ITO 19(2)(1), MUMBAI V. BIPIN D. SAVLA, MUMBAI

ITA 4993/MUM/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 83961 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 3 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-10-2014
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 02-07-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: VIJAY KUMAR BORA
• Keywords: Opportunity of being heard
• Section: 133(6); 68

Judgement Text

, , , , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES B, MUMBAI , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER AND SHRI N. K. BILLAIYA, ACCOUNTANT MEMBER ITA NO.4993/MUM/2013 (A.Y. 2009-10) ITO-19(2)(1) ROOM NO.312, 3 RD FLOOR PIRAMAL CHAMBERS, LALBAUG PAREL MUMBAI-400 012. / VS. MR. BIPIN D. SAVLA 505, LEELA APT. PRABHAT COLONY ROAD NO.9, SANTACRUZ (E) MUMBAI-400 098. ( ! / // / APPELLANT) ( '# ! / RESPONDENT) P.A. NO.AAFPS 8571 H ! $ % $ % $ % $ % /APPELLANT BY : SHRI VIJAY KUMAR BORA '# ! $ % $ % $ % $ % /RESPONDENT BY : NONE $ &'( / / / / DATE OF HEARING : 27.10.2014 )*+ $ &'( / DATE OF PRONOUNCEMENT : 29.10.2014 ,- ,- ,- ,- / / / / O R D E R PER JOGINDER SINGH (JM) : THE REVENUE IS AGGRIEVED BY THE IMPUGNED ORDER DAT ED 16.4.2013 OF THE LD. FIRST APPELLATE AUTHORITY DELE TING THE ADDITION OF RS.95,03,914/- MADE U/S. 68 OF THE INCOME TAX ACT. THE LD. DR SHRI VIJAY KUMAR BORA DEFENDED THE ADDITION MADE BY THE A O ON THE PLEA THAT THE LD. CIT(A) DELETED THE ADDITION WITHOUT AP PRECIATING THE FACT THAT THE ASSESSEE DID NOT ESTABLISH THE GENUINENESS OF T HE CREDITORS/LENDERS. ITA NO.4993/MUM/2013 2 NONE APPEARED FOR THE ASSESSEE INSPITE OF SERVICE O F NOTICE, THEREFORE, WE HAVE NO OPTION BUT TO PROCEED EX-PARTE QUA THE ASSESSEE AND TEND TO DISPOSE OF THE APPEAL ON THE BASIS OF MATERIAL AVAI LABLE ON RECORD. 2. WE HAVE CONSIDERED THE SUBMISSIONS OF LD. DR AND PERUSED THE MATERIAL AVAILABLE ON RECORD . BEFORE COMING TO ANY CONCLUSION WE ARE REPRODUCING HEREUNDER THE RELEVANT PORTION FROM THE CONCLUSION ARRIVED AT BY THE LD. CIT(A):- IN APPELLATE PROCEEDINGS IT WAS ARGUED THAT IN ALL THE SIX CASES CONSIDERED BY AO THE BALANCES ARE OLD AND HAV E BEEN CARRIED FORWARD IN BOOKS OF ACCOUNTS FROM EARLIER Y EARS. THEREFORE, IN THIS SITUATION, ADDITION TO INCOME IS NOT JUSTIFIED. LD. COUNSEL OF THE APPELLANT WAS ASKED T O FILE BALANCE SHEET OF THE EARLIER YEARS AND COPIES OF LE DGER ACCOUNTS OF ALL THE SIX PARTIES FOR CURRENT YEAR AS WELL AS EARLIER YEARS. ON ANALYSIS OF THE SAME, IT IS NOTIC ED THAT THE AMOUNT OF RS.50,000/- IN THE NAME OF SHRI NIRAV ADH VARYU IS NOT COMING FROM EARLIER YEAR BUT IS AN AMOUNT WH ICH PERTAINS TO THE CURRENT YEAR ONLY. EVEN IN APPELLAT E PROCEEDINGS CONFIRMATION FROM THE PARTY HAS NOT BEE N FILED. IN RESPECT OF THE REMAINING FIVE CASES, A PERUSAL O F COPY OF ACCOUNT CONFIRMS THAT BALANCES HAVE BEEN COMING FRO M EARLIER YEARS. CONSEQUENTLY, NO ADDITION IN THE PRE SENT ASSESSMENT YEAR IS POSSIBLE. THEREFORE ADDITION OF RS.50,000/- IN THE NAME OF SHRI NIRAV ADHVARYU IS CONFIRMED AND THE BALANCE ADDITION IS DELETED. 2.1 IF THE REASONS FOR MAKING THE ADDITION BY THE L D. AO, CONCLUSION DRAWN BY THE CIT(A) IN THE IMPUGNED ORDE R AND THE ASSERTION MADE BY THE LD. DR ARE KEPT IN JUXTAPOSITION, AND I F , ANALYSED, WE NOTE THAT THERE IS NO FINDING IN THE IMPUGNED ORDER, WHE THER THE ASSESSEE FULFILLED THE CONDITIONS ENSHRINED U/S. 68 OF THE A CT. THE LAW IS WELL SETTLED THAT THE ONUS OF PROVING THE SUM, FOUND TO HAVE BEEN RECEIVED BY ITA NO.4993/MUM/2013 3 THE ASSESSEE IS ON HIM. THE ASSESSEE IS TO SATISFAC TORILY EXPLAIN THE NATURE AND SOURCE OF SUCH SUMS. OUR VIEW IS FORTIFI ED BY THE DECISION FROM HON'BLE APEX COURT IN THE CASE OF ROSHAN DI HATTI VS. CIT (107 ITR 938) (SC) AND KALE KHAN MOHAMMED HANIF (50 ITR 1) (S C) . THE HON'BLE APEX COURT IN SUMATI DAYAL (214 ITR 801) (SC) HELD THAT, IF THE EXPLANATION OF THE ASSESSEE IS UNSATISFACTORY THEN THE AMOUNT CAN BE TREATED AS INCOME OF THE ASSESSEE. IN NEMICHAND KOTHARI (136 TAXMAN 213) THE ASSESSEE HAS TO PROVE THE CREDITWORTHINESS OF THE CREDITOR. THE RAJASTHAN HIGH COURT IN R.S. RATHORE (212 ITR 390)(RA J.) HELD THAT EACH ENTRY MUST EXPLAINED SEPARATELY BY THE ASSESSEE. I T IS ALSO NOTED THAT DURING ASSESSMENT PROCEEDINGS THE ASSESSEE WAS ASKE D TO FILE THE COMPLETE ADDRESSES OF THE CREDITORS FOR VERIFICATIO N BUT THESE ADDRESSES WERE FILED ON 18/11/2011. THE LD.AO ISSUED NOTICES TO THE CLAIMED CREDITORS/LENDERS CALLING FOR INFORMATION WITH RESP ECT TO TRANSACTIONS. AS PER THE AO SUCH NOTICES ISSUED U/S. 133(6) WERE EIT HER NOT SERVED OR NOT RESPONDED. THUS, THE AMOUNT OF RS.95,53,914/- REMAI NED UNVERIFIABLE. EVEN IF THESE ARE OLD BALANCES STILL THE NATURE AND SOURCE HAS TO BE EXPLAINED BY THE ASSESSEE. WE ARE IN AGREEMENT WIT H THE OBSERVATION MADE IN THE ASSESSMENT ORDER THAT ONUS IS UPON THE ASSESSEE TO ESTABLISH THE GENUINENESS OF THE CREDITS. MERE CLAI M IS NOT ENOUGH. HOWEVER, KEEPING IN VIEW THE TOTALITY OF FACTS WE R EMAND THIS ISSUE TO THE FILE OF THE LD.AO TO EXAMINE THE CLAIM OF THE ASSES SEE . THE ASSESSEE IS ITA NO.4993/MUM/2013 4 ALSO DIRECTED TO FULFILL THE CONDITIONS ENSHRINED I N SECTION 68 FOR WHICH DUE OPPORTUNITY OF BEING HEARD BE PROVIDED TO THE A SSESSEE. THE ASSESSEE IS ALSO AT LIBERTY TO FURNISH EVIDENCE, IF ANY, IN SUPPORT OF HIS CLAIM. THUS THE APPEAL OF THE REVENUE IS ALLOWED FO R STATISTICAL PURPOSES ONLY. 3. FINALLY, THE APPEAL OF THE REVENUE IS ALLOWED FO R STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 29 TH DAY OF OCTOBER, 2014 . ,- $ )*+ .,/ 29.10.2014 * $ 6 SD/- SD/- (N.K. BILLAIYA) (JOGINDER SINGH) ( ,7 ( ,7 ( ,7 ( ,7 / ACCOUNTANT MEMBER ,7 ,7 ,7 ,7 / JUDICIAL MEMBER MUMBAI; ., DATED : 29 TH OCT. 2014. ../ JV, SR.PS . ,- $ '&8 98+& ,- $ '&8 98+& ,- $ '&8 98+& ,- $ '&8 98+&/ COPY OF THE ORDER FORWARDED TO : 1. ! / THE APPELLANT 2. '# ! / THE RESPONDENT. 3. : ( ) / THE CIT, MUMBAI. 4. : / CIT(A)-13, MUMBAI 5. 8= 6 '& , , / DR, ITAT, MUMBAI 6. 6> ? / GUARD FILE. ,- ,- ,- ,- / BY ORDER, #8& '& //TRUE COPY// @ @@ @/ // /A B A B A B A B (DY./ASSTT. REGISTRAR) , , , , / ITAT, MUMBAI