Spherehot Water Heaters Pvt.Ltd., Ahmedabad V. Thr ACIT., Circle-8, Ahmedabad

ITA 1690/AHD/2004

• Counselvise Citation: [2009] 115 COUNSELVISE.COM (IT) 0342 (ITAT-AHMEDABAD)
• Duration Of Justice: 5 year(s) 4 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-10-2009
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 11-09-2009
• Assessment Year: 1997-1998
• Appeal Filed On: 20-05-2004
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GOVIND SINGHAL
• Keywords: Opportunity of being heard; Set aside

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH A BEFORE SHRI T.K.SHARMA, JUDICIAL MEMBER AND SHRI D.C.AGRAWAL, ACCOUNTANT MEMBER DATE OF HEARING : 11/09/09 DRAFTED ON: 25 /09/09 ITA NO.1690/AHD/2004 ASSESSMENT YEAR : 1997-98 SPEREHOT WATER HEATERS PVT.LTD. C/O. KAMLESH BHATT, C.A. 302, ANANDMANGAL-III NR.CORE HOUSE PARIMAL CROSSING AMBAWADI AHMEDBAD VS. THE ACIT CIRCLE-8 AHMEDABAD PAN/GIR NO. : AAACJ 4984 H (APPELLANT) .. (RESPONDENT) APPELLANT BY : SHRI KAMLESH BHATT, A.R. RESPONDENT BY: SHRI GOVIND SINGHAL, SR.DR O R D E R PER D.C.AGRAWAL , ACCOUNTANT MEMBER :- THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF THE LEARNED CIT(APPEALS)-XIV, AHMEDABAD DATED 19/02/20 04 PASSED FOR ASSESSMENT YEAR 1997-98, WHEREIN THE L EARNED CIT(APPEALS) HAS CONFIRMED AN ADDITION OF RS.5,18,6 18/- BEING UNSECURED LOANS NOT PROVED TO THE SATISFACTION OF A SSESSING OFFICER. 2. THE APPEAL FILED BY THE ASSESSEE BEFORE THE TRIB UNAL IS LATE BY 25 DAYS. ITA NO.1690/AHD /2004 SPHEREHOT WATER HEATERS PVT.LTD. VS. ACIT ASST.YEAR - 1997-98 - 2 - 3. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTICED FOLLOWING LOANS:- SR. NO(S) NAME OF THE PARTY AS PER LIST AS PER CONFIRMATION DIFF. 1. NITA M.BHOGILAL 13,22,792 2,29,534 10,93,258 2. VINODKUMAR GUPTA 15,81,937 - 15,81,937 3. M.P.VAHADUR 2,64,842 - 2,64,842 4. NITA NAVNITLAL 7,51,394 - 7,51,394 5. N.M. BHOGILAL 3,90,557 - 3,90,557 TOTAL 40,81,988 4. IT WAS EXPLAINED BY THE ASSESSEE THAT THE ASSESS EE-COMPANY IS OWNED AND CONTROLLED BY THE FAMILY CONSISTING OF S HRI B.K.DOSHI (FATHER) AND FOUR SONS; NAMELY, KETAN DOSHI, ANIL D OSHI, KIRAN DOSHI AND KEYUR DOSHI. SHRI B.K.DOSHI IS FATHER AGED ABO UT 78 YEARS. IN THE MONTH OF OCTOBER-2002, THE ELDEST SON SHRI PRADIP D OSHI WHO WAS MBA (MARKETING) AND HAD AN EXPERIENCE OF 21 YEARS DIED OF BLOOD CANCER AND THEREAFTER THE BUSINESS AS WELL AS FINANCIAL POSITI ON OF THE COMPANY FELL DOWN FROM RS.3000 LACS OF TURNOVER TO RS.400 LACS O F TURNOVER IN THE YEAR 2003-04. THUS, DUE TO THE DEATH OF THE ELDE R SON, COMPANY FACED SERIOUS PROBLEMS, SHRI B.K.DOSHI (FATHER) WAS SERI OUSLY ILL, THEREFORE, THE FAMILY REMAINED EXTREMELY DISTURBED AND PRE-OCC UPIED WITH THE ITA NO.1690/AHD /2004 SPHEREHOT WATER HEATERS PVT.LTD. VS. ACIT ASST.YEAR - 1997-98 - 3 - HEALTH AND TREATMENT OF SHRI B.K.DOSHI WHICH RESULT ED IN DELAY IN PURSUING THE APPEAL. 5. AFTER HEARING THE PARTIES, WE CONDONE THE DELAY AND ADMIT THE APPEAL FOR DECIDING ON MERITS. 6. THE ASSESSEE RAISED THE FOLLOWING GROUNDS IN ITS APPEAL:- 1. (A) IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. A.O. HAS ERRED IN MAKING THE ADDITION AND LD. CIT(A ) ERRED IN CONFIRMING THE SAME TO THE EXTENT OF RS.5,18,618/- OUT OF UNSECURED LOANS AND HENCE YOUR PETITIONER PRAYS THAT THE SAME BE DELETED. 2. YOUR APPELLANT PRAYS THAT SUCH OTHER RELIEFS A ND REBATES AS MAY BE ADMISSIBLE TO IT UNDER THE THEN EXISTING PROVISI ONS OF LAW BE ALLOWED. 3. YOUR APPELLANT CHALLENGES LEVY OF INTERESTS, AD DITIONS AND OTHER DISALLOWANCES AND PRAYS THAT THE RETURN OF INCOME F ILED BY IT BE ACCEPTED. YOUR PETITIONER CRAVES LEAVE TO ADD TO, ALTER AMPLI FY, MODIFY AND/OR TO SUBSTITUTE ANY OR ALL OF THE ABOVE GROUNDS OF AP PEAL. 7. IN THIS CASE, ASSESSMENT ORDER U/S.143(3) OF THE I.T. ACT, 1961 WAS PASSED ON A TOTAL INCOME OF RS.1,09,22,050/-, WHERE IN ADDITION OF RS.97,00,123/- WAS MADE TO THE RETURNED INCOME. O NE OF THE ADDITIONS MADE WAS OF RS.74,39,745/- ON ACCOUNT OF UNSECURED LOANS. THE LEARNED ITA NO.1690/AHD /2004 SPHEREHOT WATER HEATERS PVT.LTD. VS. ACIT ASST.YEAR - 1997-98 - 4 - CIT(APPEALS) ALLOWED PARTIAL RELIEF BUT SET ASIDE O N THE ISSUE OF ADDITION OF RS.74,398,745/- MADE ON ACCOUNT OF UNSECURED LOA NS WITH THE DIRECTIONS TO GIVE AN OPPORTUNITY OF BEING HEARD TO THE ASSESSEE TO FILE THE DETAILS AND TO EXAMINE THE EVIDENCE SO SUBMITTED. ACCORDINGLY, THE ASSESSING OFFICER RE-EXAMINED THE ISSUE. THE ASSES SEE SUBMITTED CERTAIN CONFIRMATIONS ON THE BASIS OF WHICH THE ASSESSING OFFICER ACCEPTED LOANS AS GENUINE TO THE EXTENT OF RS.33,49,657/- AND, ACC ORDINGLY RETAINED AN ADDITION OF RS.40,81,988/- BEING THE LOANS NOT EXPL AINED. 8. IN APPEAL, LEARNED CIT(APPEALS) FOUND, ON THE BA SIS OF CONFIRMATION FURNISHED BEFORE HIM, THAT LOAN AMOUNT ING TO RS.10,93,258/- FROM NITA M.BHOGILAL STOOD EXPLAINED. IN RESPECT OF VINODKUMAR GUPTA, THE LEARNED CIT(APPEALS) NOTED THAT THE CRED ITOR SUBMITTED CONFIRMATION TO THE EXTENT OF RS.14,53,876/- AS AGA INST LOAN AMOUNT OF RS.15,81,937/-. THUS, A SUM OF RS.1,28,061/- REMAI NED UNEXPLAINED. IN RESPECT OF M.P.VAHADUR, ENTIRE LOAN AMOUNT OF RS.2 ,64,842/- STOOD EXPLAINED. SMT. NITA NAVNITLAL ALSO EXPLAINED HE R LOAN. HOWEVER, THE LOAN IN THE NAME OF N.M.BHOGILAL FOR A SUM OF RS.3, 90,557/- COULD NOT BE EXPLAINED BECAUSE CONFIRMATION WAS FILED BY KARTHA OF N.M.BHOGILAL HUF AND, THUS, CONFIRMATION WAS DIRECTLY NOT FILED BY THE CREDITOR. ITA NO.1690/AHD /2004 SPHEREHOT WATER HEATERS PVT.LTD. VS. ACIT ASST.YEAR - 1997-98 - 5 - ACCORDINGLY, LEARNED CIT(APPEALS) SUSTAINED AN ADDI TION OF RS.5,18,618/- (RS.1,28,061/- IN NAME OF VINODKUMAR GUPTA PLUS RS.3,90,557/- IN THE NAME OF SHRI N.M.BHOGILAL). 9. AGAINST, THIS, LEARNED AUTHORISED REPRESENTATIVE OF THE ASSESSEE SUBMITTED THAT ON RECONCILIATION, IT WAS FOUND T HAT INTEREST PAID WAS NOT TAKEN INTO ACCOUNT BY SHRI VINODKUMAR GUPTA IN HIS BOOKS. IT HAS RESULTED INTO THE IMPUGNED DIFFERENCE. IN THE CAS E OF SHRI N.M.BHOGILAL, THE LOAN WAS GIVEN BY KARTA OUT OF HUF FUNDS AND, T HEREFORE, CONFIRMATIONS HAS BEEN FILED BY THE KARTA HIMSELF. THEREFORE, THERE IS NO DISCREPANCY. THE LEARNED CIT(APPEALS) HAS NOT APP RECIATED THE CORRECT FACTS. 10. AGAINST THIS, LD.DR RELIED ON THE ORDERS OF THE AUTHORITIES BELOW. 11. AFTER CONSIDERING THE RIVAL SUBMISSIONS, WE ARE OF THE OPINION THAT THE ASSESSEE DESERVES TO SUCCEED. AS REGARDS A SUM OF RS.1,28,061/- BEING DIFFERENCE ARISING IN THE ACCOUNT OF SHRI VIN ODKUMAR GUPTA, THE LEARNED AUTHORISED REPRESENTATIVE OF THE ASSESSEE EXPLAINED THAT THIS IS ON ACCOUNT OF INTEREST, THOUGH CREDITED BY THE AS SESSEE BUT NOT TAKEN INTO ACCOUNT BY THE CREDITOR. REGARDING LOAN IN TH E NAME OF ITA NO.1690/AHD /2004 SPHEREHOT WATER HEATERS PVT.LTD. VS. ACIT ASST.YEAR - 1997-98 - 6 - N.M.BHOGILAL, WE FIND THAT LEARNED CIT(APPEALS) HAS NOT APPRECIATED THE FACTS. THE LOAN HAS BEEN GIVEN BY THE HUF AND , THEREFORE, CONFIRMATION HAS BEEN FILED BY THE KARTA OF HUF. S INCE LEARNED CIT(APPEALS) HAS ACCEPTED THE LOAN ON THE BASIS OF CONFIRMATIONS FILED BY OTHER CREDITORS, THERE IS NO REASON WHY THIS LO AN SHOULD NOT BE ACCEPTED ON THE BASIS OF CONFIRMATION FILED BY THE KARTA. ACCORDINGLY, ASSESSEE HAS SATISFACTORILY EXPLAINED THE LOANS. T HEREFORE, NO ADDITION IS CALLED FOR. 12. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. ORDER SIGNED, DATED AND PRONOUNCED IN THE COURT ON 09/10/2009. SD/- SD/- ( T.K.SHARMA ) ( D.C.AGRAWAL ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD; DATED 09/10/2009 T.C. NAIR COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT. 2. THE RESPONDENT 3. THE CIT CONCERNED. 4. THE LD. CIT(APPEALS)-XIV, AHMEDABAD 5. THE DR, AHMEDABAD BENCH.6. THE GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT.REGISTRAR), ITAT, AHMEDABAD