COMMISSIONER OF INCOME TAX - RAJKOT - I V. AYACHI CHANDRASHEKHAR NARSANGJI

TAXAP/992/2013

AI Insights

The case revolves around a dispute concerning the addition of Rs. 1.45 Crores as unexplained cash credit under Section 68 of the Income Tax Act, 1961, by the Assessing Officer during the assessment of Ayachi Chandrashekhar Narsangji for the Assessment Year 2006-07. The addition was initially contested and deleted by the CIT(A) after considering the explanations and documents provided by the assessee, including a confirmation letter from the lender, Shri Ishwar Adwani. The ITAT upheld the CIT(A)'s decision, leading to the present appeal by the revenue before the Gujarat High Court. The primary legal contention was whether the ITAT erred in law and fact in deleting the addition made by the Assessing Officer.

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 728627 (HC-GUJARAT)
• Appeal Type: Others
• Pronouncement Date: 02-12-2013
• Assessment Year: misc
• Laws Referred To: Income Tax Act
• Result in Favour of: Others
• Court: HIGH COURT
• Assessee Lawyers: PRANAV DESAI
• Keywords: Creditworthiness; Genuineness of transaction; Loan; Repayment; Unexplained cash credit
• Section: 143(3); 68

Judgement Text

"O/TAXAP/992/2013 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD TAX APPEAL NO. 992 of 2013 FOR APPROVAL AND SIGNATURE: HONOURABLE MR.JUSTICE M.R. SHAH and HONOURABLE MR.JUSTICE R.P.DHOLARIA ====================================== 1 Whether Reporters of Local Papers may be allowed to see the judgment ? 2 To be referred to the Reporter or not ? 3 Whether their Lordships wish to see the fair copy of the judgment ? 4 Whether this case involves a substantial question of law as to the interpretation of the Constitution of India, 1950 or any order made thereunder ? 5 Whether it is to be circulated to the civil judge ? ====================================== COMMISSIONER OF INCOME TAX - RAJKOT - I....Appellant(s) Versus AYACHI CHANDRASHEKHAR NARSANGJI....Opponent(s) ====================================== Appearance: MR PRANAV G DESAI, ADVOCATE for the Appellant(s) No. 1 ====================================== CORAM: HONOURABLE MR.JUSTICE M.R. SHAH and HONOURABLE MR.JUSTICE R.P.DHOLARIA Date : 02/12/2013 ORAL JUDGMENT (PER : HONOURABLE MR.JUSTICE M.R. SHAH) Page 1 of 4 O/TAXAP/992/2013 JUDGMENT 1. Being aggrieved and dissatisfied with the impugned judgment and order passed by the Income Tax Appellate Tribunal (hereinafter referred to as ‘ITAT’) dated 21/06/2013 in ITA No. 1010/Rjt/2010 for the Assessment Year 2006-07, the revenue has preferred by the present Tax Appeal with the following proposed substantial question of law; “Whether the ITAT is erred in law as well as on facts in deleting the addition of Rs.1.45 Crores added by the Assessing Officer as unexplained cash credit under Section 68 of the Income Tax Act?” 2. The assessee filed the return of income for the Assessment Year 2006-07 declaring the total income at Rs.39,10,790/-. The Assessing Officer framed the assessment under Section 143(3) of the Income Tax Act on 22/12/2008 at the total income of Rs.1,84,10,790/- wherein he made the addition of Rs.1,45,00,00 under Section 68 of the Income Tax Act on the ground that the loan taken from Shri Ishwar Adwani (out of Rs.1.6 Crores) was not explained satisfactorily. 3. On appeal before the CIT(A) the assessee reproduced the letter dated 22/12/2008 written by the assessee to the Assessing Officer alongwith the confirmation letter of Shri Ishwar Adwani submitting that he had given loan of Rs.1,45,00,000/- to the assessee by cheques and considering the same and considering the fact that the aforesaid loan amount of Rs.1,45,00,000/- came to be repaid to said Shri Ishwar Adwani in the next assessment year and considering the identity of the donors, creditworthiness and the Page 2 of 4 O/TAXAP/992/2013 JUDGMENT genuineness of the loan transactions, CIT(A) deleted the additions made by the Assessing Officer. 4. Being aggrieved and dissatisfied with the order passed by the CIT(A) in deleting the addition of Rs.1,45,00,000/- made by the Assessing Officer under Section 68 of the Income Tax Act on the ground that the loan taken from Shri Ishwar Adwani was not explained satisfactorily, the revenue preferred appeal before the ITAT and by impugned judgment and order, ITAT dismissed the appeal preferred by the revenue confirming the order passed by the CIT(A) deleting the aforesaid addition. Being aggrieved and dissatisfied with the impugned judgment and order passed by the ITAT, the revenue has preferred the present Tax Appeal with the aforesaid substantial question of law; 5. Heard Shri Pranav Desai, learned Counsel appearing on behalf of the revenue. The only contention on behalf of the revenue is that on the last day of passing the order, communication dated 22/12/2008 of the assessee alongwith the confirmation letter of Shri Ishwar Adwani confirming the loan/advance of Rs.1,45,00,000/- given to the assessee, was produced before the Assessing Officer i.e. on the day the Assessing Officer passed the order and thereafter the same was reproduced before the CIT(A) and the CIT(A) considered the same, the CIT(A) ought to have remanded the matter to enable the Assessing Officer to hold further inquiry and, therefore, it is requested to admit/allow the present Tax Appeal. 6. Having heard Shri Pranav Desai, learned Counsel Page 3 of 4 O/TAXAP/992/2013 JUDGMENT appearing on behalf of the revenue and on perusal of the order passed by the CIT(A) confirmed by the ITAT, it appears that CIT(A) was satisfied with respect to the genuineness of the transaction and creditworthiness of Shri Ishwar Adwani and, therefore, deleted the addition of Rs.1,45,00,000/- made by the Assessing Officer. It is required to be noted that as such an amount of Rs.1,00,00,000/- vide cheque no. 102110 and an amount of Rs.60 lakhs vide cheque no. 102111 was given to the assessee and out of the total loan of Rs.1.60 Crores, Rs.15 lakhs vide cheque no. 196107 was repaid and, therefore, an amount of Rs.1,45,00,000/- remained outstanding to be paid to Shri Ishwar Adwani. It has also come on record that the said loan amount has been repaid by the assessee to Shri Ishwar Adwani in the immediate next financial year and the Department has accepted the repayment of loan without probing into it. In the aforesaid facts and circumstances of the case, when the ITAT has held that the matter is not required to be remanded as no other view would be possible, we see no reason to interfere with the impugned order passed by the ITAT. No question of law, much less substantial question of law arises in the present Tax Appeal. Hence, the present Tax Appeal deserves to be dismissed and is accordingly dismissed. (M.R.SHAH, J.) (R.P.DHOLARIA,J.) Siji Page 4 of 4 "