SHRI PRASHANT BHASKAR , JALANDHAR V. INCOME TAX OFICER -1(3), JALANDHAR

ITA 246/ASR/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 7093 (ITAT-AMRITSAR)
• Duration Of Justice: 8 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-01-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2006-2007
• Appeal Filed On: 27-04-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BHAWANI SHANKAR
• Assessee Lawyers: RAJIV MAKOL
• Keywords: Unexplained cash credit; Opportunity of being heard
• Section: 271(1)(c); 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CAMP BENCH SMC AT JALANDHAR BEFORE SH. N. K. SAINI, HONBLE VICE PRESIDENT ITA NO.246/ASR./2018 : ASSTT. YEAR : 2006-07 SH. PRASHANT BHASKAR, C/O SH. DINESH SARNA, ADV., B- 18, VAKIL BUILDING, MODEL TOWN ROAD, JALANDHAR VS INCOME TAX OFFICER-1(3), JALANDHAR (APPELLANT) (RESPONDENT) PAN NO. AIGPP3186N ASSESSEE BY : SH. RAJIV MAKOL, CA REVENUE BY : SH. BHAWAN I SHANKAR, DR DATE OF HEARING : 07.01.2019 DATE OF PRONOUNCEMENT : 15.01.2019 ORDER THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORDER DATED 27.03.2018 OF LD. CIT(A)-1,JALANDHAR. 2. THE ONLY GRIEVANCE OF THE ASSESSEE IN THIS APPEA L RELATES TO THE CONFIRMATION OF ADDITION OF RS.12,29,000/- MADE BY THE AO ON ACCOUNT OF DEPOSIT FROM SH. RADHEY SHAM. 3. FACTS OF THE CASE IN BRIEF ARE THAT THE ASSESSEE FILED THE RETURN OF INCOME ON 02.06.2006 DECLARING A TOTAL INCOME OF RS.1,36,211/-. THE ASSESSMENT, HOWEVER, WAS COMPLETED VIDE ORDER D ATED 20.11.2008 U/S 143(3) OF THE INCOME TAX ACT, 1961 ( HEREINAFTER REFERRED TO AS THE ACT) AT AN INCOME OF RS.16,98,21 1/- AFTER MAKING AN ADDITION OF RS.2,45,000/- ON ACCOUNT OF CAPITAL INTRODUCED, RS.12,29,000/- ON ACCOUNT OF UNEXPLAINED CREDIT AND RS.88,000/- ON ACCOUNT OF HOUSE HOLD WITHDRAWALS. THEREAFTER, THE MATTER TRAVELLED ITA NO. 246/ASR./2018 PRASHANT BH ASKAR 2 UP TO THE ITAT WHEREIN VIDE ORDER DATED 21.09.2015 IN ITA NO. 28/ASR./2011, THE ISSUE WAS SET ASIDE FOR RE-ADJUDI CATION WITH THE DIRECTIONS TO EXAMINE THE CUSTOMERS ON WHOSE BEHALF , THE ASSESSEE HAD RECEIVED THE PAYMENTS FROM M/S CARGO MOTORS PVT . LTD. THE AO, HOWEVER, WAS NOT SATISFIED WITH THE EXPLANATION OFFERED BY THE ASSESSEE DURING THE ASSESSMENT PROCEEDINGS AND AGAI N MADE THE ADDITION OF RS.12,29,000/-. 4. BEING AGGRIEVED THE ASSESSEE CARRIED THE MATTER TO THE LD. CIT(A) AND SUBMITTED AS UNDER: IN CONNECTION WITH ABOVE IT IS SUBMITTED THAT THIS IS CASE OF AN ASSESSEE, AN INDIVIDUAL, FILED HIS RETURN DEC LARING AN INCOME OF RS. 1,36,210/- . ORIGINAL ASSESSMENT IN T HE CASE OF ASSESSEE WAS COMPLETED AT AN INCOME OF RS. 16,98 ,211/- ON 20.11.2008 AGAINST WHICH ASSESSEE FILED APPEAL B EFORE THE WORTHY CIT(A), JALANDHAR AND GOT PARTIAL RELIEF . AGGRIEVED BY THE ORDER OF THE WORTHY CIT(A), JALAND HAR ASSESSEE FILED APPEAL BEFORE THE HON BLE IT AT, AM RITSAR, WHEREIN THE HON'BLE BENCH RESTORED THE ORDER TO ASS ESSING OFFICER VIDE ORDER DATED 21.09.2015. AS PER THE DIR ECTION OF THE HON'BLE 1TAT, AMRITSAR NOTICES U/S 143(2) & 142 (1) OF THE ACT WERE ISSUED AND SERVED UPON ASSESSEE ON 11.04.2016. IN RESPONSE TO WHICH ASSESSEE FILED INF ORMATION AND DOCUMENTS CALLED FOR TIME TO TIME. DURING THE C OURSE OF ASSESSMENT PROCEEDING ASSESSEE MADE REQUEST THAT AS SESSEE HAS NOT KNOWN TO THE PERSON SH. RADHAY SHAM, SH. SA ROOP SINGH, SH. ANGREJ SINGH AND SH. TAJINDER SINGH SO, THE ADDRESSES AND DETAIL OF THESE PERSONS MAY DIRECTLY CALLED FORM M/S CARGO MOTORS AND M/S TATA FINANCIAL SERVIC ES. FURTHER ASSESSEE ALSO MADE OFFER OF RS. 5,96,000/- FOR TAXATION AND MADE REQUEST THAT RETURN OF ASSESSEE M AY KINDLY BE TREATED AS REVISED BECAUSE IT HAS ALREADY BEEN PROVED THAT RS. 6,33,000/- WAS RETURNED BACK TO THE SH. RADHAY SHAM ONLY RS. 5,96,000/- IS OUTSTANDING. BUT THE LD. ASSESSING OFFICER IGNORING THE SUBMISSION OF AS SESSEE WRONGLY MADE ADDITION OF RS. 12,29,000/- AND INITIA TED ITA NO. 246/ASR./2018 PRASHANT BH ASKAR 3 PENALTY U/S 271(1)(C) OF THE ACT. AGGRIEVED BY THE ORDER ASSESSEE PREFERRED APPEAL BEFORE YOUR HONOUR: 1. THAT THE LEARNED ASSESSING OFFICER IGNORING THE SUBMISSION OF ASSESSEE WRONGLY MADE AN ADDITION OF RS. 12,29,400/- RECEIVED FROM SH. RADHAY SHAM BY TREATI NG THE SAME AS INCOME OF ASSESSEE. IT IS STATED THAT THE MAIN ISSUE UNDER CONSIDERATIO N IS THAT ASSESSEE RECEIVED RS. 12,29,400/- FROM M/S CARGO MO TORS PVT. LTD. ON BEHALF OF SH. RADHAY SHAM AND OUT OF T HIS AMOUNT ASSESSEE REPAID AN AMOUNT OF RS. 6,33,000.- TO HIM AND BALANCE RS. 5,96,400/- IS OUTSTANDING AS HE LEF T THE CITY. DURING THE COURSE OF ORIGINAL ASSESSMENT PROC EEDING ASSESSEE WAS ASKED TO PRODUCE SH. RADHAY SHAM BUT ASSESSEE FAILED TO PRODUCE AS HE LEFT THE CITY. THE LD. ASSESSING OFFICER FRAMED ASSESSMENT BY MAKING ADDIT ION OF RS. 12,29,400/- IN THE HAND OF ASSESSEE. AGGRIEVED BY THE ORDER ASSESSEE PREFERRED APPEAL BEFORE THE WORTHY C 1T(A), JALANDHAR WHO UPHELD THE ORDER OF ASSESSING OFFICER AND THEN IN SECOND APPEAL BEFORE THE HONBLE 1TAT, AMRI TSAR THE MATTER WAS AGAIN RESTORED TO THE LD. ASSESSING OFFICER AND DURING THE COURSE OF PROCEEDING ASSESSEE WAS AG AIN ASKED TO PRODUCE THE PERSONS I.E. SH. RADHAY SHAM, SH. SAROOP SINGH, SH. ANGREJ SINGH AND SH. TAJIINDER SI NGH, IN RESPONSE TO WHICH ASSESSEE FILED HIS SUBMISSION AS UNDER: 1. THAT AS REGARD PARA 3, IT IS STATED THAT HONBLE ITAT DIRECTED AO TO DIRECTLY EXAMINE SH. RADHEY SHAM AND THE PERSONS TO WHOM DISCOUNT ACTUALLY BELONGS. ASSESSEE PERSONALLY KNOWS SH. RADHEY SHAM BUT HAVE NO RELATI ON, DIRECTLY OR INDIRECTLY, WITH SH. SAROOP SINGH S/O S H. DARBARA SINGH, SH. ANGREJ SINGH S/O SH. DARA SINGH AND SH. TEJINDER SINGH S/O SH. JAGIR SINGH. IT IS THERE FORE REQUESTED THAT YOUR GOOD SELF MAY DIRECTLY CALL THE SE PERSONS AND EXAMINE THEM. 1 AM READY- TO PAY THE CHARGES IF ANY. 2. THAT AS REGARD PARA 4, IT IS STATED THAT SH. RAD HEY SHAM AND OTHER PERSONS ARE CUSTOMERS OF M/S CARGO MOTORS PVT. LTD. YOUR GOOD SELF MAY DIRECTLY TAKE INFORMATION REGARDING THEIR POSTAL ADDRESSES FROM T HE ITA NO. 246/ASR./2018 PRASHANT BH ASKAR 4 SAID COMPANY AS I DO NOT HAVE ANY RELATION WITH THE SAID COMPANY. 3. THAT AS REGARD PARA 5, IT IS STATED THAT ASSESSE E HAS NO BUSINESS RELATIONSHIP WITH SH. RADHEY SHAM, SH. SAR OOP SINGH, SH. ANGREJ SINGH AND SH. TEJINDER SINGH. THE SE PERSONS ARE CUSTOMERS OF M/S CARGO MOTORS PVT. LTD AND COMPANY HAS GIVEN DISCOUNT TO THEM DURING THE YEAR UNDER CONSIDERATION. 4. THAT AS REGARD PARA 6, IT IS STATED THAT PAYMENT WAS RECEIVED BY ASSESSEE FROM M/S CARGO MOTORS PVT. LTD . ON BEHALF OF SH. RADHEY SHAM DURING THE YEAR UNDER CONSIDERATION. 5. THAT AS REGARD PARA 7, IT IS STATED THAT ASSESSE E RECEIVED AN AMOUNT OF RS. 12,29,400/- ON BEHALF OF SH. RADHEY SHAM AND RS, 6,33.000/- WAS REPAID TO HIM DURING THE YEAR UNDER CONSIDERATION. THE BALANCE AM OUNT OF RS. 5,96,400/- IS STILL OUTSTANDING AND ASSESSEE HAS NOT PAID THIS AMOUNT BECAUSE HE LEFT JALANDHAR. COPY OF BANK ACCOUNT IS ENCLOSED HEREWITH. IT IS STATED THAT THE CASE OF ASSESSEE WAS RESTORED TO THE FILE OF THE ASSESSING OFFICER BY THE HON'BLE ITAT, AMRIT SAR UNDER THE FOLLOWING DIRECTIONS: ....IN THE VIEW OF THE ABOVE FACTS AND CIRCUMSTANC ES, WE ARE IN AGREEMENT WITH THE LD. AR THAT ISSUE NEEDS T O BE RE-ADJUDICATED BY THE ASSESSING OFFICER WHO SHOULD EXAMINE THE CUSTOMERS ON WHOSE BEHALF THE ASSESSEE HAD RECEIVED THE PAYMENTS FROM M/S CARGO MOTORS PVT. LT D. .... BUT THE ASSESSING OFFICER FAILS TO FOLLOW THE DIREC TIONS OF THE HONBLE ITAT, AMRITSAR AND FRAMED ASSESSMENT BY ADDITION THE AMOUNT OF RS. 12,29,400/- IN THE HAND OF ASSESSEE BY STATING IN PARA 6.1 AS UNDER: FROM THE ABOVE IT IS CLEAR THAT THE ASSESSEE AFFOR DED SUFFICIENT OPPORTUNITY OF BEING HEARD FROM 18.04.20 16 TO TILL DATE OF PASSING THE ORDER BUT HE COULD NOT PRO DUCE ITA NO. 246/ASR./2018 PRASHANT BH ASKAR 5 SH. RADHAY SHAM, SH. SAROOP SINGH, SH. ANGREJ SINGH AND SH. TAJINDER SINGH NOR HE COULD FURNISH THE POS TAL ADDRESSES. AS SUCH THE CUSTOMERS ON WHOSE BEHALF TH E ASSESSEE HAD RECEIVED PAYMENT FROM M/S CARGO MOTORS PVT. LTD. COULD NOT BE EXAMINED, AS DIRECTED BY THE HON'BLE ITAT, AMRITSAR BENCH AMRITSAR. THEREFORE AN ADDITION OF RS. 12,29,000/- AS MADE DURING ORIGINAL ASSESSMENT WHICH WAS UPHELD BY THE LD. CIT(A), JALANDHAR, IS MADE TO THE INCOME OF THE ASSESSEE... . IT IS VERY MUCH CLEAR FROM THE ABOVE DIRECTIONS THA T HON'BLE ITAT, AMRITSAR DIRECTED TO THE ASSESSING OF FICER TO EXAMINE THE CUSTOMER ON WHOSE BEHALF ASSESSEE RECEI VED AN AMOUNT OF RS. 12,29,000/- NOT THE ASSESSEE WAS DIRE CTED TO PRODUCE THE PERSON. DURING THE COURSE OF ASSESSMENT PROCEEDING ASSESSEE WAS ASKED FOR THE ADDRESSES OF THE PERSON NAMED ABOVE BUT THE ASSESSEE FILED HIS SUBMI SSION WHICH IS AS UNDER: THAT AS REGARD PARA 3, IT IS STATED THAT HONBLE IT AT DIRECTED AO TO DIRECTLY EXAMINE SH. RADHEY SHAM AND THE PERSONS TO WHOM DISCOUNT ACTUALLY BELONGS. ASSESSEE PERSONALLY KNOWS SH. RADHEY SHAM BUT HAVE NO RELATI ON, DIRECTLY OR INDIRECTLY, WITH SH. SAROOP SINGH S/O S H. DARBARA SINGH, SH. ANGREJ SINGH S/O SH. DARA SINGH AND SH. TEJINDER SINGH S/O SH. JAGIR SINGH. IT IS THERE FORE REQUESTED THAT YOUR GOOD SELF MAY DIRECTLY CALL THE SE PERSONS AND EXAMINE THEM. I AM READY TO PAY THE CHA RGES IF ANY. DURING THE COURSE OF ASSESSMENT PROCEEDING ASSESSEE DULY CO-OPERATED WITH THE ASSESSING OFFICER, ASSESSEE WA S READY TO BEAR THE CHARGES IF ANY REQUIRED BY THE DEPARTME NT TO CALL THE CUSTOMERS ON WHOSE BEHALF ASSESSEE RECEIVE D AMOUNT FORM M/S CARGO MOTORS PVT. LTD. BUT THE M/S CARGO MOTORS PVT. LTD. AND M/S TATA FINANCIALS SHOWN ITS INABILITY TO PROVIDE ANY INFORMATION, WHEREIN ASSES SEE HAS NO DEFAULT AT ALL. ASSESSEE RECEIVED AN AMOUNT OF R S. 12,29,400/- FROM MS/ CARGO MOTORS PVT. LTD., THIS F ACT REMAINS UNDOUBTED AND IT IS ALSO NOT DOUBTED THAT O UT OF TOTAL AMOUNT OF RS. 12,29,400/-, RS. 6,33,000/- REPAID TO ITA NO. 246/ASR./2018 PRASHANT BH ASKAR 6 SH. RADHAY SHAM AND REMAINING RS. 5,96,400/- IS OUTSTANDING TOWARDS HIM AND THE SAME IS UNCALIMABLE . IT WAS DUTY OF THE ASSESSING OFFICER TO CALL THE PE RSON AND EXAMINE THE SAME BUT THE ASSESSING OFFICER TRIED TO SHIFT THE ONUS CAST UPON HIM BY THE HON'BLE 1TATA, AMRITS AR TO THE ASSESSEE AND ASKED THE ASSESSEE TO PRODUCE THE SAME WHICH CAUSE INJUSTICE TO THE ASSESSEE. THE ASSESSEE HAS PROVE THE SOURCES OF DEPOSIT IN BANK ACCOUNT AND TH E ASSESSING OFFICER HAS NOT DOUBTED THE TRANSACTION R ECEIVED FROM M/S CARGO MOTORS, BUT THE LD. ASSESSING OFFICE R FAIL TO DISCHARGE THE ONUS CAST UPON HIM BY THE HONBLE ITAT, AMRITSAR, SO, IT IS REQUESTED THAT CONSIDERING THE FACTS AND CIRCUMSTANCES OF THIS CASE AND DIRECTION ISSUED BY THE HON'BLE IATAT, AMRITSAR, APPROPRIATE RELIEF MAY KIN DLY BE ALLOWED. 6. THE LD. CIT(A), HOWEVER, DID NOT FIND MERIT IN T HE SUBMISSIONS OF THE ASSESSEE AND SUSTAINED THE ADDITION BY OBSERVING IN PARA 3.2 OF THE IMPUGNED ORDER AS UNDER: 3.2 I HAVE CONSIDERED THE OBSERVATIONS AS MADE BY THE ASSESSING OFFICER WHILE MAKING THE IMPUGNED ADDITIONS. I HAVE ALSO CONSIDERED THE SUBMISSIONS FILED BY THE LD.AR OF TH E APPELLANT DURING THE APPEAL PROCEEDINGS. THE ASSESSEE HAS FAI LED TO SATISFACTORILY EXPLAIN RECEIPT OF RS. 12,29,000/- W HICH WAS ALLEGEDLY RECEIVED ON BEHALF OF SH. RADHEY SHAM FROM M/S CARG O MOTORS PVT. LTD. THE HONBLE ITAT AMRITSAR HAS RESTORED THE MAT TER TO THE ASSESSING OFFICER TO EXAMINE THE CUSTOMERS ON WHOSE BEHALF THE ASSESSEE HAS RECEIVED THE PAYMENTS FROM M/S CARGO M OTORS PVT. LTD, IN THIS REGARD, NEITHER THE ASSESSEE COULD PRO VIDE DETAILS OF THESE CUSTOMERS TO THE ASSESSING OFFICER NOR M/S CA RGO MOTOR COULD GIVE THE DETAILS. FURTHER, DETAILS OF WHEREABOUTS O F SH. RADHEY SHAM ARE ALSO NOT KNOWN. M/S TATA MOTORS FINANCE LT D. HAS INTIMATED THAT THEY HAD NOT EMPLOYED ANYBODY NAMED SH. RADHEY SHAM AND WERE UNAWARE ABOUT HIS DETAILS. FURTHER, THE ASSESSING OFFICER HAS OBSERVED THAT TH E ASSESSEE HAS ADMITTED THAT HE HAD NO DIRECT RELATIONSHIP WITH SH . RADHEY SHAM. FURTHER, IT HAS BEEN HELD BY THE ASSESSING OFFICER, THAT IT HAS NOT ITA NO. 246/ASR./2018 PRASHANT BH ASKAR 7 PROVED THAT RS.6,33,000 WAS RETURNED BACK BY THE AS SESSEE TO SH. RADHEY SHAM. THEREFORE, THE ASSESSEE HAS FAILED TO ESTABLISH THAT RS. 12,29,400/- WERE RECEIVED BY HIM ON BEHALF OF S H. RADHEY SHAM AND AN AMOUNT OF RS.6,33,000/- WAS RETURNED BACK TO HIM BY THE ASSESSEE. IN VIEW OF THESE FACTS, ASSESSMENT MADE BY THE ASSE SSING OFFICER IS UPHELD AND APPEAL OF THE ASSESSEE IS DISMISSED. 7. NOW THE ASSESSEE IS IN APPEAL. THE LD. COUNSEL F OR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE LD. CIT(A) AND FURT HER SUBMITTED THAT THE AO DID NOT FOLLOW THE DIRECTIONS GIVEN BY THE ITAT TO VERIFY FROM THE CONCERNED PERSONS ON WHOSE BEHALF M/S CARGO MOTORS PVT. LTD. DEPOSITED THE AMOUNT WITH THE ASSESSEE. IT WAS SUBMITTED THAT THE SAID A MOUNT WAS DEPOSITED ON BEHALF OF SH. RADHEY SHAM OUT OF WHICH AN AMOUNT OF RS.6,33,000/- WAS REPAID TO HIM AND BALANCE AMOUNT OF RS.5,96,400/- W AS OUTSTANDING, AS HE LEFT THE CITY. THEREFORE, THE ADDITION MADE BY THE AO AN D SUSTAINED BY THE LD. CIT(A) WAS NOT JUSTIFIED. 8. IN HIS RIVAL SUBMISSIONS, THE LD. DR STRONGLY SU PPORTED THE ORDERS PASSED BY THE AUTHORITIES BELOW. 9. I HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PA RTIES AND PERUSED THE MATERIAL AVAILABLE ON THE RECORD. IN THE PRESENT CA SE, IT APPEARS THAT THE ASSESSEE RECEIVED AN AMOUNT OF RS.12,29,400/- ON BEHALF OF S H. RADHEY SHAM FROM M/S CARGO MOTORS PVT. LTD. THE ASSESSEE HAD ALSO REPAID A SUM OF RS.6,33,000/- TO SH. RADHEY SHAM DURING THE YEAR UNDER CONSIDERATION AND ALSO FURNISHED COPY OF BANK ACCOUNT, THE BALANCE AMOUNT OF RS.5,96,400/ - WAS OUTSTANDING AND HAD NOT BEEN CONSIDERED AS NON GENUINE, WHEN THE OUTSTA NDING BALANCE HAS BEEN ACCEPTED THERE WAS NO REASON TO DOUBT THE TOTAL AMO UNT RECEIVED BY THE ASSESSEE THROUGH M/S CAGRO MOTORS PVT. LTD. IT IS ALSO NOT T HE CASE OF THE DEPARTMENT ITA NO. 246/ASR./2018 PRASHANT BH ASKAR 8 THAT M/S CARGO MOTORS PVT. LTD. WAS NOT INEXISTENCE AND THE TRANSACTION WAS THROUGH BANKING CHANNEL. IN THE PRESENT CASE, THE A SSESSEE HAD NOT RECEIVED THE IMPUGNED AMOUNT DIRECTLY FROM SH. RADHEY SHAM RATHE R IT WAS RECEIVED FROM M/S CARGO MOTORS PVT. LTD., OUT OF THE AMOUNT RECEI VED, AN AMOUNT OF RS.6,33,000/- WAS REPAID BY THE ASSESSEE AND ONLY R S.5,96,400/- WAS OUTSTANDING IN ASSESSEES BOOKS OF ACCOUNT. IT IS N OT THE CASE OF THE AO THAT THERE WAS ANY CESSATION OF LIABILITY RELATING TO TH E OUTSTANDING AMOUNT. THE REASON GIVEN BY THE ASSESSEE FOR NOT PRODUCING THE CONCERNED PERSON WAS THAT THE SAID PERSON I.E. SH. RADHEY SHAM LEFT JALANDHAR , THEREFORE, THE REMAINING PAYMENT COULD NOT HAVE BEEN MADE TO HIM. IN MY OPIN ION, WHEN THE OUTSTANDING LIABILITY IN THE BOOKS OF ACCOUNT HAS B EEN ACCEPTED, THE ADDITION MADE BY THE AO AND SUSTAINED BY THE LD. CIT(A) WAS NOT JUSTIFIED. ACCORDINGLY, THE SAME IS DELETED. 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS A LLOWED. (ORDER PRONOUNCED IN THE COURT ON 15/01/2019) SD/- (N. K. SAINI) VICE PRESIDENT DATED: 15/01/2019 *SUBODH* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR