Income Tax Appellate Tribunal - Ahmedabad
Rajiv Mardia, Ahmedabad vs Assessee on 8 November, 2011
आयकर अपीलीय अिधकरण, अहमदाबाद Ûयायपीठ 'बी', अहमदाबाद
सव[ौी ौी भवनेश सैनी,
ी, Ûयाियक सदःय एवं ौी ए.
ए.मोहन अलंकामोनी,
ामोनी लेखा सदःय के सम¢
IN THE INCOME TAX APPELLATE TRIBUNAL : 'B' BENCH : AHMEDABAD
Before Shri Bhavnesh Saini, Hon'ble J.M. & Shri A.Mohan Alankamony, Hon'ble A.M.)
आयकर अपील सं. ITA No. 2382/Ahd./2009 : िनधा[रण वष[ः- 1997-1998
Shri Rasiklal Mardia, Ahmedabad -Vs- DCIT, Circle-4, Ahmedabad
(PAN : AAPPM 5974J)
(अपीलाथȸ/Appellant) (ू×यथȸ/Respondent)
आयकर अपील सं. ITA No. 2188/Ahd./2009 : िनधा[रण वष[ः- 1997-1998
Shri Rajiv Mardia, Ahmedabad-Vs-ACIT, Cent.Circle-2(2), Ahmedabad
(PAN : AADPM 5975K)
(अपीलाथȸ/Appellant) (ू×यथȸ/Respondent)
आयकर अपील सं. ITA No. 2371/Ahd./2009 : िनधा[रण वष[ः- 1997-1998
Shri Rakesh Mardia, Ahmedabad-Vs-ACIT,Cent.Circle-2(2), A'bad
(PAN : AAPPM 5972Q)
(अपीलाथȸ/Appellant) (ू×यथȸ/Respondent)
अपीलाथȸ कȧ ओर से/ Appellant By : Shri S.N.Soparkar, Sr.Adv., with
Shri P.D.Shah & Ms. Urvashi Sodhan
ू×यथȸ कȧ ओर से / Respondent By : Shri Alok Johri, CIT,D.R.
सुनवाई कȧ तारȣख / Date of Hearing : 08/11/2011
घोषणा कȧ तारȣख / Date of Pronouncement : 23/12/2011
आदे श / Order
Per Shri A.Mohan Alankamony, Accountant Member :
These three appeals instituted by three assessees, namely, (i) Shri Rasiklal Mardia; (ii) Shri Rajiv Mardia and (iii) Shri Rakesh Mardia are ITA Nos. 2382, 2188 & 2371-Ahd-2009 directed against the impugned appellate orders of the ld. CIT (A)-III, Ahmedabad in ITA Nos. CIT (A)-III/ 382/ACIT-CC 2(2)/07-08, CIT (A)-
III/267/ACIT, CC 2(2)/07-08 and CIT (A)-III/383/ACIT-CC 2(2)/07-08 all dated 19.6.2009 respectively for the assessment year 1997-98.
2. As the issues raised and the state of affairs of the assessees are similar and rather identical in nature, these three appeals were heard, considered and disposed off in this common order for the sake of clarity and also for appreciation of facts.
2.1. Since the issues involved in the grounds of appeals raised by the respective assessees and also the stand of the Revenue as well as the findings of the ld. CIT (A) are identical, it was argued by both the parties that one of the appeals of the assessees may be considered for adjudication and the findings recorded by the Bench would be applicable to the appeals of other two assessees. Accordingly, the appeal of Shri Rasiklal Mardia in ITA No.2382/Ahd/2009 is taken up for adjudication and the findings recorded in his appeal are applicable in respect of the appeals preferred by (i) Shri Rajiv Mardia and (ii) Shri Rakesh Mardia as well.
ITA No.2382/Ahd/2009 - Shri Rasiklal Mardia:3. The assessee has raised six grounds in the grounds of appeal, in which, ground No.6 being general and no specific issue involved, it becomes inconsequential. Charging of interest u/s 234B and 234C of the Act [ground No.4] is mandatory and consequential in nature and, therefore, this ground is dismissed as not maintainable. Ground No.5 is also not maintainable as initiation of penalty proceedings at the time of finalization of assessment proceeding was in its infancy. Therefore, this 2 ITA Nos. 2382, 2188 & 2371-Ahd-2009 ground is dismissed. In the remaining grounds, the issues raised, in brief, are as under:
1. That the Ld. CIT (A) has erred in law and facts by not holding reassessment proceedings as bad in law and without jurisdiction and, therefore, order passed by the learned AO should be quashed and the additions made therein should be deleted in full.
2. That the learned CIT (A) has erred in law and facts by confirming the addition of Rs.10,40,00,000 u/s 68 of the Act of the loans taken and therefore the learned AO should be directed to delete the said addition, while computing the total income.
3. that the learned CIT(A) has erred in law and facts by confirming the disallowances of interest of Rs.1,03,78,302/- on the amount of the addition made u/s 68 of the Act and therefore the learned AO should be directed not to disallow the said interest, while computing the total income.
4. The facts of the issue, in brief, are that the assessee, an individual, the source of income being salary, business and income from other sources, furnished his return of income for the assessment year under consideration. The assessment was originally concluded after due scrutinization u/s 143(3) of the Act on 31.3.2000 on a total income of Rs.82.810/-. The assessment was, however, reopened by issuance of a Notice u/s 147 of the Act after recording reasons for the same on 29.3.2004. The stand of the Revenue was objected to by the assessee vide his communications dated: 26.4.2004 and again on 18.5.2004. The AO, had, however, rejected the assessee's objection vide his order dated 3.12.2004 for the reasons recorded therein. The Hon'ble jurisdictional High Court, on the assessee's Civil Application No.307 of 2005 passed an interim order dated 1.3.2005 allowing the enquiry/assessment proceedings, however, restricted the Revenue that the assessment order should not be served. The interim order was, subsequently, vacated by 3 ITA Nos. 2382, 2188 & 2371-Ahd-2009 the Hon'ble Court on 23.1.2008, enabling the Revenue to serve the assessment order dated 31.3.2005 on the assessee.
4.1. The reasons for reopening the assessment of the assessee were 'that on receipt of information that the appellant and his two brothers, namely, Rakesh Mardia and Rajiv Mardia had introduced loans in the AY under challenge which were actually arranged by paying cash and obtaining cheques in lieu from various parties. Interest was also credited (but not paid) in the name of those parties. The AO had observed that neither the balance sheet was furnished nor produced the relevant books of account/bank details. On enquiries conducted at Mumbai, it was noticed that the said creditor firm/companies pertained to a group known as 'Khandhar group'. Action u/s 132 of the Act was conducted on this group in 1991 and consequently, this group was found to be hawala operators and the firms of this group were treated even in their assessments for the AY 1997-98 as such. Accordingly, the AO came to the conclusion that the loans shown from such parties/firms were non-
genuine. Since no principal amount and interest thereon was returned and no action for recovery of their loans/interest was taken even by the alleged creditor firms, the AO felt that the requisite ingredients of s.68 of the Act were floated. Thus, the AO came to a conclusion that he had reason to believe that income had escaped assessment'.
4.2. In his impugned order under consideration, the AO had pointed out that the creditors were not available at the given addresses in Mumbai and the communications sent through RPAD were returned un-served with the remarks 'not known' which was appraised to the assessee, for which, the assessee vide his letter dt.23.3.05 contended that complete details of the depositors had been furnished during the scrutiny 4 ITA Nos. 2382, 2188 & 2371-Ahd-2009 proceedings along with the balance sheet and bank details as the deposits had been received through a/c payee cheques. It was, further, contended that the loan/interest thereon could not be returned fully/partially as he had suffered heavy losses in share trading and that decrees have been issued against him by the Debt Recovery Tribunal/HSBC Bank etc., and that there was no evidence that the cheques for the loan amounts had been obtained as a quid pro by paying equivalent cash amounts in lieu; and that in the absence of such evidence/nexus, the reopening of the assessment was not justified, particularly, no opportunity had been provided for cross-examination. With regard to the AO's stand that the statement/disclosure of one Shri S.M.Khandhar wherein he had offered for taxation the peak of the amounts appearing in his bank statement and to closure of all such bank accounts, though those bank accounts were not closed as promised, but, were continuously used for hawala operations even beyond the AY 1997-98 and, thus, implying that the loans shown received by the assessee had flown out of such tainted bank accounts, the assessee vide reply dated 30.3.2005 briefly stated that the statement of Shri Khandhar was not relevant and there was no evidence to show that the assessee had paid cash and introduced bogus loan.
4.3. The reply of the assessee dated 23.3.2005 before the ld. A.O. reads as under:
"(5.01 of the asst. order)..........................................
(1) My assessment for the year under consideration was a scrutiny assessment u/s 143(3) of the Income-tax Act, and during the course of assessment full details relating to depositors were furnished and the said deposits were accepted as explained u/s 68 of the Act. Further, I had submitted my balance sheet and also produced my books of accounts and bank passbook/statements for verification. All these deposits have been accepted through 5 ITA Nos. 2382, 2188 & 2371-Ahd-2009 account payee cheques and all the depositors are assessed to income-tax. These are undisputed facts. And thus I had fulfilled my onus long ago in the regular assessment u/s 143(3) of the Income-tax Act and, therefore, no onus can be shifted on me.
(2) I could not repay creditors due to my day-to-day deteriorating financial position because of heavy losses and substantial reduction in the value of shares held by me. Further, the Hon'ble Mumbai Debt Recovery Tribunal has issued a decree personally against me as the Chairman of M/s. Amar Dye-Chem Limited and Hongkong & Sanghai Banking Corporation Ltd is also holding a decree against me as the director and personal guarantor for loans granted to Mardia Steel Limited. Further, I am not able to pay my dues since last several years and the same is evident from my assessment records also, and no adverse inference on this count can be taken on account of my inability to repay, and therefore, non-payment of the loan cannot be the reason for reassessment;
(3) With your letter, your honour have enclosed assessment orders of few parties including those parties whose assessment orders were already given along with reasons recorded. However, there is no single evidence given by your honour even at this reassessment stage with the help of which you can even reasonably hold, much less prove that I have paid cash and introduced bogus loans in my books of accounts. There is nothing in the letter and its enclosures sent by you to show that the loans are bogus loans. You have further not given any proof or evidence collected, received or recorded by you which proves or even give a whisper to think that I have paid any cash money or have done any cash transaction. The reason for a formation of the belief must have a rational connection with or relevant bearing on the formation of the belief. Rational connection postulates that there must be a direct nexus or live link between the material coming to the notice and formation of belief that there has been escapement of income of the assessee because of his failure to disclose fully and truly all material facts. It is not any and every material, howsoever vague and indefinite or distant, remote and farfetched which would warrant the formation of the belief relating to escapement of the income of the assessee from assessment. In any event, the link given by you do not provide any basis for your action of reopening and continuance of this reassessment proceeding. Hence, the continuance of this reassessment proceeding is totally illegal and not permitted in law. Therefore, I 6 ITA Nos. 2382, 2188 & 2371-Ahd-2009 request you to drop this illegal proceeding, and not to take any action which is not legal.
(4) Without prejudice to above, if your good office rely on any inquiry, admission directly against me, please give me the copies of such statement and allow me to cross examine such person(s).
Till this date you have not given me any material which gives any type of admission directly or indirectly against me. Therefore, there is no reason for you to continue with this reassessment proceedings, hence, the same is illegal and to be dropped forthwith.
(5) At the cost of repetition, I firmly deny that I have done any cash transactions as alleged. However, from my eight years' experience of my weak financial position, I can say that the impugned Tax Evasion petition which is the main base of this whole reassessment proceedings, is a fictitious and malafide petition by someone to take revenge on me and I have strong apprehension that this Tax Evasion Petition must be from some anonymous unknown source. If this is the truth then and on considering the fact that nothing has come to light as alleged in this Tax Evasion Petition, I humbly and respectfully request you to kindly drop this reassessment proceedings to give me justice which will help me to avoid the costly unwarranted litigation. As my financial position is very weak, it is difficult for me to pay the legal fees, therefore, I once again I request you to kindly drop the totally illegal proceeding against me....."
4.4 Rebutting the assessee's contentions and also taking refuge in the rulings of the Hon'ble Apex Court in the cases of (i) CIT v. Durga Prasad More reported in 82 ITR 540 (SC); and (ii) Sri krishna (P) Ltd v. ITO & Others reported in 221 ITR 538 (SC), the AO took a view that the alleged creditors shown by the assessee tallied with the bank accounts maintained by Shri Khandhar; that the persons in whose names the bank accounts operated by Shri Khandhar had not filed returns of income (except for 9 such persons); that even in case of such persons (whose returns had been filed) the loans and advances shown by them in the AY 1997-98 were less than the cumulative total of the loans given to the 7 ITA Nos. 2382, 2188 & 2371-Ahd-2009 appellant and his two brothers; that the veracity and genuineness of the transactions relating to loans were not established and that the principal/interest was not paid and no efforts were made by the alleged creditors for the recovery. It was the stand of the ld. AO that the outcome of the enquiries, non-furnishing of requisite details such as current addresses of the parties, relevant bank details, copies of balance sheets, the confessional statement/action of Shri Khandhar of his hawala operations by floating several bank accounts/name lenders etc., and that the assessee had not disclosed material facts fully and truly during the original proceedings and also had not established the genuineness of the transactions even in the reopened proceedings and, thus, the burden of proof u/s 68 of the Act was not discharged by the assessee. The AO therefore added the amount of Rs.10.4 crores as unexplained cash credit and disallowed interest debited thereon i.e., Rs.1,03,78,302/-.
5. The assessee carried the matter before the ld. CIT(A). The submissions of the assessee before the ld. CIT (A) are as under:
"9. Before me, it was contended the reopening of the assessment was unjustified. All details/confirmations in respect of the creditors had been filed in the original assessment proceedings. The non-verification of confirmations (of the creditors), the statement of Mr. Khandhar were not valid reasons for reopening of the assessment. The name of the appellant had not figured in any hawala transactions. The loan amounts were genuinely received and the tax recovery officer of the creditor(s) had sent notices u/s 226(3) to the appellant. The lenders were treated as Hawala operators in the year 1990-91 whereas the borrowings of the appellant were in AY 1997-98. All the credits were received through A/c payee cheques. Non-compliance of notice(s) u/s 131 by the creditors could not be held against the appellant. Similarly the repayments could not be made due to financial crisis. There was no evidence of cheque 'badli' and none was found even in the search (u/s 132 of the Act) on 9.1.1997, at the premises of the appellant. Further cross- examination was not provided to the appellant. If the name of 8 ITA Nos. 2382, 2188 & 2371-Ahd-2009 the appellant did not appear in the balance sheet of some of these creditors, it could not be the basis for the addition u/s 68 of the Act. The appellant also cited several decisions and quoted from these decisions, particularly from those reported in 158 Taxman 440 (Delhi), 245 ITR 160 (MP), 59 ITR 632 (Assam), 224 ITR 180 (P & H), 264 ITR 254 (Gauhati), 76 TTJ 521 (Ahd), 256 ITR 360 (Guj), 254 ITR 275, 223 ITR 11 (Guj) etc. The reopening of the assessment and the additions / disallowances, made were so assailed."
5.1. The ld. CIT (A), however, did not accept the contentions of the assessee and dismissed the appeal of the assessee. The findings of the ld. CIT (A) are extracted as under:
"10. The contentions/ details on record were carefully considered. It is seen that the AO had recorded (and communicated) detailed reasons for reopening the assessment u/s 147/148 of the I.T. Act. The notice u/s 148 was issued/served within the statutory period. The AO has detailed the nature/extent of information constituting his reasons for reopening the assessment. The objections of the appellant had been dealt with vide order 3.12.2004 in line with ratio of the decision of the Hon'ble SC in the case of GKN Driveshafts (259 ITR 19). Hence, there was no infirmity in his action u/s 147/148 of the Act. As such the related ground of appeal, is devoid of merit and is rejected.
11. In respect of the other common ground of appeal, agitating the addition u/s 68 and disallowance of interest (unpaid), it was broadly argued, with support of a number of decisions, that the name, address, confirmation(s) of the creditors had been furnished. Their lack of response to notice u/s 133(6)/131 can't be held against the assessee. Their creditworthiness was satisfactorily explained but their source(s) were not required to be explained by the assessee. The loans were received by a/c payee cheques and so the rejection by the AO, was not on cogent grounds. The lenders were treated as hawala operators in the year 1990-91, which is unrelated and for removed from the borrowings, made from them in the year 1997-98. The non- repayment of principal amount of loan and interest was due to severe undisputed financial crisis, still unresolved. There is no evidence that loans received by cheques, were arranged by 9 ITA Nos. 2382, 2188 & 2371-Ahd-2009 paying cash in lieu as quid pro quo. Even if the name of the appellant didn't figure in the balance sheet of some of the creditors, it could be due to various reasons and so was of no consequence. Besides, the ratio of the decisions cited was applicable and so the addition u/s 68 of the Act and disallowance of interest is unjustified.
12. On careful consideration of the facts and details on second and the decisions cited, it is seen that the arguments of the appellant are flawed. In the decision reported in 159 ITR 78 (SC), the summons u/s 131 of the Act were received by the creditors but were not complied with. Their whereabouts/address was not in doubt, unlike the facts in the present case. In decision reported in 212 ITR 199 (Orissa), the AO had not summoned the creditors to adduce further evidence.
In various other decision cited by the appellant i.e., reported in 151 ITR 150, 204 ITR 285, 223 ITR 11 and 256 ITR 360 (Gujarat), the lenders were all assessed to tax as indicated by their confirmations and PAN which was not so in the present case. The AO has pointed out that the assessment records of only 9 of such creditors could be traced out (para 6 of the assessment order) and even in their case, the name of the assessee was not found in their balance sheet (para 8.01 of the order). In the case of Metachem Industries (248 ITR 160 (MP) the facts indicate that the creditors were produced and explanation given was found to be satisfactory. But no creditor was produced, for examination in the case of the appellant. In the case of Rohini Builders 256 ITR 360 (Guj), the loans were received and also repaid by a/c payee cheques along with interest. The interest paid was also not disallowed. This, however is not the situation in the case of the appellant. Briefly stated, the decisions cited by the appellant, don't advance the case of the appellant being on different facts/circumstances. On the other hand, the ratio of the decision in case of Durga Prasad 82 ITR 540 quoted by the AO is relevant. In case of the appellant also, the explanation given does not accord with human probabilities. The appellant and his brothers have shown loans from a number of entities, most of which were under the control of an admitted hawala operations since long.
13. The so called creditors in case of the appellant and his brothers were mostly the same. The amounts shown received by these brothers were huge, and sometimes identical.
10ITA Nos. 2382, 2188 & 2371-Ahd-2009 Moreover the period during which these amounts were shown received by these brothers was almost the same i.e., between August to September 1996 and in several instances on the same days. Surprisingly loans were shown received from a party in several installments on the same date, in case of the appellant/ his brothers. This feature of staggered receipt of loan on the same day is not explained. For an instance, the appellant is shown having received loan of Rs.10 lacs on 7.8.96 and another loan of Rs.10 lacs on 7.8.96 itself from the same party namely 'Raj Electrical' followed by yet another loan of Rs.10 lacs on 9.8.96. such instances of staggered trance of loans abounds in case of the appellant and his brothers. Also the same parties are shown having given loans of huge amounts to the appellant and his brothers(s) on the same date, in many instances. Strangely none of the recipients have repaid these stated loans, fully or in part, even in one case. Similarly, though the appellant and his brothers have credited interest on these stated loans, none of them have paid, in any case, fully or partially. None of the stated creditors have initiated recovery proceedings despite the magnitude of the stated loan amounts despite the lapse of considerable time. A detailed study of the periodicity, amount, manner etc., of the stated loans of the appellant and his brothers as also of the crediting of interest its non payment the simultaneous taking of stated loans and of suffering financial crisis etc., leads to the inevitable conclusion that these were all contrived manipulations of the appellant and his brothers. The facts and circumstances are indicative of sham transactions of the appellant with the hawala operator(s) of Khandhar group who had continued this activity despite their confession and promise to cease it. The Hon'ble Supreme Court in its decision reported in AIR 1974 SC 859 has held that 'Revenue not required to prove its case with mathematical, demonstrable degree for all. In human affairs, absolute certainly is a myth and proof of exactness - a farce. The law accepts probability as a substitute in this work-a day world. The law doesn't require the department to prove the impossible."
In the decision reported in 24 ITR 506 (SC) it was held that AO can ignore form where the transfer is make believe, artificial or colourable or where steps taken arriving at a particular result has no real purpose other than to avoid tax."
11ITA Nos. 2382, 2188 & 2371-Ahd-2009 Similarly in 214 ITR 801 (SC) it was held that 'if on test of human probabilities, a transaction is held to be not genuine, it is reasonable to presume, it is assessee's income.' In the decision reported in 235 ITR 785 - It was held that 'document evidencing an apparent situation not enough' if they don't record a real transaction but are made to cover up - can be inferred as unreal.
In the event, the AO was justified in holding that the requisites u/s 68 of the Act were not met with by the appellant. The genuineness of the related transactions itself remains unproved. Hence, the action of the AO in making the addition (s) u/s 68 and disallowance of stated interest is justified and is upheld. The related ground of appeal is rejected.
14. The next ground of appeal contesting the charging of interest is not entertained and is rejected being justified and consequential in nature.
15. In the result, the appeal is dismissed."
6. During the course of hearing, the ld. A R reiterated more or less what was portrayed before the first appellate authority. In furtherance, it was submitted in the written submission presented during the course of earlier hearing dated 8.10.2009 that:
(i) the assessment has been completed u/s 143(3) of the Act and the notice u/s 148 of the Act has been issued on 29/3/2004 i.e., after four years from the end of relevant assessment year. During the course of assessment, the appellant has disclosed fully and truly all material facts by filing confirmation of the new depositors and interest payment details by producing books of accounts and bank statement. The said fact is evident from the questionnaire issued by the assessing officer and my reply as mentioned at para 2 of the impugned assessment order and the original assessment 12 ITA Nos. 2382, 2188 & 2371-Ahd-2009 order also. On reading notice u/s 133(6), it is evident that the department has copy of balance sheet as on 31.3.1997;
(ii) there was no specific information with the AO for the reopening of the completed assessment and he had taken recourse of s.133(6) and inquiries were made at Mumbai. In other words, the AO was probing into the matter for assuming the jurisdiction of reassessment;
(iii) the reasons recorded at paragraph 5 suggests that the balance sheets as on 31.3.1997 and 31.3.1998 were on the records or otherwise the AO cannot determine whether the amount of interest has been paid or not; that non-payment of interest and principal amount cannot be the ground for the reassessment for the addition u/s 68 of the Act;
(iv) the AO did not have any authentic evidence of admission or the allegation for the information received or otherwise the AO would have specifically stated in the reasons recorded, but, he had not stated that what was the specific information and from whom had been received and in which proceedings it has been received;
(v) the information gathered by the AO was very old and cannot be relevant as the proceedings u/s 132 of the Act were conducted in Khandhar group of cases during 1991 whereas the assessment year under consideration is of 1997-98 and no man can be a hawala operator for ever, in particular when there were proceedings u/s 132 of the Act; and that it was only assumption of the Department for hawala operator on the basis of proceedings u/s 132 of the Act during the year 1991;
13ITA Nos. 2382, 2188 & 2371-Ahd-2009
(vi) the observation of the AO that the name of the appellant was not found in the balance sheet of creditor cannot be a ground to use the same against the appellant as the appellant had no control over the method of maintaining their books of account; that it was possible that they might have net out their loans taken and the loans advanced or for any other reasons, they have not mentioned my name in their balance sheets;
(vii) that the notice of the TRO u/s 226(3) of the Act along with the list showing the names of the lenders, dates and amounts given by the creditors [source : P 14 - 18 of assessee's written submission] confirms that the lender had advanced the amounts and it was on the record of the Department and, therefore, the reasons recorded by the AO was against the facts of the case;
(viii) in paragraph 9, the AO unambiguously conceded that the appellant might have filed confirmation with PANs at the relevant time, but, there was nothing on record that the genuineness of the transaction was verified. In this regard, it was asserted that the non-verification of such details by the Revenue cannot be attributed as a failure on the part of the appellant;
(ix) no incriminating documents were found during the proceedings u/s 132 of the Act at the appellant's premises on 9.1.1997 as those loans have been taken before the search date; that no incriminating documents/statements/admission during any proceedings against the lenders were found after the date of the granting loans to the appellant, but, only on the basis of the proceedings u/s 132 of the Act, the Revenue has been treating the 14 ITA Nos. 2382, 2188 & 2371-Ahd-2009 said loan as non-genuine and, thus, it was only suspicion and presumption of the AO but, NOT a reasoned belief of the AO;
Relies on the findings in the cases of -
(i) Durga Prashad Goyal v. ITO 98 ITD 227 (SB) ITAT Amritsar;
(ii) Lakhmani Mewal Das (1976) 103 ITR 437 (SC)
(iii) Nitin P Shah v. DCIT 276 ITR 414 (Guj);
(iv) Shankarlal Nagji & Co. and Others v. ITO 20 DTR 116 (Guj)&
(v) Assam Tea Co v. ITO 92 ITD (Assam)(SB)
(x) the assessee had produced books of account, bank passbook/statements, confirmation from the parties before the AO and that all these deposits have been accepted through account payee cheques and all the depositors are being assessed to income-tax; that neither cross examination was allowed nor the statement of evidence was given which was against the principles of natural justice;
(xi) the assessee could not able to repay the creditors' dues due to day to day deteriorating of his financial position because of heavy losses in the business and substantial reduction in the value of shares held; that the assessee was not able to repay his dues since last several years which was evident from the assessment records and no adverse inference on this count can be taken
(xii) assessee had produced books of account and bank pass book/statements, confirmation from the parties were also furnished to AO. All these deposits have been accepted through account payee cheques and all the depositors are assessed to income-tax.
15ITA Nos. 2382, 2188 & 2371-Ahd-2009
(xiii) No cross examination was allowed or statement of evidence was given and the said course of action is against the principal of natural justice.
Refer para 5 of page No.5 of the assessment.
(xiv) the assessee could not repay creditors due to his day to day deteriorating financial position because of heavy losses and substantial reduction in the value of shares held by him. Further, assessee is not able to pay his dues since last several years which is evident from the assessment records also, and no adverse inference on this account can be taken. Therefore, the theory of human probability support the case of the appellant and therefore non repayment of the amount cannot be used against the appellant for the additions u/s 68. The said reasons for the non payment of the amount to the lenders has been given before the lower authorities (Refer para 5 of page No.3 of CIT )
(xv) AO's contention that name of the assessee was not found in the balance sheets of creditors cannot be adduced against the assessee as the assessee cannot control their method of maintaining their books of accounts. It is possible that they might have net out their loans taken and loans advanced or for any other reasons they have not mentioned in the balance sheet. Further, notice u/s 226(3) of the Act was issued by the TRO of the creditors confirm the fact that the lender had advanced the amount (Refer para 9 of CIT (A) order).
(xvi) No proceedings under section 269SS and 269T of the Act has been initiated against persons.
16ITA Nos. 2382, 2188 & 2371-Ahd-2009 (xvii) Contentions of where-about of the creditors is incorrect as the creditors are income-tax assessees and it coming out of the notice of TRO and same addresses are there in assessment order. (xviii) in view of the above submission, the additions made u/s 68 of the Act and interest thereon is bad in law and should be deleted in full.
6.1. The learned AR stated that assessment year under appeal is 1997- 98 and the original assessment was completed u/s 143(3) of the IT Act on 31-03-2000 on the matter in issue and genuineness of the cash credits in question was accepted by the AO after scrutiny and due enquiry. The assessment was however, reopened on 29-03-2004. At the original assessment stage, the AO issued query letter dated 28-02-2000 (written submission submitted on 08.10.2009 page-2) asking for furnishing of confirmations from the depositors, details of banker, address, Permanent Account Number, Circle and Ward of the depositors. The assessee filed the detailed reply before the AO dated 14-03-2000 (written submission submitted on 08.10.2009 page-7) giving complete details of the depositors/ cash creditors along with their confirmations in original along with their addresses, Permanent Account Number/ GIR number and details regarding Ward/Circle where the creditors were assessed to tax. All details and confirmations were filed along with this reply and the AO after due scrutiny of the confirmations records and details submitted by the assessee, accepted the genuineness of claim of the creditors. Since the assessee disclosed salary income, share of profit, interest from partnership and capital gains, therefore, the assessee was not required to file balance sheet along with the return of income. The AO in the reasons for reopening of the assessment wrongly mentioned that no verification is done by the AO. Since the assessee filed complete details 17 ITA Nos. 2382, 2188 & 2371-Ahd-2009 before the AO at the original assessment stage which were verified by the AO and all relevant particulars were disclosed at the original assessment stage on the matter in issue along with cash credit, therefore, there was no failure on the part of the assessee to disclose fully and truly all material facts necessary for assessment in the assessment year under appeal. The assessee objected to the reassessment proceedings but the authorities below have not appreciated the facts and have not considered the issue in details. He has relied upon the decision of the Hon'ble Gujarat High Court in the case of CWT Vs Jawaharbhai D. Patel, 225 ITR 582 (Guj.), in the case of Calcutta Discount Company Ltd. Vs ITO, 41 ITR 191 (SC), in the case of Parashuram Pottery Works Co. Ltd. Vs ITO, 106 ITR 1 (SC), in the case of Vareli Weaves Pvt. Ltd. Vs DCIT, 240 ITR 77 (Guj) and in the case of Avani Corporation Vs ITO, 238 ITR 407. He has further submitted that the assessee filed complete details at the assessment stage which have been accepted as genuine credits; therefore, even no addition should have been made against the assessee. He has relied upon the decision in the case of CIT Vs Orissa Corporation, 159 ITR 78 (SC), in the case of CIT Vs Pragati Co-operative Bank Ltd., 278 ITR 170 (Guj and in the case of Murlidhar Lahorimal Vs CIT, 280 ITR 512 (Guj.). Statement of Kandahar was recorded after 6 years which was withdrawn, therefore, is not relevant to the matter. The TRO issued notice u/s 226 (3) of the IT Act through which the TRO asked not to pay to the debtors the amount in question would show that the department accepted genuineness of the credits in the matter. He has submitted that credits were obtained through banking channel; therefore, addition even on merit was unjustified. In conclusion, it was argued that the whole exercise has been enacted by the Revenue purely on surmise, fantasy and hypothesis on the part of the AO and that the reasons recorded not valid which were 18 ITA Nos. 2382, 2188 & 2371-Ahd-2009 quite contrary to the actual facts and legal position. It was, therefore, pleaded that the reassessment proceedings require to be annulled as they were bad in law and without jurisdiction.
6.2. On the other hand, the ld. D R came up with the arguments that the assessment was reopened mainly on the basis of information received in the form of Tax Evasion Petition after completion of the assessments alleging that the assessee and his two brothers have introduced bogus loans in their books of accounts during the assessment year under consideration by paying cash and obtained cheques from the parties. It was, further, submitted in the written submission dated 18.12.2009 that -
(i) Before issuance of notice u/s 148 of the Act, the AO had made necessary enquiries from Mumbai to ascertain the veracity of information and was able to trace the income-tax records of six concerns, viz., Raj Enterprises, Shekhaka & Co., Prabhavee, Raj Electricals, HPS International and Raj Engineers from whom the assessee had received loans; that on perusal of balance-sheets of these concerns reveals that the total loans and advances advanced by them were far less compared to the loans received by the assessee and his brothers and the details of loans/advances made by those concerns and loans received by the assessee and his two brothers are incorporated in the reasons recorded by the AO;
(ii) the AO had reached to a conclusion that the assessee had failed to disclose material facts fully and truly necessary for the following reasons:
(a) the assessee had not filed the balance-sheet along with the return of income or during the assessment proceedings;
(b) the assessee had not produced books of account as required by the AO's letter dt.9.6.2003;
(c) the assessee had not furnished the details of bank accounts through which those deposits were received, the details of bank accounts through which interest had been paid to the sundry creditors as required by the AO's letter of 3.12.2003;19
ITA Nos. 2382, 2188 & 2371-Ahd-2009
(d) on perusal of the income-tax records of the creditors reveal that those persons were not having enough sources to make huge advances received by the appellant;
(e) although the interests were credited in the accounts of those creditors, however, no interest was paid till date;
(f) the reasons recorded further reveal that the appellant had received loans of Rs.10.4 crores from 33 persons and also credited interest to those persons to the tune of Rs.1.03 crores, that though the appellant vide his letter of 14/3/2000 claimed that statements of accounts of new deposits/unsecured loans in original duly confirmed by them along with their addresses, PANs/GIR Nos. and the details of Wards/Circles where those persons assessed were furnished, the records reveal that no such evidences were furnished by the assessee;
(g) that since the assessee had not furnished the balance-sheet and supporting evidences to prove the identity, genuineness and credit worthiness of the creditors, the AO was justified to conclude that the appellant had failed to disclose fully and truly the material facts necessary for the assessment for the AY under dispute and, thus, the requirements of proviso to s. 147 of the Act were fulfilled and the AO had rightly re-opened the assessment;
(h) that s.147(a) of the Act casts an obligation upon an assessee not merely of disclosing fully and truly all material facts, but, also of disclosing them truly; that the appellant was under obligation not to mislead the AO by disclosing certain things which do not represent true facts; that if the AO finds reason to believe that escapement of income has been caused by the fact that the assessee had not disclosed the material facts truly that would give him jurisdiction to reopen the assessment; and that an assessment can be reopened even after the AO had treated certain transactions as genuine on the basis of the documents disclosed, but later on and even after the closure of assessment, he finds that those documents were not genuine.
Relied on the case laws:
(i) Grahams Trading Co. (India) Ltd. V. ITO (1976) 105 ITR 127 (Cal);20
ITA Nos. 2382, 2188 & 2371-Ahd-2009
(ii) Hazi Amir Mohd. Mir Ahmed v. CIT (1977) 110 ITR 630 (P & H);
(iii) ITO v. Mahadeo Lal Tulsian (1977) 110 ITR 786 (Cal);
(iv) ITO v. Mahadeo Lal Tulsyam (1978) 111 ITR 25 (Cal);
(v) Nawbganj Sugar Mills Co. Ltd v. CIT (1980) 123 ITR 287 (Del);
(vi) Kirpa Ram Ramji Dass v. ITO (1982) 135 ITR 68 (P & H);
(vii) CIT v. Ess Ess Kay Eng. Co. P. Ltd. (1982) 137 ITR 446 (P & H); &
(viii) General Mrigendra Shum Sher Jung Bahadur Rana v.
ITO (1980) 123 ITR 329 (Del); &
(ix) Renusagar Power Co. Ltd v. ITO (1979) 117 ITR 719 (All)
(i) that the onus was on the appellant to disclose material facts fully and truly and on record that the appellant had not furnished balance sheet either along with the return or during the assessment proceedings and, thus, the appellant had not disclosed fully and truly the receipts of fraudulent loans. Even during the assessment proceedings, the appellant had claimed to have filed confirmation from the creditors; however, the same was not filed. The scrutiny of those creditors during the re- assessment proceedings reveals that those transactions were structured and engineered to introduce bogus loans in the books of the appellant, however, these facts were not disclosed fully and truly either during the assessment or reassessment proceedings;
(k) Apart from strongly relying on the assessment order as well as the findings of the Ld. CIT (A), the following arguments are put forward by the Ld. D R that- (written submission dated 08.11.2011);
- as against the contention of reopening on 29.3.2004 i.e., at the fag end of the limitation date, it is evident from the reasons recorded for reopening by the AO that after the completion of original assessment in all the three cases, he was in receipt of specific information in the form of Tax Evasion Petition wherein the allegation was made that all the three assessees have introduced bogus loans in their books of accounts during the AY 1997-98 by paying cash and obtaining cheques from the parties. The AO after perusal of respective assessees' case records found that the assessee had not filed any balance sheet. He further observed that 21 ITA Nos. 2382, 2188 & 2371-Ahd-2009 from the details of interest payment as claimed by the assessee during that period, these parties are appearing- to whom interest was credited. Having established the credibility of information, he granted an opportunity to the assessee by calling for details related to the issue vide his letter dt.9.6.2003 u/s 133(6) of the Act. The assessee's reply dt.1.9.2003 in response to the query showed that the appellant's reply was not satisfactory;
- that the AO made independent inquiry based on the information and found that the firms/companies pertain to a group known as 'Khandhar Group' of Mumbai and that it was ascertained that during the course of search and seizure operation by the Department on this group in 1991, these firms/ concerns were found to be involved in hawala transaction i.e., providing accommodation entries to various parties in the form of loan and advances by accepting cash for the respective amount of cheques and charging their commission for such entry; that it was also ascertained from the case records of some of such parties that the total loans and advances made by those parties during the course of AY 1997-98 were less than the amount shown by all the three appellants in aggregate. Therefore, it was submitted, the AO had reason for strong belief that the loan shown by the appellant from the parties were not genuine and the information therefore was credible. This belief was further strengthened with the fact that interest credited and claimed by the appellant for AY 1997-98 was not paid by the appellant till date, not only the interest even the principal amount was not paid till the date of recording reason and interestingly no legal action was initiated by any of the creditor for recovery of principal and interest.
- that the AO accepted that the original assessment record has a copy of letter (dated 14.3.2000) wherein it was mentioned that copies of contra account, confirmation etc. were filed by all the three appellants. However, AO recorded his satisfaction that there is nothing or (sic) on record to show that the genuineness of the transaction was verified. On account of this satisfaction, he came to the conclusion that 'because of non-disclosure of proper details, genuineness of loan transactions remain to be unverified within the meaning of sec.68 of the Act, resulting into under-assessment of income'. He therefore specified the sum of loan so received by the appellant at Rs.11,43,78,302/- including interest credited thereon as income escaping the assessment.
22ITA Nos. 2382, 2188 & 2371-Ahd-2009
- that as verifiable from the original assessment case records in all the three cases that the AO vide notices and questionnaire except in the case of present assessee did not ask from other two assessees to file such contra account, confirmation, addresses and PAN details; that considering the time barring dated 31.3.2000 and subsequent show-cause related to major issue involved about capital gain clearly reflects that the AO had not applied his on this submission and had called for any further verification/evidences and simply overlooked the reply. The assessment order dated31.3.2000 can be treated as passed in haste by the AO overlooking this issue; that the appellant if so submitted copies of contra account and confirmation with addresses and PAN of all these parties with a short notice from the AO i.e., notice was issued to submit such detail only in the case of the assessee on 28.2.2000, he could have done the same exercise when given opportunity before reassessment because both principal amount as well as interest thereon was due on that date also. No reason for not submitting such detail was given by the appellant. The circumstantial evidence shows that in fact except the letter dated 14.3.2000 appellant has not submitted any of such confirmation and since this issue was not the main issue of the scrutiny assessment the AO in haste overlooked such non-compliance;
- that the original assessment proceedings were completed on 31.3.2000 and initial letter to initiate re-assessment proceedings were in the month of June, 2003; that on both the dates the appellant's case file was with one AO and when the appellant asked for the copies from the case record, it was not insisted upon AO to give the copies of such confirmation since no material time lapsed between 31.3.2000 and June 2003. in fact, no such details were filed by the appellant and this was known to the appellant and, therefore, he remained contended with the letter dt.14.3.2000. it was only in the month of June, 2006 the cases were decentralized and transfer of files took place; &
- that on account of failure on the part of the appellant to disclose fully and truly all the material fact before the AO on this issue, the income has escaped the assessment.
(l) With regard to the appellant's contention that he was under no obligation to file the balance-sheet since he had no proprietary concern i.e., business or profession and a reference was made to s.44AA of the Act, the Ld. D R's submission was that -
23ITA Nos. 2382, 2188 & 2371-Ahd-2009
i) without prejudice to the application of s.44AA of the Act for maintenance of accounts, it is an admitted fact that the appellant has maintained books of accounts which were produced before the AO. In whatever form such books of accounts were maintained, it requires to be closed at the year end and final accounts as appropriately required showing profit/income with statement of assets and liabilities are drawn. The appellant is from a reputed and rich family group i.e., Mardia Group since many years and liability of wealth-tax in their cases are also required to prepare such balance sheet or assets and liability statement;
ii) S.44AA(2)(i) of the Act deals with the maintenance of books of accounts of existing businessman before this section being amended for monitory limit [s.44AA(2)] was brought into the Act w.e.f. 1.4.1988. The limit of income from business or profession as per the Finance Act 1992 w.e.f. 1.4.1993 and explained in Circular No.636 dt.31.8.1992 was revised from Rs.25000 to Rs.40000 only). To further elaborate, all those businessmen whose income from business or profession exceeds certain monitory limit they were required to continue maintaining the books of accounts. The statement of income of the appellant shows income under the head business or profession and also maintaining books of account before this amendment and, therefore, the provisions of s. 44AA(2)(i) of the Act are applicable to the appellant. In fact, as per the provisions of the Act, the appellant was entitled to claim certain expenditure out of the income so shown under the head 'income from business or profession';
(m) in respect of the appellant's contention that all the deposits were genuine and assessed to tax and that by filing contra account, confirmation and their addresses with PAN/GIRs in the original assessment were sufficient to discharge the onus of the appellant, it was averred by the Revenue that -
without prejudice to the assessee's contention of submitting so called confirmation from depositor (neither available on case record nor any details or evidences of such confirmation filed later on by the appellant),after the finding of the fact by the AO that such deposits/loans were given by the parties/concerns who were found to be indulged in giving accommodation entry i.e., hawala business and also the appellant was provided with the outcome of 24 ITA Nos. 2382, 2188 & 2371-Ahd-2009 independent investigation carried on by the AO in respect of those parties on the basis of information received through Tax Evasion Petition along with copies of assessment orders of some of such parties and the main person, the onus now shifts on the assessee to adduce evidences to prove genuineness of transaction. As held by various courts of law that u/s 68 of the Act, the assessee has to prove the identity, capacity and genuinity of the transaction. If any one of these three ingredients are missing, then the provisions of s.68 of the Act are attracted. Mere filing of confirmatory letters or furnishing of particulars or even contention that payment was received by account payee cheque is not sacrosanct nor can it make non-genuine transaction genuine.
(n) With regard to the appellant's contention that he was served with notice u/s 226(3) of the Act in respect of tax liability related to Shri Surendra M Khandhar of Khandhar Group, it was contended by the Ld. D R that -
- the AO of Shri Surendra M Khandhar assessed the peak credit of all the 110 bank accounts operated through various firms/concerns for hawala operation as found during the course of search on Khandhar group and admission made by Shri S.M. Khandhar. It was in this respect the appellant's name appearing at respective places as debtor of the respective firm/concern from where he had taken loan. The AO is empowered to recover the tax liability as per the procedure laid down for recovery. However, on other side neither Shri S.M. Khandhar accepted such liability nor appellant admitted that loan and deposits were from him. The appellant on the contrary still treat the firms and concerns of Khandhar group as creditor as the principal amount with interest is still outstanding on one hand and has not paid any amount against the notice u/s 226(3) of the Act.. it is therefore this argument is contradictory to support the contention of the appellant that the loan so received by him was a genuine transaction. It is worthwhile to note that the assessment in the case of firm/concern as appearing in the reasons recorded were assessed for commission income for providing accommodation entry. It was, therefore, their capacity was treated as dubious. Further, as highlighted by the AO, the fact that the records of such firms/concerns show the loans and advances to various parties in aggregate was less than the amounts so shown by the appellant being received from such firms/concerns. The appellant has to furnish the reconciliation and confirmation in respect of such discrepancies with proper 25 ITA Nos. 2382, 2188 & 2371-Ahd-2009 evidences. The burden of proof to reconcile such discrepancy was on the appellant after being property confronted. In the absence of discharge of such burden, those transactions cannot be accepted as genuine transaction.
Relies on the following case laws:
(i) Kale Khan Mohammad Hanif v. CIT 50 ITR 1 (SC); &
(ii) CIT v. Kerala Roadlines Corporation 162 ITR 669 (SC) Apart from strongly relying on the assessment order as well as Ld. CIT (A)'s order in the case of respective assessee, the following arguments are put forward including the reply to the appellant's submission.
i) As against the contention of reopening on 29.3.2004 i.e., at the fag end of the limitation date it is evident from the reasons recorded for reopening by the AO that after the completion of original assessment in all the three cases, he was in receipt of specific information in the form of Tax Evasion petition (TEP) wherein the allegation was made that all the three assessees have introduced bogus loan in their books of accounts during the AY 1997-98 by paying cash and obtaining cheques from the parties as per the list marked as Exhibit 'A' (Para 2 of reasons recorded).
The AO after perusal of respective assessee's case record found that the assessee has not filed any balance sheet. He further observed that from the details of interest payment as claimed by the assessee during that period, these parties as per Exhibit 'A' are appearing. To whom interest was credited. Having established the credibility of information, he granted an opportunity to the assessee by calling for details related to the issue vide his letter as early as 9.6.2003 u/s 133(6) of the Act. The assessee's reply dated 1.9.2003 in response to this query shows that the appellant's reply was not satisfactory (para 3 of reasons recorded).
Once again the AO vide letter dated 3.12.2003 asked the assessee certain specific details but the same were not submitted (para 4, 5 of reasons recorded).
The AO made independent inquiry based on the information and found that firms/companies as per Exhibit 'A' pertain to a group known as 'Khandhar Group' of Mumbai. It was also ascertained that during the course of search and seizure operation by the 26 ITA Nos. 2382, 2188 & 2371-Ahd-2009 Department on this group in 1991, these firms/concerns were found to be involved in hawala transaction i.e., providing accommodation entries to various parties in the form of loan and advances by accepting cash for the respective amount of cheques and charging their commission for such entry (para 6 of reasons recorded).
It was also ascertained from the case records of some of such parties that total loans and advances made by those parties during the course of AY 1997-98 are less than the amount shown by all three appellant in aggregate (Exhib it 'C' to reason recorded) (Para 7 of reasons recorded). The AO therefore had reason for strong belief that the loan shown by the appellant from the parties as per Exhibit 'A' are not genuine and the information therefore was credible. This belief was further strengthened with the fact that interest credited and claimed by the appellant for AY 1997-98 was not paid by the appellant till date not only the interest even the principle amount was not paid till the date of recording reason and interestingly no legal action was initiated by any of the creditor for recovery of principal and interest (Para 8 of reasons recorded).
The AO accepted that the original assessment record has a copy of letter (dated 14.3.2000) where it is mentioned that copies of contra account, confirmation etc., were filed by all the three appellant. However, AO recorded his satisfaction that there is nothing on record to show that the genuineness of the transaction was verified. On account of this satisfaction he came to the conclusion that 'because of non disclosure of proper details, genuineness of loan transactions remains to be unverified within the meaning of s.68 of the Act resulting into under assessment of income'. He therefore specified the sum of loan so received by each appellant including the interest credited thereon in each independent reason as income escaping the assessment. This sum in three cases was as follows:
Sl.No Name Amount
1 Shri Rasiklal S Mardia Rs.11,43,78,302
2 Shri Rakesh S Mardia Rs. 8,29,81,645
3 Shri Rajiv S Mardia Rs. 2,63,95,694
(Para 9 of reasons recorded)
27
ITA Nos. 2382, 2188 & 2371-Ahd-2009
Further submission on this issue
i) As verifiable from the original assessment case records in all the three cases that the AO vide notices and questionnaire (Sr.No.10 of the key referencer) except in the case of Shri Rasiklal S Mardia did not ask from other two assessees to file such contra account, confirmation, addresses and PAN details.
ii) In all the three case records except the letter dated 14.3.2000 no such details is available. The signature on this letter is also not of regular authorized representative and different in all the three cases;
iii) Considering the time barring date of 31.3.2000 and subsequent show cause related to major issue involved about capital gain clearly reflects that the AO has not applied his mind on this submission and has called for any further verification/evidences and simply overlooked the reply. The assessment order dated 31.3.2000 can be treated as passed in haste by the AO overlooking this issue.
iv) The appellant if so submitted copies of contra account and confirmation with addresses and PAN of all these parties with a short notice from the AO i.e., notice was issued to submit such detail only in the case of Shri Rasiklal S Mardia on 28.2.2000, he could have done the same exercise when given opportunity before reassessment because both principle amount as well as interest thereon was due on that date also. No reason for not submitting such detail was given by the appellant. The circumstantial evidence shows that in fact except the letter dated 14.3.2000 appellant has not submitted any of such confirmation and since this issue was not the main issue of the scrutiny assessment the AO in haste overlooked such non compliance.
v) The original assessment proceedings were completed on 31.3.2000 and initial letter to initiate reassessment proceedings were in the month of June, 2003. On both the dates the appellant case file was with the one assessing officer i.e., the ACIT, Central Circle 2, Ahmedabad. When the appellant asked for the Xerox from the case record, it was not insisted upon AO to give copies of such confirmation since no material time lapsed between 31.3.2000 and June, 2003. In fact, no such details were filed by the appellant and this was known to the appellant and, therefore, he remained 28 ITA Nos. 2382, 2188 & 2371-Ahd-2009 contended with the letter dated 14.3.2000. it is only in the month of June, 2006, the cases were decentralized and transfer of files took place.
vi) It is therefore on account of failure of the part of the appellant to disclose 'fully and truly' 'all the material fact' before the AO on this issue, the income has escaped the assessment. Reliance is placed on the following case laws:
(i) Sri Krishna Pvt. Ltd etc v. ITO & Ors. - 135 CTR (SC) 75
(ii) Phool Chand Bajrang Lal v. ITO 203 ITR 456 (SC)
(iii) Ess Kay Engineering Co. (P) Ltd v. C IT 247 ITR 818 (SC)
(iv) CIT v. A.Raman & Co. 67 ITR 11 (SC)
(v) Indi-Aden Salt Mfg. & Trading Co. (P) Ltd v. CIT 159 ITR 624 (SC)
(vi) ITO v. Purushottam Das Bangur & Anr. 224 ITR 362 (SC)
(vii) Kalyanji Mavji & Co. v. CIT 102 ITR 287 (SC)
(viii) V.Jaganmohan Rao & Ors v. CIT 75 ITR 373 (SC)
(ix) Dishman Pharmaceuticals and Chemicals Ltd v. DCIT (OSD) -Special Civil Application Nol15304 of 2010 - unreported case of Gujarat High Court (copy supplied)
(x) AGR Investment Ltd v. ACIT 333 ITR 146 (Del)
(xi) Dalmia (P) Ltd v. CIT 202 Taxman 372 (Del)
(xii) Precot Mills Ltd v. CIT 273 ITR 347 (Mad)
(xiii) Revathy C.P.Equipments Ltd v. DCIT & Anr. 241 ITR 856 (Mad)
(xiv) Piaggio Vehicles (P) Ltd v. DCIT & Anr. 290 ITR 377 (Bom)
(xv) Swaraj Engine Ltd v. ACIT & Anr. 260 ITR 202 (P&H) (xvi) A.L.A Firm v. CIT - 102 ITR 622 (Mad) 6.3. The learned DR filed detailed paper book along with written submission which contained the order sheets, letters issued to the assessee and the reply etc. which are documents filed at the original assessment stage and submitted along with the original return of income.
No balance sheet was filed. Though the reply of the assessee dated 14- 3-2000 filed at the original assessment stage is available on record but enclosed documents are not available with this reply and in other case even copies of the accounts called for by the AO are not available. In the 29 ITA Nos. 2382, 2188 & 2371-Ahd-2009 original assessment order the AO did not discuss about the genuineness of the credits. The AO after making complete enquiries at Mumbai formed his opinion for initiation of the reassessment proceedings because of failure on the part of the assessee to disclose truly and correctly all necessary facts for assessment. Even, the assessee withdrew the petition before the Hon'ble High Court. The assessee failed to prove genuine credits in the matter. Therefore, addition was rightly made. Ld. DR relied on order of SC in case of Sri Krishna P. Ltd., 135 CTR 75. In conclusion, it was pleaded that the stand of the AO has been sustained by the Ld. CIT (A) with judicious backing which requires no intervention by this Bench at this juncture.
6.4 The learned AR submitted that the order sheets are part of the revenue record. The assessee disclosed all the relevant facts before the AO at the original assessment stage. The reply of the assessee is available on record of the AO; therefore, all enclosed documents should be part of record of the AO. It is not possible that the original assessment is completed without fling of the confirmations etc. and the balance sheet. Without filing of the balance sheet it is not possible for AO to verify the deposit of interest which is part of the return filed by the assessee. No material or evidence was supplied to the assessee which could be incriminating against the assessee and no cross examination has been allowed to the assessee to the statement of such persons who might have given statement against the assessee. Non payment of loan or interest is not a valid ground to reopen the assessment or to presume escapement of income. Nothing is stated in the reasons for reopening of the assessment that no confirmations or required details were filed at the original assessment stage and nothing is mentioned in the reasons that 30 ITA Nos. 2382, 2188 & 2371-Ahd-2009 there was any failure on the part of the assessee to disclose fully and truly all necessary facts for assessment at the original assessment stage.
7. We have duly considered the rival submissions, diligently perused the relevant case records, written submissions filed by both parties with documents and also various judicial pronouncements on which either parties have pledged their unstinted faith.
7.1. The main thrust of the assessee is on the issue of re-assessment proceedings which, according to the assessee, were bad in law and with no proper jurisdiction. Section 147 of the Act provides as under:
"Provided that where an assessment under sub-section (3) of section 143 or this section has been made for the relevant assessment year, no action shall be taken under this section after the expiry of four years from the end of the relevant assessment year, unless any income chargeable to tax has escaped assessment for such assessment year by reason of the failure on the part of the assessee to make a return under section 139 or in response to a notice issued under sub-section (1) of section 142 or section 148 or to disclose fully and truly all material facts necessary for his assessment for that assessment year.
[Provided further that the Assessing Officer may assess or reassess such income, other than the income involving matters which are the subject matters of any appeal, reference or revision, which is chargeable to tax and has escaped assessment.] Explanation 1 : Production before the Assessing Officer of account books or other evidence from which material evidence could with due diligence have been discovered by the Assessing Officer will not necessarily amount to disclosure within the meaning of the foregoing proviso.
Explanation 2 : For the purposes of this section, the following shall also be deemed to be cases where income chargeable to tax has escaped assessment, namely :-
(a) Where no return of income has been furnished by the assessee although his total income or the total income of any 31 ITA Nos. 2382, 2188 & 2371-Ahd-2009 other person in respect of which he is assessable under this Act during the previous year exceeded the maximum amount which is not chargeable to income-tax;
(b) Where a return of income has been furnished by the assessee but no assessment has been made and it is noticed by the Assessing Officer that the assessee has understated the income or has claimed excessive loss, deduction, allowance or relief in the return;
(c) Where an assessment has been made, but -
(i) Income chargeable to tax has been underassessed; or
(ii) Such income has been assessed at too low a rate; or
(iii) Such income has been made the subject of excessive relief under this Act; or
(iv) Excessive loss or depreciation allowance or any other allowance under this Act has been computed.
[Explanation 3. - For the purpose of assessment or reassessment under this section, the Assessing Officer may assess or reassess the income in respect of any issue, which has escaped assessment, and such issue comes to his notice subsequently in the course of the proceedings under this section, notwithstanding that the reasons for such issue have not been included in the reasons recorded under sub-section (2) of section 148.] 7.2 The reasons recorded by the AO for reopening reads as under:
"1. The assessment in this case was scrutinized u/s 143(3) of the Act on 31.3.2000 and the assessment was completed on a total income of Rs.82,810/- as against the original returned income of Rs.3,42,112/- and the revised returned income of Rs.48,110/-. The sources of income of the assessee are salary, interest and remuneration from partnership firm known as 'R.S.Brothers', capital gain and other sources.
2. Information was received after the completion of the assessment that the assessee and his two brothers namely Shri Rakesh S Mardia and Rajiv S Mardia have introduced bogus loans in their books of account during the accounting year 32 ITA Nos. 2382, 2188 & 2371-Ahd-2009 relevant to AY 1997-98 by paying cash and obtaining cheques from the parties, as per list annexed marked Exhibit-A. Interest credited by the assessee for the relevant year is also provided in the Exhibit-A.
3. On going through the return of income for the AY 1997-98, it is seen that the assessee has not filed any balance sheet. However, on going through the list of interest payment it is seen that the assessee has credited interest to the parties appearing in the Exhibit-A referred above. On the above background vide this office letter dtd.9/6/03 the assessee was asked to produce the books of account for the AY 1997-98 u/s 133(6) to verify the loan transaction as the assessee had not filed any balance sheet along with the return of income. In reply to the above letter, the assessee has stated vide letter dtd. 1/9/2003 as under:
'As earlier informed to your honour, I have not maintained/lost old records of assessment since my assessment was completed under scrutiny assessment provisions u/s 143(3) and also reassessment proceedings u/s 147 was also completed in a writ petition before the Hon'ble Gujarat High Court. Looking to the certified copies of assessment records made available by your good office, we have found that all necessary details of sundry creditors are made available to your good office during the assessment proceedings and along with my return of income; I humbly and respectfully request your good honour to kindly look into the same and treat this as the details in compliance with your letter u/s 133(6) and oblige.'
4. Again vide para 3 of this office letter dtd. 3/12/2003 the assessee was asked to furnish the details as under:
'You are also requested to submit the details of bank account through which you received these deposits during the A.Y 1997-98. You are also requested to furnish the details of bank a/c through which interest has been paid to the sundry creditors for the accounting year relevant to A.Y. 1997-98 and subsequent years. You are also requested to confirm whether the loan received is still outstanding or has been paid. In case the same has been paid, the details of payments viz., cheque No. date of issue, amount and the bank a/c from which the cheque has been cleared should be mentioned.' 33 ITA Nos. 2382, 2188 & 2371-Ahd-2009
5. The assessee has not submitted the above information so far.
However, from the verification of the returns filed by the assessee for the A.Y 1997-98 and subsequent year, it is noticed that the assessee has not paid any interest to the parties mentioned in Exhibit A referred above. Further, though the interest was provided in the A.Y 1997-98 and claimed as expenditure the same was also not paid to the alleged creditors;
6. Based on the information, inquiries were made at Mumbai and it is ascertained that the firms/companies as per Exhibit A pertained to a group known as 'Khandar Group' of Mumbai. In the above group search and seizure operation was carried out in the year 1991 and these firms were held to be hawala operators. During the assessment year 1997-98 also these firms were treated as such. To cite an example copies of assessment order for A.Y 1997-98 in the following cases are annexed as Exhibit B-1 toB-6.
1) Raj Enterprise
2) Shekhakha & Co.,
3) Prabhavee
4) Raj Electricals
5) HPS International
6) Ray Engg.
7. It is noticed here that the loans and advances made by these parties during the accounting year relevant to A.Y 1997-98 is less than the cumulative total of the loans given to the assessee and his two brothers. A statement showing the loans and advances as per balance sheet of the above six firms and the advances alleged to have been given to the assessee and his two brothers is annexed marked Exhibit C.
8. From the perusal of the assessment order and the position of loans and advances as per the balance sheet of these firms, there is a reason for strong belief that the loans shown by the assessee from the parties as per Exhibit A are not genuine. This belief is further strengthened from the fact that though interest was credited in their accounts for the relevant assessment year 1997-98 the same was not paid till date. The assessee has not returned the principal loan amount till date. No legal action appears to have taken by the loan creditors so far in spite of non- payment of interest as well as principal. Further, this being a loan transaction the possibility of recovery by the creditors is 34 ITA Nos. 2382, 2188 & 2371-Ahd-2009 doubtful due to Limitation Act. It therefore, becomes crystal clear that the alleged loans are managed with his own money.
9. Notwithstanding the fact that the assessee might have filed confirmations with PA No. at the relevant time there is nothing on record to show that the genuineness of the transaction was verified. The facts remain that the assessee did not file balance sheet, therefore it cannot be verified from whom assessee received loans and in respect of which persons, the assessee filed confirmation letter. Thus because of non disclosure of proper details genuineness of loans transaction remain to be unverified within the meaning of section 68 of the I.T. Act, 1961 and this resulted in under-assessment of income. The total amount of loan introduced by the assessee in respect of the above party comes to Rs.10,40,00,000/-. The interest claimed and allowed during the assessment year 1997-98 comes to Rs.1,03,78,302/-. The total quantum of income escaped comes to Rs.11,43,78,302/-.
I have, therefore, reason to believe that the income assessable to tax has escaped assessment. Issue notice u/s 148 of the Act r.w.s. 147 of the Act."
7.3 As conceded by the AO, the original assessment in the assessee's case was concluded on 31.3.2000 after duly scrutinizing all relevant facts. At the original assessment stage, the AO issued query letter dated 28/2/2000 (P.B 2) calling for confirmation from depositors including bank statement, addresses, PAN Nos. and Circle/Ward where depositors have been assessed. The assessee vide reply dated 14.3.2000 (PB 7) enclosed statement of accounts of depositors, their confirmation address, PANo. /GIR No. along with Circle/Ward where the depositors were assessed to tax. The Ld. D R did not dispute during the course of argument that such query letter was issued by the AO at original assessment stage and reply filed by the assessee at the original assessment stage. The Ld. DR produced the record during the course of hearing and stated that the enclosures with reply dated 14.03.2000 are 35 ITA Nos. 2382, 2188 & 2371-Ahd-2009 not available on record. The Counsel for the assessee referred to the reply dated 14.3.2000 and top of it was stapled to show that enclosed documents were filed at the original assessment stage. The submission of the Ld. A R could not be disputed by the Ld. D.R. We may note that query letter and reply of the assessee above are admittedly part of the record of the original assessment record and as such it is highly unbelievable that no confirmations and the required details were filed at the original assessment stage. The balance sheets were also filed on the record of the AO and the AO after verifying and scrutinizing the record accepted the claim of the assessee of receiving the genuine loan from the same depositors under reference and passed the order u/s 143(3) of the Act on 31.3.2000. The record of original assessment is in possession and control of AO and revenue authorities. If enclosed documents filed with reply of assessee dated 14.03.2000 are detached with some ulterior motives to justify initiation of reassessment proceedings, it is for the AO to explain the same, but no explanation is given by the ld. D.R. during the course of arguments. It is therefore clear that the assessee disclosed all the materials and evidence at the original assessment stage necessary for the completion of regular assessment. The assessee thus disclosed fully and truly all the material facts and evidences at the original assessment stage and there was no failure on the part of the assessee to disclose fully and truly all material facts necessary for assessment at the assessment stage.
7.4 The records produced before us clearly prove that the AO at the original assessment stage verified all the facts and materials on record and accepted the claim of the assessee for genuine credits. Therefore, it was not competent on the part of subsequent AO to make allegation against the assessee without any reasons. The information in Kandahar 36 ITA Nos. 2382, 2188 & 2371-Ahd-2009 case was received after completion of the original assessment and nothing is brought on record if there was any nexus between Kandahar Group and the assessee. For deciding the issue u/s 68 of the IT Act what is relevant is the identity of the creditors, their creditworthiness and genuineness of the transactions which was already verified and examined by the AO at the original assessment stage on filing of details, confirmation and evidences by the assessee at the original assessment stage. Therefore, the AO has no right to verify again the concluded return u/s 147/ 143(3) of the IT Act. The Hon'ble Supreme Court in the case of Sun Engineering Works Pvt. Ltd, 198 ITR 297 held that "the jurisdiction of the ITO u/s 147 is confined only to such income which has escaped tax or which has been under-assessed and it is not extended to revising, reopening or reconsidering the whole assessment or permitting the assessee to re-agitate question which had been decided in the original assessment proceedings." No evidence or material has been produced if name of the assessee figured in any hawala transaction. In this case, there is nothing in the reasons for reopening of the assessment to show that no confirmations of the creditors or details necessary for assessment have been filed at the original assessment stage. Nothing is stated in the reasons for reopening that there was any failure on the part of the assessee to disclose all necessary facts for assessment. The original assessment was completed u/s 143(3) on 31-03-2000 accepting the claim of genuine credits u/s 68 of the IT Act. Reopening is, therefore, made u/s 148 of the IT Act on 29-03-2004 i.e. after expiry of 4 years from the end of the relevant assessment year. There was no failure on the part of the assessee to disclose fully or truly all material facts necessary for his assessment in the assessment year under appeal, therefore, proviso of section 147 of the IT Act clearly apply in the case of the assessee against the revenue.
37ITA Nos. 2382, 2188 & 2371-Ahd-2009 According to the AO, he was in receipt of information after completion of the assessment that the assessee and his two brothers have introduced bogus loans in their books of account during the accounting year relevant to the AY under dispute by paying cash and obtaining cheques from the parties cited supra and also the interest credited by the assessee for the relevant year and so on and so forth. To ascertain the veracity of such information, the AO, on going through the return of income of the appellant, had noticed that the appellant had not filed any balance sheet, but, on the list of interest payment, it was seen that the appellant had credited interest to the parties appearing in the said list. Based on the above information, the AO had resorted to make inquires at Mumbai and appears to have ascertained that the firms/companies pertained to a group known as 'Khandar group' which was subjected to search and seizure operation way back in the year 1991 and, accordingly, those firms were branded as hawala operators. It was, further, noticed that the loans and advances made by these parties during the accounting year relevant to the AY under challenge was less than the cumulative total of the loans given to the appellant and to his two brothers. On perusal of the assessment orders, the position of loans and advances as per the balance sheets of those firms, the AO had a reason for strong belief that the loans shown by the appellant from the above parties were not genuine and for the reasons recorded for reopening the assessment u/s 147 of the Act, the AO had reason to belief that the income assessable to tax had escaped assessment.
7.5 The reasoning of the AO has, however, been hotly contested by the assessee [at the cost of repetition, mainly for appreciation of relevant facts] that -
38ITA Nos. 2382, 2188 & 2371-Ahd-2009
(i) there was no specific information with the AO for the reopening of the completed assessment and he had taken recourse of s.133(6) and inquiries were made at Mumbai. In other words, the AO was probing into the matter for assuming the jurisdiction of reassessment;
(ii) that the AO did not have any authentic evidence of admission or the allegation for the information received or otherwise the AO would have specifically stated in the reasons recorded, but, he had not stated that what was the specific information and from whom had been received and in which proceedings it has been received;
(iii) that the information gathered by the AO was very old and cannot be relevant as the proceedings u/s 132 of the Act were conducted during 1991 whereas the assessment year under consideration is of the AY 1997-98 and no man can be a hawala operator for ever, in particular, when there were proceedings u/s 132 of the Act; that it was only assumption of the Department for hawala operator on the basis of proceedings u/s 132 of the Act initiated during the year 1991;
(iv) that the observation of the AO that the name of the appellant was not found in the balance sheet of creditor cannot be a valid reason to proceed against the appellant as the appellant cannot have control over the method of maintaining their books of account; that it was possible that they might have net out their loans taken and the loans advanced or for any other reasons, they have not mentioned in their balance sheets;
(v) that the notice of the TRO u/s 226(3) of the Act along with the list showing the names of the lenders, dates and amounts given by the creditors confirms that the lender had advanced the amounts and it was on the record of the Department and, therefore, the reasons recorded by the AO was against the facts of the case;
(vi) that the AO had unambiguously conceded that the appellant might have filed confirmation with PANs at the relevant time, but, there was nothing on record that the genuineness of the transaction was verified;
39ITA Nos. 2382, 2188 & 2371-Ahd-2009
(vii) that no incriminating documents during the proceedings u/s 132 of the Act at the appellant's premises on 9.1.1997 were found as those loans have been taken before the search date; that no incriminating documents/statements/admission during any proceedings against the lenders were found after the date of the granting loans to the appellant, but, only on the basis of the proceedings u/s 132 of the Act, the Revenue has been treating the said loan as non-genuine and, thus, it was only suspicion of the AO but, NOT a reasoned belief of the AO;
7.6 We find there is strong force and reasonableness in the argument of the appellant that the original assessment had, in fact, been concluded after scrutinizing various details furnished by the appellant which has fairly been conceded by the AO himself. Furthermore, the AO in the reasons recorded for reopening the assessment at Para 9 proclaimed that "9. Notwithstanding the fact that the assessee might have filed confirmations with PA No. at the relevant time, there is nothing on record to show that the genuineness of the transaction was verified..." This affirmation of the AO goes to prove unambiguously that the appellant has furnished the required details, the Revenue for obvious reason alleged that AO at original assessment stage had failed or rather overlooked to verify the genuineness or otherwise of the transaction at that relevant time, but, now conveniently trying to place the onus at the appellant's doorstep which is quite contrary to ethics, which allegation is also contrary to records.
7.7 Further, we would like to reiterate that even the provisions of s. 147 of the Act cannot be resorted to in the instant case. To illustrate further, we are inclined to extract the relevant portion of the proviso to section 147 section as under:
"Provided that where an assessment under sub-section (3) of section 143 or this section has been made for the relevant assessment year, no action shall be taken under this section after 40 ITA Nos. 2382, 2188 & 2371-Ahd-2009 the expiry of four years from the end of the relevant assessment year, unless any income chargeable to tax has escaped assessment for such assessment year by reason of the failure on the part of the assessee to make a return under section 139 or in response to a notice issued under sub-section (1) of section 142 or section 148 or to disclose fully and truly all material facts necessary for his assessment, for that assessment year"
Thus, the provisio of s. 147 of the Act make it abundantly clear that no action shall be taken after the expiry of four years from the end of the relevant assessment year where an assessment has been concluded u/s 143(3) of the Act unless any income chargeable to tax has escaped assessment by reason of the failure on the part of the assessee to make a return u/s 139 and so on. In the instant case, the assessment has since been concluded by the AO u/s 143(3) of the Act after scrutinizing the particulars furnished by the assessee at that relevant period. As rightly pointed out by the appellant, the AO had no specific information for reopening of the assessment concluded u/s 143(3) of the Act.
7.8 It is more relevant to highlight the very admission of the AO in the reasons recorded that (quote) '.....there is nothing on record to show that the genuineness of the transaction was verified'...(unquote). As rightly pointed out by the assessee, the AO did not have any authentic evidence of admission or the allegation for the information received or otherwise the AO would have expressly mentioned in his reasons recorded. These revelations amply prove that there was no default on the part of the assessee, but, the onus rested on the lap of the Revenue. Therefore, the assessee cannot be subjected to penalization for the lapse on the part of the Revenue for non-verification of genuineness or otherwise of the loans at the time of original assessment proceedings as alleged now.
41ITA Nos. 2382, 2188 & 2371-Ahd-2009 7.9 At this juncture, we recall the observations of the Hon'ble jurisdictional High Court in the case of Krishna Metal Industries v. H.M. Algotar reported in (1997) 225 ITR 853 (Guj) wherein it has been ruled :
"The proviso to section 147 lays down that where an assessment under sub-section (3) of section 143 or section 147 has been made for the relevant assessment year, no action shall be taken under section 147 after the expiry of four years from the end of the relevant assessment year, unless any income chargeable to tax has escaped assessment for such assessment year by reason of the failure on the part of the assessee to make a return under section 139 or in response to a notice issued under section 142(1) or section 148 or to disclose fully and truly all material facts necessary for his assessment for that assessment year. The impugned notice does not state that the assessee had not disclosed fully and truly all material facts necessary for his assessment for the relevant assessment year. The concerned officer has not recorded any satisfaction to that effect which was a precondition to the exercise of his jurisdiction for reopening the assessment, as the period of four years ended on March 31, 1994, and thereafter it was not open to the said authority to initiate action unless the case fell within the terms of the proviso. From the impugned notices that have been issued it appears that the primary facts were disclosed, but the concerned authority has resorted to inferences that the balance amount of Rs. 79,131 from the total amount of Rs. 1,10,931 was not utilized for the purpose for which it was withdrawn and further that the machinery worth Rs. 31,800 was purchased out of the amount of Rs. 1,10,931. According to us, this enquiry could have been made on the basis of the material already disclosed before the ITO while making the assessment under section 143(3) of the Act. It is a settled legal position as held by the Supreme Court in Calcutta Discount Co. Ltd. v. ITO [1961] 41 ITR 191 that from the primary facts in his possession, whether on disclosure by the assessee or discovered by him on the basis of the facts disclosed, or otherwise, the assessing authority had to draw inferences as regards certain other facts ; and ultimately from the primary facts and the further facts inferred there from, the authority had to draw appropriate legal inferences, to ascertain on a correct interpretation of the taxing enactment the proper tax to be levied. If there were in fact some reasonable grounds for the ITO to believe that there had been any non-disclosure as regards any primary fact which could have a material bearing on the question of 42 ITA Nos. 2382, 2188 & 2371-Ahd-2009 underassessment that would be sufficient to give jurisdiction to the ITO to issue the notices for opening the case. The Supreme Court held that the duty of the assessee does not extend beyond the full and truthful disclosure of all primary facts and once they before the assessing authority, he requires no further assistance by way of disclosure. It is for the assessing authority to decide what inferences of facts can be reasonably drawn and what legal inferences have ultimately to be drawn. Applying the ratio of this decision to the facts of the present case, we are satisfied that there was no ground on the basis of which the authority could have arrived at the conclusion that there was a non-disclosure of material facts. There are no reasons disclosed which could warrant the exercise of the powers under section 147 of the Act after a lapse of four years, from the end of the relevant assessment year.
We may also refer to the decision of the Supreme Court in Parashuram Pottery Works Co. Ltd. v. ITO [1977]106 ITR 1 in which the Supreme Court following the principles laid down in its earlier decision in Calcutta Discount Co. Ltd. v. ITO [1961]41 ITR 191 observed that any remissness on the part of the assessing authority can only be at the cost of the national exchequer and that there must be a point of finality in all legal proceedings, so that stale issues are not reactivated beyond a particular stage and the controversies are set at rest.
Under the above circumstances, we are of the view that the impugned notices could not have been issued after the period of four years from the end of the relevant assessment year had lapsed since the conditions for exercise of the power beyond four years contemplated by the proviso to section 147 did not exist. The impugned notices are, therefore, quashed as being illegal and without jurisdiction. Rule is made absolute accordingly..."
7.10 Yet an identical issue, the Hon'ble Court in the case of Shankarlal Nagji & Co. & Others v. ITO reported in (2009) 20 DTR (Guj) 116 ruled thus:
"There is no material discernible from the reasons recorded to establish as to which income has escaped assessment. It is not possible to accept the contention on behalf of the respondent authority that it is for the assessee to lead evidence to show that the gross receipts are not equivalent to income chargeable to tax.43
ITA Nos. 2382, 2188 & 2371-Ahd-2009 Respondent authority has to show from the reasons recorded that there is material to treat the gross receipts as income. A completed assessment cannot be reopened merely to make inquiries. Thus, impugned notices under s. 148 are quashed and set aside."
7.11 The Hon'ble Allahabad High Court in the case of CIT Vs Goyal Private Family Specific Trust, 171 ITR 698 decided the relevant question No.5 as under:
"(5) Whether, on the facts and circumstances of the case, failure on the part of the Income-tax Officer to make proper and adequate enquiries is by itself not sufficient to meet the requirement of section 263 which confers jurisdiction in respect of an order which is erroneous and prejudicial to the interest of the Revenue?"
7.12 In this case briefly the facts are that that the assessee a Specific Trust was created on 24-1-1973 under the Trust Deed for the benefits of the beneficiaries. The assessee filed returns for the first time for assessment years 1979-80 and 1980-81 on 20-02-1982 showing the income under the status of Private Specific Trust. The ITO completed the assessments for both the years on a specific date viz 25-11-1982. Both the orders are couched in identical language. The AO in one of the assessment orders while completing the assessment held "after discussions and scrutiny, income returned is accepted." The learned CIT issued notice u/s 263 of the Act because in his opinion the ITO passed the assessment orders in haste / hurry without proper and without proper enquiry and it was further observed that the assessment orders do not show, how and in what manner and with what capital the 44 ITA Nos. 2382, 2188 & 2371-Ahd-2009 Trust conducted its business relating to handloom daris and it is not at all clear from the papers filed. It was also added that the record shows that the books of accounts of the Trust were never produced before the ITO for scrutiny and no tick marks were made on the papers filed by the Trust along with the return of income. It was, therefore, finally concluded by the learned CIT that "an assessment made in haste/hurry without proper and adequate enquiry/investigation is erroneous and prejudicial to the interest of the revenue." On further appeal, the Tribunal observed that the assessee had filed the trading and profit & loss accounts, balance sheet and copies of the accounts of the beneficiaries before the ITO. Having so observed, the Tribunal found that the books of accounts had been produced before the ITO and that he passed the orders after having seen them is a finding of fact and no question of law arises there from.
7.13 The Hon'ble Allahabad High Court considering these facts held as under:
"The assessee, a private trust, filed its returns and the Income-tax Officer assessed the beneficiaries of the trust and held that the trust was not assessable. The Commissioner, acting under section 263 of the Income- tax Act, 1961, set aside the order of assessment. The Tribunal found that the necessary books of account had been produced, the Income-tax Officer had examined them and also discussed the case with the representative of the assessee before passing the order of assessment. On the other hand, there was no finding by the Commissioner of Income-tax that the Income-tax 45 ITA Nos. 2382, 2188 & 2371-Ahd-2009 Officer had reached an erroneous conclusion. The Tribunal set aside the order of the Commissioner of Income-tax. On an application to direct reference:
Held, dismissing the application, that in the absence of a finding by the Commissioner of Income-tax that the assessment orders were erroneous, the cancellation of assessments was not justified. The Tribunal was justified in setting aside the order of the Commissioner and no question of law arose from his order."
7.14 The Hon'ble Bombay High Court in the case of IPCA Laboratories Ltd. Vs DCIT and Others, 251 ITR 416 held as under:
"Held, allowing the petition, that, on the facts, the period of four years came to an end on March 31, 1997. The affidavit-in-reply clearly indicated that the predecessor of respondent No.1 had completed the assessment under section 143(3) on March 31, 1995, by computing the total income at Rs.2.86 crores and, subsequently on March 16, 1999, another predecessor in office of respondent No.1 formed an opinion that the income chargeable to tax had escaped assessment. This showed that reopening was sought on the basis of change of opinion. There was nothing in the affidavit-in-reply to indicate that the re- opening was sought on the ground of the failure on the part of the assessee to disclose fully and truly all material facts. In the circumstances, the provision in 46 ITA Nos. 2382, 2188 & 2371-Ahd-2009 Explanation 2 to section 147 had no application. The notice was liable to be set aside."
7.15 The Hon'ble Madras High Court in the case of T. S. Santhanam Vs Expenditure Tax Officer, 87 ITR 582 held as under:
"The essential principle as to the rule of finality of an assessment is that the assessing officer cannot change his mood and try to reopen a closed state of affairs."
7.16 The Revenue has placed reliance on a number of rulings of various judiciary. Let us now peruse the issues predominantly dealt by the Hon'ble Supreme Court in the following cases:
(a) Sri Krishna Pvt. Ltd v. ITO & ORS (1996) 135 CTR 75 (SC):
In the reasons recorded in this case, the AO had stated clearly that in the course of assessment proceedings for the succeeding AY, it was found that out of the unsecured hundi loans put forward by the assessee, a large number were found to be bogus and that many of the so called lenders were found to be near relations of the directors or the principal shareholders. He had stated that similar loans were also noticed for the AY 1959-60 and, therefore, he has reason to believe that there has been no true and full disclosure of all material facts by the assessee for the AY 1959-60 leading to escapement of income. After analyzing the issue in depth, the Hon'ble highest judiciary of the land had, in its conclusion, ruled that "the assessee showing hundi loans in his balance sheet for the AY 1959-60, similar hundi loans also shown in the balance sheet of AY 1960-61, ITO on investigation finding in respect of AY 1960-61 that some of the hundi loans were not genuine and at least ten such non- genuine lenders were common both for AYs 1959-60 and 1960- 61; reopening of assessment by ITO of asst. year 1959-60 on the ground that there was failure on the part of the assessee to make a full and true disclosure of all material facts was justified."47
ITA Nos. 2382, 2188 & 2371-Ahd-2009 We have, with due respects, perused the ruling of the Hon'ble Apex Court and reiterate that the issue before the Hon'ble Court was on a different footing which has no relevance to the issue on hand in the sense that the present assessee had disclosed all the materials fully and truly which have been considered by the AO and concluded the assessment u/s 143(3) of the Act. Subsequently, acted on an anonymous Tax Evasion Petition wherein it was alleged that the assessee and his two brothers indulged in introducing bogus loans in their books of accounts during the AY under consideration by paying cash and obtaining cheques from the parties etc., Admittedly, the AO did not have any authentic evidence of admission or the allegation for the information received through an anonymous petition which has no sacrosanct unless it contained documentary proof to substantiate the alleged information. As a matter of fact, the AO had no any authentic documentary evidence, but, acting on an anonymous TEP presumed that the assessee and his two brothers indulged in introducing bogus loans in their books of accounts by paying cash and obtaining cheques from the parties etc., We are, therefore, of the firm view that the Revenue cannot take refuge in the ruling of the Hon'ble Supreme Court cited supra.
(b) Phool Chand Bajrang Lal v. ITO (1993) 203 ITR 456 (SC):
The issue, in brief, was that for the AY 1963-64, the assessee claimed that he had borrowed Rs.50000/- from a Calcutta Company and the assessee was required, during the assessment proceedings, to file a copy of the account of the said company to support the loan transaction. The assessee produced a confirmatory letter from the Calcutta company, confirming the 48 ITA Nos. 2382, 2188 & 2371-Ahd-2009 payment of loan to the assessee. The AO had allowed deduction of interest claimed to have been paid for the borrowed amount for the AYs 63-64 to 68-69. To ascertain the genuineness of the loan transaction of the assessee, the AO sounded his counter-part at Calcutta to gather certain information from the case records of the said Calcutta company. The ITO from Calcutta conveyed that the Managing Director of the said Company had confessed that he was only a name-lender, but, had not advanced any loan to any party and, accordingly, the AO formed the belief that the assessee had not stated the primary facts with regard to loan transaction 'fully and truly' during the assessment proceedings, and sought to reopen the assessment by issuance of a notice u/s 148 of the Act. After deliberating the rival submissions, the Hon'ble Court had, in its wisdom, ruled that -
"The argument that the question regarding truthfulness or falsehood of the transactions reflected in the return can only be examined during the original assessment proceedings and not at any stage subsequent thereto is not acceptable. The argument is too broad and general in nature and does violence to the plain phraseology of sections 147(1) and 148 and is against the settled law. One has to took to the purpose and intent of the provisions. One of the purposes of section 147 appears to be to ensure that a party cannot get away by willfully making a false or untrue statement at the time of original assessment and when that falsity comes to notice, to turn around and say ' you accepted my lie, now your hands are tied and you can do nothing'. It would, be travesty of justice to allow the assessee that latitude.
Therefore, in the facts of the present case the ITO, Azamgarh rightly initiated the reassessment proceedings on the basis of subsequent information, which was specific, relevant and reliable, and after recording the reasons for formation of his belief that in the original assessment proceedings, the assessee had not disclosed the material facts truly and fully and, therefore, income chargeable to tax had escaped assessment. He therefore, correctly invoked the provisions of sections 147(a) and 148......."49
ITA Nos. 2382, 2188 & 2371-Ahd-2009 With due regards, we have attentively perused the ruling of the Hon'ble Supreme Court referred above. In this regard, we would like reiterate that that assessee had made a false claim and to substantiate his falsehood, he had produced a confirmatory letter from his alleged lender and on the basis of which his claim for deduction was allowed. The AO had, after ascertaining the actual fact from his counter-part at Calcutta that the alleged lender had not advanced any loan, but, only lent his name to the assessee to claim deduction of payment of interest etc., formed the belief that the assessee had not stated the primary facts regarding the loan transaction 'fully and truly' during the assessment proceedings and, accordingly, sought to reopen the assessment by issuance of notice u/s 148 of the Act. However, in the present case, the assessment was concluded on the basis of the materials furnished by the assessee However, on a tip off from TEP the AO presumed that the assessee and his two brothers indulged in introducing bogus loans in their books of accounts by paying cash and obtaining cheques from the parties etc., which, in our considered view, cannot be termed that the AO had formed the belief that the assessee had not stated the primary facts with regard to loan transaction 'fully and truly' during the assessment proceedings. We are, therefore, of the firm view that the case law relied on by the Revenue cannot come to its rescue.
(c) Ess Kay Engineering Co. (P) Ltd v. ITO (1993) 247 ITR 818 (SC):
50ITA Nos. 2382, 2188 & 2371-Ahd-2009 The Hon'ble Supreme Court in its brief ruling concluded that 'merely because the case of the assessee was accepted as correct in the original assessment, ITO is not precluded from opening the assessment on the basis of his findings of facts made on the basis of fresh materials in the course of assessment next year.' With respects, we would like to point out that the ruling of the Hon'ble Court cited supra is clearly distinguishable since in the present case the AO had not brought any sustainable fresh material to facilitate him to reason to believe that that the assessee had not stated the primary facts with regard to loan transactions 'fully and truly' during the assessment proceedings.
(d) ITO v. Purushottam Das Bangur & Anr. (1997) 224 ITR 362 (SC):
The Hon'ble Supreme Court ruled that the ITO was justified in reopening assessment under s.147(b) on the basis of letter written by DDI (Inv) to the jurisdictional IAC containing relevant facts and information without any further investigation.
However, in the present case, the AO , as said earlier, had acted only on the basis of TEP, but no authentic evidence of information received to justify the reopening of the assessment. No incriminating documents/statements were unearthed during any proceedings against the lenders after the date of granting of loans to the appellant. The reopening of the assessment in the case of the assessee and his two brothers, presumably, on the basis of proceedings initiated u/s 132 of the Act way back in the year 1991 in the case of Khandhar Group which appears to have prompted 51 ITA Nos. 2382, 2188 & 2371-Ahd-2009 the Revenue to come a conclusion that the loan transaction was non-genuine. The reasonable belief of the AO appears to be merely based only on suspicion and presumption.
7.17 With regard to initiation of reassessment proceedings after the expiry of four years from the end of the relevant assessment year as laid down u/s 149(1)(b) of the Act, various judiciary have ruled that -
(a) Dr. H.S.Bawa v. CIT & Another (2010) 325 ITR 340 (P & H) The Hon'ble High Court has held that 'Reassessment proceedings could be initiated only within four years from the end of the relevant assessment year as laid down u/s 149(1) (b) of the Act. Allowing the petition, it was, further, held that the notice u/s 148 dated March 29, 1989, for reopening the assessment for the assessment year 1980-81 was barred by limitation.
(b) The Hon'ble jurisdictional High Court in the case of Sadbhav Engineering Ltd v. DCIT (2011) 333 ITR 483 (Guj) has observed that -
"on a plain reading of the reasons recorded, it was apparent that they were totally silent as regards any failure on the part of the assessee to disclose fully and truly all material facts necessary for his assessment, was a matter of fact that there could be no deemed failure as was sought to be contended on behalf of the income-tax authorities. Therefore, in the absence of any failure on the part of the assessee to disclose fully and truly all material facts necessary for its assessment for the assessment years 2003-04 and 2004-05, the notices under section 148 having been issued after the expiry of a period of four years from the end of the relevant assessment years, they very initiation of proceedings under section 147 stood vitiated and could not be sustained."
(c) Yet another ruling, the Hon'ble jurisdictional High Court, in the case of Gujarat State Co. op. Agri. And Rural Development Bank 52 ITA Nos. 2382, 2188 & 2371-Ahd-2009 Limited v. DCIT reported in (2011) 337 ITR 447 (Guj) has observed that -
"the sole basis for reopening the assessment was the subsequent decision of the High Court. The belief as to escapement of income chargeable to tax from assessment was not entertained by the assessing officer on the ground that there had been failure on the part of the assessee to disclose fully and truly all material facts necessary for the assessment and no proceedings could have been initiated under section 148 of the Income-tax Act, 1961, after the expiry of a period of four years from the end of the relevant assessment year. Thus, the initiation of reassessment proceedings was barred by limitation and the assumption of jurisdiction by the assessing officer was invalid. The notice under section 148, therefore, could not be sustained."
(d) in the case of CIT v. 1. Pradeep Kumar Gupta and 2.Vijay Gupta reported in [2008] 303 ITR 95 (Del), the issue before the Hon'ble Court was that the AO received information while carrying out post search enquiries relating to a third party. A, sole proprietor of J, that A was providing bogus transactions purporting to be sale or purchase of food grain items and that the cash deposits with him were from parties who had approached him for 'accommodation entries' in the form of agricultural receipts. Enquiries showed that the assessee were the beneficiaries of such illegal transactions. Therefore based on the sworn statement of A, reassessment proceedings against the assessees u/ss. 147 and 148 of the Act were initiated. The assessees contended that they had taken agricultural land on lease from one M and the rent had been paid in cash. The assessees demand an opportunity to cross examine A but this was denied on the ground that the statement of this person was recorded by DDIT (Inv). The assessees contended that sales to J were genuine and submitted copies of the bills. The Tribunal deleted the agricultural income in the sum 53 ITA Nos. 2382, 2188 & 2371-Ahd-2009 declared by the assessee. On appeal, it was ruled by the Hon'ble Court that:
"the assessment had not been completed under section 143(3) of the Act. There were banking transactions between the assessee and A. The reassessment proceedings had been initiated after several years of acceptance of the return under section 143(1) of the Act. The assessees' failure to bring the person tilling the land on their behalf could not inexorably lead to the conclusion that no agricultural income had been generated by the assessees. Such an inference could only be drawn from the statement of A to the effect that the transactions between him and the assessees were bogus. Therefore, it was mandatory for the Revenue to produce A for cross examination by the assessees on their specific demand. Once section 147 or 148 was resorted to, the assessing officer must first discharge the burden of showing that income had escaped assessment. It was only thereafter that the assessee had to provide all the answers. The Tribunal arrived at the correct conclusion."
(e) The Hon'ble High Court of Delhi in the case of Signature Hotels P. Ltd v. ITO & Another [(2011) 338 ITR 51 (Del)] has observed thus:
"that the reassessment proceedings were initiated on the basis of information received from the Director of Income-tax (Inv) that the petitioner had introduced money amounting to Rs.5 lakhs during the FY 2002-03 as stated in the annexure. According to the information, the amount received from as company S, was nothing but an accommodation entry and the assessee was the beneficiary. The reasons did not satisfy the requirements of s.147 of the Act. There was no reference to any document or statement except the annexure. The annexure could not be regarded as a material or evidence that prima facie showed or established nexus or link which disclosed escapement of income. The annexure was not a pointer and did not indicate escapement of income. Further, the AO did not apply his own mind to the information and examine the basis and material of the information. There was no dispute that the company S had a paid up capital of Rs.90 lakhs and was incorporated on January 4, 1989, and was also allotted a permanent account number in September, 2001. thus, it could not 54 ITA Nos. 2382, 2188 & 2371-Ahd-2009 be held to be a fictitious person. The reassessment proceedings were not valid and were liable to be quashed."
(f) Yet another ruling, the Hon'ble High Court in the case of Haryana Acrylic Manufacturing Co. v. CIT & Another reported in (2009) 308 ITR 38 (Del) had proclaimed thus:
"Action under section 147 of the Income-tax Act, 1961, can be taken after the expiry of four years from the end of the relevant assessment year only if any income chargeable to tax has escaped assessment for such assessment year by reason of the failure on the part of the assessee (a) to make a return under section 139 or in response to a notice under sub-section (1) of section 142 or section 148, or (ii) to disclose fully and truly all material facts necessary for his assessment, for that assessment year. The proviso to section 147 carved out an exception from the main provisions of section 147. if a case were to fall within the proviso, whether or not it was covered under the main provisions of section 147 would not be material. Once the exception carved out by the proviso came to play, the case would fall outside the ambit of section 147. However, no action can be taken under section 147 after the expiry of four years from the end of the relevant assessment year if the conditions that (a) an assessment under section (3) of section 143 or this section has been made for the relevant assessment year, and (b) unless any income chargeable to tax has escaped assessment for such assessment year by reason of the failure on the part of the assessee: (i) to make a return under section 139 or in response to a notice issued under sub-section (1) of section 142 or section 148, to disclose fully and truly all material facts necessary for his assessment for that assessment year, are satisfied. Merely having a reason to believe that income had escaped assessment is not sufficient to reopen assessments beyond the period of four years. The escapement of income must also be occasioned by failure on the part of the assessee to disclose material facts fully and truly. It is a necessary condition for overcoming the bar set by the proviso to section 147. If this condition is not satisfied, the bar would operate and no action under section could be taken."
(g) The Hon'ble jurisdictional High Court in the case of Sayaji Industries Ltd. V. JCIT (Asst.) reported in [(2011) 336 ITR 360 55 ITA Nos. 2382, 2188 & 2371-Ahd-2009 (Guj)] has ruled, allowing the petition, that except for the statement that there was omission on the part of the assessee to furnish the true and correct affairs of the company, there was nothing whatsoever in the reasons recorded to indicate the nature of the omission and as to which facts had not been truly and fully disclosed. Hence, on a plain reading of the reasons recorded, it was apparent that there was no material on record on the basis of which the assessing officer could have recorded the satisfaction as regards income having escaped assessment by reason of failure on the part of the assessee to furnish true and correct affairs of the company. The notice under section 148 was not valid."
7.18 In view of the above legal positions, we are of the opinion that the assessee had disclosed all the material facts for the purpose of assessment originally concluded u/s 143(3) of the Act for the said loans and, therefore, the AO was not within his realm to reopen the assessment after the period of four years from the end of the assessment in view of express proviso to s. 147 of the Act by assuming the jurisdiction of initiation of reassessment proceedings merely on presumption and assumption.
7.19 Before concluding, we would like to highlight that the Ld. D R himself admitted in his written submission [source: P 3 of his letter dt: 8.11.2011) that the Ld. AO had proceeded only on Tax Evasion Petition- presumably an anonymous petition - which has no sanctity unless it has been established with impeccable evidence that the assessee had, in fact, indulged in introducing bogus loans in his books of account as alleged in the said petition. It is not uncommon in the trading community that due to rivalry in the business pushing through anonymous petitions, 56 ITA Nos. 2382, 2188 & 2371-Ahd-2009 leveling various allegations, unlawful activities being practiced by their rivals in the trade etc., Unless credible documentary evidences have been produced/annexed which should also stand the testimony of law to pin down the offenders, such anonymous petitions, in our considered view, have no legal sanctity. It should also be ensured that no innocent person should be subjected to penalization merely on presumption and assumption unless credible proof has been brought to fore. For instance, in the present case, the Ld. D R vouched that the Ld. AO had made enquiries at Mumbai and traced the income-tax records of six concerns (cited supra) from whom the assessee appeared to have received loans and on perusal of balance- sheets of those concerns revealed that the total loans and advances purported to have advanced by them were far less compared to the loans received by the assessee and his two brothers. At this juncture, it would not be inappropriate to mention here that (1) the Ld. AO had not brought any documentary evidence on record to even remotely suggest that the assessee and his two brothers have, in fact, received only less amount of loans; (2) on perusal of the assessment orders of those concerns reveal that the respective AOs have not made any adverse remarks against the assessee or his two brothers. It is rather strange the assertion of the Revenue that those concerns cited supra pertain to a group known as 'Khandhar Group of Mumbai and also ascertained during the course of search and seizure operation way back in 1991 on this group, these concerns were found to be involved in hawala transaction i.e., providing accommodation entries to various parties in the form of loans and advances by accepting cash for the respective amount of cheques and charging their commissions for such entries and so on and so forth. The dealing of the so called group Khandhar group has no relevance to the assessee's case since no incriminating papers/documents pertain to the 57 ITA Nos. 2382, 2188 & 2371-Ahd-2009 assessee appears to have been unearthed in the premises of 'Khandhar Group (that too in the year 1991) so as to implicate the assessee. We have also duly taken note of the Ld. D R's submission (P 8 of his written submission). The case laws cited by ld. D.R. would not advance the case of Revenue and are not applicable to facts of the case.
7.20 Thus, the ld. AO has not brought any evidence on record the nexus between the assessee and his brothers with "Khandhar Group'. No evidence or material has been brought on record to prove if any right to cross-examination has been given to the assessee in respect of persons who might have made some statements against the interest of the assessee. For giving credit under section 68 of the I.T. Act, the assessee has to prove identity of creditors, their capacity and genuineness of transactions which have been proved at the time of original assessment stage. Non payment of loan or interest would not be a valid ground to reopen the concluded assessment. The letter of the TRO u/s 226(3) of the Act clearly supports the submission of the assessee that the assessee received genuine credits. In the reason for reopening of the assessment, the AO has nowhere recorded if there was any failure on the part of the assessee to disclose the true and correct facts necessary for assessment.
8. In an all over consideration of the facts and circumstances of the issue as deliberated upon in the foregoing paragraphs, we are of the considered view that initiation of reassessment proceedings by the AO was neither with any sound base nor jurisdiction and, therefore, the impugned order passed by the AO on the basis of such presumption and assumption with no clinching documentary evidence deserves annulment. Accordingly, the orders of authorities below are set aside and 58 ITA Nos. 2382, 2188 & 2371-Ahd-2009 quashed. Resultantly, all additions stand deleted.
9. We have since annulled the assessment order passed u/s 143(3) r.w.s.147 of the Act itself, the other grievances raised by the assessee have become superfluous and, therefore, they have not been addressed to. Ground nos. 1 to 3 of the appeal of the assessee are allowed. Thus, the appeal of the assessee is partly allowed.
ITA NO.2188/Ahd/2009 - Shri Rajiv Mardia:
10. As the issues raised by the assessee are similar to that of the issues dealt with in the case of Shri Rasiklal Mardia (supra), we are of the firm view that the findings recorded in the case of Shir Rasiklal Mardia hold good for this assessee too. Accordingly, reassessment proceedings are set aside and quashed. Therefore, all additions stand deleted. Thus, the appeal of the assessee is partly allowed.
ITA NO.2371/Ahd/2009 - Shri Rakesh Mardia:
11. As the issues raised by this assessee are identical to that of the issues dealt with in the case of Shri Rasiklal Mardia, we are of the considered view that the findings recorded in Shir Rasiklal Mardia's appeal cited supra hold good for this assessee also. Accordingly, reassessment proceedings are set aside and quashed. Therefore, all additions stand deleted. Thus, the appeal of the assessee is partly allowed.
12. In the result, the appeals of (i) Shri Rasiklal Mardia (ITA No.2382/Ahd/2009), (ii) Shri Rajiv Mardia (ITA No.2188/Ahd/2009) and 59 ITA Nos. 2382, 2188 & 2371-Ahd-2009
(iii) Shri Rakesh Mardia (ITA No.2371/Ahd/2009) for the assessment year 1997-98 are partly allowed.
इस आदे श कȧ घोषणा Ǒदनांकः 23/12/2011 को Ûयायालय मɅ कȧ गई Sd/- Sd/-
(Bhavnesh Saini) (A.Mohan Alankamony)
Judicial Member Accountant Member
DATED : 23/12/2011
आदे श कȧ ूितिलǒप
ूितिलǒप अमेǒषतः-
षतः
1. अपीलाथȸ
2. ू×यथȸ
3. संबंिधत आयकर आयुƠ
4. आयकर आयुƠ- अपील-
5. ǒवभागीय ूितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद ।
6. गाड[ फाइल आदे श से, उप/सहायक पंजीकार आयकर अपीलीय अिधकरण, अहमदाबाद।
Talukdar/ Sr. P.S. 60