The ITO, Ward-6(3), Ahmedabad V. Shri Dalpatbhai M.Makwana, Ahmedabad

ITA 3186/AHD/2008

• Counselvise Citation: [2010] 135 COUNSELVISE.COM (IT) 9105 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 3 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-12-2010
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 27-12-2010
• Assessment Year: 2005-2006
• Appeal Filed On: 09-09-2008
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: R K DHANESTA
• Assessee Lawyers: N O N E
• Keywords: Source of fund; Additional evidence; Set aside
• Section: 133(6); 131; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL : A BENCH : AHMEDABAD (BEFORE HONBLE SHRI T.K. SHARMA, J.M. & HON' BLE SHRI A.N. PAHUJA, A.M. ) I.T.A. NO. 3186/AHD./2008 ASSESSMENT YEAR : 2005-2006 INCOME TAX OFFICER, AARD-6(3), -VS.- SHRI DALP ATBHAI M. MAKWANA, DHANDHUKA AHMEDABAD (PAN : AFZPM 5986 R) (APPELLANT) (RESP ONDENT) APPELLANT BY : SHRI R.K. DHANESTA, D .R. RESPONDENT BY : N O N E O R D E R PER SHRI T.K. SHARMA, JUDICIAL MEMBER : THIS APPEAL FILED BY THE REVENUE IS AGAINST THE OR DER DATED 14.07.2008 OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-XI, AHMEDABAD RESTRICTING THE ADDITION MADE TOWARDS CASH CREDIT UNDER SECTION 68 OF THE INCOME TAX ACT TO RS.36,000/- FROM RS.8,88,000/- AND THEREBY ALLOWING A RELIEF OF RS.8,52,000/- TO THE A SSESSEE FOR THE ASSESSMENT YEAR 2005-06. 2. IN THIS CASE, NOTICE SENT TO THE ASSESSEE THROUG H REGISTERED A/D WAS RETURNED BY THE POSTAL AUTHORITIES WITH THE REMARKS INCOMPLETE ADD RESS. THEREFORE, NOTICE FIXING THE DATE OF HEARING FOR 27.12.2010 WAS SERVED ON THE ASSESSEE B Y THROUGH DEPARTMENT. THE ACKNOWLEDGMENT OF THE ASSESSEE IS FORWARDED BY THE ASSESSING OFFIC ER VIDE LETTER DATED 1.12.2010 AND THE SAME IS PLACED ON RECORD. DESPITE THE SERVICE OF NOTICE, ON THE DATE OF HEARING, I.E. 27.12.2010, NEITHER ANYBODY APPEARED FROM THE SIDE OF THE ASSESSEE NOR APPLICATION FOR ADJOURNMENT RECEIVED. WE, THEREFORE, PROCEED TO DECIDE THIS APPEAL OF THE ASS ESSEE ON THE BASIS OF SUBMISSIONS MADE BY THE LD. D.R. AND THE MATERIAL AVAILABLE ON RECORD. 3. BRIEFLY STATED THE FACTS ARE THAT THE ASSESSEE I S AN INDIVIDUAL. FOR THE ASSESSMENT YEAR UNDER APPEAL, HE FILED THE RETURN OF INCOME DECLARI NG TOTAL INCOME OF RS.83,540/- ON 8.8.2005. ON EXAMINATION OF THE CAPITAL ACCOUNT OF THE ASSESSEE, THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HAS INTRODUCED CASH AS FOLLOWS :- (I) RS.4,95,000/- (15.04.2004); 2 ITA NO. 3186-AHD-2008 (II) RS.1,85,000/- (15.07.2004) APART FROM THE ABOVE, THE ASSESSING OFFICER ALSO NO TICED IN THE BALANCE-SHEET UNSECURED LOANS OF RS.2,08,500/-, WHICH ARE SHOWN AS CONTRIBUTED BY 11 PERSONS. THE ASSESSING OFFICER ASKED THE ASSESSEE TO EXPLAIN THE SOURCE OF THE CASH INTRODUC ED. THE CONFIRMATIONS WITH DETAILS OF PAN/ SOURCES OF INCOME OF THE 11 CREDITORS WERE ALSO CAL LED BY THE ASSESSING OFFICER. IN REPLY ON 19.10.2007, THE LD. A.R. OF THE ASSESSEE SUBMITTED AN AFFIDAVIT DATED 15.10.2007 SIGNED BY THE ASSESSEE. IN THIS AFFIDAVIT, IT WAS MENTIONED THAT THE ASSESSEE GOT THE LICENSE FOR PETROL PUMP ON 1.4.2004. HE WAS DOING LABOUR WORK OF DIAMOND POLIS HING SINCE LAST 15 YEARS AND FROM HIS SAVINGS HE HAS INVESTED RS.1,85,000/- CASH IN THE P ETROL PUMP. IT WAS FURTHER STATED THAT HIS FATHER EXPIRED ON 20.12.2004 DUE TO ILLNESS AT THE AGE OF 58 YEARS. HE WAS DOING LEATHER WORK AND HE HAD GIVEN RS.4,95,000/- CASH ON 15.04.2004 OUT OF H IS SAVING. 4. THE AFORESAID AFFIDAVIT OF THE ASSESSEE IS REJEC TED BY THE ASSESSING OFFICER OBSERVING THAT THE ASSESSEE DOES NOT HAVE ANY DOCUMENTARY PROOF IN SUPPORT OF HIS CLAIM. IT IS UNBELIEVABLE THAT HE WOULD HAVE SAVED RS.1,85,000/- CASH OUT OF HIS L ABOUR INCOME OF 15 YEARS. WITH REGARD TO RS.4,95,000/- CASH, WHICH THE ASSESSEE CLAIMED TO H AVE GIVEN BY HIS FATHER, THE ASSESSING OFFICER OBSERVED THAT IT IS NOT POSSIBLE TO SAVE THIS MUCH AMOUNT FROM LABOUR INCOME. ON THIS BASIS, THE ASSESSING OFFICER CONCLUDED THAT THE ASSESSEE HAS N OTHING SUBSTANTIVE TO STATE REGARDING THE SOURCE OF CASH INTRODUCED IN THE CAPITAL ACCOUNT AN D THE ASSESSEE DOES NOT HAVE ANY CONCRETE EVIDENCE ABOUT THE CREDIBILITY OF 11 PERSONS FROM W HOM A COLLECTIVE AMOUNT OF RS.2,08,500/- IS SAID TO HAVE BEEN TAKEN AS UNSECURED LOAN. THE ASSE SSING OFFICER ALSO OBSERVED THAT THE ASSESSEE HAS SIMPLY SUBMITTED PRINTED CONFIRMATION LETTERS F ROM TWO PERSONS (ONE IS HIS WIFE AND ANOTHER A SMALL TRADER), WHO HAVE NO BANK ACCOUNTS OR PAN AND WHO CANNOT BE CONSIDERED CAPABLE OF LENDING AMOUNTS RANGING FROM RS.17,500/- TO RS.19,5 00/- IN CASH. HE ACCORDINGLY TOOK THE VIEW THAT EXPLANATION OFFERED BY THE ASSESSEE IS NOT SAT ISFACTORY, THEREFORE, HE MADE THE ADDITION OF RS.8,88,000/- (RS.4,95,000/- ON 15.4.2004, RS.1,85, 000/- ON 15.7.2004 AND UNSECURED LOAN OF RS.2,08,000/- ALLEGED TO BE RECEIVED FROM 11 PERSON S) AS UNEXPLAINED UNDER SECTION 68 OF THE INCOME TAX ACT, 1961. 5. ON APPEAL, IN THE IMPUGNED ORDER THE LEARNED COM MISSIONER OF INCOME TAX(APPEALS) ACCEPTED THE SAVINGS AT RS.1,85,000/- AND ALSO THE AMOUNT RECEIVED FROM HIS FATHER AMOUNTING TO 3 ITA NO. 3186-AHD-2008 RS.4,95,000/- ON 15.4.2004. OUT OF THE LOAN OF 11 PERSONS, HE ACCEPTED THE LOAN FROM 9 PERSONS AMOUNTING TO RS.1,72,000/-. IN THIS MANNER, THE LEA RNED COMMISSIONER OF INCOME TAX (APPEALS) RESTRICTED THE ADDITION TO RS.36,000/-. AGGRIEVED W ITH THE DELETION OF ADDITION TO THE EXTENT OF RS.8,52,000/-, THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. 6. AT THE TIME OF HEARING BEFORE US, ON BEHALF OF R EVENUE SHRI R.K. DHANESTA, LD. D.R. APPEARED AND POINTED OUT THAT THE ASSESSEE HAS INTR ODUCED CASH AMOUNTING TO RS.4,95,000/- ON 15.04.2004 AND RS.1,85,000/- ON 15.07.2004. IN RESP ECT OF BOTH THESE AMOUNTS, THE ASSESSEE SIMPLY FILED AN AFFIDAVIT WHICH IS NOTHING BUT SELF -SERVING DOCUMENT. IT IS UNBELIEVABLE THAT HIS FATHER WAS HAVING RS.4,95,000/- IN CASH. HE SUBMITT ED THAT THIS IS AGAINST THE HUMAN PROBABILITY. HE FURTHER POINTED OUT THAT IN THE IMPUGNED ORDER T HE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS MENTIONED THAT THE ASSESSEE HAS FILED THE AFFIDAVITS FROM 11 CREDITORS BEFORE THE ASSESSING OFFICER. NO SUCH AFFIDAVITS WERE FILED BE FORE THE ASSESSING OFFICER. ON THIS BASIS, HE POINTED OUT THAT IT APPEARS THAT THE ASSESSEE HAS F ILED THE ADDITIONAL EVIDENCES BEFORE THE ASSESSING OFFICER AND LEARNED COMMISSIONER OF INCOM E TAX (APPEALS) WITHOUT AFFORDING AN OPPORTUNITY TO ASSESSING OFFICER OR CALLING THE REM AND REPORT DELETED THE ADDITION. HE FURTHER SUBMITTED THAT THE JUDGMENT OF THE HON'BLE GUJARAT HIGH COURT IN THE CASE OF DCIT VS.- ROHINI BUILDERS REPORTED IN 256 ITR 360 (GUJ.) IS NOT APPL ICABLE TO THE FACTS OF ASSESSEES CASE BECAUSE IN THE CASE OF ROHINI BUILDERS BEFORE THE HON'BLE G UJARAT HIGH COURT, ALL THE CREDITORS WERE TAX PAYERS, THEY HAVE FURNISHED THE CONFIRMATION INDICA TING THEIR PAN. IN THE INSTANT CASE, ALL THE 11 CREDITORS ARE NON-TAX PAYERS. NO AFFIDAVIT WAS FURN ISHED BEFORE THE ASSESSING OFFICER. HE ACCORDINGLY CONTENDED THAT THE ADDITION OF RS.8,88, 000/- WAS RIGHTLY MADE AND THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) IS NOT JUSTIFIE D IN RESTRICTING THE SAME TO RS.36,000/-. 7. HAVING HEARD BOTH THE SIDES, WE HAVE CAREFULLY G ONE THROUGH THE ORDERS OF AUTHORITIES BELOW. IT APPEARS THAT THE ASSESSEE HAS FILED AN AF FIDAVIT AND NO FURTHER EVIDENCE WAS FILED. FURTHER NO EVIDENCE OF SAVINGS BY HIS FATHER WAS FU RNISHED BEFORE THE ASSESSING OFFICER OR LEARNED COMMISSIONER OF INCOME TAX (APPEALS). THE A FFIDAVITS OF 11 PERSONS ALLEGED TO BE FURNISHED BEFORE THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) WERE NOT FURNISHED BEFORE THE ASSESSING OFFICER. IT IS PERTINENT TO NOTE THAT IN THE IMPUGNED ORDER THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) DELETED THE AD DITION ON THE GROUND THAT THE ASSESSING 4 ITA NO. 3186-AHD-2008 OFFICER HAS NOT MADE FURTHER ENQUIRY UNDER SECTION 133(6) OR BY RECOURSE TO SECTION 131 OF THE INCOME TAX ACT, 1961. IN THIS REGARD, IT IS SUFFICE TO OBSERVE THAT POWERS OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ARE CO-TERMINU S WITH THAT OF ASSESSING OFFICER AS HELD BY THE HON'BLE SUPREME COURT IN THE CASE OF CIT VS .- KANPUR COAL SYNDICATE REPORTED IN (1964) 53 ITR 225 (SC). IN THIS JUDGMENT, IT HAS BEEN HELD THAT POWER OF FIRST APPELLATE AUTHORITY IS CO- TERMINUS WITH THAT OF ASSESSING OFFICER. HE CAN DO WHAT ASSESSING OFFICER CAN DO AND ALSO DIRECT HIM TO DO WHAT HE HAS FAILED TO DO. IN CASE, THE LE ARNED COMMISSIONER OF INCOME TAX (APPEALS) WAS OF THE OPINION THAT ASSESSING OFFICER HAS NOT M ADE THE PROPER ENQUIRY, IN THAT EVENT, LEARNED COMMISSIONER OF INCOME TAX (APPEALS) EITHER OUGHT T O HAVE CONDUCTED THE ENQUIRY HIMSELF OR DIRECTED THE ASSESSING OFFICER TO MAKE FURTHER ENQU IRY. SINCE THIS HAS NOT BEEN DONE, WE SET ASIDE THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX (AP PEALS) AND DIRECT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) EITHER TO MAKE NECESSARY ENQUIRIES HIMSELF OR DIRECT THE ASSESSING OFFICER TO MAKE NECESSARY ENQUIRY AND SEN D THE REMAND REPORT. FOR THIS PURPOSE, THE MATTER IS RESTORED TO THE FILE OF LEARNED COMMISSIO NER OF INCOME TAX (APPEALS) WITH THE DIRECTION THAT HE WILL RE-DECIDE THE APPEAL OF THE ASSESSEE AS PER DIRECTION GIVEN HEREINABOVE. 8. IN THE RESULT, FOR STATISTICAL PURPOSES, THE APP EAL FILED BY THE REVENUE IS TREATED AS ALLOWED. THE ORDER WAS PRONOUNCED IN THE COURT ON 28.12.20 10 SD/- SD/- (A.N. PAHUJA) (T.K. SHARMA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 28 / 12 / 2010 COPY OF THE ORDER IS FORWARDED TO : 1) THE ASSESSEE (2) THE DEPARTMENT. 3) CIT(A.) CONCERNED, (4) CIT CONCERNED, (5) D.R. , ITAT, AHMEDABAD. TRUE COPY BY ORDER DEPUTY REGIS TRAR, ITAT, AHMEDABAD LAHA/SR.P.S.