Commissioner Of Income Tax, Jaipur-Iii, Jaipur v. M/S Terry Fab (India) Ltd., Village Chandwaji, District Jaipur

HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR D.B. Income Tax Appeal No. 280 / 2010 1. Commissioner Of Income Tax, Jaipur-Iii, Jaipur ----Appellant Versus 1. M/s Terry Fab (India) Ltd., Village Chandwaji, District Jaipur ----Respondent For Appellant(s) : Mr. Sameer Jain with Ms. Mahi Yadav.For Respondent(s): Mr. Sanjay Jhanwar with Ms. Archana. HON'BLE MR. JUSTICE K.S.JHAVERI HON'BLE MR. JUSTICE INDERJEET SINGH 04/09/2017 Judgment 1.By way of this appeal, the appellant has challenged thejudgment and order of the Tribunal whereby the tribunal has partlyallowed the appeal of the assessee. 2.While admitting the appeal, this court on 06.07.2011 has framedthe following substantial question of law:- “Whether the learned ITAT being the last fact findingbody has erred in law and on facts in deleting, additionof Rs.3,46,42,373/- without appreciating the fact thatthe assessee has failed to produce any of the creditor, orhas filed evidences of their identity, creditworthiness andgenuineness of the transaction as mandatory requiredu/s. 68 of the Income Tax Act, 1961?” 3.Mr. Jain, counsel for the appellant has taken us to the originalrecord and contended that on 21.11.2006 from original sheet, theAssessing Officer has written as under:- No books of accounts have been produced. Confirmationfiled was not supported with the evidence, failed tojustification,creditworthiness,genuineness,reasonability, of the sources. (i)To justify the credit worthiness, genuineness, ofcash creditors and also produce the in person of the saidcompany. (ii)Trading result. Adjourn to 28.11.2017 at 10:00 AM failing which thecase will, completed. Signed by(P. Khandelwal)AO21.11.2006.” 4.The matter was listed on 21.11.2006 and adjourned to28.11.2006 and the same was signed by the representative of theassessee. 5.Counsel for the respondent has pointed out that the date28.11.2006 was for sake of convenience of the officer, otherwisecalculations were made on 21.11.2006. 6.Counsel for the respondent as taken us to the order of thetribunal which reads as under:- “The ld. Counsel of the assessee reiterated thecontentions raised before the lower authorities. It wasfurther submitted that they have not filed any additionalevidence before ld. CIT (A) as whatever the details werefiled before the AO, only those details were filed beforethe ld. CIT(A). Attention of the Bench was drawn at pageA-4 of the paper book wherein list of details filed beforeld. CIT(A) which were also filed before the AO is place. Itwas further submitted that a sum of Rs.2,42,32,373/-pertained to earlier year i.e. assessment 2003-04. It wasfurther submitted that in assessment year 2003-04 theaddition on account of cash credits were also made andmatter travelled upto the stage of Tribunal and theTribunal has confirmed the order of ld. CIT(A) whodeleted the addition of Rs. 40 lacs made by the AO underSection 68. Regarding the remaining addition, it wascontentions raised before the lower authorities. It wasfurther submitted that they have not filed any additionalevidence before ld. CIT (A) as whatever the details werefiled before the AO, only those details were filed beforethe ld. CIT(A). Attention of the Bench was drawn at pageA-4 of the paper book wherein list of details filed beforeld. CIT(A) which were also filed before the AO is place. Itwas further submitted that a sum of Rs.2,42,32,373/-pertained to earlier year i.e. assessment 2003-04. It wasfurther submitted that in assessment year 2003-04 theaddition on account of cash credits were also made andmatter travelled upto the stage of Tribunal and theTribunal has confirmed the order of ld. CIT(A) whodeleted the addition of Rs. 40 lacs made by the AO underSection 68. Regarding the remaining addition, it was submitted that respective amount of loan was receivedfrom various companies who are regularly assessed totax. Confirmations of these parties showing theirPermanent Account Numbers were filed before the AO.The AO has not bothered to verify the records of thesecompanies. It was further submitted that the AO requiredthe assessee to produce these parties on 28.11.2006.However, the assessment has already been completed on27.11.2006. Attention of the Bench was drawn at page37 of the paper book i.e. Form ITNS-150 dated27.11.2006 showing the calculation of tax enclosed withthe assessment order, is place. Accordingly, it wassubmitted that the AO has not applied his mind at all,neither he has taken into consideration old cash creditorsnor the confirmation as he simply made the additions.The ld. CIT(A) was also not justified in not taking intoconsideration the order of the Tribunal and copy ofaccounts of earlier year as well as copy of accounts forthe year under consideration.” 7.We have issued notice to the officer for not giving date in theassessment order and tax was calculated on the previous date of thedate of hearing and it is claimed that the order is served on08.12.2006. 8.Taking into consideration the lapses of the officer, the assesseehad to under go mental agony. However, the Tribunal has realized thesame and observed as under: “We have heard rival submissions and considered themcarefully. After considering the relevant material andother material it is found that assessee has discharged itonus lay upon it. Copy of confirmations of the partiesfrom whom the loans were taken during the year underconsideration are place in the paper book pages 1 to 15.It is further seen that the parties from whom therespective loans has been taken are companies and areassessed to tax. Their Permanent Account Number ismentioned in the confirmations. No enquiry has beenmade by the AO from these parties or from therespective ITO of the parties. It is further seen that outof Rs.3,46,27,373/-, a sum of Rs.2,42,32,373/- pertainsto earlier years. Therefore, there is no question ofmaking any addition under Section 68 of this amount inthey year under consideration. It is also a matter of factthat in the assessment for immediately precedingassessment i.e. A.Y. 2003-04 disallowances were madeunder Section 68 on account of various loans taken bythe assessee. The ld. CIT(A) deleted the addition madeunder Section 68 for A.Y. 2004-04. Order of ld. CIT(A)has been confirmed by the Tribunal while deciding the appeal in ITA No.614/JP/2008 vide order dated31.12.2008. Copy of order of Tribunal is placed at pages20 to 28 of the paper book. This fact was brought to theknowledge of ld. CIT(A). However, ld. CIT(A) has notcommented upon. Nether the order of Tribunal wastaken into consideration nor the fact that to the extentof Rs. 2,42,32,373/- was not received during the yearunder consideration was taken into consideration. Eachand every details were filed before ld. CIT(A). However,they were treated as additional evidence whereas noadditional evidence was filed before the ld. CIT(A). Inview of these facts and circumstances, we hold thatthere was no justification at all to make and confirm theaddition of Rs.2,42,32,373/-. Therefore, the same isdeleted. 9.Taking into consideration the above, we are of the opinion thattribunal has not committed any serious error and the deletion whichhas been made by the Tribunal is just and proper, therefore, nointerference is called for. 10.The issue is accordingly required to be answered in favour of theassessee against the department. 11.The appeal stands dismissed. We hold that the lapse which hasbeen committed by the officer is of very serious nature and it is eitherloss to the Revenue or at least caused mental agony to the assessee. 9.Taking into consideration the above, we are of the opinion thattribunal has not committed any serious error and the deletion whichhas been made by the Tribunal is just and proper, therefore, nointerference is called for. 10.The issue is accordingly required to be answered in favour of theassessee against the department. 11.The appeal stands dismissed. We hold that the lapse which hasbeen committed by the officer is of very serious nature and it is eitherloss to the Revenue or at least caused mental agony to the assessee. 13.However, in view of the request made by Mr. Jain, counsel forthe appellant no action is taken against the officer. We accept theapology and warn him that such a blunder will not be committed infuture. (INDERJEET SINGH),J (K.S.JHAVERI),J Pdaiya/Mohit Grover Sr. No.30.