M/s Pankaj Industries, Patiala V. ITO, Patiala

ITA 306/CHANDI/2016

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 9978 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-05-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 04-04-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: S K MITTALDR
• Keywords: Unexplained cash credit; Accommodation entries
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH,CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER ITA NO. 306/CHD/2016 ASSESSMENT YEAR : 2010-11 M/S PANKAJ INDUSTRIES, VS THE ITO, DAKALA ROAD, WARD - 1, PATIALA. PATIALA. PAN: AAEFP2802M (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI ROHIT GUPTA,AD VOCATE RESPONDENT BY : SHRI S.K.MITTAL,DR DATE OF HEARING : 17.05.2016 DATE OF PRONOUNCEMENT : 18.05.2016 O R D E R THIS APPEAL BY ASSESSEE HAS BEEN DIRECTED AGAINST THE ORDER OF LD. CIT(APPEALS), MEERUT CAMP AT PATIA LA DATED 02.02.2016 FOR ASSESSMENT YEARS 2010-11. 2. I HAVE HEARD LD. REPRESENTATIVES OF BOTH THE PAR TIES AND PERUSED THE MATERIAL ON RECORD. 3. THE ASSESSEE IN THE PRESENT APPEAL CHALLENGED TH E ADDITION OF RS. 2,80,000/- OUT OF RS. 5 LACS UNDER SECTION 68 OF THE ACT ON ACCOUNT OF UNEXPLAINED CASH CREDIT RECEIVED FROM SMT. SUMAN GOEL. 4. THE ASSESSING OFFICER NOTED THAT ASSESSEE FIRM H AS OBTAINED LOAN FROM SMT. SUMAN GOEL TO THE TUNE OF R S. 5 LACS OUT OF WHICH RS. 2,20,000/- WAS THROUGH CLEARA NCE 2 OF THE CHEQUE COMING TO THE ACCOUNT OF SMT. SUMAN G OEL, CREDITOR AND THEN TRANSFERRED TO THE ASSESSEE. FUR THER RS. 2,80,000/- IN CASH WAS DEPOSITED IN THE BANK ACCOUNT OF THE CREDITOR AND TRANSFERRED TO THE ASSE SSEE FIRM ON THE SAME DAY. THE ASSESSING OFFICER QUESTI ONED THE SOURCE OF RS. 2,80,000/- AND MADE DETAILED ENQU IRY REGARDING SOURCE AND MEANS OF SMT. SUMAN GOEL AND AFTER DETAILED ENQUIRY, CAME TO THE CONCLUSION THAT RS. 2,80,000/- ADDED UNDER SECTION 68 AS UNEXPLAINED C ASH CREDIT IN THE HANDS OF THE ASSESSEE. 5. THE ASSESSEE CHALLENGED THE ADDITION BEFORE LD. CIT(APPEALS) AND IT WAS SUBMITTED THAT ASSESSEE DISCHARGED THE ONUS BY PROVING THE GENUINENESS OF T HE CREDIT IN THE MATTER AND THAT NO PROPER OPPORTUNITY OF HEARING HAVE BEEN GIVEN TO THE ASSESSEE. 6. THE LD. CIT(APPEALS), AFTER CONSIDERING THE SUBMISSIONS AND MATERIAL ON RECORD, FOUND THAT ASSESSING OFFICER HAS VERY WELL DEMONSTRATED THAT CREDITOR WAS NOT PERSON OF MEANS AND HER CAPACITY T O GIVE RS. 2,80,000/- LOAN WHICH WAS PUT IN HER BANK ACCOU NT AND WAS TRANSFERRED ON THE VERY SAME DAY GOES TO SH OW THAT LOAN CREDITOR SMT. SUMAN GOEL WAS ONLY A CONDU IT TO ROUTE THE MONEY INTO THE ASSESSEE FIRM. THE SOURCE OF MONEY REMAINED EXPLAINED. THE DETAILED ENQUIRY CONDUCTED BY THE ASSESSING OFFICER PROVED THAT SMT. SUMAN GOEL WAS NOT PERSON OF MEANS THEREFORE, THE ASSESSEE FAILED TO DISCHARGE ONUS OF PROVING THE CR EDIT 3 WORTHINESS OF THE CREDITOR AND THE GENUINENESS OF T HE TRANSACTION IN THE MATTER. THE LD. CIT(APPEALS), ACCORDINGLY, CONFIRMED THE ADDITION. 7. THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE AUTHORITIES BELOW AND REFER RED TO PB-19 WHICH IS SALE DEED DATED 27.03.2009 AND SUBMITTED THAT CASH WAS DEPOSITED OUT OF THE SALE PROCEEDS OF THE PLOT SOLD ON 27.03.2009 FOR RS.11,25,000/-. ON THE OTHER HAND, LD. DR RELIED U PON ORDERS OF THE AUTHORITIES BELOW. 8. AFTER CONSIDERING RIVAL SUBMISSIONS, I AM NOT INCLINED TO INTERFERE WITH THE ORDERS OF THE AUTHOR ITIES BELOW. IT IS NOT IN DISPUTE THAT ASSESSEE RECEIVED CASH CREDIT OF RS. 2,80,000/- FROM SMT. SUMAN GOEL ON 12.11.2009 AND ON THE SAME DAY, CASH OF RS. 2,80,00 0/- WAS DEPOSITED IN THE BANK ACCOUNT OF SMT. SUMAN GOE L FOR THE PURPOSE OF GIVING LOAN TO THE ASSESSEE. TH E ASSESSEE WAS, THEREFORE, DIRECTED TO EXPLAIN THE SO URCE OF THE CASH DEPOSIT OF RS. 2,80,000/- IN BANK ACCOUNT OF SMT. SUMAN GOEL. THE ASSESSEE, HOWEVER, FAILED TO EXPLAIN THE SOURCE OF CASH DEPOSIT IN THE BANK ACCO UNT OF THE CREDITOR FOR THE PURPOSE OF GIVING LOAN TO THE ASSESSEE. THE ASSESSING OFFICER, ON THE BASIS OF T HE RETURNS OF INCOME FILED BY SMT. SUMAN GOEL FOUND TH AT SHE WAS SHOWING INCOME FROM STITCHING, THEREFORE, I N ORDER TO VERIFY HER SOURCE OF INCOME, INSPECTOR WAS DEPUTED TO VERIFY HER SOURCE OF INCOME. THE INSPEC TOR 4 HAS REPORTED AFTER MAKING LOCAL ENQUIRIES THAT NO S UCH WORK WAS CARRIED OUT BY SMT. SUMAN GOEL. 8()I) THE ASSESSING OFFICER ALSO FOUND THAT SMT. SUMAN GOEL HAS ALSO SHOWN CASH IN HAND OF RS. 9,42,226/- WHICH BY NO MEANS COULD BE AVAILABLE WITH A LADY WH O IS DOING ALLEGED STITCHING WORK AND EARNING MONTHLY IN TEREST INCOME FROM POST OFFICE. THE CONDUCT OF SMT. SUMAN GOEL WAS FOUND AGAINST PRINCIPLE OF HUMAN PROBABILI TY AND IT WAS FOUND THAT ASSESSEE WAS PROVIDING ONLY ACCOMMODATION ENTRIES. THE CREDITOR WAS ALSO SHOWI NG MEAGER INCOME IN HER RETURN OF INCOME AND MANY TIME S, IN ORDER TO AVOID NEGATIVE CASH IN HAND, SHE WAS FO UND TO HAVE TAKING ENTRIES FROM OTHERS. THE ASSESSING OFF ICER ALSO FOUND ON THE BASIS OF THE MATERIAL ON RECORD T HAT CREDITOR WAS DEPOSITING CASH IN HER BANK ACCOUNT ON LY WHEN SOME ENTRY WAS REQUIRED TO BE GIVEN OTHERWISE THERE ARE MEAGER CASH DEPOSITS IN HER BANK ACCOUNT. THE ASSESSING OFFICER, THEREFORE, FOUND THAT ALL THE TRANSACTIONS OF SMT. SUMAN GOEL ARE SHAM AND SAME A RE UNDISCLOSED INCOME OF THE ASSESSEE ITSELF. THE ASS ESSEE TRIED TO ROUTE HIS UNDISCLOSED INCOME THROUGH SMT. SUMAN GOEL WHO WAS NOT DOING ANY WORK OF STITCHING ETC. THESE FINDINGS OF FACT RECORDED BY THE AUTHORITIES BELOW HAVE NOT BEEN REBUTTED BY ASSESSEE THROUGH ANY EVID ENCE OR MATERIAL ON RECORD. 8(II) THE ASSESSEE CONTENDED THAT CASH OF RS. 2,8 0,000/- WAS DEPOSITED IN THE BANK ACCOUNT OF SMT. SUMAN GOE L 5 ON 12.11.2009 OUT OF THE SALE PROCEEDS OF THE PLOT SOLD ON 27.03.2009. THERE IS A SUBSTANTIAL GAP BETWEEN BOT H THESE DATES AND IT IS NOT EXPLAINED WHY THE CASH WA S KEPT FOR A LONGER PERIOD WITHOUT MAKING ANY DEPOSIT IN T HE BANK ACCOUNT OF THE CREDITOR. FURTHER FINDINGS OF FACT RECORDED BY ASSESSING OFFICER CLEARLY SHOW THAT CRE DITOR MADE DEPOSITS OF THE AMOUNTS WHENEVER SOME ENTRY HA S TO BE GIVEN TO OTHERS, OTHERWISE THERE WERE ONLY ME AGER AMOUNTS DEPOSITED IN THE BANK ACCOUNT OF SMT. SUMAN GOEL. I MAY ALSO NOTE HERE THAT DURING THE COURSE OF ARGUMENTS, LD. COUNSEL FOR THE ASSESSEE WAS DIRECTE D TO PRODUCE COPY OF THE BANK ACCOUNT OF SMT. SUMAN GOEL WHICH MAY THROW FURTHER LIGHT ON HER CAPACITY AND GENUINENESS OF THE TRANSACTIONS IN THE MATTER BUT S AME WAS NOT DELIBERATELY FILED IN THE PAPER BOOK. 9. CONSIDERING THE ABOVE FACTS, IT IS CLEAR THAT AS SESSEE FAILED TO PROVE CREDIT WORTHINESS OF SMT. SUMAN GOE L AS WELL AS GENUINENESS OF THE TRANSACTION IN THE MATTE R. ITAT AGRA BENCH IN THE CASE OF SMT. SUMAN GUPTA VS ITO 138 ITD 153 CONSIDERED THE IDENTICAL ISSUE OF DEPOS IT OF CASH AMOUNT IN THE BANK ACCOUNT OF THE CREDITOR FOR THE PURPOSE OF GIVING LOANS AND DECIDED THE ISSUE AGAIN ST THE ASSESSEE AND CONFIRMED THE ADDITIONS UNDER SECTION 68 OF THE ACT. THE VIEW OF THE AGRA BENCH HAS BEEN CONFI RMED BY HON'BLE ALLAHABAD HIGH COURT IN THE CASE OF SMT. SUMAN GUPTA VS CIT & OTHERS IN IT APPEAL NO. 680/20 12 6 DATED 07.08.2012 IN WHICH THE ASSESSEE'S APPEAL HAS BEEN DISMISSED. 9(I) HON'BLE GUJRAT HIGH COURT ALSO IN THE CASE OF BLESSINGS CONSTRUCTION VS ITO 32 TAXMAN.COM 366 HEL D, WHERE SIZEABLE AMOUNTS WERE DEPOSITED IN CASH IN ACCOUNT OF DEPOSITOR ONLY BEFORE THEIR WITHDRAWAL T HROUGH CHEQUES IN FAVOUR OF THE ASSESSEE, ADDITION WAS JUS TIFIED. 10. CONSIDERING THE ABOVE DISCUSSION IN THE LIGHT O F THE MATERIAL ON RECORD AND THE JUDGEMENTS OF HON'BLE ALLAHABAD HIGH COURT AND JURISDICTION GUJRAT HIGH C OURT ABOVE, I DO NOT FIND ANY MERIT IN THE APPEAL OF THE ASSESSEE BECAUSE ASSESSEE FAILED TO PROVE THE CREDI T WORTHINESS OF THE CREDITOR AND GENUINENESS OF THE TRANSACTIONS IN THE MATTER. THE APPEAL OF THE ASSE SSEE FAILS IS DISMISSED. 11. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMIS SED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- (BHAVNESH SAINI) JUDICIAL MEMBER DATED: 18 TH MAY, 2016. POONAM COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT(A), THE CIT, DR ASSISTANT REGISTRAR, ITAT/CHD