ACT, v. M/s. Excell Ventures Construction Pvt. Ltd.,

ITA 34/RAN/2008 | misc
Pronouncement Date: 15-02-2012 | Result: Partly Allowed

Appeal Details

RSA Number 3425114 RSA 2008
Assessee PAN AAACE9437E
Bench Ranchi
Appeal Number ITA 34/RAN/2008
Duration Of Justice 4 year(s) 28 day(s)
Appellant ACT,
Respondent M/s. Excell Ventures Construction Pvt. Ltd.,
Appeal Type Income Tax Appeal
Pronouncement Date 15-02-2012
Appeal Filed By Department
Order Result Partly Allowed
Bench Allotted DB
Tribunal Order Date 15-02-2012
Assessment Year misc
Appeal Filed On 18-01-2008
Judgment Text
ITA NO.34/RANCHI/2008 M/S. EXCELL VENTURES CONSTSNS . PVT. LTD. RANCHI 1 IN THE INCOME TAX APPELLATE TRIBUNAL RANCHI CIRCUIT BENCH RANCHI BEFORE: SHRI B.R. MITTAL JUDICIAL MEMBER AND SHRI SHAMIM YAHYA ACCOUNTANT MEMBER ITA NO. 34 / RANCHI / 20 08 ASSESSMENT YEAR : 200 3 - 0 4 ACIT CIRCLE - 1 RANCHI VS. M/ S. EXCELL VENTURES CONSTS. PVT. LTD. RANCHI (APPELLANT) (RESPONDENT) PAN NO.AAACE 9437E APPELLANT BY: SHRI DEEPAK ROUSHAN SR. SC RESPONDENT BY: SHRI A.K. RASTOGI ADVOCATE DATE OF HEAR I NG: 1 5 .02.2012 DATE OF PRONOUNCEMENT: 15 .02.2012 ORDER PER B.R. MITTAL JUDICIAL MEMBER:- THIS IS AN APPEAL FILED BY THE DEPARTMENT FOR THE ASSESSMENT YEAR 2003-04 AGAINST THE ORDER OF THE LD. CIT(A) DATED 1 2.9.2007 ON THE FOLLOWING GROUNDS: 1. IN THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN RESTR ICTING THE DISALLOWANCE TO RS.2 50 180/- AS AGAINST DISALLOWAN CE OF RS.4 80 929/- OUT OF MACHINERY RUNNING AND MAINTENA NCE EXPENSES EXPENSES ON WAGES PAID TO LABOUR AND TRAV ELLING EXPENSES. 2. IN THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. COMMISSIONER OF INCOME-TAX (APPEALS) HAS ERRED IN D ELETING ADDITION OF RS.20 00 300/- ON ACCOUNT OF UNEXPLAINE D CASH CREDIT BY IGNORING THE FACT THAT BANK ACCOUNTS CLEA RLY SHOWED THAT SIMILAR AMOUNTS WERE DEPOSITED IN THE BANK ACC OUNT JUST BEFORE ADVANCING LOANS AND THUS SURROUNDING FACTS A ND CIRCUMSTANCES WERE IGNORED. 3. IN THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. COMMISSIONER OF INCOME-TAX (APPEALS) FAILED TO APPR ECIATE TOTALITY OF CIRCUMSTANCES AND THEREBY ERRED IN IGNO RING THE FACTS STATED IN GROUND NO.2 AND DELETED THE SUM OFRS.20 0 0 300/- 4. IN THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN DELET ING THE ADDITION OF RS.9 30 300/- IN CASE OF FIVE CASH CRED ITORS WHERE NO ITA NO.34/RANCHI/2008 M/S. EXCELL VENTURES CONSTSNS . PVT. LTD. RANCHI 2 CONFIRMATIONS WERE FILED AND THUS THE PRIMARY ONUS OF CSH CREDIT WHICH LAY ON THE ASSESSEE WAS NOT DISCHARGED. 2. BEFORE WE TAKE UP THIS APPEAL FOR CONSIDERATION IT IS RELEVANT TO STATE THAT THE TRIBUNAL HEARD THIS APPEAL ON 3.11.2009 AN D THE TRIBUNAL VIDE ITS ORDER DATED 23.12.2009 ALLOWED THE APPEAL OF THE DE PARTMENT IN PART BY REJECTING GROUND NO.1 OF THE APPEAL BUT ALLOWED GRO UND NOS.2 TO4. SUBSEQUENTLY THE ASSESSEE FILED MISCELLANEOUS APPL ICATION BEING MA NO.01/RANCHI/2011 DISPUTING THE ORDER OF THE TRIBUN AL TO ALLOW GROUND NOS.2 TO 4 OF THE APPEAL TAKEN BY THE DEPARTMENT. THE TR IBUNAL VIDE ORDER DATED 14.7.2011 ALLOWED THE MISCELLANEOUS APPLICATION OF THE ASSESSEE BY RECALLING ITS ORDER DATED 23.12.2009. IT IS RELEVANT TO STAT E THAT WHILE RECALLING THE ORDER THE TRIBUNAL HAS NOT STATED SPECIFICALLY AS TO WHETHER THE ENTIRE ORDER IS RECALLED OR THE ORDER IS RECALLED ONLY IN RESPEC T OF GROUND NOS.2 TO 4 TAKEN BY THE DEPARTMENT. HOWEVER CONSIDERING THE RECALL ORDER OF THE TRIBUNAL IN THE LIGHT OF THE MISCELLANEOUS APPLICATION FILED BY THE ASSESSEE IT IS OBSERVED THAT WE TAKE IT THAT THE TRIBUNAL RECALLED ITS ORDE R ONLY IN RESPECT OF GROUND NOS.2 TO 4 OF THE APPEAL TAKEN BY THE DEPARTMENT AS THERE IS NO GRIEVANCE OF THE ASSESSEE STATED IN THE MISCELLANEOUS APPLICATIO N FILED IN RESPECT OF THE GROUND NO.1 TAKEN BY THE DEPARTMENT AS THE SAID GRO UND WAS REJECTED BY THE TRIBUNAL BY CONFIRMING THE ORDER OF THE LD. CIT(A). 3. PURSUANT TO THE ABOVE THIS APPEAL WAS FIXED FOR HEARING TODAY I.E. 15.2.2012. ON PERUSAL OF THE ORDERS OF THE AUTHORI TIES BELOW IT IS OBSERVED THAT THE ASSESSEE HAD TAKEN UNSECURED LOANS AGGREGA TING RS.20 00 300/- IN THE NAME OF 15 PERSONS WHICH WERE APPEARING IN THE BOOKS OF ACCOUNTS OF THE ASSESSEES AND THE DETAILS OF WHICH ARE GIVEN BY THE ASSESSING OFFICER AT PAGE 3 OF THE ASSESSMENT ORDER AS UNDER: SL.NO. NAME AMOUNT (RS.) 1. AMIT KUMAR 2 00 000/ - 2. ARUN KUMAR 1 00 000/ - 3. B.K. ROY 50 000/ - 4. HARERAM SINGH 1 00 000/ - 5. KARUNA KUMAR 1 00 000/ - 6. RAM BILAS SINGH 1 50 000/ - 7. RAM BILAS SINGH HUF 30 000/ - 8. ROHIT KUMAR 1 90 000/ - ITA NO.34/RANCHI/2008 M/S. EXCELL VENTURES CONSTSNS . PVT. LTD. RANCHI 3 SL.NO. NAME AMOUNT (RS.) 9. RUCHITA 50 000/ - 10. SUSHMITA 1 00 000/ - 11. ABHISHEK 49 000/ - 12. RAM BALAK SINGH 49 300/ - 13. RAMJEE THAKUR 7 00 000/ - 14. SHAKTI ENTERPRISE 52 000/ - 15. MS. RUP ANI 80 000/ - TOTAL 20 00 300/ - 4. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER ASKED THE ASSESSEE TO FILE CONFIRMATION LETTERS AND PROVE THE IDENTITY CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTION S REGARDING THE LOAN CREDITORS. IT IS OBSERVED THAT THE ASSESSEE FILED CONFIRMATION IN RESPECT OF 10 PERSONS I.E. SL.NO.1 TO 10 OF ABOVE TABLE BUT DID N OT FILE CONFIRMATION IN RESPECT OF THE 5 PERSONS I.E. SL.NO.11 TO 15 OF ABO VE TABLE. 5. FURTHER ASSESSEE FILED COPY OF BANK STATEMENT I N RESPECT OF FOLLOWING LOAN CREDITORS: 1. AMIT KR. (SL.1) 2. ARVIND KR. (SL.2) 3. HARERAM SINGH (SL.4) 4. ROHIT KR. (SL.8) 5. RAMJI THAKUR (SL.13) 6. THE ASSESSING OFFICER STATED THAT ON PERUSAL OF BANK STATEMENT THE SAME AMOUNT WAS DEPOSITED IN CASH IN BANK ACCOUNTS JUST BEFORE ADVANCING LOAN. THE ASSESSEE WAS ASKED TO EXPLAIN SOURCE OF THESE CASH DEPOSITS BUT COULD NOT GIVE EXPLANATION. IN RESPECT OF OTHER LO AN CREDITORS NO BANK ACCOUNT COULD BE PRODUCED. IN VIEW OF ABOVE THE A SSESSING OFFICER CONSIDERED THE SAID LOAN AGGREGATING RS.20 00 300/- AS UNEXPLAINED LOAN CREDITS AND ADDED TO THE INCOME OF THE ASSESSEE. B EING AGGRIEVED THE ASSESSEE FILED APPEAL BEFORE THE FIRST APPELLATE AU THORITY. 7. ON BEHALF OF THE ASSESSEE IT WAS CONTENDED THAT WHEN THE ASSESSEE FILED THE CONFIRMATION LETTERS TO THE ASSESSING OFF ICER ALL THE LOAN CREDITORS APPEARING AT SL.NO.1 TO 10 ABOVE ASSESSING OFFICER NEVER FURTHER CONFRONTED NOR HE ISSUED NOTICE U/S 131 FOR VERIFICATION FROM THOSE PERSONS. IT WAS ALSO ITA NO.34/RANCHI/2008 M/S. EXCELL VENTURES CONSTSNS . PVT. LTD. RANCHI 4 CONTENDED THAT IN RESPECT OF PERSONS APPEARING AT S L.NOS.11 TO 15 THE ASSESSEE FILED BANK ACCOUNTS BEFORE ASSESSING OFFIC ER FOR HIS VERIFICATION ALONG WITH COMPLETE ADDRESSES AS WELL AS PAN NOS. HOWEVE R THE ASSESSING OFFICER SIMPLY STATED THAT CHEQUES WERE ISSUED AND BEFORE T HAT DEPOSITS WERE MADE AND THE SAME COULD NOT BE EXPLAINED BY THE ASSESSEE . ON BEHALF OF THE ASSESSEE IT WAS CONTENDED THAT ALL THE LOAN CREDIT ORS ARE ASSESSED TO TAX AND THEY DECLARED SUBSTANTIAL INCOME IN THEIR RETURNS A ND THE ASSESSEE PROVED THE CAPACITY OF THE LOAN CREDITORS. THE ASSESSING OFFI CER DID NOT MAKE ANY VERIFICATION AND SIMPLY ADDED LOAN. IT WAS ALSO CO NTENDED THAT ALL THE LOANS WERE TAKEN BY ACCOUNT PAYEE CHEQUES. THE LD. CIT(A ) CONSIDERING THE ABOVE FACTS AND STATED THAT THE ASSESSEE PROVED IDENTITY CREDITWORTHINESS AND GENUINENESS OF TRANSACTIONS AND THE ASSESSING OFFIC ER DID NOT MAKE ANY FURTHER INQUIRY REGARDING THE PERSONS APPEARING AT SL.NO.1 TO10 WHOSE CONFIRMATIONS WERE FILED BY THE ASSESSEE BEFORE HIM . HE HAS FURTHER STATED THAT THE ASSESSING OFFICER SUSPECTED ONLY 5 LOAN CR EDITORS THAT THEY JUST DEPOSITED THE CASH BEFORE GIVING LOAN TO THE ASSESS EE BUT IN THE OTHER CASES NO ADVERSE OBSERVATION IS MADE. THE LD. CIT(A) STA TED THAT THE ASSESSING OFFICER HAS NOT MADE ANY ENQUIRY IN RESPECT OF THE FACT THAT THE ASSESSEE DISCHARGED ITS PRIMARY ONUS. THE LD. CIT(A) HAS FU RTHER STATED THAT NO MATERIAL HAS BEEN BROUGHT ON RECORD BY THE ASSESSIN G OFFICER THAT LOANS TAKEN WERE INCOME OF THE ASSESSEE FROM UNDISCLOSED SOURCE S. ACCORDINGLY THE LD. CIT(A) DELETED THE ADDITIONS MADE BY THE ASSESSING OFFICER. HENCE DEPARTMENT FILED THIS APPEAL BEFORE THE TRIBUNAL. 8. AT THE TIME OF HEARING THE LD. A.R. SUBMITTED T HAT THE ASSESSING OFFICER DID NOT GIVE PROPER OPPORTUNITY OF HEARING TO THE ASSESSEE AND THE ASSESSING OFFICER CONCLUDED THAT ALL THE LOANS WERE FICTITIOUS AND ARE UNDISCLOSED INCOME OF THE ASSESSEE INSPITE OF THE F ACT THAT THE ASSESSEE FURNISHED CONFIRMATION LETTERS FROM 10 LOAN CREDITO RS AND ALL THE LOAN CREDITORS WERE ASSESSED TO TAX AND THEIR PAN NOS. WERE FILED BEFORE THE ASSESSING OFFICER. IT WAS ALSO CONTENDED THAT THE ASSESSEE F URNISHED LENDER-WISE EVIDENCES WHICH ARE AVAILABLE ON RECORD EVEN BEFORE THE TRIBUNAL AND AUTHORITIES BELOW AS UNDER: ITA NO.34/RANCHI/2008 M/S. EXCELL VENTURES CONSTSNS . PVT. LTD. RANCHI 5 NAME OF INDIVIDUALS NATURE OF EVIDENCE AMIT KUMAR CONFIRMATION PAN AND BANK STATEMENT ARVIND KUMAR CONFIRMATION AND BANK STATEMENT B.K. ROY CONFIRMATION WITH PAN HARE RAM SINGH CONFIRMATION PAN BANK STATEMENT AND ACKNOWLEDGEMENT OF INCOME TAX RETURN KARUNA KUMAR CONFIRMATION PAN AND ACKNOWLEDGEMENT OF INCOME TAX RETURN RAM BILASH SINGH CONFIRMATION WITH PAN RAM BILASH SINGH HUF CONFIRMATION ROHIT KUMAR CONFIRMATION PAN BANK STATEMENT AND ACKNOWLEDGEMENT OF INCOME TAX RETURN SUCH ITA CONFIRMATION SUSUMITA CONFIRMATION PAN AND ACKNOWLEDGEMENT OF INCOME TAX RETURN ABHISHEK CONFIRMATION RAM BALAK SINGH CONFIRMATION RAMJI THAKUR CONFIRMATION PAN BANK STATEMENT AND ACKNOWLEDGEMENT OF INCOME TAX RETURN SHAKTI ENTERPRISES CONFIRMA TION MISS. RUPANI CONFIRMATION WITH PAN 9. THE LD. A.R. SUBMITTED THAT THE ASSESSING OFFICE R HAS CONCLUDED THAT ALL THE LOAN CREDITORS ARE FICTITIOUS MERELY BECAUSE HE OBSERVED FROM THE BANK STATEMENT OF 5 LOAN CREDITORS DETAILS MENTIONED HE REIN ABOVE THAT THEY DEPOSITED CASH IN THEIR BANK ACCOUNTS JUST BEFORE A DVANCING LOAN TO THE ASSESSEE. THE LD. A.R. SUBMITTED THAT THE ASSESSIN G OFFICER DID NOT MAKE ANY INQUIRY BY ISSUING SUMMONS TO THE SAID LOAN CREDITO RS AND TO ASCERTAIN THEIR CREDITWORTHINESS AS TO WHETHER THEY HAD THE CAPACIT Y TO ADVANCE THE LOANS TO THE ASSESSEE. HE SUBMITTED THAT HAD ASSESSING OFFIC ER MADE PROPER ENQUIRY AND HAD GIVEN ADEQUATE OPPORTUNITY TO THE ASSESSEE THE ASSESSEE COULD PROVE NOT ONLY THE CREDITWORTHINESS OF THE LOAN CRE DITORS BUT ALSO GENUINENESS OF THE LOANS. HE SUBMITTED THAT THE MATTER COULD B E RESTORED TO THE ASSESSING OFFICER FOR HIS FRESH CONSIDERATION AND SUBMITTED T HAT ASSESSEE WILL FURNISH ALL THE REQUISITE DETAILS BEFORE THE ASSESSING OFFICER TO ESTABLISH GENUINENESS OF THE LOAN TRANSACTIONS. THE LD. D.R. SUBMITTED THAT HE HAS NO OBJECTION IF THE MATTER IS RESTORED TO THE ASSESSING OFFICER FOR HIS FRESH CONSIDERATION. ITA NO.34/RANCHI/2008 M/S. EXCELL VENTURES CONSTSNS . PVT. LTD. RANCHI 6 10. CONSIDERING THE ABOVE SUBMISSIONS OF THE LD. RE PRESENTATIVES OF THE PARTIES AND ON PERUSAL OF THE ORDER OF THE ASSESSIN G OFFICER WE FIND SUBSTANCE IN THE SUBMISSION OF LD. A.R. THAT THE ASSESSING OF FICER HAS NOT MADE ANY INQUIRY IN RESPECT OF THE LOAN TRANSACTIONS AND PRE SUMED THAT LOANS WERE NOT GENUINE MERELY BECAUSE CONFIRMATIONS COULD NOT BE F ILED FROM 5 LOAN CREDITORS I.E. SL. NOS. 11 TO 15 OF TABLE STATED IN PARA 3 HE REIN ABOVE AND CASH WAS DEPOSITED BY SOME LOAN CREDITORS IN THEIR BANK ACCO UNTS JUST BEFORE GIVING LOAN(S) TO THE ASSESSEE. IT IS OBSERVED THAT A.O. DID NOT CONFRONT THE ASSESSEE AND/OR ISSUED NOTICE TO THE LOAN CREDITORS TO ASCERTAIN THEIR CREDITWORTHINESS AND GENUINENESS OF LOANS. THE LD . D.R. HAS NOT DISPUTED THE FACT OF THE EVIDENCES WHICH WERE STATED TO BE F ILED BY THE ASSESSEE IN RESPECT OF THE LOAN CREDITORS AND HAVE BEEN SUMMARI SED IN THE TABLE IN PARA 8 HEREIN ABOVE. WE ARE OF THE CONSIDERED VIEW THAT I N THE INTEREST OF JUSTICE THE ORDERS OF AUTHORITIES BELOW BE SET ASIDE AND TH E ISSUE BE RESTORED TO THE FILE OF THE ASSESSING OFFICER FOR HIS FRESH CONSIDE RATION AFTER CONSIDERING SUCH EVIDENCES AS MAY BE FILED BY THE ASSESSEE AND AFTER GIVING DUE OPPORTUNITY OF HEARING IN ACCORDANCE WITH LAW. THEREFORE GROUND NOS.2 TO 4 OF THE APPEAL TAKEN BY THE DEPARTMENT ARE ALLOWED FOR STATISTICAL PURPOSES. 11. AS MENTIONED HEREIN ABOVE THAT THIS APPEAL WAS EARLIER ADJUDICATED BY THE TRIBUNAL BY ITS ORDER DATED 23.12.2009 THE SAI D ORDER WAS RECALLED BY THE TRIBUNAL BY ITS ORDER DATED 14.7.2011 IN MA NO.1/RA NCHI/2011 THEREFORE THIS ORDER BE READ ALONG WITH EARLIER ORDERS OF THE TRIB UNAL DATED 23.12.2009 AND 14.7.2011. 12. IN THE RESULT THE APPEAL OF THE DEPARTMENT IS ALLOWED IN PART FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 15.02.2012 SD/ - SD/ - ( SHAMIM YAH Y A ) ( B.R. MITTAL ) ACCOUNTANT MEMBER JU DICIAL MEMBER VG/SPS RANCHI DATED 15 TH FEBRUARY 2012 ITA NO.34/RANCHI/2008 M/S. EXCELL VENTURES CONSTSNS . PVT. LTD. RANCHI 7 COPY TO 1 ACIT CIRCLE - 1 RANCHI 2 M/S. EXCELL VENTURES CONSTRUCTION PVT. LTD. ASHOK NAGAR RANCHI 3 CIT RANCHI (JHARKHAND) 4 THE CIT (A) RANCHI (JHARKHAND) 5 THE DR ITAT RANCHI 6 GUARD FILE. BY ORDER SR. PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL RANCHI