Amik Printers, Ahmedabad vs Department Of Income Tax

ACIT, M/s. Amik Printers, Circle-12, Kamkoriwala Compound, Ahmedabad Vs Nr. Ram Rahim Tekra, B/h (Appellant) Calico Mills, Behrampura, Ahmedabad PAN: AADFA5545M (Respondent)

Revenue by: Shri Dinesh Singh, Sr. D.R. Assessee by: Shri P.F. Jain, A.R.

Date of hearing : 26-03-2015 Date of pronouncement : 21-04-2015

आदे श/ORDER

PER : RAJPAL YADAV, JUDICIAL MEMBER:-

The present appeal is directed at the instance of Revenue against the order of Ld. CIT(A)-XX dated 27-08-2010 passed for assessment year 2005-06. The grounds of appeal taken by the revenue are not in consonance with Rule 8 of the ITAT Rules, they are descriptive and augmentative in nature. In brief the grievance of the revenue is that Ld. I.T.A No. 3059/Ahd/2010 A.Y. 2005-06 Page No 2 ACIT vs. M/s. Amik Printers

CIT(A) has erred in deleting the addition of Rs. 10,67,572/- appearing against the name of 5 persons, which have been added by the AO with the aid of section 68 on account of unexplained cash credit.

2. The assessee is an individual running a proprietary concern in the name and style of M/s. Amik Printers. He has filed his return of income on 29-10-2005 declaring total loss of Rs. 10,69,779/-. The case of the assessee was selected for scrutiny assessment and notice under section 143(2) was issued and served upon the assessee. On scrutiny of accounts, it revealed to the Ld. AO that assessee had credit entries, which are appearing against the names of13 persons. He took note of these entries as under:-

Sr. No. Name of the Party Deposited amount and interest thereon i.e. Closing balance (Rs.) 1 A.K. Traders 50,000/- 2 Gurumukhdas Dulhanomal Pritmani 2,80,000/- 3 Dulhanmal A. Printmani 2,00,000/- 4 Suresh Lalchand 1,48,674/- 5 S.K. Shah 55,082/-

6 Niraj Damodar Gopalani 95,000/- 7 R.V. Finance 6,00,000/- 8 Rehandibai Nanikram 50,000/- 9 Mohanlal Rochiram (HUF) 98,898/- 10 Kaushlya G. Pritmani 2,00,000/- 11 Menghiben Dulhanomal Pritmani 1,20,000/- 12 Vidhya Vasudev Aavtarmani 1,98,980/-

I.T.A No. 3059/Ahd/2010 A.Y. 2005-06 Page No 3 ACIT vs. M/s. Amik Printers

13 Pinki Rameshchandra Pritmani 1,00,000/-

Total 21,96,634

3. The Ld. AO directed the assessee to explain the identity of the creditors, their creditworthiness and genuineness of the transaction. The assessee has submitted the information in tabular form, exhibiting addresses, Pan No. and other details. However, these details did not satisfy the AO, hence he made an addition of Rs. 21,96,634/- u/s. 68 of the Income Tax Act, 1961 (hereinafter referred to as the 'Act').

4. Dissatisfied with the action of the AO, assessee filed appeal before Ld. CIT(A). He reiterated his contention as were raised before AO. He also filed the copies of income tax return, bank statements, confirmations and permanent account number of the creditors. Ld. CIT(A) had called for remand report from the AO. After going through the evidence filed by the assessee, and the remand report, Ld. CIT(A) had deleted the addition except appearing the credits against the name of M/s A.K. Traders, S.K. Shah, Niraj Damodar Gopalani and Rehandibai Nanikram, out of the list extracted above.

5. With the assistance of Ld. representatives, we have gone through the record carefully. Section 68 of the Act contemplates that 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 AO, satisfactory, the sum so credited may be charged to income tax as the income of the assessee of that previous year. No doubt, credit entries are I.T.A No. 3059/Ahd/2010 A.Y. 2005-06 Page No 4 ACIT vs. M/s. Amik Printers

available against the names of 13 persons in the books of assessee, therefore, he is supposed to explain the source of deposits in the books. Section 68 of the Act puts an obligation upon the assessee to prove identity of the creditor, his creditworthiness and genuineness of the transaction. In order to discharge the onus cast upon the assessee, he has filed names and address, PAN no., copy of bank account, copy of income tax return for the corresponding periods of the creditors. The Ld. First Appellate Authority has called for a remand report from the AO. Ld. CIT(A) has examined the facts of individual creditor in seriatim. Ld. CIT(A) on an analysis of the facts was not satisfied with regard to the creditworthiness as well as genuineness of the transaction qua four creditors and confirmed the additions.

6. The grievance of the revenue is that no discussion has been made as far as five creditors are concerned namely Suresh Lalchand, R.V. Finance, Mohanlal Rochiram (HUF), Menghiben Dulhanomal Pritmani and Pinki Rameshchandra Pritmani We find that as far as approach of Ld. First Appellate Authority is concerned, it is in consonance with the requirement provided in section 68. There is no confusion in the mind of First Appellate Authority while analyzing the detail of each creditor. Ld. First Appellate Authority is of the opinion that identity of creditor has to be proved. Similarly, the transaction has to be proved as genuine as well as creditors should be creditworthiness. While examining the detail of the first creditor namely Gurumukhdas Dulhanomal A Pritmani, Ld. First Appellate Authority has observed that money was paid through account payee cheque. Shri Gurumukhdas Dulhanomal A Pritmani had not received any money from the assessee before issuance of a cheque to the assessee. He was a income tax payer and the copy of the return was also submitted. It is I.T.A No. 3059/Ahd/2010 A.Y. 2005-06 Page No 5 ACIT vs. M/s. Amik Printers

pertinent to mention that there are 13 creditors. Ld. CIT(A) has confirmed the addition qua four, meaning thereby, additions have been deleted qua 9 creditors. Revenue is challenging the deletion qua five creditors only. The grievance of the revenue is that discussion was not made by the Ld. First Appellate Authority with respect to five. In our opinion, when Ld. First Appellate Authority has made observation about 13 creditors then it is to be appreciated that Ld. First Appellate Authority must have a glance on all the details. It is the Assessing Officer who did not make specific objections to the details submitted by the assessee, in his remand report in respect of these five creditors. Therefore, after going through the order of Ld. CIT(A), we are of the view that Ld. CIT(A) has appreciated the facts in right perspective and no interference is called for. This appeal is devoid of any merit. It is dismissed.

Order pronounced in the open court on 21-04-2015

Sd/- Sd/-

(G.D. AGRAWAL) (RAJPAL YADAV) VICE PRESIDENT JUDICIAL MEMBER Ahmedabad : Dated 21/04/2015 ak

आदे श क ूितिल प अमे षत / Copy of Order Forwarded to:-

1. Assessee

2. Revenue

3. Concerned CIT

4. CIT (A)

5. DR, ITAT, Ahmedabad

6. Guard file.

By order/आदे श से, उप/सहायक पंजीकार आयकर अपीलीय अिधकरण, अहमदाबाद