Saraswati Subhash Shah, Legal heir of Late Shri Subhash K.Shah, Kolhapur V. Assistant Commissioner of Income-tax, Circle -2, Kolhapur

ITA 448/PUN/2019

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 9976 (ITAT-PUNE)
• Duration Of Justice: 2 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-05-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Appeal Filed On: 22-03-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M K VERMA
• Keywords: Unexplained cash credit

Judgement Text

, - IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH SMC, PUNE . , BEFORE SHRI D. KARUNAKARA RAO, AM . / ITA NO.448/PUN/2019 / ASSESSMENT YEAR : 2012-13 LATE SUBHASH KHUSHALCHAND SHAH, THROUGH L/H SARASWATI SUBHASH SHAH, 1399 C WARD LAXMIPURI, KOLHAPUR. PAN : ADNPS2453B . /APPELLANT VS. ACIT, CIRCLE-2, KOLHAPUR. . / RESPONDENT / APPELLANT BY : SHRI NIKHIL PATHAK SHRI MAYURESH DOSHI / RESPONDENT BY : SHRI M. K. VERMA / DATE OF HEARING : 22.04.2019 / DATE OF PRONOUNCEMENT: 24.05.2019 / ORDER PER D. KARUNAKARA RAO, AM : THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A)-2, KOLHAPUR DATED 17.01.2019 FOR THE ASSESSMENT YEAR 2012-13. 2. THE GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER :- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD.CIT (A) IS NOT JUSTIFIED IN CONFIRMING ADDITION OF RS 400000/- MADE U/S 68 OF THE ACT TREATING LOAN RECEIVED AS UNEXPLAINED CASH CREDIT. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD.CIT (A) FAILED TO APPRECIATE THAT THE ASSESSEE HAS GIVEN INTEREST AND DEDUCTED TAX AT SOURCE ON LOAN AMOUNT AND ALSO REPAID THIS LOAN IN LATER YEAR. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD.CIT (A) FAILED TO APPRECIATE THAT THE ASSESSEE IS NOT REQUIRED TO PROVE SOURCE OF THE SOURCE. 4. THE APPELLANT CRAVES, TO CONSIDER EACH OF THE ABOVE GROUNDS OF APPEAL WITHOUT PREJUDICE TO EACH OTHER AND CRAVES LEAVE TO ADD, ALTER, DELETE OR MODIFY ALL OR ANY OF THE ABOVE GROUNDS OF APPEAL. ITA NO.448/PUN/2019 - 2 - 3. BEFORE ME, AT THE OUTSET, LD. COUNSEL FOR THE ASSESSEE NARRATED THE FACTS AND SUBMITTED THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF TRADING ACTIVITY IN FERROUS AND NON-FERROUS METAL AND SCRAP. DURING THE REGULAR ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTICED THAT A CREDIT OF RS.4,00,000/- INVOLVING SHRI LALIT GAJRAJ GANDHI, THE LOAN CREDITOR. ON EXAMINING THE BANK ACCOUNT OF SHRI GANDHI, IT WAS NOTICED THAT THERE WAS A CASH DEPOSIT A DAY BEFORE THE CHEQUE WAS ISSUED TO THE ASSESSEE. CONSIDERING THE SUSPICIOUS NATURE OF THE TRANSACTIONS, THE ASSESSING OFFICER MADE ADDITION OF RS.4,00,000/- IN THE ASSESSMENT. THE CIT(A) CONFIRMED THE SAME. 4. AGGRIEVED WITH THE DECISION OF THE CIT(A), THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL WITH THE GROUNDS EXTRACTED ABOVE. 5. BEFORE ME, LD. COUNSEL FOR THE ASSESSEE BROUGHT OUR ATTENTION TO THE PAPER BOOK AND SUBMITTED THAT THIS IS A CASE WHERE THE PAYMENTS ARE MADE IN CASH TO THE ASSESSEE BY SHRI GANDHI AND SHRI GANDHI ASSESSED TO TAX AND THE COPY OF THE ACKNOWLEDGEMENT OF IT RETURN FOR THE ASSESSMENT YEAR 2012-13 IS PLACED AT PAGE 8 OF THE PAPER BOOK. SHRI GANDHI ALSO FILED COPY OF HIS BALANCE SHEET AND THE PROFIT & LOSS ACCOUNT SHOWING THE SOURCE OF INCOME ON ONE SIDE AND THE ENTRY OF THE SAID CREDIT OF RS.4,00,000/- ON THE OTHER. FURTHER, BRINGING MY ATTENTION TO PAGE 7 OF THE PAPER BOOK, LD. COUNSEL DEMONSTRATED THAT THE SAID AMOUNT OF RS.4,00,000/- WAS RECEIVED FROM THE ASSESSEE BY SHRI GANDHI ON 05.09.2014 AFTER A PERIOD OF MERELY 2 YEARS. 6. THE LD. DR FOR THE REVENUE, ON THE OTHER HAND, RELIED HEAVILY ON THE ORDERS OF THE ASSESSING OFFICER AND THE CIT(A). ITA NO.448/PUN/2019 - 3 - 7. ON HEARING BOTH THE SIDES AND GOING THROUGH THE PAPERS FILED BEFORE ME REGARDING THE TRANSACTIONS OF RS.4,00,000/-, I FIND THIS IS A CASE WHERE THE AMOUNT WAS REPAID BY THE ASSESSEE ON 05.09.2014 THEREBY THE TRANSACTION STANDS NOW SQUIRED UP. IN MY CONSIDERED VIEW, WHEN THE LOAN IS REPAID BY THE ASSESSEE, THERE IS NO REASON FOR THE ASSESSING OFFICER TO DOUBT THE GENUINENESS OF TRANSACTION ILLEGAL ON THE CREDITWORTHINESS OF THE CREDITOR. AS SUCH THE CREDITOR IS A PROPRIETOR OF M/S. PRADEEP METALS AND REPORTED EARNING OF INCOME OF RS.3.6 LAKHS FOR THE ASSESSMENT YEAR 2012-13 OUT OF THE BUSINESS ACTIVITY. AS SUCH THERE IS NO EVIDENCE ON FILE TO SUGGEST THAT THE CASH DEPOSITED IN THE ACCOUNT OF THE CREDITOR BELONGS TO THE ASSESSEE. CONSIDERING THE SAME, I FIND THE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTIONS ARE BEYOND ANY DOUBT. THEREFORE, IN MY VIEW, THE ADDITION MADE BY THE ASSESSING OFFICER IS UNSUSTAINABLE. THUS, THE ISSUE RAISED BY THE ASSESSEE IN THE GROUNDS ARE ALLOWED. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON THIS 24 TH DAY OF MAY, 2019. SD/- (D. KARUNAKARA RAO) / ACCOUNTANT MEMBER / PUNE; DATED : 24 TH MAY, 2019. SUJEET / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT; 2. / THE RESPONDENT; 3. THE CIT(A)-2, KOLHAPUR; 4. THE PR. CIT-2, KOLHAPUR; 5. , , - / DR SMC, ITAT, PUNE; 6. / GUARD FILE. / BY ORDER, //TRUE COPY// SENIOR PRIVATE SECRETARY , / ITAT, PUNE