9911796707
TMI Blog2023 (7) TMI 1258X X X X Extracts X X X X X X X X Extracts X X X X ..... suspect and the assessee having failed to discharge its onus of clearing all these suspicions in any whatsoever - be it by producing parties for confirmation or the farmers for confirmation, the AO, we hold that, has rightly held that the cash deposits were unexplained. We, therefore, see no reason to interfere with the order of the learned CIT(A) confirming the addition - Decided against assessee. - ITA No. 123/Rjt/2014 - - - Dated:- 6-3-2023 - ANNAPURNA GUPTA, ACCOUNTANT MEMBER AND MRS. MADHUMITA ROY, JUDICIAL MEMBER For the Appellant : Written Submission For the Respondent : Shri V.J. Boricha, Sr. DR ORDER PER ANNAPURNA GUPTA, ACCOUNTANT MEMBER: Present appeal has been filed by the assessee against the order of the learned Commissioner of Income-tax (Appeals)-III, Rajkot [hereinafter referred to as CIT(A) for short] dated 20.11.2013 passed under section 250 of the Income Tax Act, 1961 [hereinafter referred to as the Act for short] for the Assessment Year (AY) 1997-98. 2. The present appeal was initially disposed of by the ITAT vide order dated 12.03.2021, but was subsequently recalled in a Miscellaneous Application filed by the assessee poi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds deletion. 7. The Ld. CIT(A) has erred in law and facts in confirming action of the Ld. A.O. charging interest U/s. 234B and 234C. The same needs suitable reduction. 8. Without prejudice, the assessment made is bad in law and deserves annulment. 9. Without prejudice, no adequate, sufficient and reasonable opportunity has been provided while framing assessment. The assessment needs annulment. 10. Without prejudice, no adequate, sufficient and reasonable opportunity has been provided while passing appeal order. The assessment needs annulment. 11. Without prejudice, all the 3 amounts of addition made has already been added in the hands of concern person viz Shri H.K. Keshria - HUF, Bharatbhai P. Singala and Shri Maganbhai H. Padalia. Thus the same amount cannot be taxed in the hands of the assessee and therefore there is violation of basic principals in taxing the same amount twice. The addition made in the hand of the assessee needs deletion . 4. The solitary issue, as transpires from the grounds raised above, is with regard to the addition made of cash credits received from various parties by the assessee remaining unexplained. It is pertinent to begin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Against the order u/s 143 (3) r.w.s. 250 144 of the I.T. Act, the assessee preferred an appeal before the Ld. CIT(A)-III, Rajkot. The Ld. CIT(A)-III, Rajkot vide his order in appeal No. CIT(A)-III/0012/02-03 dated 16.10.2006 dismissed the appeal filed by the assessee. Aggrieved by the orders of CIT(A)- II1, Rajkot, the assessee filed appeal before the Hon ble 1TAT, Rajkot. The Hon ble 1TAT, Rajkot vide its order in ITA No.67/RJT/2007 dated 26.08.2010 restored the matter to the file of the AO with a direction to redo the assessment after calling for the required details and also after providing adequate opportunity of being heard to the assessee. The Hon ble 1TAT also observed that at the original assessment stage the assessee did not produce any evidence and the Ld. CIT(A)-III, Rajkot restored this matter and the assessee did not co- operate with the assessing officer at the re-assessment stage also and therefore, the assessing officer had repeated the impugned additions. 5. In the fresh round before the learned CIT(A), none appeared again on behalf of the assessee; and, the appeal of the assessee, therefore, was dismissed confirming the addition on merits, in the absence o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hinagala 2. Rs. 11,25,000/- Shri S.K.Kesariya (HUF) 3. Rs. 27,00,000/- Shri Maganlal Padaliya 3.1 As mentioned at para 6 page no 3 of the assessment order the assessee is doing finance business in has obtained cash credit. From above 3 persons. It is further mentioned in the assessment order that the confirmation letters from these persons were filed but the Ld. A.O. consider the same as not acceptable. Thus it is admitted by the Ld. A.O. that the cash credits were made by the above 3 persons in their names with the assessee. 3.2 The humble attention of the Ld. A.O. was drawn to the legal position that where, Once the existence of the creditors is proved and such persons own the credits which are found in the books of the assessee, the assessee s onus stands discharged and the latter is not further required to prove the source from which the creditors could have acquired the money deposited with him and, therefore, addition U/s. 68 cannot be sustained in the absence of anything to establish that the source of the creditor deposited flew from the assessee itself. As enumerated by the Hon. Rajasthan High Court in the case of Aravlali Trading Co. 220 CTR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /- may kindly be deleted being taxing the same income twice and or may kindly be restore to the Ld. A.O. to delete the addition after verification of the above. III. In respect of addition of Rs. 27,00,000/- in the case of Shri Maganlal H Padaliya assessment has been made on 25-2-2002 (copy enclose) by the Ld. ITO 1(2) Rajkot making addition of Rs. 46,15,500/-. At page no 3 of the assessment order the details of this amount of Rs. 46,15,500/- shows that the amount added in the case of assessee of Rs. 27,00,000/- is the same. Thus when theaddition is made in the case of Shri Maganlal Padaliya, deletion of addition made of Rs. 27,00,000/- in the case of assessee would be law full and the same may kindly be deleted. In either case the matter may be restored to the Ld.A.O. for deletion of this amount after verification. 5. In view of the above it is requested that the addition made may kindly be deleted as requested above. Copy of submissions dated 28-12-2011 made before the Ld. A.O. is also submitted herewith for kind consideration on which the details whereof is also relied on. 3 In view of the above it is humbly prayed that the appeal may kindly be allowed as mention ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... advances were made to the assessee-company and all these accounts had been introduced by the director of the assessee-company Shri Priyesh Kesaria or another account holder with bank. All the villagers were noted to reside in the small villages of Gondal Taluka and surprisingly they had come to Rajkot to open their account and for the sole purpose of advancing loan to Shri Kesaria. From all these information, the Assessing Officer held that these cash deposits were of ingenuine and treated them all, therefore, unexplained cash credits under Section 68 of the Act in the hands of the assessee. He noted that the amount of advances made by the three parties was to the tune of (i) Rs. 11,25,000/- (Shri Haskukhlal Keshavlal), (ii) Rs. 26,00,000/- (Shri Maganbhai Haribhai Padalia) and (iii) Rs. 11,05,000/- (Shri Bharat P. Shingala). Accordingly, he made an addition of Rs. 49,30,000/- on account of unexplained cash deposits relating to these three parties. His findings in this regard at paragraph Nos. 5 to 8 of the order is as under:- 5. In compliance to Hon ble ITAT s directions, notice u/s 142(1) dated 20.05.2011 was issued. In response to the notices u/s 142(1) and query letter is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... course of assessment proceedings, the assessee was asked to explain the deposits in the name of above 3 persons. The assessee filed confirmations from these persons. However, it was found that all the three depositors of the assessee company are not credit worthy because of the following reasons: 1. Huge amounts have been deposited by cash in their bank a/c. and these amounts have been withdrawn immediately for giving cheque to the assessee company. 2. The depositors have opened their bank a/cs. with an amount of Rs. 500/- and the closing balance is also Rs. 520/- or so. 3. The depositors were asked to furnish their bank a/c. No. during the course of assessment however, they failed to give such details. 4. The source of deposits made with this company by the depositors is loans from farmers and were asked to produce at least some farmers for verification, the same was not complied with. Accordingly, these deposits were treated as unexplained and added to the total income of the assessee u/s. 68 of the I.T. Act. 7. The assessee was asked to produce books of a/cs. and produce the depositors for personal verification to investigate the link between the d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 02. Vasur Lakhamanbhai Der 03. Vllabh Lalji Raiyani 04. Suleman Zafar Kaida 05. Samji Nanji Chaniara 06. Samji Bhikha Raiyani 07. Samji Nath a Bavariya 08. Rafiq Jusab Kaida 09. Pravinchandra B. Chaniara 10. Prafulkumar Jivraj Gondaliya 11. Parshotam Nanji Bharad 12. Nanji Bhagvanbhai Sakhiya 13. Najabhai Lakhamanbhai Der 14. Mavji Hirabhai Makwana 15. Mansukh Karasan Ghonia 16. Mansukh Bachubhai Jesani 17. Mahesh Keshabhai Bhutt 18. Mahendra Nar^hibhai Raiyani 19. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it seems genuine. He has managed to get these accounts opened in the bank in the names of different farmers and then has plowed this money into the Company. It was also seen that the accounts of these persons have been opened by depositing Rs. 500. Thereafter, cash deposits has been made by these farmers on various dates. The money deposited by these farmers have gone to the a/c. of Shri H. K. Kesaria immediately and thereafter the same has been deposited by Shri Kesaria with the Company. Following instances and chart given proves that there is inter- link between the transactions with the farmers and with the Company. Sr. No. Name of the farmer Amt. Deposited in the Bank Date This Amt. given to Shri Kesaria on Date This Amt. given to Co. on date 01. Rafiq Jusab 120000 30.01.97 31.01.97 08.02.97 02. Vasur Laxmanbhai 110000 30.01.97 31.01.97 08.02.97 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ring the course of assessment a copy of bank a/c. of the depositor was called for from Jivan Comm. Bank, Main Branch, Rajkot. On verification of the same it is seen that following huge cash has been deposited in his bank a/c. and the same has been given to the assessee Company. The following chart will reveal that the amount so deposited has been given to the assessee Company. Sr. No. Date of deposit in the A/c. of Maganbhai Padalia Amount (Rs.) Dt of giving loan the assessee To Amount (Rs.) 01. 02.09.1996 7, 00, 000/- 02.09.1996 7, 00, 000/- 02. 02.09.1996 7, 50, 000/- 02.09.1996 7, 50, 000/- 03. 20.09.1996 1,00,000/- 20.09.1996 1,00, 000/- 04. 20.09.1996 2,50,000/- 20.09.1996 2,50, 000/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs. 11,05,000/- by cheques. Therefore while finalising the set-aside assessment the figure of Rs. 11,05,000/- was taken into consideration for finalisation of assessment. Shri Bharat Shingala in his statement has stated that he is assessed to tax with ITO, 2(2), Rajkot. He has obtained loans from farmers @ 12% and has given loan to the assessee Company @ 13.5%. During the course of original asstt. Proceedings, Shri Bharat Shingala was asked produce some farmers for verification purpose but he has not produced any of the farmers for verification of the AO. Shri Shingala has accepted loans in cash from various farmers and has deposited the amounts through cheques with the assessee Company. During the course of assessment a copy of bank a/c. of the same has been given to the assessee company. The following chart will reveal that the amount so deposited has been given to the assessee Co., Sr. No. Date of deposit in the A/c. of Bharat Shingala Amount (Rs.) .. Dt of giving loan the assessee To Amount (Rs.) 01. 29.08.1996 1, 00, 000/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to give any consideration to the written submissions filed by Shri D.R. Adhia before us and the appeal accordingly needs to be dismissed at this stage itself noting the absence of any submissions made on behalf of the assessee. 10. But be that so, even considering the submissions filed before us, we do not find any merit in the same. One aspect of the submissions made by Shri Adhia is that all these amounts attributed to the three parties have been taxed as incomes of the said parties in their hands in assessments framed. In the written submissions, he also mentioned that copies of the assessment orders of all the three parties were enclosed, but surprisingly there is no such assessment orders relating to the above three parties enclosed. Therefore, this contention of Shri D.R. Adhia is rejected for want of substantiation. His other contention is that since confirmation from the above three parties was filed; therefore, the genuineness of the transactions was established. The only response which such a submission can get is to throw it out of the window immediately. The detailed findings of the Assessing Officer proving the ingenuineness of the transactions noting that these th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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