ITO 20(2)(2), MUMBAI V. MEENAL G. KARKERA, MUMBAI

ITA 2033/MUM/2009

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 8623 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 10 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-02-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 25-11-2010
• Assessment Year: 2005-2006
• Appeal Filed On: 02-04-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: HARIGOVIND SINGH
• Keywords: Unexplained cash credit

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES B : MUMBAI BEFORE SHRI D.MANMOHAN (VP) & SHRI B.PRAMOD KUMAR(A M) I.T.A. NO. 2033/MUM/2009 ASSESSMENT YEAR 2005-2006 ITO-20(2)(2) ROOM NO. 610, 6 TH FLOOR PIRAMAL CHAMBER, PAREL MUMBAI-400 012. VS. MS. MEENAL G. KARKERA 502, GANESH CHS LTD. MILITARY ROAD MAROL, ANDHERI (EAST) MUMBAI-400 059. PAN : AFWPK3263J (APPELLANT) (RESPONDENT) FOR APPELLANT : SHRI HARI GOVIND SINGH FOR RESPONDENT : NONE ORDER PER D. MANMOHAN, V.P. THIS IS AN APPEAL FILED AT THE INSTANCE OF THE REV ENUE. ADDITION OF RS. 30,43,511/-, MADE BY THE ASSESSING OFFICER U/S. 68 OF THE INCOME TAX ACT, 1961, HAVING BEEN DELETED BY LEARNED CIT(A), REVENU E IS IN APPEAL BEFORE US CONTENDING, INTERALIA, THAT THE FIRST APPELLATE AUT HORITY HAS NOT APPRECIATED THE FACTS AND CIRCUMSTANCES WITH REGARD TO FAILURE OF THE ASSESSEE IN FURNISHING PROPER EXPLANATION IN RESPECT OF DIFFERE NCE IN CAPITAL ACCOUNT, AS ON THE FIRST DAY OF THE PREVIOUS YEAR. 2. THOUGH NOTICE WAS SENT TO THE ASSESSEE BY REGIST ERED POST (AD CARD ON RECORD), NONE APPEARED ON BEHALF OF THE ASSESSEE. W E THEREFORE PROCEED TO DISPOSE OF THE APPEAL EX-PARTE, QUA THE ASSESSEE. L EARNED DR STRONGLY RELIED UPON THE ORDER PASSED BY THE ASSESSING OFFICER. 3. WE HAVE CAREFULLY PERUSED THE RECORD. FACTS NECE SSARY FOR DISPOSAL OF THE APPEAL ARE STATED IN BRIEF. ASSESSEE IS ENGAGED IN THE BUSINESS OF TRADING OF COMPACT DISCS IN THE NAME AND STYLE OF M/S. M.K. TRADERS. IN RESPECT OF THE PREVIOUS YEAR RELEVANT TO A.Y. 2005-06 SHE DECL ARED TOTAL INCOME OF RS. 1,07,538/- AND RETURN WAS ORIGINALLY PROCESSED U/S. 143(1) OF THE ACT BUT THEREAFTER REOPENED BY ISSUING NOTICE 143(2) WHEREI N THE ASSESSEE WAS CALLED UPON TO EXPLAIN THE DIFFERENCE BETWEEN THE CLOSING BALANCE IN THE PRECEDING MS. MEENAL G. KARKERA 2 YEAR AND THE OPENING CAPITAL ACCOUNT BALANCE OF THE CURRENT YEAR. ACCORDING TO THE ASSESSING OFFICER CAPITAL ACCOUNT OF A.Y. 20 04-05 SHOWS CLOSING BALANCE OF RS. 4,60,024/- WHEREAS OPENING BALANCE O F THE CURRENT YEAR SHOWS FIGURE OF RS. 35,03,535/-. IN THE ASSESSMENT COMPLETED U/S. 144 OF THE ACT THE ASSESSING OFFICER OBSERVED THAT THE ASS ESSEE HAS NOT FURNISHED DETAILS TO PROVE THE GENUINENESS OF INCREASE OF SUC H HUGE AMOUNT IN CAPITAL ACCOUNT AND THEREFORE BROUGHT TO TAX THE DIFFERENCE OF RS. 30,43,511/- AS UNEXPLAINED CASH CREDIT, U/S. 68 OF THE INCOME TAX ACT. 4. ON AN APPEAL FILED BY THE ASSESSEE, LEARNED CIT( A) CALLED FOR THE REMAND REPORT OF THE ASSESSING OFFICER, BASED UPON THE INFORMATION FURNISHED AT THE APPELLATE STAGE. IT MAY BE NOTICED THAT THE CASE OF THE ASSESSEE WAS THAT THE DIFFERENTIAL AMOUNT PERTAINS TO THE LOAN TAKEN FROM MEGHVEER COOPERATIVE BANK. THE ASSESSING OFFICER IN HIS REMAND REPORT MERELY STATES THAT THE ASSESSEE WAS NOT IN A POSITI ON TO PRODUCE THE BOOKS FOR VERIFICATION ON THE GROUND THAT THEY WERE DESTR OYED IN THE FLOOD ON 26.5.2005 AND DID NOT CONTRADICT THE CLAIM OF THE A SSESSEE WITH REGARD TO FACTUM OF LOAN TAKEN FROM COOPERATIVE BANK WHICH IS ALSO SUPPORTED BY BANK CERTIFICATE. UNDER THE CIRCUMSTANCES LEARNED C IT(A) DELETED THE ADDITION BY OBSERVING AS UNDER :- IN VIEW OF THE ABOVE AND DULY TAKING INTO CONSIDER ATION, THE REMAND REPORT OF THE ASSESSING OFFICER MENTIONED ABOVE, THE MATTER IS DI SPOSED OFF TAKING INTO CONSIDERATION THE FACTS AND EVIDENCES PLACED BEFORE THE UNDERSIGNED AS DISCUSSED ABOVE. I HAVE PERUSED BOTH THE BALANCE SHEETS OF TH E APPELLANT DATED 31.3.2004 AND 31.3.2005, FOR THIS PURPOSE AND THE SAME ARE PLACED ON RECORD. IN THE BALANCE SHEET DATED 31.3.2004,THE APPELLANT HAS GIVEN FULL BREAK UP OF CLOSING BALANCE OF CAPITAL ACCOUNT AND BANK BALANCE (LOAN A/CIT(A)), AS HER LI ABILITY ON THE SAME DATE WHICH IS REPRODUCED AS UNDER :- CAPITAL A/C . AS PER SCHEDULE-I .. 4,60,024.07 LOANS : OVERDRAFT WITH MEGHVEER CO-OP. BANK .. 23,61, 330.34 TERM LOAN FROM MEGHVEER CO-OP. BANK .. 6,81 ,181.00 ------------------------ 35,03,535.87 ------------------------ AS AGAINST THE ABOVE, THE BALANCE SHEET DATED 31.3. 2005, SHOWS THE OPENING BALANCE OF CAPITAL ACCOUNT OF RS. 35,03,535.57 AND NO LOAN AMOUNT IS REFLECTED THEREIN, WHICH MAKES IT EVIDENT THAT THE LOAN AMOUNTS DISCLOSED AS ON 31.3.2004 IS CLUBBED TOGETHER AS PART OF CAPITAL ACCOUNT AS ON 1.4.2004. THE BANK CERTIFICATE DATED 5.9.2008, MENTIONED ABOVE, EVIDENCES THAT THE SAID LOANS WERE OUTSTANDING AS ON 31.3.2004 AND MS. MEENAL G. KARKERA 3 THE LOAN ACCOUNT WAS CLOSED ONLY ON 16.10.2007. THE REFORE, IN VIEW OF THESE FACTS AND CIRCUMSTANCES, I FIND THAT THE ENTIRE ADDITION MADE BY THE ASSESSING OFFICER OF RS. 30,43,511/- ON THIS ACCOUNT IS DULY RECONCILED. ACC ORDINGLY, THE ASSESSING OFFICER IS DIRECTED TO DELETE THE SAME. IN THE RESULT, THIS GR OUND OF APPEAL IS ALLOWED. 5. AGGRIEVED, THE REVENUE IS IN APPEAL BEFORE US. I N OUR CONSIDERED OPINION ORDER PASSED BY LEARNED CIT(A) DOES NOT CAL L FOR ANY INTERFERENCE. ADMITTEDLY ASSESSEE HAS FURNISHED ACCEPTABLE MATERI AL BEFORE LEARNED CIT(A) IN SUPPORT OF HER PLEA THAT THE DIFFERENTIAL AMOUNT IS REFERABLE TO OVERDRAFT AND TERM LOAN FROM COOPERATIVE BANK. LEARNED CIT(A) HAS FOLLOWED PROPER PROCEDURE PRESCRIBED U/R. 46A WHILE ADMITTING EVIDE NCE AND HAS ALSO GRANTED OPPORTUNITY TO THE ASSESSING OFFICER IN THE FORM OF CALLING FOR THE REMAND REPORT. IN THE ABSENCE OF ANY MATERIAL TO CO NTRADICT THE CLAIM OF THE ASSESSEE LEARNED CIT(A) HAD DRAWN A CONCLUSION THAT THE IMPUGNED AMOUNT OF RS. 30,43,511/- CANNOT BE ADDED TO THE TOTAL INC OME U/S. 68 OF THE ACT. IN THE PECULIAR FACTS OF THE CASE WE DO NOT FIND ANY I NFIRMITY IN THE ORDER OF LEARNED CIT(A) AND THEREFORE DISMISS THE APPEAL FIL ED BY THE REVENUE. PRONOUNCED ACCORDINGLY IN THE OPEN COURT ON 8.2.201 1. SD/- SD/- (PRAMOD KUMAR) (D.MANMOHAN) ACCOUNTANT MEMBER VICE PRESIDENT MUMBAI, DATE 8 TH FEBRUARY, 2011 PS COPY TO :- 1. APPELLANT 2. RESPONDENT 3. CIT(A)-20, MUMBAI 4. ITO 20(2)-2, MUMBAI 5. DR B BENCH 6. GUARD FILE TRUE COPY BY ORDER ASST. REGISTRAR, ITAT, MUMBAI BENCHES MUMBAI.