Income Tax Appellate Tribunal - Jodhpur
Anil Kumar Midha (Huf) vs Income Tax Officer on 13 December, 2004
Equivalent citations: (2006)100TTJ(JODH)644
ORDER
Hariom Maratha, J.M.
1. This appeal by the assessee namely Shri Anil Kumar (HUF) is directed against the impugned order of the CIT(A), Bikaner, dt. 26th March, 2004, pertaining to asst. yr. 1998 99.
2. The appellant has taken inasmuch as eleven grounds of appeals. But the effective grounds are only two.
3. The first effective ground is with regard to action of the AO taken under Section 147/148. of the IT Act, 1961 (hereinafter referred to as 'the Act' for short). The assessment in this case was completed originally on 27th Nov., 1998, under Section 143(a) of the Act on the declared income of Rs. 57,790, A notice under Section 148 of the Act was issued on 9th Sept., 1999, which was served on the assessee on 14th Sept., 1999, vide his letter dt. 27th Sept., 1999. The assessee submitted that the return filed on 4th Aug., 1998, may be treated to be the return filed by the assessee in compliance of the provision of Section 148 of the IT Act.
4. The assessee deals in sale and purchase of old tyres. The assessee has challenged the initiation of reassessment proceedings under Section 148 of the Act on the ground that there was no reason for reopening of the assessment already processed under Section 143(1)(a) of the Act.
5. The learned. Authorised Representative, Shri Suresh Ojha has invited our attention to pp. 5 and 6 of the paper book, where letter dt. 27th Sept., 1997, returned to the ITO by the assessee with regard to compliant of the notice under Section 148 of the Act and reasons recorded for reopening respectively, are placed.
6. The perusal of the records before me reveals that this ground, although legal one, was not taken before the CIT(A). So, in the interest of justice and fair play, without making any observations on the reason recorded for reopening, I restore this issue to the file of the CIT(A) with the direction to decide after hearing the assessee and the Revenue afresh.
7. The next issue pertains to deposit of Rs. 19,000 in the name of one Shri Hakikat Rai and an amount of Rs. 75,000 deposited in the name of one Shri Alok Jain, which were confirmed by the CIT(A), added by the learned AO under Section 68 of the Act.
8. I have heard the rival submissions of learned representatives as appeared on behalf of both the parties. I have also perused evidence and material on record. I have given thoughtful consideration to all available records and decisions relied before me. An amount of Rs. 75,000 was credited in the name of Shri Alok Jain, This amount was received by cheque. But the assessee is required to prove three ingredients namely, genuinity of the transactions, capacity of the creditor and identity of the creditor. According to the CIT(A), the assessee could not establish all these factors because neither any confirmation of the creditor was filed nor the creditor was produced before the AO. The case of the assessee is that, this creditor was not amenable to the assessee, so a request was made in writing to the AO for the summoning of the creditor under Section 131 of the Act.
9. According to the learned Authorised Representative, when the assessee had made a request in writing to the AO as above, the burden cast upon the assessee under Section 68 of the Act is discharged.
10. I have given careful thought to the facts and available evidence on record. There is no dispute that Shri Alok Jain, who resides in Kota had advanced a sum of Rs. 75,000 during the relevant period, through account payee cheque which was repaid by the assessee in the subsequent year through account payee cheque only, The assessee wrote to the AO about his inability to produce this creditor before him and had also requested to summon him under Section 131 of the Act. The Department has not disputed the identity of this creditor. The Department has also not doubted or disputed advance of this sum through account payee cheque. The AO made this addition, because the creditor was not produced before him. When the assessee had written a letter to the ITO, Ward-III, Sriganganagar, copy of which is placed at page No, 7 of the paper book, wherein it was requested by the assessee to summon this creditor, for further verification. Copies of bank accounts are also placed before the Bench. So, in my considered view, this is sufficient compliance of the legal requirement by the assessee. My above view is in conformity of the view taken by Jodhpur Bench in the case of MM. Woollens v. Assn. CIT in ITA Nos. 476 and 477/Jp/1991 order dt. 27 Feb., 1997, reported in 20 Tax World 142 (Jd). The identity of the creditor is established by bank accounts, etc. Payment is also established by deposit and repayment having been made through account payee cheques.
11. The Hon'ble Patna High Court has held in the case of Jhaveribhai Bihati Lal & Co. v. CIT , wherein it has been held that non-production of the creditor cannot be a reason for making addition. In this case, the AO could have summoned the creditor as requested by the assessee.
12. So in my view, the addition cannot be sustained, hence is deleted.
13. In the case of Shri Hakikat Rai, the payment was made in cash. The withdrawal from the bank is not shown which can substantiate cash payments. The creditworthiness of the creditor is not proved. So, this addition of Rs. 19,000 is sustained. This ground is partly allowed.
14. In the result, the appeal is partly allowed.