TaxTMI 
TaxTMI 
TaxTMI 
2017 (5) TMI 470
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....appeals. The assessee has challenged the following additions which were made by the AO with the aid of section 68 of the Act in the respective assessment years: Asstt.Year Amount (Rs.) 2007-08 30,00,000/- 2008-09 73,87,331/- 2009-10 3,14,02,908/- 2005-06 10,00,000/- 2010-11 2,39,50,000/- 3. The ld.representatives have advanced their arguments mainly in the Asstt.Year 2008-09. The ld.CIT(A) has also passed a detailed order in the Asstt.Year 2008-09 and this order has been followed in all other years on merit. Therefore for the facility of reference, we will be taking facts mainly from the Asstt.Year 2008-09. 4. Before taking up the issue - challenging addition made with the aid of section 68 of the Act, we would like to take issue of reopening in the Asstt.Year 2007-08 first. Brief facts of the case are that the assessee was running proprietorship concern in the name and style of "M/s.Parshawa Trading Co.". She has filed her return of income for the Asstt.Year 007-08 on 29.10.2007 declaring total income at Rs. 7,11,187/-. The case of the assessee was selected for scrutiny assessment and after hearing the assessee an assessment order was passed under secti....
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....r loan amount is appearing in the books of M/s Parshawa Trading Co in the name of his proprietary concern is nothing but cash given to him by M/s Parshwa Trading Co. which he deposited in his account and gave back the same to M/s Parshwa Trading Co. He further stated that he is ready to be cross examined by M/s Parshawa Trading Co. over the alleged loan transaction. In other words Shri Patel denied giving any loan to the assessee. He has accepted this fact even in his statement before the Director General of Central Excise Investigation (DGCEI) and the Income Tax Investigation wing. Relevant extract from the statement, on oath of Shri Patei taken by this office on 13.12.2010, is reproduced as under for the sake of clarity. Q.2. What is your business? A. We accept cash or cheque and issue pay order or DD or RTGS after taking commission. I also issue cash after discounting cheque. Q.4. Do you know Parshwa Trading Co. ? A. Yes, I know Parshwa Trading Co. Q.5. Have you ever given loan to Parshwa Trading Co. A. No, I have never given loan to Parshwa Trading Co. Q.7. In which year and for how much amount you have given entry to Parshwa Trading Co. ? A. I say it ag....
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....e was engaged in providing accommodation entry. Thus, this was the new information before the AO who helped him to harbor a belief that income has escaped assessment. Assessment has been reopened within four years from the end of the relevant assessment year. Therefore, proviso appended to section 147 cannot be invoked by the assessee. We are satisfied that information was possessed by the AO which has nexus with forming of an opinion that income has escaped assessment. He has rightly reopened the assessment, and we do not find any merit in this ground of appeal. 7. Now we take remaining grounds of appeal in all other years. 8. As observed earlier, detailed order was passed by the ld.CIT(A) in the Asstt.Year 2008-09 and it was followed in all other years. We take up the facts mainly from this assessment year. 9. Brief facts of the case are that the assessee has filed her return of income on 19.9.2008 declaring total income at Rs. 40,68,811/-. The case of the assessee was selected for scrutiny assessment and notice under section 143(2) was issued on 31.8.2009 which was duly served upon the assessee on 6.9.2009. On scrutiny of the accounts, it revealed to the AO that in form no.3C....
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....ue pay order or DD or RTGS after taking commission. I also issue cash after discounting cheque. Q.4. Do you know Parshwa Trading Co. ? A. Yes, I know Parshwa Trading Co. Q.5. Have you ever given loan to Parshwa Trading Co. A. No, I have never given loan to Parshwa Trading Co. Q.7. In which year and for how much amount you have given entry to Parshwa Trading Co. ? A. I say it again that I have not given any loan to Parshwa Trading Co., but I have given entry only after taking cash or cheque after charging commission. Q. 8. As you say that you issue cheque, DD or pay order after receiving cheque or cash, then, how much commission you charge for that? A. I charge Rs. 25/- to Rs. 50/-commission for per entry of one lakh. Q. 9. Are you ready for cross examination with Parshwa Trading Co. ? A. Yes, I am ready for cross examination and I will come whenever you call. 4. The above makes it crystal clear that the loan of Rs. 73,87,331/- as shown by the assessee not a genuine transaction but a dubious method adopted by the assessee to introduce his own undisclosed / untaxed money through back door. Accordingly, show cause notice dated 10.12.10 was issued to the....
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....General of Central Excise Investigation ( DGCEI) and the Income Tax Investigation wing. Hence, the amount of Rs. 73,87,331/- is added back to the total income of the assessee as unexplained cash credit u/s 68 of the Income Tax Act, 1961." 10. Under similar circumstances, additions have been made in other years also. The AO in the Asstt.Years 2009-10 and 2010-11 reproduced ledger accounts of the "DE" in the books of the assessee, whereas in the Asstt.Year 2005-06 and 2007-08 he proceeded to make additions on the basis of the discussion made in the Asstt.Yar 2008-09. His findings are in the line of Asstt.Year 2008-09. 11. Dissatisfied with the additions, the assessee carried the matter in appeal before the ld.CIT(A). She contended that the AO has used the statement of Dipin G. Patel recorded on 13.12.2010 without providing opportunity of cross-examination. It was contended that neither copy of the statement was supplied nor copy of any bank statement or any other material collected from Dipin G. Patel was supplied to the assessee. According to the assessee this statement deserves to be excluded from consideration. The ld.CIT(A) verified the contention of the assessee and found it ....
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.... Shri Dipin G. Patel, and thereafter issues cheques to the assessee and other concerns. When Shri Dipin G. Patel caught by the investigation agencies, then it was most suitable for him to give this type of statement, because otherwise, he has to explain the source of advancing loans to the assessee as well as other concerns. With the help of this modus operandi, he has being assessed to tax at the rate of Rs. 100/- per lakh. He has been assessed for commission income earned by virtue of profit on alleged accommodation entries. 13. In the Asstt.Year 2010-11 the assessee has written a letter dated 23.2.2013 to the AO and explained the bank statement supplied by the AO to the assessee. We deem it appropriate to take note of relevant part of this letter, which is available on page no.1 of the paper book for the Asstt.Year 2010-11. It reads as under: " Instead of supplying all the required details you were kind enough to give us copy of two statements of bank of Deepak Enterprise. Though M/s. Deepak Enterprise has accounts in so many (all most near to 10 banks) on our continue perusals you gave us copy of two bank statement is not clearly legible. (1) The first statement is from Yes B....
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.... 7875000/-. Since the date is absolutely not legible from the statement we are finding it difficult to have any comments about the day to day movements. However from the statement it appears that he has done transaction with, many parties which even include sizable transaction with post master. How in hawala business it is possible? Does it mean that post master give cash against cheque. Does also all other parties as appearing, in the statements are confirming that they are doing hawala business with Deepak Enterprise." 14. We have duly considered rival contentions and gone through the record carefully. According to the assessee she has taken loan through account payee cheque from "DE" and duly shown them in the books of accounts. Section 68 of the Income Tax Act contemplates that where any sum is found credited in the books of an assessee maintained for any previous year, and the assessee offers no explanation about the nature and source thereof, or the explanation offered by the assessee is not, in the opinion of the AO satisfactory, then the sum so credited in the accounts may be treated as income of the assessee of that previous year. There is no dispute with regard to the f....
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....ng wet umbrellas and wearing wet clothes and raincoats. That testimony constitutes direct evidence of what the witness observed, and because an inference that it was raining in the area would flow naturally, reasonably, and logically from that direct evidence, the witness's testimony would constitute circumstantial evidence. The circumstantial evidence is an evidence that relies on an inference. The law draws no distinction between circumstantial evidence and direct evidence in terms of weight or information. Either type of evidence may be enough to establish the fact beyond a reasonable doubt. 15. In the present appeal, the question before us is to find out who is deposing the truth i.e. Shri Dipin G. Patel or the assessee. According to the ld.counsel for the assessee, Shri Dipin G. Patel did not give confirmation and to support version of the assessee in order to save his skin for explaining the source of fund given to the assessee. 16. On the other hand, the ld.DR pointed out that the assessee should have given direct evidence in support of her version. She cannot blame Revenue for her failure for fulfilling ingredients contemplated under section 68 of the Income Tax Act. ....
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....xactly. Q.No.3. The cash transactions in the bank were done by you or your persons. If that work was done by your persons then give their names ? Ans: The question is not relating to the transactions. Q.No.4 You are doing the huge transactions for which are you maintaining any record or diary ? Ans: It was in the CPU but the same was seized by the department. Q.No.5. When you accepted the cash, did you issued any receipts and when you hand over the cash then any acknowledgement is obtained from the party? Ans: The question is not relating to the transactions Q.No.6. As per you against the cash receipts you have given the cheque entries and against the cheques you had given the cash, please tell when those transactions were made ? Ans: Not fit to be answered. Q.No.7. As per you, you are doing the transactions on commission, Please tell whether the commission is deducted when the cash is paid or it is charged separately ? Ans: Commission was taken Q.No. 8. We have made the financial transactions for so many years through cheques did you record them in your books of accounts.? : Yes. Q.No.9. Are you prepared to present all the records, diaries, vouchers and any o....
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....ch money but you have lent the money to P.R. Patel & Co. how did you accept that lending and what was the source of that money. Give the proof of source of that money. Ans. This transactions is not related to us. Q.No.20. As you said that you did not have any financial transactions but what you say about the affidavit about the police complaint made by Shri Bhavin Pradyuman Patel and Alpesh Steel. Ans: I do not know. Q.No.21. As you said that you have not made any investments but what you say about the list attached herewith ?. Ans: Not known Q.No.22 You have made the financial transactions legally or illegally. But you have planned . in such a way that if you are caught for the benami fund transactions then you would shirked from the responsibility by involving the other party with malafide intentions. If you have any proof in this regard, produce the same. Ans: This is not related to business." 18. A perusal of the reply to the question would indicate that on all vital points deponent either gave vague replies or did not reply. Providing of an opportunity to cross the witness is not a mere formality. It is an exercise to elicit favourable facts from witness or to ....