Smt. Shital R. Shah, Ahmedabad V. The Income Tax Officer, Ward-7(2)(5), Ahmedabad

ITA 3136/AHD/2016

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 7643 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 4 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-04-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2010-2011
• Appeal Filed On: 29-11-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Set aside
• Section: 143(3); 68

Judgement Text

, B , IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH B BENCH, AHMEDABAD BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER ./ I.T.A. NO.3136/AHD/2016 ( / ASSESSMENT YEAR : 2010-11) SMT. SHITAL R SHAH B/508, KRISHNA TOWER, OPP. PRIYA CINEMA, SAIJPUR BOGHA, KRISHNANGAR, AHMEDABAD- 382345 / VS. ITO WARD- 7(2)(5), NATURE VIEW BUILDING, AHMEDABAD ./ ./ PAN/GIR NO. : BEK PS2 377 R ( / APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : SHRI TUSHAR HEMANI, A.R. / RESPONDENT BY : SHRI MUDIT NAGPAL, SR. DR / DATE OF HEARING :24/04/2019 !'# / DATE OF PRONOUNCEMENT :25/04/2019 $% / O R D E R PER SHRI KUL BHARAT, JUDICIAL MEMBER : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST T HE ORDER OF THE LD. COMMISSIONER OF INCOME TAX(APPEALS)-7, AHMEDABAD (CIT(A) FOR SHORT) DATED 29.09.2016 PERTAINING TO THE ASSESSME NT YEAR (AY) 2010- 11. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL:- 1. LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN NOT PROPERLY APPRECIATING AND CONSIDERING VARIOUS SUBMISSIONS, E VIDENCES AND SUPPORTING PLACED ON RECORD DURING THE COURSE OF TH E ASSESSMENT PROCEEDINGS, AND NOT PROPERLY APPRECIATING VARIOUS FACTS AND LAW IN THEIR PROPER PERSPECTIVE. ITA NO.3136/AHD/2016 SMT. SHITAL R SHAH VS. ITO ASST.YEAR 2010-11 - 2 - 2. LD. CIT(A) HAS ERRED IN LAW AND ON FACT IN UPHOL DING THE AUDITION TO THE INCOME OF RS. 5,81,000/- AND REJECT ION OF BOOKS OF ACCOUNTS FOR THE CASH RECEIVED AS UNSECURED LOAN FR OM VARIOUS FAMILY MEMBERS. 3. LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN NOT DIRECTING THE LD. AO NOT TO CHARGING INTEREST UNDER SECTION 234C AND 234D OF THE ACT. 2. THE ONLY EFFECTIVE GROUND OF THIS APPEAL IS AGA INST CONFIRMING THE ADDITION OF RS. 5,81,000/- IN RESPECT OF UNSECURED LOANS. THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS AS MADE IN THE CHART SUBMITTED DURING THE COURSE OF HEARING. AO MADE ADDITION OF RS.5,81,000/- U/S 68 OF THE ACT IN RESPECT OF UNSECURED LOANS RECEIVED FROM VARIOUS FRIENDS AND FAMILY MEMBERS. THE SAID ADDITION CAME TO BE CONFIRMED BY CIT(A) AS WELL. BOTH THE LOWER AUTHORITIES FAILED TO APPRECIATE FACTS IN ITS ENTIRETY. AT THE OUTSET, ASSESSEE HAS FURNISHED LIST OF PERSONS FROM WHOM THE CONCERNED UNSECURED LOANS HAVE BEEN OBTAINED AND THE SAID LIST CONTAINS NAME, ADDRESS AND PAN OF ALL THOSE 30 PERSONS (PGS.31-33 OF P/B). FURTHER, ASSESSEE HAS FURNISHED CONFIRMATIONS OF ALL THE PERSONS AS WELL AS ACKNOWLEDGMENT OF ITR AND STI OF MANY PERSONS SO AS TO DISCHARGE THE INITIAL ONUS CAST ON THE ASSESSEE UNDER THE SCHEME OF T HE ACT. PLEASE REFER ANNEXURE 'A'. AO HAD ISSUED SUMMONS TO TWO PARTIES NAMELY SHRI DASAK K. SHAH AND SMT. BHARTI U. SHAH U/S 131. THOUGH THOSE PERSONS COULD NOT APPEAR BEFORE AO, THEY HAD FILED LETTERS TO AO CONFIRMING THE LACTUM OF HAVING ADVANCED UNSECURED LOANS TO THE ASSESSEE (PGS.85-86 OF P/B). PERUSAL OF ABOVE REFERRED EVIDENCES WOULD REVEAL THAT THE CONCERNED PERSONS HAVE CONFIRMED THE FACTUM OF HAVING ADVANCED SUCH SUM TO THE ASSESSEE. IT IS FURTHER REVEALED THAT SUCH SUM HAS ALSO BEEN REPAID BY THE ASSESSEE. ITA NO.3136/AHD/2016 SMT. SHITAL R SHAH VS. ITO ASST.YEAR 2010-11 - 3 - THUS, AIL THREE INGREDIENTS AS PRESCRIBED U/S 68 ARC PROVED BY THE ASSESSEE. AO WAS PROVIDED WITH THE CONFIRMATIONS ALONG WITH PAN AND ADDRESS OF THE CONCERNED PERSONS FROM WHOM ASSESSEE HAD RECEIVED MONEY. IN CASE AO WANTED TO VERIFY SUCH TRANSACTIONS FROM THE DEPOSITORS, AO COULD HAVE CALLED FOR INFORMATION FROM SUCH PERSONS BY ISSUING NOTICES U/S 133(6). NOTHING PREVENTED AO TO CARRY OUT FURTHER INQUIRY ON THE BASIS OF INFORMATION FURNISHED BY THE ASSESSEE. HOWEVER, AO CHOSE NOT TO DO ANYTHING OF SUCH SORT. RATHER, AO SIMPLY STATED THAT ASSESSEE DID NOT FURNISH REQUISITE DETAILS AND HENCE, HE MADE THE IMPUGNED ADDITION. IN FACT, AO MERELY SAT TIGHT OVER SUCH INFORMATION AND DID NOT PUT IN ANY EFFORTS TO VERIFY THE CONTENTS OF THE INFORMATION AND DOCUMENTARY EVIDENCES FURNISHED BY THE ASSESSEE. S. 68 CAST AN INITIAL BURDEN ON ASSESSEE TO PROVE IDENTITY, GENUINENESS AND CREDITWORTHINESS OF LENDERS WHICH HAS BEEN DISCHARGED BY PLACING ON RECORD DOCUMENTARY EVIDENCES AS SPECIFIED IN ANNEXURE A. HAVING DISCHARGED THE INITIAL ONUS WITH SATISFACTORY EXPLANATION, ONUS SHIFTS ON THE REVENUE. IT TRANSPIRES THAT THE OBJECTION OF AO AND CIT(A) IS THAT ASSESSEE HAS NOT PROVED SOURCE OF SUCH PERSONS TO PROVIDE LOANS TO THE ASSESSEE. S. 68 DOES NOT REQUIRE AN ASSESSEE TO PROVE SOURCE OF THE SOURCE OF DEPOSITS. HENCE, NO ADDITION IS CALLED FOR U/S. 68. RELIANCE IS PLACED ON: DCIT VS. ROHINI BUILDERS 256 ITR 360 (GUJ.) MURLIDHAR LAHORIMAL VS. CIT 280 ITR 512 (GUJ.) CIT VS. PRAGATI CO. OP. BANK LTD. 278 ITR 170 (GUJ.) CIT VS. ORISSA CORPORATION PVT. LTD. 159 ITR 78 (SC) HAVING FURNISHED THE AFORESAID DETAILS, THE CONCERNED CREDITS, BY NO STRETCH OF IMAGINATION, REMAIN UNEXPLAINED ANY FURTHER IN THE ASSESSEES HANDS. AO AND CIT(A) HAVE, RATHER THAN COMMENTING ON THE DOCUMENTARY EVIDENCES FURNISHED BY THE ASSESSEE, COMMENTED ON PERIPHERAL ISSUES SUCH AS SUCH PERSON WERE NOT PRODUCED BEFORE AO, ASSESSEE COULD NOT HAVE GENERATED CASH IN HIS LINE OF BUSINESS, THERE WAS NO NEED TO ACCEPT SUCH UNSECURED LOANS THERE WAS DIFFERENCE IN ENTRIES IN BOOKS, ITA NO.3136/AHD/2016 SMT. SHITAL R SHAH VS. ITO ASST.YEAR 2010-11 - 4 - ETC. AO AND CIT(A) FAILED TO APPRECIATE THAT WHILE DEALING WITH A CASE OF ADDITION U/S. 68, IT NEEDS TO BE CHECKED WHETHER THE RELEVANT THREE CRITERIA HAVE BEEN FULFILLED OR NOT. NEITHER AO NOR CIT(A) HAS ACTED IN THAT DIRECTION. RATHER, THEY PERUSED THE CASE FROM AN ALTOGETHER DIFFERENT AND IRRELEVANT ANGLE. SUCH AN APPROACH IS NOT TENABLE IN THE EYE OF LAW AT ALL. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LIGHT OF EVIDENCES PLACED ON RECORD, CIT(A) OUGHT TO HAVE DELETED THE IMPUGNED ADDITION. 3. LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE AUTHORITIES BELOW HAVE ERRED BY NOT PROVIDING SUFFICIENT OPPORTUNITY TO THE ASSESSEE. THE AO FAILED TO SUMMON THE PERSONS WHO HAD GIVEN UNSEC URED LOANS. HE SUBMITTED THAT ALL CONFIRMATION, INCOME TAX RETURN ETC. WAS FILED BEFORE THE AO, MERELY THAT AMOUNT IS LESS THAN 20,000/- SH OULD NOT BE THE BASIS FOR SUSPICION. HE SUBMITTED THAT THE AMOUNT WAS RE TURNED TO THE CREDITORS. THUS, THE ADDITION SO MADE SHOULD NOT H AVE BEEN SUSTAINED. 4. PER CONTRA THE LD. DR OPPOSE THE SUBMISSION AND ORDER OF THE AUTHORITIES BELOW. LD. DR SUBMITTED THAT IT WAS IN CUMBENT UPON THE ASSESSEE TO PROVE THE SOURCE OF CREDIT. HE SUBMITT ED THAT THE ASSESSEE IN ORDER TO AVOID SCRUTINY KEPT THE LOAN AMOUNT LESS O R THAN RS. 20,000/-. THUS, THE AUTHORITIES BELOW ARE JUSTIFIED FOR MAKIN G ADDITION. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. THE LD. CIT(A) SUSTAINED THE ADDITION BY OBSERVING AS UNDER:- 5.2 I HAVE CONSIDERED THE ASSESSMENT ORDER AND THE SUBMISSIONS MADE BY THE APPELLANT. THE AO MADE THE IMPUGNED ADDITION HOLDING THAT THE EXPLANATIONS AND CASH BOOK MAINTAINED BY THE APPELLANT WERE FULL OF DISCREPANCIES AND IT WAS CLEAR ITA NO.3136/AHD/2016 SMT. SHITAL R SHAH VS. ITO ASST.YEAR 2010-11 - 5 - THAT THE CASH BOOK WAS BOGUS AND COOKED UP TO PUT A VEIL ON THE UNACCOUNTED CASH DEPOSITS IN HER BANK ACCOUNT. THE APPELLANT, ON THE OTHER HAND, HAS CONTENDED THAT SHE HAD RECEIVED UNSECURED LOANS IN CASH FROM VARIOUS PERSONS WHO WE RE HER FRIENDS AND RELATIVES AND HAS SUBMITTED THEIR CONFIRMATIONS. THE SUBMISSIONS OF THE APPELLANT HAVE BEEN CONSIDERED AND IT IS SEEN THAT THE DURING THE ASSESSMENT P ROCEEDINGS U/S. 143(3) OF THE ACT, JUSTIFICATION GIVEN FOR THE CASH DEPOSITS WAS COMPLE TELY DIFFERENT THAN THAT WHICH WAS GIVEN DURING THE PROCEEDINGS U/S. 263, INITIALLY, IT BAD BEEN CLAIMED THAT THE CASH DEPOSITS HAD BEEN MADE FROM CASH AVAILABLE ON HAND WILL THE APPELLANT OR BY ROTATION OF MONEY WITHDRAWN FROM HER BANK ACCOUNT, AND THEN R E- DEPOSITED. SUBSEQUENTLY, HOWEVER, SHE CHANGED HER STAND AND CLAIMED THAT THE CASH DEPOSITS WERE ON ACCOUNT OF LOANS TAKEN FROM 30 PERSONS WHO WERE CLOSE FRIENDS AND RELATIVES. MOREOVER, THE ONLY DOCUMENTS THAT HAVE BEEN SUBMITTED T O PROVE THE IDENTITY AND CREDITWORTHINESS OF THESE DEPOSITS AND GENUINENESS OF THE TRANSACT ION ARE COPIES OF SOME ITRS AND PAN CARDS. SOME CONFIRMATIONS HAVE ALSO BEEN FILE D WHICH ARE SELF-CREATED AND DO NOT HAVE ANY EVIDENTIARY VALUE. MOREOVER, IT IS ALSO SEEN THAT THE CASH BOOK PRODUCED BY THE APPELLANT HAS SEVERAL DISCREPANCIES AND AS IS SEEN FROM THE SUBMISSION MADE, THE APPE LLANT STATES THAT SHE HAD LOST ALL THE DATA FOR THE YEAR UNDER CONSIDERATION AND HAS RE -WRITTEN ALL THE ACCOUNTS ON THE BASIS OF VOUCHERS, ETC. AVAILABLE. THUS, I AM IN AGREE MENT WITH THE AO THAT THESE ACCOUNTS PRODUCED BY THE APPELLANT NOW CANNOT BE R ELIED UP AND HAVE BEEN PREPARED SUBSEQUENTLY TO TRY TO CAMOUFLAGE THE NATURE OF T HE DEPOSITS IN THE BANK ACCOUNT. IN VIEW OF THE ABOVE DISCUSSION, THE ADDITION OF RS. 5,81,000/- IS CONFIRMED. GROUND OF APPEAL NO. 2 IS DISMISSED. 6. WE FIND MERIT IN CONTENTION OF THE ASSESSEE THAT MERELY SUSPICION SHOULD NOT BE THE BASIS OF ADDITION. THERE SHOULD BE SOME MATERIAL WHEN THE ASSESSEE HAS PROVED CREDIT BY FURNISHING MATERI AL IN THE FORM OF CONFIRMATION ETC. TO DISCARD SUCH EVIDENCE. AFTER CONSIDERING THE TOTALITY OF THE FACTS AND THE MATERIAL PLACED BEFORE US WE A RE OF THE VIEW THAT THE AO SHOULD ASCERTAIN THE VERACITY OF CLAIM OF THE AS SESSEE BY SUMMONING THE PERSONS WHO HAVE ADVANCED UNSECURED LOANS TO TH E ASSESSEE. WE THEREFORE SET ASIDE THE ORDERS OF THE AUTHORITIES B ELOW AND RESTORE THIS ISSUE TO THE FILE OF THE AO FOR DECISION AFRESH. T HE AO IS HEREBY DIRECTED TO VERIFY THE CLAIM OF THE ASSESSEE BY MAKING NECES SARY ENQUIRIES AND BY GIVING REASONABLE OPPORTUNITY TO THE ASSESSEE. THI S GROUND OF THE ASSESSEES APPEAL IS ALLOWED FOR STATISTICAL PURPOS ES. ITA NO.3136/AHD/2016 SMT. SHITAL R SHAH VS. ITO ASST.YEAR 2010-11 - 6 - 7. GROUND NO.3 IS IN RESPECT OF CHARGING OF INTERES T U/S. 234C AND 234D OF THE ACT BEING CONSEQUENTIAL NATURE ALSO RES TORE TO THE FILE OF THE AO. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN COURT ON THE DATE MENTIONED HEREINABOVE AT CAPTION PAGE SD/- SD/- (AMARJIT SINGH) (KUL BHARAT) ACCOUNTANT MEMBER JUDICIAL MEMBER TRUE COPY AHMEDABAD; DATED 25/ 04 /2019 TANMAY !'#$ %$' / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. & '( ) / CONCERNED CIT 4. ) ( ) / THE CIT(A)-III, BARODA 5. ,-. //'( , '(# , 12$&$ / DR, ITAT, AHMEDABAD 6. .34 5 / GUARD FILE. & ' / BY ORDER, (/' )* ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD 1. DATE OF DICTATION . 24.04.2019 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 24.04.2019 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S 25.04.2019 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 25.04.2019 5. DATE ON WHICH FAIR ORDER PLACED BEFORE OTHER MEMBER 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S.25.04.2019 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 25.04.2019 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK.. . 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER