The ITO, Ward-5(3), Ahmedabad V. Rajlaxmi Development Pvt.Ltd., Ahmedabad

ITA 255/AHD/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 76767 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 4 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-05-2014
• Appeal Filed By: Department
• Bench Allotted: A
• Next Hearing Date: 07-05-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 30-01-2013
• Court: TRIBUNAL
• Department Lawyers: O P BATHEJA
• Assessee Lawyers: S N DIVATIA
• Keywords: Unexplained cash credit; Income from undisclosed sources; Principle of natural justice; Additional evidence
• Section: 68

Judgement Text

, , , , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD BEFORE SHRI D.K. TYAGI, JUDICIAL MEMBER AND SHRI N.S. SAINI, ACCOUNTANT MEMBER ITA NO. 255/AHD/2013 ASSESSMENT YEAR 2008-09 ITO, WARD-5(3), AHD. VS RAJALAXMI DEVELOPMENT PVT.LTD. OLD PRAKASH CINEMA COMPLEX, AHMEDABAD-380001. PAN: AABCR6976L / APPELLANT / RESPONDENT CO NO. 61/AHD/2013 ASSESSMENT YEAR 2008-09 RAJALAXMI DEVELOPMENT PVT.LTD. OLD PRAKASH CINEMA COMPLEX, AHMEDABAD-380001. PAN: AABCR6976L VS ITO, WARD-5(3), AHD. / APPELLANT / RESPONDENT REVENUE BY : SH. O.P. BATHEJA, SR. DR ASSESSEE(S) BY : SH. S.N. DIVATIA, AR ! '#$/ // / DATE OF HEARING : 07/05/2014 %&' ! '#$ / DATE OF PRONOUNCEMENT : 30/05/2014 () () () ()/ // / O R D E R PER SHRI N.S. SAINI, ACCOUNTANT MEMBER: THIS IS AN APPEAL FILED BY THE REVENUE AND CROSS- OBJECTION FILED BY THE ASSESSEE AGAINST THE ORDER OF THE CIT DATED 14.11.2012. 2. THE SOLE ISSUE INVOLVED IN THE APPEAL OF THE RE VENUE IS THAT THE CIT(A) ERRED IN LAW AND ON FACTS IN DELETING T HE ADDITION OF RS ITA NO. 255 & CO NO. 61/AHD/2 013 RAJALAXMI DVELOPMENT PVT. LTD. VS ITO,WD.-5(3), AHD . FOR A.Y. 2008-09 - 2 - 68,97,100/- MADE BY THE ASSESSING OFFICER U/S 68 OF THE ACT ON ACCOUNT OF UNVERIFIED DEPOSITORS. 3. IN THE CROSS-OBJECTION OF THE ASSESSEE, THE GRI EVANCE OF THE ASSESSEE IS THAT THE CIT(A) ERRED IN CONFIRMING ADD ITION OF RS 2,17,200/- AS UNEXPLAINED CASH CREDIT. 4. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESS ING OFFICER OBSERVED THAT THE ASSESSEE HAS DECLARED LIABILITIES TOWARDS BOOKING RECEIPT OF RS 71,14,300/-. DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSEE WAS REQUIRED TO FURNISH CONFIRMATION FROM THE PERSONS F ROM WHOM SECURITY DEPOSITS WERE RECEIVED. THE ASSESSEE FURNISHED CON FIRMATION FROM 19 PARTIES. THE TOTAL AMOUNT OF SECURITY DEPOSIT OUTS TANDING AGAINST THESE PARTIES WAS RS 24,44,050/-. THE ASSESSEE COULD NOT FURNISH CONFIRMATION OR ANY OTHER EVIDENCE TO PROVE THE CREDITWORTHINESS OF CREDITORS IN CASE OF REMAINING 39 PERSONS. THEREFORE, THE ASSESSING OFF ICER HELD THAT THE ASSESSEE FAILED TO ESTABLISH CREDITWORTHINESS OF TH E SECURITY DEPOSITORS AND MADE ADDITION OF RS 71,14,300/- BY INVOKING THE PRO VISIONS U/S 68 OF THE ACT. 5. BEFORE THE CIT(A), THE ASSESSEE VIDE LETTER DAT ED 21.03.2011 SUBMITTED AS UNDER: '4. THE LD. A.O. HAS MADE ADDITION OF RS. 7114300 BEING AMOUNT RECEIVED AS ADVANCE BOOKING FROM THE BUYERS AND CREDITED TO THE ACCOUNT OF M/S. ADINATH NON TRADING CORPORATION AS INCOME OF YOUR APPELLANT FROM UNDISCLOSED SOURCE. DURING THE COURS E OF HEARING IT WAS EXPLAINED TO LEARNED A.O. THAT YOUR APPELLANT HAS E XECUTED AN AGREEMENT FOR DEVELOPMENT OF SCHEME KNOWN AS 'RAJLA XMI COMPLEX' ON LAND OWNED BY 4 NTCS IN THE YEAR 1999. THE CONSTRUCTION OF THE SAID SCHEME WAS COMPLETED WAY BACK IN 2001 AND YOUR APPELLANT WAS ACTING AS THE AGENT OF THESE ALL 4 NTCS TO COLLECT THE BOOKING AND ALLOT THE UNITS IN THE SAID SCHEME. YOUR APPELLANT IS ONLY AN AGENT WHO IS ENTITLED TO 5% COMMISSION ON THE NET AMOUNT OF BOOKING RECEIVED FROM THE BUYERS OF UNITS AND NOT THE BOOKING AMOUNT , AND THE MONEY ITA NO. 255 & CO NO. 61/AHD/2 013 RAJALAXMI DVELOPMENT PVT. LTD. VS ITO,WD.-5(3), AHD . FOR A.Y. 2008-09 - 3 - BELONGS TO NTCS ONLY AND YOUR APPELLANT IS HOLDING THE MONEY RECEIVED ON BOOKING OF UNITS A TRUSTEE ONLY. 5. TO COOPERATE WITH THE DEPARTMENT AND RELYING ON THE ASSURANCE GIVEN BY THE LEARNED A.O., OUR AUTHORIZED REPRESENTATIVE MR ATUL DALAI, C.A. AGREED TO ACCEPT THE NOTICE IN THE BACK DATES AND SIGN THE NOTICES AS WELL AS ORDER SHEET ACCORDINGLY WITHOUT ANY GRUDGE AND DISBELIEF. IT WAS THE UNDERSTANDING WITH A.O. THAT HE WILL GIVE SOME TIME AS DUE TO DIWALI FESTIVALS THE READY MADE GARMENT MARKET REMAINED ALMOST CLOSED FOR MORE THAN 21 DAYS AND IT WILL NOT BE POSSIBLE FOR YOUR APPELLANT TO COLLECT CONFIRMATION AND PAN OF SOME THE OTHER PARTIES WHO HAVE BOOKED THE UNITS IN THE COMP LEX, AND THERE WAS ONE MORE MONTH AVAILABLE WITH A.O, TO PASS THE ORDER. THIS WAS DISCUSSED ON 29.11.2011. ACCORDINGLY, YOUR APPELLAN T HAD SUBMITTED LETTER DATED 21.11.2011 IN RESPONSE TO THE NOTICE DATED 15.11.2011 EXPLAINING FACTS AND NATURE OF TRANSACTION AND ACCO UNTING TREATMENT WITH A STATEMENT CONTAINING NAMES, ADDRESSES AND AMOUNT RE CEIVED TOGETHER WITH PAN OF SOME OF SOME THE PARTIES AND REQUESTED A.6., TO GIVE SOME MORE TIME TO ENABLE YOUR APPELLANT TO SUBMIT REQUIRED DATA. 6. BUT THE LEARNED A.O. IN HIS 2EAL TO FRAME A CASE ARID RAISE HUGE TAX DEMAND ARID NOT ADHERING TO HIS WORDS OF ASSURA NCE GIVEN TO OUR AUTHORIZED REPRESENTATIVE MR. ATUL DALAL C.A., FRAM ED AN ASSESSMENT ORDER IN THE BACK DATE OF NOVEMBER 30, 2011 AND ASK ED YOUR APPELLANT TO FILE THE COPY OF LETTER DATED 21.11.2011 WITH TH E DESK CLERK WHICH WAS STAMPED ON 1.12.2011 (COPY ENCLOSED) AND MAKE A DDITION OF ENTIRE AMOUNT OF RS. 7114300 RECEIVED FROM PARTIES AGAINST BOOKING AS INCOME OF YOUR APPELLANT FROM UNDISCLOSED SOURCE , WITHOUT TAKING ON RECORD, THE FACT THAT YOUR APPELLANT HAS SUBMITT ED DETAILS OF SOME OF THE PARTIES WORTH RS. 2434050 SUCH AS NAMES, ADD RESSES, PAN AND CONFIRMATION. IT WAS ALSO EXPLAINED TO LEARNED A.6. THAT IN CASE OF CONSTRUCTION INDUSTRY IT IS THE NORMAL PRACTICE TO ACCOUNT THE BOOKINGS IN THE BOOKS OF DEVELOPERS AND AT THE END OF THE CO MPLETION OF THE SCHEME, THE DEVELOPERS TRANSFERS AMOUNT TO THE OWNE RS OF LAND OR BUILDER. HENCE, IN THE CASE OF YOUR APPELLANT, THE BOOKING AMOUNT RECEIVED BELONGS TO ALL FOUR NTCS AND NOT TO YOUR A PPELLANT. THUS, IT APPEARS THAT THE LEARNED A.O. WITH SOME ULTERIOR MO TIVE OR PREJUDICIAL MIND HAS FRAMED THE ASSESSMENT WITHOUT CONSIDERING THE FACTS OR RECORDS SUBMITTED OR GOING INTO DETAILS OR MAKING A NY FURTHER INQUIRY ABOUT THE GENUINENESS OF THE PARTIES BUT HAS ARBITR ARILY CONSIDERED THE ENTIRE AMOUNT OF RS. 7114300 AS INCOME OF YOUR APPE LLANT FROM UNDISCLOSED SOURCE EVEN THOUGH INFORMATION FOR RS. 2434050 WERE GIVEN AND WAS KEPT ON RECORD. 7. IN VIEW OF WHAT IS STATED ABOVE, THE ACTION OF L EARNED A.O. IS UNWARRANTED AS HE HAS NEITHER MADE ANY ENQUIRY ABOU T THE IDENTITY, GENUINENESS OF THE PARTIES NOT HAD TAKEN ANY ACTION TO VERIFY THE FACTS OR THE RECORDS SUBMITTED TO HIM, BUT WITHOUT GOING INTO DETAILS OR MAKING FURTHER ENQUIRY HAS UNCEREMONIOUSLY ARRIVED AT THE CONCLUSION THAT THE ENTIRE AMOUNT IS YOUR APPELLANT'S INCOME F ROM UNDISCLOSED ITA NO. 255 & CO NO. 61/AHD/2 013 RAJALAXMI DVELOPMENT PVT. LTD. VS ITO,WD.-5(3), AHD . FOR A.Y. 2008-09 - 4 - SOURCE. BESIDES, IN CASE OF CANCELLATION OF BOOKING S, YOUR APPELLANT HAS MADE PAYMENT THROUGH ACCOUNT PAYEE CHEQUES FOR WHIC H CONFIRMATION WITH PAN WERE SUBMITTED DURING THE COURSE OF HEARIN G. 8. THUS THE ACTION OF LEARNED A.O IS AGAINST THE PR INCIPLE OF NATURAL JUSTICE, AS HAS BEEN HELD IN CASE OF K.K. STEELS (I NDIA) (P) LTD. V. ACIT (1999) 71 ITD 198,; 221 (ASR) THAT THE A.O. COULD H AVE SEND THE INTIMATION TO CONCERNED ITO AND IT WAS FOR THE CONC ERNED ITO TO TAKE NECESSARY ACTION REGARDING CREDIT. THE APPLICANT HA D SUPPLIED INFORMATION REGARDING PAN, IDENTITY AND ADDRESS OF THE PARTIES. THERE WAS NO JUSTIFICATION IN MAKING ADDITION OF CASH CRE DIT. EVEN IN CASE OF VEER METALS V CIT (1995) 51 TTJ (DEL) IT WAS HELD T HAT WHERE THE ASSESSEE FURNISHES THE INFORMATION SUCH AS NAMES, A DDRESSES, CONFIRMATIONS & PAN, IT WAS FOR A.O TO PURSUE THE V ERIFICATION ON HIS OWN. THE A.O, WAS, THEREFORE, IN ERROR IN MAKING TH E IMPUGNED ADDITION U/S.68. REVENUE HAS ALLEGED THAT THE AMOUN T INVOLVED IS ASSESSEE'S OWN FUND BUT NOTHING HAS BEEN DONE TO SU BSTANTIATE THE ALLEGATION, WITHOUT PROVING WITH ANY EVIDENCE, MUCH LESS, POSITIVE EVIDENCE, HENCE, ADDITION U/S.68 IS UNWARRANTED. IT WAS HELD IN THE CASE OF ACIT V RADHEY SYAM BANSAL, (2000) 68 TTJ (R AJKOT) 136, THAT WHEN THE CONFIRMATORY LETTER ARE FILED AND THE IDEN TITY OR CREDITORS ARE KNOWN, IT IS THE DUTY OF A.O. TO SUMMON THE CREDITO RS AND TO RECORD THEIR STATEMENT. THE ONUS IS ON THE DEPARTMENT TO P ROVE THAT THE DEPOSITS WERE NOT GENUINE. THIS ONUS HAS NOT BEEN D ISCHARGE BY THE A.O. AND HENCE THE ADDITION HAS BEEN MADE WITHOUT M AKING ANY PROPER ENQUIRIES. 9. IN VIEW OF WHAT IS STATED ABOVE, IT APPEARS THAT NOWHERE A.O. HAS PUT ON RECORD THAT INFORMATION ABOUT CREDITORS SUCH AS NAMES, ADDRESSES, CONFIRMATION AND PAN ARE NOT GENUINE, BU T ARE BOGUS, AS WELL AS CONFIRMATION OF ACCOUNT BY M/S. ADINATH NON TRADING CORPORATION IN NOT GENUINE AND WITHOUT PLACING ON R ECORD ANY CONCRETE EVIDENCE OR REASONS FOR TREATING THE AMOUNT RECEIVE D AS ADVANCE FOR BOOKING FROM CUSTOMERS BEING BOGUS, AND TREATING TH E SAME AS INCOME OF YOUR APPELLANT FROM UNDISCLOSED SOURCE IS NOT JUSTIFIED AND IS ONLY ON PRESUMPTION/ASSUMPTION, HENCE, YOUR APPELLA NT REQUEST YOUR HONOUR TO DELETE THE ADDITIONS. 6. THE CIT(A) OBSERVED THAT THE ASSESSEE DURING TH E APPEAL PROCEEDINGS FURNISHED CONFIRMATION FROM ALL THE PER SONS FROM WHOM SECURITY DEPOSITS WERE RECEIVED. AS MANY OF THE CONFIRMATIO NS WERE NOT FILED DURING THE COURSE OF ASSESSMENT PROCEEDINGS AS PER PROVISI ONS OF RULE 46A OF THE I.T. RULES, 1962, THESE EVIDENCES WERE ACCEPTED FOR THE SAKE OF SUBSTANTIAL JUSTICE. THESE ADDITIONAL EVIDENCES WERE FORWARDED TO THE OFFICE OF THE ASSESSING OFFICER FOR FURTHER VERIFICATION. THE AS SESSING OFFICER VIDE LETTER ITA NO. 255 & CO NO. 61/AHD/2 013 RAJALAXMI DVELOPMENT PVT. LTD. VS ITO,WD.-5(3), AHD . FOR A.Y. 2008-09 - 5 - DATED 11.10.2012 SUBMITTED A DETAILED REMAND REPORT AFTER EXAMINING THE ADDITIONAL EVIDENCES. HE OBSERVED THAT THE CONTENT S OF THE REMAND REPORT WERE AS UNDER: 'KIND REFERENCE IS INVITED TO YOUR LETTER NO. CIT(A)-XI/REMAND REPORT/2011-12 DATED 22.11.2011 DIRECTING A REMAND REPORT IN THE ABOVE MENTIONED CASE. THE ONLY ISSUE DIRECTED FOR I NVESTIGATION WAS ADDITION OF 71,14,300 MADE TO THE RETURNED TOTAL INCOME AS 'INCOME FROM UNDISCLOSED SOURCES'. 2. THE FACTS OF THE CASE ARE THAT THE ASSESSEE HAD SHOWN IN ITS BALANCE SHEET, LIABILITY OF A SUM OF 71,14,300 AS BOOKING AMOUNT IN RESPECT OF 48 PROPERTIES (SHOPS/OFFICES ETC) FROM A BOUT 38 PERSONS (NEITHER PROPERTY SPECIFICATION NOR NAME OF THE PER SON WHO BOOKED FOR 2,17,200 MENTIONED). IN THE COURSE OF SCRUTINY ASSESSMENT PROCEEDINGS, THE ASSESSEE COULD FURNISH CONFIRMATIO N ETC. FROM 19 PARTIES FOR 24,34,050 AND FOR THE BALANCE OF '46,80 ,250 ASSESSEE HAD FURNISHED THE NAMES OF 30 PERSONS WITHOUT PAN AND C ONFIRMATION. THE A.O. TREATED THE ENTIRE AMOUNT AS INCOME FROM UNDISCLOSE D SOURCE AND ADDED 71,14,300 TO THE TOTAL INCOME OF THE ASSESSEE . 3. FOR CARRYING OUT INDEPENDENT INQUIRIES, MY PREDECESSOR HAD ISSUED SUMMONS TO ALL THE 38 PERSONS WHOSE NAME APP EARED IN THE LIST REQUESTING THEM TO CONFIRM THE BOOKING ADVANCE. OUT OF THESE, 17 PERSONS HAD REPLIED THROUGH POST ARID CONFIRMED THE BOOKING ADVANCE. IN 13 CASES, THE SUMMONSES SENT BY REGISTERED POST WERE RECEIVED BACK UNDELIVERED FOR; CERTAIN REASONS. IN THE REMAI NING 8 CASES, THOUGH THE SUMMONS WERE SERVED PROPERLY BUT THERE W AS NO RESPONSE FROM THESE PERSONS. 4. THEREFORE THE WARD INSPECTOR WAS DIRECTED TO ENQ UIRE INTO THE GENUINENESS OF BOOKING AMOUNT IN RESPECT OF 21 PERS ONS (13+8). THE WARD INSPECTOR COULD CONTACT ONLY 5 PERSONS OUT OF THESE REMAINING 21 PERSONS. THE INSPECTOR HAS REPORTED THAT THESE FIVE PERSONS HAVE CONFIRMED TO HAVE GIVEN BOOKING AMOUNT. THE INSPECT OR HAS FURTHER REPORTED THAT THE SYSTEM PREVAILING THEREIN IS THAT THE SHOPS ARE LET OUT THROUGH BROKERS AND THE BROKERS COLLECT THE REN T ON BEHALF OF OWNERS. THE PRESENT TENANTS ARE NOT AWARE ABOUT THE IDENTITY OR THE WHEREABOUTS OF THE OWNERS AS THEY KNOW ONLY THE BRO KER. DESPITE HIS BEST EFFORTS, HE COULD CONTACT ONLY FIVE OF THE PAR TIES SO FAR. THUS IN ALL, 22 PERSONS WHO HAVE BEEN CONTACTED, HAVE CONFIRMED TO HAVE GIVEN ADVANCE FOR BOOKING THE PROPERTY.' 7. THEREAFTER, THE CIT(A) CONFRONTED THE ASSESSEE WITH THE REMAND REPORT ON 02.11.2012 IN RESPONSE TO WHICH THE ASSES SEE SUBMITTED A LETTER DATED 02.11.2012 AS A REJOINDER, THE CONTENTS OF WH ICH WERE AS UNDER: ITA NO. 255 & CO NO. 61/AHD/2 013 RAJALAXMI DVELOPMENT PVT. LTD. VS ITO,WD.-5(3), AHD . FOR A.Y. 2008-09 - 6 - 'WITH REFERENCE TO THE ABOVE, THE APPELLANT BEGS TO SUBMIT THAT IT HAS BEEN FURNISHED ON 2.11.2012 WITH THE COPY OF REMAND REPORT DT. 11.10.2012 SUBMITTED BY ITO,WD-5(3), ABAD IN CONNEC TION WITH THE ADDITIONAL EVIDENCE SUBMITTED BY THE APPELLANT DURI NG THE COURSE OF APPELLATE PROCEEDING. 2.1 ON GOING THROUGH THE AFORE SAID REMAND REPORT, IT IS NOTICED THAT AO HAS NOT DISPUTED ABOUT THE ADDITIONAL EVIDENCE A DMITTED IN THE APPELLATE PROCEEDINGS. 2.2 PERUSAL OF PAR A- 3 & 4 OF THE REMAND REPORT SHOWS THAT AO HAD CARRIED OUT INDEPENDENT ENQUIRIES BY WAY OF DEPUTIN G WARD INSPECTOR IN RESPECT OF 21 PARTIES AND HE COULD CONTACT ONLY FIVE, WHEREAS THE OTHERS BEING TENANT OF THE SHOPS TAKEN ON RENT THRO UGH BROKERS WERE NOT AWARE ABOUT ITS OWNER. THE APPELLANT SUBMITS TH AT THE AO HAS CONFIRMED THAT IN ALL 22 PERSONS WHO WERE CONTACTED HAD CONFIRMED TO HAVE GIVEN ADVANCE FOR BOOKING THE PROPERTY SO THAT THE SAME DOES NOT CALL FOR ANY COMMENTS FROM THE APPELLANT. IT MAY BE NOTED THAT WHEN PREDECESSOR AO CONDUCTED ENQUIRY, 17 PERSONS HAD ALREADY CONFIRMED BOOKING ADVANCE WHEREAS OUT OF REMAINING 21 PERSONS THE SUMMONS WAS SERVED PROPERL Y BUT NO RESPONSE WAS RECEIVED IN CASE OF 8 PERSONS AND THE SUMMONS WERE RECEIVED BACK IN CASE OF 13 PERSONS. THEREFORE, THE PRESENT AO CARRI ED OUT ENQUIRY IN RESPECT OF SAID 21 PERSONS OUT OF WHOM, HE COULD CONTACT 5 PERSONS WHEREAS REMAINING WERE THE TENANT S OF THE SHOP. 2.3 THUS, THE POSITION EMERGING AS A RESULT OF ENQUIRIES MADE BY AO CAN BE SUMMARIZED AS UNDER: A) PERSONS REPLIED THROUGH POST AND CONFIRMED BOOKING ADVANCE - 17 PERSONS B) WARD INSPECTOR ENQUIRY CONFIRMED - 5 PERSONS THE BOOKING ADVANCE C) PERSONS COULD NOT BE CONTACTED - 16 PERSONS DUE TO SHOPS WERE LET OUT IN VIEW OF ABOVE, IT IS SUBMITTED THAT THE CONTENTI ON OF THE APPELLANT THAT THE IMPUGNED AMOUNT WAS BOOKING ADVANCE HAS BE EN FULLY PROVED. APART FROM IT, IT WILL BE APPRECIATED THAT THE APPELLANT HAS GIVEN COMPLETE DETAILS BY WAY OF IDENTITY PROOF I.E . PAN OR DRIVING LICENSE OR ELECTION CARD AS WELL AS ADDRESS AND IN MANY CASES CONFIRMATION OF ACCOUNT OF THE PARTIES UNDER DISPUT E (REFER TO PAGAE- 44- 143 OF PAPER BOOK) SO THAT THE BURDEN CAST UPON THE APPELLANT WAS FULLY DISCHARGED. THE APPELLANT MAINTAINS THAT THE IMPUGNED AMOUNT BEING BOOKING ADVANCE TOWARDS SHOP/FLAT, THE SAME W AS NOT A CASH CREDIT U/S. 68 SO AS TO BE TREATED AS UNEXPLAINED I NCOME. THEREFORE, THE ADDITION DESERVES TO BE DELETED.' ITA NO. 255 & CO NO. 61/AHD/2 013 RAJALAXMI DVELOPMENT PVT. LTD. VS ITO,WD.-5(3), AHD . FOR A.Y. 2008-09 - 7 - 8. THEREAFTER, THE CIT(A) CONFIRMED THE ADDITION O F RS 2,17,200/- AND DELETED THE BALANCE AMOUNT OF ADDITION OF RS 68 ,97,100/- AND WHILE DOING SO, OBSERVED AS UNDER: 4.4 I HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTIONS. I HAVE ALSO PERUSED THE EVIDENCES PLACED ON RECORD. I HAVE ALSO GONE THROUGH THE CASE LAWS RELIED UPON BY THE APPELLANT. IT IS SEEN THAT THE APPELLANT HAS RECEIVED SECURITY DEPOSITS OF RS. 71,14,300/- FROM 48 PERSONS. DURING THE ASSESSMENT PROCEEDINGS THE APPELLANT HAS FILED CONFIRMATIONS FROM 19 PARTIES. THESE PARTIES HAD CONFIRMED SECURITY DEPOSIT OF RS. 24,34,0507-. THIS FACT IS DULY ACKNOWLEDGED BY THE A.O. IN THE ASSESSMENT ORDER. DURING THE APPELLATE PROCE EDINGS THE APPELLANT HAS FURNISHED CONFIRMATIONS FROM 48 PARTIES ALONG WITH PROOFS OF IDENTITY LIKE COPIES OF PAN CARD, COPY OF ELECTION CARD, COPY OF DRIVING LICENSE ETC. PERUSAL OF THE COPIES OF ACCOUNTS OF THESE PERSONS REVEALS THAT THE SECURITY DEPOSITS WERE RECEIVED THROUGH BANKING CHANNELS. SINCE THE APPELLANT HAS FILED SUFFICIENT EVIDENCES TO PROVE IDENTITY OF THE CREDITOR, GENUINENESS OF TRANSACTIO N AND CREDITWORTHINESS OF THE CREDITOR, ACCORDINGLY I AM INCLINED TO AGREE WITH THE CONTENTIONS OF LD. A. R. 4.5 THE FACTS AVAILABLE ON RECORD CLEARLY PROVE THAT THE APPELLANT HAS DISCHARGED HIS PRIMARY ONUS OF ESTABLISHING IDENTITY, GENUINENESS OF TRANSACTION AND THE CREDITWORTHINESS OF THE CRED ITOR. SINCE THE' APPELLANT HAS DISCHARGED THE INITIAL ONUS CAST UPON HIM BY THE PROVISIONS OF SEC.68, IT IS FOR THE REVENUE TO DISCHARGE THEIR BURDEN 6Y CONDUCTING FURTHER ENQUIRIES. SINCE THE A.O. HAS NOT CONDUCTED FURTHER ENQUIRIES, ACCORDINGLY, ADDITION MADE U/S.68 IS UNWARRANTED. RELIANCE IN THIS REGARD IS MADE ON SWAGAT SYNTHETICS PVT. LTD. (2002) 77 TTJ 987 (JODH.). IN THE INSTANT CASE THE APPELLANT HAS FURNISHED CONFIRMED COPIES OF ACCOUNTS FROM THE DEPOSITORS AND THESE DEPOSITS ARE APPEARING IN THE BOOKS OF ACCOUNTS OF THE APPELLANT. ACCORDINGLY, I HOLD THAT THE ADDITION MADE U/S.68 IS UNTENABLE. FURTHER RELIANCE IN THIS REGARD IS MADE ON ACIT VS GOVINDRAM AGARWAL (2001) 76 ITD 120 (CAL) TRIB. THE APPELLANT WILL GET BENEFIT OF THE RATIO OF FOLLOWING CASES 1. VTR MARKETING VS ACIT 1 SOT 205 (KOL). 2. ROHINI BUILDERS VS DCIT 76 TTJ 521 (AHD). RECENTLY THE HON'BLE GUJARAT HIGH COURT IN THE CASE OF CIT VS RANCHOD JIVABHAI NAKHAVA 208 TAXMAN 35 HAS HELD THAT ONCE THE ASSESSEE HAS DISCLOSED PAN OF THE CREDITORS, IT IS A.O.'S DUTY TO ASCERTAIN FROM ASSESSING OFFICERS OF THE LENDERS WHETHER THESE LOA NS ARE REFLECTED IN THEIR BALANCE SHEET. 4.6 AS MENTIONED ABOVE, THE APPELLANT HAS FURNISHED CONFIRMATIONS IN RESPECT OF 48 PERSONS WHO HAD MADE SECURITY DEPOSIT OF FTE ; 68,97,100/-. IN VIEW OF ABOVE FACTS, I AM OF THE CONSIDERED VIEW ITA NO. 255 & CO NO. 61/AHD/2 013 RAJALAXMI DVELOPMENT PVT. LTD. VS ITO,WD.-5(3), AHD . FOR A.Y. 2008-09 - 8 - THAT THE APPELLANT HAS EXPLAINED SOURCE OF SECURITY DEPOSITS OF RS.68,97,100/- AND TO THIS EXTENT ADDITION MADE BY THE A.O. U/S.68 IS UNTENABLE. ACCORDINGLY, THE A.O. IS DIRECTED TO DELETE ADDITION OF RS.68,97,100/-. THE EVIDENCES PLACED ON RECORD FURTHER REVEALS THAT THE APPELLANT COULD NOT FURNISH CONFIRMATIONS FROM THE PARTIES FROM WHOM DEPOSITS OF RS. 2,17,200/- WAS RECEIVED. SINCE THE APPELLANT HAS FAILED TO DISCHARGE ONUS CAST UPON HIM BY THE PROVISIONS OF SEC.68 IN RESPECT OF DEPOSITS OF RS. 2,17,200/-, ACCORDINGLY, I HOLD THAT THE ADDITION TO THE EXTENT OF RS. 2,17,200/- IS JUSTIFIED AND ADDITION TO THIS EXTENT IS CONFIRMED. THIS GROUND OF APPEAL IS PARTLY ALLOWED. 5. THE LAST GROUND OF APPEAL IS RESIDUARY IN NATURE. THE ASSESSEE HAS NOT AVAILED THIS GROUND OF APPEAL. ACCORDINGLY THIS GROUND OF APPEAL IS TREATED AS DISMISSED. 9. THE DR RELIED ON THE ORDER OF THE ASSESSING OFF ICER. HE ALSO FILED BEFORE US A LETTER FROM THE ASSESSING OFFICER BEARI NG NO. WD-5(3)/RDPL/ITA NO. 255/2013-14 DATED 14.08.2013 STATING THAT IN TH E REMAND REPORT FILED BY THE ASSESSING OFFICER, THE ASSESSING OFFICER HAS MERELY STATED THAT 17 PERSONS REPLIED THROUGH POST AND CONFIRMED BOOKING ADVANCES, WARD INSPECTOR INQUIRY CONFIRMED THE BOOKING ADVANCE FRO M 5 PERSONS AND 16 PERSONS COULD NOT BE CONTACTED DUE TO SHOPS WERE LE T OUT. THE NAMES OF THE PERSONS AND AMOUNT WERE NOT SPECIFICALLY STATED IN THE REMAND REPORT. HE SUBMITTED THAT IN THIS LETTER, THE ASSESSING OFFICE R HAS IDENTIFIED PERSONS BY NAME AS WELL AS AMOUNT RECEIVED AS SECURITY DEPOSIT FROM THEM. THE SAID LETTER READS AS UNDER: GOVERNMENT OF INDIA INCOME-TAX DEPARTMENT INCOME-TAX OFFICER, WARD 5(3), AHMEDABAD 4 TH FLOOR, B-403, PRATYAKSH KAR BHAVAN, AMBAWADI, NR. PANJRAPOLE, AHMEDABAD. PH-26304839, E-MAIL- AHMEDABAD_ITO-W5-3@ INCOMETAX.GOV.IN F. NO.WD-5(3)/RDPL/ITA NO.255/2013-14 DATE: 14/08 /2013 THE SENIOR DEPARTMENTAL REPRESENTATIVE, A-BENCH, ITAT-IV, 2 ND FLOOR, NEPTUNE TOWER, OPP. NEHRU BRIDGE, ASHRAM ROAD, AHMEDABAD ITA NO. 255 & CO NO. 61/AHD/2 013 RAJALAXMI DVELOPMENT PVT. LTD. VS ITO,WD.-5(3), AHD . FOR A.Y. 2008-09 - 9 - SIR, SUB: ITA N0.255/AHD/2013 IN THE CASE OF M/S RAJLAXM I DEVELOPMENT (P) LTD - A.Y.2008-09-REG. KINDLY REFER TO YOUR LETTER NO. SR. D.R./ITAT-IV/RD PL/'A' BENCH/2013-14 DATED 12.08.2013 ON THE SUBJECT MENTI ONED ABOVE. 2. THE DESIRED INFORMATION IS AS UNDER IN SEP ARATE TABLES: NAMES OF THE PERSONS AND THE AMOUNT OF ADVANCE RECEIVED FROM 17 PERSONS WHO COM PLIED WITH SUMMONS AND REPLIED THROUGH POST AND CONFIRMED THE BOOKING ADVANCE. SR. NO. NAME OF THE PARTY AMOUNT OF BOOKING ADVANCE 1 SAPNABEN BHAGWANDAS UDASI 223750 2 DHRAMDAS POHUMAL BACHANI 93000 3 RAKBAJI TARAJI PADHIYAR 120000 4 ASHOK KUMAR RAKBAJI PADHIYAR 120000 5 SHANTIBAI TILOKCHANDRA BHANDARI 131400 6 MASRAJI RAMAJI DARJI 74000 7 SURESHKUMAR KUNDANMAL JAIN 238750 8 SAPNABEN BHAGWANDAS UDASI 200000 9 HEMANABEN DEVKUMAR GIYAMALANI 231250 10 MANOJKUMAR KISHANCHAND RAMCHANDANI 204800 11 CHENTAN RATJLAL SOLANKI 202650 12 ATULKUMAR BABULAL SOLANKI 205800 13 SAPNA DINESHCHANDRA BHANDARI 193400 14 THANDRAKALA NARESHCHANDRA BHANDARI 151200 15 SHANTIBAI TILOKCHANDRA BHANDARI 134600 16 HEMANABEN DEVKUMAR GIYAMALANI 231250 17 KAMLESH POHUMAL BACHANI 168000 TOTAL 2923850 NAMES OF THE PERSONS AND THE AMOUNT OF ADVANCE RECE IVED FROM 13 PERSONS TO WHOM SUMMONS U/S 131(1) WERE ISSUED A ND RECEIVED BACK UNDELIVERED. THE REASONS OF NON SERVI CE OF THE NOTICE IS MENTIONED AS 'LEFT' IS ALL THE CASES SR. NO. NAME OF THE PARTY AMOUNT OF BOOKING ADVANCE 1 ASHISH VINODCHANDRA SHAH 72000 2 AGARWAL AVANI ASHOK KUMAR 169600 3 PARVATIBEN RUCHIRAM SAVLANI 112500 4 RAJESH KHANCHAND RAJVANI 112500 ITA NO. 255 & CO NO. 61/AHD/2 013 RAJALAXMI DVELOPMENT PVT. LTD. VS ITO,WD.-5(3), AHD . FOR A.Y. 2008-09 - 10 - 5 SHYAMLAL RUPCHAND PARVANI 233750 6 CHIRAG RAMESHCHANDRA PATWA 31650 7 HETAL MAHENDRA MEHTA 159200 8 SARAWATIBEN ISHWARLAL DAIYA 90600 9 LAJWANTI HEMANSHU PARMAR 90600 10 MANOHARLAL DULHANOMAL PRIANI 323400 11 KISHOR R. PIRTHIYANI 154800 12 CHETAN JASWANTLAL SHAH 83200 13 DAHYIBEN PATEL 254800 TOTAL 1888600 THE NAMES OF THE PERSONS AND BOOKING ADVANCE FROM 8 PERSONS TO WHOM SUMMONS WERE SERVED PROPERLY BUT THERE WAS NO RESPONSE FROM THESE PERSONS. SR. NO. NAME OF THE PARTY AMOUNT OF BOOKING ADVANCE 1. SANJAY V. DESAI 195000 2. PRAKASH UDAVDAS RACHLANI 245000 3. PRAVIN R. PADHIYAR 236250 4. LATTA SHYAMAL PRARANI 226250 5. JAYKISHAN SAKARLAL AMARNANI 461250 6. PRADEEP S. BALANI 231250 7. MEENA SHAILESHKUMAR SHAH 110250 8. ANILKUMAR C. SHAH 140000 TOTAL 1845250 THE NAMES OF 5 PERSONS AND BOOKING ADVANCE FROM THEM WHOM CONFIRMED TO HAVE GIVEN THE BOOKING AMOUNT AS PER T HE REPORT OF THE INSPECTOR. SR. NO. NAME OF THE PARTY AMOUNT OF BOOKING ADVANCE 1. SHAH ASHISH VINODCHANDRA 72000 2. AGARWAL AVANI ASHOKKUMAR 91200 3. SHYAMLAL RUPCHAND PARVANI 233750 4. MANOHARLAL DULHANOMAL PRIANI 323400 5. AGARWAL AVANI ASHOKKUMAR 78400 TOTAL 798750 ITA NO. 255 & CO NO. 61/AHD/2 013 RAJALAXMI DVELOPMENT PVT. LTD. VS ITO,WD.-5(3), AHD . FOR A.Y. 2008-09 - 11 - 3. CASE RECORD ACCOMPANIES. (IN THREE VOLUMES) YOURS FAITHFULLY (R.C. YADAV) INCOME-TAX OFFICER WARD-5(3), AHMEDABAD COPY TO: THE ADDL. CIT, RANGE-5, AHMEDABAD. 10. HE SUBMITTED THAT AS WILL BE SEEN FROM THE LET TER OF THE ASSESSING OFFICER FILED THAT THE 17 PERSONS COMPLIE D WITH SUMMONS AND REPLIED THROUGH POST AND CONFIRMED BOOKING ADVANCE TOTALING TO RS 29,23,850/- WHICH WAS DELETED BY THE LD. CIT(A). H E FURTHER SAID THAT IT WILL BE OBSERVED THAT OUT OF THE 13 PERSONS TO WHOM SUMM ONS U/S 131(1) WERE ISSUED WERE RECEIVED BACK UNDELIVERED, THE INSPECTO R VERIFIED FROM 5 PERSONS NAMELY ASHISH VINODCHANDRA SHA, SH AGARWAL AVANI AS HOK KUMAR, SHYAMLAL KHANCHAND RAJVANI AND LAJWANTI HEMANSHU PARMAR WHO CONFIRMED GIVING SECURITY DEPOSITS OF RS 7,98,758/- TO THE ASSESSEE AND ON THE BASIS OF THIS TEST-CHECK, THE CIT(A) DELETED THE BALANCE AMOUNT O F ADVANCE RECEIVED OF RS 18,88,600/- FROM ALL THE 13 PERSONS. HE SUBMITTED THAT IN THE CASE OF 8 PERSONS, SUMMONS WERE PROPERLY SERVED BUT NO RESPON SE WAS RECEIVED FROM THE SAID PERSONS. THE AMOUNT RECEIVED FROM THESE P ERSONS TOTALLED TO RS 18,45,250/-. SINCE THE SUMMONS WERE DULY SERVED ON SUCH PERSONS, THEREFORE THE CIT(A) DELETED THE AMOUNT OF RS 18,45 ,250/- RECEIVED FROM THE SAID PERSONS. THE DR FURTHER SUBMITTED THAT IN RESPECT OF THE PERSONS FROM WHOM AMOUNT OF RS 2,17,200/- WAS RECEIVED, THE ASSESSEE COULD NOT FURNISH CONFIRMATIONS OF DEPOSITS RECEIVED FROM THE M AND THEREFORE, THE ASSESSEE FAILED TO DISCHARGE THE ONUS CAST UPON HIM UNDER THE PROVISIONS OF SECTION 68 OF THE ACT AND HENCE, HE SUSTAINED ADDIT ION OF RS 2,17,200/-. THE DR CANDIDLY ADMITTED DURING THE COURSE OF HEARI NG THAT THE APPEAL OF THE REVENUE IS LIABLE TO BE DISMISSED AND THERE WAS NO MATERIAL TO SHOW THAT ANY OF THE DEPOSITS OUT OF RS 68,97,100/- WAS NOT G ENUINE. ITA NO. 255 & CO NO. 61/AHD/2 013 RAJALAXMI DVELOPMENT PVT. LTD. VS ITO,WD.-5(3), AHD . FOR A.Y. 2008-09 - 12 - 11. ON THE OTHER HAND, THE LD. AR SUPPORTED THE OR DER OF THE CIT(A) DELETING THE ADDITION OF RS 68,97,100/- AND SUBMITT ED THAT THE ADDITION OF RS 2,17,200/- WAS RIGHTLY CONFIRMED BY THE 68,97,10 0/- AS THE ASSESSEE COULD NOT FILE ANY DETAILS OR EVIDENCES IN RESPECT OF THIS AMOUNT. 12. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED T HE ORDERS OR LOWER AUTHORITIES AND MATERIAL AVAILABLE ON RECORD. IN THE INSTANT CASE, THE ASSESSEE HAS CLAIMED TO HAVE RECEIVED RS 71,14,300/ - AS SECURITY DEPOSITS FROM 38 PERSONS. THE ASSESSING OFFICER IN THE ASSE SSMENT ORDER OBSERVED THAT OUT OF THE 38 PERSONS, ONLY CONFIRMATIONS OF 1 9 PERSONS INVOLVING AMOUNT OF RS 24,44,050/- COULD BE FURNISHED BY THE ASSESSEE. HE, THEREFORE, ADDED THE ENTIRE AMOUNT OF RS 71,14,300/ - TO THE INCOME OF THE ASSESSEE U/S 68 OF THE ACT. 13. ON APPEAL, THE ASSESSEE FILED ADDITIONAL EVIDE NCES BEFORE THE CIT(A) IN RESPECT OF WHICH REMAND REPORT WAS CALLED FROM THE ASSESSING OFFICER. AFTER CONSIDERING THE MATERIALS AND REMAN D REPORT, THE CIT(A) OBSERVED THAT OUT OF RS 71,14,300/-, RS 68,97,100/- WAS RECEIVED BY THE ASSESSEE THROUGH BANKING CHANNELS AND THE SAME WAS SUPPORTED BY THE BANK STATEMENT OF THE PAYEE. THE IDENTITY OF THE P AYEE WAS ALSO ESTABLISHED BY FURNISHING COPY OF PAN CARD, VOTER ID CARD ETC. THEREFORE, ON BEING SATISFIED THAT THE DEPOSITS OF RS 68,97,100/- WERE GENUINE, THE CIT(A) DELETED THE ADDITION TO THE EXTENT OF RS 68,97,100/ -. IN RESPECT OF BALANCE AMOUNT OF RS 2,13,200/-, THE CIT(A) OBSERVED THAT T HE ASSESSEE COULD NOT FURNISH CONFIRMATION FROM THE PARTIES FROM WHOM DEP OSITS WERE RECEIVED AND THEREFORE, CONFIRMED THE ADDITION TO THE EXTENT OF RS 2,14,200/-. 14. BEFORE US, THE REVENUE IS IN APPEAL IN RESPECT OF DELETION OF RS 68,97,100/- AND THE ASSESSEE IS IN CROSS-OBJECTION FOR CONFIRMATION OF ADDITION OF RS 2,17,100/-. ITA NO. 255 & CO NO. 61/AHD/2 013 RAJALAXMI DVELOPMENT PVT. LTD. VS ITO,WD.-5(3), AHD . FOR A.Y. 2008-09 - 13 - 15. THE DR COULD NOT POINT OUT ANY SPECIFIC ERROR IN THE FINDING OF THE CIT(A). THE DR COULD NOT POINT OUT ANY CASE WHERE THE IDENTITY OR GENUINENESS OF THE TRANSACTION WAS NOT ESTABLISHED BY THE ASSESSEE AND THE ADDITION WAS DELETED BY THE CIT(A). FURTHER, THE D R COULD NOT BRING ANY MATERIAL ON RECORD TO SHOW THAT ANY OF THE DEPOSITS OUT OF RS 68,97,100/- WAS NOT GENUINE. 16. THE AR ALSO ADMITTED THAT THE CROSS-OBJECTION FILED BY THE ASSESSEE IS LIABLE TO BE DISMISSED AND HAS BROUGHT NO MATERIAL BEFORE US TO CONTROVERT THE FINDINGS OF THE CIT(A). 17. IN THE ABOVE CIRCUMSTANCES, WE DO NOT FIND ANY GOOD REASON TO INTERFERE WITH THE ORDER OF THE CIT(A). THEREFORE, THE APPEAL OF THE REVENUE AS WELL AS CROSS-OBJECTION OF THE ASSESSEE, BOTH AR E DISMISSED. ORDER PRONOUNCED IN THE COURT ON FRIDAY, THE 30 TH OF APRIL, 2014 AT AHMEDABAD. SD/- SD/- (D.K. TYAGI) JUDICIAL MEMBER (N.S. SAINI) ACCOUNTANT MEMBER AHMEDABAD; DATED 30/05/2014 GHANSHYAM MAURYA, SR. P.S.