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TMI Blog2021 (3) TMI 426X X X X Extracts X X X X X X X X Extracts X X X X ..... preceding para s of this order . The assessee being aggrieved has raised ground number 4 in memo of appeal filed with tribunal agitating that the authorities are silent as to set off of current year loss against income charged to tax u/s 68 of the 1961 Act. Thus, in the fitness of things, interest of justice and fair play to both the parties, we are restoring this issue of invocation of Section 115BBE of the 1961 Act by AO for denying set off of current year loss against income assessed u/s 68 of the 1961 Act to the file of learned CIT(A) for fresh adjudication and to pass speaking and reasoned order as to applicability of Section 115BBE read with Section 68 on the facts and circumstances of the assessee s case before denying set off of current year loss against income charged to tax u/s 68 of the 1961 Act, in set aside remand proceedings. - ITA No. 32/ALLD/2020 - - - Dated:- 10-3-2021 - Shri.Vijay Pal Rao, Judicial Member And Shri Ramit Kochar, Accountant Member For the Appellant : None For the Respondent : Smt. Namita S. Pandey,CIT- DR ORDER PER SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER: This appeal, filed by assessee, being ITA No. 32/Alld/2020, is dire ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the matter, charge of penal interest under section 234A, 234B and 234C of the Act is highly unjustified. 7 .That in any view of the matter, the assessee reserves its right for any fresh ground, addition, alter, delete before hearing of the appeal. And a reasonable opportunity of being heard should be given before taking any coercive action against the assessee. It is therefore respectfully prayed that the assessment order may kindly be revised accordingly and relief be allowed. 3. The brief facts of the case are that the assessee e-filed his return of income with department declaring total income of Rs. Nil and current year loss of ₹ 2,66,78,299/- on 29.03.2017. The case of the assessee was selected by Revenue for limited scrutiny by CASS, for the following reasons: a) Whether sundry creditors are genuine. b) Whether the investment and income relating to commodity transactions are duly disclosed. c) Whether the investment and income relating to securities (derivative) transactions are duly disclosed. d) Whether deduction claimed on account of interest expenses is admissible. 3.2 Statutory notices u/s 143(3) and 142(1) of the 1961 Act were issue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rties for necessary verification. The AO on the request of assessee summoned Shri Anuj Sonkar by issuing summons u/s 131(1) of the 1961 Act. The said Shri Anuj Sonkar appeared before the AO and denied having any financial transactions with the assessee. The AO also recorded his statement in which he categorically denied to have any financial transactions with the assessee. The said statement of Shri Anuj Sonkar is reproduced by AO in his assessment order. The copy of said statement of Shri Anuj Sonkar was supplied by AO to the assessee for rebuttal and show cause notice was issued by AO to assessee to explain as to why additions be not made by invoking provisions of Section 68 of the 1961 Act. The assessee submitted in rebuttal that said Shri Anuj Sonkar has purposefully denied the financial transactions with the assessee, but no record/evidences as per AO was produced by assessee to substantiate his stand. The assessee also did not ask for cross examination of said Shri Anuj Sonkar. The AO from the bank statements of the assessee maintained with ICICI Bank ( account numbers 628201540419 and 30901515693) and also from ledger account of Shri Anuj Sonkar observed that there were c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r before ld. CIT(A). Since, the assessee completely failed to comply with the notices for hearing issued by ld. CIT(A) and did not entered appearance, the ld. CIT(A) was pleased to dismiss appeal filed by the assessee, vide appellate order dated 19.12.2019, by holding as under:- Decision: Notices dated 28.01.2019, 24.07.2019, 22.08.2019, 25.09.2019, 29.10.2019 and 11.12.2019 fixing the date for compliance on 12.02.2019, 08.08.2019, 03.09.2019, 03.10.2019, 05.11.2019 and 17.12.2019 were issued through official Income Tax Business Application (ITBA network)/ speed post. These notices were served on the e-mail address/ speed post submitted by the applicant while filing the appeal. No written submission or any paper books has been filed in support of any of the grounds of appeal in this office. It appears that assessee is not interested in pursuing his own appeal. The case is being decided in absence of any submission or attendance by the assessee or his/her A.R, On each of these days when the case was fixed for hearing, it is seen that the assessee has remained absent, despite the fact that notice for the specific dates of hearing have consistently been sent to the addre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nal. The appeal was received by post by Registry on 12.02.2020. Defect memo was issued by Registry to the assessee asking to supply certified copy of appellate order passed by ld. CIT(A). The assessee did not comply with the defect memo issued by Registry and certified copy of ld. CIT(A) appellate order was not supplied to the tribunal. The department has supplied certified copy of ld. CIT(A) order which is placed in file. The notice dated 08.01.2021 was issued by Registry of the tribunal to the assessee fixing date for hearing on 20.01.2021 . The assessee did not appear before the Bench when the appeal was called for hearing through virtual mode on 20.01.2021 .The Bench on 20.01.2021 directed Registry to issue notice to the assessee through RPAD and also by email and the next date of hearing was fixed before the Bench on 24.02.2021. The Registry sent notices by RPAD on 21.01.2021 vide number RU008672957IN and email was also sent by Registry on 20.01.2021 at 5.55PM. The notice sent by RPAD was received back by tribunal from postal authorities with the remark Refused . Thus, the assessee has refused to receive postal envelop containing notice for hearing, dated 20.01.2021, wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther business to the tune of ₹ 2,85,66,234/- in the return of income filed with the Revenue. The assessee had claimed ₹ 2,66,78,299/- as current year loss to be carried forward. The assessee has shown following sundry creditors in his Balance Sheet and ledger accounts:- S.No. Creditors Name from Balance Sheet Closing Balance(Rs.) as shown in Balance Sheet Fresh Credit in F.Y. 2014-15 noted from ledger 1. Anuj Sonkar 2,07,30,500 2,55,48,500 2. Chhatoo Prasad 22,00,000 22,00,000 3. Krishna Mohan 13,00,000 13,00,000 4, Siddharth Agrawal 68,11,500 68,11,500 6.3 The assessee submitted confirmation from Mr. Chhatoo Prasad Gupta and Mr. Krishna Mohan before AO, and payments from both these parties were received through banking channel vide NEFT/RTGS and the Revenue has accepted these sundry creditors and no additions were made by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . CIT(A) and the appeal filed by assessee was dismissed by ld. CIT(A) . Before us, also none appeared on behalf of the assessee when this appeal was called for hearing from time to time and no paper book nor written submissions etc. has been filed by the assessee. Before proceeding further, it is important to reproduce provisions of Section 68 of the 1961 Act as was applicable for relevant year, as under: Cash credits. 68.Where any sum is found credited in the books of an assessee maintained for any previous year, and the assessee offers no explanation about the nature and source thereof or the explanation offered by him is not, in the opinion of the [Assessing] Officer, satisfactory, the sum so credited may be charged to income-tax as the income of the assessee of that previous year : [Provided that where the assessee is a company (not being a company in which the public are substantially interested), and the sum so credited consists of share application money, share capital, share premium or any such amount by whatever name called, any explanation offered by such assessee-company shall be deemed to be not satisfactory, unless- (a) the person, being a resid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ved. Thus, in nut-shell the assessee did not discharged primary onus as is cast by the 1961 Act within the provisions of Section 68 of the 1961 Act. It is only when the primary onus is discharged by tax-payer, then the onus will shift to Revenue to bring on record cogent material to bring to tax income by way of cash credit within provisions of Section 68 of the 1961 Act which section creates a deeming fiction wherein cash credits which are not satisfactorily explained are deemed as income of the taxpayer, but in the instant case the assessee has miserably failed to discharge primary onus as is cast u/s 68 of the 1961 Act with respect to cash deposits in his bank accounts with ICICI bank to the tune of ₹ 3,22,68,500/- allegedly from these two creditors. 6.5 Reference is also drawn to decision of Hon ble Supreme Court in the case of Sumati Dayal v. CIT reported in (1995) 214 ITR 801(SC), wherein Hon ble Supreme Court held as under: 4. It is no doubt true that in all cases in which a receipt is sought to be taxed as income, the burden lies on the department to prove that it is within the taxing provision and if a receipt is in the nature of income, the burden of proving ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng rigid about it. Herein the assessee was receiving some income. He says that it is not his income but his wife's income. His wife is supposed to have had two lakhs of rupees neither deposited in banks nor advanced to others but safely kept in her father's safe. Assessee is unable to say from what source she built up that amount. Two lakhs before the year 1940 was undoubtedly a big sum. It was said that the said amount was just left in the hands of the father-in-law of the assessee. The Tribunal disbelieved the story, which is, prima facie, a fantastic story. It is a story that does not accord with human probabilities. It is strange that the High Court found fault with the Tribunal for not swallowing that story. If that story is found to be unbelievable as the Tribunal has found, and in our opinion rightly, then the position remains that the consideration for the sale proceeded from the assessee and, therefore, it must be assumed to be his money. 6.7 Thus, keeping in view entire factual matrix of the case as detailed above, we hold that the authorities below have rightly invoked provisions of Section 68 of the 1961 Act and held that cash deposits in the assessee s ICI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... while calculating the income, benefit/set off was not allowed which action of the AO is highly unjustified on the facts of the case. The ld. CIT(A) has not adjudicated on the applicability of Section 115BBE as was in statute at that time, while adjudicating appeal of the assessee. The decision of ld. CIT(A) is reproduced in preceding para s of this order . The assessee being aggrieved has raised ground number 4 in memo of appeal filed with tribunal agitating that the authorities are silent as to set off of current year loss against income charged to tax u/s 68 of the 1961 Act. Thus, in the fitness of things, interest of justice and fair play to both the parties, we are restoring this issue of invocation of Section 115BBE of the 1961 Act by AO for denying set off of current year loss against income assessed u/s 68 of the 1961 Act to the file of learned CIT(A) for fresh adjudication and to pass speaking and reasoned order as to applicability of Section 115BBE read with Section 68 on the facts and circumstances of the assessee s case before denying set off of current year loss against income charged to tax u/s 68 of the 1961 Act, in set aside remand proceedings. Needless to say t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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