BHARAT ENTERPRISES, MUMBAI V. ACIT 24(1), MUMBAI

ITA 7278/MUM/2012

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 88636 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 3 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-03-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 10-02-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 07-12-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: ASGHAR ZAIN
• Section: 142(1); 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUM BAI , BEFORE SHRI D. MANMOHAN, V.P. AND SHRI SANJAY AROR A, AM ! I.T.A. NO. 7278/MUM/2012 ( / ASSESSMENT YEAR: 2008-09) BHARAT ENTERPRISES B-219, GRACE PLAZA, S. V. ROAD, JOGEHWARI (W), MUMBAI-400 102 ! VS. ASST. CIT-24(1), C-13, BANDRA KURLA COMPLEX, MUMBAI-400 051 '! # ./PAN/GIR NO. AAEFB 2174 L ( '$ /APPELLANT ) : ( %&'$ / RESPONDENT ) '$'( / APPELLANT BY : NONE %&'$'( / RESPONDENT BY : SHRI ASGHAR ZAIN ) *+',- / DATE OF HEARING : 10.02.2015 ./0',- / DATE OF PRONOUNCEMENT : 18.03.2015 1! O R D E R PER SANJAY ARORA, A. M.: THIS IS AN APPEAL BY THE ASSESSEE DIRECTED AGAINST THE ORDER BY THE COMMISSIONER OF INCOME TAX (APPEALS)-34, MUMBAI (CIT(A) FOR SH ORT) DATED 12.09.2012, PARTLY ALLOWING THE ASSESSEES APPEAL CONTESTING ITS ASSES SMENT U/S.143(3) OF THE INCOME TAX ACT, 1961 (THE ACT HEREINAFTER) FOR THE ASSESSMEN T YEAR (A.Y.) 2008-09 VIDE ORDER DATED 29.11.2010. 2. NONE APPEARED FOR AND ON BEHALF OF THE ASSESSEE WHEN ITS APPEAL WAS CALLED OUT FOR HEARING, NOR ANY ADJOURNMENT APPLICATION STANDS MOV ED. THIS, DESPITE PROOF OF SERVICE OF NOTICE OF HEARING FOR TODAY INSTANT, I.E., 10.02.20 15, ON RECORD. UNDER THE CIRCUMSTANCES, 2 ITA NO. 7278/MUM/2012 (A.Y. 2008-09) BHARAT ENTERPRISES VS. ASST. CIT IT WAS ONLY CONSIDERED FIT AND PROPER THAT THE HEAR ING BE PROCEEDED WITH, AND THE APPEAL DECIDED AFTER HEARING THE PARTY BEFORE US. 3. THE FACTS OF THE CASE, AS GATHERED FROM THE RECO RD, ARE THAT THE ASSESSEE, A PARTNERSHIP FIRM IN THE BUSINESS OF CIVIL CONSTRUCT ION, CONTRACTORS AND PROPERTY DEVELOPERS, WAS OBSERVED DURING THE COURSE OF ASSES SMENT PROCEEDINGS FOR THE RELEVANT YEAR TO HAVE BEEN CREDITED SUMS, DESCRIBED AS LOANS , AGGREGATING TO RS.64 LACS FROM SIX PARTIES, AS UNDER: I) DIMPLE MANOJ PATEL RS.23,00,000 II) MANOJ P. PATEL RS.7,00,000 III) MANOJ P. PATEL HUF RS.50,000 IV) PUNJALAL PATEL HUF RS.1,00,000 V) RUDIBEN PATEL RS.12,50,000 VI) VINODKUMAR VARMA RS.20,00,000 TOTAL RS.64,00,000 TO VERIFY THE GENUINENESS OF THE TRANSACTIONS, SUMM ONS U/S.131 OF THE ACT WERE ISSUED BY THE ASSESSING OFFICER (A.O.) ON 04.10.201 0 FOR 12.10.2010 TO ALL THE LOAN CREDITORS. THERE BEING NO COMPLIANCE, FRESH SUMMONS WERE ISSUED ON 21.10.2010 FOR 28.10.2010, TO, AGAIN, THE SAME RESULT. THE ASSESSE E WAS ACCORDINGLY SHOW CAUSED IN ITS RESPECT U/S. 142(1) ON 12.11.2010, IN RESPONSE TO W HICH THE ASSESSEE FILED CONFIRMATION FROM SHRI VINOD KUMAR VARMA. THE CREDITS FROM THE P ATEL FAMILY, TOTALING TO RS.44 LACS, REMAINED TO BE PROVED, WHICH IS TO BE ON THE PARAME TERS OF IDENTITY, CREDIT WORTHINESS AND GENUINENESS. ACCORDINGLY, THE A.O. DEEMED THE SAME AS THE ASSESSEES UNEXPLAINED INCOME U/S.68 OF THE ACT, RELYING ON DECISIONS BY T HE APEX COURT IN THE CASE OF SUMATI DAYAL VS. CIT [1995] 214 ITR 801 (SC); ROSHAN DI HATTY VS. CIT [1977] 107 ITR 938 (SC); CIT VS. DURGA PRASAD MORE [1969] 82 ITR 807 (SC); CIT VS. M. GANPATI MUDALIAR [1964] 53 ITR 623 (SC); AND KALE KHAN MOHAMMAD HANIF VS. CIT [1963] 50 ITR 1 (SC). THE ASSESSEE, IN APPEAL, SUBMITTED THAT THE PAYMENT FROM ALL THE PARTIES (RESIDING AT THE SAME ADDRESS), I.E., 74, AKSHARDAM, SARDAR P ATEL COLONY, MHADA, MUMBAI-400 053, HAD BEEN RECEIVED BY CHEQUE AND, IN FACT, ALSO REPA ID DURING THE SUBSEQUENT YEAR PER ACCOUNT PAYEE CHEQUES, ALSO GIVING DETAILS THEREOF. THE LD. CIT(A) WAS, HOWEVER, NOT 3 ITA NO. 7278/MUM/2012 (A.Y. 2008-09) BHARAT ENTERPRISES VS. ASST. CIT IMPRESSED. NO PROOF OF IDENTITY, AS IN THE FORM OF RATION CARD, VOTER ID, DRIVING LICENSE, ETC. HAD BEEN FURNISHED. MERE MENTION OF THE INCOME TAX FILE NUMBER WOULD NOT ITSELF PROVE THE IDENTITY, AS EXPLAINED IN CIT VS. KORLAY TRADING CO. [1998] 232 ITR 820 (CAL). FURTHER, THOUGH PAN WAS GIVEN IN ONE CASE, THERE WA S NOTHING TO SHOW THAT THE CONCERNED PERSON WAS A REGULAR ASSESSEE IN-AS-MUCH AS NO COPY OF THE RETURNS OF INCOME FILED OR ASSESSMENTS MADE WERE FURNISHED. MERE RECE IPT OF LOAN (CREDIT) BY CHEQUE WOULD NOT MAKE A NON-GENUINE TRANSACTION GENUINE, AS CLAR IFIED BY THE HONBLE COURTS. THE IMPUGNED CREDITS WERE THUS UNPROVED ON ALL THE THRE E PARAMETERS/COUNTS. THE ADDITION HAVING BEEN CONFIRMED THUS; AGGRIEVED, THE ASSESSEE IS IN SECOND APPEAL. 4. WE HAVE HEARD THE PARTY BEFORE US, AND PERUSED T HE MATERIAL ON RECORD. OUR FIRST OBSERVATION IN THE MATTER IS THAT NO IMPR OVEMENT WHATSOEVER, EVEN AS THE APPEAL WAS FILED ON 07.12.2012, HAS BEEN MADE BY TH E ASSESSEE-APPELLANT TO DATE, WHO THOUGH WAS DULY REPRESENTED BEFORE THE REVENUE AUTH ORITIES, AND WHO HAVE, WE FURTHER OBSERVE, ONLY APPLIED THE WELL SETTLED LAW IN THE M ATTER, ADVERTING TO THE CELEBRATED DECISIONS BY THE APEX COURT, EXPLAINING AND ELUCIDA TING THE SAME. THE CHEQUE DETAILS OF THE RECEIPT AND PAYMENT WERE NOT ACCOMPANIED BY THE BANK STATEMENTS FOR THE RELEVANT PERIOD/S. THAT WOULD AT LEAST PROVE THE IDENTITY, A S WELL AS, PERHAPS, THROW SOME LIGHT ON THE CAPACITY THE SECOND PARAMETER, OF THE CREDITO R/S. HOW, IN ITS ABSENCE, COULD IT BE ASCERTAINED THAT THE PAYMENT/S WAS RECEIVED FROM TH E STATED PERSON, NO PROOF OF WHOSE IDENTITY STANDS FURNISHED, OR EVEN WHERE SO IN TH E FORM OF PAN FOR TWO CREDITOR - THAT THE CREDIT, TO THAT EXTENT, FLOWS FROM HIM . AGAIN, THE RECEIPT OF PAYMENT BY CHEQUE IS BY ITSELF NOT PROOF OF GENUINENESS, WHICH HAS TO BE DE TERMINED ON THE BASIS OF AN ASSESSMENT OF THE ENTIRETY OF THE FACTS AND CIRCUMSTANCES OF T HE CASE, WITH EVEN AS MUCH AS THE CONFIRMATION THE MOST BASIC DOCUMENT, HAVING NOT BEEN FILED FOR ANY OF THE IMPUGNED CREDITS. WHY, IF THE APPARENT IS REAL, THE ENTRY IN THE ASSESSEES BOOKS OF ACCOUNT, ACKNOWLEDGING THE RECEIPT FROM A PERSON, WOULD ITSE LF PROVE THE CREDIT, WHICH SECTION 68 SPECIFICALLY REQUIRES BEING ESTABLISHED AS TO ITS NATURE AND SOURCE, I.E., IF IT IS NOT TO BE DEEMED AS THE ASSESSEES INCOME FOR THE YEAR OF CRE DIT, SO THAT IT CONSTITUTES A RULE OF 4 ITA NO. 7278/MUM/2012 (A.Y. 2008-09) BHARAT ENTERPRISES VS. ASST. CIT EVIDENCE, STATUTORILY MANDATED. THERE IS FURTHER NO EXPLANATION AS TO WHY THERE WAS NO COMPLIANCE OR RESPONSE TO THE SUMMONS, ISSUED IN FA CT TWICE, BY THE AUTHORITIES. THE ASSESSEE, ON THE CONTRARY, EMPHASIZES, I.E., RATHER THAN PROVING THE CREDITS ON THE THREE PARAMETERS AFORE-STATED, AS ENUNCIATED BY THE APEX COURT, ON THE REPAYMENT OF LOAN, STATING IT TO BE AN ADVANCE GIVEN FOR THE PURCHASE OF THE PROPERTY. IN THIS REGARD, WE MAY STATE THAT IF THE CREDIT IS GENUINE, I.E., SHOWN TO BE SO, IT BECOMES IMMATERIAL WHETHER IT IS REPAID OR NOT, WHILE IF IT IS NOT, IT WOULD AGAIN M ATTER LITTLE THAT IT HAS BEEN REPAID. IF THE ENTRY/S OF CREDIT AS APPEARING IN THE ASSESSEES BO OKS OF ACCOUNT IS NOT CONCLUSIVE OF IT BEING A GENUINE CREDIT, IT STANDS TO REASON THAT TH E REPAYMENT IN ACCOUNTS ALSO COULD NOT BE. RATHER, IT IS ON THE STRENGTH OF THE CREDIT ENT RY IN THE BOOKS THAT SECTION 68 BECOMES INVOKABLE. WE HAVE ALREADY EXPLAINED THAT ENTRIES T HROUGH THE BANKING CHANNEL ARE NOT SACROSANCT, AND DO NOT, WITHOUT ANYTHING FURTHER, P ROVE ANYTHING, EXCEPT OF-COURSE THE IDENTITY, WHICH IS ALSO NOT ESTABLISHED IN THE PRES ENT CASE IN THE ABSENCE OF THE BANK STATEMENTS OF THE CREDITORS. NO MATERIAL, AS ALSO A FORE-STATED, IN SUPPORT OF THE ASSESSEES CLAIM OF THE RELEVANT CREDITS, REFLECTED AS UNSECU RED LOANS IN THE ASSESSEES OWN ACCOUNTS, BEING ADVANCES, MADE (FOR THE FIRST TIME) IN THE APPELLATE PROCEEDINGS BEFORE THE LD. CIT(A), STANDS ADDUCED, SO THAT THE SAME AGAIN REMAINS UNPROVED. 5. WE ARE, IN VIEW OF THE FOREGOING, IN COMPLETE AG REEMENT WITH THE REVENUE THAT THE ASSESSEE HAS COMPLETELY FAILED TO DISCHARGE THE BUR DEN OF PROOF ON IT TO ESTABLISH THE IMPUGNED CREDITS AND, ACCORDINGLY, CONFIRM THE INVO CATION OF SECTION 68 IN THE FACTS AND CIRCUMSTANCES OF THE CASE. WE DECIDE ACCORDINGLY. 6. IN THE RESULT, THE ASSESSEES APPEAL IS DISMISSE D. 20,34562,'2',7 ORDER PRONOUNCED IN THE OPEN COURT ON MARCH 18, 201 5 SD/- SD/- (D. MANMOHAN) (SANJAY ARORA) / VICE PRESIDENT / ACCOUNTANT MEMBER ) + MUMBAI; 8 DATED : 18.03.2015 5 ITA NO. 7278/MUM/2012 (A.Y. 2008-09) BHARAT ENTERPRISES VS. ASST. CIT *4! ROSHANI , SR. PS ! ' #$%& ' &$ ! COPY OF THE ORDER FORWARDED TO : 1. '$ / THE APPELLANT 2. %&'$ / THE RESPONDENT 3. ) 9, : ; / THE CIT(A) 4. ) 9, / CIT - CONCERNED 5. <*=>%4,4?5 -?50 ) + / DR, ITAT, MUMBAI 6. >6@+ ! GUARD FILE ! ( / BY ORDER, )/(* + (DY./ASSTT. REGISTRAR) , ) + / ITAT, MUMBAI