M/S VIJAY GROUP OF COMPANIES, SIKAR V. ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE, SIKAR

ITA 699/JPR/2019

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 5931 (ITAT-JAIPUR)
• Duration Of Justice: 4 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-10-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2011-2012
• Appeal Filed On: 14-05-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: JAI SINGH
• Keywords: Additional evidence; Corroborative evidences
• Section: 133(6); 208; 68

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENC H B JAIPUR JH FOT; IKY JKO] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI VIKRA M SINGH YADAV, AM VK;DJ VIHY LA- @ ITA NO. 699/JP/2019 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR :2011-12 M/S VIJAY GROUP OF COMPANIES VIJAY BHAWAN, BAJAJ ROAD, WARD NO. 7, SIKAR CUKE VS. ACIT, CIRCLE, SIKAR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AAHFV7718F VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : SHRI P.C. PARWAL (CA) JKTLO DH VKSJ LS @ REVENUE BY : SHRI JAI SINGH (JCIT) LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 02/09/2019 MN?KKS'K.KK DH RKJH[ K@ DATE OF PRONOUNCEMENT: 01/10/2019 VKNS'K@ ORDER PER: VIKRAM SINGH YADAV, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF LD. CIT(A)-1, JODHPUR DATED 18.02.2019 WHEREIN THE ASSESSEE HAS T AKEN THE FOLLOWING GROUNDS OF APPEAL:- THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN CO NFIRMING THE ADDITION OF RS. 32 LACS U/S 68 BY TREATING THE CAPITAL INTRO DUCED BY THE FOLLOWING MEMBERS OF AOP AS UNEXPLAINED:- S. NO. NAME OF MEMBER AMOUNT 1. SH. YOGENDRA SINGH CHOUHAN RS. 13 LACS 2. SH. BHANWAR SINGH MAKORI RS. 15 LACS 3. SH. MOTA RAM SAINI RS. 2 LACS 4. SH. IQBAL RS. 1 LACS 5. SH. IQRAM RS. 1 LACS TOTAL RS. 32 LACS ITA NO. 699/JP/2019 M/S VIJAY GROUP OF COMPANIES, SIKAR VS. ACIT, SIKA R 2 2. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT T HE ASSESSEE IS AN ASSOCIATION OF PERSONS (AOP) WHICH DERIVES INCOME F ROM ROYALTY COLLECTION CONTRACT. IT FILED ITS RETURN OF INCOME ON 26-03-20 12 DECLARING TOTAL INCOME OF RS.29,22,560/-. DURING THE ASSESSMENT PROCEEDINGS, THE AO OBSERVED THAT CERTAIN MEMBERS HAVE INTRODUCED HUGE AMOUNT OF CAPI TAL FOR THE BUSINESS AGGREGATING TO RS.76,45,000/- AND AFTER CALLING FOR THE ASSESSEES EXPLANATION AND SEEKING INFORMATION FROM THE MEMBERS BY INVOKIN G SECTION 133(6) OF THE ACT, HE MADE ADDITION OF RS.76,45,000/- BY TREATING THE SAME AS UNEXPLAINED CAPITAL INTRODUCTION EARNED FROM UNDISCLOSED SOURCE S OF INCOME. 3. BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE HE LD CIT(A) AND FILED VARIOUS EVIDENCES LIKE BANK STATEM ENTS, CONFIRMATIONS, ITRS OF THE MEMBERS IN SUPPORT OF ITS CLAIM AND REQUESTED T O ENTERTAIN THE SAME AS ADDITIONAL EVIDENCE UNDER RULE 46A OF IT RULES, 196 2. AFTER CONSIDERING THE REMAND REPORT FROM THE AO, DELETED THE ADDITION TO THE EXTENT OF RS.44,45,000/- BUT CONFIRMED THE ADDITION OF RS.32 LACS BY HOLDING THAT SOURCE AND GENUINENESS OF TRANSACTION REMAINS UNEXPLAINED. AGAINST THE SAID FINDINGS, THE ASSESSEE IS NOW IN APPEAL BEFORE US. 4. DURING THE COURSE OF HEARING, THE LD AR SUBMITT ED THAT THE ASSESSEE AOP WAS ORIGINALLY CONSTITUTED W.E.F. 19.03.2010 WITH T HIRTY EIGHT MEMBERS. IT WAS RECONSTITUTED ON 03.12.2010 IN WHICH FIFTEEN MEMBER S RETIRED AND TWO NEW MEMBERS JOINED AND AS ON 31.03.2011 THERE WERE TWEN TY FIVE MEMBERS. IT WAS SUBMITTED THAT THE AMOUNT OF CAPITAL HAS BEEN CONTR IBUTED BY THE MEMBERS OF THE AOP. THEY ARE THE MEMBERS OF AOP SINCE ITS INCE PTION W.E.F. 19.03.2010 (F.Y. 2009-10). THE GENUINENESS OF THE TRANSACTION CANNOT BE DOUBTED FOR THE REASON THAT EVERY MEMBER HAS ENTERED INTO A PARTNER SHIP DEED DT 03.12.2010 TO EARN INCOME AND CONSEQUENTLY, HAS BOUND THEMSELV ES BY BEING JOINTLY AND SEVERALLY LIABLE FOR THE PAYMENT OF TAX DUE FROM TH E AOP. THESE MEMBERS REFUSED TO COOPERATE DURING THE ASSESSMENT PROCEEDI NGS DUE TO THE DISPUTES/ ITA NO. 699/JP/2019 M/S VIJAY GROUP OF COMPANIES, SIKAR VS. ACIT, SIKA R 3 MISUNDERSTANDINGS. AN AFFIDAVIT DT. 18.12.2015 OF O NE OF THE MEMBER VIJAY SINGH TANWAR IN THIS REGARD. THUS, THE IDENTITY OF THE MEMBERS AND GENUINENESS OF THE TRANSACTION CANT BE DOUBTED. T HE EXPLANATION IN RESPECT OF THE CAPITAL CONTRIBUTION OF RS.32,00,000/- IS SUBMI TTED AS UNDER:- NAME & ADDRESS AMOUNT OF CAPITAL INTRODUCED OBSERVATION OF CIT(A) EXPLANATI ON OF ASSESSEE YOGENDRA SINGH CHOUHAN HOUSE NO. 598, SECTOR 10, GURGAON, HARYANA RS.13,00,000/ - SH. YOGENDRA SINGH CHOUHAN IS ONE OF THE MEMBER OF APPELLANT AOP AND EQUALLY LIABLE TO TAX PROCEEDINGS. THE GENUINENESS OF CASH TRANSACTION WORTH RS.13 LACS REMAINED UNEXPLAINED. CAPITAL OF RS.13,00,000/ - WAS INTRODUCED BY SHRI YOGENDRA SINGH CHOUHAN ON 02.04.2010 I.E. AT THE BEGINNING OF THE FINANCIAL YEAR UNDER CONSIDERATION. THE MEMBER IS NOT COOPERATING WITH OTHER MEMBERS DUE TO SOME DIFFERENCES AND DISPUTES AS IS EVIDENT FROM THE AFFIDAVIT OF ONE OF THE AOP MEMBER. HE HAS WITHDRAWN THE WHOLE AMOUNT OF CAPITAL. RATHER THERE IS A DEBIT BALANCE OF RS.90,69,452/- AS ON 31-03-2011 (COPY OF HIS LEDGER ACCOUNT IN BOOKS OF ASSESSEE IS ENCLOSED). THE ASSESSEE HAS ALSO REQUESTED SPECIFICALLY TO CALL HIM FOR VERIFICATION OF FACTS BUT STILL HIS ATTENDANCE WAS NOT ENFORCED. THEREFORE, THE CAPITAL CONTRIBUTION OF RS.13 LACS MADE BY HIM CANNOT BE CONSIDERED UNEXPLAINED. BHANWAR SINGH MAKORI (CHOUHAN) V.P.O MAKORDI, DI STT. NAGAUR (RAJ.) PAN: AYEPS2884C RS.15,00,000/ - AMOUNT OF RS.15 LACS WAS GIVEN IN CASH OUT OF BUSINESS SAVINGS AND FAMILYS AGRICULTURE INCOME KEPT AT HOME. HOWEVER, THERE IS NO FORCE IN THIS CONTENTION HIS CONFIRMATION IS ENCLOSED. IN REMAND PROCEEDINGS HE WAS PRODUCED FOR VERIFICATION AND HIS STATEMENT WAS RECORDED IN WHICH HE ACCEPTED TO HAVE GIVEN AMOUNT OF RS.15 LACS IN CASH. THE SOURCE OF SAME WAS EXPLAINED TO BE OUT OF ITA NO. 699/JP/2019 M/S VIJAY GROUP OF COMPANIES, SIKAR VS. ACIT, SIKA R 4 AS THE BANK FACILITIES WERE AVAILABLE IN THE NEARBY TOWNS AND HE BEING A PRUDENT BUSINESSMAN WOULD NOT KEEP THE HUGE CASH IDLE AT HOME. FURTHER THE SAID CREDITOR CLAIMED TO HAVE GIVEN THE AMOUNT OUT OF AGRICULTURAL INCOME BUT NO INCOME FROM AGRICULTURAL OPERATION HAS BEEN DECLARED IN THE ITR. OLD SAVINGS, CONTRACT RECEIPTS, INCOME FROM PROPERTY DEALING AND FAMILY AGRICULTURAL INCOME. IN THE STATEMENT HE EXPLAINED THE FACT OF HAVING AGRICULTURAL LAND OF 145 BIGHA IN HIS NAME AS WELL IN THE NAME OF FAMILY MEMBERS IN SUPPORT OF WHICH LAND DOCUMENTS WERE ALSO FILED. HE IS REGULARLY ASSESSED TO TAX. DURING THE YEAR HE FILED THE RETURN DECLARING AN INCOME OF RS.5,96,770/-. HE IS HAVING CAPITAL OF RS.1,08,19,601/- AS ON 31- 03-201 WHICH PROVES HIS CREDITWORTHINESS. HE HAS SHOWN THE INVESTMENT IN ASSESSEE AOP IN HIS BALANCE SHEET. HENCE, THE CAPITAL CONTRIBUTION OF RS.15,00,000/- RECEIVED FROM HIM IS FULLY EXPLAINED. THE ASSESSEE HAS NOT SHOWN THE AGRICULTURAL INCOME IN HIS RETURN AS IT IS THE INCOME OF HUF. THERE IS NO LAW THAT IF AN ASSESSEE HAS A BANK ACCOUNT HE CANT KEEP CASH IN HAND. HENCE, ONLY ON THIS BASIS NO ADVERSE INFERENCE CAN BE TAKEN. MOTA RAM SAINI V.P.O MANDA, DISTT. SIKAR (RAJ). RS.2,00,000/ - THE ASSESSEE NEITHER PRODUCED THE PERSON NOR FILED ANY CONFIRMATION. THE ONUS OF PROVING THE SOURCE OF SUM OF MONEY FOUND TO HAVE BEEN CREDITED IN THE BOOKS OF ACCOUNT IS ON HIM WHEREAS MOTARAM SAINI IS AN AGRICULTURIST HAVING 20 BIGHAS OF LAND. HIS AGRICULTURE INCOME IS ABOUT RS.50,000/- PER YEAR. HE HAS YEARLY INCOME OF ABOUT RS.1,50,000/- FROM ONION DEALING AND DAIRY. HIS ONE SON IS DOCTOR AND OTHER SON IS MOTOR CYCLE MECHANIC. NO ONE EXCEPT HIS WIFE IS DEPENDENT UPON HIM. HE ITA NO. 699/JP/2019 M/S VIJAY GROUP OF COMPANIES, SIKAR VS. ACIT, SIKA R 5 THE SOURCE OF CASH AND GENUINENESS OF TRANSACTION COULD NOT BE SATISFACTORILY EXPLAINED BY THE ASSESSEE. HAS CONTRIBUTED RS.2,00,000/- OUT OF HIS INCOME AND SAVING. IN SUPPORT OF THE SAME HE HAS FILED HIS AFFIDAVIT. HIS CONFIRMATION. THUS, THE SOURCE OF CAPITAL CONTRIBUTION IS FULLY EXPLAINED. IQBAL NEAR ANJUMAN GIRLS SCHOOL, MOHALLA QURESHIYAN, WARD NO.30, SIKAR (RAJ.) RS.1,00,000/ - THE ASSES SEE PRODUCED NO EVIDENCE IN SUPPORT OF HIS CONTENTION. THUS, THE SOURCE AND GENUINENESS OF CASH TRANSACTION WORTH RS.1 LACS REMAINED UNEXPLAINED BY THE ASSESSEE. MERE SUBMISSION OF AFFIDAVIT IS NOT ENOUGH TO DISCHARGE THE ONUS CAST UPON THE ASSESSEE. IQBAL IS A TRACTOR MECHANIC FROM LAST 32 YEARS HAVING A WORKSHOP ALONG WITH IQRAM AT SIKAR. HE EARNS ABOUT RS.13,000/- PER MONTH, LIVE IN HIS OWN HOUSE, HAS SIMPLE LIFE STYLE AND HOUSE HOLD EXPENSES ARE ABOUT RS.5,000/- P.M. HE HAS INVESTED THE AMOUNT IN THE AOP OUT OF HIS CURRENT YEAR INCOME AND SAVINGS OF EARLIER YEARS. IN SUPPORT OF THE SAME HE HAS FILED AN AFFIDAVIT. HIS CONFIRMATION IS AT. THUS, THE SOURCE OF CAPITAL CONTRIBUTION IS FULLY EXPLAINED. THE OPENING BALANCE IS RS.3 LACS AND NO ADDITION HAS BEEN MADE IN THE ASSESSMENT OF EARLIER YEARS. HENCE, NO ADDITION CAN BE MADE IN THE YEAR UNDER CONSIDERATION. IQRAM NEAR ANJUMAN GIRLS SCHOOL, MOHALLA QURESHIYAN, WARD NO.30, SIKAR (RAJ.) RS.1,00,000/ - THE ASSESSEE PRODUCED NO EVIDENCE IN SUPPORT OF HIS CONTENTION. THUS, THE SOURCE AND GENUINENESS OF CASH TRANSACTION WORTH RS.1 LACS REMAINED UNEXPLAINED BY THE ASSESSEE. MERE SUBMISSION OF AFFIDAVIT IS NOT IQRAM IS A TRACTOR MECHANIC FROM LAST 12 YEARS HAVING A WORKSHOP ALONG WITH IQBAL AT SIKAR. HE EARNS ABOUT RS.13,000/- PER MONTH, LIVE IN HIS OWN HOUSE, HAS SIMPLE LIFE STYLE AND HOUSE HOLD EXPENSES ARE ABOUT RS.5,000/- P.M. IN SUPPORT OF THE SAME HE HAS FILED AN AFFIDAVIT. HIS CONFIRMATION IS AT. THUS, THE SOURCE OF CAPITAL CONTRIBUTION IS FULLY EXPLAINED. THE OPENING ITA NO. 699/JP/2019 M/S VIJAY GROUP OF COMPANIES, SIKAR VS. ACIT, SIKA R 6 ENOUGH TO DISCHARGE THE ONUS CAST UPON THE ASSESSEE. BALANCE IS RS.3 LACS AND NO ADDITION HAS BEEN MADE IN THE ASSESSMENT OF EARLIER YEARS. HENCE, NO ADDITION CAN BE MADE IN THE YEAR UNDER CONSIDERATION. RS.32,00,000/ - 5. IT WAS SUBMITTED BY THE LD AR THAT FROM THE ABO VE TABLE, IT CAN BE NOTED THAT THE ASSESSEE HAS DISCHARGED ITS ONUS BY FURNIS HING ADEQUATE EVIDENCE, RETURN OF INCOME AND THE AFFIDAVITS OF THE MEMBERS CONFIRMING THE CONTRIBUTIONS MADE BY THEM. ONLY IN CASE OF YOGINDE R SINGH CHOUHAN, THE ASSESSEE COULD NOT PRODUCE CONFIRMATION DUE TO DIFF ERENCES AND DISPUTES BUT THE FACT THAT HE HAS OVERDRAWN HIS CAPITAL A/C BY R S.90,69,542/- IN ITSELF IS A TESTIMONY OF THE FACT THAT HE INTRODUCED CAPITAL OF RS.13 LACS IN THE YEAR UNDER CONSIDERATION. FURTHER, RELIANCE WAS PLACED ON THE FOLLOWING CASES:- ARAVALI TRADING CO. VS. ITO 187 TAXMAN 338 (RAJ.) CIT VS. H.S. BUILDERS (P.) LTD. 78 DTR 169 (RAJ.) KANHAIALAL JANGID VS. ACIT 217 CTR 354 (RAJ.) LABH CHAND BOHRA VS. ITO 189 TAXMAN 141/ 219 CTR 57 1 (RAJ.) 6. PER CONTRA, THE LD DR SUPPORTED THE ORDER OF THE LD CIT(A) AND TOOK US THROUGH THE FOLLOWING FINDINGS OF THE LD CIT(A) WHI CH READS AS UNDER:- 1. SHRI YOGINDRA SINGH CHOUHAN, GURGAON. THERE WAS TOTAL AMOUNT OF RS. 51,45,000/- (38,45,00 0/- + 13,00,000/-) CREDITED AS CAPITAL CONTRIBUTION BY ABOVE NAMED PER SON. REGARDING THE ABOVE ADDITION THE AO SUBMITTED IN HIS REPORT DATED 16.01 .2019 AS UNDER:- 'SH. YOGINDRA SINGH CHOUHAN, GURGAON : TOTAL AMOUNT OF RS. 51,45,000/- CREDITED AS CAPITAL CONTRIBUTION OF ABOVE NAMED PER SON. ASSESSEE NEITHER PRODUCED ABOVE PERSON FOR VERIFICATION NOR SUBMIT C ONFIRMATION OR NECESSARY EVIDENCE TO SUBSTANTIATE CLAIM OF CAPITAL CONTRIBUT ION. THE ASSESSEE RELY UPON ITA NO. 699/JP/2019 M/S VIJAY GROUP OF COMPANIES, SIKAR VS. ACIT, SIKA R 7 OF AFFIDAVIT DATED 18/12/2015 FROM SH. VIJAY SINGH TANWAR, ONE MEMBER OF THE AOP, STATING THAT DUE TO FINANCIAL DISPUTE WITH SH. YOGINDRA SINGH CHOUHAN, HE IS NOT CO-OPERATING IN THE PROCEEDINGS AND SUBMIT C OPY OF HIS DIVING LICENSE, BANK ACCOUNT STATEMENT. SUBMISSION OF COPY OF DRIVI NG LICENSE AND BANK ACCOUNT STATEMENT OF SH. YOGENDRA DOES NOT PROVE TH E GENUINENESS OF ABOVE TRANSACTION. THE CONTENTION THAT SH. YOGINDER SINGH CHOUHAN NOT CO-OPERATING IS NOT ACCEPTABLE AS SH. SH. YOGENDER SINGH CHOHAN IS ONE OF THE MEMBER OF AOP AND HE IS EQUALLY LIABLE TO TAX PROCEEDINGS NOTHING HAS BRING ON RECORD SUCH TO PROVE THEIR CONTENTION. SIMILAR CONTENTION WAS TAKE N DURING THE COURSE OF ASSESSMENT PROCEEDINGS. THE CLAIM OF THE ASSESSEE C ANNOT BE RELIED UPON AS LEGAL, JUDICIAL ACTION HAS BEEN TAKEN AGAINST THE P ERSON AFTER PERIOD OF MORE THAN 5 YEARS HAS ELAPSED. II) FURTHER, IT HAS BEEN ARGUED THAT OUT OF ABOVE A MOUNT OF RS. 51,45,000/-, AN AMOUNT OF RS. 38,45,000/- WAS NOT CAPITAL CONTRIBUT ION, THIS WAS THE MONEY CREDITED TO HIS ACCOUNT ON CANCELLATION OF DEMAND D RAFT ISSUED FROM AOP ON 25/02/211 AND 26/02/2011 IN FAVOUR OF MINING DEPART MENT FOR GETTING ROYALTY CONTRACTS IN HIS OWN NAME. IN SUPPORT OF CONTENTION BOOKS OF ACCOUNT PRODUCED, CERTIFICATE FROM DRAFT ISSUING BANK WAS SUBMITTED FOR VERIFICATION. ON THE PERUSAL OF LEDGER ACCOUNT AND OBC BANK ACCOUNT FOLLOWING AMOUNT FOUND DEBITED IN THE ACCOUNT OF YOGENDER SINGH CHOUHAN AND CREDITED IN THE OBC B ANK ACCOUNT. DATE VOUCHER NO. AMOUNT 25/02/2011 1999 65,14,342 2000 25,21,817 26/02/2011 2007 7,01,344 ITA NO. 699/JP/2019 M/S VIJAY GROUP OF COMPANIES, SIKAR VS. ACIT, SIKA R 8 LATTER ON 09/03/2011 AN AMOUNT OF RS. 38,45,000/- C REDITED IN THE ACCOUNT OF YOGINDER SINGH CHOUHAN AND DEBITED THE OBC BANK ACC OUNT THROUGH VOUCHER NO. 375. COPY OF MISSION, LEDGER ACCOUNT STATEMENT OF YOGINDRA SINGH CHOUHAN, OBC LEDGER ACCOUNT & BANK ACCOUNT STATEMEN T, DAY BOOK AND CERTIFICATE ISSUED BY OBC BANK, BIKANER ARE ENCLOSE D FOR YOUR KIND PERUSAL.' ON PERUSAL OF THE AO'S REPORT, I FIND THAT THE AMOU NT OF RS. 38,45,000/-WAS NOT CAPITAL CONTRIBUTION, THIS WAS T HE MONEY CREDITED TO HIS ACCOUNT ON CANCELLATION OF DEMAND DRAFT ISSUED FROM APPELLANT AOP ON 25/02/211 AND 26/02/2011 IN FAVOUR OF MINING DEPART MENT FOR GETTING ROYALTY CONTRACTS IN HIS OWN NAME. FURTHER IT WAS S TATED THAT SH. YOGENDER SINGH CHOHAN IS ONE OF THE MEMBER OF APPELLANT AOP AND EQUALLY LIABLE TO TAX PROCEEDINGS. IN SUCH CIRCUMSTANCES, THE GENUINE NESS OF CASH TRANSACTION WORTH RS. 13,00,000/-REMAINED UNEXPLAIN ED; HOWEVER ADDITION OF RS.38,45,000/- STANDS EXPLAINED. THUS, THE ADDIT ION OF RS. 13,00,000/- IS HERBY UPHELD AND THE ADDITION OF RS. 38,45,000/- IS DELETED HEREBY. 2. SH. BHANWAR SINGH MAKORI, NAGAUR. SH. BHANWAR SINGH MAKORI CONTRIBUTED RS. 15,00,000/ - IN CASH IN THE ASSESSEE'S CAPITAL. REGARDING THE ABOVE ADDITION THE AO SUBMIT TED IN HIS REPORT DATED 16.01.2019 AS UNDER:- 'AN AMOUNT OF RS. 15,00,000/- CREDITED IN THE NAME OF ABOVE PERSON AS CAPITAL CONTRIBUTION. SH. BHANWAR SINGH MAKORI WAS PRODUCED FOR VERIFICATION AND STATEMENT RECORDED. IN HIS STATEMENT HE ACCEPTED TO HAVE GIVEN AN AMOUNT OF RS. 15,00,000/-AS CAPITAL CONTRIBUTION. SH. BHANWAR SINGH CHOUHAN ENGAGED IN THE BUSINESS O F PROPERTY DEALING AND CONTRACT BUSINESS AND ALSO CLAIMED AGRICULTURE INCO ME. COPY OF LAND HOLDING OF FAMILY FURNISHED. ITA NO. 699/JP/2019 M/S VIJAY GROUP OF COMPANIES, SIKAR VS. ACIT, SIKA R 9 FURTHER, TO VERIFY THE SOURCE CREDITWORTHINESS AND GENUINENESS OF TRANSACTION, IT HAS BEEN STATED THAT THE AMOUNT OF RS. 15 LACS WERE GIVEN IN CASH OUT OF BUSINESS SAVINGS AND FAMILY AGRICULTURE INCOME KEPT AT HOME. BANK FACILITIES ARE AVAILABLE IN THE NEARBY TOWNS, THEREFORE IT CAN NOT BE BELIEVED THAT A PERSON HAVING BANKING FACILITY KEPT SUBSTANTIAL AMOUNT OF RS. 15.00 LACS AT HOME. IN THIS REGARD ON ENQUIRED IT HAS BEEN STATED THAT GEKJS IFJOKJ DS LNL; D`F'K VKENUH ?KJ IS GH J[KRS GS TO EXAMINE THE TREND OF KEEPING LARGE AMOUNT AT H OME, A QUESTION WAS RAISED TO PROVIDE DETAIL OF AMOUNT DEPOSITED IN THE BANK DURING DEMONIZATION PERIOD. IN REPLY THERETO, IT WAS STATED THAT NO AMO UNT WAS DEPOSITED DURING DEMONETIZATION. ASSESSEE HAS CLAIMED AGRICULTURE RE CEIPT BUT NO INCOME FROM AGRICULTURE OPERATION HAS BEEN DECLARED IN THE ITR. ASSESSEE HAS NOT PROVIDED ANY DOCUMENTARY EVIDENCES IN I.E. AGRICULTURE, SALE VOUCHERS, KRISHI UPAJ MANDI SAMITI SALE SLIP, ARHTIA ACCOUNT STATEMENT ET C. THE ASSESSEE HAS FURNISHED ONLY COPY OF ACKNOWLEDGE MENT OF ITR FILED FOR THE A.Y. 2011-12 AND FINANCIAL STATEMENT FOR THE F. Y.2010-11. FINANCIAL STATEMENT SUBMITTED BY THE ASSESSEE CAN NOT BE RELI ED UPON AS NO SUPPORTING EVIDENCE SUCH AS BOOKS OF ACCOUNTS, ITR FORM CONTAI NING DETAIL OF ASSETS AND LIABILITIES. COPY OF STATEMENT OF SH. BHANWAR SINGH ALONGWITH COPY OF LAND HOLDING DOCUMENT ARE ENCLOSED HEREWITH.' IT WAS STATED BEFORE THE AO THAT THE AMOUNT OF RS. 15 WAS GIVEN IN CASH OUT OF BUSINESS SAVINGS AND FAMILY'S AGRICULTU RE INCOME KEPT AT HOME. HOWEVER, I FIND NO FORCE IN THIS CONTENTION AS THE BANK FACILITIES WERE AVAILABLE IN THE NEARBY TOWNS AND HE BEING A PRUDEN T BUSINESSMAN WOULD NOT KEEP THE HUGE CASH IDLE AT HOME. FURTHER THE SAID C REDITOR CLAIMED TO HAVE GIVEN OUT OF AGRICULTURE INCOME BUT NO INCOME FROM AGRICULTURE OPERATION HAS BEEN DECLARED IN THE ITR. IN THIS REGARD, I AM OF V IEW THAT THE CAPITAL INTRODUCED IN CASH BY SH. BHANWAR SINGH WAS NOTHING BUT HIS UNDISCLOSED INCOME. APPELLANT FAILED TO PROVE THE CREDITWORTHIN ESS WITH REGARD TO CASH. ITA NO. 699/JP/2019 M/S VIJAY GROUP OF COMPANIES, SIKAR VS. ACIT, SIKA R 10 THUS, THE SOURCE OF CASH AND GENUINENESS OF CASH TR ANSACTION WORTH RS.15,00,000/-REMAINS UNEXPLAINED. ACCORDINGLY, THI S ADDITION IS HEREBY SUSTAINED. 5. SH. MOTA RAM SAINI, SIKAR. SH. MOTA RAM SAINI CONTRIBUTED RS. 2,00,000/- IN CA SH IN THE ASSESSEE'S CAPITAL. REGARDING THE ABOVE ADDITION THE AO SUBMITTED IN HI S REPORT DATED 16.01.2019 AS UNDER:- 'ASSESSEE NEITHER PRODUCED THE PERSON NOR ANY CONFI RMATION FROM SH. MOTA RAM SAINI DESPITE PROVIDING SUFFICIENT TIME. NO DOC UMENTARY EVIDENCE OF EXPLANATION IN THIS REGARD SUBMITTED.' THE APPELLANT NEITHER PRODUCED THE PERSON NOR FILED ANY CONFIRMATION OF SH. MOTA RAM SAINI BEFORE AO. THE ONUS OF PROVING T HE SOURCE OF A SUM OF MONEY FOUND TO HAVE BEEN CREDITED IN THE BOOKS OF A CCOUNT IS ON HIM. WHEREAS THE SOURCE OF CASH AND GENUINENESS OF TRANS ACTION WORTH RS. 2,00,000/- COULD NOT BE SATISFACTORILY EXPLAINED BY THE APPELLANT. UNDER THESE CIRCUMSTANCES THE ADDITION OF RS. 2,00,000/- IS HER BY UPHELD. 7. SH. LQBAL S/O YASIN KHAN, SIKAR. SH. LQBAL CONTRIBUTED RS. 1,00,000/- IN CASH TO THE ASSESSEE'S CAPITAL. REGARDING THE ABOVE ADDITION THE AO SUBMITTED IN HI S REPORT DATED 16.01.2019 AS UNDER:- 'AN AMOUNT OF RS. 1,00,000/- CREDITED IN THE NAME O F ABOVE PERSON AS CAPITAL CONTRIBUTION. SH. LQBAL WAS PRODUCED FOR VERIFICATI ON AND STATEMENT RECORDED. IN HIS STATEMENT HE ACCEPTED TO HAVE GIVEN AN AMOUNT O F RS. 1,00,000/- AS CAPITAL CONTRIBUTION. ITA NO. 699/JP/2019 M/S VIJAY GROUP OF COMPANIES, SIKAR VS. ACIT, SIKA R 11 DURING THE STATEMENT IT HAS BEEN STATED THAT HE IS A TRACTOR MECHANIC AND RUNS A TRACTOR WORKSHOP AT JAIPUR ROAD, SIKAR AND HAVING MONTHLY PRACTICE OF RS. 15,000/-THE FUND WAS GIVEN TO M/S VIJAY GROUP OF CO MPANIES OUT OF PAST SAVINGS. NO OTHER SUPPORTING DOCUMENTS WERE SUBMITT ED. COPY OF STATEMENT IS ENCLOSED HEREWITH.' SH. LQBAL SUBMITTED BEFORE THE AO THAT HE RUNS A TR ACTOR WORKSHOP AT JAIPUR ROAD, SIKAR EARNED MONTHLY INCOME OF RS. 15, 000/- AND CLAIMED TO HAVE GIVEN RS. 1,00,000/- FROM THIS INCOME. HOWEVER I FI ND NO STRENGTH IN HIS CONTENTION, THE SAME WERE NOT SUPPORTED WITH DOCUME NTARY EVIDENCES OF HIS BEING ABLE TO SAVE SUCH AN AMOUNT. THE APPELLANT PR ODUCED NO EVIDENCE IN SUPPORT OF THIS CONTENTION EITHER BEFORE THE AO OR BEFORE ME. THUS, THE SOURCE AND GENUINENESS OF CASH TRANSACTION WORTH RS. 1,00, 000/- REMAINED UNEXPLAINED BY THE APPELLANT. THUS, THIS ADDITION I S HEREBY UPHELD. 8. SH. LQRAM S/O LQBAL KHAN, SIKAR. SH. LQRAM CONTRIBUTED RS. 1,00,000/- IN CASH TO THE ASSESSEE'S CAPITAL. REGARDING THE ABOVE ADDITION THE AO SUBMITTED IN HI S REPORT DATED 16.01.2019 AS UNDER:- 'AN AMOUNT OF RS. 1,00,000/- CREDITED IN THE NAME O F ABOVE PERSON AS CAPITAL CONTRIBUTION. SH. LQBAL WAS PRODUCED FOR VERIFICATI ON AND STATEMENT RECORDED. IN HIS STATEMENT HE ACCEPTED TO HAVE GIVEN AN AMOUNT O F RS. 1,00,000/- AS CAPITAL CONTRIBUTION. DURING THE STATEMENT IT HAS BEEN STATED THAT HE IS A TRACTOR MECHANIC AND RUNS A TRACTOR WORKSHOP AT JAIPUR ROAD, SIKAR A ND HAVING MONTHLY INCOME OF RS. 15,000/-THE FUND WAS GIVEN TO M/S VIJAY GROU P OF COMPANIES OUT OF PAST SAVINGS. NO OTHER SUPPORTING DOCUMENTS I WERE SUBMI TTED. COPY OF STATEMENT IS ENCLOSED HEREWITH.' ITA NO. 699/JP/2019 M/S VIJAY GROUP OF COMPANIES, SIKAR VS. ACIT, SIKA R 12 SH. LQRAM SUBMITTED BEFORE THE AO THAT HE RUNS A TR ACTOR WORKSHOP AT JAIPUR ROAD, SIKAR AND EARNED MONTHLY INCOME OF RS. 15,000/- AND CLAIMED TO HAVE GIVEN RS. 1,00,000/- OUT OF THIS INCOME. HOWEV ER I FIND NO STRENGTH IN HIS CONTENTION, THE SAME WERE NOT SUPPORTED WITH DOCUME NTARY EVIDENCES OF HIS BEING ABLE TO SAVE SUCH AN AMOUNT. THE APPELLANT PR ODUCED EVIDENCE IN SUPPORT OF THIS CONTENTION NEITHER BEFORE THE AO NO R BEFORE ME. THUS, THE SOURCE AND GENUINENESS OF CASH TRANSACTION WORTH RS . 1,00,000/- REMAINED UNEXPLAINED BY THE APPELLANT. THUS, THIS ADDITION I S HEREBY UPHELD. THE APPELLANT COMPANY FURNISHED THE AFFIDAVITS WITH RESPECT TO CAPITAL INTRODUCE BY SH. LQBAL AND LQRAM KHAN, THE MERELY S UBMISSIONS OF AFFIDAVIT IS NOT ENOUGH TO DISCHARGE THE ONUS CAST UPON THE APPE LLANT. IDENTICAL ISSUE HAS BEEN COVERED BY THE HON'BLE ITAT, CHANDIGARH IN THE CASE OF ACTT VS. ASHOK NAYYAR [2006] 10 SOT 92 (CHANDIGARH) WHEREIN IT WAS HELD AS UNDER:- 'IN THE CASE OF REGULAR TAXPAYER AND IN THE CASE OF CREDITOR WHO HAS FILED THE RETURN FOR THE FIRST TIME OSTENSIBLY TO EXPLAIN THE CREDIT HAVE GOT TO BE DISTINGUISHED. MOREOVER, THE SURROUNDING CIRCUMSTAN CES AND PREPONDERANCE OF PROBABILITIES ARE ALSO TO BE TAKEN INTO CONSIDERATI ON IN JUDGING THE EVIDENCE ADDUCED BY THE ASSESSEE. IT IS WELL ESTABLISHED PRI NCIPLE OF LAW THAT IN THE CASE OF CASH CREDITS, IT IS THE DUTY OF THE ASSESSEE TO ESTABLISH THE IDENTITY OF THE CREDITOR, CAPACITY OF THE CREDITOR TO ADVANCE THE L OAN AND GENUINENESS OF THE CREDIT: THE MERE FACT THAT CONFIRMATION HAS BEEN FI LED OR EVEN AFFIDAVITS HAVE BEEN FILED OR THE MONEY HAS BEEN RECEIVED BY CHEQUE IS NOT ENOUGH TO DISCHARGE THE ONUS.' THE SAME PRINCIPLES OF LAW HAVE BEEN LAID DOWN IN T HE FOLLOWING CASES: (I) CIT V. NIVEDAN VANIJYA NIYOJAN LTD. [2003] 263 IT R 6231 (CAL.); (II) RAJSHREE SYNTHETICS (P.) LTD. V. CIT [2002] 256 I TR 331 2 (RAJ.); ITA NO. 699/JP/2019 M/S VIJAY GROUP OF COMPANIES, SIKAR VS. ACIT, SIKA R 13 (III) SHANKAR INDUSTRIES V. CIT [1978] 114 ITR 689 (CAL .) (IV) CIT V. PRECISION FINANCE (P.) LTD. [1994] 208 ITR 4653 (CAL.). 7. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. DURING THE COURSE OF ASSESSMENT PROCEEDI NGS, ON PERUSAL OF THE PARTNERS/MEMBERS CAPITAL ACCOUNT FOR THE YEAR ENDED 31 ST MARCH, 2011, THE ASSESSING OFFICER OBSERVED THAT MEMBERS HAVE INTROD UCED HUGE AMOUNT OF CAPITAL IN THE ASSESSEES BUSINESS AND ASSESSEE WAS ASKED TO FILE THE EVIDENCES IN SUPPORT OF SOURCE OF CAPITAL CONTRIBUTION DURING THE YEAR TOTALING TO RS. 76,45,000/- HOWEVER, THE ASSESSEE FAILED TO FILE AN Y EVIDENCE IN SUPPORT OF SOURCE OF CAPITAL CONTRIBUTION BY THE MEMBERS. FURT HER, NOTICES U/S 133(6) WERE ISSUED BY THE ASSESSING OFFICER HOWEVER NO REP LY HAS BEEN RECEIVED FROM ANY OF THE MEMBERS FROM WHOM THE INFORMATION WAS CA LLED FOR. GIVEN THAT THE ASSESSEE HAS FAILED TO ESTABLISH THE SOURCE OF THE CAPITAL INTRODUCED BY THE MEMBERS, THE WHOLE OF THE AMOUNT OF RS. 76,45,000/- WAS ADDED BACK TO THE RETURNED INCOME OF THE ASSESSEE TREATING THE SAME A S UNEXPLAINED CAPITAL INTRODUCTION EARNED FROM UNDISCLOSED SOURCES OF INC OME. IN APPEAL, THE ASSSESSEE FILED ADDITIONAL EVIDENCES AND REMAND REP ORT FROM THE ASSESSING OFFICER WAS CALLED FOR BY THE LD CIT(A). AFTER CONS IDERING THE REMAND REPORT AND THE SUBMISSIONS OF THE ASSESSEE, THE LD. CIT(A) ALL OWED TO THE PARTIAL RELIEF TO THE ASSESSEE AND IN RESPECT OF 5 MEMBERS, AN AMOUNT OF RS. 32,00,000/- WAS SUSTAINED WHICH HAS BEEN CONTESTED BY THE ASSESSEE BEFORE US. 8. IN CASE OF SH. YOGINDRA SINGH CHOUHAN, AS AGAINS T THE INITIAL ADDITION OF RS. 51,45,000/- MADE BY AO, THE LD. CIT(A) SUSTAINE D THE ADDITION TO THE EXTENT OF RS. 13,00,000/- FOR THE REASON THAT THE G ENUINENESS OF THE CASH TRANSACTIONS REMAINED UNEXPLAINED. IT WAS SUBMITTED BY THE LD. AR THAT THE CAPITAL OF RS. 13,00,000/- WAS INTRODUCED ON 02.04. 2010 HOWEVER SH. YOGINDRA SINGH CHOUHAN WAS NOT COOPERATING WITH THE ASSESSEE AND THE ASSESSEE HAS SPECIFICALLY REQUESTED THE AO FOR VERIFICATION OF F ACTS DIRECTLY FROM HIM. ITA NO. 699/JP/2019 M/S VIJAY GROUP OF COMPANIES, SIKAR VS. ACIT, SIKA R 14 HOWEVER HIS ATTENDANCE WAS NOT ENFORCED, IT WAS ACC ORDINGLY SUBMITTED THAT NO ADDITION SHOULD BE MADE IN ASSESSEES HANDS. WE FI ND THAT THE ASSESSING OFFICER HAS GIVEN ADEQUATE OPPORTUNITY TO THE ASSES SEE DURING THE COURSE OF ASSESSMENT PROCEEDINGS TO FURNISH THE DOCUMENTATION IN SUPPORT OF THE CAPITAL INTRODUCTION BY SH. YOGINDRA SINGH CHOUHAN. FURTHER , NOTICE U/S 133(6) WAS ALSO ISSUED WHICH REMAINED UNCOMPLIED WITH AND EVEN DURING THE REMAND PROCEEDINGS, THERE IS NOTHING WHICH HAS BEEN FILED OR BROUGHT ON RECORD IN SUPPORT OF THE SUBSTANTIATING THE SOURCE OF CAPITAL CONTRIBUTION BY SH. YOGINDRA SINGH CHOUHAN. IT IS NO DOUBT TRUE THAT THERE IS M OVEMENT IN HIS PERSONAL ACCOUNT MAINTAINED WITH THE ASSESSEES AOP, HOWEVER , THE FACT OF THE MATTER IS THAT THE EXPLANATION REGARDING THE SOURCE OF THE CA PITAL INTRODUCTION BY WAY OF CASH AND THE CREDITWORTHINESS OF SH. YOGINDRA SINGH CHOUHAN REMAINED UNSUBSTANTIATED TILL DATE AND INITIAL ONUS CAST ON THE ASSESSEE IS NOT SATISFIED IN THE INSTANT CASE. IN LIGHT OF THE SAME, WE DO NOT SEE ANY INFIRMITY IN THE ACTION OF THE LOWER AUTHORITIES. HENCE, THE ADDITION OF R S. 13,00,000/- IS HEREBY SUSTAINED. 9. IN RESPECT OF SH. BHANWAR SINGH MAKORI WHO HAS CONTRIBUTED RS. 15,00,000/- TOWARDS HIS CAPITAL CONTRIBUTION, T HE LD. CIT(A) HAS NOT ACCEPTED THE CONTENTION OF THE ASSESSEE STATING THA T THE ASSESSEE HAS FAILED TO PROVE HIS CREDITWORTHINESS. BEFORE US, IT WAS SUBMI TTED THAT HE WAS PRODUCED FOR VERIFICATION AND HIS STATEMENT WAS ALSO RECORDE D DURING THE COURSE OF REMAND PROCEEDINGS WHERE HE HAS ACCEPTED TO HAVE GI VEN AN AMOUNT OF RS. 15,00,000/- IN CASH BY WAY OF HIS CAPITAL CONTRIBUT ION. FURTHER, ON PERUSAL OF HIS FINANCIAL STATEMENT FOR THE YEAR ENDED 31.03.2011, WE FIND THAT HE HAS A CAPITAL OF OVER RS. 1 CRORE AND IN THE SAID FINANCI AL STATEMENT, HE HAS ALSO REPORTED HIS INVESTMENT IN THE ASSESSEES AOP. WE T HEREFORE FIND THAT THE ASSESSEE HAS DISCHARGED THE NECESSARY BURDEN CAST O N IT IN TERMS OF SATISFYING ITA NO. 699/JP/2019 M/S VIJAY GROUP OF COMPANIES, SIKAR VS. ACIT, SIKA R 15 THE CREDITWORTHINESS OF SH. BHANWAR SINGH AND THE A DDITION OF RS 15,00,000 SO MADE IS HEREBY DIRECTED TO BE DELETED. 10. IN RESPECT OF SH. MOTA RAM SAINI, THE LD. CIT(A ) HAS REJECTED THE CONTENTION OF THE ASSESSEE STATING THAT HE WAS NEIT HER PRODUCED IN PERSON NOR ANY CONFIRMATION WAS FILED BEFORE THE ASSESSING OFF ICER. IN THIS REGARD, THE LD. AR SUBMITTED THAT SH. MOTA RAM SAINI HAS FILED AN A FFIDAVIT BY WAY OF CONFIRMATION WHEREIN HE HAS STATED THAT HE HAS AGRI CULTURE LAND HOLDING OF 20 BIGHAS AND HIS AGRICULTURE INCOME IS ABOUT RS. 50,0 00/- PER ANNUM AND HE HAS YEARLY INCOME OF ABOUT RS. 1,50,000/- FOR F.Y 2010- 11 AND OUT OF HIS CURRENT YEAR INCOME AND PAST SAVINGS, HE HAS CONTRIBUTED RS . 2,00,000/- TOWARDS HIS SHARE IN THE CAPITAL OF THE ASSESSEES AOP. WE FIND THAT THE CONTENTS OF THE AFFIDAVIT HAVE NOT BEEN DISPUTED BY THE REVENUE AND CONSIDERING THE SAME, THE ADDITION OF RS 2 LACS IS DIRECTED TO BE DELETED. 11. REGARDING THE CAPITAL CONTRIBUTION SH. IQBAL AN D SH. IQRAM, IT IS NOTED THAT THEY WERE PRODUCED FOR VERIFICATION DURING THE REMAND PROCEEDINGS AND IN THEIR STATEMENT, THEY HAVE CONFIRMED TO HAVE GIVEN AN AMOUNT OF RS. 1,00,000/- EACH AS CAPITAL CONTRIBUTIONS AND HA VE ALSO EXPLAINED THE SOURCE OF THEIR CAPITAL CONTRIBUTION BY WAY OF INCOME AND PAST SAVINGS. IN THE LIGHT OF THE SAME, THE ADDITION SO MADE IS HEREBY DIRECTED T O BE DELETED. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT ON 01/10/2019. SD/- SD/- FOT; IKY JKO FOE FLAG ;KNO (VIJAY PAL RAO) (VIKRAM SINGH YADAV) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 01/10/2019 ITA NO. 699/JP/2019 M/S VIJAY GROUP OF COMPANIES, SIKAR VS. ACIT, SIKA R 16 * GANESH KR. VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- M/S VIJAY GROUP OF COMPANIES, SIKAR 2. IZR;FKHZ@ THE RESPONDENT- ACIT, CIRCLE, SIKAR 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDR@ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR. 6. XKMZ QKBZY@ GUARD FILE {ITA NO. 699/JP/2019} VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR