Appeal Details
Counselvise Citation
[2019] 118 COUNSELVISE.COM (IT) 4940 (ITAT-RAJKOT)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
4 year(s) 2 month(s) 4 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
13-02-2019
Appeal Filed By
Assessee
Order Result
Allowed
Bench Allotted
DB
Next Hearing Date
14-02-2018
Assessment Year
2010-2011
Appeal Filed On
09-12-2014
Judgement Text
, IN THE INCOME TAX APPELLATE TRIBUNAL, RAJKOT [CONDUCTED THROUGH E COURT AT AHMEDABAD] BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI PRADIPKUMAR KEDIA, ACCOUNTANT MEMBER ./ ITA NO.713/RJT/2014 / ASSESSMENT YEARS: 2010-11 SMT.KAJALBEN N. GONDALIYA DIVYA DARSHAN, ASHIRWAD SOCIETY, B/H.SARDAR BAUG JUNAGADH. VS ITO, WARD-1(2) JUNAGADH. ASSESSEE BY : SHRI M.J. RANPURA, AR REVENUE BY : SHRI PRAVEEN VERMA, SR.DR / DATE OF HEARING : 05/12/2018 /DATE OF PRONOUNCEMENT : 13/02/2019 O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER : ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL AGAINST ORDER OF THE LD.CIT(A)- IV, RAJKOT DATED 16.10.2014 PASSED FOR THE ASSTT.YEAR 2010-11. 2. ASSESSEE HAS TAKEN FOUR GROUNDS OF APPEAL. OUT OF THAT GROUND NO.1 AND 4 ARE GENERAL GROUNDS OF APPEAL, WHICH DO NOT CALL FOR RECORDING OF ANY FINDING. IN GROUND NO.2 AND 3, TH E ASSESSEE HAS PLEADED THAT THE LD.CIT(A) HAS ERRED IN CONFIRMING ADDITION OF RS.16.00 LAKHS AND RS.10.10 LAKHS BEING UNEXPLAINED CREDIT APPEARING A GAINST M/S.VISION EQUITIES AND SHRI ARVINDBHAI M. GONDALIYA. THESE A DDITIONS HAVE BEEN MADE WITH AID OF SECTION 68 OF THE INCOME TAX ACT, 1961. ITA NO.713/RJT/2014 - 2 - 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE HA S FILED RETURN OF INCOME ON 28.6.2010 DECLARING TOTAL INCOME AT RS.3, 20,000/-. THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY ASSESSMENT A ND NOTICE UNDER SECTION 143(2) WAS ISSUED AND SERVED UPON THE ASSES SEE. A PERUSAL OF THE RECORD REVEALED TO THE AO THAT THE ASSESSEE HAS DEP OSITED IN CASH A SUM OF RS.12,02,500/- IN THE COOPERATIVE BANK OF RAJKOT LTD., JUNGADH BRANCH IN SAVING BANK ACCOUNT NO.04336. SHE FURTHE R DEPOSITED A SUM OF RS.15,23,000/- WITH IDBI, RAJKOT BRANCH. THUS TOTA L CASH OF RS.27,25,000/- WAS DEPOSITED BY THE ASSESSEE IN TWO BANK ACCOUNTS. THE LD.AO SOUGHT SOURCE OF SUCH DEPOSITS IN THE BANKS. W ITH REGARD TO CASH DEPOSITED IN COOPERATIVE BANK, IT WAS CONTENDED BY THE ASSESSEE THAT SHE HAD ISSUED CHEQUE TO VIBRANT EQUITIES ON DIFFER ENT DATES TOTALING TO RS.21 LAKHS. THESE CHEQUES WERE ISSUED FROM COOPER ATIVE BANK, RAJKOT ON DIFFERENT DATES. OUT OF THAT SHE HAS RECEIVED R S.16 LAKHS IN CASH AND THE BALANCE RS.5.00 LAKHS WERE SHOWN AS RECOVERABLE . THIS CASH WAS USED FOR DEPOSITING IN COOPERATIVE BANK. WITH REGA RD TO THE DEPOSITS IN IDBI BANK, IT WAS CONTENDED THAT SHE HAS RECEIVED R S.10.10 LAKHS FROM SHRI ARVINDBHAI M. GONDALIYA AS ADVANCE FOR SALE OF 933 SQ.FEET OFFICE SPACE AT SECOND FLOOR OF C-DWARKADHISH MARKET, JUNAG ADH. THE LD.AO DIRECTED THE ASSESSEE TO PROVE IDENTIFY OF CREDITOR S, GENUINENESS OF THE TRANSACTION, AND THEIR CREDIT-WORTHINESS. WITH REG ARD TO VIBRANT EQUITIES, IT WAS CONTENDED BY THE ASSESSEE THAT IT WAS BEING RUN BY DEVEN MALAVIYA. HE HAS GIVEN CONFIRMATION, BUT OF LATE, HE HAS SUFFERED LOT OF LOSSES, AND RAN AWAY FROM THE CITY TO PUNE. CUTTINGS FROM THE NEWSPAPERS EXHIBITING ALL THESE UPS AND DOWNS HAVE BEEN PRODUCED BEFORE THE AO. THE AO DID NOT RELY UPON THE VERSIO N OF THE ASSESSEE ON THE GROUND THAT VIBRANT EQUITIES, A PROPRIETARY CON CERN OF MRS.DISHA D. ITA NO.713/RJT/2014 - 3 - MALAVIYA IS OF PUNE AND NOTICE SENT TO THEM RECEIVE D BACK WITH THE POSTAL REMARK LEFT. WITH REGARD TO THE CASH RECE IVED FROM ARVINDBHAI MANJIBHAI GONDALIYA, THE LD.AO ISSUED SUMMONS. SHR I ARVIND GONDALIYA APPEARED AND DEPOSED THAT HE HAS HAVING A GRICULTURE LAND OF 15 BIGHAS AND NET AGRICULTURE INCOME OF RS.2 LAKHS. HE HAS TWO SONS, AND ONE OF THEM IS RUNNING PAN-BIDI SHOP AND OTHER ONE IS WORKING IN DYEING MILL. THE AO DID NOT DISPUTE IDENTITY OF THIS MAN, BUT OBSERVED THAT HE HAS NO CREDIT-WORTHINESS TO GIVE THIS MUCH MONEY TO THE ASSESSEE. HENCE, HE MADE ADDITION OF RS.16.00 LAKHS AND RS.10 .10 LAKHS. APPEAL TO THE LD.CIT(A) DID NOT BRING ANY RELIEF TO THE ASSES SEE. 4. BEFORE US, THE LD.COUNSEL FOR THE ASSESSEE REITE RATED HIS CONTENTIONS, AS WERE RAISED BEFORE THE LD.REVENUE AUTHORITIES. HE PLACED ON RECORD COPY OF FORM NO.7/12 EXHIBITING LAND HELD BY SHRI A RVINDBHAI MANJIBHAI GONDALIYA. HE ALSO PLACED ON RECORD COPY OF THE AGREEMENT VIDE OFFICE SPACE WAS SOUGHT TO BE SOLD IN FAVOUR O F SHRI ARVINDBHAI GONDALIYA. THEREAFTER, HE DREW OUR ATTENTION TOWAR DS NEWSPAPER CUTTINGS FROM TIMES OF INDIA. IT SHOWED THAT SHRI MALAVIYA COMMITTED SUICIDE AND POLICE WAS EXPLORING OTHER ANGLE IN SHA RE BROKER SUICIDE. THE ALLEGED PROPRIETOR OF VIBRANT EQUITIES WAS FOUN D LYING IN POOL OF BLOOD AT A STAR HOTEL AT SENAPATI BAPAT ROAD. THE POLICE STARTED INVESTIGATION, WHETHER HE COMMITTED SUICIDE OR WAS MURDERED. THERE WERE OTHER NEWSPAPER REPORTS SHOWING FATE OF DEVEN MALVIYA AND OTHER ACTIVITIES HE HAS DONE TO VARIOUS INVESTORS. IN A WAY, HE WAS ABSCONDING FROM THE INVESTORS. THE LD.COUNSEL FOR THE ASSESSE E DREW OUR ATTENTION TOWARDS ALL THESE NEWSPAPER REPORTS. THEREAFTER, L D.COUNSEL FOR THE ASSESSEE HAS RELIED UPON THE JUDGMENT OF THE HONBL E GUJARAT HIGH COURT IN THE CASES OF CIT VS. SUN BUILDERS, 41 TAXM AN.COM 484 (GUJ), CIT ITA NO.713/RJT/2014 - 4 - VS. KEGHJIBHAI P. VIRANI, 35 TAXMANN.COM 100 (GUJ) AND CIT VS. PATEL NATVERLAL CHINUBHAI & CO. 40 TAXMANN.COM 304 (GUJ). HE PLACED ON RECORD COPIES OF THESE DECISIONS. 5. ON THE OTHER HAND, THE LD.DR RELIED UPON THE ORD ERS OF THE REVENUE AUTHORITIES. 6. WE HAVE DULY CONSIDERED RIVAL SUBMISSIONS AND GO NE THROUGH THE RECORD CAREFULLY. SECTION 68 OF THE INCOME TAX ACT CONTEMPLATES THAT WHERE ANY SUM IS FOUND CREDITED IN THE BOOKS OF AN ASSESSEE MAINTAINED FOR ANY PREVIOUS YEAR, AND THE ASSESSEE OFFERS NO E XPLANATION ABOUT THE NATURE AND SOURCE THEREOF, OR THE EXPLANATION OFFER ED BY THE ASSESSEE IS NOT, IN THE OPINION OF THE AO SATISFACTORY, THEN TH E SUM SO CREDITED IN THE ACCOUNTS MAY BE TREATED AS INCOME OF THE ASSESSEE O F THAT PREVIOUS YEAR. 7. AS FAR AS CASH ALLEGED TO HAVE BEEN RECEIVED FRO M VIBRANT EQUITIES IS CONCERNED, IT IS TO BE APPRECIATED IN THE LIGHT OF PARTICULAR BACKGROUND OF THIS ISSUE. THE AO HAS NOT DISPUTED THAT THE AS SESSEE HAS ISSUED CHEQUE IN FAVOUR OF THE VIBRANT EQUITIES, AND MONEY WAS CLEARED FROM SB ACCOUNT TO THAT CONCERN. IT IS ALSO NOT IN DISP UTE THAT, THAT CONCERN WAS RUNNING INTO TROUBLE AND ULTIMATELY PROPRIETOR DIED IN MYSTERIOUS CIRCUMSTANCES. THE QUESTION IS, IF AN ASSESSEE CAN MAKE PAYMENT AS INVESTOR TO SAID CONCERN, AND ALLEGE THAT UNDER SOM E COMPELLING CIRCUMSTANCES OR NON MATERIALIZATION OF THE DEAL, I T WAS RECEIVED IN CASH, THEN THAT ADMISSION OF THE ASSESSEE OUGHT TO BE LOO KED INTO LOOKING TO THE PECULIAR FACTS. THE ASSESSEE CANNOT PRODUCE TH E PERSON FOR CONFIRMATION, BECAUSE HE IS NO MORE. THE ASSESSEE WAS CREDITOR TO HIM. THE ASSESSEE HAS BEEN ALLEGING THAT PART OF THE MON EY RECEIVED BACK IN ITA NO.713/RJT/2014 - 5 - CASH. IN THESE CIRCUMSTANCES, UNLESS THERE IS OTHE R EVIDENCE WITH THE AO TO BELIEVE THAT THE ASSESSEE HAS SOME OTHER SOURCE OF EARNING SHOULD NOT BE DISBELIEVED. IF THIS WAS NOT THE SOURCE FOR THE ASSESSEE TO DEPOSIT RS.16 LAKHS, AND THERE SHOULD BE SOME OTHER MODE WH ICH CAN BE EXPECTED THAT THE ASSESSEE MUST HAVE EARNED INCOME FROM THAT MODE. NO SUCH THINGS COULD BE BROUGHT ON RECORD. 8. AS FAR AS SECOND AMOUNT OF RS.10.10 LAKHS IS CON CERNED, A COPY OF AGREEMENT DATED 10.7.2009 AND FINAL DOCUMENT DATED 7.8.2009 HAS BEEN PLACED ON RECORD AT PAGENOS.9 TO 14 OF THE PAPER BO OK, WHEREIN THE ASSESSEE HAS CONTENDED THAT SHE HAD SOLD HER FLAT 1 3, NANDIGRAM APARTMENT, JUNAGADH FOR RS.4.77 LAKHS TO SMT.SHITALB EN GANWANTRAY JIVANI. THE AO HAS ACCEPTED THIS TRANSACTION AS GEN UINE AND DID NOT DISTURB. THUS, IT SHOULD BE CONSTRUED THAT THIS AM OUNT WAS AVAILABLE WITH THE ASSESSEE. APART FROM THAT SHE HAD RECEIVE D RS.10.10 LAKHS FROM ARVINDBHAI MANJIBHAI GONDALIYA. THE AO HAS DOUBTED CREDIT- WORTHINESS OF THIS MAN. THE LD.CIT(A) HAS ALSO DOU BTED CREDIT- WORTHINESS AS WELL AS GENUINENESS OF THE TRANSACTIO N AND MADE REFERENCE TO THE DECISION OF HONBLE SUPREME COURT IN THE CAS E OF SUMATI DAYAL, 214 ITR 801 AS WELL AS DURGA PRASAD MORE, 82 ITR 54 0. WE ARE OF THE VIEW THAT THE ALLEGED VENDEE BELONGS TO A LOWER STR ATA OF THE SOCIETY. ONE OF HIS SONS IS RUNNING PAN SHOP AND ANOTHER ONE IS WORKING AT DYEING MILL. HE IS AN AGRICULTURIST. HE CANNOT MA INTAIN THE ACCOUNTS AND MONITOR HIS ACTIVITIES IN AN ORGANIZED MANNER. THE LD.REVENUE AUTHORITIES EXPECT THAT HE SHOULD SUBMIT DETAILS OF AGRICULTURE PRODUCE, BANK ACCOUNTS, COST OF CULTIVATION, PROOF OF SALES. THESE ARE HIGHLY ALIEN TO AGRICULTURE ACTIVITIES IN INDIA, WHAT TO TALK OF MARGINAL FARMERS. EVEN BIG FARMERS HAVING BIG CHUNK OF LANDS ARE NOT MAINT AINING THESE KINDS OF ITA NO.713/RJT/2014 - 6 - DETAILS. GENERATION OF AGRICULTURE INCOME COULD ON LY BE ESTIMATED BY CONSIDERING THE LAND HOLDING. THE MAN HAS DEPOSED THAT HE WAS HAVING SUFFICIENT RESOURCES AND PAID ADVANCES FOR PURCHASE OF A OFFICE SPACE. IT IS DIFFICULT TO ASCERTAIN THE EXACT AFFAIRS OF WHAT VENDEE PLANNED FOR FUTURE OF HIS CHILDREN FOR ACQUIRING SUCH OFFICE SP ACE AND FROM WHERE HE HAS ARRANGED THE MONEY. BUT SURROUNDING CIRCUMSTAN CES IS CLEAR THAT HE REMAINED STRICT TO HIS STAND THAT A SUM OF RS.10.10 LAKHS WAS GIVEN TO THE ASSESSEE. IN SUCH CIRCUMSTANCES, IF ANY UNEXPLAINE D MONEY POSSESSED BY HIM, OUGHT TO BE CONSIDERED IN HIS CASE AND NOT IN THE HANDS OF THE ASSESSEE. IT IS TO BE APPRECIATED THAT THE ASSESSE E HAS EXPLAINED THE SOURCE AND PROVED GENUINENESS OF THE TRANSACTION. O WNER OF 15 BIGAS OF AGRICULTURE LAND WITH ONE SON RUNNING PAN-SHOP AND ANOTHER SON WORKING IN DYEING MILL, IT CAN BE EXPECTED HE MUST HAVE THE SOURCES FOR ARRANGING RS.10 LAKHS FOR MAKING INVESTMENT IN REAL ESTATE. THEREFORE, WE ARE OF THE VIEW THAT THE ASSESSEE IS ABLE TO FUL FILL ALL THE INGREDIENT OF SECTION 68 AND NO ADDITION DESERVES TO BE MADE IN H ER HAND. WE ALLOW THIS APPEAL, AND DELETE BOTH THE ADDITIONS. 9. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . PRONOUNCED IN THE OPEN COURT ON 13 TH FEBRUARY, 2019. SD/- (PRADIPKUMAR KEDIA) ACCOUNTANT MEMBER SD/ (RAJPAL YADAV) JUDICIAL MEMBER AHMEDABAD; DATED, 13/02/2019
