TaxTMI 
TaxTMI 
2023 (7) TMI 1258
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....n this mistake pointed out, noting that while 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 additio....
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....k and forth several times - moving from the Assessing Officer who framed the assessment initially, making addition under Section 68 of the Act of Rs. 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 30.03.200....
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....d CIT(A) that the assessee has come up in appeal before us. 6. The grievance of the learned Counsel for the assessee in the Miscellaneous Application was that its submissions and 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 ....
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.... 12 on page no 5 of its order. 3.4 In view of the above it is humbly submitted that the actions of the Ld. A.O. to make addition in respect of cash credits pertaining to above 3 persons are against the judicial guidelines mention above 'in at needs deletion. The Hon. High Court has specifically provide 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....
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....ase of assesses and second time in the case of respective case creditor in the respective cases matter may kindly be restored to The Ld. A.O. to a certain the position and to delete the same from the income of the assessees." Encl : As above Sd/- (DR Adhia, AR)" 7. Taking note of the above, it is relevant to consider the facts of the case and the basis 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 t....
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....heet. Further, a notice u/s 142(1) was issued on 26.09.2011 and served upon the assessee, in which the assessee was asked to produce following depositors from whom it has received deposits: 1. Shri H.K. Kesaria (HUF) 2. Shri Bharat P. Shingal 3. Shri Maganlal H. Padalia The assessee has failed to respond to this notice. By another notice u/s. 142(1) dated 14.10.2011, the assessee was once again 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 mentio....
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....s for doing so have been given. There is no option left for me but to decide the matter on merits and on the basis of details filed during the course of original assessment. Some information's had also been called for from bank for establishing interconnection and inter-linking of the deposits at time of assessment u/s 143(3) r.w.s. 250 & 144 of I.T. Act. The genuineness of each depositor is discussed as under:- 1) Shri Hasmukhlal Keshavlal (HUF). This person has given deposit of Rs. 8,93,148/-. 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....
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....of a/c. opening forms, it was noticed that all these accounts have been opened during the period of December, 1996 to January, 1997. It was also noticed that these accounts have either been introduced by Shri Priyesh Kesaria, who is one of the director of the assessee company or by Merunben Osmanbhai Thayam holding a/c. No. 150 with the Bank. It is further seen that most of the persons are residing in the small villages of Gondal Taluka. The people from different villages have came to Rajkot to open their a/c. with the bank and for the sole purpose of advancing the amount to Shri Kesaria, who also happens to be the director in the Company. Thus, it is quite clear 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 h....
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....all farmers who can't have such large funds. Further, the assessee has failed to discharge onus by not producing any of the farmer before the A.O. at the time of the original assessment. During the course of assessment a copy of bank a/c. of the depositor was called for from Jivan Comm. Bank, Main Branch, Rajkot. On verification of the same it is seen that following huge cash has been deposited in his bank a/c. and the same has been given to the assessee Company. The following chart will reveal that the amount so deposited has been given to the assessee Company. Sr. No. Date of deposit in the A/c. of Maganbhai Padalia Amount (Rs.) Dt of giving loan the assessee To Amount (Rs.) 01. 02.09.1996 7, 00, 000/- 02.09.1996 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 l....
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....ven to the assessee company. The following chart will reveal that the amount so deposited has been given to the assessee Co., Sr. No. Date of deposit in the A/c. of Bharat Shingala Amount (Rs.) .. Dt of giving loan the assessee To Amount (Rs.) 01. 29.08.1996 1, 00, 000/- 29.08.1996 1, 00, 000/- 02. 02.09.1996 8, 00, 000/- 02.09.1996 8,050, 000/- 03. 16.09.1996 1,00,000/- 16.09.1996 1,00, 000/- 04. 07.11.1996 1,00,000/- 07.11.1996 1,00, 000/- This chart shows that the depositors have deposited cash and on very same day the said deposits has been transferred to the a/c. of the assessee company. The depositor has taken cash loans from farmers in cash and the same has been deposited into his bank a/c. Shri Shingala is one of the director of the assessee company. The fact that cash deposits has 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....