SHRI SHRIKANT GUPTA, BHARATPUR V. INCOME TAX OFFICER, WARD-2, BHARATPUR

ITA 898/JPR/2018

• Counselvise Citation: [2018] 123 COUNSELVISE.COM (IT) 0684 (ITAT-JAIPUR)
• Duration Of Justice: 2 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-10-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 18-07-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K C MEENA
• Keywords: Reopening of assessment; Tangible material; Onus to prove
• Section: 143(3); 147; 131; 68; 148; 144

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH FOT; IKY JKO] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM VK;DJ VIHY LA-@ ITA. NO. 898/JP/2018 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2011-12 SHRI SHRIKANT GUPTA S/O SHRI NIRANJAN LAL GUPTA MAHESHWARI MOHALLA, DEEG, DISTRICT- BHARATPUR. CUKE VS. THE ITO, WARD-2, BHARATPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AHHPG 8767 A VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : SHRI P.C. PARWAL (C.A.) JKTLO DH VKSJ LS @ REVENUE BY : SHRI K.C. MEENA (ADDL.CIT) LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 27/09/2018 MN?KKS'K.KK DH RKJH[ K@ DATE OF PRONOUNCEMENT : 01/10/2018 VKNS'K@ ORDER PER: VIKRAM SINGH YADAV, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF LD. CIT(A), ALWAR DATED 16.05.2018 FOR THE ASSESSMENT Y EAR 2011-12 WHEREIN THE ASSESSEE HAS TAKEN THE FOLLOWING GROUND OF APPEAL:- 1. UNDER THE FACTS AND CIRCUMSTANCE OF THE CASE, T HE NOTICE ISSUED U/S 148 AND CONSEQUENT ORDER PASSED U/S 147 IS ILLEGAL AND BAD IN LAW. 2. THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN SUSTAINING THE ADDITION OF RS. 5,40,000/- BY NOT ACCEPTING THE SOU RCE OF CAPITAL ITA NO. 898/JP/2018 SHRI SHRIKANT GUPTA VS. ITO 2 INTRODUCED BY THE ASSESSEE IN THE FIRM M/S SURAJ MA L NIRANJAN LAL INDUSTRIES BY HOLDING THAT THE ASSESSEE HAS NOT DIS CHARGED THE ONUS TO PROVE THE GENUINENESS OF CREDITORS IGNORING THAT THE AO IN THE REMAND REPORT HAS ACCEPTED THE SAME AS GENUI NE AND JUSTIFIED. 2. DURING THE COURSE OF HEARING, THE LD. AR HAS SU BMITTED THAT THE ASSESSEE IS A PARTNER IN M/S SURAJ MAL NIRANJAN LAL INDUSTRIES ALONG WITH HIS FATHER, SHRI NIRANJAN LAL GUPTA AND UNCLE, SHRI NARESH CHAND BANSAL. HE FILED HIS RETURN OF INCOME ON 28.03.2012 DECLARI NG INCOME OF RS. 1,58,920/-. DURING THE COURSE OF ASSESSMENT PROCEED INGS IN CASE OF M/S SURAJ MAL NIRANJAN LAL INDUSTRIES, THE AO OBSERVED THAT THE ASSESSEE HAS INTRODUCED CAPITAL OF RS. 5,40,000/- IN THE FIR M. THE ASSESSEE COULD NOT FURNISH THE EXPLANATION IN THIS REGARD. THEREAF TER, THE AO COMPLETED THE ASSESSMENT OF THE FIRM U/S 143(3) VIDE ORDER DA TED 26.03.2014 BY ACCEPTING THE CAPITAL OF THE PARTNERS BUT ISSUED NO TICE U/S 148 ON 06.05.2014 TO THE ASSESSEE PARTNER. AS NO ONE ATTEN DED THE HEARING, THE AO COMPLETED ASSESSMENT PROCEEDINGS U/S 144 OF THE ACT BY MAKING ADDITION OF RS. 5,40,000/- AS UNEXPLAINED CA SH DEPOSITS U/S 68 OF THE ACT. 3. IT WAS SUBMITTED BY THE LD AR THAT REOPENING OF ASSESSMENT IN THE HANDS OF THE ASSESSEE IS BAD IN LAW IN AS MUCH AS IF THE AO WAS NOT SATISFIED ABOUT THE EXPLANATION OF THE ASSESSEE AS TO THE SOURCE OF CAPITAL INTRODUCED IN THE FIRM, ADDITION CAN BE MAD E ONLY IN THE HANDS OF THE FIRM U/S 68 OF THE ACT. THEREFORE, THE REOPENIN G OF THE CASE OF THE ASSESSEE IS ILLEGAL AND BAD IN LAW. ITA NO. 898/JP/2018 SHRI SHRIKANT GUPTA VS. ITO 3 4. IT WAS FURTHER SUBMITTED THAT SO FAR AS MERIT OF THE ADDITION IS CONCERNED, THE ASSESSEE DURING THE APPELLATE PROCEE DINGS EXPLAINED THAT THE AMOUNT SO CONTRIBUTED AS CAPITAL IN HIS PA RTNERSHIP FIRM WAS OUT OF THE SURPLUS OF CASH BALANCE AVAILABLE WITH H IM AND LOANS TAKEN FROM VARIOUS PERSONS. THE DETAILS OF PERSONS FROM W HOM LOAN WAS TAKEN ALONG WITH THE DATE OF REPAYMENT AND AFFIDAVITS OF THESE PERSONS WERE SUBMITTED BEFORE THE LD. CIT(A) AS ADDITIONAL EVIDE NCE. 5. IT WAS SUBMITTED THAT THE LD. CIT(A) CALLED FOR A REMAND REPORT. THE AO IN HIS REMAND REPORT DATED 13.03.2018 STATED THAT HE HAD ISSUED NOTICES U/S 131 OF THE ACT ON 15.01.2018 TO NINE PERSONS OUT OF WHICH SIX PERSONS HAD APPEARED ON 08.02.2018 AND TH EIR STATEMENTS WERE RECORDED IN OATH. THESE PERSONS AFFIRMED THAT THEY HAD GIVEN LOAN TO THE ASSESSEE. HE ALSO STATED THAT THE ASSESSEE H AD CASH BALANCE OF RS. 1,57,012/- AS ON 31.03.2010 AND HAD COLLECTED A N AMOUNT OF RS. 5,40,000/- FROM VARIOUS PERSONS. THE ASSESSEE REPAI D AN AMOUNT OF RS. 3,40,000/- DURING THE SAME YEAR. ALL THESE FACTS AR E EVIDENCED FROM THE AFFIDAVITS AND THE STATEMENTS ON OATH TAKEN DURING THE REMAND PROCEEDINGS. THUS, IN LIGHT OF THE EVIDENCES, STATE MENTS, AFFIDAVITS AND OTHER CIRCUMSTANCES, THE AO HELD THAT THE CAPITAL C ONTRIBUTED BY THE ASSESSEE IS GENUINE AND JUSTIFIED. 6. IT WAS FURTHER SUBMITTED THAT THE LD. CIT(A) AT PARA 5.6 OF HIS ORDER STATED THAT THE AO HAS NOT BEEN ABLE TO VERIF Y WHETHER THE CREDITORS ARE INCOME TAX ASSESSES OR NOT AND WHETHE R THEY HAVE THE MEANS TO ADVANCE THE AMOUNT. HE FURTHER STATED THAT MERE ADMISSION OF HAVING ADVANCED THE LOAN IS NOT ENOUGH TO DISCHA RGE THE ONUS AND ITA NO. 898/JP/2018 SHRI SHRIKANT GUPTA VS. ITO 4 RELIED ON THE DECISION OF HON'BLE SUPREME COURT IN CASE OF CIT VS. LOVELY EXPORTS PVT. LTD. ACCORDINGLY, HE HELD THAT THE ASSESSEE HAS NOT DISCHARGED THE ONUS AND DISMISSED THE APPEAL. 7. IT WAS FURTHER SUBMITTED THAT THE AO IN HIS REM AND REPORT AFTER CONSIDERING THE AFFIDAVITS AND THE STATEMENT OF VAR IOUS PERSONS HAS ACCEPTED THAT THE LOAN RAISED BY THE ASSESSEE ARE G ENUINE, THE LD. CIT(A) WITHOUT BRINGING ANY ADVERSE MATERIAL ON REC ORD CANNOT IGNORE THE REMAND REPORT AND CONFIRM THE ADDITION. THE JUD GMENT OF HON'BLE SUPREME COURT OF LOVELY EXPORT PVT. LTD. RELIED BY THE LD. CIT(A) IS ONLY ON THE ISSUE THAT IN CASE OF A COMPANY WHERE A NY SHARE CAPITAL IS INTRODUCED BY A SHAREHOLDER, THE SAME CANNOT BE CON SIDERED IN THE HANDS OF THE COMPANY BUT ONLY IN THE HANDS OF THE S HAREHOLDER. THUS, THIS JUDGMENT IS NOT ON THE ISSUE OF THE SATISFACTI ON OF THE INGREDIENTS OF SECTION 68 OF THE ACT. 8. THE LD. DR IS HEARD WHO HAS RELIED ON THE FINDIN GS OF THE LD. CIT(A). 9. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. SO FAR AS THE FIRST GROUND OF APPEAL IS CONCERNED, WE ARE UNABLE TO ACCEPT THE CONTENTION SO ADVANCED BY THE LD. AR. WHILE COMPLETING THE ASSESSMENT IN THE HANDS OF THE PARTNERSHIP FIRM M/S SURAJ MAL NIRANJAN LAL INDUSTRIES, THE AO FOUND OUT THAT THE ASSESSEE HAS DEPOSITED CASH AMOUNTING TO RS. 5,40,0 00/- IN HIS CAPITAL ACCOUNT AND BASIS THE SAID INFORMATION, THE ASSESSM ENT PROCEEDINGS U/S 147 OF THE ACT WERE INITIATED IN THE HANDS OF THE ASSESSEE BEING THE PARTNER IN THE FIRM AND NOTICE WAS ISSUED U/S 1 48 OF THE ACT. ITA NO. 898/JP/2018 SHRI SHRIKANT GUPTA VS. ITO 5 THEREFORE, THERE WAS TANGIBLE MATERIAL IN POSSESSIO N OF THE ASSESSING OFFICER TO REOPEN THE ASSESSMENT IN THE HANDS OF TH E ASSESSEE AND MERELY BECAUSE THERE IS NO ADDITIONS MADE IN THE HA NDS OF THE FIRM, THE SAME CANNOT BE THE BASIS FOR CHALLENGING THE RE ASSESSMENT IN THE HANDS OF THE ASSESSEE. IN THE RESULT, GROUND NO. 1 OF THE ASSESSEE APPEAL IS DISMISSED. 10. REGARDING GROUND NO. 2 ON MERITS OF THE CASE, IT IS NOTED THAT DURING THE COURSE OF APPELLATE PROCEEDINGS, THE LD. CIT(A) HAS CALLED FOR REMAND REPORT FROM THE ASSESSING OFFICER AND IN HIS REMAND REPORT, THE ASSESSING OFFICER AFTER DUE EXAMINATION HAS GIV EN A FINDING THAT THE DEPOSIT OF RS. 5.40 LACS INTRODUCED AS CAPITAL DURI NG THE YEAR UNDER REFERENCE BY THE ASSESSEE HAS BEEN FOUND GENUINE AN D JUSTIFIED. THE RELEVANT FINDINGS OF THE AO IN HIS REMAND REPORT AR E REPRODUCED AS UNDER:- FOR VERIFICATION OF THE FACTS, NOTICES U/S 131 OF THE ACT WERE ISSUED ON 15.01.2018 TO THE FOLLOWING DEPOSITORS FROM WHOM TH E ASSESSEE CLAIMED TO HAVE COLLECTED THE MONEY AND DEPOSITED I N TO THE FIRM AS CAPITAL: (I) SH. PREM SINGH S/O SH. RAM SWAROOP SAINI SINGHP OLE GATE, DEEG DISTT. BHARATPUR. (II) SH. SAMALIYA S/O SH. MEGH SINGH VILLAGE KUCHAW ATI, DEEG (III) SH. VIRENDRA SINGH S/O SH. SOHAN LAL VILLAGE KUCHAWATI, DEEG (IV) KAVITA BANSAL D/O NIRANJAN LAL MAHESHWARI MOHA LLA, DEEG ITA NO. 898/JP/2018 SHRI SHRIKANT GUPTA VS. ITO 6 (V) INDIRA BANSAL W/O SH. NARESH CHAND BANSAL MAHES HWARI MOHALLA DEEG (VI) DEVENDRA S/O SH. LALA RAM KAMAN GATE, DEEG (BH ARATPUR) (VII) PRAHLAD SINGH S/O SH. SHYAM LAL RUDHIYA MOHA LLA, NEAR FORT, BHARATPUR. (VIII) NIMMI D/O NIRANJAN LAL MAHESHWARI MOHALLA, D EEG (IX) MEENA BANSAL W/O NIRANJAN LAL MAHESHWARI MOHAL LA, DEEG OUT OF THESE, SIX PERSONS APPEARED ON 08.02.2018 AN D THEIR STATEMENT WERE RECORDED ON OATH, THE DETAIL OF PRESENTED SIX PERSONS IS AS FOLLOWS:- (I) SH. PREM SINGH S/O SH. RAM SWAROOP SAINI SINGHP OLE GATE, DEEG, DISTT. BHARATPUR (II) SH. SAMALIYA S/O SH. MEGH SINGH VILLAGE KUCHAW ATI DEEG (III) SH. VIRENDRA SINGH S/O SH. SOHAN LAL VILLAGE KUCHAWATI, DEEG (IV) KAVITA BANSAL D/O SH.NIRANJAN LAL MAHESHWARI M OHALLA DEEG (V) INDIRA BANSAL W/O SH. NARESH CHAND BANSAL MAHES HWARI MOHALLA DEEG (VI) PRALAD SINGH S/O SH. SHYAM LAL RUDHIYA MOHALL A, NEAR FORT, BHARATPUR, ALL THESE PERSONS CONFIRMED THEIR DEPOSITS TO THE A SSESSEE AND ITS RETURNING ALSO AS WAS CLAIMED BY THE ASSESSEE I N HIS REPLY/SUBMISSION, FURTHER AS PER BALANCE SHEET OF T HE ASSESSEE DT. ITA NO. 898/JP/2018 SHRI SHRIKANT GUPTA VS. ITO 7 31/03/2010, HE WAS HAVING A CASH BALANCE OF RS. 1,5 7,012/- AND FURTHER HE COLLECTED THE AMOUNT FROM VARIOUS DEPOSI TORS OF RS. 5.40 LAKH OUT OF THIS TOTAL AVAILABLE BALANCE HE DEPOSIT ED THE AMOUNT OF RS. 5.40 LAKH IN TO THE FIRM ON VARIOUS DATES OUT OF TH IS DEPOSIT OF RS. 5.40 LAKH FROM VARIOUS PERSON, THE ASSESSEE RETURNED/REP AID THE MAXIMUM PORTION I.E. RS. 3.40 LAKH TO THE CONCERN PERSONS, DURING THE SAME YEAR UNDER REFERENCE, WHICH FACT IS EVIDENCED BY THE AFF IDAVITS AND THE STATEMENTS OF THE CONCERN PERSONS. SO KEEPING IN VIEW THE TOTAL FACTS, EVIDENCES, STATEMENTS, AFFIDAVITS AND OTHER CIRCUMSTANCES, THOUGH THE TEST CHECK METHOD WAS AP PLIED, THE DEPOSIT OF RS. 5.40 LAKH INTRODUCED AS CAPITAL DURI NG THE YEAR UNDER REFERENCE BY THE ASSESSEE HAS BEEN GENUINE AN D JUSTIFIED. 11. IN LIGHT OF ABOVE, WE ARE UNABLE TO APPRECIATE THE CONTENTIONS RAISED BY THE LD. CIT(A) IN TERMS OF NOT ACCEPTING THE FINDING OF THE ASSESSING OFFICER DURING THE COURSE OF REMAND PROCE EDING. GIVEN THAT THE ASSESSING OFFICER HAS CARRIED OUT THE NECESSARY VERIFICATION/EXAMINATION AND WHERE THE LD. CIT(A) I S OF THE OPINION THAT THE SAID EXAMINATION IS NOT SATISFACTORY, THEN IT I S INCUMBENT ON THE PART OF THE LD. CIT(A) TO GIVE A CONCLUSIVE FINDING AS TO WHY HE FEEL THAT THE EXAMINATION SO CONDUCTED BY THE AO IS NOT ACCEP TABLE, HOWEVER, IN THE INSTANT CASE WE DO NOT FIND ANY SUCH FINDING WH ICH HAS BEEN RECORDED BY THE LD. CIT(A). THEREFORE, IN LIGHT OF THE FACTS THAT THE AO EXAMINED THE SOURCE OF DEPOSIT AND HAS FOUND THE SA ME AS GENUINE AND JUSTIFIED, THE FINDINGS WHICH REMAINED UNCONTRO VERTED BEFORE US, WE SET ASIDE THE ORDER OF THE LD. CIT(A). IN THE RE SULT, THE GROUND NO. 2 OF THE ASSESSEES APPEAL IS ALLOWED. ITA NO. 898/JP/2018 SHRI SHRIKANT GUPTA VS. ITO 8 IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 01/10/2018. SD/- SD/- FOT; IKY JKO FOE FLAG ;KNO (VIJAY PAL RAO) (VIKRAM SINGH YADAV) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 01/10/2018. *SANTOSH VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- SHRI SHRIKANT GUPTA, BHARATPUR. 2. IZR;FKHZ@ THE RESPONDENT- ITO, WARD- 2, BHARATPUR. 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDR@ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR. 6. XKMZ QKBZY@ GUARD FILE { ITA NO. 898/JP/2018} VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR