Narayandas Shankarlal Agrawal , Nagpur V. ITO, Ward1(1), Nagpur

ITA 321/NAG/2019

AI Insights

The case involves a series of appeals by Shri Narayandas Shankarlal Agrawal and Smt. Sarita Narayandas Agrawal against the common order of the CIT(A)-1, Nagpur, which upheld the additions made under sections 68 and 69 of the Income Tax Act, 1961, for the assessment years 2006-07 to 2012-13. The primary contention was regarding the unexplained loans given to one Shri Rajput, which the department alleged were used for investing in residential properties. The Tribunal, after reviewing the detailed submissions and evidence provided by the assessees, including cash flow statements and documents of loans and investments, concluded that the loans were genuine and the sources were adequately explained, thus reversing the additions.

• Counselvise Citation: [2022] 140 COUNSELVISE.COM (IT) 136680 (ITAT-NAGPUR)
• Duration Of Justice: 9 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-11-2022
• Appeal Filed By: Assessee
• Order Result: PartlyAllowedPartlyAllowed
• Bench Allotted: SMC
• Next Hearing Date: 31-10-2022
• Assessment Year: misc
• Appeal Filed On: 23-01-2022
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 143(3); 73

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL NAGPUR BENCH ‘SMC’ : NAGPUR (THROUGH VIRTUAL HEARING) BEFORE SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER ITA.Nos.316 to 322/Nag./2019 Assessment Years 2006-07 to 2012-13 Sh Narayandas Shankarlal Agrawal, B-5 Vandana Flats, Ramdaspeth, Nagpur. PIN 440 010 PAN ABMPA0551F vs., The Income Tax Officer, Ward – 1 (1), Dr. Babasaheb Ambedkar Bhavan (MECL Bldg.) Seminary Hills, Nagpur – 440 006 (Appellant) (Respondent) ITA.Nos.352 to 354/Nag./2019 Assessment Years 2006-07 to 2008-09 Smt. Sarita Narayandas Agrawal, B-5 Vandana Flats, Ramdaspeth, Nagpur. PIN 440 010 PAN ABMPA0549F vs., The Income Tax Officer, Ward – 1 (1), Dr. Babasaheb Ambedkar Bhavan (MECL Bldg.) Seminary Hills, Nagpur – 440 006 (Appellant) (Respondent) For Assessees : Shri K.p. Dewani, Advocate For Revenue : Shri G.J. Ninawe Date of Hearing : 01.11.2022 Date of Pronouncement : 17.11.2022 ORDER PER SATBEER SINGH GODARA, J.M. The instant batch of ten appeals pertains to two assessees Shri Narayandas Shankarlal Agrawal and Smt. Sarita Narayandas Agrawal. The former assessee herein has filed his seven appeals ITA.Nos.316 to 322/Nag./2019 for assessment years 2006- 07 to 2012-13 against the CIT(A)-1, Nagpur’s common order dated 29.08.2019 passed in case Nos.CIT(A)-1/41/2014-15, CIT(A)- 2 ITA.Nos.316 to 322/Nag./2019 & ITA.Nos.352 to 354/Nag./2019 Sh Narayandas Shankarlal Agrawal & Smt. Sarita Narayandas Agrawal Nagpur. 1/23/2015-16, CIT(A)-1/22/2015-16, CIT(A)-1/21/2015-16, CIT(A)-1/20/ 2015-16, CIT(A)-1/18/2015-16, CIT(A)-1/19/2015- 16; respectively. The latter assessee herein Smt. Sarita Narayandas Agrawal has preferred her three appeals ITA.Nos.352 to 354/Nag./2019 for assessment years 2006-07 to 2008-09 against the very CIT(A)’s common order dated 09.09.2019 passed in case Nos. CIT(A)-1/42/2014-15, CIT(A)-1/17/2015-16, CIT(A)-1/16/ 2015-16, respectively. Relevant proceedings in all these cases are u/s. 143(3) r.w.s.147 of the Income Tax Act, 1961 [in short “the Act”]. 2. Heard both assessees’ as well as the department through their respective learned Representatives. Case files perused. 3. Learned counsel stated at the outset that he does not press for assessee’s substantive grounds challenging validity of the respective re-openings in all these. Rejected accordingly. 4. I next advert to the former assessee Shri Narayandas Shankerlal Agrawal’s seven appeals ITA.Nos.316 to 322/Nag./2019, challenging correctness of section 68/69 additions, as the case may be, as follows : No. A.Y. Date of return Return income (Rs.) Assessed income (Rs.) . Addition made (Rs.) 1 2006-07 22.09.2006 2,11,433 9,28,131 ' 7,16,698 2 2007-08 07.01.2015 99,655 2,99,665 2,00,000 3 2008-09 30.03.2010 1,31,280 20,84,380 19,53,100 4 2009-10 24.02.2011 1,61,840 9,29,508 7,67,668 5 2010-11 21.10.2011 1,88,340 11,88,340 10,00,000 6 2011-12 21.06.2012 2,21,810 4,21,810 2,00,000 7 2012-13 13.02.2013 2,87,697 5,37,697 2,50,000 Total 13,02,055 63,89,531 50,87,466 3 ITA.Nos.316 to 322/Nag./2019 & ITA.Nos.352 to 354/Nag./2019 Sh Narayandas Shankarlal Agrawal & Smt. Sarita Narayandas Agrawal Nagpur. 5. There is no dispute that the sole issue is foregoing section 68/69 additions wherein the learned lower authorities have held that the assessee could not prove source of his unexplained loans in issue given to one Shri Rajput. 6. Learned DR vehemently argued that both these assessees’ had invested in residential property [ies] through Sh Rajput by advancing him loans and, therefore, the impugned additions deserve to be upheld. 7. I have given my thoughtful consideration to the foregoing vehement rival pleadings and find no reason to accept the Revenue stand that the assessees had lent unexplained moneys to Sh Rajput to be invested in the corresponding residential properties, if any. This is for the precise reason that a perusal of the CIT(A)’s detailed discussion in para 5.4.2 at page-33 has categorically held that the corresponding lower appellate authority in Sh Rajput case has already found the very loans as genuine ones and deleted the same. Learned DR could hardly dispute that it is the said name lending arrangement alleged by department, in the light of its investigation wing’s report, which formed the principal reason for the Assessing Officer to take recourse to section 148/147 mechanism against these two assessees. 7.1. Learned DR at this stage highlighted that the assessees have also found to be having undisclosed bank account(s) maintained with M/s. ICICI Bank which were never declared 4 ITA.Nos.316 to 322/Nag./2019 & ITA.Nos.352 to 354/Nag./2019 Sh Narayandas Shankarlal Agrawal & Smt. Sarita Narayandas Agrawal Nagpur. despite the fact that there were unexplained deposits made therein. And also that the latter limb of the impugned reopening has alleged that the assessees had failed to explain the source of the impugned loans given to Sh Rajput, still stands intact as not genuine/creditworthy explanation has come from the taxpayers’ side before us. 7.2. The Revenue instant latter arguments also are not found to be carrying any substance. It emerges from a combined perusal of the former assessee’s detailed paper book running into 90 pages comprising of cash flow statement of each accounting period involving these seven assessment years at pages 47 to 59, his computation for assessment year 2006-07 at page 73 stating total turnover of Rs.36,53,855/-, VDIS declaration of Rs.43.41 lakhs including various loans, advances and other investments at pages 43 to 46, receipt of Indica car sold at Rs.1,79,000/- as per the corresponding sale documents, duly confirmed unsecured loans from various parties in assessment years 2008-09 to 2010-11, as the case may be, that all these latter sums very well exceed the impugned unexplained moneys added at the learned lower authorities behest. The impugned loans could not be held as to have been advanced without any explained source therefore. 7.3. These case files further reveal (more particularly in assessment year 2009-10) that assessee had also obtained loans from M/s. Reliance Capital to the tune of Rs.3,91,000/-. This is 5 ITA.Nos.316 to 322/Nag./2019 & ITA.Nos.352 to 354/Nag./2019 Sh Narayandas Shankarlal Agrawal & Smt. Sarita Narayandas Agrawal Nagpur. coupled with the fact that he had declared business turnover in wholesale grains activity of Rs.36,53,855/- which has gone accepted in both the learned lower authority’s proceedings. I, thus, conclude in the light of these peculiar facts that the former assessee has duly explained genuineness/creditworthiness of the loans in question advanced to Sh Rajput amounting to Rs.50,87,466/- in issue. The impugned additions involving varying sums in these seven assessment years 2006-07 to 2012-13 in ITA.Nos.316 to 322/Nag./2019 stand reversed. Ordered accordingly. 8. Same order to follow in latter assessee Smt. Sarita Narayandas Agrawal’s three appeals ITA.Nos.352 to 354/Nag./2019 challenging identical additions of Rs.2.5 lakhs, Rs.3 lakhs and Rs.4 lakhs, case wise, respectively as both learned Representatives are ad idem during the course of hearing that the foregoing detailed discussion in former assessee stands on identical footing mutatis mutandis in these appeals as well. Allowed accordingly. To sum-up, these twin assessees ten corresponding appeals are partly allowed in foregoing terms. A Copy of this common order be placed in the respective case files. Sd/- [SATBEER SINGH GODARA] JUDICIAL MEMBER Pune, Dated 17 th November, 2022 VBP/- 6 ITA.Nos.316 to 322/Nag./2019 & ITA.Nos.352 to 354/Nag./2019 Sh Narayandas Shankarlal Agrawal & Smt. Sarita Narayandas Agrawal Nagpur. Copy to 1. The appellant 2. The respondent 3. The Ld. CIT(A) concerned. 4. The CIT concerned 5. D.R. ITAT, Nagpur ‘SMC’ Bench, Nagpur 6. Guard File. //By Order// Assistant Registrar, ITAT, Pune Benches, Pune.