BHAVESH RAMNIKLAL VORA HUF, MUMBAI V. ITO WD 19(3)(1), KALYAN

ITA 4716/MUM/2016

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 3478 (ITAT-MUMBAI)
• Duration Of Justice: 4 year(s) 7 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-03-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2011-2012
• Appeal Filed On: 12-07-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHREELALU PARDESHI
• Keywords: Transactions in derivatives; Additional evidence; Onus to prove; Set aside
• Section: 13; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, MUM BAI BEFORE SHRI SHAMIM YAHYA, AM AND SHRI RAM LAL NEGI, JM ITA NO. 4716/MUM/2016 (ASSESSMENT YEAR: 2011-12) M/S. BHAVESH RAMNIKLAL VORA HUF 702, PALAI HOUSE, NEW ANANT CO-OP. HSG. SOCIETY, PLOT NO. 390, SHANKAR MATHAM MARG, TELANG ROAD, MATUNGA C.R., MUMBAI-400 019 VS. INCOME TAX OFFICER WARD-19(3)(1), MUMBAI PAN/GIR NO. AAEHB 2495 J ( APPELLANT ) : ( RESPONDENT ) APPELLANT BY : NONE RESPONDENT BY : MS. SHREELALU PARDESHI DATE OF HEARING : 04.01.2021 DATE OF PRONOUNCEMENT : 02.03.2021 O R D E R PER SHAMIM YAHYA, A. M.: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-32, MUMBAI (L D.CIT(A) FOR SHORT) DATED 10.06.2016 AND PERTAINS TO THE ASSESSMENT YEAR (A.Y .) 2011-12. 2. THE GROUNDS OF APPEAL READ AS UNDER: 1. THE HONBLE COMMISSIONER OF INCOME TAX (APPEALS) -32 HAS ERRED BY CONSIDERING UNSECURED LOANS OF RS.88,08,548/- AS UN EXPLAINED CASH CREDIT U/S. 68 OF THE INCOME TAX INCOME TAX ACT, 1961, 1961. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A HINDU UNDIVIDED FAMILY (HUF) STATED TO BE ENGAGED IN THE BUSINESS OF F & O. ON P ERUSAL OF RETURN, A.O. NOTED THAT THE ASSESSEE HAS SHOWN HIS TOTAL INCOME AT RS.1,27,26,0 30/-, HOWEVER, AFTER SETTING OFF OF BROUGHT FORWARDED LOSSES PERTAINING TO A.Y. 2010-11 OF RS.5,62,16,190/-, THE TAXABLE TOTAL INCOME FOR THE YEAR UNDER CONSIDERATION WAS D ECLARED AT NIL. IN THIS CASE, THERE WAS 2 ITA NO. 4716/MUM/2016 M/S. BHAVESH RAMNIKLAL VORA HUF VS. ITO ALSO INFORMATION ON IR REGARDING ASSESSEES DEPOSI TS OF CASH TO THE TUNE OF RS.90.80 LAKHS IN THE ACCOUNTS HELD WITH BANK OF INDIA. IT W AS ALSO FOUND THAT THE ASSESSEE HAS ALSO CLAIMED UNSECURED LOANS AT RS.4,69,67,600/- IN HIS BALANCE SHEET AS ON 31.03.2011. 4. APROPOS THE ISSUE OF UNSECURED LOAN, THE ASSESSI NG OFFICER MADE THE ADDITION IN ABSENCE OF COMPLIANCE BY THE ASSESSEE. THE A.O. OBS ERVED AS UNDER: 5.2 IN THIS CASE, THERE WAS INFORMATION ON AIR REGA RDING ASSESSEES DEPOSITS OF CASH TO THE TUNE OF RS.90.80 LAKHS IN HIS ACCOUNTS HELD WITH BANK OF INDIA. THE ASSESSEE DURING THE COURSE OF HEARING WAS ASKED TO EXPLAIN THE NATURE AND SOURCE OF CASH DEPOSITS MADE BY HIM. IN RESPONSE, IT WAS E XPLAINED THAT IT WAS MADE OUT OF CASH PAYMENT RECEIVED ON PROVIDING HIS ADVISORY SERVICES (F&O) TO VARIOUS PERSONS. THE ASSESSEE WAS, THEREFORE, ASKED TO PROV IDE THE FULL DETAILS OF HIS ADVISORY SERVICES WITH SUPPORTING DOCUMENTARY EVIDE NCES AND ALSO THE DETAILS GIVING THE NAME AND COMPLETE ADDRESSES TO THE PERSO N/PARTIES TO WHOM SUCH ADVISORY SERVICES ARE PROVIDED ALONG WITH THE AMOUN T CHARGED AND THE NATURE OF SERVICES RENDER, IN ORDER TO VERIFY THE SAME. THE A SSESSEE WAS ALSO ASKED TO FURNISH THE DETAILS OF HIS EDUCATIONAL QUALIFICATION TO JUS TIFY HIS ABOVE CASE. IN RESPONSE, THE ASSESSEE HAS FURNISHED ONLY THE SH EETS SHOWING THE DETAILS OF FEES FOR ADVISORY SERVICES RECEIVED ON THE WEEKL Y BASIS FOR THE PERIOD FROM 01.04.2010 TO 13.05.2010 ONLY, AGGREGATING TO RS.5, 05,704/-. ON ITS PERUSAL, IT WAS FURTHER OBSERVED THAT THE ASSESSEE HAS MENTIONED TH EREIN ONLY THE NAME OF THE PERSON, AREA OF RESIDENCE SUCH AS DADAR (W), BANDRA (E), ETC. AND AMOUNT CHARGED. HOWEVER, NO ANY DETAIL SHOWING NATURE OF SERVICES R ENDERED, PROOF FOR RECEIPT OF FEES ETC. HAS BEEN FILED IN SUPPORT OF CLAIM. EVEN THE BASIS DETAILS VIZ. THE FULL ADDRESS OF THE PERSON, PAN HAS NOT BEEN FILED. THUS , THE PRIMARY ONUS TO PROVE THE GENUINENESS OF THE TRANSACTION AND THE IDENTITY OF THESE PERSONS HAS NOT BEEN DISCHARGED BY THE ASSESSEE. 5. UPON THE ASSESSEES APPEAL, THE LD. CIT(A) REFER RED TO THE ADDITIONAL EVIDENCES SUBMITTED BY THE ASSESSEE. HE NOTED THAT IN REMAND, THE A.O. HAS SUBMITTED NOT TO ADMIT THE ADDITIONAL EVIDENCE. HOWEVER, THE LD. CIT(A) AC CEPTED THEM AND PROCEEDED TO ACCEPT THE SAME. 6. HE ADJUDICATED THE ISSUE AFTER ACCEPTING THE CON CESSION BY THE ASSESSEE. HE HELD AS UNDER: 6.1.1 I FIND THAT OUT OF TOTAL LOANS OF RS.4,69,67, 600/- THE APPELLANT HAS BEEN ABLE TO PRODUCE CONFIRMATION OF ONLY RS.4,23,57,053/-. I N HIS WRITTEN SUBMISSIONS DT. 27.11.2015 THE APPELLANT HAS ADMITTED THAT LOAN CON FIRMATIONS FROM THREE PARTIES TOTALING TO RS.46,10,548/- HAVE NOT BEEN PRODUCED B Y HIM. DURING THE COURSE OF HEARING ON 09.06.2016, THE AR ALSO CONCEDED THAT CO NFIRMATION OF LOAN FOR 3 ITA NO. 4716/MUM/2016 M/S. BHAVESH RAMNIKLAL VORA HUF VS. ITO RS.46,10,548/- ARE NOT AVAILABLE AND THAT THE SAME MAY BE ASSESSED AS INCOME. APART FROM THIS THE A.O. IN HIS REMAND REPORT HAS A LSO POINTED OUT THAT HE HAD ISSUED NOTICES U/S.133(6) TO THE 13 PARTIES DURING REMAND PROCEEDINGS. OUT OF THESE NOTICES ISSUED TO FOUR PARTIES VIZ. (SHRI JIGNESH S HETH RS.3,58,000/-, PRAKASH KADAM RS.7,00,000/-, PRATIBHA KAMAM-RS.24,00,000 & UNIQUE CREATION RS.2,51,43,781/-) HAVE BEEN RETURNED BY THE POSTAL AUTHORITIES WITH THE REMAKRS LEFT/NOT CLAIMED. THE A.O. HAS ALSO POINTED OUT T HAT IN THE CASE OF ONE OF THE LOAN CREDITORS MRS. NUTAN VORA, WHO STATED TO HAVE GIVEN A LOAN OF RS.7,40,000, THERE IS A CASE DEPOSIT OF RS.4,00,000/- IN HER BANK ACCOUNT ON 11.03.2011 AND ON THE SAME DATE SHE HAS ISSUED A CHEQUE TO THE ASSESSEE. SIMIL ARLY ON 23.03.2011 THERE IS A CASH DEPOSIT OF RS.2,00,000 IN HER BANK ACCOUNT AND A CHEQUE OF THE SAME AMOUNT HAS BEEN ISSUED TO THE APPELLANT. THE A.O. ALSO POI NTED OUT THAT NUTAN VORA HAS NOT FILED HERE RETURN OF INCOME. THE A.O. FURTHER P OINTED OUT THAT IN THE CASE OF UNIQUE CREATION THERE HAVE BEEN CERTAIN CASH DEPOSI TS AFTER WHICH CHEQUES HAVE BEEN ISSUED TO THE APPELLANT. A COPY OF THIS REMAND REPORT WAS HANDED OVER TO THE APPELLANT REQUESTING HIM FOR A REJOINDER. 6.1.2 DURING THE COURSE OF HEARING ON 09.06.2016 TH E AR SUBMITTED THAT CONFIRMATION FROM THREE UNRELATED PARTIES VIZ. SHRI JIGNESH SHETH RS.3,58,000, PRAKASH KADAM RS.7,00,000 & PRATIBHA KADAM RS.2 4,00,000 WHICH WERE SUBMITTED AS ADDITIONAL EVIDENCE COULD NOT BE SUBST ANTIATED BY HIM DURING THE REMAND PROCEEDINGS. THE AR, THEREFORE, CONCEDED THA T THESE LOANS CANNOT BE SUBSTANTIATED BY HIM. SIMILARLY, IN THE CASE OF NUT AN VORA, THE AR CONCEDED THE MATTER. FROM THE ABOVE, IT COULD BE SEEN THAT THE APPELLAN T HAS CONCEDED THAT HE IS NOT ABLE TO PRODUCE ANY CONFIRMATION OR ANY DETAILS REGARDING LOANS AVAILED OF RS.46,10,548 FROM THREE PARTIES AS WELL AS LOAN OF RS.3,58,000 FROM JIGNESH SHETH, RS.7,00,000 FROM PRAKASH KADAM, RS.24,00,000 FROM P RATIBHA KADAM & NTUAN VORA RS.7,40,000. I HAVE CONSIDERED THE EXPLANATION IN RESPECT OF UNIQUE CREATION AND THE SAME APPEARS REASONABLE AND SUBSTANTIATED. I ALSO FIND THAT THE A.O. IN HIS REMAND REPORT SEEMS TO HAVE ACCEPTED THE OTHER LOAN CREDITORS. I THEREFORE HOLD THAT THE ADDITION OF RS.4,69,67,600 IS TO BE RESTRICTED TO RS.88,08,548 (RS.46,10,548 + RS.3,58,000 + RS.7,00,000 + RS.7,40,000). THE A.O. IS DIRECTED ACCORDINGLY AND GROUND NO.1 IS PARTLY ALLOWED. 7. AGAINST THE ABOVE ORDER, THE ASSESSEE IS IN APPE AL BEFORE US. 8. NONE APPEARED FOR AND ON BEHALF OF THE ASSESSEE DESPITE NOTICE SENT. HENCE, WE PROCEEDED TO ADJUDICATE THE ISSUE BY HEARING THE LD . DEPARTMENTAL REPRESENTATIVE AND PERUSING THE RECORDS. 9. UPON CAREFUL CONSIDERATION, WE NOTE THAT THE LD. CIT(A) HAS GRANTED SUBSTANTIAL RELIEF TO THE ASSESSEE. HOWEVER, THE ASSESSEE IS CO NTESTING THE SAME. DESPITE CONCEDING 4 ITA NO. 4716/MUM/2016 M/S. BHAVESH RAMNIKLAL VORA HUF VS. ITO BEFORE THE LD. CIT(A) WITH RESPECT TO SOME OF THE L OANS REMAINING UNCONFIRMED, THE ASSESSEE HAS RAISED AN APPEAL. MOREOVER, DESPITE NO TING THAT THE A.O. HAS OBSERVED THAT THE ADDITIONAL EVIDENCE SHOULD NOT BE ADMITTED, THE LD. CIT(A) HAS HELD THAT THE A.O. IN HIS REMAND REPORT SEEMS TO HAVE ACCEPTED THE OTHER LOAN CREDITORS. HENCE, WE FIND THAT THIS IS OBVIOUS CONTRADICTION IN CIT(A)S OBSERVATI ON. HENCE, IN THE INTEREST OF JUSTICE, WE SET ASIDE THE ISSUE TO THE FILE OF A.O. FOR CONSIDE RATION ANEW. 10. IN THE RESULT, THE ASSESSEES APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED UNDER RULE 34(4) OF THE INCOME TAX (APPELLATE TRIBUNAL) RULES, 1962, BY PLACING THE DETAILS ON THE NOTICE BOARD ON 02.03.20 21 SD/- SD/- (RAM LAL NEGI) (SHAMIM YAHYA) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI; DATED : ROSHANI , SR. PS COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. CIT - CONCERNED 5. DR, ITAT, MUMBAI 6. GUARD FILE BY ORDER, (DY./ASSTT. REGISTRAR) ITAT, MUMBAI