The ITO, Ward-1, Palanpur V. Shree Suvidhi Traders, Palanpur

ITA 1190/AHD/2012

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 94646 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 4 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-10-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 19-10-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 31-05-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DIPAK SUTARIA
• Keywords: Unexplained cash credit
• Section: 54

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD B BENCH AHMADABAD , BEFORE: SHRI RAJPAL YADAV, JUDICIAL MEMBER SHRI MANISH BORAD, ACCOUNTANT MEMBER ITA NO. 1190/AHD/2012 ASSESSMENT YEAR : 2007-08 I.T.O., WARD-1, PALANPUR V/S . M/S. SHREE SUVIDHI TRADERS PLOT NO. G-3, NEW MARKET YARD, PALANPUR - 385001 PAN NO. AAHFS7527D (APPELLANT) .. (RESPONDENT) / BY REVENUE SHRI DIPAK SUTARIA, SR. D.R. /BY ASSESSEE NONE /DATE OF HEARING 19.10.2015 /DATE OF PRONOUNCEMENT 26.10.2015 O R D E R PER : MANISH BORAD, ACCOUNTANT MEMBER THIS APPEAL OF THE REVENUE IS DIRECTED AGAINST THE ORDER OF CIT(A)-XX, AHMEDABAD, DATED 23.03.2012. 2. REVENUE HAS RAISED FOLLOWING GROUNDS OF APPEAL: ITA NO. 1190/AHD/12 A.Y. 07-08 (ITO VS. M/S. SHREE SUVIDHI TRADERS) PAGE 2 1). THE LD. COMMISSIONER OF INCOME-TAX (APPEALS)-X X, AHMEDABAD HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.14, 57,899/- MADE BY THE ASSESSING OFFICER U/S.68 OF THE ACT. 2). ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE LD. COMMISSIONER OF INCOME-TAX (APPEALS)-XX, AHMEDABAD OUGHT TO HAVE UP HELD THE ORDER OF THE ASSESSING OFFICER. 3). IT IS THEREFORE, PRAYED THAT THE ORDER OF THE C OMMISSIONER OF INCOME-TAX (APPEALS)-XX, AHMEDABAD MAY BE SET-ASIDE AND THAT O F THE ASSESSING OFFICER BE RESTORED. 3. AT THE OUTSET, DURING COURSE OF PROCEEDINGS BEFO RE THE TRIBUNAL, NONE APPEARED ON BEHALF OF ASSESSEE AND THE CASE HAS BEE N HEARD ON THE BASIS OF PAPERS AVAILABLE ON RECORD AND SUBMISSIONS OF LD. D .R. 3. BRIEFLY STATED FACTS ARE THAT THE ASSESSEE IS A PARTNERSHIP FIRM ENGAGED IN THE BUSINESS OF TRADING OF CASTOR AND ISABGOL SEEDS AS GENERAL MERCHANT COMMISSION AGENT IN THE AGRICULTURE MARKET PRODUCE COMMITTEE AT PALANPUR. RETURN OF INCOME FOR A.Y. 2007-08 WAS FILED BY ASSE SSEE ON 12.10.2007 DECLARING TOTAL INCOME AT NIL. ASSESSEES CASE WAS SELECTED FOR SCRUTINY AND ASSESSMENT WAS FRAMED ON 23.12.2009 BY I.T.O., WARD -1, PALANPUR. 3.1 IN THE ASSESSMENT ORDER PASSED U/S.143(3) OF TH E IT ACT (HEREINAFTER REFERRED AS THE ACT). A.O. MADE FOLLOWING TWO AD DITIONS: I. DISALLOWANCE OF CASH CREDITS RS.20,35,938/- II. UNEXPLAINED SUNDRY CREDITORS RS.22,32,236/- TOTAL RS.42,69,174/- 4. AGGRIEVED ASSESSEE WENT IN APPEAL BEFORE THE CIT (A) WHO VIDE HIS ORDER DATED 28.10.2011 CONFIRMED THE ADDITION OF RS.22,32 ,336/- ON ACCOUNT OF UNEXPLAINED SUNDRY CREDITORS AGAINST WHICH ASSESSEE HAS NOT PREFERRED APPEAL BEFORE THE TRIBUNAL. AS REGARDS TO THE DISALLOWANC E OF CASH CREDITORS OF RS.22,35,938/- WHICH WAS PERTAINING TO 10 LENDERS. DURING APPELLATE ITA NO. 1190/AHD/12 A.Y. 07-08 (ITO VS. M/S. SHREE SUVIDHI TRADERS) PAGE 3 PROCEEDINGS BEFORE THE CIT(A), LD. A.R. OF THE APPE LLANT STATED THAT ADEQUATE TIME WAS NOT ALLOWED BY THE ASSESSING OFFICER TO FU RNISH DETAILS IN ORDER TO PROVE THE CREDITWORTHINESS, IDENTITY AND GENUINENES S OF UNSECURED LOANS WHICH HAVE HITHER TO ADD TO ITS TOTAL INCOME BY THE ASSES SING OFFICER. THEREAFTER, CIT(A) CALLED FOR THE REMAND REPORT FROM THE ASSESS ING OFFICER WHO SUBMITTED THE SAME VIDE LETTER NO. ACIT/BKC/REMAND REPORT/SST /2010-11 DATED 07.01.2011, WHICH IS STATED AS UNDER: IN THIS REGARD, INFORMATION U/S.133(6) WAS CALLED FOR FROM VARIOUS PARTIES. IN THE CASE OF UNSECURED LOANS, CONFIRMATIONS HAVE BEEN RE CEIVED FROM PARTIES EXCEPT IN THE CAST OF SMT. CHANDANBEN NAGINDAS SHAH AND SHRI SAMR TH H. MODH. CONFIRMATION RECEIVED FROM ONE SHRI PRADEEP HARSHADKUMAR MODH FO R THE F.Y. 2005-06 AND F.Y. 2006-07 IS NOT SIGNED. A COPY OF THE SAME IS ATTAC HED HEREWITH. LEDGER ACCOUNT OF M/S. VIJAY & CO. FOR THE F.Y.2005-06 WAS SQUARED OF F AND SHOWS NO OUTSTANDING INTEREST CARRIED FORWARD AS CLAIMED BY THE ASSESSEE IN HIS SUBMISSION. A COPY OF THE SAME IS ATTACHED HEREWITH. OTHER ACCOUNTS SHOW THA T THESE ARE RUNNING ACCOUNTS FOR THE F.Y. 2005-06 AND F.Y.2006-07. 4. IN THE CASE OF CREDITORS INFORMATION U/S.133(6) WAS CALLED FOR BUT NO CONFIRMATION HAS BEEN RECEIVED FROM SHRI BABULAL G. SHAH AND SHREE YOGESHWAR TRADING CO. TILL THIS DATE, HENCE THE SAME ARE NOT VERIFIABLE. ON THE BASIS OF THE REMAND REPORT, CIT(A) WENT AHEA D TO DECIDE THE GROUNDS FILED IN THE APPEAL BY THE ASSESSEE RELATING TO ADD ITION OF RS.20,35,938/- ON ACCOUNT OF UNEXPLAINED CASH CREDIT. DURING COURSE OF ASSESSMENT PROCEEDING, ASSESSING OFFICER MADE ADDITION OF RS.22,35,938/- O N ACCOUNT OF UNEXPLAINED CASH CREDITS FROM FOLLOWING PARTIES: SL. NO. NAME OF THE LENDER AMOUNT (RS.) 1 DIGMA MODH 12,499 2 MANISHBHAI M. MODH HUF 8,749 3 SAMARTH MEHUL MODH 23,130 4 BHURMAL LADURAM 2,70,267 5 VINOD KUMAR RJENDRAPRASAD 7,19,670 6 PRAKASHCHANDRA J. SHAH 4,23,584 SUB TOTAL 14,57,899 7 PRADIP H. MODH 2,19,197 8 SMITABEN H. MODH 73,267 9 CHANDANBEN NAGINDAS SHAH 2,61,824 ITA NO. 1190/AHD/12 A.Y. 07-08 (ITO VS. M/S. SHREE SUVIDHI TRADERS) PAGE 4 10 VIJAY KUMAR & CO. 23,751 SUB TOTAL 5,78,039 GRAND TOTAL 20,35,938 CIT(A) VIDE ITS ORDER DATED 28.01.2011 PARTLY ADJUD ICATED THE ISSUE RELATING TO UNEXPLAINED CASH CREDITS. CIT(A) DID NOT GIVE FIND ING IN REGARD TO CASH CREDITS RECEIVED FROM PARTIES MENTIONED IN SL. NO.1 TO 6 TO TAL TO RS.14,57,899/- AND ADDRESSED IN RELATION TO PARTIES MENTIONED IN SL. N O.7 TO 10 TOTALING RS.5,78,039/-. OUT OF RS.5,78,039/-, CIT(A) DELETE D THE ADDITION OF UNEXPLAINED CASH CREDIT RELATING TO PARTIES MENTION ED IN SL. NO.8 & 9, NAMELY, SMITABEN H. MODH (LOAN OF RS.73,267/-) AND CHANDANB EN NAGINDAS SHAH (LOAN OF RS.2,61,824/-) TOTALING TO RS.3,35,091/- AND CON FIRMED THE ADDITION AT RS.2,42,948/- RELATING TO PRADIP H. MODH AT RS.2,19 ,197/- AND VIJAY KUMAR & CO. AT RS.23,751/- MENTIONED ABOVE AT SL. NO.7 TO 1 0. ON RECEIVING THE CIT(A)S ORDER, ASSESSEE FILED AN APPLICATION U/S.1 54 OF THE ACT BEFORE THE CIT(A) WHEREIN REQUEST WAS MADE TO RECTIFY THE CIT( A)S ORDER DATED 28.01.2011 IN RELATION TO NON ADJUDICATION OF UNEXP LAINED CASH CREDITS FROM THESE PARTIES MENTIONED AT SL. NO.1 TO 6 IN THE LIS T ABOVE TOTALING TO RS.14,57,899/-. ACCORDINGLY, ORDER U/S.154 OF THE ACT WAS PASSED BY CIT(A) ON 23.02.2012 WHO BY REFERRING TO THE REMAND REPORT OF ASSESSING OFFICER WAS SATISFIED THAT APPELLANT WAS ABLE TO ESTABLISH THE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THESE CASH CREDITORS AND ACCORDINGLY , DELETED THE ADDITIONS OF RS.14,57,899/- MADE BY ASSESSING OFFICER, WHICH WAS INCLUDED IN THE TOTAL ADDITION OF RS.20,35,938/- MADE BY ASSESSING OFFICE R AT THE TIME OF PASSING ASSESSMENT ORDER. 5. AGGRIEVED REVENUE IS NOW IN APPEAL BEFORE US. L D. D.R. DID NOT MAKE ANY NEW SUBMISSIONS AND RELIED UPON THE ORDER OF AS SESSING OFFICER AND NONE WAS THERE ON BEHALF OF ASSESSEE. ITA NO. 1190/AHD/12 A.Y. 07-08 (ITO VS. M/S. SHREE SUVIDHI TRADERS) PAGE 5 6. WE HAVE HEARD THE RIVAL CONTENTIONS, GONE THROUG H THE FACTS AND CIRCUMSTANCES OF THE CASE AND PERUSED THE MATERIAL ON RECORD. THE REVENUE IS IN APPEAL ONLY IN RELATION TO ORDER OF CIT(A) U/S.1 54 OF THE ACT FOR DELETING ADDITION OF RS.14,57,899/- MADE BY ASSESSING OFFICE R U/S.68 OF THE ACT. OUT OF TOTAL ADDITION OF RS.20,35,938/- MADE BY THE ASSESS ING OFFICER U/S.68 OF THE ACT FOR UNEXPLAINED CASH CREDIT OF RS.14,57,899/- WAS D ELETED BY CIT(A) IN ITS ORDER DATED 23.03.2012, RS.3,35,091/- WAS DELETED BY CIT( A) IN ORDER DATED 28.01.2011 AND ADDITION OF RS.2,42,948/- WAS CONFIR MED BY CIT(A) IN ORDER DATED 28.07.2011. ASSESSEE HAS NOT PREFERRED THE A PPEAL AGAINST THE ADDITION OF RS.2,42,948/- AND REVENUE IS NOT IN APPEAL AGAINST THE DELETION OF ADDITION OF RS.3,35,091/- AND THE PIVOTAL ISSUE REMAINS THE BAL ANCE ADDITION OF RS.14,57,899/-. 6.1 WE HAVE GONE THROUGH REMAND REPORT SUBMITTED BY THE ASSESSING OFFICER VIDE LETTER NO. ACIT/BKC/REMAND REPORT/SST/2010-11 DATED 07.01.2011, WHICH HAS BEEN REPRODUCED ABOVE AND FROM ITS PERUSA L, IT IS CLEAR THAT ASSESSING OFFICER HAS GIVEN SPECIFIC COMMENT FOR THE SIX PART IES SAYING THAT THESE ARE RUNNING ACCOUNTS FOR F.Y. 2005-06 AND F.Y. 2006-07. FOR THE SAKE OF CONVENIENCE, WE AGAIN MENTION THE NAMES AND AMOUNTS OF THESE PARTIES. SL. NO. NAME OF THE LENDER AMOUNT (RS.) 1 DIGMA MODH 12,499 2 MANISHBHAI M. MODH HUF 8,749 3 SAMARTH MEHUL MODH 23,130 4 BHURMAL LADURAM 2,70,267 5 VINOD KUMAR RJENDRAPRASAD 7,19,670 6 PRAKASHCHANDRA J. SHAH 4,23,584 TOTAL 14,57,899 6.2 AS THE ASSESSING OFFICER HAS HIMSELF STATED IN ITS REMAND REPORT THAT ABOVE SIX PARTIES ARE RUNNING ACCOUNTS FOR F.Y. 200 5-06 & 06-07 AND LD. CIT(A) HAS ALSO ACCEPTED THE FACTS MENTIONED IN THE REMAND REPORT, WE DO NOT FIND ANY ITA NO. 1190/AHD/12 A.Y. 07-08 (ITO VS. M/S. SHREE SUVIDHI TRADERS) PAGE 6 REASON TO INTERFERE WITH THE FINDING OF CIT(A) WHO WAS SATISFIED WITH THE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THESE ABOVE REFERRED SIX CASH CREDITORS. ACCORDINGLY, THIS GROUND OF REVENUE IS DISMISSED. 7. IN THE RESULT, THE APPEAL OF REVENUE IS DISMISS ED. THIS ORDER PRONOUNCED IN OPEN COURT ON 26/10/2015 SD/- SD/- ( RAJPAL YADAV) (MANISH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER TRUE COPY S.K.SINHA / COPY OF ORDER FORWARDED TO:- 1. / APPELLANT 2. / RESPONDENT 3. ! '# $ / CONCERNED CIT 4. $ - / CIT (A) 5. %&' (('# , '# , ! / DR, ITAT, AHMEDABAD 6. '+, / GUARD FILE. BY ORDER/ , / '# , !