M/s Bright Construction, Jamnagar V. Asstt. Commr. of Income Tax, Circle-3, Jamnagar.

ITA 441/RJT/2017

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 4928 (ITAT-RAJKOT)
• Duration Of Justice: 1 year(s) 5 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-05-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2013-2014
• Appeal Filed On: 07-12-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: HIMANSHU AGRAWAL
• Section: 143(3); 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH, RAJKOT BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER & SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER ./ I.T.A. NO. 441/RJT/2017 ( ASSESSMENT YEAR : 2013-14) M/S. BRIGHT CONSTRUCTION 366, 3 RD FLOOR, KUBER AVENUE, GURUDAWARA ROAD, JAMNAGAR / VS. ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE-3, JAMNAGAR ./ ./ PAN/GIR NO. : AAJFB9545L ( APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : MR. HIMANSHU AGRAWAL, A.R. / RESPONDENT BY : MR. PRAVEEN VERMA, SR. D.R. DATE OF HEARING 08/05/2019 !'# / DATE OF PRONOUNCEMENT 31/05/2019 / O R D E R PER PRADIP KUMAR KEDIA - AM: THE CAPTIONED APPEAL HAS BEEN FILED AT THE INSTANCE OF THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF I NCOME TAX(APPEALS), JAMNAGAR (CIT(A) IN SHORT), DATED 0 7.09.2017 ARISING IN THE ASSESSMENT ORDER DATED 03.02.2016 PA SSED BY THE ITA NO. 441/RJT/2017 [M/S. BRIGHT CONSTRUCTION VS. ACIT] A.Y. 2013 -14 - 2 - ASSESSING OFFICER (AO) UNDER S. 143(3) OF THE INCOM E TAX ACT, 1961 (THE ACT) CONCERNING AY 2013-14. 2. BY WAY OF ITS GROUNDS OF APPEAL, THE ASSESSEE H AS CHALLENGED THE ADDITIONS MADE BY THE AO AMOUNTING T O RS.3,28,000/- UNDER THE PROVISIONS OF SECTION 68 OF THE ACT. 3. THE ASSESSEE FIRM IS A CIVIL CONTRACTOR AND HAS FILED RETURN OF INCOME AT RS.24,80,680/- FOR AY 2013-14 IN CONSI DERATION. IN THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO OBSERV ED THAT THE ASSESSEE HAS RECEIVED UNSECURED LOAN FROM THREE PAR TIES AGGREGATING TO RS.3,28,000/- WHICH WERE ALSO SQUARE D UP AND REPAID DURING THE YEAR UNDER CONSIDERATION. THE DE TAILS OF LOANS FROM DIFFERENT PARTIES ARE REPRODUCED HEREUNDER: NAME OF DEPOSITOR AMOUNT OF LOAN (RS.) MODE OF RECEIPT OF LOAN KEVAL MARKETING 290000 BY CHEQUE VINODRAI P PATEL 19000 BY CASH ANSUYABEN PATEL 19000 BY CASH 328000 THE AO DISPUTED THE BONAFIDES OF LOANS RECEIVED FRO M THE PARTIES AND ALLEGED LACK OF DOCUMENTARY EVIDENCES TO SUPPOR T THE CREDITWORTHINESS AND GENUINENESS OF THE DEPOSITORS. THE AO ACCORDINGLY INVOKED THE PROVISIONS OF SECTION 68 OF THE ACT AND ADDED THE LOANS RECEIVED FROM THESE PARTIES AS UNEX PLAINED AND CREDIT IN THE HANDS OF THE ASSESSEE. 4. THE ASSESSEE COULD NOT SUCCESSFULLY REDRESS ITS GRIEVANCES AGAINST THE AFORESAID ACTION OF THE AO BEFORE THE C IT(A) EITHER. ITA NO. 441/RJT/2017 [M/S. BRIGHT CONSTRUCTION VS. ACIT] A.Y. 2013 -14 - 3 - 5. FURTHER AGGRIEVED, THE ASSESSEE PREFERRED APPEAL BEFORE THE TRIBUNAL. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS ON THE ISSUE IN CONTROVERSY AND PERUSED THE ORDERS OF THE AO AND CI T(A) AS WELL AS MATERIAL PLACED ON RECORD. WE NOTICE A FEW UNDI SPUTED FACTS NAMELY THE ASSESSEE HAS FURNISHED CONFIRMATIONS FRO M ALL THE DEPOSITORS. THE BANK STATEMENT OF THE PRIME LENDER NAMELY M/S. KEVAL MARKETING WAS ALSO PRODUCED. THE BONAFIDES O F LOANS OBTAINED FROM M/S. KEVAL MARKETING WAS DISPUTED MAI NLY ON THE GROUND THAT THE LENDER HAS DEPOSITED CASH BEFORE IS SUANCE OF CHEQUE AND ALSO THE LENDER HAS NOT FILED THE RETURN OF INCOME. THE ASSESSEE EXPLAINED IN RESPONSE THAT THE RETURN WAS NOT FILED BY M/S. KEVAL MARKETING ON ACCOUNT OF INCOME BELOW TAX ABLE LIMIT. THE ASSESSEE ALSO EXPLAINED THE REASON FOR DEPOSIT OF CASH HAVING REGARD TO THE NATURE OF BUSINESS (RETAIL SALE AND P URCHASE OF CEMENT) THE LENDER IS ENGAGED IN. ON PERUSAL OF TH E ORDERS OF THE AUTHORITIES BELOW, WE DO NOT SEE ANY ATTEMPT ON BEH ALF OF THE REVENUE TO EXAMINE THE LENDER. IN THE ABSENCE OF AN Y CONTRADICTION FROM THE LENDER, THE CONFIRMATION FIL ED BY THE RESPECTIVE PARTIES CANNOT BE SUMMARILY BRUSHED ASID E. THE OBSERVATIONS MADE BY THE AO CAST STRONG SUSPICION. HOWEVER, NO INQUIRY WAS MADE. SUSPICION IS THE MOTHER OF INQUI RY. IN THE ABSENCE OF ANY INQUIRY, THE CONFIRMATION IS REQUIRE D TO BE BELIEVED MORE SO WHERE THE LOANS STOOD REPAID AND NO BENEFIT OF INCREASE IN CAPITAL HAS ACCRUED TO THE ASSESSEE PER SE. THE FACT OF REPAYMENT OF LOANS REQUIRES TO BE GIVEN DUE SIGNIFICANCE IN T HE FACTS AND CIRCUMSTANCES OF THE CASE. THUS, WE FIND MERIT IN THE PLEA OF THE ITA NO. 441/RJT/2017 [M/S. BRIGHT CONSTRUCTION VS. ACIT] A.Y. 2013 -14 - 4 - ASSESSEE. THE ORDER OF THE CIT(A) IS ACCORDINGLY S ET ASIDE AND THE AO IS DIRECTED TO DELETE THE ADDITIONS SO MADE. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. SD/- SD/- (RAJPAL YADAV) (PRADIP K UMAR KEDIA) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD: DATED 31/05/2019 TRUE COPY S. K. SINHA COPY OF THE ORDER FORWARDED TO:- 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT, R AJKOT THIS ORDER PRONOUNCED IN OPEN COURT ON 31/05/2019