9911796707
TMI Blog2015 (2) TMI 1335X X X X Extracts X X X X X X X X Extracts X X X X ..... ich will encompass all the years under appeal are that the assessee arrack contractor had filed his return for assessment year 1997-98 declaring income of Rs. 95,400/- on 27-06-1997. There was a survey u/s 133A of the IT Act, 1961 (in short 'The Act') in the premises of the assessee on 29-12-1998. Pursuant to the survey, it seems the assessment proceedings were re-opened by issue of notices u/s 148 of the Act. In the return filed pursuant to such notice also assessee declared the same income as declared in the original return. In the balance sheet filed by the assessee along with the return he had shown certain loans which inter-alia included the following amounts; i) Shri D.I.Kamalakar Rs. 4,50,000/- ii) Shri K.I.Raghavendra Rs. 4,75,000/- iii) ShriVyjanath R Patil Rs. 1,00,000/- iv) Shri Naganna Swadi Rs. 50,000/- 6. During the course of the assessment proceeding assessee filed confirmations from the above creditors. AO rejected the confirmations on the ground that these were incomplete. As per the AO assessee had investments in a hotel in Gandhinagar, in Ram films and Rambabu films and the loans were shown in order to justify the investments. He disbelieved the loans an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aganna Swadi had also appeared before the AO and filed a copy of RTC. 13. Per contra and in support of its appeal learned DR submitted that assessee did not place any of the record relied on by him, before the AO during the course of assessment proceedings. According to him, learned CIT(A) had accepted the claim of loans from Shri D.I.Kamalakar and K.I.Raghavendra, without giving an opportunity to the AO to examine the evidence submitted by the assessee. According to him, filing a mere confirmation would not wriggle out the assessee from its onus to show the credit worthiness of the creditors. Assessee having failed to do so, as per the learned DR, CIT(A) erred in deleting the addition in respect of the alleged loans from Shri D.I.Kamalakar and K.I.Raghavendra and was justified in confirming the addition for the alleged loans from Shri Vyjananth R Patil and Shri Naganna Swadi. 14. We have perused the orders and heard the rival contentions. What we find is that learned CIT(A) had during the course of appeal proceedings before him sought a remand report from the AO. A remand report dated 06-03-2012 was given by the AO. In the said remand report it is stated by the AO that the VDIS ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arrack business. During the relevant assessment year, it had participated for excise bidding for Ron Taluk, among others. A sum of Rs. 10,00,955/- was deposited by the assessee since he was successful bidder in the excise bidding. During the course of assessment proceedings assessee was required to explain the source of the deposit. Assessee's stated that a sum of Rs. 5.00 lakhs was given to him by one Shri Dashrath and also filed a confirmation letter dated 15-01-1999 from the said Shri Dashrath. Assessee also furnished a letter from one M/s Amar Trading Co. in which the said concern stated that a sum of Rs. 2.5 lakhs was provided by them to the assessee by way of DD. However, the AO did not accept the former confirmation for want of address and latter one for a reason that the distinctive number of the DD mentioned by the party did not tally with the details provided by the Excise Department. He made an addition of Rs. 10,00,955/- as income. 21. AO also noted that assessee had in addition to his successful bidding for Ron Taluk, participated in the bidding process for other Taluks as well. For this purpose he had submitted DD worth Rs. 14.00 Lakhs to the excise authorities as e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... him. According to learned CIT(A) Shri Prakash Kattimani, could not give his PAN nor his assessment details. However, in so far as loans from Shri Basanth Kumar Patil, Smt D.Pushpalatha and Shri M.J.Torgal, were concerned CIT(A) held that assessee had discharged his onus for proving their identify and credit worthiness. He also noted that the AO had inadvertently added Rs. 9.5 lakhs against the actual amount of Rs. 8.5 Lakhs. Thus, he confirmed the addition of Rs. 10,00,955/- and deleted the addition of Rs. 9,50,000/-. 24. AO had also noted during the course of assessment proceedings that the liability to the extent of Rs. 4,36,170/- shown by the assessee in its balance sheet filed along with the revised return against his assets could not be proved by the assessee. According to him, loan of Rs. 98,000/- from Shri Chidambara Shetty Rs. 28.170/- from Shri Kamalakar and Car loan of Rs. 3,10,000/- from M/s Standard Chartered Bank were not substantiated. He made an addition of Rs. 4,36,170/-. 25. On these addition argument of the assessee before the CIT(A) was that the sum of Rs. 4,36,170/- was real liability appearing in his balance sheet. According to the assessee the sum of Rs. 3,1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not prove the loans. In the case of M.J.Torgal, assessee did not even file a proper confirmation. However, as per the learned DR the CIT(A) was justified in confirming the addition of Rs. 10,00,955/- since assessee had given different versions at different times. According to him, it could not be believed that a person without PAN could have deposited a sum of Rs. 10,00,955/- with Excise department for obtaining sub-lease of a range. 29. We have perused the orders and heard the rival contentions. First we take up the addition of Rs. 10,00,955/- which was confirmed by the CIT(A). It is an admitted position that Shri Prakash Kattimani in his confirmation dated 14-02-2012 had stated that he had no banks statement or books of accounts with him to show the source of the payment. A look at the affidavit of Shri Prakash Kattimani does not prove anything. It simply gives the cheque Nos. through which payment of Rs. 10,00,955/- was effected. This would not in any way show that the payments were made by Shri Prakash Kattimani himself. Nor does it show any light of the credit worthiness of Shri Prakash Kattimani. Further, the assessee had changed his version before the CIT(A). Before the AO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts of Rs. 9,390/- each paid by Shri D.I.Kamalakar,to M/s ANZ Grindlays Bank, against the Car loan. On this also, AO has not made any comments in his remand report. However, in the Balance sheet a sum of Rs. 98,000/- was shown as due to Shri Chidambara Shetty whereas before the CIT(A) assessee had given confirmation from one Smt.D.Chitra, Proprietrix of M/s Chitra Enterprises. Nevertheless, confirmation which stated that the amount was paid by cheque to the assessee was not doubted by the AO in the remand report. We are therefore, of the opinion that CIT(A) was justified in considering the loans of Rs. 4,36,170/- appearing in the liability side of the balance sheet of the assessee to be genuine. 32. In the result, ground no.2 of the revenue is partly allowed for statistical purposes whereas its ground no.3 is dismissed. Other grounds of the revenue are general in nature. Grounds raised by the assessee in its appeal are dismissed. 33. In the result, appeal of the revenue for AY: 1999-2000 is partly allowed for statistical purposes whereas appeal of the assessee is dismissed. 34. Now we take up cross appeal of the assessee and revenue for the assessment year 2001-02. 35. Assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ear. As per the AO, no confirmations were filed for these. He made an addition of Rs. 3,12,680/- on this count also. 38. Aggrieved assessee moved in appeal before the CIT(A). Argument of the assessee was that participants in excise bidding for liquor ranges, mobilized EMDs by getting DD's from friends and relatives in the name of Excise Commissionerate. As per the assessee this was a usual procedure adopted everywhere. Such DD's deposited with the excise authorities, would be encashed by the excise authorities only in respect of the successful bidder. For the un-successful bidders, DD's were returned as such by the excise department. As per the assessee, it had mobilized DD's from the following persons for this purpose. i. Sri Ganapathi Kohli, Bidar Rs. 1,99,996/- ii.Sri Raghavendra Dall Industries Rs. 11,00,000/- iii. Sri U.G.Rajput, Hubli Rs. 2,00,000/- iv. Sri S.Govindaiah Goud, Hyderabad Rs. 20,00,000/- v. M/s Goverdhan Autofinance, Gulbarga Rs. 8,00,000/- v. M/s Superhit Films, Bangalore Rs. 7,00,000/- vi. Sri D.I.Kamalakar, Bangalore Rs. 14,00,000/- vii. Sri Basanth Kumar Patil, Bangalore Rs. 13,00,000/- viii. Sri Nagaraj, BIdar Rs. 5,00,000/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT(A) deleted Rs. 96,99,996/- and sustained addition of Rs. 42,50,000/-. He also deleted the addition for the loan of Rs. 1,12,680/- from Sri D.I.Kamalakar, while confirming the addition of Rs. 2.00 lakhs made in respect of alleged loan from Shri U.A.Ballal. 41. Now before us, learned AR strongly assailing the order of the CIT(A) in so far as he confirmed the addition to the extent of Rs. 42,50,000/- and Rs. 2.00 lakhs submitted that Sri Thirupathaiah, had appeared before the AO on 05-12-2011 and requested for 30 days time. As per the learned AR, assessee had obtained letter from Allahabad Bank, Viveknagar Branch, Bangalore giving detals for a sum of Rs. 23.00 lakhs. Placing reliance on paper book page no.4, learned AR submitted that in this letter dated 09-1-2011 issued by M/s Allahabad Bank, gave DD Nos. and the account number from which the money was drawn for issuing the DD's. Despite such evidence, CIT(A) refused to consider the claim of the assessee. Vis-à-vis the loan from Sri U.A. Ballal, learned AR submitted that it was properly reflected in the balance sheet of the assessee and ought not have been disbelieved. Supporting the order of the CIT(A) in so far as it b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the purpose of bidding at page-8 of his assessment order. This is reproduced at Annexure-I to this order. Claim of the assesee was that all these amounts were DD's given by his friends and known people and were returned to such persons, when bidding was over since assessee was unsuccessful. It could be true that excise authorities returned the DD's to the unsuccessful bidders. It could also true that assessee might have returned the DD's to these persons who had helped him by taking the DD's on his behalf. Assessee as per the learned CIT(A) had produced confirmation from 12 persons for a sum of Rs. 96,99,996/- out of the total sum of Rs. 1,75,69,996/-. AO himself had accepted confirmation letters given by the assessee for DD's taken for a sum totaling Rs. 36,20,000/- from two persons namely Amaresh, Prop: Amar Trading Co., and B.Balraj Goud. Thus, the modusoperandi of obtaining DD's from different persons for the purpose of bidding was accepted by the AO at least in two cases. In the two remand reports given by the AO, he has not made any comments on the various confirmation filed by the assessee except for stating they were not produced by the assessee and their credit worthiness ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... confirmation of all the 12 persons were available with him. Hence, with respect of the balance of Rs. 68,00,000/- we are of the opinion that the matter requires a fresh look by the AO. If the assessee is able to show that the confirmations for the sum of Rs. 68,00,000/- had the details of the DD's, and source for raising the amounts, and if the DD numbers tally, with the list given by the AO at page-8 of his order reproduced by us in the annexure and provide details as to the account from which the money for which the DD's were drawn, then, in our opinion the additions would not stand. However, we do make a note that it is the onus of the assessee to substantiate its contentions regarding the claim. Thus, against the deletion of Rs. 96,96,996/- the order of the CIT(A) is sustained to the extent of Rs. 28,99,996/- whereas for the balance of sum of Rs. 68 lakhs pertaining to his order is set aside and issues remitted back to the file of the AO for consideration afresh in accordance with law. 45. Coming to the addition of Rs. 1,12,680/- by the learned CIT(A) admittedly, Sri D.I.Kamalakar, was an assessee and his financial statement reflected the loans given to assessee, who was his ..... X X X X Extracts X X X X X X X X Extracts X X X X
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