KALE ENTERTAINMENT & RESORT P.LTD, MUMBAI V. DCIT CEN CIR 32(3), MUMBAI

ITA 545/MUM/2015

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 9996 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 7 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-08-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 06-06-2017
• Assessment Year: 2011-2012
• Appeal Filed On: 23-01-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: PURUSHOTTAM KASHYAP
• Keywords: Unexplained cash credit; Onus to prove
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH A MUMBAI BEFORE SHRI MAHAVIR SINGH (JUDICIAL MEMBER) AND SHRI N.K. PRADHAN (ACCOUNTANT MEMBER) ITA NO. 545/MUM/2015 ASSESSMENT YEAR: 2011 - 12 KALE ENTERTAINMENT & RESORTS PVT. LTD., S/4, 101, SUNDER NAGAR, S.V. ROAD, MALAD (W), MUMBAI - 400064 VS. DCIT - 32 ROOM NO. 32(3), GROUND FLOOR, AAYAKAR BHAVAN, M.K. ROAD MUMBAI - 400020. PAN NO. AACCK6915H APPELLANT RESPONDENT ASSESSEE BY : NONE REVENUE BY: SHRI PURUSHOTTAM KASHYAP , DR DATE OF HEARING : 06/06 /2017 DATE OF PRONOUNCEMENT : 30/08/2017 ORDER PER N.K. PRADHAN, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE. THE R ELEVANT ASSESSMENT YEAR IS 2011 - 12 . THE APPEAL IS DIRECTED AGAINST THE ORDER OF THE COMMISS IONER OF INCOME TAX (APPEALS) - 41 , MUMBAI AND ARISES OUT OF THE ASSESSMENT COMPLETED U/S 143(3 ) OF THE INCOME TAX ACT 1961, (T HE ACT). 2. WE FIND THAT THE CASE WAS FIXED FOR HEARING ON 06.09. 2016. HOWEVER, NEITHER THE ASSESSEE NOR ITS AUTHORIZED REPRESENTATIVE ITA NO. 545/MUM/2015 2 APPEARED ON THE ABOVE DATE. THEN THE CASE WAS ADJOURNED TO 24.01.2017 BY ISSUING NOTICE THROUGH RPAD TO THE ASSESSEE ON 25.10.2016. NEITHER THE ASSESSEE NOR ITS AUTHORIZED REPRESENTATIVE APPEARED ON THE ABOVE DATE. AGAIN NOTICE WAS SENT BY THE REGISTRY ON 15.05.2017 THROUGH RPAD TO THE ASSESSEE FIXING THE CASE FOR HEARING ON 06.06. 2017. NEITHER THE ASSESSEE NOR ITS AUTHORIZED REPRESENTATIVE APPEARED ON THE ABOVE DATE. IN VIEW OF THE ABOVE, WE ARE DISPOSING THE APPEAL ON THE BASIS OF MATERIALS AVAILABLE ON RECORD AND AFTER HEARING THE LD. DR. 3 . THE GROUND OF APPEAL FILED BY THE ASSESSEE READ S AS UNDER: - THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.55,00,00/ - AS UNEXPLAINED CASH CREDIT U/S 68 OF THE ACT. 4 . BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT THE ASSESSING OFFICER (AO), DURING THE COURSE OF ASSESSMENT PROCEEDINGS, ISSUED NOTICE U/S 13 3(6) TO ONE M/S BHAKTI GEMS TO VERIFY THE GENUINENESS OF UNSECURED LOAN AMOUNTING TO RS.55,00,000/ - OBTAINED BY THE ASSESSEE FROM THE ABOVE PARTY. NO REPLY WAS RECEIVED BY THE AO. THEN THE AO ISSUED A SHOW CAUSE NOTICE TO THE ASSESSEE ON 03.02.2014 T O PROV E THE GENUINENESS OF LOAN. THE ASSESSEE FILED A REPLY ON 25.02.2014 STATING THAT: THE ABOVE PARTY DID NOT AGREE TO GIVE DETAILS AS REQUIRED BY YOU AS THE SAME LOAN IS STILL OUTSTANDING DUE TO FINANCIAL CRISIS WE ARE NOT ABLE TO REPAY TILL DATE. THE COPY OF LOAN CONFIRMATION WHICH WAS SUBMITTED TO YOU WAS RECEIVED FROM T HE ABOVE PARTY IN THE YEAR 2011 W HICH WAS SENT BY THEM FOR CONFIRMATION OF LOAN. ITA NO. 545/MUM/2015 3 WE SUBMIT THAT WE HAVE SUBMITTED LOAN CONFIRMATION. PAN AND DETAILS OF JURISDICTION AND ALSO THE NOTICE ISSUED BY YOU WAS SERVED TO THE PARTY. HENCE DUTY OF THE ASSESSEE TO ESTABLISH GENUINENESS OF TRANSACTION AND IDENTITY OF PARTY HAS DISCHARGED. THE A O WAS NOT CONVINCED WITH THE ABOVE EXPLANATION OF THE ASSESSEE AS NO REPLY WAS GIVEN BY THE LENDER I.E. M/S BHAKTI GEMS AND THE SUBMISSION OF THE ASSESSEE THAT THE PARTY WAS NOT AGREEING TO GIVE LOAN CONFIRMATION WA S NOT A VALID EXCUSE. AS THE ASSESSEE FAI LED TO ESTABLISH THE GENUINENESS OF TRANSACTION AND CREDIT WORTHINESS OF THE LENDER, THE AO MADE AN ADDITION OF RS.55,00,000/ - AS UNEXPLAINED CASH CREDIT U/S 68 OF THE ACT. 5. AGGRIEVED BY THE ORDER OF THE AO , THE ASSESSEE FILED AN APPEAL BEFORE THE LD. C IT(A). WE FIND THAT NEITHER THE ASSESSEE NOR ITS AUTHORIZED REPRESENTATIVE APPEARED BEFORE THE LD. CIT(A) IN SPITE OF THE NUMBER OF OPPORTUNITY PROVIDED. THE LD. CIT(A) AGREED WITH THE FINDING OF THE AO AND DISMISSED THE APPEAL FILED BY THE ASSESSEE. 6. WE HAVE HEARD THE LD. DR AND PERUSED THE RELEVANT MATERIALS ON RECORD. IT IS WELL SETTLED THAT IN ORDER TO DISCHARGE THE ONUS TO PROVE THE CASH CREDITS, THE ASSESSEE MUST PROVE THE FOLLOWING: (I) THE IDENTITY OF THE CREDITOR, (II) THE CAPACITY OF THE CREDITOR TO ADVANCE MONEY; AND (III) THE GENUINENESS OF TRANSACTION. IN THE INSTANT CASE, THE ASSESSEE HAS FAILED TO DISCHARGE ITS ONUS. THE HONBLE SUPREME COURT HAS LAID DOWN IN KALEKHAN MOHAMMED ITA NO. 545/MUM/2015 4 HANIF VS. CIT 50 ITR 1 (SC) THAT THE ONUS IS ON THE ASSESSEE TO EXPLAIN TH E NATURE AND SOURCE OF CASH CREDITS, WHETHER IT STANDS IN THE ASSESSEES ACCOUNT OR IN THE ACCOUNT OF A THIRD PARTY. ALSO IN THE CASE OF GOVINDARAJULU VS. CIT 34 ITR 807 (SC) AND LAKHMICHAND VS. CIT 35 ITR 416 (SC), IT HAS BEEN HELD THAT WHERE AN ASSESSEE HAS FAILED TO PROVE SATISFACTORILY THE SOURCE AND NATURE OF CERTAIN AMOUNTS OF CASH RECEIVED DURING THE ACCOUNTING YEAR, THE ASSESSING OFFICER IS ENTITLED TO DRAW THE INFLUENCE THAT THE RECEIPTS ARE OF AN INCOME NATURE. RESPECTFULLY FOLLOWING THE ABOVE JU DGMENTS , WE UPHOLD THE ORDER OF THE LD. CIT(A). 7. IN THE RESULT, THE APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 30/08/2017. SD/ - SD/ - (MAHAVIR SINGH) (N.K. PRADHAN) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED: 30/08/2017 RAHUL SHARMA, SR. P.S. COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A) - 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE . BY ORDER, //TRUE COPY// (DY./ASSTT. REGISTRAR) ITAT, MUMBAI