The ITO, Ward-9(4), Surat V. Shri Vimal Trilokchand Jain, Surat

ITA 118/AHD/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 60426 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 4 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-05-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 07-05-2012
• Assessment Year: 2007-2008
• Appeal Filed On: 19-01-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: MODI
• Keywords: Gift

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD C BENCH AHMEDABAD BEFORE SHRI D.K.TYAGI , JUDICIAL MEMBER AND SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER ITA NO. 118/AHD/2011 ASSESSMENT YEAR :2007-08 THE INCOME-TAX OFFICER, WARD.9(4), SURAT V/S . VIMAL TRILOKCHAND JAIN 303, SHILP APARTMENT, ATHWALINES,SURAT PAN NO. AA YPJ7279G (APPELLANT) .. (RESPONDENT) BY APPELLANT SHRI VINOD TANWANI, SR.D.R. /BY RESPONDENT SHRI M.S.MODI, A.R. /DATE OF HEARING 10.05.2012 /DATE OF PRONOUNCEMENT 25.05.2012 O R D E R PER : D.K.TYAGI, JUDICIAL MEMBER THIS IS A REVENUES APPEAL DIRECTED AGAINST THE OR DER OF LD. CIT (A)-V, SURAT, DATED 25.10.2010 FOR ASSESSMENT YEAR 2007-08 . 2. THE REVENUE HAS TAKEN FOLLOWING GROUNDS OF APPEA L:- 1) ON THE FACTS AND CIRCUMSTANCE OF THE CASE AND I N LAW, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 21 ,35,639/- MADE BY THE A.O. ON ACCOUNT OF CAPITAL INTRODUCTION DESPITE THE FACT THAT DURING THE ITA NO. 2163/AHD/2009 A.Y.2006-07 PAGE 2 ASSESSMENT PROCEEDINGS THE ASSESSEE FAILED TO SUBMI T NECESSARY EVIDENCES IN SUPPORT OF HIS CLAIM. 2) ON THE FACTS AND CIRCUMSTANCE OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 21 ,35,639/- MADE BY THE A.O. ON ACCOUNT OF CAPITAL INTRODUCTION AFTER ADMIT TING THE NEW EVIDENCES WITHOUT CALLING FOR A REMAND REPORT FROM THE A.O. IN CONTRAVENTION TO RULE 46 A. 3) IT IS, THEREFORE, PRAYED THAT THE ORDER OF THE C IT(A) BE SET-ASIDE AND THE ASSESSING OFFICERS ORDER DATED 29/12/2009 BE RESTORED. 3. THE BRIEF FACTS OF THE CASE ARE THAT DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER OBSERVED THAT THERE IS AN ADD ITION OF RS. 94,60,978/- IN M/S T.K. EXPORT AND RS. 77,29,344/- IN M/S VIMAL T. JAIN CAPITAL ACCOUNT I.E. AGGREGATE AMOUNT OF CAPITAL INTRODUCED BY THE ASSES SEE IS THUS OF RS. 1,71,90,322/-. HOWEVER, THE AUDIT REPORT OF THE AS SESSEE WAS SHOWING NET ADDITION IN CAPITAL OF RS. 21,35,639/- AFTER ADJUS TING DEBIT BALANCE OF RS. 24,19,005/- IN THE CASE OF VIBHOR GEMS. THE ASSESS EE WAS ASKED TO EXPLAIN. THE ASSESSEES REPLY WAS AS UNDER:- REGARDING THE AMOUNT CREDITED TO THE CAPITAL ACCOU NTS, I HAVE TO CLARIFY THAT THERE IS NO INTRODUCTION OF FRESH CAPITAL TO A NY OF THE PROPRIETARY CONCERN OF THE ASSESSEE BUT IT IS MERELY THE INTERN AL TRANSFER OF OWN FUND FROM THE CAPITAL ACCOUNT FROM ONE PROPRIETARY CONCE RN TO THE ANOTHER CAPITAL ACCOUNT OF THE OTHER PROPRIETARY CONCERN OF THE ASSESSEE. ON PERUSAL OF THE DETAILED BREAKUP OF CAPITAL ACCOUNTS AS APPEARED IN M/S. T. K. EXPORTS AND M/S. VIMAL T. JAIN, YOU WILL CERT AINLY FIND THAT THE ADDITION TO THE CAPITAL WAS MADE OUT OF TRANSFER OF CAPITAL FROM T.K. EXPORTS, VIBHOR GEMS AND VIMAL T. JAIN (HUF) TO THE CAPITAL ACCOUNT OF M/S. VIMAL T. JAIN OR VICE VERSA. IT IS PERTINENT TO NOTE THAT ALL THESE INTERNAL TRANSFER OF OLD CAPITAL FROM ONE ACCOUNT T O ANOTHER WAS EXCLUSIVELY THROUGH ACCOUNT PAYEE CHEQUES AND FOR T HAT THE COPIES OF ITA NO. 2163/AHD/2009 A.Y.2006-07 PAGE 3 BANK STATEMENTS SHOWING THE TRANSFER OF CAPITAL TO HIS PROPRIETARY CONCERN AS ALSO THE MEDICLAIM RECEIPT, PPF RECEIPT AND SCHOOL FEE RECEIPTS ARE ATTACHED HEREWITH FOR YOUR KIND CONSID ERATION. THUS, THERE IS NO QUESTION OF ESTABLISHING THE CREDITWORTHINESS OR GENUINENESS OF THE PARTIES SINCE THERE IS NO INTRODUCTION OF CAPITAL F ROM OUTSIDERS SOURCE. 4. THE REPLY OF THE ASSESSEE WAS NOT ACCEPTABLE TO THE ASSESSING OFFICER AND HE MADE AN ADDITION TO RS. 21,35,639/- BY OBSER VING THAT THE ASSESSEES REPLY IS NOT FOUND TENABLE BECAUSE AN ADDITION OF R S. 21,35,639/- IN CAPITAL AMOUNT HAS ALREADY SHOWN IN SCHEDULE 1 OF THE AUDIT REPORT UNDER SECTION 44 AB BUT THE COUNSEL FOR ASSESSEE IN HIS REPLY, HAS S TATED THAT NO ADDITION HAS BEEN MADE TO THE CAPITAL BY THE ASSESSEE, NOR HE HA S RECEIVED ANY GIFT DURING THE RELEVANT YEAR. 5. AGGRIEVED BY THIS ACTION OF ASSESSING OFFICER, T HE ASSESSEE WENT IN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY. BEFOR E CIT(A), THE ASSESSEE FILED A COPY OF SUBMISSION MADE BEFORE A.O. ALONG WITH CO PIES OF BANK ACCOUNTS FROM WHERE THE FUNDS HAVE BEEN TRANSFERRED FROM ONE CONCERN TO ANOTHER CONCERN. THE CAPITAL ACCOUNT OF M/S VIMAL T. JAIN, M/S T.K. EXPORTS & M/S. VIBHOR GEMS WERE ALSO SUBMITTED ALONG WITH CONSOLID ATED CHART SHOWING OPENING BALANCE, ADDITIONS/WITHDRAWALS, PROFIT AND LOSS AND CLOSING BALANCE CAPITAL IN THE CONCERNS. THE ASSESSEE ALSO SUBMITT ED THE BREAK UP OF WITHDRAWAL OF RS. 12,75,000/- MADE FROM ASSESSEE SA VING BANK ACCOUNT AND THE BREAK UP OF WITHDRAWAL OF RS. 10,32,000/- MADE FROM SAVING BANK ACCOUNT OF VIMAL T. JAIN, HUF. THESE TWO AMOUNTS HAVE BEEN CREDITED IN THE CAPITAL ACCOUNT OF THE ASSESSEES PROPRIETARY CONCERN M/S T .K. EXPORTS. THE AMOUNT OF RS. 10,00,000/- OUT OF RS. 12,75,000/- CREDITED REPRESENTS LOAN REPAID ON ITA NO. 2163/AHD/2009 A.Y.2006-07 PAGE 4 06.06.2006 BY VIJAY SHANTI INVESTMENT. AFTER TAKIN G INTO CONSIDERATION THIS SUBMISSION OF ASSESSEE, THE LD. CIT (A) DELETED THE ADDITION OF RS. 21,35,639/. 6. BEING AGGRIEVED BY THIS ORDER OF LD. CIT(A), NOW , THE REVENUE IS IN APPEAL BEFORE US. 7. AT THE TIME OF HEARING, BEFORE US, LD. D.R. RELI ED ON THE ORDER OF A.O. WHILE LD. A.R. RELIED ON THE DOCUMENTS FILED BY THE ASSESSEE, HIS PAPER BOOK AND TOOK US TO VARIOUS PAGES OF THIS PAPER BOOK IN SUPPORT OF FINDING OF THE LD. CIT(A). 8. AFTER HEARING BOTH THE PARTIES AND PERUSING THE RECORDS, WE FIND THAT LD. CIT(A) WHILE GIVING RELIEF TO THE ASSESSEE HAS OBSE RVED AS UNDER:- I HAVE CONSIDERED BOTH, THE A.O.S VIEWS AND THE A PPELLANTS SUBMISSIONS. ON GOING THROUGH THE PAPERS SUBMITTED BY THE APPELLANT, I FIND THAT EXCEPT THESE TWO AMOUNTS I.E. RS. 12,75,0 00/- WITHDRAWN FROM APPELLANTS SAVING ACCOUNT AND RS.10,32,000/- WITHD RAWN FROM SAVING BANK OF VIMAL T. JAIN, HUF, ALL OTHER CREDITS OR DE BITS ENTRIES APPEARING IN THE CAPITAL A/C OF THE CONCERNS ARE NOTHING BUT INTERNAL TRANSFERS AMONG ALL THE THREE CONCERNS. FROM THE CHART SUBMI TTED, IT IS QUITE CLEAR THAT CAPITAL HAS INCREASED BY RS. 21,35,639/- WHICH HAS BEEN ADDED BY THE A.O. HOWEVER, THE A.O. HAS FAILED TO APPRECIAT E THE RELATED FACTS AS SUBMITTED BY THE APPELLANT BEFORE HIM. THE ABOVE FINDING OF THE ASSESSEE IS WELL SUPPORTED BY THE DOCUMENTS AVAILABLE IN THE PAPER BOOK FILED BEFORE US, WE FUR THER FIND THAT THERE IS NO VIOLATION ON THE PART OF LD. CIT (A) OF RULE 46A OF THE INCOME TAX RULES AS HE ITA NO. 2163/AHD/2009 A.Y.2006-07 PAGE 5 HAS CATEGORICALLY MENTIONED IN HIS ORDER THAT THE A SSESSING OFFICER HAS FAILED TO APPRECIATE THE FACTS OF THE CASE AS PUT UP BEFOR E HIM BY THE ASSESSEE. IN THE PAPER BOOK, FILED BEFORE US, THE ASSESSEE HAS C ERTIFIED THAT ALL THE DOCUMENTS FILED BEFORE US, WERE ALSO BEFORE THE ASS ESSING OFFICER AND THE SAME HAS NOT BEEN REBUTTED BY THE REVENUE. 9. IN VIEW OF THIS, WE HOLD THAT THERE WAS NO NEW E VIDENCE, WHICH WAS ADMITTED BY THE LD. CIT (A) BEFORE GIVING RELIEF TO THE ASSESSEE AND THEREFORE, THE ORDER PASSED BY HIM, IS HEREBY UPHELD. 10. IN THE RESULT, THE REVENUES APPEAL IS DISMISSE D. ORDER PRONOUNCED IN OPEN COURT ON THE DATE MENTIONE D HEREINABOVE AT CAPTION PAGE. SD/- SD/- (ANIL CHATURVEDI) ( D.K. TYAGI) ACCOUNTANT MEMBER JUDICIAL MEMBER TRUE COPY S.K.SINHA ! ! ! ! '! '! '! '! / COPY OF ORDER FORWARDED TO:- 1. / APPELLANT 2. / RESPONDENT 3. '(' ) * / CONCERNED CIT 4. *- / CIT (A) 5. !./ ), ) , 12( / DR, ITAT, AHMEDABAD 6. /45 67 / GUARD FILE. BY ORDER/ , 8/ 1 ': ) , 12( ; ITA NO. 2163/AHD/2009 A.Y.2006-07 PAGE 6 STRENGTHEN PREPARATION & DELIVERY OF ORDERS IN THE ITAT 1) DATE OF TAKING DICTATION 18.05.2012 2) DIRECT DICTATION BY MEMBER STRAIGHT ON COMPUTER/LAPTOP/DRAGON DICTATE XXXX 3) DATE OF TYPING & DRAFT ORDER PLACE BEFORE MEMBER 21.05.2012 4) DATE OF CORRECTION 22.05.2012 5) DATE OF FURTHER CORRECTION 6) DATE OF INITIAL SIGN BY MEMBERS 25.05.2012 7) ORDER UPLOADED ON 25.05.2012 8) ORIGINAL DICTATION PAD HAS BEEN ENCLOSED IN THIS FILE YES 9) FINAL ORDER AND 2 ND COPY SEND TO BENCH CLERK ON 25.05.2012