Shri Sabbir Haji Sattar Kunda, Surat V. The Income Tax Officer, Ward 2(2), Surat

ITA 1630/AHD/2013

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 1173 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 1 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-07-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 31-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANTONY PARIATH
• Assessee Lawyers: K N BHATT
• Section: 143(3)

Judgement Text

SMC-ITA NO.1630/AHD/2013 SABBIR HAJI SATTAR KUNDA VS. ITO ASSESSMENT YEAR: 2009-10 PAGE 1 OF 4 IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, AHMEDABAD [ BEFORE SHRI PRAMOD KUMAR, ACCOUNTANT MEMBER ] ITA NO.1630/AHD/2013 ASSESSMENT YEAR: 2009-10 SABBIR HAJI SATTAR KUNDA ...............APP ELLANT PLOT NO.45-46, HASHIMI ESTATE, UDHNA MAIN ROAD, SURAT-394210 PAN : ADWPK 8030 H VS. INCOME TAX OFFICER, ........................... .RESPONDENT WARD 2 (2), SURAT APPEARANCES BY: K N BHATT, FOR THE APPELLANT ANTONY PARIATH, FOR THE RESPONDENT DATE OF CONCLUDING THE HEARING : JULY 5TH, 2016 DATE OF PRONOUNCING THE ORDER : JULY 7 TH , 2016 O R D E R BY WAY OF THIS APPEAL, THE ASSESSEE-APPELLANT HAS C HALLENGED CORRECTNESS OF THE ORDER DATED 28.03.2013 PASSED BY THE CIT(A) IN THE MATTER OF ASSESSMENT U/S 143(3) OF THE INCOME-TAX ACT FOR ASSESSMENT YEAR 2009-10 ON THE FO LLOWING GROUNDS:- 1. IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) OUGHT TO HAVE HELD THAT THE LD. AO HAS ERRED IN LAW AND IN ADDING THE SUM OF RS.7,20,000/- U/S 41(1) OF THE INCOME-TAX ACT, 1961 AND HENCE YOUR APPELLANT MO ST HUMBLY PRAYS THAT THE ADDITION SO MADE BY THE LD. AO BE DELETED AND THE IMP UGNED ORDER OF LD. CIT(A)CONFIRMING THE IMPUGNED ADDITION BE QUASHED. 2. SUCH OTHER RELIEF(S)TO WHICH THE APPELLANT MAY BE LAWFUL LY ENTITLED TO. 2. TO ADJUDICATE ON THIS APPEAL, ONLY A FEW MATERIA L FACTS NEED TO BE TAKEN NOTE OF. THE ASSESSEE BEFORE ME IS AN INDIVIDUAL, EARNING INCOME FROM INTEREST AS ALSO REMUNERATION FROM PARTNERSHIP-FIRM. DURING THE COURSE OF SCRUTINY AS SESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTED THAT THE ASSESSEE HAS SHOWN UNSECURED LOANS FROM NUMBER OF PERSONS AND CERTAIN PARTIES WERE SHOWN AS CREDITORS. THE AMOUN T SHOWN OUTSTANDING IN THE CASE OF SMC-ITA NO.1630/AHD/2013 SABBIR HAJI SATTAR KUNDA VS. ITO ASSESSMENT YEAR: 2009-10 PAGE 2 OF 4 CENTRAL ELECTRICALS WAS RS.5,00,000/-, WHEREAS IN T HE CASE OF IBRAHIM DAWOOD SETH AN AMOUNT OF RS.2,20,000/- WAS SHOWN AS OUTSTANDING. AS THE ASSESSING OFFICER PROBED THE MATTER FURTHER, IT WAS, INTER ALIA, SUBMITTED BY THE ASSESSEE THAT DURING THE FY 1999-2000, I HAVE TAKEN A LOAN FROM CENTRAL ELECTRICALS BOARD AND IBRAHIM DAWOOD SETH AND INTEREST WAS ALSO PAID UP TO FY 2002-03 . THIS EXPLANATION OF THE ASSESSEE WAS HOWEVER BR USHED ASIDE AND THE ASSESSING OFFICER PROCEEDED TO BRING TO TAX THE AMOUNT OUTSTANDING AGAINST CENTRAL ELECTRICALS BOARD AND IBRAHIM DAWOOD SETH AT RS.5,0 0,000/- AND RS.2,20,000/- RESPECTIVELY U/S 41(1) OF THE ACT. 3. AGGRIEVED, THE ASSESSEE CARRIED THE MATTER IN AP PEAL BEFORE THE LD. CIT(A) BUT WITHOUT ANY SUCCESS. THE ASSESSEE IS NOT SATISFIED AND IS I N FURTHER APPEAL BEFORE ME. 4. I HAVE HEARD THE RIVAL CONTENTIONS, PERUSED THE MATERIAL ON RECORD AND DULY CONSIDERED THE FACTS OF THE CASE IN THE LIGHT OF TH E APPLICABLE LEGAL POSITION. I FIND THAT IT HAS BEEN THE STAND OF THE ASSESSEE THAT THE AMOUNT, WHI CH HAS BEEN BROUGHT TO TAX BY THE ASSESSING OFFICER, WAS IN FACT REPRESENTING THE LOA N RECEIVED. I HAVE NOTED THAT THE AUTHORITIES BELOW HAVE NOT EXAMINED THIS ASPECT OF THE MATTER AND YET PROCEEDED TO BRING THE AMOUNT OUTSTANDING AS INCOME U/S 41(1) OF THE A CT. IN DOING SO, THE AUTHORITIES BELOW HAVE APPARENTLY OVERLOOKED THE FACT THAT ONLY SUCH AMOUNTS CAN BE BROUGHT TO TAX U/S 41(1) WHICH HAVE BEEN ALLOWED OR DEDUCTED IN THE ASSESSME NT FOR ANY OF THE EARLIER YEARS IN THE HANDS OF THE ASSESSEE. THEREFORE, A LOAN CANNOT BE BROUGHT TO TAX U/S 41(1). HOWEVER, AS THERE IS NO CATEGORICAL FINDING ON THE NATURE OF CR EDIT, I.E. WHETHER IT IS A LOAN OR IT REPRESENTS CREDIT IN THE COURSE OF BUSINESS, I DEEM IT FIT AND PROPER TO REMIT THE MATTER BACK TO THE FILE OF THE ASSESSING OFFICER FOR A SPECIFIC FINDING ON THE NATURE OF THE CREDIT. IN THE EVENT THE SAID CREDIT REPRESENTS A LOAN, THE ADDITION U/S 41( 1) WILL STAND DELETED TO THAT EXTENT. WITH THESE DIRECTIONS, THE MATTER STANDS RESTORED TO THE FILE OF THE ASSESSING OFFICER. 5. IN THE RESULT, APPEAL IS ALLOWED FOR STATISTICAL PURPOSES IN THE TERMS INDICATED ABOVE. PRONOUNCED IN THE OPEN COURT TODAY ON 7 TH JULY, 2016 SD/- PRAMOD KUMAR (ACCOUNTAN T MEMBER) AHMEDABAD, THE 7 TH DAY OF JULY, 2016 BT* SMC-ITA NO.1630/AHD/2013 SABBIR HAJI SATTAR KUNDA VS. ITO ASSESSMENT YEAR: 2009-10 PAGE 3 OF 4 COPIES TO: (1) THE APPELLANT (2) THE RESPONDENT (3) COMMISSIONER (4) CIT(A) (5) DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER TRUE COPY ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCHES, AHMEDABAD