M/s. Rohit Bal, V. ACIT,

ITA 3136/DEL/2009

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 2944 (ITAT-DELHI)
• Duration Of Justice: 7 year(s) 10 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-06-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: F
• Next Hearing Date: 17-05-2017
• Assessment Year: 2005-2006
• Appeal Filed On: 08-07-2009
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: WAS ENGAGED IN BUSINESS OF
• Keywords: Income from undisclosed sources
• Section: 68

Judgement Text

PAGE 1 OF 8 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH - DB NEW DELHI (F) BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER ITA NO.3136/DEL/2009 ASSESSMENT YEAR : 2005-06 ROHIT BAL, B-23, SECTOR-3 RAJNI GANDHA CHOWK NOIDA PAN ADNPB9337P VS. ACIT CENTRAL CIRCLE-2, E-2 ARA CENTRE, JHANDEWALAN EXTN. NEW DELHI. (APPELLANT) (RESPONDENT) PER BHAVNESH SAINI, JUDICIAL MEMBER ORDER THIS APPEAL BY THE ASSESSEE HAS BEEN DIRECTED AGAIN ST THE ORDER OF LD. CIT(A) III, NEW DELHI DATED 18.11.2008 FOR A SSESSMENT. YEAR 2005-06. 2. WE HAVE HEARD LD. REPRESENTATIVES OF BOTH THE PA RTIES AND PERUSED THE MATERIAL ON RECORD. 3. ON GROUND NO. 1 ASSESSEE CHALLENGED THE ADDITION OF RS. 11,38,300/- U/S 68 OF THE I.T. ACT. THE BRIEF FACTS OF THE CASE ARE THAT ASSESSEE IS A FASHION DESIGNER AND WAS ENGAGED IN THE BUSINESS OF ASSESSEE BY : SHRI SURENDRA KUMAR MS. ANJU GOEL, CAS DEPA RTMENT BY: MS. F.R. MEENA, SR.DR DATE OF HEARING 18//05/2017 DATE OF PRONOUNCEMENT 07/06/2017 ITA NO. 3136/DEL/2009 ROHIT BAL VS. ACIT PAGE 2 OF 8 GARMENTS. ASSESSEE HAD SHOWN THE SOURCE OF INCOME F ROM SALARY, INCOME FROM BUSINESS AND PROFESSION, INCOME FROM PR OPRIETARY CONCERN M/S. ROHIT OVERSEAS AND M/S. THE IRIS COMPANY, INCO ME FROM OTHER SOURCES AND CAPITAL GAINS. THE ASSESSING OFFICER NO TED THAT ASSESSEE HAD SHOWN CREDIT OF RS. 11,38,300/- AS UNSECURED LOANS IN THE NAME OF SMT. BINA AGGARWAL. ASSESSEE WAS ASKED TO FILE CONFIRMAT ION FROM THE CREDITOR AND PRODUCED EVIDENCE TO PROVE GENUINENESS OF THE T RANSACTION. ASSESSEE SUBMITTED BEFORE THE ASSESSING OFFICER THA T AS REGARD THE CONFIRMATION OF AMOUNT OF RS. 11,38,300/- STANDING IN STATEMENT OF AFFAIRS OF THE ASSESSEE IN THE NAME OF MS. BINA AGG ARWAL THAT THE SAME HAS BEEN TREATED AS INCOME IN THE BOOKS OF M/S. ROH IT BAL DESIGN PVT. LTD. IN THE LATER YEARS. IT WAS SUBMITTED THAT THE MATERIAL WAS SUPPLIED TO MS. BINA AGGARWAL FOR THE SAME AMOUNT BY THE COM PANY VIDE INVOICE DATED 22 ND OCTOBER, 2007. HOWEVER THE ASSESSING OFFICER HAS N OT ACCEPTED THE CONTENTION OF ASSESSEE. IT WAS OBSERVE D BY THE ASSESSING OFFICER THAT IT IS NOT CLEAR TO WHOM THE DELIVERY O F THE GOODS WERE MADE WHEN THE PARTY WAS STATED TO BE OUT OF COUNTRY. MOR EOVER THE ASSESSEE HAS NOT FURNISHED EVEN THE CONFIRMATION FROM THE LA DY. THE ASSESSING OFFICER OBSERVED THAT BURDEN IS UPON THE ASSESSEE T O PROVE THE AMOUNTS CREDITED IN HIS ACCOUNT DID NOT REPRESENT HIS INCO ME AND THE PAYMENT RECEIVED BY CHEQUE IS NOT SUFFICIENT. THE ONUS LIES UPON ASSESSEE TO PROVE IDENTITY , CREDITWORTHINESS OF THE CREDITORS AND GENUINENESS OF THE TRANSACTIONS WHICH HAS NOT BEEN DISCHARGED BY THE ASSESSEE. IN THE ABSENCE OF ANY CONFIRMATIONS, BANK STATEMENTS AND E VIDENCE OF ANY ITA NO. 3136/DEL/2009 ROHIT BAL VS. ACIT PAGE 3 OF 8 IDENTITY AND CREDITWORTHINESS OF THE CREDITOR, THE ASSESSING OFFICER MADE ADDITION OF RS.11,38,300/- SHOWN IN THE NAME OF MS . BINA AGGARWAL U/S 68 OF THE I.T. ACT. 4. THE ASSESSEE REITERATED THE SUBMISSIONS BEFORE L D. CIT(A) AND IT WAS SUBMITTED THAT THE AMOUNT IN QUESTION WAS RECEI VED BY ASSESSEE FOR DESIGNER WEARS FROM MS. BINA AGGARWAL. THE ORDER W AS PLACED ON THE COMPANY BUT CHEQUE WAS GIVEN IN THE NAME OF THE ASS ESSEE WHICH WAS CREDITED IN HIS BANK ACCOUNT. THE COMPANY HAS SUPPL IED GOODS TO MS. BINA AGGARWAL IN LATER YEAR AND THE AMOUNT WAS SHOW N AS REVENUE RECEIPT ON ACCOUNT OF SALE IN SUBSEQUENT YEAR IN TH E HANDS OF THE COMPANY. THEREFORE IT COULD NOT BE TREATED AS UNSEC URED LOAN U/S 68 OF THE I.T. ACT. IT WAS CONTENDED THAT ASSESSEE IS A BRAND NAME AND CHEQUE WAS ISSUED IN HIS NAME BECAUSE THE CUSTOMER WOULD NOT KNOW THE NAME OF THE COMPANY. THE CHEQUE WAS ISSUED BY T HE CUSTOMER INADVERTENTLY IN HIS PERSONAL NAME. THE CUSTOMER IS NRI THEREFORE CONFIRMATION COULD NOT BE PRODUCED. DELIVERY OF MA TERIAL WAS MADE TO HER AGENT. 5. LD. CIT(A) CONSIDERING THE FACTS OF THE CASE AND SUBMISSION OF THE ASSESSEE NOTED THAT THE AMOUNT IN QUESTION WAS FOUN D CREDITED IN THE STATEMENT OF AFFAIRS OF THE ASSESSEE AS INDIVIDUAL. THE COMPANY CLAIMED TO HAVE SUPPLIED THE GOODS TO MS. BINA AGGARWAL ON 22 ND OCTOBER, 2007 I.E. AFTER THE LAPSE OF MORE THAN 2 YEARS 8 MONTHS FROM THE DATE OF THE ITA NO. 3136/DEL/2009 ROHIT BAL VS. ACIT PAGE 4 OF 8 CREDIT OF THE AMOUNT IN ASSESSEES ACCOUNT ON 5.2.2 005. NORMALLY IT WOULD NOT TAKE SUCH A LONG TIME FOR SUPPLY OF GARME NTS. THE CREDIT HAS BEEN SHOWN IN THE INDIVIDUAL CASE OF ASSESSEE AND N OT IN THE CASE OF THE COMPANY. THE ASSESSEE HAS NOT PRODUCED ANY SUFFICIE NT EVIDENCE TO PROVE IDENTITY, CREDITWORTHINESS OF CREDITORS AND G ENUINENESS OF THE TRANSACTION IN THE MATTER. LD. CIT(A) RELIED UPON D ECISION OF SUPREME COURT IN THE CASE OF CIT VS. P. MOHANAKALA 291 ITR 278 (SUPREME COURT) AND THE DECISION OF DELHI HIGH COURT IN THE CASE O F INDUS VALLEY PROMOTERS LTD. VS. CIT 305 ITR 202. LD. CIT(A) IN T HE ABSENCE OF ANY EVIDENCE OF RECORD CONFIRMED THE ADDITION AND DISMI SSED THIS GROUND OF APPEAL . 6. AFTER CONSIDERING RIVAL SUBMISSION, WE DO NOT FI ND ANY MERIT IN THIS GROUND OF APPEAL OF ASSESSEE . IT IS NOT IN DI SPUTE THAT ASSESSEE HAD RECEIVED AMOUNT OF RS. 11,38,300/- THROUGH CHEQUE WHICH WAS IN HIS INDIVIDUAL NAME AND CREDITED TO HIS BANK ACCOUNT WH ICH WAS RECEIVED FROM MS. BINA AGGARWAL. THIS AMOUNT IS SHOWN AS LOA NS (LIABILITY) IN THE STATEMENT OF AFFAIRS OF ASSESSEE (PB 11). LD. COUNS EL FOR ASSESSEE, HOWEVER, SUBMITTED THAT THE AMOUNT WAS LATER ON TRA NSFERRED TO THE COMPANYS ACCOUNT FROM WHERE BILLS HAVE BEEN ISSUED FOR SALE OF GARMENTS TO MS. BINA AGGARWAL ON 22 ND OCTOBER, 2007. COPIES OF CERTAIN BILLS AND ACCOUNTS ARE FILED IN THE PAPER BOOK (PAG ES 12 TO 17). COPY OF THE BANK ACCOUNT OF ASSESSEE IS FILED AT PAGE 22 OF THE PAPER BOOK IN WHICH THE AMOUNT IN QUESTION IS CREDITED TO THE ACC OUNT OF ASSESSEE. IT IS ITA NO. 3136/DEL/2009 ROHIT BAL VS. ACIT PAGE 5 OF 8 DIFFICULT TO BELIEVE THAT THE PURCHASER OF GARMENT S WOULD WAIT FOR TWO YEARS AND 8 MONTHS AFTER GIVING THE AMOUNT IN QUEST ION FOR PURCHASE OF GARMENTS. FURTHER WHEN ORDER WAS PLACED TO THE COMP ANY, THE PURCHASER WOULD NOT GIVE THE CHEQUE IN THE NAME OF THE INDIVIDUAL ASSESSEE. FURTHER THE ASSESSEE REMAINED SILENT FROM THE DAY OF RECEIPT OF THE CHEQUE TILL THE ASSESSMENT PROCEEDINGS START ED AGAINST HIM. IN THE STATEMENT OF ACCOUNTS ASSESSEE HAS SHOWN THE AMOUNT IN QUESTION FROM MS. BINA AGGARWAL AS LOANS (LIABILITY). THE ASSESSM ENT PROCEEDINGS STARTED ON ISSUE OF NOTICE U/S 143(2) ON 22 ND MAY, 2006. THE ASSESSEE HAS HOWEVER ALLEGEDLY TRANSFERRED THE MONEY TO THE COMPANY IN THE YEAR 2007 BY ISSUING BILLS IN THE NAME OF MS. BINA AGGAR WAL ON 22 ND OCTOBER, 2007. THE STORY PROPOUNDED BY ASSESSEE IS THUS CLEA RLY AFTER THOUGHT AND AGAINST THE STATEMENT OF AFFAIRS FILED BY THE A SSESSEE. IT APPEARS THAT WHEN ASSESSMENT PROCEEDINGS HAVE STARTED AGAIN ST THE ASSESSEE THE ASSESSEE LATER ON FABRICATED THE BILLS IN THE N AME OF COMPANY AND THE AMOUNT IS TRANSFERRED TO THE COMPANY TO SHOW TH AT IT IS SHOWN AS SALE IN THE HANDS OF THE COMPANY. THE EXPLANATION O F THE ASSESSEE THUS CANNOT BE ACCEPTED IN ANY MANNER. ONCE THE ASSESSEE HAS SHOWN THE AMOUNT IN QUESTION AS LOAN, ASSESSEE CANNOT BE PERM ITTED TO CHANGE THE STAND IN LATER YEAR. THUS THE ASSESSEE FAILED TO PR OVE THE IDENTITY OF THE CREDITOR AND HER CREDITWORTHINESS AND GENUINENESS O F THE TRANSACTION. ASSESSEE MANIPULATED THE TRANSACTIONS IN THE NAME O F SALE TO THE CREDITOR BY THE COMPANY. THEREFORE EVEN IF SALE HAS BEEN SHOWN BY THE COMPANY THE FACT REMAINED THAT THE ASSESSEE RECEIVE D THE CREDIT IN THE ITA NO. 3136/DEL/2009 ROHIT BAL VS. ACIT PAGE 6 OF 8 YEAR UNDER CONSIDERATION FROM MS. BINA AGGARWAL WHI CH WAS NOT EXPLAINED BY THE ASSESSEE TO THE SATISFACTION OF TH E ASSESSING OFFICER. IN THE ABSENCE OF ANY CONFIRMATION OR ANY EVIDENCE ON RECORD, IT IS DIFFICULT TO BELIEVE THE EXPLANATION OF THE ASSESSEE. HON'BLE . CALCUTTA HIGH COURT IN THE CASES OF BHARATI PRIVATE LTD. VS. CIT 111 I TR 951 AND CIT VS. UNITED COMMERCIAL AND INDUSTRIAL CO. PVT. LTD. 187 ITR 596 HAVE HELD THAT MERE FILING OF CONFIRMATION NOT ENOUGH TO PROV E CREDIT. HOWEVER IN THE PRESENT CASE THE ASSESSEE HAS NOT EVEN FILED TH E CONFIRMATION FROM THE CREDITORS. THEREFORE CREDIT REMAINED UNEXPLAINE D. LD. COUNSEL FOR ASSESSEE RELIED UPON CERTAIN CASE LAWS ON THE PROPO SITION THAT WHEN AMOUNT IS SHOWN AS REVENUE RECEIPT AND TAXES HAVE B EEN PAID NO ADDITION U/S 68 BE MADE. HOWEVER THIS PROPOSITION I S NOT APPLICABLE IN THE CASE OF ASSESSEE BECAUSE ASSESSEE HAS SHOWN CRE DIT IN THE YEAR UNDER APPEAL WHICH ASSESSEE HAS FAILED TO EXPLAIN T HE SAME. SALE MADE BY ANOTHER COMPANY IS CLEARLY AFTER THOUGHT. THEREF ORE NO INTERFERENCE IS CALLED FOR IN THE MATTER. THIS GROUND OF APPEAL OF ASSESSEE IS DISMISSED. 7. ON GROUND NO. 2 ASSESSEE CHALLENGED THE ADDITION OF RS. 1,60,000/- AS INCOME FROM UNDISCLOSED SOURCES. THE AO NOTICED THAT ASSESSEE HAD INTRODUCED A SUM OF RS. 1,60,000/- IN CASH IN THE ACCOUNTS OF PROPRIETARY CONCERN M/S. THE IRIS COMPANY. THE A SSESSEE WAS ASKED TO EXPLAIN SOURCE OF THE DEPOSITS THE ASSESSEE HAD EXPLAINED THAT SOURCE OF THE CASH WAS FROM OPENING CASH BALANCE AND OTHER CASH BALANCE WITHDRAWN DURING THE YEAR. HOWEVER THE AO WAS NOT S ATISFIED WITH THE ITA NO. 3136/DEL/2009 ROHIT BAL VS. ACIT PAGE 7 OF 8 SOURCE OF RS. 1,60,000/- INTRODUCED AS CAPITAL IN M /S. IRIS COMPANY AS THE ASSESSEE FAILED TO EXPLAIN WITH COGENT EVIDENCE ABOUT THE SOURCE OF THE CASH AVAILABLE ON THE DATES WHEN THE AMOUNT WAS CREDITED. THE AO THEREFORE TREATED RS. 1,60,000/- AS INCOME FROM UND ISCLOSED SOURCES. 8. THE ASSESSEE REITERATED THE SAME FACTS BEFORE LD . CIT(A) AND FILED COPY OF CASH FLOW STATEMENT TO EXPLAIN SOURCE OF COPY OF RS. 1,60,000/-. 9. LD. CIT (A) AFTER CONSIDERING CASH FLOW STATEMEN T AND WITHDRAWALS MADE BY ASSESSEE NOTED THAT ASSESSEE HAS SHOWN DRAW INGS AT RS. 3,69,202/- DURING THE YEAR UNDER CONSIDERATION. WHE N THE ASSESSEE WAS CONFRONTED WITH THE FACT AS PER CASH FLOW STATEMENT ASSESSEE HAS SHOWN WITHDRAWALS MADE BY ASSESSEE AT RS. 1,70,000/- ONLY WHEREAS AS PER STATEMENT OF AFFAIRS ASSESSEE HAS SHOWN DRAWINGS A T RS. 3,69,202/-. THEREFORE NO CASH WOULD BE AVAILABLE TO ASSESSEE TO MAKE INTRODUCTION OF CASH IN M/S. THE IRIS COMPANY. THIS GROUND WAS A CCORDINGLY DISMISSED. 10. AFTER CONSIDERING RIVAL SUBMISSIONS, WE ARE OF THE VIEW NO INTERFERENCE IS CALLED FOR IN THE MATTER. THE ASSES SEE HAS FILED COPY OF DETAILS OF WITHDRAWALS OF RS. 3,69,202/- AT PAGE 28 OF THE PAPER BOOK. HOWEVER IN THE CASH FLOW STATEMENT THE WITHDRAWAL I S SHOWN AT RS. 1,70,000/- THEREFORE ASSESSEE FAILED TO ESTABLISH AVAILABILITY OF THE CASH ITA NO. 3136/DEL/2009 ROHIT BAL VS. ACIT PAGE 8 OF 8 WITH HIM FOR THE PURPOSE OF INTRODUCTION OF CASH I N M/S.THE IRIS COMPANY. ASSESSEE THUS FAILED TO EXPLAIN THIS ISSUE TO THE SATISFACTION OF THE AUTHORITIES BELOW. IN THE ABSENCE OF ANY COGENT AND RELEVANT EVIDENCE ON RECORD NO INTERFERENCE IS CALLED IN THE ORDER. THIS GROUND IS DISMISSED. 11. IN THE RESULT APPEAL OF ASSESSEE IS DISMISSED. PRONOUNCED IN THE OPEN COURT. SD/- SD/- (PRASHANT MAHARISHI) ( BHAVNESH SAINI ) ACCOUNTANT MEMBER JU DICIAL MEMBER DATED: 07. 6.2017 *VEENA* COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. PRINCIPAL CIT 4. CIT(A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR