Asstt.Commissioner of Income-tax (2), RAIPUR (CG) V. M/s Sunmarg Ispat Pvt.Ltd, RAIPUR (CG)

ITA 83/BIL/2012

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 2441 (ITAT-RAIPUR)
• Duration Of Justice: 3 year(s) 7 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-02-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2007-2008
• Appeal Filed On: 21-06-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: O P PHATAK
• Assessee Lawyers: R B DOSHI
• Keywords: Unexplained cash credit; Additional evidence
• Section: 68

Judgement Text

, RA IPUR IN THE INCOME TA X A PPELLA TE TRIBUNA L, RA IPUR BEFORE S/SHRI MUKUL SHRAW AT (JM) SHAMIM YAHYA (AM) , , ./ I.T.A. NO.83/BLPR/2012 ( / ASSESSMENT YEAR :2007 - 08 ) ACIT, 1(2), CENTRAL REVENUE BUILDING, CIVIL LINES, RAIPUR / VS. SUNMARK ISPAT PVT LTD., RING ROAD NJHO.2, GONDWARA, RAIPUR ./ ./PAN/GIR NO. : AAGCS 9813 C ( /A PPELL ANT ) .. ( / RESPONDENT ) / APPELLANT BY : SHRI O.P.PHATAK / RESPONDENT BY : SHRI R.B.DOSHI / DATE OF HEARING : 1 0 - 02 - 2016 / DATE OF PRO NOUNCEMENT : 12 - 02 - 2016 / O R D E R PER MUKUL SHRAWAT, JM THIS IS AN APPEAL FILED BY THE ASSESSEE EMANATING FROM AN ORDER OF THE LD CIT(A), RAIPUR DATED. 15.3.2012 FOR THE ASSESSMENT YEAR 2007 - 08. 2. GROUNDS RAISED BY THE REVENUE ARE AS UND ER: 1. WH ETHER IN LAW AND ON FACTS & CIRCUMSTANCES OF THE CASE, THE CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.70,49,582/ - MADE BY T HE AO U /S.68 OF THE INCOME TAX ACT, 1961 ON ACCOUNT OF UNEXPLAINED CASH CREDIT IN GUISE OF UNSECURED LOAN. 2. W HETHER IN LAW AND ON FACTS & CIRCUMSTANCES OF THE CASE, THE CIT(A) WAS JUSTIFIED IN ADMITTING ADDITIONAL EVIDENCES SUBMITTED BY THE ASSESSEE IN VIOLATION OF RULE 46A OF THE I.T.RULES. 2 I.T.A. NO.83 /BLPR/2012 ASSESSMENT YEAR :2007 - 08 3. FROM THE SIDE OF THE REVENUE, SHRI O.P.PHATAK, LD D.R. APPEARED AND AT THE OUTSET, ARGUED GROUND N O.2, WHICH IS IN RESPECT OF VIOLATION OF RULE 46A OF I.T.RULES. W E FIND NO SUBSTANCE IN THIS GRIEVANCE OF THE REVENUE BECAUSE THE ADMITTED FACT AS EMERGED FROM THE IMPUGNED ORDER OF LD CIT(A) WAS THAT A REMAND REPORT WAS CALLED FR OM THE AO, WHICH MEANS THAT THE AO HAD BEEN GIVEN DUE OPPORTUNITY OF HEARING. AS A RESULT, GROUND NO.2 OF THE REVENUE IS REJECTED. 4. APROPOS GROUND NO.1, FACTS IN BRIEF AS EMERGED FROM THE CORRESPONDING ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER U/ S.143(3) OF THE I.T.ACT, 1961 DATED 31/12/09 WERE THAT THE ASSESSEE COMPANY IS IN THE BUSINESS OF MANUFACTURING OF M.S.INGOT, ETC. T HE ASSESSEE HAD SHOWN UNSECURED LOANS AMOUNTING TO RS.,1,46,71,759/ - . L AST YEAR, THE FIGURE WAS RS.76,22,177/ - . HENCE, AC CORDING TO THE AO, THE ASSESSEE HAD TAKEN FRESH UNSECURED LOANS DURING THE YEAR UNDER CONSIDERATION. A S PER RECORD, THE ASSESSEE HAD TAKEN UNSECURED LOANS FROM T HE FOLLOWING PERSONS AS RECORDED BY THE ASSESSING OFFICER: - 1) FOR EXAMPLE, PRAVEEN KUMAR P ATEL (HUF) HAS GIVEN UNSECURED LOAN OF RS.10 LAKHS. HOWEVER, THE TOTAL INCOME FOR A,Y. 2007 - 08 IS ONLY RS.65920/ - AND R.S.129410/ - FOR A.Y. 2006 - 07. T HEREFORE, THE CREDITWORTHINESS IS NOT PROVED. 2) SIMILARLY, SRI PRAVEEN KUMAR CHAWDA HAS GIVEN AN UNSE CURED LOAN OF RS.2.5 LAKHS. HOWEVER, THE TOTAL INCOME FOR A.Y. 2007 - 08 IS ONLY RS.189810/ - AND RS.159530/ - FOR A.Y. 2006 - 07. H E IS A MALE ME MBER IN THE WORKING AGE GROUP WHO IS EXPECTED TO RUN A FAMILY AND, THEREFORE, IT IS NOT POSSIBLE THAT HE COULD ADV ANCE SUCH HUGE AMOUNT OUT OF HIS INCOME TO THE ASSESSEE. 3) SIMILARLY, SHRI DHIRAJLAL VARU HAS GIVEN AN UNSECURED LOAN OF RS.3 LAKHS. H OWEVER, THE TOTAL INCOME FOR A.Y. 2007 - 08 IS ONLY RS.91010/ - . HE IS A MALE ME MBER IN THE WORKING AGE GROUP WHO IS EXPE CTED TO RUN A FAMILY AND, THEREFORE, IT IS NOT POSSIBLE THAT HE 3 I.T.A. NO.83 /BLPR/2012 ASSESSMENT YEAR :2007 - 08 COULD ADVANCE SUCH HUGE AMOUNT OUT OF THE INCOME TO THE ASSESSEE. THEREFORE, THE CREDITWORTHINESS IS NOT PROVED. 4) SIMILARLY, SMT BHAWNA BEN PATEL HAS GIVEN AN UNSECURED LOAN OF RS.12.75 LAK HS. H OWEVER, THE TOTAL INCOME FOR A.Y. 2007 - 08 IS ONLY RS.75900/ - AND RS.124370/ - FOR A.Y. 2006 - 07. T HEREFORE, THE CREDITWORTHINESS IS NOT PROVED. 5) THE FACTS ARE SIMILAR FOR (A) SHRI BABULAL PATEL WHO HAS GIVEN RS.420000 (B) RATILAL MAGANLAL PAEL (HUF) LOAN OF RS.225000 (C) SHRI M. RAMJI - LOAN OF RS.200000 (D) SHRI MEDIDE AJAY - LOAN OF RS.500000 (E) SMT. USHA VARA - LOAN OF RS.300000/ - . THE ASSESSEE HAS FURNISHED CONFIRMATIONS AND OTHER DOCUMENTS, BUT ACCORDING TO THE AO, THE ASSESSEE FAILED TO ESTABLISH THE CREDITWORTHINESS. I N A CRYPTIC MANNER, THE PROVISIONS OF SECTION 68 WERE INVOKED AND A N AMOUNT OF RS. 70,49,582/ - WAS TAXED IN THE HANDS OF THE ASSESSEE. T HE MATTER WAS CARRIED BEFORE THE FIRST APPELLATE AUTHORITY. 5. BEFORE THE LD CIT(A), THE ASSE SSEE HAS FURNISHED THE FOLLOWING CHART: NAME OF THE PARTY FRESH LOAN (RS.) INTEREST CREDITED (RS.) OUTSTANDING BALANCE (RS.) CHANDULAL PATEL 10,75,000 4,41,753 14,71,694 VIKASH IKUMAR SARAF 7,00,000 34,125 6,96,519 VIJAY CHAND JAIN 3,00,000 14,62 5 2,98,508 CHAND BAI SARAF 7,00,000 17,267 6,98,239 DILIP PATEL 31,00,000 2,64,758 33,37,753 ASHOK HAND JAIN 1,70,000 - 1,67,450 CHANDRA BAI BHANSALI 3,80,000 5,700 3,79,419 TOTAL 64,25,000 ,78,228 70,49,582 6. ON THE BASIS OF CONFIRMA TION, PAN. AND THE DETAILS OF TDS PROVIDED, LD CIT(A) HAS FINALLY HELD AS UNDER: 4 I.T.A. NO.83 /BLPR/2012 ASSESSMENT YEAR :2007 - 08 I HAVE CAREFULLY GONE THROUGH THE ASSESSMENT ORDER A ND SUBMISSIONS OF THE APPELLANT. I N VIEW OF THE FACTS OF THE CASE, THE REMAND REPORT WAS CALLED FROM THE AO. T HE AO HAS SUBMITTED THE REMAND REPORT DATED 9.8.2011. I N THE SAID REMAND REPORT, THE AO HAS STATED THE RESULT OF INFORMATION CALLED U/S.133(6). D URING THE COURSE OF APPELLATE PROCEEDINGS BEFORE ME, THE APPELLANT SUBMITTED THE EVIDENCES TO DISCHARGE THE ONUS THAT LAY ON IT U/S.68 I.E. TO ESTABLISH THE IDENTITY AND CREDITWORTHINESS OF THE CREDITORS AND GENUINENESS OF THE TRANSACTION OF CASH CREDIT.. T HE COMMENTS OF THE AO IN THE REMAND REPORT HAVE BEEN CONSIDERED. T HE AO HAS NOT GIVEN ANY ADVERSE REMARKS IN THE EV IDENCES COLLECTED. T HE APPELLANT HAS FURNISHED THE NAME, ADDRESS AND PAN OF THE LENDERS AND CREDITORS, COPIES OF THE BANK STATEMENTS AND ITRS OF THE LENDERS AND CREDITORS AND ALSO THE CONFIRMATION OF ACCOUNTS. T HE APPELLANT HAS ELABORATELY EXPLAINED THE SOURCE OF SOURCE I.E. THE CREDITWORTHINESS OF THE LENDERS. I A M CONVINCED THAT THE APPELLANT HAS DISCHARGED THE ONUS THAT LAY ON IT U /S.68. T HEREFORE, THE ADDITIONS MADE BY THE AO ARE NOT SUSTAINABLE. LOOKING TO THE FACTS AND CIRCUMSTANCES OF THE CASE, THE ADDITIONS MADE BY THE AO ARE DELETED. 7. ON THIS SHORT ISSUE, WE HAVE HEARD BOTH THE SIDES. T HE FACTS OF THE CASE HAVE REVEALED THAT OUT OF THE ABOVE REFERRED PARTIES TWO WERE DIRECTORS NAMELY; CHANDULAL PATEL AND DILLIP PATEL. H ENCE, THE ARGUMENT S OF THE ASSESSEE ARE THAT THE LOAN ADVANCED BY THOSE DIRECTORS WERER FULLY VERIFIABLE AND NO ACTION WAS TAKEN AGAINST THEM IF THE EXPLANATION OF THE ASSESSEE WAS NOT SATISFACTORY. FURTHER, IN RESPECT OF REST OF THE PARTIES, WE HAVE BEEN INFORMED THAT THE Y WERE MONEY L ENDERS AND DULY CONFIRMED THE ADVANCE OF LOAN TO THE ASSESSEE. I T IS VEHEMENTLY PLEADED THAT ALL THE PARTIES HAVE FILED THEIR RESPECTIVE CONFIRMATION LETTERS. T HE ASSESSEE HAS FURNISHED THE DETAILS OF THE INCOME TAX RETURNS ALONGWITH PAN A S WELL AS TDS DEDUCTED BY THE ASSESSEE ON PAYMENT OF INTEREST. I T HAS ALSO BEEN INFORMED THAT THE IMPUGNED LOAN AMOUNT WAS RECEIVED BY THE ASSESSEE THROUGH ACCOUNT PAYEE CHEQUES. THE ASSESSEE HAS THEREFORE COMPLIED WITH T HE CONDITIONS PRESCRIBED IN THE P ROVISIONS OF SEC. 68 OF ITACT. 5 I.T.A. NO.83 /BLPR/2012 ASSESSMENT YEAR :2007 - 08 THEREFORE, CONSIDERING THE TOTALITY OF FACTS AND CIRCUMSTANCES OF THE CASE, ESPECIALLY WHEN NO ADVERSE REMARKS I S ON RECORD, WE FI ND NO REASON TO REVERSE THE FINDINGS OF THE LD CIT(A). HENCE, WE REJECT THE GROUND OF APPEAL TAKEN BY THE REVENUE. 8. IN THE RESULT, APPEAL FILED BY THE REVENUE IS DISMISSED., ORDER PRONOUNCED IN THE OPEN COURT ON 12 /02/2016 . SD/ - SD/ - ( , ) ( , ) SHAMIM YAHYA, ACCOUNTANT MEMBER MUKUL SHRAW AT,JUDICIAL MEMBER RAIPUR, DATED 12 / 02/2016 . . ./ PARIDA , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT : ACIT, 1(2), CEN TRAL REVENUE BUILDING, CIVIL LINES, RAIPUR 2. / THE RESPONDENT: SUNMARK ISPAT PVT LTD., RING ROAD NJHO.2, GONDWARA, RAIPUR 3. ( ) / THE CIT(A) - RAIPUR 4. / CIT , RAIPUR 5. , , / DR, ITAT, RAIPUR 6. / GUARD FILE. / BY ORDER, //TRUE COPY// SR. PS, ITAT, CAMP: RAIPUR