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Income Tax Appellate Tribunal, JAIPUR BENCHES (SMC
Before: SHRI BHAGCHANDvk;dj vihy la-@ITA No. 850/JP/2016
आयकर अपीलीय अधिकरण] जयपुर न्यायपीठ] जयपुर IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES (SMC), JAIPUR Jh Hkkxpan] ys[kk lnL;] ds le{k BEFORE: SHRI BHAGCHAND, ACCOUNTANT MEMBER vk;dj vihy la-@ITA No. 850/JP/2016 fu/kZkj.k o"kZ@Assessment Year : 2003-04 cuke Bimal Hansaria, Income Tax Officer, Vs. Plot No. 103, Martin Ambience, Ward 4(2), Corol Apartment, D-57, Amba Jaipur. Bari, Jaipur. LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: AAJPH 2108 P vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@ Assessee by : Shri S.L. Poddar & Ms. Isha Kanongo(Adv) jktLo dh vksj ls@ Revenue by : Smt. Poonam Roy (DCIT) lquokbZ dh rkjh[k@ Date of Hearing : 25/10/2017 mn?kks"k.kk dh rkjh[k@ Date of Pronouncement : 13/11/2017 vkns'k@ ORDER PER: BHAGCHAND, A.M. This is an appeal filed by the assessee emanates from the order of the ld. CIT(A)-2, Jaipur dated 23/08/2016 for the A.Y. 2003-04.
The assessee is engaged in the business of manufacturing and trading of handicrafts items. The return of income was filed on 27/09/2003 declaring total income of Rs. 1,65,119/-. Notice U/s 148 of the Income Tax Act, 1961 (in short the Act) was issued on 30/03/2010. The assessment U/s
ITA 850/JP/2016_ 2 Bimal Hansaria Vs. ITO
147/144 of the Act was made at an income of Rs. 23,21,850/- on
28/12/2010 and addition U/s 68 of the Act was made at Rs. 19,15,740/-,
addition on account of interest disallowed of Rs. 2,02,673/- and addition
U/s 69C of Rs. 38,315/-.
In the first round of appeal, the ld. CIT(A) dismissed the appeal of
the assessee. The Hon’ble ITAT vide its order dated 11/3/2014 while
deciding the ITA No. 84/JP/2012, set aside the issue to the file of the ld.
CIT(A) with the following observation:
"We have considered the submissions of both the parties and carefully gone through the material available on record. In the present case, it is noticed that the Assessing Officer framed the assessment ex-parte under section 144 of the Act and the Ld. CIT(A) confirmed the action of the Assessing Officer by observing that there were mistakes in the PANs of the depositors given by the assessee. He also mentioned that the Assessing Officer in his remand report informed that the summons issued to certain depositors were returned on account of wrong address or incomplete address, however, the Ld. CIT(A) did not comment on the details furnished by the assessee which are placed at page nos. 1 to 67 of the assessee's paper book wherein the confirmation, acknowledgement of return of income, copy of PAN card and bank statements etc. of the depositors were given. It therefore, appears that the Ld. CIT(A) while confirming the action of the Assessing Officer had not appreciated the facts in right perspective and also did not provide opportunity to the assessee for correcting the clerical mistakes, if any, in PANs. We, therefore, considering the totality of the facts, deem it appropriate to set aside this issue back to the file of the Ld. CIT(A) to be adjudicated afresh in accordance with law after providing due and reasonable opportunity of being heard to the assessee."
ITA 850/JP/2016_ 3 Bimal Hansaria Vs. ITO
Thus, on the issue of addition U/s 68 of the Act, the Hon’ble ITAT has
observed that the ld. CIT(A) while confirming the action of the Assessing
Officer, has not appreciated the facts in right perspective and also did not
provide opportunity to the assessee for correcting the clerical mistakes, if
any, in PANs. It was also observed by the Hon’ble ITAT that the CIT(A) has
not commented on the details furnished by the assessee, which are placed
at page 1 to 67 of the paper book submitted by the assessee. These
documents includes the confirmation, acknowledgement of return of
income, copy of PAN card and bank statements etc. of the depositors.
In the second round of appeal, the ld. CIT(A) has confirmed the
addition. Now the assessee is in appeal before the ITAT by taking following
grounds of appeal:
Under the facts and circumstances of the case the Learned CIT(A) has erred in sustaining the addition of Rs. 15,07,240/- u/s 68 on account of unexplained cash credit after submitting the confirmations and other evidences of all the creditors in spite of specific direction of the Hon'ble ITAT.
Under the facts and circumstances of the case the Learned CIT(A) has erred in not deciding the ground relation addition of Rs. 2,02,673/- by disallowing of interest paid by the assessee.
Under the facts and circumstances of the case the Learned CIT(A) has erred in confirming the addition of Rs. 38,315/- u/s 69C on account of unexplained expenses on presumption basis.”
ITA 850/JP/2016_ 4 Bimal Hansaria Vs. ITO
In the ground No. 1 of the appeal, the issue is sustaining the addition
of Rs. 15,07,240/- made U/s 68 of the Act. On this issue, while pleading on
behalf of the assessee, the ld AR of the assessee has submitted that the
assessee has submitted confirmation from all these depositors. The
assessee has also submitted acknowledgement of returns, copy of PAN and
in certain cases, copy of bank statements. He also submitted that the all
these persons were assessed to income tax. They have confirmed the
accounts of the assessee. The amounts were received by cheques. He
submitted a chart whereby details regarding each and every depositor has
been provided. He also relied on the following case laws:
(i) Aravali Trading Co. Vs. ITO (2008) 8 DTR (Raj) 199
(ii) Kanhaiya Lal Jangid Vs CIT (2008) 217 CTR 354 (Raj).
(iii) Asstt.CIT Vs. Swami Complex (P) Ltd. (2007) 111 TTJ (JP)
531.
On the other hand, the ld DR has relied on the orders of the
authorities below.
I have heard both the sides on this issue. The assessee has
submitted correct PAN of all the depositors. He has also submitted
confirmation from all these depositors. In the case of M.S. Jewellers, which
is a proprietory concern of Satya Prakash Khandelwal, it is noticed that the
ITA 850/JP/2016_ 5 Bimal Hansaria Vs. ITO
amount of Rs. 50000/- were received by cheque. The assessee submitted
PAN and confirmation of the depositor alongwith full address. It is also
noticed from the account of the depositor that there was a opening balance
of Rs. 3,54,000/-. Thus, the amount of Rs. 50,000/- received by the
assessee by cheque was actually return of balance outstanding with M.S.
Jewellers, proprietory concern of Satya Prakash Khandelwal, therefore, the
ld. CIT(A) was not justified in sustaining the addition.
In the case of Rishab Marble, proprietory concern of Rajeev Jain, the
assessee has submitted full address, alongwith PAN. He has also submitted
confirmation. He has also submitted Income tax return of Rishab Marble
and also copy of relevant account. From perusal of this, it is found that this
amount was received through banking channels. The depositor has
confirmed the deposit. He has also submitted IT return of the depositor
with full address and PAN, therefore, in my considered view, the assessee
was able to discharge the onus U/s 68 of the Act in respect of this
depositor while establishing the identity of the person, genuineness of the
transaction and creditworthiness of the depositor.
In the case of Pushpa Jalan, the assessee has given full address,
PAN, copy of IT return U/s 143(1) was also submitted. Copy of relevant
bank account was also submitted. The amount received by the assessee
through cheque is duly reflected in the bank account of Pushpa Jala held
ITA 850/JP/2016_ 6 Bimal Hansaria Vs. ITO
with Canara bank Special Bench account No. 7004. She has confirmed the
transaction. Thus, in this case also, the assessee was able to discharge the
onus U/s 68 by establishing the identity, genuineness of transaction and
creditworthiness of the depositor.
In the case of Saloni Hansaria, the assessee provided correct
address, PAN, confirmation and income tax assessment records. From
perusal of the confirmation, it is noticed that this amount was old
outstanding and brought forward balance was reflected in the account. The
amount was received by cheque. Confirmation was submitted, therefore, in
this case also, the assessee was able to establish the identity, genuineness
of transaction and creditworthiness of the depositor. Hence, this addition is
deleted.
Similarly in the case of Ashok Hansaria, the assessee has furnished
full address, confirmation, copy of IT returns, PAN. All the transactions
were through cheques. In this case also, the assessee was able to
discharge the onus U/s 68 of the Act. Hence, the addition is deleted.
In the case of Sita Ram Gupta, the assessee provided full address,
his PAN. In the earlier occasion, there was a clerical mistake in providing
PAN but subsequently, the assessee has submitted correct PAN of this
depositor. All the transactions were through cheuqes. Therefore, I find no
merit in sustaining the addition.
ITA 850/JP/2016_ 7 Bimal Hansaria Vs. ITO
In the case of Rajat Medical and provision, a proprietory concern of
Radha Gopal Gupta. The assessee has furnished full address alongwith PAN
and confirmation. The ld. CIT(A) simply confirmed the addition by stating
that the copy of bank account of the depositor was not furnished. All the
transactions were through cheques. The assessee was able to discharge
the onus U/s 68 of the Act by establishing the identity, genuineness of
transaction and creditworthiness of the depositor. Hence, the addition is
directed to be deleted.
In the case of Radha Mohan Gupta, the assessee provided full
address, his PAN. In the earlier occasion, there was a clerical mistake in
providing PAN but subsequently, the assessee has submitted correct PAN of
this depositor. All the transactions were through cheuqes. Therefore, I find
no merit in sustaining the addition.
In the case of Govind Ram, the assessee has furnished full address
alongwith PAN and confirmation. The ld. CIT(A) simply confirmed the
addition by stating that the copy of bank account of the depositor was not
furnished. All the transactions were through cheques. The assessee was
able to discharge the onus U/s 68 of the Act by establishing the identity,
genuineness of transaction and creditworthiness of the depositor. Hence,
the addition is directed to be deleted.
ITA 850/JP/2016_ 8 Bimal Hansaria Vs. ITO
In the case of Giriraj Agarwal, the assessee has furnished full address
alongwith PAN and confirmation. All the transactions were through
cheques. The assessee was able to discharge the onus U/s 68 of the Act by
establishing the identity, genuineness of transaction and creditworthiness
of the depositor. Hence, the addition is directed to be deleted.
In the case of Amit Kumar Sanan, the assessee has furnished full
address alongwith PAN and confirmation. All the transactions were through
cheques. The assessee was able to discharge the onus U/s 68 of the Act by
establishing the identity, genuineness of transaction and creditworthiness
of the depositor. Hence, the addition is directed to be deleted.
In the case of Neelam Kasat, the assessee has submitted full
address, alongwith PAN. He has also submitted confirmation. He has also
submitted Income tax return and also copy of relevant account. From
perusal of this, it is found that this amount was received through banking
channels. The depositor has confirmed the deposit. He has also submitted
IT return of the deposits with full address and PAN, therefore, in my
considered view, the assessee was able to discharge the onus U/s 68 of the
Act in respect of this depositor while establishing the identity of the person,
genuineness of the transaction and creditworthiness of the depositor.
In the case of Pushpa Holani, the assessee has submitted full
address, alongwith PAN. He has also submitted confirmation. He has also
ITA 850/JP/2016_ 9 Bimal Hansaria Vs. ITO
submitted Income tax return and also copy of relevant account. From
perusal of this, it is found that this amount was received through banking
channels. The depositor has confirmed the deposit. He has also submitted
IT return of the deposits with full address and PAN, therefore, in my
considered view, the assessee was able to discharge the onus U/s 68 of the
Act in respect of this depositor while establishing the identity of the person,
genuineness of the transaction and creditworthiness of the depositor.
In the case of Ram Babu Gupta, the assessee has furnished full
address alongwith PAN and confirmation. All the transactions were through
cheques. The assessee was able to discharge the onus U/s 68 of the Act by
establishing the identity, genuineness of transaction and creditworthiness
of the depositor. Hence, the addition is directed to be deleted.
In the case of Krishna Bright Metal Ind., a proprieotry concern of
Krishan Kumar Khatuwala, the assessee has furnished full address
alongwith PAN and confirmation. All the transactions were through
cheques. The assessee was able to discharge the onus U/s 68 of the Act by
establishing the identity, genuineness of transaction and creditworthiness
of the depositor. Hence, the addition is directed to be deleted.
The different Hon’ble High Courts and the Coordinate Bench of Jaipur ITAT
in the following cases have decided such type of issue, which is as under:
(i) Aravali Trading Co. Vs. ITO (2008 8 DTR (Raj) 199
ITA 850/JP/2016_ 10 Bimal Hansaria Vs. ITO
Once the existence of the creditors is proved and such person own the credits which are found in the books of the assessee, the assessee's onus stands discharged and the later is not further required to prove the source from which the creditors could have acquired the money deposited with him either in terms of section 68 or on general principle.
(ii) Kanhiva Lai Jangid Vs. CIT (2008) 217 CTR 354 (Rai.)
Income-Cash credit-Burden of proof-Assessee having filed confirmation from the creditor where the creditor affirmed advancement of loan to assessee, no addition under s. 68 could be made in the hands of assessee on the ground that the creditor could not satisfactorily explain the source of loan- Burden on the assessee in such cases does not extend to prove the source of the creditor from where he made the advance to the assessee.
(iii) Asstt. CIT Vs. Swami Complex (P) Ltd. (2007) 111 TTJ (JP) 531
Where complete addresses of the creditors were furnished by the assessee and some of the creditors were being assessed and were having PAN's the Assessing Officer was not justified in adding the cash credits in question without verifying the confirmations filed by them by summoning the creditor and as such the addition of cash credits standing in their names was not justified.
(iv) Asa Ram Mukand Lal Vs. Asstt. CIT (1999) 64 TTJ (Del) 466
Cash credit - genuineness - Assessing Officer has not brought anything on record as an alleged to show that the loan is not genuine and that it was assessee's own money as alleged by him. He has not examined the parties who are said to have advanced money to creditor M by means of cheques. Addition cannot be sustained.
ITA 850/JP/2016_ 11 Bimal Hansaria Vs. ITO
(v) Prem Lata Sharma Vs. ITO (ITAT Jaipur Bench) ITA No. 8/JP/2009 dated 24.07.2009
Section 68 - Assessee obtained loan of Rs. 25 lac from 18 different persons. Assessee furnished confirmation and copy of Bank account in respect of 5 persons only. Assessing Officer required to produce all the creditors. Assessee fails to produce them. Assessing Officer issued summons to the creditors but none appeared, ultimately assessee surrendered the loan amount. CIT(A) confirmed the addition. Before the ITAT it was submitted that all the creditors are income tax assessee and confirmations and PAN were filed before the Learned Assessing Officer. Surrender was made to purchase peace of mind and to avoid litigation. Tribunal deleted the addition.”
In view of the above facts and circumstances, I delete the addition and this
ground of assessee’s appeal is allowed.
In the ground No. 2, the issue raised is sustaining the disallowance of
interest paid by the assessee to the deposits of Rs. 2,02,673/-.
I have heard both the sides on this issue. Since I have
deleted the addition made U/s 68 of the Act on which, interest was
paid by the assessee. Since the depositors had been found genuine,
therefore, in consequence of that the payments of interest on this deposit
is also held to be genuine. Hence, this ground of assessee’s appeal is also
allowed.
In the ground No. 3, the issued raised is confirming the addition of
Rs. 38,315/- made U/s 69C of the Act. From perusal of the order of the ld.
ITA 850/JP/2016_ 12 Bimal Hansaria Vs. ITO CIT(A), it is noticed that the ld. CIT(A) has not adjudicated upon the
ground raised by the assessee in his appeal before him. Since this ground is
not decided by the ld. CIT(A), hence the same is dismissed.
In the result, appeal of the assessee is partly allowed. Order pronounced in the open court on 13/11/2017.
Sd/- ¼Hkkxpan½ (BHAGCHAND) ys[kk lnL;@Accountant Member
Tk;iqj@Jaipur fnukad@Dated:- 13th November, 2017 *Ranjan आदेश की प्रतिलिपि अग्रेf’ात@ब्वचल वf जीम वतकमत वितूंतकमक जवरू vihykFkhZ@The Appellant- Shri Bimal Hansaria, Jaipur. 1. izR;FkhZ@ The Respondent- The ITO, Ward 4(2), Jaipur. 2. vk;dj vk;qDr@ CIT 3. vk;dj vk;qDr¼vihy½@The CIT(A) 4. विभागीय प्रतिनिधि] आयकर अपीलीय अधिकरण] जयपुर@क्त्ए प्ज्Aज्ए Jंपचनत 5. xkMZ QkbZy@ Guard File (ITA No. 850/JP/2016) 6.
vkns'kkuqlkj@ By order,
सहायक पंजीकार@Aेेज. त्महपेजतंत