.4 WE HAVE HEARD BOTH THE PARTIES. THE ASSESSEE F ILED THE AFFIDAVIT BEFORE THE AO. IN THE AFFIDAVIT, THE ASSE SSEE STATED THAT THE CHEQUES ISSUED BY SHRI R.C. JAIN WERE DEPOSITED IN THE BANK ACCOUNT BY SHRI VIMAL PRASAD JAIN WHO IS SON OF SHRI R.C. JAIN . IN THE AFFIDAVIT, IT WAS FURTHER STATED THAT SMT. LAVIKA JAIN IS CHARTERED A CCOUNTANT AND WAS WORKING IN STEEL AUTHORITY OF INDIA LTD., CONNAUGHT PLACE, NEW DELHI. 4 THE ASSESSEE MADE EFFORTS TO GET THE CONFIRMATIONS BUT THESE PERSONS REFUSED TO GIVE CONFIRMATIONS. PAGES 24 TO 25 OF TH E PAPER BOOK CONTAIN THE COPY OF THE REPORT OF THE INSPECTOR. IN THE REP ORT, THE INSPECTOR HAS STATED THAT HE HAS MET SHRI VIMAL PRASAD JAIN IN DE LHI. SHRI VIMAL PRASAD JAIN ADMITTED THAT THE ASSESSEE SHRI PRAMOD KUMAR A GARWAL IS HIS BROTHER- IN-LAW. HE ADMITTED THAT SHRI R.C. JAIN IS FATHER A ND SMT. LAVIKA JAIN IS WIFE OF HIS BROTHER. SHRI VIMAL PRASAD JAIN ADMITTE D VERBALLY THAT ALL THE THREE PERSONS HAS DONE TRANSACTIONS WITH SHRI PRAMO D KUMAR AGARWAL. SHRI VIMAL PRASAD JAIN ACCEPTED THE SUMMON ISSUED I N HIS NAME BUT HE REFUSED TO ACCEPT THE SUMMONS IN THE NAME OF SHRI R .C. JAIN AND SMT. LAVIKA JAIN. SHRI VIMAL PRASAD JAIN ADMITTED THAT R EPLY OF THE THREE PERSONS WILL BE SENT TO THE AO THROUGH REGISTERED P OST. THE ASSESSEE ALSO FILED THE COPY OF THE ELECTORAL LIST TO SHOW THAT T HE CREDITORS WERE RESIDING AT THE ADDRESS GIVEN BY HIM. THUS THE ASSESSEE HAS FILED THE EVIDENCES WHICH WERE AVAILABLE WITH HIM AND THE EVIDENCES WHI CH HE COULD COLLECT. IF THE CREDITORS WERE NOT COOPERATING WITH THE ASSE SSEE THEREFORE, THE ASSESSEE REQUESTED THE AO TO ISSUE SUMMONS. THE INS PECTOR WHO VISITED DELHI ALSO GAVE THE REPORT WHICH SHOWED THAT SHRI V IMAL PRASAD JAIN ADMITTED THAT THE CREDITORS ENTERED INTO THE TRANSA CTION WITH THE ASSESSEE. THE HON'BLE APEX COURT IN THE CASE OF CIT VS. ORISS A CORPORATION (P) 159 ITR 78 HELD THAT FINDING OF THE TRIBUNAL IN DEL ETING THE CASH CREDITS CANNOT BE SAID AS UNREASONABLE OR PERVERSE OR BASED ON NO EVIDENCE. IN THAT CASE, THE ASSESSEE FILED THE CONFIRMATIONS OF THE CREDITORS AND GAVE THE NAMES AND ADDRESSES OF THE CREDITORS. THE AO ISSUED THE SUMMONS AND THE SUMMONS WERE RETURNED BACK WITH THE REMARKS FROM TH E POSTAL AUTHORITIES AS LEFT. THE REVENUE THEREAFTER DID NOT MAKE ANY EFFORTS TO EXAMINE THE SOURCE OF INCOME OF THE CREDITORS TO FIND OUT W HETHER THEY WERE CREDITWORTHY. HENCE, THE ADDITION IN THE HANDS OF T HE ASSESSEE WAS DELETED. THE REVENUE CANNOT BY MERELY REJECTING THE GOOD EXP LANATION UNREASONABLY TO CONFRONT ALL GOOD PROOF INTO NO PRO OF. THE ASSESSEE HAS FILED THE PHOTOSTAT COPY OF THE RECEIPTS OF THE PAY IN SLIP. THE CHEQUES 5 HAVE BEEN DEPOSITED IN THE BANK ACCOUNT OF THE ASSE SSEE AT DELH. IT IS NOT THE CASE OF THE REVENUE THAT PAY IN SLIPS ARE IN TH E HANDWRITING OF THE ASSESSEE. WE THEREFORE, HOLD THAT THE LD. CIT(A) WA S NOT JUSTIFIED IN CONFIRMING THE ADDITION OF RS. 9.50 LACS AS THE ASS ESSEE HAS PLACED ALL THE EVIDENCES AVAILABLE WITH HIM. THE REVENUE HAS NOT B EEN ABLE TO COLLECT ANY MATERIAL EVIDENCE TO SUGGEST THAT THE CREDITORS WER E NOT CREDITWORTHY. THE ASSESSEE IN HIS AFFIDAVIT HAS STATED THAT THE CHEQU ES WERE DEPOSITED IN HIS BANK ACCOUNT BY SHRI VIMAL PRASAD JAIN THOUGH CHEQU ES WERE ISSUED FROM THE ACCOUNT OF SHRI R.C. JAIN. SHRI VIMAL PRASAD JA IN WHEN CONTACTED BY THE INSPECTOR ADMITTED SUCH TRANSACTIONS. IF ONE CO NSIDERS THE HUMAN PROBABILITY, IT IS CLEAR THAT CASH CREDITS CANNOT B E CONSIDERED AS INCOME OF THE ASSESSEE. THE EXPLANATION GIVEN BY THE ASSESSEE CANNOT BE CONSIDERED AS UNSATISFACTORY. WE THEREFORE, DELETE THE DISALLO WANCE OF RS. 9.50 LACS. IN VIEW OF THESE FACTS AND CIRCUMSTANCES AND IN VIE W OF THE SIMILAR DECISION RENDERED BY THIS BENCH OF THE TRIBUNAL, WE HOLD THAT THE ASSESS EE HAS DISCHARGED THE ONUS LAY UPON IT. ACCORDINGLY, WE DIRECT TO DELETE THE ADDITION OF RS . 3 LAKH. 9. GROUND NO.2 WHICH IS AGAINST CHARGING OF INTERES T UNDER SECTION 234B AND 234C IS CONSEQUENTIAL IN NATURE. THE AO IS DIRECTED TO A LLOW RELIEF ACCORDINGLY. 10. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D. 11. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 14 .07.2011. SD/- SD/- ( N.L. KALRA ) ( R.K. GUPTA ) ACCOUNTANT MEMBER JUDICIAL MEMBER JAIPUR, D/- 6 COPY FORWARDED TO :- SHREE PRITHVI STEEL ROLLING MILLS P. LTD., JAIPUR. THE ACIT, CIRCLE-4, JAIPUR. THE CIT (A) THE CIT THE D/R GUARD FILE (ITA NO. 233/JP/2011) BY ORDER, AR ITAT JAIPUR.