The DCIT, Circle-9, Surat V. Shri Nareshbhai Balubhai Sojitra, Surat

ITA 2645/AHD/2011

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 9308 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 3 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-02-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 08-02-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 21-10-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SAMIR VAKIL
• Keywords: Unexplained cash credit
• Section: 131; 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, AHMEDABAD , (BEFORE SHRI ANIL CHATURVEDI, A.M. & SHRI S. S. GOD ARA, J.M.) ( , !'# ' $' $%& , ! '( ) ITA NO: 2645/AHD/2011 (ASSESSMENT YEAR: 2008-09) THE DEPUTY COMMISSIONER OF INCOME-TAX, CIRCLE-9, SURAT - 395001 VS SHRI NARESHBHAI BALUBHAI SOJITRA 80-81, NEW SHAKTI VIJAY SOC. VARACHHA ROAD, SURAT 395006 PAN: ABRPP3748A (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SAMIR VAKIL, SR. D.R. RESPONDENT BY : NONE DATE OF HEARING : 08-02-201 6 DATE OF PRONOUNCEMENT : 16-02-2016 ( )/ ORDER PER ANIL CHATURVEDI, ACCOUNTANT MEMBER THIS APPEAL FILED BY REVENUE IS AGAINST THE ORDER OF CIT(A)-V, SURAT DA TED 17.06.2011 FOR THE ASSESSMENT YEAR 2008-09. 2. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERI ALS ON RECORD ARE AS UNDER: 3. THE ASSESSEE IS AN INDIVIDUAL STATED TO BE CARRY ING OUT THE BUSINESS IN SHARE TRADING AND ALSO A PARTNER OF M/S. V. N. EXPORTS. ASSESSEE FILED HIS RETURN OF INCOME FOR A.Y. 2008-09 ON 30.09.2008 DECLARING TOTAL LOSS OF RS.1,69,04,692/-. THE CASE WAS SELECTED FOR SCRUTINY AND THEREAFTER ASSESSMENT WAS FRAMED U/S.143(3) VIDE ORDER DATED ITA NO .264 5/AHD/2011 . A.Y. 2008- 09 2 29.12.2010 AND THE TOTAL TAXABLE INCOME WAS DETERMI NED AT RS.37,36,950/-. AGGRIEVED BY THE ORDER OF ASSESSING OFFICER, ASSESSEE CARRIED TH E MATTER BEFORE THE LD. CIT(A) WHO VIDE ORDER DATED 17.06.2011 GRANTED SUBSTANTIAL REL IEF TO THE ASSESSEE. AGGRIEVED BY THE ORDER OF LD. CIT(A), REVENUE IS NOW IN APPEAL BEFOR E US AND HAS RAISED FOLLOWING EFFECTIVE GROUND: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF UNEXPLAINED CASH CREDIT MA DE BY THE A.O. OF RS.37,36,953/- WITHOUT APPRECIATING THE FACT THAT THE ASSESSEE COU LD NOT PROVE THE CREDIT WORTHINESS AND GENUINENESS IN RESPECT OF UNSECURED LOANS OBTAINED. 4. ON THE DATE OF HEARING, NONE APPEARED ON BEHALF OF THE ASSESSEE NOR ANY ADJOURNMENT APPLICATION WAS FILED ON HIS BEHALF. W E, THEREFORE, PROCEED TO DISPOSE OF THE APPEAL EX PARTE QUA THE ASSESSEE ON THE BASIS OF MA TERIAL AVAILABLE ON RECORD. 5. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, ASS ESSING OFFICER NOTICED THAT ASSESSEE HAS RECEIVED UNSECURED LOANS AGGREGATING T O RS.37,36,953/- FROM 8 PARTIES (THE LIST OF WHICH IS GIVEN ON PAGE NO.2 OF THE ASSESSME NT ORDER). THE ASSESSEE WAS ASKED TO PROVE THE IDENTITY, GENUINENESS AND CREDITWORTHINES S OF ALL PERSONS. ON THE BASIS OF DETAILS FILED BY THE ASSESSEE, A.O. NOTICED THAT TH E DEPOSITORS HAD LOW INCOME DISCLOSED IN THE RETURN OF INCOME AND THEREFORE THEIR CREDITWORT HINESS WAS UNSUBSTANTIATED. HE FURTHER NOTICED THAT THE BANKS STATEMENTS OF SOME OF THE D EPOSITORS SHOWED A VERY LOW BALANCE MARKED WITH DEPOSITS AND IMMEDIATE WITHDRAWALS. HE ALSO NOTICED THAT NOTICE U/S.131 WAS ISSUED TO ALL THE PERSONS WHO HAD GIVEN LOAN TO THE ASSESSEE BUT NOBODY ATTENDED. A.O. THEREFORE CONCLUDED THAT ASSESSEE HAS FAILED T O PROVE THE CREDITWORTHINESS OF THE LOAN GIVERS AND CONSIDERED THE TOTAL CREDITS IN THE FORM OF UNSECURED LOANS AGGREGATING TO RS.37,36,953/- AS INCOME OF THE ASSESSEE U/S.68 OF THE ACT. 6. AGGRIEVED BY THE ORDER OF ASSESSING OFFICER, AS SESSEE CARRIED THE MATTER BEFORE THE LD. CIT(A) WHO DELETED THE ADDITION BY HOLDING AS UNDER: 4.3. I HAVE CONSIDERED THE ASSESSMENT ORDER AS WEL L AS THE SUBMISSION OF APPELLANT, I FIND THAT THE APPELLANT HAD ACCEPTED THE LOAN OF RS . 37,36,953/- FROM 8 PARTIES BY ACCOUNT PAYEE CHEQUES, ALL THE 8 DEPOSITORS ARE ASSESSED TO TAX. THE LOAN OF RS. 14,06,800/- FROM ITA NO .264 5/AHD/2011 . A.Y. 2008- 09 3 3 DEPOSITORS WERE REPAID DURING THE SAME ACCOUNTING YEAR AND THE LOAN OF RS. 23,30,153/- FROM 5 DEPOSITORS WERE REPAID IN A.Y. 2009/10 AND A .Y. 2010/11. AS PER THE DIRECTIONS OF THE ASSESSING OFFICER THE APPELLANT FURNISHED CONFI RMATORY LETTERS, COPIES OF ACKNOWLEDGEMENT OF RETURNS OF CREDITORS, BANK STATE MENT, CAPITAL A/C. BALANCE SHEET AND PROFIT & LOSS A/C. OF DEPOSITORS. THE IDENTITY OF CREDITORS AND GENUINENESS OF TRANSACTIONS WAS ACCEPTED BY ASSESSING OFFICER. THE ASSESSING OFFICER DID NOT MAKE ANY INQUIRY AT THE ADDRESSES OF DEPOSITORS GIVEN BY APP ELLANT. THE ASSESSING OFFICER HAD ISSUED THE SUMMONS U/S. 131 OF THE ACT ON ALL THE 8 DEPOSITORS WHO DID NOT APPEAR BEFORE THE ASSESSING OFFICER. THE APPELLANT VIDE LETTER D TD. 23.12.2010 EXPLAINED TO ASSESSING OFFICER, THE REASON FOR NON APPEARANCE OF DEPOSITOR S WHICH IS THE REPAYMENT OF LOAN TO THEM IN A.Y. 2009/10 AND A.Y. 2010/11. HOWEVER, TH E APPELLANT HAD PRODUCED 4 DEPOSITORS NAMELY, 1) JITESHBHAI B. SOJITRA (HUF), 2) NARESHBHAI B. SOJITRA (HUF), 3) RAMESHBHAI S. SOJITRA AND 4) BHAVANABEN R. SOJITRA. THE TOTAL LOAN FROM THESE 4 PERSONS ARE RS. 20,83,600/-. THE APPELLANT HAD ALSO PROVED THAT THE 4 DEPOSITORS HAD RECEIVED BACK THEIR DEPOSITS WITH A DIAMONDS FIRM M/S. V. N. EXPORTS WHICH WERE USED FOR ADVANCING LOAN TO APPELLANT. FROM THE BANK STATEM ENT OF 4 DEPOSITORS IT IS FOUND THAT AGAINST THE LOAN OF RS. 20,83,600/- ONLY CASH OF RS . 4,00,000/- WAS DEPOSITED BY THEM. THE ASSESSING OFFICER HAD NOT VERIFIED THIS ISSUE WHILE THE APPELLANT PRODUCED 4 DEPOSITORS OR DID NOT INFORM THE ASSESSING OFFICER OF 4 DEPOSITORS TO VE RIFY THE TAXABILITY OF CASH DEPOSITED U/S. 69 OF THE ACT IN CASE OF DEPOSITORS. IN CASE OF THE REMAINING 4 DEPOSITORS THEIR STATEMENT OF ACCOUNTS REVEAL THE S UFFICIENT INCOME AND FUND FOR GIVING THE LOAN TO THE APPELLANT. ONCE THE ASSESSEE HAS REPAI D THE LOAN THE ASSESSEE CANNOT BE EXPECTED TO KEEP TRACK OF CREDITORS. THE ASSESSING OFFICER HAD OUT RIGHT REJECTED THE EVIDENCES WITHOUT POINTING OUT ANY DEFECTS THEREIN. THE ONUS LYING ON APPELLANT CANNOT BE UNENDING. ONCE THE ASSESSEE PRODUCED THE BASIC REC ORDS OF THE CREDITORS WHICH SHOW THE IDENTITY OF THE CREDITORS, CAPITAL ACCOUNTS OF THE CREDITORS AND BANK ACCOUNTS THROUGH WHICH MONEY WAS TRANSFERRED THROUGH CHEQUES TO THE ASSESSEE AND EVIDENCE THAT ALL OF THEM ARE INCOME-TAX ASSESSEES THEN IT CANNOT BE SAI D THAT ASSESSEE HAS STILL TO DISCHARGE THE ONUS. THE ASSESSEE HAD THEREFORE, P ROVED THE IDENTITY OF DEPOSITORS, GENUINENESS OF TRANSACTIONS AND CREDITWORTHINESS OF DEPOSITORS. HENCE, THE ADDITION OF RS. 37,36,953/- IS HEREBY DELETED AND THE GROUNDS OF APPEAL IS ALLOWED. 7. AGGRIEVED BY THE ORDER OF LD. CIT(A), REVENUE IS NOW IN APPEAL BEFORE US. 7.1 BEFORE US, LD. D.R. SUPPORTED THE ORDER OF A.O. 8. WE HAVE HEARD THE LD. D.R. AND PERUSED THE MATER IAL ON RECORD. WE FIND THAT LD. CIT(A) WHILE DELETING THE ADDITION HAS NOTED THAT A LL THE 8 DEPOSITORS WERE ASSESSED TO TAX AND THE LOAN OF RS.14,06,800/- FROM 3 DEPOSITORS WE RE REPAID DURING THE SAME ACCOUNTING YEAR AND THE LOAN OF RS.23,30,153/- FROM 5 DEPOSITO RS WERE REPAID IN A.Y. 2009-10 & 2010-11. LD. CIT(A) HAS ALSO NOTED THAT ASSESSEE H AD PRODUCED 4 DEPOSITORS FROM WHOM ASSESSEE HAD RECEIVED AGGREGATE LOAN OF RS.20,83,60 0/- AND THAT ASSESSEE HAD ALSO PROVED ITA NO .264 5/AHD/2011 . A.Y. 2008- 09 4 THE SOURCE OF THE DEPOSITS TO BE THE MONEY RECEIVED BACK BY THEM WHICH WAS KEPT WITH A DIAMOND FIRM. HE HAS FURTHER NOTED THAT ASSESSING OFFICER HAD NOT VERIFIED THE ISSUE WHEN ASSESSEE PRODUCED FOUR DEPOSITORS NOR DID THE A.O. INFORM THE CONCERNED A.O. OF THE 4 DEPOSITORS TO VERIFY THE TAXABILITY OF CASH D EPOSITED U/S.69 OF THE ACT IN THEIR CASES. WITH RESPECT TO REMAINING 4 DEPOSITORS, LD. CIT(A) HAS GIVEN A FINDING THAT THE STATEMENT OF ACCOUNTS REVEAL THE SUFFICIENT INCOME AND AVAILA BILITY OF FUND FOR GIVING THE LOAN TO THE ASSESSEE. HE HAS FURTHER GIVEN A FINDING THAT ASSE SSEE HAD PRODUCED THE BASIC RECORDS OF THE CREDITORS WHICH PROVED THEIR IDENTITY AND THAT THE MONEY WAS TRANSFERRED THROUGH CHEQUES TO THE ASSESSEE AND ALL THE DEPOSITORS WERE INCOME TAX ASSESSEE AND THUS THE ASSESSEE HAS PROVED THE IDENTITY OF THE DEPOSITORS, GENUINENESS OF THE TRANSACTIONS AND THEIR CREDITWORTHINESS. BEFORE US, REVENUE HAS NOT PLACED ANY MATERIAL ON RECORD TO CONTROVERT THE AFORESAID FINDINGS OF LD. CIT(A). I N VIEW OF THESE FACTS, WE FIND NO REASON TO INTERFERE WITH THE ORDER OF LD. CIT(A). THUS, T HIS GROUND OF REVENUE IS DISMISSED. 9. IN THE RESULT, THE APPEAL OF THE REVENUE IS DI SMISSED. ORDER PRONOUNCED IN OPEN COURT ON 16-02- 2016. SD/- SD/- (S. S. GODARA) (ANIL CHATURVEDI) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD: DATED. 16/02/2016 TRUE COPY S K SINHA COPY OF THE ORDER FORWARDED TO:- 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AHMEDABAD