SHRI HITENDRA C. GHADIA , MUMBAI V. DY CIT -CC-1(1), MUMBAI

MA 453/MUM/2023

• Counselvise Citation: [2023] 101 COUNSELVISE.COM (IT) 9786 (ITAT-MUMBAI)
• Duration Of Justice: 5 month(s) 1 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 28-11-2023
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 19-10-2023
• Assessment Year: 2014-2015
• Appeal Filed On: 26-06-2023
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Gift; Period of limitation; Time period of passing order; Set aside
• Section: 68; 22

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “E” MUMBAI BEFORE SHRI OM PRAKASH KANT (ACCOUNTANT MEMBER) AND MS. KAVITHA RAJAGOPAL (JUDICIAL MEMBER) M.A. No. 453/MUM/2023 (Arising out of ITA No. 616/MUM/2021) Assessment Year: 2014-15 Shri Hitendra C. Ghadia, 1702, Millennium Grand Co- op. Housing Society, Sector 11, Kharghar, Opposite Nimisha Hospital, Navi Mumbai-410 210. Vs. DCIT, CC-1(1), 9 th floor, Pratishtha Bhavan, Old CGO Annexe, Maharshi Karve Road, Mumbai-40020. PAN No. AALPG 1399 M Appellant Respondent Assessee by : Ms. Hiral Sejpal Revenue by : Mr. P D Chougule, Sr. DR Date of Hearing : 20/10/2023 Date of pronouncement : 29/11/2023 ORDER PER OM PRAKASH KANT, AM By way of this miscellaneous application, the assessee is seeking rectification/recall of the order dated 30 th Nov. 2022 of the Income-tax Appellate Tribunal (in short ‘the Tribunal’) passed in ITA No. 616/Mum/2021 for assessment year 2014-15. 2. The ld Counsel of Tribunal was received by the assessee only on 23/01/2023 and therefore the miscellaneous application filed on 27/06/2023 is within the period of the six which the order was served on the assessee. We find that Hon’ble Bombay High Court in the case of Ginning and Pressing Factory Vs ACIT (123 taxmann.com 301) held that period of the limitation would commence only from the date of obtaining knowledge of the order decision of the Hon’ble Bombay High Court (supra), the miscellaneous application filed is well within the limitation period and therefore same is admitted for adjudication. 3. The learned counsel miscellaneous application and disallowance under section 68 of the Income short the Act) in case of few parties relying on the principle that assessee was required to explain source of the source of the parties which had provided th learned counsel, in view of the decision of the Hon’ble High Court cited in miscellaneous application, into source of source from the record in the order of the observation in respect of the each unexplained in para H of the Miscellaneous Application ld Counsel of assessee submitted that order of the ribunal was received by the assessee only on 23/01/2023 and therefore the miscellaneous application filed on 27/06/2023 is within the period of the six-month from the end of the month which the order was served on the assessee. We find that Hon’ble ombay High Court in the case of Daryapur Shetkari Sahakari Ginning and Pressing Factory Vs ACIT (123 taxmann.com 301) held that period of the limitation would commence only from the date of obtaining knowledge of the order by the party sion of the Hon’ble Bombay High Court (supra), the miscellaneous application filed is well within the limitation period and therefore same is admitted for adjudication. The learned counsel for the assessee referred to the application and submitted that Tribunal has upheld under section 68 of the Income-tax Act, 1961 ( in short the Act) in case of few parties relying on the principle that assessee was required to explain source of the source of the parties which had provided the loans to the assessee. According to the learned counsel, in view of the decision of the Hon’ble High Court cited in miscellaneous application, there is no requirement into source of source and therefore, there is a mistake apparent in the order of the Tribunal respect of the each unexplained creditor mentioned Miscellaneous Application are extracted as under: Shri Hitendra C. Ghadia 2 M.A No. 453/Mum/2023 ee submitted that order of the ribunal was received by the assessee only on 23/01/2023 and therefore the miscellaneous application filed on 27/06/2023 is month from the end of the month, in which the order was served on the assessee. We find that Hon’ble Daryapur Shetkari Sahakari Ginning and Pressing Factory Vs ACIT (123 taxmann.com 301) held that period of the limitation would commence only from the by the party. In view of the sion of the Hon’ble Bombay High Court (supra), the miscellaneous application filed is well within the limitation period the assessee referred to the ribunal has upheld tax Act, 1961 ( in short the Act) in case of few parties relying on the principle that assessee was required to explain source of the source of the parties e loans to the assessee. According to the learned counsel, in view of the decision of the Hon’ble High Court there is no requirement to go there is a mistake apparent Tribunal. The specific creditor mentioned are extracted as under: “H. Referring to paragraph 22 of the order, the Tribunal discussed the addition 1. Bharat Dhalaria (HUF) (Decision on para 22.4) The Tribunal has only referred to the bank statement and not appreciated the fact that the Applicant had furnished the Ledger Confirmation, Acknowledgement of the return of Income, Computation of I extract (i.e the land revenue records showing crop on agriculture land) (Pg. No. 19 justifies not only the genuineness of the transaction but also the source of source. the grounds that the Applicant could not explain the source of the deposits and thereby failed to justify the genuineness of the transaction. With respect to the reliance placed by the assessee on the decision of the Tribunal in the case of DCIT, CC-1(1) ITA No. there was no reference to any deletion of loan given by Bharat Dholaria (HUF) but the Tribunal erred in appreciating the fact that the Tribunal in the above favour of the Appellant on the grounds that she had submitted all the documents as are also) to prove the agricultural income is not assessable to tax, a gift from the proceeds of the same would be considered Relevant paragraphs of the order are reproduced below; ........"I note that it is not the case that revenue name and address case that the enquiry was made and the said person has failed to respond. The ld.CIT(A) has also accepted that the said person is having agricultural income and imagination, it can be presumed that people having agricultural income cannot make a small savings to give a small amount of loan or gift. Addition by such presumption without making any cogent enquiry is not sustainable in law. Accordingly, the addition sustained set aside"......... 2. Shri Divyesh Vaghasia (Decision on para 22.9) Even in the case of the above party, the Tribunal to the bank statement and not appreciated the fact that the Applicant had Acknowledgement of the return of Income, Computation of Income and Balance sheet Pg. No. book) which justifies not only the genuineness of the transaction Referring to paragraph 22 of the order, the Tribunal discussed the addition party wise. Bharat Dhalaria (HUF) (Decision on para 22.4) The Tribunal has only referred to the bank statement and not appreciated the fact that the Applicant had furnished the Ledger Confirmation, Acknowledgement of the return of Income, Computation of Income, Balance sheet and a copy of the 7/12 extract (i.e the land revenue records showing crop on agriculture land) (Pg. No. 19-21 & 37-39 of the factual paper book) which justifies not only the genuineness of the transaction but also the source of source. On the contrary, the appeal was dismissed on the grounds that the Applicant could not explain the source of the deposits and thereby failed to justify the genuineness of the With respect to the reliance placed by the assessee on the of the Tribunal in the case of Ushaben H. Ghadia vs. 1(1) ITA No. 618/Mum/2021 the Tribunal opined that was no reference to any deletion of loan given by Bharat Dholaria (HUF) but the Tribunal erred in appreciating the fact that in the above mentioned case passed an order in the Appellant on the grounds that she had submitted all the documents as are submitted by the Applicant in this case also) to prove the genuineness of the transaction and even though agricultural income is not assessable to tax, a gift from the proceeds of the same would be considered as genuine. Relevant paragraphs of the order are reproduced below; ........"I note that it is not the case that revenue did not have the name and address of the person giving the gift. It is also not the case that the enquiry was made and the said person has failed to respond. The ld.CIT(A) has also accepted that the said person is having agricultural income and agricultural land. By no stretch of ion, it can be presumed that people having agricultural cannot make a small savings to give a small amount of loan or gift. Addition by such presumption without making any cogent enquiry is not sustainable in law. Accordingly, the addition sustained by the ld. CIT(A) is liable to be set aside"......... Shri Divyesh Vaghasia (Decision on para 22.9) Even in the case of the above party, the Tribunal has only referred to the bank statement and not appreciated the fact that the Applicant had furnished the Ledger Confirmation, Acknowledgement of the return of Income, Computation of Income and Balance sheet Pg. No. 22-24 & 40-41 of the factual paper book) which justifies not only the genuineness of the transaction Shri Hitendra C. Ghadia 3 M.A No. 453/Mum/2023 Referring to paragraph 22 of the order, the Tribunal The Tribunal has only referred to the bank statement and not appreciated the fact that the Applicant had furnished the Ledger Confirmation, Acknowledgement of the return of Income, ncome, Balance sheet and a copy of the 7/12 extract (i.e the land revenue records showing crop on agriculture 39 of the factual paper book) which justifies not only the genuineness of the transaction but also the was dismissed on the grounds that the Applicant could not explain the source of the deposits and thereby failed to justify the genuineness of the With respect to the reliance placed by the assessee on the Ushaben H. Ghadia vs. 618/Mum/2021 the Tribunal opined that was no reference to any deletion of loan given by Bharat Dholaria (HUF) but the Tribunal erred in appreciating the fact that mentioned case passed an order in the Appellant on the grounds that she had submitted all in this case genuineness of the transaction and even though agricultural income is not assessable to tax, a gift from the did not have the giving the gift. It is also not the case that the enquiry was made and the said person has failed to respond. The ld.CIT(A) has also accepted that the said person is agricultural land. By no stretch of ion, it can be presumed that people having agricultural cannot make a small savings to give a small amount of loan or gift. Addition by such presumption without making any by the ld. CIT(A) is liable to be has only referred to the bank statement and not appreciated the fact that the Confirmation, Acknowledgement of the return of Income, Computation of Income 41 of the factual paper book) which justifies not only the genuineness of the transaction but also the source of source. On the contr dismissed on the grounds that the Applicant could not correlate the deposits with any of the persons who had given loans to the Applicant and thereby failed to justify the genuineness of the 3. 3. Shri Kantibhai Dholaria, Shri Rajnikant R Patodiya, Smt Ramila R Patodiya and Shri Vinubhai Gajera. (Decision on para 22.10) Even in the case of the above parties, the Tribunal has only referred to the bank statement and not appreciated th the Applicant had furnished the Acknowledgement of the return of Income, Computation of Income and Balance sheet Pg. No. book) which justifies not only the genuineness of the transaction but also the source of source. The Tribunal in all of the above parties did not question the validity of the documents presented by the Applicant, from the order that the Tribunal on record. The Applicant submit source which were overlooked by the Tribunal. and law the Applicant was not bound to prove the source of source as discussed and adjudicated by the Jurisdictional High Court in paragraph 4. We have consider issue in dispute and peruse discharging its onus under section 68 of the Act, an assessee is required to demonstrate with documentary evidences, identity of loan creditor, creditor, and thirdly that Tribunal (supra) the case, the loan transactions were lacking genuineness particularly in view of no bank statement of relevant parties filed by the assessee. The contention assessee that the T but also the source of source. On the contrary, the appeal was dismissed on the grounds that the Applicant could not correlate the deposits with any receipts or loans in the financial statements persons who had given loans to the Applicant and thereby failed to justify the genuineness of the transaction. 3. Shri Kantibhai Dholaria, Shri Rajnikant R Patodiya, Smt Ramila R Patodiya and Shri Vinubhai Gajera. (Decision on para 22.10) Even in the case of the above parties, the Tribunal has only referred to the bank statement and not appreciated the fact that the Applicant had furnished the Ledger Confirmation, Acknowledgement of the return of Income, Computation of Income and Balance sheet Pg. No. 25-35 & 42-51 of the factual paper book) which justifies not only the genuineness of the transaction ut also the source of source. The Tribunal in all of the above parties did not question the validity of the documents presented by the Applicant, It is clear from the order that the Tribunal overlooked the relevant materials The Applicant submitted all the documents to prove the source of source which were overlooked by the Tribunal. Whereas, in fact and law the Applicant was not bound to prove the source of source as discussed and adjudicated by the Jurisdictional High Court in paragraph E.” have considered rival submission of the parties issue in dispute and perused relevant material on record. discharging its onus under section 68 of the Act, an assessee is required to demonstrate with documentary evidences, f loan creditor, secondly, creditworthiness of loan thirdly, genuineness of the loan transaction. (supra) held that in the facts and circumstances of the loan transactions were lacking genuineness in view of no bank statement of relevant parties filed by the assessee. The contentions of the learned counsel the Tribunal has stressed only on the source of Shri Hitendra C. Ghadia 4 M.A No. 453/Mum/2023 appeal was dismissed on the grounds that the Applicant could not correlate receipts or loans in the financial statements persons who had given loans to the Applicant and thereby 3. Shri Kantibhai Dholaria, Shri Rajnikant R Patodiya, Smt Ramila R Patodiya and Shri Vinubhai Gajera. Even in the case of the above parties, the Tribunal has only e fact that Ledger Confirmation, Acknowledgement of the return of Income, Computation of Income 51 of the factual paper book) which justifies not only the genuineness of the transaction The Tribunal in all of the above parties did not question the It is clear overlooked the relevant materials ted all the documents to prove the source of Whereas, in fact and law the Applicant was not bound to prove the source of source as discussed and adjudicated by the Jurisdictional High ed rival submission of the parties on the material on record. For discharging its onus under section 68 of the Act, an assessee is required to demonstrate with documentary evidences, firstly, , creditworthiness of loan , genuineness of the loan transaction. We find in the facts and circumstances of the loan transactions were lacking genuineness in view of no bank statement of relevant parties filed by of the learned counsel for the ribunal has stressed only on the source of source of loan while confirming the unexplained cash credit under section 68 of the Act mistake apparent from record order of the Tribunal. The assessee the Tribunal in respect of the additions confirmed rectification, which we are not therefore the ground raised in the rejected. 5. In the result, the assessee is dismissed. Order pronounced in the open Court Sd/ (KAVITHA RAJAGOPAL JUDICIAL MEMBER Mumbai; Dated: 29/11/2023 Rahul Sharma, Sr. P.S. Copy of the Order forwarded to 1. The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file. //True Copy// while confirming the unexplained cash credit under Act, are therefore found to be incorrect. rom record is discernible from records ribunal. The assessee is seeking review of the order of ribunal in respect of the additions confirmed , which we are not authorized under the law and therefore the ground raised in the miscellaneous In the result, the miscellaneous application filed by the assessee is dismissed. Order pronounced in the open Court on 29/11/2023. Sd/- Sd/ KAVITHA RAJAGOPAL) (OM PRAKASH KANT JUDICIAL MEMBER ACCOUNTANT MEMBER Copy of the Order forwarded to : BY ORDER, (Assistant Registrar) ITAT, Mumbai Shri Hitendra C. Ghadia 5 M.A No. 453/Mum/2023 while confirming the unexplained cash credit under correct. Thus, no is discernible from records in the ing review of the order of ribunal in respect of the additions confirmed in the garb of under the law and miscellaneous application are application filed by the /11/2023. Sd/- OM PRAKASH KANT) ACCOUNTANT MEMBER BY ORDER, (Assistant Registrar) ITAT, Mumbai