M/s. Mahendra Syndicate, Ahmedabad V. The Income tax Officer,Ward-11(4), Ahmedabad

ITA 86/AHD/2011

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 50781 (ITAT-AHMEDABAD)
• Duration Of Justice: 9 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-10-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 21-09-2011
• Assessment Year: 2007-2008
• Appeal Filed On: 13-01-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K GUPTA
• Assessee Lawyers: S N SOPARKAR
• Keywords: Unexplained cash credit; Opportunity of being heard; Additional evidence; Corroborative evidences; Accommodation entries; Onus to prove
• Section: 143(3); 234B; 68

Judgement Text

- 1 - IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH CAHMEDABAD BEFORE S/SHRI D. K. TYAGI, J.M. AND A. MOHAN ALANKAMONY, A.M. ITA NO.86/AHD/2011 ASST. YEAR 2007-08 ITA NO.87/AHD/2011 ASST. YEAR 2007-08 M/S MAHENDRA SYNDICATE, 98, NEW CLOTH MARKET, O/S RAIPUR GATE, AHMEDABAD. M/S M.R. INTERNATIONAL, 98, NEW CLOTH MARKET, O/S RAIPUR GATE, AHMEDABAD. VS. INCOME-TAX OFFICER, WARD- 11(4), AHMEDABAD. (APPELLANT) .. (RESPONDENT) APPELLANT BY : SHRI S. N. SOPARKAR, SR.ADVOCATE RESPONDENT BY: SHRI S. K. GUPTA, CIT, DR DATE OF HEARING :21/9/2011 DATE OF PRONOUNCEMENT : 21/10/2011. O R D E R PER D. K. TYAGI, JUDICIAL MEMBER. BOTH THE APPEALS HAVE BEEN FILED BY THE ASSESSEES AGAINST THE SEPARATE ORDERS OF LD. CIT(A) DATED 30/11/2010. SIN CE THE ASSESSEES ARE OF THE SAME GROUP AND THE ISSUES INVOLVED IN THESE TWO APPEALS ARE COMMON, THESE ARE TAKEN UP FOR DISPOSAL BY THIS COMMON ORDE R FOR THE SAKE OF CONVENIENCE. ITA NO.86/AHD/2011 ASST. YEAR 2007-08 2. FOLLOWING GROUNDS HAVE BEEN RAISED IN THIS APPEA L :- ITA NOS.86 & 87/AHD/2011 ASST. YEAR 2007-08 2 (1) THE LD, CIT (A) HAS ERRED IN LAW AND ON FACTS I N CONFIRMING THE ADDITION OF RS 1,36,61,482 AS UNEXPLAINED CASH CRED IT U/S 68. THE LD. CIT (A) HAS FAILED TO TAKE INTO ACCOUNT THAT AL L THE AMOUNT HAS BEEN RECEIVED THROUGH ACCOUNT PAYEE CHEQUES AND THE APPELLANT HAS PROVIDED THE NAMES, ADDRESSES AND PAN OF THE DEPOSI TORS. THE APPELLANT DOES NOT HEAR THE FURTHER ONUS OF PROVING THE TRANSACTION TO BE GENUINE. THE ADDITION BEING UNJUST AND UNCALL ED FOR HE DELETED NOW, (2) THE UL CIT (A) HAS ERRED IN LAW AND ON FACTS IN NOT FULLY DELETING THE ADDITION OF RS 69,20.000 AS UNEXPLAINED CASH CR EDIT U/S 68, THE LD. CIT (A) HAS FAILED TO TAKE INTO ACCOUNT THAT AL L THE AMOUNT HAS BEEN RECEIVED THROUGH ACCOUNT PAYEE CHEQUES AND THE APPELLANT HAS PROVIDED THE NAMES, ADDRESSES AND PAN OF THE DEPOSI TORS. THE APPELLANT DOES NOT BEAR THE FURTHER ONUS OF PROVING THE TRANSACTION TO BE GENUINE. THE LD, CIT(A) OUGHT TO HAVE DELETED THE ADDITION IN FULL INSTEAD OF RESTRICTING THE ADDITION TO THE EXTENT OF DIFFERENCE. THE ADDITION BEING UNJUST AND UNCALLED FOR BE DELET ED NOW. (3) THE LD. CIT (A) HAS ERRED IN LAW AND ON FACTS I N OBSERVING IN PARA 3.1.3 THAT ALL THE ADDITIONS IN RESPECT OF DIFFEREN T CREDITORS IS CONFIRMED/ DELETED AS PER THE DISCUSSION IN RESPECT OF EACH PARTIES. THE LD. CIT(A) ERRED BOTH IN LAW AND ON FACTS IN AD JUDICATING THE GROUND OF UNEXPLAINED CASH CREDIT U/S 68 PARTLY. TH E LD. CIT (A) HAS ERRED IN NOT ADJUDICATING WITH RESPECT TO OBSER VATIONS ABOUT ADDITIONS MADE FOR THE AMOUNTS RECEIVED FROM ARVIND TEXTILES TOTALING TO RS 36,688/- ON THE FACTS AND CIRCUMSTAN CES OF THE CASE, CONSIDERING THE SUBMISSIONS THE INITIAL ONUS U/S 68 WAS DISCHARGED. IT BE SO HELD NOW AND ADDITION HE DELETED. (4) THE LD, CIT (A) HAS ERRED IN LAW AND ON FACTS I N CONFIRMING THE ADDITIONS OF RS 2.27,000 MADE BY ID ASSESSING OFFIC ER IN RESPECT DIFFERENCE BETWEEN THE LEDGER ACCOUNT SUBMITTED BY THE APPELLANT AND THE AMOUNTS REFLECTED IN 3CD REPORT. THE LD CIT (A) HAS GROSSLY ERRED IN UNDERSTANDING THE ISSUE AS THE AMO UNT SHOWN IN 3CD REPORT IS THE MAXIMUM AMOUNT IT CANNOT BE COMPA RED WITH THE AMOUNT IN LEDGER ACCOUNT. THE ADDITION BEING UNJUST AND UNCALLED FOR OUGHT TO HAVE BEEN DELETED. IT BE SO HELD NOW A ND ADDITION HE DELETED. (5) BOTH THE LOWER AUTHORITIES HAVE FAILED TO PROPERLY APPRECIATING THE FACTS, VARIOUS SUBMISSIONS, EXPLANATIONS AND INFORM ATION SUBMITTED ITA NOS.86 & 87/AHD/2011 ASST. YEAR 2007-08 3 BY THE APPELLANT FROM TIME TO TIME WHICH OUGHT TO H AVE BEEN CONSIDERED BEFORE PASSING THE IMPUGNED ORDER. (6) THE LD. CIT(A) OUGHT TO HAVE ALLOWED THE AP PEAL IN TOTO. (7) LEVY OF INTEREST U/S 234A, 234B AND 234C OF THE ACT IS NOT JUSTIFIED. (8) INITIATION OF PENALTY U/S 271(1)(C) OF THE ACT IS NOT JUSTIFIED. ITA NO.87/AHD/2011 ASST. YEAR 2007-08 3. FOLLOWING GROUNDS HAVE BEEN RAISED IN THIS APPEAL :- (1) THE LD. CIT (A) HAS ERRED IN LAW AND ON FACTS I N CONFIRMING THE ADDITION OF RS 46,89,968 AS UNEXPLAINED CASH CREDIT U/S 68. THE LD. CIT (A) HAS FAILED TO TAKE INTO ACCOUNT THAT ALL TH E AMOUNT HAS BEEN RECEIVED THROUGH ACCOUNT PAYEE CHEQUES AND THE APPE LLANT HAS PROVIDED THE NAMES, ADDRESSES AND PAN OF THE DEPOSI TORS. THE APPELLANT DOES NOT BEAR THE FURTHER ONUS OF PROVING THE TRANSACTION TO BE GENUINE. THE ADDITION BEING UNJUST AND UNCALL ED FOR BE DELETED NOW. (2) THE LD. CIT (A) HAS FURTHER ERRED IN LAW AND ON FACTS IN SETTING ASIDE THE MATTER BACK TO THE FILE OF A.O. FOR THE P URPOSE OF VERIFICATION IN RESPECT OF ALLEGED UNEXPLAINED CASH CREDIT U/S 68 OF RS 96,25,000 AND HOLDING THAT THE ADDITION TO THE E XTENT OF DIFFERENCE SHALL BE SUSTAINED. THE LD. CIT (A) OUGH T TO HAVE DELETED THE ENTIRE ADDITION AND ALLOWED THE GROUND, THE LD. CTT (A) HAS FAILED TO TAKE INTO ACCOUNT THAT ALL THE AM OUNTS HAVE BEEN RECEIVED THROUGH ACCOUNT PAYEE CHEQUES AND THE APPE LLANT HAS PROVIDED THE NAMES, ADDRESSES AND PAN OF THE DEPOSI TORS. THE APPELLANT DOES NOT BEAR THE FURTHER EMUS OF PROVING THE TRANSACTION TO BE GENUINE. THE ADDITION BEEN UNJUST AND UNCALLE D FOR BE DELETED NOW, (3) THE LD. CTT (A) HAS ERRED IN LAW AND ON FAC TS IN OBSERVING IN PARTF 3,1.3 THAT ALL THE ADDITIONS IN RESPECT OF DIFFEREN T CREDITORS IS CONFIRMED/ DELETED AS PER THE DISCUSSION IN RESPECT OF EACH PARTIES. THE ID CIT(A) ERRED BOTH IN LAW AND ON FACTS IN ADJ UDICATING THE GROUND OF UNEXPLAINED CASH CREDIT U/S 68 PARTLY. TH E LD- CIT (A) HAS ERRED IN NOT ADJUDICATING WITH RESPECT TO OBSER VATIONS ABOUT ADDITIONS MADE FOR THE AMOUNTS RECEIVED FROM ADVANC E FINSTOCK ITA NOS.86 & 87/AHD/2011 ASST. YEAR 2007-08 4 PVT LTD AND KAMLESH KURNAR MILAP CHAND SHAH TOTALIN G TO RS 6,00,000/- ON THE FACTS AND CIRCUMSTANCES OF THE CA SE, CONSIDERING THE SUBMISSIONS THE INITIAL ONUS U/S 68 WAS DISCHAR GED. IT BE SO HELD NOW AND ADDITION BE DELETED. (4) THE LD, CJT (A) HAS ERRED IN LAW AND ON FACTS I N CONFIRMING THE ADDITIONS OF RS 3,60,000 MADE BY LD ASSESSING OFFIC ER IN RESPECT OF AMOUNT RECEIVED FROM M/S SUBODH ENTERPRISE AS ALSO DISALLOWING INTEREST OF RS 30,000. THE LD. AO ERRED IN NOT ACCE DING TO THE SPECIFIC REQUEST MADE BY THE APPELLANT TO THE AO TO SUMMON THE SAID CREDITORS FOR VERIFICATION OF THE TRANSACTIONS AS THE SAID PARTY WAS NOT COOPERATING. THE AMOUNTS HAVE BEEN RECEIVED AND PAID BY CHEQUES. THE ADDITION BEING UNJUST AND UNCALLED FOR OUGHT TO HAVE : BEEN DELETED. IT BE SO HELD NOW AND ADDITION HE DEL ETED. (5) BOTH THE LOWER AUTHORITIES HAVE FAILED TO PROPERLY APPRECIAT ING THE FACTS, VARIOUS SUBMISSIONS, EXPLANATIONS AND INFORM ATION SUBMITTED BY THE APPELLANT FROM TIME TO TIME WHICH OUGHT TO H AVE BEEN CONSIDERED BEFORE PASSING THE IMPUGNED ORDER. (6) THE ID, CIT(A) OUGHT TO HA\E ALLOWED THE APPEAL IN TOTO. (7) LEVY OF INTEREST U/S 234A, 234B AND 234C OF THE ACT IS NOT JUSTIFIED. (8) INITIATION OF PENALTY U/S 271( I )(C) OF TH E ACT IS NOT JUSTIFIED. FIRST WE TAKE UP ITA NO.86/AHD/2011 ASST. YEAR 2007 -08 4. THE FIRST FOUR GROUNDS OF THIS APPEAL IS REGARDI NG ADDITIONS OF RS.1,36,61,482/-, RS.69,20,000/-, RS.36,688/- AND R S.2,27,000/- RELATE TO CONFIRMATION OF ADDITIONS REGARDING UNEXPLAINED CAS H CREDITS MADE U/S 68. ON VERIFICATION OF THE BALANCE SHEET IT WAS NOTICED BY THE AO THAT THE ASSESSEE HAD SHOWN UNSECURED LOAN RECEIVED AMOUNTIN G TO RS.1,39,61,482/- DURING THE YEAR UNDER CONSIDERATIO N FROM THE FOLLOWING PERSONS :- SL.NO. NAME OF THE DEPOSITORS AMOUNT (RS.) 1. ANJANI TEXTILES 12,00,000 2 APEKSHA TEXTILES 2,50,000 ITA NOS.86 & 87/AHD/2011 ASST. YEAR 2007-08 5 3 ARIHAND TEXTILES 1,00,000 4 ARVIND TEXTILE 36,688/- 5 ASHA FEB (P) LTD. 3,14,960 6 BHAGWATI IMPEX 25,00,000 7 BHAGWANDAS & SONS 59,834 8 HANUMAN TEXTILES 3,40,000 9 MAHADEV SYNTHETICS 6,00,000 10 NIKITA TEXTILES 1,30,000 11 OM SHANKAR TEXTILES 5,50,000 12 P.A. PATIL 25,000 13 PARAG TEXTILES 5,60,000 14 SHAH MAHENDRA KUMAR C 3,00,000 15 SHABHNACHAND T JAIN HUF 75,000 16 SUMAN FINSTOCK (P) LTD. 69,20,000 TOTAL 1,39,61,482 THE AO ASKED THE ASSESSEE TO SUBMIT THE CONFIRMATIO N IN THE CASE OF DEPOSITORS AND SQUARED UP ACCOUNTS. THE ASSESSEE RE PLIED THAT THE ASSESSEE HAS ALREADY FILED DETAILS OF ACCOUNTS OF ALL THE PA RTIES AND ALL THE PAYMENTS HAVE BEEN RECEIVED BY ACCOUNT PAYEE CHEQUES AND PAY MENT ALSO BEEN MADE THROUGH ACCOUNT PAYEE CHEQUES. THE ASSESSEE AR GUED THAT ALL THE CREDIT BALANCE OF THE ABOVE REFERRED PARTIES HAD BE EN CONSIDERED BY THE AO. OUT OF THIS CREDIT BALANCE THE ASSESSEE HAD PAI D AMOUNT OUT OF THIS CREDIT TO THE CONCERNED PARTIES. THEREFORE, WHILE C ONSIDERING THE ADDITION U/S 68 OF THE ACT IT SHOULD BE RESTRICTED ONLY TO T HE NET CREDIT AMOUNT. HOWEVER, THE ASSESSEE HAS FILED CONFIRMATION ALONG WITH PAN NOS. OF VARIOUS PARTIES AND IF THE AO GAVE SUFFICIENT TIME THEY WILL FILE THEIR CONFIRMATION AS EARLY AS POSSIBLE. THE AO DID NOT A CCEPT THE ABOVE EXPLANATION SAYING THAT IT IS OBSERVED THAT THE AS SESSEE HAS SUBMITTED ONLY THE LEDGER ACCOUNT OF THE AFORE MENTIONED DEPO SITORS (EXCEPT SHAH MAHENDRAKUMAR CHANDAKANT) FROM HIS OWN BOOKS ACCOUN T AND THAT TOO WITHOUT THE PAN OF THESE DEPOSITORS. THE COPIES OF LEDGER ACCOUNTS AS PRODUCED BY THE ASSESSEE ARE ENCLOSED WITH THE ORDE R AS ANNEXURE-A ITA NOS.86 & 87/AHD/2011 ASST. YEAR 2007-08 6 THE AO STATED THAT THE ASSESSEE HAD NOT SUBMITTED E VEN THE COPY OF LEDGER ACCOUNT FROM HIS OWN BOOKS OF ACCOUNTS WITH REGARD TO THE DEPOSITORS AS MENTIONED BELOW. SL. NO. NAME OF THE DEPOSITORS AMOUNT (RS.) 1 SUMAN FINSTOCK (P) LTD. 69,20,000/- 2 PARAG TEXTILES 5,60,000/- 3 ASHA FEB (P) LTD. 3,14,960/- LOOKING TO THE NON-COOPERATION AND NON-COMPLIANCE O F THE ASSESSEE TO PRODUCE EVEN THE CONFIRMATION OF THESE DEPOSITORS, THE AO ISSUED SUMMONS TO SOME OF THE DEPOSITORS ON RANDOM BASIS A ND DEPUTED SHRI B. M. VANKAR, INSPECTOR OF HIS WARD TO SERVE THE SUMMO NS UPON THEM. THE LIST OF THESE DEPOSITORS IS MENTIONED AS BELOW : SL.NO. NAME OF THE DEPOSITORS ADDRESS 1 ANJANI TEXTILES 14,NEW CLOTH MARKET, O/S RAIPUR GATE ABAD. 2 HANUMAN TEXTILES -DO- 3 PARAG TEXTILES -DO- 4 BHAGWANDAS & SONS 190, NEW CLOTH MARKET, O/S RAIPUR GATE, ABAD. 5 APEKSHA TEXTILES 231, NEW CLOTH MARKET, O/S RAIPUR GATE, ABAD. 6 MAHADEV SYNTHETICS 314, NEW CLOTH MARKET, O/S RAIPUR GATE, ABAD. 7 OM SHANKAR TEXTILES -DO- 8 BHAGWATI IMPEX -DO- HOWEVER, SHRI B. M. VANKAR INSPECTOR REPORTED THAT THERE ARE NO SUCH PERSONS LIVING AT THE GIVEN ADDRESSES PRESENTLY OR EVEN IN ANY TIME IN PAST. THE COPY OF REPORT OF SHRI B.M. VANKAR INSPECTOR OF HIS WARD WAS ENCLOSED WITH HIS ORDER AS ANNEXURE-B. THE AO WAS O F THE VIEW THAT THE ONUS WAS ON THE ASSESSEE TO PROVE THE IDENTITY OF T HE DEPOSITOR, GENUINENESS OF TRANSACTION AND THE SOURCE OF THE DE POSIT WITH SUPPORTING ITA NOS.86 & 87/AHD/2011 ASST. YEAR 2007-08 7 DOCUMENTARY EVIDENCES TO JUSTIFY THE CREDIT APPEARI NG IN THE BOOKS OF ACCOUNT U/S 68 OF THE IT ACT. HOWEVER, THE ASSESSEE HAD FURNISHED THE DETAILS OF ONLY TWO DEPOSITORS NAMELY SHAH MAHENDRA KUMAR CHANDAKANT AMOUNTING TO RS.3,00,000/- FROM THE AFORESAID DEPOS ITOR. FURTHER THE ASSESSEE CONTENDED VIDE HIS REPLY DATED 21.12.2009 THAT ADDITION U/S 68 OF THE ACT SHOULD BE MADE ON THE NET BALANCE AFTER CON SIDERING THE DEBIT. THE CONTENTION OF THE ASSESSEE WAS NOT ACCEPTABLE T O THE AO AS ACCORDING TO HIM AS IT WAS ASSESSEES RESPONSIBILITY TO PROVE THE GENUINENESS OF EACH AND EVERY CREDIT ENTRY IN HIS BOOKS OF ACCOUNT WITH SUPPORTING EVIDENCES. THE ASSESSEE HAD NOT CORROBORATED WITH THE EVIDENCE S THAT THE DEBIT ENTRIES ARE IN RELATION TO ASSESSEE ONLY OR ANY PAR TICULARS PERSON. FOR MAKING THE ADDITION THE AO RELIED ON THE CASE OF BH AIYALAL SHAYM BEHARI VS. CIT 276 ITR 38 (ALL) AND THE DECISION OF HONBL E A.P. HIGH COURT IN THE CASE OF R.B. MITTAL VS. CIT 246 ITR 283 (AP). T HE AO FURTHER STATED THAT THE ASSESSEE HAS RECEIVED DEPOSITS IN FORM OF UNSECURED LOANS OF MORE THAN 1 CRORE AND NOT PAID ANY INTEREST ON IT WHICH LEADS TO BELIEVE THAT ABOVE MENTIONED DEPOSITS ARE NOT GENUINE AND THEY A RE MERELY ACCOMMODATION ENTRIES. THE ASSESSEE HAD FAILED TO P ROVE IDENTITY AND CREDITWORTHINESS OF THE DEPOSITORS AND GENUINENESS OF THE TRANSACTION. IN VIEW OF THE ABOVE CITED REASONS AND THE AFOREMENTIO NED DECISION OF HONBLE A.P. HIGH COURT INVOKING THE PROVISIONS OF SECTION 68 THE DEPOSITS AMOUNTING TO RS.1,36,61,482/- OUT OF TOTAL DEPOSITS OF RS.1,39,61,482/- HAS TREATED AS UNEXPLAINED CASH CR EDITS BY AO AND ADDED TO THE TOTAL INCOME OF THE ASSESSEE. 5. THE ASSESSEE WENT IN APPEAL BEFORE THE FIRST APP ELLATE AUTHORITY WHEREIN IT STATED THAT THE ASSESSEE WAS CARRYING ON THE BUSINESS OF POWER LOOM CLOTH. SINCE THE ASSESSEE WAS HAVING HUGE TURN OVER OF RS.6.94 CRORE, SARAFI TRANSACTIONS ARE BEING REQUIRED FOR CARRYING ON AND CONTINUING THE ITA NOS.86 & 87/AHD/2011 ASST. YEAR 2007-08 8 BUSINESS AND AS PER THE PROCEDURE IN EACH AND EVERY YEAR AND AMOUNT IT BORROWED AND AS SOON AS THE SURPLUSES AVAILABLE THE SAME WAS REPAID. ALL THE TRANSACTIONS WERE DONE THROUGH ACCOUNT PAYEE CH EQUES. THE ASSESSEE HAD FILED A LARGE NUMBER OF CONFIRMATION IN RESPECT OF VARIOUS CREDITORS. BUT FOR FILING SOME MORE CONFIRMATIONS THE ASSESSEE HAD REQUESTED TIME FROM THE AO WHICH WAS NOT ALLOWED. THE ASSESSEE THE REFORE FILED ADDITIONAL EVIDENCE IN THE FORM OF CONFIRMATION FRO M VARIOUS PARTIES. THE ASSESSEE ALSO STATED THAT IT WAS FILING BANK STATEM ENT AND STATEMENT OF ACCOUNTS IN ORDER TO PROVE THE IDENTITY OF THE CRED ITORS THEIR CREDITWORTHINESS AND GENUINENESS OF TRANSACTION. TH E ASSESSEE ARGUED THAT ONCE IT HAD PROVED THE IDENTITY OF THE CREDITORS, A ND GENUINENESS OF TRANSACTION AND ALSO THE CREDIT WORTHINESS NO ADDIT ION SHOULD BE MADE AS PER THE SETTLED POSITION OF LAW. 6. SINCE THE ASSESSEE FILED ADDITIONAL EVIDENCE IN THE FORM OF CONFIRMATIONS FROM VARIOUS PARTIES, THE LD. CIT(A) ASKED THE AO TO SUBMIT HIS REMAND REPORT ON THIS ADDITIONAL EVIDENC E. A COPY OF THE REMAND REPORT RECEIVED FROM THE AO WAS GIVEN TO THE ASSESSEE FOR HIS COMMENTS AND AFTER TAKING INTO CONSIDERATION ALL TH ESE MATERIALS, THE LD. CIT(A) CONFIRMED THE ACTION OF THE AO. FURTHER AGGRIEVED, NOW THE ASSESSEE IS IN APPEAL BE FORE US. 7. AT THE TIME OF HEARING, THE LD. COUNSEL OF THE A SSESSEE REITERATED THE SAME SUBMISSIONS AS RAISED BEFORE THE LOWER AUTHORI TIES. ON THE DIRECTION OF THE BENCH THE ASSESSEE FILED A CHART SHOWING IN RELATION TO EACH CASH CREDITS THE EVIDENCE PRODUCED BY HIM TOGETHER WITH THE PAGE NUMBERS OF THE PAPER BOOK WHERE THAT EVIDENCE WAS AVAILABLE. ITA NOS.86 & 87/AHD/2011 ASST. YEAR 2007-08 9 8. THE LD. DR WAS ASKED TO GIVE A REMAND REPORT DEALING WITH EACH EVIDENCE IN PARTICULAR THE CONTENTION OF THE ASSESS EE THAT PAN IN EACH CASE WAS CORRECT. THE REMAND REPORT RECEIVED BY THE LD. DR FROM THE AO READS AS UNDER :- TO THE SENIOR AUTHORISED REPRESENTATIVE (ITAT) C BEN CH, 2 ND FLOOR, NEPTUNE TOWER, NEAR NEHRU BRIDGE, ASHRAM ROAD, AHMEDABAD. RESPECTED SIR, (SUBMITTED THROUGH JT. CIT, RANGE-11, AHMEDABAD) SUB: APPEAL IN THE CASE OF M/S MAHENDRA SYNDICATE F OR ASST. YEAR 2007- 08 ITA NO.86/A/11 BEFORE C BENCH ITAT, AHMEDABAD REMAND REPORT REGARDING. REF: NO.SR.DR (ITAT)-C/MS/2011-12 DATED 15/07/201 1 ---------- KINDLY REFER TO THE ABOVE. 2. IN THIS CONNECTION I SUBMIT MY REPORT AS UNDER : IN THIS CASE THE INQUIRY WAS CONDUCTED THROUGH WARD INSPECTOR AT THE TIME OF ASSESSMENT PROCEEDINGS AS WELL AS AT THE TI ME OF REMAND REPORT TO THE LD. CIT(A). IN THIS REGARD THE ASSESSEE HAS NOT SUBMITTED EVEN THE COPY OF LEDGER ACCOUNT FROM HIS OWN BOOKS OF ACCOUN TS WITH REGARD TO THE DEPOSITORS AS MENTIONED BWLOW: (I) SUMAN FINSTOCK (P) LTD. (II) PARAG TEXTILES (III) A SHA FEB (P) LTD. THE FOLLOWING PARTIES ARE NOT AVAILABLE ON ADDRESS GIVEN BY THE ASSESSEE DURING THE ASSESSMENT PROCEEDINGS. (I) ANJANI TEXTILES (II) HANUMAN TEXTILES (III) PARAG T EXTILES (IV) BHAGWANDAS & SONS (V) APEKSHA TEXTILES (VI) MAHADEV SYNTHETICS (VII) OM SHANKAR TEXTILES AND (VIII) BHA GWATI IMPEX. ITA NOS.86 & 87/AHD/2011 ASST. YEAR 2007-08 10 THE FOLLOWING PARTIES ARE NOT AVAILABLE ON ADDRESSE S GIVEN BY THE ASSESSEE DURING THE APPELLATE PROCEEDINGS : (I) BHAGWATI IMPEX, (II) PARAG TEXTILES (III) ANJANI TE XTILES (IV) APEKSHA TEXTILES AND (V) BHAGWANDAS & SONS AND IN THE FOLLOWING CASES SUMMONS ISSUED AND SENT THROUGH REGISTERED POST AND SAME WERE RETURNED BY THE POSTAL AUTHORITY UNSERVED: (I) ARIHANT TEXTILES (II) BHAGWANDAS & SONS (III) SHRI P.A. PATIL (IV) BHAGWATI IMPEX (V) PARAG TEXTILES (VI) OM SHAN KAR TEXTILES (VII) ANJANI TEXTILES (VIII) MAHADEV SYNTH ETICS (IX) HANUMAN TEXTILES (X) APEXA TEXTILES (XI) ASHA FAB ( P) LTD. (XII) NIKITA TEXTILES. FURTHER THE DETAILS FURNISHING DURING THE COURSE OF ASSESSMENT PROCEEDINGS AS WELL AS APPELLATE PROCEEDINGS REGARD ING CONFIRMATION OF DEPOSITORS IT IS SEEN THAT DIFFERENT PAN HAS BEEN S HOWN IN THE PAN SHOWN DURING THE ASSESSMENT PROCEEDINGS. EVEN AT THE TIME OF REMAND REPORT TO THE CIT(A) THE SUBMISSION FURNISHED BY THE ASSESSEE THERE IS DIFFERENT IN PANS OF VARIOUS DEPOSITORS. THE PAN IN CONFIRMATION GIVEN BY THE ASSESSEE AT VARIOUS STAGES TO THE AO IS AS ANNEXURE -A. 3. THE ASSESSEE NOW SUBMIT THE PAN NOS. OF CREDITOR S BEFORE THE HONBLE ITAT, ONLY ON GIVING THE PAN IS NOT PROVED THE CREDIT WORTHINESS AND GENUINENESS OF TRANSACTION. FURTHER, THE CREDIT WORTHINESS AND GENUINENESS OF TRANSACTION WITH THE PARTY IS EXAMIN ED BY THE AO AT THE TIME OF ASSESSMENT. IN THE ABOVE CIRCUMSTANCES IT I S VERY CLEAR THAT THE ASSESSEE HAS FAILED TO DISCHARGE ITS ONUS TO PROVE IDENTITY AND CREDITWORTHINESS OF THE DEPOSITORS AND GENUINENESS OF THE TRANSACTION AND ACCORDINGLY INVOKING THE PROVISIONS OF SECTION 68. 4. IN VIEW OF THE ABOVE IT IS PROVED BEYOND DOUBT T HAT THE ENTRIES MADE IN THE ABOVE NAME PERSONS ARE ONLY FOR THE NAM E SAKE. IT IS, THEREFORE, PRAYED TO THE ITAT THAT THE ADDITIONS MA Y BE CONFIRMED AND APPEAL FILED BY THE ASSESSEE BE DISMISSED. YOURS FAITHFULLY, SD/- (D.R.MEENA) INCOME-TAX OFFICER WARD-11(4), AHMEDABAD. ITA NOS.86 & 87/AHD/2011 ASST. YEAR 2007-08 11 ANNEXURE SL. NO. NAME OF THE DEPOSITORS AMOUNT (RS) PAN SHOWN DURING COURSE OF 143(3) PAN SHOWN DURING COURSE OF APPELLATE PROCEEDINGS DT.9.3.3010 SUBMISSION TO CIT(A) DATED 13.09.2010 SUBMIS-SION DT.18.10. 2010 1 ANJANI TEXTILES 1200000 NO PAN AAWPA0592 M WRONG AAWPA0542M WRONG ACVPS6404K 2 APEKSHA TEXTILES 250000 NO PAN AACFK55491 WRONG AACFK5549L AACHK5549L 3 ARIHANT TEXTILE 100000 NO PAN ABAO17891J WRONG NO PAN NO PAN 4 ARVIND TEXTILES 36688 NO PAN ABAPJ6432S WRONG ABAPJ64325 WRONG 5 ASHA FEB (P) LTD. 314960 NO CONFIRM ATION ADPKB3854B WRONG NO PAN NO PAN 6 BHAGWATI IMPEX 2500000 NO PAN ADBPK7445C WRONG AOIPP5664B AOIPP5664B 7 BHAGWANDAS & SONS 59834 NO PAN AJCPR2804M WRONG ABFPP8914J NO PAN 8 HANUMAN TEXTILES 340000 NO PAN AACHP2632 M WRONG NO PAN NO PAN 9 MAHADEV SYNTHETICS 600000 NO PAN AJCPP1803C WRONG AJCPR1803S WRONG ABBPD6938J 10 NIKITA TEXTILES 130000 NO PAN ABAPJ1043T WRONG ABAPJ1043T WRONG NO PAN 11 OM SHANKAR TEXTILES 550000 NO PAN AEXPK1067N WRONG AEXPK9067N AEXPK9067N 12 P.A. PATIL 25000 NO PAN ABPJA3890S WRONG NO PAN NO PAN 13 PARAG TEXTILES 560000 NO PAN AABAH0425 D WRONG ACVPJ0690C ACVPJ0690C 14 SHAH MAHENDRA KUMAR C 300000 NO PAN AJ0PS9777J NO CONFIRMATION 15 SHOBHNACHAND T JAIN HUF 75000 NO PAN ABAPJ6843P WRONG ABAPJ6843P ABAPJ6843P 16 SUMAN FINSTOCK (P) LTD. 6920000 NO PAN AACCS1315B OK AACCS1315B OK AACCS1315B OK 9. PLACING RELIANCE ON THE ANNEXURE ATTACHED TO THE REMAND REPORT THE LD. DR SUBMITTED THAT SINCE THE PANS WERE NOT AVAIL ABLE TO THE LOWER AUTHORITIES THE NECESSARY VERIFICATION COULD NOT TA KE PLACE IN THE MATTER. NOW AS PANS ARE AVAILABLE, IT WILL BE IN THE FITNES S OF THINGS IF THE MATTER ITA NOS.86 & 87/AHD/2011 ASST. YEAR 2007-08 12 IS RESTORED BACK TO THE FILE OF AO SO THAT VERIFICA TION OF CREDITORS COULD BE MADE. THE LD. COUNSEL OF THE ASSESSEE DID NOT OBJEC T TO THIS PRAYER OF THE LD. DR. THEREFORE, THE MATTER IS RESTORED BACK TO T HE FILE OF AO FOR NECESSARY VERIFICATION AND FRESH ADJUDICATION AS PE R LAW, AFTER GIVING PROPER OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 10. GROUND NOS.5 & 6 ARE GENERAL IN NATURE HENCE NE ED NO ADJUDICATION. 11. GROUND NO.7 IS REGARDING LEVY OF INTEREST U/S 234A, 234B & 234C OF THE ACT WHICH IS CONSEQUENTIAL IN NATURE. 12. GROUND NO.8 IS REGARDING INITIATION OF PENA LTY U/S 271(1)(C) WHICH IS PREMATURE HENCE NEEDS NO ADJUDICATION. 13. IN THE RESULT, THE APPEAL FILED BY THE ASSES SEE IS ALLOWED FOR STATISTICAL PURPOSES. ITA NO.87/AHD/2011 IN THE CASE OF M/S M.R. INTERNAT IONAL ASST. YEAR 2007-08 14. THE GROUNDS RAISED IN THIS APPEAL ARE IDENT ICAL TO THE GROUNDS RAISED IN ITA NO.86/AHD/2011 FOR ASST. YEAR 2007-08 IN THE CASE OF M/S MAHENDRA SYNDICATE. THE FACTS AND CIRCUMSTANCES OF THE CASE ARE SIMILAR TO THE FACTS AND CIRCUMSTANCES IN THE CASE OF M/S M AHENDRA SYNDICATE. THEREFORE, AS PER OUR OBSERVATIONS IN THE CASE OF M /S MAHENDRA SYNDICATE, WE RESTORE THE MATTER TO THE FILE OF ASS ESSING OFFICER, FOR NECESSARY VERIFICATION AND ADJUDICATING THE ISSUES AFRESH IN THE LIGHT OF OUR ABOVE DIRECTIONS. THIS APPEAL OF THE ASSESSEE I S ALSO ALLOWED FOR STATISTICAL PURPOSES. ITA NOS.86 & 87/AHD/2011 ASST. YEAR 2007-08 13 15. IN THE RESULT, BOTH THE APPEALS FILED BY TH E ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. THE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 21/1 0/2011. SD/- SD/- (A. MOHAN ALANKAMONY) (D. K. TYAGI) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD, MAHATA/- COPY OF THE ORDER FORWARDED TO :- 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT(APPEALS)- 4. THE CIT CONCERNS. 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER, DEPUTY / ASSTT.REGISTRAR ITAT, AHMEDABAD 1.DATE OF DICTATION 21/9/11. 2.DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE TH E DICTATING MEMBER 27/9/11. /OTHER MEMBER. 3.DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P.S./P.S. 4.DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT.. 5.DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR .P.S./P.S 6.DATE ON WHICH THE FILE GOES TO THE BENCH CLERK .. 7.DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 8.THE DATE ON WHICH THE FILE GOES TO THE ASSTT. REG ISTRAR FOR SIGNATURE ON THE ORDER 9.DATE OF DESPATCH OF THE ORDER..