The DCIT, Circle-11, Ahmedabad V. Shri Indrajit Arjunbhai Parikh, Ahmedabad

ITA 2428/AHD/2010

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 67610 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-08-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 19-08-2013
• Assessment Year: 2007-2008
• Appeal Filed On: 30-07-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: O P BATHEJA
• Assessee Lawyers: ANIL R SHAH
• Keywords: Unexplained investment
• Section: 143(3); 133(6); 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH AHMEDABAD (BEFORE SHRI G. C. GUPTA, VP AND SHRI ANIL CHATURVE DI, AM) ITA NO.2428/AHD/2010 (AY: 2007-08) THE D. C. I. T., CIRCLE-11, ROOM NO.118, NARAYAN CHAMBERS, NEHRU BRIDGE CORNER, ASHRAM ROAD, AHMEDABAD VS SHRI INDRAJIT ARJUNBHAI PARIKH, 1, SAMVED GARDEN ESTATE, NEAR MANSI TOWER, PREMCHAND NAGAR ROAD, AHMEDABAD 380 015 P. A. NO. ABBPP 3006D (APPELLANT) (RESPONDENT) C. O. NO. 264/AHD/2010 (IN ITA NO.2428/AHD/2010 - (AY: 2007-08) SHRI INDRAJIT ARJUNBHAI PARIKH, 1, SAMVED GARDEN ESTATE, NEAR MANSI TOWER, PREMCHAND NAGAR ROAD, AHMEDABAD 380 015 P. A. NO. ABBPP 3006D VS THE D. C. I. T., CIRCLE-11, ROOM NO.118, NARAYAN CHAMBERS, NEHRU BRIDGE CORNER, ASHRAM ROAD, AHMEDABAD (CROSS OBJECTOR) (RESPONDENT) DEPARTMENT BY SHRI O. P. BATHEJA, SR. DR ASSESSEE BY SHRI ANIL R. SHAH, AR DATE OF HEARING: 19-08-2013 DATE OF PRONOUNCEMENT: 23 -08-2013 ORDER PER ANIL CHATURVEDI : THE APPEAL IS FILED BY THE REVENUE AGAINST THE ORDER OF THE LEARNED CIT(A)-XVI, AHMEDA BAD DATED 31 ST MAY, 2010 FOR THE ASSESSMENT YEAR 2003-04 AND THE C ROSS OBJECTION IS FILED BY THE ASSESSEE AGAINST THE AFORESAID ORD ER OF THE LEARNED CIT(A). ITA NO.2428/AHD/2010 & C. O. NO.264/AHD/2010 (AY 2007-08) SHRI INDRAJIT ARJUNBHAI PARIKH 2 2. THE BRIEF FACTS AS CULLED OUT FROM THE ORDERS OF THE AUTHORITIES BELOW ARE THAT THE ASSESSEE IS AN INDIVIDUAL HAVING INCOME FROM HOUSE PROPERTY AND FROM CAPITAL GAINS. HE FILED HIS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2007-08 ON 31-01-2008 DECLA RING TOTAL INCOME AT RS.21,88,040/-. THE CASE WAS SELECTED FOR SCRUTINY AND THEREAFTER ASSESSMENT WAS FRAMED U/S 143(3) OF THE ACT VIDE ORDER DATED 16-12-2009 AND THE TOTAL INCOME OF THE ASSESS EE WAS DETERMINED AT RS.2,84,84,330/-. AGGRIEVED BY THE OR DER OF THE LEARNED AO, THE ASSESSEE CARRIED THE MATTER BEFORE THE LEAR NED CIT(A). THE LEARNED CIT(A) VIDE ORDER DATED 31-05-2010 GRANTED PARTIAL RELIEF TO THE ASSESSEE. AGGRIEVED BY AFORESAID ORDER OF THE L EARNED CIT(A) THE REVENUE IS NOW IN APPEAL BEFORE US AND THE ASSESSEE HAS ALSO RAISED THE CROSS OBJECTION. 3. THE EFFECTIVE GROUNDS RAISED BY THE REVENUE READ AS UNDER:- (1). THE LD. CIT (A) ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.2,62,74,920/- MADE BY THE AO ON ACCO UNT OF UNEXPLAINED UNSECURED LOAN U/S 68 OF THE I. T. ACT WITHOUT PROPERLY APPRECIATING THE FACTS OF THE CASE AND THE MATERIAL BROUGHT ON RECORD BY THE AO. (1.1) THE LD. CIT(A)-XX, AHMEDABAD HAS ERRED IN LAW AND ON FACTS IN NOT APPRECIATING THAT, DESPITE ADEQUATE OPPORTUN ITY HAVING BEEN ALLOWED BY THE AO, THE ASSESSEE COULD NOT DISCHARGE THE ONUS OF ESTABLISHING THE CREDITWORTHINESS AND IDENTITY OF T HE CREDITORS AND THE GENUINENESS OF THE TRANSACTIONS. (2) THE LD. CIT(A) ERRED IN LAW AND ON FACTS IN DEL ETING THE ADDITION OF RS.19,96,742/- MADE BY THE AO ON ACCOUN T OF UNEXPLAINED INVESTMENT IN FIXED DEPOSITS U/S. 69 OF THE ACT WITHOUT PROPERLY APPRECIATING THE FACTS OF THE CASE AND THE MATERIAL BROUGHT ON RECORD BY THE AO. ITA NO.2428/AHD/2010 & C. O. NO.264/AHD/2010 (AY 2007-08) SHRI INDRAJIT ARJUNBHAI PARIKH 3 4. GROUND NO.1 OF THE APPEAL OF THE REVENUE IS WITH RESPECT TO ADDITION MADE U/S 68 OF THE ACT. DURING THE COURSE OF ASSESSMENT PROCEEDINGS ON PERUSAL OF THE BALANCE SHEET OF THE ASSESSEE, THE LEARNED AO NOTICED HAT THE ASSESSEE HAD SHOWN UNSEC URED LOAN OF RS.2,64,99,548/-. THE ASSESSEE WAS ASKED TO PROVIDE THE DETAILS VIZ. NAMES, ADDRESS, PERMANENT ACCOUNT NUMBER AND CONFIR MATION OF THE PARTIES. IN THE ABSENCE OF ANY RESPONSE FROM THE AS SESSEE, THE LEARNED AO CONSIDERED THE LOANS SHOWN BY THE ASSESS EE TO BE RECEIVED DURING THE FINANCIAL YEAR 2006-07. HE, THE REFORE, CONCLUDED THAT SINCE THE ASSESSEE HAD FAILED TO PROVIDE THE I DENTITY AND CREDITWORTHINESS OF THE CREDITORS AND GENUINENESS O F THE TRANSACTIONS, THE UNSECURED LOANS RECEIVED BY THE ASSESSEE WERE N OT GENUINE. HE ACCORDINGLY MADE ADDITION OF RS.2,64,99,548/- TO TH E INCOME OF THE ASSESSEE U/S 68 OF THE ACT. AGGRIEVED BY THE ORDER OF THE LEARNED AO, THE ASSESSEE CARRIED THE MATTER BEFORE THE LEARNED CIT(A). THE LEARNED CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE AND THE REMAND REPORT FROM THE LEARNED AO GRANTED SUBSTANTIAL RELIEF TO THE ASSESSEE BY HOLDING AS UNDER:- 5.2 SIMILARLY ON THE COMPARISON OF THE UNSECURED L OANS AS ON 31- 3-2006 & 31-3-2007, THE AO ACCEPTED THAT THE LOANS RECEIVED DURING F Y 2006-07 FROM ANKIT T. PATEL (SR. NO.1) BHAVIN I PARIKH, HUF (SR. NO.3), ICICI A/C. NO.10164 (SR. NO.8), NITIN KAILAS H (SR. NO.15), SHETH ENTERPRISE (SR. NO.22) AND VISHESH DISHIT PV T. LTD. (SR. NO.25) ARE PROPERLY EXPLAINED AS THE COUNTER PARTIES HAV E ALSO CONFIRMED THE SAME. 5.3 IN PARA 5 OF THE REMAND REPORT THE ASSESSING OF FICER HAS MENTIONED THAT THE UNSECURED LOANS RECEIVED FROM S IX PERSONS HAVE BEEN CONFIRMED, WHEREAS, IN THE CASE OF REMAINING 1 9 CASES THE APPELLANT HAS GIVEN ONLY COPY OF ACCOUNT WITH ADDRE SS BUT NO CONFIRMATIONS HAVE BEEN FILED. THUS THE APPELLANT H AS NOT PROVED CREDITWORTHINESS OF UNSECURED LOANS OF RS.1,51,52,3 12/- RECEIVED ITA NO.2428/AHD/2010 & C. O. NO.264/AHD/2010 (AY 2007-08) SHRI INDRAJIT ARJUNBHAI PARIKH 4 FROM 19 DIFFERENT PERSONS. SUCH 19 PERSONS ACCORDIN G TO THE AO ARE AS UNDER:- SR. NO. NAME OF THE CREDITOR CLOSING BALANCE AS ON 31-3-2006 CLOSING BALANCE AS ON 31-3- 2007 2. ASHWIN K RAWAL 500000 500000 4. BHAVIN I PARIKH 679170 464170 5. DHARNIDHAR CHEMICAL IND 844000 203000 6. GEOLOGISTICS RENT DEPOSIT 0 35300 7. HIRALAL POPATLAL SHAH HUF 425000 425000 9. KAILASHBEN SHAH 100000 122000 10. KALPESH C. SHAH 100000 11. LAJJA B. PARIKH 465460 193585 12. MONA V. SHAH 750000 750000 13. NIKITA A. PARIKH 830000 0 14. NIKUNJ A PATEL 200000 0 16. PADMINI I. PARIKJ 2401659 2321660 17. PARAS DYE CHEM 125000 139000 18. PUSHPBEN SHAH 764658 164658 19. SHRENA A. PARIKH 600000 0 20. S. M. DAVE 100000 0 21. SAROJINI T. PATEL 316741 316741 22. SHETH ENTERPRISE 0 100000 23. SPICA FIN STOCK LTD. 557422 412422 24. VAIBHAVI I PARIKH 1101485 1044610 5.4 FROM THE ABOVE, IT IS CLEAR THAT ONLY IN RESPEC T OF SR. NO.6, 9 & 17 THE CREDIT BALANCE HAS INCREASED DURING THE YEAR . IN RESPECT OF ALL OTHER 16 PARTIES EITHER THE BALANCE HAS REMAINED TH E SAME OR DECREASED FROM 31-3-2006. SINCE IN A Y 2006 07, T HE ASSESSMENT HAS BEEN PASSED U/S 143(3) & THERE IS NO INCREASE I N THE CREDITS IN RESPECT OF THE 16 PARTIES, THERE IS NO JUSTIFICATIO N IN MAKING ADDITION ITA NO.2428/AHD/2010 & C. O. NO.264/AHD/2010 (AY 2007-08) SHRI INDRAJIT ARJUNBHAI PARIKH 5 IN RESPECT OF SUCH PARTIES IN A Y 2007-08. IF AT AL L, THE AO IS CONVINCED THAT THE CREDITS FROM SUCH 16 PARTIES ARE NOT GENUINE, THEN THE AO CAN INITIATE PROCEEDINGS FOR THE RELEVANT AS SESSMENT YEAR IN WHICH SUCH CREDITS WERE RECEIVED BY THE APPELLANT B UT THE ADDITION CANNOT BE MADE IN A Y 2007-08 AS NO FRESH CREDITS A RE RECEIVED DURING THE A. Y. 2007-08. 5.5 AS STATED EARLIER, THE AO DID NOT ACCEPT THE LO ANS FROM THE FOLLOWING PARTIES IN HIS REMAND REPORT:- (I) GEOLOGISTICS RENT DEPOSIT (SR. NO.6) RS.35,300/ - ON THE GROUND THAT NOTICE U/S. 133(6) ISSUED TO THIS PARTY CAME UNSERVED. (II) KAILASHBEN SHAH (S. NO.9) ON THE GROUND THAT N O CONFIRMATION WAS FURNISHED FROM HER. (III) PARAS DYE CHEM (SR. NO.17) RS.14,000/- ON THE G ROU ND THAT THE APPELLANT IS SHOWING OPENING BALANCE OF RS.1,25,000/- AND CLOSING BALANCE OF RS.1,39,000/- FROM THIS PARTY WHEREAS PARAS DYE CHEM IS SHOWING ONLY THE BALANCE OF RS.14,000/-. THE DIFFERENCE IS OF RS.1,25,000/- I.E. IN THE BALANCE AS ON 31-3-2006. IN RESPECT OF THE CREDIT OF RS.35,300/- FROM GEOLOG ISTICS, THE APPELLANT FURNISHED COPY OF RENT ACCOUNT FOR A Y 20 08-09 AS PER WHICH THE RENT DEPOSIT AS ON 31-3-2007 HAS BEEN ADJ USTED AGAINST RENTAL INCOME IN A Y 2008-09 BY THE APPELLANT. IN R ESPECT OF PARAS DYE CHEM, THE CLOSING BALANCE SHOWN BY THE APPELLAN T IS RS.1,39,000/- AS AGAINST OPENING BALANCE OF RS.1,25 ,000/-. HOWEVER, PARAS DYE CHEM SHOWED THE BALANCE OR RS.14 ,000 AS ON 31-3-2007. THUS THERE IS DIFFERENCE OF RS.1,25,000/ - IN THE OPENING BALANCE. IN RESPECT OF OPENING BALANCE THE AO CANNO T MAKE ADDITION IN A Y 2007-08. SUCH ADDITIONS CAN BE MADE ONLY IN THE YEAR OF ITS CREDIT. THEREFORE, I HAVE NO HESITATION IN TREATING THE CREDITS FROM GEOLOGISTICS OF RS.35,300/- & PARAS DYE CHEM AS EXP LAINED IN A Y 2007-08. AS REGARDS THE INCREASE OF LOAN FROM RS.1, 00,000/- TO RS.1,22,000/- FROM KAILASHBEN SHAH, IT WAS STATED B Y THE APPELLANT THAT SHE IS SISTER OF HIS FATHER WHO EXPIRES IN THE MONTH OF NOV. 2009, THEREFORE, CONFIRMATION FROM HER COULD NOT BE PRODUCED BEFORE THE ASSESSING OFFICER. BEFORE ME ALSO NO EVIDENCE O F FRESH CREDITS OF RS.22,000/- FROM KAILASHBEN SHAH IN THE FORM OF THE COPY OF HER BANK ACCOUNT ETC. COULD BE PRODUCED BY THE APPELLAN T. THEREFORE I CONFIRM THE ADDITION OF RS.22,000/- ON THIS ACCOUNT . 5.6 IN SHORT ADDITION OF RS.22,000/- ONLY IS CONFI RMED. THE APPELLANT GETS RELIEF OF RS.2,62,74,290/-. ITA NO.2428/AHD/2010 & C. O. NO.264/AHD/2010 (AY 2007-08) SHRI INDRAJIT ARJUNBHAI PARIKH 6 5. AGGRIEVED BY THE AFORESAID ORDER OF THE LEARNED CIT(A), THE REVENUE IS NOW IN APPEAL BEFORE US. 6. BEFORE US THE LEARNED DR RELIED ON THE ORDER OF THE AO WHEREAS THE LEARNED AR REITERATED THE SUBMISSIONS MADE BEFO RE THE LEARNED CIT(A). HE THUS SUPPORTED THE ORDER OF THE LEARNED CIT(A). 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIALS ON RECORD. THE LEARNED CIT(A) WHILE DELETING THE AD DITIONS HAS GIVEN A FINDING THAT IN RESPECT OF 16 PARTIES EITHER THE BALANCE HAS REMAINED THE SAME OR DECREASED FROM 31-03-2006. HE HAS FURTH ER GIVEN A FINDING THAT THERE IS NO INCREASE IN THE CREDITS IN RESPECT OF THE 16 PARTIES. IN HIS ORDER, HE HAS ALSO GIVEN THE REASON S FOR DELETING THE ADDITIONS. BEFORE US, THE REVENUE COULD NOT CONTROV ERT THE FINDINGS OF THE LEARNED CIT(A) BY BRINGING ANY CONTRARY MATERIA L ON RECORD. IN VIEW OF THE AFORESAID FACTS, WE FIND NO REASON TO I NTERFERE WITH THE ORDER OF THE LEARNED CIT(A). THUS, THIS GROUND OF A PPEAL RAISED BY THE REVENUE IS DISMISSED. 8. SECOND GROUND OF APPEAL IS WITH RESPECT TO ADDIT ION OF RS.19,96,742/- MADE ON ACCOUNT OF UNEXPLAINED INVES TMENT IN FIXED ASSETS U/S 69 OF THE ACT. DURING THE COURSE OF ASSE SSMENT PROCEEDINGS ON PERUSAL OF THE BALANCE SHEET, THE LE ARNED AO NOTICED THAT THE ASSESSEE HAD SHOWN FIXED ASSETS OF RS.19,9 6,742/-. THE ASSESSEE WAS ASKED TO PROVIDE THE DETAILS OF ACQUIS ITION OF FIXED ASSETS ALONG WITH COPIES OF PURCHASE BILLS. SINCE, THE ASSESSEE DID NOT FURNISH THE EVIDENCE WITH RESPECT TO INVESTMENT IN FIXED ASSETS, THE INVESTMENT OF RS.19,96,742/- WAS CONSIDERED AS UNDISCLOSED ITA NO.2428/AHD/2010 & C. O. NO.264/AHD/2010 (AY 2007-08) SHRI INDRAJIT ARJUNBHAI PARIKH 7 INCOME OF THE ASSESSEE U/S 69 OF THE ACT. AGGRIEVED BY THE ORDER OF THE LEARNED AO, THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LEARNED CIT(A). THE LEARNED CIT(A) AFTER CONSIDERIN G THE SUBMISSIONS MADE BY THE ASSESSEE DELETED THE ADDITION BY HOLDIN G AS UNDER:- 5. I HAVE CONSIDERED THE SUBMISSIONS & THE REMAND REPORT OF THE AO. THE FINAL DISCREPANCIES ARE DISCUSSED BY THE AP PELLANT IN HIS REJOINDER DATED 18-05-2010. 5.1 AS REGARDS THE COMPARISON OF THE ASSETS AS ON 3 1-3-2006 AND 31-3-2007, IT IS SEEN FROM THE ABOVE CHART THAT THE RE WAS INCREASE OF RS.3,00,988/- IN THE GODOWN CONSTRUCTION ACCOUNT FR OM A Y 2006-07 TO A Y 2007-08. ALL OTHER FIGURES OF FIXED ASSETS E ITHER REMAINED THE SAME OR HAD DECREASED. THE AO VERIFIED THE INVESTME NT OF RS.3,00,988/- IN THE GODOWN CONSTRUCTION ACCOUNT AN D STATED THAT THIS INVESTMENT PERTAINS TO A Y 2008-09. ON VERIFIC ATION I FIND THAT ADDITIONAL AMOUNT OF RS.3,00,988/- WAS SPENT BY THE APPELLANT ON THE GODOWN CONSTRUCTION DURING F Y 2006-07 DURING 5 -4-2006 TO 19- 3-2007 I. E. RELEVANT A Y 2007-08, THEREFORE, THE O BSERVATION OF THE AO THAT THE INVESTMENT FALLS IN A Y 2008-09 IS WRON G ON THIS POINT. AS THE INVESTMENT OF RS.3,00,988/- IS RECORDED IN T HE BOOKS OF THE APPELLANT AND THE SOURCE THEREOF IS PROPERLY EXPLAI NED, THE AO WAS NOT JUSTIFIED IN NOT ACCEPTING THE INVESTMENT OF RS .3,00,988/- AS EXPLAINED IN A Y 2007-08. HE IS DIRECTED TO DELETE THE ADDITION OF RS.19,96,742/- UNDER FIXED ASSETS. 9. AGGRIEVED BY THE AFORESAID ORDER OF THE LEARNED CIT(A), THE REVENUE IS NOW IN APPEAL BEFORE US. 10. BEFORE US, THE LEARNED DR RELIED ON THE ORDER O F THE LEARNED AO. ON THE OTHER HAND, THE LEARNED AR SUPPORTED THE ORDER OF THE LEARNED CIT(A). 11. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS ON RECORD. WE FIND THAT THE LEARNED CIT(A) WHILE DE LETING THE ADDITION HAS GIVEN A FINDING THAT THE INVESTMENT OF RS.3,00, 988/- IN RESPECT OF GODOWN WAS RECORDED IN THE BOOKS OF ACCOUNTS OF THE ASSESSEE AND ITA NO.2428/AHD/2010 & C. O. NO.264/AHD/2010 (AY 2007-08) SHRI INDRAJIT ARJUNBHAI PARIKH 8 THE SOURCE THERE OF WAS ALSO PROPERLY EXPLAINED. HE HAS FURTHER NOTED THAT ALL OTHER FIGURES OF FIXED ASSETS EITHER REMAI NED THE SAME OR HAS DECREASED. BEFORE US, THE REVENUE COULD NOT CONTROV ERT THE FINDINGS OF THE LEARNED CIT(A) BY BRINGING ANY CONTRARY MATE RIALS ON RECORD. IN VIEW OF THE AFORESAID FACTS, WE FIND NO REASON TO I NTERFERE WITH THE ORDER OF THE LEARNED CIT(A) AND THUS, THIS GROUND O F APPEAL OF THE REVENUE IS ALSO DISMISSED. 12. IN THE RESULT, THE APPEAL OF THE REVENUE IS DIS MISSED. 13. AT THE TIME OF HEARING, THE LEARNED AR DID NOT PRESS THE CROSS OBJECTION OF THE ASSESSEE AND HENCE, THE SAME IS DI SMISSED AS NOT PRESSED. 14. IN THE RESULT, THE APPEAL OF THE REVENUE AS WEL L AS THE CROSS OBJECTION OF THE ASSESSEE, BOTH ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 23-08-2013. SD/- SD/- (G. C. GUPTA) VICE PRESIDENT (ANIL CHATURVEDI) ACCOUNTANT MEMBER LAKSHMIKANTA DEKA/- COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE BY ORDER ASST. REGISTRAR, ITAT, AHM EDABAD ITA NO.2428/AHD/2010 & C. O. NO.264/AHD/2010 (AY 2007-08) SHRI INDRAJIT ARJUNBHAI PARIKH 9 1. DATE OF DICTATION: 20-08-13 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE T HE DICTATING MEMBER: 21-08-13 OTHER MEMBER: 3. DATE ON WHICH APPROVED DRAFT COMES TO THE SR. P. S./P.S.: 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE TH E DICTATING MEMBER FOR PRONOUNCEMENT: 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE S R. P.S./P.S.: 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK: 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK: 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER: 9. DATE OF DESPATCH OF THE ORDER: