Income tax Officer, V. Hasmukh Hirjibhai Shah, Pune

ITA 58/PUN/2017

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 2832 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 5 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-06-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 25-04-2019
• Assessment Year: 2007-2008
• Appeal Filed On: 06-01-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: SANJEEV GHEI
• Keywords: Accommodation entries
• Section: 143(3); 143(1); 147; 148

Judgement Text

] IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE BEFORE MS. SUSHMA CHOWLA, JM AND SHRI ANIL CHATURVEDI, AM . / ITA NO.58/PUN/2017 / ASSESSMENT YEAR : 2007-08 THE INCOME TAX OFFICER, WARD 6(3) PUNE. . / APPELLANT V/S SHRI HASMUKH HIRJIBHAI SHAH, 1101/1, BUDHWAR PETH, PUNE 411002. PAN : ADXPS3533L. . / RESPONDENT ASSESSEE BY : SHRI SANJEEV GHEI REVENUE BY : SHRI NIKHIL PATHAK. / ORDER PER ANIL CHATURVEDI, AM : 1. THIS APPEAL FILED BY THE REVENUE IS EMANATING OUT OF THE O RDER OF COMMISSIONER OF INCOME TAX (A) 4, PUNE DT.10.09.2016 FOR THE ASSESSMENT YEAR 2007-08. 2. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERIAL ON R ECORD ARE AS UNDER :- ASSESSEE IS AN INDIVIDUAL WHO FILED HIS RETURN OF INCOME FOR A .Y. 2007-08 ON 25.03.2008 DECLARING TOTAL INCOME OF RS.4,33,910/ -. THE RETURN OF INCOME WAS INITIALLY PROCESSED U/S 143(1) OF THE ACT. TH EREAFTER, THE CASE WAS RE-OPENED U/S 147 OF THE ACT BY ISSUING NOTICE U/S 148 OF THE ACT / DATE OF HEARING : 25.04.2019 / DATE OF PRONOUNCEMENT: 07.06.2019 2 ITA NO.58/PUN/2017 DT.30.03.2014 WHICH WAS ISSUED AND SERVED ON THE ASSESSE E. THEREAFTER ASSESSMENT WAS FRAMED U/S 143(3) R.W.S. 147 OF THE ACT B Y ORDER DT.30.03.2015 AND THE TOTAL INCOME WAS DETERMINED AT RS. 78,33,910/-. AGGRIEVED BY THE ORDER OF AO, ASSESSEE CARRIED THE MATT ER BEFORE LD.CIT(A), WHO VIDE ORDER DT.10.09.2016 (IN APPEAL NO.PN/CIT(A)-4/IT O, WARD-5(3), PUNE/126/2015-16) GRANTED SUBSTANTIAL RELIEF TO THE ASSE SSEE. AGGRIEVED BY THE ORDER OF LD.CIT(A), REVENUE IS NOW IN APPEAL BEFORE US A ND HAS RAISED THE FOLLOWING GROUNDS : 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD.CIT(A) ERRED IN NOT CONSIDERING THE ASSESSING OFFICERS CO NTENTION THAT THE KARTA OF HUF IS THE MANAGER OF THE FINANCIAL TRANSACTIONS MA DE IN THE NAME OF THE HUF AND MANIPULATED THE TRANSACTIONS BY DEPOSITING THE CHEQUES IN THE BANK ACCOUNTS OF THE HUF ? 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD.CIT(A) ERRED IN NOT ADJUDGING THE FACTS OF THE CASE ON MER ITS INSTEAD DECIDED THE CASE ON TECHNICAL GROUNDS ONLY ? 3. FOR THIS SUCH OTHER REASONS AS MAY BE URGED AT T HE TIME OF HEARING, THE ORDER OF THE CIT(A) BE VACATED AND THAT OF THE ASSE SSING OFFICER BE RESTORED.' 3. ALL THE GROUNDS BEING INTER-CONNECTED ARE CONSIDERED TOGETHE R. 4. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, ON THE BASIS OF INFORMATION RECEIVED IN HIS OFFICE, AO NOTICED THAT DURING THE YEAR UNDER CONSIDERATION, ASSESSEE HAD RECEIVED TOTAL AMOUNT OF RS.7 4 LAKHS IN AGGRIGATE AS LOAN FROM KAILASH INTERNATIONAL, NATASHA ENTERPRISE S AND MOHIT INTERNATIONAL. THE ASSESSEE WAS ASKED TO SUBSTANTIATE THE LOAN TAKEN AND GIVE THE DETAILS OF THE SAME. THE ASSESSEE INTER-ALIA SUBM ITTED THAT THE LOANS AND ADVANCES WERE EXCLUSIVELY RECEIVED AND UTILIZED BY THE KARTA OF HUF AND WAS REFLECTED IN THE AUDITED ACCOUNTS IN THE HU FS RETURN OF INCOME. THE SUBMISSION OF THE ASSESSEE WAS NOT FOUND ACCE PTABLE TO THE AO. AO WAS OF THE VIEW THAT THE GENUINENESS OF SOURCES OF LOAN WAS NOT PROVED BY THE ASSESSEE. AO NOTED THAT SINCE ASSESSEE HAD RAISED THE ISSUE 3 ITA NO.58/PUN/2017 OF TAXATION IN THE HANDS OF HUF AND NOT IN HIS INDIVIDUAL CAP ACITY, TO PROTECT THE INTEREST OF THE REVENUE, SUBSTANTIVE ADDITION OF RS.74 LAKHS WAS MADE IN THE HANDS OF INDIVIDUAL AND PROTECTIVE ADDITION WAS MADE IN THE HANDS OF HUF. AGGRIEVED BY THE ORDER OF AO, ASSESSEE C ARRIED THE MATTER BEFORE LD.CIT(A), WHO DELETED THE ADDITION BY OBSERVING UNDER : 6.3 DECISION :- I HAVE PERUSED THE ASSESSMENT ORDER THE SUBMISSION MADE BY THE APPELLANT AND THE DETAILED / EVIDENCES FILED IN THE PAPER BOOK AS STATED ABOVE CAREFULLY. I FIND THAT DURING THE RE-ASSESSMENT PROCEEDING, VIRTUALLY, THE AO DID NOT CONSIDER THE DETAILED SUBMISSION MADE BEFORE HIM BY THE APPELLANT. IT EVIDENTLY TRAN SPIRES FROM THE ASSESSMENT ORDER THAT THE APPELLANT FILED SUBMISSIO N STATING THE FACTS OF THE CASE IN HIS LETTER DATED 20/01/2015 CONTENDING THAT THE LOAN TRANSACTION OF RS. 74,00,000/- WERE MADE IN THE NAM E OF HASMUKH H SHAH (HUF) DURING A.Y.2007-08 NOT SHRI. HASMUKH H S HAH (INDIVIDUAL). IT IS FURTHER SEEN THAT VIDE SUBMISSION DATED 16/03/20 15, THE APPELLANT RE- ITERATED THE AFORESAID FACTS INTER-ALIA CONTENDING THAT ANOTHER LETTER WAS FILED BEFORE THE AO ON 11/03/2015. THE APPELLANT FU RTHER FILED THE LETTER ON 24/03/2015 THE CONDENSE OF WHICH HAVE. ALSO BEEN BRIEFLY STATED BY THE AO IN PARA 8 OF THE ASSESSMENT ORDER. HOWEVER, NO DETAILED DISCUSSION WAS MADE BY THE AO AS TO WHY THE APPELLANT'S CLAIM THAT THE TRANSACTIONS PERTAINED TO THE HUF AND NOT BE INDIVI DUAL SHOULD NOT BE ACCEPTED. THE APPELLANT HAD SUBMITTED TIME AND AGAIN HIS SAY THAT THE BALANCE SHEET AND THE AUDITED ACCOUNT MADE IN THE C ASE OF HUF IN THE YEAR 2007 ARE FAR BEFORE THE STATEMENT OF SHRI PRAVEEN J AIN RECORDED IN THE YEAR 2013 AND FURTHER THAT THE AFORESAID TRANSACTION WER E REFLECTED IN THE RETURN AND ACCOUNTS FILED BEFORE THE DEPARTMENT IN THE CAS E OF THE HUF, WERE NOT CONSIDERED AND DECIDED BY THE AO IN THE ASSESSMENT ORDER. THAT BEING THE MAIN ISSUE IN THE CASE OF THE APPELLANT, THE SAME W AS REQUIRED TO BE ELABORATELY DISCUSSED BY THE AO WITH REFERENCE TO T HE DETAILS / EVIDENCES FILED BESIDES VARIOUS SUBMISSIONS MADE BEFORE HIM B Y THE APPELLANT. INSTEAD OF HARPING ON THE SAME, THE AO DISCUSSED THE FACTS OF THE STATEMENT OF SHRI PRAVEEN JAIN, ACCOMMODATION ENTRIES, TECHNICAL DEFEC T OF SEC.292B ETC., WHICH IN MY OPINION, HAD RESULTED INTO DETRACTION FROM TH E MAIN ISSUE IN THIS CASE. I FIND FROM THE COPIES OF BALANCE SHEET AND AUDITED A CCOUNT AND BANK ACCOUNT OF UTI BANK LTD. AS WELL AS LEDGER ACCOUNT OF THE C ONCERNED LOAN CREDITOR THAT THE TRANSACTION OF LOANS AND ADVANCES OF RS. 74,00, 000/- WERE EFFECTED IN BETWEEN THE 3 LOAN CREDITORS NAMELY M/S. KAILASH IN TERNATIONAL, NATASH ENTERPRISES AND MOHIT INTERNATIONAL OF RS. 44,00,00 0/- , RS.10,00,000/- AND RS.20,00,000/- ON 07-08/06/2006, 07/06/2006 AND 07/ 06/2006 RESPECTIVELY AND ALSO HASMUKH H SHAH (HUF). THE TRA NSACTION NO WERE INDICATE THAT THE SAME WERE MADE IN BETWEEN IN AFOR ESAID 3 PARTIES AND SHRI HASMUKH H SHAH IN HIS INDIVIDUAL CAPACITY. A PLAIN LOOKING OF THE DOCUMENTS FILED BY THE APPELLANT BEFORE THE AO COULD IMPLICIT LY PROVE THE AFORESAID FACTS. ACCORDINGLY I AGREE WITH THE SUBMISSION OF THE APPE LLANT THAT THE AO ERRED IN MAKING ADDITION OF UNSECURED LOAN OF RS.74,00,000/- IN THE HANDS OF THE APPELLANT UNDER CONSIDERATION. ACTION, IF ANY, WAS REQUIRED TO THE TAKEN IN THE HANDS OF THE HUF NAMELY HASMUKH H SHAH (HUF) BY THE CONCERNED ASSESSING OFFICER HAVING JURISDICTION OVER THE SAID CASE. THE ADDITION SO MADE OF RS. 74,00,000/- IN THE CASE OF THE APPELLAN T IS HEREBY DELETED. GROUND NO.4 AND 5 ARE ACCORDINGLY ALLOWED. 4 ITA NO.58/PUN/2017 AGGRIEVED BY THE ORDER OF LD.CIT(A), REVENUE IS NOW BEFORE US. 5. BEFORE US, LD.D.R. SUPPORTED THE ORDER OF AO. LD.A.R. ON THE OTHER HAND, REITERATED THE SUBMISSIONS MADE BEFORE AO AND LD.C IT(A) AND SUPPORTED THE ORDER OF LD.CIT(A). 6. WE HAVE HEARD THE RIVAL SUBMISSIONS MADE BEFORE AO AN D LD.CIT(A). THE ISSUE IN THE PRESENT GROUND IS WITH RESPECT TO ADDIT ION OF RS.74 LAKHS IN THE HANDS OF THE ASSESSEE. IT IS THE CASE OF ASSESSEE THAT THE AMOUNT HAS BEEN RECEIVED BY THE KARTA OF HUF AND NOT BY THE ASSESSEE IN HIS INDIVIDUAL CAPACITY. WE FIND THAT LD .CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE AND THE DOC UMENTS FURNISHED BEFORE HIM HAS GIVEN A FINDING THAT THE TRANSACTION OF RS.74 LAKHS WAS EFFECTED BETWEEN KAILASH INTERNATIONAL, NATASHA ENTERPRIS ES AND MOHIT INTERNATIONAL AND THE HUF OF ASSESSEE AND THAT THE T RANSACTIONS NOWHERE INDICATED THAT THE SAME WERE MADE BY ASSESSEE IN HIS IND IVIDUAL CAPACITY. BEFORE US, REVENUE HAS NOT PLACED ANY MATERIAL ON RECORD TO CONTROVERT THE FINDINGS OF LD.CIT(A) OR HAS POINTED ANY FALLACY IN THE FINDINGS O F LD.CIT(A). WE THEREFORE FIND NO REASON TO INTERFERE WITH THE ORDER O F LD.CIT(A). THUS, THE GROUNDS OF THE REVENUE ARE DISMISSED. 7. IN THE RESULT, THE APPEAL OF REVENUE IS DISMISSED. ORDER PRONOUNCED ON 7 TH DAY OF JUNE, 2019. SD/- SD/- ( SUSHMA CHOWLA ) ( ANIL CHATURVEDI ) ! / JUDICIAL MEMBER '! / ACCOUNTANT MEMBER PUNE; DATED : 7 TH JUNE, 2019. YAMINI 5 ITA NO.58/PUN/2017 #$%&'('% / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. 4. 5 6. CIT(A)-4, PUNE. PR. CIT-3, PUNE. '#$ %%&',) &', / DR, ITAT, A PUNE; $,-./ GUARD FILE. / BY ORDER // TRUE COPY // /01%2&3 / SR. PRIVATE SECRETARY ) &', / ITAT, PUNE.