T.Sherafudeen, Malappuram V. ITO, Tirur

ITA 483/COCH/2011

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 2508 (ITAT-COCHIN)
• Duration Of Justice: 2 year(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-06-2013
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Next Hearing Date: 17-04-2013
• Assessment Year: 2004-2005
• Appeal Filed On: 15-06-2011
• Court: TRIBUNAL
• Department Lawyers: SUSAN GEORGE VARGHESE
• Assessee Lawyers: C B M WARRIER
• Keywords: Gift; Revision of order; Block assessment
• Section: 143(3); 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE S/SHRI N.R.S.GANESAN, JM AND B.R.BASKAR AN, AM I.T.A. NOS.482,483 & 484/COCH/2011 ASSESSMENT YEARS : 2003-04 & 2004-05 SHRI T.SHERAFUDEEN, THEYYAMPATTIL HOUSE, KALPAKANCHERY, MALAPPURAM [PAN : ABTPT 0160G] VS. THE INCOME TAX OFFICER, WARD-1, TIRUR. (ASSESSEE -APPELLANT) (REVENUE-R ESPONDENT) ASSESSEE BY SHRI C. B.M. WARRIER, CA REVENUE BY SMT. SUSAN GEORGE VARGHESE, SR. DR DATE OF HEARING 17/04/2013 DATE OF PRONOUNCEMENT 28/06/2013 O R D E R PER B.R.BASKARAN, ACCOUNTANT MEMBER: ALL THE THREE APPEALS FILED BY THE ASSESSEE AR E DIRECTED AGAINST THE ORDERS PASSED BY LD CIT(A)-II, CALICUT AND THEY RELATE TO THE ASSESS MENT YEARS 2003-04 TO 2005-06. THESE APPEALS WERE HEARD TOGETHER AND HENCE THEY AR E BEING DISPOSED OF BY THIS COMMON ORDER, FOR THE SAKE OF CONVENIENCE. 2. IN ALL THESE YEARS, THE ASSESSEE IS ASSAILING TH E DECISION OF LD CIT(A) IN CONFIRMING THE ADDITION MADE U/S 68 OF THE ACT, THE DETAILS OF WHICH ARE GIVEN BELOW:- (A) ASSESSMENT YEAR : 2003-04:- T. ABDURAHIMAN - RS.21,00,000/- T. MANSOOR ALI - RS. 8,00,000/- (B) ASSESSMENT YEAR : 2004-05 T. MOHAMMED HAJI - RS.29,92,975/- I.T.A. NOS. 482, 483 & 484/COCH/2011 2 (C) ASSESSMENT YEAR : 2005-06 T. ABDURAHIMAN - RS.15,92,936/- IN ASSESSMENT YEAR 2005-06, THE ASSESSEE IS ASSAILI NG THE DECISION OF LD CIT(A) IN CONFIRMING THE ASSESSMENT OF OUTSTANDING LOAN AMOUN TS AGGREGATING TO RS.10,69,550/-. 3. THE FACTS RELATING TO THE CASE ARE STATED IN BRIEF. THE ASSESSMENT IN THE HANDS OF THE ASSESSEE FOR ALL THE THREE YEARS UNDER CONSIDER ATION WERE COMPLETED ORIGINALLY U/S 143(3) OF THE ACT. SUBSEQUENTLY, THE ADMINISTRATIV E COMMISSIONER PASSED REVISION ORDERS DIRECTING THE AO TO RE-DO THE ASSESSMENT BY EXAMINING THE CASH CREDITS DISCUSSED SUPRA. ACCORDINGLY, THE AO COMPLETED THE REASSESSMENTS BY ASSESSING THE CASH CREDITS CITED ABOVE. THE ASSESSEE CHALLENGED THE ADDITIONS BY FILING APPEALS BEFORE LD CIT(A), BUT COULD NOT SUCCEED. HENCE, TH E ASSESSEE HAS FILED THESE APPEALS BEFORE US. 4. THE LD COUNSEL FOR THE ASSESSEE SUBMITTED TH AT THE ASSESSMENT OF ALL THE YEARS UNDER CONSIDERATION WAS ORIGINALLY COMPLETED UNDER BLOCK ASSESSMENT PROCEEDINGS, CONSEQUENT TO THE SEARCH OPERATIONS, IN THE CENTRAL CIRCLE. AT THAT POINT OF TIME, THE CASH CREDITS REFERRED ABOVE, WERE ACCEPTED BY THE T HEN ASSESSING OFFICER AFTER CARRYING OUT DUE EXAMINATION OF THE SAME. THE ASSESSMENTS U NDER CONSIDERATION WERE REOPENED CONSEQUENT TO THE REVISION ORDERS PASSED B Y LD CIT AND DURING THE COURSE OF ASSESSMENT PROCEEDINGS, ASSESSEE FURNISHED ALL THE DETAILS RELATING TO THESE CREDITS. HE FURTHER SUBMITTED THAT SHRI T.ABDURAHIMAN IS CARRYI NG ON BUSINESS IN A GULF COUNTRY FOR THE PAST SEVERAL YEARS AND IS ALSO ASSESSED TO INCO ME TAX IN INDIA. HE IS ALSO CARRYING ON BUSINESS IN INDIA AS ONE OF THE PARTNERS IN THEY YAMPATTIL JEWELLERS. HE SUBMITTED THAT SHRI T. MASOOR ALI OBTAINED FUNDS FROM SHRI T. ABDURAHIMAN, CITED ABOVE, AND GAVE PART OF THE SAID FUNDS TO THE ASSESSEE HEREIN. SHR I MOHAMED HAJI IS DOING BUSINESS IN A GULF COUNTRY FOR THE PAST SEVERAL YEARS. HE FURTHE R SUBMITTED THAT THE ASSESSEE FURNISHED THE ASSESSMENT DETAILS, THE BANK DETAILS, PAYMENT DETAILS ETC. OF SHRI T.ABDURAHIMAN, SHRI T.MASOOR ALI AND SHRI MOHAMED H AJI TO THE ASSESSING OFFICER. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AS SESSEE FURNISHED COPIES OF NRE I.T.A. NOS. 482, 483 & 484/COCH/2011 3 ACCOUNTS FOR THE PAST SEVERAL YEARS, WHICH PROVE TH E CREDIT WORTHINESS OF THE ASSESSEE. SINCE SHRI ABDURAHIKAN AND SHRI MASOOR ALI ARE THE BROTHERS OF THE ASSESSEE, THEIR IDENTITY IS ALSO PROVED. SINCE THE FUNDS WERE TRAN SFERRED THROUGH BANKING CHANNELS, THE GENUINENESS OF THE TRANSACTIONS ARE ALSO PROVED. TH E LD COUNSEL FURTHER SUBMITTED THAT THE ASSESSEE HAS DISCHARGED THE PRIMARY BURDEN OF P ROOF PLACED UPON HIM UNDER SECTION 68 OF THE ACT AND FURTHER THE ASSESSING OFF ICER DID NOT FIND ANY DEFICIENCY OR MISTAKE IN THE EXPLANATIONS FURNISHED IN THIS REGAR D. HE FURTHER SUBMITTED THAT THE ASSESSING OFFICER, DESPITE FURNISHING OF ALL THE RE QUIRED PARTICULARS, HAS ASSESSED THESE CASH CREDITS IN THE HANDS OF THE ASSESSEE MERELY ON THE BASIS OF SURMISES AND CONJECTURES. HE FURTHER SUBMITTED THAT THE DECISIO N RENDERED BY THE HONBLE SUPREME COURT IN THE CASE OF MOHANA KALA (291 ITR 217) DOES NOT APPLY TO THE FACTS OF THE INSTANT CASE. IN THE CASE OF MOHANAKALA, THE ASSES SEE THEREIN RECEIVED GIFTS BY WAY OF DEMAND DRAFTS AND FURTHER THE IDENTITY OF THE DONOR WAS NOT PROVED. HOWEVER, IN THE INSTANT CASE, THE FUNDS WERE RECEIVED FROM NRE ACCOU NT MAINTAINED BY THE RESPECTIVE CREDITOR. HE FURTHER SUBMITTED THAT THE ASSESSEE C ANNOT BE EXPECTED TO PROVE THE SOURCE OF THE SOURCES. ACCORDINGLY, HE SUBMITTED T HAT THE LD CIT(A) WAS NOT JUSTIFIED IN CONFIRMING ASSESSMENT OF CASH CREDITS, REFERRED ABO VE. 5. ON THE CONTRARY, THE LD D.R SUBMITTED THAT TH E ASSESSEE HAS FAILED TO PROVE THE CASH CREDITS AND HENCE THE LD CIT(A) HAS CONFIRMED THE ASSESSMENT OF CASH CREDITS REFERRED ABOVE. 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERU SED THE RECORD. WE NOTICE THAT THE ASSESSING OFFICER HAS ASSESSED THE CASH CREDITS ON THE REASONING THAT THE ASSESSEE DID NOT FILE ANY CONFIRMATION LETTERS OBTAINED FROM THE CREDITORS/DONORS. HOWEVER, DURING THE COURSE OF HEARING, THE LD COUNSEL FOR THE ASSES SEE FURNISHED COPIES OF DELIVERY BOOK EVIDENCING FILING OF LETTERS BEFORE THE ASSESSING O FFICER. HENCE, THE OBSERVATION OF THE ASSESSING OFFICER THAT THE ASSESSEE DID NOT FILE AN Y CONFIRMATION LETTER MAY NOT BE CORRECT. ACCORDING TO THE LD A.R, THE ASSESSEE HAS FURNISHED THE BUSINESS DETAILS OF SHRI T.ABDURAHIMAN AND SHRI T. MOHAMMED HAJI. HE ALSO SUBMITTED THAT THE ASSESSEE FURNISHED THE PAYMENT DETAILS, BANK DETAILS ETC. I T IS ALSO SUBMITTED THAT SHRI I.T.A. NOS. 482, 483 & 484/COCH/2011 4 T.ABDURAHIMAN IS ASSESSED TO INCOME TAX IN INDIA AN D HE IS ALSO ONE OF THE PARTNERS IN M/S THEYYAMPATTIL JEWELLERY. WE NOTICE THAT THE AS SESSING OFFICER HAS SIMPLY ASSESSED THE CASH CREDITS WITHOUT EXAMINING THE VERACITY OF THE EXPLANATIONS FURNISHED BY THE ASSESSEE IN AN OBJECTIVE MANNER. IN OUR VIEW, THE ASSESSING OFFICER SHOULD HAVE ADDRESSED AND MET THE EXPLANATIONS FURNISHED BY THE ASSESSEE BEFORE REJECTING THE SAME. WE FURTHER NOTICE THAT THE LD CIT(A) HAS ALS O CONFIRMED THE ASSESSMENT OF CASH CREDITS BY REFERRING TO THE JUDICIAL PRONOUNCEMENTS AND HE ALSO DID NOT OBJECTIVELY ANALYSE THE EXPLANATIONS FURNISHED BY THE ASSESSEE. UNDER THESE CIRCUMSTANCES, IN OUR VIEW, THE CASH CREDITS REFERRED ABOVE REQUIRES FRES H EXAMINATION IN ALL THE THREE YEARS. ACCORDINGLY, WE SET ASIDE THE ORDER OF LD CIT(A) IN ALL THE THREE YEARS IN RESPECT OF THE CASH CREDITS REFERRED ABOVE AND RESTORE THEM TO THE FILE OF THE ASSESSING OFFICER WITH THE DIRECTION TO EXAMINE THEM AFRESH BY CONSIDERING THE EXPLANATIONS AND DOCUMENTS FURNISHED BY THE ASSESSEE IN AN OBJECTIVE MANNER AN D TAKE APPROPRIATE DECISION IN ACCORDANCE WITH THE LAW. THE ASSESSEE IS ALSO FREE TO FURNISH ANY OTHER DOCUMENT AND EXPLANATIONS IN SUPPORT OF THE CASH CREDITS. 7. IN ASSESSMENT YEAR 2005-06, THE ASSESSING OFF ICER HAS ASSESSED A SUM OF RS.10,69,550/- PERTAINING TO LONG OUTSTANDING CREDI TS. THOUGH THE ASSESSEE SUBMITTED BEFORE THE ASSESSING OFFICER THAT THE LIABILITY IN RESPECT OF THOSE CREDITS STILL SUBSISTS, YET THE AO ASSESSED THE ABOVE SAID AMOUNT. THE SAID AS SESSMENT WAS CONFIRMED BY THE LD CIT(A) ALSO. 8. WE HAVE HEARD THE RIVAL CONTENTIONS ON THIS AND PERUSED THE RECORD. THERE IS NO DISPUTE WITH REGARD TO THE FACT THAT THE FUNDS IN R ESPECT OF THE THREE CREDITS AGGREGATING TO RS.10,69,550/- WERE OBTAINED LONG BACK AND NO A DDITION WAS MADE IN RESPECT OF THOSE CREDITS. THE ASSESSEE HAS FURNISHED THE DETA ILS REPAYMENTS MADE IN THE SUBSEQUENT YEARS AND ALSO FILED CONFIRMATION LETTER S FROM SOME OF THE CREDITORS CONFIRMING THE OUTSTANDING LIABILITY. UNDER THESE CIRCUMSTANCES, IN OUR VIEW, THE ASSESSING OFFICER WAS NOT CORRECT IN LAW IN ASSESSI NG AN OUTSTANDING LIABILITY, AS NO PROVISION IN THE ACT ENABLES SUCH AN ASSESSMENT. H ENCE, THE LD CIT(A) WAS ALSO NOT JUSTIFIED IN CONFIRMING THE ASSESSMENT OF RS.10,69 ,550/-. ACCORDINGLY, WE SET ASIDE THE I.T.A. NOS. 482, 483 & 484/COCH/2011 5 ORDER OF LD CIT(A) ON THIS ISSUE AND DIRECT THE ASS ESSING OFFICER TO DELETE THE ASSESSMENT OF RS.10,69,550/- REFERRED ABOVE. 9. IN THE RESULT, ALL THE THREE APPEALS FILED B Y THE ASSESSEE ARE TREATED AS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED ACCORDINGLY ON 28-06-2 013. SD/- SD/- (N.R.S.GANESAN) (B.R.BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER PLACE: KOCHI DATED: 28TH JUNE, 2013 GJ COPY TO: 1. SHRI T.SHERAFUDEEN, THEYYAMPATTIL HOUSE, KALPAKA NCHERY, MALAPPURAM. 2.THE INCOME TAX OFFICER, WARD-1, TIRUR. 3 THE COMMISSIONER OF INCOME-TAX(APPEALS)-II, CALIC UT. 4.THE COMMISSIONER OF INCOME-TAX, CALICUT. 5. D.R., I.T.A.T., COCHIN BENCH, COCHIN. 6. GUARD FILE. BY ORDER (ASSISTANT REGISTRAR ) I.T.A.T, COCHIN