The ACIT, Central Circle-2, Surat V. Shri Pravinbhai Mohanbhai Kheni, Surat

ITA 3018/AHD/2009

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 1147 (ITAT-AHMEDABAD)
• Duration Of Justice: 5 year(s) 9 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-08-2015
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 10-07-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 10-11-2009
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: VIBHA BHALLA
• Keywords: Question of law
• Section: 143(3); 68

Judgement Text

ITA NO.3018/AHD/200 9 ASSESSMENT YEAR 2006-07 PRAVINBHAI M. KHENI IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, AHMEDABAD BEFORE SHRI S.K. YADAV JUDICIAL MEMBER AND SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBE R I.T.A. NO.3018/AHD/200 9 (ASSTT. YEAR 2006-07) ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-2, AAYAKAR BHAVAN, MAJURA GATE, SURAT. VS SHRI PRAVINBHAI M. KHENI 73, SADHANA SOCIETY, VARACHHA ROAD, SURAT. PAN AFZPK 3277P (APPELLANT) (RESPONDENT) BY REVENUE SMT. VIBHA BHALLA, CIT (DR) BY ASSESSEE NONE / DATE OF HEARING : 10-07-2015 / DATE OF PRONOUNCEMENT : 31-08-2015 / O R D E R PER ANIL CHATURVEDI ACCOUNTANT MEMBER: THIS APPEAL FILED BY THE REVENUE IS AGAINST THE OR DER OF LD. CIT (A)-II, AHMEDABAD DATED 05-08-2009 FOR ASSESSMENT Y EAR 2006-07. 2. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERI AL ON RECORD ARE AS UNDER. ITA NO.3018/AHD/200 9 ASSESSMENT YEAR 2006-07 PRAVINBHAI M. KHENI 3. THE ASSESSEE IS AN INDIVIDUAL STATED TO BE A PAR TNER OF M/S. KANTILAL EXPORTS AND M/S.VIPUL & CO., AND DERIVING INCOME BY WAY OF SHARE OF PROFIT FROM THE AFORESAID FIRMS AND INTERE ST. THE ASSESSEE FILED HIS RETURN OF INCOME FOR ASSESSMENT YEAR 2006-07 ON 15-02-2007 DECLARING TOTAL INCOME OF RS.43,78,465/-.THE CASE W AS SELECTED FOR SCRUTINY AND THEREAFTER ASSESSMENT WAS FRAMED U/S. 143(3) VIDE ORDER DATED 3-12-2008 AND THE TOTAL INCOME WAS DETERMINED AT RS.39,82,30,180/-. AGGRIEVED BY THE ORDER OF ASSESS ING OFFICER THE MATTER WAS CARRIED BEFORE THE LD. COMMISSIONER OF I NCOME TAX (APPEALS) WHO VIDE ORDER DATED 5-8-2009 GRANTED PAR TIAL RELIEF TO THE ASSESSEE. AGGRIEVED BY THE AFORESAID ORDER OF CIT ( A), THE REVENUE IS NOW IN APPEAL BEFORE US AND HAS RAISED VARIOUS GROU NDS OF APPEAL WHICH WERE LATER ON CONCISED AND THE CONCISE GROUNDS READ S AS UNDER:- 1. THE LD. CIT (A) HAS ERRED IN LAW AND ON FACTS I N DELETING THE ADDITION OF RS.39,52,05,409/- MADE ON ACCOUNT OF UN EXPLAINED CASH CREDITS BY ACCEPTING THE GENUINENESS AND CREDI TWORTHINESS OF LOAN CREDITORS. 2. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN ACC EPTING THE CREDITWORTHINESS OF THESE LOAN CREDITORS EVEN WHEN THE ASSESSEE DID NOT GIVE ANY DETAILS ABOUT THE LOANS T AKEN AND SUNDRY CREDITORS OF THESE LOAN CREDITORS WHICH WOUL D HAVE EXPLAINED THE SOURCES OF LOANS GIVEN TO THE ASSESSE E AND ESTABLISHED THE CREDITWORTHINESS OF THE LOAN CREDIT ORS. 3. THE LD. CIT (A) HAS ERRED IN LAW AND ON FACTS IN NO T CONSIDERING THE DECISION OF HONBLE CALCUTTA HIGH COURT IN THE CASE OF CIT VS. PRECISION FINANCE PVT. LTD., 208 ITR 465 (CAL) AND THE DECISION OF HONBLE KERALA HIGH COURT IN THE CASE O F ITO VS. DIZA HOLDINGS PVT. LTD., 255 ITR 573 (KER) RELIED U PON BY THE ASSESSING OFFICER. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE CIT (A) OUGHT TO HAVE UPHELD THE ORDER OF THE A .O. ITA NO.3018/AHD/200 9 ASSESSMENT YEAR 2006-07 PRAVINBHAI M. KHENI 4. ON THE DATE OF HEARING NONE APPEARED ON BEHALF O F THE ASSESSEE NOR WAS ANY ADJOURNMENT APPLICATION FILED ON THEIR BEHALF. BEFORE US LEARNED D.R. SUBMITTED THAT ON EARLIER HEARING THAT WAS HELD ON 17-3- 2015, IT WAS BROUGHT TO THE NOTICE OF THE HONBLE B ENCH WHICH WAS HEADED BY HONBLE V.P. AS SENIOR MEMBER THAT THE AS SESSEE WAS IN THE HABIT OF SEEKING ADJOURNMENTS ON FRIVOLOUS GROUNDS. SHE SUBMITTED THAT AFTER CONSIDERING THE SUBMISSIONS OF D.R. TRIBUNAL HAD ADJOURNED THE CASE TO 10-7-2015 SUBJECT TO THE PAYMENT OF RS.1,00 0/- BY THE ASSESSEE TO THE DEPARTMENT AND IT WAS FURTHER ORDER ED BY THE BENCH THAT THE ADJOURNMENT GRANTED ON 17-3-2015 WOULD BE THE LAST ADJOURNMENT. LD. D. R. THEREFORE, SUBMITTED THAT SI NCE NONE HAS APPEARED ON BEHALF OF THE ASSESSEE DESPITE THE FACT THAT IN THE LAST HEARING IT WAS STATED TO BE LAST ADJOURNMENT, THE A PPEAL BE DECIDED ON THE BASIS OF SUBMISSIONS OF REVENUE AND NO ADJOURNM ENT BE GRANTED. THEREAFTER THE BENCH ENQUIRED FROM THE LD. D.R. ABO UT THE STATUS OF PAYMENT OF COST OF RS.1,000/- THAT WAS IMPOSED ON A SSESSEE BY THE BENCH ON PREVIOUS OCCASION TO WHICH LD. D.R. SUBMIT TED THAT SHE WAS NOT AWARE AS TO WHETHER THE ASSESSEE HAS PAID THE C OST AS DIRECTED BY THE CO-ORDINATE BENCH. ON PERUSAL OF THE RECORDS, WE FIND THAT THE ORDER OF THE BENCH DT. 17-3-2015 (WITH RESPECT TO I MPOSING COST OF RS.1,000/- AND IT BEING THE LAST ADJOURNMENT) WAS C OMMUNICATED TO THE ASSESSEE BY THE REGISTRY. BEFORE US THE ASSESSEE HA S NOT PLACED ANY EVIDENCE OF PAYMENT OF THE COST IMPOSED BY CO-ORDIN ATE BENCH NOR ANY ADJOURNMENT APPLICATION HAS BEEN FILED, WHICH SHOWS THE APATHY OF THE ASSESSEE TOWARDS THE JUDICIAL PROCEEDINGS. IN VIEW OF THE AFORESAID FACTS AND THE APPROACH OF ASSESSEE, WE PROCEED TO DISPOSE OF THE APPEAL EX- PARTE QUA THE ASSESSEE ON THE BASIS OF SUBMISSIONS OF LD. D.R. AND MATERIAL AVAILABLE ON RECORD. ITA NO.3018/AHD/200 9 ASSESSMENT YEAR 2006-07 PRAVINBHAI M. KHENI 5. THE LD. D.R. SUBMITTED THAT THOUGH VARIOUS GROUN DS HAVE BEEN RAISED BUT THE ISSUE IS ONLY ISSUE IS WITH RESPECT TO THE ADDITIONS ON ACCOUNT OF CASH CREDIT. 6. DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND ON PERUSING THE BALANCE SHEET, ASSESSING OFFICER NOTICED THAT THE A SSESSEE HAS OBTAINED CASH CREDITS OF DIFFERENT AMOUNTS FROM VARIOUS PERSONS, (THE LIST OF WHICH IS REPRODUCED BY THE ASSESSING OFFICER AT PAGE-5 OF TH E ORDER) AND THE AGGREGATE AMOUNT OF SUCH LOAN WAS RS.38,52,05,409/-. ASSESSIN G OFFICER ASKED THE ASSESSEE TO FURNISH THE CONFIRMATIONS, AGREEMENT WI TH THE CREDITORS IF ANY, NAMES AND POSTAL ADDRESSES OF THE PARTNERS TO WHICH A.O. NOTED THAT ASSESSEE HAS FAILED TO FURNISH THE REQUIRED DETAILS DESPITE VARIOUS OPPORTUNITIES GIVEN TO THE ASSESSEE. THE ASSESSING OFFICER THEREFORE, CONC LUDED THAT ASSESSEE HAS FAILED TO ESTABLISH THE IDENTITY OF THE CREDITORS AND THAT THE CREDITWORTHINESS OF THE LOAN GIVERS WERE UNVERIFIABLE AND DOUBTFUL. HE ACCORDINGLY CONCLUDED THAT ASSESSEE HAS FAILED TO PROVE TO THE SATISFACTION OF THE ASSESSING OFFICER THE REQUIREMENTS STIPULATED IN SECTION 68 OF THE INCOME TAX ACT AND ACCORDINGLY MADE ADDITION OF RS.32,32,05,409/-. 7. AGGRIEVED BY THE ORDER OF ASSESSING OFFICER THE ASSESSEE CARRIED THE MATTER BEFORE LD. CIT (A) WHO DELETED THE ADDITION BY HOLDING AS UNDER:- 3. I HAVE CONSIDERED THE FACTS AND THE SUBMISSIONS . I AGREE WITH THE APPELLANTS VIEW. THE HONBLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. ROHINI BUILDERS REPORTED AT 256 ITR 360, HELD AS UNDER: CASH CREDIT ASSESSEE FURNISHED COMPLETE ADDRESSE S OF ALL THE CREDITORS ALONG WITH GIR NUMBERS/PAN AS WELL AS CONFIRMATIONS ALONGWITH COPIES OF ASSESSMENT ORDERS PASSED IN THE CASES OF INDIVIDUAL CREDITORS, WHEREVER AVAI LABLE AND COPIES OF RETURNS FILED BY THE CREDITORS IN THE REM AINING CASES- ALL LOANS WERE RECEIVED AND REPAID BY ASSESS EE BY ACCOUNT PAYEE CHEQUES ALONGWITH INTEREST TRIBUNAL DELETED THE ADDITION- NO SUBSTANTIAL QUESTION OF LAW ARISES . ITA NO.3018/AHD/200 9 ASSESSMENT YEAR 2006-07 PRAVINBHAI M. KHENI FURTHER, IN THE CASE OF ARAVALI TRADING CO. VS. ITO 220 CTR 622, THE HONBLE RAJASTHAN HIGH COURT HELD, INCOME CAS H CREDIT-ONCE THE EXISTENCE OF THE CREDITORS IF PROVED AND SUCH P ERSONS OWN THE CREDITS WHICH ARE FOUND IN THE BOOKS OF THE ASSESSE E, THE ASSESSEES ONUS STANDS DISCHARGED AND THE LATTER IS NOT FURTHER REQUIRED TO PROVE THE SOURCE FROM WHICH THE CREDITO RS COULD HAVE REQUIRED THE MONEY DEPOSITED WITH HIM EITHER IN TER MS OF SECTION 68 OR ON GENERAL PRINCIPLE- IN THE ABSENCE OF ANYTH ING TO ESTABLISH THAT THE SOURCES OF THE CREDITORS DEPOSITS FLEW FR OM THE ASSESSEE, THE CASH CREDITS CANNOT BE TREATED AS UNEXPLAINED I NCOME OF THE ASSESSEE. AS THE ASSESSEE HAS FILED NAME AND ADDRESS OF DEPOS ITORS, THEIR PAN, BANK PASS-BOOKS AND COPIES OF I.T. RETURNS WHI CH ESTABLISHED THE IDENTITY OF DEPOSITORS, GENUINENESS OF TRANSACTIONS AND SOURCE/CAPACITY OF DEPOSITORS, IN VIEW OF THE D ECISION OF THE HONBLE GUJARAT HIGH COURT IN CIT VS. ROHINI BUILDE RS, THE ADDITIONS ARE NOT JUSTIFIED. FURTHER, THE ENTRY IN RESPECT OF ANKUR DIAMOND, IT IS CREDITORS FOR GOODS AND OF M/S. M. KANTILAL EXPORTS IN WHICH THE ASSESS EE IS A PARTNER. ON 31-03-2006, THE ENTRY FOR TRANSFER OF RS.12,22,83,9 85/- WAS PASSED IN THE BOOKS OF M/S. M. KANTILAL EXPORTS BY DEBITING A CCOUNT OF M/S. ANKUR DIAMOND N.V. AND CREDITING ACCOUNT OF SHRI PRAVINBH AI MOHANBHAI KHENI. THUS, IT IS ONLY A BOOK ENTRY AND FULLY EXPL AINED. THE ENTRY IN RESPECT OF MEGH MAYUR REALITY PVT. LTD., IS FROM SA LE OF LAND, IN RESPECT OF WHICH, THE ASSESSEE HAS FILED DETAILS. IN VIEW OF THE FACTS, AND THE CASE LAWS DISCUSSED A BOVE, IN MY VIEW, THE LOANS CANNOT BE TREATED AS BOGUS. ACCORDINGLY, THE ADDITIONS ARE DELETED. 8. BEFORE US THE LD. D.R. POINTED TO THE VARIOUS OB SERVATIONS OF A.O. AND SUPPORTED THE ORDER OF A.O. AND FURTHER SUBMITT ED THAT THE LOAN CREDITORS WERE NOT CREDITWORTHY AS ALL OF THEM HAVE VERY LOW CAPITAL AND NET PROFIT ON ONE HAND AND UNUSUAL HIGH SUNDRY CRED ITORS, DEBTORS, UNSECURED LOANS TAKEN AND GIVEN ON THE OTHER HAND. IT WAS FURTHER SUBMITTED THAT ASSESSEE DID NOT PRODUCE ALL LOAN CR EDITORS BEFORE THE A.O. AND FURTHER SUBMITTED THAT IT IS FOR THE ASSES SEE TO PROVE THE IDENTITY OF THE CREDITORS, THEIR CREDITWORTHINESS A ND GENUINENESS OF THE ITA NO.3018/AHD/200 9 ASSESSMENT YEAR 2006-07 PRAVINBHAI M. KHENI TRANSACTIONS WHICH THE ASSESSEE HAS FAILED. SHE THU S SUPPORTED THE ORDER OF THE A.O. 9. WE HAVE HEARD THE LD. D.R. AND PERUSED THE MATER IAL ON RECORD. ON PERUSAL OF THE PAPER BOOK THAT HAS BEEN FILED BY THE ASSESSEE WE FIND THAT THOUGH AS PER THE INDEX TO PAPER BOOK WHI CH IS CERTIFIED BY THE ASSESSEE, THAT IT HAS PAGES FROM 1 TO 360 BUT IN FA CT IN BOTH THE COPIES OF PAPER BOOK THAT HAS BEEN FILED BY THE ASSESSEE, THE PAPER BOOK HAS PAPERS ONLY UPTO PAGE 122 AND THE PAGES FROM 123 ON WARDS WHICH ARE SUPPOSED TO INTERALIA CONTAIN THE WRITTEN SUBMISSIO NS BEFORE LD. CIT (A), THE EVIDENCES OF BALANCE SHEET AND BANK STATEM ENT OF DEPOSITORS THAT WERE SUBMITTED TO LD. CIT (A), COPY OF REMAND REPORT, COPIES OF SUBMISSIONS MADE TO A.O. AND OTHER EVIDENCES FILED DURING REMAND PROCEEDINGS ARE MISSING. BEFORE US, THE COPY OF THE REMAND REPORT AND ASSESSEES SUBMISSIONS TO THE REMAND REPORT ARE ALS O NOT ON RECORD AND THEREFORE WE DO NOT HAVE THE BENEFIT OF PERUSAL OF THE DOCUMENTS NOT FILED BY THE ASSESSEE THOUGH STATED TO HAVE BEEN FI LED. WE ARE THEREFORE OF THE VIEW THAT THE CONDUCT OF THE ASSESSEE WHEREB Y HE IS CERTIFYING AND STATING ABOUT FILING ALL THE DOCUMENTS BUT IN F ACT NOT FILING ALL THE PAPERS, NOT APPEARING BEFORE THE TRIBUNAL AND SEEKI NG REPEATED ADJOURNMENTS, NOT FILING OF EVIDENCE OF PAYMENT OF COST THAT WAS LEVIED BY THE TRIBUNAL SHOWS THE CONDUCT OF THE ASSESSEE W HICH IS NOT EXPECTED OF HIM AND HIS APATHY TOWARDS JUDICIAL PRO CEEDINGS. 10. ON THE MERITS OF THE CASE, WE FIND THAT CIT (A) WHILE DELETING THE ADDITION IN RESPECT OF THE ADDITION MADE ON ACC OUNT OF LOAN FROM ANKUR DIAMOND HAS NOTED THAT ANKUR DIAMOND IS A CRE DITOR FOR GOODS OF M. KANTILAL & CO., OF WHICH ASSESSEE IS A PARTNER A ND THAT THE AMOUNT OF CREDIT IS FULLY EXPLAINED AND IS ONLY A BOOK ENTRY. HOWEVER BEFORE US NO MATERIAL IN THE FORM OF EVIDENCE LIKE COPIES OF BIL L, LEDGER ACCOUNT AS ITA NO.3018/AHD/200 9 ASSESSMENT YEAR 2006-07 PRAVINBHAI M. KHENI APPEARING IN THEIR RESPECTIVE BOOKS ETC. HAS BEEN P LACED ON RECORD BY ASSESSEE WHICH COULD GET SUPPORT TO THE FINDINGS OF LD. CIT (A). SIMILARLY IN RESPECT OF DELETION OF ADDITION OF AMO UNT RECEIVED FROM MEGH MAYUR REALITY PVT. LTD., CIT (A) HAS HELD THAT THE ENTRY IS FROM SALE OF LAND AND IS FULLY EXPLAINED. WE HOWEVER FIN D THAT APART FROM OTHER DETAILS WHICH COULD SUPPORT THE FINDINGS OF L D.CIT (A) THE TRANSLATED COPY OF SALE DEED IS NOT ON RECORD. WITH RESPECT TO LOAN OF RS.2,00,50,000/- FROM DHIRUBHAI SAVANI, ON PURSING THE COPY OF BALANCE SHEET OF DHIRUBHAI SAVANI, WHICH HAS BEEN PLACED AT PAGE 31 OF THE PAPER BOOK, IT IS SEEN THAT THE AMOUNT IS STATED TO BE RECEIVABLE FROM PRAVINBHAI M. PATEL. THERE IS NO MATERIAL ON RECO RD TO SHOW THAT WHETHER PRAVINBHAI M. PATEL THAT IS REFLECTED IN TH E BALANCE SHEET OF DHIRUBHAI SAVANI REFERS TO THE ASSESSEE OR IT REFER S TO SOME OTHER PERSON. CONSIDERING THE TOTALITY OF THE AFORESAID FACTS AND MORE SO TH E INDIFFERENT APPROACH OF THE ASSESSEE, WE ARE OF THE VIEW THAT THE ISSUE WITH RESPECT TO THE ADDITION OF THE AFORESAID PART IES NEEDS TO BE RE- EXAMINED AT THE END OF THE ASSESSING OFFICER. WE T HEREFORE, REMIT THE ISSUE TO THE FILE OF ASSESSING OFFICER TO RE-EXAMIN E THE ISSUE AND AFTER CONSIDERING OUR AFORESAID OBSERVATIONS AND SUBMISSI ONS OF THE ASSESSEE IF ANY, AND AFTER RECORDING FACTUAL FINDING DECIDE THE ISSUE IN ACCORDANCE WITH LAW. NEEDLESS TO STATE THAT ASSESSING OFFICER SHALL GRANT ADEQUATE OPPORTUNITY OF HEARING TO THE ASSESSEE. ASSESSEE IS ALSO DIRECTED TO CO- OPERATE BY PROMPTLY SUBMITTING ALL THE REQUIRED DET AILS CALLED FOR THE ASSESSING OFFICER. WE FURTHER MAKE IT CLEAR THAT IN CASE, THE ASSESSEE FAILS TO FURNISH THE DETAILS CALLED FOR BY THE A.O. , THE ASSESSING OFFICER SHALL BE FREE TO DECIDE THE ISSUE BASED ON MATERIAL ON RECORD. THUS THE GROUNDS RAISED BY REVENUE ARE ALLOWED FOR STATISTIC AL PURPOSES. ITA NO.3018/AHD/200 9 ASSESSMENT YEAR 2006-07 PRAVINBHAI M. KHENI 13. IN THE RESULT, THE APPEAL OF THE REVENUE IS ALL OWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON MONDAY, THE 31 ST AUGUST, 2015 AT AHMEDABAD. SD/- SD/- (S.K. YADAV) (ANIL CHATURVEDI) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD. DATE:- 31-08-2015. PATKI. / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ! / CONCERNED CIT 4. ! () / THE CIT(A),II AHMEDABAD 5. $%& '', , )*++ / DR, ITAT, AHMEDABAD 6. &,- . / GUARD FILE. / BY ORDER, / !' ( DY./ASSTT.REGISTRAR) '# $% &, () / ITAT, AHMEDABAD 1. DATE OF DICTATION- 15-7-2015 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER : 16-7-2015 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S. - 27-7-15/29-7-15/10- 8-2015. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 31-8-2015 5. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 31-8 -2015: 6. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 7. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 8. DATE OF DESPATCH OF THE ORDER ITA NO.3018/AHD/200 9 ASSESSMENT YEAR 2006-07 PRAVINBHAI M. KHENI