Bhushan Uttamrao Bachhav, Nashik V. Income-tax Officer,

ITA 503/PUN/2015

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 9518 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 8 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-01-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 17-10-2017
• Assessment Year: 2010-2011
• Appeal Filed On: 20-04-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: DR VIVEK AGGARWAL
• Keywords: Unexplained cash credit; Opportunity of being heard; Principle of natural justice
• Section: 194C; 131; 68; 27

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE . , , BEFORE SHRI D.KARUNAKARA RAO, AM AND SHRI VIKAS AWASTHY, JM . / ITA NO.503/PUN/2015 / ASSESSMENT YEAR : 2010-11 BHUSHAN UTTAMRAO BACHHAV, S.NO.33/1, PLOT NO.8, SWAPNAPURINAGAR, SATANA ROAD, SOYGOAN, MALEGAON, DIST. NASHIK 423 203 PAN : AMEPB8691A . /APPELLANT VS. ITO, WARD-3(3), MALEGAON . / RESPONDENT / APPELLANT BY : SHRI PRAMOD SHINGTE / RESPONDENT BY : DR. VIVEK AGGARWAL, CIT-DR / DATE OF HEARING : 03.01.2018 / DATE OF PRONOUNCEMENT: 10.01.2018 / ORDER PER D. KARUNAKARA RAO, AM : THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE ORDER OF C IT(A)-1, NASHIK DATED 19-02-2015 FOR THE ASSESSMENT YEAR 2010-11. 2. GROUNDS RAISED BY THE ASSESSEE READ AS UNDER : 1. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED C . I.T.[A] HAS GROSSLY ERRED IN CONFIRMING THE ADDITIO N OF RS.1,80,00,000.00 MADE BY THE LEARNED ASSESSING OFF ICER U/S. 68 OF THE I . T. ACT 1961. THE IMPUGNED ADDITION BEING PATENTLY I LLEGAL, ARBITRARY, PERVERSE AND DEVOID OF MERITS AND BEING LEGALLY UNS USTAINABLE THE SAME MAY PLEASE BE DELETED. 2. THE VARIOUS REASONS GIVEN BY THE LEARNED C.I.T.[ A] FOR CONFIRMING THE IMPUGNED ADDITION OF RS.1 ,80,00,000.00 BEING L EGALLY UNSUSTAINABLE, ARBITRARY, PERVERSE AND DEVOID OF MERITS THE SAME M AY PLEASE BE DELETED AND THE IMPUGNED ADDITION BE DELETED . 3. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW, THE LEARNED ASSESSING OFFICER AND THE LEARNED C . I.T . [A] BOTH, HAVE FAILED TO APPRECIATE THAT THE APPELLANT HAS RECEIVED AN AMOUNT OF RS.1,8 0,00,000 . 00 FROM ITS ITA NO.503/PUN/2015 BHUSHAN UTTAMRAO BACHAV 2 VARIOUS CUSTOMERS AS ADVANCE FOR SALE OF SAND TO TH EM AND HENCE THE SAID ADVANCES WERE OUTSIDE THE SCOPE AND PURVIEW OF THE PROVISIONS OF SECTION 68 OF THE I. T. ACT 1961 AND THEREFORE THE IMPUGNED ADDITION MAY PLEASE BE DELETED. 4. THE IMPUGNED ADDITION OF RS . 1,80,00,000.00 MADE U/S. 68 OF THE I . T . ACT 1961 BEING MADE BY BOTH THE LOWER AUTHORITIES IN VIOLATION OF PRINCIPLES OF NATURAL JUSTICE THE SAME IS BAD IN LA W AND VOID AB INITIO AND HENCE THE SAME MAY PLEASE BE DELETED . 5. WITHOUT PREJUDICE TO ABOVE GROUNDS OF APPEAL AND BY WAY OF AN ALTERNATE SUBMISSION IN THE MATTER, THE APPELLANT S UBMITS THAT THE IMPUGNED ORDER MAY PLEASE BE SET ASIDE AND THE MATT ER MAY PLEASE BE RESTORED TO THE FILE OF THE LEARNED ASSESSING OFFIC ER WITH A DIRECTION TO REFRAME THE ASSESSMENT AFTER GIVING PROPER, DUE AND REASONABLE OPPORTUNITY OF BEING HEARD TO THE APPELLANT . 3. THE ABOVE GROUNDS REVOLVE AROUND THE ADDITION OF RS.1 .80 CRORES MADE BY THE AO U/S.68 OF THE ACT. THE ASSESSEE IS AN IN DIVIDUAL AND IS A SAND CONTRACTOR IN THIS YEAR. HE EXECUTED CIVIL CONTRA CTS IN THE PAST. THE SAND CONTRACT IS THE NEW ONE FOR THE YEAR UNDER C ONSIDERATION. OTHERWISE, ASSESSEE FILED THE RETURN OF INCOME IN THE PAST AND INVOKING THE PROVISIONS OF SECTION 44AD, I.E. TOTAL INCOME WAS ESTIMAT ED APPLYING RATE OF 8% ON THE SAID CIVIL CONTRACT RECEIPTS. IN THE C URRENT YEAR, ASSESSEE APPLIED FOR THE CONTRACT OF SAND EXCAVATION AN D THE FOLLOWING ARE THE CHRONOLOGY OF EVENTS WITH REGARD TO THE SAID CO NTRACT INVOLVING PAYMENT OF RS.1.80 CRORES BY THE ASSESSEE FOR GETTING THE SAID CONTR ACT : SR. NO. PARTICULARS DATES PAGE NOS. OF THE PAPER BOOK 1 AUCTION ADVERTISEMENTS 17-12-2009 213 2 DECLARATION OF BIDDING DATE 22-12-2009 229 3 DATE OF BIDDING AND ALLOTMENT 02-01-2010 229 4 PAYMENT OF 25% AMOUNT 05-01-2010 228 5 PAYMENT OF BALANCE 75% AMOUNT 08-01-2010 227 6 WORK ORDER 12-01-2010 213 7 SAND EXTRACTION ALLOWED UPTO 31-07-2010 213 8 ADVANCE MONEY DEPOSITED BY 45 PARTIES BETWEEN 18-12-2009 TO 06-01-2010 4. FURTHER ON THE SOURCE OF RS.1.80 CRORES, IT IS UNDISPU TED FACT THAT THE ASSESSEE RAISED THE SAID AMOUNT OF RS.1.80 CRORES FRO M VARIOUS ITA NO.503/PUN/2015 BHUSHAN UTTAMRAO BACHAV 3 INDIVIDUALS @RS.4 LAKHS PER INDIVIDUAL. THE DETAILS ARE EXTRACT ED HERE ASUNDER : SUNDRY CREDITORS GROUP SUMMARY 01-04-2009 TO 31-03-2010 TRANSACTIONS PARTICULARS OPENING BALANCE DEBIT CREDIT CLOSING BALANCE AMOL U. SAWANT -- -- 4,00,000.00 -- ANIL S. BAC C HAV -- -- 4,00,000.00 -- ARUN K. BACCHAV -- -- 4,00,000.00 - - BHAGWAN N. GAYKWAD -- -- 4,00,000.00 -- BHUSHAN B. BACCHAV -- -- 4,00,000.00 -- CHANDULAL D. PATIL -- -- 4,00,000.00 -- CHETAN S. NIKAM -- -- 4,00,000.00 -- DINESH Z. JADHAV -- -- 4,00,000.00 -- DYANESHWAR D. PATIL -- -- 4,00,000.00 -- GOPAL S. SO NAWANE -- -- 4,00,000.00 -- JANARADAN G. KHAIRNAR -- -- 4,00,000.00 -- JITENDRA D. HAHIRAY -- -- 4,00,000.00 -- JITENDRA N. BAMBARE -- -- 4,00,000.00 -- KIRAN K. PANDIT -- -- 4,00,000.00 -- MADHUKAR R. BACCHAV -- -- 4,00,000.00 -- NITIN R. CHAUDHARY -- -- 4,00,000.00 -- PRAHALAD K. NIKAM -- -- 4,00,000.00 -- PRAKASH D. BACCHAV -- -- 4,00,000.00 -- PRAKASH N. KHAIRNAR -- -- 4,00,000.00 -- PRASHANT B.PAWAR -- -- 4,00,000.00 -- PRASHANT S. SONAWANE -- -- 4,00,000.00 -- PRASHANT T. JAGTAP -- -- 4,00 ,000.00 -- PRAVIN A. BHAMRE -- -- 4,00,000.00 -- PRAVIN D. SALUNKE -- -- 4,00,000.00 -- PYARALAL B. SHELAR -- -- 4,00,000.00 -- RAHUL J. PAWAR -- -- 4,00,000.00 -- RAJENDRA B. SURYAWANSHI -- -- 4,00,000.00 -- RAJENDRA P. SALUNKE -- -- 4,00,000.00 -- RAJESH ALIZAD -- -- 2,00,000.00 -- RAVINDRA B. SURYAWANSHI -- -- 4,00,000.00 -- RAVINDRA K. BACCHAV -- -- 4,00,000.00 -- RAVINDRA P. SURYAWANSHI -- -- 4,00,000.00 -- RAVI R. WAGH -- -- 4,00,000.00 -- SAHEBRAO M. MANDALE -- -- 4,00,000.00 -- SANDIP V . THAKARE -- -- 4,00,000.00 -- SARJERAO D. JADHAV -- -- 4,00,000.00 -- SHEKHAR RAGUNATH BAGUL -- -- 4,00,000.00 -- SHIRISH K. PATIL -- -- 4,00,000.00 -- SHIVDAS D. HIRAY -- -- 4,00,000.00 -- UDHAY N. MAHAL E -- -- 4,00,000.00 -- UJJWAL AUTOMOBILES -- -- 4,45,810.00 -- VINOD N. WAGH -- -- 4,00,000.00 -- VISHAL K. BHED -- -- 4,00,000.00 -- YOGESH C. BACCHAV -- -- 4,00,000.00 -- YOGESH N. PAWAR -- -- 4,00,000.00 -- YOGESH R. PATIL -- -- 4,00,000.00 -- YOGESH S. BACCHAV -- -- 4,00,000.00 -- GRAND TOTAL -- -- 1,86,45,810.00 -- ITA NO.503/PUN/2015 BHUSHAN UTTAMRAO BACHAV 4 5. THUS, IT IS THE CLAIM OF THE ASSESSEE THAT THE ABOVE RECEIPTS CONSTITUTES THE SOURCE OF INVESTMENT FOR THE ASSESSEE AND THE SAM E WAS REMITTED TO THE GOVERNMENT BY 08-01-2010. HOWEVER, DU RING THE ASSESSMENT PROCEEDINGS, THE AO NOTED THAT THE SAID AMO UNTS WERE RECEIVED BY THE ASSESSEE IN CASH IN ALL. FURTHER, ON EXA MINATION OF THE CONTRIBUTION OF EACH INDIVIDUAL PAYEE, AO NOTICED THAT THE S AID SUM OF RS.4 LAKHS EACH IS THE AGGREGATION OF MINOR CASH TRANSAC TION OF RS.20,000/- EACH OVER THE PERIOD OF MERE 20 DAYS OR SO . CONSIDERING THE ABOVE, AO CALLED FOR AN EXPLANATION OF THE ASSESSEE RE GARDING THE CONDITIONS OF IDENTITY, CREDIT WORTHINESS, GENUINENESS OF THE TRANSACTIONS AND DISCHARGE THE ONUS OF ASSESSEE ON THE SAID CONDITIONS SPECIFIED IN SECTION 68 OF THE ACT. 6. IN RESPONSE, THE ASSESSEE SUBMITTED CONFIRMATION LETTE RS IN MOST OF THE CASES AND ALSO THE AFFIDAVITS IN ALL CASES CONFIRMING T HE SAID PAYMENT OF RS.4 LAKH EACH IN CASH TO THE ASSESSEE. LACK OF CREDIT WORTHINESS AND GENUINENESS OF THE TRANSACTIONS ETC. WER E SCRUPULOUSLY EXAMINED BY THE AO. UNSATISFIED WITH THE EXPLANATION OF THE ASSESSEE, AO ISSUED SUMMONS TO ALL THE 45 PAYEES. OUT OF THIS, ONL Y 18 PERSONS MADE APPEARANCE BEFORE THE AO AND OF COURSE, CONFIRMED T HE BASIC TRANSACTION OF PAYMENT OF RS.4 LAKHS IN CASH. HOWEVER, THE Y COULD NOT CONFIRM THE EXTENT OF PAYMENT AND THERE ARE NO CONFIRMAT ION ABOUT THE CASH TRANSACTIONS OF RS.20,000/- EACH TRANSACTION. ON FIND ING IN MOST OF THE CASES, SOURCES OF THE INCOME IS AGRICULTURE AND THE DOCUMENTS OF 7/12 EXTRACTS IS THE ONLY EVIDENCE IN RESPECT OF THE SA ID 27 PERSONS OUT OF 45 PAYEES. AO FOUND DISCREPANCIES IN THE REPLY GIVEN BY THE PAYEES IN THE PROCEEDINGS U/S.131 OF THE ACT. CONSIDERING THE DI SCREPANCIES FOUND IN THE STATEMENTS GIVEN BY THE PAYEES, AO TOOK AD VERSE INFERENCE AGAINST THE ASSESSEE AND PROCEEDED TO MAKE ADDITION OF RS.1.80 CRORES ITA NO.503/PUN/2015 BHUSHAN UTTAMRAO BACHAV 5 U/S.68 OF THE ACT. FURTHER, AO INFERRED THAT CONFIRMATION S AND AFFIDAVITS ARE STEREOTYPED AND SELF-SERVING. ADMITTEDLY, TH E PAYEES ARE NOT ASSESSED TO INCOME-TAX. RELEVANT OPERATIONAL PARA O F THE AO IS EXTRACTED HERE ASUNDER : 4.7 THUS, THE SOURCE OF CASH ADVANCES OF RS.1,80,0 0,000/- IN THE NAME OF 45 PERSONS IS NOT ESTABLISHED. AS ALREADY DISCUSSED ABOVE THE ASSESSEE HAS FABRICATED AND MANIPULATED ITS ACCOUNT S AND HAS SHOWN THAT, HE HAS RECEIVED RS.20,000/- CASH PER DAY FROM ALL THESE 45 PERSONS WITHIN THE PERIOD OF 20 DAY. THUS, THE GENUINENESS OF THIS TRANSACTION IS ALSO NOT ESTABLISHED. THE ONUS LIES ON THE ASSESSE E TO ESTABLISH THE CREDIT WORTHINESS OF PERSONS FROM WHOM THE LOANS/AD VANCES TAKEN BY HIM AND TO PROVE THE GENUINENESS OF TRANSACTIONS. HOWEVER, THE ASSESSEE HAS NOT ESTABLISHED WITH ANY EVIDENCE THE GENUINENESS OF TRANSACTIONS AND CREDIT WORTHINESS OF CREDITORS. I T APPEARS THAT THE ASSESSEE HAS INTRODUCED HIS OWN UNACCOUNTED FUNDS I N THE NAMES OF 45 DIFFERENT PERSONS FOR GETTING SAND CONTRACT. . . . . . . . . . . . . . . . . . . . . . . . . . . 6. THEREFORE, THIS AMOUNT OF RS.1,80,00,000/- IS TR EATED AS UNEXPLAINED CASH CREDIT U/S.68 OF THE INCOME TAX AC T, 1961 AND ADDED TO THE TOTAL INCOME. THE ASSESSEE HAS FURNISHED IN ACCURATE PARTICULARS AND THUS CONCEALED HIS INCOME AND THEREFORE, I AM S ATISFIED THAT PENALTY U/S.271(1)(C) IS LEVIABLE. ACCORDINGLY, PENALTY U/ S.271(1)(C) IS INITIATED. 7. AO RELIED ON THE FOLLOWING DECISIONS : 1. PRAKASH TEXTILE AGENCY VS. CIT 121 ITR 890 CAL CUTTA HIGH COURT 2. PREMNATH GOYAL & CO. VS. CIT 271 ITR 390 DELHI HIGH COURT 3. CIT VS. AJAY KUMAR 259 ITR 240 RAJASTHAN HIGH COURT 4. CIT VS. HEERALAL 257 ITR 261 RAJASTHAN HIGH CO URT 5. SHRI SOHAN VS. CIT 256 ITR 659 PUNJAB & HARYAN A HIGH COURT 6. ROOPCHAND VS. CIT 235 ITR 461 GUWAHATI HIGH COUR T 7. RAJSHREE VS. CIT 256 ITR 331 RAJASTHAN HIGH CO URT 8. THUS, THE AO TOOK ADVERSE INFERENCE ABOUT THE CREDIT WORTHINESS OF THE PAYEES AND THE GENUINENESS OF THE TRANSACTION. F URTHER, AO HELD THAT THE ASSESSEE INTRODUCED HIS OWN FUNDS IN THE NAME OF 45 DIFFERENT PERSONS FOR RAISING THE SAID AMOUNT OF RS.1.80 CRORES IN A SHORT TIME OF 20 DAYS FOR MEETING THE DEADLINE/REQUIREMENT OF MAKING THE PAYMENTS TO THE GOVERNMENT FOR GETTING THE SAND CONTRACT. IT IS ALSO A FACT THAT THESE 45 PERSONS WERE THE BENEFICIARIES OF THE SAID CONTR ACT. TO THAT ITA NO.503/PUN/2015 BHUSHAN UTTAMRAO BACHAV 6 EXTENT, THE CASH TRANSACTIONS ARE NOT TO BE CONSIDERED AT ARMS LENGTH AND INDEPENDENT ONES. 9. DURING THE FIRST APPELLATE PROCEEDINGS, ASSESSEE COULD N OT IMPROVE HIS CASE. CIT(A) DECIDED THE ISSUE AGAINST THE ASS ESSEE AS PER THE DISCUSSION GIVEN IN PARA NOS. 6 TO 11. IN THE SAID P ARAGRAPHS, CIT(A) HIGHLIGHTED (1) THE URGENCY OF RAISING THE CAPITAL OF RS.1 .80 CRORES IN SHORT TIME AND (2) CONSIDERED ONLY 27 PERSONS MAKING APPEARANCE TO THE AOS OFFICE IN RESPONSE TO THE NOTICE U/S.131 OF THE A CT. CIT(A) ALSO DISCUSSED THE FAILURE OF THE PAYEES TO CONFIRM THE EXACT A MOUNTS AND THE DENIAL OF MAKING THE PAYMENT IN CASH OF RS.20,000/- PER DAY FROM 18-12-2009 TO 06-01-2010, OWNERSHIP OF THE LOANS SO RELI ED UPON BY THE PAYEES AS THE SOURCE OF INCOME OF THEIR HUFS WAS A LSO DISCUSSED. IN PARA NO.7 OF HIS ORDER, THE CIT(A) DISCUSSED THE FACT OF CALLING FOR A DETAILED REPORT BY THE AO BY SENDING THE INCOME-TAX INSP ECTOR FOR CROSS VERIFICATION AND HIS ADVERSE REPORT WAS ALSO RELIED. ACCORD ING TO THEM, MOST OF THE PAYEES ARE FOUND TO BE THE AGRICULTURISTS WIT H NO MEANS OF FUNDING RS.4 LAKHS IN SHORT PERIOD OF 20 DAYS. ACCORDINGLY TO CIT(A), THEY LACK THE FINANCIAL CAPACITY TO FUND THE SUM OF RS.4 LAKH S IN 20 DAYS. REMAND REPORTS WERE SUPPLIED TO THE ASSESSEE AN D CONSIDERED THE COUNTER SUBMISSIONS MADE BY THE ASSESSEE. CIT(A) ALS O DISCUSSED THE SELF-SERVING NATURE OF THE AFFIDAVITS IN PARA NO.9 AND D ISCUSSED THE ASSESSEES FAILURE TO FURNISH FURTHER EVIDENCES IF ANY IN SUP PORT OF THE CREDIT WORTHINESS OF THE 45 PAYEES. CIT(A) ANALYSED ONE OF THE PAYEES BY NAME SHRI ANIL S. BACCHAV AND INSERTED THE SCANNED LED GER EXTRACT INVOLVING HIM AT PAGE 21 OF HIS ORDER. THIS IS THE CASE WHE RE RS.20,000/- PER DAY WAS CLAIMED TO HAVE BEEN RECEIVED BY THE ASSESSEE DURING THE PERIOD 18-12-2009 TO 06-01-2010. FOR THE S AKE OF COMPLETENESS, WE PROCEED TO EXTRACT THE SAME HERE ASUNDER : ITA NO.503/PUN/2015 BHUSHAN UTTAMRAO BACHAV 7 ANIL S. BACCHAV 18-12-2009 DR. CASH ADV. REC. RECEIPT 9 20,000.00 19-12-2009 DR. CASH ADV. REC. RECEIPT 40 20,000.00 20-12-2009 DR. CASH ADV. REC. RECEIPT 71 20,000.00 21-12-2009 DR. CASH ADV. REC. RECEIPT 102 20,000.00 22-12-2009 DR. CASH ADV. REC. RECEIPT 133 20,000.00 23-12-2009 DR. CASH ADV. REC. RECEIPT 164 20,000.00 24-12-2009 DR. CASH ADV. REC. RECEIPT 195 20,000.00 25-12-2009 DR. CASH ADV. REC. RECEIPT 226 20,000.00 26-12-2009 DR. CASH ADV. REC. RECEIPT 257 20,000.00 27-12-2009 DR. CASH ADV. REC. RECEIPT 288 20,000.00 28-12-2009 DR. CASH ADV. REC. RECEIPT 319 20,000.00 29-12-2009 DR. CASH ADV. REC. RECEIPT 350 20,000.00 30-12-2009 DR. CASH ADV. REC. RECEIPT 381 20,000.00 31-12-2009 DR. CASH ADV. REC. RECEIPT 412 20,000.00 01-01-2010 DR. CASH ADV. REC. RECEIPT 443 20,000.00 02-01-2010 DR. CASH ADV. REC. RECEIPT 474 20,000.00 03-01-2010 DR. CASH ADV. REC. RECEIPT 505 20,000.00 04-01-2010 DR. CASH ADV. REC. RECEIPT 536 20,000.00 05-01-2010 DR. CASH ADV. REC. RECEIPT 567 20,000.00 06-01-2010 DR. CASH ADV. REC. RECEIPT 598 20,000.00 10. EVENTUALLY, THE CIT(A) CONFIRMED THE ADDITION OF RS.1.80 CR ORES AS PER THE DISCUSSION GIVEN IN PARA NO.11 OF HIS ORDER AND TH E SAME READS AS UNDER : 11. A PERUSAL OF THE FACTS CLEARLY REVEALS THAT THE APP ELLANT HAD MANIPULATED THE AVAILABILITY OF CASH OF RS. 1,80,00 ,000/- THAT HE WAS REQUIRED TO DEPOSIT WITH THE COLLECTOR'S OFFICE, NA SHIK TO OBTAIN THE SAND MINING CONTRACT. IT IS NOT A SHEER COINCIDENCE THAT EACH OF THE 45 PERSONS HAS DEPOSITED RS. 20,000/- IN CASH DAILY FROM 18/12 /2009 TO 06/01/2010. NO AGRICULTURIST WOULD HAVE AVAILABILIT Y OF CASH IN SUCH A FASHION. I HAVE GONE THROUGH THE STATEMENTS OF SOME OF THE 27 PERSONS RECORDED BY THE AO U/S 131 OF THE ACT. PRIMA FACIE I FIND THAT NONE OF THE PERSONS COULD CONVINCINGLY ANSWER ABOUT THE SOURCE OF THE CASH ADVANCES ALLEGED TO HAVE BEEN GIVEN TO THE APPELLAN T. FURTHER, THEY ALSO ITA NO.503/PUN/2015 BHUSHAN UTTAMRAO BACHAV 8 DID NOT REMEMBER THE EXACT AMOUNT WHICH WAS GIVEN T O THE APPELLANT ON VARIOUS DATES. NO DOCUMENTARY EVIDENCES IN THE FORM OF CASH RECEIPTS FROM THE APPELLANT IN RESPECT OF THE ALLEGED CASH A DVANCES WERE PRODUCED BY THEM. IN FACT, SHRI SHEKHAR RAGHUNATH BAGUL AND SHRI RAJENDRA P. SALUNKHE STATED THAT THEY DID NOT GIVE RS. 20,000/- TO THE APPELLANT CONTINUOUSLY. IT MAY BE RECALLED THAT THE APPELLANT HAS SHOWN TO HAVE RECEIVED RS. 20,000/- IN CASH FROM EACH OF THE 45 P ERSONS DAILY FROM 18/12/2009 TO 06/01/2010. AFTER GOING THROUGH THE M ATERIAL AVAILABLE ON RECORD, I AM OF THE OPINION THAT THE APPELLANT H AS INTRODUCED HIS OWN FUNDS IN THE FORM OF CASH IN THE NAME OF 45 PERSONS TO ARRANGE THE AVAILABILITY OF CASH OF RS. 1,80,00,000/- WITH HIM TO MAKE ONWARD PAYMENT TO DISTRICT COLLECTOR'S OFFICE, NASHIK FOR OBTAINING THE SAND MINING CONTRACT. DURING THE COURSE OF ASSESSMENT AS WELL AS REMAND PROCEEDINGS, NONE OF THE PERSONS COULD PRODUCE ANY SINGLE DOCUMENT TO SUPPORT PURCHASE OF SAND FROM THE APPELLANT. SIMILAR LY, NOT A SINGLE DOCUMENTARY EVIDENCE WAS PRODUCED BY ANY OF THE 45 PERSONS IN SUPPORT OF SUBSEQUENT SALE OF SAND WHICH THEY HAD STATED TO HAVE PURCHASED FROM THE APPELLANT. SIMILARLY, NONE OF THE 45 PERSO NS COULD PRODUCE ANY SINGLE DOCUMENTARY EVIDENCE TO EXPLAIN THE AVAILABI LITY OF CASH WITH THEM. NO RECEIPTS FOR SALE OF AGRICULTURAL PRODUCE WERE PRODUCED BY ANY OF THE AGRICULTURISTS WHO CLAIMED TO HAVE GIVEN CAS H OUT OF THE SALE PROCEEDS OF THEIR AGRICULTURAL PRODUCE. THE APPELLA NT HAS ALSO FAILED TO PRODUCE SALE BILLS FOR THE ALLEGED SALE OF SAND TO THE ABOVE REFERRED 45 PERSONS. HE HAS ALSO FAILED TO FURNISH ANY QUANTITA TIVE DETAILS OF EXTRACTION OF SAND AND SUBSEQUENT SALE OF SAND TO T HE ABOVE REFERRED 45 PERSONS. IN THE FACTS AND THE CIRCUMSTANCES OF THE CASE, I AM OF THE CONSIDERED OPINION THAT THE APPELLANT HAS TRIED TO CIRCUMVENT THE PROVISIONS OF THE I.T. ACT, 1961 BY KEEPING CASH DE POSITS FROM EACH PERSON AT RS.20,000/- PER DAY. THE APPELLANT HAS CO NCOCTED THE DOCUMENTS TO PROVE THE TRANSACTIONS AS GENUINE. IN VIEW OF THE ABOVE, I AM OF THE CONSIDERED OPINION THAT THE APPELLANT HAS FAILED TO PROVE THE GENUINENESS OF THE TRANSACTION OF SALE OF SAND TO T HE ABOVE REFERRED 45 PERSONS FROM WHOM HE HAS ALLEGEDLY RECEIVED CASH AD VANCES FOR SALE OF SAND. THE APPELLANT'S CONTENTION THAT CASH ADVANCES WERE RECEIVED AGAINST SALE OF SAND IS DEVOID OF MERIT AND HENCE N OT ACCEPTABLE. IN VIEW OF THE ABOVE THE APPELLANT'S CONTENTION THAT AO WAS NOT JUSTIFIED IN INVOKING THE PROVISIONS OF SEC. 68 OF THE ACT IS AL SO DISMISSED. APPELLANT'S RELIANCE ON VARIOUS CASE LAWS IN THIS REGARD IS MIS PLACED AS THE NATURE OF CASH ADVANCES, ALLEGED TO HAVE BEEN RECEIVED AGAINS T SALE OF SAND, IS FOUND TO BE THAT OF CASH CREDITS. IT IS A CLEAR CAS E OF INTRODUCTION OF UNEXPLAINED CASH. THESE 45 PERSONS HAVE TRIED TO AC COMMODATE THE APPELLANT IN EXPLAINING THE SOURCE OF RS.1,80,00,00 0/- IN HIS HANDS BY FURNISHING FICTITIOUS AFFIDAVITS. WHILE THE IDENTIT IES OF THESE PERSONS MAY HAVE BEEN PROVED, THEIR CREDITWORTHINESS AND GENUIN ENESS OF THE TRANSACTIONS ARE CLEARLY FOUND TO BE BOGUS. IN VIEW OF THE ABOVE, I AM OF THE OPINION THAT AO WAS JUSTIFIED IN MAKING THE ADDI TION OF RS. 1,80,00,000/- IN THE HANDS OF THE APPELLANT U/S 68 OF THE ACT. THE SAME IS HEREBY CONFIRMED. 11. AGGRIEVED WITH THE ABOVE ORDER OF CIT(A) THE ASSESSE E FILED THE PRESENT APPEAL WITH THE GROUND REFERRED ABOVE. 12. BEFORE US, LD. COUNSEL FOR THE ASSESSEE NARRATED THE ABOVE DEVELOPMENTS LED TO THE ADDITION OF RS.1.80 CRORES AND CO NFIRMATION OF THE SAME BY THE CIT(A). IT IS THE CASE OF THE LD. COUNS EL THAT ALL THE 45 ITA NO.503/PUN/2015 BHUSHAN UTTAMRAO BACHAV 9 PAYEES DULY CONFIRMED THE CASH PAYMENT OF RS.4 LAKHS EAC H TO THE ASSESSEE WHICH FORMED PART OF RS.1.80 CRORES. HE ALSO SUB MITTED THAT THE SAID AMOUNT WAS PAID TO THE GOVERNMENT ACCOUNT FOR GETTING THE SAND CONTRACT AFTER MAKING THE REQUISITE TDS. THEREFORE , AS PER THE LD. DR FOR THE REVENUE, THE IDENTITY OF THE INDIVIDUALS IS UNDOUBTED. REGARDING CREDIT WORTHINESS ALSO, ASSESSEE FURNISHED THE REQUISITE DETAILS ABOUT ALL THE PAYEES. THEREFORE, AS PER THE LD. AR FOR THE ASSESSEE, THE DECISION OF THE AO/CIT(A) AGAINST THE ASSESS EE IS REQUIRED TO BE REVERSED. REGARDING GENUINENESS OF THE TRANSACTION, NOT MUCH OF TH E ARGUMENTS WERE MADE BY THE ASSESSEES COUNSEL EXCEPT BY STATING THAT THESE ARE ALL GENUINE TRANSACTIONS AS EVIDENT FROM THE FINA L PAYMENT OF RS.1.80 CRORES TO THE GOVERNMENT ACCOUNT. 13. FURTHER, LD. AR FOR THE ASSESSEE RELIED ON THE ORDER OF THE TRIBUNAL IN THE CASE OF M/S. P.P. GOGAD VS. ACIT IN ITA NO.535/PUN/2015 ORDER DATED 14-06-2017 FOR A.Y. 2010-11 FOR THE PROPOSITION THAT THE ADDITION U/S.68 IS UNWARRANTED WHEN THE PAYMENTS ARE CONFIRMED BY THE SUB-CONTRACTORS IN THAT CASE. HE BROUGHT OUR ATTENTION TO THE FACT THAT THIS IS THE CASE WHERE PAYMENTS ARE MADE BY THE ASSESSEE TO THE 4 SUB-CONTRACTORS A FTER MAKING TDS AS PER THE PROVISIONS OF SECTION 194C OF THE ACT. THE TRIB UNAL REVERSED THE FINDING OF THE LOWER AUTHORITIES IN THAT CASE IN FAVOUR OF THE ASSESSEE. 14. PER CONTRA, LD. DR FOR THE REVENUE LISTED OUT THE ISSU ES WHICH LED TO THE BELIEF THAT THE PROVISIONS OF SECTION 68 ARE PROPER LY INVOKED IN THIS CASE. RAISING OF RS.1.80 CRORES IN A PERIOD OF 20 DAYS, RECEIVING OF THE SAID AMOUNTS ALL IN CASH FROM 45 PAYEES, EACH TRANSA CTION NOT EXCEEDED RS.20,000/- A DAY BY EACH PAYEE, THE EXPLANATIO N OF THE ITA NO.503/PUN/2015 BHUSHAN UTTAMRAO BACHAV 10 ASSESSEE FOR GETTING THE CONTRACT IN HIS NAME AND WORK OF EXTRACTION OF SAND BY ALL 45 PAYEES, NON-ASSESSABILITY OF THE SAID 45 PER SONS TO INCOME-TAX ETC. SUGGEST THAT IT IS A CASE OF LAUNDERING OF MONEY BY ASSESSEE INVOLVING ALL THE SAID 45 PAYEES. AS PER THE LD. DR FOR THE REVENUE, THIS KIND OF TRANSACTIONS CANNOT BE CONSIDERED A S GENUINE TRANSACTIONS MERELY BECAUSE THEY ARE OWNED BY THE SA ID PAYEES. THESE PAYEES SUFFER FROM LACK OF CREDIT WORTHINESS WHICH IS NOT FU LLY EVIDENCED BY THE ASSESSEE. FROM THIS POINT OF VIEW, ASSESSEE FAILED T O DISCHARGE THE ONUS ABOUT THE CREDIT WORTHINESS OF THESE PAYEES. HE ALSO SUBMITTED THAT THE LAW ALLOWS THE PAYMENTS TO ASSESSEE TO COMPOSITELY FULFIL ALL THE CONDITIONS SPECIFIED IN THE PROVISIONS OF SECTION 68 OF THE ACT. 15. WE HEARD BOTH THE PARTIES AND PERUSED THE ORDERS OF THE REVENUE. WE HAVE EXAMINED THE FACTS OF THIS CASE AND FOUND THERE IS NO DISPUTE ABOUT THE RECEIPT OF THE PAYMENT IN INSTALLMENTS OF RS.20,0 00/- EACH PER DAY FROM EACH PAYEE. THERE IS ALSO NO DISPUTE ABOU T THE CASH PAYMENTS. IT IS AN ADMITTED FACT THAT THE PAYEES ARE N EVER SUBJECT TO INCOME-TAX. IT IS ALSO A FACT THAT ALL THE PAYEES NEVER M ADE APPEARANCE BEFORE THE AO IN RESPONSE TO THE SUMMONS U/S.131 OF THE ACT. LEAST OF ALL, THESE PAYEES COULD HAVE DEMONSTRATED THE EXACT AMO UNT PAID BY THEM TO THE ASSESSEE AND THE MANNER OF PAYMENT OF RS.2 0,000/- PER DAY. THEY ARE IGNORANT ABOUT THE FACT RELATING TO PAYME NT OF CASH OF RS.20,000/- PER DAY INCLUDING THE WEEKENDS. THE 7/12 EX TRACTS FURNISHED BY THE ASSESSEE COULD NEVER DEMONSTRATE CONC LUSIVELY THAT THE LANDS BELONG TO THE INDIVIDUAL PAYEES AND THE INCOME IS ACTUALLY EARNED BY THEM WHICH FORMED THE SOURCE OF MAKING OF CASH PAYMENTS TO THE ASSESSEE. LEAVE ALONE THE BILLS EVIDENCING THE FACT O F CONDUCTING AGRICULTURAL OPERATIONS ON THE SAID LANDS, THE PAYEES HAS NO EVIDENCE TO ITA NO.503/PUN/2015 BHUSHAN UTTAMRAO BACHAV 11 SHOW THE FACT OF EARNING THE AGRICULTURAL INCOME BY WAY O F THE SALE BILLS FOR EARNING OF THE AGRICULTURAL INCOME. WE ALSO PERUSED THE SAID EXTRACTED PORTIONS OF THE ORDER OF THE AO AS WELL AS THE ORDER OF CIT(A) AND FIND THE REASONING GIVEN BY THEM IS ONE POSSIBLE VIEW. 16. ASSESSEE NEEDED A SUM OF RS.1.80 CRORES IN SHORT TIM E FOR OBTAINING THE SAND CONTRACT FROM THE GOVERNMENT. BASED ON THE PRINCIPLE OF PROBABILITY, WE FIND IT MOST LIKELY THAT THE ASSESS EE HAD TO USE THE NAMES OF THE 45 PAYEES FOR MOBILISING THE SAID AM OUNT. CREATION OF CASH BOOKS/RECORDS FOR ALL THE 45 PAYEES AND RECORDING THE EACH CASH TRANSACTIONS AT THE RATE OF RS.20,000/- PER D AY, NON EXCLUSION OF THE WEEKENDS AND SUNDAYS TOO COMMENTS THE HURRINESS OF THE ASSESSEE. IT IS UNDISPUTED FACT THAT THE PAYEES AR E NOT ASSESSED TO TAX AT THT TIME OR AT THE TIME OF ASSESSMENT OR NOW. I N OUR VIEW, THE ASSESSEE FAILED TO SHOW UP ALL THE PAYEES BEFORE THE AO. THEREFORE, WE CONFIRM THE CONCLUSIONS DRAWN BY THE AO/CIT(A) AT THE RELE VANT POINT OF TIME. IT IS THE SETTLED LAW RELATING TO PROVISION OF SECTION 68 OF THE ACT THAT THE ASSESSEE IS UNDER OBLIGATION TO DISCHARGE ALL TH E CONDITIONS SPECIFIED IN THE SAID SECTION CUMULATIVELY TO THE AO. AS S UCH, THE ENTRIES IN THE BOOKS OF ACCOUNT ARE NOT DETERMINATIVE. THEREFORE, WE FIND NO REASON TO REVERSE THE SAID FINDING OF THE AO/CIT(A). THEREFORE, WE ARE OF THE OPINION THAT THE GROUNDS RAISED BY THE AS SESSEE IN THIS CASE ARE REQUIRED TO BE DISMISSED. 17. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 10 TH DAY OF JANUARY, 2018. SD/- SD/- (VIKAS AWASTHY) (D. KARUNAKARA RAO) /JUDICIAL MEMBER / ACCOUNTANT MEMBER PUNE; DATED : 10 TH JANUARY, 2018 ITA NO.503/PUN/2015 BHUSHAN UTTAMRAO BACHAV 12 / COPY OF THE ORDER FORWARDED TO : / BY ORDER, //TRUE COPY// //TRUE COPY// SENIOR PRI VATE SECRETARY , / ITAT, PUNE 1. / THE APPELLANT 2. / THE RESPONDENT 3. THE CIT(A)-1, NASHIK 4. CIT-1, NASHIK 5. , , B BENCH PUNE; 6. / GUARD FILE.