Sh. Pramod Kumar Arora, Amritsar. V. The Dy Commissioner of Income Tax, Amritsar.

ITA 55/ASR/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 7861 (ITAT-AMRITSAR)
• Duration Of Justice: 6 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-08-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 29-06-2017
• Assessment Year: 2012-2013
• Appeal Filed On: 27-01-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAHUL DHAWANLD
• Assessee Lawyers: K R JAIN LD
• Keywords: Unexplained cash credit; Opportunity of being heard; Onus to prove
• Section: 131; 68

Judgement Text

IN THE INCOME TAX APPELLATE T RIBUNAL AMRITSAR BENCH; AMRITSAR BEFORE SH.T.S. KAPOOR, ACCOUNTANT MEMBER AND SH.N.K.CHOUDHRY, JUDICIAL MEMBER I.T.A. NO.55(ASR)/2017 ASSESSMENT YEAR:2012-13 SH. PARMOD KUMAR ARORA PROP. M/S DELITE AGENCIES, 117- THE MALL, AMRITSAR. PAN:AALTS-8574J VS. DY. CIT, CIRCLE-III, AMRITSAR. (APPELLANT) (RESPONDENT) APPELLANT BY: SH. K.R. JAIN, (LD. A DV.) RESPONDENT BY: SH. RAHUL DHAWAN (LD. DR) DATE OF HEARING: 22.08.2017 DATE OF PRONOU NCEMENT:24.08.2017 ORDER PER N. K. CHOUDHRY : THE INSTANT APPEAL HAS BEEN FILED BY THE ASSESSEE, BY FEE LING AGGRIEVED AGAINST THE ORDER DATED 01.11.2016 PASSED I N APPEAL NO.08/2015-16 BY THE CIT(A), AMRITSAR FOR ASST. YEAR:2 012-13. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPE AL. 1. THAT THE ORDER OF THE LEARNED DEPUTY COMMISSI ONER OF INCOME TAX MAKING AN ADDITION U/S 68 ON ACCOUNT OF ALLEGED CASH CREDITS OF RS.3,18,960/- IS WRONG ILLEGAL AND AGAINST FACTS AN D LIKEWISE CIT(A) IS NOT JUSTIFIED WHILE CONFIRMING THE SAME. 2. THAT THE LD. CIT(A) HAS NOT APPRECIATED THE FAC TS OF THE CASE, EXPLANATION OFFERED, AFFIDAVIT FILED, EVIDENCE IN S UPPORT OF THE SALE TO VARIOUS PARTIES AND PROCEEDED TO MAKE THE ADDITION ARBITRARILY. 3. THAT THE LD. CIT(A) HAS NOT APPRECIATED THE CE RTIFICATE ISSUED BY EXCIDE & TAXATION COMMISSIONER AND DETAILS OF ICC T RANSACTIONS WHICH CLEARLY INDICATES THAT GOODS HAVE CROSSED SAL E TAX BARRIER AND SALES HAVE BEEN EFFECTED. 3. THAT LD. CIT(A) HAS ERRED IN LAW AND ON FACTS WHILE HOLDING THAT TRADE RECEIPTS AS CASH CREDIT. 4. THAT LD. CIT(A) HAS ERRED IN LAW AND ON FACTS WHILE HOLDING THAT TRADE RECEIPTS AS CASH CREDIT. ITA NO.55(ASR)/2017 ASST. YEAR: 2012-13 2 5. THAT LEARNED CIT(A) HAS NOT CONSIDERED THE CAS E LAW RELIED UPON DURING THE COURSE OF APPELLATE PROCEEDINGS IN A PRO PER AND JUDICIAL MANNER. 6. THAT THE LEARNED DCIT HAS ERRED IN LAW AND ON FACTS WHILE NOT EXCEEDING THE REQUEST TO SUMMON THE PARTIES U/S 131 AND THEREBY DENYING THE PROPER OPPORTUNITY OF BEING HEARD. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE FUR NISHED THE RETURN OF INCOME ON 30.04.2013 AT RS.3,06,47,050/- AN D THE SAME WAS PROCESSED U/S 143(1) OF THE INCOME TAX ACT, THEREAFTER , THE CASE WAS SELECTED FOR SCRUTINY THROUGH CASS AND FURTHER THE ASSESSMENT ORDER WAS PASSED. THE ASSESSING OFFICER WHILE CONSIDERING TH E CASE OF THE ASSESSEE ASKED TO FURNISH HIS BANK ACCOUNTS STATEMENT BECAU SE THERE WERE NUMEROUS DEPOSITS INCLUDING CASH DEPOSITS IN THE BANK ACCOUNTS OF ASSESSEE AND SPECIFICALLY, THE ASSESSING OFFICER ON PE RUSAL OF CASH BOOK RELATES THE ASSESSEE SHOWN RECEIPT OR CASH TO THE TUNE OF RS.3,18,960/- FROM SOME OF THE PARTIES ON VARIOUS DATES, HOWEVER, IT WAS EXPLAINED BY THE ASSESSEE THAT THESE PARTIES WERE SUNDR Y DEBTORS OF ASSESSEE AND CASH HAS BEEN RECEIVED FROM THEM AGAINST TH EIR OUTSTANDING BALANCES. ON NON SATISFACTION TO THE REPLY OF THE ASSESSEE, THE ASSESSING OFFICER CONCLUDED THAT THE ASSESSEE COULD NOT F URNISH ANY SATISFACTORY EXPLANATION IN RESPECT OF CASH CREDIT IN H IS BOOKS AMOUNTING TO RS.3,18,960/-, THEREFORE, THE SAME IS TR EATED AS UNEXPLAINED CASH CREDIT AND ADDED TO THE TOTAL INCOME OF THE ASSESSEE U/S 68 OF THE INCOME TAX ACT. THE ASSESSING OFFICER ALSO AD DED RS.9,831/- IN THE INCOME OF THE ASSESSEE. ITA NO.55(ASR)/2017 ASST. YEAR: 2012-13 3 4. FEELING AGGRIEVED AGAINST THE ORDER PASSED BY THE LD . ASSESSING OFFICER, THE ASSESSEE PREFERRED THE FIRST APPEAL BEFORE L D. CIT(A), AND LD. CIT(A) WHILE DISMISSING THE APPEAL OF THE ASSESSEE U PHELD THE ORDER PASSED BY THE A.O BY CONCLUDING AS UNDER: 6. I HAVE GONE THROUGH THE GROUNDS OF APPEAL, SUB MISSION & THE ASSESSMENT ORDER. THE ADDITIONS HAVE BEEN MADE ON ACCOUNT OF CASH REC EIVED FROM VARIOUS DEBTORS DURING THE YEAR. M/S SHAKTI INDUSTR IES DENIED MAKING ANY PAYMENT TO THE APPELLANT DURING THE YEAR. THE SAME HAS BEEN CREDITED ON DIFFERENT DATES OF MAY 2011. THE APPELLANT HAS CONT ENDED THAT IT HAS BEEN RECEIVED AGAINST THE MATERIAL SUPPLIED IN YEAR 2009 . SINCE THE PARTY HAS DENIED HAVING MADE ANY PAYMENT, IT HAS RIGHTLY BEEN ADDED BACK. AS FAR AS OTHER DEBTORS ARE CONCERNED, NONE HAS REP LIED TO NOTICE UNDER SECTION 133(6). FURTHER ALL DEBTORS ARE VERY FAR OF PLACES EITHER IN MADHYA PRADESH AND MAHARASHTRA. IT IS STRANGE THAT THE DEBTORS HAVE REPAID THE AMOUNT ON DIFFERENT DATES ONLY IN THE MO NTH OF APRIL, MAY & JUNE 2011, THAT TOO IN QUICK SUCCESSION WHEN NO MON EY IS RECEIVED SINCE 2009. THUS THE CREDIT WORTHINESS AND GENUINENESS OF TRANSACTIONS IS NOT PROVED AND THE ACTION OF AO IS CONFIRMED. THE ASSESSEE, FURTHER ASSAILED THE ORDER BEFORE THE TRIBU NAL BY FILING THE INSTANT APPEAL AND IN SUPPORT OF HIS CASE SUB MITTED THAT THE ASSESSEE ENGAGED IN THE BUSINESS OF CYCLE PARTS AND SUPPLIED THE GOODS TO THE FOLLOWING PARTIES. (I) JAIN CYCLE TRADERS, JABALPUR (II) VARDHMAN TYRE CYCLE CENTRE, AURANGABAD (III) VIKAS CYCLE STORE, PHURUNGI (IV) SHAKTI INDUSTRIES, INDORE THE COPIES OF ACCOUNT AND DETAILS WERE ALSO FILED BEFOR E THE AUTHORITIES BELOW BY MENTIONING THE DATES, BILL NOS. A MOUNTS AND NAME OF TRANSPORTERS AND GR NOS. AND ITS DATES. THE ASSE SSEE FURTHER SUBMITTED THAT AN AFFIDAVIT TO SUPPORT THE ABOVE SUBMI SSION WAS ALSO FILED BEFORE THE LD. A.O AS WELL AS CIT(A) AND EVEN O THERWISE IT IS ITA NO.55(ASR)/2017 ASST. YEAR: 2012-13 4 MATTER OF RECORD THAT THE ASSESSEE SENT THE SAID GOODS THRO UGH TRANSPORT AND THE GOODS SENT TO THE PARTIES HAVE CROSSED THE SALE TAX BARRIER AS PER CERTIFICATE ISSUED AND EVEN OTHERWISE DET AILS OF ICC TRANSACTIONS CLEARLY INDICATES THAT GOODS HAVE CROSSED SALE TA X BARRIER, THEREFORE, THE CONTENTION OF ONE OF THE PARTIES I.E., SHAKTI INDUSTRIES THAT THEY DO NOT HAVE ANY BUSINESS WITH THE SAID PARTY (THE ASSESSEE) AND NOT HAVING ANY ACCOUNT FOR THE F.YS. 2010-11 & 201 1-12 IS FACTUALLY NOT CORRECT. IT WAS FURTHER SUBMITTED BY THE L D. AR THAT ALL TRANSACTIONS HAVE DULY BEEN PROVED BY FILING AFFIDAVIT OF THE ASSESSEE AS WELL AS BY COPY OF BALANCE SHEET AS WELL AS ICC TRANSA CTION DETAILS AS WELL CONFIRMATION OF THE EXCISE AND TAXATION DEPART MENT. 5. ON THE CONTRARY, THE LD. DR SUBMITTED THAT THE ORDER PASSED BY THE LD. CIT(A) DOES NOT DESERVE TO BE SET ASIDE BECAUSE T HE SAME HAVING BEEN PASSED IN THE FACTS AND CIRCUMSTANCES OF THE CASE BECAUSE THE ASSESSEE HAS FAILED TO BRING THE PARTIES BEFORE THE ASSESSING OFFICER TO SUBSTANTIATE HIS CLAIM AND EVEN OTHERWISE THE OBSERVATION OF THE ASSESSING OFFICER IS RIGHT TO THE EXTENT THE GOODS H AVE BEEN SUPPLIED BY THE ASSESSEE IN 2009, HOWEVER, THE PAYMENTS H AVE BEEN SHOWN AS RECEIVED IN 2011 WHICH CREATES THE DOUBTS ON THE GENUINENESS OF THE TRANSACTIONS AND EVEN OTHER WISE FOR T HE SAKE OF ARGUMENT, IT IS ACCEPTED THAT SALE IS GENUINE BUT STI LL THE AMOUNT UNDER CONSIDERATION CANNOT BE SUBJECT TO THE LINK WITH T HE SALE BECAUSE THE ONUS WAS UPON THE ASSESSEE TO ESTABLISH THE GENUINENESS OF THE ITA NO.55(ASR)/2017 ASST. YEAR: 2012-13 5 TRANSACTIONS AND TO EXPLAIN CASH CREDIT WHICH THE ASSESSEE HAS FAILED TO FURNISH SATISFACTORY EXPLANATION IN RESPECT TO CASH CREDI T IN HIS BOOKS WHICH REMAINED UNEXPLAINED, THEREFORE, THE ORDER PASSE D BY THE AUTHORITIES BELOW DESERVES TO BE CONFIRMED. 6. WE HAVE GONE THROUGH WITH THE FACTS AND CIRCUMSTANCES OF THE CASE AS IT REFLECTS FROM THE ORDER PASSED BY THE CIT(A) I TSELF THAT THE ASSESSEE HAD SHOWN DATES, BILL NOS. AMOUNTS AND NAME OF TRANSPORTERS AND GR NOS. AND ITS DATES THROUGH WHOM THE GOODS HAVE BEEN SUPPLIED AND FURTHER DETAILS OF THE PAYMENTS RECEI VED FROM THE RESPECTIVE PARTIES AND FURTHER AFFIDAVIT TO SUPPORT THE SUBMISSIONS AS WELL AS THE ASSESSEE ALSO REPLIED TO THE ASSESSING OFFICER QUA RRY TO FILE COPIES OF ACCOUNT OF THE ABOVE PARTIES BY SUBMITTING HIS L ETTER DATED 25 TH FEB.2015 INFORMING THE AO THAT HE HAS REQUESTED TO P ARTIES THROUGH SPEED POST TO CONFIRM THEIR ACCOUNT AND EVEN OT HERWISE IT REFLECTS FROM THE ORDER PASSED BY THE LD. CIT(A) THAT T HE ASSESSING OFFICER WAS ALSO OPTED TO SEND NOTICE U/S 136 (6) TO THE PARTIES CONCERNED OF THE ASSESSEE AND EXCEPT SHAKTI INDUSTRIES NEIT HER ANY OTHER PARTY RESPONDED TO THE NOTICE OF THE A.O NOR A .O ENFORCED THEIR PRESENCE. IT IS A MATTER OF FACT THAT THE ASSESSEE SPECIFICA LLY ASKED THE A.O. TO SUMMON SHAKTI INDUSTRY, INDORE ALONG WITH BO OKS OF ACCOUNT PURCHASE DETAILS U/S 131 EVEN IT WAS ALSO OFFERED BY TH E ASSESSEE THAT THE ASSESSEE READY TO PAY NECESSARY CHARGES AND FURTHER IT W AS ALSO REQUESTED TO SUMMON THE TRANSPORT COMPANY M/S HIND RATTAN LOGISTICS, SHAHED BHAGAT SINGH ROAD, SHERAWALA GATE, AMRITSAR ITA NO.55(ASR)/2017 ASST. YEAR: 2012-13 6 REGARDING BOOKING OF GOODS VIDE INVOICE NO.269 DATED 25 TH DECEMBER, 2009, GR. NO. 18389 DATED 25.12.2009 AND VIDE INVOI CE NO. 253, GR. NO.15934 DATED 7.11.2009 THROUGH THE SAID TRANSPORTE R. HOWEVER, THE LD. ASSESSING OFFICER NOT PAID ANY HEAD TO THE REQUEST OF ASSESSEE AND WRONGLY DETERMINED THAT THE ASSESSEE HAS MISERABLY FAILED TO DISCHARGE THE ONUS CAST UPON HIM U/S 68. FURTHER IT WAS OB SERVED BY THE ASSESSING OFFICER THAT AFTER AVAILING REPEATED OPPOR TUNITIES PROVIDED TO THE ASSESSEE OVER A PERIOD OF THREE MONTHS TO EXPLAIN CASH CREDITS IN HIS BOOKS ON 28 TH MARCH, 2015 BUT BECAUSE 11 DAYS LEFT FOR TIME BARRING DATE, THEREFORE, THE ASSESSEE HAS NOW REQUE STED THE DEPARTMENT TO SUMMON ALL THESE OUT STATION PARTIES (AS PRIMARY WITNESSES) WHICH ARE AT THE OUTSTATION OF MORE THAN 500 K.M. FROM AMRITSAR AND TRANSPORT COMPANY FOR VERIFICATION. THEREF ORE, THE ASSESSING OFFICER REMINDED THE SEC.68 OF THE ACT BY MENTIO NING THAT THE BURDEN OF PROOF IS ON THE ASSESSEE TO PROVE SATISFACTOR Y THE SOURCES AND NATURE OF CERTAIN AMOUNT RECEIVED DURING THE ACCOUNTING YEAR AND IF THE ASSESSEE COULD NOT OFFER A SATISFACTORY EX PLANATION, THEN THE ASSESSING OFFICER IS ENTITLED TO DRAW THE ADVERSE INFERENCE. IN OUR CONSIDERED OPINION, THE CONCLUSION OF THE ASSESSING O FFICER WAS NOT RIGHT BECAUSE EVEN OTHERWISE HE FAILED TO GIVE OPPORTUNITY TO CROSS EXAMINATION, THE OWNER OF SHAKTI INDUSTRIES WHO F ILED THE REPLY. AS IT IS NOT IN CONTROVERSY THAT THE ASSESSEE HAS SENT GOODS THROUGH TRANSPORT COMPANIES AND THE SAME ALSO CROSSED THE SALE TAX BARRIER, ICC TRANSACTIONS AND EVEN OTHERWISE, THE DEPARTMENT HAS NOT DOUBTED ITA NO.55(ASR)/2017 ASST. YEAR: 2012-13 7 THE DETAILS OF THE BILL NOS. AMOUNTS AND THE TRANSPORTE RS AND GR NOS. AS WELL CONFIRMATION OF THE EXCISE AND TAXATION DEPARTM ENT FOR CROSSING THE BARRIER, IN THAT EVENTUALITY THE ASSESSEE DIS CHARGED HIS ONUS PRIMA FACIE BECAUSE HE CAN ONLY REQUEST THE PARTIES TO FURNISH THE PAN AND/OR ACCOUNT DETAILS OF THE RESPECTIVE PARTIES, BUT IT IS THE POWER AND PREROGATIVE OF THE REVENUE OFFICERS TO COMPE L THE PARTIES TO PROVIDE THE NECESSARY DETAILS, IF ANY, REQUIRED AND EVE N OTHERWISE FROM THE REPLY FILED BY THE SHAKTI INDUSTRIES, IT HAS PROVIDED THE PAN NO. BUT OTHER THREE PARTIES HAVE NOT RESPONDED TO THE NOTICE OF THE ASSESSING OFFICER AND THE ASSESSING OFFICER EVEN OTHERWISE DID NOT TRY TO GET ENFORCED THE PRESENCE OF THE OTHER THREE PARTIE S IN THE ASSESSMENT PROCEEDINGS. WE ARE OF THE CONSIDERED OPINION, THAT IT WAS NECESSARY FOR THE DEPARTMENT THAT IT SHOULD HAVE MAKE AVAILABLE THE OW NER OF SHAKTI INDUSTRIES FOR CROSS EXAMINATION AS THE DEPARTMENT FAILE D, THEREFORE, IT AMOUNTS TO DENIAL OF JUSTICE AND AGAINST THE RULE OF AUDI ALTERAM PARTEM AND THE ONUS ALSO SHIFTED ON THE DEPARTMENT AND ACCOR DING TO THE APEX COURT JUDGMENT IN THE CASE OF MEHTA PARIKH & COMPANY VS. CIT, BOMBAY 30 ITR 181 AS IN THE SAID CASE, THE BOOKS OF THE APPELLANT WERE ACCEPTED AND ENTRIES THEREIN WERE NOT CH ALLENGED AND NEITHER FURTHER ACCOUNTS NOR VOUCHERS WERE CALLED FOR, AN D THE PERSONS WHO GAVE THE AFFIDAVITS WERE NEVER CROSS EXAMINED. IT WAS NOT OPEN TO THE REVENUE TO CHALLENGE THE CORRECTNESS OF THE CASH BOOKS ENTRIES OR THE STATEMENT MADE IN THE AFFIDAVITS. ITA NO.55(ASR)/2017 ASST. YEAR: 2012-13 8 RESPECTFULLY FOLLOWING THE RATIO OF AFORESAID JUDGMENT , IT IS CLEAR FROM THE FACTS THAT ENTRIES AS HAVE BEEN SHOWN BY THE A SSESSEE IN THE FORM OF BILL NOS. DATES, AMOUNT AND NAME OF THE TRANSP ORTS AS WELL AS GR NOS. AND CERTIFICATE FROM THE ICC BARRIER TO THE EF FECT THAT THE GOODS HAVE BEEN CROSSED THE BOARDER AND EVEN OTHERWISE T HE AFORESAID FACTS AFFIRMED BY THE ASSESSEE BY FILING HIS AF FIDAVIT. THEREFORE, WE DO NOT HAVE ANY HESITATION TO CONCLUDE T HAT THE ASSESSEE RECEIVED THE AMOUNT IN LIEU OF GOODS SUPPLIED AN D THEREFORE, WAS ABLE TO DISCHARGE HIS ONUS TO EXPLAIN SATISFACTORY QU A CASH CREDITED IN HIS BOOKS OF ACCOUNTS AMOUNTING TO RS.3,18,96 0/- AND THE SAME IS HELD AS EXPLAINED CASH CREDIT. IN THE AFORESAID CONCLUSION THE APPEAL FILED BY THE ASSE SSEE IS ALLOWED. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 24.0 8.2017. SD/- SD/- (T. S. KAPOOR) (N.K.CHOUDHRY ) ACCOUNTANT MEMBER JUDICIA L MEMBER DATED:24.08.2017. /PK/ PS. COPY OF THE ORDER FORWARDED TO: (1) THE ASSESSEE: (2) THE (3) THE CIT(A), (4) THE CIT, (5) THE SR DR, I.T.A.T., TRUE COPY BY ORDER