Ita/909/2009 Of The Commissioner Of Income Tax, Calicut v. M/S.c.vijayan & Co

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR & THE HONOURABLE MR. JUSTICE V.K.MOHANAN MONDAY, THE 16TH NOVEMBER 2009 / 25TH KARTHIKA 1931 ITA.No. 909 of 2009() --------------------- ITA.303/COCH/2005 of I.T.A.TRIBUNAL,COCHIN BENCH .................... APPELLANT/APPELLANT --------------------------------------- THE COMMISSIONER OF INCOME TAX, CALICUT. BY ADV. SRI.P.K.R.MENON,SR.COUNSEL, GOI(TAXES) SRI.JOSE JOSEPH, SC, FOR INCOME TAX RESPONDENT(S): RESPONDENT ------------------------- M/S.C.VIJAYAN & CO., EDAYUR NORTH, MALAPPURAM. ADV. SRI.P.BALAKRISHNAN (E) FOR R THIS INCOME TAX APPEAL HAVING BEEN FINALLY HEARD ON 16/11/2009 THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ON 16/11/2009 THE COURT ON THE SAME DAY DELIVERED THE -------------------------------------------- -------------------------------------------- Dated this the 16th day of November, 2009 JUDGMENT Ramachandran Nair, J. Appeal is filed by the Revenue challenging the order of remandby the Tribunal remanding the matter again to the assessing officer onthe ground that the Tribunal has no justification to do so. We haveheard standing counsel appearing for the revenue and Sri. P.Balakrishnan, counsel appearing for the respondent. 2. Respondent was admittedly engaged in civil constructionwork. In the course of verification of books of accounts for the year2001-02, the assessing officer noticed that the assessee has recorded aliability of Rs. 33,50,000/- as due to 179 persons. The accountscontaining this as cash credits were initially explained by the assesseeas amounts due to various suppliers of country materials. However, inthe appeal before the CIT (Appeals), the assessee changed the standthat the amount represented cash borrowed from workers, each suchloan is found to be around Rs. 18,000/- or Rs. 19,000/- just below the limit of Rs. 20,000/- borrowal of which requires accpetance of the sameby cheque or demand draft as provided under Section 269SS of theAct. The appellate authority called for a remand report from theassessing officer who based on the facts and confirmation lettersproduced by the assessee from the workers called for and examined 30persons. None of the creditors examined proved assessee's case.Consequently the assessing officer reported that the claim is bogus.Even though CIT (Appeals) dismissed the appeal, the assessee went infurther appeal before the Tribunal. The Tribunal also concluded thatthe assessee's case is bogus and inspite of such a finding entered by theTribunal, the Tribunal remanded the matter again to the Officer forgiving one more opportunity to the assessee. Even though counsel forthe respondent contended that the assessee was given opportunity tocross-examine the persons examined by the Officer and for thispurpose, the Tribunal remanded the matter, we are unable to uphold theorder the Tribunal because burden of proof to explain cash credit is onthe assessee. The assessee not only failed to prove cash credit but thepersons from whom the assessee is stated to have borrowed fundsdeposed before the Officer that they have not advanced any such loans.When the assessee shifted the stand from country materials purchased to cash borrowals, the bona fides stood disproved there itself.However, CIT (Appeals) was considerate in giving an opportunity tothe assessee to prove cash credits before the Officer. However, oncethe assessee failed to establish the same before the Officer in the courseof pendency of appeal before the CIT (Appeals), there is nojustification for the Tribunal again to remand the matter. FurtherTribunal's order amounts to shifting of burden to department to provecash credit which was not explained by the assessee in the assessmentor in the appeal before the CIT (Appeals). It is seen that the tribunalitself could not accept assessee's explanation. In other words, theTribunal unncessarily remanded the matter only to protract it. Wetherefore allow the appeal by reversing the order of the Tribunal and byrestoring the assessment confirmed in first appeal. (C.N.RAMACHANDRAN NAIR)Judge.Judge. (V.K. MOHANAN) Judge. kk