The Income Tax Officer Ward-6(2)(1), Bangalore V. Smt Jayalakshmi N Gowda , Bangalore

ITA 832/BANG/2018

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 5034 (ITAT-BANGALORE)
• Duration Of Justice: 4 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-08-2018
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2013-2014
• Appeal Filed On: 16-03-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SWAPNA DASS JT BENGALURU
• Keywords: Unexplained cash credit; Opportunity of being heard
• Section: 143(3); 133(6); 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : BANGALORE BEFORE SHRI N.V. VASUDEVAN, JUDICIAL MEMBER AND SHRI JASON P. BOAZ , ACCOUNTANT MEMBER I TA NO. 832/BANG/2018 ASSESSMENT YEAR : 2013 - 14 THE INCOME TAX OFFICER, WARD 6(2)(1), BANGALORE. VS. SMT. JAYALAKSHMI N. GOWDA, NO.187, 11 TH CROSS, 4 TH MAIN, BEML LAYOUT, BANGALORE 560 079. PAN: AIEPJ 5739M APPELLANT RESPONDENT APPELLANT BY : SMT. SWAPNA DASS, JT.CIT(DR)(ITAT), BENGALURU. RE SPONDENT BY : SHRI MUKESH KUMAR JAIN, J. CA DATE OF HEARING : 27 .06 .201 8 DATE OF PRONOUNCEMENT : 08 .08.2018 O R D E R PER N.V. VASUDEVAN, JUDICIAL MEMBER THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER DATED 16.10.2017 OF THE CIT(APPEALS), BENGALURU-6, BENGAL URU RELATING TO ASSESSMENT YEAR 2013-14. 2. THE GROUNDS OF APPEAL RAISED BY THE REVENUE REA DS AS FOLLOWS:- 1. THE ORDER OF THE CIT (APPEALS) IS OPPOSED TO LA W AND THE FACTS AND CIRCUMSTANCES OF THE CASE. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, WHE THER THE LD. CIT(A) WAS RIGHT IN PASSING THE ORDER WITHOUT E XAMINING THE CRUCIAL ASPECTS OF CREDIT WORTHINESS AND GENUINENES S OF ITA NO. 832/BANG/2018 PAGE 2 OF 4 TRANSACTIONS AND IGNORING THE FACTS THAT THE ASSESS EE HAS NOT SUBMITTED THE REQUIRED DETAILS WITHIN TIME FOR EFFE CTIVE VERIFICATION BY THE AO. 3. FOR THESE AND SUCH OTHER GROUNDS THAT MAY BE URG ED AT THE TIME OF HEARING, IT IS HUMBLY PRAYED THAT THE ORDER OF THE CIT(A), IN SO FAR AS IT RELATES TO THE ABOVE GROUNDS MAY BE REVERSED AND THAT OF THE ASSESSING OFFICER BE RESTORED. 4. THE APPELLANT CRAVES LEAVE TO ADD, TO ALTER, TO AMEND OR DELETE ANY OF THE GROUNDS THAT MAY BE URGED AT THE TIME OF HEARING OF THE APPEAL. 3. THE ASSESSEE IS AN INDIVIDUAL. HE CARRIED ON B USINESS OF TOURS AND TRAVELS. IN THE COURSE OF ASSESSMENT PROCEEDINGS U /S. 143(3) OF THE INCOME-TAX ACT, 1961 [THE ACT] FOR THE AY 2013-14 , THE AO NOTICED THAT IN SCHEDULE III OF THE BALANCE SHEET, THERE WERE UNSEC URED LOANS SHOWN BY THE ASSESSEE OF RS.1,61,60,831 AND RECEIVED FROM M/ S. JAANSI SAMPARK KENDRA CONSULTANCY PVT. LTD. AND RS.3 LAKHS FROM M/ S. VOICE COM, IN ALL TOTALING TO RS.1,64,60,830. THE ASSESSEE FILED CON FIRMATIONS ALONG WITH PAN FROM THE AFORESAID TWO PARTIES. TO VERIFY THE GENUINENESS AND CREDITWORTHINESS AS WELL AS IDENTITY OF THE CREDITO RS, THE AO ISSUED NOTICE U/S. 133(6) OF THE ACT. THE SAID NOTICE WAS RETURN ED UNSERVED WITH THE REMARKS NO SUCH FIRM IN THIS ADDRESS. THE AO THE REFORE ADDED A SUM OF RS.1,64,60,830 TO THE TOTAL INCOME OF THE ASSESSEE ON ACCOUNT OF UNEXPLAINED CASH CREDIT U/S. 68 OF THE ACT. 4. BEFORE THE CIT(APPEALS), THE ASSESSEE SUBMITTED THAT THE ADDITION MADE WAS NOT SUSTAINABLE BECAUSE ADDITION WAS MADE FOR THE REASON THAT THE NOTICE U/S. 133(6) OF THE ACT WAS NOT SERVED ON THE CREDITORS. THE ASSESSEE RELIED ON THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF CIT V. ORISSA CORPORATION PVT. LTD., 159 ITR 78 (SC ) WHEREIN IT WAS HELD THAT ONCE THE CONFIRMATION IS FILED ALONG WITH PAN, IT IS FOR THE REVENUE ITA NO. 832/BANG/2018 PAGE 3 OF 4 AUTHORITIES TO PURSUE THE MATTER FURTHER AND EXAMIN E THE SOURCE OF INCOME OF THE CREDITOR AND SINCE NO EFFORT WAS MADE BY THE REVENUE, ADDITION MADE U/S. 68 OF THE ACT CANNOT BE SUSTAINED. THE CIT(AP PEALS) ACCEPTED THE CONTENTION OF THE ASSESSEE AND DELETED THE ADDITION MADE BY THE AO. AGGRIEVED BY THE ORDER OF CIT(APPEALS), THE REVENUE HAS PREFERRED THE PRESENT APPEAL BEFORE THE TRIBUNAL. 5. WE HAVE HEARD THE SUBMISSIONS OF THE LD. DR AND THE LD. COUNSEL FOR THE ASSESSEE. IT IS NOT IN DISPUTE BEFORE US THAT THE NOTICE U/S. 133(6) OF THE ACT WAS ISSUED TO THE CREDITORS ON 10.03.2016. THE ASSESSMENT WAS COMPLETED ON 21.03.2016 AND THERE WAS NO HEARING AF TER THE ISSUE OF NOTICE U/S. 133(6) OF THE ACT. THE AO THEREFORE CO ULD NOT CONFRONT THE FACT THAT NOTICE ISSUED BY HIM TO THE CREDITORS WERE RET URNED UNSERVED. IN THE CIRCUMSTANCES, THE CIT(APPEALS) OUGHT TO HAVE CALLE D UPON THE ASSESSEE TO FURNISH THE CORRECT ADDRESS OF THE CREDITORS TO ENABLE THE AO TO EXAMINE THE IDENTITY, CREDIT WORTHINESS OF THE CREDITORS AN D GENUINENESS OF THE TRANSACTION. THE FACT THAT PAN HAS BEEN GIVEN IN T HE CONFIRMATION CANNOT BE THE BASIS TO CONCLUDE THAT ALL THE THREE INGREDI ENTS U/S. 68 OF THE ACT HAVE BEEN SATISFIED. THE LD. COUNSEL FOR THE ASSES SEE SUBMITTED BEFORE US THAT HE IS WILLING TO FURNISH THE CORRECT ADDRESS O F THE CREDITORS. HE ALSO PRAYED THAT THE AO SHOULD BE DIRECTED TO VERIFY FRO M THE PAN DETAILS ABOUT THE IDENTITY AND CAPACITY OF THE CREDITORS. WE ARE OF THE VIEW THAT IT WOULD BE JUST AND PROPER TO SET ASIDE THE ORDER OF CIT(AP PEALS) ON THIS ISSUE AND RESTORE THIS ISSUE TO THE AO FOR FRESH CONSIDERATIO N. THE ASSESSEE WILL FURNISH THE CORRECT ADDRESS OF THE CREDITORS. THE AO WILL THEREAFTER PROCEED TO EXAMINE THE CASH CREDIT IN QUESTION IN ACCORDANC E WITH THE PROVISIONS OF SECTION 68 OF THE ACT. THE AO IS ALSO DIRECTED TO VERIFY THE INCOME-TAX PARTICULARS OF THE CREDITORS FROM THE PAN DETAILS G IVEN IN THE CONFIRMATION. ITA NO. 832/BANG/2018 PAGE 4 OF 4 THE AO WILL AFFORD OPPORTUNITY OF BEING HEARD TO TH E ASSESSEE BEFORE DECIDING THE ISSUE. 6. IN THE RESULT, THE APPEAL BY THE REVENUE IS ACCO RDINGLY TREATED AS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON THIS 08 TH DAY OF AUGUST, 2018. SD/- SD/- ( JASON P. BOAZ ) ( N.V. VASUDEVAN ) ACCOUNTANT MEMBER JUDICIAL MEMBER BANGALORE, DATED, THE 08 TH AUGUST, 2018. / D ESAI S MURTHY / COPY TO: 1. THE APP ELL ANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER SENIOR PRIVATE SECRETARY ITAT, BANGALORE.