ITO 20(1)(2), MUMBAI V. ANITA PRAVINKUMAR BHANSALI, MUMBAI

ITA 4149/MUM/2016

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 9947 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 8 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-03-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2010-2011
• Appeal Filed On: 17-06-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M V RAJGURU
• Assessee Lawyers: V C SHAH
• Keywords: Unexplained cash credit; Additional evidence
• Section: 133(6); 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL F BENCH, MUMBAI BEFORE SHRI B.R. BASKARAN (AM) & SHRI RAVISH SOOD( JM) I.T.A. NO. 4149/MUM/2016 (ASSESSMENT YEAR 2010-11 ) ITO 20(1)(1) 1 ST FLOOR, ROOM NO. 124 PIRMAL CHAMBERS LALBAUG, PAREL MUMBAI-400 012. VS. SMT. ANITA PRAVINKUMAR BHANSALI FLAT NO. 804/B, PRATIKSHA TOWER R.S. NIMKAR MARG MUMBAI-400 008. PAN : AERPB2132F (APPELLANT) (RESPONDENT) ASSESSEE BY SHRI V.C. SHAH DEPARTMENT BY S HRI M.V. RAJGURU DATE OF HEARING 1 6 . 2 . 201 8 DATE OF PRONOUNCEMENT 16.3.2018 O R D E R PER B.R. BASKARAN (AM) :- THE REVENUE HAS FILED THIS APPEAL CHALLENGING THE O RDER DATED 10-03- 2016 PASSED BY LD CIT(A)-32, MUMBAI AND IT RELATES TO THE ASSESSMENT YEAR 2010-11. THE REVENUE HAS RAISED FOLLOWING GROUNDS: - 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LEARNED CIT(A) ERRED IN ADMITTING ADDITIONAL EVIDEN CE IN CONTRAVENTION OF RULE 46A NOTWITHSTANDING THE FACT THAT THE ASSES SEE HAD FAILED TO SUBMIT THE RELEVANT DETAILS AT THE TIME OF ASSESSME NT PROCEEDINGS. 2. THE APPELLANT PRAYS THAT THE LEARNED CIT(A) ON THE ABOVE GROUNDS BE REVERSED AND THAT OF THE ASSESSING OFFICER BE RESTO RED. 2. WE HEARD THE PARTIES AND PERUSED THE RECORD. THE MAIN GROUND RAISED BY THE REVENUE IS THAT THE LD CIT(A) HAS ADMITTED A DDITIONAL EVIDENCE IN CONTRAVENTION OF RULE 46A OF THE I.T RULES. 3. THE AO HAS MADE THE ADDITION U/S 68 OF THE ACT IN RESPECT OF LOANS TAKEN FROM FOLLOWING TWO PARTIES:- M/S DEV DIAMONDS - RS.3,95,00,000/- M/S PACIFIC DIAMONDS - RS.1,50,00,000/- SMT. ANITA PRAVINKUMAR BHANSALI 2 DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO ASKED THE ASSESSEE TO FURNISH COPIES OF RETURN OF INCOME FILED BY THE ABO VE SAID PARTIES ALONG WITH ACKNOWLEDGEMENT AND THEIR BANK ACCOUNTS. THE ASSES SEE DID NOT FURNISH THE SAME. HENCE THE AO ISSUED NOTICES TO THE ABOVE SAI D PARTIES U/S 133(6) OF THE ACT CALLING FOR THE ABOVE SAID DETAILS. HOWEVE R NO REPLY CAME FROM THE ABOVE SAID PARTIES TILL THE DATE FIXED BY THE AO, I .E, TILL 14.03.2013. HENCE THE AO ASKED THE ASSESSEE TO FURNISH THE DETAILS AND PR ODUCE THE PARTIES ON 22.03.2013. IN RESPONSE THERETO, THE ASSESSEE SOUG HT SOME MORE TIME, BUT COULD NOT PRODUCE THE PARTIES. IN THE MEAN TIME, T HE ASSESSING OFFICER RECEIVED LETTERS FROM BOTH THE PARTIES ENCLOSING TH EREIN COPIES OF INCOME TAX RETURNS, COPIES OF PART OF BANK STATEMENTS. THE AO NOTICED THAT SHRI DEBANGSU N BOSE IS THE PROPRIETOR OF M/S DEV DIAMON DS AND SHRI KAMLESH DHAMMANI IS THE PROPRIETOR OF M/S PACIFIC DIAMONDS. THE FIRST PERSON HAD DECLARED A TOTAL INCOME OF RS.3,90,970/- AND THE SE COND PERSON HAD DECLARED A TOTAL INCOME OF RS.8,09,830/-. ON PERUSAL OF THE BANK ACCOUNTS, THE AO NOTICED THAT THERE WERE MONEY TRANSFERS FROM OTHER ACCOUNTS BEFORE ISSUING CHEQUES TO THE ASSESSEE. UNDER THESE SET OF FACTS, THE AO TOOK THE VIEW THAT THE ASSESSEE HAS FAILED TO PROVE THE GENUINENESS OF LOANS AND CREDIT WORTHINESS OF THE PARTIES. THE AO ALSO TOOK THE VIE W THAT THE IDENTITY OF THE PARTIES WAS ALSO NOT ESTABLISHED. THE AO ALSO PLAC ED RELIANCE ON THE DECISIONS RENDERED BY HONBLE SUPREME COURT IN THE CASE OF SUMATI DAYAL (214 ITR 801) AND DURGA PRASAD MORE (82 ITR 540). ACCORDINGLY HE ASSESSED BOTH THE LOANS AGGREGATING TO RS.5,45,00,000/- AS I NCOME OF THE ASSESSEE U/S 68 OF THE ACT. 4. BEFORE LD CIT(A), THE ASSESSEE FURNISHED ADD ITIONAL EVIDENCES, WHICH CONSISTED OF FINANCIAL STATEMENTS OF THE TWO PARTIE S, BANK STATEMENTS, COPY OF BANK ACCOUNTS, THEIR IT RETURNS AND CONFIRMATION OB TAINED FROM THOSE PARTIES. THE LD CIT(A) FORWARDED THEM TO THE AO FO R HIS COMMENTS, VIDE HIS OFFICER LETTER DATED 15-04-2014. IN RESPONSE THERE TO, THE AO SUBMITTED HIS DETAILED REPORT ON 13.11.2015 TO LD CIT(A). BEFORE LD CIT(A), THE ASSESSEE HAD SUBMITTED THAT THE ADDITION OF RS.5.45 CRORES M ADE BY THE AO INCLUDED SMT. ANITA PRAVINKUMAR BHANSALI 3 TWO CHEQUES OF RS.47.00 LAKHS AND RS.43.00 LAKHS AG GREGATING TO RS.90.00 LAKHS RECEIVED BY THE ASSESSEE, BUT THEY HAVE BEEN DISHONOURED. ACCORDINGLY IT WAS SUBMITTED THAT THE ABOVE SAID SUM OF RS.90.0 0 LAKHS IS NOT LIABLE TO BE ASSESSED U/S 68 OF THE ACT. IN THE REMAND REPORT, THE AO SUBMITTED THAT THE ASSESSEE DID NOT MAKE ANY SUCH CLAIM OF DISHONOR OF CHEQUES BEFORE HIM DURING THE COURSE OF ASSESSMENT PROCEEDINGS. THE A O ALSO REPORTED THAT HE COULD NOT COMMENT ON DOCUMENTS, SINCE THEY WERE NOT AVAILABLE WITH THE LETTER DATED 24.03.2015 ISSUED BY LD CIT(A). THERE AFTER, THE LD CIT(A) DELETED THE ADDITIONS UPON EXAMINING VARIOUS DOCUME NTS FURNISHED BY THE ASSESSEE. AGGRIEVED, THE REVENUE HAS FILED THIS AP PEAL CONTENDING THAT THERE IS VIOLATION OF RULE 46A OF THE ACT. 5. THE LD D.R SUPPORTED THE GROUNDS URGED BY TH E REVENUE. THE LD A.R, ON THE CONTRARY, SUBMITTED THAT THE ASSESSEE HAS RE LEVANT DOCUMENTS AND ALSO OTHER DOCUMENTS OBTAINED FROM THE ASSESSING OF FICER OF THE RESPECTIVE CREDITORS BY FILING APPLICATION UNDER RTI ACT. HE SUBMITTED THAT THE LD CIT(A) FORWARDED THE DOCUMENTS INITIALLY FURNISHED BY HIM ALONG WITH HIS LETTER DATED 15-04-2014. THEREAFTER, IT APPEARS THAT THE L D CIT(A) HAS ISSUED ANOTHER LETTER ON 24.03.2015. HE SUBMITTED THAT TH E RESPECTIVE LOAN CREDITORS HAVE ALSO FORWARDED THE DETAILS CALLED FO R BY THE AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS. IN THE REMAND RE PORT, THE ASSESSING OFFICER HAS EXPRESSED HIS VIEWS ON THE SUBMISSIONS MADE BY THE ASSESSEE IN RESPECT OF DISHONOURED CHEQUES BUT STATED THAT THE DOCUMENTS WERE NOT ATTACHED IN THE LETTER DATED 24.3.2015, WHILE THE D OCUMENTS WERE DULY FORWARDED BY LD CIT(A), VIDE HIS LETTER DATED 15.04 .2014 AS MENTIONED IN THE ORDER OF LD CIT(A). HE SUBMITTED THAT ALL THESE FA CTS WOULD SHOW THAT THE DOCUMENTS WERE FORWARDED BY LD CIT(A) AND WERE EXAM INED BY THE AO. ACCORDINGLY HE SUBMITTED THAT THERE IS NO VIOLATION OF PROVISIONS OF RULE 46A OF THE I T RULES. THE LD A.R FURTHER SUBMITTED THA T THE ASSESSING OFFICER OF THE RESPECTIVE CREDITORS HAS ALSO CONFIRMED THAT TH E LOAN GIVEN TO THE ASSESSEE IS REFLECTED IN THE BALANCE SHEET OF THE L ENDERS. HE SUBMITTED THAT THE ASSESSEE HAS RECEIVED THE LOANS THROUGH BANKING CHANNELS AND HAS SMT. ANITA PRAVINKUMAR BHANSALI 4 REPAID THEM ALONG WITH INTEREST IN THE NEXT YEAR. HE SUBMITTED THAT THE LD CIT(A) HAS EXAMINED THE CONTENTIONS OF THE ASSESSEE AS WELL AS THE DOCUMENTS THOROUGHLY AND ACCORDINGLY CONCLUDED THAT THE ADDITION MADE BY THE AO WAS NOT WARRANTED. ACCORDINGLY HE CONTENDED THAT THE ORDER PASSED BY LD CIT(A) DOES NOT CALL FOR ANY INTERFERENCE. 6. WE HEARD THE PARTIES AND PERUSED THE RECORD . WE NOTICE THAT THE LD CIT(A) HAS RECORDED IN PARAGRAPH 4 OF HIS ORDER THA T HE HAS FORWARDED THE ADDITIONAL EVIDENCES FURNISHED BY THE ASSESSEE TO T HE ASSESSING OFFICER THROUGH HIS OFFICE LETTER DATED 15-04-2014. WE NOT ICE THAT THE AO HAS FURNISHED HIS REPORT ON 13.11.2015, WHEREIN THE AO IS REFERRING TO LETTER DATED 24.03.2015 ISSUED BY LD CIT(A). THE AO HAS S TATED THAT THE DOCUMENTS WERE NOT ENCLOSED IN THE LETTER DATED 24. 03.2015. HOWEVER, WE NOTICE THAT THE LD CIT(A) HAS FORWARDED THE ADDITIO NAL EVIDENCES ON 15.4.2014 ITSELF. THE OBSERVATIONS SO MADE BY LD C IT(A) HAVE NOT BEEN PROVED TO BE INCORRECT BY THE REVENUE. THESE FACTS , IN OUR VIEW, SHOW THAT THE LD CIT(A) HAS DULY CONFRONTED THE ADDITIONAL EV IDENCES WITH THE ASSESSING OFFICER. IN FACT, AS RIGHTLY POINTED OUT BY LD A.R , THE ASSESSING OFFICER HAS OFFERED HIS COMMENTS ABOUT THE CLAIM OF THE ASSESSE E ON DISHONOURED CHEQUES, BUT DID NOT COMMENT ON THE EVIDENCES BY ST ATING THAT THEY WERE NOT ENCLOSED IN THE SUBSEQUENT LETTER. SINCE THE LD CI T(A) HAS FORWARDED THE ADDITIONAL EVIDENCES THROUGH HIS LETTER DATED 15.4. 2014 TO THE AO, WE ARE OF THE VIEW THAT THERE IS NO VIOLATION OF RULE 46A AS ALLEGED BY THE REVENUE. 7. ON MERITS, WE NOTICE THAT THE LD CIT(A) HAS GR ANTED RELIEF TO THE ASSESSEE BY DULY EXAMINING THE DETAILS THAT WERE FURNISHED B Y THE ASSESSING OFFICER. FOR THE SAKE OF CONVENIENCE, WE EXTRACT BELOW THE D ECISION RENDERED BY LD CIT(A):- 6. DECISION: I HAVE CAREFULLY CONSIDERED THE MATTER. GROUND 1& 3 ARE GENERAL IN NATURE REQUIRING NO SPECIFIC ADJUDICATIO N ON MY PART. THE ONLY EFFECTIVE GROUND IS AGAINST THE ACTION OF THE AO IN ADDING THE LOANS AVAILED BY THE APPELLANT AS UNEXPLAINED CASH CREDIT S. I FIND THAT THE AO HAS DONE SO HOLDING THAT THE IDENTITY, CREDITWORTHI NESS AND GENUINENESS OF THE TRANSACTION HAVE NOT BEEN PROVED. HOWEVER FR OM THE EVIDENCE PART SMT. ANITA PRAVINKUMAR BHANSALI 5 FILED BEFORE THE AO AS WELL AS THE ADDITIONAL EVIDE NCE FILED BEFORE ME, THE FACTS INDICATE OTHERWISE. THE APPELLANT HAS FILED T HE FINANCIALS OF THE LOAN CREDITORS, THEIR IT RETURNS, PAN NOS, BANK ACCOUNT STATEMENTS AND ALSO CONFIRMATIONS FROM THESE TWO PARTIES. ALL THESE DOC UMENTS INDICATE THAT THE LOANS HAVE BEEN ADVANCED TO THE APPELLANT BY TH ESE TWO PARTIES. THE LOANS ARE THROUGH BANKING CHANNELS, INTEREST HAS BE EN PROVIDED FOR BY THE APPELLANT AND ALSO ACCOUNTED FOR AS INCOME BY T HESE PARTIES. THE IDENTITY IS PROVED BEYOND DOUBT AS THE LOAN CREDITO RS HAVE VALID PAN NOS, AND HAVE FILED THEIR RETURNS ALSO. THE GENUINENESS OF TRANSACTION IS LINKED TO THE CREDITWORTHINESS OF THESE TWO PARTIES. THE A O HAS A GRIEVANCE ABOUT THE CREDIT WORTHINESS OF THESE TWO PARTIES ON THE GROUNDS THAT THE INCOME RETURNED BY THEM IS A FEW LAKHS WHILE THE LO ANS ADVANCED IS A FEW CRORES. MORE SPECIFICALLY, I SEE FROM THE BALAN CE SHEET OF PACIFIC DIAMONDS PROP KAMLESH DHAMMANI THAT THE APPELLANT A PPEARS ON THE ASSET SIDE UNDER THE HEAD LOANS & ADVANCES FOR THE AMOUNT OF PRINCIPAL LOAN AND OUTSTANDING INTEREST. MR KAMLESH DHAMMANI HAS ALSO GIVEN A SIGNED LOAN CONFIRMATION SHOWING THE DETAILS OF THE TRANSACTIONS. THE AO HAS A GRIEVANCE ON THE INCOME RETURNED BY PACIFIC D IAMOND. THE AO HAS EXAMINED ONLY THE' NET PROFIT OF PACIFIC DIAMOND. I FIND FROM THE P&L A/C FILED THAT PACIFIC DIAMOND HAS DECLARED A GROSS INT EREST RECEIVED OF RS 89.31 LAKHS. IT CANNOT THEREFORE BE SAID THAT THE C REDITWORTHINESS OF PACIFIC DIAMONDS IS NOT PROVED. 6.1 SIMILARLY, WITH REGARD TO THE OTHER LOAN CREDIT OR, DEV DIAMOND PROP DEBANGSU N BOSE, IT IS SEEN THAT THE TRANSACTION IS THROUGH BANKING CHANNEL, HE HAS FILED HIS RETURN AS WELL AS SUBMITT ED A CONFIRMATION OF TRANSACTIONS INCLUDING RETURN OF CHEQUES FOR WANT O F INSUFFICIENT FUNDS. IN ANY CASE, THESE CHEQUES RETURNED ARE NOT RELEVANT T O THE CONTROVERSY AT HAND. GOING FURTHER IN THIS MATTER I FIND THAT THE APPELLANT MADE AN RTI APPLICATION TO THE AO OF DEV DIAMOND, REQUESTING FO R THE FOLLOWING INFORMATION:- ' I) IS THE ABOVE MENTIONED PERSON ASSESSEE TO TAX? II) IF YES, KINDLY LET ME KNOW WHETHER HE HAS S HOWN INTEREST INCOME OF RS. 25,24,750/- IN HIS COMPUTATION ON LOAN GRANTED TO ME IN THE F. Y. 2009-10 III) THE CLOSING BALANCE OF MY LOAN ACCOUNT IN HIS BALANCE SHEET ON MARCH, 31,2010. IV) THE CURRENT ADDRESS AS PER RECORDS, V) COPY OF RETURN OF INCOME, COMPUTATION AND COPY O F PROFIT AND LOSS A/C AND BALANCE SHEET & SCHEDULE OF LOAN GIVEN AS PER THE BALANCE SHEET' SMT. ANITA PRAVINKUMAR BHANSALI 6 THE AO INITIALLY DENIED THE SAME HOWEVER THE APPEAL UNDER RTI WAS PARTLY ALLOWED FURNISHING THE INFORMATION AS UNDER: - I) YES, HE IS ASSESSED TO TAX WITH ITO WARD2(3)( 7), SURAT. II) YES, THE HAS SHOWN INTEREST INCOME OF RS , 1,24,19,027/-. HOWEVER, AS THERE ARE NO BREAK UP OF INTEREST INCOM E SUBMITTED BY THE ASSESSEE TO THE DEPARTMENT, THE SAME IS NOT AVAILABLE WITH THE DEPARTMENT. III) THE CONFIRMATION OF LOAN SIGNED BY THE APPLICANT SM T. ANITA PRAVINKUMAR BHANSALI AND SAME SUBMITTED BY THE ASSE SSEE DURING THE COURSE OF ASSESSMENT PROCEEDINGS IS MENTIONED B ELOW: INTEREST AMOUNT OF RS. 25,24,750/- & OUTSTANDING LO AN AMOUNT OF RS. 3,30,24,750/-WERE ALSO SHOWN IN THE PROFIT & LO SS A/C. AND ANNEXURE FORMING PART OF BALANCE SHEET UNDER THE HE AD OF LOAN & ADVANCES. IV) THE CURRENT ADDRESS OF THE ASSESSES AS PER R ECORDS IS 210, SUPARSHAVA BUILDING, THODA SHERI, MAHIDHARPURA, SUR AT. V) THE DETAILS CALLED BY THE APPLICANT LIKE COP Y OF RETURN OF INCOME, COMPUTATION AND COPY OF PROFIT & LOSS A/C. BALANCE SHEET & SCHEDULE OF LOAN GIVEN AS PER THE BALANCE SHEET CAN NOT BE PROVIDED AS THE SAID INFORMATION IS THE THIRD PARTY INFORMATION AND NOT IN LARGER PUBLIC INTEREST AS DEFINED U/S. 8(L)( L) OF THE RTI ACT, 2005. FROM THE ABOVE IT COULD BE SEEN THAT THE PROP OF DE V DIAMONDS IS DECLARING GROSS INCOME OF RS 1,24,19,027 WHICH INCL UDES THE INTEREST FROM THE APPELLANT OF RS 25,24,750. THE GRIEVANCE O F THE AO THAT DEBGANSU N BOSE IS A MAN OF NO MEANS IS THEREFORE N EGATED. ON AN ANALYSIS OF THE FACTS AS ABOVE, IT IS CLEAR THAT AL L INGREDIENTS OF SEC 68 HAVE BEEN SATISFIED. THE EXISTENCE OF THE TWO PERSO NS GIVING LOANS IS PROVED, THEIR CREDITWORTHINESS IS PROVED AND SO IS THE GENUINENESS OF THE TRANSACTION IN LIGHT OF THEIR EMPHATIC CONFIRMATION S. I ALSO FIND THAT THE AO IN HIS REMAND REPORT HAS NOT COMMENTED ON THESE ISS UES WHICH ARE GERMANE TO THE ADDITIONS MADE. INSTEAD THE AO HAS F OCUSED ON SOME CHEQUES WHICH WERE RETURNED FROM DEV DIAMONDS WHICH IN ANY CASE IS NOT RELEVANT TO THE CONTROVERSY AT HAND. IN THE LIG HT OF THE FACTS AND DISCUSSION ABOVE, I HOLD THAT THE LOANS AVAILED BY THE APPELLANT ARE GENUINE AND THEREFORE CANNOT BE ADDED U/S 68. 1 THE REFORE DELETE THE ADDITION OF RS 5,45.00,000. 7. IN THE RESULT, THE APPEAL IS ALLOWED. SMT. ANITA PRAVINKUMAR BHANSALI 7 8. ON A CAREFUL PERUSAL OF THE ORDER PASSED BY LD CIT(A), WE ARE OF THE VIEW THAT THE LD CIT(A) HAS PASSED A REASONED ORDER BY D ULY CONSIDERING THE EVIDENCES FURNISHED BY THE ASSESSEE. THE IMPUGNED LOANS HAVE ALSO BEEN CONFIRMED BY THE RESPECTIVE ASSESSING OFFICER OF TH E LENDERS. UNDER THESE SET OF FACTS, WE ARE OF THE VIEW THAT THE ORDER PASSED BY LD CIT(A) DOES NOT CALL FOR ANY INTERFERENCE. IN VIEW OF THE DISCUSSIONS M ADE IN THE FOREGOING PARAGRAPHS, WE ARE OF THE VIEW THAT THERE IS NO VIO LATION OF RULE 46A AS ALLEGED BY THE REVENUE. ACCORDINGLY WE REJECT THE GROUNDS URGED BY THE REVENUE IN THIS REGARD. 9. IN THE RESULT, THE APPEAL FILED BY THE REVEN UE IS DISMISSED. ORDER HAS BEEN PRONOUNCED IN THE COURT ON 16.3. 2018. SD/- SD/- (RAVISH SOOD) (B.R.BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI; DATED : 16/3/2018 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// ( SENIOR PRIVATE SECRETARY) PS ITAT, MUMBAI