The ITO, Ward-1(1), Surat V. M/s. Avon Advisory Pvt.Ltd., Surat

ITA 1153/AHD/2010

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 2165 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 3 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-07-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 22-07-2013
• Assessment Year: 2007-2008
• Appeal Filed On: 15-04-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: O P BATHEJA
• Assessee Lawyers: RAMESH KUMAR MAL

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD BEFORE SHRI G.C. GUPTA, VICE PRESIDENT AND SHRI A.K . GARODIA, ACCOUNTANT MEMBER ITA NO. 1153/AHD/2010 A.Y: 2007-08 ITO, WARD 1(1), ROOM NO.113, AAYAKAR BHAVAN, MAJURA GATE, SURAT. VS M/S. AVON ADVISORY PVT. LTD., 5006, TRADE HOUSE, RING ROAD, SURAT PAN AABCA9805F (APPELLANT) (RESPONDENT) REVENUE BY : SHRI O.P. BATHEJA, SR.D.R. ASSESSEE(S) BY : SHRI RAMESH KUMAR MALPANI, A.R. / // / DATE OF HEARING : 22/07/2013 / DATE OF PRONOUNCEMENT: 26/07/2013 / O R D E R PER SHRI A.K. GARODIA, ACCOUNTANT MEMBER : THIS IS A REVENUES APPEAL DIRECTED AGAINST THE OR DER OF LEARNED CIT(A)-I, SURAT, DATED 10.02.2010 FOR A.Y. 2007-08. GROUNDS RAISED BY THE REVENUE ARE AS UNDER: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LEARNED CIT(A), SURAT HAS ERRED IN DELETING THE ADDITION MA DE BY THE AO ON ACCOUNT OF CASH CREDIT OF RS.42,54,066/- 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LEARNED CIT(A), SURAT HAS ERRED IN DELETING THE ADDITION OF RS.4,03,697/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF INTEREST ON LOAN. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LEARNED CIT(A) OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESSING OFFICER. 4. IT IS, THEREFORE, PRAYED THAT THE ORDER OF THE C IT(A) MAY BE SET ASIDE AND THT OF ASSESSING OFFICER MAY BE RESTORED TO THE ABOVE E XTENT. 2. LEARNED D.R. FOR THE REVENUE HAS SUPPORTED THE A SSESSMENT ORDER WHEREAS THE LEARNED AR FOR THE ASSESSEE HAS SUPPORT ED THE ORDER OF THE LEARNED CIT(A). HE ALSO SUBMITTED THAT IN THE CASE OF ITS SISTER CONCERN, ITA NO.1153/AHD/ 2010 ITO VS. M/S. AVON ADVISORY PVT. LTD. A.Y. 2007-08 - 2 - I.E., IN THE CASE OF M/S. APEX THERM PACKAGING PVT. LTD, FOR A.Y.2007-08 IN ITA NO.1151/AHD/2010 DATED 10.5.2013 , SIMILAR ADDITION WAS DELETED BY THE TRIBUNAL AND THE COPY O F THIS TRIBUNAL ORDER IS AVAILABLE AT PAGE NO.1 TO 12 OF THE PAPER BOOK. IN THE REJOINDER, IT WAS SUBMITTED BY THE LEARNED AR FOR THE ASSESSEE THAT F OR THE SAME SISTER CONCERN, I.E., APEX THERM PACKAGING PVT. LTD., FOR A.Y. 2006-07 , THE TRIBUNAL HAS CONFIRMED THE DELETION IN ITA NO.253/A HD/2010 AND CO NO.33/AHD/2010 DATED 15.02.2013 AND HE SUBMITTED A COPY OF THIS TRIBUNAL ORDER ALSO. 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PER USED THE MATERIAL AVAILABLE ON RECORD AND THE JUDGMENTS CITED BY BOTH THE SIDES. FROM THE ORDER OF AUTHORITIES BELOW, WE FIND THAT IN RESPECT OF 20 LOAN CREDITORS, THE ASSESSEE HAD FURNISHED CONFIRMATION LETTER AND COPI ES OF INCOME TAX RETURN ACKNOWLEDGMENT, BALANCE SHEET, ETC. AND THE ONLY DOCUMENT WHICH COULD NOT BE SUBMITTED BY THE ASSESSEE WAS THE COPY OF BANK STATEMENT OF LOAN CREDITORS. NOW, WHEN WE GO THROUGH THE FACTS I N THE CASE OF I.T.O VS. M/S. APEX THERM PACKAGING PVT. LTD, FOR A.Y. 20 07-08 AND WE FIND THAT IN THAT CASE ALSO, THE ASSESSEE HAD FURNI SHED ALL OTHER DOCUMENTS BUT COULD NOT FURNISH THE COPY OF BANK STATEMENT OF THE LENDERS AND HENCE, THE FACTS IN THE PRESENT CASE ARE SIMILAR TO THE FACTS OF THAT CASE FOR A.Y. 2007-08. IN A.Y. 2006-07 OF THAT CASE, WE FIND THAT IT IS NOTED BY THE TRIBUNAL THAT CASH WAS DEPOSITED IN THE BANK AC COUNT JUST PRIOR TO ISSUANCE OF CHEQUES TOWARDS THE ALLEGED LOANS EXTEN DED TO THE ASSESSEE COMPANY. IT IS ALSO NOTED BY THE TRIBUNAL IN THAT Y EAR THAT ALL THE LOAN CREDITORS ARE PERSONS OF MEAGER RESOURCES AND DID N OT HAVE ANY GENUINE REASON TO EXTEND THEIR LIFE TIME SAVINGS AS LOAN TO THE ASSESSEE COMPANY. ITA NO.1153/AHD/ 2010 ITO VS. M/S. AVON ADVISORY PVT. LTD. A.Y. 2007-08 - 3 - IN THE PRESENT CASE, THE LOAN CREDITORS CANNOT BE S AID TO BE A PERSON OF MEAGER RESOURCES BECAUSE AS PER BALANCE SHEET OF TH E FIRST LOAN CREDITOR, I.E., BETRI DEVI AGRAWAL AS AVAILABLE AT PAGE NO.25 OF THE PAPER BOOK, IT IS SEEN THAT APART FROM THE LOAN OF RS.283705 /- ADVANCED TO THE ASSESSEE DURING THIS YEAR, THERE WAS OPENING BALANCE ALSO OF THE SAME PERSON OF RS.237322/-. APART FROM THE TOTAL AMOUNT OF LOAN AS ON 31.3.2007 OF RS.544640/-, THERE IS INVESTMENT OF THAT PERSON IN THE SHARES OF THE ASSESSEE COMPANY OF RS.1 LAC. AS PER THE DETAILS AV AILABLE AT PAGE NO.5 AND 6 OF THE ORDER OF THE LEARNED CIT(A) IN RESPECT OF THESE 20 LOAN CREDITORS, WE FIND THAT IN ADDITION TO FRESH CREDIT RECEIVED DURING THIS YEAR, THERE IS OPENING BALANCE OF ALL THESE 20 LOAN CREDITORS. NOTHING HAS BEEN BROUGHT ON RECORD BY THE AO OR BY LEARNED DR F OR THE REVENUE THAT IN EARLIER YEARS ALSO SIMILAR ADDITION WAS MADE BY THE AO IN RESPECT OF CASH CREDIT EXTENDED BY THE SAME LOAN CREDITORS TO THE ASSESSEE. WE ALSO FIND THAT APART FROM OLD LOAN AND FRESH LOAN IN THE PRESENT YEAR, THERE IS INVESTMENT BY THESE LOAN CREDITORS IN THE SHARES OF ASSESSEE COMPANY AND IN SOME CASES, OF SOME OTHER COMPANY ALSO. 4. CONSIDERING ALL THESE FACTS, IT CANNOT BE SAID T HAT THE LOAN CREDITORS IN THE PRESENT CASE ARE PERSONS OF MEAGER MEANS AND SINCE, THERE IS OPENING LOAN ALSO FROM ALL THESE 20 LOAN CREDITORS AND APART FROM LOAN CREDIT, THERE IS INVESTMENT IN SHARES ALSO OF ALL T HESE LOAN CREDITORS, THE TRIBUNALS DECISION CITED BY THE LEARNED DR FOR THE REVENUE IS NOT APPLICABLE IN THE FACTS OF THE PRESENT CASE. 5. IN THE LIGHT OF THE ABOVE DISCUSSIONS, WE FEEL T HAT THE DISPUTE IS SQUARELY COVERED IN THE FAVOUR OF THE ASSESSEE BY T HE TRIBUNALS DECISION ITA NO.1153/AHD/ 2010 ITO VS. M/S. AVON ADVISORY PVT. LTD. A.Y. 2007-08 - 4 - CITED BY THE LEARNED AR FOR THE ASSESSEE, WHICH HAS BEEN RENDERED IN THE CASE OF M/S. APEX THERM PACKAGING PVT. LTD, FOR A.Y.2007-08 . THE RELEVANT PARAGRAPH OF THIS TRIBUNAL DECISION IS PAR AGRAPH NO.11 WHICH IS PRODUCED BELOW: WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. IT IS AN UNDISPUTED FACT THAT DURING THE YEAR THE ASSE SSEE HAD RECEIVED LOAN FROM 17PARTIES AGGREGATING TO 33,35,011/-. THE DETAILS O F WHICH ARE LISTED AT PAGE 2 OF ASSESSING OFFICER ORDER. CIT(A) WHILE DELETING T HE ADDITION HAS GIVEN A FINDING THAT THE ASSESSEE HAD FILED BEFORE ASSESSIN G OFFICER THE CONFIRMATIONS WITH NAME, ADDRESS, PAN NUMBER, COPY OF LEDGER ACCO UNT, COPY OF BALANCE SHEET AND PROFIT AND LOSS, ACCOUNT COPY OF INCOME T AX RETURNS AND COMPUTATION OF TOTAL INCOME IN RESPECT OF ALL THE P ARTIES EXCEPT TWO DEPOSITORS. WITH RESPECT TO THE TWO DEPOSITORS, THE ASSESSEE HA D FILED CONFIRMATION, ADDRESS AND PAN NUMBERS AND HENCE THE ASSESSEE HAD ALSO DISCHARGED THE INITIAL ONUS CAST UPON THE ASSESSEE WITH RESPECT TO THE TWO CREDITORS. HE HAS FURTHER NOTED THAT THE LOANS WERE RECEIVED THROUGH CHEQUES AND THE LOAN ACCOUNT WERE DULY REFLECTED IN THE BALANCE SHEET OF LENDERS OF CIT(A) HAS FURTHER HELD ONCE THE ONUS WAS FULFILLED BY THE ASS ESSEE, IT WAS FOR THE ASSESSING OFFICER TO EXAMINE AND BRING ANY MATERIAL ON RECORD WHICH MAY HELP IN REBUTTING THE ONUS OF ASSESSEE. THE ASSESSI NG OFFICER HAS NOT BROUGHT ANY MATERIAL ON RECORD IN ITS SUPPORT CIT(A) WHILE DELETING THE ADDITION HAS ALSO RELIED ON THE DECISION OF HON. GUJARAT HIGH CO URT, IN THE CASE OF ROHINI BUILDERS 256 ITR 360 AND THE DECISION OF HON. SUPRE ME COURT, IN THE CASE OF ORISSA CORPORATION LIMITED 153 ITR 78. BEFORE US, N OTHING HAS BEEN BROUGHT ON RECORD BY THE REVENUE TO CONTROVERT THE FINDINGS OF CIT(A). REVENUE HAS RELIED ON THE DECISION OF HON/ BELHI HIGH COURT IN THE CASE OF N.R. PORTFOLIO (SUPRA). WE HOWEVER FIND THAT THE RATION OF THE AFO RESAID DELHI HIGH COURT DECISION ARE DISTINGUISHABLE ON FACTS AND THEREFORE CANNOT BE APPLIED TO THE FACTS OF THE PRESENT CASE. IN VIEW OF THE AFORESAID FACTS, WE FIND NO REASON TO INTERFERE WITH THE ORDER OF CIT(A) AND THUS DISMISS THIS GROUND OF REVENUE. 5. RESPECTFULLY, FOLLOWING THIS TRIBUNAL DECISION C ITED BY LEARNED AR FOR THE ASSESSEE, WE DECLINE TO INTERFERE IN THE OR DER OF THE LEARNED CIT(A) IN THE PRESENT CASE. GROUND NO.1 IS REJECTED . GROUND NO.2 IS CONSEQUENTIAL BECAUSE ONCE THE LOAN IS HELD TO BE G ENUINE; THE INTEREST THEREON CANNOT BE DISALLOWED. ACCORDINGLY, GROUND N O.2 IS ALSO REJECTED. GROUND NOS.3 AND 4 ARE GENERAL. ITA NO.1153/AHD/ 2010 ITO VS. M/S. AVON ADVISORY PVT. LTD. A.Y. 2007-08 - 5 - 6. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED ON THE DATE MENTIONED ON CAPTION P AGE. SD/- SD/- (G.C. GUPTA) (A.K. GARODIA) VICE PRESIDENT ACCOUN TANT MEMBER AHMEDABAD; DATED 26/07/2013 PRABHAT KR. KESARWANI, SR. P.S. TRUE COPY / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. !' / THE RESPONDENT. 3. #$#% ' '& / CONCERNED CIT 4. ' '&() / THE CIT(A)-III, AHMEDABAD 5. )*' %, ' ' % , ,-$ / DR, ITAT, AHMEDABAD 6. *./ 0 / GUARD FILE. / BY ORDER, 1 11 1/ // /,' #2 ,' #2 ,' #2 ,' #2 ( DY./ASSTT.REGISTRAR) ' ' % ' ' % ' ' % ' ' % , , , , ,-$ ,-$ ,-$ ,-$ / ITAT, AHMEDABAD