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Income Tax Appellate Tribunal, ALLAHABAD BENCH ALLAHABAD
Before: SHRI.VIJAY PAL RAO & SHRI RAMIT KOCHAR
O R D E R PER SHRI VIJAY PAL RAO, JUDICIAL MEMBER:
This appeal of the assessee is directed against the order dated 30.03.2015 of CIT(A)-Allahabad for the A.Y. 2010-11. The assessee has raised the following grounds: “
1. That in any view of the matter assessment made on an income of Rs.2,99,84,250/- vide order dated 21.03.2013 passed u/s. 143(3) is bad both on the facts and in law.
2. That in any view of the matter income as disclosed in the return should have been accepted.
That in any view of the matter after filing of the return no notice u/s. 143(2) was served on the assessee nor assessee has any information about service of notice and this fact duly mentioned in the assessment order hence in absence of proper service of notice assessment as made is illegal and void abinitio.
4. That in any view of the matter addition of Rs.2,22,735/- as mentioned on account of advances from parties are not correct and thus the action of learned Commissioner of Income Tax (Appeals) is highly unjustified. 5. That in any view of the matter addition of Rs.2,57,00,000/- by alleging unexplained cash credit added u/s. 68 by the assessing officer and confirmed by the Commissioner of Income Tax Appeals) is highly unjustified. The learned Commissioner of Income Tax (Appeals) was wrong in mentioning the correct facts nor any opportunity was allowed to ascertain the facts hence his action is highly incorrect. 6. That in any view of the matter addition of Rs.2,57,00,000/- was the earned money received during the year was from definite persons/contractors and from definite sources, amount received and refunded through cheque hence addition u/s 68 as made by the Assessing Officer and his action as confirmed by Commissioner of Income Tax (Appeals) are highly unjustified. 7. That in any view of the matter the earnest money of Rs.2,57,00,000/- was from definite persons who are man of status as well as they are income tax assessees having pan numbers. The said amount was not in the nature of loan but was the security deposit and amount was received through cheques hence the addition made without appreciating the correct facts properly which is highly unjustified. 8. That in any view of the matter in the remand proceedings before Assessing Officer voluminous evidences in form of paper book containing 424 were again filed along with affidavit of director of the company, amount of Rs.2,57,00,000/- was reconciled with bank account of the assessee company but ignoring the evidences placed on record the addition as made by the assessing officer and confirmed by the Commissioner of Income Tax (Appeals) is highly unjustified. 2
9. That in any view of the matter findings and observation of both the two lower authorities with regard to addition of Rs.2,57,00,000/- are incorrect and contrary to the actual facts of the case.
That in any view of the matter the case laws as cited by learned Commissioner of Income Tax (Appeals) at page 4 are not applicable to the assessee’s case as the facts are quite different. 11. That in any of the matter interest charged u/s 234A, 234B is highly unjustified. 12. That in any view of the matter the appellant reserves his right to take any fresh ground of appeal before hearing of appeal.”
2. The assessee company was engaged in the business of Civil Contract and filed its return of income on 31.03.2011declaring total income of Rs.21,810/-. During the course of assessment proceedings, the Assessing Officer noted that in the balance sheet as on 31.03.2010, the assessee has shown the earnest money of Rs.3,79,00,000/-, which was Rs.1,22,00,000/- as on 31.03.2009. The Assessing Officer asked the assessee to explain as to why, the earnest money of Rs.2,57,00,000/- should not be considered as unexplained cash credit, for the year under consideration and added to the income of the assessee u/s. 68 of the Act. The Assessing Officer has noted that the assessee has offered no explanation about the nature and source thereof and accordingly, made the addition of Rs.2,57,00,000/- u/s.68 of the Act as unproved cash credit. The assessee challenged the action of the Assessing Officer before the CIT(A) but could not succeed.
3. Before the Tribunal, the ld. AR of the assessee has submitted that the assessee has shown the earnest money from the contractors, which was received through cheques/RTGS and duly reflected in the bank statement as well as books of account. The earnest money received from various contractors as security deposit for carrying out contract work as per the agreements which were duly produced before the authorities below. He has further contended that the agreement as well as the relevant details and evidence were duly produced before the Assessing Officer. However, the Assessing Officer without considering the record produced by the assessee has made an addition on the ground that assessee has not explained the source and nature of the cash credit. The ld. AR has referred to the letter filed before the Assessing Officer as well as the affidavit of the assessee ascertaining the fact that the assessee filed the relevant details and evidence before the Assessing Officer. He has further submitted that in the subsequent year the assessee has repaid this amount, as the assessee has not carried out the work against which the earnest money was received and the assessee company was also closed. Thus, he has submitted that the Assessing Officer as well as CIT(A) has passed the impugned orders without considering relevant details as well as evidence filed by the assessee.
The ld. AR has further submitted that assessee has also challenged the validity of the assessment order on the ground that notice u/s. 143(2) of the Act was not served upon within the period of limitation. He has referred to the application seeking certified copy of the assessment proceedings/note sheet and submitted that till date the Assessing Officer has not provided the same. The ld. AR has submitted that the matter may be remanded to the record of the Assessing Officer to decide the same afresh after verification of the evidence and details produced by the assessee as well as to decide the validity of the assessment order for want of a valid notice u/s. 143(2) of the Act.
On the other hand, ld. DR has submitted that Assessing Officer has stated in the assessment order that the notice u/s. 143(2) was duly served on the 4 assessee through speed post on 29.09.2011, therefore, the notice was issued within the period of limitation and also served on the assessee. He has also referred to the finding of ld. CIT(A) in Para 3 of the impugned order and submitted that the ld. CIT(A) has given a finding that the notice u/s. 143(2) was served on the assessee within the period of limitation. As regards the addition made u/s. 68 of the Act, the ld. Assessing Officer as well as ld. CIT(A) has given the detailed finding regarding each of the creditor from whom the assessee has allegedly received the earnest money. The ld. DR has submitted that assessee has not produced the complete details to discharge its onus of identity of the creditor, creditworthiness of the creditor and genuineness of the transaction. He has relied upon the orders of the authorities below.
We have considered the rival submissions as well as relevant material available on record. There is no that dispute as on 31.03.2010, the assessee has shown earnest money of Rs.3,79,00,000/- out of which Rs.1,22,00,000/- was an opening balance as brought forward from the preceding year. The Assessing Officer, accordingly, made an addition of the balance amount of Rs.2,57,00,000/- u/s. 68 of the Act, for want of any explanation about the nature and source of the said credit entry. The assessee has challenged the action of the Assessing Officer before the ld. CIT(A) and explained the source and nature of this amount being the earnest money received from various persons against the contract work to be carried out by the assessee. The assessee has contended that the amount was received through banking channel and under the contract as security deposit for the contract work to be carried out by the contractor however, the contract work was not carried by the contractor and the amount was refunded by the assessee in the subsequent year. We note that the Assessing Officer has made the addition for want of any explanation however, the assessee 5 has referred to various documents filed before the Assessing Officer, which is also stated in the affidavit filed by the assessee. The Assessing Officer even during the remand proceedings has not considered the alleged details and record produced by the assessee. Thus, in the facts and circumstances of the case, when the amount was claimed to have been received by the assessee through banking channel and under the agreement, which was claimed to be repaid by the assessee in subsequent year then the relevant documentary evidence is required to be verified before deciding the issue of unexplained cash credit. Hence, this issue is set aside to the record of the Assessing Officer to properly verify, examination and consider the evidence produced by the assessee. At this stage, we do not wish to express any opinion on the merit of the issue remanded to the Assessing Officer. Needless to say, the assessee be given an appropriate opportunity of hearing before deciding the issue afresh.
The assessee has also raised Ground No.4 regarding addition sustained by the CIT(A) towards the alleged booking amount received in cash. Since the other issue is remanded to Assessing Officer for verification and for adjudication this issue also remanded to the Assessing Officer with similar directions.
As regards the validity of assessment proceedings for want of the valid notice u/s. 143(2) of the Act, we find that though the Assessing Officer has stated in the assessment order that the notice u/s. 143(2) issued and served on the assessee by speed post on 29.09.2011 however, it is not clear, what is the date of the notice u/s. 143(2) and when it was dispatched. Therefore, in the absence of the relevant record, this issue cannot be decided conclusively. The assessee though applied for certified copy of the assessment proceedings however, the same has not been supplied to the assessee till date. Therefore, in the facts and circumstances of the case, we set aside this issue to the record of the Assessing 6 Officer to decide the same after considering the objections of the assessee as well as the relevant fact regarding the date of issue of notice, dispatch and service of the same within the period of limitation.
In the result, appeal filed by the assessee is allowed for statistical purposes.