HITENDRA M GHOSH, MUMBAI V. ITO WD 19(1)(3), MUMBAI

ITA 5347/MUM/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 4461 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 4 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-01-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 01-10-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 22-08-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: A K DHONDIAL J
• Assessee Lawyers: M SUBRAMANIAN
• Keywords: Gift
• Section: 142(1); 133(6); 69

Judgement Text

, - , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES SMC, MUMBAI , ! ' , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER, ITA NO.5347/MUM/2014 ASSESSMENT YEAR: 2007-08 HITENDRA M. GHOSH, 28, VEENA BEENA, GR. FL. OPP. BANDRA STATION, MUMBAI-400050 / VS. ITO, WARD-19(1)(3), MUMBAI / ASSESSEE / REVENUE P.A. NO. ACMPG7670A $ % & / ASSESSEE BY SHRI M.SUBRAMANIAN $ % & / REVENUE BY SHRI A.K.DHONDIAL JCIT-DR / DATE OF HEARING 06/01/2016 & / DATE OF ORDER: 06/01/2016 & / O R D E R THE ASSESSEE IS AGGRIEVED BY THE IMPUGNED ORDER DA TED 30/06/2014 OF THE LD. FIRST APPELLATE AUTHORITY, MU MBAI. THE ONLY GROUND RAISED IN THIS APPEAL PERTAINS TO C ONFIRMING ITA NO.5347/MUM/2014 HITENDRA M. GHOSH 2 THE ADDITION AS CASH CREDIT UNDER 68 OF THE INCOME TAX ACT, 1961 (HEREINAFTER THE ACT.). 2. THE CRUX OF ARGUMENT ADVANCED BY SHRI M. SUBRAMANIAN, LD. COUNSEL FOR THE ASSESSEE, IS THAT THE ADDITION WAS WRONGLY MADE BY THE ASSESSING OFFICER AND CONFIRMED BY THE LD. COMMISSIONER OF INCOME TAX (AP PEALS) WITHOUT ASSIGNING ANY VALID REASON. MY ATTENTION WA S ALSO INVITED TO THE REMAND REPORT SOUGHT FROM THE ASSESS ING OFFICER AND PAGE 14 OF THE PAPER BOOK. ON THE OTHER HAND, SHRI A.K.DHONDIAL, LD. DR, STRONGLY DEFENDED THE IM PUGNED ORDER BY CONTENDING THAT THE ASSESSEE NEITHER PRODU CED THREE PARTIES FROM WHOM THE ASSESSEE CLAIMED TO HAVE TAKE N UNSECURED LOANS NOR CONFIRMATION WAS FILED. 2.1. I HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE FACT S, IN BRIEF, ARE THAT IT WAS NOTICED BY THE ASSESSING OFFICER, F ROM THE BALANCE SHEET OF THE ASSESSEE, THAT THE ASSESSEE HA S TAKEN UNSECURED LOANS OF RS.4,15,000/-. THE ASSESSEE DID NOT FILED ANY DETAILS OR CONFIRMATION WITH REGARD TO SOURCE O F THE LOANS. THE ASSESSEE WAS ISSUED NOTICE U/S 142(1) OF THE AC T TO FURNISH THE DETAILS BUT THE SAME WERE NOT FILED. IN THE ABSENCE OF PROVING THE GENUINENESS OF THE CREDITS, AND THEIR SOURCE, THESE WERE TREATED AS UNEXPLAINED CASH CRED ITS AND ADDED U/S 68 OF THE ACT AND ASSESSMENT WAS FRAMED U /S.144 OF THE ACT. ITA NO.5347/MUM/2014 HITENDRA M. GHOSH 3 2.2. ON APPEAL BEFORE THE LD. COMMISSIONER OF INCO ME TAX (APPEALS), THE ASSESSEE ARGUED THAT PROPER OPPO RTUNITY WAS NOT PROVIDED TO THE ASSESSEE. THE LD. COMMISSI ONER OF INCOME TAX (APPEALS) SOUGHT REMAND REPORT FROM THE ASSESSING OFFICER, WHEREIN, REMAND REPORT WAS DULY FILED, WHICH WAS CONFRONTED TO THE ASSESSEE ALSO. NOTICE U/S 133 (6) OF THE ACT TO THREE PARTIES AND BROKER OF THE F OURTH PARTY CALLING INFORMATION WITH RESPECT TO UNSECURED LOANS GIVEN TO THE ASSESSEE. IN RESPONSE, SHRI SAWALRAM BAGARIA (H UF) VIDE LETTER DATED 07/04/2012 FURNISHED THE COPY OF THE L EDGER ACCOUNT, COPY OF STATEMENT, COPY OF RETURN OF INCOM E ALONG WITH BALANCE SHEET REFLECTING LOANS AND ADVANCES TO THE ASSESSEE TO THE TUNE OF RS.1,15,000/-. THE LD. COM MISSIONER OF INCOME TAX (APPEALS) ACCEPTED THE EXPLANATION AN D THUS, GRANTED RELIEF TO THE ASSESSEE. THE REMAINING LOAN FROM SHRI MANISH JAIN, S.K. ENTERPRISES AND BROKER OF M/S S.L . ENTERPRISES, NO REPLY WAS FILED TO THE NOTICES ISSU ED U/S 133(6) OF THE ACT. THE ASSESSEE ALSO DID NOT EXPLAI N THE SOURCE, CREDITWORTHINESS AND GENUINENESS OF THE TRA NSACTION. BEFORE THE TRIBUNAL ALSO, THE ASSESSEE DID NOT EXPL AIN ANYTHING. THE CONDITIONS ENSHRINED IN SECTION 68 OF THE ACT WERE NOT PROVED BY THE ASSESSEE. AS PER SECTION 68 OF THE ACT, ONUS IS UPON THE ASSESSEE. FIRST BURDEN IS UPON THE ASSESSEE TO SATISFACTORILY EXPLAIN THE CREDIT ENTRY CONTAINE D IN HIS BOOKS OF ACCOUNTS. THE BURDEN HAS TO BE DISCHARGED WITH POSITIVE MATERIAL (OCEANIC PRODUCTS EXPORTING COMPA NY VS CIT 241 ITR 497 (KERALA.). THE LEGISLATURE HAD LAID DOWN THAT ITA NO.5347/MUM/2014 HITENDRA M. GHOSH 4 IN THE ABSENCE OF SATISFACTORY EXPLANATION, THE UNE XPLAINED CASH CREDIT MAY BE CHARGED U/S 68 OF THE ACT. MY VI EW IS FORTIFIED BY THE RATIO LAID DOWN IN HONBLE APEX CO URT IN P.MOHANKALA (2007)(291 ITR 278)(SC). A CLOSE READIN G OF SECTION 68 AND 69 OF THE ACT MAKES IT CLEAR THAT IN THE CASE OF SECTION 68, THERE SHOULD BE CREDIT ENTRY IN THE BOO KS OF ACCOUNT WHEREAS IN THE CASE OF 69 THERE MAY NOT BE AN ENTRY IN SUCH BOOKS OF ACCOUNT. THE LAW IS WELL SETTLED, THE ONUS OF PROVING THE SOURCE OF A SUM, FOUND TO BE RECEIVED B Y AN ASSESSEE, IS ON HIM AND WHERE IT IS NOT SATISFACTOR ILY EXPLAINED, IT IS OPEN TO THE REVENUE TO HOLD THAT I T IS INCOME OF THE ASSESSEE AND NO FURTHER BURDEN LIES ON THE R EVENUE TO SHOW THAT INCOME IS FROM ANY OTHER PARTICULAR SOURC E. WHERE THE ASSESSEE FAILED TO PROVE SATISFACTORILY THE SOU RCE AND NATURE OF SUCH CREDIT, THE REVENUE IS FREE TO MAKE THE ADDITION. THE PRINCIPLE LAID DOWN IN GANPATI MUDAL IAR (1964) 53 ITR 623/A. GOVINDA RAJULU MUDALIAR (34 ITR 807)( SC) AND ALSO CIT VS DURGA PRASAD MORE (72 ITR 807)(SC) ARE THE LANDMARK DECISIONS. THE RATIO LAID DOWN THEREIN ARE THAT IF THE EXPLANATION OF THE ASSESSEE IS UNSATISFACTORY, THE AMOUNT CAN BE TREATED AS INCOME OF THE ASSESSEE. THE RATI O LAID DOWN IN DAULAT RAM RAWATMAL 87 ITR 349 (SC) FURTHER SUPP ORTS THE CASE OF THE REVENUE. IN THE CASE OF A CASH ENT RY, IT IS NECESSARY FOR THE ASSESSEE TO PROVE NOT ONLY THE ID ENTITY OF THE CREDITOR BUT ALSO THE CAPACITY OF THE CREDITOR AND GENUINENESS OF THE TRANSACTION. THE ONUS LIES ON T HE ASSESSEE, UNDER THE FACTS AVAILABLE ON RECORD. A H ARMONIOUS ITA NO.5347/MUM/2014 HITENDRA M. GHOSH 5 CONSTRUCTION OF SECTION 106 OF THE EVIDENCE ACT AND SECTION 68 OF THE INCOME TAX ACT WILL BE THAT APART FROM ES TABLISHING THE IDENTITY OF THE CREDITOR, THE ASSESSEE MUST EST ABLISH THE GENUINENESS OF THE TRANSACTION AS WELL AS THE CREDITWORTHINESS OF THE CREDITORS. IN CIT VS KORLA Y TRADING COMPANY LTD. 232 ITR 820 (CAL.), IT WAS HELD THAT M ERE MENTION OF FILE NUMBER OF CREDITOR WILL NOT SUFFICE AND EACH ENTRY HAS TO BE EXPLAINED SEPARATELY BY THE ASSESSE E (CIT VS R.S. RATHAORE) 212 ITR 390 (RAJ.). THE HONBLE GUW AHATI HIGH COURT IN NEMI CHANDRA KOTHARI VS CIT (264 ITR 254)(GAU) HELD THAT TRANSACTION BY CHEQUES MAY NOT BE ALWAYS SACROSANCT. IN THE PRESENT APPEAL, THE ASSE SSEE NEITHER FULFILLED THE CONDITIONS ENSHRINED U/S 68 O F THE ACT NOR PRODUCED THE CREDITORS FROM WHOM CLAIMED LOAN W AS TAKEN. EVEN NO CONFIRMATION WAS FILED BEFORE THE AS SESSING OFFICER REGARDING THE GENUINENESS OF CLAIMED LOAN. 2.3. THE RATIO LAID DOWN IN ACIT VS RAJEEV TANDON 294 ITR (AT) 219 (DEL.), WHICH WAS CONFIRMED BY HONBLE HIGH COURT , IN 294 ITR 488, SUPPORTS THE CASE OF THE RE VENUE. IDENTICAL RATIO WAS LAID DOWN IN CIT VS ANIL KUMAR 392 ITR 552 (DEL.), WHEREIN IT WAS HELD THAT MERE IDENTIFIC ATION OF THE DONOR AN MOVEMENT OF GIFT THROUGH BANKING CHANNEL I S NOT SUFFICIENT TO PROVE THE GENUINENESS OF GIFT. KEEPIN G IN VIEW, THE TOTALITY OF FACTS, ATTENDANT CIRCUMSTANCES, HUM AN PROBABILITIES, AND IN THE ABSENCE OF PLAUSIBLE EXPL ANATION BY THE ASSESSEE, RELEVANT MATERIAL, AND NON-FULFILLMEN T OF INGREDIENTS ENSHRINED IN SECTION 68 OF THE ACT, I F IND NO ITA NO.5347/MUM/2014 HITENDRA M. GHOSH 6 INFIRMITY IN CONCLUSION DRAWN BY THE LD. COMMISSION ER OF INCOME TAX (APPEALS), THUS, THE APPEAL OF THE ASSES SEE IS HAVING NO MERIT, THEREFORE, DISMISSED. FINALLY, THE APPEAL OF THE ASSESSEE IS DISMISSED. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. REPRESENTATIVE OF BOTH SIDES AT THE CONCLUSION OF THE HEARING ON 06/01/2016. SD/- (JOGINDER SINGH) ! ' / JUDICIAL MEMBER MUMBAI; DATED : 06/01/2016 F{X~{T? P.S / ! & $ )!*+ ,&+-* / COPY OF THE ORDER FORWARDED TO : 1. '#$%& / THE APPELLANT 2. '(%& / THE RESPONDENT. 3. ) ) * ( '#$ ) / THE CIT, MUMBAI. 4. ) ) * / CIT(A)- , MUMBAI 5. -./ ' , ) '#$ ' 1 , / DR, ITAT, MUMBAI 6. /2 3$ / GUARD FILE. & / BY ORDER, (-# ' //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI