RRJ Dyes & Intermediates Ltd., ( Now known as Prolife Industries Ltd. ), Ahmedabad V. The ACIT, Circle-5, Ahmedabad

ITA 1106/AHD/2015

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 5922 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 10 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-03-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2010-2011
• Appeal Filed On: 30-04-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: G C PIPARA
• Keywords: Unexplained cash credit; Tax effect
• Section: 131; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD D BENCH (BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER & SHRI S. S. GODARA, JUDICIAL MEMBER) ITA. NO: 1106 & 1367/AHD/2015 (ASSESSMENT YEAR: 2010-11) RRJ DYES & INTERMEDIATES LTD. (NOW KNOWN AS PROLIFE INDUSTRIES LTD.) 203, SUPATH COMPLEX, NR. VIJAY CHAR RASTA, NAVRANGPURA- 380009 THE ASSTT. COMMISSIONER OF INCOME TAX, CIRCLE-5, AHMEDABAD V/S V/S THE ASSTT. COMMISSIONER OF INCOME TAX, CIRCLE-5, AHMEDABAD RRJ DYES & INTERMEDIATES LTD. (NOW KNOWN AS PROLIFE INDUSTRIES LTD.) 203, SUPATH COMPLEX, NR. VIJAY CHAR RASTA, NAVRANGPURA- 380009 (APPELLANT) (RESPONDENT) PAN: AAACR 9172R APPELLANT BY : SHRI G. C. PIPARA, AR RESPONDENT BY : SHRI ALOK KUMAR, SR. D.R. ( )/ ORDER DATE OF HEARING : 13 -03-201 8 DATE OF PRONOUNCEMENT : 14-03-2018 PER N.K. BILLAIYA, ACCOUNTANT MEMBER: ITA NO 1106 & 1367/AHD/2015 . A.Y. 2010-11 2 1. ITA NOS. 1106 & 1367/AHD/2015 ARE CROSS APPEALS BY THE ASSESSEE AND THE REVENUE PREFERRED AGAINST THE ORDER OF THE LD. CIT( A)-9, AHMEDABAD DATED 09.02.2015 PERTAINING TO A.Y. 2010-11. 2. THE ASSESSEE IS AGGRIEVED BY THE ADDITION OF RS. 11 ,00,000/- AND RS. 10,00,000/- MADE U/S. 68 OF THE ACT AND THE REVENUE IS AGGRIEVED BY THE DELETION OF THE ADDITION OF RS. 15,00,000/- MADE U/ S. 68 OF THE ACT. 3. APPEAL FILED BY THE REVENUE HAS TO BE DISMISSED IN THE LIGHT OF CBDT CIRCULAR NO. 21 OF 2015 BY WHICH THE BOARD HAS DIRECTED THE REVENUE NOT TO PREFER APPEAL BEFORE THE TRIBUNAL WHERE THE TAX EFFECT IS LESS THAN RS. 10 LACS. IN THE LIGHT OF THE SAID CIRCULAR OF THE CBDT, APPEAL BY T HE REVENUE IN ITA NO. 1367/AHD/2015 IS DISMISSED. 4. COMING TO THE GRIEVANCE OF THE ASSESSEE, THE FIRST ISSUE RELATES TO THE ADDITION OF RS. 11 LACS IN THE NAME OF JATIN R. RAMI TREATED AS UNEXPLAINED CASH CREDIT U/S. 68 OF THE ACT. 5. THIS ADDITION HAS BEEN MADE BY THE A.O. BECAUSE SHR I JATIN RAMI IN HIS STATEMENT RECORDED U/S. 131 OF THE ACT CONFESSED TH AT THE ENTIRE AMOUNT OF RS. 11 LACS SHOWN THROUGH THE BANKING CHANNEL WAS ENTIR ELY THE MONEY OF THE COMPANY AND HE MERELY SIGNED WHERE HE WAS ASKED TO. IN HIS STATEMENT, SHRI JATIN RAMI ALSO STATED THAT HE HAS NO KNOWLEDGE OF SUCH TRANSACTION WITH THE ASSESSEE AND HAS NEVER RECEIVED BACK THE ALLEGED LO AN. ITA NO 1106 & 1367/AHD/2015 . A.Y. 2010-11 3 6. ON THE STRENGTH OF THE STATEMENT OF SHRI JATIN RAMI , THE A.O. TREATED RS. 11 LACS AS UNEXPLAINED CASH CREDIT. 7. FACTS ON RECORD DO NOT SUPPORT WHAT SHRI JATIN RAMI STATED BEFORE THE A.O. FIRSTLY, IN THE BANK STATEMENT OF SHRI JATIN RAMI W ITH AXIS BANI EXHIBITED AT PAGE 4 OF THE PAPER BOOK, THERE IS A CLEAR ENTRY OF PAYMENT OF RS. 11 LACS TO M/S RRJ DYES AND INTERMEDIATES PVT. LTD. (THE ASSES SEE COMPANY) ON 26.03.2010. THERE ARE CREDIT ENTRIES ALSO AMOUNTIN G TO RS. 42 LACS WITH CORRESPONDING DEBIT ENTRIES. IT MAY BE POSSIBLE THA T SHRI JATIN RAMI WANTED TO AVOID FURTHER LITIGATION IN HIS OWN CASE AND SHOWED HIS IGNORANCE FOR THE TRANSACTION WITH THE ASSESSEE. FURTHER ON EXHIBIT 5 OF THE PAPER BOOK, THERE IS A CLEAR PAYMENT OF RS. 11 LACS ON 13.08.2012 THROUGH CHEQUE OF J & K BANK. ENTRIES OF INTEREST PAYMENT OF RS. 95,375/- IS ALSO FOUND ON EXHIBIT 6 OF THE PAPER BOOK. THESE EVIDENCES CLEARLY DEMONSTRATE THA T JATIN RAMI DID GAVE LOAN TO THE ASSESSEE AMOUNTING TO RS. 11 LACS ON WHICH H E EARNED INTEREST AND THE SAID LOAN AMOUNT WAS REPAID BACK TO HIM . FOR THE R EASONS BEST KNOWN TO SHRI JATIN RAMI, HE DID NOT ACCEPT THE TRANSACTION BUT F ACTS ON RECORD SPEAK OTHERWISE. IN OUR CONSIDERED OPINION, THE ASSESSEE SUCCESSFULLY DISCHARGED THE INITIAL ONUS CAST UPON HIM BY PROVISIONS OF SECTION 68 OF THE ACT. THEREFORE, THIS ADDITION OF RS. 11 LACS DESERVE TO BE DELETED. GROUND NO. 1 IS ALLOWED. 8. GROUND NO. 2 RELATES TO THE ADDITION OF RS. 10 LACS IN THE NAME OF R K TRADERS. IN THIS CASE, IT IS TRUE THAT NO ONE APPEARED IN RE SPONSE TO THE SUMMONS ISSUED U/S. 131 OF THE ACT. THE A.O. SURMISED THAT BECAUSE SHRI JATIN RAMI CONFESSED AGAINST THE TRANSACTION. THEREFORE, THE ASSESSEE CA UTIONED R K TRADERS NOT TO APPEAR BEFORE THE A.O. THIS TRANSACTION WAS DONE TH ROUGH BANKING CHANNELS AND IN THE STATEMENT OF ACCOUNT WITH DCB BANK EXHIB ITED AT PAGE 10 OF THE ITA NO 1106 & 1367/AHD/2015 . A.Y. 2010-11 4 PAPER BOOK, THERE IS A CLEAR ENTRY ON 25.03.2010 IN RESPECT TO RS. 10 LACS GIVEN TO RRJ DYES AND INTERMEDIATES PVT. LTD. (THE ASSESS EE COMPANY). ON THIS BORROWING, THE ASSESSEE PAID INTEREST OF RS. 91003 ON 17 TH JUNE, 2014 AND THE SAME IS FOUND TO BE DEBITED IN THE BANK ACCOUNT OF J & K BANK EXHIBITED AT PAGE 13 OF THE PAPER BOOK. RS. 4 LACS WAS REPAID ON 30.06.2014 THROUGH RTGS AS PER EXHIBIT 14 OF THE PAPER BOOK AND RS. 3 LACS ON 01.07.2014 AND RS. 321811 ON 02.07.2014 THROUGH RTGS AS PER EXHIBIT 15 OF THE PAPER BOOK. THE ACCEPTANCE AND THE REPAYMENT OF THE LOAN TRANSACTIO N HAVE BEEN CONFIRMED BY THE LENDER. CONSIDERING THE FACTS ON RECORD, IT CAN BE SAFELY CONCLUDED THAT THE ASSESSEE HAS SUCCESSFULLY DISCHARGED THE PRIMARY ON US CAST UPON IT BY VIRTUE OF THE PROVISIONS OF SECTION 68 OF THE ACT AND THEREFO RE NO ADDITION IS CALLED FOR UNDER THE PROVISIONS OF SECTION 68 OF THE ACT. THIS GROUND IS ALSO ALLOWED. 9. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 14 - 03- 20 18 SD/- SD/- (S. S. GODARA) (N. K. BILLAIYA) JUDICIAL MEMBER TRUE COPY ACCOUNTANT MEMBER AHMEDABAD: DATED 14 /03/2018 RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AHME DABAD