M/s. Tulsi Digital Colour Lab Pvt. Ltd.,, RAJKOT-GUJARAT v. The Assistant Commissioner of Income Tax, Circle-2,, RAJKOT-GUJARAT

ITA 468/RJT/2014 | 2005-2006
Pronouncement Date: 21-10-2016 | Result: Dismissed

Appeal Details

RSA Number 46824914 RSA 2014
Assessee PAN AABCT6776E
Bench Rajkot
Appeal Number ITA 468/RJT/2014
Duration Of Justice 2 year(s) 2 month(s) 22 day(s)
Appellant M/s. Tulsi Digital Colour Lab Pvt. Ltd.,, RAJKOT-GUJARAT
Respondent The Assistant Commissioner of Income Tax, Circle-2,, RAJKOT-GUJARAT
Appeal Type Income Tax Appeal
Pronouncement Date 21-10-2016
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted DB
Tribunal Order Date 21-10-2016
Date Of Final Hearing 19-09-2016
Next Hearing Date 19-09-2016
Assessment Year 2005-2006
Appeal Filed On 30-07-2014
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH RAJKOT [ CONDUCTED THROUGH E-COURT AT AHMEDABAD ] .. ! '#$% #&#'' BEFORE SHRI S.S. GODARA JUDICIAL MEMBER AND SHRI PRADIP KUMAR KEDIA ACCOUNTANT MEMBER ./ I.T.A. NO.468/RJT/2014 ( / ASSESSMENT YEAR : 2005-06) M/S.TULSI DIGITAL COLOUR LAB PVT.LTD. CENTRE POINT NEAR KESHUBHAI EYE HOSPITAL ASHAPURA ROAD RAJKOT / VS. THE ACIT CIRCLE-2 RAJKOT *#& ./ ./ PAN/GIR NO. : AABCT 6776 E ( * / APPELLANT ) .. ( -* / RESPONDENT ) * . # / APPELLANT BY : SHRI M.J.RANPURA AR -* /.# / RESPONDENT BY : SHRI C.S. ANJARIA SR.DR ! 01/2& / DATE OF HEARING 19/09/2016 34 /2& / DATE OF PRONOUNCEMENT 21/10/2016 #/ O R D E R PER PRADIP KUMAR KEDIA ACCOUNTANT MEMBER : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LD.COMMISSIONER OF INCOME TAX(APPEALS)-III RAJKOT [CIT(A) IN SHORT] DATED 11/06/2014 PERTAINING TO ASSESSMENT Y EAR (AY) 2005-06. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF AP PEAL:- ITA NO.468/ RJT /2014 M/S.TULSI DIGITAL COLOUR LAB P.LTD. VS. ACIT ASST.YEAR 2005-06 - 2 - 1.0 THE GROUNDS OF APPEAL MENTIONED HEREUNDER ARE WITHOUT PREJUDICE TO ONE ANOTHER. 2.0 THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL S)-III RAJKOT ERRED ON FACTS AS ALSO IN LAW IN CONFIRMING THE ADD ITION OF 20 00 000/- MADE BY THE AO U/S.68 OF THE ACT ON ACCOUNT OF UNSE CURED LOAN RECEIVED FROM SHRI G.M. SAUJANI AND INTEREST OF 2 12 249/- PAID ON SUCH ALLEGED LOAN ON THE ALLEGED GROUND THAT THE APPELLA NT FAILED TO PROVE IDENTITY GENUINENESS AND CREDITWORTHINESS OF THE D EPOSITORS. THE ADDITION IS TOTALLY UNJUSTIFIED ON FACTS AS ALSO IN LAW AND MAY KINDLY BE ADDED. 2. BRIEFLY STATED RELEVANT FACTS ARE THAT THE ASS ESSEE IS A PRIVATE LIMITED COMPANY ENGAGED IN THE BUSINESS OF COLOUR-P HOTO DEVELOPING AND PRINTING WORK. RETURN OF INCOME FOR THE YEAR U NDER CONSIDERATION WAS FILED ON 06/10/2005 DECLARING LOSS OF RS.11 31 116/-. THE ASSESSMENT WAS ORIGINALLY FINALIZED U/S.143(3) OF T HE INCOME TAX ACT 1961 (HEREINAFTER REFERRED TO AS 'THE ACT') DATED 06/12/2007 ON A TOTAL INCOME OF RS.2 94 310/-. THE ASSESSING OFFICER (AO ) WHILE MAKING THE ASSESSMENT INTER ALIA TREATED UNSECURED LOAN OF RS.20 LACS TAKEN FROM SHRI G.M. SAVJANI AS UNEXPLAINED CREDIT AND ADDED T O THE TOTAL INCOME OF THE ASSESSEE U/S.68 OF THE ACT. THE AO ALSO DISALL OWED INTEREST OF RS.2 12 249/- PAID ON THE AFORESAID UNSECURED LOAN TAKEN FROM SHRI G.M. SAVJANI. THE AFORESAID ADDITIONS AND DISALLOWANCES TRAVELLED TO THE ITAT. THE CO-ORDINATE BENCH OF THE ITAT VIDE ORDER DATED 29/04/2009 RESTORED THE ISSUE RELATED TO THE IMPUGNED ADDITION S OF RS.20 LACS AND DISALLOWANCE OF RS.2 12 249/- TO THE FIE OF THE AO. IN THE SECOND ROUND ITA NO.468/ RJT /2014 M/S.TULSI DIGITAL COLOUR LAB P.LTD. VS. ACIT ASST.YEAR 2005-06 - 3 - OF PROCEEDINGS THE AO ONCE AGAINST REAFFIRMED HIS EARLIER ACTION AND TREATED THE IMPUGNED UNSECURED LOAN AND INTEREST TH EREON AS UNEXPLAINED AND ADDED TO THE TOTAL INCOME OF THE ASSESSEE. 3. THE ASSESSEE FILED APPEAL BEFORE THE CIT(A). THE CIT(A) TOOK NOTE OF THE DIRECTIONS OF THE CO-ORDINATE BENCH OF THE T RIBUNAL AND OBSERVED THAT THE ASSESSEE HAS FAILED TO PRODUCE LENDER MR.S AVJANI BEFORE THE AO TO PROVE HIS CASE AS DIRECTED BY THE ITAT. HE THE REFORE FOUND NO FAULT WITH THE ACTION OF THE AO IN REAFFIRMING THE ADDITI ONS AND DISALLOWANCES. THE RELEVANT PORTION OF THE ORDER OF THE CIT(A) DAT ED 11/06/2014 APPEALED AGAINST IS REPRODUCED HEREUNDER FOR READY REFERENCE:- 2. IN THIS CASE THE ASSESSMENT WAS ORIGINALLY COMP LETED U/S. 143(3) OF THE IT ACT 1961 ON 06/12/2007 DETERMINING TOTAL INCOME AT RS. 2 94 310/-. ON APPEAL CIT (A) PARTLY ALLOWED THE APPEAL VIDE HIS ORDER DA TED 17/11/2008. THE MATTER WENT FURTHER TO THE HON'BLE IT AT RAJKOT BENCH RA JKOT WHEREBY THE TWO IMPUGNED ISSUES WERE SET ASIDE TO THE FILE OF THE A SSESSING OFFICER AFTER GIVING THE FOLLOWING FINDINGS: 7. AFTER HEARING BOTH THE PARTIES AND LOOKING INT O THE FACTS AND CIRCUMSTANCES OF THE CASE WE FIND THAT THE ASSESSEE HAS TAKEN LOAN FROM MR. SAVJANI AND MR. SAVJANI HAVE TAKEN LOAN FROM THREE PERSONS AND THE SAME WAS ADVA NCED TO THE ASSESSEE COMPANY. THE ASSESSEE DID NOT REMAIN PRESENT BEFORE THE ASSE SSING OFFICER. WE FIND FROM THE RECORD THE ASSESSEE SIMPLY PRODUCED THE LEDGER ACC OUNT OF SHRI SAVJANI. FROM THE BOOKS OF ACCOUNTS OF THE ASSESSEE FIRM IT IS FOUND THAT THE FIRM HAS TAKEN FURTHER LOAN FROM THREE PERSONS. MR. SAVJANI HAS NO SOURCE OF IN COME AND ALSO SUFFICIENT FUND TO ADVANCE THE ASSESSEE. THEREFORE THE ASSESSING OFFI CER HAD TO EXAMINE MR. SAVJANI BUT THE ASSESSEE HAS NOT SUBMITTED ANY EVIDENCE REG ARDING CREDITWORTHINESS IDENTITY OF THE CREDITOR. THEREFORE THE ASSESSEE HAS FAILED TO PROVE THE GENUINENESS OF THE TRANSACTION IDENTITY OF THE CREDITOR AND CREDITWOR THINESS OF THE PERSONS. WE FIND THAT THE CIT (A) HAS NOT CALLED FOR ANY REMAND REPORT. M OREOVER THE ASSESSEE DID NOT REMAINED PRESENT AND ALSO MR. SAVJANI ALSO DID NOT REMAIN PRESENT BEFORE THE ASSESSING OFFICER. THEREFORE IN THE INTEREST OF JU STICE AND FAIR PLAY WE RESTORE THIS ITA NO.468/ RJT /2014 M/S.TULSI DIGITAL COLOUR LAB P.LTD. VS. ACIT ASST.YEAR 2005-06 - 4 - MATTER TO THE FILE OF THE ASSESSING OFFICER AND THE ASSESSEE IS DIRECTED TO PRODUCE MR. SAVJANI ALONG WITH DOCUMENT BEFORE THE ASSESSING OF FICER IS DIRECTED TO DECIDE THE MATTER AFRESH AND IN ACCORDANCE WITH LAW. 3. ACTING ON THE DIRECTIONS OF THE HON'BLE ITAT R AJKOT BENCH RAJKOT THE ASSESSING OFFICER HAS COMMENCED THE ASSESSMENT PROC EEDINGS DE NOVA BY ISSUE OF NOTICE U/S. 143(2) ON 13.07.2010. THE APPELLANT COU LD NOT COMPLY WITH THE SPECIFIC DIRECTION OF THE ASSESSING OFFICER TO PRODUCE ONE M R. SAVJANI THE SO CALLED LOAN CREDITOR BEFORE HIM FOR EXAMINATION AND VERIFICATIO N OF THE CLAIM MADE. LEFT WITH NO OTHER OPTION THE ASSESSING OFFICER HAS ONCE AGA IN MADE THE ADDITIONS SIMILAR TO THAT IN THE ORIGINAL ASSESSMENT. THE APPELLANT IS O NCE AGAIN IN APPEAL BEFORE ME. DURING THE APPELLATE PROCEEDINGS SHRI HARISH RANPA RA C.A. THE AUTHORIZED REPRESENTATIVE FAILED TO FURNISH ANY CREDIBLE EXPLA NATION FOR NOT PRODUCING THE IMPUGNED PERSON SHRI G. M. SAVJANI BEFORE THE ASSE SSING OFFICER FOR NECESSARY VERIFICATION. UNLESS THE SAID PERSON IS PRODUCED B EFORE THE ASSESSING OFFICER FOR EXAMINATION ALL THOSE DOCUMENTS VIZ. XEROX COPY OF PASSPORT RETURN OF INCOME PAN CARD BANK STATEMENT THAT WERE PRODUCED BY THE APPELLANT BEFORE THE ASSESSING OFFICER AND SO ALSO BEFORE ME REMAINS U NSUBSTANTIATED AND UNVERIFIED NO COGNIZANCE OF WHICH CAN BE TAKEN. 4. MOREOVER WHEN THE HIGHEST FACT FINDING AUTHORI TY HON'BLE ITAT RAJKOT BENCH RAJKOT WHEN HELD THAT: MR. SAVJANI HAS NO SOURCE OF INCOME AND ALSO SUFFIC IENT FUND TO ADVANCE THE ASSESSEE. THEREFORE THE ASSESSING OFFICER HAD TO EXAMINE MR. SAVJANI BUT THE ASSESSEE HAS NOT SUBMITTED ANY EVIDENCE REGARDING CREDITWORTHINESS IDENTITY OF THE CREDITOR. THEREFORE THE ASSESSEE HAS FAILED TO PROVE THE GEN UINENESS OF THE TRANSACTION IDENTITY OF THE CREDITOR AND CREDITWORTHINESS OF TH E PERSONS 5. THE ASSESSING OFFICER WITHOUT UNDERTAKING FURT HER INVESTIGATIONS IN THIS MATTER SO AS TO SAY THAT WITHOUT EXAMINING THE SO CALLED MR. SAVJANI THE LOAN CREDITOR CANNOT COME OUT WITH ANY NEW FINDING MEANING THERE BY THE CONCLUSIONS DRAWN IN THE DE NOVA ASSESSMENT WILL BE SIMILAR WITH THOSE T HAT WERE DRAWN IN THE ORIGINAL ASSESSMENT. THEREFORE BY NOT PRODUCING THE PERSON HI QUESTION FOR EXAMINATION BEFORE THE ASSESSING OFFICER AMOUNTS TO NON-COMPLIA NCE OF THE DIRECTIONS GIVEN BY THE HON'BLE ITAT RAJKOT BENCH RAJKOT. TO THAT EXT ENT THE APPELLANT FAILED TO DISCHARGE THE BURDEN OF PROOF. HENCE I DECLINE TO INTERFERE WITH THE ACTION OF THE ASSESSING OFFICER IN MAKING THE TWO IMPUGNED ADDITI ONS TO THE INCOME RETURNED. ITA NO.468/ RJT /2014 M/S.TULSI DIGITAL COLOUR LAB P.LTD. VS. ACIT ASST.YEAR 2005-06 - 5 - THUS THESE TWO ADDITIONS STANDS CONFIRMED. GROUND NUMBERS 3 AND 4 ARE ACCORDINGLY DISMISSED. 6. THE RESULT THE APPEAL OF THE APPELLANT IS DI SMISSED. 4. AGGRIEVED BY THE ORDER OF THE CIT(A) THE ASSES SEE IS IN APPEAL BEFORE THE ITAT. 5. THE LD.AR FOR THE ASSESSEE MR. M.J. RANPURA REFE RRED TO THE COPY OF CONFIRMATION BANK STATEMENT AND RETURN OF INCOM E OF THE LENDER SHRI G.M. SAVJANI TO ESTABLISH THE GENUINENESS OF THE TR ANSACTION IDENTITY AND CREDITWORTHINESS TOWARDS LOAN GIVEN. COPY OF THE P ASSPORT OF THE LENDER AND ALSO THE LEDGER ACCOUNT OF THE LENDER WERE REFE RRED TO SUPPORT THE BONA FIDES OF THE BORROWALS MADE. HE ACCORDINGLY S OUGHT REVERSAL OF THE ORDER OF THE CIT(A) ON THE IMPUGNED ADDITIONS/DISAL LOWANCES MADE. THE LD.AR RELIED UPON THE DECISION OF THE HONBLE GUJAR AT HIGH COURT IN THE CASE OF CIT VS. RANCHHOD JIVABHAI NAKHAVA REPORTED IN (2012) 21 TAXMANN.COM 159 (GUJ.) AND THE DECISION OF THE CO-O RDINATE BENCH OF ITAT IN THE CASE OF M/S.SANJAYRAJ PETROLEUM & HOTEL VS. ITO IN ITA NO.209/RAJ/2014 FOR AY 1997-98 ORDER DATED 16/08/2 016. 6. THE LD.DR ON THE OTHER HAND RELIED UPON THE OR DER OF THE CIT(A) AND SUBMITTED THAT THE DECISIONS RELIED UPON BY THE LD.AR ARE DISTINGUISHABLE ON FACTS. THE LD.DR FURTHER SUBMIT TED THAT CATEGORICAL DIRECTIONS OF THE ITAT TO PRODUCE THE LENDER BEFORE THE AO CANNOT BE ITA NO.468/ RJT /2014 M/S.TULSI DIGITAL COLOUR LAB P.LTD. VS. ACIT ASST.YEAR 2005-06 - 6 - BY-PASSED AND GIVEN A GO-BYE. HE ACCORDINGLY SUB MITTED THAT NO INTERFERENCE WITH THE ORDER OF THE CIT(A) IS CALLED FOR. 7. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS AND PERUSED THE ORDERS OF THE AUTHORITIES BELOW AND CASE-LAWS C ITED. WE FIND THAT THE CO-ORDINATE BENCH OF ITAT HAVING REGARD TO THE FACT S AND CIRCUMSTANCES OF THE CASE HAS GIVEN CLEAR CUT DIRECTIONS TO PRODU CE THE LENDER BEFORE THE AO FOR EXAMINATION. THE ASSESSEE HAS FAILED TO ABI DE BY THE DIRECTIONS OF THE ITAT WITHOUT ANY DISCERNABLE REASON. THE BANK STATEMENT OF LENDER FILED DOES NOT REFLECT THE CLOSING BALANCE AFTER TR ANSACTION AT ALL. THE CREDITWORTHINESS IS NOT VERIFIABLE AT ALL. IN THE CIRCUMSTANCES WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE CIT(A) IN UP HOLDING THE ADDITIONS MADE. WE FIND THAT THE ORDER OF THE CIT(A) IS IN T UNE WITH THE EARLIER ORDER OF THE ITAT. WE ALSO NOTE THAT THE DECISION OF THE HONBLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. RANCHHOD JIVABHAI NAKHAVA RELIED UPON BY THE ASSESSEE IS DISTINGUISHABLE ON F ACTS HAS BEEN RENDERED IN ITS OWN SET OF FACTS. IN THAT CASE THE AO OF THE LENDER WAS SATISFIED WITH THE TRANSACTIONS. WE ALSO NOTE THAT THE LENDE R SHOWS A MEAGER INCOME OF RS.74 279/- RELEVANT TO ASST.YEAR 2005-06 WHICH CASTS SERIOUS ASPIRATIONS ON THE LENDING CAPACITY OF THE IMPUGNED LENDER. THE RETURN OF THE LENDER DOES NOT REFLECT THE IMPUGNED LOANS ADVA NCED TO THE ASSESSEE. THUS THE PRIMARY ONUS WHICH LAY ON THE ASSESSEE IS NOT FOUND TO BE DISCHARGED. THE DECISION RENDERED BY THE COORDINAT E BENCH IN THE CASE ITA NO.468/ RJT /2014 M/S.TULSI DIGITAL COLOUR LAB P.LTD. VS. ACIT ASST.YEAR 2005-06 - 7 - OF M/S.SANJAYRAJ PETROLEUM & HOTEL VS. ITO(SUPRA) I S ALSO SIMILARLY DISTINGUISHABLE ON FACTS. IT IS PERTINENT TO MEN TION THAT IN THE SECOND ROUND OF PROCEEDINGS BEFORE THE TRIBUNAL IT IS NOT OPEN FOR THE TRIBUNAL TO GO BEYOND THE SCOPE AND AMBIT OF THE DIRECTIONS SPELT BY THE TRIBUNAL IN THE EARLIER OCCASION. THE FINDINGS OF EARLIER ORDER OF THE ITAT CONTINUES TO BE SACROSANCT AND NOT SHOWN TO HAVE BE EN CHALLENGED. IN THIS VIEW OF THE MATTER WE DECLINE TO INTERFERE WI TH THE ORDER OF THE CIT(A). THUS GROUND RAISED BY THE ASSESSEE IS DIS MISSED. 7. IN THE RESULT ASSESSEES APPEAL STANDS DISMISSE D. THIS ORDER PRONOUNCED IN OPEN COURT ON 21 / 10 /2016 SD/- SD/- .. ! '#$% () (#&) ( S.S. GODARA ) ( PRADIP KUMAR KEDIA ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD; DATED 21/ 10 /2016 ..0 .0../ T.C. NAIR SR. PS / COPY OF THE ORDER FORWARDED TO : 1. * / THE APPELLANT 2. -* / THE RESPONDENT. 3. 8 2 ! 92 / CONCERNED CIT 4. ! 92 ( ) / THE CIT(A)-III RAJKOT 5. :; 20 /DR ITAT RAJKOT 6. %<1 / GUARD FILE. / BY ORDER -:2 2 //TRUE COPY// / ( DY./ASSTT.REGISTRAR) %& / ITAT RAJKOT