UMANG TRAVELS & TRADELINKS P.LTD, MUMBAI V. ITO 4(3)(3), MUMBAI

ITA 3571/MUM/2012

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 93163 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 1 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-07-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Next Hearing Date: 08-01-2014
• Assessment Year: 2001-2002
• Appeal Filed On: 18-05-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained cash credit
• Section: 143(3); 133(6); 68; 263

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL F BENCH, MUMBAI . . , , , BEFORE SHRI A.D. JAIN , JUDICIAL MEMBER AND SHRI N.K . BILLAIYA, A CCOUNTANT M EMBER / I .T.A. NO . 3571/MUM/2012 ( / ASSESSMENT YEAR : 2001 - 02 M/S. UMANG TRAVELS & TRADELINKS PVT. LTD., 308, SONA CHAMBERS, 507/509, CHIRA BAZAR, MUMBAI - 400 002 / VS. THE ITO - 4(3), AAYAKAR BHAVAN, MUMBAI - 400 020 ./ ./ PAN/GIR NO. : AAACU 1938J ( / APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY: SHRI K. SHIVRAM / RESPONDENT BY : SHRI SUNIL KUMAR AGARWAL / DATE OF HEARING : 01 . 0 7 .2015 / DATE OF PRONOUNCEMENT : 08 .0 7 .2015 / O R D E R PER N.K. BILLAIYA, AM: THIS APPEAL BY THE ASSESSEE IS PREFERRED AGAINST THE ORDER OF THE LD. CIT(A) - 9 , MUMBAI DT.4. 01. 2012 PERTAINING TO ASSESSMENT YEAR 200 1 - 0 2 . 2. THE FIRST GRIEVANCE OF THE ASSESSEE RELATES TO THE ADDITION OF RS. 28.77 LAKHS MADE BY THE AO U/S. 68 OF THE ACT AS UNEXPLAINED CASH CREDIT CONFIRMED BY THE LD. CIT(A). ITA. NO. 3571/M/2012 2 3. THE ASSESSEE IS IN THE BUSINESS OF TRAVEL S AND T OURS. RETURN FOR THE YEAR UNDER CONSIDERATION WAS SELECTED FOR SCRUTINY ASSESSMENT. ORDER U/S. 143(3) OF THE ACT WAS MADE ON 25.8.2003 WHICH WAS SET ASIDE BY THE CCIT(OSD), MUMBAI U/S. 263 OF THE ACT VIDE ORDER DT. 28.2.2006 AND DIRECT THE AO TO VERIFY SHARE APPLICATION MONEY OF RS. 35.97 LAKHS AND INVESTMENT SHOWN AT RS. 48.65 LAKHS. IN PURSUANCE OF THE DIRECTIONS OF THE CCIT MADE U/S. 263 OF THE ACT, THE ASSESSING OFFICER ISSUED NOTICE TO THE ASSESSEE REQUIRING HIM TO FURNISH THE DETAILS OF SHARE PREMIUM ACCOUNT WITH NAME AND ADDRESS OF THE ALLOTTEE, FACE VALUE OF THE SHARE, NO. OF SHARE ALLOTTED, COPY OF ALLOTMENT L ETTER ALONGWITH CHEQUE NUMBER AND BANK ADDRESS. 3.1. ON RECEIVING NO PLAUSIBLE REPLY, THE AO ISSUED NOTICE S U/S. 133(6) OF THE ACT TO THE SHARE HOLDERS CALLING UPON THEM TO SUBMIT THE DETAILS RELATING TO THE DIRECTORS OF THE COMPANY, COPIES OF THE RETURN OF INCOME FOR A.Y. 2001 - 02 ALONG WITH COPY OF BANK ACCOUNT. NOTICES ISSUED U/S. 133(6) OF THE ACT IN RESPECT OF THE FOLLOWING PARTIES WERE RETURNED UNSERVED. I) FUN & FOOD PVT. LTD. II) ESCORTS FINVEST PVT. LTD. III) INCHOOK TRACON PVT. LTD. IV) BIMEX EXPORTS PVT. LT D. V) ANTRIKSH COMMERCE PVT. LTD. 3.2. THE AO BROUGHT TO THE NOTICE OF THE ASSESSEE THE UNSERVED NOTICES IN RESPECT OF THE AFOREMENTIONED PARTIES. NOTICES U/S. 133(6) OF THE ACT WERE ONCE AGAIN ISSUED TO THE AFOREMENTIONED PARTIES WHICH WAS RECEIVED BY THEM BUT THE INFORMATION CALLED FOR WAS N OT SUBMITTED. THE AO ITA. NO. 3571/M/2012 3 INFORMED THE ASSESSEE ABOUT HIS INTENTION OF TREATING RS. 35.47 LAKHS AS UNEXPLAINED CASH CREDIT U /S. 68 OF THE ACT. 3.3. ON 8 TH AUGUST, 2006, REPLIES TO THE NOTICES WERE RECEIVED IN TAPAL. M/S. FUN & FOOD PVT. LTD. , CONFIRMED MAKIN G A SHARE APPLICATION OF RS. 5 LAKHS AND UNSECURED LOAN OF RS. 1.30 LAKHS, M/S. INCHOOK TRACON PVT. LTD. CONFIRMED THE BALANCE WITH THE ASSESSEE AMOUNTING TO RS. 1,00,000/ - , M/S. BIMEX EXPORTS PVT. LTD. , CONFIRMED INVESTING SHARE APPLICATION OF RS. 5 LAK HS ON 13.12.2000 AND ANOTHER RS. 5 LAKHS ON 9.2.2001, M/S. ESCORT FINVEST PVT. LTD CONFIRMED INVESTING SHARE APPLICATION OF RS. 5 LAKHS ON 23.2.2001 AND RS. 1.50 LAKHS ON 30.3.2001 AND M/S. ANTRIKSH COMMERCE PVT. LTD. , CONFIRMED THE BALANCE OF RS. 4 LAKHS WITH THE ASSESSEE COMPANY. HOWEVER, THE AO OBSERVED THAT NONE OF THESE PERSONS HAVE GIVEN COPY OF BANK ACCOUNT. THE AO FURTHER OBSERVED THAT ALL THESE COMPANIES WERE CONTROLLED BY PERSONS WHO ARE CONNECTED AND HAVING COMMON ADDRESS. 3.4. ON FURTHER EXAMINING THE BALANCE SHEETS OF ALL THESE COMPANIES, THE AO OBSERVED THAT THERE IS NO MENTION OF INVESTMENTS MADE IN THE ASSESSEE COMPANY. THE AO WAS OF THE FIRM BELIEF THAT THE ASSESSEE HAS NOT DISCHARGED THE ONUS CAST UPON IT BY SEC. 68 OF THE ACT AND TREATED RS. 28.77 LAKHS AS UNEXPLAINED CASH CREDIT U/S. 68 OF THE ACT. 4. AGGRIEVED BY THIS, THE ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT(A) BUT WITHOUT ANY SUCCESS. 5. BEFORE US, THE LD. COUNSEL FOR THE ASSESS EE REITERATED WHAT HAS BEEN SUBMITTED DURING THE ASSESSMENT PROCEEDINGS. IT IS THE SAY OF THE LD. COUNSEL THAT ALL THE NECESSARY DETAILS IN RESPECT OF THE SHARE APPLICATION TRANSACTIONS HAVE BEEN FURNISHED BEFORE THE AO. ALL THE ITA. NO. 3571/M/2012 4 TRANSACTIONS HAVE BEEN DO NE BY ACCOUNT PAYEE CHEQUE, COPIES OF THE BANK STATEMENTS WERE ALSO FURNISHED. THE LD. COUNSEL ONCE AGAIN DREW OUR ATTENTION TO THE DOCUMENTARY EVIDENCES WHICH WERE FURNISHED BEFORE THE LOWER AUTHORITIES AND ARE NOW ONCE AGAIN SUBMITTED BEFORE US IN THE F ORM OF PAPER BOOK. DRAWING OUR ATTENTION TO THE RELEVANT PAGES, THE LD. COUNSEL STATED THAT THE ASSESSEE HAS SUCCESSFULLY DISCHARGED THE ONUS CAST UPON IT BY SEC. 68 OF THE ACT AND THE REVENUE AUTHORITIES HAVE SIMPLY DISBELIEVED WITHOUT BRINGING ANY COGEN T MATERIAL EVIDENCE ON RECORD. STRONG RELIANCE WAS PLACED ON THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF CIT VS LOVELY EXPORT (P) LTD. 216 ITR 195. 6. PER CONTRA, THE LD. DEPARTMENTAL REPRESENTATIVE STRONGLY RELIED UPON THE FINDINGS OF THE AO, CONFIRMED BY THE LD. CIT(A). 7. WE HAVE CAREFULLY PERUSED THE ORDERS OF THE AUTHORITIES BELOW AND WITH THE ASSISTANCE OF THE LD. COUNSEL WE HAVE GONE THROUGH THE RELEVANT DOCUMENTARY EVIDENCES BROUGHT ON RECORD BEFORE US IN THE FORM OF PAPER BOOK. TH E UNDISPUTED FACT IS THAT ALL THE TRANSACTIONS HAVE BEEN DONE THROUGH BANKING CHANNELS DULY CONFIRMED BY THE RESPECTIVE PARTIES, BANK STATEMENTS ARE ALSO FILED ALONGWITH THE INCOME TAX RETURNS OF ALL THE IMPUGNED PARTIES. WE FIND THAT THE ASSESSEE HAS PROD UCED THE CONFIRMATIONS OF ALL THE PARTIES, THEIR INCOME TAX RETURNS HAVE BEEN FILED ALONGWITH COPIES OF BANK STATEMENTS. THE ASSESSEE HAS SUCCESSFULLY DISCHARGED THE ONUS CAST UPON IT. THE RATION LAID DOWN BY THE HONBLE SUPREME COURT IN THE CASE OF LOVE LY EXPORT (SUPRA) SQUARELY APPLY ON THE FACTS OF THE CASE IN HAND WHEREIN THEIR LORDSHIPS HAVE HELD THAT IF THE SHARE APPLICATION MONEY IS RECEIVED BY THE ASSESSEE FROM ALLEGED BOGUS SHAREHOLDERS , WHOSE NAMES ARE GIVEN TO THE AO, THEN THE DEPARTMENT IS ITA. NO. 3571/M/2012 5 FRE E TO PROCEED TO REOPEN THEIR INDIVIDUAL ASSESSMENT IN ACCORDANCE WITH LAW , BUT IT CANNOT BE REGARDED AS UNDISCLOSED INCOME OF THE ASSESSEE. 7.1. THE HONBLE P & H HIGH COURT IN THE CASE OF GP INTERNATIONAL LTD. (2010) 325 ITR 25 HAS HELD THAT MERELY BE CAUSE SOME OF THE PERSONS DID NOT RESPOND TO THE NOTICE ISSUED BY THE AO U/S. 133(6) OF THE ACT, IT COULD NOT BE TAKEN THAT THE TRANSACTION WAS NOT GENUINE. THE AMOUNT COULD NOT BE ADDED AS UNEXPLAINED INCOME IN THE HANDS OF THE ASSESSEE. CONSIDERING THE FACT THAT THE TRANSACTIONS HAVE BEEN DONE THROUGH BANKING CHANNELS DULY CONFIRMED BY THE RESPECTIVE PARTIES WITH SUPPORTING DOCUMENTARY EVIDENCES ON RECORD, IN OUR CONSIDERED OPINION, THE ASSESSEE HAS DISCHARGED THE ONUS. WE, ACCORDINGLY SET ASIDE THE FI NDINGS OF THE LD. CIT(A) AND DIRECT THE AO TO DELETE THE ADDITION OF RS. 28.77 LAKHS. GROUND NO. 1 IS ALLOWED. 8. GROUND NO. 2 RELATES TO THE ADDITION OF RS. 2.50 LAKHS TREATED AS UNEXPLAINED CASH CREDIT U/S. 68 OF THE ACT. 8.1. WHILE SCRUTINIZING THE RETURN OF INCOME, THE AO NOTICED THAT THE ASSESSEE HAS CLAIMED TO HAVE RECEIVED REPAYMENT OF LOANS BY THE FOLLOWING PARTIES: I) SENSEX INVESTMENT PVT. LTD., RS. 2,50,000/ - II) JOTINDRA STEEL & TUBES PVT. LTD RS. 6,19,213/ - III) JINDAL PLASTICS PVT. LTD. RS. 4,5 4,288/ - 8.2. ON RECEIVING NO PLAUSIBLE REPLY OR ANY EVIDENCE IN SUPPORT OF THE CLAIM OF REPAYMENT OF LOANS ADVANCED IN EARLIER YEARS, THE AO MADE THE ADDITION. 9. BEFORE THE LD. CIT(A) THE ASSESSEE FURNISHED NECESSARY EVIDENCES. A REMAND REPORT WAS CALLED BY THE LD. CIT(A). ON RECEIVING THE REMAND ITA. NO. 3571/M/2012 6 REPORT, THE LD. CIT(A) FOUND THAT THE AO HAS VERIFIED AND ACCEPTED THE TRANSACTIONS WITH M/S. JOTINDRA STEEL & TUBES P VT. LTD AND M/S. JINDAL PLASTICS PVT. LTD., BUT DID NOT ACCEPT THE TRANSACTION WITH M/S. SENSEX INVESTMENT PVT. LTD. THE LD. CIT(A) ACCEPTED AND THEREFORE DELETED THE ADDITION OF RS. 6,19,213/ - IN THE NAME OF M/S. JOTINDRA STEEL & TUBES PVT. LTD ., AND RS. 4,54,288/ - IN THE NAME OF M /S. JINDAL PLASTICS PVT. LTD. THE ADDITION OF RS. 2.50 LAKHS IN THE NAME OF M/S. SENSEX INVESTMENT PVT. LTD. WAS CONFIRMED. 9.1. AGGRIEVED BY THIS, THE ASSESSEE IS BEFORE US. 9.2. THE LD. COUNSEL FOR THE ASSESSEE DREW OUR A TTENTION TO THE RELEVANT DOCUMENTARY EVIDENCES PLACED IN THE PAPER BOOK AND STATED THE AMOUNT HAS BEEN RECEIVED ON ACCOUNT OF ADVANCES GIVEN TO THIS PARTY IN EARLIER YEARS. THEREFORE, IT CANNOT BE SAID THAT RS. 2.50 LAKHS IS UNEXPLAINED CASH CREDIT. 9.3 . THE LD. DR SUPPORTED THE FINDINGS OF THE LOWER AUTHORITIES. 9.4. WE HAVE CAREFULLY GONE THROUGH THE RELEVANT DOCUMENTARY EVIDENCES. WE FIND THAT THERE WAS AN OPENING DEBIT BALANCE IN THE ACCOUNT OF M/S. SENSEX INVESTMENT PVT. LTD. AMOUNTING TO RS. 4 LAKHS AND RS. 2.50 LAKHS HAVE BEEN RECEIVED BY THE ASSESSEE ON 27.2.2001 BY ACCOUNT PAYEE CHEQUE AT RS. 8,49,344/ - . SINCE THE AMOUNT HAS BEEN RECEIVED OUT OF THE DEBIT BALANCE SHOWN IN THE OPENING BALANCE, WE DO NOT FIND ANY REASON FOR THE ADDITION AS UNE XPLAINED CASH CREDIT. WE, ACCORDINGLY DIRECT THE AO TO DELETE THE ADDITION OF RS. 2.50 LAKHS. GROUND NO. 2 IS ACCORDINGLY ALLOWED. 10. GROUND NO. 3 RELATES TO THE ADDITION OF RS. 7,76,324/ - AS UNEXPLAINED CASH CREDIT. ITA. NO. 3571/M/2012 7 10.1. DURING THE COURSE OF THE AS SESSMENT PROCEEDINGS, THE AO OBSERVED THAT THE ASSESSEE HAS NOT FILED ANY DETAILS IN RESPECT OF NEW LOANS RECEIVED FROM M/S. UMANG CREDIT CAPITAL LTD. AMOUNTING TO RS. 7,00,000/ - . THE AO FURTHER OBSERVED THAT THE ASSESSEE HAS NOT SUBMITTED DETAILS OF I NTERNAL ACCRUALS OF RS. 76,324/ - . THE AO ADDED RS. 7,76,324/ - AS UNEXPLAINED CASH CREDIT. 10.2. THE ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT(A) BUT WITHOUT ANY SUCCESS. 10.3. BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE STATED THAT ALL THE DETAIL S RELATING TO THE CREDIT IN THE NAME OF M/S. UMANG CREDIT CAPITAL LTD. HAS BEEN FURNISHED ALONGWITH THE AUDITED STATEMENT OF ACCOUNTS ACCOMPANIED COPY OF THE INCOME TAX RETURN WITH CONFIRMATION. THE LD. COUNSEL FURTHER BROUGHT OUR NOTICE THE OBSERVATION S OF THE AO IN HIS REMAND REPORT DT. 15.2.2010. IT IS THE SAY OF THE LD. COUNSEL THAT THE ASSESSEE HAS DISCHARGED THE ONUS AND THEREFORE THE ADDITION DESERVES TO BE DELETED. 10.4. THE LD. DR COULD NOT ADD ANYTHING NEW TO THE ORDERS OF THE REVENUE AUTHOR ITIES. 11. WE HAVE GIVEN A THOUGHTFUL CONSIDERATION TO THIS ISSUE AND HAVE CAREFULLY PERUSED THE REMAND REPORT OF THE AO AND THE DOCUMENTARY EVIDENCES. WE FIND THAT IN HIS REMAND REPORT, THE AO HAS ACCEPTED THAT TRANSACTIONS HAVE BEEN DONE BY ACCOUNT PA YEE CHEQUE. THE AO HAS ALSO OBSERVED IN HIS REMAND REPORT THAT THE TRANSACTIONS HAVE BEEN CONFIRMED BY THE SAID PARTY. THE AO ALSO OBSERVED THAT THE AMOUNT IS REFLECTED IN THE BANK STATEMENT. THE AO LEFT THE DECISION ON THE DISCRETION OF THE LD. ITA. NO. 3571/M/2012 8 CIT(A) THOUGH THE LD. CIT(A) HAS CONFIRMED THE ADDITION. AFTER CAREFULLY PERUSING THE DOCUMENTARY EVIDENCES, WE FIND THAT THE ASSESSEE HAS SUCCESSFULLY DISCHARGED THE ONUS CAST UPON IT, THEREFORE, WE DO NOT FIND ANY REASON IN MAKING THE ADDITION OF RS. 7,76,324/ - . WE, ACCORDINGLY SET ASIDE THE FINDINGS OF THE LD. CIT(A) AND DIRECT THE AO TO DELETE THE ADDITION OF RS. 7,76,324/ - . GROUND NO. 3 IS ACCORDINGLY ALLOWED. 12. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. OR DER PRONOUNCED IN THE OPEN COURT ON 8 TH JU LY , 2015 SD/ - SD/ - ( A.D. JAIN ) (N.K. BILLAIYA) /JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI ; DATED : 8 TH JU LY , 2015 . . ./ RJ , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . / BY ORDER, //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI