The DCIT, Circle-14, Ahmedabad V. Shri Prahladbhai G. Patel, Ahmedabad

ITA 1256/AHD/2010

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 94548 (ITAT-AHMEDABAD)
• Duration Of Justice: 5 year(s) 5 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-10-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 03-12-2013
• Assessment Year: 2007-2008
• Appeal Filed On: 22-04-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DIPAK SUTARIA
• Keywords: Source of fund
• Section: 142(1); 68

Judgement Text

, B IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER ./ ITA NO.1256/AHD/2010 / ASSTT. YEAR: 2007-2008 DCIT, CIR.14 AHMEDABAD. VS SHRI PRAHALADBHAI G. PATEL A/3, JANKI APARTMENTS B/H. KAVERI COMPLEX NR. SUBHASH BRIDGE CIRCLE AHMEDABAD. PAN : ACKPP 9389 D / (APPELLANT) / (RESPONDENT) REVENUE BY : SHRI DIPAK SUTARIA, SR.DR ASSESSEE BY : NONE ! / DATE OF HEARING : 19/10/2015 '#$ ! / DATE OF PRONOUNCEMENT: 19/10/2015 %& / O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER: THE REVENUE IS APPEAL BEFORE US AGAINST THE ORDER O F THE LD.CIT(A)-XXI DATED 19.2.2010 FOR THE ASSTT.YEAR 20 07-08. THOUGH THE REVENUE HAS TAKEN TWO GROUNDS OF APPEAL, BUT ITS GR IEVANCE REVOLVES AROUND A SINGLE ISSUE, WHEREBY, IT HAS CHALLENGED T HE DELETION OF ADDITION OF RS.12,55,600/- AND RS.3,66,000/- WHICH WAS ADDED BY THE AO WITH THE AID OF SECTION 68 OF THE INCOME TAX ACT . 2. IN RESPONSE TO THE NOTICE OF HEARING, THE LD.COU NSEL FOR THE ASSESSEE HAS FILED A PAPER BOOK, BUT DID NOT APPEAR . WITH THE ITA NO.1256/AHD/2010 2 ASSISTANCE OF LD. DR, WE HAVE GONE THROUGH THE RECO RD CAREFULLY AND PROCEEDED TO DISPOSE OF THE APPEAL EX PARTE QUA THE ASSESSEE. 3. BRIEF FACTS OF THE ASSESSEE ARE THAT THE ASSESSE E HAS FILED ITS RETURN OF INCOME ON 7.8.2007 DECLARING TOTAL INCOME OF RS.5,02,620/-. THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY ASSESSMENT AND NOTICE UNDER SECTION 143(2) WAS ISSUED AND SERVED U PON THE ASSESSEE. ON SCRUTINY OF THE DETAILS, IT CAME TO THE NOTICE O F THE AO THAT THE ASSESSEE WAS HAVING SAVING BANK ACCOUNT WITH STATE BANK OF INDIA WHERE A SUM OF RS.12,55,600/- WAS DEPOSITED DURING THE ACCOUNTING YEAR RELEVANT TO THE ASSESSMENT. THEREFORE, HE IS SUED SHOW CAUSE NOTICE UNDER SECTION 142(1) INVITING EXPLANATION AB OUT THE SOURCE OF SUCH DEPOSIT. IN RESPONSE TO THE QUERY OF THE AO, IT WAS CONTENDED THAT THE ASSESSEE HAD TAKEN UNSECURED LOAN FROM NINE IND IVIDUALS DURING THE YEAR. OUT OF THESE NINE INDIVIDUAL, THREE LOANS WE RE TAKEN THROUGH ACCOUNT PAYEES AND REST WERE RECEIVED IN CASH. AS FAR AS LOANS TAKEN BY CHEQUE, THE AO WAS SATISFIED, BUT WITH REGARD TO LOAN TAKEN IN CASH, THE LD.AO WAS NOT SATISFIED WITH THE EXPLANATION OF THE ASSESSEE. THEREFORE, HE MADE AN ADDITION OF RS.12,55,600/-. SIMILARLY, THE AO ON FURTHER VERIFICATION OF THE ACCOUNTS OF THE ASSESSE E NOTED THAT THE ASSESSEE HAS ANOTHER BANK ACCOUNTS WITH VIJAY CO-OP . BANK AND DENA BANK, WHERE, A SUM OF RS.3,66,000/- WAS FOUND TO BE DEPOSITED DURING THE ACCOUNTING YEAR. HE MADE ADDITION OF THIS AMOU NT ALSO IN THE ABSENCE OF SATISFACTORY EXPLANATION. 4. THE ASSESSEE CARRIED THE MATTER BEFORE THE CIT(A ). THE ASSESSEE HAS CONTENDED THAT HE HAS FILED CONFIRMATION FROM A LL THE CREDITORS, COPIES OF THEIR BANK ACCOUNTS AND COPIES OF FORM NO .7/12 EXHIBITING THE LAND HOLDING HELD BY THEM. ON THE STRENGTH OF THES E EVIDENCES, IT WAS CONTENDED BY THE ASSESSEE THAT ALL THE CREDITORS TO OK LOANS FROM THE BANK AGAINST THEIR LAND HOLDING AND AMOUNTS DEPOSIT ED BY CHEQUES. THEY HAVE WITHDRAWN THE AMOUNT FROM THEIR ACCOUNTS AND GIVEN TO THE ITA NO.1256/AHD/2010 3 ASSESSEE AS LOAN. THUS, THE ASSESSEE HAS PROVED ID ENTITY OF THE CREDITORS, SOURCE OF FUNDS WITH THEM. IT DEMONSTRA TED THEIR CREDIT- WORTHINESS AND GENUINENESS OF THE TRANSACTION, BECA USE, THE ASSESSEE HAS FILED THE CONFIRMATION. THE LD.FIRST APPELLATE AUTHORITY HAS NOTED ALL THESE DETAILS IN TABULAR FORM AT PAGE NO.4 OF THE I MPUGNED ORDER. THE LD.CIT(A) WAS SATISFIED WITH THE EXPLANATION OF THE ASSESSEE AND DELETED THE ADDITION. 5. BEFORE US, THE LD.DR CONTENDED THAT IF THE BANK ACCOUNTS OF THE CREDITORS ARE BEING PERUSED, THEN IT WOULD REVEAL T HAT THE AMOUNTS HAVE BEEN DEPOSITED IN THEIR ACCOUNT ON THAT VERY DAY AN D WITHDREW THE AMOUNTS IN CASH AND GIVEN TO THE ASSESSEE. THE GEN UINENESS OF THE TRANSACTION MIGHT NOT HAVE BEEN DOUBTED, IF THE ASS ESSEE WAS GIVEN THE AMOUNT THROUGH ACCOUNT PAYEE CHEQUE BY CREDITORS. SINCE THEY HAVE WITHDRAWN THE AMOUNT IN CASH, THE POSSIBILITY OF IT S EXPENDITURE FOR SOME OTHER PURPOSE CANNOT BE RULED OUT. ACCORDING TO THE LD.DR, THE ASSESSEE OUGHT TO HAVE TAKEN LOAN BY WAY OF CHEQUES . THE TRANSACTION OF THE ASSESSEE IS NOT ABOVE SUSPICION. 6. WE HAVE CONSIDERED CONTENTIONS OF THE LD.DR AND GONE THROUGH THE RECORD CAREFULLY. SECTION 68 OF THE INCOME TAX ACT CONTEMPLATES THAT WHERE ANY SUM IS FOUND CREDITED IN THE BOOKS O F AN ASSESSEE MAINTAINED FOR ANY PREVIOUS YEAR, AND THE ASSESSEE OFFERS NO EXPLANATION ABOUT THE NATURE AND SOURCE THEREOF, OR THE EXPLANATION OFFERED BY THE ASSESSEE IS NOT, IN THE OPINION OF T HE AO SATISFACTORY, THEN THE SUM CREDITED IN THE ACCOUNTS MAY BE TREATE D AS INCOME OF THE ASSESSEE OF THAT ACCOUNTING YEAR. IT IS PERTINENT TO NOTE THAT THE ASSESSEE HAS FILED CONFIRMATION, BANK STATEMENTS, D ETAILS OF LAND HOLDING, COPIES OF CASH BOOK. THE LD.AO DID NOT MA KE ANY INQUIRY IN ORDER TO ASCERTAIN THE GENUINENESS OF TRANSACTION. A PERUSAL OF SECTION 68 WOULD INTIMATE THAT IN ORDER TO EXPLAIN THE SOUR CE AND NATURE OF THE CREDITS, THE ASSESSEE IS REQUIRED TO DEMONSTRATE ID ENTITY OF PERSONS ITA NO.1256/AHD/2010 4 FROM WHOM SUCH CREDITS HAVE BEEN TAKEN, GENUINENESS OF THE TRANSACTION AND CREDIT WORTHINESS. AS FAR AS THE I DENTITY PART IS CONCERNED, THE ASSESSEE HAS FILED CONFIRMATION AND ALSO FILED DETAILS OF LAND HOLDING. IT MEANS IDENTITY OF THE CREDITORS H AS BEEN PROVED. NEXT ASPECT IS CREDIT-WORTHINESS. THE ASSESSEE HAS FILE D BANK STATEMENT OF THE CREDITORS, WHERE THE AMOUNTS HAVE BEEN DEPOSITE D THROUGH ACCOUNT PAYEE CHEQUES, AND OUT OF WHICH THE AMOUNTS WERE AD VANCED TO THE ASSESSEE. IT MEANS THAT THEIR CREDIT-WORTHINESS IS NOT DOUBTFUL. NO DOUBT THE ASSESSEE HAS TAKEN MONEY IN CASH, THAT GI VES SOME DOUBT ABOUT GENUINENESS OF THE TRANSACTION. THAT ASPECT C OULD HAVE BEEN EXAMINED BY THE AO, HAD HE EXAMINED THE CREDITORS. THAT STEP WAS NOT TAKEN BY THE ASSESSEE. THE LD.FIRST APPELLATE AUTH ORITY HAS APPRECIATED THESE ASPECTS AND THEREAFTER DELETED THE ADDITION A FTER GIVING WELL REASONED ORDER. WE DO NOT FIND ANY REASON TO INTER FERE WITH THE ORDER OF THE LD.CIT(A), WHICH IS CONFIRMED AND THE APPEAL OF THE REVENUE IS DISMISSED. 7. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE COURT ON 19 TH OCTOBER, 2015 AT AHMEDABAD. SD/- SD/- (MANISH BORAD) ACCOUNTANT MEMBER (RAJPAL YADAV) JUDICIAL MEMBER