Income Tax Appellate Tribunal - Jaipur
Golden Bottling Limited, Jaipur vs Assessee on 4 July, 2016
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IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR
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BEFORE: SHRI BHAGCHAND, AM & SHRI LALIET KUMAR, JM
vk;dj vihy la-@ITA No. 183/JP/2013
fu/kZkj.k o"kZ@Assessment Year : 1997-98
Golden Bottling Limited, cuke Addl.CIT,
C-780, Phase-II, Industrial Area, Vs. Spl. Range,
Bhiwadi. Alwar.
LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: AABCG 5207 F
vihykFkhZ@Appellant izR;FkhZ@Respondent
fu/kZkfjrh dh vksj ls@ Assessee by : Shri Mahendra Gargieya (Adv)
jktLo dh vksj ls@ Revenue by : Shri R.A. Verma (Addl.CIT)
lquokbZ dh rkjh[k@ Date of Hearing : 24/06/2016
mn?kks"k.kk dh rkjh[k@ Date of Pronouncement : 04/07/2016
vkns'k@ ORDER
PER: LALIET KUMAR, J.M. The present appeal filed by the assessee arising out of the order dated 28/6/2011 passed by the ld CIT(A), Alwar for the A.Y. 1997-98 wherein the following grounds of appeal have been raised.
"1 Because the action is under challenge on facts and law for enhancement being disallowance of depreciation on the Plant & machinery amounting to Rs. 29,18,090/-. Even the quantum and rate of disallowance is disputed.
2 ITA 183/JP/2013_ Golden Bottling Limited Vs Addl.CIT
2. Because the action is under challenge on facts and law for sustaining the addition of Rs. 34,23,712/- U/s 68 as cash credit for shares and loans.
2. The brief facts of the case are that the appellant company was incorporated on 18/07/1994. The business of the appellant company was to manufacture mineral water. However, consequently, it had started bottling of liquor. The assessee filed its return of income for the year under consideration declaring a loss of Rs. 53,78,560/- on 18/11/1997.Thereafter a notice U/s 143(2) of the Income Tax Act, 1961 (in short the Act) was issued on 28/8/1998. However, the notice was returned back with a remark that "concerned person was not available". Thereafter a letter was received from the assessee company seeking adjournment. Thereafter the case was fixed for 18/8/1999. However, on that date, no one attended the proceedings. Ultimately, a notice U/s 142(1) of the Act alongwith query letter was issued on 12/8/1999. The AR of the assessee appeared and the case was discussed with the Assessing Officer. It was noticed that during the year under reference, the assessee company allotted 635100 shares of Rs. 10 each and also having unsecured loans to the extent of Rs. 69,92,981/-. The ld Assessing Officer made observation to the extent of concluding that the assessee have not explained the investment made in the shares of the 3 ITA 183/JP/2013_ Golden Bottling Limited Vs Addl.CIT company. Therefore, the ld Assessing Officer has discussed in details about the individual share applications as alleged made by the assessee and thereafter the ld Assessing Officer has invoked the provisions of law and made addition U/s 68 of the Act for investment in shares and unsecured loans received by the assessee company. Further the assessee has also claimed depreciation on plant and machinery installed by it. However, the ld Assessing Officer after discussing the factual matrix and the excise register maintained by the assessee have restricted the claim of the assessee to 3/4 of the claim. The relevant paragraph is reproduced at page No. 20 to 21 of the assessment order, which is reproduced as under:-
"During the course of proceedings the examination of account books showed that poly sleeves were purchased for the first time on 07/10/96. Copy of purchase voucher of Stickers and Shrunks was not produced. Poly cup film and Poly shrink label were purchased for the first time on 06/01/1997. Excise register showed that the production started from 28/09/1996. The assessee has also been shown sales during the month of September. From the above, it is clear that the machineries using poly sleeves, stickers and shrink etc. were not utilized before 30/09/1996. The assessee's AR has filed the list of machineries and the purpose for which these have been
4 ITA 183/JP/2013_ Golden Bottling Limited Vs Addl.CIT utilized. The month-wise details of sales as submitted by the assessee company is as under:-
Name of month Amount
September, 96 Rs. 9900/-
October, 96 Nil.
November, 96 Nil.
December, 96 Nil.
January, 97 Rs. 154500/-
February, 97 Rs. 690195/-
March, 97 Rs. 250756/-
From the above, it is clear that the assessee company has not used its entire plant & machinery for production in the month of September, 96. If it were so then they would have been sales in the subsequent months. It is not possible for me to ascertain plant and machinery which were being used in the month of September, 96 for production. An estimate is required to be made. In the details of machinery it is clear that the assessee company has purchased two conveyance balt. There are two water plants. Considering the nature of machineries, depreciation claimed for full year is restricted to three fourth."
3. Being aggrieved by the order of the Assessing Officer, the assessee preferred appeal before the ld CIT(A), who had restricted the claim of depreciation from 3/4th to 1/2 . The findings of the ld CIT(A) is as under:-
5 ITA 183/JP/2013_ Golden Bottling Limited Vs Addl.CIT
"4.2 The AR contended that further we have to submit that the assessee company has started production on 28/09/1996 since there is no dispute on this order. For this purpose, he has verified the excise records. Once it has been verified that Plant and Machineries forming part of block has been used during the year for more than 182 days there is no choice available with him to allow depreciation on proportionate or estimate basis. He has to allow depreciation for full year. It is therefore submitted that necessary directions may be passed to the A.O. allowing full depreciation instead of 3/4th.
4.3 I have gone through the assessment order as well as submission of the assessee and also enhanced notice there is no force in the submission of the AR as production started after 31st September, 1996 as no evidence has been filed before me that production had been started on 28/09/1996. The depreciation is allowable 1/2. Therefore, A.O. is directed to recalculate 1/2 depreciation and allow the same. On this ground of appeal the addition is enhanced."
4. Similarly, the ld CIT(A) after detailed discussions have sustained the addition of Rs. 34,23,715/- U/s 68 of the Act for cash credit of shares and loans. The finding of the ld CIT(A) is reproduced as under:-
6 ITA 183/JP/2013_ Golden Bottling Limited Vs Addl.CIT
"5.3. I have gone through the assessment order as well as submission of the assessee and case relied upon, the Ld. AO had given detailed findings in each case as under:
(i) Prem Lata Madhok: The AO had not satisfied with the source of income (on page-3) of the assessment order.
(ii) Salish Kumar Bhayana: The Id. AO had not been provided any confirmation. (on page-3).
(iii) Bhagyawati: She had not admitted any investment in shares and no evidence has been provided, (on page-3).
(iv) Sardar Singh: No reply and confirmation was filed. (on page-4).
(v) Saroj Madan: There was no Saroj Madan on address given and also no further reply was given by the assessee. (on page-4)
(vi) Pankaj Madan: There was no Pankaj Madan on address given and also no further reply was given by the assessee. (on page-4)
(vii) M/S Sarna Int. P. Ltd.: No address has been given, (on page-4)
(viii) V.J.S.Chawla: No confirmation, (on page-4).
(ix) Chinki Chawala: No confirmation, (on page-4)
(x) Mr. Azad: No address of shareholder given. (on page-5) 7 ITA 183/JP/2013_ Golden Bottling Limited Vs Addl.CIT
(xi) Mrs. Azad: No address of shareholder given, (on page-5)
(xii) Mr. Azad: No address of shareholder given. (on page-5)
(xiii) Miss Purna: No address of shareholder given.
(on page-5)
(xiv) K.K.Nagia: No confirmation submitted. (on page-5)
(xv) Rakesh Malhotra: No confirmation submitted.
(on page-5) (xvi) Ashok Solanki: The AO had considered 4 lacs explained out of total loan 11,44,162/- as the creditworthiness was not to pay Rs. 1 1,44,162/- (on page-8) (xvii) ESS AAR investment: No confirmation and not address had been provided. (on page-8) (xviii) Shekhar: No confirmation, on enquiry he refused to give any loan to the company and had salary income. (on page-9)
(xiv) H.R.Tyagi: The balance sheet of the company shows loan Rs. 6,49,550/- whereas balance sheet of the H.R.Tyagi Rs. 20,09,269/-(on page-9) (xx) R.P.Tyagi: Not filing the income tax return and summons were not served, (on page-10) (xxi) Sunil Tyagi: The balances shown by the creditor and company were not matching. The AO made an addition of Rs. 2,50,000/-. (on page-12).
8 ITA 183/JP/2013_ Golden Bottling Limited Vs Addl.CIT (xxii) Umesh: No confirmation filed, (on page-12). The assessee has not filed any evidence before me except written reply. The position is same. He only relied upon case laws as referred above which are not squarely applicable in this case. The Hon'ble Calcutta High Court in case of CIT Vs. Rubbi Traders and Exporters Ltd. (2004) 263 ITR 300 and Rajasthan High Court in case of CIT Vs. First Point Finance Ltd. (2006) 286 ITR 477 and Hon'ble Delhi HC in case of CIT Vs. Divine Leasing and Finance Ltd. (2008) 299 ITR 268 has held that identity of the person, creditworthiness and genuineness of the transaction has to be established by the assessee in case of shares and loans u/s. 68 of the IT Act. Therefore, addition of Rs. 34,23,712/- is confirmed. The appeal on this ground is dismissed.
ISSUE NO. 1
5. Now the assessee is in appeal before us. The ld AR of the assessee has submitted that the plant and machinery were purchased during the assessment year and was put to use prior to 30th September, 1996 as the assets became part of the block of assets. Therefore, the assessee is entitled to depreciation on the written down value as per Section 32 of the Act for the entire period.
9 ITA 183/JP/2013_ Golden Bottling Limited Vs Addl.CIT
6. On the other hand, the ld DR has submitted that the assets were not put to use prior to 30/09/1996 and it was a shame transaction. It was further pointed out that during the subsequent months, there was no production as is clear from the chart given in the assessment order, therefore, it was submitted that the assessee is not entitled to the depreciation more than what has already been granted by the ld CIT(A).
7. We have heard the rival contentions of both the parties and perused the material available on the record as well as also perused the orders of the lower authorities. Admittedly the assessee has shown the production for an amount of Rs. 9900/- in the month of September 1996. (The records of central excise sales Range-1 on 28/09/1996, 29/09/1996 and 30/09/1996.) This register of excise was maintained by the assessee as mentioned by the Assessing Officer in the assessment order. Moreover, once it is submitted by the assessee that the block of assets have been put to use for a period of more than 180 days then the assessee is entitled to depreciation at the rate mentioned in Section 32 of the Act during the relevant assessment year. In our view, the failure of the Assessing Officer to ascertain the usage of plant and machinery in the month of September, 1996, cannot be a ground to disallow the depreciation for the period of more than 180 days. As per Section 32 of 10 ITA 183/JP/2013_ Golden Bottling Limited Vs Addl.CIT the Act, if the asset is put to use for a period of more than 180 days, then the assessee is entitled to depreciation on the written down value as prescribed by the Act. Since the assets were put to use for the period of more than180 days, therefore, the assessee is entitled to depreciation for full year. Accordingly, we allow ground No. 1 of the assessee's appeal.
ISSUE NO. 2
8. The ld AR of the assessee has submitted that the assessee has allotted 635100 shares of Rs. 10 each and has also shown unsecured loan of Rs. 69,92,981/- from various persons. The ld Assessing Officer, on verification, has restricted the addition with regard to 22 transactions only. The ld CIT(A) has given details of the 22 persons/transactions at page 6 and 7 of his order. The ld AR has further submitted that the additions in respect of share applicable was made for an amount of Rs. 15,24,162/- for 16 cases and the addition of Rs. 18,99,550/- was made for unsecured loans for six cases, thus a total addition of Rs. 34,23,712/- was made.
9. The ld AR of the assessee has submitted before us that the assessee has given complete details of identity of the persons, creditworthiness and genuineness of the transactions and therefore he 11 ITA 183/JP/2013_ Golden Bottling Limited Vs Addl.CIT submitted that the addition made by the ld Assessing Officer and sustained ld CIT(A) are required to be set aside. For the purposes of share application, the ld AR has relied upon the following decisions:
(i) Barkha Synthetics Ltd. v/s ACIT 197 CTR 432 (Raj) vide order dated 02.08.2005
(ii) CIT v/s Winstral Petrochemicals (P) Ltd. (2010) 41 DTR 139 (Del).
(iii) Bhav Shakti Steel Mines (P) ltd v/s CIT 18 DTR 194(Del) (2009) -
Held Source need not be proved.
(iv) CIT v/s Samir Bio- Tech (P) Ltd 17 DTR 224(Del) (2009) - Held All necessary details filed - no addition call for.
(v) M/s Anu Industries v/s ACIT 19 DTR 465 (Del).
(vi) Auatech International Ltd. v/s ITO 13 DTR 382(Del).
(vii) Smart Capital Services Ltd V/S JCIT 10 DTR 593(Del).
(viii) Meera Engineering & Commercial Industries Co. P. Ltd. v/s ACIT 58 TTJ 527(Jab).
(ix) Allen Bradley India Ltd. v/s DCIT (2002) 80 ITD 43 (Del).
(x) Uma Polymers Pvt. Ltd. v/s DCIT (2006) 101 TTJ 124 (JD) (TM)
(xi) Progressive Ltd. v/s ITO (1991) 40 TTJ 595 (Cal)
(xii) CIT v/s Gangour Investment Ltd. (2009) 18 DTR 242 (Del) - Held subscription forms of investors, PAN & addresses filed. TT Ltd had share capital of `3.4 Crore.
(xiii) M/s Bharti Syntex Ltd. v/s DCIT (2011) 137 TTJ 82 (JP) ITO v/s Superline Construction Pvt. Ltd. ITA No. 3645/Mum/2014
(xiv) (BCAJ) 12 ITA 183/JP/2013_ Golden Bottling Limited Vs Addl.CIT For the purposes of unsecured cash creditors, he relied upon the following decisions:
(i) Dhakeshwari Cotton Mills Ltd. v/s CIT (1954) 26 ITR 775 (SC).
(ii) CIT v/s First Point Finance Ltd (2006) 286 ITR 477 (Raj.)
(iii) Som Prakash Kayal v/s AO in ITA No364/JU/2005.
(iv) Vijeta Cement Pvt. Ltd. v/s JCIT 24 TW 223 (JP).
(v) Labhchand Bohra V/s ITO (2008) 8 DTR 44 (Raj.).
(vi) Kanhaialal Jangid vs. ACIT (2008) 217 CTR 354 (Raj).
(vii) Aravali Trading Co. v/s ITO (2008) 8 DTR 199
(viii) CIT v/s Lovely Exports (P) Ltd (2008) 216 CTR 195(SC).
(ix) Vimal Chandra Golecha v/s ITO & Anr. (1982) 134 ITR 119 (Raj.).
(x) Kishinchand Chellaram vs. CIT (1980) 125 ITR 713 (SC).
10. On the other hand, the ld DR has submitted that the order passed by the ld Assessing Officer and the ld CIT(A) are in accordance with law and therefore, the additions made by the Assessing Officer and sustained by the ld CIT(A) is required to be upheld by this Tribunal and the appeal of the assessee on this ground is required to be dismissed.
11. We have heard the rival contentions of both the parties and perused the material available on the record. The ld AR of the assessee has submitted a detailed chart in respect of 22 transactions, we shall be 13 ITA 183/JP/2013_ Golden Bottling Limited Vs Addl.CIT dealing with each and every transaction separately and will be deciding the issue on merit.
Smt. Premlata Madhok 11.1 First of all the addition was made by the ld Assessing Officer and sustained by the ld CIT(A) in respect of Smt. Premlata Madhok. In this regard, AR submitted that the shares were allotted by the assessee to Smt. Premlata Madhok and even from the report of Inspector, the identity of Smt. Premlata Madhok was proved and further she has admitted purchase of shares. However, the Assessing Officer was not satisfied with the source of income, therefore, the addition made was. In our view, once the identity of the creditor has been established and there is no doubt about the genuineness of the transaction, therefore, the source of the source cannot be enquired by the Assessing Officer prior to 2003 amendment under section 68. Accordingly, the addition made with respect to Smt. Premlata Madhok for a sum of Rs. 25,000/- is hereby directed to be deleted.
11.2 Shri Satish Kumar Bhayana:- In this regard, Shri Satish Kumar Bhayana was allotted 4000 shares by the assessee company and the assessee has provided address of the allottee to the Assessing Officer as has been mentioned by the Assessing Officer in the order.
14 ITA 183/JP/2013_ Golden Bottling Limited Vs Addl.CIT However, no investigation was made by the Assessing Officer and therefore, the Assessing Officer has added a sum of Rs. 40,000/- on the pretext that the assessee has failed to give confirmation from the said Shri Satish Kumar Bhayana, in our view, once the shares have been allotted to Shri Satish Kumar Bhayana and the address has been given then the Assessing Officer is duty bound to conduct the necessary inquiry U/s 131 of the Act to establish or disprove the identity of the person. Since the assessee has discharged the initial onus of disclosing the identity and address of the person, therefore, in our view the ingredients of Section 68 are met and the addition is required to be deleted. Accordingly, we delete the addition in respect of Shri Satish Kumar Bhayana.
11.3 Smt. Bhagyawati and Mr. Rakesh Malhotra:- In both the cases, the shares were allotted by the assessee company and the assessee has provided address of the allottee of the shares namely C-88, Vikash Puri, New Delhi. However, the Inspector doubted the transcation and has given report , stating therein that As per Smt Bhagwati the details of the share application may be available with her son Mr. Rakesh Malhotra. On meeting of Mr. Rakesh Malhotra he submitted, , "he told him that he will furnish desired details about the investment made in the 15 ITA 183/JP/2013_ Golden Bottling Limited Vs Addl.CIT share applications of M/s G.B. Limited in 2-3 days to the office". Similar is the reply in respect of share application of Mr. Rakesh Malhotra where it is mentioned by the Assessing Officer that the Mr. Rakesh Malhotra did not give proper reply after report dated 28/12/1999 of the Inspector.
In our view, the identity of the person has been roved by the assessee, address has been provided and the amounts invested by Smt. Bhagyawati and Mr. Rakesh Malhotra were Rs. 50,000/- and Rs. 40,000/-, in our view, this were small amount and there is no positive evidence brought on record by the AO suggesting that these persons are not having means to file share application. In fact, the report suggests that Shri Rakesh Malhotra is a teacher in school, therefore, means of Shri Rakesh Malhotra cannot be doubted. Therefore, in our view the addition is required to be deleted. Accordingly, we delete the addition in respect of Smt. Bhagyawati and Mr. Rakesh Malhotra. 11.4 Sardar Singh, Saroj Madan, Pankaj Madan, M/s Sarna Intl. (P) Ltd.Mr. Azad, Mrs. Azad, Mr. Azad and Miss Prerna:- In these share applications, the ld AR has submitted that the shares have been allotted after receipt of the money, therefore, the addition made by the ld Assessing Officer is required to deleted. On the other hand, the ld DR has admitted that neither the address has been given nor the 16 ITA 183/JP/2013_ Golden Bottling Limited Vs Addl.CIT confirmation have been submitted by the assessee in these share applications, therefore, the addition is required to be sustained. We have gone through the arguments made by both the parties as well as records placed before us, in our view neither the address have been given in respect of these share applicants nor these applicants were found on enquiry by the Inspector nor the confirmations were given by these share allottees. In our view, the assessee has failed to discharge its initial onus to prove the identity of the person, genuineness of the transaction and creditworthiness, therefore, the additions in respect of Shri Sardar Singh, Saroj Madan, Pankaj Madan, M/s Sarna Intl. (P) Ltd.Mr. Azad, Mrs. Azad, Mr. Azad and Miss Prerna totaling to Rs. 5,25,000/- for all these persons are hereby confirmed. V.J.S. Chawla and Chinki Chawla 11.5 The ld AR has submitted in respect of V.J.S. Chawla and Chinki Chawla that the shares have been allotted to them. The PANs were given by the assessee in respect of these two persons. The ld DR has submitted that the confirmation in respect of these two persons were not made by the assessee. We have gone through the submissions of both the parties and records placed on record. The ld Assessing Officer in the order has mentioned that the VJS Chawla is an Army Officer and 17 ITA 183/JP/2013_ Golden Bottling Limited Vs Addl.CIT posted at Mumbai. However, the contact could not have been established as the phone was being picked up by the P.A.. In our view, the more enquiry was required to be made by the Assessing Officer. In absence of thorough and proper enquiry, the addition cannot be made by the ld Assessing Officer. The assessee, in our view, was able to discharge his primary onus of proving the identity of the persons and genuineness of the transactions. Since VJS Chawla was working in the Army, therefore, the creditworthiness of the government official cannot be doubted. Accordingly, in our view, the addition of Rs. 50,000/- in respect of V.J.S. Chawla and Chinki Chawla is required to be deleted and we delete the addition of Rs. 25,000/- each for V.J.S. Chawla and Chinki Chawla.
11.6 Shri K.K. Nangia:- Regarding Shri K.K. Nangia, the ld AR has submitted that the shares have been allotted to him. His identity is duly established as the Inspector visited the house but the said person was not available at that time. His daughter was present and she was not able to give desired details. The A.O. should have been made further enquiry in absence of the said person which he did not. Thus, the identity, genuineness of the person is established. On the other hand, the ld DR has admitted that neither the address has been given nor the 18 ITA 183/JP/2013_ Golden Bottling Limited Vs Addl.CIT confirmation have been submitted by the assessee in this share application, therefore, the addition is required to be sustained. We have gone through the arguments made by both the parties as well as records placed before us, in our view neither the address have been given in respect of this share applicant nor applicant was found as mentioned in the report of the Inspector nor the confirmation has been given by this share allottee. In our view, the assessee has failed to discharge his initial onus to prove the identity of the person, genuineness of the transaction and creditworthiness, therefore, the addition of Rs. 50,000/- in respect of Shri K.K. Nangia is hereby confirmed.
11.7 Shri Ashok Solanki:- Regarding Shri Ashok Solanki the ld AR has submitted that his statements were recorded u/s 131. Identity is duly established. He admitted in his statements of investments made in the form of shares and loans. He stated the various sources from which investments were made such as NSC/FDRs purchased from agricultural activities. He was having 20 acres of vast agricultural land. Payments received by way of banking methods only, filing income tax returns regularly. He has not denied any part of investments as shown by the company to his credit. Onus is to explain the sources of credit and not sources of the source. Action is required to be taken in the hands of 19 ITA 183/JP/2013_ Golden Bottling Limited Vs Addl.CIT lender not in the hands of Assessee Company. On the other hand, the ld DR has admitted that neither the address has been given nor the confirmation have been submitted by the assessee in this share application, therefore, the addition is required to be sustained. In our view, once the identity of the creditor has been established and there is no doubt about the genuineness of the transaction, therefore, the source of source cannot be enquired by the Assessing Officer. Accordingly, the addition made with respect to Shri Ashok Solanki for a sum of Rs. 7,44,162/- is hereby directed to be deleted.
Unsecured loan
12. Now we shall be dealing with the cash creditors/ unsecured loan . The names, addresses and amount of the cash creditors is reproduced as under:-
S.N. Name Address Amount
Essaar
1 No address provided(AO pg. 8) 200000/-
Investment
2 Shekhar WZ-505, Basidarapur, N.D. 300000/-
3 H.R. Tyagi WZ-105, Basidarapur, N.D. 649550/-
4 R.P. Tyagi WZ-505, Basidarapur, N.D. 350000/-
5 Sunil Tyagi WZ-505, Basidarapur, N.D. 250000/-
WZ- 13, Vikas Puri New delhi
6 Umesh Tyagi 150000/-
20 ITA 183/JP/2013_
Golden Bottling Limited Vs Addl.CIT
The ld AR of the assessee has submitted that the assessee has received amount through cheques and repaid the amount through cheques, therefore, the ld Assessing Officer and ld CIT(A) has wrongly confirmed the addition of Rs. 18,99,000/-. It was also submitted that the amount appears in the ledger of the assessee and also in the ledger of the creditors. It is also the case that the loan amount of Shri Umesh Tyagi at sl. No. 22 had been repaid in the subsequent year. It was submitted that during the inquiry done by the Assessing Officer, no transaction was found to be fictitious. It is the contention of the assessee that the loans received by the assessee are genuine , real and came from the banking channel. It was not the money of the assessee. The ld Assessing Officer has failed to prove that the money received by the assessee as loan was the money of the assessee and no nexus has been proved by the ld Assessing Officer. It is the case that the substantial amount was received by the old management and new management has repaid the amount. The assessee has requested the Assessing Officer to issue the summons U/s 131 to find out the correct nature of transaction and therefore, it was contended that out of the addition of Rs. 18.99 lacs, the addition of Rs. 17.49 lacs is required to be deleted being genuine and real.
21 ITA 183/JP/2013_ Golden Bottling Limited Vs Addl.CIT
13. On the other hand, the ld DR has drawn our attention to ld Assessing Officer's order from page 8 to 12 wherein the ld Assessing Officer had discussed in detail the financial status of the each of the persons and thereafter has come to the conclusion that the loan transaction was not a genuine transaction and was a shame transaction required to be added back to the income of the assessee.
14. We have heard the rival contentions of both the parties and perused the material available on the record. We shall be dealing with each creditor separately.
(i) Essaar Investment:- The assessee has not provided the address and confirmation of the Essaar Investment, therefore, the case of the assessee that the loan was taken, in our view, was not correct. In our view, the ld Assessing Officer and ld CIT(A) was right in confirming the addition, therefore, we uphold the order of the ld CIT(A) in the case of Essaar Investment.
(ii) Shekhar:- Though the payment was received by cheque by the assessee, however, when the letter was written by the assessee as well as by the ld Assessing Officer,The letter returned back with remarks unclaimed. Thereafter the enquiries were made by sending the Inspector 22 ITA 183/JP/2013_ Golden Bottling Limited Vs Addl.CIT at the residence of Shri Shekhar. On perusal of the balance sheet, "we notice that Shri Shekhar was merely a salaried employee and there no loan was given by him to the assessee company, as per balance sheet . In view thereof, we have no hesitation to confirm the order passed by the ld CIT(A). At bar also, during the course of argument, the ld AR has failed to rebut the conclusion drawn by the ld Assessing Officer, therefore, the order of the ld CIT(A) is required to be upheld and we uphold the order of the ld CIT(A) in the case of Shri Shekhar.
(iii) H.R. Tyagi, R.P. Tyagi and Sunil Tyagi:- The Assessing Officer have examined the balance sheet of Shri H.R. Tyagi as well as the company, it was noticed by the ld Assessing Officer that there was a major difference in their accounts of both i.e. assessee as well as Shri H.R. Tyagi. We have gone through the record in our view there is major difference in the accounts/ balance sheet of H R Tyagi and assessee which the assessee has not been able to explain the during the course of argument hence the assessee has failed to prove the identity, creditworthiness and genuineness of the transaction, therefore, the addition of Rs. 6,49,550 has rightly be confirmed by the ld CIT(A), /- therefore, we also confirm the order of the ld CIT(A) in the case of Shri H.R. Tyagi.
23 ITA 183/JP/2013_ Golden Bottling Limited Vs Addl.CIT Shri R.P. Tyagi, In respect of Shri R.P. Tyagi, though the confirmation was received on 17/12/1999 but however, when the Inspector was directed to verify from Shri R.P. Tyagi from its return of income, the Inspector has submitted a detailed report, which is as under:-
"R.P. Tyagi:- The assessee company has received Rs. 350000/- on account of unsecured loans in the year under consideration in the name of Shri R.P. Tyagi and Rs. 10,1,000/- was shown balance as on 31/3/196. The assessee company has also shown investment in the name of Shri R.P. Tyagi on account of investment in shares of assessee company of Rs. 724500/-. On verification of assessment records at Income tax office, New Delhi it was noticed Shri R.P. Tyagi is not filing his return of income. The amount received by assessee company on account of unsecured loan of Rs. 350000/- in the name of R.P. Tyagi may be added in the total income of assessee company U/s 68 of I.T. Act. Action should be taken in the case of Shri R.P. Tyagi. Action may be taken regarding the investment of Rs. 724500/- in the case of assessee company."
Thereafter the ld AR, after receipt of the report, has submitted a detailed reply on 21/2/2000. After receipt of reply, the summons were issued to the creditors through the assessee for service. However, none of the persons has attended the proceedings in response to the summons 24 ITA 183/JP/2013_ Golden Bottling Limited Vs Addl.CIT issued and further the assessee was not able to get the summons served upon them . In view thereof, the lower authorities have confirmed the addition. We have gone through the orders passed by the lower authorities, in our view, the assessee has failed to prove the identity, creditworthiness and genuineness of the transaction, therefore, the addition of Rs. 3.50 lacs has rightly be confirmed by the ld CIT(A), therefore, we also confirm the order of the ld CIT(A) in the case of Shri R.P. Tyagi.
Shri Sunil Tyagi:- The assessee has submitted that the payment was received by account payee cheque was repaid by banking channel. The confirmation was also issued by Sh Sunil Tyagi on 17/12/1999. The ld Assessing Officer has added the income of Shri Sunil Tyagi to the extent of Rs. 1.50 lacs. We have gone through the records, in our view, the order of the ld Assessing Officer was passed on assumption and surmises. Once the identity has been established, the confirmation has been given and the money was received through the banking channel. There was no reason for the Assessing Officer to make addition of Rs. 2.50 lacs, accordingly, in our view, the addition sustained by the ld CIT(A) to the extent of Rs. 2.50 lacs is required to be deleted.
25 ITA 183/JP/2013_ Golden Bottling Limited Vs Addl.CIT Accordingly, we delete the addition of Rs. 2.50 lacs in the case of Shri Sunil Tyagi.
(iv) Shri Umesh Tyagi:- The ld AR of the assessee has submitted that a payment was received through account payee cheque and repaid by account payee cheque. The confirmation was also given by the assessee on 17/12/1999. It is the case of the assessee that despite the confirmation received in the office of the Assessing Officer by way of record of ROC, the additions were made. On the other hand, the ld DR has relied on the order of the ld CIT(A). We have gone through the submissions of both the parties and material available on the record. The assessee has categorically mentioned that Shri Umesh Tyagi on the visit of Inspector to his premises has sought time of 3-4 days to file reply. However, no reply was filed and thus the amount of Rs. 1.50 lacs was added U/s 68 of the Act in the income of the assessee. During the course of argument, the ld AR failed to contradict the categorical findings recorded by the ld Assessing Officer by way of cogent evidence. Accordingly, we have no hesitation to confirm the addition of Rs. 1.50 lacs.
26 ITA 183/JP/2013_ Golden Bottling Limited Vs Addl.CIT In view of the above facts and circumstances, the assessee gets partly relief.
15. In the result, the assessee's appeal is partly allowed. Order pronounced in the open court on 04/07/2016.
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fnukad@Dated:- 04th July, 2016
*Ranjan
vkns'k dh izfrfyfi vxzsf'kr@Copy of the order forwarded to:
1. vihykFkhZ@The Appellant- M Golden Bottling Limited, Bhiwadi.
2. izR;FkhZ@ The Respondent- The Addl.CIT, Spl. Range, Alwar.
3. vk;dj vk;qDr@ CIT
4. vk;dj vk;qDr¼vihy½@The CIT(A)
5. foHkkxh; izfrfuf/k] vk;dj vihyh; vf/kdj.k] t;iqj@DR, ITAT, Jaipur
6. xkMZ QkbZy@ Guard File (ITA No. 183/JP/2013) vkns'kkuqlkj@ By order, lgk;d iathdkj@Asst. Registrar