ITO, JHALAWAR V. SHRI ARUN KUMAR HUF, JHALAWAR

ITA 830/JPR/2012

• Counselvise Citation: 83023114 RSA 2012
• Duration Of Justice: 2 year(s) 1 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-12-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2006-2007
• Appeal Filed On: 29-10-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Source of fund; Additional evidence; Non compliance
• Section: 143(3); 68

Judgement Text

IN THE INCOME TAX APPELALTE TRIBUNAL: JAIPUR BENCH JAIPUR BEFORE SHRI SHAILEND RA K UMAR YADAV, JUDICIAL MEMBER, AND SHRI B. C. MEENA , ACCOUNTANT MEMBER . ITA.NO. 830 /JP /20 1 2 (ASSESSMENT YEAR: 200 6 - 0 7 ) THE INCOME TAX OFFICER, JHALAWAR APPELLANT VS. SHRI ARUN KUMAR, HUF, K/O M/S ARUN KUMAR & SONS, PROP. M/S HAMARA PUMP, MANOHARTHANA, DIST. JHALAWAR, RAJASTHAN RESPONDENT PAN: A A B F A9601J / BY APPELLANT : SHRI KAILASH MANGAL , D.R. / BY RESPONDENT : NONE / DATE OF HEARING : 0 2 .1 2 .2014 / DATE OF PRONOUNCEMENT : 04 .1 2 .2014 ORDER PER SHA ILENDRA KUMAR YADAV, J . M: THIS APPEAL HAS BEEN FILED BY THE REVENU E AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) , KOTA , DATED 31 . 0 8 .201 2 FOR A.Y. 200 6 - 0 7 ON THE FOLLOWING GROUND: I.T .A. NO. 830 / JP /2 0 1 2 A.Y. 200 6 - 0 7 ( ITO VS. SHRI ARUN KUMAR, HUF ) PAGE 2 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD (CIT( A) HAS ERRED IN : - (I) DELETING THE ADDITION OF RS.18,00,000/ - MADE BY THE AO ON ACCOUNT OF UNEXPLAINED CASH CREDITS; 2. ASSESSEE DERIVES INCOME FROM SALES AND PURCHASES OF PETROLEUM PRODUCTS BY RUNNING PETROL PUMP OF M/S HINDUSTAN PETROLEUM CORPORATION LTD. 2 . 1 ASSESSEE FILED RETURN OF INCOME DECLARING INCOME OF RS.1,77,650/ - ON 18.10.2006. ASSESSMENT WAS COMPLETED U/S. 143(3) ON 26.12.2008 COMPUTING TOTAL TAXABLE INCOME OF ASSESSEE AS UNDER: NET INCOME SHOWN BY THE ASSESSEE RS. 177650/ - (I). D EPARTMENTA L DISALLOWED RS.11390/ - (II). TELEPHONE EXP. DISALLOWED RS. 1327/ - (III). TRAVELLING EXP. DISALLOWED RS. 6225/ - (IV). INAUGURATION EXP. DISALLOWED RS. 2063/ - (V). TEA & DIWALI ETC. EXP. DISALLOWED RS. 5407/ - ( VI). LOW HOUSE HOLD WITHDRAWA L RS.18648/ - (VII). UNEXPLAINED CASH CREDITORS ADDED U/S 68 OF THE IT ACT RS.1800000/ - RS.1845060 / - TOTAL INCOME RS.2022710/ - 2.2 ONLY ISSUE BEFORE US IS W ITH REGARDS TO UNEXPLAINED CASH CREDIT ADDED U/S. 68 OF RS. 18 LACS, WE FIND T HAT CIT(A) HAS GRANTED RELIEF TO THE ASSESSEE. SAME HAS BEEN OPPOSED BEFORE US ON BEHALF OF REVENUE, INTER ALIA, STATING THAT CIT(A) WAS NOT JUSTIFIED IN DELETING ADDITION OF RS.18 LACS MADE BY ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED CASH CREDIT. ON OTHER HAND, I.T .A. NO. 830 / JP /2 0 1 2 A.Y. 200 6 - 0 7 ( ITO VS. SHRI ARUN KUMAR, HUF ) PAGE 3 NONE ON BEHALF OF ASSESSEE. SO, MATTER IS BEING DECIDED EX PARTE ON THE BASIS OF ARGUMENT OF LD. DEPARTMENTAL REPRESENTATIVE AND MATERIAL ON RECORD . 3 . WE FIND THAT ASSESSING OFFICER MADE ADDITION OF RS. 18 LACS U/S. 68 OF THE ACT BY TREATING CASH CREDIT OF FOLLOWING PERSONS AS UNEXPLAINED: - (A) SH. RAJESH KUMAR & SONS (HUF) RS.400000/ - (B) SMT. SHARMILA KUMARI RS.400000/ - (C) SMT. ANITA VERMA RS.1000000 / - TOTAL RS.1800000/ - AS STATED ABOVE, SAME WAS DELETED BY CIT(A). 4 . IN APPELLATE PROCEEDING, ASSESSEE VIDE LETTER DATED 06.02.20 12 SUBMITTED DETAILED SUBMISSIONS IN RELATION TO CASH CREDITS WHICH INCLUDED BANK STATEMENTS OF CASH CREDITORS, WHICH COULD NOT BE FURNISHED BEFORE ASSESSING OFFICER. ASSESSEE STATED THAT BANK STATE MENT COULD NOT BE OBTAINED EARLIER, THEREFORE, SAME WERE FURNISHED BEFORE FIRST APPELLATE AUTHORITY. ALL OTHER DETAILS WERE FURNISHED BEFORE ASSESSING OFFI CER. THESE STATEMENTS WERE TAKE N COGNIZANCE BY CIT(A) AND SAME WERE FORWARDED TO ASSESSING OFFICER FOR FURTHER EXAMINATION AND REPORT THE MATTER. ASSESSING OFFIC ER IN REPORT SUBMITTED AS UNDER: IN THIS REGARD THIS OFFICE WAS ISSUED LETTER TO ASSESSEE ON 20.03.2012 BY REGISTERED POST FOR COMPLIANCE/HEARING ON 30.03.2012. IN THIS LETTER THE ASSESSEE WA S ASKED TO FURNISH DOCUMENTARY EVIDENCE AND ACCOUNTS IN SUPPORT OF YOUR CONTENTION PRODUCE BEFORE THE LD. CIT(A), KOTA AND I.T .A. NO. 830 / JP /2 0 1 2 A.Y. 200 6 - 0 7 ( ITO VS. SHRI ARUN KUMAR, HUF ) PAGE 4 REQUEST TO PRODUCE CASH CREDITORS FOR EXAMINE OF THEIR CREDITWORTHINESS AND SOURCE OF INCOME. THE ASSESSEE FAILED TO PRODUCE ANY SUC H EVIDENCE AND CASH CREDITORS IN COMPLIANCE OF ABOVE LETTER. AGAIN THE ASSESSEE S A/R (SHRI VIMAL SURANA) ASKED TO FURNISH DOCUMENT ACCOUNTS AND DETAILS IN SUPPORT OF ADDITIONAL EVIDENCES. BUT THE A/R IS ALSO FAILED TO FURNISH ANY SUBMISSION. HOWEVER FO R THE SAKE OF JUSTICE, THE ADDITIONAL EVIDENCES FURNISHED BEFORE YOUR HONOUR MAY BE CONSIDERED ON MERITS. IN COMPLIANCE, TO DIRECTIONS OF YOUR HONOUR TO EXAMINE THE VERACITY OF THE ADDITIONAL EVIDENCES PRODUCED BY THE ASSESSEE. THEREFORE, AFTER CONSIDERI NG AND EXAMINING THE DETAILS, DOCUMENTS AND EVIDENCES PLACED ON RECORD THE REPORT IS SUBMITTED AS UNDER: - THE ASSESSEE CLAIMED RECEIPT OF UNSECURED LOANS OF RS.4,00,000/ - , RS.4,00,000/ - AND RS.10,00,000/ - FROM SHRI RAJESH KUMAR & SONS HUF, SMT. SHARMILA K UMARI AND SMT. ANITA VERMA RESPECTIVELY IN THE FINANCIAL YEAR 2005 - 06. HE FURNISHED AFFIDAVITS OF ABOVE PERSONS IN SUPPORT OF HIS CLAIM. THESE PERSONS SOURCE OF LOANS TO HAVE BEEN IN CASH DEPOSITED IN THEIR BANK ACCOUNT AND NO EVIDENCE IN SUPPORT OF SO URCE OF DEPOSIT IN CASH HAS BEEN FURNISHED BY THE ASSESSEE. THEREFORE, AFFIDAVITS APPEAR TO HAVE BEEN PREPARED AS A MEASURE OF AFTER THOUGHT AND AS SUCH ARE NOT ACCEPTABLE AS EVIDENCES. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE SHOWN INAB ILITY TO PRODUCE ABOVE CASH CREDITORS IN PERSON BEFORE THE THEN AO TO VERIFY THE GENUINENESS OF THEIR CREDITWORTHINESS. IT IS EVIDENT FROM THE RETURNS OF THE DEPOSITOR THAT NO SUCH A HUGE BUSINESS ACTIVITIES OR INCOME EARNING ACTIVITIES IS BEING DONE BY C REDITORS. IN ABSENCE OF PERSONS THE SOURCE OF CASH DEPOSITED IN THEIR BANK ACCOUNT AND THEIR CREDITWORTHINESS IS NOT EXPLAINED. I.T .A. NO. 830 / JP /2 0 1 2 A.Y. 200 6 - 0 7 ( ITO VS. SHRI ARUN KUMAR, HUF ) PAGE 5 FOR EVIDENCE OF SOURCE OF FUND OF ABOVE THREE PERSONS THE ASSESSEE FURNISHED COPIES OF BALANCE SHEET, BANK STATEMENT OF THE CA SH CREDITORS SUBMITTED WITH RETURN OF INCOME FOR A.Y. 2004 - 05 TO 2006 - 07 WHICH MAY BE ACCEPTED. TO SHOW THE IMMEDIATE SOURCE OF FUND OF ALL THE ABOVE TRANSACTIONS FOR SOURCE OF FUND OF RS.8,00,000/ - TO SHRI RAJESH KUMAR & SONS (HUF) AND SMT. SHARMILA KUMA RI CLAIMED TO HAVE BEEN MADE IN CASH AND NO DOCUMENTARY EVIDENCE EXCEPT AFFIDAVITS WAS FURNISHED BY THE ASSESSEE. IN SUPPORT OF HIS CONTENTION ABOUT SMT. ANITA VERMA (CREDITOR) THE IMMEDIATE SOURCE OF FUND ARE NOT VERIFY IN ABSENCE OF NON COMPLIANCE TO TH IS OFFICE LETTER DATED 20.03.2012. FROM THE ABOVE DISCUSSION, IT CAN BE VERY WELL INFERRED THAT: - THE ASSESSEE HAS CLAIMED SOURCE OF THE TRANSACTIONS FOR 2 CREDITORS OF LOAN OF RS.8,00,000/ - IN CASH. THE ASSESSEE ONLY FURNISHED EVIDENCE TRANSACTIONS IN F ORM OF AFFIDAVITS, COPY OF IT RETURNS AND BANK ACCOUNT STATEMENT WHICH ALL ARE OF HIS FAMILY MEMBERS AND RELATIVES. IN OTHER GROUNDS THE THEN AO HAD GIVEN PROPER OPPORTUNITY AND MAKE SOME EXPENSES DISALLOWANCES AND PASSED ORDER. NOW THE ASSESSEE DID NOT FURNISH ANY EXPLANATION IN SUPPORT OF HIS ADDITIONAL EVIDENCES. IN VIEW OF ABOVE FACTS OF THE CASE, IT IS SUBMITTED THAT THE ADDITIONAL EVIDENCES FURNISHED BY THE ASSESSEE BEFORE YOU HONOUR, THE SOURCE OF FUNDS AND OTHER ADDITIONS MADE IN ASSESSEE S ASSES SMENT ORDER AS SUCH THE SAME MAY BE CONSIDERED BY YOUR HONOUR ON MERITS. HAVING CONSIDERED THE REMAND REPORT AND ASSESSEE S SUBMISSION, CIT(A) OBSERVED THAT ALL THREE CREDITORS WERE FAMILY I.T .A. NO. 830 / JP /2 0 1 2 A.Y. 200 6 - 0 7 ( ITO VS. SHRI ARUN KUMAR, HUF ) PAGE 6 MEMBERS OF ASSESSEE AND THEIR IDENTITY WAS ESTABLISHED BEYOND DOU BT. ALL OF THEM WERE ASSESSED TO TAX AND FILING RETURN OF INCOME WITH SAME ASSESSING OFFICER. ALL OF THEM HA VE FURNISHED BALANCE SHEET S ALONG WITH THEIR RETURN S OF INCOME. RELEVANT BALANCE SHEETS CLEARLY SHOW CASH IN HAND. THIS CASH IN HAND WAS DEPOSIT ED IN BANK AND CHEQUES WERE ISSUED TO THE ASSESSEE. IN THIS BACKGROUND, CIT(A)RIGHTLY OBSERVED THAT IDENTITY, GENUINENESS OF TRANSACTION AND CREDITWORTHINESS OF CREDITORS WERE PROVED BY ASSESSEE. THERE IS NOTHING ON RECORD TO SUGGEST THAT ASSESSEE ROUTED ITS OWN MONEY THROUGH THIS CREDITOR. IN FACTS AND CIRCUMSTANCES, CIT(A) WAS JUSTIFIED IN DELETING THE PENALTY IN QUESTION. SAME IS UPHELD. 5 . AS A RESULT, APPEAL FILED BY THE REVENU E IS DISMISSE D . PRONOUNCED IN THE OPEN COURT ON THIS THE 4 TH DAY O F DECEMBER , 2014. SD/ - SD/ - ( B. C. MEENA ) (SHAILENDRA KUMAR YADAV ) ACCOUNTANT MEMBER JUDICIAL MEMBER TRUE COPY S.K.SINHA COPY FORWARDED TO: 1. THE APPELLANT - INCOME TAX OFFICER 2. THE RESPONDENT - SHRI ARUN KUMAR, HUF 3. THE CIT 4. CIT(APPEALS) 5. THE DR 6. GUARD FILE (ITA NO. 8 30 /JP/ 201 2 ) BY ORDER A.R., JAIPUR.