ASSISTANT COMMISSIONER OF INCOME TAX 30(1), MUMBAI V. ARIHANT DIGIPRINT, MUMBAI

ITA 7065/MUM/2017

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 6718 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 4 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-05-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2012-2013
• Appeal Filed On: 12-12-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ABDUL HAKEEM M LD
• Assessee Lawyers: KETAN VAJANI LD
• Keywords: Unexplained cash credit; Set aside
• Section: 143(3); 131; 68

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, MUMBAI . . , , BEFORE HONBLE SHRI C.N. PRASAD, JM AND HONBLE SHRI MANOJ KUMAR AGGARWAL, AM ./ I.T.A. NO.7065/MUM/2017 ( / ASSESSMENT YEAR: 2012-13) A CIT - 30(1) C-13, 5 TH FLOOR, ROOM NO.503 PRATYAKSHKAR BHAVAN, BKC (E) MUMBAI-400 051. / VS. M/S. ARIHANT DIGIPRIN T 236, GUNDECHA INDL. ESTATE AKURLI ROAD, OPP. BIG BAZAR KANDIVLI, MUMBAI-400 101. ! ./ ./PAN/GIR NO. AAJFA-8412-H ( !# /APPELLANT ) : ( $!# / RESPONDENT ) ASSESSEE BY : SHRI KETAN VAJANI- LD. AR REVENUE BY : SHRI ABDUL HAKEEM M - LD.DR / DATE OF HEARING : 30/04/2019 / DATE OF PRONOUNCEMENT : 06/05/2019 / O R D E R PER MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1. AFORESAID APPEAL BY REVENUE FOR ASSESSMENT YEAR [IN SHORT REFERRED TO AS AY] 2012-13 CONTEST THE ORDER OF LD. COMMIS SIONER OF INCOME- TAX (APPEALS)-33, MUMBAI, [IN SHORT REFERRED TO AS CIT(A)], APPEAL NO.CIT(A)-41/IT/269/2015-16 D ATED 01/09/2017 ON FOLLOWING GROUNDS OF APPEAL: - (I) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. CIT(A) ERRED IN DELETING ADDITION OF RS.70,00,000/- MADE U /S. 68 OF THE INCOME TAX ACT, 1961 EVEN THOUGH THE AO FOUND THAT THERE IS PR IMA FACIE EVIDENCE AGAINST THE ASSESSEE VIZ. THE RECEIPT OF MONEY, WHERE THE GENUINENESS OF TRANSACTION AS WELL AS CREDITWORTHINESS OF THE CRED ITOR WAS QUESTIONABLE.' 2 (II) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW, THE LD. CIT(A) ERRED IN DIRECTING THE ASSESSING OFFICER TO DELETE THE ADDITION OF RS.1,75,726/- ON ACCOUNT OF INTEREST ON LOANS TREAT ED AS UNEXPLAINED CASH CREDIT. (III) THE APPELLANT PRAYS THAT THE ORDER OF THE CIT (A) ON THE ABOVE GROUNDS BE SET ASIDE AND THAT THE ORDER OF THE AO BE RESTORED. 2.1 FACTS IN BRIEF ARE THAT THE ASSESSEE BEING RESIDENT FIRM STATED TO BE ENGAGED IN THE BUSINESS OF PRINTING & STATIONERY WAS ASSESSED FOR IMPUGNED AY IN SCRUTINY ASSESSMENT U/S 143(3) ON 31 /03/2015 WHEREIN THE INCOME OF THE ASSESSEE WAS DETERMINED AT RS.113 .55 LACS AFTER CERTAIN ADDITIONS AS AGAINST RETURNED INCOME OF RS. 41.76 LACS FILED BY THE ASSESSEE ON 28/09/2012. 2.2 DURING ASSESSMENT PROCEEDINGS, UPON PERUSAL OF ASSESSEES BALANCE SHEET, IT TRANSPIRED THAT THE ASSESSEE OBTA INED UNSECURED LOANS OF RS.70 LACS FROM TWO PERSONS AS PER THE FOLLOWING DETAILS: - ACCORDINGLY, THE ASSESSEE WAS ASKED TO PROVE THE ID ENTITY, CREDITWORTHINESS OF THE TWO INVESTORS AND ALSO THE GENUINENESS OF THE TRANSACTIONS. 2.3 THE PERUSAL OF REPLIES REVEALED THAT ALTHOUGH SANJAY SEJPAL CONFIRMED THE TRANSACTIONS, HOWEVER, HE HAD NOT FIE LD RETURN OF INCOME FOR THE IMPUGNED AY. IN CASE OF NATASHA A.VORA , NO BANK STATEMENT WAS FURNISHED WHEREAS THE RETURN OF INCOME WAS FILED AT RS.0.85 LACS AS AGAINST LOAN OF RS.30 LACS ADVANCED TO THE ASSESSEE . THE SAID FACTUAL MATRIX LED THE LD. AO TO TREAT THE SAID LOANS AS UN EXPLAINED CASH CREDIT U/S 68 AND ACCORDINGLY, THE SAME WERE ADDED TO ASSE SSEES INCOME. AS NO. NAME OF LENDER AMOUNT (RS.) 1. SANJAY SEJPAL RS.40 LACS 2. NATASHA A VORA RS.30 LACS TOTAL RS.70 LACS 3 A NATURAL CONSEQUENCE, INTEREST PAID ON THESE UNPRO VED LOANS AMOUNTING TO RS.1,75,726/- WAS ALSO DISALLOWED. 3.1 AGGRIEVED, THE ASSESSEE AGITATED THE SAME WITH SUCCESS BEFORE LD. FIRST APPELLATE AUTHORITY VIDE IMPUGNED ORDER DATED 01/09/2017. DURING APPELLATE PROCEEDINGS, THE ASSESSEE FURNISHED ADDIT IONAL EVIDENCES U/R 46A. THESE EVIDENCES WERE IN THE SHAPE OF COPY OF B ANK STATEMENT & CONFIRMATION OF LOAN TAKEN BY SANJAY SEJPAL FROM JINESH A.MATALIA ALONG WITH COPY OF BANK STATEMENT AND INCOME TAX RETURN O F JINESH A.MATALIA. SIMILARLY, COPY OF BANK STATEMENT, LOAN CONFIRMATIO N AND INCOME TAX RETURN OF NATASHA A.VORA WAS FILED IN SUPPORT OF THE TRANSACTION. ALL THESE EVIDENCES WERE CONFRONTED TO LD. AO WHO, ITS IN REMAND REPORT DATED 04/02/2017, OBSERVED THAT THE ASSESSEE FURNIS HED SOURCE OF SOURCE IN RESPECT OF LOANS AND SANJAY SEJPAL HAS FILED THE RETURN OF INCOME LATER ON. DURING REMAND PROCEEDINGS, STATEME NT U/S 131 OF SANJAY SEJPAL WAS ALSO RECORDED, WHEREIN IT WAS FOUND THAT THE LO AN WAS ADVANCED BY SANJAY SEJPAL OUT OF AMOUNTS BORROWED BY HIM FROM HIS FRIEND JINESH ASHWIN MATALIA. THE ASSESSEE ALSO SUBMITTED THAT THE LOAN WAS SIMILARLY ADVANCED BY NATASHA A.VORA OUT OF FUNDS BORROWED BY HER FROM HER HUSBAND SHRI APOORVA VORA WHO HAD CAPACITY TO ADVANCE SUCH LOANS. 3.2 THE LD. FIRST APPELLATE AUTHORITY, AFTER PERUSA L OF MATERIAL ON RECORD INCLUDING ASSESSEES SUBMISSIONS AND REMAND REPORT, INTER-ALIA, OBSERVED THAT THE ASSESSEE HAD PAID INTEREST ON THE SE LOANS AFTER DEDUCTION OF TAX AT SOURCE AND THE LOANS WERE FULLY REPAID BY THE ASSESSEE IN SUBSEQUENT ASSESSMENT YEARS AND THEREFO RE, ADDITION U/S 68 AS WELL AS INTEREST DISALLOWANCE COULD NOT BE SU STAINED. AGGRIEVED, THE REVENUE IS IN FURTHER APPEAL BEFORE US. 4 4. WE HAVE CAREFULLY HEARD THE RIVAL SUBMISSIONS AN D PERUSED RELEVANT MATERIAL ON RECORD. THE UNDISPUTED POSITIO N THAT EMERGES IS THE FACT THAT DURING REMAND PROCEEDINGS, THE ASSESSEE H AS ESTABLISHED THE SOURCE OF SOURCE OF LOANS OBTAINED BY IT DURING IMP UGNED AY. THE ASSESSEE NOT ONLY FURNISHED LOAN CONFIRMATIONS, BAN K STATEMENTS OF THE LENDER BUT ALSO FURNISHED BANK STATEMENTS AND LOAN CONFIRMATIONS OF PARTIES FROM WHOM SUCH FUNDS WERE OBTAINED BY THE L ENDER. IT IS ALSO UNDISPUTED FACT THAT THE ASSESSEE HAS SETTLED THESE LOANS FULLY IN SUBSEQUENT YEARS. NOTHING ON RECORD ESTABLISHES THA T ANY CASH WAS EXCHANGED BETWEEN THE ASSESSEE AND THE LENDER. THER EFORE, NO INFIRMITY COULD BE FOUND IN THE IMPUGNED ORDER QUA DELETION OF ADDITION U/S 68 AS WELL AS INTEREST DISALLOWANCE. 5. RESULTANTLY, THE APPEAL STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 06 TH MAY, 2019. SD/- SD/- (C.N. PRASAD) (MANOJ KUMAR AGGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 06/05/2019 SR.PS, JAISY VARGHESE ! / COPY OF THE ORDER FORWARDED TO : 1. !# / THE APPELLANT 2. $!# / THE RESPONDENT 3. + ( ) / THE CIT(A) 4. + / CIT CONCERNED 5. ,- & . , . , / DR, ITAT, MUMBAI 6. -/01 / GUARD FILE / BY ORDER, / (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI.