Case Law Details
Shalibhadra Exports Pvt Ltd Vs DCIT (ITAT Mumbai)
ITAT Mumbai held that addition under section 68 of the Income Tax Act towards unexplained cash credit sustained as identity and creditworthiness of the parties and genuineness of the transaction not proved.
Facts- The assessee has challenged the order of the ld. CIT(A) on various grounds, pertaining to reopening u/s. 147 of the Act beyond the period of four years and has also challenged the addition of Rs.96,08,47,680/- on account of unexplained cash credit u/s. 68 of the Act by ignoring the fact that there are multiple transaction and without rejecting the books of accounts of the assessee u/s. 145(3) of the Act along with the other legal grounds.
Conclusion- Held that the reassessment proceeding u/s. 147 of the Act is sustainable for the reason that the A.O. had tangible material and information that was not part of the original assessment proceeding.
Held that the assessee has failed to discharge its primary onus casted upon by the statute to prove the identity and the creditworthiness of the parties and the genuineness of the transaction. Section 68 of the Act requires prima facie the assessee to establish the above three criteria’s before the A.O. nevertheless to mention that the same has to be to the satisfaction of the A.O. The assessee has failed to discharge its primary onus neither before the lower authorities nor before us. Hence, in the absence of any contradictory evidences, we find no infirmity in the order of the ld. CIT(A), therefore, we dismiss all the grounds of appeal raised by the assessee.
FULL TEXT OF THE ORDER OF ITAT MUMBAI
As there was no representation on behalf of the assessee inspite of several opportunities, we hereby proceed to here this appeal ex parte by hearing the learned Departmental Representative (ld. DR for short) for the RevThis appeal has been filed by the assessee, challenging the order of the learned Commissioner of Income Tax (Appeals) -49, Mumbai (‘ld.CIT(A) for short) passed u/s.250 of the Income Tax Act, 1961 (‘the Act’), pertaining to the Assessment Year (‘A.Y.’ for short) 2013-14.
2. As there was no representation on behalf of the assessee inspite of several opportunities, we hereby proceed to here this appeal ex parte by hearing the learned Departmental Representative (ld. DR for short) for the Revenue and on perusal of the on perusal of the materials available on record.
3. The assessee has challenged the order of the ld. CIT(A) on various grounds, pertaining to reopening u/s. 147 of the Act beyond the period of four years and has also challenged the addition of Rs.96,08,47,680/- on account of unexplained cash credit u/s. 68 of the Act by ignoring the fact that there are multiple transaction and without rejecting the books of accounts of the assessee u/s. 145(3) of the Act along with the other legal grounds.
4. The brief facts of the case are that the assessee company was engaged in the bupugned year dated 30.09.2013, declaring total income of Rs.23,35,180/-. The assessee’s case was selected for scrutiny and the assessment order dated 18.03.2016 was siness of trading in gold bar and jewellery and had filed its return of income for the impassed u/s.143(3) of the Act where the A.O. has accepted the returned income of the Subsequently, the assessee’s case was reopened based on the information from the investigation wing that large value of funds was noticed to have been credited in the assessee’s bank account by transfer and RTGS and debited by cash, transfers and RTGS which according to the information was unexplained transfer of funds and usage of accounts for parking of funds. The A.O. passed the assessment order u/s. 143(3) r.w.s. 147 of the Act dated 21.12.2019 where the total income was determined at Rs.96,3 1,82,861/- by making an addition of Rs.96,08,47,680/- as ‘unexplained cash credit’ u/s. 68 of the Act in the account of the assessee. The A.O. made the impugned addition on the ground that the assessee had failed to explain the nature and source of the impugned amount credited in the assessee’s bank account.
5. The assessee was in appeal before the ld. CIT(A), challenging the reassessment proceeding and the addition made by the A.O.
6. The ld. CIT(A) dismissed the appeal filed by the assessee and confirmed the impugned addition on the ground that the assessee has failed to prove the credit worthiness of the source and the genuineness of the impugned transaction.
7. Aggrieved by the said order, the assessee is in appeal before us.
8. The ld. DR for the Revenue contended that the assessee has been non compliant before the lower authorities and as well as before us inspite of several opportunities given to the assessee. The ld. DR further stated that the assessee has not furnished any documentary evidence to establish the creditworthiness of the source from where the impugned amount was credited in the assessee’s accounts and that the assessee has also failed to substantiate the genuineness of the impugned transaction. The ld. DR stated that the A.O. has rightly made the reassessment proceeding based on the tangible materials and that it was not a case of change of opinion. The ld. DR relied on the order of the lower authorities.
9. We have heard the ld. DR and perused the materials available on record. It is observed that the A.O. has found huge value of funds credited in the books of accounts of the assessee by way of transfer and RTGS and has also found debited by cash, transfer and RTGS during the impugned year. The A.O. verified the assessee’s income profile during previous and subsequent years along with the impugned year and found that there was discrepancy in the income offered to tax by the assessee and the amount credited in the bank account of the assessee and proceeded to reassess the assessee’ s income which according to the A.O. was income chargeable to tax in the hands of the assessee which has escaped assessment. The ld. CIT(A) also upheld the reassessment proceeding u/s. 147 of the Act for the reason that the A.O. had tangible material and information that was not part of the original assessment proceeding. In the absence of any contrary evidence, we are of the considered view that there is no infirmity in the order of the ld. CIT(A) in upholding the reassessment proceeding. Hence, ground nos. 1, 2 & 3 raised by the assessee challenging the reopening is dismissed.
10. Ground no. 4 pertains to the impugned addition of Rs.96,08,47,480/- made u/s. 68 of the Act on unexplained cash credit. The A.O. observed that the impugned amount has been credited in the ICICI Bank, Kalbadevi, Mumbai pertaining to the assessee during the period of 03.04.2012 to 30.03.2013. It is also observed that the assessee company along with various other concerns are controlled by one Mr. Manoj Punamiya and that these concerns were only involved in rooting funds, pertaining to Madhukoda Groups. The assessee is said to have failed to prove the genuineness of the transaction and creditworthiness of the parties before the A.O. and, hence, the A.O. made the impugned addition. Though the assessee has filed few sample bills during the original assessment proceeding, it was found that these were mostly issued by the group concerns which does not fully substantiate the transaction but relates only to gold bullion purchase and gold bullion sales. It is also observed that the assessee has not filed any documentary evidence beyond these neither before the A.O. nor before the first appellate authority. The A.O. after perusing the financials, bank statements and physical verification of the assessee concern, concluded that the assessee was not carrying on any genuine business and was only for routing of funds by Mr. Manoj Punamia along with the other various group concerns. The ld. CIT(A) confirmed the impugned addition made by the A.O. for the reason that even before the first appellate authority, the assessee has failed to prove the creditworthiness and genuineness of the transaction. It is pertinent to point out that the assessee has failed to discharge its primary onus casted upon by the statute to prove the identity and the creditworthiness of the parties and the genuineness of the transaction. Section 68 of the Act requires prima facie the assessee to establish the above three criteria’s before the A.O. nevertheless to mention that the same has to be to the satisfaction of the A.O. The assessee has failed to discharge its primary onus neither before the lower authorities nor before us. Hence, in the absence of any contradictory evidences, we find no infirmity in the order of the ld. CIT(A), therefore, we dismiss all the grounds of appeal raised by the assessee.
11. In the result, the appeal filed by the assessee is dismissed.
Order pronounced in the open court on 23.05.2023
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