M/s. Sheetal Developers, Vapi V. The ACIT.,Cent.Circle-1, Surat

ITA 869/AHD/2012

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 94695 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 6 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-11-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 16-11-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 19-04-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: LALA PHILIPSSR
• Keywords: Unexplained cash credit; Source of fund; Corroborative evidences
• Section: 68

Judgement Text

, C IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER ./ ITA NO.869/AHD/2012 /BLOCK ASSTT. YEAR: 2008-2009 M/S.SHEETAL DEVELOPERS H.S. SHAH COMPOUND SILVASSA, SURAT. VS ACIT, CENT.CIR.1 SURAT. %& / (APPELLANT) '( %& / (RESPONDENT) ASSESSEE BY : SHRI TEJ SHAH REVENUE BY : SHRI LALA PHILIPS,SR.DR / DATE OF HEARING : 16/11/2015 / DATE OF PRONOUNCEMENT: 17/11/2015 )*/ O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER: THE ASSESSEE IS IN APPEAL BEFORE US AGAINST THE OR DER OF LD.CIT(A)- II, AHMEDABAD DATED 9.2.2012 PASSED FOR THE ASSTT.Y EAR 2008-09. 2. SOLITARY GRIEVANCE OF THE ASSESSEE IS THAT THE L D.FIRST APPELLATE AUTHORITY HAS ERRED IN CONFIRMING THE ADDITION OF R S.4,15,746/- WHICH WAS ADDED BY THE AO WITH THE AID OF SECTION 68 OF T HE INCOME TAX ACT. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A FIRM. IT HAS FILED ITS RETURN OF INCOME ON 19.3.2009 DECLARING TOTAL I NCOME OF RS14,891/-. THE CASE WAS SELECTED FOR SCRUTINY ASSESSMENT AND N OTICE UNDER SECTION 143(2) OF THE ACT WAS ISSUED AND SERVED UPON THE AS SESSEE. ON SCRUTINY OF THE ACCOUNTS, IT REVEALED TO THE AO THA T THE PARTNERS HAVE CONTRIBUTED FRESH CAPITAL IN CASH ON 31.3.2008. TH E CAPITAL HAS BEEN CONTRIBUTED AS UNDER: ITA NO.869/AHD/2012 2 NEVIN KARIM AMLANI : 120000 PRAKASH M PATEL : 80000 VARSH DILIP SHAH : 215746 TOTAL : 4,15,746/- 4. ACCORDING TO THE AO IN RESPONSE TO THE SHOW CAUS E NOTICE, THE ASSESSEE DID NOT FILE SUPPORTING EVIDENCE AS WELL A S EXPLANATION. HE MADE ADDITION OF THE ABOVE AMOUNT WITH THE AID OF S ECTION 68 TO THE TOTAL INCOME OF THE ASSESSEE. APPEAL TO THE CIT(A) DID NOT BRING ANY RELIEF TO THE ASSESSEE. 5. BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE PLAC ED ON RECORD THE ORDER OF THE TRIBUNAL PASSED IN ITA NO.870/AHD/2012 RENDERED IN THE CASE OF M/S.K.K. DEVELOPERS VS ACIT. HE CONTENDED T HAT IN THAT CASE THE ADDITION OF RS.3,00,000/- WAS MADE. THE TRIBUN AL HAS DELETED THE ADDITION BY FOLLOWING THE DECISION OF THE HONBLE G UJARAT HIGH COURT IN THE CASE OF CIT VS PANKAJ DYESTUFF INDUSTRIES PASSE D INCOME TAX REFERENCE NO.241 OF 1993 DATED 6.7.2009. ACCORDING TO THE LD.COUNSEL FOR THE ASSESSEE, IF THERE IS A CAPITAL CONTRIBUTIO N BY THE PARTNERS, THEN THE SOURCE OF SUCH CAPITAL CONTRIBUTION CAN BE ENQU IRED IN THE HANDS OF THE PARTNERS. THE AMOUNT CANNOT BE TREATED AS UNEX PLAINED CASH CREDIT OF THE FIRM. ON THE STRENGTH OF THIS DECISION, HE CONTENDED THAT THE ADDITION IN THE PRESENT CASE IS ALSO NOT SUSTAINABL E. 6. ON THE OTHER HAND, LD.DR CONTENDED THAT THE ASSE SSEE HAS NOT GIVEN ANY EXPLANATION BEFORE THE AO. 7. WE HAVE CONSIDERED RIVAL CONTENTIONS AND GONE TH ROUGH THE RECORD CAREFULLY. SECTION 68 OF THE INCOME TAX ACT CONTEMPLATES THAT WHERE ANY SUM IS FOUND CREDITED IN THE BOOKS OF AN ASSESSEE MAINTAINED FOR ANY PREVIOUS YEAR, AND THE ASSESSEE OFFERS NO EXPLANATION ABOUT THE NATURE AND SOURCE THEREOF, OR THE EXPLANATION OFFERED BY THE ASSESSEE IS NOT, IN THE OPINION OF T HE AO SATISFACTORY, THEN THE SUM SO CREDITED IN THE ACCOUNTS MAY BE TRE ATED AS INCOME OF ITA NO.869/AHD/2012 3 THE ASSESSEE OF THAT PREVIOUS YEAR. FROM THE RECOR D, IT WAS CLEAR TO THE AO THAT FRESH CAPITAL WAS CONTRIBUTED BY THE PARTNE RS. THEREFORE, THE NATURE OF THE TRANSACTION IN THE ACCOUNT EXHIBITING THE CREDIT OF THE AMOUNTS WAS DISCLOSED TO THE AO. IT WAS NOT DISPUT ED ALSO. SINCE IT WAS CONTRIBUTED BY THE PARTNERS, THEREFORE, THEIR I DENTITY IS ALSO NOT DOUBTED. AS FAR AS GENUINENESS OF THE TRANSACTION IS CONCERNED, THE LD. AO HAS NOT DISPUTED ABOUT THE RECEIPT OF CAPITAL FR OM THE PARTNERS. IT IS IN THEIR CAPITAL ACCOUNT. SO GENUINENESS OF THE TR ANSACTION IS ALSO NOT IN DOUBT. THE ONLY ASPECT IS, WHETHER IT IS THE UNACC OUNTED MONEY OF THE ASSESSEE-FIRM ROOTED THROUGH THE PARTNERS OR IT IS A GENUINE CONTRIBUTION FROM THE PARTNERS. THE HONBLE HIGH C OURT IN THE CASE OF PANKAJ DYESTUFF INDUSTRIES (SUPRA) HAS ALSO OBSERVE D THAT THIS ASPECT CAN BE ENQUIRED IN THE CASE OF THE PARTNERS. IN OT HER WORDS, THE SOURCE OF FUNDS IN THEIR HAND CAN BE ENQUIRED FROM THE PAR TNERS IN THEIR INDIVIDUAL ASSESSMENT PROCEEDINGS. IN THE ORDER RE LIED UPON BY THE LD. COUNSEL FOR THE ASSESSEE, THE TRIBUNAL HAS ALSO GIV EN LIBERTY TO THE AO TO EXAMINE THE CONCERNED PARTNERS. IN VIEW OF THE ABOVE DISCUSSION, WE ALLOW THE APPEAL OF THE ASSESSEE. HOWEVER, THE AO WILL BE AT LIBERTY TO EXAMINE THE CASE OF THE CONCERNED PARTNERS ABOUT THE SOURCE OF CREDITS, AND TAKE ACTION IN ACCORDANCE WITH LAW. W ITH THE ABOVE OBSERVATIONS, THE APPEAL OF THE ASSESSEE IS ALLOWED AND THE ALLEGED UNEXPLAINED CREDIT OF RS.4,15,746/- IS DELETED. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE COURT ON 17 TH NOVEMBER, 2015 AT AHMEDABAD. SD/- SD/- (MANISH BORAD) ACCOUNTANT MEMBER (RAJPAL YADAV) JUDICIAL MEMBER AHMEDABAD; DATED 17/11/2015