The ITO, Ward-11(4), Ahmedabad V. M/s. Shravankumar Puranmal Shah,HUF, Ahmedabad

ITA 490/AHD/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 80292 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 6 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-08-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 06-08-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 25-02-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ROOP CHAND
• Assessee Lawyers: MANISH KAJI
• Keywords: Unexplained cash credit
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, AHMEDABAD BEFORE SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER AND SHRI N.S. SAINI, ACCOUNTANT MEMBER ITA NO.2190/AHD/2012 A.Y.2009-10 ITO, WARD-11(4), AHMEDABAD. VS M/S. PURANMAL DHANULAL SHAH (HUF) 118, NEW CLOTH MARKET, O/S RAIPUR GATE, RAIPUR, AHMEDABAD. PAN: AABHP 4811K (APPELLANT) (RESPONDENT) ITA NO.490/AHD/2013 A.Y.2009-10 ITO, WARD-11(4), AHMEDABAD. VS M/S. SHRAVANKUMAR PURANMAL SHAH (HUF) 118, NEW CLOTH MARKET, O/S. RAIPUR GATE, RAIPUR, AHMEDABAD. PAN: AACHS 8511C (APPELLANT) (RESPONDENT) REVENUE BY : SHRI ROOPCHAND, SR.D.R., ASSESSEE(S) BY : SHRI MANISH KAJI, AR / // / DATE OF HEARING : 06/08/2014 / DATE OF PRONOUNCEMENT: 28/08/2014 / O R D E R PER SHRI MUKUL KUMAR SHRAWAT, JUDICIAL MEMBER THESE TWO APPEALS OF THE REVENUE OF TWO DIFFERENT ASSESSEES HAVE ARISEN FROM THE ORDERS OF LEARNED CIT(A)-XVI, AHMED ABAD, VIDE TWO SEPARATE ORDERS, RESPECTIVELY, DATED 16 TH JULY, 2012 AND 3 RD DECEMBER, ITA NOS.2190/AHD/2012 & 490/AHD/2013 THE ITO WARD-11(4), AHMEDABAD VS. PURANMAL DHANUMAL SHAH (HUF) & M/S. SHRAVAN KUMAR PURANMAL SHAH (HUF) FOR A.YS. 2009-10 - 2 - 2012. THE BASIC FACTS OF THESE TWO APPEALS ARE IDEN TICAL, HENCE HEREBY CONSOLIDATED AND DECIDED BY THIS COMMON ORDER. 2. IN BOTH THESE CASES, REVENUE HAS CHALLENGED THE DELETION OF UNEXPLAINED CASH CREDIT TAXED U/S.68 OF IT ACT. IN THE CASE OF M/S. SHRAVAN KUMAR PURANMAL SHAH (HUF), THE ADDITION OF RS.15 LAC WAS MADE. 3. WHILE DELETING THE ADDITION, LEARNED CIT(A) HAS MENTIONED FEW FACTS AS UNDER: (REPRODUCED FROM THE ORDER OF M/S. SHRAVAN KUMAR P. SHAH (HUF). 2. IN THE INSTANT CASE, ORDER U/S.143(3) OF THE IT ACT WAS PASSED BY THE ASSESSING OFFICER ON 15.12.2011 DETERMINING TOTAL I NCOME OF THE APPELLANT AT RS.23,02,050/- AGAINST RETURNED INCOME OF RS.6,38,3 30/-. 2.1 AGGRIEVED BY THE SAID ORDER, THE APPELLANT HA S FILED THIS APPEAL AND RAISED THE FOLLOWING GROUND OF APPEAL WHICH ARE REP RODUCED AS UNDER :- THE RETURN OF INCOME HAS BEEN FILED SHOWING INCOME OF R 6,38,330/-. THE ASSESSING OFFICER HAS MADE ADDITION OF RS.15,00,000 /- ON ACCOUNT OF UNSECURED LOAN U/S 68 AND RS.1,63,724/- ON ACCOUNT OF INTEREST PAYMENT ON UNSECURED LOAN ADDED U/S 68 OF IT. ACT. THE INCOME TAX OFFICER HAS ERRED : I) IN MAKING ADDITION OF RS 15,00,000/- U/S 68 OF IT. ACT TREATING THE UNSECURED LOAN AS UNEXPLAINED. ALL THE CASH CREDITS ARE EXPLAINED. II) IN MAKING ADDITION OF RS 1,63,724/- OUT OF INTEREST PAYMENT ON ABOVE CASH CREDITS. BUT AS THE CASH CREDITS ARE EXPLAINED , NO INTEREST CAN BE DISALLOWED. 2.2 DURING THE COURSE OF APPELLATE PROCEEDINGS THE APPELLANT FILED WRITTEN SUBMISSIONS WHICH ARE REPRODUCED HEREUNDER :- 2. THE APPELLANT IS SOLE PROPRIETOR OF M/S, JAY AMBA TEXTILE DOING BUSINESS AS CLOTH MERCHANTS ON WHOLE SALE BASIS. TH E RETURN OF INCOME WAS FILED ON 01-09-2009 DECLARING TOTAL TAXABLE INCOME OF R 6,38,330/-. THE ASSESSMENT HAS BEEN COMPLETED ON 15-12-2011 ON TOTA L INCOME OF RS. 23,02,050/- AFTER MAKING FOLLOWING ADDITIONS WHICH ARE DISPUTED IN THIS APPEAL. ITA NOS.2190/AHD/2012 & 490/AHD/2013 THE ITO WARD-11(4), AHMEDABAD VS. PURANMAL DHANUMAL SHAH (HUF) & M/S. SHRAVAN KUMAR PURANMAL SHAH (HUF) FOR A.YS. 2009-10 - 3 - I) ADDITION OF UNSECURED LOANS U/S 68 OF TH E ACT RS. 15,00,000 II) DISALLOWANCE OF INTEREST PAID TO VARIOUS D EPOSITORS RS. 1,63,724 3. THE ABOVE ADDITIONS MADE BY THE LEARNED ASSESSIN G OFFICER ARE ARBITRARY AND UNWARRANTED BECAUSE THE LEARNED ASSES SING OFFICER HAS NOT APPRECIATED THE FACTS AND EVIDENCE PRODUCED DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS IN PROPER PERSPECTIVE. 4. SUBMISSION IN SUPPORT OF THE GROUNDS OF APPEAL A RE GIVEN BELOW: (I) ADDITION OF UNSECURED LOANS U/S 68 OF T HE IT ACT RS. 15,00,000 THERE WAS SURVEY AT THE BUSINESS PREMISES OF LALITK UMAR SHARMA & OTHER ON 31-08-2009 AND DURING THE COURSE OF SURVEY, STATEME NT OF SHRI RAMDINESH SHARMA WAS RECORDED AND IN HIS STATEMENT, SHRI RAMD MESH SHARMA HAS ADMITTED THAT HE WAS MANAGING BUSINESS AFFAIRS OF 6 1 PERSONS AND THE NAME OF THE PERSONS FROM WHOM THE ASSESSEE HAS TAKEN LOAN A RE INCLUDED IN THIS LIST. . 3.0 THE FIRST GROUND OF APPEAL IS REGARDING AN ADDITION OF RS.15,00,000/- U/S. 68 ON UNEXPLAINED UNSECURED LOAN AND THE SECOND GRO UND OF APPEAL IS REGARDING ADDITION ON ACCOUNT OF INTEREST PAYMENT O F RS. 1,63,724/- ON ABOVE CASH CREDITS. THE TWO GROUNDS BEING IDENTICAL ARE T AKEN TOGETHER. FACTS OF THE CASE DISCUSSED BY THE AO IN DETAIL IN THE ASSESSMEN T ORDER INDICATE THAT AO HAS MADE THE ADDITION OF THE ABOVE AMOUNT ON THE ST RENGTH OF STATEMENT OF SHRI RAM DINESH SHARMA RECORDED DURING THE COURSE O F A SURVEY PROCEEDINGS CONDUCTED UPON LALITKUMAR SHARMA & OTHERS ON 31-8-2 009 WHEREIN SHRI RAM DINESH SHARMA HAD ADMITTED THAT HE WAS ENGAGED INTO THE ACTIVITY OF MANAGING BUSINESS AFFAIRS OF 61 PERSONS AND THE PER SONS FROM WHOM APPELLANT HAD SHOWN TO HAVE OBTAINED LOAN WERE PART OF SUCH 61 PERSONS. THE AO THEREFORE DOUBTED THE GENUINENESS OF THE LOAN AN D MADE ADDITION U/S. 68 OF THE ACT ALONGWITH DISALLOWANCE OF CONSEQUENT CLA IM OF INTEREST ON THESE LOANS. 3.1 IT IS THE CASE OF THE APPELLANT THAT IT HAD FUL LY DISCHARGED THE BURDEN CAST UPON IT TO PROVE THE GENUINENESS OF SAID LOANS IN AS MUCH AS IT HAD FILED CONFIRMATION LETTERS, PAN DETAILS ETC. PLACING RELI ANCE IN THE CASE OF PRAGATI CO. OP. BANK 278 ITR 170 , DAHOD SAHKARI MANDALI, 2 82 ITR 321 AND RONY BUILDERS 256 ITR (GUJ), THE APPELLANT PLEADS THAT I T IS SETTLED LEGAL POSITION THAT SOURCE OF SOURCE CANNOT BE QUESTIONED. THE APP ELLANT ARGUED THAT AO HAS RELIED UPON MATERIAL AVAILABLE WITH THE DEPARTMENT BUT UNLESS SAID MATERIAL WAS MADE AVAILABLE TO THE APPELLANT AND CROSS EXAMI NATION AFFORDED, IT CANNOT BE USED. THE APPELLANT SUBMITS THAT IMPUGNED LOAN A MOUNTS HAS BEEN RECEIVED THROUGH BANKING CHANNELS INTEREST PAID AT MARKET RATES AND WHEREVER NECESSARY TDS HAS BEEN DEDUCTED. LT WAS SUBMITTED T HAT ON IDENTICAL FACTS, ADDITIONS WERE DELETED BY TRIBUNAL AND UPHELD BY HO N'BLE MUMBAI HIGH COURT IN THE CASE OF CIT VS U M SHAH 90 ITR 396. ON THE ISSUE OF NON ITA NOS.2190/AHD/2012 & 490/AHD/2013 THE ITO WARD-11(4), AHMEDABAD VS. PURANMAL DHANUMAL SHAH (HUF) & M/S. SHRAVAN KUMAR PURANMAL SHAH (HUF) FOR A.YS. 2009-10 - 4 - PRODUCTION OF DEPOSITORS, THE APPELLANT SUBMITS THA T THE SAID DEPOSITORS ARE WITNESS OF THE DEPARTMENT AND THE ONUS WAS ON THE A O. IT WAS CONSEQUENTLY, SUBMITTED THAT AS THE DEPOSITS ARE GENUINE, THE COR RESPONDING INTEREST IS ALSO GENUINE AND CANNOT BE DISALLOWED. 3.2 I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CA SE IN THE LIGHT OF SUBMISSIONS MADE BY THE APPELLANT AND THE MATERIAL AVAILABLE ON RECORDS. IN THIS REGARD, IT IS SEEN THAT ON IDENTICAL FACTS IN THE CASE OF ONE M/S. PURANMAL SHAH, HUF \/IDE APPEAL ORDER NO. CIT(A)-XVI/ITO/WD. 11(4)7396 /11-12 DATED 16.07.2012 FOR A.Y. 2009-10 IT HAS BEEN HELD BY ME THAT IN VIEW OF THE FACTS OF THE CASE, ADDITION U/S. 68 CANNOT BE SUSTAINED. REL EVANT PORTION OF THE APPELLATE ORDER MENTIONED SUPRA, IS REPRODUCED HERE UNDER:- .. 3.1 LIKEWISE IN THE CASE OF M/S. PURANMAL DHANUMAL SHAH (HUF) AN ADDITION OF RS.33,50,000/- WAS MADE U/S.68 OF IT AC T, VIDE AN ORDER U/S.143(3) DATED 13.12.2011 ON THE BASIS OF THE SUR VEY CONDUCTED ON 31.08.2009 AT THE PREMISES OF M/S. LALIT KUMAR SHAR MA AND OTHERS. IN THIS CASE AS WELL A STATEMENT OF SRI RAM DINESH SHA RMA WAS RECORDED. LEARNED CIT(A) HAS PASSED THE ORDER IN IDENTICAL FA SHION AS REPRODUCED ABOVE AND FINALLY DELETED THE IMPUGNED ADDITION BY ASSIGNING THOSE VERY REASONS AS DISCUSSED ABOVE. 4. NOW BEFORE US, LEARNED AR, MR. MANISH KAJI, HAS PLACED AN ORDER OF HONBLE ITAT B BENCH, AHMEDABAD PRONOUNCED IN THE CASE OF M/S. MUKESH KUMAR AND CO. (ITA NO.3270/AHD/2011) A.Y.200 8-09, ORDER DATED 24.08.2012 WHEREIN THE REVENUES APPEAL WAS D ISMISSED AND THE ORDER OF LEARNED CIT(A) WAS CONFIRMED. THEREFORE, T HE ARGUMENT OF LEARNED AR IS THAT IN A SITUATION WHEN AN ORDER ON WHICH THE LEARNED CIT(A) HAS RELIED UPON NOW STOOD CONFIRMED BY THE R ESPECTED ITAT, THEREFORE, A CONSISTENT VIEW IS EXPECTED TO BE TAKE N IN THESE TWO APPEALS AS WELL. HE HAS ALSO PLACED RELIANCE ON DIMCO SILK MILLS, 107 TAXMANN MAGAZINE 41. ITA NOS.2190/AHD/2012 & 490/AHD/2013 THE ITO WARD-11(4), AHMEDABAD VS. PURANMAL DHANUMAL SHAH (HUF) & M/S. SHRAVAN KUMAR PURANMAL SHAH (HUF) FOR A.YS. 2009-10 - 5 - 5. ON THE OTHER HAND, LEARNED SR.D.R., MR. ROOPCHAN D HAS PLACED RELIANCE ON THE ORDER OF THE AO. HE HAS ARGUED THAT EVEN AFTER PROVIDING ENOUGH OPPORTUNITIES THE ASSESSEE HAD NOT PLACED ON RECORD THE RELEVANT INFORMATION AS PRESCRIBED U/S. 68 OF IT ACT. 4. WE HAVE HEARD BOTH THE SIDES. ON TWO COUNTS, WE ARE NOT IN AGREEMENT WITH THE ARGUMENT OF LEARNED DR, FIRSTLY, THAT BOTH THE ASSESSEES HAVE DISCHARGED THEIR PRIMARY ONUS AS PRE SCRIBED U/S.68 OF IT ACT AND SECONDLY THAT THE ORDER ON WHICH LEARNED CI T(A) HAD PLACED RELIANCE STOOD CONFIRMED BY THE RESPECTED CO-ORDINA TE BENCH AS DISCUSSED ABOVE. WE, THEREFORE, HEREBY CONFIRM THE FACTUAL AS WELL AS LEGAL FINDINGS OF LEARNED CIT(A) AND FIND NO FORCE IN THE GROUNDS RAISED BY THE REVENUE IN RESPECT OF BOTH THE APPEALS. RESU LTANTLY, THESE TWO APPEALS OF THE REVENUE ARE HEREBY DISMISSED. 5. IN THE RESULT, BOTH THE APPEALS OF THE REVENUE A RE DISMISSED. SD/- SD/- (N.S. SAINI) (MUKUL KR. SHRAWAT) ACCOUNTANT MEMBER JUD ICIAL MEMBER AHMEDABAD; DATED 28/08/2014 PRABHAT KR. KESARWANI, SR. P.S. / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. !' / THE RESPONDENT. 3. #$#% ' '& / CONCERNED CIT 4. ' '&() / THE CIT(A)-III, AHMEDABAD 5. )*' %, ' ' % , ,-$ / DR, ITAT, AHMEDABAD ITA NOS.2190/AHD/2012 & 490/AHD/2013 THE ITO WARD-11(4), AHMEDABAD VS. PURANMAL DHANUMAL SHAH (HUF) & M/S. SHRAVAN KUMAR PURANMAL SHAH (HUF) FOR A.YS. 2009-10 - 6 - 6. *./ 0 / GUARD FILE. / BY ORDER, 1 11 1/ // /,' #2 ,' #2 ,' #2 ,' #2 ( DY./ASSTT.REGISTRAR) ' ' % ' ' % ' ' % ' ' % , , , , ,-$ ,-$ ,-$ ,-$ / ITAT, AHMEDABAD