Shri Jayantilal M. Vadodaria, PORBANDAR V. The Income Tax Officer, Ward-4(4), RAJKOT-GUJARAT

ITA 174/RJT/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 76378 (ITAT-RAJKOT)
• Duration Of Justice: 8 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-01-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 09-01-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 01-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: J B JHAVERI D R
• Assessee Lawyers: DR ADHIA
• Section: 68; 133(6)

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBULAL; RAJKOT BENCH, RAJKOT. BEFORE SHRI T. K. SHARMA JM AND SHRI B. R. JAIN AM ITA NO. 174/RJT/2013 / ASSESSMENT YEAR 2008-09. JAYANTILAL M. VADODARIYA, C/O- DENA BANK, ADITANA BRANCH, TAL. RANAVAR, DISTRICT- PORBANDAR. PAN : AAWPV1752E ( / APPELLANT V/S THE I.T.O., WARD- 4(4), RAKJOT. / RESPONDENT ! ' #$ / ASSESSEE BY SHRI D.R. ADHIA, C.A. % ! ' #$ / REVENUE BY SHRI J.B. JHAVERI, D.R. # & ' ! ( / DATE OF HEARING 09/01/2014 ) ! ( / DATE OF PRONOUNCEMENT 10/01/2014 / ORDER PER B. R. JAIN, A. M. : THIS APPEAL BY THE ASSESSEE AGAINST THE ORDER DATE D 22/03/2013 OF DR. K. SHRINIVAS REDDY, LEARNED CIT(A)-III, RAJKOT. IN VARIOUS GROUNDS, CHALLENGES THE SUSTENANCE OF RS. 15 LACS. 2. BRIEFLY THE FACTS ARE THAT THE ASSESSEE FILED RE TURN DECLARING INCOME RS. 2,85,460/-. DURING THE COURSE OF ASSESSMENT PRO CEEDINGS, THE ASSESSING OFFICER REQUISITIONED BANK STATEMENT OF D ENA BANK, MENDARADA BRANCH, DISTRICT- JUNAGARH AND A NOTICE U/S 133(6) OF THE I.T. ACT, 1961 (IN SHORT THE ACT), WAS ALSO ISSUED TO THE BANK MANAGER . ON VERIFICATION, IT WAS FOUND THAT THE ASSESSEE HAS MADE TWO DEPOSITS OF RS . 7,00,000/- AND RS. 8,00,000/- IN THE SAID BANK ACCOUNT ON 16/1/2008. H E WAS, THEREFORE, REQUIRED TO EXPLAIN THE SOURCE OF INVESTMENT AND CR EDITWORTHINESS OF THE ABOVE TRANSACTIONS. IN RESPONSE THE ASSESSEE STATED THAT HE HAS DEPOSITED THE AMOUNTS FOR BALANCE PURPOSES ONLY. THIS REPLY, HOWEVER, WAS NOT ITA 174/RJT/2013 2 FOUND SATISFACTORY AND ACCORDINGLY, THE ADDITION U/ S 68 OF THE ACT HAS BEEN MADE. 3. BEFORE LD. CIT(A), THE ASSESSEE FILED THE AFFIDA VITS OF TWO PERSONS NAMELY SMT. MADHUBEN D. GAJERA AND SHRI JEMIT RAMES HBHAI GAJERA AND CLAIMED THAT THE SAID AMOUNT WAS RECEIVED AS AN ADV ANCE FOR SALE OF HIS PROPERTY. IT WAS FURTHER CONTENDED THAT THE ASSESSE E HAD AGREED TO SELL THE JOINT PROPERTY WITHOUT CONSENT OF OTHER CO-OWNER. H E RETURNED THE AMOUNT TO THESE PERSONS ON THE NEXT DATE AS THE TRANSACTIO NS DID NOT MATERIALIZE. THE LD. CIT(A) IN ORDER TO VERIFY THE GENUINENESS OF THE CLAIM, REMANDED THE MATTER TO THE A.O. TO CARRY OUT ENQUIRIES THERE ON WITH REFERENCE TO THE SPECIFIC POINTS. THE REMAND REPORT RECEIVED AFTER E NQUIRIES WAS NOT ACCEPTED AS IT WAS NOT VERIFIABLE AS TO WHETHER THE AMOUNT RECEIVED FROM TWO OF HIS RELATIVES IN QUESTION WERE ON ACCOUNT OF SALE OF THE AGRICULTURAL PROPERTY IN CASH AND THUS, HE CONFIRMED THE ADDITIO N. 4. THE ASSESSEES COUNSEL CONTENDS THAT THE A.O. H AS EXAMINED BOTH THESE PERSONS, WHO HAVE ADMITTED OF MAKING ADVANCES FOR PURCHASE OF ASSESSEES RESIDENTIAL HOUSE HELD IN JOINT NAME. TH EY HAVE ALSO ACCEPTED OF MAKING PAYMENT AND RETURN THEREOF ON THE VERY NE XT DATE. THE ASSESSEE REFUSED TO HONOUR THE AGREEMENT FOR THE REASON THAT THE OTHER CO-OWNER, HAS NOT AGREED TO THE TRANSACTION. THE A.O. ALSO HA S GIVEN HIS CONCLUSIVE FINDING THAT THE CLAIM OF THE ASSESSEE IS NEAR TO T HE TRUTH. THE LD. CIT(A), THEREFORE, HAS DISBELIEVED THE APPELLANT WITHOUT MA KING ANY FURTHER ENQUIRY IN THE MATTER OR WITHOUT BRINGING ANY ADVERSE MATER IAL ON RECORD. THE ADDITION SO SUSTAINED IS THEREFORE, REQUIRED TO BE DELETED. 5. ON THE OTHER HAND, THE LD. D.R. PLACED STRONG RE LIANCE ON THE FINDINGS AND CONCLUSIONS REACHED BY THE LD. CIT(A). SINCE THE ASSESSEE ITA 174/RJT/2013 3 FAILED TO EXPLAIN THE CREDITWORTHINESS AND GENUINEN ESS OF THE TRANSACTIONS AND DOCUMENTS LAID IN THE SHAPE OF AFFIDAVITS FROM THE CREDITORS WERE SELF SERVING, THE ADDITION U/S 68 OF THE ACT IS JUSTIFIE D. 6. IN REJOINDER, THE ASSESSEES COUNSEL STATES THAT THE ASSESSEE DOES NOT MAINTAIN BOOKS OF ACCOUNT. ON LEGAL PRINCIPLE A LSO, SECTION 68 OF THE ACT SHALL NOT APPLY AND ADDITION BY US IS UNCALLED FOR AND CONTRARY TO LAW BESIDES BEING FACTUALLY WRONG. 7. WE HAVE HEARD PARTIES WITH REFERENCE TO MATERIAL ON RECORD AND HAVE ALSO PERUSED THE COPY OF AGREEMENT DATED 05/2/2007, THE AFFIDAVIT OF SMT. MADHUBEN DINESHBHAI GAJERA AND SHRI JEMIN RAMNIKBHA I GAJERA AND THE REMAND REPORT LAID ON RECORD. THE A.O. HAD CARRIED OUT DISCREET ENQUIRIES AND HAVE EXAMINED BOTH THESE PERSONS. THEY HAVE ADM ITTED OF MAKING ADVANCE TO THE APPELLANT FOR PURCHASE OF RESIDENTIA L HOUSE SITUATED AT UPLETA, FOR WHICH ADVANCE OF RS. 7.00 LACS AND RS. 8.00 LACS RESPECTIVELY WAS ADMITTED, HAVE BEEN GIVEN TO THE ASSESSEE. SINC E THE TRANSACTION DID NOT MATERIALIZE, THE SAME WAS CLAIMED TO HAVE BEEN CANCELLED AND MONEY RECEIVED BY THE APPELLANT STOOD RETURNED ON THE NEX T VERY DATE. THE REMAND REPORT DATED 04/3/2013 AND 18/09/2012 CLEARL Y REVEALS THAT THE TRANSACTIONS OF PAYMENT AND REFUND WITH MADHUBEN DI NESHBHAI GAJERA AND SHRI JEMIN RAMNIKBHAI GAJERA IS VERY CLOSE TO T HE TRUTH. HE HAS THUS, VIRTUALLY ACCEPTED THE CLAIM OF THE APPELLANT TO BE BONAFIDE AND GENUINE. THE LD. CIT(A) DID NOT EMBARK ANY ENQUIRY BY HIS CO TERMINOUS POWER BUT DREW ADVERSE INFERENCE WITHOUT BRINGING ANY RELIABL E MATERIAL OR EVIDENCE ON RECORD. EVEN OTHERWISE, ADVANCE MONEY RECEIVED D ID NOT CONSTITUTE INCOME OF THE ASSESSEE, MORE PARTICULARLY, WHEN THE TRANSACTION OF SALE OF PROPERTY IS NOT SHOWN TO HAVE BEEN CONCLUDED AND AM OUNT STOOD RETURNED TO BOTH THE PERSONS FROM WHOM IT WAS SHOWN TO HAVE BEEN RECEIVED. WE, ITA 174/RJT/2013 4 THEREFORE, DO NOT FIND ANY JUSTIFICATION IN SUSTENA NCE OF ADDITION. THE SAME IS THEREFORE, DIRECTED TO BE DELETED. THE GROUNDS R AISED IN APPEAL STAND ALLOWED. 8. IN THE RESULT, APPEAL BY ASSESSEE STANDS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 10/01/2014. SD/- SD/- ( T. K. SHARMA ) ( B. R. JAI N ) #*% /JUDICIAL MEMBER $( #*% / ACCOUNTANT MEMBER *$+ ,*-/ ORDER DATE 10/01/2014 /RAJKOT *RANJAN / COPY OF ORDER FORWARDED TO:- 1. /APPELLANT- JAYANTILAL M. VADODARIYA, PORBANDER. . 2. /RESPONDENT- THE I.T.O., WARD-4(4), RAKJOT. 3. #-2- & 3 / CIT-I, RAJKOT. 4. & 3 - / CIT (A)-III, RAJKOT. 5. 789 , , / DR, ITAT, RAJKOT 6. 9; <= / GUARD FILE. *$+ #$ / BY ORDER , TRUE COPY PRIVATE SECRETARY, , INCOME TAX APPELLATE TRIBUNAL, RAJKOT.