Shri Dipakkumar Sobhagmal Mehta, Surat v. The Income tax Officer,Ward-3(3),, Surat

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD C BENCH (BEFORE SHRI N.K. BILLAIYA ACCOUNTANT MEMBER & SHRI MAHAVIR PRASAD JUDICIAL MEMBER) ITA. NO: 954/AHD/2014 (ASSESSMENT YEAR: 2009-10) SHRI DIPAKKUMAR SOBHAGMAL MEHTA 601 ASHWAMEGH APARTMENT PARLE POINT ATHWALINES SURAT V/S INCOME TAX OFFICER WARD- 7 (2) AHMEDABAD (APPELLANT) (RESPONDENT) PAN: ACRPM0530G APPELLANT BY : SHRI RASESH SHAH RESPONDENT BY : SHRI PRASOON KABRA SR. D.R. ( )/ ORDER DATE OF HEARING : 30 -09-201 6 DATE OF PRONOUNCEMENT : 30 -09-2016 PER N.K. BILLAIYA ACCOUNTANT MEMBER: 1. WITH THIS APPEAL THE ASSESSEE HAS CHALLENGED THE C ORRECTNESS OF THE ORDER OF THE LD. CIT(A)-IV SURAT DATED 22.01.2014 PERTAI NING TO A.Y. 2009-10. ITA NO. 954/ AHD/2014 . A.Y. 2009-1 0 2 2. THE SOLE GRIEVANCE OF THE ASSESSEE IS THAT THE LD. CIT(A) ERRED IN CONFIRMING THE ACTION OF A.O. IN MAKING ADDITION OF RS. 11 01 844/- BY TREATING CREDITORS AS BOGUS. 3. FOR THE YEAR UNDER CONSIDERATION THE ASSESSEE HAS FILED HIS RETURN OF INCOME ON 30.01.2010 DECLARING TAXABLE INCOME AT RS . 3 80 505/- WHICH INCLUDED INCOME FROM CAPITAL GAINS INCOME FROM HOU SE PROPERTY AND INCOME FROM OTHER SOURCES. 4. DURING THE COURSE OF THE SCRUTINY ASSESSMENT PROCEE DINGS THE A.O. FOUND CREDIT BALANCES IN THE NAME OF SHRI DIPAK S. MEHTA LEVIS SAGAR EXPORT AND MEHTA CORPORATION TOTALING TO RS. 11 01 844/-. THE ASSESSEE WAS ASKED TO PROVE THE GENUINENESS OF THE TRANSACTIONS AND CREDI TWORTHINESS OF THE CREDITORS. THE ASSESSEE FILED CONFIRMATIONS FROM TH E RESPECTIVE PARTIES BUT NO CONTRA CONFIRMATION WAS FURNISHED. THE A.O. OBSE RVED THAT IT IS A SET LAW THAT THE ONUS LIES ON THE ASSESSEE TO PROVE THE GEN UINENESS OF THE TRANSACTIONS AND CREDITWORTHINESS OF THE CREDITORS. TAKING A LEAF OUT OF THIS LEGAL POSITION THE A.O. TREATED RS. 11 01 844/- AS BOGUS CREDIT AND ADDED TO THE TOTAL INCOME OF THE ASSESSEE. 5. ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT(A) B UT WITHOUT ANY SUCCESS. 6. BEFORE US THE LD. COUNSEL FOR THE ASSESSEE VEHEMEN TLY STATED THAT THE PROVISIONS OF SECTION 68 DO NOT APPLY ON THE FACTS OF THE CASE. PER CONTRA THE LD. D.R. STRONGLY SUPPORTED THE FINDINGS OF THE REVENUE AUTHORITIES. ITA NO. 954/ AHD/2014 . A.Y. 2009-1 0 3 7. WE HAVE CAREFULLY CONSIDERED THE ORDERS OF THE AUTH ORITIES BELOW. WE HAVE ALSO GIVEN A THOUGHTFUL CONSIDERATION TO THE RELEVA NT DOCUMENTARY EVIDENCES BROUGHT ON RECORD IN THE FORM OF PAPER BO OK. A CAREFUL PERUSAL OF THE COPY OF ACCOUNT OF THE IMPUGNED FOUR PARTIES SH OW THAT ALL THE CREDIT BALANCES ARE BROUGHT FORWARD BALANCES FROM EARLIER YEARS. SINCE ALL THE CREDIT BALANCES ARE OPENING BALANCES IN OUR UNDERS TANDING OF THE LAW; PROVISIONS OF SECTION 68 DO NOT APPLY. WE ACCORDIN GLY SET ASIDE THE FINDINGS OF THE LD. CIT(A) AND DIRECT THE A.O. TO D ELETE THE ADDITION OF RS. 11 01 844/-. 8. IN THE RESULT THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 30 - 09- 201 6. SD/- SD/- (MAHAVIR PRASAD) (N. K. BILLAIYA) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD: TRUE COPY RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR. ITAT AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT AHME DABAD