Sonali Satyakumar Agarwal, Ahmedabad V. The Income tax Officer,Ward-2(3), Ahmedabad

ITA 2090/AHD/2012

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 1516 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 8 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-05-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 18-05-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 19-09-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: K B SONI AR
• Keywords: Unexplained cash credit
• Section: 68

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD , , ! BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER AND SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER ./ I.T.A. NO.2090/AHD/2012 ( / ASSESSMENT YEAR : 2008-09) SONALI SATYAKUMAR AGARWAL A-3, JAY COMPLEX 2 ND FLOOR NR.VITHALNAGAR 4 RASTA GIRDHARNAGAR AHMEDABAD-380 016 / VS. THE INCOME TAX OFFICER WARD-2(3) AHMEDABAD & ./ ./ PAN/GIR NO. : ADAPA 3889 N ( &) / APPELLANT ) .. ( *+&) / RESPONDENT ) &) / APPELLANT BY : SHRI K.B. SONI, AR *+&) - / RESPONDENT BY : SHRI DINESH SINGH, SR.DR . - / DATE OF HEARING 18/05/2016 /012 - / DATE OF PRONOUNCEMENT 27/05/2016 / O R D E R PER SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST T HE ORDER OF THE COMMISSIONER OF INCOME TAX(APPEALS)-6, AHMEDABAD DATED 27/08/2012 FOR THE ASSESSMENT YEAR 2008-09. ITA NO.2090/AHD /2012 SONALI SATYAKUMAR AGARWAL VS. ITO ASST.YEAR 2008-09 - 2 - 2. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERI ALS ON RECORD ARE AS UNDER:- 2.1. ASSESSEE IS AN INDIVIDUAL STATED TO BE DERIVI NG INCOME FROM OTHER SOURCES. SHE FILED HER RETURN OF INCOME FOR AY 200 8-09 ON 30/07/2008 DECLARING TOTAL INCOME OF RS.1,44,890/-. THE CASE WAS SELECTED FOR SCRUTINY ASSESSMENT AND THEREAFTER ASSESSMENT WAS FRAMED U/S.143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO A S THE ACT) VIDE ORDER DATED 22/10/2010 AND THE TOTAL INCOME WAS DETERMINE D AT RS. 7,03,390/-. AGGRIEVED BY THE ORDER OF THE AO, ASSESSEE CARRIED THE MATTER BEFORE THE LD.CIT(A), WHO GRANTED PARTIAL RELIEF TO THE ASSES SEE VIDE ORDER DATED 27/08/2012(IN APPEAL NO.CIT(A)-VI/ITO.WD.2(3)/256/1 0-11). AGGRIEVED BY THE ORDER OF THE LD.CIT(A), ASSESSEE I S NOW IN APPEAL BEFORE US AND HAS RAISED THE FOLLOWING GROUNDS OF A PPEAL:- 1. THE LD.CIT(A) HAS GROSSLY ERRED IN LAW AND ON FACT S IN PARTLY ALLOWING THE APPEAL. HE OUGHT TO HAVE ALLOWED THE APPEAL FULLY IN ACCORDANCE WITH THE GROUNDS OF APPEAL RAISED BY THE APPELLANT BEFORE HIM. 2. THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN CONF IRMING THE ADDITION OF RS.4,08,000/- MADE BY THE ASSESSING OFF ICER U/S.78 OF THE I.T.ACT, 1961. 3. THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS CONFIRM ING THE ADDING OF RS.4,08,000/- RELYING UPON REMAND REPORT OF ASSESSING OFFICER IN SPITE OF SUBMITTING CONTEMPORA RY EVIDENCE IN RESPECT OF THESE CASH LOANS. 4. THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS CONFIRM ING THE ADDITION OF RS.4,08,000/- OVERLOOKING THE FACT THAT CONFIRMATION LETTERS WERE SUBMITTED TO THE ASSESSING OFFICER IN RESPONSE TO THE INFORMATION CALLED U/S.133(6) OF THE IT ACT 1961 BY ALL LONEES. ITA NO.2090/AHD /2012 SONALI SATYAKUMAR AGARWAL VS. ITO ASST.YEAR 2008-09 - 3 - 5. THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS CONFIRM ING THE ADDITION OF RS.4,08,000/- OVERLOOKING THE FACT ALL THE LONEES ARE HAVING PERMANENT ACCOUNT NUMBERS AND MOST OF THE LO NEES ARE FILLING RETURN OF INCOME UNDER THE SAME JURISDICTIO N OF COMMISSIONER OF INCOME TAX. 3. BEFORE US, LD.AR SUBMITTED THAT THOUGH THE ASSES SEE HAS RAISED SEVERAL GROUNDS, BUT THE SOLITARY ISSUE IS WITH RES PECT TO ADDITION OF RS.4,08,000/-. 3.1. DURING THE COURSE OF ASSESSMENT PROCEEDINGS A ND ON PERUSAL OF THE BANK STATEMENT MAINTAINED BY THE ASSESSEE WITH ADAR SH CO-OPERATIVE BANK LTD., THE AO NOTICED THAT THE ASSESSEE HAD DEP OSITED CASH IN THE BANK ACCOUNT. THE ASSESSEE WAS ASKED TO EXPLAIN TH E SOURCE OF CASH DEPOSITS AND IN RESPONSE TO WHICH ASSESSEE FILED CO NFIRMATIONS FROM VARIOUS DEPOSITORS AND FURNISHED OTHER DETAILS. ON PERUSING THE DETAILS FURNISHED BY THE ASSESSEE, AO NOTICED THAT WITH RES PECT OF CASH DEPOSITS AGGREGATING TO RS.4,08,500/- FROM 23 DEPOSITORS (LI STED AT PAGE NO.6 OF THE ORDER). AO NOTICED THAT IN RESPECT TO 14 PART IES, ASSESSEE HAD NOT FILED COPIES OF ACKNOWLEDGEMENT OF THOSE DEPOSITORS INCOME TAX RETURNS, AND IN REMAINING 9 CASES, THE INCOME OF TH E DEPOSITORS WERE BELOW TAXABLE LIMIT. HE WAS THEREFORE OF THE VIEW THAT ASSESSEE HAD NOT FILED ANY EVIDENCE TO JUSTIFY THE SOURCE OF INCOME AND CREDITWORTHINESS OF THE DEPOSITORS NOR HAVE FILED BANK STATEMENT OR ANY EVIDENCE TO PROVE THE SOURCE OF INCOME. AO, THEREFORE, CONSIDERED THE SO URCE OF CASH LOAN RECEIVED BY THE ASSESSEE FROM THOSE 23 DEPOSITORS, AGGREGATING TO ITA NO.2090/AHD /2012 SONALI SATYAKUMAR AGARWAL VS. ITO ASST.YEAR 2008-09 - 4 - RS.4,08,500/- AS NOT EXPLAINED AND, ACCORDINGLY, CO NSIDERED IT HAS UNEXPLAINED CASH CREDIT IN TERMS OF SECTION 68 OF T HE ACT AND MADE ITS ADDITION. AGGRIEVED BY THE ORDER OF THE AO, ASSESS EE CARRIED THE MATTER BEFORE LD.CIT(A), WHO AFTER CONSIDERING THE SUBMISS IONS OF THE ASSESSEE, REMAND REPORT AND ASSESSEES REPLY TO THE REMAND RE PORT CONFIRMED THE ADDITION WITH RESPECT TO THE CASH DEPOSITED FROM 23 PARTIES AGGREGATING TO RS.4,08,000/- BY HOLDING AS UNDER:- 2.5 I HAVE CONSIDERED THE FACTS OF THE CASE; ASSE SSMENT ORDER, AO'S REMAND REPORT AND APPELLANT'S WRITTEN SUBMISSION AND REJOI NDER. AS REGARDS ADDITION OF RS 150000 MADE BY THE AO UNDER SECTION 68 IN RES PECT OF FOUR LENDERS, THE TRANSACTION IS BY CHEQUE AND LENDERS HAVE THEIR PAN . SINCE ASSESSING OFFICER DID NOT FIND ANY MISTAKE OR ANY POINT AGAINST THE E VIDENCES SUBMITTED BY THE APPELLANT, IT IS CLEAR THAT CREDIT IN RESPECT OF TH ESE PERSONS IS EXPLAINED. EVEN OTHERWISE, BY SUBMITTING COPY OF BANK STATEMENT, CO NFIRMATION AND PAN, APPELLANT HAS PROVED IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THESE CREDITORS. IN VIEW OF THE DECISION OF HONOURABLE SUPREME COURT IN THE CASE OF ORISSA CORPORATION LTD REPORTED IN 159 ITR, APPELLA NT DISCHARGED HER ONUS AND THEREFORE NO ADDITION UNDER SECTION 68 CAN BE M ADE ON ACCOUNT OF THIS. SINCE APPELLANT ESTABLISHED ALL THE THREE INGREDIEN TS REQUIRED UNDER SECTION 68 IN RESPECT OF THESE FOUR LENDERS AMOUNTING TO RS 15 0000, THE ADDITION IN RESPECT OF THE SAME IS NOT SUSTAINABLE. ACCORDINGLY , THE ADDITION OF RS. 1,50,000 MADE BY THE ASSESSING OFFICER UNDER SE CTION 68 IS DELETED. AS REGARDS OTHER CREDITS RECEIVED FROM 23 PARTIES I N CASH BELOW RS.20,000 EACH TOTALING TO RS 408000, APPELLANT SUBMITTED NAM ES AND ADDRESSES OF THE PARTIES AND PAN IN SOME OF THE CASES WITH CONFIRMAT IONS. HOWEVER IT IS NOT IN DISPUTE THAT TRANSACTIONS FROM THESE PARTIES ARE NOT BY CHEQUE AND THEREFORE THERE IS NO CONTEMPORARY EVIDENCE FOR GEN UINENESS OF THE TRANSACTION. ASSESSING OFFICER DURING REMAND REPORT VERIFIED SOM E OF THE LENDERS BY DEPUTING INSPECTOR AND FOUND THAT MOST O F THEM DID NOT HAVE ANY GENUINE SOURCE OF INCOME AND THEREFORE THEIR CREDIT WORTHINESS WAS ALSO IN DOUBT. SINCE APPELLANT DID NOT SUBMIT ANY CONTEMPOR ARY EVIDENCE IN RESPECT OF THESE CASH LOANS, GENUINENESS OF THE TRANSACTIONS I S NOT PROVED. WHETHER THESE CASH LOANS ARE REFLECTED IN THE RECORDS OF THE LEND ERS OR NOT WAS NOT SUBMITTED BY THE APPELLANT. WHEN THE LENDERS WERE HAVING BANK ACCOUNTS, WHY AND FOR ITA NO.2090/AHD /2012 SONALI SATYAKUMAR AGARWAL VS. ITO ASST.YEAR 2008-09 - 5 - WHAT PURPOSES TRANSACTION WAS DONE IN CASH IS NOT E XPLAINED. CONSIDERING ALL THESE FACTS, GENUINENESS OF THE TRANSACTIONS AND CR EDITWORTHINESS OF THE LENDERS AS FAR AS THESE LOAN TRANSACTIONS ARE CONCE RNED ARE NOT PROVED. THE DECISION OF APEX COURT IN THE CASE OF ORISSA CORPOR ATION IS NOT APPLICABLE IN RESPECT OF THESE LOANS SINCE THE TRANSACTIONS WERE BY CASH AND NOT BY CHEQUE AS DISCUSSED IN EARLIER PARA. CONSIDERING THIS, ADD ITION OF RS. 4,08,000 MADE BY THE ASSESSING OFFICER UNDER SECTION 68 IS CONFIR MED. 3.2. AGGRIEVED BY THE ORDER OF THE LD.CIT(A), ASSES SEE IS NOW IN APPEAL BEFORE US. 4. BEFORE US, LD.AR REITERATED THE SUBMISSIONS OF A O AND LD.CIT(A) AND FURTHER SUBMITTED THAT ASSESSEE HAS PROVED IDEN TITY, CREDITWORTHINESS AND GENUINENESS OF ALL THE CREDITORS WHO HAVE ADVAN CED LOANS IN CASH. HE FURTHER SUBMITTED THAT ITO ISSUED NOTICES U/S.13 3(6) TO ALL THE CREDITORS AND ALL THE CREDITORS CONFIRMED THE DEPOS ITS AND HAD PROVIDED THE DETAILS CALLED FOR. HE, THEREFORE, SUBMITTED T HAT CONFIRMATIONS FROM THE CREDITORS U/S.133(6) OF THE ACT ESTABLISHES THE IDENTITY AND GENUINENESS OF TRANSACTIONS. WITH RESPECT TO THE O BSERVATION OF THE AO WHEN WARD INSPECTOR WAS DEPUTED TO VERIFY THE IDENT ITY, GENUINENESS AND CREDITWORTHINESS OF THE PERSONS ALLEGED TO HAVE ADV ANCED THE MONEY TO THE ASSESSEE, FOUND THAT THEY DID NOT HAVE GENUINE SOURCE OF INCOME AND, THEREFORE, THEIR CREDITWORTHINESS WAS IN DOUBT, HE SUBMITTED THAT WHEN THE IDENTITY AND GENUINENESS OF TRANSACTIONS WERE E STABLISHED BY COMPLIANCE U/S.133(6) AND WHEN ALL THESE PARTIES WE RE HAVING PANS AND MOST OF THE PARTIES WERE FILING INCOME-TAX RETURNS AND THAT TOO THEIR JURISDICTION WAS WITH THE SAME AO, THEN MERELY ON T HE BASIS OF STATEMENT ITA NO.2090/AHD /2012 SONALI SATYAKUMAR AGARWAL VS. ITO ASST.YEAR 2008-09 - 6 - OF INSPECTOR, NO ADDITION COULD HAVE BEEN MADE. HE FURTHER SUBMITTED THAT THE DEPOSITORS WERE NOT GIVEN ANY OPPORTUNITY AND SUFFICIENT TIME TO SHOW EVIDENCE OF BUSINESS AND NO OPPORTUNITY OF CRO SS-EXAMINATION WAS GIVEN TO THE ASSESSEE. HE FURTHER SUBMITTED THAT C OPY OF AS-26 HAS ALSO BEEN FILED BY THE ASSESSEE. HE ALSO PLACED ON RECO RD THE CHART SHOWING DETAILS OF CREDITORS/DEPOSITORS ALONG WITH NECESSAR Y PROOF THAT WERE FILED BY THE ASSESSEE. HE THEREFORE SUBMITTED THAT CONSI DERING THE AFORESAID FACTS, NO ADDITION IS CALLED FOR. LD.SR.DR, ON THE OTHER HAND, SUPPORTED THE ORDER OF AO. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. THE ISSUE IN THE PRESENT CASE IS WITH RESPECT TO AD DITION FOR RS.4,08,000/- RECEIVED IN CASH BY THE ASSESSEE FROM VARIOUS PARTI ES, EACH DEPOSIT BEING LESS THAN RS.20,000/-. BEFORE US, IT IS ASSESSEES SUBMISSION THAT ASSESSEE HAD SUBMITTED THAT THE NAMES, ADDRESSES OF ALL THE PARTIES AND PANS AND ALSO COPY OF THE RETURN OF INCOME IN SOME CASES. I T IS ALSO A FACT THAT INFORMATION U/S.133(6) WAS CALLED BY THE AO FROM SO ME OF THE PARTIES. IT IS ALSO A FACT THAT AO HAD RELIED ON THE REPORT OF THE INSPECTOR TO CONCLUDE THAT THE DEPOSITORS DID NOT HAVE GENUINE S OURCE OF INCOME AND, THEREFORE, THEIR CREDITWORTHINESS WAS IN DOUBT. BE FORE US, IT IS ASSESSEES SUBMISSION THAT NO OPPORTUNITY TO CROSS-EXAMINE THE INSPECTOR WAS PROVIDED TO THE ASSESSEE. THE AFORESAID SUBMISSION OF THE ASSESSEE HAS NOT BEEN CONTROVERTED BY REVENUE BY PLACING ANY MAT ERIAL ON RECORD. IT ITA NO.2090/AHD /2012 SONALI SATYAKUMAR AGARWAL VS. ITO ASST.YEAR 2008-09 - 7 - IS A SETTLED LAW THAT THE RIGHT TO CROSS-EXAMINATIO N A WITNESS ADVERSE TO AN ASSESSEE IS AN INDISPENSIBLE RIGHT AND THE OPPORTUN ITY OF SUCH CROSS- EXAMINATION IS ONE OF THE CORNERSTONES OF NATURAL J USTICE AND THAT NO ADVERSE INFERENCE CAN BE DRAWN AGAINST A PARTY UNLE SS THE PARTY IS PUT ON NOTICE OF THE CASE MADE OUT AGAINST HIM. FURTHER , WHEN ASSESSEE HAS FURNISHED THE NAMES, ADDRESSES, PANS AND COPY OF RE TURN OF INCOME OF THE DEPOSITORS, WE ARE OF THE VIEW THAT ASSESSEE H AS DISCHARGED THE INITIAL ONUS CAST UPON AS REQUIRED BY THE PROVISIONS OF SEC TION 68 OF THE ACT. BEFORE US, THERE IS NO MATERIAL PLACED ON RECORD BY THE REVENUE TO DEMONSTRATE THAT THE SUBMISSIONS MADE BY THE ASSESS EE WERE INCORRECT OR FALSE. CONSIDERING THE TOTALITY OF THE AFORESAID F ACTS OF THE CASE, WE ARE OF THE VIEW THAT NO ADDITION IS CALLED FOR IN THE P RESENT CASE. THUS, GROUNDS OF ASSESSEES APPEAL ARE ALLOWED. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. THIS ORDER PRONOUNCED IN OPEN COURT ON 27 /05/2016 SD/- SD/- ( ) () (SHAILENDRA KUMAR YADAV) ( ANIL CHATUR VEDI ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD; DATED 27/ 05 /2016 5..,.../ T.C. NAIR, SR. PS ITA NO.2090/AHD /2012 SONALI SATYAKUMAR AGARWAL VS. ITO ASST.YEAR 2008-09 - 8 - !'#$%$' / COPY OF THE ORDER FORWARDED TO : 1. &) / THE APPELLANT 2. *+&) / THE RESPONDENT. 3. 678 9 / CONCERNED CIT 4. 9 ( ) / THE CIT(A)-6, AHMEDABAD 5. :;<*78 , 78 2 , 6 / DR, ITAT, AHMEDABAD 6. <>?. / GUARD FILE. / BY ORDER, +:* //TRUE COPY// / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD 1. DATE OF DICTATION .. 20.5.16 (DICTATION-PAD 11+ PAGES ATTACHED AT THE END OF THIS APPEAL-FILE) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 24.5.16/26.5.16 3. OTHER MEMBER 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S.30.5.16 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 30.5.16 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER