M/s Transcend Infosystem Pvt. Ltd., Etawah V. Dy. C.I.T., Circle-5, Firozabad

ITA 238/AGR/2012

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 0508 (ITAT-AGRA)
• Duration Of Justice: 6 year(s) 11 month(s) 21 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 16-05-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 14-01-2013
• Assessment Year: 2007-2008
• Appeal Filed On: 25-05-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: KK MISHRA
• Assessee Lawyers: GAURAV GOYAL
• Keywords: Unexplained cash credit; Additional evidence; Corroborative evidences; Commercial expediency; Set aside
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, AGRA BENCH, AGRA BEFORE : SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI A.L. GEHLOT, ACCOUNTANT MEMBER ITA NO. 238/AGRA/2012 ASSTT. YEAR : 2007-08 M/S. TRANSCEND INFOSYSTEM PVT. LTD. VS. D.C.I.T., CIRCLE-5, C-163, AWAS VIKAS COLONY, ETAWAH. FIROZABAD. (APPELLANT) (PAN:AABCT7862R) (RESPONDENT) APPELLANT BY : SHRI GAURAV GOYAL, C.A. RESPONDENT BY : SHRI K.K. MISHRA, JR. D.R. DATE OF HEARING : 14.01.2013 DATE OF PRONOUNCEMENT OF ORDER : 29.01.2013 ORDER PER BHAVNESH SAINI, J.M.: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF LD. CIT(A)-II, AGRA DATED 29.02.2012 FOR THE ASSESSMENT YEAR 2007- 08. 2. WE HAVE HEARD THE LD. REPRESENTATIVES OF BOTH TH E PARTIES AND PERUSED THE FINDINGS OF THE AUTHORITIES BELOW. 3. ON GROUND NO.1, THE ASSESSEE CHALLENGED THE ADDI TION OF RS.57,876/- ON ACCOUNT OF DISALLOWANCE OF VEHICLE RUNNING EXPENSES . THE AO NOTICED THAT THE ASSESSEE HAS DISCLOSED INCOME IN THE TRADING OF COM PUTER HARDWARE AND SOFTWARE. THE ASSESSEE CLAIMED EXPENSES AMOUNTING TO R.56,84, 208/- UNDER THE HEAD ITA NO. 238/AGRA/2012 2 OPERATIONAL EXPENDITURE WHICH INCLUDES EXPENDITURE OF RS.2,10,921/- UNDER THE HEAD VEHICLE RUNNING AND MAINTENANCE. THE ASSESSEE WAS ASKED TO EXPLAIN THE ABOVE EXPENDITURE. THE DETAILS INDICATED THAT THE E NTIRE EXPENDITURE UNDER THIS HEAD WAS REIMBURSED IN CASH TO ONE SHRI SHOBHIT VERMA WH O IS ONE OF THE DIRECTORS OF THE ASSESSEE COMPANY. RS.50,000/- WAS DEBITED ON 31 .03.2007 IN CASH. IT WAS ALSO NOTICED THAT ON THE SAME VERY DAY, ACCOUNT WAS DEBI TED THROUGH CASH BY RS.7876/- WHICH WAS PAID TO THE SAME PERSON FOR REIMBURSEMENT OF PETROL BILL IN RESPECT OF EARLIER YEAR MARCH, 2006.THE ASSESSEE WAS ASKED TO SUBSTANTIATE THE CLAIM THROUGH SUPPORTING EVIDENCE AND THE COMMERCIAL EXPEDIENCY T O INCUR THE EXPENSES. IT WAS ALSO FOUND BY THE AO THAT THE ASSESSEE HAS NOT ENTE RED INTO THE ABOVE DETAILS ON THE RELEVANT DATE IN COMPUTER GENERATED PRINT OUT OF CA SH BOOK PRODUCED IN THE ASSESSMENT PROCEEDINGS. THEREFORE, THE SOURCE OF TH E EXPENDITURE WAS ALSO FOUND TO BE UNEXPLAINED. THE ASSESSEE COULD NOT SUBSTANTIATE THE CLAIM BEFORE THE AO. THE SOURCE OF EXPENDITURE REMAINED UNEXPLAINED. IN THE ABSENCE OF ANY MATERIAL ON RECORD, RS.50,000/- WAS ADDED TO THE INCOME OF THE ASSESSEE AND SINCE RS.7,856/- WAS ALSO FOUND TO BE PERTAINED TO PRECEDING ASSESSM ENT YEAR MARCH, 2006, THEREFORE, IT WAS ALSO ADDED AND TOTAL ADDITION WAS MADE OF RS.57,856/- ON ACCOUNT OF DISALLOWANCE OF VEHICLE RUNNING EXPENSES. THE AS SESSEE REMAINED EXPARTE BEFORE THE LD. CIT(A) AND IN THE ABSENCE OF ANY EVIDENCE O R MATERIAL ON RECORD, THE LD. CIT(A) ALSO CONFIRMED THE ADDITION. ITA NO. 238/AGRA/2012 3 4. ON CONSIDERATION OF THE RIVAL SUBMISSIONS, WE DO NOT FIND ANY JUSTIFICATION TO INTERFERE WITH THE ORDER OF THE AUTHORITIES BELOW I N MAKING OR CONFIRMING THE ADDITION. THE FACT REMAINS THAT EVEN BEFORE US, NO EVIDENCES HAVE BEEN FILED TO SUBSTANTIATE THE CLAIM OF VEHICLE RUNNING EXPENSES. IN THE ABSENCE OF ANY EVIDENCE ON RECORD, WE DO NOT FIND ANY JUSTIFICATION TO INTE RFERE WITH THE ORDER OF THE LD. CIT(A). RESULTANTLY, THE ADDITION IS CONFIRMED, PAR TICULAR WHEN PART OF THE EXPENDITURE RELATE TO THE EARLIER YEAR AND PART OF THE EXPENDITURE WAS NOT ENTERED INTO THE BOOKS OF ACCOUNT OF THE ASSESSEE BASED ON COMPUTER GENERATED BOOKS OF ACCOUNT PRODUCED AT THE ASSESSMENT STAGE. GROUND NO .1 OF THE APPEAL OF THE ASSESSEE IS, ACCORDINGLY, DISMISSED. 5. ON GROUND NO. 2 & 3, THE ASSESSEE CHALLENGED THE ADDITION OF RS.5,20,250/- ON ACCOUNT OF UNEXPLAINED DEPOSITS. THE AO FOUND TH AT THE ASSESSEE HAS RAISED SUBSTANTIAL UNSECURED LOANS DURING THE ASSESSMENT Y EAR UNDER APPEAL. THE ASSESSEE WAS ASKED TO FURNISH CONFIRMATIONS AND COMPLETE DET AILS TO SUPPORT THE UNEXPLAINED CREDITS. THOUGH, THE ASSESSEE SUBMITTED SOME OF THE CONFIRMAT9ONS, BUT IN RESPECT OF 27 CREDITORS, THE DETAILS OF WHICH ARE NOTED AT PAGE 5 & 6 OF THE ASSESSMENT ORDER, THE ASSESSEE COULD NOT FILE ANY CONFIRMATION AND OTHER EVIDENCES TO PROVE THE GENUINE CREDITS. THEREFORE, THE ADDITION OF RS.5,20 ,250/- WAS MADE AGAINST THE ASSESSEE ON ACCOUNT OF UNEXPLAINED CASH CREDITS IN RESPECT OF 27 PERSONS. THE LD. CIT(A) CONFIRMED THE ADDITION BECAUSE THE ASSESSEE DID NOT APPEAR BEFORE HIM AND ITA NO. 238/AGRA/2012 4 DID NOT FILE ANY EVIDENCE AND THE APPEAL OF THE ASS ESSEE WAS, ACCORDINGLY, DISMISSED. 6. THE ASSESSEE FILED APPLICATION FOR ADMISSION OF ADDITIONAL EVIDENCES IN RESPECT OF SAME 27 CREDITORS AND IT IS STATED IN TH E APPLICATION THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE WAS ASKED T O SUBMIT EVIDENCES AND CONFIRMATIONS OF THESE 27 UNSECURED LOANS, BUT THE SAME COULD NOT BE PRODUCED AS THEY WERE SCATTERED GEOGRAPHICALLY IN THE BUSINESS, THEREFORE, THE SAME COULD NOT BE FILED. IT IS THEREFORE, SUBMITTED THAT SINCE THESE ADDITIONAL EVIDENCES ARE CRUCIAL AND DECISIVE OF THE CASE OF THE ASSESSEE AND IT WAS BEY OND THE CONTROL OF ASSESSEE TO PRODUCE THE SAME AT THE ASSESSMENT STAGE. THE SAME MAY BE ADMITTED FOR HEARING. THE DETAILS OF ADDITIONAL EVIDENCES ARE FILED FROM PAGE 1 TO 73 OF THE PAPER BOOK, WHICH ARE MAINLY CONFIRMATIONS FROM THE CREDITORS, COPY OF THEIR PAN CARD, EVIDENCES OF THEIR IDENTITY OR COPY OF FILING OF IT RETURNS. ON THE OTHER HAND, THE LD. DR SUBMITTED THAT SINCE THESE EVIDENCES COULD NOT B E FILED AT THE ASSESSMENT STAGE, THEREFORE, THE SAME MAY NOT BE ADMITTED AND RELIED UPON THE DECISION OF HONBLE ALLAHABAD HIGH COURT IN THE CASE OF RAM PRASAD SHAR MA VS. CIT, 119 ITR 867 AND VIMAL KUMAR ANANT KUMAR VS. CIT, 288 ITR 278. 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND THE MATERIAL ON RECORD. IT IS NOT IN DISPUTE THAT THE ASSESSEE COULD NOT PRODUCE THE CONFIRMATIONS AND OTHER ITA NO. 238/AGRA/2012 5 EVIDENCES BEFORE THE AO IN RESPECT OF 27 CREDITORS. HOWEVER, THE ASSESSEE HAS NOW PRODUCED THE CONFIRMATION LETTERS, PAN NUMBERS OF T HE CREDITORS, THEIR IDENTITY PROOFS AND FILING OF RETURN BY THE CREDITORS IN THE PAPER BOOK. THESE ADDITIONAL EVIDENCES ARE FILED FOR THE FIRST TIME BEFORE THE T RIBUNAL WITH THE PRAYER THAT THE SAME MAY BE ADMITTED FOR HEARING. THE ASSESSEE IN T HE APPLICATION FOR ADMISSION OF ADDITIONAL EVIDENCES STATED THAT SINCE THE CREDITOR S WERE SCATTERED GEOGRAPHICALLY, THEREFORE, THE SAME COULD NOT BE COLLECTED AT THE A SSESSMENT STAGE AND THE ASSESSMENT ORDER WAS PASSED IN HASTE WITHOUT GIVING REASONABLE OPPORTUNITY. THE ASSESSEE IN THE PAPER BOOK FILED COPIES OF THE ORDE R SHEET OF THE AO. THE AO IN THE ASSESSMENT ORDER ALSO NOTED THAT VIDE ORDER SHEET D ATED 17.09.2009, THE ASSESSEE WAS ASKED TO PRODUCE THE EVIDENCES IN SUPPORT OF TH ESE UNSECURED LOANS. COPY OF THE ORDER SHEET DATED 17.09.2009 IS FILED IN THE PA PER BOOK WHEREBY THE CASE OF THE ASSESSEE WAS ADJOURNED TO 15.10.2009, BUT THERE IS NO NOTING ON 15.10.2009 AND THE MATER IS TAKEN UP ON 11.11.2009 IN WHICH IT IS NOTE D BY THE AO THAT IN RESPECT OF 27 DEPOSITORS, NO EVIDENCES COULD BE FILED BECAUSE THE SAME ARE NOT READILY AVAILABLE WITH THE ASSESSEE AND THEREAFTER, THE ASSESSMENT PR OCEEDINGS WERE CONCLUDED AND THE ASSESSMENT ORDER IS PASSED ON 20.11.2009. IT WO ULD, THEREFORE, SHOW THAT THE ASSESSEE WAS MAKING EFFORTS TO COLLECT THE EVIDENCE S IN RESPECT OF THESE 27 CREDITORS BECAUSE THESE WERE SCATTERED DIFFERENTLY. THE AO GA VE OPPORTUNITY ONLY ON 11.11.2009. THUS, THE ASSESSEE DID NOT HAVE ANY SUF FICIENT TIME TO PRODUCE THESE EVIDENCES BEFORE THE AO. THE LD. COUNSEL FOR THE AS SESSEE RELIED UPON THE ORDER OF ITA NO. 238/AGRA/2012 6 THE ITAT, DELHI BENCH IN THE CASE OF AKSHYA FINANCE AND TRADING CO. VS. ITO, 46 TTJ 630, IN WHICH THE ADDITIONAL EVIDENCES WERE ADM ITTED AND THE MATTER WAS REMANDED TO THE LD. CIT(A) TO DECIDE THE ISSUE AFRE SH. SUCH ADDITIONAL EVIDENCES WERE ADMITTED BECAUSE THERE WAS INFIGHTING AMONGST THE VARIOUS GROUPS OF ASSESSEE AND DOCUMENTS COULD NOT BE FILED BEFORE THE AUTHORI TIES BELOW. THE LD. COUNSEL FOR THE ASSESSEE RELIED UPON UNREPORTED DECISION OF DEL HI HIGH COURT IN THE CASE OF CIT VS. TEXT HUNDRED INDIA (P) LTD. IN ITA NO. 2077, 20 61 AND 2065 OF 2010, IN WHICH THE HONBLE HIGH COURT OBSERVED IN PARA 13 AS UNDER : 13. THE AFORESAID CASE LAW CLEARLY LAYS DOWN A NEAT PRINCIPLE OF LAW THAT DISCRETION LIES WITH THE TRIBUNAL TO AD MIT ADDITIONAL EVIDENCE IN THE INTEREST OF JUSTICE ONCE THE TRIBUN AL AFFIRMS THE OPINION THAT DOING SO WOULD BE NECESSARY FOR PROPER ADJUDICATION OF THE MATTER. THIS CAN BE DONE EVEN WHEN APPLICATION IS FILED BY ONE OF THE PARTIES TO THE APPEAL AND IT NEED NOT TO BE A S UO MOTTO ACTION OF THE TRIBUNAL. THE AFORESAID RULE IS MADE ENABLING T HE TRIBUNAL TO ADMIT THE ADDITIONAL EVIDENCE IN ITS DISCRETION IF THE TRIBUNAL HOLDS THE VIEW THAT SUCH ADDITIONAL EVIDENCE WOULD BE NECESSA RY TO DO SUBSTANTIAL JUSTICE IN THE MATTER. IT IS WELL SETTL ED THAT THE PROCEDURE IS HANDMADE OF JUSTICE AND JUSTICE SHOULD NOT BE ALLOW ED TO BE CHOKED ONLY BECAUSE OF SOME INADVERTENT ERROR OR OMISSION ON THE PART OF ONE OF THE PARTIES TO LEAD EVIDENCE AT THE APPROPRIATE STAGE. ONCE IT IS FOUND THAT THE PARTY INTENDING TO LEAD EVIDENCE BEF ORE THE TRIBUNAL FOR THE FIRST TIME WAS PREVENTED BY SUFFICIENT CAUSE TO LEAD SUCH AN EVIDENCE AND THAT THIS EVIDENCE WOULD HAVE MATERIAL BEARING ON THE ISSUE WHICH NEEDS TO BE DECIDED BY THE TRIBUNAL AND ENDS OF JUSTICE DEMAND ADMISSION OF SUCH AN EVIDENCE, THE TRIBUNAL CAN PASS AN ORDER TO THAT EFFECT. 7.1 HONBLE HIGH COURT CONSIDERING RULE 29 OF THE I NCOME-TAX APPELLATE TRIBUNAL RULES, CONFIRMED THE ORDER OF THE TRIBUNAL IN ALLOWING THE DOCUMENTS TO ITA NO. 238/AGRA/2012 7 BE PRODUCED AT THE APPELLATE STAGE FOR SUBSTANTIAL CAUSE. IT IS SETTLED LAW THAT BURDEN IS UPON THE ASSESSEE U/S. 68 OF THE IT ACT TO PROVE THE IDENTITY OF THE CREDITORS, THEIR CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTION . THE ADDITIONAL EVIDENCE FILED ABOVE WOULD THROW LIGHT ON THE UNEXPLAINED CREDITS IN WHICH ADDITIONS HAVE BEEN MADE AND THESE ADDITIONAL EVIDENCES ARE NECESSARY T O ENABLE TO PASS APPROPRIATE ORDER IN THE MATTER IN DOING SUBSTANTIAL JUSTICE BE TWEEN THE PARTIES. FURTHER, SINCE NO SUFFICIENT TIME WAS AVAILABLE TO THE ASSESSEE TO PRODUCE THESE ADDITIONAL EVIDENCES BEFORE THE AO, THEREFORE, IN OUR VIEW SUC H ADDITIONAL EVIDENCES SHOULD BE ADMITTED FOR SUBSTANTIAL CAUSE IN ORDER TO DO JU STICE BETWEEN THE PARTIES. THE MATTER COULD HAVE BEEN REMANDED TO THE AO FOR RE-EX AMINATION OF THE EVIDENCES AND IN THAT EVENT, THE REVENUE WOULD NOT HAVE BEEN AT LOSS AT ALL. ON THE OTHER HAND, THE LD. DR RELIED UPON THE DECISION IN THE CA SE OF RAM PRASAD SHARMA (SUPRA), IN WHICH THE ASSESSEE DID NOT PRODUCE ANY EVIDENCE TO PROVE THE GENUINENESS OF THE CASH CREDITS DESPITE OPPORTUNITI ES GIVEN BY THE INCOME-TAX OFFICER. IT WAS HELD THAT THE TRIBUNAL WAS JUSTIFIE D IN REFUSING TO ADMIT THE ADDITIONAL EVIDENCE. IN THIS CASE ALSO, THE TRIBUNA L DID NOT ACCEPT THE ORAL ASSERTIONS MADE BEFORE IT FOR ADMISSION OF ADDITIONAL EVIDENCE . IN THE CASE OF VIMAL KUMAR ANANT KUMAR (SUPRA), IT WAS HELD THAT TRIBUNAL HAD FOUND THAT NO APPLICATION WAS FILED BY THE ASSESSEE AND THEREFORE, IT HAD DECLINE D TO PERMIT THE ASSESSEE TO FILE / PRODUCE THE STOCK REGISTER BEFORE IT. IT WAS HELD T O BE VALID ORDER. BOTH THE ABOVE DECISIONS CITED BY THE LD. DR WOULD NOT SUPPORT THE CASE OF THE REVENUE IN VIEW OF ITA NO. 238/AGRA/2012 8 THE FACTS NOTED ABOVE. CONSIDERING THE ABOVE DISCUS SION AND IN THE INTEREST OF JUSTICE AND FOR SUBSTANTIAL CAUSE, WE ADMIT ALL THE ADDITIONAL EVIDENCES FILED IN THE PAPER BOOK FROM PAGES 1 TO 73 AS NOTED ABOVE FOR TH E PURPOSE OF DISPOSAL OF APPEAL. SINCE THESE ADDITIONAL EVIDENCES WERE NOT F ILED BEFORE THE AO, THEREFORE, OPPORTUNITY SHALL HAVE TO BE GRANTED TO THE AO TO E XAMINE THESE ADDITIONAL EVIDENCES IN ORDER TO FINALIZE THE ASSESSMENT ORDER ON THIS ISSUE. WE, ACCORDINGLY, SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW ON TH IS ISSUE AND RESTORE THIS ISSUE TO THE FILE OF AO WITH THE DIRECTION TO RE-DECIDE THE ISSUE BY EXAMINING THE ADDITIONAL EVIDENCE BY GIVING REASONABLE AND SUFFICIENT OPPORT UNITY OF BEING HEARD TO THE ASSESSEE. THE ASSESSEE IS DIRECTED TO FILE ALL THES E ORIGINAL EVIDENCES BEFORE THE AO FOR FINALIZATION OF THE MATTER. WE MAY CLARIFY HERE THAT IN THESE ADDITIONAL EVIDENCES, EXCEPT IN CASE OF ONE CREDITOR, WHERE CO PY OF PAY SLIP OF THE CREDITOR IS FILED, NO EVIDENCE OF CREDITWORTHINESS OF THE CREDI TORS HAVE BEEN FILED. THEREFORE, THE ASSESSEE IS DIRECTED TO FILE EVIDENCE OF CREDIT WORTHINESS IN RESPECT OF THE CREDITORS BEFORE THE AO ALSO BECAUSE MERE FILING OF CONFIRMATIONS MAY NOT BE SUFFICIENT FOR THE PURPOSE OF CONSIDERING THE GENUI NENESS OF THE CREDIT IN THE MATER. WITH THESE OBSERVATIONS, GROUNDS NO. 2 & 3 OF APPEA L OF THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. ITA NO. 238/AGRA/2012 9 8. ON GROUND NO. 4, THE ASSESSEE CHALLENGED THE CHA RGING OF INTEREST, WHICH IS MANDATORY AND CONSEQUENTIAL AND SINCE NO ARGUMENTS HAVE BEEN MADE ON THIS GROUND, THEREFORE, THIS GROUND FAILS AND IS DISMISS ED. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES . 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PAR TLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (A.L. GEHLOT) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER *AKS/- COPY OF THE ORDER FORWARDED TO : 1. APPELLANT 2. RESPONDENT 3. CIT(A), CONCERNED BY ORDER 4. CIT, CONCERNED 5. DR, ITAT, AGRA 6. GUARD FILE SR. PRIVATE SECRETARY TRUE COPY