SUBODH R. NEMLEKAR, MUMBAI V. ITO WD 9(3)(2), MUMBAI

ITA 6453/MUM/2013

• Counselvise Citation: [2016] 121 COUNSELVISE.COM (IT) 3595 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 8 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-07-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 05-04-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 01-11-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: A K NAYAK ITA NO M A Y
• Keywords: Unexplained cash credit
• Section: 234B; 68

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUMBAI . . , , ! '#, $ , % BEFORE SHRI B.R.BASKARAN, AM AND SHRI AMARJIT SINGH , JM / I.T.A. NO.6260/M/13 ( $ & '& / ASSESSMENT YEAR: 2010-11) THE INCOME TAX OFFICER WARD 9(3)(2) ROOM NO.227, AAYAKAR BHAVAN, M.K.MARG, MUMBAI - 400020 / VS. SHRI SUBODH R. NEMLEKAR 1206, OBEROI WOOD, TOWER C, MOHAN GOKHALE ROAD, OFF. W.E.HIGHWAY, GOREGOAN(E), MUMBAI-400063 / I.T.A. NO.6453/M/13 ( $ & '& / ASSESSMENT YEAR: 2010-11) SHRI SUBODH R. NEMLEKAR 1206, OBEROI WOOD, TOWER C, MOHAN GOKHALE ROAD, OFF. W.E.HIGHWAY, GOREGOAN(E), MUMBAI-400063 / VS. THE INCOME TAX OFFICER WARD 9(3)(2) ROOM NO.227, AAYAKAR BHAVAN, M.K.MARG, MUMBAI - 400020 ./ ./ PAN/GIR NO. : AAAPN6889N ( / APPELLANT ) .. ( / RESPONDENT ) / DATE OF HEARING: 05.04.2016 !' /DATE OF PRONOUNCEMENT: 05.07.2016 ASSESSEE BY: NONE DEPARTMENT BY: SHRI A. K. NAYAK ITA NO.6260&6453/M/13 A.Y. 2010-11 2 #$ / O R D E R PER AMARJIT SINGH, JM: THIS ORDER SHALL DISPOSED OF THE ABOVE MENTIONED AP PEALS FILED BY THE ASSESSEE AS WELL AS BY THE REVENUE AGAINST T HE ORDER DATED 21.08.2013 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS) 20, MUMBAI [HEREINAFTER REFERRED TO AS THE CIT(A)] R ELEVANT TO THE A.Y.2010-11. THESE APPEALS ARE BEING TAKEN UP TOGET HER AS THE ORDER IS THE SAME AND THE PARTIES ARE ALSO THE SAME WHICH CAN CONVENIENTLY ADJUDICATED BY A SINGLE ORDER. 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL:- 1. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE C ASE AND IN LAW, THE LD. CIT(A) WAS RIGHT IN DELETING TH E ADDITION OF RS.15,00,000/- MADE BY THE ASSESSING OFFICER U/S.68 OF THE INCOME TAX ACT. 2. WHETHER ON FACTS AND CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LD. CIT(A) WAS JUSTIFIED IN HOLDING THA T THE ASSESSEE HAS PROVED THE CREDIT-WORTHINESS OF SUBODH R. NEMLEKAR HUF, WITHOUT APPRECIATING THAT SUBODH NEMLEKAR HUF DOES NOT HAVE ENOUGH SOURCE TO ADVANCE RS.15,00,000/- TO THE ASSESSEE? 3. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL:- 1. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) [HEREINAFTER REFERRED TO AS CIT (A)] ERRED IN CONFIRMING THE FOLLOWING ADDITIONS AND DISALLOWANCE S MADE BY THE LD. ASSESSING OFFICER WITHOUT APPRECIATING THE FACTS AND CIRCUMSTANCES OF THE CAS E: SR. NO. PARTICULARS AMOUNT (RS.) ITA NO.6260&6453/M/13 A.Y. 2010-11 3 A ADDITION UNDER SECTION 68 ON ACCOUNT OF UNSECURED LOAN TAKEN TREATED AS UNEXPLAINED CASH CREDIT 5,00,000/- A. ADDITION UNDER SECTION 68 ON ACCOUNT OF UNSECURED LOAN TAKEN TREATED AS UNEXPLAINED CASH CREDIT RS.5,00,000/- 2. THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION MADE BY THE LD. ASSESSING OFFICER ON ACCOUNT OF UNSECURED L OAN TAKEN TREATED AS UNEXPLAINED CASH CREDIT AMOUNTING TO RS.5,00,000/- WITHOUT APPRECIATING THE FACT AND CIRCUMSTANCES OF THE CASE. THE ADDITION OF RS.5,00 ,000/- INVOKING THE PROVISIONS OF SECTION 68 IS NOT AT ALL JUSTIFIED AND THE SAME MAY BE DELETED. C. INTEREST UNDER SECTION 234B & 234C NOT LEVIABLE: 3. THE APPELLANT DENIES ANY LIABILITY TO PAY INTERE ST U/S.234B AND 234C. HENCE THE SAME IS NOT LEVIABLE. 4. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E FILED HIS RETURN OF INCOME ON 29.03.2011 DECLARING TOTAL INCOME TO T HE TUNE OF RS.18,00,640/-. THE CASE WAS SELECTED FOR SCRUTINY , THEREFORE, NOTICE U/S. 143(2) OF THE INCOME TAX ACT, 1961 ( IN SHOR T THE ACT) DATED 26.08.2011 WAS ISSUED AND SERVED UPON THE ASSESSEE. THEREAFTER, A NOTICE U/S.142(1) OF THE ACT WAS ISSUED AND SERVED UPON THE ASSESSEE. THE ASSESSEE HAS TAKEN THE UNSECURED LOAN TO THE TU NE OF RS.20,00,000/- FROM DIFFERENT PARTIES. THE GENUINE NESS AND CREDITWORTHINESS OF THE SAID LOAN WAS NOT PROVED, T HEREFORE, THE LOAN TO THE TUNE OF RS.20,00,000/- WERE ADDED TO THE INCOME OF THE ASSESSEE ITA NO.6260&6453/M/13 A.Y. 2010-11 4 U/S.68 OF THE ACT. THE ASSESSEE FILED AN APPEAL BE FORE THE CIT(A) AND THE CIT(A) DELETED THE ADDITION TO THE TUNE OF RS.1 5,00,000/-, THEREFORE, THE REVENUE HAS FILED THE PRESENT APPEAL BEFORE US. 5. HOWEVER, IN CROSS APPEAL THE ASSESSEE FILED AN A PPEAL WITH REGARD TO THE DELETION OF RS.5,00,000/- WHICH HAS B EEN ADDED BY THE ASSESSING OFFICER U/S.68 OF THE ACT AND CONFIRMED B Y THE CIT(A) 6. THE FOUNDATION OF THE ASSESSING OFFICER IN CONNE CTION WITH THE ADDITION OF RS.20,00,000/- IS THAT THE ASSESSING OF FICER VERIFIED THE BANK STATEMENT OF SHRI ARVIND GANDHI WHOSE ACCOUNT WAS CREDITED WITH AN AMOUNT OF RS.2,00,000/- BY CHEQUE ON 10.06. 2009 AND SHRI ARVIND GANDHI ISSUED THE CHEQUE OF RS.2,00,000/- IN FAVOUR OF ASSESSEE ON 12.06.2009. ACCORDINGLY, AN AMOUNT OF RS.1,00,000/- WAS DEPOSITED IN THE ACCOUNT OF SHRI DILIP GANDHI O N 11.06.2009 AND SHRI DILIP GANDHI ISSUED THE CHEQUE OF RS.1,00,000/ - IN FAVOUR OF THE ASSESSEE ON 12.06.2009. IN THE BANK STATEMENT OF S HRI HIREN GANDHI, IT CAME INTO NOTICE THAT AN AMOUNT OF RS.2,00,000/- WAS DEPOSITED IN CASH ON 10.06.2009 WHO ISSUED THE CHEQUE OF RS.2,00 ,000/- ON 12.06.2009 IN FAVOUR OF THE ASSESSEE. IN THE BANK STATEMENT OF H.U.F, IT IS SEEN THAT CHEQUE OF RS.15,00,000/- DEPOSITED ON 30.11.2009 AND TRANSFERED TO THE ASSESSEES BANK ACCOUNT ON THE SA ME DAY. HOWEVER, THE OPPORTUNITY WAS GIVEN TO THE ASSESSEE BUT FINDI NG NO JUSTIFIABLE EXPLANATION THE ASSESSING OFFICER DID NOT FIND THE SAID CREDITORS AS GENUINE AND CREDITWORTHINESS, THEREFORE, AN AMOUNT OF RS.20,00,000/- ITA NO.6260&6453/M/13 A.Y. 2010-11 5 WAS ADDED TO THE INCOME OF THE ASSESSEE. THEREAFTER THE ASSESSEE CHALLENGED THE ORDER OF ASSESSING OFFICER AND BEFOR E THE CIT(A) AND THE CIT(A) DELETED THE ADDITION TO THE TUNE OF RS.1 5,00,000/- MADE U/S.68 OF THE ACT. THE FINDING OF THE CIT(A) IS NE CESSARY TO ADVERT ON RECORD BEFORE PROCEEDING FURTHER :- 3.6 I HAVE CONSIDERED THE FINDING OF THE ASSESSING OFFICER AND RIVAL SUBMISSION OF THE APPELLANT AND EVIDENCES ON RECORD, CAREFULLY. I FIND THAT LD. ASSESSING OFFICER HAS W RONGLY MADE ADDITION OF RS.15,00,000/- APPEARING IN THE NAME OF SUBODH NEMLEKAR, HUF. IT IS WRONG ON THE PART OF THE ASSE SSING OFFICER TO MENTION IN PARA 6.1 THAT HUF FAILED TO F URNISH VARIOUS INFORMATION WHEREAS FACT IS ALTOGETHER DIFF ERENT. APPELLANT HAS FURNISHED THE COPY OF RETURN OF INCOM E, BALANCE SHEET AND BANK STATEMENT FOR AYRS 2003-04 AND 2004- 05. FURTHER, IT IS SEEN THAT LD. ASSESSING OFFICER HAS NOT PROPERLY APPRECIATED THE FACTS OF THE CASE AS HUF HAS GIVEN LOAN TO ONE SHRI BHUSHAN NEMLEKAR IN A.Y.2003-04 AND 2004-05 OF RS.15,00,000/- WHICH WERE REFLECTED IN BALANCE SHEE T. THE BANK STATEMENT REVEALS THE ENTRY ON VARIOUS DATES. MR. BHUSHAN NEMLEKAR HAS REPAID RS.15,00,000/- TO THE HUF ON 13 .11.2009 AND THE SAME AMOUNT HAS BEEN TRANSFERRED BY ACCOUNT PAYEE CHEQUE FROM THE HUF A/C. TO SHRI SUBODH NEMLEKAR ON THE SAME DAY. HENCE, THE SOURCE OF CREDIT IS THE LOAN WHICH WERE ITA NO.6260&6453/M/13 A.Y. 2010-11 6 GIVEN BY THE HUF TO ONE MR.BHUSHAN NEMLEKAR. IMMED IATELY AFTER RECEIPT OF THE SAME AMOUNT IT HAS BEEN ADVANC ED TO THE APPELLANT, HENCE IT CANNOT BE PRESUMED THAT CREDITW ORTHINESS IS NOT PROVED. IF ANY DOUBT WAS THERE REGARDING SOURC E OF RS.15,00,000/- SHOWN IN THE NAME OF BHUSHAN NEMLEKA R, IT WAS THE RESPONSIBILITY OF THE ASSESSING OFFICER TO GO F URTHER DEEP AND SEE WHETHER LOAN WAS ACTUALLY ADVANCED BY THE H UF EARLIER OR NOT. ASSESSING OFFICER HAS NOTICED THIS FACT IN SUB-PARA E OF PARA 6.1 BUT HAS MERELY DISCARDED THE EXPLANATION O F THE APPELLANT ON THE GROUND THAT HUF IS NOT HAVING TAXA BLE INCOME. APPARENTLY THE FINDING OF THE ASSESSING OFFICER IS UNSUSTAINABLE BECAUSE SUCH RS.15,00,000/- IS NOT INCOME OF SUBSEQ UENT PERIOD BUT OUT OF OLD FUND AVAILABLE WITH THE HUF. THEREF ORE, I FIND NO SUBSTANCE IN THE FINDING OF THE ASSESSING OFFICE R. ASSESSING OFFICER IS THEREFORE DIRECTED TO DELETE RS.15,00,00 0/- U/S.68 AS THIS CREDIT IS FOUND TO BE EXPLAINED ONE. 6.1 HOWEVER, WITH REGARD TO THE ADDITION OF RS.5,00 ,000/- IN VIEW OF THE SECTION 68 OF THE ACT THE CIT(A) HAS GIVEN T HE FOLLOWING FINDINGS:- 3.7 AS REGARDS, CREDIT IN THE NAME OF SHRI ARVIND GANDHI, THE FINDING OF THE ASSESSING OFFICER IS FOUND CORRECT B ECAUSE OF THE FACT THAT HE NEVER MET THE APPELLANT NOT DID HE KNO W HIM. IF A PERSON DID NOT KNOW TO ANYBODY, HOW CAN HE GIVEN LO AN TO SUCH ITA NO.6260&6453/M/13 A.Y. 2010-11 7 PERSON. IT IS SEEN FROM THE BANK ACCOUNT OF ABHUDO YA COOPERATIVE BANK LTD. THAT ON 10.06.2009, ARVIND GA NDHI HAS DEPOSITED RS.2,00,000/- AND THEREAFTER ON 12.06.200 9 HAS GIVEN RS.2,00,000/- TO THE APPELLANT WITHOUT EXPLAINING A CTUAL SOURCE OF INCOME. ASSESSING OFFICER HAS RIGHTLY POINTED O UT THAT SOURCE OF INCOME IS VERY NEGLIGIBLE, HENCE ARVIND G ANDHI COULD NOT LENT SUCH MONEY TO THE APPELLANT. IT APPEARS T HAT CASH HAS BEEN GIVEN AND CHEQUE HAS BEEN OBTAINED IN THE NAME OF ARVIND GANDHI, HENCE THE FINDING OF THE ASSESSING OFFICER IS WORTH SUSTAINABLE. SIMILARLY, LOAN SHOWN IN THE NAME OF DILIP GANDHI IS ALSO NOT BELIEVABLE BECAUSE AS PER HIS STATEMENT HE WAS NOT FULLY KNOWING APPELLANT AND HE MET ONLY IN THE OFFI CE OF HIS INCOME TAX PRACTITIONER BHARAT PATELIA AND HE COUL D NOT RECOGNIZE HIS FACE. HE HAS ISSUED CHEQUE ON THE DI RECTION OF BHARAT PATELIA WHICH MEANS THIS IS AN ARRANGE ENTRY AND DEFINITELY CASH MIGHT HAVE BEEN GIVEN AND CHEQUE MI GHT HAVE BEEN OBTAINED. IT CAN BE SEEN FROM BANK ACCOUNT IN DENA BANK THAT ON 11.06.2009 CASH OF RS.1,00,000/- HAS BEEN D EPOSITED AND NEXT DAY ON 12.06.2009 CHEQUE OF RS.1,00,000/- HAS BEEN GIVEN TO THE APPELLANT WHICH CORROBORATE THE FINDIN G OF THE ASSESSING OFFICER THAT CASH HAS BEEN OBTAINED BY TH E CREDITORS AND CHEQUE HAS BEEN ISSUED. SIMILAR IS THE FACT IN RESPECT OF HIREN GANDHI. IT CAN BE SEEN FROM BANK ACCOUNT NO. 200542136 OF BANK OF MAHARASHTRA THAT AN AMOUNT OF RS.2,00,00 0/- HAS ITA NO.6260&6453/M/13 A.Y. 2010-11 8 BEEN DEPOSITED ON 10.06.2009 BY CASH AND THEREAFTER A CHEQUE HAS BEEN ISSUED ON 12.06.2009 TO THE APPELLANT. TH E BANK ACCOUNT REVEALS THE FACT THAT WHEN BANK ACCOUNT WAS REOPENED HIREN GANDHI WAS MINOR AND ACCOUNT WAS OPENED IN JO INT NAME WITH C. D. GANDHI. OBVIOUSLY, THE FINDING OF THE A SSESSING OFFICER IS WORTH APPROVAL THAT AFTER GIVING CASH, S UCH CHEQUES HAS BEEN OBTAINED BY THE APPELLANT. FURTHER, THE F INDING OF THE ASSESSING OFFICER GET SUPPORTS FROM THE FACT THAT N ONE OF THESE THREE CREDITORS HAS CHARGED ANY INTEREST ON SUCH LO AN AND FURTHER THEY DO NOT HAVING ANY ACQUAINTANCE. ALL THESE THR EE CREDITORS HAVE STATED THAT THEY DO NOT KNOW APPELLANT OR NEML EKAR FAMILY, HENCE IT IS VERY APPARENT FROM THE RECORD T HAT APPELLANT HAS ARRANGED A LOAN BY GIVING CASH TO SUCH PARTIES. THEREFORE, FINDING OF THE ASSESSING OFFICER IN RESPECT OF LOAN APPEARING IN THE NAME OF ARVIND GANDHI, DILIP GANDHI AND HIREN G ANDHI IS SUSTAINED AND THUS AN AMOUNT OF RS.5,00,000/- IS CO NFIRMED AND ADDITION IN RESPECT OF LOAN APPEARING IN THE NAME O F HUF OF RS.15,00,000/- IS FOUND TO BE FROM KNOWN SOURCE, HE NCE DELETED. 7. ON APPRAISAL OF THE ABOVE MENTIONED FINDINGS WE ARE OF THE VIEW THAT THE CIT(A) HAS RIGHTLY DELETED THE ADDITI ON OF RS.15,00,000/- ON THE BASIS OF THIS FACT THAT THE H UF HAS GIVEN LOAN TO ONE SHRI BHUSHAN NEMLEKAR IN A.Y.2003-04 AND 2004-0 5 OF ITA NO.6260&6453/M/13 A.Y. 2010-11 9 RS.15,00,000/- WHICH WERE REFLECTED IN BALANCE SHEE T. THE BANK STATEMENT ALSO SPEAKS ABOUT THE ENTRY ON VARIOUS DA TES. MR. BHUSHAN NEMLEKAR HAS REPAID RS.15,00,000/- TO THE HUF ON 13 .11.2009 AND THE SAME AMOUNT HAS BEEN TRANSFERRED BY ACCOUNT PAY EE CHEQUE FROM THE HUF A/C. TO SHRI SUBODH NEMLEKAR ON THE SAME DA Y. THEREFORE, THE SOURCE OF CREDIT IS THE LOAN WHICH WERE GIVEN B Y THE HUF TO ONE MR.BHUSHAN NEMLEKAR. IMMEDIATELY AFTER RECEIPT OF THE SAME AMOUNT, THE AMOUNT WAS TRANSFERRED IN THE ACCOUNTS OF THE ASSESSEE. THE CREDITWORTHINESS AND GENUINENESS OF THE LOAN HA S DULY BEEN PROVED ON RECORD. THEREFORE, IN THE SAID CIRCUMSTA NCES THE CIT(A) HAS RIGHTLY DELETED THE ADDITION OF RS.15,00,000/- U/S.68 OF THE ACT. SO FAR AS THE QUESTION OF DELETION OF REMAINING AMO UNT I.E. RS.5,00,000/- ADDED U/S.68 OF THE ACT IS CONCERNED. THERE IS NO EXPLANATION ON BEHALF OF THE ASSESSEE. THE FACT R EMAINS THE SAME AS STATED BY THE ASSESSING OFFICER IN HIS ORDER. EVEN BEFORE THE CIT(A) THERE IS NO PROPER EXPLANATION IN CONNECTION WITH T HE RECEIPT OF THE LOAN TO THE TUNE OF RS.5,00,000/- FROM DIFFERENT CR EDITORS. NO DISTINGUISHABLE MATERIALS HAVE BEEN PUT BEFORE US W HICH MAY AFFECT THE FINDING OF THE CIT(A) ON RECORD. THE BANK STAT EMENT OF SHRI ARVIND GANDHI SPEAKS THAT AN AMOUNT OF RS.2,00,000/ - WAS CREDITED IN THE BANK ACCOUNT OF SHRI ARVIND GANDHI BY CHEQUE ON 10.06.2009 AND SHRI ARVIND GANDHI ISSUED THE CHEQUE OF RS.2,00,000 /- IN FAVOUR OF ASSESSEE ON 12.06.2009. THE BANK STATEMENT OF SHRI DILIP GANDHI SPEAKS ABOUT DEPOSIT OF RS.1,00,000/- ON 11.06.2009 AND SHRI DILIP ITA NO.6260&6453/M/13 A.Y. 2010-11 10 GANDHI ISSUED THE CHEQUE OF RS.1,00,000/- IN FAVOUR OF THE ASSESSEE ON 12.06.2009. THE BANK STATEMENT OF SHRI HIREN GAND HI ALSO SPEAKS ABOUT DEPOSIT OF AN AMOUNT OF RS.2,00,000/- IN CAS H ON 10.06.2009 WHO ISSUED THE CHEQUE OF RS.2,00,000/- ON 12.06.200 9 IN FAVOUR OF THE ASSESSEE. THERE IS NO CHANGE OF CIRCUMSTANCES. THERE IS NO PROPER EXPLANATION IN THIS REGARD AS TO WHY THE CASH WAS D EPOSITED IN THE ACCOUNT OF PAYEE JUST ONE OR TWO DAYS BEFORE THE TR ANSACTION. CONSIDERING EACH AND EVERY FACTS ON RECORD WE ARE O F THE VIEW THAT THE CIT(A) HAS PASSED THE ORDER IN QUESTION JUDICIOUSLY AND CORRECTLY WHICH DOES NOT REQUIRED TO BE INTERFERE WITH AT THI S APPELLATE STAGE. 8. IN THE RESULT, BOTH THE APPEALS FILED BY THE REVENUE AS WELL AS ASSESSEE ARE HEREBY DISMISSED . ORDER PRONOUNCED IN THE OPEN COURT ON 5 TH JULY , 2016. SD/- SD/- (B.R.BASKARAN) (AMARJIT SIN GH) # / ACCOUNTANT MEMBER %& # /JUDICIAL MEMBER ' ( MUMBAI; )# DATED : 5 TH JULY, 2016 MP MP MP MP ITA NO.6260&6453/M/13 A.Y. 2010-11 11 ) * +$!', -,'! / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. * ( ) / THE CIT(A)- 4. * / CIT 5. -./ &&01 , 01' , ' ( / DR, ITAT, MUMBAI 6. /34 5 / GUARD FILE. ) / BY ORDER, - & //TRUE COPY// ./# /(DY./ASSTT. REGISTRAR) , ' ( / ITAT, MUMBAI