Shri Girish Chandrabhan Gaba, Khandwa V. The I.T.O., Khandwa

ITA 545/IND/2009

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 2797 (ITAT-INDORE)
• Duration Of Justice: 6 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-06-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 22-06-2010
• Assessment Year: misc
• Appeal Filed On: 03-12-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P K MITRA
• Assessee Lawyers: S S DESHPANDE; BHARAT JHAVAR
• Keywords: Unexplained cash credit; Reasonable cause; Condonation of delay
• Section: 68

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER AND SHRI V.K. GUPTA, ACCOUNTANT MEMBER ITA NO.545/IND/2009 A.Y. 2005-06 GIRISH CHANDRABHAN GABA KHANDWA APPELLANT PAN ABTPG-7105Q VS. INCOME TAX OFFICER KHANDWA RESPONDENT APPELLANT BY : SHRI S.S. DESHPANDE AND SHRI BHARAT JHAVAR RESPONDENT BY : SHRI P.K. MITRA, SR. DR O R D E R PER JOGINDER SINGH, JM THIS APPEAL IS BY THE ASSESSEES AGAINST THE ORDER O F THE LEARNED CIT(A) DATED 16.7.2009. THE ASSESSEE HAS ALSO FILE D APPLICATION FOR CONDONATION OF DELAY OF 34 DAYS, WHEREIN IT WAS PLE ADED THAT THE ORDER OF THE LD. FIRST APPELLATE AUTHORITY WAS SERVED UPON T HE ASSESSEE ON 31.8.2009 AND THE APPEAL WAS TO BE FILED BEFORE TH E TRIBUNAL BEFORE 31.10.2009. IT WAS PLEADED THAT HOUSE OF THE ASSES SEE WAS WRONGLY AUCTIONED BY BANK OF INDIA AND THE ASSESSEE HAD TO MOVE APPLICATION 2 BEFORE THE DRT, JABALPUR, AND LATER ON TO DRAT, THE REFORE, IN ORDER TO SAVE HIS SHELTER, THE ASSESSEE COULD NOT FILE APPEA L BEFORE THE TRIBUNAL WITHIN THE STIPULATED PERIOD. ON THE OTHER HAND, T HE SENIOR DEPARTMENTAL REPRESENTATIVE CONTENDED THAT THE REASONS STATED IN THE APPLICATION ARE NOT REASONABLE. AFTER HEARING THE RIVAL SUBMISSION S, WE ARE OF THE CONSIDERED VIEW THAT THERE IS A REASONABLE CAUSE FO R NOT FILING THE APPEAL BEFORE THE TRIBUNAL WITHIN THE PRESCRIBED TIME, CON SEQUENTLY, THE DELAY IS CONDONED. 2. THE ONLY GROUND RAISED BY THE ASSESSEE IS THAT O N THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED C OMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN CONFIRMING THE ADDITI ON OF RS.13,00,000/- TO THE TOTAL INCOME OF THE ASSESSEE ON THE ALLEGATI ON THAT THE ASSESSEE COULD NOT ESTABLISH THE IDENTITY OF THE CREDITOR AN D ALSO THE SOURCE,CREDIT WORTHINESS AND GENUINENESS OF THE TRANSACTION. 3. THE PLEA ON BEHALF OF THE ASSESSEE IS THAT THE C REDITOR IS THE BROTHER IN LAW OF THE ASSESSEE FROM WHOM LOAN WAS T AKEN. THE CREDITOR WAS CLAIMED TO BE AN NRI WHO WAS SERVING AS MANAGIN G DIRECTOR OF SOME COMPANY. OUR ATTENTION WAS INVITED TO VARIOUS PAGES OF THE PAPER BOOK AND THE COPY OF THE DRAFT AVAILABLE AT PAGE 22 OF THE SAID PAPER BOOK. THE CRUX OF THE ARGUMENTS IS THAT IDENTITY, S OURCE AND GENUINENESS OF THE TRANSACTION IS VERY MUCH ESTABLI SHED BY THE ASSESSEE. HOWEVER, THE LEARNED SR. DR DEFENDED THE IMPUGNED ORDER 3 BY CONTENDING THAT NECESSARY REQUIREMENT OF SECTION 68 WERE NOT PROVED BY THE ASSESSEE, THEREFORE, THE ADDITION WAS RIGHTL Y MADE. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS OF LD. REPRESENTATIVES OF BOTH SIDES AND PERUSED THE MATER IAL AVAILABLE ON RECORD. BRIEF FACTS ARE THAT THE ASSESSEE IS A SOL E PROPRIETOR OF M/S CHANDRABHAN MURAJMAL GABA, TRADING IN FERTILIZER SE EDS AND PESTICIDES FOR THE LAST ABOUT MORE THAN TEN YEARS, DECLARED IN COME OF RS.2,34,990/- IN ITS RETURN FILED ON 31.10.2005. THE ASSESSEE MA INTAINS REGULAR BOOKS OF ACCOUNTS WHICH WERE AUDITED U/S 44AB OF THE ACT. THE ASSESSEE RECEIVED RS.1,50,000/- THROUGH DEMAND DRAFT NO.6230 77 DATED 31.1.2005 (UCO BANK, PUNE), RS. 4,50,000/- ON 31.1. 2005 (DD NO. 760846 PNB PUNE) AND RS.7 LAC THROUGH DD NO. 6249 2 DATED 10.2.2005 (SBI, CHENNAI). THESE DEMAND DRAFTS (TOT AL RS.13 LACS) WERE DEPOSITED IN REGULAR BANK ACCOUNT OF THE ASSESSEE M AINTAINED WITH BANK OF INDIA, KHANDWA (A/C NO. 10008). THE LEARNED AO M ADE THE ADDITION OF THE AFORESAID AMOUNT U/S 68 OF THE ACT ON THE PL EA THAT IT WAS AN UNEXPLAINED CASH CREDIT. ADMITTEDLY, TO PROVE THE G ENUINENESS OF THE TRANSACTION, THE ASSESSEE SUBMITTED THE COPY OF THE REGULAR BANK ACCOUNT BEFORE THE AO WHEREIN THE ENTRIES OF SUCH C REDITS THROUGH AFOREMENTIONED DDS WERE APPEARING. SENDING OF THES E DEMAND DRAFTS WAS ALSO CONFIRMED BY THE CREDITOR VIDE CONFIRMATIO N LETTER DATED 4 3.9.2007. IT IS ALSO AN ADMITTED FACT THAT THE CRE DITOR WAS HAVING SUFFICIENT FUNDS WITH HIM. TO PROVE THE IDENTITY OF THE CREDITOR, APART FROM CONFIRMATION, THE COMPLETE ADDRESS OF THE CREDITOR, COPY OF THE B ANK ACCOUNT MAINTAINED BY THE CREDITOR WITH ABN AMRO BANK WHERE IN THE ADDRESS OF THE CREDITOR WAS DULY MENTIONED WAS SUBMITTED BY TH E ASSESSEE. THE FULL ADDRESS ALONG WITH MOBILE NUMBER OF THE CREDIT OR WAS ALSO FURNISHED BY THE ASSESSEE, THEREFORE, IF THE LEARNED AO WAS HAVING ANY DOUBT, NOTHING PREVENTED HIM TO VERIFY THE IDENTITY OF THE CREDITOR THROUGH HIS OWN SOURCES. EVEN OTHERWISE, THE ASSESSEE FURNISHE D A LETTER FROM HONG KONG BASED COMPANY VIZ. BRILLIANT STANDARD LIM ITED BY FURTHER SUPPLYING THE HONG KONG ID NUMBER OF THE CREDITOR A LONG WITH HIS PASSPORT NUMBER ALONG WITH NECESSARY ANNEXURES. TH E PAN DETAILS OF CREDITOR WERE ALSO SUPPLIED, THEREFORE, WE ARE OF T HE CONSIDERED OPINION THAT THE IDENTITY WAS ALSO PROVED. AS FAR AS CREDIT WORTHINESS OF THE CREDITOR IS CONC ERNED, A LETTER FROM AN EMPLOYER OF THE CREDITOR, VIZ. M/S BRILLIAN T STANDARD LIMITED, HONG KONG, CLEARLY MENTIONING THAT HE WAS WORKING A S A DIRECTOR IN THE SAID COMPANY SINCE 4.9.2000 AND FROM, 8.2.2002 HE W AS RECEIVED RS.46.80 LAC PER ANNUM AS REMUNERATION. THIS CONFI RMATION LETTER FROM THE EMPLOYEE WAS ALSO NOT CONTROVERTED BY THE REVEN UE. THE PAYMENT WAS MADE THROUGH BANKING CHANNEL, THEREFORE, WE ARE OF THE VIEW THAT 5 NECESSARY INGREDIENTS OF SECTION 68 OF THE ACT ARE FULFILLED AND THE ASSESSEE HAS DISCHARGED ITS ONUS. WE ARE OF THE VI EW THAT BURDEN OF THE ASSESSEE IS CONFINED TO PROVE CREDIT WORTHINESS WITH REFERENCE TO TRANSACTION BETWEEN THE ASSESSEE AND THE CREDITOR. THE RATIO LAID DOWN IN FOLLOWING CASES FORTIFY THE CASE OF THE ASSESSEE :- 1. NEMICHAND KOTHARI V. CIT; 136 TAXMAN 213 (GAU) 2. ADDL CIT V. BAHRI BROTHERS PVT. LTD.;154 ITR 244 (PAT) 3. JALAN TIMBERS V. CIT; 223 ITR 11 (GAU) IN THE PRESENT APPEAL, THE LEARNED AO HAS NEITHER C ONTROVERTED THE AFORESAID FACTUAL FINDING, NOR BROUGHT ON RECORD AN Y EVIDENCE CONTRARY TO THE CLAIM OF THE ASSESSEE, THEREFORE, WE ARE OF THE CONSIDERED OPINION THAT THE ASSESSEE HAS DISCHARGED ITS ONUS BY ESTABL ISHING THE IDENTITY, CREDIT WORTHINESS OF THE CREDITOR AND GENUINENESS O F THE TRANSACTION, THEREFORE, THIS APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 23 RD JUNE, 2010. SD SD (V.K. GUPTA) (JOGINDER SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER JUNE 23 RD , 2010 COPY TO: APPELLANT, RESPONDENT, CIT, CIT(A), DR, G UARD FILE *DN/