ITO 13(3)(2), MUMBAI V. HITESH I BHANSALI, MUMBAI

ITA 4526/MUM/2013

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 3747 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 1 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-08-2016
• Appeal Filed By: Department
• Bench Allotted: H
• Next Hearing Date: 20-05-2016
• Assessment Year: 2001-2002
• Appeal Filed On: 06-06-2013
• Court: TRIBUNAL
• Department Lawyers: GANESH BAZE
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL H BENCH, MUMBAI BEFORE SHRI B.R. BASKARAN (AM) & PAWAN SINGH (JM) I.T.A. NO. 4526 /MUM/ 20 1 3 (ASSESSMENT YEAR 200 1 - 0 2 ) ITO 13(3)(2) ROOM NO. 428 4 TH FLOOR AAYAKAR BHAVAN M.K. ROAD MUMBAI - 400 020. VS. SHRI HITESH I. BHANSALI 102, JYOTI CHAMBER 372, N.N. STREET MASJID WEST MUMBAI - 400 009. ( APPELLANT ) ( RESPONDENT ) PAN NO . ADTPB1038P ASSESSEE BY SHRI VIMAL PUNAMIYA DEPARTMENT BY SHRI GANESH BAZE DATE OF HEARING 27.5 . 201 6 DATE OF PRONOUNCEMENT 3 .8 . 20 1 6 O R D E R PER B.R. BASKARAN (AM) : - THE APPEAL FILED BY THE REVENUE IS DIRECTED AGAINST THE ORDER DATED 25.03. 2013 PASSED BY LEARNED CIT(A) - 24, MUMBAI AND IT RELATES TO THE ASSESSMENT YEAR 2001 - 02. THE REVENUE IS AGGRIEVED BY THE DECISION OF LEA RNED CIT(A) IN DELETING THE ADDITION MADE BY THE ASSESSING OFFICER UNDER SECTION 68 OF THE ACT BY ADMITTING FRESH EVIDENCES IN CONTRAVENTION OF THE PROVISIONS OF RULE 46A OF THE IT RULES WITHOUT CONTROVERTING THE SAME TO THE AO. 2. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF DYES, CHEMICALS AND INTERMEDIATE ITEMS AND IS CARRYING ON BUSINESS UNDER THE NAME AND STYLE OF M/S INDO PIGMENT INDUSTRIES. THIS IS THE SECOND ROUND OF PROCEEDINGS. IN THE FIRST ROUND, THE ITAT HAD RESTORED THE MATTER TO THE FILE OF THE LEARNED CIT(A) AND ACCORDINGLY THE IMPUGNED ORDER HAS BEEN PASSED BY THE FIRST APPELLATE AUTHORITY. SHRI HITESH I. BHANSALI 2 3. THE FACTS RELATING TO THE ADDITION MADE UNDER SECTION 68 OF THE ACT ARE STATED IN BRIEF. THE ASSESSING OFFICER ASSESSED THE FRESH LOANS TAKEN BY THE ASSESSEE EITHER FROM NEW PARTIES OR FROM THE EXISTING PARTIES TO THE TUNE OF RS.98.97 LAKHS UNDER SECTION 68 OF THE ACT ON THE REASONING THAT THE ASSESSEE HAS FAILED TO PROVE THE CASH CREDITS IN TERMS OF THREE MAIN INGREDIENTS VIZ., IDENTITY OF THE LOAN C REDITORS, GENUINENESS OF THE TRANSACTIONS AND THE CREDITWORTHINESS OF THE LOAN CREDITORS. IN THE FIRST ROUND OF PROCEEDINGS, THE ASSESSEE HAD FURNISHED CONFIRMATION LETTERS OBTAINED FROM ALL THE CREDITORS INCLUDING THE PAN NUMBER ALSO BEFORE THE LD CIT(A). IN THE SECOND ROUND OF PROCEEDINGS, THE LEARNED CIT(A) CONSIDERED THOSE CONFIRMATION LETTERS AND ALSO THE LEDGER ACCOUNT COPIES OF THE EACH OF THE CREDITORS. THE LEARNED CIT(A) NOTICED THAT MANY OF THE CREDITORS ACCOUNTS HAVE BEEN BROUGHT FORWARD FROM EAR LIER YEARS AND DURING THE YEAR UNDER CONSIDERATION CERTAIN FRESH LOANS HAVE BEEN TAKEN FROM THEM. THE LEARNED CIT(A) ALSO NOTICED THAT THESE CREDITORS HAVE BEEN ACCEPTED AS GENUINE IN THE EARLIER YEARS. UNDER THESE SET OF FACTS THE LEARNED CIT(A) ANALYSED THE ACCOUNT COPY OF EACH OF THE CREDITORS AND ALSO THE CONFIRMATION LETTERS FILED BY THEM. ACCORDINGLY HE CAME TO THE CONCLUSION THAT THE ADDITION MADE BY ASSESSING OFFICER UNDER SECTION 68 OF THE ACT IS NOT WARRANTED. ACCORDINGLY THE LEARNED CIT(A) DELETE D THE ADDITION MADE BY THE ASSESSING OFFICER UNDER SECTION 68 OF THE ACT. AGGRIEVED, THE REVENUE HAS FILED THIS APPEAL BEFORE US. 4. THE LEARNED DR PLACED STRONG RELIANCE ON THE ORDER PASSED BY THE ASSESSING OFFICER AND SUBMITTED THAT THE ASSESSEE HAS NOT PROPERLY PROVED THE GENUINENESS OF THE LOANS TAKEN DURING THE YEAR UNDER CONSIDERATION. 5. ON THE CONTRARY, THE LEARNED A.R SUBMITTED THAT THE FIRST APPELLATE AUTHORITY HAS TAKEN INTO CONSIDERATION THE DOCUMENTS, WHICH WERE FILED BEFORE HIM WITH TH E FIRST ROUND OF PROCEEDINGS. HE FURTHER SUBMITTED THAT THE LEARNED CIT(A) HAS SHRI HITESH I. BHANSALI 3 CONFRONTED THOSE DOCUMENTS BY CALLING FOR A REMAND REPORT FROM THE ASSESSING OFFICER DURING THE COURSE OF FIRST ROUND OF PROCEEDINGS. ACCORDINGLY HE SUBMITTED THAT THERE IS NO V IOLATION OF RULE 46A OF INCOME TAX RULES, AS ALLEGED BY THE REVENUE. THE LEARNED AR SUBMITTED THAT THE ASSESSEE HAS DISCHARGED THE PRIMARY BURDEN PLACED UPON HIM BY FURNISHING CONFIRMATION LETTERS ALONG WITH THE PAN ACCOUNT NUMBER OF THE CREDITORS. HE FURT HER SUBMITTEDD THE TRANSACTIONS HAVE BEEN CARRIED OUT THROUGH BANKING CHANNELS. FURTHER THE LEARNED CIT(A) HAS ALSO NOTICED THAT THESE CREDITORS WERE HAVING BALANCES IN THE EARLIER YEARS ALSO AND THOSE CREDITS HAVE BEEN ACCEPTED AS GENUINE BY THE ASSESSING OFFICER. THE LEARNED AR SUBMITTED THAT THE LEARNED FIRST APPELLATE AUTHORITY, UNDER THE CIRCUMSTANCES, ANALYSED EACH OF THE CREDITORS AND THE CAME TO THE CONCLUSION THAT THE ADDITION UNDER SECTION 68 OF THE ACT IS NOT WARRANTED. ACCORDINGLY THE LEARNED AR SUBMITTED THAT THE FIRST APPELLATE AUTHORITY HAS PASSED A REASONED ORDER ON THE BASIS OF FACTS AVAILABLE ON RECORD AND HENCE THE SAME DOES NOT WARRANT ANY INTERFERENCE. 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. WE NOTICE THAT THE LEARNED CIT(A) HAS CALLED FOR A REMAND REPORT FROM THE ASSESSING OFFICER DURING THE COURSE OF FIRST ROUND OF PROCEEDINGS AND THE ASSESSING OFFICER HAS ALSO FURNISHED THE REMAND REPORT. WE FURTHER NOTICE THAT THE ASSESSEE DID NOT FILE ANY NEW EVIDENCE B EFORE THE LEARNED CIT(A) DURING THE COURSE OF SECOND ROUND OF PROCEEDINGS. ACCORDINGLY WE ARE OF THE VIEW THAT THERE IS NO MERIT IN THE CONTENTION OF THE REVENUE THAT THE LEARNED CIT(A) HAS VIOLATED THE PROVISIONS OF RULE 46A OF THE INCOME TAX RULES. ACCOR DINGLY WE REJECT THE SAME. 7. WITH REGARD TO THE FRESH LOANS TAKEN DURING THE YEAR UNDER CONSIDERATION, WE NOTICE THAT THE LEARNED CIT(A) HAS ANALYSED EACH OF THE CREDITORS ON THE BASIS OF CONFIRMATION LETTERS FILED BY THEM, LEDGER ACCOUNT COPIES AND PAN ACCOUNT NUMBER OF EACH OF THE CREDITORS. THE DECISION OF LD CIT(A) IN RESPECT OF SHRI HITESH I. BHANSALI 4 EACH OF THE CREDITORS IS AVAILABLE AT PAGES 29 TO 32 OF HIS ORDER. THE LD CIT(A) HAS ALSO NOTICED THAT MOST THE TRANSACTIONS HAVE BEEN ROUTED THROUGH BANKS AND SOME ENTR IES HAVE BEEN PASSED THROUGH JOURNAL ENTRIES, I.E., NONE OF THE LOAN WAS TAKEN BY WAY OF CASH. MOST OF THE LOAN CREDITORS WERE OLD CREDITORS AND THE OPENING BALANCES HAVE BEEN ACCEPTED BY THE AO AND THE LOANS TAKEN IN THE EARLIER YEARS HAVE ALSO BEEN ACCEP TED. ACCORDINGLY THE LEARNED CIT(A) HAS TAKEN THE VIEW THAT THERE IS NO REQUIREMENT TO ASSESS THE FRESH CREDITS UNDER SECTION 68 OF THE ACT, AS ACCORDING TO LEARNED CIT(A), THE ASSESSEE HAS DISCHARGED THE INITIAL BURDEN PLACED UPON HIM UNDER SECTION 68 OF THE ACT. 8. WE NOTICE THAT THE LEARNED CIT(A) HAS RENDERED HIS DECISION ON THE BASIS OF FACTS AVAILABLE ON RECORD AND, IN OUR VIEW, THE DECISION SO RENDERED BY HIM DOES NOT CALL FOR ANY INTERFERENCE. ACCORDINGLY WE UPHOLD HIS ORDER ON THIS ISSUE. 9. IN THE RESULT THE APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER HAS BE EN PRONOUNCED IN THE COURT ON 3 .8 .2016 SD/ - SD/ - (PAWAN SINGH ) (B.R.BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED : 3 / 8 / 20 1 6 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// ( DY./ASSTT. REGISTRAR) ITAT, MUMBAI PS