ITO 9(1)(4), MUMBAI V. FAY INVEST & TRADING P. LTD, MUMBAI

ITA 2190/MUM/2011

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 7585 (ITAT-MUMBAI)
• Duration Of Justice: 9 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-01-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Next Hearing Date: 07-06-2012
• Assessment Year: 2007-2008
• Appeal Filed On: 17-03-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHANTAM BOJE
• Assessee Lawyers: M P MAKHIJA
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH F BEFORE SHRI D.MANMOHAN (VP) & SHRI T.R.SOOD (AM) I.T.A.NO. 2190/MUM/2011 (ASSESSMENT YEAR : 2007-08) ITO-9(1)(4) ROOM NO. 224, AAYAKAR BHAVAN M.K. ROAD MUMBAI-400 020. VS. M/S. FAY INVEST & TRADING PVT. LTD. 2 ND FLOOR, JEWEL ARCADE WATER FIELD ROAD BANDRA WEST MUMBAI-400 050. PAN/GIR NO. : AAACG1593J APPLICANT RESPONDENT ASSESSEE BY : SHRI M.P. MAKHIJA DEPARTMENT BY : SHRI SHANTAM BOJE DATE OF HEARING : 5.1.2012 DATE OF PRONOUNCEMENT : 5.1.2012 ORDER PER D. MANMOHAN (VP) :- ADDITION OF ` 8,92,000/- MADE BY THE ASSESSING OFFICER U/S. 68 O F THE ACT HAVING BEEN SET ASIDE BY LEARNED CIT(A)-19, MUMBAI, REVENUE IS IN APPEAL BEFORE US. 2. CASE OF THE REVENUE IS THAT THE ASSESSEE-COMPANY HAD NOT SUBSTANTIATED ITS OWN EXPLANATION TO THE EFFECT THA T THE CREDITOR HAD SUFFICIENT BALANCE IN THE FIRM AND THAT THERE WAS A CTUAL TRANSFER OF AMOUNT TO THE ASSESSEE-COMPANY. 3. WE HAVE HEARD LEARNED DEPARTMENTAL REPRESENTATIV E AS WELL AS LEARNED COUNSEL FOR THE ASSESSEE AND CAREFULLY PERU SED THE RECORD. THE ASSESSEE IS A DEALER IN SHARES AND SECURITIES. DURI NG THE COURSE OF EXAMINATION OF DETAILS CONCERNING PREVIOUS YEAR REL EVANT TO A.Y. 2007-08 THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE-COM PANY HAD INTRODUCED AN AMOUNT OF ` 8,92,000/- WHICH IS STATED TO BE A LOAN TAKEN FROM MR. RAJPAL SETHI. THE ASSESSEE WAS ASKED TO EXPLAIN THE ENTRY AND SOURCE WITH CONFIRMATION. IN RESPONSE IT WAS SUBMITTED THA T IT IS A TRANSFER ENTRY FROM A CLOSED PARTNERSHIP FIRM; A BASIC DETAILS SUC H AS PAN ETC. WERE FURNISHED. THE ASSESSING OFFICER WAS OF THE VIEW TH AT THE PRELIMINARY M/S. FAY INVEST & TRADING PVT. LTD. 2 BURDEN IS UPON THE ASSESSEE TO PROVE THE SOURCE AND CREDITWORTHINESS OF THE CREDITOR AND IN THE ABSENCE OF PROVING LOAN TO THE HILT THE IMPUGNED AMOUNT WAS BROUGHT TO TAX U/S. 68 OF THE ACT. 4. AGGRIEVED THE ASSESSEE CONTENDED BEFORE THE LEAR NED CIT(A) THAT THE COMPANY DISCHARGED ITS BURDEN BY EXPLAINING SOU RCE OF LOAN AND ALSO STATED THAT THERE WAS SUFFICIENT BALANCE IN THE HAN DS OF THE CREDITOR. THUS THERE IS NO CASE FOR INVOKING PROVISIONS OF SE CTION 68. 5. HAVING REGARD TO THE CIRCUMSTANCES OF THE CASE, LEARNED CIT(A) DELETED THE ADDITION BY OBSERVING AS UNDER :- THE APPELLANT COMPANY HAD INDEED FURNISHED LETTER OF CONFIRMATION BEFORE THE ASSESSING OFFICER, WITH THE REQUISITE PARTICULARS SUCH AS ADDRESS AND PAN. THUS PRELIMINA RY EVIDENCE TO PROVE THE GENUINENESS OF THE TRANSACTION HAD IND EED BEEN FURNISHED BEFORE THE ASSESSING OFFICER. THE SAID CO NFIRMATION LETTER HAD NOT BEEN REJECTED. ALSO, THE EXPLANATION FURNIS HED BY THE APPELLANT COMPANY BEFORE THE ASSESSING OFFICER HAS NOT BEEN DOUBTED. MOREOVER, AS PER EXPLANATION FILED, IT IS SEEN THAT AMOUNT HAS BEEN BROUGHT IN THE BOOKS OF THE APPELLANT COMP ANY BY WAY OF TRANSFER FROM OTHER SISTER CONCERN I.E. M/S. BAAZ I NVESTMENT CORPORATION. IN THE LIGHT OF THE SAID EXPLANATION A ND ALSO IN THE LIGHT OF THE CONFIRMATION LETTER AS FURNISHED, IT I S HELD THAT APPELLANT HAS EXPLAINED WITH SUFFICIENT EVIDENCE TH E CREDIT AS APPEARING IN ITS BOOKS. THEREFORE, ADDITION UNDER S ECTION 68 IS NOT WARRANTED AND IS DIRECTED TO BE DELETED. 6. AGGRIEVED THE REVENUE IS IN APPEAL BEFORE US. LE ARNED DEPARTMENTAL REPRESENTATIVE DID NOT ASSAIL THE FIND INGS OF THE LEARNED CIT(A) THOUGH HE STRONGLY RELIED UPON THE ORDER OF THE ASSESSING OFFICER. 7. HAVING REGARD TO THE CIRCUMSTANCES OF THE CASE, WE ARE OF THE VIEW THAT THE ORDER PASSED BY LEARNED CIT(A) DOES NOT CA LL FOR INTERFERENCE. AS PRONOUNCED IN THE OPEN COURT, WE AFFIRM THE ORDER O F LEARNED CIT(A) AND DISMISS THE APPEAL FILED BY THE REVENUE. SD/- (T.R. SOOD) ACCOUNTANT MEMBER SD/- (D.MANMOHAN) VICE-PRESIDENT DATED : 5 TH JANUARY, 2012. M/S. FAY INVEST & TRADING PVT. LTD. 3 COPY TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A)-CONCERNED. 4. THE CIT, CONCERNED. 5. THE DR CONCERNED, MUMBAI 6. GUARD FILE BY ORDER TRUE COPY ASSTT. REGISTRAR, ITAT, MUMBAI PS