KISHAN TRADING COMPANY, Kota V. ITO, BUNDI

ITA 658/JPR/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 99526 (ITAT-JAIPUR)
• Duration Of Justice: 2 year(s) 4 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-11-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 15-07-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: O P BHATEJA CIT DHK
• Keywords: Opportunity of being heard; Corroborative evidences
• Section: 143(3)

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR JH VH-VKJ-EHUK] YS[KK LNL; ,OA JH YFYR DQEKJ] U;KF; D LNL; DS LE{K BEFORE: SHRI T.R.MEENA, AM & SHRI LALIET KUMAR, JM VK;DJ VIHY LA -@ ITA NO. 658/JP/2013 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR : 2008-09. M/S KISHAN TRADING COMPANY, BUNDI. CUKE VS. INCOME TAX OFFICER, BUNDI. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO. AABFK 5146 N VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : WRITTEN SUBMISSIONS JKTLO DH VKSJ LS@ REVENUE BY : SHRI O.P. BHATEJA (ADDL. CIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 20/11/2015. MN?KKS'K .KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 27/11/2015. VKNS'K@ ORDER PER T.R. MEENA, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER DATED 16/04/2013 OF THE LEARNED CIT(A), AJMER FOR A.Y. 20 08-09. THE RESPECTIVE GROUNDS OF APPEAL ARE AS UNDER:- 1. THAT ON THE FACTS, IN THE CIRCUMSTANCES OF THE CA SE AND IN VIEW OF THE DETAILED WRITTEN AND ORAL SUBMISSIONS MAD E AND THE EVIDENCE ALREADY AVAILABLE ON A.OS OWN RECORD A ND FURTHER EVIDENCES ADDUCED BY THE ASSESSEE THE ORDER S OF THE LEARNED LOWER AUTHORITIES ARE AGAINST THE LAW AND FAC TS OF THE CASE. 2 ITA NO. 658/JP/2013 KISHAN TRADING CO. VS ITO 2. THAT THE LD A.O. GROSSLY ERRED IN MAKING ADDITION OF RS. 3,91,470/- BY TREATING FOLLOWING CASH CREDITS OF RS. 3,53,430/- AS UNEXPLAINED AND ALSO DISALLOWING INTEREST OF RS. 38,040/- PAID ON SAID CASH CREDITS WHILE BRUSHING ASIDE THE A SSESSEES OBJECTIONS AND EXPLANATIONS AND THE LD CIT(A), KOTA ALSO ERRED IN CONFIRMING THE SAME: S.NO. NAME AMOUNT OF LOAN TAKEN (RS.) INTEREST PAID (RS.) 1 SMT. KANTI BAI DHAKAR W/O- RAM KARAN, ANTHRA 4500/ - 710/ - 2. SH. BRIJ RAJ S/O JANKI LAL, SHRIPURA 100000/ - 12250/ - 3. SMT. KAMLA BAI W/O - SH. JANKI LAL, SHRIPURA 100 000/ - 12250/ - 4. SMT. RUKMANI BAI W/O - SH. DURGA LAL, ANTHADA 24800/ - 1740/ - 5. SH. KISHAN LAL S/O - SH. GOPAL, RAHGPURIA 64299/ - 11090/ - 6. SH. KALU LAL S/O - SH. LUNI LAL, LADPURA 8460/ - - 7. SHRI KANHIYA LAL S/O - SH. BALAJI 1013/ - - 8. SHRI SAWARA S/ O - SHRI PARMANAND, CHANDHEDI 20000/ - - 9. SH. PREM SHANKAR S/O SH. JANKI LAL 7858/ - - 10. SH. AJIT SINGH S/O - SH. MADAN LAL, CHANDHEDI 8000/ - - 11. SH. ISHWAR NAGAR S/O - SH. OM SHANKER, SHRIPURA 14500/ - - TOTAL 353430/ - 38040/ - 3. THAT THE LD ASSESSING OFFICER WHILE BRUSHING ASID E THE ASSESSEES OBJECTIONS AND EXPLANATIONS FURTHER ERRE D IN MAKING ADDITION OF RS. 10,000/- TOWARDS DIFFERENCE IN 3 ITA NO. 658/JP/2013 KISHAN TRADING CO. VS ITO UNSECURED LOANS AND THE LEARNED CIT(A), KOTA ALSO E RRED IN UPHOLDING THE SAME. 4. THAT UNDER THE FACTS AND CIRCUMSTANCES OF THE CAS E THE LD ASSESSING OFFICER HAS ALSO ERRED IN INITIATION OF P ENAL PROCEEDINGS U/S 271(1)(C) OF THE IT ACT, 1961 FOR AD DITIONS MADE AS ABOVE AND THE LD CIT(A) ALSO ERRED IN UPHOLD ING THE SAME. 2. GROUNDS NO. 1 AND 2 OF THE APPEAL ARE AGAINST DI SALLOWANCE OF INTEREST OF RS. 38,040/- AND ADDITION OF CASH CREDITORS OF R S. 3,53,430/-. THE LD ASSESSING OFFICER OBSERVED THAT THE ASSESSEE FILED ITS RETURN OF INCOME ON 31/3/2009 DECLARING TOTAL INCOME AT RS. 85,010/-. T HE CASE WAS SCRUTINIZED U/S 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT). THE LD ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HAD TAKEN UNSECU RED LOAN AT RS. 1,18,50,290/-. THE ASSESSING OFFICER GAVE REASONABLE OPPORTUNITY OF BEING HEARD IN FORM OF FURNISHING THE CONFIRMATION OF UNS ECURED LOANS, SQUARED UP LOANS. IT WAS SUBMITTED BY THE ASSESSEE THAT THESE C ASH CREDITORS WERE OUTSTANDING AGAINST THE SALE PROCEEDS OF THE CREDIT ORS. THE CONFIRMATION FILED BY THE ASSESSEE WAS VERIFIED BY THE ASSESSING OFFIC ER, HE FOUND AT RS. 3,91,470/- ON WHICH INTEREST HAS BEEN PAID AT RS. 38 ,040/-. AFTER CONSIDERING THE ASSESSEES REPLY, THE LD ASSESSING OFFICER HELD THAT THE ASSESSEE HAS NOT PRODUCED THE SALE VOUCHERS OF FARMERS, THEREFORE, I T WAS DIFFICULT TO VERIFY FROM THE BOOKS OF ACCOUNT. THE BURDEN HAS TO BE DISC HARGED WITH THE POSITIVE 4 ITA NO. 658/JP/2013 KISHAN TRADING CO. VS ITO MATERIAL. HE FURTHER OBSERVED THAT IT HAS BEEN HELD BY THE VARIOUS COURTS OF LAW THAT WHEN IT IS CONTENDED THAT THE PERSON HAD AD VANCED MONEY OR HAD GIVEN A LOAN IT HAS TO BE ESTABLISHED THAT THE PERS ON HAD THE CAPACITY TO GIVE THE MONEY. THEREFORE, THE ASSESSEE HAS NOT PROVED T HE CREDITWORTHINESS OF THE CREDITORS. HE FURTHER RELIED ON THE DECISION IN THE CASE OF CIT VS. PRECISION FINANCE PVT. LTD. 208 ITR 465, CIT VS MOTOR GENERAL F INANCE LTD. (DELHI) 254 ITR 449 (DELHI), THEREFORE, HE DISALLOWED CASH CREDIT ORS OF RS. 3,53,430/- ALONGWITH INTEREST OF RS. 38,040/-, IN TOTAL RS. 3,9 1,470/-. 3. BEING AGGRIEVED BY THE ORDER OF THE LD ASSESSING OFFICER, THE ASSESSEE CARRIED THE MATTER BEFORE THE LD CIT(A), WHO HAD CONF IRMED THE ADDITION BY OBSERVING AS UNDER:- 4.3 I HAVE CONSIDERED THE CONTENTIONS OF THE APPEL LANT AS WELL AS ASSESSMENT ORDER. IT IS NOTED THAT THE ASSESSEE HAD CLAIMED THE LOANS OF RS. 3,53,430/- FROM VARIOUS CREDITORS CLAI MING THAT CONFIRMATION OF THE ACCOUNTS WERE FILED BEFORE THE A .O. AND SOURCE OF DEPOSITS WAS CROPS SOLD BY THESE PERSONS THROUGH THEIR HUSBAND OR FATHER, SO NO VIKRAY PARCHI WERE AVAILABL E IN THE NAMES OF THE CREDITORS. HOWEVER,, IT IS APPARENT THA T ALL THESE LOANS ARE IN THE SUM OF RS. 20,000/- OR BELOW THAT A MOUNT AND ASSESSEE HAS NOT PRODUCED ANY EVIDENCE TO SHOW THAT THESE CREDITORS OR THEIR RELATIVES HAVE SOLD THEIR GOODS THROUGH THE ASSESSEE AS CLAIMED AND THE SALE PROCEEDS WERE LYING WITH THE 5 ITA NO. 658/JP/2013 KISHAN TRADING CO. VS ITO ASSESSEE. THE CLAIM OF THE ASSESSEE IS NOT SUPPORTED BY ANY DOCUMENTARY EVIDENCE EXCEPT THE LEDGER ACCOUNT. THE A.O. HAS POINTED OUT THAT NO NUMBERED VIKRAY PARCHI IN THE N AME OF SAID CREDITORS OR THEIR RELATIVES WERE PRODUCED. IN FACT, NO CLAIM WAS MADE BY THE ASSESSEE BEFORE THE A.O. THAT VIKRAY PA RCHIES COULD NOT PRODUCE IN THE NAME OF CREDITORS AS THE CROP WAS SOLD IN THE NAMES OF THEIR HUSBAND/FATHER. THE SAID CLAIM IS ALS O NOT SUPPORTED BY ANY EVIDENCE. THE ONUS LIES ON THE ASSE SSEE TO PROVE THAT ABOVE CASH CREDITORS HAD DEPOSITED THE S UM WITH THE ASSESSEE AND SOURCE OF THE SAID SUM WAS SALES MADE B Y THE CREDITORS/BY THEIR RELATIVES THROUGH THE ASSESSEE I N THE AGRICULTURAL MANDI. THE ASSESSEE HAS NOT DISCHARGED HIS ONUS TO THIS EFFECT. ACCORDINGLY, THE ADDITION MADE BY THE A.O. OF RS. 3,91,470/- (RS. 3,53,430/- AS THE PRINCIPAL AMOUNT AND RS. 38,040/- AS INTEREST AMOUNT) IS CONFIRMED. 4. NOW THE ASSESSEE IS IN APPEAL BEFORE US. NOBODY A PPEARED ON BEHALF OF THE ASSESSEE BUT FILED WRITTEN SUBMISSIONS. IN ITS WR ITTEN SUBMISSIONS, THE ASSESSEE HAS SUBMITTED THAT HE HAS SUBMITTED CONFIR MATIONS BEFORE THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT P ROCEEDINGS OF ALL THE 11 FARMERS TO THE TUNE OF RS. 3,53,430/-. HE ALSO STAT ED THAT THE ASSESSEE HAS PROVED THE IDENTITY, GENUINENESS AND CREDITWORTHINE SS OF THE CREDITORS. THE ASSESSEE HAS FILED COMPLETE DETAILS TO PROVE THE ID ENTITY. MOREOVER, ALMOST ALL THE CREDITORS ARE OLD CREDITORS, WHICH ALSO EXISTED IN PRECEDING YEAR, WHICH 6 ITA NO. 658/JP/2013 KISHAN TRADING CO. VS ITO CAN BE VERIFIED FROM THE ORDER OF THE LD CIT(A), KOT A DATED 31/5/2010 IN APPEAL NO. 349/09-10. THE LD ASSESSING OFFICER ONLY ASKED TO PRODUCE THE SALE BILLS OF GOODS SOLD BY THE ASSESSEE. IT IS PRACTICE IN THE MANDI THAT ALL THE GOODS ARE BROUGHT IN THE MANDI BY THE MALE MEMBERS. HOWEVER, THE SALE PARCHIES MAY BE IN THE NAME OF THEIR WIFE, MOTHER, BROTHER, FATHER, CHILDREN ETC., THEREFORE, SALES BILLS ARE NOT IN THE NAME OF CASH CREDITORS. THE CASH CREDITORS ARE MEAGER AMOUNTS COMPARED TO TURNOVER O F THE ASSESSEE. IT IS OPEN TO ASSESSING OFFICER TO CROSS EXAMINE THE CASH CREDITORS. SOME OF THE CASH CREDITORS ARE COMING FROM THE PRECEDING YEARS, WHICH CANNOT BE ADDED DURING THE YEAR UNDER CONSIDERATION. IT IS FURTHER ARGUED THAT CREDITORS ARE AGRICULTURISTS. THE SOURCE OF DEPOSIT HAD BEEN EXPL AINED BY THE ASSESSEE I.E. FROM SALE OF THE AGRICULTURAL PRODUCE. THEY HAD DEPO SITED MONEY OUT OF SALE PROCEEDS, THEREFORE, HE PRAYED TO DELETE THE ADDITI ON. 5. AT THE OUTSET, THE LD DR HAS VEHEMENTLY SUPPORTE D THE ORDER OF THE LD CIT(A). 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON THE RECORD. THE ASSESSEE ITSELF ADMITTED THAT TH E SALE BILLS ARE NOT AVAILABLE WITH THE ASSESSEE AND SOME OF THE CASH CRE DITORS IN THE NAME OF FAMILY MEMBERS, WHICH CANNOT BE CORRELATED WITH THE S ALE PROCEEDS AS WELL AS 7 ITA NO. 658/JP/2013 KISHAN TRADING CO. VS ITO LAND RECORD. AS PER SECTION 68, THE ASSESSEE HAS TO PROVE THE IDENTITY OF THE PERSON, GENUINENESS OF THE TRANSACTIONS AND CREDITWO RTHINESS OF THE ASSESSEE. IT IS POSSIBLE THAT THESE CASH CREDITORS HAD DEPOSI TED THE MONEY WITH THE ASSESSEE OUT OF SALE PROCEEDS BUT NEXUS HAS TO BE E STABLISHED BY THE ASSESSEE, THEREFORE, WE UPHOLD THE ORDER OF THE LD C IT(A) ON CASH CREDITORS AND DISALLOWANCE OF INTEREST. 7. THE 3 RD GROUND OF THE APPEAL IS AGAINST CONFIRMING THE ADD ITION OF RS. 10,000/- TOWARDS DIFFERENCE IN UNSECURED LOAN. THE LD ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HAD SHOWN UNSECURED LOAN IN THE BALANCE SHEET AT RS. 23,44,830/- WHEREAS HE FILED THE DETAILS AT RS. 23,34,830/-. THERE WAS A DIFFERENCE OF RS. 10,000/- IN UNSECURED LOAN. THE LD ASSESSING OFFICER GAVE REASONABLE OPPORTUNITY OF BEING HEARD ON THIS ISSUE . AFTER CONSIDERING THE ASSESSEES REPLY, IT HAS BEEN HELD THAT THE ASSESSE E HAS NOT EXPLAINED THE DIFFERENCE WITH SUPPORTING EVIDENCE. HE ONLY ARGUED THAT THIS WAS THE DIFFERENCE DUE TO CALCULATION ERRORS. ACCORDINGLY, HE MADE ADDITION OF RS. 10,000/-. 7.1 IN FIRST APPEAL, THE LD CIT(A) HAD CONFIRMED TH E ADDITION BY OBSERVING THAT THE ASSESSEE HAS NOT RECONCILED THE DIFFERENCE ONLY ADMITTED THE MISTAKE IN PREPARING THE DETAILS OF UNSECURED LOANS. 8 ITA NO. 658/JP/2013 KISHAN TRADING CO. VS ITO 7.2 ASSESSEE REITERATED THE SAME ARGUMENTS MADE BEF ORE THE LOWER AUTHORITIES AND PRAYED TO DELETE THE ADDITION. AT T HE OUTSET, THE LD DR HAS VEHEMENTLY SUPPORTED THE ORDER OF THE LD CIT(A) AS N O EXPLANATION HAS BEEN GIVEN BY THE ASSESSEE. 7.3 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON THE RECORD. WE HAVE VERIFIED THE FACTS OF THE CA SE, AS SUCH NO RECONCILIATION HAS BEEN MADE BY THE ASSESSEE WITH EV IDENCE, THEREFORE, WE FIND NO REASON TO INTERVENE IN THE ORDER OF THE LD CIT(A). ACCORDINGLY, THIS GROUND OF APPEAL IS DISMISSED. 8. THE 4 TH GROUND OF APPEAL IS PREMATURE, THEREFORE, NO ADJUD ICATION IS REQUIRED. 9. IN THE RESULT, THE ASSESSEES APPEAL IS DISMISSE D. ORDER PRONOUNCED IN THE OPEN COURT ON 27/11/2015. SD/- SD/- YFYR DQEKJ VH-VKJ-EHUK (LALIET KUMAR) (T.R. MEENA) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 27 TH NOVEMBER, 2015 RANJAN* VKNS'K DH IZFRFYFI VXZSFKR @ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ @ THE APPELLANT- M/S KISHAN TRADING COMPANY, BUNDI. 2. IZR;FKHZ @ THE RESPONDENT- THE INCOME TAX OFFICER, BUNDI. 9 ITA NO. 658/JP/2013 KISHAN TRADING CO. VS ITO 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.658/JP/2013) VKNS'KKUQLKJ @ BY ORDER, LGK;D IATHDKJ @ ASST. REGISTRAR