Bharat Enterprises, Mumbai vs Assessee

ी डी. म मोहन, उपा य एवं ी संजय अरोड़ा, लेखा सद य के सम ।

BEFORE SHRI D. MANMOHAN, V.P. AND SHRI SANJAY ARORA, AM

आयकर अपील सं./I.T.A. No. 7278/Mum/2012 ( नधा रण वष / Assessment Year: 2008-09) Bharat Enterprises Asst. CIT-24(1), B-219, Grace Plaza, S. V. Road, बनाम/ C-13, Bandra Kurla Complex, Jogehwari (W), Vs. Mumbai-400 051 Mumbai-400 102 थायी ले खा सं . /जीआइआर सं . /PAN/GIR No. AAEFB 2174 L (अपीलाथ$ /Appellant) : (%&यथ$ / Respondent)

अपीलाथ$ क' ओर से / Appellant by : None

%&यथ$ क' ओर से/Respondent by : Shri Asghar Zain

सनु वाई क' तार-ख / : 10.02.2015 Date of Hearing घोषणा क' तार-ख / : 18.03.2015 Date of Pronouncement

आदे श / O R D E R Per Sanjay Arora, A. M.:

This is an Appeal by the Assessee directed against the Order by the Commissioner of Income Tax (Appeals)-34, Mumbai ('CIT(A)' for short) dated 12.09.2012, partly allowing the Assessee's appeal contesting its assessment u/s.143(3) of the Income Tax Act, 1961 ('the Act' hereinafter) for the assessment year (A.Y.) 2008-09 vide order dated 29.11.2010.

2. None appeared for and on behalf of the assessee when its appeal was called out for hearing, nor any adjournment application stands moved. This, despite proof of service of notice of hearing for today instant, i.e., 10.02.2015, on record. Under the circumstances, 2 ITA No. 7278/Mum/2012 (A.Y. 2008-09) Bharat Enterprises vs. Asst. CIT

it was only considered fit and proper that the hearing be proceeded with, and the appeal decided after hearing the party before us.

3. The facts of the case, as gathered from the record, are that the assessee, a partnership firm in the business of civil construction, contractors and property developers, was observed during the course of assessment proceedings for the relevant year to have been credited sums, described as loans, aggregating to Rs.64 lacs from six parties, as under:

i) Dimple Manoj Patel Rs.23,00,000 ii) Manoj P. Patel Rs.7,00,000 iii) Manoj P. Patel HUF Rs.50,000 iv) Punjalal Patel HUF Rs.1,00,000 v) Rudiben Patel Rs.12,50,000 vi) Vinodkumar Varma Rs.20,00,000 Total Rs.64,00,000

To verify the genuineness of the transactions, summons u/s.131 of the Act were issued by the Assessing Officer (A.O.) on 04.10.2010 for 12.10.2010 to all the loan creditors. There being no compliance, fresh summons were issued on 21.10.2010 for 28.10.2010, to, again, the same result. The assessee was accordingly show caused in its respect u/s. 142(1) on 12.11.2010, in response to which the assessee filed confirmation from Shri Vinod Kumar Varma. The credits from the Patel family, totaling to Rs.44 lacs, remained to be proved, which is to be on the parameters of identity, credit worthiness and genuineness. Accordingly, the A.O. deemed the same as the assessee's unexplained income u/s.68 of the Act, relying on decisions by the apex court in the case of Sumati Dayal vs. CIT [1995] 214 ITR 801 (SC); Roshan Di Hatty vs. CIT [1977] 107 ITR 938 (SC); CIT vs. Durga Prasad More [1969] 82 ITR 807 (SC); CIT vs. M. Ganpati Mudaliar [1964] 53 ITR 623 (SC); and Kale Khan Mohammad Hanif vs. CIT [1963] 50 ITR 1 (SC). The assessee, in appeal, submitted that the payment from all the parties (residing at the same address), i.e., 74, Akshardam, Sardar Patel Colony, Mhada, Mumbai-400 053, had been received by cheque and, in fact, also repaid during the subsequent year per account payee cheques, also giving details thereof. The ld. CIT(A) was, however, not 3 ITA No. 7278/Mum/2012 (A.Y. 2008-09) Bharat Enterprises vs. Asst. CIT

impressed. No proof of identity, as in the form of ration card, voter ID, driving license, etc. had been furnished. Mere mention of the income tax file number would not itself prove the identity, as explained in CIT vs. Korlay Trading Co. [1998] 232 ITR 820 (Cal). Further, though PAN was given in one case, there was nothing to show that the concerned person was a regular assessee in-as-much as no copy of the returns of income filed or assessments made were furnished. Mere receipt of loan (credit) by cheque would not make a non-genuine transaction genuine, as clarified by the hon'ble courts. The impugned credits were thus unproved on all the three parameters/counts. The addition having been confirmed thus; aggrieved, the assessee is in second appeal.

4. We have heard the party before us, and perused the material on record.

Our first observation in the matter is that no improvement whatsoever, even as the appeal was filed on 07.12.2012, has been made by the assessee-appellant to date, who though was duly represented before the Revenue authorities, and who have, we further observe, only applied the well settled law in the matter, adverting to the celebrated decisions by the apex court, explaining and elucidating the same. The cheque details of the receipt and payment were not accompanied by the bank statements for the relevant period/s. That would at least prove the identity, as well as, perhaps, throw some light on the capacity - the second parameter, of the creditor/s. How, in its absence, could it be ascertained that the payment/s was received from the stated person, no proof of whose identity stands furnished, or even where so - in the form of PAN for two creditor - that the credit, to that extent, flows from him. Again, the receipt of payment by cheque is by itself not proof of genuineness, which has to be determined on the basis of an assessment of the entirety of the facts and circumstances of the case, with even as much as the confirmation - the most basic document, having not been filed for any of the impugned credits. Why, if the apparent is real, the entry in the assessee's books of account, acknowledging the receipt from a person, would itself prove the credit, which section 68 specifically requires being established as to its' nature and source, i.e., if it is not to be deemed as the assessee's income for the year of credit, so that it constitutes a rule of 4 ITA No. 7278/Mum/2012 (A.Y. 2008-09) Bharat Enterprises vs. Asst. CIT

evidence, statutorily mandated. There is further no explanation as to why there was no compliance or response to the summons, issued in fact twice, by the authorities. The assessee, on the contrary, emphasizes, i.e., rather than proving the credits on the three parameters afore-stated, as enunciated by the apex court, on the repayment of 'loan', stating it to be an advance given for the purchase of the property. In this regard, we may state that if the credit is genuine, i.e., shown to be so, it becomes immaterial whether it is repaid or not, while if it is not, it would again matter little that it has been repaid. If the entry/s of credit as appearing in the assessee's books of account is not conclusive of it being a genuine credit, it stands to reason that the repayment in accounts also could not be. Rather, it is on the strength of the credit entry in the books that section 68 becomes invokable. We have already explained that entries through the banking channel are not sacrosanct, and do not, without anything further, prove anything, except of-course the identity, which is also not established in the present case in the absence of the bank statements of the creditors. No material, as also afore-stated, in support of the assessee's claim of the relevant credits, reflected as 'unsecured loans' in the assessee's own accounts, being advances, made (for the first time) in the appellate proceedings before the ld. CIT(A), stands adduced, so that the same again remains unproved.

5. We are, in view of the foregoing, in complete agreement with the Revenue that the assessee has completely failed to discharge the burden of proof on it to establish the impugned credits and, accordingly, confirm the invocation of section 68 in the facts and circumstances of the case. We decide accordingly.

6. In the result, the assessee's appeal is dismissed.

प2रणामतः 4नधा62रती क' अपील खा2रज क' जाती है ।

Order pronounced in the open court on March 18, 2015

Sd/- Sd/-

(D. Manmohan) (Sanjay Arora) उपा य / Vice President लेखा सद य / Accountant Member मुंबई Mumbai; 8दनांक Dated : 18.03.2015 5 ITA No. 7278/Mum/2012 (A.Y. 2008-09) Bharat Enterprises vs. Asst. CIT

व.4न.स./Roshani, Sr. PS

आदे श क" # त%ल&प अ'े&षत/Copy of the Order forwarded to :

1. अपीलाथ$ / The Appellant

2. %&यथ$ / The Respondent

3. आयकर आय9 ु त(अपील) / The CIT(A)

4. आयकर आय9 ु त / CIT - concerned

5. <वभागीय %4त4न?ध, आयकर अपील-य अ?धकरण, मंब ु ई / DR, ITAT, Mumbai

6. गाड6 फाईल / Guard File आदे शानस ु ार/ BY ORDER,

उप/सहायक पंजीकार (Dy./Asstt. Registrar) आयकर अपील य अ धकरण, मुंबई / ITAT, Mumbai