Commissioner Of Income Tax, Jaipur-Ii, Jaipur v. M/S Lok Vikas Leasingh Pvt. Ltd., 3-F

HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH ATJAIPUR D.B. Income Tax Appeal No. 63 / 2006 Commissioner of Income Tax, Jaipur-II, Jaipur. ----Appellant Versus M/s Lok Vikas Leasingh Pvt. Ltd., 3-F-1, Shivanand Marg, Malviya Nagar, Jaipur. ----Respondent _____________________________________________________ For Appellant(s) : Mr. R.B. Mathur _____________________________________________________ HON'BLE MR. JUSTICE K.S. JHAVERIHON'BLE MR. JUSTICE VIJAY KUMAR VYAS Judgment Per Hon’ble Jhaveri, J. 16/05/2017 1.By way of this appeal, the appellant has challenged thejudgment and order of the Tribunal whereby the Tribunal hasconfirmed the order of the CIT(A) which has allowed the appeal ofthe assessee and dismissed the appeal preferred by thedepartment. 2.This court while admitting the appeal on 17.02.2006 has framed the following substantial questions of law: “(i)Whether in the facts and circumstancesof the case the ITAT and CIT(A) are justifiedin law and have not acted perversely indeleting the additions made u/s.68 of the Actof Rs.76,20,912/- on account of unexplaineddeposits when the assessee neithersubmitted books of account nor there wasany record to substantiate the claim of theassessee.of the case the ITAT and CIT(A) are justifiedin law and have not acted perversely indeleting the additions made u/s.68 of the Actof Rs.76,20,912/- on account of unexplaineddeposits when the assessee neithersubmitted books of account nor there wasany record to substantiate the claim of theassessee. (ii)Whether in the facts and circumstancesof the case the ITAT and CIT(A) werejustified in law in granting the relief ofof the case the ITAT and CIT(A) werejustified in law in granting the relief of Rs.9,14,510/- on account of interest paid onbogus loans when the account and bookswere never submitted before the assessingofficer and the loans could not besubstantiated?” 3.Mr. Mathur counsel for the revenue has taken us to the orderof CIT(A) wherein the CIT(A) has in para 6 & 7 held as under: “6 The next ground of appeal relates to thereply of the appellant assessee companysubmitted on 14.2.2002 that the books ofaccounts, documents and other relevantrecords of the company have been sealedand locked by the official liquidator in thecase of M/s Lok Vikas Finance Corporation.This matter has been dealt with by the AO inpara-2 of the assessment order andwhatever efforts were required on his part,he has requested the official liquidator toproduce the requisite information alongwithbooks of accounts for the period underconsideration. The official liquidator in replyto this request has informed that he is theofficial liquidator in the case of M/s Lok VikasFinance Corporation only and not in the caseof the appellant assessee company.Thereafter, the AO has given opportunity tothe director of the company to produce thebooks of accounts on 5.3.2002 and11.3.2002 but the appellant could notproduce the requisite details/books ofaccounts. In completion of the assessmentthe appellant assessee is ought to haveproduced the books of accounts and otherdetails and documents as required by the AObut in the instant case the appellant assesseehas failed to furnish the requisite details anddocuments. Therefore, this ground of appealhas no weight and the same is rejected. 7. The next ground of appeal related to anaddition of Rs.1,35,50,063/-, interestclaimedonunexplaineddepositsRs.24,26,003/- and interest income due todifference in reconciliation Rs.3,10,315/- Theperusal of the assessment orders shows thatthe appellant assessee company in itsbalance sheet has shown the fixed deposit ofRs.1,35,50,063/- from public and nosupporting detail was available in theassessment record. Therefore, the AO vide 7. The next ground of appeal related to anaddition of Rs.1,35,50,063/-, interestclaimedonunexplaineddepositsRs.24,26,003/- and interest income due todifference in reconciliation Rs.3,10,315/- Theperusal of the assessment orders shows thatthe appellant assessee company in itsbalance sheet has shown the fixed deposit ofRs.1,35,50,063/- from public and nosupporting detail was available in theassessment record. Therefore, the AO vide his letter dated 5.3.2002 has asked theappellant assessee to furnish the details ofunsecured loans shown as Fixed Depositsfrom public amounting to Rs.1,35,50,063/-.Since the appellant assessee could notfurnish the requisite details, the AO has heldthe above said deposits of Rs.1,35,50,063/-as concealed income of the assesseecompany holding that the assessee has failedto prove the identity, creditworthiness of thecreditors and the genuineness of thetransactions.” 4.Mr. Mathur has contended that the Tribunal has confirmedthe order of CIT(A) and para 3 & 4 of the order of the Tribunalreads as under: “3. This issue has been discussed by the ld.CIT(Appeals) at pages 4&5, in paras 7.1 &7.2 of his order. The ld. CIT(Appeals)observed in para 7.2 that the fixed depositsin the shape of unsecured loan acceptedduring the accounting period relevant to theassessment year 1995-96 cannot be addedunder section 68 of the I.T. Act, 1961.Therefore, the action of the AO in making theaddition of the whole of the amount ofRs.1,35,50,063/-, which also included thecarry-forward deposits of Rs.76,20,912/- wasnot justified. 4. After perusal of the case, we are of theviews that the ld. CIT(Appeals) had rightlydeleted the addition made by the AO out ofunexplained deposits as the amount ofdeposit of Rs.76,20,912/- pertained to theassessment year 1995-96 and to the yearunder appeal. Thus, we find no infirmity inthe order of the ld. CIT(Appeals).” 5.Mr. Mathur has further contended that if the finding of non-availability of books of accounts has been confirmed, since theassessee has gone into liquidation, the best way for the CIT(A)was to have remanded the matter back to the Assessing Officer. 6.We have considered the case which is of the assessmentyear 1996-97. The CIT(A) while considering the matter hasconsidered each of the ground in detail and after taking intoconsideration the law prevailing at that time, has rightly decidedcarry forward deposits of the previous year could not be includedin the income. 7.In that view of the matter, the issues are answered in favour of the assessee and against the department. 8.The appeal stands dismissed. (VIJAY KUMAR VYAS),J. (K.S. JHAVERI),J. Asheesh Kr. Yadav/11