SHRI RAJ KUMAR DHANATEWAL, BHARATPUR V. ITO, Jaipur

ITA 341/JPR/2012

• Counselvise Citation: 34123114 RSA 2012
• Duration Of Justice: 2 year(s) 6 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-10-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2007-2008
• Appeal Filed On: 09-04-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Section: 131; 68; 69

Judgement Text

ITA NO. 341/JP/2012 SHRI RAJ KUMAR DHANATEWAL VS. ITO, WARD- 7(3), JAIP UR 1 IN THE INCOME TAX APPELLATE TRIBUNAL JAIPUR BENCH, JAIPUR (BEFORE SHRI R.P. TOLANI AND SHRI T.R. ME ENA) ITA NO. 341/JP/2012 ASSESSMENT YEAR : 2007-08 PAN : ABHPD 6729 K SHRI RAJ KUMAR DHANATEWAL VS. THE ITO 107, ANAND NAGAR, SIRSI ROAD WARD- 7(3) JAIPUR JAIPUR (APPELLANT) (RESPONDENT) ASSESSEE BY: SHRI RAJENDRA AGARWAL DEPARTMENT BY : SHRI RAJESH OJHA DATE OF HEARING: 10-09-2014 DATE OF PRONOUNCEMENT: 31-10-2014 ORDER PER T.R. MEENA, AM THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE LD. CIT (A)-III, JAIPUR DATED 05-12-2011 FOR THE ASSESSM ENT YEAR 2008-09 WHEREIN THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS:- ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE L D. CIT(A) HAS ERRED IN:- (I) CONFIRMING THE ADDITION OF RS. 1,17,750/- U/S 69 OF THE I.T. ACT . (II) CONFIRMING THE ADDITION OF RS. 2,12,000/- U/S 69 OF THE ACT. ITA NO. 341/JP/2012 SHRI RAJ KUMAR DHANATEWAL VS. ITO, WARD- 7(3), JAIP UR 2 2.1 AS REGARDS THE GROUND NO. (I) PERTAINING TO ADD ITION OF RS. 1,17,750/- U/S, 69 OF THE ACT, THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE FILED THE AFFIDAVIT BEFORE THE AO IN RESPECT OF CASH LOAN. T HE AO VIDE ORDER SHEET ENTRY DATED 14-12-2009 ASKED THE ASSESSEE TO PRODUC E THESE PERSONS WITH DETAILS OF IDENTITY, CREDITWORTHINESS / GENUINENESS OF THE LOANS. THE ASSESSEE VIDE LETTER DATED 21-12-2009 FILED VOTER ID CARD OF SHRI SHIV KUMAR BUT NO OTHER DETAILS WERE FILED. THE ASSESSEE WAS NOT ABLE TO PRODUCE THE CREDITORS BECAUSE OF THE REASONS THAT THEY ARE NOT AVAILABLE AT HOME. THE AO ON THE BASIS OF THE REQUEST OF THE AO SENT NOTICES TO THE RESPECTIVE CREDITORS U/S 131 BY REGISTERED POST GIVING TIME TO REMAIN PRESENT ON THE DATE OF HEARING I.E. 29-12-2009. THE NOTICES SENT TO SHRI SHIV KUMAR SHA RMA, SANTOSH SHARMA AND SHRI GATTU SINGH RETURNED UNSERVED BY THE POSTA L AUTHORITY WITH THE REMARKS INCOMPLETE ADDRESS. THE ASSESSEE AND OTHE R WITNESSES DID NOT ATTEND THE PROCEEDINGS FIXED FOR 29-12-2009. IN VIE W OF THESE FACTS AND CIRCUMSTANCES OF THE CASE, THE AO HAD LEFT NO ALTER NATIVE BUT TO MAKE ADDITION OF RS. 1,17,750/- U/S 69 OF THE ACT. 2.2 THE ASSESSEE PREFERRED FIRST APPEAL BEFORE THE LD. CIT(A) WHO DISMISSED THIS GROUND OF THE ASSESSEE BY OBSERVING AS UNDER:- 3.3 I HAVE CAREFULLY CONSIDERED THE RIVAL STANDS OF THE AO AND THE LD. AR IN THIS REGARD. THE AO HAS MADE T HE ABOVE ADDITION U/S 69 OF THE I.T. ACT WHICH IS APPARENTLY NOT A CORRECT SECTION TO DEAL WITH THE ISSUE OF CASH CREDITS AS S UCH. IN OTHER ITA NO. 341/JP/2012 SHRI RAJ KUMAR DHANATEWAL VS. ITO, WARD- 7(3), JAIP UR 3 WORDS, INSTEAD OF SECTION 69, THE AO SHOULD HAVE IN VOKED SECTION 68 OF THE I.T. ACT IN THIS REGARD. HOWEVER, THIS BEING A PURE PROCEDURAL OMISSION ON THE PART OF THE AO, THE REFORE, THE SAME HAS NOT BEEN CONSIDERED AS FATAL IN NATURE AND IGNORED ACCORDINGLY. THE RELIANCE IN THIS REGARD IS PLACED ON FOLLOWING DECISION. I. CIT VS. QUALITY - 224 ITR 77 (PATNA) II. M..V. NAGRAJA - 70 ITD 318 (BANG.) NOW COMING TO THE MERIT PART OF THE ISSUE, UNDER CO NSIDERATION , IT IS NOTED THAT THE AO HAS DISALLOWED THE ABOVE CA SH CREDITS ON THE BASIS OF THE FACT THAT THE APPELLANT COULD NOT PRODUCE THE CREDITORS AS ASKED FOR. EVEN SUMMONS ISSUED ON THE REQUEST OF THE APPELLANT, WERE ALSO REMAINED UNSERVED AS SUCH, THEREFORE, THE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF S UCH LOANS COULD NOT BE ASCERTAINED. IN THIS REGARD, IT IS FEL T THAT SIMPLY FURNISHING THE AFFIDAVITS OF THE CASH CREDITORS ARE NOT SUFFICIENT TO DISCHARGE THE OBLIGATION CASE ON THE ASSESSEE U/ S 68 OF THE I.T. ACT, IF THE CREDITORS ARE NOT PRODUCED BEFORE THE AO FOR VERIFICATION. THE ABOVE HAS BEEN EXPRESSED BY HON'B LE ASSAM HIGH COURT IN THE CASE OF CHOWKCHAND BALABUX 41, IT R 465, WHEREIN IT HAS BEEN HELD THAT THERE IS NOTHING WRON G IN REJECTING THE AFFIDAVIT OF PERSONS WERE NOT PRODUCED TO THE A O FOR VERIFICATION OF FACT STATED THEREIN. CONSIDERING TH E ABOVE LEGAL ASPECT AND THE FACTS THAT SUCH LOANS WERE RECEIVED IN CASH AND THE LOANERS ARE NOT ASSESSED TO TAX ETC. I FIND THE AO WAS FULLY JUSTIFIED IN TREATING SUCH LOANS OF RS. 1,17,750/- AS UNPROVED IN NATURE. ACCORDINGLY, THE ADDITION OF RS. 1,17,750/- MADE IN THIS REGARD IS UPHELD. CONSEQUENTLY, THIS GROUND OF APPE AL IS REJECTED. 2.3 AS REGARDS GROUND NO. 2 OF THE ASSESSEE PERTAIN ING TO CONFIRMATION OF ADDITION OF RS. 2,12,000/- U/S 69 OF THE ACT, THE B RIEF FACTS OF THE CASE ARE THAT THE ASSESSEE FILED AFFIDAVIT IN RESPECT OF C ASH LOANS. THE AO VIDE NOTE SHEET ENTRY DATED 14-12-2009 ASKED THE ASSESSEE TO PRODUCE THESE PERSONS ITA NO. 341/JP/2012 SHRI RAJ KUMAR DHANATEWAL VS. ITO, WARD- 7(3), JAIP UR 4 WITH IDENTITY, CREDITWORTHINESS AND GENUINENESS O F THE CREDITS. THE ASSESSEE VIDE LETTER DATED 21-12-2009 FILED VOTER CARD ID OF SHRI ASHOK KUMAR, MANOJ CHOUDHARY, CHANDERPAL SINGH AND TARA CHAND AN D SURENDER SINGH. THE ASSESSEE EXPRESSED HIS INABILITY BEFORE THE AO TO PRODUCE THESE CREDITORS AS THEY ARE NOT AVAILABLE AT HOME. ON THE REQUEST O F THE ASSESSEE, THE AO SENT NOTICE U/S 131 OF THE ACT BY REGISTERED POST TO THE SE CREDITORS GIVING SEVEN DAY TIME TO PRODUCE BEFORE THE AO ON 29-12-2009. TH E NOTICES SENT TO THE CREDITORS WERE RETURNED BACK BY THE POSTAL AUTHORIT Y WITH THE REMARKS INCOMPLETE ADDRESS. THE ASSESSEE ALSO ATTENDED TH E PROCEEDINGS FIXED FOR 29-12-2009. SINCE THE FOLLOWING PERSONS WERE HAVING PAN , THE LOAN IN THEIR NAMES WAS TREATED AS EXPLAINED. NAME OF THE PERSON PAN AMOUNT MANOJ CHOUDHARY AHFPC 5048 M RS. 19,500 CHANDER PAL SINGH CGGPS 0408 E RS. 18,000 SURENDER SINGH CHDPS 1156 B RS. 18,500 TOTAL RS. 56,000 IN VIEW OF THESE FACTS, THE CASH LOAN OF RS. 2,12,0 00/- (RS. 2,68,000 MINUS RS. 56,000) REMAINED UNPROVED AS THE CREDITORS, IDE NTITY, CREDITWORTHINESS AND GENUINENESS WERE NOT PROVED BEFORE THE AO. THER EFORE, THE AO MADE ADDITION OF RS. 2,12,000/- U/S 69 OF THE ACT ITA NO. 341/JP/2012 SHRI RAJ KUMAR DHANATEWAL VS. ITO, WARD- 7(3), JAIP UR 5 2.4 THE ASSESSEE PREFERRED FIRST APPEAL BEFORE THE LD. CIT(A) ON THIS ISSUE WHO CONFIRMED THE ADDITION MADE BY THE AO BY FOLLO WING OBSERVATION. 6.3 I HAVE DULY CONSIDERED THE RIVAL STANDS OF TH E AO AND LD. AR IN THIS REGARD AND FOUND THAT THE FACTS AND CIRCUMSTANCES OF THE UNPROVEN CASH CREDITS OF RS. 2 ,12,000/- OF M/S. ARTI HANDICRAFTS ARE EXACTLY AKIN TO THE SIMIL AR ISSUE OF M/S. MANGLAM RESORT, AS DISCUSSED IN PARA NO. 5.3 I N THE EARLIER PART OF THIS ORDER. ACCORDINGLY, FOLLOWING THE SAME BASIS AND REASONING, IT IS CONCLUDED THAT THE CASH CREDITS OF RS. 2,12,000/- OF M/S. ARTI HANDICRAFTS ARE ALSO RIGHTLY CONSIDERE D AS UNPROVED IN THE NATURE BY THE AO. IN VIEW OF THE SAME, THE A DDITION MADE IN THIS REGARD IS HEREBY UPHELD. CONSEQUENTLY, THIS GROUND OF APPEAL IS REJECTED. 2.5 DURING THE COURSE OF HEARING, THE LD. AR OF THE ASSESSEE SUBMITTED THAT IN THE SIMILAR FACTS AND CIRCUMSTANCES, THE LD. CI T(A) HAD DELETED THE ENTIRE ADDITION MADE U/S 69 IN THE IMMEDIATELY PRECEDING ASSESSMENT YEAR 2006- 07 VIDE HIS APPEAL ORDER DATED 22-07-2010 AND APPEA L NO. 294/JPR08-09 AND THE ITAT JAIPUR BENCH HAS ALSO DISMISSED THE APPEAL FILED BY THE REVENUE VIDE APPEAL ORDER DATED 11-02-2011 IN ITA NO. 1205/ JP/2010. 2.6 DURING THE COURSE OF HEARING, THE LD. DR RELIED ON THE ORDERS OF THE LOWER AUTHORITIES. 2.7 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. WE FIND FROM THE RECORD THAT T HE LD. AR OF THE ASSESSEE HAS NOT PRODUCED ANY EVIDENCE PERTAINING TO DISMISS AL OF THE REVENUES APPEAL AND ITAT ORDER ON THE ISSUE. IN SUCH CIRCUMS TANCES, WE HAVE NO ITA NO. 341/JP/2012 SHRI RAJ KUMAR DHANATEWAL VS. ITO, WARD- 7(3), JAIP UR 6 ALTERNATIVE EXCEPT TO SEND BACK THE MATTER TO THE F ILE OF THE AO TO DECIDE THE APPEAL OF THE ASSESSEE DE NOVO BY GIVING ADEQUATE O PPORTUNITY OF BEING HEARD. THE ASSESSEE IS ALSO DIRECTED TO PRODUCE ALL THESE EVIDENCES BEFORE THE AO PERTAINING TO DELETION OF ADDITIONS U/S 68 OF TH E ACT. THUS THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 3.0 IN THE RESULT, THE APPEAL OF THE ASSESSEE IS A LLOWED FOR STATISTICAL PURPOSES THE ORDER PRONOUNCED IN OPEN COURT ON 31-10-2014 . SD/- SD/- (R.P. TOLANI) (T.R. MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER JAIPUR DATED: 31ST OCT , 2014 *MISHRA COPY FORWARDED TO:- 1. SHRI RAJ KUMAR DHANATEWAL, JAIPUR 2. THE ITO ,WARD- 7(3) JAIPUR 3. THE LD. CIT 4. THE LD. CIT(A), JAIPUR 5..THE LD. DR 6.THE GUARD FILE (IT NO. 341/JP/2012) BY ORDER A.R. , ITAT JAIPUR