Appeal details
Counselvise Citation
[2019] 116 COUNSELVISE.COM (IT) 9953 (ITAT-JAIPUR)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
1 year(s) 28 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
30-05-2019
Appeal Filed By
Assessee
Order Result
Allowed
Bench Allotted
A
Assessment Year
2010-2011
Appeal Filed On
02-05-2018
Judgement Text
VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES A, JAIPUR JH JES'K LH 'KEKZ] YS[KK LNL; ,OA JH FOT; IKY JKO] U;KF;D LNL; DS LE{K BEFORE: SHRI RAMESH C SHARMA, AM & SHRI VIJAY PAL RAO, JM VK;DJ VIHY LA-@ ITA NO. 606 & 607/JP/2018 FU/KZKJ.K O'KZ@ ASSESSMENT YEARS : 2010-11 & 2012-13 M/S SHUBHAM PRIME BUILDERS PVT. LTD., CHOUDHARY HOTEL PREMISES, AERODRAME CIRCLE, KOTA. CUKE VS. D.C.I.T., CENTRAL CIRCLE, KOTA. LFKK;H YS[KK LA -@THVKBZVKJ LA-@ PAN/GIR NO.: AANCS 3049 M VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS @ ASSESSEE BY : SHRI P.C. PARWAL (CA) JKTLO DH VKSJ LS @ REVENUE BY : SHRI VARINDER MEHTA (CIT-DR) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 30/04/2019 MN?KKS 'K.KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 30/05/2019 VKNS'K@ ORDER PER: R.C. SHARMA, A.M. THESE ARE THE APPEALS FILED BY THE ASSESSEE AGAINST THE SEPARATE ORDERS OF LD.CIT(A)-2, UDAIPUR DATED 22/03/2018 FOR THE A.Y. 2010-11 AND 2012-13 IN THE MATTER OF ORDER PASSED U/S 153A READ WITH SECTION 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT, THE ACT). 2. IN BOTH THE APPEALS, THE ASSESSEE IS AGGRIEVED FOR THE ADDITION MADE U/S 68 TREATING PART OF THE UNSECURED LOANS AS UNEXPLAINED. ITA 606 & 607/JP/2018_ SHUBHAM PRIME BUILDERS P. LTD. VS DCIT 2 3. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORD PERUSED. THE FACTS IN BRIEF ARE THAT T HE ASSESSEE IS ENGAGED IN THE BUSINESS OF REAL ESTATE. THE RETURN OF INCOME FOR THE A.Y. 2010-11 WAS FILED ON 13.10.2010 U/S 139(1) DECLARING NIL INCOME. SEARCH AND SEIZURE OPERATIONS WERE CARRIED OUT ON 03.03.2016 AT VARIOUS PREMISES OF SHUBHAM GROUP . KOTA TO WHICH ASSESSEE COMPANY BELONGS. IN RESPONSE TO NOTICE U/S 153A DT. 05.09.2016, ASSESSEE AGAIN FILED THE RETURN ON 03.10.2016 DECLARING NIL INCOME. IN THE ASSESSMENT FRAMED U/S 153A, AO MADE ADDITION/ DISALLOWANCE U/S 40A(3)/ 68 OF THE ACT. BEFORE LD. CIT(A) ASSESSEE CLAIMED THAT THE DISALLOWANCE MADE IN THE ASSESSMENT FRAMED U/S 153A IS ILLEGAL & BAD IN LAW AS THE ASSESSMENT PROCEEDINGS FOR THE YEAR UNDER CONSIDERATION WAS NOT PENDING AS ON THE DATE OF SEARCH. HOWEVER, LD. CIT(A) HELD THAT THE PROCESSING OF RETURN U/S 143(1)(A) IS NOT AN ASSESSMENT AND THEREFORE, DISALLOWANCE MADE U/S 153A IS VALID. 4. IT WAS ARGUED BY THE LD AR OF THE ASSESSEE THAT THE ASSESSEE FILED THE ORIGINAL RETURN OF INCOME ON 13.10.2010. THE TIME LIMIT FOR SERVICE OF NOTICE U/S 143(2) FOR THE RELEVANT AY WAS UPTO 30.09.2011. NO NOTICE WAS ISSUED TO THE ASSESSEE BEFORE THIS DATE. THUS, THE ASSESSMENT PROCEEDINGS FOR THE YEAR UNDER CONSIDERATION WERE NOT PENDING ON THE DATE OF SEARCH. IN SEARCH NO INCRIMINATING MATERIAL INDICATING ANY UNDISCLOSED INCOME FOR THE YEAR UNDER CONSIDERATION WAS FOUND. SECTION ITA 606 & 607/JP/2018_ SHUBHAM PRIME BUILDERS P. LTD. VS DCIT 3 153A EMPOWERS THE AO TO ISSUE NOTICE TO A PERSON WHO IS SEARCHED U/S 132 TO FILE RETURN IN RESPECT OF 6 A.Y.'S PRECEDING THE ASSESSMENT YEAR IN WHICH SEARCH IS CONDUCTED AND TO ASSESS OR REASSESS THE TOTAL INCOME OF THESE YEARS NOTWITHSTANDING ANYTHING CONTAINED IN SECTION 139, 147 AND OTHER RELATED SECTIONS. THUS, THE ASSESSMENT U/S 153A ARE NOT DE NOVO ASSESSMENTS SINCE THE PURPOSE OF MAKING THE REASSESSMENTS UNDER SECTION 153A IS TO SUBJECT TO TAX, THE HITHERTO UNDISCLOSED INCOME UNEARTHED DURING THE COURSE OF THE SEARCH. IT IS FOR THIS REASON THAT THE SECOND PROVISO TO SECTION 153A(1) PROVIDES ONLY FOR THE ABATEMENT OF THE PENDING ASSESSMENTS. THIS IS DONE TO ENSURE THAT THE REGULAR ASSESSMENT PROCEEDINGS UNDER THE NORMAL PROVISIONS AND THE ASSESSMENT PROCEEDINGS UNDER SECTION 153A ARE NOT CONDUCTED SIMULTANEOUSLY SINCE THAT WOULD RESULT IN REDUNDANCY. THEREFORE, THE ALREADY COMPLETED ASSESSMENTS DO NOT ABATE AND THEY SHALL HOLD THE FIELD. 5. IN VIEW OF THE ABOVE, IT WAS CONTENDED THAT SINCE NO INCRIMINATING MATERIAL WAS FOUND DURING SEARCH AND THE ASSESSMENT WAS NOT PENDING AS ON THE DATE OF SEARCH, NO ADDITION WAS WARRANTED IN RESPECT OF UNSECURED LOANS TAKEN IN EARLIER YEARS. 6. THE LD AR OF THE ASSESSEE HAS RELIED ON THE DECISIONS OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. SKS ISPAT AND POWER LTD. ITA 606 & 607/JP/2018_ SHUBHAM PRIME BUILDERS P. LTD. VS DCIT 4 (2017) 398 ITR 584 (BOM), CIT VS. GURINDER SINGH BAWA (2016) 386 ITR 483 (BOM) AND THE DECISION OF HONBLE GUJARAT HIGH COURT IN THE CASE OF PR.CIT VS. DIPAK JASHVANTLAL PANCHAL (2017) 397 ITR 153 (GUJ), IN SUPPORT OF THE PROPOSITION THAT THE SCOPE OF ASSESSMENT U/S 153A IS LIMITED TO THE INCRIMINATING EVIDENCE FOUND DURING THE COURSE OF SEARCH IN RESPECT OF YEARS WHICH ARE PENDING AS ON THE DATE OF SEARCH. HOWEVER, IN RESPECT OF ASSESSMENT, WHICH HAVE ALREADY BEEN COMPLETED OR FOR WHICH PERIOD FOR ISSUING OF NOTICE U/S 143(2) OF THE ACT HAS ALREADY BEEN EXPIRED AS ON THE DATE OF SEARCH, NO ADDITION CAN BE MADE AS PER THE LD AR. 7. WITH REGARD TO MERIT OF THE ADDITION, IT WAS THE CONTENTION OF THE LD AR THAT I N ASSESSMENT PROCEEDINGS ASSESSEE FILED CONFIRMATIONS FROM THESE PARTIES, ITR AND THEIR BANK STATEMENTS. HE FURTHER FILED THE DETAILS OF SHARES ALLOTTED TO THEM IN THE NEXT YEAR AGAINST THE AMOUNT RECEIVED. THE LD AR HAS RELIED ON THE DECISION OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF KANHAIALAL JANGID VS. ACIT 217 CTR 354 (RAJ) AND ARAVALI TRADING CO. VS ITO 187 TAXMAN 338 (RAJ). 8. ON THE OTHER HAND, THE LD CIT-DR HAS ARGUED THAT SINCE THE ORIGINAL ASSESSMENT WAS COMPLETED U/S 143(1) OF THE ACT IN TERMS OF DECISION OF HONBLE SUPREME COURT IN THE CASE OF RAJESH JHAWERI, THE SAME CANNOT ITA 606 & 607/JP/2018_ SHUBHAM PRIME BUILDERS P. LTD. VS DCIT 5 BE TREATED AS AN ASSESSMENT, THEREFORE, THEORY OF ABATEMENT WILL NOT APPLY WITH RESPECT TO SUCH PROCESSING OF RETURN U/S 143(1) OF THE ACT. WITH REGARD TO MERIT OF ADDITION UPHELD BY THE LD. CIT(A), IT WAS CONTENTION OF THE LD CIT-DR THAT IMMEDIATELY BEFORE ISSUE OF CHEQUE, CASH WAS DEPOSITED IN THE BANK ACCOUNT, THEREFORE, ONLY TO THE EXTENT OF SUCH CASH DEPOSIT, CREDITWORTHINESS AND GENUINENESS OF LOAN CREDITOR WAS NOT PROVED. ACCORDINGLY, THE LD. CIT(A) WAS JUSTIFIED IN UPHOLDING THE ADDITION TO THAT EXTENT. 9. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND CAREFULLY GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. FROM THE RECORD, WE FOUND THAT D URING THE A.Y. 2010-11 ASSESSEE RECEIVED AMOUNT OF RS.16,50,000/- BY ACCOUNT PAYEE CHEQUE FROM THE FOLLOWING PERSONS: - NAME DATE AMOUNT TOTAL AMOUNT ARJUN KHANGAR 17.8.2009 19.08.2009 2,50,000/- 6,00,000/- 8,50,000/- SUMAN KHANGAR 16.10.2009 3,00,000/- 3,00,000/- SHOBHNA KHANGAR 17.08.2009 15.10.2009 3,00,000/- 2,00,000/- 5,00,000/- TOTAL 16,50,000/- 10. BY THE IMPUGNED ORDER, THE LD. CIT(A) CONFIRMED THE ADDITION OF RS.5 LACS U/S 68 OF THE IT ACT, 1961 BY TREATING PART OF THE UNSECURED LOANS TAKEN FROM THE FOLLOWING PERSONS AS UNEXPLAINED: - ITA 606 & 607/JP/2018_ SHUBHAM PRIME BUILDERS P. LTD. VS DCIT 6 NAME OF THE PERSON LOAN TAKEN LOAN CONSIDERED UNEXPLAINED ARJUN KHANGAR RS.8.50 LACS RS.1 LACS SUMAN KHANGAR RS.3 LACS RS.1 LACS SOHHANA KHANGAR RS.5 LACS RS.3 LACS 11. WITH RESPECT TO ABOVE CREDITORS, WE FOUND THAT THE A SSESSEE HAS FULLY EXPLAINED THE LOAN RECEIVED BY IT BY FURNISHING THE CONFIRMATION, ITR AND BANK STATEMENT OF CREDITORS. THE LD. CIT(A) CONFIRMED THE ADDITION TO THE EXTENT OF IMMEDIATE CASH DEPOSITED IN THEIR BANK ACCOUNT. HOWEVER, WHILE DOING SO HE HAS NOT BROUGHT ANY EVIDENCE TO PROVE THAT THE CASH AMOUNT DEPOSITED IN THE BANK ACCOUNT OF THESE PERSONS BELONGS TO ASSESSEE. THUS, IN THE ABSENCE OF ANYTHING TO ESTABLISH THAT THE CASH AMOUNT DEPOSITED IN THE BANK ACCOUNT OF THE CREDITORS FLEW FROM THE ASSESSEE, PART OF THE CASH CREDITS CANNOT BE TREATED AS UNEXPLAINED INCOME OF THE ASSESSEE. 12. THE HONBLE RAJASTHAN HIGH COURT IN THE CASE OF KANHAIALAL JANGID VS ACIT (SUPRA) HAS HELD AS UNDER: WHILE IT IS THE ASSESSEE'S BURDEN TO FURNISH THE EXPLANATION RELATING TO CASH CREDITS, THE ASSESSEE'S BURDEN DOES NOT EXTEND BEYOND PROVING THE EXISTENCE OF THE CREDITOR AND FURTHER PROVING THAT SUCH CREDITOR OWNS TO HAVE ADVANCED THE AMOUNT CREDITED IN THE ACCOUNT OF ASSESSEE. HOWEVER, THE BURDEN DOES NOT GO ITA 606 & 607/JP/2018_ SHUBHAM PRIME BUILDERS P. LTD. VS DCIT 7 BEYOND TO PUT THE ASSESSEE UNDER AN OBLIGATION TO FURTHER PROVE AS TO WHEREFROM THE CREDITOR HAS GOT OR PROCURED THE MONEY TO BE DEPOSITED OR ADVANCED TO THE ASSESSEE. THE EXPLANATION FURNISHED BY THE CREDITOR ABOUT THE SOURCE FROM WHERE HE PROCURED THE MONEY TO BE DEPOSITED OR ADVANCED TO THE ASSESSEE IS NOT RELEVANT FOR THE PURPOSE OF REJECTING THE EXPLANATION FURNISHED BY THE ASSESSEE AND MAKING ADDITIONS OF SUCH DEPOSITS AS INCOME OF THE ASSESSEE FROM UNDISCLOSED SOURCES BY INVOKING SECTION 68 UNLESS IT CAN BE SHOWN BY THE DEPARTMENT THAT THE SOURCE OF SUCH MONEYS COME FROM THE ASSESSEE HIMSELF OR SUCH SOURCE COULD BE TRACED TO THE ASSESSEE ITSELF. IN THE PRESENT CASE, WHILE THE EXISTENCE OF THE CREDITOR IS NOT IN DOUBT & HE HAS ADMITTED TO HAVE ADVANCE THE LOAN TO THE ASSESSEE, THE FACT THAT THE EXPLANATION FURNISHED BY THE CREDITOR ABOUT HIS SOURCE OF SUCH ADVANCEMENT HAS NOT BEEN ACCEPTED BY THE REVENUE AUTHORITY CANNOT LEAD TO ANY PRESUMPTION THAT THE SOURCE OF SUCH ADVANCEMENT BY CREDITOR EMANATED FROM THE ASSESSEE. THEREFORE, ADDITION IN THE INCOME OF THE ASSESSEE AS CASH CREDIT CANNOT BE SUSTAINED. 13. THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF ARAVALI TRADING CO. VS. ITO (SUPRA) HAS HELD AS UNDER: ONCE THE EXISTENCE OF THE CREDITORS IS PROVED AND SUCH PERSONS OWN THE CREDITS WHICH ARE FOUND IN THE BOOKS OF THE ASSESSEE, THE ASSESSEE'S ONUS STANDS DISCHARGED AND THE LATTER IS NOT FURTHER REQUIRED TO PROVE THE SOURCE FROM WHICH THE CREDITORS COULD HAVE ACQUIRED THE MONEY DEPOSITED WITH HIM EITHER IN TERMS OF S. 68 OR ON GENERAL PRINCIPLE. MERELY BECAUSE THE DEPOSITORS EXPLANATION ABOUT THE SOURCES OF MONEY WAS NOT ACCEPTABLE TO THE AO, IT CANNOT BE PRESUMED THAT THE DEPOSIT MADE BY THE CREDITORS IS MONEY BELONGING TO ASSESSEE ITSELF IF THE CREDITORS EXPLANATION ABOUT THE SOURCE OF DEPOSITS IS NOT FOUND TO BE ACCEPTABLE, THE INVESTMENT OWNED BY SUCH PERSONS MAY BE SUBJECTED TO PROCEEDINGS FOR INCLUSION OF THE AMOUNTS AS THEIR INCOME FROM UNDISCLOSED SOURCES OR IF THEY ARE FOUND BENAMI, THE REAL OWNER CAN BE BROUGHT ITA 606 & 607/JP/2018_ SHUBHAM PRIME BUILDERS P. LTD. VS DCIT 8 TO TAX. IN THE ABSENCE OF ANYTHING TO ESTABLISH THAT THE SOURCES OF THE CREDITORS DEPOSITS FLEW FROM THE ASSESSEE, THE CASH CREDITS CANNOT BE TREATED AS UNEXPLAINED INCOME OF THE ASSESSEE. 14. APPLYING THE PROPOSITION OF LAW LAID DOWN BY THE HONBLE JURISDICTIONAL HIGH COURT TO THE FACTS OF THE INSTANT CASE, WE DO NOT FIND ANY MERIT IN THE ADDITION UPHELD BY THE LD. CIT(A). IT IS PERTINENT TO MENTION HERE THAT THE ASSESSEE HAS EXPLAINED IDENTITY OF LOAN CREDITOR, GENUINENESS OF LOAN TRANSACTION AS WELL AS AVAILABILITY OF FUNDS IN THE CREDITORS ACCOUNT. DURING THE A.Y. 2010-11 AND 2012-13 UNDER CONSIDERATION, THE ASSESSEE IS NOT REQUIRED TO PROVE SOURCE OF THE SOURCE. ACCORDINGLY, WE DO NOT FIND ANY MERIT IN THE ADDITION SO CONFIRMED BY THE LD. CIT(A). 15. SIMILARLY, IN THE A.Y. 2012-13, THE LD. CIT(A) CONFIRMED THE ADDITION OF RS. 1.00 LAC U/S 68 OF THE ACT BY HOLDING THAT SOURCE OF GIVING LOAN TO THIS EXTENT IS BY CASH DEPOSIT. HOWEVER, WHILE DOING SO HE HAS NOT BROUGHT ANY EVIDENCE TO PROVE THAT THE CASH AMOUNT DEPOSITED IN THE BANK ACCOUNT OF THESE PERSONS BELONGS TO ASSESSEE. THUS, IN THE ABSENCE OF ANYTHING TO ESTABLISH THAT THE CASH AMOUNT DEPOSITED IN THE BANK ACCOUNT OF THE CREDITORS FLEW FROM THE ASSESSEE, PART OF THE CASH CREDITS CANNOT BE TREATED AS UNEXPLAINED INCOME OF THE ASSESSEE MORE PARTICULARLY WHEN ASSESSEE HAS REPAID THE LOAN IN SUBSEQUENT YEARS. ITA 606 & 607/JP/2018_ SHUBHAM PRIME BUILDERS P. LTD. VS DCIT 9 16. AS WE HAVE ALREADY DECIDED THE MERIT OF THE ADDITION, THEREFORE, WE ARE NOT GOING INTO THE LEGAL ISSUES SO RAISED BY THE ASSESSEE. 17. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE ALLOWED IN TERMS INDICATED HEREINABOVE. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH MAY, 2019. SD/- SD/- FOT; IKY JKO JES'K LH 'KEKZ (VIJAY PAL RAO) (RAMESH C SHARMA) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 30 TH MAY, 2019 *RANJAN VKNS'K DH IZFRFYFI VXZSFKR @ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ @ THE APPELLANT- M/S SHUBHAM PRIME BUILDERS PVT. LTD., KOTA. 2. IZR;FKHZ @ THE RESPONDENT- THE D.C.I.T., CENTRAL CIRCLE, KOTA. 3. VK;DJ VK;QDR @ CIT 4. VK;DJ VK;QDRVIHY @ THE CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ @ DR, ITAT, JAIPUR 6. XKMZ QKBZY @ GUARD FILE (ITA NO. 606 & 607/JP/2018) VKNS'KKUQLKJ @ BY ORDER, LGK;D IATHDKJ @ ASST. REGISTRAR
