The ITO, Ward-3(1), Surat V. Shri Tejas Brujkumar Poddar, Surat

ITA 2900/AHD/2009

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 6140 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 8 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-07-2011
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2006-2007
• Appeal Filed On: 22-10-2009
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: G S SOURYAWANSHI
• Keywords: Unexplained cash credit
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL : C BE NCH : AHMEDABAD (BEFORE HONBLE SHRI T.K. SHARMA, J.M. & HON BLE SHRI A. MOHAN ALANKAMONY,A.M.) I.T.A. NO. 2900/AHD./2009 ASSESSMENT YEAR : 2006-2007 I.T.O., WARD-3(1), SURAT VS- SHRI TEJAS BRIJKUMAR PODDAR, SURAT (PAN : AAXPP 9717G) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI G.S.SOURYAWANS HI, SR.D.R. RESPONDENT BY : NONE O R D E R PER SHRI T.K. SHARMA, JUDICIAL MEMBER : THIS APPEAL IS FILED BY THE REVENUE AGAINST THE OR DER DATED 17-07-2009 OF LD. COMMISSIONER OF INCOME TAX(APPEALS)-II, SURAT DELET ING THE ADDITION MADE BY THE A.O. OF RS.9,12,834/- ON ACCOUNT OF UNEXPLAINED CASH CRE DITS UNDER SECTION 68 OF THE I.T. ACT, 1961 FOR THE ASSESSMENT YEAR 2006-07. 2. DESPITE SERVICE OF NOTICE THROUGH REGISTERED POS T WITH ACKNOWLEDGEMENT DUE, NEITHER ANYBODY APPEARED FROM THE SIDE OF THE ASSES SEE NOR AN APPLICATION FOR ADJOURNMENT WAS RECEIVED. WE, THEREFORE, PROCEED TO DECIDE THIS APPEAL, ON THE BASIS OF SUBMISSIONS MADE BY THE LD. D.R. AND THE MATERIALS AVAILABLE ON RECORD. 3. BRIEFLY STATED, THE FACTS ARE THAT THE ASSESSEE IS AN INDIVIDUAL. FOR THE ASSESSMENT YEAR UNDER APPEAL, HE FILED THE RETURN OF INCOME ON 17.10.2006 DECLARING TOTAL INCOME AT RS.2,20,328/-. DURING THE COURSE OF ASSESSMENT PROC EEDINGS, THE AO NOTICED THAT THE ASSESSEE HAS ACCEPTED NEW DEPOSITS OF RS.4,67,834/- , RS.25,000/- AND RS.4,20,000/- FROM M/S. SHREE RAWAT TEXTILES, DURGADATT KASHIRAM (HUF) AND M/S. GOVINDJI PATEL & CO. RESPECTIVELY. THE AO ASKED THE ASSESSEE TO FURNISH CONFIRMATION OF EACH DEPOSIT ALONG WITH THEIR NAMES AND ADDRESSES, PAN AND ASKED TO DI SCHARGE THE ONUS AS PER SECTION 68 OF THE I.T. ACT, 1961. NO DETAILS WERE FURNISHED. I N RESPONSE TO ONE MORE OPPORTUNITY, THE ITA NO.2900/AHD/2009 2 ASSESSEE SUBMITTED THE CONFIRMATIONS OF THE SAID TH REE DEPOSITORS. ON PERUSAL OF THE SAME, THE AO OBSERVED THAT THE CONFIRMATION OF M/S. SHREE RAWAT TEXTILES DOES NOT BEAR PAN. HENCE, THE IDENTITY OF THE DEPOSITOR IS NOT PROVED. FURTHER, THE AO FOUND FROM THE CONFIRMATION OF DURGADATT KASHIRAM (HUF) THAT THE S AID CONFIRMATION IS NOT SIGNED BY THE DEPOSITOR BUT THE ASSESSEE SHRI TEJAS PODDAR, H IMSELF HAS PUT HIS TWO SIGNATURES ON THIS CONFIRMATION AS A DEPOSITOR AND AN ASSESSEE. 3.1 AFTER CONSIDERING THE AFORESAID PARTICULARS, TH E AO OBSERVED THAT IN THE DETAILS, THE ASSESSEE HAS NEITHER SUBMITTED THE COPY OF ROI FILE D BY THE DEPOSITORS SO AS TO PROVE THE IDENTITY OF THE DEPOSITORS, BANK STATEMENTS OF THE DEPOSITORS AS TO ESTABLISH THE GENUINENESS OF TRANSACTIONS AND BALANCE SHEET OF TH E SAID DEPOSITORS AS TO PROVE AND CREDITWORTHINESS OF THE SAID DEPOSITORS NOR PRODUCE D THE DEPOSITORS FOR EXAMINATION. THEREFORE, IT IS ESTABLISHED THAT THE ASSESSEE HAS NOT PROVED THE IDENTITY, GENUINENESS OF THE TRANSACTIONS AND CREDITWORTHINESS IN RESPECT OF THE ABOVE DEPOSITORS. THUS, IT IS PROVED THAT THE ASSESSEE HAS INTRODUCED HIS UNACCOU NTED INCOME IN FORM OF CASH CREDITS BY USING THE NAMES OF THE AFORESAID CREDITORS, WHIC H IS NOTHING BUT ACCOMMODATION ENTRY. THEREAFTER, THE AO, AFTER DISCUSSING THE PROVISIONS CONTAINED IN SECTION 68 OF THE I.T. ACT, TREATED THE CASH CREDIT AS UNEXPLAINED CASH CR EDIT UNDER SECTION 68 OF THE I.T. ACT AND ADDED TO THE TOTAL INCOME OF THE ASSESSEE. 4. ON APPEAL BEFORE THE LD. CIT(A), THE ASSESSEE CO NTENDED THAT M/S. SHREE RAWAT TEXTILES IS A PROPRIETORSHIP FIRM OF SMT. ANSHUYA P ODDAR WHO IS THE MOTHER OF THE ASSESSEE. HER PAN WAS SHOWN ON THE ACCOUNT CONFIRMA TION. THE ASSESSEE IS THE KARTA OF DURGADATT KASHIRAM (HUF) AND HENCE, HAD SIGNED T HE CONFIRMATION BOTH AS THE DEPOSITOR AND ALSO IN HIS INDIVIDUAL CAPACITY AS TH E RECIPIENT. HENCE, THE AO WAS NOT JUSTIFIED IN REJECTING THE CONFIRMATION OF M/S. SHR EE RAWAT TEXTILES AND OF DURGADATT KASHIRAM (HUF). THE ASSESSEE FURTHER POINTED OUT TH AT THE AO HAD NOT MADE ANY COMMENT ON THE CONFIRMATION FURNISHED BY M/S. GOVIN DJI PATEL & CO. HENCE, THE ASSESSEE CONCLUDED THAT THE AO WAS NOT JUSTIFIED IN TREATING SUCH DEPOSITS AS UNEXPLAINED CASH CREDITS IN TERMS OF SECTION 68 OF THE I.T.ACT. ITA NO.2900/AHD/2009 3 4.1 AFTER CONSIDERING THE AFORESAID SUBMISSIONS, IN THE IMPUGNED ORDER, THE LD. CIT(A) DELETED THE ADDITION FOR THE DETAILED REASON S GIVEN IN PARA 6, WHICH IS REPRODUCED HEREUNDER: 6. I HAVE CAREFULLY CONSIDERED THE FINDINGS AND CON CLUSION OF THE AO AS ALSO THE SUBMISSIONS OF THE AR ALONG WITH THE COPIES OF ACCO UNT CONFIRMATIONS FILED BY HIM. I HAVE ALSO EXAMINED THE ASST. RECORDS. FIR STLY, THE ACCOUNT CONFIRMATION OF SMT. ANSHUYA PODDAR AS THE PROPRIETOR OF M/S. SHREE RAWAT TEXTILES SHOWS HER PAN AS AAZPP9612Q. THE CONFIRMATION OF DURG ADATT KASHIRAM (HUF) WAS NECESSARILY TO BE SIGNED BY THE ASSESSEE BOTH AS THE KARTA AND THE DEPOSITOR AS ALSO IN HIS CAPACITY AS THE RECIPIENT OF THE DEP OSIT. SIMILARLY M/S. GOVINDJI PATEL & CO. HAD ALSO CONFIRMED THE TRANSACTION WITH THE ASSESSEE. WHAT IS ALSO TO BE SEEN IS THAT, ALL THE CONFIRMATIONS DULY REFLECT ED THE PAN OF THE CONFIRMING PARTY. THE PAYMENTS WERE ALL MADE BY CHEQUES AND IN ALL THE CASES, THERE WERE BOTH DEBIT AND CREDIT ENTRIES WHICH MEANS THAT THER E WAS REGULAR TRANSACTIONS BETWEEN THE ASSESSEE AND THE SAID THREE PARTIES. TH E ASST. RECORDS SHOW THAT CONIES OF THE BANK ACCOUNTS OF THE DEPOSITORS AND T HE ACKNOWLEDGMENTS OF RETURNS OF INCOME FILED BY THEM WERE ALSO FURNISHED. THIS M EANS THAT THEIR IDENTITY AND CREDITWORTHINESS WAS ESTABLISHED AND SO WAS THE GEN UINENESS OF THE TRANSACTIONS. GIVEN SUCH FACTS AND CIRCUMSTANCES OF THE CASE, I A M OF THE VIEW THAT THERE WAS SIMPLY NO BASIS FOR THE AO TO TREAT SUCH DEPOSITS A S UNEXPLAINED UNDER THE PROVISIONS OF SEC.68 OF THE IT ACT. THE AO IS THERE FORE DIRECTED TO DELETE THE ADDITION OF RS.9,17,935. 5. AT THE TIME OF HEARING, ON BEHALF OF THE REVENUE , SHRI G.S.SOURYAWANSHI, SR.D.R. APPEARED AND POINTED OUT THAT BEFORE THE AO, THE AS SESSEE HAS NOT DISCHARGED THE ONUS AS LAID DOWN UNDER SECTION 68 OF THE I.T. ACT, 1961. T HE EXPLANATION, WHICH IS FURNISHED BEFORE THE LD. CIT(A), WAS NOT FURNISHED BEFORE THE AO. BEFORE THE AO, THE ASSESSEE HAS NEVER EXPLAINED THAT SMT. ANSHUYA PODDAR IS THE PRO PRIETOR OF M/S. SHREE RAWAT TEXTILES AND HER PA NO. IS THIS. IT WAS ALSO NOT EXPLAINED T O THE AO THAT CONFIRMATION OF DURGADATT KASHIRAM (HUF) IS SIGNED BY THE ASSESSEE HIMSELF BECAUSE HE IS THE KARTA OF HUF. PA NUMBER OF M/S. GOVINDJI PATEL & CO. WAS ALS O NOT FURNISHED. THE LD. D.R. POINTED OUT THAT WHEREVER THE CREDITOR WAS NOT HAVI NG PA NUMBER, IT WAS THE DUTY OF THE ASSESSEE TO FURNISH THE BANK ACCOUNT AND OTHER DETA ILS , SOURCE OF INVESTMENT, ETC. ON FRESH EXPLANATION, THE LD. CIT(A) DID NOT CALL THE REMAND REPORT, HE ACCORDINGLY SUGGESTED THAT EITHER THE ORDER BE SET ASIDE OR THE MATTER BE REMANDED TO THE AO WITH THE DIRECTION THAT THE ASSESSEE SHOULD FURNISH ALL THE DETAILS WHICH WERE FURNISHED BEFORE THE ITA NO.2900/AHD/2009 4 LD. CIT(A) AND THE AO WILL EXAMINE THE SAME AND RE- ADJUDICATE THE MATTER, IN ACCORDANCE WITH LAW. 6. AFTER HEARING BOTH THE SIDES, WE HAVE CAREFULLY GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. IT IS PERTINENT TO NOTE THAT BEF ORE THE AO, THE ASSESSEE HAS NOT DISCHARGED THE ONUS AS LAID DOWN IN SECTION 68 OF T HE I.T. ACT, 1961. THE EXPLANATION/ DETAILS, WHICH WERE FILED BEFORE THE LD. CIT(A), WE RE NOT FURNISHED BEFORE THE AO. NO REMAND REPORT WAS ALSO CALLED BY THE LD. CIT(A) FRO M THE AO. IN THESE CIRCUMSTANCES, WE SET ASIDE THE ORDER OF THE LD. CIT(A) AND RESTORE T HE MATTER BACK TO THE FILE OF THE AO, WHO WILL EXAMINE THE EXPLANATIONS/DETAILS FURNISHED BY THE ASSESSEE AND RE-ADJUDICATE THE MATTER, IN ACCORDANCE WITH LAW, AFTER GIVING OPPORT UNITY OF BEING HEARD TO BOTH THE SIDES. 7. IN THE RESULT, FOR STATISTICAL PURPOSES, THE APP EAL FILED BY THE REVENUE IS TREATED AS ALLOWED. THE ORDER PRONOUNCED IN THE CO URT ON 08.07.2011 SD/- SD/- (A. MOHAN ALANKAMONY) (T.K. SHARMA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 08/07/2011 COPY OF THE ORDER IS FORWARDED TO:- (1) THE ASSESSEE (2) THE DEPARTMENT. (3) CIT (A.) CONCERNED. (4) CIT CONCERNED. (5) D.R., ITAT, AHMEDABAD. TRUE COPY BY ORDER DEPUTY REGISTRAR, ITAT, AH MEDABAD. TALUKDAR/ SR. P.S.