THE ITO, - 2(4), Indore V. M/s. Prithvi Construction, Indore

ITA 784/IND/2016

• Counselvise Citation: [2018] 124 COUNSELVISE.COM (IT) 9874 (ITAT-INDORE)
• Duration Of Justice: 2 year(s) 2 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-09-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2010-2011
• Appeal Filed On: 15-07-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P K MITRA
• Assessee Lawyers: S S DESH
• Keywords: Unexplained cash credit
• Section: 142(1); 68; 148

Judgement Text

PRITHVI CONSTRUCTION I.T.A. NO. 784/IND/16 , , IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER ITA NO.784/IND/2016 ASSESSMENT YEAR:2010-11 ITO 2(4) , INDORE / VS. M/ S. PRITHVI CONSTRUCTIO N, 80 PALSIKAR COLONY, INDORE (REVENUE) (RESPONDENT ) P.A. NO. AAJFP4935C REVENUE BY SHRI P.K.MI T RA , SR. DR RESPONDENT BY SHRI S.S. DESHPANDE, CA DATE OF HEARING: 11.09 .201 8 DATE OF PRONOUNCEMENT: 25 .09 .201 8 / O R D E R PER MANISH BORAD, A.M: THIS APPEAL FILED AT THE INSTANCE OF REVENUE PERTAI NING TO A.Y. 2010- 11 IS DIRECTED AGAINST THE ORDER OF LD. COMMISSIONE R OF INCOME TAX(APPEALS)-I, INDORE, (IN SHORT CIT(A)), VIDE A PPEAL NO. IT- 131/2014-15 ORDER DATED 04.03.2016 WHICH IS ARISING OUT OF THE ORDER U/S 143(3)/147 OF THE INCOME TAX ACT 1961(HER EINAFTER CALLED AS THE ACT) FRAMED ON 26.03.2014 BY ITO, 3(2), I NDORE. PRITHVI CONSTRUCTION I.T.A. NO. 784/IND/16 2 2. THE REVENUE HAS RAISED FOLLOWING GROUNDS OF APPE AL: 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE, THE LD. CIT(A) HAS ERRED IN LAW BY ALLOWING THE APPEAL OF T HE ASSESSEE WITHOUT APPRECIATING THE FINDINGS OF THE A.O 2. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN LAW IN DELETING THE ADDITION OF RS.90, 85,000/- MADE BY THE AO U/S 68 OF I.T ACT WHILE THE ASSESSEE FAILED TO P ROOF THE IDENTITY, GENUINENESS AND CREDITWORTHINESS OF THE CUSTOMERS F ROM WHOM THE SAME AMOUNT IN GROSS WAS TAKEN IN ADVANCE BY THE VERY SA ME ASSESSEE. 3. BRIEFLY STATED FACTS AS CULLED OUT FROM THE RECO RDS ARE THAT THE ASSESSEE IS A PARTNERSHIP FIRM ENGAGED IN THE BUSI NESS OF CONSTRUCTION OF RESIDENTIAL HOUSE/FLATS. LOSS OF RS .6725/- WAS SHOWN IN THE INCOME TAX RETURN FILED ON 5.12.2013 I N RESPONSE TO THE NOTICE ISSUED U/S 148 OF THE ACT DATED 18.07.20 12. AFTER RECORDING THE REASONS CASE TOOK UP FOR SCRUTINY AND NOTICES U/S 143(2) AND 142(1) OF THE ACT WERE SERVED UPON THE A SSESSEE. DURING THE COURSE OF ASSESSMENT PROCEEDINGS WHILE EXAMININ G THE BALANCE PRITHVI CONSTRUCTION I.T.A. NO. 784/IND/16 3 SHEET, LD A.O OBSERVED THAT ADVANCE AGAINST BOOKING OF RS.90,85,000/- HAS BEEN SHOWN ON LIABILITY SIDE. I NFORMATION WAS CALLED FOR GIVING THE NAMES AND ADDRESSES OF THE PE RSONS GIVING THE ADVANCES. CONFIRMATION LETTERS WERE FILED BUT THE C OPIES OF INCOME TAX RETURN AND BANK STATEMENT WERE NOT FURNISHED. AS A RESULT THE ALLEGED BOOKING ADVANCE CREDITED AS UNEXPLAINED CAS H CREDIT AND ADDED TO THE INCOME OF THE ASSESSEE. LD.A.O ACCORDI NGLY ADDED THE AMOUNT OF RS.90,85,000/- TO THE INCOME AND COMPLET ED THE ASSESSMENT U/S 143(3)/147 OF THE I.T. ACT. 4. AGGRIEVED ASSESSEE FILED AN APPEAL BEFORE THE LD . CIT(A) AND SUCCEEDED. 5. AGGRIEVED REVENUE IS NOW IN APPEAL BEFORE THE T RIBUNAL. 6. THE LD. DEPARTMENTAL REPRESENTATIVE VEHEMENTLY A RGUED SUPPORTING THE FINDINGS OF LD. ASSESSING OFFICER. 7. PER CONTRA THE LD. COUNSEL FOR THE ASSESSEE RELI ED ON THE FINDINGS OF LD. CIT(A) AND ALSO SUBMITTED THAT THE ALLEGED SUM OF RS.90,85,000/- HAVE BEEN DULY EXPLAINED BEFORE THE FIRST APPELLATE PRITHVI CONSTRUCTION I.T.A. NO. 784/IND/16 4 AUTHORITY AND THE IDENTITY, GENUINENESS AND CREDITW ORTHINESS HAS NOT BEEN DOUBTED BY LD.CIT(A). 8. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE RECORD BEFORE US. REVENUES SOLE GRIEVANCE IS AGAINST THE FINDIN GS OF LD.CIT(A) DELETING THE ADDITION OF RS.90,85,000/- MADE BY THE LD. ASSESSING OFFICER U/S 68 OF THE ACT. 9. WE FIND THAT THE LD.CIT(A) HAD DECIDED IN FAVOUR OF THE ASSESSEE AND DELETED THE ADDITION U/S 68 OF THE ACT OF RS.90 ,85,000/- OBSERVING AS FOLLOWS; 5. GROUND NO.1 TO 3: BY THESE GROUNDS THE APPELLANT HAS CONTENDED THAT THE ORDER IS ERRONEOUS, ARBITRARY AN D HAS BEEN PASSED WITHOUT CONSIDERING THE FACTS PLACED ON RECORD AND HENCE IS BAD IN LAW AND DESERVES TO BE QUASHED. THE DETAILED FACTS AS PER THE ASSESSMENT ORDER ARE REPR ODUCED AT PARA NO. 2 ABOVE AND THE DETAILED SUBMISSIONS OF THE APPELLANT ARE REPRODUCED AT PARA NO.3 ABOVE. 5.L FROM THE ORDER IT IS SEEN THAT AS PER INFORMATION AVAILABLE WITH THE AO DURING THE YEAR THE APPELLANT HAD PURCHASED A PROPERTY WORTH RS. 5719500/- BUT NO RETURN OF INCOME WAS FILED. THE AO THEREFORE ISSUED NOTICE U/ S 148 OF THE ACT IN RESPONSE TO WHICH THE APPELLANT FILED RET URN OF INCOME. PRITHVI CONSTRUCTION I.T.A. NO. 784/IND/16 5 DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE AO CALLED FOR THE DETAILS OF RS. 9085000/- SHOWN AS ADVANCE AGAINST BOOKING. THE APPELLANT SUBMITTED THE CONFIRMATIONS AND COPIES OF SALE AGREEMENTS. AO NOTED THAT THE BOOKING AMOUNT WAS RECEIVED IN CASH AND ASKED THE APPELLANT TO FILE COPIES OF BANK STATEMENTS RETURNS FILED OF THE PERSO NS FROM WHOM THE BOOKING ADVANCE WAS RECEIVED AND ASKED THE APPELLANT TO PRODUCE THEM FOR VERIFICATION. THE AO REMARKED THAT THE APPELLANT FAILED TO PRODUCE THEM AND AS TH E INVESTMENT OF RS. 5719500/- IN PURCHASE OF PROPERTY WAS MADE OUT OF THE ABOVE REFERRED BOOKING ADVANCES ADD ED THE AMOUNT OF RS.9085000/- U/S 68 OF THE-ACT. DURING TH E COURSE OF APPELLATE PROCEEDINGS THE APPELLANT STATED THAT THE BOOKING ADVANCES WERE RECEIVED FROM 13 PERSONS AND LIST OF THE THIR TEEN PERSONS WAS SUBMITTED. IT WAS POINTED OUT THAT OUT OF THIRTEEN PERSONS THE ADVANCE RECEIVED FROM NINE PER SONS WAS BOOKED AS SALE IN THE SUBSEQUENT YEAR AND COPY OF SALE DEED WAS ALSO FILED BEFORE THE AO. OUT OF THE 13 PERSONS IN CASE OF 2 PERSONS NAMELY BHARAT SHAH AND DEEPAK SHAH THE AMOU NT WAS NOT RECEIVED IN THE YEAR UNDER CONSIDERATION BU T WAS RECEIVED IN THE PRECEDING YEAR. THE SAME WAS ALSO R ETURNED BACK THROUGH BANKING CHANNEL IN THE SUBSEQUENT YEAR . IN RESPECT OF ROHAN BUILDING SYSTEM PVT. LTD. THE ADVA NCE WAS AGAINST CONTRACT WORK ON WHICH TDS WAS DEDUCTED. IN RESPECT OF MEENA DADWANI THE AMOUNT WAS RECEIVED BUT RETURN ED BACK IN THE SUBSEQUENT YEAR. CONFIRMATION OF ACCOUN TS AND SALE DEEDS WERE FILED. THE APPELLANT ALSO STATED TH AT THE PERSONS FROM WHOM THE ADVANCE WAS RECEIVED WERE THE PRITHVI CONSTRUCTION I.T.A. NO. 784/IND/16 6 CUSTOMERS OF THE APPELLANT AND IT HAD NO AUTHORITY TO ENFORCE THEIR ATTENDANCE BEFORE THE AO. IT WAS ALSO POINTED OUT THAT CONFIRMATIONS WERE PRODUCED AS ALSO WHERE SALES WER E MADE THE COPIES OF REGISTRIES WERE ALSO PRODUCED BEFORE THE AO HOWEVER THE AO DID NOT TAKE ANY COGNIZANCE OF THE S AME. IN VIEW OF THE FACT THAT THE APPELLANT HAD SUBMITTED C OMPLETE DETAILS WITH PAN AND ADDRESSEES AND ALSO CONFIRMATI ONS AND COPIES OF REGISTERED DEEDS WHICH WERE AGAIN SUBMITT ED DURING THE COURSE OF APPELLATE PROCEEDINGS THE SUBMISSIONS OF THE APPELLANT WERE FORWARDED TO THE AO VIDE THIS OFFICE LETTER F.NO. CIT(A)-I/IND./2015-16 DATED 29.09.2015 FOR SUBMITTI NG REPORT/COMMENTS ON THE EVIDENCES FILED BY THE APPEL LANT. A REMINDER VIDE LETTER DATED 10/12/2015 WAS ALSO SENT FOR EARLY SUBMISSION OF REPORT HOWEVER NO REPORT HAS BEEN RECEIVED FROM THE AO TILL DATE. 5.2 CONSIDERING THE ENTIRE CONSPECTUS OF FACTS AS DETAI LED ABOVE IT IS SEEN THAT THE APPELLANT HAD DISCHARGED THE ONUS ON HIM BY SUBMITTING THE DETAILS WITH ADDRESSES AND ALSO COPIES OF ACCOUNTS AND CONFIRMATIONS AS WELL AS COPIES OF REGISTRIES EVIDENCING THE SALE THUS ESTABLISHING THE VERACITY OF THE APPELLANT'S EXPLANATION. THE AO HAS NOT BROUGHT ANY MATERIAL ON RECORD TO DISPROVE THE AVERMENTS MADE BY THE APP ELLANT. AO HAS ALSO NOT TAKEN NOTE OF THE FACT THAT IN RESPECT OF SHRI BHARAT SHAH AND SHRI DEEPAK SHAH NO AMOUNTS WERE RE CEIVED IN THIS YEAR AND HENCE THE ADVANCE FROM THESE PERSO NS COULD NOT BE CONSIDERED AS UNEXPLAINED CREDIT U/ S 68 IN THIS YEAR. IN VIEW OF THE ABOVE IT IS SEEN THAT ALTHOUGH THERE IS NO LEGAL INFIRMITY TO HOLD THAT THE ORDER WAS LIABLE TO BE Q UASHED YET THE PRITHVI CONSTRUCTION I.T.A. NO. 784/IND/16 7 AO HAS PASSED THE ORDER WITHOUT CONSIDERING THE MAT ERIAL PLACED ON RECORD AS THERE IS NO BASIS FOR CONCLUDIN G THAT THE ADVANCE OF RS. 9085000/- RECEIVED AGAINST BOOKINGS WAS AN UNEXPLAINED CASH CREDIT WITHIN THE SCOPE OF SECTION 68 OF THE ACT. THE ORDER OF THE AO THEREFORE CANNOT BE UPHELD . THE ADDITION OF RS. 9085000/- IS THEREFORE DIRECTED TO BE DELETED. THESE GROUNDS OF THE APPELLANT ARE THEREFORE ALLOWE D. - RS.9085000/- DELETED 10. THE DETAILED FINDINGS OF LD.CIT(A) COULD NOT BE CONTROVERTED BY THE DEPARTMENTAL REPRESENTATIVE. THERE IS NO DOUBT TO THE FACT THAT THE ASSESSEE HAS SUCCESSFULLY DISCHARGED THE ONUS O F EXPLAINING THE ALLEGED CASH CREDIT IN THE SHAPE OF BOOKING ADVANCE S BY WAY OF PROVIDING NAMES, ADDRESSES, CONFIRMATION OF AMOUNT, COPIES OF SALE DEEDS DEMONSTRATING THAT THE BOOKING ADVANCES HAVE BEEN ADJUSTED AGAINST THE SALE CONSIDERATION. NO OTHER MATERIAL HAVE BEEN BROUGHT ON RECORD. DOCUMENT FILED BY THE ASSESSEE ARE SUFFICIENT TO PROVE THE IDENTITY, GENUINENESS AND CREDITWORTHINES S OF THE BOOKING ADVANCES OF RS.90,85,000/-. NO INTERFERENCE THEREF ORE IS CALLED FOR IN THE FINDINGS OF LD.CIT(A). GROUND NO. 1 AND 2 O F THE REVENUE ARE DISMISSED. PRITHVI CONSTRUCTION I.T.A. NO. 784/IND/16 8 11. IN THE RESULT THE APPEAL OF THE REVENUE IS DI SMISSED. ORDER WAS PRONOUNCED IN THE OPEN COURT ON 25.09.20 18. SD/- SD/- (KUL BHARAT) (MANISH BORAD) JUDICIALMEMBER ACCOUNTANTMEMBER INDORE; DATED : 25/09/2018 /DEV COPY TO: ASSESSEE/AO/PR. CIT/ CIT (A)/ITAT (DR)/GUA RD FILE. BY ORDER PRIVATE SECRETARY/DDO, INDORE