Appeal Details
Counselvise Citation
321820514 RSA 2011
Assessee PAN
Bench
Appeal Number
CRN Number
Duration Of Justice
3 year(s) 5 month(s) 18 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
09-06-2015
Appeal Filed By
Assessee
Order Result
Allowed
Bench Allotted
A
Next Hearing Date
30-04-2015
Assessment Year
2008-2009
Appeal Filed On
21-12-2011
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD BEFORE SHRI PRAMOD KUMAR ACCOUNTANT MEMBER AND SHRI S.S. GODARA JUDICIAL MEMBER ITA NO . 3218 /AHD/ 201 1 A. Y. 200 8 - 0 9 DR. GAURANG KIRITBHAI SHAH, BEHIND BHAGWATI SOCIETY, KAMREJ, GAM ROAD, KAMR EJ CHAR RASTA, DIST. SURAT. PAN: AEDPS 0148E VS ITO, WARD - 5(1), SURAT . (APPELLANT) (RESPONDENT) REVENUE BY : S HRI DINESH SINGH, SR. D.R. , ASSESSEE(S) BY : SHRI M.J. SHAH , A.R. / DATE OF HEARING : 30 / 0 4 /201 5 / DATE OF PRONOUNCEMENT: 9 / 0 6 /201 5 / O R D E R PER SHRI S.S. GODARA , JUDICIAL MEMBER TH IS ASSESSEE S APPEAL FOR A.Y. 200 8 - 0 9 , ARISE S FROM ORDER OF THE CI T(A) - I SURAT DATED 2 6 . 09 . 20 11 PASSED I N CASE NO . CAS - I/205/11 - 12 , UPHOLDING THE ASSESSING OFFICER S ACTION ADDING UNEXPLAINED CASH CREDITS OF RS.3.30 LAC U/S.68 OF THE INCOME TAX , IN PROCEEDINGS U/S. 143 ( 3 ) OF THE INCOME TAX ACT IN SHORT THE ACT . 2. THE A SSESSEE - INDIVIDUAL IS A DOCTOR. HE FILED HIS RETURN ON 26 TH MARCH, 2009 ADMITTING INCOME OF RS.2,79,840/ - . THE ASSESSING ITA NO. 3218 /AHD/201 1 DR. GAURANG KIRITBHAI SHAH . FOR A.Y. 200 8 - 0 9 - 2 - OFFICER IN THE COURSE OF SCRUTINY NOTICED A SUM OF RS.3.3 LAC DEPOSITED BY WAY OF THREE SEPARATE CHEQUES OF RS.1.10 LAC EACH FROM THE S AVINGS ACCOUNT OF SHRI MUKESH PATEL. HE SOUGHT TO CONFIRM IDENTITY , GENUI NE NESS AND CREDITWORTHINESS OF THESE DEPOSITS. SHRI MUKESH PATEL APPEARED AND CONFIRMED THESE DEPOSITS. HE FILE D A WRITTEN CONFIRMATION ON 25.11.2010 AND ALSO GOT HIS STATEMENT RECORDE D. THE SOURCE OF THE CREDITS WAS STATED TO BE HIS AGRICULTURAL INCOME FROM SUGARCANE PRODUCE D . THE ASSESSING OFFICER REJECTED ALL THESE EXPLANATIONS AND INVOKED SECTION 68 OF THE ACT FOR MAKING THE IMPUGNED ADDITION. 3. THE CIT(A) HAS AFFIRMED THE ASSESS ING OFFICER S FINDING IN THE LOWER APPELLATE ORDER. WE FIND THAT THE SAME COMPRISES OF THE ASSESSING OFFICER S OPINION, ASSESSEE S SUBMISSIONS AND THE IMPUGNED FINDINGS CONTAINED IN THE ORDER UNDER CHALLENGE AS FOLLOWS: 5 GROUND NO.L: A.O.'S ARGU MENTS: DURING THE YEAR UNDER CONSIDERATION THE ASSESSEE HAS RECEIVED UNSECURED LOAN FROM SHRI MUKESH T. PATEL, THE SAID LOAN RECEIVED BY THE ASSESSEE IN THREE CHEQUES EACH OF RS.1,10,000/ - . SHRI MUKESH PATEL ISSUED THREE CHEQUES FROM HIS THREE BANK ACCOUNT S WHICH ARE MAINTAINED WITH THE SURAT DISTRICT CO. OP. BANK LTD., VAV BRANCH, SURAT. IN VIEW OF THE ABOVE, THE ASSESSEE HAS REQUESTED TO SUBMIT THE CONTRA CONFIRMATION FROM SHRI MUKESH PATEL WITH NECESSARY MATERIAL EVIDENCES. IN THIS REGARD, A SHOW CAUSE L ETTER DATED 18.11.2010 WAS ISSUED AND SERVED UPON THE ASSESSEE, THE CONTENTS ARE REPRODUCED AS UNDER: - '''AS YOU ARE WELL AWARE THAT TIME BARRING SCRUTINY ASSESSMENT PROCEEDINGS UNDER SECTION 143(3) OF THE I.T. ACT 1961 FOR THE A.Y. 2008 - 09 ARE GOING ON IN YOUR CASE. IN YOUR CASE YOUR A.R. SUBMITTED TWO WRITTEN SUBMISSION ON. TO FINALISE ASSESSMENT PROCEEDINGS YOU ARE ITA NO. 3218 /AHD/201 1 DR. GAURANG KIRITBHAI SHAH . FOR A.Y. 200 8 - 0 9 - 3 - REQUESTED TO PRODUCE BOOKS OF ACCOUNT WITH ALL BANK STATEMENTS ON 29.11.2010 AT 12.30 P.M. DURING THE YEAR YOU HAVE SHOWN UNSECURED LOAN OF RS. 3.30.3000/ - FROM MUKESH PATEL, THE SAME IS NOT VERIFIABLE. THEREFORE YOU ARE REQUESTED TO PRODUCE THE SAID PERSON WITH NECESSARY EVIDENCE. YOU HAD SHOWN CASH RECEIPTS OF RS. 90,000/ - IN YOUR CASH BOOK FOR CAR SOLD, BUT ON VERIFICATION OF THE S ALE DEED IT IS FOUND THAT THE CAR WAS IN THE NAME OF YOUR WIFE. SHE IS ALSO BY PROFESSION A DOCTOR AND FILED HER RETURN OF INCOME SEPARATELY. THEREFORE, THE SAID SALE AMOUNT SHOULD BE CREDITED BY YOUR WIFE NOT BY YOU. THEREFORE, THE CASH DEPOSIT IN CASH BO OK IS NOT EXPLAINED? MUKESH PATEL ISSUED THREE CHEQUES FOR LOAN AMOUNT OF RS. 3,30,000/ - EACH OF RS. 110000/ - . ON VERIFICATION OF BANK STATEMENT IT IS FOUND THAT ONE CHEQUE OF RS. 110000/ - HAS BEEN ISSUED BY MUKESH PATEL IN THE NAME OF MRS. KETKI. TH E SAID CHEQUE ALSO DEPOSITED BY YOU IN YOUR BANK ACCOUNT AND SHOWN AS UNSECURED LOAN FROM MUKESH PATEL. THIS TRANSACTION IS NOT ALLOWED TO YOU SHOWN UNSECURED LOAN FROM MUKESH PATEL. PLEASE PRODUCE ALL REGISTER WHICH ARE REQUIRED TO MAINTAIN AS PER PR OVISION OF HEALTH DEPARTMENT. PLEASE PRODUCE REGISTER REGARDING OUTDOOR PATIENT AND INDOOR PATIENT, AND ALSO PRODUCE THE CONSENT LETTER WHICH WAS GIVEN BY THE INDOOR PATIENT FOR OPERATION PURPOSE. 2. PLEASE NOTE THAT IF YOU FAIL TO COMPLY WITH THIS L ETTER ON THE DATE OF HEARING, THEN YOU ARE HEREBY SHOW CAUSE .... (I) WHY THE AMOUNT SHOWN UNDER THE HEAD OF UNSECURED LOANS SHOULD NOT TREATED AS UNEXPLAINED CREDIT IN BOOKS OF ACCOUNT AS UNSECURED LOANS NOT EXPLAIN BY YOU? 3. THIS NOTICE MAY BE TREATED A S NOTICE U/S. 142(1) OF THE I.T. ACT, AND IF YOU ARE FAILED TO COMPLY THE SAID NOTICE, THEN YOU ARE HEREBY SHOW CAUSE WHY PENALTY OF RS.10,000/ - SHOULD NOT BE IMPOSED FOR NON - COMPLIANCE OF NOTICE.' THE AR OF THE ASSESSEE FILED A SUBMISSION DATED 25.11.201 0 AND 29.11.2010 REGARDING UNSECURED LOAN RECEIVED BY THE ASSESSEE WITH EVIDENCES AND STATED THAT I HAD SUBMITTED THE NECESSARY PROOF ON THIS ISSUES HAD BEEN ALREADY SUBMITTED ON 19.8.2010 & 9.9.2010. AFTER GOING THROUGH THE SAID DETAILS, THE SUBMISSION F ILED BY THE ASSESSEE IS NOT TENABLE ON THE GROUND THAT SHRI MUKESH PATEL ISSUED THE AFORESAID THREE CHEQUES FROM HIS SAVING ACCOUNT OF THE SURAT DISTRICT CO. OP. BANK LTD., IN WHICH HE HAS JOINT HOLDER. FURTHER, IT IS NOTICED THAT BEFORE ISSUING CHEQUES SH RI MUKESH PATEL HAD DEPOSITED CASH OF RS.90,000/ - ON 5.2.2008 AND RS.45,000/ - ON 14.3.2008 IN ITA NO. 3218 /AHD/201 1 DR. GAURANG KIRITBHAI SHAH . FOR A.Y. 200 8 - 0 9 - 4 - ACCOUNT NO.375, DEPOSITED CASH OF RS.90,000/ - ON 5.2.2008 AND RS.55,000/ - ON 14.3.2008 NO.256 AND ISSUED IN THE NAME OF GAURANG K SHAH, IN ACCOUNT NO. 257 HE HAD DEPOSITED CASH OF RS.70,000/ - ON 5.2.2008 AND RS.10,000/ - ON 14.3.2008 AND THIS CHEQUE WAS ISSUED IN THE NAME OF KETKI G. SHAH. HENCE, THE ASSESSEE HAS RECEIVED LOAN OF RS. 2,20,000 FROM MUKESH PATEL IN HIS NAME AND RS.1,10,000 IN THE NAME OF HIS WIFE BUT THE ASSESSEE HAS SHOWN TOTALLY RS.3,30,000/ - LOAN IN HIS BOOKS OF ACCOUNTS. FOR THE VERIFICATION OF THE GENUINENESS OF THE LOAN TRANSACTION, A SUMMONS WAS ISSUED ON 29.11.2010 TO SHRI MUKESH T. PATEL WITH A REQUEST TO ATTEND THE OFFICE ON 2.12.2010 WITH H IS SALE/PURCHASE BILL, VARIOUS LABOUR CHARGES EXPENSES AND OTHER EXPENDITURE DETAILS IN REGARDS HIS CLAIM OF AGRICULTURE INCOME. IN RESPONSE TO THE SAID SUMMONS, SHRI MUKESH T. PATEL ATTENDED ON 2.12.2010 AND HIS STATEMENT ON OATH WAS RECORDED. DURING THE COURSE OF STATEMENT IT WAS ANALYZED THAT SHRI MUKESH T. PATEL EARNED INCOME FROM AGRICULTURAL ACTIVITIES BUT HE HAS FAILED TO GIVE ANY BILL OR EXPENDITURE INCURRED FOR AGRICULTURAL ACTIVITIES. DURING THE COURSE OF STATEMENT ON OATH OF QUESTION NO.6 HE WAS SPECIFICALLY ASKED TO EXPLAIN THE SOURCE OF CASH DEPOSIT IN THE AFORESAID THREE ACCOUNTS ON 25.2.20098 & 14.3.2008. IN THIS REGARD HE HAS STATED THAT THE SAID AMOUNT DEPOSITED FROM HIS AGRICULTURAL INCOME AND THE SAID INCOME RECEIVED FROM VARIOUS COOPERATI VE SOCIETIES BY WAY OF CASH BUT HE IS UNABLE TO PRODUCE THE EVIDENCE IN SUPPORT OF HIS CLAIM. FURTHER, HE STATED THAT THE SAID CASH WAS DEPOSITED FOR GIVING LOAN TO THE ASSESSEE. IN VIEW OF THE ABOVE, IT IS CLEAR THAT THE ASSESSEE HAS MANAGED HIS UNDISCLOS ED/UNACCOUNTED INCOME FOR RECEIVING UNSECURED LOAN FROM HIS FRIEND SHRI MUKESH T. PATEL. TO PROVE THE SAME, BOOKS OF ACCOUNTS OF THE ASSESSEE WAS THOROUGHLY VERIFIED ON 29.11.2010 AND IT IS NOTICED THAT THE ASSESSEE HAS SUPPRESSED HIS 'SONOGRAPHY INCOME' A S WELL AS SUPPRESSED HIS OPERATION/SURGERY INCOME ALSO. DURING THE COURSE OF VERIFICATION OF SONOGRAPHY REGISTER WHICH IS REQUIRED TO BE MAINTAINED COMPULSORILY BY THE HOSPITAL FOR VERIFICATION OF HEALTH DEPARTMENT AND DISCREPANCY FOUND WITH THE REGISTER MAINTAINED BY THE ASSESSEE, PATIENTS WERE SHOWN LESS IN COMPARISON TO THE SONOGRAPHY REGISTER WHICH IS REQUIRED TO MAINTAINED COMPULSORILY BY THE HOSPITAL. FURTHER ON VERIFICATION OF THE CONSENT LETTERS WHICH WERE SIGNED BY THE RELATIVES OF THE PATIENTS IT IS NOTICED THAT THE ASSESSEE WAS NOT SHOWN TOTAL RECEIPT FROM HIS OPERATION ACTIVITY I.E., IN SOME CASES THE SAME WERE NOT ACCOUNTED FOR BY THE ASSESSEE IN HIS BOOKS OF ACCOUNTS. THE DISCREPANCY WAS FOUND DURING THE COURSE OF VERIFICATION OF BOOKS OF ACCO UNTS AND CONFRONTED BY THE ASSESSEE HIMSELF. THEREFORE CLEAR THAT THE ASSESSEE HAS SUPPRESSED HIS INCOME ITA NO. 3218 /AHD/201 1 DR. GAURANG KIRITBHAI SHAH . FOR A.Y. 200 8 - 0 9 - 5 - BY WAY OF NOT DISCLOSING CORRECT INCOME EARNED BY WAY OF SONOGRAPHY INCOME AS WELL AS INCOME FROM SURGERY. FURTHER, THE ASSESSEE HAS NOT PRODUCED DAILY CASE REGISTER IN FORM NO.3C AS PER RULE 6F[3]. AS PER THIS REGISTER 'ENTRIES IN THIS REGISTER MAY BE MADE CHRONOLOGICALLY EVERY DAY. AT THE END OF EACH DAY, IT MUST BE ENSURE THAT THE TOTAL FEES AS ENTRIES IN THIS REGISTER TALLIES WITH THE CORRESPONDING D ETAILS IN THE RECEIPT ISSUED, AS WELL AS WITH THE ENTRIES IN THE CASH BOOK.' THEREFORE, IN ABSENCE OF THE SAID REGISTER, IT IS DIFFICULT TO ASCERTAIN THE CORRECT TOTAL RECEIPT OF THE ASSESSEE THROUGHOUT DOOR PATIENT AS WELL AS INDOOR PATIENT. THE ASSESSEE HAS ALSO NOT PRODUCED ANY FEES RECEIPTS WHICH WERE ISSUED BY HIM FOR CONSULTING CHARGES AS WELL AS HIS OPERATION CHARGES. THEREFORE, IT IS CRYSTAL CLEAR THAT THE ASSESSEE HAD SUPPRESSED HIS RECEIPT AND THE SAME IS INTRODUCED BY HIM IN HIS BOOKS OF ACCOUNT BY WAY OF UNSECURED LOAN. THEREFORE, THE LOAN RECEIVED FROM SHRI MUKESH T. PATEL IS TREATED AS 'NON - GENUINE' AND THE SAME IS UNDISCLOSED RECEIPT OF THE ASSESSEE CAME IN HIS ACCOUNT THROUGH SHRI MUKESH T PATEL. THEREFORE, THE UNSECURED LOAN RECEIVED FROM SH RI MUKESH T. PATEL IS ADDED BACK TO THE TOTAL INCOME OF THE ASSESSEE OF RS.2,20,000/ - OUT OF TOTAL LOAN OF RS.3,30,000/ - . MOREOVER, IT IS FOUND THAT SHRI MUKESH T. PATEL ISSUED CHEQUE OF RS. 1,10,000/ - FROM HIS BANK ACCOUNT NO.257 IN THE NAME OF KETKI G SH AH WHICH WAS SHOWN BY THE ASSESSEE AS HIS UNSECURED LOAN. IT IS PERTAINED TO NOTE THAT SMT. KETKI G. SHAH, WIFE OF ASSESSEE IS ALSO BY PROFESSION A GYNECOLOGIST AND SHE FILED HER RETURN OF INCOME SEPARATELY, THEREFORE, THE SAID LOAN IS REQUIRED TO BE SHOWN IN THE BOOKS OF ACCOUNTS OF SMT. KETKI G SHAH. AS PER ACCOUNTANCY PRINCIPLE, THE CHEQUE ISSUED IN THE NAME OF THE PERSON THE SAME SHOULD BE ACCOUNTED FOR IN THE BOOKS OF ACCOUNTS OF THE SAME PERSON. IN THIS CASE, THE ASSESSEE HAS FAILED TO DO SO AND SHOWN HIS WIFE'S LOAN IN HIS BOOKS OF ACCOUNTS AS UNSECURED LOAN WHICH IS NOT CORRECT, THEREFORE, THE AMOUNT OF RS. 1,10,000/ - IS ADDED TO THE TOTAL INCOME OF THE ASSESSEE. PENALTY PROCEEDINGS U/S. 274 R.W.S. 271(1)(C) FOR CONCEALMENT OF INCOME AND FURNISHING IN ACCURATE PARTICULARS OF INCOME IS INITIATED SEPARATELY. APPELLANT'S ARGUMENTS: WHILE MAKING THE ABOVE - REFERRED ADDITION OF RS.3,30,000/ - , THE LAO HAS NOT PROPERLY CONSIDERED THE DETAIL EXPLANATION GIVEN WITH THE DOCUMENTARY EVIDENCES TO SUPPORT THE FACT TH AT THE LOAN RECEIVED BY THE APPELLANT FROM SHRI MUKESH T. PATEL IS A GENUINE TRANSACTIONS OF LOAN VIDE APPELLANTS LETTER DATED 09.09.2010 AND 29.11.2010. THE APPELLANT HAD RECEIVED THE THREE CHEQUES OF RS. 1,10,000/ - EACH FROM SHRI MUKESH T. PATEL, WHO IS A N AGRICULTURIST BY BUSINESS. THE ITA NO. 3218 /AHD/201 1 DR. GAURANG KIRITBHAI SHAH . FOR A.Y. 200 8 - 0 9 - 6 - APPELLANT HAS GIVEN THE FOLLOWING DOCUMENTARY EVIDENCES TO THE LAO DURING THE COURSE OF ASSESSMENT PROCEEDINGS. (I) PHOTOSTAT OF COPY ELECTION CARD TO PROVE THE IDENTITY (II) COPIES OF BANK PASSBOOK SHOWING THE DEBIT ENTRIES OF THRE E CHEQUES OF RS. 1,10,000/ - EACH. (III) COPIES OF FORM 7 & 12 AND 8 A SHOWING THE LAND HOLDING BY SHRI MUKESH T. PATEL. (IV) PHOTOSTAT COPY OF CERTIFICATE ISSUED BY SHREE KAMREJ VIBHAG SAHAKARI KHAND UDHYOG LTD AS A PROOF OF AGRICULTURE INCOME OF SHRI MUKESH T. PATEL . (V) COPY OF LEDGER ACCOUNTS FROM APPELLANTS BOOK DULY SIGNED BY SHRI MUKESH T. PATEL CONFIRMING THE ABOVE LOAN OF RS. 3,30,000/ - SHRI MUKESH T. PATEL HAD ONCE AGAIN FILED THE FOLLOWING DETAILS CONFIRMING THE SAID LOAN OF RS. 3,30,000/ - GIVEN TO DR. GAURANG K. SHAH VIDE HIS LETTER DATED 25.11.2010 ON HIS OWN RECEIVED BY THE LAO'S OFFICE ON 25.11.2010 VIDE RECEIPT NO. 2510025671. (I) IN THE SAID LETTER SHRI MUKESH T. PATEL HAD CATEGORICALLY STATED THAT, HE HAS GIVEN TOTAL AMOUNT OF RS. 3,30,000/ - BY THREE ACC OUNT PAYEE CHEQUES TO HIS FRIEND DR. GAURANG K. SHAH AS A INTEREST FREE LOAN. THE DETAILS OF CHEQUES AND OTHER RELEVANT PARTICULARS WERE GIVEN IN THE SAID LETTER (PHOTOSTAT COPY OF LETTER DATED 25.11.2010 IS ENCLOSED). (II) HE HAS ALSO STATED IN THE LETTER THAT HE IS HOLDING HUGE AMOI AGRICULTURE LAND IN VILLAGE VAV, TALUKO KAMREJ, DIST, SURAT. HE HAD ALSO ATTACHED THE PHOTOSTAT COPIES OF FORM NO.7/12 & 8A TO PROVE THE LAND HOLDING. (III) HE HAS STATED THAT THE ABOVE LOAN IS GIVEN OUT OF AGRICULTURE INCOME OF SUGARCANE SALES RECEIVED FROM VARIOUS CO - OP SOCIETIES. (PHOTOSTAT COPIES OF INCOME CERTIFICATE RECEIVED FROM VARIOUS SUGAR CO - OPERATIVE SOCIETIES WERE ALSO ATTACHED TO PROVE THE SOURCE OF AGRICULTURE INCOME). THE APPELLANT PRODUCED SHRI MUKESH T. PATEL BEFORE THE LAO ON 29.11.2010 IN COMPLIANCE TO THE SHOW CAUSE NOTICE DATED 18.11.2010 ISSUED BY THE LAO. DURING THE COURSE OF HEARING ON THIS DATE THE LAO ORALLY ASKED FEW QUESTIONS TO SHRI MUKESH T. PATEL, REGARDING THE LOAN GIVEN BY HIM TO THE APPELLANT. SHRI MUKESH T. PATEL WHILE REPLYING TO THE LAO'S QUESTIONS ORALLY CONFIRMED THAT HE HAS GIVEN THE LOAN OF RS. 3,30,000/ - TO THE APPELLANT. THE LAO WAS NOT SATISFIED WITH THE SUBMISSION OF APPELLANT, CONFIRMATION GIVEN ORALLY BY SHRI MUKESH T. PATEL AT THE OFFICE OF THE ITA NO. 3218 /AHD/201 1 DR. GAURANG KIRITBHAI SHAH . FOR A.Y. 200 8 - 0 9 - 7 - LAO AND ALSO WITH THE DOCUMENTARY EVIDENCES SUBMITTED BY SHRI MUKESH T. PATEL BY A LETTER DATED 25.11.2010 ADDRESSED TO ITO WARD - 5 (1), SURAT DIRECTLY BY SHRI MUKESH T. PATEL CONFIRMING THE ABOVE LOAN, THE LAO HAD ISSUED THE SUMMONS U/S. 1 31(1) OF THE INCOME TAX ACT TO SHRI MUKESH T. PATEL TO PRESENT HIMSELF AT LAO'S OFFICE ON 02.12.2010 FOR RECORDING HIS STATEMENT ON OATH, IN RESPECT OF THE SAID LOAN. WE ARE ENCLOSING HEREWITH THE COPY OF ENGLISH VERSION OF STATEMENT OF SHRI MUKESH T. PAT EL RECORDED IN GUJARATI ON OATH IN ROOM 313 AT 11.50 A.M. U/S. 131 OF THE INCOME TAX ACT. FROM THE ABOVE YOUR HONOR WILL FIND THAT SHRI MUKESH T. PATEL HAD ONCE AGAIN CONFIRMED THAT HE HAS GIVEN THE LOAN OF RS. 3,30,000/ - TO THE APPELLANT BY THREE ACCOUNT PAYEE CHEQUES. THE SAID LOAN WAS GIVEN OUT OF HIS AGRICULTURE INCOME. HE HAS ALSO SAID THAT THE AGRICULTURE INCOME WAS RECEIVED BY HIM FROM VARIOUS CO - OPERATIVES SOCIETIES AND SAID INCOME WAS RECEIVED EITHER BY CASH OR BY CHEQUES. HE HAS ALSO STATED THAT, HE IS OWNING 55 TO 60 VINGHA OF AGRICULTURE LAND. WE WOULD LIKE TO DRAW YOURS HONOR'S KIND ATTENTION TOWARDS Q. 10 PUT BY THE LAO. IN THE SAID QUESTION THE LAO HAS ASKED THAT, 'WHEN WAS THE CASH WAS GIVEN BY DR. GAURANG TO DEPOSIT IN YOUR ACCOUNT FOR GIV ING THE SAID LOAN'. IN REPLY TO THE SAID QUESTION SHRI MUKESH T. PATEL HAD STATED THAT DR. GAURANG K. SHAH HAS NOT GIVEN MONEY (CASH) TO HIM. IN REPLY TO Q. NO. 5 AND 13 OF LAO, SHRI MUKESH T. PATEL HAD STATED THAT, HE HAS RECEIVED THE LOAN BACK IN INSTA LLMENT. HE HAS ASSURED THE LAO TO FILE THE DETAILS OF REFUND OF LOAN BEFORE 07.12.2010. AS PER THE ASSURANCE, SHRI MUKESH T. PATEL HAD SUBMITTED THE DETAILS OF REPAYMENT OF LOAN BY DR. GAURANG K. SHAH BY LETTER DATED 06.12.2010 RECEIVED BY THE LAO OFFICE O N 06.12.2010 VIDE ACKNOWLEDGMENT NO. 2510026709 (PHOTOSTAT COPY OF LETTER IS ENCLOSED). HE HAS ALSO ATTACHED THE PHOTOSTAT COPIES OF MEMBERSHIP PASSBOOK ISSUED BY THE SUGAR FACTORY SHOWING THE DETAILS OF PAYMENT RECEIVED DURING THE F.Y. 2007 - 2008 FROM THE SUGAR FACTORY TOWARDS SALE OF SUGARCANE TO PROVE THE FACT THAT HE HAS GROWN SUGARCANE DURING THE F.Y. 2007 - 2008 AND NOT GROWN DANGER (RICE) WRONGLY MENTIONED BY TALATI IN FORM NO. 7 /12 & 8 - A. ITA NO. 3218 /AHD/201 1 DR. GAURANG KIRITBHAI SHAH . FOR A.Y. 200 8 - 0 9 - 8 - IN VIEW OF THE ABOVE STATED FACTS AND DOCUMENTARY EVIDENCES SUBMITTED BY THE DEPOSITOR, WE WOULD LIKE TO SUBMIT THAT THE ABOVE LOAN GIVEN BY SHRI MUKESH T. PATEL IS A GENUINE LOAN TRANSACTIONS AND THE ABOVE FACTS PROVES THAT THE APPELLANT HAS NOT MANAGED HIS UNDISCLOSED / UNACCOUNTED INCOME FOR RECEIVING UNSECURED LOAN FROM HIS FRIEND SHRI MUKESH T. PATEL AS OBSERVED BY THE LAO IN PARA 3.3 OF THE ASSESSMENT ORDER. IN VIEW OF THE ABOVE, YOUR HONOR WILL APPRECIATE THE FACT THAT THE APPELLANT HAS DULY ESTABLISHED. (I) THE IDENTITY OF SHRI MUKESH T. PATEL (DEPOSITOR) (II) CREDIT WORTHINESS OF SHRI MUKESH T. PATEL AND (III) THE GENUINENESS OF LOAN TRANSACTIONS. DECISION: ARGUMENTS OF AO AS WELL AS APPELLANT HAS BEEN CONSIDERED. THERE IS CONSIDERABLE FORCE IN AO'S ARGUMENTS. THE MOST CLINCHING EVIDENCE BROUGHT ON RECORD BY AO IS THAT CREDIT WORTHINESS OF SHRI MUKESH PATEL, ALLEGED CREDITOR, HAS NOT BEEN PROVED. THE ALLEGED CREDITOR DOES NOT HAVE DEMONSTRABLE SOURCES OF INCOME. ALSO, AO HAS FOUND DEFECT IN BOOKS OF APPELLANT. RELYING ON THE ARGUMENTS OF AO, THIS ADDITION ON ACCOUNT OF UNEXPLAINED CASH CREDIT AMOUNTING TO RS.3,30,000/ - IS CONFIRMED. APPEAL ON THIS GROUND IS DISMISSED. THIS LEAVES THE ASSESSEE AGGRIEVED. 4. WE HAVE HEARD BOTH SIDES AND GONE THROUGH THE LOWER AUTHORITIES ORDERS. THE SOLE ISSUE IN THE INST ANT CASE IS OF SECTION 68 ADDITION AMOUNTING TO RS.3.30 LAC. THERE IS NO DISPUTE THAT THESE DEPOSITS HAVE COME I N THE ASSESSEE S ACCOUNT THROUGH BANKING CHANNEL. THE IDENTITY OF THE CREDITOR IS ALSO NOT AN ISSUE. THE ASSESSING OFFICER DISPUTES THE CREDITOR S VERSION ON THE ISSUE OF CAPACITY/GENUINENESS/CREDITWORTHINESS. THIS CREDITOR HAD DULY FILED WRITTEN CONFIRMATION AND ALSO PLACED ON RECORD HIS LAND OWNERSHIP DOCUMENTS TO DEPOSE IN THE ASSESSEE S FAVOUR. A PERUSAL OF HIS ITA NO. 3218 /AHD/201 1 DR. GAURANG KIRITBHAI SHAH . FOR A.Y. 200 8 - 0 9 - 9 - STATEMENT DEMONSTRATES THAT ONE OF HIS SON STUDIES IN USA AS WELL. HE QUOTES THE ASSESSEE TO BE HIS SCHOOL FRIEND. THE DOCUMENT HAS PAGES 22 TO 27 REVEAL THE CREDITOR AND HIS FAMILY INCOME FROM VARIOUS SUGAR CO - OPERATIVE S AS PERENNIAL AND ON ROUTINE BASIS. FOR INSTANCE, THIS CREDITOR HAS DERIVE D SUGARCANE PROFITS FROM ASSESSMENT YEAR 2000 - 01 TO 2 004 - 05. THE SAME FACTUAL POSITION IS IN RESPECT OF HIS OTHER FAMILY MEMBERS. IN THESE CIRCUMSTANCES, WE DO NOT AGREE WITH THE LOWER AUTHORITIES THAT THIS CREDITOR HAS FAILED TO SATISFY ALL NECESSAR Y CONDITIONS EXPLAINING CAPACITY/GENUINESS/CREDITWORTHINESS OF THE DEPOSITS IN QUESTION. WE ALSO QUOTE CASE LAW OF HON BLE JURISDICTIONAL HIGH COURT, (2006) 280 ITR 512 (GUJ.) MURALIDHAR LAHORIMAL VS. CIT HOLDING THAT AN ASSESSEE CAN BE ASKED TO PROVE THE SOURCE OF CREDIT AND NOT TO PROVE THE SOURCE OF THE SOURCE. BE THAT AS IT MAY, WE HAVE ALREADY HELD THAT THE ASSESSEE S CREDITOR AND HIS FAMILY HA D SUFFICIENT MEANS FROM AGRICULTURAL INCOME SO AS TO LEND THE IMPUGNED SUMS AMOUNTING TO RS.3.3 LAC DEPOSITED IN THE ASSESSEE S ACCOUNT THROUGH CHEQUE PAYMENTS. THE ASSESSEE S ARGUMENTS ARE ACCEPTED. 5. THE ASSESSEE S APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE COURT ON THIS DAY, THE 9 TH JUNE , 201 5 AT AHMEDABAD. SD/ - SD/ - ( PRAMOD KUMAR ) ( S.S. GODARA ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED / 0 4 / 20 1 5 ITA NO. 3218 /AHD/201 1 DR. GAURANG KIRITBHAI SHAH . FOR A.Y. 200 8 - 0 9 - 10 - PRABHAT KR. KESARWANI , SR. P . S . / COPY OF THE OR DER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. ( ) / THE CIT(A) - III, AHMEDABAD 5. , , / DR, ITAT, AHMEDABAD 6. / GUARD FILE . / BY ORDER, / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD
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