THE DY. CIT- 1, DURG(CG) V. SHRI RAKESH CHOPRA, BHILAI(CG)

ITA 82/BIL/2013

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 9086 (ITAT-RAIPUR)
• Duration Of Justice: 3 year(s) 8 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-05-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2010-2011
• Appeal Filed On: 16-08-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S R RAO
• Keywords: Unexplained cash credit; Unexplained investment; Assessment record
• Section: 143(3); 68; 69

Judgement Text

1 INCOME TAX APPELLATE TRIBUNAL RAIPUR BENCH RAIPUR BEFORE SHRI N.S. SAINI , ACCOUNTANT MEMBER AND SHRI GEORGE GEORGE K. , JUDICIAL MEMBER ITA NO.: - 82 / RPR /201 3 ASSESSMENT YEAR: 20 10 - 11 SHRI RAKESH CHOPRA, H.NO. 435, NEW KHURSIPAR, BHILAI PAN ABZPC 3488 L VS DCIT, 32/32, BUNGLOWS, BHILAI C.O. NO. 16/RPR/2013 [ITA NO.: - 82/RPR/2013] ASSESSMENT YEAR: 2010 - 11 DCIT, 32/32, BUNGLOWS, BHILAI VS SHRI RAKESH CHOPRA, H.NO. 435, NEW KHURSIPAR, BHILAI PAN ABZPC 3488 (RESPONDENT) (APPELLANT) SHRI P.K. MISHRA, DR REVENUE BY SHRI S.R. RAO , A.R. ASSESSEE BY 01 / 05 /201 7 DATE OF HEARING 02 / 05 /201 7 DATE OF PRONOUNCEMENT O R D E R PER: GEORGE GEORGE K., J.M.: 1. THIS APPEAL BY THE REVENUE AND THE CROSS OBJECTION BY THE ASSESSEE HAS BEEN FILED AGAINST THE ORDER OF THE CIT (A) - RAIPUR DATED 24.05.2013. THE RELEVANT ASSESSMENT YEAR IS 2010 - 11 . 2 2. THE ASSESSEE HAS RAISED THREE EFFECTIVE GROUNDS. ALL THE GROUNDS RELATE TO AGGREGA TE ADDITION OF RS. 3,56,92,234/ - , BEING ADDITION OF RS.1,79,46,120/ - AS UNEXPLAINED INVESTMENT U/S 69 OF THE INCOME TAX ACT, 1961 (FOR SHORT THE ACT), UNEXPLAINED CASH CREDIT U/S 68 OF THE ACT AMOUNTING TO RS. 1,75,05,633.11 AND AMOUNT OF INTEREST INCOME NOT DISCLOSED AMOUNTING TO RS.2,40,481/ - . 3. BRIEFLY STATED, THE FACTS OF THE CASE ARE AS UNDER: THE ASSESSEE IS AN INDIVIDUAL. HE IS HAVING INTEREST AND REMUNERATION FROM PARTNERSHIP FIRM M/S ADIT ISPAT, AND ALSO BANK INTEREST ASSESSED AS INCOME FROM OTHER SOURCES. F OR THE AY 2010 - 11 , THE RETURN OF INCOME WAS FILED ON 22.03.2011, DECLARING TOTAL INCOME OF RS.13,99,070/ - . THE ASSESSMENT U/S 143(3) OF THE ACT WAS COMPLETED AT RS.3,70,91,300/ - . THE ENHANCEMENT OF THE RETURN OF INCOME WAS ON ACCOUNT OF UNE XPLAINED CASH DEPOSITS AND ACCRUED BANK INTEREST IN ASSESSEES BANK ACCOUNT. THE A SSESSING OFFICER WHILE MAKING ADDITION HAD REJECTED ASSESSEE S CONTENTION THAT THESE ARE BANK ACCOUNTS THOUGH IN THE NAME OF THE ASSESSEE IS ACTUALLY OPERATE D FOR THE FIRM M/ S MAHAVIR VENTURES . 4. AGGRIEVED BY THE ASSESSMENT ORDER, THE ASSESSEE FILED AN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY. IT WAS SUBMITTED BEFORE THE FIRST APPELLATE AUTHORITY THAT ASSESSEE AND HIS WIFE ARE PARTNERS IN A FIRM NAMED M/S MAHAVIR VENTURES AND ON THE BASIS OF UNDERSTANDING BETWEEN OTHER PARTNERS THE BANK ACCOUNT S WAS OPENED IN THE NAME OF ASSESSEE FOR THE BUSINESS ACTIVITIES OF THE FIRM. I T WAS STATED THAT ALL THE TRANSACTION IN THE SAID BANK ACCOUNTS BELONG TO THE PARTNERSHIP FIRM AND THE PARTNERSHIP FIRM HAS FILED RETURN OF INCOME , WHICH WAS DULY CONFIRMED BY THE ASSESSING OFFICER OF THE PARTNERSHIPS FIRM, NAMELY, M/S MAHAVIR VENTURES LTD. THE CIT(A) ALLOWED THE APPEAL OF THE ASSESSEE. THE RELEVANT OBSERVATION OF THE CIT(A) READS AS FOLL OWS: - I HAVE GONE THROUGH THE OBSERVATIONS OF THE AO, SUBMISSIONS OF THE APPELLANT AND PERUSED THE ASSESSMENT RECORDS. THE AO HAS MADE 3 THE IMPUGNED ADDITIONS ON THE GROUND THAT THE AMOUNTS DEPOSITED IN THE BANK ACCOUNTS AVAILABLE IN THE APPELLANTS NAME WERE NOT EXPLAINED AND WHILE COMING TO SUCH CONCLUSIONS, THE AO HAS REJECTED THE APPELLANTS SUBMISSIONS THAT THE BANK ACCOUNTS WERE DEDI CATED TO PARTNERSHIP FIRM M/S MAHAVIR VENTRUES AND IT HAS EXCLUSIVELY USED THE ACCOUNT FOR ITS BUSINESS ACTIVITIES AND ALL THE TRANSACTIONS ARE REFLECTED IN ITS BOOKS OF ACCOUNT. THE MAIN REASON FOR REJECTING THE APPELLANTS EXPLANATION WAS THAT, AS PER TH E AO, THE APPELLANT HAS INITIALLY OWNED THE ACCOUNTS AND LATER ON CHANGED THE VERSION. HOWEVER, PERUSAL OF THE REPLY REPRODUCED IN THE ASSESSMENT ORDER DOES NOT SHOW THAT THE APPELLANT HAS MADE SUCH ACCEPTANCE AS INFERRED BY THE AO. THE PRIMARY FACTS THAT THE ACCOUNTS WREE USED BY THE FIRM AND THE TRANSACTIONS RELATE TO THE FIRM REMAINED UNCONTROVERTED. THE CONTENTION THAT THE FIRM M/S MAHAVIR VENTURES, JAGDALPUR HAS FILED ITS RETURN OF INCOME BEFORE THE INCOME TAX OFFICER, JAGDALPUR HAS BEEN ENQUIRED INTO DURING APPEAL PROCEEDINGS AFTER CALLING FOR THE RECORDS FROM THE SAID A.O. AND IT WAS FOUND TO BE CORRECT. THE FIRM HAS FILED ITS RETURN FOR AYR, 2010 - 11 VIDE ACKNOWLEDGEMENT NO.0241016874 ON 31.03.2011. PART - A (3 - A(III) (B) OF THE RETURN, GIVING BALANCE S HEET PARTICULARS AS ON 31.03.2010, SHOWS THE CLOSING BALANCE WITH THE B ANK AT RS.3,10,79,118/ - . THE AOS RECORDS SHOW THAT HE HAD ALSO OBTAINED COPY OF THE INCOME TAX RETURN OF THE FIRM FROM THE INCOME TAX OFFICER, JAGDALPUR, THE BALANCE SHEET OF THE FIRM SHOWING THE BANK BALANCE UNDER CONSIDERATION WAS FILED BEFORE THE AO. THUS, THE DISPUTED BANK ACCOUNTS ARE DULY REFLECTED IN THE FIRMS CASE. UNDER THESE CIRCUMSTANCES, THE APPELLANT HAS SUBSTANTIATED BEYOND MY SHRED OF DOUBT THAT THE SAID BANK ACCOUNTS, T HOUGH AVAILABLE IN HIS NAME, WERE USED BY THE FIRM AND ARE DULY REFLECTED IN ITS BOOKS OF ACCOUNTS AND FINANCIAL STATEMENTS. THEREFORE, THE AO IS NOT CORRECT IN MAKING THE ADDITION WITHOUT CONSIDERING THESE FACTS. FURTHER, IN THE COURSE OF ASSESSMENT PROCE EDINGS, THE APPELLANT HAS FILED CONFIRMATIONS OF THE PARTNERS AFFIRMING THEIR CAPITAL CONTRIBUTION CREDITED IN THE FIRM ACCOUNTS. ALL THESE PARTNERS ARE INCOME TAX ASSESSEES AND THEY HAD OWNED THE TRANSACTIONS MADE IN THEIR ACCOUNTS AND THE AO HAS NO RESER VATIONS REGARDING THE SOURCE OF DEPOSITS. THE OTHER OBSERVATIONS MADE BY THE AO ARE SOLELY BASED IN SUSPICION WITHOUT ANY DEPENDABLE MATERIAL AND IT IS SETTLED LAW THAT NO ADDITION IS POSSIBLE ON MERE SUSPICION. THEREFORE, I AM OF THE CONSIDERED OPINION T HAT THE ADDITION MADE BY THE AO IS NOT SUSTAINABLE, HENCE, DELETED. THESE GROUNDS OF APPEAL ARE, ACCORDINGLY, ALLOWED. 5 . AGGRIEVED BY THE ORDER OF THE CIT(A) , THE REVENUE IS IN APPEAL BEFORE TRIBUNAL AND THE ASSESSEE HAS FILED THE CROSS OBJECTION SUPP ORTING THE FINDINGS/CONCLUSION OF THE CIT(A). THE LD. DR STRONGLY RELIED ON THE FINDING OF THE ASSESSING OFFICER WHEREAS THE LD. 4 AUTHORIZED REPRESENTATIVE OF THE ASSESSEE REITERATED THE SUBMISSION MADE BEFORE THE INCOME TAX AUTHORITY AND RELIED ON THE CONC LUSION/FINDINGS OF THE CIT(A). 6 . WE HAVE HEARD THE RIVAL SUBMISSIONS AN D PERUSED THE RELEVANT MATERIAL ON RECORD . THE ASSESSEE AND SEVEN OTHER PERSONS HAD FORMED A FIRM BY THE NAME M/S MAHAVIR VENTURES , JAGDALPUR . THE PARTNERS MUTUALLY DECIDED TO OPEN AN ACCOUNT IN THE NAME OF THE ASSESSEE AND HIS WIFE , WHICH WAS DEDICATED TO THE FIRM M/S MAHAVIR VENTURES. THIS FACT IS ADMITTEDLY BORN OUT FROM THE RECONSTITUTE PARTNERSHIP DE ED , WHICH IS PLACED ON RECORD IN THE PAPER BOOK FILED BY THE ASSESSEE. THE PARTNERSHIP F IRM FOR THE RELEVANT YEAR HAD FILED THE RETURN OF INCOME AND THE BALANCE SHEET FILED ALONG WITH THE RETURN OF INCOME , SHOW CLOSING BALANCE WITH THE BANK AT RS. 3,0 5,33,790.41 , SUNDRY DEBTORS AT RS. 4,71,344 / - AND CASH IN HAND RS.73,98 3 / - . THIS FACT IS BEING ADMITTED BY THE A SSESSING OFFICER OF THE PARTNERSHIPS FIRM. ALL THE PARTNER S HAVE ADMITTED THAT ENTRIES IN THE BANK ACCOUNT BELONG TO THE FIRM . THE SOURCE OF INVESTMENT WAS SUBSTANTIATED BY THE PARTNERS WHICH WAS CONFIRMED BY THE AO OF THE FIRM . THE A SSESSING OFFICER , WHILE DISBELIEVING THAT THE BANKS ACCOUNTS DOES NOT BELONGS TO THE PARTNERSHIP FIRM HA D NOT ACTUALLY DISPUTED THE SOURCE OF DEPOSITS. FROM EXAMINATION OF RECORD, IT IS EVIDENTLY CLEAR THAT THE IMPUGNED BANK ACCOUNTS WERE USED BY THE FIRM AND THE TRANSACTION S RELATES TO THE FIRM . T HE TRANSACTIONS IN THE BANK ACCOUNT HAVE BEEN DULY CONFIRMED BY THE PARTNERS AND BALANCE SHEET OF FIRM CLEARLY DEPICT CLOSING BALANCE OF RS.3,05,33,790.41. MOREOVER THE CATEGORIC FINDING BY THE C IT(A) THAT THESE BANK ACCOUNTS ARE DEDICATED TO THE PARTNERSHIP FIRM AND NOT OF THE ASSESSEE , HAS NOT BEEN DISPELLED BY THE REVENUE BY PLACING ANY CONTRARY MATERIAL ON RECORD . THEREFORE , WE ARE OF THE VIEW THAT THE ORDER OF THE CIT( A) IS CORRECT AND IN ACCORDANCE WITH LAW AND NO INTERFERENCE IS CALLED FOR. IT IS ORDERED ACCORDINGLY. 5 7 . IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. CO NO. 16/RPR/2013 8 . SINCE THE APPEAL FILED BY THE REVENUE, IS DISMISSED , THE CROSS OBJECTION WH ICH IS SUPPORTING THE CONCLUSION/FINDING OF THE CIT(A) HAS BECOME INFRUCTUOUS AND SAME IS DISMISSED AS SUCH. 9 . IN THE RESULT, APPEAL FILED BY THE REVENUE AND CROSS OBJECTION OF THE ASSESSEE STAND DISMISSED. (ORDER WAS PRONOUNCED IN THE OPEN COURT ON 02 . 05.2017 ) SD/ - SD/ - ( N.S. SAINI ) ( GEORGE GEORGE K. ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 02 / 05 /201 7 AKS COPY OF THE ORDER FORWARDED TO : COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR