SHRI. RAJEEV S SONKAR , Mumbai V. ACIT 26(2), Mumbai

ITA 3748/MUM/2019

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 5189 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 3 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-09-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2013-2014
• Appeal Filed On: 29-05-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Unexplained investment; Opportunity of being heard; Additional evidence; Corroborative evidences; FORM 26AS
• Section: 68

Judgement Text

1 ITA 3748/MUM/2019 IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY (JUDICIAL MEMBER) AND SHRI RAJESH KUMAR (ACCOUNTANT MEMBER) I.T.A. NO.3748/MUM/2019 (ASSESSMENT YEAR 2013-14) SHRI RAJEEV S SONKAR PROP OF M/S DYNAMIC REALTY VENTURES, UNIT NO.9/10, SRISHTI PLAZA SAKI VIHAR ROAD, POWAI, MUMBAI-400 076 PAN : AFMPS2688M VS ACIT 26(2), MUMBAI APPELLANT RESPONDENT APPELLANT BY SHRI NARESH JAIN, AR RESPONDENT BY SHRI BHARAT ANDHLE, DR DATE OF HEARING 02-09-2021 DATE OF PRONOUNCEMENT 27-09-2021 O R D E R PER SAKTIJIT DEY (JM) THIS IS AN APPEAL BY THE ASSESSEE AGAINST ORDER DA TED 11-12-2018 OF LEARNED COMMISSIONER OF INCOME-TAX (APPEALS)-38, MUMBAI FOR THE ASSESSMENT YEAR 2013- 14. 2. THE DISPUTE IN THE PRESENT APPEAL IS CONFINED TO ADDITION MADE OF RS.1,40,00,000/- AS UNEXPLAINED INVESTMENT UNDER SE CTION 68 OF THE ACT. 2 ITA 3748/MUM/2019 3. BRIEFLY THE FACTS ARE, THE ASSESSEE IS A RESIDEN T INDIVIDUAL AND STATED TO BE ENGAGED IN THE BUSINESS OF BUILDERS AND DEVELOPERS. FOR THE ASSESSMENT YEAR UNDER DISPUTE ASSESSEE FILED HIS RETURN OF INCOME O N 29-09-2013 DECLARING TOTAL INCOME OF RS.55,33,950/-. IN COURSE OF ASSESSMENT P ROCEEDINGS, THE ASSESSING OFFICER, WHILE VERIFYING THE RETURN OF INCOME AND O THER DOCUMENTS AVAILABLE ON RECORD, NOTICED THAT THE ASSESSEE HAS SHOWN UNSECUR ED LOANS FROM A NUMBER OF PARTIES. HE, THEREFORE, CALLED UPON THE ASSESSEE TO FURNISH LOAN CONFIRMATIONS AND INCOME-TAX RETURN COPIES OF LENDERS. AS OBSERVED BY THE ASSESSING OFFICER, THE ASSESSEE FURNISHED CONFIRMATIONS FROM SOME OF THE L ENDERS AND EXPRESSED HIS INABILITY TO FURNISH THEIR INCOME-TAX RETURN COPIES . FURTHER, THE ASSESSEE REQUESTED THE ASSESSING OFFICER TO CALL FOR THE INC OME-TAX RETURN COPY AND CONFIRMATION IN RESPECT OF LENDERS IN WHOSE CASE SU CH DOCUMENTS ARE UNAVAILABLE. THE ASSESSING OFFICER, ACCORDINGLY, SENT NOTICES TO THE CONCERNED LOAN CREDITORS. AS MENTIONED BY THE ASSESSING OFFICER, SOME LOAN CREDI TORS VIZ. SHRI RAJNEESH DHAWAN AND SMT. YAMINI BHAT DID NOT FURNISH THE REQ UIRED DOCUMENTS. THE ASSESSING OFFICER OBSERVED, THROUGH INITIAL DEPARTM ENTAL ENQUIRY IT WAS FOUND THAT THE CONCERNED INDIVIDUALS HAVE NOT FILED THEIR INCO ME-TAX RETURNS. THUS, ULTIMATELY, THE ASSESSING OFFICER TREATED LOAN RECE IVED OF RS.1 CRORE FROM SHRI RAJNEESH DHAWAN AND RS. 40 LAKHS FROM SMT. YAMINI BH AT AS UNEXPLAINED CASH CREDIT UNDER SECTION 68 OF THE INCOME-TAX ACT, 1961 AND ADDED TO THE INCOME OF THE ASSESSEE. THOUGH, THE ASSESSEE CONTESTED THE AF ORESAID ADDITIONS BEFORE LEARNED COMMISSIONER (APPEALS); HOWEVER, THE ADDITI ONS WERE SUSTAINED. 4. LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED, THE ASSESSEE IS AN ERSTWHILE EMPLOYEE OF AIR INDIA AND THE CONCERNED LENDERS ARE CLOSELY KNOWN TO HIM. HE SUBMITTED, SINCE THE ASSESSEE REQUIRED FUNDS FOR HI S OWN BUSINESS ACTIVITY, HE 3 ITA 3748/MUM/2019 AVAILED THE LOANS FROM THE CONCERNED PARTIES. DISPU TING THE ALLEGATIONS OF THE ASSESSING OFFICER AND LEARNED COMMISSIONER (APPEALS ), LEARNED COUNSEL SUBMITTED, THE ASSESSEE HAS NOT ONLY FURNISHED THE CONFIRMATIO NS BUT HAS ALSO FURNISHED VARIOUS OTHER DOCUMENTARY EVIDENCES BEFORE THE ASSE SSING OFFICER AND LEARNED COMMISSIONER (APPEALS). HE SUBMITTED, BEFORE THE FI RST APPELLATE AUTHORITY THE ASSESSEE FURNISHED CONFIRMATIONS OF THE LENDERS, PR OOF OF LOAN TRANSACTION THROUGH BANKING CHANNEL, BANK STATEMENT, ETC. FOR P ROVING THE GENUINENESS OF THE LOAN TRANSACTION. HE SUBMITTED, WITHOUT PROPERLY VE RIFYING THE ADDITIONAL EVIDENCES, LEARNED COMMISSIONER (APPEALS) REJECTED T HEM ON TECHNICAL GROUNDS. FURTHER, THE LEARNED COUNSEL SUBMITTED, AFTER DISPO SAL OF THE APPEAL THE ASSESSEE ON HIS OWN EFFORTS HAS GATHERED MORE EVIDENCES TO E STABLISH THE GENUINENESS OF LOAN TRANSACTION, WHICH HE WANTS TO FURNISH BY WAY OF ADDITIONAL EVIDENCE. IN THIS CONTEXT, HE DREW OUR ATTENTION TO LETTER DATED 23-0 8-2021 REQUESTING FOR ADMISSION OF ADDITIONAL EVIDENCE ALONGWITH THE EVID ENCES SOUGHT TO BE FURNISHED. DRAWING OUR ATTENTION TO THE VARIOUS DOCUMENTS FURN ISHED IN THE PAPER BOOK, LEARNED COUNSEL SUBMITTED, NOT ONLY THE IDENTITY OF THE CREDITORS HAS BEEN ESTABLISHED, BUT THEIR CREDITWORTHINESS HAS ALSO BE EN PROVED. HE SUBMITTED, SINCE THE ENTIRE LOAN TRANSACTION WAS CONDUCTED THROUGH B ANKING CHANNEL, THE GENUINENESS CANNOT ALSO BE DOUBTED. PROCEEDING FURT HER, HE SUBMITTED, SHRI RAJNEESH DHAWAN WAS AN EX EMPLOYEE OF AIR INDIA AND KNOWN TO THE ASSESSEE. HE SUBMITTED, NOT ONLY HE HAS CONFIRMED THE LOAN TRANS ACTION, BUT HAS ALSO BEEN ABLE TO OBTAIN BANK STATEMENT OF THE LENDER DEMONSTRATIN G AVAILABILITY OF FUNDS. HE SUBMITTED, THE ASSESSEE HAS AVAILED THE LOAN FROM R AJNEESH DHAWAN AT A MONTHLY INTEREST RATE OF 0.75%. HE SUBMITTED, THE ASSESSEE HAS NOT ONLY PAID THE INTEREST TO THE LENDER, BUT HAS ALSO DEDUCTED TAX AT SOURCE. AS FAR AS SMT. YAMINI BHAT IS 4 ITA 3748/MUM/2019 CONCERNED, LEARNED COUNSEL SUBMITTED, SHE IS A RESI DENT OF UAE AND THE LOAN AMOUNT HAS BEEN RECEIVED THROUGH BANKING CHANNEL BY WAY OF INWARD REMITTANCE. HE FURTHER SUBMITTED, THE SAID LENDER HAS ALSO CONF IRMED THE LOAN TRANSACTION WITH THE ASSESSEE. THUS, HE SUBMITTED, THERE IS NO REASON TO TREAT THE LOAN AVAILED AS UNEXPLAINED CASH CREDIT. 5. THE LEARNED DEPARTMENTAL REPRESENTATIVE, STRONGL Y RELYING UPON THE OBSERVATIONS OF THE ASSESSING OFFICER AND LEARNED C OMMISSIONER (APPEALS) SUBMITTED, BEFORE THE DEPARTMENTAL AUTHORITIES THE ASSESSEE HAD FAILED TO FURNISH SUPPORTING EVIDENCE TO ESTABLISH THE CREDITWORTHINE SS OF THE LENDERS AND GENUINENESS OF THE TRANSACTION. HOWEVER, HE SUBMIT TED, SINCE THE ASSESSEE HAS FURNISHED ADDITIONAL EVIDENCES BEFORE LEARNED COMMI SSIONER (APPEALS) AND THE TRIBUNAL, WHICH HAVE NEVER BEEN EXAMINED, THE ISSUE MAY BE RESTORED TO THE ASSESSING OFFICER FOR VERIFYING THE DOCUMENTARY EVI DENCES AND DECIDING THE ISSUE AFTER ENQUIRY. 6. IN REJOINDER, LEARNED COUNSEL FOR THE ASSESSEE SU BMITTED, SINCE THE ADDITIONAL EVIDENCES WERE NOT ADMITTED BY LEARNED C OMMISSIONER (APPEALS), THE ISSUE MAY BE RESTORED BACK TO HIS FILE FOR VERIFYIN G THEM AND DECIDING THE ISSUE ON MERIT. 7. WE HAVE CONSIDERED RIVAL SUBMISSIONS AND PERUSED MATERIALS ON RECORD. UNDISPUTEDLY, THE ASSESSEE HAS AVAILED LOAN OF RS.1 CRORE FROM RAJNEESH DHAWAN AND RS.40 LAKHS FROM YAMINI BHAT. IT IS THE CASE OF THE ASSESSEE THAT RAJNEESH DHAWAN IS AN OLD ACQUAINTANCE AS BOTH OF THEM WORKE D IN AIR INDIA. THE ASSESSEE HAS ALSO SUBMITTED THAT YAMINI BHAT IS ALSO CLOSELY KNOWN TO HIM. THERE IS NO DISPUTE THAT THE LOAN AMOUNTS HAVE BEEN RECEIVED BY THE ASSESSEE THROUGH BANKING CHANNEL. IT IS ALSO A FACT ON RECORD THAT T HE ASSESSEE HAS FURNISHED 5 ITA 3748/MUM/2019 DOCUMENTARY EVIDENCES TO ESTABLISH THE IDENTITY OF THE CREDITORS. EVEN, LOAN CONFIRMATIONS FROM THE CONCERNED CREDITORS HAVE BEE N FURNISHED BEFORE THE FIRST APPELLATE AUTHORITY. HOWEVER, LEARNED COMMISSIONER (APPEALS) HAS REFUSED TO TAKE COGNIZANCE OF THE SAME AS THEY WERE NOT PRODUC ED BEFORE THE ASSESSING OFFICER. BEFORE US ALSO THE ASSESSEE HAS FURNISHED FRESH DOCUMENTARY EVIDENCES BY WAY OF ADDITIONAL EVIDENCE. 8. ON PERUSAL OF THE BANK STATEMENT OF RAJNEESH DHAW AN IT IS OBSERVED THAT HE WAS HAVING SUFFICIENT FUND AVAILABLE IN THE BANK ACCOUNT BY WAY OF ENCASHMENT OF FIXED DEPOSITS TO ADVANCE LOAN TO THE ASSESSEE. IT IS ALSO OBSERVED THAT THE ASSESSEE HAS AVAILED THE LOAN OF RS.1 CRORE FROM RA JNEESH DHAWAN ON INTEREST CHARGEABLE @0.75% P.M AND THE ASSESSEE, WHILE PAYIN G SUCH INTEREST HAS ALSO DEDUCTED TAX AT SOURCE. FURTHER, IT IS OBSERVED, YA MINI BHAT HAS FILED HER RETURN OF INCOME FOR ASSESSMENT YEAR 2016-17 ON 23-01-2017. H OWEVER, IT IS A FACT ON RECORD THAT THE BANK STATEMENT OF RAJNEESH DHAWAN AN D THE TAX CREDIT CERTIFICATE IN FORM 26AS AS WELL AS THE INCOME-TAX RETURN COPY OF SMT. YAMINI BHAT ARE BEING FILED FOR THE FIRST TIME BEFORE THIS TRIBUNAL AS AD DITIONAL EVIDENCE. 9. THOUGH, PRIMA FACIE, IT APPEARS THAT BOTH THE LO AN CREDITORS ARE HAVING CREDITWORTHINESS AND ARE CAPABLE OF ADVANCING THE L OANS TO THE ASSESSEE; HOWEVER, THE ADDITIONAL EVIDENCES REQUIRE FACTUAL V ERIFICATION. CONSIDERING THE FACT THAT THE ADDITIONAL EVIDENCES SOUGHT TO BE FUR NISHED BEFORE US WILL HAVE A CRUCIAL BEARING ON DECIDING THE DISPUTED ISSUE, WE ARE INCLINED TO ADMIT THEM. HOWEVER, SINCE THE DEPARTMENTAL AUTHORITIES DID NOT HAVE AN OPPORTUNITY TO VERIFY THEM, ADHERING TO THE RULES OF NATURAL JUSTIC E, THE DEPARTMENTAL AUTHORITIES HAVE TO BE GIVEN AN OPPORTUNITY TO VERIFY THEM. IT IS ALSO A FACT ON RECORD THAT CERTAIN ADDITIONAL EVIDENCES FURNISHED BEFORE LEARN ED COMMISSIONER (APPEALS) 6 ITA 3748/MUM/2019 WERE NOT ACCEPTED PURELY ON TECHNICAL GROUND. IN VI EW OF THE AFORESAID, WE ARE INCLINED TO RESTORE THE ISSUE TO THE FILE OF LEARNE D COMMISSIONER (APPEALS) FOR NOT ONLY CONSIDERING THE ADDITIONAL EVIDENCES FILED BEF ORE HIM BUT ALSO BEFORE US, AS WELL. WE FURTHER DIRECT LEARNED COMMISSIONER (APPEA LS) TO CONDUCT ADEQUATE ENQUIRY BASED ON THE ADDITIONAL EVIDENCES, EITHER B Y HIMSELF, OR GET IT DONE THROUGH THE ASSESSING OFFICER BY WAY OF REMAND PROC EEDINGS. BASED ON SUCH ENQUIRY, LEARNED COMMISSIONER (APPEALS) MUST DECIDE THE ISSUE THROUGH A SPEAKING ORDER AFTER DUE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. GROUNDS ARE ALLOWED FOR STATISTICAL PURPOSE. 8. IN THE RESULT, APPEAL IS ALLOWED, FOR STATISTICA L PURPOSE. ORDER PRONOUNCED ON 27/09/2021. SD/- SD/- (RAJESH KUMAR) (SAKTIJIT DEY) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DT : 27/09/2021 PAVANAN COPY TO : 1. APPELLANT 2. RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) 5. THE DR, ITAT, MUMBAI 6. GUARD FILE /TRUE COPY/ BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI