Shri Ajay Balvantrai Desai, Surat V. The Income tax Officer,Ward-5(1), Surat

ITA 3016/AHD/2011

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 89223 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 4 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-04-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 10-04-2015
• Assessment Year: 2005-2006
• Appeal Filed On: 02-12-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ROOP CHAND
• Assessee Lawyers: MEHUL R SHAH
• Keywords: Unexplained cash credit; Opportunity of being heard
• Section: 147; 68; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD B BENCH AHMEDABAD , BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER, AND SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER. ITA. NOS. 3014 TO 3018/AHD/2011 (ASSESSMENT YEARS:2003-04 TO 2007-08) SHRI AJAY BALVANTRAI DESAI, 606, WHITE HOUSE, NEAR KAILASHNAGAR, NANPURA, SURAT APPELLANT VS. INCOME TAX OFFICER, WARD 5(1), SURAT RESPONDENT PAN: AMYPD7448K / BY ASSESSEE : SHRI MEHUL R. SHAH, A.R. / BY REVENUE : SHRI ROOPCHAND, SR. D.R. /DATE OF HEARING :10.04.2015 !' /DATE OF PRONOUNCEMENT : 22.04.2015 ORDER PER SHAILENDRA KUMAR YADAV, J.M: THESE APPEALS OF ASSESSEE ARE ARISING OUT FORM THE ORDERS OF CIT(A)-I, SURAT, DATED 18.10.2011 FOR THE ALL FI VE ASSESSMENT I.T.A. NOS. 3014 TO 3018/AHD/2011 FOR A.Y. 03-04 TO 07-08 (SHRI AJAY BALVANTRAI DESAI VS. ITO) PAGE 2 YEARS. SO, THEY ARE BEING DISPOSED OF BY WAY OF TH IS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 2. IN ITA NO. 3014/AHD/2011 FOR A.Y. 2003-04, ASSES SEE HAS FILED THE APPEAL ON THE FOLLOWING GROUNDS: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AS WELL AS LAW ON THE SUBJECT, THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) HAS ERRED IN NOT DECIDING THE ISSUE RELATING TO VALIDITY OF REOPENING OF ASSESSME NT U/S 147 OF THE IT. ACT, 1961. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AS WELL AS LAW ON THE SUBJECT, THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) HAS ERRED IN CONFIRMING THE ACTION OF ASSESSING OFFICER IN MAKING ADDITION OF RS.6,05,000/- AS UNEXPLAINED CASH CREDIT U/S 68 OF THE IT. ACT, 1961. 2.1 IN ITA NO. 3015/AHD/2011 FOR A.Y. 2004-05, ASSE SSEE HAS FILED THE APPEAL ON THE FOLLOWING GROUNDS: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AS WELL AS LAW ON THE SUBJECT, THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) HAS ERRED IN NOT DECIDING THE ISSUE RELATING TO VALIDITY OF REOPENING OF ASSESSME NT U/S 147 OF THE IT. ACT, 1961. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AS WELL AS LAW ON THE SUBJECT, THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) HAS ERRED IN CONFIRMING THE ACTION OF ASSESSING OFFICER IN MAKING ADDITION OF RS.1,75,000/- AS UNEXPLAINED CASH CREDIT U/S 68 OF THE IT. ACT, 1961. 2.2 IN ITA NO. 3016/AHD/2011 FOR A.Y. 2005-06, ASSE SSEE HAS FILED THE APPEAL ON THE FOLLOWING GROUNDS: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AS WELL AS LAW ON THE SUBJECT, THE LEARNED COMMISSIONER OF I.T.A. NOS. 3014 TO 3018/AHD/2011 FOR A.Y. 03-04 TO 07-08 (SHRI AJAY BALVANTRAI DESAI VS. ITO) PAGE 3 INCOME-TAX (APPEALS) HAS ERRED IN NOT DECIDING THE ISSUE RELATING TO VALIDITY OF REOPENING OF ASSESSME NT U/S 147 OF THE IT. ACT, 1961. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AS WELL AS LAW ON THE SUBJECT, THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) HAS ERRED IN CONFIRMING THE ACTION OF ASSESSING OFFICER IN MAKING ADDITION OF RS.5,50,000/- AS UNEXPLAINED CASH CREDIT U/S 68 OF THE IT. ACT, 1961. 2.3 IN ITA NO. 3017/AHD/2011 FOR A.Y. 2006-07, ASSE SSEE HAS FILED THE APPEAL ON THE FOLLOWING GROUNDS: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AS WELL AS LAW ON THE SUBJECT, THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) HAS ERRED IN NOT DECIDING THE ISSUE RELATING TO VALIDITY OF REOPENING OF ASSESSME NT U/S 147 OF THE IT. ACT, 1961. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AS WELL AS LAW ON THE SUBJECT, THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) HAS ERRED IN CONFIRMING THE ACTION OF ASSESSING OFFICER IN MAKING ADDITION OF RS.9,00,000/- AS UNEXPLAINED CASH CREDIT U/S 68 OF THE IT. ACT, 1961. 2.4 IN ITA NO. 3018/AHD/2011 FOR A.Y. 2007-08, ASSE SSEE HAS FILED THE APPEAL ON THE FOLLOWING GROUNDS: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AS WELL AS LAW ON THE SUBJECT, THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) HAS ERRED IN NOT DECIDING THE ISSUE RELATING TO VALIDITY OF REOPENING OF ASSESSME NT U/S 147 OF THE IT. ACT, 1961. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AS WELL AS LAW ON THE SUBJECT, THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) HAS ERRED IN CONFIRMING THE ACTION OF ASSESSING OFFICER IN MAKING ADDITION OF I.T.A. NOS. 3014 TO 3018/AHD/2011 FOR A.Y. 03-04 TO 07-08 (SHRI AJAY BALVANTRAI DESAI VS. ITO) PAGE 4 RS.4,50,000/- AS UNEXPLAINED CASH CREDIT U/S 68 OF THE IT. ACT, 1961. 3. IN THIS CASE, AN INFORMATION HAS BEEN RECEIVED F ROM THE ITO(INV.), SURAT VIDE LETTER NO. SRT / INV / SRT / ENQ / SMIMER / 2 /2009-10 DATED 28.10.2009, WHEREIN IT HA S BEEN REPORTED THAT ASSESSEE HAS MADE PAYMENT OF FEES TOW ARDS FEES FOR ADMISSION OF HIS DAUGHTER POOJA AJAY DESAI AND UNDER NRI QUOTA IN SMIMER. FURTHER ON INQUIRY, IT WAS FOUND THAT ASSESSEE AJAY BALVANTRAI DESAI HAD PAID FEES OF RS. 6,01,300/- OUT OF WHICH RS.3 LACS HAS BEEN CLAIMED AS LOAN FRO M MR. S. L. NAIK AND RS.2,00,000/- LOAN FROM KIKIBEN DESAI AND RS.1,05,000/- FROM HIS WIFE. ACCORDING TO ASSESSIN G OFFICER, ON THE POINT OF IDENTITY, CREDITWORTHINESS AND GENUINE NESS OF TRANSACTION OF LOAN FROM S.L. NAIK, KIKIBEN DESAI A ND HIS WIFE, ASSESSEE FAILED TO ESTABLISH THE INGREDIENTS LAID D OWN UNDER THE PROVISIONS OF SECTION 68 OF THE ACT. ACCORDINGLY, HE HELD THAT RS.6,01,000/- IS REQUIRED TO BE TREATED AS UNEXPLAI NED CREDIT IN THE HANDS OF ASSESSEE. IN VIEW OF ABOVE INFORMATIO N AND GOING THROUGH THE DETAILS OF PAYMENTS OF FEES, THE CASE W AS REOPENED U/S. 147 OF THE ACT AFTER RECORDING THE REASONS FOR REOPENED THE CASE AND NOTICE U/S. 148 DATED 22.03.2010 HAS BEEN ISSUED. AFTER TAKING INTO CONSIDERATION THE SUBMISSIONS ON BEHALF OF ASSESSEE, ADDITION WAS MADE, WHICH WAS CONFIRMED BY CIT(A). 3.1 BEFORE US, LEARNED AUTHORIZED REPRESENTATIVE RE ITERATED THE SUBMISSION MADE BEFORE AUTHORITIES BELOW AND RE QUESTED TO SET ASIDE THE ORDER OF AUTHORITIES BELOW. ON OTHER HAND, I.T.A. NOS. 3014 TO 3018/AHD/2011 FOR A.Y. 03-04 TO 07-08 (SHRI AJAY BALVANTRAI DESAI VS. ITO) PAGE 5 LEARNED DEPARTMENTAL REPRESENTATIVE SUPPORTED THE O RDER OF CIT(A). 3.2 AFTER GOING THROUGH RIVAL SUBMISSIONS AND MATER IAL ON RECORD, WE FIND THAT ASSESSING OFFICER MADE ADDITIO N OF RS.6,05,000/- ON ACCOUNT OF UNEXPLAINED CASH CREDIT U/S. 68 OF THE INCOME TAX ACT, 1961 IN A.Y. 2003-04. DURING Y EAR UNDER CONSIDERATION, PAYMENT OF RS.6,01,300/- HAS BEEN MA DE ON ACCOUNT OF FEES OF ASSESSEES DAUGHTER UNDER NRI QU OTA IN SMIMER AND SAID AMOUNT HAS BEEN PAID OUT OF CONTRIB UTION RECEIVED FROM THREE PARTIES; ONE MR. S. L. NAIK RS. 3 LACS, KIKIBEN DESAI RS.2,00,000/- LOAN AND FROM WIFE RS.1,05,000/-. ABOVE PARTIES HAVE CLAIMED TO GIVEN THE AMOUNT IN QUESTION ONLY FOR EDUCATION PURPOSE OF AS SESSEES DAUGHTER. AS REGARDS AMOUNT OF RS.3 LACS FROM SHRI S. L. NAIK, STAND OF ASSESSEE HAS BEEN THAT CONFIRMATION OF PAR TY, AFFIDAVIT FROM 7/12, PROOF OF SALE OF SUGARCANE ETC. WERE SUB MITTED. SIMILARLY AS REGARDS AMOUNT OF RS.2 LACS FROM KIKIB EN DESAI, ASSESSEE FILED HER CONFIRMATION, AFFIDAVIT FROM 7/1 2, PROOF RELATING TO SALE OF AGRICULTURE PRODUCE ETC.. AS R EGARDS AMOUNT OF RS.1,05,000/- FROM ASSESSEES WIFE ASSESSEE FILE D HER CONFIRMATION OF ACCOUNT, AFFIDAVIT AND OTHER EVIDEN CES. FURTHER, ASSESSEES WIFE IS DOCTOR BY PROFESSION AN D IS REGULARLY FILING HER RETURN OF INCOME. IT IS NOT IN DISPUTE THAT ALL EVIDENCES IN SUPPORT OF GENUINENESS OF TRANSACTION HAVE NOT BEEN FILED BEFORE AUTHORITIES BELOW. ASSESSING OFF ICER HAS MADE ADDITION MERELY BY DOUBTING THE CREDITWORTHINESS OF PERSONS I.T.A. NOS. 3014 TO 3018/AHD/2011 FOR A.Y. 03-04 TO 07-08 (SHRI AJAY BALVANTRAI DESAI VS. ITO) PAGE 6 WHO GAVE LOANS TO ASSESSEE. AS STATED ABOVE, CREDIT ORS HAVE GIVEN CONFIRMATION, AFFIDAVIT FROM 7/12, PROOF OF S ALE OF AGRICULTURE PRODUCE IN CASE OF SHRI S. L. NAIK AND KIKIBEN DESAI. ASSESSING OFFICER HAS NOT DISPUTED THE LAND HOLDING ON ABOVE SAID CREDITORS. MOREOVER, THESE CREDITORS AR E RELATIVES OF ASSESSEE AND SUCH LOAN FOR STUDY OF RELATIVES CHIL DREN IS NOT UNUSUAL THINGS. MOREOVER, CONTENT OF AFFIDAVIT HAS TO BE REJECTED BY CONFRONTING THE CONTENTS OF SAME TO DEP ONENT WHICH HAS NOT BEEN DONE IN THIS CASE. THIS APPROACH OF A SSESSING OFFICER IS NOT JUSTIFIED. REGARDING LOAN FROM ASSE SSEES WIFE, IT IS NOT IN DISPUTE THAT SHE IS DOCTOR BY PROFESSION AND SHE IS REGULARLY FILING RETURN OF INCOME. MOREOVER, CONFI RMATION HAS BEEN FILED COMPILED ALONG WITH AFFIDAVIT. SAME SHO ULD NOT HAVE BEEN REJECTED WITHOUT CONFRONTING THE CONTENT OF TH E SAME TO THE DEPONENT. SO, IN THE INTEREST OF JUSTICE, WE S ET ASIDE THE ORDER OF CIT(A) AND RESTORE THE MATTER TO ASSESSING OFFICER WITH DIRECTION TO DECIDE THE SAME AS PER FACT AND LAW AN D AFTER PROVIDING DUE OPPORTUNITY OF BEING HEARD TO ASSESSE E. SINCE, WE ARE RESTORING THE MATTER TO ASSESSING OFFICER AS INDICATED ABOVE, WE ARE REFRAINING OURSELVES TO COMMENT ON TH E MERIT OF ISSUE AT HAND. AS A RESULT, ASSESSEES APPEAL FOR A.Y. 2003-04 IS ALLOWED FOR STATISTICAL PURPOSE. 4. SIMILAR ISSUE AROSE IN OTHER THREE YEARS. FACTS BEING SIMILAR, SO FOLLOWING THE SAME REASONING, ORDER OF CIT(A) BE SET ASIDE AND MATTER IS RESTORED TO ASSESSING OFFICER W ITH SIMILAR DIRECTIONS AS IN A.Y. 2003-04. I.T.A. NOS. 3014 TO 3018/AHD/2011 FOR A.Y. 03-04 TO 07-08 (SHRI AJAY BALVANTRAI DESAI VS. ITO) PAGE 7 5. AS A RESULT, APPEALS FILED BY ASSESSEE FOR ALL Y EARS I.E. A.Y. 2003-04 TO 2007-08 ARE ALLOWED FOR STATISTICAL PURP OSE. PRONOUNCED IN THE OPEN COURT ON THIS THE 22 ND DAY OF APRIL, 2015. SD/- SD/- (ANIL CHATURVEDI) (SHAILENDRA KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD: DATED 22/04/2015 TRUE COPY S.K.SINHA # # # # %& %& %& %& '&' '&' '&' '&' / COPY OF ORDER FORWARDED TO:- 1. / REVENUE 2. / ASSESSEE 3. ,, - / CONCERNED CIT 4. -- / CIT (A) 5. &12 %, , / DR, ITAT, AHMEDABAD 6. 256 78 / GUARD FILE. BY ORDER / # , 9/ , , ;