IN THE HIGH COURT OF KERALA AT ERNAKULAM
ITA.No. 909 of 2009()
1. THE COMMISSIONER OF INCOME TAX,
... Petitioner
Vs
1. M/S.C.VIJAYAN & CO.,
... Respondent
For Petitioner :SRI.P.K.R.MENON,SR.COUNSEL, GOI(TAXES)
For Respondent :SRI.P.BALAKRISHNAN (E)
The Hon'ble MR. Justice C.N.RAMACHANDRAN NAIR
The Hon'ble MR. Justice V.K.MOHANAN
Dated :16/11/2009
O R D E R
C .N. RAMACHANDRAN NAIR &
V.K. MOHANAN, JJ.
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I. T. A. No. 909 OF 2009
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Dated this the 16th day of November, 2009
JUDGMENT
Ramachandran Nair, J.
Appeal is filed by the Revenue challenging the order of remand
by the Tribunal remanding the matter again to the assessing officer on
the ground that the Tribunal has no justification to do so. We have
heard standing counsel appearing for the revenue and Sri. P.
Balakrishnan, counsel appearing for the respondent.
2. Respondent was admittedly engaged in civil construction
work. In the course of verification of books of accounts for the year
2001-02, the assessing officer noticed that the assessee has recorded a
liability of Rs. 33,50,000/- as due to 179 persons. The accounts
containing this as cash credits were initially explained by the assessee
as amounts due to various suppliers of country materials. However, in
the appeal before the CIT (Appeals), the assessee changed the stand
that the amount represented cash borrowed from workers, each such
loan is found to be around Rs. 18,000/- or Rs. 19,000/- just below the
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limit of Rs. 20,000/- borrowal of which requires accpetance of the same
by cheque or demand draft as provided under Section 269SS of the
Act. The appellate authority called for a remand report from the
assessing officer who based on the facts and confirmation letters
produced by the assessee from the workers called for and examined 30
persons. None of the creditors examined proved assessee’s case.
Consequently the assessing officer reported that the claim is bogus.
Even though CIT (Appeals) dismissed the appeal, the assessee went in
further appeal before the Tribunal. The Tribunal also concluded that
the assessee’s case is bogus and inspite of such a finding entered by the
Tribunal, the Tribunal remanded the matter again to the Officer for
giving one more opportunity to the assessee. Even though counsel for
the respondent contended that the assessee was given opportunity to
cross-examine the persons examined by the Officer and for this
purpose, the Tribunal remanded the matter, we are unable to uphold the
order the Tribunal because burden of proof to explain cash credit is on
the assessee. The assessee not only failed to prove cash credit but the
persons from whom the assessee is stated to have borrowed funds
deposed before the Officer that they have not advanced any such loans.
When the assessee shifted the stand from country materials purchased
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to cash borrowals, the bona fides stood disproved there itself.
However, CIT (Appeals) was considerate in giving an opportunity to
the assessee to prove cash credits before the Officer. However, once
the assessee failed to establish the same before the Officer in the course
of pendency of appeal before the CIT (Appeals), there is no
justification for the Tribunal again to remand the matter. Further
Tribunal’s order amounts to shifting of burden to department to prove
cash credit which was not explained by the assessee in the assessment
or in the appeal before the CIT (Appeals). It is seen that the tribunal
itself could not accept assessee’s explanation. In other words, the
Tribunal unncessarily remanded the matter only to protract it. We
therefore allow the appeal by reversing the order of the Tribunal and by
restoring the assessment confirmed in first appeal.
(C.N.RAMACHANDRAN NAIR)
Judge.
(V.K. MOHANAN)
Judge.
kk
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