SHRI MADANLAL GABBAJI BANJARA, Neemuch V. THE ITO, Neemuch

ITA 776/IND/2016

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 1197 (ITAT-INDORE)
• Duration Of Justice: 3 year(s) 10 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-05-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 05-03-2020
• Assessment Year: 2008-2009
• Appeal Filed On: 11-07-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S S MANTRI
• Assessee Lawyers: S S DESHPANDE
• Keywords: Unexplained cash credit; Opportunity of being heard; Principle of natural justice; Peak credit; Bad and doubtful debts; Onus to prove
• Section: 192; 43; 13; 22; 147; 131; 68; 148

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER ITA NO.775 & 776/IND/2016 ASSESSMENT YEARS: 2007-08 & 2008-09 APPELLANT BY SHRI S.S. DESHPANDE, CA REVENUE BY SHRI S.S. MANTRI, CIT DATE OF HEARING 0 5 .0 3 .2020 DATE OF PRONOUNCEMENT 22 .0 5 .2020 O R D E R PER MANISH BORAD, AM. THE ABOVE CAPTIONED APPEALS FILED AT THE INSTANCE O F ASSESSEE PERTAINING TO ASSESSMENT YEAR 2007-08 AND 2008-09 A RE DIRECTED AGAINST THE ORDERS OF COMMISSIONER OF INCOME TAX (A PPEALS) (IN SHORT LD.CIT], UJJAIN DATED 23.3.2016 AND 01.03.2 016 RESPECTIVELY WHICH ARE ARISING OUT OF THE ORDER U/S 143(3)/147 O F THE INCOME TAX SHRI MADANLAL GABBAJI BANJARA, VILL. RAIKHEDA, TEHSIL MALHARGARH, DIST. MANDSAUR (M.P) VS. INCOME TAX OFFICER, NEEMUCH (APPELLANT) (REVENUE ) PAN NO. A MFPB8239H ITA NO.775 & 776/IND/2016 MADANLAL GABBAJI BANJARA 2 ACT 1961(IN SHORT THE ACT) DATED 30.03.2013 AND 2 8.03.2014 FRAMED BY ITO, NEEMUCH. 2. AS THE ISSUES RAISED IN THESE APPEALS BELONGS TO THE SAME ASSESSEE THEY ARE BEING HEARD TOGETHER AND DISPOSED OFF FOR THE SAKE OF CONVENIENCE AND BREVITY. 3. BRIEF FACTS OF THE CASE AS CULLED OUT FROM THE RECORDS ARE THAT THE ASSESSEE IS AN INDIVIDUAL DERIVING INCOME FROM THE BUSINESS OF TRADING OF POPPY STRAW. RETURN OF INCOME WERE NOT F ILED FOR THE ABOVE TWO ASSESSMENT YEARS. AS PER THE INFORMATION AVAILABLE WITH THE LD. A.O SHOWING THAT THERE WERE HUGE CASH DEPOS IT IN THE BANK ACCOUNT HELD BY THE ASSESSEE, THE CASES WERE REOPEN ED U/S 147 OF THE ACT BY ISSUING NOTICE U/S 148 OF THE ACT. IN R EPLY THERE TO RETURN OF INCOME FOR ASSESSMENT YEAR 2007-08 WAS FI LED ON 17.1.13 DECLARING LOSS OF RS.2,64,576/- AND RETURN OF INCOM E FOR A.Y 2008- 09 SHOWING INCOME AT RS. NIL WAS FILED ON 29.8.2013 . 4. DURING THE COURSE OF ASSESSMENT PROCEEDINGS FOR ASSESSMENT YEAR 2007-08, LD. A.O NOTICED THAT ASSESSEE HAD TAK EN UNSECURED LOANS AMOUNTING TO RS. 6,19,49,750/- FROM 192 PERSO NS. HE ASKED THE ASSESSEE TO PROVE THE IDENTITY, GENUINENESS AND ITA NO.775 & 776/IND/2016 MADANLAL GABBAJI BANJARA 3 CREDITWORTHINESS OF CASH CREDITORS. ASSESSEE COULD ONLY FILE THE CONFIRMATION BUT WAS UNABLE TO PRODUCE THE CASH CRE DITORS. IN VIEW OF THE LD. A.O ASSESSEE FAILED TO PROVE THE GENUINE NESS OF THE TRANSACTION AND CREDITWORTHINESS OF THE PARTIES AND THEREFORE HE MADE THE ADDITION U/S 68 OF THE ACT AT RS. 6,19,49, 750/-. FOR ASSESSMENT YEAR 2007-08 LD. A.O ALSO OBSERVED THAT THERE WERE CASH DEPOSITS OF RS. 3,21,81,267/-. ASSESSEE HAS CL AIMED TO HAVE RECEIVED CASH FROM VARIOUS PARTIES AGAINST THE ADVA NCES GIVEN AND WERE DEPOSITED IN BANK. LD. A.O WAS NOT SATISFIED WITH THE SUBMISSIONS OF THE ASSESSEE AND MADE THE ADDITION F OR UNEXPLAINED CASH DEPOSIT AT RS.3,21,81,267/-. FEW OTHER ADDIT IONS WERE MADE RELATING TO DISHONOUR OF CHEQUES DEPOSITED AT RS.15 ,00,000/-, UNEXPLAINED DEBTORS OF LAST YEAR AT RS. 90,000/-, A DDITION FOR REFUND OF SECURITY DEPOSIT BY DISTRICT EXCISE DEPAR TMENT AT RS. 2,59,400/- AND ADDITION OF MATURITY VALUE OF FDR C REDITED INTO BANK ACCOUNT AT RS. 1,02,516/-. ASSESSEES CLAIM FO R LOSS WAS DENIED AND INCOME ASSESSED AT RS.9,60,92,612/-. 5. BRIEF FACTS RELATING TO ASSESSMENT PROCEEDINGS F OR ASSESSMENT YEAR 2008-09 ARE THAT FOR CASH DEPOSITED AT RS.4,74 ,95,921/- ITA NO.775 & 776/IND/2016 MADANLAL GABBAJI BANJARA 4 ASSESSEES CLAIM WAS THAT THE SOURCE OF THE CASH DE POSITED WERE AMOUNT RECEIVED OUT OF THE UNSECURED LOAN TAKEN IN THE PRECEDING YEAR BUT THE SAME WAS NOT ACCEPTED AND ADDITION U/S 68 OF THE ACT WAS MADE. MINOR ADDITIONS FOR DISALLOWANCE OF BAD DEBTS AT RS.90,600/- AND DISALLOWANCE OF SET OFF LOSS OF RS. 57,080/- WAS MADE. INCOME ASSESSED AT RS.4,76,43,600/-. 6. AGGRIEVED WITH THE ORDER OF THE LD. A.O ASSESSEE WENT FOR APPEAL BEFORE LD. CIT(A) FOR ASSESSMENT YEAR 2007-0 8 AND 2008-09 AND PARTLY SUCCEEDED FOR ASSESSMENT YEAR 2007-08 BU T FAILED TO SUCCEED FOR ASSESSMENT YEAR 2008-09. 7. NOW THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNA L RAISING FOLLOWING GROUNDS OF APPEAL :- ITA NO.775/IND/2016 ASSESSMENT YEAR 2007-08 'L. THE LD. AO HAS ERRED IN MAKING ADDITIONS AND LD CIT CA) HAS ERRED IN CONFIRMING THE ADDITIONS OF UNSECURED LOANS TAKEN F ROM THE INCOME-TAX PAYER, HAVING PAN NO , AND FILING THEIR IT RETURN R EGULARLY AND DEPOSITS HAS BEEN DULY CONFIRMED BY THE DEPOSITORS AND SOME OF T HE DEPOSITORS HAS BEEN ENQUIRED BY THE LD U/S . 131 OF THE ACT, THE LD AO HAS MADE ADDITION CONTENDING THAT NONE OF THE CREDITORS IS PRODUCED I S NOT CORRECT 0T THE FACTS AND RECORDS. 2. THE LD. AO HAS ERRED IN NOT CONSIDERING THE CASH DEPOSITS IN THE BANK A/C OUT OF REGULAR BOOKS MAINTAINED AND THE LD CIT( A) HAS ERRED IN ITA NO.775 & 776/IND/2016 MADANLAL GABBAJI BANJARA 5 CONFIRMING THE ADDITION WITHOUT APPRECIATING THE FA CTS OF THE CASE THAT CASH DEPOSITS IS OUT OF REGULAR BOOKS OF ACCOUNTS MAINTA INED BY THE APPELLANT. 3. THE LD AO HAS NOT FIND ANY OTHER BUSINESS OR IN VESTMENT OF THE APPELLANT IN WHICH THE CASH DRAWN IS INVESTED AND CASH DEPOSITED IN THE BANK A/C IS OUT OF ANOTHER SOURCES. 4. THE LD AO HAS ERRED IN MAKING ADDITIONS OF RS. 27,00,000/- FOR REFUND OF ADVANCES MADE EARLIER BY THE AO AND LD CIT (A) HAS ERRED IN CONFIRMING THE SAME WITHOUT APPRECIATING THE FACTS OF THE CASE THAT ADVANCES WERE APPEARING IN THE BALANCE SHEET OF EA RLIER YEARS AND THE SAME IS ON RECORD. 5. THE LD AO HAS FURTHER ERRED AND LD CIT (A) HAS A LSO ERRED IN CONFIRMING THE ADDITIONS OF AMOUNT RECEIVED FROM SUNDRY DEBTOR S WHICH IS APPEARING IN THE BALANCE SHEET OF EARLIER YEAR AND THE SAME I S ON RECORD. 6. YOUR APPELLANT CRAVES, LEAVE TO ADD, AMEND, MODI FY OR WITHDRAW ANY OF THE GROUNDS OF APPEAL ON OR BEFORE OR DURING THE CO URSE OF HEARING. ITA NO.776/IND/2016 ASSESSMENT YEAR 2008-09 'L. THE LD. AO HAS ERRED IN MAKING ADDITIONS AND LD CIT CA) HAS ERRED IN CONFIRMING THE ADDITION WITHOUT APPRECIATING THE FACTS OF THE CASE THAT CASH DEPOSITS IS OUT OF REGULAR BOOKS OF ACCOUNTS M AINTAINED BY THE APPELLANT AND OUT OF FUNDS CONTRIBUTED WITH THE FIR M M/S. ROSHANLAL DESHRAJ & PARTY. 2. THE LD. AO HAS ERRED IN NOT CONSIDERING THE COPY OF A/C OF THE FIRM M/S. ROSHANLAL DESHRAJ & PARTY FILED DURING THE COURSE O F ASSESSMENT PROCEEDINGS AND CASH DEPOSIT IN THE BANK IS RECONCI LED WITH THE SAME. ITA NO.775 & 776/IND/2016 MADANLAL GABBAJI BANJARA 6 3. THE LD AO HAS NOT FIND ANY OTHER BUSINESS OR INV ESTMENT OF THE APPELLANT WHICH THE CASH DRAWN IS INVESTED AND CAS H DEPOSITED IN THE BANK A/C IS OUT OF ANOTHER SOURCES. 4. THE LD AO HAS ERRED IN MAKING ADDITIONS OF RS. 4 ,74,95,921/- FOR REFUND OF ADVANCES MADE EARLIER BY THE AO AND LD CIT (A) H AS ERRED IN CONFIRMING THE SAME WITHOUT APPRECIATING THE FACTS OF THE CASE THAT ADVANCES WERE APPEARING IN THE BALANCE SHEET OF EARLIER YEARS AND THE SAME IS ON RECORD. 5. YOUR APPELLANT CRAVES, LEAVE TO ADD, AMEND, MODI FY OR WITHDRAW ANY OF THE GROUNDS OF APPEAL ON OR BEFORE OR DURING THE CO URSE OF HEARING. 8. LD. COUNSEL FOR THE ASSESSEE REFERRING TO THE PA PER BOOK VEHEMENTLY ARGUED REFERRING TO THE FOLLOWING WRITTE N SUBMISSIONS :- ASSESSMENT YEAR 2007-08 THE ASSESSEE HAD FILLED IN THE TENDER FOR GETTING A LICENSE FOR POPPY STRAW (DODA CHURA). UNFORTUNATELY THE ASSESSEE WAS NOT AW ARDED THE CONTRACT. THE SAID CONTRACT WAS AWARDED IN THE NAME OF SHRI R OSHANLAL SON OF DESHRAJ OF GANGA NAGAR. AFTER THE RECEIPT OF THE SA ID CONTACT SHRI ROSHANLAL APPROACHED THE ASSESSEE AS A LOCAL PERSON TO DO THE BUSINESS IN PARTNERSHIP. ACCORDINGLY THE ASSESSEE JOINED HANDS WITH THE SAID PARTY. THE DEED OF PARTNERSHIP IS ENCLOSED AT PAGE 9 OF PB FOR AY 2008-09. THE SAID PARTNERSHIP IS ALSO ASSESSED TO TAX AND ALL TH ESE AMOUNTS HAVE BEEN ADDED AS THE INCOME OF THE PARTNERSHIP. FOR THE PUR POSE OF DOING THE BUSINESS THERE WAS A REQUIREMENT OF SUBSTANTIAL FUN DS. ON THE STRENGTH OF THE LICENSE THE ASSESSEE RAISED LOANS FROM THE MARK ET THROUGH DALAL FROM ITA NO.775 & 776/IND/2016 MADANLAL GABBAJI BANJARA 7 NEARLY 192 PARTIES. ALL THE PAYMENTS WERE RECEIVED THROUGH ACCOUNT PAYEE CHEQUES FROM THE LOCAL PERSONS WHO WERE INCOME TAX ASSESSEE AND WERE FILLING THEIR REGULAR RETURNS. WHILE FRAMING THE ASSESSMENT THE LD. AO OBSERVED TH AT THE ASSESSEE HAS DEPOSITED THE REQUISITE FEES WHILE APPLYING FOR THE TENDER FOR POPPY STRAW (DODA CHURA). BUT UNFORTUNATELY THE DRAW WAS NOT OP ENED IN HIS NAME. HE FURTHER OBSERVED THAT THE SUNDRY DEBTORS HAVE BEEN DISCLOSED IN THE BALANCE SHEET TO THE TUNE OF 4,10,47,937/- REPRESEN TING THE ADVANCE TO M/S ROSHANLAL DESHRAJ & PARTY. THE ASSESSEE HAS FURTHER SHOWN THE UNSECURED LOAN OF RS.6,27,56,000/- AND THE ADVANCES ARE SHOWN AT RS. 2,14,53,330/-. THE LD. A.O DURING THE COURSE OF VAR IOUS HEARINGS ASKED THE ASSESSEE TO FILE THE CONFIRMATIONS OF ALL THE P ARTIES ALONG WITH THE BANK STATEMENT. ACCORDINGLY THE ASSESSEE FILED ALL THE C ONFIRMATIONS SHOWING THE PERMANENT ACCOUNT NUMBER OF VARIOUS CREDITORS. IN MAJORITY OF THE CASES THE BANK STATEMENT WERE ALSO FILED. DURING TH E LAST HEARING THE LD. A.O ASKED THE ASSESSEE TO PRODUCE 75 CREDITORS WITH IN A WEEK'S TIME. NUMBERS OF CREDITORS WERE TAKEN TO THE INCOME TAX O FFICE BUT THE STATEMENT OF ONLY 17 PERSONS COULD BE RECORDED. ALL OF THEM CONFIRMED TH E TRANSACTION WITH THE ASSESSEE. COPIES OF THEIR BANK ACCOUNTS AND INCOME TAX RETURNS WERE FILED. IT WAS SUBMITTED BEFORE THE LD. AO THAT THESE LOANS WERE GENUINE. THE NECESSARY CONFIRMATIONS FROM ALL THE PARTIES WERE O BTAINED AND WERE PLACED ON RECORDS. DURING THE COURSE OF THE ASSESSM ENT PROCEEDINGS SOME OF THE CREDITORS APPEARED BEFORE THE LD. AO AND CO NFIRMED THE LOANS BEING ADVANCED TO THE ASSESSEE. THE COPIES OF THE S TATEMENTS AND THEIR BANK ACCOUNT WITH INCOME TAX RETURNS ARE ATTACHED I N PB FROM PAGE 193 TO 311. IT WAS SUBMITTED THAT ALL THE CREDITS WERE RECEIVED THROUGH THE BANKING CHANNEL AND THE REPAYMENTS OF THESE LOANS W ERE ALSO MADE THROUGH BANKING CHANNEL. IN SPITE OF THESE FACTS TH E LD. AO MADE THE ITA NO.775 & 776/IND/2016 MADANLAL GABBAJI BANJARA 8 ADDITIONS U/S. 68 ON THE GROUND THAT THESE LOANS AR E NOT GENUINE. THE LD AO FURTHER OBSERVED THAT THE LOANS BORROWED BY THE ASSESSEE WERE TEMPORARILY ADVANCED TO SMALL PARTIES. THE SAID ADV ANCES HAVE NOT BEEN PROVED BY THE ASSESSEE. IT WAS SUBMITTED BEFORE THE LD. A.O THAT THE SURPLUS FUND HAS BEEN ADVANCED TO SMALL PARTIES FOR A SHORTER PERIOD AND AFTER RECOVERY OF THE SAME IT HAS BEEN DEPOSITED IN THE BANK. THE LD. AO DID NOT ACCEPT THE SUNDRY ADVANCES GIVEN BY THE ASS ESSEE AND DID NOT ACCEPT THE THEORY OF PEAK CREDIT FOR THE AMOUNTS DE POSITED IN THE BANK. AT PAGE 11 PARA 8 HE HAS MENTIONED THAT THE CHEQUES HA VE BEEN DEPOSITED IN THE BANK AND IMMEDIATELY THEREAFTER THE AMOUNTS HAD BEEN WITHDRAWN IN CASH. THE LD. AO DID NOT CONSIDER THE AVAILABILITY OF THE CASH WITHDRAWALS FROM THE BANK AND DID NOT ALLOW THE TELESCOPIC BENE FIT FOR THE CASH AVAILABILITY. THUS THE SAME AMOUNT HAS BEEN TAXED T WICE. THE LD. AO DID NOT CONSIDER THE CONFIRMATIONS FILED BY ALL THE CREDITORS. IT IS SUBMITTED THAT ALL THE CREDITORS ARE ASSESSED TO TA X AND HAVE QUOTED THEIR PAN, PERMANENT ADDRESS AND IN SOME CASES COPIES OF ITR V HAVE ALSO BEEN FILED. THE LD. AO HAS WRONGLY MENTIONED THAT N ONE OF THE CREDITORS WERE PRODUCED FOR CONFIRMING THE TRANSACTIONS. AN APPEAL WAS TAKEN BEFORE THE LD. CIT CA) WHO CONF IRMED THE ADDITION OF RS. 6,19,49,750/- BEING THE LOANS TAKEN FROM 192 C REDITORS WITH THE SHORT OBSERVATION THAT THE ASSESSEE HAS FAILED TO PRODUCE THE ABOVE PARTIES FOR EXAMINATION BEFORE THE A.O AND AS SUCH THE ASSESSEE HAS FAILED TO DISCHARGE THE BURDEN OF PROOF FOR ESTABLISHING THE GENUINENESS OF THE TRANSACTION. HE FURTHER UPHELD THE ADDITION OF RS.3 ,21,81,267/- BEING THE CASH DEPOSIT WITH THE WRONG OBSERVATION THAT THE AP PELLANT HAS GIVEN ADVANCES THROUGH CHEQUE AND IT IS HIGHLY UNLIKELY T HAT THE APPELLANT HAS RECEIVED CASH FROM THESE PERSONS FOR REPAYMENT OF L OANS. IT IS SUBMITTED THAT SMALL ADVANCES WERE GIVEN IN CASH AFTER WITHDR AWING THE SAME FROM ITA NO.775 & 776/IND/2016 MADANLAL GABBAJI BANJARA 9 THE BANK. THE LD. CIT CA) DID NOT CONSIDER THE CASH WITHDRAWN FROM THE BANK, AND DID NOT ALLOW THE TELESCOPIC BENEFIT FOR THE CASH AVAILABILITY. IT IS HUMBLY SUBMITTED THAT THE ASSESSEE HAS BORROW ED THE FUNDS FOR THE PURPOSE OF THE BUSINESS. ALL THE AMOUNTS HAVE BEEN RECEIVED BY ACCOUNT PAYEE CHEQUE AND PRACTICALLY ALL THE CREDITORS ARE ASSESSED TO TAX HAVING PAN. ALL THE CREDITORS ARE FROM THE SAME AREA AND T HE LD. A.O COULD HAVE ASCERTAIN THE FACT OF ADVANCING THE MONEY FROM THEI R RESPECTIVE INCOME TAX RETURNS. WITHOUT DOING SO HE HAS MERELY ADDED THE A MOUNT AS THE INCOME OF THE ASSESSEE ON PURE SURMISES AND CONJUCTURES IW ITH THE WRONG OBSERVATION THAT ALL THE CREDITORS WERE NOT PRODUCE D FOR EXAMINATION. THE SAID APPROACH IS UNJUDICIOUS. THE ASSESSEE HAS FILE D ALL THE CONFIRMATIONS WITH THEIR PAN AND IN MAJORITY OF CASES THE BANK ST ATEMENTS HAVE BEEN FILLED. ALL THE PAYMENTS HAVE BEEN RECEIVED THROUGH BANKING CHANNEL AND THE REPAYMENTS HAVE ALSO BEEN MADE THROUGH BANKING CHANNEL. UNDER THESE CIRCUMSTANCES THE TRANSACTION CANNOT BE TREAT ED AS UNGENUINE. FOR THE PURPOSE OF BUSINESS AND SHORT ADVANCES THE ASSE SSEE HAS WITHDRAWN THE CASH FROM THE BANK. THUS THE CASH WAS AVAILABLE FOR DEPOSITING THE SAME IN THE BANK. NO COGNIZANCE HAS BEEN GIVEN FOR THE CASH BOOK PRODUCED BEFORE THE LD. A.O AND THE LD. CIT(A). UND ER THESE CIRCUMSTANCES THE ADDITIONS MADE DESERVES TO BE DELETED. IN THIS CONNECTION WE WOULD LIKE TO DRAW YOUR HONOUR'S KIND ATTENTION TO THE FO LLOWING CASES. 1. CIT V/S. METACHEM - 245 ITR P.160 (M.P.) 11. CIT V/S. PITHAMPUR COETZA - 244 ITR P.442 (M.P .) 111. CIT V/S TANYA INDUSTRIES 322 ITR 394 (BORN) IV. CIT V/S JAI KUMAR BAKLIWAL366 ITR 217 (RAJ) & P 232 V. CIT V/S DHARAM DEV FINANCE 43 TAXMANN.COM 395 ( GUJ.) VI. CIT V/S VARINDER RAWLLEY 366 ITR 232 (P&H) ITA NO.775 & 776/IND/2016 MADANLAL GABBAJI BANJARA 10 V11. CIT V/S DEENDAYAL CHOUDHARY 293 CTR P. 468 (R AJ.) VLLL. CIT V/S HARESH D MEHTA 86 TAXMAN.COM P. 22 IN VIEW OF THE ABOVE IT IS HUMBLY PRAYED THAT THE A DDITIONS MADE BY THE LD. A.O MAY PLEASE BE DELETED. ASSESSMENT YEAR 2008-09 THE LD AO HAS MADE THE ADDITION OF RS. 4,74,95,921/ - BEING THE AMOUNT DEPOSITED IN THE BANK. IT WAS SUBMITTED BEFORE THE LD AO THAT THE ASSESSEE HAD ADVANCED A SUM OF RS. 3,90,22,670/- TO M/S ROSHANLAL DESHRAJ & PARTY AND THE MISCELLANEOUS ADVANCES TO THE TUNE OF RS. 2,14,53,230/-. THESE ADVANCES HAVE BEEN SHOWN IN TH E BALANCE SHEET FOR THE A.Y. 2007-08. THESE ADVANCES WERE RECEIVED DURI NG THE YEAR UNDER CONSIDERATION AND HAVE BEEN DEPOSITED IN THE BANK A ND THE PAYMENTS WERE MADE TO THE LOAN CREDITORS. THE LD AO HAS MADE THESE ADDITIONS ON MERELY HYPOTHETICAL GROUND THAT THE DEBTORS WERE NO T PRODUCED AND THE TRANSACTION IS NOT VERIFIABLE . IT IS HUMBLY SUBMIT TED THAT THE BALANCE SHEET CLEARLY SHOWED THE SUNDRY DEBTORS. IN THE EARLIER Y EAR, THE CREDITORS AND CASH DEPOSITS IN THE BANK HAVE ALREADY BEEN TAXED. UNDER THESE CIRCUMSTANCES IT IS A DOUBLE TAXATION, ONCE ON ACCO UNT OF SUNDRY CREDITORS AND SECONDLY ON ACCOUNT OF THE RECOVERIES OF THE SA ME AMOUNT FROM THE SUNDRY DEBTORS. IF IT IS PRESUMED THAT THERE WERE N O ADVANCES, THE AMOUNT WAS AVAILABLE IN CASH WITH THE ASSESSEE FOR DEPOSIT ING THE SAME IN THE BANK. HERE IT IS POINTED OUT THAT THE AMOUNT RECEIV ED FROM ROSHANLAL DESHRAJ INCLUDES AN AMOUNT OF RS. 1,35,00,000/- BY WAY OF A CHEQUE. (PAGE 8 OF PB) THE LD AO HAS ALREADY TAXED ALL THE AMOUNTS IN THE .HANDS OF ROSHANLAL DESHRAJ & CO. AND ALL THE TRANSACTIONS ARE VERIFIABLE FROM THEIR BOOKS. IN VIEW OF THIS IT IS I HUMBLY PRAYED THAT THE ADDITIONS MADE MAY PLEASE BE DELETED . ITA NO.775 & 776/IND/2016 MADANLAL GABBAJI BANJARA 11 9. LD. COUNSEL FOR THE ASSESSEE SUBMITTED COMMONLY FOR BOTH THE ASSESSMENT YEARS THAT ASSESSEE WAS NOT PROVIDED REA SONABLE OPPORTUNITY OF BEING HEARD. LD. A.O HAVE MADE ADDI TIONS FOR CASH CREDITS EVEN WHEN ALL CONFIRMATION WERE FILED FOR A ND MANY OF THEM WERE PRODUCED BUT THE SAME SEEMS TO HAVE BEEN OVER LOOKED BY BOTH LOWER AUTHORITIES. HE ALSO CONTENDED THAT DOU BLE ADDITION HAVE BEEN MADE. WHEN THE LD. COUNSEL FOR THE ASSESS EE WAS ASKED WHETHER THE ASSESSEE IS PREPARED TO GO BEFORE LD. A .O ONCE AGAIN WITH NECESSARY DETAILS TO SUBSTANTIATE TO ITS GROUN DS AND TO CONTENT THAT THE ADDITIONS WERE WRONGLY MADE THEN THE LD. C OUNSEL FOR THE ASSESSEE RAISED NO OBJECTION. 10. PER CONTRA LD. DEPARTMENTAL REPRESENTATIVE VEHE MENTLY ARGUED SUPPORTING ORDERS OF BOTH THE LOWER AUTHORIT IES BUT HAD NO OBJECTION IF THE ISSUES RAISED IN BOTH THE APPEALS ARE RESTORED TO THE FILE OF LD. A.O FOR AFRESH ADJUDICATION. 11. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE RECORDS PLACED BEFORE US. THE ASSESSEE HAS RAISED VARIOUS GROUNDS OF APPEAL FOR ASSESSMENT YEAR 2007-08 AND 2008-09 WHIC H MAJORLY CHALLENGES ADDITION FOR UNEXPLAINED CASH CREDITS AN D UNEXPLAINED CASH DEPOSITS. ON PERUSAL OF RECORDS INCLUDING ASS ESSMENT ORDER, ITA NO.775 & 776/IND/2016 MADANLAL GABBAJI BANJARA 12 ORDER OF LD. CIT(A), SUBMISSIONS MADE BY THE ASSESS EE AT VARIOUS STAGES SHOWS THAT THE ASSESSEE IS IN THE BUSINESS O F TRADING OF POPPY STRAW. IN ORDER TO APPLY FOR TENDER FOR POP PY STRAW IN THE STATE EXCISE DEPARTMENT HE NEEDED THE FUNDS DURING THE FINANCIAL YEAR 2006-07 RELEVANT TO ASSESSMENT YEAR 2007-08. ASSESSEE TOOK UNSECURED LOANS FROM 192 PERSONS TOTALING TO RS. 6, 27,56,000/-. IN THE VERY SAME YEAR ASSESSEE HAS CLAIMED THAT OUT OF THE TOTAL CASH CREDITS HE ADVANCED LOAN TO M/S ROSHANLAL DESHRAJ & PARTY AT RS. 4,10,47,931/-. DURING FINANCIAL YEAR 2006-07 ASSES SEE DEPOSITED CASH OF RS. 3,21,81,267/- FOR WHICH IT HAS CLAIMED THAT OUT OF THE UNSECURED LOAN RECEIVED DURING THE YEAR SOME AMOUNT WAS GIVEN AS ADVANCE TO OTHER PARTIES AND WHEN THE MONEY WAS NEE DED THE ASSESSEE RECEIVED THE CASH FROM THE ADVANCES SO GIV EN AND DEPOSITED IN THE BANK. BUT IN THE VIEW OF THE LD. A.O THE EXPLANATION GIVEN BY THE ASSESSEE WERE NOT SUFFICIE NT TO EXPLAIN THE SOURCE OF CASH CREDIT AND CASH DEPOSITED AND BOTH T HE AMOUNTS OF RS. 6,19,49,750/- AND RS. 3,21,81,267/- WERE ADDED TO THE INCOME. 12. MOVING TO ASSESSMENT YEAR 2007-08 WHERE THE ASS ESSEE HAS CHALLENGED THE ADDITION OF RS. 4,74,95,921/- MADE B Y THE LD. A.O FOR UNEXPLAINED CASH DEPOSITED IN THE BANK ACCOUNT, LD. COUNSEL ITA NO.775 & 776/IND/2016 MADANLAL GABBAJI BANJARA 13 FOR THE ASSESSEE HAS CONTENDED THAT SOURCE OF CASH DEPOSITED IS FROM THE CASH OF RS. 2,52,50,000/- AND CHEQUE OF RS . 1,35,00,000/- RECEIVED FROM M/S. ROSHANLAL DESHRAJ & PARTY TO WHO M THE ASSESSEE HAD ADVANCED THE MONEY IN THE PRECEDING FI NANCIAL YEAR THEREBY TOTALLING TO RS. 3,87,50,000/- AND THE REMA INING AMOUNT IS ALSO OUT OF THE ADVANCE GIVEN IN THE PRECEDING YEAR . ON THE OTHER HAND THE LD. A.O DID NOT ACCEPTED THE EXPLANATION O F THE ASSESSEE, CONFIRMATIONS FILED FOR THE UNSECURED CASH CREDITS WERE ALSO NOT FOUND SUFFICIENT TO PROVE THE GENUINENESS AND CREDI TWORTHINESS. LD. A.O ALSO SEEKED PERSONAL ATTENDANCE OF EACH OF THE CASH CREDITORS. LD. CIT(A) HAD CONFIRMED THE FINDING OF LD. A.O WIT HOUT MAKING ANY FURTHER ENQUIRY. 13. LD. COUNSEL FOR THE ASSESSEE HAS CONTENDED THAT DOUBLE ADDITIONS HAVE BEEN MADE DURING BOTH THE ASSESSMENT YEARS. FOR ASSESSMENT YEAR 2007-08 ADDITION FOR UNEXPLAINED CA SH DEPOSITED HAS BEEN MADE BY COMPLETELY IGNORING THE FACT THAT THE SOURCE OF CASH DEPOSIT IS FROM THE UNSECURED LOAN FROM 192 PA RTIES AND THEREFORE THE ADDITION FOR UNEXPLAINED CASH CREDIT FOR 2007-08 IS A DOUBLE ADDITION. LD. COUNSEL FOR THE ASSESSEE ALSO SUBMITTED THAT APART FROM CONFIRMATIONS, FEW OF THE CASH CREDITORS AS REQUIRED BY ITA NO.775 & 776/IND/2016 MADANLAL GABBAJI BANJARA 14 THE LD. A.O WERE ALSO PRODUCED FOR THE STATEMENTS. SOME OF THE ADDITIONS FOR ASSESSMENT YEAR 2008-09 ARE HAVING D IRECT NEXUS WITH THE LOANS GIVEN TO M/S. ROSHANLAL DESHRAJ & PA RTY OF WHICH CONFIRMATION OF ACCOUNT HAVE BEEN FILED AND MOST OF THE ENTRIES ARE THROUGH ACCOUNT PAYEE CHEQUE BUT STILL NO COGNIZANC E HAVE BEEN GIVEN BY BOTH THE LOWER AUTHORITIES. SUFFICIENT OP PORTUNITY OF BEING HEARD HAVE ALSO NOT BEEN PROVIDED TO THE ASSESSEE T HEREBY DENYING THE RIGHT OF NATURAL JUSTICE. 14. IN THESE GIVEN FACTS AND CIRCUMSTANCES OF THE C ASE, THE SUBMISSIONS MADE BY THE LD. COUNSEL FOR THE ASSESSE E AND THE ISSUE BEING OF DOUBLE ADDITIONS AND IN SOME CASE PR OPER OPPORTUNITY OF BEING HEARD HAVE NOT BEEN PROVIDED D URING THE COURSE OF ASSESSMENT AND APPELLATE PROCEEDINGS, WE IN THE INTEREST OF JUSTICE AND FAIR TO BOTH THE PARTIES ARE OF THE CONSIDERED VIEW THAT ALL THE ISSUES RAISED IN THESE APPEALS FOR ASSESSM ENT YEAR 2007-08 AND 2008-09 BY THE ASSESSEE NEEDS TO BE RESTORED TO THE FILE OF LD. A.O FOR DENOVO ADJUDICATION. LD. A.O IS DIRECTED TO ACCEPT ALL TH E DETAILS AND MATERIAL EVIDENCE BROUGHT ON RECORD BY THE ASSESSEE IN SUPPORT OF HIS CONTENTION THAT DOUBLE ADDITIONS SHO ULD NOT HAVE BEEN MADE, TELESCOPING BENEFIT OF CASH DEPOSITS OUT OF THE FUNDS ITA NO.775 & 776/IND/2016 MADANLAL GABBAJI BANJARA 15 RECEIVED FROM CASH CREDITORS SHOULD BE PROVIDED AN D PROPER OPPORTUNITY OF BEING HEARD SHOULD ALSO TO BE GIVEN TO THE ASSESSEE TO PRODUCE THE CASH CREDITORS IF NEEDED BY THE LD. A.O SO AS TO PROVE THE GENUINENESS AND CREDITWORTHINESS OF THE CASH CREDITORS. LD. A.O IS ALSO DIRECTED TO EXAMINE THE GENUINENESS OF LOAN GIVEN TO M/S ROSHANLAL DESHRAJ & PARTY AND IF SATISFIED WITH THE TRANSACTIONS THEN NECESSARY RELIEF, IF ANY, AVAILAB LE TO ASSESSEE MAY BE GIVEN AS PER THE PROVISIONS OF INCOME TAX ACT. NEEDLESS TO MENTION THAT PROPER OPPORTUNITY OF BEING HEARD SHOU LD BE PROVIDED TO THE ASSESSEE. 15. IN THE RESULT BOTH THE APPEALS FOR ASSESSMENT YEARS VIDE 2007-08 & 2008-09 ITA NO.775 & 776/IND/2016 ARE HER EBY ALLOWED FOR STATISTICAL PURPOSE AS PER THE TERMS IN DICATED ABOVE. THE ORDER PRONOUNCED IN THE OPEN COURT ON 22.05.20 20. SD/- SD/- ( KUL BHARAT) (MANISH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER / DATED : 22 ND MAY, 2020 /DEV COPY TO: THE APPELLANT/RESPONDENT/CIT CONCERNED/CIT (A) CONCERNED/ DR, ITAT, INDORE/GUARD FILE. BY ORDER, ITA NO.775 & 776/IND/2016 MADANLAL GABBAJI BANJARA 16 ASSTT.REGISTRAR, I.T.A.T., INDORE