Shri Jayesh Balchandbhai shah, Ahmedabad V. Income Tax Officer, Ward-5(3)(1), Ahmedabad

ITA 2645/AHD/2017

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 2290 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 6 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-06-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2014-2015
• Appeal Filed On: 30-11-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: TUSHAR HEMANI P B PARMAR A RS
• Keywords: Unexplained investment; Corroborative evidences
• Section: 143(3)

Judgement Text

, B IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER &SHRI AMARJIT SINGH, ACCOUNTANT MEMBER ./I.T.A. NO. 2645/AHD/2017 ( / ASSESSMENT YEAR:2014-15) SHRI JAYESH BALCHANDBHAI SHAH 10, NEMRAJUL APARTMENT, NR.RAMVIHAR SOCIETY, NARAYAN NAGAR ROAD, PALDI, AHMEDABAD-380007 / VS. ITO WARD-5(3)(1), AHMEDABAD ./ ./PAN/GIR NO. : AEA PS2 684 A ( /APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : SHRI TUSHAR HEMANI& P.B. PARMAR, A.RS. / RESPONDENTBY: SHRI MUDIT NAGPAL, SR. DR !' /DATE OF HEARING 18/06/2019 #$!' / DATE OF PRONOUNCEMENT 26/06/2019 %& /O R D E R PER AMARJIT SINGH - AM: THE APPEAL FILED BY THE ASSESSEE FOR A.Y. 2014-15, ARISE FROM ORDER OF THE CIT(A)-5, AHMEDABAD DATED 01.11.2017, IN PROCEEDINGS UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT. 2. THE BRIEF FACT IS THAT THE ASSESSEE HAS FILED RET URN OF INCOME DECLARING TOTAL INCOME OF RS. 9,58,760/- ON 14.10.2014. THE CASE O F THE ASSESSEE WAS SUBJECT TO SCRUTINY U/S. 143(2) OF THE ACT ON 31.08.2015. THE REMAINING FACTS OF THE CASE ARE DISCUSSED WHILE ADJUDICATING THE GROUND OF APPEAL F ILED BY THE ASSESSEE AS UNDER. ITA NO. 2645/AHD/2017 A.Y. 2014-15 2 GROUND NO. 1:- DISALLOWANCE OF INTEREST OF RS. 31,23,892:- 3. DURING THE COURSE OF ASSESSMENT THE AO NOTICED T HAT ASSESSEE HAS SHOWN INTEREST AS PAYABLE TO THE AMOUNT OF RS. 31,23,892/ -. THE AO HAS OBSERVED THAT INTEREST PAYABLE IS ONLY A PROVISION, THEREFORE, HE HAS ADDED THE SAME TO THE TOTAL INCOME OF THE ASSESSEE. 4. AGGRIEVED ASSESSEE HAS FILED APPEAL BEFORE THE LD . CIT(A). THE LD. CIT(A) HAS DISMISSED THE APPEAL OF THE ASSESSEE. 5. WE HAVE HEARD THE RIVAL CONTENTION ON THIS ISSUE AND IT IS NOTICED THAT ASSESSEE WAS FOLLOWING MERCANTILE SYSTEM OF ACCOUNT ING. THEREFORE, THE OUTSTANDING INTEREST EXPENSES WAS SHOWN AS INTEREST PAYABLE.AS PER MERCANTILE SYSTEM OF ACCOUNTING INTEREST EXPENSES ARE TO BE DE BITED TO THE PROFIT AND LOSS ACCOUNT IRRESPECTIVE OF THE FACT THAT AS TO WHETHER THE SAME HAS BEEN PAID OR NOT. WE CONSIDERED THAT LD. CIT(A) AND AO HAS COMPLETELY TAKEN A WRONG ASSUMPTION. THEREFORE, THE IMPUGNED ADDITION DESERVED TO BE DELE TED. ACCORDINGLY, APPEAL OF THE ASSESSEE IS ALLOWED ON THIS ISSUE. GROUND NO. 2:- ADDITION OF RS. 2,54,72,690 AS UNEXPLAINED INVESTME NTS:- 6. DURING THE COURSE OF ASSESSMENT PROCEEDING THE A O HAS NOTICED THAT ASSESSEE HAS SHOWN LOAN AND ADVANCES TO THE AMOUNT OF RS. 16,35,000/- TO M/S. B. K. COMMODITIES. HOWEVER, AS PER THE BALANCE SHEET OF THE B. K. COMMODITIES THE TOTAL AMOUNT OF ADVANCES MADE BY THE ASSESSEE WAS S HOWN TO THE AMOUNT OF RS. 2,71,07,690/-. THEREFORE, DIFFERENCE OF RS. 2,54,7 2,690/- (RS. 2,71,07,690 16,35,000) WAS ADDED TO THE INCOME OF THE ASSESSEE AS UNEXPLAINED INVESTMENT. 7. ASSESSEE HAS FILED BEFORE THE LD. CIT(A). THE LD. CIT(A) HAS DISMISSED THE APPEAL OF THE ASSESSEE. ITA NO. 2645/AHD/2017 A.Y. 2014-15 3 8. WE HAVE HEARD THE RIVAL CONTENTION AND PERUSED T HE MATERIAL ON RECORD. DURING THE COURSE OF APPELLATE PROCEEDINGS BEFORE T HE LD. COUNSEL HAS SUBMITTED PAPER BOOK COMPRISING DETAILS OF SUBMISSION MADE BE FORE THE LOWER AUTHORITIES. WITH THE ASSISTANCE OF THE LD. REPRESENTATIVES WE HA VE GONE THROUGH THE DIFFERENT PAGES OF THE AFORESAID PAPER BOOK. IT IS NOTICED T HAT LOAN TRANSACTIONS OF THE ASSESSEE WITH M/S. B. K. COMMODITIES HAS BEEN SHOWN UNDER THE HEAD LOAN FROM FAMILY MEMBERS IN THE BALANCE SHEET OF THE ASSESSE E AS PER PAGE 19 OF THE PAPER BOOK. THE ASSESSEE HAS SHOWN THESE LOAN ON NET BAS IS AT RS. 84,812.21. AS PER NO. 22 OF THE PAPER BOOK THE TOTAL LOAN OBTAINED FR OM THE FAMILY MEMBER INCLUDING M/S. B. K. COMMODITIES WAS OBTAINED AT RS . 2,84,09,939.52/- AGAINST LOAN AND ADVANCE PROVIDED TO FAMILY MEMBERS AT RS. 2,84,94,751.73. IT IS FURTHER NOTICED THAT OUT OF THE AFORESAID LOAN TO FAMILY ME MBERS THE OUTSTANDING LOAN/ADVANCES MADE TO M/S. B. K. COMMODITIES WAS TO THE AMOUNT OF RS. 2,66,52,609/- IN THE LEDGER A/C APPEARING IN THE BO OKS OF THE ASSESSEE AS PER PAGE 23 OF THE PAPER BOOK. SIMILARLY, AS PER LEDGER A/C OF ASSESSEE APPEARING IN THE BOOKS OF M/S. B. K. COMMODITIES THE CLOSING BALANCE OF LOAN AND ADVANCES WAS ALSO AT RS. 2,66,52,609/- AS PER PAGE NO. 39 TO 50 PLACED IN THE BOOK. IT IS NOTICED THAT THE ASSESSEE HAS SHOWN LOAN FROM FAMILY MEMBER IN HIS BALANCE SHEET ON NET BASIS. IN VIEW OF THE ABOVE FACTS WE CONSIDERED THAT AO AND CIT(A) HAS FAILED TO DISPROVE THE CORRECTNESS OF THE TRANSACTION AS REPO RTED IN THE BOOKS OF ACCOUNT OF THE ASSESSEE. THEREFORE, THE ACTION OF THE CIT(A) IS NOT JUSTIFIED AND ADDITION IS DELETED. GROUND NO. 3:- ADDITION OF RS. 2,02,500 IN RESPECT OF HOUSEHOLD EX PENSES:- 9. DURING THE COURSE OF ASSESSMENT THE AO WAS OF TH E VIEW THAT ASSESSEE HAS SHOWN LOW WITHDRAWAL TO THE AMOUNT OF RS. 37,500/- AND STATED THAT CLAIM OF WITHDRAWAL OF RS. 28,400/- FROM HUF WAS NOT SUPPORT ED WITH RELEVANT EVIDENCES. HE HAS FURTHER STATED THAT ASSESSEE HAS FAILED TO G IVE DETAIL OF FAMILY MEMBER IN SPITE OF SPECIFIC REQUEST MADE TO HIM FOR THE SAME. AFTER CONSIDERING THE STATUS OF THE ASSESSEE THE AO HAS ESTIMATED THE HOUSEHOLD EXP ENSES OF THE ASSESSEE @ ITA NO. 2645/AHD/2017 A.Y. 2014-15 4 20,000/- PER MONTH AND DETERMINED THE TOTAL HOUSEHO LD EXPENSES, AT RS. 2,14,000/- AS AGAINST RS. 37,500/- SHOWN BY THE ASSESSEE. THER EFORE, THE DIFFERENCE OF RS. 2,02,500/- WAS ADDED TO THE TOTAL INCOME OF THE ASS ESSEE. 10. WE HAVE HEARD THE RIVAL CONTENTION AND NOTICED THAT EVEN BEFORE US THE ASSESSEE HAS NOT FURNISHED THE RELEVANT DETAIL IN R ESPECT OF FAMILY MEMBERS AND SUPPORTING EVIDENCE OF WITHDRAWAL MADE FROM HUF ETC .,THEREFORE, WE DO NOT FIND ANY ERROR IN THE DECISION OF THE CIT(A). ACCORDINGL Y, THIS APPEAL OF THE ASSESSEE IS DISMISSED. 11. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PA RTLY ALLOWED. SD/- SD/- (RAJPAL YADAV) (AMARJIT SINGH) JUDICIAL MEMBER ACCOUNTANT ME MBER AHMEDABAD: DATED 26/06/2019 TANMAY TRUE COPY / COPY OF ORDER FORWARDED TO:- 1. / REVENUE 2. % / ASSESSEE 3. '( ! )! / CONCERNED CIT 4. )! - / CIT (A) 5. *+, ! ( , ' ( , -.%'% / DR, ITAT, AHMEDABAD 6. ,/ 0 / GUARD FILE. BY ORDER / %& , 1 / - ' ( , -.%'% 2 THIS ORDER PRONOUNCED IN OPEN COURT ON 26/06/2019