Mrs. Nirmalaben C. Soni, Surat V. The ACIT, Circle-6, Surat

ITA 3173/AHD/2014

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 1865 (ITAT-SURAT)
• Duration Of Justice: 4 year(s) 1 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-01-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2010-2011
• Appeal Filed On: 02-12-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANUPAMA SINGLA
• Assessee Lawyers: BIPIN JATIWALA
• Keywords: Unexplained cash credit
• Section: 68; 142(1); 133A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SURAT BENCH, SURAT BEFORE SHRI AMARJIT SINGH, ACCOUNTANT MEMBER & MS. MADHUMITA ROY, JUDICIAL MEMBER ITA NO.3173/AHD/2014 (ASSESSMENT YEAR : 2010-11) MRS. NIRMALABEN C. SONI, PROP. OF MAHALAXMI JEWELLERS, B/14- 2, SADHNA TOWER, SARDAR BAUG, STATION ROAD, BARDOLI, SURAT-394 601. VS. THE ASSTT. COMMISSIONER OF INCOME TAX, CIRCLE 6, SURAT 395 001. [PAN NO. AKVPS 5220 M] ( APPELLANT ) .. ( RESPONDENT ) APPELLANT BY : SHRI BIPIN JATIWALA, A.R. RESPONDENT BY : MS. ANUPAMA SINGLA, SR. D.R. DATE OF HEARING 22/11/2018 DATE OF PRONOUNCEMENT 31/01/2019 O R D E R PER MS. MADHUMITA ROY - JM: THE INSTANT APPEAL FILED BY THE ASSESSEE IS AGAINST THE ORDER DATED 14.10.2014 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS)- I, SURAT ARISING OUT OF THE ASSESSMENT ORDER DATED 22.03.2013 FOR THE ASSESSMEN T YEAR 2010-11 PASSED BY THE ACIT-6, SURAT UNDER SECTION (U/S) 143 OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED AS TO THE ACT) WITH THE FOLLOWING GROUNDS: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AS WELL AS LAW ON THE SUBJECT, THE LD CIT(A) HAS ERRED IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER IN MAKING ADDITION OF RS.4,29,000/- ON ACCO UNT OF ALLEGED UNEXPLAINED CASH CREDIT U/S 68 OF THE I.T. ACT, 196 1 ON UNSECURED LOANS. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A S WELL AS LAW ON THE SUBJECT, THE LD CIT(A) HAS ERRED IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER IN MAKING ADDITION OF RS.10,383/- ON ACCOUN T OF ALLEGED INTEREST EXPENSE ON DISALLOWED UNSECURED LOAN. - 2 - ITA NO.3173/A/14 MRS. NIRMALABEN C. SONI VS. ACIT ASST.YEAR 2010-11 3. IT IS THEREFORE PRAYED THAT THE ABOVE ADDITION MAY PLEASE BE DELETED AS LEARNED MEMBERS OF THE TRIBUNAL MAY DEEM IT PROPER. 4. APPELLANT CRAVES LEAVE TO ADD, ALTER OR DELETE ANY GROUND(S) EITHER BEFORE OR IN THE COURSE OF THE HEARING OF THE APPEAL. 2. THE ASSESSEE, FILED HER RETURN OF INCOME FOR A.Y . 2010-11 SHOWING TOTAL INCOME OF RS. 77,77,266/- THROUGH ELECTRONIC MEDIA ON 31.03.2 011. UPON SCRUTINY A NOTICE U/S 143(2) OF THE ACT DATED 13.09.2011 WAS ISSUED FOLLO WED BY A FURTHER NOTICE U/S 142(1) OF THE ACT DATED 30.04.2012 AND A NOTICE U/S 142(1) AL ONG WITH A DETAILED QUESTIONNAIRE DATED 10.10.2012 WAS ISSUED AND SERVED UPON THE ASS ESSEE. IN RESPONSE TO THE ABOVE NOTICES, DETAILS AND OTHER DOCUMENTS WERE DULY FURN ISHED BY THE ASSESSEE. IT APPEARS FROM THE RECORD THAT THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION WAS ENGAGED IN THE BUSINESS OF RESALE AND JOB WORK OF GOLD AND SILVER JEWELLERY. A SURVEY ACTION U/S 133A OF THE ACT WAS CARRIED OUT AT THE BUSINESS PREMISES OF THE ASSESSEE AT B-1 & 2 SADHANA TOWER, SARDAR BAUG, STATION ROAD BARDOLI ON 10.10.2 009. STATEMENT ON OATH OF SHRI PRAKESHCHANDRA P. SONI, HUSBAND AND CONSTITUTED ATT ORNEY OF THE ASSESSEE ADMITTED THAT THE ASSESSEE HAS EARNED ADDITIONAL INCOME OF RS. 75 ,00,013/- DURING THE F.Y. 2009-10 RELEVANT TO A.Y. 2010-11. UPON PERUSAL OF THE BALAN CE SHEET IT FURTHER REVEALED THAT UNSECURED LOAN AMOUNTING TO RS. 4,29,000/- WAS FOUN D TO BE TAKEN BY THE ASSESSEE FROM THE FOLLOWING PERSONS: I. SMT. SHANTIBEN H. PAREKH II. SMT. LATABEN PATEL III. SHRI SURESHBHAI PATEL 3. A SHOW-CAUSE DATED 15.03.2013, THEREFORE WAS ISS UED TO THE ASSESSEE AS TO WHY SAID AMOUNT SHOULD NOT BE ADDED IN HER HAND U/S 68 OF THE ACT. 4. IN RESPONSE TO THE SAME, THE ASSESSEE SUBMITTED THAT SMT. SHANTIBEN H. PAREKH IS A SENIOR CITIZEN, THE MOTHER OF THE ASSESSEE REGULARL Y FILES HER RETURN OF INCOME, IN FACT IN THE PREVIOUS YEAR UNDER CONSIDERATION SHE FILED HER RETURN SHOWING GROSS RENTAL INCOME TO THE TUNE OF RS. 3,48,000/- AND THE TOTAL TAXABLE INCOME WAS SHOWN AT RS.2,46,951/-. IT - 3 - ITA NO.3173/A/14 MRS. NIRMALABEN C. SONI VS. ACIT ASST.YEAR 2010-11 WAS FURTHER CONTENDED THAT ASSESSEE WAS GIVEN LOAN BY HER ON 27.03.2010 AMOUNTING TO RS. 2,50,000/- CONFIRMATION WHEREOF BEING AN ACCOUN T, SURAT DIST. BANK PASS-BOOK ALONG WITH THE RETURN OF INCOME FOR A.Y. 2010-11 WERE DUL Y SUBMITTED BEFORE THE LEARNED AO. SO FAR AS, SMT. LATABEN BIPINCHANDRA PATEL IS CONCE RNED, THE ASSESSEE ALSO SUBMITTED THE CONFIRMATION OF ACCOUNT THROUGH WHICH AN ACCOUNT PA YEE CHEQUE WAS GIVEN TO THE ASSESSEE OF AN AMOUNT OF RS. 1,00,000/- ON 15.12.20 09 AS LOAN ALONG WITH THE COPY OF THE BANK STATEMENT HAS ALSO SUBMITTED BEFORE THE LEARNE D AO. FINALLY, REGARDING SHRI SURESHBHAI PATEL, THE ASSESSEE SUBMITTED BEFORE THE LEARNED AO THAT SHRI SURESHBHAI PATEL IS A BORN AGRICULTURIST AND FAMILY FRIEND WHO HAS GIVEN THE LOAN AMOUNTING TO RS. 60,000/- BY AN ACCOUNT PAYEE CHEQUE ON 15.12.2009 T O THE ASSESSEE. THE COPY OF THE BANK STATEMENT AND INCOME PROOF FROM BARDOLI SUGAR IN SUPPORT OF THE UNSECURED LOAN RECEIVED BY THE ASSESSEE WAS ALSO DULY SUBMITTED BE FORE THE LEARNED AO. HOWEVER, THE EXPLANATION SO SUBMITTED BY THE ASSESSEE WAS NOT FO UND ACCEPTABLE BY THE LEARNED AO AND THE ENTIRE AMOUNT TO THE TUNE OF RS. 4,29,000/- WAS ADDED TO THE TOTAL INCOME OF THE ASSESSEE ON ACCOUNT OF ALLEGED CASH CREDIT U/S 68 O F THE ACT ON UNSECURED LOAN UPON WHICH APPEAL WAS PREFERRED BY THE ASSESSEE BUT WITH OUT ANY SUCCESS. HENCE, THE INSTANT APPEAL BEFORE US. 5. AT THE TIME OF HEARING OF THE APPEAL, THE LEARNE D COUNSEL APPEARING FOR THE ASSESSEE SUBMITTED BEFORE US THAT THE LOAN WHICH WA S TAKEN FROM HIS MOTHER IS HAVING A REGULAR RENTAL INCOME DETAILS WHEREOF HAVE ALSO BEE N PLACED BEFORE US. THE SAME WAS ALSO EVIDENT FROM THE ORDER OF THE LEARNED CIT(A) BEFORE US. SIMILARLY, THE AMOUNT SO TAKEN AS LOAN FROM SHRI SURESHBHAI PATEL AND FROM SMT. LA TABEN BIPINCHANDRA PATEL GENUINENESS OF SUCH TRANSACTIONS WAS ALSO BEEN SUPP ORTED BY DOCUMENTS BEING BANK STATEMENTS OF THE CONCERNED BANKS THROUGH WHICH SUC H AMOUNT HAS BEEN PAID TO THE ASSESSEE. IT WAS FURTHER CONTENDED THAT SHRI SURESH BHAI PATEL IS RUNNING SUGAR FACTORY AND EARNING MORE THAN 4 LACS PER ANNUM, WHICH IS ALSO E VIDENT FROM THE BANK STATEMENT OF THE SUGAR FACTORY SUBMITTED BY HIM. THOUGH ALL THE DOCUMENTS RELATING TO THE TRANSACTION - 4 - ITA NO.3173/A/14 MRS. NIRMALABEN C. SONI VS. ACIT ASST.YEAR 2010-11 WERE DULY PLACED BY THE ASSESSEE BEFORE THE AUTHORI TIES BELOW, THE ASSESSEE SUBMITTED THAT THOSE DOCUMENTS WERE NOT TAKEN INTO CONSIDERATION I N ITS PROPER PROSPECTIVE AND WITHOUT ANY PROPER BASIS. THE SAME WAS DENIED AND ADDED TO THE INCOME OF THE ASSESSEE. ON THE OTHER HAND, LEARNED REPRESENTATIVE OF THE REVENUE R ELIED UPON THE ORDER PASSED BY THE AUTHORITIES BELOW. 6. HEARD THE RESPECTIVE PARTIES, PERUSED THE RELEVA NT MATERIALS AVAILABLE BEFORE US ON RECORD. IT APPEARS FROM THE RECORDS THAT IN RESPECT OF THE LOAN TO THE TUNE OF RS.2,50,000/- FROM SMT SHANTIBEN H PAREKH, THE DOUBLE SENIOR CITI ZEN WIDOW LENDER THE ASSESSEE SUBMITTED HER BANK PASS BOOK OF THE SURAT DISTRICT BANK CORPORATE LTD UP TO 06.08.2014 IN SUPPORT OF HER RENTAL INCOME, INTEREST INCOME AL ONG WITH THE CONFORMATION AND THE RETURN OF INCOME OF RELEVANT YEARS. THE CREDIT WORT HINESS OF SHRI SURESHBHAI D. PATEL, A BORN AGRICULTURIST WAS SOUGHT TO BE ESTABLISHED BY THE ASSESSEE BY SUBMITTING DULY SIGNED CONFIRMATION OF ACCOUNT ALONG WITH THE COPY OF THE BANK STATEMENT AND PROOF OF AGRICULTURAL INCOME FROM BARDOLI SUGAR FACTORY IN SUPPORT OF THE UNSECURED LOAN GIVEN TO THE APPELLANT DURING THE PREVIOUS YEAR. PROOF OF HO LDING AGRICULTURAL LAND ALONG WITH THE CONFIRMATION ACCOUNT OF BARDOLI SUGAR FACTORY AND T HE STATEMENT OF INDUSIND BANK, BARDOLI BRUNCH WERE DULY SUBMITTED BY THE ASSESSEE IN THE ORDER TO PROVE THE GENUINENESS OF THE TRANSACTION. THE COPY OF THE BANK STATEMENT DULY SIGNED IN SUPPORT OF THE UNSECURED LOAN TO THE TUNE OF RUPEES ONE LAKH RECEI VED BY THE ASSESSEE FROM SMT LATABEN BIPINCHANDRA PATEL WAS ALSO SUBMITTED BEFORE THE AU THORITIES BELOW. THEREFORE IN ORDER TO ESTABLISH THE GENUINENESS OF THE TRANSACTION THE AS SESSEE SUPPLIED THE RELEVANT DETAILS OF THE CONCERNED PERSONS TO THE ASSESSING OFFICER AND THUS DISCHARGED HER PRIMARY ONUS. WITH UTTER SURPRISE WE FIND NO INQUIRY IN ORDER TO COME TO A CONCLUSION BEFORE MAKING ADDITION IN THE HANDS OF THE ASSESSEE HAS BEEN COND UCTED BY THE LEARNED AO. IT IS RELEVANT TO MENTION THAT ALL TRANSACTIONS WERE ROUTED THROUG H BANKING CHANNELS AND THE ASSESSEE DULY EXPLAINED SOURCE OF INCOME OF THOSE CREDITORS. THE ADDITIONS, THEREFORE, CANNOT BE MADE UNDER SECTION 68 OF THE ACT WITHOUT DUE PROCES S OF LAW. FURTHER THAT NO DELIBERATION - 5 - ITA NO.3173/A/14 MRS. NIRMALABEN C. SONI VS. ACIT ASST.YEAR 2010-11 ON THIS SCORE WAS MADE EITHER BY THE FIRST APPELLAT E AUTHORITY WHEN THE SAME WAS AGAIN PLACED BEFORE HIM BY THE ASSESSEE. NO REMAND REPORT , EVEN WAS NOT CALLED FOR BY THE FIRST APPELLATE AUTHORITY FROM THE ASSESSING OFFICER BEFO RE JUSTIFYING THE ADDITION MADE BY THE LEARNED AO. IN THE ABSENCE OF ANY CONTRARY EVIDENCE AGAINST THE ASSESSEE UP ON INQUIRY MADE BY THE AUTHORITIES BELOW SUCH ADDITION, IN OUR CONSIDERED VIEW, CANNOT BE SUSTAINED IN THE PRESENT FACTS AND CIRCUMSTANCES OF THE CASE. WE, THUS, DELETE THE ADDITION MADE BY THE AUTHORITIES BELOW. 7. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED. THIS ORDER PRONOUNCED IN OPEN COURT ON 31/01/2019 SD/- SD/- ( AMARJIT SINGH ) ( MS. MADHUMITA ROY ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 31/01/2019 PRITI YADAV, SR.PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. () / THE CIT(A)-I, SURAT. 5. , ! ' , #$%% / DR, ITAT, AHMEDABAD 6. &' () / GUARD FILE. / BY ORDER, //TRUE COPY// / ( DY./ASSTT.REGISTRAR) !, #$ / ITAT, AHMEDABAD 1. DATE OF DICTATION 24/01/2019 (DICTATION PAGES 5) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 31/01/2019 3. OTHER MEMBER. 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S. 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 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