NITINKUMAR GANERIWALA, MUMBAI V. ITO WD 14(2)(1), MUMBAI

ITA 1741/MUM/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 0212 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 10 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-02-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2011-2012
• Appeal Filed On: 23-03-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: M C OMI NINGSHEN LD
• Assessee Lawyers: SATISH MODY LD
• Keywords: Unexplained cash credit
• Section: 143(3); 68

Judgement Text

ITA.NO.1741/MUM/2016 NITIN KUMAR GANERIWALA ASSESSMENT YEAR 2011-12 IN THE INCOME TAX APPELLATE TRIBUNAL H BENCH, MUMBAI , , BEFORE SHRI MAHAVIR SINGH, JM AND SHRI MANOJ KUMAR AGGARWAL, AM ./I.T.A. NO. 1741/MUM/2016 ( / ASSESSMENT YEAR: 2011-12) NITIN KUMAR GANERIWALA 101, DILARG BUILDING NO.2 NORTH SOUTH ROAD J.V.P.D SCHEME MUMBAI 400 0 49 / VS. INCOME TAX OFFICER WARD 14(2)(1) EARNEST HOUSE NARIMAN POINT MUMBAI ./ ./PAN/GIR NO. AABPG-1094-R ( /APPELLANT ) : ( / RESPONDENT ) ASSESSEE BY : SATISH MODY, LD. AR REVENUE BY : M.C.OMI NINGSHEN, LD. DR / DATE OF HEARING : 15/02/2018 / DATE OF PRONOUNCEMENT : 21 /02/2018 / O R D E R PER MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1. THE CAPTIONED APPEAL BY ASSESSEE FOR ASSESSMENT YEAR [AY] 2011-12 CONTEST THE ORDER OF LD. COMMISSIONER OF IN COME-TAX (APPEALS)-29 [CIT(A)], MUMBAI, APPEAL NO.CIT(A)-29/IT- 89/ITO.18(2)(4)/14-15 DATED 29/01/2016 BY RAISING THE FOLLOWING GROUNDS OF APPEAL: - ITA.NO.1741/MUM/2016 NITIN KUMAR GANERIWALA ASSESSMENT YEAR 2011-12 2 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW, LD. CIT(A) WAS ERRED IN CONFIRMING THE DISALLOWANCE OF INTEREST EXPENSES OF RS.4,02,390/- 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW, THE LEARNED CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.42,64 ,480/- AS UNEXPLAINED CASH CREDIT U/S.68 OF THE INCOME TAX ACT. THE ASSESSMENT FOR IMPUGNED AY WAS FRAMED BY LD. INCOME TAX OFFICER 14(2)(1), MUMBAI [AO] U/S 143(3) OF THE INCOME TAX ACT,1961 ON 10/03/2014 WHEREIN THE INCOME OF THE ASSESSEE WAS D ETERMINED AT RS.55,31,970/- AS AGAINST NIL RETURN FILED BY THE ASSESSEE ON 30/09/2012. THE ONLY ISSUES INVOLVED IN THE PRESENT APPEAL ARE DISALLOWANCE OF CERTAIN INTEREST EXPENSES U/S 57 AN D CERTAIN ADDITIONS U/S 68. 2.1 DURING ASSESSMENT PROCEEDINGS IT WAS NOTED THAT THE ASSESSEE OBTAINED CERTAIN LOAN FROM LIC @9% AND ADVANCED THE SAME TO VARIOUS PARTIES AGAINST INTEREST RATE RANGING FROM 12% TO 1 5%. HOWEVER, FEW LOANS WERE GRANTED WITHOUT ANY INTEREST. THE INTERE ST INCOME SO EARNED BY THE ASSESSEE AMOUNTED TO RS.12 LACS AS AGAINST I NTEREST EXPENDITURE OF RS.16.02 LACS AND THEREFORE, THE ASSESSEES CLAI M OF INTEREST EXPENDITURE WAS RESTRICTED TO THE EXTENT OF RS.12 L ACS I.E. INTEREST INCOME EARNED BY THE ASSESSEE. THE SAME RESULTED IN TO DISALLOWANCE U/S 57(III) AMOUNTING TO RS.4.02 LACS. UPON CONFIRM ATION BY LD. CIT(A), THE ASSESSEE IS IN FURTHER APPEAL BEFORE US. 2.2 THE SECOND ADDITION U/S 68 WAS MADE PURSUANT TO AIR INFORMATION IN FORM-26AS WHERE THE ASSESSEE WAS FOUND TO HAVE MADE TRANSACT ION AMOUNTING TO RS.55.02 LACS. THE ASSESSEE ATTRIBUTED THE SAME TO CASH RECEIVED FROM VARIOUS PARTIES, HOWEVER, FAILED TO P RODUCE THE SUFFICIENT DOCUMENTARY EVIDENCES TO SUBSTANTIATE THE SAME WHIC H RESULTED INTO ITA.NO.1741/MUM/2016 NITIN KUMAR GANERIWALA ASSESSMENT YEAR 2011-12 3 ADDITION THEREOF U/S 68. BEFORE LD. CIT(A), THE ASS ESSEE TABULATED THE RECEIPTS UNDER VARIOUS HEADS AS NOTED BY LD. CIT(A) ON PARA 5.2 OF THE APPELLATE ORDER. THE ASSESSEE CONTENDED THAT HE WAS DIRECTOR IN AN ENTITY NAMELY VIJAY LAXMI TEXTILES PVT. LTD AND ACQUIRED THE DEBTS OF THE SAID ENTITY AMOUNTING TO RS.39.64 LACS AND THE CASH DEPOSITED IN THE BANK REPRESENTED RECOVERY FROM THOSE DEBTORS DURING IMPUGNED AY. HOWEVER, LD. CIT(A) NOTED THAT THE SAID ENTITY DISC ONTINUED BUSINESS ACTIVITIES SINCE MARCH, 2005 AND IT OWED AN AMOUNT OF RS.116.97 LACS TO THE ASSESSEE WHEREAS ITS DEBTS STOOD AT RS.278.26 L ACS AND THE ASSESSEE TOOK OVER THE DEBTS ONLY TO THE EXTENT OF RS.39.64 LACS. THE LD. CIT(A) ALSO NOTED THAT THE ASSESSEE TOOK OVER T HE DEBTS ON 02/04/2007 AND COULD NOT RECOVER ANY AMOUNT TILL AP RIL, 2010 WHEN THE RECOVERIES SUDDENLY STARTING POURING IN THE ASSESSE ES BANK ACCOUNT. FURTHER OUT OF TOTAL STATED RECOVERIES OF RS.38.80 LACS THE MAJOR AMOUNT OF RS.23.22 LACS WERE RECOVERED ONLY DURING ONE MON TH PERIOD FROM 22/04/2010 TO 28/05/2010 AND ALL THE PAYMENTS WERE BELOW RS.20,000/- AND MOSTLY AROUND RS.19,000/-. ON THE CONTRARY, THE ASSESSEE FAILED TO ADDUCE ANY EVIDENCE TO SUPPORT ITS STAND AND ALSO C OULD NOT FILE ANY CONFIRMATION FROM ANY OF THE DEBTORS TO SUPPORT THE SAME. RESULTANTLY, LD. CIT(A), UPON FACTUAL MATRIX, CONFIRMED ADDITION S U/S 68 TO THE EXTENT OF RS.42,64,480/-. AGGRIEVED THE ASSESSEE IS IN FUR THER APPEAL BEFORE US. 3. THE LD. AUTHORISED REPRESENTATIVE [AR] PLEADED F OR ANOTHER OPPORTUNITY TO THE ASSESSEE TO SUBSTANTIATE HIS STA ND WHICH WAS OPPOSED BY LD. DR ON THE GROUND THAT THE ASSESSEES ARGUMEN T HAD NO STRENGTH SINCE THE ASSESSEE MISERABLY FAILED TO SUPPORT ITS STAND IN ANY MANNER. ITA.NO.1741/MUM/2016 NITIN KUMAR GANERIWALA ASSESSMENT YEAR 2011-12 4 4. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED RELE VANT MATERIAL ON RECORD. AFTER DUE CONSIDERATION, WE CONCUR WITH THE STAND OF LD. DR THAT THE ASSESSEE MISERABLY FAILED TO SUBSTANTIATE HIS S TAND IN ANY MANNER. WE FIND THAT THE OBSERVATIONS MADE BY LD. CIT(A) IN PARA 5.3.2 WAS QUITE PERTINENT AND JUSTIFIED SINCE THE COMPLETE ON US TO PROVE THE SOURCE OF CASH DEPOSIT WITH COGENT MATERIAL AND SUFFICIENT DOCUMENTARY EVIDENCES WAS ON THE ASSESSEE AND THE ASSESSEE FAIL ED TO DEMONSTRATE THE SAME. NOT EVEN SINGLE CONFIRMATION / VERIFICATI ON COULD BE FILED BY THE ASSESSEE. FURTHER, EVEN DURING HEARING BEFORE US, T HE LD. AR EXPRESSED INABILITY TO PRODUCE ANY DEBTORS FOR VERIFICATION T O CONFIRM THE TRANSACTION. THEREFORE, WE DO NOT FIND ANY STRENGTH IN ASSESSEE S ARGUMENT. SO FAR AS DISALLOWANCE OF INTEREST EXPENDITURE U/S 57(III) IS CONCERNED, THE SAME WAS ALSO JUSTIFIED SINCE THE INTEREST BEARING LOANS WERE UTILIZED TO ADVANCES INTEREST FREE LOANS AND THEREFORE, THE EXC ESS EXPENDITURE COULD NOT BE ALLOWED TO THE ASSESSEE. HENCE, ON FACTUAL M ATRIX, WE FIND NO REASON TO INTERFERE WITH THE STAND OF LD. CIT(A). 5. RESULTANTLY, THE APPEAL FILED BY THE ASSESSEE ST ANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 21 ST FEBRUARY, 2018 SD/- SD/- (MAHAVIR SINGH) ( MANOJ KUMAR AGGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 21. 02.2018 SR.PS:- THIRUMALESH ITA.NO.1741/MUM/2016 NITIN KUMAR GANERIWALA ASSESSMENT YEAR 2011-12 5 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. ' ( ) / THE CIT(A) 4. ' / CIT CONCERNED 5. '* , * , / DR, ITAT, MUMBAI 6. +, / GUARD FILE / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI