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TMI Blog2016 (10) TMI 49X X X X Extracts X X X X X X X X Extracts X X X X ..... son of Onkar Singh is said to have confirmed questions No.6 and 7. In their cases also it has nowhere been discussed by the Commissioner as to what were the questions in their cases. As per the statements of said Kapil Kumar and Ramesh Kumar, they did not loan any money to the assessee or its finance division. This contradicts the assessee's stand that this fact has also been ignored by the Commissioner. The statements of the other persons who allegedly had given loans to the assessee through its finance division have also not been considered the way they deserved to be. It is thus clear that the order of the Commissioner lacks consideration of material and crucial facts. The Commissioner further goes on to hold that the transactions have “more or less been unequivocally confirmed.” This finding of his is not only self-contradictory but also against the record. The order of the Tribunal does not clarify the matter either. No discussion is found therein with regard to the above-referred statements of the alleged creditors of the assessee-firm. It was observed that the imprest account “does not necessarily” form part of capital account. Reliance was placed on the stat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Whether the Hon'ble ITAT Bench, Amritsar was right in facts and circumstances and in law in not appreciating the case law of Hari Chand Virender Paul vs. Commissioner of Income tax reported at 140 ITR P H vide which it has been held that Credits in the name of third parties-Assessee must prove identity of credits, capacity of creditor to advance money and genuineness of transaction-then only burden shifts to the Department? The relevant facts which need to be noticed for adjudicating upon the present appeal are that on 01.12.2003, the assessee filed its return declaring therein an income of ₹ 11,77,772/-. The same was processed under Section 143(1) of the Act. Thereafter the assessee was issued a notice under Section 148 of the Act as to why it may not be re-assessed. The reassessment proceedings were initiated on the basis of a complaint dated 18.05.2009 which had been received in the office of the assessing officer wherein it had been asserted that one Ajay Kumar, a partner of the assesseefirm, had filed documentary evidence in the court of Additional Civil Judge, Gurdaspur, wherein a suit for specific performance between the complainants and the said Ajay Kumar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gh the audit report of the assessee attached with the return of income pertaining to the assessment year in question, the assessing officer found no reference to any branch office by the name of Ajay Electronics Finance Division. No cash in hand was also found in the account of the abovesaid Finance Division. In fact, Ajay Electronics Finance Division was shown in the list of sundry creditors whereas if it was a branch as projected by the assessee, it should have figured in the capital head. The assessing officer further found that the profit and loss account of Ajay Electronics Finance Division was not attached with the return of income and that if Ajay Kumar as a partner had withdrawn money from the assessee for personal use, the same should have been shown in the capital account. Finding the explanation of the assessee to be not genuine, the income of the assessee was re-assessed. As a result thereof, addition of ₹ 1,70,00,000/- was made in the hand of Ajay Kumar and on a protective basis in the hand of the assessee. The assessee challenged the re-assessment order by way of an appeal before the Commissioner of Income Tax (Appeals) (for short the 'Commissioner'). ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of M/s. Ajay Electronics, you have made the payments of ₹ 20,000/- on the dates 24.12.02, 25.12.02, 26.12.02 27.12.02. Please confirm the above payments? A : Sir, I have made the payments on above dates to M/s. Ajay Electronics Co. in cash. 9) Rakesh Kumar, S/o Sh. Ram Nath, V. Budha Ngr., Pathankot (Confirmation made about cash payments made to the appellant firm on 2nd, 3rd, 27th and 29th Dec., 2002 vide reply to Q.No.6 and further vide reply to Q.No.7, the deponent averred that my total sales during the above period i.e.2002-03 about ₹ 3-4 lacs. 10) Gurmeet Singh, S/o Channa Singh, R/o. Master Colony, Dinanagar (confirmation made about cash payments made on 7th, 8th and 9th Dec., 2002 in reply to Q.No.6 and further in answer to Q. No.7, it is deposed that I have made about ₹ 2-3 lacs purchases during the same FY 2002-03. 11) Ashok Kumar, S/o. Kishan Chand, R/o Main Mkt. Jugial (in reply to Q.No.11, the deponent averred that I have not made continuously payment of ₹ 20000 cash during the period 2-12-02 to 15-12-02, mostly the payments are made on weekly basis. Thus, from the above, it can be inferred that the A.O. has carried out verif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Prem Kumar while replying to queries No.5 and 6 is stated to have made purchases of ₹ 4 lacs from the assessee and payments for such purchases were stated to be made in cash sometimes on a weekly or fortnightly basis. We are at a loss to find out from the order of the Commissioner as to what was asked for in questions No.5 and 6. Further, the statement of Kapil Kumar does not reveal when the stated purchases and the payments for the same had been made. As per the statements of above-said Kapil Kumar and Ramesh Kumar, they did not loan any money to the assessee or its finance division. This contradicts the assessee's stand that this fact has also been ignored by the Commissioner. The statements of the other persons who allegedly had given loans to the assessee through its finance division have also not been considered the way they deserved to be. It is thus clear that the order of the Commissioner lacks consideration of material and crucial facts. The Commissioner further goes on to hold that the transactions have more or less been unequivocally confirmed. This finding of his is not only self-contradictory but also against the record. The order of the T ..... X X X X Extracts X X X X X X X X Extracts X X X X
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