The ACIT, Gandhidham Circle, GANDHIDHAM V. Shri Ayachi Chandrashekhar, GANDHIDHAM

ITA 1010/RJT/2010

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 67288 (ITAT-RAJKOT)
• Duration Of Justice: 2 year(s) 11 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-06-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 12-06-2013
• Assessment Year: 2006-2007
• Appeal Filed On: 29-06-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K C MATHEWS DR EN
• Assessee Lawyers: J C RANPURA CA N A
• Keywords: Principle of natural justice; Tangible material
• Section: 143(3)

Judgement Text

A I , H IN THE INCOME TAX APPELLATE TRIBU N AL; RAJKOT BENCH, RAJKOT. BEFORE SHRI T. K. SHARMA, JM AND SHRI D. K. SRIVASTAVA, AM IT A NO . 1010 / RJT/20 10 E / ASSESSMENT YEAR S 20 0 6 - 0 7 THE ACIT, GANDHIDHAM CIRCLE, GANDHIDHAM ( H / APPELLANT) VS. SHRI AYACHI CHANDRASHEKHAR, PROP. CARGO CONVEYORS, BBZ - N - 66, GANDHIDHAM - KUTCH PAN : ABUPA 6576 E UH / RESPONDENT 6 N / REVENUE BY SHRI K C MATHEWS, DR EN / ASSESSEE BY SHRI J C RANPURA, CA N A /DATE OF HEARING 12 . 0 6 .2013 N A / DATE OF PRONOUNCEMENT 21 . 06 . 2013 / ORDER . . [ , HPC / T. K. SHARMA, J. M . : THIS APPEAL FILED BY THE REVENUE IS AGAINST THE ORDER DATED 24 .0 2 .201 0 OF LD . CIT (A) - I I , RAJKOT, DELETING THE ADDITION OF RS. 1.45 CRORES MADE BY THE ASSESSING OFFICER U/S. 68 OF THE INCOME - TAX ACT, 1961. 2. THE FACTS IN BRIEF ARE THAT THE ASSESSEE IS AN INDIVIDUAL. FOR THE ASSESSMENT YEAR UNDER APPEAL, HE FILED THE RETURN OF INCO ME ON 30.03.2007 , DECLARING TOTAL INCOME AT RS.39,10,790/ - . THE ASSESSING OFFICER FRAMED ASSESSMENT U/S 143(3) OF THE INCOME - TAX ACT ON 22.12.2008 AT T OTAL INCOME OF RS.1,84,10,790/ - , WHEREIN HE MADE ADDITION OF RS.1 .45 CRORES U/S. 68 OF THE INCOME - TAX AC T ON THE GROUND THAT LOAN TAKEN FROM MR. ISHWAR ADWANI (OUT OF RS.1.6 CRORES ) WAS NOT EXPLAINED SATISFACTORILY. 3. ON APPEAL BEFORE THE LD CIT(A) , THE ASSESSEE PUT FORWARD VARIOUS ARGUMENTS WHICH ARE REPRODUCED BY THE LD CIT(A) IN PARA (B) ON PAGE 3 OF T HE IMPUGNED ORDER. IN PARA (C) ON PAGE 5 OF THE IMPUGNED ORDER, THE LD CIT(A) ANALYZED THE RIVAL SUBMISSIONS AND REPRODUCED A LETTER DATED 22.12.2008 WRITTEN 1010 - RJT - 2010 SHRI AYACHI CHANDRASHEKHAR 2 BY THE ASSESSEE TO THE ASSESSING OFFICER AND THEREAFTER HE DELETED ADDITION AFTER EXAMINING THE F OLLOWING THREE CONDITIONS NAMELY (I) IDENTITY OF DONORS; (II) CREDITWORTHINESS OF DONORS; & (III) GENUINENESS OF LOAN TRANSACTIONS. THE LD CIT(A) HAS ALSO CONSIDERED THE RATIO LAID DOWN BY THE FOLLOWING PRONOUNCEMENTS: - A ) NEMICHAND KOTHARI VS. CIT (2003) 26 4 ITR 254 (GAU.) B ) SHANKER INDUSTRIES VS. CIT (1978) 114 ITR 689 (CAL.) C ) C. KANT & CO. VS. CIT (1980) 126 ITR 63 (CAL.) D ) ROHINI BUILDERS 256 ITR 360 (GUJARAT) (HC) E ) MOHANLAL BUBNA BROS (1994) 120 TAXATION 75 (DEL - TRIB) [100] F ) BALDAWA BUILDERS (P) LTD VS. ITO (20 02) 29 DTC 288 (JOD - TRIB)[111 ] G ) CIT VS. ANAND PRAKASH GOENKA (1995) 52 ITD 73 (CAL - TRIB) H ) SHYMLAL S. WADHANI ITA 440/RJT/2004 AY 1998 - 99 I ) S. HASTIMAL VS. CIT 49 ITR 273, 279 (MAD) J ) TOLARAM DAGA 59 ITR 632 K ) CIT VS. ORISSA CORPORATION (P) LTD 159 ITR 78 (SC) L ) AC IT VS. RADHEY SHYAM BANSAL 68 TTJ 136, RAJKOT M ) RAJIBEN WADHWANI ITA NO.203/RJT/2002 N ) CIT VS MEHROTRA BROTHERS 270 ITR 157 (MP) O ) RAJARAM R AJENDER BHANDARI & PARTY VS. ACIT 95 TTJ 97 (JP) P ) ACIT VS. SWAMI COMPLEX (P) LTD. 111 TTJ 531 (JP) Q ) CIT VS. SHREE GOPAL & CO . 204 ITR 285 (GAU) O N THE STRENGTH OF THE ABOVE LEGAL PRONOUNCEMENTS, THE LD CIT(A) HAS HELD THAT THE ASSESSEE MET EACH ONE OF THE INGREDIENTS REQUIRED FOR PROVING THE CASH CREDIT AS GENUINE. THE REASON GIVEN BY THE LD CIT(A) IS AS UNDER: - IDENTITY OF THE CREDITOR: IN THE INSTANT CASE, THE ADDRESS OF THE CREDITOR AS WELL AS HIS CONTACT PHONE NUMBER WERE GIVEN. A COPY OF PASSPORT WAS ALSO PRODUCED. CONFIRMATION WAS ALSO SUBMITTED. ON EXAMINATION OF THESE MATERIALS, I DO NOT HAVE ANY DOUBT OF ANY NAT URE REGARDING THE IDENTITY OF THE CREDITOR, AS IDENTITY WAS FULLY PROVED ON RECORD. CREDITWORTHINESS OF THE CREDITOR: THE CREDITOR FILED THE DETAILS OF HIS BANK ACCOUNTS. THE PERUSAL OF BANK ACCOUNTS REVEALED THAT THERE HAD BEEN SERIES OF CHEQUES/TRANS FER OF TRANSACTIONS INVOLVING SUBSTANTIAL AMOUNTS. HE HAS BEEN RESIDING AND ALSO DOING GOOD BUSINESS IN DUBAI FOR LAST 15 YEARS, AS EVIDENCED BY QUANTUM OF TRANSACTIONS FOUND IN THE BANK STATEMENTS. GENUINENESS OF THE TRANSACTION OF LOAN: THE AMOUNT OF L OAN WAS RECEIVED BY WAY OF CHEQUES. CONFIRMATION WAS ALSO FURNISHED. A SUM OF RS.15 LAKH WAS ALSO RETURNED TO THE CREDITOR ON 10.09.2005 BY CHEQUE NO.196107, THOUGH THE TOTAL AMOUNT OF LOAN WAS RS.1.6 CRORE. THE A.O. ADDED ONLY THE OUTSTANDING LOAN OF RS.1 .45 CRORE, 1010 - RJT - 2010 SHRI AYACHI CHANDRASHEKHAR 3 NOT RS.1.6 CRORE, THE LOAN AMOUNT, AS UNEXPLAINED, INDICATING THAT THE A.O. INDIRECTLY ACCEPTED THE LOAN TRANSACTION AS GENUINE. HAD HE FELT THAT THE SAID AMOUNT OF LOAN WAS NOT GENUINE, HE OUGHT TO HAVE ADDED THE WHOLE AMOUNT OF RS.1.6 CRORE. (CE) IN THE INSTANT CASE, THE APPELLANT FURNISHED ALL THE REQUIRED EVIDENCES TO PROVE THE GENUINENESS OF THE LOAN. BUT THE AO DID NOT BRING ANY TANGIBLE MATERIALS ON RECORD TO DISPROVE THE APPELLANTS CLAIM, EXCEPT STATING THAT THE APPELLANT DID NOT FURNIS H THE PARTICULARS. BUT, THERE LIES EVIDENCES TO SHOW THAT THE APPELLANT SUBMITTED THE PARTICULARS BEFORE THE A.O. ON THREE OCCASIONS. THOSE LETTERS CONTAINED THE ADDRESSES OF THE CREDITOR, AS WELL AS PHONE NUMBER OF THE SAID CREDITOR. THE A.O. COULD HAVE T ELEPHONICALLY CONTACTED HIM, OR HE COULD HAVE ISSUED COMMISSION TO IT AUTHORITY IN MUMBAI, WHERE THE LOCAL ADDRESS OF THE SAID CREDITOR WAS MENTIONED. THE LOAN CONFIRMATION AND OTHER DETAILS, SUCH AS ADDRESS OF CREDITOR, CONTACT NUMBER, AND PASSPORT COPY W ERE FURNISHED BEFORE THE A.O. ON 18/12/08, WHEREAS THE A.O. PASSED ORDER ON 22/12/08. AFTER HAVING OBTAINED THE SAID INFORMATION, THE A.O. COULD HAVE TAKEN EFFECTIVE STEPS TO DISPROVE THE APPELLANTS CONTENTIONS. (CF) KEEPING IN VIEW THE TOTALITY OF THE FACTS AND CIRCUMSTANCES OF THE CASE, AND AFTER CONSIDERING THE ENTIRE MATERIAL AVAILABLE ON RECORD, I AM OF THE OPINION THAT THE SAID LOAN WAS NOT ONLY GENUINE, BUT ALSO THE IDENTITY AND CAPACITY OF THE CREDITOR TO GIVE THE LOAN STOOD FULLY ESTABLISHED. I HOLD THAT THE APPELLANT COMPLETELY DISCHARGED HIS ONUS. THE ADDITION MADE U/S.68 IS HEREBY DELETED. AGGRIEVED BY THE ORDER OF LD CIT(A), THE REVENUE IS NOW IN APPEAL BEFORE THIS TRIBUNAL. 4 . AT THE TIME OF HEARING BEFORE US, ON BEHALF OF REVENUE SHRI K C MATHEWS, DR APPEARED AND CONTENDED THAT THE ASSESSING OFFICER FRAMED THE ASSESSMENT U/S 143(3) ON 22. 12.2008. ON THIS DATE, THE ASSESSEE FILED A LETTER DATED 22.12.2008 WHEREIN HE INCLUDED CONFIRMATION RECEIVED FROM MR.ISHWAR ADWANI AND OTHER DETAILS M ENTIONED IN THE SAID LETTER WHICH IS REPRODUCED BY THE LD CIT(A) ON PAGE 6 OF THE IMPUGNED ORDER. THE LD DEPARTMENTAL REPRESENTATIVE POINTED OUT THAT CONSIDERING THESE FACTS, THE LD CIT(A) OUGHT TO HAVE REMANDED THIS ISSUE TO THE FILE OF ASSESSING OFFICER . SINCE THIS WAS NOT DONE, TRIBUNAL MAY SET ASIDE THE ORDER OF LD CIT(A) AND REMAND THE ADDITION OF RS.1.45 CRORES WHICH WAS MADE BY THE ASSESSING OFFICER U/S 68 OF THE INCOME - TAX ACT FOR READJUDICATING THE SAME AFRESH AFTER CONDUCTING THE NECESSARY ENQUI RY AS PROVIDED U/S 68 OF THE INCOME - TAX ACT, 1961. 5 . AS AGAINST THIS, SHRI J C RANPURA, CA APPEARED ON BEHALF OF THE ASSESSEE, STRONGLY OBJECTED TO THE AFORESAID PRAYER OF LD DEPARTMENTAL 1010 - RJT - 2010 SHRI AYACHI CHANDRASHEKHAR 4 REPRESENTATIVE. HE POINTED OUT THAT THE ASSESSEE TOOK THE LOAN OF RS.1 CRORE O N 17.08.2005 FROM MR.ISHWAR ADWANI, AN NRI VIDE CHEQUE NO.102110, AND RS.60 LACS ON 18.08.2005 VIDE CHEQUE NO.102111 OUT OF WHICH AN AMOUNT OF RS.15 LACS WAS REPAID ON 10.09.2005 VIDE CHEQUE NO. 196107 LEAVING TOTAL OUTSTANDING BALANCE OF RS .1.45 CRORES. FROM THE COPY OF ACCOUNT OF MR.ISHWAR ADWANI, APPEARING AT PAGE 5 OF THE PAPER - BOOK, IT COULD BE SEEN THAT THE ENTIRE AMOUNT STANDS REPAID IN THE IMMEDIATELY SUCCEEDING FINANCIAL YEAR AND DEPARTMENT ACCEPTED THE REPAYMENT OF LOAN WITHOUT PRO BING INTO IT. THIS ALONE DEMONSTRATES THAT THE TRANSACTIONS OF LOAN OF RS.1.45 CRORES WAS GENUINE AND THE ASSESSING OFFICER FAILED TO APPRECIATE THE FACTUAL MATRIX OF THE CASE AND ADDED THE LOAN AMOUNT ON IRRELEVANT CONSIDERATION. THE LD COUNSEL FURTHER SUBMITTED THAT THE ASSESSING OFFICER ADDED THE OUTSTANDING LOAN OF RS.1.45 CRORES AS UNEXPLAINED AND TREATED THE BALANCE RS.15 LACS WHICH WAS REPAID IN THE NEXT MONTH AS EXPLAINED. THIS ALSO SHOWS THAT THE ASSESSING OFFICER HAS ACCEPTED THE IDENTITY, GENU INENESS AND CREDITWORTHINESS OF MR.ISHWAR ADWANI . THE LD COUNSEL SUBMITTED THAT, CONSIDERING THESE FACTUAL MATRIX OF THE CASE, THE VIEW TAKEN BY THE LD CIT(A) IN THE IMPUGNED ORDER DELETING THE ADDITION MADE BY THE ASSESSING OFFICER U/S 68 OF THE INCOME - T AX ACT BE UPHELD. 6. IN REJOINDER, THE LD DEPARTMENTAL REPRESENTATIVE REITERATED THE SUBMISSIONS MADE BY HIM EARLIER AND CONTENDED THAT FOLLOWING THE PRINCIPLE OF NATURAL JUSTICE, THE MATTER BE REMANDED TO THE FILE OF THE ASSESSING OFFICER FOR CONDUCT ING THE NECESSARY ENQUIRY AS PROVIDED U/S 68 OF THE INCOME - TAX ACT, 1961. 7 . HAVING HEARD BOTH THE SIDES, WE HAVE CAREFULLY GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. WE HAVE ALSO GONE THROUGH THE VARIOUS DETAILS AND DOCUMENTS CONTAINED IN PAPER - B OOK, CONTAINING 1 - 13 PAGES, FILED BY THE ASSESSEE AT THE TIME OF HEARING BEFORE US. ADMITTEDLY, BY TWO CHEQUES THE ASSESSEE RECEIVED THE LOAN OF RS.1.6 CRORES FROM MR.ISHWAR ADWANI, AN NRI. IN THE PREVIOUS YEAR, RELEVANT TO THE ASSESSMENT YEAR , ITSELF; O UT OF LOAN OF RS.1.6 1010 - RJT - 2010 SHRI AYACHI CHANDRASHEKHAR 5 CRORES THE ASSESSEE HAS REPAID LOAN OF RS.15 LACS. ADMITTEDLY, THE ASSESSING OFFICER ACCEPTED THE REPAYMENT OF LOAN OF RS.15 LACS , MEANING THEREBY HE HAS ACCEPTED THE GENUINENESS OF TRANSACTION, IDENTITY AS WELL AS CAPACITY OF THE CRE DITOR NAMELY MR.ISHWAR ADWANI. THE REMAINING LOAN AMOUNTING TO RS.1 .45 CRORES , WHICH IS THE SUBJECT MATTER OF APPEAL BEFORE US, WAS ALSO REPAID BY THE ASSESSEE IN THE SUCCEEDING FINANCIAL YEAR. ADMITTEDLY, THE ENTIRE LOAN OF RS.1.6 CR ORES RECEIVED THROUG H CHEQUE S AND ALSO REPAID THROUGH CHEQUE S . CONSIDERING THESE CONSPICUOUS FACTS OF THE CASE AND RATIO OF VARIOUS DECISION S RELIED BY THE LD CIT(A) IN THE IMPUGNED ORDER, WE ARE OF THE VIEW THAT HE HAS GIVEN THE COGENT REASON FOR DELETING THE ADDITION OF RS . 1.45 CRORES WHICH WAS MADE BY THE ASSESSING OFFICER U/S 68 OF THE INCOME - TAX ACT. WE ARE THEREFORE DECLINED TO INTERFERE. 8 . IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED. THIS ORDER IS PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED HER EINABOVE. SD/ - SD/ - ( D. K. SRIVASTAVA ) (T. K. SHARMA) / ACCOUNTANT MEMBER HE 6 / JUDICIAL MEMBER / ORDER DATE 21. 06 .2013 . /RAJKOT BT T PJO O / COPY OF ORDER FORWARDED TO: - 1 . H / APPELLANT - THE ACIT, GANDHIDHAM CIRCLE, GANDHIDHAM 2 . UH / RESPONDENT - SHRI AYACHI CHANDRASHEKHAR, PROP. CARGO CONVEYORS, BBZ - N - 66, GANDHIDHAM - KUTCH 3 . I 3 / CONCERNED CIT I, RAJKOT 4 . 3 - / CIT (A) - I I , RAJKOT 5 . EEI , A I , / DR, ITAT, RAJKOT 6 . / GUARD FILE. / BY ORDER , TRUE C OPY PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL, RAJKOT