The ITO, Ward-1(2), Bhavnagar V. Shri Vikramsinh Parbatsinh Gohil, Bhavnagar

ITA 2897/AHD/2010

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 94545 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 11 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-10-2015
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: D
• Next Hearing Date: 09-09-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 18-10-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: R P MAURYA
• Assessee Lawyers: P B PARMAR
• Keywords: Unexplained cash credit; Deemed to accrue or arise in india; Additional evidence; Corroborative evidences
• Section: 143(3); 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD D BENCH AHMEDABAD BEFORE S/SHRI KUL BHARAT, JM, & MANISH BORAD, A M. ITA NO.2897/AHD/2010 ALONG WITH C.O. NO.326/AHD/2010 ASST. YEAR:2007-08 INCOME-TAX OFFICER, WARD 1(2), BHAVNAGAR VS SHRI VIKRAMSINGH PARBATSINGH GOHIL, 34, RAVISHANTINAGAR, NEAR NIDHI SHOW ROOM, OPP. GAYATRI MANDIR, CHITRA, BHAVNAGAR. (APPELLANT) (RESPONDENT) PA NO.AIXPG 5625L APPELLANT BY SHRI R. P. MAURYA, SR.DR RESPONDENT BY SHRI P. B. PARMAR, AR DATE OF HEARING: 11/9/2015 DATE OF PRONOUNCEMENT: 14/10/2015 O R D E R PER MANISH BORAD, ACCOUNTANT MEMBER. THESE CROSS APPEALS BY THE REVENUE AND THE ASSESSE E ARE AGAINST THE ORDER OF ORDER OF CIT(A)-XX, AHMEDABAD DATED 9.8.2010 PERTAINING TO ASSESSMENT YEAR 2007-2008. ITA NO.2897/AHD/2010 & CO.326/AHD/2010 ASST. YEAR 2007-08 2 2. FIRST WE WILL DEAL WITH THE REVENUES APPEAL BEA RING NO.2897/AHD/2010. REVENUE HAS RAISED FOLLOWING GROU NDS :- 1. THE LD. CIT(A) XX, AHMEDABAD HAS ERRED IN LAW A ND ON FACTS IN DELETING THE ADDITION OF RS.10,92,000/- MADE BY THE ASSESSING OFFICER U/S 68 OF THE I.T. ACT, 1961 WITH OUT APPRECIATING THE FACTS OF THE CASE AND THE MATERIAL S BROUGHT ON RECORD BY THE ASSESSING OFFICER. 1.2 IN DOING SO THE LD. CIT(A)-XX, AHMEDABAD HAS ER RED IN LAW AND ON FACTS IN NOT APPRECIATING THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE WAS GIVEN AMPL E OPPORTUNITIES TO SUBMIT EVIDENCES/EXPLANATIONS WITH REGARD TO UNSECURED LOAN OF RS.11,56,328/- AND CASH OF RS.10, 92,000/- DEPOSITED IN THE BANK. BUT THE ASSESSEE FAILED TO D O SO. THE ASSESSEE HAD NEITHER EXPLAINED THE SOURCE OF CASH D EPOSITED IN THE BANK NOR PRODUCED THE EVIDENCE IN SUPPORT OF HI S CONTENTIONS. THE ASSESSEE HAD NOT PROVED WHETHER TH E CASH OF RS.10,92,000/- DEPOSITED IN THE BANK WAS OUT OF FRE IGHT RECEIPTS OR UNSECURED LOANS. 1.3 THE LD. CIT(A)-XX, AHMEDABAD HAS FURTHER ERRED IN LAW AND ON FACTS. IN ALLOWING THE CLAIM OF THE ASSESSEE BY ADM ITTING ADDITIONAL EVIDENCES AT APPELLATE STAGE IN CONTRAVE NTION OF RULE 46A OF THE I.T. RULES. AN OPPORTUNITY SHOULD HAVE B EEN GRANTED TO THE ASSESSING OFFICER TO EXAMINE THE EVIDENCES P RODUCED AT THE APPELLATE STAGE. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LD. CIT(A) OUGHT TO HAVE UPHELD THE ORDER OF THE A.O. 3. IT IS, THEREFORE, PRAYED THAT THE ORDER OF THE C IT(A) BE SET ASIDE AND THAT OF THE AO BE RESTORED TO THE ABOVE EXTENT. 4. BRIEFLY STATED RELATED FACTS OF THE CASE ARE THA T ASSESSEE IS AN INDIVIDUAL AND HE HAS FILED HIS RETURN OF INCOME FO R AY 2007-08 ON 22.1.2008 U/S 44AE DECLARING TOTAL INCOME AT RS.1,2 2,380/-. ITA NO.2897/AHD/2010 & CO.326/AHD/2010 ASST. YEAR 2007-08 3 THEREAFTER ASSESSEES CASE WAS SELECTED FOR SCRUTIN Y AND ASSESSED UNDER SECTION 143(3) BY ITO, WARD -1(2), BHAVNAGAR DATED 4.12.2009 AND MADE TWO ADDITIONS, ONE OF RS.10,92,000/- ON AC COUNT OF CASH DEPOSIT UNDER SECTION 68 AND ANOTHER ADDITION OF RS .11,56,328/- ON ACCOUNT OF UNEXPLAINED CASH CREDIT UNDER SECTION 68 BEING UNEXPLAINED UNSECURED LOAN. TOTAL ADDITION MADE WAS OF RS.22,48,328. 5. DURING THE COURSE OF ASSESSMENT PROCEEDINGS ASSE SSEE FILED COPIES OF BANK STATEMENT, BALANCE SHEET AND PROFIT AND LOSS ACCOUNT. THE ASSESSING OFFICER ALSO ASKED THE ASSESSEE TO FU RNISH THE DETAILS OF UNSECURED LOANS SHOWN IN THE BALANCE SHEET AND D ETAILS OF CASH DEPOSITS IN BANK ACCOUNT. AS PER THE ASSESSING OFFI CER DURING THE COURSE OF HEARING THE ASSESSEE WAS OFFERED VARIOUS OPPORTUNITIES BUT THE ASSESSEE COULD NOT FURNISH EVIDENCES IN SUPPORT OF HIS CLAIM. THE ASSESSING OFFICER, THEREFORE, MADE ADDITION OF RS.2 2,48,328/-. 6. AGGRIEVED, ASSESSEE WENT IN APPEAL BEFORE CIT(A) . FROM THE ORDER OF CIT(A) IT CAN BE UNDERSTOOD THAT HE HAS TA KEN UP THE TWO ADDITIONS MADE BY THE ASSESSING OFFICER AS INTER-RE LATED. ASSESSING OFFICER HAS MADE ONE ADDITION OF RS.10,92,000/- FOR UNEXPLAINED CASH DEPOSIT IN BANK ACCOUNT MAINTAINED BY THE ASSESSEE AND MADE ANOTHER ADDITION OF RS.11,56,328/- FOR THE TOTAL AM OUNT OF UNSECURED LOANS STANDING AT THE BALANCE SHEET AT THE END OF T HE YEAR FOR THE VERY REASON THAT ASSESSEE DID NOT PROVIDE ANY SUPPORTING EVIDENCES TO PROVE THAT WHETHER THESE UNSECURED LOANS ARE FRESH LOANS TAKEN DURING THE YEAR OR THEY RELATE TO PREVIOUS YEAR AND IN CASE THEY ARE FRESH AND SECURED LOANS SUPPORTING EVIDENCE TO PROV E THE ITA NO.2897/AHD/2010 & CO.326/AHD/2010 ASST. YEAR 2007-08 4 GENUINENESS AND CREDITWORTHINESS OF THE UNSECURED L OANS WAS NOT PLACED ON RECORD BEFORE THE AO. 7. LD. CIT(A) INTERLINKED BOTH THE ISSUES AND DECID ED THAT THE SOURCE OF UNEXPLAINED CASH DEPOSIT MAY BE FROM UNEX PLAINED UNSECURED LOAN AND SO TWO ADDITIONS CANNOT BE SUSTA INED AND, THEREFORE, RESTRICTED THE ADDITION TO RS.11,56,328 (BEING THE HIGHER AMOUNT OUT OF TWO ADDITIONS OF RS.10,92,000 & RS.11 ,56,328) AND THEREBY DELETED THE ADDITION OF RS.10,92,000/- ON A CCOUNT OF UNACCOUNTED CASH DEPOSIT IN THE BANK ACCOUNT. 8. AGGRIEVED, REVENUE IS NOW IN APPEAL BEFORE THE T RIBUNAL. THE LD. DR RELIED ON THE ORDER OF ASSESSING OFFICER AND ALSO SUBMITTED THAT EVEN THOUGH LD. CIT(A) HAS CONFIRMED THE ADDIT ION OF RS.11,56,328 OUT OF TOTAL ADDITION OF RS.22,48,328 BUT THE GROUNDS ARE REFERRING TO BOTH THE ADDITIONS I.E. ONE ON ACC OUNT OF UNEXPLAINED CASH DEPOSIT AND ANOTHER IN REGARD TO UNEXPLAINED U NSECURED LOANS. 9. ON THE OTHER HAND, THE LD. AR OF THE ASSESSEE SU BMITTED DETAILED PAPER BOOK TO SUPPORT HIS GROUNDS. LD. AR SUBMITTED THAT ASSESSEES SOURCE OF INCOME IS FROM TRUCK PLYING AN D DURING THE YEAR UNDER APPEAL IT HAS EARNED GROSS RENT INCOME FROM T RUCK PLYING AT RS.19,80,462/-. OUT OF THIS GROSS REVENUE OF RS.19, 80,462/-, MAJOR AMOUNT HAS BEEN RECEIVED FROM MODERN SALT WORKS PVT . LTD. TO WHOM ASSESSEE HAS BEEN PROVIDING TRANSPORTATION SERVICES AND DURING THE FINANCIAL YEAR 2006-07 MODERN SALT WORKS PVT. LTD. HAS PAID A CASH SUM OF RS.17,50,738/- ON VARIOUS DATES AND INCOME-T AX HAS BEEN ITA NO.2897/AHD/2010 & CO.326/AHD/2010 ASST. YEAR 2007-08 5 DEDUCTED AT RS.17,861/- WHICH CAN BE VERIFIED FROM TDS CERTIFICATE, CERTIFICATE GIVEN BY MODERN SALT WORKS PVT. LTD. AN D LEDGER ACCOUNT OF MODERN SALT WORKS PVT. LTD. IN THE BOOKS OF ASSE SSEE. THE LD. AR SUBMITTED THAT THIS CASH SUM OF RS.17,50,738/- WAS RECEIVED FROM MODERN SALT WORKS PVT. LTD. DURING THE YEAR AND WAS THE MAIN SOURCE OF CASH DEPOSIT IN THE BANK ACCOUNT DURING THE YEAR AND THESE DEPOSITS OF CASH IN BANK ACCOUNT CAN BE FURTHER CRO SS-EXAMINED FROM CASH BOOK REGULARLY MAINTAINED BY THE ASSESSEE. AS REGARDS THE UNSECURED LOANS OF RS.11,56,328 LD. AR SUBMITTED TH AT NO FRESH LOANS WERE OBTAINED DURING THE YEAR AND ALL THE UNSECURED LOANS APPEARING IN THE BALANCE SHEET AS ON 31.3.2007 RELATE TO UNSE CURED LOANS TAKEN IN EARLIER YEARS AND ALSO PLACED ON RECORD, THE COP IES OF LEDGER ACCOUNT, CONFIRMATIONS, IDENTITY PROOFS IN SUPPORT OF HIS SUBMISSIONS AND ALSO REFERRED TO THE JUDICIAL PRONOUNCEMENT OF HONBLE JURISDICTIONAL HIGH COURT IN TAX APPEAL NO.324 OF 2 012 IN THE CASE OF CIT, GANDHINAGAR VS. JAGATKUMAR SATISHBHAI PATEL VI DE ORDER DATED 4 TH DECEMBER, 2012 WHEREIN THE HONBLE HIGH COURT CONF IRMED THE VIEW OF THE TRIBUNAL THAT THE ADDITION ON ACCOUNT O F UNEXPLAINED CASH CREDIT UNDER SECTION 68 OF THE ACT CANNOT BE MADE F OR THE OPENING BALANCES OF UNSECURED LOANS. 10. WE HAVE HEARD RIVAL CONTENTIONS AND GONE THROUG H THE FACTS AND CIRCUMSTANCES OF THE CASE AS WELL AS PERUSED TH E MATERIAL AVAILABLE ON RECORD. FROM THE FACTS OF THE CASE DUL Y EXAMINED IN THE LIGHT OF PAPER BOOK AND INFORMATION SUPPLIED BY THE LD. AR AS WELL AS FROM THE PERUSAL OF CASH BOOK, BANK STATEMENT, CERT IFICATE OF MODERN SALT WORKS PVT. LTD. AND TDS CERTIFICATE IT CAN BE DULY INFERRED THAT ITA NO.2897/AHD/2010 & CO.326/AHD/2010 ASST. YEAR 2007-08 6 THE ASSESSEE HAS SUFFICIENT EVIDENCES TO SUPPORT TH E VARIOUS CASH DEPOSITS DURING THE YEAR IN THE BANK ACCOUNT TOTALI NG TO RS.10,92,000/- AND, THEREFORE, THIS GROUND OF APPEA L OF REVENUE RELATING TO ADDITION OF RS.10,92,000/- MADE BY ASSE SSING OFFICER U/S 68 OF THE ACT ON UNEXPLAINED CASH DEPOSIT, IS DISMI SSED. 11. WE NOW TAKE UP THE OTHER PART OF THE ISSUE RAIS ED IN THE GROUNDS OF THE REVENUE WHICH IS RELATED TO UNEXPLAI NED UNSECURED LOAN OF RS.11,56,328/-. THE LD. AR HAS PLACED ON RE CORD SUFFICIENT MATERIAL ON RECORD TO PROVE THAT NO FRESH UNSECURED LOAN WAS TAKEN DURING THE YEAR, IDENTITY PROOF OF THE PARTIES FROM UNSECURED LOAN WAS TAKEN HAS ALSO BEEN SUBMITTED ALONG WITH CONFIRMATI ONS. BUT ON GOING THROUGH THE ASSESSMENT ORDER WHEREIN THE ASSESSING OFFICER HAS GIVEN HIS OBSERVATIONS THAT HE HAS GIVEN VARIOUS OP PORTUNITIES TO THE ASSESSEE TO FURNISH THE DETAILS RELATING TO UNSECUR ED LOANS, BUT AFTER REPEATED OPPORTUNITIES GIVEN BY ASSESSING OFFICER, ASSESSEE DID NOT APPEAR AND NO INFORMATION WHICH WAS REQUIRED BY THE ASSESSING OFFICER WAS PLACED ON RECORD. HOWEVER, THE ASSESSEE HAS FURNISHED ALL THESE INFORMATION BEFORE THE LD. CIT(A) BUT IF ASSESSEE HAS SUBMITTED ALL THESE DETAILS BEFORE THE ASSESSING OF FICER WHICH WERE LATER ON SUBMITTED BEFORE CIT(A) AND BEFORE US THEN IT WAS QUITE POSSIBLE THAT IF THE EXAMINATION OF THESE EVIDENCES NO ADDITION WOULD HAVE BEEN MADE BY THE ASSESSING OFFICER. FOR THIS V ERY REASON, IN ORDER TO VERIFY THAT WHETHER THE UNSECURED LOANS AR E BEING BROUGHT FORWARD FROM PREVIOUS YEAR WE REMIT BACK THIS ISSUE TO THE FILE OF ASSESSING OFFICER WHO WILL EXAMINE ALL THE SUPPORTI NG RELATING TO UNSECURED LOANS SUBMITTED BEFORE US AND IF IT IS PR OVED TO THE ITA NO.2897/AHD/2010 & CO.326/AHD/2010 ASST. YEAR 2007-08 7 SATISFACTION OF THE ASSESSING OFFICER THAT NO FRESH LOANS HAVE BEEN TAKEN DURING THE YEAR AND THE UNSECURED LOANS RELAT E TO THE PREVIOUS YEAR THEN THIS ADDITION OF RS.11,56,328 WILL STAND DELETED. ACCORDINGLY THIS ISSUE RELATING TO GROUND OF APPEAL BY REVENUE IS ALLOWED FOR STATISTICAL PURPOSES. 12. OTHER GROUNDS ARE OF GENERAL NATURE, HENCE NEED NO ADJUDICATION. 13. NOW WE TAKE UP THE C.O. NO.326/AHD/2010 WHEREIN ASSESSEE HAS RAISED FOLLOWING TWO GROUNDS :- 1. THE LD. CIT(A)-XX, HAS ERRED IN LAW AND ON FACT S IN CONFIRMING UNSECURED LOANS OF RS.11,56,328/- AS DEEMED INCOME OF THE APPELLANT. 2. THE LD. CIT(A)-XX HAS ERRED IN LAW AND ON FACTS IN CONFIRMING CASH DEPOSITED IN BANK RS.10,92,000/- AS INCOME OF THE APPELLANT. 14. GROUND NO.1 IN REGARD TO UNSECURED LOAN OF RS.1 1,56,328/- HAS ALREADY BEEN DULY CONSIDERED AND DECIDED BY US IN R EVENUES APPEAL VIDE PARA NO.11 ABOVE, WHEREIN WE HAVE HELD TO REMI T BACK THIS ISSUE TO THE FILE OF ASSESSING OFFICER WHO WILL EXAMINE A LL THE SUPPORTING RELATING TO UNSECURED LOANS SUBMITTED BEFORE US AND IF IT IS PROVED TO THE SATISFACTION OF THE ASSESSING OFFICER THAT NO F RESH LOANS HAVE BEEN TAKEN DURING THE YEAR AND THE UNSECURED LOANS RELATE TO THE PREVIOUS YEAR THEN THIS ADDITION OF RS.11,56,328 WI LL STAND DELETED. ACCORDINGLY THIS ISSUE RELATING TO GROUND OF APPEAL BY REVENUE IS ITA NO.2897/AHD/2010 & CO.326/AHD/2010 ASST. YEAR 2007-08 8 ALLOWED FOR STATISTICAL PURPOSES. ACCORDINGLY THIS GROUND OF CO RAISED BY ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES 15. SO FAR AS GROUND NO.2 IN REGARD TO UNEXPLAINED CASH DEPOSIT IN BANK ACCOUNT OF RS.10,92,000/- IS CONCERNED, WE HAV E ALREADY DECIDED THE SAME IN REVENUES APPEAL VIDE PARA NO. 10 ABOVE WHEREIN WE HAVE HELD THAT ASSESSEE WAS HAVING SUFFI CIENT EVIDENCES TO EXPLAIN THE CASH DEPOSIT IN BANK ACCOUNT OF RS.1 0,92,000/- AND ACCORDINGLY DELETED THE ADDITION MADE BY THE ASSESS ING OFFICER. AS SUCH THIS GROUND OF C.O. IS ALLOWED. 16. IN THE RESULT, THE APPEAL OF REVENUE AND THE C. O. OF ASSESSEE ARE PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 14/10/2015 SD/- SD/- (KUL BHARAT) JUDICIAL MEMBER (MANISH BORAD) ACCOUNTANT MEMBER DATED 14/10/2015 MAHATA/- COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE BY ORDER ASSTT.. REGISTRAR, ITAT, AHMEDABAD ITA NO.2897/AHD/2010 & CO.326/AHD/2010 ASST. YEAR 2007-08 9 1. DATE OF DICTATION: 11/9/2015 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE T HE DICTATING MEMBER: 24/9/2015/14/10/2015 OTHER MEMBE R: 3. DATE ON WHICH APPROVED DRAFT COMES TO THE SR. P. S./P.S.: 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE TH E DICTATING MEMBER FOR PRONOUNCEMENT: __________ 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE S R. P.S./P.S.: 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK: 14/10/2015 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK: 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER: 9. DATE OF DESPATCH OF THE ORDER: