SWAPNIL MURLIDHAR PICHAD , MUMBAI V. INCOME TAX OFFICER WARD-1(4), THANE

ITA 7315/MUM/2017

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 7843 (ITAT-MUMBAI)
• Duration Of Justice: 7 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-08-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Appeal Filed On: 22-12-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K BEPAIR
• Keywords: Unexplained cash credit
• Section: 143(3); 68

Judgement Text

IN THE INCOME-TAX APPELLATE TRIBUNAL SMC BENCH MU MBAI BEFORE SHRI G.S. PANNU, ACCOUNTANT MEMBER AND SHRI PAWAN SINGH, JUDICIAL MEMBER ITA NO.7315/MUM/2017 (ASSESSMENT YEAR 2012-13 ) SHRI SWAPNIL MURLIDHAR PICHAD B-508, ASHOKA BUILDING NO.2, GAVAND BAUG, POKHARAN ROAD NO.2, THANE- 400606 PAN: BJCPP9926N VS. ITO-WARD -1(4) 1 ST FLOOR, MOHAN PLAZA, WAYALA NAGAR, KHADAKPADA, KALYAN(W),-421301. APPELLANT RESPONDENT APPELLANT BY : MS. DINKLE HARIYA (AR) RESPONDENT BY : SHRI S.K. BEPAIR (SR. DR) DATE OF HEARING : 09.08.2018 DATE OF PRONOUNCEMENT : 09.08.2018 ORDER UNDER SECTION 254(1)OF INCOME TAX ACT PER PAWAN SINGH, JUDICIAL MEMBER; 1. THIS APPEAL BY ASSESSEE UNDER SECTION 253 OF THE AC T IS DIRECTED AGAINST THE ORDER OF LD. COMMISSIONER OF INCOME-TAX (APPEALS)-2 , PUNE [LD. CIT(A)] DATED 24.10.2017 FOR ASSESSMENT YEAR 2012-13 WHICH IN TURN ARISES FROM THE ASSESSMENT ORDER PASSED UNDER SECTION 143(3) DATED 12.03.2015 BY ASSESSING OFFICER/ITO-WARD 1(4), KALYAN. THE ASSESSEE HAS RAI SED THE FOLLOWING GROUNDS OF APPEAL: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-2, PUNE WAS NOT JUSTIFIED BOTH IN FACTS AND IN LAW WHILE CONFIRMING FOLLOWING ADDITION:- (A) BY TREATING THE LOAN OBTAINED FROM APPELLANTS FATH ER OF RS. 7,17,000/- AS UNEXPLAINED CASH CREDIT U/S 68 OF THE INCOME TAX ACT, 1961. (B) THE APPELLANT CRAVES LEAVE TO ADD, ALTER, MODIFY AN D DELETE ALL OR ANY OF THE ABOVE GROUNDS OF APPEAL ON OR BEFORE THE FINAL HEARING. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS EN GAGED IN THE BUSINESS OF RETAIL TRADING OF TYRES OF M/S J.K. TYRES & INDUSTRIES IN THE NAME AND STYLE OF M/S GAJANAN TYRE SERVICE. THE ASSESSEE FILED ITS RETURN OF INCOME FOR ASSESSMENT ITA NO. 7315 MUM 17-SHRI SWAPNIL MURLIDHAR PICHAD 2 YEAR 2012-13 ON 30.09.2012 DECLARING TOTAL INCOME A T RS. 8,02,810/-. THE RETURN OF INCOME WAS SELECTED FOR SCRUTINY AND THE ASSESSMENT ORDER WAS PASSED UNDER SECTION 143(3) ON 22.03.2015. THE ASSE SSING OFFICER WHILE PASSING THE ASSESSMENT ORDER MADE THE ADDITION UNDE R SECTION 68 OF RS. 7,17,000/- ON ACCOUNT OF UNEXPLAINED CASH LOAN. ON APPEAL BEFORE THE LD. CIT(A), THE ACTION OF ASSESSING OFFICER WAS CONFIRM ED. THUS, FURTHER AGGRIEVED BY THE ORDER OF LD. CIT(A), THE ASSESSEE HAS FILED THE PRESENT APPEAL BEFORE US. 3. WE HAVE HEARD THE LD. AUTHORIZED REPRESENTATIVE (AR ) OF THE ASSESSEE AND LD. DEPARTMENTAL REPRESENTATIVE (DR) FOR THE REVENUE AN D GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. THE LD. AR OF THE ASSE SSEE SUBMITS THAT THE ASSESSING OFFICER WHILE PASSING THE ASSESSMENT ORDE R MADE THE ADDITION UNDER SECTION 68 OF RS. 7,17,000/- ON ACCOUNT OF UNEXPL AINED CASH. THE ASSESSING OFFICER SIMULTANEOUSLY INITIATED THE PENALTY UNDER SECTION 271D OF THE ACT. THE LD. AR OF THE ASSESSEE FURTHER SUBMITS THAT THE FATHER OF ASSESSEE ADVANCED TEMPORARY CASH LOAN TO ASSESSEE AND THE SAME WAS DE POSITED IN BANK ACCOUNT OF ASSESSEE. THE DETAILS OF CASH WAS EXPLAINED BEFO RE THE ASSESSING OFFICER AS WELL AS BEFORE THE LD. CIT(A). THE LOAN WAS TAKEN F ROM FATHER OF ASSESSEE; THEREFORE, THERE WAS NO DISPUTE ON IDENTITY. THE AS SESSEE FURNISHED THE COPY OF AFFIDAVIT OF FATHER OF ASSESSEE AND THE RETURN OF I NCOME FILED BY HIS FATHER. THE ASSESSEE ALSO SHOWN/FURNISHED COPY OF AUDITED ACCOU NTS ABOUT THE BUSINESS ACTIVITY OF THE FATHER OF THE ASSESSEE. THE ASSESSE E AVAILED LOAN FOR THE PURPOSE ITA NO. 7315 MUM 17-SHRI SWAPNIL MURLIDHAR PICHAD 3 OF HIS BUSINESS. HENCE, THE ASSESSEE HAS PROVED TH E CREDITWORTHINESS OF HIS FATHER. THE ASSESSEE AVAILED LOAN FOR RUNNING HIS B USINESS; THEREFORE, GENUINENESS OF THE TRANSACTION CANNOT BE DOUBTED. 4. ON THE OTHER HAND, THE LD. DR FOR THE REVENUE SUBMI TS THAT DURING THE ASSESSMENT PROCEEDING, THE ASSESSEE AGREED FOR ADDI TION AT THE TIME OF ASSESSMENT ON 12.03.2015. HENCE, THE GROUND OF APPE AL RAISED BY ASSESSEE HAS NO FORCE UNDER THE EYES OF LAW. IN REJOINDER SUBMIS SION, THE LD. AR OF THE ASSESSEE FILED COPY OF ORDER-SHEET NOTING OF ASSESS ING OFFICER AND INVITED OUR ATTENTION TO THE ORDER-SHEET DATED 12.03.2015, WHER EIN IT IS NOTED THAT ASSESSEE HAS EXPLAINED THAT ASSESSEE ACCEPTED CASH LOAN OF R S. 7,17,000/- FROM MURLIDHAR M. PICHAD (FATHER OF ASSESSEE). 5. WE HAVE CONSIDERED THE RIVAL SUBMISSION OF THE PART IES AND HAVE GONE THROUGH THE ORDERS OF AUTHORITIES BELOW AND THE MATERIAL PL ACED BEFORE US IN THE FORM OF PAPER BOOK. DURING THE ASSESSMENT PROCEEDING, TH E ASSESSING OFFICER MADE THE ADDITION ON HIS OBSERVATION THAT IN LEDGER ACCOUNT OF M/S. GAJANAN TYRE SERVICES, PROPRIETOR CONCERNED OF THE ASSESSEE , IT IS SEEN THAT ASSESSEE HAS ACCEPTED THE CASH LOAN OF RS. 7,17,000/-. IN THE AS SESSMENT ORDER THE ASSESSING OFFICER FURTHER NOTED THAT ASSESSEE AGREE D FOR ADDITION ON ACCOUNT OF UNEXPLAINED SOURCES. THE LD. CIT(A) CONFIRMED TH E ADDITION OBSERVING THAT ASSESSEES FATHER IS RUNNING A PETROL PUMP, HOWEVER , THE ASSESSEE IS DEALER IN TYRES AND THAT IT IS NOT UNDERSTANDABLE TO ACCEPT T HE CASH DEPOSIT IN THE BANK ITA NO. 7315 MUM 17-SHRI SWAPNIL MURLIDHAR PICHAD 4 ACCOUNT OF ASSESSEE WHEN BOTH ARE HAVING EASY ACCES S TO THE BANKING FACILITY. THE LD. CIT(A) DOUBTED THE GENUINENESS OF THE TRANS ACTION. 6. WE HAVE NOTED THAT THE ASSESSING OFFICER MADE THE A DDITION ON THE BASIS OF ALLEGED ADMISSION OF THE ASSESSEE, REORDERED DURING THE ASSESSMENT PROCEEDINGS. HOWEVER, NO SUCH RECORDING OF THE ADMI SSION OF ASSESSEE FOR ADMISSION IS AVAILABLE IN THE ORDER SHEET NOTING DA TED 12.03.2015. THERE IS NO DISPUTE ABOUT THE IDENTITY OF CREDITOR, WHO IS FATH ER OF ASSESSEE. FURTHER, THERE IS NO DISPUTE ABOUT THE CREDITWORTHINESS OF CREDITO R. THE ASSESSING OFFICER HAS DISPUTED ONLY THE GENUINENESS OF TRANSACTION. WE HA VE NOTED THAT IN THE STATEMENT OF FACT FILED BEFORE THE LD. CIT(A), THE ASSESSEE HAS CATEGORICALLY CONTENDED THAT THE ASSESSEE HAS AVAILED LOAN OF RS. 7,17,000/- ON FOUR OCCASIONS I.E. ON 5 TH AUGUST, 30 TH AUGUST, 3 RD OCTOBER AND ON 8 TH NOVEMBER 2011. THE ASSESSEE ALSO EXPLAINED THAT LOAN WAS TAK EN DUE TO PAUCITY OF WORKING CAPITAL AND THE AMOUNT WAS RECEIVED DUE TO EMERGENCY OF CHEQUE CLEARING PRESENTED BY M/S J.K. TYRE & INDUSTRIES, T O WHOM THE ASSESSEE HAS GIVEN POST DATED CHEUQE TO ENSURE TIMELY PAYMENT. F ROM THE FACTS NARRATED BY ASSESSEE, THE ASSESSEE HAS EXPLAINED THE GENUINENES S OF TRANSACTION. IN VIEW OF THE ABOVE FACTUAL DISCUSSION, WE DIRECT THE AO TO D ELETE THE ADDITION OF RS. 7,17,000/-. THE AO IS DIRECTED ACCORDINGLY. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT O N 09.08.2018. SD/- SD/- G.S. PANNU PAWAN SINGH ACCOUNTANT MEMBER J UDICIAL MEMBER ITA NO. 7315 MUM 17-SHRI SWAPNIL MURLIDHAR PICHAD 5 MUMBAI, DATE: 09.08.2018 SK COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE 2. RESPONDENT 3. THE CONCERNED CIT(A) 4. THE CONCERNED CIT(A) 5. DR SMC BENCH, ITAT, MUMBAI 6. GUARD FILE BY ORDER, DY./ASST. REGISTRAR ITAT, MUMBAI