The DCIT(OSD), Circle-8,, Ahmedabad v. Shyamal Intermediates Ltd., Ahmedabad

ITA 3412/AHD/2009 | 2006-2007
Pronouncement Date: 29-07-2011 | Result: Dismissed

Appeal Details

RSA Number 341220514 RSA 2009
Assessee PAN AADCS0874N
Bench Ahmedabad
Appeal Number ITA 3412/AHD/2009
Duration Of Justice 1 year(s) 7 month(s) 5 day(s)
Appellant The DCIT(OSD), Circle-8,, Ahmedabad
Respondent Shyamal Intermediates Ltd., Ahmedabad
Appeal Type Income Tax Appeal
Pronouncement Date 29-07-2011
Appeal Filed By Department
Order Result Dismissed
Bench Allotted A
Tribunal Order Date 29-07-2011
Date Of Final Hearing 27-07-2011
Next Hearing Date 27-07-2011
Assessment Year 2006-2007
Appeal Filed On 24-12-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH 'A' BEFORE SHRI BHAVNESH SAINI JM & SHRI A N PAHUJA AM ITA NO.3412/AHD/2009 WITH C O NO.21/AHD/2010 (ASSESSMENT YEAR:-2006-07) DEPUTY COMMISSIONER OF INCOME-TAX (OSD) CIRCLE- 8 4 TH FLOOR AJANTA COMMERCIAL CENTRE A WING ASHRAM ROAD AHMEDABAD V/S SHYAMAL INTERMEDIATES LTD. A-2 349 PHASE-2 GIDC VATVA AHMEDABAD PAN: AADCS 0874 N [APPELLANT] [RESPONDENT] REVENUE BY :- SHRI S K MEENA SR. DR ASSESSEE BY:- NONE O R D E R A N PAHUJA: THIS APPEAL BY THE REVENUE AND THE CORRESPONDING CROSS-OBJECTION[CO] BY THE ASSESSEE DIRECTED AGAIN ST AN ORDER DATED 11-09-2009 OF THE LD. CIT(APPEALS)-XIV AHMED ABAD FOR THE ASSESSMENT YEAR 2006-07 RAISE THE FOLLOWING GROUN DS:- ITA NO.3412/AHD/2009[REVENUE] [1] THE LD. CIT(A)-XIV AHMEDABAD ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.14 56 311/- MADE BY THE A O ON ACCOUNT OF UNEXPLAINED UNSECURED LOANS U/S 68. [2] ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. COMMISSIONER OF INCOME-TAX[A]-XIV AHMEDABAD OUGHT TO HAVE UPHELD THE ORDER OF THE AO. [3] IT IS THEREFORE PRAYED THAT THE ORDER OF THE L D. COMMISSIONER OF INCOME-TAX[A]-XIV AHMEDABAD MAY BE SET-ASIDE AND THAT O F THE AO BE RESTORED. C O NO.21/AHD/2010[ASSESSEE] [1] THE LD. COMMISSIONER OF INCOME-TAX(A) IS RIGHT IN D ELETED THE ADDITION OF RS.14 56 311.00 UNDER SECTION 68 OF THE IN COME TAX ACT 1961. 2 ITA NO.3412/AHD/09 & CO 21/AHD/10 2. NONE APPEARED ON BEHALF OF THE ASSESSEE NOR ANY REQUEST FOR ADJOURNMENT WAS RECEIVED DESPITE SERVICE OF NOTICE[ AD ON RECORD]. CONSIDERING THE NATURE OF ISSUE WE THEREFORE DEC IDED TO DISPOSE OF THE APPEAL AFTER HEARING THE LEARNED DEPARTMENTAL R EPRESENTATIVE. 3 FACTS IN BRIEF AS PER RELEVANT ORDERS ARE THAT RETURN DECLARING INCOME OF RS.10 60 580/- FILED ON 30-12-2006 BY ASS ESSEE MANUFACTURING CHEMICALS WAS SELECTED FOR SCRUTINY WITH THE SERVICE OF A NOTICE U/S 143(2) OF THE INCOME-TAX ACT 1961 [HEREINAFTER REFERRED TO AS THE ACT] ON 11-10-2007. DURING TH E COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER [AO IN SHORT] ASKED THE ASSESSEE TO FURNISH EVIDENCE OF UNSECURED LOANS APPEARING IN THE BALANCE-SHEET ALONG WITH CONFIRMATION OF THE CR EDITOR HIS BANK STATEMENT COPY OF RETURN AND SOURCES OF PAYMENT. I N RESPONSE THE ASSESSEE STATED THAT BANK SANCTIONED CAR LOAN OF RS .12 99 000/-IN THE NAME OF DIRECTOR OF THE ASSESSEE COMPANY SHRI C HERY S PATEL ON HYPOTHECATION OF COMPANYS MERCEDES CAR OWNED BY TH E COMPANY AND THE SAID DIRECTOR CONVERTED THE SAID AMOUNT AS UNSECURED LOAN WITH THE COMPANY. SHRI CHERY S PATEL HAD DEPOSITED CHEQUE NO. 178540 DATED 23.2.2006 FOR AN AMOUNT OF RS.12 99 00 0/-AND CHEQUE NOS.181870 AND 181871 DATED 16-03-2006 OF RS.1 57 3 11/- DRAWN ON HDFC BANK. SINCE THE ASSESSEE COMPANY HAD PURCHASE D CAR IN THE NAME OF ITS DIRECTOR AND ASSESSEE ALONE PAID INSTAL MENT OF CAR LOAN THE AO WAS OF THE OPINION THAT THE DIRECTOR DIVERTE D THE FUNDS OF THE ASSESSEE AND CREDITED IN HIS OWN ACCOUNT. SINCE TH E ASSESSEE DID NOT ESTABLISH THE SOURCES OF INCOME OF THE CREDITOR NOR HIS CREDITWORTHINESS ACCORDINGLY AN AMOUNT OF RS.14 5 6 311/- WAS ADDED U/S 68 OF THE ACT. 4. ON APPEAL THE LEARNED CIT(A) DELETED THE ADDITI ON IN THE FOLLOWING TERMS:- 3 ITA NO.3412/AHD/09 & CO 21/AHD/10 2.3 I HAVE CONSIDERED THE FACTS OF THE CASE AND THE SUBM ISSIONS OF THE APPELLANT. I AM INCLINED TO ACCEPT THE ARGUMENT SUBMITT ED BY THE APPELLANT. THE ADDITION SO MADE BY THE A.O. U/S. 68 OF THE ACT CON CLUDING THAT APPELLANT FAILED TO DISCHARGE ITS ONUS FOR IDENTITY SOU RCE AND CREDIT WORTHINESS IN RESPECT OF UNSECURED LOAN TAKEN FROM DIRE CTOR IS NOT BASED ON PROPER FACTS. IN FACT THE UNSECURED LOAN IN THE BA LANCE SHEET OF THE APPELLANT IS A BOOK ENTRY CORRESPONDINGLY TO THE VALUE OF CAR WHICH HIS BEEN PURCHASED AND SHOWN AS ASSETS. THE PAYMENT OF INSTALM ENT IS ALSO MADE BY THE APPELLANT COMPANY WHICH WAS VERIFIED AND ALL OWED BY THE A.O. ALL THE DOCUMENTS RELATED TO SANCTION OF LOAN TO DIRECTOR PURCHASE OF VEHICLE ETC. WERE SUBMITTED BY THE APPELLANT COMPANY TO TH E A.O. AND ALSO BEFORE ME DURING THE APPELLATE PROCEEDINGS. IT IS TH EREFORE THE SOURCE OF FUND AND GENUINENITY OF TRANSACTION IS DULY DISCHARGED BY THE APPELLANT. THERE IS NO DISPUTE ABOUT IDENTITY OF THE PERSON SINCE T HE SAME IS DIRECTOR OF THE APPELLANT COMPANY. IN TOTALITY THE APPELLANT COM PANY DULY DISCHARGED ITS ONUS OF ALL THE THREE INGREDIENTS REQUIRE D TO MAKE ADDITION U/S. 68 OF THE ACT. IT IS THEREFORE THE ADDITION SO MADE BY THE A.O. IS DELETED. 5. THE REVENUE IS NOW IN APPEAL BEFORE US AGAINST T HE AFORESAID FINDINGS OF THE LEARNED CIT(A). THE LEARNED DR SUPP ORTED THE FINDINGS OF THE AO. 6. WE HAVE HEARD THE LEARNED DR AND GONE THROUGH TH E FACTS OF THE CASE. INDISPUTABLY UNSECURED LOAN APPEARING IN THE BALANCE SHEET OF THE ASSESSEE IS A BOOK ENTRY CORRESPONDING TO VALUE OF THE CAR PURCHASED BY THE ASSESSEE IN THE NAME OF ITS D IRECTOR AND SHOWN AS ITS ASSETS. AS IS APPARENT FROM THE FACTS THE LOAN AGAINST HYPOTHECATION OF CAR WAS TAKEN IN THE NAME OF DIREC TOR CAR BEING REGISTERED IN HIS NAME. IN FACT CAR WAS OWNED BY T HE COMPANY AND PAYMENT OF INSTALMENTS ARE ALSO STATED TO HAVE BEEN MADE BY THE ASSESSEE COMPANY. SINCE THE AMOUNT RECEIVED BY THE SAID DIRECTOR SHRI CHERY S PATEL BY WAY OF LOAN FROM HDFC BANK AL ONE WAS TRANSFERRED AS UNSECURED LOAN THE LEARNED CIT(A) C ONCLUDED THAT THE IDENTITY OF THE CREDITOR AS ALSO HIS CREDITWORT HINESS AND GENUINENESS OF THE TRANSACTION WAS ESTABLISHED. IN THE LIGHT OF THESE UNDISPUTED FINDINGS ESPECIALLY WHEN THE LEARNED DR DID NOT PLACE ANY MATERIAL BEFORE US SO AS TO ENABLE US TO TAKE A DIFFERENT VIEW IN 4 ITA NO.3412/AHD/09 & CO 21/AHD/10 THE MATTER WE ARE NOT INCLINED TO INTERFERE WITH T HE FINDINGS OF THE LEARNED CIT(A) . IN VIEW THEREOF GROUND NO.1 IN TH E APPEAL OF THE REVENUE IS DISMISSED. 7. GROUND NOS. 2 AND 3 IN THE APPEAL OF THE REVENUE BEING MERE PRAYER NOR ANY SUBMISSIONS HAVING BEEN MADE ON THES E GROUNDS DO NOT REQUIRE ANY SEPARATE ADJUDICATION AND ARE THER EFORE DISMISSED. 8 SINCE THE GROUND RAISED IN THE CO IS MERELY SUPPO RTIVE THE CO FILED BY THE ASSESSEE BECOMES INFRUCTUOUS. 9. IN THE RESULT APPEAL OF THE REVENUE IS DISMISSED WHILE CO IS TREATED AS INFRUCTUOUS. ORDER PRONOUNCED IN THE COURT TODAY ON 29 -07-2011 SD/- SD/- ( BHAVNESH SAINI ) JUDICIAL MEMBER ( A N PAHUJA ) ACCOUNTANT MEMBER DATED : 29-07-2011 COPY OF THE ORDER FORWARDED TO: 1. SHYAMAL INTERMEDIATES LTD. A-2 349 PHASE-2 G IDC VATVA AHMEDABAD 2. DEPUTY COMMISSIONER OF INCOME-TAX (OSD) CIRCLE -8 4TH FLOOR AJANTA COMMERCIAL CENTRE A WING ASHRAM R OAD AHMEDABAD 3. CIT CONCERNED 4. CIT(A)-XIV AHMEDABAD 5. DR ITAT AHMEDABAD BENCH-A AHMEDABAD 6. GUARD FILE BY ORDER DEPUTY REGISTRAR ASSISTANT REGISTRAR ITAT AHMEDABAD