The ITO, Ward-9(2), Surat V. Shri Kantilal Ramjibhai Narkani, Surat

ITA 2573/AHD/2009

• Counselvise Citation: [2009] 115 COUNSELVISE.COM (IT) 0478 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-11-2009
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2003-2004
• Appeal Filed On: 11-09-2009
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: P R GHOSH
• Assessee Lawyers: B D KHENGAR
• Keywords: Unexplained cash credit
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH B, AHMEDABAD BEFORE SHRI HL KARWA, JM AND SHRI DC AGARWAL, AM I.T.A. NO.2573/A/2009 (ASSESSMENT YEAR 2003-04) ITO, WD.9(2) VS SHRI KANTILAL RAMJIBHAI NAKRANI SURAT 50, SADHNA SOCIETY VARACHHA ROAD, SURAT PAN : ACVPP4724D (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI PR GHOSH RESPONDENT BY: SHRI B.D. KHENGAR O R D E R D.C. AGARWAL : THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (AP PEALS)-V, AHMEDABAD FOR THE ASSESSMENT YEAR 2003-04 WHEREIN HE HAS DELE TED THE ADDITION OF RS.8,88,000 MADE BY THE ASSESSING OFFICER U/S 68 OF THE ACT. 2. THE FACTS OF THE CASE ARE THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER FOUND THAT ASSESS EE HAS TAKEN CREDIT FROM THE FOLLOWING TWO PERSONS: 1. PINALBEN NILESHBHAI RS. 4,63,000 2. P.N. PATEL RS. 4,25,000 RS. 8,88,000 THE ASSESSEE WAS REQUIRED TO FURNISH THE PROOF IN R ESPECT OF EARNING OF INCOME BY THE CREDITORS, CONFIRMATION FROM THEM, NE CESSARY BILLS AND VOUCHERS, SOURCE OF CREDIT ENTRIES IN ASSESSEES BO OKS OF ACCOUNT, COMPLETE NAME AND ADDRESSES OF THE PERSONS AND PARTIES, WHO HAVE GIVEN THE DEPOSIT TO THE ASSESSEE. THE ASSESSEE SUBMITTED SOME DOCUM ENTS. AFTER EXAMINING THEM THE ASSESSING OFFICER NOTICED THAT ASSESSEE HA S TAKEN LOAN FROM SMT. PINALBEN NILESHBHAI PATEL AMOUNTING TO RS.8,88,000. ON EXAMINING THE BANK ACCOUNT OF SMT. PINALBEN NILESHBHAI PATEL HE NOTICE D THAT THE ACCOUNT WAS ITA 855/A/2004 2 OPENED ON 14-08-2002 BY DEPOSITING CASH OF RS.1,000 AND THEREAFTER CASH OF RS.1 LAKH AND RS.1,25,000 WAS DEPOSITED ON 14-08-20 02 AND 16-08-2002, RESPECTIVELY AND THE SAME WAS GIVEN AS LOAN FROM NE XT DAY, I.E. ON 17-08- 2002 AND ANOTHER RS.1 LAKH ON 19-08-2002 WAS DEPOSI TED AND THE SAME WAS GIVEN AS LOAN ON THE VERY NEXT DAY. THE CREDITOR C ONTINUED TO DEPOSIT CASH. ON 20-08-2002 CASH OF RS.1 LAKH WAS DEPOSITED. AGA IN ON 23-08-2002 AND 24-08-2002 CASH OF RS.1,13,000 AND RS.1 LAKH, RESPE CTIVELY WERE DEPOSITED. OUT OF THESE CASH DEPOSITS AGGREGATING TO RS.3,13,0 00, A SUM OF RS.2,50,000 WAS GIVEN AS LOAN ON 24-08-2002. THEREAFTER, AN AM OUNT OF RS.1,50,000 HAS BEEN DEPOSITED IN CASH ON 26-08-2002 AND RS.2,13,00 0 HAS BEEN GIVEN AS LOAN ON THE VERY NEXT DAY I.E. ON 27-08-2002. IT W AS EXPLAINED THAT LOAN IS APPEARING IN THE BALANCE-SHEET FILED WITH THE RETUR N OF INCOME BUT THE ASSESSING OFFICER DECIDED TO MAKE THE ADDITION U/S 68 ON THE GROUND THAT THE ASSESSEE FAILED TO PRODUCE THE DEPOSITS EVEN EVEN T HOUGH HE WAS REQUESTED FOR. THE LEARNED COMMISSIONER OF INCOME TAX (APPEA LS) DELETED THE ADDITION BY OBSERVING AS UNDER : I HAVE CAREFULLY CONSIDERED THE VIEW TAKEN BY THE ASSESSING OFFICER ON THIS ISSUE AND THE WRITTEN SUB MISSIONS MADE BY THE APPELLANT. FROM THE ENTIRE DISCUSSION I OBSERVED, THAT SMT. PINALBEN IS ASSESSED TO TAX AND THE CREDI TS IN HER BANK ACCOUNT ARE EXPLAINED, AND NO ADVERSE VIEW HAS BEEN TAKEN BY THE ASSESSING OFFICER IN HER CASE. AND THAT ALL PA YMENTS MADE TO THE APPELLANT WERE ROUTED THROUGH BANK. IN SUCH CIRCUMSTANCES I FIND THAT THE ACTION OF THE ASSESSI NG OFFICER OF MAKING ADDITION OF RS.8,88,000/- BEING THE LOAN TAK EN FROM SMT. PINALBEN IS NOT IN ORDER. THEREFORE, THE ADDITION OF RS.8,88,000/- AS UNEXPLAINED CASH CREDIT IN THE NAME OF SMT. PNAL BEN N PATEL IS DELETED. 3. AGAINST THIS THE LEARNED DEPARTMENTAL REPRESENTA TIVE SUBMITTED THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS IG NORED THE FACT THAT CASH WAS DEPOSITED IN THE BANK ACCOUNT OF THE CREDI TOR AND THE LOAN WAS GIVEN TO THE ASSESSEE ON THE SAME DAY OR ON THE VER Y NEXT DAY. FURTHER, THERE ARE TWO IDENTIFIES OF THE CREDITOR, I.E. LOAN AMOUNT IS STANDING IN THE NAME OF TWO PERSONS WHICH WAS CLAIMED TO BE ONE PER SON. ONE NAME IS SMT. PINALBEN NILESHBHAI PATEL AND THE OTHER NAME IS PN PATEL. IT IS NOT ITA 855/A/2004 3 KNOWN HOW THESE TWO NAMES BELONG TO SAME PERSON. T HE LEARNED DEPARTMENTAL REPRESENTATIVE FURTHER DREW OUR ATTENT ION TO A COPY OF ASSESSMENT ORDER IN THE CASE OF PINAL NILESHBHAI PA TEL, THE ALLEGED CREDITOR. HE SUBMITTED THAT THIS IS THE ORDER OF ONE MALE PER SON WHEREAS THE CREDIT HAS BEEN SHOWN IN THE NAME OF A FEMALE PERSON. FINALLY HE POINTED OUT THAT IN SPITE OF REQUESTS MADE BY THE ASSESSING OFFICER ASS ESSEE FAILED TO PRODUCE THE CREDITOR. 4. AGAINST THIS, THE LEARNED AR FOR THE ASSESSEE SU BMITTED THAT THE DEPOSITS OF CASH IN THE BANK ACCOUNT OF THE CREDITO R AS BEEN ACCEPTED BY THE DEPARTMENT AND THEREFORE CREDITWORTHINESS AND GENUI NENESS OF THE TRANSACTION SHOULD BE ACCEPTED. IT IS ONLY BY MIST AKE THAT THE ASSESSING OFFICER HAS INCORRECTLY PUT SHRI IN PLACE OF SMT . IN THE ASSESSMENT ORDER AND FURTHER THAT ACCOUNTANT HAS COMMITTED A MISTAKE IN CREDITING THE LOAN AMOUNT IN TWO NAMES BECAUSE BANK ACCOUNTS WERE DIFF ERENT. 5. WE HAVE CONSIDERED RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. IN OUR CONSIDERED VIEW ASSESSEE HAS NOT DI SCHARGED THE ONUS LYING ON HIM. THE LEARNED COMMISSIONER OF INCOME TAX (AP PEALS) HAS IGNORED THE FACT THAT CASH WAS DEPOSITED IN THE BANK ACCOUN T AND THE ASSESSMENT ORDER SOUGHT TO BE PRODUCED IN SUPPORT OF THE FACT THAT CASH IN THE CASE OF CREDITOR HAS BEEN ACCEPTED BY THE ASSESSING OFFICER BELONGED TO A MALE PERSON AND NOT TO THE CREDITOR WHO IS A FEMALE PERS ON. THERE SEEMS TO BE SOME MISUNDERSTANDING OR CONFUSION AS TO WHO WAS TH E ACTUAL CREDITOR AND WHETHER CASH DEPOSITED IN THE BANK ACCOUNT HAS BEEN ACCEPTED BY THE ASSESSING OFFICER IN THE CASE OF THE CREDITOR. THE REFORE, WE WOULD LIKE THAT THE ASSESSEE PRODUCED THE CREDITOR BEFORE THE ASSESSING OFFICER ALONG WITH COPY OF PAN CARD, COPY OF BANK STATEMENTS SHOWING PERMAN ENT ACCOUNT NUMBER AND COMPLETE EVIDENCE SHOWING CREDITWORTHINESS OF T HE CREDITOR. THE ASSESSING OFFICER SHOULD EXAMINE THE CREDITOR AND S ATISFY WHETHER THE LOAN GIVEN BY HER IS GENUINE. ITA 855/A/2004 4 6. AS A RESULT, THE APPEAL FILED BY THE REVENUE IS ALLOWED, BUT FOR STATISTICAL PURPOSE. 7. ORDER PRONOUNCED ON 13 TH DAY OF NOVEMBER, 2009. SD/- SD/- (H.L. KARWA) (D.C. AGARWAL) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD, DT : 13 TH NOVEMBER, 2009 PK/- COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT-(A) 4. THE CIT 5. THE DR, B BENCH /TRUE COPY/ DY. REGISTRAR / ASST.REGISTRAR ITAT, AHMEDABAD BENCHES