Bharat Bhusan Deo, Jajpur V. DCIT, Cuttack

ITA 337/CTK/2011

• Counselvise Citation: 33722114 RSA 2011
• Duration Of Justice: 1 year(s) 1 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-08-2012
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Next Hearing Date: 11-07-2012
• Assessment Year: 2007-2008
• Appeal Filed On: 20-06-2011
• Court: TRIBUNAL
• Department Lawyers: A BHATTACHARJEE
• Assessee Lawyers: G NAYAK
• Keywords: Unexplained cash credit; Principle of natural justice; Onus to prove

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK ( ) BEFORE . . , , HONBLE SHRI K.K.GUPTA, ACCOUNTANT MEMBER. /AND . . . , S HRI K.S.S.PRASAD RAO, JUDICIAL MEMBER / I.T.A.NO. 337/CTK/2011 / ASSESSMENT YEAR 2007 - 08 SRI BHARAT BHUSAN DEO, PROP. M/S.CHATANYA MINERALS , AT/P.O.BARAGADIA, DIST.JAJPUR 755 026 PAN: AATPD 6411 H - - - VERSUS - DY.COMMIS SIONER OF INCOME - TAX, CIRCLE 1(1), CUTTACK. ( /APPELLANT ) ( / RESPONDENT ) / FOR THE APPELLANT : / SHRI G.NAYAK, AR / FOR THE RESPONDENT: / SHRI A.BHATTACHARJEE, DR / DATE OF HE ARING: 11.07.2012 / DATE OF PRONOUNCEMENT: 14.08.2012 / ORDER . . . , SHRI K.S.S.PRASAD RAO, JUDICIAL MEMBER . THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER DT.31.3.2011 OF THE COMMISSIONER OF INCOME - T AX (APPEALS) FOR THE AY 2007 - 08. 2. THE ONLY ISSUE RAISED BY THE ASSESSEE IN THE PRESENT APPEAL IS AGAINST THE ORDER OF THE LEARNED CIT(A) CONFIRMING THE ADDITION OF 29,00,000 MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED CASH CREDIT. 3 . THE F ACTS IN BRIEF ARE THAT DURING THE COURSE OF ASSESSMENT U/S.143(3) OF THE I.T.ACT,1961, THE ASSESSING OFFICER FOUND THAT THE ASSESSEE HAD RECEIVED LOAN AMOUNTING TO 29,00,000 SPREAD THROUGHOUT THE ASSESSMENT YEAR UNDER CONSIDERATION IN DENOMINATION OF 20, 000 OR LESS FROM DIFFERENT PERSONS BEING RELATIVES AND STAFF. THE ASSESSING OFFICER OBSERVED THAT DESPITE SEVERAL OPPORTUNITIES THE ASSESSEE FAILED TO FURNISH THE COMPLETE DETAILS OF THE TRANSACTIONS INCLUDING LOAN CONFIRMATION ACCOUNTS AND 2 DOCUMENTS SUBST ANTIATE THE CREDITWORTHINESS OF THE CREDITORS. HE FURTHER OBSERVED THAT TAKING INTO ACCOUNT THE FACT THAT THE LOAN HAS BEEN RECEIVED IN CASH, NOT ONLY THE IDENTITY OF THE CREDITORS AND THEIR CREDITWORTHINESS REMAINED UNSUBSTANTIATED BUT ALSO THE GENUINENES S OF THE TRANSACTION WHICH REMAINED IN CLOUD. THEREFORE HOLDING THAT THE ASSESSEE HAS NOT BEEN ABLE TO DISCHARGE THE ONUS CAST UPON HIM TO PROVE THE GENUINENESS OF THE TRANSACTIONS , IDENTITY OF THE CREDITORS AND THE IR CREDITWORTHINESS, THE ASSESSING OFFICE R MADE ADDITION OF 29,00,000 TO THE TOTAL INCOME U/S.68 OF THE I.T.ACT,1961. ON APPEAL, THE LEARNED CIT(A) CONFIRMED THE SAME . A GGRIEVED, THE ASSESSEE IS IN THE PRESENT APPEAL BEFORE THE TRIBUNAL. 4. THE LEARNED AR OF THE ASSESSEE CONTENDED BEFORE US THAT THE ASSESSING OFFI CER DID NOT ACCEPT THE GENUINENESS OF THE LOAN TRANSACTIONS, THE IDENTITIES OF THE CREDITORS AND THEIR CREDIT - WORTHINESS, THOUGH THE INDIVIDUAL NAMES AND THEIR DETAIL ADDRESSES WERE PRODUCED BEFORE HIM. HE SUBMITTED THAT ALL THE TRANSACTIONS WERE DULY REC ORDED IN THE BOOKS OF ACCOUNT AND THE LOAN LIABILITY WAS SHOWN IN THE BALANCE SHEET BASING ON WHICH THE ASSESSMENT WAS MADE. MOREOVER, CONTRIBUTION FROM EACH INDIVIDUAL, BEING RELATIVES, STAFF AND KNOWN PERSONS, WAS LESS THAN 20,000 . THE ASSESSEE HAS DISCHARGED THE ONUS TO PROVE THE GENUINENESS OF THE TRANSACTIONS, IDENTITY OF THE CREDITORS AND THEIR CREDIT WORTHINESS. HE FURTHER SUBMITTED THAT THE ASSESSING OFFICER HAS NOT BEEN ABLE TO BRING ON RECORD ANY MATERIAL EVIDENCE T O SUPPORT AND CORROBORATE HIS FINDING, EXCEPT RESORTING TO ASSUMPTIONS ONLY. THE ONLY FACT THAT LOAN WAS RECEIVED IN CASH, MAY NOT BE VALID GROUND TO DOUBT ABOUT THE TRANSACTIONS. THE INTEREST FREE LOAN WAS RECEIVED FROM FRIENDS, RELATIVES AND STAFF AT THE TIME OF PAUCITY OF FUNDS AND ONLY FOR THE RUNNING AND SURVIVAL OF THE BUSINESS. HE CONTENDED THAT THE LOANS WERE REFUNDABLE AND IT IS SURPRISING TO NOTE THAT THE 3 ENFORCEABLE LIABILITY IS TAKEN INTO INCOME BY THE A.O. THE ASSESSEE HAS COME OUT WITH NECESS ARY SUPPORTING MATERIALS, DOCUMENTARY EVIDENCES AND INDIVIDUAL CONFIRMATIONS. NEITHER ANY CONTRADICTION, NOR ANY IN - GENUINENESS COULD BE SUBSTANTIATED BY THE CIT(A) EXCEPT MERELY DISBELIEVING THE ASSESSEES SUBMISSIONS AND EVIDENCES. PRINCIPLE OF PREPONDER ANCE OF PROBABILITY HAS NO ROLE TO PLAY IN ASSESSMENT MATTERS WHICH ARE ONLY TO BE DECIDED ON EVIDENCES. FOR EXAMINATION OF THE FACT OF THE CASE, ALL THE RELEVANT EVIDENCES LIKE LOAN CONFIRMATION FROM CREDITORS, STATEMENT OF LOAN REPAID THROUGH CHEQUE & CASH, ETC. WERE FILED BEFORE CIT(A) BUT WITHOUT THOROUGH EXAMINATION OF THE FACTS OF THE CASE, WITHOUT CAREFUL AND JUDICIOUS PERUSAL OF THE EVIDENCES FILED BEFORE HIM, AND WITHOUT TAKING ANY PERSONAL DEPOSITIONS FOR CROSS EXAMINATION OF THE CREDITORS AND WITHOUT GIVING SUFFICIENT OPPORTUNITY TO THE ASSESSEE, THE LEARNED CIT(A) HAS ACCEPTED AND UPHELD THE VIEW OF THE A.O. AND DISMISSED THE APPEAL OF THE ASSESSEE, WHICH IS NOT AT ALL JUSTIFIED. 5. THE LEARNED DR, ON THE OTHER HAND, SUPPORTED THE IMPUGNED ORD ERS OF THE AUTHORITIES BELOW AND CONTENDED THAT SINCE THE ASSESSEE FAILED TO DISCHARGE ITS ONUS OF PROVING THE THREE CONDITIONS AS ENVISAGED IN SECTION 68, THE ASSESSING OFFICER IS JUSTIFIED IN MAKING ADDITION U/S.68, WHICH HAS BEEN RIGHTLY BEEN CONFIRMED BY THE LEARNED CIT(A), WHICH NEEDS NO INTEREFERENCE. 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE IMPUGNED ORDERS OF THE AUTHORITIES BELOW AND THE MATERIAL AVAILABLE ON RECORD. THE ASSESSING OFFICER MADE THE IMPUGNED ADDITION U/S.68 ON THE OBSERV ATION THAT DESPITE ALLOWING SEVERAL OPPORTUNITIES, THE ASSESSEE DID NOT PROVIDE THE DETAILS OF THE TRANSACTION, INCLUDING LOAN CONFIRMATION ACCOUNTS AND DOCUMENTS TO SUBSTANTIATE THE CREDITWORTHINESS OF THE CREDITORS. IT IS IN THIS VIEW ALONE, 4 THE LEARNED CIT(A) HAS UPHELD THE ADDITION. BEFORE US THE LEARNED COUNSEL FOR THE ASSESSEE FILED A PAPER BOOK CONTAINING UNSECURED LOAN LEDGER ACCOUNT, LOAN CONFIRMATIONS OF VARIOUS LOAN CREDITORS AND ALSO THE DETAILS OF LOAN REPAYMENT IN CASH AS WELL AS CHEQUE . THE S AID DETAILS AS WELL AS LOAN CONFIRMATIONS ETC., ARE CLAIMED BY THE ASSESSEE TO HAVE BEEN FILED BEFORE THE LEARNED CIT(A) BUT WE FIND THAT THE LEARNED CIT(A) IN HIS CRYPTIC ORDER HAS CONFIRMED THE ADDITION WITHOUT EXAMINING SUCH DETAILS FURNISHED BY THE ASS ESSEE BEFORE HIM. IN VIEW OF THE COMPLETE DETAILS FURNISHED BY THE ASSESSEE ALONG WITH THE LOAN CONFIRMATION OF LOAN CREDITORS AS OF NOW IN THE PAPER BOOK, FOR THE INTEREST OF JUSTICE AND FAIR PLAY, WE SET ASIDE THE IMPUGNED ORDER OF THE LEARNED CIT(A) AND RESTORE THE ISSUE TO THE FILE OF THE ASSESSING OFFICER FOR CONSIDERING THE ISSUE RELATING TO CASH CREDITS AFRESH IN THE LIGHT OF EVIDENCES PRODUCED BY THE ASSESSEE AS IN THE PAPER BOOK FILED BEFORE US AND DECIDE THE ISSUE IN ACCORDANCE WITH LAW OF COU RSE STRICTLY FOLLOWING THE NATURAL JUSTICE. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE. S D/ - S D/ - ( . . ) , , (K.K.GUPTA), ACCOUNTANT MEMBER. ( . . . ) , (K.S.S.PRASAD RAO), JUDICIAL MEMBER ( ) DATE: 14.08.2012 ( ), (H.K.PADHEE), SENIOR.PRIVATE SECRETARY. 5 - COPY OF THE ORDER FORWARDED TO: 1 . / THE APPELLANT : 2 / THE RESPONDENT: 3 . / THE CIT, 4 . ( )/ THE CIT(A), 5 . / DR, CUTTACK BENCH 6 . GUARD FILE . / TRUE COPY, / BY ORDER, APPENDIX XVII SEAL TO BE AFFIXED ON THE ORDER SHEET BY THE SR. P.S./P.S. AFTER DICTATION IS GIVEN 1. DATE OF DICTATION 13.08.2012 . 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 14.08.2012 OTHER MEMBER . 3. DATE ON WHICH THE APPROVED D RAFT COMES TO THE SR. P.S./P.S. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT.... 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. P.S./P.S 14.08.2012 . 6. DATE ON WHICH T HE FILE GOES TO THE BENCH CLERK 14.08.2012 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK .. 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER ................ 9. DA TE OF DESPATCH OF THE ORDER ..