ITO, WD -2(2), Siliguri, Darjeeling V. Sri Subrata Das, Darjeeling

ITA 1366/KOL/2016

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 3640 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 1 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-08-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2012-2013
• Appeal Filed On: 21-06-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NICOLUS MURMU
• Section: 142(1); 133(6); 68

Judgement Text

1 ITA NO.1366/KOL/2016 SUBRATA DAS, AY- 2012-13 , A , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH: KOL KATA ( ) . . , . ! . '# , $ ) [BEFORE SHRI P.M. JAGTAP, AM & SHRI A. T. VARKEY, JM] I.T.A. NO. 1366/KOL/2016 ASSESSMENT YEAR: 2012-13 INCOME-TAX OFFICER, WD-2(2), SILIGURI VS. SHRI SUBR ATA DAS (PAN:ACSPD9450H) APPLICANT RESPONDENT DATE OF HEARING 06.06.2018 DATE OF PRONOUNCEMENT 14.08.2018 FOR THE APPELLANT SHRI NICOLUS MURMU, ADDL. CIT FOR THE RESPONDENT SHRI SUBASH AGARWAL, ADVOCATE ORDER PER SHRI A.T.VARKEY, JM THIS IS AN APPEAL PREFERRED BY THE REVENUE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS), SILIGURI, DATED 11.04.2016 FO R ASSESSMENT YEAR 2012-13. 2. THE ONLY GRIEVANCE OF THE REVENUE IS AGAINST THE ACTION OF THE LD. CIT(A) IN DELETING AN ADDITION OF RS.50 LAKHS. 3. BRIEFLY STATED FACTS OF THE CASE ARE THAT THE AS SESSEE IS THE PROPRIETOR OF M/S. GANAPATI MINI RICE MILLS AND HAD TAKEN UNSECURED LOAN OF RS. 5 LAKH FROM M/S. GANAPATI MINI RICE MILLS AND RS.45 LAKHS FROM M/S. BUILD WARE INFRASTE EL PVT. LTD. THOUGH CONFIRMATION AND PAN DETAILS OF LENDERS WERE FILED BEFORE THE AO, HE WAS NOT SATISFIED WITH THE CREDITWORTHINESS OF THE LENDER COMPANIES AND MADE T HE ADDITION U/S. 68 OF THE INCOME-TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT). AGGRIEVED, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT(A) WHO WAS PLEASED TO DELETE TH E SAME. AGGRIEVED, THE REVENUE IS BEFORE US. 4. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUGH THE FACTS AND CIRCUMSTANCES OF THE CASE. WE NOTE THAT THE ASSESSEE IS A PROPRIETOR OF A RICE MILL AND HAS TAKEN UNSECURED LOAN OF RS. 50 LACS FROM TWO LEGAL ENTITIES (RS. 5 LACS AND RS.45 LACS) I.E. FROM M/S. GANAPATI MINI 2 ITA NO.1366/KOL/2016 SUBRATA DAS, AY- 2012-13 RICE MILLS AND M/S. BUILD WARE INFRASTEEL PVT. LTD. RESPECTIVELY. WE NOTE THAT THE ASSESSEE DURING THE ASSESSMENT PROCEEDINGS HAS FILED THE FOL LOWING DOCUMENTS TO PROVE THE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTION S: I) CONFIRMATION LETTER DULY SIGNED BY THE CREDITORS , II) AUDIT REPORT OF THE LOAN CREDITORS FOR FY 2011- 12, (AY 2012-13) III) ACKNOWLEDGMENT OF I. T. RETURN FILED FOR FY 20 11-12 (AY 2012-13) OF THE LOAN CREDITORS, IV) COPY OF BANK ACCOUNTS OF THE LOAN CREDITORS 5. WE NOTE THAT THE AFORESAID COMPANIES WERE ISSUED LETTERS SEEKING INFORMATION U/S. 133(6) OF THE ACT BY THE AO ON 19.01.2015 AND THAT THESE LETTERS WERE DULY RECEIVED BY THE COMPANIES AT THEIR OFFICES AND WERE ALSO DULY REPLI ED WITHIN THE TIME FRAME PROVIDED BY THE AO. 6. FURTHER, IT WAS ALSO POINTED OUT BEFORE US THAT THE LOANS IN QUESTION WERE REFUNDED BY THE ASSESSEE MUCH BEFORE THE RECEIPT OF THE NOTICE U/S. 142(1) OF THE ACT WHICH MEAN THAT LOANS WERE IN FACT REPAID EVEN MUCH BEFORE ASSESSME NT PROCEEDING WERE INITIATED BY THE AO. WE NOTE THAT THE ADVANCES WERE FOR A SHORT TERM AND THE LOAN HAD BEEN REPAID AS PER THE DETAILS GIVEN BELOW: DATE CHEQUE NUMBER AMOUNT BUILDWARE INFRASTEEL PRIVATE LIMITED 04/05/2012 22/06/2012 22/06/2012 24/05/2013 039387 039388 039389 013057 TOTAL 15,00,000/- 15,00,000/- 15,00,000/- 1,74,859/- 46,74,859/- GANESH TRADELINK PRIVATE LIMITED 22/06/2012 24/05/2013 039390 013058 TOTAL 5,00,000/- 19,216/- 5,19,216/- 7. WE NOTE THAT THE AO AFTER EXAMINATION OF CREDITO RS FINANCIAL STATUS CAME TO THE CONCLUSION THAT THE LENDERS WERE NOT CREDITWORTHY. THIS ACTION OF AO IS FLAWED AS HELD BY HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF DA TAWARE PVT. LTD. VS. CIT (ITAT NO.263/2011, GA NO. 2856/2011, DATED 21.09.2011), W HEREIN THEIR LORDSHIP HELD AS UNDER: BOTH THE CIT(A) AND THE TRIBUNAL BELOW HAVE IN DE TAILS CONSIDERED THE FACT THAT THE SHARE APPLICATION MONEY WAS PAID BY ACCOUNT PAYEE CHEQUE, THE CREDITOR APPEARED BEFORE AO, DISCLOSED ITS PAN AND ALSO OTHER DETAILS OF THE ACC OUNTS BUT IN SPITE OF THAT THE AO DIDN'T 3 ITA NO.1366/KOL/2016 SUBRATA DAS, AY- 2012-13 ENQUIRE FURTHER FROM THE AO OF THE CREDITOR BUT INS TEAD, HIMSELF PROCEEDED TO CONSIDER THE P/L A/C OF THE CREDITOR AND OPINED THAT HE HAD SOME DOU BT ABOUT THE GENUINENESS OF SUCH ACCOUNT. IN OUR OPINION, IN SUCH CIRCUMSTANCES, THE AO OF TH E ASSESSEE CAN'T TAKE THE BURDEN OF ASSESSING THE P/L A/C OF THE CREDITOR WHEN ADMITTED LY THE CREDITOR HIMSELF IS AN IT ASSESSEE. AFTER GETTING THE PAN AND GETTING THE INFORMATION T HAT THE CREDITOR IS ASSESSED UNDER THE ACT, THE AO SHOULD ENQUIRE FROM THE AO OF THE CREDITOR A S TO THE GENUINENESS OF THE TRANSACTION AND WHETHER SUCH TRANSACTION HAS BEEN ACCEPTED BY T HE AO OF THE CREDITOR, BUT INSTEAD OF ADOPTING SUCH COURSE, THE AO HIMSELF COULD NOT ENTE R INTO THE RETURN OF THE CREDITOR AND BRAND THE SAME AS UNWORTHY OF CREDENCE. SO LONG IT IS NOT ESTABLISHED THAT THE RETURN SUBMITTED BY THE CREDITOR HAS BEEN REJECTED BY ITS AO, THE AO OF THE ASSESSEE IS BOUND TO ACCEPT THE SAME AS GENUINE WHEN THE IDENTITY OF THE CREDITOR AND THE G ENUINENESS OF THE TRANSACTION THROUGH ACCOUNT PAYEE CHEQUE HAS BEEN ESTABLISHED. WE FIND THAT BOTH THE CIT(A) AND THE TRIBUNAL BELOW FOLLOWED THE WELL ACCEPTED PRINCIPLE WHICH AR E REQUIRED TO BE FOLLOWED IN CONSIDERING THE EFFECT OF SECTION 68 OF THE ACT AND WE THUS FIN D NO REASON TO INTERFERE WITH THE CONCURRENT FINDINGS OF FACT RECORDED BY BOTH THE AUTHORITIES. THE APPEAL IS THUS DEVOID OF ANY SUBSTANCE AND IS SUMMARILY DISMISSED. (EMPHASIS GIVEN BY US) 8. IN THE LIGHT OF THE AFORESAID ORDER OF THE HONB LE HIGH COURT THE ACTION OF THE AO CANNOT BE COUNTENANCED. WE NOTE THAT THE ASSESSEE HAS DISCHARGED THE ONUS CASTED UPON HIM TO PROVE THE IDENTITY, CREDITWORTHINESS AND GEN UINENESS OF THE LENDERS. WE NOTE THAT ASSESSEE HAS RETURNED THE LOAN THROUGH ACCOUNT PAYE E CHEQUE BEFORE 24.05.2013 TO BOTH LENDERS WHICH FACTS COULD NOT BE CONTROVERTED BY TH E REVENUE. IN SUCH A SCENARIO, THE FACTUAL FINDING OF LD. CIT(A) CANNOT BE DISTURBED AND SO WE CONFIRM THE SAME. APPEAL OF REVENUE IS, THEREFORE, DISMISSED. 7. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER IS PRONOUNCED IN THE OPEN COURT ON 14TH AUGUS T, 2018 SD/- SD/- (P. M. JAGTAP) (ABY. T. VARKEY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED :14TH AUGUST, 2018 JD.(SR.P.S.) COPY OF THE ORDER FORWARDED TO: 1. APPELLANT ITO, WARD-2(2), SILIGURI 2 RESPONDENT SHRI SUBRATA DAS, PROP. OF M/S. GANA PATI MINI RICE MILL, NAKSALBARI, DIST. DARJEELING, PIN-734429. 3. THE CIT(A), SILIGURI. (SENT THROUGH E-MAIL) 4. 5. CIT KOLKATA. DR, ITAT, KOLKATA. (SENT THROUGH E-MAIL) / TRUE COPY, BY ORDER, SR. PVT. SECRETARY