The ITO, Ward-7(4), Surat V. Shri Saurabh Ushakant Jhaveri, Surat

ITA 1987/AHD/2011

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 85683 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 6 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-02-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 23-01-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 10-08-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S B VAIDYA
• Keywords: Source of fund
• Section: 143(3); 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, AHMEDABAD (BEFORE SHRI ANIL CHATURVEDI , A.M. & SHRI KUL BHARAT, J.M. ) I. T. A. NO. 1987 / AHD/ 20 1 1 (A SSESSMENT YEAR: 2008 - 09) THE INCOME - TAX OFFICER WARD 7(4), SURAT. 395001 V/S SHRI SAURABH USHAKANT JHAVERI, 1/3386, 28, ANANT DARSHAN, NR. JUNI ADALAT, GOPIPURA , SURAT (APPELLANT) (RESPONDENT) PAN: ABGPJ 0725N APPELLANT BY : SHRI NIMESH YADAV, SR. D.R. RESPONDENT BY : SHRI S.B. VAIDYA ( )/ ORDER DATE OF HEARING : 23 - 01 - 2015 DATE OF PRONOUNC EMENT : 13 - 02 - 2015 PER SHRI ANIL CHATURVEDI,A.M. 1. THIS APPEAL FILED BY THE REVENUE IS AGAINST THE ORDER OF CIT(A) - V, SURAT DATED 27.05.2011 FOR A.Y. 2008 - 09. 2. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERIAL ON RECORD ARE AS UNDER. 3. ASSES SEE IS AN INDIVIDUAL AND HAS INCOME FROM PROFESSION, CAPITAL GAINS AND OTHER SOURCES. ASSESSEE FILED HI S RETURN OF INCOME FOR A.Y. 2008 - 09 ON 22.07.2008 DECLARING TOTAL INCOME OF RS. 3,61,632/ - . THE CASE WAS SELECTED FOR SCRUTINY AND THEREAFTER THE ASSESSM ENT WAS FRAMED UNDER SECTION 143(3) ITA NO 1987/AHD/2011 . A.Y. 2008 - 09 2 VIDE ORDER DATED 30.12.2010 AND THE TOTAL INCOME WAS DETERMINED AT RS. 4,58,030/ - . AGGRIEVED BY THE ORDER OF A.O., ASSESSEE CARRIED THE MATTER BEFORE CIT(A) WHO VIDE ORDER DATED 27.05.2011 ALLOWED THE APPEAL OF THE ASSE SSEE. AGGRIEVED BY THE AFORESAID ORDER OF CIT(A), REVENUE IS NOW IN APPEAL BEFORE US AND HAS RAISED THE FOLLOWING GROUNDS; - 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE ID. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.10,96,401/ - M ADE BY THE A.O. U/S.68 OF THE ACT DESPITE THE FACT THAT THE ASSESSEE FAILED TO SUBMIT THE COPIES OF PAN & INCOME TAX RETURN OF ' N. S. JHAVERI & OTHERS' AND THUS FAILED TO PROVE THE IDENTITY AND CREDITWORTHINESS OF ' N. S. JHAVERI & OTHERS' AND GENUINENESS OF THE UNSECURED LOAN OF RS.10,96,401/ - . 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE ID.CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 10,96,401/ - MADE BY THE A.O. U/S 68 OF THE ACT DESPITE THE FACT THAT NO INDEPENDENT BANK ACCOUNT WAS FOUND IN THE NAME OF ' N. S. JHAVERI & OTHERS' TO SHOW THE TRANSACTION OF UNSECURED LOAN RECEIVED OF RS.10,96,401/ - 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW , THE ID.CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.10,96,401/ - MADE BY THE A.O. U/S 68 OF THE ACT AFTER ADMITTING THE SUBMISSION OF A.R. THAT ' N. S. JHAVERI & OTHERS' A/C IS A NOMENCLATURE USED BY THE APPELLANT AND OTHER FAMILY MEMBERS FOR IDENTIFICATION OF COMMON FAMILY FUND AND HAS NO INDEPENDENT EXISTENCE OF AOP OR HUF . 4. BEFORE US, LD. D.R. SUBMITTED THAT THOUGH VARIOUS GROUNDS ARE RAISED BUT THE ISSUE IS ONLY WITH RESPECT TO DELETION OF ADDITION OF RS. 10,96,401/ - . 5. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, A.O NOTICED THAT ASSESSEE HAD STATED TO HAVE RECEIVED UNSEC URED LOAN FROM N.S. JHAVERI AND ORS. AND THE LOAN AM OUNT OUTSTANDING AT THE YEAR END WAS RS. 2 7,61,790/ - THE OPENING BALANCE IN THE ACCOUNT WAS RS. 16,65,389/ - AND THUS THERE WAS ADDITION OF RS. 10,96,401/ - . A.O NOTED THAT IN A.Y. 2007 - 08, THE A.O HAD NOT ED THAT N.S. JHAVERI AND ORS. DID NOT EXIST AS PER THE LEGAL NORMS AND SINCE THE IDENTITY AND CREDITWORTHINESS WAS NOT FOUND EXPLAINED BY THE ASSESSEE, THE AMOUNT OF RS. 16,65 ,389/ - WAS ADDED TO THE INCOME IN A.Y. 07 - 08 . HE THEREFORE FOR SIMILAR REASONS, I N THE YEAR UNDER CONSIDERATION MADE ADDITION ITA NO 1987/AHD/2011 . A.Y. 2008 - 09 3 OF RS. 10,96,401/ - . AGGRIEVED BY THE ORDER OF A.O., ASSESSEE CARRIED THE MATTER BEFORE CIT(A) WHO DELETED THE ADDITION BY HOLDING AS UNDER: - 6. I HAVE GONE THROUGH THE ASSESSMENT ORDER AS WELL AS THE SUBMISSION A ND EXPLANATION FILED BY THE APPELLANT. IT IS GATHERED FROM THE RECORDS THAT THE APPELLANT SHRI SAURABH JHAVERI IS A SON OF SHRI USHAKANT JHAVERI AND THE SAID SHRI USHAKANT JHAVERI IS ONE OF THE CO - OWNERS OF JOINT FAMILY FUND KEPT IN VARIOUS BANK ACCOUNTS W HICH FUND WAS RECEIVED FROM SALE PROCEEDS OF LAND SOLD BY THESE CO - OWNERS AT RS. 20.50 CRORES IN F.Y. 2005 - 06 RELEVANT TO A.Y. 06 - 07 IN AND OUT OF THESE BANK ACCOUNTS, THE IMPUGNED LOAN AMOUNT W AS R ECEIVED BY THE APPELLANT. ALL THE CO - OWNERS, IN THEIR IND IVIDUAL CAPACITY, ARE REGULAR ASSESSE ES AND HAD PAID TAX ON THE LONG TERM CAPITAL GAIN WHICH HAD ARISEN IN A.Y. 2006 - 07. OUT OF THE SALE PROCEEDS OF LAND, SOME AMOUNT WERE DISTRIBUTED BY THE CO - OWNERS AND SOME AMOUNT WERE KEPT IN BANK ACCOUNTS FOR THEIR CO MMON PURPOSES. SINCE BANKS WERE RELUCTANT TO OPEN SAVINGS ACCOUNT IN THE NAME OF ALL THE JOINT OWNER S, THE BANK ACCOUNTS WERE KEPT IN THE NAMES OF SOME OF THE CO - OWNERS OF THE FAMILY MEMBERS. IT APPEARS FROM THE ORDER THAT THE APPELLANT HAD DULY EXPLAINED THE CASE DURING THE ASSESSMENT PROCEEDINGS AND ALSO IN THE REPLY TO SHOW CAUSE NOTICE AND HAD ALSO SUBMITTED VARIOUS DETAILS REGARDING THE SOURCE OF FUND OF THE IMPUGNED LOAN. IT SEEMS THAT THE ASSESSING OFFICER HAS FAILED TO UNDERSTAND THE FACTS OF THE CA SE IN RIGHT PERSPECTIVE. HE FAILED TO UNDERSTAND THE FACT THAT 'N. S. JHAVERI & OTHERS'' WAS A NOMENC LATURE USED BY THE APPELLANT AND OTHER FAMILY MEMBERS FOR IDENTIFICATION OF COMMON FAMILY FUND HAVING JOINT OWNERSHIP OF EACH MEMBER TO THE EXTENT OF HIS / HER OWN SHARE AND THE SAID 'N.S, JHAVERI & OTHERS' WAS NOT ANY ASSOCIATION OF PERSONS OR HINDU UNDIVIDED FAMILY BUT THE SAID NOMENCLATURE WAS REPRESENTING A COMMON FUND JOINTLY OWNED BY DIFFERENT CO - OWNERS IN WHICH THEY HAD THEIR RESPECTIVE SHARE AND FOR THE SAID SOURCE OF FUND EACH CO - OWNER HAD ALREADY PAID TAX ON CAPITA! GAIN IN THE ASSESSMENT YEAR 2006 - 07. THE AO WRONGLY PRESUMED THAT THE BANK ACCOUNT IN THE NAME OF 'N.S. JHAVERI & OTHERS' WAS NOT OPENED AS THERE WAS NO PAN BUT HE FAILED TO APPRECIATE T HAT THERE WAS NO AOP OR HUF LIKE 'N.S. JHAVERI &. OTHERS' AND IT WAS A JOINT OWNERSHIP FUND OF FAMILY MEMBERS HEADED BY SHRI N.S. JHAVERI WHICH WAS SEPARATELY KEPT IN A JOINT ACCOUNT OF BANKS AND THEREFORE, FOR THE SAKE OF IDENTITY, THE COMMON FUND WAS CAL LED 'N.S. JHAVERI &. OTHERS'. IT IS OBSERVED FROM THE ASSESSMENT ORDER THAT THE APPELLANT HAD PROVIDED THE NAMES AND PAN OF ALL THE CO - OWNERS AND HAD ALSO SUBMITTED VARIOUS BANK STATEMENTS FROM WHERE THE AMOUNT WAS RECEIVED BY THE APPELLANT AND HAD, ALSO E XPLAINED THE FACTS OF THE CASE IN DETAIL WITH CLARIFICATION ABOUT THE JOINT FAMILY FUND AND THEREFORE, I AM NOT INCLINED TO ACCEPT THE CONTENTION OF THE ASSESSING OFFICER THAT THE IDENTITY AND CREDITWORTHINESS OF THE LOAN OBTAINED WAS NOT FOUND EXPLAINED. FACED WITH THE SIMILAR SITUATION IN APPEAL FOR A,Y, 2007 - 08 I HAD DELETED THE ADDITION MADE U/S. 68 - OF THE ACT IN RESPECT OF LOAN FROM N.S, JHAVERI & OTHER ACCOUNT' VIDE ORDER DATED 26 - 10 - 2010 IN APPEAL NO. CAS / V / 128 / 09 - 10, AS IN THE EARLIER YEAR, TH E APPELLANT HAD CLEARLY ESTABLISHED THE IDENTITY OF EACH CO - OWNERS AND ALSO PROVIDED THEIR PAN AND ALSO SUBMITTED VARIOUS BANK STATEMENTS TO ESTABLISH THE IDENTITY, SOURCE, CREDITWORTHINESS AND GENUINENESS OF TRANSACTION AND THEREFORE THE IMPUGNED LOAN AMO UNT OF RS. 10,96,401/= CANNOT BE CALLED UNEXPLAINED AND THERE IS NO JUSTIFICATION IN MAKING .ADDITION OF THE SAID AMOUNT U/S. 68 OF THE ACT. HENCE THE ADDITION OF RS. 10,96,401/ - IS HEREBY DELETED AND THIS GROUND OF APPEAL IS ALLOWED. ITA NO 1987/AHD/2011 . A.Y. 2008 - 09 4 6. AGGRIE VED BY THE ORDER OF CIT(A), REVENUE IS NOW IN APPEAL BEFORE US. 7. BEFORE US, LD. D.R. RELIED ON THE ORDER OF A.O. ON THE OTHER HAND LD. A.R. SUBMITTED THAT SIMILAR ADDITION WAS MADE BY A.O IN A.Y. 07 - 08 AND WHICH WAS DELETED BY CIT(A) AND AGAINST THE ORDER OF CIT(A) FOR A.Y. 2007 - 08 , REVENUE HAD PREFERRED APPEAL BEFORE HON BLE TRIBUNAL. HON BLE TRIBUNAL IN ITA NO. 82/AHD/2011 ORDER DATED 30.01.2014 DISMISSED THE APPEAL OF THE REVENUE. HE THEREFORE SUBMITTED THAT SINCE THE FACTS OF THE YEAR UNDER APPEAL ARE IDENTICAL TO THAT OF 2007 - 08, THE PRESENT APPEAL OF THE REVENUE BE ALSO DISMISSED. HE THUS SUPPORTED THE ORDER OF LD. CIT(A). 8. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. WE FIND THAT IDENTICAL ADDITION ON ACCOUNT OF LOAN IN TH E NAME OF N.S. J HAVERI AND ORS WAS MADE BY A.O IN A.Y. 07 - 08 AND WHICH WAS DELETED BY LD. CIT(A) AND T HE ACTION OF LD. CIT(A) WAS CONFIRMED BY THE CO - ORDINATE BENCH OF TRIBUNAL IN ITA NO. 82/AHD/2011 ORDER DATED 30.01.2014 BY HOLDING AS UNDER: - 3. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. WE FIND THAT THE AO MADE ADDITION ON THE BASIS THAT N.S.JHAVERI & OTHERS DO NOT EXIST AS PER THE LEGAL NORMS. THE AO DID NOT ACCEPT THE FACT THAT AN UNSECURED LOAN FROM N.S.JHAVERI & OTHERS WAS OBTAINED. WE FIND THAT THE ID.CIT(A) HAS GIVEN A FINDING ON FACT THAT THE ASSESSEE HAD CLEARLY ESTABLISHED THE IDENTITY OF EACH CO - OWNERS AND ALSO PROVIDED THEIR PANS AND ALSO SUBMITTED VARIOUS BANK STATEMENTS TO ESTABLISH THE IDENTITY, SOURCE, CREDITWORTHINESS AND GENUINENESS OF TRANSACTION. THIS FINDING OF THE ID.CIT(A) COULD NOT BE CONTROVERTED BY THE REVENUE BY PLACING ANY CONTRARY MATERIAL ON RECORD, THEREFORE IN VIEW OF THE UNREBUTTED FINDI NG OF THE ID.CIT(A) COUPLED WITH FACT THAT THE ASSESSEE HAS DEMONSTRATED BY WAY OF CASH FLOW STATEMENT ABOUT THE SOURCE FROM WHERE THE MONEY WAS TRANSFERRED AND ALSO THE GENUINENESS OF THE TRANSACTION. THEREFORE, WE DO NOT FIND ANY INFIRMITY IN THE ORDER O F THE ID.CIT(A), THE SAME IS HEREBY UPHELD. THUS, FIRST GROUND OF THE REVENUE'S APPEAL IS REJECTED. SINCE THE REMAINING GROUND NOS.2 & 3 ARE INTER - CONNECTED WITH THE FIRST GROUND OF APPEAL, THEREFORE THE SAME NEED NO SEPARATE ADJUDICATION. ITA NO 1987/AHD/2011 . A.Y. 2008 - 09 5 9. BEFORE US, REVEN UE HAS NOT BROUGHT ANY DISTINGUISHABLE FEATURE IN THE FACTS OF THE CASE FOR THE YEAR UNDER APPEAL AND THAT OF A.Y. 2007 - 08 NOR COULD IT CONTROVERT THE FINDINGS OF LD. CIT(A). WE THEREFORE FIND NO REASON TO INTERFERE WITH THE O RDER OF LD. CIT(A) AND THUS TH E GROUND S OF REVENUE ARE DISMISSED. 10. IN THE RESULT, THE APPEAL OF REVENUE IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 13 - 02 - 201 5 . SD/ - SD/ - (KUL BHARAT ) (ANIL CHATURVEDI) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD. TRUE COPY RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD F ILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AHMEDABAD