The ACIT, Central Circle-1(1), Ahmedabad V. Shri Dipen Gunvantray Patel, Bhavnagar

MA 67/AHD/2018

• Counselvise Citation: [2018] 124 COUNSELVISE.COM (IT) 6681 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 month(s) 7 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 06-06-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 27-02-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V K SINGH
• Assessee Lawyers: U S BHATI
• Keywords: Accommodation entries
• Section: 68; 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD B BENCH BEFORE: SHRI AMARJIT SINGH, ACCOUNTANT MEMBER AND MS. MADHUMITA ROY , JUDICIAL MEMBER SHRI DIPEN GUNVANTRAI PATEL, PROP. M/S. DEEPK ENTERPRISE, ABOVE NAGINA MASJID , KHARGATE, BHAVAGAR ,364001 PAN: AGPPP8863K (APPELLANT) VS THE ACIT, CIRCLE - 1(1), AHMEDABAD (RESPONDENT) REVENUE BY : S H RI V.K. SINGH , SR. D . R. ASSESSEE BY: S H RI U.S. BHATI , A.R. DATE OF HEAR ING : 18 - 05 - 2 018 DATE OF PRONOUNCEMENT : 06 - 06 - 2 018 / ORDER P ER : AMARJIT SINGH, ACCOUNTANT MEMBER : - BOTH THE MA S OF ASSESSEE ARE ARISING OUT OF IT(SS)A NO. 423/AHD/2013 & CO NO. 122/AHD/2014 FOR ASSESSMENT YEAR 2008 - 09 ORDER DATED 28 - 08 - 2017. 2. AS THE FACTS IN BOTH THE MAS ARE IDENTICAL, SO, THE FACTS OF MA NO. 66/AHD/2018 ARE TAKEN AS LEAD CASE AND ITS FIN DINGS WILL BE APPLICABLE FOR BOTH OF THEM. 3 . VIDE THE ABOVE MISC. APPLICATION THE ASSESSEE HAS BRIEFLY RAISED THE POINTS THAT TH ERE WAS NO EVIDENCE OF RECOVERY AND SEIZURE OF INCRIMINATING M.A. NO S . 66 &67 /AHD/2018 ( ARISING OUT OF I T (SS) A . 423 / A HD/20 13 & CO 122/AHD/2014) A SSESSMENT YEAR 200 8 - 09 MA NO S . 66 & 67 AHD/2018 (IN I.T(SS). A NO. 423 /AHD/20 13 & CO 122/AHD/2014 ) A.Y. 2008 - 09 PAGE NO SHRI DIPEN GUNVANTRAI PATEL VS. ACIT 2 M ATERIAL PERTAINING TO F.Y. 2007 - 08 RELATING TO THE ASSESSMENT YEAR 2008 - 09 DURING THE COURSE OF SEARCH. HE HAS OBJECTED THE DECISION OF THE COORDINATE B ENCH OF RESTORING THE CASE OF THE ASSESSEE TO THE FILE OF ASSESSING OFFICER AFTER CONSIDERING THE DECIS ION OF THE CO - ORDINATE B ENCH IN THE CASE OF CONNECTED CASE OF PR OP. OF PRASHWAS TRADING COMPANY . DURING THE COURSE OF APPELLATE PROCEEDINGS BEFORE US, THE LD. COUNSEL HAS RETREATED THE ABOVE POINTS MENTIONED IN T H E MISC. APPLICATION. ON THE OTHER HAND, THE LD. DEPARTMENTAL REPRESENTATIVE HAS CONTENDED THAT THERE IS NO A PPARENT MISTAKE APPARENT FROM T H E CORD. 4 . WE HAVE HEARD BOTH THE SIDES AND PERUSED THE MATERIAL ON RECORD CAREFULLY. VIDE ORDER IN IT(SS)A NO. 423/AHD/2013 AND CO NO. 122/AHD/2014 DAT ED 28/08/2017 , THE CO - ORDINATE BENCH OF THE ITAT HAS SET ASIDE THE CASE TO THE FILE OF THE ASSESSING OFFICER FOR RE - ADJUDICATION AFTER TAKING CONSIDERATION THE DECISION OF THE CO - ORDINATE BENCH OF THE ITAT VIDE ITA NO. 1365/AHD/2014 IN THE CONNECTED CASE O F M/S PARSHWA TRADING COMPANY WHEREIN ON THE SAME ISSUE THE SUBSTANTIVE ADDITION W AS MADE HOWEVER THE IDENTICAL ADDITION W A S MADE ON PROTECTIVE BASIS IN THE CASE OF THE ASESSEE. THE RELEVANT PART OF THE DECISION OF THE CO - ORDINATE BENCH VIDE IT(SS)A NO. 423/AHD/2013 IS REPRODUCED AS UNDER: - 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD. WE HAVE NOTICED FROM THE FINDINGS OF THE ASSESSING OFFICER THAT ASSESSEE WAS ENGAGED IN THE BUSINESS OF ISSUING CHEQUES/DRAFTS TO VARIOUS PA RTIES THROUGH DIFFERENT ACCOUNT MAINTAINED BY HIM AT DIFFERENT PLACES. THE IMPUGNED ADDITIONS U/S. 69 WAS MADE IN THE CASE OF THE ASSESSEE ON THE BASIS OF DISALLOWANCE U/S. 68 WAS MADE IN THE CASE OF PARSHWA TRADING COMPANY FOR THE SAME AMOUNT. THE ASSESS ING OFFICER HAS MADE THIS ADDITION ON PROTECTIVE BASIS IN THE CASE OF THE ASSESSEE. M/S. PARSHWA TRADING COMPANY HAS UNILATERALLY SHOWN THE IMPUGNED AMOUNT AS UNSECURED LOAN OBTAINED FROM THE ASSESSEE. IT WAS ALSO NOT SHOWN FROM WHICH BANK A/C THE SAID AMOUNT WAS OBTAINED AS UNSECURED LOAN FROM THE ASSSESSEE. THE ASSESSEE HAS EXPLAINED THAT HE WAS HAVING NORMAL BUSINESS TRANSACTIONS WITH M/S. PARSHWA TRADING CO. OF CHEQUE ISSUE AND CHEQUE DISCOUNTING. HE RECEIVED CHEQUE FROM THE PARTY AND HAND OVER CASH TO THEM. WE HAVE PERUSED THE DECISION OF THE CO - ORDINATE BENCH DATED 01/05/2017 IN THE CASE OF SMT. BINTAL D. BAXI PROP. OF PARSHWA TRADING COMPANY IN WHOSE CASE THE SUBSTANTIVE ADDITION WAS MADE FOR THE SIMILAR AMOUNT. WE FIND THAT THE CO - ORDINATE BEN CH VIDE ITA NO. 1365/AHD/2014 HAS SET ASIDE THE ABOVE CASE OF THE PARSHWA TRADING COMPANY FOR RE - ADJUDICATION TO THE ASSESSING OFFICER. THE RELEVANT PARA 20 AND 21 OF THAT ORDER IS REPRODUCED AS UNDER: - 20. THE LD.CIT(A) HAS DISCUSSED THIS ISSUE IN LITT LE DETAIL, BUT DEVOTED MUCH ENERGY IN REPRODUCTION OF CIT(A) S ORDER PASSED IN THE CASE OF SHRI DIPIN G. PATEL. THE LD.CIT(A) ALSO REPRODUCED THE FINDING OF THE AO, SUBMISSIONS MADE BY THE ASSESSEE. WHILE MAKING AN ANALYSIS OF THE STATEMENT GIVEN BY SHRI DIPIN G. PATEL, THE LD.CIT(A) JUST REITERATED REPLIES GIVEN BY HIM. BUT HE HAS NOT ANALYSED INFERENCE REQUIRED TO BE DRAWN FROM THOSE REPLIES. BASICALLY, THE LD.CIT(A) WAS OF THE OPINION THAT IT IS THE ONUS UPON THE ASSESSEE TO PROVE SOURCE OF LOAN AND I TS NATURE. ONCE THE ASSESSEE FAILED TO FILE CONFIRMATION FROM MA NO S . 66 & 67 AHD/2018 (IN I.T(SS). A NO. 423 /AHD/20 13 & CO 122/AHD/2014 ) A.Y. 2008 - 09 PAGE NO SHRI DIPEN GUNVANTRAI PATEL VS. ACIT 3 CREDITOR, THEN IT WILL BE CONSTRUED THAT SHE FAILED TO DISCHARGE ONUS. AS OBSERVED EARLIER, IN THE NORMAL CIRCUMSTANCES, THE LD.CIT(A) S ACTION COULD BE APPRECIATED. BUT, IT IS TO BE SEEN IN THE CONTEXT THAT WHEN A CREDITOR TURN HOSTILE, THEN WHETHER AN ASSESSEE SHOULD BE GIVEN AN OPPORTUNITY TO PROVE HIS CASE WITH THE HELP OF CIRCUMSTANTIAL EVIDENCE OR NOT. THE ROLE OF THE AO IS NOT ONLY OF PROSECUTOR, RATHER HE IS AN ADJUDICATOR ALSO. IT I S FOR THE REVENUE TO PROVIDE A PLATFORM TO THE ASSESSEE WHERE WITH THE HELP OF STATUTORY POWERS OF THE AO, SHE COULD EXPLAIN HER POSITION FOR NOT VISITING HER WITH TAX LIABILITY. 21. LOOKING INTO THESE FACTS AND CIRCUMSTANCES, WE ARE OF THE VIEW THAT IM PUGNED ORDERS DESERVES TO BE SET ASIDE BECAUSE THE ASSESSEE WAS NOT GRANTED SUFFICIENT OPPORTUNITY AT THE LEVEL OF THE AO. THESE APPEALS ARE REMITTED TO THE FILE OF THE AO FOR RE - ADJUDICATION. THE LD.AO SHALL EXAMINE THE LEDGER ACCOUNT OF THE ASSESSEE EX HIBITING DETAILS OF LOANS RECEIVED BY THE ASSESSEE THROUGH ACCOUNT PAYEE CHEQUE, AND THEREAFTER HE WOULD DIRECT THE BANK FOR PROVIDING BANK STATEMENT OF THE CREDITOR DURING THOSE PERIODS. HE WOULD SUPPLY ALL INCRIMINATING MATERIALS TO THE ASSESSEE FOR GIV ING AN EXPLANATION. THE ASSESSEE WILL BE AT LIBERTY TO SUBMIT ANY EXPLANATION OR DETAILS IN SUPPORT OF HER DEFENCE. WE OBSERVED THAT THE CO - ORDINATE BENCH IN THE ABOVE DECISION STATED THE DENIAL OF THE LOAN GIVEN TO PROP. OF PARSHWA TRADING COMPANY BY THE ASSESSEE DESERVES NOT TO BE ACCEPTED SOLELY ON THE BASIS OF HIS STATEMENT. IT IS NOT STRICT RULE OF LAW, BUT AS A GENERAL RULE OF LAW BUT AS GENERAL RULE OF PRECEDENCE, THE ADJUDICATING AUTHORITY SHALL CALL FOR OTHER MATERIAL CORROBORATION. IT WAS AL SO MENTIONED IN THE DECISION OF THE CO - ORDINATE BENCH THAT ASSESSEE WAS HAVING TEN BANK ACCOUNTS WHERE AS COPY OF BANK STATEMENTS WERE SUPPLIED TO SMT. BINTAL D. BAXI PROP. OF PARSHWA TRADING COMPANY AS A RESULT SHE COULD NOT GET OPPORTUNITY TO MATCH THE ENTRIES AVAILABLE IN HER LEDGER ACCOUNT WITH THE TRANSACTIONS APPEARING IN THE BANK STATEMENT OF THE ASSESSEE. LOOKING TO THE ABOVE FACTS AND CIRCUMSTANCES, WE ARE OF THE OPINION THAT THE IMPUGNED ORDER IN THE CASE OF THE ASSESSEE ALSO DESERVES TO BE SE T ASIDE FOR RE - ADJUDICATION. IN THE SET ASIDE PROCEEDINGS, THE ASSESSING OFFICER SHALL EXAMINE ALL THE BANK ACCOUNTS OF THE ASSESSEE AND THE LEDGER ACCOUNT OF THE PROP. OF PARSHWA TRADING COMPANY TO PROVE THE AUTHENTICITY OF THE TRANSACTIONS. THE ASSESSI NG OFFICER SHALL PROVIDE PROPER OPPORTUNITY OF EXAMINATION/CROSS EXAMINATION TO THE ASSESSEE AND THE OTHER PARTIES IN THE SET - ASIDE PROCEEDINGS. VIDE THE SAME ORDER THE CO NO. 122/AHD/2014 OF THE ASSESSEE WAS ALSO ADJUDICATED AS UNDER: - 8. WE OBSERVE THA T SEARCH ACTION WAS TAKEN PLACE IN THE CASE OF THE ASSESSEE. DURING THE COURSE OF SEARCH, THE ASSESSEE HAD ADMITTED THAT HE WAS ENGAGED IN THE BUSINESS OF ISSUING CHEQUES/DRAFTS TO VARIOUS PARTIES THROUGH DIFFERENT BANK ACCOUNTS MAINTAINED BY HIM. HE HAS ALSO ADMITTED THAT CHEQUES WERE ALSO DISCOUNTED BY HIM BY MAKING PAYMENT IN CASH IN WHICH HE USED TO CHARGE COMMISSION. DURING THE COURSE OF SEARCH PROCEEDINGS, IT WAS FOUND THAT THE ASSESSEE WAS HAVING SOME TRANSACTIONS WITH M/S. PARSHWA TRADING COMPANY TO THE AMOUNT OF RS. 73,87,331/ - . THE ASSESSEE HAS DENIED OF PROVIDING ANY SUCH KIND OF UNSECURED LOAN TO THE SAID PARTY. ON THE OTHER HAND, THE ASSESSEE HAS CLAIMED THAT THE CHEQUES RECEIVED FROM PARSHWA TRADING COMPANY WERE WITHDRAWN AND PAYMENTS WERE MADE IN CASH. WE HAVE NOTICED THAT CPU, DIARIES, VOUCHERS AND OTHER RECORDS OF THE ASSESSE WERE SEIZED DURING THE SEARCH ACTION. IT WAS ALSO NOTICED THAT ASSESSEE WAS OPERATING A NUMBER OF BANK ACCOUNTS. WE FIND FROM THE DECISION OF THE CO - ORDINATE BENC H OF ITAT AS MENTIONED ABOVE IN THE CASE OF PROP. OF PARSHWA TRADING COMPANY THAT THE EXISTENCE OF THE TRUE NATURE OF TRANSACTIONS IS REQUIRED TO BE VERIFIED FROM THE INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH. AFTER CONSIDERING THESE FACTS AND THE DECISION OF THE CO - ORDINATE BENCH IN THE CASE OF PARSHWA TRADING COMPANY, WE DO NOT FIND ANY MERIT IN THE CO OF THE ASSESSEE. THEREFORE, THE C.O. OF THE ASSESSSEE IS DISMISSED. AFTER CONSIDERING THE ABOVE FACTS AND FINDINGS, IT IS CLEAR THAT TH E CAS E OF THE ASSESSEE WAS SET - ASIDE FOR RE - ADJUDICATION AFTER CONSIDERING THAT THE ASSESSEE HAD ADMITTED DURING THE COURSE OF SEARCH THAT HE WAS ENGAGED IN THE BUSINESS OF ISSUING CHEQUES/DRAFTS TO VARIOUS PARTIES THROUGH DIFFERENT BANK S . IT WAS ALSO NOT ICED DURING THE COURSE OF SEARCH PROCEEDINGS THAT THE ASSESSEE HAD SAME MA NO S . 66 & 67 AHD/2018 (IN I.T(SS). A NO. 423 /AHD/20 13 & CO 122/AHD/2014 ) A.Y. 2008 - 09 PAGE NO SHRI DIPEN GUNVANTRAI PATEL VS. ACIT 4 TRANSACTIONS WITH PARSHWA TRADING COMPANY. DURING THE COURSE OF SEARCH ACTION IN THE CASE OF THE ASSESSEE , CPU, DIARIES, VOUCHERS AND OTHER RECORDS WERE SEIZED. IT WAS ALSO ALLEGED T HAT THE ASSESSEE WAS ENGAGED IN PROVIDING ACCOMMODATION ENTRIES. IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES, THE CASE OF THE ASSESSEE WAS SET ASIDE FOR RE - ADJUDICATION AND THE CO OF THE ASSESSEE WAS DISMISSED. AFTER GOING THROUGH THE MISC. APPLICATION OF THE ASSSESSEE, WE OBSERVE IT IS PERTINENT TO MENTION THAT THE POWER OF RECTIFICATION UNDER SECTION 254(2) OF THE ACT CAN BE EXERCISED ONLY WHEN THE MISTAKE WHICH IS SOUGHT TO BE RECTIFIED IS AN OBVIOUS PATENT MISTAKE, WHICH IS APPARENT FROM THE RECORD A ND NOT A MISTAKE WHICH IS REQUIRED TO BE ESTABLISHED BY ARGUMENTS AND LONG DRAWN PROCESS OF REASONING ON POINTS ON WHICH THERE MAY CONCEIVABLY BE TWO OPINIONS. IN VIEW OF THE ABOVE AND AFTER CONSIDERING THE DETAILED FINDINGS OF THE CO - ORDINATE BENCH IN TH E CASE OF THE ASSESSEE, WE DO NOT FIND ANY MERIT IN THE MISC. APPLICATION OF THE ASSESSEE, T HEREFORE, THE SAME IS DISMISSED. 5 . IN THE RESULT, BOTH THE MISC. APPLICATION S OF THE ASSESSEE ARE DISMISSED. ORDER PR ONOUNCED IN THE OPEN C OURT ON 06 - 06 - 201 8 SD/ - SD/ - ( MADHUMITA ROY ) ( AMARJIT SINGH ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD : DATED 06 /06 /2018 / COPY OF ORDER FORWARDED TO: - 1. ASSESSE E 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER/ , / ,