Shri Sureshbhai Devabhai Bharwad, Vadodara V. The ITO, Ward-3(1)(4), Vadodara

ITA 633/AHD/2019

AI Insights

The case involves two appeals by Shri Sureshbhai Devabhai Bharwad against the orders of the CIT(Appeals)-3, Vadodara, concerning the assessment years 2013-14 and 2014-15. The primary issues in the appeals were the additions made under Section 69 of the Income Tax Act for unexplained investment and under Section 68 for unexplained cash credit. The assessee argued that the sources of the investments and credits were legitimate and documented, including bank withdrawals and receipts from family members. The Tribunal examined the evidence and found that the additions were not justified, leading to the allowance of both appeals.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 299953 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 11 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-03-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 14-03-2023
• Assessment Year: 2014-2015
• Appeal Filed On: 11-04-2019
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Unexplained investment
• Section: 68; 69; 143(2); 13

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, AHMEDABAD BEFORE MS. SUCHITRA KAMBLE, JUDICIAL MEMBER I .T .A . N o s . 63 2 &6 3 3/ A h d /2 01 9 ( A s s e s s me nt Y ea rs : 2 0 13 - 1 4 &2 0 14 - 1 5) Sh r i Su re s h bh ai D e v ab h a i B h a r wa d GF -1 , O p p. R u p a m C i ne ma , H a r ni R o ad , V ad o d a r a - 39 0 0 06 Vs .I T O, War d - 3 ( 1) ( 4 ) , V a do da r a [ P AN N o. A I B P B 4 2 0 2 G ] (Appellant) .. (Respondent) Appellant by : Shri M. K. Patel, Adv. Respondent by: Shri R. R. Makwana, Sr. D.R. D a t e of H ea r i ng 15.03.2023 D a t e of P r o no u n ce me nt 29.03.2023 O R D E R Both appeals filed by the same assessee are against the order passed by the Ld. CIT(Appeals)-3, Vadodara on 08.02.2019 for A.Ys. 2013-14 & 2014- 15. Firstly ITA No. 632/Ahd/2019 for A.Y. 2013-14 is taken. 2. The grounds of appeal raised by the assessee are as under: “1. That on facts, and in law, the learned CIT(A) has grievously erred in confirming the addition of Rs.4,46,375/- in respect of addition of unexplained investment made u/s 69 of the Act. 2. That on facts, and in law, the learned CIT(A) has grievously erred in confirming the addition of Rs. 2,70,500/- made u/s 68 of the Act. 3. That on facts, in law, and on evidence on record, the entire addition ought to have been deleted, as prayed for. 4. The appellant craves leave to add, alter, amend any ground of appeal.” 3. The assessee filed his return of income on 29.09.2013 declaring total income at Rs. 3,94,610/-. The assessee is an individual engaged in the business in the name and style of Balaji Filling Station and is dealing in petroleum products and LPG Gas products as well as assessee is having petrol pump. The case was selected for scrutiny and notice under Section 143(2) of ITA Nos. 632&633/Ahd/2019 Shri Sureshbhai Devabhai Bharwad vs. ITO Asst.Years–2013-14 & 2014-15 - 2 - the Act was issued on 02.09.2014. The Assessing Officer observed that during the year under consideration the assessee made investment in land with other three co-owners and purchase the land at the cost of Rs. 36,57,500/-. The assessee filed the reply and after taking cognizance of the said reply the Assessing Officer made addition of Rs. 5,14,375/- as unexplained investment under Section 69 of the Act. The Assessing Officer further made addition of Rs.27,05,000/- as unexplained cash credit under Section 68 of the Act related to the unsecured loan worth of Rs. 1,14,95,210/-. The Assessing Officer made disallowance of interest expenses towards Rs. 1,10,940/-. 4. Being aggrieved by the assessment order the assessee filed appeal before the CIT(A). The CIT(A) partly allowed the appeal of the assessee. 5. The Ld. A.R. submitted that as regards the confirmation of the addition of Rs. 4,46,375/- as unexplained investment made under Section 69 of the Act. It is pertinent to note that the assessee has made withdrawal from bank which is a personal saving of the assessee. The assessee has also made withdrawal from proprietary business towards Rs. 2,40,000/- for which the assessee has given the details as well the cash receipt from the father of the assessee amounting to Rs. 2,06,375/-. Thus, the Ld. A.R. submitted that the assessee has given all the details about the source of source as well to the Assessing Officer which was totally ignored and hence the addition confirmed by the CIT(A) is not justifiable. As regards, Ground No. 2 relating to addition of Rs. 2,70,500/- under Section 68 in respect of unexplained cash credit the Ld. A.R. submitted that the assessee has given the confirmation as well as the amount was received by cheque and thus through the identity, the genuineness, the creditworthiness of the transaction. In fact, the so-called cash credit was repaid to the A.Y. 2014-15 as it was related to the sales and purchases of the ITA Nos. 632&633/Ahd/2019 Shri Sureshbhai Devabhai Bharwad vs. ITO Asst.Years–2013-14 & 2014-15 - 3 - assessee. The Ld. A.R. submitted that books of the assessee were accepted and sales of the assessee were also not doubted. Hence, this addition also does not sustain. 6. The Ld. D.R. relied upon the assessment order and the order of the CIT(A). As relates to Ground No. 1 the Ld. D.R. submitted that assessee has not established the proprietary concern cash withdrawal. 7. Heard both the parties and perused all the relevant material available on record. As regards, Ground No. 1 from the perusal of the evidences produced by the assessee before the Assessing Officer as well as before the CIT(A) appears that the cash withdrawal from proprietary business was explained by the assessee through withdrawal detail from the bank as well as the confirmation of the assessee’s father in respect of the cash receipt from father. The Assessing Officer though made addition has not given any contrary findings as to the genuineness, identity and creditworthiness of the withdrawal from proprietary business or cash receipt from his father and therefore, the addition made by the Assessing Officer does not sustain. Ground No. 1 is allowed. As regards, Ground No. 2 the assessee has given all the relevant evidences before the Assessing Officer in respect of the entry which was received by cheque that in confirmation of the said amount as well as the certificate from the Bank of Baroda stating that the entry was duly received by account payee cheque. The assessee has given the identity, genuineness and creditworthiness of the transaction by explaining it the sales and purchases to those parties and the books entries in that respect. Besides this the assessee has made repayment in the subsequent year. Thus, the addition in respect of cash credit does not sustain. Ground No. 2 is allowed. Thus, ITA No. 632/Ahd/2019 for A.Y. 2013-14 is allowed. ITA Nos. 632&633/Ahd/2019 Shri Sureshbhai Devabhai Bharwad vs. ITO Asst.Years–2013-14 & 2014-15 - 4 - 8. As regards ITA No. 633/Ahd/2019 for A.Y. 2014-15. The assessee raised the following the grounds of appeal: “1. That on facts, and in law, the learned CIT(A) has grievously erred in confirming the addition of Rs. 2,70,500/- in respect of repayment of loan. 2. That on facts, in law, and on evidence on record, the entire addition ought to have been deleted, as prayed for. 3. The appellant craves leave to add, alter, amend any ground of appeal.” 9. The issue is related to repayment of Rs. 2,70,500/- of the loan. The amount which has been added in assessment order 2013-14 as unexplained cash credit has been exactly repaid in this year and thus the assessee has explained the repayment and therefore, the addition does not sustain. Thus, ITA No. 633/Ahd/2019 for A.Y. 2014-15 is allowed. 10. In the combined result, both the appeals filed by the assessee are allowed. This Order pronounced in Open Court on 29/03/2023 Sd/- (SUCHITRA KAMBLE) JUDICIAL MEMBER Ahmedabad; Dated 29/03/2023 TANMAY, Sr. PS TRUE COPY आदेश क त ल प अ े षत/ Copy of the Order forwarded to : 1. अपीलाथ / The Appellant 2. यथ / The Respondent. 3. संबं धत आयकर आय ु त / Concerned CIT 4. आयकर आय ु त(अपील) / The CIT(A)- 5. वभागीय त न ध, आयकर अपील!य अ धकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड' फाईल / Guard file. आदेशान ु सार/ BY ORDER, उप/सहायक पंजीकार (Dy./Asstt.Registrar) आयकर अपील य अ धकरण, अहमदाबाद / ITAT, Ahmedabad