Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, JAIPUR BENCHES,”B” JAIPUR
Before: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM vk;dj vihy la-@ITA No. 1298/JP/2018
cuke Shri Manoj Kumar Jain The JCIT, 57, Badjatia Freight Carriers, Vs. Range-2, Subhash Market, Ajmeri Gate, Ajmer. Beawar-305901. LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: AAWPJ 8620 R vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@ Assessee by : Shri S.L. Poddar (Adv.) jktLo dh vksj ls@ Revenue by : Shri K.C. Meena (ACIT) lquokbZ dh rkjh[k@ Date of Hearing : 25/03/2019 mn?kks"k.kk dh rkjh[k@Date of Pronouncement: 04/04/2019 vkns'k@ ORDER &1450/JP/2018 Shri Manoj Kumar Jain vs.ITO/ JCIT PER: VIJAY PAL RAO, J.M.
These two appeals by the assessee are directed against two separate orders of the ld. CIT(A), Ajmer dated 17.09.2018 & 30.10.2018 arising from assessment order passed U/s 143(3) and penalty levied U/s 271D of the I.T. Act. respectively. First we taken up the quantum appeal in wherein the assessee has raised following grounds:-
“1. The learned Commissioner of Income Tax (Appeals) grossly erred-in-law and on facts in confirming in addition of unexplained interest expenses amount of Rs. 90,000/-. While unsecured loan amount Rs. 10,00,000/- transaction is not related to assessee ( Mr. Manoj Kumar Jain.
The order confirmed by the learned Commissioner of Income Tax (Appeals) is bad-in-law, based on surmises & conjectures, arbitrary & Capricious, injudicious, against the settled principles of law, as such the same deserved to be amended.”
2. The assessee is an individual and derived income from transport contractor. The assessee filed e-return of income on 29.02.2015 declaring total income of Rs. 7,16,730/-. The Assessing Officer received information from ADIT(Investigation), Kota vide letter dated 15.03.2016 whereby it was informed that a search and seizure action U/s 132 of the Act was carried out on 02.07.2015 in case of Kota Dall Mill Group. &1450/JP/2018 Shri Manoj Kumar Jain vs.ITO/ JCIT During the said search and seizure action some incriminating documents were found and seized in respect of M/s Badjatya Freight Carrier, Beawar relating to the assessment year 2015-16. Thus, the AO noted from the information that the assessee received loan of Rs. 10,00,000/- in cash from one Shri Ayush Agarwal as per the seized documents. The assessee has also paid unaccounted interest in cash of Rs. 90,000/- during the year. The AO accordingly observed that the transactions were made through cash and hence, the assessee has made violation of provisions of Section 269SS of the I. T. Act. The AO also examined the assessee by recording his statement U/s 131 of the Act on 06.11.2017. The AO accordingly held that the assessee could not give satisfactory reply regarding loan received from Shri Ayush Agarwal and consequently addition of Rs. 90,000/- was made on account of unaccounted/ unexplained interest expenses. The assessee challenged the action of the AO before the ld. CIT(A) but could not succeed.
Before us, the ld. AR of the assessee has submitted that in his statement recorded U/s 131 of the Act the assessee has stated that he has not taken any loan from Shri Ayush Agarwal. Even he does not know Shri Ayush Agarwal of Kota Dal Mill group but the AO ignoring statement of the assessee has made the addition of Rs. 90,000/-. The &1450/JP/2018 Shri Manoj Kumar Jain vs.ITO/ JCIT ld. AR of the assessee has further contended that when the assessee is not having any business relation or personal relation with the alleged Shri Ayush Agarwal then how he can lend such a huge amount to the assessee. The ld. AR has referred to the alleged two slips/hundies and submitted that these documents were not signed by the assessee but these are purported to be signed by one Mr. Saurabh Jain therefore, when the assessee has no connection with the alleged person named Shri Saurabh Jain who have signed these documents then, these documents does not relate to the assessee. Thus, the ld. AR has submitted that the alleged documents seized in the search and seizure action in the case of Kota Dal Mill group does not establish the fact that the assessee has taken loan. Once the documents are neither signed nor executed by the assessee but merely the name of the assessee concerned is appearing on these documents would not establish the fact of taking loan. The ld. AR has further contended that the assessee has not carried out any transaction either directly or through any broker as alleged by the AO. Further, the Assessing Officer has made the addition based on the document which do not relate to the assessee.
The assessee has also explained the transaction with broker who is a different person and not Shri Shyamji as alleged by the AO. All the &1450/JP/2018 Shri Manoj Kumar Jain vs.ITO/ JCIT transaction with Shyam Broker has been carried out through cheque and are reflected in the books of account of the assessee therefore, the transaction in question does not pertain to the assessee. The Assessing Officer has not carried out any further inquiry to establish the fact that the transaction in the seized documents belong to the assessee.
Therefore, in the absence of any corroborative evidence to show that these documents are related to the assessee no addition can be made in the hands of the assessee. Hence, the ld. AR has submitted that the addition made by the AO on presumption and surmises is liable to be deleted.
On the other hand, the ld. DR has submitted that the seized documents clearly established the fact that the assessee has paid interest of Rs. 90,000/- on the loan of Rs. 10,00,000/- received in cash.
The said seized documents were found in the search and seizure action carried out in case of Kota Dal Mill group. During the appellate proceedings, the ld. CIT(A) has called for remand report from the AO for giving one more opportunity to the assessee. The document is clearly signed on behalf of M/s Badjatya Freight Carrier by one Shri Saurabh Jain and it also mentioned the name of the broker as Shyan ji.
The assessee was having transaction with the said broker though in his &1450/JP/2018 Shri Manoj Kumar Jain vs.ITO/ JCIT statement he has explained that he had already expired and was a different person. He has relied upon the orders of the authorities below.
We have considered the rival submissions as well as relevant material on record. The Assessing Officer proposed to make the addition of unaccounted interest payment of Rs. 90,000/- based on the information received from ADIT(Investigation), Kota wherein it has been stated that these two slips/hundies were found and seized and were executed on behalf of M/s Badjatya Freight Carrier. These two hundies were issued in the name of Shri Ayush Agarwal of Rs. 5,00,000/- each on 20.10.2014 and 22.10.2014 respectively. In order to verify the transaction of taking loan against these two hundies, the AO examined the assessee and recorded his statement U/s 131 of the Act on 06.11.2017. The relevant part of the statement of the assessee has been reproduced by the AO at page 6 and 7 are as under:- iz'u 6 d`i;k crk;s fd o"kZ 2014&15 esa vki us fdu&fdu O;fDr;ksa@laLFkkvksa ls yksu fy;k Fkk\ mŸkj eq>s ;kn ugha gS tks Hkh yksu gS og foŸk o"kZ 2014&15 dh csysUl 'khV esa fy[ks gSA iz’u 7 d`i;k crk;s fd foŸk o"kZ 2014&15 esa D;k vkius udn esa Hkh fdlh ikVhZ ls yksu fy;k Fkk\ mŸkj ugha] eSus dksbZ udn yksu ugha fy;k FkkA &1450/JP/2018 Shri Manoj Kumar Jain vs.ITO/ JCIT iz’u 8 d`i;k crk;s fd vki vk;q"k vxzoky dks dc ls vkSj dSls tkurs gS\ mŸkj ugha eS fdlh vk;q"k vxzoky dks ugha tkurk gwWaA iz’u 9 D;k vki Jh ';ke th nyky dks tkurs gS\ ;fn gkWa rks mudk iwjk irk crk;sA mŸkj gkWa] eSa Jh ';keth dks tkurk gwWa eSa mUgsa cpiu ls tkurk gwWa D;ksafd os esjs iM+kslh Fks mudk LoxZokl djhcu lky Ms<+ lky igys gks pqdk gSA os fMXxh eksgYyk esa jgrs FksA iz’u 10 eSa vkidks nks gwaMh jlhnsa fnuakd 20-10-2014 ,oa 22-10-2014 fn[k jgk gwWa tks fd nksuksa :i;s 500000@& o 500000@& dh gS] rFkk ftlls vk;q"k vxzoky] C;koj us eSa cM+tkR;k QzsV dsfj;j ds uke fy[kh gSa] ,oa Hkqxrku nyky Jh ';keth ds ekQZr gqvk gS rFkk ml jlhn ij cM~tkR;k QzsV dsfj;j dh lhy yxh gqbZ gS] ,oa izkijkbZV@eSustj ds gLrk{kj gS] rFkk blh iphZ ds vuqlkj 12 eghus dk C;kt :i;s 90000@& fy[kk gqvk gS] nwljh iphZ Hkh mlh rjg fy[kh x;h gS ftlesa N% ekg dk C;kt :i;s 45]000@& n’kkZ;k x;k gSA d`i;k crk;s mDr nksuksa jlhnsa@gqMh;ksa@cnyk iphZ;ksa dks vkius vius cgh [kkrksa esa fdl rjg fn[k j[kk gS\ mŸkj mDr nksuksa iphZ;ka eSusa ns[k yh gS] ;g iphZ;k ejsh ugha gS] ;kfu esjs }kjk fdlh dks tkjh ugha dh xbZ gS] uk gh eq>s iSls izkIr gq;s gS] uk gh esjs }kjk dksbZ C;kt dk Hkqxrku fd;k x;k gS] mDr nksuksa jlhnksa ij ik;s x;s gLrk{kj Hkh esjs ugha gSA iz’u 11 bu nksuksa iphZ;ksa ij eSa] cM+tkR;k QzsV dsfj;j dh lhy yxh gqbZ gS] ,oa izksijkbZVj@eSustj ds gLrk{kj fd;s gq;s gS d`i;k crk;s fd ;g gLrk{kj fdlds gS\ ,oa vkidh QeZ dh lhy bu iphZ;ksa ij D;ksa yxh gqbZ gS\ mŸkj mDr lhy esjs }kjk ugha yxk;h xbZ gS] ekdsZV ls lhy dksbZ Hkh cuok ldrk gS] gLrk{kj fdlds gSa] eSa ugha tkurk gwWaA &1450/JP/2018 Shri Manoj Kumar Jain vs.ITO/ JCIT iz’u 12 eSa vkidks vkids lh, }kjk izLrqr vkWfMV fjiksVZ dk yksu o ,Mokalst dk vdkmUV ¼,lsLV½ fo-o"kZ 2014&15 fn[kk jgk gwWa ftlds vuqlkj ';ke czksdj ds uke ls :i;s 900@& dks Mh-vkj- csysUl gSa] d`i;k bl ,UVªh dks le>k;s\ mŸkj Jh ';keth czksdj ls :i;s 900@& okil ysus gSa] blh dh ,UVªh djh dbZ gSA iz’u 13 nskuks gqUMh iphZ;ksa ij ftl ';keth dk nyky ds :i esa uke fy[kk gqvk gS] d`i;k Li"V djsa og O;fDr vkSj ftl O;fDr dk uke iz’u la[;k 12 esa fooj.k gS] D;k ;s ,d gh vkneh gS ;k vyx vyx gSa\ mŸkj ;g nksuksa vkneh vyx&vyx gSA ';ke czksdj okys dk edku nsyokM+k jksM ij gS] tcfd ';keth dk edku fMXxh pkSd ij gSA iz’u 14 mDr nksuksa gqUMh iphZ;ksa fnuakd 20-10-2014 ,oa 22-10-2014 ds vuqlkj vkius :i;s 10]00]000@& udn esa fcuk cgh [kkrksa esa bUnzkt fd;s vkidk yksu D;ksa uk ekuk tk;s\ mŸkj eSa fdlh dksVk nky ehy okys dks ugha tkurk gwWa] iwoZ esa eSa crk pqdk gwa fd mDr nksuksa jlhns@cnyk jlhnsa esjs }kjk tkjh ugha dh xbZ gSA rks esjs }kjk izkIr fd;k x;k yksu ugha gSA iz’u 15 bu nksuks gqUMh iphZ;ksa dks /;ku ls ns[kus ij ,slk yxrk gS fd ;s fdlh lkSjHkpUn tSu ds glrk{kj vaxzsth esa izfrr gksrs gS] buls vkids D;k lEcU/k gS\ mŸkj eSa fdlh lkSjHk pUnz tSu uke ds O;fDr dks ugha tkurk gwWaA iz’u 16 ;g Hkh rks gks ldrk gS fd eSa cM+tkR;k QzsV dsfj;j ds fcgkQ ij gLrk{kjdrkZ us gLrk{kj fd;s gks] vkSj mldh jkf’k cM+tkR;k QzsV dsfj;j ;k vkidks vizR;{k :i ls izkI gqbZ gks] bl ckjs esa vkidk D;k dguk gS\ D;ksafd vkidh QeZ dh lhy jsosU;w LVkWij ij yxh gqbZ gSA &1450/JP/2018 Shri Manoj Kumar Jain vs.ITO/ JCIT mŸkj eSusa esjs }kjk fdlh dks Hkh esjh QeZ dh lhy o lkbu dk mi;ksx yksu ysus gsrq djus dk vf/kdkj ugha fn;k x;k gSA iz’u 17 D;k vki] vkids iM+kslh ';keth dks bl ekeys esa izLrqr dj ldrs gS\ mŸkj ';keth] esjs iM+kslh dk LoxZokl gks pqdk gS] vr% eSa mUgs izLrqr djuk ugha gSA The assessee has categorically denied taking of any loan in cash and also denied that he knows any of Shri Ayush Agarwal. As regards Shri Shyam ji broker the assessee explained that he knew him since, childhood as he was neighbor and had died one and half years ago. The assessee also explained that these slips/hundies were not issued by him nor he has signed but the signature on these slips are of some unknown person. The assessee has denied to have any relation with Shri Saurabh Jain appearing on these two slips/hundies. The AO apart from these two slip/hundies bearing signature of Shri Saurabh Jain issued in favour of Shri Ayush Agarwal has not brought any material on record to conclude that the assessee took cash loan of Rs. 10,00,000/- from Kota Dal Mill group and also paid interest of Rs. 90,000/- in cash.
It is pertinent to note that once these two slip/hundies do not bear the signature of the assessee which is also not disputed by the AO then in the absence of proving the fact that Shri Saurabh Jain who was signed 9 &1450/JP/2018 Shri Manoj Kumar Jain vs.ITO/ JCIT these hundies has any relation or connection with the assessee so as to treat him as authorized person to execute two these slip/hundi on behalf of the assessee. The decision of the AO is not substantially by any tangible evidence. It is clear from the contents of the slip/hundi that Shri Saurabh Jain signed in the capacity of proprietor/manager whereas in this case the assessee is the proprietor of M/s Badjatya Freight Carrier. Further, once the assessee has denied the transaction as alleged in these two hundi/slip then the AO ought to have conducted a further inquiry from the other parties to the transaction. The assessee also denied having any relation with Shri Ayush Agarwal or with the Kota Dal Mill Group then it becomes necessary to examine Shri Ayush Agarwal to find out the correct facts as recorded in these two slips/hundies. The AO has proceeded on assumption that the assessee has taken loan because name of M/s Badjatya Freight Carrier appears on these two ships/hundies. In the statement the assessee has denied the transaction of any loan and further denied any relation with Shri Ayush Agarwal or any connection with Shri Saurabh Jain who has purportedly signed and executed these hundies. Therefore, in the absence of any further inquiry to establish the fact that the transaction was actually between the assessee and Shri Ayush Agarwal the seized &1450/JP/2018 Shri Manoj Kumar Jain vs.ITO/ JCIT document do not establish the fact that the assessee has taken any loan and executed these two hundies. This is plain and simple fact emerging from the seized documents itself that these were not signed by the assessee. Further, once the assessee has denied any transaction and any relation with other parties as well as person who has signed these hundies then the burden is shifted to the AO to establish that the transactions recorded in the seized documents pertains to the assessee.
Hence, in the absence of any fact brought on record by conducting any requisite inquiry these two sized documents do not establish the alleged fact of taking loan in cash by the assessee either from Shri Ayush Agarwal or any other person. The AO also not proved the fact that Shri Ayush Agarwal belongs to Kota Dal Mill Group whereas the documents were allegedly found and seized during the search and seizure action in case of Kota Dal Mill Group. Even the person from whose possession these documents were seized was not examined by the AO to prove the fact that the transaction is between him and the assessee. Further, the AO neither examined from Shri Ayush Agarwal nor tried to find out who is Shri Saurabh Jain or any connection with the assessee. Hence, in the facts and circumstances of the case, when the AO has not proved the transaction of alleged cash loan by the assessee and execution of these &1450/JP/2018 Shri Manoj Kumar Jain vs.ITO/ JCIT two slips/hundies by the assessee then the addition on unaccounted interest in respect of such transaction is merely based on assumption and presumption without any tangible material. Accordingly, the addition made by the AO is deleted.
In the appeal in wherein the assessee has also raised following grounds:-
“1. Under the facts and circumstances of the case the learned CIT(A) has erred in passing the ex-parte order without giving any sufficient opportunity to the assessee of being heard. 2. Under the facts and circumstances of the case the learned CIT(A) has erred in confirming the penalty of Rs. 10,00,000/- imposed by the learned AO U/s 271D of the Income Tax Act, 1961. 3. The assessee craves your indulgence to add amend or alter all or any grounds of appeal before or at the time of hearing.”
7. The AO has also initiated the penalty proceedings U/s 271D of the I.T. Act by considering the cash loan of Rs. 10,00,000/- taken by the assessee through these two slip/hundies. We have discussed all the facts and relevant aspects of the issue in the quantum appeal. Once, the assessee has denied the transaction and these two documents itself do not establish the fact of taking loan in cash by the assessee then in the absence of any further evidence or requisite inquiry to establish the transaction between the assessee and the other parties, the penalty &1450/JP/2018 Shri Manoj Kumar Jain vs.ITO/ JCIT levied by the AO is based on the assumption and presumption of fact which are not proved by any tangible material. Accordingly, in view of our findings in the quantum appeal the penalty levied by the AO is not sustainable and the same is deleted. In the result, both the appeals of the assessee are allowed.
Order pronounced in the open court on 04/04/2019.
Sd/- Sd/- ¼fot; iky jko½ ¼foØe flag ;kno½ (Vikram Singh Yadav) (Vijay Pal Rao) ys[kk lnL;@Accountant Member U;kf;d lnL;@Judicial Member Tk;iqj@Jaipur fnukad@Dated:- 04/04/2019. *Santosh. आदेश की प्रतिलिपि अग्रेf’ात@ब्वचल वf जीम वतकमत वितूंतकमक जवरू 1. vihykFkhZ@The Appellant- Shri Manoj Kumar Jain, Beawar. 2. izR;FkhZ@ The Respondent- ITO, Ward-2, Ajmer JCIT, Range-2,Ajmer. 3. vk;dj vk;qDr@ CIT 4. vk;dj vk;qDr@ CIT(A) 5. विभागीय प्रतिनिधि] आयकर अपीलीय अधिकरण] जयपुर@क्त्ए प्ज्Aज्ए Jंपचनत. 6. xkMZ QkbZy@ Guard File {ITA No. 1298 & 1450/JP/2018} vkns'kkuqlkj@ By order,
सहायक पंजीकार@Aेेज. त्महपेजतंत