The ITO, Ward-1(4), Veraval V. M/s. Evergreen Seeds & Feeds Pvt. Ltd., Kodinar

ITA 282/RJT/2011

• Counselvise Citation: 28224914 RSA 2011
• Duration Of Justice: 10 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-04-2012
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 03-04-2012
• Assessment Year: 2005-2006
• Appeal Filed On: 17-06-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: AVINASH KUMAR
• Keywords: Unexplained cash credit; Additional evidence
• Section: 68

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBULAL; RAJKOT BENCH, RAJKOT . .. . . . . . , , , , . .. . . . . . , , , , % % % % BEFORE SHRI T. K. SHARMA, JM AND SHRI D. K . SRIVASTAVA, AM. ITA NO. 282/RJT/2011 / ASSESSMENT YEAR 2005-06. I.T. O. WARD-1(4), VERAVAL. M/S .EVERGREEN SEEDS & FEEDS PVT. LTD.,32-NARAYAN COMPLEX, OPP. RAILWAY CROSSING, KODINAR. PAN: AABCE3508C. ) / REVENUE BY SHRI AVINASH KUMAR, D.R. +) / ASSESSEE BY NONE. ) / DATE OF HEARING 03-04-2012. ) / DATE OF PRONOUNCEMENT -04-2012. / // / ORDER . .. . . . . . / D. K. SRIVASTAVA: THE APPEAL FILED BY THE DEPARTMENT IS DIRECTED AGAINST THE ORDER PASSED BY THE CIT(A) ON 08-03-2011, ON THE FOLLOWING GROUNDS:- 1. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.15,00,000/- MADE BY THE A.O. ON ACCOUNT OF UNEXP LAINED CASH DEPOSIT U/S.68 OF THE IT ACT,1961. 2. ON THE FACTS OF THE CASE AND IN LAW THE LD. CIT( A) OUGHT TO HAVE UPHELD THE ORDER OF THE AO. 3. ANY OTHER GROUND THAT THE REVENUE MAY RAISE BEFO RE OR DURING HEARING PROCEEDINGS BEFORE THE HON;BLE ITAT. 4. IT IS THEREFORE PRAYED THAT THE ORDER OF CIT(A)- XXI, AHMEDABAD MAY KINDLY BE SET-ASIDE AND THAT OF ASSESSING OFFICER B E RESTORED. 2. THE ASSESSEE, A PRIVATE LIMITED COMPANY, FILED I TS RETURN OF INCOME ON 28-10- 2005 RETURNING TOTAL INCOME AT RS. NIL. AFTER PROCE SSING, THE RETURN WAS SELECTED FOR SCRUTINY DURING WHICH THE ASSESSING OFFICER NOTICED CASH CREDITS OF RS.3,00,000/- EACH RECORDED BY THE ASSESSEE IN THE NAME OF FIVE C REDITORS IN ITS BOOKS OF ACCOUNT MAINTAINED FOR THE YEAR UNDER APPEAL. ON BEING CAL LED UPON TO EXPLAIN THE NATURE AND SOURCE OF THE IMPUGNED CASH CREDITS, THE ASSESS EE FILED CONFIRMATIONS FROM THE CREDITORS. IT WAS PLEADED THAT THE IMPUGNED SUMS W ERE GIVEN BY THE CREDITORS OUT OF THEIR AGRICULTURAL INCOME. COPY OF BANK ACCOUNT OF CREDITORS WAS ALSO PRODUCED BEFORE THE AO. THE AO NOTICED THAT THE AGRICULTURAL LAND HELD BY EACH OF THE FIVE CREDITORS ADMEASURED FROM 0.20 HECTARE TO 0.60 HECT ARE, WHICH, ACCORDING TO THE ITA 282 /RJT/2011 2 AO, WAS INSUFFICIENT TO ESTABLISH THEIR CREDITWORTH INESS. THE ASSESSING OFFICER ALSO NOTICED THAT CASH DEPOSITS WERE FIRST MADE IN THE B ANK ACCOUNTS OF THE CREDITORS AFTER WHICH CHEQUES COVERING THE IMPUGNED CASH CRED ITS WERE ISSUE BY THEM IN FAVOUR OF THE ASSESSEE. FOR THE REASONS GIVEN IN T HE ASSESSMENT ORDER, THE ASSESSING OFFICER HELD THAT THE ASSESSEE HAS NOT DI SCHARGED THE ONUS OF EXPLAINING SATISFACTORILY THE NATURE AND SOURCE OF THE IMPUGNE D CASH CREDITS. HE THEREFORE TREATED THE IMPUGNED CASH CREDITS AS UNEXPLAINED AN D CONSEQUENTLY TAXED THE SAME U/S.68 OF THE INCOME-TAX ACT. ON APPEAL, THE L D. CIT(A) HAS DELETED THE IMPUGNED ADDITION WITH THE FOLLOWING OBSERVATIONS:- AFTER A COMPARATIVE STUDY OF ASSESSMENT ORDER AND ABOVE WRITTEN SUBMISSION FILED BY THE A.R. OF THE APPELLANT ON 08 .03.2011 I AM INCLINED TO AGREE WITH THE WRITTEN SUBMISSION GIVEN BY THE LD. A.R. REGARDING CURRENT CAPITAL OF RS.15,00,000/- UNEXPLAINED CASH CREDIT U /S.68 OF THE ACT. ON VERIFICATION OF THE SUBMISSION MADE BY THE APPELLAN T IT IS FOUND THAT AL THE TRANSACTIONS WERE MADE BY CHEQUES, THE AFFIDAVITS O F THE DIRECTORS WERE INDICATING THEIR FULL ADDRESS, DETAILS OF DEPOSITS MADE WITH APPLICANT AND SOURCE WHERE FROM MONEY OBTAINED TO MAKE THE DEPOSI T COPIES OF BANK ACCOUNT WERE FURNISHED. THESE AFFIDAVITS WERE NOTAR IZED. THERE WAS NO GROUND FOR DISBELIEVING THE CONTENTS OF AFFIDAVITS. THEREFORE, THE ADDITION MADE REGARDING CURRENT CAPITAL AS UNEXPLAINED CASH CREDIT WITH THE MEANING OF SECTION 68 OF THE ACT, IS DIRECTED TO BE DELETED . 3. AGGRIEVED BY THE ORDER PASSED BY THE LD. CIT(A), THE DEPARTMENT IS NOW IN APPEAL BEFORE THIS TRIBUNAL. IN SUPPORT OF APPEAL, THE LEARNED DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT THE AFFIDAVIT FILED B EFORE THE LD. CIT(A) WAS NEVER FILED BEFORE THE AO. HE ALSO SUBMITTED THAT THE LD. CIT(A ) HAS COMPLETELY IGNORED THE MATERIALS BROUGHT ON RECORD BY THE AO TO ESTABLISH THAT THE IMPUGNED CASH CREDITS WERE NOT GENUINE. HE PRAYED THAT THE ORDER PASSED B Y THE LD. CIT(A) SHOULD BE REVERSED AND THAT OF THE AO RESTORED. 5. NEITHER THE ASSESSEE NOR ITS REPRESENTATIVE WAS PRESENT AT THE TIME OF HEARING. BARE PERUSAL OF THE ORDER PASSED BY THE L D. CIT(A) SHOWS THAT HE HAS ACTED UPON THOSE MATERIALS WHICH WERE NEVER PLACED BY THE ASSESSEE BEFORE THE AO AND THEREFORE THE MATTER WOULD NEED TO BE RESTOR ED TO THE FILE OF THE LD. CIT(A) FOR A FRESH DECISION IN CONFORMITY WITH LAW. IT WAS FELT THAT THE MATTER COULD BE DISPOSED OFF ON THE AFORESAID LINES EVEN WITHOUT TH E PRESENCE OF THE ASSESSEE AND ACCORDINGLY THE MATTER WAS HEARD. 4. WE HAVE HEARD THE LD. D.R. AND ALSO PERUSED THE MATERIALS AVAILABLE ON RECORD. THE AFFIDAVIT REFERRED TO BY THE LD. CIT(A) IN HIS ORDER WAS NEVER SUBMITTED BEFORE THE AO. BESIDES, THE LD. CIT(A) HAS NOT DEA LT WITH THE FINDINGS RECORDED BY THE A.O. IN THE ASSESSMENT ORDER WHICH GO TO THE RO OT OF THE MATTER. IN THIS VIEW OF ITA 282 /RJT/2011 3 THE MATTER, THE ORDER PASSED BY THE LD. CIT(A) IS S ET ASIDE AND THE MATTER IS RESTORED TO HIS FILE FOR A FRESH DECISION. HE WILL NOT ADMIT ANY ADDITIONAL EVIDENCE EXCEPT IN CONFORMITY WITH THE PROVISIONS OF RULE-46A OF THE I NCOME-TAX RULES. REASONABLE OPPORTUNITY OF HEARING SHALL BE GIVEN TO BOTH THE P ARTIES. THE APPEAL FILED BY THE DEPARTMENT IS TREATED AS ALLOWED FOR STATISTICAL PU RPOSES. ! ) 0 20/04/2012 2 ) THIS ORDER PRONOUNCED IN OPEN COURT ON 20 -04-2012. SD/- SD/- ( .. / T. K. SHARMA) ( .. / D. K. SRIVASTAVA) /JUDICIAL MEMBER / ACCOUNTANT MEMBER 0/ ORDER DATE 20/04/2012. /RAJKOT ) )) ) 45 45 45 45 65 65 65 65 / COPY OF ORDER FORWARDED TO:- 1. 9 / APPELLANT 2. 4;9 / RESPONDENT 3. > / CONCERNED CIT 4. >- / CIT (A) 5. 5 4, , / DR, ITAT, RAJKOT 6. / GUARD FILE. / BY ORDER , ASTT. REGISTRAR, ITAT, RAJKOT , ,