Court No. - 35
Case :- INCOME TAX APPEAL No. - 37 of 2004 Appellant :- M/S Gaurav Theatres Ltd.
Respondent :- Asst. Commissioner Income Tax Counsel for Appellant :- Amitabh Agrawal,Rahul Agarwal Counsel for Respondent :- Ashish Agarwal Hon'ble Bharati Sapru,J. Hon'ble Rohit Ranjan Agarwal,J.
(By Hon. Rohit Ranjan Agarwal, J.)
Heard Sri Rahul Agarwal, learned Counsel for the appellant and Sri Ashish Agarwal, learned Counsel for the Department.
The present appeal under Section 260A of the Income Tax Act, 1961 was admitted on the following substantial question of law on 6.4.2007 :-
"Whether in the facts and circumstances of the case within the meaning and purport of Section 68 of the Income Tax Act, 1961 the appellant had discharged his onus and the addition of Rs.1,80,000/- as unexplained cash credit was justified?"
The case of the assessee/appellant in nutshell is that it is a private limited company incorporated under the Companies Act, 1956, and is carrying on business of higher purchase finance of vehicle, running of Cinema Hall and also plying of trucks. The dispute relates to the assessment year 1996-97 financial year 1995-96. The appellant had filed returned showing an income of Rs.1,18,640/- against which assessment was completed on an income of Rs.5,07,090/-. The difference in assessed and disclosed income was on account of addition of cash credit of Smt. Kallu Devi, deposit of Rs.1,80,000/- made by her in cash as margin money on 12.6.1995 with the appellant for purchase of Truck.
Case of the assessee is that Smt.Kallu Devi, subsequently decided not to purchase the Truck and money was treated as loan. The assessment for relevant year was made on 22.3.1999 and addition of Rs.1,80,000/- was made in the income of the assessee. The appeal filed by assessee against the assessment order was partly allowed by the Commissioner of Income Tax (Appeal) on 18.2.2000, but the addition of Rs.1,80,000/- in the income of the appellant was upheld and the creditworthiness of Kallu Devi was discarded. The appeal filed by the appellant before the Tribunal also met the same fate and Tribunal dismissed the appeal of the appellant and disbelieved the creditworthiness of the creditor Smt. Kallu Devi on the ground that her statement is not reliable as she has failed to prove the deposit of interest received by her in the bank account by way of demand draft as well as the return of the loan amount.
Further the Tribunal held that the assessee also could not prove that the amount of interest has been paid to her. Tribunal also recorded finding that the assessee- company was advancing interest free loan to sister concerns and if the assessee has amount with it, then there was no need to take loan on deposit from Smt. Kallo Devi on interest.
We have heard learned Counsel for the appellant who has relied upon the provisions of Section 68 of the Income Tax Act and submitted that the assessee had offered explanation about the nature and source of the money credited in the books of account and further proved the identity of the creditor and also creditworthiness of creditor.
Learned Counsel for the Department vehemently submitted that all the three authorities had disbelieved the creditworthiness of Smt. Kallu Devi, as the statement made by her could not give any plausible explanation as to the deposit of interest and the refund of loan given by her to the assessee and further the money which came into her by way of gifts and loans from her relatives.
Having heard learned Counsel for the parties and perusing the records of the case, we find that the assessee had failed to give any satisfactory explanation as to the cash credit of Rs.1,80,000/- which was credited in the name of Smt. Kallu Devi and the authorities had rightly confirmed the addition of the said amount as unexplained cash credit. Further, the creditworthiness of the Creditor has been disbelieved by all the authorities and there is no plausible reason to believe the statement of Smt. Kallu Devi who has failed to give explanation or evidence before the authorities concerned which can look into the facts of the case. The Tribunal being last fact finding Court has found the creditor not creditworthy and the evidence has been disbelieved. We find no ground to interfere in this matter.
The question of law is, therefore, answered in favour of the Department and against the assessee.
Accordingly, the appeal is dismissed.
Order Date :- 26.7.2019 S. Singh