M/s. Crescent Control Pvt. Ltd., Roorkee V. ACIT, Uttrakhand

ITA 2614/DEL/2012

• Counselvise Citation: 261420114 RSA 2012
• Duration Of Justice: 3 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-09-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 23-08-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 30-05-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SATPAL SINGH
• Assessee Lawyers: DEVINA GUPTA
• Keywords: Unexplained cash credit; Income from undisclosed sources; Opportunity of being heard
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH SMC: NEW DELHI BEFORE SHRI S.V. MEHROTRA, ACCOUNTANT MEMBER ITA NO. 2614/DEL/2012 ASSESSMENT YEAR: 2006-2007 CRESCENT CONTROL PVT. LTD., 168, MAKTOOLPURI, ROORKEE. PAN NO. AACCC3678H VS. ACIT, CIRCLE HARIDWAR. UTTRAKHAND. (APPELLANT) (RESPONDENT) APPELLANT BY : MS. DEVINA GUPTA, CA RESPONDENT BY : SH. SATPAL SINGH, SR. DR DATE OF HEARING : 23/08/2012 DATE OF PRONOUNCEMENT : 28/09/2012 O R D E R THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER OF LD. CIT(A) DATED 11/01/2012 FOR A.Y. 2006-07. 2. THE ASSESSING OFFICER NOTICED THAT THERE WERE CR EDITORS FOR PURCHASES AND FOR EXPENSES AGGREGATING TO RS. 20,72,948/-. H E HAD REQUIRED THE ASSESSEE TO PROVIDE NAMES AND COMPLETE ADDRESSES OF ALL THE PARTIES THE BALANCE AGAINST WHOM WAS MORE THAN RS. 50,000/- ALO NG WITH CORRESPONDING BILLS OF ALL THE PARTIES, PAYMENT DET AILS AND REASONS FOR NON- PAYMENT. 3. AFTER CONSIDERING THE DETAILS FURNISHED BY ASSES SEE, THE AO MADE AN ADDITION OF RS. 1,38,452/- OBSERVING IN PARA 7.2 AS UNDER: - 7.2 IN RESPONSE TO ABOVE NOTICE, CONFIRMATION OF CERTAIN PARTIES HAVE BEEN FURNISHED WHICH HAVE ITA NO. 2614/D/2012 2 BEEN DULY CONSIDERED. THERE ARE CERTAIN CREDITORS WHICH WERE HAVING OPENING BALANCE OF LAST YEAR, HENCE THEY WERE ALLOWED IN THIS YEAR. BUT REGARDING FOUR CREDITORS I.E. (I) B.K. VINOD & CO. PVT. LTD. DELHI AMOUNTING TO RS. 48690/- (II) CHUNI LAL KEVAL KRISHNA DELHI, RS. 24960/-, (III) S.K. ENGG. WORKS GHAZIABAD RS. 22624/-, AND (IV) S.R. ELECTRICALS DELHI, RS. 42178/- (TOTALING TO RS. 138452/-) ASSESSEE FAILED TO FURNISH THE CONFIRMATION LETTER COMPLETE ADDRESSES ETC., THEREFORE, SAME HAVE BEEN CONSIDERED BOGUS. SECTION 68 OF THE I.T. ACT, 1961 PUTS TRIPLE ONUS F OR PROVIDING IDENTITY, CREDITWORTHINESS AND GENUINENESS OF TRANSACTION WITH RESPECT TO CREDIT ENTRIES TO THE SATISFACTION OF ASSESSING OFFICER. AS THE ASSESSEE FAILED TO PROVE THE SAME, ADDITION OF RS. 138452/- IS BEING MADE UNDER THE HEAD UNEXPLAINED CASH CREDITS. 4. LD. CIT(A) HAD CALLED FOR A REMAND REPORT ON THE WRITTEN SUBMISSIONS. HE NOTICED THAT IN THE REMAND REPORT, THE AO OBSERV ED THAT THE ASSESSEE WAS SPECIFICALLY ASKED TO SUBMIT EVIDENCE IN SUPPOR T OF VARIOUS CLAIMS AND THE DATE OF SUCH COMPLIANCE WAS FIXED FOR 05/10/201 1. HOWEVER, NONE APPEARED NOR ANY DETAILS WERE FILED. 5. LD. CIT(A), THEREFORE, CONFIRMED THE FINDINGS OF AO. HE FURTHER CONSIDERED THE ALTERNATIVE SUBMISSION OF ASSESSEE T O REDUCE SUCH PURCHASES FROM THE TRADING ACCOUNT ALTOGETHER BUT R EJECTED THE SAME FOLLOWING THE DECISION OF HONBLE DELHI HIGH COURT IN CIT VS. LA MEDICA, 250 ITR 575 (DEL.). BEING AGGRIEVED THE ASSESSEE H AS TAKEN FOLLOWING GROUNDS OF APPEAL: - 1. THAT THE LD. CIT(APPEALS), DEHRADUN HAS ERRED ON FACTS IN STATING THAT THE NOTICE FOR FIXTURE OF LAS T DATE OF HEARING ON 11.01.2012 WAS SERVED ON THE APPELLANT A ND ON THE SAID DATE NONE ATTENDED. THE APPELLANT CATEGORICALLY STATES THAT NO NOTICE WAS RECEIVED FO R FIXTURE OF HEARING ON 11.01.2012, AND, THEREFORE, T HE ORDER DATED 11.01.2012 OF THE CIT(A) HAS BEEN PASSE D ITA NO. 2614/D/2012 3 BEHIND THE BACK OF THE ASSESSEE, WITHOUT PROVIDING HIM WITH ADEQUATE OPPORTUNITY OF BEING HEARD AND THEREF ORE, DESERVES TO BE QUASHED. 2. THAT THE CIT(A) HAS ERRED ON FACTS AND IN LAW I N CONFIRMING THE ADDITION OF RS. 130,452/- WAS BY THE AO ON ACCOUNT OF FOUR CREDITORS SIMPLY FOR WANT OF CONFIRMATION. 3. THAT THE APPELLANT CRAVES FOR RIGHT TO AMEND/MODIFY/DROP OR ADD TO THE ABOVE GROUNDS OF APPEAL. 6. LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT PURC HASES HAVE NOT BEEN DISPUTED. ONLY CREDITORS HAVE BEEN DISPUTED B ECAUSE THE CONFIRMATIONS COULD NOT BE PROVIDED. HE SUBMITTED THAT THE PURCHASES PERTAINED TO F.Y. 2005-06 AND, THEREFORE, DURING AS SESSMENT PROCEEDINGS IN 2011 IT WAS NOT POSSIBLE TO SUBMIT THE CONFIRMAT IONS OF THESE PETTY CREDITORS. IN THE ALTERNATIVE, HE SUBMITTED THAT T HE CLOSING STOCK SHOULD BE ACCORDINGLY ADJUSTED. 7. LD. DR RELIED ON THE ORDER OF LD. CIT(A). 8. I HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PA RTIES AND HAVE PERUSED THE RECORDS OF THE CASE. AT THE TIME OF HE ARING, LD. COUNSEL FOR THE ASSESSEE DID NOT SERIOUSLY PRESS GROUND NO. 1, THER EFORE, THE SAME IS DISMISSED. AS FAR AS GROUND NO. 2 IS CONCERNED, I DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF LD. CIT(A) BECAUSE A DMITTEDLY THE ASSESSEE FAILED TO PROVE THE GENUINENESS OF THE CREDITORS. AS FAR AS ALTERNATE CONTENTION OF THE ASSESSEE IS CONCERNED, I FIND THA T SINCE PURCHASES HAVE BEEN ACCOUNTED FOR THEREFORE, THE EFFECT OF THE SAM E HAS DULY BEEN REFLECTED IN THE CLOSING STOCK. 9. I FIND THAT RELIANCE PLACED BY LD. CIT(A) ON THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. LA MEDICA, 250 ITR 575 (DEL) WAS ITA NO. 2614/D/2012 4 FULLY JUSTIFIED. HONBLE HIGH COURT OBSERVED THAT IN THIS CASE THE QUESTION BEFORE THE TRIBUNAL WAS NOT WHETHER PURCHASES WERE MADE FROM ANOTHER CONCERN. WHAT WAS UNDER CONSIDERATION WAS WHETHER THE PURCHASES WERE MADE FROM K AS WAS CLAIMED BY THE ASSESSEE. ONCE I T WAS ACCEPTED THAT THE SUPPLIES WERE NOT MADE BY K TO WHOM PAYMENTS WE RE ALLEGED TO HAVE BEEN MADE, THE QUESTION WHETHER THE PURCHASES WERE MADE FROM SOME OTHER SOURCE COULD NOT HAVE WEIGHED WITH THE TRIBUN AL AS A FACTOR IN FAVOUR OF THE ASSESSEE. THE CONCLUSIONS OF THE TRIBUNAL W ERE, THEREFORE, CLEARLY ERRONEOUS, CONTRARY TO THE MATERIALS ON RECORD AND HAD BEEN ARRIVED AT WITHOUT TAKING INTO CONSIDERATION RELEVANT MATERIAL AND BY PLACING RELIANCE ON IRRELEVANT MATERIALS. WHERE THE TRIBUNAL ACTED PARTLY ON RELEVANT AND PARTLY ON IRRELEVANT MATERIALS, AND IT WAS NOT POSS IBLE TO SAY TO WHAT EXTENT THE LATTER HAD INFLUENCED ITS MIND, THE FINDING WAS VITIATED BECAUSE OF THE USE OF IRRELEVANT MATERIAL. THE TRIBUNAL HAD NO MA TERIAL TO COME TO THE CONCLUSION THAT THE SUM OF RS. 3,82,750/- COULD NOT BE TREATED AS THE ASSESSEES INCOME FROM UNDISCLOSED SOURCES. 10. WE FIND THAT FACTS IN THE PRESENT CASE ARE ALSO SIMILAR TO LA MEDICAS CASE. THEREFORE, RESPECTFULLY FOLLOWING THE DECISI ON OF HONBLE JURISDICTIONAL HIGH COURT, WE CONFIRM THE ORDER OF LD. CIT(A). 11. IN THE RESULT, THE ASSESSEES APPEAL IS DISMISS ED. ORDER PRONOUNCED IN THE OPEN COURT ON 28/09/2012 SD/- (S.V. MEHROTRA) ACCOUNTANT MEMBER DATED: 28/09/12 *KAVITA COPY TO: ITA NO. 2614/D/2012 5 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, NEW DELHI. TRUE COPY BY ORDER DEPUTY REGISTRAR