INCOME TAX OFFICER 33(3)(5), MUMBAI V. SHRI VIREN MUNI, MUMBAI

ITA 6503/MUM/2017

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 1772 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-06-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Assessment Year: 2013-2014
• Appeal Filed On: 06-11-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: CHAUDHARY ARUN KUMAR SINGH LD
• Assessee Lawyers: PRAKASH JHUNJUNWALALD
• Keywords: Unexplained cash credit
• Section: 143(3); 133(6); 68

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL F BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY, JM AND SHRI MANOJ KUMAR AGGARWAL, AM ./ I.T.A. NO.6503/MUM/2017 ( / ASSESSMENT YEAR: 2013-14) INCOME T AX OFFICER - 33(3)(5) ROOM NO.601, 6 TH FLOOR BLDG. C-12, PRATYAKSHKAR BHAVAN BANDRA KURLA COMPLEX MUMBAI-400 051. / VS. SHRI VIREN MUNI PROP. M/S. HARSH AUTO PARTS SHOP NO.04, PHOENIX BLDG.B DR. D.D. SATHE MARG PRARTHANA SAMAJ, MUMBAI-400 004. #$ ' ./ ' ./PAN/GIR NO. BIHPM-7666-L ( /APPELLANT ) : ( / RESPONDENT ) ASSESSEE BY : SHRI PRAKASH JHUNJUNWALA-LD.AR DEPARTMENT BY : CHAUDHARY ARUN KUMAR SINGH-LD.DR / DATE OF HEARING : 09/05/2019 / DATE OF PRONOUNCEMENT : 06/06/2019 / O R D E R PER MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER):- 1. AFORESAID APPEAL BY REVENUE FOR ASSESSMENT YEAR [AY] 2013-14 CONTEST THE ORDER OF LD. COMMISSIONER OF INCOME-TAX (APPEALS)-45, MUMBAI [CIT(A)], APPEAL NO. CIT(A)-45/ITO-33(3)(5)/ITA-328/2015-16 D ATED 11/07/2017 ON FOLLOWING GROUNDS OF APPEAL: - ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE ID.CIT(A) ERRED TO ACCEPT THE FACTS THAT ASSESSEE FAILED TO ESTABLISH THE CREDIT WORTHINESS OF TWO LENDERS OF UNSECURED LOAN 2 NAMELY SHRI MANISH RAJNIKANT MODI(PROPRIETOR OF SUP REME ENTERPRISES) AND SHRI AJIT CHURI(PROPRIETOR OF BHAVIKA ENTERPRISES) AS FROM TH E LATEST RETURN FILED BY THESE LENDERS OF UNSECURED LOAN, IT IS CLEAR THAT LENDERS DO NOT HAV E CAPACITY TO LEND SUCH A HUGE AMOUNT TO THE ASSESSEE. 2.1 FACTS IN BRIEF ARE THAT ASSESSEE BEING RESIDENT INDIVIDUAL STATED TO BE DEALING IN AUTO PARTS WAS ASSESSED FOR IMPUGNED AY U/S. 143(3) ON 09/03/2016 WHEREIN THE INCOME OF THE ASSESSEE WAS D ETERMINED AT RS.84.32 LACS AFTER SOLE ADDITION OF UNEXPLAINED CA SH CREDIT U/S. 68 FOR RS.74.90 LACS AS AGAINST RETURNED INCOME OF RS.9.42 LACS E-FILED BY THE ASSESSEE ON 26/09/2013. THE SUBJECT MATTER OF PRESE NT APPEAL IS ADDITION OF UNSECURED LOANS U/S 68 AGGREGATING TO RS.69.90 L ACS STATED TO BE RECEIVED BY THE ASSESSEE FROM THE FOLLOWING PARTIES : - NO. NAME OF THE LENDER AMOUNT (RS.) 1. MANISH RAJNIKANT MODI (PROP. OF SUPREME ENTERPRI SES 36.90 LACS 2. AJIT CHURI (PROP. OF BHAVIKA ENTERPRISES) 33.00 LACS TOTAL 69.90 LACS 2.2 THE IMPUGNED ADDITIONS WERE MADE SINCE THE ASSE SSEE COULD NOT PRODUCE RETURN OF INCOME, BALANCE SHEET, BANK STATE MENT OF THE TWO LENDERS WHICH LED THE LD. AO TO FORM AN OPINION THAT THE AS SESSEE COULD NOT ESTABLISH MODE OF TRANSACTION, GENUINENESS OF TRANS ACTION AS WELL AS CREDITWORTHINESS OF THE LENDERS. NOTICES SENT U/S 1 33(6) WERE NOT RESPONDED TO. THE DEPARTMENTAL RECORD REVEAL THAT THE 2 LENDE RS REFLECTED MEAGER INCOME BELOW RS.1.60 LACS IN AY 2012-13. THE ASSESS EE COULD NOT PRODUCE ANY OF THE LENDER TO CONFIRM THE TRANSACTIO NS WHICH LED THE LD. AO TO TREAT THE LOANS AS UNEXPLAINED CASH CREDIT U/S 6 8 AND ACCORDINGLY, THE SAME WERE ADDED TO THE INCOME OF THE ASSESSEE. 3 3. BEFORE LD. FIRST APPELLATE AUTHORITY, THE ASSESS EE CONFRONTED THE OBSERVATION OF LD. AO THAT NOTICES U/S 133(6) WERE NOT RESPONDED TO BY SUBMITTING THAT THE TWO LENDERS HAD, IN FACT, SUBMI TTED LEDGER CONFIRMATIONS, BANK STATEMENTS, INCOME TAX RETURN ACKNOWLEDGEMENT & PAN COPY ETC. UPON PERUSAL, LD. FIRST APPELLATE AUTHORITY, CONVIN CED WITH ASSESSEES SUBMISSIONS, DELETED THE ADDITIONS BY OBSERVING AS UNDER: - 5.3. I HAVE GONE THROUGH THE ASSESSMENT ORDER AND S UBMISSIONS MADE IN THIS REGARD. IT IS NOTED THAT THE AO HAS DISALLOWED AN AMOUNT OF RS .74,90,000/- TOWARDS UNSECURED LOANS MADE BY THE ASSESSEE. THE AR IF THE ASSESSEE HAS OPPOSED THE ADDITION AND SUBMITTED THAT THE UNSECURED LOANS OBTAINED WERE GE NUINE AND NOT MERELY ACCOMMODATION ENTRY. IT IS SEEN THAT THE ASSESSEE HAS SUBMITTED ALL THE DOCUMENTS TO PROVE THE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF MR. MANISH RAJN IKANTH MODI AND MR. AJIT CHURI THEREBY DISCHARGING THE ONUS ON HIM U/S. 68 OF THE I.T. ACT. I HAVE FURTHER NOTICED THAT COMPLIANCE TO THE NOTICES ISSUED U/S.133(6) BY THE AO HAS BEEN DONE BY THE ABOVE- MENTIONED LENDERS. HOWEVER, THE ASSESSEE HAS FAILED TO PRODUCE DOCUMENTARY EVIDENCE TO ESTABLISH THE IDENTITY, CREDITWORTHINES S AND GENUINENESS OF THE LOAN OBTAINED FROM HARSHIT MEHTA AMOUNTING TO RS.5,00,00 0/-. HAVING REGARDS TO THE FACTS OF THE CASE AND SUBMISSIONS MADE, IT IS SEEN THAT THE ADDITION MADE BY ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED CASH CREDIT IN CASE OF MR . MANISH RAJNIKANTH MODI AND MR. AJIT CHURI IS NOT JUSTIFIABLE AND HENCE ADDITION OF RS.69,90,000/- IS BEING DELETED. HOWEVER, THE ADDITION MADE BY AO IN CASE OF HARSHIT M. PATEL IS FAIR. THE ADDITION ON THIS ISSUE IS, THEREFORE, RESTRICTED TO RS.5,00,000 /-. ACCORDINGLY, THIS GROUND OF APPEAL IS PARTLY ALLOWED. AGGRIEVED THE REVENUE IS IN FURTHER APPEAL BEFORE U S. THE LD. DR SUPPORTED THE STAND TAKEN BY LD.AO WHEREAS LD. AR HAS RELIED UPON THE STAND OF FIRST APPELLATE AUTHORITY IN THE IMPUGNED ORDER. 4. UPON CAREFUL DELIBERATIONS AND PERUSAL OF PAPER-BOOK , THE UNDISPUTED POSITION THAT EMERGES IS THE FACT THAT THE TWO LEND ERS, THROUGH THEIR AUTHORIZED REPRESENTATIVE, VIDE LETTER DATED 22/02/ 2016, HAD SUBMITTED COPY OF LEDGER CONFIRMATION, BANK STATEMENT HIGHLIGHTING THE DETAILS OF THE TRANSACTIONS, INCOME TAX RETURN ACKNOWLEDGEMENT FOR AY 2012-13 AND THE DETAILS OF INCOME TAX JURISDICTION WHICH WOULD NEGA TE THE FINDING THAT 4 NOTICES U/S 133(6) WERE NOT RESPONDED TO. THE FACT OF FURNISHING THESE DOCUMENTS WAS ALSO BROUGHT TO THE NOTICE OF LD.AO B Y AUTHORISED REPRESENTATIVE OF THE ASSESSEE VIDE LETTER DATED 22 /02/2016. THE INCOME TAX ACKNOWLEDGEMENT FOR AY 2013-14 WAS ALREADY PLAC ED ON RECORD BY THE ASSESSEE VIDE REPLY DATED 09/01/2016. NOTHING ON RE CORD ESTABLISHES THAT ANY CASH GOT EXCHANGED BETWEEN THE ASSESSEE OR THE AFORESAID LOANS WERE UNACCOUNTED MONEY OF THE ASSESSEE. THE LOANS WERE R OUTED THROUGH NORMAL BANKING CHANNELS. THEREFORE, THE ASSESSEE, I N OUR CONSIDERED OPINION, HAD FULFILLED THE PRIMARY ONUS OF ESTABLIS HING THE IDENTITY, CREDITWORTHINESS OF THE LENDERS & GENUINENESS OF TH E TRANSACTIONS AND THEREFORE, THE ADDITIONS WERE RIGHTLY DELETED BY LD . FIRST APPELLATE AUTHORITY. WE HOLD SO. 5. RESULTANTLY, THE APPEAL STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 06 TH JUNE, 2019. SD/- SD/- (SAKTIJIT DEY) (MANOJ KUMAR AGGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 06/06/2019 SR.PS:-JAISY VARGHESE ! '! / COPY OF THE ORDER FORWARDED TO : 1. !$( / THE APPELLANT 2. )*$( / THE RESPONDENT 5 3. ( ! ) / THE CIT(A) 4. / CIT CONCERNED 5. +,)- , !- , / DR, ITAT, MUMBAI 6. ,/0 / GUARD FILE / BY ORDER, / (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI.