The ITO, Ward 1 (3), JAMNAGAR V. Shri Ramji Khajuria Bhadra, JAMNAGAR

ITA 1297/RJT/2010

• Counselvise Citation: 129724914 RSA 2010
• Duration Of Justice: 2 year(s) 6 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-06-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 07-06-2013
• Assessment Year: 2007-2008
• Appeal Filed On: 29-11-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJIV RANADE D R REI
• Assessee Lawyers: PRASHANT MAHARISHI CA I
• Keywords: Unexplained cash credit

Judgement Text

I , IN THE INCOME TAX APPELLATE TRIBULAL; RAJKOT BENCH, RAJKOT. . . . . BEFORE SHRI T. K. SHARMA JM AND SHRI D. K. SRIVASTAVA AM ITA NO. 12 9 7/RJT/2010 R R / ASSESSMENT YEAR 200 7 - 08 THE INCOME - TAX OFFICER, WARD - 1(3), JAMNAGAR . ( / APPELLANT) SHRI RAMJI KHAJURIA BHADRA PROP.SHIVSHAKTI HARWARE, C - 2 - 35,GIDC, STU, JAMNAGAR. PAN : ACDPB3331Q H / RESPONDENT ) I / REVENUE BY SHRI RAJIV RANADE, D R. REI / ASSESSEE BY SHRI PRASHANT MAHARISHI, CA. I / DATE OF HEARING 0 7 - 06 - 2013 I / DATE OF PRONOUNCEMENT 14 - 0 6 - 2013 / ORDER . . , / T. K. SHARMA, J. M. : THIS APPEAL BY THE REVENUE IS AGAINST THE ORDER DATED 20 - 09 - 2010 OF CIT (A), JAMNAGAR DELETING THE ADDITION OF RS. 23,46,393/ - WHICH INTER ALIA INCLUDE THE ADDITION U/S.68 OF THE I. T. ACT, 1961 OF RS.23,46,393/ - MADE BY AO ON ACCOUNT OF UNEXPLAINED CASH CREDIT FOR THE ASSESSMENT YEAR 200 7 - 08. 2. BRIEFLY STATED, THE FACTS ARE THAT THE ASSESSEE IS AN INDIVIDUAL . FOR THE ASSESSMENT UNDER APPEAL, HE FILED THE RETURN OF INCOME ON 31 - 10 - 2007DECLARING TOTAL INCOME OF RS.1, 20,880/ - . THIS RETURN OF INCOME WAS ACCOMPANIED WITH AUDIT REPORT IN THE FORM NO.3CB & 3CD AND OTHER ALLIED ACCOUNTS. AO FRAMED THE ASSESSMENT U/S.144 OF THE I. T. ACT, 1961 WHEREIN, HE MADE ADDITION OF RS.26,49,393/ - ON ACCOUNT OF UNEXPLAINED CASH CREDIT U/S.68 OF THE I.T. ACT, 1961. THIS ADDITION WAS MADE ON THE GROUND THAT ASSESSEE FAILED TO FURNISH THE EVIDENCE IN RESPECT OF CREDITORS. ON APPEAL, IN THE IMPUGNED ORDER, THE LD. CIT (A) DELETED THE ADDITION FOR THE REASONS GIVEN IN PARA - 7(A), WHICH REA D AS UNDER: - A. M/S. LAXMI ENTERPRISES RS.23,46,393/ - THE LENDER IS MRS. RAMILABEN RAMJIBHAI BHADRA CARRYING ON THE BUSINESS AS PROPRIETOR OF M/S. LAXMI ENTERPRISES. SHE IS ASSESSED TO INCOME TAX VIDE PAN AFWPB3443F WITH ITO WARD 1(3), ITA 1 29 7 - 201 0 2 JAMNAGAR. SHE IS WIFE OF THE APPELLANT. AT THE BEGINNING OF THE FINANCIAL YEAR THERE WAS A DEBIT BALANCE IN HER ACCOUNTS IN THE BOOKS OF APPELLANT AND DURING THE YEAR APPELLANT HAS TAKEN LOAN OF RS.23,46,393/ - AND REPAID AN AMOUNT OF RS.22,17,000/ - AND CLOSING CREDIT BALANCE IN HER ACCOUNT WAS RS.1,29,393/ - . DURING THE COURSE OF HEARING APPELLANT HAS SUBMITTED CONFIRMATION STATING NAME AND ADDRESS OF THE PARTY DULY SIGNED BY HER IN THE CONTRA ACCOUNT COPY, COPIES OF AUDITED ACCOUNTS OF M/S. LAXMI ENTERPRISES (LENDER) FOR YEAR ENDED ON 31.6.2006 AND 31.3.2007 WHEREIN UNDER THE HEAD OF LOANS AND ADVANCES SCHEDULE F M/S. SHIVSHAKTI HARDWARE MANUFACTURER, PROPRIETOR CONCERN OF THE APPELLANT IS MENTIONED SHOWING DEBIT BALANCE OF RS.1,29,388/ - , COPIES OF BANK STATEMENT OF M/ S. LAXMI ENTERPRISES OF HDFC BANK AND THE NAWANAGAR COOPERATIVE BANK WHERE FROM THE CHEQUES HAVE BEEN ISSUED TO THE APPELLANT AND A STATEMENT OF SOURCES OF FUNDS SHOWING WHEREFROM THE MONEY IS RECEIVED BY THE LENDER M/S. LAXMI ENTERPRISES FOR ONWARD LENDIN G TO THE APPELLANT SUPPORTED BY SALES BILL OF LAXMI ENTERPRISES. IT IS ALSO PERTINENT TO NOTE THAT THIS LENDER IS ASSESSED WITH THE SAME AO AND HE HAS PASSED ASSESSMENT ORDER IN THE CASE OF LENDER ON 07.12.2009 AND ACCEPTED THE BOOKS OF ACCOUNTS OF MRS. R AMILABEN RAMJIBHAI BHADRA AND IN THE AUDITED ACCOUNTS OF THE LADY AMOUNT OF THE LOAN GIVEN TO THE APPELLANT IS ALSO SHOWN. DURING THE COURSE OF REMAND PROCEEDINGS AO HAS NOT ACCEPTED THE ABOVE OVERWHELMING EVIDENCES SUBMITTED AND STATED THAT AS ONE OF THE BUYERS OF GOODS FROM M/S. LAXMI ENTERPRISES NAMELY M/S. OCEANIC TRADING CO., CHENNAI IS NOT AVAILABLE AT THE ADDRESS GIVEN BY THE APPELLANT SOURCE OF SOURCES OF THE CREDIT OF LOAN GIVEN TO THE APPELLANT BY THIS LADY IS NOT PROVED. APPELLANT HAS SUBMITTED THE OVERWHELMING DETAILS IN CASE OF THIS LENDER IN THE FORM OF CONTRA ACCOUNTS FROM THE BOOKS OF THE LENDERS DULY CONFIRMED BY HER ALO N G WITH HER AUDITED ACCOUNTS AND COPIES OF RETURN OF INCOME WHERE THE AMOUNT GIVEN AS LOAN TO THE APPELLANT IS APPARENTL Y SHOWN AND ALSO THE COPIES OF BANK ACCOUNTS SHOWING THE FLOW OF FUNDS FROM HER BANKS ACCOUNTS TO THE ACCOUNTS OF THE APPELLANT AND CREDITS IN HER BANK ACCOUNTS WHICH HAVE BEEN RECEIVED ON SALE OF GOODS BY HER. FOR THE FINANCIAL YEAR ENDED ON 31.3.2007 HE R TURNOVER WAS RS.53.78 LAKHS AND HAS EARNED PROFIT OF RS.2,15,149/ - . IN HER ASSESSMENT FOR AY 2007 - 08, SAME AO HAS ACCEPTED THE BOOK RESULTS SUBMITTED BY HER IN SCRUTINY ASSESSMENT U/S.143(3) OF THE ACT. REGARDING UNSERVED CONFIRMATION TO M/S. OCEANIC T RADING CO., CHENNAI, IT WAS FOUND BY AO THAT AT THAT ADDRESS NO SUCH COMPANY EXISTS. IT IS PERTINENT TO NOTE THAT M/S. LAXMI ENTERPRISES HAVE SOLD GOODS TO THAT PARTY BY CREDITING HER SALES ACCOUNT AND MONEY IS RECEIVED FROM THAT PARTY BY CHEQUE AS EVIDEN T FROM THE BANK ACCOUNTS OF M/S. LAXMI ENTERPRISES SUBMITTED BEFORE AO TOWARDS THE SALE PROCEEDS AND SUCH SALES ARE PART OF PROFIT AND LOSS ACCOUNT OF M/S. LAXMI ENTERPRISES, IT MAKES LITTLE IMPACT WHETHER M/S. OCEANIC TRADING CO. EXITS NOW AT THAT ADDRESS OR NOT. NEEDLESS TO SAY THAT APPELLANT IS NOT REQUIRED TO PROVE THE SOURCES OF SOURCES OF THESE CREDITS AS STATED BY AO. THEREFORE REGARDING THIS CREDITOR APPELLANT HAS PROVED IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTIONS FULLY. HENCE ADDITION U/S.68 ON ACCOUNT OF M/S. LAXMI ENTERPRISES OF RS.23,46,393/ - IS DELETED. AGGRIEVED WITH THE ORDER OF LD. CIT (A), THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. 3. AT THE TIME OF HEARING BEFORE US, ON BEHALF OF REVENUE, SHRI RAJIV RANADE, DR A PPEARING AND CONTENDED THAT AO FRAMED THE ASSESSMENT U/S.144 AS THE ITA 1 29 7 - 201 0 3 ASSESSEE HAS NOT FURNISHED THE REQUIRED DOCUMENTS IN ORDER TO PROVE THE GENUINENESS OF CASH CREDIT OF RS.23,46,393/ - . HE ACCORDINGLY SUBMITTED THAT MATTER BE REMANDED TO THE FILE OF AO FOR CONDUCTING THE NECESSARY INQUIRY U/S.68 OF THE I.T. ACT, 1961. AS AGAINST THIS, COUNSEL OF THE ASSESSEE SUBMITTED THAT THE LD. CIT (A) CALLED THE REMAND REPORT AND AFTER CONSIDERING THE SAME AND HAVING SATISFIED THAT THE LENDER IS ASSESSED TO SAME AO. I N THE CASE OF LENDER, THE SAME AO HAS ACCEPTED THE BOOKS OF ACCOUNT WHICH ARE AUDITED THEREFORE, CASH CREDIT OF RS.23,46,393/ - STANDS PROVED. ON THESE BASES, HE DELETED THE ADDITION. THEREFORE, VIEW TAKEN BY LD. CIT (A) BE UPHELD. 4. WE HAVE CAREFULLY G ONE THROUGH THE ORDERS OF AUTHORITIES BELOW. IT IS PERTINENT TO NOTE THAT LENDER IS WIFE OF THE ASSESSEE NAMELY MRS. RAMILABEN RAMJIBHAI BHADRA. SHE IS ASSESSED TO TAX BY THE SAME AO. FROM THE AUDITED ACCOUNTS OF SAID LADY, LOAN GIVEN TO ASSESSEE STANDS IS PROVED. KEEPING IN VIEW OF TH E S E CONSPICUOUS FACTS OF THE CASE, WE ARE OF THE VIEW THAT THE LD. CIT (A) IS LEGALLY AND FACTUALLY CORRECT IN DELETING THE ADDITION OF RS.23,46,393/ - WHICH WAS MADE BY AO U/S.68 OF THE I.T. ACT, 1961. WE THEREFORE, DECLI NE TO INTERFERE. 5. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED. 6. THIS ORDER PRONOUNCED IN OPEN COURT ON THE DATE MENTIONED HEREINABOVE. SD/ - SD/ - ( . . ) D. K. SRIVASTAVA ) ( . . R / T. K. SHARMA) / ACCOUNTANT MEMBER ) / JUDICIAL MEMBER / ORDER DATE 14 - 0 6 - 2013. /RAJKOT NVA/ - 4 JO O / COPY OF ORDER FORWARDED TO: - 1 . / APPELLANT - THE INCOME - TAX OFFICER, WARD - 1(3), JAMNAGAR. . 2 . H / RESPONDENT - SHRI RAMJI KHAJURIA BHADRA,PROP.SHIVSHAKTI HARWARE, C - 2 - 35,GIDC, STU, JAMNAGAR 3 . I / CONCERNED CIT , J AMNAGAR. 4 . - / CIT (A) , JAMNAGAR. 5 . I , I , / DR, ITAT, RAJKOT 6 . R / GUARD FILE. / BY ORDER TRUE COPY. SENIOR PRI VATE SECRETARY, ITAT, RAJKOT