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Income Tax Appellate Tribunal, IN THE INCOME TAX APPELLATE TRIBUNAL
Before: SHRI BEFORE SHRI G.D. AGRAWALG.D. AGRAWALG.D. AGRAWAL & G.D. AGRAWAL & AND & SHRI SUDHANSHU SRIVASTAVA HRI SUDHANSHU SRIVASTAVA
PER G.D. AGRAWAL, VP PER G.D. AGRAWAL, VP :- PER G.D. AGRAWAL, VP PER G.D. AGRAWAL, VP This appeal by the assessee for the assessment year 2004-05 is directed against the order of learned CIT(A)-VI, New Delhi dated 8th February, 2011.
Following grounds have been raised by the assessee :-
“a) The documentary evidence relating to the identity of the creditor, his financial worthiness and genuineness of transaction furnished in the course of set aside assessment proceedings by the appellant had neither been found to be false nor controverted in any way. On the basis of documentary evidence about the nature and source and particularly in view of the fact that the creditor was a 2 ITA-1673/Del/2011 regular tax assessee having been allotted PA No. by the Income-tax department, the onus of proof that lay upon assessee stood conclusively discharged. b) The Mg. Director was not under the control of the Appellant. Accordingly, in the course of assessment proceedings, the assessee made a specific request to the A.O. to summon the creditor by issue of Notice u/s 131 of I.T. Act. The Assessing Officer neither issued summon u/s 131 of I.T. Act nor brought on record any evidence in rebuttal of the evidence adduced by the Appellant. c) That on facts and in law and in view of various judicial pronouncement particularly the decision of the Hon'ble Supreme Court in Orissa Corporation Ltd., case 159 ITR 78(SC), there was no legal warrant to treat the deposit as unexplained income chargeable to tax. d) That the addition of Rs.10 lacs made by the A.O. and sustained by the ld.CIT(A) deserves to be deleted being void, without jurisidciton and untenable on facts and in law.”
The facts of the case are that the original assessment was completed u/s 143(3) vide order dated 20th December, 2006 in which the Assessing Officer made the addition of `10 lakhs for unexplained liability. When the matter reached to the ITAT, the ITAT in vide order dated 11th November, 2008 set aside the matter to the file of the Assessing Officer with the following finding:-
“5. We have considered the rival contentions of both the authorities, perused records and carefully gone through the orders of the tax authorities below. We find that in the instant case the CIT(A) was not justified in deleting the impugned addition merely by placing reliance on these submissions of the assessee as well as on the documents filed on record by the assessee. We are further of the opinion, that once the AO has asked the assessee to give correct address of the creditor and the assessee failed to do so, the AO was prevented from conducting proper enquiries to verify the identity and credit worthiness of the 3 ITA-1673/Del/2011 creditor as well as the genuineness of the transaction. However, keeping in view of the submissions of the ld.A.R. for the assessee wherein he stated that even today he was prepared to give correct address of the creditor company and was also ready to produce M.D. of the company for examination before the AO relating the genuineness of the loan transaction. We consider it appropriate to set aside the orders of the tax authorities below with regard to impugned addition of Rs.10 lakhs and restore the matter to the file of the AO to reexamine the same afresh on merits after affording reasonable opportunity of being heard to the assessee. It is enjoined upon the assessee that it would give the correct address of the creditor to the AO and shall produce the M.D. of the company for examination before the AO for verifying the genuineness of the loan transaction of Rs.10 lakhs. With these observations the orders of tax authorities below are set aside and the issue restored to the file of the AO for compliance.”
During the set aside proceedings, the Assessing Officer asked the assessee to produce the Managing Director of the creditor company. However, inspite of sufficient opportunity, the assessee did not produce the MD of the creditor company. Therefore, the Assessing Officer again made the addition of `10 lakhs for unexplained liability. The order of the Assessing Officer is sustained by the learned CIT(A). Hence, this appeal by the assessee.
At the time of hearing before us, the learned counsel argued at length and his submission was twofold – (i) the assessee has already discharged the onus by producing necessary evidence in support of the liability and (ii) the Assessing Officer ought to have issued notice u/s 131 to the creditor. In support of this contention, he relied upon the following decisions :-
(i) CIT Vs. Gangeshwari Metal (P.) Ltd. – [2014] 361 ITR 10 (Delhi). (ii) ITO Vs. Shanti Enterprise –[2016] 71 taxmann.com 275(Gujarat).
4 ITA-1673/Del/2011
Learned CIT-DR, on the other hand, relied upon the orders of authorities below and he stated that the Tribunal has set aside the matter with the specific purpose as per the request of the assessee. However, in the set aside proceedings, the assessee did not comply with the undertaking given by him before the ITAT. In the above circumstances, the Assessing Officer was fully justified in making the addition of `10 lakhs.
We have carefully considered the submissions of both the sides and have perused the material placed before us. We find that in the first round of the proceedings before the ITAT, it was submitted on behalf of the assessee that the assessee is ready to give the correct address of the creditor company and also ready to produce the MD of the company for examination before the Assessing Officer. However, we find that during the set aside proceedings, the assessee furnished a letter dated 5th November, 2009 in which the assessee referred to the documents produced by the assessee during the original assessment proceedings and claimed that those documents were sufficient to discharge the burden. With regard to production of the MD of the creditor company, the assessee requested for issue of summons u/s 131 to the Assessing Officer. We find that the matter was set aside to the file of the Assessing Officer by the ITAT because the assessee has claimed before the ITAT that it will produce the correct address of the creditor and also the MD of the creditor company. We find that the assessee did not fulfill the offer made by him before the ITAT. The Assessing Officer was not making the fresh assessment but he was only giving effect to the order of the ITAT in which he was bound by the direction given by the ITAT. Since the assessee did not comply with the direction of the ITAT which was given on the offer of the assessee
5 ITA-1673/Del/2011 made before the ITAT, therefore, in our opinion, the order of the Assessing Officer is quite justified and has rightly been upheld by the learned CIT(A). We, therefore, find no merit in the appeal of the assessee.
In the result, the appeal of the assessee is dismissed. Decision pronounced in the open Court on 03.08.2016.