Karnavati Polyblends Pvt. Ltd., Ahmedabad V. ACIT, Circle-2(1)(2), Ahmedabad

ITA 1842/AHD/2018

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 7069 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-09-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2015-2016
• Appeal Filed On: 27-08-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Income from undisclosed sources; Opportunity of being heard
• Section: 68; 2; 143(3); 20

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, AHMEDABAD (CONDUCTED THROUGH VIRTUAL COURTAT AHMEDABAD) BEFORE SHRI AMARJIT SINGH, ACCOUNTANT MEMBER & MS. MADHUMITA ROY, JUDICIAL MEMBER I.T.A. NO. 1842/AHD/2018 (ASSESSMENT YEAR: 2015-16) KARNAVATI POLYBLENDS PVT. LTD., NO. 5/12, GIDC PHASE-1 NEAR OLD POST OFFICE, VATVA, AHMEDABAD VS. ACIT CIRCLE-2(1)(2), AHMEDABAD PAN NO. AAA CK9 111 D ( APPELLANT ) .. ( RESPONDENT ) APPELLANT BY : SHRI VARTIK CHOKSHI, AR RESPONDENT BY : SHRI VINOD TANWANI, SR. DR DATE OF HEARING 1 5 . 0 7 .20 20 DATE OF PRONOUNCEMENT 08.09.2020 O R D E R PER MS. MADHUMITA ROY - JM: THE INSTANT APPEAL FILED BY THE ASSESSEE IS DIRECTE D AGAINST THE ORDER DATED 20.07.2018 PASSED BY THE COMMISSIONER OF INCO ME TAX (APPEALS) 2, AHMEDABAD ARISING OUT OF THE ORDER DATED 27.11.2017 PASSED BY THE ACIT, CIRCLE-2(1)(2), AHMEDABAD UNDER SECTION 143(3) OF T HE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED AS TO THE ACT) FOR ASS ESSMENT YEAR 2015-16. 2. THE BRIEF FACTS LEADING TO THE CASE IS THIS THAT THE ASSESSEE COMPANY FILED ITS RETURN OF INCOME THROUGH ELECTRONIC MEDIA ON 30.09.2015 DECLARING TOTAL INCOME OF RS. 31,93,250/- WHICH WAS ULTIMATEL Y FINALIZED UNDER SECTION 143(3) OF THE ACT INTER ALIA MAKING ADDITIO N OF RS. 5,54,027/- UNDER ITA NO.1842/AHD/2018 KARNAVATI POLYBLENDS PVT. LTD. VS. ACIT ASST.YEAR 2015-16 - 2 - SECTION 68 OF THE ACT WHICH WAS IN TURN CONFIRMED B Y THE LD. CIT(A). HENCE, THE INSTANT APPEAL BEFORE US. 3. DURING THE COURSE OF ASSESSMENT PROCEEDING IT WA S FOUND THAT THE ASSESSEE WAS RECEIVED OF UNSECURED LOAN OF RS. 31,5 4,027/- FROM ONE MAHESH TAX FAB DURING THE YEAR UNDER CONSIDERATION; THE SAME WAS REFLECTED FROM THE ANNUAL ACCOUNTS AND THE TAX AUDI T REPORT IN FORM 3CD OF THE ASSESSEE. HOWEVER, THE SAID COMPANY MAHESH TAX FAB ACCEPTED ONLY 25 LAKHS OF SUCH UNSECURED LOAN WHICH WAS ALSO REPA ID BY THE ASSESSEE. IN RESPONSE TO THE SHOW-CAUSE ISSUED TO THE ASSESSEE I T WAS SUBMITTED THAT THE ASSESSEE FILED INCORRECT LEDGER EXTRACT OF THE SAID PARTY FROM THE BOOKS OF ASSESSEE SHOWING OPENING BALANCE AT RS. 5 LAKHS AND CLOSING BALANCE OF RS. 1,38,624/-. THE ACCOUNTANT OF THE ASSESSEE NAMELY MR. RAJKUMAR SHARMA MIGHT HAVE MIXED UP LEDGER EXTRACT AND INADVERTENTL Y PRODUCED THE INCOMPLETE LEDGER ACCOUNT; THE SAID RAJKUMAR SHARMA WAS A SCIENCE GRADUATE AND NOT AN EXPERT IN ACCOUNTS, RATHER HAS BEEN CONVENTIONALLY WRITING BOOKS OF ACCOUNT BY EXPERIENCE AND PRACTICE AS OF THE PLEA OF THE ASSESSEE. IN FACT, THE LEDGER EXTRACT OF THE PARTY FROM THE BOOKS OF THE ASSESSEE TOGETHER WITH FORM 16A (R.W.S. 194A) EVIDE NCING THAT THE ASSESSEE HAS ACCEPTED AND REPAID IN AGGREGATE RS. 25 LAKHS W ITH THE LOAN CREDITOR. HOWEVER, SUCH PLEA OF THE ASSESSEE WAS NOT FOUND A CCEPTABLE BY THE LD. AO AND THE DIFFERENCE OF UNSECURED LOANS OF RS. 5,54,027/- (AS PER FORM 3CD RS. 31,54,027/- LESS AS PER CONFIRMATION OF RS. 25,00,000/-) ALLEGEDLY RECEIVED DURING THE YEAR UNDER CONSIDERATION BY THE ASSESSEE WAS HELD TO BE UNACCOUNTED INCOME AND ADDED UNDER SECTION 68 OF TH E ACT AS UNEXPLAINED ITA NO.1842/AHD/2018 KARNAVATI POLYBLENDS PVT. LTD. VS. ACIT ASST.YEAR 2015-16 - 3 - CASH CREDIT REPORTED IN THE BOOKS OF ACCOUNTS OF TH E ASSESSEE, WHICH WAS IN TURN, CONFIRMED BY THE FIRST APPELLATE AUTHORITY. 4. AT THE TIME OF THE HEARING OF THE INSTANT APPEAL, T HE LD. COUNSEL APPEARING FOR THE ASSESSEE SUBMITTED BEFORE US THAT THOUGH THE ASSESSEE HAS BEEN ABLE TO PROVE THE NATURE AND SOURCE OF AMO UNT CREDITED IN THE BOOKS OF ACCOUNTS OF THE ASSESSEE AND SUBMITTED THE LEDGER EXTRACT OF THIS PARTY FROM ITS BOOKS OF ACCOUNTS ALONGWITH FORM 16A , THE SAME WAS NOT TAKEN INTO CONSIDERATION IN ITS PROPER PERSPECTIVE BY THE REVENUE. THE ASSESSEE HAS FILED THE RECONCILIATION OF AMOUNT SHO WN IN TAX AUDIT REPORT. HE, THEREFORE, PRAYS FOR AN OPPORTUNITY TO PLACE HIS CASE AGAIN BEFORE THE LD. AO UPON FILING OF THE RECONCILIATION STATEMENT FOR PROPER ADJUDICATION OF THE MATTER. HOWEVER, THE LD. DR RELIED UPON THE ORDER PASSED B Y THE AUTHORITIES BELOW. 5. WE HAVE HEARD THE RESPECTIVE PARTIES, WE HAVE ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORDS INCLUDING BALANCE SHEET FILED BY THE ASSESSEE AS ON 31.03.2015 TOGETHERWITH LEDGER ACCOU NT OF THE SAID MAHESH TAX FAB ALONGWITH THE FORM 16A OF THE PROPRIETOR OF THE SAID COMPANY WHICH SHOWS THAT THE ASSESSEE HAS BEEN GIVEN UNSECU RED LOAN OF RS. 25 LAKHS AND RS. 1,54,027/- WAS THE INTEREST FOR SUCH LOAN AMOUNT. THE RECONCILIATION STATEMENT OF AMOUNT SHOWN IN TAX AUD IT REPORT IS ALSO ON RECORD BEFORE US. WE, THEREFORE, TAKING INTO CONSI DERATION THE ENTIRE ASPECT OF THE MATTER WE FIND IT FIT AND PROPER TO PROVIDE A FURTHER OPPORTUNITY OF BEING HEARD TO THE ASSESSEE BY THE LD. AO AFRESH WH EN THE ASSESSEE WOULD ITA NO.1842/AHD/2018 KARNAVATI POLYBLENDS PVT. LTD. VS. ACIT ASST.YEAR 2015-16 - 4 - BE FILING THE RECONCILIATION STATEMENT AS INDICATED ABOVE. THE LD. AO IS FURTHER DIRECTED TO DECIDE THE ISSUE UPON GRANTING AN OPPORTUNITY OF BEING HEARD TO THE ASSESSEE AND ALSO UPON TAKING INTO CON SIDERATION THE EVIDENCE ON RECORD OR ANY OTHER EVIDENCE WHICH THE ASSESSEE MAY CHOOSE TO FILE AT THE TIME OF HEARING OF THE MATTER. HENCE, ASSESSESSEE S APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. 6. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. THIS ORDER PRONOUNCED IN OPEN COURT ON 08/09/2020 SD/- SD/- (AMRJIT SINGH) (MS. MADHUMITA ROY) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 08/09/2020 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. , ! ' , #$%% / DR, ITAT, AHMEDABAD 6. &' () / GUARD FILE. / BY ORDER, / (DY./ASSTT. REGISTRAR) !, #$ / ITAT, AHMEDABAD 1. DATE OF DICTATION 02.09.2020 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 03.09.2020 3. OTHER MEMBER 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S 08.09.2020 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT .09.2020 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S 08 .09.2020 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 08.09.2020 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER