M/s. Ashirwad Synsilk Pvt.Ltd., Ahmedabad V. The Income tax Officer,Ward-1(4), Ahmedabad

ITA 1305/AHD/2013

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 1226 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 2 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-07-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2008-2009
• Appeal Filed On: 07-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DINESH SINGH
• Assessee Lawyers: MRS ARTI N SHAH
• Keywords: Unexplained cash credit
• Section: 133(6); 68

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER ./ ITA.NO.1305/AHD/2013 / ASSTT. YEAR: 2008-2009 M/S.ASHIRWAD SYNSILK PVT. LTD. 1011, MAHAVIR NAGAR OPP: DIAMOND SILK MILLS THAKKAR NAGAR AHMEDABAD 382 350. PAN : AACCA 4097 L VS ITO, WARD - 1(4) AHMEDABAD. ! / (APPELLANT) '# ! / (RESPONDENT) ASSESSEE BY : MRS.ARTI N. SHAH REVENUE BY : SHRI DINESH SINGH, SR.DR / DATE OF HEARING : 21/06/2016 / DATE OF PRONOUNCEMENT: 13/07/2016 $%/ O R D E R THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL AGAIN ST THE ORDER OF THE LD.CIT(A)-III, AHMEDABAD DATED 28.3.2013 PASSED FOR THE ASSTT.YEAR 2008- 09. 2. SOLITARY GRIEVANCE OF THE ASSESSEE IS THAT THE L D.CIT(A) HAS ERRED IN CONFIRMING ADDITION OF RS.9,35,245/-. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE HA S FILED ITS RETURN OF INCOME ON 13.9.2008 DECLARING LOSS AT RS.1,56,088/-. THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY ASSESSMENT AND NOTICE UNDER S ECTION 143(2) OF THE INCOME TAX ACT WAS ISSUED ON 19.8.2009, WHICH WAS D ULY SERVED UPON THE ASSESSEE. ON SCRUTINY OF THE ACCOUNTS, IT REVEALED , THAT THE ASSESSEE-COMPANY IS ENGAGED IN THE BUSINESS OF JOB WORK AND SALE OF YARN. IT HAS SHOWN TOTAL ITA NO.1305/AHD/2013 2 TURNOVER OF RS.59.38 LAKHS AND GROSS PROFIT AT RS.3 .86 LAKHS. 15 ENTITIES HAVE DEPOSITED AMOUNTS IN CASH IN THE BANK ACCOUNT WITH SURAT PEOPLES COOP. BANK LTD. THE ASSESSEE WHILE EXPLAINING THESE TRAN SACTIONS HAS CONTENDED THAT IT HAS SOLD YARN TO THE ENTITIES AND IT WAS UN REALIZED SALE PROCEEDS PERTAINING TO EARLIER YEARS AS WELL AS THIS YEAR, W HICH HAS BEEN DEPOSITED BY THESE PARTIES IN THE BANK ACCOUNT DIRECTLY. 4. THE LD.AO HAS DIRECTED THE ASSESSEE TO SUBMIT CO NFIRMATION FROM THESE PARTIES. HE ISSUED NOTICE TO THESE PARTIES UNDER S ECTION 133(6) OF THE INCOME TAX ACT AND REPRODUCED THE REPLIES RECEIVED FROM TH EM. ACCORDING TO THE AO MOST OF THE LETTERS WERE SERVED, BUT NO REPLY WAS R ECEIVED. THUS, THE AO HAS CONSTRUED THAT THE AMOUNTS DEPOSITED IN THE ACCOUNT S AS UNEXPLAINED CREDITS AND HE MADE ADDITION OF RS.9,35,245/-. APPEAL TO THE CIT(A) DID NOT BRING ANY RELIEF TO THE ASSESSEE. 5. WITH THE ASSISTANCE OF THE LD.REPRESENTATIVES, I HAVE GONE THROUGH THE RECORD CAREFULLY. TO ME, THE LD.REVENUE AUTHORITIE S HAVE FAILED TO APPRECIATE THE CONTROVERSY. ONE OF THE PARTIES WHO HAS DEPOSI TED RS.1,28,930/- DURING THIS YEAR IS AMBICA TEXTILES. THE LEDGER ACCOUNT OF THIS PARTY STARTING FROM 1.4.2006 TO 31.3.2007 HAS BEEN PLACED ON PAPER BOOK AT PAGE NO.32 OF THE PAPER BOOK. A PERUSAL OF THIS WOULD SUGGEST THAT S ALE OF RS.7,05,249/- WAS MADE TO THIS PARTY. OUT OF WHICH, RS.4,41,821/- WA S PAID. THE BALANCE OF RS.2,63,428/- IS STILL OUTSTANDING. NOW, THE AO DI D NOT DOUBT ABOUT THE OTHER CREDIT ENTRIES OF THIS CONCERN. THE LEDGER ACCOUNT FOR 1.4.2007 TO 31.3.2008 OF THIS CONCERN HAS BEEN PLACED AT PAGE NO.34. THIS C ONCERN, IN THIS YEAR MADE PAYMENT OF RS.1,28,930/- AND THE BALANCE OUTSTANDIN G HAS BEEN SHOWN AT RS.1,34,498/-, THE AO IS DOUBTING THE REALIZATION OF THIS AMOUNT OF RS.1,28,930/-. IT IS A CREDIT BALANCE BROUGHT FOR WARD FROM THE LAST YEAR. SALES ITA NO.1305/AHD/2013 3 WERE MADE IN THE EARLIER YEARS, SALE PROCEEDS HAVE BEEN REALIZED PARTLY IN THIS YEAR. ONCE THE SALES ARE NOT BEING DISTURBED IN TH E LAST ACCOUNTING YEAR, MORE PARTICULARLY, THIS CONCERN HAS MADE PAYMENT OF RS.4 ,41,821/- BEFORE 31.3.2007 AND NO DOUBT WAS RAISED, HOW ALL OF A SUD DEN UNREALISED SALE PROCEEDS REALIZED IN THIS YEAR WOULD BECOME UNEXPLA INED CASH CREDIT ? SIMILAR IS THE POSITION WITH REGARD TO OTHER CONCER NS. THEREFORE, AFTER TAKING INTO CONSIDERATION THE RECORD CAREFULLY, I AM OF TH E VIEW THAT THE LD.REVENUE AUTHORITIES HAVE ERRED IN MAKING ADDITION UNDER SEC TION 68 OF THE INCOME TAX ACT. I ALLOW THE APPEAL OF THE ASSESSEE, AND DELET E THE ADDITION. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE COURT ON 13 TH JULY, 2016 AT AHMEDABAD. SD/- (RAJPAL YADAV) JUDICIAL MEMBER