Parsuram Dash, Jajpur V. ACIT, Cuttack

ITA 240/CTK/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 81470 (ITAT-CUTTACK)
• Duration Of Justice: 1 year(s) 6 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-10-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 17-10-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 12-04-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S K JENA
• Section: 143(3); 68

Judgement Text

1 I.T.A. NO. 240/CTK/2013 ASSESSMENT Y EAR: 2009-2010 IN THE INCOME TAX APPELLATE TRIBUNAL, CUTTACK BENCH , CUTTACK BEFORE S/SHRI S.V.MEHROTRA (AM) AND GEORGE MATHAN (JM) I.T.A. NO. 240/CTK/2013 ASSESSMENT YEAR: 2009-2010 SHRI PARURAM DASH, PROP. M/S. ASHIRBAD FERTILISER, AT: PANIKOILI, DIST: JAJPUR PA NO.ABTPD 9097 L VS. ACIT, CIRCLE - 1(1), CUTTACK APPELLANT RESPONDENT FOR THE APPELLANT: SHRI S.K.JENA FOR THE RESPONDENT: SHRI ANIL SHARMA DATE OF HEARING: 17/10/.2014 DATE OF PRONOUNCEMENT: 21 /10/2014 ORDER PER S.V.MEHROTRA, AM THIS APPEAL FILED BY THE ASSESSEED IS DIRECTED AGAI NST ORDER DATED 21.1.2013 OF LD CIT(A), CUTTACK FOR THE ASSESSMENT YEAR 2009-2010. 2. THE ONLY ISSUE RAISED BY THE ASSESSEE IS AGAINST CONFIRMATION OF ADDITION OF RS.23,00,000/- MADE BY THE AO U/S.68 OF THE ACT. 3. BRIEFLY STATED THE FACTS ARE THAT, THE ASSESSEE, AN INDIVIDUAL, IN THE RELEVANT ASSESSMENT YEAR, DERIVED INCOME FROM DEALERSHIP OF FERTILIZER PESTICIDES & PADDY AND TRANSPORT OPERATION UNDER THE NAME & STYLE AS M/S. ASHIRBAD FERTILISERS AND TRADING BUSINESS UNDER THE NAME & STYLE AS M/S. SHREERAM TRADING AS A PROPRIETOR. HE FILED HIS RETURN OF INCOME DECLARING TOTAL INCOME OF RS.96,42,690/- FOR THE ASSESSMENT YEAR UN DER CONSIDERATION. THE ASSESSING OFFICER 2 I.T.A. NO. 240/CTK/2013 ASSESSMENT Y EAR: 2009-2010 COMPLETED THE ASSESSMENT UNDER SECTION 143(3) OF TH E ACT DETERMINING THE TOTAL INCOME AT RS.1,29,79,090/-. 4. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, TH E ASSESSING OFFICER, ON EXAMINATION OF BALANCE SHEET OF M/S. SHREE RAM TRADING, (PROP. SHR I PARSURAM DASH) AS ON 31.3.2009, INTER ALIA, NOTICED THAT AN AMOUNT OF RS.23,00,000/- HAD BEEN SHOWN AS UNSECURED LOAN. BEFORE THE AO, ASSESSEE HAD FURNISHED PARTY-WISE DETAILS WITH REGARD TO THE UNSECURED LOAN AS UNDER: SR.NO. NAME & ADDRESS AMOUNT IN (RS.) DATE OF LO AN TAKEN 1. SARAT CHANDRA DASH 8,00,000 15.7.2008 2. NARAYAN CHANDRA DALEI 5,00,000 15.7.2008 3. GANGA DHARA SWAIN 5,00,000 15.7.2008 4. SANJIB KUMAR PANDA 5,00,000 15.7.2008 5. SANTANU KUMAR DASH 5,00,000 15.7.2008 TOTAL: 28,00,000 6. LESS:REFUND TO SANJIB KR PANDA 5,00,000 10.10.2008 BALANCE 23,00,000 5. THE ASSESSING OFFICER REQUIRED THE ASSESSEE TO F URNISH THE IDENTITY AND CREDITWORTHINESS OF THE PERSONS GIVING LOAN. ASSESSEE COULD NOT FUR NISH ANYTHING TO SUBSTANTIATE ITS CLAIM. THE AO OBSERVED THAT EVEN NO PAN AND ACKNOWLEDGEMENT OF RETURN COPY OF THE PERSONS GIVING LOAN COULD BE FURNISHED TO PROVE THAT THEY WERE ASSESSED TO TAX. ON EXAMINATION OF BANK STATEMENT OF THE ASSESSEE, THE AO FOUND THAT ALL THE AMOUNTS HAD BEEN CREDITED BY TRANSFER AND NOT BY CLEARANCE THROUGH CHEQUES. IT WAS IN THIS BACKDROP THAT THE ASSESSING OFFICER, IN THE ABSENCE OF PROOF OF THE IDENTITY AND CREDITWORTHINESS OF THE L ENDERS, MADE AN ADDITION OF RS.23,00,000/- AS CASH CREDIT IN THE HANDS OF THE PROPRIETORY CONCERN M/S. SRIRAM TRADING. 6. IN FIRST APPEAL, ASSESSEE ALSO COULD NOT FURNISH THE REQUIRED DETAILS TO THE SATISFACTION OF LD CIT(A). LD CIT(A), INTER ALIA, REFERRING TO THE DECISION OF HONBLE SUPREME COURT IN THE CASE 3 I.T.A. NO. 240/CTK/2013 ASSESSMENT Y EAR: 2009-2010 OF KALE KHAN MOHAMMAD HANIF VS CIT, 50 ITR 1 (SC) A ND OTHERS, WHEREIN, IT HAS BEEN HELD THAT THE ONUS OF PROVING THE SOURCE OF ANY MONEY RECEIVE D BY THE ASSESSEE IS UPON HIM, CONFIRMED THE AOS ACTION. BEING AGGRIEVED, ASSESSEE IS IN A PPEAL BEFORE US. 7. LD COUNSEL FOR THE ASSESSEE SUBMITTED THAT BOTH THE REVENUE AUTHORITIES ARE NOT JUSTIFIED IN MAKING THE ADDITIONS IN THE HANDS OF THE ASSESSE E BECAUSE THE ASSESSEE HAD GIVEN THE NAME AND POSTAL ADDRESS OF THE CREDITORS. THE CREDITORS WERE NOT EXAMINED BY ANY OF THE DEPARTMENTAL AUTHORITIES. HE REQUESTED THAT ONE M ORE OPPORTUNITY MAY BE AFFORDED TO THE ASSESSEE TO ESTABLISH THE IDENTITY AND CREDITWORTHI NESS OF THE LENDERS. 8. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PER USED THE FINDINGS OF THE AUTHORITIES BELOW. IT IS WELL SETTLED LAW THAT BURDEN IS UPON T HE ASSESSEE U/S. 68 OF THE IT ACT TO PROVE IDENTITY OF THE CREDITORS, THEIR CREDITWORTHINESS A ND GENUINENESS OF THE TRANSACTION. WE FIND THAT IN CASE OF ALL LENDERS, THE ASSESSEE HAD FURNISHED BEFORE THE AO THE NAME AND ADDRESS BUT FAILED TO PRODUCE THEIR PAN NO. AND ACKNOWLEDGEMENT OF RETURN COPY. IT WAS THE OBSERVATION OF THE AO THAT ALL THE PAYMENTS WERE CREDITED TO THE B ANK ACCOUNT OF THE ASSESSEE BY TRANSFER AND NOT THROUGH CHEQUE. 9. THE HON'BLE CALCUTTA HIGH COURT IN THE CASE OF C IT VS UNITED COMMERCIAL AND INDUSTRIAL CO. (P) LTD., 187 ITR 596, INTER ALIA, HELD AS UND ER: 'THE PRIMARY ONUS LIES ON THE ASSESSEE TO PROVE THE NATURE AND SOURCE OF CREDITS IN ITS ACCOUNT. IT IS NECESSARY FOR THE ASSESSEE TO PROVE PRIMA FACIE THE IDENTITY OF HIS CREDITORS, THE CAPACITY OF SUCH CREDITORS TO ADVANC E THE MONEY AND LASTLY THE GENUINENESS OF THE TRANSACTIONS. ONLY WHEN THESE TH INGS ARE PROVED BY THE ASSESSEE PRIMA FACIE AND ONLY AFTER THE ASSESSEE HAS ADDUCED EVIDENCE TO ESTABLISH THE AFORESAID FACTS DOES THE ONUS SHIFT ON TO THE DEPARTMENT. IT IS NOT ENOUGH TO ESTABLISH THE IDENTITY OF THE CREDITORS 4 I.T.A. NO. 240/CTK/2013 ASSESSMENT Y EAR: 2009-2010 10. BEFORE US, LD COUNSEL FOR THE ASSESSEE CONTEND ED THAT IF THE MATTER IS RESTORED TO THE FILE OF THE AO, THE ASSESSEE WILL PRODUCE THE DETAILS T O SUBSTANTIATE ITS CLAIM. CONSIDERING THE ENTIRE CONSPECTUS OF THE CASE, PARTICULARLY THE FACT THAT AMOUNTS WERE CREDITED TO ASSESSEES ACCOUNT BY WAY OF TRANSFER ENTRIES, IN ORDER TO IMPART SUBS TANTIAL JUSTICE TO ASSESSEE, WE REMIT THE MATTER TO THE FILE OF THE AO TO REDECIDE THE ISSUE AFRESH IN ACCORDANCE WITH LAW. 11. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 21 ST OCTOBER, 2014. SD/- SD/- ( GEORGE MATHAN) (S.V.MEHROTRA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED, CUTTACK 21/10/2014 B.K.PARIDA, SR. PS COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT: SHRI PARURAM DASH,PROP. M/S. ASHIRB AD FERTILISER, AT: PANIKOILI, DIST: JAJPUR 2. THE RESPONDENT:: ACIT, CIRCLE-1(1),CUTTACK 3. THE CIT, CUTTACK 4. THE CIT(A),CUTTACK 5. DR, CUTTACK BENCH 6. GUARD FILE. TRUE COPY// BY ORDER