The ITO, Ward-1(1), Bhavnagar V. Shri Mehandiraza Sajjadali Merchant, Bhavnagar

ITA 2464/AHD/2011

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 94741 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 2 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-12-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 01-12-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 30-09-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B L SHARMA
• Keywords: Unexplained cash credit
• Section: 143(3); 133(6); 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD C BENCH (BEFORE SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER & SHRI KUL BHARAT, JUDICIAL MEMBER) ITA NO: 2464/AHD/2011 (ASSESSMENT YEAR: 2008-09) I.T.O. WARD-1(1), BHAVNAGAR V/S SHRI MEHANDIRAZA SAJJADALI MERCHANT MOTI TALAV ROAD, KUMBHARWADA, BHAVNAGAR (APPELLANT) (RESPONDENT) PAN: AOSPM 8312B APPELLANT BY : SHRI B.L.SHARMA, SR.D.R. RESPONDENT BY : NONE ( )/ ORDER DATE OF HEARING : 01-12-2015 DATE OF PRONOUNCEMENT : 04 -12-2015 PER ANIL CHATURVEDI, ACCOUNTANT MEMBER 1. THIS APPEAL FILED BY THE REVENUE IS AGAINST THE ORD ER OF CIT(A)-XX, AHMEDABAD DATED 25.07.2011 FOR A.Y. 2008-09. ITA NO 2464/ AHD/2011 . A.Y. 2008-09 2 2. IN THIS CASE, NONE APPEARED ON BEHALF OF ASSESSEE N OR ANY ADJOURNMENT APPLICATION WAS MOVED ON BEHALF OF ASSESSEE THOUGH AS PER THE OFFICE RECORDS, THE NOTICE INTIMATING THE DATE OF HEARING WAS SERVED UPON THE ASSESSEE. WE THEREFORE PROCEED TO DECIDE THE APPEAL , EX PARTE QUA THE ASSESSEE ON THE BASIS OF MATERIAL ON RECORD. 3. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERIAL ON RECORD ARE AS UNDER. 4. ASSESSEE IS AN INDIVIDUAL STATED TO BE ENGAGED IN T HE BUSINESS OF TRADING OF OLD AND USED MACHINERY AND ITS PARTS. ASSESSEE FILE D HIS RETURN OF INCOME FOR A.Y. 2008-09 ON 22.10.2008 DECLARING TOTAL INCOME A T RS.2,72,540/-. THE CASE WAS SELECTED FOR SCRUTINY AND THEREAFTER THE A SSESSMENT WAS FRAMED UNDER SECTION 143(3) VIDE ORDER DATED 30.12.2010 AN D THE TOTAL INCOME WAS DETERMINED AT RS. 24,89,320/-. AGGRIEVED BY THE ORD ER OF A.O., ASSESSEE CARRIED THE MATTER BEFORE LD. CIT(A) WHO VIDE ORDER DATED 25.07.2011 GRANTED SUBSTANTIAL RELIEF TO THE ASSESSEE. AGGRIEV ED BY THE AFORESAID ORDER OF LD. CIT(A), REVENUE IS NOW IN APPEAL BEFORE US A ND HAS RAISED THE FOLLOWING GROUNDS:- 1.THE LD.CIT(A)-XX, AHMEDABAD HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.15,26,835/- IN RESPECT OF CASH D EPOSIT IN BANK TREATED AS UNEXPLAINED CASH U/S 68 OF THE IT. ACT. 1.2THE LD.CIT(A)-XX, AHMEDABAD HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.3,68,365/- IN RESPECT OF CASH DE POSIT IN BANK TREATED AS UNEXPLAINED CASH CREDIT. 1.3 THE LD.CIT(A)-XX, AHMEDABAD HAS ERRED IN LAW AN D ON FACTS IN DELETING THE ADDITION OF RS.3,21,786/- IN RESPECT OF CASH DE POSIT IN BANK TREATED AS UNEXPLAINED CASH CREDIT. ITA NO 2464/ AHD/2011 . A.Y. 2008-09 3 2. THE CASH DEPOSITS IN BANK ACCOUNT AND CASH BORRO WINGS IN THE BOOKS HAVE NOT BEEN PROPERLY APPRECIATED BY THE CIT(A) AS THER E IS SUPPRESSION OF INCOME IN THE BOOKS. 3. IT IS THEREFORE, PRAYED THAT THE ORDER OF THE CI T(A) BE SET ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED TO THE ABOVE EXTE NT. 5. BEFORE US, AT THE OUTSET, LD. D.R. SUBMITTED THAT T HOUGH VARIOUS GROUNDS HAVE BEEN RAISED BUT ALL THE GROUNDS ARE CONNECTED AND T HE SOLITARY ISSUE IS ABOUT ADDITION U/S. 68 OF THE ACT. 6. DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND ON PERUSING THE BANK STATEMENT OF ASSESSEE THAT WAS MAINTAINED WITH ICIC I, BHAVNAGAR AND WHICH WAS CALLED FROM THE BANK U/S. 133(6) OF THE ACT, IT WAS NOTICED BY A.O THAT ASSESSEE HAD DEPOSITED RS. 18,95,000/- IN CASH AND RS. 3,21,784/- BY CHEQUES ON VARIOUS DATES (THE DETAILS OF WHICH ARE LISTED AT PAGE 2 OF THE ASSESSMENT ORDER). THE ASSESSEE WAS ASKED TO FURNIS H DOCUMENTARY EVIDENCE WITH RESPECT TO THE GENUINENESS, CREDITWORTHINESS O F THE DEPOSITORS FROM WHOM ASSESSEE HAD STATED TO HAVE RECEIVED UNSECURE D LOANS AND ALSO ASKED TO FURNISH SOURCE OF THE DEPOSITS, A.O NOTED THAT A SSESSEE COULD NOT FURNISH ANY SATISFACTORY EXPLANATION OF THE AMOUNTS CREDITE D BY CHEQUE AND THE CASH DEPOSITS. HE ACCORDINGLY CONSIDERED THE AGGREGATE A MOUNT OF DEPOSITS OF RS. 22,16,784/- AS UNEXPLAINED CASH CREDIT U/S. 68 OF THE ACT AND MADE ITS ADDITION. 7. AGGRIEVED BY THE ORDER OF A.O., ASSESSEE CARRIED THE MATTER BEFORE LD. CIT(A) WHO AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE DELETED THE ADDITION MADE BY A.O BY HOLDING AS UNDER:- ITA NO 2464/ AHD/2011 . A.Y. 2008-09 4 4.1 AS SEEN FROM THE FIRST PARA OF THE ASSESSMENT O RDER, APPELLANT FURNISHED THE DETAILS CALLED FOR BY THE A.O. THE CONTENTIONS OF THE LEARNED A.R. IN BRIEF ARE AS FOLLOW. APPELLANT IS A SMALL TRADER AND BROK ER-CUM-COMMISSION AGENT DEALING IN OLD AND USED MACHINES/MACHINERY PARTS FR OM SHIP-BREAKING; HE MAINTAINED BOOKS OF ACCOUNTS; THE BANK ACCOUNT (IN WHICH THE IMPUGNED CASH/CHEQUES WERE CREDITED) IS REFLECTED IN THE BOO KS; THE DEPOSITS IN THE ACCOUNT WERE MADE OUT OF SALE PROCEEDS OR BROKERAGE /COMMISSION RECEIVED OR THE CASH WITHDRAWN FROM THE SAME BANK ACCOUNT; T HERE WERE REGULAR WITHDRAWALS AND DEPOSITS IN THE ACCOUNT; THE CHEQUE S DEPOSITED OF RS.3,21,784/- WERE REALIZATIONS FROM DEBTORS; A.O. IGNORED THE FACT THAT THE APPELLANT IS ENGAGED IN BROKERAGE AND COMMISSION BU SINESS ALSO, BESIDES TRADING; HE FILED BEFORE A.O. THE SUPPORTING DETAIL S VIDE HIS LETTER DT. 04-10- 2010, WHICH CONTAINED SUMMARY OF CASH DEPOSITS IN A ND WITHDRAWS FROM THE ACCOUNT; AS REGARDS DEPOSITS RECEIVED FROM 24 PERSO NS IN ALL TOTALING TO RS.3,68,365/-, CONFIRMATIONS CONTAINING COMPLETE AD DRESS FROM ALL OF THEM WERE FILED BEFORE THE A.O.; THE DEPOSITS RANGED BET WEEN RS. 10,000/- AND RS. 18,500/-; KEEPING IN VIEW THE MEAGER AMOUNT, NO ADV ERSE INFERENCE CAN BE DRAWN THAT TOO WITHOUT ANY INQUIRY; AND THEREFORE I MPUGNED ADDITION OF RS.22,16,784/- IS UNWARRANTED. THE CONTENTIONS OF THE LEARNED A.R. ARE COGENT, SU BSTANTIATED AND STAND TO REASON. A.O. DID NOT BRING ANY MATERIAL TO CONTROVERT THE EXPLANATION OFFERED BEFORE HIM. HIS OBSERVATIONS AT PARA 3.2 ARE GENERAL AND THEY IGNORE THE FACT OF THE APPELLANT BEING ENG AGED IN COMMISSION AND BROKERAGE BUSINESS ALSO. THEREFORE, I HOLD THAT IMP UGNED ADDITION OF RS. 22,16,784/- IS WITHOUT ANY BASIS. IT IS DELETED. TH ESE GROUNDS OF APPEAL ARE ALLOWED. ITA NO 2464/ AHD/2011 . A.Y. 2008-09 5 8. AGGRIEVED BY THE AFORESAID ORDER OF LD. CIT(A), REV ENUE IS NOW IN APPEAL BEFORE US. 9. BEFORE US, LD. D.R. POINTED TO THE FINDINGS OF A.O AND SUPPORTED HIS ORDER. 10. WE HAVE HEARD THE LD. D.R. AND PERUSED THE MATERIAL ON RECORD. WE FIND THAT LD. CIT(A) WHILE DELETING THE ADDITION MADE BY A.O HAS NOTED THAT ASSESSEE HAD FURNISHED THE NECESSARY DETAILS INCLUDING THE S UMMARY OF CASH DEPOSITS AND WITHDRAWALS FROM THE BANK ACCOUNT AND WITH RESP ECT TO THE DEPOSITS RECEIVED FROM 24 PARTIES AGGREGATING TO RS. 3,68,36 5/-, ASSESSEE HAD FILED CONFIRMATIONS CONTAINING THEIR COMPLETE ADDRESSES. HE HAS FURTHER NOTED THAT A.O DID NOT MAKE ANY ENQUIRY ON THE BASIS OF THE AD DRESSES THAT WERE FURNISHED IN THE CONFIRMATIONS AND HAD PROCEEDED TO MAKE THE ADDITIONS AND THAT NO ADVERSE INFERENCE CAN BE DRAWN WITHOUT ANY INQUIRY. BEFORE US, REVENUE HAS NOT PLACED ANY MATERIAL ON RECORD TO CO NTROVERT THE FINDINGS OF LD. CIT(A). IN VIEW OF THESE FACTS, WE FIND NO REAS ON TO INTERFERE WITH THE ORDER OF LD. CIT(A) AND THUS THE GROUNDS OF REVENUE ARE DISMISSED. 11. IN THE RESULT, THE APPEAL OF REVENUE IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 04- 12 - 201 5. SD/- SD/- (KUL BHARAT) (ANIL CHATURVEDI) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD: TRUE COPY RAJESH COPY OF THE ORDER FORWARDED TO: -