USHA GIRISH JAIN, MUMBAI V. ITO 24(3)(4), MUMBAI

ITA 2426/MUM/2013

• Counselvise Citation: [2015] 120 COUNSELVISE.COM (IT) 9219 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 11 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-03-2015
• Appeal Filed By: Assessee
• Bench Allotted: F
• Next Hearing Date: 19-02-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 28-03-2013
• Court: TRIBUNAL
• Department Lawyers: V K TULSI YAN SHRI VIVEK BATRA
• Assessee Lawyers: DEEMED ADDITION MAY BE DELETED
• Keywords: Unexplained cash credit; Onus to prove
• Section: 143(3); 131; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL F BENCH, MUMBAI BEFORE SHRI VIJAY PAL RAO , JUDICIAL MEMBER AND SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER ITA NO. 2426 /MUM/201 3 ASSESSMENT YEAR: - 2006 - 07 SMT. USHA GIRISH JAIN, 401, B - WING, TULSI TOWER CHSL, H.V. COMPOUND, BEHIND CITY CENTRE COMPOUND, S.V. ROAD, GOREGAON (W) MUMBAI 400 062. VS.` ITO - 24(3)(4), MUMBAI. APPELLANT RESPONDENT ORDER PER VIJAY PAL RAO, JM THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 13.02.2013 OF CIT(A) FOR THE A.Y. 2006 - 07. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS: - 1. ADDITION U/S. 68 - ON ACCOUNT OF ALLEGED UNEXPLAINED CASH CREDIT - RS. 1 ,32,11,000/ - A) THE ID. CIT(A) ERRED IN CONFIRMING THE ADDITION U/S. 68 WITHOUT APPRECIATING TO THAT THE MERITS THAT THE APPELLANT HAD DULY DISCHARGED HER PRIMARY ONUS AS CALLED FOR U/S. 68 IN RESPECT OF HER LOAN TRANSACTIONS (SQUARED OFF IN THE SUBSEQUENT YEAR): THEREFORE, MERELY BECAUSE THE APPELLANT FAILED TO PRODUCE THE LOAN CREDITOR BEFORE THE ASSESSING OFFICER, THE TRANSACTION DOES NOT BECOME A FIT CASE U/S 68 AND THE DEEMED ADDITION MAY BE DELETED. ASSESSEE BY SHRI V.K. TULSI YAN REVENUE BY SHRI VIVEK BATRA DATE OF HEARING 23.0 2 .2015 DATE OF PRONOUNCEMENT 25 .03.2015 ITA NO. 2426/MUM/2013 ASSESSMENT YEAR: - 2006 - 07 2 | P A G E B) WITHOUT PREJUDICE TO MERITS, UPON SAME ISSUES WITH THE SAME PARTY, WHEN THE REVENUE ACCEPTS THE TRANSACTION IN SUBSEQUENT YEAR AS GENUINE WHERE NO ADDITION HAS BEEN MADE, TREATING CURRENT YEAR'S TRANSACTION AS INGENUINE IN THE CIRCUMSTANCES WHERE THE APPE LLANT HAD DISCHARGED HER PRIMARY ONUS U/S. 68, THE ACTION AMOUNTS TO NON - APPRECIATION OF FACTS IN TOTALITY: THEREFORE, THE ADDITION IS NOT JUSTIFIED AND THE SAME MAY BE DELETED. 2. THE ASSESSEE HAS INTER ALIA SHOWN A LAON OF RS. 1,32,11,000/ - FORM M/S BAL AJI SALES CORPORATION. IN ORDER TO VERIFY THE SAID LOAN, THE AO ISSUED SUMMONS U/S 131 OF THE INCOME TAX ACT., TO M/S BALAJI SALES CORPORATION. SINCE THE PARTY HAS NOT RESPONDED TO THE SAID SUMMON S, T HE AO DEPUTED THE WARD INSPECTOR FOR ENQUIRY WHO REPORT ED THAT THE PREMISES MENTIONED AT THE ADDRESS IS OCCUPIED BY SOME OTHER PERSON AND M/S BALAJI SALES CORPORATION HAD OCCUPIED THE SAID PREMISES SOME 4 5 YEARS BEFORE. THE AO ACCORDINGLY, TREATED THE ENTIRE LOAN AMOUNT OF RS. 1,32,11,000/ - AS UNEXPLAINED C ASH CREDIT U/S 68 OF THE INCOME TAX ACT AND ADDED TO THE TOTAL INCOME OF THE ASSESSEE . 3. ON APPEAL, BEFORE THE CIT(A), THE ASSESSEE HAS POINTED OUT THAT THE LOANS WERE RECEIVED BY THE ASSESSEE THROUGH CHEQUE AND REPAYMENT WAS ALSO MADE BY THE CHEQUE. T HE ASSESSEE ALSO CONTENDED THAT THE EXISTENCE OF THE LOAN CREDITOR CAN BE CONFIRMED FROM THE PAN AND EVEN FROM THE INSPECTORS REPORT PARTY WAS DOING BUSINESS AND SITTING IN THE MARKET. THE ASSESSEE POINTED OUT THAT THE ASSESSEE HAD TRANSACTION WITH THE SA ID PARTY AND TAKEN SUBSTANTIAL LOAN IN THE SUBSEQUENT YEAR. THUS THE PAYMENTS WERE ALSO MADE BY THE CHEQUES AND THE AO WHILE FRAMING THE ASSESSMENT U/S 143(3 ) FOR THE SUBSEQUENT ASSESSMENT YEARS HAS ACCEPTED THE TRANSACTION AND NO ADDITION WAS MADE. THE C I T(A) ISSUED A REMAND ORDER AND DIRECTED THE AO TO CONDUCT THE NECESSARY VERIFICATION ITA NO. 2426/MUM/2013 ASSESSMENT YEAR: - 2006 - 07 3 | P A G E AND SUBMIT THE REMAND REPORT. AFTER RECEIVING THE REMAND REPORT, THE CIT(A) HAS CONFIRMED THE ADDITION MADE BY THE AO ON THE GROUND THAT THE CREDITOR DID NOT RESPOND TO TH E NOTICE ISSUED BY THE AO EITHER IN THE ASSESSMENT PROCEEDINGS OR IN THE REMAND PROCEEDINGS. 4. BEFORE US, THE LD. AR OF THE ASSESSEE HAS SUBMITTED THAT THE ASSESSEE HAS PROVIDED ADEQUATE PROOF AND THE EXPLANATION THAT THE CREDITOR IS IN EXISTENCE AND HIS PAN. THE ASSESSEE HAS TAKEN A BUSINESS LOAN FROM THE CREDITOR IN THE A.Y. 2006 - 07 AND 2007 - 08 A ND RETURNED THE SAME ALONG WITH INTEREST IN A.Y. 2007 - 08. THE TRANSACTION OF LOAN AND REPAYMENT HAS BEEN ROUTED THROUGH BANK ACCOUNTS OF THE RESPECTIVE PARTIES, THEREFORE, THE TRANSACTION OF LOAN AS WELL AS REPAYMENT WAS THROUGH BANKING CHANNEL. THE ASSESS EE PRODUCED PAN OF THE CREDITOR AS WELL AS BANK STATEMENT OF THE CREDITOR. HE HAS FURTHER SUBMITTED THAT IT IS NOT WITHIN THE CONTROL OF THE ASSESSEE TO PRODUCE THE CREDITOR BEFORE THE AO. THE ASSESSEE HAS DISCHARGED ITS ONUS BY PRODUCING THE DOCUMENTARY EVIDENCE TO PROVE THE IDENTITY AND CREDITWORTHINESS OF THE CREDITOR AS WELL AS THE GENUINENESS OF THE TRANSACTION. HE HAS FORCEFULLY CONTENDED THAT THE ASSESSEE HAS REPAID THE LOAN IN THE SUBSEQUENT A.Y. AND THE AO WHILE PASSING THE ASSESSMENT ORDER U/S 14 3(3) HAS ACCEPTED THE REPAYMENT OF LOAN. HE HAS REFERRED THE LEDGER ACCOUNT COPY OF M/S BALAJI SALES CORPORATION AND SUBMITTED THAT ALL THE TRANSACTIONS OF LOAN AS WELL AS REPAYMENT HAS BEEN SHOWN BY THE ASSESSED IN THE BOOKS OF ACCOUNTS, WHICH HAS NOT BEE N DISPUTED BY THE AO IN THE ASSESSMENT ORDER PASSED U/S 143(3) FOR THE A.Y. 2007 - 08. EVEN THE CIT(A) HAS ACCEPTED THE GENUINENESS OF THE TRANSACTION THROUGH BANKING CHANNEL. HE HAS RELIED ITA NO. 2426/MUM/2013 ASSESSMENT YEAR: - 2006 - 07 4 | P A G E UPON THE JUDGMENT OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. U.M. SHAH, PROPRIETOR, SHRENIK TRADING CO. (90 ITR 396) AND SUBMITTED THAT IT IS NOT FOR THE ASSESSEE TO HAVE PRODUCED THE WITNESS FOR THE AO. IF THEY HAVE RECEIVED THE SUMMONS, THE ASSESSEE CANNOT BE BLAMED FOR NON APPEARANCE OF THE WITNESS OF THE SUMMONS ISSUED BY THE AO. HE HAS ALSO RELIED UPON THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF RADHASOAMI SATSANG VS. CIT 193 ITR 321 AS WELL AS THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE DIT VS. GURU NANAK VIDYA BHANDAR TRUST 272 ITR 379 AND SUBMITTED THAT THERE IS NO CHANGE IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND WHEN THE AO ACCEPT ED THE LOAN AND TRANSACTION IN SUBSEQUENT A.YS CANNOT DISALLOW THE SAME IN THE YEAR UNDER CONSIDERATION. 5. ON THE OTHER HAND, THE LD. DR HAS SUBMITTED THAT THE ASSESSEE HAS FAILED TO PROVE THE IDENTITY AS WELL AS CREDITWORTHINESS OF THE CREDITOR AS THE ASSESSEE HAS NOT FURNISHED THE RETURN OF INCOME FILED BY THE LOAN CREDITOR. HE HAS REFERRED THE ASSESSMENT ORDER AS WELL AS REMAND REPORT A ND SUBMITTED THAT DESPITE THE SUMMONS AND NOTICE ISSUED BY THE AO, THE CREDITOR NEITHER RESPONDED NOR APPEARED, THEREFORE, THE GENUINENESS OF THE TRANSACTION WAS RIGHTLY DOUBTED BY THE AO. THE ASSESSEE HAS FAILED TO PROVE THE GENUINENESS OF THE TRANSACTION . HE HAS RELIED UPON THE ORDERS OF AUTHORITIES BELOW. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS RELEVANT MATERIAL ON RECORD. THE ASSESSEE IS A PROPRIETOR OF M/S SHIKHAR STEEL. OUT OF SEVERAL SUNDRY CREDITORS SHOWN BY THE ASSESSEE IN THE BOOK S OF ITA NO. 2426/MUM/2013 ASSESSMENT YEAR: - 2006 - 07 5 | P A G E ACCOUNTS, THE AO MADE THE ADDITION ONLY IN RESPECT OF ONE PARTY NAMELY BALAJI SALES CORPORATION DUE TO THE REASON THAT THE CREDITOR DID NOT RESPOND TO THE NOTICE ISSUED U/S 131. FURTHER AT THE GIVEN ADDRESS, THE WARD INSPECTOR FOUND SOMEONE ELSE AND NOT THE LOAN CREDITOR. BEFORE THE CIT(A), THE ASSESSEE CONTENDED THAT THE TRANSACTION IS THROUGH BANKING CHANNEL. THE ASSESSEE REPAID THE LOAN AMOUNT IN THE SUBSEQUENT YEAR WHICH WAS ACCEPTED BY THE AO WHILE PASSING ASSESSMENT U/S 143(3). THE ASSESSEE ALS O PRODUCED PAN AND BANK STATEMENT OF THE LOAN CREDITOR SHOWING THE TRANSACTION OF LOAN AS WELL AS REPAYMENT BY THE ASSESSEE. IN THE REMAND PROCEEDINGS, THE AO AGAIN ISSUED SUMMONS U/S 133(6). SINCE THE LOAN CREDITOR HAS NOT RESPONDED TO THE SUMMON, THE AO STATED IN THE REMAND REPORT THAT THE ASSESSED FAILED TO DISCHARGE ITS ONUS TO PROVE THE CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTION. THE ASSESSEE HAS PRODUCED THE CORRECT PAN, BANK STATEME NT, EVIDENCE OF REPAYMENT OF LOAN IN THE SUBSEQUENT YEARS. THE AO HAS NOT DISPUTED THE CORRECTNESS OF PAN, BANK STATEMENT AND REPAYMENT OF LOAN BY THE ASSESSEE IN THE SUBSEQUENT YEARS. EVEN THE AO WHILE PASSING THE ASSESSMENT ORDER U/S 143(3) ACCEPTED THE TRANSACTION OF REPAYMENT OF LOAN. ONCE THE ASSESSEE HAS BROUGHT ON RECORD THE EVIDENCE PROVING THE IDENTITY OF THE CREDITOR BY PRODUCING THE PAN AS WELL AS BANK STATEMENT AND CREDITWORTHINESS OF THE CREDITOR THROUGH THE BANK STATEMENT OF THE CREDITOR THEN MERELY BECAUSE THE CREDITOR HAS NOT RESPONDED TO THE SUMMONS ISSUED BY THE AO, WILL NOT IPSO FACTO LEAD TO THE CONCLUSION THAT THE TRANSACTION IS NOT GENUINE. THE ASSESSEE PRODUCED ALL RELEVANT EVIDENCE TO SHOW THE LOAN TRANSACTION THROUGH BANKING CHANNE L AND ALSO REPAYMENT THROUGH BANKING CHANNEL WHICH HAS BEEN ACCEPTED BY THE AO IN THE ASSESSMENT FOR THE A.Y. 2007 - 08 PASSED U/S 143(3), AND THE AO HAS NOT FOUND ITA NO. 2426/MUM/2013 ASSESSMENT YEAR: - 2006 - 07 6 | P A G E ANYTHING WRONG WITH THE BANK STATEMENT PRODUCED BY THE ASSESSEE , THEREFORE , THE GENUINENESS OF THE TRANSACTION CANNOT BE DISPUTED ON MERE SUSPICION . WE ARE OF THE VIEW THAT THE ASSESSEE HAS DISCHARGED ITS ONUS OF PROVING THE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTION BY PRODUCING THE PAN, BANK STATEMENT AS WELL AS EVIDENCE OF REP AYMENT OF LOAN. THE TRANSACTION OF LOAN AS WELL AS REPAYMENT IS THROUGH BANKING CHANNEL AND THE AO HAS ACCEPTED THE REPAYMENT IN THE NEXT YEAR. THUS IN THE ABSENCE OF ANY MATERIAL OR FACT BROUGHT ON RECORD BY THE AO THAT THE LOAN AMOUNT WAS ASSESSEES OWN MONEY, THE EVIDENCE PRODUCED BY THE ASSESSEE DISCHARGING ITS ONUS OF PROVING THE CREDITWORTHINESS AND GENUINENESS REMAINED UNCONTROVERTED AND, THEREFORE, THE SAME CANNOT BE BRUSH ASIDE. PRODUCTION OF CREDITOR IN PERSON BEFORE THE AO IS NOT IN CONTROL OF TH E ASSESSEE. THE ASSESSEE HAS PRODUCED ALL THE RELEVANT EVIDENCE TO DISCHARGE ITS ONUS AND SATISFYING THE CONDITION OF IDENTITY, CREDITWORTHINESS AND GENUINENESS IN RESPECT OF THE LOAN TRANSACTION. THUS THE LOAN CANNOT BE REJECTED MERELY ON THE GROUND OF NO N APPEARANCE OF THE CREDITOR. ACCORDINGLY, IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES OF THE CASE, WE FIND THAT THE ASSESSEE DULY DISCHARGED ITS ONUS AND THE ADDITION MADE BY AO U/S 68 IS NOT JUSTIFIED. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED . ORDER PRONOUCNED IN THE OPEN COURT ON THIS 25 TH DAY OF MARCH 2015 SD/ - SD/ - ( N.K. BILLAIYA ) (VIJAY PAL RAO) ( ACCOUNTANT MEMBER ) (JUDICIAL MEMBER ) MUMBAI DATED 25 .03.2015 SKS SR. P.S, ITA NO. 2426/MUM/2013 ASSESSMENT YEAR: - 2006 - 07 7 | P A G E COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CONCERNED CIT(A) 4. THE CONCERNED CIT 5. THE DR, C BENCH, ITAT, MUMBAI BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCHES, MUMBAI