ITO 25(2)(2), MUMBAI V. MRUDULA CANDRAKANT VORA, MUMBAI

ITA 3483/MUM/2014

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 0030 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 6 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-12-2017
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 01-08-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 15-05-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SUMAN KUMAR LD
• Assessee Lawyers: PRITI VORA LD
• Keywords: Unexplained cash credit; Additional evidence
• Section: 143(3); 68

Judgement Text

ITA.NO.3483/MUM/2014 MRUDULA CHANDRAKANT VORA ASSESSMENT YEAR-2009-10 IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUMBAI . . , , BEFORE SHRI D.T. GARASIA, JM AND SHRI MANOJ KUMAR AGGARWAL, AM ./I.T.A. NO.3483/MUM/2014 ( / ASSESSMENT YEAR: 2009-10) INCOME TAX OFFICER 25(2)(2) C-11 BUILDING, ROOM.NO.106, PRATYAKSHKAR BHAVAN BANDRA KURLA COMPLEX BANDRA(E) MUMBAI-400 051 / VS. MRUDULA CHANDRAKANT VORA B-10, SHASHI TARA APARTMENT S.V.P.ROAD, BORIVALI(W) MUMBAI-400 092 ! ./ ./PAN/GIR NO. AEMPV-2322-J ( !# /APPELLANT ) : ( $%!# / RESPONDENT ) A SSESSEE BY : PRITI VORA, LD.AR RE VENUE BY : SUMAN KUMAR, LD. SR. DR / DATE OF HEARING : 02/11/2017 / DATE OF PRONOUNCEMENT : 13/12 /2017 / O R D E R PER MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1. THE CAPTIONED APPEAL BY REVENUE FOR ASSESSMENT Y EAR [AY] 2009- 10 ASSAILS THE ORDER OF THE LD. COMMISSIONER OF INC OME-TAX (APPEALS)- 35 [CIT(A)], MUMBAI, APPEAL NO. CIT(A)-35/ITO.25(2)(2)/ITA.356/11-12 DATED 06/02/2014. THE ASSESSMENT FOR IMPUGNED AY WAS FRAMED BY LD. INCOME TAX OFFICER 25(2)(2), MUMBAI [AO] U/S 143(3) OF THE INCOME TAX ITA.NO.3483/MUM/2014 MRUDULA CHANDRAKANT VORA ASSESSMENT YEAR-2009-10 2 ACT,1961 ON 21/12/2011. THE REVENUE HAS RAISED THE FOLLOWIN G EFFECTIVE GROUNDS OF APPEAL:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW THE LD. CIT(A) ERRED IN RESTRICTING THE ADDITION OF RS.20,68,687/- TO RS.4,075/- ON ACCOUNT OF CESSATION OF LIABILITY U/S.41(1) ON THE GROUND THAT AO HAS NOT DOUBTED ON THE GENUINENESS OF THE CREDIT OUTSTANDING WHICH IS INCO RRECT. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD. CIT(A) ERRED IN DELETING THE ADDITION OF RS.95 LACS MADE B Y THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED CASH CREDIT WITHOUT APPRECIA TING THE FACT THAT ASSESSEE FAILED TO PROVIDE BASIC DETAILS OF LOANS OBTAINED D URING THE YEAR UNDER CONSIDERATION SUCH AS LOAN CONFIRMATION, BANK STATE MENT AND COPY OF RETURN OF INCOME OF THE LOAN CREDITORS. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD. CIT(A) ERRED IN ADMITTING ADDITIONAL EVIDENCES IN VIOLATIO N OF RULE 46A. 2. FACTS LEADING TO THE SAME ARE THAT THE ASSESSEE BEING RESIDENT INDIVIDUAL WAS ASSESSED FOR IMPUGNED AY ON 21/12/2011 U/S 143 (3) AT RS.1,26,48,690/- AS AGAINST NIL RETURN FILED BY THE ASSESSEE ON 30/09/2009. THE ASSESSEE REFLECTED SUNDRY CREDITORS FOR RS.20,68,687/- BUT DID NOT FURNISH ANY DETAILS WHICH LED TO THE AD DITION THEREOF U/S 41(1). THE ASSESSEE SUFFERED ANOTHER ADDITION OF RS.95 LAC S AS CASH CREDIT U/S 68 ON ACCOUNT OF LOAN RECEIVED FROM AN ENTITY NAMEL Y GREVEK INVESTMENT & FINANCE LIMITED SINCE THE ASSESSEE COULD NOT FILE SUFFICIENT DETAIL S IN SUPPORT OF THE SAME. 3. AGGRIEVED, THE ASSESSEE CONTESTED THE SAME WITH SUCCESS BEFORE LD. CIT(A) VIDE IMPUGNED ORDER DATED 06/02/2014. TH E LD. CIT(A) AFTER CONSIDERING THE REMAND REPORT, RESTRICTED THE ADDITION U/S 41(1) TO RS.4075/- BEING UN-RECONCILED DIFFERENCE OF LEDGER BALANCE AS SHOWN BY ASSESSEE VIS--VIS BALANCE AS REFLECTED BY THE SUNDRY CREDITOR. QUA ADDITION U/S 68, LD. CIT(A) NOTED THAT LD. AO, IN T HE REMAND PROCEEDINGS, RECORDED THE STATEMENTS OF THE LENDER AND NOWHERE QUESTIONED ABOUT THE GENUINENESS OR CREDITWORTHINES S OF THE LENDER AND ITA.NO.3483/MUM/2014 MRUDULA CHANDRAKANT VORA ASSESSMENT YEAR-2009-10 3 MERELY DOUBTED THE SAME ON THE PREMISES THAT THE LE NDER DID NOT MAKE ANY ATTEMPT TO RECOVER THE AMOUNT. THEREFORE, LD. A O, AFTER CONSIDERING ASSESSEES SUBMISSIONS AND REMAND REPORT, DELETED B OTH THE ADDITIONS, AGAINST WHICH THE REVENUE IS IN FURTHER APPEAL BEFO RE US. 4. THE LD. DR CONTENDED THAT THE ASSESSEE COULD NOT SUBSTANTIATE THE CLAIM AND ALSO COULD NOT FULFILL PRIME CONDITIONS O F SECTION 68 AND THEREFORE, RIGHTLY BEEN SADDLED WITH IMPUGNED ADDIT IONS. IT WAS FURTHER POINTED OUT THAT THE ASSESSEE SUBMITTED ADDITIONAL EVIDENCES WHICH WERE NOWHERE CONFRONTED TO THE LD. AO. PER CONTRA, LD. AR PLACED DOCUMENTS ON RECORD TO SUPPORT THE SAID TRANSACTION S. 5. WE HAVE HEARD THE RIVAL CONTENTIONS. QUA ADDITION U/S 41(1), THE LEDGER ACCOUNT IN THE BOOKS OF THE CONCERNED BROKER NAMELY WAY2WEALTH BROKERS PRIVATE LIMITED AS PLACED ON RECORD REFLECTS A BALANCE OF RS.20,72,762.48 AS ON 31/03/2009 AS AGAINST BALANCE OF RS.20,68,687/- AS REFLECTED BY THE ASSESSEE. THE LD. CIT(A) HAS AL READY UPHELD THE ADDITION FOR DIFFERENTIAL AMOUNT. CLEARLY, THE BALA NCE ADDITION COULD NOT BE SUSTAINED AS THERE WAS NO REMISSION OR CESSATION OF TRADING LIABILITY WITHIN THE MEANING OF SECTION 41(1) SINCE THE AMOUN T WAS OUTSTANDING IN THE BOOKS OF BOTH THE PARTIES. MOREOVER, THE DOCUME NTS ON RECORD REVEAL THAT ARBITRATION PROCEEDINGS ARE ALREADY PENDING TO SETTLE THE SAME. THEREFORE, THE CONCLUSION OF LD. CIT(A) ON THIS ISS UE DO NOT REQUIRE ANY INTERFERENCE AND HENCE, REVENUES APPEAL ON THIS GR OUND STANDS DISMISSED. 6. QUA ADDITION U/S 68 FOR RS 95 LACS ON ACCOUNT OF UNCON FIRMED LOAN, THE SAME HAS BEEN STATED TO BE TAKEN BY THE A SSESSEE FROM GREVEK INVESTMENT & FINANCE PRIVATE LIMITED. THE ASSESSEE HAS PLACED ITA.NO.3483/MUM/2014 MRUDULA CHANDRAKANT VORA ASSESSMENT YEAR-2009-10 4 ON RECORD EVIDENCES IN THE SHAPE OF CONFIRMATION OF ACCOUNT, REPLY OF THE LENDER TO LD. AO, BANK STATEMENT, BOARD RESOLUTION ETC. TO SUPPORT THE CASH CREDIT. THEREFORE, ON THE FACTS, WE DEEM IT FI T TO RESTORE THE SAME TO THE FILE OF LD. AO FOR APPRECIATION OF THE SAME AND RE-ADJUDICATE THE MATTER IN THE LIGHT OF ASSESSEES CONTENTIONS / SUB MISSIONS. THE ASSESSEE, IN TURN, IS DIRECTED TO SHOW FULFILLMENT OF THREE INGREDIENTS OF SECTION 68 VIZ. IDENTITY, CREDITWORTHINESS & GENUIN ENESS. RESULTANTLY, THE REVENUES APPEAL STAND ALLOWED FOR STATISTICAL PURP OSES ON THIS GROUND. 7. IN NUTSHELL, THE REVENUES APPEAL STANDS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 13 TH DECEMBER, 2017. SD/- SD/- (D.T. GARASIA) (MANOJ KUMAR AGGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 13.12 .2017 SR.PS:- THIRUMALESH ! / COPY OF THE ORDER FORWARDED TO : 1. !# / THE APPELLANT 2. $%!# / THE RESPONDENT 3. + ( ) / THE CIT(A) 4. + / CIT CONCERNED 5. $'- , - , / DR, ITAT, MUMBAI 6. . / GUARD FILE / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI