ITO Wd.2(3)., Jalgaon V. M/s. shree Auto LPG Pump, Jalgaon

ITA 655/PUN/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 56523 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 5 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-10-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2006-2007
• Appeal Filed On: 29-04-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S PRAVEENA
• Keywords: Unexplained investment; Gift; Salary income
• Section: 68

Judgement Text

1 ITA 655/PN/2010 SRI AUTO LPG PUMP IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE SHRI I.C.SUDHIR, JM AND SHRI D. KARUNAKARA RAO, AM ITA NO.655/PN/2010 ASST.YEAR:2006-07 INCOME TAX OFFICER, WARD 2(3), JALGAON APPELLANT VS. M/S SHREE AUTOLPG PUMP, JALGAON PAN ABDFS4839H RESPONDENT APPELLANT BY : NONE RESPONDENT BY : S.PRAVEENA, DR ORDER PER D. KARUNAKARA RAO, AM THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) II, NASHIK DT. 11-2-2010 FOR THE ASSESSMENT YEAR 2006-07. 2. FOLLOWING ARE THE GROUNDS OF APPEAL RAISED BY TH E REVENUE IN ITS APPEAL. 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD.CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.5,25,000 ON ACCOUNT OF UNSECURED LOAN FROM SHRI MANOJ LILAHAR PATIL. THE LD.CIT(A) HAS RELIED ON THE SUBMISSION OF ASSESSEE ONLY THAT ASSESSEES FATHER AND MOTHER HAVE SALARY INCOME AS WELL AS THE FAMILY HAS AGRICULTURAL INCOME. BUT NO EVIDENCE SUPPORTING TH E AMOUNT HAS BEEN GIVEN BY FATHER/MOTHER TO THE ASSESSEE HAS BEE N PRODUCED. HERE LD.CIT(A) HAS DELETED THE ADDITIONS WITHOUT AN Y EVIDENCE. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD.CIT(A) HAS NOT APPRECIATED THE FACT THAT ASSESSING OFFICER HAS COR RECTLY MADE THE ADDITION OF RS.5,25,000 U/S 68 AS ASSESSEE FAILED TO PROVE THE SAME. 2 ITA 655/PN/2010 SRI AUTO LPG PUMP 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD.CIT(A) HAS NOT APPRECIATED THE FACT THAT ADDITION OF RS.5,40,000 IS MADE ON ACCOUNT OF UNEXPLAINED INVESTMENT IN THE CAPITAL AC COUNT OF SHRI RAJESH M.RANE IS BASED ON THE FACT. THE FACT IS VERY MUCH CLEAR THAT NO SUCH ENTRY OF GIFT RECEIVED BY THE ASSESSEE AND SOURCE OF AGRICULTURAL INCOME IS ALSO NOT PROVED. 3. THE ABOVE GROUNDS OF THE REVENUE DEAL WITH DELET ION OF A COUPLE OF SUMS IE RS 5.25 LAKHS AND RS 5.4 LAKHS. THE REVENU E IS AGGRIEVED AGAINST THE DELETION OF THE ADDITION OF RS.5,25,000/- THE U NSECURED LOAN FROM MANOJ LILAHAR PATIL AND ANOTHER DELETION OF RS.5.4 LACS OF UNEXPLAINED INVESTMENT IN THE CAPITAL ACCOUNT OF SHRI RAJESH M.RANE . 4. IN CONNECTION WITH THE DELETION OF RS.5,25,000/- , THE CIT(A) DELETED THE SAME FOR THE REASONS MENTIONED IN PARA 4.3 OF T HE IMPUGNED ORDER. SIMILARLY, THE CIT(A) DELETED AN ADDITION OF RS.5.4 LACS, INVOLVING SHRI RANE FOR THE REASONS GIVEN ON PAGE-8 OF THE IMPUGNE D ORDER. WHILE THE AO HELD THESE TWO CREDITORS ARE NOT CREDIT WORTHY, THE CIT(A) ON EXAMING THE FACTS OF BOTH THE TRANSACTIONS HELD THAT THEY A RE IN FACT CAPABLE OF GIVING THE SAID AMOUNTS. 5. AGGRIEVED WITH THE SAID DECISION OF THE CIT(A), THE REVENUE IS IN APPEAL BEFORE US. NONE WAS PRESENT FOR THE ASSESSEE AT THE TIME OF HEARING OF THIS APPEAL. HOWEVER, THE LEARNED DEPAR TMENTAL REPRESENTATIVE EXPLAINED THE FACTS OF THE CASE AND AIDED US IN THE PROCEEDINGS AND SHE HOWEVER, RELIED HEAVILY ON THE ORDER OF THE ASSESSI NG OFFICER. 6. ON HEARING HER, WE HAVE PERUSED THE CONTENTS OF PARAGRAPH-4.3 RELATING TO AN ADDITION OF RS.5,25,000/- AND CONTEN TS ON PAGES 8 AND 9 OF THE IMPUGNED ORDER RELATING TO THE DELETION OF THE ADDITION OF RS.5.4 LACS. FOR THE SAKE OF COMPLETENESS, WE REPRODUCE THE SAID PARAGRAPHS, WHICH ARE AS UNDER. 3 ITA 655/PN/2010 SRI AUTO LPG PUMP 4.3. I HAVE CONSIDERED THE SUBMISSION OF THE APPEL LANT AND THE REASONS GIVEN BY THE AO IN HIS ASSESSMENT ORDER AS WELL AS THE REMAND REPORT. IT IS AN UNDISPUTED FACT THAT SHRI MANOJ PATIL, HIS MOTHER AND HIS FATHER WERE IN RECEIPT OF SALARY/PENSION AND ALSO HAVING AGRICULTURAL INCOME AROUND RS.1 LAKH PER YEAR. IT IS ALSO SEEN THAT THE SAID CREDITOR ENCASHED AN AMOUNT OF RS.3,25,000/- ON MATURITY OF FIXED DEPOSITS MAINTAINED IN JALGAON DISTRICT GOVERNMENT SERVANTS SOCIETY ON 01 /08/2005 AND UTILIZED THE SAME TO ADVANCE LOAN TO THE APPELLANT. THE AGRICULTURAL INCOME AND OTHER RECEIPTS OF SALARY AND PENSION OF THE FAMILY MEMBERS OF THE CREDITOR ARE REASONABLE AND ESTABLIS H THE CREDITWORTHINESS OF THE CREDITOR HENCE THE AOS DOU BTS IN THIS REGARD ARE MISCONSTRUED. THUS, THE IDENTITY, GENUINENESS O F THE TRANSACTION AND CREDITWORTHINESS WERE ESTABLISHED BY THE APPELL ANT. THEREFORE, THE ADDITION OF RS.5,25,000/- MADE U/S 68 OF THE AC T IS NOT JUSTIFIABLE AND HENCE, DELETED. THUS, THE ABOVE EXTRACTS FROM THE ORDER OF THE CIT( A), IT IS EVIDENT THAT THE CIT(A) HAS NOT ONLY CONSIDERED THE SALARY INCOME BUT ALSO THE AGRICULTURAL INCOME ON ONE HAND AND THE PROCEED S ON ENCASHMENT OF THE FD OF RS 3.25 LAKHS ON THE OTHER. FURTHER, WE FIND THAT THERE IS NO DISPUTE ON THE IDENTITY OF TH E CREDITOR. AS SUCH THE AO DOES NOT HAVE ANY INCRIMINATING INFORMATION IN HIS POSSESSION TO DEMONSTRATE THAT THE EXPLANATION OF T HE ASSESSEE IS NOT ACCEPTABLE. CONSIDERING THE WHOLE OF IT, WE ARE OF THE OPINION, THAT THE ORDER OF THE CIT(A) DOES NOT CALL FOR ANY INTERFERENCE. ACCORDINGLY, THE GROUND IS DISMISSED. WE SHALL NOW TAKE UP THE OTHER CREDIT OF RS 5.4 LAK HS. RELEVANT EXTRACT FROM THE ORDER OF THECIT(A) IS RELEVANT AND THE SAME READS AS UNDER: I HAVE GONE THROUGH THE SUBMISSIONS OF THE APPELLA NT AND ALSO THE REASONS GIVEN BY THE AO IN ASSESSMENT ORDER AS WELL AS THE REMAND REPORT. THE AO MADE NECESSARY ENQUIRIES DUR ING THE REMAND PROCEEDINGS AND SATISFIED WITH THE TRANSACTI ONS IN RESPECT OF SHRI RAJESH MURLIDHAR RANE. THE AO CONFIRMED THE F ACT THAT THE SHRI MURLIDHAR RANE HAS AVAILED A LOAN OF RS.10 LAKH FROM BAMNOD GRAMIN SAHAKARI PATPEDHI LTD.AND GIFTED AN AMOUNT OF 4 ITA 655/PN/2010 SRI AUTO LPG PUMP RS.5 LAKH TO HIS SON RAJESH . THE SAID AMOUNT WAS UTILIZED BY RAJESH TO PURCHASE A DEMAND DRAFT. THEREFORE, AN A MOUNT OF RS.5,00,000/- STANDS CLEARLY EXPLAINED AND SHRI RAJ ESH RANE IS HAVING SUFFICIENT AGRICULTURAL INCOME AND PRODUCED THE PROOF IN THIS REGARD HENCE, THE BALANCE AMOUNT OF RS.40,000/- CAN ALSO BE TAKEN AS EXPLAINED.THUS, THE FINDINGS OF THE AO IN HIS LE TTER DT.08/01/2010 ARE ACCEPTABLE. THEREFORE, IT IS TO BE TAKEN THAT THE SAID TRANSACTION IS EXPLAINED BY THE APPELLANT. HENCE, THE ADDITION MADE IN THIS REGARD IS DELETED. 7. THUS, THE ABOVE EXTRACTS FROM THE ORDER OF THE C IT(A), IT IS EVIDENT THAT THE CIT(A) HAS CONSIDERED THE FACT OF TAKING O F LOAN OF RS 10 LAKHS WHICH IS THE SOURCE FOR THE SAID RS 5 LAKHS IN THE HANDS OF SRI RAJESH. CIT(A) NOT ONLY CONSIDERED THE SAME BUT ALSO THE AG RICULTURAL INCOME. FURTHER, WE FIND THAT THERE IS NO DISPUTE ON THE ID ENTITY OF THE CREDITOR. AS SUCH THE AO DOES NOT HAVE ANY INCRIMINATING INFORMA TION IN HIS POSSESSION TO DEMONSTRATE THAT THE EXPLANATION OF THE ASSESSEE IS NOT ACCEPTABLE. CONSIDERING THE WHOLE OF IT, WE ARE OF THE OPINION, THAT THE ORDER OF THE CIT(A) DOES NOT CALL FOR ANY INTERFERENCE. ACCORDIN GLY, THE GROUND IS DISMISSED. 8. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISS ED. ORDER PRONOUNCED IN THE COURT ON 05-10-2011. SD/- SD/- (I.C.SUDHIR) (D.KARUNA KARA RAO) JUDICIAL MEMBER ACCOUNTANT M EMBER PUNE, DATED THE 05.10. 2011 *VNR COPY OF THE ORDER IS FORWARDED TO : 1. ASSESSEES AS MENTIONED IN THE CAUSE TITLE 2. ITO, WARD 2(3), JALGAON 3. CIT (A)-II, NASHIK 4. CIT CONCERNED, 5. D.R. ITAT B BENCH, PUNE. 5 ITA 655/PN/2010 SRI AUTO LPG PUMP 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR I.T.A.T PUNE