Shri Nirmalkumar Madanlal Vyas, Jalgaon V. ITO, Wd.-1(1), Jalgaon

ITA 517/PUN/2010

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 9777 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 7 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-11-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 27-09-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 09-04-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VINITA MENON
• Keywords: Unexplained cash credit; Additional evidence
• Section: 68; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE SHRI G.S. PANNU, ACCOUNTANT MEMBER AND R.S. PADVEKAR, JUDICIAL MEMBER ITA NO. 517/PN/2010 (ASSESSMENT YEAR: 2006-07) SHRI NIRMALKUMAR MADANLAL VYAS 163 NEW B.J. MARKET, JALGOAON 425 001 PAN ACSPV 9020Q .. APPELLANT VS. I.T.O. WARD 1(1) JALGAON .. RESPONDENT APPELLANT BY : SHRI PRAMOD SHINGTE RESPONDENT BY : SMT. VINITA MENON DATE OF HEARING : 20-11-2012 DATE OF PRONOUNCEMENT : 26-11-2012 ORDER PER G.S. PANNU, A.M.: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-II PUNE DA TED 22-1-2010 WHICH, IN TURN, HAS ARISEN FROM ORDER DATED 19-12-2 008 PASSED BY THE ASSESSING OFFICER, UNDER SECTION 144 OF THE INC OME-TAX ACT, 1961 (IN SHORT THE ACT), PERTAINING TO THE ASSESSMENT Y EAR 2006-07. 2. THE SOLITARY ISSUE IN THIS APPEAL RELATES TO AN ADDITION OF RS.2,50,000/- MADE U/S.68 OF THE ACT ON ACCOUNT OF UNEXPLAINED CREDIT PERTAINING TO THE LOAN TAKEN FROM ONE MR. N. C. KABRA. THE ASSESSING OFFICER TREATED A SUM OF RS.14,50,000/- R EPRESENTING UNSECURED LOANS FROM FOUR PARTIES AS UNEXPLAINED WI THIN THE MEANING OF SECTION 68 OF THE ACT, AND ADDED THE SAME TO THE INCOME RETURNED. THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE TH E CIT(A) WHO HAS ALSO UPHELD THE ACTION OF THE ASSESSING OFFICER ONLY WITH RESPECT TO A SUM OF RS.2,50,000/- REPRESENTING UNSECURED LO AN RECEIVED FROM ONE MR. N.C. KABRA. HENCE, THIS APPEAL BY THE ASSES SEE BEFORE US. 2 ITA NO. 517/PN/2010 NIRMALKUMAR MADANLAL VYAS A.Y. 2006-07 3. BEFORE US, THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT DURING THE REMAND PROCEEDINGS THE CREDITOR HAD APPE ARED IN PERSON AND HAD CONFIRMED THE ADVANCE OF LOAN AND ALSO THE SOURCE OF AMOUNT OF RS. 2,50,000.- DEPOSITED IN HIS BANK ACCO UNT TO FURTHER ADVANCE THE MONEY TO THE ASSESSEE. HOWEVER, THE EX PLANATION REGARDING SOURCE OF MONEY DEPOSITED IN HIS BANK ACC OUNT HAVING BEEN RECEIVED FROM HIS FATHER WAS NOT SUBSTANTIATED IN THE ABSENCE OF THE AVAILABILITY OF CORRESPONDING BANK STATEMENT OF HIS FATHER. NEVERTHELESS IT IS SUBMITTED THAT THE SAID CREDITOR HAS DULY APPEARED AND CONFIRMED THE LOAN ADVANCED TO THE ASSESSEE. A CCORDING TO THE ASSESSEE THE CREDIT HAS BEEN APPROPRIATELY EXPLAINE D AND THEREFORE NO ADDITION U/S.68 IS MERITED. 4. ON THE OTHER HAND, LEARNED DR APPEARING FOR THE REVENUE HAS JUSTIFIED THE ADDITION ON THE GROUND THAT THE CREDI TORS FINANCIAL CAPACITY COULD NOT BE ESTABLISHED AND THEREFORE SEC TION 68 HAS BEEN RIGHTLY INVOKED. 5. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS. CLEARLY THE CREDITOR IN QUESTION CONFIRMED THE ADVANCING OF LOAN OF RS.2,50,000/- TO THE ASSESSEE, WHICH IS BY A ACCOUN T PAYEE CHEQUE. THE CONFIRMATION AS REPRODUCED BY THE CIT(A) IN PAR A 5.1 OF THE ORDER ALSO SHOWS THE DETAILS OF CHEQUE BY WAY OF WH ICH ASSESSEE HAS REPAID THE PRINCIPAL AND ALSO AMOUNT OF INTERES T. THE SAID CREDITOR HAS ALSO EXPLAINED HIS SOURCE OF INCOME. FURTHER, THE SAID CREDITOR APPEARED BEFORE THE ASSESSING OFFICER DURI NG REMAND PROCEEDINGS CONDUCTED UNDER DIRECTIONS OF THE CIT(A ) AND CONFIRMED THE ADVANCING OF LOAN TO THE ASSESSEE. THE CREDITO R ALSO EXPLAINED THAT THE AMOUNT OF RS.2,50,000/- WAS RECEIVED BY HI M FROM HIS FATHER, WHO IN TURN HAD WITHDRAWN SUCH ACCOUNT FROM HIS BANK ACCOUNT. THE CREDITOR COULD NOT PRODUCE THE BANK S TATEMENT OF HIS 3 ITA NO. 517/PN/2010 NIRMALKUMAR MADANLAL VYAS A.Y. 2006-07 FATHER WITHIN THE PERIOD CALLED FOR BY THE ASSESSIN G OFFICER AND IN THIS MANNER THE CREDIT WORTHINESS OF THE CREDITOR H AS BEEN SAID TO BE UNPROVED. 6. BEFORE US, LEARNED COUNSEL FOR THE ASSESSEE HAS FILED A PAPER BOOK WHICH INTER-ALIA CONTAINS A COPY OF THE BANK S TATEMENT OF THE CREDITOR AS ALSO THE BANK STATEMENT OF HIS FATHER M R. CHANDRAKANT R. KABRA WHICH SUPPORT THE ASSERTIONS MADE BY THE CRED ITOR BEFORE THE ASSESSING OFFICER DURING REMAND PROCEEDINGS. THOUG H THE AFORESAID PIECE OF EVIDENCE IS AN ADDITIONAL EVIDENCE WHICH W AS NOT PUT-FORTH BEFORE CIT(A), SO HOWEVER HAVING REGARD TO THE FACT THAT THE SAME IS MERELY IN SUPPORT OF THE EARLIER ASSERTION MADE BY THE CREDITOR DURING EXAMINATION BY THE ASSESSING OFFICER, WE DEEM IT FI T AND PROPER TO CONSIDER THE SAME. IN ANY CASE, WE FIND THAT THE B ASIS ADOPTED BY THE CIT(A) TO REJECT THE EXPLANATION OF THE CREDITO R IS UNCALLED FOR IN AS MUCH AS IT REQUIRED THE ASSESSEE TO PROVE NOT ON LY THE SOURCE OF CREDIT BUT ALSO THE SOURCE OF THE CREDITOR. IT IS SETTLED PROPOSITION THAT THE DUTY OF THE ASSESSEE IS ONLY TO EXPLAIN TH E NATURE AND SOURCE OF THE CREDIT APPEARING IN HIS BOOKS OF ACCO UNT AND NOT THE SOURCE OF THE SOURCE. CONSIDERING THE OVERALL CIR CUMSTANCE OF THE CASE, WE HOLD THAT THE CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE IMPUGNED ADDITION OF RS.2,50,000/- REPRESENTING LOA N RECEIVED FROM SRI N.C. KABRA UNDER THE PROVISIONS OF SECTION 68 O F THE ACT. WE SET-ASIDE THE ORDER OF THE CIT(A) AND DIRECT THE AO TO DELETE THE ADDITION. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. DECISION PRONOUNCED IN THE OPEN COURT ON THIS THE 2 6 TH DAY OF NOVEMBER 2012. SD/- SD/- (R.S. PADVEKAR) (G.S. PANNU) JUDICIAL MEMBER ACCOUNTANT MEMBER PUNE, DATED: 26 TH NOVEMBER 2012 ANKAM/SATISH 4 ITA NO. 517/PN/2010 NIRMALKUMAR MADANLAL VYAS A.Y. 2006-07 COPY TO: 1. ASSESSEE 2. DEPARTMENT 3. THE CIT (A)-II PUNE 4. THE DEPARTMENTAL REPRESENTATIVE, B BENCH, I.T. A.T., PUNE. 5. GUARD FILE BY ORDER // TRUE COPY // SENIOR PRIVATE SECRETARY. INCOME TAX APPELLATE TRIBUNAL, PUNE BENCHES, PUNE