ASST CIT CEN CIR 8(4), MUMBAI V. VINI AHUJA, NAVI MUMBAI

ITA 2602/MUM/2015

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 7101 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-05-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 06-05-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Additional evidence
• Section: 68; 132

Judgement Text

IN THE INCOME-TAX APPELLATE TRIBUNALB BENCH MUMBA I BEFORE SH PAWAN SINGH, JUDICIAL MEMBER AND SH RAJESH KUMAR, ACCOUNTANT MEMBER ITA NO.2602/MUM/2015 (ASSESSMENT YEAR 2009-10 ) IN THE MATTER OF ACIT,CC-8(4), 6 TH FLOOR, ROOM NO. 658, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI.20. -------------- REVENUE/ APPELLANT VERSUS SHRI VINI AHUJA D-73/1, DEONAR FARM ROAD, TTC INDUSTRIAL AREA,TURBHE, NAVI MUMBAI-400005. PAN: AACPA4810A ------------- ASSESSEE/ R ESPONDENT ASSESSEE REPRESENTED BY SH J.P. BAIRAGRA-_(AR) REVENUE REPRESENTED BY SH. YASHWANT KUMAR BHASKAR ( CIT-DR) APPEAL HEARD ON 31 MAY 2018 ORDER ANNOUNCED ON 31 MAY 2018 PER PAWAN SINGH JUDICIAL MEMBER ; 1. THIS APPEAL BY REVENUE UNDER SECTION 253 OF INCOME- TAX ACT IS DIRECTED AGAINST THE ORDER OF LD. COMMISSIONER (APPEALS)-47, MUMBAI DATED 09.07.2016 FOR ASSESSMENT YEAR 2009-10. THE REVENUE HAS RAISED FOLLOWING GROUNDS OF APPEAL: (I) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LEARNED COMMISSIONER (APPEALS) ERRED IN DELETING A SUM OF R S.2,30,00,000/-ON ACCOUNT OF UNEXPLAINED CASH CREDIT UNDER SECTION 68 OF THE ACT, WITHOUT APPRECIATING THE FACT THAT ASSESSEE HAS NOT SUBMITT ED THE SUPPORTING DOCUMENTARY EVIDENCE TO THE SATISFACTION OF THE ASS ESSING OFFICER AND CLAIM OF REPAYMENT OF LOAN UNDER SECTION 68 DOES NO T MAKE LOANS EXPLAINED UNLESS THE ASSESSEES ESTABLISHES IDENTIT Y OF THE PARTY, GENUINENESS OF TRANSACTION AND CREDITWORTHINESS OF PARTIES FROM WHOM LOANS WERE TAKEN. ITA NO. 2602/M/2015- SHRI VINI AHUJ A 2 (II) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LEARNED COMMISSIONER (APPEALS) ERRED IN ADMITTING ADDITIONA L EVIDENCE UNDER RULE 46A, IN THE FORM OF SETTLEMENT AGREEMENT AND B ANK STATEMENT EVIDENCING THE PAYMENT, WHICH WAS NOT AT ALL PRODUC ED BEFORE THE ASSESSING OFFICER AT THE TIME OF PASSING ASSESSMENT ORDER, BEING EVENT OCCURRED SUBSEQUENT TO THE DATE OF PASSING OF THE A SSESSMENT ORDER. 2. BRIEF FACTS OF THE CASE ARE THAT A SEARCH AND SEIZU RE ACTION UNDER SECTION 132 WAS CARRIED OUT AT THE RESIDENCE AND BUSINESS P REMISES OF FLAMINGO/ BERMACO GROUP ON 31 ST OF OCTOBER 2009. DURING THE COURSE OF SEARCH UNACCOUNTED CASH AND INCRIMINATING DOCUMENT WERE FO UND AND ACCORDINGLY APPROPRIATE ASSET /DOCUMENTS WERE SEIZE D. STATEMENT OF SH. VIREN AHUJA, FATHER OF ASSESSEE WAS RECORDED UNDER SECTION 132. CONSEQUENT UPON THE SEARCH NOTICE UNDER SECTION 153 A WAS SERVED UPON THE ASSESSEE ON 12.04. 2010. IN RESPONSE TO THE NOT ICE THE ASSESSEE FILED RETURN OF INCOME ON 20 JUNE 2011 DECLARING TOTAL IN COME OF RS. 26,87,920/-. THE ASSESSMENT WAS COMPLETED ON 08.06. 2012. THE ASSESSING OFFICER WHILE PASSING ASSESSMENT ORDER BESIDES THE OTHER ADDITIONS MADE ADDITION UNDER SECTION 68 FOR RS.2,30,00,000/- UNDE R SECTION 68 ON ACCOUNT OF UNEXPLAINED CASH CREDIT. ON APPEAL BEFOR E COMMISSIONER (APPEALS) THE ENTIRE ADDITION WAS DELETED. THEREFOR E, AGGRIEVED BY THE ORDER OF COMMISSIONER (APPEALS) THE REVENUE HAS FIL ED PRESENT APPEAL BEFORE US. 3. WE HAVE HEARD LEARNED DR FOR THE REVENUE AND THE LE ARNED AR OF THE ASSESSEE AND PERUSED THE MATERIAL AVAILABLE ON RECO RD. THE LEARNED DR FOR ITA NO. 2602/M/2015- SHRI VINI AHUJ A 3 THE REVENUE SUPPORTED THE ORDER OF ASSESSING OFFICE R. THE LEARNED DR SUBMITTED THAT DURING THE ASSESSMENT PROCEEDING, TH E ASSESSING OFFICER NOTED THAT THE ASSESSEE HAS ACCEPTED UNSECURED LOAN OF RS. 2.3 CRORE FROM SRM ENERGY SYSTEM PRIVATE LTD. HOWEVER, THE ASSESSE E HAS NOT SUBMITTED THE SUPPORTING DOCUMENTARY EVIDENCES REGA RDING THE UNSECURED LOAN SUCH AS COPY OF LOAN APPLICATION, SANCTIONED A ND APPROVAL LETTER FROM THE LOAN CREDITOR BANK STATEMENT REFLECTING THE LOA N TAKEN, CREDITWORTHINESS OF THE LOAN CREDITOR; WHETHER ANY ASSET HAS BEEN MORTGAGED FOR AVAILING CLOSE AMOUNT OF LOAN, LOAN C URRENT ETC. THE ASSESSING OFFICER MADE ADDITION UNDER SECTION 68 ON ACCOUNT OF UNEXPLAINED CASH CREDIT. THE LEARNED CIT(A) DELETED THE ENTIRE ADDITION BY ADMITTING THE ADDITIONAL EVIDENCE FURNISHED BY T HE ASSESSEE DURING THE APPELLATE STAGE ONLY. NO REMAND REPORT WAS CALLED ON SUCH ADDITIONAL EVIDENCES FROM ASSESSING OFFICER, BEFORE ADMITTING THE ADDITIONAL EVIDENCES. THE LEARNED COMMISSIONER (APPEALS) HAS N OT GIVEN ANY OPPORTUNITY TO THE ASSESSING OFFICER TO MAKE ANY CO MMENT BEFORE ADMITTING THE ADDITIONAL EVIDENCES. 4. ON THE OTHER HAND, THE LEARNED AR OF THE ASSESSEE S UBMITS THAT SUBSEQUENT TO THE ASSESSMENT PROCEEDING AND IN THE INTERVENING PERIOD OF APPELLATE PROCEEDING THE ASSESSEE REPAID THE IMPUGN ED AMOUNT OF RS. 2.30 CRORE TO THE CREDITORS. THE LEARNED AR OF THE ASSESSEE FURTHER SUBMITS THAT ASSESSEE FURNISHED ADDITIONAL EVIDENCE BEFORE THE LEARNED ITA NO. 2602/M/2015- SHRI VINI AHUJ A 4 COMMISSIONER (APPEALS). THE LD CIT(A) CALLED THE RE MAND REPORT OF ASSESSING OFFICER, THE COPY OF THE REMAND REPORT IS PLACED ON RECORD. IT WAS EXPLAINED THAT ASSESSEE IS DIRECTOR OF VARIOUS COMPANIES BELONGING TO BERMACO GROUP OF COMPANIES. THE OBSERVATION OF THE ASSESSING OFFICER THAT ASSESSEE RECEIVED A LOAN OF RS.2.30 CRORE FROM SRM ENERGY SYSTEM DURING PREVIOUS YEAR, BUT NOT FILED SUPPORTING DOCU MENTARY EVIDENCE REGARDING UNSECURED LOAN, THE OBSERVATION OF ASSES SING OFFICER IS UNFOUNDED AS THE ASSESSEE FURNISHED SUPPORTING DOCU MENTARY EVIDENCE REGARDING UNSECURED LOAN SUCH AS COPY OF LOAN APPLI CATION, SANCTIONED AND APPROVAL LETTER FROM LOAN CREDITOR COMPANY, BAN K STATEMENT REFLECTING THE LOAN TAKEN, CREDITWORTHINESS OF LOAN CREDITOR. THE ASSESSEE BEFORE THE LD CIT(A) VIDE HIS LETTER DATED 20 DECEMBER 2013 CONTENDED THAT THE ASSESSEE RECEIVED AN AMOUNT OF RS.2.30 CRORE IN PU RSUANT TO THE MEMORANDUM OF UNDERSTANDING (MOU) DATED 10 TH NOVEMBER 2008, COPY OF WHICH IS PLACED BEFORE THE LOWER AUTHORITIES AND ALSO FILED BEFORE THE TRIBUNAL, SRM ENERGY PRIVATE LTD IN ORDER TO PROCUR E LAND IN THE NAME OF SAID COMPANY OF APPROXIMATELY 60 ACRE OF LAND FOR S ETTING OF A PLANT OF POWER PROJECT IN TAMIL NADU WAS TAKEN. DURING THE C OURSE OF ASSESSMENT THE CONFIRMATION ALONG WITH THE ACCOUNTS OF ASSESSE E COMPANY WAS FILED. THE ASSESSEE ALSO RELIED UPON CERTAIN ADDITIONAL EV IDENCES, WHICH WERE FORWARDED TO ASSESSING OFFICER. THE ASSESSING OFFIC ER IN PURSUANCE OF THE DIRECTION OF LEARNED COMMISSIONER (APPEALS) SUBMITT ED HIS REMAND REPORT ITA NO. 2602/M/2015- SHRI VINI AHUJ A 5 DATED 06.02. 2014. IN THE REMAND REPORT THE ASSESSI NG OFFICER CATEGORICALLY HELD THAT ADVANCES IS REVENUE RECEIPT OF THE ASSESS EE FOR THE YEAR BECAUSE ASSESSEE HAS NO LIABILITY TO REPAY THE SAID AMOUNT. THE ASSESSING OFFICER FURTHER CONTENDED THAT DURING THE APPELLATE PROCEED ING ASSESSEE HAS PRODUCED MOU WITH SRM ENERGY LTD AND THAT THAT SRM ENERGY HAS FILED A LEGAL CASE AGAINST THE ASSESSEE. THE MATTER IS NOW PENDING BEFORE ARBITRATOR APPOINTED BY MUMBAI HIGH COURT. THE ASSE SSEE HAS CLAIMED THAT ABOVE AMOUNT IS LIABLE TO REPAID IN THE EVENT OF ITS FAILURE TO PROCURE THE REQUIRED LAND AS PER MOU WITH SRM ENERGY LTD. T HE ASSESSING OFFICER FURTHER CONTENDED IN ITS REPORT THAT ASSESS EE HAS UTILISED THE ADVANCE ON HIS OWN AND NOT FOR THE PURPOSE AS DECID ED IN MOU AT THE SAME TIME ASSESSEE HAS NOT PAID SUCH ADVANCE TO SRM ENERGY WITHOUT ANY SUFFICIENT REASON WHICH CLEARLY SHOWS THAT ASSE SSEE HAD NO INTENTION TO REPAY THIS AMOUNT. THE LEARNED AR OF THE ASSESSE E FURTHER SUBMITTED THAT THE CONTENTION OF LEARNED AR THAT NO REMAND RE PORT WAS SOUGHT FROM ASSESSING OFFICER IS UNFOUNDED. THE ASSESSING OFFIC ER WAS GIVEN FULL OPPORTUNITY TO MAKE THIS COMMENT ON THE ADDITIONAL EVIDENCES FURNISHED BY THE ASSESSEE. MOREOVER, THE ASSESSEE IN PURSUANC E OF SETTLEMENT ARRIVED IN A COMPANY PETITION FILED BY SRM ENERGY LTD. BEFO RE HONBLE BOMBAY HIGH COURT, WHEREIN THE ASSESSEE MADE SETTLEMENT VI DE ORDER DATED 12 TH AUGUST 2014 WHEREIN ASSESSEE WAS GRANTED TWO WEEKS TIME TO REPAY THE AMOUNT TO CREDITOR. AND IN VIEW OF THE SETTLEMENT A ND UNDERTAKING BEFORE ITA NO. 2602/M/2015- SHRI VINI AHUJ A 6 THE HIGH COURT THE ASSESSEE REPAID THE SAID AMOUNT IN BETWEEN 23 RD AUGUST TO 26 TH AUGUST 2014. THE DOCUMENTS LIKE THE ORDER OF BOMBA Y HIGH COURT DATED 12.08.2014 AND THE COPY OF THE STA TEMENTS OF BANK SHOWING THE PAYMENTS TO THE CREDITORS NEEDS NO VERI FICATION FROM THE ASSESSING OFFICER. THE LEARNED COMMISSIONER (APPEAL S) AFTER APPRECIATING THE FACT, REMAND REPORT AND THE ORDER OF HIGH COURT AND THE PAYMENT MADE PURSUANT TO THE HIGH COURT ORDER, DELETED THE ADDITION. THE LEARNED AR OF THE ASSESSEE IN SUPPORT OF HIS SUBMISSION REL IED UPON THE DECISION OF PATNA HIGH COURT IN CASE OF CIT VERSUS SAGER CON STRUCTION PRIVATE LTD 56 TAXMANN.COM 434 (PATNA), DCIT VERSUS NE TECH NOLOGY INDIA PRIVATE LTD 47 TAXMANN.COM 405 (HYDERABAD TRI), ACI T VERSUS KRAFTS PALACE 58 TAXMANN.COM 24 (AGRA TRI ), HINDUJA GROUP INDIA LTD VERSUS ACIT ( ITA NO. 4458, 2466 /M/2014 & ITA NO. 575/M/2 016) DATED 17 TH MAY 2018. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSION OF THE PART IES AND HAVE GONE THROUGH THE ORDER OF AUTHORITIES BELOW. THE ASSESSI NG OFFICER MADE THE ADDITION OF RS. 2.3 CRORE HOLDING THAT THE ASSESSEE HAS NOT FURNISHED DOCUMENTARY EVIDENCE ABOUT THE UNSECURED LOAN FROM SRM ENERGY SYSTEM PVT. LTD. TO PROVE THE LOAN FROM THE CREDITO R. BEFORE THE LD. COMMISSIONER (APPEALS), THE ASSESSEE URGED THAT DUR ING THE INTERVENING PERIOD OF APPELLATE PROCEEDING, THE ASSESSEE HAS RE PAID THE LOAN TO THE CREDITOR. IT WAS FURTHER EXPLAINED THAT SRM ENERGY LTD. FILED A CIVIL SUIT ITA NO. 2602/M/2015- SHRI VINI AHUJ A 7 BEFORE SESSIONS COURT, THANE FOR RECOVERY OF RS. 5. 3 CRORE AGAINST THE ASSESSEE (RS. 2.3 CRORE FROM SRM ENERGY LTD. AND RS . 3 CRORE FOR ENERGY SYSTEM LTD.). THE SAID CREDITOR ALSO FILED A COMPANY PETITION BEFORE HONBLE BOMBAY HIGH COURT, WHEREIN THE ASSES SEE UNDERTAKES TO REPAY THE AMOUNT OF CREDITORS, VIDE UNDERTAKING/ORD ER DATED 15.07.2014. SUBSEQUENTLY, THE ASSESSEE AGAIN MADE SETTLEMENT BE FORE HONBLE HIGH COURT TO PAY THE AMOUNT WITHIN TWO WEEKS VIDE ORDER DATED 12.08.2014. WE HAVE NOTED THAT ORDER ON COMPANY PETITION DATED 15.07.2014 IS ON RECORD (PAGE NO. 7-8 OF PB). FURTHER, THE EXTENSION OF TIME PAYMENT VIDE ORDER DATED 12.08.2014 IS ALSO ON RECORD (PAGE NO. 27 OF PB). THE ASSESSEE HAS ALSO PLACED ON RECORD STATEMENT OF BAN K ACCOUNT OF AXIS BANK LTD. SHOWING THE PAYMENT OF RS. 2.3 CRORE TO S RM ENERGY PVT. LTD. WE HAVE FURTHER NOTED THAT AFTER CONSIDERING T HE ORDER OF HIGH COURT AND THE PAYMENT MADE IN PURSUANT TO THE ORDER, THE LD. LD. COMMISSIONER (APPEALS) HAS DELETED THE ADDITION. THE HONBLE PAT NA HIGH COURT IN CASE OF CIT V/S SAGAR CONSTRUCTION P. LTD. (SUPRA) HELD THAT WHEN LD. COMMISSIONER (APPEALS) EXERCISED ONLY OVERRIDING PO WER UNDER RULE 46A(4) IN CONSIDERING DOCUMENT FURNISHED BY ASSESSE E AND FOUND INVESTMENT PROPER, THE ASSESSING OFFICER WAS NOT JU STIFIED IN SUBMITTING THAT HE DID NOT GET OPPORTUNITY TO CONSIDER THE SAM E. IN OUR VIEW, THE DOCUMENTS ON WHICH THE LD. COMMISSIONER (APPEALS) R ELIED, WHICH CONSIST OF ORDER OF HONBLE BOMBAY HIGH COURT DATED 15.07.2014 AND ITA NO. 2602/M/2015- SHRI VINI AHUJ A 8 12.08.2014 AND THE STATEMENT OF ACCOUNT SHOWING REP AYMENT OF LOAN/CREDIT TO THE CREDITOR AND SATISFIED HIMSELF. IN OUR VIEW, THE ASSESSING OFFICER IS NOT JUSTIFIED IN RAISING GROUN D OF APPEAL THAT HE WAS NOT GIVEN OPPORTUNITY. NO CONTRARY LAW IS BROUGHT T O OUR NOTICE. THEREFORE, WE DO NOT FIND ANY REASON TO INTERFERE W ITH THE ORDER OF LD. COMMISSIONER (APPEALS). HENCE, THE GROUNDS OF APPEA L RAISED BY REVENUE ARE DISMISSED. 6. IN THE RESULT APPEAL OF THE REVENUE IS DISMISSED. ORDER ANNOUNCED IN THE OPEN COURT ON 31ST MAY 201 8 IN OPEN COURT. SD/- SD/- RAJESH KUMAR PAWAN SINGH ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATE: 31.05.2018 SK COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE 2. RESPONDENT 3. THE CONCERNED CIT(A) 4. THE CONCERNED CIT 5. DR B BENCH, ITAT, MUMBAI 6. GUARD FILE BY ORDER, DY./ASST. REGISTRAR ITAT, MUMBAI