ITO 3(1)(4), MUMBAI V. GAJRA REAL ESTATE P.LTD, MUMBAI

ITA 5335/MUM/2012

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 8000 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 11 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-08-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 18-08-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 24-08-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ABHA KALA CHANDA
• Keywords: Unexplained cash credit
• Section: 68

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL G BENCH, MUMBAI . . , . . , ! '# $ BEFORE SHRI H.L.KARWA, PRESIDENT AND SHRI N.K.BILLA IYA, AM ./ I.T.A. NO. 5335/MUM/2012 ( %& ' / ASSESSMENT YEAR: 2009-10) INCOME-TAX OFFICER-3(1)(4), ROOM NO.666,6 TH FLOOR, AAYAKAR BHAVAN, M.K.RAOD, MUMBAI-400020 & / VS. M/S GAJRA REAL ESTATE PVT. LTD. 11/12, RAGHUVANSHI MILLS COMPOUND, SENAPATI BAPAT MARG, LOWER PAREL, MUMBAI-400013 ./ PAN : AAACZ0443M ( / APPELLANT) .. ( ! / RESPONDENT ) ' # / ASSESSEE BY: SMT. ABHA KALA CHANDA ! ' # / RESPONDENT BY : SHRI SALIL KAPOOR $ % ' &' / DATE OF HEARING : 18/08/2014 ()*+ ' &' / DATE OF PRONOUNCEMENT : 18/08/2014 ,- / O R D E R PER N.K.BILLAIYA, AM: THIS APPEAL BY THE REVENUE IS PREFERRED AGAINST THE ORDER OF THE CIT(A)-7, MUMBAI DATED 26/04/2012 PERTAINING TO ASS ESSMENT YEAR 2009- 10. 2. THE SUM AND SUBSTANCE OF THE GRIEVANCE OF THE RE VENUE IS THAT THE CIT(A) ERRED IN DELETING THE ADDITION OF ` . 19,25,12,425/-. 3. ASSESSEE IS TRADING IN TEXTILE GOODS THE RETURN WAS FILED ON 26/09/2009 DECLARING TOTAL INCOME AT ` .9,160/-. THE RETURN WAS SELECTED FOR SCRUTINY ASSESSMENT. ITA NO.5335/MUM/2012 2 4. DURING THE COURSE OF THE SCRUTINY ASSESSMENT PRO CEEDINGS, THE AO NOTICED THAT THE ASSESSEE HAS SHOWN SALES TO THREE PARTIES AMOUNTING TO ` .19,29,96,541/-. THE AO FURTHER FOUND THAT TOTAL P URCHASE HAS BEEN SHOWN AT ` .19,25,12,425/-. THE AO FOUND THAT THE ASSESSEE HA S NEITHER MADE ANY PAYMENT TO ANY OF THE PURCHASE PARTIES NOR RECEIVED ANY PAYMENT FROM THE SALE PARTIES. THE AO OBSERVED THA T THE ASSESSEE HAS FAILED TO FURNISH THE PROOF OF DELIVERY OF GOODS PU RCHASED AND SOLD. THE ASSESSEE WAS ASKED TO EXPLAIN THE GENUINENESS OF TH E CREDITORS. THE ASSESSEE FILED A LIST OF NAMES AND ADDRESSES OF 55 CREDITORS. THE AO ISSUED NOTICES U/S 136 OF THE ACT, EXCEPT FOR TWO P ARTIES, THE NOTICES RETURNED UN-SERVED. THE AO CONCLUDED BY STATING TH AT THE ASSESSEE HAS FAILED TO PROOF THE IDENTITY, GENUINENESS AND CREDI TWORTHINESS OF THE CREDITORS AND ACCORDINGLY TREATED THE SUM OF ` .19,25,12,425/- AS UNEXPLAINED CASH CREDITS AND ADDED THE SAME U/S 68 OF THE ACT. 5. ASSESSEE CARRIED THE MATTER BEFORE THE CIT(A). IT WAS CONTENDED BEFORE THE CIT(A) THAT THE ENTIRE SALES MADE BY THE ASSESSEE WERE RETURNED BACK AS THE GOODS WERE FOUND TO BE DEFECTIVE. ON T HE RECEIVING BACK OF GOODS THE ACCOUNTS OF THE PARTIES WERE SQUARED UP. CONSIDERING THE FACTS AND THE SUBMISSIONS, THE CIT(A) WAS OF THE OPINION THAT THE CREDITORS CANNOT BE SAID TO BE TAXED AS UNEXPLAINED CASH CRED ITS AND ACCORDINGLY DELETED THE ADDITION MADE BY THE AO. 6. AGGRIEVED BY THIS REVENUE IS BEFORE US. THE DR STRONGLY SUPPORTED THE FINDINGS OF THE AO. THE LD. COUNSEL FOR THE AS SESSEE REITERATED WHAT HAS BEEN SUBMITTED BEFORE THE LOWER AUTHORITIES. 7. WE HAVE CAREFULLY PERUSED THE ORDERS OF THE AUTH ORITIES BELOW. THE UNDISPUTED FACT IS THAT THE ADDITION OF ` .19,25,12,425/- IS MADE ON ACCOUNT OF UNEXPLAINED CREDITORS. IT IS ALSO UNDI SPUTED FACT THAT THE AMOUNTS ADDED BY THE AO ARE THE TOTAL PURCHASES OF THE YEAR. A PERUSAL OF THE FACTS SHOW THAT THE ASSESSEES SALES WERE RETUR NED BACK BECAUSE OF THE DEFECT IN THE GOODS, NECESSARY CREDIT ENTRIES WERE PASSED IN THE BOOKS OF ITA NO.5335/MUM/2012 3 ACCOUNT,. THEREFORE, IT CANNOT BE SAID THAT THE CRE DITS ARE UNEXPLAINED. THERE IS NO MOVEMENT OF CASH IN THE ENTIRE TRANSACT IONS; THE ENTRIES HAVE BEEN MADE THROUGH JOURNAL ENTRIES. COPIES OF THE LE DGER ACCOUNTS WERE FURNISHED BEFORE THE CIT(A). SINCE THE CREDIT ENTR IES ARE THE RESULT OF THE GOODS RETURNED THEREFORE THE ENTRIES ARE SELF EXPLA NATORY AND THE CIT(A) HAS RIGHTLY DELETED THE ADDITION. THEREFORE NO INT ERFERENCE IS CALLED FOR. APPEAL FILED BY THE REVENUE IS ACCORDINGLY DISMISSE D. 8. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. ORDER PRONOUNCED IN THE OPEN COURT ON 18/08/2014 ,- ' ()*+ $ . / 0 1, 18 /08/2014 , ) ' 2% 3 SD/- (H.L.KARWA) SD/- (N.K.BILLAIYA) HONBLE PRESIDENT ACCOUNTANT MEMBER / $ % MUMBAI; 1, /DATED : 18 TH AUGUST, 2014. F{X~{TA F{X~{TA F{X~{TA F{X~{TA P.S. P.S. P.S. P.S. ' ( ) *%+,- . -'+ / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. ! / THE RESPONDENT. 3. $ 4& ( ) / THE CIT- , MUMBAI. 4. $ 4& / CIT(A)- , MUMBAI 5. 562 7&789 , ' 89+ , / $ % / DR, ITAT, MUMBAI 6. 2: ;% / GUARD FILE. ' (& / BY ORDER, ! 5& 7& //TRUE COPY// / / 0 1 (DY./ASSTT. REGISTRAR) , / $ % / ITAT, MUMBAI