ITO WD 1(3), THANE V. BIPIN RAMJI KATIRA (HUF), THANE

ITA 1429/MUM/2010

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 2076 (ITAT-MUMBAI)
• Duration Of Justice: 5 year(s) 9 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-11-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: J
• Next Hearing Date: 14-01-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 22-02-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AKHILENDRA P YADAV
• Assessee Lawyers: SUBODH RATANAPARKHI

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES J, MUMBAI BEFORE SHRI G S PANNU, AM & SHRI SANJAY GARG, JM ITA NO.1429/MUM/2010 / ASSESSMENT YEAR - 2006-07 THE ITO WARD 1(3), THANE VS BIPIN RAMJI KATIRA (HUF) JAY YOGESHWAR OCTROI SERVICES, SHOP NO.4., NAYAN CHS, EASTERN EXPRESS HIGHWAY, NR. SHREEMA BALNIKETAN SCHOOL THANE (E) PAN AACHK5422L ( /APPELLANT) ( /RESPONDENT) APPELLANT BY : SHRI AKHILENDRA P YADAV RESPONDENT BY : SHRI SUBODH RATANAPARKHI ! ' #$ / DATE OF HEARING :05.08.2015. %& ' #$ / DATE OF PRONOUNCEMENT : 30.11.2015 O R D E R PER SANJAY GARG, JUDICIAL MEMBER: THE PRESENT APPEAL FILED BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE CIT(A)-II, THANE, DATED 26.11.2009, FOR A.Y. 20 06-07. 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. THE LEARNED CIT(A) HAS ERRED IN FACT AND IN LAW IN DELETING THE ADDITIONS MADE ON ACCOUNT OF UNEXPLAIN ED CASH DEPOSITS. 2 ITA 1429/MUM/10 BIPIN RAMJI KATIRA (HUF) 2. THE LEARNED CIT(A) HAS ERRED IN FACT AND IN LAW IN DELETING THE ADDITIONS MADE ON ACCOUNT OF UNPROVED CASH CREDITS. THE REVENUE THROUGH THE ABOVE GROUNDS HAS AGITATED THE ACTION OF THE CIT(A) IN DELETING THE ADDITIONS MADE ON ACCOUNT OF UNEXPLAINED CASH DEPOSITS AND ON ACCOUNT OF CASH CREDIT RECEIVED BY THE ASSESSEE HUF. SO FAR AS THE FIRST ISSUE IS CONCERNED, THE ASSESSEE HUF D URING THE YEAR RECEIVED CASH DEPOSITS FROM ITS OWN MEMBERS VIZ. SHRI BIPIN KATIRA AND SMT. GEETA BIPIN KATIRA. THE AO HAD TREATED THE SAID DEPOSITS AS UNEXPLAINED ON THE GROUND THAT THE ASSESSEE HAD NOT SUBMITTED THE CASH FLOW STATEMENT OF THE CREDITORS. THE LEARNED CIT(A) HAS DELETED THE DISA LLOWANCE MADE BY THE AO OBSERVING THAT THE ASSESSEE HAD FILED COPIES OF IT RETURN, PROFIT & LOSS ACCOUNT AND BALANCE SHEET OF THE DEPOSITORS, WHO WE RE THE MEMBERS OF THE HUF ITSELF. THE ASSESSEE HUF HAD PURCHASED A HOUSE PROPERTY. HOWEVER, IT COULD NOT GET THE LOAN FROM THE BANK ON TIME AND BE CAUSE OF TIME CONSTRAINT, TEMPORARY CONTRIBUTIONS WERE MADE BY HUF MEMBERS. BOTH THE ABOVE MENTIONED MEMBERS HAVE BEEN REGULARLY FILING THEIR RETURNS AND ARE BEING ASSESSED BY THE SAME ASSESSING OFFICER. THEY WERE HAVING SUFFICIENT CASH BALANCE OVER THE PERIOD OF TIME AS PER THEIR BALANC E SHEET FILED WITH THE DEPARTMENT. ALL THE DETAILS WERE FILED BEFORE THE ASSESSING OFFICER BY THE ASSESSEE. THE ASSESSING OFFICER COULD NOT PROVE TH AT THE SAID DEPOSITORS VIZ. SHRI BIPIN KATIRA AND SMT. GEETA BIPIN KATIRA WERE NOT HAVING CASH BALANCE 3 ITA 1429/MUM/10 BIPIN RAMJI KATIRA (HUF) FOR THE PURPOSE OF DEPOSITING WITH THE HUF. THE CI T(A) AFTER EXAMINING ALL THE FACTS AND CIRCUMSTANCES OF THE CASE DELETED THE DISALLOWANCE MADE IN THIS RESPECT. WE DO NOT FIND ANY INFIRMITY IN THE O RDER OF THE CIT(A) IN THIS RESPECT. 3. THE SECOND ISSUE RELATES TO UNEXPLAINED LOAN OF RS.15,50,000/- FROM MANISHA KATIRA. THE AO HAS TREATED THE SAID LOAN A S EXPLAINED ON THE GROUND THAT THE ASSESSEE COULD NOT PROVE THE CAPACI TY OF THE CREDITOR AND THE GENUINENESS OF THE LOAN TRANSACTION. THE LEARNED C IT(A) HOWEVER, DELETED THE DISALLOWANCE OBSERVING AS UNDER: 5.2.6 IN THE CASE OF THE APPELLANT, THE LOAN HAS B EEN RECEIVED FROM SMT. MANISHA KATIRA, WHO IS A THIRD P ARTY. HER IDENTITY IS NOT IN DOUBT AND EVEN THE GENUINENESS O F THE TRANSACTION IS NOT QUESTIONED BY THE AO. IT IS THE CAPACITY OF THE CREDITOR TO ADVANCE THE MONEY WHICH IS DOUBTED BY THE AO. SUMMONS HAVE BEEN RECORDED WHEREBY SHE HAS ACCEPTED HAVING ADVANCED THE MONEY IN QUESTION. SH E EXPLAINED THE SOURCE OF THE SAME AS SHE HAS BEEN DO ING THE BUSINESS OF SUPPLYING THE FOOD ITEMS TO PERSONS AND ALSO UNDERTAKES STITCHING WORK AND HAS BEEN DOING THIS W ORK FOR THE LAST 17 YEARS ON CASH BASIS AND THIS PROVES HER CAPACITY. SMT. MANISHA KATIRA IS A REGULAR ASSESSEE. WHATEVER HAS BEEN STATED BY THE CREDITOR EVEN IF NOT TRUE, CANNO T BE QUESTIONED WITHOUT PLACING ON RECORD ANYTHING CONTR ARY TO THAT EFFECT. STATEMENT OF THE CREDITOR CAN ONLY BE REJECTED BY MAKING FURTHER INVESTIGATIONS IN THE MATTER AND BY PLACING ON RECORD THE EVIDENCE THAT WHATEVER STATED IS NOT TRU E. TILL SUCH EVIDENCE IS NOT PLACED ON RECORD, THE CAPACITY OF THE CREDITOR CANNOT BE QUESTIONED AND NO ACTION CAN BE TAKEN IN THE CASE OF THE APPELLANT HUF. IF THE CAPACITY IS STILL IN DOUBT, ACTION MAY BE INITIATED IN THE CASE OF THE C REDITOR BY 4 ITA 1429/MUM/10 BIPIN RAMJI KATIRA (HUF) RESORTING TO STATUTORY REMEDIES PROVIDED IN THE INC OME TAX ACT. THE APPELLANT HUF CANNOT BE PENALIZED FOR ACT S OF OMISSION OR COMMISSION, IF ANY, OF THE THIRD PARTY CREDITOR. 4. WE HAVE HEARD THE LEARNED REPRESENTATIVES AND HAV E PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT THE LEA RNED CIT(A) AFTER APPRECIATING THE EVIDENCES PRODUCED BY THE ASSESSEE INCLUDING THE STATEMENT OF SMT. MANISHA KATIRA HAS HELD THAT THE ASSESSEE C OULD NOT BE EXPECTED TO DO MORE THAN IT HAS ALREADY DONE TO PROVE THE GENUI NENESS OF TRANSACTION AND CREDITWORTHINESS OF THE CREDITOR. WE, THEREFORE , DO NOT FIND ANY INFIRMITY IN THE WELL-REASONED ORDER OF THE CIT(A) ON THIS IS SUE ALSO AND THE SAME IS ACCORDINGLY UPHELD. 5. IN THE RESULT THE APPEAL OF THE REVENUE IS DISMI SSED. ORDER WAS PRONOUNCED IN THE OPEN COURT ON 30.11.201 5. SD/- SD/- (G S PANNU) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIA L MEMBER MUMBAI; '( DATED : 30 NOVEMBER, 2015. SA 5 ITA 1429/MUM/10 BIPIN RAMJI KATIRA (HUF) () ' #*+ ,+# /COPY OF THE ORDER FORWARDED TO : 1. /THE APPELLANT. 2. / THE RESPONDENT. 3. -# ( ) / THE CIT(A), MUMBAI. 4. -# / CIT 5. +./ # , , / DR, F BENCH, ITAT, MUMBAI () ! / BY ORDER, ! +# # //TRUE COPY// / !0 (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI