Shri Jayantilal Bachubhai Thumar, Rajkot V. The ITO, Ward-2 (1) (4), Rajkot

ITA 68/RJT/2020

• Counselvise Citation: [2023] 102 COUNSELVISE.COM (IT) 0751 (ITAT-RAJKOT)
• Duration Of Justice: 3 year(s) 6 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-10-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 18-07-2023
• Assessment Year: 2016-2017
• Appeal Filed On: 17-03-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: FORTHEASSESSEEATTHETIME; SHRIK.LSOLANKI
• Assessee Lawyers: SHRIRASHMINVEKARIA

Judgement Text

आयकरअपीलीयअधिकरण,अहमदाबादनायपीप INTHEINCOMETAXAPPELLATETRIBUNAL, (ConductedthroughE-Court,Rajkot) BEFORESHRIWASEEMAHMED,ACCOUNTANTMEMBER And SHRIT.RSENTHILKUMAR,JUDICIALMEMBER आयकरअपीलसं./ITANo.68/Rjt/2020 निर्धररवरध / Asstt.Year:2016-17 ShriJayantilalBachubhai Thumar, TirthComplex, Opp.RajPetrolPump, CanalRoad, Rajkot-360001. PAN:ABKPT3852C Vs. Income-taxOfficer, Ward-2(1)(4), Rakot. (Applicant)(Respondent) Assesseeby:ShriRashminVekaria,A.R Revenueby:ShriK.LSolanki,Sr.D.R सुिव्ईकीत्रीख /DateofHearing:19/07/2023 घोरर्कीत्रीख/DateofPronouncement:16/10/2023 आदेश/ORDER PERWASEEMAHMEDACCOUNTANTMEMBER: ThecaptionedappealhasbeenfiledattheinstanceoftheAssessee againsttheorderoftheLearnedCommissionerofIncomeTax(Appeals),Rajkot-2, (inshort“Ld.CIT(A)”)arisinginthematterofassessmentorderpassedunder s.143(3)oftheIncomeTaxAct1961(here-in-afterreferredtoas"theAct") relevanttotheAssessmentYear2016-17. ITAno.68/Rjt/2020 Asstt.Year2016-17 2 2.ThefirstissuedraisedbytheassesseeisthatthelearnedCIT(A)erredin confirmingtheadditionofloanandadvancesgivenforRs.96.1Lacsonly. 3.Thefactsinbriefarethattheassesseeinthepresentcaseisanindividual andengagedinthepracticeoflaw.TheAssesseefortheyearunderconsideration filedlossreturnamountingto₹5,29,646/-andsamewasselectedunderscrutiny assessment.TheAOduringtheassessmentproceedingfoundthattheassessee hasgivenloansandadvancestocertainpersonsaggregatingtoRs.96.1Lacs. However,theassesseeonlyprovidednameandmobilenumberofsuchpersons andwhensuchpersonswerecontactedthroughtelephone,theydeniedhaving anytransactionwithassessee.Assuch,theassesseefailedtofurnishtherequisite detailssuchasaddressofparties,ledgercopy,theirconfirmationandpartiesbank statement,cashbookandbankbooketc.toverifythegenuinenessoftheloans& advancegiven.Thus,theassessingofficertreatedsuchloans&advancegivenby theassesseeasunexplainedinvestmentundersection69oftheActandaddedto thetotalincomeoftheassessee. 4.TheaggrievedassesseepreferredanappealbeforelearnedCIT(A). 5.TheassesseebeforethelearnedCIT(A)submittedthattoinvokethe provisionofsection69oftheAct,thereshouldbe3essentialconditionswhich mustbesatisfied.Thefirstconditionisthatthereshouldbeinvestmentmadeby theassesseewhichwasnotfoundrecordedinthebooksofaccountswhereasin hiscasetheadvancegiventothepartiesweredulyrecordedinbooksandthe samewerealsosubmittedduringtheassessmentproceedings.Thesecond conditionisthattheunaccountedinvestmentshouldhavebeenmadeinthe previousyearrelevanttoassessmentyearunderconsideration.Buttheassessee hasgivenadvancetothepartiesintheF.Y.2011-12,2012-13and2013-14which canbeverifiedfrombankstatementsavailableonrecordwhereasrelevant previousyeartocurrentassessmentyearis2015-16.Thus,thesecondcondition hasalsonotbeensatisfied.Thethirdandlastconditionisthatuponfindingof ITAno.68/Rjt/2020 Asstt.Year2016-17 3 unaccountedinvestmentintheP.Y.theassesseeoffersnoexplanationor explanationofferedbyhimwasnotfoundsatisfactory.Buttheassesseehas substantiatedtheloanandadvancesbyprovidingbankdetailfromwhereadvance havebeengiven.Therefore,theadditioncannotbesustained. 6.However,thelearnedCIT(A)confirmedtheorderofthelearnedCIT(A)by observingasunder: Duringtheappealproceedingtheappellantsubmittedthesameconfirmationwhichwere submittedbeforetheAssessingOfficerandtheyarethoroughlyexaminedandfoundthatit bearsonlynameofthepersonthemobilenumberandaddress.Itmerelyspeaksthatthey havetakenloansforcertainamountfromJayantibhaiBThumar.Noneofthemhaveany identityproofnorhaveanyPANnumberthereforetheconfirmationsubmittedarefoundto benon-genuine.Consideringthisitisheldthattheappellantisnotabletoestablishthe genuinenessofsuchadvancesgiven.Accordinglyitisheldthatassesseefailsindoingthe advancestobegenuine.AccordinglyIupheldtheactionofAssessingOfficerdisallowsum ofRs.96,10,000/-.Thegroundofappealonthisaccountisthereforedismissed. 7.BeingaggrievedbytheorderofthelearnedCIT(A),theassesseeisin appealbeforeus. 8.ThelearnedARbeforeusreiteratedthesubmissionsmadebeforethelower authoritiesbyreferringtotherespectiveorder. Ontheotherhand,thelearnedDRbeforeusvehementlysupportedtheorderof theauthoritiesbelow. 9.Wehaveheardtherivalcontentionsofboththepartiesandperusedthe materialsavailableonrecord.Admittedly,theassesseehasgivenloansand advancestocertainpartiesandearnedinterestincomeonloansandadvances giventosuchparties.Assuch,theassesseeduringtheassessmentproceeding hasprovidedthedetailofloansandadvancesinconnectionwiththedisputeof quantumofinterestincomeofferedbytheissue.Thisfactcanbeverifiedfromthe observationoftheAOfortreatingtheadvancesasunexplainedinvestmentwhich readsasunder: 6.1Onverificationofsubmissionmadebytheassesseeregardingreceiptfromvarious person.Theassesseevidehissubmissiondated28.11.2018submittedthat,confirmations ITAno.68/Rjt/2020 Asstt.Year2016-17 4 ofthepersonstowhomloanswereprovidedareattachedherewith.However,on verificationoftheseconfirmationitisfoundthat,theasseseehasonlyprovidedNameof thepersonandmobilenumberofpersonsonly.Theundersignedhastrytocontacttothe personshowevermostofpersonrejectedthetransactionmadewiththeassessee. Therefore,videthisofficeshowcausenoticedated29.11.2018issuedandserveduponthe assessee.Therelevantparaofthenoticeareasunder: 9.1Thus,ononehand,therevenuehasacceptedtheinterestincomeearned bytheassesseefromloans&advancesgiventoimpugnedpartiesbutonthe otherhand,treatingtheimpugnedloans&advancesasunexplainedinvestmentof theassessee.Inourconsideredopiniontherevenuecannottakedifferentstand forinterestincomeaswellasloans&advancesfromwhereinterestincome accrued. 9.2Bethatasmaybe,therevenuehastreatedloan&advancesgivenbythe assesseeashisunexplainedinvestmentundersection69oftheAct.Theprovision ofsection69oftheActreadsunder: 69.Whereinthefinancialyearimmediatelyprecedingtheassessmentyeartheassessee hasmadeinvestmentswhicharenotrecordedinthebooksofaccount,ifany,maintained byhimforanysourceofincome,andtheassesseeoffersnoexplanationaboutthenature andsourceoftheinvestmentsortheexplanationofferedbyhimisnot,intheopinionof theAssessingOfficer,satisfactory,thevalueoftheinvestmentsmaybedeemedtobethe incomeoftheassesseeofsuchfinancialyear. 9.3Fromtheperusaloftheprovisionofsection69oftheAct,itisdiscernible thatincaseanassesseeisfoundtohavemadeinvestmentinanypreviousyear, butsuchinvestmentwasnotrecordedinthebooksofaccountmaintainedbythe assessee,thensuchunaccountedinvestmentmaybedeemedasincomeofthe assesseeforsuchpreviousyear.Inthecaseofthepresentassessee,thereisno allegationorfindingofbothlowerauthoritiesthattheloans&advancesgivenby theassesseetoearninterestincomewererecordedinbooksofaccount maintainedbyhimsinceearlieryears.Further,therenofindingthattheseloans& advancesweregivenbytheassesseeinpreviousyearrelevanttoassessmentyear underconsideration.Onthecontrary,theassesseebeforethelearnedCIT(A) ITAno.68/Rjt/2020 Asstt.Year2016-17 5 demonstratedthattheseloansandadvancesweregivenbyhimintheearlier years.Thus,theconditiontoinvoketheprovisionofsection69oftheActwasnot satisfied.Therefore,inourconsideredopinion,suchloan&advancescannotbe treatedasunexplainedinvestmentundersection69oftheActintheyearunder consideration.Therefore,weherebysetasidethefindingofthelearnedCIT(A) anddirecttheAOtodeletetheadditionmadebyhim.Accordingly,thegroundof appealoftheassesseeisherebyallowed. 10.ThenextissueraisedbytheassesseeisthatthelearnedCIT(A)erredin notdecidingthegroundrelatingtoallowancesoflossclaimedinthereturnof income. 11.Attheoutset,wenotethattheleanedARfortheassesseeatthetime hearingbeforeussubmittedthattheassesseehasdirectedthelearnedARnotto presstheimpugnedissue.Hence,weherebydismisstheimpugnedgroundof appealoftheassesseeasnotpressed. 12.Intheresult,theappealoftheassesseeispartlyallowed. OrderpronouncedintheCourton16/10/2023atAhmedabad. Sd/-Sd/- (T.RSENTHILKUMAR)(WASEEMAHMED) JUDICIALMEMBERACCOUNTANTMEMBER (TrueCopy) Ahmedabad;Dated16/10/2023 Manish