I.T.O.WD.21(1)(1), MUMBAI V. ANITA RAJENDRA CHOPRA, MUMBAI

ITA 7567/MUM/2011

• Counselvise Citation: 756719914 RSA 2011
• Duration Of Justice: 3 year(s) 10 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-09-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 02-03-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 09-11-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Additional evidence
• Section: 68

Judgement Text

, INCOME TAX APPELLATE TRIBUNAL,MUMBAI A BENCH , , BEFORE S/SH. RAJENDRA,ACCOUNTANT MEMBER & PARTHASAR ATHY CHOUDHURY,JUDICIAL MEMBER /. ITA NO. 7567 /MUM/201 1 , / ASSESSMENT YEAR - 200 7 - 0 8 INCOME TAX OFFICER - 21(1)(1) ROOM NO.603, 6 TH FLOOR, C - 10 PRATYAKSHAKAR BHAVAN, BKC , BANDRA (E) , MUMBAI. VS A NITA RAJENDRA CHOPRA A - 13, DAKSHINA PARK SOCIETY 10 TH ROAD, JUHU SCHEME , JUHU, ANDHERI (E) , MUMBAI - 400 059 . PAN: AAAPC 6747 Q ( / APPELLANT ) ( / RESPONDENT ) /ASSESSEE B Y : SHRI K. SHIVARAM / REVENUE BY : SHRI S.P. WALIMBE / DATE OF HEARING : 01 - 09 - 2015 / DATE OF PRONOUNCEMENT : 09 - 0 9 - 2015 , 1961 254 ( 1 ) ORDER U/S.254(1)OF THE INCOME - TAX ACT,1961(ACT) PER RAJENDRA, AM - CHALLENGING THE ORDER DT.10.8.2011OF CIT( A) - 32, MUMBAI,THE ASSESSING OFFICER(AO)HAS RAISED FOLLOWING GROUNDS OF APPEAL : 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A) ERRED IN DELETING ADDITION U/S. 68 AMOUNTING TO RS. 50,37,000/- OUT OF OTHER LIABILITIES. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A) ERRED IN DELETING ADDITION U/S. 68 AMOUNTING TO RS.15,24,250/ - OUT OF UNSECURED LOANS IN PERSONAL BALANCE SHEET. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A) ERRED IN DELETING ADDITION U/S. 68 AMOUNTING TO RS.4,90,468/- OUT OF UNSECURED LOANS IN BUSINESS BALANCE SHEET. 4. THE APPELLANT PRAYS THAT THE ORDER OF THE LD.CIT(A) ON THE ABOVE GROUNDS BE SET ASIDE AND THAT OF THE A.O. BE RESTORED. 5. THE APPELLANT C RAVES LEAVE TO AMEND OR TO ALTER ANY GROUND OR ADD A NEW GROUND, WHICH MAY BE NECESSARY. ASSESSEE, AN INDIVIDUAL, FILED HER RETURN OF INCOME ON 31.10.2007, DECLARING TOTAL INCOME AT RS. 44,342/ - .THE AO COMPLETED ASSESSMENT ON 29. 12 .200 9 ,U/S.153(3)OF THE ACT,DETERMINING THE INCOME OF THE ASSESSEE AT RS. 75,76,880/ - . 2 . EFFECTIVE G ROUND OF A PPEAL IS ABOUT DELETING THE ADDITION S MADE BY THE AO U / S. 68 OF THE ACT, AMOUNTING TO RS.50.37 LACS ,15.24 LAKHS AND RS. 4.90 LAKHS UNDER THE HEADS OTHER LIABILITIES, UNSE CURED LOANS IN PERSONAL BALANCE SHEET AND UNSECURED LOANS IN BUSINESS BALANCE SHEET RESPECTIV EL Y. DURING THE ASS ESSMEN T PROCEEDINGS, THE AO FOUND THAT THE ASSESSEE HAD SHOWN OTHER LIABILITIES OF IN THE BALANCE SHEET.HE DIRECTED HER TO CONFIRM THE LEDGER ACCOUNT IN THAT REGARD.AS PER THE AO , THE ASSESSEE DID NOT FURNISH NAMES, ADDRESSES, P ERMANENT A CCOUNT NOS. (PAN) OF THE PERSON /S CONCERNED NOR DID SHE SUBMIT CONFIRMED LEDGER ACCOUNT.THEREFORE, IN THE ABSENCE OF DETAILS , THE LIABILITIES OF RS.50.37 L ACS WAS TREATED AS UNEXPLAINED CASH CREDIT. U/S. 68 OF THE ACT AND WAS ADDED TO THE TOTAL INCOME OF THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION. SIMILARLY,THE AO HELD THAT UNSECURED LOANS IN PERSONAL BALANCE SHEET AS WELL AS IN THE BUSINESS BALANCE SHEET ITA/ 7 567 /M/11 - ANITA 2 WERE NOT PROVED BY THE HER.HE ADDED RS.15.24 LAKHS AND RS.4.90 LAKHS TO THE INCOME OF THE ASSESSEE U/S. 68 OF THE ACT. 2. 1. AGGRIEVED BY THE ORDER OF THE A O , THE ASSESSEE PREFERRED AN APPEAL BEFORE THE F IRST APPELLATE AUTHORITY (FAA).BEFORE HIM, VIDE HER LETTER,DT. 3 0.8.10, THE ASSESSEE SUBMITTED THAT THE UNITS OF THE ASSESSEE WERE LOCATED AT DAMAN, THAT DUE TO PAUCITY OF TIME CERTAIN DETAILS COULD NOT BE COLLECTED /SUBMITTED BEFORE THE AO. S HE ENCLOSE D THE CONFIRMATION OF THE PARTIES AND REQ UESTED THE FAA TO ADMIT THE S AME UNDER R ULE 46A OF THE INCOME TAX RULE, 1962(RULES). THE ADDITIONAL EVIDENCES FURNISHED BY THE ASSESSEE W ERE SENT TO THE AO, BY THE FAA, FOR HIS COMMENTS UNDER RULE - 46A(3).THE AO IN HI S REMAND REPORT, DT.2.5. 20 11 , STATED THAT ASSESSEE HAD PRODUCED THE PAR TIES CONSENT BEFORE HIM, THAT HE HAD EXAMINED THE EVIDENCES FURNISHED BY THE ASSESSEE . THE FAA GAVE THE COMMENTS OF THE AO TO THE ASSESSEE WHO SUBMITTED HER RE - JOINDER. IT WAS STATED BY HER THAT DUE TO DISPUTE AMONG FAMILY MEMBERS THE R E Q U ISITE CONFIRMATIO NS COULD NOT BE SUBMITTED EARLIER, THAT A L L OF CREDITORS HAD CONFIRMED THE TRANSACTIONS BEFORE THE AO. THE ASSESSEE SUBMITTED A CHART SH O WING OPENING BAL ANCE AM OUN TS REC EIVE D DURING THE Y EA R AND THE CL O S IN G BAL ANCE IN RESPECT OF EACH OF THE PARTIES FOR WHI CH THE ADDITIONS WERE MADE BY THE AO UNDER ABOVE MENTIONED THREE HEADS, U/S. 68 OF THE ACT. IT WAS FURTHER STATED THAT ONLY RS.3.95 LACS WERE RECD DURING THE Y EA R UNDER APPEAL, THAT THE REMAINING AM OUN T WAS OUT OF THE BALANCES OF THE EARLIER Y EA RS. AFTER C ONSIDERING THE REMAND REPORT AND THE REJOINDER SUBMITTED BY THE ASSESSEE , THE FAA HELD THAT TH E BALANCES OUTSTANDING WERE MOSTLY FROM RELATIVES AND THEIR BUSINESS CONCERNS, I.E., HER HUSBAND AND BROTHER - IN - LAW , THAT ALL THOSE PARTIES WERE PERSONALLY PRODUC ED B EFORE AO IN REMAND PROCEEDINGS, THAT THEY HAD CONFIRMED THE B ALANCES FOR THE LOANS GIVEN TO HE R, THAT ONLY RS. 3, 95, 500 / - WERE REC EIVED DURING THE Y EA R BY HE R ,THAT THE REMAINING AM OUN T WAS OUT OF TH E BALANCES OF THE EARLIER AY.S,THAT S HE HAD DISCHARGED T HE INITIAL BURDEN OF PROVING THE CREDIT BY PRODUCING THE PARTIES CONCERNED, THAT THE PAN WERE SUPPLIED TO THE AO, THAT THE TRANSACTIONS OF THE EARLIER Y EA RS WERE ALSO THROUGH BANKING CHANNELS, THAT IT COULD NOT BE SAID THAT TRANSACTIONS WERE NOT GENUINE TR ANSACTIONS,. ACCORDINGLY, ADD ITIO N MADE IN RESPECT OF OUTSTANDING LIABILITIES IN THE NAMES OF D IL I P C HOPRA, HER HUSBAND( R S . 3.39 LACS ) ,PRANAV E NTERPRISES(RS.9.79LACS) AND GAUTAM PETROCHEM INDUSTRIES PVT. LTD.(RS.10.99 LACS) WERE DELETED AS SAME WERE NOT REC EIVE D DURING THE Y EA R. THE FAA FURTHER HELD THAT THE BALANCE SHEET OF THE ASSESSEE SHOWED OUTSTANDING LIABILITIES IN THE NAME OF RAJENDRA C HOPRA AT RS.8.07 LACS IN BUSINESS BALANCE SHEET AND RS.1.01 LACS IN PERSONAL BALANCE SHEET ,THAT OTHER OUTSTANDING BALA NCES WERE FROM K - SARC POLYMERS(RS.11.78 LAC ), P YRAMID E NERGY CREATIONS CO. ( RS. 4.23 LACS ) , BPC POLYMERS( RS.11. 21 LACS ), CHAKRESHWARI PLASTICS (I NDIA ) LTD.( RS.1.38 LACS ) , THAT RAJENDRA CHOPRA WAS PROPRIETOR OF K - SARC POLYMERS AND P YRAMID E NERGY CREATIONS CO., THAT HE WAS PARTNER IN BPC POLYMER S AND ONE OF THE DIRECTORS OF C HAKRESHWARI PLASTICS (I NDIA ) LTD., THAT HE HAD APPEARED BEFORE THE AO AND HAD FILED DETAILS CONFIRMING TH E BALANCES OF ALL THE ENTITIES, THAT THE AO AFTER GOING THROUGH THE EXPLANATION GIVEN HAD N OT FOUND ANYTHING ADVERSE ON OUTSTANDING AMOUNT IN THE NAME OF RAJENDRA C HOPRA IN THE PERSONAL BALANCE SHEET OF THE ASSESSEE , THAT THERE WAS DIFFERENCE OF ONLY RS.1,000/ - AS FAR AS BUSINESS BALANCE SHEET OF THE ASSESSEE AND THE BALANCE OF RAJENDRA C HOPRA W AS CONCERNED, THAT THE AO HAD OBSERVED THAT RS.11.21 LACS IN THE NAME OF BPC POLYMER S WAS AN OLD AMOUNT, THAT THE AO HAD ADMITTED THAT THE LOAN FROM K - SARC POLYMERS WAS OLD LOAN, THAT THE CREDIT WORTHINESS OF THE AMOUNT OF R S.2.23 LACS RECEIVED DURING THE YEAR WAS DOUBTFUL, THAT SOME PART OF THE LOAN FROM P YRAMID E NERGY CREATIONS CO. WAS RECEIVED DURING THE YEAR, THAT THE BALANCE AMOUNTING TO RS.4.23 LACS IN ITA/ 7 567 /M/11 - ANITA 3 THE NAME OF P YRAMID E NERGY CREATIONS CO. WAS NOT PROVED, THAT BALANCE AMOUNT APPEARING IN THE NAME O F C HAKRESHWARI PLASTICS (I NDIA ) LTD. REMAINED UNEXPLAINED. AFTER CONSIDERING THE SUBMISSION OF THE ASSESSEE AND THE REMAND REPORT, THE FAA HELD THAT THE AO HAD NOT MADE ANY ADVERSE COMMENT ABOUT THE BALANCES APPEARING IN THE NAME OF BPC POLYMER S AND RAJE NDRA C HOPRA, THAT THE AMOU N T OF RS.1.38 LACS APPEARING IN THE NAME OF C HAKRESHWARI PLASTICS (I NDIA ) LTD. WAS ALSO OLD LOAN, THAT DIFFERENCE IN BALANCE OF RS.1,000/ - IN THE NAME OF RAJ ENDRA C HOPRA WAS NOMINAL, THAT BOTH THE AMOUNTS WERE RECEIVED IN THE EARL IER YEAR, THAT THE SAME COULD NOT BE ADDED TO THE INCOME OF THE ASSESSEE FOR THE YEAR UNDER APPEAL , T HAT IN CASE OF K - SARC POLYMER S RS.9.67 LACS WAS OLD BALANCE, THAT THE ASSESSEE HAD RECEIVE D RS.2.23 LACS DURING THE YEAR, THAT T HE AO HAD DOUBTED THE CREDIT WORTHINESS OF THE LENDER WITHOUT GIVING ANY REASON OR EVIDENCE, THAT RAJENDRA C HOPRA HAD CONFIRMED THE BALANCE AND GIVEN THE COPY OF PAN, AND BALANCE SHEET OF K - SARC POLYMERS, THAT THE TRANSACTIONS WITH THE K - SARC POLYMERS WERE THROUGH BANKING CHANNELS O NLY, THAT THERE WAS NO JUSTIFICATION TO HOLD THE CREDIT WORTHINESS OF THE PARTY, THAT RAJENDRA CHOPRA HAD FILED NECESSARY DOCUMENTS WITH REGARD TO BALANCE OF P YRAMID E NERGY CREATIONS CO., THAT THE AMOUNT RECEIVED IN THAT ACCOUNT DURING THE YEAR WAS ONLY RS. 1.62 LACS, THAT RAJENDRA CHOPRA HAD FURNISHED HIS PERSONAL BALANCE SHEET AS WELL AS BALANCE SHEET OF ALL THE ENTITIES WHERE HE WAS PARTNER/DIRECTOR, THAT THE ASSESSEE HAD DISCHARGED THE INITIAL BURDEN OF PROVING THE CREDIT BY PRODUCING THE PARTIES CONCERNED WHO IN TURN HAD DULY CONFIRMED THE TRANSACTIONS, THAT ALL THE PARTIES HAD PAN, THE TRANSACTION IN THE EARLIER YEARS AND CURRENT YEAR WERE THROUGH BANKING CHANNEL ONLY ,THAT IT COULD NOT BE SAID THAT TRANSACTIONS WERE NOT GENUINE.ACCORDINGLY, ADDITIONS MADE BY THE AO IN RESPECT OF RAJENDRA CHOPRA (RS.8.07 LACS + RS. 1.01 LACS) K - SARC POLYMERS (RS.11.78 LACS), P YRAMID E NERGY CREATIONS CO. ( RS.4.23 LACS ) , BPC POLYMER S ( RS. 11.21 LACS) AND C HAKRESHWARI PLASTICS (I NDIA ) LTD. (1.38 LACS) WERE DELETED. WITH REGARD TO RA KESH CHOPRA, THE FAA MENTIONED THAT HE WAS PROPRIETOR OF SUVIDHI IMP EX ,THAT HE HAD SUBMITTED THE COPY OF RETURNS SUPPORTING THE BALANCE OF RS.55,468/ - , THAT HE HAD FURNISHED THE COPY OF RETURN OF HIS WIFE ALONGWITH THE COPY OF HER BANK STATEMENT TO PROVE T HE GENUINENESS OF THE LOAN OF RS.50,000/ - OUTSTANDING AS ON 31.3.2007, THAT THE AO HAD NOT ASKED RAKESH C HOPRA TO EXPLAIN THE SOURCE OF RS.50,000/ - , THAT SAROJ CHOPRA WAS ASSESSED TO TAX, THAT THE BALANCE HAD ACTUALLY REDUCED DURING THE YEAR FROM RS.3.95 L ACS TO RS. 50,000/ - , THAT NO FRESH MONEY WAS RECEIVED, THAT THE ADDITION OF RS.55,468/ - IN THE NAME OF SUVIDHI IMPEX AND RS.50,000/ - IN THE NAME OF SAROJ CHOPRA HAD TO BE DELETE D. THE FAA ALSO HELD THAT ONE OF THE CREDITORS. J.K. J AIN, HAD APPEARED BEFORE THE AO AND HAD FURNISHED THE RETURNS/BALANCE SHEETS TO PROVE THE LIABILITY/LOAN OF R S.4.00 LACS AND RS. 3.17 LACS, THAT THE AO HAD FOUND THE SAME TO BE GENUINE. THE FAA DELETED THE ADDITION APPEARING IN THE NAME OF J.K. JAIN AND K.C. J AIN AND OTHERS.IN THE RESULT , THE ADDITION MADE BY AO U /S. 68 OF THE ACT AMOUNTING TO RS.50.37 LACS OUT OF OTHER LIABILITIES, RS. 15.24 LACS OUT OF UNSECURED LOANS IN PERSONAL BALANCE SHEET AND R S.4.90 LACS OUT OF UNSECURED LOANS IN BUSINESS BALANCE SHEET WERE DELETED. 3. BEFOR E US, THE DEPARTMENTAL REPRESENTATIVE(DR)SUPPORTED THE ORDER OF THE FAA.AUTHORISED REPRESENTATIVE(AR)ARGUED THAT THE DURING THE REMAND PROCEEDINGS THE ASSESSEE HAD FILED ALL THE NECESSARY DOCUMENTS AND CONFIRMATIONS WHICH COULD NOT BE FILED BEFORE THE AO DU E TO UNAVOIDABLE CIRCUMSTANCES,THAT MOST OF THE LOANS OR LIABILITIES PERTAINED TO THE EARLIER YEAS,THAT IN ONE CASE THE BALANCE HAD REDUCED.HE REFERRED TO THE PAGES NO.58 - 68 AND 116,119,122 OF THE PAPER ITA/ 7 567 /M/11 - ANITA 4 BOOK(PB). 4. WE HAVE HEARD THE RIVAL SUBMISSIONS AN D PERUSED THE MATERIAL ON RECORD.WE FIND THAT DURING THE ASSESSMENT PROCEEDINGS THE ASSESSEE HAD NOT FILED CERTAIN INFORMATION UNDER THREE HEADS NAMELY OUTSTANDING LIABILITIES,DIFFERENCE IN PERSONAL BALANCE SHEET AND DIFFERENCE IN BUSINESS BALANCE SHEET,TH AT THE ASSESSEE PRODUCED ALL THE NECESSARY DOCUMENTS AND CONFIRMATION OF THE PARTIES CONCERNED BEFORE THE FAA,THAT HE ADMITTED THE ADDITIONAL EVIDENCES,THAT THE AO WAS GIVEN A CHANCE TO VERIFY THE CLAIM OF THE ASSESSEE ,THAT IN THE REMAND PROCEEDINGS THE AS SESSEE PRODUCED THE LENDERS AND FURNISHED NECESSARY DETAILS.FROM THE DETAILS FILED IT IS CLEAR THAT IN MOST OF THE CASES LOANS/LIABILITIES ARE OF NOT CURRENT YEAR AND THE BALANCES WERE APPEARING IN THE BALANCE SHEETS OF EARLIER AY.S. IT WAS ADMITTED BY THE AO THAT IN THE CASES OF DILIP CHOPRA, PRANAV ENTERPRISES AND GAUTAM PETROCHEM INDUSTRIES PVT. LTD. THE OUTSTANDING LIABILITIES PERTAINED TO EARLIER YEARS.THEREFORE,IN OUR OPINION THE FAA WAS JUSTIFIED IN DELETING THE ADDITIONS MADE BY THE AO.SIMILARLY,IN TH E CASES OF RAJENDRA CHOPRA,RAKESH CHOPRA,K - SARC POLYMERS, PYRAMID ENERGY CREATIONS CO.,BPC POLYMERS AND CHAKRESHWARI PLASTICS (INDIA) LTD. SUVIDHI IMPEX,IT WAS FOUND BY THE FAA THAT MOST OF THE BALANCES WERE OLD,THAT THE TRANSACTIONS WERE CARRIED OUT THROU GH BANKING CHANNESL,THAT IDENTITY OR CREDITWORTHINESS OF THE LENDERS WAS NOT IN DOUBT.LASTLY IN THE CASE OF J K JAIN AND M/S. K.C. JAIN IT IS FOUND THAT THEIR RETURNS AND BALANCE SHEETS WERE FILED BEFORE THE AO BUT HE DID NOT COMMENT ABOUT THE AUTHENTICITY OF THE DOCUMENTS.IT IS A FACT THAT T HE PAN OF ALL THE CREDITORES WERE MADE AVAILABLE TO THE AO. COPIES OF THE RETURNS OF THE LENDERS WERE ALSO FILED IN MOST OF THE CASES .THE AO COULD HAVE VERY WELL CROSS VERIFIED THE GENUINENESS OF THE TRANSACTIONS.BUT,HE DID NOT MAKE ANY INVESTIGATION IN THAT REGARD . SO ,WE AGREE WITH THE OBSERVATION OF THE FAA THAT THE ASSESSEE HAD SUFFICIENTLY DISCHARGED THE BURDEN WHICH LAY UPON HER TO EXPLAIN THE NATURE AND SOURCE OF THE CREDIT ENTRY APPEARING IN HER BOOKS OF ACCOUNTS AND THE BURDEN HAD CLEARLY SHIFTED TO THE AO TO PROVE TO THE CONTRARY TO HOLD THAT IN SPITE OF HER EXPLANATION THE ENTRIES COULD STILL BE HELD TO REPRESENT HER INCOME.IN OUR OPINION,T HE AO FAILED TO DISCHARGE THE ONUS SHIFTED TO HIM. T HEREFORE,WE HOLD THAT THE FAA HAD RIGHTLY CONCLUDED THAT IT WAS SUFFICIENT TO DELETE THE ADDITION. CONFIRMING HIS ORDERS,WE DECIDE EFFECTIVE GROUND OF APPEAL(1 - 3)AGAINST THE AO. AS A RESULT,APPEAL FILED BY THE AO STANDS DISMISS ED. . ORDER PRONOUNCED IN THE OPEN COURT ON 9 TH SEPTEMBER,2015. 9 , 2015 SD/ - SD/ - ( / PARTHASARATHY CHOUDHURY) ( / R AJENDRA) / JUDICIAL MEMBER / ACCOUNTANT MEMBER / MUMBAI, /DATE: 09 .09.2015 . . . JV.SR.PS. ITA/ 7 567 /M/11 - ANITA 5 / COPY OF THE ORDER FORWARDED TO : 1. APPELLANT / 2. RESPONDENT / 3. THE CONCERNED CIT(A)/ , 4. THE CONCERNED CIT / 5. DR A BENCH, ITAT, MUMBAI / , , . . . 6. GUARD FILE/ //TRUE COPY// / BY ORDER, / DY./ASST. REGISTRAR , / ITAT, MUMBAI.