IN INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH, RAJKOT Conducted through E-Court at Ahmedabad, BEFORE SHRI S.S. GODARA, JUDICIAL MEMBER And SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER . I.T.A. No.468 RJT 2014 ( Assessment Year : 2005-06) M s.Tulsi Digital Colour Lab ACIT Pvt.Ltd. Vs. Circle-2 Centre Point Rajkot Near Keshubhai Eye Hospital Ashapura Road, Rajkot . . PAN GIR No. : AABCT 6776 E ( Appellant) .. ( Respondent) Appellant by : Shri M.J.Ranpura, AR Respondent by : Shri C.S. Anjaria, Sr.DR Date of Hearing 19 09 2016 Date of Pronounce ment 21 10 2016 O R D E R PER PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER : This appeal by Assessee is directed against order of Ld.Commissioner of Income Tax(Appeals)-III, Rajkot CIT(A) in short] dated 11 06 2014 pertaining to Assessment Year (AY) 2005-06. Assessee has raised following grounds of appeal:- ITA No.468 RJT 2014 M s.Tulsi Digital Colour Lab P.Ltd. vs. ACIT Asst.Year 2005-06 -2- 1.0 grounds of appeal mentioned hereunder are without prejudice to one another. 2.0 learned Commissioner of Income Tax (Appeals)-III, Rajkot erred on facts as also in law in confirming addition of 20,00,000 - made by AO u s.68 of Act on account of unsecured loan received from Shri G.M. Saujani and interest of 2,12,249 - paid on such alleged loan on alleged ground that appellant failed to prove identity, genuineness and creditworthiness of depositors. addition is totally unjustified on facts as also in law and may kindly be added. 2. Briefly stated, relevant facts are that assessee is Private Limited Company engaged in business of colour-photo developing and printing work. Return of income for year under consideration was filed on 06 10 2005 declaring loss of Rs.11,31,116 -. assessment was originally finalized u s.143(3) of Income Tax Act, 1961 (hereinafter referred to as "the Act") dated 06 12 2007 on total income of Rs.2,94,310 -. Assessing Officer (AO) while making assessment inter alia treated unsecured loan of Rs.20 lacs taken from Shri G.M. Savjani as unexplained credit and added to total income of assessee u s.68 of Act. AO also disallowed interest of Rs.2,12,249 - paid on aforesaid unsecured loan taken from Shri G.M. Savjani. aforesaid additions and disallowances travelled to ITAT. Co-ordinate Bench of ITAT vide order dated 29 04 2009 restored issue related to impugned additions of Rs.20 lacs and disallowance of Rs.2,12,249 - to fie of AO. In second round ITA No.468 RJT 2014 M s.Tulsi Digital Colour Lab P.Ltd. vs. ACIT Asst.Year 2005-06 -3- of proceedings, AO once against reaffirmed his earlier action and treated impugned unsecured loan and interest thereon as unexplained and added to total income of assessee. 3. assessee filed appeal before CIT(A). CIT(A) took note of directions of Co-ordinate Bench of Tribunal and observed that assessee has failed to produce lender Mr.Savjani before AO to prove his case as directed by ITAT. He, therefore, found no fault with action of AO in reaffirming additions and disallowances. relevant portion of order of CIT(A) dated 11 06 2014 appealed against, is reproduced hereunder for ready reference:- 2. In this case, assessment was originally completed u s. 143(3) of IT Act, 1961 on 06 12 2007 determining total income at Rs. 2,94,310 -. On appeal, CIT (A) partly allowed appeal vide his order dated 17 11 2008. matter went further to Hon'ble IT AT, Rajkot Bench, Rajkot, whereby two impugned issues were set aside to file of assessing officer after giving following findings: 7. After hearing both parties, and looking into facts and circumstances of case, we find that assessee has taken loan from Mr. Savjani and Mr. Savjani have taken loan from three persons and same was advanced to assessee company. assessee did not remain present before assessing officer. We find from record, assessee simply produced ledger account of Shri Savjani. From books of accounts of assessee firm, it is found that firm has taken further loan from three persons. Mr. Savjani has no source of income and also sufficient fund to advance assessee. Therefore, assessing officer had to examine Mr. Savjani but assessee has not submitted any evidence regarding creditworthiness, identity of creditor. Therefore, assessee has failed to prove genuineness of transaction, identity of creditor and creditworthiness of persons. We find that CIT (A) has not called for any remand report. Moreover, assessee did not remained present and also Mr. Savjani also did not remain present before assessing officer. Therefore, in interest of justice and fair play, we restore this ITA No.468 RJT 2014 M s.Tulsi Digital Colour Lab P.Ltd. vs. ACIT Asst.Year 2005-06 -4- matter to file of assessing officer and assessee is directed to produce Mr. Savjani along with document before assessing officer is directed to decide matter afresh and in accordance with law. 3. Acting on directions of Hon'ble ITAT, Rajkot Bench, Rajkot, assessing officer has commenced assessment proceedings de nova by issue of notice u s. 143(2) on 13.07.2010. appellant could not comply with specific direction of assessing officer to produce one Mr. Savjani, so called loan creditor before him for examination and verification of claim made. Left with no other option, assessing officer has once again made additions similar to that in original assessment. appellant is once again in appeal before me. During appellate proceedings, Shri Harish Ranpara, C.A., authorized representative failed to furnish any credible explanation for not producing impugned person Shri G. M. Savjani before the, assessing officer for necessary verification. Unless said person is produced before assessing officer for examination, all those documents viz. Xerox copy of passport, return of income, PAN card, bank statement that were produced by appellant before assessing officer and so also before me, remains unsubstantiated and unverified, no cognizance of which can be taken. 4. Moreover, when highest fact finding authority, Hon'ble ITAT, Rajkot Bench, Rajkot, when held that: Mr. Savjani has no source of income and also sufficient fund to advance assessee. Therefore, assessing officer had to examine Mr. Savjani but assessee has not submitted any evidence regarding, creditworthiness, identity of creditor. Therefore, assessee has failed to prove genuineness of transaction, identity of creditor and creditworthiness of persons, 5. assessing officer without undertaking further investigations in this matter, so as to say, that, without examining so called Mr. Savjani, loan creditor, cannot come out with any new finding, meaning thereby, conclusions drawn in de nova assessment will be similar with those that were drawn in original assessment. Therefore, by not producing person hi question for examination before assessing officer amounts to non-compliance of directions given by Hon'ble ITAT, Rajkot Bench, Rajkot. To that extent, appellant failed to discharge burden of proof. Hence, I decline to interfere with action of assessing officer in making two impugned additions to income returned. ITA No.468 RJT 2014 M s.Tulsi Digital Colour Lab P.Ltd. vs. ACIT Asst.Year 2005-06 -5- Thus, these two additions stands confirmed. Ground numbers 3 and 4 are accordingly dismissed. 6. result, appeal of appellant is dismissed. 4. Aggrieved by order of CIT(A), assessee is in appeal before ITAT. 5. Ld.AR for assessee Mr. M.J. Ranpura referred to copy of confirmation, bank statement and return of income of lender Shri G.M. Savjani to establish genuineness of transaction, identity and creditworthiness towards loan given. Copy of passport of lender and also ledger account of lender were referred to support bona fides of borrowals made. He accordingly sought reversal of order of CIT(A) on impugned additions disallowances made. Ld.AR relied upon decision of Hon ble Gujarat High Court in case of CIT vs. Ranchhod Jivabhai Nakhava reported in (2012) 21 taxmann.com 159 (Guj.) and decision of Co-ordinate Bench of ITAT in case of M s.Sanjayraj Petroleum & Hotel vs. ITO in ITA No.209 Raj 2014 for AY 1997-98, order dated 16 08 2016. 6. Ld.DR, on other hand, relied upon order of CIT(A) and submitted that decisions relied upon by Ld.AR are distinguishable on facts. Ld.DR further submitted that categorical directions of ITAT to produce lender before AO cannot be ITA No.468 RJT 2014 M s.Tulsi Digital Colour Lab P.Ltd. vs. ACIT Asst.Year 2005-06 -6- by-passed and given go-bye. He, accordingly, submitted that no interference with order of CIT(A) is called for. 7. We have carefully considered rival submissions and perused orders of authorities below and case-laws cited. We find that Co-ordinate Bench of ITAT having regard to facts and circumstances of case has given clear cut directions to produce lender before AO for examination. assessee has failed to abide by directions of ITAT without any discernable reason. bank statement of lender filed does not reflect closing balance after transaction at all. creditworthiness is not verifiable at all. In circumstances, we do not find any infirmity in order of CIT(A) in upholding additions made. We find that order of CIT(A) is in tune with earlier order of ITAT. We also note that decision of Hon ble Gujarat High Court in case of CIT vs. Ranchhod Jivabhai Nakhava relied upon by assessee is distinguishable on facts has been rendered in its own set of facts. In that case, AO of lender was satisfied with transactions. We also note that lender shows meager income of Rs.74,279 - relevant to Asst.Year 2005-06 which casts serious aspirations on lending capacity of impugned lender. return of lender does not reflect impugned loans advanced to assessee. Thus, primary onus which lay on assessee is not found to be discharged. decision rendered by Coordinate Bench in case ITA No.468 RJT 2014 M s.Tulsi Digital Colour Lab P.Ltd. vs. ACIT Asst.Year 2005-06 -7- of M s.Sanjayraj Petroleum & Hotel vs. ITO(supra) is also similarly distinguishable on facts. It is pertinent to mention that in second round of proceedings before Tribunal, it is not open for Tribunal to go beyond scope and ambit of directions spelt by Tribunal in earlier occasion. findings of earlier order of ITAT continues to be sacrosanct and not shown to have been challenged. In this view of matter, we decline to interfere with order of CIT(A). Thus, ground raised by assessee is dismissed. 7. In result, Assessee s appeal stands dismissed. This Order pronounced in Open Court on 21 10 2016 Sd - Sd - ( S.S. GODARA ) ( PRADIP KUMAR KEDIA ) JUDICIAL MEMBER ACCOUNTANT MEMBER Ahmedabad; Dated 21 10 2016,T.C. NAIR, Sr. PS Copy of Order forwarded to : 1. Appellant 2. Respondent. 3. Concerned CIT 4. ( ) CIT(A)-III, Rajkot 5. , , DR,ITAT, Rajkot 6. Guard file. BY ORDER, True Copy (Dy. Asstt.Registrar) , ITAT, Rajkot M/s.Tulsi Digital Colour Lab Pvt.Ltd. v. ACIT, Circle-2, Rajkot