2014 (7) TMI 249 - AT - Income Tax

Addition u/s 68 of the Act Double addition - Opportunity of being heard Held that - The Tribunal earlier held that some of the persons had introduced their money for share application through cheques and some of them had introduced the money in shares through DD the Tribunal had given specific directions to AO to examine the bank account and DDs purchased by the persons - From the reply of three persons viz Shri Santosh Gupta, Mukesh Bhatia and Shri Basant Lal it is evident that they expressed their inability to produce the bank details as the same were more than 10 years old - they furnished the photo copies of the share certificates - As far as Anand Singh is concerned, he had also stated in response to letter dated 10th July, 2008 that the payment had been made through banking channel but the bank statement was not available with him - he could not be found out subsequently and he did not furnish his photo copy of share certificate - keeping in view the smallness of amount and the matter being quite old and considering their replies, the addition made in respect of Santosh Gupta, Mukesh Bhatia and Basant Lal is liable to be set aside - in respect of other persons since assessee was not able to comply with the directions of the Tribunal, no interference is called for with the order of CIT(A) Decided partly in favour of Assessee.

Summary

Issues:
Assessment year 1997-98, additions made under section 43(3), appeal before Ld. CIT(Appeal), appeal before ITAT, notice u/s 133(6) to produce parties, non-cooperation of parties, inability to produce bank statements, addition under section 68, appeal against Ld. CIT(Appeal) order.

Analysis:
The appeal was filed against the order of the Ld. Commissioner of Income Tax (Appeals) for the assessment year 1997-98. The original assessment was completed on 28th March, 2000, with certain additions made under section 43(3). The assessee appealed before the Ld. CIT(Appeal), who partly allowed the appeal. Subsequently, the matter was taken to ITAT, which directed the assessing officer to re-examine the case. The assessing officer issued notices u/s 133(6) to fifteen persons, requesting their presence. However, some persons could not be located or did not cooperate, leading to difficulties in producing them.

The assessing officer observed that certain persons failed to provide necessary details or their whereabouts could not be confirmed. Despite multiple attempts to gather information, some individuals were unable to produce required documents such as bank statements or share certificates due to the age of the transactions. Relying on the decision of the Delhi High Court, the assessing officer held that section 68 was applicable, as the genuineness of the cash credit was not established. Consequently, an addition of Rs. 1,79,000 was sustained.

The Ld. CIT(Appeal) dismissed the appeal, emphasizing the failure to establish the creditworthiness of the parties involved. The appellant challenged this decision, arguing that since some individuals confirmed the transactions and provided share certificates, the addition should be deleted. However, the departmental representative contended that the appellant did not comply with the Tribunal's directions, justifying the sustained addition.

In its final decision, the tribunal considered the submissions and evidence. It noted the specific directions given to the assessing officer to re-examine the cases of the remaining share applicants. Based on the responses received and the inability of some individuals to provide old bank statements, the tribunal partially allowed the appeal. The addition was deleted for certain individuals, considering the circumstances, but upheld for others due to non-compliance with the Tribunal's directives.

In conclusion, the tribunal partially allowed the appeal, deleting the addition for some individuals while upholding it for others. The decision was pronounced on 25th June 2014.