M/s. Golden Time Services Pvt. Ltd., New Delhi V. DCIT, New Delhi

ITA 6740/DEL/2014

• Counselvise Citation: 674020114 RSA 2014
• Duration Of Justice: 10 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-11-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC 2
• Next Hearing Date: 02-11-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 11-12-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GARIMA JAIN
• Assessee Lawyers: SUBHASH GUPTA ITP
• Keywords: Unexplained cash credit; Additional evidence
• Section: 143(3); 68

Judgement Text

1 IN THE INCOME TAX APPELATE TRIBUNAL DELHI BENCH SMC-2: NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER ITA NO. 6740/DEL/2014 A.Y. : 2007-08 M/S GOLDEN TIME SERVICES PVT. LTD., VS. DCIT, C IRCLE 12(1) FP-21A, PITAMPURA, CR BUILDING, DELHI 110 034 NEW DELHI (PAN : AAACG2150Q) (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. SUBHASH GUPTA, ITP DEPARTMENT BY : MS. GARIMA JAIN, SR. DR DATE OF HEARING : 02-11-2015 DATE OF ORDER : 02-11-2015 O R D E R THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-IV, NEW DELHI DATED 30.9.2014 PERTAINING TO ASSESSMENT YEAR 2007-08. 2. THE GROUNDS OF APPEAL READ AS UNDER:- I) THE LD. CIT(A) HAS ERRED IN DISALLOWED APPEAL ADDIT ION OF RS. 7,50,000/- ON THE FACTS AND CIRCUMSTANCES OF THE CA SE AND HAS NOT APPRECIATED THE FACTS, EVIDENCES, SUBMISSIONS M ADE BY THE APPELLANT INCORRECT PERSPETIVE. 2 II) ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A) HAD ERRED TO ACCEPT THE REMAND REPORT CONFIRM THE ADDIT ION OFRS. 7,50,000/- MADE ON ACCOUNT OF UNSECURED LOAN CREDIT ORS. III) ON THE FACTS AND CIRCUMTANCES OF THE CASE THE LD. CIT(A) HAD ERRED TO CONFIRM THE ADDITION OF RS. 7,50,000/- MAD E ON ACCOUNT OF UNSECURED LOAN CREDITORS. IV) THE APPELLANT CRAVES LEAVE TO ADD/ AMEND ANY OF THE SAID GROUND OF APPEAL. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E FILED RETURN OF INCOME AT A LOSS OF RS. (-) 14,29,688/- ON 30.10.2007. THE SAM E WAS PROCESSED U/S. 143(1) AND SUBSEQUENTLY THE CASE WAS SELECTED FOR SCRUTINY BY ISSUE OF NOTICE U/S. 143(2) ON 15.9.2008. ANOTHER NOTICE U/S. 143(2) WAS ISSU ED ON 23.4.2009. IN RESPONSE AUTHORISED REPRESENTATIVES FOR THE ASSESSEE ATTEND ED THE PROCEEDINGS FROM TIME TO TIME AND FILED REQUISITE DETAILS WHICH ARE PLACED O N RECORD. DURING THE RELEVANT YEAR THE ASSESSEE COMPANY HAS DERIVED INCOME FROM MANUFACTURING OF M.S. INGOTS AND TRADING OF STEEL AND IRON ITEMS. DURING THE CO URSE OF HEARING AUTHORISED REPRESENTATIVE PRODUCED BOOKS OF ACCOUNTS WHICH HAV E BEEN TEST CHECKED. THE ASSESSEE WAS ASKED TO FILE THE DETAILS REGARDING TH E FRESH INCREASE OF RS. 7,50,000/- IN UNSECURED LOANS. ON PERUSAL, IT IS OBSERVED THAT THE INCREASE IS DUE TO THE FOLLOWING UNSECURED RECEIVED DURING THE YEAR :- SWASTIK METAL & FERRO ALLOYS RS. 3,50,000/- NISHANT JAIN RS. 2,00,000/- VEENA JAIN RS. 2,00,000/- TOTAL TOTAL TOTAL TOTAL RS. 7,50,000/ RS. 7,50,000/ RS. 7,50,000/ RS. 7,50,000/- -- - 3 3.1 IN RESPECT OF SWASTIK METAL & FERRO ALLOYS, COPY OF ITR HAS NOT BEEN FURNISHED AND FURTHER ON PERUSAL OF BANK STATEMENT IT IS OBSE RVED THAT CREDIT ENTRIES JUST BEFORE THE ISSUE OF CHEQUES TO THE ASSESSEE COMPANY HAVE N OT BEEN RECONCILED. THEREFORE, THE SOURCE OF ENTRY REMAINED UNEXPLAINED. 3.2 IN RESPECT OF SH. NISHANT JAIN, IT IS OBSERVED F ROM THE BANK STATEMENT FILED THAT PRIOR TO ISSUE OF CHEQUE THERE IS A CASH DEPOSIT ON 29.11.2006 OF THE SAME AMOUNT. FURTHER, FROM THE COPY OF ITR FURNISHED, IT IS SEEN THAT HIS TOTAL INCOME FOR RELEVANT YEAR IS RS. 1,06,210/- ONLY. FROM THE ABOVE FACTS AN D CIRCUMSTANCES IT IS CLEAR THAT THE SAID PARTY DOES NOT HAVE ANY CAPACITY TO ADVANC E SUCH A LOAN TO THE ASSESSEE. 3.3 IN RESPECT OF SMT. VEENA JAIN, IT IS OBSERVED FR OM THE BANK STATEMENT FILED THAT PRIOR TO ISSUE OF CHEQUE THERE IS A ENTRY OF DEPOSI T ON 02.12.2006 OF THE SAME AMOUNT. FURTHER/ NO COPY OF THE ITR FILED FOR THE REL EVANT ASST. YEAR HAS BEEN FURNISHED BY HER DURING THE COURSE OF PROCEEDINGS. FROM THE ABOVE FACTS AND CIRCUMSTANCES IT IS CLEAR THAT THE SAID PARTY DOES NOT HAVE ANY CAPACITY TO ADVANCE SUCH A LOAN TO THE ASSESSEE. 3.4 IN LIGHT OF THE AFORESAID FACTS AND THE DETAIL ED DISCUSSION ABOVE, THE SUM OF RS. 7,50,000/-, RECEIVED BY THE ASSESSEE FROM THE A FORESAID PARTIES IS TREATED AS UNEXPLAINED CASH CREDITS IN THE HANDS OF THE ASSESS EE. THE SUM OF RS. 7,50,000/- IS HEREBY ADDED TO THE INCOME OF THE ASSESSEE. THEREAFT ER, THE AO COMPLETED THE ASSESSMENT U/S. 143(3) OF THE I.T. ACT, 1961 VIDE HIS ORDER DATED 06.11.2009. 4. AGGRIEVED WITH THE AFORESAID ORDER DATED 06.11.20 09, ASSESSEE APPEALED BEFORE THE LD. CIT(A), WHO VIDE IMPUGNED ORDER DATED 30.9.2014 HAS PARTLY ALLOWED THE APPEAL OF THE ASSESSEE BY CONFIRMING T HE ADDITION MADE BY THE AO. THE RELEVANT PARA NO. 7.7 TO 7.8 AT PAGE NO. 9 & 10 O F THE IMPUGNED ORDER IS REPRODUCED HEREUNDER FOR SAKE OF CLARITY. 4 7.7 I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS O F THE LD. AR. ASSESSMENT ORDER PASSED BY THE AO, ADDITIONAL EVID ENCE SUBMITTED BY THE APPELLANT, REMAND REPORT OF THE AO AND REJOI NDER OF THE APPELLANT ON THE AO'S REMAND REPORT. I FIND THAT THE AO HAS ADDED RS.7,50,OOO/- ON ACCOUNT OF CREDIT ENTRIES IN THE N AME OF THREE PARTIES AS UNDER: SWASTIK METAL & FERRO ALLOYS RS. 3,50,000/- NISHANT JAIN RS. 2,00,000/- VEENA JAIN RS. 2,00,000/- TOTAL TOTAL TOTAL TOTAL RS. 7,50,000/ RS. 7,50,000/ RS. 7,50,000/ RS. 7,50,000/- -- - 7.8. THE APPELLANT FAILED TO SUBMIT NECESSARY EVIDEN CE TO THE SATISFACTION OF THE AO REGARDING THE IDENTITY, CRED ITWORTHINESS AND GENUINENESS OF THE TRANSACTIONS IN RESPECT OF THE A BOVE CREDIT ENTRIES DURING THE ASSESSMENT PROCEEDINGS. THE APPELLANT FIL ED DETAILS BY WAY OF ADDITIONAL EVIDENCE WHICH CONTAINS THE AFFIDAVIT S FROM THE ABOVE THREE CREDITORS. ON PERUSAL OF THE AFFIDAVITS, I FI ND THAT THE SAME ARE ON RS.10 STAMP PAPER AND NONE OF THEM HAVE BEEN NOTARIZ ED. THEREFORE, THE SAME CANNOT BE TREATED AS VALID AFFIDAVITS. I FU RTHER FIND THAT ALL THE AFFIDAVITS HAVE BEEN PREPARED IN THE SIMILAR FORM A ND STYLE. ALL THE STAMP PAPERS HAVE BEEN PURCHASED FROM THE SAME VEND OR ON 13.01.2012. I FURTHER FIND THAT ALL THE STAMP PAPERS WERE PURCHASED BY THE APPELLANT COMPANY IN ITS OWN NAME. THUS, IT IS CLEAR THAT THE STAMP PAPER WERE PURCHASED BY THE APPELLANT AND AFFIDAVIT S WERE PREPARED SINCE THESE AFFIDAVITS HAVE NOT BEEN AFFIRMED BEFOR E ANY JUDICIAL MAGISTRATE OR NOTARIZED BEFORE A PUBLIC NOTARY, THE Y CANNOT BE 5 ACCEPTED AS VALID AFFIDAVITS. I FURTHER FIND THAT NO NE OF THE ABOVE CREDITORS HAVE PERSONALLY APPEARED BEFORE THE AO TO CONFIRM THE TRANSACTIONS WITH THE APPELLANT. SECTION 68 REQUIRE S THAT WHEN ANY SUM IS FOUND CREDITED IN THE BOOKS OF ACCOUNTS OF AN AS SESSEE, HE IS REQUIRED TO PROVE THE IDENTITY & CREDITWORTHINESS O F THE CREDITOR AND GENUINENESS OF THE TRANSACTION TO THE SATISFACTION OF THE AO. ALL THE THREE INGREDIENTS I.E. IDENTITY OF THE CREDITOR, CR EDITWORTHINESS OF THE CREDITOR AND GENUINENESS OF THE TRANSACTION ARE REQ UIRED TO BE PROVED CUMULATIVELY AND NOT ALTERNATIVELY. I FIND THAT TH E APPELLANT HAS FAILED TO PROVE THE ABOVE REQUIREMENTS OF SECTION 68. THER EFORE, I DO NOT FIND ANY INFIRMITY IN THE ADDITION OF RS. 7,50,000/- MAD E BY THE AO AND THE SAME IS CONFIRMED. 5. AGAINST THE ABOVE ORDER, THE ASSESSEE IS IN APPE AL BEFORE THE TRIBUNAL. 6. AT THE OUTSET, LD. COUNSEL OF THE ASSESSEE STATE D THAT ASSESSEE HAS RECEIVED THE UNSECURED LOAN FROM ALL THE THREE PARTIES THR OUGH CHEQUES AND PAN NO., AFFIDAVIT FRESH CONFIRMATION, ELECTION CARD AND BAN K STATEMENT HAVE BEEN FILED AS ADDITIONAL EVIDENCE U/R 46(A) BEFORE THE AUTHORITIE S BELOW, BUT THE SAME WERE NOT CONSDIERED BY THE REVENUE AUTHORITIES. HENCE, THE ISSUE IN DISPUTE MAY BE SET ASIDE TO THE FILE OF THE AO FOR FRESH CONSIDERATIO N. 7. ON THE OTHER HAND, LD. DR RELIED UPON THE ORDER S OF THE LOWER AUTHORITIES. 8. I HAVE HEARD BOTH THE PARTIES AND PERUSED THE REC ORDS, ESPECIALLY THE ORDERS OF THE REVENUE AUTHORITIES. I FIND THAT THE LD. CIT(A) HAS OBSERVED IN HIS IMPUGEND ORDER THAT THE ASSESSEE FAILED TO SUBMIT NECESSARY EVIDENCE TO THE SATISFACTION OF THE AO REGARDING THE IDENTITY, CREDITWORTHINESS AND GEN UINENESS OF THE TRANSACTIONS IN 6 RESPECT OF THE ABOVE CREDIT ENTRIES DURING THE ASS ESSMENT PROCEEDINGS. I ALSO FIND THAT LD. CIT(A) HAS MAINLY DOUBTED THE AFFIDAVIT OF THE THREE CREDITORS AND STATED SINCE THEY ARE NOT BEING NOTORISED HENCE, ARE NOT VALID. HOWEVER, I FIND THAT THE ASSESSEE RECEIVED UNSECURED LOAN BY WAY OF CHEQUE S AND ALL THE INFORMATION RELATED TO THE CREDITORS LIKE CONFIRMATION, PAN NO. , ELECTION CARD, PAYMENT RECEIVED THROUGH CHEQUE A/C PAYEE AND RELIED ON THE CASE OF KAMAL MOTORS CIT (2003) 131 TAXMAN 155 (RAJ) WHICH HAS NOT BEEN CONSDI ERED BY THE AO AS WELL AS BY THE LD. CIT(A). IN VIEW OF THE ABOVE, I AM OF THE CONSIDERED VIEW THAT MATTTER NEEDS TO BE EXAMINED AFRESH BY THE AO. ACCORDINGLY, I REMIT THE ISSUES IN DISPUTE TO THE FILE OF THE AO FOR ASSESSMENT DENOVO, AFTER AF FORDING FULL OPPORTUINTY TO THE ASSESSEE, IN ACCORDANCE WITH LAW. 9. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE STANDS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 02/11/2015. SD/- [H.S. SIDHU] JUDICIAL MEMBER DATE: 02/11/2015 SRBHATNAGAR COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4.CIT (A) 5. D R, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES 7