TARACHAND M KUMAWAT, MUMBAI V. ITO 3(4), THANE

ITA 414/MUM/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 3346 (ITAT-MUMBAI)
• Duration Of Justice: 7 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-09-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 04-04-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 28-01-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B S BIST
• Assessee Lawyers: S SRIRAM
• Section: 133(6); 131; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D, BENCH MUMBAI BEFORE SHRI B.R.BASKARAN, AM & SHRI PAWAN SIN GH, JM ITA NO.414/MU M/2016 (ASSESSMENT YEAR: 2009-10) SHRI TARACHAND KUMAWAT, 702-LOTUS-B, VALLEY OF FLOWERS, THAKUAR VILLAGE, BEHIND GOKUL CONCORD TOWERS, KANDIVALI (E), MUMBAI - 400101, VS. ITO 3(4), THANE. PAN/GIR NO.: AECPB6203Q ( APPELLANT ) .. ( RESPONDENT ) ITA NO.415/MU M/2016 (ASSESSMENT YEAR: 2009-10) VEENA T KUMAWAT 702-LOTUS-B, VALLEY OF FLOWERS, THAKUAR VILLAGE, BEHIND GOKUL CONCORD TOWERS, KANDIVALI (E), MUMBAI - 400101, VS. ITO 3(4), THANE. PAN/GIR NO.: AMYPK5904 ( APPELLANT ) .. ( RESPONDENT ) ASSESSEE BY : SHRI S.SRIRAM (AR) REVENUE BY : SHRI B. S. BIST (SR.DR) DATE OF HEARING : 28/07/2016 DATE OF PRONOUNCEMENT: 07/09/2016 O R D E R PER PAWAN SINGH, JM: 1. THESE TWO APPEALS ARE FILED BY TWO ASSESSES, WHO A RE HUSBAND AND WIFE, AGAINST COMMON ORDER OF CIT(A)-2, THANE DATED 18.12.2015. I N BOTH THE APPEALS, THE ASSESSES RAISED THE IDENTICAL GROUND OF APPEAL THAT CIT(A) ERRED IN CONFIRMING THE ADDITION OF UNSECURED LOANS. AS COMMON GROUNDS OF A PPEAL ARE RAISED IN BOTH THE APPEALS, BOTH THE APPEALS WERE CLUBBED, HEARD TOGET HER AND ARE BEING DECIDED BY A COMMON ORDER. FACTS OF ITA NO. 414/M/16. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE FILED RETURN OF INCOME FOR RELEVANT AY ON 14.02.2010 DECLARING TOTAL INCOME OF RS. 1,88,31 6/-. THE RETURN OF INCOME WAS SELECTED FOR SCRUTINY. WHILE FRAMING ASSESSMENT OR DER, THE AO OBSERVED THAT DURING THE YEAR UNDER CONSIDERATION THE ASSESSEE PU RCHASED A HOUSE FOR CONSIDERATION OF RS. 40,00,000/-. THE ASSESSEE WAS ASKED TO PROVIDE THE SOURCE OF INVESTMENT IN THE SAID HOUSE. THE ASSESSEE SUBMITTE D HIS REPLY DATED 18.11.2011 ITA NOS.414 & 415/M/16 SHRI TARACHAND KUMAWAT & ANR 2 AND CONTENDED THAT HE HAS TAKEN A LOAN OF RS. 13,45 ,000/- FROM 18 PERSONS (CREDITORS). THE AO ISSUED LETTER TO ALL PERSON A ND AFTER MAKING ENQUIRIES, THE AO CONCLUDED THAT ASSESSEE COULD NOT PROVE THE CREDITW ORTHINESS AND GENUINENESS OF 9 CREDITORS WHO HAD GIVEN THE LOANS OF RS. 9,60,000/- . THUS, OUT OF LOAN OF RS. 13,45,000/-, A SUM OF RS. 9,60,000/- WAS ADDED U/S. 68 OF THE ACT, IN THE INCOME OF ASSESSEE. AGGRIEVED BY THE ORDER OF AO, THE ASSESSE E FILED AN APPEAL BEFORE THE CIT(A) BUT WITHOUT ANY SUCCESS. FACT OF ITA NO.415/M/2016 SIMILARLY, THE ASSESSEE IN ITA NO. 415/M/16, WHILE FRAMING ASSESSMENT, THE AO ASKED THE ASSESSEE TO PROVE THE GENUINENESS OF A LO AN OF RS. 5,24,000/- FROM ONE SMT. PURNIMA. THE ASSESSEE FURNISHED THE CONFIRMAT ION FROM THE CREDITOR. THE ASSESSEE WAS AGAIN ASKED TO PRODUCE BANK ACCOUNT, I .T. RETURNS AND A CREDITWORTHINESS OF THE PERSON. THE AO ISSUED NO TICE U/S 133(6) THROUGH REGISTERED AD TO THE CREDITOR BUT NO RESPONSE WAS R ECEIVED, THUS THE LOAN AMOUNTING TO RS. 5,24,000/- WAS ADDED U/S 68 OF THE ACT IN THE INCOME OF ASSESSEE. AGGRIEVED BY THE ORDER OF AO, THE ASSESSEE FILED AP PEAL BEFORE THE CIT(A). THUS, BOTH THE APPEALS WERE HEARD BY CIT(A) AND DECIDED B Y A COMMON ORDER IMPUGNED IN BOTH THE APPEALS. 3. WE HAVE HEARD THE LD AUTHORISED REPRESENTATIVE (AR ) OF THE ASSESSEE AND LD DEPARTMENTAL REPRESENTATIVE (DR) FOR REVENUE AND PE RUSED THE MATERIAL AVAILABLE ON RECORD. AR OF THE ASSESSEE ARGUED THAT DURING TH E RELEVANT AY, THE ASSESSEE PURCHASED A FLAT IN KANDIVALI FOR A TOTAL CONSIDERA TION OF RS. 42,38,000/- IN JOINT NAME WITH HIS WIFE SMT. VEENA T. KUMAWAT (APPELLANT IN ITA NO. 415/M/16). THE ASSESSEE ARRANGED LOAN FROM HIS RELATIVES AND F RIENDS. BEFORE THE AO, THE ASSESSEE FURNISHED NECESSARY CONFIRMATION FROM 18 C REDITORS. THE AO DISPUTED THE CREDITWORTHINESS AND GENUINENESS OF LOAN FROM 9 CRE DITORS OF RS. 9,60,000/-. THE ASSESSEE FURTHER FURNISHED THE CONFIRMATION LETTER FROM ALL THE CREDITORS WHICH INCLUDE SHRI MADANLAL (FATHER OF ASSESSEE), NILESH VARMA, PURNIMA, PURANMAL, MAHESH KUMAR, JAGDISH PRASAD, BABULAL, GANESH LAL A ND MAHADEV PRASAD. THE AO DESPITE GIVING SUFFICIENT EVIDENCE ABOUT THE GEN UINENESS OF TRANSACTION AND CREDITWORTHINESS OF THE CREDITOR AND IDENTITY OF T HE CREDITORS ADDED THE LOAN AMOUNT U/S 68 OF THE ACT IN THE INCOME OF ASSESSEE. THE AR OF ASSESSEE FURTHER ARGUED THAT ASSESSEE IN ITA NO. 415/M/16 ALSO AVAIL ED LOAN OF RS. 5.24 LACS FROM ONE SMT. PURNIMA PRAJAPATI. THE ASSESSEE FILED CONF IRMATION OF CREDITOR ALONG WITH ITA NOS.414 & 415/M/16 SHRI TARACHAND KUMAWAT & ANR 3 DETAILS OF CASH BOOK. TO PROVE THE CREDITWORTHINESS OF SMT. PURNIMA PRAJAPATI, THE ASSESSEE FILED COPY OF APPOINTMENT LETTER/CONTRACT FOR SPECIAL SERVICES OF SMT. PURNIMA WITH KOTAK MAHINDRA BANK. THE ASSESSEE FURT HER FURNISHED A COPY OF DETAILS OF COMPENSATION/SALARY PACKAGE OF SMT. PURN IMA PRAJAPATI ALONG WITH COPY OF BANK STATEMENT OF HDFC BANK. LD. AR OF ASSESSEE ARGUED THAT DESPITE GIVING SUFFICIENT DOCUMENTARY EVIDENCES, THE AO INSTEAD OF CONSIDERING THE GENUINENESS OF TRANSACTION AND CREDITWORTHINESS OF THE CREDITOR , ADDED THE AMOUNT OF LOAN IN THE INCOME OF ASSESSEE U/S 68 OF THE ACT. THE IDENTITIE S OF THE CREDITORS WERE NOT DISPUTED BY THE AO. ON THE OTHER HAND, LD. LD DR FOR REVENUE STRONGLY SUPPORTED THE ORDER OF AUTHORITIES BELOW. 4. WE HAVE CONSIDERED THE RIVAL CONTENTIONS OF THE PAR TIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE AO, ON THE BASIS OF ENQUIR Y TREATED THE UNSECURED LOAN OF RS. 9,60,000/- OUT OF TOTAL LOAN OF RS. 13,45,000/- AS UNEXPLAINED DETAILS OF WHICH HAS BEEN REFERRED IN PARAGRAPH NO. 3 OF ITS ORDER. DURING THE APPELLANT PROCEEDING, THE CIT(A) SOUGHT THE REMAND REPORT ON FURNISHING T HE CONFIRMATION BY SHRI NILESH VARMA ALONG WITH HIS INCOME-TAX RETURN, COPY OF BANK PASSBOOK. CONFIRMATION OF SMT. GULABI DEVI WIFE OF SHRI MADAN LAL KUMAWAT, CONFIRMATION OF PURNIMA PRAJAPATI, CONFIRMATION FROM JAGDISH PRA SAD, BABULAL, GANESHLAL, NILESH VARMA. IN THE REMAND REPORT, THE AO REFERR ED THAT NILESH VERMA FILED HIS REPLY IN TAPAL ON 25.06.2015 AND NOT ATTENDED THE P ROCEEDINGS PERSONALLY. FOR MADANLAL KUMAWAT (FATHER OF ASSESSEE/CREDITOR), ASS ESSEE SUBMITTED THAT HIS FATHER HAS EXPIRED AND ASSESSEE IS UNABLE TO FURNISH THE B ANK PASSBOOK. FOR SMT. PURNIMA PRAJAPATI, THE AO REFERRED THAT SMT. PURNIM A PRAJAPATI FILED HER PAN CARD, EXTRACT OF BANK PASSBOOK AND APPOINTMENT LETT ER FROM ING VYSYA LIFE INSURANCE, PAY-IN-SLIP OF LOAN CONFIRMATION. ON S UMMONING U/S 131 OF THE ACT, SHE DID NOT PERSONALLY ATTEND THE PROCEEDINGS. HOWE VER, THE AO REFERRED THAT ON PERUSAL OF BANK STATEMENT THAT THERE WERE MAJOR CAS H DEPOSIT IN AND AROUND ON THE DATES WHEN CHEQUES WERE ISSUED IN FAVOUR OF ASSESSE E OR ASSESSEES WIFE AND FOR REMAINING UNSECURED LOAN OF RS. 1,20,000/-, THE AO REFERRED THAT EXCEPT THE COPY OF VOTER ID/PAN CARD AND REFERRED THAT THE CREDITOR S COULD NOT PROVE THE GENUINENESS OF CASH DEPOSIT IN THEIR SUBMISSIONS. S IMILARLY, IN CASE OF VEENA T. KUMAWAT, A REMAND REPORT WAS SOUGHT FROM ITO/AO. IN REMAND REPORT THE AO REFERRED THAT SHE HAD FILED COPY OF PAN CARD, EXTRA CT OF BANK PASSBOOK, APPOINTMENT LETTER OF HER EMPLOYER, PAY-IN-SLIP AND LOAN CONFIRMATION. THE AO REFERRED THAT THOUGH REPLY WAS FILED BY THE CREDITO R BUT CREDITOR DID NOT ATTEND THE ITA NOS.414 & 415/M/16 SHRI TARACHAND KUMAWAT & ANR 4 PROCEEDING PERSONALLY AND CONCLUDED IN HIS REPORT T HAT PERUSAL OF BANK STATEMENT, THE MAJOR CASH DEPOSIT IN HER ACCOUNT WERE IN AND A ROUND ON THE DATES WHICH CHEQUES WERE ISSUED IN FAVOUR OF THE ASSESSEE. WE HAVE NOTICED THAT IN CASE OF TARACHAND (ASSESSEE IN ITA NO. 414/M/16) THE MAJOR LOAN TRANSACTION OF RS. 25,00,000/- FROM MADANLAL, WHO IS FATHER OF ASSESSEE AND FROM NILESH VARMA, RS. 5,50,000/- AND REST OF THE CREDIT ARE VERY MEAGER AMOUNT I.E. RS. 20,000/- EACH FROM SIX PERSO N AND RS. 40,000/- FROM PURNIMA PRAJAPATI. SHRI NILESH VARMA HAS GIVEN THE CONFIRMATION-CUM-DECLARATION DECLARING THAT HE HAD GIVEN A LOAN OF RS. 5,50,000/ - TO THE ASSESSEE THROUGH CHEQUES, DETAILS OF WHICH IS REFERRED IN CONFIRMATI ON LETTER. WHICH ARE DULY SUPPORTED BY THE COPY OF BANK STATEMENT OF ASSESSEE . THE REVENUE AUTHORITIES HAVE NOT DISPUTED THE TRANSACTION THROUGH BANKING CHANNE L. THE OTHER MAJOR AMOUNT WAS TAKEN FROM MADANLAL, WHO HAPPENS TO BE FATHER OF TH E ASSESSEE WHOSE DEATH OF CERTIFICATE IS PLACED ON RECORD. MOTHER OF ASSESSEE (WIFE OF MADANLAL) FILED A CONFIRMATION LETTER THAT HER HUSBAND GAVE RS. 2,50, 000/- TO HER SON TO PURCHASE A HOUSE. SMT. PURNIMA PRAJAPATI ALSO GAVE A CONFIRMAT ION LETTER ALONG WITH HIS PAN NUMBER A LOAN OF RS. 40,000/-. REST OF THE LOAN AMO UNT FOR REMAINING SIX PERSONS ARE VERY MEAGER AMOUNT OF RS. 20,000/- EACH. CONSID ERING THE PECULIARITY OF FACT, THAT MAJOR AMOUNT WAS GIVEN BY NILESH VARMA THAT TO O THOUGH BANKING TRANSACTION. THE MAJOR DOUBT OF THE REVENUE IS THAT THERE WAS NO MAJOR CASH DEPOSIT IN THE BANK ACCOUNT OF NILESH VARMA AND THE CASH WERE DEPOSITED IN AND AROUND ON THE DATES WHEN CHEQUES WERE ISSUED IN FAV OUR OF THE ASSESSEE. THE IDENTITIES OF ANY OF THE CREDITORS WERE NOT DISPUTE D BY THE REVENUE. THE ASSESSEE PROVED THE GENUINENESS OF TRANSACTION AND THE CREDI TWORTYNESS OF THE CREDITORS BY WAY OF DOCUMENTARY EVIDENCES. AS PER OUR CONSIDE RED VIEW, THE MERE SUSPICION FOR DEPOSIT OF AMOUNT IN THE ACCOUNT OF CREDITOR CA NNOT BE A BASIS FOR REJECTING THE CONFIRMATION WHICH DULY SUPPORTED AND CORROBORATED BY DOCUMENTARY EVIDENCES OF BANKING TRANSACTION, THUS, THE ADDITION OF RS. 5,50 ,000/- IS DELETED. THE OTHER MAJOR AMOUNT OF RS. 2,50,000/- WAS GIVEN BY THE FAT HER OF ASSESSEE. THE FATHER OF ASSESSEE WAS EMPLOYED, THOUGH NOT INCOME-TAX ASSESS EE. THE TRANSACTION OF RS. 2,50,000/- WHICH WAS MADE BY CREDITOR(FATHER) FOR P URCHASE OF HOUSE CAN ALSO NOT BE DOUBTED. THUS, THIS AMOUNT IS ALSO DELETED FROM THE ADDITION U/S 68 OF THE ACT. REMAINING AMOUNT ARE VERY MEAGER AMOUNT AND ALL THE CREDITOR GAVE THEIR CONFIRMATION LETTER, KEEPING IN VIEW THE SMALLNESS AMOUNT WHICH WAS ITA NOS.414 & 415/M/16 SHRI TARACHAND KUMAWAT & ANR 5 ARRANGED/BORROWED BY ASSESSEE FOR ACQUIRING THE HOU SE IS ALSO DELETED FROM THE ADDITION U/S 68 OF THE ACT. 5. SIMILARLY SMT. VEENA KUMAWAT AVAILED A LOAN OF RS. 5,54,000/- FROM SMT. PURNIMA PRAJAPATI. SMT. PURNIMA PRAJAPATI WAS EMPLO YED IN KOTAK MAHINDRA BANK. THE ASSESSEE AVAILED THE LOAN THROUGH ACCOUNT PAYEE CHEQUE, DETAILS OF WHICH WERE PROVIDED BY CREDITOR IN HIS CONFIRMATION LETTER. AS PER DETAILS (PAGE NO. 42 OF PB), THE ASSESSEE FILED THE DETAILS OF CA SH-BOOK MAINTAINED BY CREDITOR. THE CREDITORS WERE EMPLOYED IN BANK, THUS, THE ASSE SSEE PROVED THE CREDITWORTHINESS OF CREDITOR, GENUINENESS OF TRANSA CTION AND IDENTITY OF THE CREDITOR. THE REVENUE AUTHORITY HAS NOT DISPUTED TH E IDENTITY OF THE CREDITOR AND THE BANKING TRANSACTION. THE CREDITORS WERE EMPLOYE D IN A BANK, THUS IN OUR CONSIDERED OPINION, CREDITWORTHINESS OF CREDITOR CA NNOT BE DOUBTED. IN OUR OPINION THE ASSESSEE PROVED THE IDENTITY OF CREDITOR, CREDI TWORTHY AND GENUINENESS OF TRANSACTION. THUS, THE ADDITION MADE BY AO AND CON FIRMED BY THE CIT(A) FOR RS. 5,24,000/- MADE U/S 68 OF THE ACT AGAINST THE ASSES SEE IS DELETED. 6. IN THE RESULT, BOTH THE APPEALS FILED BY THE ASSESS EE ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 07/09 /2016. SD/- SD/- (B.R.BASKARAN) (PAWAN SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI; DATED : 07/09/2016 SK, PS COPY OF THE ORDER FORWARDED TO : / BY ORDER, / (ASSTT. REGISTRAR) , / ITAT, MUMBAI 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A), MUMBAI. 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE. //TRUE COPY/