Shri Kailash Kumar Hakim,HUF, Surat V. The Income tax Officer,Ward-2(3), Surat

CO 75/AHD/2010

• Counselvise Citation: [2012] 122 COUNSELVISE.COM (IT) 7287 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 3 month(s) 22 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 22-06-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2006-2007
• Appeal Filed On: 02-03-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: H P MEENA
• Assessee Lawyers: MUKUL JALAN
• Keywords: Unexplained cash credit
• Section: 143(3); 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH AHMEDABAD (BEFORE SHRI G. C. GUPTA, VP AND SHRI A. MOHAN ALAN KAMONY, AM) ITA NO.217/AHD/2010 A. Y.: 2006-07 THE INCOME TAX OFFICER, WARD 2(3), ROOM NO.118, 1 ST FLOOR, AAYAKAR BHAVAN, MAJURA GATE, SURAT VS SHRI KAILASH KUMAR HAKIM(HUF), PROP.OF RASHI SILK MILLS, E- 3672, RAGHUKUL MARKET, RING ROAD, SURAT PA NO. AAEHK 4489 H (APPELLANT) (RESPONDENT) C. O. NO.75/AHD/2010 (IN ITA NO.217/AHD/2010- AY.2006-07) SHRI KAILASH KUMAR HAKIM (HUF), PROP.OF RASHI SILK MILLS, E- 3672, RAGHUKUL MARKET, RING ROAD, SURAT PA NO. AAEHK 4489 H VS THE INCOME TAX OFFICER, WARD 2(3), ROOM NO.118, 1 ST FLOOR, AAYAKAR BHAVAN, MAJURA GATE, SURAT (CROSS OBJECTOR) (RESPONDENT) DEPARTMENT BY SHRI H. P. MEENA, SR. DR ASSESSEE BY SHRI MUKUL JALAN, AR DATE OF HEARING: 21-06-2012 DATE OF PRONOUNCEMENT: 22-06-2012 O R D E R PER A. MOHAN ALANKAMONY: THESE ARE THE CROSS APPEALS ONE BY THE REVENUE AND THE OTHER BY THE ASSESSEE ARISIN G OUT OF THE ORDER OF THE LEARNED CIT(A)-II, SURAT IN APPEAL NO.CAS/II /348/08-09 DATED 07-10-2009 PASSED U/S 143(3) READ WITH SECTION 250 OF THE IT ACT FOR ASSESSMENT YEAR 2006-07. ITA NO.217/AHD/2010 & C. O. NO.75/AHD/2010 (AY: 200 6-07) SHRI KAILASH KUMAR HAKIM (HUF) 2 2. THE REVENUE HAS RAISED THREE GROUNDS IN ITS APPE AL WHEREIN GROUNDS NO.2 AND 3 ARE GENERAL IN NATURE AND DO NOT SURVIVE FOR ADJUDICATION. GROUND NO.1 OF THE APPEAL IS REPRODUC ED HEREIN BELOW: (1) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION M ADE BY THE AO OF RS.7,16,930/- ON ACCOUNT OF UNEXPLAINED CASH CREDIT U/S. 68 OF THE ACT. 3. THE CROSS OBJECTION IS FILED BY THE ASSESSEE ON THE SAME ISSUE SUPPORTING THE ORDER OF THE LEARNED CIT(A). 4. THE ASSESSEE IS A HUF FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2006-07 ON 29-12-2006 DECLARING TOT AL INCOME AT RS.2,14,651/-. THE CASE WAS TAKEN UP FOR SCRUTINY A ND ORDER U/S 143(3) OF THE ACT WAS PASSED BY THE LEARNED AO ON 1 9-12-2008 WHEREIN ALONG WITH CERTAIN ADDITIONS, AN ADDITION O F RS.7,16,930/- WAS MADE U/S 68 OF THE ACT BEING UNEXPLAINED CASH CREDI T. IT WAS OBSERVED BY THE LEARNED AO THAT THE ASSESSEE DID NO T PRODUCE THE CREDITORS FOR PERSONAL EXAMINATION OR FURNISHED ANY DETAILS TO PROVE CREDITWORTHINESS WITH RESPECT TO THE FOLLOWING PERS ONS: 1. SMT. SUPYAR GAJJAR RS. 50,000/- 2. SHRI NARSH PANSARI RS.2,30,000/- 3. NARAYAN PRASAD GAJJAR RS. 50,000/- 4. GUDDU HAKIM RS.1,61,585/- 5. BABITA HAKIM RS.1,25,345/- 6. PUSPADEVI PANSARI RS.1,00,000/- TOTAL RS. 7,16,930/- ITA NO.217/AHD/2010 & C. O. NO.75/AHD/2010 (AY: 200 6-07) SHRI KAILASH KUMAR HAKIM (HUF) 3 FURTHER, IT WAS NOTICED THAT THESE CREDITORS HAD DE POSITED CASH IN THEIR BANK ACCOUNTS AND CHEQUES WERE ISSUED TO THE ASSESS EE. THE ASSESSEE OR THE DEPOSITORS DID NOT COME FORWARD TO FURNISH ANY SATISFACTORY REPLY FOR SUCH CASH DEPOSITS MADE BY T HE CREDITORS OF THE ASSESSEE WHO HAD IN TURN ISSUED CHEQUES TO THE ASSE SSEE. THEREFORE, THE LEARNED AO TREATED THE AGGREGATE AMO UNT OF RS.7,16,930/- AS UNEXPLAINED CASH CREDIT U/S 68 OF THE ACT. 5. THE ASSESSEE CARRIED THE MATTER BEFORE THE LEARN ED CIT(A). THE LEARNED CIT(A) DELETED THE ADDITION MADE BY THE AO BASED ON THE FOLLOWING FINDINGS: 4. I HAVE CAREFULLY CONSIDERED BOTH THE POSITIONS. IN THE WRITTEN FURNISHED IN COURSE OF THE APPELLATE PROCEE DINGS, THE AR HAS CONTENDED THAT THE FOLLOWING DOCUMENTARY EVIDEN CES WERE FURNISHED BEFORE THE AO: (I) CONFIRMATION OF ACCOUNT, DULY SIGNED BY THE LEN DING PARTY. (II) COPIES OF IT RETURNS FILED BY THE LENDERS (OF AY: 2 006-07) (III) COPIES OF BALANCE SHEETS FILED WITH THE IT DE PARTMENT BY THE LENDERS. (IV) COPIES OF BANK STATEMENTS OF LENDERS, REFLECTI NG THE TRANSACTIONS OF LENDING. (V) COPIES OF CASHBOOKS OF THE LENDERS. ADDITIONALLY, THE AR HAS NOW FURNISHED NOTARIZED AFFIDAVITS FROM THE LENDERS. IT HAS BEEN CERTIFIED BY THE AR THAT ALL SUCH DOCUMENTS WERE DULY FURNISHED BEFORE THE A O IN ASSESSMENT PROCEEDINGS, WHICH IS IN CONTRADICTION T O THE OBSERVATION OF THE AO IN ASSESSMENT ORDER (PAGE 4) THAT NO DETAILS WAS FURNISHED TO PROVE THE CREDITWORTHINESS OF THE ALLEGED DEPOSITORS. HOWEVER, HIS OBSERVATION THAT C ASH HAD BEEN DEPOSITED IN THE BANK ACCOUNT OF THE DEPOSITOR S BEFORE ISSUING CHEQUES IN FAVOUR OF THE ASSESSEE, INDICATE D THAT BANK ITA NO.217/AHD/2010 & C. O. NO.75/AHD/2010 (AY: 200 6-07) SHRI KAILASH KUMAR HAKIM (HUF) 4 STATEMENTS OF THE DEPOSITORS WERE FURNISHED. THIS W OULD ALSO MEAN THAT OTHER DOCUMENTS INCLUDING CONFIRMATION LE TTERS AS CLAIMED BY THE AR WERE ALSO FURNISHED. THE POINT TO NOTE IS THAT, WHILE THE AO ACCEPTED THE GENUINENESS OF THE LOANS FROM THREE CREDITORS RAMESH KUMAR LUHARKA HUF, LALITADEV I LUHARKA, AND RAJKUMAR RATHI SIMPLY ON THE GROUND TH AT CONFIRMATION LETTERS WERE FURNISHED FROM THEM WHILE NOT MENTIONING THE AMOUNTS OF LOAN TAKEN FROM THEM, THE RE WAS NO REASON FOR HIM NOT TO ACCEPT THE GENUINENESS OF THE LOANS FROM THE REMAINING SIX CREDITORS FROM WHOM ALSO CONFIRMA TION LETTERS WERE FURNISHED GIVING THEIR COMPLETE ADDRESSES, ACC OUNT CONFIRMATIONS, COMPUTATION OF INCOME, BALANCE SHEET S ETC. COPIES OF CAPITAL ACCOUNTS AND BANK ACCOUNTS WERE A LSO FURNISHED. THE AO HAS THUS DEALT WITH THE ISSUE IN A VERY SUMMARY MANNER. HE FAILED TO CONDUCT THE REQUISITE INQUIRIES WITH THE ALLEGED DEPOSITORS, SOME OF WHOM ARE BASED IN SURAT. GIVEN SUCH FACTS AND CIRCUMSTANCES OF THE CASE, I H AVE NO OTHER OPTION BUT TO TAKE THE VIEW THAT THERE WAS NO BASIS FOR THE AO TO TREAT THE LOANS FROM SMT. SUPYAR GAJJAR (RS.5 0,000), SHRI NARESH PANSARI (RS.2,30,000), NARAYAN PRASAD GAJJAR (RS.50,000), GUDDU HAKIM (RS.1,61,585), BABITA HAKI M (RS.1,25,345), AND PUSHPADEVI PANSARI (RS.1,00,000) , TOTALING TO RS.7,16,930/- AS UNEXPLAINED CASH CREDITS UNDER THE PROVISIONS OF SECTION 68 OF THE ACT. HE IS DIRECTED TO DELETE THE SAID ADDITION. 6. THE LEARNED DR SUPPORTED THE ORDER OF THE LEARNE D AO AND THE LEARNED AR RELIED ON THE ORDER OF THE LEARNED CIT(A ). 7. WE HAVE HEARD BOTH THE PARTIES AND CAREFULLY PER USED THE MATERIALS AVAILABLE BEFORE US. THE LEARNED CIT(A) D ELETED THE ADDITION MADE BY THE LEARNED AO DUE TO THE FOLLOWING REASONS : (I) THE ASSESSEE HAD FURNISHED NOTARIZED AFFIDAVITS FROM THE LENDERS. ITA NO.217/AHD/2010 & C. O. NO.75/AHD/2010 (AY: 200 6-07) SHRI KAILASH KUMAR HAKIM (HUF) 5 (II) CONFIRMATIONS LETTERS FROM THE LENDERS WERE AL SO FURNISHED. (III) THE LEARNED AO HAD ACCEPTED THE LOAN TRANSACT IONS FROM SOME OF THE CREDITORS BASED ON THE CONFIRMATION LET TERS AND THEREFORE, THERE WAS NO REASON FOR HIM TO DOUBT THE GENUINENESS OF THE OTHER LENDERS. (IV) THE LEARNED AO HAD FAILED TO CONDUCT REQUISITE ENQUIRIES OF THE LENDERS MORE SO WHEN THEIR NAMES, ADDRESSES AND P. A. NUMBERS WERE FURNISHED BY THE ASSESSEE. (V) IT APPEARED THAT THE LEARNED AO HAD DEALT WITH THE ISSUE IN A VERY SUMMARY MANNER. BEFORE US, THE LEARNED AR SUBMITTED THAT THE ASSESS EE HAD PRODUCED ALL THE PARTICULARS OF THE LENDERS INCLUDING THEIR P. A. NUMBERS AND ADDRESSES ETC. BEFORE THE LEARNED AO; HOWEVER, THE LEARNED AO HAD REJECTED THE SAME SUMMARILY AND MADE THE ADDITION. ON PERUSING THE PAPER BOOK SUBMITTED BY THE ASSESSEE WE FIND TH AT THE ASSESSEE HAD SUBMITTED ALL THE PARTICULARS OF THE LENDERS WH ICH IS EVIDENT FROM THE PAPER BOOK FILED BEFORE US RUNNING FROM PAGE 1 TO PAGE 52 AND WERE FURTHER VOUCHED BY THE LEARNED CIT(A). CONSIDE RING THE OVER ALL FACTS OF THE CASE, WE ARE OF THE OPINION THAT THE O RDER OF THE LEARNED CIT(A) NEED NOT TO BE INTERFERED AT THIS STAGE. THE REFORE, WE HEREBY UPHOLD THE ORDER OF THE LEARNED CIT(A) AND DELETE T HE ADDITION MADE BY THE LEARNED AO ON ACCOUNT OF UNEXPLAINED CASH CR EDIT FOR RS.7,16,930/-. ACCORDINGLY, WE HEREBY DISMISS THE APPEAL OF THE REVENUE. ITA NO.217/AHD/2010 & C. O. NO.75/AHD/2010 (AY: 200 6-07) SHRI KAILASH KUMAR HAKIM (HUF) 6 8. SINCE WE HAVE DECIDED THE GROUND RAISED BY THE R EVENUE IN FAVOUR OF THE ASSESSEE, THE CROSS OBJECTION FILED B Y THE ASSESSEE HAS BECOME REDUNDANT AND THE SAME IS DISMISSED AS S UCH. 9. IN THE RESULT, THE APPEAL OF THE REVENUE AND THE CROSS OBJECTION FILED BY THE ASSESSEE, BOTH ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 22-06-2012 SD/- (G. C. GUPTA) VICE PRESIDENT SD/- (A. MOHAN ALANKAMONY) ACCOUNTANT MEMBER LAKSHMIKANT DEKA/- COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE BY ORDER DY. REGISTRAR, ITAT, AHMEDABAD 1. DATE OF DICTATION: 21-06-2012 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE T HE DICTATING MEMBER: 21-06-2012 OTHER MEMBER: 3. DATE ON WHICH APPROVED DRAFT COMES TO THE SR. P. S./P.S.: 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE TH E DICTATING MEMBER FOR PRONOUNCEMENT: 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE S R. P.S./P.S.: 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK: 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK: 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER: 9. DATE OF DESPATCH OF THE ORDER: