DCIT 14(2)(1), MUMBAI V. KUKREJA DEVELOPERS & BUILDERS P.LTD, MUMBAI

ITA 7280/MUM/2014

• Counselvise Citation: [2018] 122 COUNSELVISE.COM (IT) 4290 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 10 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-10-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: H
• Assessment Year: 2011-2012
• Appeal Filed On: 05-12-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANOJ KUMAR SINGH LD
• Assessee Lawyers: J P BAIRAGRA LD
• Keywords: Unexplained cash credit
• Section: 143(3); 142(1); 133(6); 68

Judgement Text

ITA.NO.7280/MUM/2014 KUKREJA DEVELOPERS & BUILDERS PRIVATE LIMITED ASSESSMENT YEAR-2011-12 IN THE INCOME TAX APPELLATE TRIBUNAL H BENCH, MUMBAI , , BEFORE SHRI MANOJ KUMAR AGGARWAL, AM AND SHRI RAVISH SOOD, JM I.T.A. NO.7280/MUM/2014 ( ASSESSMENT YEAR: 2011-12) DEPUTY COMMISSIONER OF INCOME TAX-14(2)(1) ROOM NO.455 AAYKAR BHAVAN, 4 TH FLOOR M.K.MARG,MUMBAI-400 020 VS. KUKREJA DEVELOPERS & BUILDERS PRIVATE LIMITED (FORMERLY KNOWN AS GOPI HOTELS PVT. LTD.) LAALASIS, PLOT NO.219 11 TH ROAD, CHEMBUR MUMBAI-400 071 PAN/GIR NO. AACCG-1231-A ( APPELLANT ) : ( !' RESPONDENT ) ASSESSEE BY : J.P.BAIRAGRA, LD. AR REVENUE BY : MANOJ KUMAR SINGH, LD. SR. DR #$ DATE OF HEARING : 18/09/2018 %&'$ / DATE OF PRONOUNCEMENT : 10/10/2018 O R D E R PER MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1. AFORESAID APPEAL BY REVENUE FOR ASSESSMENT YEAR [AY] 2011-12 CONTEST THE ORDER OF LD. COMMISSIONER OF INCOME-TAX (APPEALS)-21 ITA.NO.7280/MUM/2014 KUKREJA DEVELOPERS & BUILDERS PRIVATE LIMITED ASSESSMENT YEAR-2011-12 2 [CIT(A)], MUMBAI, APPEAL NO.CIT(A)-21/IT/305/2013-14 DATED 01/09/2014 BY RAISING THE FOLLOWING SOLE EFFECTIVE GROUND OF A PPEAL:- 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.1,00,000/- MADE U/S 68 OF THE AC T, BY NOT APPRECIATION THE FACT THAT THE ASSESSEE HAS FAILED TO DISCHARGE THE BURDE N TO SUBSTANTIATE THE CREDITWORTHINESS OF THE CREDITOR AND GENUINENESS OF THE TRANSACTION. THE ASSESSMENT FOR IMPUGNED AY WAS FRAMED BY LD. DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-10(2), MUMBAI [A O] U/S 143(3) ON 21/02/2014 WHEREIN THE INCOME OF THE ASSESSEE WAS A SSESSED AT RS.146.26 LACS UNDER NORMAL PROVISIONS AFTER CERTAI N ADDITIONS / DISALLOWANCES AS AGAINST RETURNED INCOME OF RS.43.3 1 LACS FILED BY THE ASSESSEE ON 29/09/2011. AS EVIDENT FROM GROUNDS OF APPEAL, THE SOLE SUBJECT MATTER OF PRESENT APPEAL IS ADDITION OF RS. 1 CRORE U/S 68. THE ASSESSEE BEING RESIDENT CORPORATE ENTITY WAS ENGAGED AS BUILDERS & DEVELOPER DURING IMPUGNED AY. 2. DURING ASSESSMENT PROCEEDINGS, IT WAS NOTED THAT THE ASSESSEE OBTAINED UNSECURED LOANS AGGREGATING TO RS.1 CRORE FROM THREE PARTIES AS PER FOLLOWING DETAILS:- ACCORDINGLY, VIDE NOTICE U/S 142(1) DATED 02/08/201 3, THE ASSESSEE WAS ASKED TO SUBSTANTIATE THE LOAN CREDITORS. IN SUPPOR T, THE ASSESSEE INITIALLY FILED NAME, ADDRESS, PERMANENT ACCOUNT NUMBER [PAN] OF THESE LOAN CREDITORS AND LATER ON VIDE REPLY DATED 19/02/2014, SUBMITTED COPY OF LOAN CONFIRMATION, LEDGER CONFIRMATION, BANK STATEM ENT DULY HIGHLIGHTING NO. NAME AMOUNT (RS.) 1. GDC BUILDCON PVT. LTD. RS. 50 LACS 2. JADSTONE TRADING PVT. LTD. RS. 25 LACS 3. MUDRA FINANCIAL SERVICES PVT. LTD. RS. 25 LACS TOTAL RS. 100 LACS ITA.NO.7280/MUM/2014 KUKREJA DEVELOPERS & BUILDERS PRIVATE LIMITED ASSESSMENT YEAR-2011-12 3 THE CREDIT ENTRIES FOR THE LOAN AMOUNT. HOWEVER, NO T CONVINCED, LD. AO OPINED THAT THE ASSESSEE FAILED TO SUBMIT SUPPORTIN G EVIDENCES WITH REGARD TO CREDITWORTHINESS OF THE LOAN CREDITORS AN D GENUINENESS OF THE TRANSACTIONS BY PRODUCING DOCUMENTS SUCH AS CAPITAL ACCOUNT, BALANCE SHEET, PROFIT & LOSS ACCOUNT, INCOME TAX RETURNS FOR LAST THREE YEARS WITH BANK STATEMENT OF LOAN CREDITORS FOR ENTIRE YE AR. THE LD. AO FURTHER DOUBTED THE TRANSACTIONS BY NOTICING THAT THE CREDI T ENTRIES IN THE BANK STATEMENT WERE MENTIONED ONLY AS BY CLG. FINALLY, CONSIDERING THE STATUTORY PROVISIONS OF SECTION 68 AND RELYING UPON VARIOUS JUDICIAL PRONOUNCEMENTS, THE AMOUNT OF RS.1 CRORE WAS TREATE D AS UNEXPLAINED CASH CREDIT U/S 68 AND ADDED TO THE INCOME OF THE A SSESSEE. 3. AGGRIEVED, THE ASSESSEE AGITATED THE SAME WITH S UCCESS BEFORE LD. CIT(A) VIDE IMPUGNED ORDER DATED 01/09/2014 AND MAD E DETAILED SUBMISSIONS, THE RELEVANT PORTIONS OF WHICH HAVE AL READY BEEN EXTRACTED IN THE IMPUGNED ORDER IN PARA-2.2. AFTER DUE CONSIDERATION, LD. FIRST APPELLATE CONCURRED WITH THE CLAIM OF THE ASSESSEE AND DELETED THE ADDITIONS BY OBSERVING AS UNDER:- 2.3 I HAVE CONSIDERED THE FACTS AND CIRCUMSTANCES OF THE CASE, APPELLANTS SUBMISSION AND ALSO ASSESSMENT ORDER. IN THE INSTAN T CASE APPELLANT HAD OBTAINED RS.1 CRORE FROM THREE ENTITIES IE. GDC BUILDCON PVT . LTD. RS.50,00,000/-, JADSTONE TRADING PVT.LTD. RS. 25,00,000/-. MUDRA FINANCIAL S ERVICES PVT.LTD. RS.25,00,000/-. THE A.O HIMSELF HAD MENTIONED THAT APPELLANT HAD FU RNISHED ADDRESS, COPY OF LOAN CONFIRMATION, LEDGER CONFIRMATION, BANK STATEMENT A ND PAN OF THE LOAN CREDITORS. HOWEVER, APPELLANT WAS UNABLE TO PROVE THE GENUINEN ESS AND CREDIT WORTHINESS OF THE TRANSACTION, THE A.O. ADDED THIS AMOUNT AS CASH CREDIT U/S.68 OF THE ACT. HERE IT IS EVIDENT FROM THE AOS ORDER THAT THE APPELLANT H IMSELF HAS FURNISHED THE ADDRESS, PAN NO., LEDGER CONFIRMATION, BANK STATEMENT AND TH E CREDIT WAS ALSO OBTAINED IN CHEQUE. IN SUCH A SITUATION BOMBAY HIGH COURT IN TH E CASE OF CIT VS. CREATIVE WORLD TELEFILMS LTD. 333 ITR 100 (BOM) HELD AS UNDE R: CASH CREDIT-SHARE APPLICATION MONEY-RELEVANT MATER IAL DETAILS AND PARTICULARS OF SHARE APPLICANTS AVAILABLE ON RECORD ASSESSING OFFICER TO MAKE PROPER INVESTIGATION AND REACH SHAREHOLDER- AD DITION CANNOT BE MADE IN ASSESSEES HANDS- INCOME-TAX ACT, 1961. ITA.NO.7280/MUM/2014 KUKREJA DEVELOPERS & BUILDERS PRIVATE LIMITED ASSESSMENT YEAR-2011-12 4 IF THE SHARE APPLICATION MONEY IS RECEIVED BY THE A SSESSEE-COMPANY FROM ALLEGED BOGUS SHAREHOLDERS, WHOSE NAMES ARE GIVEN T O THE ASSESSING OFFICER, THEN THE DEPARTMENT CAN ALWAYS PROCEED AGA INST THEM AND IF NECESSARY REOPEN THEIR INDIVIDUAL ASSESSMENTS. HELD, DISMISSING THE APPEAL, THAT THERE WAS NO DISP UTE THAT THE ASSESSEE HAD GIVEN THE DETAILS OF NAMES AND ADDRESS OF THE SHARE HOLDERS, THEIR PAN/GIR NUMBERS AND HAD ALSO GIVEN THE CHEQUE NUMBER, NAME OF THE BANKERS. THE ASSESSING OFFICER OUGHT TO HAVE FUND THAT THEIR DET AILS THROUGH PAN CARDS, BANK ACCOUNT DETAILS OR FROM THEIR BANKERS SO AS TO REACH THE SHAREHOLDERS. THUS, THE VIEW TAKEN BY THE TRIBUNAL COULD NOT BE F AULTED. IN THE BOMBAY HIGH COURT DECISION WHEN THE APPELLAN T HAD FURNISHED THE NAMES, ADDRESS AND PAN NO. GIR NO., CHEQUE NO. AND NAME OF THE BROKERS, IT STATES THAT AO SHOULD HAVE TO FIND OUT THE DETAILS THROUGH PAN AND BANK ACCOUNT DETAILS AND IF THERE IS ANY DOUBT THEN CREDITORS MAY BE ASSESSED B Y REOPENING THEIR ASSESSMENT IN THEIR OWN NAME INSTEAD OF ASSESSING IN THE HANDS OF THE APPELLANT. FOLLOWING THE ABOVE DECISION A.OS ADDITION IS DELETED. THIS GROU ND OF APPEAL IS ALLOWED. AGGRIEVED AS AFORESAID, THE REVENUE IS IN FURTHER A PPEAL BEFORE US. 4. THE LD. DEPARTMENTAL REPRESENTATIVE, SHRI MANOJ KUMAR SINGH, SUBMITTED THAT THE ASSESSEE FAILED TO DEMONSTRATE T HE SATISFACTION OF THREE PRIMARY INGREDIENTS VIZ. IDENTITY, CREDITWORTHINESS & GENUINENESS AS ENVISAGED BY SECTION 68. PER CONTRA, LD. AUHTORIZED REPRESENTATIVE FOR ASSESSEE [AR], SHRI J.P.BAIRAGRA, DRAWING OUR ATTENTION TO THE DOCUMENTS PLACED IN THE PAPER-BOOK, SUBMITTED THAT THE PRIMARY CONDITIONS OF SECTION 68 WERE FULFILLED BY THE ASSE SSEE AND THE TRANSACTIONS HAVE DULY BEEN SUBSTANTIATED AND THERE FORE, THE STAND OF LD. CIT(A) WAS QUITE FAIR UNDER THE CIRCUMSTANCES. 5. WE HAVE CAREFULLY HEARD THE RIVAL CONTENTIONS AN D PERUSED THE ORDERS OF LOWER AUTHORITIES INCLUDING DOCUMENTS PLA CED IN THE PAPER-BOOK AND JUDICIAL PRONOUNCEMENTS AS CITED BEFORE US. UPO N PERUSAL OF QUANTUM ASSESSMENT ORDER, WE FIND THAT THE ASSESSEE HAD PLACED ON RECORD NOT ONLY THE BASIC DETAILS LIKE NAME, ADDRESS & PAN OF THE LOAN CREDITORS BUT ALSO THE LOAN CONFIRMATION, LEDGER CO NFIRMATION & BANK STATEMENT DULY HIGHLIGHTING THE CREDIT ENTRIES IN T HE BANK ACCOUNT. THE ITA.NO.7280/MUM/2014 KUKREJA DEVELOPERS & BUILDERS PRIVATE LIMITED ASSESSMENT YEAR-2011-12 5 LOANS HAVE BEEN OBTAINED FROM THE CORPORATE ENTITIES AND ALL THE ENTITIES WERE ASSESSED TO INCOME TAX AT MUMBAI JURISDICTION . NOT ONLY THIS, THE ASSESSEE, BEFORE LD. CIT(A), PLACED ON RECORD FURTH ER DOCUMENTS IN THE SHAPE OF INCOME TAX RETURNS, AUDITED FINANCIAL STATEMENTS & BANK STATEMENTS OF THE LOAN CREDITORS HIGHLIGHTING THE LOAN TRANSAC TIONS CARRIED OUT WITH THE ASSESSEE. NEVERTHELESS, AS RIGHTLY OBS ERVED BY LD. FIRST APPELLATE AUTHORITY, THE INITIAL ONUS AS CASTED UPO N THE ASSESSEE TO PROVE THE TRANSACTIONS WAS DULY DISCHARGED. HOWEVER, LD. AO, WITHOUT CARRYING OUT ANY FURTHER INVESTIGATION, STRAIGHTWAY REACHED A CONCLUSION THAT THE SAME WERE MERE UNEXPLAINED CASH CREDIT U/S 68. NO A CTION U/S 131/ 133(6) HAS BEEN UNDERTAKEN BY LD. AO TO FORTIFY HIS STAND. IT IS TRITE LAW THAT THE ADDITIONS COULD NOT BE MADE MERELY ON THE BASIS OF SUSPICION, DOUBTS, CONJECTURES OR SURMISES. THE LD. CIT(A) ALS O NOTED THE AFORESAID FACTS AND PROVIDED RELIEF TO THE ASSESSEE IN TERMS OF THE RATIO OF JUDGMENT OF HONBLE BOMBAY HIGH COURT RENDERED IN CIT VS CREATIVE WORLD TELEFILMS LTD. [333 ITR 100], THE RELEVANT EXTRACT OF WHICH HAS ALREADY BEEN REPRODUCED IN THE IMPUGNED ORDER. THIS VIEW IS FURTHER FORTIFIED BY THE DECISIONS OF HONBLE BOMBAY HIGH COURT RENDERED IN PCIT VS. VEEDHATA TOWER PRIVATE LIMITED [403 ITR 415] WHICH, IN TURN, DRAWS STRENGTH FROM THE EARLIER DECISION OF SAME COURT RE NDERED IN CIT VS GAGANDEEP INFRASTRUCTURE PVT. LTD. [394 ITR 680] AND THE DECISION OF HONBLE APEX COURT RENDERED IN LOVELY EXPORTS P. LTD. [319 ITR 5]. THEREFORE, WEIGHING THE FACTS OF PRESENT CASE AGAIN ST THE TOUCHSTONE OF RATIO OF BINDING JUDICIAL PRECEDENTS RENDERED BY HI GHER JUDICIAL AUTHORITIES, WE FIND NO INFIRMITY IN THE ORDER OF LD. FIRST APPE LLATE AUTHORITY. ITA.NO.7280/MUM/2014 KUKREJA DEVELOPERS & BUILDERS PRIVATE LIMITED ASSESSMENT YEAR-2011-12 6 6. RESULTANTLY, THE APPEAL STAND DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 10 TH OCTOBER, 2018. SD/- SD/- (RAVISH SOOD) (MANOJ KUMAR AGGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED 10.10.2018 SR.PS:-THIRUMALESH COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. / THE CIT(A) 4. / CIT CONCERNED 5. !'#$% &$%' / DR, ITAT, MUMBAI 6. #()* GUARD FILE / BY ORDER, (DY./ASSTT.REGISTRAR) !'#$ / ITAT, MUMBAI