ITO 1(2)(4), MUMBAI V. P.G. EXIM P.LTD, MUMBAI

ITA 747/MUM/2016

• Counselvise Citation: [2018] 112 COUNSELVISE.COM (IT) 5251 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 7 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-10-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2010-2011
• Appeal Filed On: 12-02-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: RAJAT MITTAL
• Keywords: Unexplained cash credit; Bogus loan; Set aside
• Section: 133(6); 201; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES C , MUMBAI BEFORE SHRI B.R. BASKARAN (AM) AND SHRI RAM LAL NEGI (JM) ITA NO. 747 /MUM/2016 ASSESSMENT YEAR: 2010 - 11 THE I.T.O. 1(2)(4), 536, AAYAKARBHAVAN, M.K. ROAD, MUMBAI - 400020 VS. M/S P.G. EXIM PVT. LTD., 18, PREMKUTIR (GROUND FLOOR), 177, BABUBHAICHIRAR ROAD, MARINE DRIVE, MUMBAI - 400020 PAN: AAFCP02224R (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI RAJAT MITTAL ( DR ) REVENUE BY : SHRI PRAKASH JOTWANI (A R) DATE OF HEARING: 17 /07/2018 DATE OF PRONOUNCEMENT: 10 /10 /2018 O R D E R PER RAM LAL NEGI, JM THIS APPEAL HAS BEEN FILED BY THE REVENUE AGAINST THE ORDER DATED 20.11.201 5 PASSED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS) (FOR SHORT THE CIT (A)) - 2 , MUMBAI, FOR THE ASSESSMENT YEAR 201 0 - 11 , WHEREBY THE LD. CIT (A) HAS PARTLY ALLOWED THE APPEAL FILED BY THE ASSESSEE AGAINST ASSESSMENT ORDER PASSED U/S 143 (3) OF THE INCOME TAX ACT, 1961 (FOR SHORT THE ACT). 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE COMP ANY ENGAGED IN THE BUSINESS OF TRADING OF CHEMICALS, FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR UND ER CONSIDERATION DECLARING LOSS OF RS. 4,721/ - . SINCE, THE CASE WAS SELECTED FOR SCRUTINY NOTICES U/S 143 (2) AND 142 (1) OF THE ACT WERE ISSUED AND SERVED UPON THE ASSESSEE. IN RESPONSE TO THE SAID NOTICES, THE AUTHORIZED REPRESENTATIVE (AR) OF THE ASSESS EE ATTENDED THE PROCEEDINGS FROM TIME TO TIME AND SUBMITTED THE DETAILS. SINCE THE ASSESSEE COMPANY HAD TAKEN UNSECURED ITA NO. 747 /MUM/2016 ASSESSMENT YEAR: 2010 - 11 LOAN OF RS. 2,31,52,984/ - FROM FOUR PARTIES, THE ASSESSEE WAS ASKED TO FURNISH THE CONFIRMATIONS OF THE PARTIES ALONG WITH SUPPORTING EV IDENCE. ACCORDINGLY , THE AR SUBMITTED TH E DETAILS AND TRIED TO ESTABLISH THE IDENTITY OF THE CREDITORS, THEIR CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTION. T HE AO EXAMINED THE EVIDENCE ON RECORD IN THE LIGHT OF THE SUBMISSIONS MADE ON BEHALF OF THE ASSESSEE. HOWEVER, THE AO REJECTED THE CONTENTION OF THE ASSESSEE IN RESPECT OF LOAN TAKEN FROM MRS. ANJALI BERLIA AMOUNTING TO RS. 19,38,370/ - AND M/S SUNTECH PERIPHERIALS PVT. LTD. AMOUNTING TO RS. 1,10,99,614/ - HOLDING THAT THE ASSESSEE HAS FAILED TO PR ODUCE COGENT DOCUMENTARY EVIDENCE TO ESTABLISH THE GENUINENESS OF THE TRANSACTION AND ADDED THE SAID AMOUNT S TO THE INCOME OF THE ASSESSEE TREATING THE SAME AS UNEXPLAINED CASH CREDIT U/S 68 OF THE I.T. ACT AND DETERMINED THE TOTAL INCOME OF THE ASSESSEE A T RS. 1,32,22,310/ - . 3. THE ASSESSEE CHALLENGED THE ASSESSMENT ORDER BEFORE THE CIT (A). THE LD. CIT (A) AFTER HEARING THE ASSESSEE ALLOWED THE APPEAL AND DIRECTED THE AO TO DELETE THE ADDITIONS. THE REVENUE IS IN APPEAL AGAINST THE SAID FINDINGS OF THE LD. CIT (A). 4 . T HE REVENUE HAS PREFERRED THE PRESENT APPEAL ON THE FOLLOWING EFFECTIVE GROUND : - WHETHER ON FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. CIT (A) WAS CORRECT IN DELETING THE ADDITIONS MADE U/S 68 IN RESPECT OF THE UNSECURED LOANS OF RS. 19,38,370/ - AND RS. 1,10,99,614 FROM M/S ANJALI BERLIANAD M/S. SUNTECH PERIPHERALS PVT. LTD. RESPECTIVELY, BY TREATING THEM AS UNEXPLA INED/BOGUS LOANS BECAUSE THE ASSESSEE COULD NOT PROVE THE GENUINENESS OF THE SAID LOANS DESPITE GIVING THEM OPPORTUNITIES DURING THE ASSESSMENT PROCEEDINGS. 5 . BEFORE US, THE LD. DEPARTMENTAL REPRESENTATIVE (DR) RELYING ON THE FINDINGS OF AO SUBMITTED THAT SINCE THE ASSESSEE HAS FAILED TO ESTABLISH GENUINENESS OF THE LOAN TRANSACTIONS IN QUESTION, THE LD. CIT(A) HAS WRONGLY ALLOWED THE APPEAL OF THE ASSESSEE AND DELETED THE ADDITIONS. THE LD. DR POINTED OUT THAT THE ASSESSEE HAS FAILED TO PROVE THAT MRS. ANJALI HAD GIVEN LOAN TO M/S POKARMAL GURUDAYAL PVT LTD. THE LD. DR FURTHER POINTED OUT THAT NOTICE ITA NO. 747 /MUM/2016 ASSESSMENT YEAR: 2010 - 11 U/S 133(6) OF THE ACT ISSUED TO M/S SUNTECH PERIPHERALS PVT. LTD. RECEIVE D BACK UN - SERVED BECAUSE THE OFFICE OF THE SAID COMPANY WAS NOT FOUND AT THE ADDRESS FURNISHED BY ASSESSEE. THE ASSESSEE ALSO FAILED TO FURNISH BANK STATEMENT AND OTHER DOCUMENTS TO ESTABLISH THE GENUINENESS OF THE LOAN TRANSACTION S . THE LD. DR FURTHER SUB MITTED THAT IN THE LIGHT OF THE AFORESAID FACTS, THE IMPUGNED ORDER IS LIABLE TO BE SET ASIDE. 6 . ON THE OTHER HAND, THE LD. COUNSEL FOR THE ASSESSEE RELYING ON THE FINDINGS OF THE LD. CIT (A) SUBMITTED THAT THE ASSESSEE HAD RECEIVED AN AMOUNT OF RS. 19,38 ,370/ - FROM POKARMAL GURUDAYAL PVT LTD. ON BEHALF OF M R S. ANJALI BERLIA AS SHE HAD ADVANCE LOAN OF RS. 19,38,370/ - TO M/S POKARMAL GURUDAYAL PVT LTD. PRIOR TO THE YEAR 1994. THE ASSESSEE RECEIVED THE SAID AMOUNT THROUGH CHEQUE. FURTHER, THE ASSESSEE HAS F URNISHED THE NAME, ADDRESS, PAN AND SUBMITTED THE COPY OF INCOME TAX RETURN AND CONFIRMATION FROM MS. ANJALI BERLIA AS HAS MENTIONED BY THE LD. CIT (A) IN ITS ORDER. THE ASSESSEE HAS ALSO SUBMITTED THE BAL A NCE SHEET AND TAX AUDIT REPORT ALONG WITH FORM NO. 3CD OF POKARMAL GURUDAYAL PVT LTD. TO ESTABLISH THE LOAN WAS RECEIVED BY T HE ASSESSEE FROM M/S POKARMAL GURUDAYAL PVT LTD. ON BEHALF OF MS. ANJALI BERLIA. SIMILARLY, THE ASSESSEE HAS SUBMITTED NAME, ADDRESS PAN OF THE PARTIES , CONFIRMATION FROM M/S SUNTEC H PERIPHERALS PVT. LTD AND FILED ALL POSSIBLE DETAILS REQUIRED TO PROVE THE GENUINENESS OF LOAN. THE APPELLANT HAS ALSO SUBMITTED THE INCOME TAX RETURN, COPY OF BALANCE SHEET OF M/S SUNTECH PERIPHERALS PVT. LTD. IN WHICH LOAN OF M/S PG EXIM PVT. LTD. HAS B EEN REFLECTED. SINCE, THE ASSESSEE HAS DISCLOSED THE IDENTITY AND CREDITOR AND CREDITWORTHINESS OF THE SAID PARTIES AND GENUINENESS OF THE TRANSACTION , NO ADDITION CAN BE MADE U/S 68 OF THE ACT. 7 . WE HAVE HEARD THE RIVAL SUBMISSIONS AND ALSO PERUSED THE RELEVANT MATERIAL ON RECORD IN THE LIGHT OF THE RIVAL CONTENTIONS. THE LD. CIT (A) HAS DELETED THE ADDITIONS HOLDING AS UNDER: - 5 I HAVE CONSIDERED THE FACTS OF THE CASE AND THE SUBMISSION MADE BY THE APPELLANT AND THEREFORE, IN RESPECT OF GROUND NO. 1 AND ITA NO. 747 /MUM/2016 ASSESSMENT YEAR: 2010 - 11 2. THE AO HAS ADDED A SUM OF RS. 19,38,370/ - U/S 68 AS BOGUS LOAN RECEIVED FROM MS. ANJALI BERLIA AND ALSO ANOTHER SUM OF RS. 1,1 0,99,614 / - U/S 68 BOGUS LOAN RECEIVED FROM M/S SUNTECH PERIPHERALS PVT. LTD. THE APPELLANT COMPANY TRIED TO EXPLAIN WITH THE BASIS DETAILS SUCH AS COPY OF INCOME TAX RETURN, LOAN CONFIRMATION, NAME, ADDRESS, PAN IN RESPECT OF THE ABOVE LOONIES DESPITE THE AO HAS ADDED THESE AMOUNTS AS BOGUS LOANS. SO AT THE TIME OF APPEAL HEARING THE AR OF THE APPELLANT CLAIMED THAT HE HAD ALREADY FILED THE DETAILS BEFORE THE AO. NOW ALSO HE HAS FILED IT BEFORE ME. ACCORDINGLY, I AM OF THE CONSIDERED OPINION THAT RESPECTFUL LY FOLLOWING THE MADHYA PRADESH HIGH COURT DECISION IN THE CASE OF CIT VS. METACHEM INDS 2000 245 ITR 160 WHERE IT IS HELD THAT THE LOAN TAKEN BY CHEQUE AND SAME CONFIRMED BY THE CREDITORS AND CREDITORS THEMSELVES ASSESSED TO TAX CREDIT HAS TO BE ACCEPTED AS GENUINE BY THE DEPARTMENT. IN THE INSTANT CASE, THE APPELLANT COMPANY HAS DISCHARGED THE DUTY OF FILING A COPY OF INCOME TAX RETURN, CONFIRMATION LETTER AND OTHER BANK DETAILS AND THEREFORE, I DIRECT THE AO TO DELETE THE ABOVE ADDITIONS AND ACCORDINGLY THESE GROUNDS ARE ALLOWED. 8 . WE NOTICE THAT THE ASSESSEE HAS REFLECTED BOTH THE AMOUNTS UNDER THE HEAD UNSECURED LOANS IN ITS BALANCE SHEET AS ON 31 ST MARCH, 2010. THE ASSESSEE HAS ALSO SUBMITTED LETTER FROM POKARMAL GURUDAYAL PVT . LTD. CONFIRMING THE P AYMENT OF LOAN THROUGH CHEQUE DATED 26.03.2010 COPY OF RELEVANT PAGES OF BANK ACCOUNT IN ORDER TO ESTABLISH THE GENUINENESS OF LOAN TAKEN FROM ANJALI BERLIA. SIMILARLY, THE ASSESSEE HAS SUBMITTED AUDITORS REPORT OF SUNTECH PERIPHERALS PVT. LTD. FOR THE A. Y. 2010 - 11, ADDRESS AND PAN DETAILS OF DIRECTORS OF SUNTECH PERIPHERALS PVT. LTD. CONFIRMATION LETTER DATED 28.02.2013 ETC. IN ORDER TO ESTABLISH THE LOAN TRANSACTION WITH M/S SUNTECH PERIPHERALS PVT . LTD. AS POINTED OUT BY THE LD. CIT (A) THESE DOCUMENTS WERE PRODUCED BY THE ASSESSEE DURING THE ASSESSMENT PROCEEDINGS AND DURING THE APPELLATE PROCEEDINGS. SINCE, THE ASSESSEE HAS SUBMITTED THE DOCUMENTS TO ESTABLISH IDENTITY AND CREDITWORTHINESS OF THE CREDITORS AND GENUINENESS OF LOAN TRANSACTIONS , THE LD. CIT (A) HAS RIGHTLY ALLOWED THE APPEAL OF THE ASSESSEE AND DIRECTED THE AO TO DELETE THE ADDITIONS. MOREOVER, THE LD. CIT (A) HIMSELF HAS ITA NO. 747 /MUM/2016 ASSESSMENT YEAR: 2010 - 11 PERUSED THE AFORESAID DOCUMENTS DURING THE APPELLATE PROCEEDINGS. HENCE, WE DO NOT FIND ANY FACTUAL OR LEGAL INFIRMITY IN THE ORDER OF THE LD. CIT (A) TO INTERFERE WITH THE SAME . WE THEREFORE , UPHOLD THE ORDER PASSED BY THE LD. CIT (A) AND DISMISS ALL THE GROUNDS OF APPEAL OF THE REVENUE. IN THE RESULT, APPEAL FILED BY THE REVENUE FOR ASSESSMENT YEAR 2010 - 2011 IS DISMIS SED. ORDER PRONOUNCED IN THE OPEN COURT ON 10 TH OCTOBER , 2018. SD/ - SD/ - ( B.R. BASKARAN ) (RAM LAL NEGI) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI ; DATED: 10 / 10 / 2018 ALINDRA, PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . / BY ORDER, //TRUE COPY// / (DY./ ASSTT.REGISTRAR) , / ITAT, MUMBAI