SATISH AGARWAL (HUF), Jaipur V. ITO, Jaipur

ITA 411/JPR/2017

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 2239 (ITAT-JAIPUR)
• Duration Of Justice: 7 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-01-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2013-2014
• Appeal Filed On: 22-05-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R A VERMA CIT DHK
• Keywords: Unexplained cash credit; Principle of natural justice; Additional evidence; Onus to prove
• Section: 143(3); 142(1); 68

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH FOT; IKY JKO] U;KF;D LNL; ,OA JH FOE FLAG ;KNO ] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM AND SHRI VIKRAM SIN GH YADAV, AM VK;DJ VIHY LA-@ ITA NO. 411/JP/2017 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2013-14. SATISH AGRAWAL (HUF), A-38, SUNDER MARG, TILAK NAGAR, JAIPUR. CUKE VS. INCOME TAX OFFICER, WARD-6(3), JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. AAJHS 3607 N VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI MANISH AGARWAL (C.A.) JKTLO DH VKSJ LS@ REVENUE BY : SHRI R.A. VERMA (ADDL CIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 04.01.2018. ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 09/01/2018. VKNS'K@ ORDER PER: VIJAY PAL RAO, JM THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LD. CIT (A), AJMER DATED 17/04/2017 PERTAINING TO THE ASSESSMENT YEAR 2013-14. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL :- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE IN LAW, LD. CIT(A) HAS GROSSLY ERRED IN CONFIRMING ADDITION OF RS. 40,00,000/- MADE BY LD. AO U/S 68 BY TREATING THE SAME AS UNEXP LAINED CASH CREDITS. APPELLANT PRAYS ADDITION SO MADE MAY PLEAS E BE DELETED. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW, LD. CIT(A) HAS GROSSLY ERRED IN NOT ACCEPTING ADDITIONA L EVIDENCES FURNISHED BY ASSESSEE THOUGH THE ASSESSEE HAS DULY DEMONSTRATED THE SUFFICIENT REASONS WHICH PREVENTED HIM FROM FILING THE SAME DURING THE COURSE OF ASSESSMENT PRO CEEDINGS, 2 ITA NO. 411/JP/2017. SH. SATISH AGARWAL (HUF), JAIPUR. THUS IN NOT ADMITTING THE ADDITIONAL EVIDENCES, ACT ION OF LD. CIT(A) IS AGAINST THE PRINCIPLE OF NATURAL JUSTICE AND DESERVES TO BE HELD BAD IN LAW. 2.1. THAT THE LD. CIT(A) HAS FURTHER ERRED IN NOT ACCEPTING ADDITIONAL EVIDENCES CRUCIAL FOR THE ADJUDICATION, WHICH WERE IN FACT REFERRED TO LD. AO AND REMAND REPORT WAS SOUGHT IN RESPECT O F THE SAME AND NO ADVERSE OBSERVATION WHATSOEVER WERE GIVEN BY LD. AO IN REMAND REPORT IN RESPECT OF EVIDENCES FURNISHED, TH US, NON ACCEPTANCE OF ADDITIONAL EVIDENCES BY LD. CIT(A) IS BAD IN LAW AND ORDER SO PASSED DESERVES TO BE QUASHED. 3. THAT THE APPELLANT CRAVES THE RIGHT TO ADD, DEL ETE, AMEND OR ABANDON ANY OF THE GROUNDS OF THIS APPEAL AT THE TI ME OR BEFORE THE ACTUAL HEARING OF THE CASE. 2. SINCE, THE ASSESSEE HAS RAISED THE ISSUE OF DENI AL OF ADMISSION OF ADDITIONAL EVIDENCES BY THE LD. CIT(A) IN GROUND NO . 2 WHICH GOES TO THE ROOT OF THE MATTER, THEREFORE, WE FIRST TAKE UP GROUND NO. 2 OF THE ASSESSEES APPEAL. 3. THE LD. AR OF THE ASSESSEE SUBMITTED THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO PROPOSED TO EXAMINE THE CASH CREDITS APPEARING IN THE BOOKS OF ACCOUNTS OF THE ASSESSEE. THE ASSESSING OFFICER HAS ISSUED A SHOW CAUSE NOTICE ON 22/03/201 6, AT THE FAG END OF THE TIME LIMITATION FOR COMPLETING THE ASSESSMENT W HEREBY THE AO ASKED TO ASSESSEE TO EXPLAIN WHY THE LOAN TAKEN FROM FOUR PARTIES SHOULD NOT BE ADDED AS UNEXPLAINED CASH CREDIT. LD. A/R HAS S UBMITTED THAT THE ASSESSEE VIDE ITS LETTER DATED 28/03/2016 FILED REP LY TO THE SHOW CAUSE 3 ITA NO. 411/JP/2017. SH. SATISH AGARWAL (HUF), JAIPUR. NOTICE AND ALSO FURNISHED THE CONFIRMATION FROM THE CREDITORS ALONG WITH THE ADDRESS AND PAN OF THE LOAN CREDITORS. THEREFO RE, THE ASSESSEE CLAIMED THAT THE ASSESSEE DISCHARGED HIS ONUS TO PR OVE THE IDENTITY, GENUINENESS AND CREDITWORTHINESS OF THE LOAN CREDIT ORS. HOWEVER, THE ASSESSING OFFICER HAS MADE THE ADDITION OF THE SAID LOAN AMOUNT OF RS. 40 LACS ON THE GROUND THAT THE NOTICE ISSUED U/S 13 3(6) TO THE LOAN CREDITORS WERE RECEIVED BACK UN-SERVED. THE LD. AR HAS SUBMITTED THAT THE ASSESSEE WAS NOT GIVEN A PROPER OPPORTUNITY TO SUBMIT THE NECESSARY EXPLANATION AND RELEVANT MATERIAL ON RECO RD AS AFTER THE SHOW CAUSE NOTICE DATED 22/03/2016 THERE ARE HOLIDAYS AS WELL AS FESTIVALS AND THEREFORE IN THE LIMITED PERIOD OF TIME THE ASS ESSEE HAS FURNISHED THE EVIDENCE WHICH COULD BE COLLECTED DURING THE SA ID PERIOD. LD. A/R HAS FURTHER SUBMITTED THAT SINCE THE AO DISALLOWED THE CLAIM OF THE ASSESSEE, THEREFORE, THE ASSESSEE FILED ADDITIONAL EVIDENCE WITH AN APPLICATION UNDER RULE 46A OF THE INCOME TAX RULES WHEREIN THE ASSESSEE HAS EXPLAINED THAT THE INFORMATION/EVIDENC E IS CALLED BY THE AO IN THE SHOW CAUSE NOTICE DATED 22/03/2016 COULD NOT BE COLLECTED AND SUBMITTED AT THE TIME OF ASSESSMENT DUE TO HOLIDAYS ON ACCOUNT OF HOLY FESTIVAL AND ALSO TIME WAS VERY SHORT. THUS, THE ASSESSEE PROPOSED TO PRODUCE THE ADDITIONAL EVIDENCE IN THE SHAPE OF ACC OUNT CONFIRMATION 4 ITA NO. 411/JP/2017. SH. SATISH AGARWAL (HUF), JAIPUR. STATEMENT, INCOME-TAX RETURN ACKNOWLEDGMENT, RELEVA NT PAGES OF BANK STATEMENT SHOWING TRANSACTION ENTERED WITH THE ASSE SSEE, MASTER DATA DOWNLOADED FROM MCA PORTAL. HOWEVER, THE LD. CIT(A) REJECTED THE ADDITIONAL EVIDENCES OUT RIGHTLY WITHOUT ADMITTING THE SAME. THUS, THE LD. AR HAS PLEADED THAT ADDITIONAL EVIDENCES PRODUC ED BY THE ASSESSEE MAY BE ADMITTED IN SUPPORT OF THE CLAIM OF THE ASSE SSEE AND THE MATTER MAY BE REMANDED TO THE RECORD OF THE AO FOR VERIFIC ATION OF ADDITIONAL EVIDENCES, AND THEN DECIDING THE SAME IN ACCORDANCE WITH LAW. 4. ON THE OTHER HAND, THE LD. D/R VEHEMENTLY OBJECTE D TO THE ADMISSION OF THE ADDITIONAL EVIDENCES AS PRAYED BY THE ASSESSEE. HE HAS REFERRED TO THE FINDING OF THE LD. CIT(A) IN PA RA 3.1 AND SUBMITTED THAT THE LD. CIT(A) HAS CONSIDERED THE APPLICATION OF THE ASSESSEE AND TURNED DOWN THE SAME, ON THE GROUND THAT THE ASSESS EE DID NOT SEEK ANY FURTHER TIME BEFORE THE AO FOR PRODUCING THE PA RTIES OR ANY OTHER EVIDENCE, RATHER THE ASSESSEE CONTENDED THAT HE HAS DISCHARGED HIS ONUS TO PROVE IDENTITY AND CREDITWORTHINESS OF THE LOAN CREDITORS AND GENUINENESS OF THE TRANSACTION. HE HAS RELIED UPON THE DECISION OF THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. MANIS H BUILD WELL PVT. LTD. 204 TAXMAN 106 AND SUBMITTED THAT ADDITIONAL EVIDENCES CANNOT BE ACCEPTED AT THE FIRST APPELLANT STAGE WITHOUT 5 ITA NO. 411/JP/2017. SH. SATISH AGARWAL (HUF), JAIPUR. COMPLYING PROCEDURAL REQUIREMENTS PROVIDED UNDER RU LE 46A OF THE IT RULES. HE HAS RELIED UPON THE ORDERS OF THE AUTHOR ITIES BELOW. 5. WE HAVE CONSIDERED RIVAL CONTENTIONS AS WELL AS RELEVANT MATERIAL ON RECORD. AT THE OUTSET, WE NOTE THAT THE AO HAS ISSUED A SHOW CAUSE NOTICE U/S 142(1) DATED 22/03/2016, ASKED THE ASSES SEE AS TO WHY THE LOAN MAY NOT BE ADDED BACK TO THE TOTAL INCOME OF T HE ASSESSEE AS PER THE PROVISION OF SECTION 68 OF THE ACT. THE ASSESS EE FILED ITS REPLY VIDE LETTER DATED 28/03/2016 WHEREIN THE ASSESSEE SUBMIT TED THAT ASSESSEE HAS ALREADY FILED CONFIRMATION OF LOAN TAKEN FROM T HESE FOUR PERSONS ALONG WITH ADDRESS AND PAN. IT IS APPARENT THAT AF TER FILING THE REPLY DATED 28/03/2016 NO FURTHER TIME WAS AVAILABLE EITH ER WITH THE ASSESSING OFFICER OR TO BE ALLOWED TO THE ASSESSEE BECAUSE THE ASSESSMENT WAS TIME BARRING AND THE AO PASSED THE I MPUGNED ASSESSMENT ORDER ON 29/3/2016. IT IS ALSO NOT DISP UTED THAT BETWEEN THE SHOW CAUSE NOTICE DATED 22/3/2016 AND THE ORDER PASSED ON 29/3/2016 THERE WERE HOLIDAYS AND FESTIVALS OF HOLY AND THEREFORE THE ASSESSEE WAS GIVEN ONLY A LIMITED PERIOD FOR GIVING REPLY AND REQUISITE EVIDENCE AS CALLED FOR BY THE AO IN THE SHOW CAUSE NOTICE. THUS, THE ASSESSEE FILED AN APPLICATION BEFORE THE LD. CIT(A) UNDER RULE 46A OF THE 6 ITA NO. 411/JP/2017. SH. SATISH AGARWAL (HUF), JAIPUR. IT RULES, THE CONTENTS OF THE SAME HAS BEEN REPRODU CED BY THE LD. CIT(A) IN PARA 3 OF THE IMPUGNED ORDER AS UNDER:- 3.0. DURING APPEAL, THE ASSESSEE HAS FILED AN APPLI CATION ON 09.01.2017 FOR ADMISSION OF ADDITIONAL EVIDENCES UN DER RULE 46A OF THE IT RULES STATING AS UNDER: 'THE ASSESSMENT AGAINST WHICH APPEAL HAS BEEN FILED WAS COMPLETED U/ S 143(3) OF THE I T ACT,1961 . THE IN FORMATIONS/EVID ENCES CALLED BY AO IN SHOW CAUSE NOTICE DATED 22.03.2016 COULD NOT BE COLLECTE D AND SUBMITTED AT THE TIME OF ASSESSMENT PROCEEDINGS DUE TO HOLIDAYS ON A CCOUNT OF HOLI FESTIVAL AND ALSO TIME WAS VERY SHORT. THE INFORMATIONS/EVID ENCES WERE TO BE COLLECTED FROM LOAN CREDITORS AND SINCE LOANS WERE TAKEN THROUGH FINANCE BROKERS, THE APPELLANT WAS DEPENDENT ON THE BROKERS FOR COLLECTION OF THE INFORMATION FROM THE LOAN CREDITORS. THE APPELLANT COLLECTED THE REQUIRED INFORMATIONS/ EVIDENCES FROM THE CREDITORS BUT COULD NOT SUBMIT TO THE ASSESSING OFF ICER AS HE HAD ALREADY COMPLETED THE ASSESSMENT PROCEEDINGS AND PASSED THE ORDER ON 29.03.2016 AFTER COMPLETION OF ASSESSMENT PROCEEDINGS THE APPELLANT REQUEST YOU TO ADMIT THE FOLLOWING AD DITIONAL EVIDENCES IN RESPECT OF YASHVINDER SINGH SOIN, D G TRADERS PVT L TD AND ESSKEYEN INDIA PVT. LTD WHICH ARE RELEVANT TO GROUNDS OF APPEAL: 1. ACCOUNT CONFIRMATIONS STATEMENT 2. INCOME TAX RETURN ACKNOWLEDGEMENT FOR A Y 2013-1 4 3. RELEVANT PAGES OF BANK STATEMENT SHOWING TRANSAC TIONS ENTERED WITH THE ASSESSEE 4. MASTER DATA DOWNLOADED FROM MCA PORTAL THE ASSESSEE COULD NOT SUBMIT THE INFORMATION/EVIDE NCES CALLED BY THE AO AT THE FAG END DUE TO PAUCITY OF TIME. THE NON PRODUCT ION OF THE EVIDENCES DURING ASSESSMENT PROCEEDINGS WAS NOT WILFUL OR DEL IBERATE. IT IS PRAYED THAT IN THE INTEREST OF JUSTICE, THE A BOVE ADDITIONAL EVIDENCES MAY BE KINDLY BE ADMITTED 7 ITA NO. 411/JP/2017. SH. SATISH AGARWAL (HUF), JAIPUR. IN HIS WRITTEN SUBMISSION DATED 09.01.2017, THE ASS ESSEE HAS CLAIMED THAT 'THE CASE OF THE APPELLANT IS COVE RED UNDER RULE 46A(1)(C) AND (D) OF THE IT RULES'. 5.1 IT IS MANIFEST FROM THE EXPLANATION AS SET OUT BY THE ASSESSEEE IN THE APPLICATION THAT THE ASSESSEE EXPRESSED INABILI TY TO FURNISHED THE REQUISITE INFORMATION BEFORE THE AO DUE TO PAUCITY OF TIME GIVEN BY THE AO TO THE ASSESSEE VIDE SHOW CAUSE NOTICE 22/03/201 6. WE FURTHER NOTE THAT THE ADDITIONAL EVIDENCES SOUGHT TO BE PRODUCED BY THE ASSESSEE IN SUPPORT OF THE CLAIM WAS IN THE SHAPE OF ACCOUNT CO NFIRMATIONS STATEMENT, INCOME TAX RETURN ACKNOWLEDGMENT, RELEVA NT PAGES OF BANK STATEMENT SHOWING TRANSACTION ENTERED WITH THE ASSE SSEE, MASTER DATA DOWNLOADED FROM MCA PORTAL, WHICH CLEARLY REVEALS T HAT EXCEPT ACCOUNT CONFIRMATION STATEMENT ALL OTHER EVIDENCES ARE INDE PENDENT EVIDENCES BEYOND THE CONTROL OF ANY PARTIES OR THE LOAN CREDI TORS. THEREFORE, THERE IS NO ROOM FOR ANY MANIPULATION OR CREATING ANY AFT ERTHOUGHT EVIDENCE. THE LD. CIT(A) HAS REJECTED THIS APPLICATION OF THE ASSESSEE ON THE GROUND THAT THE ASSESSEE DID NOT SEEK TIME BEFORE T HE AO TO FILED THE ADDITIONAL EVIDENCES. HOWEVER, WE FIND THAT WHEN T HE ASSESSEE FILED ITS REPLY TO THE SHOW CAUSE NOTICE ON 28.3.2016 AND THE ASSESSMENT ORDER ITSELF WAS PASSED BY THE AO ON 29.3.2016 THEN NOTHI NG COULD HAVE BEEN ACHIEVED, EVEN IF THE ASSESSEE WOULD HAVE ASKED FUR THER TIME. IT IS 8 ITA NO. 411/JP/2017. SH. SATISH AGARWAL (HUF), JAIPUR. APPARENT THAT THE ASSESSMENT WAS TIME BARRING, THER EFORE, THERE WAS NO QUESTION FOR SEEKING FURTHER TIME OR ALLOWING THE S AME BY THE AO. WE FURTHER NOTE THAT THE LD. CIT(A) HAS ALSO ISSUED A REMAND ORDER AND AFTER CONSIDERING THE REMAND REPORT OF THE ASSESSIN G OFFICER HAS PASSED THE IMPUGNED ORDER. ONCE THE REMAND WAS SOUGHT BY T HE LD. CIT(A) THERE WAS NO HARM OR PREJUDICED TO BE CAUSED TO THE REVENUE IF THE ADDITIONAL EVIDENCE SOUGHT TO BE PRODUCED BY THE AS SESSEE WAS ALSO ASKED TO BE VERIFIED AND EXAMINED BY THE AO. THERE FORE, WE ARE OF THE CONSIDERED VIEW THAT LD. CIT(A) WAS NOT JUSTIFIED IN REJECTING THE APPLICATION OF THE ASSESSEE FOR FILING THE ADDITION AL EVIDENCE. AS REGARDS THE DECISION OF HONBLE DELHI HIGH COURT IN CASE OF CIT VS. MANISH BUILD WELL PVT. LTD.,(SUPRA), WE FIND THAT THE ISSUE BEFO RE THE HONBLE HIGH COURT WAS REGARDING ADMISSION OF ADDITIONAL EVIDENC E BY THE LD. CIT(A) WITHOUT GIVING AN OPPORTUNITY TO THE ASSESSING OFFI CER FOR HIS COMMENTS. THEREFORE, THE RELIANCE ON THE SAID DECISION IS MIS PLACED. IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES OF THE CASE AS WELL A S IN INTEREST OF JUSTICE, WE ADMIT THE ADDITIONAL EVIDENCE FILED BY T HE ASSESSEE BEFORE THE LD. CIT(A) AND SET ASIDE THE MATTER TO THE RECO RD OF THE AO FOR PROPER VERIFICATION AND EXAMINATION OF THE ADDITION AL EVIDENCES FILED BY 9 ITA NO. 411/JP/2017. SH. SATISH AGARWAL (HUF), JAIPUR. THE ASSESSEE AND THEN DECIDE THE ISSUE FRESH AFTER GIVING AN OPPORTUNITY OF HEARING TO THE ASSESSEE. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 09/01/2018. SD/- SD/- ( FOE FLAG ;KNO ( JH FOT; IKY JKO] ) (VIKRAM SINGH YADAV) ( VIJAY PAL RAO) YS[KK LNL; /ACCOUNTANT MEMBER U;KF;D LNL; / JUDICIAL MEMBER JAIPUR DATED:- 09/01/2018. POOJA/ VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT- SHRI SATISH AGARWAL (HUF), JAIPUR . 2. THE RESPONDENT THE ITO, WARD -6(3), JAIPUR. 3. THE CIT. 4. THE CIT (4), 5. THE DR, ITAT, JAIPUR 6. GUARD FILE (ITA NO. 411/JP/2017) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR