Income Tax Appellate Tribunal - Amritsar
Sh. Pramod Kumar Arora, Amritsar. vs The Dy Commissioner Of Income Tax, ... on 24 August, 2017
IN THE INCOME TAX APPELLATE TRIBUNAL
AMRITSAR BENCH; AMRITSAR
BEFORE SH.T.S. KAPOOR, ACCOUNTANT MEMBER AND
SH.N.K.CHOUDHRY, JUDICIAL MEMBER
I.T.A. No.55(Asr)/2017
Assessment Year:2012-13
Sh. Parmod Kumar Arora Vs. Dy. CIT,
Prop. Circle-III, Amritsar.
M/s Delite Agencies,
117- The Mall, Amritsar.
PAN:AALTS-8574J
(Appellant) (Respondent)
Appellant by: Sh. K.R. Jain, (Ld. Adv.)
Respondent by: Sh. Rahul Dhawan (Ld. DR)
Date of hearing: 22.08.2017
Date of pronouncement:24.08.2017
ORDER
PER N. K. CHOUDHRY :
The instant appeal has been filed by the assessee, by feeling aggrieved against the order dated 01.11.2016 passed in appeal No.08/2015-16 by the CIT(A), Amritsar for Asst. Year:2012-13.
2. The assessee has raised the following grounds of appeal.
"1. That the order of the Learned Deputy Commissioner of Income Tax making an addition u/s 68 on account of alleged cash credits of Rs.3,18,960/- is wrong illegal and against facts and likewise CIT(A) is not justified while confirming the same.
2. That the Ld. CIT(A) has not appreciated the facts of the case, explanation offered, affidavit filed, evidence in support of the sale to various parties and proceeded to make the addition arbitrarily.
3. That the Ld. CIT(A) has not appreciated the certificate issued by Excide & Taxation Commissioner and details of ICC Transactions which clearly indicates that goods have crossed sale tax barrier and sales have been effected.
3. That Ld. CIT(A) has erred in law and on facts while holding that trade receipts as cash credit.
4. That Ld. CIT(A) has erred in law and on facts while holding that trade receipts as cash credit.
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Asst. Year: 2012-13
5. That learned CIT(A) has not considered the case law relied upon during the course of appellate proceedings in a proper and judicial manner.
6. That the Learned DCIT has erred in law and on facts while not exceeding the request to summon the parties u/s 131 and thereby denying the proper opportunity of being heard."
3. The brief facts of the case are that the assessee furnished the return of income on 30.04.2013 at Rs.3,06,47,050/- and the same was processed u/s 143(1) of the Income Tax Act, thereafter, the case was selected for scrutiny through 'CASS' and further the assessment order was passed. The Assessing Officer while considering the case of the assessee asked to furnish his bank accounts statement because there were numerous deposits including cash deposits in the bank accounts of assessee and specifically, the Assessing Officer on perusal of cash book relates the assessee shown receipt or cash to the tune of Rs.3,18,960/- from some of the parties on various dates, however, it was explained by the assessee that these parties were sundry debtors of assessee and cash has been received from them against their outstanding balances. On non satisfaction to the reply of the assessee, the Assessing Officer concluded that the assessee could not furnish any satisfactory explanation in respect of cash credit in his books amounting to Rs.3,18,960/-, therefore, the same is treated as unexplained cash credit and added to the total income of the assessee u/s 68 of the Income Tax Act. The Assessing Officer also added Rs.9,831/- in the income of the assessee.
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Asst. Year: 2012-13
4. Feeling aggrieved against the order passed by the Ld. Assessing Officer, the assessee preferred the first appeal before Ld. CIT(A), and Ld. CIT(A) while dismissing the appeal of the assessee upheld the order passed by the A.O by concluding as under:
"6. I have gone through the grounds of appeal, submission & the Assessment order.
The additions have been made on account of cash received from various debtors during the year. M/s Shakti Industries denied making any payment to the appellant during the year. The same has been credited on different dates of May 2011. The appellant has contended that it has been received against the material supplied in year 2009. Since the party has denied having made any payment, it has rightly been added back.
As far as other debtors are concerned, none has replied to notice under section 133(6). Further all debtors are very far of places either in Madhya Pradesh and Maharashtra. It is strange that the debtors have repaid the amount on different dates only in the month of April, May & June 2011, that too in quick succession when no money is received since 2009. Thus the credit worthiness and genuineness of transactions is not proved and the action of AO is confirmed."
The assessee, further assailed the order before the Tribunal by filing the instant appeal and in support of his case submitted that the assessee engaged in the business of Cycle Parts and supplied the goods to the following parties.
(i) Jain Cycle Traders, Jabalpur
(ii) Vardhman Tyre Cycle Centre, Aurangabad
(iii) Vikas Cycle Store, Phurungi
(iv) Shakti Industries, Indore The copies of account and details were also filed before the authorities below by mentioning the Dates, Bill Nos. Amounts and Name of Transporters and GR Nos. and its dates. The assessee further submitted that an affidavit to support the above submission was also filed before the Ld. A.O as well as CIT(A) and even otherwise it is 4 ITA No.55(Asr)/2017 Asst. Year: 2012-13 matter of record that the assessee sent the said goods through transport and the goods sent to the parties have crossed the sale tax barrier as per certificate issued and even otherwise details of ICC transactions clearly indicates that goods have crossed sale tax barrier, therefore, the contention of one of the parties i.e., Shakti Industries that they do not have any business with the said party (the assessee) and not having any account for the F.Ys. 2010-11 & 2011-12 is factually not correct. It was further submitted by the Ld. AR that all transactions have duly been proved by filing affidavit of the assessee as well as by copy of balance sheet as well as ICC transaction details as well confirmation of the Excise and Taxation Department.
5. On the contrary, the Ld. DR submitted that the order passed by the Ld. CIT(A) does not deserve to be set aside because the same having been passed in the facts and circumstances of the case because the assessee has failed to bring the parties before the Assessing Officer to substantiate his claim and even otherwise the observation of the Assessing Officer is right to the extent the goods have been supplied by the assessee in 2009, however, the payments have been shown as received in 2011 which creates the doubts on the genuineness of the transactions and even other wise for the sake of argument, it is accepted that sale is genuine but still the amount under consideration cannot be subject to the link with the sale because the onus was upon the assessee to establish the genuineness of the 5 ITA No.55(Asr)/2017 Asst. Year: 2012-13 transactions and to explain cash credit which the assessee has failed to furnish satisfactory explanation in respect to cash credit in his books which remained unexplained, therefore, the order passed by the authorities below deserves to be confirmed.
6. We have gone through with the facts and circumstances of the case as it reflects from the order passed by the CIT(A) itself that the assessee had shown Dates, Bill Nos. Amounts and Name of Transporters and GR Nos. and its dates through whom the goods have been supplied and further details of the payments received from the respective parties and further affidavit to support the submissions as well as the assessee also replied to the Assessing Officer quarry to file copies of account of the above parties by submitting his letter dated 25th Feb.2015 informing the AO that he has requested to parties through speed post to confirm their account and even otherwise it reflects from the order passed by the Ld. CIT(A) that the Assessing Officer was also opted to send notice u/s 136 (6) to the parties concerned of the assessee and except Shakti Industries neither any other party responded to the notice of the A.O nor A.O enforced their presence. It is a matter of fact that the assessee specifically asked the A.O. to summon Shakti Industry, Indore along with books of account purchase details u/s 131 even it was also offered by the assessee that the assessee ready to pay necessary charges and further it was also requested to summon the transport company M/s Hind Rattan Logistics, Shahed Bhagat Singh Road, Sherawala Gate, Amritsar 6 ITA No.55(Asr)/2017 Asst. Year: 2012-13 regarding booking of goods vide invoice no.269 dated 25th December, 2009, GR. No. 18389 dated 25.12.2009 and vide invoice No. 253, GR. No.15934 dated 7.11.2009 through the said transporter. However, the Ld. Assessing Officer not paid any head to the request of assessee and wrongly determined that the assessee has miserably failed to discharge the onus cast upon him u/s 68. Further it was observed by the Assessing Officer that after availing repeated opportunities provided to the assessee over a period of three months to explain cash credits in his books on 28th March, 2015 but because 11 days left for time barring date, therefore, the assessee has now requested the Department to summon all these out station parties (as primary witnesses) which are at the outstation of more than 500 K.M. from Amritsar and transport company for verification. Therefore, the Assessing Officer reminded the Sec.68 of the Act by mentioning that the burden of proof is on the assessee to prove satisfactory the sources and nature of certain amount received during the accounting year and if the assessee could not offer a satisfactory explanation, then the Assessing Officer is entitled to draw the adverse inference.
In our considered opinion, the conclusion of the Assessing Officer was not right because even otherwise he failed to give opportunity to cross examination, the owner of Shakti Industries who filed the reply. As it is not in controversy that the assessee has sent goods through transport companies and the same also crossed the sale tax barrier, ICC transactions and even otherwise, the Department has not doubted 7 ITA No.55(Asr)/2017 Asst. Year: 2012-13 the details of the bill Nos. amounts and the Transporters and GR Nos. as well confirmation of the Excise and Taxation Department for crossing the barrier, in that eventuality the assessee discharged his onus prima facie because he can only request the parties to furnish the PAN and/or account details of the respective parties, but it is the power and prerogative of the Revenue Officers to compel the parties to provide the necessary details, if any, required and even otherwise from the reply filed by the Shakti Industries, it has provided the PAN No. but other three parties have not responded to the notice of the Assessing Officer and the Assessing Officer even otherwise did not try to get enforced the presence of the other three parties in the assessment proceedings.
We are of the considered opinion, that it was necessary for the Department that it should have make available the owner of Shakti Industries for cross examination as the Department failed, therefore, it amounts to denial of justice and against the rule of audi alteram partem and the onus also shifted on the Department and according to the Apex Court Judgment in the case of Mehta Parikh & Company Vs. CIT, Bombay 30 ITR 181 as in the said case, the books of the appellant were accepted and entries therein were not challenged and neither further accounts nor vouchers were called for, and the persons who gave the affidavits were never cross examined. It was not open to the Revenue to challenge the correctness of the cash books entries or the statement made in the affidavits.
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Asst. Year: 2012-13 Respectfully following the ratio of aforesaid judgment, it is clear from the facts that entries as have been shown by the assessee in the form of bill Nos. dates, amount and name of the transports as well as GR Nos. and certificate from the ICC Barrier to the effect that the goods have been crossed the boarder and even otherwise the aforesaid facts affirmed by the assessee by filing his affidavit. Therefore, we do not have any hesitation to conclude that the assessee received the amount in lieu of goods supplied and therefore, was able to discharge his onus to explain satisfactory qua cash credited in his books of accounts amounting to Rs.3,18,960/- and the same is held as explained cash credit.
In the aforesaid conclusion the appeal filed by the assessee is allowed.
7. In the result, the appeal filed by the assessee is allowed.
Order pronounced in the open Court on 24.08.2017.
Sd/- Sd/-
(T. S. KAPOOR) (N.K.CHOUDHRY)
ACCOUNTANT MEMBER JUDICIAL MEMBER
Dated:24.08.2017.
/PK/ Ps.
Copy of the order forwarded to:
(1) The Assessee:
(2) The
(3) The CIT(A),
(4) The CIT,
(5) The SR DR, I.T.A.T.,
True copy
By Order