Income Tax Appellate Tribunal - Bangalore
The Income Tax Officer Ward-6(2)(1), ... vs Smt Jayalakshmi N Gowda , Bangalore on 8 August, 2018
IN THE INCOME TAX APPELLATE TRIBUNAL
"B" BENCH : BANGALORE
BEFORE SHRI N.V. VASUDEVAN, JUDICIAL MEMBER
AND SHRI JASON P. BOAZ, ACCOUNTANT MEMBER
ITA No.832/Bang/2018
Assessment year : 2013-14
The Income Tax Officer, Vs. Smt. Jayalakshmi N. Gowda,
Ward 6(2)(1), No.187, 11th Cross, 4th Main,
Bangalore. BEML Layout,
Bangalore - 560 079.
PAN: AIEPJ 5739M
APPELLANT RESPONDENT
Appellant by : Smt. Swapna Dass, Jt.CIT(DR)(ITAT), Bengaluru.
Respondent by : Shri Mukesh Kumar Jain, J. CA
Date of hearing : 27.06.2018
Date of Pronouncement : 08.08.2018
ORDER
Per N.V. Vasudevan, Judicial Member
This is an appeal filed by the revenue against the order dated 16.10.2017 of the CIT(Appeals), Bengaluru-6, Bengaluru relating to assessment year 2013-14.
2. The grounds of appeal raised by the revenue reads as follows:-
"1. The order of the CIT (Appeals) is opposed to law and the facts and circumstances of the case.
2. On the facts and circumstances of the case, whether the Ld. CIT(A) was right in passing the order without examining the crucial aspects of credit worthiness and genuineness of ITA No. 832/Bang/2018 Page 2 of 4 transactions and ignoring the facts that the assessee has not submitted the required details within time for effective verification by the AO.
3. For these and such other grounds that may be urged at the time of hearing, it is humbly prayed that the order of the CIT(A), in so far as it relates to the above grounds may be reversed and that of the Assessing Officer be restored.
4. The appellant craves leave to add, to alter, to amend or delete any of the grounds that may be urged at the time of hearing of the appeal."
3. The assessee is an individual. He carried on business of tours and travels. In the course of assessment proceedings u/s. 143(3) of the Income-Tax Act, 1961 ["the Act"] for the AY 2013-14, the AO noticed that in Schedule III of the balance sheet, there were unsecured loans shown by the assessee of Rs.1,61,60,831 and received from M/s. Jaansi Sampark Kendra Consultancy Pvt. Ltd. and Rs.3 lakhs from M/s. Voice Com, in all totaling to Rs.1,64,60,830. The assessee filed confirmations along with PAN from the aforesaid two parties. To verify the genuineness and creditworthiness as well as identity of the creditors, the AO issued notice u/s. 133(6) of the Act. The said notice was returned unserved with the remarks "no such firm in this address". The AO therefore added a sum of Rs.1,64,60,830 to the total income of the assessee on account of unexplained cash credit u/s. 68 of the Act.
4. Before the CIT(Appeals), the assessee submitted that the addition made was not sustainable because addition was made for the reason that the notice u/s. 133(6) of the Act was not served on the creditors. The assessee relied on the decision of Hon'ble Supreme Court in the case of CIT v. Orissa Corporation Pvt. Ltd., 159 ITR 78 (SC) wherein it was held that once the confirmation is filed along with PAN, it is for the revenue ITA No. 832/Bang/2018 Page 3 of 4 authorities to pursue the matter further and examine the source of income of the creditor and since no effort was made by the revenue, addition made u/s. 68 of the Act cannot be sustained. The CIT(Appeals) accepted the contention of the assessee and deleted the addition made by the AO. Aggrieved by the order of CIT(Appeals), the revenue has preferred the present appeal before the Tribunal.
5. We have heard the submissions of the ld. DR and the ld. counsel for the assessee. It is not in dispute before us that the notice u/s. 133(6) of the Act was issued to the creditors on 10.03.2016. The assessment was completed on 21.03.2016 and there was no hearing after the issue of notice u/s. 133(6) of the Act. The AO therefore could not confront the fact that notice issued by him to the creditors were returned unserved. In the circumstances, the CIT(Appeals) ought to have called upon the assessee to furnish the correct address of the creditors to enable the AO to examine the identity, credit worthiness of the creditors and genuineness of the transaction. The fact that PAN has been given in the confirmation cannot be the basis to conclude that all the three ingredients u/s. 68 of the Act have been satisfied. The ld. counsel for the assessee submitted before us that he is willing to furnish the correct address of the creditors. He also prayed that the AO should be directed to verify from the PAN details about the identity and capacity of the creditors. We are of the view that it would be just and proper to set aside the order of CIT(Appeals) on this issue and restore this issue to the AO for fresh consideration. The assessee will furnish the correct address of the creditors. The AO will thereafter proceed to examine the cash credit in question in accordance with the provisions of section 68 of the Act. The AO is also directed to verify the income-tax particulars of the creditors from the PAN details given in the confirmation.
ITA No. 832/Bang/2018 Page 4 of 4The AO will afford opportunity of being heard to the assessee before deciding the issue.
6. In the result, the appeal by the revenue is accordingly treated as allowed for statistical purposes.
Pronounced in the open court on this 08th day of August, 2018.
Sd/- Sd/-
( JASON P. BOAZ ) ( N.V. VASUDEVAN)
Accountant Member Judicial Member
Bangalore,
Dated, the 08th August, 2018.
/ Desai Smurthy /
Copy to:
1. The Appellant
2. The Respondent
3. The CIT
4. The CIT(A)
5. The DR, ITAT, Bangalore.
6. Guard file
By order
Senior Private Secretary
ITAT, Bangalore.