M/s Bharat Bulk Carrier, Mathura V. I.T.O.-3(4), Mathura

ITA 233/AGR/2011

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 0389 (ITAT-AGRA)
• Duration Of Justice: 7 year(s) 10 month(s) 26 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 16-05-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 08-01-2013
• Assessment Year: 2003-2004
• Appeal Filed On: 20-06-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KK MISHRA
• Keywords: Gift; Set aside
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AGRA BENCH, AGRA BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI A.L. GEHLOT, ACCOUNTANT MEMBER ITA NO.233/AGR/2011 ASSESSMENT YEAR: 2003-04 M/S. BHARAT BULK CARRIER, VS. INCOME TAX OFFICER 3(4), SHORAWALA COMPLEX, MATHURA. MATHURA. (PAN: AAFEB 6024 R). (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI ANURAG SINHA, ADVOCATE RESPONDENT BY : SHRI K.K. MISHRA, JR. D.R. DATE OF HEARING : 08.01.2013 DATE OF PRONOUNCEMENT OF ORDER : 08.02.2013 ORDER PER A.L. GEHLOT, ACCOUNTANT MEMBER: THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER DATED 15.02.2011 PASSED BY THE LD. CIT(A)-I, AGRA FOR THE ASSESSMENT YEAR 2003-04. 2. THE ASSESSEE HAS RAISED AS MANY AS SIX GROUNDS O F APPEAL BUT THE EFFECTIVE GROUND IS IN RESPECT OF ADDITION OF RS.5,00,000/- M ADE BY THE A.O. UNDER SECTION 68 OF THE INCOME TAX ACT, 1961 (THE ACT HEREINAFTER) BEING CAPITAL CONTRIBUTED BY THE PARTNERS. ITA NO.233/AGR/2011 A.Y. 2003-04 2 3. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF RUNNI NG TANKERS. THE ASSESSEE IS A PARTNERSHIP FIRM. DURING THE ASSESSMENT PROCEEDING S THE A.O. NOTICED THAT ONE OF THE PARTNERS SMT. POOJA AGARWAL INTRODUCED A CAPITA L OF RS.2,00,000/- ON 27.05.2002 AND RS.2,00,000/- ON 06.06.2002. THE AM OUNT WAS CREDITED IN THE CAPITAL ACCOUNT OF THE PARTNER. ANOTHER PARTNER SM T. ASHA AGARWAL HAS ALSO MADE CAPITAL CONTRIBUTION OF RS.1,00,000/- ON 18.06.2002 . IT WAS EXPLAINED BY THE ASSESSEE THAT THE SOURCE OF AMOUNT OF CAPITAL CONTR IBUTION OF RS.2,00,000/- WAS OUT OF GIFT RECEIVED BY THE PARTNER SMT. POOJA AGARWAL FROM SMT. DHAN VIDYA DEVI AND RS.2,00,000/- FROM SHRI RAJ KUMAR GUPTA. SIMIL ARLY, SMT. ASHA AGARWAL HAS ALSO RECEIVED GIFT FROM SMT. DHAN VIDYA DEVI. AFTE R MAKING NECESSARY ENQUIRY AND AFTER RECORDING THE STATEMENT OF CONCERNED PART IES, THE A.O. FOUND THAT THE GIFT RECEIVED BY THE PARTNERS WERE LIABLE TO BE ADDED U NDER SECTION 68 OF THE ACT AS THE ASSESSEE HAS FAILED TO PROVE THE GENUINENESS OF THE TRANSACTION AND CREDITWORTHINESS OF THE DONORS. 4. THE CIT(A) CONFIRMED THE ADDITION OF RS.5,00,000 /- MADE BY THE A.O. 5. WE HAVE HEARD THE LD. REPRESENTATIVES OF THE PAR TIES AND RECORDS PERUSED. THE ADMITTED FACTS OF THE CASE ARE THAT THE ASSESSE E IS A PARTNERSHIP FIRM AND THE AMOUNT WAS FOUND CREDITED IN THE CAPITAL ACCOUNT OF THE PARTNERS. THE HONBLE MADHYA PRADESH HIGH COURT IN THE CASE OF CIT VS. M ETACHEM INDUSTRIES, 245 ITR ITA NO.233/AGR/2011 A.Y. 2003-04 3 160 (MP) HAS HELD THAT ONCE IT IS ESTABLISHED THAT THE AMOUNT WAS INVESTED BY THE PARTNER, THE RESPONSIBILITY OF THE ASSESSEE-FIRM IS OVER AND ITS BURDEN IS DISCHARGED. IT IS OPEN TO THE A.O. TO UNDERTAKE FURTHER INVESTI GATION AGAINST THAT PARTNER. SUCH CREDIT CANNOT BE TREATED AS INCOME OF THE FIRM. WE RESPECTFULLY FOLLOW THE ABOVE JUDGEMENT OF HONBLE MADHYA PRADESH HIGH COURT IN T HE CASE OF CIT VS. METACHEM INDUSTRIES (SUPRA) AND IN THE LIGHT OF THA T WE SET ASIDE THE ORDERS OF REVENUE AUTHORITIES AND ADDITION OF RS.5,00,000/- I S DELETED FROM THE FIRM. HOWEVER, THE A.O. IS AT LIBERTY TO TAKE ACTION AGAI NST PARTNERS IN THE LIGHT OF ABOVE JUDGEMENT OF M.P. HIGH COURT AND IN ACCORDANCE WITH LAW. AS THE ISSUE HAS BEEN DECIDED FOLLOWING THE JUDGEMENT OF M.P. HIGH COURT IN THE CASE OF CIT VS. METACHEM INDUSTRIES (SUPRA), THEREFORE, ON MERIT WE ARE NOT EXPRESSING ANY OPINION REGARDING EXAMINATION OF THE CASE BY THE A.O. & CIT (A). 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED AS INDICATED ABOVE. (ORDER PRONOUNCED IN THE OPEN COURT) SD/- SD/- (BHAVNESH SAINI) (A.L. GEHLOT) JUDICIAL MEMBER ACCOUNTANT MEMBER PBN/* ITA NO.233/AGR/2011 A.Y. 2003-04 4 COPY OF THE ORDER FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT (APPEALS) CONCERNED 4. CIT CONCERNED 5. D.R., ITAT, AGRA BENCH, AGRA 6. GUARD FILE. BY ORDER SR. PRIVATE SECRETARY INCOME-TAX APPELLATE TRIBUNAL, AGRA TRUE COPY