Smt. Rupalben H. Patel, Borsad V. The Dy.CIT, Central Circle-1, Baroda

ITA 1541/AHD/2015

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 5888 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 9 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-03-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2010-2011
• Appeal Filed On: 29-05-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ADITYA SHUKLA
• Assessee Lawyers: B T THAKKAR
• Keywords: Unexplained cash credit
• Section: 44AD; 68

Judgement Text

, - IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH SMC BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER ./ ITA NO. 1541/AHD/2015 / ASSESSMENT YEAR: 2010-11 SMT.RUPALBEN H. PATEL POST FALIA SARDAR CHOWK BORSAD 388540 PAN : AKNPP 5263 D VS DCIT, CENT.CIR.1 BARODA. / (APPELLANT) / (RESPONDENT) ASSESSEE BY : SHRI B.T. THAKKAR, AR REVENUE BY : SHRI ADITYA SHUKLA, SR.DR / DATE OF HEARING : 13/02/2018 /DATE OF PRONOUNCEMENT : 21/03/2018 O R D E R ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL AGAINST O RDER OF LD.CIT(A)-12, AHMEDABAD DATED 7.3.2015 PASSED FOR T HE ASSTT.YEAR 2010- 11. 2. ASSESSEE IS CHALLENGING CONFIRMATION OF ADDITION OF RS.9,39,102/- WHICH WAS ADDED BY THE AO WITH AID OF SECTION 68 OF THE INCOME TAX ACT, 1961. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE HA S FILED HER RETURN OF INCOME ON 20.9.2010 DECLARING TOTAL INCOME AT RS.2, 67,270/-. THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY ASSESSMENT A ND NOTICE UNDER SECTION 143(2) WAS ISSUED AND SERVED UPON THE ASSES SEE. THE ASSESSEE AT THE RELEVANT TIME WAS ENGAGED IN BUSINESS OF CIVIL CONSTRUCTION. ON ITA NO.1541/AHD/2015 - 2 - SCRUTINY OF THE ACCOUNTS, IT REVEALED TO THE AO THA T THE ASSESSEE DEPOSITED A SUM OF RS.7.00 LAKHS IN THE BANK ACCOUN T ON 12.05.2009. THE LD.AO HAS DIRECTED THE ASSESSEE TO EXPLAIN SOURCE A ND NATURE OF THE TRANSACTION. IN RESPONSE TO THE QUERY OF AO, IT WA S CONTENDED THAT ARUNABEN RAVJIBHAI PATEL HAS PURCHASED A PLOT VIDE REGISTERED SALE DEED ON WHICH CONSTRUCTION WAS TO BE RAISED. THE SALE D EED WAS EXECUTED 9.02.2011. A SUM OF RS.1,76,274/- PAID THORUGH HDF C ACCOUNT WAS MADE FOR LAND AND RS.7.00 LAKHS PAID THROUGH CHEQUE NO.003070 WAS MADE TO THE ASSESSEE AS ADVANCE FOR CONSTRUCTION PU RPOSE. BOTH THESE FACTS ARE DULY NARRATED IN THE DEED. THUS, THE ASS ESSEE HAS RAISED CONSTRUCTION AND INCURRED THIS EXPENDITURE. IT WAS AN ADVANCE FROM SMT.ARUNABEN PATEL, AND THEREFORE, IT SHOULD NOT BE ADDED AS UNEXPLAINED INCOME. THE LD.AO DID NOT ACCEPT THIS C ONTENTION OF THE ASSESSEE. HE WAS OF THE OPINION THAT THIS AMOUNT O UGHT TO BE RECOGNISED AS INCOME IN THE GROSS CONTRACT RECEIPT. HE MADE D ISCUSSION WITH A DIFFERENT ANGLE AND ACCORDINGLY CONFIRMED ADDITION. SIMILARLY, AN ADDITION OF RS.2,37,691/- WAS MADE. THE ASSESSEE H AS CONTENDED BEFORE THE LD.CIT(A) THIS AMOUNT WAS ALREADY INCLUDED BY H ER IN THE GROSS RECEIPT COMPUTED UNDER SECTION 44AD OF THE ACT ON W HICH PROFIT IN TERMS OF SECTION 44AD WAS OFFERED FOR TAXATION. HE R GROSS RECEIPTS DID NOT EXCEED THE LIMIT PROVIDED IN SECTION 44AD, AND THEREFORE, SHE WAS NOT REQUIRED TO MAINTAIN BOOKS OF ACCOUNTS. THE LD .AO DID NOT ACCEPT THIS CONTENTION OF THE LD.COUNSEL FOR THE ASSESSEE. 4. ON APPEAL, THE LD.CIT(A) HAS ACCEPTED THE CONTEN TION OF THE ASSESSEE QUA SECOND ISSUE. HE DIRECTED THE AO TO VERIFY WHETHE R THE ASSESSEE HAS INCLUDED A SUM OF RS.2,37,691/- IN THE GROSS RECEIPTS ITA NO.1541/AHD/2015 - 3 - COMPUTED UNDER SECTION 4AD. IF IT IS INCLUDED THEN NO SEPARATE ADDITION OUGHT TO BE MADE. AFTER CONSIDERING THE OBSERVATIO N OF THE LD.CIT(A), I AM OF THE VIEW THAT IF THE ASSESSEE HAS ALREADY ACC OUNTED A SUM OF RS.2,37,691/- IN THE CONTRACT RECEIPT, THEN IT IS N OT TO BE ADDED AS UNEXPLAINED CASH CREDIT SEPARATELY. THE LD.AO SHAL L VERIFY THIS FACT AND THEREAFTER ADJUDICATE THE ISSUE. IN OTHER WORDS, I F IT IS INCLUDED IN THE GROSS RECEIPT, THEN NO ADDITION CAN BE MADE BECAUSE THE ASSESSEE HAS ALREADY OFFERED INCOME ON THIS AMOUNT. IF IT IS NOT INCLUDED IN THE GROSS RECEIPT THEN THE LD.AO SHALL VERIFY SOURCE AND NATU RE OF THIS RECEIPT, AND THEREAFTER ADJUDICATE THE ISSUE. 5. SO FAR AS ADDITION OF RS.7 LAKHS IS CONCERNED WE FIND THAT CHEQUE VIDE WHICH THIS AMOUNT WAS RECEIVED BY THE ASSESSEE HAS BEEN STATED IN THE DEED OF ARUNABEN PATEL. THERE IS A SPECIFIC ME NTION THAT RS.7.00 LAKHS WILL BE MEANT FOR CONSTRUCTION. THIS DEED WA S EXECUTED BEFORE ISSUANCE OF NOTICE UNDER SECTION 143(2) BY THE AO. THE DEED IS DATED 9.2.2011 WHEREAS THE CASE OF THE ASSESSEE WAS SELEC TED FOR SCRUTINY ASSESSMENT VIDE NOTICE DATED 12.9.2011. THEREFORE, THERE COULD NOT BE ANY MANIPULATION AT THE END OF THE ASSESSEE. IN TH E BANK STATEMENTS PLACED AT PAGE NO.19 OF THE PAPER BOOK THOUGH THIS CHEQUE WAS RECEIVED FROM KIRANBEN USA, BUT IT WAS MEANT FOR CONSTRUCTIO N AND CREDITED IN THE ACCOUNTS OF THE ASSESSEE. AS FAR AS ASSESSEEE S SOURCE IS CONCERNED, IT IS NOT RELEVANT WHETHER VENDEE OF THE HOUSE HAS CON TRIBUTED THIS AMOUNT OR SOMEONE ELSE HAS CONTRIBUTED IT FOR CONSTRUCTION OF THE ASSESSEE. THE QUESTION IS IN THE HANDS OF THE ASSESSEE. IT WAS A N ADVANCE AMOUNT FOR CONSTRUCTION OF HOUSE WHICH IS BEING PURCHASED BY A RUNABEN PATEL. THEREFORE, TAKING INTO CONSIDERATION DOCUMENTARY EV IDENCE ON RECORD, I ITA NO.1541/AHD/2015 - 4 - AM SATISFIED THAT THE ASSESSEE HAS EXPLAINED NATURE AND SOURCE OF RS.7 LAKHS, ADDITION IS NOT SUSTAINABLE. ACCORDINGLY, W E ALLOW THE APPEAL OF THE ASSESSEE AND DELETE ADDITION. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . PRONOUNCED IN THE OPEN COURT ON 21 ST MARCH, 2018. SD/- (RAJPAL YADAV) JUDICIAL MEMBER AHMEDABAD; DATED, 21/03/2018