ITO, Agra v. Shri Rahul Jain,Prop M/s Rahul Tradding Co., Agra

ITA 157/AGR/2009 | 2003-2004
Pronouncement Date: 01-03-2011 | Result: Dismissed

Appeal Details

RSA Number 15720314 RSA 2009
Assessee PAN AAYPJ4220B
Bench Agra
Appeal Number ITA 157/AGR/2009
Duration Of Justice 1 year(s) 10 month(s) 14 day(s)
Appellant ITO, Agra
Respondent Shri Rahul Jain,Prop M/s Rahul Tradding Co., Agra
Appeal Type Income Tax Appeal
Pronouncement Date 01-03-2011
Appeal Filed By Department
Order Result Dismissed
Bench Allotted DB
Tribunal Order Date 01-03-2011
Date Of Final Hearing 22-02-2011
Next Hearing Date 22-02-2011
Assessment Year 2003-2004
Appeal Filed On 17-04-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL AGRA BENCH AGRA BEFORE SHRI P.K. BANSAL ACCOUNTANT MEMBER AND SHRI H.S. SIDHU JUDICIAL MEMBER ITA NO.157/AGR/2009 ASST. YEAR: 2003-04 INCOME TAX OFFICER 1(3) VS. SHRI RAHUL JAIN AGRA. PROP. M/S RAHUL TRADING CO. 30/55 KUMHAR PARA CHHIPITOLA AGRA. (PAN : AAYPJ 4220 B). (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI A.K. SHARMA JR. D.R. RESPONDENT BY : SHRI K.C. JAIN ADVOCATE ORDER PER H.S. SIDHU J.M. : THE REVENUE HAS FILED THE PRESENT APPEAL AGAINST TH E ORDER DATED 13.02.2009 PASSED BY THE CIT(A) ON THE FOLLOWING GROUNDS :- 1. THAT THE CIT(APPEALS)-1 HAS ERRED IN LAW IN DEL ETING THE ADDITION OF ` 18 00 000/- (I.E. CREDIT ENTRIES OF ` 5 00 000/- ` 10 00 000/- & ` 3 00 000/- BEING LOAN TAKEN FROM M/S BAIJ NATH AGRA WAL M/S DEVI SAHAI BAIJ NATH & AMIT AGRAWAL & CO. RESPECTIVELY ASSOCI ATES OF M/S GANGA RAM GROUP OF CASES) MADE U/S 68 OF I.T. ACT 1961 O N ACCOUNT OF UNEXPLAINED CASH CREDITS WITHOUT APPRECIATING THE F ACTS DISCUSSED IN THE ASSESSMENT ORDER. IN FACT THESE CASH CREDIT ENTRIE S REPRESENTED THE ASSESSEE'S OWN CASH INTRODUCED IN THE BUSINESS THRO UGH GANGA RAM GROUP OF CASES WHO HAVE ALREADY ADMITTED THAT THEY ARE ENGAGED IN BUSINESS OF PROVIDING ENTRIES AND EARNING INCOME TH EREFROM. 2. THAT THE CIT(APPEALS)-1 AGRA HAS ERRED IN LAW A ND ON FACTS IN DELETING THE DISALLOWANCE OF ` 1 76 666/- OF INTEREST CLAIMED TO HAVE BEEN PAID T O THE ABOVE NAMED CREDITORS ON UNEXPLAINED CASH CREDI TS. 3. THAT THE CIT(APPEALS)-1 AGRA HAS ERRED IN LAW A ND ON FACTS IN OBSERVING THAT THE IT HAS NOT BEEN SHOWN THAT THE DEPOSITORS HAVE EVER ADMITTED THAT THEY WERE ENGAGED IN THE BUSINESS OF GIVING BOGUS E NTRIES OR THAT THEY HAD GIVEN BOGUS ENTRIES TO THE ASSESSEE IGNORING THE F ACT THAT THE ASSESSMENTS OF THE DEPOSITORS HAVE BEEN COMPLETED HOLDING THAT THEY WERE ENGAGED IN 2 ENTRY BUSINESS. THEY HAVE ADMITTED THIS FACT AND NO APPEAL ORDER HAS BEEN FILED BY THEM AGAINST THE ASSESSMENT. 4. THAT THE ORDER OF THE CIT(APPEALS)-I AGRA IS BA D LAW AND ON FACT BECAUSE IN ALLOWING THE ASSESSEE'S APPEAL HE HAS COMPLETELY IGNORED THE FACT IT HAS VEHEMENTLY BEEN PROVED THAT THE AMOUNTS INTRODUCED AS CASH CREDITS WERE ASSESSEE'S OWN UNACCOUNTED MONEY ROUTED THROUGH THE LOAN ENTRIES. 5. THAT THE APPELLANT CRAVES LEAVE TO ADD OR DELETE OR ALTER OR MODIFY ANY ONE OR MORE GROUND(S) OF APPEAL DURING THE APPELLATE PR OCEEDINGS. 6. THAT THE ORDER OF THE CIT(APPEAL)-I AGRA BEING ERRONEOUS IN LAW AND ON FACTS BE SET ASIDE AND THAT THE ORDER OF THE ASSESS ING OFFICER BE RESTORED. 2. THE ASSESSING OFFICER WHILE COMPLETING ASSESSME NT OF THE ASSESSEE FOUND SOME ENTRIES OF AMOUNT IN DISPUTE OF GAGA RAM GROUPS FOR THE A. Y. 2001-02 AND ISSUED NOTICE UNDER SECTION 148 OF THE INCOME TAX ACT 1961 (THE ACT HEREINAF TER) TO THE ASSESSEE. THE ASSESSING OFFICER RECORDED THE REASON AND ISSUED NOTICE UNDER SECTION 143 OF THE ACT. IN RESPONSE TO THE SAME THE LD. AUTHORISED REPRESENTATIVE (A.R.) OF THE ASSESSE E APPEARED FROM TIME TO TIME AND FILED THE REQUISITE INFORMATION ALONG WITH THE RELEVANT EVIDE NCE EXPLAINING EACH AND EVERY DEPOSITS IN DISPUTE. AFTER CONSIDERING THE EVIDENCE PRODUCED B Y THE ASSESSEE THE ASSESSING OFFICER COMPLETED THE ASSESSMENT UNDER SECTION 143(3)/147 O F THE ACT ON 18.12.2008 BY ADDING THE ADDITION IN DISPUTE ALONG WITH OTHER ADDITIONS. AG GRIEVED BY THE SAME THE ASSESSEE FILED APPEAL BEFORE THE LD. FIRST APPELLATE AUTHORITY WHO VIDE T HE IMPUGNED ORDER DATED 13.02.2009 DELETED THE ADDITION IN DISPUTE BY RESPECTFULLY FOLLOWING T HE ORDER OF THE I.T.A.T. AGRA BENCH PASSED IN THE CASE OF SHRI DINESH KUMAR JAIN SHRI MUKESH KUM AR JAIN & SHRI ADITYA AGARWAL. AGGRIEVED BY THE SAME THE REVENUE HAS FILED THE PR ESENT APPEAL. 3. AT THE TIME OF HEARING THE LD. DEPARTMENTAL REP RESENTATIVE (D.R.) RELIED UPON THE ORDER PASSED BY THE ASSESSING OFFICER. ON THE CONTRARY THE LD. COUNSEL FOR THE ASSESSEE RELIED UPON THE ORDER PASSED BY THE LD. FIRST APPELLATE AUTHORI TY. HE HAS ALSO FILED HIS WRITTEN ARGUMENTS 3 DATED 22.02.2011 ALONG WITH ONE SMALL PAPER BOOK CO NTAINING PAGE NOS.1 TO 52 IN WHICH HE HAS ATTACHED VARIOUS DOCUMENTARY EVIDENCES INCLUDING TH E ORDERS PASSED BY THE I.T.A.T. DECIDING THE ISSUE IN DISPUTE IN FAVOUR OF THE ASSESSEE . 4. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE R ELEVANT RECORDS AVAILABLE WITH US. WE ARE OF THE CONSIDERED OPINION THAT THE LD. FIRST AP PELLATE AUTHORITY HAS PASSED THE IMPUGNED ORDER BY RESPECTFULLY FOLLOWING THE ORDER OF JURISD ICTIONAL BENCH WHICH SHE HAS REPRODUCED AT PAGE NO. 4 PARA NO.4 AND GIVEN HER FINDING AT PAGE NO.4 PARA NO.5 WHICH READS UNDER:- 4. I HAVE CONSIDERED THE FACTS AND CIRCUMSTANCES OF THE CASE AND THE ARGUMENTS OF THE LD. AR OF THE APPELLANT. IN THE OR DER DATED 15.02.07 OF THE HON'BLE ITAT AGRA BENCH AGRA IN ITO 1(1) AGRA VS . SRI ADITYA AGARWAL ITA NO.262/AGR/2006 AY 1998-99 IT HAS BEEN HELD AS UN DER:- 'WE HAVE CAREFULLY CONSIDERED THE ENTIRE MATERIAL O N RECORD AND CONCUR WITH THE FINDING OF THE LEARNED FIRST APPELL ATE AUTHORITY. IN OUR OPINION THE AO WAS NOT JUSTIFIED IN HOLDING THE TR ANSACTION AS BOGUS MERELY ON THE BASIS OF GENERAL OBSERVATIONS. IT MAY BE TRUE THAT THE TRANSACTIONS OF LENDER PARTY MIGHT HAVE BEEN FOUND TO BE FALSE BUT FOR MAKING ADDITION IN THE HANDS OF THE ASSESSEE THE N ATURE OF PARTICULAR TRANSACTION IN DISPUTE IS TO BE EXAMINED. IT HAS NO T BEEN ESTABLISHED THAT THE TRANSACTION OF ` 1 00 000/- RELATING TO LOAN GIVEN BY DEVI SAHAI VI NOD KUMAR WAS HELD TO BE BOGUS IN THEIR CASE. BEFORE TH E CIT(A) IT WAS ALSO CLARIFIED THAT THE SAID LOAN WAS GIVEN BY THE SAID PARTY TO THE ASSESSEE OUT OF ` 1 71 0001- HAVING BEEN RECEIVED FROM M/S CR FOODS INDIA PVT. LTD THROUGH CHEQUE NO.320629 DATED 19.01.1998. THUS EV EN THE SOURCE OF THE SOURCE WAS EXPLAINED. IN ANY CASE THE ASSESSEE HAD DISCHARGED THE BURDEN TO PROVE THE IDENTITY OF THE CREDITOR THE G ENUINENESS OF THE TRANSACTION WHICH WAS CARRIED OUT THROUGH BANKING C HANNEL AND THE CREDIT WORTHINESS OF THE CREDITOR. AFTER THE ASSESSEE HAD DISCHARGED THE BURDEN. IT WAS FOR THE DEPARTMENT TO HAVE DISPROVED THESE F ACTS. THE AO DID NOT EXAMINE THE ASSESSEE NOR BROUGHT ANY MATERIAL ON RE CORD TO PROVE SPECIFICALLY THAT THE LOAN TRANSACTION OF ` 1 00 000/- WAS FAKE OR BOGUS. THE AMOUNT OF LOAN WAS SUBSEQUENTLY REPAID AGAIN TH ROUGH BANKING CHANNEL. IN THE ABSENCE OF ANY MATERIAL TO THE CONT RARY THE TRANSACTIONS CARRIED OUT IN REGULAR COURSE AND THROUGH BANKING C HANNEL HAVE TO BE ACCEPTED AS GENUINE. TO REPEAT THE DEPARTMENT HAS NOT BEEN ABLE TO SHOW BY CONCRETE PROOF THAT THE TRANSACTION OF LOAN WAS NOT GENUINE. ON THE BASIS OF THE ABOVE WE DO NOT FIND ANY SCOPE TO INT ERFERE WITH THE FINDINGS 4 OF THE LEARNED CIT(A). THE GROUNDS RAISED BY THE RE VENUE ARE THEREFORE REJECTED.' 5. AS IN THE ABOVE CITED CASES IN THE PRESENT CAS E ALSO THERE DO NOT APPEAR ANY CASH DEPOSITS IN THE CONCERNED BANK ACCOUNT OF THE LENDER PRIOR TO THE ADVANCE OF THE IMPUGNED LOAN TO THE APPELLANT. IT I S AN ADMITTED POSITION THAT THE DEPOSITS HAVE BEEN RECEIVED BY THE APPELLANT BY ACC OUNT PAYEE CHEQUE. THE DEPOSITORS ARE ASSESSED TO TAX AND HAVE CONFIRMED T HE ADVANCES TO THE APPELLANT. MERE REFERENCE TO THE SEARCH IN THE CASE OF M/S GAN GA RAM AGRAWAL & COMPANY AND OTHER ENTITIES OF THE SAID GROUP AND THE FINDIN GS GIVEN BY THE AD IN THOSE CASES ARE OF NO HELP IN THE PRESENT CASE. IT HAS NO T BEEN SHOWN THAT THE DEPOSITORS HAVE EVER ADMITTED THAT THEY WERE ENGAGED IN THE BU SINESS OF GIVING BOGUS ENTRIES OR THAT THEY HAD GIVEN BOGUS ENTRIES TO THE APPELLA NT. THIS BEING THE CASE UNLESS IT IS PROVED BY THE AD WITH SOME CONCRETE EVIDENCE THA T THE APPELLANT'S TRANSACTIONS OF LOANS WITH THE ABOVE LENDERS OF THE GANGA RAM AG ARWAL GROUP ARE NOT GENUINE THE IMPUGNED DEPOSITS CANNOT BE BROUGHT TO TAX UNDER SECTION 68 OF THE LT. ACT 1961. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE THE ADDITIONS MADE BY THE AD UNDER SECTION 68 AND CORRESPONDING DISALLOWANCE OF INTEREST IN RESPECT OF THE IMPUGNED CASH CREDITS CANNOT BE SUSTAINED AND ARE ACCORDINGLY DELETED. 5. AFTER GOING THROUGH THE AFORESAID DECISIONS REND ERED BY THE JURISDICTIONAL BENCH WE ARE OF THE CONSIDERED OPINION THAT THE ISSUE IN DISPUTE HAS ALREADY BEEN ADJUDICATED IN FAVOUR OF THE ASSESSEE. NO CONTRARY DECISION HAS BEEN PRODUCED B Y THE LD. D.R. THEREFORE WE ARE OF THE CONSIDERED OPINION THAT THE LD. FIRST APPELLATE AUT HORITY HAS PASSED A WELL REASONED ORDER ON THE BASIS OF THE DECISIONS RENDERED BY THIS BENCH ON EX ACTLY SIMILAR ISSUE AND DECIDED IN FAVOUR OF THE ASSESSEE. WE UPHOLD THE IMPUGNED ORDER BY DISM ISSING THE APPEAL FILED BY THE REVENUE. 6. IN THE RESULT APPEAL FILED BY THE REVENUE IS DI SMISSED. (ORDER PRONOUNCED IN THE OPEN COURT ON 1 ST MARCH 2011). SD/- SD/- (P.K. BANSAL) (H.S. SIDHU) ACCOUNTANT MEMBER JUDICIAL MEMBER PLACE: AGRA DATE: 1 ST MARCH 2011 5 PBN/* COPY OF THE ORDER FORWARDED TO: 1. APPELLANT 2. RESPONDENT BY ORDER 3. CIT CONCERNED 4. CIT (APPEALS) CONCERNED 5. DR ITAT AGRA BENCH AGRA 6. GUARD FILE ASSIST ANT REGISTRAR INCOME-TAX APPELLATE TRIBUNAL AGRA TRUE COPY