SHRI PARESH M. PATEL, Ahmedabad V. THE DCIT, CC--1(1), Ahmedabad

ITA 1196/AHD/2009

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 0248 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 9 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-02-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 10-01-2013
• Assessment Year: 2003-2004
• Appeal Filed On: 17-04-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAHUL KUMAR
• Assessee Lawyers: VIJAY RANJAN
• Section: 143(3); 142(1); 153A; 234B; 68; 6

Judgement Text

ITA NO 1196/AHD/20 09. . ASSESSMENT Y EAR 2003- 04 . 1 IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD A BENCH, AHMEDABAD. (BEFORE SHRI G.C.GUPTA, V.P. & SHRI ANIL CHATURVEDI , A.M.) I.T. A. NO. 1 196 /AHD/2009 (ASSESSMENT YEA R: 2003-04) SHRI PARESH M. PATEL, C/O.VISHNU RICE & PULSE MILLS, JETALPUR, TALUKA DASCROI, DIST. AHMEDABAD. (APPELLANT) VS. DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 1(1), AAYAKAR BHAVAN, ASHRAM ROAD, AHMEDABAD. (RESPONDENT) PAN: ACNPP 1709L APPELLANT BY : MR.VIJAY RANJAN RESPONDENT BY : MR. RAHULKUMAR, SR. D.R. ( )/ ORDER DATE OF HEARING : 10-1-201 3 DATE OF PRONOUNCEMENT : 15-2-2013 PER: SHRI ANIL CHATURVEDI, A.M. THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE O RDER OF LD. CIT (A)- III, AHMEDABAD DATED 27-1-2009 FOR THE ASSESSMENT Y EAR 2003-04. 2. THE FACTS AS CULLED OUT FROM THE ORDERS OF LOWER AUTHORITIES ARE AS UNDER. ITA NO 1196/AHD/20 09. . ASSESSMENT Y EAR 2003- 04 . 2 3. A SEARCH OPERATION U/S. 132(1) OF THE INCOME TAX ACT WAS CONDUCTED IN THE CASES OF SHRI SANJAY R. SHAH & MEGHMANI GROU P BY ISSUING A WARRANT OF AUTHORIZATION U/S.132(1) OF THE ACT ON 2 2-9-2005 AND VARIOUS DOCUMENTS/ BOOKS OF ACCOUNTS/OTHER VALUABLE ARTICLE S/OTHER THINGS WERE FOUND AND SEIZED FROM THE VARIOUS PREMISES COVERED UNDER SECTION 132(1) AND 132(1A) OF THE ACT. 4. ON VERIFICATION OF THE VARIOUS DOCUMENTS FOUND A ND SEIZED FROM THE RESIDENTIAL PREMISES OF SHRI LALIT K.PATEL & KANTIB HAI M, PATEL, TRANSACTIONS IN RESPECT OF LAND SITUATED AT VILLAGE JETALPUR PER TAINING TO ASSESSEE/ HIS FAMILY MEMBERS WERE FOUND. THEREFORE, PURSUANT TO P ROVISIONS OF SECTION 153C(1) OF THE ACT PROCEEDINGS U/S. 153C READ WITH SEC.153A OF THE ACT WERE INITIATED AGAINST ASSESSEE BY SERVING NOTICE U /S.153C R.W.S. 153A ON 8-5-2006. SATISFACTION WITHIN THE MEANING OF SEC. 1 53C WAS ALSO RECORDED BEFORE INITIATING THE PROCEEDINGS. IN RESPONSE TO T HE NOTICE ASSESSEE FILED RETURN OF INCOME ON 21-6-2006 DECLARING TOTAL INCOM E AT RS.35,023/-. NOTICES U/S. 143(3) AND 142(1) ALONG WITH THE QUEST IONNAIRE WAS ALSO ISSUED AND SERVED ON THE ASSESSEE. IN RESPONSE TO W HICH THE ASSESSEE FILED ONLY PART SUBMISSIONS. SINCE THE ASSESSEE NEI THER ATTENDED NOR FILED ANY SUBMISSIONS OR EXPLANATION, ASSESSMENT WAS FRAM ED ON 30-11-2007 U/S.153C R.W.S. 153A R.W.S. 144 ON THE BASIS OF TH E RECORD AVAILABLE WITH THE DEPARTMENT AND THE INCOME WAS DETERMINED AT RS. 20,19,229/-. 5. AGGRIEVED BY THE ACTION OF A.O. THE ASSESSEE CAR RIED THE MATTER BEFORE THE CIT (A). CIT (A) VIDE HIS ORDER DATED 2 7-1-2009 PARTLY ALLOWED THE APPEAL OF THE ASSESSEE. ITA NO 1196/AHD/20 09. . ASSESSMENT Y EAR 2003- 04 . 3 6. AGGRIEVED BY THE AFORESAID ORDER OF THE CIT (A ), THE ASSESSEE IS NOW IN APPEAL BEFORE US AND HAS RAISED THE FOLLOWIN G GROUNDS. 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE CIT (A) ERRED IN REJECTING THE ASSESSEES CONTENTION THAT I T IS NOT AT ALL A FIT CASE FOR INVOKING THE PROVISIONS OF SEC. 153C R.W.S . 153A. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE CIT (A) SHOULD HAVE APPRECIATED THAT NO INCRIMINATING MATER IAL OR ANY UNDISCLOSED ASSET WAS FOUND AT ALL FOR ANY OF THE S IX ASSESSMENT YEARS PRIOR TO THE DATE OF SEARCH AND HENCE THE A.O . WAS NOT JUSTIFIED IN REOPENING THE ASSESSMENTS OF ANY OF THESE YEARS BY INVOKING THE PROVISIONS OF SEC. 153C/153A. 3. WITHOUT PREJUDICE, ON THE FACTS AND IN THE CIRCU MSTANCES OF THE CASE THE CIT(A) SHOULD HAVE REALIZED THAT THERE IS NO INCRIMINATING MATERIAL OR UNDISCLOSED ASSET FOUND AT ALL FOR ANY OF THE SIX ASSESSMENT YEARS PRIOR TO THE DATE OF SEARCH AND HE NCE THE A.O. SHOULD HAVE NOT FRAMED THE ASSESSMENT ORDER(S) U/S. 153C R.W.S.253A. 4. WITHOUT PREJUDICE ON THE FACTS AND IN THE CIRCUM STANCES OF THE CASE THE CIT (A) SHOULD HAVE REALIZED THAT THE A.O. WAS NOT JUSTIFIED IN EMBARKING UPON THE PROCESSING AND SCRUTINY OF TH E ASSESSMENT IN A FASHION WHICH WAS PERMISSIBLE U/S. 143(3) BUT IN THIS PARTICULAR CASE IT WAS NOT PERMISSIBLE U/S. 153C R.W.S. 153A. 5. WITHOUT PREJUDICE, ON THE FACTS AND IN THE CIRCU MSTANCES OF THE CASE, THE CIT (A) HAS ERRED IN CONFIRMING THE ADDIT ION OF RS.4,00,000/- FOR TWO LOANS TAKEN FROM ALKABEN & KOKILABEN. 6. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE CIT (A) HAS ERRED IN NOT ACCEPTING THE ASSESSEES PLEA THAT IT WAS NOT AT ALL A FIT CASE FOR LEVY OF INTEREST U/S. 234A & 234B OF T HE I.T. ACT. ITA NO 1196/AHD/20 09. . ASSESSMENT Y EAR 2003- 04 . 4 7. AT THE OUTSET THE LD. A.R. SUBMITTED THAT IT WAS NOT PRESSING GROUND NO.1, 2 AND 3 AND THEREFORE THESE GROUNDS ARE NOT A DJUDICATED AND DISMISSED AS NOT PRESSED. GROUND NO.5 IS WITH RESPECT TO ADDITION OF LOAN TA KEN FROM ALKABEN AND KOKILABEN. 8. ON VERIFICATION OF THE BALANCE SHEET FILED ALONG WITH THE RETURN OF INCOME A.O. NOTICED THAT AN AMOUNT OF RS.26,09,216/ - WAS SHOWN AS CREDITOR/DEPOSITOR AS ON 31-3-2003. OUT OF THE AFOR ESAID AMOUNT RS.15,98,291/- WAS IN THE NAME OF ANADIBEN M. PATEL , NIMDHIN V. PATEL, PADMABEN V. PATEL, PUSHPABEN D.PATEL AND SWAPNIL M. PATEL WHO WERE ASSESSED BY THE SAME A.O. AS THAT OF ASSESSEE. REGA RDING BALANCE DEPOSIT OF RS.10,10,925/- NO DETAILS WERE AVAILABLE TO PROVE THAT THE DEPOSITS WERE GENUINE. ASSESSEE WAS ASKED TO EXPLAI N THE VARIOUS LOANS AND ADVANCES WITH SUPPORTING DOCUMENTARY EVIDENCES. HE WAS ALSO SPECIFICALLY ASKED TO PROVE THE IDENTITY AND CREDIT WORTHINESS AND GENUINENESS OF THE TRANSACTION. SINCE THE ASSESSEE DID NOT FILE ANY DETAILS A.O. HELD THAT THE ASSESSEE HAS FAILED TO DISCHARGE THE ONUS OF PROVING THE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE T RANSACTION AND ACCORDINGLY ADDED RS.10,10,925/- AS UNEXPLAINED CAS H CREDIT. ASSESSEE CARRIED THE MATTER BEFORE CIT (A). CIT (A) AFTER C ONSIDERING THE SUBMISSIONS MADE BY THE ASSESSEE GRANTED PARTIAL RE LIEF TO THE ASSESSEE BY HOLDING AS UNDER:- 15. THE CONTENTIONS/DETAILS IN RESPECT OF THIS GR OUND OF APPEAL, AGITATING THE ADDITION U/S. 68 WERE CAREFULLY CONSI DERED. AS SEEN FROM THE DETAILS/EXPLANATION OF THE APPELLANT (PARTLY RE PRODUCED IN PARA-14 ITA NO 1196/AHD/20 09. . ASSESSMENT Y EAR 2003- 04 . 5 OF THIS ORDER) THE BALANCES REPRESENT TRADING ACCOU NT, RUNNING ACCOUNT, BALANCES BROUGHT FORWARD ETC. APPARENTLY THERE WERE ONLY TWO CASH CREDITORS IN THE FINANCIAL YEAR NAMELY KOK ILABEN PATEL AND ALKABEN VASUDEV, WHOSE DEPOSITS OF RS.1,0,000/- AND RS.2,50,000/- RESPECTIVELY IS STATED TO HAVE BEEN RECEIVED BY ACC OUNT PAYEE CHEQUE AND AFFIRMED BY THEIR CONFIRMATIONS. AS PER THE DETAILS FILED, THE AMOUNT OF RS.2,50,000/- HAD BEEN RECEIVED VIDE CHEQUE NO.0000340 DATED 1-8-2002 ON WHICH INTEREST OF RS.1 450/- HAD BECOME DUE. THE DEPOSIT OF RS.1,50,000/- HAS BEEN S HOWN OF KOKILABEN IS SHOWN RECEIVED BY CHEQUE NO.0000118 DA TED 28-11- 2002. A COPY OF THE BANK ACCOUNT OF ALKABEN IN AHME DABAD DISTRICT CO-OP. BANK HAS BEEN FILED. 15.1. THE PERUSAL OF THE BANK ACCOUNT NO.1115 OF A LKABEN V. PATEL, IN AHMEDABAD DISTRICT CO-OPERATIVE BANK, RECEIVED A N OPENING BALANCE OF RS.808/-IN JULY WHICH IS FOLLOWED BY A CASH DEPOSIT OF RS.1,87,940/- ON 30 TH JULY, 2002 AND ANOTHER CASH DEPOSIT OF RS.65,000/- ON 1-8-2002. ON THE SAME DATE I.E. 1-8 -2002, THE AMOUNT OF RS.2,50,000/- HAS BEEN TRANSFERRED TO THE PROPRIETARY CONCERN OF THE APPELLANT. THE CREDIT BALANCE LEFT IN THE BANK ACCOUNT I.E.RS.3,748/- HAS CONTINUED AS SUCH UPTO SEPTEMBER , 2008, EXCEPT WITH ADDITION OF PETTY AMOUNTS OF BANK INTEREST. TH E STATED CONFIRMATION OF SMT. ALKABEN IS IN FORM OF A SIGNAT URE ON THE COPY OF STATEMENT OF ACCOUNT PREPARED BY THE PROPRIETARY CO NCERN OF THE APPELLANT. THE SIGNATURE IS ALSO NOT AUTHENTICATED. THE GENUINENESS OF THE TRANSACTION AND THE CREDITWORTHINESS OF THE STATED CREDITOR ALKABEN V. PATEL ITSELF IS NOT ESTABLISHED. SIMILAR LY, THE STATED LOAN OF KOKILABEN HAS ALSO NOT BEEN ESTABLISHED WITH RESPEC T TO THE CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTION . BOTH THESE PERSONS DO NOT HAVE PAN. IN CASE OF KOKILABEN NO IN TEREST HAS BEEN SHOWN PAID AND NO CONFIRMATION HAS BEEN FILED. IN T HESE FACTS AND CIRCUMSTANCES, THE ADDITION MADE BY THE A.O. U/S. 6 8 IS JUSTIFIED TO THE EXTENT OF RS.2,50,000/- + RS.1,50,000 I.E. RS. 4 LAKHS AND IS THEREFORE RESTRICTED TO RS.4 LAKHS. THE RELATED GRO UND OF APPEAL IS ALLOWED ACCORDINGLY. 7. AGGRIEVED BY THE ORDER OF CIT (A), ASSESSEE IS N OW IN APPEAL BEFORE US. ITA NO 1196/AHD/20 09. . ASSESSMENT Y EAR 2003- 04 . 6 8. BEFORE US THE LD. A.R. SUBMITTED THAT WITH RESPE CT TO THE TWO CASH CREDITORS NAMELY KOKIKLABEN PATEL AND ALKABEN VASU DEV WHOSE DEPOSITS WERE OF RS.1,50,000/- AND RS.2,50,000/- RESPECTIVEL Y, THE AMOUNT WAS RECEIVED BY ACCOUNT PAYEE CHEQUES AND WAS FURTHER C ONFIRMED BY THE THEIR CONFIRMATIONS. HE FURTHER SUBMITTED THAT IN THE CAS E OF ALKABEN VASUDEV, INTEREST OF RS.1450/- HAD ALSO BECOME DUE. HE FURTH ER SUBMITTED THAT ASSESSING OFFICER DID NOT SUMMON BOTH THE DEPOSITOR S. IN VIEW OF THIS MATTER, HE SUBMITTED THAT ASSESSEE HAS DISCHARGED T HE INITIAL BURDEN CAST UPON HIM AND THEREFORE, URGED THAT THE ADDITION MAD E BY THE A.O. AND CONFIRMED BY CIT (A) BE DELETED. 9. ON THE OTHER HAND THE LD. D.R. POINTED OUT TO TH E FINDING OF CIT (A) WHEREIN IN THE CASE OF ALKABEN VASUDEV PATEL IT WAS OBSERVED THAT IN THE BANK PASS BOOK THE OPENING BALANCE WAS A MINIMUM AN D THERE WERE CASH DEPOSITS WHICH WERE IMMEDIATELY TRANSFERRED TO THE PROPRIETARY CONCERN OF THE ASSESSEE AND THE CREDIT BALANCE LEFT IN THE ACC OUNT WAS TO THE EXTENT OF RS.3,700/- UPTO SEPTEMBER, 2008 EXCEPT ADDITION ON ACCOUNT OF BANK INTEREST. HE FURTHER SUBMITTED THAT BOTH THE DEPOS ITORS NAMELY ALKABEN VASUDEV AND KOKILABEN PATEL DID HAVE PAN AND IN THE CASE OF KOKILABEN NO INTEREST HAS BEEN PAID AND NO CONFIRMATION HAS A LSO BEEN FILED. IN VIEW OF THESE FACTS, HE SUPPORTED THE ORDER OF A.O. AND CIT (A). 10. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PE RUSED THE MATERIAL ON RECORD. BEFORE THE CIT (A),IN RESPECT OF KOKILABEN PATEL IT WAS SUBMITTED THAT SHE IS A NON RESIDENT AND THE AMOUNT OF RS.1,5 0,000/- WAS GIVEN BY HER FROM ACCOUNT PAYEE CHEQUE AND THE COPY OF ACCOU NT OF HER BANK ITA NO 1196/AHD/20 09. . ASSESSMENT Y EAR 2003- 04 . 7 ACCOUNT WAS ALSO SUBMITTED AND THUS THE ASSESSEE HA D DISCHARGED THE INITIAL ONUS CAST UPON. THESE FACTS COULD NOT BE DI SPUTED BY REVENUE BY BRINGING ANY CONTRARY MATERIAL ON RECORD. IN THE C ASE OF ALKABEN VASUDEV, THE AMOUNT OF RS.2,50,000/- WAS RECEIVED BY CHEQUE AND THE COPY OF THE BANK ACCOUNT OF ALKABEN ALONG WITH THE CONFIRMATION WAS ALSO FILED. 11. PROVISIONS OF SECTION 68 REQUIRE THE ASSESSEE TO PROVE THE GENUINENESS OF THE TRANSACTION, CREDITWORTHINESS AN D IDENTITY OF THE DEPOSITORS BY FILING THE CONFIRMATION, BANK ACCOUNT . WE ARE OF THE VIEW THAT THE ASSESSEE HAS DISCHARGED THE INITIAL ONUS CAST U PON IT. THE REVENUE COULD NOT CONTROVERT THE SUBMISSIONS OF THE ASSESSE E. CIT (A) WHILE CONFIRMING THE ADDITION IN THE CASE OF ALKABEN VASU DEV PATEL HAS MAINLY RELIED ON HER BANK STATEMENT. IT IS A SETTLED LAW T HAT THE ASSESSEE CAN ONLY BE ASKED TO PROVE SOURCE OF CREDITS IN ITS BOOKS OF ACCOUNTS AND NOT THE SOURCE OF THE SOURCE OF DEPOSIT. FURTHER THERE IS NOTHING ON RECORD TO PROVE THAT SUMMONS WAS ISSUED TO ALKABEN BY THE REVENUE O R EXPLANATION WAS SOUGHT FROM HER WITH RESPECT TO THE CASH DEPOSITS. ANOTHER REASON FOR CONFIRMING THE ADDITION OF LOAN FROM ALKABEN WAS TH AT THE SIGNATURE ON THE COPY OF CONFIRMATION WAS NOT AUTHENTICATED. NOTHING HAS BEEN BROUGHT ON RECORD BY REVENUE THE PROVISIONS WHICH REQUIRES FOR AUTHENTICATION OF THE SIGNATURE AND THE AUTHORITY WHO WAS REQUIRED TO AUT HENTICATE THE SIGNATURE OF THE DEPOSITOR. IN VIEW OF THE TOTALITY OF THE FA CTS STATED HEREINABOVE WE ARE OF THE VIEW THAT THE ADDITION MADE ON ACCOUNT O F CASH CREDIT NEEDS TO BE DELETED. WE ACCORDINGLY DIRECT THE A.O. ITA NO 1196/AHD/20 09. . ASSESSMENT Y EAR 2003- 04 . 8 12. SINCE OTHER GROUNDS NOT PRESSED AND ARE CONSEQU ENTIAL IN NATURE, SAME ARE NOT ADJUDICATED AND HENCE DISMISSED. 13. THUS THIS APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 15 - 02 - 2013. SD/- SD/- (G.C.GUPTA) (ANIL CHATURVEDI) VICE PRESIDENT ACCOUNTANT MEMBER AHMEDABAD.S.A.PATKI. COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) III, AHMEDABAD. 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT, AHMED ABAD. 1.DATE OF DICTATION 30 -1 -2013 2.DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE TH E DICTATING 7 / 2 / 2013 MEMBER.OTHER MEMBER . 3.DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P.S./P.S 12 - 2 -2013. 4.DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT - -2013 5.DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR .P.S./P.S - -2013 6.DATE ON WHICH THE FILE GOES TO THE BENCH CLERK - -2013. 7.DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 8.THE DATE ON WHICH THE FILE GOES TO THE ASSTT. REG ISTRAR FOR SIGNATURE ON THE ORDER 9.DATE OF DESPATCH OF THE ORDER