Kunal Kaniyalal Patel, Ahmedabad. V. ITO, Ward-2(2)(2), Ahmedabad

ITA 1462/AHD/2017

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 5626 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 3 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-10-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Assessment Year: 2012-2013
• Appeal Filed On: 15-06-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: RIMS SONIA KUMAR
• Assessee Lawyers: BIPIN J SHAH
• Keywords: Additional evidence; Third party statement
• Section: 143(3); 143(1); 201; 143(2); 64; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD D BENCH BEFORE: SHR I RAJPAL YADAV , JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER KUNAL KANAIYALAL PATEL,18/B, NATHALAL PARK, RANIP, AHMEDABAD PAN: APZPP8106L (APPELLANT) VS THE IT O , WARD - 2 ( 2)(2 ) , AHMEDABAD (RESPONDENT) REVENUE BY : S H RI/MS. SONIA KUMAR , SR. D . R. ASSES SEE BY: SHRI BIPIN J. SHAH , A.R. DATE OF HEARING : 29 - 08 - 2 019 DATE OF PRONOUNCEMENT : 01 - 10 - 2 019 / ORDER P ER : AMARJIT SINGH, ACCOUNTANT MEMBER : - THIS ASSESSEE S APPEAL F OR A.Y. 2012 - 13 , ARI SES FROM ORDER OF THE CIT(A) - 10 , AHMEDABAD DATED 29 - 03 - 2 017 , IN PROCEEDINGS UNDER SECTION 143(3) R.W.S.14 4 OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT . 2. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL: - 1. ON FACTS AND CIRC UMSTANCES OF THE CASE, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS - 10) HAS ERRED IN CONFIRMING THE ADDITION MADE BY ASSESSING OFFICER OF RS. 5,18,194/ - IN RESPECT OF THREE CREDITORS OUTSTANDING BALANCE NOT PROVED AS GENUINE BY NOT GRANTING PROPER AND S UFFICIENT OPPORTUNITIES AND BY NOT ACCEPTING THE EVIDENCES IN RESPECT OF CONFIRMATION AND CONTRA ACCOUNTS OF THE THREE CREDITORS. 2. THAT THE LEARNED CIT (APPEALS) HAD ERRED IN CONFIRMING THE ADDITION OF RS. 21,50,000/ - MADE BY ASSESSING OFFICER ON ACCOUNT OF UNSECURED LOANS RECEIVED FROM KUNAL K PATEL H.U.F. ONLY BECAUSE HIS PAN NUMBER WAS NOT GIVEN, WHICH IN FACT WAS GIVEN IN APPELLANT'S SUBMISSION BEFORE ASSESSING OFFICER ON 9/3/2015, AS WELL AS IN SUBMISSION WITH C.I.T. (APPEALS) VIDE LETTER DT.23/02/20 17. I T A NO . 1462 / A HD/20 17 A SS ESSMENT YEAR 2012 - 13 I.T.A NO. 1462 /AHD/20 17 A.Y. 2012 - 13 PAGE NO SHRI KUNAL KANAIYALAL PATEL VS. IT O 2 3. THAT THE LEARNED C.I.T. (APPEALS), ERRED IN CONFIRMING THE ACTION OF ASSESSING OFFICER OF NOT GRANTING PROPER & SUFFICIENT OPPORTUNITY BY IGNORING THE FACT THAT NOTICES ISSUED U/S.143(2) & 143(1) WERE NOT SERVED TO THE APPELLANT DUE TO CHANGE OF ADD RESS, AND THUS THE ASSESSMENT WAS BASED BY ADOPTING NEGATIVE APPROACH. 3. THE FACT IN BRIEF IS THAT RETURN OF INCOME DECLARING INCOME OF RS. 3 , 13 , 460/ - WAS FILED ON 21 ST SEP, 2012. THE CASE WAS SELECTED SUBJECT TO SCRUTINY ASSESSMENT AND NOTICE U/ S. 143(2) OF THE ACT WAS ISSUED ON 7 TH AUGUST, 2013. THE ASSESSMENT U/S. 143(3) OF THE ACT WAS FINALIZED ON 10 TH MARCH, 2015 DETERMINING THE TOTAL INCOME AT RS. 30 , 52 , 268/ - . THE FACT PERTAINING TO TWO GROUNDS OF APPEAL FILED BY THE ASSESSEE ARE DISCUSSED WHILE ADJUDICATING THE APPEAL OF THE ASSESSEE AS FOLLOWS: - GROUND NO. 1 (ADDITION OF RS. 5 , 18 , 194 ON ACCOUNT OF SUNDRY CREDITORS) 4. DURING THE COURSE OF ASSESSMENT ON VERIFICATION OF THE DETAIL FILED, THE ASSESSING OFFICER NOTICED THAT ASSESSEE H AS SHOWN SUNDRY CREDITORS OF RS. 64 , 88 , 696/ - . THE ASSESSING OFFICER HAS FURTHER NOTICED THAT ASSESSEE HAS NOT FURNISHED CONTRA ACCOUNT IN RESPECT OF THE FOLLOWING SUNDRY CREDITORS: - SR. NO. NAME OF THE CREDITOR BALANCE SHOWN AS ON 31/03/2012 1 DHANLAXMI STEEL TRADERS RS. 2,33,688/ - 2 DHIRAJ STEEL CORPORATION RS. 1,12,354/ - 3 M ASLAM & COMPANY RS. 1,72,152/ - TOTAL RS. 5,18,194/ - ON ACCOUNT OF NON - FURNISHING OF THE CONTRA ACCOUNT, THE ASSESSING OFFICER HAS TREATED THE AFORESAI D SUNDRY CREDITORS OF RS. 5 , 18 , 194/ - AS UNEXPLAINED INCOME OF THE ASSESSEE AND THE SAME WAS ADDED TO THE TOTAL INCOME OF THE ASSESSEE. I.T.A NO. 1462 /AHD/20 17 A.Y. 2012 - 13 PAGE NO SHRI KUNAL KANAIYALAL PATEL VS. IT O 3 5. THE ASSESSEE HAS PREFERRED APPEAL BEFORE THE LD. CIT(A). THE LD. CIT(A) HAS DISMISSED THE APPEAL OF THE ASSES SEE. 6. WE HAVE HEARD THE RIVAL CO NTENTION ON THIS ISSUE AND PERUSED THE MATERIAL ON RECORD CAREFULLY. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER HAS ASKED THE ASSESSEE TO FILE CONTRA DETAIL IN RESPECT OF THE SUNDRY CREDITORS . THE ASSESSEE HAS FILED THE CONTRA DETAILS OF THE SUNDRY CREDITORS ON 3 RD MARCH, AND 9 TH MARCH, 2015 RESPECTIVELY. HOWEVER, THE ASSESSEE COULD NOT FURNISH THE CONTRA CONFIRMATION IN RESPECT OF THREE SUNDRY CREDITORS AS A SSESSE E COULD OBTAIN CONTRA CONFI RMATION FROM THESE SUNDRY CREDITORS ONLY ON 11 TH MARCY, 201 5. T HE ASSESSEE HAS TRI ED TO SUBMIT TH E SE CONTRA - CONFIRMATION OF THREE SUPPLIERS ON 12TH MARCH, 2015 BEFORE THE ASSESSING OFFICER BUT THE ASSESSING OFFICER HAS DECLINED TO ACCEPT THE SAME ON THE G ROUND THAT HE HAD ALREADY PASSED THE ASSESSMENT ORDER ON 10 TH MARCH, 2015 BY MAKING ADDITION OF RS. 5 , 18 , 194/ - IN RESPECT OF ABOVE THREE OUTSTANDING SUNDRY CREDITORS . DURING THE COURSE OF APPELLATE PROCEEDINGS, THE ASSESSEE HAS FILED ADDITIONAL EVIDEN CES UNDER RULE 46A BEFORE THE LD. CIT(A). T HE LD. CIT(A) AFTER CONSIDERING THE FACT T H A T NOTICES OF HEARING COULD NOT BE SERVED ON THE ASSESSEE BECAUSE OF CH ANGE OF ADDRESS AND CALLED REMAND REPORT FROM THE A SSESSING OFFICER. T HE LD. CIT(A) HAS CONFIRM ED THE ADDITION STATING THAT AS PER THE REMAND REPORT , THE ASSESSEE H A S SIMPLY FILED THE CONFIRMATION BUT NOT FILED THE PAN NO. OF THE SUNDRY CREDITORS. IN THIS REGARD, DURING THE COURSE OF APPELLATE PROCEEDINGS BEFORE US, THE LD. COUNSEL HAS CONTENDED TH AT ASSESSING OFFICER ONLY CALLED CONFIRMATION S OF CONTRA ACCOUNT S AND COPIES OF SALE INVOICES OF THE SUPPLIERS. THE ASSESSEE HAS SUPPLIED THE CONFIRMATION OF CONTRA ACCOUNT S AND COPIES OF INVOICES IN I.T.A NO. 1462 /AHD/20 17 A.Y. 2012 - 13 PAGE NO SHRI KUNAL KANAIYALAL PATEL VS. IT O 4 RESPECT OF THE SUPPLIERS EXCEPT THREE SUPPLIERS . THE A SS ESSING OFFICER HAS ACCEPTED THE SIMILAR CONFIRMATION OF CONTRA ACCOUNTS AND COPIES OF INVOICES IN ALL THE CASES AND NO T ANY ADDITI ON WAS MADE , H OWEVER, IN THE CASE OF THREE SUPPLIERS THE LD. CIT(A) HAS SUSTAINED THE ADDITION ON THE GROUND THAT ASSESSEE HAS NOT SUPPLIED THE OTHER INFORMATION I.E . PAN, RETURN OF INCOME ETC. IN THIS CONN ECTION, THE LD. COUNSEL HAS SUBMITTED THAT EVEN DURING TH E COURSE OF REMAND REPORT , THE ASSESSING OFFICER HAS NOT SOUGHT ANY DETAIL SUCH AS PAN/IT RETURN AND BANK STATEMEN T OF THESE THREE SUPPLIERS. WITH THE ASSISTANCE OF LD. REPRESENTATIVES , WE HAVE GONE THROUGH THE PAGE NO. 30 TO 34 OF THE PAPER BOOK PERTAINING TO LETTER DATED 3 RD MARCH, 2015 AND 9 TH MARCH, 2015 VIDE WHICH THE ASSESSEE HAS FURNISHED COPIES OF SALE INVOIC ES, COPIES OF CONTRA CONFIRMATION LETTERS IN RESPECT OF THE OTHER SUPPLIERS AND NOTICED THAT IN RESPECT OF THE THREE SUNDRY CREDITORS, THE ASSESSE E HAS ALSO FURNISHED THE SIMILAR INFORMATION VIDE LETTER DATED 23 RD FEB, 2017 BEFORE THE LD. CIT(A). THE ASSE SSING OFFICER HAS NEVER ASK ED THE ASSESSEE TO FURNISH EXTRA DETAILS I.E. PAN, RETURN OF INCOME AND BANK STATEMENT OF THE SUNDRY CREDITORS . THE ASSESSING OFFICER HAS ALSO NOT DISPROVED THE DETAILS FURNISHED BY THE ASSESSEE SIMILAR TO THE DETAILS FURNISHED IN RESPECT OF OTHER CASES. CONSIDERING THE ABOVE, THE DECISION OF LD. CIT(A) IS NOT JUSTIFIED, THEREFORE, THE APPEAL OF THE ASSESSEE IS ALLOWED ON THIS ISSUE. GROUND NO. 2 ( ADDITION OF RS. 21 .50 LACS ON ACCOUNT OF UNSECURED LOAN) 7. DURING THE COUR SE OF ASSESSMENT ON VERIFICATION OF THE RECORD, THE ASSESSING OFFICER HAS NOTICED THAT ASSESSEE HAS S HOWN FOLLOWING UNSECURED LOAN F R O M KUNAL K. PATEL HUF . SR. NO. DATE AMOUNT I.T.A NO. 1462 /AHD/20 17 A.Y. 2012 - 13 PAGE NO SHRI KUNAL KANAIYALAL PATEL VS. IT O 5 1 25/02/2012 RS. 4,00,000/ - 2 27/02/2 012 RS. 1,50,000/ - 3 27/02/2012 RS. 5,00,000/ - . 4 17/03/2012 RS. 10,00,000/ - 5 26/03/2012 RS. I,00,000/ - TOTAL RS. 21,50,000/ - DURING THE COURSE OF ASSESSMENT, THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE WAS ASKED TO FURNISH COPY OF ITR, SOURCE AND BANK STATEMENT OF KUNAL K. PATEL HUF ALONG WITH CAPACITY TO ADVANCE. THE ASSESSING OFFICER STATED THAT THE ASSESSEE HAS NOT FURNISHED THE REQUIRED DETAIL, THEREFORE, THE AFORESAID UNSECU RED LOAN TO THE AMOUNT OF RS. 21 ,50,000/ - WAS TREAT ED AS UNEXPLAINED AND ADDED TO THE TOTAL INCOME OF THE ASSESSEE. 8. ASSESSEE HAS FILED APPEAL BEFORE THE LD. CIT(A). THE LD. CIT(A) HAS DISMISSED THE APPEAL OF THE ASSESSEE. 9. WE HAVE HEARD THE RIVAL CONTENTIONS ON THIS ISSUE . DURING THE COURSE OF ASSESSMENT , THE ASSESSING OFFICER HAS MADE ADDITION U/S. 68 IN RESPECT OF UNSECURED LOAN OBTAINED FROM KUNAL K. PATEL ON THE GROUND THAT ASSESSEE HAS NOT FURNISHED THE DETAIL OF THE LOAN TRANSACTION. THE LD. CIT(A) HAS SUSTAINED THE ADDITION ST ATING THAT EVEN IN THE ADDITIONAL EVIDENCE PRODUCED BY THE ASSESSEE, THE ASSESSEE HAS NOT FURNISHED PAN NO OF THE LENDER ON THE CONFIRMATION AND STATED THAT BANK STATEMENT FILED BY THE ASSESSEE WAS FOR THE PERIO D 9 - 12 - 2011 TO 06 - 07 - 2012 ONLY. T HEREFORE , T HE LD. CIT(A) HAS DISMISSED THE APPEAL OF THE ASSESSEE . DURING THE CO U RS E OF APPELLATE I.T.A NO. 1462 /AHD/20 17 A.Y. 2012 - 13 PAGE NO SHRI KUNAL KANAIYALAL PATEL VS. IT O 6 PROCEEDINGS BEFORE US, THE LD. COUNSEL HAS CONTENDED THAT DURING THE COURSE OF ASSESSMENT VIDE LETTER DATED 9 TH MARCH, 2015, T HE ASSESSEE HAS SUBMITTED PAN NO. AAJHK037 4A OF THE KUNAL K. PATEL ALONG WITH CONFIRMATION AND HI S BANK STATEMENT AND REFERRED PAGE NO. 733 TO 734 AND 48 OF THE PAPER BOOK . WITH THE ASSISTANCE OF LD. REPRESENTATIVES , WE HAVE PERUSED THE AFORESAID DOCUMENT MENTIONED BY LD. COUNSEL AND IT IS NOTICE D THAT VIDE AFORESAID LETTER DATED 9 TH MARCH, 2015 , THE ASSESSEE HAS ATTACHED COPY OF CONFIRMATION ALONG WITH PAN NO. AND COPY OF BANK STAT EMENT OF THE LENDER. I T IS ALSO NOTICED THAT AT PAGE NO. 48 OF THE PAPER BOOK , THE ASSESSEE HAS PL ACED THE COPY OF C ONFIRMATION F R O M KUNAL K. PATEL HUF IN RESPECT OF PROVIDING LOAN TO THE AMOUNT OF RS. 21 ,50,000/ - AND AT PAGE NO. 49 THE ASSESSEE HAS PLACED COPY OF ACKNOWLEDGEMENT OF INCOME TAX RETURN FILED BY THE LENDER, KU NAL K. PATEL AND AT PAGE NO. 50 , THE ASSESSEE H AS ALSO PLACED THE COPY OF BANK ACCOUNT STATEMENT DEMONSTRATING THAT THE AMOUNT OF UNSECURED LOAN WAS PROVIDED TO THE ASSESSEE. THE ASSESSEE HAS ALSO SUBMITTED THAT ACTUALLY IT WAS A ONE P A GE BANK STATEMENT BECAUSE THE ASSESSEE HAS OPENED BANK ACCOUNT ON LY ON 9 TH DEC, 2011 AND THE HUF WAS ESTABLISHED ON 17 TH JAN, 2011, THEREFORE, THE LD. CIT(A) HAS INCORRECTLY ON ASSUMPTION BASIS SUSTAINED THE ADDITION WITHOUT POINTING OUT ANY DEFECT OR IN FIRM I TY IN THE INFORMATION PROVIDED BY THE ASSESSEE. AFTER TAKING INTO CONSIDERATION THE AFORESAID FACTS AND CIRCUMSTANCES, WE CONSIDER THAT THE ASSESSEE HAS DEMONSTRATED FROM THE AFORESAID SAID COPIES OF DOCUMENTS AND DETAIL PLACED IN THE PAPER BOOK THAT THE REQUIRED INFORMATION WERE SUBMITTED BEFORE THE ASSESSING OFFI CER AT THE TIME OF ASSESSMENT PROCEEDINGS AND THE ASSESSING OFFICER HAS NOT CONSIDERED THE SAME BEFORE ADJUDICATING THE ISSUE IN APPEAL AND FURTHER IT IS NOTICED THAT LD. CIT(A) HAS JUST SUSTAINED THE ADDITION I.T.A NO. 1462 /AHD/20 17 A.Y. 2012 - 13 PAGE NO SHRI KUNAL KANAIYALAL PATEL VS. IT O 7 WITHOUT DISPROVING THE GENUINENESS OF TRANSAC TION DEMONSTRATED IN THE DOCUMENTS AND THE DETAILS FURNISHED BY THE ASSESSEE. IN THE LIGHT OF THE ABOVE FACTS AND CIRCUMSTANCES , WE CONSIDER THAT IT WILL BE APPROPRIATE TO RESTORE THIS ISSUE TO THE FILE OF ASSESSING OFFICER FOR DECIDING AFRESH AFTER TAKIN G INTO CONSIDERATION THE DETAIL AND DOCUMENT FURNISHED BY THE ASSESSEE. ACCORDINGLY, THIS CASE IS RESTORED TO THE FILE OF ASSESSING OFFICER AS DIRECTED ABOVE FOR DECIDING AFRESH AFTER AFFORDING ADEQUATE OPPORTUNITY TO THE ASSESSEE. 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PR ONOUNCED IN THE OPEN C OURT ON 0 1 - 10 - 201 9 SD/ - SD/ - ( RAJPAL YADAV ) ( AMARJIT SINGH ) JUDICIAL MEMBER ACCOUNT ANT MEMBER AHMEDABAD : DATED 01 / 10 /2019 / COPY OF ORDER FORWARDED TO: - 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER/ , / ,