Shri Hasmukhbhai C.Patel, Ahmedabad v. The ACIT.,Circle-9,, Ahmedabad

ITA 2376/AHD/2008 | 2004-2005
Pronouncement Date: 13-08-2010 | Result: Partly Allowed

Appeal Details

RSA Number 237620514 RSA 2008
Bench Ahmedabad
Appeal Number ITA 2376/AHD/2008
Duration Of Justice 2 year(s) 1 month(s) 19 day(s)
Appellant Shri Hasmukhbhai C.Patel, Ahmedabad
Respondent The ACIT.,Circle-9,, Ahmedabad
Appeal Type Income Tax Appeal
Pronouncement Date 13-08-2010
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted B
Tribunal Order Date 13-08-2010
Date Of Final Hearing 28-07-2010
Next Hearing Date 28-07-2010
Assessment Year 2004-2005
Appeal Filed On 24-06-2008
Judgment Text
- 1 - IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH B AHMEDABAD BEFORE S/SHRI MUKUL KR. SHRAWAT JM AND D.C.AGRAWAL AM SHRI HASMUKHBHAI C. PATEL PROP. OF HARSHA ROADLINES 111 ATMARAM PARK CO-OP. SOC. NARMADANAGAR PART I RANIP AHMEDABAD. VS. ASSTT. CIT CIRCLE-9 AHMEDABAD. (APPELLANT) .. (RESPONDENT) ASSESSEE BY :- SHRI P. F. JAIN AR REVENUEBY:- SHRI K. MADHUSUDAN SR.DR O R D E R PER D. C. AGRAWAL ACCOUNTANT MEMBER . THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF LD. CIT(A) DATED 31 ST MARCH 2008 WHEREIN SHE HAS CONFIRMED AN ADDITION OF RS.13 21 668/- MADE UNDER SECTION 68. 2. THE FACTS OF THE CASE ARE THAT ASSESSEE IS RUNNI NG BUSINESS OF TRANSPORT AND HAS SHOWN LOSS OF RS.23.24.350/-. DUR ING THE COURSE OF ASSESSMENT PROCEEDINGS THE AO NOTICED THAT ASSESSE E HAS SHOWN THE LOAN IN ITS ACCOUNT FOR RS.22 73 018/- IN THE NAMES OF 1 37 PERSONS. THE AO REQUIRED THE ASSESSEE TO GIVE THE NAMES AND ADDRESS ES AND CONFIRMATIONS FROM VARIOUS PERSONS FROM WHOM ASSESSEE HAS BORROWE D MONEY. THE ASSESSEE IN RESPECT OF SOME OF THE DEPOSITORS FURNI SHED SOME EVIDENCES REGARDING THEIR IDENTITY LIKE RATION CARD ELECTION PHOTO CARD BUT DID NOT FURNISH THE PROOF AND CREDITWORTHINESS OR GENUINENE SS OF THE TRANSACTION. ITA NO.2376/AHD/2008 ASST. YEAR :2004-05 2 THE ASSESSEE FURNISHED CONFIRMATIONS IN RESPECT OF 57 PERSONS BUT ON A STEREOTYPED LETTER. THESE PERSONS HAD MADE DEPOSITS BUT THEY DID NOT FURNISH DETAILS OR SOURCES OR EXACT EVIDENCE ABOUT THEIR IDENTITY AND CREDITWORTHINESS OR GENUINENESS OF THE TRANSACTIONS . THIS SUM WAS WORKED OUT AT RS.12 78 712/- WHICH WAS ADDED BY THE AO IN THE TOTAL INCOME OF THE ASSESSEE. FURTHER AO NOTICED IN RESPECT OF 27 D EPOSITORS THAT IN ADDITION TO PROOF OF IDENTITY CONFIRMATION LETTERS WERE ALSO FURNISHED. BUT THESE DEPOSITS WERE ALSO IN CASH AND THEY DID NOT F URNISH ANY EVIDENCE REGARDING SOURCE OF THEIR INCOME OR SOURCE OF DEPOS ITS. THE TOTAL AMOUNT IN RESPECT OF THESE 27 DEPOSITORS WAS WORKED OUT AT RS.4 65 584/-. IT WAS ALSO ADDED BY THE AO IN THE TOTAL INCOME OF THE ASS ESSEE. THUS TOTAL ADDITION WAS WORKED OUT AT RS.17 44 296/- UNDER TWO CATEGORIES. 3. THE LD. CIT(A) EXAMINED THE MATTER FURTHER AND S HE GAVE THE DETAILS OF EVIDENCE FILED BY THE ASSESSEE IN RESPEC T OF THE 137 PERSONS WHICH ARE GIVEN BY HER IN A TABULAR FORM FROM PAGES 5 TO 21 OF HER ORDER. SHE FOUND THAT OUT OF THE SUM OF RS.22 73 018/- REC EIVED FROM 137 PERSONS THE LOAN TAKEN FROM FOLLOWING FOUR PERSONS ARE APPARENTLY GENUINE. THEY ARE (I) CHIMANLAL K. PATEL HUF RS.2 00 000/- AT SL. NO.26 (II) CHIMANLAL K. PATEL RS.2 00 000/- AT SL . NO. 27 (III) RATILAL M. PATEL RS.2 25 562/- AT SL.NO.111 AND (IV) SUSHILABE N H. PATEL RS.3 26 350/- AT SL. NO.129. TOTAL OF DEPOSITS FROM THESE FOUR PERSONS AMOUNTED TO RS.9 51 350/-. THIS WAS TREATED AS EXPL AINED BY THE LD. CIT(A) AND THEREFORE SHE CONFIRMED THE ADDITION O F DIFFERENCE OF RS.13 21 668/- [RS.22 73 018 (-) 9 51 350]. SINCE S HE TREATED SUM OF RS.13 21 668/- AS NOT EXPLAINED SHE ALLOWED THE REL IEF OF RS.4 22 628/- TO THE ASSESSEE BEING THE DIFFERENCE BETWEEN THE SUM A DDED BY THE AO AT RS.17 44 296/- AND RS.13 21 668/-. 3 4. IN THIS REGARD WE REFER TO RELEVANT PORTION FROM THE ORDER OF LD. CIT(A) AS UNDER :- 13. DURING THE COURSE OF APPELLATE PROCEEDINGS T HE APPELLANT WAS ASKED BY THIS OFFICE AS WELL AS BY THE AO DURING TH E APPELLATE PROCEEDINGS TO SUBMIT EXPLANATIONS PROOFS FOR THE UNSECURED LO ANS. THE APPELLANT PRODUCED SOME CREDITORS BEFORE THE AO ON 11.3.2006 AND THE AO RECORDED THEIR STATEMENTS. THE CREDITS SHOWN AGAINS T THESE CREDITORS HAVE BEEN ACCEPTED. HOWEVER WHERE NO CONFIRMATIONS HAVE BEEN FILED OR DEFECTIVE TWO LINER LETTERS IN GUJARAT MANY OF WHI CH ARE UNSIGNED HAVE BEEN SUBMITTED AS CONFIRMATIONS THE SAME HAVE BEEN REJECTED BECAUSE THE ONUS CAST UPON THE ASSESSEE OF PROVING THE CRED ITS AS LAID DOWN BY HON. SUPREME COURT IN THE CASE OF SUMATI DAYAL VS. CIT (1995) 214 ITR 801 HAS NOT BEEN DISCHARGED. TOTAL AMOUNT OF FRESH LOANS AS PER THE APPELLANTS LIST OF 137 PERSONS COMES TO RS.22 73 0 18/- AFTER EXAMINING THE MATERIAL ON RECORD AND STATEMENTS OF SOME CREDI TORS RECORDED BY THE AO AT THE TIME OF SUBMITTING HIS REMAND REPORT LOA NS TAKEN FROM PERSONS MENTIONED AT SERIAL NUMBERS 26 (CHIMANLAL K. PATEL HUF RS.2 00 000 27 CHIMANLAL K. PATEL RS.2 00 000 111 RATINAL M. P ATEL RS.2 25 562 AND 129 SUSHILABEN H. PATEL RS.3 26 350 OF THE LIST OF 137 PERSONS HAVE BEEN FOUND EXPLAINED TOTALING TO RS.9 51 350 BUT THE BA LANCE UNSECURED LOANS OF RS.13 21 668 (RS.22 73 1018 MINUS RS.9 51 350_ C OULD NOT BE ESTABLISHED BY THE APPELLANT AS GENUINE. FOR CONFIR MING ADDITION OF RS.13 21 668/- AS PER DETAILS GIVEN IN THE LIST ABO VE RELIANCE IS PLACED ON THE CASE OF ACIT VS. VISHWANATH & CO. 292 ITR 225 ( KARNATAKA) WHEREIN IT HAS BEEN HELD THAT THE ASSESSEE MUST PROVE IDENT ITY OF LENDER CAPACITY TO LEND AND GENUINENESS OF TRANSACTIONS AND ON THE CASE OF ISHRAWATI DEVI VS. ITO 298 ITR 313 (ALL) WHEREIT HAS BEEN HELD THA T A CASH CREDIT CANNOT BE HELD SATISFACTORILY EXPLAINED IF DEPOSITOR DID N OT HAVE RESOURCES TO MAKE DEPOSITS EVEN IF THE CREDIT CAME THROUGH BANK . THE APPELLANT GETS RELIEF OF RS.17 44 296-RS.13 21 668 = RS.4 22 628/-. 5. BEFORE US THE LD. AR FOR THE ASSESSEE SUBMITTED THAT AS PER AUDIT REPORT VARIOUS SUMS HAVE BEEN RECEIVED BY THE ASSES SEE THROUGH ACCOUNT PAYEE CHEQUES AND OUT OF THOSE LD. CIT(A) HAS ACCEP TED SOME AS GENUINE. ACCORDING TO THE LD. AR ANNEXURE-B TO THE AUDIT REP ORT FOLLOWING SUMS WERE RECEIVED BY ACCOUNT PAYEE CHEQUES :- 4 SL. NO. NAME ADDRESS & PAN (IF AVAILABLE) AMOUNT TAKEN OR ACCEPTED (RS.) WHETHER SQUARED UP DURING THE YEAR MAXIMUM OUT STANDING CREDIT BALANCE WHETHER ACCEPTED OTHERWISE THEN BY CHEQUE/BANK DRAFT 1. A. N. BIKES & MOTORS 70000 NO 70000 NO 2. CHIMANLAL K. PATEL 200000 NO 200000 NO 3. HARSH APPARALS 103000 NO 79700 NO 4. HARESH R. PATEL 464000 NO 313000 NO 5. NAVINBHAI (A.N.BIKES) 25000 NO 25000 NO 6. RATILAL M. PATEL 225563 NO 225563 NO 7. SUSHILABEN H. PATEL 500000 NO 495350 NO 8 TARABEN GIRDHARLAL PATEL 125000 NO 143419 NO 6. IN THE ABOVE TABLE ITEM NO.2 ITEM NO.6 AND ITEM NO.7 ARE TREATED AS EXPLAINED BY LD. CIT(A). IF THE LD. CIT(A) CAN A CCEPT PART OF THE DEPOSITS RECEIVED THROUGH BANKING CHANNELS AS GENUI NE THEN THERE IS NO REASON NOT TO ACCEPT THE ENTIRE SUM OF RS.17 12 563 /- BEING TOTAL OF DEPOSITS FROM ABOVE 8 PERSONS AS GENUINE AS THEY WE RE ALSO RECEIVED THROUGH BANKING CHANNELS. THE LD. AR HOWEVER FAIR LY ADMITTED THAT HE DOES NOT HAVE ANY EVIDENCE IN RESPECT OF BALANCE OF THE SUM I.E. DIFFERENCE BETWEEN RS.22 73 108 (-) 17 12 563 = RS. 5 60 455/-. 7. ON THE OTHER HAND THE LD. DR RELIED ON THE ORDE R OF LD. CIT(A). 8. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PER USED THE MATERIAL ON RECORD. SINCE THE LD. AR HAS NO EXPLANATION IN R ESPECT OF SUM OF RS.5 60 455/- THEN TO THIS EXTENT THE ADDITION IS C ONFIRMED. HOWEVER WE RESTORE THE MATTER TO THE FILE OF LD. CIT(A) TO EXA MINE AS TO WHY ADDITION IN RESPECT OF OTHER PERSONS AS PER ANNEXURE-B OF TH E AUDIT REPORT BE NOT TREATED AS GENUINE IF SHE IS ACCEPTING THE RECEIPT OF MONEY THROUGH BANKING CHANNELS IN RESPECT OF THREE PERSONS AS GEN UINE. THUS IN RESPECT OF DEPOSITS FROM REST OF FIVE PERSONS OF ANNEXURE-B TO THE AUDIT REPORT 5 SHOULD BE EXAMINED AFRESH AND A CLEAR FINDING FOR E ACH ITEM SHOULD BE GIVEN AS TO WHY DEPOSITS FROM THEM BE ACCEPTED OR N OT ACCEPTED. THUS THE MATTER IS RESTORED TO THE LD. CIT(A) FOR LIMITED P URPOSE FOR PROVIDING REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESS EE. 9. IN THE RESULT THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER WAS PRONOUNCED IN OPEN COURT ON 13/8/2010 SD/- SD/- (MUKUL KR. SHRAWAT) (D.C.AGRAWAL) JUDICIAL MEMBER ACCOUNTANT ME MBER AHMEDABAD DATED : 13/8/2010 MAHATA/- COPY OF THE ORDER FORWARDED TO :- 1. THE ASSESSEE. 2. THE REVENUE. 3. THE CIT(APPEALS)- 4. THE CIT CONCERNS. 5. THE DR ITAT AHMEDABAD 6. GUARD FILE. BY ORDER DEPUTY / ASSTT.REGISTRAR ITAT AHMEDABAD