The ITO, Ward-3(3), Surat V. Shri Deepak Ramanlal Dalwadi, Surat

ITA 1936/AHD/2011

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 76828 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 10 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-06-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 27-05-2014
• Assessment Year: 2005-2006
• Appeal Filed On: 04-08-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P L KUREEL
• Keywords: Unexplained cash credit
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD B BENCH BEFORE: SRI D.K TYAGI, JUDICIAL MEMBER AND SHRI ANIL CHATURVEDI, ACCOUNTAN T MEMBER INCOME-TAX OFFICER, WARD 3(3), ROOM NO. 209, 2 ND FLOOR, AAYKAR BHAVAN, MAJURA GATE, SURAT, (APPELLANT) VS SHRI DEEPAK RAMANBHAI DALWADI, 3-4, CHINTAN PARK SOCIETY, BHATAR ROAD, SURAT PAN: AIMPD 9499 G (RESPONDENT) REVENUE BY: SRI P.L. KUREEL, SR.D.R. ASSESSEE BY: NONE DATE OF HEARING : 06-06-2014 DATE OF PRONOUNCEMENT : 13-06-20 14 / ORDER PER : D.K. TYAGI, JUDICIAL MEMBER:- THIS IS THE REVENUES APPEAL AGAINST THE ORDER OF LD. CIT(A)-V SURAT DATED 26-04-2011. 2. THE REVENUE HAS TAKEN FOLLOWING GROUND OF APPEAL :- 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A)-II, SURAT HAS ERRED IN DELETING (I) THE ADDI TION OF RS. ITA NO. 1936/AHD/2011 ASSESSMENT YEAR 2005-06 I.T.A NO. 1936/AHD/2011 A.Y. 2005-06 PAGE NO ITO VS. SRI DEEPAK RAMANBHAI DALWADI 2 11,68,868/- ON ACCOUNT OF OPENING BALANCE OF CAPITA L TREATING SAME AS UNEXPLAINED (II) THE ADDITION OF RS. 1,50,000/- ON ACCOUNT OF UNSECURED LOAN RECEIVED FROM HIS BROTHER STAYING IN THE SAME HOUSE WITH THE ASSESSEE AND (III) THE ADDITION OF RS. 1,5 7,749/- EARNED FROM AGRICULTURAL ACTIVITY AS INCOME FROM UNDISCLOSED SO URCES. 3. NONE APPEARED ON BEHALF OF THE ASSESSEE DESPITE THE FACT THAT NOTICE FOR TODAYS HEARING WAS SENT TO HIM. SO WE PROCEEDED TO DECIDE THE APPEAL AFTER HEARING LD. DR. 4. BRIEF FACTS OF THE CASE ARE THAT ASSESSEE FILED RETURN OF INCOME DECLARING TOTAL INCOME OF RS. 15,972/- AND AGRICULT URAL INCOME OF RS. 1,57,750/-. THE ASSESSMENT WAS FINALIZED U/S. 143( 3) OF THE ACT ON 10-12- 2007 BY MAKING THE ADDITION OF RS. 11,65,868/-, RS. 1,50,000/- AND RS. 1,57,749/- ON ACCOUNT OF OPENING BALANCE OF CAPITAL TREATED AS UNEXPLAINED CASH CREDIT U/S. 68 OF THE ACT, UNSECURED LOAN TREA TED AS UNEXPLAINED CASH CREDIT AND AGRICULTURAL INCOME TREATED AS UNDISCLOS ED INCOME RESPECTIVELY. 5. BEFORE LD. CIT(A) ASSESSEE SUBMITTED VARIOUS DOC UMENTS/EVIDENCES WHICH WERE NOT SUBMITTED DURING THE ASSESSMENT PROC EEDINGS, IN RESPECT OF POSSESSION OF AGRICULTURAL LAND BY HIM AND DETAI LS OF INCOME TAX RETURN FILED BY HIS BROTHER, IN SUPPORT LOAN TAKEN FROM HI S BROTHER, LD. CIT(A) SENT ALL THESE PAPERS TO AO FOR HIS REMAND REPORT WHICH WAS NOT SUBMITTED BY THE AO EVEN AFTER LAPSE OF TWO YEARS. LD. CIT(A) P ROCEEDED TO DECIDE THE APPEAL OF THE ASSESSEE ON THE BASIS OF DOCUMENTS/EV IDENCES FILED BY THE ASSESSEE BEFORE HIM. I.T.A NO. 1936/AHD/2011 A.Y. 2005-06 PAGE NO ITO VS. SRI DEEPAK RAMANBHAI DALWADI 3 5.1 IN RESPECT OF ADDITION OF RS. 11,65,868/- ON A CCOUNT OF OPENING BALANCE OF CAPITAL TREATING THE SAME AS UNEXPLAINED INCOME LD. CIT(A) HAS OBSERVED AS UNDER:- 5.3 I HAVE GONE THROUGH THE ASSESSMENT ORDER AS W ELL AS SUBMISSIONS OF THE APPELLANT, I AM OF THE OPINION THAT THE A.O. . SHOULD NOT HAVE ADDED THE OPENING CAPITAL TO THE TOTAL INCOME OF THE ASSE SSEE DUE TO FOLLOWING REASONS: EXPECTATION OF THE A.O, TO MAINTAIN BOOKS OF ACCOUN T BY AN AGRICULTURIST IS TOO MUCH. IT IS PRACTICALLY NOT SE EN ANYWHERE THAT AN AGRICULTURIST MAINTAINS BOOKS OF ACCOUNT UNTIL & UN LESS HE/SHE HAS OTHER SOURCES OF TAXABLE INCOME FOR WHICH FILING OF RETUR N OF INCOME IS MANDATORY. THE A.R.'S SUBMISSION IS VERY SELF-EXPLANATORY ABOU T THE SOURCE OF BUILDING UP OF CAPITAL WHICH HAS BEEN CONSIDERED AS UNEXPLAINED BY THE A.O. THE COMPONENT OF THE ASSETS WHICH FORMS THE CA PITA! OF THE APPELLANT HAS BEEN SUBMITTED IN DETAIL. I DON'T SEE ANY ABERR ATION IN THE SUBMISSIONS OF THE APPELLANT SO FAR AS ASSETS VS. CAPITAL IS CO NCERNED. FOR AN AGRICULTURIST HOLDING SO MUCH OF LAND, HAVING THIS AMOUNT OF CAPITA! IS NOT VERY SURPRISING. THE CAPITAL SHOWN BY THE APPELLANT CANNOT BE SAID TO ON HIGHER SIDE BY ANY STRETCH OF IMAGINATION IF WE LOO K INTO THE DETAILS SUBMISSION MADE BY THE A.R. THUS, IN MY OPINION, T HE SOURCE OF CAPITAL STANDS REASONABLY EXPLAINED. HENCE, THE ADDITION MA DE ON ACCOUNT OF OPENING CAPITAL IS HEREBY DELETED AND THE GROUND OF APPEAL IS ALLOWED. 5.2 IN RESPECT OF ADDITION OF RS. 1,50,000/- ON ACC OUNT OF UNSECURED LOANS RECEIVED FROM HIS BROTHER LD. CIT(A) HAS OBSE RVED AS UNDER:- 6.3. I HAVE GONE THROUGH THE ASSESSMENT ORDER AND THE SUBMISSIONS OF THE APPELLANT ALONG WITH THE LOAN CONFIRMATION FROM THE APPELLANT'S BROTHER. THE SOURCE OF THE BROTHER'S INCOME IS FROM AGRICULT URE AND LOOKING INTO THE DETAILS OF INCOME AS SUBMITTED BY THE A.R., IT CAN BE REASONABLY CONCLUDED THAT, THE LOAN STANDS EXPLAINED. HENCE, T HE ADDITION RNADE ON THIS ACCOUNT IS HEREBY DELETED AND THE GROUND OF AP PEAL IS ALLOWED. 5.3 IN RESPECT OF ADDITION OF RS. 1,57,750/- EARNED FROM AGRICULTURAL ACTIVITIES AS INCOME FROM UNDISCLOSED SOURCE LD. CI T(A)S FINDING WAS AS UNDER:- I.T.A NO. 1936/AHD/2011 A.Y. 2005-06 PAGE NO ITO VS. SRI DEEPAK RAMANBHAI DALWADI 4 7.3. I HAVE GONE THROUGH THE ASSESSMENT ORDER AN D THE SUBMISSIONS OF THE APPELLANT ALONG WITH THE LAND-HOLDING DOCUMENTS. THE SUBMISSION OF THE APPELLANT IS SELF-EXPLANATORY AND IN MY OPINION DOES NOT FURTHER ELABORATION. THE A.O. SHOULD HAVE AT LEAST ESTIMATED THE REASONABLE AGRICULTURAL INCOME WHICH MAY BE EARNED FROM SUCH LAND HOLDING EVEN THOUGH NO DETAILS RELATED TO AGRICULTU RAL ACTIVITY WAS PRODUCED BEFORE HIM. LOOKING INTO THE DETAILS SUBMI TTED BEFORE ME, I AM OF THE OPINION THAT THE AGRICULTURAL INCOME SHOWN BY T HE APPELLANT FROM SO MUCH OF LAND HOLDING IS VERY MUCH REASONABLE DOES NOT REQUIRE ANY INTERFERENCE BY THE REVENUE. ACCORDINGLY, THE ADDIT ION MADE ON ACCOUNT OF TREATING THE AGRICULTURAL INCOME AS UN DISCLOSED INCOME HEREBY DELETED AND THE GROUND OF APPEAL IS ALLOWED. 6. AFTER HEARING THE LD. DR AND PERUSING THE RECORD , WE FIND THAT THE FACT THAT ASSESSEE WAS ENGAGED IN AGRICULTURAL ACTI VITIES AND DERIVED AGRICULTURE INCOME HAS BEEN ESTABLISHED BY THE ASSE SSEE BEFORE LD. CIT(A) BY PRODUCING THE DOCUMENTARY EVIDENCE IN THI S RESPECT. THE NECESSARY DETAILS IN RESPECT OF LOAN RECEIVED FROM THE BROTHER WERE ALSO FILED BY ASSESSEE BEFORE LD. CIT(A). THEREFORE LD. CIT(A) HAS RIGHTLY DELETED THE ADDITION MADE BY AO AND THE ORDER PASSE D HIM IS HEREBY UPHELD. 7. IN THE RESULT, REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON THE DATE MENTIONE D HEREINABOVE AT CAPTION PAGE SD/- SD/- (ANIL CHATURVEDI) ( D.K. TYAGI) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD : DATED 13/06/2014 AK I.T.A NO. 1936/AHD/2011 A.Y. 2005-06 PAGE NO ITO VS. SRI DEEPAK RAMANBHAI DALWADI 5 / COPY OF ORDER FORWARDED TO:- 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER/ , / ,