Shri Nileshbhai Khandubhai Patel,, Surat v. The Income Tax Officer, Ward-1(2)(3),, Surat

ITA 1820/AHD/2016 | 2012-2013
Pronouncement Date: 13-10-2016 | Result: Allowed

Appeal Details

RSA Number 182020514 RSA 2016
Assessee PAN ABCPP9221D
Bench Ahmedabad
Appeal Number ITA 1820/AHD/2016
Duration Of Justice 3 month(s) 6 day(s)
Appellant Shri Nileshbhai Khandubhai Patel,, Surat
Respondent The Income Tax Officer, Ward-1(2)(3),, Surat
Appeal Type Income Tax Appeal
Pronouncement Date 13-10-2016
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted SMC
Tribunal Order Date 13-10-2016
Date Of Final Hearing 10-10-2016
Next Hearing Date 10-10-2016
Assessment Year 2012-2013
Appeal Filed On 07-07-2016
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH AHMEDABAD BEFORE SHRI RAJPAL YADAV JUDICIAL MEMBER ./ ITA.NO.1820/AHD/2016 / ASSTT. YEAR: 2012-2013 SHRI NILESHBHAI KHANDUBHAI PATEL PROP. OF M/S.GAYATRI ELECTRONICS 3 KALINDI APARTMENT MAJURA GATE SURAT 395 001. PAN : ABCPP 9221 D VS ITO WARD - 1(2)(3) SURAT. ! / (APPELLANT) '# ! / (RESPONDENT) ASSESSEE BY : SHRI RAJESH UPADHYAY REVENUE BY : SHRI G.C. DAMINI SR.DR / DATE OF HEARING : 10/10/2016 / DATE OF PRONOUNCEMENT: 13/10/2016 $%/ O R D E R THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL AGAIN ST ORDER OF THE LD.CIT(A)-II SURAT DATED 1.6.2016 PASSED FOR ASSTT .YEAR 2012-13. 2. IN THE FIRST GROUND OF APPEAL THE ASSESSEE HAS PLEADED THAT THE LD.CIT(A) HAS ERRED IN CONFIRMING ADDITION OF RS.25 71 000/- WHICH WAS ADDED BY THE AO WITH THE AID OF SECTION 68 OF THE I NCOME TAX ACT 1961. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE WA S RUNNING A PROPRIETORSHIP CONCERN IN THE NAME AND STYLE OF GAYATRI ELECTRONIC S. HE HAS ENGAGED IN TRADING OF ELECTRONICS GOODS. HE HAS FILED HIS RET URN OF INCOME 7.8.2012 DECLARING TOTAL INCOME AT RS.2 86 900/-. ON SCRUTI NY OF THE ACCOUNTS IT REVEALED TO THE AO THAT THE ASSESSEE HAS SHOWN TOTA L UNSECURED LOAN OF RS.52 28 246/-. OUT OF THIS LOAN HE HAS RECEIVED A LOAN OF RS.25 71 100/- ITA NO.1820/AHD/2016 2 FROM THREE PERSONS VIZ. DIPAK K. PATEL (BROTHER) RS.4 50 000/- SHRI KHANDUBHAI R. PATEL RS.6 10 000/- AND SHRI VIJAY K. PATEL OF RS.15 11 100/-. IN ORDER TO EXPLAIN GENUINENESS OF LOANS TAKEN BY T HE ASSESSEE THE ASSESSEE HAS SUBMITTED THAT ALL THREE CREDITORS ARE ASSESSED TO TAX. HE HAS PROVIDED THEIR COPIES OF RETURNS OF INCOME AND PANS. WITH T HE DEPARTMENT. THE ASSESSEE HAS FILED COPIES OF BANK STATEMENTS FROM W HERE THESE LOANS WERE TAKEN. HE HAS ALSO FILED COPIES OF BANK STATEMENTS AND DETAILS FROM WHERE MONEY HAS COME TO THE ACCOUNT OF THE CREDITORS. HE HAS FILED CONFIRMATION. THE LD.AO WAS NOT SATISFIED WITH REGARD TO CREDIT-W ORTHINESS OF THE CREDITORS. THE APPEAL TO THE LD.CIT(A) DID NOT BRING ANY RELIE F TO THE ASSESSEE. 4. WITH THE ASSISTANCE OF THE LD.REPRESENTATIVES I HAVE GONE THROUGH THE RECORD CAREFULLY. BEFORE THE LD.CIT(A) THE ASSESS EE HAS FILED WRITTEN SUBMISSIONS WHICH HAS BEEN REPRODUCED BY THE LD.CI T(A) ON PAGE NOS.7 TO 9 OF IMPUGNED ORDER. SUCH WRITTEN SUBMISSIONS READ A S UNDER: 5. DURING THE APPELLATE PROCEEDINGS THE A.R. OF T HE APPELLANT HAS FILED WRITTEN SUBMISSION AND THE CASE WAS HEARD. DURING T HE COURSE OF THE APPELLATE PROCEEDINGS VIDE HIS LETTER DTD. 19.04.2 016 THE APPELLANT SUBMITTED THAT 'LR. AO HAS GIVEN THE FINDING IN PARA 4.5 4.6 & 4.7 OF HIS ASSESSMENT ORDER THAT THE APPELLANT HAS FILED CONFIRMATION OF THE DEPOSITORS LEDGER ACCOUNT ACKNOWLEDGMENT OF ROI AND APPELLANT'S BANK STATEMENT. ON THE BASIS OF THESE EVIDENCES THE AO ISSUED NOTICE U/S. 133(6) UPON THE DEPOSITORS. ALL THE THREE DEPOSITORS HAVE DULY COMP LIED AO'S NOTICE. IT IS ALSO AN ACCEPTED FACT THAT THE APPELLANT HAS RECEIVED DE POSIT THROUGH ACCOUNT PAYEE CHAQUES. CHAQUES ARE APPEARING IN THE BANK AC COUNT OF DEPOSITORS. OUTSTANDING SUM OF DEPOSITS ARE ALSO APPEARING IN T HEIR RESPECTIVE BALANCE SHEET AS ON 31.03.2012. THE SAID DEPOSIT GETS TALLI ED WITH THE AUDITED BALANCE SHEET OF THE APPELLANT. UNDER THE CIRCUMSTA NCES LEGAL ONUS CAST UPON THE APPELLANT IS FULLY DISCHARGED IN TERMS OF SEC. 68 OF THE ACT. IF THE DEPOSITOR HAVE NOT EXPLAINED A SPECIFIC QUERY OF TH E AO OR THEY HAVE MADE CASH DEPOSIT IN THEIR BANK ACCOUNT PRIOR TO ISSUE OF A CHAQUE TO THE APPELLANT COULD NOT DRAWN ADVERSE INFERENCE IN THE CASE OF THE APPELLANT AND NO ADDITION CAN BE MADE FOR THE SAID REASON. ITA NO.1820/AHD/2016 3 THUS THE ADDITION MADE BY THE AO IS TOTALLY ILLEGA L AND UNJUSTIFIABLE ONLY ON THE ABOVE STATED FACTS. EVEN THOUGH I AM PRODUCING SOURCE OF EACH DEPOSIT DATE WISE AND DEPOSITOR WISE IN FOLLOWING TABLES. A) SHRI DIPAK K. PATEL RS. 4 50 000/-:: RECEIPT OF DEPOSIT AS PER CONFIRMATION SOURCE OF DEPOSIT GATHERED FROM HIS BANK A/C DATE AMOUNT DATE AMOUNT PARTICULARS 20/03/2012 50 000/- 13/03/2012 40 000/- OUT OF CASH ON HAND 28/03/2012 1 00 000/- 20/03/2012 20 000/- SALARY FROM GAYATRI ELECTRONICS 31/03/2012 3 00 000/- 28/03/2012 90 000/- LOAN FROM HETVI D. PATEL 30/03/2012 3 00 000/- LOAN FROM AMBALAL J. PATEL TOTAL 4 50 000/- TOTAL 4 50 000/- B) KHANDUBHAI R. PATEL RS. 6 10 000/-:: RECEIPT OF DEPOSIT AS PER CONFIRMATION SOURCE OF DEPOSIT GATHERED FROM HIS BANK A/C DATE AMOUNT DATE AMOUNT PARTICULARS 19.04.2011 3 00 000/- 16.04.2011 3 10 000 / - LOAN FROM SITARAM U. JOSHI BY CHEQUE 25.05.2011 2 50 000/- 24.05.2011 6 00 000 /- LOAN FROM SANJAY R. YADAV BY CHEQUE 31.05.2011 1 60 000/- 13.06.2011 4 50 000 / - LOAN FROM SANJAY R. YADAV BY CHEQUE 24.06.2011 1 70 000/- 16.12.2011 35 000/- GAYATRI ELECTRONICS ITA NO.1820/AHD/2016 4 14.09.2011. 77 700/- DURING THE YEAR 2 40 000 /- GAYATRI ELECTRONICS ON DIFFERENT DATES ON ACCOUNT OF SALARY (1 80 000) AND RENT (70 000). 27.09.2011 4 25 000/- 15.12.2011 35 000/- * 25.01.2012 30 000/- 20.03.2012 50 000/- 28.03.2012 20 000/- TOTAL 15 11 100/- TOTAL 16 35 000/- 5. SECTION 68 OF THE INCOME TAX ACT 1961 CONTEMPLA TES THAT WHERE ANY SUM IS FOUND CREDITED IN THE BOOKS OF AN ASSESSEE M AINTAINED FOR ANY PREVIOUS YEAR AND THE ASSESSEE OFFERS NO EXPLANATION ABOUT THE NATURE AND SOURCE THEREOF OR THE EXPLANATION OFFERED BY THE ASSESSEE IS NOT IN THE OPINION OF THE AO SATISFACTORY THEN THE SUM SO CREDITED IN THE AC COUNTS MAY BE TREATED AS INCOME OF THE ASSESSEE OF THAT PREVIOUS YEAR. DURI NG THE COURSE OF HEARING THE LD.COUNSEL FOR THE ASSESSEE TOOK ME THROUGH THE SUPPORTING DETAILS. MAJOR CREDITOR IS SHRI VIJAY K. PATEL. HE HAS GIVEN A SU M OF RS.15 11 100/- ON NUMBER OF DATES. THE FIRST AMOUNT WAS GIVEN ON 19. 4.2011. ACCORDING TO THE ASSESSEE SOURCE OF THIS AMOUNT IS A LOAN FROM SHRI SITRAM JOSHI BY CHEQUE ON 16.4.2011. IN ORDER TO BUTTRESS THIS THE LD.COUNS EL FOR THE ASSESSEE TOOK ME THROUGH PAGE NO.102 OF THE PAPER BOOK WHERE COPY O F BANK ACCOUNT NO.71762010025348 WITH SYNDICATE BANK HAS BEEN PLAC ED ON RECORD. SHRI VIJAY K. PATEL HAS RECEIVED A SUM OF RS.3 10 000/- THROUGH ACCOUNT PAYEE CHEQUE BEARING NO.543833. OUT OF THIS AMOUNT A SU M OF RS.3 00 000/- WAS ADVANCED TO THE ASSESSEE. SHRI VIJAY K. PATEL IDEN TIFIED AS LOANER AND HE HAS ITA NO.1820/AHD/2016 5 OWNED UP ADVANCEMENT OF AMOUNTS TO THE ASSESSEE. S HRI VIJAY K. PATEL IS ASSESSED TO TAX. NOW HOW THE AO CAN DOUBT THE CRED IT-WORTHINESS OF THIS AMOUNT ? IF HE CAN ARRANGE AN AMOUNT OF RS.3 00 00 0/- FROM A THIRD PARTY AND THEREAFTER ADVANCE TO HIS BROTHER WHAT IS WRON G IN THE TRANSACTION ? SIMILARLY HE TOOK A LOAN OF RS.6 00 000/- FROM SHR I SANJAY YADAV. THIS WAS ALSO TAKEN BY WAY OF ACCOUNT PAYEE CHEQUE BEARING N O.542627 DATED 24.5.2011. OUT OF THIS A LOAN OF RS.2 50 000/- WA S GIVEN TO THE ASSESSEE. SIMILARLY BANK STATEMENTS OF OTHER CREDITORS HAVE BEEN PLACED ON RECORD AND IT HAS BEEN POINTED OUT HOW THOSE CREDITORS RECEIVE D FUNDS FOR MAKING ADVANCEMENT TO THE ASSESSEE. GRIEVANCE OF THE LD.R EVENUE AUTHORITIES WAS THAT THESE TRANSACTIONS APPEAR TO HAVE BEEN AN ARRA NGED TRANSACTION. I AM OF THE VIEW THAT EVEN IF THESE ARE ARRANGED TRANSACTIO N THEN PARTIES TO THE TRANSACTIONS ARE IDENTIFIABLE. THEY HAVE CARRIED O UT TRANSACTION THROUGH BANKING CHANNEL. THEY ARE SUPPORTING THEIR TRANSAC TIONS. THEIR INDIVIDUAL CASES COULD BE EXPLORED. HOW IT CAN BE HELD THAT M ONEY IN THE HANDS OF THE ASSESSEE UNEXPLAINED ONE. AFTER MAKING AN ANALYSIS OF THE SUPPORTING EVIDENCES AVAILABLE IN THE PAPER BOOK STARTING FROM PAGE NOS.39 TO 63 AND THEREAFTER AT PAGE NOS.98 TO 104 I AM SATISFIED TH AT THE ASSESSEE HAS DISCHARGED BURDEN PUT UPON HIM BY VIRTUE OF SECTION 68 OF THE INCOME TAX ACT 1961. I ALLOW THIS GROUND OF APPEAL AND DELET E ADDITION. 6. NEXT GROUND OF GRIEVANCE OF THE ASSESSEE IS THAT THE LD.CIT(A) HAS ERRED IN CONFIRMING THE ADDITION OF RS.3 25 000/-. 7. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE HA S SOLD A MARUTI WAGON R FOR A CONSIDERATION OF RS.3 25 000/-. THE LD.AO DI D NOT ACCEPT THIS CLAIM OF THE ASSESSEE. IN SUPPORT OF THIS CONTENTION THE A SSESSEE HAS PLACED ON RECORD A CONFIRMATION FROM SHRI AMIT ZAVERI WHO PURCHASED WAGON R FOR SALE. HE ITA NO.1820/AHD/2016 6 WAS DOING BUSINESS OF SALE AND PURCHASE OF CARS ON COMMISSION BASIS. THE ASSESSEE HAS GIVEN MOBILE NUMBER AND HIS OTHER DETA ILS. BUT THE LD.AO WAS NOT SATISFIED WITH THE CLAIM OF THE ASSESSEE. HE O BSERVED THAT SHRI AMIT ZAVERI FAILED TO SUBMIT COPY OF CASH BOOK LEDGER A CCOUNT COPY OF ASSESSEE FROM HIS BOOKS OF ACCOUNTS IN ORDER TO JUSTIFY THE CLAIM. ACCORDINGLY THE LD.AO HAS MADE ADDITION OF RS.3 25 000/-. APPEAL T O THE LD.CIT(A) DID NOT BRING ANY RELIEF TO THE ASSESSEE. 8. ON DUE CONSIDERATION OF THE FACTS AND CIRCUMSTAN CES I FAILED TO UNDERSTAND THE APPROACH OF THE AO. THE ASSESSEE WA S OWNER OF THIS CAR. HE HAS REDUCED THIS AMOUNT FROM HIS BLOCK OF ASSETS B ECAUSE ONE OF THE ASSETS HAS BEEN ELIMINATED. BY MAKING A HIGHER CLAIM OF S ALE CONSIDERATION ASSESSEE WOULD REDUCE HIGHER VALUE IN THE BLOCK OF ASSETS THAT WILL FETCH LOWER DEPRECIATION TO THE ASSESSEE. ONCE AN ASSET WAS FO RMING PART OF THE BLOCK AND IF IT HAS BEEN TAKEN OUT FROM THERE AND THEN HOW T HE AO CAN DOUBT THE SALE ? I ALLOW THIS GROUND OF APPEAL AND DELETE THE ADDIT ION. 9. THE NEXT GRIEVANCE OF THE ASSESSEE IS THAT THE L D.CIT(A) HAS ERRED IN CONFIRMING THE ADDITION OF RS.1 16 300/-. 10. WITH THE ASSISTANCE OF THE LD.REPRESENTATIVES I HAVE GONE THROUGH THE RECORD CAREFULLY. DURING THE COURSE OF HIS BUSINES S THE ASSESSEE HAS MADE PURCHASES FROM M/S.CHANDA SALES. HE HAS PLACED ON RECORD COPY OF THE LEDGER ACCOUNT IN RESPECT OF CHANDA SALES WHICH IS AVAILABLE AT PAGE NOS.109 TO 115. THE ASSESSEE HAS SHOWN TOTAL PURCHASES OF RS.5 70 340/-. THE AO DID NOT DOUBT ABOUT VARIOUS PURCHASES EXCEPT RS.1 16 00 0/-. THE AO WAS OF THE VIEW THAT CHANDA SALES DID NOT RESPOND TO HIS QUERY AND THE ASSESSEE FAILED TO SUBMIT SUPPORTING DETAILS. ACCORDINGLY HE DISALLO WED PURCHASE COST AND APPEAL TO THE CIT(A) DID NOT BRING ANY RELIEF TO TH E ASSESSEE. ITA NO.1820/AHD/2016 7 11. ON DUE CONSIDERATION OF THE ABOVE FACTS AND CIR CUMSTANCES I AM OF THE VIEW THAT THE LD.REVENUE AUTHORITIES HAVE FAILED TO APPRECIATE BUSINESS TRANSACTION. M/S.CHANDA SALES HAS CLOSED ITS BUSIN ESS AND CHANGED ITS ADDRESS. THE ASSESSEE HAS PURCHASED CERTAIN PRODUC TS OF VIDECON FROM THIS CONCERN . HE HAS SOLD ALL THESE PRODUCTS. AFTER SA LES HAVE BEEN ACCEPTED THEN HOW THE PURCHASES CAN BE DENIED ? SIMILARLY ASSES SEE HAS ALLEGED THAT HE HAS PURCHASED WASHING MACHINE AND OTHER VIDEOCON PRODUC TS. IF SALE OF THESE ITEMS CAN BE VERIFIED FROM SALES REGISTER OF THE AS SESSEE THEN MERELY ON THE BASIS OF NON-SUBMISSION OF SUPPORTING PURCHASE DETA ILS FROM M/S.CHANDA SALES PURCHASES CANNOT BE DISALLOWED. THEREFORE I ALLOW THIS GROUND OF APPEAL AND ALSO DELETE THE ADDITION. 12. IN THE RESULT APPEAL OF THE ASSESSEE IS ALLOWE D. ORDER PRONOUNCED IN THE COURT ON 13 TH OCTOBER 2016 AT AHMEDABAD. SD/- (RAJPAL YADAV) JUDICIAL MEMBER