Aslam Isamil Teli, Jalgaon V. Income-tax Officer,

ITA 2147/PUN/2014

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 7503 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 8 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-08-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 24-05-2017
• Assessment Year: 2010-2011
• Appeal Filed On: 04-12-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Source of fund
• Section: 131; 68; 6

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, PUNE . , , , BEFORE SHRI D. KARUNAKARA RAO, AM AND SHRI VIKAS AWASTHY, JM . / ITA NO . 2147 /P U N/201 4 / ASSESSMENT YEAR : 20 10 - 11 ASLAM ISMAIL TELI, ASHA COMPLEX, KHADKA ROAD, BHUSAWAL, DISTT. - JALGAON PIN CODE 425201 PAN : AELPT0874J ....... / APPELLANT / V/S. THE INCOME TAX OFFICER, WARD 2 (1), JALGAON / RESPONDENT . / ITA NO . 2160 /PUN/2014 / ASSESSMENT YEAR : 20 10 - 11 THE INCOME TAX OFFICER, WARD 2(1), JALGAON ....... / APPELLANT / V/S. ASLAM AHMED ISMILE TELI, S. NO. 12, PLOT NO. 48, ASHA COMPLEX, KHADKA ROAD, BHUSAWAL, DISTT. - JALGAON PIN CODE 425201 PAN : AELPT0874J / RESPONDENT ASSESSEE BY : S HRI PRAMOD SHINGTE REVENUE BY : SHRI AJAY MODI / DATE OF HEARING : 23 - 0 8 - 2017 / DATE OF PRONOUNCEMENT : 30 - 0 8 - 2017 2 ITA NO S. 2147 & 2160/PUN/2014, A.Y. 2010 - 11 / ORDER PER VIKAS AWASTHY, JM : TH ESE CROSS APPEALS BY THE ASSESSEE AND THE DEPARTMENT ARE DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) - 2, NASHIK DATED 18 - 09 - 2014 FOR THE ASSESSMENT YEAR 2010 - 11. 2. THE BRIEF FACTS OF THE CASE AS EMANATING FROM RECORDS ARE : THE ASSESSEE FILED HIS RETURN OF INCOME FOR THE IMPUGNED ASSESSMENT YEAR ON 30 - 12 - 2010 DECLA RING TOTAL INCOME OF RS.1,58,260/ - . DURING THE COURSE OF SCRUTINY ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HAS OBTAINED UNSECURED LOANS TO THE TUNE OF RS.69,00,000/ - FROM 8 PERSONS. ALL THE 8 CREDITORS ARE CLOSELY RELATED TO ASSESSEE. THE ASSESSING OFFICER AFTER VERIFYING THE CREDENTIALS OF CREDITORS, DOCUMENTS ON RECORD OBSERVED THAT THE CREDITORS HAVE NO CAPACITY TO ADVANCE THE LOANS. THE ASSESSING OFFICER DISBELIEVED THE DETAILS FURNISHED BY THE ASSESSEE QUA UNSECURED LOAN CREDITORS AND MADE ADDITION OF RS.69,00,000/ - IN THE HANDS OF THE ASSESSEE , AS INCOME OF THE ASSESSEE FROM UNDISCLOSED SOURCES. AGGRIEVED BY THE ASSESSMENT ORDER DATED 26 - 03 - 2013, THE ASSESSEE FILED APPEAL BEFORE THE COMMISSIONER OF INCOME TAX (APP EALS). THE COMMISSIONER OF INCOME TAX (APPEALS) AFTER EXAMINING THE DOCUMENTS ON RECORD DELETED THE ADDITION IN RESPECT OF UNSECURED LOANS RECEIVED FROM 7 CREDITORS AND CONFIRMED THE ADDITION OF RS.9,00,000/ - IN RESPECT OF LOAN AMOUNT RECEIVED FROM SMT. N IYAMAT BI. SALIM TELI. AGAINST THE FINDINGS OF COMMISSIONER OF INCOME TAX (APPEALS) IN DELETING THE ADDITION OF RS.60,00,000/ - MADE BY ASSESSING OFFICER U/S. 68 OF THE ACT , T HE REVENUE 3 ITA NO S. 2147 & 2160/PUN/2014, A.Y. 2010 - 11 IS IN APPEAL. THE ASSESSEE IN APPEAL HAS ASSAILED THE FINDINGS OF COM MISSIONER OF INCOME TAX (APPEALS) IN CONFIRMING THE ADDITION OF RS.9,00,000/ - ON ACCOUNT OF UNPROVED UNSECURED CREDITOR. 3. SHRI PRAMOD SHINGTE APPEARING ON BEHALF OF THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAD TAKEN LOANS OF RS.69,00,000/ - FROM 8 CREDITORS. THE LD. AR CONTENDED THAT THE ASSESSEE HAS PRODUCED 7 CREDITORS BEFORE THE ASSESSING OFFICER. THE ASSESSING OFFICER RECORDED THE STATEMENT S OF ALL THE 7 CREDITORS ON OATH U/S. 131 OF THE ACT. ALL THE CREDITORS ADMITTED THAT THEY HAVE ADVANCED LOAN AMOUNTS TO THE ASSESSEE. THE CREDITORS HAVE ADVANCED LOANS TO THE ASSESSEE THROUGH BANKING CHANNEL AND ALL THE CREDITORS EXCEPT ONE I.E. SMT. NIYAMAT BI. SALIM TELI HAVE FILED REGULAR RETURN OF INCOME AND HAVE DISCLOSED THE AMOUNT ADVANCED AS LOAN T O THE ASSESSEE IN THEIR RESPECTIVE RETURN OF INCOME. THE LD. AR ADMITTED THAT THOUGH ALL THE CREDITORS ARE CLOSELY RELATED TO ASSESSEE BUT ALL OF THEM HAVE THEIR INDEPENDENT SOURCE OF INCOME. THEY ARE EITHER ENGAGED IN MILK BUSINESS AND/OR HAVE RENTAL IN COME. 3.1 IN RESPECT OF SMT. NIYAMAT BI. SALIM TELI THE LD. AR SUBMITTED THAT THOUGH SHE DID NOT APPEAR BEFORE THE ASSESSING OFFICER , H OWEVER, SHE HAS FILED AFFIDAVIT CONFIRMING ADVANCING OF LOAN TO THE TUNE OF RS.9,00,000/ - TO THE ASSESSEE. THE LD. AR CONTENDED THAT THE COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN NOT TAKING INTO CONSIDERATION THE SWORN AFFIDAVIT FILED BY SMT. NIYAMAT BI. SALIM TELI. THE ASSESSEE HAS RECEIVED LOAN AMOUNT OF RS.9,00,000/ - FROM HER THROUGH CHEQUE. 3.2 THE LD. AR F URTHER SUBMITTED THAT THE ENTIRE AMOUNT OF RS.69,00,000/ - RECEIVED BY ASSESSEE HAS BEEN REPAID TO ALL THE CREDITORS FOR THE FINANCIAL YEARS 2009 - 10 TO 2012 - 13. THIS FACT HAS BEEN RECORDED BY 4 ITA NO S. 2147 & 2160/PUN/2014, A.Y. 2010 - 11 COMMISSIONER OF INCOME TAX (APPEALS) IN HIS ORDER WHILE DELETING THE ADDITIONS. 4. ON THE OTHER HAND SHRI AJAY MODI REPRESENTING THE DEPARTMENT VEHEMENTLY DEFENDED THE ASSESSMENT ORDER IN MAKING THE ADDITION OF RS.69,00,000/ - U/S. 68 OF THE ACT. THE LD. DR SUBMITTED THAT THE ASSESSEE HAS NOT BEEN ABLE TO SHOW CREDI TWORTHINESS OF THE CREDITORS WHO HAVE EXTENDED THE LOAN TO THE ASSESSEE. THE LD. DR CONTENDED THAT MAJORITY OF CREDITORS ARE LADIES WHO ARE NOT HAVING INDEPENDENT SOURCE OF INCOME. THE ASSESSEE HAS NOT BEEN ABLE TO SHOW THE SOURCE OF FUNDS CREDITED IN TH E SAVING BANK ACCOUNT OF THE CREDITORS JUST BEFORE ADVANCING OF LOAN TO THE ASSESSEE. THE LD. DR PRAYED FOR REVERSING THE FINDINGS OF COMMISSIONER OF INCOME TAX (APPEALS) AND UPHOLDING THE ASSESSMENT ORDER. 5. W E HAVE HEARD THE SUBMISSIONS MADE BY THE R EPRESENTATIVES OF RIVAL SIDES AND HAVE PERUSED THE ORDERS OF THE AUTHORITIES BELOW . THE ASSESSEE HAS ACCEPTED UNSECURED LOANS TO THE TUNE OF RS.69,00,000/ - FORM 8 CREDITORS. UNDISPUTEDLY, LOAN AMOUNT HAS BEEN RECEIVED BY ASSESSEE THROUGH ACCOUNT PAYEE CH EQUES. ALL THE LOAN CREDITORS ARE CLOSELY RELATED TO ASSESSEE. THE LIST OF CREDITORS AND THE LOAN AMOUNT ADVANC ED BY THEM ARE AS UNDER : SR. NO. NAME LOAN AMOUNT ACCEPTED IN FY 2009 - 10 1 REHMAT BI IBRAHIM TELI 13,00,000/ - 2 NAZNIN BI ASLAM TELI 4,00,000/ - 3 SABINA BI IQBAL TELI 8,00,000/ - 4 RAISA BI RASHID TELI 9,00,000/ - 5 SAIDA BI RAFIQUE TELI 9,00,000/ - 6 NAJMA BI IQBAL TELI 8,00,000/ - 7 REHANA BI MOHAMAD TELI 9,00,000/ - 8 NIYAMAT BI SALIM TELI 9,00,000/ - TOTAL 69,00,000/ - 5 ITA NO S. 2147 & 2160/PUN/2014, A.Y. 2010 - 11 6. UNDISPUTEDLY, THE ASSESSEE HAS PRODUCE D ALL THE CREDITORS EXCEPT SMT. NIYAMAT BI. SALIM TELI BEFORE THE ASSESSING OFFICER. THE STATEMENTS OF CREDITORS WERE RECORDED ON OATH U/S. 131 OF THE ACT. ALL THE CREDITORS SUPPORTED THE CASE OF ASSESSEE. THE COMMISSIONER OF INCOME TAX (APPEALS) IN THE IMPUGNED ORDER HAS OBSERVED THAT THE ASSESSEE HAS FILED SUMMARY OF RE PAYMENTS OF LOANS ALONG WITH BANK PASSBOOK / STATEMENT S OF LOAN CREDITORS SHOWING REPAYMENT OF LOAN TO ALL THE ABOVE 8 CREDITORS. OSTENSI BLY, THE ASSESSEE HAD ALSO FURNISHED INCOME TAX RECORDS/BANK PASSBOOK / STATEMENT AND OTHER RELEVANT DOCUMENTS OF THE LOAN CREDITORS FOR THE PERIOD RELEVANT TO THE ASSESSMENT YEARS 2009 - 10 AND 2010 - 11. THE COMMISSIONER OF INCOME TAX (APPEALS) AFTER EXAMININ G THE AFORESAID DOCUMENTS DELETED THE ADDITION IN RESPECT OF 7 OUT OF 8 CREDITORS FROM WHOM LOAN AGGREGATING TO THE TUNE OF RS.60,00,000/ - WAS RECEIVED BY ASSESSEE. THE COMMISSIONER OF INCOME TAX (APPEALS) CONFIRMED THE ADDITION OF RS.9,00,000/ - IN RESPEC T OF LOAN RECEIVED BY ASSESSEE FROM SMT. NIYAMAT BI. SALIM TELI ON THE GROUND THAT THE ASSESSEE HAS NOT BEEN ABLE TO SUBSTANTIATE HER CREDITWORTHINESS AS SHE IS NOT FILING RETURN OF INCOME . 7. THE REVENUE HAS PRIMARILY ASSAILED THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) IN DELETING THE ADDITIONS ON THE GROUND THAT THE ASSESSEE HAS FAILED TO DEMONSTRATE CREDITWORTHINESS OF THE CREDITORS. THE LD. AR OF ASSESSEE HAS FILE D BEFORE US CHART SHOWING THE SOURCE OF FUNDS OF THE CREDITORS. THE SAME IS REP RODUCED HERE - IN - BELOW : SR. NO. NAME LOAN AMOUNT ACCEPTED IN FY 2009 - 10 REFERENCE OF EARLIER YEARS SOURCES 1 REHMAT BI IBRAHIM TELI 13,00,000/ - FDR OF RS.13,50,000/ - WITH BHUSAWAL JANATA URBAN CO - OP. SOC LTD. BROKEN ON 15/07/2009, CERTIFICATE ENCLOSED AS ANNEXURE NO. 1 2 NAZNIN BI ASLAM TELI 4,00,000/ - FDR OF RS.4,50,000/ - WITH BHUSAWAL JANATA URBAN CO - OP. SOC LTD. BROKEN ON 15/07/2009, CERTIFICATE ENCLOSED AS PAGE NO. 60 OF PAPER BOOK 6 ITA NO S. 2147 & 2160/PUN/2014, A.Y. 2010 - 11 3 SABINA BI IQBAL TELI 8,00,000/ - MONEY DEPOSITED IN BANK ACCOUNT OUT OF CLOSING CASH BALANCE AS PER BALANCE SHEET AS ON 31/03/2009, PLEASE REFER PAGE NO. 120 OF PAPER BOOK 4 RAISA BI RASHID TELI 9,00,000/ - MONEY DEPOSITED IN BANK ACCOUNT OUT OF CLOSING CASH BALANCE AS PER BALANCE SHEET AS ON 31/03/2009, PLEASE REFER PAGE NO. 105 OF PAPER BOOK 5 SAIDA BI RAFIQUE TELI 9,00,000/ - MONEY DEPOSITED IN BANK ACCOUNT OUT OF CLOSING CASH BALANCE AS PER BALANCE SHEET AS ON 31/03/2009, PLEASE REFER PAGE NO. 75 OF PAPER BOOK 6 NAJMA BI IQBAL TELI 8,00,000/ - MONEY DEPOSITED IN BANK ACCOUNT OUT OF CLOSING CASH BALANCE AS PER BALANCE SHEET AS ON 31/03/2009, PLEASE REFER PAGE NO. 120 OF PAPER BOOK 7 REHANA BI MOHAMAD TELI 9,00,000/ - CLOSING CASH BALANCE AS PER BALANCE SHEET AS ON 31/03/2009, PLEASE RE FER PAGE NO. 135 OF PAPER BOOK 8 NIYAMAT BI SALIM TELI 9,00,000/ - MONEY DEPOSITED OUT OF PAST SAVINGS ALONG WITH THE ABOVE CHART THE ASSESSEE HAS FILED CERTIFICATE FROM BHUSAWAL URBAN CREDIT SOCIETY LTD. DATED 01 - 04 - 2010 INDICATING THAT SMT. REHMAT BI TELI HAD FIXED DEPOSIT OF RS.13,50,000/ - WHICH WERE ENCASHED PRE - MATURE LY . HOWEVER, IN RESPECT OF OTHER LOAN CREDITORS NO SUCH DETAILS WERE FURNISHED BY THE ASSESSEE . THE LD. AR OF ASSESSEE STATED AT THE BAR TH AT HE CAN PRODUCE THE EVIDENCE TO SHOW THAT ALL THE CREDITORS HAD SUFFICIENT SOURCE AND MEANS FOR ADVANCING LOAN TO THE ASSESSEE AND BEFORE ISSUING CHEQUE TOWARDS ADVANCING OF LOAN TO THE ASSESSEE, THE CREDITORS HAD DEPOSITED THE AMOUNT IN THEIR RESPECTIVE BANK ACCOUNTS FROM THEIR OWN SAVI NGS. 8. IN VIEW OF THE STATEMENT MADE BY THE LD. AR OF ASSESSEE TO SUBSTANTIATE THE SOURCE OF FUNDS OF THE CREDITORS , WE ARE OF CONSIDERED OPINION THAT THE PRESENT APPEALS NEED A REVISIT TO ASSESSING OFFICER. WE ARE REMITTING THE PRESENT APPEALS FOR TH E LIMITED PURPOSE OF VERIFICATION OF SOURCE OF FUNDS IN THE BANK ACCOUNTS OF LOAN CREDITORS. THE ASSESSING OFFICER SHALL CONSIDER THE RELEVANT DOCUMENTS FURNISHED BY ASSESSEE IN THIS 7 ITA NO S. 2147 & 2160/PUN/2014, A.Y. 2010 - 11 REGARD . IF THE ASSESSEE SUCCEEDS IN DEMONSTRATING THAT THE CREDITORS HA D SUFFICIENT SOURCE OF FUNDS FOR ADVANCING LOAN TO ASSESSEE , NO ADDITION U/S. 68 IS CALLED FOR. THE ASSESSING OFFICER WHILE RE - ADJUDICATING THE LIMITED ISSUE SHALL GRANT REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE , IN ACCORDANCE WITH LAW. 9. IN T HE RESULT, THE APPEAL OF THE ASSESSEE AND THE DEPARTMENT ARE ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED ON WEDNESDAY, THE 30 TH DAY OF AUGUST, 2017 . SD/ - SD/ - ( . /D. KARUNAKARA RAO ) ( / VIKAS AWASTHY) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE; / DATED : 30 TH AUGUST, 2017 RK / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 2, NASHIK 4. / THE CIT - 2, NASHIK 5. , , , / DR, ITAT, B BENCH, PUNE. 6. / GUARD FILE. // // TRUE COPY// / BY ORDER, / PRIVATE SECRETARY, , / ITAT, PUNE