M/s. Shree Sainath Photochem, Navsari V. The Income tax Officer,Ward-4, Navsari

ITA 710/AHD/2012

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 9158 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 11 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-03-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 11-03-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 26-03-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SONIA KUMAR
• Keywords: Onus to prove

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, A HMEDABAD , (BEFORE SHRI ANIL CHATURVEDI, A.M. & SHRI KUL BHARA T, J.M.) ( , !'# $ , ! %& ) ITA NO. 710/AHD/2012 (ASSESSM ENT YEAR: 2008-09) M/S. SHREE SAINATH PHOTOCHEM SURVEY NO.454/P, N.H.NO.8, NEAR HOTEL ALMASS, ALIPORE 396409 VS. INCOME TAX OFFICER, WARD-4, NAVSARI PAN NO. AAJSF9455Q (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI RAJESH M. UPADHYAY, A.R . RESPONDENT BY : SMT. SONIA KUMAR, SR. D.R. DATE OF HEARING : 11 -03-2 016 DATE OF PRONOUNCEMENT : 22 -03-2016 ( )/ ORDER PER ANIL CHATURVEDI, ACCOUNTANT MEMBER THIS APPEAL FILED BY ASSESSEE IS AGAINST THE ORDER OF CIT(A), VALSAD, DATED 27.01.2012 FOR THE ASSESSMENT YEAR 2008-09. 2. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERI ALS ON RECORD ARE AS UNDER: 3. ASSESSEE IS A PARTNERSHIP FIRM STATED TO BE ENGA GED IN THE BUSINESS OF MANUFACTURING OF PHOTOGRAPHIC CHEMICALS. ASSESSEE ELECTRONICALLY FILED ITS RETURN OF INCOME FOR A.Y. 2008-09 ON 26.09.2008 DECLARING TOTAL INCOME AT RS.1,92,040/-. THE CASE WAS SELECTED FOR SCRUTINY AND THEREAFTER, ASSESSMENT WAS FRAMED U/S.143(3) OF THE ACT VIDE ORDER DATED 15.12 .2010 AND THE TOTAL INCOME ITA NO.710/AHD/12 A.Y. 2008-09 (M/S SHREE SAINATH PHOTOCHEM. VS. ITO) 2 WAS DETERMINED AT RS. 6,82,560/-. AGGRIEVED BY THE ORDER OF A.O., ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT(A) WHO VIDE O RDER DATED 27.01.2012 (IN APPEAL NO. CIT(A) /VLS/241/10-11) GRANTED PARTIAL R ELIEF TO THE ASSESSEE. AGGRIEVED BY THE ORDER OF LD. CIT(A), ASSESSEE IS N OW IN APPEAL BEFORE US AND HAS RAISED FOLLOWING GROUND: 1. LEARNED ITO HAS ERRED IN LAW AND ON FACTS TO ADD AN AMOUNT OF RS.4,51,560/- U/S.68 OF I.T. ACT 1961 CIT (APPEALS) HAS ALSO ERRE D IN CONFIRMING THIS ADDITION. 4. DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND ON PERUSING THE BALANCE SHEET, A.O. NOTICED THAT ASSESSEE HAS RECEIVED UNSE CURED LOAN AGGREGATING TO RS.4,59,500/- FROM VARIOUS PARTIES (LISTED AT PAGE NOS. 3 & 4 OF THE ASSESSMENT ORDER). ASSESSEE WAS ASKED TO PRODUCE ALL THE PAR TIES FOR PERSONAL VERIFICATION OF THE UNSECURED LOAN. ASSESSEE PRODUCED SOME OF THE P ERSONS FOR VERIFICATION AND THEIR STATEMENTS WERE RECORDED. SINCE, ASSESSEE CO ULD NOT PRODUCE 18 PERSONS LISTED ON PAGE NO.5 OF THE ORDER, A.O. CONSIDERED T HE AGGREGATE AMOUNT OF RS.3,38,000/- RECEIVED FROM THEM AS UNEXPLAINED CAS H CREDIT AND MADE ADDITION U/S.68 OF THE ACT. WITH RESPECT TO 6 PARTIES LISTED AT PAGE 8 FROM WHOM ASSESSEE HAD RECEIVED AGGREGATE LOAN OF RS.1,13,000/-, A.O. IN THE ABSENCE OF ANY PROOF OR EVIDENCE OF INCOME PRODUCED BY THOSE PARTIES, CONCL UDED THAT ASSESSEE HAS FAILED TO ESTABLISH THE IDENTITY OF DEPOSITORS AND THE GEN UINENESS OF THE TRANSACTIONS AND THE CREDITWORTHINESS OF THE DEPOSITORS AND CONSIDER ED THE AGGREGATE UNSECURED AMOUNT OF RS.1,13,000/- FROM THESE SIX PARTIES AS U NEXPLAINED CASH CREDIT U/S.68 OF THE ACT. HE, THUS, MADE TOTAL ADDITION OF RS.4, 51,500/- (RS.3,38,000 + RS.1,13,000). 5. AGGRIEVED BY THE ORDER OF A.O., ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT(A) WHO UPHELD THE ADDITION MADE BY A.O. AND DIS MISSED THE GROUND OF ASSESSEE BY HOLDING AS UNDER: ITA NO.710/AHD/12 A.Y. 2008-09 (M/S SHREE SAINATH PHOTOCHEM. VS. ITO) 3 5.3 DECISION :- I HAVE CONSIDERED THE OBSERVATION MADE BY THE AO IN THE ASSESSMENT ORDER AS WELL AS THE CONTENTION RAISED B Y THE AR OF THE APPELLANT IN THE WRITTEN SUBMISSION. THE AO HAS STRONGLY MADE OU T A CASE FOR MAKING SUCH ADDITIONS. THE AO MADE INDEPENDENT INQUIRY ON THE B ASIS OF CONFIRMATIONS FILED BY THE APPELLANT AND CONFRONTED WITH THE APPELLANT THE FINDINGS OF THE INQUIRY. FURTHER, THE AO ASKED TO THE APPELLANT BY GIVING SH OW CAUSE TO PRODUCE THE PERSONS BEFORE HIM . THAT MEANS, THE AO AFFORDED AM PLE OPPORTUNITY TO THE APPELLANT TO DEFEND THE CASE SATISFACTORILY. ON THE OTHER HAND, THE ARGUMENTS OF THE AR ARE FEEBLE AND WEAK. CONSIDERING THE ENTIRE FACTS AND CIRCUMSTANCES OF THE CASE, I AGREE WITH THE AO FOR MAKING SUCH ADDIT IONS. THUS, THIS GROUND OF APPEAL IS DISMISSED. 6. AGGRIEVED BY THE ORDER OF LD. CIT(A), ASSESSEE I S NOW IN APPEAL BEFORE US. 6.1 BEFORE US, LD. A.R. REITERATED THE SUBMISSIONS MADE BEFORE THE A.O. AND LD. CIT(A) AND FURTHER SUBMITTED THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, ASSESSEE HAD FILED THE CONFIRMATIONS AND COPIES OF THE LEDGER ACCOUNT AND THEIR ADDRESSES BEFORE THE A.O. IT WAS FURTHER SUBMITTED THAT AMOUNT BORROWED FROM THE CREDITORS WERE RETURNED BACK BY THE ASSESSEE. THE ASSESSEE HAD TRIED ITS BEST TO PRODUCE THE PARTIES BUT COULD NOT ENFORCE THEIR ATT ENDANCE MORE SO IN VIEW OF THE FACT THAT THE AMOUNTS WERE RETURNED BACK BY THE ASS ESSEE. HE FURTHER SUBMITTED THAT THOUGH THE ASSESSEE HAD GIVEN THE NAME AND ADD RESSES, THE A.O. DID NOT ISSUE SUMMONS TO THOSE PARTIES. BEFORE US, LD. A.R. FURT HER SUBMITTED THAT IN RESPECT OF 6 DEPOSITORS LISTED AT PAGE NO.8 OF ASSESSMENT ORDE R, FROM WHOM THE ASSESSEE HAD RECEIVED AGGREGATE LOAN OF RS.1,13,000/-, ASSESSEE HAD FILED THEIR CONFIRMATIONS AND THEIR ADDRESSES. A.O. HAD ISSUED SUMMONS TO TH OSE PARTIES AND IN RESPONSE TO WHICH, 6 DEPOSITORS HAD APPEARED BEFORE HIM. ALL S IX DEPOSITORS HAVE BEEN REPAID THOSE DEPOSITS. HE ALSO SUBMITTED THAT ASSESSEE HA D FILED THE COPY OF CONFIRMATION LETTERS, LEDGER ACCOUNTS AND THE SAME WERE PLACED I N THE PAPER BOOK. WITH RESPECT TO REMAINING 18 DEPOSITORS LISTED AT PAGE 6 OF THE ASSESSMENT ORDER, LD. A.R. SUBMITTED THAT ASSESSEE HAS FILED THEIR NAMES, ADDR ESSES, COPY OF LEDGER ACCOUNTS BEFORE THE A.O. THE A.O. HAD DIRECTED THE ASSESSEE TO PRODUCE THE DEPOSITORS. ITA NO.710/AHD/12 A.Y. 2008-09 (M/S SHREE SAINATH PHOTOCHEM. VS. ITO) 4 THOUGH, ASSESSEE TRIED ITS BEST BUT IT COULD NOT EN FORCE THEIR PRESENCE MORE SO IN VIEW OF THE FACT THAT THE DEPOSITORS WERE PAID IN F ULL TO THESE DEPOSITORS, A.O. DID NOT ISSUE SUMMONS TO THE DEPOSITORS. LD. A.R. THER EFORE SUBMITTED THAT ASSESSEE HAS DISCHARGED ONUS TO PROVE THE IDENTITY, CREDITWO RTHINESS AND GENUINENESS OF THE TRANSACTIONS AND IN SUCH A SITUATION, NO ADDITION U /S.68 OF THE ACT IS CALLED FOR. LD. D.R. ON THE OTHER HAND SUPPORTED THE ORDERS OF A.O. AND LD. CIT(A). 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE ISSUE IN THE PRESENT CASE IS WITH RESPECT TO AD DITION MADE U/S.68 OF THE ACT. WE FIND THAT THE TOTAL ADDITION COMPRISES OF TWO SE TS OF DEPOSITORS; ONE SET COMPARISING OF 18 PERSONS FROM WHOM ASSESSEE HAS RE CEIVED AGGREGATE AMOUNT OF RS.3,38,500/-. IN CASE OF THESE DEPOSITORS, IT IS ASSESSEES SUBMISSION THAT ASSESSEE HAD FILED THEIR NAMES, ADDRESSES AND CONFI RMATIONS BEFORE THE A.O. AND THESE DEPOSITORS HAD ALSO BEEN REPAID AND THAT ASSE SSEE COULD NOT ENFORCE THEIR PRESENCE BEFORE A.O. BECAUSE THESE DEPOSITORS WERE REPAID BY THE ASSESSEE. IT IS ALSO A FACT THAT WITH RESPECT TO THESE 18 DEPOSITOR S, A.O. DID NOT ISSUE SUMMONS FOR ENFORCING THEIR PRESENCE. WITH RESPECT TO ANOT HER SET OF 6 DEPOSITORS FROM WHOM THE ASSESSEE HAD TAKEN AGGREGATE LOAN OF RS.1, 13,000/-, IT IS ASSESSEES SUBMISSION THAT ASSESSEE HAD FILED THEIR NAMES, ADD RESSES AND A.O. HAD ISSUED SUMMONS TO THEM AND IN RESPONSE TO SUMMONS, THE PAR TIES HAD APPEARED BEFORE THE A.O. IN THESE CASES, SINCE, THE DEPOSITORS WER E UNABLE TO FURNISH THE SOURCE OF INCOME FROM WHICH THEY GAVE UNSECURED LOANS TO THE ASSESSEE, THE AMOUNT WAS TREATED AS UNSECURED CASH CREDIT. BEFORE US, REVEN UE HAS NOT CONTROVERTED THE SUBMISSIONS MADE BY LD. A.R. CONSIDERING THE TOTAL ITY OF FACTS AND MORE SO, WHEN THE ASSESSEE HAD FURNISHED THE NAMES, ADDRESSES, CO PY OF LEDGER ACCOUNT AND WHEN DEPOSITORS HAVE BEEN REPAID AND CONSIDERING THE FAC T THAT IN CASE WHERE A.O. HAD ISSUED SUMMONS, THE LENDERS HAD APPEARED BEFORE THE A.O. AND IN OTHER CASES, NO SUMMONS WERE ISSUED BY THE A.O., IN SUCH A SITUATIO N, WE ARE OF THE VIEW THAT ITA NO.710/AHD/12 A.Y. 2008-09 (M/S SHREE SAINATH PHOTOCHEM. VS. ITO) 5 ASSESSEE HAD DISCHARGED THE INITIAL ONUS CAST UPON IT AND IN SUCH A SITUATION, CONSIDERING THE TOTALITY OF FACTS, WE ARE OF THE VI EW THAT NO ADDITION U/S.68 OF THE ACT IS CALLED FOR. WE THEREFORE DIRECT THE DELETIO N OF ADDITION. THUS, THE GROUND OF ASSESSEE IS ALLOWED. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS A LLOWED. ORDER PRONOUNCED IN OPEN COURT ON 22 - 03 - 2016. SD/- SD/- (KUL BHARAT) (ANIL CHATURVEDI) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD: DATED 22/03/2016 TRUE COPY S K SINHA COPY OF THE ORDER FORWARDED TO:- 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AHMEDABAD