ACIT-I, Kanpur V. Shri Sandeep Shukla, Kanpur

ITA 602/LKW/2011

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 83328 (ITAT-LUCKNOW)
• Duration Of Justice: 2 year(s) 11 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-09-2014
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 18-07-2014
• Assessment Year: misc
• Appeal Filed On: 10-10-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: S S GUPTA; A JAISWAL
• Keywords: Unexplained cash credit; Capital asset; Deemed to accrue or arise in india; Additional evidence; Cost of acquisition; Assessment record; Onus to prove
• Section: 54F; 142(1); 68; 148; 54; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH B , LUCKNOW BEFORE SHRI S UNIL KUMAR YADAV , JUDICIAL MEMBER AND SHRI. A. K. GARODIA , ACCOUNTANT MEMBER ITA NO S . 602 & 603/LKW/2011 ASSESSMENT YEAR S : 2006 - 07 & 2007 - 08 ASSTT. CIT - 1 KANPUR V. SHRI. S ANDEEP SHUKLA 62/154, HARBANS MOHAL KANPUR PAN: AQJPS4535M (APP ELL ANT) (RESPONDENT) C.O. NO.20/LKW/2012 [IN ITA NO. 603/LKW/2011 ASSESSMENT YEAR S : 2007 - 08 SHRI. SANDEEP SHUKLA 62/154, HARBANS MOHAL KANPUR V. ASSTT. CIT - 1 KANPUR PAN: AQJPS4535M (CROSS OBJECTOR ) (RESPONDENT) DEPARTMENT BY: SHRI. AMIT NIGAM, D.R. ASSESSEE BY: SHRI. S. S . GUPTA, C.A. & A. JAISWAL, ADVOCATE DATE OF HEARING: 18 07 2014 DATE OF PRONOUNCEMENT: 18 0 9 2014 O R D E R PER SUNIL KUMAR YADAV: THESE APPEALS ARE PR EFERRED BY THE REVENUE AGAINST THE RESPECTIVE ORDER OF THE LD. CIT(A) PERTAINING TO ASSESSMENT YEAR S 2006 - 07 AND 2007 - 08. 2 . THE ASSESSEE HAS ALSO FILED CROSS OBJECTION IN SUPPORT OF THE ORDER OF THE LD. CIT(A) PERTAINING TO ASSESSMENT YEAR 2007 - 08. SINCE THESE APPEALS AND CROSS OBJECTION WERE HEARD TOGETHER, THEY ARE BEING DISPOSED PRINT TO PDF WITHOUT THIS MESSAGE BY PURCHASING NOVAPDF ( HTTP://WWW.NOVAPDF.COM/ ) : - 2 - : OF BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. HOWEVER, WE PREFER TO ADJUDICATE THEM ONE AFTER THE OTHER. I.T.A. NO.602/LKW/2011: A.Y. 2006 - 07: 3 . THIS APPEAL IS PREFE RRED BY THE REVENUE AGAINST THE ORDER OF THE LD. CIT(A) ON THE FOLLOWING GROUNDS: - 1 . THE LD. COMMISSIONER OF INCOME TAX (APPEALS) - II, KANPUR HAS ERRED IN LAW AND ON FACTS IN ALLOWING EXEMPTION U/S 54F ON SALE OF HOUSE PROPERTY SITUATED AT BANGLORE, TREATING THE SAME AS RESIDENTIAL PROPERTY WITHOUT APPRECIATING THE FACTS BROUGHT ON RECORD BY THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS. 2 . THAT THE COMMISSIONER OF INCOME TAX (APPEALS) - II, KANPUR HAS ERRED IN LAW AND ON FACTS IN ALLOWING EXEM PTION U/S 54F ON SALE OF 'HOUSE PROPERTY AFTER ACCEPTING THE ADDITIONAL EVIDENCES DURING APPELLATE PROCEEDINGS, NO PROPER OPPORTUNITY HAS BEEN ALLOWED TO THE ASSESSING OFFICER TO EXAMINE THESE EVIDENCES AS PROVIDED UNDER RULE 46A OF THE INCOME TAX RULES 19 62. 3 . THAT THE ORDER OF THE LD. CIT (A) - II, KANPUR DATED 11.07.2011 NEEDS TO BE QUASHED AND THE ORDER DATED 28.11.2008 PASSED BY THE ASSESSING OFFICER BE RESTORED. 4 . THROUGH THESE GROUNDS, THE DISPUTE HAS BEEN RAISED WITH REGARD TO THE EXEMPTION GRANTED UNDER SECTION 54F OF THE INCOME - TAX ACT, 1961 (HEREINAFTER CALLED IN SHORT THE ACT'). 5 . THE FACTS IN BRIEF BORNE OUT FROM THE RECORD ARE THAT THE ASSESSEE HAS SOLD THE PROPERTY NO. 74 FOR RS. 76,86,000.00 AFTER DEDUCTING INDEXED COST OF ACQUISITION '6,00,000.00 X 497/426 AT RS. 7,00,000.00', N ET CAPITAL GAIN HAS BEEN WORKED OUT AT RS. 69,86,000.00. AFTER CLAIMING EXEMPTION UNDER SECTION 54 OF THE ACT NET CAPITAL GAIN HAS BEEN SHOWN FOR TAXATION AT RS. 22,58,000.00 WHICH IS AS UNDER : - PRINT TO PDF WITHOUT THIS MESSAGE BY PURCHASING NOVAPDF ( HTTP://WWW.NOVAPDF.COM/ ) : - 3 - : CAPITAL GAIN RS. 69,86,000.00 L ESS INVESTMENT IN RESIDENTIAL FLAT NO.GF - 1 GROUND FLOOR, VYSHANAVI ENCLAVE AT SITE NO.76, IDEAL HOME CO - OP. BUILDING SOCIETY LTD., BANGALORE RS. 30,00,000.00 ANOTHER LAND PURCHASED RS. 13,00,000.00 ADD: COST OF CONSTRUCTION RS. 4,28,000.00 TOTAL : RS. 47,28,000.00 RS. 47,28,000.00 NET CAPITAL RS. 22,58,000,00 6 . IN RESPONSE TO NOTICE UNDER SECTION 148 OF THE ACT, THE ASSESSEE FILED A LETTER STATING THEREIN THAT THE RETURN FILED UNDER SECTION 139(1) OF THE ACT MAY BE TREATED AS RETURN INCOMPLIANCE TO NOTICE UNDER SECTION 148 OF THE ACT. THE ASSESSEE FILED THIRD (3RD) RETURN OF INCOME DECLARING TOTAL INCOME AT RS.48,17,611.00 WHICH INCLUDED CAPITAL GAIN OF RS.39,86,000.00 AFTER CLAIMING DEDUCTION UNDER SECTION 54F OF THE ACT AT RS.30, 00,000.00. THE ASSESSING OFFICER ISSUED NOTICES UNDER SECTION 143(2) & 142(1) OF THE ACT AND QUERIES WERE RAISED FROM TIME TO TIME. THE ASSESSING OFFICER ON A PERUSAL OF SALE DEED DATED 17 - 03 - 2006 FOR RS.76,86,000.00 WAS OF THE VIEW THAT PROPERTY NO.74, I DEAL HOUSE CO - OP. BUILDING SOCIETY LTD., BANGALORE SOLD ON 17 - 03 - 2006 WAS A PLOT OF LAND MEASURING 8540 SQ. FT. THUS, THE ASSESSEE WAS NOT ENTITLED FOR DEDUCTION UNDER SECTION 54 OF THE ACT WHICH IS AVAILABLE ONLY WHEN A RESIDENTIAL HOUSE IS SOLD. AS PER O RDER SHEET ENTRY DATED 21 - 10 - 2008, IT HAS BEEN ARGUED THAT DEDUCTION MAY BE ALLOWED TO THE ASSESSEE UNDER SECTION 54F OF THE ACT. THE ASSESSING OFFICER WAS OF THE OPINION THAT THE ASSESSEE WAS NOT ENTITLED TO DEDUCTION UNDER SECTION 54F OF THE ACT BECAUSE OF THE FACTS THAT THE ASSESSEE HAD ALREADY OWNED MORE PRINT TO PDF WITHOUT THIS MESSAGE BY PURCHASING NOVAPDF ( HTTP://WWW.NOVAPDF.COM/ ) : - 4 - : THAN ONE RESIDENTIAL PROPERTY DURING THE FINANCIAL YEAR 2005 - 06 RELEVANT TO THE ASSESSMENT YEAR 2006 - 07. 7 . WHILE MAKING THE DISALLOWANCE, THE ASSESSING OFFICER ALSO OBSERVED THAT THE RENTAL INCOME OF THE FOLLOWING PROPERTY HAS BEEN SHOWN BY THE ASSESSEE: - I ) 8/358, SHUKLA G ANJ, UNNAO II ) SHARE IN PROPERTY NO. 6/369, GOPI NATH PURAM, UNNAO. III ) SHARE IN PROPERT Y NO. 10/71, PONI ROAD, SHUKLA G ANJ, UNNAO. IV ) SHARE IN PROPERTY NO. 22/169, SHUKLA GANJ, UNNAO. V ) HOUSE NO . 77, 14TH MAIN ROAD, IDEAL HOMES TOWNSHIP , R.R. NAGAR, BANGALORE (PURCHASE ON 31 - 08 - 1998) - IT HAS BEEN SUBMITTED THAT THIS PROPERTY WAS LET OUT TO M/S SHIVRAJ TOBACCO CO. PVT. LTD. FOR THE BUSINESS PURPOSES. VI ) FLAT NO. G F - 1, GROUND FLOOR, VYSHNAVI ENCLAVE , SITE NO. 76, IDEAL HOMES CO - OP. BUILDING SOCIETY LTD., IDEAL HOMES TOWNSHIP, KENCHANAHALI, BANGALORE - SHOWN AS SELF OCCUPIED RESIDENTIAL PROPERTY. 8 . IN THE LIGHT OF THESE FACTS, THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE IS NOT ENTITLED FOR DEDUCTI ON UNDER SECTION 54F O F THE ACT IN VIEW OF THE REASON THAT THE ASSESSEE OWNED MORE THAN ONE RESIDENTIAL PROPERTY OTHER THAN THE PROPERTY PURCHASED, FOR WHICH DEDUCTION UNDER SECTION 54F OF THE ACT IS CLAIMED FOR G F - 1, GROUND FLOOR, VYSHNAVI ENCLAVE, SITE N O. 76, IDEAL HOMES CO - OP. BUILDING SOCIETY LTD., IDEAL HOMES TOWNSHIP, KENCHANAHALI, BANGALORE SHOWN AS SELF - OCCUPIED RESIDENTIAL PROPERTY. HE HAS ALSO MADE VERIFICATION WITH REGARD TO THE PROPERTY OWNED BY THE ASSESSEE. ACCORDINGLY, THE BENEFIT OF DEDUC TION UNDER SECTION 54F OF THE ACT WAS DISALLOWED. PRINT TO PDF WITHOUT THIS MESSAGE BY PURCHASING NOVAPDF ( HTTP://WWW.NOVAPDF.COM/ ) : - 5 - : 9 . AGGRIEVED, ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT(A) WITH THE SUBMISSION THAT THE PROPERTY REFERRED TO BY THE ASSESSEE IN FACT BELONG TO THE HUF. THE RENTAL INCOME OF THE PROPERTY WAS SHOWN PERPET UALLY BY THE ASSESSEES SHRI. SANDEEP SHUKLA AND SHRI. ASHISH SHUKLA HALF AND HALF IN THEIR CAPACITY OF INDIVIDUAL AFTER THE DEATH OF FATHER , SHRI. SURENDRA NATH SHUKLA. THE ASSESSEE HAS FILED WRITTEN SUBMISSION BEFORE THE LD. CIT(A) NARRATING THEREIN T HAT THE AFORESAID PROPERTIES BELONG TO THE HUF AND NOT THE ASSESSEE, THEREFORE, THE ASSESSEE IS ENTITLED FOR DEDUCTION UNDER SECTION 54F OF THE ACT. BEING CONVINCED WITH THE EXPLANATIONS OF THE ASSESSEE, THE LD. CIT(A) ACCEPTED THE CLAIM OF THE ASSESSEE A ND ALLOWED DEDUCTION UNDER SECTION 54F OF THE ACT. 10 . AGGRIEVED, THE REVENUE HAS PREFERRED AN APPEAL BEFORE THE TRIBUNAL WITH THE SUBMISSION THAT BEFORE THE ASSESSING OFFICER ASSESSEE HAS NOT FILED ANY EVIDENCE WITH REGARD TO THE OWNERSHIP OF THESE PROPERTIES BY THE HUF. THIS STAND WAS TAKEN BEFORE THE LD. CIT(A) FIRST TIME AND THE LD. CIT(A) HAS NOT CALLED ANY REMAND REPORT FROM THE ASSESSING OFFICER ON THIS NEW EVIDENCE BEFORE ADMITTING THE SAME AND ALLOWING THE CLAIM OF THE ASSESSEE. THE REVENUE HAS ALSO RAISED A SPECIFIC GROUND WITH REGARD TO THE VIOLATION OF PROVISIONS OF RULE 46A OF THE RULES. THE LD. D.R. HAS FURTHER CONTENDED THAT IN THE INTEREST OF JUSTICE, THE MATTER MAY BE SENT BACK TO LD. CIT(A) FOR RE - ADJUDICATION OF THE ISSUE AFTER OBTAINING RE MAND REPORT WITH REGARD TO THE OWNERSHIP OF THE PROPERTY , FROM THE ASSESSING OFFICER. 11 . THE LD. COUNSEL FOR THE ASSESSEE HAS CONTENDED THAT THE LD. CIT(A) IS ARMED WITH CO - TERMINUS POWER AND HE HIMSELF CAN EXAMINE THE EVIDENCE FILED BEFORE HIM AND ACCORDINGL Y THE LD. CIT(A) HAS EXAMINED THE SAME AND THEREAFTER ALLOWED THE CLAIM OF DEDUCTION. 12 . HAVING CAREFULLY EXAMINED THE ORDERS OF THE AUTHORITIES BELOW IN THE LIGHT OF THE RIVAL SUBMISSIONS AND THE MATERIAL PLACED BEFORE US, WE FIND THAT THE ASSESSEE HAS TRIED TO EXPLAIN THAT THE PROPERTIES CLAIMED TO BE PRINT TO PDF WITHOUT THIS MESSAGE BY PURCHASING NOVAPDF ( HTTP://WWW.NOVAPDF.COM/ ) : - 6 - : OWNED BY THE HUF WERE NOTICED BY THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND ASSESSEE HAS NOT FURNISHED EVIDENCE WITH REGARD TO THE OWN ERSHIP OF THESE PROPERTIES. IT WAS CLAIMED BEFOR E THE LD. CIT(A) THAT IT WAS OWNED BY THE HUF, BUT NO EVIDENCE WAS PLACED BEFORE HIM BY THE ASSESSEE. THOUGH HE HAS RAISED AN ORAL SUBMISSION THAT THESE PROPERTIES BELONG TO THE HUF, BUT IN THE ABSENCE OF ANY OWNERSHIP EVIDENCE , IT CANNOT BE CALLED THAT T HE PROPERTY WAS OWNED BY THE HUF AT THE TIME OF ACQUISITION OF NEW RESIDENTIAL PROPERTY OUT OF THE R SALE PROCEEDS OF ITS CAPITAL ASSET. 13 . THOUGH THE ASSESSEE HAS MENTIONED IN HIS WRITTEN SUBMISSION THAT NECESSARY EVIDENCE WITH REGARD TO THE OWNERSHIP OF THE PROPERTY OF HUF WAS FILED, BUT NOTHING IS AVAILABLE BEFORE US TO APPRECIATE THE ARGUMENT OF THE LD. COUNSEL FOR THE ASSESSEE. THE ONUS IS UPON THE ASSESSEE TO PROVE THAT THE PROPERTIES WHICH ARE NOTICED BY THE ASSESSING OFFICER AND CLAIMED TO BE OWNED BY THE ASSESSEE ARE PROPERTIES OWNED BY THE HUF AND NOT BY THE ASSESSEE. THEREFORE, WE ARE OF THE CONSIDERED VIEW THAT THIS ISSUE REQUIRES A FRESH ADJUDICATION BY THE LD. CIT(A) IN THE LIGHT OF EVIDENCE FILED BY THE ASSESSEE AFTER CALLING A REMAND REPORT WIT H REGARD TO THE OWNERSHIP OF THE PROPERTIES SITUATED AT UNNAO. ACCORDINGLY, THE ORDER OF THE LD. CIT(A) IS SET ASIDE AND THE MATTER IS RESTORED TO HIM WITH A DIRECTION TO RE - ADJUDICATE THE ISSUE AFRESH AFTER OBTAINING REMAND REPORT FROM THE ASSESSING OFFI CER WITH REGARD TO THE OWNERSHIP OF THE IMPUGNED PROPERTY SITUATED AT UNNAO. I.T.A. NO.603/LKW/2011: A.Y. 2007 - 08: 14 . THROUGH THIS APPEAL, THE REVENUE HAS CHALLENGED THE ORDER OF THE LD. CIT(A) MAINLY ON TWO GROUNDS, WHICH ARE AS UNDER: - 1 . THE LD. COMMISSIONER OF INCOME TAX (APPEALS) - II, KANPUR HAS ERRED IN LAW AND ON FACTS I N DELETING THE ADDITIONS OF RS. 53,65,448 / PRINT TO PDF WITHOUT THIS MESSAGE BY PURCHASING NOVAPDF ( HTTP://WWW.NOVAPDF.COM/ ) : - 7 - : U/S 68 OF THE INCOME TAX ACT, 1961, ON ACCOUNT OF UNEXPLAINED CREDIT ENTRIES MENTIONED IN THE BOOKS OF ACCOUNTS INCLUDING BANK STATEMENTS OF THE AS SESSEE WITHOUT APPRECIATING THE FACTS BROUGHT ON RECORD BY THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS. 2 . THE LD. COMMISSIONER OF INCOME TAX (APPEALS) - II, KANPUR HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS. 44,69,120 / - MADE BY THE ASSESSING OFFICER ON ACCOUNT OF BOGUS LIABILITY MENTIONED IN THE BOOKS OF ACCOUNTS OF THE ASSESSEE WITHOUT APPRECIATING THE FACTS BROUGHT ON RECORD BY THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS. 15 . DURING THE COURSE OF ASSE SSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAS INTRODUCED CERTAIN CREDIT IN HIS BOOKS OF ACCOUNT. THE CREDIT ENTRIES NOTICED BY THE ASSESSING OFFICER ARE AS UNDER: - SL.NO. NAME OF THE CREDITOR AMOUNT 1. M/S SHIVARAJ TOBACCO CO. P VT. LTD. RS.30,15,448 2. CREDIT ENTRY DATED 5.5.2006 IN THE ASSESSEES BANK ACCOUNT NO.8526 AT CENTRAL BANK OF INDIA, SHUKLAGANJ, UNNAO RS.5,00,000 3. SHRI. MANJU NATH GUPTA RS.5,00,000 4. SHRI. VASAVARAJ RS.6,00,000 5. SRI DEVENDRA SINGH RS.7,50,000 TOTAL RS.53,65,448 PRINT TO PDF WITHOUT THIS MESSAGE BY PURCHASING NOVAPDF ( HTTP://WWW.NOVAPDF.COM/ ) : - 8 - : 16 . THE ASSESSEE WAS ASKED TO EXPLAIN THESE CREDIT ENTRIES, BUT THE ASSESSING OFFICER WAS NOT CONVINCED WITH THE EXPLANATIONS FURNISHED BY THE ASSESSEE AND HE MADE ADDITION OF RS.53,65,448/ - . THOUGH THIS ADDITION OF RS.53,65,448/ - INCLUD ES CREDIT ENTRY OF RS.30,15,448/ - , BUT THE ASSESSING OFFICER HAS NOT DELIBERATED ON THIS CREDIT ENTR Y IN HIS ENTIRE ORDER. 17 . AGGRIEVED, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT(A) WITH THE SUBMISSION THAT BEFORE THE ASSESSING OFFICER CREDIT ENTRIE S WERE DULY EXPLAINED, BUT THE ASSESSING OFFICER DID NOT TAKE COGNIZANCE OF THE EXPLANATIONS FURNISHED BY THE ASSESSEE. THE LD. CIT(A) EXAMINED THE CLAIM OF THE ASSESSEE IN THE LIGHT OF ASSESSEES CONTENTIONS AND BEING CONVINCED WITH IT, HE DELETED THE AD DITION. THE RELEVANT OBSERVATIONS OF THE LD. CIT(A) ARE EXTRACTED HEREUNDER: - (1) SHIVRAJ TOBACCO COMPANY PVT. LTD. RS. 30.15.448/ - I FIND THAT THIS IS AN ASSOCIATE CONCERN OF ASSESSEE DULY ASSESSED WITH THE SAME A.O. THE BALANCE SHEET OF THIS COM PANY SHOWS THIS AMOUNT AS LOAN TO THE APPELLANT. IT IS AN OLD LIABILITY. COPY OF ACCOUNT HAS BEEN FILED IN PAPER BOOK AT SI. NO. 4,5,6 & 7. EVEN A.O HAS NOT CALLED FOR ANY EXPLANATION IN CONNECTION WITH LOAN IN THE NAME OF SHIVRAJ TOBACCO COMPANY PVT. LTD. , THEREFORE HE WAS NOT JUSTIFIED IN MAKING ADDITION FOR THE AMOUNT OF RS.30,15,448/ - . THE APPELLANT HAS ALSO FILED AN APPLICATION U/S 154 FINDING OUT THE DEFECT IN ORDER, BUT IT HAS BEEN REJECTED BY THE A.O MERELY ON THE GROUND THAT THIS HAS BEEN DISCUSSED IN THE ASSESSMENT ORDER WHICH IS INCORRECT. THEREFORE, AO IS WRONG IN REACHING THE CONCLUSION OF ADDITION OF THIS AMOUNT U/S. 68, HENCE, IT STANDS DELETED. (2) CREDIT ENTRY DATED 5 - 5 - 2006 IN THE ASSESSEE'S BANK ACCOUNT NO. 8526 AT CENTRAL BANK OF INDIA, SHUKLA GANJ, UNNAO RS. 5,00,000/ - . PRINT TO PDF WITHOUT THIS MESSAGE BY PURCHASING NOVAPDF ( HTTP://WWW.NOVAPDF.COM/ ) : - 9 - : I FIND THAT THIS DEPOSIT REPRESENT BALANCE PAYMENT OF SALE CONSIDERATION RECEIVED BACK BY THE APPELLANT AS PER SALE DEED FILED ALONG WITH PAPER BOOK AND THESE DOCUMENTS WERE ALSO AVAILABLE AT THE TIME OF ASSESSMENT PROCE EDING. IT IS NOT A FRESH LOAN, IT IS A REPAYMENT OF BALANCE PAYMENT AGAINST SALE CONSIDERATION. THE AO MADE QUERY ON 07 - 02 - 2009 TO EXPLAIN RS. 5.00 LACS APPEARING ON 05 - 05 - 2006 IN CBI A/C NO. 8526. IT IS SUBMITTED THAT THERE IS NO CREDIT ENTRY OF THIS AMOU NT IN THIS ACCOUNT STATEMENT. COPY OF BANK STATEMENT HAS BEEN FURNISHED WHICH WAS ALSO MADE AVAILABLE TO AO. IN FACT, IT WAS PAYMENT OF BALANCE CONSIDERATION RECEIVED BY ASSESSEE FROM SAGAR SINGH R/O 96/104, BIRHANA ROAD, KANPUR VIDE CHEQUE NO. 458209 OF U NITED BANK OF INDIA AGAINST BALANCE SALE CONSIDERATION OF AGRICULTURAL LAND SOLD TO HIM WHICH IS ON RECORD. COPY OF CHEQUE /COUNTER SLIP AND SALE DEED IS PLACED ON PAGE NO. 39, 40 & 59 TO 69 TO PAPER BOOK (VOL. 1) WHICH WAS ALREADY FILED BEFORE AO. THE ASS ESSEE HAS DISCHARGED HIS ONUS BY FURNISHING SALE DEED COPY, PHOTO COPY OF BANKER CHEQUE AND PAY - IN SLIP WHEREIN COMPLETE ADDRESS OF BUYER AND SELLER ARE MENTIONED. THEREFORE THIS ADDITION IS DELETED. (3) SHRI MANJA NATH GUPTA RS. 5,00,000/ - FROM THE D ETAILS FURNISHED BEFORE ME, WHICH IS ALSO PART OF ASSESSMENT PROCEEDING, I FIND THAT THE AO HAS MENTIONED THAT THERE IS A CREDIT ENTRY OF RS.5 LACS ON 17 - 11 - 2006 IN ASSESSEE'S BANK ACCOUNT WITH CBI A/C NO. 6746. I HAVE SEEN THIS BANK ACCOUNT BUT THERE IS N O SUCH TRANSACTION IN THIS ACCOUNT. THE AO HAS NOT PROPERLY EXAMINED THE EXPLANATION OF ASSESSEE. ASSESSEE HAS STATED THAT THIS DEPOSIT CAME FROM MANJU NATH GUPTA BUT THIS DEPOSIT HAS BEEN DEPOSITED BY ASSESSEE IN HIS BANK ACCOUNT MAINTAINED WITH ST. CH. B ANK WHICH IS APPEARING ON PAGE NO. 31 OF PAPER BOOK (VOL. 2) OF PAPER BOOK ALREADY FILLED BEFORE AO. THEREFORE, THE AO HAS WRONGLY ADDED THIS AMOUNT, IN FACT, THERE IS NO SUCH DEPOSIT. PRINT TO PDF WITHOUT THIS MESSAGE BY PURCHASING NOVAPDF ( HTTP://WWW.NOVAPDF.COM/ ) : - 10 - : I FIND THAT THIS RECEIPT IS FROM SHRI MANJU NATH GUPTA, WHO HAS GIVEN T HIS AMOUNT BY WITHDRAWAL FROM HIS BANK ACCOUNT WITH INDIAN BANK, PRASANTH NAGAR BRANCH, BANGALORE, KARNATAKA. HE HAS FILED CONFIRMATION AS WELL AS BANK ACCOUNT APPEARING ON PAGE NO. 11 &12 OF PAPER BOOK (VOL. 3). IT IS NOT A FRESH LOAN. IT IS A RETURN BACK OF OLD INVESTMENT MADE BY THE APPELLANT. THEREFORE THIS ADDITION IS DELETED. THE CONFIRMATION ALONG WITH PAN AND CHEQUE DETAILS WERE FURNISHED DURING THE COURSE OF ASSESSMENT PROCEEDINGS BEFORE AO. IN VIEW OF CIT VS. OWARKADHISH INVESTMENT PVT. LTD. (DEL) REPORTED IN 330 ITR 298. THE ASSESSEE HAS DISCHARGED HIS ONUS OF PROVING THE TRANSACTION. THEREFORE, THE ADDITION STANDS DELETED. (4) SHRI. VASAVARAJ RS. 6,00,000/ - SIMILAR IS THE POSITION AS IN THE CASE OF SHRI MANJU NATH GUPTA AND THE DETAILS ARE AVAILABLE ION RECORD THEREFORE, I DELETE THE ADDITION BECAUSE IT IS A RETURN BACK OF INVESTMENT MADE BY THE ASSESSEE. THE DETAILS CONTAINING CONFIRMATION ALONG WITH PAN FILED DURING THE COURSE OF ASSESSMENT PROCEEDINGS FOR ASSESSMENT YEAR 2006 - 07. THE LD. AR HAS INVITED MY ATTENTION TO PAGE NO. 8, 9 OF THE PAPER BOOK (VOL. 3) AS WELL AS ASSESSEE'S BANK ACCOUNT WITH ST. CH. BANK PAGE NO. 31 OF PAPER BOOK (VOL. 2). I FIND THAT THE ASSESSEE HAS FURNISHED COMPLETE DETAILS OF CREDIT ENTRY OF RS. 6 LACS AS APPEAR ING IN ST. CH. BANK A/C NO. 622 - 1 - 037026 - 2. THE PARTY HAS CONFIRMED THE TRANSACTION. THEREFORE, THE ASSESSEE HAS DISCHARGED HIS ONUS OF PROVING THE TRANSACTION. HENCE, THE ADDITION STANDS DELETED. (5) S HRI DEVENDRA SINQH RS. 7,50,000/ - THE AR HAS INV ITED MY ATTENTION TO PAGE NO. 11, 12 & 33 OF PAPER BOOK (VOL. 2) AS WELL AS ASSESSEE'S BANK ACCOUNT WITH ST. CH. BANK. I FIND CONTENTION OF ASSESSEE IS CORRECT. HE HAS DEPOSITED THIS MONEY FROM HIS HDFC BANK, VIJAYA NAGAR BRANCH, BANGALORE. IT IS APPEARING ON BANK STATEMENT AND HE IS ALSO AN INCOME - TAX PAYER HAVING PAN PRINT TO PDF WITHOUT THIS MESSAGE BY PURCHASING NOVAPDF ( HTTP://WWW.NOVAPDF.COM/ ) : - 11 - : AGTPR6456L. BANK STATEMENTS ETC. ARE AVAILABLE IN ASSESSMENT RECORD AND ALSO IN PAPER BOOK. THE APPELLANT HAS FILED THE PAPER BOOK AND HAS CONFIRMED THAT THESE ARE PART OF ASSESSMENT PROCEED INGS. I DO NOT FIND ANY JUSTIFICATION IN SUSTAINING THIS ADDITION. THE ASSESSEE HAS DISCHARGED HIS ONUS (RELIANCE IS PLACED ON CIT VS. DWARKADHISH INVESTMENT PVT. LTD. (DEL) REPORTED IN 330 ITR 298). THEREFORE, THE ADDITION STANDS DELETED. 18 . AGGRIEVED, THE REVENUE HAS PREFERRED AN APPEAL BEFORE THE TRIBUNAL AND HAS PLACED RELIANCE UPON THE ASSESSMENT ORDER. 19 . THE LD. COUNSEL FOR THE ASSESSEE, ON THE OTHER HAND, HAS INVITED OUR ATTENTION TO THE SUBMISSIONS MADE AND DOCUMENTS FILED BEFORE THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS. THE ASSESSING OFFICER HAS NOT TAKEN COGNIZANCE OF THESE DOCUMENTS AND SUMMARILY MADE ADDITION UNDER SECTION 68 OF THE ACT. IT WAS EMPHATICALLY ARGUED BY THE LD. COUNSEL FOR THE ASSESSEE THAT THE MAJOR ENTRY OF RS.30,15,448/ - SHOWN IN THE NAME OF M/S SHIVARAJ TOBACCO CO. PVT. LTD. IS OLD CREDIT ENTRY WHICH IS COMING UP FROM THE BALANCE SHEET FOR THE LAST SO MONEY YEARS. IN SUPPORT OF HIS CONTENTION, THE LD. COUNSEL FOR THE ASSESSEE HAS INVITED OUR ATTENTION TO THE BALANCE SHEETS FOR THE ASSESSMENT YEARS 2006 - 07 AND 2007 - 08 IN WHICH UNSECURED LOAN OF RS.30,15,448/ - WAS SHOWN IN THE NAME OF M/S SHIVAR AJ TOBACCO CO. PVT. LTD. BEING OLD CREDIT ENTRIES, THE ADDITION CANNOT BE MADE IN THE IMPUGNED ASSESSMENT YEAR. W ITH REGARD TO OTHER CREDIT ENTRIES, THE ASSESSEE HAS FURNISHED DETAILED EXPLANATION ALONG WITH CONFIRMATIONS OF THE CREDITORS, BUT IT WAS NOT ACCEPTED BY THE ASSESSING OFFICER. THE LD. CIT(A) HAS APPRECIATED THE EVIDENCE FILED BY THE ASSESSEE AND DELETED THE ADDITION. THEREFORE, THERE IS NO ERROR IN THE ORDER OF THE LD. CIT(A). 20 . HAVING CAREFULLY EXAMINED THE ORDERS OF THE AUTHORITIES BELOW IN THE LIGHT OF RIVAL SUBMISSIONS , WE FIND THAT DURING THE COURSE OF ASSESSMENT PRINT TO PDF WITHOUT THIS MESSAGE BY PURCHASING NOVAPDF ( HTTP://WWW.NOVAPDF.COM/ ) : - 12 - : PROCEEDINGS, ASSESSEE FILED WRITTEN SU BMISSIONS BEFORE THE ASSESSING OFFICER EXPLAINING THE CREDIT ENTRIES AND ITS SOURCE. HE HAS ALSO FILED HIS FINANCIAL STATEMENT ENDING ON 31.3.2006 AND 31.3.2007. COPIES OF THE SAME ARE PLACED AT PAGES 12 TO 30 OF THE COMPILATION OF THE ASSESSEE. IN THE BALANCE SHEET ENDING ON 31.3.2006 AND 31.3.2007 , CREDIT ENTRY OF RS.30,15,448/ - WAS SHOWN IN THE NAME OF M/S SHIVARAJ TOBACCO CO. PVT. LTD. IN THE LIGHT OF THESE DOCUMENTS, IT HAS BEEN ESTABLISHED THAT THE CREDIT ENTRIES IN THE NAME OF M/S SHIVARAJ TOBACC O CO. PVT. LTD. ON ACCOUNT OF UNSECURED LOAN OF RS.30,15,448/ - IS OLD CREDIT ENTRY AND HAS BEEN CARRIED OVER IN THE IMPUGNED ASSESSMENT YEAR. THEREFORE, THIS CREDIT ENTRY CANNOT BE RATHER EXAMINED IN THE IMPUGNED ASSESSMENT YEAR, AS IT WAS NOT INTRODUCED IN THIS YEAR. SINCE THIS CREDIT BELONGS TO EARLIER YEAR, NO DISALLOWANCE CAN BE MADE IN THIS YEAR UNDER SECTION 68 OF THE ACT. 21 . WITH REGARD TO OTHER CREDIT ENTRY, THE ASSESSEE HAS FURNISHED DETAILED EXPLANATIONS BEFORE THE ASSESSING OFFICER. COPY OF THE S AME IS AVAILABLE AT PAGE 31 TO 34 OF THE COMPILATION OF THE ASSESSEE. BESIDES, CONFIRMATIONS OF THE CREDITORS WERE ALSO FILED TO EXPLAIN THE CREDIT ENTRIES. BUT ALL THESE DOCUMENTS WERE NOT TAKEN INTO ACCOUNT BY THE ASSESSING OFFICER AND HE SUMMARILY REJ ECTED THE EXPLANATION OF THE ASSESSEE AND MADE ADDITION UNDER SECTION 68 OF THE ACT. WHEREAS THE LD. CIT(A) HAS APPRECIATED THE EVIDENCE FILED BY THE ASSESSEE BEFORE THE ASSESSING OFFICER AND HAVING COME TO THE CONCLUSION THAT ASSESSEE HAS DISCHARGED ITS ONUS BY FURNISHING THE RELEVANT EVIDENCE WITH REGARD TO THE CREDIT ENTRIES, HE DELETED THE ADDITION. SINCE THE ISSUE WAS PROPERLY EXAMINED BY THE LD. CIT(A), WE FIND NO INFIRMITY IN HIS ORDER AND ACCORDINGLY WE CONFIRM THE ORDER OF THE LD. CIT(A) IN THIS REGARD. 22 . NEXT GROUND RELATES TO THE LIABILITY INTRODUCED IN THE BOOKS OF ACCOUNT AT RS.47,15,720/ - . PRINT TO PDF WITHOUT THIS MESSAGE BY PURCHASING NOVAPDF ( HTTP://WWW.NOVAPDF.COM/ ) : - 13 - : 23 . THE FACTS IN BRIEF BORNE OUT FROM THE RECORD ARE THAT THE ASSESSEE HAS FILED THE NON EST RETURN OF INCOME CLAIMING THEREIN FOR THE FIRST TIME THAT HE OWED TH E SUM OF RS.47,15,720/ - TO VARIOUS CREDITORS WHICH WERE NOT SHOWN BY HIM IN HIS ORIGINAL RETURN OF INCOME FILED ON 16.3.2008. T HEREAFTER, IN ORDER TO EXAMINE THE GENUINENESS OF THIS LIABILITY, ASSESSEE THROUGH DETAILED QUESTIONNAIRE WAS REQUIRED TO FURNIS H THE RELEVANT DETAILS. BUT THE ASSESSEE DID NOT FURNISH THE REQUISITE INFORMATION. THEREFORE, NECESSARY VERIFICATION COULD NOT BE CARRIED OUT. THE CLAIM OF THE ASSESSEE WAS THAT THIS LIABILITY REPRESENT THE NAMES OF THE PERSONS SHOWN IN THE CREDITORS SIDE IN THE BALANCE SHEET OF M/S SHIVRAJ T OBACCO CO. WHICH REMAINED A PARTNERSHIP FIRM UPTO 31.3.2006 CONSISTING OF HIMSELF AND SMT. KANTI DEVI SHUKLA. IT WAS FURTHER AVERRED THAT SMT. KANTI DEVI SHUKLA EXPIRED IN APRIL, 1997 AND THEREAFTER THE CONSTITUTI ON OF THIS FIRM INCLUDED THE ASSESSEE AND SHRI. ASHISH SHUKLA. THE ASSESSEE CONCLUDES T HAT W.E.F. 1.4.2006 IT BECAME A PROPRIETORSHIP CONCERN AND ALL THE ASSETS AND LIABILITIES HAVE BEEN TRANSFERRED TO HIM. HOWEVER, ANY DISSOLUTION DEED TO THIS EFFECT WAS NOT PRODUCED BEFORE THE ASSESSING OFFICER. THE QUERIES RAISED BY THE ASSESSING OFFICER AND REPLY GIVEN BY THE ASSESSEE ARE EXTRACTED HEREUNDER TO SEE AS TO WHAT NATURE OF QUERY WAS RAISED: - Q.5 DETAILS OF SUNDRY CREDITORS AND LIABILITIES IN THE BEL OW MENTIONED FORMAT. S. NO. NAME & ADDRESS OF THE PARTY PAN AMOUNT NATURE OF TRANSACTION 1 2 3 4 5 REPLY OF THE ASSESSES: THAT AS REQUIRED TO FURNISH DETAILS OF SUNDRY CREDITORS AND LIABILITIES IN THE BELOW MENTIONED FORMAT. IN THIS REGARD IT IS SUBMITTED THAT THE INFORMATION IN MATTER ARE BEING GIVEN IN THE BELOW MENTIONED FORMAT AS UNDER: - S. NO. NAME & ADDRESS OF THE PARTY PAN AMOUNT NATURE OF TRANSACTION PRINT TO PDF WITHOUT THIS MESSAGE BY PURCHASING NOVAPDF ( HTTP://WWW.NOVAPDF.COM/ ) : - 14 - : 1 SRI GANESH MAHARAJ 402.25 OLD, NO TRANSACTION, COPY OF A /C ENCLOSED 2 SMT. NONALIKA TIWARI 3736.00 - DO - 3 GIRISH KUMAR 72800.00 - DO - 4 KARAM CHANDRA 72800,00 - DO - 5 MITHLESH KR. SHARMA 15000.00 - DO - 6 R.D. & CO. 82119.00 - DO - 7 R H TRADERS 5000.00 - DO - 8 R RAMNANA 72017.50 - DO - 9 RAFIQ AHMAD 45800.00 - DO - 10 RAJASTHAN TRADING CO. 125511.23 - DO - 11 RAM KUMAR GUPTA 36400.00 - DO - 12 RANI TEWARI 10000.00 - DO - 13 RAVI ENTERPRISES 86000.00 - DO - 14 SHIV ENTERPRISES 85000.00 - DO - 15 SHIV TRADERS 72800.00 - DO - 16 VIJAY KUMAR 101500.00 - DO - 17 A.N. KAPOOR 300.00 - DO - 18 AWADH WOOD PRODUCTS 313500.00 - DO - 19 B.R. TRADING CO. 191270.40 - DO - 20 B.S. POLYMERS PVT. LTD. 63995.40 - DO - 21 BEHARI LAL BAL KISHAN 346382.30 - DO - 22 HELLO DISPLAY 15100.00 - DO - 23 INDIA CANS 91374.00 - DO - 24 M.S. GUPTA 131700.00 - DO - 25 NEW TIME ADVERTISERS 1 93167.50 - DO - 26 POOJA PACKAGERS PVT. LTD. 112536.10 - DO - 27 R. P. & CO. 393204.38 - DO - 28 RAJENDRA STORES 110245.00 - DO - 29 RAM NIWAS SUNIL KUMAR 135719.33 - DO - 30 SANJAY KRISHNA & CO. 5000.00 - DO - 31 SHALINI SAURABH INDUSTRIES 24095.00 - DO - PRINT TO PDF WITHOUT THIS MESSAGE BY PURCHASING NOVAPDF ( HTTP://WWW.NOVAPDF.COM/ ) : - 15 - : 32 SHIVRAJ PERFUMERY PROD. PVT. LTD. 1006501.00 - DO - 33 TANDON ADVERTISERS 35413.00 - DO - 34 V.V. POLYTEX PVT. LTD. 196880.00 - DO - 35 VINAY KUMAR & CO. 5250.00 - DO - 36 ZARDA HOUSE 75000.00 - DO - 37 RAM KUMAR & CO. 2500.00 - DO - 38 S HIVRAJ TOBACCO CO. PVT. LTD. 95224.87 - DO - 39 SHIVAM TRADERS MANDSAUR 11000.00 - DO - 40 SUMAN PLASTIC CORPN. 2653.00 - DO - 41 SADDHAN MISHRA 18000.00 - DO - 42 CHANDRA BOX INDUSTRIES 1581.00 - DO - Q.8. DETAILS OF SUNDRY DEBTORS IN THE BELOW MENTIONED FORMAT. S. NO. NAME & ADDRESS OF THE PARTY PAN AMOUNT NATURE OF TRANSACTION 1 2 3 4 5 REPLY OF THE ASSESSEE: THAT AS REQUIRED TO FURNISH DETAIL OF SUNDRY DEBTORS IN THE BELOW MENTIONED FORMAT. IN TH IS REGARD IT IS SUBMITTED THAT THE REQUISITE INFORMATION IS BEING GIVEN IN THE BELOW MENTIONED FORMAT: - S. NO. NAME & ADDRESS OF THE PARTY PAN AMOUNT NATURE OF TRANSACTION 1 MAYUR SUPARI STORES 697598.05 BUSINESS 2 S ANJAY GUPTA 2870.00 3 BARASIA ADVERTISEMENT LTD. 61020.00 4 M/S METROPLITAN ENGG. WORKS 32000.00 BUSINESS 5 M/S RAMA & CO. 65275.00 6 DAS ENGG. WORKS 15000.00 7 BHARATJI AGARWAL, ADV. 1785.00 LEGAL 8 ASHISH SHUKLA AQJP S452 4J 3840172.00 PRINT TO PDF WITHOUT THIS MESSAGE BY PURCHASING NOVAPDF ( HTTP://WWW.NOVAPDF.COM/ ) : - 16 - : 4715720.57 Q. 24. LIST OF SUNDRY CREDITORS OF MORE THAN 4 YEARS OLD AS UNDER: - S. NO. NAME & ADDRESS PAN AMOUNT NATURE OF TRANSACTION SINCE WHEN 24 . BEING NOT CONVINCED W ITH THE REPLY OF THE ASSESSEE, THE ASSESSING OFFICER CONCLUDED THAT THESE LIABILITIES ARE BOGUS AND HE MADE ADDITION OF RS.44,69,120/ - . 25 . THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT(A) AND ALSO FURNISHED WRITTEN SUBMISSIONS. BEING CONVINCED WITH THE EXPLANATIONS OF THE ASSESSEE, THE LD. CIT(A) DELETED THE ADDITION. 26 . AGGRIEVED, THE REVENUE HAS PREFERRED AN APPEAL BEFORE THE TRIBUNAL. THE LD. D.R. HAS INVITED OUR ATTENTION TO THE ORDER OF THE LD. CIT(A) WITH THE SUBMISSION THAT THE LD. CIT(A) HAS SIMPL Y REPRODUCED THE ASSESSMENT ORDER AND SUBMISSIONS OF THE ASSESSEE, BUT HE HAS NOT GIVEN A CATEGORICAL FINDING AS TO HOW THESE LIABILITIES WERE DULY EXPLAINED BY THE ASSESSEE BEFORE HIM. WHILE GIVING A FINDING, THE LD. CIT(A) OBSERVED THAT THERE IS A TRADE LIABILITY IN THE NAME OF THE PARTNERSHIP FIRM, M/S SHIVRAJ T OBACCO CO., WHEREAS IN THE LIST OF BOGUS LIABILITIES, THERE IS NO REFERENCE OF M/S SHIVRAJ TOBACCO CO. WITHOUT ASSIGNING ANY REASON IN HIS ORDER, THE LD. CIT(A) DELETED THE ADDITION OF RS.44,69, 120/ - AS BOGUS LIABILITY. THEREFORE, THE ORDER OF THE LD. CIT(A) DESERVES TO BE SET ASIDE , AS NO ISSUE WAS DISCUSSED ON MERIT IN HIS ORDER. 27 . THE LD. COUNSEL FOR THE ASSESSEE, ON THE OTHER HAND, HAS SUBMITTED THAT THE ASSESSEE HAS PROPERLY EXPLAINED THESE C REDIT ENTRIES BEFORE THE ASSESSING OFFICER. HE FURTHER SUBMITTED THAT THEY ARE OLD CREDITS PRINT TO PDF WITHOUT THIS MESSAGE BY PURCHASING NOVAPDF ( HTTP://WWW.NOVAPDF.COM/ ) : - 17 - : AND VERACITY OF THE SAME CANNOT BE EXAMINED IN THIS YEAR, BUT THE EXPLANATIONS OF THE ASSESSEE WERE NOT EXAMINED BY THE ASSESSING OFFICER AND HE MADE ADDITION OF TH E SAME. 28 . HAVING GIVEN A THOUGHTFUL CONSIDERATION TO THE RIVAL SUBMISSIONS AND FROM A CAREFUL PERUSAL OF THE ORDERS OF THE AUTHORITIES BELOW AND THE DOCUMENTS PLACED ON RECORD, WE FIND THAT THOUGH THE ASSESSEE HAS FILED WRITTEN SUBMISSION BEFORE THE ASSESSIN G OFFICER EXPLAINING THAT THESE CREDIT ENTRIES ARE OLD CREDIT ENTRIES AND HAS BEEN CARRIED FORWARD FOR THE LAST SO MANY YEARS AND THE SAME CANNOT BE ADDED IN THIS YEAR, BUT THE REQUISITE INFORMATION SOUGHT BY THE ASSESSING OFFICER WAS NOT FURNISHED BEFORE HIM WITH REGARD TO THE ADDRESS OF THE CREDITORS AND PAN. IN THE ABSENCE OF COMPLETE INFORMATION WITH REGARD TO THE CREDITORS, THE ASSESSING OFFICER TREATED THESE LIABILITIES AS BOGUS LIABILITY AND MADE ADDITION OF RS.44,69,120/ - . THOUGH THE ADDITION WAS DISPUTED BEFORE THE LD. CIT(A) AND THE ASSESSEE HAS TAKEN A PLEA THAT THEY ARE OLD CREDIT LIABILITIES AND ALSO FILED WRITTEN SUBMISSION, BUT THE LD. CIT(A) HAS NOT PROPERLY ADJUDICATED THE SAME IN HIS ENTIRE ORDER. AS PER WRITTEN SUBMISSION FILED BY THE A SSESSEE, THE LD. CIT(A) MADE CERTAIN OBSERVATIONS IN THIS REGARD IN HIS ORDER IN PARA 7, BUT THESE OBSERVATIONS ARE NOT RELATED TO THE IMPUGNED ISSUE AND HE FINALLY DELETED THE ADDITION. WE HAVE ALSO CAREFULLY EXAMINED THE WRITTEN SUBMISSION OF THE ASSESS EE AS RECORDED BY THE LD. CIT(A) IN HIS ORDER IN PARAGRAPH 6 AT PAGE 13, BUT THESE SUBMISSIONS ARE NOT RELEVANT TO THE PRESENT CONTROVERSY OF BOGUS LIABILITY, RATHER TALK ABOUT THE LIABILITY OF M/S SHIVRAJ TOBACCO CO. WHE N IN THE ENTIRE LIST NO CREDIT ENTR Y WAS SHOWN IN THE NAME OF M/S SHIVRAJ TOBACCO CO. CERTAIN ENTRIES WERE SHOWN IN THE NAME OF SHIVRAJ PERFUMERY PROD. PVT. LTD. AND SHIVRAJ TOBACCO CO. PVT. LTD. THERE IS NO CREDIT ENTRY IN THE NAME OF M/S SHIVRAJ TOBACCO CO. THE RELEVANT OBSERVATIONS OF THE LD. CIT(A) AFTER RECORDING THE SUBMISSIONS OF THE ASSESSEE ON THIS ISSUE ARE RECORDED IN PARAGRAPH 7 OF HIS ORDER AND FOR PRINT TO PDF WITHOUT THIS MESSAGE BY PURCHASING NOVAPDF ( HTTP://WWW.NOVAPDF.COM/ ) : - 18 - : THE SAKE OF REFERENCE, WE EXTRACT THE RELEVANT PORTION OF THE SUBMISSION OF THE ASSESSEE AND OBSERVATION OF THE LD. CIT(A) AS UND ER: - THE APPELLANT HAS FILED SUBMISSION VIDE PARA 11 & 12 WHICH IS AS UNDER: - 11. AS REGARDS FOR BOGUS LIABILITIES, YOUR GOOD SELF MAY APPRECIATE THAT ASSESSEE WAS PARTNER OF FIRM M/S. SHIVRAJ TOBACCO CO. AND ON ITS EXISTENCE COMING TO END AS ON 31 - 03 - 2 006, ALL ITS ASSETS AND LIABILITIES AS IT IS WERE TRANSFERRED TO THE ASSESSEE IN HIS HAND. AND IN SUPPORT OF ABOVE FACT, ASSESSEE HAS FURNISHED COPY OF SUNDRY CREDITOR ACCOUNT OF ALL THE PARTIES TO ESTABLISH THAT THERE WAS CREDIT BALANCES IN THE BOOKS OF T HAT FIRM FOR LAST SEVERAL YEARS AND THIS FACT IS OPEN TO VERIFICATION. M/S. SHIVRAJ TOBACCO CO. WAS ALSO ASSESSED TO INCOME TAX /ACT, 1961 AS SEPARATE ENTITY AND IT WAS REGULAR IN FILING ITS RETURN OF INCOME, ALONGWITH COMPLETE FINANCIAL STATEMENTS. IT IS ALSO IMPORTANT TO NOTE THAT M/S. SHIVRAJ TOBACCO CO. WAS ALSO ASSESSED WITH THE SAME ASSESSING OFFICER. 12. ID. A O HAS ADDED ALL THE SUNDRY CREDITORS OF M/S. SHIVRAJ TOBACCO CO. INCOME OF THE ASSESSEE WITHOUT GOING INTO THE MERITS OF THE CASE. IT WAS AR GUED THAT NO ADDITION CAN BE MADE IN THE HANDS OF THE ASSESSEE FOR FOLLOWING REASONS: I) THAT IT IS A TRADE LIABILITY OF PARTNERSHIP FIRM M/S. SHIVRAJ TOBACCO COMPANY WHICH STAND DISSOLVED VIDE DISSOLUTION DEED APPEARING IN PAPER BOOK VIDE PAGE NO. 13], 1 4 AND IT WAS TAKEN OVER BY THE APPELLANT. II) THESE TRADE LIABILITIES ARE COMING SINCE 1997 AS A TRADE CREDITOR. THE APPELLANT HAS FILED PAPER BOOK WHICH CONTAIN FROM 31 - 03 - 1997 TO 31 - 03 - 2007 WHICH IS ALSO PART OF ASSESSMENT PROCEEDING. III) IN ASSESSMENT ORDER, ID. A O HAS OBSERVED THAT ASSESSEE IS TRYING TO INTRODUCE MONEY IN THE GARB OF SUNDRY DEBTORS IS ALSO NOT CORRECT. ALL THESE DEBTORS ARE RELATING TO M/S. SHIVRAJ TOBACCO CO. AND IN SUPPORT OF ABOVE FACT, ASSESSEE HAS FURNISHED FINANCIAL STATEMENT OF THE FIRM WITH THE ASSESSEE, WHO HAPPENS TO BE ASSESSING OFFICER THAT FIRM ALSO. PRINT TO PDF WITHOUT THIS MESSAGE BY PURCHASING NOVAPDF ( HTTP://WWW.NOVAPDF.COM/ ) : - 19 - : DURING THE COURSE OF ASSESSMENT PROCEEDING, BY FILING STATEMENT OF AFFAIRS OF M/S SHIVRAJ TOBACCO CO., A PARTNERSHIP FIRM FROM 1997 TO 2006, IT WAS PROVED BEYOND DOUBT THAT I T IS A TRADE BUSINESS LIABILITY OF PARTNERSHIP FIRM STYLED M/S. SHIVRAJ TOBACCO CO., WHICH AFTER DISSOLUTION IN THIS YEAR WAS TAKEN OVER BY THE ASSESSEE AS A PROPRIETOR. A NUMBER OF ACCOUNTS OF SUNDRY CREDITORS WERE DEPICTED BEFORE THE AO TO POINT OUT THAT THE LIABILITIES ARE COMING OUT, CLAIMS OF DAMAGED GOODS AGAINST PURCHASE AND SALES SINCE 1997 ONWARDS. THE AO HAS NOT POINTED OUT ANY DEFECT IN THE ACCOUNTS OF SUNDRY CREDITORS SUBMITTED AS WELL AS TRANSACTION RECORDED THEREIN. IN A SUMMARY WORKING HE HAD ADDED THIS AMOUNT AS INCOME OF THE ASSESSEE. YOUR HONOUR MAY PLEASE BE VERY KINDLY APPRECIATE THAT IT ONLY REAL INCOME THAT CAN ONLY BE TAXED AND NOT A MOTIONAL OR DEEMED INCOME. ON GOING THROUGH THE ALL THE ACCOUNTS OF SUNDRY CREDITORS, IT CAN BE GATHER ED THAT THERE IS NO DEPOSIT OF CASH, WHICH IS PAYABLE BY THE ASSESSEE TO CREDITORS BUT IT IS A TRADE LIABILITY OF PARTIES BROUGHT FORWARD IN THE HANDS OF ASSESSEE. ON EXAMINATION OF EACH AND EVERY ACCOUNTS IT CAN BE GATHERED THAT THEY AGAINST TRADING BUSIN ESS WITH THE ASSESSEE. THERE ARE MANY TRADE LIABILITIES WHICH ARE DISPUTED LIABILITY AND FOR THE WANT OF SETTLEMENT OF DISPUTE, THESE HAVE NOT BEEN PAID TO PARTIES, GIRISH KUMAR/KARAM CHANDRA, THE LIABILITIES ARE THE TRADE LIABILITY OF PAN MASALA BUSINESS ASSESSEE AND PARTIES. PARTY HAS CLAIMED DAMAGE GOOD'S COST FOR RS.72,800/ - WHICH HAS NOT BEEN PAID FOR THE WANT OF SETTLEMENT OF DISPUTE. HAD THE AO EXAMINED EACH AND EVERY ACCOUNT OF SUNDRY CREDITORS. HE MIGHT COME TO THE CONCLUSION AS STATED HEREINABOVE BY THE ASSESSEE BUT HE HAS NOT DONE THIS. A PERUSAL OF ASSESSMENT ORDER ALSO SHOWS THAT VARIOUS / BLUNDERS HAVE BEEN COMMITTED BY HIM FOR MAKING ADDITION U/S 68. HE HAS NOT CALL FOR ANY EXPLANATION FROM ASSESSEE REGARDING DEPOSIT IN THE NAME OF M/S SHIVRAJ TOBACCO CO. PVT. LTD. FOR RS. 30,15,448/ - AS WELL AS HE HAS NOT DISCUSSED THE ISSUE IN BODY OF ORDER BUT MADE ADDITION OF THIS AMOUNT. SIMILARLY CREDIT PRINT TO PDF WITHOUT THIS MESSAGE BY PURCHASING NOVAPDF ( HTTP://WWW.NOVAPDF.COM/ ) : - 20 - : REPRESENT IN OTHER BANK OTHER THAN COATED BY AO. THOUGH ALL CREDITS ARE FULLY EXPLAINED. WE DO NOT UNDE RSTAND AFTER ALL WHAT THE AO WAS TO EXAMINED AND WHAT TO ASSESSEE. VI) IN VIEW OF THE ABOVE SAID SUBMISSIONS, YOUR HONOUR IS REQUESTED TO KINDLY DELETE ADDITION WRONGLY MADE IN THE HAND OF ASSESSEE AND OBLIGE. 7. I HAVE CONSIDERED THE FACTS, SUBMI SSION AND CIRCUMSTANCES OF THE CASE, THE ADDITION MADE BY THE A.O AS A BOGUS LIABILITY IS NOT CORRECT ON THE FOLLOWING GROUNDS: - 1. THAT IT IS A TRADE LIABILITY OF PARTNERSHIP FIRM M/S. SHIVRAJ TOBACCO COMPANY WHICH STAND DISSOLVED VIDE DISSOLUTION DEE D APPEARING IN PAPER BOOK VIDE PAGE NO. 13, 14 AND IT WAS TAKEN OVER BY THE APPELLANT. I HAVE PERSONALLY EXAMINED THE ACCOUNT OF SUNDRY CREDITORS, WHICH WERE MADE AVAILABLE BEFORE ME IN THE FORM OF PAPER BOOK. THESE ACCOUNTS ARE THE SAME ACCOUNTS WHICH HAV E BEEN FURNISHED BEFORE THE AO AND THEY ARE KEPT IN ASSESSMENT FOLDER. ALL THE ACCOUNTS ARE BROUGHT FORWARD LIABILITY. THESE ARE TRADE LIABILITY OF A PARTNERSHIP FIRM UP TO 2006 - 07 WHICH IS CONVERTED INTO PROPRIETOR IN ASSESSMENT YEAR 2007 - 08 OF ASESSEE. F URTHER THEY REPRESENT LIABILITY TOWARDS CLAIM OF DAMAGED GOOD. THESE ARE NOT BOGUS LIABILITY. 2. THESE TRADE LIABILITIES ARE COMING SINCE 1997 AS A TRADE CREDITOR. THE APPELLANT HAS FILED PAPER BOOK WHICH CONTAIN FROM 31 - 03 - 1997 TO 31 - 03 - 2007 WHICH IS ALSO PAR T OF ASSESSMENT PROCEEDING. IN THE ABSENCE OF UNILATERAL ENTRIES IN THE BOOKS OF ACCOUNT THE INSTANT APPELLANT IT COULD NOT BE HELD THAT THE A.O HAD CORRECTLY TREATED THESE BOGUS LIABILITIES. FURTHER THE A.O HAD NEITHER DISPROVED THE APPELLANT CLAIM RELATING TO THE IMPUGNED LIABILITY NOR DISCHARGE ITS ONUS TO PROVE THAT THERE WAS BOGUS LIABILITIES AND THE APPELLANT OBTAINED THE BENEFIT FINALLY, THEREFORE, THE ARGUMENT OF THE A.O HAD TO BE DISMISSED. MERELY BECAUSE LIABILITIES WERE OUTSTANDING FOR LA ST SO MANY YEAR, IT COULD NOT BE INFERRED THAT THE SAID LIABILITY HAD SEIZED TO EXIST BECAUSE THE APPELLANT HAS NOT WRITTEN OFF OUTSTANDING LIABILITY IN HIS PRINT TO PDF WITHOUT THIS MESSAGE BY PURCHASING NOVAPDF ( HTTP://WWW.NOVAPDF.COM/ ) : - 21 - : BOOKS OF ACCOUNT AND SAID LIABILITIES WERE STILL IN EXISTENCE. IF IS PROVED THAT APPELLANT ACKNOWLE DGE HIS LIABILITY AS PER BOOKS OF ACCOUNT. THE APPELLANT HAS RELIED UPON THE FOLLOWING CASE LAWS: - NITIN S. GARG VS. ACIT REPORTED IN 40 SOT 253 (2010). 29 . THOUGH THE ASSESSEE HAS FURNISHED WRITTEN SUBMISSION BEFORE THE ASSESSING OFFICER, BUT DID NOT FURNIS H PAN AND ADDRESS OF THESE CREDITORS. IN THE ABSENCE OF COMPLETE DETAILS, THESE CREDIT ENTRIES COULD NOT BE VERIFIED BY THE ASSESSING OFFICER. NOT ONLY BEFORE THE LD. CIT(A), BUT BEFORE US ALSO ASSESSEE HAS NOT FILED COMPLETE ADDRESS OF THE CREDITORS AND PAN OF THE CREDITORS. IN THE ABSENCE OF THE COMPLETE INFORMATION WITH REGARD TO THE CREDITORS, THE CREDIT LIABILITY SHOWN IN ITS BOOKS OF ACCOUNT CANNOT BE CALLED TO BE GENUINE LIABILITY AND WE ACCORDINGLY FIND FORCE IN THE FINDINGS OF THE ASSESSING OFFI CER THAT THESE LIABILITIES ARE BOGUS LIABILITIES. WHEN THE ASSESSEE HAS SHOWN AND BROUGHT THE CREDIT LIABILITY IN ITS BOOKS OF ACCOUNT, THE ONUS IS ALWAYS UPON IT TO PRODUCE THE RELEVANT EVIDENCE TO PROVE THE GENUINENESS OF THE SAME. IF THE ASSESSEE FAIL S TO PROVE THE GENUINENESS OF THE LIABILITY, THE SAID LIABILITY SHOULD BE TREATED AS BOGUS LIABILITY, AS IT REDUCE S THE PROFIT OF THE ASSESSEE. SINCE THE ASSESSEE HAS NOT FURNISHED ANY EVIDENCE EITHER BEFORE US OR BEFORE THE LOWER AUTHORITIES TO ESTABLISH THAT THE LIABILITIES ARE GENUINE LIABILITIES, THEY ARE RIGHTLY TREATED BY THE ASSESSING OFFICER AS BOGUS LIABILITY. ACCORDINGLY, WE SET ASIDE THE ORDER OF THE LD. CIT(A) ON THIS ISSUE AND RESTORE THAT OF THE ASSESSING OFFICER. C.O. NO.20/LKW/2012: 30 . THE C ROSS OBJECTION IS FILED BY THE ASSESSEE IN SUPPORT OF THE ORDER OF THE LD. CIT(A) FOR ASSESSMENT YEAR 2007 - 08. THE GROUNDS RAISED IN THE CROSS OBJECTION HAVE ALREADY BEEN ADJUDICATED BY US IN THE REVENUES APPEAL. WE, THEREFORE, FIND NO MERIT IN THE CROS S OBJECTION. ACCORDINGLY, THE CROSS OBJECTION HAS BECOME INFRUCTUOUS AND HENCE WE DISMISS THE SAME. PRINT TO PDF WITHOUT THIS MESSAGE BY PURCHASING NOVAPDF ( HTTP://WWW.NOVAPDF.COM/ ) : - 22 - : 31 . IN THE RESULT, APPEALS OF THE REVENUE ARE PARTLY ALLOWED FOR STATISTICAL PURPOSES AND THE CROSS OBJECTION OF THE ASSESSEE IS DISMISSED. ORDER WAS PRONOU NCED IN THE OPEN COURT ON THE DATE MENT I ONED ON THE CAPTION PAGE. SD/ - SD/ - [ A. K. GARODIA ] [ S UNIL KUMAR Y ADAV ] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 18 TH SEPTEMBER , 2014 JJ: 1009 COPY FORWARDED TO: 1 . APPELLANT 2 . RESPONDENT 3 . CIT(A) 4 . CIT 5 . DR ASSISTANT REGISTRAR PRINT TO PDF WITHOUT THIS MESSAGE BY PURCHASING NOVAPDF ( HTTP://WWW.NOVAPDF.COM/ )