The ACIT, Central Circle-1(4), Ahmedabad V. M/s. Manorath Hotels Pvt.Ltd., Ahmedabad

ITSSA 190/AHD/2009

• Counselvise Citation: [2011] 124 COUNSELVISE.COM (IT) 8566 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 3 month(s) 7 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 31-03-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2001-2002
• Appeal Filed On: 23-12-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Additional evidence
• Section: 143(3); 68; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD, B BENCH (BEFORE S/SHRI G.D. AGARWAL, VICE-PRESIDENT AND T.K. SHARMA, JUDICIAL MEMBER) IT(SS)A NO.190/AHD/2009 [ASSTT. YEAR : 2001-2002] ACIT, CENT.CIR.1(4) AHMEDABAD. VS. M/S. MANORATH HOTELS PVT. LTD. 2 ND FLOOR, NARAYAN CHAMBERS NR. PATANG HOTEL NEHRU BRIDGE CORNER ASHRAM ROAD,AHMEDABAD. PAN : AABCM 0506 D (APPELLANT) (RESPONDENT) REVENUE BY : SHRI K. MADHUSUDAN ASSESSEE BY : SHRI PRITESH SHAH O R D E R PER G.D. AGARWAL, VICE-PRESIDENT: THIS IS REVENUES APPEAL AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-I, AHMEDABAD DATED 3.11.2009 ARISING OUT OF THE ORDER OF THE ASSESSING OFFICER PASSED UNDER SECTION 153C R.W.S. 153A(1)(B) R.W.S. 143(3) OF THE INCOME TAX ACT, 1961. 2. THE FOLLOWING GROUNDS ARE RAISED IN THE APPEAL: 1. THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.19,40,230/-M MADE U/S.68 OF THE I.T. ACT. 2. THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN A DMITTING THE ADDITIONAL EVIDENCE IN CONTRAVENTION TO RULE 46A OF THE I.T.RULES, 1962 WITHOUT GRANTING THE ASSESSING OFFICER ANY OPP ORTUNITY OF BEING HEARD. 3. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL PLACED BEFORE US. THE ASSESSING OFFICER HAD MADE THE ADDI TION OF RS.19,76,232/- AS UNEXPLAINED CASH CREDIT UNDER SEC TION 68 OF THE INCOME IT(SS)A NO.190/AHD/2009 -2- TAX ACT. THE LEARNED COMMISSIONER OF INCOME TAX (A PPEALS) DELETED THE ADDITION TO THE EXTENT OF RS.19,40,230/- AND SU STAINED THE ADDITION OF RS.36,000/-. THE RELEVANT FINDINGS OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) READ AS UNDER: 6. I HAVE CONSIDERED THE SUBMISSIONS OF THE APPELL ANT. MY FINDINGS AS REGARD TO THE SPECIFIC POINTS RAISED IN THE GROUNDS OF APPEALS ARE AS UNDER:- (I) AS REGARD TO THE ADDITION OF RS.19,76,232/- U/ S. 68 OF THE I.T. ACT, I FIND THAT THE TOTAL OPENING BALANCE OF UNSECURED LOANS AS ON 01.04.2000 AMOUNTED TO RS.22,77,077/-. OUT OF ABOVE, THE APPELLANT COMPANY MADE REPAYMENT OF RS.N IL AND TOTAL FRESH DEPOSITS OF RS.36,000/- WERE RECEIVED F ROM MAHALAXMI HOUSING & FIN STOCK PVT LTD THE CLOSING B ALANCE OF UNSECURED LOANS AS ON 31.03.2001 AMOUNTED TO RS.23, 13,077/-. IT IS, THUS, APPARENT THAT DURING THE YEAR UNDER CO NSIDERATION, THE APPELLANT COMPANY HAS RECEIVED FRESH CREDITS OF RS.36,000/- ONLY. THE APPELLANT HAS NOT FURNISHED EVEN THE PRIM ARY EVIDENCE IN THE FORM OF LOAN CONFIRMATION FROM THE NEW DEPOS ITORS. IN SUCH CIRCUMSTANCES, THE ADDITION OF UNEXPLAINED AND UNPROVED CASH CREDITS OF RS.36,000/- IN THE YEAR UNDER CONSI DERATION IS CONSIDERED JUSTIFIED AND ADDITION OF THE SAME IS CO NFIRMED. THE BALANCE ADDITION IS DELETED. THE ASSESSING OFFICER IS FREE TO TAKE APPROPRIATE ACTION ULS.148 OF THE I.T. ACT FOR VERI FICATION OF THE UNSECURED LOANS WHICH ARE CLAIMED TO BE RECEIVED IN EARLIER YEARS. THIS GROUND OF APPEAL IS PARTLY ALLOWED. 4. AFTER CONSIDERING THE ARGUMENTS OF BOTH THE SIDE S AND THE FACTS AND CIRCUMSTANCES OF THE CASE, WE FIND NO INFIRMITY IN THE ABOVE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS). IT IS SETTLED LAW THAT THE ADDITION FOR CASH CREDIT CAN BE MADE ONLY IN RESPEC T OF FRESH CREDIT DURING THE ACCOUNTING YEAR RELEVANT TO THE ASSESSMENT YEAR UNDER CONSIDERATION. THE ASSESSING OFFICER MADE THE ADDITION SIMPLY ON T HE BASIS OF CLOSING BALANCE IN THE BALANCE SHEET WITHOUT EXAMINING WHET HER THERE WAS ANY FRESH CREDIT DURING THE YEAR UNDER CONSIDERATION. THE LEARNED IT(SS)A NO.190/AHD/2009 -3- COMMISSIONER OF INCOME TAX (APPEALS) FOUND THAT THE FRESH CREDIT DURING THE YEAR UNDER CONSIDERATION WAS ONLY RS.36,000/- A ND HE SUSTAINED THE ADDITION TO THAT EXTENT. ALL OTHER CREDITS WERE OP ENING BALANCES IN THE ASSESSEES ACCOUNT. THE CIT(A) ALSO MADE OBSERVATI ON THAT THE ASSESSING OFFICER IS FREE TO TAKE APPROPRIATE ACTION UNDER SE CTION 148 IN THE EARLIER YEARS. THE VIEW TAKEN BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) IS PERFECTLY IN ACCORDANCE WITH LAW. THE REVENUE HAS ALSO NOT POINTED OUT WHICH FRESH EVIDENCE WAS CONSIDERED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) WHILE TAKING T HE ABOVE VIEW. IN VIEW OF THE ABOVE, WE DO NOT FIND ANY JUSTIFICATION TO INTERFERE WITH THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (AP PEALS) ON THIS ISSUE THE SAME IS SUSTAINED AND THE REVENUES APPEAL IS D ISMISSED. 5. IN RESULT, REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 31 ST MARCH, 2011 SD/- SD/- (T.K. SHARMA) JUDICIAL MEMBER (G.D. AGARWAL) VICE-PRESIDENT PLACE : AHMEDABAD DATE : 31-03-2011 C OPY OF THE ORDER FORWARDED TO: 1) : APPELLANT 2) : RESPONDENT 3) : CIT(A) 4) : CIT CONCERNED 5) : DR, ITAT. BY ORDER DR/AR, ITAT, AHMEDABAD