Shri Rubal Rajkumar Taneja, Surat V. The Income tax Officer,Ward-3(1), Surat

ITA 189/AHD/2010

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 63159 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 10 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-11-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 08-10-2012
• Assessment Year: 2005-2006
• Appeal Filed On: 20-01-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D K SINGH
• Section: 143(3)

Judgement Text

ITA NO 189/ AHD/2010 A.YR.. 2005 -06 1 IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, AHMEDABAD (BEFORE SHRI D.K. TYAGI,JM & SHRI ANIL CHATURVEDI A .M.) I.T.A. NO. 189 /AHD/2010. (ASSESSMENT YEAR: 2005-06) RUBAL RAJKUMAR TANEJA, 202, SUNDREAM APARTMENT NR. VIDHYA BHARTI SCHOOL, BHAAATTAR ROAD, SURAT. (APPELLANT) VS. INCOME TAX OFFICER, WARD 3(1), AAYAKAR BHAVAN, MAJURA GATE, SURAT. (RESPONDENT) PAN: ABZPT8051E APPELLANT BY : MR.RAMESH MALPANI RESPONDENT BY : MR.D.K.SINGH, SR. D.R. ( )/ ORDER DATE OF HEARING : 8-10-20 12 DATE OF PRONOUNCEMENT : 23-11-2012 PER: SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER. ASSESSEE IS AN INDIVIDUAL ENGAGED IN THE BUSINESS OF TRADING OF YARNS IN THE NAME AND STYLE OF GENUINE TRADERS. HE FILED HIS RETURN OF INCOME ON 7-3-2006 DECLARING TOTAL INCOME OF RS.1,52,965/-.TH E CASE WAS SELECTED FOR SCRUTINY AND THEREAFTER THE ASSESSMENT WAS FRAMED O N 27-12-2007 U/S. 143(3) AND THE INCOME WAS DETERMINED AT RS.8,57,430 /-. ASSESSEE CARRIED THE MATTER BEFORE CIT (A) BUT HIS APPEAL WAS DISMIS SED AND THEREFORE THE ITA NO 189/ AHD/2010 A.YR.. 2005 -06 2 ASSESSEE IS NOW IN APPEAL BEFORE US WHEREIN HE HAS RAISED VARIOUS GROUNDS. 2. OF THE VARIOUS GROUNDS, GROUND NO.5 IS GENERAL IN NATURE AND HENCE NOT ADJUDICATED. GROUND NO.4 IS CONSEQUENTIAL IN NA TURE AND THEREFORE NOT ADJUDICATED. 3. FIRST GROUND RELATES TO THE ADDITION OF RS.2,79, 000/- U/S. 68 OF THE ACT WHEREAS GROUND NO.2 IS WITH RESPECT TO THE ADDITION OF RS.3,49,905/-. 4. DURING THE COURSE OF ASSESSMENT ON PERUSAL OF BA LANCE SHEET, THE A.O. OBSERVED THAT ASSESSEE HAS TAKEN LOANS AGGREGA TING TO RS.2,79,000/- ASSESSEE HAD ALSO TAKEN LOANS FROM VARIOUS PARTIES AMOUNTING TO RS.3,49,905/-. THE ASSESSEE WAS ASKED TO PROVE THE GENUINENESS OF THE LOANS. ASSESSEE DID NOT FURNISH THE DETAILS CALLED FOR AND THEREFORE A.O. TREATED THE LOANS AS BOGUS AND UNEXPLAINED AND ADDE D IT TO THE INCOME. ASSESSEE CARRIED THE MATTER BEFORE CIT (A). CIT (A) CONFIRMED THE ACTION OF A.O. 5. BEFORE US THE LD. A.R. SUBMITTED THAT THE ADDITI ON COMPRISES OF 3 PARTIES. IN RESPECT OF LOAN FROM FINVEST PVT. LTD. (RS.2,25,000) IT WAS SUBMITTED THAT ASSESSEE HAD TAKEN ADVANCE AGAINST S ALE AND THIS AMOUNT WAS FURTHER ADVANCED TO DHARMESH TRADERS FOR MAKING SUPPLIES. SINCE THE DEAL COULD NOT MATERIALIZE RS.2 LACS WAS REFUNDED D IRECTLY BY DHARMESH TRADERS TO FINVEST STOCK AND THE BALANCE AMOUNT OF RS.25,000/- WAS REFUNDED IN CASH BY ASSESSEE IN NEXT YEAR. WITH RES PECT TO THE AMOUNT PAYABLE TO RAJU AND BECHAR, IT WAS SUBMITTED THAT T HE AMOUNT OUTSTANDING ITA NO 189/ AHD/2010 A.YR.. 2005 -06 3 WAS NOT LOAN BUT WAS IN THE NATURE OF CREDITORS ON ACCOUNT OF SALARY. WITH RESPECT TO THE LOAN OF RS.3,49,905/- HE SUBMITTED T HAT THE REQUIRED DETAILS WERE FURNISHED BUT THE SAME WAS IGNORED. HE SUBMITT ED THE COPY OF THE LEDGER ACCOUNT AND CONFIRMATIONS AND PLACED IT ON R ECORD IN THE PAPER BOOK. HE THUS URGED THAT IN VIEW OF THESE FACTS TH E ADDITION MADE BY THE A.O. BE DELETED. IN THE ALTERNATIVE IT WAS SUBMITTE D THAT THE MATTER BE SENT BACK TO THE A.O. FOR VERIFICATION OF DETAILS AND DE CIDE THE MATTER AFRESH. 6. ON THE OTHER HAND THE LD. D.R. SUBMITTED THAT DE SPITE VARIOUS OPPORTUNITIES BEING AFFORDED TO ASSESSEE, THE ASSES SEE DID NOT FURNISH THE REQUIRED DETAILS BEFORE A.O. WITH RESPECT TO THE L OAN OF RS.3,49,905/- THE LD. D.R. SUBMITTED THAT PARTIAL DETAILS WERE DELIBE RATELY SUBMITTED AT THE FAG END AND THEREFORE A.O. COULD NOT MAKE NECESSARY INQ UIRIES. IN THE GIVEN CIRCUMSTANCES, THE A.O. WAS THUS FULLY JUSTIFIED IN MAKING THE ADDITION. HE THUS URGED THAT THE ORDER OF A.O. BE UPHELD. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. IT IS AN UNDISPUTED FACT THAT THE ASSESSEE WAS ASKED TO FURNISH THE DETAILS OF LOAN BY THE A.O. BUT THE SAME WAS NOT FU RNISHED AND THEREFORE THE ADDITION U/S. 68 WAS MADE BY A.O. HOWEVER WE AR E OF THE VIEW THAT IN THE INTEREST OF JUSTICE AND FAIRNESS ONE MORE OPPOR TUNITY BE GRANTED TO ASSESSEE TO ENABLE HIM TO FURNISH NECESSARY EVIDENC ES CALLED BY THE A.O. FOR VERIFICATION. WE THUS REMIT THIS ISSUE TO THE F ILE OF A.O. AND DIRECT HIM TO DECIDE THE MATTER AFRESH IN ACCORDANCE WITH THE PRO VISIONS OF LAW AFTER GRANTING ADEQUATE OPPORTUNITY OF HEARING TO THE ASS ESSEE. WE ALSO DIRECT THE ASSESSEE TO FURNISH ALL THE NECESSARY DETAILS C ALLED FOR BY THE A.O. AND ITA NO 189/ AHD/2010 A.YR.. 2005 -06 4 NOT TO SEEK UNNECESSARY ADJOURNMENTS. THUS BOTH THE GROUNDS OF THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. 8. GROUND NO.3 RELATES TO THE DISALLOWANCE OF INTER EST PAID OF RS.67,503/-. 9. A.O. OBSERVED THAT THE ASSESSEE HAS CLAIMED RS.6 7,503/- AS INTEREST ON LOAN. THE A. O. OBSERVED THAT ASSESSEE HAS BORRO WED MONEY AND ON WHICH HE HAD PAID INTEREST AND HAD ALSO GIVEN INTER EST FREE LOANS TO OTHER PERSONS. THE A.O. WAS OF THE VIEW THAT THE ASSESSEE COULD NOT ESTABLISH THAT THE BORROWED FUNDS WERE UTILIZED FOR THE PURPO SE OF BUSINESS AND ALSO COULD NOT ESTABLISH THAT INTEREST FREE AMOUNT AVAIL ABLE WITH HIM WAS USED FOR THE PURPOSE OF LENDING. HE WAS THUS OF THE VIEW THAT DIVERSION OF INTEREST BEARING FUNDS FOR NON BUSINESS PURPOSE WAS CLEARLY ESTABLISHED AND THEREFORE HE DISALLOWED THE INTEREST PAYMENT OF RS. 67,503/-. CIT (A) CONFIRMED THE ACTION OF A.O. 10. BEFORE US, THE LD. A.R. SUBMITTED THAT IT WAS H AVING SUFFICIENT INTEREST FREE FUNDS AT HIS DISPOSAL AND THE INTEREST FREE LO ANS HAVE BEEN GIVEN FROM THE INTEREST FREE FUNDS. ON THE OTHER HAND THE LD. D.R. SUBMITTED THAT THE ASSESSEE COULD NOT ESTABLISH THAT THE INTEREST FREE FUNDS WERE GIVEN AS LOAN. HE THUS URGED THAT THE A.O. WAS JUSTIFIED IN MAKING ADDITION AND THE ACTION OF THE A.O. BE UPHELD. 11. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. BEFORE US, THE LD. A.R. HAS SUBMITTED THA T IT WAS HAVING SUFFICIENT INTEREST FREE FUNDS WHICH HAVE BEEN LENT OUT. WE FI ND THAT THIS ASPECT WAS ITA NO 189/ AHD/2010 A.YR.. 2005 -06 5 NOT VERIFIED BY THE A.O. SINCE WE HAVE ALREADY REMI TTED THE MATTER WITH RESPECT TO LOAN WHILE DECIDING GROUND NO.1 & 2 HERE INABOVE TO THE FILE OF A.O. FOR VERIFICATION AND SINCE THE MATTER IS ALSO CONNECTED WITH THE LOAN, WE FEEL THAT IN THE FAIRNESS OF THINGS, THIS MATTER SHOULD ALSO BE REMITTED TO THE FILE OF A.O. FOR VERIFICATION OF THE CONTENTION S OF THE ASSESSEE. THUS THE DIRECTIONS GIVEN HEREINABOVE FOR GROUND NO.1 AND 2 WOULD ALSO APPLY TO THE PRESENT GROUND. THUS THIS GROUND OF THE ASSESSEE I S ALLOWED FOR STATISTICAL PURPOSES. 12. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN OPEN COURT ON 23 - 11 - 2012 . SD/- SD/- ( D. K. TYAGI) (ANIL CHATURVEDI) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD. S.A.PATKI. COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS)-V,SURAT. 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AHM EDABAD. ITA NO 189/ AHD/2010 A.YR.. 2005 -06 6 1.DATE OF DICTATION 8 - 10 -2012 2.DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE TH E DICTATING 21 / 11 / 2012 MEMBER.OTHER MEMBER. 3.DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P.S./P.S - -2012. 4.DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT - -2012 5.DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR .P.S./P.S - -2012 6.DATE ON WHICH THE FILE GOES TO THE BENCH CLERK - -2012. 7.DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 8.THE DATE ON WHICH THE FILE GOES TO THE ASSTT. REG ISTRAR FOR SIGNATURE ON THE ORDER 9.DATE OF DESPATCH OF THE ORDER..