The DCIT, Circle-14, Ahmedabad V. Shri Pemindersingh G.Arora, Ahmedabad

ITA 2394/AHD/2009

• Counselvise Citation: [2009] 115 COUNSELVISE.COM (IT) 0287 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-10-2009
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 14-10-2009
• Assessment Year: 2006-2007
• Appeal Filed On: 12-08-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NEETA SHAH
• Assessee Lawyers: S N DIVATIA
• Keywords: Unexplained cash credit; Opportunity of being heard
• Section: 143(3); 68

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL : B BENCH : AHMEDABAD (BEFORE HONBLE SHRI T.K. SHARMA, J.M. & HONBLE SH RI D.C. AGARWAL, A.M.) I.T.A. NO. 2394/AHD./2009 ASSESSMENT YEAR : 2006-2007 DEPUTY COMMISSIONER OF INCOME TAX, -VS.- SHRI PE RMINDERSINGH G. ARORA, AHMEDABAD CIRCLE-14, AHMEDABAD (P.A. NO. AEFPA 7064 R) (APPELLANT) (R ESPONDENT) APPELLANT BY : SHRI S.N. DIVATIA DEPARTMENT BY : SMT. NEETA SH AH O R D E R PER SHRI T.K. SHARMA, JUDICIAL MEMBER :- THIS APPEAL BY THE ASSESSEE IS AGAINST THE ORDER DATED 04.05.2009 OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-XXI, AHMEDABAD FOR THE ASSESSMENT YEAR 2006-2007 DELETING THE ADDITION OF RS.7,50,000/- MADE BY THE A.O. ON ACCOUNT OF UNEXPLAINED CASH CREDIT UNDER SECTION 68 OF THE INCOME TAX ACT, 1961. 2. BRIEFLY STATED THE FACTS ARE THAT FOR THE ASSESS MENT YEAR UNDER APPEAL, THE A.O. FRAMED THE ASSESSMENT UNDER SECTION 143(3) ON 22.12.2008, WHER EIN HE MADE AN ADDITION OF RS.7,50,000/- UNDER SECTION 68 OF THE INCOME TAX ACT IN RESPECT O F FOLLOWING THREE CREDITORS :- SR. NO. DATE AMOUNT (RS.) PARTICULARS 1. 18.06.2005 2,50,000/- RECEIVED FROM RAVINDRA KAUR 2. 13.03.2006 2,00,000/- RECEIVED FROM RAJYALAXMI S. SHARMA 3. 14.03.2006 3,00,000/- RECEIVED FROM PRITPAL KAUR TOTAL 7,50,000/- 3. ON APPEAL BEFORE THE LEARNED COMMISSIONER OF INC OME TAX(APPEALS), THE ASSESSEE HAS SUBMITTED THE BANK STATEMENTS, CONFIRMATION LETTERS FROM THE CREDITORS ALONGWITH WRITTEN SUBMISSION, WHICH WAS FORWARDED TO A.O. FOR HIS COM MENTS. DURING THE COURSE OF REMAND PROCEEDINGS, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ALLOWED ONCE AGAIN AN OPPORTUNITY OF BEING HEARD TO A.O. THE A.O. SUBMITT ED THE REMAND REPORT DATED 13.04.2009. A COPY OF REMAND REPORT WAS FURNISHED TO THE ASSESSEE , WHO FILED HIS REPLY ON 28.04.2009. THE 2 REPLY OF THE ASSESSEE HAS BEEN RE-PRODUCED BY THE L EARNED COMMISSIONER OF INCOME TAX(APPEALS) IN THE IMPUGNED ORDER. 4. AFTER CONSIDERING THE RIVAL SUBMISSIONS AS WELL AS REMAND REPORT, THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) DELETED THE ADD ITION OF RS.7,50,000/- STATING AS UNDER :- I HAVE CAREFULLY CONSIDERED THE VARIOUS ARGUMENTS OF THE AR ADVANCED IN THIS REGARD AND HAVE PERUSED THE ASSESSMENT ORDER A S WELL AS REMAND REPORT OF THE A.O. THE ASSESSING OFFICER HAS MADE T HE ADDITION OF RS.7,50,000/- CREDITED IN THE BANK ACCOUNT AS UNEXP LAINED CASH CREDIT U/S. 68 OF THE ACT BUT IN VIEW OF THE EVIDENCES FURNISHE D BY THE APPELLANT, IT CANNOT BE SAID THAT THE AMOUNTS CREDITED IN THE BAN K ACCOUNT WAS UNEXPLAINED CASH CREDITS. THE SOURCE OF THE DEPOSIT S IN THE BANK IS CLEARLY PROVED BY THE APPELLANT BY WAY OF BANK STATEMENTS, CONFIRMATION LETTERS, ETC. FROM THE ABOVE PARTIES. THEREFORE, THE AMOUNTS AGGREGATING TO RS.7,50,000/- CANNOT BE SAID TO BE UNEXPLAINED CASH CREDIT U/S. 68 OF THE ACT. 5. AGGRIEVED BY THE ORDER OF LEARNED COMMISSIONER O F INCOME TAX(APPEALS), THE REVENUE IS IN APPEAL BEFORE US. 6. AT THE TIME OF HEARING, SMT. NEETA SHAH, LD. DEP ARTMENTAL REPRESENTATIVE RELYING ON THE DECISION OF THE HON'BLE PUNJAB & HARIYANA HIGH COUR T IN THE CASE OF SUBHASH CHANDRA VERMA VS.- CIT REPORTED IN (2009) 311 ITR 239, CONTENDED THAT MERE IDENTIFICATION OF THE CREDITORS AND SHOWING CONFIRMATION THROUGH THE BANKING CHANNEL IS NOT SUFFICIENT TO ESTABLISH FINANCIAL CAPACITY OF THE DONOR. SHE ACCORDINGLY POINTED OUT THAT SINCE NEITHER BEFORE THE ASSESSING OFFICER NOR BEFORE THE LEARNED COMMISSIONER OF INCOME TAX(A PPEALS) FINANCIAL CAPACITY OF THE DONORS IS PROVED. THEREFORE, THE ADDITION OF RS.7,50,000/- BE RESTORED. 7. ON THE OTHER HAND, SHRI S.N. DIVATIA, LD. AUTHOR IZED REPRESENTATIVE OF THE ASSESSEE REITERATED THE SUBMISSION MADE BEFORE THE LEARNED C OMMISSIONER OF INCOME TAX(APPEALS). HE SUBMITTED THAT FINANCIAL CAPACITY OF ALL THE CREDIT ORS WERE DULY PROVED. IN SUPPORT OF THIS, HE SUBMITTED AS UNDER :- (I) RAJYALAXMI SHARMA IS ASSESSED TO TAX. HER CONFI RMATION WAS FILED. HER RETURN OF INCOME FOR THE ASSESSMENT YEAR 2006-07 WA S ALSO FURNISHED. THE COPY OF BANK ACCOUNT WAS ALSO FURNISHED. THE ADVANCE WAS REPAID TO HER ON 20.03.2006 BY CHEQUE FROM KOTAK MAHINDRA BANK A/C. OUT OF SALE PROCEED TRANSFERRED. 3 (II) MRS. PRITPAL KUR IS MOTHER OF THE ASSESSEE. SH E IS ASSESSED TO TAX. PAN NO. AND CONFIRMATION WAS DULY FURNISHED. THE AMOUNT WAS GIVEN FROM KOTAK SECURITIES LTD. AND NOT KOTAK MAHINDRA BANK HAS WRO NGLY STATED IN THE ASSESSMENT ORDER. THE BANK CERTIFICATE TO THIS EFFE CT WAS FURNISHED. (III) SHRI RAVINDRA SINGH IS THE BROTHER OF THE ASS ESSEE. THIS CREDIT ENTRY IS THE REPAYMENT FROM RAVINDRA SINGH OF ADVANCE OF RS.2.5 LAKHS GIVEN ON 07.08.2003 BY CHEQUE NO. 202004 OF ICICI BANK TO AS SESSEES COUSIN BROTHER ANOOP SINGH. IT WAS CREDITED BY WAY OF LON IN BOOKS OF ACE PIPELINE CONTRACTS PVT. LTD. AS PER B/S AS ON 31.03.2004 & 31.03.2005 (P/44-47) AND CONTRA LEDGER A/C. FILED (P/41) EVEN THE CONFIRMATION LETTER HAS BEEN FILED. THIS WAS EXPLAINED TO ASSESSING OFFICER IN REPLY DATED 044.04.2009. 8. THE LD. COUNSEL OF THE ASSESSEE SUBMITTED THAT T HE ASSESSEE HAS PROVED THE SOURCE OF CREDIT. IT IS NOT THE ONUS OF ASSESSEE TO PROVE THE SOURCE OF SOURCE. ALMOST ALL THE LOANS WERE REFUNDED. THEREFORE, THE VIEW TAKEN BY THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) BE UPHELD. 9. WE HAVE GIVEN OUR CAREFUL CONSIDERATION TO THE R IVAL SUBMISSIONS MADE BEFORE US AND HAVE PERUSED THE ORDERS OF AUTHORITIES BELOW. IT IS PERTINENT TO NOTE THAT THE ASSESSEE HAS FURNISHED FURTHER EVIDENCES BEFORE THE LEARNED COMMISSIONER O F INCOME TAX(APPEALS). THESE WERE FORWARDED TO A.O. FOR HIS COMMENTS. THE A.O. WAS DU LY HEARD. IN THE IMPUGNED ORDER, THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) HAS DIS CUSSED THE FINANCIAL CAPACITY OF VARIOUS CREDITORS. WITH REGARD TO THE FINANCIAL CAPACITY OF THE CREDITORS, THE ASSESSEE HAS FURNISHED COPY OF BANK ACCOUNTS OF ALL THE CREDITORS. AFTER CAREFU LLY GOING THROUGH THE SAME, IT CANNOT BE SAID THAT FINANCIAL CAPACITY OF THE CREDITORS IS NOT TAK EN INTO CONSIDERATION BY THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS). THEREFORE, IN OUR CONSIDERED OPINION, THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) HAS GIVEN COGEN T REASON FOR DELETING THE ADDITION OF RS.7.5 LAKHS IN RESPECT OF ALL THE THREE CREDITORS. WE INCLINED TO UPHOLD THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX(APPEALS). 10. IN THE RESULT, THE APPEAL OF THE DEPARTMENT IS DISMISSED. THE ORDER PRONOUNCED IN THE COURT ON 16.10.2009 SD/- SD/- (D.C. AGARWAL) (T.K. SHARMA ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 16 / 10 / 2009 4 COPY OF THE ORDER IS FORWARDED TO : 1) THE ASSESSEE (2) THE RESPONDENT 3) THE CIT(A) CONCERNED, (4) CIT CONCERNED, (5) D.R., ITAT, AHMEDABAD. TRUE COPY BY ORDER DEPUTY REGISTRAR, ITAT, AHMEDABAD LAHA/SR.P.S.