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ITA 579/AHD/2006

• Counselvise Citation: [2009] 115 COUNSELVISE.COM (IT) 1796 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 9 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-12-2009
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 17-12-2009
• Assessment Year: 2002-2003
• Appeal Filed On: 07-03-2006
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: M C PANDIT
• Assessee Lawyers: ASHEEM THAKKAR
• Keywords: Opportunity of being heard; Additional evidence
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH AHMEDABAD (BEFORE SHRI BHAVNESH SAINI, JM AND N. S. SAINI, AM ) ITA NO.579/AHD/2006 A. Y.: 2002-03 AVICHAL PRESS PVT. LTD., 703/2, GIDC ESTATE, VITHAL UDYOGNAGAR, TALUKA ANAND, DIST. ANAND PA NO. AACCA 2269 G VS THE A. C. I. T., ANAND CIRCLE, S. P. COMPLEX, MAYFAIR ROAD, ANAND (APPELLANT) (RESPONDENT) APPELLANT BY SHRI ASHEEM THAKKAR, AR RESPONDENT BY SHRI M. C. PANDIT, DR DATE OF ORDER RESERVED: O R D E R PER BHAVNESH SAINI: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE CIT(A)-IV, BARODA DATED 2. 01.2006 FOR THE ASSESSMENT YEAR 2002-03 CHALLENGING THE ADDITION OF RS.70,50,000/- IN RESPECT OF UNEXPLAINED DEPOSITS U/S 68 OF THE INCOM E TAX ACT. 2. WE HAVE HEARD THE LEARNED REPRESENTATIVES OF BOT H THE PARTIES, PERUSED THE FINDINGS OF THE AUTHORITIES BELOW AND T HE MATERIAL ON RECORD. 3. DURING THE YEAR, THE ASSESSEE HAS SHOWN UNSECURE D LOANS OF RS.40,50,000/- FROM ONE MRS. NEENAKSHI YOGENDRA PAT EL AND RS.30,00,000/- FROM ONE SHRI KAUSHIK C. PATEL. AT T HE TIME OF ASSESSMENT PROCEEDINGS, THE ASSESSEE WAS REQUIRED T O FURNISH CONFIRMATIONS FROM THE SAID PARTIES. IN RESPONSE, I NSTEAD OF SUBMITTING THE CONFIRMATIONS FROM THE ABOVE MENTIONED PARTIES, THE ASSESSEE- COMPANY SUBMITTED CONFIRMATIONS SIGNED BY ITS MANAG ING DIRECTOR. SINCE THE IDENTITY AND CREDITWORTHINESS OF THE DEPOSITORS WAS NOT PROVED, ITA NO. 579/AHD/2006 AVICHAL PRESS PVT. LTD. 2 THEREFORE, THE AO TREATED BOTH THE AMOUNTS AS UNEXP LAINED AND ADDED THE SAME TO THE INCOME OF THE ASSESSEE-COMPANY U/S 68 OF THE INCOME TAX ACT. 4. AT THE APPELLATE STAGE, THE ASSESSEE FILED CONFI RMATIONS OF BOTH THE CREDITORS DATED 16 TH MARCH 2005 AND 15 TH MARCH 2005. IT WAS STATED THAT THE SAME ARE OBTAINED NOW AND BECAUSE BOTH OF THEM WERE PRE-OCCUPIED, THEREFORE, MANAGING DIRECTOR OF THE ASSESSEE-COMPAN Y FILED CONFIRMATION ON THEIR BEHALF. IT WAS SUBMITTED THAT LOANS WERE G IVEN THROUGH BANK DRAFTS THROUGH NRO/NRE ACCOUNTS WITH THE CITY BANK. COPIES OF THE BANK STATEMENT WERE FURNISHED BEFORE THE LEARNED CI T(A). COPIES OF THE PASSPORT HELD BY THEM WERE ALSO FURNISHED. IT WAS S UBMITTED THAT SINCE THE PARTIES ARE NOT CLOSE RELATIVES OF THE ASSESSEE -COMPANY, THEREFORE, THE ASSESSEE PROVED IDENTITY AND CREDITWORTHINESS OF TH E CREDITORS AND THEREFORE, THE ADDITION BE DELETED. THE LEARNED CIT (A) HOWEVER, DID NOT ACCEPT THE CONTENTION OF THE ASSESSEE BECAUSE SUBST ANTIAL AMOUNT AS ALLEGED HAVE BEEN RECEIVED AS LOANS, THEREFORE, THE ASSESSEE SHOULD HAVE PROVED THE IDENTITY OF THE LENDERS AND THEIR CREDIT WORTHINESS WHICH HAVE NOT BEEN PROVED IN THIS CASE. THE LEARNED CIT(A) AL SO NOTED THAT THERE WAS NO SENSE IN TAKING ADVANCE FROM UK RESIDENTS TH ROUGH OVERDRAFT AND THAT SINCE THERE IS A DOUBT IN RECEIPT OF THE GENUI NE LOANS, THEREFORE, ADDITIONS SHOULD HAVE BEEN CONFIRMED. THE LEARNED C IT(A) ALSO NOTED THAT THE ASSESSEE FILED ALL ADDITIONAL EVIDENCES AT THE APPELLATE STAGE WHICH WERE NOT FILED BEFORE THE AO IN SPITE OF GIVING OPP ORTUNITY OF BEING HEARD. THEREFORE, THE SAME CANNOT BE ADMITTED UNDER RULE 4 6A OF THE INCOME TAX RULES. THE APPEAL OF THE ASSESSEE WAS ACCORDING LY DISMISSED. 5. THE LEARNED COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW AND REFERRED TO D OCUMENTS FILED IN THE PAPER BOOK AND SUBMITTED THAT CONFIRMATION LETTERS WERE SIGNED BY THE MANAGING DIRECTOR OF THE ASSESSEE-COMPANY WHO IS RE LATIVE OF THE ITA NO. 579/AHD/2006 AVICHAL PRESS PVT. LTD. 3 CREDITORS. HE HAS SUBMITTED THAT ASSESSMENTS WERE T AKEN UP AT THE FAG END OF THE YEAR BY ISSUING NOTICES IN OCTOBER 2003, DECEMBER 2003, OCTOBER 2004 AND NOVEMBER 2004 AND THE AO DID NOT G IVE SUFFICIENT OPPORTUNITY OF HEARING TO THE ASSESSEE AND THE ASSE SSMENTS GONE TIME BARRED IN 2005 AND, THEREFORE, THE LEARNED CIT(A) S HOULD HAVE ADMITTED THE ADDITIONAL EVIDENCES. 6. ON THE OTHER HAND, THE LEARNED DR STRONGLY RELIE D UPON THE ORDERS OF AUTHORITIES BELOW AND SUBMITTED THAT THE ASSESSE E EVEN DID NOT FILE CONFIRMATION BEFORE THE AO. THEREFORE, GENUINE CRED ITS ARE NOT PROVED, THEREFORE AUTHORITIES BELOW WERE JUSTIFIED IN MAKIN G AND CONFIRMING THE ADDITIONS. 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND THE MATERIAL AVAILABLE ON RECORD. THE RECORD SHOWS THAT THE ASSE SSEES COUNSEL HAS RAISED ADDITIONAL GROUND OF APPEAL CHALLENGING THE ORDER OF THE LEARNED CIT(A) IN NOT ADMITTING THE ADDITIONAL EVIDENCES UN DER RULE 46A OF THE INCOME TAX RULES. HOWEVER, WE MAY NOTE THAT THE LEA RNED COUNSEL FOR THE ASSESSEE DID NOT ARGUE ON THIS ADDITIONAL GROUN D OF APPEAL AND HAS NOT SUBMITTED ANYTHING AS TO WHY THIS ADDITIONAL GR OUND SHOULD BE ADMITTED. SINCE THIS APPLICATION IS PART OF THE APP EAL WHICH IS NOT AT ALL ARGUED BY THE LEARNED COUNSEL FOR THE ASSESSEE, THE REFORE, WE DEEM IT FIT AND PROPER TO REFER THE SAME IN THIS ORDER. IT IS A DMITTED FACT THAT THE AO AT THE ASSESSMENT STAGE REQUIRED THE ASSESSEE TO FI LE THE CONFIRMATIONS FROM BOTH THE LENDERS TO PROVE THE GENUINE CREDITS. THE ASSESSEE HOWEVER, DID NOT FILE ANY CONFIRMATION LETTER FROM BOTH THE LENDERS BEFORE THE AO. THE MANAGING DIRECTOR OF THE ASSESSEE-COMPA NY HAS HOWEVER, FILED THE CONFIRMATIONS ON BEHALF OF THE LENDERS WH ICH IS NOT SUFFICIENT COMPLIANCE UNDER THE LAW. SINCE CREDIT ENTRIES APPE ARED IN THE BOOKS OF ACCOUNTS OF THE ASSESSEE, THEREFORE, ONUS IS UPON T HE ASSESSEE TO PROVE THE IDENTITY OF THE CREDITORS, THEIR CREDITWOR THINESS AND GENUINENESS ITA NO. 579/AHD/2006 AVICHAL PRESS PVT. LTD. 4 OF THE TRANSACTIONS AS REQUIRED U/S 68 OF THE INCOM E TAX ACT. THUS, THE ASSESSEE HAS FAILED TO PROVE ANY OF THE ABOVE CONDI TIONS BEFORE THE AO. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE AO TOOK UP THE ASSESSMENTS AT THE FAG END OF THE YEAR AND HAS NOT GIVEN ANY OPPORTUNITY TO THE ASSESSEE TO FILE CONFIRMATIONS FROM THE CRED ITORS. THE ABOVE CONTENTION OF THE ASSESSEE IS FACTUALLY INCORRECT B ECAUSE THE ASSESSEE ITSELF FILED CONFIRMATIONS THROUGH THE MANAGING DIR ECTOR OF THE ASSESSEE- COMPANY AT THE ASSESSMENT STAGE. THEREFORE, NOTHING HAS PREVENTED THE ASSESSEE FROM FILING CONFIRMATION BEFORE THE AO ON BEHALF OF THE LENDERS. THE ARGUMENTS OF THE LEARNED COUNSEL FOR THE ASSESS EE IS THUS REJECTED THAT NO PROPER OPPORTUNITY IS GIVEN TO FILE CONFIRM ATION OF THE LENDERS AT THE ASSESSMENT STAGE. DURING THE COURSE OF ARGUMENT S WE HAVE SPECIFICALLY ASKED THE LEARNED COUNSEL FOR THE ASSE SSEE IF THE ASSESSEE FILED ANY APPLICATION UNDER RULE 46 A OF THE INCOME TAX RULES BEFORE THE LEARNED CIT(A) FOR ADMISSION OF ADDITIONAL EVIDENCE S, HOWEVER, THE LEARNED COUNSEL FOR THE ASSESSEE WAS NOT ABLE TO AN SWER THIS QUERY DURING THE COURSE OF ARGUMENTS. IT, THEREFORE, STAN DS ESTABLISHED THAT THE ASSESSEE DID NOT TAKE ANY RECOURSE BEFORE THE LEARN ED CIT(A) FOR ADMISSION OF ANY ADDITIONAL EVIDENCE AT THE FIRST A PPELLATE STAGE. IN THE PAPER BOOK ALSO NO SUCH AVERMENTS ARE CONTAINED AND NO COPY OF ANY SUCH APPLICATION IS ALSO FILED. THEREFORE, THERE WA S NO REASON FOR THE LEARNED CIT(A) TO HAVE ADMITTED ANY ADDITIONAL EVID ENCES IN THE ABSENCE OF ANY REQUEST ON BEHALF OF THE ASSESSEE. MOREOVER, THERE ARE CERTAIN CONDITIONS PROVIDED UNDER RULE 46 A OF THE INCOME T AX RULES UNDER WHICH LEARNED CIT(A) COULD ADMIT ADDITIONAL EVIDENC ES, OTHERWISE, THE ASSESSEE SHALL NOT BE ENTITLED TO PRODUCE ANY EVIDE NCES BEFORE HIM WHICH WAS NOT FILED BEFORE THE AO AT THE ASSESSMENT STAGE . NONE OF THE CONDITIONS OF RULE 46A OF THE INCOME TAX RULES HAVE BEEN SATISFIED IN THIS CASE. THE ASSESSEE, DESPITE GIVING REASONABLE OPPORTUNITY OF BEING HEARD HAS NOT EVEN FILED CONFIRMATION LETTERS FROM THE LENDERS AT THE ASSESSMENT STATE. THEREFORE, THERE WAS NO INFIRMITY IN THE ORDER OF THE ITA NO. 579/AHD/2006 AVICHAL PRESS PVT. LTD. 5 AO. THEREFORE, THE LEARNED CIT(A) WAS JUSTIFIED IN CONFIRMING THE ADDITION. SINCE THE ENTIRE EVIDENCES WERE FILED BEF ORE THE LEARNED CIT(A) AND CONDITIONS OF RULE 46A HAVE NOT BEEN SATISFIED, THEREFORE, IN THE ABSENCE OF ANY REQUEST FOR ADMISSION OF ADDITIONAL EVIDENCES, THE LEARNED CIT(A) RIGHTLY DID NOT EXERCISED SUCH JURISDICTION IN THE MATTER. THE LEARNED COUNSEL FOR THE ASSESSEE LASTLY ARGUED THAT LET THE MATTER MAY FURTHER BE EXAMINED BY THE AUTHORITIES BELOW BECAUS E THE ENTIRE EVIDENCES ARE NOW FILED IN THE PAPER BOOK. HOWEVER , HE HAS NOT EXPLAINED ANY REASONS AS TO WHY SUCH POWER SHOULD B E EXERCISED BY THE TRIBUNAL AT THIS STAGE WHEN THE ASSESSEE DELIBERATE LY OMITTED TO AVAIL THE REMEDY PROVIDED UNDER THE LAW. IN THE ABSENCE OF AN Y REASONABLE AND COGENT REASONS, WE ARE UNABLE TO INTERFERE WITH THE ORDERS OF THE AUTHORITIES BELOW. WE ARE, THEREFORE, NOT INCLINED TO ADMIT THE ADDITIONAL GROUND AND ACCORDINGLY CONFIRM THE ORDER OF THE LEA RNED CIT(A) AND DISMISS THE APPEAL OF THE ASSESSEE. 8. AS A RESULT, THE APPEAL OF THE ASSESSEE IS DISMI SSED. ORDER PRONOUNCED ON 18 TH DEC, 2009 SD/- SD/- (N. S. SAINI) ACCOUNTANT MEMBER (BHAVNESH SAINI) JUDICIAL MEMBER DATE : 18-12-2009 LAKSHMIKANT/- ITA NO. 579/AHD/2006 AVICHAL PRESS PVT. LTD. 6 COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE BY ORDER D Y. REGISTRAR, ITAT, AHMEDABAD