Shri Rajendra Raichand Shah, Bilimora V. The Income tax Officer,Ward-3, Navsari

ITA 180/AHD/2011

• Counselvise Citation: 18020514 RSA 2011
• Duration Of Justice: 7 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-09-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Next Hearing Date: 19-09-2011
• Assessment Year: 2007-2008
• Appeal Filed On: 24-01-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S A BOHRA
• Assessee Lawyers: R N VEPARI
• Keywords: Salary income; Source of fund
• Section: 143(3); 68

Judgement Text

-1- IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH 'SMC' BEFORE SHRI MUKUL KUMAR SHRAWAT JUDICIAL MEMBER ITA NO.180/AHD/2011 (ASSESSMENT YEAR:-2007-08) SHRI RAJENDRA RAICHAND SHAH, SONIWAD, BILIMORA V/S THE INCOME-TAX OFFICER, WARD-3, NAVSARI PAN: ABNPS 6786 R [APPELLANT] [RESPONDENT] APPELLANT BY :- SHRI R N VEPARI, AR RESPONDENT BY:- SHRI S A BOHRA, SR. DR DATE OF HEARING:- 19-09-2011 DATE OF PRONOUNCEMENT:- 20-09-2011 O R D E R THIS IS AN APPEAL AT THE BEHEST OF THE ASSESSEE WH ICH HAS EMANATED FROM THE ORDER DATED 22-10-2010 OF THE LEA RNED COMMISSIONER OF INCOME-TAX (APPEALS)-VALSAD [THE C IT(A)] FOR ASSESSMENT YEAR (AY) 2007-08. THE ONLY ISSUE IS IN RESPECT OF AN ADDITION U/S 68 OF THE INCOME-TAX ACT, 1961 [HEREIN AFTER REFERRED TO AS THE ACT] OF RS.1,67,000/-. 2 THE FACTS IN BRIEF AS EMERGED FROM THE CORRESPOND ING ASSESSMENT ORDER PASSED U/S 143(3) ON 09-12-2009 WE RE THAT THE ASSESSEE IN HIS INDIVIDUAL CAPACITY HAS TAKEN LOANS FROM 11 PERSONS TOTALING RS.2,17,000/-. AN ENQUIRY WAS RAISED BY TH E ASSESSING OFFICER [AO FOR SHORT] AND IN COMPLIANCE, THE ASS ESSEE HAS FURNISHED THE DETAILS OF THE SAID CREDITORS, THEIR SOURCES OF INCOME AND THE NATURE OF TRANSACTIONS. THE AO WAS NOT CONV INCED WITH THE SAID REPLY. THEREFORE, AFTER DISCUSSING FEW CASE LA W, THE ENTIRE AMOUNT OF RS.2,17,000/- WAS TAXED BY INVOKING THE P ROVISIONS OF 2 ITA NO.180/AHD/2011 SECTION 68 OF THE ACT. THE MATTER WAS CARRIED BEFOR E THE FIRST APPELLATE AUTHORITY. 3 BEFORE THE LEARNED CIT(A) AGAIN THOSE FACTS WERE REITERATED AND THEREAFTER HE HAS HELD THAT AN AMOUNT OF RS.50, 000/- IN THE NAME OF KISHANCHAND BASRAMAL HAJHARANI BEING RECEIV ED THROUGH CHEQUE, THEREFORE, THE TRANSACTION WAS ESTABLISHED AND HENCE DIRECTED TO DELETE THE SAME. REST OF THE BALANCE A MOUNT I.E. RS.1,67,000/- WAS AFFIRMED. NOW, THE ASSESSEE IS IN FURTHER APPEAL. 4 FROM THE SIDE OF THE ASSESSEE, THE LEARNED AR MR. R N VEPARI APPEARED AND PLACED A CHART IN THE FOLLOWING MANNER :- SR. NO . NAME AMOUN T STATEME NT RECORDED AFFIDAVIT FILED RELATIV E CONFIRMATIO N FILED CAPACITY 1 NIRAJ N SHAH 17,000 YES YES YES YES RS.48000 PER ANNUM SALARY. JOINT FAMILY. ALL EARNING. ANCESTRAL HOME 2 HINABEN B SHAH 18,000 HUSBAND HAS SHOP TO SELL OIL ETC. FOR 2 WHEELERS. ANCESTRAL HOME 3 NITABEN A SHAH 18,500 YEARLY INCOME RS.114000 (RS.3500 AS PRIMARY TEACHER + RS.6000 PENSION AS WIDOW). ANCESTRAL HOME. HUSBAND WAS FORMER GOVERNMENT EMPLOYEE. 4 DARSHANKU MAR A SHAH 17,000 AVERAGE ANNUAL SALARY INCOME RS.100000. SOFTWARE ENGINEER. ANCESTRAL HOME 5 KIRTIBEN A SHAH 18,500 0 PAST SAVINGS 6 KETUL N SHAH 18,000 SMALL BUSINESS. UNMARRIED. JOINT FAMILY 3 ITA NO.180/AHD/2011 7 NALINKUMA R ALIAS BAKUL KANTILAL SHAH 19,500 ANNUAL INCOME RS.36000. AGRI. LAND FOR RS.99991 IN 1998. SO PROPERTY 8 SUSHILABEN J SHAH 19,000 BEING ALONE STAYS WITH DAUGHTER. ESTIMATED INCOME RS.30000/RS.350 00 9 BHARTIBEN SHROFF 19,500 NO NO ESTIMATED ANNUAL INCOME RS.60000 PM WIDOW. NO LIABILITY 4.1 IN RESPECT OF NIRAJ N SHAH, AT SR. NO.1, THE LE ARNED AR HAS INFORMED THAT THE DEPOSITOR WAS HAVING SALARY INCOM E OF RS.48000/-. HE IS RELATED TO THE ASSESSEE AND HIS PROOF AND IDE NTITY WAS PRODUCED. HE HIMSELF WAS PRESENT BEFORE THE AO AND HIS STATEMENT WAS RECORDED ON OATH. THAT THE SAID AMOUNT WAS REPA ID ON 18-02- 2008, AS IS EVIDENT FROM THE INCOME-TAX RECORD OF T HE ASSESSEE. 4.2 FURTHER, IN RESPECT OF NITABEN A SHAH, AT SR. N O.3, THE LEARNED AR HAS EXPLAINED THAT SHE WAS HAVING HER FAMILY PEN SION OF RS.6000/- AS WELL AS SALARY OF RS.3500/- FROM GOVER NMENT PRIMARY SCHOOL, SURAT. SHE WAS PRESENT BEFORE THE AO AND FI LED AN AFFIDAVIT AFFIRMING THE SAID TRANSACTION. THE LEARNED AR HAS ALSO INFORMED THAT THE SAID AMOUNT WAS REPAID ON 23-01-2008, AS I S EVIDENT FROM THE INCOME TAX RECORD OF THE ASSESSEE. 4.3 IN RESPECT OF PARTY AT SR. NO.4, VIZ. DARSHANKU MAR A SHAH, THE LEARNED AR HAS STATED THAT THE AMOUNT WAS ADVANCED FROM SALARY INCOME FROM LOTUS WIRES & CABLES, MUMBAI. THE DEPOS ITOR HAD MADE A STATEMENT WHICH WAS RECORDED ON OATH AND AFF IRMED THE GENUINENESS OF THE TRANSACTION. HE HAS FILED THE EV IDENCE OF PROOF OF ADDRESS AND HIS IDENTITY AND THE DETAILS OF PAST SA VINGS. THE SAID AMOUNT WAS ALSO REPAID TO HIM ON 19-10-2007. 4 ITA NO.180/AHD/2011 4.4 IN RESPECT OF NALINKUMAR ALIAS BAKUL SHAH, AT S R.NO.7, THE LEARNED AR HAS INFORMED THAT THE SAID DEPOSITOR IS IN THE BUSINESS OF PURCHASE AND SALE OF GRAINS AND PULSES. HE WAS ALSO PRESENT AND MADE A STATEMENT TO AFFIRM THE LOAN AMOUNT. THE AMO UNT IN QUESTION WAS REPAID ON 02-02-2008. 4.5 IN RESPECT OF BHARTIBEN SHROFF, AT SR. NO.9, TH E LEARNED AR ADMITTED THAT HER STATEMENT WAS NOT RECORDED BUT LA TER ON SHE FILED AN AFFIDAVIT. HER SOURCE OF INCOME WAS DIVIDEND INC OME ON INVESTMENT IN SHARES. SHE HAS FURNISHED HER LOAN CO NFIRMATION CERTIFICATE. 4.6 WITH THIS PARTY-WISE BACKGROUND, THE LEARNED AR SUBMITTED THAT IN RESPECT OF REST OF THE PARTIES, HE PLACED R ELIANCE ON THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW. 5 FROM THE SIDE OF THE REVENUE, THE LEARNED DR MR. S A BOHRA, APPEARED AND SUPPORTED THE ORDERS OF THE AUTHORITIE S BELOW. HIS MAIN PLANK OF ARGUMENTS WAS THAT WHY THOSE PETTY EA RNERS HAVE ADVANCED INTEREST FREE LOANS TO THE ASSESSEE. HE HA S ALSO DOUBTED THE CREDITWORTHINESS OF THOSE PARTIES. THEREFORE, T HE LEARNED DR HAS PLEADED THAT THE PROVISIONS OF SECTION 68 HAVE BEEN RIGHTLY INVOKED BY THE AO. 6 HAVING HEARD THE SUBMISSIONS OF BOTH THE SIDES, I AM OF THE VIEW THAT OUT OF 9 PARTIES, THE ASSESSEE WAS ABLE T O COMPLY WITH THE PROVISIONS OF SECTION 68 OF THE ACT IN ITS TRUE SEN SE IN RESPECT OF PARTY AT SR. NO.1 NIRAJ N SHAH, PARTY AT SR. NO.3 N ITABEN A SHAH, PARTY AT SR. NO.4 DARSHANKUMAR A SHAH AND PARTY AT SR. NO.7 NALINKUMAR ALIAS BAKUL K SHAH. THE LEARNED AR HAS A LSO EXPLAINED THE RESPECTIVE SOURCES OF THEIR INCOME, THEIR RELAT IONSHIP WITH THE ASSESSEE AND THE MODE OF TRANSACTION. IN RESPECT OF REST OF THE PARTIES, I AM NOT INCLINED TO ACCEPT THE EXPLANATIO N OF THE ASSESSEE AS SUBMITTED BEFORE THE AUTHORITIES BELOW. IN RESPE CT OF THESE FOUR 5 ITA NO.180/AHD/2011 PARTIES, IT IS NOT IN DISPUTE THAT THEY WERE PRESEN T BEFORE THE AO AND STATED ON OATH ABOUT THE GENUINENESS OF THE TRANSAC TIONS. THEY HAVE ALSO FURNISHED THEIR RESPECTIVE CONFIRMATION LETTER S WHICH WERE DULY SUPPORTED BY THE AFFIDAVITS. ONE MORE FACT IS ALSO NOT IN DISPUTE THAT IN THE SUBSEQUENT YEAR I.E. IN THE YEAR 2008, THE A SSESSEE HAS RETURNED THE LOAN AMOUNT NOW IN QUESTION. IT IS ALS O EVIDENT THAT OUT OF THOSE FOUR PARTIES, THE PARTIES APPEARING AT SR. NOS.1,3 AND 4 ARE SALARY EARNERS AND THEIR RESPECTIVE SOURCES OF INCO ME WERE EVIDENCED BY A COGENT CERTIFICATE. THEREFORE, THEIR RESPECTIVE AMOUNT I.E. RS.17,000 + RS.18,500 + RS.17,000 + RS. 19,500 = RS.72,000/- IS HEREBY DIRECTED TO BE DELETED AND RE ST OF THE AMOUNT IS CONFIRMED. IN THIS MANNER, THIS GROUND IS PARTLY ALLOWED. 7. IN THE RESULT, THE APPEAL IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE COURT TODAY ON 20-09-2011 SD/- (MUKUL KUMAR SHRAWAT) JUDICIAL MEMBER DATE : 20-09-2011 COPY OF THE ORDER FORWARDED TO: 1. SHRI RAJENDRA RAICHAND SHAH, SONIWAD, BILIMORA 2. THE INCOME-TAX OFFICER, WARD-3, NAVSARI 3. CIT CONCERNED 4. CIT(A), VALSAD 5. DR, ITAT, AHMEDABAD BENCH-SMC, AHMEDABAD 6. GUARD FILE BY ORDER DEPUTY REGISTRAR ASSISTANT REGISTRAR ITAT, AHMEDABAD