M/s Foram Developers, RAJKOT-GUJARAT V. The Income Tax Officer, Ward-2 (4), RAJKOT-GUJARAT

ITA 47/RJT/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 9069 (ITAT-RAJKOT)
• Duration Of Justice: 1 year(s) 2 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-04-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 18-04-2017
• Assessment Year: 2007-2008
• Appeal Filed On: 03-02-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: AVINASH KUMARSR
• Assessee Lawyers: MJ RANPURA
• Keywords: Unexplained cash credit
• Section: 68

Judgement Text

ITA NO.47/RJT/2016 A.Y.2007 - 08 , IN THE INCOME TAX APPELLATE TRIBUNAL , RAJKOT BENCH, RAJKOT (CONDUCTED THROUGH E - COURT AT AHMEDAB A D) BEFORE SHRI MAHAVIR PRASAD , JUDICIAL MEMBER AND SHRI MANISH BORAD , ACCOUNTANT MEMBER ./ ITA NO.47/RJT/2016 / ASSTT. YEAR: 20 0 7 - 20 0 8 M/S.FORAM DEVELOPERS, NEAR AERODRAM FATAK, 2 - GEET GUNJAN SOCIETY, RAJKOT PAN: AABFF7235M VS . INCOME TAX OFFICER, WARD - 2(4), RAJKOT (APPLICANT) (RESPONENT) ASSESSEE BY : SHRI M.J. RANPURA , AR REVENUE BY : SHRI AVINASH KUMAR,SR. DR / DATE OF HEARING : 18 / 04 / 201 7 / DATE OF PRONOUNCEMENT: 20 / 04 /201 7 / O R D E R PER MANISH BORAD, ACCOUNTANT MEMBER THIS APPEAL BY ASSESSEE FOR A.Y.2007 - 08 IS DIRECTED AGAINST THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX(APPEALS) - 2, RAJKOT (IN SHORT, LD.CIT(A)) ORDER DATED 18/11/2015 ARISING OUT OF ORDER U/S.143(3) R.W.S. 254 OF THE INCO ME TAX ACT,1961 (HEREIN AFTER REFERRED TO AS ACT) FRAMED ON 23/12/2011 BY INCOME TAX OFFICER, WARD - 2(4), RAJKOT . 2. ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL: ITA NO.47/RJT/2016 A.Y.2007 - 08 1.0 THE GROUNDS OF APPEAL MENTIONED HEREUNDER ARE WITHOUT PREJUDICE TO ONE ANOTHER. 2.0 THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) - 2, RAJKOT [HEREINAFTER REFERRED AS TO THE 'CIT(A)'] ERRED ON FACTS AS ALSO IN LAW IN CO NFIRMING THE ADDITION OF 4,69, 45/ - MADE BY THE AO U/S. 68 OF THE INCOME - TAX ACT.1961 [HEREINAFTER REFERRED AS TO THE 'A CT'] ON ACCOUNT OF UNSECURED LOANS RECEIVED FROM VARIOUS PARTIES ON THE ALLEGED GROUND THAT THE APPELLANT FAILED TO PROVE IDENTITY, GENUINENESS AND CREDITWORTHINESS OF THE DEPOSITORS. THE ADDITION IS TOTALLY UNJUSTIFIED ON FACTS AS ALSO IN LAW AND MAY KIND LY BE DELETED. 2.0 THE ID CIT(A) - 2, RAJKOT ERRED ON FACTS AS ALSO IN LAW IN CONFIRMING THE ADDITION OF 5,66,175/ - MADE BY THE AO U/S. 68 OF THE ACT ON ACCOUNT OF ALLEGED BOGUS SUNDRY CREDITORS. THE ADDITION IS TOTALLY UNJUSTIFIED ON FACTS AS ALSO IN LAW AND M AY KINDLY BE DELETED . 3 . BRIEFLY STATED FACTS AS CULLED OUT FROM THE RECORDS ARE THAT ASSESSEE IS A PARTNERSHIP FIRM ENGAGED IN THE BUSINESS AS CONTRACTOR, BUILDER AND DEVELOPER. RETURN OF INCOME DECLARING TOTAL LOSS OF RS.31,511/ - WAS FILED ON 31/03/2008. ASSESSMENT ORDER U/S.144 OF THE INCOME TAX A CT WAS PASSED ON 16/11/2009 DETERMINING TOTAL INCOME AT RS.58,62,650/ - AFTER MAKING ADDITION IN RESPECT OF UNEXPLAINED CAPITAL AT RS.6,07,023/ - AND UNEXPLAINED SUNDRY CREDITORS AT RS.52,55,631/ - 3. ASSESSEE LOST IN APPEAL BEFORE LD.CIT(A) VIDE ITS ORDER DATED 08/04/2010. HOWEVER, IN APPEAL BEFORE TRIBUNAL , ALL THE ISSUES WERE SET ASIDE TO THE FILE OF LD.ASSESSING OFFICER ( IN SHORT LD.AO) FOR DECIDING AFRESH VIDE ITA NO.949/RJT/2010 DATED 26/08/20 10. 4. IN THE SECOND GROUND OF ASSESSMENT ON THE DIRECTION OF TRIBUNAL , LD.AO CALLED FOR DETAILS OF SUNDRY CREDITORS AND UNSECURED LOAN OF RS.5,66,175/ - AND RS.4,69,145/ - HOWEVER ASSESSEE WAS UNABLE TO FURNISH ANY DETAILS TO PROVE THE IDENTITY, GENUINENES S AND CREDIT WORTHINESS OF THE ALLEGED SUNDRY CREDITORS . IN THE RESULT LD.AO MADE ADDITION OF RS.10,35,320/ - AND ASSESSED THE INCOME AT RS.10,03,810/ - ITA NO.47/RJT/2016 A.Y.2007 - 08 5. IN SECOND ROUND OF APPEAL BEFORE LD.CI T( A ) , ASSESSEE S APPEAL WAS DISMISSED AS HE WAS UNABLE TO SUBST ANTIATE IT S CONTENTIONS OF PROVING THE IDENTITY, GENUINENESS AND CREDITWORTHINESS OF THE ALLEGED CASH CREDITORS. ADDITION U/S.68 OF THE INCOME TAX ACT, 1961 (HEREIN AFTER REFERRED TO AS THE ACT ) MADE BY LD.AO FOR UNEXPLAINED CREDITORS AND UNSECURED LO AN TOTALING TO RS.10,35,320/ - WAS UPHELD. 6. AGGRIEVED ASSESSEE IS NOW IN THE APPEAL BEFORE THE TRIBUNAL. LD.COUNSEL FOR THE ASSESSEE AT THE OUTSET CONCEDED TO THE FACT THAT ASSESSEE HAS NO EVIDENCE TO PROVE THE IDENTITY, GENUINENESS AND CREDITWORTHINESS OF THE ALLEGED UNSECURED LOANS FROM 25 PARTIES TOTALING TO RS.4,69,145/ - AND ALLEGED SUNDRY CREDITORS OF RS.5,66,175/ - 7 . ON THE OTHER HAND LEARNED DEPARTMENTAL REPRESENTATIVE (IN SHORT LD.DR) SUPPORTED THE ORDER OF LOWER AUTHORITIES. 8 . WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORDS PLACED BEFORE US. ASSESSE HAS FILED T HIS APPEAL RAISING FOUR GROUNDS COVERING TWO ISSUES ON ACCOUNT OF ADDITION U/S.68 OF THE ACT FOR UNEXPLAINED UNSECURED LOANS OF RS. 4,69,145/ - AND UNEXPLAINED SUNDRY CREDITORS OF RS.5,66,175/ - WHICH HAVE HELD TO BE BOGUS BY L D.CIT(A) CONFIRMING THE ACTION OF LD.AO. WE OBSERVE THAT ASSES SEE IS IN APPEAL BEFORE US IN SECOND ROUND. IN ROUND ONE TRIBUNAL HAD SET ASIDE ALL THE ISSUES RAISED BY ASSESSEE TO FILE OF LD.AO FOR FRAMING FRESH ASSESSMENT ORDER VIDE ITS ORDER DATED 26/08/2010 IN ITA NO.949/RJT/2010 . D URING THE COURSE OF ASSESSMENT PROCEEDING U/S.143(3) R.W.S 254 OF THE ACT A SSESSEE WAS ASKED TO PROVE THE IDENTITY, GENUINENESS AND CREDITWORTHINESS OF UNSECURED LOANS OF RS.4,69,145/ - AND SUNDRY CREDITORS OF RS.5,66,175/ - HOWEVER, ASSESEE WAS UNABLE TO FILE ANY DOCUMENTS AND DETAILS TO PROVE THE ITA NO.47/RJT/2016 A.Y.2007 - 08 IDENTITY AND GENUINENESS OF THE ALLEGED CASH CREDITORS BEFORE LD.AO AND EVEN BEFORE LD.CIT(A) . 9 . NOW IN APPEAL BEFORE TRIBUNAL ALSO , LD.COUNSEL HAS CONCED ED TO THE FACT THAT ALLEGED UNSE C U RED LOAN OF RS.4,69,145/ - AND ALLEGED SUNDRY CREDITORS OF RS.5,66 ,175 / - ARE BOGUS AND THERE ARE NO DETAILS AND DOCUMENTS WITH THE ASSESSEE TO PROVE THE IDENTITY, GENUINENESS AND CREDITWORTHINESS OF THE TOTAL CASH CREDITORS OF RS.10,35,320/ - (469145 + 566175) . WE ARE THEREFORE, OF THE VIEW THAT IN THE CIRCUMSTANCES OF THE CASE THAT, AS ASSESSEE FAILED TO PROVE THE IDENTITY, GENUINENESS AND CREDITWORTHINESS OF THE CASH CREDITORS , WE FIND NO REASON TO INTERFERE IN T HE ORDER OF LD.CIT(A) CONFIRMING THE ADDITION OF RS.10,35,320/ - U/S.68 OF THE ACT. 10 . IN THE RESULT, APPEAL OF ASSESSEE IS DISMISS ED . O RDER PRONOUNCED IN THE COURT ON 20 TH APRIL , 2017 AT AHMEDABAD. SD/ - SD/ - ( MAHAVIR PRASAD ) JUDICIAL MEMBER (MANISH BORA D ) ACCOUNTANT MEMBER TRUE COPY A HMEDABAD; DATED 20 / 04 /2017 MANISH / COPY OF THE ORDER FORWARDED TO : / BY ORDER, / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. ( ) / THE CIT(A) 5. , / DR, ITAT, 6. / GUARD FILE .