TaxTMI 
TaxTMI 
2023 (7) TMI 1258
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.... the assessee had filed written submission and case-laws running into three pages, the ITAT, while adjudicating the issue, had recorded that the learned AR had filed one page written submission which they noted was contrary to the facts on records. On this basis, the ITAT held that the order passed was without considering all the arguments of the learned AR and, therefore, recalled the appeal for adjudication afresh vide order in Miscellaneous Application No. 07/Rjt/2021 dated 21.09.2022. In consequence to the same, the present appeal came up for hearing before us. 3. The grounds raised by the assessee are as under:- "1. The Ld. CIT(A) has erred in law and facts in confirming order passed U/s. 144 which is totally bad on facts as also in law. The same deserves to be quashed. 2. The Ld. CIT(A) has erred in law and facts in confirming order passed U/s. 144 determining income of Rs. 51,95,100/- as against return income of Rs. 2,860/- which is totally bad on facts as also in law. The same deserves to be quashed. 3.1. The Ld. CIT(A) has erred in law and facts in confirming addition of Rs. 49,30,000/-. The addition needs deletion. 3.2. The Ld. CIT(A) has erred in law and facts i....
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....s. 29,25,103/-, to the CIT(A) who restored the issue back to the Assessing Officer for examining afresh; when the Assessing Officer on re-examination of the issue enhanced the addition to Rs. 49,30,000/- which matter again travelled to the learned CIT(A) who dismissed the assessee's appeal who in turn carried the matter to the ITAT who restored the matter back to the Assessing Officer to reconsider the issue. The Assessing Officer, on reconsideration, reconfirmed the additions made of Rs. 49,30,000/- in the absence of any information submitted by the assessee passing the order under Section 144 of the Act. The entire sequence of events as noted above are reproduced in the assessment order at paragraph Nos. 1 to 4 as under:- "A return of income declaring total income of Rs. 2,854/- was filed on 30.11.1997. The said return of income was processed u/s 143(1)(a) of the Income-tax Act on 09.03.1998 without any modification. Subsequently, the return was selected for scrutiny, an order u/s 143(3) of the I.T. Act was passed on 30.03.2000 determining the total income at Rs. 31,90,204/- after making addition of Rs. 29,25,103/- u/s 68 of the I.T. Act on account of unexplained cash credit & ....
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....nd case-laws had not been considered by the ITAT while passing the order in its case. The ITAT, as noted above in the Miscellaneous Application, had noted that three pages submissions were filed by the learned Counsel for the assessee while only one page submissions were noted to be considered by it for passing the order. During the course of hearing before us on restoration of the appeal, no fresh submissions were filed by or on behalf of the assessee. The three page submissions noted by the ITAT, as available in the records, are therefore being relied upon to adjudicate the issue and the same are reproduced hereunder:- "Written Submissions- The appeal may kindly be decided on the bases of written submission furnished below: Kind attention is invited for the hearing fixed of the above matter on 27-1-2021. 2. At the time of hearing of appeal fixed on 21/11/2019 the following written submission has been furnished on 20/11/2019. The same is reproduce below. As mention there in the entire amount of addition has been tax in the end of all the three person in whose name the same is standing. It is there for humbly prayed that accepting the decision of Hon. Rajasthan High Court in ....
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....vide guidelines that actions to be taken, the same can be taken in the hands of concern person and not in the case of assessee 3.5 It is therefore requested that addition made in the case of assessee may kindly be deleted in view of above judicial decisions. 4. Without prejudice it may be submitted that in respect of all the above 3 persons additions has been made individually making addition in the hands of each of the persons for the above amount as under, I. Rs. 11,05,000 in the case of Shri Bharat P Shingala has been added vide assessment order dated 22-3-2002 (copy enclose) as mentioned at page 2 para 4 of the assessment order on protective basis. It appears that the same amount has been retained and not deleted in the case of Bharat P Shingala and therefore making any addition in the case of assessee amounts to double taxation or taxing the amount twice in the hands of assessee. Which is not permissible under the provisions of Act. It is therefore requested that addition may kindly be deleted in the case of assessee having been tax on hands of Shri Bharat P Shingala. In either case the matter may kindly be restore to the Ld. A.O. to ascertain the position of assessing t....
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....asis with the Assessing Officer for reconfirming the addition under Section 68 of the Act. 8. As is evident from the order of the Assessing Officer, the assessee is in the business of finance and during the impugned year it had obtained cash credits from the following three parties:- i) Shri H.K. Kesaria (HUF) ii) Shri Bharat P. Shingal iii) Shri Maganlal H. Padalia Except for filing confirmation of these parties, nothing else was filed by the assessee to prove the genuineness of the cash credit in the first round of assessment. The Assessing Officer, however, noted that all the three cash depositors were not creditworthy, because there were huge cash deposited in their bank accounts immediately before the cheques were issued to the assessee-company; that the depositors had opened their bank accounts with a meager amount of Rs. 500/- and their closing balance was also Rs. 520/-; that the depositors did not furnish their bank account details and it was noted that the source of deposits of the depositors was loan from farmers which the depositors were unable to verify. Accordingly, these depositors were treated by the Assessing Officer in the first found of assessment as unex....
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....requested to attend along with books of account and above depositors to this office on 19.10.2011. Ultimately, Shri Harish Ranpara from M/s J.C. Ranpura & Co, C. As, duly Authorised Representative of the assessee vide his letter dated 24.10.2011 requested for adjournment. Again a detailed show cause notice was issued on 09.11.2011 and served upon the assessee. In response to show cause, the A.R. Of the assessee attended on 16.11.201 l and requested for adjournment. At his request, the case was finally adjourned on 09.12.2011. However, neither the assessee nor his Authorised Representative attended on 09.12.2011. No written submission has been received so far. No books of accounts have been produced till date. Since, the assessee failed to respond as mentioned above, it is presumed that the assessee is not interested to comply with the requirements of notices and directions of the Hon'ble ITAT. Under these circumstances, I proceed to finalise the assessment as per provisions of Section 144 of the I.T. Act on the best judgment and on the basis of material available with Department and inquiries conducted in this regard to establish interconnection between the deposits made by the....
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....48/-. As per the balance sheet of this person he has obtained loans of Rs. 50,000 to Rs. 1 lac from various farmers @ of 13%. During the course of original assessment he was asked to produce some farmers for verification of their credit worthiness and genuineness of transaction. However, Shri Kesaria did not produce them for verification of the A.O. This shows that the deposits received by this person is not genuine, likewise the deposits made by him before the assessee company also becomes ingenuine. While finalising the original asstt. the A.O. has made addition only of Rs. 8,93,148/- which is the closing balance in the case of the depositor, actually an amount of Rs. 8,50,000/- is deposited on 08.02.97 and Rs. 2,75,000/- is deposited on 10.02.1997 therefore, an addition of Rs. 11,25,000/- has made in respect of unexplained cash credits instead of Rs. 8,93,148/-. The assessee has obtained deposit of Rs. 50,000/- to Rs. 1 lac from 38 persons who are small farmers having a small land around 1 to 3 acres. All these farmers who have deposited money with Shri H. K. Kesaria are having their bank account with Veraval Mercantile Co-op. Bank, Rajkot though their residential addresses ar....
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....lear that Shri H. K. Kesaria has arranged these funds of the Company in such a way so that it seems genuine. He has managed to get these accounts opened in the bank in the names of different farmers and then has plowed this money into the Company. It was also seen that the accounts of these persons have been opened by depositing Rs. 500. Thereafter, cash deposits has been made by these farmers on various dates. The money deposited by these farmers have gone to the a/c. of Shri H. K. Kesaria immediately and thereafter the same has been deposited by Shri Kesaria with the Company. Following instances and chart given proves that there is inter- link between the transactions with the farmers and with the Company. Sr. No. Name of the farmer Amt. Deposited in the Bank Date This Amt. given to Shri Kesaria on Date This Amt. given to Co. on date 01. Rafiq Jusab 120000 30.01.97 31.01.97 08.02.97 02. Vasur Laxmanbhai 110000 30.01.97 31.01.97 08.02.97 03. Vallabh Lalji Raiyani 100000 01.02.97 03.02.98 08.02.97 04. Shamji Nanji 125000 31.01.97 01.02.97 08.02.97 05. Shamji Nathabhai 105000 31.01.97 01.02.97 08.02.97 This proves bey....
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.... 7, 00, 000/- 02. 02.09.1996 7, 50, 000/- 02.09.1996 7, 50, 000/- 03. 20.09.1996 1,00,000/- 20.09.1996 1,00, 000/- 04. 20.09.1996 2,50,000/- 20.09.1996 2,50, 000/- 05. 21.09.1996 2,50,000/- 21.09.1996 2,50, 000/- This chart shows that the depositor has deposited cash and on very same day the same has been transferred to the a/c. of the Company. The depositor has taken cash loans from following persons as under: Sr. No. Name of the farmer Amount in cash Date 01. Nagabhai Laxmanbhai Der 1,15,000/- 01.09.1996 02. Dilip Gandubhai Padalia 80,000/- 01.09.1996 03. Hamir Jiva Chandpara 1,00,000/- 01.09.1996 04. Jagdish Gokal 1,00,000/- 01.09.1996 05. Jentibhai M. Ghonia 30,000/- 01.09.1996 06. Mansukh Bachubhai Jasani 1.10.000/- 01.09.1996 On verification of this chart it can be seen that Shri Padalia has obtained cash worth Rs. 5,35,000/- from the farmers as on 01.09.1996. However, he has deposited Rs. 14,50,000/- by cash into his bank a/cs. As on this date he was not having enough cash balance to deposit an amount of Rs. 14,50,000/- in the bank a/c. Further, on verification of pay-in-slip called for fr....
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....s routed through his a/c. proves beyond doubt that the depositor has introduced the funds through his bank a/cs. He has also failed to produce farmers for verification purpose. Therefore, the cash credits in the name of Shri Bharat Shingala is also treated as unexplained u/s 68 of the I.T. Act. 8. To sum-up, it is further seen that out of the aforesaid depositors most of the deposits from farmers are common between all the 3 depositors. All the farmers are having small piece of land which cannot be considered for credit worthiness for such huge amount. The depositors do not remember even their bank a/c number and the pass book is said to have been with Shri Priyesh Kesaria. It is the duty of assessee to prove genuineness and credit worthiness of the depositors. The assessee has failed to discharge onus laid on him. In view of the above discussion the cash credits in the name of all the 3 depositors are treated as unexplained u/s 68 of the I.T. Act. Penalty proceedings u/s 271(1)(c) are also initiated for furnishing inaccurate particulars and concealment of income." 9. Noting the above findings of the Assessing Officer and also the fact that before the learned CIT(A) no content....