Smt. Ami Chetan Shah, Navsari V. The ACIT.,Navsari Circle-, Navsari

ITA 764/AHD/2011

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 6061 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 3 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-06-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 13-06-2014
• Assessment Year: 2005-2006
• Appeal Filed On: 10-03-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: J P JHANGID
• Assessee Lawyers: MITESH MODI
• Keywords: Unexplained cash credit

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD C BENCH BEFORE: SRI D.K TYAGI, JUDICIAL MEMBER AND SHRI N.S. SAINI, ACCOUNTANT M EMBER SMT. AMI CHETAN SHAH, PROP. OF M/S AMI CONSULTANCY, 101-B, JANTA APARTMENT, STATION ROAD, NAVSARI PAN: AJXPS 4718 B (APPELLANT) VS THE DY. COMMISSIONER OF INCOME TAX, NAVSARI, CIRCLE, NAVSARI (RESPONDENT) REVENUE BY: SRI J.P. JHANGID, SR.D.R. ASSESSEE BY: SRI MITESH MODI, A.R. DATE OF HEARING : 13-06-2014 DATE OF PRONOUNCEMENT : 27-06-20 14 / ORDER PER : D.K. TYAGI, JUDICIAL MEMBER:- THIS IS THE ASSESSEES APPEAL AGAINST THE ORDER OF LD. CIT(A), VALSAD DATED 17-12-2010. ITA NO. 764/AHD/2011 ASSESSMENT YEAR 2005-06 I.T.A NO. 764/AHD/2011 A.Y. 2005-06 PAGE NO SMT AMI CHETAN SHAH PROP. OF M/S AMI CONSULTANCY VS . DCIT 2 2. THE ASSESSEE HAS TAKEN FOLLOWING GROUNDS OF APPE AL:- 1. LD. CIT(A), VALSAD HAS ERRED IN CONFIRMING THE ORDER OF DY. CIT, NAVSARI, CIRCLE, NAVSARI IN MAKING ADDITION TO THE EXTENT OF RS. 2,67,000/- ON MISLEADING, BASELESS, ARBITRARY AND P ERVERSE OBSERVATIONS, IS CONTRARY TO LAW AND FACTS OF THE C ASE HENCE, LIABLE TO THE QUASHED. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, BOTH THE LOWER AUTHORITIES HAVE FAILED TO APPRECIATE IN THE RIGHT PERSPECTIVES THE DETAILED EXPLANATIONS OFFERED BY THE APPELLANT THROUGH VARIOUS SUBMISSIONS FILED SUBSTANTIATED BY COGENT AND AUTHE NTIC EVIDENCES VIZ. CONFIRMATION LETTERS WITH COMPLETE NAMES AND P OSTAL ADDRESSES, PAN, BOOKS OF ACCOUNTS, BANK STATEMENTS, INCOME TAX RECORDS, ETC. OF ALL THE THREE LENDERS AND THUS, DISCHARGED THE B URDEN LIES UPON HER FULLY TO PROVE THE IDENTITY, CREDITWORTHINESS O F LENDERS AND ALSO THE GENUINENESS OF THE LOANS AND HENCE, SUCH ADDITI ON AS UNEXPLAINED CASH CREDITS IS OTHERWISE, UNWARRANTED OF FACTS, BAD IN LAW AND AGAINST UNREBUTTED EXPLANATIONS, AUTHENTIC, BELIEVABLE AND ACCEPTABLE EVIDENCES ADDUCED BY THE APPELLANT AND H ENCE UNJUSTIFIED. 3. BRIEF FACTS OF THE CASE ARE THAT DURING THE ASSE SSMENT PROCEEDINGS AO FOUND THAT ASSESSEE HAS RECEIVED UNSECURED LOANS FROM THE FOLLOWING PARTIES AGGREGATING TO RS. 2,80,000/-: SR. NO NAME OF LENDERS AMOUNT OF LOAN (RS.) 1 BABULAL RAVCHAND SHAH 50,000/- 2 KHUSHI TUSHAR SHETH 1,50,000/- 3 MANAN CHETAN SHAH 67,000/- 4 NITYA CHETAN SHAH 13,000/- TOTAL 2,80,000/- TO VERIFY THE GENUINENESS AND CREDITWORTHINESS OF T HE DEPOSITORS AO ASKED FOR THE FOLLOWING DETAILS:- I.T.A NO. 764/AHD/2011 A.Y. 2005-06 PAGE NO SMT AMI CHETAN SHAH PROP. OF M/S AMI CONSULTANCY VS . DCIT 3 (A). NAME AND COMPLETE POSTAL ADDRESS OF THE PERSON FROM WHOM LOAN WAS TAKEN WITH THEIR PAN AND WARD/CIR. WHERE THEY A RE ASSESSED TO TAX (B) AMOUNT OF INTEREST GIVEN WITH RAT OF INTEREST. (C) PURPOSE OF LOAN. (D) PROOF OF CREDITWORTHINESS AND GENUINENESS OF TR ANSACTION BY FURNISHING CERTIFIED COPY OF BANK ACCOUNT, BANK STA TEMENT, CONTRA ACCOUNT. THE ASSESSEE FILED THE NAMES AND COMPLETE POSTAL AD DRESS WITH PAN, BANK STATEMENTS, ACKNOWLEDGMENT OF RETURN OF INCOME FILED, CONFIRMATION LETTERS/ACCOUNTS, CAPITAL ACCOUNT, PROFIT AND LOSS ACCOUNT AND BALANCE- SHEETS OF ALL THESE DEPOSITORS. THESE DEPOSITORS W ERE ALSO EXAMINED BY AO AND THEIR STATEMENTS WERE ALSO RECORDED. AFTER EXAMINING THE EVIDENCES FILED BY ASSESSEE AND ON THE BASIS OF STA TEMENTS OF THE DEPOSITORS RECORDED BY HIM AO OBSERVED THAT: (1) THE AMOUNT OF LOAN IN QUESTION ARE DEPOSITED IN RESPECTIVE ACCOUNTS OF THE DEPOSITORS JUST BEFORE TRANSACTION OF THE LO AN. (2) THE MONEY DEPOSITED IN THE DEPOSITORS ACCOUNTS WERE IMMEDIATELY TRANSFERRED TO THE ACCOUNT OF THE ASSESSEE. (3) IN MAJORITY OF BANK ACCOUNTS, THERE WAS ONLY A FEW HUNDRED RUPEES THROUGHOUT THE YEAR EXCEPT THE TRANSACTION OF THE D EPOSITORS. (4) THE INCOME OF THE DEPOSITORS WERE SO SMALL AND THEREFORE, THERE IS A POSSIBILITY OF USE OF SUCH ACCOUNTS FOR ROTATING TH E MONEY TO THE ACCOUNTS OF THE ASSESSEE. AND MADE ADDITION OF RS. 2,80,000/- IN THE HANDS OF THE ASSESSEE. I.T.A NO. 764/AHD/2011 A.Y. 2005-06 PAGE NO SMT AMI CHETAN SHAH PROP. OF M/S AMI CONSULTANCY VS . DCIT 4 4. BEFORE LD. CIT(A) THE CONTENTION OF THE ASSESSEE WAS THAT THOUGH THE ASSESSING OFFICER ACCEPTED THE SIMILAR EVIDENCE IN RESPECT OF OTHER SIX PARTIES BUT REJECTED SIMILAR EVIDENCE FURNISHED IN THE CASE OF THESE FOUR PARTIES IN QUESTION. IT WAS ALSO SUBMITTED THAT IN THE SUBSEQUENT YEARS THE LENDERS HAVE TAKEN BACK THEIR LOANS WITH INTEREST B Y ACCOUNT PAYEE CHEQUES WHICH WERE CREDITED TO THEIR BANK ACCOUNTS. THEREFORE, AO WAS NOT JUSTIFIED IN TREATING THE DEPOSITORS AS NON GEN UINE OR DOUBTING THE CREDITWORTHINESS OF THE DEPOSITORS. LD. CIT(A) HOW EVER DIRECTED THE AO TO RESTRICT THE ADDITION TO RS. 2,67,000/- ONLY BECAUS E ACCORDING TO HIM THE LOAN GIVEN BY NITYA CHETAN SHAH OF RS. 13,000/- WAS WELL EXPLAINED. 5. FURTHER AGGRIEVED NOW THE ASSESSEE IS BEFORE US. 6. AT THE TIME OF HEARING BEFORE US LEARNED COUNSEL OF THE ASSESSEE REITERATING THE SUBMISSIONS MADE BEFORE LOWER AUTHO RITIES FURTHER SUBMITTED THAT AO AS WELL AS LD. CIT(A) HAVE TOTALLY IGNORED THE FACT THAT REPAYMENT OF THESE UNSECURED LOANS WAS MADE BY ASSESSEE THROU GH ACCOUNT PAYEE CHEQUES TO THE CONCERNED CREDITORS IN THE SUBSEQUEN T YEARS WHICH CLEARLY ESTABLISHES THE GENUINENESS OF THE TRANSACTIONS. H E THEREFORE PRAYED THAT THE ADDITION OF RS. 2,67,000/- SUSTAINED BY LD. CIT (A) MAY KINDLY BE DELETED. LD. DR HOWEVER ON THE OTHER HAND RELIED O N THE ORDERS OF LOWER AUTHORITIES. 7. AFTER HEARING BOTH THE PARTIES AND PERUSING THE RECORD, WE FIND THAT IN THIS CASE AN ADDITION OF RS. 2,80,000/- HAS BEEN MADE BY THE AO AND SUSTAINED BY LD. CIT(A) TO THE EXTENT OF RS. 2,67,0 00/- ON THE GROUND THAT ASSESSEE FAILED TO EXPLAIN THE SOURCE OF THE SOURCE OF DEPOSITS THEREBY DOUBTING THE GENUINENESS OF THE TRANSACTIONS AND CR EDITWORTHINESS OF THE I.T.A NO. 764/AHD/2011 A.Y. 2005-06 PAGE NO SMT AMI CHETAN SHAH PROP. OF M/S AMI CONSULTANCY VS . DCIT 5 DEPOSITORS. WHILE DOING SO, BOTH THE AUTHORITIES H AVE TOTALLY IGNORED THE VITAL FACT THAT IN SUBSEQUENT YEARS ASSESSEE HAS RE PAID THESE LOANS TO THE CREDITORS WITH INTEREST THROUGH BANKING CHANNELS, T HE DETAILS OF WHICH WERE DULY FILED BY THE ASSESSEE BEFORE THE LOWER AUTHORI TIES AND ARE AVAILABLE IN THE PAPER BOOK FILED BEFORE US. SINCE THESE DETAIL S REQUIRE VERIFICATION AT THE END OF AO, WE ARE OF THE CONSIDERED OPINION THA T THE MATTER BE RESTORED BACK TO THE FILE OF AO FOR FRESH ADJUDICAT ION. IF THE CONTENTION OF THE ASSESSEE THAT LOANS WERE REPAID BY THE ASSESSEE IN SUBSEQUENT YEARS AS PER DETAILS FILED BEFORE US IS FOUND CORRECT, NO ADDITION IS CALLED FOR. WE HOLD ACCORDINGLY. 8. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN OPEN COURT ON THE DATE MENTIONE D HEREINABOVE AT CAPTION PAGE SD/- SD/- (N.S. SAINI) ( D.K. TYAGI) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD : DATED 27/06/2014 AK / COPY OF ORDER FORWARDED TO:- 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER/ , / ,