DHIRAJ LAKHASHI SHAH HUF, MUMBAI V. ITO WD 17(1)(1), MUMBAI

ITA 651/MUM/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 84393 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 10 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-12-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 24-11-2014
• Assessment Year: 2007-2008
• Appeal Filed On: 24-01-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: LOVE KUMAR
• Keywords: Transactions in derivatives; Assessment record
• Section: 68

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL D BE NCH, MUMBAI , !' #$% , !& ! ' BEFORE SHRI VIJAY PAL RAO, JUDICIAL MEMBER AND SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER ./I .T.A. NO. 651/MUM/2013 ( ( ( ( ( / ASSESSMENT YEAR : 2007-08 SHRI DHIRAJ LAKHAMSHI SHAH HUF, 807, IMPERIAL MAHAL, DR. B.A. ROAD, KHODADAD CIRCLE, DADAR TT MUMBAI-400 014 / VS. THE ITO, WARD 17(1)(1), 1 ST FLOOR, PIRAMAL CHAMBER, LALBAUG, PAREL, MUMBAI-400 012 ) !& ./ * ./ PAN/GIR NO. : AACHD 4577M ( )+ / APPELLANT ) .. ( ,-)+ / RESPONDENT ) )+ . ! / APPELLANT BY: SHRI NISHIT GANDHI ,-)+ / . ! / RESPONDENT BY: SHRI LOVE KUMAR / 0& / DATE OF HEARING :02.12.2014 12( / 0& / DATE OF PRONOUNCEMENT : 5 .12.2014 !3 / O R D E R PER N.K. BILLAIYA, AM: THIS IS AN APPEAL BY THE ASSESSEE DIRECTED AGAINS T THE ORDER OF THE LD. CIT(A)-17, MUMBAI DT.29.11.2012 PERTAINING TO A .Y.2007-08. 2. THE SOLE GRIEVANCE OF THE ASSESSEE IS THAT THE L D. CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS. 5,89,150/- MADE U/S. 68 OF THE ACT. ITA NO. 651/M/2013 2 3. THE ASSESSEE DERIVES INCOME FROM INTEREST, RENT AND F&O TRADING. THE RETURN WAS SELECTED FOR SCRUTINY ASSESSMENT. D URING THE COURSE OF THE ASSESSMENT PROCEEDINGS, THE ASSESSEE WAS ASKED TO F ILE CONFIRMATION IN RESPECT OF THE UNSECURED LOANS TO THE TUNE OF RS. 4 .06 CRORES. ON RECEIVING NO CONFIRMATION FROM THE FOLLOWING PARTIE S, THE AO MADE THE ADDITION U/S. 68 OF THE ACT AMOUNTING TO RS. 5,89,1 50/-. 1. ALKA D SONS 16,000 2. DAMJI DEDHIA 12,600 3. DINESH D. GOGRI 13,000 4. JAYANT M. DEDHIA 14,400 5. MONIKA M. DEDHIA 12,350 6. MUKESH P. SHAH 18,000 7. NAINA C. DEDHIA 1,70,000 8. PRATIK LALJI 12,500 9. PRAVIN P. GOSAR 17,500 10. RAMESH D. GALA 16,000 11. RAMJID. RAMBHIA 19,000 12. RASIK V. SAVLA 13,000 13. RATNABEN DHANJI VISARIA 2,00,000 14. SAKARBEN C. CHHEDA 16,000 15. SHEETAL D. MARU 14,000 16. SUSHILA VORA 12,500 17. VINAY D. CHHEDA 12,300 TOTAL 5,89,150 4. AGGRIEVED BY THIS, THE ASSESSEE CARRIED THE MATT ER BEFORE THE LD. CIT(A). IT WAS STRONGLY CONTENDED BEFORE THE LD. C IT(A) THAT THE ASSESSEE WAS ASKED TO FURNISH LOAN CONFIRMATORY LET TERS WITH SUPPORTING ITA NO. 651/M/2013 3 BANK ACCOUNT OF LENDERS IN CASE OF NEW LOAN EXCEEDS RS. 20,000/- AND THE ASSESSEE WAS NEVER REQUIRED TO SUBMIT LOAN CONFIRMA TORY LETTERS IN RESPECT OF OLD LOANS AND LOANS BELOW RS. 20,000/-. 4.1. THE REQUIRED DETAILS WERE FILED BEFORE THE AO. IT WAS EXPLAINED THAT THE AO HAS MADE THE ADDITIONS IN RESPECT OF LO AN AMOUNT BELOW RS. 20,000/-. IT WAS BROUGHT TO THE NOTICE OF THE LD. CIT(A) THAT THE ASSESSEE HAD FILED THE CONFIRMATORY LETTERS IN RESPECT OF EV EN THESE LOANS ON 29.12.2009 AND 30.12.2009. THE LD. CIT(A) CALLED F OR A REMAND REPORT WHICH WAS SUBMITTED BY THE AO DT. 14.9.2012. IN HI S REMAND REPORT, THE AO THOUGH AGREED THAT THE DOCUMENTS ARE VERY MUCH O N THE ASSESSMENT RECORDS AS PER THE SUBMISSIONS MADE TILL 30.12.2009 BUT THE AO MENTIONED THAT THE ASSESSMENT ORDER WAS PASSED ON 2 3.12.2009. 4.2. AFTER CONSIDERING THE FACTS AND THE SUBMISSION S ALTHOUGH THE LD. CIT(A) ACCEPTED THAT THE LOANS TAKEN FROM NAINA C. DEDHIA AND RATNABEN DHANJI VISARIA ARE OLD LOANS TAKEN IN FINANCIAL YEA R 2002-03 AND 2006-07 RESPECTIVELY BUT SINCE THE EARLIER ASSESSMENTS WERE NOT TAKEN UP FOR SCRUTINY, THE LD. CIT(A) CONFIRMED THE ADDITIONS MA DE BY THE AO IN RESPECT OF ALL THE 15 PARTIES. 5. AGGRIEVED BY THIS, THE ASSESSEE IS BEFORE US. 6. THE LD. COUNSEL FOR THE ASSESSEE STATED THAT IT IS INCORRECT TO SAY THAT THE CONFIRMATION LETTER WAS NOT FILED. THE LD . COUNSEL POINTED OUT THAT THE SUBMISSIONS MADE BY THE ASSESSEE ON 30.12. 2009 HAVE BEEN CONSIDERED BY THE AO EVEN IF THE AO CLAIMS THAT THE ASSESSMENT ORDER WAS PASSED ON 23.12.2009. THE LD. COUNSEL FURTHER MADE A STATEMENT AT BAR THAT THE AO NEVER ASKED THE ASSESSEE TO FILE LO AN CONFIRMATION IN RESPECT OF THE LOANS BELOW RS. 20,000/-. ITA NO. 651/M/2013 4 7. THE LD. DEPARTMENTAL REPRESENTATIVE RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW. 8. WE HAVE CAREFULLY PERUSED THE ORDERS OF THE AUTH ORITIES BELOW. IT IS AN UNDISPUTED FACT THAT THE ASSESSMENT ORDER IS NOT DATED THOUGH THE DEMAND NOTICE IS DT. 23.12.2009. IT IS ALSO AN UNDI SPUTED FACT THAT SUBMISSIONS MADE BY THE ASSESSEE ON 30.12.2009 HAVE BEEN DULY CONSIDERED BY THE AO EVEN IF THE ASSESSMENT ORDER I S PASSED ON 23.12.2009. THE STATEMENT OF THE LD. COUNSEL IS AC CEPTED AS STATEMENT AT BAR ACCEPTING THAT THE AO NEVER ASKED FOR THE DETAI LS FOR LOANS TAKEN BELOW RS. 20,000/-. WE ALSO FIND THAT THE ASSESSEE HAS TAKEN UNSECURED LOANS TO THE TUNE OF RS. 4.06 CRORES FROM AS MANY A S 150 PARTIES. THE ADDITIONS MADE BY THE AO IS ONLY IN RESPECT OF 17 P ARTIES OUT OF WHICH 2 PARTIES NAMELY NAINA C. DEDHIA AND RATNABEN DHANJI VISARIA ARE BROUGHT FORWARD LOANS TOTALING TO RS. 3,70,000/- WHICH MEAN S THAT OUT OF THE TOTAL ADDITION OF RS. 5,89,150/-, RS. 3,70,000/- CANNOT B E ADDED DURING THE YEAR UNDER CONSIDERATION AS THESE ARE OLD BALANCES BROUG HT FORWARD. THE BALANCE OF RS. 1,19,150/- IN THE NAME OF 15 PARTIES COMES TO 0.53% OF THE TOTAL BORROWINGS. CONSIDERING THIS FACT IN THE LIG HT OF THE STATEMENT AT BAR MADE BY THE LD. COUNSEL, WE DIRECT THE AO TO DELET E THE ADDITION OF RS. 5,89,150/-. 9. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 5 TH DEC.2014 SD/- SD/- (VIJAY PAL RAO ) (N.K. BILLAIYA) /JUDICIAL MEMBER !& / ACCOUNTANT MEMBER MUMBAI; 4 DATED : 5/12/2014 . . ./ RJ , SR. PS ITA NO. 651/M/2013 5 !3 !3 !3 !3 / // / ,0 ,0 ,0 ,0 5!(0 5!(0 5!(0 5!(0 / COPY OF THE ORDER FORWARDED TO : 1. )+ / THE APPELLANT 2. ,-)+ / THE RESPONDENT. 3. 6 ( ) / THE CIT(A)- 4. 6 / CIT 5. 78 ,0 , , / DR, ITAT, MUMBAI 6. 8 9 / GUARD FILE. !3 !3 !3 !3 / BY ORDER, -0 ,0 //TRUE COPY// : :: : / ; ; ; ; (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI