Vijaynagar Bhuj Owners Association, Bhuj V. The Income Tax Officer, Ward-2, Bhuj

CO 41/RJT/2011

• Counselvise Citation: [2012] 122 COUNSELVISE.COM (IT) 7532 (ITAT-RAJKOT)
• Duration Of Justice: 1 year(s) 1 month(s) 17 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 13-07-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 07-06-2012
• Assessment Year: 2005-2006
• Appeal Filed On: 27-05-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: MK SINGH

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBULAL; RAJKOT BENCH, RAJKOT. . .. . . .. . , , , , . .. . . .. . , , , , $ $ $ $ BEFORE SHRI T. K. SHARMA, JM AND SHRI D. K. SRIVAST AVA, AM ITA NO. 205/RJT/2011. / ASSESSMENT YEAR:2005-06. THE INCOME TAX OFFICER, WARD-2, BHUJ. ( */ APPELLANT) VS. VIJAYNAGAR BHUJ OWNERS ASSOCIATION, VIJAYNAGAR SHOPPING CENTRE, KALOATARU APARTMENT, HOSPITAL ROAD, BHUJ-KUTCH. PAN : AAAJV0663L.. +,*/ RESPONDENT C.O. NO. 41/RJT/2011. / ASSESSMENT YEAR:2005-06. VIJAYNAGAR BHUJ OWNERS ASSOCIATION, VIJAYNAGAR SHOPPING CENTRE, KALPATARU APARTMENT, HOSPITAL ROAD, BHUJ-KUTCH. PAN : AAAJV0663L. ( */ APPELLANT) VS. THE INCOME TAX OFFICER, WARD-2, BHUJ. .. +,*/ RESPONDENT - / REVENUE BY SHRI M. K. SINGH, D.R /- / ASSESSEE BY SHRI KALPESH DOSHI, C.A. - / DATE OF HEARING 07-06-2012 - / DATE OF PRONOUNCEMENT 13 -07-2012 / / / / ORDER . .. . . . . . , , , , / T. K. SHARMA, J. M. THIS APPEAL BY THE REVENUE AND CROSS OBJECTION BY THE ASSESSEE AGAINST THE ORDER DATED 10-03-2011 OF CIT-XX, AHMEDABAD FOR THE ASSESSMENT YEAR 2005-0 6. 2. BRIEFLY STATED, THE FACTS ARE THAT ASSESSEE IS A N OWNERS ASSOCIATION. THE MAIN OBJECT OF ASSOCIATION WAS TO RECONSTRUCT THE O FFICES WHICH WERE DAMAGED ITA 205 & CO.41/RJT/2011 2 AFTER DESTRUCTIVE EARTHQUAKE IN BHUJ. FOR THE ASSE SSMENT YEAR UNDER APPEAL, THE ASSESSEE ASSOCIATION FILED THE RETURN OF INCOME DEC LARING TOTAL INCOME OF RS.3,112/-. THE AO FRAMED THE ASSESSMENT U/S.143(3) ON 23-11-2009 WHEREIN HE TREATED THE CREDIT APPEARING IN THE FOLLOWING NA MES AMOUNTING TO RS.20,32,000/- AS AN UNEXPLAINED AND ADDED THE SAME TO THE TOTAL INCOME OF THE ASSESSEE, THE DETAIL OF WHICH IS AS UNDER:- SR, NO. NAME AMOUNT (RS.) 1. BHARAT V. THACKER 1,10,000/- 2. SHRI CHANDRAKANT V. KATA 2,00,000/- 3. DR. MERRY RAJARAM 50,000/- 4. DR. HEMANT RAJARAM 1,00,000/- 5. KUMAR G. SHAH, BHUJ 1,85,000/- 6. NARENDRA HIRALAL BARMEDA 1,20,000/- 7. RAMILABEN R. THACKER 1,60,000/- 8. SMT. ROHINI VAIRAGI 1,50,000/- 9. SMT. JASODABEN JERAM 50,000/- 10. THACKER DILIPBHAI K. 25,000/- 11. NARAN RAKHIA AHIR 3,50,000/- 12. SHIVJI NARAN AHIR 2,50,000/- 13. SHANKAR NARAN AHIR 2,00,000/- 14. RAJUBHA BHOJUBHA JADEJA. 82,000/- TOTAL:- 20,32,000/ 3. ON APPEAL, BEFORE THE LD. CIT(A), THE ASSESSEE F URNISHED VARIOUS DETAILS TO PROVE THE GENUINENESS OF CASH CREDIT IN TERMS OF ID ENTITY, GENUINENESS AND CREDITWORTHINESS OF ALL THE OFFICE OWNERS WHICH ARE TABULATED BY THE LD. CIT(A) IN THE IMPUGNED ON PAGES 15 TO 26. APART FROM THIS, BE FORE THE LD. CIT(A), ASSESSEE RELIED ON THE FOLLOWING DECISIONS:- (1) METACCHEM INDUSTRIES 245 ITR 160 MP (2) NEMI CHAND KOTHARI 264 ITR 254 (GAUHATI) (3) ACIT VS. SHRI HARENDRA M. KARIA (ITA NO.1138/R JT/09) ITA 205 & CO.41/RJT/2011 3 (4) CIT VS. ORISSA CORPORATION (P) LTD.159 ITR 78 (SC) (5) DCIT VS.ROHINI BUILDERS 256 ITR 360 (GUJARAT) (6) ACIT VS.RADHEY SHYAM BANSAL 68 TTJ 136, RAJKOT (7) CIT VS. MEHROTRA BROTHERS 270 ITR 157 (MP) (8) RAJARAM RAJENDRA BHANDARI & PARTY VS. ACIT 95 TTJ 97 (JP) (9) MOHANLAL BUBNA BROS. (1994) 120 TAXATION 75 (D EL-TRIB) (100) 4. BEFORE THE LD. CIT(A), IT WAS ALSO CONTENDED THA T AO HAS NOT CONSIDERED THE PRINCIPLE OF MUTUALITY IN MAKING THE ADDITION FOR THE DEPOSITS RECEIVED FROM THE MEMBERS OF THE ASSOCIATION. THE ASSESSEE-VIJAY NAGAR BHUJ OWNERS ASSOCIATION (AOP) WAS FORMED BY 26 OWNERS OF SHOP I N VIJAYNAGAR SHOPPING CENTRE WHOSE OFFICES ERE COMPLETE COLLAPSED DUE TO THE EARTHQUAKE ON 26 TH JANUARY, 2001 AND TO RECONSTRUCT THE SAME THE ASSOC IATION ACCEPTED THE LOAN AND CARRIED OUT THE CONSTRUCTION. 5. AFTER CONSIDERING THE VARIOUS SUBMISSIONS, IN TH E IMPUGNED ORDER, FOR THE DETAILED REASONS GIVEN IN PARA-3.3, THE LD. CIT(A) DELETED THE ADDITION OF RS.19,07,000/- AND CONFIRMED THE BALANCE ADDITION T O THE EXTENT OF RS.1,25,000/-. THE PARTY WISE DETAIL OF ADDITION CONFIRMED AND DEL ETED IS AS UNDER:- SR.NO. NAME OF CREDITORS AMOUNT ADDED BY AO AMOUNT .ADDED BY CIT(A) AMT CONFIRMED BY CIT(A) .1. BHARATBHAI V. THACKER 1,10,000 1,00,000 - 2. LATE CHANDRAKANT KATA 2,00,000 2,00,000 - 3. DR MERRY RAJARAM 50,000 - 50,000 4. DR. HEMANT RAJARAM 1,00,000 1,00,000 - 5. KUMAR G. SHAH 1,85,000 1,85,000 - 6. NARENDRA HIRALAL BARMEDA 1,20,000 1,20,000 - 7. RAMILABEN R. THAKER 1,60,000 1,60,000 - 8. SMT. ROHINI VAIRAGI 1,50,000 1,50,000 - 9. SMT. JASODABEN JERAM 50,000 - 50,000 10 THACKER DILIPBHAI K. 25,000 - 25,000 11 NARAN R AKHIA AHIR 3,50,000 3,50,000 - 12 SHIVJI NARAN AHIR 2,50,000 2,50,000 - 13 SHANKAR NARAN AHIR 2,00,000 2,00,000 - 14 RAJUBHA BHOJUBHA JADEJA 82,000 82,000 - TOTAL : 20,32,000 19,07,000 1,25,000 ITA 205 & CO.41/RJT/2011 4 AGGRIEVED WITH THE ORDER OF LD. CIT(A) DELETING THE ADDITION TO THE EXTENT OF RS.19.07 LACS, THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. ASSESSEE HAS ALSO FILED THE CROSS OBJECTION AGAINST CONFIRMING THE AD DITION TO THE EXTENT OF RS.1,25,000/-. 6. AT THE TIME OF HEARING BEFORE US, ON BEHALF OF R EVENUE, SHRI M. K. SINGH, D.R. APPEARED AND RELYING ON THE REASONING GIVEN BY AO, CONTENDED THAT BEFORE THE AO. ASSESSEE FAILED TO PROVE CAPACITY TO MAKE D EPOSIT. THEREFORE, ADDITION OF RS.20,32,000/-WAS RIGHTLY MADE AND LD. CIT(A) IS NOT JUSTIFIED IN DELETING THE ADDITION TO THE EXTENT OF RS.19.07 LACS. AS AGAINS T THIS, SHRI KALPESH DOSHI, C.A. APPEARED ON BEHALF OF THE ASSESSEE VEHEMENTLY SUPPO RTED THE ORDER OF LD. CIT(A). HE POINTED OUT THAT THERE IS NO JUSTIFICAT ION EVEN FOR SUSTAINING THE ADDITION TO THE EXTENT OF RS.1,25,000/-. 7. AFTER HEARING BOTH THE SIDES, WE HAVE CAREFULLY GONE THROUGH THE ORDER OF THE AUTHORITIES BELOW. IT IS PERTINENT TO NOTE THA T VIJAYNAGAR SHOPPING CENTRE WAS BUILT UP BY BHUJ NAGARPALIKA, BHUJ UNDER THE SCHEME IDSMT FOR 44 SHOPS. HOWEVER, DUE TO THE SEVER EARTHQUAKE ON 26 TH JANUARY, 2001, OFFICES FROM 1 TO 18 WAS DAMAGED TREMENDOUSLY AND OFFICES FROM19 TO 44 W ERE COMPLETELY COLLAPSED. THE OFFICES FROM 1 TO 18 WERE REPAIRED BY THE OWNER S OF THE SHOP. SINCE THE NAGARPALIKA OF BHUJ WAS NOT RECONSTRUCTING THE BUIL DING, THE ASSESSEE- ASSOCIATION FORMED BY 26 OWNERS OF SHOP IN VIJAYNAG AR SHOPPING CENTRE WHOSE OFFICES COMPLETELY COLLAPSED AND TO RECONSTRUCT THE SAME FOR THE PURPOSE OF BUSINESS. FOR THIS PURPOSE, THEY HAVE ENTERED INTO AGREEMENT WHICH IS AVAILABLE ON RECORD. IN PARA-3.3 OF THE IMPUGNED ORDER, THE LD. CIT(A) DISCUSSED THE CASE OF EACH AND EVERY CREDITOR KEEPING IN VIEW THE PROV ISIONS CONTAINED IN SEC.68 OF THE I.T. ACT, 1961 AND DELETED THE ADDITION TO THE EXTENT OF RS.19.07 LACS AND CONFIRMED THE BALANCE ADDITION OF RS.1,25,000/- IN RESPECT OF THREE OFFICE OWNERS. IN OUR CONSIDERED OPINION, THE LD. CIT(A) HAS GIVEN COGENT REASON FOR DELETING THE ADDITION OF RS.19.07 LACS AND CONFIRMED THE BALANCE OF RS.1,25,000/-. WE THEREFORE, INCLINED TO UPHOLD THE ORDER OF LAD. CIT (A). ITA 205 & CO.41/RJT/2011 5 8. IN THE RESULT, THE APPEAL OF THE REVENUE AS WELL AS CROSS OBJECTION FILED BY THE ASSESSEE ARE DISMISSED. THIS ORDER IS PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED HEREINABOVE. SD/- SD/- ( .. / D. K. SRIVASTAVA) ( .. / T. K. SHARMA) / ACCOUNTANT MEMBER /JUDICIAL MEMBER 3/ ORDER DATE 13-07-2012. /RAJKOT NVA/- - -- - +4 +4 +4 [phone] / COPY OF ORDER FORWARDED TO:- 1. * / APPELLANT-THE INCOME-TAX OFFICER, WARD-2, BHUJ. 2. +,* / RESPONDENTVIJAYNAGAR BHUJ OWNERS ASSOCIATION, B HUJ.. 3. : / CONCERNED CIT-I, RAJKOT. 4. :- / CIT (A)-XX, AHMEDABAD... 5. 4 +, , / DR, ITAT, RAJKOT. 6. / GUARD FILE. / BY ORDER , ASSTT. REGISTRAR , INCOME TAX APPELLATE TRIBUNAL, RAJKOT.