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Income Tax Appellate Tribunal, PANAJI, BENCH PANAJI
Per Bench : This an appeal filed by the revenue against the order passed by the CIT(A), Gulbarga, dated 29.11.2017 for the assessment year 2009- 2010, on the following grounds :- The order of the learned CIT(A) in so far as it is against the 1. appellant, is opposed to law, weight of evidence, natural justice, probabilities, facts and circumstances of the appellant's case. The appellant denies itself liable to be assessed on a total loss 2. of Rs. 15,76,829/- as against the lossof Rs.75,46,930/- under the facts and circumstances of the case. The authorities below erred in treating the share capital of Rs. 3. 13,75,000/- as unexplained money under section 68 of the Act under the facts and circumstances of the case. The order of the authorities below is bad in law as the amount 4. of Rs. 13,75,000/- cannot be brought to tax in the hands of the appellant as the mandatory conditions to invoke section 68 of the Act have not been satisfied under the facts and circumstances of the case.
2 a) The authorities beloware not justified in treating the 5. unsecured loans of Rs.45,95,101/-as unexplainedon the facts and circumstances of the case.
b) The authorities below erred in treating the loan transactions as bogus without proper examination under the facts and circumstances of the case. The authorities below failed to appreciate the fact that most of 6. the loan amounts outstanding for the year are repaid in subsequent yearsand therefore no addition is warranted on the facts of the case. The assessing officer ought to have summoned the parties to 7. verify the genuineness of the transactions on the facts and circumstances of the case. The authorities below failed to appreciate the fact that the 8. commercial operations of the company commenced only during the impugned year and there was no possibility that the said amounts represented the undisclosed income of the appellant on the facts of the case. The authorities belowfurther failed to take cognisance of the 9. various documents/ details/ information submitted by the appellant and disallowed the amounts without application of mind which is opposed to the settled principles of natural justice and thus the order needs to be deleted. The appellant craves leave to add, alter, delete or substitute 10. any of the grounds urged above.
In view of the above and other grounds that may be urged at 11. the time of the hearing of the appeal, the appellant prays that the appeal may be allowed in the interest of justice and equity.
At the outset, ld. DR submitted that the Circular issued by the CBDT on 07.03.2016 was retrospective nature and, therefore, the CIT(A) is not correct in applying the said Circular for the assessment year under consideration when the Circular was not in operational.
On the other hand, ld. AR of the assessee drew our attention to the order passed by the CIT(A), more particularly, paragraph 3.2 & 3.3 saying that the assessee has though filed all the documents satisfying the three requirements of proving genuineness of the transaction u/s.68 of the Act, however, the CIT(A) and the Assessing Officer have not considered the 3 same. He, therefore, requested to remand the matter back before the CIT(A)/Assessing Officer.
On the other hand, ld.DR submitted that sufficient opportunity was given to the assessee one at the time of passing the order u/s.263 of the Act, secondly, the order giving effect by the Assessing Officer and lastly at the stage of CIT(A), however, at all stages, the assessee has failed to produce the necessary documents.
Heard the rival contentions of the parties and perused the material on record. For completeness of the order, we would like to reproduce para 3.2 & 3.3 of the CIT(A) as pointed out by the ld. AR of the assessee, which reads as under:-
2 I have carefully gone through the assessment order and the submissions of the appellant’s AR. The appeal was heard in the light of the statement of facts and Assessing Officer’s detailed reasons of his conclusion. The appeal is adjudicated based on available recorfds. The brief facts are as under: During the course of assessment proceedings the AR was asked to produce the details of list of share holders and proof for investment, their capacity and genuineness of the transactions. With reference to the unsecured loan creditor, the AR was asked to prove the genuineness and capacity of the person form whom loan was taken with documentary evidences. In response the AR furnished the just list of shareholders and depositors. The AR was asked to prove the genuineness and capacity of persons who have advanced loans/deposits. Subsequently the AR neither attended the hearing nor did he furnish the details called for. Thus it was presumed that the appellant had nothing to offer and prove the genuineness of the transactions and capacity of the persons who have deposited or advanced the money. The onus lies on the appellant to prove the genuineness of the transactions and the capacity of the depositor who have advanced the loan/advances according to section 101, 102 and 114 of Indian Evidence Act. During the course of assessments proceedings the appellant's
4 case was posted for 6 hearings and finally on 7th hearing the assessment was concluded. The appellants argument that al lthe receipts have come through banking channels and there is no scope in the assessment of a company to examine the credit worthiness. The Assessing Officer brought on record that the mere receipt through banking channel does notipso factor proves the genuineness of the credit. Reliance was placed on Tirath Ram Gupta Vs. CIT 304 ITR 145(P&H). The onus to prove the genuineness of the trnasations lies with the appellant, which has not been discharged. Therefore, the cash credits under Sections 68 were treated asunexplained cash credits of the Income Tax Act, 1961 With regard to the increase in unsecured loans, the AR was requested to prove the identity of the person, thereir capacity to lend the money and the mode of payment etc. the AR here also was ot able to prove the loan creditor by giving full name and complete postal address, PAN, date of payment amount of loan and details of recovery of loan. It is observed from the submissions of appeal proceedings that the appellant/AR furnished skeleton particulars vide letter dated 28.03.2014 l.e on the date passing the assessment order. • The appellant's contention that the AO has not considered the request to keep the proceedings on hold till the disposal of the appeal moved by the assessee to tribunal against the order of CIT u/s 263 has no merits. As per the provisions of section 153 of the I T Act, 1961 the completion of assessments proceedings have time limits.
Hence no adjudication is required. • Similarly the appellant's contention that AO had concluded the assessment on the grounds of objections raised by CIT without independently considering the information provided by the assessee dated 28.03.2014 which was on the date of passing the assessment order stands on a weak footing and lacks merits. First of all the assessee does not co- operate and submits skeleton particulars at the last minute and presumes and litigates that the AO had not applied his mind independently on information submitted and just relied on the observations of order u/s 263. The contention is dismissed. • The AR filed a copy of above letter dated 28.03.2014 along with certain enclosures. It is observed from some instances that it is clearly evident that the appellant/AR has no proper evidences to prove its genuineness. a) Certificate from STATE BANK OF MYSORE, Bagalkot Branch dated 21.03.2014 to Dr.Lingaraj Chandargi; Cheque No.009656 dated 09.04.2009 of Rs.1 lakh, which can be encashed only during the FY 2009-10 relevant to 5 the AY 2010-11 which is different from Assessment Year in question. b) Copy of reltunr ITR-V in 3 cases and ITR 4 in 3 cases; cannot be an evidence to prove its genuineness. c) INVESTMENT CERTIFICATE issued by Mrs.Sheela S Reddy CA to Smt.Shaila B Patil stating that investment in ADIT SCANS Pvt Ltd of Rs.50,000- which was met out of her Tution Fees and Interest. • During the course of proceedings u/s 143(3) rws 263 of the Income Tax Act, neither the assessee nor his Authoraised Representative bothered to comply with the several notices issued from time to time. • The assessee nor his Authoraised Representative never came up with any sort of submissions during the course of proceeding u/s 263 of the IT Act before the CIT as well as the proceedings u/s 143(3) rws 263 of the IT Act before the AO.
3 In light of the above facts and circumstances the appellant's grounds are not sustainable and there is no room to allow the appeal of the appellant. It is observed that it was beyond doubt and clearly evident that the appellant and the AR had no explanation nor any fresh submissions to furnish to strengthen the grounds of appeal. In light of the facts and circumstances of the case all the appellant's contentions stand on a weak footing and lack of merits. The AO is justified and I do not find any need to interfere with the order. All the relevant grounds of appeal are hereby dismissed.
From the above observations of the CIT(A), it clearly shows that the assessee has filed document, however, the Assessing Officer/CIT(A) have not considered the document filed by the assessee during the course of assessment proceedings and remand proceedings. In our view, the assessee cannot be suffered on account of non-examination of the document by the revenue authorities. It is a trite law that no tax is to be recovered from any citizen unless it is the due and payable by the citizen. The assessee, in our view, is entitled to fresh hearing before the CIT(A) as requested by the ld. AR of the assessee. In the light of the above, the matter is remanded back to the file of CIT(A) with a direction to pass a reasoned speaking order in the matter after considering the document filed by the assessee and after affording opportunity of hearing and opportunity of cross objection, if any sought by the assessee before deciding the 6 matter. Needless to say, the CIT(A) shall also call for the remand report on the documents filed by the assessee after following the principle of natural justice. We expect the CIT(A) to decide the matter within a period of six months from the date of passing of this order.
In the result, appeal of the assessee is allowed for statistical purposes. Order pronounced in the open court on 07/10/ 2021. (डॉ मीठा ऱाऱ मीना) (ऱलऱत कुमार) (DR. MITHA LAL MEENA) (LALIET KUMAR) ऱेखा सदस्य / ACCOUNTANT MEMBER न्याययक सदस्य / JUDICIAL MEMBER पणजी/Panaji; ददनाांक Dated 07/10/2021 Prakash Kumar Mishra, Sr.P.S. आदेश की प्रयिलऱपप अग्रेपषि/Copy of the Order forwarded to : 1. अऩीऱाथी / The Appellant- प्रत्यथी / The Respondent- 2. आयकर आयुक्त(अऩीऱ) / The CIT(A), 3. आयकर आयुक्त / CIT 4. 5. ववभागीय प्रयतयनधध, आयकर अऩीऱीय अधधकरण, पणजी / DR, ITAT, Panjaji गाडा पाईऱ / Guard file. 6. सत्यावऩत प्रयत ////
आदेशानुसार/ BY ORDER,
(Senior Private Secretary) आयकर अपीऱीय अधिकरण, पणजी/ITAT, Panaji