M/s. Growmax Corporate Services Pvt. Ltd., Vapi V. The ACIT, Vapi Circle, Vapi

ITA 235/AHD/2016

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 3186 (ITAT-SURAT)
• Duration Of Justice: 5 year(s) 8 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-10-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2011-2012
• Appeal Filed On: 01-02-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANUPAMA SINGLA
• Assessee Lawyers: SURESH K KABRA
• Keywords: Income from undisclosed sources; Corroborative evidences; Revised return
• Section: 68

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL SURAT BENCH, SURAT BEFORE SHRI PAWAN SINGH, HON'BLE JUDICIAL MEMBER AND DR. ARJUN LAL SAINI, HON'BLE ACCOUNTANT MEMBER (VIRTUAL HEARING) . . ./ I.T.A NO.235/AHD/2016 [ [ / ASSESSMENT YEAR: 2011-12 M/S.GROWMAX CORPORATE SERVICES PVT. LTD., 409, TIRUPATI TOWER, OPP. HEENA ARCADE, TELEPHONE EXCHANGE, VAPI 396 195. [PAN: AADCG 3217 H] V S. THE ASSISTANT COMMISSIONER OF INCOME TAX, VAPI CIRCLE, VAPI. / APPELLANT /RESPONDENT [ /ASSESSEE BY SHRI SURESH K. KABRA CA /REVENUE BY SMT. ANUPAMA SINGLA SR. DR / DATE OF HEARING: 03 . 0 8 .20 2 1 /PRONOUNCEMENT ON: 11 . 1 0 .202 1 /O R D E R PER PAWAN SINGH, JUDICIAL MEMEBER: 1. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS)-VALSAD, VALSAD HEREINAFTER REFERRED AS LD.CIT(A) DATED 18.12.2015 FOR A.Y. 2011-12. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AS WELL AS LAW ON THE SUBJECT, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN CONFIRMING THE ADDITION OF RS. 1,65,00,0020/- U/S 68 OF THE ACT. 2. IT IS PRAYED THAT ABOVE ADDITIONS/DISALLOWANCES MADE BY ASSESSING OFFICER AND CONFIRMED BY COMMISSIONER OF INCOME-TAX (APPEALS) MAY PLEASE BE DELETED. M/S.GROWMAX CORPORATE SERVICES PVT. LTD., VS. ACIT, VAPI CIRCLE, VAPI./ ITA NO.235/AHD/2016 FOR A.Y. 2011-12 2 3. APPELLANT CRAVES LEAVE TO ADD, ALTER OR DELETE ANY GROUND(S) EITHER BEFORE OR IN THE COURSE OF HEARING OF THE APPEAL. 2. BRIEF FACTS OF THE CASE ARE THAT ASSESSEE IS A COMPANY AND ENGAGED IN THE BUSINESS OF TRADING OF SHARE AND AS A GENERAL COMMISSION AGENT. THE ASSESSEE FILED ITS RETURN OF INCOME FOR ASSESSMENT YEAR 2011-12 ON 30.09.2011 DECLARING LOSS OF RS.1.70 CRORES. THEREAFTER, THE ASSESSEE FIELD A REVISED RETURN OF INCOME ON 29.09.2012 REVISING LOSS OF RS.2.70 CRORES. THE CASE WAS SELECTED FOR SCRUTINY. DURING ASSESSMENT, THE ASSESSING OFFICER RECEIVED INFORMATION FROM DCIT, CENTRAL- 2(4), AHMEDABAD VIDE LETTER DATED -8.05.2013. THE INFORMATION PERTAINS TO UNSECURED LOAN ENTRIES FACILITATED BY ONE SHRI DHIRAJLAL SANGHVI, THE ASSESSEE WAS ONE OF THE BENEFICIARY ON SUCH ENTRIES. ON THE BASIS OF INFORMATION OF DCIT, CENTRAL-2(4) AHMEDABAD, THE ASSESSING OFFICER NOTED THAT ASSESSEE HAS AVAILED A LOAN ENTRY THROUGH DHIRAJLAL SANGHVI OF RS.1.05 CRORES FORM KARUSALA SRINIVAS AND RS. 60 LAKHS FROM M. GANESH. ON THE BASIS OF SUCH INFORMATION ASSESSEE WAS ASKED TO FURNISH THE DETAILS OF SUCH LOAN AVAILED BY ASSESSEE. THE ASSESSING OFFICER RECORDED THAT IN RESPONSE TO THE QUERIES OF ASSESSING OFFICER, THE ASSESSEE FURNISHED CONFIRMATION OF PARTIES, COPY OF BANK STATEMENT AND RETURN OF INCOME IN CASE OF KARUSALA SRINIVAS. ON THE BASIS OF CONFIRMATION OF LENDER, RETURN OF INCOME AND BANK STATEMENTS, THE ASSESSEE SUBMITTED THAT THEY HAVE M/S.GROWMAX CORPORATE SERVICES PVT. LTD., VS. ACIT, VAPI CIRCLE, VAPI./ ITA NO.235/AHD/2016 FOR A.Y. 2011-12 3 ESTABLISHED THE IDENTIFY &, CREDITWORTHINESS OF LENDER AND GENUINENESS OF TRANSACTIONS AND DISCHARGED THEIR PRIMARY ONUS. 3. THE REPLY AND THE DOCUMENTS FURNISHED BY THE ASSESSEE WAS NOT ACCEPTED BY THE ASSESSING OFFICER. THE ASSESSING OFFICER ON THE BASIS OF INFORMATION RECEIVED FROM DCIT, CIRCLE-2(4), AHMEDABAD HELD THAT ASSESSEE COULD NOT PROVE THAT LOAN ACCEPTED IS GENUINE AND BONA FIDE AND BROUGHT THE ENTIRE AMOUNT OF RS.1.65 CRORES RECEIVED FROM BOTH THE LENDER WERE BROUGHT TO TAX UNDER SECTION 68 OF THE ACT. 4. ON APPEAL BEFORE THE LD. CIT(A) THE ASSESSEE SUBMITTED THAT DURING ASSESSMENT THE ASSESSING OFFICER ASKED THE ASSESSEE TO FILE CONFIRMATION OF UNSECURED LOAN, THE RETURN OF INCOME AND BANK STATEMENT OF LENDER TO SHOW THE IDENTITY AND GENUINENESS OF THE TRANSACTIONS AND THEIR CREDITWORTHINESS. THE ASSESSEE DISCHARGED THEIR PRIMARY ONUS BY FURNISHING REQUIRED DOCUMENT TO PROVE THE IDENTITY OF PERSONS, GENUINENESS OF TRANSACTION AND CREDITWORTHINESS OF LENDERS. THE ASSESSING OFFICER HELD THAT THE TRANSACTIONS ARE FACILITATED ENTRY. THE ASSESSING OFFICER HAD NOT ESTABLISHED THE GROUND OF WHICH THE TRANSACTION WAS CONSIDERED FOR FRAUDULENT LOAN ENTRY. THE ASSESSING OFFICER HAS NOT MADE ANY INDEPENDENT INQUIRY AND MADE ADDITION ON THE BASIS OF SURMISE AND CONJECTURE. THE ASSESSEE ALSO RELIED ON CERTAIN CASE LAWS. THE LD. CIT(A) AFTER CONSIDERING THE ASSESSMENT ORDER, SUBMISSION M/S.GROWMAX CORPORATE SERVICES PVT. LTD., VS. ACIT, VAPI CIRCLE, VAPI./ ITA NO.235/AHD/2016 FOR A.Y. 2011-12 4 OF ASSESSEE AND EVIDENCE FURNISHED BY ASSESSEE HELD THAT THE ASSESSING OFFICER RECEIVED INFORMATION THAT THE ASSESSEE HAS RECORDED UNSECURED LOAN ENTRY THROUGH FACILITATE THEREFORE GENUINENESS OF TRANSACTION AS WELL AS CREDITWORTHINESS OF LENDERS IS UNDER CLOUD. THE LD. CIT(A) FURTHER HELD THAT SUBMISSION OF CONFIRMATION, BANK STATEMENT AND COPY OF RETURN OF INCOME ARE SUFFICIENT TO PROVE THE GENUINENESS OF INQUIRY AND CREDITWORTHINESS OF LENDERS AND UPHELD THE ADDITION MADE BY ASSESSING OFFICER. AGGRIEVED BY THE ORDER OF LD. CIT(A) THE ASSESSEE HAS FILED THIS APPEAL BEFORE THIS TRIBUNAL. 5. WE HAVE HEARD THE SUBMISSIONS OF LD. AUTHORIZED REPRESENTATIVE (AR) FOR THE ASSESSEE AND LD. SR. DEPARTMENTAL REPRESENTATIVE (DR) FOR THE REVENUE AND HAVE GONE THROUGH THE ORDERS OF LOWER AUTHORITIES. THE LD. AR OF THE ASSESSEE SUBMITS THAT ASSESSING OFFICER MADE THE ADDITION MERELY ON THE BASIS OF INFORMATION RECEIVED FROM DCIT,CIRCLE-2(4), AHMEDABAD. THE ASSESSEE FURNISHED THE COPY OF CONFIRMATION FROM M.M.GANESH, HIS BANK ACCOUNT, RETURN OF INCOME. SIMILARLY, THE ASSESSEE FILED RETURN OF INCOME OF KARUSALA SRINIVAS, COPY OF CONFIRMATION, BANK STATEMENT. THE ASSESSEE DISCHARGED THE PRIMARY ONUS AND ASSESSING OFFICER RECORDED THAT ONLY CONFIRMATION OF KARUSALA SRINIVAS WAS FILED. THE ASSESSEE FILED CONFIRMATION OF PARTIES, BANK STATEMENTS, ITR OF BOTH THE LENDERS. THE ASSESSEE ALSO FURNISHED COPY OF BANK M/S.GROWMAX CORPORATE SERVICES PVT. LTD., VS. ACIT, VAPI CIRCLE, VAPI./ ITA NO.235/AHD/2016 FOR A.Y. 2011-12 5 STATEMENT OF ASSESSEE. THE LD. AR OF THE ASSESSEE SUBMITS THAT BOTH THE AUTHORITIES DISREGARDED THE DOCUMENTARY EVIDENCE FURNISHED BY ASSESSEE. THE LD. AR FOR THE ASSESSEE SUBMITS THAT ASSESSING OFFICER AS WELL AS LD. CIT(A) SOLELY RELIED UPON THE INFORMATION RECEIVED FROM DCIT,CIRCLE-2(4), AHMEDABAD AND NO INDEPENDENT INVESTIGATION WAS CARRIED OUT, NO NOTICE OR SUMMONS WERE ISSUED TO THE LENDERS. THE LD. AR OF THE ASSESSEE SUBMITS THAT SIMILAR ADDITIONS WERE MADE IN THE HAND OF FACILITATOR DHIRAJLAL SANGHVI BY HIS ASSESSING OFFICER. HOWEVER, ON APPEAL BEFORE LD. CIT(A), THE ADDITION IN HIS CASE WAS DELETED AND ON FURTHER APPEAL AGAINST THE ORDER OF LD. CIT(A) BEFORE TRIBUNAL, THE ORDER WAS CONFIRMED IN IT(SS)A NO.303/AHD/2014 FOR AY 2011-12 ORDER DATED 03.10.2019. THE LD. AR FOR THE ASSESSEE SUBMITS THAT HE HAS FURNISHED ALL DOCUMENTARY EVIDENCE BEFORE THE LOWER AUTHORITIES AS WELL AS THE COPY OF DECISION OF TRIBUNAL IN THE CASE OF DHIRAJLAL V. SANGHVI (SUPRA). 6. ON THE OTHER HAND, LD. SR. DR FOR THE REVENUE SUPPORTED THE ORDER OF LD. CIT(A). LD. SR. DR SUBMITS THAT CREDITWORTHINESS OF LENDER OF TRANSACTION AND CREDITWORTHINESS OF TRANSACTION WERE MADE SUSPICIOUS. THEREFORE, THE LD. CIT(A) CONFIRMED THE ADDITION MADE BY THE ASSESSING OFFICER. 7. WE HAVE CONSIDERED THE SUBMISSION OF LD. REPRESENTATIVES OF PARTIES, PERUSED THE RECORD CAREFULLY. WE FIND THAT DURING THE ASSESSEE, THE ASSESSING OFFICER MADE THE ADDITION ON THE M/S.GROWMAX CORPORATE SERVICES PVT. LTD., VS. ACIT, VAPI CIRCLE, VAPI./ ITA NO.235/AHD/2016 FOR A.Y. 2011-12 6 BASIS OF INFORMATION RECEIVED FROM DCIT, CIRCLE-2(4), AHMEDABAD. THOUGH, THE ASSESSEE FURNISHED COPY OF CONFIRMATION, BANK STATEMENT, AND INCOME-TAX RETURN OF LENDERS. DESPITE FILING ALL NECESSARY EVIDENCE TO PROVE THE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF TRANSACTION, THE ASSESSING OFFICER HAS NOT GIVEN ANY COMMENT ON SUCH DOCUMENTARY EVIDENCE AND NO INDEPENDENT INVESTIGATION WAS CARRIED OUT BY THE ASSESSING OFFICER. THE LD. CIT(A) CONFIRMED THE ACTION OF ASSESSING OFFICER ON SIMILAR LINES. NO INDEPENDENT FINDING WAS GIVEN BY LD. CIT(A) EXCEPT HOLDING THAT MERE FILING OF CONFIRMATION, BANK STATEMENT, COPY OF RETURN OF INCOME IS NOT SUFFICIENT TO PROVE THE GENUINENESS OF TRANSACTION AND CREDITWORTHINESS OF LENDERS. 8. WE FIND THAT THE LD. CIT(A) HAS NOT GIVEN ANY FINDING AS TO WHAT MORE EVIDENCE WAS REQUIRED TO FILE IF ANY OTHER EVIDENCE WAS REQUIRED FROM THE ASSESSEE. IN OUR VIEW THE ASSESSEE HAS DISCHARGED THE PRIMARY ONUS IN SHOWING THE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF SUCH TRANSACTION. WE FURTHER FIND THAT SIMILAR ADDITION OF THE SAME AMOUNT WAS MADE IN THE HAND OF FACILITATOR DHIRAJLAL SANGHVI. HOWEVER, ON APPEAL BEFORE LD. CIT(A) THE ADDITION WAS DELETED. ON FURTHER APPEAL BY REVENUE BEFORE THE TRIBUNAL, THE ORDER OF LD. CIT(A) WAS UPHELD. THE RELEVANT PART OF ORDER OF TRIBUNAL IN DHIRAJLAL V SANGHVI (SUPRA) IS REPRODUCED BELOW:- GROUND NO.5 OF THE REVENUE IN DELETING ADDITION OF RS.5,29,43,000/-:- M/S.GROWMAX CORPORATE SERVICES PVT. LTD., VS. ACIT, VAPI CIRCLE, VAPI./ ITA NO.235/AHD/2016 FOR A.Y. 2011-12 7 IN RESPECTS OF DELETING ADDITION OF RS.5,29,43,000/- MADE ON ACCOUNT OF RTGS RECEIPT, THE ASSESSING OFFICER HAS OBSERVED FROM THE NOTINGS PERTAINING TO RTGS TRANSACTION THAT AFORESAID AMOUNTS WERE NOT RECORDED IN THE BOOKS OF ASSESSEE, THEREFORE, THE SAME WAS ADDED AS UNACCOUNTED INCOME OF THE ASSESSEE. IN THIS REGARD, THE ASSESSEE HAS EXPLAINED TO THE ASSESSING OFFICER THAT RTGS TRANSACTIONS WERE NOT PERTAINING TO THE ASSESSEE OR ITS GROUP AND ACTUALLY THESE TRANSACTIONS WERE BELONGED TO THE THIRD PARTY. THE ASSESSEE HAS FURNISHED THE COMPLETE DETAILS OF THE PARTIES TO WHOM THESE RTGS TRANSACTIONS WERE BELONGED. THE ASSESSEE HAS FURNISHED THE NAME AND ADDRESSES OF THE PARTIES, DETAIL OF BANK ACCOUNT, PAN NO, DATE OF TRANSACTION, AMOUNT OF TRANSACTION, NAME AND ADDRESS OF THE REMITTER, PAN DETAIL OF BANK FROM WHERE THE RTGS WAS SENT. HOWEVER, THE ASSESSING OFFICER HAS TREATED THE AFORESAID RTGS AS UNACCOUNTED TRANSACTION OF THE ASSESSEE WITHOUT CONSIDERING AND DISPROVING THE SUPPORTING EVIDENCES FURNISHED BY THE ASSESSEE THAT THESE TRANSACTIONS WERE BELONGED TO THE THIRD PARTIES. THE ASSESSEE HAS ALSO FURNISHED BEFORE THE LOWER AUTHORITIES THE PROFORMA COPY OF RTGS FORM WHEREIN THE DETAIL OF BOTH THE PARTIES I.E. REMITTER AND THE BENEFICIARY WERE GIVEN BY THE ISSUING AUTHORITY WHICH IS REPRODUCED AS UNDER:- SL.NO. PAGE NO. OF ANX.9 NAME AND ADDRESS OF PARTY RECEIVED RTGS DATE OF TRANSACTION AMOUNT NAME AND ADDRESS OF REMITTER 1 114 HIGH GROWTH VIN TRADE PVT. LTD. 8/9/2010 4500000 CASPICAN PROJECT PVT. LTD., PLOT NO 159 A, FIRST FLOOR, MLA COLONY, ROAD NO.12 BANJARA HILLS HYDERABAD-34 2 110 HARISH BOHRA 5/10/2010 5550000 RAJA REDDY NANDYGADADA VILLAGE. SRINIVAS SANDRA POST BANARPET TALUKA, KOLAR DIST. KARNATAKA M/S.GROWMAX CORPORATE SERVICES PVT. LTD., VS. ACIT, VAPI CIRCLE, VAPI./ ITA NO.235/AHD/2016 FOR A.Y. 2011-12 8 3 110 GROMAX CORPORATE SERVICES PVT. LTD. 409, TRIPUTI TOWERS NR. TELEPHONE EXCHANGE STREET GIDC CROSSING ROAD, GIDC VAPI 7/7/2010 8443000 M.N.PRATIMA HOUSE NO.106/21, FIRRST FLOOR, NR. OLD DIVJYAJYOTI SCL AKRI VILLAGE E.G.ROAD 4 109 JOSHI BULLION GEMS & JEWELLERY PVT. LTD. 412, LAXMI MALL BUILDING NO.5 LAXMI INDUSTRIAL ESTATE, NEW LINK ROAD, ANDHERI WEST MUMBAI- 400053 27-07-2010 18000000 RAJA REDDY NANDYGADADA VILLAGE SRINIVAS SANDRA POST BANARPET TALUKA KOLAR DIST. KARNATAKA 5 107 GROMAX CORPORATE SERVICES PVT. LTD. 409 TRIPUTI TOWERS NR. TELEPHONE EXCHANGE STREET, GIDC CROSSING ROAD, GIDC VAPI 21-07-2010 6000000 M.M.GANESH 215, 4 TH CROSS ROAD LEFT SIDE ROAD ILLIYASHNAGAR BANGLORE (SOUTH) 6 3 GROMAX CORPORATE SERVICES PVT. LTD. 409 TRIPUTI TOWERS NR. TELEPHONE EXCHANGE STREET, GIDC CROSSING ROAD, GIDC VAPI 3/11/2010 4000000 KARUSALA SRINIVASRAO LOWYERPETH PRAKASHAM HYDERBAD 7 3 GROMAX CORPORATE SERVICES PVT. LTD. 409 TRIPUTI TOWERS NR. TELEPHONE EXCHANGE STREET, GIDC CROSSING ROAD, GIDC VAPI 8/11/2010 2500000 KARUSALA SRINIVASRAO LOWYERPETH PRAKASHAM HYDERBAD GIDC CROSSING ROAD GIDC VAPI TOTAL 52993000 THE ASSESSEE HAD ALSO EXPLAINED THAT HE HAD ACTED AS FACILITATOR IN PROVIDING THE FUNDS TO THE INVESTORS AND FROM THIS PURPOSE HE HAD MADE NOTING OF FUNDS WHICH WERE REMITTED BY THIRD PARTY AND RECEIVED BY ANOTHER THIRD PARTY. IN THE LIGHT OF THE ABOVE MATERIAL FACTS, WE OBSERVE THAT THE ASSESSING OFFICER HAD NOT DISPROVED THE MATERIAL/EVIDENCES THAT THE ASSESSEE WAS NEITHER REMITTER NOR BENEFICIARY IN THE SAID TRANSACTIONS. AFTER CONSIDERING THE ABOVE FACTS AND FINDINGS OF LD. CIT(A), WE DO NOT FIND ANY MERIT IN THE APPEAL OF THE REVENUE AS ASSESSING OFFICER HAS FAILED TO DISPROVE THE MATERIAL FURNISHED BY THE ASSESSEE THAT THE IMPUGNED TRANSACTIONS WERE PERTAINED TO THE THIRD PARTY NOT TO THE M/S.GROWMAX CORPORATE SERVICES PVT. LTD., VS. ACIT, VAPI CIRCLE, VAPI./ ITA NO.235/AHD/2016 FOR A.Y. 2011-12 9 ASSESSEE OR HIS GROUP. THEREFORE, THIS GROUND OF APPEAL OF THE REVENUE IS DISMISSED . 9. IN VIEW OF THE AFORESAID DISCUSSION AND KEEPING IN VIEW THE DECISION OF HON'BLE ITAT AHMEDABAD BENCH IN CASE OF FACILITATED DHIRAJLAL V SANGHVI (SUPRA), WHEREIN IT WAS HELD THAT HE HAD ACTED AS FACILITATOR IN PROVIDING THE FUNDS TO THE INVESTORS AND FROM THIS PURPOSE HE HAD MADE NOTING OF FUNDS WHICH WERE REMITTED BY THIRD PARTY AND RECEIVED BY ANOTHER THIRD PARTY. HENCE, WE ARE OF VIEW THAT ONCE THE ASSESSEE HAS DISCHARGED THE PRIMARY ONUS, THE ASSESSING OFFICER WITHOUT BRINING ANY ADVERSE EVIDENCE WAS NOT JUSTIFIED IN MAKING ADDITION UNDER SECTION 68 OF THE ACT. THIS GROUND OF ASSESSEES APPEAL RAISED BY ASSESSEE IS ALLOWED. 10. IN THE RESULT, APPEAL OF ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON 11/10/2021 BY PLACING THE RESULT ON THE NOTICE BOARD. SD/- SD/- (DR.ARJUN LAL SAINI) (PAWAN SINGH) ( /ACCOUNTANT MEMBER) ( /JUDICIAL MEMBER) / SURAT, DATED : 11/10/2021 / DKP OUTSOURCING SR.P.S COPY OF ORDER SENT TO- ASSESSEE/AO/PR. CIT/ CIT (A)/ ITAT (DR)/GUARD FILE OF ITAT. BY ORDER / / TRUE COPY / / ASSISTANT REGISTRAR, SURAT