V M DAWARA, Jaipur V. DCIT, Jaipur

ITA 827/JPR/2009

• Counselvise Citation: 82723114 RSA 2009
• Duration Of Justice: 4 year(s) 4 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-03-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 1995-1996
• Appeal Filed On: 30-10-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D C SHARMA
• Keywords: Opportunity of being heard; Block assessment
• Section: 143(3); 131; 68

Judgement Text

IN THE INCOME TAX APPELALTE TRIBUNAL : JAIPUR BENCH : JAIPUR BEFORE SHRI HARI OM MARATHA, JUDICIAL MEMBER AND SHRI N.K. SAINI, ACCOUNTANT MEMBER. ITA NOS.826 & 827/JP/2009 (A.YS. 1994-95 & 1995-96) V.M. DAWARA, VS. DCIT, CIRCLE-5, 342, RAJMAL KA TALAB, JAIPUR. CHANDI KI TAKSAL, JAIPUR. PAN NO. AFFPD 3731 B (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI P.C. PARWAL. DEPARTMENT BY : SHRI D.C. SHARMA - D.R. DATE OF HEARING : 13/01/2014. DATE OF PRONOUNCEMENT : 05/03/2014. O R D E R PER N.K. SAINI, A.M THESE TWO APPEALS BY THE ASSESSEE HAVE BEEN FILED AGAINST THE SEPARATE ORDERS EACH DATED 25/08/2009 OF LD. CIT (A )-II, JAIPUR FOR THE A.Y. 1994-95 & 1995-96. SINCE THE APPEALS RELATE TO THE SAME ASSESSEE, HAVING COMMON ISSUE INVOLVED AND WERE HEARD TOGETHE R, SO, THESE ARE BEING DISPOSED OFF BY THIS COMMON ORDER FOR THE SAK E OF CONVENIENCE. 2 2 FIRST WE WILL DEAL WITH APPEAL IN I.T.A.NO. 826/JP /2009. THE FOLLOWING GROUNDS HAVE BEEN RAISED IN THIS APPEAL:- 1. THE LD. CIT(A) HAS ERRED IN FACTS AND IN LAW IN CONFIRMING AN ADDITION OF RS. 1,30,35,000/- U/S 68 BY TREATING THE LOAN RE CEIVED FROM THE FOLLOWING PERSON AS NON-GENUINE:- A. SMT. ANUPRIYA JOHARI 15,00,000 / - B. M/S. TRIMURTI ENTERPRISES 25,00,000 / - C. SMT. SITA DEVI JOHARI 15,00,000 / - D. SMT.. KANAK PRABHA JOHARI 10,00,000 / - E. SMT. SHASHI JOHARI 10,00,000 / - F. M/S. JOHARI JEWELLERS (P) LTD. 25,00,000 / - G. SHRI ASHOK AKAR 1,40,000 / - H. SHRI ASHOK KUMAR 35,000 / - I. SHRI GIRISH PALIWAL 1,80,000 / - J. SHRI K.D. PAATEL 1,60,000 / - K. SMT. KAMLA PATEL 1,30,000 / - L. SHRI NAND LAL VERMA 1,00,000 / - M. SMT. REKHA SINGH 85,000 / - N. SHRI SUDHIR PATEL 1,35,000 / - O. SMT.. VIMLA SHARMA 50,000 / - P. M/S SHRI KRISHNA BUILDERS 70,000 / - Q. M/S WESTERN TEXTILES 3,40,000 / - R. M/S JEWER JEWELLERS 2,00,000 / - S. SHRI RAMJI LAL BITTAN LAL PANWALA 10,00,000 / - T. SHRI DAYAL DAS 1,50,000 / - U. SMT. KALAWATI 1,50,000 / - V. SHRI LAXMAN DAS 60,000 / - W. SHRI SURESH KUMAR SHARMA 50,000 / - TOTAL 1,30,35,000 / - 2. THE LD. CIT(A) HAS IN FACTS AND IN LAW IN NOT FO LLOWING THE DIRECTIONS GIVEN BY THE HON'BLE ITAT IN CORRECT PROSPECTIVE IN CONFIRMING THE ABOVE ADDITION. 3. THE ASSESSEE CRAVES TO ALTER, AMEND, AND MODIFY ANY OF THE GROUNDS OF APPEAL. 3 4. NECESSARY COST BE ALLOWED TO THE ASSESSEE. 3. FROM THE ABOVE GROUNDS IT IS GATHERED THAT THE ONL Y ISSUE INVOLVED IN THIS APPEAL RELATES TO THE CONFIRMATION OF ADDIT ION OF RS. 1,30,35,000/- MADE BY THE ASSESSING OFFICER UNDER SECTION 68 OF T HE I.T. ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT IN SHORT). 4. FACTS OF THE CASE IN BRIEF ARE THAT ASSESSMENT IN THIS CASE WAS FRAMED UNDER SECTION 143(3) R.W.S. 148 OF THE ACT O N 28/03/2002. IN THE SAID ASSESSMENT ORDER, AN ADDITION OF RS. 1,41,65,0 00/- WAS MADE ON ACCOUNT OF UNEXPLAINED UNSECURED LOANS. THE ASSESS EE PREFERRED AN APPEAL TO THE LD. CIT(A), WHO ALLOWED A RELIEF OF R S. 1,19,15,000/- VIDE ORDER DATED 03/09/2004 AND SUSTAINED ADDITION OF RS . 22,50,000/-. AGAINST THE SAID ORDER OF LD. CIT(A), THE ASSESSEE AS WELL AS THE DEPARTMENT FILED APPEALS BEFORE THE ITAT, JAIPUR BE NCH WHEREIN VIDE ORDER DATED 28/02/2007, THE ISSUE WAS SET ASIDE TO THE ASSESSING OFFICER WITH THE FOLLOWING DIRECTIONS:- AS WE HAVE ALREADY HELD HEREIN ABOVE THAT MERE CO NFIRMATION AND PAYMENT THROUGH ACCOUNT PAYEE CHEQUES ARE NOT SUFFI CIENT TO ESTABLISH THE GENUINENESS OF THE TRANSACTION, WE TH US SET ASIDE THE FIRST APPELLATE ORDER IN THIS REGARD ALSO WHILE REM ANDING THE MATTER TO THE FILE OF THE AO TO EXAMINE THE CORRECTNESS OF CLAIM OF THE ASSESSEE IN THIS REGARD AFTER AFFORDING ADEQUATE OP PORTUNITY OF BEING HEARD TO THE ASSESSEE. THE LD. CIT(A) HAS DE LETED FURTHER AN ADDITION OF RS. 10,15,000/- ON ACCOUNT OF UNEXPLAI NED CASH CREDITS 4 AGAINST SHRI ASHOK AKAR, ASHOK KUMAR, GIRISH PALIWA , K.D. PATEL, SMT. KAMLA PATEL, NAND LAL VERMA, SMT. REKHA SINGH, SUDHIR PATEL AND SMT. VIMLA SHARMA ON THE BASIS THAT THE ASSESSE E HAD FILED THEIR AFFIDAVITS ALONGWITH THE RETURN BUT THE AO HAD NOT MADE ANY FURTHER ENQUIRY IN AS MUCH AS TO DISPROVE THE GENUINENESS O F THE CONTENTS OF THESE AFFIDAVITS OF THE CASH CREDITORS. WE DO NOT AGREE WITH THE FINDING OF THE LD. CIT(A) THAT MERE FILING OF AFFID AVITS OF THE CASH CREDITORS ARE SUFFICIENT TO ESTABLISH THE CLAIM OF CASH CREDITS. WE HOWEVER, AT THE SAME TIME AGREE THAT IT IS THE DUTY OF THE AO TO EXAMINE THE VERACITY OF THE AVERMENTS MADE IN THE A FFIDAVITS. WE THUS IN THE INTEREST OF JUSTICE REMAND THE MATTER T O THE FILE OF THE AO TO EXAMINE THE CORRECTNESS OF AVERMENTS MADE IN THE AFFIDAVITS OF THE ABOVE NAMED PERSONS FILED BY THE ASSESSEE RELAT ING TO THEIR RESPECTIVE DEPOSITS WHICH IN TOTAL IS RS. 10,15,000 /-. THE FIRST APPELLATE ORDER IN THIS REGARD IS SET ASIDE. THE A CTION OF THE LD. CIT(A) IN DELETING THE ADDITION OF RS. 1,19,15,000/ - IS THUS SET ASIDE. OUT OF THE ADDITION OF RS. 22,50,000/-, THE ISSUE T O THE EXTENT OF RS. 19,50,000/- WAS ALSO SET ASIDE WITH THE FOLLOWI NG DIRECTIONS:- IN THE INTEREST OF JUSTICE WE THUS REMAND THE MAT TER TO THE FILE OF AO TO EXAMINE THE CORRECTNESS OF THE CLAIM OF THE A SSESSEE IN THIS REGARD AFTER AFFORDING ADEQUATE OPPORTUNITY OF BEIN G HEARD TO THE ASSESSEE AND DECIDE THE MATTER ACCORDINGLY AS PER L AW. 5. IN ACCORDANCE WITH THE ABOVE DIRECTIONS, THE ASSES SING OFFICER ASKED THE ASSESSEE TO PROVE THE IDENTITY, CREDITWORTHINES S AND GENUINENESS OF THE TRANSACTIONS IN RESPECT OF THE CREDITORS. IN R ESPONSE TO THAT, ASSESSEE FILED THE REPLY STATING THEREIN THAT WHATEVER EVIDE NCE WERE AVAILABLE WITH THE ASSESSEE, THOSE WERE ALREADY FILED AND IF FURTHER ENQUIRY WAS REQUIRED, THE CREDITORS MAY BE SUMMONED UNDER SECTI ON 131 OF THE ACT. 5 THE ASSESSEE ALSO ADMITTED THAT HE DID NOT HAVE ANY NEW EVIDENCE TO PROVE THE GENUINENESS OF THE CREDITS EXCEPT THE EVI DENCE ALREADY FURNISHED. IN VIEW OF THOSE FACTS, THE ASSESSING O FFICER ISSUED SUMMONS TO THOSE PARTIES. HOWEVER, SUMMONS IN RESPECT OF 1 4 PARTIES WERE RECEIVED BACK WITH POSTAL REMARKS AS UNDER:- S.NO. NAME OF THE CREDITOR POSTAL REMARKS 1. ASHOK AKAR NO SUCH PERSON RESIDES IN THIS HOUSE 2 GIRISH PALIWAL REFUSED 3 K.D. PATEL HOUSE CLOSED. NO ONE RESIDES 4 KAMLA PATEL HOUSE CLOSED. NO ONE RESIDES 5. VIMLA SHARMA LEFT 6. WESTERN TEXTILES LEFT WITHOUT ADDRESS 7. JEWER JEWELLERS INCOMPLETE ADDRESS 8. RAMJI LAL BITTAN LAL PANWALA REFUSED 9. DAYAL DAS NO SUCH PERSON RESIDES AT THE GIVEN ADDRESS. 10 KALAWATI NO SUCH PERSON RESIDES AT THE GIVEN ADDRESS. 11 LAXMAN DAS NO SUCH PERSON RESIDES AT THE GIVEN ADDRESS. 12 SURESH KUMAR SHARMA INCOMPLETE ADDRESS 13 SUDHIR PATEL HOUSE CLOSED. NO ONE RESIDES 14 REKHA SINGH REFUSED. IN NINE OTHER CASES TO WHOM SUMMONS WERE ISSUED, T HEY REFUSED TO COMPLY. HOWEVER, SMT. KANTARANI DAWRA WHO IS THE W IFE OF THE ASSESSEE ATTENDED BEFORE THE ASSESSING OFFICER AND CONFIRMED THE CREDIT OF RS. 9,00,000/-, THE SAME WAS ACCEPTED. HOWEVER, TH E REMAINING CREDIT 6 OF RS. 1,30,35,000/- IN THE NAME OF REMAINING 23 PE RSONS WAS CONSIDERED AS UNPROVED AND THE ADDITION UNDER SECTION 68 OF TH E ACT WAS MADE. 6 . BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTER TO THE LD. CIT(A) AND SUBMITTED THAT THE ASSESSING OFFICER EXCEPT ISS UING SUMMONS UNDER SECTION 131 OF THE ACT, HAD NOT PURSUED THE MATTER FURTHER. IT WAS FURTHER STATED THAT IN THE SET ASIDE ASSESSMENT PRO CEEDINGS, THE ASSESSEE FILED THE COMPLETE POSTAL ADDRESSES OF THE CREDITOR S/CONFIRMATIONS/THEIR AFFIDAVITS WITH THE ASSESSING OFFICER. IT WAS FURT HER STATED THAT THE CREDITORS PERTAINING TO JOHARI GROUP OF RS. 1 CRORE WERE INVOLVED IN A DISPUTE WITH THE ASSESSEE, THEY HAD FILED A FIR AGA INST THE ASSESSEE AND HIS FAMILY MEMBERS WHICH ITSELF PROVED THE FACT THA T GENUINELY THOSE LOANS WERE TAKEN BY THE ASSESSEE. IT WAS FURTHER S TATED THAT THE CREDITORS TO THE EXTENT OF RS. 14.25 LAC WERE ALREADY ASSESSE D IN BLOCK ASSESSMENT. THEREFORE, THE SAID ADDITION WAS NOT REQUIRED TO BE MADE. 7 . THE LEARNED CIT(A), AFTER CONSIDERING THE SUBMISS IONS OF THE ASSESSEE, OBSERVED THAT THE ASSESSING OFFICER WAS D IRECTED TO EXAMINE THE CORRECTNESS OF THE CLAIM BECAUSE THE MERE CONFIRMAT ION AND PAYMENT THROUGH ACCOUNT PAYEE CHEQUE WAS NOT SUFFICIENT TO ESTABLISH THE GENUINENESS OF THE TRANSACTION AND MERE FILING OF F IR WAS NOT SUFFICIENT TO 7 ESTABLISH THE CLAIM OF THE CASH CREDIT. HE FURTHER OBSERVED THAT WHEN THE ASSESSING OFFICER HAD GIVEN AN OPPORTUNITY TO THE A SSESSEE TO PRODUCE THOSE PERSONS OF WHICH AFFIDAVITS WERE GIVEN EARLIE R, THEN IT WAS THE DUTY OF THE ASSESSEE TO PRODUCE THEM, BUT THE ASSESSEE F AILED TO DO SO. HE FURTHER OBSERVED THAT ON THE REQUEST OF THE ASSESSE E WHEN SUMMONS WERE ISSUED THEN EXCEPT FEW PARTIES ON THE GIVEN ADDRESS ES, COULD NOT BE SERVED AND THE LETTERS WERE RECEIVED BACK AND THE R EMAINING PERSONS TO WHOM SUMMONS WERE ISSUED ALSO DID NOT COMPLY. THER EFORE, IT WAS NOT POSSIBLE FOR THE ASSESSING OFFICER TO EXAMINE THE V ERACITY OF THE AFFIDAVITS AS GIVEN IN EARLIER ASSESSMENT PROCEEDINGS AND THIS DEFAULT WAS ATTRIBUTABLE ON THE PART OF THE ASSESSEE ONLY. ACC ORDINGLY, THE LD. CIT(A) CONFIRMED THE ADDITION OF RS. 1,30,35,000/-. NOW T HE ASSESSEE IS IN APPEAL. 8 . LEARNED COUNSEL FOR THE ASSESSEE REITERATED THE S UBMISSIONS MADE BEFORE THE AUTHORITIES BELOW AND FURTHER SUBMITTED THAT IN THE SET ASIDE ASSESSMENT PROCEEDINGS, VIDE LETTER DATED 06/09/200 7 ASSESSEE FILED CONFIRMATIONS, AFFIDAVITS, EVIDENCE IN REGARD TO RE CEIPT & PAYMENT OF LOAN AND ALL OTHER EVIDENCES AS AVAILABLE WITH THE ASSES SEE IN RESPECT OF THE INDIVIDUAL CREDITORS BEFORE THE ASSESSING OFFICER W HO ISSUED SUMMONS 8 UNDER SECTION 131(1) OF THE ACT TO THOSE CREDITORS. SUMMONS WERE SERVED ON 10 PERSONS AND 03 PERSONS WERE REFUSED TO ACCEPT IT AND IN REMAINING CASES, EITHER THE HOUSE WAS FOUND CLOSED OR THE PER SON LEFT WITHOUT ADDRESS. IT WAS STATED THAT THE ASSESSEE FILED PRE SENT ADDRESSES, BUT THE SUMMONS HAD NOT BEEN ISSUED ON THE NEW ADDRESSES. THEREFORE, THE ASSESSING OFFICER WAS NOT JUSTIFIED IN MAKING THE A DDITION ON THE GROUND THAT FURTHER EVIDENCE TO PROVE THE GENUINENESS OF C REDIT WAS NOT FURNISHED. IT WAS FURTHER SUBMITTED THAT A DETAILE D SUBMISSION, COPY OF WHICH IS PLACED AT PAGES 1 TO 33 OF THE ASSESSEES PAPER BOOK, WAS FURNISHED TO THE LD. CIT(A), WHO WITHOUT APPRECIATI NG THE FACTS HAD CONFIRMED THE VIEW TAKEN BY THE ASSESSING OFFICER. THEREFORE, THE ADDITION SUSTAINED BY THE LD. CIT(A) WAS NOT JUSTIF IED. 9 . IN HIS RIVAL SUBMISSIONS, LEARNED D.R. SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 10 . WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PA RTIES AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON RE CORD. IN THE PRESENT CASE, IT APPEARS THAT THE SUBMISSIONS OF THE ASSESS EE ALONG WITH VARIOUS EVIDENCES FURNISHED TO THE LD. CIT(A) WAS NOT APPRE CIATED IN RIGHT 9 PERSPECTIVE. THE LD. CIT(A) EVEN DID NOT CONSIDER THIS VITAL FACT THAT AN ADDITION TO THE EXTENT OF RS. 14.25 LAC WAS ALREADY MADE IN THE BLOCK ASSESSMENT AND THAT THERE WAS A DISPUTE BETWEEN THE ASSESSEE AND JOHARI GROUP TO WHICH CREDITORS OF ABOUT RS. 1 CRORE BELON GED AND THEY HAD FILED A FIR, BUT THE LD. CIT(A) NEITHER CONSIDERED THE AM OUNT MENTIONED IN THE FIR NOR AMOUNT ASSESSED IN THE BLOCK ASSESSMENT. H E SIMPLY CONFIRMED THE ADDITION MADE BY THE ASSESSING OFFICER ON THIS BASIS THAT THE LETTERS ISSUED TO CERTAIN PERSONS RETURNED BACK AND FEW OF THE CREDITORS DID NOT COMPLY THE SUMMONS. HOWEVER, HE IGNORED THIS CONTE NTION OF THE ASSESSEE THAT NEW ADDRESSES OF FEW CREDITORS WERE G IVEN TO WHOM NO LETTER WAS WRITTEN BY THE ASSESSING OFFICER. WE, T HEREFORE, CONSIDERING THE TOTALITY OF THE FACTS, DEEM IT APPROPRIATE TO S ET ASIDE THIS ISSUE BACK TO THE FILE OF LD. CIT(A) TO BE ADJUDICATED AFRESH IN ACCORDANCE WITH LAW AFTER CONSIDERING THE VARIOUS DETAILS WHICH WERE CL AIMED TO HAVE BEEN FILED BEFORE HIM BY THE ASSESSEE. ACCORDINGLY, THE ISSUE IS REMANDED BACK TO THE FILE OF LD. CIT(A) TO BE ADJUDICATED AF RESH IN ACCORDANCE WITH LAW AFTER PROVIDING DUE AND REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 11 . IN I.T.A.NO. 287/JP/2009, THE FOLLOWING GROUNDS H AVE BEEN RAISED:- 10 1. THE LD. CIT(A) HAS ERRED IN FACTS AND IN LAW IN CONFIRMING AN ADDITION OF RS. 38,27,913/- U/S 68 BY TREATING THE LOAN RECE IVED FROM THE FOLLOWING PERSON AS NON-GENUINE:- SR. NO. PARTICULARS AMOUNT 1. M/S. SHEETAL SUITINGS PVT. LTD. 8,00,000/ - 2 SMT. SURAJ DEVI MODI 1,00,000/ - 3 BANSAL EXPORTS 10,00,000/ - 4 SHRI GANPAT LAL SARDA 75,000/ - 5 M/S ITALIN JEWELLERY MFG. CO. 10,08,000/ - 6 M/S MEP ENGINEERING 5,00,000/ - 7 M/S RK FINE EXPORT 2,74,246/ - 8 SHRI SHANKAR LAL MAROO 70,000/ - TOTAL 38,27,913/- 2. THE LD. CIT(A) HAS ERRED IN FACTS AND IN LAW IN SUSTAINING THE DISALLOWANCE OF RS. 15,53,037/- (15,51,706 + 1381) OUT OF INTEREST EXPENSES. 3. THE LD. CIT(A) HAS ERRED IN FACTS AND IN LAW IN NOT FOLLOWING THE DIRECTIONS GIVEN BY THE HON'BLE ITAT IN CORRECT PRO SPECTIVE IN CONFIRMING THE ABOVE ADDITION. 4. THE ASSESSEE CRAVES TO ALTER, AMEND, AND MODIFY ANY OF THE GROUNDS OF APPEAL. 5. NECESSARY COST BE ALLOWED TO THE ASSESSEE. 12. THIS CASE WAS ALSO SET ASIDE BY THE ITAT, JAIPUR BENCH, JAIPUR VIDE ORDER DATED 31/05/2007 IN I.T.A.NO. 772/JP/2004 AS WAS DONE FOR THE PRECEDING YEAR I.E. A.Y. 1994-95 VIDE ORDER DATED 2 8/02/2007. THE ASSESSING OFFICER HAD REPEATED THE ADDITION AS WAS DONE IN THE ORIGINAL ASSESSMENT AND THE LD. CIT(A) ALSO CONFIRMED THE AD DITION IN THE SAME MANNER AS WAS DONE IN THE EARLIER YEAR. IN THE FOR MER PART OF THIS ORDER, 11 WE HAVE ADJUDICATED A SIMILAR ISSUE WHICH WAS INVOL VED IN THE PRECEDING YEAR AND WE HAVE ALREADY SET ASIDE THE SAME TO THE FILE OF THE LD. CIT(A). THEREFORE, THE ISSUES FOR THE YEAR UNDER CONSIDERAT ION ARE ALSO SET ASIDE TO THE FILE OF LD. CIT(A) TO BE ADJUDICATED AFRESH IN ACCORDANCE WITH LAW AFTER PROVIDING DUE AND REASONABLE OPPORTUNITY OF B EING HEARD TO THE ASSESSEE. 13. IN THE RESULT, BOTH THE APPEALS ARE ALLOWED FOR ST ATISTICAL PURPOSES. (ORDER PRONOUNCED IN THE COURT ON 5 TH MARCH, 2014). SD/- SD/- (HARI OM MARATHA) (N.K.SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 5 TH MARCH, 2014. VR/- COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE LD.CIT 4. THE CIT(A) 5. THE D.R ASSISTANT REGISTRAR, ITAT, JAIPUR.