M/s Maurya Spinning MIlls (P) Ltd., Ludhiana V. DCIT, Ludhiana

ITA 504/CHANDI/2014

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 6857 (ITAT-CHANDIGARH)
• Duration Of Justice: 3 year(s) 4 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-09-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 04-11-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 12-05-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: S K MUKHI
• Keywords: Unexplained cash credit; Bonafide belief; Additional evidence; Reasonable cause
• Section: 131

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, CHANDIGARH BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER AND MS.ANNAPURNA GUPTA, ACCOUNTANT MEMBER ITA NO.504/CHD/2014 (ASSESSMENT YEAR : 2006-07) M/S MAURYA SPINNING MILLS(P) LTD., VS. THE D.C.I.T., VILL & POST OFFICE RAMGARH, CIRCLE-III, CHANDIGARH ROAD, LUDHIANA. LUDHIANA. PAN: AABCM1390F (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI S.K. MUKHI RESPONDENT BY : SMT.CHANDER KANTA, DR DATE OF HEARING : 03.07.2017 DATE OF PRONOUNCEMENT : 21.09.2017 ORDER PER ANNAPURNA GUPTA, A.M. : THIS APPEAL HAS BEEN PREFERRED BY THE ASSESSEE AGAI NST THE ORDER OF LD. CIT(APPEALS)-II, LUDHIANA DATED 3. 1.2014 RELATING TO ASSESSMENT YEAR 2006-07. 2. AT THE OUTSET IT MAY BE MENTIONED THAT THE PRESE NT APPEAL WAS EARLIER DISMISSED FOR NON PROSECUTION VI DE ORDER DATED 11.1.2016. IN PURSUANCE TO A MISCELLANEOUS APPLICATION FILED BY THE ASSESSEE THE SAID APPEAL W AS RECALLED VIDE ORDER DATED 21.4.2017 IN M.A.NO.25/CHD/2016. IN PURSUANCE TO THE SAME, THE PRESENT APPEAL IS BEING HEARD BY US. 3. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS: 2 1. THAT THE LEARNED CIT(A)-III HAS ERRED IN CONFIRMING THE DISALLOWANCE OF THE FOLLOWING CASH CREDITS WITHOUT APPRECIATING THE FACTS OF THE CASE AND THE EVIDENCE FILED BEFORE HIM. SH.NIPUN GOYAL 5,05,344/- SH.NIKHIL GOYAL 2,50,540/- M/S LIVING STONE INTERIORS LTD. 23,00,000/- TOTAL 30,55,884/- 3. THAT THE APPELLANT HAVING FILED NECESSARY EVIDENCE IN RESPECT OF THE ABOVE CREDITS NOT LIABLE TO EXPLAIN SOURCE OF SOURCE. 4. THAT IN ANY CASE THE CONFIRMATION OF ADDITIONS IS AGAINST THE LAW AND FACTS OF THE CASE. 5. THAT THE APPELLANT CRAVES LEAVE FOR PERMISSION TO ADD, AMEND OR ALTER ANY GROUND OF APPEAL AT THE TIME OF HEARING. 4. THE ONLY ISSUE IN THE PRESENT APPEAL RELATES TO ADDITION MADE ON ACCOUNT OF UNEXPLAINED CASH CREDITS IN THE FOLLOWING CASES: SH.NIPUN GOYAL 5,05,344/- SH.NIKHIL GOYAL 2,50,540/- M/S LIVING STONE INTERIORS LTD. 23,00,000/- 5. TAKING UP THE AFORESAID CASH CREDITS AT A TIME W E SHALL FIRST BE DEALING WITH THE CASH CREDITS APPEARING IN THE NAME OF S/SHRI NIPUN GOYAL AND NIKHIL GOYAL. 6. BRIEF FACTS RELEVANT TO THE SAME ARE THAT DURING ASSESSMENT PROCEEDINGS, THE ASSESSEE WAS ASKED TO F URNISH DETAILS OF NEW CASH CREDITS INTRODUCED DURING THE Y EAR IN THE NAMES OF THE ABOVE TWO PERSONS. THE ASSESSEE S TATED THAT THE SOURCE OF THE CASH ADVANCED WAS PROCEEDS F ROM FDRS. HOWEVER, SINCE NO EVIDENCE IN THIS REGARD WAS FILED THE ASSESSING OFFICER HELD THAT THE SOURCE OF THE C ASH 3 CREDITS REMAINED UNPROVED AND AS A CONSEQUENCE THE CASH CREDITS REMAINED UNEXPLAINED. HE, THEREFORE, MADE ADDITION OF THE CASH RECEIVED FROM THE AFORESAID TWO PERSONS AMOUNTING TO RS.5,05,344/- AND RS.2,50,540/- TO THE INCOME OF THE ASSESSEE. 7. DURING ASSESSMENT PROCEEDINGS THE ASSESSEE REITE RATED ITS CONTENTION MADE BEFORE THE ASSESSING OFFICER AN D FURTHER ON THE INSTANCE OF THE LD.CIT(APPEALS) ASKING TO FI LE EVIDENCE OF FDRS, THE ASSESSEE FILED COPIES OF BANK STATEMENTS OF BOTH THE PERSONS REFLECTING THE PURPO RTED ENCASHMENT OF FDRS IN THE SAME. THE LD.CIT(APPEALS ) AFTER EXAMINING THE SAID BANK STATEMENTS REJECTED ASSESSE ES CONTENTION HOLDING THAT THE SO-CALLED FDRS WERE ON ACCOUNT OF DEPOSIT MADE DURING THE YEAR ITSELF, THE SOURCE OF WHICH REMAINED UNEXPLAINED. THE RELEVANT EXTRACT OF THE BANK STATEMENTS REFERRED TO BY THE LD.CIT(APPEALS) IS AS UNDER: SHRI NIPUN GOYAL: DATE PARTICULAR WITHDRAWAL DEPOSIT BALANCE 28.07.2005 BALANCE B/F 0 28.07.2005 3171104 5,00,000.00 5,00,000.00 31.12.2005 TDS 594.00 4,99,406.00 31.12.2005 INTT 5,938.00 5,05,344.00 31.12.2005 8775 5,05,344.00 0.00 SHRI NIKHIL GOYAL: DATE PARTICULAR WITHDRAWAL DEPOSIT BALANCE 08.12.2005 BALANCE B/F 0 09.12.2005 3171104 2,50,000.00 2,50,000.00 31.12.2005 INTEREST ON TERM DEP: 773.00 TDS:0 773.00 2,50,773.00 31.12.2005 INTEREST 548.00 2,51,321,00 4 31.12.2005 INTEREST EXCESS PAID 773.00 2,50,548.00 31.12.2005 8775 2,50,548.00 0.00 8. AGGRIEVED BY THE SAME, THE ASSESSEE HAS NOW RAIS ED THE ABOVE GROUND BEFORE US CONTESTING THE ADDITION MADE ON ACCOUNT OF AFORESAID TWO CASH CREDITS. DURING THE COURSE OF HEARING BEFORE US LD. COUNSEL FOR ASSESSEE STATED T HAT ALL EVIDENCE TO PROVE THE GENUINENESS OF THE AFORESAID CASH CREDITS HAD BEEN FILED. THE LD. COUNSEL FOR ASSESS EE STATED THAT THE ORIGINAL AFFIDAVITS FROM THE CREDITORS ALO NGWITH CONFIRMED COPY OF ACCOUNT IN THE BOOKS OF THE ASSES SEE HAD BEEN FILED. THE LD. COUNSEL FOR ASSESSEE STATED TH AT IT WAS ALSO SUBMITTED BEFORE THE LOWER AUTHORITIES THAT TH E CREDITORS WERE REGULAR INCOME TAX ASSESSES AND THEI R PAN NUMBERS HAD BEEN PROVIDED. IT WAS FURTHER POINTED OUT THAT THE AFFIDAVITS OF THE CREDITORS DULY STATED THE SOU RCE OF THE AMOUNT AS ENCASHMENT OF FDRS BELONGING TO THEM. TH E LD. COUNSEL FOR ASSESSEE, THEREFORE, STATED THAT THE AS SESSEE COMPANY HAD FULLY DISCHARGED ITS ONUS BY ESTABLISHI NG THE IDENTITY AND GENUINENESS OF THE CREDITORS. THE LD. COUNSEL FOR ASSESSEE FURTHER STATED THAT TREATING THE AFORE SAID CASH CREDITS AS UNEXPLAINED FOR THE REASON THAT THE SOUR CE OF MAKING THE FDRS WAS NOT EXPLAINED, TANTAMOUNTED TO ASKING THE ASSESSEE TO EXPLAIN THE SOURCE OF SOURC E OF THE CASH CREDITS, WHICH WAS NOT PERMISSIBLE IN LAW AND THE AFORESAID CASH CREDITS COULD NOT BE TREATED AS UNE XPLAINED FOR THIS REASON. FURTHER THE LD. COUNSEL FOR ASSES SEE STATED THAT THE DOCUMENTS PROVING THE SOURCE OF MAKING THE FDRS WERE NOW AVAILABLE WITH THE ASSESSEE WHICH HE WISHE D TO 5 FILE BEFORE US AS ADDITIONAL EVIDENCES. AN APPLICA TION IN THIS REGARD DATED 7.9.2015 WAS FILED DURING THE COU RSE OF HEARING, STATING THE REASON FOR NOT FILING THE SAME BEFORE THE LOWER AUTHORITIES WAS THAT IT WAS NOT AWARE THA T IT WAS REQUIRED TO FILE THE SOURCE OF SOURCE ALSO. 9. THE LD. DR, ON THE OTHER HAND, SUPPORTED THE ORD ER OF THE LD.CIT(APPEALS) AND VEHEMENTLY OBJECTED TO THE ADMISSION OF ADDITIONAL EVIDENCE. 10. WE HAVE HEARD THE CONTENTIONS OF BOTH THE PARTI ES, PERUSED THE ORDERS OF THE AUTHORITIES BELOW AND GON E THROUGH THE DOCUMENTS FILED BEFORE US. WITHOUT REF ERRING TO THE ADDITIONAL EVIDENCE FILED BY THE ASSESSEE, WE F IND MERIT IN THE CONTENTION OF THE LD. COUNSEL FOR ASSESSEE. THE ISSUE BEFORE US PERTAINS TO GENUINENESS OF CASH CREDITS R ECEIVED FROM TWO PERSONS S/SHRI NIKHIL GOYAL AND NIPUN GOYA L AMOUNTING TO RS.2,50,540/- AND RS.5,05,344/- RESPEC TIVELY. THE IDENTITY OF THE DONOR HAS NOT BEEN DOUBTED. TH E FACT THAT THE CASH HAS BEEN ADVANCED FROM THE FDRS ENCAS HED AND WITHDRAWN BY THE DONORS, HAS ALSO NOT BEEN DOUB TED. WHAT HAS PROMPTED THE REVENUE TO DOUBT THE GENUINEN ESS OF TRANSACTIONS IS THE FACT THAT THE FDRS WERE MADE FROM DEPOSITS MADE DURING THE YEAR ITSELF, THE SOURCE OF WHICH REMAINED UNEXPLAINED. IN SHORT, THE REVENUES CASE IS THAT SINCE THE SOURCE OF THE SOURCE HAS NOT BEEN PROVED, THE TRANSACTION IS NOT GENUINE. WE DO NOT AGREE WITH T HIS CONTENTION OF THE REVENUE. AS LONG AS IT IS ACCEPT ED THAT THE DONOR HAS GIVEN CASH ADVANCE BY ENCASHING THEIR FDRS, 6 THE GENUINENESS OF THE TRANSACTION STANDS ESTABLISH ED ON ALL ASPECTS I.E. IDENTITY AND CREDITWORTHINESS OF THE D ONORS AND GENUINENESS OF THE TRANSACTION. FROM WHICH SOURCE THE DONORS MADE THE FDRS HAS NO REFLECTION ON THE GENUI NENESS OF THE TRANSACTIONS. IT MAY BE CAST DOUBT OR A REF LECTION ON THE TAXABLE INCOME OF THE DONOR BUT THE DONEE CAN N EITHER BE EXPECTED TO NOR CAN HE POSSIBLY PROVE THE SOURCE OF THE SOURCE OF THE CASH RECEIVED BY HIM. HIS BURDEN LIE S ONLY TO THE EXTENT OF PROVING THE SOURCE OF THE CASH RECEIV ED, WHICH IN THE PRESENT CASE HAS BEEN AMPLY PROVED AND ACCEP TED ALSO BY THE REVENUE AS BEING FROM ENCASHMENT OF FDR S BELONGING TO THE DONORS. THUS THE ASSESSEE HAS DUL Y DISCHARGED HIS BURDEN OF PROVING THE GENUINENESS OF THE CASH ADVANCES GIVEN IN THE PRESENT CASE. MOREOVER, IT IS FOUND THAT IT IS NOT THE CASE OF THE REVENUE THAT T HE FDRS WERE MADE FROM THE CASH DEPOSITS IN THE BANK ACCOUN T OF THE DONOR, NEITHER DOES IT APPEAR TO BE THE CASH DE POSITS FROM THE BANK STATEMENT REPRODUCED IN THE ORDER OF THE LD.CIT(APPEALS) AND ALSO BY US IN THE EARLIER PART OF THE ORDER. THE BANK STATEMENT DOES NOT MENTION THE CRE ATION OF THE FDR BY WAY OF CASH DEPOSITS. IN FACT, IT ONLY MENTIONS A NUMBER BEFORE IT. THEREFORE, THERE IS NO BASIS F OR BELIEVING THAT THE FDRS FORM PART OF THE CASH DEPOS ITS. FOR THIS REASON ALSO, IT IS IMMATERIAL WHAT WAS THE SOU RCE OF MAKING THE FDRS FOR THE PURPOSE OF ESTABLISHING THE GENUINENESS OF THE TRANSACTION OF CASH ADVANCED TO THE ASSESSEE. IN VIEW OF THE SAME, WE HOLD THAT THE CA SH CREDITS OF RS.5,05,344/- RECEIVED BY SHRI NIPNL GOY AL AND 7 RS.2,50,548/- RECEIVED BY SHRI NIKHIL GOYAL STAND E XPLAINED AND ADDITION MADE IN THIS REGARD IS, THEREFORE, DIR ECTED TO BE DELETED. 11. COMING TO THE ISSUE OF CASH RECEIVED FROM M/S L IVING STONE INTERIOR LTD. OF RS.23 LACS, THE FACTS ARE TH AT THE ASSESSING OFFICER FOUND THAT THERE WAS UNSECURED LO AN RECEIVED BY THE ASSESSEE OF RS.24 LACS ON 19.01.200 6. THE ASSESSEE FILED A COPY OF THE BANK ACCOUNT OF M/S LI VING STONE INTERIORS LTD. FOR THE CORRESPONDING PERIOD. THE ASSESSING OFFICER NOTED THAT ON THE SAME DATE I.E. 19.01.2006 THERE WAS A CASH DEPOSIT OF RS.24,00,000 /- IN THIS ACCOUNT. THE SOURCE OF THIS AMOUNT WAS STATED TO BE CASH OF RS.23,00,000/- RETURNED BY SHRI SATISH GOYA L, DIRECTOR WITH WHOM THIS AMOUNT WAS CLAIMED TO BE LY ING AS IMPREST MONEY AND BALANCE RS.1,00,000/- OUT OF CASH IN HAND OF THE COMPANY. THE ASSESSING OFFICER SUMMONED SHRI SATISH GOYAL U/S 131 OF THE I.T. ACT AND RECORDED H IS STATEMENT. SHRI SATISH GOEL COULD NOT TELL SINCE W HEN THIS IMPREST MONEY WAS LYING WITH HIM. NO EVIDENCE WAS F ILED TO SHOW THAT ANY SUCH IMPREST MONEY OF M/S LIVING STON E INTERIORS LTD. WAS LYING WITH HIM. THE ASSESSING OF FICER OBSERVED THAT THERE WAS NO JUSTIFICATION IN THE CLA IM THAT SHRI SATISH KUMAR GOYAL WILL KEEP SUCH A HEAVY AMOU NT IN CASH WITH HIM FOR A LONG PERIOD AND NOT DEPOSIT THE SAME IN THE BANK. THE ASSESSING OFFICER ACCORDINGLY HELD TH AT THE SOURCE OF THIS AMOUNT IN THE HANDS OF THE CREDITOR WAS NOT PROVED. THE ASSESSING OFFICER OBSERVED THAT THE CLA IM OF 8 SHRI SATISH GOYAL THAT THE IMPREST MONEY WAS LYING WITH HIM PRIOR TO 1.4.2005 AS SOME DISPUTES WERE GOING O N WITH THE BANK WAS WITHOUT ANY FORCE AS NO EVIDENCE THERE OF WAS FILED. THE ASSESSING OFFICER ACCORDINGLY HELD THAT THE SOURCE OF RS.23,00,000/- OUT OF CASH CREDIT OF RS.24,00,00 0/- WAS NOT PROVED. HE ACCORDINGLY MADE AN ADDITION OF RS.23,00,000/- AS UNEXPLAINED CASH CREDIT TO THE TO TAL INCOME OF THE ASSESSEE. 12. DURING THE APPELLATE PROCEEDINGS THE ASSESSEE REITERATED THAT THE SOURCE OF RS.23 LACS WAS THE IM PREST AMOUNT LYING WITH THE DIRECTOR, BUT NO EVIDENCE WI TH REGARD TO THE SAME WAS FILED EVEN DURING APPELLATE PROCEED INGS. IN THE ABSENCE OF THE SAME, THE LD.CIT(APPEALS) UPHELD THE ADDITION MADE BY THE ASSESSING OFFICER BY TREATING THE AFORESAID AMOUNT RECEIVED FROM M/S LIVING STONE INT ERIORS LTD. AS UNEXPLAINED. 13. DURING THE COURSE OF HEARING BEFORE US, LD. CO UNSEL FOR THE ASSESSEE REITERATED THAT THE AMOUNT OF RS.2 3 LACS HAD BEEN ADVANCED BY M/S LIVING STONE INTERIORS LTD . FROM THE AMOUNT WHICH RECEIVED BACK FROM ITS DIRECTOR SH RI SATISH GOYAL TO WHOM THE SAID AMOUNT WAS GIVEN BY W AY OF IMPREST. AS EVIDENCE OF THE SAME, THE LD. COUNSEL FOR ASSESSEE FILED CERTAIN EVIDENCES BEFORE US BY WAY O F ADDITIONAL EVIDENCES ALONGWITH APPLICATION UNDER RU LE 29 OF THE APPELLATE TRIBUNAL RULES, 1963 STATING THE REAS ON FOR NOT FILING THE SAME BEFORE THE LOWER AUTHORITIES AS UNDER: 6.THE APPELLANT WAS DULY REPRESENTED BY SHRI RANJI T VIJH 9 CA WHO WAS OF THE BONA-FIDE BELIEF THAT THE APPELLA NT WAS NOT REQUIRED TO PROVE SOURCE OF SOURCE OF CREDITORS ESPECIALLY WHEN THE AMOUNTS HAVE BEEN RECEIVED BY ACCOUNT PAYE E CHEQUES AND THE CREDITORS ARE HOLDING PAN FROM THE DEPARTMENT AND HAVE FILED INCOME TAX RETURNS FOR TH E IMPUGNED ASSESSMENT YEAR. LIVING STONE INTERIORS LT D HAD NOT FILED THE RETURN AS THERE WAS LOSS. HOWEVER REGULAR BALANCE SHEETS WERE PREPARED BY THE LIMITED COMPANY. NOW THE APPELLANT HUMBLY PRAYS THAT THE FOLLOWING ADDITIONAL EVIDENCE WHICH WAS NOT PLACED /COULD NOT BE PLACED BEFORE THE LOWER AUTHORITIES MAY PLEA SE BE ADMITTED IN THE DISCRETION BESTOWED BY THE LEGISLATUR E TO IMPART JUSTICE TO THE APPELLANT. 14. THE ADDITIONAL EVIDENCES WHICH WERE SOUGHT TO B E FILED WERE AS UNDER: 1. THE COMPANY IS MAINTAINING REGULAR BOOKS OF ACCOUNT AND BALANCE SHEETS ARE PREPARED AT THE CLOSE OF THE YEA R BY THE COMPANY'S CHARTERED ACCOUNTANTS. THE BALANCE SHEET AS ON 31.03.2005 SHOWS AN IMPREST OF RS.23 LACS IN THE NAME OF SATISH KUMAR GOYAL DIREC TOR AND CASH IN HAND OF RS.84,439/- IS ALSO SHOWN IN THE BALANCE SHEET. 2. AS PER COPY OF ACCOUNT OF SATISH GOYAL IN THE BOOKS OF COMPANY THIS AMOUNT OF RS. 23 LACS WAS RETURNED BY SATISH GOYAL ON 19.01.2006. 3. AS PER CASH BOOK OF THE COMPANY THERE IS A CASH IN H AND OF RS.102961.88 ON 19.01.2006 AND CASH OF 23 LACS W AS RECEIVED FROM SATISH GOYAL. CASH OF RS.24 WAS DEPOS ITED IN THE ANDHRA BANK ON 19.01.2006 AND A CHEQUE FOR RS.24 LACS WAS ISSUED IN THE NAME OF MAURYA SPINNING MILLS P LTD. THIS AMOUNT STANDS DEBITED IN THE BANK ACCOUNT OF COMPANY ON 19.01.2006. (DOCUMENTS ENCLOSED) 15. THE LD. DR, ON THE OTHER HAND, OBJECTED TO THE FILING OF THE ADDITIONAL EVIDENCES BY WAY OF ITS WRITTEN SUBM ISSIONS WHICH ARE AS UNDER: 1. THE ASSESSMENT ORDER IN THIS CASE WAS PASSED ON 30/12/2008 MAKING ADDITION RS.30,55,884/- ON ACCOUNT OF DEPOSITS IN THE BANK ACCOUNT (CLASSIFIED AS UNSECURED LOAN) 10 WHICH WERE NOT EXPLAINED WITH DOCUMENTARY EVIDENCE. BEFORE THE CIT(A) ALSO THE ASSESSEE DI D NOT PRODUCE ANY DOCUMENTARY EVIDENCE WITH REGARD TO THE SOURCE OF CREDITS. ACCORDINGLY VIDE ORDER DATED 3/1/2014, THAT IS AFTER A GAP OF 5 YEARS THE C1T(A) UPHELD THE ADDITIONS MADE BY THE ASSESSING OFFICER. 2. THE ASSESSEE HAS NOW FILED ADDITIONAL EVIDENCE AND IN ITS APPLICATION DATED 7/9/2015 UNDER RULE 29 HAS STATED THAT ITS AUTHORIZED REPRESENTATIVE SHRI RANJIT VIJH CA WAS IN BONAFIDE BELIEF THAT IT WAS NOT REQUIRED TO PROVE THE SOURCE OF SOURCE OF CREDITORS. IN THIS RESPECT IT IS HUMBLY SUBMITTED THAT THE ASSESSEE DID NOT PRODUCE THE REQUISITE EVIDENCE SIMPLY BECAUSE IT DIDNT WANT TO. PERSONAL BELIEF CANNOT BE REASONABLE CAUSE FOR NON PRODUCTION OF EVIDENCE BEFORE LOWER TAX AUTHORITIES. IF SO BE THE CASE THEN THE NECESSITY OF PRODUCING ADDITIONAL EVIDENCE AT THIS STAGE THAT TOO AFTER SO MANY YEARS (NEARLY 7 YEARS) DOE NOT ARISE. 3. IT IS WELL SETTLED LAW THAT THE ONUS IS ON THE ASSESSEE TO PROVE IDENTITY, GENUINENESS OF TRANSACTION AND CREDITWORTHINESS OF THE CREDITORS. SO HOW COULD THE ASSESSEE FORM A BELIEF THAT DOCUMENTARY EVIDENCE IS NOT MATERIAL TO DISCHARGE ITS ONUS? AND IF THAT BELIEF IS FORMED THEN WHAT PROMPTED ITS CHANGE AFTER SO MANY YEARS? THE ASSESSEE'S APPLICATION UNDER RULE 29 IS SILENT ON THESE BASIC POINTS AND HENCE DESERVES TO BE REJECTED. 4. THE ADDITIONAL EVIDENCE PERTAINS TO TRANSACTION IN A.Y.2006-07 I.E. PERIOD BEYOND 10 YEARS. TH E CORRECTNESS AND AUTHENTICITY OF THESE EVIDENCES CANNOT BE VERIFIED AT THIS TIME. THERE ARE CHANCES OF MANIPULATION AS IS ILLUSTRATED BELOW: THE ASSESSEE FILED BALANCE SHEET AND CASH BOOK ETC. OF LIVING STONE INTERIORS LTD FROM PAGES 9 TO 12. THESE ARE SELF SERVING DOCUMENTS WHICH ARE NOT VERIFIABLE FROM ANY INDEPENDENT AGENCY /DEPARTMENT. IT MAY BE NOTED THAT THIS COMPANY DID NOT FILE ANY RETURN OF INCOME FOR THE RELEVANT YEAR EVEN THOUGH IT WAS REQUISITE DOCUMENTS AND BALANCE SHEET BEFORE THE ROC. AS PER THE BALANCE SHEET THE SOURCE OF CASH IN THE HANDS OF SATISH GOYAL IS THE CASH OF RS 25 LAKS RECEIVED FROM SHARE HOLDERS ON ISSUE OF ITS SHARES. THE ASSESSEE HAS NOT 11 OFFERED ANY EXPLANATION REGARDING THE ISSUE OF SHARE FOR RS 25 LAKHS AND IT EXPECTS THAT THE ADDITIONAL EVIDENCE SHOULD BE ACCEPTED WITHOUT FURTHER QUERY OR VERIFICATION. THE ADDITIONAL EVIDENCE SUBMITTED ARE HENCE INADEQUATE AND NOT VERIFIABLE. 5. THE HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF JAWAHAR LAL JAIN, HUF VS CIT 370 ITR 712 CONFIRMED THE ORDER OF THE TRIBUNAL(CHANDIGARH) IN REJECTING APPLICATION FOR ADMISSION OF ADDITIONAL EVIDENCE FILED BY THE ASSESSEE BECAUSE NO SATISFACTORY EXPLANATION HAD BEEN FURNISHED TO DEMONSTRATE WHY THE MATERIALS OUGHT TO BE PRODUCED NOW COULD NOT BE PRODUCED EARLIER. 6. FOLLOWING THE ABOVE DECISION OF THE HON'BLE PUNJ AB & HARYANA HIGH COURT, HONBLE ITAT CHANDIGARH IN THE CASE OF HARIS CHANDER, YMUNAGAR VS ITO (ITA NO 91/CHD/2015) VIDE ORDER DATED 10/07/2015 DID NOT ADMIT ADDITIONAL EVIDENCE WITH REGARDS TO THE SOURCE OF CASH DEPOSITS IN THE BANK ACCOUNT. THE APPLICATION OF THE ASSESSEE FOR ADMISSION OF ADDITIONAL EVIDENCES/DOCUMENTS WAS ACCORDINGLY REJECTED. THE HONBLE ITAT FURTHER OBSERVED THAT, 'IT IS, THEREFORE, CLEAR THAT THE ABOVE ADDITIONAL EVIDENCES WERE NEVER PRODUCED BEFORE THE AUTHORITIES BELOW AT ANY POINT OF TIME. THEREFORE, THERE ARE CHANCES OF MANIPULATING THE BOOKS OF ACCOUNT AND COPY OF THE TRADER'S ACCOUNT FOR THE PURPOSE OF MISLEADING THE AUTHORITIES BELOW'. THE FACTS AND ISSUE IN THE PRESENT CASE IS SIMILAR TO THAT OF CASE OF HARIS CHANDER, YAMUNAGAR AND HENCE THIS CASE LAW IS SQUARELY APPLICABLE. 7. IN VIEW OF THE ABOVE THE ASSESSEES APPLICATION UNDER RULE 29 MAY KINDLY BE REJECTED AS THE REASONS FOR NON SUBMISSION OF EVIDENCE BEFORE LOWER TAX AUTHORITY IS NOT JUST AND REASONABLE. 16. WE HAVE HEARD BOTH THE PARTIES. THE CONTENTION OF THE ASSESSEE VIS--VIS THE AMOUNT RECEIVED FROM M/S LIV ING STONE INTERIORS LTD. OF RS.23 LACS IS THAT THE SAME WAS OUT OF MONEY RECEIVED BY M/S LIVING STONE INTERIORS LTD . FROM ITS DIRECTOR SHRI SATISH GOYAL TO WHOM THE SAID AMO UNT HAD BEEN GIVEN BY WAY OF IMPREST. UNDENIABLY, THIS 12 SUBMISSION/EXPLANATION OF THE ASSESSEE WAS NOT SUBSTANTIATED BEFORE THE LOWER AUTHORITIES. BEFORE US, THE LD. COUNSEL FOR ASSESSEE HAS FILED AN APPLICATION T O FILE EVIDENCES IN SUPPORT OF ITS ABOVE CONTENTION WHICH ARE REPRODUCED ABOVE. THE LD. COUNSEL FOR ASSESSEE HAS STATED THAT IT WAS UNDER THE BONAFIDE BELIEF THAT IT WAS N OT REQUIRED TO PROVE THE SOURCE OF SOURCE AND SINCE TH ESE EVIDENCES GO TO THE ROOT OF THE MATTER THEY MAY BE ADMITTED. THE REVENUE, ON THE OTHER HAND, HAS CHALLENGED THE ADMISSION ON THE GROUND THAT THE DOCUMENTS DO NOT A PPEAR TO BE GENUINE AND NO PLAUSIBLE REASON FOR PRODUCING THEM BEFORE THE LOWER AUTHORITIES HAS BEEN GIVEN. CONSI DERING THE ARGUMENTS OF BOTH THE PARTIES WE HOLD THAT THE ADDITIONAL EVIDENCES NOW BEING FILED BY THE LD. COU NSEL FOR ASSESSEE CANNOT BE ADMITTED FOR THE FOLLOWING REASO NS: I) THE LD. COUNSEL FOR ASSESSEE HAS FILED A BALANCE SHEET OF M/S LIVINGSTONE INTERIORS LTD., REFLECTING THE PURPORTED IMPREST GIVEN TO THE DIRECTOR WHICH IS N OT EVEN AN AUDITED BALANCE SHEET. THE SAID BALANCE SHEET IS NEITHER CERTIFIED BY THE AUDITORS AS REFLE CTING THE TRUE STATE OF AFFAIRS OF THE COMPANY AS REQUIR ED UNDER THE COMPANIES ACT, NOR IS IT SIGNED BY THE AUDITORS. IT SIMPLY CARRIES THE STAMP OF THE AUDITO R WHICH IS INITIALED. MOREOVER THE ACCOMPANYING DOCUMENTS FORMING PART OF THE FINANCIAL STATEMENT HAVE NOT BEEN FILED. FURTHER AS POINTED OUT BY THE LD.DR NO INCOME TAX RETURN HAS BEEN FILED OF THE SA ID 13 COMPANY AND NOR HAVE THE SAID BALANCE SHEET BEEN SUBMITTED TO THE ROC AS REQUIRED BY LAW IN BOTH CAS ES. THIS FACT HAS NOT BEEN CONTROVERTED BY THE LD.COUNS EL FOR THE ASSESSEE. THEREFORE WE AGREE WITH THE LD.DR THAT THE SAID DOCUMENTS APPEAR TO BE SELF SERVING O NLY AND NOT GENUINE. II) MOREOVER NO PLAUSIBLE EXPLANATION HAS BEEN GIVE N FOR NOT ADDUCING THESE DOCUMENTS BEFORE THE LOWER AUTHORITIES. THE CONTENTION OF THE LD.COUNSEL FOR T HE ASSESSEE THAT SINCE THE ASSESSEE BELIEVED THAT HE W AS NOT REQUIRED TO PROVE THE SOURCE OF SOURCE, WE HOLD , MERITS NO CONSIDERATION SINCE THE SAID DOCUMENT EVIDENCES THE SOURCE OF THE ADVANCE ONLY AND NOT TH E SOURCE OF SOURCE. M/S LIVINGSTONE HAVING CLAIMED TH E SOURCE OF THE ADVANCE MADE TO THE ASSESSEE OUT OF IMPREST GIVEN TO THE DIRECTOR RECEIVED BACK, THE FA CTUM OF HAVING GIVEN THE IMPREST IN EARLIER YEAR PROVES THE SOURCE OF THE ADVANCE ONLY. 17. WE, THEREFORE, REJECT THE ADMISSION OF ADDITION AL EVIDENCES FILED BY THE ASSESSEE AND UPHOLD THE ADDI TION MADE ON ACCOUNT OF CASH CREDITS IN THE NAME OF M/S LIVING STONE INTERIORS LTD. OF RS.23 LACS. 18. IN EFFECT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED WITH THE ADDITION MADE ON ACCOUNT OF CASH CREDITS R ECEIVED FROM NIPUN GOYAL & NIKHLI GOYAL AMOUNTING TO RS.5,0 5,344 & RS.2,50,540/-RESPECTIVELY BEING DELETED, WHILE TH AT ON ACCOUNT OF CASH CREDITS RECEIVED FROM M/S LIVINGSTO NE 14 INTERIORS PVT. LIMITED AMOUNTING TO RS.23,00,000/- BEING UPHELD. 19. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PA RTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (SANJAY GARG) (ANNAPURNA GUPTA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 21 ST SEPTEMBER, 2017 *RATI* COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. THE CIT 5. THE DR ASSISTANT REGISTRAR, ITAT, CHANDIGARH