Shri Mavjibhai Becharbhai Patel, Mehsana V. The Income tax Officer,Ward-3, Mehsana

ITA 1787/AHD/2012

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 9711 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 4 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-12-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 09-12-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 13-08-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Salary income; Additional evidence
• Section: 143(3); 133(6); 68

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD BEFORE SHRI PRAMOD KUMAR, ACCOUNTANT MEMBER AND SHRI S.S. GODARA, JUDICIAL MEMBER ./ ITA NO. 1787/AHD/2012 / A.Y. 2008-09 MAVJIBHAI BECHARBHAI PATEL, 5, AMIKUNJ SOCIETY, HIGHWAY ROAD, KALOL, DIST: MEHSANA PAN: AAVPP 8873 H VS INCOME TAX OFFICER, WARD -3, MEHSANA ./ ITA NO. 2015/AHD/2012 / A.Y. 2008-09 INCOME TAX OFFICER, WARD -3, MEHSANA VS MAVJIBHAI BECHARBHAI PATEL, 5, AMIKUNJ SOCIETY, HIGHWAY ROAD, KALOL, DIST: MEHSANA PAN: AAVPP 8873 H ! / (APPELLANT) '# ! / (RESPONDENT) BY ASSESSEE : SHRI PRITESH SHAH, AR BY REVENUE : SHRI JAMES KURIAN, SR DR / DATE OF HEARING : 09/12/2016 /DATE OF PRONOUNCEMENT: 22/12/2016 / O R D E R PER S.S. GODARA, JUDICIAL MEMBER THE ASSESSEE AND REVENUE INSTITUTE THE INSTANT CROS S APPEALS FOR ASSESSMENT YEAR 2008-09 AGAINST CIT(A), GANDHINAGAR S ORDER DATED 06.06.2012, PASSED IN CASE NO.CIT(A)/GNR/173/2010-1 1, IN PROCEEDINGS U/S 143(3) OF THE INCOME-TAX ACT, 1961 (IN SHORT THE ACT). ITA NOS. 1787 & 2015/AHD/2013 ASSESSEE - SHRI MAVJIBHAI BECHARBHAI PATEL A.Y. 2008-09 - 2 - 2. WE COME TO RIVAL PLEADINGS. THE ASSESSEES SOLE SUBSTANTIVE GROUND CHALLENGES CORRECTNESS OF BOTH THE LOWER AUT HORITIES ACTION MAKING SECTION 68 UNEXPLAINED CASH CREDIT ADDITION OF RS.25,77,000/-. THE ASSESSEES FURTHER PLEA IS THAT THE CIT(A) PART ICULARLY ERRED IN NOT ADMITTING ADDITIONAL EVIDENCE UNDER RULE 46A OF THE INCOME-TAX RULES. THE REVENUES SOLITARY GROUND ON THE OTHER H AND SEEKS TO REVIVE SECTION 68 UNEXPLAINED/UNSECURED LOAN ADDITI ON OF RS.10,00,000/- RECEIVED FROM SHRI RAKESH G. PATEL; AS ADDED BY THE ASSESSING OFFICER IN COURSE OF THE IMPUGNED REGULAR ASSESSMENT. 3. LEARNED COUNSEL REPRESENTING ASSESSEE INVITES OU R ATTENTION TO REVENUES SOLE SUBSTANTIVE GROUND INVOLVING ADDITIO N AMOUNTING TO RS.10,00,000/-. HE THUS SUBMITS THAT THE NET TAX E FFECT INVOLVED IN REVENUES CROSS APPEAL IS LESS THAN RS.10,00,000/- AS STIPULATED IN CBDT CIRCULAR NO.21 OF 2015 DATED 10.12.2015 APPLIC ABLE ON PENDING CASES AS WELL. LEARNED DEPARTMENTAL REPRESENTATIV E DOES NOT DISPUTE THIS FACTUAL POSITION. WE THUS DISMISS THE REVENUES APPEAL ITA NO.2015/AHD/2012 SINCE INVOLVING LESSER TAX EFF ECT THAN PRESCRIBED. 4. THIS LEAVES US WITH ASSESSEES APPEAL ITA NO.178 7/AHD/2012. LEARNED COUNSEL SUBMITS THAT HIS MAIN GRIEVANCE IS CONFINED TO LATTER COMPONENT OF HIS PLEADINGS THAT THE CIT(A) HAS ERRE D IN NOT ADMITTING ASSESSEES ADDITIONAL EVIDENCE THEREBY CO NFIRMING SECTION 68 ADDITION OF RS.25.77 LAKHS. 5. WE COME TO RELEVANT FACTS NOW. THE ASSESSEE/IND IVIDUAL DERIVES SALARY INCOME. HE FILED HIS RETURN ON 26.0 2.2009 STATING ITA NOS. 1787 & 2015/AHD/2013 ASSESSEE - SHRI MAVJIBHAI BECHARBHAI PATEL A.Y. 2008-09 - 3 - INCOME OF RS.1,23,410/-. THE ASSESSING OFFICER TOO K UP SCRUTINY. HE NOTICED THE ASSESSEE TO HAVE OBTAINED UNSECURED LOA N FROM SMT. PADMABEN, GITABEN AND SHRI KAUSHIKBHAI OF RS.98,000 /- EACH, TOTALING TO RS.2,94,000/-, SIMILAR UNSECURED LOANS FROM 14 OTHER PERSONS AGGREGATING TO RS.12.83 LAKHS AND FROM M/S. KAISER MILLS OF RS.10 LAKHS; RESPECTIVELY. THE ASSESSING OFFICER THEREAFTER FRAMED A REGULAR ASSESSMENT ON 24.12.2010 QUA THE ABOVE THRE E CATEGORIES OF UNSECURED LOANS. HE OBSERVED QUA FIRST THREE PARTI ES THAT THEY HAD NOT RESPONDED TO SECTION 133(6) NOTICES SO AS TO PR OVE IDENTITY AND GENUINENESS OF THE LOAN AMOUNTS FOLLOWED BY EVIDENC E OF THEIR AGRICULTURAL LAND HOLDINGS. THE ASSESSING OFFICER THEREAFTER TREATED THE SECOND HEAD OF UNSECURED LOANS TO BE NEITHER GE NUINE NOR CREDITWORTHY FOR THE REASON THAT ONLY SIX PARTIES O UT OF FOURTEEN HAD RESPONDED TO HIS NOTICES. HE THEN PROCEEDED TO ADO PT THE VERY COURSE OF ACTION QUA THIRD UNSECURED LOAN OF RS.10 LAKHS OBTAINED FROM M/S. KAISER MILLS BY OBSERVING THAT THE ASSESS EE HAD HIMSELF DEPOSITED HIS UNACCOUNTED MONEY IN HDFC BANK THEREB Y DIVERTING AMOUNT RECEIVED AS TO HAVE BEEN OBTAINED FROM THE S AID PARTY. THE ASSESSING OFFICER ACCORDINGLY MADE CONSEQUENTIAL AD DITION IN ASSESSEES INCOME. 6. WE NOW COME TO ASSESSEES APPEAL PREFERRED BEFOR E THE LOWER AUTHORITIES. HE FILED A PETITION WITH ADDITIONAL E VIDENCE ON 12.12.2011. COPY THEREOF IS AT PAGE 134 OF THE PAP ER-BOOK. THE ASSESSEE WOULD ENCLOSE ITS CREDITORS VOTER IDS, PA N DETAILS AND BANK STATEMENTS. HE PLEADED THAT THE ASSESSING OFFICER HAD ASKED HIM TO PRODUCE ALL EVIDENCES VIDE SCRUTINY NOTICE DATED 03 .12.2010 WHICH ITA NOS. 1787 & 2015/AHD/2013 ASSESSEE - SHRI MAVJIBHAI BECHARBHAI PATEL A.Y. 2008-09 - 4 - WAS RECEIVED ON 14.12.2010 JUST BEFORE TWO DAYS OF THE LAST HEARING BEING CONDUCTED ON 16.12.2010. THE CIT(A) ADMITTED THE ABOVE ADDITIONAL EVIDENCE AS REVEALED FROM PAGE 8 OF LOWE R APPELLATE ORDER. HE SOUGHT A REMAND REPORT. THE ASSESSING OFFICER T HIS TIME SUCCEEDED IN SERVING NOTICES TO SOME OF THE PARTIES . HE SUBMITTED HIS REMAND REPORT THAT HE HAD NOT BEEN ABLE TO VERIFY A SSESSEES ADDITIONAL EVIDENCE. THE ASSESSEE AGAIN FILED ADDIT IONAL SUBMISSIONS. THE CIT(A) REJECTS THE SAME AT PAGE 20 PARA 5.34 OF THE LOWER APPELLATE ORDER SO AS TO CONFIRM THE IMPUGNED SECTI ON 68 ADDITION ON MERITS. THIS LEAVES THE ASSESSEE AGGRIEVED. 7. WE HAVE HEARD BOTH THE PARTIES. CASE FILE PERUS ED. RELEVANT FACTS NARRATED IN PRECEDING PARAGRAPHS ARE NOT REPE ATED IN ORDER TO AVOID REPETITION. SUFFICE TO SAY, IT IS EVIDENT TH AT NEITHER THE ASSESSING OFFICER AND THE CIT(A) NOR THE ASSESSEE H AVE PERFORMED THEIR RESPECTIVE DUTIES IN THE LOWER PROCEEDINGS. WE START WITH ASSESSING OFFICER. THE CASE FILE HAS ALREADY INDIC ATED THAT SIX OUT OF FOURTEEN CREDITORS HAD RESPONDED TO HIS NOTICES ISS UED U/S 133(6) OF THE ACT. IT IS HOWEVER NOT CLEAR FROM THE ASSESSMEN T ORDER AS TO HOW THE SAME WERE DEALT WITH. WE COME TO LOWER APPELLA TE PROCEEDINGS AND NOTICE THAT THE CIT(A) FIRST OF ALL ADMITTED TH E ADDITIONAL EVIDENCE AND THEREAFTER REJECTED ASSESSEES IDENTIC AL SUBMISSION GIVING DETAILS OF HIS CREDITORS. WE FURTHER FIND T HAT THE ASSESSEE HAS ALSO NOT FULLY CO-OPERATED WITH THE LOWER AUTHORITI ES APART FROM FILING THE ABOVE DETAILS OF HIS CREDITORS. WE DEEM IT AP PROPRIATE IN THESE PECULIAR FACTS THAT THE LEARNED CIT(A) NEEDS TO RE- ADJUDICATE THE ENTIRE ISSUE AS PER LAW AFTER AFFORDING THREE EFFEC TIVE OPPORTUNITIES TO ITA NOS. 1787 & 2015/AHD/2013 ASSESSEE - SHRI MAVJIBHAI BECHARBHAI PATEL A.Y. 2008-09 - 5 - THE ASSESSEE. WE THUS REMIT BOTH ISSUES RAISED IN ASSESSEES APPEAL ITA NO.1787/AHD/2012 BACK TO THE CIT(A) FOR AFRESH ADJUDICATION. THIS APPEAL IS ACCEPTED FOR STATISTICAL PURPOSES. 8. THE ASSESSEES APPEAL ITA NO.1787/AHD/2012 IS AL LOWED FOR STATISTICAL PURPOSES. REVENUES CROSS APPEAL ITA N O.2015/AHD/2012 IS DISMISSED. ORDER PRONOUNCED IN THE COURT ON 22 ND DECEMBER , 2016 AT AHMEDABAD SD/- SD/- (PRAMOD KUMAR) (S .S. GODARA) ACCOUNTANT MEMBER JU DICIAL MEMBER AHMEDABAD, DATED 22/12/2016 *BT & '() *) / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ' $ / CONCERNED CIT 4. $ ( ) / THE CIT(A) 5. ' **' , ' , / DR, ITAT, AHMEDABAD 6. / / GUARD FILE. TRUE COPY / BY ORDER, TRUE COPY / (DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD