Shri Girdharlal Mohanlal Patel, Anand V. The Income tax Officer,Ward-3(3), Petlad

ITA 677/AHD/2011

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 94616 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 7 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-10-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 07-10-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 03-03-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DINESH SINGH
• Section: 143(3); 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD C BENCH (BEFORE SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER & SHRI KUL BHARAT, JUDICIAL MEMBER) ITA NO: 677/AHD/2011 (ASSESSMENT YEAR: 2006-07) SHRI GIRDHARLAL MOHANLAL PATEL PROP: OF M/S. SHREENATH PETROLEUM, NR. RAZ HOTEL, TARAPUR- 388180 V/S INCOME TAX OFFICER, WARD- 3 (3), PETLAD (APPELLANT) (RESPONDENT) PAN: AGOPP 1541 K APPELLANT BY : SHRI ASEEM L. THAKKAR, AR RESPONDENT BY : SHRI DINESH SINGH, SR. D.R. ( )/ ORDER DATE OF HEARING : 07-10-2015 DATE OF PRONOUNCEMENT : 16-10-2015 PER ANIL CHATURVEDI, ACCOUNTANT MEMBER 1. THIS APPEAL FILED BY THE ASSESSEE IS AGAINST THE OR DER OF CIT(A)-I, BARODA DATED 2.12.2010 FOR A.Y. 2006-07. ITA NO. 677/ AHD/2011 . A.Y. 2006-07 2 2. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERIAL ON RECORD ARE AS UNDER. 3. ASSESSEE IS AN INDIVIDUAL AND STATED TO BE RUNNING A PETROL PUMP. ASSESSEE FILED HIS RETURN OF INCOME FOR A.Y. 2006-07 ON 28.1 2.2006 DECLARING TOTAL INCOME OF RS. 1,00,836/-. THE CASE WAS SELECTED FOR SCRUTINY AND THEREAFTER THE ASSESSMENT WAS FRAMED UNDER SECTION 143(3) VIDE ORDER DATED 8.12.2008 AND THE TOTAL INCOME WAS DETERMINED AT RS. 10,93,78 5/-. AGGRIEVED BY THE ORDER OF A.O., ASSESSEE CARRIED THE MATTER BEFORE L D. CIT(A) WHO VIDE ORDER DATED 8.12.2008 DISMISSED THE APPEAL OF THE ASSESSE E. AGGRIEVED BY THE AFORESAID ORDER OF LD. CIT(A), ASSESSEE IS NOW IN A PPEAL BEFORE US AND HAS RAISED THE FOLLOWING GROUND:- 1. THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ADDITION TO THE EXTENT OF RS. 6,66,500/- MADE U/S. 68 OF THE INCOME TAX ACT, 1961 IN RESPECT OF THE UNSECURED LOANS FROM THE FOLLOWING PARTIES:- 1. BHAGUBHAI MEMABHAI RABARI RS. 18,000/- 2. BHASKERBHAI C. PATEL RS. 50,000/- 3. CHIMANBHAI L. PATEL RS. 1,32,000/- 4. BUDHABHAI B. MAKWANA RS. 1,50,000/- 5. GELABHAI G. RABARI RS. 16,500/- 6. MAGANBHAI VALJI AGHERA RS. 1,00,000/- 7. CHANDRAKANT R. BHAKT RS. 1,00,000/- 8. KIRANBHAI VASANTBHAI BHAKT RS. 1,00,000/- 4. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, A.O NO TICED THAT ASSESSEE HAS RECEIVED UNSECURED LOAN FROM VARIOUS PERSONS, (THE LIST OF WHICH IS ATTACHED AT PAGE 8 OF THE ASSESSMENT ORDER). THE ASSESSEE WA S ASKED TO PROVE THE CREDITWORTHINESS, IDENTITY AND GENUINENESS OF THE D EPOSITORS. A.O NOTED THAT ASSESSEE COULD NOT PROVE THE CREDITWORTHINESS IN RE SPECT OF 9 DEPOSITORS ITA NO. 677/ AHD/2011 . A.Y. 2006-07 3 FROM WHOM ASSESSEE HAD OBTAINED AGGREGATE DEPOSITS OF RS. 8,66,500/-. HE ACCORDINGLY CONSIDERED THE AMOUNTS RECEIVED FROM TH E DEPOSITORS TO BE AS UNEXPLAINED AND MADE ADDITION U/S. 68 OF THE ACT. A GGRIEVED BY THE ORDER OF A.O., ASSESSEE CARRIED THE MATTER BEFORE LD. CIT(A) WHO VIDE ORDER DATED 2.12.2010 GRANTED PARTIAL RELIEF TO THE ASSESSEE. 5. AGGRIEVED BY THE AFORESAID ORDER OF LD. CIT(A), ASS ESSEE IS NOW IN APPEAL BEFORE US. 6. BEFORE US, LD. A.R. REITERATED THE SUBMISSIONS MADE BEFORE A.O AND LD. CIT(A) AND FURTHER SUBMITTED THAT LD. CIT(A) HAS UP HELD THE ADDITION WITH RESPECT TO AMOUNTS RECEIVED FROM 8 PERSONS. HE SUBM ITTED THAT OUT OF 8 PERSONS FROM WHOM ASSESSEE HAD OBTAINED LOANS, IN C ASE OF 5 PERSONS NAMELY SHRI BHAGUBHAI RABARI (RS. 18,000), SHRI BHA SKARBHAI PATEL (RS. 50,000), SHRI CHIMANBHAI PATEL (RS. 1,32,000/-), SH RI BUDDHABHAI MAKWANA (RS. 1,50,000/-) AND SHRI GHELUBHAI RABARI (RS. 16, 500/-), THE BALANCES ARE OPENING BALANCES AND HAVE NOT BEEN RECEIVED DURING THE YEAR AND THEREFORE NO ADDITION IN RESPECT OF THESE PARTIES COULD BE MA DE BY A.O. IN SUPPORT OF HIS CONTENTION OF THE AMOUNTS BEING RECEIVED IN EAR LIER YEARS, HE POINTED TO THE OBSERVATION OF THE A.O IN RESPECT OF THESE PART IES WHICH HAVE BEEN NOTED BY HIM IN THE BODY OF THE ASSESSMENT ORDER AT PAGE 4 TO 7. TO SUPPORT OF HIS CONTENTION THAT NO ADDITION CAN BE MADE WITH RESPEC T TO CASH CREDITS RECEIVED IN EARLIER YEARS, HE PLACED RELIANCE ON THE DECISIO N OF HONBLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. JAGATKUMAR SATISHBHAI PATEL REPORTED IN (2014) 225 TAXMAN.COM 190 (GUJ). WITH RESPECT TO THE ACCEP TANCE OF DEPOSITS FROM 3 OTHER PARTIES, HE SUBMITTED THAT THE ASSESSEE HAD PRODUCED THE BANK PASS BOOK, THE PROOF OF HOLDING OF LAND FROM WHICH THOSE PERSONS HAD EARNED ITA NO. 677/ AHD/2011 . A.Y. 2006-07 4 AGRICULTURAL INCOME AND FROM WHICH IN TURN THE AMOU NT WAS LENT OUT TO ASSESSEE. HE FURTHER SUBMITTED THAT IN RESPECT OF T HESE VERY LOANS, A.O HAD LEVIED PENALTY U/S. 271E OF THE ACT AND THE SAID PE NALTY WAS DELETED BY THE HONBLE TRIBUNAL. HE THEREFORE SUBMITTED THAT ONCE CERTAIN AMOUNTS WERE SUBJECTED TO TAX U/S. 68 QUESTION OF TREATING IT AS TRANSACTION IN VIOLATION OF SECTION 269SS OR SECTION 269T DOES NOT ARISE AS IT STOOD MUTUALLY EXCLUDED AND FOR THIS PROPOSTION HE RELIED ON THE DECISION O F HONBLE MADRAS HIGH COURT IN THE CASE OF DIT VS. YOUNG MEN CHRISTIAN AS SOCIATION REPORTED IN (2014) 227 TAXMAN.COM 31 (MAD). HE THEREFORE SUBMIT TED THAT NO ADDITION IN THE PRESENT CASE IS CALLED FOR AND THUS URGED TH AT THE ADDITION BE DELETED. THE LD. D.R. ON THE OTHER HAND SUPPORTED THE ORDER OF A.O AND LD. CIT(A). 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE ISSUE IN THE PRESENT CASE IS WITH RESPECT TO ADDITI ON MADE U/S. 68 OF THE ACT. BEFORE US, OUT OF THE LIST OF 8 PERSONS ASSESSEE HA S POINTED OUT THAT IN CASE OF 5 PERSONS, THE DEPOSITS HAVE BEEN CARRIED FORWARD F ROM EARLIER YEARS AND IN SUPPORT OF WHICH HE POINTED TO THE LEDGER ACCOUNT O F THOSE PARTIES AS APPEARING IN HIS BOOKS OF ACCOUNTS AND ALSO THE COP Y OF THE PASS BOOKS. THE SUBMISSION OF THE ASSESSEE OF THE AMOUNTS WHICH HAV E BEEN ADDED U/S. 68 OF THE ACT BEING OPENING BALANCE BROUGHT FORWARD FROM EARLIER YEARS HAS NOT BEEN CONTROVERTED BY REVENUE. WE FIND THAT HONBLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. JAGATKUMAR S. PATEL (SUPRA) HAS UPHELD THE ORDER OF TRIBUNAL WHEREBY THE TRIBUNAL HAD HELD THAT THE OPE NING BALANCES COULD NOT BE CONSIDERED FOR ADDITION U/S. 68. BEFORE US, REVE NUE HAS NOT BROUGHT ANY MATERIAL ON RECORD TO CONTROVERT THE SUBMISSIONS OF ASSESSEE NOR HAS POINTED OUT TO ANY CONTRARY BINDING DECISION IN ITS SUPPORT AND THEREFORE AS FAR AS ADDITION WITH RESPECT TO THE PARTIES WHOSE BALANCES HAVE BEEN CARRIED ITA NO. 677/ AHD/2011 . A.Y. 2006-07 5 FORWARD FROM EARLIER YEARS IS CONCERNED, NO ADDITIO N U/S. 68 IS CALLED FOR. AS FAR AS THE ACCEPTANCE OF DEPOSITS FROM OTHER PARTIE S ARE CONCERNED, WE FIND THAT ASSESSEE HAS FURNISHED THE DETAILS OF LAND HOL DING THE COPY OF ACKNOWLEDGEMENT AND PROOF OF SALE OF AGRICULTURE GO ODS AND THE SALE PROCEEDS OF AGRICULTURE GOODS WAS STATED TO BE THE SOURCE OF AMOUNT THAT WAS LENT TO THE ASSESSEE. THESE FACTS HAVE NOT BEEN CON TROVERTED BY REVENUE BY PLACING ANY CONTRARY MATERIAL ON RECORD. IN VIEW OF THESE FACTS, WITH RESPECT TO THE OTHER PARTIES FROM WHOM ASSESSEE HAD RECEIVE D LOAN ALSO, NO ADDITION IS CALLED FOR. IN THE RESULT, THE TOTAL ADDITION OF RS. 6,66,500/- MADE BY A.O IS DIRECTED TO BE DELETED. THUS THIS GROUND OF ASSESSE E IS ALLOWED. 8. IN THE RESULT, THE APPEAL OF ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 16- 10 - 2015. SD/- SD/- (KUL BHARAT) (ANIL CHATURVEDI) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD: TRUE COPY RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AHM EDABAD