ISS HICARE P.LTD, MUMBAI V. ITO WD 10(2)(3), MUMBAI

ITA 45/MUM/2014

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 2607 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-10-2015
• Appeal Filed By: Assessee
• Bench Allotted: I
• Next Hearing Date: 05-08-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 02-01-2014
• Court: TRIBUNAL
• Department Lawyers: E SHANKARAN
• Assessee Lawyers: RACHANA AGARWAL
• Keywords: Unexplained cash credit; Corroborative evidences
• Section: 68

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL I , BENCH MUMBAI , . . , BEFORE SHRI JOGINDER SINGH, JM & SHRI R.C.SHARMA, AM ./ ITA NO. 45 / MUM/201 4 ( / ASSESSMENT YEAR : 200 9 - 2010 ) M/S ISS HICARE PRIVATE LIMITED, PHIROJSHA NAGAR, EASTERN EXPRESS HIGHWAY, VIKROLI (EAST), MUMBAI - 400079 VS. ACIT - 10(2), MUMBAI - 20 ./ ./ PAN/GIR NO. : A A ACG 0539 K ( / APPELLANT ) .. ( / RESPONDENT ) /ASSESSEE BY : MS. RACHANA AGARWAL /REVENUE BY : SHRI E. SHANKARAN / DATE OF HEARING : 5 TH AUGUST , 201 5 / DATE OF PRONOUNCEMENT 30 - 10 - 2015 / O R D E R PER R.C.SHARMA, AM TH IS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A) , MUMBAI, DATED 10 - 10 - 2013 , FOR THE ASSESSMENT YEAR 2009 - 2010, IN THE MATTER OF ORDER PASSED U/S.14 4 OF THE IT ACT. 2. THE ASSESSEE IN ITS APPEAL IS AGGRIEVED BY THE ADDITION MADE U/S.68 OF THE ACT. 3. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORD PERUSED. AS PER THE TAX AUDIT REPORT, THE ASSESSEE COMPANY HAS SHOWN TO HAVE OBTAINED INTER CORPORATE DEPOSITS AND UNSECURED LOANS AMOUNTING TO RS.27,52,70, 000/ - FROM VARIOUS CONCERNS DURING THE YEAR, IN THE ABSENCE ITA NO. 45 /M/1 4 2 OF ANY SUPPORTING EVIDENCES/CONFIRMATIONS, IT WAS CONSTRUED IN THE ASSESSMENT ORDER THAT THE ASSESSEE COMPANY HAS NOT DISCHARGED ITS ONUS OF PROVING THE IDENTITY, GENUINENESS AND CREDITWORTHINESS OF THE LENDER AND HENCE, THE ABOVE AMOUNT OF RS.27,52,70,000/ - WAS ADDED AS UNEXPLAINED CASH CREDIT UNDER SEC. 68 OF THE ACT. AFTER CONSIDERING THE REMAND REPORT THE CIT(A) DELETED THE ADDITION OF RS. 26. 60 CRORES, HOWEVER, HE HAS CONFIRMED THE ADDITION OF RS. 2.10 CRORES. THE PRECISE OBSERVATION OF THE CIT(A) IS AS UNDER : - 8.4 I HAVE CONSIDERED THE FACTS AND CIRCUMSTANCES OF THE CASE. THE AO IN HIS REMAND REPORT HAS VERIFIED THE TRANSACTIONS. THE APPELLANT PROVED THE IDENTITY OF THE DEBTORS, GENUINENESS OF THE CREDITORS AND CREDITWORTHINESS OF THE CREDITORS OF RS.26,60,00,000/ - ONLY AND AO HAD ADDED RS.2,10,00,000/ - FOR THE FOUR PARTIES IN WHICH THE APPELLANT COULD NOT PROVE THE TRANSACTIONS FULLY. AO HAS STATED IN REMAND REPORT AS UNDER : - AS THE ASSESSEE COMPANY WAS NOT ABLE TO FURNISH ANY DOCUMENTATION IN RESPECT OF THE CREDITWORTHINESS OF THE ABOVE LOAN LENDERS, THE AR OF THE ASSESSEE COMPANY WAS ASKED DURING THE COURSE OF REMAND PROCEEDINGS, VIDE ORDER SHEET NOTING DATED 30.0.2013, TO PRODUCE THE ABOVE 4 LOAN CREDITORS FOR VERIFICATION ALONG WITH EVIDENCE OF THEIR CREDITWORTHINESS. THE ASSESSEE COMPANY HAS SHOWN TO HAVE OBTAINED FOLLOWING AMOUNT OF LOAN FROM THE 4 PARTIES MENTIONED ABOVE. N.T.DOSHI RS.97,70,000/ - N.T.DOSHI(HUF) RS.10,30,000/ - ASHA KIRTILAL SHAH RS.25,00,000/ - VIKMAN STEEL BALL INDUSTRIES RS.77,00,000/ - HOWEVER, DESPITE BEING GIVEN SPECIFIC OPPORTUNITY, THE ASSESSEES AR FAILED TO PRODUCE THE ABOVE LOAN CREDITORS BEFORE THE UNDERSIGNED AND ALSO FAILED TO FILE ANY EVIDENCE TO ESTA BLISH THE CREDITWORTHINESS OF THE ABOVE LOAN LENDERS TO PROVIDE THE LOANS TO THE ASSESSEE COMPANY. IN ABSENCE OF ANY VERIFIABLE DOCUMENTARY EVIDENCE TO ESTABLISH THE CREDITWORTHINESS OF THE LOAN CREDITORS, IT IS SUBMITTED THAT THE CREDITWORTHINESS OF THE L OAN LENDERS, GENUINENESS OF THE TRANSACTION AND THEIR IDENTITY CANNOT BE VERIFIED. 8.5 REGARDING THE ADDITION UNDER SEC.68, THE APPELLANT HAS TO PROVE THE IDENTITY OF THE CREDITORS , GENUINENESS OF THE TRANSACTIONS AND CREDITWORTHINESS OF THE CREDITORS. RE GARDING THE FOUR PARTIES IN WHICH THE AO HAD MADE ADDITIONS, THE APPELLANT HAD PROVED THE ITA NO. 45 /M/1 4 3 IDENTITY OF THE TRANSACTION, GENU INE NESS OF TRANSACTION AND APPELLANT HAD FAILED TO PROVE THE CREDITWORTHINESS OF THE TRANSACTION . REGARDING THE FOUR CREDITORS FOR RS .2,10,00,000/ - , THE APPELLANT HAS TO PROVE IDENTITY OF THE CREDITORS, CREDITWORTHINESS OF THE CREDITORS AND GENUINENESS OF THE CREDITORS IN VIEW OF THE FOLLOWING DECISION: I) ROSHAN DE HATTI VS. CIT(SC) REPORTED IN 107 ITR 938; II) C.KANT & CO. VS. CIT(CAL CUTTA) 126 ITR 63; III) DHANALAKHSMI STEEL RE - ROLLING MILLS VS. CIT(AP) 228 ITR 780; (IV) CIT VS. BIJU PATNAIK (SC) 160 ITR 674 V) MALABAR AGRICULTURAL CO. LTD. VS. CIT(KERALA) 229 ITR 548 8.6 IN VIEW OF THE ABOVE DECISIONS, THE APPELLANT HAS TO PROVE ALL THE THREE CONDITIONS I.E. IDENTITY OF THE CREDITOR, CREDITWORTHINESS OF THE CREDITOR AND GENUINENESS OF THE TRANSACTION . AS THE APPELLANT COULD ONLY PROVE THE IDENTITY OF THE CREDITORS AND GENUI NE NESS OF THE TRANSACTIONS AND FAILED TO PROVE THE CREDITWORT HINESS OF THE CREDITORS , HENCE, THE ADDITION OF RS.2,10,00,000/ - IS SUSTAINED. THE AOS ADDITION ON THE ABOVE GROUND IS FOR RS.27,52,70,000/ - AND ONLY RS.2,10,00,000/ - WAS CONFIRMED AND THE REST OF THE AMOUNT IS DELETED. GROUND OF APPEAL IS PARTLY ALLOWED . 4. A GAINST THE ABOVE ORDER OF CIT(A), THE ASSESSEE IS IN FURTHER APPEAL BEFORE US. 5. WE HAVE CONSIDERED RIVAL CONTENTIONS AND CAREFULLY GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AND FOUND THAT BY FURNISHING THE DETAILS BEFORE THE LOWER AUTHOR ITIES, THE ASSESSEE HAS NOT ONLY PROVED THE IDENTITY OF THE CREDITORS BUT ALSO GENUINENESS OF THE TRANSACTIONS. THE AO HAS MADE THE ADDITION BECAUSE THE CREDITORS WERE NOT PRODUCED BEFORE HIM FOR VERIFICATION. THE AO ALSO OBSERVED THAT THE ASSESSEE COULD NOT PROVE THE CREDITWORTHINESS OF THE CREDITORS . ASKING THE CREDITORS TO APPEAR BEFORE THE AO IS NOT IN HANDS OF THE ASSESSEE, HOWEVER, THE AO HAS SUFFICIENT POWER TO CALL THE CREDITORS INDEPENDENTLY BY ISSUE OF NOTICE U/S.131 OF THE ACT. IN THE INTEREST OF JU STICE AND FAIR PLAY, WE RESTORE THIS ISSUE BACK TO THE FILE OF THE AO FOR DECIDING AFRESH AFTER CALLING THE CREDITORS BY ISSUING NOTICE U/S.131. WE DIRECT THE ASSESSEE TO ITA NO. 45 /M/1 4 4 PROVE THE CREDITWORTHINESS OF THE CREDITORS BY PRODUCING THE EVIDENTIARY DOCUMENTS BE FORE THE AO. WE DIRECT ACCORDINGLY. 6 . IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED IN PART FOR STATISTICAL PURPOSES . ORDER PRONOUNCED IN THE OPEN COURT ON THIS 30 /10 /2015 . 30 /10 /2015 SD/ - SD/ - ( ) ( JOGINDER SINGH ) ( . . ) ( R.C.SHARMA ) / JUDICIAL MEMBER / AC COUNTANT MEMBER MUMBAI ; DATED 30 /10 /201 5 . . /PKM , . / PS / COPY OF THE ORDER FORWARDED TO : / BY ORDER, / ( ASSTT. REGISTRAR) , / ITAT, MUMBAI 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A), MUMBAI. 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE. //TRUE COPY//