NAGURAO MALKU GADGE, MUMBAI V. ITO 21(3)(4), MUMBAI

ITA 2278/MUM/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 8334 (ITAT-MUMBAI)
• Duration Of Justice: 11 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-03-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 17-01-2011
• Assessment Year: 2000-2001
• Appeal Filed On: 22-03-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 143(3)

Judgement Text

I.T.A NO.2278/ MUM/2010 SHRI NAGURAO MALKU GADGE 1 IN THE INCOME TAX APPELLATE TRIBUNAL, SMC BENCH, MUMBAI. BEFORE SHRI PRAMOD KUMAR, ACCOUNTANT MEMBER I.T.A NO.2278/ MUM/2010 ASSESSMENT YEAR: 2000-2001 SHRI NAGURAO MALKU GADGE. .. APPELLANT ROOM NO.12, MAKADWALA COMPOUND, NAGURAO GADGE CHAWL, HALAV POOL ROAD, JAISHANKAR CHOWK, KURLA, MUMBAI-70 PA NO.ADZPG 0550 H VS INCOME TAX OFFICER, WARD 21(3)(4) ,. RESPONDEN T MUMBAI. APPEARANCES: RAKESH JOSHI, FOR THE APPELLANT R.K.GUPTA, FOR THE RESPONDENT O R D E R 1. BY WAY OF THIS APPEAL, THE ASSESSEE HAS CALLED INTO QUESTION CORRECTNESS OF CIT(A)S ORDER DATED 7 TH JANUARY, 2010, IN THE MATTER OF ASSESSMENT UNDER SECTI ON 143(3) OF THE INCOME TAX ACT, 1961, FOR THE ASSESSMENT YEAR 2000-2001, ON THE FOLLOWING GROUND: ON THE FACTS AND CIRCUMSTANCES OF THE CASE AS WELL AS IN LAW, THE LD CIT (A) HAS ERRED IN CONFIRMING THE ACTION OF LD AO IN M AKING AN ADDITION OF ` . 2,70,250 ON ACCOUNT OF INCOME FROM UNDISCLOSED SOURC ES OF THE LOAN AMOUNTS GIVEN BY THE LATE FATHER OF THE APPELLA NT ON WHICH INTEREST IS EARNED WITHOUT CONSIDERING THE FACTS & CIRCUMSTANCES OF THE CASE. 2. BRIEFLY STATED THE MATERIAL FACTS ARE LIKE THIS. THE IMPUGNED ADDITION OF RS. 2,70,250 WAS MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNDISCLOSED INCOME. THE ASSESSEE DISCLOSED INTEREST INCOME OF RS. 64,680 IN RESPECT OF INTEREST ON LOANS I.T.A NO.2278/ MUM/2010 SHRI NAGURAO MALKU GADGE 2 GRANTED BY HIS LATE FATHER. HOWEVER, THE ASSESSEE COU LD NOT PROVE THE AUTHENTICITY OF THE PERSONS TO WHOM THE LOANS WERE GIVEN BY HIS LATE F ATHER. THE AMOUNT WORKED OUT BY THE ASSESSING OFFICER AS PRINCIPAL AMOUNT ON WHICH T HE ASSESSEE CLAIMS TO HAVE BEEN EARNED INTEREST, WAS ALSO ADDED TO ASSESSEES INCOME. AGGRIEVED, THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE CIT (A) BUT WITHOUT ANY SUCCESS. THE MATTER THUS TRAVELED BEFORE THE DIVISION BENCH OF THIS TRIBUN AL, WHICH REMITTED THE MATTER TO THE FILE OF THE ASSESSING OFFICER WITH A DIRECTION TO C ONSIDER AND EXAMINE THE EVIDENCES FURNISHED BY THE ASSESSEE, IN THE COURSE OF PROC EEDINGS BEFORE THE TRIBUNAL AND THUS RE-ADJUDICATE THE MATTER. 3. IN THE SECOND ROUND OF PROCEEDINGS, WHICH IS IN APP EAL BEFORE ME, THE ASSESSING OFFICER ISSUED NOTICES U/S.133(6) TO ALL THE BORR OWERS BUT NOTICES COULD BE SERVED ONLY ON THREE PARTIES. THE FIELD ENQUIRIES COND UCTED BY THE ASSESSING OFFICER COULD NOT RESORT ANY VERIFICATION AND GENUINENESS OF T HE PARTIES BECAUSE THOSE BORROWS WERE SAID TO BE MADARIES I.E. STREET ENTERTAI NERS. IT WAS IN THIS BACKDROP THAT THE ASSESSING OFFICER CONCLUDED THAT THE FACT OF L OAN HAVING BEEN GRANTED BY THE ASSESSEES LATE FATHER COULD NOT BE ESTABLISHED. ACCORDIN GLY, THE IMPUGNED ADDITION WAS REPEATED. ONCE AGAIN, THE MATTER TRAVELED IN AP PEAL BEFORE THE CIT (A) BUT WITHOUT ANY SUCCESS. THE CIT (A) ALSO NOTED THAT THE ASSESSEE WAS GIVEN SUFFICIENT OPPORTUNITIES TO PRODUCE THE EVIDENCE OF ASSESSEES LA TE FATHER HAVING ADVANCING THE LOANS BUT THE ASSESSEE HAS NOT DISCHARGED THE SAID ONUS. TH E ASSESSEE IS AGGRIEVED AND IS IN FURTHER APPEAL BEFORE THE TRIBUNAL. 4. I HAVE HEARD THE RIVAL CONTENTIONS, PERUSED THE M ATERIAL ON RECORD AND DULY CONSIDERED THE FACTUAL MATRIX OF THE CASE. 5. I HAVE NOTICED THAT IN THE COURSE OF ASSESSMENT PROCE EDINGS FOR THE ASSESSMENT YEAR 2001-02 AS ALSO FOR A.Y. 1999-2000, THE ASSESSING OFFICER HAS ACCEPTED INTEREST ON LOAN GIVEN BY LATE FATHER OF TH E ASSESSEE AND HAS NOT MADE ANY ADDITION IN RESPECT OF THE UNDISCLOSED INCOME ON THE G ROUND THAT THE MONEY WAS ADVANCED BY THE ASSESSEE HIMSELF. IN ANY EVENT, IT IS NO T EVEN THE CASE OF THE REVENUE THAT THE RELATED ADVANCES WERE GIVEN BY THE ASSESSEE IN THE RELEVANT I.T.A NO.2278/ MUM/2010 SHRI NAGURAO MALKU GADGE 3 PREVIOUS YEAR AS THE LOANS ARE IN THE NATURE OF OLD BA LANCE AND CARRIED FORWARD FROM EARLIER YEARS. THE AMOUNT OF INTEREST EARNING THUS AR E ADMITTEDLY IN RESPECT OF OLD LENDING BY THE ASSESSEE. UNDER THESE CIRCUMSTANCES, THE A DDITION WAS MADE ON THE GROUND THAT THE MONIES ADVANCED BY THE ASSESSEE WAS OUT O F HIS UNDISCLOSED INCOME IN THE RELEVANT PREVIOUS YEAR IS DEVOID OF LEGAL SUSTAI NABLE BASIS. IN MY VIEW AND PARTICULARLY AS THE FIELD ENQUIRIES CONDUCTED BY THE AO HIMSELF INDICATE THAT THE PERSONS WHO WERE BORROWED DID EXIST, THE ASSESSEE CANNOT B E FAULTED OF HAVING FAILED TO PRODUCE THESE BORROWERS. IN VIEW OF THESE FACTS AN D CONSIDERING THE ENTIRETY OF THE CASE, I AM OF THE CONSIDERED VIEW THAT THE IMPUGNED A DDITION CANNOT BE SUSTAINED. NEITHER THERE IS ANY MATERIAL ON RECORD TO SUGGEST THA T THE LOANS WERE ADVANCED BY THE ASSESSEE IN THE RELEVANT PREVIOUS YEAR ITSELF NOR IS ANY MATERIAL ON RECORD TO CONTROVERT THE PLEA THAT THE ASSESSEE HAS ALL ALONG TA KEN THE ACCEPTED PAST HISTORY OF THE CASE. I ACCORDINGLY DELETE THE IMPUGNED ADDITIO N. 6. IN THE RESULT, APPEAL IS ALLOWED. PRONOUNCED IN THE OPEN COURT ON 3 RD MARCH, 2011 SD/- (PRAMOD KUMAR) (ACCOUNTANT MEMBER) MUMBAI, DATED 3 RD MARCH, 2011 PARIDA COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. COMMISSIONER OF INCOME TAX (APPEALS),32, MUMBAI 4. COMMISSIONER OF INCOME TAX ,CITY 21 , MUMBAI 5. DEPARTMENTAL REPRESENTATIVE, BENCH SMC, MUMBAI //TRUE COPY// BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI I.T.A NO.2278/ MUM/2010 SHRI NAGURAO MALKU GADGE 4 I.T.A NO.2278/ MUM/2010 SHRI NAGURAO MALKU GADGE 5