Sh. Naresh Chauhan, Shimla V. DCIT, Chandigarh

ITA 345/CHANDI/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 0027 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-05-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 15-03-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 09-04-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Additional evidence; Revised return
• Section: 153A; 68; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH,CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND MS.RANO JAIN, ACCOUNTANT MEMBER ITA NO. 345/CHD/2015 ASSESSMENT YEAR: 2008-09 SHRI NARESH CHAUHAN, VS THE DCIT, ANANDAM VILLA, CENTRAL CIRCLE II, NEAR SARKEK HOUSE, CHANDIGARH. HORTICULTURE ROAD, NAV BAHAR, SHIMLA. PAN: ABPPC2719N (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI VISHAL MOHA N RESPONDENT BY : SHRI SUSHIL KUMAR,CIT-DR DATE OF HEARING : 25.04.2016 DATE OF PRONOUNCEMENT : 03.05.2016 O R D E R PER BHAVNESH SAINI,JM THIS APPEAL BY ASSESSEE HAS BEEN DIRECTED AGAINST THE ORDER OF LD. CIT(APPEALS)-3 GURGAON DATED 08.01.2015 FOR ASSESSMENT YEAR 2008-09. 2. WE HAVE HEARD LD. REPRESENTATIVES OF BOTH THE PARTIES, PERUSED THE FINDINGS OF AUTHORITIES BELOW AND CONSIDERED THE MATERIAL AVAILABLE ON RECORD. 3. ON GROUND NO. 1 AND 2, ASSESSEE CHALLENGED THE ORDER OF LD. CIT(APPEALS) IN NOT ADMITTING THE ADDI TIONAL EVIDENCE UNDER RULE 46A OF THE IT RULES AND CONFIRM ING THE ADDITION OF RS. 35 LACS ON ACCOUNT OF UNEXPLAIN ED CASH CREDIT UNDER SECTION 68 OF THE INCOME TAX ACT. 2 4. BRIEFLY THE FACTS OF THE CASE ARE THAT SEARCH & SEIZURE OPERATION UNDER SECTION 132(1) OF THE INCOM E TAX ACT WAS CONDUCTED ON 08.10.2010 IN CHAUHAN GROUP OF CASES. THE ASSESSEE FILED RETURN OF INCOM E UNDER SECTION 139 OF INCOME TAX ACT ON 10.10.2008 SHOWING TOTAL INCOME OF RS. 14,43,163/-. THE ASSES SING OFFICER ISSUED NOTICE UNDER SECTION 153A OF THE ACT AND ASSESSEE, IN RESPONSE THERETO, FILED RETURN OF INCO ME ON 05.09.2012 DECLARING TOTAL INCOME OF RS. 14,43,160/ -. THE PERUSAL OF UNSECURED LOANS TAKEN BY THE ASSESSE E IN THE YEAR UNDER CONSIDERATION SHOWS THAT ASSESSEE HA D TAKEN LOAN OF RS. 35 LACS FROM SHRI MANISH AND SMT. MEGHA BANSAL. THE ASSESSEE WAS ASKED TO FURNISH CONFIRMATIONS FROM THE SAID LOAN CREDITORS ALONGWIT H COPIES OF THEIR BANK STATEMENTS, ITR AND PAN NUMBER OF THE CREDITORS IN ORDER TO PROVE THEIR IDENTITY, CRE DIT WORTHINESS AND GENUINENESS OF THE TRANSACTIONS. THE ASSESSEE, HOWEVER, DID NOT FILE ANY CONFIRMATION FR OM THE ABOVE CREDITOR. SINCE ASSESSEE FAILED TO FURNI SH ANY DOCUMENTARY EVIDENCE IN THIS REGARD BEFORE ASSESSIN G OFFICER, THEREFORE, ASSESSING OFFICER REJECTED THE CONTENTION OF THE ASSESSEE THAT MERELY BECAUSE TRANSACTIONS HAVE BEEN ROUTED THROUGH BANK ACCOUNT, WOULD NOT EXPLAIN THE SOURCE AND NATURE OF THE RECE IPT. THE ASSESSING OFFICER NOTED THAT IT WAS RESPONSIBIL ITY OF THE ASSESSEE TO FILE NECESSARY CONFIRMATION FROM TH E CREDITORS ALONGWITH COPY OF THEIR BANK STATEMENT AN D INCOME TAX RETURN. IN THE ABSENCE OF ANY EVIDENCE ON 3 RECORD, THE ASSESSING OFFICER MADE ADDITION OF RS. 35 LACS ON ACCOUNT OF UNEXPLAINED CASH CREDIT UNDER SECTION 68 OF THE INCOME TAX ACT. 5. THE ASSESSEE FILED APPLICATION FOR ADMISSION OF ADDITIONAL EVIDENCE ALONGWITH SUPPLEMENTARY APPLICA TION AND IT WAS CONTENDED BEFORE LD. CIT(APPEALS) THAT T HE ADDITIONAL DOCUMENTS WERE ABSOLUTELY NECESSARY FOR ADJUDICATION OF THE CASE AND THAT THE SAME WERE NOT AVAILABLE WITH HIM AT THE TIME OF COMPLETION OF THE ASSESSMENT WHICH WAS, THEREFORE, SUFFICIENT CAUSE F OR NON-PRODUCTION BEFORE ASSESSING OFFICER. THE ADDIT IONAL EVIDENCES SOUGHT TO BE ADMITTED IN RESPECT OF BOTH THE CREDITORS WERE THEIR COPIES OF PAN CARD, BANK ACCOU NT STATEMENT AND CONFIRMATORY LETTERS. 5(I) THE LD. CIT(APPEALS) NOTED THAT ASSESSEE ATTEN DED THE PROCEEDINGS BEFORE ASSESSING OFFICER AND ORIGIN AL RETURN WAS FILED IN OCTOBER, 2008 AND RETURN UNDER SECTION 153A WAS FILED IN SEPTEMBER,2012 THEREFORE, ASSESSEE HAD SUFFICIENT TIME TO FILE THE EVIDENCE B EFORE ASSESSING OFFICER. RULE 46A OF IT RULES WOULD NOT GIVE RIGHT TO THE ASSESSEE TO FILE ADDITIONAL EVIDENCE U NLESS THE CASE FALLS WITHIN ONE OF THE CONDITIONS OF RULE 46A. THE LD. CIT(APPEALS) DID NOT FIND ANY CIRCUMSTANCE UNDER RULE 46A UNDER WHICH ADDITIONAL EVIDENCE SHOU LD BE ADMITTED, THEREFORE, REQUEST FOR ADMISSION OF ADDITIONAL EVIDENCE UNDER RULE 46A WAS REJECTED. T HE LD. CIT(APPEALS) ALSO CONFIRMED THE ADDITION ON MER IT 4 AND REJECTED THE CONTENTION OF THE ASSESSEE BECAUSE ADDITIONAL EVIDENCE HAS NOT BEEN ADMITTED AND FURTH ER, MERELY BECAUSE LOANS HAVE BEEN TAKEN THROUGH BANKIN G CHANNEL, WAS NOT SUFFICIENT TO DISCHARGE THE ONUS O F PROVING THE GENUINE CREDIT IN THE MATTER AND ACCORDINGLY, CONFIRMED THE ADDITION MADE BY THE ASSESSING OFFICER. 6. THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE LD. CIT(APPEALS) AND SUBMIT TED THAT ASSESSEE FILED ADDITIONAL EVIDENCES BEFORE LD. CIT(APPEALS) WHICH ARE COPY OF THE PAN CARD, BANK STATEMENTS AND CONFIRMATIONS FROM BOTH THE CREDITOR S. THESE DOCUMENTS ARE ABSOLUTELY NECESSARY FOR ADJUDICATION OF THE ISSUE AND GOES TO THE ROOT OF T HE MATTER. HE HAS SUBMITTED THAT THE ADDITIONAL EVIDE NCES WERE NOT AVAILABLE WITH THE ASSESSEE AT THE TIME OF ASSESSMENT DESPITE BEST EFFORTS MADE BY ASSESSEE TO PLACE THE SAME ON RECORD. THEREFORE, ASSESSEE WAS PREVENTED BY SUFFICIENT CAUSE FROM PRODUCING THESE VITAL AND NECESSARY DOCUMENTS BEFORE ASSESSING OFFICER, THEREFORE, ADDITIONAL EVIDENCES SHOULD HAVE BEEN ADMITTED BY THE LD. CIT(APPEALS). HE HAS SUBMITTED THAT SINCE LOANS HAVE BEEN TAKEN THROUGH BANKING CHANNEL , THEREFORE, NO ADDITION SHOULD BE MADE AGAINST THE ASSESSEE. 6(I) ON THE OTHER HAND, LD. DR RELIED UPON ORDERS O F THE ASSESSING OFFICER AND SUBMITTED THAT ASSESSEE F AILED 5 TO COMPLY WITH RULE 46A OF THE IT RULES THEREFORE, ADDITIONAL EVIDENCES WERE CORRECTLY REJECTED BY THE LD. CIT(APPEALS). HE HAS SUBMITTED THAT ASSESSEE, WHO WAS IN APPEAL BEFORE LD. CIT(APPEALS), AND INVOKED RULE 46A OF THE IT RULES, IT WAS INCUMBENT UPON ASSESSEE TO COMPLY WITH THE REQUIREMENTS OF RULE STRICTLY. HE HAS RELIED UPON DECISION OF DELHI HIGH COURT IN THE CAS E OF CIT VS MANISH BUILDWELL PVT. LTD. 16 TAXMAN.COM 27. 7. WE HAVE CONSIDERED RIVAL SUBMISSIONS. THE ASSESSING OFFICER AT THE ASSESSMENT STAGE ASKED THE ASSESSEE TO FURNISH COPIES OF THE BANK STATEMENTS, ITRS AND PAN NUMBER ALONGWITH CONFIRMATIONS OF BOTH THE CREDITORS IN ORDER TO PROVE IDENTITY, CREDIT WORTHI NESS OF THE CREDITORS AND GENUINENESS OF THE TRANSACTIONS I N THE MATTER. ACCORDING TO THE ASSESSEE, THE ASSESSEE MAD E BEST EFFORTS BUT THESE DOCUMENTS COULD NOT BE PRODU CED AT THE ASSESSMENT STAGE. THE ASSESSEE PRODUCED THES E DOCUMENTS BEFORE LD. CIT(APPEALS) AS ADDITIONAL EVIDENCES AND MADE A REQUEST FOR ADMISSION OF ADDITIONAL EVIDENCE BECAUSE ASSESSEE WAS PREVENTED BY SUFFICIENT CAUSE FROM PRODUCING THESE DOCUMENTS BEF ORE ASSESSING OFFICER. 7(I) RULE 46A (1)(C) OF THE INCOME TAX RULES PROVID ES THAT, CIT(APPEALS) COULD ADMIT THE ADDITIONAL EVIDENCE WHERE ASSESSEE WAS PREVENTED BY SUFFICIENT CAUSE FR OM PRODUCING BEFORE THE ASSESSING OFFICER ANY EVIDENCE WHICH IS RELEVANT TO ANY GROUND OF APPEAL. 6 8. THE ABOVE ADDITIONAL EVIDENCES ARE ABSOLUTELY RELEVANT AND NECESSARY FOR THE PURPOSE OF ADJUDICAT ING THE ISSUE AND GOES TO THE ROOT OF THE MATTER. THE ASSESSING OFFICER ALSO ASKED THE ASSESSEE TO PRODUC E THESE EVIDENCES AT THE ASSESSMENT STAGE IN ORDER TO DISCHARGE BURDEN UPON ASSESSEE UNDER SECTION 68 OF THE INCOME TAX ACT. HON'BLE SUPREME COURT IN THE CASE OF TEK RAM 262 ITR 118 HELD THAT, ADDITIONAL EVIDENCES ADMITTED AS RELEVANT AND REQUIRED TO BE LOOKED INTO BY THE AUTHORITIES BELOW. SAME VIEW IS TAKEN BY HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF MUKTA METAL WORKS 336 ITR 555. 8(I) SINCE ADDITIONAL EVIDENCES ARE RELEVANT AND GOES TO THE ROOT OF THE MATTER, THEREFORE, LD. CIT(APPEALS) SHOULD HAVE ADMITTED THE SAME AT THE APPELLATE STAGE. FURT HER, THE EXPLANATION OF THE ASSESSEE IS JUST AND PROPER THAT DESPITE MAKING BEST EFFORTS, THESE EVIDENCES COULD NOT BE FILED AT THE ASSESSMENT STAGE, THEREFORE, IT WOU LD PROVE THAT ASSESSEE WAS PREVENTED BY SUFFICIENT CAU SE FROM PRODUCING THESE RELEVANT EVIDENCES BEFORE ASSESSING OFFICER AT THE ASSESSMENT STAGE. 9. CONSIDERING THE TOTALITY OF THE FACTS AND CIRCUMSTANCES AND THAT THE ADDITIONAL EVIDENCES ARE RELEVANT AND GOES TO THE ROOT OF THE MATTER, THE LD . CIT(APPEALS) BEING THE FIRST APPELLATE AUTHORITY, H AVING CO-TERMINUS POWER OF THE ASSESSING OFFICER, SHOULD HAVE ADMITTED ADDITIONAL EVIDENCES IN ORDER TO DO SUBSTA NTIAL 7 JUSTICE BETWEEN THE PARTIES. IN VIEW OF THE MATTER , WE SET ASIDE THE ORDER OF THE LD. CIT(APPEALS) IN THIS REGARD AND ADMIT THE ADDITIONAL EVIDENCES FOR THE PURPOSE OF DECIDING ISSUE ON MERITS. 10. SINCE THESE ADDITIONAL EVIDENCES ARE ADMITTED A T THIS STAGE, THEREFORE, THE ISSUE ON MERIT SHALL HAV E TO BE DECIDED AFRESH BY THE ASSESSING OFFICER BECAUSE ASSESSING OFFICER DID NOT HAVE ANY OPPORTUNITY TO CONSIDER THESE ADDITIONAL EVIDENCES ON MERIT. WE, ACCORDINGLY, SET ASIDE THE ORDERS OF AUTHORITIES BE LOW AND RESTORE THIS ISSUE OF ADDITION OF RS. 35 LACS U NDER SECTION 68 OF THE ACT TO THE FILE OF ASSESSING OFFI CER WITH DIRECTION TO RE-DECIDE THE ISSUE OF ADDITION OF RS. 35 LACS ON ACCOUNT OF UNEXPLAINED CREDIT IN THE LIGHT OF ADDITIONAL EVIDENCES ADMITTED ABOVE, WITH DIRECTION TO THE ASSESSEE TO PRODUCE COPIES OF THESE ADDITIONAL EVIDENCES BEFORE ASSESSING OFFICER FOR FINAL DETERMINATION OF THE ISSUE ON MERIT. THE ASSESSING OFFICER SHALL GIVE REASONABLE SUFFICIENT OPPORTUNIT Y OF BEING HEARD TO THE ASSESSEE. 11. IN THE RESULT, GROUND NO. 1 OF APPEAL OF THE ASSESSEE IS ALLOWED AND GROUND NO. 2 OF APPEAL OF ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 12. ON GROUND NO. 3, ASSESSEE CHALLENGED ADDITION O F RS. 5,50,000/- ON ACCOUNT OF AGRICULTURAL INCOME. BRIEFLY THE FACTS OF THE CASE ARE THAT ASSESSEE HAS SHOWN AGRICULTURAL INCOME OF RS. 58,384/- UNDER SECTION 1 39 OF 8 THE ACT BUT IN THE RETURN FILED UNDER SECTION 153A, THE ASSESSEE HAD SHOWN AGRICULTURE INCOME OF RS. 6,08,384/-. THE ASSESSEE EXPLAINED BEFORE ASSESSIN G OFFICER THAT IT WAS AN INADVERTENT ERROR ON HIS PAR T AND TOTAL AGRICULTURE IS NOW SHOWN BUT NO DOCUMENTARY EVIDENCE HAVE BEEN PRODUCED IN SUPPORT OF THE CONTENTION. THEREFORE, ASSESSING OFFICER MADE THE ADDITION OF RS. 5,50,000/- ON ACCOUNT OF DIFFERENCE BETWEEN THE AGRICULTURE INCOME SO SHOWN UNDER SECTI ON 139 AND 153A OF THE ACT. 12(I) THE ASSESSEE SUBMITTED BEFORE LD. CIT(APPEA LS) THE SAME FACTS AND FILED DETAILS OF EARNING OF AGRICULT URE INCOME AND AGRICULTURE INCOME EARNED IN THE EARLIER YEARS. THE LD. CIT(APPEALS), HOWEVER, DID NOT ACCEPT CONTE NTION OF THE ASSESSEE BECAUSE DIFFERENCE IN THE AGRICULTURE INCOME SHOWN IN THE REGULAR RETURN OF INCOME AND RETURN FI LED UNDER SECTION 153A HAVE NOT BEEN RECONCILED THROUGH ANY EVIDENCE ON RECORD. THE LD. CIT(APPEALS) NOTED THAT ASSESSEE HAD AMPLE TIME TO HAVE FILED ANOTHER RETUR N AFTER THE SEARCH BECAUSE ORIGINAL RETURN WAS FILED ON 10. 10.2008 AND SEARCH TOOK PLACE ON 08.10.2010 THEREFORE, ADDI TION WAS CONFIRMED AND THIS GROUND WAS DISMISSED. 13. AFTER CONSIDERING RIVAL SUBMISSIONS, WE DO NOT FIND ANY MERIT IN THIS GROUND OF APPEAL OF THE ASSESSEE. THE ASSESSEE FILED ORIGINAL RETURN OF INCOME UNDER SECT ION 139 OF THE ACT ON 10.10.2008 DECLARING AGRICULTURE INCO ME OF RS. 58,384/- AND SHOWN TOTAL INCOME AT RS.14,43,163 /-. 9 SAME TOTAL INCOME WAS DECLARED IN THE RETURN FILED UNDER SECTION 153A OF THE ACT ON 05.09.2012. THE ASSESSE E FAILED TO EXPLAIN HOW ASSESSEE COULD HAVE SUBSTITUT ED AGRICULTURAL INCOME IN RETURN FILED UNDER SECTION 1 53A OF THE ACT BY INCREASING THE AGRICULTURE INCOME. IT I S AFTERTHOUGHT STORY CREATED BY ASSESSEE AFTER SEARCH IS CONDUCTED IN THE CASE OF THE ASSESSEE. THE AGRICUL TURE INCOME DECLARED BY ASSESSEE NOW HAVE NOT BEEN SUPPO RTED BY ANY EVIDENCE OR MATERIAL ON RECORD AND NO PLAUSI BLE EXPLANATION HAVE BEEN FILED WHY ADDITIONAL AGRICULT URE INCOME OF RS. 5,50,000/- WAS NOT SHOWN IN THE RETUR N OF INCOME FILED UNDER SECTION 139 OF THE ACT. THE ASS ESSEE NEVER FILED ANY REVISED RETURN TO CLAIM HIGHER AGRI CULTURE INCOME UNDER SECTION 139 OF THE ACT. THEREFORE, CONSIDERING TOTALITY OF THE FACTS AND CIRCUMSTANCES , WE DO NOT FIND ANY MERIT IN THIS GROUND OF APPEAL OF THE ASSESSEE. SAME IS ACCORDINGLY DISMISSED. 14. IN THE RESULT, GROUND NO. 3 OF APPEAL OF THE ASSESSEE IS DISMISSED. 15. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED, AS INDICATED ABOVE. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (RANO JAIN) (BHAVNE SH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 3 RD MAY, 2016. POONAM COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT(A), THE CIT, DR ASSISTANT REGISTRAR, ITAT/CHD