The ITO, Ward-4, Ahmedabad V. Urvashiben Manubhai Amin, Gandhinagar

ITA 3446/AHD/2010

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 67950 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 10 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-11-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 12-11-2013
• Assessment Year: 2007-2008
• Appeal Filed On: 27-12-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P L KUREEL
• Keywords: Unexplained cash credit

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD BEFORE SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER AND SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER ITA NO.3446/AHD/2010 A.Y. 2007-08 THE INCOME TAX OFFICER, WARD-4, GANDHINAGAR. VS URVASHIBEN MANUBHAI AMIN, STATION ROAD, DEHGAM, GANDHINAGAR PAN: ACCPA 6948B (APPELLANT) (RESPONDENT) REVENUE BY : SHRI P. L. KUREEL, SR.D.R. , ASSESSEE(S) BY : URVASHI SODHAN, A.R. / DATE OF HEARING : 12/11/2013 / DATE OF PRONOUNCEMENT: 22/11/2013 / O R D E R PER SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER : THIS IS AN APPEAL FILED BY THE REVENUE ARISING FROM THE ORDER OF LEARNED CIT(A), GANDHINAGAR, DATED 20 TH OCTOBER, 2010. THE MAIN GROUND RAISED BY THE REVENUE IS AS UNDER: THE LEARNED CIT(APPEALS) HAS ERRED IN LAW AND ON FA CTS IN DELETING THE ADDITION OF RS . 86,00,000/- MADE U/S. 68 OF THE ACT ON ACCOUNT OF U NEXPLAINED CASH CREDITS . 2. IN RESPECT OF THE ABOVE GROUND, FACTS IN BRIEF A S EMERGED FROM THE ASSESSMENT ORDER PASSED U/S. 143(3), DATED 27.12.20 09 WERE THAT THE AO HAD NOTED THAT THE ASSESSEE HAD INVESTED A SUM OF R S.25 LACS IN RELIANCE RELIEF BONDS. THE ASSESSEE WAS ASKED TO EXPLAIN THE SOURCE OF INVESTMENT IN THE SAID RELIANCE RELIEF BONDS. THE ASSESSEE HAS EXPLAINED THAT THE AMOUNT WAS RECEIVED FROM SRI KRISHNA TRADERS AND NI KITA ENTERPRISES. IN COMPLIANCE OF THE SHOW CAUSE NOTICE, THE ASSESSEE H AS FURNISHED THE ITA NO.3446/AHD/2010 ITO AHMEDABAD VS. URVASHIBEN MANUBHAI AMIN FOR A.Y. 2007-08 - 2 - CONFIRMATION OF ACCOUNTS OF THOSE PARTIES. IT WAS N OTED BY THE AO THAT THE BANK ACCOUNT OF THE ASSESSEE HAD REFLECTED THE SAID TRANSACTION. IN ORDER TO EXPLAIN THE TRANSACTION, THE ASSESSEE HAS REPROD UCED THE HDFC BANK STATEMENT. IT WAS FURTHER EXPLAINED THAT THE ASSESS EE HAD PURCHASED THE BOND AMOUNTING TO RS.8 LACS ON 29.9.2001 WHICH WAS MATURED ON 27 TH OF SEPTEMBER, 2009 AND THE SECOND BOND WAS PURCHASED O N 29.9.2000, WHICH WAS MATURED ON 29.9.2005. THE ASSESSEE HAS AL SO PRODUCED A LETTER FROM THE HDFC BANK IN RESPECT OF THE BONDS AMOUNTIN G TO RS.7 LACS AND 8 LACS WHICH WERE PLEDGED IN THE NAME OF SRI KRISHN A TRADERS. AGAIN, A SHOW CAUSE NOTICE WAS ISSUED TO THE ASSESSEE TO EXP LAIN AS TO WHY THE ADDITION OF RS.86 LACS SHOULD NOT BE MADE U/S. 68 I N RESPECT OF THE AMOUNT WITH KRISHNA TRADERS AND NIKITA ENTERPRISES. IN COMPLIANCE, THE ASSESSEE HAS MADE THE FOLLOWING STATEMENT: AS REGARDS TO TRANSACTIONS WITH KRISHNA TRADERS WE ENCLOSE HEREWITH DETAILED COPY OF ACCOUNT AND BANK STATEMENTS FROM A SSESSEE'S BOOK OF ACCOUNTS. THE ASSESSEE HAD WITHDRAWN RS. I588224/- AND RS 850 000/- FROM M/S. KRISHNA TRADERS FOR PURCHASE OF BOND. HOWEVER AT TH E TIME THE BOND WAS NOT PURCHASED FOR SOME REASONS AND THEREFORE THE ASSESS EE HAD ON 27.09.2006 DEPOSITED RS. 25/- LACS WITH KRISHNA TRADERS. AGAIN ON 27.09.2006 THE ASSESSEE WITHDRAWN RS25/ - LACS FROM KRISHNA TRADERS TO PURCHASE LAND BUT AGAIN THE BOND WERE NO T PURCHASED AND THEREFORE THE ASSESSEE ONCE AGAIN DEPOSITED BOND RS.25/- LACS ON THE SAME DAY WITH KRISHNA TRADERS. THEREAFTER ON 16.01.2007 THE ASSESSEE HAD WITHDRA WN RS. 2531233.88 FROM KRISNA TRADERS AND IN TURN DEPOSITED RS.2550000/- W ITH NIKITA ENTERPRISES. WE SUBMIT THAT ALL THE ABOVE TRANSACTIONS ARE MAD E THROUGH CHEQUES ONLY AND THE SAME ARE REFLECTED IN ASSESSEE'S BANK ACCOU NT. ALSO THE ASSESSEE HAVE CHARGED/PAID INTEREST ON SUCH TRANSACTIONS WITH KRI SHNA TRADERS. (2) AS STATED EARLIER THE ASSESSEE HAS WITHDRAWN RS .25,31,233 FROM KRISHNA TRADERS AND DEPOSIT RS.25 LACS WITH NIKITA ENTERPRI SES, THEREAFTER ON 30/03/2007 THE ASSESSEE HAS WITHDRAWN RS. 24,94,152 /- FROM NIKITA ENTERPRISE AND ASSESSEE INVESTED RS.25 LACS IN RELIANCE FIXED HORIZON BONDS. 2.1 HOWEVER, THE AO WAS NOT SATISFIED AND ADDITION OF R S.86 LACS WAS MADE IN THE HANDS OF THE ASSESSEE. ITA NO.3446/AHD/2010 ITO AHMEDABAD VS. URVASHIBEN MANUBHAI AMIN FOR A.Y. 2007-08 - 3 - 3. BEFORE LEARNED CIT(A), THE ASSESSEE HAS REITERATED THE EXPLANATION AND VEHEMENTLY ARGUED THAT THE PROVISIONS OF SECTIO N 68 HAVE WRONGLY BEEN INVOKED BECAUSE THE ASSESSEE HAD INVESTED THE AMOUNT AND THE ASSESSEE HAS NOT TAKEN LOAN IN RESPECT OF THE ALLEG ED ADDITION. IT WAS ARGUED THAT AN ADDITION U/S. 68 SHOULD NOT HAVE BEE N MADE IN RESPECT OF THE ADVANCES GIVEN BY THE ASSESSEE BECAUSE THIS SEC TION IS TO BE INVOKED ONLY WHEN THERE ARE CERTAIN UNEXPLAINED CREDITS IN THE BOOKS OF ACCOUNTS OF THE ASSESSEE. LEARNED CIT(A) WAS CONVINCED AND H ELD THAT ALL THE TRANSACTIONS WERE THROUGH ACCOUNT PAYEE CHEQUES AND BOTH THE PARTIES ARE INDEPENDENTLY ASSESSED TO TAX. A FINDING WAS GIVEN THAT THE CREDIT ENTRIES IN THE BANK STATEMENT WERE EXPLAINED. IT HAS ALSO B EEN NOTED BY LEARNED CIT(A) THAT, (C) ALL TRANSACTIONS ARE BY CHEQUES. THE ASSESSEES BANK ACCOUNT USED IS HDFC BANK A/C NO.0061160000926. THE TRANSACTIONS INVOLVED ARE MAINLY WITH THE FOLLO WING RELATED PARTIES. (I) SHREE KRISHNA TRADERS (II) NIKITA ENTERPRISE (D) BOTH ARE ASSESSED TO TAX AND CONFIRMED ACCOUNTS HAVE BEEN FILED. IN FACT THE ADDITION HAS BEEN MADE ON ADVANCES TO THEM, WHE REAS THE SOURCE IS ALSO MAINLY AMOUNT RECEIVED BY CHEQUES FROM THESE TWO PA RTIES ONLY. (E) THE CREDITS IN ASSESSEES BANK ACCOUNT ARE EXP LAINED, BESIDES INTERRELATED PARTIES TRANSACTIONS, THE CREDITS ARE MAINLY RENTAL INCOME DEPOSITED IN THE ACCOUNT WHICH IS DISCLOSED IN THE RETURN OF THE ASS ESSEE. (F) THE ASSESSING OFFICER HAS GIVEN UNDUE ADVERSE I MPORTANCE TO THE FACT THAT FUNDS HAVE MOVED BACK AN FORTH WITH RELATED CONCERN S WITHOUT BEING UTILIZED BY ASSESSEE IN BETWEEN WHEN THE TRANSACTIONS ARE TH ROUGH BANKS AND NO CASH WAS WITHDRAWN, WHAT WAS THE ADVERSE INFERENCE WHICH COULD BE DRAWN IS NOT UNDERSTOOD. IT COULD NOT HAVE BEEN UTILIZED FOR ANY OTHER PURPOSE AS COULD BE DOUBTED IN THE CASE OF CASH WITHDRAWALS FOR BANK AC COUNTS AND SUBSEQUENT DEPOSITS BACK WHICH IS NOT THE CASE, HERE. 4. HAVING HEARD THE SUBMISSION OF BOTH THE SIDES AS ALSO CONSIDERING THE EVIDENCES PLACED IN THE COMPILATION, WE ARE OF THE CONSIDERED OPINION THAT THE AO HAS FAULTED IN INVOKING PROVISIONS OF S ECTION 68 UNDER THE ITA NO.3446/AHD/2010 ITO AHMEDABAD VS. URVASHIBEN MANUBHAI AMIN FOR A.Y. 2007-08 - 4 - FACTS AND CIRCUMSTANCES OF THE CASE. IN THE COMPILA TION, THE ASSESSEE HAS NOT ONLY FURNISHED THE SUBMISSIONS MADE BEFORE THE AO BUT ALSO FURNISHED THE COPIES OF ACCOUNTS OF SRI KRISHNA TRA DERS AND NIKITA ENTERPRISES. THE ASSESSEE HAS ALSO FURNISHED THE HD FC BANK ACCOUNT ALONG WITH THE EXPLANATION AND ENTRIES MADE IN THE BANK STATEMENT. WE, THEREFORE, HOLD THAT LEARNED CIT(A) HAS RIGHTLY APP RECIATED ALL THOSE EVIDENCES AND DELETED THE ADDITION. THE DELETION IS HEREBY CONFIRMED AND THIS GROUND OF THE REVENUE IS HEREBY DISMISSED. 5. IN THE RESULT, REVENUES APPEAL IS DISMISSED. SD/- SD/- (ANIL CHATURVEDI) ( MUKUL KR. SHRAWAT ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 22/11/2013 PRABHAT KR. KESARWANI, SR. P.S. TRUE COPY / COPY OF THE ORDER 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