DCIT, Kanpur v. Shivam Gupta, Kanpur

ITA 656/LKW/2010 | 2007-2008
Pronouncement Date: 06-01-2011 | Result: Dismissed

Appeal Details

RSA Number 65623714 RSA 2010
Assessee PAN AAEFC3439R
Bench Lucknow
Appeal Number ITA 656/LKW/2010
Duration Of Justice 2 month(s) 2 day(s)
Appellant DCIT, Kanpur
Respondent Shivam Gupta, Kanpur
Appeal Type Income Tax Appeal
Pronouncement Date 06-01-2011
Appeal Filed By Department
Order Result Dismissed
Bench Allotted A
Tribunal Order Date 06-01-2011
Date Of Final Hearing 04-01-2011
Next Hearing Date 04-01-2011
Assessment Year 2007-2008
Appeal Filed On 03-11-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH A : LUCKNOW BEFORE SHRI H. L. KARWA HONBLE VICE PRESIDENT AND SHRI N. K. SAINI ACCOUNTANT MEMBER I.T.A. NO.656/LUC/10 ASSESSMENT YEAR:2007-2008 DY. C. I. T.-4 VS. SHRI SHIVAM GUPTA KANPUR. 7/47 TILAK NAGAR KANPUR PAN:AHAPG2492F (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI ANADI VERMA D. R. RESPONDENT BY: SHRI RAKESH GARG ADVOCATE ORDER ORDER ORDER ORDER PER N. K. SAINI: PER N. K. SAINI: PER N. K. SAINI: PER N. K. SAINI: THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE OR DER DATED 13/08/2010 OF CIT(A)-II KANPUR RELEVANT TO ASSESSMENT YEAR 2007- 2008. THE ONLY GRIEVANCE OF THE DEPARTMENT IN THI S APPEAL RELATES TO THE DELETION OF ADDITION MADE BY THE ASSESSING OFFICER U/S 69 OF THE I.T. ACT 1961. 2. THE FACTS RELATED TO THIS ISSUE IN BRIEF ARE THAT THE ASSESSEE FILED HIS RETURN OF INCOME ON 31/10/2007 DECLARING AN INCO ME OF `6 50 550/-. THE SAID RETURN WAS PROCESSED U/S 143(1) OF THE ACT. LA TER ON THE CASE WAS SELECTED FOR SCRUTINY. DURING THE COURSE OF ASSESSMEN T PROCEEDINGS THE ASSESSING OFFICER SOUGHT FOR THE DETAIL S IN RESPECT OF 2 LOANS OF `43 LACS PURPORTEDLY RECEIVED FROM ONE M/S C OMMERCIAL MOTORS BAREILLY. IN RESPONSE TO THE SAID QUERY THE ASSE SSEE FURNISHED VIDE LETTER DATED 10/02/2009 A CERTIFIED COPY OF AC COUNT OF M/S COMMERCIAL MOTORS ALONG WITH THE PAN. THEREAFTER T HE ASSESSING OFFICER MADE FURTHER QUERY AS UNDER: 'YOU HAVE STATED VIDE YOUR REPLY DATED 10.02.2009 TH AT YOU HAVE TAKEN UNSECURED LOAN AMOUNTING TO `43 00 0 00/- FROM M/S COMMERCIAL MOTORS BARIELLY ON 09.01.2007. Y OUR REPLY IS REPRODUCED AS FOLLOWS: 'WITH REGARDS TO YOUR HONOUR'S QUERY REGARDING UNSECUR ED LOANS DETAILS OF THE SAME ARE AS UNDER: SL. NO. NAME & ADDRESS OF THE LENDER PAN AMOUNT DATE OF TRANSACTION PURPOSE RAISING LOAN 1. COMMERCIAL MOTORS BAREILLY AAEFC3439R 43 00 000 09/01/07 PURCHASE OF ASSETS YOU WERE REQUIRED TO FILE THE BALANCE SHEET OF M/S COMMERCIAL MOTORS BARIELLY FOR F.Y. 2006-07 VIDE T HIS OFFICE NOTICE DATED 12.11.2009. IN RESPONSE YOU HAVE FILED A COPY OF BALANCE SHEET OF M/S COMMERCIAL MOTORS BAR IELLY FOR F.Y. 2006-07 VIDE YOUR REPLY DATED 16.11.2009. IT IS EVIDENT FROM THE PERUSAL OF THE BALANCE SHEET OF M/S COMMERCIAL MOTORS BARIELLY FOR F.Y. 2006-07 THAT IT HAS NOT GIVEN ANY LOAN AMOUNTING TO `43 00 000/ - TO YOU DU RING THE PREVIOUS YEAR. IN VIEW OF THE ABOVE YOU ARE REQUIRED TO SHOW CAUSE AS TO WHY AN AMOUNT OF `43 00 000/- SHOULD NOT BE ADDED BA CK TO YOUR INCOME.' 3 2.1 IN RESPONSE TO THE AFORESAID QUERY THE ASSESSEE FILED A REPLY DATED 31/11/2009 WHICH READ AS UNDER: 'YOUR HONOUR HAS GIVEN SHOW CAUSE AS TO WHY AN AMOUNT OF `43 LACS SHOULD NOT BE ADDED BACK TO MY INCOME AS T HE SAID AMOUNT IS NOT REFLECTING IN THE BOOKS OF ACCOUNTS OF M/S COMMERCIAL MOTORS BAREILLY. IN THIS REGARD IT I S SUBMITTED THAT THE ASSESSEE VIDE REPLY DATED 10.02.2009 HAS FILED A CERTIFIED COPY OF ACCOUNT OF M/S COMMERCI AL MOTORS ALONG WITH THEIR PAN. FURTHER YOUR HONOUR HAS VIDE NOTICE DATED 12.11.200 9 ASKED TO FILE PROFIT & LOSS BALANCE SHEET TAX AUDIT REPORT ALONG WITH ANNEXURES OF M/S COMMERCIAL MOTORS WHICH WA S FILED VIDE REPLY DATED 16.11.2009. THE AMOUNT RECEI VABLE FROM SHIVAM GUPTA BY THE FIRM (COMMERCIAL MOTORS) WA S GROUPED IN LOANS & ADVANCES SCHEDULE - 6 RECOVERABLE FROM SUPPLIERS AND OTHERS. IN SUPPORT OF THE SAME A DET AIL OF GROUPING OF LOANS & ADVANCES IS BEING ATTACHED WHE REIN THE ABOVE REFERRED SUM IS REFLECTING. 2.2 THE ASSESSING OFFICER AFTER RECEIVING THE REPLY FR OM THE ASSESSEE SUMMONED SMT. SARITA GUPTA PARTNER IN M/S COMM ERCIAL MOTORS U/S 131 OF THE ACT TO PRODUCE THE FOLLOWING DO CUMENTS: 1. LEDGER OF M/S COMMERCIAL MOTORS BARIELLY FOR F.Y . 2006-07 RELEVANT TO A.Y. 2007-08. 2. BANK PASS BOOK/STATEMENT OF BANK ACCOUNT OF M/S COMMERCIAL MOTORS BARIELLY FOR F.Y. 2006-07.' 2.3 THE ASSESSING OFFICER MADE THE ADDITION OF `43 LACS BY OBSERVING AS UNDER: 4 SRI AMIT MANOHAR FILED A COPY OF TAX AUDIT REPORT (FORM NO. 3CD) OF M/S COMMERCIAL MOTORS PERTAINING TO A. Y. 2007-08 VIDE HIS REPLY DATED 03.12.2009 WHICH WAS RECEIVED IN THE OFFICE ON 04.12.2009. IT IS EVIDENT FROM THE ANNEXURE 'D' TO THE FORM NO. 3CD FOR M/S COMMERCIAL MOTORS THAT NO LOAN AMOUNTING TO `43 00 000/- HAS BEE N EXTENDED BY M/S COMMERCIAL MOTORS TO SRI SHIVAM GUPTA DURING THE PREVIOUS YEAR. THIS MEANS THAT THE CONTENTION OF THE ASSESSEE AS PER ANNEXURE TO THE REPLY DATED 10.02.2009 THAT SOUR CE OF INVESTMENT IN LAND PURCHASED DURING THE YEAR FOR `43 00 000/- IS M/S COMMERCIAL MOTORS IS PROVED WRONG. THE EXTRACT FROM ANNEXURE TO THE REPLY DATED 10.02. 2009 IS REPRODUCED AS FOLLOWS: DETAILS OF ACCRETIONS DURING THE YEAR 2006-2007 --------------------------------------------------- ------------------------ PARTICULARS DESCRIPTION OF AMOUNT SOURCE OF ASSETS INVESTMENT ------------------------------------------------- -------------------------- LAND PURCHASED LAND 43 00 000 AMOUNT PAID FROM COMMERCIAL MOTORS ------------------------------------------------- -------------------------- THIS MEANS THAT THE INVESTMENT MADE BY THE ASSESSEE IN THE LAND AMOUNTING TO `43 LACS IS UNEXPLAINED INVESTMENT. CONSEQUENTLY `43 LACS IS BEING ADDED TO THE INCOME OF THE ASSESSEE U/S 69 OF THE ACT AND TAXED ACCORDINGLY. 3. THE ASSESSEE CARRIED THE MATTER TO LEARNED CIT(A) WH O OBSERVED THAT THE ISSUE HAD BEEN UNNECESSARILY BLOWN OUT OF THE PROPORTION SINCE IT WAS A SIMPLE CASE OF LOAN RECEIVED BY THE ASSESSEE FROM ONE M/S COMMERCIAL MOTORS AND THE ASSESSEE HAD FURNISHED A CER TIFIED COPY OF THE ACCOUNT AS APPEARING IN THE BOOKS OF M/S COMMERCIAL 5 MOTORS BAREILLY ALONG WITH THEIR PAN AND ALSO THE L ENDER ATTENDED IN RESPONSE TO THE SUMMONS ISSUED BY THE ASSESSING OFFICER UNDE R SECTION 131 OF THE ACT AND HAD CONFIRMED THE TRANSACT ION. HE FURTHER OBSERVED THAT WHETHER THE OTHER PARTY I.E. M/S COMMER CIAL MOTORS HAD REFLECTED THE AMOUNT IN ANNEXURE D OF THE AUDIT R EPORT OR NOT HAD NO IMPACT ON THE GENUINENESS OF THE IMPUGNED TRANSACTION. THE LEARNED CIT (A) POINTED OUT THAT THE TAX AUDIT REPORT OF M/ S COMMERCIAL MOTORS REVEALED THAT THE ANNEXURE D RELATED TO PARTICULA RS OF PAYMENTS REFERRED U/S 40A(2)(B) AND WAS NOT RELATED TO LOANS & ADVANCES. THE LEARNED CIT (A) CATEGORICALLY STATED THAT THE IDENTI TY OF THE LOAN GIVER WAS NEVER AN ISSUE AND THE ASSESSING OFFICER WAS ALSO IN POSSE SSION OF ALL OTHER DETAILS LIKE BALANCE SHEET TAX AUDIT REPO RT OF THE LOAN GIVER. THEREFORE THERE WAS NO OCCASION FOR THE ASSESSING OFFICE R TO MAKE THE IMPUGNED ADDITION. HE ACCORDINGLY DELETED THE ADDIT ION MADE BY THE ASSESSING OFFICER. NOW THE DEPARTMENT IS IN APPEAL. 4. THE LEARNED D. R. SUPPORTED THE ORDER OF THE ASSESSIN G OFFICER. 5. IN HIS RIVAL SUBMISSIONS THE LEARNED COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW AND FURTHER SUBMITTED THAT THE ADDITION WAS MADE WITHOUT ANY BASIS PARTICULARLY WHEN ALL THE REQUISITE INFORMATION AND DETAILS SOUGHT BY 6 THE ASSESSING OFFICER WERE FURNISHED BY THE ASSESSEE. THERE FORE THE LEARNED CIT (A) WAS FULLY JUSTIFIED IN DELETING THE A DDITION. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND CAREFUL LY GONE THROUGH THE MATERIAL AVAILABLE ON THE RECORD. IN T HE PRESENT CASE IT APPEARS THAT THE ASSESSING OFFICER DOUBTED THE GENUINENE SS OF THE LOAN AMOUNTING TO `43 LACS ONLY ON THIS BASIS THAT IN A NNEXURE-D OF THE TAX AUDIT REPORT THIS TRANSACTION WAS NOT REFLECTED. HOWEVER THE ASSESSING OFFICER IGNORED THIS VITAL FACT THAT IN ANNEXU RE-D THE PAYMENTS REFERRED U/S 40A(2)(B) OF THE ACT ARE REQUIR ED TO BE MENTIONED. THOSE PAYMENTS RELATE TO ANY EXPENDITURE IN RESPECT OF WHICH PAYMENT HAS BEEN MADE OR IS TO BE MADE TO ANY P ERSON REFERRED IN CLAUSE (B) OF SUB SECTION (2) TO SECTION 40A OF THE I.T. ACT. THE PERSONS REFERRED IN CLAUSE (B) ARE THE RELATIVES OF THE ASSESSEE AND DIRECTOR OF THE COMPANY PARTNER OF THE FIRM OR MEM BER OF THE ASSOCIATION OR FAMILY OR ANY RELATIVE OF SUCH DIRECT OR PARTNER OR MEMBER ETC. IN THE PRESENT CASE THE ASSESSING OFFICER D ID NOT BRING ANY MATERIAL ON RECORD TO SUBSTANTIATE THAT M/S COMMER CIAL MOTORS BAREILLY FROM WHOM THE ASSESSEE RECEIVED THE LOAN WAS CO MING UNDER THE CATEGORY OF PERSONS REFERRED IN CLAUSE (B) OF SECT ION 2 OF SECTION 40A OF THE ACT. THEREFORE THE BASIS FOR MAKING THE ADDITION WAS ERRONEOUS. IN THE PRESENT CASE THE LOAN RECEIVED BY THE ASSESSEE WAS 7 REFLECTED IN THE BALANCE SHEET OF THE LOAN GIVER AND THE ASSESSEE FURNISHED THE DETAILS RELATING TO THE LOAN AS WELL AS MENTIONED THE PAN OF THE LOAN GIVER. EVEN IN RESPONSE TO THE SUMMON ISSU ED BY THE ASSESSING OFFICER U/S 131 OF THE ACT THE LENDER CONFIRM ED THE TRANSACTION. THEREFORE THERE WAS NO OCCASION TO MAKE THE ADDITION ON FLIMSY GROUND. IN THAT VIEW OF THE MATTER WE ARE O F THE VIEW THAT THE LEARNED CIT (A) WAS FULLY JUSTIFIED IN DELETING THE ADDITION MADE BY THE ASSESSING OFFICER. 7. IN THE RESULT THE APPEAL IS DISMISSED. (THE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 06/01 /2011) SD/. SD/. ( H. L. KARWA ) (N. K. SAINI) VICE PRESIDENT ACCOUNTANT MEMBER DATED: 06/01/2011 *SINGH COPY FORWARDED TO THE: 1. APPELLANT. 2. RESPONDENT. 3. CIT (A) 4. CIT 5. DR. ASSISTANT REGISTRAR