The ACIT, Circle-1, Bhavnagar V. Shri Ravjibhai Hirabhai Patel, Bhavnagar

ITA 2917/AHD/2009

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 63104 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 1 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-11-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 12-10-2012
• Assessment Year: 2005-2006
• Appeal Filed On: 23-10-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D K SINGH
• Keywords: Unexplained cash credit; Income from undisclosed sources; Corroborative evidences
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD C BENCH BEFORE: SHRI D.K. TYAGI, JUDICIAL MEMBER AND SHRI ANIL CHATURVEDI, ACCOUNTANT ME MBER I.T.A. NO.2917/AHD/2009 A.Y. 2005-06 THE I.T.O. WARD-1(1) BHAVNAGAR APPELLANT VS. RAVJIBHAI HIRABHAI PATEL PLOT NO.1, MITHILESH, OPP. AJAYWADI, SUBHASH NAGAR BHAVNAGAR PAN-AKMPP9202F RESPONDENT DEPARTMENT BY : SHRI D.K. SINGH, SR. D.R. ASSESSEE BY : SHRI TUSHAR HEMANI, A.R. DATE OF HEARING : 12.10.2012 DATE OF PRONOUNCEMENT : 30.11.2012 / ORDER PER : D.K. TYAGI, JUDICIAL MEMBER THIS IS REVENUES APPEAL AGAINST THE ORDER OF LD. C IT(A)-XX, AHMEDABAD DATED 27.07.2009. 2. THE REVENUE, IN THIS APPEAL, IS AGGRIEVED BY TH E ACTION OF LD. CIT(A) IN DELETING THE ADDITION OF RS.10,22,000/- MADE BY THE A.O. U/S 68 OF THE ACT. 3. DURING THE ASSESSMENT PROCEEDINGS THE A.O. OBSER VED THAT THE ASSESSEE HAS SHOWN FOLLOWING LOANS/DEPOSITS IN VARIOUS NAMES OF THE THIRD PARTIES:- 1. SHRI VASRAMBHAI N. NAVADA RS.1,55,000/- 2. SHRI MANJIBHAI S. NAVADAR RS.1,75,000/- 3. SHRI LALIT P. KUNDAH RS.1,85,000/- 4. SHRI HIRA B. ROJIT RS.1,45,000/- 5. SHRI NARANBHAI H. NAVADA RS.1,77,000/- 6. SHRI BHIKABHAI D. DHAKANIYA RS.1,85,000/- TOTAL RS.10,22,000/- I.T.A. NO.2917/AHD/2009 A.Y. 2005-06 2 THE ASSESSEE WAS ASKED TO ESTABLISH THE GENUINENESS OF THESE TRANSACTIONS IN TERMS OF IDENTITY OF THE DEPOSITORS, THE CAPACITY O F SUCH CREDITORS TO ADVANCE THE MONEY AND THE GENUINENESS OF THE TRANSACTION CA RRIED OUT. AFTER CONSIDERING THE SUBMISSION OF THE ASSESSEE, THE A.O . OBSERVED THAT SINCE ASSESSEE HAD OFFERED ONLY CONFIRMATION FROM THE CON CERNED PERSONS WITHOUT ANY SUPPORTING EVIDENCE, THE EXPLANATION OFFERED BY THE ASSESSEE WAS NOT SATISFACTORY IN RESPECT OF THE ABOVE DEPOSITS. ACC ORDINGLY, ASSESSEE HAS FAILED TO PROVE THE GENUINENESS OF THE TRANSACTION AND CRE DITWORTHINESS/CAPACITY OF THE DEPOSITORS. THE A.O. TREATED THE ENTIRE AMOUNT OF RS.10,22,000/- AS INCOME FROM UNDISCLOSED SOURCE AND ADDED IN TOTAL I NCOME OF THE ASSESSEE. 4. BEFORE LD. CIT(A) ASSESSEE RELIED ON THE FOLLOWI NG SUBMISSIONS:- 'I AM A BROKER IN MARKETING YARD AT BHAVNAGAR AND F ILED MY RETURN OF INCOME FOR A. Y 2005-06 ON 27.12.2005 DECLARING TAX ABLE INCOME OF RS.99,526/-. I HAVE PRODUCED BOOKS OF ACCOUNTS AND FILED THE DET AILS CALLED FOR BY THE ASSESSING OFFICER. I HAVE ALSO FILED CONFIRMAT IONS HAVING THEIR DETAILED ACCOUNTS WITH THEIR DETAILED ADDRESS OF AL L SUNDRY CREDITORS FOR GOODS WITH THE ASSESSING OFFICER. AS ALL THE CREDIT ORS ARE FARMERS, COPY OF 7/12 I.E. EVIDENCE OF AGRICULTURIST IS ALSO FILE D WITH THE ASSESSING OFFICER. TOTAL THERE ARE 6 SUNDRY CREDITORS FOR GOO DS. OUT OF THIS LALJI P. KUNDLI WAS EXPIRED ON 21.01.2007 AND NARAN H. NAVDA WAS ''EXPIRED'- 'ON 6.2.2.005. ALL THIS CREDITORS HAS GIVEN THEIR GOODS TO THE ASS ESSEE FOR SELLING IN THE SAME IN MARKETING YARD OF BHAVNAGAR AND THEY HA VE NOT COLLECTED THE REALIZATION OF THE GOODS FROM ME. THE REALIZAT ION OF GOODS IS COLLECTED BY THEM IN NEXT F.Y. I.E. A Y. 2006-07. WITHOUT CONSIDERING THE ABOVE FACTS, THE ASSESSING OFFICER HAS CONSIDERED ALL THE CREDITORS FOR GOODS AS DEPOSITOR S AND THE AMOUNT OF RS.10,22,000/- IS ADDED INTO MY RETURN OF INCOME AS INCOME FROM UNDISCLOSED SOURCES U/S.68 OF THE I.T. ACT. I HEREBY SUBMIT MY CLARIFICATION REGARDING ALL 6 CR EDITORS AS UNDER :- 1. SHRI VASRAMBHAI N. NAVDA RS. 1.55,000/- I.T.A. NO.2917/AHD/2009 A.Y. 2005-06 3 SHRI VASRAMBHAI MOHANBHAI MONPARA IS AN AGRICULTURI ST OF VILLAGE AFAVA NAVDA, TOL BARVALA, DIST. AHMEDABAD, AGE 71 Y EARS HAVING @ 14 VIGHA OF AGRICULTURAL LAND AT NAVDA. ON 16 M MARCH 2004 HE HAS GIVEN COTTON OF 353 MAN. ON THE SAME DAY I HAVE SOL D THEIR GOODS TO SHRI VIJAY TRADING CO. OF MARKETING YARD, BHAVNAGAR FOR RS. 1,55,000 ON THEIR BEHALF AS A BROKER. I HAVE COLLECTED THE R EALIZATION AND KEPT WITH ME. ON 3.4.2005 HE HAS COLLECTED MONEY FROM ME . COPY OF A/C FOR F.Y. 2004-05 & 2005-06, AFFIDAVIT DATED 15.01.2 008 REGARDING TRANSACTION WITH ME, COPY OF 7/12, COPY OF 8A, COPY OF BILL ISSUED BY SHRI VIJAY TRADING CO., COPY OF IDENTITY CARED ISSU ED BY ELECTION COMMISSION, COPY OF RATION CARD, IS ATTACHED HEREWI IH 2. SHRI MAHFIBHAI S. NAVDA RS. 1,75,OO0/- SHRI MANJIBHAI SAVJIBHAI MONPARA IS AN AGRICULTURIS T OF VILLAGE 'NAVA NAVDA, TAL BARVALA, DIST. AHMEDABAD, AGE 67 YEARS H AVING @ 13 VIGHA OF AGRICULTURAL LAND AT NAVDA. ON 7 TH MARCH 2004 HE HAS GIVEN COTTON OF 398 MAN. ON THE SAME DAY I HAVE SOLD THEIR GOODS TO SHRI VIJAY TRADING CO. OF MARKETING YARD, BHAVNAGAR FOR RS. 1, 75,000 ON THEIR BEHALF AS A BROKER. I HAVE COLLECTED THE REALIZATIO N AND KEPT WITH ME. ON 7.4.2005 HE HAS COLLECTED MONEY FROM ME. COPY OF A/C FOR F.Y.2004-05 & 2005-06, AFFIDAVIT DATED 15.01.2008 R EGARDING TRANSACTION WITH ME, COPY OF 7/12, COPY OF BILL ISS UED BY SHRI VIJAY TRADING CO., COPY OF IDENTITY CARD ISSUED BY ELECTI ON COMMISSION, COPY OF RATION CARD, IS ATTACHED HEREWITH. 3. LALIT P. KUNDLI SHRI LALJIBHAI POPATHHAI KUNDLI IS AN AGRICULTURIST OF VILLAGE PANVI, TAL. RANPUR, DIST. AHMEDABAD, EXPIRED ON 21 .01.2007 HAV ING @ 6 VIGHA OF AGRICULTURAL LAND AT PANVI. ON 1 ST AUGUST 2004 HE HAS GIVEN COTTON OF 423 MAN. ON THE SAME DAY I HAVE SOLD THEIR GOODS TO SHRI VIJAY TRADING CO. OF MARKETING YARD, BHAVNAGAR FOR RS.1,8 5,OO0 ON THEIR BEHALF AS A BROKER. I HAVE COLLECTED THE REALIZATI ON AND KEPT WITH ME. ON 21.3.2008 HE HAS COLLECTED MONEY FROM ME. COPY O F A/C FOR F. Y. 2004-05 & 2005-06 AFFIDAVIT OF WIFE, SMT. DAVALBEN LALJIBHAI KUNDLI DATED 22.01.2008 REGARDING TRANSACTION WITH ME, COP Y OF 7/12, COPY OF 8A, COPY OF BILL ISSUED, BY SHRI VIJAY TRADING C O., COPY OF IDENTITY CARD ISSUED BY ELECTION COMMISSION, COPY OF RATION CARD, IS ATTACHED HEREWITH. 4. HIRA B. ROJIT SHRI HIRABHAI BHAGVANBHAT KANANI IS AN AGRICULTURIS T OF VILLAGE ROJID, TAL, BARVALU, DIST. AHMEDABAD, AGE 65 YEARS HAVING @ 6 VIGHA OF AGRICULTURAL LAND AT NAVDA. ON 1 ST AUGUST 2004 HE HAS GIVEN COTTON OF 332 MAN. ON THE SAME DAY I HAVE SOLD THEIR GOODS TO SHRI VIJAY TRADING CO. OF MARKETING YARD, BHAVNAGAR FOR RS.1,4 5,000 ON THEIR BEHALF AS A, BROKER. L HAVE COLLECTED THE REALIZATI ON AND KEPT WITH ME. I.T.A. NO.2917/AHD/2009 A.Y. 2005-06 4 ON 3.4.2005 HE HAS COLLECTED MONEY FROM ME. COPY OF A/C FOR F.Y.2004-05 & 2005-06, AFFIDAVIT DATED 15.01.2008 R EGARDING TRANSACTION WITH ME, COPY OF 7/12, COPY OF BILL IS SUED BY SHRI VIJAY ] TRADING CO., COPY OF IDENTITY CARD ISSUED BY ELECTI ON COMMISSION, COPY OF RATION CARD IS ATTACHED HEREWITH. 5. NARANBHAI H. NAVDA SHRI NARANBHAI HARIBHAI PATEL IS AN AGRICULTURIST O F VILLAGE NAVA NAVDA, TAL. BARVALA, DIST. AHMEDABLAD, EXPIRED ON 06-02.20 05 HAVING @ 5 VIGHA OF AGRICULTURAL LAND AT PANVI. ON 2 ND AUGUST 2004 HE HAS GIVEN COTTON OF 405 MAN. ON THE SAME DAY I HAVE SOLD THEI R GOODS TO SHRI VIJAY TRADING CO. OF MARKETING YARD, BHAVNAGAR FOR RS.1,77,000 ON THEIR BEHALF AS A BROKER. I HAVE COLLECTED THE REAL IZATION AND KEPT WITH ME. ON 3.4.2005 HE HAS COLLECTED MONEY FROM ME. COP Y OF A/C FOR F.Y.2004-05 & 2005-06, AFFIDAVIT OF HIS WIFE SMT. J AMNABEN NARANBHAI PATEL DATED 22.01.2008 REGARDING TRANSACT ION WITH ME, COPY OF 7/12, COPY OF 8A, COPY OF BILL ISSUED BY SH RI VIJAY TRADING CO., COPY OF IDENTITY CARD ISSUED BY ELECTION COMMISSION , COPY OF RATION CARD, IS ATTACHED HEREWITH. 6. BHIKHABHAI D DHAKANIYA BHIKHABHAI GORDHANBHAI PATEL IS AN AGRICULTURIST OF VILLAGE DHAKANIYA, TAL BOTAD, DIST. BHAVNAGAR, AGE 65 YEARS HAVING @ 5 VIGHA OF AGRICULTURAL LAND AT NAVDA. ON 3 RD MARCH 2004 HE HAS GIVEN COTTON OF 421 MAN. ON THE SAME DAY HAVE SOLD THEIR GOODS TO SHRI VIJAY TRADING CO. OF MARKETING YARD, BHAVNAGAR FOR RS.1,8 5,000 ON THEIR BEHALF AS A BROKER. I HAVE COLLECTED THE REALIZATIO N AND KEPT WITH ME. ON 7.4.2005 HE HAS COLLECTED MONEY FROM ME. COPY OF A/C FOR F.Y.2004-05 & 2005-06, AFFIDAVIT DATED 15.01.2008 R EGARDING TRANSACTION WITH ME, COPY OF 1/12, COPY OF BILL ISS UED BY SHRI VIJAY TRADING CO. COPY OF IDENTITY CARD ISSUED BY ELECTIO N COMMISSION, COPY OF RATION CARD, IS ATTACHED HEREWITH. THIS ALL ARE MY CREDITORS AS ON 31.03.2005. FROM A LL THE ABOVE EVIDENCES YOU WILL FIND THEIR IDENTITY, CREDITWORTH INESS AND GENUINENESS. IN SUCH CIRCUMSTANCES, I HUMBLY REQUE ST YOU TO CONSIDER ALL SUNDRY CREDITORS FOR GOODS AS GENUINE AND DELETE THE ADDITION OF RS.10,22,000 MADE BY THE ASSESSING OFFI CER. 5. ON THESE SUB MISSIONS LD. CIT(A) CALLED FOR THE REMAND REPORT FROM THE A.O. THE REMAND REPORT SUBMITTED BY THE A.O. WAS G IVEN TO THE ASSESSEE FOR HIS OPINION AND AFTER TAKING INTO CONSIDERATION OF THIS, THE ADDITION MADE BY THE A.O. OF RS.10,22,000/- WAS DELETED. AGGRIEVED BY TH IS ORDER NOW THE RE VENUE IS IN APPEAL. I.T.A. NO.2917/AHD/2009 A.Y. 2005-06 5 6. AFTER HEARING BOTH THE PARTIES AND PERUSING THE RECORD WE FIND THAT THE ASSESSEE IS AN INDIVIDUAL ENGAGED IN THE BUSINESS O F COMMISSION AGENCY OF AGRICULTURAL PRODUCE. DURING THE YEAR UNDER APPEAL THE ASSESSEE HAS SHOWN A LIABILITY OF RS.10,22,000/- IN THE NAME OF SIX SUND RY CREDITORS FOR GOODS. ASSESSEES CONSISTENT CONTENTION HAS BEEN THAT THIS AMOUNT OF RS.10,22,000/- WAS RECEIVED BY THE ASSESSEE FROM M/S VIJAY TRADING COMPANY IN RESPECT OF SALE OF AGRICULTURAL GOODS RECEIVED FRODM THE ABOVE MENTIONED SIX SUNDRY CREDITORS. BEFORE THE A.O. ASSESSEE FURNISHED COPY OF BILLS ISSUED BY SHRI VIJAY TRADING COMPANY WHEREIN IT HAS CLEARLY SPECIFIED TH E NAME OF THE PERSONS, NAME OF THE COMMISSION AGENT, DISCREPANCY OF THE AG RICULTURAL PRODUCE PURCHASED BY THEM BY THEM IN TERMS OF QUANTITY AND VALUE, THE AMOUNT OF THE PURCHASED PRICE, THE AMOUNT OF COMMISSION AND OTHER RELEVANT PARTICULARS. THE ASSESSEE ALSO FURNISHED AFFIDAVIT OF THE CREDITORS IN WHICH ALL THE CREDITORS HAVE GIVEN THEIR DECLARATION THAT THEY HAVE GIVEN ASSESS EES AGRICULTURAL PRODUCE FOR SELLING THEM IN MARKETING YARD AT BHAVNAGAR AND THE SALES CONSIDERATIONS HAVE BEEN RECEIVED, BOTH IN THE SUBSEQUENT FINANCIAL YEA R RELEVANT TO ASSESSMENT YEAR 2006-07. THE COPY OF 7/12 OF ALL THESE SIX CR EDITORS WAS ALSO FURNISHED. CONFIRMATION LETTER OF M/S VIJAY TRADING COMPANY AL ONG WITH COPY OF THE ACKNOWLEDGEMENT OF RETURN OF INCOME OF M/S VIJAY TR ADING COMPANY WAS ALSO FILED BY THE ASSESSEE BEFORE THE A.O. THE A.O., HO WEVER, WITHOUT MAKING ANY INQUIRIES EITHER AT THE STAGE OF ASSESSMENT PROCEED INGS OR DURING THE REMAND PROCEEDINGS ABOUT THE NATURE OF THE TRANSACTION, TR EATED THESE AMOUNTS AS UNEXPLAINED CASH CREDIT. LD. CIT(A) HAS RIGHTLY HE LD THAT LIABILITY ON ACCOUNT OF NORMAL BUSINESS OF SELLING THE AGRICULTURAL PRODUCE BELONGING TO VARIOUS FARMERS WHICH WAS PROPERLY REFLECTED IN THE BALANCE SHEET W AS WITHOUT ANY PROPER BASIS I.T.A. NO.2917/AHD/2009 A.Y. 2005-06 6 HAS BEEN TREATED BY THE A.O. AS UNEXPLAINED CASH CR EDIT AND HE WAS RIGHT IN DELETING THIS ADDITION MADE BY THE A.O. U/S 68 OF T HE ACT AND THEREFORE, THE ORDER PASSED BY LD. CIT(A) DELETING THE ADDITION OF RS.10.22.000/- AS UNEXPLAINED CASH DEPOSIT IS HEREBY UPHELD. 7. IN THE RESULT, REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 30.11.2012 SD/- SD/- (ANIL CHATURVEDI) (D.K. TYAGI) ACCOUNTANT MEMBER JUDICIAL MEMBER N.K. CHAUDHARY, SR. P.S. COPY OF THE ORDER FORWARDED TO: 1. THE APPLICANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE LD. CIT (APPEALS) 5. THE DR, AHMEDABAD 6. THE GUARD FILE BY ORDER AR,ITAT,AHMEDABAD