RITA STEPHEN PINTO, MUMBAI V. ITO 19(2)(2), MUMBAI

ITA 1219/MUM/2013

• Counselvise Citation: [2015] 120 COUNSELVISE.COM (IT) 9221 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 1 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-03-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 15-12-2014
• Assessment Year: 2005-2006
• Appeal Filed On: 12-02-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: LOVE KUMAR
• Assessee Lawyers: A K LAL
• Section: 154; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH D, MUMBAI BEFORE SHRI B. R. BASKARAN, ACCOUNTANT MEMBER AND SHRI AMIT SHUKLA, JUDICIAL MEMBER ITA NO. 1219/MUM/2013 ASSESSMENT YEAR: 2005-06 RITA STEPHEN PINTO J-10 GOLDEN PEBLES, SUNDER NAR SANTACRUZ (E) MUMBAI 400 098 PAN: - AKUPP 3007 E VS. ITO 19(2)(2) PIRAMAL CHAMBER, PAREL MUMBAI 400 012 (APPELLANT) (RESPON DENT) ASSESSEE BY : SHRI A.K. LAL REVENUE BY : SHRI LOVE KUMAR DATE OF HE ARING : 1 7 .03.2015 DATE OF ORDER : 25.03.2015 O R D E R PER AMIT SHUKLA, JM: THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINS T ORDER DATED 29.11.2012 PASSED BY LD. CIT(A) MUMBAI IN RELATION TO THE ORDER PASSED U/S 154 FOR THE A.Y. 2005-06. 2. THE BRIEF FACTS ARE THAT THE, ASSESSEE IS AN IND IVIDUAL RUNNING A COMMUNICATION CENTER AND CYBER CAF. RETURN OF INCO ME WAS FILED ON 28.03.2006 DECLARING TOTAL INCOME OF RS.1,03,229/- ON A GROSS RECEIPTS OF RS.12,44,120/-. THE ASSESSING OFFICER IN THE COU RSE OF THE ASSESSMENT PROCEEDINGS NOTED THAT, THE ASSESSEE HAD RECEIVED U NSECURED LOANS OF RS.1,31,000/- AND RS.1,94,000/- FROM HER BROTHER AN D HER SISTER RESPECTIVELY. THE ASSESSEE HAD STATED THAT BOTH OF THEM WERE NRI AND ITA NO. 1219/MUM/2013 ASSESSMENT YEAR: 2005-06 2 IN SERVICE FOR VERY LONG TIME IN U.A.E. ASSESSING O FFICER OBSERVED THAT, ASSESSEE HAS FAILED TO PRODUCE ANY EVIDENCE TO PROV E THE IDENTITY, CAPACITY AND CREDIT WORTHINESS OF THE LOAN CREDITOR S. ACCORDINGLY, HE ADDED THE SAID LOAN AMOUNT CREDIT RS.3,25,000/- U/S 60A. AGAINST THE SAID ASSESSMENT ORDER DATED 28.12.2007, ASSESSEE DI D NOT FILED ANY APPEAL BEFORE THE FIRST APPELLATE AUTHORITY. INSTEA D THE ASSESSEE FILED A PETITION FOR RECTIFICATION U/S 154 DATED 05.02.2008 STATING THAT THE SAID LOAN HAS WRONGLY BEEN ADDED IN THIS YEAR BECAUSE, S AID LOAN WAS TAKEN FROM THE BROTHER AND SISTER PRIOR TO A.Y. 1997-98, WHICH IS ALSO REFLECTED IN THE BALANCE SHEET AND RETURN OF INCOME FILED FRO M TIME TO TIME, RIGHT FROM THE A.Y. 1997-98 ONWARDS. THE COPY OF BALANCE SHEET RETURN OF INCOME FROM THE A.Y. 2003-04 ONWARDS WERE ALSO FILE D. IT WAS ALSO STATED THAT DURING THE COURSE OF THE ASSESSMENT PRO CEEDINGS LOAN CONFIRMATION WAS NOT REQUIRED BY THE AO, THEREFORE, THERE WAS NO OCCASION TO FILE THE SAME. THE ASSESSING OFFICER HO WEVER REJECTED THE ASSESSEES APPLICATION ON THE GROUND THAT, THERE IS NO MISTAKE APPARENT ON THE RECORD WITHIN SECTION 154, IN THE ASSESSMENT ORDER DATED 28.12.2007. 3. BEFORE THE LD.CIT(A), THE ASSESSEE SUBMITTED THA T, DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS, THE ASSESSEE HAD SUBMITTED ALL DETAILS OF THE LOAN TAKEN FROM THE BROTHER AND HER SISTER ALONG WITH THE ADDRESS HOWEVER, THE ASSESSING OFFICER DID NOT RAIS E FURTHER QUERY OR CALLED FOR LOAN CONFIRMATION. IN ANY CASE, BOTH THE LOANS WERE TAKEN IN MUCH EARLIER YEARS AND WERE DULY REFLECTED IN THE BALANCE SHEET OF THE EARLIER YEARS. THEREFORE, SAME CANNOT BE ADDED IN T HIS YEAR U/S 68. HOWEVER, THE LD.CIT(A) UPHOLD THE ACTION OF THE AO ON THE GROUND THAT ITA NO. 1219/MUM/2013 ASSESSMENT YEAR: 2005-06 3 THERE IS NO MISTAKE APPARENT FROM RECORD WITHIN THE MEANING OF SECTION 154. 4. AFTER HEARING BOTH THE PARTIES AND ON PERUSAL OF THE MATERIAL PLACED ON RECORD, IT IS NOTICED THAT THE ASSESSEE W AS REQUIRED TO FURNISH THE DETAILS OF UNSECURED LOAN, IN RESPONSE, THE ASS ESSEE HAD STATED AS UNDER:- TEMPORARY LOAN FROM BROTHER MR. JERALD LAWRENCE CO UTINHO WHO IS IN SERVICE AT ABROAD, HIS PRESENT ADDRESS IS POS T BOX NO. 46086, ABU DHABI (U.A.E.) THE BALANCE LOAN PAYABLE TO HIM IS RS.1,31,000/- AND FROM SISTER MRS. NANCY DSOUZA NE E NANCY LAWRENCE COUTINHO WHO IS IN SERVICE AT ABROAD AND H ER PRESENT ADDRESS IS POST BOX NO. 3740, ACCIDENT UNIT, ZYED M ILLATARY HOSPITAL ABU DHABI (U.A.E.) THE BALANCE LOAN PAYABL E TO HER IS RS.1,94,000/-. HOWEVER, NO CONFIRMATION OR OTHER DETAILS WERE FILE D. THE ASSESSING OFFICER, THUS ADDED THE SAID LOAN AMOUNT UNDER THE DEEMING PROVISIONS OF SECTION 68. INSTEAD OF FILING APPEAL BEFORE THE FIRST APPELLATE AUTHORITY, THE ASSESSEE FILED PETITION FOR RECTIFICATION U/S 1 54, ON THE GROUND THAT LOAN HAS WRONGLY BEEN ADDED IN THIS YEAR AS IT WAS AN OLD LOAN DULY REFLECTED IN THE INCOME TAX RECORDS OF THE EARLIER YEARS AS THE LOAN WAS TAKEN IN THE YEAR 1997, FOR THE AMOUNT AGGREGATING TO RS.3,25,000/- .SECTION 68 STIPULATES THAT ANY UNEXPLAINED SUM FOU ND CREDITED IN THE BOOKS OF THE ASSESSEE FOR ANY PREVIOUS YEAR, THEN T HE SAME MAY BE TAXED AS INCOME OF THE ASSESSEE FOR THAT PREVIOUS Y EAR. THUS, SECTION 68 CAN ONLY BE INVOKED IF THE LOAN HAS BEEN TAKEN OR T HE SUMS HAVE BEEN CREDITED IN THE BOOKS IN THE RELEVANT PREVIOUS YEAR FOR WHICH ASSESSMENT IS BEING MADE AND NOT THE LOANS TAKEN IN THE EARLIE R YEARS. FROM THE INCOME TAX RECORDS, IT IS EVIDENT THAT THIS LOAN IS COMING FORWARD FROM LAST SEVERAL YEARS AND IS REFLECTED IN THE BALANCE SHEET OF THE ASSESSEE ITA NO. 1219/MUM/2013 ASSESSMENT YEAR: 2005-06 4 FILED FOR THE EARLIER YEARS ALONG WITH THE RETURN O F INCOME. ALL THESE RECORDS ARE AVAILABLE WITH THE ASSESSING OFFICER. T HE MISTAKE APPARENT FROM RECORD DOES NOT MEAN THE ASSESSMENT ORDER ITSE LF BUT THE RECORDS WHICH ARE AVAILABLE WITH THE ASSESSING OFFICER. THO UGH THE ASSESSEE COULD NOT FURNISH THE CONFIRMATION OF THE LOAN AND OTHER EVIDENCES BUT SUCH A LOAN COULD NOT HAVE BEEN ADDED IN THE A.Y. 2 005-06 AS THE SAME WAS TAKEN IN THE EARLIER YEARS AND IS BEING CARRIE D FORWARD. IN THIS YEAR IT IS APPEARING BALANCE OF THE CURRENT YEAR. THUS, LEGALLY SUCH AN ADDITION COULD NOT SUSTAINED IN THIS YEAR AND THERE FORE ADDITION MADE BY AO U/S 68 IS A LEGAL MISTAKE, WHICH CAN BE RECTIFIE D WITHIN THE AMBIT AND PROVISIONS OF SECTION 154. ACCORDINGLY THE GROUNDS RAISED BY THE ASSESSEE IS TREATED AS ALLOWED. 5. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS TREATED AS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON THIS 25 TH DAY OF MARCH, 2015. SD/- SD/- (B. R. BASKARAN) (AMIT SHUKLA) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 25.03.2015 *SRIVASTAVA COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT(A) CONCERNED, MUMBAI THE DR D BENCH //TRUE COPY// BY ORDER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.