Singhal Steel Tubes (P) Ltd., Kanpur V. Income Tax Officer , Kanpur

ITA 387/LKW/2011

• Counselvise Citation: 38723714 RSA 2011
• Duration Of Justice: 3 year(s) 1 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-08-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 17-07-2014
• Assessment Year: 2000-2001
• Appeal Filed On: 28-06-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ALOK MITRA
• Assessee Lawyers: P K KAPOOR
• Keywords: Principle of natural justice; Onus to prove
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH A , LUCKNOW BEFORE SHRI S UNIL KUMAR YADAV , JUDICIAL MEMBER AND SHRI. A. K. GARODIA , ACCOUNTANT MEMBER ITA NO. 387/LKW/2011 ASSESSMENT YEAR: 2000 - 01 SINGHAL STEEL TUBES (P) LTD. 79/4, LATOUCHE ROAD KANPUR V. INCOME TAX OFFICER WARD 6(2) KANPUR PAN: AACCS0183P (APP ELL ANT) (RESPONDENT) APP ELL ANT BY: SHRI. P. K. KAPOOR, C.A. RESPONDENT BY: SHRI. ALOK MITRA, D.R. DATE OF HEARING: 17 0 7 2014 DATE OF PRONOUNCEMENT: 07 0 8 2014 O R D E R PER SU NIL KUMAR YADAV: THIS APPEAL IS PREFERRED BY THE ASSESSEE AGAINST THE ORDER OF THE LD. CIT(A), INTER ALIA, ON THE FOLLOWING GROUNDS: - 1 . BECAUSE THE AUTHORITIES BELOW HAVE ERRED IN LAW AND ON FACTS IN HOLDING THAT CREDIT OF RS.1,00,000/ - APPEARING AS 'UNSEC URED LOAN' IN THE NAME OF 'SRI SHREE RAM GUPTA', REMAINED UNEXPLAINED AND, ON THAT BASIS, MAKING ADDITION OF RS.1,00,000/ - 2 . BECAUSE THE CREDIT IN QUESTION IS WHOLLY GENUINE AND ORIGINATED FROM WELL DEFINED SOURCE AND NO ADDITION FOR THE SAME AND FURTHER DIS ALLOWANCE OF INTEREST PAID BY THE 'APPELLANT' TO SUCH CREDITOR COULD NOT HAVE BEEN MADE. 3 . BECAUSE SOURCE OF CREDIT IN QUESTION BEING ATTRIBUTABLE TO THE CORRESPONDING DEBIT APPEARING IN THE BANK ACCOUNT OF THE PRINT TO PDF WITHOUT THIS MESSAGE BY PURCHASING NOVAPDF ( HTTP://WWW.NOVAPDF.COM/ ) : - 2 - : CREDITOR AND EVEN IF THERE REMAINED ANY DISPUTE ABOUT THE NATURE OF CREDIT IN THE BOOKS OF THE 'APPELLANT', ALTHOUGH NOT ADMITTED BY THE 'APPELLANT', NO ADDITION COULD HAVE BEEN MADE BY INVOKING THE PROVISIONS OF SECTION 68. 4 . BECAUSE THE 'APPELLANT' HAD DISCHARGED THE ONUS THAT LIED ON IT UNDER SECTION 68 OF THE ACT, BY PLACING ON RECORD WELL DOCUMENTED EVIDENCES IN SUPPORT OF THE GENUINENESS OF THE SAME AND ADDITION OF RS.1,00,000/ - AS MADE AND SUSTAINED BY THE AUTHORITIES BELOW IS WHOLLY ERRONEOUS BOTH ON FACTS AS WELL AS IN LAW. 5 . BECAUSE THE 'CIT (A)' HAS ERRED IN LAW AND ON FACTS IN UPHOLDING THE ADDITION OF RS.1,00,000 IN RESPECT OF UNSECURED LOAN FROM 'SHREE RAM GUPTA' ON THE GROUND THAT THE 'APPELLANT' HAS FAILED TO FURNISH THE COPY OF ACKNOWLEDGEMENT OF ITR OF THE CREDITOR. 6 . B ECAUSE THE 'CIT (A)' HA S ERRED IN LAW AND ON FACTS IN UPHOLDING THE ADDITION OF RS.29,342/ - ON ACCOUNT OF INTEREST PAID ON UNSECURED LOANS BORROWED FROM (I) SRI PRAMOD KUMAR; AND (II) SRI SHREE RAM GUPTA. 7 . BECAUSE INTEREST OF RS.14,671 (50% OF RS.29,342/ - ) IS ALSO NOT DISALLOWABL E, ALONE ON THE FACT THAT, THE 'CIT(A)' HAS ACCEPTED THE IDENTITY, GENUINENESS AND CREDITWORTHINESS OF SRI PRAMOD KUMAR, THE CREDITOR, HENCE, INTEREST PAID TO SUCH CREDITOR CANNOT BE VIEWED CONTRARILY. 8 . BECAUSE THE 'CIT (A)' HAS ERRED IN LAW AND ON FACTS IN MIS - INTERPRETING AND HOLDING THAT THE 'APPELLANT' HAS NOT PRESSED GROUND NO. 5 AS RAISED BEFORE HIM DURING THE COURSE OF APPELLATE PROCEEDINGS, HENCE, THESE GROUNDS NEEDS ADJUDICATION. 9 . WITHOUT PREJUDICE TO THE AFORESAID, DISALLOWANCE OF RS.40,000 CLAIMED ON OF COMMISSION PAID TO 'SRI RAJIV MITTAL' FOR PRINT TO PDF WITHOUT THIS MESSAGE BY PURCHASING NOVAPDF ( HTTP://WWW.NOVAPDF.COM/ ) : - 3 - : PROCUREMENT OF SALES ORDER ON BEHALF OF THE 'APPELLANT' IS WHOLLY ILLEGAL BOTH ON FACTS AS WELL AS IN LAW. 10 . BECAUSE AUTHORITIES BELOW HAVE ERRED IN LAW AND ON FACTS IN ALLOWING THE 'APPELLANT' DEDUCTIONS UNDER SECTION 80IA OF THE ACT. 11 . BECAUSE THE ORDER APPEALED AGAINST IS CONTRARY TO THE FACTS, LAW AND PRINCIPLES OF NATURAL JUSTICE. 2 . GROUNDS NO.1 TO 5 RELATE TO ADDITION OF RS.1 LAKH UNDER SECTION 68 OF THE INCOME - TAX ACT, 1961 (HEREINAFTER CALLED IN SHORT THE ACT') ON ACCOUNT OF UNSECURED LOAN INTRODUCED IN THE NAME OF SHRI. SHREE RAM GUPTA. 3 . THOUGH THE ASSESSEE HAS FURNISHED CONFIRMATION AND BANK STATEMENT WITH REGARD TO THIS CASH CREDIT IN THE NAME OF SHRI. SHREE RAM GUPTA, BUT IT WAS NOT ACCEPTED BY THE ASSE SSING OFFICER. THE LD. CIT(A) HAS ALSO CONFIRMED THE SAID ADDITION. 4 . NOW THE ASSESSEE IS BEFORE US AND THE LD. COUNSEL FOR THE ASSESSEE HAS INVITED OUR ATTENTION TO THE ORDERS OF THE LOWER AUTHORITIES WITH THE SUBMISSION THAT THE ASSESSEE HAS FURNISHED CON FIRMATION OF THE CREDITOR AND HIS BANK STATEMENT. THE AMOUNT WAS RECEIVED THROUGH CHEQUE, THEREFORE, THE GENUINENESS OF RECEIPT OF LOAN SHOULD NOT HAVE BEEN DOUBTED. THE LD. COUNSEL FOR THE ASSESSEE HAS FURTHER CONTENDED THAT ON THIS LOAN INTEREST WAS PA ID TO THE CREDITOR, O N WHICH TDS WAS ALSO DEDUCTED. THE RELEVANT DETAILS WERE FURNISHED BEFORE THE LOWER AUTHORITIES, BUT THEY DID NOT ACCEPT THE SAME. THE LD. COUNSEL FOR THE ASSESSEE HAS PLACED RELIANCE UPON VARIOUS JUDICIAL PRONOUNCEMENTS INCLUDING TH E ORDER OF THE TRIBUNAL IN THE CASE OF DWARIKADHISH SUGAR INDUSTRIES VS. INCOME TAX OFFICER IN I.T.A. NO.115/L/2011 IN SUPPORT OF HIS CONTENTION THAT WHERE THE LOAN WAS INTRODUCED THROUGH BANKING CHANNEL AND CONFIRMATION WAS FILED PRINT TO PDF WITHOUT THIS MESSAGE BY PURCHASING NOVAPDF ( HTTP://WWW.NOVAPDF.COM/ ) : - 4 - : BEFORE THE ASSESSING OFFI CER ALONG WITH BANK STATEMENT, ETC, THE CREDIT SHOULD BE ACCEPTED, AS THE ASSESSEE HAS DISCHARGED ITS PRIMARY ONUS TO PROVE THE GENUINENESS OF THE TRANSACTION AND CREDITWORTHINESS AND IDENTITY OF THE CREDITOR. THE CASE LAWS RELIED UPON BY THE LD. COUNSEL FOR THE ASSESSEE ARE AS UNDER: - 1 . INDRA CHAND AGARWAL VS. ADDL. CIT (I.T.A. NO.1027/KOL/2010 ITAT KOLKOTA BENCH). 2 . SUMATI DAYAL VS. CIT, 214 ITR 801 (SC). 3 . KALE KHAN MOHAMMAD HANIF VS. CIT, 50 ITR 1 (SC). 4 . SHREELEKH BANERJEE & ORS. VS. CIT, 49 ITR 112 (SC). 5 . G OVINDARAJULU MUDALIAR VS. CIT, 34 ITR 807 (SC) . 5 . THE LD. D.R., ON THE OTHER HAND, HAS PLACED RELIANCE UPON THE ORDER OF THE LD. CIT(A). 6 . HAVING GIVEN A THOUGHTFUL CONSIDERATION TO THE RIVAL SUBMISSIONS AND FROM A CAREFUL PERUSAL OF RECORD, WE FIND THAT THIS AMOUNT OF RS.1 LAKH WAS INTRODUCED AS LOAN IN THE BOOKS OF ACCOUNT BY THE ASSESSEE. IN ORDER TO PROVE THE GENUINENESS OF THE RECEIPT OF LOAN AND CREDITWORTHINESS AND IDENTITY OF THE CREDITOR, THE ASSESSEE HAS FILED CONFIRMATION LETTER, ADDRESS OF THE CRED ITOR AND HIS BANK STATEMENT. THE ASSESSEE HAS ALSO PAID INTEREST TO THE CREDITOR, O N WHICH TDS WAS DEDUCTED. IT WAS ALSO CONTENDED THAT THE CREDITOR IS ALSO ASSESSED TO TAX, OF WHICH DETAILS WERE ALSO FURNISHED. IN THE LIGHT OF THESE FACTS, WE ARE OF TH E VIEW THAT THE ASSESSEE HAS DISCHARGED THE PRIMARY ONUS TO PROVE THE GENUINENESS OF THE TRANSACTION AND IDENTITY AND CREDITWORTHINESS OF THE CREDITOR. THEREFORE, THIS CASH CREDIT SHOULD BE TREATED AS GENUINE AND NO ADDITION UNDER SECTION 68 OF THE ACT IS CALLED FOR. ACCORDINGLY, WE SET ASIDE THE ORDER OF THE LD. CIT(A) ON THIS ISSUE AND DELETE THE ADDITION. PRINT TO PDF WITHOUT THIS MESSAGE BY PURCHASING NOVAPDF ( HTTP://WWW.NOVAPDF.COM/ ) : - 5 - : 7 . GROUNDS NO.6 TO 7 RELATE TO THE INTEREST PAID ON THE AFORESAID CASH CREDIT. SINCE THE CREDIT IS CONSIDERED TO BE GENUINE, THE INTEREST PAID BY THE A SSESSEE SHOULD ALSO BE ALLOWED. ACCORDINGLY, WE SET ASIDE THE ORDER OF THE LD. CIT(A) ON THIS ISSUE AND DIRECT THE ASSESSING OFFICER TO ALLOW INTEREST PAID TO THE CREDITOR, SHRI. SHREE RAM GUPTA. ACCORDINGLY, ADDITION MADE ON THIS ACCOUNT IS ALSO DELETED . 8 . WITH REGARD TO GROUNDS NO. 8 & 9, IT WAS CONTENDED THAT THE LD. CIT(A) HAS DISMISSED THE GROUND HAVING OBSERVED THAT THIS GROUND WAS NOT PRESSED, WHEREAS THE ASSESSEE HAS CONTENDED BEFORE THE LD. CIT(A) THAT COMMISSION WAS PAID FOR COMMERCIAL EXIGENCY, T HEREFORE, THIS SHOULD HAVE BEEN ALLOWED, AS IT WAS PAID THROUGH CHEQUE. 9 . THE LD. D.R., ON THE OTHER HAND, HAS SUBMITTED THAT THE LD. CIT(A) HAS CATEGORICALLY OBSERVED IN HIS ORDER THAT THIS GROUND IS NOT PRESSED. ONCE THE ASSESSEE HIMSELF HAS ACCEPTED THE ADDITION IN THIS REGARD, IT CANNOT BE CHALLENGED BEFORE THE TRIBUNAL. 10 . HAVING GIVEN A THOUGHTFUL CONSIDERATION TO THE RIVAL SUBMISSIONS AND FROM A CAREFUL PERUSAL OF THE ORDER OF THE LD. CIT(A), WE FIND THAT THE LD. CIT(A) HAS CATEGORICALLY OBSERVED THAT TH IS GROUND WAS NOT PRESSED BY THE ASSESSEE. NOW BEFORE US , THE ASSESSEE HAS NOT FILED ANY EVIDENCE TO DEMONSTRATE THAT THE OBSERVATION OF THE LD. CIT(A) IS INCORRECT. IN THE LIGHT OF THESE FACTS, WE ARE OF THE VIEW THAT UNDER THE EVIDENCE ACT, THE FINDING GIVEN IN A JUDICIAL ORDER IS PRESUMED TO BE CORRECT UNLESS AND UNTIL CONTRARY IS PROVED. WE, THEREFORE, IN THE ABSENCE OF ANY DOCUMENTARY EVIDENCE, HOLD THAT THE OBSERVATION OF THE LD. CIT(A) IS CORRECT, AS THE ASSESSEE HIMSELF HAS CONCEDED A PARTICULAR ADDITION BEFORE THE LD. CIT(A) AND HENCE IT CANNOT BE CHALLENGED BEFORE THE TRIBUNAL , AS IT IS NOT A LEGAL GROUND. ACCORDINGLY, THIS GROUND IS DISMISSED. PRINT TO PDF WITHOUT THIS MESSAGE BY PURCHASING NOVAPDF ( HTTP://WWW.NOVAPDF.COM/ ) : - 6 - : 11 . GROUND NO.10 IS NOT PRESSED BY THE LD. COUNSEL FOR THE ASSESSEE. ACCORDINGLY, THE SAME IS ALSO DISMI SSED. 12 . IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 7.8.2014. SD/ - SD/ - [ A. K. GARODIA ] [ S UNIL KUMAR Y ADAV ] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 7 TH AUGUST , 2014 JJ: 3007 COPY FORWARDED TO: 1 . AP PELLANT 2 . RESPONDENT 3 . CIT(A) 4 . CIT 5 . DR ASSISTANT REGISTRAR PRINT TO PDF WITHOUT THIS MESSAGE BY PURCHASING NOVAPDF ( HTTP://WWW.NOVAPDF.COM/ )