ITO 5(1)(4), MUMBAI V. HARMONY MEDIA P.LTD, MUMBAI

ITA 3009/MUM/2012

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 5743 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 8 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-01-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: H
• Next Hearing Date: 09-12-2013
• Assessment Year: 2008-2009
• Appeal Filed On: 02-05-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M REYAN
• Keywords: Gift; Reassessment proceedings
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH H , MUMBAI BEFORE SHRI D. KARUNAKARA RAO , ACCOUNTANT MEMBER AND SHRI SANJAY GARG , JUDICIAL MEMBER ITA NO. 3009/M/ 2012 ASSESSMENT YEAR: 2008 - 09 I.T.O 5(1)(4), AAYAKAR BHAVAN, R.NO.569, 5 TH FLOOR, M.K. ROAD, MUMBAI - 400020 VS. M/S. HARMONY MEDIA P. LTD. 21/23 GAZDAR B UILDING , UNDERI A STREET, MUMBAI 400 008 PAN: AABCH5952Q (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI VIJAY MEHTA REVENUE BY : SHRI M. REYAN, D.R. DATE OF HEARING : 09.12. 2013 DATE OF PRONOUNCEMENT : 31.01.2014 O R D E R PER SANJAY GARG, JUDICIAL MEMBER: THE PRESENT APPEAL HAS BEEN FILED BY THE REVENUE AGAINST THE ORDER OF THE CIT(A) DATED 24.02.12 RELEVANT TO ASSESSM ENT YEAR 2008 - 09 . THE REVENUE HAS TAKEN THE FOLLOWING GROUNDS OF APPEAL. (1) WHETHER ON THE FACTS, CIRCUMSTANCES AND IN THE LAW, THE LD. CIT(A) ERRED IN DIRECTING THE ASSESSING OFFICER TO DELETE THE ADDITION OF RS. 35,00,000/ - MADE BY THE ASSESSING O FFICER U/S. 68 OF THE I.T. ACT, 1961 WITHOUT APPRECIATING THAT THE ASSESSEE FAILED TO ESTABLISH THE CREDIT WOR T HINESS OF THE LOAN CREDITOR. (2) WHETHER ON THE FACTS, CIRCUMSTANCES AND IN THE LAW, THE LD. CIT(A) WAS JUSTIFIED IN DELETING THE ADDITION OF RS.35,00,000/ MADE BY THE ASSESSING OFFICER U/S.68 OF THE I.T. ACT WITHOU T APPRECIATING THE FACT, THAT, THE LOAN CREDITOR WAS NOT A PERSON OF MEANS AND MATERIAL, IN AS MUCH AS THAT THE LOAN CREDITOR HAD N O SUBSTANTIAL INCOME/FUNDS TO ADVANCE SUCH BIG AMOU NT OF LOAN?' 2. THE GRIEVANCE OF THE REVENUE IN BOTH THE ABOVE NOTED GROUNDS OF A PPEAL ITA NO. 3009/M/2012 M/S. HARMONY MEDIA P. LTD. 2 IS REGARDING THE DELETION OF THE ADDITION OF RS.35 LAKHS WHICH WAS MADE BY THE AO INTO THE INCOME OF THE ASSESSEE UNDER SECTION 68 OF THE INCOME TAX ACT. THE BRIEF FA CTS OF THE CASE ARE THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS AO NOTICED THAT THE ASSESSEE COMPANY HAD RAISED A LOAN OF RS.35 LAKHS FROM ONE MR. AAMIR GAZDAR. WHEN CONFRONTED, THE ASSESSEE FURNISHED CONFIRMATION LETTERS, PAN DETAILS AND INCOME TAX DETAILS OF THE SAID MR. AAMIR GAZDAR. HOWEVER , HE DECIDED TO SUMMON THE SAID MR. AAMIR GAZDAR. THE SAID MR. AAMIR GAZDAR ATTENDED BEFORE THE AO AS A CREDITOR AND HIS STATEMENT ON OATH WAS RECORDED ON 9.12.2010. THE SAID MR. AAMI R GAZDAR ADMITTED BEFORE THE AO THAT HE HAD ADVANCED A SUM OF R S .35, 00,000/ - IN THE ACCOUNTING Y EAR RELEVANT TO THE ASSESSMENT YEAR 2008 - 09 TO THE ASSESSEE COMPANY. THE AO WENT A STEP FURTHER AND DECIDED TO EXAMINE THE SOURCE OF MONEY IN THE HANDS OF THE SAID CREDITOR. THE SAID CREDI TOR EXPLAINED THAT THE SOURCES OF THE AFORESAID R S .35, 00 , 000/ - WAS GIFTS RECEIVED FROM HIS OWN ELDER BROTHER NAMELY MR. ABDUL H. G AZDAR. HE FURNISHED FULL PARTICULARS OF THE MONEY RECEIVED FROM SAID MR. ABDUL H. G AZDAR AND ALSO ABOUT OTHER LOANS TAKEN. FUR THER, THE A SSESSEE FURNISHED A COPY OF PASS PORT OF THE SAID MR. ABDUL H . GAZDAR, WHO LENT MONEY TO THE CREDITOR MR. A AMIR GAZDAR AND WHO, IN TURN LENT MONEY TO THE ASSESSEE COMPANY. C ONFIRMATION LETTER FROM THE CREDITOR OF THE CREDITOR I.E . MR. ABDUL H. G AZDAR AND COPIES OF OTHER LOAN CONFIRMATION LETTERS WERE ALSO FURNISHED. THE AO WAS NOT SATISFIED ; HE WANTED TO EXAMINE THE SOURCE OF SOURCE. HE ASKED THE CREDITOR MR. AAMIR GAZDAR TO FURNISH ASSESSMENT PARTICULARS, CREDITWORTHINESS OF THE SAID MR. ABDUL H . GAZDAR, WHO HAS BEEN A RESIDENT OF UNITED KINGDOM (ENGLAND). SINCE THE ASSESSMENT PARTICULARS AND CREDITWORTHINESS OF MR. ABDUL H. GAZDAR, A RESIDENT OF UK (ENGL AND) WAS NOT PROVED, HENCE THE AO TAXED R S .35, 00 , 000 / - IN THE HANDS OF THE PRESENT APPELLANT COMPANY UNDER SECTION 68 OF THE ACT. ITA NO. 3009/M/2012 M/S. HARMONY MEDIA P. LTD. 3 3. IN APPEAL, THE LD. CIT(A) OBSERVED THAT SAID MR. AAMIR GAZDAR HAD DULY EXPLAINED THE SOURCE OF MONEY IN HIS HANDS. EVEN HE HAD ALSO PROVED THE SOURCE OF MONEY AT THE HANDS OF HIS CREDITOR MR. ABDUL H. GAZDAR, RESID ENT OF UK (ENGLAND). NOT ONLY THE CONFIRMATION LETTER FROM THE SAID MR. ABDUL H. GAZDAR BUT HIS DULY SIGNED AFFIDAVIT WAS ALSO PRODUCED BEFORE THE AO. IT WAS ALSO EXPLAINED BY THE SAID MR. ABDUL H. GAZDAR IN HIS AFFIDAVIT THAT HE WORKED AS AN ARCHITECT I N KUWAIT FOR 20 YEARS WHERE HE EARNED TAX FREE INCOME. THEREAFTER HE SHIFTED TO LONDON. THE GIFTS WERE MADE BY HIM TO HIS BROTHER MR. AAMIR GAZDAR THROUGH BANKING CHANNELS AND THE COPY OF RELEVANT BANK STATEMENTS WERE ALSO SUBMITTED DURING THE REMAND PRO CEEDINGS AND ALSO DURING THE REASSESSMENT PROCEEDINGS. THE LD. CIT(A) THUS OBSERVED THAT THE SUBMISSION OF BANK STATEMENTS WHERE THE GIFTS WERE REFLECTED AND OTHER EVIDENCES SUBMITTED BY THE ASSESSEE WERE SUFFICIENT AND REASONABLE EVIDENCES TO PROVE THE RE CEIPT OF GIFTS BY MR. AAMIR GAZDAR FROM HIS BROTHER MR. ABDUL H. GAZDAR WHICH WAS FURTHER ADVANCED BY SAID MR. AAMIR GAZDAR TO THE ASSESSEE COMPANY. SO FAR THE TREASURY DETAILS RELATING TO THE SOURCE OF MONEY OF CREDITOR OF CREDITOR I.E. MR. ABDUL H. GAZD AR WAS CONCERNED, IT WAS OBSERVED THAT THE SAID MR. ABDUL H. GAZDAR WAS AN OLD MAN AND THE OTHER INFORMATION SOUGHT WAS NOT AVAILABLE AT THE POINT OF TIME WITH THE ASSESSEE. THE AO WAS SEEKING EVIDENCES FROM THE ASSESSEE COMPANY WHICH WERE VERY OLD AND PE RTAINING TO A PERSON UPON WHOM THE ASSESSEE COMPANY HAD NO CONTROL. THE ASSESSEE COMPANY COULD NOT HAVE BEEN COMPELLED TO ADDUCE EVIDENCE WHICH WAS BEYOND THE CONTROL OF THE ASSESSEE COMPANY. THE NECESSARY DETAILS AND CONFIRMATIONS FROM THE PERSON NAMELY MR. ABDUL H. GAZDAR , WHO ADVANCED LOANS TO THE ASSESSEE COMPANY , WERE DULY PRODUCED AND BROUGHT ON RECORD AND THE SOURCE OF MONEY OF SAID CREDITOR MR. AAMIR GAZDAR WAS DULY PROVED ON THE FILE. THE LD. CIT(A) THUS OBSERVED THAT THE ASSESSEE HAD SUCCESSFUL LY EXPLAINED THE NAME, COMPLETE ADDRESSES, IDENTITY, PAN ITA NO. 3009/M/2012 M/S. HARMONY MEDIA P. LTD. 4 DETAILS, CREDIT WORTHINESS AND GENUINENESS OF TRANSACTIONS BETWEEN THE ASSESSEE COMPANY AND ITS IMMEDIATE CREDITOR MR. AAMIR GAZDAR. THE SAID CREDITOR MR. AAMIR GAZDAR HAD FURTHER EXPLAINED THE SOUR CE OF MONEY BY WAY OF LOANS, GIFTS RECEIVED FROM VARIOUS PERSONS WHOSE PAN, INCOME DETAILS HAD BEEN FURNISHED. HE FURTHER OBSERVED THAT THE ASSESSEE COMPANY COULD NOT BE FORCED TO ADDUCE MORE EVIDENCE WHICH WAS BEYOND THE CONTROL OF THE ASSESSEE COMPANY. HE THEREFORE DELETED THE ADDITIONS SO MADE BY THE AO. 4. WE HAVE HEARD THE LD. REPRESENTATIVES OF BOTH THE PARTIES AND HAVE ALSO GONE THROUGH THE RECORDS. THE LD. CIT(A) AS OBSERV ED ABOVE, VIDE HIS DETAIL E D ORDER, HAS HELD THAT THE ASSESSEE COMPANY HAS NOT ONLY PROVED THE GENUINENESS OF THE TRANSACTION BUT ALSO THE CREDIT WORTHINESS AND SOURCE OF MONEY OF ITS CREDITOR MR. AAMIR GAZDAR AND ALSO FURTHER CONFIRMATIONS AS OF LOAN AS WELL AS GENUINENESS OF TRANSACTION OF THE S OURC E OF CREDITOR OF CREDITOR NA MELY MR. ABDUL H. GAZDAR. WE DO NOT FIND ANY INFIRMITY IN THE WELL REASONED ORDER OF THE LD. CIT(A). 5. ACCORDINGLY, THERE IS NO MERIT IN THE APPEAL OF THE REVENUE AND THE SAME IS HEREBY DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 31.01. 201 4 . SD/ - SD/ - ( D. KARUNAKARA RAO ) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 31.01. 201 4 . * KISHORE ITA NO. 3009/M/2012 M/S. HARMONY MEDIA P. LTD. 5 COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT ( A) CONCERNED, MUMBAI THE DR C BENCH //TRUE COPY// [ BY ORDER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.