SHRI SHIV SHANKER PRAHLADKA, SURAT V. DCIT CIR-3 , RANCHI

ITA 179/RAN/2018

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 1196 (ITAT-RANCHI)
• Duration Of Justice: 1 year(s) 6 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-12-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2014-2015
• Appeal Filed On: 06-06-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NISHA SINGH MARR
• Keywords: Set aside
• Section: 143(3); 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RANCHI BENCH, RANCHI BEFORE SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER& MS. MADHUMITA ROY, JUDICIAL MEMBER I.T.A. NO. 179/RAN/2018 (ASSESSMENT YEAR: 2014-15) SHRI SHIV SHANKER PRAHLADKA WING-B, SAI KHATI HOUSE, BEHIND RATI PALACE, RING ROAD, SURAT, GUJARAT-395002 VS. DCIT CIRCLE-3, RANCHI [PAN NO. ADX PP3 282 H] ( APPELLANT ) .. ( RESPONDENT ) APPELLANT BY : SHRI DEVESH PODDAR, ADV. RESPONDENT BY : SHRI NISHA SINGHMARR, JCIT (D.R.) DATE OF HEARING 06.11.2019 DATE OF PRONOUNCEMENT 18 .1 2 . 2019 O R D E R PER MS. MADHUMITA ROY - JM: THE INSTANT APPEAL AT THE BEHEST OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 28.03.2018 PASSED BY THE LD. CIT(APPEAL S), RANCHI, JHARKHAND ARISING OUT OF THE ORDER DATED 08.12.2016 PASSED BY THE DCIT CIRCLE-III, RANCHI UNDER SECTION 143(3) OF THE INCOME TAX ACT ( HEREINAFTER REFERRED AS TO THE ACT) FOR A.Y. 2014-15. 2. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF MANUF ACTURING OF TEXTILE FILED ITS RETURN OF INCOME ON 05.11.2014 DISCLOSING TOTAL INCOME AT RS. 8,63,790/- FOR THE A.Y. 2014-15. THE ASSESSMENT WAS FINALLY COMPL ETED UPON MAKING CERTAIN ADDITION INCLUDING ADDITION OF RS. 68,80,000/- UNDE R SECTION 68 OF THE ACT ON THE GROUND THAT THE ASSESSEE HAS FAILED TO ESTABLIS H AND VERIFY THE SOURCE, ITA NO.179/RAN/2018 SHRI SHIV SHANKER PRAHLADKA VS. DCIT ASST.YEAR 2014-15 - 2 - NATURE, GENUINENESS AND CREDITWORTHINESS OF THE PAR TIES FROM WHOM UNSECURED LOAN HAS BEEN CLAIMED TO HAVE BEEN OBTAINED. IN AP PEAL THE SAME WAS FURTHER CONFIRMED BY THE LD. CIT(A). HENCE, THE INSTANT AP PEAL BEFORE US. 3. AT THE TIME OF THE HEARING OF THE APPEAL THE LD. AR SUBMITTED BEFORE US THAT THE DOCUMENTS RELATING OF THE UNSECURED LOAN T AKEN BY THE ASSESSEE FROM THE PARTIES WERE DULY SUBMITTED BEFORE THE LD. AO I NCLUDING THE COPY OF THE COMPUTATION OF INCOME, BALANCE SHEET AND PROFIT AND LOSS ACCOUNT AND BANK ACCOUNT STATEMENTS OF THOSE PARTIES. FURTHER, THAT THE LOAN WAS RECEIVED BY ACCOUNT PAYEE CHEQUE AND DEPOSITED IN THE BANK ACCO UNT. MORESO, THE LOAN HAS BEEN REPAID TO THE PARTIES WHICH WAS ALSO MADE KNOWN TO THE LD. CIT(A) AND, HENCE, THE ADDITION UNDER SECTION 68 IS NOT PE RMISSIBLE AND THUS THE SAME IS LIABLE TO QUASHED. HOWEVER, THE LD. DR RELIED UPON THE ORDER PASSED B Y THE AUTHORITIES BELOW. 4. HEARD THE PARTIES, PERUSED THE RELEVANT MATERIAL S AVAILABLE ON RECORDS. THE CASE OF THE ASSESSEE IS THIS THAT THE PERSONS F ROM WHOM THE ASSESSEE OBTAINED THE UNSECURED LOAN ARE ASSESSED TO TAX HAV ING PAN ACCOUNT. THE LOAN WAS RECEIVED BY ACCOUNT PAYEE CHEQUE ISSUED BY THES E PARTIES IN FAVOUR OF THE ASSESSEE. FURTHER THAT THE APPELLANTS MADE PAYMENT OR CREDITED INTEREST PAYABLE ON SUCH LOAN RECEIPT. SIMULTANEOUSLY THE CREDITORS HAVE SHOWN THE AMOUNT OF INTEREST AS INCOME IN THEIR INCOME TAX RETURNS. TH E REVENUES CASE IS THIS THAT THE ASSESSEE HAS FIXED TO PROVE THE GENUINENES S OF THE TRANSACTIONS AND CREDITWORTHINESS OF THE PARTIES/LENDERS AND HENCE A DDITION IS SUSTAINABLE. IT FURTHER APPEARS THAT THE INTEREST PAID BY THE ASSES SEE ON THE AMOUNT OF LOAN WAS ALSO SHOWN BY THE PARTIES IN THEIR RESPECTIVE RETUR N OF INCOME. ITA NO.179/RAN/2018 SHRI SHIV SHANKER PRAHLADKA VS. DCIT ASST.YEAR 2014-15 - 3 - WE HAVE FURTHER CONSIDERED THE EVIDENCES BEING THE PAN CARD, INCOME TAX RETURN OF THE LENDERS, THE DETAILS OF REPAYMENT MADE BY THE ASSESSEE TO THOSE PARTIES FROM WHICH IT APPEARS THAT THE LOAN H AS BEEN DULY REPAID ALONG WITH INTEREST BY THE ASSESSEE TO THOSE PARTIES AS C LAIMED BY THE ASSESSEE BEFORE THE AUTHORITIES BELOW AND BEFORE US AS WELL. NOTIC IABLY, THE ASSESSEE HAS PAID INTEREST ON LOAN BORROWED WHICH INDICATE ELEMENT OF COMMERCIALITY IN THE TRANSACTION. SIGNIFICANTLY, THE LOAN STOOD EVENTUA LLY REPAID WHICH IS ANOTHER STRONG CIRCUMSTANCE TO ESTABLISH THE BONA FIDES OF THE CREDIT ENTRIES. HENCE, WE FIND MERIT IN THE PLEA OF THE ASSESSEE FOR DISCHARG E OF BURDEN WITH REFERENCE TO SEC. 68 OF THE ACT. WE, THUS, SET ASIDE THE ORDER OF CIT(A) ON THIS SCORE AND DIRECT THE AO TO DELETE THE ADDITIONS SO MADE. 5. IN THE RESULT, THE ASSESSEES APPEAL IS THUS ALL OWED. THIS ORDER PRONOUNCED IN OPEN COURT ON 18/12/2019 SD/- SD/- (PRADIP KUMAR KEDIA) (MS. MADHUMITA ROY) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 18/12/2019 TANMAY, SR. PS TRUE COPY / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. ( ) / THE CIT(A)- 5. , ! ' , #$%% / DR, ITAT, RANCHI 6. &' () / GUARD FILE. / BY ORDER, (SR. PRIVATE SECRETARY) / ITAT, RANCHI