ITO WD 13(2)(4), MUMBAI V. SAJJANKUMAR DIDWANI, MUMBAI

ITA 7716/MUM/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 79019 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-05-2014
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: E
• Next Hearing Date: 13-03-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 27-12-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: SHRI
• Keywords: Opportunity of being heard; Period of limitation; Accommodation entries; Onus to prove
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUM BAI , , BEFORE SHRI SANJAY ARORA, AM AND SHRI AMIT SHUKLA, JM ./ I.T.A. NO. 7716/MUM/2012 ( / ASSESSMENT YEAR: 2009-10) ITO-13(2)(4), ROOM NO. 412, 4 TH FLOOR, AAYKAR BHAVAN, M. K. ROAD, MUMBAI-400 020 / VS. SAJJANKUMAR DIDWANI C/O. SAJAN STEELS, 406-B, BHARAT CHAMBERS, 52C, BARODA ST., CARNAC BUNDER, MUMBAI-400 009 ' ./# ./PAN/GIR NO. AFUPD 1216 J ( $ / REVENUE ) : ( %& '( /ASSESSEE ) & ./ I.T.A. NO. 7793/MUM/2012 ( / ASSESSMENT YEAR: 2009-10) SAJJANKUMAR DIDWANI C/O. SAJAN STEELS, 406-B, BHARAT CHAMBERS, 52C, BARODA ST., CARNAC BUNDER, MUMBAI-400 009 / VS. ITO-13(2)(4), ROOM NO. 412, 4 TH FLOOR, AAYKAR BHAVAN, M. K. ROAD, MUMBAI-400 020 ' ./# ./PAN/GIR NO. AFUPD 1216 J ( %& '( /ASSESSEE ) : ( $ / REVENUE ) $ ) * / REVENUE BY : SHRI ASHOK SURI %& '( ) * / ASSESSEE BY : SHRI PANKAJ R. TOPRANI %$ + ) , / DATE OF HEARING : 13.03.2014 -./ ) , / DATE OF PRONOUNCEMENT : 28.05.2014 2 ITA NOS. 7716 & 7793/M/12 (A.Y. 2009-10) SAJJANKUMAR DIDWANI / O R D E R PER SANJAY ARORA, A. M.: THIS IS A SET OF TWO APPEALS BEING, I.E., CROSS APP EALS BY THE REVENUE AND THE ASSESSEE FOR THE ASSESSMENT YEAR (A.Y.) 2009-10 ARI SING OUT OF THE ORDER BY THE COMMISSIONER OF INCOME TAX (APPEALS)-24, MUMBAI (C IT(A) FOR SHORT) DATED 08.10.2012, PARTLY ALLOWING THE ASSESSEES APPEAL C ONTESTING ITS ASSESSMENT FOR THE SAID YEAR VIDE ORDER U/S.143(3) OF THE INCOME TAX ACT, 1 961 (THE ACT HEREINAFTER) DATED 19.12.2011. 2. WE SHALL TAKE UP THE TWO APPEALS IN SERIATIM. REVENUES APPEAL 3. THE FACTS IN RELATION TO THE REVENUES APPEAL, R AISING A SINGLE ISSUE PER ITS TWO GROUNDS, IS THAT THE ASSESSEES ACCOUNTS WERE DURIN G THE COURSE OF ASSESSMENT PROCEEDINGS OBSERVED BY THE ASSESSING OFFICER (A.O.) TO BEAR TR ADE CREDITS AT RS.259.93 LACS, WORKING TO ABOUT 40% OF THE PURCHASES FOR THE YEAR, BEING A T RS.652.95 LACS, I.E., APPROXIMATING TO NEARLY FIVE MONTHS PURCHASES, WHICH IN HIS VIEW WA S DEFINITELY QUITE HIGH. ENTERTAINING DOUBTS WITH REGARD TO THE GENUINENESS OF THE CREDIT S, NOTICES WERE ISSUED U/S.133(6) BY HIM TO FOUR CREDITORS HAVING OUTSTANDINGS SINCE LON G, LIABILITY QUA WHICH AGGREGATED TO RS.78.70 LACS. REPLIES WERE RECEIVED FROM TWO PARTI ES, FOR A TOTAL CREDIT OF RS.65.41 LACS. FOR THE BALANCE LIABILITY OF RS.13.29 LACS, DETAILE D AS UNDER, NOTICES WERE EITHER RETURNED OR NOT RESPONDED TO BY THE CONCERNED CREDITORS: SR. NO. PARTIES AMT (RS.) REMARKS 1 SWASTIK ENTERPRISES 2,94,345/- RETURNED 2 PASAD STEELS 10,34,124/- NO REPLY NO CONFIRMATION OR ANY OTHER MATERIAL EVIDENCING TH E EXISTENCE OF ANY LIABILITY TO THE CONCERNED PARTIES BEING FURNISHED IN THE ASSESS MENT PROCEEDINGS, THE A.O. CONSIDERED THE SAME AS NOT REPRESENTING AN EXTANT LIABILITY, A ND ADDED THE SAME AS THE ASSESSEES INCOME FOR THE YEAR APPLYING SECTION 41(1) OF THE A CT, I.E., ON ACCOUNT OF REMISSION OR CESSATION OF LIABILITY. IN APPEAL, THE ASSESSEE FOU ND FAVOUR WITH THE LD. CIT(A) ON THE 3 ITA NOS. 7716 & 7793/M/12 (A.Y. 2009-10) SAJJANKUMAR DIDWANI BASIS THAT THE RELEVANT DETAILS STOOD SUBMITTED. TH E PARTIES WERE EXISTING, AND THERE WAS NOTHING TO SHOW THAT THERE WAS A REMISSION OR CESSA TION OF LIABILITY OR PART THEREOF. THE LD. CIT(A) ACCEPTED THE ASSESSEES CLAIM, HOLDING THUS: (PG. 7 OF THE IMPUGNED ORDER) FROM THE LANGUAGE OF THE SECTION, IT HAS TO BE SEE N WHETHER ASSESSEE OBTAINED, IN CASH OR KIND ANY BENEFIT IN RESPECT OF TRADING LIABILITY. IN THE A CASE THESE TRADING LIABILITIES HAVE BEEN SHOWN AS OUTSTANDING AS ON 31.03.2009. IN THIS CASE, THEREFORE, IT IS TO BE SE EN WHETHER ASSESSEE FURNISHED DETAILS AS REQUIRED BY THE AO, IF HE FU RNISHED, REGARDLESS OF THE DETAILS FURNISHED, WHETHER THE CREDITS CAN BE TREAT ED U/S.41(1). HERE, THE A SUBMITTED THAT HE FILED THE DETAILS TO THE AO TO SH OW THAT THE PARTIES ARE EXISTING, HE HAS ALSO INFORMED THAT THE PARTIES DID NOT GIVE UP THIS LOAN. THE AR ALSO SUBMITTED THAT SUBSEQUENTLY THE AMOUNTS HAV E BEEN PAID TO THE CREDITORS. IN THESE CIRCUMSTANCES BASED ON THE FACT S AVAILABLE ON RECORD, AS THE PARTIES ARE IDENTIFIABLE AND REMISSION DID NOT TAKE PLACE, THE AO IS NOT CORRECT IN TREATING THE AMOUNT OF RS.13,28,469 UNDE R SECTION 41(1) OF IT. ACT. THEREFORE, HE IS DIRECTED TO DELETE THE ADDITI ON U/S.41(1). THUS, THIS GROUND OF APPEAL IS ALLOWED. AGGRIEVED, THE REVENUE IS IN APPEAL, RAISING THE FO LLOWING GROUNDS: 1. (I) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN DELETING ADDITION OF RS.13,28,4 69/- MADE BY THE A.O. (II) WHILE DOING SO, THE LD. CIT(A) HAS ERRED IN AD MITTING THE NEW EVIDENCE WITH RESPECT TO PROOF OF PAYMENT SUBSEQUEN TLY TO THE CREDITORS VIZ. M/S. SWASTIK ENTERPRISES AND M/S. PASAD STEEL IN VI OLATION OF RULE 46A. THE VERIFICATION OF THE GENUINENESS WAS ESSENTIAL A S THESE CREDITORS WERE NAMED BY THE SALES TAX DEPARTMENT AS HAWALA GIVERS . 4. WE HAVE HEARD THE PARTIES, AND PERUSED THE MATER IAL ON RECORD. 4.1 OUR FIRST OBSERVATION IN THE MATTER IS THAT WHE THER A LIABILITY REFLECTED IN THE ASSESSEES BOOKS OF ACCOUNT IS INDEED SO, I.E., REP RESENTS THE ASSESSEES LIABILITY TO THE CREDITOR CONCERNED IN THE STATED SUM AT THE RELEVAN T POINT OF TIME, IS A MATTER OF FACT AND NOT OF LAW. TWO, APPARENT IS TO BE CONSIDERED AS RE AL, SO THAT THE LIABILITY HAVING BEEN CLAIMED AND ALLOWED IN THE PAST, IT CONTINUING TO B E REFLECTED AS SO IN THE ASSESSEES REGULAR BOOKS OF ACCOUNT, WHICH HAVE EVIDENTIARY VA LUE U/S.34 OF THE EVIDENCE ACT, THE PRESUMPTION IN LAW WOULD ONLY BE THAT THE OUTSTANDI NG LIABILITY INDEED CONTINUES TO OBTAIN AS AT THE RELEVANT YEAR-END. SO, HOWEVER, WHEN THE LIABILITY CONTINUES TO SUBSIST YEAR AFTER 4 ITA NOS. 7716 & 7793/M/12 (A.Y. 2009-10) SAJJANKUMAR DIDWANI YEAR, FOR SEVERAL YEARS, SERIOUS AND VALID DOUBTS A S TO ITS EXISTENCE OR AS REPRESENTING AN EXISTING LIABILITY, MAY ARISE. THIS IS AS IN THE VE RY NATURE OF THE EVENTS, NOBODY WOULD ORDINARILY, I.E., WITHOUT JUSTIFIABLE REASON, NOT C LAIM HIS DUES, REPRESENTING HIS HARD EARNED MONEY OR CAPITAL BUILT UP OVER YEARS. THEN, AGAIN, WHY WOULD ONE NOT AGITATE THE MATTER OR TAKE LEGAL RECOURSE TO EFFECT RECOVERY. THAT IS, THE SAID PRESUMPTION FAILS ON THE TEST OF HUMAN PROBABILITIES IN THE FACTS AND CIRCUMSTANCES OF THE CASE. OF COURSE, THERE COULD BE GENUINE AND VALID REASONS OBTAINING IN A PARTICULAR CASE, SO THAT A CREDIT THOUGH OUTSTANDING IN THE BOOKS FOR LONG, REPRESENTS A GEN UINE LIABILITY. WHY, LOANS ON INTEREST- FREE BASIS OR TOWARD RISK OR SEED CAPITAL BY WAY OF SUBSCRIPTION TO SHARES, IS GIVEN WITH NO TIME PRESCRIBED FOR ITS RETURN BACK OR EVEN ANY STI PULATION WITH REGARD TO RETURN THEREON. AGAIN, IN A GIVEN CASE IT COULD BE THAT THE LIABILI TY REMAINS TO BE RECOVERED FOR WANT OF TIME OR RESOURCES WITH THE CREDITOR, I.E., TO PURSU E THE LEGAL RECOURSE. IF SO, THE RECALCITRANT DEBTOR STANDS BENEFITED TO THAT EXTENT. IN OTHER WORDS, THE MATTER IS PRIMARILY AND ESSENTIALLY FACTUAL . THE HONBLE DELHI HIGH COURT PER ITS RECENT DECISIO N IN THE CASE OF CIT VS. CHIPSOFT TECHNOLOGY (P.) LTD. [2012] 210 TAXMAN 173 (DEL), EXAMINING THE LEGAL AS PECT OF THE MATTER, HAS CLARIFIED THAT THE VIEW THAT MERELY BEC AUSE A LIABILITY OUTSTANDS IN BOOKS, AND THAT LAPSE OF TIME BARS THE REMEDY BUT DOES NOT EFF ACE THE LIABILITY, IS AN ABSTRACT AND THEORETICAL ONE WHICH DOES NOT GROUND ITSELF IN REA LITY. THE INTERPRETATION OF LAW, PARTICULARLY FISCAL AND COMMERCIAL LEGISLATION, IS TO BE BASED ON PRAGMATIC REALITIES. IT WOULD BE INDEED PARADOXICAL, IF NOT ILLOGICAL, TO A LLOW THE ASSESSEE-DEBTOR TO, WHILE AVOIDING A LIABILITY ON THE BASIS THAT IT IS NO LON GER ENFORCEABLE IN LAW, YET CLAIM HIS STATUS AS A DEBTOR, SO THAT HE WAS INDEED LIABLE FOR THE A MOUNT REFLECTED AS A LIABILITY IN ACCOUNTS. FURTHER, EXPLANATION 1 TO THE PROVISION INSERTED BY FINANCE (NO.2) ACT, 1996 W.E.F. 01.04.1997 PROSCRIBES AN ASSESSEE TO CLAIM AN INDEB TED STATUS WHILE WRITING BACK THE AMOUNT IN BOOKS, EVEN IF UNILATERALLY, IN ITS RESPE CT. THE WORD EMPLOYED IN THE SAID EXPLANATION IS INCLUDE AND NOT MEANS, SO THAT IT IS NOT TO BE READ IN A RESTRICTIVE MANNER. THE TRIBUNAL EXPLAINED THE SCOPE OF THE SAI D EXPLANATION IN THE CASE OF KALYANI MAAN SINGH VS. ITO (IN ITA NO. 6500/MUM(A)/2011 DATED 14.11.2013) TO MEAN THAT 5 ITA NOS. 7716 & 7793/M/12 (A.Y. 2009-10) SAJJANKUMAR DIDWANI THE ASSESSEE, EVEN AS ACCOUNTS ARE NOT SACROSANCT, CANNOT ASSUME A STAND CONTRARY TO HIS OWN ACCOUNTS. EXPLANATION 1, ACCORDINGLY, COULD NOT BE INTERPRETED TO CONCLU DE THAT THERE IS OR COULD BE NO REMISSION OR CESSATION OF LIABILI TY UNLESS THE SAME IS WRITTEN OFF IN ACCOUNTS. THE ARGUMENT THAT THERE WAS NO PERIOD OF LIMITATION IN RESPECT OF A LIABILITY BEING DISPUTED UNDER THE INDUSTRIAL DISPUTES ACT WA S ALSO REPELLED BY THE HONBLE COURT IN CHIPSOFT TECHNOLOGY (P.) LTD. (SUPRA) ON THE BASIS OF THE DECISION BY THE APEX CO URT IN THE NEDUNGADI BANK LTD. VS. K. P. MADHAVANKUTTY AIR 2000 SC 839, HOLDING THAT A STALE DISPUTE OUSTS ITSELF FROM BEING ENTERTAINED AND ADJ UDICATED. AS WOULD BE SEEN, THE HONBLE COURT HAS SOUGHT TO READ THE PROVISION CONSISTENT W ITH THE FACTS OF THE CASE, AND NOT ON THE BASIS OF A THEORETICAL CONSTRUCT ALONE, DIVORCED FR OM THE FACTS OF THE CASE. REFERENCE WAS MADE BOTH BY THE HONBLE COURT AS WELL AS THE TRIBU NAL IN THE AFORE-REFERRED DECISIONS TO THE DECISION IN THE CASE OF KESORAM INDUSTRIES & COTTON MILLS LTD. VS. CIT [1992] 196 ITR 845 (CAL.) TO THE EFFECT THAT THE NON-DISCHARGE OF A LIABILITY OVER A LONG PERIOD OF TIME, COUPLED WITH ABSENCE OF ANY DISPUTE AND/OR OF LEGAL RECOURSE, WOULD LEAD TO A FIRM BASIS TO INFER REMISSION OR CESSATION OF LIABILITY. THE SAID DECISION BY THE HONBLE COURT STANDS FOLLOWED AND ADOPTED BY THE TRIBUNAL, AS IN ITO VS. SHAILESH D. SHAH (IN ITA NO.7012/MUM/2010 DATED 11.12.2013) AND YUSUF R. TANWAR VS. ITO (IN ITA NO.8408/MUM/2010 DATED 28.02.2013). ACCORDINGLY, AN OMISSION TO PAY COULD GIVE RISE TO THE LEGAL INFERENCE OF CESSATION OF LIABILITY. T RUE, AN AMOUNT MAY CONTINUE TO OUTSTAND IN ACCOUNTS, SO THAT THE ASSESSEE IS PRIMA FACIE LIABLE IN ITS RESPECT. HOWEVER, IT IS THE VERACITY OR THE TRUTH OF THOSE VERY ACCOUNTS, CONST ITUTING THE ASSESSEES EVIDENCE, THAT THE ASSESSEE IS REQUIRED TO ESTABLISH. THE MATTER WOULD, THEREFORE, HAVE TO BE DECIDED IN LIGHT OF THE CONSPECTUS OF THE FACTS OF EACH CASE . 4.2 CONTINUING FURTHER, THE ASSESSEE FAILING TO FUR NISH CONFIRMATIONS FROM THE TWO CREDITORS UNDER REFERENCE, THE A.O. INFERRED THE SA ID CREDITS, NOTWITHSTANDING THEIR BEING REFLECTED AS PAYABLES, AS NOT REPRESENTING THE ASSE SSEES LIABILITY THERETO AS ON THE RELEVANT DATE (31.03.2009), SO THAT THERE WAS A CESSATION OF LIABILITY DURING THE YEAR, ATTRACTING SECTION 41(1). AS AFORE-NOTED, THE BASIS OF RELIEF TO THE ASSESSEE BY THE LD. CIT(A) WAS THE 6 ITA NOS. 7716 & 7793/M/12 (A.Y. 2009-10) SAJJANKUMAR DIDWANI ABSENCE OF ANY MATERIAL WITH THE REVENUE TO EXHIBIT A REMISSION OR CESSATION OF THE IMPUGNED LIABILITY. THAT, IN OUR VIEW, IS REQUIRING IT (THE REVENUE) TO PROVE A NEGATIVE. THE PRIMARY ONUS TO PROVE ITS RETURN, AND THE CLAIM S PREFERRED THEREBY, IS ONLY ON THE ASSESSEE (REFER: CIT V. CALCUTTA AGENCY LTD . [1951] 19 ITR 191 (SC)). THE RETURN BEING PREMISED ON A PARTICULAR SUM/S AS BEING THE ASSESSE ES LIABILITY, ITS EXISTENCE AS SUCH, SO THAT THE ASSESSEE WAS INDEED LIABLE AS AT THE RELEV ANT YEAR-END - A MATTER OF FACT COULD ONLY BE SHOWN BY THE ASSESSEE WHERE CALLED UPON TO DO SO BY THE REVENUE IN THE FACE OF GENUINE DOUBTS AS TO IT BEING INDEED SO. IT COULD B E ARGUED THAT EVEN WHERE THE ASSESSEE IS UNABLE TO PROVE THE EXISTENCE OF A TRADE LIABILITY AS AT THE RELEVANT YEAR-END, WHICH THOUGH CONTINUES TO OUTSTAND IN BOOKS, WOULD YET NOT EXHIB IT THAT THE REMISSION OR CESSATION OF THE LIABILITY DURING THE RELEVANT YEAR, AND WHICH I S A PREREQUISITE FOR THE APPLICATION OF SECTION 41(1). THE ARGUMENT, ATTRACTIVE AT FIRST SI GHT, IN-AS-MUCH AS THE SAME REPRESENTS A PRIMARY INGREDIENT OF THE RELEVANT PROVISION, FAILS ON SCRUTINY. THIS IS FOR THE REASON THAT THE ASSESSEE REFLECTING THE AMOUNT AS A LIABILITY I N HIS BOOKS FOR THE IMMEDIATELY PRECEDING YEAR, HAS CONFIRMED IT AS SO AS AT THE EN D OF THAT YEAR, I.E., 31.03.2008 IN THE PRESENT CASE. IT DOES NOT THEREFORE LIE IN HIS MOUT H OR IS NOT OPEN FOR HIM TO SAY OR CONTEND THAT IT WAS NOT SO, AND THAT THE AMOUNT WAS IN FACT NOT OUTSTANDING EVEN ON THAT DATE. THE REVENUE HAS MERELY PROCEEDED BY ACCEPTING THE ASSES SEES CLAIMS AND BOOKS FOR THAT YEAR. THE PRINCIPLE OF APPROBATE AND REPROBATE WOULD THER EFORE APPLY TO ESTOPP THE ASSESSEE FROM TAKING SUCH A STAND, I.E., LEGALLY. T HE ANOMALY STANDS EXPLAINED FAMOUSLY BY THE HONBLE APEX COURT IN PHOOL CHAND BAJRANG LAL VS. ITO [1993] 203 ITR 456 (SC) IN THE CONTEXT OF REOPENING OF REASSESSMENT U/S.147 , WHICH REQUIRES THE ASSESSEE TO DISCLOSE ALL MATERIAL FACTS FULLY AND TRULY: YOU ACCEPTED MY LIE, NOW YOUR HANDS ARE TIED AND YOU CAN DO NOTHING . IT CLARIFIED THAT IT WOULD BE A TRAVESTY OF JUST ICE TO ALLOW THE ASSESSEE THAT LATITUDE. WHAT WOULD, ACCORDINGLY, BE REQUIRED OF US IS AN EX AMINATION OF THE FACTS AND CIRCUMSTANCES OF THE CASE TO DRAW A F INDING OF FACT BASED THEREON, AS TO THE EXISTENCE OR OTHERWISE OF THE LIABILITIES UNDER REF ERENCE . 7 ITA NOS. 7716 & 7793/M/12 (A.Y. 2009-10) SAJJANKUMAR DIDWANI 4.3 COMING TO THE FACTS OF THE CASE, WE FIRSTLY OBS ERVE THAT NO REASON OR EXPLANATION WHATSOEVER STANDS FURNISHED BY THE ASSESSEE AT ANY STAGE FOR THE TRADE LIABILITIES TO SUBSIST FOR YEARS, RAISING GENUINE DOUBTS AS TO THEIR EXIST ENCE AS AT THE RELEVANT YEAR-END. COULD A LIABILITY CONTINUE TO OUTSTAND FOR YEARS WITHOUT AN Y REASON, AND WHICH COULD ONLY BE FURNISHED OR EXPLAINED BY THE ASSESSEE, THE DEBTOR, BEING IN THE INTIMATE KNOW OF ITS AFFAIRS ? COMING TO THE SPECIFICS OF THE TWO TRADE CREDITS, I .E., THE POSITIVE MATERIALS, IF ANY, FURNISHED BY THE ASSESSEE TO ESTABLISH THE EXISTENC E OF THE LIABILITY AS AT THE RELEVANT YEAR- END, WE FIND CONFIRMATION OF THE ACCOUNT STATEMENT AS APPEARING IN THE ASSESSEES BOOKS OF ACCOUNT FROM PASAD STEELS (PB PGS.13-14). THE SA ME BEARS THE PAN OF THE CREDITOR AS WELL AS THE FACT OF PAYMENT THERETO IN THE IMPUGNED SUM VIDE CHEQUE NO. 201088 ON 28.03.2012 . EVEN THOUGH THE SAID CONFIRMATION IS ACCOMPANIED BY A CERTIFICATE BY THE LD. AR TO THE EFFECT THAT THE SAME STOOD FURNISHED BEFO RE THE A.O., IT IS CLEARLY FALSE IN-AS- MUCH AS THE ASSESSMENT ORDER IS DATED 19.12.2011 . HOW COULD A TRANSACTION DATED 28.03.2012, WHICH WOULD ONLY BE CONFIRMED BY THE CR EDITOR ON OR AFTER THE SAID DATE, BE REPORTED TO THE A.O. ON 19.12.2011, EVEN AS THE HEA RING BEFORE HIM WOULD HAVE PRESUMABLY CLOSED PRIOR THERETO ? THIS FALSITY ON BEHALF OF THE ASSESSEE IS HIGHLY CONDEMNABLE TO SAY THE LEAST AND NEEDS TO BE DEPREC IATED IN THE STRONGEST TERMS. WHAT ANGUISHES US EQUALLY IS THAT THE SAME WAS NOT POINT ED OUT BY THE LD. DR DURING HEARING, AND WHICH IS PARTICULARLY ASTONISHING CONSIDERING T HAT THE REVENUES MAIN CHARGE IS THAT THE CONCERNED CREDITORS ARE NOT GENUINE TRADERS BUT ONLY HAWALA OPERATORS, PROVIDING ACCOMMODATION ENTRIES, AND THAT EVIDENCE HAD BEEN A DMITTED AND ACTED UPON BY THE LD. CIT(A) IN CONTRAVENTION OF RULE 46A. THAT THE LD. C IT(A) HAS ALSO DONE SO WITH ABANDON, I.E., IN CLEAR VALUATION OF 46A, IS ALSO VERY UNFOR TUNATE. BE THAT AS IT MAY, GIVING THE ASSESSEE THE BENEFIT OF DOUBT, I.E., THAT THE CERTI FICATE IS PARTLY CORRECT, AND THAT THE SAID CONFIRMATION STOOD FURNISHED BEFORE THE FIRST APPEL LATE AUTHORITY (WHO THOUGH HAS NOT GIVEN ANY FINDING IN THE MATTER), WE ONLY CONSIDER IT FIT AND PROPER IN LIGHT THEREOF THAT THE MATTER IS RESTORED BACK TO THE FILE OF THE A.O. FOR VERIFICATION OF THE ASSESSEES CLAIMS AS REGARDS ITS LIABILITY TO M/S. PASAD STEELS, AND DEC IDE THE ISSUE ARISING AFRESH BY ISSUING 8 ITA NOS. 7716 & 7793/M/12 (A.Y. 2009-10) SAJJANKUMAR DIDWANI DEFINITE FINDINGS OF FACT, PARTICULARLY WITH REGARD TO THE GENUINENESS OF THE PAYMENTS CLAIMED TO BE MADE DURING F.Y. 2008-09, AFTER ALLOW ING REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. WE DECIDE ACCORDINGLY. NO SUCH CONFIRMATION OR ANY OTHER MATERIAL EVIDENCI NG THE EXISTENCE OF THE LIABILITY TO THE OTHER PARTY, SWASTIK ENTERPRISES, STANDS ADMITTEDLY FURNISHED AT ANY STAGE, WITH THE NOTICE TO HIM BY THE A.O. RETURNING UNSERV ED, FOR WHICH AGAIN NO EXPLANATION STANDS FURNISHED BY THE ASSESSEE. THE AMOUNT IS OUT STANDING SINCE 09.07.2003, I.E., FOR A PERIOD OF ALMOST SIX YEARS AS AT THE END OF THE REL EVANT PREVIOUS YEAR, AND FOR OVER 9 YEARS BY THE TIME THE MATTER STOOD DECIDED BY THE FIRST A PPELLATE AUTHORITY. NOR REASON FOR THE SAME STANDS ADVANCED AT ANY STAGE, AND EVEN NO CLAI MS WITH REGARD THERETO WERE MADE BEFORE US, I.E., AFTER A FURTHER LAPSE OF ANOTHER 1 YEARS. UNDER THE CIRCUMSTANCES, THE SAME CAN CLEARLY BE SAID TO BE UNPROVED, AND WE THE REFORE CONFIRM THE APPLICATION OF SECTION 41(1) IN RELATION TO THE SAID CREDIT. WE DE CIDE ACCORDINGLY. ASSESSEES APPEAL 5. THE ASSESSEES APPEAL RAISES THREE GROUNDS. WHIL E GROUND NO. 1 WAS NOT PRESSED DURING HEARING, THE OTHER TWO, I.E., GROUND NOS. 2 & 3, ARE IN RELATION TO THE CONFIRMATION OF THE ADDITION IN THE SUM OF RS.3,52,090/- EFFECTE D AND SUSTAINED U/S.68 OF THE ACT. THE FACTS IN BRIEF ARE THAT THE ASSESSEES ACCOUNTS REF LECTED ADVANCES FROM DEBTORS AT RS.76.78 LACS AS AT THE YEAR-END. THE SAME CONTINUING FROM Y EAR TO YEAR, THE A.O. ENTERTAINED DOUBTS AS TO THE GENUINENESS OF THE SAID CREDITS. T HE ASSESSEE BEING UNABLE TO, IN SPITE GRANT OF OPPORTUNITY, FURNISH CONFIRMATIONS THEREFR OM OR EVEN THEIR ADDRESSES, THE ENTIRE AMOUNT STOOD ADDED AS INCOME U/S.68 OF THE ACT. IN APPEAL, THE ASSESSEE SUBMITTED THAT OF THE TOTAL SUM ONLY THE IMPUGNED SUM OF RS.3,52,090/ - PERTAINED TO THE CURRENT YEAR; THE ADVANCE ACCOUNT BEARING AN OPENING BALANCE (AS ON 0 1.04.2008) OF RS.73,25,923/-. RELYING ON THE DECISIONS IN THE CASE OF CIT VS. P. MOHANAKALA [2007] 291 ITR 278 (SC) AND CIT VS. SHRI VARDHAMAN OVERSEAS LTD. [2012] 343 ITR 408 (DEL), CLEARLY SECTION 68 APPLIES ONLY TO A SUM CREDITED IN THE AS SESSEES BOOKS DURING THE RELEVANT YEAR. ACCORDINGLY, THE ASSESSEE HAVING FAILED TO FURNISH THE RELEVANT DETAILS OR PROVE THE CREDITS, 9 ITA NOS. 7716 & 7793/M/12 (A.Y. 2009-10) SAJJANKUMAR DIDWANI HE CONFIRMED THE ADDITION FOR THE CREDITS TO THE EX TENT ARISING DURING THE YEAR, I.E., FOR RS.3,52,090/-. AGGRIEVED, THE ASSESSEE IS IN SECOND APPEAL. 6. WE HAVE HEARD THE PARTIES, AND PERUSED THE MATER IAL ON RECORD. NO IMPROVEMENT WHATSOEVER IN ITS CASE STANDS MADE BY THE ASSESSEE BEFORE US. THE ASSESSEES SOLE BASIS FOR CONTESTING THE SAME, WHICH STOOD ALSO RAISED BE FORE THE LD. CIT(A), WHO THOUGH DID NOT FIND IT CONVINCING, IS THAT THE PAYMENT TO THE EXTENT OF RS.3,01,090/- STOOD MADE IN THE IMMEDIATELY SUCCEEDING YEAR. THE CLAIM IS MISPLACED . THOUGH THERE IS NO FINDING TO THAT EFFECT BY THE AUTHORITIES BELOW, THE PAYMENT TO THE STATED EXTENT MAY FIND REFLECTION IN THE ASSESSEES BOOKS OF ACCOUNT FOR THE FOLLOWING YEAR. SO HOWEVER, IT NEEDS TO BE APPRECIATED THAT IF THE ENTRIES IN BOOKS WERE FINAL OR CONCLUSIVE, NO ADDITION U/S.68 COULD AT ALL BE MADE. IT IS ON THE FAILURE OF THE ASSESSE E TO PROVE THE VERACITY OR THE TRUTH OF THE ENTRIES APPEARING IN HIS ACCOUNTS, WHICH WOULD LEAD TO INVOCATION OF SECTION 68 OR ANY OTHER RELEVANT PROVISION FOR THAT MATTER. REFERENCE IN THIS CONTEXT MAY BE MADE TO THE DECISION IN THE CASE OF CIT VS. KAMARAIA PANDIAN [1984] 150 ITR 703 (MAD) WHEREAT THIS ASPECT OF THE MATTER STANDS EXPLAINED. WE, THE REFORE, FIND NO MERIT IN THE ASSESSEES CASE AND, ACCORDINGLY, CONFIRM THE IMPUGNED ADDITIO N. 7. IN THE RESULT, THE REVENUES APPEAL IS PARTLY AL LOWED AND PARTLY ALLOWED FOR STATISTICAL PURPOSES, AND THE ASSESSEES APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON MAY 28, 2014 SD/- SD/- (AMIT SHUKLA) (SANJAY ARORA) / JUDICIAL MEMBER / ACCOUNTANT MEMBER 0+ MUMBAI; 1% DATED : 28.05.2014 $.%../ ROSHANI , SR. PS 10 ITA NOS. 7716 & 7793/M/12 (A.Y. 2009-10) SAJJANKUMAR DIDWANI ! ' #$%& ' &$ / COPY OF THE ORDER FORWARDED TO : 1. '2 / THE APPELLANT 2. 34'2 / THE RESPONDENT 3. ( ) / THE CIT(A) 4. / CIT - CONCERNED 5. 7$8 9 3%:& , , :&/ , 0+ / DR, ITAT, MUMBAI 6. 9 ;' < + / GUARD FILE ! ( / BY ORDER, )/(* + (DY./ASSTT. REGISTRAR) , 0+ / ITAT, MUMBAI