The ITO, Ward-7(4), Ahmedabad V. Shri Yatin C.Devda, Ahmedabad

ITA 2592/AHD/2010

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 0255 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 5 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-02-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 13-12-2012
• Assessment Year: 2007-2008
• Appeal Filed On: 30-08-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: Y P VERMA
• Assessee Lawyers: MEHUL K PATEL
• Keywords: Unexplained cash credit; Opportunity of being heard; Additional evidence
• Section: 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD B BENCH AHMADABAD BEFORE SHRI MUKUL KR. SHRAWAT , JUDICIAL MEMBER AND SHRI T.R. MEENA, ACCOUNTANT MEMBER ITA NO. 2592/AHD/2010 ASSESSMENT YEAR :2007-08 ITO, WD.7(4), AHMEDABAD V/S . SHRI YATIN C. DAVDA, PROP: ALPS INDUSTRIES, 13, SANSKAR BHARTI SOCIETY, NARANPURA AHMADABAD. PAN NO. A A TPD6249B (APPELLANT) .. (RESPONDENT) BY APPELLANT SHRI Y.P. VERMA, SR. D.R. /BY RESPONDENT SHRI MEHUL K. PATEL, A.R. /DATE OF HEARING 13.12.2012 /DATE OF PRONOUNCEMENT 15.02.2013 O R D E R PER : T.R.MEENA, ACCOUNTANT MEMBER THIS IS AN APPEAL AT THE BEHEST OF THE REVENUE WHIC H HAS EMANATED FROM THE ORDER OF CIT(A)-XI, AHMEDABAD, DATED 18.06 .2010 FOR A.Y. 2007-08. THE SOLE GROUND OF APPEAL IS AGAINST THE ADDITION M ADE U/S. 69 ON ACCOUNT OF UNEXPLAINED CASH CREDIT AMOUNTING TO RS.22,30,000/- . 2. THE ASSESSEE DERIVED INCOME FROM PROPRIETOR BUSI NESS OF TRADING OF PERFUMES AND FRAGRANCES IN THE NAME OF ALPS INDUSTR IES AND INCOME FROM OTHER SOURCES. THE A.O. OBSERVED THAT DURING THE C OURSE OF ASSESSMENT PROCEEDING, THERE WAS A CREDIT OF RS.20,00,000/- IN THE CAPITAL ACCOUNT OF THE ASSESSEE THROUGH SAVING BANCK ACCOUNT OF THE ASSESS EE. THE APPELLANT HAD ITA NO. 2592/AHD/10 A.Y. 07-08 PAGE 2 DEPOSITED FOUR CHEQUES EACH OF RS. 5,00,000/-, TOTA LING TO RS. 20,00,000/- IN CAPITAL ACCOUNT OF THE APPELLANT, WHICH WERE CLAIME D TO BE RECEIVED FROM TANISHQ HOTEL LIMITED. FURTHER, THE APPELLANT DEPO SITED CASH OF RS.2,30,000/- IN HIS CAPITAL ACCOUNT. THE LD. A.O. GAVE THE REAS ONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE AND TO PROVE THE SOURCE OF TH IS CASH WITH EVIDENCE. THE APPELLANT REPLIED VIDE LETTER DATED 29.12.2009 THAT THE CREDIT ENTRY IN THE CAPITAL ACCOUNT WAS ACTUALLY REFUND OF MONEY WHICH WAS DEPOSITED IN F.Y. 2004-05 & 05-06 TO TANISHQ HOTEL LIMITED THROUGH AC COUNT PAYEE CHEQUES. AS THE DEAL WAS NOT MATERIALIZED THE SAID MONEY WAS RETURNED BACK IN THE YEAR 06-07. HE HAD ALSO FURNISHED THE COPY OF BANK ACCOUNT IN WHICH THESE ENTRIES WERE DEBITED REGARDING SOURCE OF CASH OF RS .2,30,000/- WAS EXPLAINED BY THE APPELLANT BEFORE THE A.O. THAT THE CASH DEPO SITED OUT OF EARLIER YEARS. THE A.O. RELIED UPON FOLLOWING CASES: I. SUMATI DAYAL VS. CIT 214 ITR 801 (SC) II. CIT VS. R.S. RATHOD 212 ITR 390 (RAJ.) III. ROSHAN D. HATTI VS. CIT 107 ITR 938 IV. KALEKHAN MOHMAD HANIF VS. CIT 50 ITR 1 (SC) THUS, HE MADE TOTAL ADDITION OF RS. 22,30,000/- AS UNEXPLAINED CASH CREDITORS. 3. BEING AGGRIEVED BY THE ORDER OF THE A.O., THE AS SESSEE CARRIED THE MATTER BEFORE CIT(A). THE APPELLANT FILED WRITTEN REPLY DATED 19.04.2010 BEFORE HIM, WHEREIN THE APPELLANT EXPLAINED THE SOU RCE OF THIS CREDIT ENTRIES WITH EVIDENCE. THE APPELLANT ALSO SUBMITTED LETTER DATED 16.03.2010 ALONGWITH THE COPY OF CERTIFICATED DATED 18.01.2010 ISSUED BY THE CENTRAL BANK OF INDIA WHICH WAS FORWARDED TO THE A.O. WHO H AD SUBMITTED THE REMAND ITA NO. 2592/AHD/10 A.Y. 07-08 PAGE 3 REPORT ON 25.03.2010 ALONGWITH THE COPY OF LETTER D ATED 22.03.2010 OBTAINED FROM THE CENTRAL BANK OF INDIA, WAS ENCLOSED BY HIM ALONGWITH THE REMAND REPORT, WHICH WAS CONSIDERED BY THE CIT(A). THE COP Y OF REMAND REPORT WAS ALSO GIVEN TO THE APPELLANT. THE CIT(A) AGAIN CALL ED FOR REMAND REPORT VIDE LETTER DATED 21.04.2010. THE REMAND REPORT WAS SUB MITTED BY THE A.O. VIDE LETTER DATED 04.05.2010 THROUGH THE ADDITIONAL CIT VIDE LETTER DATED 06.05.2010 WHICH HAS BEEN REPRODUCED BY THE CIT(A) FROM PAGE NO. 26 TO PAGE NO.29 IN HIS ORDER. THE CIT(A) BY CONSIDERING THE MERIT OF THE CASE HAD ADMITTED THE ADDITIONAL EVIDENCE FILED IN FORM OF L ETTER FROM CENTRAL BANK OF INDIA AND BAVLA NAGRIK SAHKARI BANK LTD. THE APPEL LANT ADVANCED TO TANISHQ HOTEL LIMITED AT RS.22.5 LACS AS UNDER: (I) RS. 5,00,000/- ON 05.04.2004 BY CHEQUE, DETAIL S GIVEN IN THE BANK ACCOUNT FILED BEFORE A.O. (II) RS. 10,00,000/- ON 27.10.2005 BY CHEQUE, DETA ILS GIVEN IN THE BANK ACCOUNT FILED BEFORE A.O. (III) RS. 7,50,000/- ON 10.11.2005 BY CHEQUE, DETA ILS GIVEN IN THE BANK ACCOUNT FILED BEFORE A.O. THIS AMOUNT WAS INVESTED IN THE PROJECT KNOWN AT TA NISHQ HOTEL LIMITED IN F.Y. 04-05 & 05-06 WHICH DID NOT MATERIALIZE. THE SAME DEPOSIT MADE WITH TANISHQ HOTEL LIMITED REPAID IN F.Y. 06-07 YEAR UND ER CONSIDERATION THROUGH ACCOUNT PAYEE CHEQUE. THE TANISHQ HOTEL LIMITED CL OSED DOWN ITS SHOP, IT WAS DIFFICULT TO GET CONFIRMATION LETTER FROM THEM. HOWEVER, HE FURNISHED LETTER DATED 18.01.2010 FROM HIS BANK I.E. CENTRAL BANK OF INDIA, CERTIFYING RECEIPT OF ITA NO. 2592/AHD/10 A.Y. 07-08 PAGE 4 AMOUNT FROM TANISHQ HOTEL LIMITED BY CHEQUE. FURTH ER, HE FURNISHED LETTER DATED 16.04.2010 FROM BAVLA NAGRIK SAHKARI BANK LTD ., WHEREIN BOTH THE BANKS CERTIFIED THAT THE IMPUGNED CHEQUES WERE CLEA RED BY THEM BY DEBITING THE ACCOUNT OF TANISHQ HOTEL LIMITED. THE LD. A.O. ALSO GATHERED THE COPY OF ACCOUNT OF TANISHQ HOTEL LIMITED FROM BAVLA NAGRIK SAHKARI BANK LTD. FOR THE PERIOD 01.08.2006 TO 26.09.2006 WHICH HAS BEEN CONS IDERED BY THE CIT(A) AT PAGE NO. 31. THE ACCOUNT SHOWS THAT THERE WAS A CR EDIT ENTRY BY WAY OF MICR CLEARANCE. THUS, IT WAS EVIDENT THAT THE CREDITS A PPEARING IN THE BANKS OF ACCOUNT OF TANISHQ HOTEL LIMITED WERE BY WAY OF CLE ARANCE OF CHEQUES. THE CHEQUES ISSUED BY THE TANISHQ HOTEL LIMITED IN FAVO UR OF THE APPELLANT BUT DULY DEBITED TO THEIR ACCOUNTS AND WERE CREDITED TO THE APPELLANTS ACCOUNT. THE APPELLANT COULD NOT PRODUCE THE CONFIRMATION FR OM TANISHQ HOTEL LIMITED APPARENTLY AS THEY CLOSED DOWN THE BUSINESS. THIS COULD BE THE REASONS WHY THE A.O. COULD NOT CARRY OUT ANY INDEPENDENT INQUIR Y WITH TANISHQ HOTEL LIMITED. THE APPELLANT COULD NOT BE ASKED TO DO SO METHING IMPOSSIBLE. THE LD. CIT(A) FOUND EXPLANATION OF THE SOURCE AND NATU RE OF THE IMPUGNED CREDIT ENTRIES SATISFACTORILY. THUS, HE DELETED THE ADDIT ION OF RS.20,00,000/-. 4. SIMILARLY, IT WAS HELD ON ADDITION OF RS. 2.3 LA CS MADE BY THE A.O. THE IMPUGNED DEPOSIT OF RS.2.3 LACS IN CASH WAS MADE ON 26.05.2006. THE APPELLANTS REPLY THAT THIS CASH WAS DEPOSITED FROM THE EARLIER WITHDRAWAL, WAS FOUND LOGICAL TO THE CIT(A). HE FURTHER HELD THAT THERE WAS NO MATERIAL ON RECORD TO SHOW THAT THE CASH DRAWN WAS UTILIZED FOR SOME OTHER PURPOSES. ITA NO. 2592/AHD/10 A.Y. 07-08 PAGE 5 THEREFORE, HE INCLINED TO ACCEPT THE CONTENTIONS OF THE APPELLANT. ACCORDINGLY, THE ADDITION OF RS. 2.3 LACS HAS BEEN DELETED. 5. NOW THE REVENUE IS BEFORE US. LD. SR. D.R. VEHE MENTLY RELIED ON THE ORDER OF THE A.O. AND CONTENDED THAT NO CONFIRMATIO N WITH PAN NO. HAVE BEEN SUBMITTED BY THE APPELLANT BEFORE THE A.O. AND SOUR CE OF CREDIT ENTRY HAS NOT BEEN EXPLAINED. THUS, HE REQUESTED TO CONFIRM THE ADDITION. AT THE OUTSET, LD. COUNSEL FOR THE APPELLANT CONTENDED THAT THERE WAS AN INVESTMENT THROUGH ACCOUNT PAYEE CHEQUE WITH TANISHQ HOTEL LIMITED IN F.Y. 04-05 & 05-06. THE SAME AMOUNT HAD BEEN RE-PAID BY IT IN F.Y. 06-07 I. E. YEAR UNDER CONSIDERATION. THE TANISHQ HOTEL LIMITED HAD CLOSE D DOWN ITS BUSINESS AND WAS NOT TRACEABLE ON GIVEN ADDRESS. HOWEVER, THE A PPELLANT BROUGHT THE CERTIFICATE FROM CENTRAL BANK OF INDIA AND BAVLA NA GRIK SAHKARI BANK LTD. FOR PROVING THE GENUINENESS OF THE TRANSACTION. BOTH T HE BANKS HAD CERTIFIED THAT THESE CHEQUES WERE ISSUED BY DEBITING ACCOUNTS OF M /S. TANISHQ HOTEL LIMITED. THUS, HE REQUESTED TO UPHOLD THE ORDER OF THE CIT(A). 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND PEURSED THE MATERIAL ON RECORD. THE APPELLANT HAD INVESTED RS. 22.5 LACS I N A.Y. 04-05 & 05-06 WHICH HAS BEEN RE-PAID BY M/S. TANISHQ HOTEL LIMITED IN T HE YEAR UNDER CONSIDERATION. ALL THE PAYMENTS WERE MADE THROUGH ACCOUNT PAYEE CHEQUES. THEREFORE, ASSESSEES OWN MONEY HAS BEEN RETURNED B ACK. THUS, THE SOURCE OF THE CREDIT IS NOT REQUIRED TO BE EXPLAINED. THE APPELLANT HAD FILED NECESSARY CERTIFICATED FROM BOTH THE BANKS, WHICH HAS BEEN RI GHTLY CONSIDERED BY THE LD. ITA NO. 2592/AHD/10 A.Y. 07-08 PAGE 6 CIT(A). THEREFORE, WE DO NOT FIND ANY REASON TO IN TERVENE IN THE ORDER OF THE CIT(A). ACCORDINGLY, THE REVENUES APPEAL IS DISMI SSED. 7. IN THE RESULT, THE REVENUES APPEAL IS DISMISSED . THIS ORDER PRONOUNCED IN OPEN COURT ON 15.02.2013 SD/- SD/- ( MUKUL KR. SHRAWAT ) (T.R. MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER TRUE COPY S.K.SINHA ! ! ! ! '! '! '! '! / COPY OF ORDER FORWARDED TO:- 1. / APPELLANT 2. / RESPONDENT 3. '(' ) * / CONCERNED CIT 4. *- / CIT (A) 5. !./ ), ) , 12( / DR, ITAT, AHMEDABAD 6. /45 67 / GUARD FILE. BY ORDER/ , 8/ 1 ': ) , 12( ;