ITO 24(3)(4), MUMBAI V. PAPIER PRINTS, MUMBAI

ITA 2852/MUM/2010

• Counselvise Citation: 285219914 RSA 2010
• Duration Of Justice: 1 year(s) 3 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-07-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 28-07-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 12-04-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ALEXANDER CHANDY
• Assessee Lawyers: MANISH J SHETH
• Keywords: Unexplained cash credit
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES C : MUMBAI BEFORE SHRI D.MANMOHAN, VICE PRESIDENT AND SHRI PRAMOD KUMAR, ACCOUNTANT MEMBER ITA. NO. 2852/MUM/2010 ASSESSMENT YEAR 2006-2007 ITO 24(3)(4) MUMBAI 400 051 VS. M/S. PAPIER PRINTS MUMBAI 63 PAN AAIFP3733F (APPELLANT) (RESPONDENT) FOR APPELLANT : SHRI ALEXANDER CHANDY, SR. D.R. FOR RESPONDENT : SHRI MANISH J. SHETH DATE OF HEARING : 28-7-2011 DATE OF PRONOUNCEMENT : 28-7-2011 ORDER PER D. MANMOHAN, V.P. 1. THE ONLY GROUND URGED BY THE REVENUE, IN THIS A PPEAL, READS AS UNDER : ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A) ERRED IN DELETING THE ADDITION OF RS.17, 50,000/- MADE BY THE A.O. ON ACCOUNT OF UNPROVED LOANS, WITH OUT APPRECIATING THE FACT THAT THE ASSESSEE FAILED TO P ROVE THE GENUINENESS OF THE LOANS BEYOND DOUBT. 2. FACTS NECESSARY FOR THE DISPOSAL OF THE APPEAL ARE STATED IN BRIEF. THE ASSESSEE-FIRM CAME INTO EXISTENCE ON 21-9-2005 TO CONDUCT THE BUSINESS OF MANUFACTURE AND PRINTING OF CORRUGATED / PACKAGING BOXES. IN RESPECT OF THE ASSESSMENT YEAR 2006-2007 I.E., FIRST YEAR OF ITS BUSINESS, ASSESSEE DECLARED TOTAL LOSS OF RS.5,36,154/-. THE CASE WAS SELECTED FOR SCRUTINY. DURING THE COUR SE OF EXAMINATION OF THE BALANCE SHEET, THE ASSESSING OFFICER NOTICED SEVERAL CASH CREDITS. ASSESSEE WAS ASKED TO FURNISH LOAN CONFIRM ATIONS ALONG WITH ITA.NO.2852/M/2010 M/S. PAPIER PRINTS 2 COPY OF BANK STATEMENTS AND COPY OF RETURNS OF LOAN CREDITORS TO PROVE THE GENUINENESS OF THE LOANS. ASSESSEE FURNISHED EV IDENCE WITH REGARD TO CERTAIN CREDITORS. TO VERIFY THE GENUINENESS OF THE LOANS, SUMMONS WERE ISSUED TO ALL THE LOAN CREDITORS OUT OF WHICH 9 WERE RETURNED UNSERVED WITH THE POSTAL REMARK LEFT/NOT KNOWN AT THE ADDRESS GIVEN /UNCLAIMED . REST OF 14 PERSONS HAVE NOT ATTENDED IN RESPONSE TO SUMMONS. THEREFORE, THE ASSESSING OFFICER ARRIVED A T A CONCLUSION THAT THE AMOUNTS SHOWN AS LOAN IS NOTHING BUT ACCOM MODATION ENTRIES TO INTRODUCE ITS OWN MONEY. ACCORDINGLY, HE MADE AN ADDITION OF RS.36,19,203/- UNDER SECTION 68 OF THE ACT. 3. AGGRIEVED, ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A) WHEREIN THE ASSESSING OFFICER CONFIRMED PART OF THE DISALLOWANCE. WE ARE CONCERNED HEREIN WITH THE ADDITION OF RS.17,50, 000/- REFERABLE TO LOANS CLAIMED TO HAVE BEEN RECEIVED FROM 11 CREDITO RS. THE CASE OF THE ASSESSEE WAS THAT ALL THE LOANS WERE RECEIVED BY CH EQUE, PA NO. WERE FURNISHED AND CONFIRMATION LETTERS WERE ALSO FILED. THUS THE ASSESSEE HAS DISCHARGED THE PRIMARY ONUS OF EXPLAINING CREDI TS IN ITS BOOKS IN WHICH EVENT MERELY BECAUSE THE ASSESSING OFFICER IS SUED SUMMONS WHICH ARE RETURNED UN-SERVED LOANS CANNOT BE TREATE D AS NON-GENUINE SINCE IT IS THE DUTY OF THE ASSESSING OFFICER TO MA KE FURTHER PROBE WITH THE HELP OF PA NO. ETC., IN THIS REGARD, RELIANCE W AS PLACED UPON THE DECISION OF THE APEX COURT IN THE CASE OF ORISSA CO RPORATION 159 ITR 78. IT WAS ALSO SHOWN THAT REPAYMENTS WERE MADE SUB SEQUENTLY TO 4 PERSONS AND THIS WAS NOT DISPUTED BY THE TAX AUTHOR ITIES. 4. HAVING REGARD TO THE CIRCUMSTANCES OF THE CASE, LEARNED CIT(A) WAS OF THE OPINION THAT THE ASSESSING OFFICE R HAS NOT MADE OUT A CASE FOR MAKING ADDITION UNDER SECTION 68 OF THE ACT. DISCUSSION ON THIS ISSUE IS AVAILABLE FROM PARA-6 ONWARDS AND IN THE OPERATIVE PORTION I.E., PARA-9 LEARNED CIT(A) OBSERVED AS UND ER : -------- ASSESSING OFFICER WAS NOT JUSTIFIED IN AD DING CREDITS OF RS.17,50,000/- RECEIVED FROM THE AFORESA ID 11 ITA.NO.2852/M/2010 M/S. PAPIER PRINTS 3 PERSONS AS UNEXPLAINED CASH CREDIT BECAUSE THE APPELLANT HAS FILED ALL POSSIBLE DETAILS AVAILABLE WITH HIM AND IT WAS NOT IN HIS CONTROL TO PRODUCE THE LENDER S BECAUSE MOST OF THEM HAVE RECEIVED THEIR MONEY BACK . FURTHER AFTER FILING OF COPIES OF I.T. RETURNS AND BANK STATEMENTS AND OTHER DETAILS, ASSESSING OFFICER HAS PROCEEDED FOR COMPLETION OF ASSESSMENT WITHOUT CONDUCTING FURTHER ENQUIRY AND REACHED ON THE CONCLUSION. THERE WERE CASH DEPOSITS IN BANK ACCOUN T OF FOUR PERSONS BUT THE ASSESSING OFFICER HAS APPLIED THIS FACT IN RESPECT OF ALL DEPOSITS THAT THERE ARE CASH DEPOSITS IN THE BANK ACCOUNTS. SO THE CAPACITY OF THE DEPOSI TOR IS DOUBTFUL. THIS CONCLUSION OF THE ASSESSING OFFICER IS NOT CORRECT. HENCE, THE ASSESSING OFFICER IS DIRECTED T O DELETE ADDITION OF RS.17,50,000/- IN RESPECT OF 11 LENDERS FOR THE REASONS DISCUSSED ABOVE. 5. AGGRIEVED, REVENUE IS IN APPEAL BEFORE US. WE H AVE HEARD THE LEARNED DR AS WELL AS THE LEARNED COUNSEL IN TH IS REGARD AND CAREFULLY PERUSED THE RECORD. IT IS NOT IN DISPUTE THAT ASSESSEE HAS FURNISHED BASIC INFORMATION WITH REGARD TO THE CRED ITORS AND THUS DISCHARGED THE ONUS PLACED UPON IT UNDER SECTION 68 OF THE ACT. IN OTHERWORDS, ONCE THE PARTICULARS REGARDING THE INCO ME TAX ASSESSMENT, BANK ACCOUNT ETC., WERE FURNISHED BURDE N OF PROOF UNDER SECTION 68 STANDS DISCHARGED AND GETS SHIFTED TO TH E DEPARTMENT TO PROVE THAT WHATEVER WAS EXPLAINED BY THE ASSESSEE I S NOT SATISFACTORY. IN THE INSTANT CASE, NO MATERIAL WAS BROUGHT ON REC ORD BY THE DEPARTMENT TO SHOW THAT WHAT WAS EXPLAINED BY THE A SSESSEE IS NOT THE CORRECT STATE OF AFFAIRS. SINCE, WE ARE IN AGRE EMENT WITH THE DETAILED REASONS GIVEN BY THE CIT(A) AND IN THE ABS ENCE OF ANY MATERIAL ON RECORD, PLACED BY THE LEARNED D.R., TO CONTRADICT THE FINDINGS OF THE LEARNED CIT(A), WE ARE OF THE VIEW THAT THE ORDER PASSED BY THE LEARNED CIT(A) DOES NOT CALL FOR ANY INTERFERENCE. ITA.NO.2852/M/2010 M/S. PAPIER PRINTS 4 6. IN THE RESULT, AS PRONOUNCED IN THE OPEN COURT, WE DISMISS THE APPEAL FILED BY THE REVENUE. SD/- SD/- (PRAMOD KUMAR) (D.MANMOHAN) ACCOUNTANT MEMBER VICE PRESIDENT MUMBAI, DATE 28 TH JULY, 2011 VBP/- COPY TO 1. ITO 24(3)(4), R.NO.706, C-11, 7 TH FLOOR, B.K.C. BANDRA (E) MUMBAI 400 051. 2. M/S. PAPIER PRINTS, SHOP NO.105, 1 ST FLOOR, AMIN INDL. ESTATE, SONAWALA X. LANE, GOREGAON (E), MUMBAI 63 PAN AAIFP3733F 3. CIT(A)-34, C-10, R.NO.709, PRATYAKSHA KAR BHAVAN , BANDRA-KURLA COMPLEX, MUMBAI-400 051. 4. CIT-24, MUMBAI 5. DR C BENCH 6. GUARD FILE TRUE COPY BY ORDER ASST. REGISTRAR, ITAT, MUMBAI BENCHES MUMBAI.