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TMI Blog2009 (12) TMI 951X X X X Extracts X X X X X X X X Extracts X X X X ..... was for the revenue to establish that the transaction in question was bogus. This would be so even if there is a denial by the creditors that the credits were not genuine as held by the Supreme Court in CIT v. Orissa Corpn. (P.) Ltd. 1986 (3) TMI 3 - SUPREME COURT] - Mere denial by Yadavs that account in question was not operated by them would not automatically lead to the inference that assessee deposited in the said account and, therefore, it became its unaccounted income. When the premises of M/s. Yadav and Company were searched by the Department in 2002 and the statements of aforesaid two persons were recorded, it is clear that Yadav and Company was very much in existence. More interestingly, M/s. Yadav and Company even assessed to Income-tax. In the case of assessee, the assessment was completed in December, 2003. In such a scenario, it would not have been difficult for the Assessing Officer to find the whereabouts of Yadavs particularly having regard to the statement of the assessee that it had no dealing with M/s. Yadav and Company after assessment year 2000-01 and was thus unaware of its present whereabouts. Live link between the bank account of M/s. Yadav and Company a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . O.P. Yadav of M/s. Yadav and Company was recorded under section 132(4) of the Act. In this statement Sh. Mohinder Singh Yadav denied having any account in Union Bank of India, Moti Bagh Branch. This was the reason for opening the assessment by issuing notice under section 148 of the Act. The Assessing Officer treated the receipt of aforesaid consideration as sham and bogus in view of the statement of Mr. Mohinder Singh Yadav that M/s. Yadav and Company had no such account with Union Bank of India, Moti Bagh Branch. According to the Assessing Officer the assessee had introduced his own unaccounted cash through the above transactions. The Assessing Officer, therefore, concluded that this receipt was to be treated as unexplained cash credit and made the addition under section 68 of the Act. 3. We may also mention, at this stage, that the assessee had filed a copy of the account of M/s. Yadav and Company and their confirmation in respect of transactions and assessment particulars of M/s. Yadav and Company. The Assessing Officer called upon the assessee to produce the proprietor of M/s. Yadav and Company for examination. The assessee submitted that he was not aware of the present w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct in law in deleting the addition of ₹ 49,41,030 made by the Assessing Officer under section 68 of the Act on account of unexplained cash credit? 2. Whether the order passed by the learned ITAT is vitiated by perversity on account of non-application of mind to the specific observations made by the Assessing Officer in the order of assessment with regard to the evidence/material furnished by the assessee? 7. It was contended by Mr. Sahni, learned counsel for the revenue that assessee failed to comply with the notice of the Assessing Officer as per order sheet entry dated 26-8-2003, wherein the Assessing Officer in order to examine the genuineness of confirmation had asked the assessee to furnish (i) PAN, (ii ) particulars of his ward or circle where M/s. Yadav and Company is assessed to tax, and (iii) complete present address of the creditor. The assessee was also asked to produce the owner of M/s. Yadav and Company as Sh. Mohinder Yadav and Sh. O.P. Yadav of M/s. Yadav and Company searched by the Department denied any connection with the account from where cheques were received by the assessee as also the transactions. He submitted that as per the provision of section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d remanding the case to the Assessing Officer to meet natural justice but this suggestion was opposed by the assessee. The ITAT being the final fact finding authority could have remanded the matter back to the Assessing Officer if it was of the view that proper opportunity was not afforded to the assessee. 8. Mr. Vohra, learned counsel for the assessee refuted the aforesaid arguments. He highlighted the facts recorded by the CIT(A) as well as ITAT on the basis on which the addition was deleted. His submission was that the mischief of section 68 is attracted where any sum is found credited in the books of account maintained by the assessee for the relevant previous year. In CIT v. Prameshwar Bohra [2004] 267 ITR 698 1 (Raj.), it has been held that the rigours of section 68 of the Act are not attracted to the opening balance at the beginning of the year. In the instant case, the amount of ₹ 49,41,030 was received by the respondent-assessee on account of payment for sale of shares in earlier years, i.e., in satisfaction of amounts due by M/s. Yadav and Company to the respondent-assessee, which were carried forward as opening balance in the debtor s account as at 1-4-1999. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o M/s. Yadav and Company in the immediately preceding year (which has been accepted by the Department) and that the payment received during the relevant previous year was against the debt due from M/s. Yadav and Company. (c)Creditworthiness of the creditor by pointing out that the amount was received by way of cheques drawn on the bank account of M/s. Yadav and Company maintained with Union Bank of India, Moti Bagh Branch, New Delhi, which, despite denial by the Yadavs, was, as per bank records, found to be opened and operated by Sh. O.P. Yadav/Mohinder Singh Yadav. 10. The initial burden thus discharged, it was for the revenue to establish that the transaction in question was bogus. This would be so even if there is a denial by the creditors that the credits were not genuine as held by the Supreme Court in CIT v. Orissa Corpn. (P.) Ltd. [1986] 159 ITR 78 1. Mere denial by Yadavs that account in question was not operated by them would not automatically lead to the inference that assessee deposited in the said account and, therefore, it became its unaccounted income. The CIT(A) as well as the ITAT have rightly pointed out that the necessary exercise which was to be undertaken ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of Sh. Mohinder Singh Yadav of M/s. Yadav and Company. Following the order passed by the Tribunal in the case of assessee Kishori Lal Construction Ltd., the Tribunal deleted the said addition. Against the judgment of the Tribunal in Kishori Lal Construction Ltd. ITA 783/2007 appeal has been filed by the revenue which is dismissed above. 15. Learned counsel for the appellant however, argues that the case of Kishori Lal Construction Ltd. was distinguishable on facts. 16. It is not in dispute that payments were received from M/s. Yadav and Company by the assessee on account of sale and purchase of shares. Copies of the bills and contract notes were also filed in support thereof. In fact, M/s. Yadav and Company was dealing in shares. The only distinguishing factor which is tried to be shown is that no payments were made at the time of purchase of shares and only netting of amount was shown to have been received in subsequent year. This is hardly a ground of distinction between the two cases. When there are dealings in purchase and sale of shares, after adjusting the amount payable against the amount receivable if only net amount is received, that would not make the transaction ..... X X X X Extracts X X X X X X X X Extracts X X X X
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