M/s. Eden Healthcare Pvt. Ltd., Ahmedabad V. The ITO, Ward-2(1)(1), Ahmedabad

ITA 2360/AHD/2017

• Counselvise Citation: [2019] 114 COUNSELVISE.COM (IT) 6182 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-11-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 30-10-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Source of fund; Accommodation entries
• Section: 143(1); 143(2); 139(1); 68; 148

Judgement Text

, SMC IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, AHMEDABAD BEFORE SHRI MAHAVIR PRASAD, JUDICIAL MEMBER & SHRI WASSEM AHMED, ACCOUNTANT MEMBER ./ I.T.A. NO. 2360/AHD/2017 ( / ASSESSMENT YEAR: 2009-10) M/S. EDEN HEALTHCARE PVT. LTD. 301, ABHISHREE COMPLEX, OPP. OM TOWER, SATELLITE ROAD, SATELLITE AHMEDABAD- 380015 / VS. IT O - 2(1)(1) , ROOM NO- A/407, 4 TH FLOOR, PRATYAKSHKAR BHAWAN, AHMEDABAD ./ ./ PAN/GIR NO. : AAB CE4 032 E ( / APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : SHRI TEJ SHAH, AR / RESPONDENT BY : SHRI RAJDEEP SINGH, SR. DR / DATE OF HEARING 25/10/2019 !'# / DATE OF PRONOUNCEMENT 18/11/2019 $%/ O R D E R PER MAHAVIR PRASAD - JM: THIS APPEAL HAS BEEN PREFERRED BY THE ASSESSEE AGAI NST THE ORDER OF LD. CIT(A)-2/455/ITO, WD. 2(1)(1)/2016-17 DATED 05.09.2017 ARISING OUT OF ASSESSMENT ORDER DATED 28.11.2016 AN D ASSESSEE HAS TAKEN FOLLOWING GROUNDS: 1. THE HONBLE CIT(A) HAS ERRED IN UPHOLDING THE A DDITION MADE BY LEARNED A.O. AND HAS ADDED RS. 4,00,000/- T O THE INCOME OF ASSESSEE ON ACCOUNT OF SHARE APPLICATION MONEY RECE IVED DURING THE YEAR UNDER CONSIDERATION EVEN THOUGH PRIMARY INFORM ATION & EVIDENCE I.E. PAN, ITR, BALANCE SHEET & BANK STATEM ENTS WERE PROVIDED FOR VERIFICATION. THE ITO/CIT(A) NEITHER REJECTED NOR ITA NO.2360/AHD/2017 [M/S. EDEN HEALTHCARE PVT. LTD. VS. ITO] A.Y. 2009-10 - 2 - INVESTIGATED THE DOCUMENTS. THE ADDITION IS MADE M ERELY ON THE BASIS OF THIRD PARTY INFORMATION. 2. THE LEARNED ASSESSING OFFICER HAS ERRED LAW. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN THE LAW, THE I TO/CIT(A) HAS ERRED IN ASSESSING THE INCOME OF THE APPELLANT AT R S. 12,67,910/-, INSTEAD OF RS. 8,67,907/- RETURNED. AS SUCH AGGREG ATE ADDITIONS OF RS. 4,00,000/- MAY PLEASE BE DELETED. 3. THE LEARNED ITO/CIT(A) HAS NOT DONE ANY INVESTIG ATION ON HIS OWN IN ORDER TO ESTABLISH THE FACT THAT THE AMO UNT RECEIVED BY THE ASSESSEE WAS BOGUS AND HAS RELIED ON SECONDARY INFORMATION RECEIVED BY HIM. 4. EVEN AFTER SUBMISSION OF PRIMARY EVIDENCE & INFO RMATION FOR SOURCE OF FUND, IDENTITY, GENUINENESS, & CREDIT WOR THINESS OF PAYER BY THE ASSESSEE, THE LEARNED ITO/CIT(A) RELIED ON T HIRD PARTY STATEMENT WHICH IS NOT AVAILABLE ON RECORD. THE AD DITION MADE BY LD ITO/CIT(A) STANDS BAD IN LAW AND IS REQUIRED TO BE DELETED. 5. THE CIT(A) HAS TO INTERPRET THE LAW LIBERALLY IN VIEW OF FACT & MATERIALITY BASED ON VARIOUS JUDGMENTS. 6. THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR AMEN D ALL THE ABOVE GROUNDS OF APPEALS AT OR DURING THE COURSE OF HEARING. 2. FACTS OF THE CASE ARE THAT THE ASSESSEE FILED IT S RETURN OF INCOME FOR A. Y. 2009-10 ON 12/09/200 DECLARING TOTAL INCO ME AT RS.8,67,910/-. THE RETURN WAS PROCESSED U/S. 143(1) OF THE INCOME TAX ACT, 1961. SUBSEQUENTLY LD. AO RECEIVED AN INFORMAT ION FROM THE ADIT (INV.) UNIT-1, AHMEDABAD VIDE LETTER DATED 18/ 03/2015 IN RESPECT OF THE ASSESSEE COMPANY HAVING RECEIVED AMO UNTS TO THE TUNE OF RS.4.00.000/- FROM ONE SHRI PRATIK SHAH, DIRECTO R OF SARANG CHEMICALS PVT. LTD. AN ITS GROUP OF COMPANIES VIZ. S. J. SECURITIES LTD. AS ACCOMMODATION ENTRIES. THE DETAILS ARE AS U NDER:- DATE CHEQUE NO. BANK NAME PATYS NAME DEBIT NAME OF ENTRY GIVING COMPANY 01/01/2019 171422 DCB BANK EDEN HEALTH CARE 4,00,000/- S. J. SECURITIES AS THE ASSESSEE WAS A BENEFICIARY RECIPIENT OF FUN DS BY WAY OF ACCOMMODATION ENTRY AND HENCE THE CREDITS APPEARING IN ASSESSEE ITA NO.2360/AHD/2017 [M/S. EDEN HEALTHCARE PVT. LTD. VS. ITO] A.Y. 2009-10 - 3 - COMPANYS BANK ACCOUNTS FROM BOGUS CONCERN OF SHRI PRATIK SHAH WERE REQUIRED TO BE TREATED AS UNEXPLAINED CASH CRE DITS. IN VIEW OF THE ABOVE FACTS, THE REASONS WERE RECORDED AND NOTICE U /S. 148 OF THE ACT DATED 07/09/2015 WAS ISSUED AND SERVED TO THE ASSES SEE COMPANY. IN RESPONSE TO THE ABOVE NOTICE, THE ASSESSEE VIDE ITS LETTER DATED 13/01/2016 SUBMITTED TO THIS OFFICE ON 18/01/2016 F ILED ITS SUBMISSION ALONG WITH THE COPY RETURN OF INCOME FILED VOLUNTAR ILY U/S. 139(1) OF THE ACT DATED 12/09/2009 AND REQUESTED TO TREAT THE SAME AS RETURN OF INCOME AGAINST THE ABOVE NOTICE. DUE CHANGE OF INCU MBENT IN THE OFFICE A LETTER DATED 25/07/2016 WAS ISSUED TO THE ASSESSEE. FURTHER THE ASSESSEE VIDE THIS OFFICE LETTER DATED 13/10/20 16 WAS PROVIDED WITH THE REASONS RECORDED FOR REOPENING AND THE ASSESSEE WAS REQUESTED TO FILE ITS OBJECTION, IF ANY, AGAINST THE REOPENING O F THE ASSESSMENT. THE ASSESSEE DID NOT FILE THE OBJECTION AGAINST THE REA SONS RECORDED. NOTICE U/S. 143(2) OF THE ACT WAS ISSUED ON 01.11.2 016 AND A SHOW CAUSE LETTER DATED 01.11.2016 WAS ISSUED TO THE ASS ESSEE REQUESTING IT TO SHOW CAUSE AS TO WHY THE IMPUGNED ADDITION AS PE R THE REASONS RECORDED WITH REGARD TO THE ACCOMMODATION ENTRIES A MOUNTING TO RS. 4,00,000/- RECEIVED FROM M/S. S. J. SECURITIES LTD. SHOULD NOT BE ADDED TO THE TOTAL INCOME OF THE ASSESSEE COMPANY. IN RESPONSE TO THE ABOVE, NEITHER THE ASSESSEE NOR ITS AUTHORIZED REPRESENTATIVE ATTENDED AND NOT FILED ANY REPLY. I N SPITE OF SEVERAL OPPORTUNITIES OFFERED TO THE ASSESSEE, THE ASSESSEE FAILED TO FURNISH ANY REPLY IN RESPONSE TO THE ABOVE SHOW CAUSE NOTICE. AS THE ASSESSEE FAILED TO FURNISH ANY REPLY, THE LOAN OF RS. 4,00,0 00/- BY WAY OF ACCOMMODATION ENTRY RECEIVED FROM M/S. S. J. SECURI TIES LTD. IS TREATED AS UNEXPLAINED CASH CREDIT U/S. 68 OF THE A CT AND THE SAME IS ADDED TO THE TOTAL INCOME OF THE ASSESSEE COMPANY A GAINST THE ORDER OF LD. AO ASSESSEE PREFERRED APPEAL BEFORE THE LD. CIT (A) WHO CONFIRMED THE ACTION OF THE AO. ITA NO.2360/AHD/2017 [M/S. EDEN HEALTHCARE PVT. LTD. VS. ITO] A.Y. 2009-10 - 4 - 3. WE HAVE GONE THROUGH THE RELEVANT RECORD THE IMP UGNED ORDER IN THIS CASE LOWER AUTHORITIES MADE AND CONFIRMED ADDI TION OF RS. 4,00,000/- ON ACCOUNT OF SO-CALLED LOAN BY WAY OF A CCOMMODATION ENTRIES RECEIVED FROM M/S. S. J. SECURITIES LTD. T HE ASSESSEE COULD NOT APPEAR BEFORE THE LD. AO AND STATED NOTICE WAS NOT RECEIVED BY HIM BUT BEFORE THE LD. CIT(A) ASSESSEE SUBMITTED ALL TH E RELEVANT DETAILS PERTAINING TO CASH CREDIT OF RS. 4,00,000/- WHICH W ERE NOT EXAMINED BY THE LD. CIT(A) FOR THE REASON BEST KNOWN HIM. B UT IN THE INTEREST OF JUSTICE WE SET-ASIDE THIS MATTER TO THE FILE OF THE AO TO DECIDE THE MATTER AFTER CONSIDERING ALL THE DETAILS WHICH HAVE BEEN FILED BEFORE THE LD. CIT(A) OR TO BE FILED BY THE ASSESSEE, THER EAFTER, LD. AO WILL DECIDE MATTER IN ACCORDANCE WITH LAW. WE ALSO DIRE CT THE ASSESSEE NOT TO SEEK UNNECESSARILY ADJOURNMENT IN THIS CASE. 4. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE. SD/- SD/- (WASEEM AHMED) (MAHA VIR PRASAD) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD: DATED 18/11/2019 TANMAY TRUE COPY !' #' / COPY OF ORDER FORWARDED TO:- 1. / REVENUE 2. $ / ASSESSEE 3. ) *+ , / CONCERNED CIT 4. ,- / CIT (A) 5. 012 33*+, *+#, 56$)$ / DR, ITAT, AHMEDABAD 6. 289 : / GUARD FILE. BY ORDER / $% , ;/5 *+#, 56$)$ < THIS ORDER PRONOUNCED IN OPEN COURT ON 18/11/2019