Surendra Motilal Lodha, Ahmednagar V. Deputy Commissioner of Income-tax,

ITA 307/PUN/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 1715 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 3 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-06-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 06-06-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 18-02-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: HITENDRA NINAWE
• Assessee Lawyers: HARI KRISHAN
• Keywords: Unexplained cash credit; Additional evidence
• Section: 234B; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, PUN E , , !'#'' $ , % & BEFORE SHRI R.K. PANDA, AM AND SHRI VIKAS AWASTHY, JM / ITA NO. 307/PN/2014 %' ( ')( / ASSESSMENT YEAR : 2008-09 SHRI SURENDRA MOTILAL LODHA, PROP. OF M/S. S MOTILAL PLYWOOD HOUSE, 2988, LODHA CHAMBERS, GANJ BAZAR, AHMEDNAGAR PAN : ABOPL9153G ....... / APPELLANT ' / V/S. DY. COMMISSIONER OF INCOME TAX, AHMEDNAGAR CIRCLE, AHMEDNAGAR / RESPONDENT ASSESSEE BY : SHRI HARI KRISHAN REVENUE BY : SHRI HITENDRA NINAWE / DATE OF HEARING : 09-06-2016 / DATE OF PRONOUNCEMENT : 10-06-2016 * / ORDER PER VIKAS AWASTHY, JM : THE APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE OR DER OF COMMISSIONER OF INCOME TAX (APPEALS)-IT/TP, PUNE DATED 17 -01-2014 FOR THE ASSESSMENT YEAR 2008-09. IN APPEAL THE ASSESSEE HAS PRIMARILY ASSAILED THE FINDINGS OF COMMISSIONER OF INCOME TAX (APPEALS) IN CONFIRMING THE ADDITIO N OF LOANS/ADVANCES OBTAINED BY THE ASSESSEE AMOUNTING TO ` 46,10,000/-. 2 ITA NO. 307/PN/2014, A.Y. 2008-09 2. THE BRIEF FACTS OF THE CASE AS EMANATING FROM RECORD S ARE: THE ASSESSEE IS CARRYING ON THE PROPRIETARY BUSINESS OF TRAD ING IN PLYWOOD, HARDWARE, ETC. UNDER THE NAME AND STYLE OF M/S. MOTILAL PL YWOOD HOUSE. THE ASSESSEE FILED HIS RETURN OF INCOME FOR THE IMPU GNED ASSESSMENT YEAR ON 25-04-2009 DECLARING TOTAL INCOME OF ` 21,16,490/-. THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY UNDE R CASS AND ACCORDINGLY NOTICE U/S. 143(2) OF THE INCOME TAX ACT, 196 1 (HEREINAFTER REFERRED TO AS THE ACT) WAS ISSUED TO THE ASSESSEE ON 20-08-2010. DURING THE COURSE OF SCRUTINY ASSESSMENT THE ASSESSING OFFICER MADE ADDITION OF ` 2,85,00,000/- ON ACCOUNT OF UNEXPLAINED CASH CREDITS U/S . 68 OF THE ACT. THE ASSESSING OFFICER MADE ADDITION IN RESPE CT OF FOLLOWING LOANS/ADVANCES ALLEGEDLY RECEIVED BY THE ASSESSEE. I. SHRI JAYKUMAR GORE ` 2,36,90,000/- II. SHREE SAI ENTERPRISES ` 40,60,000/- III. YASHODARA SAH DOODH SANGH ` 4,00,000/- IV. SHRIRAM MALOO ` 2,00,000/- V. PANDIT AUTOMOTIVE ` 1,50,000/- _______________ TOTAL ` 2,85,00,000/- APART FROM THE ABOVE, THE ASSESSING OFFICER MADE DISALLOWAN CE OF ` 51,000/- U/S. 40A(IA) AND ` 90,000/- DISALLOWANCE OF CERTAIN EXPENSES. AGGRIEVED BY THE ASSESSMENT ORDER DATED 28-12-2010, T HE ASSESSEE PREFERRED AN APPEAL BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS). BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS), THE ASSESSEE IN ORDER TO SUBSTANTIATE HIS CONTENTIONS AGAINS T ADDITION MADE U/S. 68 FURNISHED CERTAIN ADDITIONAL EVIDENCE IN THE FORM OF B ANK STATEMENT AND RETURNS OF INCOME OF THE CREDITORS. THE C OMMISSIONER OF INCOME TAX (APPEALS) SOUGHT REMAND REPORT ON THE EXPLA NATION AND ADDITIONAL EVIDENCE FURNISHED BY THE ASSESSEE. ON THE BA SIS OF REMAND 3 ITA NO. 307/PN/2014, A.Y. 2008-09 REPORT THE COMMISSIONER OF INCOME TAX (APPEALS) DELETED TH E ADDITION TO THE TUNE OF ` 2,38,90,000/- AND SUSTAINED THE ADDITION OF ` 46,10,000/- U/S. 68 OF THE ACT. STILL AGGRIEVED THE ASSESSEE IS IN SECOND APPEAL BEFORE THE TRIBUNAL AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (A PPEALS) IN CONFIRMING THE ADDITION OF ` 46,10,000/- U/S. 68 AND CHARGING OF INTEREST ` 43,10,454/- U/S. 234B AND 234C OF THE ACT. 3. SHRI HARI KRISHAN APPEARING ON BEHALF OF THE ASSESSEE S UBMITTED THAT THE ASSESSEE TOOK LOANS FROM VARIOUS PARTIES. ALL T HE LOANS HAVE BEEN TAKEN THROUGH BANKING CHANNELS AND HAVE BEEN SUB SEQUENTLY REPAID THROUGH BANK TRANSACTIONS. THE LD. AR REFERRED TO THE REMAND REPORT AT PAGES 10 TO 13 OF THE PAPER BOOK. THE LD. AR SUBMITTED THAT DESPITE THE FACT THAT THE ASSESSEE HAD FURNISHED SUFFICIENT DOCUMENTS TO SUBSTANTIATE HIS CLAIM, THE ASSESSING OFFICER IN HIS REMAND REPORT WITHOUT PROPERLY VERIFYING THE SAME HAS DISBELIEVED THE C ONTENTIONS OF THE ASSESSEE. THE LOANS IN RESPECT OF THREE PARTIES I.E. SHREE SAI ENTERPRISES ` 40,60,000/-, M/S. YASHODARA DOODH SANSTHA ` 4,00,000/- AND M/S. PANDIT AUTOMOTIVE ` 1,50,000/- HAVE BEEN DISBELIEVED BY THE LOWER AUTHORITIES. IN RESPECT OF SHREE SAI ENTERPRISES T HE ASSESSING OFFICER HAS REJECTED THE CONTENTIONS OF THE ASSESSEE IN R EMAND PROCEEDINGS ON THE GROUND THAT THE NOTICE HAS BEEN R ETURNED UNSERVED WITH REMARKS NOT KNOWN. THE ASSESSEE HAD GIVEN THE ADDRESS OF M/S. SHREE SAI ENTERPRISES ON WHICH THE ASSESSEE HAS COMMUN ICATED WITH THE SAID PARTY. THE ASSESSEE HAD GIVEN THE DETAILS OF T HE LOANS TAKEN FROM THE AFORESAID PARTIES ALONG WITH THE LEDGER EXTRACTS. ALL THE PAYMENTS HAVE BEEN RECEIVED THROUGH CHEQUES. THE LD. A R CONTENDED THAT IN RESPECT OF M/S. YASHODARA DOODH SANSTHA THE AD DITION HAS BEEN CONFIRMED ON THE GROUND THAT THERE HAS BEEN NO R ESPONSE FROM 4 ITA NO. 307/PN/2014, A.Y. 2008-09 THE LENDER. WHEREAS THE ASSESSEE HAD GIVEN THE DETAILED ADDRESS OF M/S. YASHODARA DOODH SANSTHA AND ALL THE TRANSACTIONS WITH THE SAID PARTIES WAS THROUGH BANK. IN RESPECT OF M/S. PANDIT AUT OMOTIVE THE ADDITION HAS BEEN MADE ON THE GROUND THAT THE LENDER H AD DENIED TO HAVE ANY FINANCIAL DEALING WITH THE ASSESSEE. HOWEVER, THER E IS NOTHING ON RECORD TO SHOW THAT M/S. PANDIT AUTOMOTIVE HAD DENIE D FINANCIAL DEALINGS WITH THE ASSESSEE. FURTHER, THE ASSESSING OFFICER HAS NOT CONFRONTED WITH THE DENIAL LETTER, IF ANY FROM M/S. PANDIT AUT OMOTIVE. THE ASSESSEE HAS ALREADY REPAID THE AMOUNT THROUGH BA NK TO M/S. PANDIT AUTOMOTIVE. THE LD. AR ALSO REFERRED TO THE CONFIRMA TION LETTERS GIVEN BY THE RESPECTIVE PARTIES AT PAGES 18, 43 AND 44 OF THE PAPER BOOK. THE LD. AR CONTENDED THAT IF AN OPPORTUNITY IS GRAN TED TO THE ASSESSEE HE CAN PRODUCE THE PARTIES BEFORE THE ASSESSING OFFICER . 4. ON THE OTHER HAND SHRI HITENDRA NINAWE REPRESENTING THE DEPARTMENT VEHEMENTLY SUPPORTED THE FINDINGS OF COMMISSIO NER OF INCOME TAX (APPEALS) IN REJECTING THE CLAIM OF ASSESSEE IN R ESPECT OF AFORESAID THREE PARTIES. THE LD. DR SUBMITTED THAT THE NO TICES WERE ISSUED TO THE LENDERS AT THE ADDRESSES FURNISHED BY THE ASSESSEE. TWO OF THE LENDERS FAIL TO APPEAR BEFORE THE ASSESSING OFFICER AS THE NOTICES COULD NOT BE SERVED ON THEM AT THE GIVEN ADDRESS AND THE THIRD LENDER DENIED TO HAVE ANY FINANCIAL TRANSACTIONS WITH THE ASSESSE E. UNDER SUCH CIRCUMSTANCES THE ADDITION CONFIRMED BY THE COMMISSIO NER OF INCOME TAX (APPEALS) IS JUSTIFIED. THE LD. DR PRAYED FOR DISMIS SING THE APPEAL OF THE ASSESSEE. 5. WE HAVE HEARD THE SUBMISSIONS MADE BY THE REPRESEN TATIVES OF RIVAL SIDES AND HAVE PERUSED THE ORDERS OF THE AUTHORITIE S BELOW. WE HAVE ALSO EXAMINED THE DOCUMENTS REFERRED DURING THE CO URSE OF 5 ITA NO. 307/PN/2014, A.Y. 2008-09 SUBMISSIONS MADE BY LD. AR. THE ASSESSEE IN ITS APPEAL HA S ASSAILED THE FINDINGS OF COMMISSIONER OF INCOME TAX (APPEALS) IN CONFIRMIN G THE ADDITION MADE U/S. 68 OF THE ACT IN RESPECT OF LOANS/ADVAN CES GIVEN BY THE FOLLOWING PARTIES. I. SHREE SAI ENTERPRISES ` 40,60,000/- II. YASHODARA SAH DOODH SANSTHA ` 4,00,000/- III. PANDIT AUTOMOTIVE ` 1,50,000/- _______________ TOTAL ` 46,10,000/- 6. AS PER THE CONTENTIONS OF THE ASSESSEE THE ABOVE M ENTIONED THREE LENDERS ARE GENUINE AND HAD EXTENDED LOANS/ADVANCES TO THE ASSESSEE THROUGH CHEQUE. IN CASE OF SOME OF THE LENDERS THE ASS ESSEE HAS ALREADY STATED TO HAVE RETURNED THE LOAN AMOUNT. A PE RUSAL OF THE REMAND REPORT SHOWS THAT THE AUTHORITIES BELOW HAVE D ISALLOWED THE AMOUNT IN RESPECT OF SHREE SAI ENTERPRISES ON THE GROUN D THAT THE NOTICE ISSUED BY THE ASSESSING OFFICER HAS BEEN RETURNED B ACK UNSERVED WITH REMARKS NOT KNOWN AND THE ASSESSEE HAS NOT FUR NISHED ANY OTHER INFORMATION/ALTERNATE ADDRESS OF THE SAID CREDITOR. IN CASE OF M/S. YASHODARA DOODH SANSTHA THE LENDER HAS NOT RESPO NDED TO THE NOTICE ISSUED BY THE ASSESSING OFFICER AND M/S. PANDIT AUTO MOTIVE HAS DENIED TO HAVE ANY FINANCIAL DEALINGS WITH THE ASSESSEE. TH E ASSESSEE DURING THE COURSE OF SUBMISSIONS HAS DRAWN OUR ATTENTION AT PAGES 43 TO 45 OF THE PAPER BOOK. AT PAGES 43 AND 44 OF THE PA PER BOOK THE ASSESSEE HAS FILED CONFIRMATION FROM THE DIRECTOR OF YASHODH ARA SAHAKARI DUDH SANGH P. LIMITED STATING THAT AN AMOUNT OF ` 69,00,000/- WAS GIVEN TO THE ASSESSEE AS UNSECURED LOA N/DEPOSIT VIDE CHEQUE/DD NO. 407100 DATED 28-12-2007 AND OUT OF THE AFORESAID SUM, AN AMOUNT OF ` 65,00,000/- HAS BEEN RETURNED AND ONLY BALANCE ` 4,00,000/- IS REMAINING AS ON 31-03-2008. AT PAGE 45 OF THE PAPER 6 ITA NO. 307/PN/2014, A.Y. 2008-09 BOOK IS THE LEDGER ACCOUNT OF M/S. PANDIT AUTOMOTIVE SHO WING AN AMOUNT OF ` 1,50,000/- WAS RECEIVED THROUGH CHEQUE AS SECURITY DEPO SIT ON 22-01-2008. THE LD. AR HAS ALSO DRAWN OUR ATTENTION TO PAGE 18 OF THE PAPER BOOK WHERE M/S. SHREE SAI ENTERPRISES HAS G IVEN THE LEDGER ACCOUNT OF THE ASSESSEE IN ITS BOOKS INDICATING DEPOSIT OF ` 43,00,000/-. THE ASSESSING OFFICER IN HIS REMAND REPORT HAS STATED THA T M/S. PANDIT AUTOMOTIVE HAS DENIED ANY FINANCIAL TRANSACTION WITH THE AS SESSEE WHEREAS THE ASSESSEE HAS CONTROVERTED THE SAME. THE LD. AR HAS VEHEMENTLY ARGUED THAT THERE IS NO DOCUMENT ON RECOR D TO SHOW M/S. PANDIT AUTOMOTIVE HAS DENIED ANY FINANCIAL DEALINGS WITH THE ASSESSEE AND NO SUCH DOCUMENT WAS EVER PUT ACROSS TO THE ASSESSEE. 7. AFTER PERUSING THE DOCUMENTS ON RECORD WE ARE OF TH E CONSIDERED VIEW THAT AN OPPORTUNITY SHOULD BE GRANTED TO THE ASSE SSEE TO PRODUCE CONFIRMATIONS FROM THE RESPECTIVE PARTIES. THE LD. AR HAS A LSO MADE A PRAYER TO GRANT AN OPPORTUNITY TO THE ASSESSEE TO PR ODUCE THE PARTIES BEFORE THE ASSESSING OFFICER. KEEPING IN VIEW THE ENTIRETY O F FACTS, WE ARE OF THE CONSIDERED VIEW THAT THIS ISSUE NEEDS A REVISIT TO THE FILE OF ASSESSING OFFICER. THE ASSESSEE IS DIRECTED TO PRODUCE TH E PARTIES BEFORE THE ASSESSING OFFICER ON ITS OWN. THE ASSESSING OFFICE R SHALL NOT BE REQUIRED TO ISSUE SUMMONS FOR SEEKING THE PRESENCE O F THE PARTIES. THE ASSESSEE SHALL ALSO FURNISH CONFIRMATIONS FROM THE RESP ECTIVE PARTIES TO THE SATISFACTION OF ASSESSING OFFICER. THE ASSES SING OFFICER AFTER CONSIDERING THE SAME SHALL DECIDE THIS ISSUE, IN ACCORD ANCE WITH LAW. THE GROUND NO. 1 RAISED BY THE ASSESSEE IN APPEAL IS ALLOWED FOR STATISTICAL PURPOSE, ACCORDINGLY. 8. IN GROUND NO. 2 THE ASSESSEE HAS ASSAILED THE CHAR GING OF INTEREST U/S. 234B AND 234C OF THE ACT. THE CHARGING OF INTEREST U/S. 234B 7 ITA NO. 307/PN/2014, A.Y. 2008-09 AND 234C IS CONSEQUENTIAL AND MANDATORY. ACCORDINGLY, TH E SECOND GROUND RAISED IN THE APPEAL IS DISMISSED. 9. THE GROUND NO. 3 IS GENERAL IN NATURE, HENCE, REQUIRES NO ADJUDICATION. 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED ON FRIDAY, THE 10 TH DAY OF JUNE, 2016. SD/- SD/- ( . . / R.K. PANDA) ( ! ' / VIKAS AWASTHY) #' / ACCOUNTANT MEMBER $ % #' / JUDICIAL MEMBER / PUNE; &# / DATED : 10 TH JUNE, 2016 RK *+,%-.#/#)- / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. ' () / THE CIT(A)-IT/TP, PUNE 4. ' / THE CIT-I, PUNE 5. !*+ %%,- , ,- , . ./0 , / DR, ITAT, B BENCH, PUNE. 6. + 1 23 / GUARD FILE. // ! % // TRUE COPY// #4 / BY ORDER, %5 ,0 / PRIVATE SECRETARY, ,- , / ITAT, PUNE