Creative Fibre Products Limited, Ahmedabad V. The DCIT, Circle-1(1)(2), Ahmedabad

ITA 550/AHD/2018

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 8810 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-03-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2012-2013
• Appeal Filed On: 08-03-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S S SHUKLA
• Keywords: Unexplained cash credit; Source of fund; Additional evidence
• Section: 143(2); 131; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD A BENCH (VIRTUAL COURT) BEFORE: SHRI RAJPAL YADAV, VICE PRESIDENT AND SHRI AMARJIT SINGH, ACCOUNTANT MEM BER CREATIVE FIBRE PRODUCTS LTD. E-503, SANSKAR FLAT, OPP: KARNAVATI CLUB, B/H. SHAILY HOSPITAL, S.G. ROAD, AHMEDABAD PAN: AADCC7702K (APPELLANT) VS THE DY. CIT, CIRCLE-1(1)(2), AHMEDABAD (RESPONDENT) REVENUE BY: SHRI S.S. SHUKLA, SR. D.R. ASSESSEE BY: SHRI ASEEM L. THAKKAR, A.R. DATE OF HEARING : 25-01-2021 DATE OF PRONOUNCEMENT : 22-03-202 1 /ORDER PER : AMARJIT SINGH, ACCOUNTANT MEMBER:- THIS ASSESSEES APPEAL FOR A.Y. 2012-13, ARISES FRO M ORDER OF THE CIT(A)-1, AHMEDABAD DATED 29-12-2017, IN PROCEEDIN GS UNDER SECTION 143 OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT. ITA NO. 550/AHD/2018 ASSESSMENT YEAR 2012-13 I.T.A NO. 550/AHD/2018 A.Y. 2012-13 PAGE NO CREATIVE FIBRE PRODUCTS VS. DY. CIT 2 2. THE SOLITARY GROUND OF APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE DECISION OF LD. CIT(A) IN CONFIRMING THE ADDITION O F RS. 10,49,000/- MADE BY THE ASSESSING OFFICER TREATING THE UNSECURED LOAN A S UNEXPLAINED CASH CREDIT. 3. THE FACT IN BRIEF IS THAT RETURN OF INCOME DECLA RING LOSS OF RS. (-) 97,46,138/- FILED ON 30 TH SEP, 2012. THE CASE WAS SUBJECT TO SCRUTINY ASSESSMENT AND NOTICE U/S. 143(2) OF THE ACT WAS IS SUED ON 12 TH AUGUST, 2013. DURING THE COURSE OF ASSESSMENT ON VERIFICATION OF THE AFORESAID AND OTHER DETAIL THE ASSESSING OFFICER NOTICED THAT ASSESSEE HAS SHOWN UNSECURED LOAN OF RS. 1,21,42,605/- OUT OF WHICH AN AMOUNT OF RS. 10,49,000/- WAS RECEIVED FROM SHRI ROMI P. PATEL DURING THE YEAR UNDER CONSI DERATION. TO VERIFY THE GENUINENESS AND CREDITWORTHINESS OF THIS LOAN AMOUN T, THE ASSESSING OFFICER HAS CALLED THE DETAIL. IN RESPONSE, THE ASSESSEE H AS FURNISHED COPY OF ACKNOWLEDGEMENT OF RETURN OF INCOME FILED BY ROMI P . PATEL FOR THE ASSESSMENT YEAR 2012-13. ON PERUSAL OF THE SAME, T HE ASSESSING OFFICER OBSERVED THAT ASSESSEE HAS SHOWN ONLY INCOME OF RS. 61,140/- IN THE RETURN OF INCOME FILED. THEREAFTER, THE ASSESSEE WAS ASK ED TO FURNISH COPY OF BANK STATEMENT, CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTIONS. HOWEVER, THE ASSESSEE HAS FAILED TO FURNISH THE AFORESAID D ETAIL DURING THE COURSE OF ASSESSMENT PROCEEDINGS. THEREFORE, THE ASSESSING O FFICER HAS TREATED THE UNSECURED LOAN TO THE AMOUNT OF RS. 10,49,000/- AS UNEXPLAINED U/S. 68 OF THE ACT AND ADDED TO THE TOTAL INCOME OF THE ASSESS EE. 4. AGGRIEVED ASSESSEE HAS FILED APPEAL BEFORE THE L D. CIT(A). THE LD. CIT(A) HAS DISMISSED THE APPEAL OF THE ASSESSEE STA TING THAT IN VIEW OF VARIOUS DISCREPANCIES POINTED OUT BY THE ASSESSING OFFICER, THE ASSESSEE WAS I.T.A NO. 550/AHD/2018 A.Y. 2012-13 PAGE NO CREATIVE FIBRE PRODUCTS VS. DY. CIT 3 NOT ABLE TO PROVE GENUINENESS OF THE TRANSACTION AN D CREDITWORTHINESS OF THE LENDER. 5. HEARD BOTH THE SIDES AND PERUSED THE MATERIAL ON RECORD. DURING THE COURSE OF APPELLATE PROCEEDINGS BEFORE LD. CIT(A), THE ASSESSEE SUBMITTED THAT ASSESSING OFFICER HAS ASKED TO PRODUCE THE BA NK STATEMENT OF ROMI P. PATEL FOR THE LAST YEAR. BECAUSE OF PROVIDING INA DEQUATE PERIOD OF ONLY THREE DAYS THE DETAILS COULD NOT BE COLLECTED. CONSIDERI NG THE SUBMISSION OF THE ASSESSEE, THE LD. CIT(A) HAS ALLOWED THE ASSESSEE T O SUBMIT THE ADDITIONAL EVIDENCES UNDER RULE 46A OF THE ACT. THEREFORE, T HE ASSESSEE HAS PRODUCED THE FOLLOWING INFORMATION BEFORE THE LD. CIT(A). 1. LEDGER ACCOUNT OF ROMI P PATEL ( IN THE BOOKS OF CREATIVE FIBRE PRODUCTS PVT. LTD.) 2. BANK STATEMENT OF ROMI P PATEL (PROP-CREA TIVE FIBRE PRODUCTS) SHOWING THE AMOUNT OF LOANS GIVEN TO CREATIVE FIBRE PRODUCT S PVT. LTD. 3. BALANCE CONFIRMATION OF THE CORRESPONDING PARTY I.E. A M ENTERPRISES & PATEL MANILAL PRABHUDAS & SONS IN TURN WHO HAD GIVEN LOAN TO ROMI P PATEL (PROP. CREATIVE FIBRE PRODUCTS) THROUGH ACCOUNT PAYEE CHEQUE. THE SAME HAS BEEN ADMITTED AS ADDITIONAL EVIDENCES AND REMAND REPORT WAS CALLED FROM THE ASSESSING OFFICER. THE ASSESSING O FFICER REPORTED THAT SHRI ROMI P. PATEL HAS NOT MADE COMPLIANCE WITH THE SUM MON ISSUED DURING THE COURSE OF REMAND PROCEEDINGS. VIDE LETTER 11 TH MAY, 2017 ASSESSEE HAS MADE WRITTEN SUBMISSION AND FILED COPY OF PAN, COPY OF IT RETURN, COPY OF BALANCE CONFIRMATION. AS PER INFORMATION FILED, TH E SOURCE OF UNSECURED LOAN GIVEN BY SHRI ROMI P. PATEL TO THE ASSESSEE WAS EXP LAINED AS UNDER:- A) AN AMOUNT OF RS.5,00,000/- WAS RECEIVED FROM M/S. A M ENTERPRISES, PROP. SH. KAMLESH A. PATEL ON 12.05.2011 B) AN AMOUNT OF RS.5,00,000/- WAS RECEIVED FR OM M/S. PATEL MANILAL PRABHUDAS & SONS, A PARTNERSHIP FIRM. I.T.A NO. 550/AHD/2018 A.Y. 2012-13 PAGE NO CREATIVE FIBRE PRODUCTS VS. DY. CIT 4 C) AN AMOUNT OF RS.49,000/- WAS STATED TO BE PAID IN CASH BY SH. ROMI PATEL WHICH IS CLAIMED TO BE PAID OUT OF CASH WITHDRAWAL OF RS. 1, 00,000/- FROM THE BANK ACCOUNT NO 08902020000108 OF HDFC BANK, PRAHIADNAGAR BRANCH, A HMEDABAD HELD BY HIS PROPRIETORSHIP CONCERN M/S. OPTISEF PRODUCTS. THE COMMENTS OF THE ASSESSING OFFICER AT THE REMAN D PROCEEDINGS ARE MENTIONED AT PAGE 6 OF THE ORDER OF THE LD. CIT(A). AT SERIAL NO. (IV) THE ASSESSING OFFICER REPORTED THAT ASSESSEE HAS FURNIS HED DETAILS AND DOCUMENTS WHICH PRIMA-FACIE SHOW THE SOURCE OF FUNDS IN THE H ANDS OF THE LENDER SH. ROMI PATEL WHO IS ALSO THE DIRECTOR OF THE ASSESSEE COMPANY. THE ASSESSING OFFICER HAS ONLY EXPRESSED HIS OBSERVATION TO THE S OURCE OF FUNDS TO THE AMOUNT OF ONLY RS. 49,000/- CLAIMED OUT OF CASH WIT HDRAWN ALMOST TWO AND A HALF MONTHS PRIOR TO THE DEPOSIT AND ALSO STATED THAT LENDER (DIRECTOR OF THE ASSESSEE COMPANY) HAS FAILED TO MAKE COMPLIANCE WIT H THE SUMMON ISSUED UNDER SECTION 131 OF THE ACT. IT WAS ALSO REPORTED LOAN TRANSACTIONS WERE REFLECTED IN THE COPY OF BANK STATEMENT OF THE LEND ER AS WELL AS THE RECEIVER. WITHOUT SPECIFICALLY CONSIDERING THE AFORESAID FACT S AND MATERIAL, THE LD. CIT(A) HAS HELD IN A GENERAL MANNER THAT THE ASSESS EE HAS FAILED TO ESTABLISH THE GENUINENESS AND CREDITWORTHINESS OF THE LOAN CR EDITORS. AS ELABORATED ABOVE IN THIS ORDER, THE ASSESSEE HAS FURNISHED ADD ITIONAL EVIDENCES DULY ADMITTED UNDER 46A BY THE LD. CIT(A) DEMONSTRATING THAT THE DEPOSITOR SHRI ROMI P. PATEL HAS RECEIVED AN AMOUNT OF RS. 5 LACS FROM A.M. ENTERPRISES AND ON 12 TH MAY, 2011, THE DEPOSITOR HAD ALSO RECEIVED RS. 5 L ACS FROM M/S. MANILAL PRABHUDAS & SONS A PARTNERSHIP F IRM AND BALANCE OF RS. 49,000/- WAS OUT OF CASH WITHDRAWAL OF RS. 1 LACS F ROM HIS BANK ACCOUNT MAINTAINED WITH HDFC BANK. IT IS NOTICED THAT THE SE ADDITIONAL EVIDENCES HAS NOT BEEN DISPROVED BY THE ASSESSING OFFICER BY MAKING FURTHER INVESTIGATION AND VERIFICATION. IN THE LIGHT OF THE ABOVE FACTS AND I.T.A NO. 550/AHD/2018 A.Y. 2012-13 PAGE NO CREATIVE FIBRE PRODUCTS VS. DY. CIT 5 CIRCUMSTANCES, WE CONSIDER THAT LD. CIT(A) IS NOT J USTIFIED IN SUSTAINING THE ADDITION, THEREFORE, THE APPEAL OF THE ASSESSEE IS ALLOWED. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT ON 22-03-2021 SD/- SD/- (RAJPAL YADAV) (AMARJIT SINGH) VICE PRESIDENT A CCOUNTANT MEMBER AHMEDABAD : DATED 22/03/2021 / COPY OF ORDER FORWARDED TO:- 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER/ , / ,