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TMI Blog2019 (11) TMI 310X X X X Extracts X X X X X X X X Extracts X X X X ..... his delay is sought to be justified on account of filing of a misconceived writ petition WP (C) No. 193/2019 to assail the impugned order of ITAT. The said petition was dismissed as withdrawn vide order dated 25.07.2019, whereby, Petitioner was permitted to withdraw the writ petition with liberty to file a statutory appeal accompanied by an application for condonation of delay to challenge the impugned order. The application offers no cogent explanation for the delay in approaching the court, except for narrating the fact of filing of the above noted writ petition, which does not help the petitioner under any circumstances. The writ itself was filed beyond the statutory period of filing the appeal and moreover, the same was withdrawn on the first day of listing and the Appellant cannot vindicate the delay for the above reason. The application thus deserves to be dismissed as it does not disclose any cogent ground or reason for seeking condonation. Nevertheless, we have also heard the counsels on the merits of the case and find no ground to entertain the present appeal for the reasons stated hereinafter. 5. Common facts arising out of the two appeals before the ITAT [ ITA No. 7700/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... p was made by several telephonic calls. Pursuant thereto, the AR of the assessee appeared on 11.11.2016, 18.11.2016 and 28.11.2016 and filed submissions in part. The hearing was then adjourned to 01.12.2016, when assessee failed to appear. On 13.12.2016, on account of the aforesaid irregularity of non-attendance, a penalty under Section 271 (1) (b) was imposed. The assessee then submitted certain documents to substantiate the receipt of unsecured loan. The explanation was not found satisfactory and, accordingly, the Assessing Officer vide notice dated 22.03.2016, proposed to treat the unexplained cash credit to the income of the assessee as per section 68 of the Act. The assessee strived to explain the cash credit of Rs. 1,70,25,370/- as the closing balance for the previous year i.e. 2011-12, however the Assessing Officer added an amount of Rs. 1,80,65,314/- to the assessee's income. Being aggrieved by the aforesaid assessment order, the Appellant filed an appeal before CIT (A) which was decided against the Appellant vide order dated 18.10.2017, noting that the assessee has failed to discharge the onus of proving the credit worthiness of the lender and the genuineness of the transa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... balance. With respect to AY 2014-15, the Tribunal dismissed the appeal of the Appellant entirely and upheld the additions. 12. The aforesaid order has been challenged by way of the present appeal in respect of both the assessment years. We have heard Mr. Kirti Uppal learned senior counsel on behalf of the Appellant and Mr. Zoheb Hossain learned senior standing counsel for the Respondent. 13. Mr. Kirti Uppal argued that the tax authorities have completely ignored that material produced before them, which was sufficient to explain the receipt of Rs. 26 lacs from Ms. Jasmine Kochhar Kapoor. He submitted that the loan transactions were reflected in the audited accounts of the assessee and that the money received from Ms. Jasmine Kochhar Kapoor was by way of three cheuqes issued from her NRO account at Canara Bank and Yes Bank at Nagpur. The accounts for the said year have been audited and the disclosure made in the audit report for AY 2014-15 have been ignored. Similarly, the credit of Rs. 87 lacs in the books of account has also been well explained. The Appellant had produced a confirmation of accounts along with the copy of the bank statement, copy of the passport and also the PAN ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax authorities at the stage of fact finding. It is impermissible for the Appellant be bring fresh evidence in an appeal under section 260A. 15. We have given our thoughtful consideration to the rival submissions made by both the counsels. We find merit in the contention of Mr. Zoheb Hossain, learned senior standing counsel for the Respondent that the Appellant's approach has been completely casual and does not call for interference by us, lest we set a bad precedent and open flood gates for others in similar circumstances. Several opportunities were indeed given by the Assessing Officer, as noted in the assessment order dated 30.12.2016 (AY 2014-15), yet Appellant did not furnish the details of the unsecured loan during the hearing. Even before CIT (A), the Appellant was given several opportunities as noted in the order dated 30.01.2017 (AY 2014-15), but the Appellant did not place relevant documents to prove the genuineness of the transactions which are claimed to be unsecured loans. Therefore, at this stage, the sale deed produced by the Appellant for the first time to demonstrate that the creditor had the credit worthiness to advance the loan cannot be taken into consideratio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er substantial cause including the enhancement of the assessment or penalty (whether on his own motion or on the request of the [Assessing Officer]) under clause (a) of sub-section (1) of section 251 or the imposition of penalty under section 271.]" 16. The Division Bench of this court in Commissioner of Income Tax (Central)-I v. Manish Build Well Pvt. Lt, (2011) 184 DLT 611 held as under: "...Rule 46A is a provision in the Income Tax Rules, 1962 which is invoked, on the other hand, by the assessee who is in an appeal before the CIT (A). Once the assessee invokes Rule 46A and prays for admission of additional evidence before the CIT (A), then the procedure prescribed in the said rule has to be scrupulously followed. The fact that sub-Section (4) of Section 250 confers powers on the CIT (A) to conduct an enquiry as he thinks fit, while disposing of the appeal, cannot be relied upon to contend that the procedural requirements of Rule 46A need not be complied with. If such a plea of the assessee is accepted, it would reduce Rule 46A to a dead letter because it would then be open to every assessee to furnish additional evidence before the CIT (A) and thereafter contend that the evid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee's appeal and the powers conferred upon him under Rule 46A. The Tribunal erred in its interpretation of the provisions of Rule 46A vis-à-vis Section 250(4). Its view that since in any case the CIT (A), by virtue of his conterminous powers over the assessment order, was empowered to call for any document or make any further enquiry as he thinks fit, there was no violation of Rule 46A is erroneous. The Tribunal appears to have not appreciated the distinction between the two provisions. If the view of the Tribunal is accepted, it would make Rule 46A otiose and it would open up the possibility of the assessees' contending that any additional evidence sought to be introduced by them before the CIT (A) cannot be subjected to the conditions prescribed in Rule 46A because in any case the CIT (A) is vested with conterminous powers over the assessment orders or powers of independent enquiry under sub-section (4) of Section 250. That is a consequence which cannot at all be countenanced." [Emphasis supplied] 17. It, thus, becomes clear that taking any fresh evidence on record can only be done in certain circumstances at the appropriate stage. The same is an exception and not the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Assessing officer, so as to discharge the initial onus under Section 68 of the Act. It is for the assessee to prove by credible evidence that the transactions are genuine, since the facts are exclusively in the assessee's knowledge. It is the assessee who has entered into the transaction and thus, the person with whom he has transacted is known to him. In this regard , it would be apposite to refer to the recent judgment of the Supreme Court in the case of Principal Commissioner of Income Tax (Central) -1 vs NRA Iron & Steel Pvt. Ltd, 2019 SCC OnLine SC 311, wherein it has been held as under: "This Court in the land mark case of Kale Khan Mohammad Hanif v. CIT and, Roshan Di Hatti v. CIT laid down that the onus of proving the source of a sum of money found to have been received by an assessee, is on the assessee. Once the assessee has submitted the documents relating to identity, genuineness of the transaction, and credit-worthiness, then the AO must conduct an inquiry, and call for more details before invoking Section 68. If the Assessee is not able to provide a satisfactory explanation of the nature and source, of the investments made, it is open to the Revenue to hold th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... und credited in the books being treated as a receipt of income nature." XXX 11. The principles which emerge where sums of money are credited as Share Capital/Premium are : i. The assessee is under a legal obligation to prove the genuineness of the transaction, the identity of the creditors, and credit-worthiness of the investors who should have the financial capacity to make the investment in question, to the satisfaction of the AO, so as to discharge the primary onus. ii. The Assessing Officer is duty bound to investigate the creditworthiness of the creditor/ subscriber, verify the identity of the subscribers, and ascertain whether the transaction is genuine, or these are bogus entries of name-lenders. iii. If the enquiries and investigations reveal that the identity of the creditors to be dubious or doubtful, or lack credit-worthiness, then the genuineness of the transaction would not be established. In such a case, the assessee would not have discharged the primary onus contemplated by Section 68 of the Act." [Emphasis supplied] 20. A Division Bench of the Bombay High Court in the case of Orient Trading Co. Ltd vs Commissioner of Income Tax (Central), Calcutta, 1962 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ken by the Andhra Pradesh High Court in Raghava Reddi v. Commissioner of Income-tax and Mohideen Thamby & Co. v. Commissioner of Income-tax. We agree respectfully with the view expressed by Subba Rao C.J. (as he then was) in Raghava Reddi v. Commissioner of Income-tax, at page 948 of the report, which was as follows : "We do not think that the question of burden of proof can be made to depend exclusively upon the fact of a credit entry in the name of the assessee or in the name of a third party. In either case, the burden lies upon the assessee to explain the credit entry, though the onus might shift to the Income-tax Officer under certain circumstances. Otherwise a clever assessee can always throw the burden of proof on the income-tax authorities by making a credit entry in the name of a third party either real or pseudonymous." [Emphasis supplied] 21. The plea of the Appellant that on filing of the bank statement and PAN details, the burden stood discharged or that it shifted on to the revenue is tenuous and is not correct. The credit worthiness of the transaction cannot be said to be proved merely on the strength of the bank statement or identity of the creditor. The assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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