RADHA DEVELOPERS, UDUPI V. ASST CIT CEN CIR 34, MUMBAI

ITA 1847/MUM/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 79329 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 4 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-07-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 20-05-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 16-03-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: HARI S RAHEJA
• Keywords: Unexplained cash credit

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH D, MUMBAI . . , ! #, ! % BEFORE SHRI P.M. JAGTAP, ACCOUNTANT MEMBER AND SHRI SANJAY GARG, JUDICIAL MEMBER /. ITA NO. 1847/MUM/2012 # # # # # ## # / ASSESSMENT YEAR: 2008-09 SAI RADHA DEVELOPERS, C.J. COMPLEX, 3 RD FLOOR, SUPER BAZAR, K.M. MARG, UDUPI 576 101 / VS. ASST. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE -34 1 ST FLOOR, AAYAKAR BHAVAN, MUMBAI.-400 020 ( ) / APPELLANT) ( *+) / RESPONDENT) PERMANENT ACCOUNT NO. :- AAYFS 8343 N #, / ASSESSEE BY : SHRI HARI S. RAHEJA ! . / REVENUE BY : SHRI P.K. SINGH / O R D E R PER SANJAY GARG, JUDICIAL MEMBER: THE PRESENT APPEAL HAS BEEN PREFERRED BY THE ASSES SEE AGAINST THE ORDER OF THE LD.CIT(A)-41, MUMBAI DATED 29.12.2010 RELEVANT TO THE ASSESSMENT YEAR 2008- 09. THE SOLE ISSUE RAISED BY THE ASSESSEE THROUGH I TS GROUNDS OF APPEAL IS REGARDING CONFIRMATION OF THE ADDITION OF RS.6,00,000/- BY TH E CIT(A) ON ACCOUNT OF UNEXPLAINED SUNDRY CREDITORS. 2. BRIEF FACTS OF THE CASE ARE THAT THE SURVEY ACTI ON U/S.133A OF THE ACT WAS CARRIED OUT BY THE ASSESSEE FIRM WHO IS CARRYING ON BUSINESS AS DEVELOPER, BUILDER AND CONTRACTOR. THE AO NOTICED FROM THE BALANCE SHE ET OF THE ASSESSEE THAT THE ASSESSEE HAD SHOWN AN AMOUNT OF RS.6,00,000/- UNDER THE HEAD UNEXPLAINED . / DATE OF HEARING : 20.05.2014 . / DATE OF PRONOUNCEMENT : 16. 07.2014 ITA NO.1847/MUM/2012 SAI RADHA DEVELOPERS ASSESSMENT YEAR: 2008-09 2 SUNDRY CREDITOR. WHEN CALLED FOR THE DETAILS, THE ASSESSEE AGAIN SHOWED THE UNEXPLAINED AMOUNT OF RS.6,00,000/- AS SUSPENSE. WHEN THE AO ISSUED SHOW CAUSE NOTICE TO THE ASSESSEE AS TO WHY THE SAID AM OUNT OF RS.6,00,000/- SHOULD NOT BE DISALLOWED AND ADDED BACK TO THE INCOME OF THE A SSESSEE, THE ASSESSEE EXPLAINED AS UNDER:- DURING THE COURSE OF SURVEY LOOSE PAPER FILED MARK ED AS ANNEXURE-28 CONTAINS PAGES 16-8 WHERE AGREEMENT VALUE OF FLAT NO.804 IN SAI RADHA PARADISE OF RS.95,000/- AND CONSTRUCTION AGREEMENT OF RS.9,86,7 00/-. IN THIS CONNECTION RS.3,00,000/- EACH HAS BEEN RECEIVED ON 29.11.2005 AND 14.01.2006. THE TOTAL AMOUNT OF RS.6,00,000/- IS THEREFORE COVERED IN THE DISCLOSURE MADE AT THE TIME OF SEARCH/SURVEY. ACCORDINGLY THE AMOUNT OF RS.6,00,00 0/- HAS BEEN DECLARED IN THE RETURN FILED U/S.148. THE SAID AMOUNT HAS BEEN INTR ODUCED IN THE BUSINESS BY THE ASSESSEE FIRM AND HAS BEEN WRONGLY SHOWN AS UNEXPLA INED CREDITORS INSTEAD OF THE SAME BEING CREDITED TO THE PARTNERS CAPITAL ACCOUNT . WE THEREFORE REQUEST YOUR HONOUR TO KINDLY CONIDER THE SAME AS APPLICATION OF INCOME DECLARED IN THE A.Y.2006- 07 AND TREAT THE SAME AS EXPLAINED. 3. HOWEVER, THE AO DID NOT FIND ABOVE EXPLANATION G IVEN BY THE ASSESSEE AS SATISFACTORY AND OBSERVED THAT THE SAID AMOUNT OF R S.6,00,000/- WAS CLEARLY SPECIFIED BY THE ASSESSEE IN ITS BALANCE SHEET AS UNEXPLAINED CREDITOR AND THE SAID AMOUNT OF RS.6,00,000/- HAD BEEN CATEGORIZED UNDER THE SUSPEN SE ACCOUNT. THE AO FURTHER OBSERVED THAT THE EXPLANATION OF THE ASSESSEE THAT THE ADDITIONAL AMOUNT OF RS.6,00,000/- DECLARED DURING THE SURVEY ACTION WAS INTRODUCED IN THE BUSINESS BY THE ASSESSEE AFTER A PERIOD OF MORE THAN ONE YEAR, WAS NOT PLAUSIBLE AND WAS ONLY AN AFTER THOUGHT. THEREFORE, HE ADDED BACK THE SAID AMOUNT OF RS.6,00,000/- INTO THE INCOME OF THE ASSESSEE. 4. IN THE FIRST APPEAL LEARNED CIT(A) ALSO OBSERVED THAT IF THE SAID AMOUNT OF RS.6,00,000/- WAS DECLARED INCOME IF THE ASSESSMENT YEAR 2006-07, THAT SHOULD HAVE BEEN REFLECTED IN THE BALANCED SHEET FOR ASSES SMENT YEAR 2006-07. EVEN THE AUDITORS HAVE CLEARLY MENTIONED THAT THE AMOUNT OF RS.6,00,000/- AS UNEXPLAINED CREDITOR AND THE ASSESSEE HAS FAILED TO PROVE THAT THE SAID MOUNT OF RS.6,00,000/- WAS THE AMOUNT INTRODUCED INTO THE BUSINESS BY THE ASSESSEE WHICH WAS DECLARED DURING THE SURVEY ACTION. HE THEREFORE, DISMISSED T HE APPEAL OF THE ASSESSEE. AGGRIEVED AGAINST THE ORDER OF THE CIT(A), ASSESSEE HAS COME IN APPEAL BEFORE US. ITA NO.1847/MUM/2012 SAI RADHA DEVELOPERS ASSESSMENT YEAR: 2008-09 3 5. WE HAVE HEARD THE LEARNED REPRESENTATIVE OF THE PARTIES AND HAVE ALSO GONE THROUGH THE RECORD. THE LEARNED AR BEFORE US HAS AG AIN REPEATED THE AVERMENTS WHICH WERE MADE BEFORE THE LOWER AUTHORITIES. HE HA S FURTHER SUBMITTED THAT INADVERTENTLY, THE ASSESSEE INSTEAD OF ACCOUNTING T HE INCOME IN CAPITAL ACCOUNT OF PARTNERS, WRONGLY MADE THE ENTRY IN THE SUSPENSE AC COUNT. HIS FURTHER CONTENTION HAS BEEN THAT THE SURVEY WAS CARRIED OUT IN THE YEA R 2007, WHEREAS THE ACCOUNTS FOR THE ASSESSMENT YEAR 2006-07 WAS CLOSED ON 31.03.200 6 , HENCE THE ENTRY OF THE ABOVE AMOUNT COULD NOT BE MADE IN THE ACCOUNTS PERT AINING TO ASSESSMENT YEAR 2006-07. 6. ON THE OTHER HAND, LEARNED DR HAS STRONGLY RELIE D UPON FINDINGS OF THE LOWER AUTHORITIES. HE HAS FURTHER CONTENDED THAT EVEN THE AUDITORS HAS NOT GIVEN ANY NOTE THAT THE SAID AMOUNT WAS PERTAINING TO THE DISCLOSU RE MADE DURING THE SURVEY ACTION IN THE YEAR 2007. AT THIS, THE LEARNED AR HAS STRES SED THAT THE AMOUNT OF RS.6,00,000/- WHICH WAS DECLARED DURING THE SURVEY ACTION RELATING TO ASSESSMENT YEAR 2006-07 HAS NOT BEEN CREDITED ELSEWHERE. HENCE THE CLAIM OF THE ASSESSEE WAS GENUINE. 7. AFTER HEARING THE SUBMISSIONS OF THE LEARNED REP RESENTATIVES OF THE PARTIES, WE ARE OF THE VIEW THAT THE MATTER NEEDS FRESH EXAM INATION BY THE AO AS TO WHETHER THE AMOUNT OF RS.6,00,000/- DECLARED IN THE SURVEY ACTION DURING THE ASSESSMENT YEAR 2006-07 WAS EVER CREDITED BY THE ASSESSEE IN I TS ACCOUNTS OF INCOME THEREAFTER AND AS TO WHAT WAS THE POSITION IN THIS RESPECT FOR ASSESSMENT YEAR 2007-08. IF THE AMOUNT OF RS.6,00,000/- DECLARED DURING THE SURVEY ACTION, IS FOUND TO BE NOT CREDITED IN THE BOOKS OF ACCOUNT ANYWHERE ELSE BUT IN THE SUSPENSE ACCOUNT ONLY, THEN THE AO WILL ALLOW, THE CLAIM OF THE ASSESSEE A CCORDINGLY. NEEDLESS TO SAY THAT AO WILL GIVE PROPER OPPORTUNITY TO THE ASSESSEE PRE SENT ITS CASE. ITA NO.1847/MUM/2012 SAI RADHA DEVELOPERS ASSESSMENT YEAR: 2008-09 4 8. IN VIEW OF OUR OBSERVATIONS THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE. . 2 16 .07. 201 4 . ORDER PRONOUNCED IN THE OPEN COURT ON THIS 16 TH DAY OF JULY, 2014. SD/- SD/- ( P.M. JAGTAP ) (SANJAY GARG) ! ! ! ! / ACCOUNTANT MEMBER ! ! ! ! / JUDICIAL MEMBER /MUMBAI, 2 /DATED: 16.07.2014. . ./ P.S. *A.K.PATEL COPY TO: ) / THE APPELLANT *+) / THE RESPONDENT 4 5 / THE CIT, CONCERNED, MUMBAI 4 5 / THE CIT(A) CONCERNED, MUMBAI 6 * /THE DR D BENCH # / GUARD FILE. +6 * //TRUE COPY// / BY ORDER / DY/ASSTT. REGISTRAR, , / ITAT, MUMBAI.