Shri Chetan R.Thakkar, Ahmedabad V. The Income tax Officer,Ward-10(1), Ahmedabad

CO 265/AHD/2011

• Counselvise Citation: [2012] 122 COUNSELVISE.COM (IT) 8083 (ITAT-AHMEDABAD)
• Duration Of Justice: 11 month(s) 21 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 07-12-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 12-10-2012
• Assessment Year: 2008-2009
• Appeal Filed On: 16-12-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: Y P VERMA
• Assessee Lawyers: D K PARIKH
• Keywords: Unexplained cash credit; Additional evidence
• Section: 143(3); 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD B BENCH AHMADABAD BEFORE SHRI MUKUL KR. SHRAWAT , JUDICIAL MEMBER AND SHRI T.R. MEENA, ACCOUNTANT MEMBER ITA NO. 2913/AHD/2011 ASSESSMENT YEAR :2008-2009 & C.O. NO.265/AHD/2011 ASSESSMENT YEAR :2008-2009 INCOME-TAX OFFICER, WARD.10(1), AHMEDABAD SHRI CHETAN R. THAKKAR 25, VASUKI SOCIETY, VASNA, AHMADABAD- 380007 V/S . V/S. SHRI CHETAN R. THAKKAR 25, VASUKI SOCIETY, VASNA, AHMADABAD-380007 INCOME-TAX OFFICER, WARD.10(1), AHMEDABAD PAN NO. ABNPT5466F (APPELLANT) .. (RESPONDENT) BY REVENUE SHRI Y. P. VERMA, SR.D.R. /BY ASSESSEE SHRI D. K. PARIKH, A.R. /DATE OF HEARING 12.10.2012 /DATE OF PRONOUNCEMENT 07.12.2012 O R D E R PER : T.R.MEENA, ACCOUNTANT MEMBER THIS IS AN APPEAL AT THE BEHEST OF THE REVENUE AND C.O. OF THE ASSESSEE WHICH HAS EMANATED FROM THE ORDER OF CIT(A )-XVI, AHMEDABAD, ORDER DATED SEPTEMBER 12, 2011 FOR ASSESSMENT YEAR 2008-2009. THE REVENUES APPEAL AND ASSESSEES C.O. WERE HEARD TOG ETHER AND ARE BEING DISPOSED OF BY WAY OF THIS COMMON ORDER FOR THE SAK E OF CONVENIENCE. ITA NO. 2913/AHD/2011 A.Y. 08-09 PAGE 2 & C.O. NO.265/AHD/2011 THE EFFECTIVE GROUNDS OF REVENUES APPEAL 1. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS I N DELETING THE ADDITION MADE U/S 68 OF THE ACT OF RS.7,30,000/- BE ING INTRODUCED IN THE BOOKS OF ACCOUNT IN DISGUISE OF LOANS/DEPOSI TS. 2. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.1,75,000/- ON ACCOUNT OF UNSECURED L OAN SHOWN IN THE BALANCE SHEET TREATING AS UNEXPLAINED CASH CRED IT U/S 68 OF THE ACT. 3. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION ON ACCOUNT OF UNEXPLAINED CASH CREDIT U/S 68 OF THE ACT OF RS.18,42,350/- BEING INTRODUCED IN THE BANK ACCO UNTS IN CASH OUT OF VARIOUS LOANS/DEPOSITS. 4. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN RESTRICTING THE ADDITION MADE ON ACCOUNT OF LOW HOUSEHOLD WITHD RAWALS. THE EFFECTIVE GROUND OF ASSESSEES C.O. 1. THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL S) ERRED IN PARTLY CONFIRMING THE HOUSEHOLD EXPENSES TO THE EXTENT OF RS.60,000/-. THE ASSESSEE STAYS WITH HIS FATHER AN D BROTHER AND THE HOUSEHOLD EXPENSES ARE BEING MET WITH BY ALL TH E FAMILY MEMBERS. THERE IS NO EXPENDITURE FOUND OUT BY THE ASSESSING OFFICER, WHICH HAS BEEN INCURRED OUT OF UNDISCLOSED INCOME. IT IS THEREFORE PRAYED THAT THE ADDITION OF RS.60,000/- M AY KINDLY BE DELETED. 2. THE A.O. OBSERVED THAT DURING THE COURSE OF ASSE SSMENT PROCEEDING THE ASSESSEE HAS INTRODUCED AMOUNT OF RS.7,30,000/- IN CAPITAL ACCOUNT WHICH HAS BEEN RECEIVED FROM FRIENDS AND RELATIVES. THE ASSESSEE DID NOT FILE ANY CONFIRMATION BEFORE THE A.O. AS PER THE A.O., HE D ID NOT PROVE THE GENUINENESS OF THE TRANSACTION, CREDITWORTHINESS OF THE TRANSACTION AND ITA NO. 2913/AHD/2011 A.Y. 08-09 PAGE 3 & C.O. NO.265/AHD/2011 IDENTITY OF THE PERSON. THEREFORE, HE MADE ADDITIO N U/S. 68 OF THE IT ACT AT RS.7,30,000/-. FURTHER, IN BALANCE SHEET, THE ASSE SSEEHAS SHOWN UNSECURED LOAN OF RS.1,75,000/- FROM SHRI DEVENDRA G. THAKKAR BY CHEQUE BUT NO CONFIRMATION WAS FILED BEFORE THE A.O. FROM SHRI DE VENDRA G. THAKKAR EXCEPT SUBMISSION. THE A.O. ALSO FOUND THAT THE APPELLANT HAD DEPOSITED CASH IN BANK ACCOUNT AT RS.19,06,500/-. THE A.O. ASKED TO EXPLAIN THE SOURCE OF CASH DEPOSITED IN THE BANK ACCOUNT MAINTAINING WITH NUTA N NAGRIK SAHAKARI BANK LTD. THE ASSESSEE EXPLAINED BEFORE THE A.O. THAT H E HAD TAKEN SMALL LOANS RANGING FROM RS.3500/- TO RS.17000/-, NO CONFIRMATI ON WAS FILED BEFORE THE A.O. IN ABSENCE OF ANY CONCLUSIVE EVIDENCE ALONGWIT H PAN, THE A.O. TREATED BOTH THE AMOUNTS I.E. RS.1,75,000/- AND RS.18,42,35 0/- OUT OF RS.19,06,500/- AS UNEXPLAINED CREDIT U/S. 68 OF THE IT ACT. 3. BEING AGGRIEVE BY THE ORDER OF THE A.O., THE ASS ESSEE CARRIED THE MATTER BEFORE THE CIT(A) WHO HAS PARTLY CONFIRMED THE ADDI TION BY RS.85,000/-. ALL THE THREE ADDITIONS HAVE BEEN DELETED ON THE BASIS OF SUBMISSION ALONG WITH EVIDENCE FURNISHED BY THE APPELLANT BEFORE HIM, WHI CH WAS FORWARDED TO THE A.O. FOR CALLING REMAND REPORT ON THE EVIDENCE SUBM ITTED BY THE APPELLANT. THE LD. A.O. SIMPLY REPEATED THE FINDINGS OF THE AS SESSMENT ORDER IN HIS REMAND REPORT AND CLAIMED THAT THE A.O. HAD GIVEN S UFFICIENT OPPORTUNITY AND WHATEVER EVIDENCE FILED BEFORE THE LD. CIT(A) WERE NEW EVIDENCE BUT COULD BE ENTERTAINED ON MERIT BY THE CIT(A). THE LD. CIT(A) HAS GIVEN CATEGORICALLY FINDINGS ON ADDITION OF RS.7,30,000/- AS SUBMITTED BY THE APPELLANT THAT LD. A.O. ASKED TO FURNISH THE CONFIRMATION ON 16.12.201 0 WHEREAS ORDER U/S. ITA NO. 2913/AHD/2011 A.Y. 08-09 PAGE 4 & C.O. NO.265/AHD/2011 143(3) WAS PASSED ON 30.12.2010 FOR CASH CREDITOR O F RS.7,30,000/- TOTAL 50 CASH CREDITORS WERE THERE. IN CASE OF CASH CREDITO RS, SHRI ABHISHEK B. PATEL, SHRI HETALBEN R. MIRANI, SHRI NAMAN B. PATEL, SMT. PUSHPABEN J. MIRANI AND SMT. URVASHIBEN B. PATEL HAVE FILED THE CONFIRMATIO N ALONG WITH COPY OF PAN CARD, REMAINING 45 CASH CREDITORS/DEPOSITORS WHO WE RE RANGING FROM RS. 15,000/- TO RS.17,000/- FOR WHICH THE APPELLANT HAD FILED CONFIRMATIONS, COPY OF VOTER ID AND IN SOME CASES, COPY OF IDENTITY CARD. THE CONFIRMATION SUBMITTED BEFORE THE CIT(A) HAS ALSO EXPLAINED THE SOURCE OF INCOME. HOWEVER, THE LD. CIT(A) HAD NOT FOUND PROOF OF IDENTITY AND CREDITWO RTHINESS IN CASE OF SHRI BHARATBHAI S. SHAH, KOMAL JATINBHAI PUJARA, SHRI BH ARATBHAI S. SHAH, SMT. CHANDRIKABEN JAYANTILAL THAKKAR, GIRISHBHAI THAKKAR , KRUPA GIRISHBHAI THAKKAR, MADHURI JITENDRABHAI PUJARA. THUS, HE CON FIRMED THE ADDITION OF RS.85,000/- OUT OF RS.7,30,000/- TOTAL CASH CREDITO RS. FURTHER, IT WAS OBSERVED BY THE CIT(A) THAT RS.1,75,000/- WAS OUTSTANDING BA LANCE AS ON 31.03.2008 IN THE NAME OF SHRI DEVENDRA THAKKAR WHO HAD GIVEN LOA N OF RS.5 LACS INITIALLY THROUGH CHEQUE FOR WHICH THE APPELLANT HAD FILED CO NFIRMATION ALONG WITH COPY OF BANK ACCOUNT & PAN NO. IT WAS OBSERVED THAT THE APPELLANT HAD ALSO RE- PAID TO THE CASH CREDITOR DURING THE YEAR UNDER CO NSIDERATION THROUGH CHEQUE. ACCORDINGLY, THE LD. CIT(A) HAD ACCEPTED THIS OUTST ANDING BALANCE OF RS.1,75,000/- AS EXPLAINED. AS REGARD THE THIRD AD DITION ON ACCOUNT OF CASH DEPOSIT IN THE NUTAN NAGRIK SAHAKARI BANK LTD. AT R S.18,42,350/- IS CONCERNED, THE LD. CIT(A) OBSERVED THAT THE APPELLA NT HAD OPENING CASH BALANCE AS ON 01.04.2007 OF RS. 1,00,000/-. THEREA FTER 29 ENTRIES OF CASH ITA NO. 2913/AHD/2011 A.Y. 08-09 PAGE 5 & C.O. NO.265/AHD/2011 DEPOSITED WERE THERE ON DIFFERENT DATES IN THE BANK ACCOUNT. THE LD. CIT(A) HAD VERIFIED THE CASH REFLECTED IN THE REGULAR CASH BOOK AND CASH DEPOSITED IN THE BANK ACCOUNT. HE DID NOT NOTICE ANY DISCREPANC Y BETWEEN BOTH. WHATEVER CASH LOAN RECEIVED BY THE APPELLANT AS FIR ST SHOWN IN THE REGULAR CASH BOOK AND THEREAFTER IT WAS DEPOSITED IN THE BA NK ACCOUNT. VICE VERSA, THE APPELLANT HAD ALSO WITHDRAWN CASH FROM THE BANK ACCOUNT WHICH HAS BEEN SHOWN IN THE REGULAR CASH BOOK. THE LD. CIT(A) NAR RATED VARIOUS INSTANCES OF SUCH TRANSACTIONS. THEREFORE, HE HAD CONCLUDED THA T CASH DEPOSITED IN THE BANK ACCOUNT ALSO FOUND EXPLAINED. ACCORDINGLY, HE DELETED THE ADDITIONS. 4. NOW THE MATTER IS BEFORE US. LD. SR. D.R. VEHEM ENTLY ARGUED AND RELIED UPON THE ORDER OF THE A.O. AND CLAIMED THAT THE APP ELLANT HAD FURNISHED ADDITIONAL EVIDENCE BEFORE THE CIT(A) AND HE HAS AD JUDICATED THE CASE ON THE BASIS OF IT WHICH WERE NOT SUBMITTED BEFORE THE A.O . BY HIM. THEREFORE, HE PRAYED TO CONFIRM THE ADDITION. HOWEVER, FROM THE SIDE OF THE APPELLANT, THE LD. COUNSEL FILED PAPER BOOK WHICH INCLUDES COPY OF THE SUBMISSION MADE BEFORE THE CIT(A), CONFIRMATION OF DEVENDRA THAKKAR WITH P AN AND IDENTITY, CONFIRMATION OF DEPOSITORS WITH PAN, COPY OF WRITTE N SUBMISSION DATED 05.07.2011 BEFORE THE CIT(A), COPY OF BANK ACCOUNT FOR F.Y. 07-08 SHOWING CASH WITHDRAWN AND DEPOSITED, COPY OF CASH BOOK, CO PY OF NUTAN NAGRIK CO OP BANK PASS BOOK, COPY OF AUDITED ACCOUNTS, COPY O F RETURN OF DEVENDRA G THAKKAR AND COPY OF REMAND REPORTS AND ARGUED THAT ALL THE CASH CREDITORS WERE PROVED GENUINE BEFORE THE CIT(A). HE ALSO REL IED ON HONBLE GUJARAT HIGH COURT DECISION IN CASE OF RAJESH BABUBHAI DAMANIA VS ITO 251 ITR 541 ITA NO. 2913/AHD/2011 A.Y. 08-09 PAGE 6 & C.O. NO.265/AHD/2011 (GUJ), FOR REMAND REPORT, ACIT VS. ANIMA INVESTMENT LTD. (2000) 73 ITD 125 (DELHI)(TM) ON REMAND REPORT. HE FURTHER RELIED UPON IN CASE O F RADHEY DEVELOPERS IN ITA NO. 3928/AHD/2008 FOR NON REJECTION OF BOOKS OF ACCOUNT. HE ALSO ARGUED THAT IN CASE OF MOONGIPA INVESTMENT LTD. VS. ITO (2012) 72 DTR (DEL) (TRIB) IN ITA NO. 2605/AHD/2007 , THE HONBLE THIRD MEMBER HELD THAT U/S.254 OF THE IT ACT, THE ITAT CANNOT EXERCIS E THE POWER TO ALLOW THE ASSESSING OFFICER AN OPPORTUNITY TO PATCH UP WEAK P ART OF HIS CASE AND TO FILL UP OMISSION, SINCE THE PARTY GUILTY OF REMISSNESS A ND GROSS NEGLIGENCE IS NOT ENTITLED TO NEGLIGENCE BEING SHOWN. HE FURTHER REL IED ON FOLLOWING CASES: ACIT VS. JOGINDER SINGH IN ITA NO. 2942/DEL/2011 FOR A.Y. 05-06 ORDER DATED 26.08.2011, WHEREIN THE ITAT HELD THAT CIT HAS HIMS ELF EXAMINED THE CONTENTS OF AIR INFORMATION AND ON RECORDED FINDING OF FACT THAT AMOUNT OF RS. 14,52,000/- BY DEPOSITED IN THE BANK ACCOUNT WAS DU LY REFLECTED IN THE BOOKS OF ACCOUNT OF THE ASSESSEE WITH SOURCE. THE CIT(A) HAS CO-TERMINUS POWER. HE CAN DECIDE THE ISSUE BY ACCEPTING THE ADDITIONAL EVIDENCE HIMSELF. IN ANOTHER CASE, DCIT VS. M/S. R. R. BUILDERS IN ITA NO. 4284/MUM/20 10 FOR A.Y. 06-07, AFTER EXAMINING THE REGULAR CASH BOOK MAINTAINED BY THE ASSESSEE WHEREIN THE RELEVANT ENTRIES ARE DULY RECORDED HAS ACCEPTED THE ABOVE DEPOSITS IN THE BANK ACCOUNTS. THE ITAT FOUND THE ENTRIES IN CASH BOOK WERE GENUINE. THEREFORE, HE REQUIRED TO CONFIRM THE ORD ER OF THE CIT(A). 5. WE HAVE PERUSED THE ORDERS OF THE AUTHORITIES BE LOW AND GONE THROUGH THE FACTS OF THE CASE AND CASE LAWS CITED BY THE AP PELLANT. THE CIT(A) HAS GIVEN DETAILED REASONING IN ACCEPTING THE ADDITIONA L EVIDENCE WHICH WERE ITA NO. 2913/AHD/2011 A.Y. 08-09 PAGE 7 & C.O. NO.265/AHD/2011 FORWARDED TO THE A.O. BUT THE A.O. HAS NOT COMMENTE D ON IT. THE CIT(A) ANALYZED THE EVIDENCE AND EXERCISED HIS POWER TO DECIDE THE CASE AS HE HAS CO-TERMINUS POWER. THEREFORE, WE DO NOT FIND A NY INFIRMITY IN DELETING THE ADDITION OF RS.6,45,000/- OUT OF RS.7,30,000/-, RS.1,75,000 AND RS.18,42,350/-. THUS, GROUND NOS. 1 TO 3 OF THE RE VENUES APPEAL, ARE DISMISSED. 6. THE A.O. OBSERVED THAT THE ASSESSEE HAS SHOWN HO USEHOLD WITHDRAWAL AT RS.61,200/-. HE HAD GIVEN REASONABLE OPPORTUNIT Y OF BEING HEARD ON THIS ISSUE. AFTER CONSIDERING THE LIVING STANDARD OF TH E APPELLANT AND NUMBER OF FAMILY MEMBERS AND WITHDRAWAL MADE BY THE APPELLANT INSUFFICIENT, THUS, HE ESTIMATED THE HOUSEHOLD EXPENSES OF RS.15,000/- PER MONTH. THEREFORE, THE TOTAL HOUSEHOLD EXPENSES AT RS.1,80,000/- AND WITHD RAWAL SHOWN BY THE ASSESSEE AT RS.61,200/-. THE DIFFERENCE OF RS.1,18 ,800/- WAS ADDED IN THE INCOME OF THE ASSESSEE. THE ASSESSEE CHALLENGED TH E ADDITION BEFORE THE CIT(A) WHO HAS ALLOWED THE APPEAL PARTLY BY OBSERVI NG AS UNDER: 3.2 I HAVE CAREFULLY CONSIDERED THE SUBMISSION OF THE LD. COUNSEL AND THE FACTS OF THE CASE. NO DOUBT THE HO USEHOLD EXPENSES CANNOT BE MET BY THE WITHDRAWALS OF RS.61, 200/- BUT THE ASSESSING OFFICER HAD NOT CONSIDERED THE FACT T HAT THE APPELLANT WAS RESIDING ALONG WITH HIS PARENTS AND A S HEAD OF FAMILY MOST OF THE EXPENSES WERE BORNE BY HIM. THE ASSESSING OFFICER HAD NOT GIVEN ANY REASON FOR THE ESTIMATION OF HOUSEHOLD EXPENSES OF RS.15,000/- PER MONTH. HOWEVER, THE LD . COUNSEL HAD NOT FURNISHED THE DETAILS OF WITHDRAWALS MADE B Y THE FATHER OF THE ASSESSEE. CONSIDERING THE ABOVE FACTS, IT WILL MEET THE END OF JUSTICE, IF THE ADDITION IS RESTRICTED TO RS.60,000 /-. THE ADDITION OF ITA NO. 2913/AHD/2011 A.Y. 08-09 PAGE 8 & C.O. NO.265/AHD/2011 RS.60,000/- IS THUS SUSTAINED AND REST OF THE ADDIT ION IS DELETED. THE FOURTH GROUND OF APPEAL IS ACCORDINGLY PARTLY A LLOWED. 7. NOW, THE REVENUE AS WELL AS APPELLANT IS BEFORE US. THERE IS NO CONCLUSIVE EVIDENCE WITH THE A.O. FOR ESTIMATING TH E HOUSEHOLD @ 15,000/- PER MONTH WHEREAS THE APPELLANT HAD ALSO NOT SUBMIT TED ANY EVIDENCE OF ANY WITHDRAWAL MADE BY OTHER FAMILY MEMBERS AT ANY STAG E. THUS, WE CONFIRM THE ORDER OF THE CIT(A). ACCORDINGLY, THE APPEAL OF TH E REVENUE AND ASSESSEES C.O. BOTH ARE DISMISSED ON THIS GROUND. 8. IN THE COMBINED RESULT, THE REVENUES APPEAL & A SSESSESS C.O. BOTH ARE DISMISSED. THESE ORDERS PRONOUNCED IN OPEN COURT ON 07.12.2012 SD/- SD/- ( MUKUL KR. SHRAWAT ) (T.R. MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER TRUE COPY S.K.SINHA / COPY OF ORDER FORWARDED TO:- 1. '#$ / APPELLANT 2. &'#$ / RESPONDENT 3. )*)+ ' ', / CONCERNED CIT 4. ' ',- ' / CIT (A) 5. 01'' +, ' ''' +, 34 * / DR, ITAT, AHMEDABAD 6. 167 89 / GUARD FILE. BY ORDER/ , :/3' )' ' ''' +, 34 * < ITA NO. 2913/AHD/2011 A.Y. 08-09 PAGE 9 & C.O. NO.265/AHD/2011 STRENGTHEN PREPARATION & DELIVERY OF ORDERS IN THE ITAT 1) DATE OF TAKING DICTATION 27.11.2012 2) DIRECT DICTATION BY MEMBER STRAIGHT ON COMPUTER/LAPTOP/DRAGON DICTATE XXX 3) DATE OF TYPING & DRAFT ORDER PLACE BEFORE MEMBER 29.11.2012 4) DATE OF CORRECTION ,, ,, 5) DATE OF FURTHER CORRECTION XXX 6) DATE OF INITIAL SIGN BY MEMBERS 07.12.2012 7) ORDER UPLOADED ON ,, ,, 8) ORIGINAL DICTATION PAD HAS BEEN ENCLOSED IN THIS FILE YES 9) FINAL ORDER AND 2 ND COPY SEND TO BENCH CLERK ON 07.12.2012