The ITO, Ward06(4), Surat V. M/s. Shree Sai Leela Dyg. & Ptg. Mills, Surat

ITA 525/AHD/2007

• Counselvise Citation: [2010] 135 COUNSELVISE.COM (IT) 9801 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 7 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-09-2010
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 22-09-2010
• Assessment Year: 2003-2004
• Appeal Filed On: 05-02-2007
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: N O N E
• Keywords: Additional evidence
• Section: 131; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL : B BENCH : AHMEDABA D (BEFORE HON'BLE SHRI G.D. AGRAWAL, V.P. (AZ) & HON BLE SHRI T.K. SHARMA, J.M.) I.T.A. NO. 525/AHD./2007 ASSESSMENT YEAR : 2003-2004 INCOME TAX OFFICER, WARD-6(4), SURAT -VS.- M/S. S HREE SAI LEELA DYEING & PRINTING MILLS, SURAT (PAN : AAPFS 2367 B) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI K. MADHUSUDAN, S R. D.R. RESPONDENT BY : N O N E O R D E R PER SHRI T.K. SHARMA, JUDICIAL MEMBER : THIS APPEAL FILED BY THE REVENUE IS AGAINST THE OR DER DATED 28.11.2006 OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-IV, SURAT DELE TING THE ADDITION OF RS.10,01,655/- MADE BY THE ASSESSING OFFICER UNDER SECTION 68 OF THE IN COME TAX ACT, 1961 FOR THE ASSESSMENT YEAR 2003-04. 2. NONE APPEARED ON BEHALF OF THE ASSESSEE WHEN THE CASE WAS CALLED FOR HEARING. WE, THEREFORE, DECIDED TO DISPOSE OF THE APPEAL AFTER H EARING THE LD. DEPARTMENTAL REPRESENTATIVE AND THE MATERIAL AVAILABLE ON RECORD. 3. BRIEF FACTS ARE THAT IN THE ASSESSMENT PROCEEDIN GS, THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAD SHOWN UNSECURED LOAN IN THE NAME OF SH RI PRAHLADRAI D. DARIYANI FOR RS.10,00,000/- AND RS.1,655/- IN THE NAME OF SHRI VINODRAI CHATWAN I. THE ASSESSING OFFICER ASKED THE ASSESSEE TO FILE CROSS-CONFIRMATION OF THESE TWO PARTIES AND PRODUCE THE PERSONS FOR VERIFICATION. THE ASSESSEE FAILED TO FURNISH CROSS-CONFIRMATION AND P ARTIES FOR VERIFICATION. THE ASSESSING OFFICER THEREAFTER ISSUED SHOW-CAUSE NOTICE TO THE ASSESSEE REQUESTING IT TO EXPLAIN AS TO WHY THE DEPOSIT SHOWN IN THE NAME OF THE PARTIES SHOULD NOT BE ADDE D TO ITS TOTAL INCOME. IN REPLY TO THE SHOW- CAUSE NOTICE, THE ASSESSEE FIRM SUBMITTED THAT SHRI PRAHLADRAI DARIYANI AND SHRI VINODRAI CHATWANI WERE PARTNERS IN THE FIRM AND ON THEIR RET IREMENT FROM THE FIRM DURING THE YEAR UNDER CONSIDERATION, THE OUTSTANDING CAPITAL ACCOUNTS HAV E BEEN TRANSFERRED FROM THE CAPITAL ACCOUNT TO 2 ITA NO. 525/AHD/2007 THE UNSECURED LOAN. IN THIS CONNECTION, THE ASSESSI NG OFFICER ISSUED SUMMONS UNDER SECTION 131 OF THE INCOME TAX ACT TO BOTH THE PARTIES. NO COMPL IANCE FROM BOTH THE PARTIES WERE MADE. ON THIS BASIS, THE ASSESSING OFFICER CONCLUDED THAT TH E ASSESSEE FAILED TO PROVE THE CASH CREDIT SHOWN IN THE NAME OF SHRI PRAHLADRAI DARIYANI AND SHRI VI NODRAI CHATWANI AND MADE AN ADDITION OF RS.10,01,655/- UNDER SECTION 68 OF THE INCOME TAX A CT, 1961. 4. ON APPEAL, BEFORE THE LEARNED COMMISSIONER OF IN COME TAX (APPEALS), THE ASSESSEE FILED COPY OF CONFIRMATION OF ACCOUNTS OF THE AFORESAID T WO PERSONS AND REQUESTED THAT THIS ADDITIONAL EVIDENCE SHOULD BE ADMITTED AS THIS COULD NOT BE PR ODUCED BEFORE THE ASSESSING OFFICER DUE TO THE DISPUTE AMONGST PARTNERS. BEFORE ADMITTING THE FRESH EVIDENCE, THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) ASKED THE ASSESSING OFFICER TO EXAMINE THE SAME. THE ASSESSING OFFICER VIDE LETTER DATED 26.11.2006 REPORTED THAT SUMMONS WERE ISSUED TO THE TWO PERSONS FOR VERIFICATION. IN RESPONSE TO WHICH, SHRI PRAHLAD RA I FILED A LETTER ENCLOSING PHOTOCOPIES OF HIS PAN CARD, COPY OF RETURN OF HIS INCOME FOR THE ASSE SSMENT YEARS 2002-03 & 2003-04 AND COPY OF BANK PASS BOOK OF HIS ACCOUNT, WHEREIN HE RECEIVED RS.14,04,412/- BY ACCOUNT PAYEE CHEQUES FROM THE ASSESSEE-FIRM THE ASSESSING OFFICER FURTHE R STATED THAT IN THE CASE OF VINOD CHATWANI, NO COMPLIANCE TO THE SUMMONS WAS MADE AND THEREFORE , VERIFICATION WAS NOT POSSIBLE. 5. AFTER GOING THROUGH THE REPORT OF ASSESSING OFFI CER AND THE DOCUMENTS FURNISHED BY THE ASSESSEE, IN THE IMPUGNED ORDER, THE LEARNED COMMIS SIONER OF INCOME TAX(APPEALS) OBSERVED THAT SHRI PRAHLADRAI D. DARIYANI HAS CONFIRMED THE VERSION OF THE ASSESSEE AND THAT THIS AMOUNT WAS TRANSFERRED FROM HIS CAPITAL ACCOUNT WITH THE F IRM ON HIS RETIREMENT AND, THEREFORE, THE UNSECURED LOAN STANDS CONFIRMED. IN RESPECT OF OTHE R SMALL AMOUNT OF RS.1,655/- IN THE NAME OF SHRI VINODRAI CHATWANI, THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) OBSERVED THAT LOOKING TO THE SMALLNESS OF THE AMOUNT, NO ADVERSE INFERENCE IS WARRANTED. HE, THEREFORE, DELETED THE ADDITION MADE BY THE ASSESSING OFFICER UNDER SE CTION 68 OF THE INCOME TAX ACT, 1961. 6. AT THE TIME OF HEARING BEFORE US, ON BEHALF OF R EVENUE SHRI K. MADHUSUDAN, LD. SR. D.R. APPEARED AND RELYING ON THE REASONING GIVEN BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER CONTENDED THAT DURING THE COURSE OF ASSESSMENT PROC EEDINGS, THE ASSESSEE FAILED TO PRODUCE BOTH THE PARTIES, NAMELY SHRI PRAHLADRAI D. DARIYANI AN D SHRI VINODRAI CHATWANI BEFORE THE 3 ITA NO. 525/AHD/2007 ASSESSING OFFICER AND TO PROVE THE IDENTITY/ GENUIN ENESS OF THE TRANSACTION AND ALSO THE CORROBORATIVE EVIDENCE IN SUPPORT OF THE CLAIM. THE LD. D.R. CONTENDED THAT THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) HAS SIMPLY ALLO WED THE APPEAL ON COPY OF CONFIRMATION OF ACCOUNTS OF THE ALLEGED TWO PARTIES, THEREFORE, THE DECISION OF LEARNED COMMISSIONER OF INCOME TAX(APPEALS) IS NOT ACCEPTABLE. 7. WE HAVE CAREFULLY GONE THROUGH THE ORDERS OF AUT HORITIES BELOW. IT IS PERTINENT TO NOTE THAT BEFORE THE LEARNED COMMISSIONER OF INCOME TAX(APPEA LS), THE ASSESSEE HAS FURNISHED THE CONFIRMATION AND OTHER DETAILS OF SHRI PRAHLADRAI D . DARIYANI AND SHRI VINODRAI CHATWANI IN RESPECT OF RS.10,00,000/- AND RS.1,655/- RESPECTIVE LY. THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) CALLED THE REMAND REPORT AND ON VERIFI CATION, THE ASSESSING OFFICER FOUND THAT LOAN OF RS.10,00,000/- APPEARING IN THE NAME OF SHRI PRA HLADRAI D. DARIYANI IS GENUINE. THE OTHER AMOUNT OF RS.1,655/- IN THE NAME OF SHRI VINODRAI C HATWANI IS SMALL. LOOKING TO THE REASONING GIVEN BY THE LEARNED COMMISSIONER OF INCOME TAX (AP PEALS) IN THE IMPUGNED ORDER, WE ARE CONVINCED THAT HE HAS GIVEN COGENT REASON FOR DELET ING THE ADDITION OF RS.10,01,655/- MADE BY THE ASSESSING OFFICER UNDER SECTION 68 OF THE INCOM E TAX ACT, 1961. WE, THEREFORE, INCLINE TO UPHOLD THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS). 8. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED. THE ORDER WAS PRONOUNCED IN THE COURT ON 24.09.201 0 SD/- SD/- (G.D. AGRAWAL) (T.K. SHARMA ) VICE-PRESIDENT (AZ) JUDICIAL MEMBER DATED : 24 / 09 / 2010 COPY OF THE ORDER IS FORWARDED TO : 1) THE ASSESSEE (2) THE DEPARTMENT. 3) CIT CONCERNED (4) CIT(A.) CONCERNED, (5) D.R., ITAT, AHMEDABAD. TRUE COPY BY ORDER DEPUTY REGIS TRAR, ITAT, AHMEDABAD LAHA/SR.P.S.