Income Tax Appellate Tribunal - Chandigarh
M/S Maurya Spinning Mills (P) Ltd., ... vs Dcit, Ludhiana on 21 September, 2017
IN THE INCOME TAX APPELLATE TRIBUNAL
DIVISION BENCH, CHANDIGARH
BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER
AND MS.ANNAPURNA GUPTA, ACCOUNTANT MEMBER
ITA No.504/Chd/2014
(Assessment Year : 2006-07)
M/s Maurya Spinning Mills(P) Ltd., Vs. The D.C.I.T.,
Vill & Post Office Ramgarh, Circle-III,
Chandigarh Road, Ludhiana. Ludhiana.
P A N : AABCM1390F
(Appellant) (Respondent)
Appellant by : Shri S.K. Mukhi
Respondent by : Smt.Chander Kanta, DR
Date of hearing : 03.07.2017
Date of Pronouncement : 21.09.2017
ORDER
PER ANNAPURNA GUPTA, A.M.:
Th i s a p p e a l h a s b e e n p r e f er r e d by t h e a s s es s e e ag a i n st t h e o r d e r o f L d . C I T( A p p e a l s ) -I I , L u d h i a n a d a t e d 3 . 1 . 2 0 1 4 r e l a t i n g t o a s se ss m e n t y e ar 2 0 0 6- 0 7 .
2. A t t h e ou t s e t i t m a y b e m e n t i on e d t h a t t h e pre s e n t a p p e a l w a s e a r l i e r d i s m i ss e d f o r n o n p r o s e cu t i o n v i d e o r d er dated 11 . 1 . 2 0 16 . In p u rs ua n c e to a M i s c e l l a n e ou s Application f i l ed by the a s s ess e e the said ap p e a l was recalled vide order da t e d 2 1. 4 . 2 01 7 in M . A . N o . 2 5/ C h d /2 0 1 6 . In p u rs u a n c e to the same, the p r e s e n t ap p e a l i s b e i n g h ea r d b y u s .
3. Th e a s s e s s e e h as r a i s e d f o l l o wi n g g r o u n d s : 2
1. T h at th e L e ar n e d C IT ( A ) - III h a s e r r e d in c o nf ir min g th e d i s al l o wan c e o f th e f ol l o win g c as h c r e d i ts wi th o u t ap p r e c i a t i n g th e f ac ts o f th e c as e an d th e e v id e n c e f il e d b e f ore h i m.
S h . N ip u n G o y al 5 , 0 5 , 3 4 4 /-
S h . N ik h i l G o y al 2 , 5 0 , 5 4 0 /-
M / s L iv i n g S to n e
In te r i o r s L td . 2 3 , 0 0 , 0 0 0 /-
T o tal 3 0 , 5 5 , 8 8 4 /-
3. T h at th e ap p e l l an t h av i n g f il e d n e c e s s ar y e v id e n c e in r e s p e c t o f th e ab o v e c r e d i ts n o t l i ab l e to e x p l ain s o u r c e of s o u r ce .
4. T h at i n an y c as e th e c o nf ir mat i o n o f ad d i t i o n s is ag ai n s t th e l a w an d f ac ts o f th e c as e .
5. T h at th e A p p e l l an t c r av e s l e av e f or p e r mi s s i o n to ad d , a me n d o r al te r an y g r o u n d of ap p e al a t th e ti m e of h e ar in g . "
4. Th e o n l y i s s u e i n t h e p r e s e n t a p pe a l r e l a t e s to a dd i t i o n made on a c c o un t of unexplained cash credits in the f o l l o w i ng c a s e s:
Sh.Nipun Goyal 5 , 0 5 , 3 4 4 /-
S h . N i k h i l G o y al 2 , 5 0 , 5 4 0 /-
M / s L i v i ng S t o ne
I n te r i o r s L t d . 2 3 ,0 0 , 0 0 0 /-
5. Ta k i n g u p t h e a fo r e s a i d ca s h c red i t s a t a t i m e w e s h a l l f i r s t b e d e a l i n g w i t h t h e c a s h c re d i t s a p p e ar i n g i n t h e n a m e of S/Shri Nipun Goyal and Nikhil Goyal.
6. Brief facts r el ev a n t to the s am e are that du r i n g a s s e s s m e nt p r o ce e d i n g s , t he a s se s s e e w a s a s ke d t o f u r n i s h d e t a i l s of n e w ca s h c r e d i t s i n t ro d u c e d d u ri n g th e y e a r i n t h e n a m e s of t he a b o v e t wo p e rs o n s . Th e a s s es s e e s t a t ed t h a t t h e s o u r c e o f t h e c a s h a d v a n c e d w a s p r oc e e d s f r o m F D R s . H o w e v er , s i n c e n o e v i d e nce i n t h i s r e g a r d w a s f i l e d t h e A s s e s s i ng O f f i c e r h e l d t h at t h e s o u r c e o f t h e c a s h 3 c r e d i t s r e m a i n e d u n p r o v ed a nd as a c on s e q u en c e t h e ca s h c r e d i t s re m a i n e d u n e x p l a i ne d . He , t h e r e fo r e , m ade a d d i t i o n of the cash r ec e i v e d from t he a f o r es a i d t wo p e r s on s amounting to R s . 5 , 0 5 , 34 4 / - an d R s . 2 , 5 0 , 5 40/ - to the i n c o m e o f t h e ass e s s e e .
7. D u r i n g a s se s s m en t p r o c e e di n g s th e a s s e s s ee r e i t er a t ed i t s c o n t e n t i o n ma d e b e f o r e t h e As s e s s i n g O f fi c e r a n d f u r t h e r on the i n s t an ce of the L d . CI T( A p p e a l s ) asking to file evidence of F DR s , the a s se s se e filed c op i e s of bank s t a t e m e n ts o f bo t h t h e p e r s on s r e f l e c t i ng t h e p u r p o r t e d e n c a s h m e nt o f FD R s i n t h e sa m e . Th e L d . C I T( A p pe a l s ) a f t er examining the said b a nk s t at em e n t s rejected a s s e s s e e 's c o n t e n t i on h ol d i n g t h a t t h e s o - ca l l e d FD R s w e r e o n a c c ou n t o f d e p o s i t m a d e d u r i n g t he y e a r i t s e l f , th e s o u rce o f w h i c h r e m a i n e d u n e x pl a i n e d . Th e r e l ev a n t e xt r a c t o f t h e b a n k s t a t e m e n ts r e f err e d t o b y t h e Ld .C I T( A p p e al s ) i s as u n d e r :
S h r i N i p un G o y al :
Date Particular Withdrawal Deposit Balance 28.07.2005 Balance B/F 0 28.07.2005 3171104 5,00,000.00 5,00,000.00 31.12.2005 TDS 594.00 4,99,406.00 31.12.2005 INTT 5,938.00 5,05,344.00 31.12.2005 8775 5,05,344.00 0.00 S h r i N i k hi l G o ya l :
Date Particular Withdrawal Deposit Balance 08.12.2005 Balance B/F 0 09.12.2005 3171104 2,50,000.00 2,50,000.00 31.12.2005 Interest on term dep: 773.00 2,50,773.00 773.00 Tds:0 31.12.2005 Interest 548.00 2,51,321,00 4 31.12.2005 Interest excess paid 773.00 2,50,548.00 31.12.2005 8775 2,50,548.00 0.00
8. A g g r i e v e d b y t he s a m e , t h e a s se s s e e h as n o w ra i s e d t h e a b o v e g ro u nd b e f o r e u s c on te s t i n g t h e ad d i t i o n m a d e o n a c c o u n t o f a f o r es a i d t w o c a s h c re d i t s . D u r i n g t he c o u r s e o f h e a r i n g b e f or e us L d . c o u n s e l f or a s s e s s e e s t a ted t h a t a l l e v i d e n c e t o p r ov e t h e g en u i n e ne s s o f t he a f o res a i d c a s h c r e d i t s ha d b e en f i l e d . Th e L d . co u n s e l f or a s s ess e e s t a t ed t h a t t h e o r i g i n al a f f i d a v i t s f r om t h e c r e d i to r s a l o n g w i t h c o n f i r m e d c o p y of a c c o u n t i n th e b o o k s o f t h e as se s s e e h a d been filed. Th e L d . c o u ns e l fo r a s s e s s e e s t a t ed t h a t i t w as also s u b mi t t e d before t he lower a u t h or i t i e s that t he c r e d i t o r s we r e re g u l a r i n c om e ta x a s s e s s e s a nd t h e i r P A N n u m b e r s h ad b e en p r o v i d ed . I t wa s f u r t h er p o i n ted o u t t h a t t h e a f fi d a v i ts o f t h e c r ed i t o r s d u l y s t a t ed t h e s o ur c e o f t he a m o u n t a s en c a sh m e n t o f FD R s be l o n g i n g t o t h e m. Th e L d . c o u n s e l f o r a s se s s e e , t h e r e f or e , s t a t e d t h a t t he a s s e s se e c o m p a n y h ad f u l l y d i s c h ar g e d i t s o n u s b y es t a b l i s h i n g t h e i d e n t i t y a n d g e nu i n e n e s s of t h e c r e d i t o r s. Th e Ld . c o u n s el f o r a s s e ss e e f ur th e r s t a t ed t h a t tr e a t i n g th e a f or es a i d c a s h c r e d i t s as u n e xp l a i n e d fo r t h e r e a s o n t ha t t h e s o u r c e of making the F DR s was not explained, t a nt a mo u n t e d to a s k i n g t h e a ss e ss e e t o e x p l a i n t he s o u r c e o f s o ur c e o f t h e c a s h c r e di t s , wh i c h w a s n o t pe r m i s s i bl e i n l a w a n d t h e a f o r e s a i d c a s h cr e d i t s c ou l d n o t b e t r e a t ed a s un e x p l a i n ed f o r t h i s r e a s o n. F u r t h e r t h e L d . c o u n s e l f o r a s ses s e e s t a t e d t h a t t h e d o c u men t s p r o vi n g t he s o u r c e of m a k i ng t h e F DR s w e r e n o w av a i l ab l e w i t h th e a s se s s e e w h i ch h e w i s h e d t o 5 f i l e b e f o r e u s as a d d i t i o n a l e vi d e n c e s . A n a pp l i c a t i o n i n t h i s r e g a rd d a t ed 7 . 9 . 2 0 1 5 wa s f i l e d d u r i n g t h e c o u r s e o f h e a r i n g , st a t i n g t h e r e a s o n f o r n o t f i l i n g t h e s am e b e f o re t h e l o w e r a u t h o ri t i e s w a s t h a t i t w a s n o t a wa r e th a t i t w a s r e q u i r e d t o f i l e th e s o u r c e o f s our c e a l s o .
9. Th e L d . D R , o n th e o t h e r h an d , su p p o r t e d th e o r de r o f the L d . CI T( A p pe a l s ) and v e he m e n t l y ob j e c t ed to t he a d m i s s i o n o f a ddi t i o n a l e v i d e n ce .
10. W e h a v e h e a r d t h e c o n t e n ti o n s o f b o t h t h e p ar t i e s, perused the ord e r s of the a ut h o r i t i e s below and g on e t h r o u g h t h e d o cu m e n t s f i l e d b efo r e u s . W i t h o u t r e f e r r i n g t o t h e a d d i t i o n a l e vi d e n c e f i l e d b y th e a s s e ss e e , w e f i n d m er i t i n t h e co n t e n ti on o f t h e L d . c o un s e l f o r a s s e ss e e. Th e i s s u e b e f o r e u s pe r t a i n s t o g e n u i ne n es s o f c a s h c r e d i t s r e c ei v ed f r o m t w o p e r s on s S / S h r i N i k h i l G o y a l a n d N i p u n G o y a l a m o u n t i n g t o R s. 2 , 5 0 , 5 4 0/ - a n d R s . 5 , 0 5 , 34 4 / - r es p e c t i v e l y. Th e i d e n t i t y o f t h e d o n o r h a s n ot b e e n d o u b t e d . Th e f a c t t h a t t h e ca s h ha s b e e n a dv a n c ed f r o m t h e F D Rs e n c a s h e d a n d w i t h d r a w n b y t h e d o n o r s, h a s a l s o n o t b ee n d o u b t e d . W h a t h a s p r o mpt e d t h e R e v e n ue t o d o u b t t h e g en u i n e n e s s of transactions is the fact that the FDRs were made from d e p o s i t s m ad e du r i n g t h e y e a r i t s e l f , t h e s ou r c e o f w h i c h r e m a i n e d u n e x pl a i n e d . I n sh o r t , t h e R ev e n u e ' s ca s e i s t h a t s i n c e t h e s o u r ce o f t h e s o u r c e h a s n o t b e e n p r o v e d , the t r a n s a c t i o n i s no t g e n u i n e. We d o n o t a gr e e w i t h t h i s c o n t e n t i on o f t he R e v e n ue . A s l o n g a s i t i s a c ce p t e d t hat t h e d o n o r h a s g i v e n c a s h ad v a n ce b y e n c as h i n g th e i r F D R s, 6 t h e g e n u i n e ne s s o f t h e t r a n s a c ti on s t a n d s e s t a b l i sh e d o n a l l a s p e c t s i . e . i de nt i t y a n d c r e d i t w or t h i n e s s o f t h e do n o r s a n d g e n u i n e n es s o f t h e t r a n s a c t i o n . From which source the d o n o r s m a d e t he F D R s h a s n o r e fl e c t i o n o n t he g en u i n e n e s s o f t h e tr a n s a ct i on s . I t m a y be c as t d o u b t o r a r e fl e c t i o n o n t h e t a x ab l e i n c om e o f th e d on o r b u t t he d o ne e ca n n e i t he r b e e x p e c t e d t o no r c a n h e p o s s i bl y p r o v e t h e s o ur c e o f t h e s o u r c e o f th e cas h r e c ei v e d b y h i m . His burden lies only to t h e e x t en t of p r ov i n g t h e s o u rc e o f t h e c a s h r e c e i v e d , w hi ch i n t h e p r e s e n t ca s e h a s b e e n am p l y p r o v e d a nd a c c e p t ed a l s o b y t h e R eve n u e a s be i n g fr o m e n c a sh m e n t o f F D R s belonging to t he donors. Th u s the assessee has duly d i s c h a r g ed h i s b u r d e n o f p r o v i n g t h e g e n u i n e ne s s o f t he c a s h a d v a n c es g i v e n i n t h e p r e se n t c a s e . M o r eo v e r , i t i s f o u n d t ha t i t i s n o t t h e c a s e o f th e R e v e nu e t ha t t h e FD R s w e r e m a d e f r o m t h e c a s h d e p o si t s i n t he b a n k a c c o u n t of t h e d o n o r, n e i t he r d o e s i t a p p e ar t o b e t he c a sh d e p o s i ts f r o m t h e b a n k s t a t e m e n t re p r od u c e d i n t h e o rd e r o f t h e L d . CI T( A p p e a l s ) a n d a l s o b y us i n t h e e a r l i er pa r t o f t h e o r d e r . Th e b a n k s t a t e m e nt d o e s n o t m e n t i o n t h e c r e a t i o n of the FDR by way of cash deposits. I n f ac t , i t o n l y m e n t i o ns a number b e f o re it. Th e r e f ore , there is no basis f or b e l i e v i n g t h a t t he F D R s f o r m p a rt o f t h e c a sh d e po s i t s . For t h i s r e a s o n a l s o, i t i s i m m a t e r i a l w h a t w a s t h e s o u r c e o f making the F DR s for the p u rp o s e of e s ta b l i s h i n g th e g e n u i n e n es s o f t h e t r a ns a c t i on o f c a sh a d v anc e d t o t h e assessee. I n vi e w o f t h e s a me , w e h o l d t h a t t h e c a sh c r e d i t s o f R s . 5 ,05 , 3 4 4 / - r e c ei v e d b y S h r i N i p n l G o y a l a n d 7 R s . 2 , 5 0 , 54 8 / - r ec e i v e d by S h ri N i k h i l G o ya l s ta n d e x p l a i ne d a n d a d d i t i o n m ad e i n t h i s r eg a rd i s , t h e r ef o r e , d i r e c t e d to b e d e l e t ed .
11. C o m i n g t o th e i ss u e o f c a s h r e c ei v e d f r o m M/ s Li v i n g S t o n e I nt e r i o r Lt d . o f R s . 2 3 l a cs , t h e f a c t s a r e t h a t th e Assessing O f f i c er found that th e r e was u n se cu r e d l o an r e c e i v e d b y t h e a s s e s s e e o f R s . 24 l a c s o n 1 9 . 0 1 .2 0 0 6 . The a s s e s s e e f i l e d a c o p y of t h e b an k a c c o un t o f M / s L i vi n g Stone Interiors Ltd. for the c o r r e s p o nd i n g pe r i o d . Th e Assessing O f fi ce r noted that on t he s a me date i.e. 1 9 . 0 1 . 2 0 06 t h e re w a s a c a s h d ep o s i t o f R s. 2 4 , 00 , 0 0 0 / - i n t h i s a c c o un t . Th e s o u r c e of t h i s a m o u n t w a s s ta t e d t o b e cash of Rs . 2 3 , 00 , 0 0 0 / - re t u r n ed by Shri Satish G o y a l, D i r e c t o r w i th w h o m t h i s a m o u n t w a s c l a i m e d t o be l y i n g a s i m p r e s t m o ne y a n d b a l a n c e R s.1 , 0 0 , 0 0 0 /- o u t o f c a s h i n h a n d o f t h e c o m p a n y . Th e A s s e s s i n g O f f i c e r s u mm o n e d S h ri S a t i s h G o ya l u/ s 1 3 1 o f t he I . T. A c t a nd r ec o r d e d h i s s t a t e m e n t. S h ri S a t i s h G o e l c o ul d n o t t e l l si n c e w h e n t h i s imprest money was lying with him. No evidence was filed to s h o w t h a t a n y s u c h i m p re s t mo n e y o f M /s L i v i n g S t o ne I n te r i o r s L t d. wa s l y i ng w i t h hi m . Th e A s se s s i n g O f fi c er o b s e r v e d t h at t h e r e w a s n o j u s t i f i c a t i o n i n t h e cl a i m t h at S h r i S a t i s h Ku ma r G o y a l w i l l k e ep s u c h a h e a v y a m o u n t i n c a s h w i t h h i m f or a l o n g p e r i o d an d n o t d e p o si t th e s a m e i n t h e b a n k . Th e A s s e s s i n g O ff i c e r a c c o r d i n g l y h e l d t h a t t he s o u r c e o f t h i s am o u n t i n t h e h an d s o f t h e c r e d i to r w a s n o t p r o v e d . Th e A s se s s i n g O f fi c e r ob s e r v e d t ha t t he c l a i m o f 8 S h r i S a t i s h G o ya l t h a t t h e i m p re s t m o n e y w a s l y i n g w i th h i m p r i o r t o 1 . 4 .2 0 0 5 a s s o m e d i s p u t e s w e r e g o i ng o n w i t h t h e b a n k w a s w i t h o u t a n y f o r ce a s n o e v i d e n c e th e r e o f w as f i l e d . Th e A s s e s si n g O f f i ce r a c c ord i n g l y h e l d t h a t t h e s o u r c e o f R s . 2 3, 0 0 , 0 0 0/- o u t o f c a s h c r ed i t o f Rs . 2 4 , 00 , 00 0 / - w a s not proved. He a c c o r d i n gl y made an addition of R s . 2 3 , 0 0 ,0 0 0 / - as u n e x pl a i n e d cash cr e d i t to the t ot a l i n c o m e o f t h e ass e s s e e .
12. During the ap p e l l a t e p r oc e ed i n g s the a s se s s e e r e i t e r a t ed t h a t th e s o u r c e o f R s. 2 3 l a c s w a s t he i m p r e s t a m o u n t l y i n g w i t h t h e d i r e c t or , b u t n o e v i d e n ce w i t h r e g a r d t o t h e s a m e w a s f i l e d ev e n d ur i n g a p p e l l at e pr o c e ed i n g s . In t h e a b s en c e o f t h e s a me , t he Ld . CI T( A p p e a l s ) up h e l d th e a d d i t i o n m a d e b y t h e A s s e s s i ng O f f i c er b y t re a t i n g th e a f o r e s a i d a mo u nt r e c e i v e d f r o m M / s L i v i n g S t o ne I n t er i o rs L t d . a s un e x p l ai n e d .
13. D u r i n g t he c o u rs e o f h ea r i n g b ef o r e u s , L d . c ou n s e l f o r t h e a s s es s e e r e i t e r a t ed t h a t t h e a m o u n t of R s . 2 3 l a cs h a d b e e n ad v a n ce d b y M / s L i v i ng S t o n e I n t e r i or s L t d . f r om the a m ou n t wh i c h r e c ei v e d b a ck from its d i r ec t o r S hr i S a t i s h G o y al t o w h o m t h e s a i d am o u n t w a s g i ve n b y w a y o f imprest. A s evi d e n c e o f t h e sa m e , t h e L d . co u n s e l f o r assessee filed certain e v i d e n ce s before us by way of a d d i t i o n al e vi d en c e s a l o n g w i th ap p l i c a t i on u nd e r R u l e 2 9 o f t h e A p p e l l a t e Tr i b u n a l R ul e s , 19 6 3 s t a t i n g t h e r e a s o n f or n o t f i l i n g t h e s am e b e f o r e t h e l o w e r a u t h or i t i e s as u n d e r :
"6.The appellant was duly represented by Shri Ranjit Vijh 9 CA who was of the bona-fide belief that the appellant was not required to prove source of source of creditors especially when the amounts have been received by account payee cheques and the creditors are holding PAN from the department and have filed income tax returns for the impugned assessment year. Living Stone Interiors Ltd had not filed the return as there was loss. However regular Balance Sheets were prepared by the Limited Company. Now the appellant humbly prays that the following additional evidence which was not placed /could not be placed before the lower authorities may please be admitted in the discretion bestowed by the legislature to impart Justice to the appellant.
14. Th e a d d i t i o n a l e v i d e n c e s w h i ch w e r e s o u g h t t o be f i l e d w e r e a s un d e r :
1. The company is maintaining regular books of account and Balance Sheets are prepared at the close of the year by the Company's Chartered Accountants.
The Balance Sheet as on 31.03.2005 shows an imprest of Rs.23 Lacs in the name of Satish Kumar Goyal Director and cash in hand of Rs.84,439/- is also shown in the Balance sheet.
2. As per copy of account of Satish Goyal in the books of company this amount of Rs. 23 Lacs was returned by Satish Goyal on 19.01.2006.
3. As per cash book of the company there is a cash in hand of Rs.102961.88 on 19.01.2006 and cash of 23 Lacs was received from Satish Goyal. Cash of Rs.24 was deposited in the Andhra Bank on 19.01.2006 and a cheque for Rs.24 Lacs was issued in the name of Maurya Spinning Mills P Ltd. This amount stands debited in the bank account of company on 19.01.2006.
(Documents enclosed)
15. Th e L d . D R , o n th e o t h e r h a n d , ob j e c t e d t o t h e f i l i n g o f t h e a d di t i o n al ev i d e n c e s b y w a y o f i t s wr i t t e n su b m i s s i o ns w h i c h a r e a s u nde r :
"1. The assessment order in this case was passed on 30/12/2008 making addition Rs.30,55,884/- on account of deposits in the bank account (classified as unsecured loan) 10 which were not explained with documentary evidence. Before the CIT(A) also the assessee did not produce any documentary evidence with regard to the source of credits. Accordingly vide order dated 3/1/2014, that is after a gap of 5 years the C1T(A) upheld the additions made by the Assessing Officer.
2. The assessee has now filed additional evidence and in its application dated 7/9/2015 under rule 29 has stated that its authorized representative Shri Ranjit Vijh CA was in bonafide belief that it was not required to prove the source of source of creditors. In this respect it is humbly submitted that the assessee did not produce the requisite evidence simply because it didn't want to. Personal belief cannot be reasonable cause for non production of evidence before lower tax authorities. If so be the case then the necessity of producing additional evidence at this stage that too after so many years (nearly 7 years) doe not arise.
3. It is well settled law that the onus is on the assessee to prove identity, genuineness of transaction and creditworthiness of the creditors. So how could the assessee form a belief that documentary evidence is not material to discharge its onus? And if that belief is formed then what prompted its change after so many years? The assessee's application under rule 29 is silent on these basic points and hence deserves to be rejected.
4. The additional evidence pertains to transaction in A.Y.2006-07 i.e. period beyond 10 years. The correctness and authenticity of these evidences cannot be verified at this time. There are chances of manipulation as is illustrated below:
The assessee filed balance sheet and cash book etc. of Living stone Interiors Ltd from pages 9 to 12. These are self serving documents which are not verifiable from any independent agency /department. It may be noted that this company did not file any return of income for the relevant year even though it was requisite documents and balance sheet before the ROC. As per the balance sheet the source of cash in the hands of Satish Goyal is the cash of Rs 25 laks received from share holders on issue of its shares. The assessee has not 11 offered any explanation regarding the issue of share for Rs 25 lakhs and it expects that the additional evidence should be accepted without further query or verification. The additional evidence submitted are hence inadequate and not verifiable.
5. The Hon'ble Punjab & Haryana High Court in the case of Jawahar Lal Jain, HUF Vs CIT 370 ITR 712 confirmed the order of the Tribunal(Chandigarh) in rejecting application for admission of additional evidence filed by the assessee because no satisfactory explanation had been furnished to demonstrate why the materials ought to be produced now could not be produced earlier.
6. Following the above decision of the Hon'ble Punjab & Haryana High Court, Honble ITAT Chandigarh in the case of Haris Chander, Ymunagar Vs ITO (ITA No 91/chd/2015) vide order dated 10/07/2015 did not admit additional evidence with regards to the source of cash deposits in the bank account. The application of the assessee for admission of additional evidences/documents was accordingly rejected.
The Honble ITAT further observed that, "It is, therefore, clear that the above additional evidences were never produced before the authorities below at any point of time. Therefore, there are chances of manipulating the books of account and copy of the trader's account for the purpose of misleading the authorities below". The facts and issue in the present case is similar to that of case of Haris Chander, Yamunagar and hence this case law is squarely applicable.
7. In view of the above the assessee's application under rule 29 may kindly be rejected as the reasons for non submission of evidence before lower tax authority is not just and reasonable."
16. W e h a v e h e ar d bo t h t h e p a rt i e s . Th e c o n t e nt i o n o f t he a s s e s s e e vi s - à - vi s t h e a m o un t r e c e i v e d fr o m M / s L i v i n g S t o n e I nt e r i o rs L t d . o f R s . 2 3 l a cs i s th a t th e s am e w a s o ut o f m o n e y r e ce i v ed b y M / s L i v i ng S t o n e I n t e ri o r s L t d . f r o m i t s d i re c t o r S h r i S a t i s h G o y a l t o w h o m t he s a i d am o u n t h ad been g i ve n by way of i mp r e s t . U n d e n i ab l y , t hi s 12 s u b m i s s i on / e x p l a n a t i o n of th e a s s es s e e was n ot s u b s t a n t i a t e d b ef o r e t h e l o w er au t h o r i t i es . B e f or e u s , t h e L d . c o u n se l f o r a s s e s s e e h a s fi l e d a n a pp l i c a ti o n t o f i l e e v i d e n c e s i n s up p o r t o f i t s a bo v e c o n t e n t i on w h i c h a r e r e p r o d u c ed a b o ve . Th e L d . c o u n s e l f o r a s s e s s e e h a s s t a t e d that it was u nd e r the bo n a f i de belief that it was n ot r e q u i r e d t o p r ov e t h e s o u r ce of s o u r ce a n d s i n c e t h e se e v i d e n c e s g o to th e r o o t o f t he ma t t e r t he y m a y be a d m i t te d . Th e Revenue, on the o th e r hand, has challenged t he a d m i s s i o n o n t he g r o u n d t h a t t he d o c u m e n t s d o n o t a p p e ar t o b e g e nu i n e an d n o p l au s i b l e r e a s o n f or p r o du c i n g t h em b e f o r e t he l o w e r a u t h o r i ti e s h a s b e e n g i v en . Co n s i d e r i ng the a r g u m en t s of both the parties we hold that t he a d d i t i o n al e v i den c e s n o w be i n g f i l e d b y th e L d . c o u n s e l fo r a s s e s s e e c a n n o t b e a d m i t te d f o r th e f o l l o w i n g re a so n s :
i) Th e L d . c o u ns e l f o r a s s e s s ee h as f i l e d a b a l a n ce s h e e t o f M / s L i vi n g s t o n e I n t e r i o rs L t d . , re f l e c ti n g t h e p u r p o r t e d i m p r es t g i v e n t o t h e d i r e c t o r which is not even an audited B a l a n c e S h ee t . Th e s a i d B a l a n c e S h e e t i s n ei t h e r c e r t i f i ed b y t h e a u d i t o r s a s r e f l ec t i n g t h e t r u e s t a t e of a f f a i rs o f th e c o m p a n y a s r eq u i r e d u n d e r t h e C o mp a n i e s A c t, n o r i s i t s i gn e d by t h e a u d i t o r s . I t s i mp l y c a r ri e s th e s t a m p o f t h e au d i t o r which is i n i ti a l e d . M or e o v e r the a c co m p an y i n g documents f o r mi n g part of the financial s ta t em e n t h a v e n o t b e en fi l e d . F u r th e r a s p o i n t e d o u t by t h e L d . D R n o i n c o me t a x r e t u r n h a s b e e n f i l e d o f t he s a i d 13 c o m p a n y a n d no r h a v e t h e sa i d b a l a n c e s he e t b e e n s u b m i t t e d t o t he R O C a s r e q u i r e d b y l a w i n b o t h c a s e s .
Th i s f a c t h a s n o t b e e n c o n t r o v ert e d b y t h e L d . C ou n s e l f o r t h e a s se s s e e. Th e r e f o r e w e a g r e e w i t h t h e L d . D R t h a t t h e s a i d doc u m e n t s ap p e a r t o b e s e l f s e r vi ng o n l y a n d n o t ge n u i n e.
ii) M o r e o v e r n o p l au s i b l e e x p l a na t i on h a s b e e n g i v e n f o r n o t ad d u c i ng t h e s e do c u m en t s b e f o re t h e l o w er a u t h o r i t i e s . Th e c o n t e n t i o n o f th e L d . C o un s e l fo r t h e a s s e s s e e t h a t si n c e t h e as s e s s ee b e l i e v e d t h a t he w a s n o t r e q u i r ed t o p r o v e t h e s o ur ce o f s o u r c e , we h o l d , merits no c o nsi d e r a t i o n s i n ce the sa i d do cu m e n t e v i d e n c e s th e s ou r c e o f t h e a dv an c e o n l y a n d not t h e s o u r c e of s o ur c e. M / s L i v i n gs t o ne h a v i n g c l ai m ed t h e s o u r c e o f t h e ad v a n c e m a de t o t h e a s s e ss e e ou t o f i m p r e s t g i v e n t o t h e d i r e c to r r e c ei v e d b a c k , th e f ac t u m o f h a v i ng g i v en t h e i m p re s t i n ea r l i e r ye a r pr o v es t h e s o u r c e o f t h e ad va n c e o n l y.
17. We, t h e r e fo r e , reject the a d mi s s i o n of ad d i ti o n a l e v i d e n c e s f i l e d b y t h e a s s e ss e e a n d u p h o l d t he a d d i t i o n m a d e o n a c co u n t o f c a s h c re d i t s i n t h e n a m e o f M / s L i v i n g S t o n e I n te r i o r s Lt d . o f R s. 2 3 l ac s .
18. I n e ff e c t , t h e a pp e a l o f t h e a s s es s e e i s p a r t l y a l l o w ed w i t h t h e a d d i ti on m a d e o n a c c ou n t o f c a s h c r e di t s r e c e i v ed f r o m N i p u n G o yal & N i k h l i G o y a l a m o u n t i n g t o Rs . 5 , 0 5 , 3 44 & R s . 2 , 5 0 , 5 40 / -r e s p e c t i ve l y b e i n g d e l e t e d , w h i l e t h a t o n account of c ash c r e d i ts r e ce i v e d from M/s L i v i n g s t on e 14 I n te r i o r s Pv t . L i m i t e d a m o u n t i ng t o R s . 2 3 , 0 0 , 000 / - being upheld.
19. I n t h e r e s u l t , th e a p p ea l o f t he a s s e ss e e i s pa r t l y allowed.
O r d e r p r on o u n c ed i n t h e O p e n Cou r t .
Sd/- Sd/-
(SANJAY GARG) (ANNAPURNA GUPTA)
JUDICIAL MEMBER ACCOUNTANT MEMBER
Dated : 21 s t September, 2017
*Rati*
Copy to:
1. The Appellant
2. The Respondent
3. The CIT(A)
4. The CIT
5. The DR
Assistant Registrar,
ITAT, Chandigarh