INCOME TAX OFFICER 15(3)(3), MUMBAI V. M/S.SAUBHAGYA REALTOR PRIVATE LIMITED, MUMBAI

ITA 2335/MUM/2018

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 5363 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-10-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: J
• Assessment Year: 2012-2013
• Appeal Filed On: 16-04-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained cash credit
• Section: 133(6); 131; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH G MUMBAI BEFORE SHRI SAKTIJIT DEY (JUDICIAL MEMBER) AND SHRI N.K. PRADHAN (ACCOUNTANT MEMBER) ITA NO. 2335/MUM/2018 ASSESSMENT YEAR: 2012-13 THE INCOME TAX OFFICER- 15(3)(3), ROOM NO. 452, 4 TH FLOOR, AAYAKARBHAVAN, MAHARSHIKARVE ROAD, MUMBAI-400020. VS. M/S SAUBHAGYA REALTOR PVT. LTD. SHOP NO. 1, 2, & 3, PLOT NO. 88, SECTOR-3, KOPERKHAIRANE, NAVI MUMBAI-400709. PAN NO. AAKCS7352Q APPELLANT RESPON DENT REVENUE BY : MR. NITIN WAGHMODE, DR ASSESSEE BY : MR. SURESH OTWANI, AR DATE OF HEARING : 07/08/2019 DATE OF PRONOUNCEMENT : 31/10/2019 ORDER PER N.K. PRADHAN, AM THIS IS AN APPEAL FILED BY THE REVENUE. THE RELEVAN T ASSESSMENT YEAR IS 2012-13. THE APPEAL IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX-24, MUMBAI [IN SHORT CI T(A)] AND ARISES OUT OF THE ASSESSMENT COMPLETED U/S 143(3)OF THE IN COME TAX ACT 1961, (THE ACT). 2. THE GROUNDS OF APPEAL FILED BY THE REVENUE READ AS UNDER : 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. CIT(A) ERRED IN RESTRICTING THE ADDITION MADE B Y THE ASSESSING OFFICER, IN RESPECT OF UNEXPLAINED CASH CREDIT U/S 68 OF THE INCOME TAX ACT, 1961, AMOUNTING OF TO RS.8,39,84,000/- TO JUST RS.5,85,000/-, ITA 233 5/MUM/2018 M/S. SAUBHAGYA REALTO R PRIVATE LIMITED 2 WITHOUT APPRECIATING THE FINDINGS OF THE ASSESSING OFFICER IN HIS REMAND REPORT HAD NOT CERTIFIED THE IDENTITY, CREDI TWORTHINESS AND GENUINENESS OF THE TRANSACTION IN REAL ESTATE MADE BY THE ASSESSEE WITH VARIOUS PARTIES. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD. CIT(A) ERRED IN RESTRICTING THE ADDITION MADE B Y THE ASSESSING OFFICER, IN RESPECT OF UNEXPLAINED CASH CREDIT U/S 68 OF THE INCOME TAX ACT, 1961, AMOUNTING OF TO RS.8,39,84,000/- TO JUST RS.5,85,000/-, HOLDING THAT THE ASSESSEE HAS SATISFACTORILY DISCHA RGED ITS ONUS OF ESTABLISHING THE IDENTITY, GENUINENESS AND CREDITWO RTHINESS OF THE PARTIES CONCERNED, IGNORING THE RECENT DECISION OF THE SUPREME COURT OF INDIA IN THE CASE OF NAVODAYA CASTLE (P) LTD [20 15] 56 TAXMANN.COM 18(SC), WHEREIN THE APEX COURT HAS UPHELD THE DELHI HIGH COURT DECISION HOLDING THAT CERTIFICATE OF INCORPORATION, PAN, BANK STATEMENT ETC., WERE NOT SUFFICIENT FOR PURPOSE OF IDENTIFICA TION OF SUBSCRIBER COMPANY. 3. BRIEFLY STATED THE FACTS OF THE CASE THE ASSESSE E FILED ITS RETURN OF INCOME FOR THE A.Y. 2012-13 ON 29.09.2012 DECLARING TOTAL INCOME OF RS.1,11,707/-. THE ASSESSEE IS ENGAGED IN THE BUSIN ESS OF REAL ESTATE. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AS SESSING OFFICER (AO) ISSUED NOTICE U/S.133(6) TO VARIOUS PARTIES CALLING FOR CONFIRMATION OF ACCOUNTS, FINANCIAL STATEMENTS, BANK STATEMENTS ETC . THE AO FOUND THAT CONFIRMATION IN CERTAIN CASES WERE NOT IN ORDER OR WERE NOT SUBMITTED OR THE NOTICE COULD NOT BE SERVED. THEREFORE, HE MA DE A DISALLOWANCE OF RS.8,39,84,000/-, WHICH IS SUMMARISED OVERLEAF: NAME OF THE PARTY AMOUNT REMARKS/COMMENTS FROM THE PARTY ITA 233 5/MUM/2018 M/S. SAUBHAGYA REALTO R PRIVATE LIMITED 3 (RS.) YASH FISCAL SERVICES PVT. LTD. 8,00,000 INITIALLY THE NOTICE WAS UNSERVED. LATER ON, THE DETAILS WERE FILED BUT COPY OF MOU WAS NOT SUBMITTED. ICSA INDIA (G) 11,00,000 NO TRANSACTION WITH THE ASSESSEE DURING THE YEAR GATEWAY OFFSHORE LTD 3,75,00,000 BANK STATEMENT AND MOU NOT PROVIDED GOODHOPE SOFTWARE 2,90,00,000 RUNNING FROM SAME PREMISES AS GATEWAY OFFSHORE AND IDENTITY, GENUINENESS AND CREDITWORTHINESS NOT ESTABLISHED HEALICA BIO SCIENCE LTD 71,35,000 COMPANY IS SPAN ALLIED INDUSTRIES LTD AND ONLY CONFIRMATION WITH BANK STATEMENT FILED. SIGNATURE ON CONFIRMATION AND LETTERS ARE DIFFERENT PLANET HOMEMAKER 20,00,000 ONLY CONFIRMATION FILED TOTAL-A 7,64,35,000 INADVERTENTLY STATED BY AO AS RS.7,75,35,000 IN THE ASSESSMENT ORDER ADVANCES RECEIVED (TOTAL 22 PARTIES B) 41,35,000 CONFIRMATIONS OR OTHER BASIC DETAILS TO ESTABLISH GENUINENESS NOT FILED OTHERS ADVANCES BY CASH (TOTAL 11 PARTIES)- C 23,14,000 ONLY CONFIRMATION FILED GRAND TOTAL (A)+(B)+(C) 8,28,84,000 COMPUTED BY AO AT RS.8,39,84,000 DUE TO TOTAL ERROR IN A ABOVE. 4. AGGRIEVED BY THE ORDER OF THE AO, THE ASSESSEE F ILED AN APPEAL BEFORE THE LD. CIT(A). DURING THE APPELLATE PROCEED INGS, THE LD. CIT(A) ITA 233 5/MUM/2018 M/S. SAUBHAGYA REALTO R PRIVATE LIMITED 4 DIRECTED THE AO TO CONDUCT FOR THE ENQUIRIES AND SU BMIT A REMAND REPORT. THE AO SUBMITTED A REMAND REPORT WITH COMME NTS. AS PER SAID REMAND REPORT 13 PARTIES APPEARED BEFORE THE AO AND THEIR STATEMENTS WERE RECORDED. THE SAID PARTIES ALSO FILED BEFORE T HE AO, COPIES OF PAN, ACKNOWLEDGEMENT OF RETURN OF INCOME, COMPUTATION IN COME, PROFIT AND LOSS ACCOUNT AND BALANCE SHEET. HOWEVER, 4 PARTIES COULD NOT APPEAR BEFORE THE AO AS THEY WERE RESIDING OUT OF MAHARASH TRA STATE. THE SAID 4 PARTIES FILED BEFORE THE AO THE CONFIRMATION OF TRA NSACTION, RELEVANT BANK STATEMENT COPY, COPY OF ACKNOWLEDGEMENT OF RET URN OF INCOME AND CONFIRMATION OF CLOSING BALANCE. FURTHER, THE AO SUBMITTED THAT THE FOLLOWING 4 PAR TIES DID NOT FILE THE DETAILS. NAME OF THE PARTY AMOUNT (RS.) REMARKS OF THE AO KUNAL G. GUPTA 1,30,000 NO RESPONSE TO NOTICE U/S. 133(6) ANITA NARENDRA YADAV 1,00,000 NO DETAILS SUBMITTED SURVASE MAHINDRA S. 1,20,000 NO DETAILS SUBMITTED NARENDRA GULAB YADAV 1,20,000 NO DETAILS SUBMITTED TOTAL 4,70,000 FURTHER, DURING THE COURSE OF APPELLATE PROCEEDINGS THE LD. CIT(A) FORWARDED A COPY OF THE SAID REMAND REPORT TO THE A SSESSEE TO FILE A REJOINDER, IF ANY. THE ASSESSEE FILED A REPLY STATI NG THAT AS PER THE REMAND REPORT ALL THE PARTIES FROM MUMBAI HAVE ATTE NDED THE SUMMONS AND PROVIDED ALL NECESSARY INFORMATION AND DOCUMENT TO THE AO AND ITA 233 5/MUM/2018 M/S. SAUBHAGYA REALTO R PRIVATE LIMITED 5 FOUR PARTIES FROM OUTSIDE MAHARASHTRA HAVE RESPONDE D TO THE NOTICES BY FILING COPIES OF CONFIRMATIONS, BANK STATEMENTS, IT R, PAN AND BALANCE SHEET. THUS, IT WAS REPLIED BY THE ASSESSEE THAT TH E ADDITION MADE BY THE AO U/S.68 BE DELETED. THE LD. CIT(A) FINALLY HELD AS UNDER: AFTER GIVING DUE CONSIDERATION TO THE ASSESSEES SU BMISSIONS, REMAND REPORT AND REJOINDER FILED BY THE ASSESSEE, IT APPEARS THAT THE ASSESSEE HAS BONAFIDELY PROVED THE IDENTITY, GE NUINENESS AND CREDITWORTHINESS OF THE TRANSACTIONS INVOLVED. MORE OVER, THE AO HAD ISSUED THE SUMMONS TO THE PARTIES U/S. 131 OF THE A CT WHEREIN ALL THE PARTIES APPEARED EXCEPT SACHIN J. KURNE WITH WHOM T RANSACTION OF RS.1,15,000 WAS MADE BY THE ASSESSEE. THE ASSESSEE HAS DISCHARGED HIS ONUS OF ESTABLISHING THE IDENTITY, GENUINENESS AND CREDITWORTHINESS OF THE PARTIES CONCERNED. THE AO H AS NOT RAISED ANY OBJECTIONS OR DRAWN ANY ADVERSE INFERENCE AGAINST A NY OF THE PARTIES INVOLVED. THUS, WHERE THE ASSESSEE HAS SATISFACTORI LY DISCHARGED HIS OBLIGATION, THE TRANSACTIONS CANNOT BE CONSIDERED T O BE UNEXPLAINED. HOWEVER, THE ASSESSEE HAS NOT COMPLIED TO PROVE THE IDENTITY AND GENUINENESS OF 5 PARTIES (4 PARTIES ABOVE + SACHIN KURNE) AGGREGATING TO RS.5,85,000 TILL THE DATE OF THIS ORDER. HAVING CONSIDERED ALL OF THE ABOVE, I AM OF THE VIEW THAT THE ASSESSEE HAS SATIS FACTORILY DISCHARGED HIS ONUS OF ESTABLISHING THE IDENTITY, GENUINENESS AND CREDITWORTHINESS OF THE PARTIES CONCERNED AND THE A O HAS NOT RAISED ANY ADVERSE INFERENCE AGAINST THE SAME EXCEPT FOR T HE TRANSACTIONS AGGREGATING TO RS.5,85,000 WHICH REMAINS TO BE UNEX PLAINED CASH CREDITS. ACCORDINGLY, THE ADDITION MADE BY THE AO I S LIMITED AND RESTRICTED TO RS.5,85,000. ITA 233 5/MUM/2018 M/S. SAUBHAGYA REALTO R PRIVATE LIMITED 6 5. BEFORE US, THE LD. DEPARTMENTAL REPRESENTATIVE ( DR) SUBMITS THAT MATTER BE RESTORED TO THE AO TO EXAMINE PARTIES WHO DID NOT APPEAR BEFORE HIM, IN RESPONSE TO THE SUMMONS ISSUED U/S. 131 OF THE ACT. ON THE OTHER HAND, THE LD. COUNSEL FOR THE ASSESSE E SUBMITS THAT EXCEPTING THE FOUR OUTSTATION PARTIES, OTHERS APPEA RED BEFORE THE AO WITH COMPLETE DETAILS. IT IS FURTHER EXPLAINED BY H IM THAT EVEN THE FOUR OUTSTATION PARTIES SUBMITTED COPIES OF CONFIRMATION S, BANK STATEMENTS, ITR, PAN, PROFIT AND LOSS ACCOUNT AND BALANCE SHEET . THUS, THE LD. COUNSEL SUBMITS THAT THE ORDER PASSED BY THE CIT(A) BE CONFIRMED. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. AS MENTIONED EARLIER, IN THE R EMAND PROCEEDINGS 13 PARTIES APPEARED BEFORE THE AO. THEIR STATEMENTS WE RE RECORDED. FURTHER, THEY FILED CONFIRMATIONS, BANK STATEMENTS, ITR, PAN, PROFIT AND LOSS ACCOUNT AND BALANCE SHEET. THE OTHER 4 PARTIES COULD NOT ATTEND THE PROCEEDINGS BEFORE THE AO AS THEY WERE NOT RESIDING IN MAHARASHTRA. HOWEVER, THEY FILED CONFIRMATIONS, BANK STATEMENTS, ITR, PAN, PROFIT AND LOSS ACCOUNT AND BALANCE SHEET. IT IS WELL-SETTLED THAT U/S.68, THE PRIMARY ONUS A S TO THE RECEIPT OF THE AMOUNT IS ON THE ASSESSEE TO SHOW THE IDENTITY OF THE LENDERS, THEIR CREDITWORTHINESS AND THE GENUINENESS OF THE TRANSAC TIONS. ONLY WHERE THE ASSESSEE DISCHARGES THE BURDEN PRIMA FACIE , DOES THE BURDEN SHIFT ON TO THE REVENUE. IN THE INSTANT CASE, THE ASSESSEE H AS DISCHARGED THE BURDEN PRIMA FACIE, EVEN IN RESPECT OF THE 4 PARTIES WHO COULD NOT ATT END THE PROCEEDINGS BEFORE THE AO, IN RESPONSE TO THE S UMMON U/S. 131 OF THE ACT. ITA 233 5/MUM/2018 M/S. SAUBHAGYA REALTO R PRIVATE LIMITED 7 IN EXPLANATION, PRIMA FACIE REASONABLE CANNOT BE REJECTED ON CAPRICIOUS OR ARBITRARY GROUNDS OR ON MERE SUSPICIO N OR ON IMAGINARY OR IRRELEVANT GROUNDS. IN THIS REGARD, WE FRUITFULLY R EFER TO THE DECISION IN R.B.N.J. NAIDU V. CIT , [1956] 29 ITR 194 (NAG.), LAJWANTI SIAL V. CIT , [1956] 30 ITR 228 (NAG.). IN VIEW OF THE ABOVE, FACTUAL SCENARIO AND POSITIO N OF LAW, WE UPHOLD THE ORDER OF THE LD. CIT(A). 7. IN THE RESULT, THE APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 31.10.2019 SD/- SD/- (SAKTIJIT DEY) (N.K. PRADHAN) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI; DATED: 31.10.2019 S. SAMANTA P.S.(ON TOUR) COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A)- 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. BY ORDER, //TRUE COPY// (ASSISTANT REGISTRAR) ITAT, MUMBAI