Shri Ashfaq Haji Yusuf Noorani, Surat V. The ACIT, Circle-5, Surat

ITA 407/AHD/2016

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 1856 (ITAT-SURAT)
• Duration Of Justice: 2 year(s) 10 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-01-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2011-2012
• Appeal Filed On: 22-02-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SMITHA V NAIR
• Keywords: Unexplained cash credit; Principle of natural justice; Reasonable cause
• Section: 68; 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SURAT BENCH ES, SURAT BEFORE: SHR I RAJPAL YADAV , JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER ASHFAQ HAJI YUNUS NOORANI, (PROP. MAY CORPORATION), PLOT NO. 1, ABDULLAH PARK SOC., B/H ZAINAB HOSPITAL, BESIDES: MASKAN ROW HOUSE, GORAT - RGORAT - RANER ROAD, SURAT - 395009 PAN: AAOPN6148A (APPELLANT) VS THE ACIT, CIRCLE - 5 , SURA T (RESPONDENT) ASSESSEE BY : S H RI HIREN R. VEPARI , A . R. REVENUE BY : SMT. SMITHA V. NAIR, SR. D.R. DATE OF HEARING : 16 - 11 - 2 018 DATE OF PRONOUNCEMENT : 18 - 01 - 2 019 / ORDER P ER : AMARJIT SINGH, ACCOUNTANT MEMBER : - THIS ASSESSEE S APPEAL FOR A.Y. 2011 - 12 , ARI SES FROM ORDER OF THE CIT(A) - 1, SURAT DATED 22 - 01 - 2 016 , IN PROCEEDINGS UNDER SECTION 143(3) OF THE INCOME TA X ACT, 1961; IN SHORT THE ACT . I T A NO. 407 / A HD/20 16 A SS ESSMENT YEAR 2011 - 12 I.T.A NO. 407 /AHD/20 16 A.Y. 2011 - 12 PAGE NO ASHFAQ HAJI YUNUS NOORANI VS. ACIT 2 2. THE ASSESS EE HAS RAISED FOLLOWING GROUNDS OF APPEAL: - (I) ADDITION U/S.68 RS. 19,78,376: (1) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND AS PER LAW, THE LEARNED COMMISSIONER OF INCOME - TAX (APPEALS) ERRED IN CONFIRMING ADDITION U/S.68 IN RESPECT OF DEPOS ITS MADE AS UNDER: GULAMBHAI PROP. A.G. FASHION RS. 1,50,000 PARI FASHION RS.18,28,376 (2) THE APPELLANT SUBMITS THAT SINCE THE APPELLANT HAS FURNISHED NECESSARY EVIDENCE REGARDING IDENTITY, GENUINENE SS AND CREDITWORTHINESS OF THE ABOVE DEPOSITS, THERE WAS NO JUSTIFICATION FOR THE LEARNED COMMISSIONER OF INCOME - TAX (APPEALS) TO CONFIRM. (3) THE LEARNED COMMISSIONER OF INCOME - TAX (APPEALS), THOUGH POINTED OUT TO HIM THE JUDGEMENT OF GUJARAT HIGH COUR T IN CASE OF RANCHHODBHAI JIVABHAI NAKHAVA (208 - TAXMAN - 35) REQUIRING THE ASSESSING OFFICER FIRST TO VERIFY THE FACTS FROM THE INCOME - TAX RETURN OF THE CREDITORS AND THEN SUMMON THE LENDERS DID NOT ACCEPT IT. (II) DISALLOWANCE OUT OF MOBILE EXPENSES: ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND AS PER LAW AND ON THE BASIS OF THE QUANTUM OF BUSINESS, THE LEARNED COMMISSIONER OF INCOME - TAX (APPEALS) OUGHT TO HAVE DELETED DISALLOWANCE OF RS. 12,805/ - BEING 20% OF MOBILE EXPENSES OF RS. 64,025/ - 3. T HE FACTS IN BRIEF IS THAT THE ASSESSEE HAS FILED RETURN OF INCOME DECLARING LOSS OF RS. 2 , 34 , 48 , 812/ - ON 28 TH SEP, 2011. SUBSEQUENTLY, THE CASE WAS SELECTED UNDER SCRUTINY BY ISSUING OF NOTICE U/S. 143(2) OF THE ACT ON 19 TH SEP, 2012. DURING THE COURSE OF ASSESSMENT , THE ASSESSING OFFICER NOTICED THAT ASSESSEE HAS CLAIMED UNSECURED LOAN FROM 42 PERSONS DURING THE YEAR UNDER CONSIDERATION. THE ASSESSING OFFICER STATED THAT ASSESSEE HAS FURNISHED DETAILS OF LENDERS IN RESPECT OF 40 PERSONS. HOWEVER, TH E ASSESSEE HAS FAILED TO FILE DETAILS IN RESPECT OF THREE LENDERS I.E. IN THE CASE OF SHRI GULABBHAI , PROPRIETOR OF A.G. FASHION THE ASSESS EE HAS SHOWN LOAN OF RS. 1,50,0 00/ - AND FROM M/S. FASHION PARI, T HE ASSESSEE HAS SHOWN UNSECURED LOAN OF RS. 182837 6/ - AND I N RESPECT OF B HAK TI TRADERS, T HE ASSESSEE HAS SHOWN LOAN OF RS. 2 LACS DURING THE YEAR UNDER CONSIDERATION. THE ASSESSING OFFICER STATED THAT ASSESSEE HAS FAILED TO SUBMIT ANY DETAIL IN RESPECT OF LOAN OBTAINED FROM M/S. B H AKTI TRADERS. HE HAS FURTHER STATED THAT IN RESPECT OF LOAN OBTAINED FROM OTHER TWO LENDERS SHRI GULAMBHAI AND M/S. PARI FASHI ON, T HE ASSESSEE HAS FAILED TO FURNISH INFORMATION OF BANK STATEMENT , BALANCE SHEET RETURN OF INCOME ETC . TO PROVE THE CREDITWORTHINESS AND GENUINENE SS OF I.T.A NO. 407 /AHD/20 16 A.Y. 2011 - 12 PAGE NO ASHFAQ HAJI YUNUS NOORANI VS. ACIT 3 THE LENDERS. CONSEQUENTLY, THE ASSESSING OFFICER HAS MADE ADDITION U/S. 68 OF THE ACT . 4. AGGRIEVED ASSESSEE HAS FILED APPEAL BEFORE THE LD. CIT(A). THE LD. CIT(A) HAS SUSTAINED THE ADDITION FROM THESE TWO LENDERS TO THE EXTENT OF R S. 21 , 78 , 376/ - AS UNEXPLAINED CASH CREDIT. THE ASSESSEE PREFERRED APPEAL BEFORE ITAT AGAINST THE DECISION OF LD.CIT(A) IN RESPECT UNSECURED LOAN OBTAINED FROM SHI GULAMBHAI PROPRIETARY OF A.G. FASHION TO THE AMOUNT OF RS. 1,50,000/ - AND ANOTHER UNSECURED LOAN OF R S. 18 , 28 , 376/ - OBTAINED FROM M/S. PARI FASHION. 5. DURING THE APPELLATE PROCEEDINGS BEFORE US, THE LD. COUNSEL HAS FURNISHED PAPER BOOK CO NTAINING DETAIL OF INFORMATION FURNISHED BEFORE THE ASSESSING OFFICER AND LD. CIT(A) DURING THE COURSE OF ASSESSM ENT AND APPELLATE PROCEEDINGS INCLUDING THE TEXT OF JUDICIAL DECISION. HE HAS CONTENDED T HAT LD. CIT(A) HAS ERRED IN SUSTAINING THE ADDITION MADE BY T H E ASSESSING OFFICER BY NOT CONSIDERING THE INFORMATION AS CONFIRMATION, COPY OF RETURN OF INCOME PAN ETC . SUBMITTED DURING THE COURSE OF ASSESSMENT AND APPELLATE PROCEEDINGS BEFORE LD. CIT(A) . ON THE OTHER HAND, THE LD. DEPARTMENTAL REPRESENTATIVE HAS SUPPORTED THE ORDER OF LD. CIT(A) . 6 . WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECO RD CAREFULLY . THE ASSESSEE HAS FILED TWO GROUNDS OF APPEAL AGAINST THE ORDER OF LD. CIT(A) DATED 22/01/2016. THE ASSESSEE HAS NOT PRESSED THE GROUND OF APPEAL RELATING TO DISALLOWANCE OF RS. 12 , 805/ - BEING 20% OF THE MOBILE EXPENSES. THEREFORE, THE SAM E IS DISMISSED AS WITHDRAWN. THE I.T.A NO. 407 /AHD/20 16 A.Y. 2011 - 12 PAGE NO ASHFAQ HAJI YUNUS NOORANI VS. ACIT 4 REMAINING GROUND OF APPEAL IS RELATING TO THE SOLITARY ISSUE O F ADDITION MADE U/S. 68 OF THE ACT IN RESPECT OF DEPOSIT RECEIVED FROM THE FOLLOWING TWO DEPOSITORS: - (I) GULAMBHAI PROP. A.G. FASHIION RS. 1,50,000/ - (II) PAR I FASHION RS. 18,28,376/ - AT T HE ASSESSMENT , THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAD OBTAINED UNSECURED LOAN F R O M 42 PERSONS DURING THE YEAR UNDER CONSIDERATION. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSSESSEE HA S SUBMITTED TH E REQUIRED DETAIL IN RESPECT OF 40 PERSONS OUT OF THE 42 PERSONS FROM WHOM THE UNSECURED LOAN S WERE ACCEPTED. HOWEVER IN RESPECT OF THE TWO PERSONS AS CITED ABOVE IN THIS ORDER , THE ASSESSEE HAS FAILED TO FURNISH THE DETAILS REGARDING BANK STATEMENT , BALA NCE S H EET , RETURN OF INCOME ETC. TO PROVE THE CREDITWORTHINESS AND GENUINENESS OF T H E TRANSACTIONS BEFORE THE ASSESSING OFFICER. IN THIS CONNECTION, IT IS NOTICED THAT VIDE LETTER DATED 27 TH MAY, 2014, THE ASSESSEE HAS PLEADED BEFORE THE LD. CIT(A) THAT T HE THESE TWO LENDERS WERE ASKING SOME TIME TO FURNISH THE REQUIRED INFORMATION THEREFORE HE HA D FURNISHED THE INFORMATION ALONG WITH CONFIRMATION DURING THE COURSE OF APPELLATE PROCEEDINGS BEFORE THE LD. CIT(A) AND MADE REQUEST TO ADMIT THE SAME AS ADDIT IONAL EVIDENCES UNDER RULE 46A OF THE IT RULE, 1962. THE LD. CIT(A) HAS CALLED REMAND REPORT F R O M THE ASSESSING OFFICER ON THE ADDITIONAL INFORMATION OBTAINED FROM THE ASSESSEE IN RESPECT O F UNSECURED LOAN OBTAINED FROM THE AFORESAID TWO PARTIES. T HE ASSESSING OFFICER REPORTED THAT THE SUMMONS WERE ISSUED TO BOTH THE PARTIES AND NEITHER OF THEM HAVE ATTENDED HIS OFFICE ON THE APPOINTED DATE AND NOR FILED ANY LETTER SEEKING ADJOURNMENT . HE E CONCLUDE D THAT BOTH THE DEPOSITORS HAVE FAILED TO COMPLY AN D IN THE ABSENCE OF RELEVANT DETAILS THE I.T.A NO. 407 /AHD/20 16 A.Y. 2011 - 12 PAGE NO ASHFAQ HAJI YUNUS NOORANI VS. ACIT 5 CREDITWORTHINESS AND GENUINENESS OF THE LENDER S COULD NOT BE ESTABLISHED. WE HAVE GONE THROUGH THE INFORMATION AVAILABLE ON THE RECORD AND NOTICED THAT THE AFORESAID SUMMONS WERE ISSUED ON 12 TH JAN, 2016 AND SERV ED UPON THE TWO LENDERS ON 13 TH JAN, 2016 REQUIRING TO FURNISH THE VARIOUS DETAILS OF EARLIER PERIOD BY 18 TH JAN, 2016 BY THE ASSESSING OFFICER . T HE ASSESSEE HAS BROUGHT TO THE NOTICE TO THE LD. CIT(A) THAT 14 TH AND 15 TH JAN, 2016 WERE HOLIDAYS AND ON 16 TH & 17 TH JAN, 2016 THE OFFICE OF THE CONSULTANTS WERE CLOSED, THEREFORE, WITHIN SHORT PERIOD OF TIME THE DETAILS REQUIRED BY THE ASSESSING OFFICER COULD NOT BE FURNISHED. THE ASSESSEE HAS PLEADED THAT GIVING A SHORT TIME AMOUNTS TO DENIAL OF NATURAL JUSTICE AND HAS REQUESTED TO PROVIDE ONE MORE OPPORTUNITY TO MAKE THE NECESSARY COMPLIANCE . AFTER CONSIDERING THE ABOVE MATERIAL FACTS, WE OBSERVE THAT THERE APPEARED TO BE A REASONABLE CAUSE AS THE ASSESSEE COULD NOT GET ADEQUATE TIME TO MAKE COMPLIANCE BECAUSE OF HOLIDAYS THE OFF ICE OF THE CONSULTANT REMAINED CLOSED. IN THE LIGHT OF THE ABOVE FACTS IN THE INTEREST OF JUSTICE, WE AR E OF T HE VIEW THAT IT WILL BE APPROPRIATE TO RESTORE THIS ISSUE TO THE FILE OF THE ASSESSING OFFICER FOR DECIDING AFRESH AFTER AFFORDING ADEQUATE OPPORTUNITY TO THE ASSESSEE. 7 . IN THE RESULT , THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES . ORDER PR ONOUNCED IN THE OPEN C OURT ON 18 - 01 - 201 9 SD/ - SD/ - ( RAJPAL YADAV ) ( AMARJIT SINGH ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD : DATED 18 /01/2019 I.T.A NO. 407 /AHD/20 16 A.Y. 2011 - 12 PAGE NO ASHFAQ HAJI YUNUS NOORANI VS. ACIT 6 / COPY OF ORDER FORWARDED TO: - 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FIL E. BY ORDER/ , / ,