Sh. Prashant Bhaskar, Jalandhar V. The Income Tax Officer, Jalandhar

ITA 28/ASR/2011

• Counselvise Citation: 2820914 RSA 2011
• Duration Of Justice: 1 year(s) 9 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-11-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 15-09-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 24-01-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: RAVISH SOOD
• Keywords: Unexplained cash credit; Opportunity of being heard
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR BEFORE SH. A.D.JAIN, HONBLE JUDICIAL MEMBER AND SH. T.S. KAPOOR, HONBLE ACCOUNTANT MEMBER I.T.A. NO. 28(ASR)/2011 ASSESSMENT YEAR: 2006-07 PAN: AIGPP3186N SH. PRASHANT BHASKAR W.J.284, BASTI GUZAN, B-3, DUMAN WALI GALI, JALANDHAR. VS. INCOME TAX OFFICER, 1(3), JALANDHAR. (APPELLANT) (RESPONDENT) APPELLANT BY: SH. RAVISH SOOD (ADV.) RESPONDENT BY: SH. TARSEM LAL (DR) DATE OF HEARING: 1 5.09.2015 DATE OF PRONOUNCEM ENT: 21.09.2015 ORDER PER T. S. KAPOOR (AM): THIS IS ASSESSEES APPEAL FOR ASST. YEAR. 2006-0 7 AGAINST THE ORDER DATED 04.11.2010, PASSED BY THE LEARNED CIT(A), JALANDHAR . THE APPEAL WAS EARLIER DISMISSED VIDE TRIBUNAL ORDER DATED 7 TH NOVEMBER, 2012, IN VIEW OF NON PROSECUTION BY THE ASSESSEE BUT THE SAID TRIBUNAL O RDER WAS RECALLED VIDE TRIBUNAL ORDER DATED 6 TH SEPTEMBER, 2013. THEREFORE, THIS APPEAL HAS BEEN HEARD ON MERITS. 2. AT THE OUT SET, THE LEARNED AR INVITED OUR ATTE NTION TO THE FACTS OF THE CASE AND SUBMITTED THAT THE ASSESSEE IS A SMALL BUS INESS MAN, WHO IS 2. ITA NO. 2 8(ASR)/2011 ASST. YE AR 2006-07 PROPRIETOR OF M/S. KRITIKA SALES WHICH IS DEALING I N THE BUSINESS OF SHOES MATERIAL AND FURTHER SUBMITTED THAT ASSESSEE HAD MI GRATED FROM MAHARASTRA AND WAS DOING BUSINESS IN PUNJAB BUT WAS FACING SOM E FINANCIAL DIFFICULTIES. HE THEN CAME ACROSS WITH ONE PERSON SH. RADHEY SHAM , WHO ALSO HAPPENED TO BE FROM VERY SAME STATE OF MAHARASHTRA, TO WHICH AS SESSEE BELONGED. SH. RADHEY SHAM OFFERED FINANCIAL HELP TO THE ASSESSEE AND GAVE CHEQUES WORTH OF RS.12,29,400/- IN THE NAME OF ASSESSEES FIRM ISSU ED BY ONE M/S. CARGO MOTORS PVT. LTD., WHO HAPPENS TO BE A DEALER OF TAT A MOTORS LIMITED. THE LEARNED AR SUBMITTED THAT SH. RADHEY SHAM USED TO W ORK FOR TATA FINANCE LIMITED AND HE USED TO GET THE VEHICLES OF CARGO MO TORS (PVT.) LTD. SOLD TO VARIOUS CUSTOMERS. IT WAS SUBMITTED THAT MR. RADHEY SHAM USED TO GET LETTERS FROM THE CUSTOMERS REQUESTING THE CARGO MOTORS PVT. LTD TO REFUND THE AMOUNT OF EXCESS AMOUNT IF ANY TO M/S KRITIKA SALES AND US ED TO TAKE THE MONEY FROM THE ASSESSEE. THE LEARNED AR IN THIS RESPECT INVITE D OUR ATTENTION TO A TRANSLATED COPY A LETTER WRITTEN BY KULWINDER SINGH , S/O RATAN SINGH, SARUP SINGH S/O DARBAG SINGH, RAJINDER SINGH S/O JAGIR SI NGH, REQUESTING TO M/S CARGO MOTORS PVT. LTD. TO TRANSFER THE DISCOUNT AMO UNT OF RS.3,40,000/- TO THE ACCOUNT OF M/S KRITIKA SALES. THE LEARNED AR FURTHE R SUBMITTED THAT THE AMOUNTS RECEIVED FROM M/S CARGO MOTORS IN FACT BELO NGED TO SH. RADHEY SHAM AND THEREFORE SUCH AMOUNTS WERE BEING CREDITED TO T HE ACCOUNT OF SH. RADHEY SHAM (SUPRA). HE FURTHER SUBMITTED THAT OUT OF RS.1 2,29,400/- RECEIVED FROM M/S CARGO MOTORS ON BEHALF OF THE SH. RADHEY SHAM, THE ASSESSEE HAD ALREADY PAID AN AMOUNT OF RS.6,33,000/- TO SH. RADHEY SHAM WHICH ITSELF PROVES THAT 3. ITA NO. 2 8(ASR)/2011 ASST. YE AR 2006-07 MONEY DID NOT BELONG TO THE ASSESSEE RATHER SH. RAD HEY SHAM USED TO GET DISCOUNT BELONGING TO CUSTOMERS THROUGH THE ACCOUNT OF M/S. KRITIKA SALES. THE LEARNED AR SUBMITTED THAT THE ADDITION HAS BEEN MADE IN THE HANDS OF THE ASSESSEE UNDER SECTION 68 ON ACCOUNT OF UNEXPLAINED CREDITS WHEREAS THE FACT REMAINS THAT MONEY WAS RECEIVED FROM M/S. CARGO MOT ORS PVT. LIMITED, WHO ITSELF HAD AGREED TO IT. HE SUBMITTED THAT THE ACTI ON OF LEARNED CIT(A) IS NOT JUSTIFIED IN VIEW OF THE FACT THAT ALL EVIDENCES PR OVE THAT MONEY WAS RECEIVED FROM M/S CARGO MOTORS (PVT.) LTD. THE LEARNED AR RE QUESTED THAT THE CASE SHOULD BE REMANDED BACK TO THE OFFICE OF THE ASSESS ING OFFICER WHO SHOULD EXAMINE SH. RADHEY SHAM AND THE PERSONS TO WHOM THE DISCOUNT ACTUALLY BELONGED AS TO ARRIVE AT A CORRECT CONCLUSION. 3. THE LEARNED DR, ON THE OTHER HAND, ARGUED THAT T HIS IS THE CLEAR CASE OF PAYMENTS BY ASSESSEE TO THE CUSTOMERS OF M/S. CARGO MOTORS FROM UNDISCLOSED SOURCES. THE LEARNED DR SUBMITTED THAT THE ASSESSEE MUST HAVE PAID TO THE CUSTOMERS, THE AMOUNTS OF REFUND IN CASH OTHERWISE WHY ONE WOULD GIVE AWAY HIS RIGHT OF RECEIVING REFUND TO OTHERS WITHOUT ANY CONSIDERATION, THEREFORE, IN VIEW OF THE ABOVE HE SUBMITTED THAT THE APPEAL OF T HE ASSESSEE NEEDS TO BE DISMISSED. 4. WE HAVE HEARD THE RIVAL PARTIES AND HAVE GONE THROUGH THE MATERIAL ON RECORD. WE FIND THAT THE ASSESSEE IN ITS BOOKS HAS MAINTAINED AN ACCOUNT OF SH. RADHEY SHAM WHICH IS PLACED AT PAPER BOOK PAGE- 8 AND IN WHICH HE HAD CREDITED AN AMOUNT OF RS.12,29,400/- ON DIFFERENT D ATES OUT OF WHICH 4. ITA NO. 2 8(ASR)/2011 ASST. YE AR 2006-07 RS.6,33,000/- HAS BEEN REPAID TO HIM, LEAVING A BAL ANCE OF RS. 5,96,400/- THE ASSESSING OFFICER TREATED THE WHOLE AMOUNT OF 12,29 ,000/- AS UNEXPLAINED CREDITS UNDER SECTION 68 OF THE ACT, IN VIEW OF THE NON EXPLANATION BY THE ASSESSEE. WE FURTHER FIND FROM PAPER BOOK PAGE 13 T HAT IT IS AN ACCOUNT OF MR. SAROOP SINGH S/O DARBAR SINGH A CUSTOMER OF M/S CAR GO MOTORS PVT. LIMITED, WHO HAD BEEN ISSUED REFUND OF EXCESS AMOUNT ON 07.0 3.2006 AMOUNTING TO RS.1,13,400/- AS IS APPARENT FROM PAPER BOOK PAGE-1 3. SIMILARLY, ACCOUNT OF SH. ANGREJ SINGH, S/O DARA SINGH APPEARS IN PAPER B OOKS PAGE-14, WHEREIN AN AMOUNT OF RS.1,13,400/- HAS BEEN PAID ON 07.03.2006 . PAPER BOOK PAGE 15 IS A COPY OF ACCOUNT OF CUSTOMER SH. TEJINDER SINGH, S /O JAGIR SINGH, WHEREIN ON 07.03.2006 RS.1,13,400/- HAS BEEN PAID TO HIM. IN A LL THESE ACCOUNTS IN NARRATION IT HAS BEEN MENTIONED THAT THE AMOUNT IS BEING PAID ON ACCOUNT OF REFUND OF EXCESS AMOUNT AND IS BEING PAID TO M/S. K RITIKA SALES ON THEIR BEHALF. THE ABOVE TOTAL AMOUNT OF RS.3,40,000/- IS FOUND TO HAVE BEEN CREDITED IN THE ACCOUNT OF SH. RADHEY SHAM ON 11 TH MARCH, 2006. THE SAID AMOUNT OF RS.3,40,000/- WAS PAID BY M/S CARGO MOTORS THROUGH PAYMENT VOUCHERS VIDE SINGLE CHEQUE NO.657161 WHICH IS PLACED AT PAPER BO OK PAGE 12. ALL THESE ENTRIES SUGGEST THAT THE AMOUNT CREDITED BY THE ASS ESSEE IN THE ACCOUNT OF SH. RADHEY SHAM CANNOT BE SIMPLY SAID UNEXPLAINED MONEY AS SOURCE AND THE IDENTITY OF SUCH CREDITS IS ALREADY ESTABLISHED AND EVEN THE LEARNED CIT(A) VIDE PARA NO. 6.1 HAS HELD THAT SOURCE OF MONEY HAS BEEN ESTABLISHED THE RELEVANT FINDINGS OF LEARNED CIT(A) ARE REPRODUCED AS FOLLOW S: 5. ITA NO. 2 8(ASR)/2011 ASST. YE AR 2006-07 AS PER INFORMATION SUPPLIED BY M/S CARGO MOTORS TH E PAYMENT OF RS.12,29,000/- IS NOT ON ACCOUNT OF ANY SERVICE REN DERED BY M/S KRITIKA SALES TO THAT CONCERN. HOWEVER, SINCE THERE IS NO I NFORMATION AT ALL ABOUT THE PERSONS ON WHOSE BEHALF THE REFUND CHEQUES WERE ISSUED BY M/S CARGO MOTORS IN FAVOUR OF M/S KRITIKA SALES, AND TH E ASSESSEES CLAIM THAT THE PAYMENT WAS RECEIVED ON BEHALF OF SH. RADH EY SHAM IS NOT SUPPORTED BY ANY EVIDENCE, I AM UNABLE TO ACCEPT TH E APPELLANTS CONTENTION THAT THE MONEY WAS RECEIVED AS LOAN FROM SH. RADHEY SHAM. TOUGH A PART OF THE MONEY HAS GONE TO SH. RADHEY SH AM, IT DOES NOT PROVE THAT THE MONEY WAS ALSO RECEIVED ON HIS BEHAL F. NORMALLY, NO PERSON (CUSTOMER OF M/S CARGO MOTORS) WILL LET HIS OWN MONEY BE SENT TO ANOTHER WITHOUT RECEIVING SOME CONSIDERATION, WHICH COULD BE IN THE FORM OF PAYBACK OF MONEY RECEIVED OTHERWISE, OF FOR CERTAIN SERVICES RENDERED, OR FOR SOME OTHER REASONS. ON THE REQUEST OF THE LEARNED AR FOR THE APPELLANT THE SOURCE AND PURPOSE OF MONEY RECEI VED HAVE BEEN FOUND BUT THE LEARNED AR HAS NOT BEEN ABLE TO EXPLAIN OR JUSTIFY THE REASON FOR THE RECEIPT OF THE PAYMENT FROM M/S CARGO MOTORS. THE LEARNED CIT(A) HAS CONFIRMED THE ADDITION AS TH E ASSESSEE COULD NOT EXPLAIN THE REASON FOR RECEIPT OF PAYMENTS FROM M/S CARGO MOTORS WHEREAS FACT REMAINS THAT M/S CARGO MOTORS IN ITS BOOKS OF ACCOUNT HAD ISSUED CHEQUES IN FAVOUR OF ASSESSEE ONLY AS IS APPARENT F ROM THE NARRATION MENTIONED IN THE LEDGER ACCOUNT OF VARIOUS CUSTOMERS. IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES, WE ARE IN AGREEMENT WITH THE LEARNED AR THAT ISSUE NEEDS TO BE RE-ADJUDICATED BY ASSESSING OFFICER WHO SHOULD EXAM INE THE CUSTOMERS ON WHOSE BEHALF THE ASSESSEE HAD RECEIVED THE PAYMENTS FROM M/S CARGO MOTORS PVT. LTD. NEEDLESS TO SAY THAT THE ASSESSEE WILL BE PROVIDED SUFFICIENT OPPORTUNITY OF BEING HEARD. 6. ITA NO. 2 8(ASR)/2011 ASST. YE AR 2006-07 5. IN VIEW OF THE ABOVE APPEAL FILED BY THE ASSESS EE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 2 1 ST SEPTEMBER, 2015. SD/- SD/- (A.D. JAIN) (T. S. KAPOOR) JUDICIAL MEMBER ACCOUNTA NT MEMBER DATED: 21.09. 2015 /PK/ PS. COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE: SH. PRASHANT BHASKAR, JALANDHAR. 2. THE INCOME TAX OFFICER, I (3) , JALANDHAR. 3. THE CIT(A), 4. THE CIT, 5. THE SR DR, I.T.A.T., TRUE COPY BY ORDER (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENCH: AMRITSAR.