The ITO, Ward-1(2),, Bhavnagar v. Shri Mahendrakumar Ambalal Rana, Bhavnagar

IN THE INCOME TAX APPELLATE TRIBUNAL : B BENCH : AHMEDABAD ( BEFORE HONBLE SHRI MUKUL KUMAR SHRAWAT J.M. &HON' BLE SHRI N.S.SAINI A.M. ) I.T.A. NO. 1429/AHD./2009 ASSESSMENT YEAR : 2005-2006 I.T.O. WARD-1(2) BHAVNAGAR -VS- SHRI MAHEND RAKUMAR AMBALAL RANA BHAVNAGAR (PAN : ABLPR 3835N) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI K. MADHUSUDAN S R. D.R. RESPONDENT BY : NONE O R D E R PER SHRI MUKUL KUMAR SHRAWAT JUDICIAL MEMBER : THIS IS AN APPEAL AT THE BEHEST OF THE REVENUE WHI CH HAS EMANATED FROM THE ORDER OF THE LD.CIT(A)-XX AHMEDABAD DATED 29.01.2009. 2. SUBSTANTIVE GROUND WHICH HAS BEEN ARGUED BEFORE US BEING GROUND NO.1 IS REPRODUCED BELOW: 1. THE LD. CIT(A)-XX AHMEDABAD HAS ERRED IN LAW AN D ON FACTS IN DELETING THE ADDITION OF RS.14 22 972/- MADE BY THE ASSESSING OF FICER U/S.68 OF THE I.T. ACT ON ACCOUNT OF UNEXPLAINED CASH CREDIT WITHOUT PROP ERLY APPRECIATING THE FACTS OF THE CASE AND THE MATERIAL BROUGHT ON RECORD B Y THE ASSESSING OFFICER. 3. AT THE OUTSET IT IS WORTH TO MENTION THAT ON TH E DATE OF HEARING NONE HAS APPEARED FROM THE SIDE OF THE RESPONDENT ASSESSEE THOUGH THE REGISTR Y HAS PLACED ON RECORD THE ACKNOWLEDGEMENT OF POSTAL DEPARTMENT AS A PROOF OF SERVICE OF NOTICE. IN THE PAST ADJOURNMENT WAS SOUGHT BUT THEREAFTER NONE HAD APPEARED. CONSIDERING THE PAST HISTORY WE HEREBY PROCEED EX PARTE QUA THE ASSESSEE AFTER HEARING THE LD. SR. D.R. SHRI K. MA DHUSUDAN. 2 ITA NO. 1429-AHD-2009 4. FACTS IN BRIEF AS EMERGED FROM THE CORRESPONDING ASSESSMENT ORDER PASSED UNDER SECTION 143(3) DATED 31.12.2007 WERE THAT THE ASSESSEE AS AN INDIVIDUAL IS IN THE BUSINESS OF EARNING COMMISSION BROKERAGE AND ENGAGED IN SHARE TRANSACT ION. ON VERIFICATION OF THE BALANCE-SHEET IT WAS NOTICED BY THE ASSESSING OFFICER THAT THE ASSESSEE HAD TAKEN A LOAN FROM ONE SHRI RAVJIBHAI PATEL OF RS.14 22 972/- . THERE WERE CERTAIN OTHER PARTIES AS WELL. HOWEVER WE ARE CONFINED ONLY IN RESPECT OF THE LOAN OF THE SAID PA RTY. IN COMPLIANCE OF SHOW-CAUSE NOTICE THE CONFIRMATION LETTER AND A COPY OF THE DEMAND DRAFT WAS PLACED BEFORE THE ASSESSING OFFICER. A CERTIFICATE ISSUED BY STATE BANK OF SAURASHTRA HAS ALSO BEEN FURNISHED. AS PER THE SAID CERTIFICATE THERE WAS A MENTION OF A CHEQUE WHICH WAS ISSUED BY BANK OF BARODA AND DEPOSITED IN A CURRENT ACCOUNT. APART FROM THE SAID CONFIRMATION AS PER T HE ASSESSING OFFICER THE ASSESSEE HAS NOT FURNISHED THE CAPACITY OF THE SAID PERSON AND THE G ENUINENESS OF THE TRANSACTION. WITH THE RESULT THE SAID AMOUNT WAS TAXED IN THE HANDS OF THE ASSES SEE. THE MATTER WAS CARRIED BEFORE THE FIRST APPELLATE AUTHORITY. 5. BEFORE THE LD. LEARNED COMMISSIONER OF INCOME TA X(APPEALS) ALTOGETHER A NEW FACT WAS BROUGHT ON RECORD THAT THE SAID LOAN WAS RECEIVED NOT FROM SHRI RAVJIBHAI PATEL BUT FROM SHRI HARSHADBHAI V. SHAH. IT WAS STATED THAT BY MISTAKE IN THE BOOKS OF ACCO UNTS A WRONG NAME WAS ENTERED. AN AFFIDAVIT TO THAT EFFECT HAS ALSO BEEN FURNISHED. IT WAS EXPLAINED THAT BOTH OF THEM ARE RESIDENT OF USA AND RELATED TO EACH OTHER. THEREFOR E THE MISTAKE HAS HAPPENED. ON RECEIVING THE DETAILS THE CORRECT FACTS WERE STATED BEFORE THE L D. LEARNED COMMISSIONER OF INCOME TAX(APPEALS) AS ARGUED. ON RECEIVING CERTAIN NEW I NFORMATION THE LD. LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS CALLED FOR A REMAND REPORT FROM THE ASSESSING OFFICER. THE LD. LEARNED COMMISSIONER OF INCOME TAX(APPEALS) HAS CON SIDERED THE REMAND REPORT AS ALSO THE EVIDENCES FILED AND THEREAFTER COMMENTED THAT THE A SSESSING OFFICER HAD NOT REBUTTED IN THE REMAND REPORT THAT THE EVIDENCES PRODUCED BY THE AP PELLANT WERE INCORRECT. AS PER THE LD. LEARNED COMMISSIONER OF INCOME TAX(APPEALS) THE ASSESSEE H AS DISCHARGED THE ONUS BY FILING BANK CERTIFICATE AND COPY OF THE PASSPORT. IN HIS OPINIO N THE ASSESSEE HAS PROVED THE IDENTITY GENUINENESS AND THE CREDITWORTHINESS OF THE SAID CR EDITORS. AT THE END THEREFORE THE IMPUGNED ADDITION WAS DELETED. 3 ITA NO. 1429-AHD-2009 6. THE LD. D.R. HAS VEHEMENTLY OPPOSED THE MANNER I N WHICH THE LD. LEARNED COMMISSIONER OF INCOME TAX(APPEALS) HAS GRANTED RELIEF. HE HAS E MPHASIZED THAT THE NAME OF THE CREDITOR WAS CHANGED AND ALTOGETHER NEW FACTS WERE BROUGHT ON RE CORD WHICH WERE ACCEPTED BY THE LD.CIT(A) WITHOUT PROPER INVESTIGATION. EVEN THE POINTS MENTI ONED IN THE REMAND REPORT HAVE ALSO BEEN BRUSHED ASIDE. THE LD. D.R. HAS REFERRED THE PORTIO N OF THE REMAND REPORT FOR READY REFERENCE IS REPRODUCED BELOW: FROM HIS SUBMISSION IT IS TRANSPIRED THAT THE ASSE SSEE TILL DATE FAILED TO PRODUCE THE ORIGINAL / VOUCHER MADE FOR HIS ACCOUNTING PURPOS E RELATING TO ACCEPTING RS.14 22 972/-. THE ASSESSEE WAS SPECIFICALLY REQUESTED TO EXPLAI N WHY THE MISTAKE OF WRONG ENTRY MADE IN YOUR BOOKS OF ACCOUNTS WAS NOT POINTED OU T DURING THE ASSESSMENT PROCEE- DINGS. BUT NO EXPLANATION OFFERED BY THE ASSESSE E IT IS ALSO WORTHWHILE TO NOTE THAT $HRI RAVJIBHAI PATEL HAS ALSO CONFIRMED THE SAME AMOUNT IN CONFIRMATION LETTER DATED 2511.2007 AND PUT HIS SIGN ON THAT. COPY OF THE SAME LETTER IS ENCLOSED HEREWITH. FURTHER THE ASSESSEE HAS NOT FURNISHED THE EVIDE NCE OF THE SOURCE OF INCOME OF LOANER / DEPOSITOR SHRI HARSHAD V. SHAH. THE ASSE SSEE STATED THAT 'C' OF HIS SUBMISSION DATED 08.09.2008 'WE TRIED TO OBTAIN R ETURN OF INCOME DETAILS OF THE DEPOSITORS FOR FURTHER SUBMITTING BEFORE YOUR HON OUR. HOWEVER THE DEPOSITOR BEING A THIRD PARTY WAS NOT CONVINCED ABOUT THE NECESSI TY OF SUCH DETAILS NOR WAS HE COMFORTABLE ABOUT DISCLOSING HIS PERSONAL INCOME DETAILS TO US' THOUGH SHRI HARSHAD V SHAH DEPOSITOR HAS DECLARED $HRI MAHEN DRABHAI RANA IS ONE OF THE BEST FRIEND IN HIS CONFIRMATION LETTER DATED 03.0 3.2008. THUS THE GENUINENESS CREDIT WORTHINESS AND IDE NTIFY OF HARSHAD V SHAH / RAVJIBHAI PATEL IS NOT SATISFACTORILY PROVED AS B EING ABOVE STATED REASONS. ' 7. ON HEARING THE OBJECTIONS AS RAISED FROM THE SID E OF THE REVENUE AS WELL AS ON CAREFUL PERUSAL OF THE ORDERS OF THE AUTHORITIES BELOW WE ARE OF THE CONSCIENTIOUS VIEW THAT THE LD. LEARNED COMMISSIONER OF INCOME TAX(APPEALS) SHOULD HAVE GIV EN CERTAIN SPECIFIC FINDINGS IN RESPECT OF IMPUGNED TRANSACTION. WE HAVE NOTICED THAT THE ASSE SSING OFFICER HAS POINTED OUT THAT THE ORIGINAL VOUCHER WAS NOT PRODUCED THOUGH IT WAS DEMANDED T HROUGH WHICH THE DEMAND DRAFT WAS PURCHASED. THE ASSESSING OFFICER HAS ALSO ASKED FRO M THE ASSESSEE DURING THE REMAND PROCEEDINGS TO FURNISH THE INCOME TAX RECORD OF SHRI HARSHAD V SHAH TO ASCERTAIN HIS CREDITWORTHINESS BUT THOSE DETAILS WERE NOT FURNISHED. LIKEWISE IT WAS ALSO DESIRABLE TO ASCERTAIN THE STATUS OF THE 4 ITA NO. 1429-AHD-2009 TRANSACTION WHICH WAS EARLIER STATED BY REFERRING A N ANOTHER NAME OF RAVJIBHAI PATEL. IT WAS VERY NORMAL TO QUESTION THE ASSESSEE ABOUT THE CHEQUES A ND SOME BANK ACCOUNTS OR CURRENT ACCOUNTS AS ALSO THE BANK CERTIFICATES WHICH WERE EARLIER SUBMI TTED BY THE ASSESSEE. THERE IS NO FINDING OF LD. LEARNED COMMISSIONER OF INCOME TAX(APPEALS) THAT TH OSE CHEQUES OR DEMAND DRAFTS HAVE ACTUALLY NOT BEEN MEANT FOR THE ASSESSEE. FURTHER IT WAS EX PECTED TO EXAMINE THE BANK ACCOUNT OF SHRI HARSHAD V SHAH ALONG WITH OTHER CORROBORATIVE EVIDE NCES SO AS TO AFFIRM HIS CREDITWORTHINESS AS REQUIRED UNDER SECTION 68 OF THE I.T. ACT. SINCE TH ESE FEW THINGS WERE LACKING IN THE ORDER OF THE LD. LEARNED COMMISSIONER OF INCOME TAX(APPEALS) TH EREFORE WE DEEM IT FIT TO RESTORE THIS ISSUE BACK TO THAT STAGE SO THAT HE CAN GIVE HIS CATEGORI CAL FINDING IN RESPECT OF THE QUESTIONS WHICH REMAINED UNANSWERED AS DESCRIBED HEREINABOVE. WITH THESE REMARKS WE RESTORE THIS ISSUE BACK TO THE LD. LEARNED COMMISSIONER OF INCOME TAX(APPEALS) . THEREFORE THE GROUND RAISED BY THE REVENUE MAY BE TREATED AS ALLOWED FOR STATISTICAL P URPOSES. 8. IN THE RESULT THE REVENUES APPEAL IS ALLOWED F OR STATISTICAL PURPOSES. THE ORDER PRONOUNCED IN THE OPEN COURT ON 25.02. 2011. SD/- SD/- (N.S.SAINI) (MUKUL KUMAR SHRAW AT) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 25/ 02 / 2011 COPY OF THE ORDER IS FORWARDED TO : 1) THE ASSESSEE 2) THE DEPARTMENT. 3) CIT(A.) CONCERNED 4) CIT CONCERNED 5) D.R. ITAT AHMEDABAD. TRUE COPY BY ORDER DEPUTY REGISTRAR ITAT AHMEDABAD TALUKDAR/SR.P.S.