ACIT-CIRCLE-6, Nagpur V. M/S SHRI VENKATESH DEVELOPERS & BUILDERS, Nagpur

ITA 322/NAG/2014

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 1567 (ITAT-NAGPUR)
• Duration Of Justice: 1 year(s) 5 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-12-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2008-2009
• Appeal Filed On: 18-06-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NARENDRA KANE
• Assessee Lawyers: R P C HANDEKAR
• Keywords: Unexplained cash credit; Income from undisclosed sources
• Section: 143(3)

Judgement Text

1 I TA NO. 32 2 /NA G/2014 IN TH E INCOME TAX APPELLATE TRIBUNAL: NAGPUR BENCH: NAGPUR BEFORE SHRI MUKUL K. SHRAWAT, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER. I.T.A. NO. 3 2 2 /NAG/2014 ASSESSMENT YEAR: 2008 - 09 THE ASST. COMMISSIONER OF INCOME TAX, CIRCLE - 6, ROOM NO.3 02, 3 RD FLOOR, AAUAKAR BHAVAN, NAGPUR - 01 VS M/S. SHRI VENKATESH DEVELOPERS & BUILDERS, PLOT NO.49, KUKDE LAYOUT, POST BHAGWAN NAGAR, NAGPUR - 27 PAN:ABCFS1995H (APPELLANT) (RESPONDENT) APPELLANT BY SHRI NARENDRA KANE, DR RESPONDENT BY SHRI R. P. C HANDEKAR, ADVOCATE DATE OF HEARING: 20 - 10 - 2015 DATE OF PRONOUNCEMENT: 4 - 12 - 2015 O R D E R PER MUKUL K. SHRAWAT, J.M. THIS IS AN APPEAL FILED BY THE REVENUE ARISING FROM THE ORDER OF THE LEARNED CIT (A) - I I , NAGPUR DATED 30 - 03 - 2014 AND T HE SOLIT ARY GROUND RAISED BY THE REVENUE IS AS UNDER: - 1. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT (APPEALS) IS CORRECT IN LAW IN DELETING THE ADDITION OF RS.25 LACS, BEING UNACCOUNTED LOAN, WITHOUT APPRECIATING THE FAC T THAT THE SAID AMOUNT IS NOT REFLECTED IN THE BOOKS OF EITHER THE ASSESSEE OR SHRI VIJAY SHELKE, PARTNER, FOR THE F. Y. ENDING 31/03/2008 EITHER AS LOAN OR ADVANCE RECEIVABLE BY THE ASSESSEE. 2 . FACTS IN BRIEF AS EMERGED FROM THE CORRESPONDING ASSESSMENT ORDER PASSED U/S 143(3) OF THE IT ACT DATED 30 - 12 - 2010 WERE THAT THE ASSESSEE FIRM IS ENGAGED IN THE BUSINESS OF LAND DEVELOPMENT AND TRADING OF PLOTS. A RETURN OF INCOME WAS FILED DECLARING TOTAL INCOME OF RS.20,03,330/ - , HOWEVER, AN 2 I TA NO. 32 2 /NA G/2014 ADDITION OF RS.2 5,00,000/ - WAS MADE, NOW, CHALLENGED BEFORE US, UNDER THE HEAD UNACCOUNTED LIABILITY. THE OBSERVATION OF THE AO WAS THAT AS PER THE BOOKS LOANS WERE TO THE TUNE OF RS.2,77,44,275/ - OUTSTANDING AS ON 31 - 03 - 2008. THERE WAS AN AMOUNT OF RS.1,00,00,000/ - IN THE NAME OF ONE SHRI SA J JAN GUPTA. THE ASSESSEE HAS NOT PAID ANY INTEREST ON THIS LOAN. AS PER THE AO IT WAS UNSECURED LOAN. IN COMPLIANCE OF THE QUERY RAISED THE ASSESSEE HAS FURNISHED CONFIRMATION AND LEDGER ACCOUNT FROM MR. SA J JAN GUPTA. AS PER THE CONF IRMATION A SUM OF RS.75,00,000/ - WAS PAID TO THE ASSESSEE DURING THE YEAR. HOWEVER, ACCORDING TO THE AO, AS PER THE ASSESSEES BOOKS OF ACCOUNT THERE WAS A PENDING BALANCE OF RS.50,00,000/ - AND THERE WAS CLOSING BALANCE OF RS.1,00,000/ - . THE AO HAS NOTED C ERTAIN DISCREPANCIES WHICH WERE ALLEGED TO BE NOT MATCHING WITH THE ACCOUNTS OF THE ASSESSEE. THE EXPLANATION OF THE ASSESSEE WAS THAT THE DIFFERENCE WAS ONLY DUE TO NON - ENCASHMENT OF CHEQUES DUE TO WHICH THERE WAS A DIFFERENCE IN THE CLOSING BALANCE. HOWE VER, THE ALLEGED EXTRA RS.25,00,000/ - WAS PAID TO MR. SAJ J AN GUPTA. THE AO WAS NOT CONVINCED AND HELD THAT THE SAID SUM OF RS.25,00,000/ - REPRESENTED UNACCOUNTED LOAN WHICH WAS ACCORDINGLY8 TAXED IN THE HANDS OF THE ASSESSEE. BEING AGGRIEVED, THE MATTER WA S CARRIED BEFORE THE FIRST APPELLATE AUTHORITY. 3. BEFORE THE LEARNED CIT (A) THE ASSESSEE HAS FURNISHED THE FUND FLOW STATEMENT AND THE POSITION OF THE ACCOUNT WAS RECONCILED. THE RELEVANT PORTION IS EXTRACTED BELOW: - 8.1 THIS GROUND IS DIRECTED AGAINST T HE ADDITION OF RS. 25 LACS BEING UNACCOUNTED LOAN. IN THIS REGARD IT WAS SUBMITTED BY THE APPELLANT THAT SHRI SAJJAN GUPTA HA D GIVEN LOAN OF RS.1.5 CRORES ( RS.1.25 CORES TO VENKATESH DEVELOPERS AND RS.25 LACS TO SHRI VIJAY SHELKE, PARTNER) TO THE APPELLA NT GROUP. IT WAS FURTHER SUBMITTED WHILE RETURNING THE SAID AMOUNT OF RS.1.50 CRORES WAS REPAID BY THE APPELLANT. IT WAS FURTHER SUBMITTED THAT AS ON 31 - 03 - 2009 THE ACCOUNT OF SH RI SAJJAN GUPTA WAS NIL AND RS. 25 LACS WHICH WAS RECEIVED BY SHRI VIJAY SHELKE ON 12 - 04 - 2007 WAS PAID BY THE FIRM. IT WAS FURTHER EXPL AINED THAT DEBIT BALANCE OF RS. 25 LACS WAS SHOWN TO HAVE BEEN TRAN SFERRED TO SHRI VIKAY SHELKE BY 3 I TA NO. 32 2 /NA G/2014 WAY OF JOURNAL ENTRY. THUS THE FLOW FUNDS WERE EXPLAINED BY THE APPELLANT AS UNDER: - RECEIPTS FROM GUP TA PAYMENTS TO SHRI SA J JAN GUPTA 01/04/2007 OPENING BALANCE IN FIRM RS.50,00,000 20/03/2008 THROUGH FIRM VENKATESH BUILDERS & DEVELOPERS RX.15,00,000 12/04/2007 SHRI VIJAY SHELKE RS.10,00,000 05/04/2008 - DO - RS.25,00,000 11/04/2007 SHRI VENKATESH DEVE LOPERS RS.25,00,000 05/04/2008 - DO - RS.25,00,000 04/11/2007 SHRI VENKATESH DEVELOPERS RS.50,00,000 19/04/2008 - DO - RS.25,00,000 22/04/2008 - DO - RS.25,00,000 TOTAL RS. 1,50,00,000/ - 1,50,00,000/ - 8.2 THE ABOVE SUBMISS ION OF THE APPELLANT ALONG WITH LEDGER A/C, CONFIRMATIONS ETC. WERE FORWARDED TO LD. AO IN REMAND FOR HIS COMMENTS. THE LD. AO HAS BROADLY REITERATED THE FACTS THAT ARE ALREADY MENTIONED IN THE ASSESSMENT ORDER. IT IS STATED THAT THOUGH CERTAIN PAYMENTS HA VE BEEN RECEIVED FROM SHRI SAJJAN GUPTA THE CHEQUES HAV E BEEN RECEIVED FROM SHRI LATESH AGRAWAL, SHRI NANDKISHORE FINVEST P. LTD. AND NOT FROM SHRI SAJJAN GUPTA. IT WAS FURTHER STATED IN THE REMAND REPORT THAT SIMILARLY THE PAYMENTS WERE SHOWN TO BE MADE T O SHRI SAJJAN GUPTA WERE ACTUALLY MADE BY THE APPELLANT TO THE SAID LATESH AGRAWAL, SHRI NANDKISHORE FINVEST P. LTD. ETC. 4. AFTER VERIFYING THE REMAND REPORT AND THE TRANSACTIONS WHICH WERE STATED TO BE THROUGH CHEQUES ALONG WITH CONFIRMATION LETTERS, TH E LEARNED CIT (A) HAS HELD THAT THE ASSESSEE WAS ABLE TO EXPLAIN EACH AND EVERY ENTRY IN RESPECT OF THE LEDGER ACCOUNT OF SHRI SAJJAN GUPTA. THE IMPUGNED AMOUNT W AS DELETED IN THE FOLLOWING MANNER: - 9. I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CASE AN D THE SUBMISSION OF THE APPELLANT. IT IS SEEN THAT THE APPELLANT HAS BEEN ABLE TO VALIDLY 4 I TA NO. 32 2 /NA G/2014 EXPLAIN EACH AND EVERY ENTRY IN RESPECT OF LEDGER A/C OF SAJJAN GUPTA AND AS IT APPEARS IN THE BOOKS OF ACCOUNT OF THE APPELLANT THERE IS NO UNEXPLAINED CASH CREDIT I N THE HANDS OF THE APPELLANT WHICH IS REQUIRED TO BE ADDED. THE CONFUSION HAS ARISEN ONLY BECAUSE OF ALL ENTRIES BEING MADE IN THE APPELLANTS BOOKS OF ACCOUNT IN THE NAME OF SHRI SAJJAN GUPTA, WHILE SHRI SAJJAN GUPTA IN HIS BOOKS OF ACCOUNT WAS TAKING COG NIZANCE OF ONLY THOSE PAYMENTS AND RECEIPTS WHICH HAVE BEEN ROUTED THROUGH HIS OWN BANK A/C. HOWEVER, AS NOTED ABOVE, THE APPELLANT HAS FILED CONFIRMATION FROM ALL THE PARTIES CONCERNED INCLUDING SHRI LATESH AGRAWAL AND SHRIKANT AGRAWAL WHICH HAVE BEEN DUL Y CONSIDERED IN REMAND PROCEEDINGS AND IN VIEW OF THE SAME IT IS HELD THAT ALL ENTRIES STAND EXPLAINED. IN VIEW OF THE ABOVE FACTS THE ADDITION OF RS. 25 LACS MADE BY THE LD. AO IS HEREBY DELETED. 5. FROM THE SIDE OF THE REVENUE, THE LEARNED DR MR. NAREND RA KANE APPEARED AND REITERATED THAT THERE WAS DISCREPANCY WHICH WAS NOT RECONCILED EVEN AFTER VERIFICATION OF BOTH THE ACCOUNTS. AS PER THE ARGUMENTS OF THE LEARNED DR THE ASSESSEE WAS NOT ABLE TO PROPERLY RECONCILE THE ACCOUNTS. HE HAS PLACED RELIANCE ON THE REMAND REPORT SUBMITTED BEFORE THE LEARNED CIT (A) AND PLEADED THAT THE ASSESSEES EXPLANATION WAS INCORRECT. 6. ON THE OTHER HAND, FROM THE SIDE OF THE RESPONDENT ASSESSEE, THE LEARNED AR MR. R. P. CHANDEKAR APPEARED AND PLEADED THAT MR. SAJJAN GUPT A HAD DULY CONFIRMED THE AMOUNT ADVANCED AS LOAN TO THE ASSESSEE AND THERE WAS NO ELEMENT OF ANY INCOME IN RESPECT OF THE SAID LOAN WHICH WAS WRONGLY HELD BY THE AO AS UNACCOUNTED INCOME IN THE HANDS OF THE ASSESSEE. RELIANCE WAS PLACED ON THE DECISIONS OF (I) NUWAR INDIA VS. DCIT ( 2009) 118 ITD 70 (DEL - TRIB.), (II) ITO VS SMT. GEETA DEVI (2009) 25 (II) ITCL 520 (JP. TRIB .)/(2009) 120 TTJ (JP. TRIB.) 136, (III) PRAMOD KUMAR DANG VS. JOINT CIT (2006) 105 TTJ (DEL TRIB) 511 (2006) 6 SOT 301 (DEL. TRIB.) AND ( IV) ITO VS RAJENDRA TRADING CO. (1994) 48 ITD 210 (CHD. TRIB) (SMC). 7. WE HAVE HEARD BOTH THE SIDES AT SOME LENGTH AND CAREFULLY PERUSED THE ORDERS OF THE AUTHORITIES BELOW IN THE LIGHT OF THE COMPILA TION AND CASE LAWS DISCUSSED. ON DUE APPRECIATION OF TH E FACTUAL MATRIX OF THE CASE, WE ARE OF THE 5 I TA NO. 32 2 /NA G/2014 CONSIDERED OPINION THAT THE SAME WERE PROPERLY APPRECIATED BY THE LEARNED CIT (A). WE FOUND THAT THERE WAS NO ALLEGATION OF ANY INFIRMITY IN THE ASSESSMENT ORDER. THE DISCREPANC Y WAS BECAUSE THE TRANSACTIONS W ERE ROUTED THROUGH BANKING CHANNEL; HENCE, THERE WAS A DIFFERENCE IN THE OUTSTANDING CLOSING BALANCES. SINCE, THAT WAS RECONCILED AND MATCHED; HENCE, WE ARE NOT INCLINED TO TINKER WITH THE FINDINGS OF THE LEARNED CIT (A). ACCORDINGLY, WE HEREBY CONFIRM THE SAME. 8 . IN THE RESULT, THE REVENUES APPEAL IS DISMISSED. ORDER PRONOU NCED IN THE OPEN COURT ON THIS 4 TH DAY OF DECEMBER , 2015. SD/ - SD/ - (SHAMIM YAHYA) (MUKUL K. SHRAWAT) ACCOUNTANT MEMBER JUDICIAL MEMBER NAGPUR, DATED: 4 TH DECEMBER , 2015. LAKSHMIKANT DEKA/SR. PS COPY FORWARDED TO : 1. APPELLANT 2. RESPONDENT 3. C.I.T., CONCERNED 4. CIT ( APPEALS) - I, NAGPUR. 5. D.R., ITAT, NAGPUR. 6. GUARD FILE TRUE COPY BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, NAGPUR BENCH, NAGPUR. 6 I TA NO. 32 2 /NA G/2014 DATE INITIAL O RIGINAL DICTATION PAD & DRAFT ARE ENCLOSED IN THE FILE 1. DRAFT DICTATED ON 02.12.2015 SR.PS 2. DRAFT PLACED BEFORE AUTHOR 03.12.2015 SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS 03 .12.2015 SR.PS 6. DATE OF PRONOUNCEMENT 04.12.2015 SR.PS 7. FILE SENT TO THE BENCH CLERK 04.12.2015 SR.PS 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK