Shri Bhawarlal M.Jain, Ahmedabad V. The Income tax Officer,Ward-11(4), Ahmedabad

ITA 3510/AHD/2010

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 5986 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 4 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-05-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 10-04-2014
• Assessment Year: 2007-2008
• Appeal Filed On: 31-12-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P L KUREEL SRDR
• Section: 68

Judgement Text

, , , , B, IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD, B BENCH . .. . . .. . , !' !' !' !', , , , #$ %&'( #$ %&'( #$ %&'( #$ %&'(, , , , )* + ) ' )* + ) ' )* + ) ' )* + ) ' BEFORE S/SHRI G.C. GUPTA, VICE-PRESIDENT AND ANIL CHATURVEDI, ACCOUNTANT MEMBER) ITA NO.3510/AHD/2010 [ASSTT.YEAR : 2007-2008] BHAWARLAL M. JAIN PROP. OF SHAH MOTILAL SURESHKUMAR 296, 2 ND FLOOR, NEW CLOTH MARKET O/S.RAIPUR GATE, AHMEDABAD. PAN : AARPJ 9815 B /VS. ITO, WARD-11(4) AHMEDABAD. ( (( (-. -. -. -. / APPELLANT) ( (( (/0-. /0-. /0-. /0-. / RESPONDENT) 1& 2 3 )/ ASSESSEE BY : SHRI PRITESH SHAH + 2 3 )/ REVENUE BY : SHRI P.L. KUREEL, SR.DR 5 2 &(*/ DATE OF HEARING : 10 TH APRIL, 2014 678 2 &(*/ DATE OF PRONOUNCEMENT : 02-05-2014 )9 / O R D E R PER G.C. GUPTA, VICE-PRESIDENT: THIS APPEAL BY THE ASSESSEE FOR THE ASSESSMENT YEAR 2007-2008 IS DIRECTED AGAINST T HE ORDER OF THE CIT(A). 2. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED T HAT THE GROUND NO.2 OF THE APPEAL OF THE ASSESSEE MAY BE DECIDED FIRST, WHICH IS REPRODUCED HEREUNDER: ITA NO.3510/AHD/2010 -2- 2. THE LD.CIT(A) ERRED IN THE CONFIRMING THE ADDIT ION OF RS.100,000/- FOR UNSECURED LOAN RECEIVED FROM M/S.K UNDAN TRADERS BY NOT CONSIDERING THE PROPER AND SUFFICIENT MATERI ALS AND RECORDS SUBMITTED BY THE ASSESSEE. ASSESSEE HAS TAKEN THES E LOANS FOR THE BUSINESS PURPOSE. IT IS SUBMITTED THAT THE SAME UN SECURED LOAN OF RS.100,000/- MAY KINDLY NOT BE ADDED TO THE TOTAL I NCOME AS CASH CREDIT U/S.68 OF THE ACT. 3. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED T HAT THE ASSESSEE HAS RECEIVED UNSECURED LOAN FROM M/S.KUNDAN TRADERS OF RS.1,00,000/- WHICH WAS ADDED BY THE AO UNDER SECTION 68 OF THE ACT AND CONFIRMED BY THE CIT(A). HE SUBMITTED THAT THE ASSESSEE HAS DISCHAR GED ITS ONUS OF PROVING IDENTITY AND CREDIT-WORTHINESS OF THE CREDITOR AND GENUINENESS OF THE TRANSACTION OF LOAN. HE SUBMITTED THAT THE AMOUNT WAS RECEIVED PER ACCOUNT PAYEE CHEQUES AND THE ASSESSEE HAS FILED CO NFIRMATION OF THE CREDITOR, COPY OF THE SAME WAS FILED IN THE COMPILA TION BEFORE THE TRIBUNAL. THE INTEREST WAS PAID TO THE CREDITOR ON THE LOAN A MOUNT PER ACCOUNT PAYEE CHEQUE FOR THE RELEVANT YEAR AS WELL AS THE SUBSEQU ENT YEAR, AND TDS WHEREVER APPLICABLE WAS DEDUCTED AT SOURCE AND DEPO SITED TO THE ACCOUNT OF THE CENTRAL GOVERNMENT. HE SUBMITTED THAT IN TH E SUBSEQUENT YEARS, THE AMOUNT OF LOAN WAS PAID BACK BY THE ASSESSEE TO THE CREDITOR AND ACCOUNT WAS SQUARED UP AND THE COPY OF THE ACCOUNT FOR THE RELEVANT YEARS ALONGWITH ATTESTATION OF THE CREDITOR WAS FILED BEF ORE THE AO AND THE COPY FILED BEFORE THE TRIBUNAL. HE SUBMITTED THAT THE CREDITOR WAS EXISTING IT ASSESSEE AND HIS PAN WAS GIVEN. THE LEARNED DR HAS RELIED ON THE ORDERS OF THE AO AND THE CIT(A). 4. WE HAVE CONSIDERED RIVAL SUBMISSIONS AND HAS PER USED THE ORDERS OF THE AO AND THE CIT(A) AND ALSO COPIES OF VARIOUS DO CUMENTS FILED IN THE COMPILATION BY THE ASSESSEE. WE FIND THAT THE AMOU NT OF RS.1,00,000/- WAS RECEIVED BY THE ASSESSEE AS LOAN PER ACCOUNT PA YEE CHEQUE FROM ITA NO.3510/AHD/2010 -3- M/S.KUNDAN TRADERS (PROPRIETOR SHRI BIPIN). THE CR EDITOR WAS AN EXISTING IT ASSESSEE AND COPY OF PAN WAS GIVEN TO THE AO. T HE CREDITOR HAS CONFIRMED THE COPIES OF THE ACCOUNT FOR THE RELEVAN T YEAR AS WELL AS SUBSEQUENT YEARS. THE INTEREST PAID BY THE ASSESSE E FOR DIFFERENT YEARS PER ACCOUNT PAYEE CHEQUES AND TDS WAS MADE, WHEREVER IS APPLICABLE. THE ACCOUNT OF THE CREDITOR WAS SQUARED UP IN THE SUBSE QUENT ASSTT.YEAR 2009- 10 AND THE AMOUNT OF DEPOSIT ALONG WITH INTEREST AM OUNT WAS PAID BACK BY THE ASSESSEE PER ACCOUNT PAYEE CHEQUES. THE ASSESS EE HAS FILED COPY OF ACKNOWLEDGEMENT FOR FILING OF IT RETURN BY THE CRED ITOR IN THE COMPILATION BEFORE US. WE FIND THAT THE INTEREST AMOUNT WAS DI SCLOSED BY THE CREDITOR IN HIS P&L ACCOUNT, AND WAS A PART OF THE TOTAL INC OME COMPUTED FOR THE RELEVANT ASSTT.YEAR 2007-08 AND NECESSARY EVIDENCES THEREOF HAS BEEN FILED BEFORE THE TRIBUNAL. THE IDENTITY OF THE CRE DITOR IS NOT IN DISPUTE. IN THESE FACTS AND CIRCUMSTANCES OF THE CASE, WE ARE O F THE CONSIDERED VIEW THAT THE ASSESSEE HAS DISCHARGED ITS ONUS OF PROVIN G THE IDENTITY AND CREDIT- WORTHINESS OF THE CREDITOR AND THE GENUINENESS OF T HE TRANSACTION OF THE LOAN TO THE ASSESSEE. ACCORDINGLY, THE ISSUE IS DE CIDED IN FAVOUR OF THE ASSESSEE AND THE GROUND NO.2 OF THE ASSESSEE IS ALL OWED. 5. THE GROUND NO.1 OF THE ASSESSEE IS AS UNDER: 1.THE LD.CIT(A) ERRED IN CONFIRMING THE ADDITION O F RS.23,967/- OF A.Y.2007-08 BY NOT CONSIDERING THE PROPER AND SUFFI CIENT MATERIALS AND RECORDS SUBMITTED. THE EXPENDITURE WAS MADE FO R THE PURPOSE OF BUSINESS. IT IS SUBMITTED THAT THE SAME EXPENDI TURE OF INTEREST OF RS.23967/- MAY KINDLY BE ALLOWED. 6. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED T HAT THIS GROUND PERTAINS TO THE DISALLOWANCE OF INTEREST PAID AT RS .23,967/-. IT CONSISTED OF TWO AMOUNTS I.E. THE AMOUNT OF RS.11,800/- PERTAINI NG TO M/S.KUNDAN TRADERS, WHICH IS SUBJECT MATTER OF APPEAL IN GROUN D NO.2 OF THE ASSESSEE. THE BALANCE AMOUNT OF INTEREST WAS DISALLOWED WAS R S.12,167/- RELATING TO ITA NO.3510/AHD/2010 -4- THE CREDIT ENTRY OF M/S.MANOJ TEXTILES OF WHICH ADD ITION WAS MADE BY THE DEPARTMENT IN THE ASSTT.YEAR 2005-06 AND THE SAME W AS DELETED IN APPEAL BY THE CIT(A) AND NO FURTHER APPEAL TO THE TRIBUNAL WAS PREFERRED BY THE REVENUE. IN THESE FACTS, HE SUBMITTED THAT SINCE THE AMOUNT OF CREDIT ENTRIES ITSELF WAS HELD AS GENUINE, NO ADDITION COU LD BE MADE FOR INTEREST PAID TO THE CREDITORS DURING THE YEAR. THE LEARNED DR HAS RELIED ON THE ORDERS OF THE AO AND THE CIT(A). 7. WE HAVE CONSIDERED RIVAL SUBMISSIONS. WE FIND T HAT THE ADDITION ON ACCOUNT OF CREDIT ENTRY OF M/S.KUNDAN TRADERS HAS B EEN DELETED BY US FOR THE REASONS RECORDED IN THE FOREGOING PARAS OF THIS ORDER WHILE DECIDING THE GROUND NO.2 OF THE ASSESSEE, AND ACCORDINGLY, NO DI SALLOWANCE OF INTEREST TO M/S.KUNDAN TRADERS OF RS.11,800/- COULD BE MADE. LIKEWISE, THE AMOUNT OF CREDIT ENTRY OF M/S.MANOJ TEXTILES ADDED IN THE EARLIER ASSESSMENT YEAR 2005-06, SINCE HAS BEEN DELETED BY THE CIT(A), AND HIS ORDER HAS BECOME FINAL, THE INTEREST PERTAINING TO M/S.MANOJ TEXTILE DURING THE RELEVANT YEAR OF RS.12,167/- COULD NOT BE DISAL LOWED. ACCORDINGLY, THE GROUND NO.1 OF THE ASSESSEE IS ALLOWED. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN OPEN COURT ON THE DATE MENTIONE D HEREINABOVE. SD/- SD/- ( %&'( %&'( %&'( %&'( / ANIL CHATURVEDI) )* + )* + )* + )* + /ACCOUNTANT MEMBER ( .. /G.C. GUPTA ) !' !' !' !' /VICE-PRESIDENT C OPY OF THE ORDER FORWARDED TO: 1) : APPELLANT 2) : RESPONDENT 3) : CIT(A) 4) : CIT CONCERNED 5) : DR, ITAT. BY ORDER