Ita/117/2016 Of Satpal Goyal v. Commissioner Of Income Tax (Central) Ludhiana

IN THE HIGH COURT OF PUNJAB AND HARYANA ATCHANDIGARH ITA No.117 of 2016 (O&M)Date of decision: 23.05.2016 Satpal Goyal VS, Commissioner of Income Tax (Central) Ludhiana .-..-- Appe ...mespondent CORAM: HON’BLE MR. JUSTICK AJAY KUMAR MITTALHON BLE MRS. JUSTICE RAJ RAHUL GARG 1. Whether Reporters of local papers may be allowed to see the judgment? 2. To be referred to the Reporters or not?YES 3. Whether the judgment should be reported in the Digest? Present: Mr. Deepak Aggarwal, Advocate for the appellant-assessee. Ajay Kumar Mittal,J, inDelay in refiling the appeal 1s condoned. ? This appeal has been preferred by the appellant-assessee under Section 260A of the Income Tax Act, 1961 (in short, “the Act”) against the order dated 10.2.2015, Annexure A.3 passed by the Income Tax Appellate Tribunal, 'B' Bench, Chandigarh (in short, “the Tribunal’) in ITA No.743/CHD/2014, for the assessment year 2005-06, claiming following substantial questions of law:- “a) Whether in the present facts and circumstances of the case, the learned!ITAT was justified in upholding the addition ofv5,80, 100/-ITAT was justified in upholding the addition ofv5,80, 100/- b) Whether in the present facts and circumstances of the case, the order ofthe learned ITAT 1s perverse?the learned ITAT 1s perverse? 3]A few facts relevant for the decision of the controversy involved as available on the record may be noticed. The assessee 1s a property dealer. He 1s engaged in the business of booking plots and constructing them in collaborationwith Motia group. Search and seizure operation under section 132 of the Act wasconducted on 25.22.2009. Notice under section 153A of the Act was issued o9.7.2009 to the assessee to file the return of income. Accordingly, returndeclaring income ofTL1,35,570/- was filed on 2.9.2009 by the assessee. The casewas taken up for scrutiny. Notice under section 143(2) of the Act was issued tothe assessee. Representative of the assessee appeared and furnished the requisiteinformation. The assessee had shown business income from property dealing.The assessee had also shown sundry creditors of=a7,97,600/-. The assessee wasrequired to file certified copy alongwith narration in the books of all the creditorswith regard to the amount of=a7,97,600/-. He was also required to furnish thestatus of the credit balance in his books of account for the financial year 2005-06,1e. the next year. The Assessing Officer made an addition of-5,80, 100/towards unexplained credits under Section 68 of the Act vide order dated22.12.2010, Annexure A.|. The details of unexplained credits are as under:- Sr.No.NameAmount 1. Shri Ajay Bansa<1,71,500/-2? Mukat Bricks Kiln DhodaLT1,93,700/-3 Yaseen=a23,300/-4 Hari Iron & Cement StoreLT1,67,600/- Total:<a5,80, 100/ The Assessing Officer made the additions on the ground that the assessee failed proceedings. Aggrieved by the order, the assessee filed appeal before theCommissioner of Income Tax (Appeals) [CIT(A)] alongwith application underRule 46A of the Income Tax Rules, 1962 (in short, “the Rules’) for admission ofadditional evidence. Vide order dated 15.5.2014, Annexure A.2, the CIT(A)rejected the appeal and confirmed the additions made by the Assessing Officer.Still not satisfied, the assessee filed appeal before the Tribunal. Vide order dated10.2.2015, Annexure A.3, the Tribunal dismissed the appeal. Hence the instantappeal by the assessee-appellant. Sr.No.NameAmount 1. Shri Ajay Bansa<1,71,500/-2? Mukat Bricks Kiln DhodaLT1,93,700/-3 Yaseen=a23,300/-4 Hari Iron & Cement StoreLT1,67,600/- Total:<a5,80, 100/ The Assessing Officer made the additions on the ground that the assessee failed proceedings. Aggrieved by the order, the assessee filed appeal before theCommissioner of Income Tax (Appeals) [CIT(A)] alongwith application underRule 46A of the Income Tax Rules, 1962 (in short, “the Rules’) for admission ofadditional evidence. Vide order dated 15.5.2014, Annexure A.2, the CIT(A)rejected the appeal and confirmed the additions made by the Assessing Officer.Still not satisfied, the assessee filed appeal before the Tribunal. Vide order dated10.2.2015, Annexure A.3, the Tribunal dismissed the appeal. Hence the instantappeal by the assessee-appellant. 4 We have heard learned counsel for the appellant.4 It has been categorically recorded by the Tribunal after appreciatingthe evidence on record that the assessee failed to prove the identity of thecreditors, their capacity and genuineness of the transactions in the matter. It wasobserved that the additional evidence produced before CIT(A) was not sufficientto discharge the onus upon the assessee to prove the genuine credit in the matterand further that the assessee had also failed to explain as to why the additionalevidence could not be produced before the Assessing Officer. It has also beenrecorded that no independent confirmation of the creditors had been filed by theassessee. Thus, 1t was concluded that the assessee had booked bogus purchase ofconstruction material in the profit and loss account as no purchase vouchers for a sum ofLv5,80,100/- had been produced. The relevant findings recorded by theTribunal read thus:- perused the material available on record. The Assessing Officer hasspecifically found that the assessee has booked bogus purchase ofconstruction material in the profit and loss account because nopurchase vouchers for a sum ofa5,80,100/- have been produced.Therefore, there 1s no question of entering the genuine credit in thebooks of account. This finding of fact has not been rebutted by theassessee at all. The assessee in the paper book has filed applicationfor admission of additional evidence before the learnedCIT(Appeals) in which the assessee sought admission of theconfirmation and documentary evidences before the learnedCIT(Appeals). However, the same would show that in the case ofShri Ajay Bansal photo copy of account and photocopy of bill havebeen filed. In the case of Mukat Bricks Kiln Dhodan same copy ofthe account and copy of the bill and copy of confirmation of theaccount 1s filed. The same is the position in respect of Yaseen andHari Iron and Cement Store. It 1s therefore clear that in none of thecases the assessee has filed an independent confirmation. All theoutstanding balance appearing in the books of account of theassessee are stated to have been from the creditors. Mereconfirmation of the account or copy of the account would not provethe genuineness of the credit in the matter. As noted above, since thepurchase vouchers qua these parties have not been produced beforethe Assessing Officer at assessment stage, would prove that theassessee booked bogus purchases in the books of account as well asnoted bogus credit entries in the books of account. We have alreadyreferred to the judgments of Hon'ble Calcutta High Court in thecases of Bharati Private Limited and United Commercial andIndustrial Company Pvt. Limited (supra) for the proposition thatmere filing of confirmation is not enough to prove the genuine credit, would clearly prove that the assessee failed to prove thegenuine credit in the matter. The assessee failed to prove the identityof the creditors, their capacity and genuineness of the transaction inthe matter. Whatsoever additional evidences were produced beforethe learned CIT(Appeals) are not sufficient to discharge the onusupon the assessee to prove the genuine credit in the matter. Furtherthe assessee failed to explain why the same were not filed before theAssessing Officer. Therefore, the learned CIT(Appeals) was justifiedin refusing to admit this additional evidence in the case Shri GulyariLal for loan ofv2,50,000/-. Even before us no confirmation or anyevidence have been filed to prove the genuineness of the credit,Therefore, the learned CIT (Appeals) was justified in confirmingboth the additions.” 6.The view adopted by the Tribunal is a plausible view based onappreciation of material on record and, therefore, does not warrant anyinterference by this Court. Learned counsel for the appellant-assessee has notbeen able to show any illegality or perversity in the impugned order. Nosubstantial question of law arises in this appeal. Consequently, the appeal stands dismissed_ (Ajay Kumar Mittal)Judge May 23, 2016 ;:%; (Raj Rahul Garg)Judge