Jagannath Ramnarayan Bhutada, Latur V. Income-tax Officer,

ITA 1332/PUN/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 1125 (ITAT-PUNE)
• Duration Of Justice: 1 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-08-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 16-06-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: HARI KISHAN
• Keywords: Unexplained cash credit
• Section: 234B; 68

Judgement Text

- IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH SMC , PUNE , BEFORE MS. SUSHMA CHOWLA, JM . / ITA NO. 1332 /PN/201 6 / ASSESSM ENT YEAR : 20 11 - 1 2 SHRI JAGANNATH RAMNARAYAN BHUTADA, PROP. OF M/S. SWASTIK AGRO INDUSTRIES, GUNJ GOLAI, NEAR NAVYUG THEATER, SHIVAJI ROAD, LATUR . / APPELLANT PAN: A A XFS5974N VS. THE INCOME TAX OFFICER , WARD 3 ( 3 ), LATUR . / RESPONDENT / APPELLANT BY : SHRI HARI KISHAN / APPELLANT BY : SHRI HARI KISHAN / RESPONDENT BY : SHRI SUHAS KULKARNI / DATE OF HEARING : 08 . 0 8 .201 6 / DATE OF PRONOUNCEMENT: 12 . 0 8 .201 6 / ORDER PER SUSHMA CHOWLA, J M : TH IS APPEAL FILED BY THE ASSESSEE IS AGAINST THE ORDER OF CIT (A) - 2 , AURANGABAD, DATED 18 . 0 4 .20 1 6 RELATING TO ASSESSMENT YEAR 20 11 - 1 2 AGAINST ORDER PASSED UNDER SECTION 1 4 3(3) OF THE INCOME - TAX ACT , 1961 (IN SHORT THE ACT) . 2 . THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL : - 1 . I N THE FACTS & CIRCUMSTANCES OF THE CASE AND IN LAW THE LEARNED CIT(A) - 2, HAS ERRED IN CONFIRMING THE ADDITION OF LOAN / ADVANCE OBTAINED BY THE ITA NO. 1332 /PN/20 1 6 SHRI JAGANNATH RAMNARAYAN BHUTADA 2 APPELLANT ASSESSEE BY CROSSED ACCOUNT PAYEE C HEQUES OF RS.5,00,000/ - MADE BY THE LEARNED ASSESSING OFFICER AS UNEXPLAINED CASH CREDIT U/S 68 OF IT ACT ON THE GROUND BY ALLEGING THAT GENUINENESS AND CREDITWORTHINESS OF LOANS / ADVANCES RECEIVED ARE NOT PROVED. THE AFORESAID ADDITION BEING ARBITRARY, PERVERSE, BASED ON SURMISES, DEVOID OF MERITS AND BEING LEGALLY UNSUSTAINABLE THE LEARNED CIT(A) OUGHT TO HAVE DELETED THE SAID ADDITION. 2. THE APPELLANT DENIES HIS LIABILITY TO PAY ANY INTEREST U/S 234B AND 234C OF THE I.T. ACT, 1961 AND HENCE THE SAME MAY PLEASE BE DELETED. 3. THE ISSUE ARISING IN THE PRESENT APPEAL IS AGAINST THE ADDITION OF RS.5 LAKHS UNDER SECTION 68 OF THE ACT. 4. BRIEFLY, IN THE FACTS OF THE CASE, THE ASSESSEE WAS AN INDIVIDUAL AND FURNISHED RETURN OF INCOME DECLARING TOTAL INCOM E OF RS.6,02,990/ - . THE ASSESSING OFFICER NOTED THAT THE ASSESSEE HAD TAKEN UNSECUR ED LOAN OF RS.5 LAKHS FROM SOW. SUSHMA M. GILDA. THE ASSESSING OFFICER ASKED THE ASSESSEE TO FILE THE CONFIRMATION OF LOAN, COPY OF PAN CARD AND OTHER EVIDENCES TO PROVE T HE CREDITWORTHINESS OF THE PERSON FROM WHOM UNSECURED LOAN WAS TAKEN. ON VERIFICATION OF SAVINGS BANK ACCOUNT OF CREDITOR WITH STATE BANK OF HYDERABAD, TILAK NAGAR, LATUR, THE ASSESSING OFFICER NOTED THAT IMMEDIATELY BEFORE GIVING THE CHEQUE ON 14.03.2011 , THE LADY HAD DEPOSITED SUM OF RS.3 LAKHS ON SAME DAY AND ALSO BEFORE ISSUING THE CHEQUE OF RS.2 LAKHS ON 24.03.2011, CASH OF RS.2 LAKHS WAS DEPOSITED IN THE SAVINGS BANK ACCOUNT. THE ASSESSING OFFICER ASKED THE ASSESSEE TO PRODUCE THE SAID CREDITOR FOR EXAMINATION. THE STATEMENT OF CREDITOR WAS RECORDED BY THE ASSESSING OFFICER AND IN THE STATEMENT, SHE CONFIRMED THAT SHE HAD INCOME OF ABOUT RS.1 TO 1.5 LAKH FROM THE BUSINESS BEING CARRIED ON BY HER AND THE SOURCE OF CASH DEPOSIT WAS CLAIMED TO BE OUT O F ADVANCES MADE BY HER IN THE EARLIER YEARS, WHICH WERE RECEIVED BACK. THE ASSESSING OFFICER IN THIS REGARD, WAS OF THE VIEW THAT THE CREDITWORTHINESS OF CREDIT OR IS NOT PROVED AND HENCE, SUM OF RS.5 LAKHS WAS ADDED UNDER SECTION 68 OF THE ACT. ITA NO. 1332 /PN/20 1 6 SHRI JAGANNATH RAMNARAYAN BHUTADA 3 5. DURING THE COURSE OF APPELLATE PROCEEDINGS, THE PLEA OF ASSESSEE WAS THAT WHERE THE CREDITOR HAD ACKNOWLEDGED THE GIVING OF LOAN AS PER STATEMENT RECORDED ON OATH, THE SAME COULD NOT BE BRUSHED ASIDE. THE CIT(A) WAS OF THE VIEW THAT WHERE THE ASSESSEE HAS FAILED TO PROVE THE CREDITWORTHINESS OF CREDITOR OR THE CAPACITY TO ADVANCE THE LOAN, THE ADDITION UNDER SECTION 68 OF THE ACT AT RS.5 LAKHS MERITS TO BE UPHELD. 6. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE POINTED OUT THAT THE IDENTITY OF PERSONS STAND PROVED AND WHERE SHE HAD ACCEPTED TO HAVE ADVANCED THE SAID LOAN OUT OF HER SAVINGS OF PAST SEVERAL YEARS AND / OR LOANS REPAID BY THE PERSONS TO WHOM THEY WERE ADVANCED, THEN MERELY BECAUSE CASH WAS DEPOSITED ON PREVIOUS DAY, BEFORE ENCASHMENT OF CH EQUES DOES NOT MERIT ANY ADDITION IN THE HANDS OF ASSESSEE. 7. THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE PLACED 7. THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE PLACED RELIANCE ON THE ORDER OF CIT(A). 8. IN THE FACTS OF THE PRESENT CASE AND AFTER PERUSING THE DETAILS, IT IS APPARENT THAT THE ASS ESSEE HAD RECEIVED THE SAID SUM OF RS.5 LAKHS BY WAY OF CHEQUES FROM ONE SOW. SUSHMA M. GILDA . THE SAID LADY WAS CARRYING ON THE BUSINESS WHICH WAS REGISTERED WITH THE STATE AUTHORITIES SINCE PAST SEVERAL YEARS. THE SAID BUSINESS WAS BEING CARRIED ON FRO M YEAR TO YEAR AND OUT OF HER SAVINGS AND THE LOANS ADVANCED TO OTHER PERSONS, WHO HAD REPAID THE SAME , THE ASSESSEE CLAIMS THAT SHE HAD DEPOSITED CASH OF RS.3 LAKHS ON 14.03.2011 IN HER SAVINGS BANK ACCOUNT BEFORE ENCASHMENT OF CHEQUE ISSUED TO THE ASSESS EE. SIMILARLY, FURTHER SUM OF RS.2 LAKHS WAS DEPOSITED IN CASH ON 23.03.2011 AGAINST WHICH THE ASSESSEE RECEIVED RS.2 LAKHS BY WAY OF CHEQUE. WHERE THE ASSESSEE HAS PROVED THE IDENTITY OF THE PERSONS AND ALSO THE ITA NO. 1332 /PN/20 1 6 SHRI JAGANNATH RAMNARAYAN BHUTADA 4 CREDITWORTHINESS OF PERSONS BY WAY OF HER CARRYING ON THE BUSINESS AND SAVINGS FROM BUSINESS, THE ASSESSEE CANNOT BE ASKED TO PROVE THE SOURCE OF SOURCE. IN THE ENTIRETY OF THE ABOVE SAID FACTS AND CIRCUMSTANCES, WHERE THE GENUINENESS OF THE TRANSACTION IS NOT DOUBTED, THERE IS NO MERIT IN THE A FORESAID ADDITION OF RS.5 LAKHS. ACCORDINGLY, THE ASSESSING OFFICER IS DIRECTED TO DE LETE THE ADDITION OF RS.5 LAKHS MADE UNDER SECTION 68 OF THE ACT. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE ARE THUS, ALLOWED. 9 . IN THE RESULT, THE APPEAL OF THE AS SESSEE IS ALLOWED. ORDER PRONOUNCED ON THIS 12 TH DAY OF AUGUST , 201 6 . SD/ - (SUSHMA CHOWLA) / JUDICIAL MEMBER / PUNE ; DATED : 12 TH AUGUST , 201 6 . GCVSR / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT ; 2. / THE RESPO NDENT; 3. ( ) / THE CIT(A) - 2 , AURANGABAD ; 4. / THE PR. CIT - 2 , AURANGABAD ; 5. 6. , , , - / DR SMC , ITAT, PUNE; / GUARD FILE . / BY ORDER , // TRUE COPY // / SR. PRIVATE SECRETARY , / ITAT, PUNE