Al-Abeer Hospitals P.Ltd, Malappuram V. ACIT, Tirur

ITA 284/COCH/2013

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 4717 (ITAT-COCHIN)
• Duration Of Justice: 4 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-09-2013
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Next Hearing Date: 17-09-2013
• Assessment Year: 2005-2006
• Appeal Filed On: 10-05-2013
• Court: TRIBUNAL
• Department Lawyers: LATHA V KUMAR JR DRII
• Keywords: Opportunity of being heard; Additional evidence; Onus to prove
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE S/SHRI N.R.S.GANESAN, JM AND B.R.BASKAR AN, AM I.T.A. NO.284/COCH/2013 ASSESSMENT YEAR : 2005-06 AL-ABEER HOSPITALS PRIVATE LTD. KIZHISSERY, KONDOTTY, MALAPPURAM. [PAN: AAECA 7576Q] VS. THE ASSISTANT COMMISSIONER OF INCOME-TAX, CIRCLE-1, TIRUR. (ASSESSEE -APPELLANT) (REVENUE-R ESPONDENT) ASSESSEE BY SHRI SHAJI POULOSE, FCA REVENUE BY SMT. LATHA V. KUMAR, JR. DR-II DATE OF HEARING 17/09/2013 DATE OF PRONOUNCEMENT 27/09/2013 O R D E R PER B.R.BASKARAN, ACCOUNTANT MEMBER: THE ASSESSEE HAS FILED THIS APPEAL CHALLENGING THE ORDER DATED 05-02-2013 PASSED BY THE LD. CIT(A), KOZHIKODE AND IT RELATES TO THE ASSESSMENT YEAR 2005-06. 2. THE ASSESSEE IS AGGRIEVED BY THE DECISION OF THE LD. CIT(A) IN CONFIRMING THE ASSESSMENT OF SHARE APPLICATION MONEY OF RS.1,09,26 ,919/- U/S. 68 OF THE ACT. THE FACTS RELATING TO THE SAME ARE SET OUT IN BRIEF. THE ASS ESSEE HAS FILED ITS RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION, DECLARING NET LOSS OF RS. 38.66 LAKHS. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NO TICED THAT THE ASSESSEE HAS RECEIVED SHARE APPLICATION MONEY FROM VARIOUS PERSO NS TO THE TUNE OF RS.1,09,26,919/-. WHEN THE AO ASKED THE ASSESSEE TO EXPLAIN THE RECEI PT OF SHARE APPLICATION MONEY, IT FILED CONFIRMATION LETTERS FROM THE SHARE APPLICANT S AND FURTHER STATED THAT ALMOST ALL OF THEM ARE NRIS WORKING AT SAUDI ARABIA. HOWEVER, TH E ASSESSEE DID NOT FILE EVIDENCES TO PROVE THE CREDITWORTHINESS OF THOSE PERSONS. HEN CE, THE ASSESSING OFFICER ASSESSED I.T.A. NO. 284/COCH/2013 2 THE ABOVE SAID AMOUNT UNDER SECTION 68 OF THE ACT. BEFORE THE LD. CIT(A), THE ASSESSEE SUBMITTED PHOTOCOPIES OF CERTAIN DOCUMENTS TO PROVE THE CREDITWORTHINESS OF THE SHARE APPLICANTS. HOWEVER, THE FIRST APPELLATE AUTHORITY NOTICED THAT THE DOCUMENS SO PRODUCED WERE ONLY PHOTOCOPIES. THE LD CIT(A) F URTHER OBSERVED THAT THE ASSESSEE COULD NOT ADDUCE ANY REASON WHICH PREVENTED HIM FRO M FURNISHING THESE DETAILS TO THE ASSESSING OFFICER. HENCE HE DECLINED TO ACCEPT THE M UNDER RULE 46A OF THE INCOME TAX RULES. ACCORDINGLY, THE LD. CIT(A)CONFIRMED THE SA ID ADDITION. AGGRIEVED, THE ASSESSEE HAS FILED THIS APPEAL BEFORE US. 3. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE PERSONS FROM WHOM SHARE APPLICATION MONEY WAS RECEIVED, ARE MOSTLY EMPLOYED ABROAD. HE FURTHER SUBMITTED THAT THE ASSESSING OFFICER DID NOT ISSUE ANY PRE-AS SESSMENT NOTICE PRIOR TO COMPLETION OF ASSESSMENT. ACCORDINGLY HE SUBMITTED THAT THE A SSESSEE COULD NOT IMMEDIATELY GET COPIES OF SALARY CERTIFICATES OF THE SHARE APPLICAN TS DULY CERTIFIED BY THE CONSULATE GENERAL OF INDIA, JEDDAH, SAUDI ARABIA AND FURNISH THE SAME AT THE TIME OF ASSESSMENT. ACCORDINGLY, THE LD. COUNSEL FOR THE ASSESSEE SUBMI TTED THAT THERE WAS SUFFICIENT CAUSE FOR NOT FILING THESE DOCUMENTS BEFORE THE ASSESSING OFFICER. ACCORDINGLY HE SUBMITTED THAT THE LD. CIT(A) WAS NOT JUSTIFIED IN DECLINING TO ADMIT THE ADDITIONAL EVIDENCES DURING THE COURSE OF APPELLATE PROCEEDINGS. 4. ON THE CONTRARY, THE LD. DR SUBMITTED THAT THE A SSESSEE HAS FILED ONLY PHOTOCOPIES OF THE SALARY CERTIFICATES BEFORE THE L D. CIT(A) AND FURTHER, THE ASSESSEE DID NOT FURNISH ANY VALID REASON FOR NOT FILING THO SE DOCUMENTS BEFORE THE ASSESSING OFFICER. 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND CAR EFULLY PERUSED THE RECORD. ADMITTEDLY, THE ASSESSEE HAS ONLY FILED THE CONFIRMATION LETTER S BEFORE THE ASSESSING OFFICER AND IT DID NOT FILE ANY DOCUMENT TO PROVE THE CREDITWORTHI NESS OF THE SHARE APPLICANTS. THERE SHOULD NOT BE ANY DISPUTE THAT THE BURDEN OF PROOF IS PLACED UPON THE ASSESSEE U/S 68 OF THE ACT TO PROVE THE CASH CREDITS, I.E., THE ASS ESSEE IS REQUIRED TO PROVE THE THREE MAIN INGREDIENTS VIZ., THE IDENTITY OF THE CREDITOR , THE GENUINENESS OF TRANSACTIONS AND I.T.A. NO. 284/COCH/2013 3 CREDIT WORTHINESS OF THE CREDITOR. THE EXPLANATION OF THE ASSESSEE IS THAT MOST OF THE SHARE APPLICANTS ARE EMPLOYED ABROAD AND HENCE, IT TOOK SOMETIME FOR IT TO OBTAIN SALARY CERTIFICATES DULY ATTESTED BY THE CONSULATE GENERAL OF INDIA, JEDDAH, SAUDI ARABIA. ACCORDING TO LEARNED COUNSEL, THE ASSESSIN G OFFICER DID NOT ISSUE ANY PRE- ASSESSMENT NOTICE AND HENCE THE ASSESSEE COULD NOT VISUALISE ABOUT THE NATURE OF QUERIES THAT MAY BE RAISED BY THE AO. SINCE MOST O F THE SHARE APPLICANTS ARE EMPLOYED ABROAD, IN OUR VIEW, IT MAY TAKE SOME TIME FOR THE ASSESSEE TO OBTAIN THE SALARY CERTIFICATES AND OTHER DETAILS TO PROVE THEIR RESPE CTIVE CREDIT WORTHINESS. HENCE, IN OUR VIEW, IT WOULD NOT BE UNREASONABLE TO STATE THAT TH E ASSESSEE PREVENTED FROM FILING THE NEW DOCUMENTS BEFORE THE ASSESSING OFFICER. IN ANY CASE, THE OBJECTIVE OF THE SCHEME OF THE INCOME TAX ACT IS TO LEVY AND COLLECT CORREC T AMOUNT OF TAX. WHEN THE ASSESSEE IS FILING FRESH DOCUMENTS TO SUBSTANTIATE THE CASH CREDITS AND THE EXPLANATIONS FOR NOT FILING THE SAME DURING THE COURSE OF ASSESSMENT PRO CEEDINGS ARE ALSO STATED AND FURTHER THE SAID EXPLANATIONS ARE FOUND TO BE A REASONABLE ONE, IN OUR VIEW, IT MAY NOT BE CORRECT TO DECLINE TO ADMIT THEM. ACCORDINGLY, IN OUR VIEW, THE LD. CIT(A) SHOULD HAVE ADMITTED THESE ADDITIONAL EVIDENCES BEFORE DECIDING THE APPEAL AGAINST THE ASSESSEE. BEFORE US, THE LD COUNSEL SUBMITTED THAT THE ASSESS EE COULD PRODUCE ALL THE ORIGINALS BEFORE THE TAX AUTHORITIES. SINCE THE ASSESSEE HAS FILED FRESH DOCUMENTS, IN OUR VIEW, THIS ISSUE REQUIRES RE-CONSIDERATION AT THE END OF THE ASSESSING OFFICER AS THESE DOCUMENTS WERE NOT CONSIDERED BY HIM AT THE TIME OF FINALISING THE ASSESSMENT. ACCORDINGLY, WE SET ASIDE THE ORDER OF THE LD. CIT( A) AND RESTORE THIS MATTER TO THE FILE OF THE ASSESSING OFFICER WITH A DIRECTION TO EXAMIN E THE ISSUE AFRESH BY DULY CONSIDERING THE FRESH DOCUMENTS REFERRED ABOVE AND ALSO ANY OTH ER DOCUMENT/EXPLANATION THAT MAY BE FURNISHED BY THE ASSESSEE AT THE TIME OF HEARING AND TAKE APPROPRIATE DECISION IN ACCORDANCE WITH LAW. THE ASSESSEE SHOULD BE GIVEN NECESSARY OPPORTUNITY OF BEING HEARD. I.T.A. NO. 284/COCH/2013 4 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED ACCORDINGLY ON 27-09-2 013. SD/- SD/- (N.R.S.GANESAN) (B.R.BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER PLACE: KOCHI DATED: 27TH SEPTEMBER 2013 GJ COPY TO: 1. AL-ABEER HOSPITALS PRIVATE LTD. KIZHISSERY, KOND OTTY, MALAPPURAM. 2. THE ASSISTANT COMMISSIONER OF INCOME-TAX, CIRCLE -1, TIRUR. 3. THE COMMISSIONER OF INCOME-TAX(APPEALS)-II, KOZH IKODE. 4. THE COMMISSIONER OF INCOME-TAX, KOZHIKODE. 5. D.R., I.T.A.T., COCHIN BENCH, COCHIN. 6. GUARD FILE. BY ORDER (ASSISTANT REGISTRAR) I.T.A.T, COCHIN