M/s. Suvidha Estate Developers, Bhavnagar V. The Income tax Officer,Ward-1(1), Bhavnagar

ITA 1270/AHD/2008

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 0517 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 11 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-03-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Next Hearing Date: 30-01-2013
• Assessment Year: 1991-1992
• Appeal Filed On: 10-04-2008
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: T SANKAR
• Keywords: Assessment record
• Section: 68

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, AHMEDABAD , , BEFORE SHRI MUKUL KR.SHRAWAT, JUDICIAL MEMBER AND SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER ./ I.T.A. NO.1270/AHD/2008 ( / ASSESSMENT YEAR : 1991-92) M/S.SUVIDHA ESTATE DEVELOPERS SUVIDHA TOWNSHIP SUBHASHNAGAR BHAVNAGAR / VS. THE INCOME TAX OFFICER WARD-1(1) BHAVNAGAR ' ./#$ ./ PAN/GIR NO. : ABBFS 3123 Q ( '% / APPELLANT ) .. ( &''% / RESPONDENT ) '% ( / APPELLANT BY : SHRI MANISH J.SHAH &''% ) ( / RESPONDENT BY : SHRI T. SANKAR, SR.DR * ) / DATE OF HEARING : 30/1/2013 +,-. ) / DATE OF PRONOUNCEMENT : 15/3/13 / / O R D E R PER SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER : THIS IS AN APPEAL FILED BY THE ASSESSEE ARISING F ROM THE ORDER OF LD.CIT(A)-XX AHMEDABAD DATED 02/01/2008 PASSED FOR A.Y.1991-92 AND THE GROUNDS RAISED ARE REPRODUCED BELOW:- 1. THE CIT (APPEALS) ERRED IN UPHOLDING THE VALIDITY O F NOTICE UNDER SEC.148 OF THE IT ACT, 1961. 1.1. THE CIT(APPEALS) ERRED IN UPHOLDING THAT THE NOTICE HAD BEEN VALIDLY SERVED ON THE ASSESSEE COMPLETELY OVER LOOKING THE FACTUAL SITUATION OF THE CASE. ITA NO.1270/AHD /2008 M/S.SUVIDHA ESTATE DEVELOPERS VS. ITO ASST.YEAR - 1991-92 - 2 - 1.2. THE CIT(APPEALS) OUGHT TO HAVE HELD THAT THE NOTICE WAS NOT VALIDLY SERVED AND HENCE, PROCEEDINGS UNDER SEC .148 WERE BAD IN LAW. 2. THE CIT(APPEALS) ERRED IN NOT TREATING THE CREDITS AS GENUINE IN THE CASE OF N.K.CORPORATION RS.1,52,318/ -, SHETH & CO.RS.1,00,855/- AND SANJAY SURYAKANT SHAH RS.60,237/-. 2. LD.AR MR.MANISH J.SHAH HAS FIRST ARGUED GROUND N OS.1, 1.1 & 1.2 THROUGH WHICH THE PROCEEDINGS INITIATED U/S.148 OF THE IT ACT HAS BEEN CHALLENGED. HE HAS DRAWN OUR ATTENTION ON THE BASI C FACTS AS EMERGED FROM THE IMPUGNED ORDER PASSED U/S.143(3)/147/254 O F THE ACT DATED 20/12/2006 THAT ORIGINAL RETURN WAS FILED ON 31/10/ 1991 WHICH WAS ACCEPTED U/S.143(1) OF THE ACT. ON THE BASIS OF CE RTAIN INFORMATION, THE CASE WAS RE-OPENED BY ISSUANCE OF A NOTICE U/S.148 OF THE ACT DATED 28/05/2001. THE ACCEPTED FACTUAL POSITION WAS THAT IN RESPONSE TO THE SAID NOTICE ISSUED U/S.148, THE ASSESSEE HAD NOT FI LED ANY RETURN. THEREAFTER, AN ASSESSMENT U/S.144/147 WAS COMPLETED ON 12.3.2003 AND THE INCOME WAS ASSESSED AT RS.8,46,890/-. AGAINST THE SAID EX-PARTE JUDGEMENT AN APPEAL WAS FILED BEFORE CIT(A) AND VID E AN ORDER DATED 8.3.2004 THE VALIDITY OF THE ISSUANCE OF THE NOTICE U/S.148 WAS CONFIRMED. IT HAS ALSO BEEN NOTED BY THE AO THAT IN RESPONSE T O THE FIRST NOTICE U/S.142(1), THE ASSESSEE HAD NOT RAISED ANY OBJECTI ON ABOUT THE PROPER SERVICE OF NOTICE U/S.148 OF THE ACT. THE AO HAS FURTHER RECORDED THAT THE NOTICE U/S.148 WAS ADDRESSED TO M/S.SUVIDHA EST ATE DEVELOPERS WHICH WAS RECEIVED BY ONE SHRI VIPUL SHAH ON 30.05. 2001. IT WAS INFORMED TO THE AO THAT THE SAID NOTICE WAS HANDED OVER TO ONE SHRI BHASKAR JANI AN EMPLOYEE OF THE ASSESSEE M/S.SUVIDH A ESTATE DEVELOPERS, C/O.KUSH AUTOMOBILES, VITHALWADI, BHAVN AGAR ON ITA NO.1270/AHD /2008 M/S.SUVIDHA ESTATE DEVELOPERS VS. ITO ASST.YEAR - 1991-92 - 3 - 31.05.2001. THE ISSUANCE OF NOTICE WAS DULY ENTERE D IN THE PEON BOOK MAINTAINED BY THE REVENUE DEPARTMENT. FURTHER, SHR I BHASKAR JANI HAD ACKNOWLEDGED THE RECEIPT OF NOTICE U/S.148 OF THE A CT. IN THE ASSESSMENT ORDER, THERE IS A MENTION OF A LETTER DATED NIL OF ONE SHRI KALPESH KALATHIA AND SHRI RATILAL KALATHIA THROUGH AN ORDER U/S.154 DATED 04/09/2003 WAS RETURNED ON THE GROUND THAT THE SAID ORDER WAS IN THE NAME OF M/S.SUVIDHA ESTATE DEVELOPERS SENT TO THE R ESIDENTIAL ADDRESS, HOWEVER THE FIRM WAS DISSOLVED. SIMULTANEOUSLY, TH E ASSESSEE HAD ALSO FILED AN APPEAL BEFORE THE TRIBUNAL AGAINST THE ORD ER PASSED U/S.154 OF THE ACT. THE ITAT VIDE AN ORDER DATED 03/10/2005 RESTO RED THE MATTER BACK TO THE FILED OF THE AO WITH A DIRECTION TO FURNISH THE REASONS RECORDED FOR RE-OPENING OF THE ASSESSMENT. FOLLOWING THE DIRECT ION, THE ASSESSEE WAS ALLOWED THE INSPECTION OF THE RECORD AND GIVEN THE REASONS RECORDED FOR RE-OPENING OF THE ASSESSMENT. THE ASSESSEE HAS AGA IN CHALLENGED THE ISSUE OF SERVICE OF THE NOTICE. THAT CHALLENGE WAS DISMISSED BY THE AO IN THE FOLLOWING MANNER:- NOW HE IS CHALLENGING THE ISSUE OF SERVICE OF NO TICE. IN RESPONSE TO LOT OF NOTICES SERVED ON THE FIRM ON DI FFERENT DATES, THE ASSESSEE HAS MENTIONED IN THE LETTER THAT THE FIRM IS DISSOLVED, BUT FILED THE LETTERS ON THE PAD OF M/S.SUVIDHA ESTATE DEVELOPERS, SUVIDHA TOWNSHIP, AIRPORT ROAD, BHAVNAGAR. IN THE RECENT LETTER DATED 6.12.2006 REGARDING CLAIM OF INTIMATION OF DI SSOLUTION OF FIRM, IT IS ALSO SURPRISING THAT THE FIRM IS ASSESS ED IS WARD-1(1) BUT HE HAS CLAIMED TO HAVE FILED THE LETTER (PAGE 1 OF SUBMISSION FILED) DATED 31.03.1996 IN WARD-2. THIS LETTER IS ALSO WI THOUT ANY SIGNATURE OF ANY PERSON RECEIVING THIS LETTER IN TH IS OFFICE. THIS IS PURELY A CONCOCTED STORY ONLY TO PROVE THAT HE WILL NOT FILE THE DOCUMENTS AS REQUESTED BY THE DEPARTMENT. IN RESPO NSE TO THE FINAL NOTICE, THE ASSESSEE FILED ONLY LETTER DATED 06.12.2006 CHALLENGING THE SERVICE OF NOTICE U/S.148 OF THE AC T. AS PER SEC.149 OF THE I.T.ACT, NOTICE IS TO BE ISSUED WITH IN THE TIME PERIOD ITA NO.1270/AHD /2008 M/S.SUVIDHA ESTATE DEVELOPERS VS. ITO ASST.YEAR - 1991-92 - 4 - PRESCRIBED WHICH HAS BEEN DONE IN THE CASE. THE NO TICE CAN BE SERVED AFTERWARDS. THUS, NOTICE HAS BEEN PROPERLY ISSUED. IT HAS COME INTO THE NOTICE OF ASSESSEE ALSO. HE MUST HAV E TAKEN PAINS TO COMPLY WITH THE NOTICE. I AM CONSTRAINED TO PASS T HE ORDER U/S.143(3) TAKING INTO CONSIDERATION THE REPLY FILE D, PAPER AVAILABLE ON RECORD, COPY OF THIS LETTER FORMS PART OF THE ORDER AS HE IS BENT UPON NOT COMPLYING WITH ANY OF THE NOTIC ES. AS THE PROCEEDINGS IS A TIME-BARRING ONE, THERE IS NO ALTE RNATIVE BUT TO COMPLETE THE ASSESSMENT TAKING INTO CONSIDERATION T HE MATERIAL AVAILABLE ON RECORD U/S.143(3) OF THE I.T.ACT. 3. BEING AGGRIEVED, THIS ISSUE WAS CARRIED BEFO RE THE FIRST APPELLATE AUTHORITY AS WELL WHO HAS ALSO REJECTED THE AFORESA ID CHALLENGE IN THE FOLLOWING MANNER:- 3.4. I HAVE CONSIDERED THE FACTS OF THE CASE, SUBM ISSION MADE BY THE LD.COUNSEL FOR THE APPELLANT AND REMAND REPORT OF THE A.O. AND ALSO COMMENTS THEREON MADE BY THE APPELLANT. IN TH IS CASE, IT IS NOT A DISPUTED FACT THAT THE NOTICE U/S.148 WAS SER VED BUT THE APPELLANT HAS CHALLENGED THAT THE SERVICE OF THE NO TICE WAS NOT PROPERLY MADE. IN THIS CASE, THE APPELLANT HAS CLA RIFIED THAT THE FIRM WAS DISSOLVED IN THE YEAR 1995. THEREFORE, TH E NOTICE WAS TO BE SERVED BY WAY OF THE APPELLANT FIRM TO THE AUTHO RISED REPRESENTATIVE OF THE APPELLANT AT THE TIME OF DISS OLUTION OF THE FIRM OR THE PARTNERS OF THE FIRM. IN THIS CASE NOT ICE IS SERVED TO THE APPELLANT THROUGH HIS EX-ADVOCATE. IN THE FACTS AN D CIRCUMSTANCES OF THE CASE AND THAT NOTICE DATED 06.12.2001 ISSUED U/S.142(1) WAS ALSO RESPONDED BY THE APPELLANT VIDE LETTER DATED 1 4.12.2001, I HOLD THAT THE NOTICE WAS SERVED ON THE APPELLANT PR OPERLY. HENCE, THE LEGAL GROUND RAISED BY THE APPELLANT IS REJECTE D. 4. NOW BEFORE US, LD.AR MR.MANISH J.SHAH HAS VEHEME NTLY ARGUED THAT THE REVENUE DEPARTMENT HAS NOT SERVED THE NOTI CE PROPERLY. THE REVENUE DEPARTMENT HAD CLAIMED THAT THE NOTICE WAS SERVED ON ONE SHRI VIPUL R.SHAH STATED TO BE S/O.SHRI R.P.SHAH ADVOCAT E. THE SERVICE OF NOTICE ON THE SON OF THE ADVOCATE WAS NOT A PROPER SERVICE OF NOTICE ITA NO.1270/AHD /2008 M/S.SUVIDHA ESTATE DEVELOPERS VS. ITO ASST.YEAR - 1991-92 - 5 - BECAUSE HE WAS NOT AUTHORIZED BY THE ASSESSEE TO RE CEIVE ANY NOTICE ON ITS BEHALF. LD.AR HAS ALSO CONTESTED THE CORRECTNESS O F THE SIGNATURE OF SHRI VIPUL SHAH. SINCE SHRI VIPUL SHAH HAS NOT REPRESEN TED THE ASSESSEE, THEREFORE THE SERVICE OF NOTICE WAS ILLEGAL AND VOI D AB INITIO. LD.AR MR. MANISH J.SHAH HAS INFORMED THAT AN ADVOCATE SHRI A. J.PAREKH WAS REPRESENTING THE ASSESSEE AT THAT RELEVANT TIME. T HE ASSESSEE HAD NEVER AUTHORIZED ANYONE TO ACCEPT ANY NOTICE ON ITS BEHAL F. HE HAS ALSO ARGUED THAT THE FIRM WAS DISSOLVED AS PER THE PROVI SIONS OF SECTION 283 OF IT ACT, THEREFORE THE SERVICE OF NOTICE WAS OTHERWI SE ILLEGAL. FROM THE BEGINNING THROUGH VARIOUS LETTERS, COPIES CONTAINED IN THE PAPER-BOOK, THE ASSESSEE HAD CHALLENGED THE PROPER SERVICE OF NOTIC E. FOR THIS LEGAL PROPOSITION THAT THERE WAS NO VALID SERVICE OF NOTI CE ON ANY OF THE AUTHORIZED PERSON, LD.AR HAS PLACED RELIANCE ON THE FOLLOWING CASE LAWS:- SR.NO(S) IN THE CASE OF REPORTED IN. 1. ANIL K.GOEL 163 TAXMAN 167 (LUCK) 2. RAJEEV KUMAR DANERIA 94 ITD 345 (AGRA) 3. SUDEV INDUS. LTD. 98 TTJ 97 (DEL.) 4. DULI CHAND LUXMI NARAIN 89 ITD 426 (DEL.) 5. CIT VS. RAJESH KUMAR SHARMA 311 ITR 235 (DEL.) 6. ADDL.CIT VS. PREM KUMAR RASTOGI 142 ITR 381 (ALL.) 5. FROM THE SIDE OF THE REVENUE, LD.SR.DR MR.T.SHAN KAR HAS SUPPORTED THE VIEW TAKEN BY THE AO AND THE CIT(A). 6. WE HAVE HEARD BOTH THE SIDES AT SOME LENGTH. WE HAVE ALSO PERUSED THE CONTENTS OF THE COMPILATION IN THE LIGH T OF THE ORDERS OF THE REVENUE AUTHORITIES. ON DUE CONSIDERATION OF THE F ACTS AND CIRCUMSTANCES OF THE CASE, WE ARE NOT CONVINCED WIT H THE SUBMISSIONS OF ITA NO.1270/AHD /2008 M/S.SUVIDHA ESTATE DEVELOPERS VS. ITO ASST.YEAR - 1991-92 - 6 - THE ASSESSEE THAT THERE WAS NO VALID SERVICE OF THE IMPUGNED NOTICE. FACTS HAVE REVEALED THAT THE REVENUE DEPARTMENT HAD ISSUED A NOTICE WHICH WAS RECEIVED BY ONE SHRI VIPUL SHAH. THE ACT ION OF THE REVENUE DEPARTMENT APPEARED TO BE BONA FIDE BECAUSE THE ADM ITTED FACTUAL POSITION WAS THAT THE FATHER OF SHRI VIPUL SHAH, NA MELY SHRI R.P.SHAH ADVOCATE WAS ADMITTEDLY THE LEGAL REPRESENTATIVE OF THE ASSESSEE. WHEN HE WAS REMOVED AS A LEGAL REPRESENTATIVE AND WHEN A NEW ADVOCATE WAS APPOINTED NAMELY, SHRI A.J. PAREKH THAT CHANGE HAD NOT BEEN COMMUNICATED BY THE ASSESSEE. RATHER, IT WAS THE D UTY OF THE ASSESSEE TO PLACE ON RECORD THE NAME OF THE ADVOCATE IN CASE OF ANY CHANGE. THIS IS NOT THE CASE OF THE ASSESSEE THAT ALTHOUGH IT WAS I N THE KNOWLEDGE OF THE REVENUE DEPARTMENT THAT IN PLACE OF ADVOCATE SHRI S HAH A NEW ADVOCATE SHRI PAREKH HAS BEEN APPOINTED BUT STILL T HE NOTICE WAS SERVED AT THE CHAMBER OF SHRI SHAH ADVOCATE. THE REVENUE DEPARTMENT SHOULD HAVE ACTED ON THE BASIS OF THE INFORMATION AVAILABL E ON RECORD. THE OBLIGATION AS ALSO THE ONUS WAS ON THE ASSESSEE TO KEEP ON INFORMING THE REVENUE DEPARTMENT ABOUT THE CHANGE OF ANY LEGAL RE PRESENTATIVE, I.E. ADVOCATE. WE ARE THEREFORE OF THE VIEW THAT THE LA PSE WAS ON THE PART OF THE ASSESSEE AND WAS NOT ON THE PART OF THE REVENUE DEPARTMENT. WE HAVE ALSO NOTED THAT SHRI VIPUL SHAH HAS ACTED IN A SENSIBLE AND WISE MANNER BY HANDING OVER TO ONE SHRI BHASKAR JANI AN EMPLOYEE OF THE ASSESSEE. MEANING THEREBY, THE ASSESSEE IN TURN WA S ALSO SERVED WITH THE NOTICE OR CAME TO KNOW ABOUT THE SERVICE OF THE NOT ICE U/S.148 OF THE ACT. THE ASSESSEE HAS NOT DENIED THE FACT THAT THE SAID NOTICE WAS NOT HANDED OVER TO ITS EMPLOYEE, I.E. MR.BHASKAR JANI. IN THE LIGHT OF THE EXISTENCE OF THESE FACTS, WE HEREBY HOLD THAT THE POSITION OF TH E SERVICE OF THE NOTICE IS ITA NO.1270/AHD /2008 M/S.SUVIDHA ESTATE DEVELOPERS VS. ITO ASST.YEAR - 1991-92 - 7 - VERY MUCH CLEAR AS ALSO ACCORDING TO THE PROVISIONS OF LAW. IN OUR HUMBLE UNDERSTANDING THE ONUS WAS ON THE ASSESSEE T O INFORM THE REVENUE DEPARTMENT ABOUT ANY CHANGE OF THE AUTHORIZ ED LEGAL REPRESENTATIVE. OTHERWISE, ON THE PART OF THE REV ENUE DEPARTMENT THE ACTION OF SERVICE OF NOTICE WAS PURELY ON THE BASIS OF THE INFORMATION AVAILABLE ON RECORD, HENCE LEGALLY VALID. THIS IS NOT THE CASE THAT THE REVENUE DEPARTMENT HAD DELIBERATELY SERVED THE NOTI CE ON AN UNCONNECTED PERSON. IT IS ALSO NOT THE CASE THAT N OTICE WAS SERVED ON A GUARD OF A FACTORY WHO IN TURN HAS NOT COMMUNICATED TO THE CONCERNED PERSON AS IT WAS HELD IN ONE OF THE CASE LAWS CITED BY LD.AR. AN ANOTHER PLEA HAS ALSO BEEN RAISED THAT THE FIRM WAS DISSOLV ED BUT AGAIN WE HEREBY MAKE IT CLEAR THAT THE CHANGE IN THE CONSTITUTION O F THE FIRM WAS TO BE INFORMED BY THE ASSESSEE TO THE CONCERNED OFFICER H AVING THE JURISDICTION AND IT WAS A REQUIREMENT OF THE LAW. IT IS NOT FAI R AS ALSO REASONABLE ON THE PART OF THE ASSESSEE TO SHIFT THE BURDEN ON THE REVENUE DEPARTMENT. IN VIEW OF THESE PECULIAR FACTS AND CIRCUMSTANCES O F THE CASE, WE HEREBY UPHOLD THE VALIDITY OF THE SERVICE OF NOTICE AS HEL D BY THE AUTHORITIES BELOW. GROUNDS RAISED IN THIS REGARD ARE HEREBY DI SMISSED. 7. APROPOS TO GROUND NO.2, THE THREE ADDITIONS WER E MADE BY THE INVOCATION OF THE PROVISIONS OF SECTION 68 OF THE A CT AS FOLLOWS:- 1. N.K.CORPORATION RS.1,52,318/- 2. SHETH & CO. RS.1,00,855/- 3. SANJAY SURYAKANT SHAH RS. 60,237/- ITA NO.1270/AHD /2008 M/S.SUVIDHA ESTATE DEVELOPERS VS. ITO ASST.YEAR - 1991-92 - 8 - 7.1. IN RESPECT OF N.K.CORPORATION, THE ADMITTED FA CTUAL POSITION IS THAT A CONFIRMATION WAS SUBMITTED BY THE ASSESSEE AS NOT ED BY THE AO AT PAGE NO.4 IN PARAGRAPH NO.9 OF THE ASSESSMENT ORDER. FU RTHER, IT WAS ALSO NOTED BY THE AO THAT A COPY OF THE BANK ACCOUNT OF THE SAID PARTY WAS OBTAINED FROM BHAVNAGAR MERCANTILE CO-OP.BANK. ON THE BASIS OF THE SAID BANK ACCOUNT, IT WAS FOUND BY THE AO THAT THE ACCOUNT WAS OPENED ON 11.02.1991. THE OBSERVATION OF THE AO WAS THAT THE CASH AMOUNT WAS DEPOSITED AND CHEQUES WERE ISSUED TO ONE M/S.MALVI SHIP BREAKING CO. A SUMMON U/S.131 OF THE ACT WAS ISSUED AND IN COMPL IANCE, THE PROPRIETOR SHRI NIRAV K.SHETH ATTENDED AND HIS STAT EMENT WAS RECORDED BY THE AO. IT WAS NOTED THAT THE SAID PROPRIETORSH IP-CONCERN WAS DOING THE BUSINESS OF TRADING IN CHEMICALS. THE AOS OBS ERVATION WAS THAT THE INCOME OF THE FAMILY WAS NOMINAL AND IN THE STATEM ENT, IT WAS STATED THAT HE HAD NO KNOWLEDGE ABOUT THE ISSUANCE OF CHEQUES G IVEN TO M/S.MALVI SHIP BREAKING CO. A SUMMON HAS ALSO BEEN ISSUED TO HIS FATHER SHRI KIRAN V. SHETH WHO HAD EXPRESSED HIS INABILITY TO P RESENT HIMSELF IN THE OFFICE DUE TO HEART-PROBLEM. A LETTER WAS WRITTEN BY SHRI KIRAN V.SHETH TO THE AO GIVING THE DETAILS OF CHEQUES OF N.K.CORP ORATION TO M/S.MALVI SHIP BREAKING CO. AND THOSE TRANSACTIONS WERE STATE D TO BE RECORDED IN THE BOOKS OF ACCOUNTS OF THE CONCERN. LATER ON, TH ROUGH AN ANOTHER LETTER CONTRADICTORY STATEMENT WAS MADE BY SHRI KIRAN V.SH ETH. THE AO HAS NOTED FEW FACTS ABOUT AN ALLEGED FALSE SUBMISSION O F RETURN AND THEREAFTER CONCLUDED THAT THE SUM OF RS.1,52,318/- FOUND CREDI TED IN THE NAME OF NK CORPORATION WAS TO BE CHARGED IN HANDS OF THE AS SESSEE U/S.68 OF THE ACT. ITA NO.1270/AHD /2008 M/S.SUVIDHA ESTATE DEVELOPERS VS. ITO ASST.YEAR - 1991-92 - 9 - 8. WHEN THE MATTER WAS CARRIED BEFORE THE FIRST APP ELLATE AUTHORITY, IT WAS INFORMED THAT IN THE CASE OF M/S.MALVI SHIP BRE AKING CO., THE DEPOSIT OF M/S.N.K.CORPORATION WAS HELD AS GENUINE BY THE TRIBUNAL IN ITA NO.231/AHD/95 FOR AY 1991-92. THE LD.CIT(A) HA S RELIED UPON AN ORDER OF ITAT RAJKOT PRONOUNCED IN AN UNCONNECTED C ASE FOR THE LEGAL PROPOSITION THAT THE ASSESSEE WAS REQUIRED TO PROVE THE CREDITWORTHINESS AND THE GENUINENESS OF THE TRANSACTION. HE WAS OF THE VIEW THAT THE SAID DEPOSITOR COULD NOT EXPLAIN THE SPECIFIC INSTANCES OF AVAILABILITY OF FUNDS AND IN THE ABSENCE OF ANY POSITIVE MATERIAL A HUGE LOAN AMOUNT BY THE SAID CREDITOR WAS NOT ACCEPTABLE. AFTER CITING FEW CASE LAWS, THE ACTION OF THE AO WAS CONFIRMED. 8.1. IN RESPECT OF THE SECOND ADDITION OF RS.1,00,8 55/- IN THE NAME OF SHETH & CO., THE OBSERVATION OF THE AO WAS THAT THE ASSESSEE HAD FAILED TO PROVE THE GENUINENESS, CREDITWORTHINESS AND THE IDENTITY OF THE SAID CREDITOR, HENCE TAXED U/S.68 OF THE ACT IN THE HAND S OF THE ASSESSEE. THE FIRST APPELLATE AUTHORITY HAS CONFIRMED THE ACTION OF THE AO. 8.2. IN RESPECT OF THE THIRD IMPUGNED ADDITION, NOW CHALLENGED BEFORE US, IN THE NAME OF SANJAY SURYAKANT SHAH OF RS.60,2 37/-, THE AO HAS FOUND THE SAID AMOUNT AS PART OF THE GROUP OF SUCH DEPOSITORS WHO HAVE NOT PROVED THE GENUINENESS, CREDITWORTHINESS AND ID ENTITY OF THOSE PARTIES, THEREFORE TAXED U/S.68 OF THE ACT. 8.3. WHEN THE MATTER WAS CARRIED BEFORE THE FIRST A PPELLATE AUTHORITY, THE LD.CIT(A) HAD AFFIRMED THE ACTION OF THE AO ON THE GROUND THAT THE ITA NO.1270/AHD /2008 M/S.SUVIDHA ESTATE DEVELOPERS VS. ITO ASST.YEAR - 1991-92 - 10 - SAID DEPOSITOR WAS NOT FOUND TO BE AN INCOME-TAX AS SESSEE. EVEN THE CONFIRMATION WAS SIGNED BY SOMEONE ON BEHALF OF THE SAID DEPOSITOR, THE ACTION OF THE AO WAS CONFIRMED. 9. AT THE OUTSET, LD.AR HAS VEHEMENTLY PLEADED THAT CERTAIN IMPORTANT FACTS HAVE BEEN IGNORED BY THE REVENUE DEPARTMENT A ND THOSE FACTS WERE NOT DISCUSSED IN THE ORDERS ALTHOUGH VERY MUCH PART OF THE ASSESSMENT RECORD. HE HAS INFORMED THAT ON THE LOAN AMOUNTS T HE ASSESSEE HAD PAID INTEREST TO THOSE PARTIES AND DEDUCTED TDS THEREON. HE HAS FURNISHED ON RECORD THE DETAILS OF THE TDS AMOUNT WHICH WAS DEDU CTED IN RESPECT OF THESE PARTIES RESPECTIVELY OF RS.2,520/- OF N.K. CO RPORATION AND RS.2,352/- IN THE CASE OF SHETH & CO. A CHART OF D ETAILS OF DEDUCTION OF TDS IS PLACED ON RECORD TO DEMONSTRATE THAT A SUM O F RS.1,50,000/- WAS RECEIVED ON 01/04/1991 FOR 12 MONTHS FOR A MONTHLY INTEREST OF RS.1.25% AND SO THE INTEREST WAS PAID TO RS.22,500/- ON WHIC H THE TDS @ 11.25% WAS DEDUCTED. LIKEWISE, IN THE CASE OF SHETH & CO. AN AMOUNT OF RS.1 LAC WAS RECEIVED ON 01/04/1991 FOR 12 MONTHS F OR INTEREST @ 1.75%, HENCE PAID AN AMOUNT OF RS.21,000/- AS INTEREST ON WHICH TDS @ 11.25% WAS DEDUCTED. ONCE THE TDS WAS DEDUCTED ON THE IMPUGNED INTEREST, THEN NATURALLY THERE WAS NO INFRINGEMENT OF LAW. WHEN THE BALANCE-SHEET WAS DRAWN OF THE ASSESSEE, ALL THE TH REE AMOUNTS HAVE BEEN APPEARED IN THE BOOKS OF ACCOUNTS REGULARLY MAINTAI NED BY THE ASSESSEE. LATER ON, IN THE SUBSEQUENT FINANCIAL YEARS, THE AS SESSEE HAS ALSO REPAID THE AMOUNT WITH INTEREST THROUGH A/C.PAYEE CHEQUES AND IN THAT MANNER, THE OUTSTANDING AMOUNTS SHOWN AS LOAN IN THE BOOKS GOT SQUARED UP BY THE ASSESSEE. ITA NO.1270/AHD /2008 M/S.SUVIDHA ESTATE DEVELOPERS VS. ITO ASST.YEAR - 1991-92 - 11 - 10. IN THE LIGHT OF THE CONFIRMATIONS ON RECORD AND THE DETAILS OF THE TDS WAS MADE AVAILABLE TO ESTABLISH THAT THE LOANS WERE GENUINE BECAUSE TDS WAS DEDUCTED. WE FIND FORCE IN THE PLEADINGS O F LD.AR. SPECIALLY WHEN THE ASSESSEE HAS DEDUCTED THE TDS WHICH WAS DE POSITED IN THE EXCHEQUER OF THE REVENUE DEPARTMENT AND LATER ON RE PAID THE AMOUNT THROUGH A/C.PAYEE CHEQUES TO THOSE PARTIES. IN ONE OF THE CASE, A STATEMENT HAS ALSO BEEN RECORDED OF THE SAID DEPOS ITOR WHICH HAS DEMONSTRATED THE IDENTITY OF THE PERSON. FOR REST OF THE CASES, THE IDENTITY OF THE DEPOSITORS WAS ALSO ESTABLISHED BY THE ASSES SEE BECAUSE THEIR CONFIRMATIONS WERE DULY FILED DURING THE COURSE OF ASSESSMENT PROCEEDINGS. WE THEREFORE HOLD THAT THERE WAS NO OCCASION TO INVOKE THE PROVISIONS OF SECTION 68 OF THE ACT CONSIDERING THE SEVERAL ROUNDS OF PROCEEDINGS BEING HELD IN THE CASE OF THE ASSESSEE AS ALSO THE EVIDENCES PLACED ON RECORD. RESULTANTLY, THE ADDITIONS MADE U/S.68 OF THE ACT IN RESPECT OF THESE THREE PARTIES STOOD DELETED. GROU ND RAISED IN THIS REGARD IS HEREBY PARTLY ALLOWED. 11. IN THE RESULT, ASSESSEES APPEAL IS PARTLY AL LOWED. SD/- SD/- ( ) ( ) ( ANIL CHATURVEDI ) ( M UKUL KR. SHRAWAT ) ACCOUNTANT MEMBER JU DICIAL MEMBER AHMEDABAD; DATED 15/ 3 /2013 0.., .../ T.C. NAIR, SR. PS ITA NO.1270/AHD /2008 M/S.SUVIDHA ESTATE DEVELOPERS VS. ITO ASST.YEAR - 1991-92 - 12 - !'#$ %$' / COPY OF THE ORDER FORWARDED TO : 1. '% / THE APPELLANT 2. &''% / THE RESPONDENT. 3. 123 4 / CONCERNED CIT 4. 4 () / THE CIT(A)-XX, AHMEDABAD 5. 789 &23, 23., :1 / DR, ITAT, AHMEDABAD 6. 9;< =* / GUARD FILE. & ' / BY ORDER, '7 & //TRUE COPY// (/& )* ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD 1. DATE OF DICTATION DATED 12.3.13 (DICTATION-PAD 33 PAGES ATTACHED) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 13.3.13 OTHER MEMBER 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S15.3.13 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 15.3.13 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 9. DATE OF DESPATCH OF THE ORDER