A.C.I.T. 21(2), MUMBAI V. GULSHAN H. BHAKTIANI, MUMBAI

ITA 4554/MUM/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 79087 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 10 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-06-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 13-05-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 05-07-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NAVAL JIT KAPOOR
• Assessee Lawyers: SURESH N OTWANI
• Keywords: Unexplained cash credit; Business income; Principle of natural justice; Additional evidence; Corroborative evidences
• Section: 143(3); 133(6); 131; 68

Judgement Text

G IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH G, MUMBAI . . . . , !' !' !' !' # # # # $ $ $ $ % % % % , !' !' !' !' & & & & BEFORE SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER AND SHRI VIVEK VARMA, JUDICIAL MEMBER . : . : . : . : 4554 / // / / // / 2012, % )% 2009-10 ITA NO. : 4554/MUM/2012 , AY 2009-10 ACIT-21(2), R NO 508, C-10, 5 TH FLOOR, B K C, BANDRA (EAST), MUMBAI -400 051 VS SHRI GULSHAN H BHAKTIANI, 133A, KALPATARU RESIDENCY, OPP CINE PLANET, SION, MUMBAI -400 022 PAN : ACUPB 4663 J *+ (APPELLANT) ,-*+ (RESPONDENT) APPELLANT BY : SHRI NAVAL JIT KAPOOR RESPONDENT BY : SHRI SURESH N OTWANI . /0 /DATE OF HEARING : 13-05-2014 12) . /0 / DATE OF PRONOUNCEMENT : 04-06-2014 ! 3 ! 3 ! 3 ! 3 O R D E R $ $ $ $ % % % % , : :: : PER VIVEK VARMA, JM: THE INSTANT APPEAL IS FILED BY THE DEPARTMENT AGAINST THE ORDER O F CIT(A)-32, MUMBAI, DATED 25.04.2012, WHEREIN, THE FOLLOWING GROU NDS HAVE BEEN RAISED: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE CIT(A) HAS ERRED IN DELETING THE DISALLOWANCE O F RS. 80,024/- MADE ON ACCOUNT OF INTEREST ON BORROWED CAPITAL FOR PURCHASE OF HOUSE PROPERTY, BY ADMITTING ADDITIONAL EVIDENCE IN SUPPORT OF CLAIM OF INTEREST ON BORROWED CAPITAL DURING THE CO URSE OF APPEAL PROCEEDINGS, WITHOUT REMANDING THE ISSUE TO THE AO FOR VERIFICATION. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS . 2,01,426/- MADE ON ACCOUNT OF UNDISCLOSED BUSINESS RECEIPTS, I NSTEAD OF DIRECTING THE AO TO GIVE CREDIT FOR TDS, IGNORING T HE FACT THAT THE DETAILS AVAILABLE IN AIR INFORMATION ARE PAN BASED. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS . 37,54,207/- MADE ON ACCOUNT OF UNEXPLAINED CASH CREDITS U/S 68, BY ADMITTING ADDITIONAL EVIDENCE IN THE FORM OF COPY O F ACKNOWLEDGEMENT OF LOAN CREDITOR AND THEIR BALANCE SHEET DURING THE COURSE OF APPEAL PROCEEDINGS, WITHOUT RE MANDING BACK THE ISSUE TO THE AO FOR VERIFICATION. SHRI GULSHAN H BHAKTIANI . : 4554 / // / / // / 2012 ITA NO. 4554/MUM/2012 2 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 51,30,000/- MADE ON ACCOUNT OF UNEXPLAINED INVESTME NT WITHOUT VERIFYING THAT THE ASSESSEE HAS FILED INCOM PLETE DETAILS DURING THE COURSE OF ASSESSMENT PROCEEDINGS. THE APPELLANT PRAYS THAT THE ORDER OF THE CIT(A) ON THE GROUNDS BE SET ASIDE AND MATTER BE DECIDED ACCORDING TO LAW. THE A PPELLANT CRAVES LEAVE TO AMEND OR ALTER ANY GROUND OR ADD NEW GROUN D WHICH MAY BE NECESSARY. 2. THE ASSESSEE IS AN INDIVIDUAL AND IS A PARTNER IN THE FIRM M/S PAREL CHEMIST AND DIRECTOR IN M/S PINNACLE BIOMED PVT. LTD. IN THE ASSESSMENT PROCEEDINGS, THE AO SOUGHT CERTAIN CLARIFICATION S AND ALSO ISSUED NOTICE U/S 131 OF THE INCOME TAX ACT, REQUIRING TH E ASSESSEE TO ATTEND AND BE PRESENT BEFORE THE AO TO EXPLAIN ISSUES R AISED IN SHOW CAUSE NOTICE. AS PER THE ASSESSMENT ORDER, THE ASSESSE E DID NOT PRESENT HIMSELF BEFORE THE AO, BUT INSTEAD FILED WRITTEN SUBM ISSIONS, WHICH ACCORDING TO THE AO WERE NEITHER EXHAUSTIVE NOR A NY INFERENCE COULD BE DRAWN NOR WERE THEY PROPERLY EXPLAINED, TO SATISFY THE AO . 3. THE AO, THEREFORE, ADDED BACK INTEREST PAID AT RS. 80,0 24/- ON BORROWED FUNDS U/S 24(B). 4. THE AO NOTICED THAT AN AMOUNT OF RS. 2,01,426/- WAS CR EDITED IN THE BOOKS OF PAREL CHEMIST. THE AO, THEREFORE, ASKED THE ASSES SEE TO EXPLAIN THE SOURCE OF CREDIT. 5. THE ASSESSEE IN HIS LETTER DATED 07.12.2011 SUBMITTED T HAT THIS AMOUNT PERTAINED TO AND WAS CREDITED IN THE BOOKS OF PA REL CHEMIST IN ASSESSMENT YEAR 2009-10, WHEREIN, THE DETAILS WERE FILED. 6. THE AO DID NOT ACCEPT THE EXPLANATION AND OBSERVED T HAT THE AMOUNT WAS RECEIVED FROM TMC BY THE ASSESSEE AND NOT BY PAREL CHEMIST. ON THIS BASIS, THE AO ADDED BACK RS. 2,01,426/- TO THE INCOME OF THE ASSESSEE. 7. THE AO ALSO NOTICED THAT THE ASSESSEE HAS UNSECURED LOANS OF RS. 60,54,207/-. SHRI GULSHAN H BHAKTIANI . : 4554 / // / / // / 2012 ITA NO. 4554/MUM/2012 3 8. THE AO CALLED FOR THE DETAILS FROM THE ASSESSEE. AGAINST THIS, THE ASSESSEE FURNISHED CONFIRMATION FROM NEW LOANS AND POINTED OUT THAT RS. 23,00,000/- WERE COMING FROM THE PRECEDING YEAR. THE A O, ACCEPTED THE UNSECURED LOANS TO THE EXTENT OF RS. 23,00 ,000/- BUT ADDED BACK THE BALANCE OF RS. 37,54,207/-, AS THE ASSESS EE FAILED TO PROVIDE THE BANK STATEMENTS, COPIES OF RETURN AND OTHER WISE PROVE THE CREDIT WORTHINESS OF THE LOAN CREDITORS. 9. THE AO ALSO NOTICED THAT THE ASSESSEE HAD INTRODUCED FRESH CAPITAL OF RS. 51,30,000/- AND TREATED THE SAME AS UNEXPLA INED INVESTMENTS. ACCORDING TO THE AO, IN THE ASSESSMENT PROC EEDINGS, THE ASSESSEE DID NOT FURNISH ANY EXPLANATION AS TO THE SOURC E OF REGULAR FUNDS , NOR DID THE ASSESSEE FILE ANY FUND FLOW STATEMENT TO SHOW THE INDUCTION OF CAPITAL. 10. THE AO, THEREFORE, ADDED BACK RS. 51,30,000/- TO THE IN COME OF THE ASSESSEE. 11. THE ASSESSEE, NOT SATISFIED BY THE ORDER OF THE AO, AP PROACHED THE CIT(A) AND PRODUCED ALL THE RELEVANT DOCUMENTS AS PR ODUCED BEFORE THE AO AND OTHER SUPPORTING EVIDENCES IN SUPPORT OF HIS SUBMISSIONS. 12. ON THE ADDITION OF RS. 80,024/- ON ACCOUNT OF INTEREST CLAIM U/S 24(B), THE ASSESSEE SUBMITTED THAT IT WAS A PART OF EMI O N OLD HOUSING LOAN AND ON WHICH IN PRECEDING YEARS AS WELL INTEREST WAS CLAIMED U/S 24(B). THE ASSESSEE SUBMITTED BEFORE THE CIT(A) THAT DETAI LS SHOWING BIFURCATION OF EMI REGARDING PRINCIPAL AMOUNT AND INTEREST A MOUNT WAS PLACED BEFORE THE AO. THE ONLY OTHER DOCUMENT PLACE D BEFORE THE CIT(A) WAS THE CERTIFICATE FROM THE BANK, PERTAINING THE INTE REST PAYMENT TO THE BANK. 13. THE CIT(A), UPON CONSIDERING THE RELEVANT FACTS AND EVID ENCES DIRECTED THE AO TO DELETE THE ADDITION. SHRI GULSHAN H BHAKTIANI . : 4554 / // / / // / 2012 ITA NO. 4554/MUM/2012 4 14. AGAINST THIS ORDER, THE DEPARTMENT IS IN APPEAL RAISING GROUND FOR ADMISSION OF ADDITIONAL EVIDENCE, WITHOUT CALLING FOR AOS COMMENTS. 15. THE DR SUPPORTED THE GROUND, SAYING THAT THE CIT(A) DENIED THE OPPORTUNITY TO THE AO AND THEREFORE, THE ORDER OF THE C IT(A) WAS AGAINST THE PRINCIPALS OF NATURAL JUSTICE. 16. THE AR ON THE OTHER HAND SUBMITTED THAT THE ENTIRE DETAILS WERE BEFORE THE AO AND THE ONLY OTHER DOCUMENT PRODUCED B EFORE THE CIT(A0 WAS THE CERTIFICATE FROM THE BANK. THIS PER SE CANNOT BE REGARDED AS INDEPENDENT ADDITIONAL EVIDENCE. 17. WE HAVE HEARD THE ARGUMENTS OF BOTH THE PARTIES AN D HAVE ALSO PERUSED THE MATERIAL BEFORE US. WE FIND THAT THE CIT(A) HA S MADE A CATEGORICAL FACTUAL OBSERVATION THAT THE DETAILS AND BIFURCA TION HAD BEEN PRODUCED BEFORE THE AO. SUBMISSION OF BANK STATEMEN T DOES NOT QUALIFY FOR AN INDEPENDENT ADDITIONAL EVIDENCE. AT BEST, IT WO ULD BE SAID THAT THAT THE EVIDENCE WAS ONLY SUPPORTING DOCUME NT, WHICH THE CIT(A) ACCEPTED, WHICH ARE WITHIN HIS CO- TERMINUS POWERS. 18. WE, THEREFORE, ARE OF THE VIEW THAT THERE WAS NO NEED FOR REMANDING THE ISSUE AND AS A CONSEQUENCE, WE SUSTAIN TH E OBSERVATIONS OF THE CIT(A). 19. GROUND NO. 1, THEREFORE, REJECTED. 20. GROUND NO. 2 PERTAINS TO DELETION OF RS. 2,01,426/-. 21. BEFORE THE CIT(A) IT WAS EXPLAINED THAT THE ASSESSEE R ECEIVED RS. 2,01,426/- FROM THANE MUNICIPAL CORPORATION, WHICH, WAS ACCOU NTED FOR IN THE BOOKS OF M/S THE PAREL CHEMIST, FIRM WHEREIN THE ASSESSEE IS A PARTNER AND THE SAID AMOUNT HAS BEEN ACCOUNTED A S INCOME IN THE BOOKS OF M/S THE PAREL CHEMIST. IT WAS ALSO INFORMED TO TH E AO THAT THE ASSESSMENT OF M/S THE PAREL CHEMIST HAS BEEN FRAM ED U/S 143(3) ALSO, AND COPY OF THE ASSESSMENT ORDER WAS FILED BEFORE TH E AO AS PER SHRI GULSHAN H BHAKTIANI . : 4554 / // / / // / 2012 ITA NO. 4554/MUM/2012 5 LETTER DATED 7/12/2011. THIS SHOWED THAT THE SAME RECE IPTS AS WELL AS THE TDS WAS DULY ACCOUNTED BY THE FIRM. THE AO DID NOT ACCEPT THE CONTENTION OF THE ASSESSEE ON THE GROUND THAT ON THE TDS CERTIFICATE WAS IN THE NAME OF THE ASSESSEE AND NOT IN NAME OF THE FIRM AND THEREFORE THE INCOME BELONGED TO THE APPELLANT. ACCORDINGL Y HE ADDED A SUM OF RS. 2,0 1,426/ - AS UNDISCLOSED BUSINESS INCOME OF THE ASSESSEE. 22. IT WAS STATED THAT THE FIRM M/S PAREL CHEMIST, IS IN T HE BUSINESS OF SUPPLYING MEDICINES TO VARIOUS AGENCIES INCLUDING THANE M UNICIPAL CORPORATION. SINCE THE ASSESSEE WAS A PARTNER IN THE SAID FIRM AND WAS REPRESENTING THE FIRM BEFORE VARIOUS AUTHORITIES, THEREFORE DUE TO MISTAKE BY THE DEDUCTOR I.E. THANE MUNICIPAL CORPORATION MA DE THE TDS CERTIFICATE IN THE NAME OF THE ASSESSEE. IT WAS CLARIFIED THAT IT WAS THE FIRM WHICH WAS SUPPLYING MEDICINES TO THANE MUNICIPAL CORPORATION. IT WAS ALSO CONTENDED THAT THE AO HAVING J URISDICTION OVER THE FIRM, MADE THE ASSESSMENT OF THE FIRM AND ACCOUN TED FOR THE TDS OF RS. 2,652/- DEDUCTED AS PER THE TDS CERTIFICATE, W HICH WAS IN THE NAME OF THE ASSESSEE. THIS FURTHER SUPPORTS THAT T HE INCOME BELONGS TO THE FIRM ONLY. ALL THE DOCUMENTS INCLUDING ASSESS MENT ORDER OF FIRM WAS GIVEN TO AO WITH LETTER DATED 7/12/201 1 WHICH HAS BEEN OVERLOOKED BY THE AO. SINCE THE SAID AMOUNT HAS ALR EADY BEEN ACCOUNTED BY FIRM, ADDING THE SAME IN THE HANDS OF THE A PPELLANT AGAIN WOULD AMOUNT TO DOUBLE TAXATION. 23. THE CIT(A), CONSIDERING THE REPLY OF THE ASSESSEE, OBSERVED, THAT THE ASSESSEE WAS NOT IN THE BUSINESS OF SUPPLY ING MEDICINES TO THANE MUNICIPAL CORPORATION AND LEGALL Y THE ASSESSEE WAS NOT REQUIRED TO RECEIVE ANY RECEIPTS F ROM THE THANE MUNICIPAL CORPORATION. IT IS ONLY DUE TO MIST AKE ON THE PART OF THE DEDUCTOR THAT TDS CERTIFICATE WAS I SSUED IN THE NAME OF THE APPELLANT WHO WAS NOT SUPPLYING MEDICINE TO TMC. ONCE SUCH RECEIPTS BELONGED TO THE FIRM AND NOT TO THE APPELLANT THEN THE SAME CANNOT BE TR EATED AS INCOME OF THE APPELLANT, JUST BECAUSE ON THE TDS CERTIFICATE NAME OF THE APPELLANT IS MENTIONED. FUR THER, ONCE THE FIRM HAD DULY OFFERED THE SAME AS INCOME I N SHRI GULSHAN H BHAKTIANI . : 4554 / // / / // / 2012 ITA NO. 4554/MUM/2012 6 RETURN AND TAKEN CREDIT OF TDS ALSO AND THE AO OF T HE FIRM HAS DULLY ALLOWED THE CREDIT OF THE TDS AND RECEIPT S IN THE HANDS OF THE FIRM THEN THERE IS NO REASON TO TAX TH E SAME AMOUNT ONCE AGAIN IN AO IS NOT JUSTIFIED AND THE SA ME IS DIRECTED TO DELETED. 24. THE CIT(A), THUS, DIRECTED THE AO TO DELETED THE ADDIT ION OF RS. 2,01,426. 25. AGAINST THIS ORDER OF THE CIT(A), THE DEPARTMENT IS IN APPEAL BEFORE THE ITAT. 26. BEFORE US, THE DR SUPPORTED THE ORDER OF THE AO AND FURTHER SUBMITTED THAT THE CIT(A) DENIED THE PRINCIPALS OF NATURAL J USTICE BY NOT CALLING FOR THE REMAND REPORT. 27. THE AR ON THE OTHER HAND, SUPPORTED THE ORDER OF T HE CIT(A) AND SUBMITTED THAT THE CIT(A) CONSIDERED ONLY THOSE FACTS WH ICH WERE AVAILABLE BEFORE THE REVENUE AUTHORITIES, HENCE THE ORDER OF THE CIT(A) IS NOT AT INFIRMITY. 28. WE HAVE HEARD THE ARGUMENTS AND HAVE PERUSED THE DETAILS. THE FACTS THAT THE RECEIPT OF RS. 2,01,426/- PERTAINED ONLY T O PAREL CHEMIST AND THAT THE ASSESSEE WAS THE CARRIER OF THE FUNDS, BEIN G THE PARTNER OF PAREL CHEMIST IS NOT DOUBTED. BESIDES THIS, THAT THE FACT T HAT TDS CERTIFICATE, THOUGH IN THE NAME OF THE ASSESSEE HAS BEEN CONSIDERED IN THE CASE OF PAREL CHEMISTS, BY THE DEPARTMENT ALONG WITH THE INCOME CANNOT BE IGNORED. IN THESE CIRCUMSTANCES, THE LOGIC OF TH E AO THAT SINCE THE ASSESSEE TOOK THE DELIVERY OF FUNDS FROM THE TM C ON BEHALF OF THE FIRM, SHOULD HAVE BEEN ADDED TO THE INCOME OF THE ASS ESSEE IS QUITE UNREASONABLE. THE FIRM WORKS THROUGH ITS PARTNERS. T HE ABSTRACT REASON WHY THE FUNDS WERE CREDITED IN THE BOOKS OF PARE L CHEMIST AND NOT IN THE BOOKS OF THE ASSESSEE IS INCOMPREHENSIBLE, SIMPL Y BECAUSE THE ASSESSEE CARRIED THE PAYMENT ALONGSIDE THE TDS CER TIFICATE, WHICH INADVERTENTLY WAS MADE IN THE NAME OF THE ASSESSEE, BUT WAS ACTUALLY ACCOUNTED FOR THE CASE OF PAREL CHEMIST, CANNOT BE BRUSH ED ASIDE. WE, SHRI GULSHAN H BHAKTIANI . : 4554 / // / / // / 2012 ITA NO. 4554/MUM/2012 7 THEREFORE, DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE CIT (A) NOR IN THE EXPLANATION PROVIDED BY THE ASSESSEE. 29. WE, THEREFORE, SUSTAIN THE ORDER OF THE CIT(A) AND REJE CT THE GROUND TAKEN BY THE AO. 30. GROUND NO. 2 IS THEREFORE, REJECTED. 31. GROUND NO. 3 PERTAIN TO DELETION OF RS. 37,54,207/-, MA DE U/S 68. 32. BEFORE THE CIT(A) IT WAS CONTENDED THAT THE ASSESSE E HAS CONTINUED TO RAISE LOAN IN CURRENT YEAR ALSO AND ADVANC E THE SAME ON INTEREST AND WITHOUT INTEREST. THE LOAN CONFIRMATIONS IN R ESPECT OF ALL THE CREDITORS WERE FILED FROM TIME TO TIME FROM 03.11.2011, 1 4.11.2011 AND FINALLY ON 07.12.2011. THE LOAN CONFIRMATIONS WERE HAV ING PARTICULARS I.E, NAME AND ADDRESS OF CREDITORS, PAN NUMBER OF CREDITOR, SOURCE OF INCOME OF CREDITOR WHICH CLEARLY ESTAB LISHES THE IDENTITY, CREDIT WORTHINESS OF THE CREDITOR BEING ASSESSED TO TAX REGULARLY AND SINCE ALL THE TRANSACTIONS WERE THROUGH BA NK ACCOUNT, THE GENUINENESS OF TRANSACTIONS WAS PRIMA-FACIE ESTABLISHED BY THE ASSESSEE. THERE WERE NO EFFORTS BY THE A.O. TO CROSS VER IFY THE SAID LOANS BY ISSUE OF 133(6) PROCEEDINGS. 33. IN ABSENCE OF ANY CONTRADICTORY STATEMENTS AND DO CUMENTS BEFORE AO THE ADDITIONS U/S 68 OF THE IT ACT, 1961 IS N OT ONLY INCORRECT BUT ILLEGAL. IN THE CASE OF C.I.T. VS ORISSA CORPORATION P. LT D. 159 ITR 78, SIMILAR ISSUE CAME UP AND THE HONORABLE JUDGES HAVE T O DECIDE THAT SINCE LOAN CONFIRMATION LETTERS WITH PAN NUMBERS WER E FURNISHED THEN THE PRIMA FACIE, SINCE CREDITORS ARE ASSESSED TO TAX , BURDEN SHIFTS UPON THE REVENUE, TO ESTABLISH THAT THE SAID DOCUMENTS ARE NOT CORRECT BY ISSUE OF VERIFICATION PROCESS U/S 133(6) OR EV EN SUMMONS U/S 131. SHRI GULSHAN H BHAKTIANI . : 4554 / // / / // / 2012 ITA NO. 4554/MUM/2012 8 34. IN THE CASE BEFORE HIGH COURT EVEN SUMMONS WERE IS SUED BUT NOT SERVED, STILL NON-PERSUASION OF PROCEEDINGS WERE NOT ACCEPTED BY HONORABLE JUDGES. 35. IN THE PRESENT CASE, A.O HAS NOT DONE ANYTHING. NON ETHELESS, COPIES OF LOAN CONFIRMATION LETTERS ALONG WITH THE DOCUMEN TS I.E, PROOF OF ACKNOWLEDGEMENT OF RETURN SUBMITTED BY THE CREDITORS TO THEIR RESPECTIVE OFFICERS AND COPIES OF THEIR BANK ACCOUNTS/ BALA NCE SHEETS ALONG WITH CURRENT EXISTING CORRECT PAN NUMBER ARE ONCE AGAIN FILED IN COMPILATION. HENCE ADDITION ON THIS ACCOUNT OUGHT TO BE DELETED. 36. THE CIT(A), AFTER CONSIDERING THE SUBMISSIONS OF THE ASSE SSEE OBSERVED, 6.3. I HAVE CONSIDERED THE ARGUMENTS OF THE LD. AR . THE AO IN THE ASSTT ORDER ACCEPTS THAT THE LOAN CONFIRMATIONS WERE GIVEN BUT YET HE TREATS THE LOANS AS UNEXPLAINED ON GROUN DS THAT THE BANK STATEMENT, COPY OF RETURN ETC. OF THE LOAN CRE DITOR WERE NOT PROVIDED. ONCE THE LOAN CONFIRMATION LETTERS WITH P AN NUMBERS, ADDRESSES AND OTHER DETAILS THEN THE BURDEN 'SHIFTS UPON THE AO TO ESTABLISH THAT THE SAID DOCUMENTS ARE NOT CORREC T BY ISSUE OF VERIFICATION PROCESS U/S 133(6) OR SUMMONS U/S 131. BY GIVING THE CONFIRMATIONS THE ASSESSEE HAD DISCHARGED THE P RIMARY BURDEN. I FIND THAT THE AO HAS NOT BROUGHT ANY MATE RIAL ON RECORD TO POINT OUT ANY REASON TO SUSPECT THE CONFI RMATIONS PROVIDED BY ASSESSEE. THE AO HAS ALSO NOT POINTED A S TO WHETHER HE ASKED THE ASSESSEE TO PROVIDE ANY FURTHE R EVIDENCE AFTER HE FURNISHED THE LOAN CONFIRMATIONS WITH ALL DETAILS. NO ADDITION/S U/S 68 CAN BE MADE BY MERELY DISBELIEVIN G THE EVIDENCE WITHOUT POINTING OUT ANY DEFECT IN THE EVI DENCE PROVIDED. ONCE THE AO DOES NOT SPECIFICALLY ASK FOR GIVING FURTHER DETAILS, ASSESSEE HAS DISCHARGED HIS BURDEN AND CANNOT BE FAULTED FOR NOT GIVING THE COPY OF ACKNOWLEDGMEN T OF RETURN OR BANK STATEMENT OF THIRD PARTIES. NOTWITHSTANDING, T HE LD AR HAS FILED THE COPY OF ACKNOWLEDGMENT OF RETURNS OF THE LOAN CREDITORS AND THEIR BALANCE SHEET ETC IN SUPPORT OF FILED BEF ORE AO. THE LOANS GIVEN TO ASSESSEE ARE DULY APPEARING IN THEIR BALANCE SHEET. THUS IN ABSENCE OF ANY ADVERSE FINDING BY TH E AO AGAINST THE CONFIRMATIONS FILED, THERE IS NO JUSTIFICATION IN MAKING THE ADDITION OF RS. 37,54,207/- U/S 68 OF THE I.T. ACT AND THE SAME IS THEREFORE DIRECTED TO BE DELETED. 37. THE CIT(A), THUS DELETED THE ADDITION. 38. AGAINST THIS ORDER, THE DEPARTMENT IS BEFORE ITAT. SHRI GULSHAN H BHAKTIANI . : 4554 / // / / // / 2012 ITA NO. 4554/MUM/2012 9 39. BEFORE US, THE DR SUPPORTED THE ORDER OF THE AO, WHE REAS, THE AR SUPPORTED THE ORDER OF THE CIT(A). 40. WE HAVE HEARD THE ARGUMENTS AND HAVE ALSO PERUSED THE ORDERS OF THE REVENUE AUTHORITIES ALONG WITH MATERIAL ON RECORD. 41. IN THE INSTANT ISSUE, THE CIT(A) HAS GIVEN A FACTUAL FIN DING THAT THE DETAILS HAD BEEN PRODUCED BEFORE THE AO AND IT WAS THE AO WHO DID NOT BRING ANYTHING TO THE CONTRARY TO NEGATE THE EVIDENCE OR EVEN ISSUE SUMMONS OR ISSUE SHOW CAUSE TO THE LOAN CREDITORS . IN SUCH AN EVENT, IT HAS TO BE PRESUMED THAT THE EXPLANATION PROVID ED IS ACCEPTED BY THE AO. WE, TOO, ARE OF THE OPINION, ONCE NO FURTHER QU ESTION IS ASKED OR NO FURTHER ENQUIRY IS CONDUCTED, IT HAS TO BE P RESUMED THAT THE AO IS SATISFIED WITH THE EXPLANATION GIVEN BY THE ASSESSEE. 42. WE, THEREFORE, SUSTAIN THE ORDER OF THE CIT(A) AND REJE CT THE GROUND RAISED BY THE DEPARTMENT. 43. GROUND NO. 3 IS THEREFORE, REJECTED. 44. GROUND NO. 4 PERTAINS TO DELETION OF RS. 51,30,000/- ON ACCOUNT OF FRESH CAPITAL INTRODUCTION. IN THE INSTANT ISSUE, THE ASSE SSEE REITERATED HIS SUBMISSIONS BEFORE THE AO AND SUBMITTED, TH AT THE ASSESSEE DURING THE YEAR UNDER APPEAL HAS OPENING BALA NCE WITH THE PARTNERSHIP FIRM M/S THE PAREL CHEMIST OF (-17,52,850) AS D EBIT BALANCE SINCE ASSESSEE IS ALSO ADVANCING LOANS ON INTERES T AND MAKING INVESTMENTS AND HAVING PERSONAL BANK ACCOUNT WITH INDU SIND BANK. THE ASSESSEE WITHDRAW FROM TIME TO TIME HIS CAPITAL FROM TH E SAID FIRM BY ACCOUNT PAYEE CHEQUE AND DEPOSITED IN HIS PERSONAL B ANK ACCOUNT AND FROM THERE MADE INVESTMENT AND SOMETIMES WHATEVER WAS LEFT AFTER INVESTMENT, ASSESSEE RE-DEPOSITED THE SAID AMOUNT IN THE PARTNERSHIP FIRM THROUGH THE SAME BANK I.E, INDUSIND BA NK BY ACCOUNT PAYEE CHEQUES ONLY AND THE PARTNERSHIP FIRM H AD A CLAUSE IN THE PARTNERSHIP DEED FOR CHARGING OF INTEREST ON EXCESS DRAWN CAPITAL ALSO. THE COPY OF ACCOUNT I.E, CAPITAL ACCOUNT OF THE ASSESS EE AS SHRI GULSHAN H BHAKTIANI . : 4554 / // / / // / 2012 ITA NO. 4554/MUM/2012 10 APPEARING IN THE PARTNERSHIP FIRM M/S THE PAREL CHEMIST W ITH DATE- WISE ENTRY AND NARRATION WAS FILED ALONG WITH THE COPIES OF' PERSONAL BANK ACCOUNT OF ASSESSEE WHEREIN RECONCILIATION OF TILE SAID ENTRIES WAS HIGHLIGHTED AND POINTED TO AO. ON THE BASIS OF THE ABOVE D OCUMENTS THERE WAS NO REASON FOR AO TO DISBELIEVE THAT AN AMOUN T OF' RS. 51,30,000 RE-DEPOSITED OUT OF TOTAL WITHDRAWALS OF' RS. 1,50,6 1,150/- BY THE ASSESSEE THROUGH BANK ACCOUNT IS NOT EXPLAINED AND IN ABSENCE OF ANY CONTRARY EVIDENCE BEFORE THE AO SUCH PROPOSITION IS NOT ONLY INCORRECT BUT ILLEGAL, HENCE ADDITION OUGHT TO BE DELETED. 45. THE CIT(A), TOOK INTO CONSIDERATION THE ABOVE SUBMISSIO NS OF THE ASSESSEE, OBSERVED, I HAVE CONSIDERED THE ARGUMENTS OF THE LD. AR COPY OF THE CAPITAL ACCOUNT OF THE ASSESSEE AS APPEARING IN THE PARTNERSHIP FIRM, BANK STATEMENT OF THE ASSESSEE WERE ON THE RE CORDS OF THE AO WHICH CLEARLY SHOW THAT THE ASSESSEE HAD WITHDRA WN A SUM OF RS. 1,50,61,150/- FROM THE FIRM'S ACCOUNT BY CHE QUES AND DEPOSITED BACK ONLY RS. 51,30,000/- BY CHEQUES ONLY INTO THE CAPITAL ACCOUNT IN THE BOOKS OF THE FIRM. THUS THE WITHDRAWAL IS 3 TIMES MORE THAN THE DEPOSITS DURING THE YEAR AND ALL WITHDRAWALS AND DEPOSITS BEING BY CHEQUES, THERE IS NO QUESTION OF INTRODUCTION OF ANY FRESH CAPITAL AS CO NCLUDED BY THE AO. THE BANK STATEMENTS WERE ALREADY PROVIDED TO TH E AO VIDE LETTER DATED 3-11-2011 AND THE COPY OF THE LEDGER A CCOUNT WERE ALSO PROVIDED TO THE AO ON 7-12-2011. THE AO HAS CO MPLETELY FAILED TO LOOK INTO THESE FACTS AND POINT OUT ANY D ISCREPANCY IN THE BANK STATEMENTS OF THE ASSESSEE ON RECORD OF TH E AO. ACCORDINGLY THE ADDITION OF RS. 51,30,000/- AS UNEX PLAINED INCOME IS NOT JUSTIFIED AND THE SAME IS DIRECTED TO BE DELETED. 46. THE CIT(A), THEREFORE, DELETED THE ADDITION. 47. AGAINST THIS, THE DEPARTMENT IS BEFORE THE ITAT. 48. BEFORE US, THE DR SUPPORTED THE ORDER OF THE AO AND ALSO SUBMITTED THAT THE CIT(A) OUGHT TO HAVE PROVIDED THE OP PORTUNITY TO THE AO TO FURTHER VERIFY THE ISSUE IN QUESTION. 49. THE AR ON THE OTHER HAND SUBMITTED, THAT DATE-WISE LEDGER COPY OF ASSESSEE'S ACCOUNT OF M/S THE PAREL CHEMIST WAS FILED ALONG WITH FULL LEDGER COPY BEFORE THE AO. THE ASSESSEE HAD ALSO SUBM ITTED THE BANK STATEMENT AND DAY TO DAY SUMMARY BEFORE THE AO, VIDE SHRI GULSHAN H BHAKTIANI . : 4554 / // / / // / 2012 ITA NO. 4554/MUM/2012 11 EXPLANATION DATED 07.11.2011. THE INTEREST PAID ON EXCESS WITHDRAWALS BY THE ASSESSEE FROM THE FIRM WAS ALSO DECLAR ED BEFORE AO. THE AR REITERATED THAT THE ENTIRE EXPLANATION FILED BEFO RE AO IN THE FORM OF BANK STATEMENTS, LEDGER COPY OF FIRM AND THE CONNE CTED DETAILS WERE AVAILABLE AS EARLY FROM 03.11.2011 TO 07.12.2011. THER EFORE, IT WAS ON THIS BASIS, THE CIT(A) DELETED THE ADDITION. 50. WE HAVE HEARD THE ARGUMENTS AND PERUSED THE ORDE RS AND MATERIAL PLACED BEFORE US. WE FIND THAT THE CIT(A) EXAMINED T HE DETAILS THAT WERE FILED BEFORE THE AO AND ON THAT BASIS, CIT(A) CON CLUDED THAT COMPLETE DETAILS WERE BEFORE THE AO. TO GIVE ANOTHER OPPO RTUNITY TO THE AO TO EXAMINE THE DETAILS, WHICH ARE/WERE BEFORE HIM RIGHT FROM THE BEGINNING IS TO PUT THE ASSESSEE IN A DUAL JEOPARDY . 51. THE BASIS OF THE DECISION OF THE CIT(A), IS FACTUAL EVIDEN CE, ALREADY ON RECORD AND REITERATED BY THE ASSESSEE BEFOR E HIM. ON THIS BASIS, WE CANNOT FIND FAULT WITH THE ORDER OF THE CIT(A), WHICH WE SUSTAIN AND CONSEQUENTIALLY REJECT THE GROUND RAISED BY THE DEPARTMENT. 52. GROUND NO. 4 IS THEREFORE, REJECTED. 53. IN THE RESULT, THE APPEAL AS FILED BY THE DEPARTMENT IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 4 TH JUNE, 2014. SD/- SD/- ( . . . . ) ($ % $ % $ % $ %) !' !' !' !' !' !' !' !' (D. KARUNAKARA RAO) (VIVEK VARMA) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATE: 4 TH JUNE, 2014 ,// COPY TO:- 1) *+ / THE ASSESSEE. 2) ,-*+ / THE RESPONDENT. 3) THE CIT (A)-32, MUMBAI SHRI GULSHAN H BHAKTIANI . : 4554 / // / / // / 2012 ITA NO. 4554/MUM/2012 12 4) THE CIT-CITY-21, MUMBAI, 5) $67 ,/ __ , , / THE D.R. G BENCH, MUMBAI. 6) 7% 9 COPY TO GUARD FILE. !3 / BY ORDER / / TRUE COPY / / : / ; < , DY. / ASSTT. REGISTRAR I.T.A.T., MUMBAI * CHAVAN