BHANWARLAL G CHAUDHARY, MUMBAI V. ITO WD 24(1)(3), MUMBAI

ITA 6401/MUM/2009

• Counselvise Citation: [2010] 119 COUNSELVISE.COM (IT) 6400 (ITAT-MUMBAI)
• Duration Of Justice: 11 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-11-2010
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: J
• Next Hearing Date: 20-12-2010
• Assessment Year: 2006-2007
• Appeal Filed On: 11-12-2009
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SU RENDRA KUMAR
• Assessee Lawyers: M N VAISHNAV
• Keywords: Opportunity of being heard

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH J : MUMBAI BEFORE SHRI D.K. AGARWAL, (JM) AND SHRI PRAMOD KU MAR,(AM) ITA NO.6401/MUM/2009 ASSESSMENT YEAR : 2006-07 BHANWARLAL G. CHAUDHARY C/O., M.N. VAISHNAV & CO. CHARTERED ACCOUNTANTS 21 ANANT BUILDING 2 ND FLOOR 217 PRINCESS STREET MUMBAI-2. ..( APPELLANT ) P.A. NO. (ADYPC 4271 A) VS. INCOME TAX OFFICER WARD 24(1)3 PRATYAKSHKAR BHAWAN B.K.C. BANDRA (E) MUMBAI-51. ..( RESPONDENT ) APPELLANT BY : SHR I M.N. VAISHNAV RESPONDENT BY : SHRI S URENDRA KUMAR O R D E R PER D.K. AGARWAL (JM). THIS APPEAL PREFERRED BY THE ASSESSEE IS DIRECTED AGAINST T HE ORDER DATED 14.10.2009 PASSED BY THE LD. CIT(A) FOR T HE ASSESSMENT YEAR 2006-07. 2. BRIEFLY STATED FACTS OF THE CASE ARE THAT THE ASSESSEE A N INDIVIDUAL DERIVES INCOME FROM MANUFACTURING AND PACKIN G IMITATION JEWELLERY, FILED RETURN DECLARING TOTAL INCOME OF RS.1 ,11,430/-. DURING THE COURSE OF ASSESSMENT IT WAS INTERALIA OBSERVED BY THE ASSESSING OFFICER THAT ON VERIFICATION OF BOOKS OF ACCOUNT M/S. WIN NER IMMITATION ITA NO.6401/M/09 A.Y:06-07 2 JEWELLERS, OF WHICH THE ASSESSEE IS A PROPRIETOR, THE ASSE SSEE HAS TAKEN A LOAN OF RS.1,88,000/- FROM SHRI DURGARAM CHO UDHARY. ON BEING ASKED THE ASSESSEE FILED LOAN CONFIRMATION AND ALSO PRODUCED THE BANK PASS BOOK OF THE DEPOSITOR. HOWEVER, ACCORDING TO T HE ASSESSING OFFICER THE ASSESSEE FAILED TO EXPLAIN THE VARIOUS DEPOSIT S IN THE BANK ACCOUNT OF MR. CHOUDHURY AND ALSO FAILED TO ESTABLISH GE NUINENESS OF TRANSACTION AND CREDITWORTHINESS, THEREFORE THE ASSESSING O FFICER TREATED THE ENTIRE AMOUNT OF RS.1,88,000/- AS UNEXPLA INED CASH CREDIT U/S.68 OF THE I.T. ACT, 1961 (THE ACT) AND ADDED THE S AME TO THE INCOME OF THE ASSESSEE. BESIDES THIS, THE ASSESSING OFFICER AL SO ADDED THE INTEREST OF THE ABOVE AMOUNT RS.4,459/- AND ACCORDI NGLY COMPLETED THE ASSESSMENT AT AN INCOME OF RS.5,43,650/-, V IDE ORDER DATED 17.5.2008 PASSED U/S.144 OF THE ACT. ON APPEAL, THE LD. CIT(A) WHILE OBSERVING THAT IT WAS NOTICED FROM THE BANK PASS BOOK OF THE CREDITOR THAT THE CREDITOR HAS DEPOSITED SIMILAR AMOUNT OF CASH JUST BEFORE THE ISSUANCE OF CHEQUE AND THE INCOME OF THE CREDI TOR IS ONLY RS.96,187/- AND THAT TOO BELOW THE TABLE LIMIT, THER EFORE, THOUGH, THE APPELLANT HAD PROVED THE IDENTITY OF THE LENDER BUT HAS FAILED TO PROVE THE CAPACITY OF THE LENDER AND GENUINENESS OF THE TRAN SACTION, CONFIRMED THE ADDITION MADE BY THE ASSESSING OFFICER. 3. BEING AGGRIEVED BY THE ORDER OF THE LD. CIT(A) T HE ASSESSEE IS IN APPEAL BEFORE US CHALLENGING IN BOTH THE GROUNDS THE SUSTENANCE OF ADDITION OF RS.1,88,000/- PLUS INTEREST RS.4,459/-. 4. AT THE TIME OF HEARING THE LD. COUNSEL FOR THE A SSESSEE WHILE REITERATING THE SAME SUBMISSIONS AS SUBMITTED BEFORE THE ASSESSING OFFICER AND THE LD. CIT(A) , REFERS TO THE CONFIRMATIO N OF ACCOUNT, COPY OF ACKNOWLEDGEMENT OF THE RETURN, CHART OF INCOME, COP Y OF TRADING AND P&L ACCOUNT, CAPITAL ACCOUNT AND BALANCE SHEET OF THE DEPOSITOR ITA NO.6401/M/09 A.Y:06-07 3 APPEARING AT PAGE 8 TO 11 OF THE ASSESSEE'S PAPER BOOK T O SHOW THAT THE AMOUNT ADVANCED TO THE ASSESSEE IS DULY REFLECTED IN THE BALANCE SHEET OF THE DEPOSITOR. HE ALSO FILED COPY OF ASSESSEES FIN ANCIAL STATEMENTS TO SHOW THE CORRESPONDING ENTRIES IN THE ASSESSEE' S BOOKS OF ACCOUNT APPEARING AT PAGE 12 TO 16 OF ASSESSEE'S PAPER BOOK. HE ALSO FILED COPY OF BANK PASS BOOK OF SHRI DURGARAM CHO UDHARY TO SHOW THE RELEVANT WITHDRAWLS FROM THE BANK ACCOUNT. IN THE LIGHT OF THE ABOVE, HE SUBMITS THAT SINCE THE ASSESSEE HAS DISCHARGED HIS BURDEN AND IT IS NOT THE BUSINESS OF THE ASSESSEE TO FIND OUT THE SOURCE OF SOURCE OF THE LENDER, THEREFORE, THE ADDITION MADE BY THE ASSESSING OFFICER AND SUSTAINED BY THE LD. CIT(A) BE DELETED. T HE RELIANCE WAS ALSO PLACED ON THE FOLLOWING DECISIONS:- 1. SAROGI CREDIT CORPORATION VS. CIT 103 ITR 344(PATN A), 2. ORIENT TRADING CO. LTD., VS. CIT 49 ITR 723 (BOM.), 3. NEMICHAND KOTHARI VS. CIT AND ANOTHER 264 ITR 254(G AU.), 4. CIT VS. ORISSA CORPORATE PVT. LTD. 156 ITR 78(SC), AND 5. CIT VS. DIAMOND PRODUCTS 21 DTR 1 DEL. 5. ON THE OTHER HAND THE LD. DR SUPPORTS THE ORDER OF THE ASSESSING OFFICER AND THE LD. CIT(A) . 6. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE RI VAL PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT THE FACTS ARE NOT IN DISPUTE INASMUCH AS IT IS ALSO NOT IN DISPUTE THAT THE ASSESSEE HAS PROVED THE IDENTITY OF THE DEPOSITOR AND HAS ALSO FILED THE FINANCIAL STATEMENTS OF THE DEPOSITOR AND THE ASSESSEE TO SHOW THAT THE AMOUNT WAS ADVANCED BY THE DEPOSITOR TO THE ASSESSEE O N INTEREST WHICH HAS BEEN CREDITED BY THE ASSESSEE IN HIS BOOKS OF ACCOUN T. ACCORDING TO THE ASSESSEE THE ASSESSEE HAS DISCHARGED HIS ONUS A ND THE ASSESSEE IS NOT REQUIRED TO PROVE THE SOURCE OF SOURCE OF THE ITA NO.6401/M/09 A.Y:06-07 4 DEPOSITS. PER CONTRA, ACCORDING TO THE REVENUE THE ASSESSEE HAS NOT PROVED THE CAPACITY OF THE DEPOSITOR AND GENUINENESS OF THE TRANSACTION INASMUCH AS ON VERIFICATION OF THE PASS BOOK OF THE DEPOSITOR IT WAS FOUND THAT THE DEPOSITOR HAS DEPOSITED SIMILAR AMOUNT OF CASH JUST BEFORE THE ISSUANCE OF CHEQUE. AFTER CONSIDERI NG THE TOTALITY OF THE FACTS AND CIRCUMSTANCES OF THE CASE WE A RE OF THE OPINION THAT THE ASSESSING OFFICER AND THE LD. CIT(A) WHILE CONSIDERING THE BANK PASS BOOK OF THE DEPOSITOR SHOWING THE SIMILAR AMOUNT OF CASH DEPOSIT JUST BEFORE THE ISSUANCE OF CHEQUE HAVE NEITH ER EXAMINED THE DEPOSITOR WHEN THE ASSESSEE HAS FILED CONFIRMATION AND FINANCIAL STATEMENTS ALONG WITH BANK ACCOUNT OF THE DEPOSITOR NOR HAS PROVIDED ANY OPPORTUNITY OF BEING HEARD TO THE ASSESSEE IN THIS R EGARD. IN THIS VIEW OF THE MATTER WE ARE OF THE VIEW THAT IN THE I NTEREST OF JUSTICE THE MATTER SHOULD GO BACK TO THE FILE OF THE ASSESSING OFFICER AND ACCORDINGLY WE SET ASIDE THE ORDERS PASSED BY THE REVENUE AUTHORITIES ON THIS ACCOUNT AND SEND BACK THE MATTER TO THE FILE OF THE ASSESSING OFFICER WHO SHALL EXAMINE THE SAME AFRESH IN THE LIGHT OF OUR OBSERVATIONS HEREINABOVE AND ACCORDING TO LAW INCLUDING THE DECISIONS RELIED ON BY THE LD. COUNSEL FOR THE ASSESSEE AFTER PRO VIDING REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. THE GROUNDS TAKEN BY THE ASSESSEE ARE, THEREFORE, PARTLY ALLOWED FOR STATISTICAL PU RPOSES. 7. IN THE RESULT, THE ASSESSEE'S APPEAL STANDS PARTLY ALLO WED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 23.12.2010. SD/- SD/- (PRAMOD KUMAR) ( D.K. AGARWAL ) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 23.12.2010. JV. ITA NO.6401/M/09 A.Y:06-07 5 COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT(A) CONCERNED, MUMBAI THE DR BENCH TRUE COPY BY ORDER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.