Sh. Anil Haryani, New Delhi V. ITO, New Delhi

ITA 2463/DEL/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 91529 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 3 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-07-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC 2
• Next Hearing Date: 01-07-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 22-04-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P D TAN EJA
• Assessee Lawyers: S C MALHOTRA
• Keywords: Business expenditure
• Section: 143(3); 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH SMC-2: NEW DELHI BEFORE SHRI I.C. SUDHIR, JUDICIAL MEMBER I.T.A .NO. 2463/DEL/2014 (ASSESSMENT YEAR- 2008-09) ANIL HARYANI, M-10, NDSE, PART-II, NEW DELHI. AAAPH7479J VS ITO, WARD 24(2), NEW DELHI. APPELLANT BY SH. S.C. MALHOTRA, CA RESPONDENT BY SH. P.D. TANEJA, SR. DR DATE OF HEARING 01/07/2015 DATE OF PRONOUNCEMENT 30/07/2015 O R D E R THE ASSESSEE HAS QUESTIONED THE FIRST APPELLATE OR DER ON THE GROUND THAT THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ADDITION OF RS. 11,90,000/- U/S 68 OF THE ACT. 2. ARGUMENTS ADVANCED BY THE PARTIES HAVE BEEN CONS IDERED IN VIEW OF THE ORDERS OF THE AUTHORITIES BELOW AND THE MATERIAL AVAILABLE ON RECORD. 3. THE FACTS IN BRIEF ARE THAT THE ASSESSEE WAS CAR RYING ON BUSINESS UNDER THE NAME AND STYLE OF M/S DEEP APPAREL AS A PROPRIETOR FOR T HE LAST ABOUT TEN YEARS. THE PROPRIETARY CONCERN CARRIES ON THE BUSINESS OF FABR ICATION OF GARMENTS. THE ASSESSEE IS ALSO PARTNER IN THE FIRM OF DEEPSONS SOUTHEND. AGA INST THE RETURNED LOSS OF RS. 1,41,000/- FROM THE PROPRIETARY BUSINESS AND THE IN COME OF RS. 4,416/- THE ASSESSMENT U/S 143(3) HAS BEEN FRAMED ON THE ADDITION OF RS. 1 1,90,000/- U/S 68/56(2) OF THE ACT AND RS. 50,673/- ON ACCOUNT OF DISALLOWANCE OUT OF BUSINESS EXPENSES HAS BEEN MADE. THE AO DISCUSSING THE FACTS OF THE CASE, WAS OF THE VIEW THAT ASSESSEE HAS ROTATED HIS OWN UNACCOUNTED MONEY IN THE GARB OF CREDITOR AND B ROUGHT BACK THE SAID MONEY IN THE BOOKS OF ACCOUNT BY WAY OF BOGUS CREDITOR. THE LD. CIT(A) HAS UPHELD THE SAME. ITA NO. 2463/D/2014 ANIL HARYANI 2 4. THE LD. AR CONTENDED THAT THERE WAS NOTHING ON R ECORD TO ARRIVE A CONCLUSION BY THE AUTHORITIES BELOW THAT ASSESSEE HAD ROTATED HIS OWN UNACCOUNTED MONEY OF RS. 11,90,000/- UNDER THE GARB OF CREDITOR AND THUS, IT IS ONLY A PRESUMPTION. ON THE CONTRARY THE ASSESSEE HAD FURNISHED ALL THE NECESSARY EVIDEN CES IN SUPPORT OF THE GENUINENESS OF THE CLAIM. HE REFERRED PAGE NOS. 1 TO 36 OF THE PA PER BOOK I.E. COPIES OF LETTER DATED 12/08/2010 ALONG WITH CONFIRMATION OF DEEPSONS DEPA RTMENTAL STORE, LETTER DATED 12/10/2010 ALONG WITH ACKNOWLEDGMENTS FOR FILING RE TURNS OF INCOME BY DEEPSONS DEPARTMENTAL STORE FOR ASSESSMENT YEARS 2006-07 TO 2008-09, LEDGER ACCOUNTS OF DEEP APPAREL (PROP.) IN THE BOOKS OF DEEPSONS DEPARTMENT AL STORE FOR THE F.Y. 2003-04 AND 2004-05, LETTER DATED 29/11/2010 ALONG WITH ACKNOWL EDGEMENT WITH ACCOUNT OF DEEP APPAREL FOR THE ASSESSMENT YEARS 2009-10 AND 2010-1 1. HE ALSO REFERRED THE ASSESSMENT ORDERS IN THE CASE OF THE ASSESSEE FRAMED U/S 143(3 ) FOR THE ASSESSMENT YEARS 2005-06 AND 2006-07. 5. THE LD. DR, ON THE OTHER HAND, PLACED RELIANCE O N THE ORDERS OF THE AUTHORITIES BELOW. 6. CONSIDERING THE ABOVE SUBMISSION, I FIND THAT TH E ASSESSEE IN SUPPORT OF THE CLAIMED CREDIT OF RS. 11,90,000/- HAD FURNISHED ALL THE POSSIBLE EVIDENCES LIKE CONFIRMATION OF ACCOUNT OF THE CREDITOR DEEPSONS DE PARTMENTAL STORE MAKING IT CLEAR THAT THE SAID FIRM IS REGULAR INCOME TAX ASSESSEE; LEDGER ACCOUNTS FOR FINANCIAL YEARS 2003-04 AND 2004-05; ACKNOWLEDGEMENTS FOR FILING TH E INCOME TAX RETURNS OF THE CREDITOR FOR ASSESSMENT YEARS 2006-07, 2007-08 AND 2008-09. WITHOUT EXAMINING THE CORRECTNESS OF THESE DOCUMENTS, IN MY OPINION, THE AO WAS NOT JUSTIFIED IN ARRIVING AT A PRESUMPTION THAT ASSESSEE HAD ROTATED HIS OWN UNACC OUNTED MONEY IN THE GARB OF CREDITOR AND BROUGHT BACK THE SAID MONEY IN THE BOO KS OF ACCOUNT BY WAY OF A BOGUS CREDITOR. A LOAN TRANSACTION HAS TO BE TREATED AS A LOAN TRANSACTION ONLY AND IT WOULD BE EXAMINED IN THE LIGHT OF THE PROVISIONS OF SECTION 68 AND NOT UNDER THE PROVISIONS OF SECTION 56(2)(V). I THUS, WHILE SETTING ASIDE THE ORDERS OF THE AUTHORITIES BELOW DIRECT THE ITA NO. 2463/D/2014 ANIL HARYANI 3 AO TO DELETE THE ADDITION OF RS. 11,90,000/- MADE U /S 68 OF THE ACT. THE GROUND IS ACCORDINGLY ALLOWED. 7. IN THE RESULT, THE APPEAL IS ALLOWED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 30/07 /2015 SD/- (I.C. SUDHIR) JUDICIAL MEMBER DATED: 30 /07/2015 *KAVITA, P.S. COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI ITA NO. 2463/D/2014 ANIL HARYANI 4 SL. NO. DESCRIPTION DATE 1. DATE OF DICTATION BY THE AUTHOR 22.07.2015 2. DRAFT PLACED BEFORE THE DICTATING MEMBER 24.07. 2015, 30.07.2015 3. DRAFT PLACED BEFORE THE SECOND MEMBER 30.07.2015 4. DRAFT APPROVED BY THE SECOND MEMBER 30.07.2015 5. DATE OF APPROVED ORDER COMES TO THE SR. PS 30.07 .2015 6. DATE OF PRONOUNCEMENT OF ORDER 30.07.2015 7. DATE OF FILE SENT TO THE BENCH CLERK 31.07.2015 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK 9. DATE OF DISPATCH OF ORDER