ACIT, Sonepat v. Sh. Sunil Kumar Gupta, Prop., Sonepat

ITA 4291/DEL/2011 | 2008-2009
Pronouncement Date: 28-11-2011 | Result: Dismissed

Appeal Details

RSA Number 429120114 RSA 2011
Assessee PAN AANPG9588J
Bench Delhi
Appeal Number ITA 4291/DEL/2011
Duration Of Justice 2 month(s)
Appellant ACIT, Sonepat
Respondent Sh. Sunil Kumar Gupta, Prop., Sonepat
Appeal Type Income Tax Appeal
Pronouncement Date 28-11-2011
Appeal Filed By Department
Order Result Dismissed
Bench Allotted G
Tribunal Order Date 28-11-2011
Date Of Final Hearing 28-11-2011
Next Hearing Date 28-11-2011
Assessment Year 2008-2009
Appeal Filed On 27-09-2011
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH G NEW DELHI) BEFORE SHRI RAJPAL YADAV AND SHRI A.N. PAHUJA ITA NO. 4291/DEL/2011 ASSESSMENT YEAR: 2008-09 ASSISTANT CIT VS. SUNIL KUMAR GUPTA PROP. SONEPAT CIRCLE M/S. MANGAL RAM BISHAN SARUP SONEPAT (HR.) BARA BAZAR SONEPAT. (PAN: AANPG9588J) (APPELLANT) (RESPONDENT) APPELLANT BY: SMT. S. MOHANT HY DR RESPONDENT BY: SHRI RAJ KUMAR A DV. DATE OF HEARING : 28.11.2011 DATE OF PRONOUNCEMENT : 28.11.2011 ORDER PER RAJPAL YADAV: JUDICIAL MEMBER THE REVENUE IS IN APPEAL BEFORE US AGAINST THE ORD ER OF LEARNED CIT(APPEALS) DATED 20.07.2011 PASSED FOR ASSESSMENT YEAR 2008-09. THE GRIEVANCE OF THE REVENUE IS THAT LEARNED CIT(APPEAL S) HAS ERRED IN DELETING THE ADDITION OF RS.16 94 834. THE BRIEF FACTS OF TH E CASE ARE THAT THE ASSESSEE IS AN INDIVIDUAL. HE HAS FILED HIS RETURN OF INCOME ON 22.9.2008 DECLARING TOTAL INCOME OF RS.704 600. ON SCRUTINY OF THE ACCO UNTS IT REVEALED TO THE ASSESSING OFFICER THAT ASSESSEE HAS SHOWN CREDIT OF RS.16 94 834 APPEARING AGAINST THE NAME OF SIX PERSONS. HE NOTICED THE DET AILS OF SUCH INDIVIDUALS AND THE AMOUNT STANDING AGAINST THEIR NAMES ON PAGE 3 OF THE ASSESSMENT ORDER. ASSESSING OFFICER OBSERVED THAT THESE UNSECU RED LOANS ARE OUTSTANDING 2 AGAINST THE NAMES OF THESE PERSONS FOR A NUMBER OF YEARS. HE ERRONEOUSLY FORMED AN OPINION THAT LOAN/TRADE LIABILITY IF REMA INED OUTSTANDING FOR MORE THAN THREE YEARS THEN IT WILL COME DIRECTLY UNDER T HE PURVIEW OF SECTION 41(1)(A) OF THE ACT AND IT DESERVES TO BE ADDED AS INCOME OF THE ASSESSEE. UNDER THIS MISCONCEPTION OF LAW HE MADE THE ADDITI ON. 2. ON APPEAL LEARNED FIRST APPELLATE AUTHORITY APP RECIATED THE FACTS AND CIRCUMSTANCES IN RIGHT PERSPECTIVE AND OBSERVED ON ACCOUNT OF ASSESSING OFFICERS LACK OF CLARITY AND CONCEPT ABO UT THIS ISSUE HE HAS MADE THE ADDITION OF OPENING BALANCE OF LOANS UNDER SECT ION 41(1) OF THE ACT. 3. WITH THE ASSISTANCE OF LEARNED REPRESENTATIVES WE HAVE GONE THROUGH THE RECORD CAREFULLY. WE FIND THAT THE ASSESSING O FFICER HAS MISCONSTRUED THE LOAN ENTRIES TRADE LIABILITY AS WELL AS THE POS ITION OF LAW. LEARNED FIRST APPELLATE AUTHORITY WHILE CONSIDERING THIS ASPECT H AS MADE THE FOLLOWING OBSERVATIONS: 4. I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS MAD E BY THE AR. LACK OF CLARITY AND CONCEPTS BY THE A.O. IS EVIDENT FROM THE ASSESSMENT ORDER. OUT OF THE MANY SUCH INSTANCES I T IS MANIFEST FROM THE ISSUANCE OF SHOW CAUSE NOTICE FOR ADDITION U/S. 41(1) WHILE TREATING THE SAME AS UNSECURED LOANS. THE APPELLANT DISCHARG ED THE LIABILITY 3 CAST ON HIM BY FURNISHING COPIES OF ACCOUNTS AFFID AVITS BY THE CREDITORS/LEGAL HEIRS. IN FACT IN 3 CASES THE LOAN S WERE REPAID IN THE SUBSEQUENT YEARS AND EVIDENCE TO THIS EXTENT HAS AL SO BEEN FILED BEFORE THE A.O. EVEN IN THE CASE OF DISEASED CREDITORS AF FIDAVITS HAVE BEEN FILED BY THE LEGAL HEIRS STAKING CLAIM FOR THE OUTS TANDING AMOUNT FROM THE APPELLANT. THE APPELLANT FULLY DISCHARGED THE O NUS CAST ON HIM IN PROVING THE GENUINENESS OF THE LOANS AND IDENTITY A ND CREDITWORTHINESS OF THE LENDERS. IN ANY CASE BROUGHT FORWARD BALANC ES OF THE CASH CREDITORS CANT BE BROUGHT TO TAX IN THE YEAR UNDER CONSIDERATION. THE ISSUE OF AMOUNTS OUTSTANDING FOR A NUMBER OF YEARS AND THEREFORE TREATING THEM AS REMISSION/CESSATION OF LIABILITY A PPLYING THE PROVISIONS OF SEC. 41(1) IS RELEVANT AND APPLICABLE ONLY FOR THE TRADE CREDITS AND NOT CASH CREDITS. IN VIEW OF THE ABOVE THE ADDITION MADE BY THE A.O. IS DELETED AND THE GROUNDS OF APPEAL AR E ALLOWED. 5. IN THE RESULT THE APPEAL IS ALLOWED. 4. ON DUE CONSIDERATION OF THE ORDER OF THE LEARNED CIT(APPEALS) WE DO NOT FIND ANY REASON TO INTERFERE IN IT. THE APPEAL OF THE REVENUE IS DE VOID OF ANY MERIT HENCE REJECTED. DECISION PRONOUNCED IN THE OPEN. SD/- SD/- ( A.N. PAHUJA ) ( RAJPAL YADAV ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 28/11/2011 MOHAN LAL 4 COPY FORWARDED TO: 1) APPELLANT 2) RESPONDENT 3) CIT 4) CIT(APPEALS) 5) DR:ITAT ASSISTANT REGISTRAR