MOBILINK,ASANSOL vs. I.T.O.,WARD-2(2), ASANSOL

O R D E R

PER DR. MANISH BORAD, ACCOUNTANT MEMBER :

Assessment Year: 2012-13 Mobilink 2 3. Facts in brief are that the assessee is a partnership firm and filed its return of income for Assessment Year 2012-13 on 30/03/2013. Case selected for scrutiny through CASS followed by issuance of notice u/s 143(2) and 142(1) of the Act. During the course of assessment proceedings, the Assessing Officer noticed that the assessee has received loan of Rs.91,65,000/- and Rs.10,00,000/- from M/s. Sriram Marketing Services Pvt. Ltd. and M/s. Sriram Power Steel Ltd. The ld. Assessing Officer observed that bank statement filed by the assessee are incomplete. Based on certain other observation, the Assessing Officer came to a conclusion that the genuineness of the transactions and creditworthiness of the parties cannot be established and the same were, therefore, added as unexplained cash credit u/s 68 of the Act. The assessee further failed to get any relief before the ld. CIT(A).

Assessment Year: 2012-13 Mobilink 3 Sriram Marketing Services Pvt. Ltd. and M/s. Sriram Power Steel Ltd.. We notice that both these parties have confirmed the said transactions giving reply to the AO and also giving confirmation of account exhibiting the said transactions which have been carried out through banking channels. We observe that the bank statement of both the alleged cash creditors were not made available with the AO. Before us, the assessee has filed complete bank statement. On perusal of the bank statement of M/s. Sriram Marketing Services Pvt. Ltd. held with Punjab National Bank. We notice that the cash creditor is located at Ranchi, Jharkhand. Assessee gave funds to the said cash creditor amounting to Rs.6,79,000/- during 08/04/2011 to 07/09/2011 and thereafter received Rs.91,65,000/- during 01/10/2011 to 03/01/2012 and further gave Rs.5,50,000/- during 03/12/2012 to 19/12/2012. Closing credit balance in the books of account of the assessee is Rs.79,56,000/-. We also notice that in the bank account of M/s. Sriram Marketing Services Pvt. Ltd., there are regular cash deposits before making any transfer. It was also brought to our notice that M/s. Sriram Marketing Services Pvt. Ltd., has not filed its income tax return for AY 2012-13. The source of income of the said cash creditor is not known. Prima facie it indicates that the alleged cash creditor used its bank account for rotation of funds and, therefore, it is not established that whether M/s. Sriram Marketing Services Pvt. Ltd. has sufficient creditworthiness to give the alleged sum to the assessee and also the genuineness of the transactions remains in doubt. Similar is the case for the other cash creditor, namely, M/s. Sriram Power Steel Ltd.. We Assessment Year: 2012-13 Mobilink 4 also notice that the bank account reveals that there are regular cash deposits before issuing cheques and in absence of any financial statement and other relevant details, the alleged cash deposit in the bank account of the alleged cash creditors remains in doubt. Therefore, in order to examine whether the nature and source of cash credit is explained by the assessee, Hon’ble Apex Court in the case of Kale Khan Mohammed Hanif v. CIT [1963] 50 ITR 1 (SC) laid down the proposition that the onus of proving the source of a sum of money found to have been received by an assessee, is on the assessee. Once the assessee has submitted the documents relating to identity, genuineness of the transaction, and credit-worthiness, then the AO must conduct an inquiry, and call for more details before invoking Section 68. If the Assessee is not able to provide a satisfactory explanation of the nature and source, of the investments made, it is open to the Revenue to hold that it is the income of the assessee, and there would be no further burden on the revenue to show that the income is from any particular source.