Shri Pramod Kumar Jain, Bhopal V. The ACIT 2(1), Bhopal

ITA 30/IND/2013

• Counselvise Citation: 3022714 RSA 2013
• Duration Of Justice: 2 year(s) 10 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-11-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 29-10-2015
• Assessment Year: 2001-2002
• Appeal Filed On: 17-01-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R R MEENA
• Assessee Lawyers: N D PATWA S
• Keywords: Unexplained cash credit; Opportunity of being heard
• Section: 131; 68

Judgement Text

ITA NO.30 OF 2013 1 PRAMOD KUMAR JAIN IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI D.T. GARASIA, JUDICIAL MEMBER AND SHRI B.C. MEENA, ACCOUNTANT MEMBER ITA NO.30/IND/2013 A.Y. 2001-02 PRAMOD KUMAR JAIN, PROP. M/S. VINOD KUMAR PRAMOD KUMAR, BHOPAL PAN AANPJ 6125 E :: APPELLANT VS ACIT-2(1), BHOPAL :: RESPONDENT ASSESSEE BY SHRI ASHISH GOYAL AND SHRI N.D. PATWA, ADVOCATES RESPONDENT BY SHRI R.R. MEENA, DR DATE OF HEARING 29.10.2015 DATE OF PRONOUNCEMENT 17.11.2015 O R D E R PER SHRI B.C. MEENA, AM THIS APPEAL IS FILED BY THE ASSESSEE CHALLENGING T HE ORDER OF LD. CIT(A)- I, BHOPAL, DATED 12.11.2012. THE SUM & SUBSTANCE OF THE GROUNDS OF APPEAL IS THAT LD. CIT(A) HAS ERRED IN CONFIRMING THE ADDITIO N OF RS.33,42,360/- OUT OF TOTAL ADDITION OF RS.35,98,568/- BEING UNEXPLAINED CASH CREDIT U/S 68 OF THE I.T. ACT. 2. FACTS, IN BRIEF, ARE THAT THE ASSESSEE DEALS IN GRAINS AND OILS SEEDS. ASSESSEE FILED THE RETURN ON 30.10.2001 SHOWING INC OME OF RS.1,74,990/-. ITA NO.30 OF 2013 2 PRAMOD KUMAR JAIN THE ORIGINAL ASSESSMENT WAS COMPLETED U/S 144/143(3 ) ON 24.3.2004 AT AN INCOME OF RS.47,97,390/-. IN THE ORIGINAL ASSESSMEN T, BESIDES OTHER ADDITIONS, THERE WAS ADDITION OF RS.35,98,568/- FOR OUTSTANDIN G FARMER CREDITORS. LD. CIT(A) DELETED THE SAME VIDE ORDER DATED 27.7.2005 BUT ITAT, INDORE RESTORED THE SAME TO THE FILE OF THE AO VIDE ORDER DATED 19. 12.2008 DIRECTING THE AO TO RE-EXAMINE THE ISSUE DE NOVO AFTER PROVIDING SUFFIC IENT OPPORTUNITY TO THE ASSESSEE AND ASSESSEE WAS ALSO DIRECTED TO COOPERAT E WITH THE AO. IN THE SECOND ROUND, THE AO NOTED THAT ASSESSEE HAS SUBMIT TED THE DETAILED SUBMISSION REGARDING SUNDRY FARMER CREDITORS BUT NO T A SINGLE FARMER CREDITOR HAS BEEN PRODUCED BY THE ASSESSEE. THEREFORE, THE A O AGAIN MADE ADDITION OF RS.35,98,568/- U/S 68 OF THE I.T. ACT BEING UNEX PLAINED CASH CREDITS. AGAINST THE ACTION OF THE AO, THE ASSESSEE PREFERRE D AN APPEAL BEFORE THE LD. CIT(A). LD. CIT(A) NOTED THAT ONE FARMER CREDITOR S HRI GOVIND SINGH APPEARED BEFORE THE AO AND CONFIRMED THE AMOUNT OF RS.1,34,6 18/- OUTSTANDING AS ON 31.3.2001 AND SECOND CREDITOR FARMER SHRI SOVERAN S INGH HAD FURNISHED WRITTEN SUBMISSION IN RESPONSE TO SUMMONS CONFIRMIN G THAT THERE WAS OUTSTANDING BALANCE OF RS.1,21,590/- IN HIS CASE AS ON 31.3.2001 WITH THE ASSESSEE. THEREFORE, LD. CIT(A) WAS OF THE VIEW THA T THE CREDITS IN THE NAME OF THESE TWO PERSONS AMOUNTING TO RS.2,56,208/- [RS.1, 34,618 + RS.1,21,590] STAND EXPLAINED BUT THE BALANCE AMOUNT OF RS.33,42, 360/- IN THE NAME OF OTHER 26 CREDITORS REMAINED UNEXPLAINED. THEREFORE, HE CONFIRMED THE ADDITION TO THE EXTENT OF RS.33,42,360/-. STILL AGGRIEVED, T HE ASSESSEE IS IN APPEAL BEFORE US. ITA NO.30 OF 2013 3 PRAMOD KUMAR JAIN 3. THE LD. COUNSEL FOR THE ASSESSEE HAS REITERATED THE SUBMISSIONS MADE BEFORE AUTHORITIES BELOW AND FURTHER CONTENDED THAT ASSESSEE IS REGULARLY ASSESSED TO TAX SINCE LONG. BOOKS OF ACCOUNT ARE PR OPERLY MAINTAINED, WHICH ARE AUDITED U/S 44AB OF THE I.T. ACT AND AUDIT REPO RT ALONG WITH AUDITED FINAL ACCOUNTS WERE FILED WITH THE RETURN OF INCOME. ITAT HAD, VIDE ORDER DATED 19.12.2008, DIRECTED THE AO TO PROVIDE SUFFICIENT O PPORTUNITY TO THE ASSESSEE BUT THE AO, AFTER ONE YEAR, ISSUED THE NOTICE U/S 1 43(2) ON 14.11.2009 FIXING THE DATE OF HEARING ON 30.11.2009 THOUGH THE CASE W AS GETTING TIME BARRED ON 31.12.2009. THEREAFTER, THE ASSESSEE WAS ASKED TO P RODUCE THE FARMERS ON 7.12.2009. THE TIME WAS CLEARLY VERY SHORT AND AS S UCH, THE ASSESSEE WAS UNABLE TO PRODUCE THE CREDITORS, WHO ARE FARMERS IN VARIOUS VILLAGES, AFTER A LAPSE OF MANY YEARS. REPLY IS FILED AT PAGE 68 OF T HE PAPER BOOK. IN REMAND REPORT, THE AO STATED THAT ASSESSEE COULD NOT PRODU CE THE CREDITORS AND SUMMONS WERE ALSO BACK AS UN-SERVED. THEREFORE, ASS ESSEE APPLIED TO THE AO FOR PROVIDING COPY OF RETURNED ENVELOPS OR THE R EASONS FOR WHICH SAID ENVELOPES WERE NOT SERVED. BUT, SAME WERE NOT PROVI DED TO THE ASSESSEE. LD. CIT(A) DID NOT APPRECIATE THE SAME AND CONFIRMED AD DITION FOR 26 FARMER CREDITORS OUT OF 28 CREDITORS. PRODUCTION OF FARME RS AFTER A LAPSE OF MANY YEARS WAS IMPOSSIBLE AS THESE PERSONS LIVE IN VARIO US SMALL VILLAGES. THEY HAVE NO CONTACTS WITH THE ASSESSEE. THEY HAVE NO OB LIGATION WITH THE ASSESSEE AND ASSESSEE CANNOT FORCE THEM TO APPEAR B EFORE THE DEPARTMENT. TO ESTABLISH THE CREDITS, THE ASSESSEE HAS GIVEN SU FFICIENT MATERIAL LIKE, NAME & ADDRESS, MANDI RECEIPTS, ENTRY IN MANDI REGISTERS (CHUKARA REGISTER), ITA NO.30 OF 2013 4 PRAMOD KUMAR JAIN RECEIPTS ISSUED BY CONCERNED PERSONS, COPY OF ACCOU NT, BHU ADHIKAR AND RIN PUSTIKA, CONFIRMATION LETTERS/AFFIDAVITS ETC. THUS, THE ASSESSEE HAS DISCHARGED ITS BURDEN. PURCHASES AND EVIDENCES THEREOF HAVE NO T BEEN DOUBTED BY THE REVENUE AUTHORITIES BY BRINGING ANY COGENT MATERIAL ON RECORD. THEREFORE, ADDITION IS NOT JUSTIFIED. ON THE OTHER HAND, LD. D R RELIED ON THE ORDERS OF THE REVENUE AUTHORITIES. 4. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL AVAILABLE ON RECORD AND FIND THAT ASSESSEE HAS DISCHARGED ITS ON US BY FILING ALL THE POSSIBLE EVIDENCES LIKE NAME & ADDRESS, MANDI RECEIPTS, ENTR Y IN MANDI REGISTERS (CHUKARA REGISTER), RECEIPTS ISSUED BY CONCERNED PE RSONS, COPY OF ACCOUNT, BHU ADHIKAR AND RIN PUSTIKA, CONFIRMATION LETTERS/A FFIDAVITS ETC. IN THE PRESENT CASE, THE AO HAS NOT PROVED THAT THE CREDITS ARE BO GUS OR THE EVIDENCES THEREOF ARE NOT GENUINE. THESE ARE TRADE CREDITS FO R THE PURCHASES OF GOODS. THE PURCHASES HAVE NOT BEEN DOUBTED BY THE REVENUE AUTHORITIES. DESPITE, LD. CIT(A) HAS ACCEPTED A PART OF THE TRANSACTION A ND DISREGARDED REMAINING PART OF TRANSACTION. CONFIRMATION LETTERS/AFFIDAVIT S OF 13 PERSONS (PAGES 84, 90, 96, 101, 106, 22, 23, 24, 25, 27, 28, 29, 30 OF PAP ER BOOK) HAVE NOT BEEN APPRECIATED BY THE REVENUE AUTHORITIES WITHOUT BRIN GING ANY COGENT MATERIAL ON RECORD. FURTHER, IN REMAINING 13 PERSONS, THE TR ANSACTION IS CONFIRMED BY WAY OF SIGNATURE IN THE RECEIPTS BY THE TRADE CREDI TORS AND ALSO IN MANDI BILLS & ENTRY IN MANDI REGISTER. THE LAND OWNERSHIP IS ALSO PROVED BY BHU ADHIKAR & RIN PUSTIKA. THE RELEVANT PAPERS ARE FILED BETWEEN PAGE NOS. 116 TO 249 OF THE PAPER BOOK. ON PERUSAL OF THE SAME, THE TRADE C REDITS ARE PROVED TO BE ITA NO.30 OF 2013 5 PRAMOD KUMAR JAIN GENUINE AS DEPARTMENT HAS NOT DOUBTED/PROVED THE PU RCHASES AS BOGUS. FURTHER, ITAT HAD DIRECTED THE AO TO PROVIDE SUFFIC IENT OPPORTUNITY OF BEING HEARD TO THE ASSESSEE BUT THE AO, IN SET-ASIDE PROC EEDINGS, ASKED THE ASSESSEE ON 30.11.2009 TO PRODUCE THE FARMERS WITHI N 7 DAYS. IN SUCH SHORT SPAN OF TIME, THE ASSESSEE WAS UNABLE TO PRODUCE TH E CREDITORS AFTER A LAPSE OF MANY YEARS AS THESE PERSONS LIVE IN VARIOUS SMAL L VILLAGES. THEY HAVE NO CONTACTS WITH THE ASSESSEE. THEY HAVE NO OBLIGATION WITH THE ASSESSEE AND ASSESSEE CANNOT FORCE THEM TO APPEAR BEFORE THE DEP ARTMENT. REPLY IN THIS REGARD WAS ALSO FILED BEFORE THE AO AS WELL AS LD. CIT(A). SUMMONS U/S 131 OF THE I.T. ACT WERE ISSUED ON THE REQUEST OF THE ASSE SSEE, WHICH WERE SERVED ON THREE CREDITORS, OUT OF WHICH, TWO ACCEPTED THE TRA NSACTION. THE AO CONTENDED THAT OTHER SUMMONS COULD NOT BE SERVED, THEREFORE, ASSESSEE APPLIED TO THE AO FOR PROVIDING COPY OF RETURNED ENVELOPS OR THE R EASONS FOR WHICH SAID ENVELOPES WERE NOT SERVED. BUT, SAME WERE NOT PROVI DED TO THE ASSESSEE. COPY OF THE LETTER IS FILED BEFORE US. LD. CIT(A) F AILED TO APPRECIATE THE SAME AND CONFIRMED ADDITION FOR 26 FARMER CREDITORS OUT OF 28 CREDITORS. FURTHER, THE RATIO LAID DOWN IN THE FOLLOWING CASES SUPPORTS THE CASE OF THE ASSESSEE: 1. ITO VS. M.M. NAWATIA, 9 ITJ 657 (INDORE) 2. S. HASTIMAL, 49 ITR 273 (MAD.) 3. CIT VS. SANTOSH JAIN, 17 ITJ 129 (MP) 4. ORISSA CORPORATION P. LTD. (1986) 159 ITR 78 (SC ) 5. CIT VS. BARJATIYA CHIDREN TRUST, 225 ITR 640 (MP ) 6. ITO VS. BHARAT KUMAR MULTANI, 12 ITJ 765 (JAB.) 5. ON CONSIDERATION OF ABOVE FACTS AND CIRCUMSTANCE S, NATURE OF BUSINESS, JUDICIAL PRONOUNCEMENTS, SUBMISSIONS AND DISCUSSION THEREOF, WE ARE OF THE ITA NO.30 OF 2013 6 PRAMOD KUMAR JAIN VIEW THAT ASSESSEE HAS DISCHARGED ITS BURDEN. ASSES SEE HAS DONE WHATEVER WAS POSSIBLE. THE PURCHASES AND ALL THE EVIDENCES T HEREOF ON RECORD WERE NOT DOUBTED/PROVED BY THE REVENUE AUTHORITIES AS BOGUS BY BRINGING ANY COGENT MATERIAL ON RECORD. THUS, ALL THE TRADE CREDITS STA ND EXPLAINED. ACCORDINGLY, WE DELETE THE ADDITION. 6. IN THE RESULT, THE APPEAL IS ALLOWED. ORDER WAS PRONOUNCED IN THE OPEN COURT ON 17.11.201 5. SD/- ( D.T. GARASIA) JUDICIAL MEMBER SD/- (B.C. MEENA) ACCOUNTANT MEMBER DATED : 17.11.2015 !VYS! COPY TO: APPELLANT/RESPONDENT/CIT(A)/CIT/DR, INDORE