Shri Jayantilal Sanghvi , Indore V. ACIT-4(1), Indore

ITA 740/Ind/2018

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 8333 (ITAT-INDORE)
• Duration Of Justice: 9 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-07-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2013-2014
• Appeal Filed On: 10-09-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R P MOURYA
• Keywords: Unexplained cash credit; Opportunity of being heard; Set aside
• Section: 143(3); 68

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL INDORE SMC BENCH, INDORE BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER ITA NO.740/IND/2018 ASSESSMENT YEAR: 2013-14 SHRI JAYANTILAL SANGHVI 8/10 SARDAR PATEL BRIDGE, INDORE / VS. A CIT - 4(1) INDORE ( APPELLANT ) ( RE VENUE ) P.A. NO. AGTPS5825Q APPELLANT BY SHRI VENUS RAWKA CA RE VENUE BY SHRI R.P. MO U RYA SR. DR DATE OF HEARING: 27.06.2019 DATE OF PRONOUNCEMENT: 09.07.2019 / O R D E R THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX(APPEALS)-II, INDORE DAT ED 08/05/2018 PERTAINING TO ASSESSMENT YEAR 2013-14. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL: 1. THAT THE LD. CIT(A) ERRED IN LAW AND FACTS OF T HE CASE AND CONFIRMED THE ADDITION MADE BY THE LD. AO IN UNSECURED LOANS U/S 68 OF RS.10,00,000/- AS UNEXPLAINED CASH CREDITS. THE ADD ITION WAS MADE TO THE TOTAL INCOME OF THE ASSESSEE WITHOUT CONSIDERIN G THE FACTS OF THE CASE. THE ACTION OF LD. CIT(A) IS TOTALLY WRONG ON THE FA CTS OF THE CASE. 2. THAT THE LD. CIT(A) ERRED IN LAW AND FACTS OF THE C ASE AND CONFIRMED THE ADDITION MADE BY THE LD. AO AS CESSATION OF LIABILI TY U/S 41(1) OF SMC- JAYANTILAL SANGHVI 2 RS.8,00,258/- TO THE TOTAL INCOME OF THE ASSESSEE W ITHOUT CONSIDERING THE FACTS OF THE CASE. THE ACTION OF LD. CIT(A) IS TOTALLY WRONG ON THE FA CTS OF THE CASE. 3.THAT THE LD. CIT(A) ERRED IN LAW AND FACTS OF THE CASE AND PASSED THE ORDER ON ACCOUNT OF NON-RECEIPT OF THIRD PARTY CONF IRMATIONS, WITHOUT GIVING THE PROPER OPPORTUNITY OF BEING HEARD TO THE ASSESS EE. 2. AT THE OUTSET, LD. COUNSEL FOR THE ASSESSEE SUBM ITTED THAT HE DOES NOT WISH TO PRESS THE GROUND NO.2 OF THE ASSES SEES APPEAL. LD. DEPARTMENTAL REPRESENTATIVE (DR) HAS NO OBJECTION. HENCE, THE GROUND NO.2 OF THE ASSESSEES APPEAL IS DISMISSED A S NOT PRESSED. 3. THE ONLY EFFECTIVE GROUND IS AGAINST CONFIRMATIO N OF ADDITION IN RESPECT OF UNSECURED LOANS MADE U/S 68 OF THE INCOM E TAX ACT 1961(HEREINAFTER CALLED AS THE ACT). 4. THE FACTS GIVING RISE TO PRESENT APPEAL ARE THAT THE ASSESSEE HAD DECLARED INCOME OF RS.1,73,830/- AND CURRENT YEAR L OSS OF RS.(-)45,36,745/- ON ACCOUNT OF SPECULATION BUSINES S LOSS. THE CASE WAS SELECTED FOR SCRUTINY ASSESSMENT AND THE ASSESS MENT U/S 143(3) OF THE ACT WAS FRAMED VIDE ORDER DATED 29.03 .2016. DURING THE COURSE OF ASSESSMENT, THE ASSESSING OFFICER MAD E AN ADDITION OF RS.8,00,258/- IN RESPECT OF CESSATION OF LIABILITY. FURTHER, THE ASSESSING OFFICER MADE AN ADDITION IN RESPECT OF UN EXPLAINED CASH CREDIT OF RS.10,00,000/-. THE ADDITION WAS MADE ON THE BASIS THAT THE NOTICE ISSUED TO SHRI LEELADHAR GUPTA ONE OF TH E LOAN CREDITOR AMOUNTING TO RS.5,00,000/-WAS RETURNED BACK WITH RE MARKS NOT TRACEABLE. AND THE OTHER PERSON NAMELY SHRI SANJAY TRADING P. LTD. SMC- JAYANTILAL SANGHVI 3 LOAN CREDITOR AMOUNTING TO RS.5,00,000/- WAS SERVED BUT NO COMPLIANCE WAS MADE. 5. AGGRIEVED BY THIS THE ASSESSEE PREFERRED AN APPE AL BEFORE THE LD. CIT(A). THE LD. CIT(A) AFTER CONSIDERING SUBMISSION S DISMISSED THE APPEAL. 6. NOW, THE ASSESSEE IS IN PRESENT APPEAL. 7. LD. COUNSEL FOR THE ASSESSEE VEHEMENTLY ARGUED T HAT THE AUTHORITIES BELOW WERE NOT JUSTIFIED IN CONFIRMING THE ADDITION. HE REITERATED THE SUBMISSIONS AS MADE BEFORE THE LD. C IT(A). IT IS CONTENDED THAT THE ASSESSING OFFICER MADE ADDITION IN RESPECT OF UNSECURED LOANS EVEN AFTER ONE OF THE NOTICES OUT O F TWO WAS DULY SERVED TO LOAN CREDITOR WHICH WAS SUFFICIENT COMPLI ANCE ON THE PART OF THE ASSESSEE. FURTHER, IT WAS CONTENDED THAT BOT H THE LOAN ACCOUNTS I.E. SHRI SANJAY TRADING PVT. LTD. & IN SH RI LEELADHAR GUPTA LOAN TAKEN DURING THE YEAR WAS RS.5,00,000/- EACH AND REPAID DURING THE YEAR IS RS.5,00,000/- EACH AND AL L THESE TRANSACTIONS WERE DULY VERIFIED BY THE LD. AO. AS T HE ASSESSEE HAD PROVIDED THE COPY OF LEDGER ACCOUNTS AND COPY OF BA NK STATEMENTS TO THE AO AND BOTH OF THESE WERE SQUARED UP LOAN AC COUNTS DURING THE FINANCIAL YEAR UNDER CONSIDERATION. HE FURTHER CONTENDED THAT THE TRANSACTIONS WERE CARRIED THROUGH BANKING CHANN EL. THEREFORE, THERE CANNOT BE ANY REASON TO SUSPECT THESE TRANSAC TIONS BEING NOT GENUINE AND WHERE IDENTITY OF THE CREDITOR IS ALSO ESTABLISHED. SMC- JAYANTILAL SANGHVI 4 FURTHER, IT IS CONTENDED THAT BOTH THE CREDITORS WE RE HAVING SUFFICIENT MONEY GIVE IT ON LOAN TO THE ASSESSEE. 8. ON THE CONTRARY, LD. DR OPPOSED THE SUBMISSIONS AND SUPPORTED THE ORDER OF THE AUTHORITIES BELOW. LD. DR SUBMITTE D THAT MERELY PROVIDING THE CONFIRMATION AND THE TRANSACTIONS BEI NG ROUTED THROUGH BANKING CHANNEL WOULD NOT BE SUFFICIENT TO CONCLUDE THAT THE TRANSACTIONS SO CARRIED OUT IS GENUINE AND IDEN TITY AND CREDITWORTHINESS OF THE CREDITOR IS ESTABLISHED. HE SUBMITTED THAT THE ONUS WAS ON THE ASSESSEE TO PROVE THESE INGREDI ENTS WHICH THE ASSESSEE HAS GROSSLY FAILED. 9. I HAVE HEARD BOTH THE PARTIES AND PERUSED THE MA TERIAL ON RECORD AND GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. O NE OF THE SUBMISSION IN THE FORM OF GROUND NO.3 THE ASSESSEE HAS STATED THAT NO OPPORTUNITY WAS GRANTED TO THE ASSESSEE AND MERE LY BECAUSE THE 3 RD PARTY COULD NOT APPEAR BEFORE THE ASSESSEE SHOULD NOT BE A GROUND FOR MAKING ADDITION. THE REVENUE HAS NOT PRO VIDED OPPORTUNITY TO PRODUCE THE CREDITORS. MOREOVER, THE REVENUE HAD ALL AUTHORITY FOR SECURING THE PRESENCE OF THE CREDITOR S. I HAVE GIVEN THOUGHTFUL CONSIDERATION TO THESE SUBMISSIONS OF TH E LD. COUNSEL FOR THE ASSESSEE. CONSIDERING THE TOTALITY OF THE FACTS AND THE MATERIAL PLACED BEFORE ME, I DEEM IT PROPER TO SET ASIDE THI S ISSUE TO THE LD. AO TO DECIDE IT AFRESH. THE ASSESSING OFFICER WOULD VERIFY THE SUBMISSIONS OF THE ASSESSEE AND ALSO MAKE INQUIRY F ROM THE CREDITORS IN CASE THE AMOUNT HAS ALREADY BEEN SQUAR ED UP AND THE SMC- JAYANTILAL SANGHVI 5 CREDITORS CONFIRM THIS FACT IN THAT EVENT THE ASSES SING OFFICER WOULD DELETE THE ADDITION. GROUND NO.1 OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE IN ITANO.740/IND/2018 IS ALLOWED FOR STATISTICAL PURPO SES. ORDER WAS PRONOUNCED IN THE OPEN COURT ON 09.07.20 19. SD/- (KUL BHARAT) JUDICIAL MEMBER INDORE; DATED : 09/07/2019 PATEL, P.S/. . . COPY TO: ASSESSEE/AO/PR. CIT/ CIT (A)/ITAT (DR)/GUAR D FILE. BY ORDER ASSISTANT REGISTRAR, INDORE