The ITO, Ward-8(2), Ahmedabad V. Silicon Securities Pvt. Ltd., Pune

ITA 3017/AHD/2014

• Counselvise Citation: [2022] 105 COUNSELVISE.COM (IT) 0322 (ITAT-PUNE)
• Duration Of Justice: 7 year(s) 7 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-07-2022
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 13-11-2014
• Result in Favour of: Matter Remanded
• Court: TRIBUNAL
• Keywords: Unexplained cash credit
• Section: 68; 144

Judgement Text

आयकर अपीऱीय अधिकरण “ए” न्यायपीठ पुणे में । IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, PUNE BEFORE SHRI S.S.GODARA, JM AND SHRI DR. DIPAK P. RIPOTE, AM आयकर अपीऱ सं. / ITA No.3017/AHD/2014 ननधधारण वषा / Assessment Year : 2009-10 ITO, Wd-8(2), Ahmedabad .......अपऩलधथी / Appellant बनधम / V/s. M/s. Silicon Securities Pvt. Ltd., B-11, Kumar Medoeus, Opp. Sagar Inn Hotel, Pune-412 037 PAN : AACCS6529H ......प्रत्यथी / Respondent Assessee by : Shri Ashok N. Kothary Revenue by : Shri Anurag Shivastava सपनवधई की तधरऩख / Date of Hearing : 08.06.2022 घोषणध की तधरऩख / Date of Pronouncement : 06.07.2022 आदेश / ORDER PER S. S. GODARA, JM : 1. This Revenue’s appeal for A.Y. 2009-10 is directed against the CIT(A) - XIV, Ahmadabad’s order dated 11/08/2014 passed in case No. CIT(A) - XIV/Ward-8(2)/113/2012-13 involving proceeding u/s. 144 r.w.s. 147 of the Income Tax Act, 1961 ; in short “the Act”. Heard both the parties. Case file perused. 2 ITA No.3017/AHD/2014, A.Y. 2009-10, M/s. Silicon Securities Pvt. Ltd., 2. The Revenue pleads the following revised grounds in the instant appeal. “1. The CIT (A) erred both on facts and in law in passing the order. 2. The CIT (A) erred in accepting the additional evidence during the appellate proceedings contrary to the provisions of Rule 46A as none of the conditions of Rule 46A of Income Tax Rules, 1962 have been fulfilled. 3. The CIT (A) erred in deleting addition being unexplained share capital of Rs. 1,56,35,000/-, unexplained share application money of Rs. 25,00,000/- and share premium of Rs. 2,22,65,000/- u/s 68 of the Income-tax Act, 1961. 4. The CIT (A) erred in deleting the addition (made on account of unproved cash credits under section 68 of the Income-tax Act, 1961) being unsecured loans of Rs.2,04,00,000/-, even though the parties namely, M/s Green Star Financial Services Pvt. Ltd., M/s Suraj Corporate Services Pvt. Ltd., M/s Archer Financial Hospitality Services Pvt. Ltd., M/s Chopra Yarns Pvt. Ltd. and M/s. Rohnik Hospitality Services Pvt. Ltd. failed to prove their identity, creditworthiness and genuineness. 5. The CIT (A) erred in treating the parties i.e. M/s Green Star Financial Services Pvt. Ltd., M/s Suraj Corporate Services Pvt. Ltd., M/s Archer Financial Hospitality Services Pvt. Ltd., M/s Chopra Yarns Pvt. Ltd. and M/s. Rohnik Hospitality Services Pvt. Ltd. as genuine, even though the Assessing Officer had proved the non- genuineness of these parties in assessment proceedings as well as in the Remand Report after conducting detailed enquiries. 6. The CIT (A) erred in deleting the addition of Rs 9,28,00,000/- on account of investment in Mutual Funds & Units as the assessee could not prove the sources even during remand proceedings. 3 ITA No.3017/AHD/2014, A.Y. 2009-10, M/s. Silicon Securities Pvt. Ltd., Further, some investment was claimed to be from exempted income. Had this information been with A.O. he could have explored possibility of disallowance u/s 14A. The CIT(A) ought to have taken this issue into consideration when this issue was brought to his notice. 7. For these and such other reasons as may be urged at the time of hearing, the order of the CIT(A) may be vacated and that of the Assessing Officer be restored.” 3. We first of all come to the former issue of section 68 unexplained share capital of Rs.1,56,35,000/-, share application money of Rs.25,00,000/- and share premium of Rs.2,22,65,000/-; respectively. There is hardly any dispute between the parties that the Assessing officer had framed his section 144 r.w.s. 147 assessment / reassessment dated 30.11.2011 ex-parte after holding that the assessee had failed to even respond to his various show cause notices asking it to prove identity, genuineness and creditworthiness of the concerned parties. The assessee thereafter appears to file its additional evidence and Rule 46A of the Income Tax Rules. The CIT(A) had asked the Assessing Officer to submit his remand report. A perusal of the CIT(A) detailed discussion suggests that the said remand report came to be filed on 17.10.2013 at the first instance. This followed Assessing Officer’s further remand reports dated 27.03.2014, 31.03.2014 and 12.05.2014 in the next three instances. 4 ITA No.3017/AHD/2014, A.Y. 2009-10, M/s. Silicon Securities Pvt. Ltd., 4. We put a specific query to the assessee as to what manner it had proved genuineness of the impugned sums. Mr. Kothari took us to the assessee’s detailed paper book(s) mainly running to 85 pages as well as supplementary compilation that the assessee had duly filed all the relevant documentary evidence alongwith bench statements, confirmations, income tax returns, balance sheets, Profit & Loss accounts as well as audit reports of the concerned investor parties before the Assessing Officer in remand proceedings. 5. We have given our thoughtful consideration to the foregoing rival arguments and find merit in Revenue’s stand in principle. There is hardly any dispute that any evidence filed income tax proceedings has to considered in the light of human probabilities after removing all blinkers as held in Sumati Dayal V/s CIT 1995) 214 ITR 801(SC) and CIT V/s Durgaprasad More (1972) 82 ITR 540 (SC). Their lordships further hold in PCIT V/s. NRA Iron & Steel Pvt. LTd. (2019) 412 ITR161 (SC) that an assessee cannot discharge its burden in proving genuineness of such credits merely by filing the corresponding documents. The fact remains that the assessee herein had not produced the investor parties to prove the genuineness by satisfying all the relevant parameters. We therefore deem it appropriate to restore the instant issue unexplained cash credits back to the Assessing Officer with a clear cut direction that it shall be risk and responsibility of the assessee only to lead all evidence; at its own risk and responsibility, in the consequential proceedings within three effective opportunities of hearing. We order accordingly. The 5 ITA No.3017/AHD/2014, A.Y. 2009-10, M/s. Silicon Securities Pvt. Ltd., Revenue’s first and foremost substantive ground succeeds for statistical purposes. 6. Coming to Revenues’ second substantive ground of investments of Rs.9,28,00,000/- and source thereof, we are of the opinion the same must also follow the suit as the assessee had attributed source thereof the foregoing cash credits’ investment only in page 42 to 45 of the lower appellate discussion. Ordered accordingly. 7. This Revenues appeal is allowed for statistical purposes in above terms. Order pronounced in the Open Court on this 6 th day of July, 2022. Sd/- Sd/- (DR.DIPAK P.RIPOTE) (S.S. GODARA) लेखध सदस्य/ ACCOUNTANT MEMBER न्यधनयक सदस्य/JUDICIAL MEMBER पपणे / Pune; ददनधांक / Dated : 6 th July, 2022. Ashwini आदेश की प्रनतनलनप अग्रेनषत / Copy of the Order forwarded to : 1. अपऩलधथी / The Appellant. 2. प्रत्यथी / The Respondent. 3. The CIT(A)-XIV, Ahmadabad. 4. The CIT-IV, Ahmadabad. 5. नवभधगऩय प्रनतनननध, आयकर अपऩलऩय अनधकरण, “ए” बेंच, पपणे / DR, ITAT, “A” Bench, Pune. 6. गधर्ा फ़धइल / Guard File. आदेशधनपसधर / BY ORDER, // True Copy // Senior Private Secretary आयकर अपऩलऩय अनधकरण, पपणे / ITAT, Pune. 6 ITA No.3017/AHD/2014, A.Y. 2009-10, M/s. Silicon Securities Pvt. Ltd., S.No. Details Date Initials 1 Draft dictated on 08.06.2022 2 Draft placed before author 04.07.2022 3 Draft proposed & placed before the Second Member 4 Draft discussed/approved by Second Member 5 Approved Draft comes to the Sr. PS/PS 6 Kept for pronouncement on 7 Date of uploading of Order 8 File sent to Bench Clerk 9 Date on which the file goes to the Head Clerk 10 Date on which file goes to the A.R. 11 Date of Dispatch of order