INCOME TAX OFFICER 8(3)(3), MUMBAI V. VIJAY DWELLERS PRIVATE LIMITED, MUMBAI

ITA 141/MUM/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 3874 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-01-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Assessment Year: 2009-2010
• Appeal Filed On: 05-01-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Source of fund; Additional evidence; Reassessment proceedings
• Section: 143(3); 68; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH F MUMBAI BEFORE SHRI JOGINDER SINGH (VICE PRESIDENT) AND SHRI N.K. PRADHAN (ACCOUNTANT MEMBER) ITA NO. 141/MUM/2018 ASSESSMENT YEAR: 2009 - 10 ITO - 8(3)(3), MUMBAI, ROOM NO. 616, 6 TH FLOOR, AAYAKARBHAVAN, M.K. ROAD, MUMBAI - 400020. VS. M/S VIJAY DWELLERS PVT. LTD. 477, BABYLON BLDG. ADENWALA ROAD, MATUNGA (E), MUMBAI - 400019. PAN NO. AADCV9041N APPELLANT RESPONDENT REVENUE BY : M R. B. SATYANARAYAN RAJU , DR ASSESSEE BY : MR. NADEEM AHMED LASANI , AR DATE OF HEARING : 17/01 /201 9 DATE OF PRONOUNCEMENT : 30/01/2019 ORDER PER N.K. PRADHAN, AM THIS IS AN APPEAL FILED BY THE REVENUE. THE RELEVANT ASSESSMENT YEAR IS 2009 - 10 . THE APPEAL IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) - 14 , MUMBAI [IN SHORT CIT(A)] AND ARISES OUT OF THE ASSESSMENT COMPLETED U/S 143(3) R.W.S. 147 OF THE INCOME TAX ACT 1961, (THE ACT). 2. THE GROUNDS OF APPEAL FILED BY THE REVENUE READ AS UNDER: 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) IS JUSTIFIED IN DELETING THE ADDITION MADE U/S. 68 OF THE I.T. M/S VIJAY DWELLERS ITA NO. 141/MUM/2018 2 ACT OF RS.13,48,00,000/ - RECEIVED BY THE ASSESSE FROM M/S. PRAKRUTI INFRASTRUCTURE PVT. LTD. 2. THE LD. CIT(A) ERRED IN HOLDING THAT THERE IS NO REQUIREMENT FOR ASSESSE TO PROVE THE SOURCE O F FUNDS IN THE HANDS OF M/S. PRAKRUTI INFRASTRUCTURE PVT. LTD., BECAUSE THIS WAS A CASE OF REPAYMENT OF LOAN GIVEN IN THE FINANCIAL YEAR 2007 - 08 BY THE ASSESSE. 3. THE LD. CIT(A) FAILED TO SEE THAT LOAN MONEY GIVEN EARLIER WAS NOT LYING DORMANT IN BANK ACCOUN T OF M/S. PRAKRUTT INFRASTRUCTURE PVT. LTD., TO BE 'RETURNED' THIS YEAR AND WAS APPLIED ELSEWHERE NECESSITATING FRESH, FLOW OF FUNDS EVEN FOR REPAYMENT. 4. THE LD. CIT(A) FAILED TO SEE THAT THE A MOUNTS WERE RETURNED IN 14 TRANSACTIONS OVER THE YEAR IN AMOUNTS VARYING FROM RS.2,50,000 TO RS.50,00,000 AND SOURCES OF FUNDS FOR EACH SUCH TRANSFER WAS TO BE EXPLAINED AS IT WAS PART OF THE ASSESSE GROUP COMPANY AND ROTATION OF FUNDS AMONG GROUP CONCERNS IS SEEN. 5. THE LD. CIT(A) 'S ORDER IS CONTRARY IN LAW AND ON FACT S AND DESERVES TO BE SET ASIDE. 3. BRIEFLY STATED, THE FACTS ARE THAT THE ASSESSING OFFICER (AO), ON RECEIPT OF INFORMATION FROM THE DEPUTY DIRECTOR OF INCOME TAX (INV.), MUMBAI, NOTICED THAT A TOTAL AMOUNT OF RS.14,78,00,000/ - HAS BEEN CREDITED IN THE BANK ACCOUNT OF THE ASSESSEE FROM VARIOUS CONCERNS INCLUDING CREDITS FROM THE GROUP CONCERN I.E. PRAKRUTI INFRASTRUCTURE PVT. LTD. ON THAT BASIS , THE AO REOPENED THE ASSESSMENT BY ISSUING NOTICE U/S 148 DATED 30.03.2016 TO THE ASSESSEE. IN RESPONSE TO A QU ERY RAISED BY THE AO DURING THE REASSESSMENT PROCEEDINGS, THE ASSESSEE FILED A REPLY DATED 19.12.2016, WHICH IS REPRODUCED AS UNDER: WITH REFERENCE TO THE ABOVE SUBJECT MATTER AND AS DIRECTED VIDE YOUR AFORESAID NOTICE WE CONFIRM THAT THE AMOUNT RECEIVED FROM VARIOUS PARTIES M/S VIJAY DWELLERS ITA NO. 141/MUM/2018 3 NAMELY M/S PRAKRUTI INFRASTRUCTURE PVT. LTD., RASHMIKANT M. SHAH & FROM DHARMENDRA BHANUSHALI & TULSI BHANUSHALI & FROM M/S NEW PARK SUN GARDENS. AMOUNT RECEIVED FROM MR. RASHMIKANT M. SHAH (DIRECTOR) & FROM M/S NEW PARK SUN GARDENS IS AMOUNT RECEIVED AS UNSECURED LOAN. HOWEVER, AMOUNT RECEIVED FROM M/S PRAKRUTI INFRASTRUCTURE PVT. LTD. IS CURRENT LIABILITY IN SUBSEQUENT YEARS AND THE SAID LIABILITY OF M/S PRAKRUTI INFRASTRUCTURE PVT. LTD. IS REPAID. AMOUNT RECEIVED FROM MR. DHARMEN DRA BHANUSHALI & TULSI BHANUSHALI IS TOWARDS BOOKING OF FLAT NO. 501 & 502 AND THE ABOVESAID AMOUNT IS SHOWN IN THE BALANCE SHEET AS AN ADVANCES RECEIVED TOWARDS FLAT. HOWEVER, THE AO WAS NOT CONVINCED WITH THE ABOVE EXPLANATION OF THE ASSESSEE FOR THE REASON THAT THE IDENTITY, GENUINENESS AND CREDITWORTHINESS OF THE DIRECTOR AND THE RELATED PARTIES WERE NOT PROVED ALONG WITH ANY SUPPORTING DOCUMENTARY EVIDENCE. THEREFOR E, THE AO MADE AN ADDITION OF RS.14,78,00,000/ - AS UNEXPLAINED CASH CREDIT U/S 68 OF THE ACT. 4. AGGRIEVED BY THE ORDER OF THE AO, THE ASSESSEE FILED AN APPEAL BEFORE THE LD. CIT(A) AND SUBMITTED ADDITIONAL EVIDENCE WHICH COULD NOT BE FILED BEFORE THE AO. ON RECEIPT OF IT, THE LD. CIT(A) SENT A COPY OF IT TO THE AO AND CALLED FOR A REMAND REPORT. AFTER THE RECEIPT OF THE REMAND REPORT FROM THE AO, THE LD. CIT(A) FORWARDED A COPY OF IT TO THE ASSESSEE FOR ITS COMMENTS. THE ASSESSEE FILED A REPLY DATED 07.08 .2017. AS REGARDS THE ADDITION OF RS.13,48,00,000/ - MADE BY THE AO, THE LD. CIT(A) HELD AS UNDER: M/S VIJAY DWELLERS ITA NO. 141/MUM/2018 4 5.2 SO FAR AS RECEIPT OF SUM OF RS.13,48,50,000/ - FROM PRAKRUTI INFRASTRUCTURE P. LTD. IS CONCERNED, THE AO HAS ACCEPTED THE CLAIM OF THE APPELLANT THAT THE SAID SUM WAS RECEIVED FROM PRAKRUTI INFRASTRUCTURE P. LTD. BY THE APPELLANT. HOWEVER, THE ONLY OBJECTION OF THE AO WAS THAT THE SOURCE OF FUNDS IN THE HANDS OF PRAKRUTI INFRASTRUCTURE P. LTD. HAS NOT BEEN EXPLAINED BY THE APPELLANT. SINCE THIS IS A CAS E FOR REPAYMENT OF LOAN GIVEN BY THE APPELLANT, THERE IS NO REQUIREMENT FOR THE APPELLANT TO PROVE THE SOURCE OF FUNDS IN THE HANDS OF PRAKRUTI INFRASTRUCTURE P. LTD. ACCORDINGLY, THE AO IS DIRECTED TO DELETE THE ADDITION OF RS.13,48,50,000/ - MADE IN THE A SSESSMENT ORDER IN RESPECT OF RECEIPT OF RS.13,48,50,000/ - FROM PRAKRUTI INFRASTRUCTURE P. LTD. 4.1 AS REGARDS THE ADDITION OF RS.50,00,000/ - MADE BY THE AO, THE LD. CIT(A) HELD AS UNDER: SO FAR AS RECEIPT OF SUM OF RS.50,00,000/ - FROM SHRI DHAMENDRA BH ANUSHALI AND RECEIPT OF SUM OF RS.20,00,000/ - FROM MS. TULSIBEN BHANUSHALI IS CONCERNED, THE APPELLANT HAS FILED COPIES OF CHEQUES ISSUED BY THESE PARTIES, CONFIRMATION LETTERS FROM THESE PARTIES AS WELL AS THE REGISTERED AGREEMENT OF SALE OF FLATS WITH TH ESE PARTIES. ACCORDINGLY, THE ADDITIONS MADE UNDER SECTION 68 OF THE IT ACT IN RESPECT OF SUMS RECEIVED FROM THESE PARTIES ARE LIABLE TO BE DELETED. HOWEVER, THE COPIES OF CONFIRMATION AND THE COPIES OF THE CHEQUES ISSUED BY THESE PARTIES WERE NOT AVAILABL E BEFORE THE AO, THOUGH THE RELEVANT REGISTERED AGREEMENTS OF SALE WERE MADE AVAILABLE TO THE AO. THEREFORE, THE APPELLANT IS DIRECTED TO FILE A COPY OF THESE DOCUMENTS BEFORE THE AO WHO SHALL SATISFY HIMSELF REGARDING THE CORRECTNESS OF THE DOCUMENTS FILE D BY THE APPELLANT AND DELETE THE ADDITION OF RS.50,00,000/ - MADE IN THE ASSESSMENT ORDER IN RESPECT OF RECEIPT OF RS.50,00,000/ - FROM SHRI DHARMENDRA BHANUSHALI AND ALSO DELETE THE ADDITION OF RS.20,00,000/ - FROM MS. TULSIBEN BHANUSHALI, IF THE DOCUMENTS FILED BY THE APP ELLANT ARE FOUND TO BE CORRECT. M/S VIJAY DWELLERS ITA NO. 141/MUM/2018 5 5. BEFORE US, THE LD. DR REITERATES THE GROUNDS OF APPEAL. ON THE OTHER HAND, THE LD. COUNSEL OF THE ASSESSEE SUBMITS THAT THE REQUIREMENT OF EXPLAINING THE SOURCE OF SOURCE OF THE RECEIPTS CAME INTO THE STATUE BOOK BY AMENDMENT TO SECTION 68 OF THE ACT ON 01 .04.2013 EFFECTIVE FROM THE AY 2013 - 14 ONWARDS. THIS APPEAL IN QUESTION PERTAINS TO AY 2009 - 10, THEREFORE, DURING THE SUBJECT ASSESSMENT YEAR, THERE WAS NO REQUIREMENT TO EXPLAIN THE SOURCE OF SOURCE. IN THIS REGARD RELIANCE IS PLACED BY HIM ON THE DECISIO N BY THE HONBLE BOMBAY HIGH COURT IN PR. CIT V. VEEDHATA TOWER PVT. LTD. (ITA NO. 819 OF 2015) AND PR. CIT V. M/S SDB ESTATE PVT. LTD. (ITA NO. 1356 OF 2015). THE LD. COUNSEL FURTHER SUBMITS THAT IT HAS DISCHARGED THE ONUS PLACED UPON IT U/S 68 BY FILING CONFIRMATION OF ACCOUNT COPIES FROM M/S PRAKRUTI INFRASTRUCTURE PVT. LTD. FOR BOTH THE FINANCIAL YEARS 2007 - 08 AND 2008 - 09, THE YEAR OF PAYMENT AND THE YEAR OF RECEIPT ; THE BANK ACCOUNT OF THE SAID PRAKRUTI INFRASTRUCTURE PVT. LTD. FOR BOTH THE FINANCIAL YEARS 2007 - 08 AND 2008 - 09 IN WHICH THE TRANSACTIONS IN QUESTION ARE REFLECTING ; AND HAS ALSO FILED A COPY OF ITRV FOR BOTH THE ASSESSMENT YEARS 2008 - 09 AND 2009 - 10 IN THE CASE OF M/S PRAKRUTI INFRASTRUCTURE PVT. LTD. AND ALL THESE DOCUMENTS WERE DULY VERI FIED BY THE AO WHILE FORWARDING HIS REMAND REPORT TO THE LD. CIT(A). 6. WE HAVE HEARD THE RIVAL SUBMISSION AND PERUSED THE RELEVANT MATERIALS ON RECORD. SO FAR AS RECEIPT OF RS.13,48,50,000/ - FROM PRAKRUTI INFRASTRUCTURE P. LTD. IS CONCERNED THE LD. CIT(A ) HAS RIGHTLY OBSERVED THAT SINCE THIS IS A CASE OF REPAYMENT OF LOAN GIVEN BY THE ASSESSEE, THERE IS NO REQUIREMENT ON THE PART OF THE ASSESSEE TO PROVE THE SOURCE OF FUNDS IN THE HANDS OF PRAKRUTI INFRASTRUCTURE P. LTD. THERE CANNOT BE ANY M/S VIJAY DWELLERS ITA NO. 141/MUM/2018 6 DISPUTE ON THE ABOVE REASONING. WE ARE SUPPORTED BY THE DECISION IN VEEDHATA TOWER PVT. LTD . (SUPRA) AND M/S SDB ESTATE PVT. LTD . (SUPRA). IN SO FAR AS, THE RECEIPT OF RS.50,00,000/ - FROM SHRI DHARMENDRA BHANUSHALI AND RS.20,00,000/ - FROM MS. TULSIBEN BHANUSHALI IS CONCERNED. THE LD. CIT(A) HAS DIRECTED THE ASSESSEE TO FILE THE COPIES OF CONFIRMATION AND CHEQUES BEFORE THE AO AS DELINEATED AT PARA 4.1 HEREINBEFORE. THUS WE UPHOLD THE ORDER OF THE LD. CIT(A). 7. IN THE RESULT, THE APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 30/01/2019. SD/ - SD/ - (JOGINDER SINGH) (N.K. PRADHAN) VICE PRESIDENT ACCOUNTANT MEMBER MUMBAI ; DATED: 30/01/2019 RAHUL SHARMA, SR. P.S. COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A) - 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE . BY ORDER, //TRUE COPY// ( SR. PRIVATE SECRETARY ) ITAT, MUMBAI