M/s Anil Kumar, Daltonganj V. ITO, Daltonganj

ITA 158/RAN/2016

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 7790 (ITAT-RANCHI)
• Duration Of Justice: 1 year(s) 11 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-05-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2005-2006
• Appeal Filed On: 25-05-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P K MONDAL
• Assessee Lawyers: S K PODDAR; DINESH PODDAR
• Keywords: Corroborative evidences; Assessment record
• Section: 68

Judgement Text

1 ITA NO.158/RAN/2016 M/S ANIL KUMAR A.Y.2005-06 IN THE INCOME TAX APPELLATE TRIBUNAL, RANCHI BENCH [BEFORE HONBLE SHRI J.SUDHAKAR REDDY, AM & SHRI S.S.VISWANETHRA RAVI, JM ] ITA NO.158/RAN/2016 ASSESSMENT YEAR : 2005-06 M/S ANIL KUMAR -VERSUS- I.T.O., WARD-3(3) DALTONGANJ DALTONGANJ (PAN: AAAJFA 4550 E) (APPELLANT) (RESPONDENT) FOR THE APPELLANT: SHRI S.K.PODDAR & SHRI DINES H PODDAR FOR THE RESPONDENT: SHRI P.K.MONDAL, JCIT DATE OF HEARING : 28.02.2018. DATE OF PRONOUNCEMENT : 04.05.2018. ORDER PER S.S.VISWANETHRA RAVI, JM THIS APPEAL BY THE ASSESSEE IS AGAINST THE ORDER D ATED 01.04.2016 PASSED BY C.I.T-(A)-RANCHI FOR A.Y.2005-06. 2. THE ONLY ISSUE TO BE DECIDED IS AS TO WHETHER T HE CIT(A) IS JUSTIFIED IN CONFIRMING THE ADDITION MADE BY THE AO U/S 68 OF THE INCOME TA X ACT, 1961 (ACT) IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 3. THE LD. AR SUBMITS THAT THE AO MADE AN ADDITION U/S 68 OF THE ACT OF CREDITS FROM THREE PARTIES WHEREIN THE SAID THREE PARTIES HAVE INTRODUCED THE CAPITAL IN THE FIRM I.E. ASSESSEE, TO AN EXTENT OF RS.35,46,944/-. THE LD. A R FURTHER SUBMITS THAT ALL THE THREE PARTIES ARE PARTNERS OF THE ASSESSEE FIRM. DURING T HE COURSE OF ASSESSMENT PROCEEDINGS THE AO ASKED THE ASSESSEE TO FILE COPIES OF THE IN COME TAX RETURNS, CAPITAL ACCOUNTS, BALANCE SHEETS AND STATEMENT OF ACCOUNTS ISSUED BY THE RESPECTIVE BANKS OF ALL THESE THREE PARTNERS. THE AO FOR NON SUBMISSION OF THE PR OOF AS DIRECTED, ADDED THE SAID AMOUNT TO THE TOTAL INCOME OF THE ASSESSEE U/S 68 O F THE ACT. 4. THE CIT(A) IN SPITE OF SUBMISSIONS OF THE ASSES SEE THAT ADDITION MADE U/S 68 OF THE ACT IS NOT MAINTAINABLE, CONFIRMED THE VIEW TA KEN BY THE AO. THE LD. AR SUBMITS 2 ITA NO.158/RAN/2016 M/S ANIL KUMAR A.Y.2005-06 THAT THE ISSUE IS COVERED BY THE DECISION OF THE SM C BENCH IN THE CASE OF M/S. FAMILY SHOP IN ITA NO.155/RAN/2015 VIDE ITS ORDER DATED 11 .03.2016 AND REFERRED TO PARA NO.3.2 OF THE SAID ORDER AND ARGUED THAT THE PARTNE RS OF THE FIRM ARE ASSESSED TO TAX AND HAVE CONFIRMED THEIR CAPITAL CONTRIBUTION BY FILING THE REQUISITE DOCUMENTS AND HENCE ANY ADDITION THEREON OF PURPORTED UNDISCLOSED SOURC E OF CAPITAL CONTRIBUTION SHOULD BE MADE IN THE HANDS OF THE PARTNER INDIVIDUALLY BUT NOT IN THE HANDS OF THE ASSESSEE. THE LD. AR PLEADED TO ALLOW GROUND NOS. 1 AND 2 RAISED BY THE ASSESSEE IN THIS REGARD. 5. THE LD. DR SUBMITS THAT THE ASSESSEE WAS ASKED TO PRODUCE ALL THE DETAILS REGARDING WHETHER THE SAID THREE PARTIES HAVE BEEN ASSESSED TO TAX ETC. THE ASSESSEE IN SPITE OF AVAILING MANY OPPORTUNITIES TO FILE THE SA ID INFORMATION AS SOUGHT BY THE AO DID NOT PRODUCE THE SAME DURING THE COURSE OF ASSES SMENT PROCEEDINGS. THE LD. DR REFERRED TO PARA-6 AND 7 OF THE ASSESSMENT ORDER. B EFORE CIT(A) ALSO THE ASSESSEE COULD NOT PRODUCE THE DETAILS IN RESPECT OF SOURCE OF CAPITAL INTRODUCTION PLACED RELIANCE ON THE ASSESSMENT ORDER. THE LD. DR FURTHE R SUBMITS THAT THE ASSESSEE FAILED TO GIVE PROPER EXPLANATION FOR THE CAPITAL THAT HAS BE EN INTRODUCED IN THE ASSESSEES FIRM. 6. HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MAT ERIALS AVAILABLE ON RECORD. IT IS NOTICED THAT AS RIGHTLY POINTED OUT BY THE LD. DR N O EVIDENCE WHATSOEVER WAS FILED DURING THE COURSE OF ASSESSMENT PROCEEDINGS FOR DUE VERIFICATION OF CAPITAL INTRODUCTION BY SMT. CHAYA GUPTA, SMT. RAJRANI GUPT A AND THE OLD PARTNER SMT. UMA RANI GUPTA, SHRI ANUPAM GUPTA AND SHRI NAVEEN GUPTA . THEREFORE IT IS VERY MUCH CLEAR FROM THE ASSESSMENT RECORDS THAT THE ASSESSEE COULD NOT PRODUCE SUPPORTING EVIDENCE FOR SOURCE OF CAPITAL INTRODUCTION BY THE AFORESAID PARTIES. THE CIT(A) HOWEVER CONSIDERING THE EVIDENCE SAID TO HAVE BEEN FILED BY THE ASSESSEE DURING THE FIRST APPELLATE PROCEEDINGS WAS OF THE OPINION THAT THE SAID PARTIES PROVED THEIR IDENTITY AND GENUINENESS OF THE TRANSACTIONS BUT HO WEVER NOT SATISFIED WITH THE OTHER PART I.E. CREDITWORTHINESS OF THE PARTIES. IT IS NO TICED FROM THE ASSESSMENT ORDER THAT SMT. CHAYA GUPTA WAS ADMITTED AS NEW PARTNER IN THE FIRM AND INTRODUCED CAPITAL TO THE EXTENT OF RS.20,00,000/-. SMT. CHAYA GUPTA IS T HE DAUGHTER OF SMT. RAJARANI 3 ITA NO.158/RAN/2016 M/S ANIL KUMAR A.Y.2005-06 GUPTA, WHO HAS ALSO JOINED AS A PARTNER IN THE FIRM ALONG WITH SMT. CHAYA GUPTA. THE DETAILS OF SMT. CHAYA GUPTA WERE NOT AT ALL BEFORE THE AO IN THE ASSESSMENT PROCEEDINGS EXCEPT THE FACT THAT THE SAID CAPITAL W AS INTRODUCED BY A CHEQUE. BEFORE CIT(A) RETURN OF INCOME FOR A.Y.2005-06 WERE FILED AND ON EXAMINATION OF THE SAID DETAILS THE CIT(A) FOUND THE SAID SMT. CHAYA GUPTA HAS INCOME FROM FIRM TOWARDS SALARY AND INCOME FROM HOUSE PROPERTY AND FOR NOT F ILING CAPITAL ACCOUNT FOR A.Y.2004-05, THE CIT(A) HELD SMT. CHAYA GUPTA HAS F AILED TO PROVE GENUINENESS AS WELL AS CREDITWORTHINESS OF THE TRANSACTIONS. 7. IN RESPECT OF SMT. RAJARANI GUPTA, WHO IS ALSO A NEW PARTNER AND MOTHER OF SMT. CHAYA GUPTA, WHEREIN ON EXAMINATION OF THE CAP ITAL ACCOUNT AND RETURN OF INCOME FOR A.Y.2005-06 THE CIT(A) HELD SMT. RAJARAN I GUPTA FAILED TO PROVE CREDITWORTHINESS IN RESPECT OF CAPITAL INTRODUCTION TO THE EXTENT F RS.6,46,944/-. 8. IN RESPECT OF THE PARTIES I.E. SMT. UMA RANI GUP TA, SHRI ANUPAM GUPTA AND SHRI NAVIN GUPTA, THE CIT(A) EXAMINED THE COPIES OF THE RETURN OF INCOME FOR A.Y.2005-06 IN RESPECT OF SMT. UMARANI GUPTA WAS NO T SATISFIED WITH CAPITAL ACCOUNT AND HENCE THE JOINING OF THE CAPITAL INTRODUCTION. THE CIT(A) ALSO EXAMINED THE RETURN OF INCOME FOR SHRI ANUPAM GUPTA AND SHRI NAV IN GUPTA WHEREIN HE FOUND THE SAME AS THAT OF SMT. UMARANI GUPTA AND HELD ALL THE PARTIES ABOVE FAILED TO PROVE CREDITWORTHINESS OF CAPITAL INTRODUCTION. 9. BEFORE US, THE LD. AR PLACED RELIANCE ON THE DEC ISION OF COORDINATE SMC BENCH IN THE CASE OF M/S. FAMILY SHOP IN ITA NO.15 5/RAN/2015 AND BY REFERRING TO PARA 3.2 ARGUED THAT ADDITION U/S 68 IS NOT MAINTAI NABLE AGAINST THE FIRM IF AT ALL THE AUTHORITIES ARE NOT SATISFIED WITH THE EXPLANATION AS OFFERED BY THE PARTNERS ABOUT THE SOURCE OF INTRODUCED AS CAPITAL IN THE FIRM THE ADD ITION CAN BE MADE IN THE HANDS OF THE PARTNERS BUT NOT IN THE HANDS OF THE ASSESSEE I.E. FIRM. ON PERUSAL OF THE DECISION OF THE COORDINATE BENCH WE FIND IN THE SAID CASE OF THE P ARTNERS, WHO WERE ASSESSED TO TAX AND CONFIRMED THEIR CAPITAL INTRODUCTION BEFORE TH E AUTHORITIES AND AS SUCH THE COORDINATE BENCH HELD THE ADDITION IS NOT MAINTAINA BLE IN THE HANDS OF THE FIRM. IN THE PRESENT CASE WE FIND FROM THE RECORD THAT NO PROPER EXPLANATION WAS OFFERED TO THE AO 4 ITA NO.158/RAN/2016 M/S ANIL KUMAR A.Y.2005-06 IN RESPECT OF SUBMITTING ALL THE DETAILS REGARDING THE CASH BALANCE, BANK BALANCE AS PER THE BANK STATEMENT AND COPIES OF RETURNS OF INCOME. THE SAID DETAILS APPEARS TO HAVE BEEN FILED BEFORE CIT(A) AND ON EXAMINATION OF SUCH DETAILS AS DISCUSSED ABOVE, WE FIND THE CIT(A) DID NOT SATISFY HIMSELF IN RESPECT OF CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTIONS INVOLVING THE ADDITION MADE U/S 68 OF THE ACT. IN SUCH CIRCUMSTANCES WE FIND THE DECISION OF THE COORDINAT E BENCH AS POINTED OUT BY THE LD. AR IN THE CASE OF M/S FAMILY SHOP FOR THE PROPOSITI ON ADDITION CANNOT BE MADE IN THE HANDS OF THE FIRM IS APPLICABLE IN THE FACTS AND CI RCUMSTANCES OF THE PRESENT CASE. RESPECTFULLY FOLLOWING THE PROPOSITION OF LAW LAID DOWN BY THE COORDINATE BENCH OF TRIBUNAL IN THE CASE OF M/S FAMILY SHOP SUPRA, WE D ELETE THE ADDITION. ADDITION, IF ANY, MAY BE CONSIDERED IN THE HANDS OF PARTNERS ACC ORDINGLY, GROUNDS RAISED BY THE ASSESSEE ARE ALLOWED.. 10. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALL OWED. O RDER PRONOUNCED IN THE OPEN COURT ON 04.05.2018. SD/- SD/- [J.SUDHAKAR REDDY] [ S.S.VISWANETHRA RAVI ] ACCOUNTANT MEMBER JUD ICIAL MEMBER DATED : 04.05.2018. [RG SR.PS] COPY OF THE ORDER FORWARDED TO: 1.M/S ANIL KUMAR, BELWATIKA, DALTONGANJ-822 101. 2. I.T.O., WARD-3(3), DALTONGANJ. 3. C.I.T.(A)-RANCHI, JHARKHAND 4. C .I.T.- RANCHI, JHARKHAND 5. CIT(DR), RANCHI. TRUE COPY BY ORDER, SENIOR PRIVATE SECRETARY HEAD OF OFFICE/D.D.O., ITAT, KOLKATA BENCHES 5 ITA NO.158/RAN/2016 M/S ANIL KUMAR A.Y.2005-06