USHA SHRAWAN RATHOD, MUMBAI V. ASST CIT 19(3), MUMBAI

ITA 5815/MUM/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 93094 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2015
• Appeal Filed By: Assessee
• Bench Allotted: F
• Assessment Year: 1995-1996
• Appeal Filed On: 27-09-2013
• Court: TRIBUNAL
• Keywords: Reopening of assessment; Unexplained cash credit; Revision of order; Difference of opinion; Accommodation entries; Change of opinion
• Section: 143(3); 133A; 131; 68; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH F MUMBAI. BEFORE SHRI G.S. PANNU, ACCOUNTANT MEMBER AND SHRI AMIT SHUKLA , JUDICIAL MEMBER ITA NO 5815 /MUM/2013 ASSESSMENT YEAR: - 1995 - 96 SMT. USHA SHRAWAN RATHOD, C/O. D.C. BOTHRA & CO. (CA) 297, TARDEO ROAD, WILLE MANSION, 01 ST FLOOR, OPP BANK OF INDIA, NANA CHOWK, MUMBAI 400007. VS.` ASST. CIT 19(3), 3 RD FLOOR, PIRAMAL CHAMBERS, LALBAUG, MUMBAI 400012. PAN/GIR NO. AABPR9972R APPELLANT RESPONDENT ITA NO 5816/MUM/2013 ASSESSMENT YEAR: - 1995 - 96 SMT. USHA SHRAWAN RATHOD, L/H OF LATE OF SHRI SHRAWAN RATHOD C/O. D.C. BOTHRA & CO. (CA) 297, TARDEO ROAD, WILLE MANSION, 01 ST FLOOR, OPP BANK OF INDIA, NANA CHOWK, MUMBAI 400007. VS.` ASST. CIT 19(3), 3 RD FLOOR, PIRAMAL CHAMBERS, LALBAUG, MUMBAI 400012. PAN/GIR NO. AABPR9972R APPELLANT RESPONDENT ORDER PER G.S. PANNU, AM THE CAPTIONED TWO APPEALS INVOLVED SIMILAR ISSUES AND, THEREFORE, THEY HAVE BEEN HEARD TOGETHER AND A CONSOLIDATED ORDER IS BEING PASSED FOR THE SAKE OF CONVENIENCE AND BREVITY . ITA NO. 5815/MUM/2013, IS AN APPEAL ASSESSEE BY SHRI RAJKUMAR SINGH REVENUE BY SHRI PAWAN KUMAR BEERLA DATE OF HEARING 06.05.2015 DATE OF PRONOUNCEMENT 30 .06.2015 2 ITA NO 5815/MUM/2013 ASSESSMENT YEAR: - 1995 - 96 ITA NO 5816/MUM/2013 ASSESSMENT YEAR: - 1995 - 96 PAGE 2 OF 9 DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) [HEREINAFTER REFERRED TO AS THE CIT(A)] DATED 26.07.2013 , WHICH IN - TURN HAS ARISEN FROM AN ORDER PASSED BY THE ASSESSING OFFICER U/S 143(3) OF THE INCOME TAX ACT, 1961( HEREINAFTER REFERRED TO AS THE ACT) DATED 16.02.2004 PERTAINING TO ASSESSMENT YEAR 1995 - 96. IN THIS APPEAL, ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL. 1 . THAT ON FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT (APPEALS) HAS ERRED IN CONFIRMING THE ADDITION MADE U/S. 68 BY THE LD. ASSESSING OFFICER AT RS. 3,00,000/ - IN THE ORDER PASSED U/S. 143(3) R.W.S 263 IN RESPECT OF UNSECURED LOANS TAKEN FROM 5 PARTIES, FOR VERIFICATION OF WHICH LOANS ASSESSM ENT WAS ALREADY REOPENED AND AFTER DUE EXAMINATION AND VERIFICATION SAME WERE ACCEPTED IN THE EARLIER ASSESSMENT ORDER PASSED U/S. 143(3) R.W.S 147 OF THE INCOME TAX, ACT. 1961. 2. THAT IN VIEW OF THE APPEAL GROUND NO. 1, ORDER PASSED BY LD. ASSESSING OFF ICER U/S. 143(3) R.W.S 263 IS BAD IN LAW AND VOID AB - INITIO, BEING MAKING AND ADDITION IN RESPECT OF AN ISSUE AT THE BEHEST OF THE LD. CIT, WITHOUT APPRECIATING THAT THE SAID ISSUE WAS ALREADY EXAMINED & ACCEPTED SPECIFICALLY FOR WHICH ASSESSMENT WAS REOPE NED, AMOUNTS NOTHING BUT ONLY CHANGE OF OPINION & REVIEW OF THE DECISION ARRIVED AT BY THE EARLIER ASSESSING OFFICER AFTER DUE EXAMINATION , VERIFICATION AND ALSO APPLICATION OF MIND, WHICH IS NOT PERMISSIBLE UNDER THE PROVISIONS OF TAX LAW. 2. ALTHOUGH, ASSESSEE HAS RAISED MULTIPLE GROUNDS OF APPEAL BUT THE MAIN DISPUTE IS WITH REGARD TO AN ADDITION MADE BY THE ASSESSING OFFICER TREATING A SUM OF RS. 3,00,000/ - AS AN UNEXPLAINED CASH CREDIT WITHIN THE MEANING OF SECTION 68 OF THE ACT. IN BRIEF, THE RELEVANT FACTS ARE THAT ASSESSEE IS AN INDIVIDUAL WHO FILED HER RETURN OF INCOME ON 26.03.1996 DECLARING A TOTAL 3 ITA NO 5815/MUM/2013 ASSESSMENT YEAR: - 1995 - 96 ITA NO 5816/MUM/2013 ASSESSMENT YEAR: - 1995 - 96 PAGE 3 OF 9 INCOME OF RS. 58,170/ - . THE SAID RETURN OF INCOME WAS PROCESSED U/S 143(1) OF THE ACT, BUT THEREAFTER , THE ASSESSMENT WAS RE - OPENED BY ISS UANCE OF NOTICE U/S 148 OF THE ACT, WHICH RESULTED IN AN ASSESSMENT U/S 143(3) R.W.S 147 OF THE ACT ON 28.03.2003. SUBSEQUENTLY, THE ASSESSMENT ORDER DATED 28.03.2003 (SUPRA) WAS A SUBJECT MATTER OF REVISION BY THE COMMISSIONER OF INCOME TAX - 19, MUMBAI, I N TERMS OF SECTION 263 OF THE ACT. THE COMMISSIONER OF INCOME TAX 19, MUMBAI , VIDE ORDER DATED 30.06.2003 HELD THE ASSESSMENT ORDER DATED 28.03.2003 (SUPRA) AS ERRONEOUS IN SO FAR AS IT WAS PREJUDICIAL TO THE INTEREST S OF REVENUE WITHIN THE MEANING OF SECTION 263 OF THE ACT, AND SET ASIDE THE SAME WITH CERTAIN DIRECTIONS TO THE ASSESSING OFFICER. THE IMPUGNED ASSESSMENT HAS BEEN CARRIED OUT BY THE ASSESSING OFFICER IN PURSUANCE TO THE DIRECTIONS OF COMMISSIONER OF INCOME TAX - 19, MUMBAI, U/S 263 OF THE A CT. IN THE IMPUGNED ASSESSMENT, THE TOTAL INCOME HAS BEEN ASSESSED AT RS. 3,58,170,/ - WHICH INTER - ALIA , INCLUDES THE ADDITION OF RS. 3,00,000/ - U/S 68 OF THE ACT. 3. IN BRIEF, THE CIRCUMSTANCES LEADING TO THE IMPUGNED DISPUTE CAN BE SUMMARIZED AS FOLLOWS . A SURVEY ACTION U/S 133A OF THE ACT WAS CARRIED OUT IN THE PREMISES OF ONE SHRI NITIN J. RUGHANI, WHO ADMITTED THAT HE WAS INVOLVED IN PROVIDING HAWALA ENTRIES BY ARRANGING LOANS. ASSESSEE WAS FOUND TO HAVE TAKEN LOAN FROM SOME OF THE PARTIES RELATED TO THE SAID SHRI NITIN J. RUGHANI. IN THE COURSE OF SURVEY, CERTAIN MATERIAL IN THE SHAPE OF BANK PASS BOOKS, CHEQUE BOOKS AND PAY - IN - SLIPS, BELONGING TO THIRD PARTIES, WERE FOUND. THOSE PARTIES CONFIRMED IN THEIR STATEMENTS THAT THEY HAD GIVEN THEIR PASS BOO KS, CHEQUE 4 ITA NO 5815/MUM/2013 ASSESSMENT YEAR: - 1995 - 96 ITA NO 5816/MUM/2013 ASSESSMENT YEAR: - 1995 - 96 PAGE 4 OF 9 BOOKS, ETC TO SHRI NITIN J. RUGHANI, IN ORDER TO FACILITATE THE TRANSACTIONS TO BE ROUTED THROUGH THEIR BANK ACCOUNTS FOR WHICH THEY RECEIVED CONSIDERATION IN CASH. THE APPELLANT WAS ALSO FOUND TO HAVE RECEIVED CERTAIN UNSECURED LOANS FROM VAR IOUS PARTIES THROUGH ACCOUNT PAYEE CHEQUES AND SUCH LOANS WERE TO THE TUNE OF RS. 3,00,000/ - . THE ASSESSING OFFICER HAVING REGARD TO THE STATEMENT OF SHRI NITIN J. RUGHANI HAS TREATED THE UNSECURED LOAN S OF RS. 3,00,000/ - RECEIVED BY ASSESSEE FROM VARIOUS PARTIES A S MERE ACCOMMODATION ENTRIES OBTAINED BY THE ASSESSEE. ACCORDINGLY, THE SAME WAS TREATED AS UNEXPLAINED CASH CREDIT U/S 68 OF THE ACT. THIS ADDITION OF RS. 3,00,000/ - MADE BY THE ASSESSING OFFICER IS THE SUBJECT MATTER OF DISPUTE BEFORE US. 4. BEFORE US, THE LD. REPRESENTATIVE FOR THE ASSESSEE POINTED OUT THAT THE ASSESSMENT ORDER PASSED ON 28.03.2003 (SUPRA) WAS IN PURSUANCE TO THE REOPENING OF ASSESSMENT U/S 147/148 OF THE ACT AND IN THE COURSE OF SUCH ASSESSMENT , COMPLETE ENQUIRIES WITH REGARD TO THE GENUINENESS OF THE IMPUGNED LOAN S OF RS. 3,00,000/ - WAS CARRIED OUT BY THE ASSESSING OFFICER. IT IS THE CLAIM OF THE APPELLANT THAT THE ASSESSMENT WAS RE - OPENED AND FINALIZED ON 28.03.2003 (SUPRA) ONLY FOR THE PURPOSE OF EXAMINING THE GENUINENESS OF LOANS , BASED ON THE STATEMENT OF SHRI NITIN J. RUGHANI. IN THE SAID ASSESSMENT, THE ASSESSING OFFICER WAS SATISFIED THAT THE LOAN S OF RS. 3,00,000/ - W ERE GENUINE AND NO ADDITION WAS MADE. IT WAS, THEREFORE, CONTENDED THAT DURING THE IMPUGNED PROCEEDINGS NO FRESH MATERIAL HAS BEEN BROUGHT OUT BY THE ASSESSING OFFICER TO TREAT THE IMPUGNED LOANS OF RS. 3,00,000/ - AS UNEXPLAINED WITHIN THE MEANING OF SECTION 68 OF THE ACT. THE LD. REPRESENTATIVE FOR THE 5 ITA NO 5815/MUM/2013 ASSESSMENT YEAR: - 1995 - 96 ITA NO 5816/MUM/2013 ASSESSMENT YEAR: - 1995 - 96 PAGE 5 OF 9 ASSESSEE HAS REFERRED T O THE DETAILED WRITTEN SUBMISSIONS MADE TO THE CIT(A), WHICH HAVE BEEN REPRODUCED BY THE CIT(A) IN PARA 2.2 OF THE IMPUGNED ORDER. ON THAT BASIS , IT IS CONTENDED THAT THE CIT(A) ERRED IN SUSTAINING THE ADDITION OF RS. 3,00,000/ - U/S 68 OF THE ACT. 5. ON THE OTHER HAND, THE LD. DR APPEARING FOR THE REVENUE HAS CONTENDED THAT THE STATEMENT OF SHRI NITIN J. RUGHANI AND THE MATERIAL FOUND DURING THE COURSE OF SURVEY ACTION CLEARLY ESTABLISH THAT THE LOANS RECEIVED BY THE ASSESSEE WERE MERE ACCOMMODATION ENTR IES. THEREFORE, THE ADDITION IS SOUGHT TO BE JUSTIFIED. 6. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIONS. IN THE PRESENT CASE, WE FIND THAT THE STARTING POINT OF THE DISPUTE IS A SURVEY ACTION IN THE CASE OF SHRI NITIN J. RUGHANI AND HIS STATEMEN T RECORDED ON VARIOUS DATES NAMELY 19.07.2015, 25.07.2015 AND 26.07.2015. IT TRANSPIRES THAT IN THE STATEMENT SO RECORDED, SHRI NITIN J. RUGHANI ADMITTED OF GIVING HAWALA ENTRIES WHILE ARRANGING LOANS. THE SAID PERSON WAS FOUND TO BE IN POSSESSION OF PASS BOOKS, CHEQUE BOOKS OF BANK ACCOUNTS WHICH WERE IN THE NAME OF CERTAIN PERSONS. ON THE BASIS OF SUCH STATEMENT OF SHRI NITIN J. RUGHANI, THE ASSESSMENT OF THE ASSESSEE WAS RE - OPENED BY ISSUANCE OF NOTICE U/S 148 OF THE ACT ON 27.03.2002 WHICH CULMINATED IN ASSESSMENT DATED 28.03.2003 (SUPRA). THE CASE SET UP BY THE ASSESSEE IS THAT IN THE COURSE OF SUCH ASSESSMENT, COMPLETE DETAILS OF IMPUGNED UNSECURED LOANS RECEIVED DURING THE YEAR , LIKE LOAN CONFIRMATION, GENUINENESS AND CREDITWORTHINESS OF THE CREDITORS WAS 6 ITA NO 5815/MUM/2013 ASSESSMENT YEAR: - 1995 - 96 ITA NO 5816/MUM/2013 ASSESSMENT YEAR: - 1995 - 96 PAGE 6 OF 9 EXAMINED AND THE ASSESSING OFFICER WAS SATISFIED AND, THEREFORE, NO ADDITION WAS MADE. BEFORE THE CIT(A) ASSESSEE HAS ALSO STATED THAT IN THE COURSE OF S UCH PROCEEDINGS, THE ASSESSING OFFICER SUMMONED THE RESPECTIVE PARTIES U/S 131 OF THE ACT AND RECO RDED THEIR STATEMENTS. IT IS ALSO STATED BY THE ASSESSEE THAT SHRI NITIN J. RUGHANI ALSO FILED AN AFFIDAVIT WITH THE ASSESSING OFFICER STATING THAT THE STATEMENT GIVEN BY HIM ON 4.07.1993, ADMITTING HAWALA TRANSACTIONS, NOWHERE SPECIFICALLY GAVE THE REFER ENCE OF THE ASSESSEE. SHRI NITIN J. RUGHANI CONFIRMED IN THE AFFIDAVIT THAT ALL THE TRANSACTIONS RELATING TO THE ASSESSEE ARE GENUINE. 7. IN THIS BACKGROUND, SUBSEQUENT TO THE COMPLETION OF ASSESSMENT ON 28.03.2003 (SUPRA), THE COMMISSIONER INVOKING HIS REVISIONARY JURISDICTION U/S 263 OF THE ACT , HAS SET ASIDE SUCH ASSESSMENT. IN THE IMPUGNED ASSESSMENT, THE UNSECURED LOANS RECEIVED DURING THE YEAR OF RS. 3,00,000/ - HAVE B EEN HELD TO BE UNEXPLAINED CASH - CREDIT S WITHIN THE MEANING OF SECTION 68 OF THE A CT. WE FIND THAT IN THE IMPUGNED ASSESSMENT, WHICH HAS BEEN AFFIRMED BY THE CIT(A) ALSO, THERE IS NO MATERIAL REFERRED BY THE ASSESSING OF FICER WHICH CAME TO HIS NOTICE SUBSEQUENT TO THE ASSESSMENT ORDER DATED 28.03.2003(SUPRA). PERTINENTLY, IN THE ASSESSM ENT ORDER DATED 28.03.2003 (SUPRA), THE STATEMENT OF SHRI NITIN J. RUGHANI SOUGHT TO BE RELIED UPON BY THE ASSESSING OFFICER IN THE IMPUGNED ASSESSMENT, WAS VERY MUCH AVAILABLE AND IT IS NOT A NEW MATERIAL . IN FACT, IN THE COURSE OF THE ASSESSMENT DATED 28 .03.2003 (SUPRA), THE ASSESSING OFFICER CARRIED OUT DETAILED ENQUIRIES INCLUDING EXAMINATION OF THE CONCERNED PARTIES U/S 133(1) OF THE ACT. AN 7 ITA NO 5815/MUM/2013 ASSESSMENT YEAR: - 1995 - 96 ITA NO 5816/MUM/2013 ASSESSMENT YEAR: - 1995 - 96 PAGE 7 OF 9 AFFIDAVIT WAS ALSO FILED BY SHRI NITIN J. RUGHANI POINTING OUT THAT SO FAR AS THE TRANSACTIONS RELATING TO THE A SSESSEE WERE CONCERNED, THE SAME ARE GENUINE. ALL THESE ASSERTIONS HAVE BEEN MADE BEFORE THE CIT(A). SO HOWEVER, WE FIND THAT THE CIT(A) HAS GLOSSED OVER THE SAME AND HE HAS MERELY REFERRED TO THE MATERIAL WITH THE ASSESSING OFFICER PRIOR TO THE FINALIZATION OF ASSESSMENT ORDER DATED 28.03.2009(SUPRA). OSTENSIBLY, SUCH MATERIAL WAS PUT TO VERIFICATION BY ASSESSING OFFICER AND ONLY THERE AFTER, HE HAS ACCEPTED THE TRANSACTIO NS AS GENUINE IN THE ASSESSMENT DATED 28.03.2003 (SUPRA). CONSIDERING THE ENTIRETY OF FACTS AND CIRCUMSTANCES OF THE PRESENT CASE, WE ARE UNABLE TO UPHOLD THE ASSERTIONS OF THE ASSESSING OFFICER THAT THE UNSECURED LOAN S OF RS. 3,00,000/ - RECEIVED BY THE AS SESSEE DURING THE YEAR UNDER CONSIDERATION W ERE UNEXPLAINED WITHIN THE MEANING OF SECTION 68 OF THE ACT. AS A CONSEQUENCE, WE SET ASIDE THE ORDER OF CIT(A) AND DIRECT THE ASSESSING OFFICER TO DELETE THE ADDITION OF RS. 3,00,000/ - . THUS, ASSESSEE SUCCEEDS I N ITS APPEAL. 8. INSOFAR AS, APPEAL IN ITA NO. 5816 IS CONCERNED , THE SAME RELATES TO AN ADDITION OF RS. 1,50,000/ - MADE BY THE ASSESSING OFFICER BY INVOKING SECTION 68 OF THE ACT WITH REGARD TO THE UNSECURED LOANS RECEIVED DURING THE YEAR . THE FACTS AND CIRCUMSTANCES IN THE CONTEXT OF SAID ADDITION ARE SIMILAR TO THOSE CONSIDERED BY US IN THE EARLIER APPEAL IN ITA NO. 5815/MUM/2013. SINCE THE FACTS AND CIRCUMSTANCES IN THIS APPEAL ARE SIMILAR TO THOSE CONSIDERED BY US IN ITA NO. 5815/MUM/2013, OUR DECISIO N IN THE APPEAL OF ASSESSEE IN ITA NO. 8 ITA NO 5815/MUM/2013 ASSESSMENT YEAR: - 1995 - 96 ITA NO 5816/MUM/2013 ASSESSMENT YEAR: - 1995 - 96 PAGE 8 OF 9 5815/MUM/2013 SHALL APPLY MUTATIS MUTANDIS IN THE OTHER CAPTIONED APPEAL ALSO. 9 . IN THE RESULT, BOTH APPEALS OF THE ASSESSEE ARE ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON THIS 30 TH DAY OF JUNE 2015. SD/ - SD/ - ( AMIT SHUKLA) (G.S. PANNU) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER ) MUMBAI DATED 30 - 06 - 2015 SKS SR. P.S, COPY TO: THE APPELLANT THE RESPONDENT THE CONCERNED CIT(A) THE CONCERNED CIT THE DR, F BENCH, ITAT, MUMBAI BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCHES, MUMBAI