TaxTMI 
TaxTMI 
2021 (3) TMI 426
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....iled with Income-Tax Appellate Tribunal, Allahabad ( hereinafter called " the tribunal" ) reads as under : "1.That in any view of the matter, the order passed under Section 143(3) dated 23.12.2017 is bad both on the facts and in law and his action as confirmed by the CIT(A) by passing an ex-parte decision without providing an opportunity to the assessee is highly unjustified within facts and circumstances of the case. 2. That in any view of the matter, both the lower authorities failed to provide an opportunity to the assessee before passing order and also failed to consider the fact, evidence, replies etc., hence the order of the lower authorities are liable to be cancelled. 3. That in any view of the matter, the assessee claimed the loss of Rs. 2,58,66,234.00 from trading activity of shares and in support of loss books of accounts were produced required explanations and details were furnished in compliance to their notices but the AO failed to consider the loss figure while computing the income. 4. That in any view of the matter, the lower authorities failed to set off the declared loss against the addition under section 68 made by the AO and c....
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....ness of Rs. 2,85,66,234 and in ITR, the assessee claimed Rs. 2,66,78,299/- as current year loss to be carried forward. 3.3 The AO during the course of assessment proceedings observed from the Balance Sheet and ledger accounts submitted by the assessee that the assessee has shown following sundry creditors:- S.No. Creditors Name from Balance Sheet Closing Balance(Rs.) as shown in Balance Sheet Fresh Credit in F.Y. 2014-15 noted from ledger 1. Anuj Sonkar 2,07,30,500 2,55,48,500 2. Chhatoo Prasad 22,00,000 22,00,000 3. Krishna Mohan 13,00,00013,00,000 4, Siddharth Agrawal 68,11,500 68,11,500 3.4The AO asked the assessee to discharge its initial burden of proof regarding identity and credit worthiness of the creditors and genuineness of transactions. The assessee submitted confirmations of Shri Chhatoo Prasad and Shri Krishna Mohan but did not submit confirmation of Shri Anuj Sonkar and Shri Siddharth Agrawal. The assessee did not submit copies of ITR of any of the aforesaid creditors. The assessee did not submitted bank statements or any other original records regarding financial transactions with the above ment....
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....additions to the income of the assessee was made by AO to that effect, while framing assessment u/s 143(3) of the 1961 Act. 3.7 The AO held that the two creditors namely Shri Anuj Sonkar and Mr. Siddharth Agarwal are bogus . The AO observed that Mr. Anuj Sonkar has himself denied to have any financial transactions with the assessee. So far as Mr. Siddharth Agarwal is concerned, the AO observed that the assessee has not filed any confirmation and ITR of Shri Siddharth Agarwal and the AO held that this creditor is bogus and the money is assessee's own money which is wrongly represented as trade payable. The AO made additions of sum of Rs. 3,22,68,500/- ( Shri Anuj Sonkar Rs. 2,55,48,500/- and Shri Siddharth Agarwal Rs. 67,20,000/- ) u/s 68 read with Section 115BBE of the 1961 Act, vide assessment order dated 23.12.2017 passed u/s 143(3) of the 1961 Act. 4. Aggrieved by assessment framed by the AO u/s 143(3) of the 1961 Act, the assessee filed first appeal with ld. CIT(A). The assessee did not appear before learned CIT(A) despite several notices for hearing issued by ld. CIT(A). It is recorded in the appellate order dated 19.12.2019 passed by ld. CIT(A) that as many as six notic....
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.... is a fact that the appellant did not explain the nature and source of these cash transactions either before AO or during appellate proceedings. AO examined Shri Anuj Sonkar on oath on the request of the appellant who appeared and stated onoath that he did not deposit any cash in appellant's bank account. He categorically denied the 'trade payables' as shown in his name in assessee's balance sheet.AO on 20-12-2017 gave a copy of the statement of Anuj Sonkar to appellant as an opportunity to give his explanation who did not request for any cross-examination. Appellant only submission is that these persons themselves deposited cash into his bank accounts. But appellant has failed to substantiate his claims. He failed to produce the confirmations of parties and parties themselves,rather Sh. Anuj Sonkar has categorically denied any financial transactions ever done with appellant. No confirmations and ITR of Sri Siddharth Agrawal are submitted before AO. It is also clear that there is no violation of Principle of Natural justice done by AO. In view of above facts AO correctly held these transactions as bogus as the nature and source of such cash deposits were not explain....
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....facts and circumstances of the case, the additions made to the income of the assessee to the tune of Rs. 3,22,68,500/- be upheld. 6. We have considered contentions of ld. CIT-DR, carefully perused the material on record, while none appeared on behalf of the assessee. Before proceeding further, it is important to reiterate the conduct of the assessee before all the authorities. The assessee did not file complete details before AO during the course of assessment proceedings. The assessee did not entered appearance before ld. CIT(A) despite several notices served on assessee. The assessee did not appear before the Bench when this appeal was called for hearing on 20.01.2021 and 24.02.2021. Infact the assessee refused to accept postal envelop containing notice of hearing. The assessee was called upon by Registry of tribunal to remove defect as appellate order of ld. CIT(A) was not certified, but the assessee did not comply with the said defect memo. The Revenue has rendered assistance to the tribunal by supplying certified copy of appellate order passed by ld. CIT(A). We have elaborated conduct of the assessee in detail before all the statutory authorities in preceding para's of t....
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....pose of the transactions with these two creditors. The assessee did not produce these parties for examination. The assessee instead of discharging its primary onus as is cast u/s 68 of the 1961 Act to prove identity and creditworthiness of the parties and genuineness of the transaction, instead asked the AO to summon these parties for examination. The AO issued summons u/s 131 of the 1961 Act to Mr. Anuj Sonkar who stated before the AO that he does not have any financial transactions with the assessee. Thus, Mr. Anuj Sonkar denied to have any financial transactions with the assessee during the financial year 2014-15 (ay: 2015-16). The assessee never asked for cross examination of Mr. Anuj Sonkar. The AO treated both these creditors namely Mr Anuj Sonkar and Mr. Siddharth Agarwal as bogus creditors and it was held that the amount of cash deposits in assssesee' bank account is infact assessee's own money which is to be brought to tax. The additions to the income to the tune of Rs. 3,22,68,500/- towards alleged cash deposits in assessee's ICICI Bank account were made by AO u/s 68 read with Section 115BBE of the 1961 Act. The assessee did not appear before ld. CIT(A) and the appeal fil....
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....arth Agarwal . The said amount is credited by assessee in its books of accounts in the ledger account of these two creditors. Mr. Anuj Sonkar has in statement recorded before AO has denied to have any financial transactions with the assessee during the year under consideration. The assessee has not filed copies of income tax returns/statement of affair/Balance Sheets of these two creditors nor the assessee has filed confirmations from these parties. The identity of Mr. Anuj Sonkar is proved as he appeared before AO and furnished his Aadhar Card, but he categorically denied to have any financial transactions with the assessee during the year under consideration. The assessee did not asked for cross examination of Mr. Anuj Sonkar, The assessee could not prove identity of Mr. Siddharth Agarwal nor creditworthiness could be proved as neither copy of income tax return nor copies of Balance Sheet/Statement of affair was filed by assessee. The assessee also could not prove the purpose of granting these alleged cash amounts and even terms and conditions of these alleged credit entries were not brought on record by assessee, thus genuineness of these transactions could not be proved. Thus, ....
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....parent must be considered real until it is shown that there are reasons to believe that the apparent is not the real party who relies on a recital in a deed has to establish the truth of those recitals, other wise it will be very easy to make self-serving statements in documents either executed or taken by a party and rely on those recitals. If all that an assessee who wants to evade tax is to have some recitals made in a document either executed by him or executed in his favour then the door will be left wide open to evade tax. A little probing was sufficient in the present case to show that the apparent was not the real. The taxing authorities were not required to put on blinkers while looking at the documents produced before them. They were entitled to look into the surrounding circumstances to find out the reality of the recitals made in those documents. 9. Now, coming to the question of onus, the law does not prescribe any quantitative test to find out whether the onus in a particular case has been discharged or not. It all depends on the facts and circumstances of each, case. In some cases, the onus may be heavy whereas, in others, it may be nominal. There is nothing....
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....section 68, section 69, section 69A, section 69B, section 69C or section 69D, at the rate of thirty per cent; and (b) the amount of income-tax with which the assessee would have been chargeable had his total income been reduced by the amount of income referred to in clause (a). (2) Notwithstanding anything contained in this Act, no deduction in respect of any expenditure or allowance shall be allowed to the assessee under any provision of this Act in computing his income referred to in clause (a) of sub-section (1).]" 6.9 We have observed that the assessee has also challenged vide ground number 3 before ld. CIT(A) as to allowability of set off of loss of current year against income assessed to tax by AO by invoking provisions of Section 68 of the 1961 Act, as the AO had denied the set off of current year loss owing to provision of Section 115BBE of the 1961 Act. The ground number 3 raised by assessee before ld. CIT(A) is reproduced hereunder: "The loss on the basis of closed books of accounts should have been allowed. 3. That, in view of the matter, the loss as claimed by the assessee on the basis of closed books of accounts is considered true....