HOTEL GOKUL LUNCH HOME, MUMBAI V. INCOME TAX OFFICER , MUMBAI

ITA 2853/MUM/2022

AI Insights

The case involves Hotel Gokul Lunch Home, a partnership firm engaged in the hotel and restaurant business, which appealed against the order of the Commissioner of Income Tax (Appeals) concerning the Assessment Year 2018-19. The firm had taken unsecured loans from two parties, Harish Poojary and Maheshwari Prabhakar Kunte, and during the assessment, the genuineness and creditworthiness of these loans were questioned. The Tribunal examined the evidence provided, including PAN details, addresses, and income tax return acknowledgments of the lenders. It was found that while the loan from Maheshwari Prabhakar Kunte was substantiated with adequate evidence, the loan from Harish Poojary lacked sufficient proof of creditworthiness, leading to the dismissal of that part of the appeal. The Tribunal also addressed the premature challenge to penalty proceedings under section 271AAC(1), dismissing that ground as well.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 136060 (ITAT-MUMBAI)
• Duration Of Justice: 6 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-05-2023
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: H
• Next Hearing Date: 19-04-2023
• Assessment Year: 2018-2019
• Appeal Filed On: 09-11-2022
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 68

Judgement Text

म ु ंबई ठ “ एच ”,म ु ंबई , ए ं म ज त # ं$, ेख े म' IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “ H ”, MUMBAI BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER& SHRI AMARJIT SINGH , ACCOUNTANT MEMBER ं.2853/म ु ं/2022 ( +. . 2018-19) ITA NO.2853/MUM/2022(A.Y.2018-19) Hotel Gokul Lunch Home, 10, Nawaz Building, Tulloch Road, Colaba, Mumbai 400 039. PAN: AAAFH-3678-K ...... ,/Appellant ब+ म Vs. Income Tax Officer, National Faceless Assessment Centre Mumbai. ..... - त /Respondent , . / Appellant by : Shri Praveen B. Shetty - त . /Respondent by : Smt. Anne Varghese, Sr.AR ु + ई / त / Date of hearing : 20/04/2023 012 / त / Date of pronouncement : 30/05/2023 ेश/ORDER PER VIKAS AWASTHY, JM: This appeal by the assessee is directed against the order of Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi [in short ‘the CIT(A)’] dated 21/09/2022 for the Assessment Year 2018-19. 2. Shri Praveen B. Shetty appearing on behalf of the assessee submitted that the assessee is a partnership firm engaged in the business of hotels and 2 ITA NO.2853/MUM/2022(A.Y.2018-19) restaurants. During the period relevant to the assessment year under appeal the assessee had taken unsecured loan amounting to Rs.46,41,433/- from two parties: (i) Harish Poojary - Rs.40,41,433/- (ii) Maheshwari Prabhakar Kunte - Rs. 6,00,000/-. During the course of assessment proceedings the assessee had furnished details of the lenders viz. PAN & Address. The assessee had also furnished confirmations from the lenders. In respect of Maheshwari Prabhakar Kunte the assessee had also filed copy of Income Tax Return Acknowledgement for Assessment Year 2018-19. The ld. Authorized Representative for the assessee pointed that the assessee had taken loans from Maheshwari Prabhakar Kunte in the preceding Assessment Year as well. The Assessing Officer accepted the genuineness and creditworthiness of the said lender in Assessment Year 2017- 18. During the financial year relevant to Assessment Year under appeal, the assessee had repaid part of the loan taken earlier and had taken fresh loan of Rs.6,00,000/- in two tranches of Rs.1,00,000/- and Rs.5,00,000/-. The ld. Authorized Representative for the assessee submitted that the Assessing Officer and the CIT(A) have failed to consider the documentary evidences filed by the assessee to prove genuineness and creditworthiness of the lenders. 3. Per contra, Smt. Anne Varghese representing the Department vehemently defended the impugned order. The ld. Departmental Representative submitted that admittedly the assessee had furnished PAN and Address of the lenders however, no Bank Statement of the parties was provided by the assessee to prove creditworthiness of the lenders. The ld. Departmental 3 ITA NO.2853/MUM/2022(A.Y.2018-19) Representative submits that even confirmations filed by the assessee were not signed by the lenders. The ld. Departmental Representative prayed for upholding the impugned order and dismissing appeal of the assessee. 4. We have heard the submissions made by rival sides and have examined the orders of authorities below. During Financial Year 2017-18 relevant to the Assessment Year 2018-19, the assessee has taken loans from Harish Poojary and Maheshwari Prabhakar Kunte. The assessee has furnished PAN and Address in respect of both the lenders. In so far as Maheshwari Prabhakar Kunte we find that the assessee had taken loans in the preceding Assessment Year as well. As per confirmation filed by the assessee there was opening balance of Rs.20,00,000/- as on 01/04/2017, out of which the assessee repaid Rs.17,00,000/- during Financial Year 2017-18 and has taken fresh loan of Rs.6,00,000/-. The ld. Authorized Representative for the assessee has drawn our attention to the assessment order for Assessment Year 2017-18, wherein no addition was made by the Assessing Officer in respect of loans from Maheshwari Prabhakar Kunte. In other words the Assessing Officer was satisfied with the creditworthiness of the said party. The assessee has also filed copy of ITR Acknowledgement for Assessment Year 2018-19 in respect of Maheshwari Prabhakar Kunte. Thus, qua Maheshwari Prabhakar Kunte the assessee has discharged its onus in proving identity of the lender, genuineness of the loan transaction and creditworthiness of the party. 5. As regards Harish Poojary, the assessee has furnished PAN and address, however, no Bank details were furnished by the assessee either before the Assessing Officer /CIT(A) nor any document to prove creditworthiness of Harish Poojary was filed by the assessee before the Tribunal. Thus, the 4 ITA NO.2853/MUM/2022(A.Y.2018-19) assessee failed to discharge its onus in proving the creditworthiness of Harish Poojary. Under the provisions of section 68 of the Income Tax Act,1961 [in short ‘the Act’] three mandatory conditions that have to be complied with i.e: (i) identification of the lender; (ii) creditworthiness of the lender; and (iii)genuineness of the loan transaction. Even though the assessee was able to prove identity of the lender ( Harish Poojary), the assessee failed to discharge its onus in proving creditworthiness and genuineness of the transaction. 6. In facts of the case and documents on record,, we direct the Assessing Officer to delete addition of Rs.6,00,000/ i.e. in respect of loan from Maheshwari Prabhakar Kunte . Thus, ground No.1 of appeal is partly allowed. 7. In ground No.2 of appeal, the assessee has assailed initiation of penalty proceedings u/s. 271AAC(1) of the Act. Challenge to penalty proceedings at this stage is premature, hence, ground No.2 of appeal is dismissed, as such. 8. In the result, appeal by the assessee is partly allowed. Order pronounced in the open court on Tuesday the 30 th day of May, 2023. Sd/- Sd/- (AMARJIT SINGH ) (VIKAS AWASTHY) ेख /ACCOUNTANT MEMBER /JUDICIAL MEMBER म ु ंबई/ Mumbai, 4 + ं /Dated 30/05/2023 Vm, Sr. PS(O/S) 5 ITA NO.2853/MUM/2022(A.Y.2018-19) त ल प अ े षतCopy of the Order forwarded to : 1. ,/The Appellant , 2. - त / The Respondent. 3. The PCIT 4. 5 6 - त + , . . ., म ु बंई/DR, ITAT, Mumbai 5. 6 78 9 : /Guard file. BY ORDER, //True Copy// (Dy./Asstt.Registrar)/Sr. Private Secretary ITAT, Mumbai