Shri Kalidas Bhanabhai Patel, Vapi V. Income Tax Officer, Ward-2, Vapi

ITA 834/AHD/2016

• Counselvise Citation: [2018] 118 COUNSELVISE.COM (IT) 2272 (ITAT-SURAT)
• Duration Of Justice: 2 year(s) 3 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-08-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2008-2009
• Appeal Filed On: 04-04-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: R P RASTOGI
• Assessee Lawyers: RAJESH M UPADHYAY ITP
• Keywords: Unexplained cash credit
• Section: 143(3)

Judgement Text

KALIDAS BHANABHAI PATEL VS. ITO, WARD-2, VAPI /I.T.A. NO.834/AHD/2016/SRT/A.Y.:2008-09 PAGE 1 OF 6 , , IN THE INCOME TAX APPELLATE TRIBUNAL SURAT BENCH, SURAT . . , . . , BEFORE SHRI C.M.GARG, JUDICIAL MEMBER AND SHRI O.P.MEENA, ACCOUNTANT MEMBER . . ./I.T.A NO.834/AHD/2016/SRT /ASSESSMENT YEAR : 2008-09 SHRI KALIDAS BHANABHAI PATEL, PROP. OF PATEL ENGINEERING, PLOT NO.784/1, 40, SHED AREA, GIDC, VAPI 396 195. [PAN: AFLPP 5460 M] VS. THE INCOME TAX OFFICER, WARD-2, VAPI. APPELLANT /RESPONDENT /ASSESSEE BY SHRI RAJESH M. UPADHYAY ITP /REVENUE BY SHRI R.P.RASTOGI SR.DR / DATE OF HEARING: 0 1 .0 8 .2018 /PRONOUNCEMENT ON 23 .08. 2018 /O R D E R PER O. P. MEENA, ACCOUTANT MEMBER: 1. THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS), VALSAD (IN SHORT THE CIT (A)) DATED 05.02.2016 PERTAINING TO ASSESSMENT YEAR 2008-09, WHICH IN TURN HAS ARISEN FROM THE ORDER PASSED BY THE INCOME TAX OFFICER, WARD-2, VAPI (IN SHORT THE AO) DATED 27.03.2014 UNDER SECTION 143(3) R.W.S. 254 OF INCOME TAX ACT,1961 (IN SHORT THE ACT). KALIDAS BHANABHAI PATEL VS. ITO, WARD-2, VAPI /I.T.A. NO.834/AHD/2016/SRT/A.Y.:2008-09 PAGE 2 OF 6 2. GROUND NO.1 RELATES TO ADDITION OF RS.21,51,513/- MADE U/S.68 OF THE ACT IGNORING THE EVIDENCES FILED BEFORE THEM AND GROUND NO.2 RELATES TO ADDITION ON ACCOUNT OF FIVE DEPOSITORS BEING DIFFERENCE IN OPENING BALANCE AND IN CASE OF M/S.DELUX RECYCLING INDIA PVT. LTD., WRONG ENTRY OF RS.3,50,000/- CONFIRMED BY THE CREDITOR. 3. BOTH THE ABOVE GROUND RELATES TO ADDITION OF RS.21,51,513/-, HENCE, SAME ARE BEING CONSIDERED TOGETHER WHICH INCLUDES THE QUANTUM OF SECOND GROUND AMOUNT MENTIONED IN THE SECOND GROUND ALSO. 4. BRIEFLY STATED FACTS ARE THAT THE ADDITION OF RS.39,25,386/- WAS MADE U/S.68 OF THE ACT VIDE ORDER U/S.143(3) DATED 22.12.2010. THE ASSESSEE HAS PREFERRED AN APPEAL BEFORE THE CIT(A) WHO HAD ALLOWED THE APPEAL TO THE ASSESSEE. HOWEVER, THE REVENUE HAS FILED APPEAL BEFORE THE ITAT, AHMEDABAD. THE ITAT VIDE ORDER NO.2582/AHD/2011 AND C.O.NO.13/AHD/2012 DATED 31.08.2012 SET- ASIDE THE ORDER TO THE FILE OF THE AO ON THE POINT OF ADDITION BEING UNEXPLAINED CASH CREDIT U/S.68 OF THE ACT TO THE TUNE OF RS.39,25,386/-. IN VIEW OF THIS MATTER, THE AO CONSIDERED THE MATTER AS AFRESH AND ASKED THE ASSESSEE TO RECONCILE THE ENTRIES IN KALIDAS BHANABHAI PATEL VS. ITO, WARD-2, VAPI /I.T.A. NO.834/AHD/2016/SRT/A.Y.:2008-09 PAGE 3 OF 6 RESPECT OF 12 PARTIES AND ACCEPTED THE CONTENTION WITH REGARD TO ONE PARTY I.E. OM VINAYLS PVT LTD., AMOUNTING RS.61,35,070/-. HOWEVER, SINCE THE ASSESSEE COULD NOT RECONCILE THE BALANCES, AS PER ASSESSEES BOOKS AND THE BALANCES AS PER PARTIES BOOKS. THEREFORE, THE DIFFERENCE OF RS.21,51,513/- IN RESPECT OF 11 (ELEVEN) PERSONS WAS ADDED TO THE TOTAL INCOME. 5. BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTER BEFORE THE LD.CIT(A), WHEREIN IT WAS CLAIMED THAT M/S.DELUX RECYCLING INDIA PVT. LTD. HAS NOT MADE PAYMENT OF RS.3,50,000/- TO THE APPELLANT, HENCE, SAME IS NOT CREDITED IN THE BOOKS OF APPELLANT. HOWEVER, THE CIT(A) OBSERVED THAT THE ASSESSEE HAS BEEN ALLOWED SUFFICIENT OPPORTUNITY TO RECONCILE THE DIFFERENCE AND AFTER CONSIDERING THE REPLY OF THE APPELLANT, THE ADDITION WAS REDUCED FROM RS.39,25,386/- TO RS.21,51,513/-. THIS ITSELF WAS NOT RECONCILED BY THE ASSESSEE. THEREFORE, THE EXPLANATION BEFORE HIM COULD NOT BE ACCEPTED, BECAUSE A NUMBER OF OPPORTUNITIES WERE GIVEN TO THE ASSESSEE BY THE AO. THEREFORE, THE ADDITIONS OF RS.21,51,513/- WAS SUSTAINED. 6. BEING AGGRIEVED, THE ASSESSEE HAS FILED THIS APPEAL BEFORE THIS TRIBUNAL. THE LD.COUNSEL SUBMITTED THAT IN THE CASE OF M/S.DELUX KALIDAS BHANABHAI PATEL VS. ITO, WARD-2, VAPI /I.T.A. NO.834/AHD/2016/SRT/A.Y.:2008-09 PAGE 4 OF 6 RECYCLING INDIA PVT. LTD., THE DIFFERENCE OF RS.3,50,000/- STANDS RECONCILED, BECAUSE THIS PARTY HAS CONFIRMED THAT THIS BALANCE WAS SHOWN THROUGH MISTAKE. IN SUPPORT OF THIS, THE ASSESSEE HAS FILED LEDGER ACCOUNT AND COPY OF CONFIRMATION AT PAGE NO.37 AND 38 OF THE PAPER BOOK CONFIRMING THAT THE PAYMENT OF RS.3,50,000/- DATED 06.02.2008 DEBITED IN THE ACCOUNT OF PATEL ENGINEERS BY MISTAKE. WITH REGARD TO FOUR PARTIES NAMELY KUSUMGAR CORPORATES RS.36,850/-, SHALIMAR REXINE INDIA LTD., RS.1,29,327/-, SUVARNA PROCESSORS RS.27,870/- AND VAJINATH BHAV DARSHAN RS.27,220/-. IT WAS CLAIMED THAT THE ADDITION WAS MADE ON ACCOUNT OF NON- RECONCILIATION OF OPENING BALANCE OF THESE PARTIES WHICH CANNOT BE ADDED U/S.68 OF THE ACT. AS REGARDS OTHERS, IT WAS SUBMITTED THAT THE ASSESSEE HAS FILED RECONCILIATION. HENCE, THE AO WAS NOT JUSTIFIED IN MAKING ADDITION. 7. PER CONTRA, THE LEARNED SENIOR DEPARTMENTAL REPRESENTATIVE (SR.DR) SUBMITTED THAT THE ASSESSEE HAS FAILED TO RECONCILE THE DIFFERENCES OF AMOUNTS IN RESPECT 11 (ELEVEN) PARTIES EVEN THOUGH NUMBER OF OPPORTUNITIES ALLOWED TO THE ASSESSEE IN THE SET-ASIDE PROCEEDINGS BY THE AO. IN SOME CASE, NOTICE ISSUED U/S.133(6) OF THE ACT WHEREIN THE PARTIES HAVE SHOWN DIFFERENCE BALANCES WHICH KALIDAS BHANABHAI PATEL VS. ITO, WARD-2, VAPI /I.T.A. NO.834/AHD/2016/SRT/A.Y.:2008-09 PAGE 5 OF 6 IS NOT TALLYING WITH THE BALANCES SHOWN BY THE ASSESSEE. THEREFORE, THE LOWER AUTHORITIES ARE JUSTIFIED IN MAKING THE ADDITION. 8. WE HAVE CONSIDERED THE FACTS AND HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. WITH REGARD TO M/S.DELUX RECYCLING INDIA PVT. LTD., THERE IS A DIFFERENCE OF RS.3,50,000/-. THE ASSESSEE HAS FURNISHED COPY OF LEDGER ACCOUNTS AND LETTER [PB-38] FROM THE SAID PARTIES BEFORE THE CIT(A) STATING THAT THE PAYMENT OF RS.3,50,000/- DATED 06.06.2008 IN THE ACCOUNT OF ASSESSEE WAS DEBITED BY MISTAKE, FURTHER SUCH PAYMENT HAS BEEN MADE BY CHEQUE WHICH IS NOT REFLECTED IN THE ASSESSEES BANK ACCOUNT ALSO AND THEREFORE, IN SUCH CIRCUMSTANCES ALSO, IT CANNOT BE SAID THAT THE ASSESSEE HAS RECEIVED THIS AMOUNT OF RS.3,50,000/- FROM M/S.DELUX RECYCLING INDIA PVT. LTD. HENCE, THE ADDITION MADE ON THIS ACCOUNT IS DESERVED TO BE DELETED. ACCORDINGLY SAME IS DIRECTED TO BE DELETED. 9. WITH REGARD TO ADDITION IN RESPECT OF BALANCE 10 PERSONS IS CONCERNED, WE FIND THAT THE ASSESSEE IS NOT ABLE TO RECONCILE THE DIFFERENCES, WHERE IT IS AN OPENING BALANCE OR DURING THE YEAR AND FURTHER ALSO THE REPLY RECEIVED FROM THESE PARTIES IN RESPONSE TO NOTICE U/S.133(6) SHOWS THE BALANCE WHICH IS NOT TALLYING WITH THE KALIDAS BHANABHAI PATEL VS. ITO, WARD-2, VAPI /I.T.A. NO.834/AHD/2016/SRT/A.Y.:2008-09 PAGE 6 OF 6 COPY OF ACCOUNTS IN THE BOOKS OF THE ASSESSEE. THEREFORE, WE ARE NOT INCLINED TO ACCEPT THE SUBMISSIONS OF THE LD.AUTHORISED REPRESENTATIVE, ACCORDINGLY THE SAME IS UPHELD. IN VIEW OF THESE FACTS, THE GROUND NO.1 AND 2 ARE PARTLY ALLOWED. 10. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. 11. THE ORDER PRONOUNCED IN THE OPEN COURT ON 23-08-2018. SD/- SD/- ( . . /C.M. GARG) ( . . / O.P.MEENA) /JUDICIAL MEMBER /ACCOUNTANT MEMBER / SURAT, DATED : 23 RD AUG , 2018/ S.GANGADHARA RAO, SR.PS COPY OF ORDER SENT TO- ASSESSEE/AO/PR. CIT/ CIT (A)/ ITAT (DR)/GUARD FILE OF ITAT. BY ORDER / / TRUE COPY / / ASSISTANT REGISTRAR, SURAT