The ITO, Ward-1(3), Surat V. M/s. Jaibaba Freight Co.Pvt.Ltd., Surat

ITA 252/AHD/2010

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 60435 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 3 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-05-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2006-2007
• Appeal Filed On: 28-01-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: RAMESH MAL
• Keywords: Corroborative evidences

Judgement Text

ITA NO.2 52/AHD/2010 ASSESSME NT YEAR 2006-07 . 1 IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, A HMEDABAD (BEFORE SHRI G.C.GUPTA VICE PRESIDENT & SHRI ANIL C HATURVEDI, A.M.) I.T.A. NO.252 /AHD/2010 (ASSESSMENT YEAR: 2006- 07) INCOME TAX OFFICER, WARD 1(3), AAYAKAR BHAVAN, MAJURA GATE, SURAT. (APPELLANT) VS. M/S. JAIBABA FREIGHT CO. PVT. LTD., PLOT NO.5, SUIRVEY NO.288/1, KRISHNA OIL MILLS COMPOUND, B/H JAIPUR GOLDEN TRANSPORT, POONA KUMBHARIA ROAD, SURAT. (RESPONDENT) PAN: AABCJ 3092 M BY REVENUE : SHRI VINOD TANWANI, SR. D.R. BY ASSESSEE : SHRI RAMESH MALPANI. ( )/ ORDER DATE OF HEARING : 15-5-2012 DATE OF PRONOUNCEMENT : 25-5-2012 PER: SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER. THIS APPEAL IS FILED BY THE REVENUE AGAINST THE OR DER OF LD. CIT (A)-I, SURAT DATED 16-11-2009 FOR THE ASSESSMEN T YEAR 2006- 07. 2. THE REVENUE HAS RAISED THE FOLLOWING GROUND OF A PPEAL:- ITA NO.2 52/AHD/2010 ASSESSME NT YEAR 2006-07 . 2 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. CIT (A)-I, SURAT HAS ERRED IN DELET ING THE ADDITION MADE U/S. 68 OF THE ACT OF RS.28,53,000/- . 3. THE ASSESSEE COMPANY IS ENGAGED IN THE BUSINESS OF TRANSPORTATION. THE ASSESSEE FILED ITS RETURN OF IN COME FOR A.Y. 2006-07 ON 11-10-2006 BY DECLARING NIL INCOME. THE CASE WAS TAKEN UP FOR SCRUTINY. DURING THE COURSE OF ASSESSM ENT PROCEEDINGS, IT WAS OBSERVED BY THE A.O. THAT THE A SSESSEE HAS SHOWN LOANS OF RS.39,85,110/-. THE ASSESSEE FILED C ONFIRMATION LETTER OF UNSECURED LOANS. ON ITS SCRUTINY, THE A.O . OBSERVED THAT CASH WAS DEPOSITED IN THE ACCOUNT OF LOAN CREDITORS BEFORE ADVANCEMENT OF THE LOAN AMOUNT TO ASSESSEE. THE ASS ESSEE WAS ASKED TO EXPLAIN AS TO WHY THE CASH DEPOSITED IN TH E ACCOUNT OF LOAN CREDITORS NOT BE TREATED AS UNEXPLAINED CASH C REDITS IN ITS HAND. THE ASSESSEE FURNISHED COPY OF RETURN OF INCO ME, BANK STATEMENTS OF PARTIES, CASH FLOW STATEMENT FOR THE PERIOD 1-4-05 TO 31-3-2006, COPY OF INCOME TAX RETURN ALONG WITH CAP ITAL ACCOUNT, BALANCE SHEET OF PREVIOUS YEAR TO JUSTIFY THE OPENI NG BALANCE, COPY OF CAPITAL ACCOUNT AND BALANCE SHEET FOR TWO A SSESSMENT YEARS SHOWING THE CREDITWORTHINESS. IT WAS FURTHER STATED BY THE ASSESSEE THAT ALL THE PARTIES WHO HAVE ADVANCED LOA NS WERE INCOME TAX ASSESSEES SINCE LONG. ALL THE LOANS WERE PAID OUT BY ITA NO.2 52/AHD/2010 ASSESSME NT YEAR 2006-07 . 3 ACCOUNT PAYEE CHEQUES. TO EXAMINE THE CREDITWORTHIN ESS SUMMONS WERE ISSUED TO 5 PARTIES WITH A DIRECTION T O PRODUCE SUPPORTING EVIDENCE IN RESPECT OF LOANS GIVEN TO AS SESSEE FOR PROVING CREDITWORTHINESS. THE PARTIES DID NOT APPEA R BEFORE THE A.O. THE A.O. CONCLUDED THAT AS THE ASSESSEE DID NO T DISCHARGE ITS PRIMARY ONUS OF PROVING THE NATURE AND SOURCE O F CREDITS, IDENTITY AND CAPACITY OF THE CREDITOR, HE CONSIDERE D RS.28,53,000/- AS THE INCOME OF THE ASSESSEE U/S. 68 OF THE I. T. ACT. AGGRIEVED BY THE ACTION OF THE A.O., THE ASSESSEE PREFERRED A PPEAL BEFORE THE CIT (A). 4. BEFORE CIT (A) IT WAS SUBMITTED THAT THE ADDIT IONS WERE MADE BY THE A.O. ONLY FOR THE REASON THAT THE CASH HAS BEEN DEPOSITED BY THE LENDERS IN THEIR BANK ACCOUNT BY I SSUING CHEQUES TO THE ASSESSEE. IT WAS SUBMITTED BY THE ASSESSEE T HAT IT HAD FURNISHED CASH FLOW STATEMENT PROVIDED BY THE CREDI TORS SO AS TO PROVE THE CREDITWORTHINESS OF THE CREDITORS. IT HAD ALSO SUBMITTED THEIR CAPITAL ACCOUNT AND BALANCE SHEET. IT WAS FUR THER SUBMITTED BY THE ASSESSEE THAT MERELY BY ISSUING SUMMONS TO FIVE PARTIES, THE A.O. CANNOT CONCLUDE THAT ALL THE FIVE PARTIES ARE UNEXPLAINED. HE SUBMITTED THAT IT HAS DISCHARGED ITS ONUS OF PRO VING THE IDENTITY, GENUINENESS OF THE TRANSACTIONS AND CREDI TWORTHINESS OF THE LENDERS BY GIVING COPY OF CONFIRMATION LETTERS, BANK STATEMENT, ITA NO.2 52/AHD/2010 ASSESSME NT YEAR 2006-07 . 4 BALANCE SHEET AND CAPITAL ACCOUNT. THE ASSESSEE FU RTHER RELIED ON THE DECISIONS OF GUJARAT HIGH COURT IN THE CASE OF MURLIDHAR LOHARIMAL VS. CIT (2006) 280 ITR 512 (GUJ.) AND ROH INI BUILDERS VS. DCIT. (2002) 76 TTJ 521 (AHD) 5. CIT (A) ACCEPTED THE CONTENTIONS OF THE ASSESSE E AND DELETED THE ADDITION MADE BY THE A.O. BY HOLDING AS UNDER :- 2.3.2. THE A.O. HAS ACCEPTED THE CHEQUE DEPOSITED PORTION BUT HAS ADDED THE CASH DEPOSITED PORTION. T HE APPELLANT HAS ARGUED THAT FROM THE CASH FLOW STATEM ENT PROVIDED BY THE CREDITORS SOURCE OF CASH AS WELL AS THEIR CREDITWORTHINESS IS FULLY EXPLAINED. THE APPELLANT HAS FURNISHED CAPITAL ACCOUNT AND BALANCE SHEET OF THES E LENDERS WHICH CLEARLY PROVE THE CREDITWORTHINESS OF THE LEN DERS. THE HONBLE RAJASTHAN HIGH COURT, IN THE CASE OF ARAVAL I TRADING CO. VS. ITO REPORTED IN (2008) 8 DTR-1999, HAS STAT ED AS UNDER :- ONCE THE EXISTENCE OF THE CREDITORS IS PROVED AND SUCH PERSONS OWN THE CREDITS WHICH ARE FOUND IN BOOKS OF THE ASSESSEE, THE ASSESSEES ONUS STANDS DISCHARGED AND THE LATTER IS NOT FURTHER REQUIRED TO PROVE SOURCE FROM WHICH THE CREDITORS COULD HAVE ACQUIRED THE MONEY DEPOSITED W ITH HIM AND, THEREFORE, ADDITION CANNOT BE SUSTAINED IN ABS ENCE OF ANYTHING TO ESTABLISH THAT THE SOURCE OF THE CREDIT ORS DEPOSIT FLEW THE ASSESSEE ITSELF. THE CASE OF THE APPELLANT ON THIS ISSUE IS SQUARELY COVERED IN ITS FAVOUR BY THE JUDGMENTS OF HONBLE ITAT, AH MEDABAD AND GUJARAT HIGH COURT IN FOLLOWING CASE LAWS:- ITA NO.2 52/AHD/2010 ASSESSME NT YEAR 2006-07 . 5 ROHINI BUILDERS VS. D.C.I.T. (2002) 76 TTJ(AHD) 52 1. DCIT VS. ROHINI BUILDERS (2002) 256 ITR 360 (GUJ). IN THE ABOVE CASE, HONBLE JURISDICTIONAL ITAT,AHME DABAD HAS LAID DOWN AS FOLLOWS:- ..IT HAS ALSO PROVED CAPACITY OF THE CREDITORS B Y SHOWING THAT THE AMOUNTS WERE RECEIVED BY THE ASSESSEE BY A CCOUNT PAYEE ONLY CHEQUES DRAWN FROM THE BANK ACCOUNT OF T HE CREDITORS AND THE ASSESSEE IS NOT EXPECTED TO PROVE THE GENUINENESS OF THE CASH DEPOSITED IN THE BANK ACCOU NTS OF THE CREDITORS BECAUSE UNDER LAW THE ASSESSEE CAN B E ASKED TO PROVE SOURCE OF CREDIT IN HIS BOOKS BUT NOT THE SOURCE OF SOURCE (PARA 7 OF THE ORDER). 6. IN THE ABOVE CASE, HONBLE JURISDICTIONAL ITAT, AHMEDABAD HAS CLEARLY LAID DOWN AS FOLLOWS:- 2.3.3. IT IS SEEN THAT IN MOST OF THE CASES, THE L OANS HAVE BEEN RETURNED BY CHEQUE ALONG WITH INTEREST AFTER D EDUCTING TDS IN THE SAME FINANCIAL YEAR IN WHICH THE LOANS W ERE TAKEN AS IS CLEAR FROM THE TABLE PRODUCED ABOVE. IF THE CREDITOR IS UNABLE TO EXPLAIN THE CASH DEPOSIT THEN THE ADDITION CAN BE MADE ONLY IN HIS HANDS AND NOT IN T HE HANDS OF THE APPELLANT. THE APPELLANT HAS COMPLETELY DISC HARGED ITS ONUS BY SUBMITTING THE DOCUMENTS MENTIONED ABOVE. T HE A.O. HAS NOT BROUGHT ANY MATERIAL ON RECORD TO SHOW THAT THE CREDITWORTHINESS IS NOT PROVED EXCEPT SAYING THAT T HERE IS A CASH DEPOSIT JUST BEFORE ISSUING THE LOAN CHEQUE. T HE APPELLANT HAS PROVED THE CREDITWORTHINESS OF THE EV ERY DEPOSITOR BY FILING THE COPY OF INCOME TAX RETURN A LONG WITH CAPITAL ACCOUNT AND BANK STATEMENT. THIS SHOWS THAT THE ITA NO.2 52/AHD/2010 ASSESSME NT YEAR 2006-07 . 6 CREDITWORTHINESS ALSO HAS BEEN PROVED. FURTHER, ASK ING FOR SOURCE OF CASH DEPOSITED AMOUNTS TO ASKING FOR SOUR CE OF SOURCE. AS PER THE SETTLED POSITION OF LAW SOURCE OF SOURCE CANNOT BE ASKED. IN VIEW OF THE ABOVE, I AGREE WITH THE APPELLANT THAT IT HAD DISCHARGED ITS ONUS AND SINCE THE A.O. HAS NOT BROUGHT ANY FURTHER MATERIAL ON RECORD DISP ROVING THE LOANS THE ADDITION CANNOT BE MADE. THE ADDITION MAD E BY THE A.O. IS, THEREFORE, DELETED AND THIS GROUND OF APPEAL IS ALLOWED. 7. AGGRIEVED BY THE DECISION OF CIT (A), THE REVENU E IS NOW IN APPEAL BEFORE US. BEFORE US THE LD. D.R. STATED TH AT IT RELIES ON THE ORDER OF THE A.O. 8. ON THE OTHER HAND, THE LD. A.R. STATED THAT THE ASSESSEE HAS DISCHARGED ITS ONUS OF PROVING THE IDENTITY OF CRED ITORS, GENUINENESS OF THE TRANSACTION AND CREDITWORTHINESS BY SUBMITTING THE NECESSARY DOCUMENTS BEFORE THE A.O. HE RELIED O N THE DECISION OF ROHINI BUILDERS (SUPRA). 9. WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED THE MATERIAL ON RECORD. IT IS AN UNDISPUTED FACT THAT THE ADDITI ONS WERE MADE BY THE A.O. U/S. 68 OF THE ACT. THE ASSESSEE HAS SUBMI TTED THE CONFIRMATION LETTERS WITH NAME AND ADDRESS, PAN NO. COPIES OF INCOME TAX RETURNS, BANK STATEMENT, CASH FLOW STATE MENTS AND FURTHER SUBMITTED THAT ALL THE PARTIES ARE ASSESSED TO INCOME TAX. ITA NO.2 52/AHD/2010 ASSESSME NT YEAR 2006-07 . 7 THUS, IT HAD DISCHARGED ITS ONUS OF PROVING THE IDE NTITY OF THE CREDITORS, GENUINENESS OF THE TRANSACTION AND CREDI TWORTHINESS. THESE FACTS HAVE BEEN STATED BY CIT (A) IN HIS ORDE R AND HAS NOT BEEN CONTROVERTED BY THE REVENUE. IN VIEW OF THESE FACTS AND RESPECTFULLY FOLLOWING THE DECISION IN THE CASE OF DCIT VS. ROHINI BUILDERS (SUPRA) WE ARE OF THE CONSIDERED VIEW THAT THE CIT HAD RIGHTLY DELETED THE ADDITION MADE AND THEREFORE WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE CIT (A) AND ACCORDING LY UPHOLD THE ORDER OF CIT (A). WE THEREFORE, DISMISS THE APPEAL OF THE REVENUE. 10. IN THE RESULT, REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 25-5- 2012. SD/- SD/- (G.C.GUPTA) (ANIL CHATURVEDI) VICE PRESIDENT ACCOUNTANT MEMBER AHMEDABAD. S.A.PATKI. ITA NO.2 52/AHD/2010 ASSESSME NT YEAR 2006-07 . 8 COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) I, SURAT. 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AHMEDABAD 1.DATE OF DICTATION 15 - 5 -2012 2.DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE TH E DICTATING 16 / 5 / 2012 MEMBER.OTHER MEMBER. 3.DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P.S./P.S 23 - 5 -2012. 4.DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT 25 - 5 -2012 5.DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR .P.S./P.S 25 - 5 -2012 6.DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 2 5 - 5 -2012. 7.DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 28-5-2012 8.THE DATE ON WHICH THE FILE GOES TO THE ASSTT. REG ISTRAR FOR SIGNATURE ON THE ORDER 9.DATE OF DESPATCH OF THE ORDER..