LATE GOBINDRAM VERHOMAL BULCHANDANI THROUGH L/H SMT DEVIBAI GOVINDRAM BULHANDANI, MUMBAI V. ASST CIT 26(1), MUMBAI

ITA 3526/MUM/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 93140 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 1 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-07-2015
• Appeal Filed By: Assessee
• Bench Allotted: SMC
• Assessment Year: 1997-1998
• Appeal Filed On: 16-05-2014
• Court: TRIBUNAL
• Assessee Lawyers: SURESH N OTWANI
• Section: 143(3); 68

Judgement Text

IN THE INCO ME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI BEFORE SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER ./I.T.A. NO. 3526/M/2014 ( AY: 1997 - 1998 ) LATE SHRI GOBINDRAM VERHOMAL BULCHANDANI (THROUGH HIS LEGAL HEIR SMT. DEVIBAI GOBINDRAM BULHANDANI), C/S. SURESH N. OTWANI (ADVOCATE), 305, ADAMJI BUILDING, 3 RD FLOOR, 413, KATHA BAZAR, MUMBAI 400 009. / VS. ACIT - 26(1), MORARJEE MILLS COMPOUND, NEXT TO BHARATMATA CINEMA HALL, LOWER PAREL, MUMBAI - 13. ./ PAN : AERPB3774K ( / APPELLANT) .. ( / RESPONDENT ) / APPELLANT BY : SHRI SURESH N. OTWANI / RESPONDENT BY : SMT. NEELIMA NADKARNI / DATE OF HEARING : 08.07.2015 / DATE OF PRONOUNCEMENT :08.07.2015 / O R D E R PER D. KARUNAKARA RAO, AM: THIS APPEAL FILED BY THE ASSESSEE ON 16.5.2014 IS AGAINST THE ORDER OF THE CIT (A) 18, MUMBAI DATED 11.3.2014 FOR THE ASSESSMENT YEAR 1997 - 98. IN THIS APPEAL, ASSESSEE RAISED THE FOLLOWING GROUNDS WHICH READ AS UNDER: 1. THE CIT (A) ERRED IN CONFIRMING THE ORDER OF THE AO. 2. THE CIT (A) ERRED IN INVOKING SECTION 68 WHICH IS NOT A CASE AND QUITE INCORRECT, IT WAS APPELLANTS OWN MONEY WHICH IS ADVANCED TO DIFFERENT PARTIES AND THE MONEY WAS RECEIVED BACK BY THE APPELLANT WHICH WAS DEPOSITED IN THE BANK, IT WAS AGAINST REFUND OF DEPOSITS WHICH WAS RECEIVED BY CHEQUE S BUT THE CHEQUES WERE DISHONOR ED. 2. BRIEFLY STATED RELEVANT FACTS OF THE CASE ARE THAT THE ASSESSEE, WHO IS AN INDIVIDUAL, FILED THE RETURN OF INCOME DECLARING THE TOTAL INCOME OF RS. 6,29,970/ - . ASSESSMENT WAS COMPLETED U/S 143(3) OF THE ACT AND THE ASSESSED INCOME WAS 2 DETERMINED AT RS. 12,46,470/ - , WHICH INCLUDES AN ADDITION OF RS. 6,16,500/ - ON ACCOUNT OF UNEXPLAINED DEPOSITS. DURING THE ASSESSMENT PROCEEDINGS, AO NOTICED CASH DEPOSIT OF RS. 6,16,500/ - IN ASSESSEES ACCOUNT AND ASKED HIM TO EXPLAIN AND FURNISH THE DETAILS TO SUBSTANTIATE THE SAME. IN THIS REGARD, ASSESSEE EXPL AINED THAT THE SAID AMOUNT WAS COLLECTED THROUGH CHEQUES IN RESPECT OF THE LOANS GIVEN AND SINCE, THE CHEQUES WERE DISHONOURED THEREFORE, CASH WAS COLLECTED AND DEPOSITED IN THE BANK AGAINST THE SAID CHEQUES. NOT SATISFIED WITH THE SAID EXPLANATION, DETAILS OF THE PARTIES WHO HAD PAID THE LOANS AND THE CONFIRMATIONS FURNISHED BY THE ASSESSEE, AO PROCEEDED TO MAKE ADDITION U/S 68 ON ACCOUNT OF UNEXPLAINED CASH DEPOSITS BY HOLDING THAT THE CONFIRMATIONS FILED BY THE ASSESSEE WERE WITHOUT PAN / GIR NUMBE R AND NO PARTY WAS PRODUCES FOR EXAMINATION AND VERIFICATION . AGGRIEVED, ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, CIT (A) INITIALLY REMANDED THE MATTER BACK TO THE FILE OF THE AO FOR FURTHER ENQUIRY AND VERIFICATION. CONSIDERING THE ASSESSEE S FAILURE TO DISCHARGE HIS ONUS IN SUBMITTING THE DOCUMENTARY EVIDENCE TO PROVE THE SOURCE OF CASH DEPOSIT, CIT (A) DISMISSED THE APPEAL AND THEREFORE, ASSESSEE IS AGGRIEVED AND FU RTHER IN APPEAL BEFORE THE TRIBUNAL BY RAISING THE ABOVE MENTIONED GROUNDS. 3. DURING THE PROCEEDINGS BEFORE US, LD COUNSEL FOR THE ASSESSEE BROUGHT OUR ATTENTION TO THE PAPER BOOK PLACED ON TO THE RECORD AND DEMONSTRATED THAT THE SAID CASH DEPOSIT OF RS. 6,16,500/ - WAS RECEIVED INITIALLY THROUGH CHEQUES FROM THE PARTIES WHO HAD PAID THE LOANS, BUT THE CHEQUES WERE DISHONOURED AND THEREFORE, CASH WAS COLLECTED AND DEPOSITED IN THE BANK AGAINST THE SAID CHEQUES. IN THIS REG ARD, LD COUNSEL FOR THE ASSESSEE B ROUGHT OUR ATTENTION TO THE ORDER OF THE TRIBUNAL IN THE CASE OF IN THE CASE OF M/S. DILSA DISTRIBUTERS COMINES VS. ITO, ITA NO.5849/M/2011 FOR THE AY 1997 - 98, DATED 6.9.2013, WHEREIN THE IDENTICAL ISSUE WAS DECIDED BY THE TRIBUNAL AND THE SAID ORDER IS RE LEVANT FOR THE PROPOSITION THAT WHEN THE SUSPECTED UNSECURED LOANS ARE EVENTUALLY REPAID, THERE IS NO SCOPE FOR DOUBTING THE IDENTITY AND GENUINENESS OF THE TRANSACTIONS. IN SUCH CASES, THE ADDITIONS U/S 68 ARE NOT SUSTAINABLE AND THEY ARE LIABLE TO BE DE LETED. PARA 8 OF THE SAID ORDER OF THE TRIBUNAL IS RELEVANT IN THIS REGARD. HE FURTHER MENTIONED THAT THE CIT (A) CALLED FOR A REMAND REPORT FROM THE AO TO VERIFY THE RELEVANT DETAILS, CONFIRMATIONS AND THE STATEMENTS FURNISHED BUT THE SAME WAS NOT REC EIVED BY THE 3 CIT (A) TILL DATE OF PASSING OF THE IMPUGNED ORDER DATED 11.3.2014. THEREFORE, THE ORDER OF THE CIT (A)S DECISION IS NOT PROPER. 4. ON THE OTHER HAND, LD DR FOR THE REVENUE RELIED ON THE ORDERS OF THE REVENUE AUTHORITIES AND SUBMITTED THAT THE AS PER THE PROVISIONS OF SECTION 68 OF THE ACT, THE ONUS IS ON THE ASSESSEE TO PROVE THE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE T RANSACTIONS. CONSIDERING THE ASSESSEES FAILURE TO FURNISH THE DOCUMENTARY EVIDENCE, THE ACTION OF THE REVENUE AUTHORITIES CANNOT BE POINTED OUT AND SHE SUPPORTED THE DECISION TAKEN BY THE AO AND THE CIT (A). 5. I HAVE HEARD BOTH THE PARTIES AND PERUSED THE ORDERS OF THE REVENUE AUTHORITIES AS WELL AS THE RELEVANT MATERIAL PLACED ON TO THE RECORD. ON HEARING BOTH THE PARTIES AND ON PERUSAL OF THE FACTS PECULIAR TO THE PRESENT CASE, I AM OF THE OPINION THAT THE ADDITION MADE BY THE AO U/S 68 OF THE ACT IN THE YEAR UNDER CONSIDERATION IS UNSUSTAINABLE IN LAW. THE CASH DEPOSIT OF RS. 6,16,500/ - WAS EXPLAINED BY THE A SSESSEE AS THE SAID AMOUNT WAS RECEIVED THROUGH CHEQUES FROM THE PARTIES WHO HAD PAID THE LOANS, BUT THE SAID CHEQUES WERE BOUNCED AND THEREFORE, CASH WAS COLLECTED AND DEPOSITED IN THE BANK AGAINST THE SAID CHEQUES. IN THIS REGARD, REVENUE AUTHORITIES V ERIFIED ONE PARTY NAMELY NIRMITEE PROJECTS, WHO CONFIRMED THE REPAYMENT OF LOAN IN CASH, WHICH WAS REPAID ON 26.7.1996. ON THESE FACTS, THE AO CANNOT MAKE ADDITION INVALIDLY U/S 68 WITHOUT DISPUTING THE TRANSACTIONS RELATING TO LOAN ORIGINALLY GIVEN. THE LOAN WAS ORIGINALLY GIVEN BY THE ASSESSEE THROUGH BANKING TRANSACTION. IN ANY CASE, THE IMPUGNED TRANSACTIONS ARE ONLY TO SQUARE UP THE LOANS GIVEN IN THE EARLIER YEARS. THEREFORE , IN MY OPINION, THE ADDITION MADE BY THE AO AND SUSTAINED BY THE CIT (A) IS REQUIRE TO BE REVERSED. ACCORDINGLY, GROUND RAISED BY THE ASSESSEE IS ALLOWED. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 8 TH JULY , 2015. SD/ - (D. KARUNAKARA RAO) ACCOUNTANT MEMBER MUMBAI ; 8.7 .201 5 4 . . ./ OKK , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT - 4. / 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . //TRUE COPY// / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI