Sh. Naresh Chauhan, Shimla V. DCIT, Chandigarh

ITA 346/CHANDI/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 0058 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-04-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 15-03-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 09-04-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Additional evidence
• Section: 68

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. 346/CHD/2015 ASSESSMENT YEAR: 2009-10 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 : 28.04.2016 O R D E R PER BHAVNESH SAINI,JM THIS APPEAL BY ASSESSEE HAS BEEN DIRECTED AGAINST T HE ORDER OF LD. CIT(APPEALS)-3 GURGAON DATED 08.01.201 5 FOR ASSESSMENT YEAR 2009-10. 2. WE HAVE HEARD LD. REPRESENTATIVES OF BOTH THE PA RTIES, PERUSED THE FINDINGS OF AUTHORITIES BELOW AND CONSI DERED THE MATERIAL AVAILABLE ON RECORD. THE ASSESSEE IN THIS APPEAL HAS CHALLENGED THE ORDER OF LD. CIT(APPEALS) IN NOT ADM ITTING ADDITIONAL EVIDENCE UNDER RULE 46A OF THE INCOME TA X RULES AND IN CONFIRMING THE ADDITION OF RS. 7 LACS ON ACC OUNT OF UNEXPLAINED CASH CREDIT UNDER SECTION 68 OF THE INC OME TAX ACT. 2 3. BRIEFLY THE FACTS OF THE CASE ARE THAT IN THIS C ASE SEARCH UNDER SECTION 132(1) OF THE ACT WAS CONDUCTE D ON 08.10.2010 IN CHAUHAN GROUP OF CASES. PERUSAL OF UNSECURED LOANS TAKEN BY ASSESSEE SHOWS THAT ASSESS EE HAD TAKEN UNSECURED LOAN OF RS. 5 LACS AND 2 LACS F ROM SHRI RAM LAL & SHRI R.L.CHAUHAN RESPECTIVELY. THE ASSESSEE DID NOT FILE ANY CONFIRMATION FROM THE SAI D LOAN CREDITORS. THE ASSESSEE EXPLAINED THAT NO CONFIRMA TION IS AVAILABLE WITH HIM. THE ASSESSING OFFICER NOTED TH AT ASSESSEE FAILED TO FILE CONFIRMATION FROM THE CREDI TORS, COPY OF THEIR BANK STATEMENT AND INCOME TAX RETURN. THEREFORE, UNSECURED LOANS REMAINED UNEXPLAINED AND ADDITION OF RS. 7 LACS WAS MADE UNDER SECTION 68 OF THE ACT. 4. THE ASSESSEE FILED APPLICATION FOR ADMISSION OF ADDITIONAL EVIDENCES BEFORE LD. CIT(APPEALS). THE ADDITIONAL EVIDENCES SOUGHT TO BE ADMITTED WERE COP Y OF PAN CARD AND BANK STATEMENT OF BOTH CREDITORS. THE LD. CIT(APPEALS) NOTED THAT ASSESSEE WAS GIVEN SUFFICIE NT OPPORTUNITY AT THE ASSESSMENT STAGE BUT ASSESSEE DI D NOT FILE THESE ADDITIONAL EVIDENCES THEREFORE, ADMISSIO N OF ADDITIONAL EVIDENCE WAS REJECTED. THE LD. CIT(APPE ALS), ON MERIT ALSO DISMISSED THE APPEAL OF ASSESSEE OBSERVI NG THAT THE REQUEST OF ADMISSION OF ADDITIONAL EVIDENCE HAS ALREADY BEEN REJECTED. THE ASSESSEE'S SOLE CONTENT ION WAS THAT LOAN HAS BEEN TAKEN THROUGH BANKING CHANNEL. THE LD. CIT(APPEALS) NOTED THAT EVEN AT THE ASSESSMENT STAGE, 3 ASSESSEE FAILED TO FILE CONFIRMATION FROM THE CREDI TORS AND EVEN NO COPY OF INCOME TAX RETURN HAVE BEEN FURNISH ED. ONLY COPY OF PAN CARD OF THE CREDITORS HAS BEEN FIL ED. THE BANK STATEMENT SO FILED IS IN THE NAME OF SHRI RAM LAL CHAUHAN SHOWING A TRANSFER CREDIT OF RS. 6,50,000/- ON 03.04.2008 AND A DEBIT OF RS. 5 LACS OF WHICH CHEQU E NUMBER IS NOT GIVEN. IN THE BANK STATEMENT, THE NE XT DATE WITH NAME OF THE ASSESSEE IS MENTIONED. AS PER BAN K STATEMENT OF SHRI R.L.CHAUHAN, IT CONTAINED TWO ENT RIES OF 31.03.2008 WITH NARRATION OF AS ON THE DATE BALANC E RS. 2,01,499/- AND ON 04.04.2008 A DEBIT TRANSFER OF RS . 2 LACS. THE LD. CIT(APPEALS), THEREFORE, FOUND THAT EVEN IF ADDITIONAL EVIDENCES WERE CONSIDERED FOR ADMISSION, THEY WOULD HAVE BEEN OF NO HELP AS THE SAME ARE LACKING IN CREDIBILITY AND DOCUMENT SOUGHT STILL INCOMPLETE. THE LD. CIT(APPEALS), EVEN ON MERITS, CONFIRMED THE ADDITIO N. 5. WE HAVE CONSIDERED RIVAL SUBMISSIONS. THE ASSES SEE CLAIMED THAT DUE TO THE CONFIRMATION NOT AVAILABLE AT THE ASSESSMENT STAGE AND DESPITE MAKING BEST EFFORTS BY ASSESSEE, SAME COULD NOT BE PRODUCED BEFORE ASSESSI NG OFFICER. SAME IS THE POSITION BEFORE LD. CIT(APPEAL S) BECAUSE THE ASSESSEE FAILED TO FILE CONFIRMATION LE TTERS FROM BOTH THE CREDITORS EVEN BEFORE LD. CIT(APPEALS ). COPIES OF INCOME TAX RETURN OF BOTH THE CREDITORS W ERE ALSO NOT FILED. THE LD. COUNSEL FOR THE ASSESSEE A DMITTED DURING THE COURSE OF ARGUMENTS THAT THE CREDITORS A RE BROTHERS OF THE ASSESSEE. IT WOULD, THEREFORE, PRO VE THAT 4 WHEN ASSESSEE FAILED TO OBTAIN CONFIRMATIONS FROM T HE BROTHERS OF THE ASSESSEE, IT IS DIFFICULT TO BELIEV E THAT ASSESSEE WOULD HAVE MADE ANY EFFORT TO COLLECT ANY CONFIRMATION FROM HIS BROTHER. THIS ITSELF CREATE A DOUBT IN THE EXPLANATION OF THE ASSESSEE. HON'BLE CALCUT TA HIGH COURT IN THE CASE OF BHARATI PVT. LTD. VS CIT 111 I TR 951 AND CIT VS UNITED COMMERCIAL & INDUSTRIAL COMPANY P VT. LTD. 187 ITR 599 HELD THAT , MERE PRODUCTION OF THE CONFIRMATORY LETTERS DID NOT DISCHARGE THE ONUS LAY ON THE ASSESSEE TO PROVE GENUINE CREDIT UNDER SECTION 68 O F THE ACT. IN THE PRESENT CASE, EVEN THOUGH ASSESSEE FILED SOME ADDITIONAL EVIDENCE BEFORE LD. CIT(APPEALS) BU T FACT REMAINED THAT NO CONFIRMATION FROM THE CREDITORS WH O ARE BROTHERS OF THE ASSESSEE, HAVE BEEN FILED BEFORE LD . CIT(APPEALS). THEREFORE, BASIC REQUIREMENT OF PROV ING GENUINE CREDIT UNDER SECTION 68 HAVE NOT BEEN PROVE D BY THE ASSESSEE. 5(I) THE LD. CIT(APPEALS), ON GOING THROUGH BANK STATEMENT OF BOTH CREDITORS NOTED DISCREPANCY IN TH EIR BANK ACCOUNT AND CREDIBILITY OF THE DOCUMENTS AND A LSO NOTED THAT THE ADDITIONAL EVIDENCES ARE STILL INCOM PLETE AND ARE NOT ENOUGH EVEN TO PROVE CASE OF THE ASSESS EE. THE ASSESSEES MAIN RELIANCE WAS ON THE FACT THAT S INCE CREDITS HAVE BEEN TAKEN THROUGH BANKING CHANNEL, THEREFORE, ADDITION ON MERIT SHOULD NOT BE MADE. H ON'BLE CALCUTTA HIGH COURT IN THE CASE OF CIT VS UNITED COMMERCIAL & INDUSTRIAL CO. PVT. LTD. (SUPRA) AND I N THE 5 CASE OF M/S PRECISION FINANCE PVT. LTD. 208 ITR 465 HELD THAT, EVEN THE LOAN THROUGH BANK CANNOT BE ACCEPTED AS GENUINE UNLESS THE IDENTITY AND CREDIT-WORTHINESS O F THE CREDITORS ARE PROVED. MERE PAYMENT OF ACCOUNT PAYE E CHEQUE IS NOT SACROSANCT NOR CAN IT MAKE A NON-GENU INE TRANSACTION, GENUINE. THEREFORE, CONSIDERING THE TOTALITY OF THE FACTS AND CIRCUMSTANCES, IT IS CLEAR THAT AS SESSEE HAS NOT EVEN FILED THE CONFIRMATORY LETTERS OF THE CREDITORS AS ADDITIONAL EVIDENCE BEFORE LD. CIT(APPEALS) THER EFORE, THERE WAS NO PURPOSE IN ADMITTING THE PAN CARD AND BANK STATEMENTS OF THE CREDITORS AS ADDITIONAL EVIDENCE BECAUSE THESE WERE INCOMPLETE AND WOULD NOT PROVE THE GENUINENESS AND RELEVANCE OF THE ADDITIONAL EVIDENC ES AT THIS STAGE, PARTICULARLY IN THE ABSENCE OF CONFIRMA TORY LETTERS FROM THE CREDITORS. THE LD. CIT(APPEALS) W AS, THEREFORE, JUSTIFIED IN REFUSING TO ADMIT ADDITIONA L EVIDENCES WHICH ARE INCOMPLETE AND IMPROPER AND AS SUCH, ADDITION ON MERIT HAVE BEEN RIGHTLY MADE BY THE AUTHORITIES BELOW. WE DO NOT FIND ANY MERIT IN THE APPEAL OF THE ASSESSEE. THE SAME IS, ACCORDINGLY, DISMISS ED. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMISS ED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (RANO JAIN) (BHAVNE SH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 28 TH APRIL, 2016. POONAM COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT(A), THE CIT, DR ASSISTANT REGISTRAR, ITAT/CHD