The ITO, Ward 3(1), Surat v. Smt Mita Sahilesh Kumar Patel, Surat

ITA 896/AHD/2009 | 2005-2006
Pronouncement Date: 30-09-2011 | Result: Dismissed

Appeal Details

RSA Number 89620514 RSA 2009
Assessee PAN ABRPP2834P
Bench Ahmedabad
Appeal Number ITA 896/AHD/2009
Duration Of Justice 2 year(s) 6 month(s) 7 day(s)
Appellant The ITO, Ward 3(1), Surat
Respondent Smt Mita Sahilesh Kumar Patel, Surat
Appeal Type Income Tax Appeal
Pronouncement Date 30-09-2011
Appeal Filed By Department
Order Result Dismissed
Bench Allotted D
Tribunal Order Date 30-09-2011
Date Of Final Hearing 22-09-2011
Next Hearing Date 22-09-2011
Assessment Year 2005-2006
Appeal Filed On 23-03-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH AHMEDABAD (BEFORE S/SHRI BHAVNESH SAINI JM AND A. K. GARODIA AM) ITA NO.896/AHD/2009 A. Y.: 2005-06 THE INCOME TAX OFFICER WARD 3 (1) ROOM NO. 210 AAYAKAR BHAVAN MAJURA GATE SURAT VS SMT. MITA SHAILESHKUMAR PATEL B-402 NEW GREEN CITY CO-OP. HOUSING SOCIETY KHATODARA SURAT PA NO. ABRPP 2834 P (APPELLANT) (RESPONDENT) APPELLANT BY SHRI O. P. BATHEJA DR RESPONDENT BY NONE DATE OF HEARING: 22-09-2011 DATE OF PRONOUNCEMENT: 30-09-2011 O R D E R PER BHAVNESH SAINI: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE LEARNED CIT(A)-II SURAT DATED 31 ST DECEMBER 2008 FOR ASSESSMENT YEARS 2005-06 ON TH E FOLLOWING GROUND: 1. ON THE FACTS IN THE CIRCUMSTANCES OF THE CASE AND LAW THE LEARNED CIT(A) HAS DELETED THE ADDITION MADE BY THE AO OF RS.13 59 500/- ON ACCOUNT OF UNEXPLAINED CASH CREDITS HOLDING THAT CREDITORS HAV E FILED THE PROOF OF FILING THEIR INCOME TAX RETURNS THEIR BANK ACCOUNTS AND CONFIRMATORY LETTERS OF HAVING ADVANCED LOAN TO THE ASSESSEE WITHOUT APPRECIATING THE FACTS THAT THE CREDITORS HAVE CREDITED CASH IN THEIR BANK ACCOUNT ONE DAY ADVANCE BEFORE THE DATE OF LOAN ADVANCED TO THE ASSESSEE AND THEY COULD ITA NO.896/AHD/2009 THE ITO W-3(1) SURAT VS SMT. MITA SHAILESHKUMAR P ATEL 2 NOT EXPLAIN THE SOURCE OF SUCH CASH TO THE AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS. 2. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF GREY WEAVING AND EMBROIDERY WORK. THE AO ASKED THE ASSESSEE TO PROVI DE CONFIRMATION LETTERS CONTRA-COPIES OF ACCOUNTS OF THE PERSONS FROM WHOM SHE HAD ACCEPTED UNSECURED LOANS DURING THE YE AR. THE ASSESSEE DULY FURNISHED CONTRA-ACCOUNT CONFIRMATION S COPIES OF ACKNOWLEDGEMENTS OF RETURNS FILED BANK STATEMENTS AND BALANCE SHEETS OF SUCH PERSONS. ON EXAMINATION OF THE BANK STATEMENTS THE AO FOUND THAT THE LENDERS HAD DEPOSITED CASH IN THE IR BANK ACCOUNTS BEFORE ISSUING CHEQUES TO THE ASSESSEE. THE RELEVAN T DETAILS HAVE BEEN REPRODUCED IN PARA 3 OF THE ASSESSMENT ORDER. THE ASSESSEE HAD TAKEN LOAN OF RS.9 95 000/- IN HIS PROPRIETORSH IP CONCERN M/S. JAY AMBE EMBROIDERY WORKS. THE AO ASKED THE ASSESSE E TO PROVIDE DETAILS OF THE SOURCE OF THE CASH DEPOSITED IN THE BANK ACCOUNTS OF THE LENDERS. IN RESPONSE THE ASSESSEE FURNISHED CA SH BOOKS OF ALL THE LENDERS. ACCORDING TO THE AO THE CASH BOOKS SH OWED THAT THE SAID PARTIES HAD TAKEN LOANS FROM DIFFERENT PERSONS IN CASH WHICH HAD BEEN DEPOSITED IN THE BANK ACCOUNTS BEFORE GIVING C HEQUES TO THE ASSESSEE; OTHERWISE THERE WAS NOT SUFFICIENT BALANC E IN THEIR ACCOUNTS. THE AO FURTHER REQUESTED THE ASSESSEE TO EXPLAIN THE SOURCE OF THE CASH DEPOSITED IN THE ACCOUNTS OF THE CREDITORS. THE ASSESSEE SUBMITTED THAT THE NAMES AND ADDRESSES OF THE CREDITORS THEIR PAN COPIES OF ACKNOWLEDGEMENTS OF RETURN OF INCOME FILED FOR THE YEAR 2005-06 CONTRA-ACCOUNT STATEMENTS AND BAN K STATEMENTS HAD BEEN FURNISHED IN RESPECT OF ALL THE CREDITORS. FURTHER THE ASSESSEE HAD FURNISHED THE CASH BOOKS OF JASUD TEXT ILES MARUTI ITA NO.896/AHD/2009 THE ITO W-3(1) SURAT VS SMT. MITA SHAILESHKUMAR P ATEL 3 ENTERPRISES SHREE GAJANAND TEXTILES SHREE GAYATRI TEXTILES AND SIJITA FABRICS WHICH WERE THE PARTIES LISTED BY TH E AO IN PARA 3 OF THE ASSESSMENT ORDER. THE ASSESSEE FURTHER ARGUED THAT SINCE THE REQUISITE EXPLANATION HAD BEEN FURNISHED ALONG WIT H DOCUMENTARY EVIDENCES NO ADDITION COULD BE MADE U/S 68 OF THE IT ACT. THE AO COULD NOT ASK THE ASSESSEE TO PROVE THE SOURCE OF T HE SOURCE. THE AO EXAMINED THE INCOME TAX RETURNS OF THE CREDITORS AND FOUND THAT IN MOST CASES THE INCOME DECLARED WAS BELOW THE TAXAB LE LIMIT WHICH MEANT THAT THEY DID NOT HAVE THE REQUISITE CREDITWO RTHINESS TO GIVE LOAN TO THE ASSESSEE. MOREOVER THE SOURCE OF DEPOS ITS OF CASH IN THEIR ACCOUNTS HAD NOT BEEN PROVED. BASED ON SOME/C ERTAIN CASE LAWS THE AO CAME TO THE CONCLUSION THAT SUCH UNSEC URED LOANS TOTALING TO RS.13 59 500/- WERE UNEXPLAINED AND CON SEQUENTLY HE ADDED THE SAME UNDER THE PROVISIONS OF SECTION 68 O F THE IT ACT. BEFORE THE LEARNED CIT(A) IT WAS CONTENDED BY THE L EARNED COUNSEL FOR THE ASSESSEE THAT THE FACTS MENTIONED BY THE AO IN THE CHART PREPARED BY HIM WERE NOT CORRECT. SHRI HITESH PATEL AGAINST WHOM THE DEPOSIT OF RS.4 95 000/- WAS SHOWN WAS NOT A D EPOSITOR. THE SAID SUM REPRESENTED A PART OF THE CONSIDERATION RE CEIVED FROM HIM TOWARDS SALE OF RESIDENTIAL FLAT. THE TOTAL CONSIDE RATION AGREED UPON WAS RS.7 LACS. SHRI HITESH PATEL HAD PAID RS.2 70 0 00/- IN CASH AND RS.2 25 000/- BY CHEQUES TOTALING TO RS.4 95 000/- . THIS HAD BEEN MENTIONED IN THE WRITTEN SUBMISSION BEFORE THE JCIT RANGE -3 SURAT IN PENALTY PROCEEDINGS U/S 271 D OF THE IT ACT. WIT H REGARD TO THE REMAINING CREDITORS/DEPOSITORS THE LEARNED COUNSEL FOR THE ASSESSEE REITERATED AND RECOUNTED THE SUBMISSIONS THAT WERE MADE BEFORE THE AO. CASH BOOKS OF ALL THE CREDITORS HAD BEEN PRODUC ED BEFORE THE ITA NO.896/AHD/2009 THE ITO W-3(1) SURAT VS SMT. MITA SHAILESHKUMAR P ATEL 4 AO WHICH HAD BEEN ACCEPTED BY HIM. THE ASSESSEE T HEREFORE HAD DISCHARGED THE ONUS OF PROVING THE GENUINENESS OF T HE ENTRIES IN THE BOOKS. IT HAS BEEN FURTHER STATED THAT ALL THE DEPO SITORS WERE REGULARLY ASSESSED AND ALL THE TRANSACTIONS HAD BEEN CARRIED THROUGH BANKING CHANNELS. COPIES OF BANK STATEMENTS OF THE ASSESSEE AND ALSO OF THE DEPOSITORS HAD BEEN PRODUCED BEFORE THE AO AS EVIDE NCE OF SUCH TRANSACTIONS. THE LEARNED COUNSEL FOR THE ASSESSEE CONTESTED THE RELEVANCE OF THE CASE LAWS MENTIONED BY THE AO AND HAS RELIED UPON SOME OTHER CASE LAWS. 3. THE LEARNED CIT(A) CONSIDERING THE EXPLANATION O F THE ASSESSEE AND MATERIAL ON RECORD DELETED THE ADDITIO N. HIS FINDINGS IN PARA 3.3 AND 3.4 OF THE IMPUGNED ORDER ARE REPRODUC ED AS UNDER: 3.3 I HAVE CAREFULLY CONSIDERED BOTH THE POSITIONS . IT IS CLEAR THAT HE AO DID NOT APPLY HIS MIND VERY SERIOU SLY TO THE FACTS OF THE CASE. THE RECEIPT OF THE SUMS TOTA LING RS.4 95 000 AS NOTED BY THE AO AGAINST THE NAME OF SHRI HITESH PATEL ACTUALLY IN DEED REPRESENTED THE ADVA NCE RECEIVED AGAINST THE SALE OF THE IMMOVABLE PROPERTY BY THE ASSESSEE AND THIS FACT HAS CLEARLY BEEN STATED BEFORE THE JCIT RANGE-3 SURAT VIDE LETTER DATED 28-02-20 08 IN PROCEEDINGS U/S 271D OF THE IT ACT. IT SIMPLY COULD NOT BE TREATED AS AN UNEXPLAINED CASH CREDIT. WITH REGARD TO THE REMAINING CREDITORS ALL EVIDENCES SUCH AS COPIES O F RETURNS OF INCOME FILED BY THE CREDITORS COPIES OF THEIR BANK STATEMENTS AND EVEN THEIR CASH BOOKS AND CONTR A- ACCOUNT CONFIRMATIONS HAD BEEN FURNISHED. THE SOURC E OF THE DEPOSITS IN THEIR BANK ACCOUNTS WAS THE CASH AVAILABLE WITH THEM IN THEIR RESPECTIVE CASH BOOKS AND THEREFORE THE BANK DEPOSITS STOOD EXPLAINED. NOW THE AO WANTED THE ASSESSEE TO EXPLAIN THE CASH DEPOSITE D IN TH4E CASH BOOKS WHICH WAS GOING A LITTLE TO FAR IN INVESTIGATING THE SOURCE OF THE FUNDS AVAILABLE WIT H THE ITA NO.896/AHD/2009 THE ITO W-3(1) SURAT VS SMT. MITA SHAILESHKUMAR P ATEL 5 DEPOSITORS. BY FURNISHING THE AFORESAID DOCUMENTS A ND BOOKS THE ASSESSEE HAD CLEARLY DISCHARGED THE INIT IAL BURDEN WHICH LAY ON HIM. THE BURDEN HAD THEN SHIFTE D ON TO THE AO TO DISPROVE SUCH EVIDENCE. UNFORTUNATELY HE TOOK NO ACTION IN THIS REGARD AND REMAINED AN ARM- CHAIR INVESTIGATOR EXPECTING THE ASSESSEE TO FULFILL AN ONUS WHICH ACTUALLY LAY ON HIM. 3.4 GIVEN SUCH FACTS AND CIRCUMSTANCES OF THE CASE AS DISCUSSED IN THE PRECEDING PARAGRAPHS I HAVE COME TO THE CONCLUSION THAT SINCE THE ASSESSEE HAD FULLY DISCHARGED THE ONUS OF PROVING THE GENUINENESS OF S UCH LOANS THERE WAS NO CASE FOR TREATING SUCH LOANS AS UNEXPLAINED IN TERMS OF SECTION 68 OF THE IT ACT. T HE AO IS DIRECTED TO DELETE THE ADDITION OF TH4E SUM OF RS.13 59 500. 4. THE LEARNED DR RELIED UPON THE ORDER OF THE AO A ND ALSO FILED COPY OF THE BANK STATEMENTS OF ALL THE CREDITORS WH ICH WERE FILED BEFORE THE AO AND SUBMITTED THAT BEFORE ISSUING CHE QUES TO THE ASSESSEE CASH WAS DEPOSITED IN THE ACCOUNTS OF THE CREDITORS FOR WHICH NO SOURCE IS EXPLAINED THEREFORE ADDITION S HOULD NOT HAVE BEEN DELETED. AS REGARDS THE CREDITOR SHRI HITESH P ATEL IT WAS EXPLAINED THAT INITIALLY THE ASSESSEE CLAIMED IT TO BE A CASE OF CASH CREDIT BUT LATER ON IT WAS SHOWN AS PART OF THE SA LE CONSIDERATION RECEIVED TOWARDS SALE OF THE RESIDENTIAL PROPERTY. THEREFORE THE LEARNED CIT(A) SHOULD NOT HAVE DELETED THE ADDITION . THE LEARNED DR PRODUCED THE ASSESSMENT RECORDS ALSO FOR PERUSAL OF THE BENCH. NONE APPEARED ON BEHALF OF THE ASSESSEE DESPITE SER VICE OF NOTICE. THE ASSESSEE IS THEREFORE PROCEEDED EX-PARTE. 5. ON CONSIDERATION OF THE FACTS OF THE CASE IN THE LIGHT OF THE SUBMISSION OF THE LEARNED DR WE DO NOT FIND ANY ME RIT IN THE APPEAL ITA NO.896/AHD/2009 THE ITO W-3(1) SURAT VS SMT. MITA SHAILESHKUMAR P ATEL 6 OF THE REVENUE. THE AO ON EXAMINATION OF THE BANK S TATEMENT FOUND THAT THE LENDERS HAVE DEPOSITED CASH IN THEIR BANK ACCOUNT BEFORE ISSUING CHEQUES TO THE ASSESSEE. THE ASSESSEE HAD P RODUCED THE CASH BOOKS OF FIVE CREDITORS WHICH SHOW THAT SUFFIC IENT CASH WAS AVAILABLE IN THEIR CASH BOOK WHICH WAS DEPOSITED IN THEIR BANK ACCOUNT. IN THE CASE OF HITESH PATEL THE ASSESSEE CLAIMED THAT AMOUNT WAS PART OF CONSIDERATION RECEIVED FROM HIM TOWARDS SALE OF THE RESIDENTIAL PROPERTY. THE LEARNED DR PRODUCED T HE ASSESSMENT RECORDS IN WHICH ALL THE RELEVANT MATERIALS CONSIDE RED BY THE AO AND THE LEARNED CIT(A) IS AVAILABLE ON RECORD OF THE AO . THE AO HAS NOT POINTED OUT ANY INFIRMITY IN THE CASH BOOK PRODUCED OF THE CREDITORS. SINCE THE ASSESSEE PRODUCED THE DOCUMENTARY EVIDENC ES AND MATERIAL ON RECORD THE ASSESSEE HAS BEEN ABLE TO P ROVE THAT IN THE CASE OF HITSH PATEL IT WAS SALE CONSIDERATION THE REFORE THE LEARNED CIT(A) RIGHTLY DELETED THE ADDITION U/S 68 OF THE I T ACT AND IN THE OTHER CASES MAIN OBJECTION OF THE AO WAS THAT THE CASH WA S DEPOSITED IN THE BANK ACCOUNT OF THE CREDITORS BEFORE ISSUE OF T HE CHEQUES. HOWEVER THE ASSESSEE PRODUCED THE CASH BOOK OF JAS UD TEXTILES MARUTI ENTERPRISES SHREE GAJANAND TEXTILES SHRI G AYATRI FABRICS AND SIJITA FABRICS BEFORE THE AO TO SHOW THAT OUT O F THEIR CASH BOOK CASH WAS DEPOSITED IN THEIR ACCOUNTS. THUS THE MAT ERIAL WAS SUFFICIENT TO PROVE THAT THE ASSESSEE RECEIVED GENU INE CASH CREDIT IN THE MATTER. IT IS ALSO NOT IN DISPUTE THAT THE CRED ITORS ARE ASSESSED TO TAX AND THE TRANSACTIONS HAVE BEEN MADE THROUGH BAN KING CHANNEL WOULD PROVE THAT THE ASSESSEE DISCHARGED THE ONUS T O PROVE GENUINE CREDIT IN THE MATTER. THE LEARNED CIT(A) ON PROPER APPRECIATION OF THE FACTS AND THE MATERIALS ON RECORD RIGHTLY DELETED T HE ADDITION. IN THE ITA NO.896/AHD/2009 THE ITO W-3(1) SURAT VS SMT. MITA SHAILESHKUMAR P ATEL 7 ABSENCE OF ANY CONTRARY MATERIAL ON RECORD TO REBUT THE FINDING OF THE LEARNED CIT(A) WE DO NOT FIND IT TO BE A FIT CASE FOR INTERFERENCE IN THE ORDER OF THE LEARNED CIT(A). THE APPEAL OF THE REVE NUE HAS NO MERIT AND IS ACCORDINGLY DISMISSED. 6. IN THE RESULT THE DEPARTMENTAL APPEAL IS DISMISSED . ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (A. K. GARODIA) ACCOUNTANT MEMBER (BHAVNESH SAINI) JUDICIAL MEMBER LAKSHMIKANT/- COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR ITAT AHMEDABAD 6. GUARD FILE BY ORDER D Y. REGISTRAR ITAT AHMEDABAD