The DCIT, Circle-9,, Surat v. Shri Maheshbhai Dhanjibhai Mangukiya, Mumbai

ITA 2195/AHD/2011 | 2008-2009
Pronouncement Date: 29-09-2016 | Result: Allowed

Appeal Details

RSA Number 219520514 RSA 2011
Assessee PAN ACJPM1810F
Bench Ahmedabad
Appeal Number ITA 2195/AHD/2011
Duration Of Justice 5 year(s) 26 day(s)
Appellant The DCIT, Circle-9,, Surat
Respondent Shri Maheshbhai Dhanjibhai Mangukiya, Mumbai
Appeal Type Income Tax Appeal
Pronouncement Date 29-09-2016
Appeal Filed By Department
Order Result Allowed
Bench Allotted C
Tribunal Order Date 29-09-2016
Date Of Final Hearing 27-09-2016
Next Hearing Date 27-09-2016
Assessment Year 2008-2009
Appeal Filed On 02-09-2011
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH AHMEDABAD .. BEFORE SHRI N.K. BILLAIYA ACCOUNTANT MEMBER AND SHRI MAHAVIR PRASAD JUDICIAL MEMBER ./ I.T.A. NO.2195/AHD/2011 ( / ASSESSMENT YEAR : 2008-09) THE DY.CIT CIRCLE-9 SURAT 395 001 / VS. SHRI MAHESHBHAI DHANJIBHAI MANGUKIYA B-5 ANAND ANAND MALABAR MILL ROAD MULAND COLONY MUMBAI $ ./ ./ PAN/GIR NO. : ACJPM 1810F ( $' / APPELLANT ) .. ( ($' / RESPONDENT ) $') / APPELLANT BY : SMT.VIBHA BHALLA CIT-DR ($'*) / RESPONDENT BY : -NONE- + *-. / DATE OF HEARING 27/09/2016 /012*-. / DATE OF PRONOUNCEMENT 29/09/2016 / O R D E R PER SHRI MAHAVIR PRASAD JUDICIAL MEMBER : THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST TH E ORDER OF THE COMMISSIONER OF INCOME TAX(APPEALS)-V SURAT DATED 17/05/2011 FOR THE ASSESSMENT YEAR (AY) 2008-09. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL:- ITA NO.2195/AHD /2011 DCIT VS. SHRI MAHESHBHAI DHANJIBHAI MANGUKIYA ASST.YEAR 2008-09 - 2 - [1] ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW THE LD.CIT(A) HAS ERRED IN DELETING THE ADDITION MADE B Y THE ASSESSING OFFICE AT RS.5 61 45 000/- ON ACCOUNT OF BOGUS LOAN S U/S.68. [2] ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW THE LD.CIT(A) OUGHT TO HAVE UPHELD THE ORDER OF THE ASS ESSING OFFICER. [3] IT IS THEREFORE PRAYED THAT THE APPELLATE OR DER OF THE LD.CIT(A) MAY BE CANCELLED AND THE ORDER OF THE A.O. MAY BE U PHELD. 2. ON THE DATE OF HEARING NONE APPEARED ON BEHALF OF ASSESSEE HOWEVER AN ADJOURNMENT APPLICATION DATED 29/09/2016 HAS BEEN FILED BUT THE SAME WAS REJECTED. SINCE THERE IS NO APPEARAN CE ON BEHALF OF ASSESSEE WE PROCEED TO DECIDE THE APPEAL EX - PARTE QUA THE ASSESSEE ON THE BASIS OF DETAILS AVAILABLE ON RECORD. 2.1. THE RELEVANT FACTS AS CULLED OUT FROM THE MATE RIALS ON RECORD ARE AS UNDER:- 2.2. ASSESSEE IS AN INDIVIDUAL/FIRM AND STATED TO B E ENGAGED IN THE BUSINESS OF EMBROIDERY ON JOB WORK. ASSESSEE FILE D HIS RETURN OF INCOME ON 29/09/2008 DECLARING TOTAL INCOME AT RS.6 17 028/-. THE CASE WAS SELECTED FOR SCRUTINY AND THEREAFTER ASSESSMENT WAS FRAMED U/S. 143(3) OF THE INCOME TAX ACT 1961 (HEREINAFTER REF ERRED TO AS 'THE ACT') VIDE ORDER DATED 30/12/2010 AND THE TOTAL INCOME WAS DETERMINED AT RS.5 67 62 030/-. THE ASSESSING OFFICER (AO) IN T HE ASSESSMENT ORDER VIDE PARA-5 HAS HELD AS UNDER:- 5. UNSECURED LOANS ITA NO.2195/AHD /2011 DCIT VS. SHRI MAHESHBHAI DHANJIBHAI MANGUKIYA ASST.YEAR 2008-09 - 3 - 5.1. THE ASSESSEE WAS FOUND TO HAVE INITIATED A NE W BUSINESS IN THE FORM OF PURCHASE OF EMBROIDERY MACHINE IN THIS YEAR . THE ASSESSEE HAS FILED THE COPIES OF ASSETS PURCHASED WHICH ARE VALU ED AT RS.5 25 06 569/- AS PER TABLE FOR DEPRECIATION FILE D ALONG WITH THE BALANCE SHEET. THE ASSESSEE HAS PURCHASED AN IMPOR TED EMBROIDERY MACHINE NAMED TAJIMA EMBROIDERY MACHINE WORTH RS.4 4 49 064/- IT WAS SEEN THAT THE ASSESSEE HAS SHOWN LOANS IN HIS PERSONAL CAPACITY AND IN THE NAME OF ITS PROPRIETAR Y CONCERN AS SEEN FROM THE AUDITED BALANCE SHEET FILED ON RECORD. 2.3. ASSESSEE TOOK THE UNSECURED LOAN TO THE TUNE OF RS.5 61 45 000/- AND FILED CERTAIN DOCUMENTS IN SUPPORT OF HIS CONTE NTION BUT AO DID NOT AGREE WITH THE CONTENTION OF THE ASSESSEE AND THERE AFTER ASSESSEES INCOME WAS COMPUTED U/S.68 OF THE ACT. INCOME AS PER COMPUTATION ENCLOSED WITH RETURN OF INCOME FOR A.Y. 2008-09 ADD: ADDITION ON ACCOUNT OF BOGUS LOANS U/S.68 RS.5 61 45 000 3. AGGRIEVED BY THE ORDER OF THE AO ASSESSEE PREF ERRED A STATUTORY APPEAL BEFORE THE CIT(A) WHO HAS HELD AS UNDER:- DECISION : 6. I HAVE GONE THROUGH THE ASSESSMENT ORDER AS WEL L AS SUBMISSIONS OF THE APPELLANT. I HAVE ALSO CALLED T HE ASSESSMENT RECORDS FROM THE A.O. AND HAVE GONE THROUGH THE SAM E. AFTER GOING THROUGH THE FACTS OF THE CASE I HAVE COME TO THE CONCLUSIONS ITA NO.2195/AHD /2011 DCIT VS. SHRI MAHESHBHAI DHANJIBHAI MANGUKIYA ASST.YEAR 2008-09 - 4 - THAT THE A.O. WAS NOT CORRECT IN TAKING DECISION TO TREAT THE LOANS AS BOGUS. THE REASONS FOR THE SAME ARE AS UNDER: I. THE ASSESSMENT HAS BEEN MADE IN HASTE WHICH IS EVID ENT FROM VARIOUS WRONG DATA MENTIONED IN THE ASSESSMENT ORDER. FOR EXAMPLE THE TOTAL LOANS TAKEN COMES TO RS.6 86 45000/- WHILE IN THE ASSESSMENT ORDER IT HAS BEEN MENTIONED AT RS.5 61 45 000/-. FURTHER THE A.O. EVEN FORGOT TO DISALLOW THE INTEREST COMPONENT ON THESE SO CALLED BOGUS LOA NS. II. IN THE ASSESSMENT ORDER IT APPEARS THAT THE A.O. W ANTED TO MAKE ADDITION OF LOANS FROM 11 PARTIES WHO ADVANCED LOAN TO THE APPELLANT AFTER TAKING ADVANCES FROM NATURAL BIO- ORGANIC PRODUCT A APPELLANTS BROTHERS CONCERN OF THE APPELLANT. THIS IS EVIDENT FROM THE FACT THAT THE A.O. HAS NOT DISCUSSED ABOUT LOANS FROM 9 OTHER PARTIES AT ALL ALTHOUGH ALL DETAILS WERE AVAILABLE WITH HIM. III. ON THE ONE HAND THE A.O. WRITES IN CONCLUDING PART THAT THE LOANS TAKEN ARE NOT GENUINE WHILE ON THE OTHER HAND HE WRITES THAT THE SOURCE OF THESE LOANS ARE TERM LOAN TAKEN BY M/S.NATURAL BIO-ORGANIC PRODUCT FROM BANK OF BARODA . WHEN THE SOURCE OF LOAN IS EXPLAINED THE QUESTION OF GENUINENESS DOES NOT ARISE. HENCE THE SOURCE OF ADVANCES/LOANS MADE TO THE APPELLANT BY THE 11 PART IES STANDS EXPLAINED. IV. IN THE CASE OF ALL CREDITORS LOAN CONFIRMATIONS AL ONG WITH ADDRESSES WERE SUBMITTED DURING THE ASSESSMENT PROCEEDINGS. ALL THE PARTIES ARE HAVING PAN EXCEPT ONE WHO IS AN AGRICULTURIST. IN MOST OF THE CASES PART IES ARE ASSESSED TO TAX ESPECIALLY THOSE PARTIES WHOSE SOUR CES OF LOAN ADVANCED TO THE APPELLANT ARE NOT RELATED TO T HE TERM LOAN TAKEN BY M/S.NATURAL BIO-ORGANIC PRODUCT FROM BANK OF BARODA LIKE OTHER 11 PARTIES. FURTHER MOST OF THE CREDITORS HAVE FILED AFFIDAVIT ALSO BEFORE ME ALTHO UGH IT WAS NOT A LEGAL NECESSITY. ITA NO.2195/AHD /2011 DCIT VS. SHRI MAHESHBHAI DHANJIBHAI MANGUKIYA ASST.YEAR 2008-09 - 5 - V. THE A.O. HAS ADDED ALL THE LOANS IN A VERY CAUSAL M ANNER WHICH CAN BE SEEN FROM HIS CONCLUDING REMARK WHICH IS REPRODUCED AS UNDER: ACCOUNTS OF ALL THE 11 LOAN CREDITORS OF VARACHHA CO- OPERATIVE BANK WERE OPENED ON SAME DATE I.E. 03.06. 2002 AND WERE INTRODUCED BY SHRI PRAVIN D.MANGUKIYA THE BROTHER OF THE ASSESSEE. NONE OF THE LOAN CREDITOR S WAS CONNECTED TO BIO-FERTILIZER OR EMBROIDERY BUSINESS. NO TRANSACTION WAS SEEN DURING THE YEAR OTHER THAN THE CHEQUES OBTAINED FROM NATURAL BIO-ORGANIC PRODUCTS AND LOAN S GIVEN TO THE ASSESSEE. THE A.O. IN PARA 5.11 WRITES THAT ALL THE ABOVE COI NCIDENCES POINT TO THE FACTS THAT THE UNSECURED LOAN TAKEN BY THE A SSESSEE ARE NOTING BUT WINDOW DRESSING TO MISLEAD THE REVENUE A UTHORITY. IT IS A FAILED ATTEMPT BY THE ASSESSEE TO INTRODUCE THE U NACCOUNTED MONEY GENERATED FROM SOME DIFFERENT BUSINESS OF THE FAMILY. IT IS NOT ENOUGH THAT THE ASSESSEE GIVES PAN & ADDRESS OF THE LOAN DONORS. IT IS ALSO THE DUTY OF THE ASSESSEE TO PRO VE THE CREDITWORTHINESS AND GENUINENESS OF LOANS. IN THE LIGHT OF THE ABOVE FACTS DETECTED BY THE IN-DEPTH ENQUIRY IT IS CLEAR THAT THE UNSECURED LOANS ARE BOGUS. IN PARA 5.13 THE A.O. WRITES THAT THE ASSESSEE HAS NOT FULLY SATISFIED THE REQUIREMENT TO PROVE THE GENUINENESS OF THE LOAN TRANSACTIONS. VI. THE A.O. HAS NOWHERE MENTIONED IN THE ASSESSME NT ORDER WHAT PROMPTED HIM NOT TO TAKE ACTION AS PER IT ACT IF TH E ASSESSEE FAILED TO PRODUCE THE PARTIES CONCERNED. HE SHOULD HAVE F IRST CROSS VERIFIED FROM THE ASSESSMENT RECORDS OF THE 9 PARTI ES REFERRED ABOVE (NOT CONNECTED WITH M/S.NATURAL BIO-ORGANIC P RODUCT). ITA NO.2195/AHD /2011 DCIT VS. SHRI MAHESHBHAI DHANJIBHAI MANGUKIYA ASST.YEAR 2008-09 - 6 - VII. ALL THE RECORDS WHICH WERE PRODUCED BEFORE THE A.O. DURING THE ASSESSMENT PROCEEDINGS HAVE ALSO BEEN PRODUCED BEFORE ME. SO FAR AS LOANS FROM 11 PARTIES (CONNECTED WITH M/S .NATURAL BIO- ORGANIC PRODUCT) ARE CONCERNED THE SOURCE IS FULLY STANDS EXPLAINED. SO FAR AS OTHER 9 PARTIES ARE CONCERNED (NOT CONNEC TED WITH M/S.NATURAL BIO-ORGANIC PRODUCT) THEY ARE ALL ASSE SSED TO TAX. IN THEIR CASES LOANS CONFIRMATIONS COPY OF BANK STAT EMENT AND COPY OF RETURN OF INCOME HAVE BEEN FILED. THE APPELLANT S CASE SO FAR AS THESE 9 PARTIES ARE CONCERNED IS SQUARELY COVERED BY THE HONBLE SUPREME COURTS JUDGEMENT IN THE CASE OF CIT VS. OR ISSA CORPORATION (P) LTD. 158 ITR 78 AND HONBLE GUJARAT HIGH COURT DECISION IN THE CASE OF M/S.ROHINE BUILDERS VS. DCI T 256 ITR 360. IN VIEW OF THE ABOVE FACTS & CIRCUMSTANCES AND THE POSITION OF LAW THE ADDITION MADE BY THE A.O. IS HEREBY DEL ETED AND THE GROUND OF APPEAL IS ALLOWED. 4. WE HAVE GONE THROUGH THE RELEVANT RECORD AND IMP UGNED ORDER AND HEARD LD.CIT-DR. WE FIND THAT THE CIT(A) DELETED T HE ENTIRE ADDITION WITHOUT CALLING FOR ANY REMAND REPORT NOR BY DOING ANY VERIFICATION HIMSELF. THEREFORE IN OUR CONSIDERED OPINION THI S ISSUE NEEDS VERIFICATION AT THE ASSESSMENT STAGE AFRESH. WE AC CORDINGLY SET ASIDE THE ISSUE TO THE FILE OF ASSESSING OFFICER. THE AO IS DIRECTED TO VERIFY THE PAN DETAILS FROM THE RESPECTIVE ASSESSING OFFICER A ND DECIDE THE ISSUE AFRESH AFTER GIVING A REASONABLE OPPORTUNITY OF BEI NG HEARD TO THE ASSESSEE. ITA NO.2195/AHD /2011 DCIT VS. SHRI MAHESHBHAI DHANJIBHAI MANGUKIYA ASST.YEAR 2008-09 - 7 - 5. IN THE RESULT REVENUES APPEAL IS ALLOWED FOR S TATISTICAL PURPOSES. THIS ORDER PRONOUNCED IN OPEN COURT ON 29 /0 9 /2016 SD/- SD/- .. ( ) () ( N.K. BILLAIYA ) ( MAHAVIR PRASAD ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 29/ 09 /2016 6... .../ T.C. NAIR SR. PS !'#$%$' / COPY OF THE ORDER FORWARDED TO : 1. $' / THE APPELLANT 2. ($' / THE RESPONDENT. 3. 78- + 9- / CONCERNED CIT 4. + 9- ( ) / THE CIT(A)-V SURAT 5. :;<-78 .782 / DR ITAT AHMEDABAD 6. <=> / GUARD FILE. / BY ORDER (:-- //TRUE COPY// / ( DY./ASSTT.REGISTRAR) / ITAT AHMEDABAD 1. DATE OF DICTATION .. 27.9.16 (DICTATION-PAD 7+ PAGES ATTACHED AT THE END OF THIS APPEAL-FILE) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 27.9.16 3. OTHER MEMBER 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S.29.9.16 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 29.9.16 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER