The DCITSabarkantha Circle,, Dist.Sabarkantha v. Bakewell Biscuits Pvt.Ltd.,, Dist.Sabarkantha

ITA 2250/AHD/2008 | 2005-2006
Pronouncement Date: 10-02-2012 | Result: Dismissed

Appeal Details

RSA Number 225020514 RSA 2008
Assessee PAN AACCB4274A
Bench Ahmedabad
Appeal Number ITA 2250/AHD/2008
Duration Of Justice 3 year(s) 7 month(s) 29 day(s)
Appellant The DCITSabarkantha Circle,, Dist.Sabarkantha
Respondent Bakewell Biscuits Pvt.Ltd.,, Dist.Sabarkantha
Appeal Type Income Tax Appeal
Pronouncement Date 10-02-2012
Appeal Filed By Department
Order Result Dismissed
Bench Allotted B
Tribunal Order Date 10-02-2012
Date Of Final Hearing 12-01-2012
Next Hearing Date 12-01-2012
Assessment Year 2005-2006
Appeal Filed On 11-06-2008
Judgment Text
ITA N O 2250 & CO 205/AHD/2008 ASSESS MENT YEAR 2005-06. 1 IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH AHM EDABAD (BEFORE SHRI MUKUL KUMAR SHRAWAT & SHRI A.L. GE HLOT) I.T.A. NO. 22 50 /AHD/2008 (ASSESSMENT YEAR: 2005-2006) THE DEPUTY COMMISSIONER OF INCOME TAX SABARKANTHA CIRCLE HIMATNAGAR. (APPELLANT) VS. BAKEWELL BISCUITS PVT. LTD. MODASA GIDC GANESHPURA DIST. SABARKANTHA. (RESPONDENT) C.O. NO.205/2 008 (ARISING OUT OF ITA NO.2250/AH D/2008) THE DEPUTY COMMISSIONER OF INCOME TAX SABARKANTHA CIRCLE HIMATNAGAR. (ORIGINAL APPELLANT) VS. BAKEWELL BISCUITS PVT. LTD. MODASA GIDC GANESHPURA DIST. SABARKANTHA. (ORIGINAL RESPONDENT) PAN: AACCB4274A ON BEHALF OF THE REVENUE. MR.SAMIR TEKRIWAL SR. D. R. ON BEHALF OF THE ASSESSEE. MR. M. K. PATEL. ( )/ ORDER DATE OF HEARING : 12-1-2012 DATE OF PRONOUNCEMENT : 10-2-2012 ITA N O 2250 & CO 205/AHD/2008 ASSESS MENT YEAR 2005-06. 2 PER: SHRI A.L. GEHLOT A.M. THE GROUND RAISED IN THE APPEAL BY THE REVENUE IS IN RESPECT OF DELETION OF ADDITION OF RS.29 88 000/- OUT OF TOTAL ADDITION OF RS. 31 88 000/- MADE BY THE AO UNDER SECTION 68 OF THE ACT. 2. THE GROUND RAISED IN CROSS OBJECTION IS IN RESPE CT OF SUSTAINING ADDITION OF RS.2 LACS OUT OF RS.31 88 000/- MADE BY THE AO. 3. BRIEF FACTS OF THE CASE ARE THAT THE AO MADE ADD ITION OF RS.31 88 000/- U/S. 68 ON THE GROUND THAT THE ASSESSEE HAS FAILED TO SA TISFY THE CONDITION AS REQUIRED U/S. 68 OF THE ACT. THE DETAILS OF THE ADDITION MAD E BY THE AO ARE AS UNDER:- 1) A.I. PATIWALA RS. 2 00 000 2) RAIYABEN A.PATIWALA. RS. 1 00 000 3) B. K. PATEL RS. 6 00 000 4) SAKINABEN A.PATIWALA. RS. 1 00 000 5) USMANGANI H. MALEKHJI RS. 1 00 000 6) B. S.MANVA RS. 4 78 000 7) G.K. KUSHKIWALA RS. 9 80 000 8) ZAHIR PATIWALA RS. 6 30 000 ------------------ RS. 31 88 000 ========== ITA N O 2250 & CO 205/AHD/2008 ASSESS MENT YEAR 2005-06. 3 4. THE CIT (A) DELETED THE ADDITION OF RS.29 88 000 /- AFTER ACCEPTING THE ASSESSEES CONTENTION AND SATISFIED THAT THE ASSES SEE HAS COMPLIED WITH THE REQUIREMENT OF SECTION 68 OF THE ACT. 5. WE HAVE HEARD THE LD. REPRESENTATIVES OF BOTH TH E PARTIES AND RECORDS PERUSED. THE ISSUE IS DECIDED AFTER EXAMINING PARTY WISE AS UNDER:- 6. (1) SHRI A.I. PATIWALA RS. 2 LACS. THE BRIEF FACTS OF THIS CASE ARE THAT THE A.O. MA DE ADDITION OF RS.31 88 000/- WHICH INCLUDES RS.2 LACS IN THE NAME OF SHRI P.I. PATIWALA IN THE HANDS OF THE ASSESSEE-COMPANY U/S. 68 OF THE ACT. T HE ADDITION MADE BY THE AO HAS BEEN DELETED BY THE CIT (A) AS UNDER:- THE AO HAS ISSUED SUMMONS TO THE CREDITORS OUT OF WHOM TWO CREDITORS SHRI ABDUL RAHMAN I.PATIWALA AND ZAHIR A. PATIWALA APPEARED BEFORE THE AO. (I) IT WAS SUBMITTED THAT SHRI ABDUL RAHMAN I. PATI WALA HAS BEEN AN ASSESSEE FOR MANY YEARS AND BEFORE THE AO HE HAS C ONFIRMED TO HAVE RECEIVED RS.11 LAKH FROM INSURANCE COMPANY AND THAT HE HAS RECEIVED RS.1 LAKH AS 1/3 RD SHARE FROM SALE OF FACTORY BUILDING. THUS HE HAS CONFIRMED OF HAVING MADE THE DEPOSIT AND HAS EXPLAINED THE SOURC E OF DEPOSIT THEREFORE THE CREDIT STANDING IN THE NAME OF SHRI ABDUL RAHMA N I. PATIWALA IS HELD TO BE EXPLAINED AND GENUINE. THE ADDITION OF RS.2 LACS U/S.69 WAS ALSO MADE IN T HE HANDS OF THE INDIVIDUAL SHRI A.I. PATIWALA ASSESSMENT VIDE ASSESSMENT ORDER DATE D 29-12-2008.SHRI A.I. PATIWALA FILED APPEAL AGAINST THAT ORDER OF AO BEFO RE THE CIT (A) AND THE CIT (A) VIDE HIS ORDER DATED 20-11-2009 DELETED THE SAID AD DITION ON MERIT. A COPY OF THE CIT (A)S ORDER HAS BEEN PLACED AT PAGES 92 TO 98 O F THE ASSESSEES PAPER BOOK. THE SUBMISSION OF THE LD. AR THAT THE REVENUE DID N OT FILE APPEAL AGAINST THAT ITA N O 2250 & CO 205/AHD/2008 ASSESS MENT YEAR 2005-06. 4 ORDER OF CIT (A) IN OTHER WORDS THE MATTER BECAME FINAL. ON THE BASIS OF ABOVE ADMITTED FACTS WE FIND THAT WHEN THE CIT (A) FOUND THAT THE ASSESSEE HAS SATISFACTORILY EXPLAINED THE INVESTMENT OF RS.2 LAC S MADE IN THE ASSESSEE-COMPANY AND THAT ORDER OF THE CIT (A) BECOME FINAL UNDER T HE CIRCUMSTANCES WE ARE OF THE VIEW THAT SUCH ADDITION CANNOT BE SUSTAINED IN THE HANDS OF THE ASSESSEE-COMPANY. IN THE LIGHT OF ABOVE DISCUSSION WE COULD NOT FIND ANY INFIRMITY IN THE ORDER OF CIT (A) AS ASSESSEE HAS DISCHARGED THE BURDEN U/ S. 68 OF THE ACT. (2) RAIYABEN A. PATIWALA RS. 1 LAKH . ADDITION MADE OF RS.1 LAKH MADE BY THE AO HAS BEEN CONFIRMED BY THE CIT (A) ON THE GROUND THAT SOURCE WAS NOT PROPERLY EXP LAINED. THE ADDITION WAS ALSO MADE IN THE HANDS OF RAIYABEN A.PATIWALA IN INDIVID UAL CASE UNDER SECTION 69 OF THE ACT. THE CIT (A) HAS DELETED THAT ADDITION U/S. 69 VIDE ORDER DATED 19-11- 2009.THE LD. AR POINTED OUT THAT THE REVENUE DID NO T FILE APPEAL BEFORE ITAT AGAINST THAT ORDER OF CIT (A). WE FIND THAT A FACT IN THIS REGARD IS SIMILAR TO THE CASE OF SHRI A.I. PATIWALA DISCUSSED. SINCE ORDER OF CIT (A) BECOME FINAL AND INVESTMENT HELD AS GENUINE UNDER THE CIRCUMSTANCE A DDITION CAN NOT BE SUSTAINED IN THE HANDS OF ASSESSEE AS IN THAT THE ASSESSEE DE EMED TO BE SATISFIED THE CONDITION LAID DOWN. WE THEREFORE SET ASIDE THE ORDER OF REV ENUE AUTHORITIES AND DELETE THE ADDITION OF RS.1 LAKH. 3) B.K. PATEL RS. 6 LACS. THE ADDITION MADE BY THE AO HAS BEEN DELETED BY TH E CIT (A) AFTER CONSIDERING THE MERIT OF THE CASE DECIDED AS UNDER: - ITA N O 2250 & CO 205/AHD/2008 ASSESS MENT YEAR 2005-06. 5 THE DEPOSITOR SHRI B. K. PATEL IS A RETIRED GOVER NMENT SERVANT AND HE HAS RECEIVED RETIREMENT BENEFITS. HE HAS TAKEN LOAN OF RS.2 LAKHS AGAINST FIXED DEPOSITS MADE OUT OF THE RETIREMENT BENEFITS. FURTHER HE HAS RECEIVED RS.2 LAKHS FROM ONE PRAVINSINGH MADHAVSINGH SISODIY A AS ADVANCE ON ACCOUNT OF AGREEMENT TO SELL HIS AGRICULTURAL LAND AND THE AR HAS FILED A CONFIRMATION LETTER FROM THE PURCHASER AND FURTHER HE HAS TAKEN LOANS FROM FRIENDS AND FAMILY MEMBERS. HE ALSO POSSESSES AGRIC ULTURAL LAND OF 15 VIGHAS AND RS. 70 000/- HAS BEEN DEPOSITED BY HIM O UT OF SALE OF AGRICULTURAL PRODUCE. HE HAS FILED RETURN OF INCOME FOR A.Y. 200 5-06 THEREFORE THE CREDIT FROM THE SAID PARTY CANNOT BE CONSIDERED AS NON-GENUINE. APART FROM THE FAC THAT THE ADDITION OF RS.6 LACS IS ALSO MADE IN THAT CASE SHRI B.K. PATEL U/S. 69 OF THE ACT. THE CASE OF SHRI B.K . PATEL TRAVELED UPTO THE ITAT WHICH HAS BEEN DECIDED BY THE ITAT IN ITA NO.1203/A HD/2010 VIDE ORDER OF EVEN DATE WHEREIN THE ADDITION OF RS.6 LACS MADE U /S. 69 OF THE ACT HAS BEEN DELETED AFTER HOLDING THAT THE ASSESSEE HAS SATISFA CTORILY EXPLAINED THE SOURCE OF INVESTMENT. WHEN THE SOURCE OF THE INVESTOR HAS BEE N ACCEPTED AS GENUINE THE ADDITION CANNOT BE SUSTAINED IN THE HANDS OF THE CO MPANY. WE THEREFORE UPHOLD THE ORDER OF THE CIT (A) ALONG WITH THE REASONS GIVEN B Y HIM ON MERIT AND AS DISCUSSED ABOVE. 4) SAKINABEN A.PATIWALA RS. 1 LAC. THE FACTS OF THIS CASE IS SIMILAR TO THE CASE OF RA IYABEN A. PATIWALA THE ADDITION MADE IN INDIVIDUAL HAND U/S. 69 HAS BEEN D ELETED BY THE CIT (A) VIDE ORDER DATED 20-11-2009. AS PER DETAILED DISCUSSION MADE WHOLE DECIDING THE ISSUE RELATED TO RAIYABEN PATIWALA FOLLOWING THE SAME WE DELETE THE ADDITION OF RS.1 LAC. 5) USMANGANI H. MALEKHJI RS. 1 LAC . ITA N O 2250 & CO 205/AHD/2008 ASSESS MENT YEAR 2005-06. 6 THE ADDITION MADE BY AO HAS BEEN DELETED BY THE CIT (A). THE CIT (A) EXAMINED THE ISSUE ON MERIT AND NOTICED THAT THE DE POSITOR POSSESSES ABOUT 30 VIGHAS OF AGRICULTURAL LAND. THE DEPOSIT OF RS.1 LA C WAS OUT OF AGRICULTURAL INCOME THE DEPOSITOR FILED AFFIDAVIT. THE ASSESSEE HAS SAT ISFACTORILY PROVED THE TRANSACTION IS THROUGH BANKING CHANNEL. THE CIT (A) HELD THAT I DENTITY GENUINENESS AND CREDITWORTHINESS OF THE DEPOSITOR. WE NOTICE THAT T HE CIT (A) HAS DELETED THE ADDITION AFTER EXAMINING THE FACTS ON RECORD. THE R EVENUE FAILED TO POINT OUT CONTRARY FACTS OF THE FINDING OF CIT (A) NOR THE SA ME IS AVAILABLE ON RECORD. WE THEREFORE CONFIRM THE ORDER OF THE CIT (A) ON THIS ISSUE. 6) B. S.MANVA RS. 4 78 000/- THE ADDITION MADE HAS BEEN DELETED BY THE CIT (A) A S UNDER:- AS REGARDS CREDIT OF RS.4 78 000/- FROM B.S.MANVA IT IS STATED THAT HE IS A RETIRED ENGINEER OF BOMBAY MUNICIPAL CORPORATI ON AND HE IS AT PRESENT STAYING AT ANDHERI MUMBAI AND AS STATED BY THE AR THAT HE IS DOING COMPUTER JOB WORK AT PRESENT AND HE HAS GROSS INCOM E OF APPROXIMATELY RS.2 LAKHS AND HE RECEIVES PENSION OF RS.76 000/- P ER ANNUM. HE HAS BEEN FILING RETURN OF INCOME FOR MANY YEARS AND THE AR H AS FILED A COPY OF HIS RETURN OF INCOME FOR THE A.Y. 2005-06 AND THE DEPOS IT HAS BEEN RECEIVED BY ACCOUNT PAYEE CHEQUE. ON CONSIDERATION OF THESE DET AILS I HOLD THAT CREDIT IN THE NAME OF B.S.MANVA IS GENUINE AS THE CREDITWORTH INESS AND GENUINENESS OF TRANSACTION ARE PROVED. THE ADDITION IS ALSO MADE IN THE CASE OF INDIVIDUA L IN THE CASE OF DEPOSITOR U/S. 69 OF THE ACT WHICH HAS BEEN DELETED BY THE CI T (A) VIDE ORDER DATED 7-1- 2010.THE CIT (A) DELETED THE ADDITION AFTER EXAMINI NG THE ISSUE ON MERIT. THE CIT (A) DELETED THE ABOVE ADDITION AFTER CONSIDERIN G THE FACTS OF THE ISSUE AND CONTRARY TO THAT FINDING OF CIT (A) THE REVENUE DID NOT POINT OUT ANY CONTRARY MATERIAL NEITHER THE SAME IS AVAILABLE ON RECORD. W E THEREFORE CONFIRM THE ORDER OF THE ON THE ISSUE. ITA N O 2250 & CO 205/AHD/2008 ASSESS MENT YEAR 2005-06. 7 7) G.K. KUSHKIWALA RS. 9 80 000/- THE CIT (A) DELETED THE SAID ADDITION OF RS.9 80 00 0/- ACCEPTING THE ASSESSEES SUBMISSION THAT DEPOSITOR G. K. KUSHKIWA LA WAS RUNNING BUSINESS AS PROPRIETARY CONCERN IN THE NAME OF K.K. FOOD INDUST RIES. THE AMOUNT WAS DEPOSITED OUT RUNNING BUSINESS OF THIS PROPRIETARY CONCERN. THE ADDITION WAS ALSO MADE IN THE HANDS OF THE DEPOSITOR G.K. KAUSHKIWAL A U/S. 69 OF THE ACT. THE INDIVIDUAL CASE THE DEPOSITOR TRAVELED UPTO ITAT. T HE ITAT IN APPEAL VIDE APPEAL IN ITA NO.891/AHD/2009 ORDER DATED 11-9-2009 RESTOR ED THE MATTER TO THE FILE OF THE CIT (A).SINCE THE ADDITION HAS BEEN MADE IN THE HANDS OF THE DEPOSITOR U/S. 69 OF THE ACT. IN THE LIGHT OF LAW LAID DOWN BY THE AP EX COURT IN THE CASE OF CIT VS. LOVELY EXPORT PVT. LTD. 216 CTR (SC)(195) WE DO NO T FIND JUSTIFICATION IN SUSTAINING THE ADDITION IN THE HANDS OF THE INDIVID UAL CASE OF THE DEPOSITOR. WE THEREFORE HOLD THAT THE CIT (A) HAS RIGHTLY DELETE D THE ADDITION. 8) ZAHIR PATIWALA RS. 6 30 000/- THE ADDITION MADE BY THE AO HAS BEEN DELETED BY THE CIT (A) HOLDING THAT THE ASSESSEE HAS FULLY SATISFIED THE CONDITIONS LAI D DOWN IN SECTION 68 OF THE ACT. THE CIT (A) HELD AS UNDER:- THE CREDITOR ZAHIR ABBAS PATIWALA HAS BEEN EXAMI NED BY THE AO ON OATH. HE HAS CONFIRMED THAT FROM HIS CASH CREDIT AC COUNT HE HAS MADE THE DEPOSIT WITH THE APPELLANT AND HE HAS GIVEN HIS BUS INESS DETAILS AND HIS PAN AND COPY OF BANK ACCOUNT. HE HAS STATED THAT HE WAS LOOKING AFTER PRODUCTION OF THE UNIT OF THE APPELLANT AND HE STATED THAT HE KNEW ONLY THREE OF THE DIRECTORS OF THE COMPANY. IT HAS BEEN CONTENDED BY THE AR THAT FOR THE REASON OF NOT KNOWING THE NAMES OF OTHER DIRECTORS OF THE COMPANY THE DEPOSIT FROM HIM CANNOT BE CONSIDERED AS NOT GENUIN E. IN VIEW OF THE ABOVE DDETAILS IN MY VIEW THE CREDIT OF RS.6 30 000/- FR OM ZABHIR ABBAS PATIWALA CANNOT BE HELD AS NON GENUINE. ITA N O 2250 & CO 205/AHD/2008 ASSESS MENT YEAR 2005-06. 8 APART FROM THE ABOVE THE AO MADE ADDITION OF RS.6 30 000/- U/S. 69 OF THE ACT. THE ADDITION MADE BY THE AO HAS BEEN CONFIRMED BY T HE CIT (A).THE ASSESSEE DEPOSITOR FILED APPEAL BEFORE THE ITAT VIDE ITA NO. 1202/AHD/2010 WHEREIN THE INVESTMENT MADE BY ZAHIR PATIWALA WAS FOUND GENUIN E INVESTMENT AND DELETED THE ADDITION FROM INDIVIDUAL CASE BY ITAT BY ITS ORDER OF EVEN DATE. IN THE LIGHT OF THE ABOVE DISCUSSION WE FIND THAT THE ADDITION HAS BEE N RIGHTLY DELETED BY THE CIT (A). IT IS PERTINENT TO STATE THAT THE CIT (A) DECIDED T HE ISSUES IN ALL CASES AFTER PROVIDING OPPORTUNITY OF HEARING TO AO AND AFTER CO NSIDERING REMAND REPORT OF THE A.O. 7. IN THE RESULT APPEAL OF THE REVENUE IS DISMISSE D AND CROSS OBJECTION IS ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 10 - 2 - 2012 . SD/- SD/- (MUKUL KUMAR SHRAWAT) (A. L.GEHLOT) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD. S.A.PATKI. ITA N O 2250 & CO 205/AHD/2008 ASSESS MENT YEAR 2005-06. 9 COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS)-V AHMEDABAD. 4. THE CIT CONCERNED. 5. THE DR. ITAT AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT AHMEDABAD. 1.DATE OF DICTATION 31 - 01 -2012 2.DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE TH E DICTATING 31 /01 / 2012 MEMBER.OTHER MEMBER. 3.DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P.S./P.6 - 2 -2012. 4.DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT 10 - 2 -2012 5.DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR .P.S./P.S 10 - 2 -2012 6.DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 1 3 - 2 -2012. 7.DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 8.THE DATE ON WHICH THE FILE GOES TO THE ASSTT. REG ISTRAR FOR SIGNATURE ON THE ORDER 9.DATE OF DESPATCH OF THE ORDER..