M/s. Unideep Food Processing (P) Ltd, Bhubaneswar V. ITO, Ward-1(3), Bhubaneswar, Bhubaneswar

ITA 565/CTK/2013

• Counselvise Citation: 56522114 RSA 2013
• Duration Of Justice: 5 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-06-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2007-2008
• Appeal Filed On: 19-12-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N K NEB
• Assessee Lawyers: C R JENA
• Keywords: Income from undisclosed sources; Source of fund

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CUTTACK BENCH, CUTTACK BEFORE SHRI P. K. BANSAL, HONBLE ACCOUNTANT MEMBER AND SHRI D.T. GARASIA, HONBLE JUDICIAL MEMBER ITA NO. 565/CTK/2013 (ASSESSMENT YEAR - 2007 - 08) M/S. UNIDEEP FOOD PROCESSING (P) LTD. D - 7, KEDAR GOURI APARTMENT LEWIS ROAD, BHUBANESWAR - 751002 PAN: AAACU8353P (APPELLANT) VS. THE INCOME TAX OFFICER, WARD - 1(3), AYAKAR BHAWN, BHUBANESWAR - 751007. (RESPONDENT) APPELLANT BY : SHRI C.R. JENA , AR RESPONDENT BY : SHRI N.K. NEB, DR DATE OF HEARING : 01/05 /2014 DA TE OF PRONOUNCEMENT : 13 /06 /2014 O R D E R PER: D.T. GARASIA THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGA INST THE ORDER OF CIT(A) - BERHAMPUR, DATED 07.10.2013 FOR THE ASSESSMENT YEAR 2007 - 08 . 2. THE FOLLOWING GROUNDS ARE RAISED IN THIS APPEAL AS UNDER. 1. FOR THAT THE ORDER OF ASSESSMENT AS FRAMED HAS NEITHER BEEN BASED ON THE FACTS AND CIRCUMSTANCES OF THE C ASE OR NO POINTS OF LAW. 2. FOR THAT THE ADDITION OF RS. 45,29,017/ - UNDER THE HEAD UNSECURED LOAN IS ILLEGAL AND NOT SUSTAINABLE ON FACT AS WELL AS ON LAW. 3. FOR THAT THE ORDER OF THE LD. CIT(A) UPHO LDING THE ADDITION UNDER THE HEAD UNSECURED LOAN, OR R S. 45,29,017/ - UNJUSTIFIED AND NOT BASED ON THE FACTS OF THE APPELLANTS CASE AND THEREFORE LIABLE TO BE QUASHED. 4. FOR THAT CASE DECISION RELIED UPON BY THE LEARNED AO & CIT(A) CASE ARE NOT APPLICABLE TO THE PRESENT CASE AS THEY ARE DISTINGUISHABLE ON FACTS IN AS MUCH AS THE IDENTITY CREDITWORTHINESS OF THE PERSON AND THE GENUINENESS OF THE TRANSACTIONS ARE CLEARLY ESTABLISHED. 2 . ITA NO. 565/CTK/2013 (A.Y.2007 - 08) M/S. UNIDEEP FOOD PROCESSING (P) LTD. VS. ITO 2.1 THE SHORT FACTS OF THE CASE ARE THAT T HE ASSESSEE COMPANY HAS FILED E - RETURN ON 21.03.2008 SHOWING NIL INCOME. THE COMPAN Y HAS CONSTRUCTED A RICE MILL AT PLOT NO.2323, SHANTINAGAR, JAMUJHADI, DIST. BALASORE. NO COMMERCIAL PRODUCTION HAS BEEN STARTED DURING THIS YEAR. DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE HAS SHOWN UNSECURED LOAN OF RS. 45,29,017.23. IN COURSE OF SCRUTINY, THE ASSESSEE WAS ASKED TO GIVE THE NAME AND ADDRESSES OF THE LOAN - CREDITORS, THEIR SOURCES OF INCOME AND AMOUNT OF MONEY ADVANCED BY THEM. THE ASSESSEE HAS STATED THAT HE HAS RECEIVED THE LOAN IN CASH. THE ASSESSEE HAS FILED THE LIST OF 244 PERSO NS IN SUPPORT OF HIS CLAIM. THE SAID LOAN - CREDITORS ARE FARMERS AND STAYING IN VILLAGE AREAS. THE AR HAS FILED COPIES OF VOTER IDENTITY CARD OF THE ABOVE LOAN CREDITORS TO PROVE THEIR IDENTITY. MORE PROOF OF IDENTITY IS NOT SUFFICIENT TO ACCEPT THE GENUINE NESS OF SUCH TRANSACTION. TO PROVE THE GENUINENESS OF LOAN TRANSACTION, THREE THINGS ARE ESSENTIAL. ONE IS THE IDENTITY, THEN THE GENUINENESS ON LOAN TRANSACTION AND 3 RD LY THE CREDITWORTHINESS OF THE LOAN CREDITOR. THE ASSESSEE HAS FILED THE IDENTITY OF TH E ABOVE PERSONS BUT THE GENUINENESS OF THE SUCH LOAN TRANSACTION AND THE CREDITWORTHINESS OF THE LOAN CREDITOR WAS NOT PROVED, THEREFORE, AO TREATED UNSECURED LOAN OF RS.45,29,017.23 AS ASSESSEE INCOME FROM UNDISCLOSED SOURCES AND ADDED TO THE INCOME OF TH E ASSESSEE. 2.2. THE MATTER CARRIED TO CIT(A) AND CIT(A) HAS DISMISSED THE APPEAL. 2.3. THE LEARNED AR SUBMITTED THAT THE ASSESSEE HA S PRODUCED THE CREDITORS DURING THE REMAND PROCEEDING AND DURING THE REMAND PROCEEDING ALL THE PERSONS HAVE CONFIRMED AN D THE LOANS WERE TAKEN FROM ALL THE MEMBERS. THEREFORE, APPEAL SHOULD BE ALLOWED. 2.4. THE LEARNED DR RELIED UPON THE ORDER OF REVENUE AUTHORITIES. 3 . ITA NO. 565/CTK/2013 (A.Y.2007 - 08) M/S. UNIDEEP FOOD PROCESSING (P) LTD. VS. ITO 2.5. WE HAVE HEARD THE RIVAL CONTENTION OF BOTH THE PARTIES. LOOKING TO THE FACTS A ND CIRCUMSTANCES OF THE CASE THE CIT(A) HAS HELD THAT ASSESSEE HAS RECEIVED THE LOAN OF RS. 45,29,020/ - FROM 244 PERSONS IN CASH AND MOSTLY IN SUMS OF RS. 18,000/ - , RS. 19,000/ - OR RS. 19,500/ - I.E. JUST BELOW RS.20,000/ - TO AVOID THE PROVISIONS OF SECTION 269SS. MOREOVER THE C IT(A) HAS ALSO DOUBTED THE GENUINENESS OF THE TRANSACTIONS ON THE GROUND THAT THE PERSONS WHO HAVE ADVANCED THE LOAN JUST LIKE SHRI KARTIKA CHANDRA SETHI, WHO EARNS ONLY RS. 40,000/ - PER ANNUM FROM HIS 4.5 ACRES OF AGRICULTURAL LAND WILL ADVANCE ALMOST 50% OF HIS MEAGRE ANNUAL INCOME, IN CASH, WITHOUT INTEREST FOR MORE THAN SI X YEARS AND NOT ASK FOR RETURN OF THE LOAN . SIMILARLY MR. SETHI SASHIDHAR NAYAK CLAIMS THAT HE EARNS RS. 60,000/ - FROM 2.5 ACRES OF LAND AND WHO ALSO WORKS AS A DAILY WAGE LABOURER, DOE S NOT ASK FOR THE RETURN OF THE LOAN IS NOT POSSIBLE. THEREFORE, CIT(A) HAS DOUBTED ABOUT THE GENUINENESS OF THE LOAN. DURING THE COURSE OF HEARING LEARNED AR HAS SUBMITTED DETAILS OF THE UNSECURED LOAN FROM F.Y. 2006 - 07 TO 2012 - 13 AND AS PER THE ASSES SEE T HE ASSESSEE HAS REPAID THIS LOAN DURING THE VARIOUS A SSESSMENT YEARS 2007 - 08 , 2008 - 09 AND 2011 - 12. THEREFORE, IN THE INTEREST OF JUSTICE AND FAIR PLAY WE REVERSE THE FINDING OF CIT(A) AND RESTORE THIS MATTER BACK TO THE FILE OF THE AO TO VERIFY THE GENUINE NESS OF THE TRANSACTION. THE AO IS DIRECTED TO VERIFY WHETHER THE ASSESSEE HAS REPAID THIS AMOUNT TO ALL THE PERSONS STATED IN HIS ACCOUNTS IN VARIOUS YEARS BY CALLING ALL THE CREDITORS . THEREFORE, THE AO IS DIRECTED TO VERIFY AND IF THE ASSESSEE HAS ALREADY REPAID THE AMOUNT , IT MAY BE DELETED AS PER LAW AFTER GIVING DUE OPPORTUNITY OF HEARING TO THE ASSESSEE. 2.6 . IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE. 4 . ITA NO. 565/CTK/2013 (A.Y.2007 - 08) M/S. UNIDEEP FOOD PROCESSING (P) LTD. VS. ITO 3. ORDER PRONOUNCED IN PURSUANCE OF RULE 34(4) OF ITAT RULES, 1963 BY PUTTING ON NOTICE BOARD OF THE BENCH AT CUTTAK IN THE OPEN COURT ON 13.6 .2014 SD/ - SD/ - ( P.K. BANSAL) (D.T. GARASIA) ACCOUNTANT MEMBER JUDICIAL MEMBER PLACE : PANAJI / GOA DATED : 13 .6 .2014 P.S. - *PK* COPY TO : ( 1 ) APPELLANT ( 2 ) RESPONDENT ( 3 ) CIT CONCERNED ( 4 ) CIT(A) ( 5 ) D.R ( 6 ) GUARD FILE TRUE COPY, BY ORDER