Statute Circle, C-Scheme, Jaipur v. M/S Dhanlaxmi Equipment Pvt Ltd

HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH ATJAIPUR D.B. Income Tax Appeal No. 189 / 2016 Pr Commissioner Of Income Tax Jaipur-3, Statute Circle, C-Scheme, Jaipur. ----Appellant Versus M/S Dhanlaxmi Equipment Pvt Ltd. F-79(A), Jetpura, Jaipur, AY 2008-09 ----Respondent _____________________________________________________For Appellant(s) : Mr. Sameer Jain For Respondent(s) : Mr. Siddharth Ranka HON'BLE MR. JUSTICE K. S. JHAVERI HON'BLE MR. JUSTICE VIJAY KUMAR VYAS judgment 23/10/2017 1.By way of this appeal, the appellant has challenged thejudgment and order of the Tribunal whereby the Tribunal hasdismissed the appeal of the department. 2.This court while admitting the appeal on 14.12.2016 framed the following question of law:- “ 1. Whether in the Tribunal is justified in law and onfacts in deleting the addition of Rs. 2.16 crore made u/s68, ignoring that the assessee company had failed todischarge the onus cast upon of proving identity andcreditworthiness of the creditors and genuineness oftransaction u/s 68 of the IT Act, 1961?” 3.However the Tribunal while considering the matter observed as under:- “6. We have heard the rival contentions of boththe parties and perused the materials available on record. The ld Assessing Officer during thecourse of assessment proceedings, noticed thatthe assessee has shown deposits, fresh capitalof Rs. 6,11,50,000/- in different form i.e.unsecured loan, reserve and surplus and sharecapital money. The ld Assessing Officer verifiedthe information submitted by the assesseethrough ADIT, Kolkata, who had sent interimreport, which was received on 14/12/2010whereas assessment was completed on30/12/2010. In interim report, as per AssessingOfficer in 9 cases, notices were returned back butit was not informed to the assessee about theconclusion of the enquiry by the ADIT, Kolkata orAssessing Officer of the assessee. The ldAssessing Officer heavily relied on the Inspector’sreport in confirming the addition but result of theenquiry of the Inspector has not beencommunicated to the assessee, which is againstthe principles of natural justice. As per AssessingOfficer, in case of 5 companies, the source offund was not found explained. The ld AssessingOfficer again gave show cause notice on23/12/2010. The assessee filed reply on27/12/2010 and it was claimed before theAssessing Officer that no enquiry has been madeby the Assessing Officer on changed addresses.The ld Assessing Officer had not considered theevidence filed by the assessee during the courseof assessment proceedings i.e. affidavitsconfirming the transaction, PAN number,complete addresses of creditors, copy of balancesheet, ITR for A.Y. 2008-09, bank statement andform No. 18. The assessee had discharged itsonus by providing the requisite evidences toprovetheidentity,genuinenessandcreditworthiness of the cash creditors. The ldAssessing Officer herself had accepted theremaining cash creditors to the tune of Rs. 3.95crores explained on the basis of similar evidencesproduced by the assessee as genuine. Theloan/share capitals were received from theprivate limited companies. They also are filingreturn under the company’s law and allinformation is available on MCA website. TheADIT report was not conclusive to held that thecash creditors were not genuine. It is notrequired under the law to prove the source ofsource U/s 68 of the Act. Primary burden lies onthe assessee has been discharged by filing therequisite evidences before the Assessing Officerand shifted on the Assessing Officer to disprovethe cash creditors’ transactions are not genuineor bogus. The share application money was received by the appellant and subsequentlyreturnedthough banking channel. In case of 7companies, the notices were served on it ongiven addresses. There is no evidence directly orindirectly with the Assessing Officer that theassessee had routed undisclosed money in theguise of share application money or loan. The ldDR’sargument have also not convinced us thatthese parties were in accommodation entries inform of loan and share application money aftercharging certain commission as such nosurvey/search has been carried out on thecreditors to prove that these companies arehabitual to provide loan/share application moneyeven there is no evidence with the ld DR formaking such allegation during the course ofwritten submissions. The case laws relied by theld AR are squarely applicable on the given factsand circumstances. The ld DR has also notcontroverted the finding given by the ld CIT(A).Accordingly, we uphold the order of the ldCIT(A).” 4. In view of the above, submissions made by the respondent isrequired to be accepted. The issue is answered in favour of theassessee and against the department. 5. The appeal stands dismissed. (VIJAY KUMAR VYAS),J. (K.S.JHAVERI),J. B.M.G/Gourav/33