Shri Manish Bharatkumar Shah, Godhra V. The ITO, Ward-1, Godhra

ITA 87/AHD/2023

AI Insights

The case revolves around an appeal by Shri Manish Bharatkumar Shah against the order of the CIT(A), which confirmed the addition of Rs.46,12,000 to the assessee's income for the Assessment Year 2011-12. The addition was initially made by the Assessing Officer under Section 144 due to non-cooperation from the assessee during the scrutiny proceedings. The Tribunal examined the evidence presented, including bank statements and the PAN of the transferor, and found that the transactions were genuine and the sources of the deposits were explained. The Tribunal's decision highlighted the importance of documentary evidence in establishing the legitimacy of financial transactions.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 129475 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-06-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 12-06-2023
• Assessment Year: 2011-2012
• Appeal Filed On: 09-02-2023
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 68; 144; 143(2)

Judgement Text

ITA No.87/Ahd/2023 Assessment Year: 2011-12 Page 1 of 4 IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “SMC” BENCH, AHMEDABAD BEFORE Ms. SUCHITRA KAMBLE, JUDICIAL MEMBER ITA No.87/Ahd/2023 Assessment Year: 2011-12 Shri Manish Bharatkumar Shah, Sagarkrupa, Near Nanand Parikh Hospital, Prabha Road, Godhra. [PAN – ANHPS 6519 E] Vs. Income Tax Officer, Ward-1, Godhra. (Appellant) (Respondent) Assessee by Ms. Urvashi Shodhan, AR Revenue by Shri Suraj Bhan Garwal, Sr. DR Da te o f He a r in g 13.06.2023 Da te o f P ro n o u n ce m e n t 28.06.2023 O R D E R This appeal is filed by the Assessee against order dated 14.12.2022 passed by the CIT(A), National Faceless Appeal Centre (NFAC), Delhi for the Assessment Year 2011-12. 2. The Assessee has raised the following ground of appeal:- “1. Ld. CIT(A) has erred in confirming the action of the Ld. AO in making an addition of Rs.46,12,000/- under Section 68 of the Act on the erroneous ground that source of amount credited in bank account is unexplained.” 3. The return of income was filed on 31.03.2012 declaring taxable income of Rs.1,50,000/-. The case was selected for scrutiny by issuance of notice under Section 143(2) of the Income Tax Act, 1961 on 26.09.2012 and subsequent notices were also issued. However, neither the assessee attended proceedings nor furnished relevant details and, therefore, the Assessing Officer passed the Assessment Order under Section 144 of the Act thereby observing that on verification of the Bank statement, during the relevant year cash amounting to Rs.16,12,000/- and other than cash amounting to Rs.31,00,712/- totalling to Rs.47,12,712/-was deposited by the assessee in his bank account maintained with the Axis Bank but there was no explanation and, therefore, the assessee failed to ITA No.87/Ahd/2023 Assessment Year: 2011-12 Page 2 of 4 prove the genuine sources of the said deposits in his bank account. The Assessing Officer made addition of Rs.47,12,712/- as income from unexplained/undisclosed sources as well as Rs.1,98,000/- on the same head. 4. Being aggrieved by the Assessment Order, the assessee filed appeal before the CIT(A). The CIT(A) partly allowed the appeal of the assessee. 5. The Ld. AR submitted that the assessee has given all the details of the amount given by the assessee that of Rs.30,00,000/-. The Ld. AR submitted that the assessee has received these amounts from Shri Jay Rashmikant Patel and the entire amount was transferred by him by RTGS from his Bank account with HSBC. The assessee has given PAN of Jay Patel. As regards to cash of Rs.16,12,000/-, the said cash has been re-deposited out of withdrawal made from various amounts received by cheque/RTGS from various persons. As regards to amount of Rs.712/-, the same is credited as interest. The Ld. AR submitted that on various dates the assessee received the amount from Jay Patel in his Bank account and the said Jay Patel is assessed to income tax. However, due to reasons best known to Jay Patel, he has not co-operated with the confirmation letter but the entry of the said amount in his ledger account is available before the CIT(A). Thus, the Ld. AR submitted that the genuineness of the transaction was totally explained by the assessee before the CIT(A). Ld. AR further submitted that the bank statement of the assessee and the certificate issued by Axis Bank that the amount was received through RTGS from Jay Patel’s account with HSBC Bank on various dates as well as PAN card details and address proof are sufficient documents to establish the identity, genuineness and credit worthiness of the party. As regards to cash of Rs.16,12,000/-, the Ld. AR submitted that the assessee has made withdrawals from time to time and the amount which was remaining in his hand was re-deposited in the Bank. The cash withdrawals were done in respect of assessee’s business and, therefore, while depositing the same, the employees of the assessee on behalf of the assessee made deposits as well as withdrawals. Thus, the Ld. AR submitted that the addition confirmed to the extent of Rs.46,12,000/- by the CIT(A) is not justifiable. 6. The Ld. DR submitted that as regards the amount taken from one Shri Jay Patel, the assessee has not shown any element of interest paid to the said party. In fact, the creditworthiness of the said party has not been established by the assessee ITA No.87/Ahd/2023 Assessment Year: 2011-12 Page 3 of 4 at any point of time. As regards to cash withdrawals, the ld. DR relied upon the Assessment Order and the order of the CIT(A). 7. Heard both the parties and perused all the relevant material available on record. It is pertinent to note that the amount of Rs.30,00,000/- received from Jay Patel has been established by the assessee through the ledger account of the said Jay Patel as well as the Bank statements of the assessee from the lenders account. The identity and genuineness of the transactions cannot be doubted when the assessee has established these aspects through various documents. The contention of the ld. AR that there is no element of interest involved and the income tax return of the said lender Jai Patel was not filed will be relevant only when the assessee has not established the actual transfer of the amount from the said party to the assessee. In the present case, the assessee has proved through ledger account of Jay Patel that the said transfer of money in assessee’s account was genuine. Ledger account of the lenders as well as the assessee has given clear picture about the said amount of Rs.30,00,000/- and merely on the assumption that the opening balance of the lender and the receiver is not tallying cannot be the ground for confirming the addition. Besides this, about the cash of Rs.16,12,000/-, the assessee through his Bank account on various dates had established that the said amount was withdrawn from time to time which is more than the re-deposited amount. The re-deposited amount is the balance of the cash withdrawn from the assessee. The assessee is running a business and, therefore, for withdrawals as well as for deposits in the bank account, assessee’s staffs have signed the Bank slips from time to time and that cannot be stated as the third person has withdrawn or deposited the amounts in the Bank. Thus, the addition to the extent of Rs.46,12,000/- under Section 68 of the Act confirmed by the CIT(A) is not justifiable. As regards to the interest, the amount is minimum and, therefore, we are not adjudicating this ground. Thus, the appeal of the assessee is allowed. 8. In the result, appeal of the assessee is allowed. Order pronounced in the open Court on this 28 th June, 2023. Sd/- (SUCHITRA KAMBLE) Judicial Member Ahmedabad, the 28 th day of June, 2023 ITA No.87/Ahd/2023 Assessment Year: 2011-12 Page 4 of 4 PBN/* Copies to: (1) The appellant (2) The respondent (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File By order UE COPY Assistant Registrar Income Tax Appellate Tribunal Ahmedabad benches, Ahmedabad