YOGENDRA S. SINGH,MUMBAI vs. ATUL KUMAR, ACIT 17(3), MUMBAI

Learned counsel appearing for the assessee submitted that the assessee was running a proprietary concern and the same was converted into a company with name M/s. V. Bird Shipping Agencies Pvt. Limited. He submitted that the assessee is having a running account with the above said company and he was operating as his current account. At the year end, i.e., as on 31.3.2012, a credit balance of ` 271.59 lakhs was outstanding in the name of the assessee in the books of the above said company, i.e, it was payable by the assessee to the above said company. The assessee offered a sum of ` 59.85 lakhs as deemed dividend u/s. 2(22)(e) of the Act. The Assessing Officer treated the balance amount of ` 211.73 lakhs as unexplained cash credit u/s. 68 of the Act. He submitted that the assessee challenged the said addition by filing appeal before the learned CIT(A) and furnished a written

On the contrary, learned Departmental Representative strongly opposed the petition filed by the assessee.

When the bench asked learned AR to explain the nature of documents, which were filed before the Assessing Officer in order to prove the creditworthiness of the M/s. V. Bird Shipping Agencies Pvt. Limited, the learned AR submitted that the assessee was not properly advised to furnish the relevant details before the Assessing Officer. He submitted that M/s. V. Bird Shipping Agencies Pvt. Limited is having sufficient funds and is also having turnover of ` 10 crores. Hence creditworthiness should not have been doubted with. He further submitted that the assessee may be given an opportunity, which will enable the assessee to furnish all the details to prove the creditworthiness of the creditor.

We heard learned Departmental Representative. Since the matter in dispute relates to the addition made u/s 68 of the Act, the bench took up the appeal for hearing with the concurrence of both the parties.

We heard the parties and perused the record. We noticed that the assessee has taken funds from a related concern. According to learned AR, the related concern is a private limited company and is having turnover of more than ` 10 crores. It was further submitted that the creditworthiness should not have been doubted with. However, we noticed that the assessee has failed to furnish relevant documents before the Assessing Officer and there should not be any doubt that the initial burden to prove the cash credit is placed upon the assessee. However, considering the facts of the case, we find merit in the prayer of the assessee for fresh opportunity to present his case properly

In the result, the appeal filed by the assessee is allowed for statistical purposes and Stay Application filed by the assessee is dismissed.