Sejal Kirtikant Kapadia, Ahmedabad V. The Income Tax Officer, (HQ) (Intl. Taxn. & TP), Ahmedabad

ITA 3000/AHD/2015

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 8069 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 1 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-12-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2012-2013
• Appeal Filed On: 26-10-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ROOP CHAND
• Assessee Lawyers: M K PATEL
• Keywords: Unexplained cash credit
• Section: 143(3); 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD SMC BENCH AHMEDABAD BEFORE SHRI PRAMOD KUMAR, ACCOUNTANT MEMBER, AND SHRI S. S. GODARA, JUDICIAL MEMBER. ITA NO. 3000/AHD/2015 (ASSESSMENT YEAR: 2012-13) SEJAL KIRTIKANT KAPADIA A-401, NRI TOWER, JUDGES BUNGLOW ROAD, VASTRAPUR, AHMEDABAD - 380015 APPELLANT PAN: AFQPK3587H VS. ITO HQ (INTL. TAXN. & TP), AHMEDABAD RESPONDENT /BY ASSESSEE : SHRI M. K. PATEL, A.R. /BY REVENUE : SHRI ROOP CHAND, SR. D .R. /DATE OF HEARING : 12.09.2017 /DATE OF PRONOUNCEMENT : 07.12.2017 ORDER PER S. S. GODARA, JUDICIAL MEMBER THIS ASSESSEES APPEAL FOR ASSESSMENT YEAR 2012-13 ARISES AGAINST THE CIT(A)-13, AHMEDABADS ORDER DATED 24.08.2015 IN CA SE NO. CIT(A)- XIII/AHD/105/2014-15, UPHOLDING ASSESSING OFFICERS ACTION MAKING SECTION 68 ADDITION OF UNEXPLAINED CASH CREDITS TO THE TUNE OF RS.8,47,880/- IN ASSESSMENT ORDER DATED 30.01.2015, IN PROCEEDINGS U/S. 143(3) OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT. HEARD BOTH SIDES. CASE FILE PERUSED. ITA NO. 3000/AHD/15 [M/S.SEJAL KIRTIKANT KAPADIA VS . ITO] A.Y. 2012-13 - 2 - 2. THE ASSESSEE IS STATED TO BE A NON RESIDENT INDI AN CONDUCTING HIS BUSINESS IN VIETNAM. THE ASSESSING OFFICER NOTICED HIM TO HAVE DEPOSITED CASH CURRENCY IN HIS BANKS INSTEAD OF INWARD REMITTANCE. THE SAID C URRENCY ADMITTEDLY WAS A FOREIGN ONE. THE ASSESSEE UNDISPUTEDLY HAD MAINTAINED BANK ACCOUNTS WITH AXIS BANK AND STATE BANK OF INDIA. HE PLEADED BEFORE THE ASSESSI NG OFFICER TO HAVE CARRIED SOME FOREIGN CURRENCY DURING INDIA VISIT AS DEPOSITED IN BANK ACCOUNTS ABOVESAID SINCE LYING UNUSED. THE ASSESSING OFFICER REJECTED THE S AID PLEA TO TREAT THE ABOVE CASH DEPOSITS TO BE UNEXPLAINED U/S.68 OF THE ACT THEREB Y MAKING THE IMPUGNED ADDITION OF RS.8,47,880/-. 3. THE CIT(A) AFFIRMS ASSESSING OFFICERS FINDINGS AS UNDER: 5. THE LD. A.R. OF THE APPELLANT VIDE LETTER DTD.L 9.-08-2015 MADE FOLLOWING SUBMISSION IS AS UNDER: 2.1 WE BRING TO THE KIND NOTICE OF YOUR HONOUR THAT THE ADDITION OF RS. 847880/- U/S 68 HAS BEEN MADE BY THE LD AO OK ACCOUNT OF THE FOLLOWING CREDITS IN THE BANK STATEMENT ON VANOUS DATES. SR. NO DATE AMOUNT RS. BANK NAME 1 29.09.2011 242999/- AXIS BANK 2 19.10.2011 165430/- STATE BANK OF INDIA 3 11.11.2011 239400/- STATE BANK OF INDIA 4 25.02.2012 200051/- STATE BANK OF INDIA TOTAL 847880/- THE COPIES OF THE BANK STATEMENT SHOWING THE ABOVE TRANSACTION WERE SUBMITTED BY THE APPELLANT ON 3.9.2014 TO THE LD AO. THE APPELLA NT ALSO BROUGHT TO THE NOTICE OF THE LD AO THAT THE AMOUNT CREDITED IS ON ACCOUNT OF CONVERSION OF FOREIGN CURRENCY WHICH HE HAD BROUGHT TO INDIA DURING HIS V ISIT. HE HAD SURRENDERED THE FOREIGN CURRENCY TO THE AUTHORISED MONEY CHANGER AN D THE AMOUNT WAS DEPOSITED IN THE BANK. THE AMOUNT WAS RECEIVED BY THE APPELLA NT THROUGH ACCOUNT PAYEE CHEQUE, AND THE NAMES AND ADDRESSES , INVOICES ETC. , FOR CHANGING THE FOREIGN EXCHANGE WAS IN THE POSSESSION OJ THE APPELLANT, BU T NO INVESTIGATION WAS DONE BY THE LD. AO TO ESTABLISH THE CORRECTNESS OF THE CRED ITS AS MENTIONED IN THE GROUND NO 1. EVEN THE NAME OF THE PARTY IE WTEIZMAN FOREX LIMITED IS MENTIONED AGAINST THE ENTRY IN THE BANK STATEMENT TO SHOW THA T THE AMOUNT HAS BEEN RECEIVED FROM THE PARTY AND NO CASH DEPOSITED. THE APPELLANT ALSO FURNISHED THE DETAILS OF HIS ARR IVAL AND DEPARTURE IN THE COUNTRY AND SUBMITTED THE COPY OF THE PASSPORT TO E STABLISH HIS PRESENCE IN INDIA. ( A COPY OF THE PASSPORT AND STATEMENT SHOWING HIS PR ESENCE IS GIVEN AT (ANNEXURE - ) IT WOULD BE EVIDENT FROM THE ABOVE AND THE BANK S TATEMENT, THE AMOUNT DEPOSITED IN THE BANK WAS DURING HIS SLAY IN INDIA FOR SHORT PERIODS, FURTHER, THE APPELLANT HAD ALSO PRODUCED HIS INCOME TAX RETURN COPIES THAT HE HAD FILLED AS AN NRI IN VIETNAM WHICH SHOWS HIS CREDIT WORTHINESS. (COPY OF THE IT RETURN FILLED IN ITA NO. 3000/AHD/15 [M/S.SEJAL KIRTIKANT KAPADIA VS . ITO] A.Y. 2012-13 - 3 - VIETNAM IS GIVEN AT ANNEXURE - ) THERE WAS ADEQUATE MATERIAL SUBMITTED BY THE APPELLANT WHICH WAS IN THE POSSESSION OF THE LD AO , BUT HE SIMPLY ASSUMED THAT THE ABOVE AMOUNT REFLECTED IN THE BANK STATEMENT IS ON ACCOUNT OF CASH DEPOSIT AND WITHOUT ANY APPLICATION OF MIND, MADE AN ADDITI ON OF RS . 847880/- U/S 68 OF THE INCOME TAX-ACT. FURTHER, THE LD AO'S OBSERVATION ON SELF DECLARATIO N BY THE ASSESSEE FOR THE AMOUNT OF FOREIGN CURRENCY ON HIS ARRIVAL, - IT MAY PLEASE BE NOTED THAT THERE IS REQUIREMENT OF DECLARATION ONLY IF THE AMOUNT OF FOREIGN CURRENCY IN POSSESSION IS MORE THAN USD 5000 OR IT'S EQUIVALENT. FROM THIS IT IS EVIDENTLY CLEAR THAT THE LD AO HAS NOT APPLIED THE CORRECT FADS BEFORE MAKIN G HIS MIND TO MAKE AN ADDITION U/S 68. FINDINGS. I HAVE PERUSED THE ORDER OF THE AO AND SUBMISSIONS MADE IN THIS REGARD. THE APPELLANT HAS EXPLAINED THAT A SUM OF RS 847880 WAS CREDITED IN HIS TWO BANK ACCOUNTS DETAILS OF WHICH ARE ABOVE IN PARA 5.1 FIN D THAT FIRST CREDIT ENTRY IS IN AXIS BANK IS BY WEIZMAN FOREX LIMITED AND OTHER 3 CREDIT ENTRIES ARE IN SBI AND ARE NARRATED AS CLG ENTRIES. FOR ALL THESE 4 CREDIT ENTRIES THE APPELLANT HAS NOT BEEN ABLE TO PRODUCE NECESSARY CONFORMATION FROM THE FOR EX DEALER FROM WHOM THE CONVERSION WAS EFFECTED. I AM OF THE VIEW THAT MER ELY BY SAYING ENTRIES AS A RESULT OF FOREX EXCHANGE CONVERSION IS NOT SUFFICIENT. NA TURE AND SOURCE OF CREDIT ENTRIES HAVE TO BE BACKED P BY SOME DOCUMENTARY EVIDENCE WH ICH NOT FURNISHED BY THE APPELLANT. THE GROUND RAISED BY THE APPELLANT IS T HUS DISMISSED. 4. LEARNED COUNSEL REPRESENTING ASSESSEE REITERATES HIS STAND TAKEN IN BOTH THE LOWER PROCEEDINGS. HE PLEADS THAT THE ASSESSEE BEI NG AN NRI HAD ENCASHED HIS UNUSED FOREIGN CURRENCY WHICH LATER ON FORMING SUBJ ECT MATTER OF THE IMPUGNED ADDITION. HE TAKES US TO ASSESSEES PAPER-BOOK INT ER ALIA CONTAINING HIS SUBMISSIONS MADE BEFORE THE CIT(A) ALONG WITH ALL ANNEXURES, RE PLIES DATED 03.09.2014 AND 20.01.2015 TENDERED IN ASSESSMENT PROCEEDINGS, COPI ES OF INVOICES FOR CONVERSION OF FOREIGN EXCHANGE IN QUESTION, BANK STATEMENT, PA SSPORT ENTRIES, COPIES OF RETURN FILED IN VIETNAM AND REPLY SUBMITTED TO THE ASSESSI NG OFFICER DATED 20.08.2014; RESPECTIVELY. HIS CASE THEREFORE IS THAT THE ASSES SEE HAS SUCCESSFULLY DISCHARGED HIS BURDEN OF PROVING GENUINENESS OF AND CREDITWORTHINE SS OF HIS EXPLANATION. THERE IS NO DISPUTE THAT THE ASSESSEE IS AN NRI CONDUCTIN G HIS BUSINESS AFFAIRS IN VIETNAM. HIS RETURN TO THIS EFFECT FORMS PART OF THE PAPER B OOK AT PAGES 31 TO 33 AS FILED IN THE SAID COUNTRY. LEARNED DEPARTMENTAL REPRESENTAT IVE FAILS TO DISPUTE THIS CRUCIAL FACT REVEALING INCOME OF 9,868,600 VND FROM 01.07.2 009 TO 31.03.2012. THE ASSESSEES PASSPORT ENTRIES IN THE CORRESPONDING TI ME SPAN FORM PART OF THE PAPER- ITA NO. 3000/AHD/15 [M/S.SEJAL KIRTIKANT KAPADIA VS . ITO] A.Y. 2012-13 - 4 - BOOK IN PAGES 21 TO 30. IT THEREFORE TRANSPIRES TH AT THE ASSESSEE HAS BEEN MAKING REGULAR VISITS TO HIS HOMELAND FROM TIME TO TIME AS WELL AS MANAGING BUSINESS AFFAIRS IN VIETNAM. HIS VERY SIGNIFICANT PLEA RAIS ED BEFORE THE CIT(A) THAT HE NEVER CARRIED FOREIGN CURRENCY OF MORE THAN 5000 USD IN S UCH VISITS HAS NOWHERE BEEN SPECIFICALLY REBUTTED OR NOT EVEN DEALT WITH IN COU RSE OF THE LOWER APPELLATE PROCEEDINGS. WE THUS OBSERVE THAT THE ASSESSEE HAS ENCASHED THE ABOVE FOREIGN CURRENCY IN INDIA WITHOUT VIOLATING SUCH CURRENCY C ONVERSION LAW IN THE ABOVE FOUR INSTANCES WITH A RECOGNIZED AGENT. WE ACCORDINGLY A RE OF THE OPINION THAT HE HAS SUCCESSFULLY DISCHARGED HIS ONUS REGARDING THE ADDI TION AMOUNT IN QUESTION OF RS.8,47,880/-. THE IMPUGNED ADDITION IS ACCORDINGLY DELETED. 5. THIS ASSESSEES APPEAL IS ALLOWED. [PRONOUNCED IN THE OPEN COURT ON THIS THE 7 TH DAY OF DECEMBER, 2017.] SD/- SD/- (PRAMOD KUMAR) (S. S. GODARA) ACCOUNTANT MEMBER JUDICIAL M EMBER AHMEDABAD: DATED 07/12/2017 S.K.SINHA/BT / COPY OF ORDER FORWARDED TO:- 1. / REVENUE 2. / ASSESSEE 3. / CONCERNED CIT 4. - / CIT (A) 5. , , / DR, ITAT, AHMEDABAD 6. / GUARD FILE. BY ORDER / , TRUE COPY / ,