RAMESH K DHAKAD, MUMBAI v. ITO WD 14(1)(3), MUMBAI

ITA 1314/MUM/2007 | 2003-2004
Pronouncement Date: 24-02-2010 | Result: Allowed

Appeal Details

RSA Number 131419914 RSA 2007
Assessee PAN AAGPD2921D
Bench Mumbai
Appeal Number ITA 1314/MUM/2007
Duration Of Justice 3 year(s) 12 day(s)
Appellant RAMESH K DHAKAD, MUMBAI
Respondent ITO WD 14(1)(3), MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 24-02-2010
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted D
Tribunal Order Date 24-02-2008
Date Of Final Hearing 02-12-2009
Next Hearing Date 02-12-2009
Assessment Year 2003-2004
Appeal Filed On 12-02-2007
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH D MUMBAI BEFORE SHRI A.L.GEHLOT AM & SMT. P.MADHAVI DEVI JM I.T.A.NO.1314/MUM/2007 - A.Y 2003-04 SHRI RAMESH K. DHAKAD 127 OPP. DATTAMANDIR THAKURDWAR MUMBAI 400 002 PAN NO.AAGPD 2921 D INCOME TAX OFFICER WARD 14(1)(3) MUMBAI (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI M.P.SHARMA. REVENUE BY : SHRI MOHD. USMAN. O R D E R PER P.MADHAVI DEVI JM: THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST CI T(A)S ORDER DATED 8-12-2006. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL- 1. THE LEARNED CIT APPEALS HAS ERRED IN ALLOWING TH E ADDITION OF INCOME ON ACCOUNT OF LOAN RECEIVED FROM M/S ARIHANT JEWELLERS TO THE EXTENT OF RS.3 75 000/- IN SPITE OF ALL PART ICULARS AND PROOFS OF LOAN TRANSACTIONS WERE PRODUCED BEFORE HI M. 2. THE LEARNED CIT APPEALS HAS ERRED IN ALLOWING TH E ADDITION OF INCOME ON ACCOUNT OF LOAN TAKEN FROM SMT. PREMLATA R. DHAKAD TO THE EXTENT OF RS.25 000/- IN SPITE OF ALL THE PARTICULARS AND PROOFS OF LOAN TRANSACTIONS WERE PR ODUCED BEFORE HIM. 3. THE LEARNED CIT APPEALS HAS ERRED IN DISALLOWING OF PROPORTIONATE AMOUNT OF INTEREST TO THE ABOVE LOANE RS. 3. AS REGARDS GROUND NO.1 BRIEF FACTS ARE THAT THE ASSESSEE IS AN INDIVIDUAL AND FILED HIS RETURN OF INCOME DECLARING AN INCOME OF RS.1 45 369/-. THE ASSESSMENT WAS COMPLETED U/S.144 OF THE INCOME TAX ACT AGAINST WHICH ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT[A] 2 ALONG WITH THE NECESSARY DETAILS. THE CIT[A] CALLE D FOR THE REMAND REPORT OF THE AO AND AFTER RECEIVING THE SAME GRANT ED CERTAIN RELIEFS TO THE ASSESSEE AND CONFIRMED CERTAIN ADDITIONS. AGAIN ST THE ADDITIONS CONFIRMED BY THE CIT[A] THE ASSESSEE IS IN SECOND APPEAL BEFORE US. 4. DURING THE APPELLATE PROCEEDINGS THE CIT[A] OBS ERVED THAT THE ASSESSEE HAD OPENING BALANCE OF LOANS OF RS.17 12 5 20/- AND THERE WAS AN ADDITION OF RS.11 60 200/- REPAYMENTS AT RS .3 41 654/- AND THE CLOSING BALANCE OF LOANS STOOD AT RS.25 31 066/ -. HE OBSERVED THAT THERE WERE FRESH ADDITIONS IN THE LOANS FROM FOUR P ARTIES AND THE ASSESSEE HAS BEEN ABLE TO PROVE THE LOANS FROM TWO PARTIES ONLY. THE OTHER TWO PARTIES FROM WHOM THE LOANS ARE SAID TO H AVE BEEN TAKEN BUT ARE NOT PROVED ARE (I) M/S ARIHANT JEWELLERS RS.6.85 000/- AND (II) SMT. PREMLATA DHAKAD RS.25 000/-. AS REGARDS T HE LOAN OF RS.25 000/- FROM SMT. PREMLATA DHAKAD IS CONCERNED THE CIT[A] HELD THAT SHE WAS THE WIFE OF THE ASSESSEE AND HER SOURC E WAS NOT EXPLAINED WITH REGARD TO THE CASH DEPOSIT OUT OF WH ICH THE SUM OF RS.25 000/- WAS GIVEN AS LOAN. AS REGARDS THE LOAN OF RS.6 85 000/- FROM M/S ARIHANT JEWELLERS IS CONCERNED HE HELD TH AT THERE IS DIFFERENCE IN THE CLOSING BALANCES SHOWN BY THE ASS ESSEE AND M/S ARIHANT JEWELLERS AND THEREFORE THEY SEEM TO BE IN THE NATURE OF ACCOMMODATION ENTRIES. HE THUS CONFIRMED THE ADDI TIONS AND ALSO DISALLOWED THE PROPORTIONATE INTEREST RELATING TO T HESE LOANS. 5. AT THE TIME OF HEARING THE LD. COUNSEL FOR THE ASSESSEE HAS DRAWN OUR ATTENTION TO THE PAPER BOOK FILED BY HIM AND PARTICULAR 3 ATTENTION WAS DRAWN TO PAGES 181 TO 185 OF THE PAPE R BOOK WHEREIN THE ASSESSEES EXPLANATION WITH REGARD TO THE ABOVE LOANS IS GIVEN AS UNDER- LOAN FROM SMT. PREMLATA DHAKAD. IN THIS RESPECT THE LEARNED CIT APPEALS OBSERVED A S UNDER: IN THIS RESPECT OF THE LOAN FROM SMT. PREMLATA DHA KAD IT WAS SEEN THAT SHE IS THE WIFE OF THE APPELLANT AND THE DEPOS IT HAS BEEN MADE IN CASH BY SMT. PREMLATA DHAKAD. AT THE TIME OF HEARIN G NO EXPLANATION WITH REGARD TO THE SOURCE OF CASH DEPOSIT OF RS.25 000/- ON 03-06- 2002 HAS BEEN FURNISHED. THUS THE LOAN RECEIVED FR OM SMT. PREMLATA DHAKAD OF RS.25 000/- REMAINS UNEXPLAINED AND PARTI CULARLY LOOKING TO THE FACT THAT THE LOANER WAS RELATED TO THE APPELLA NT AND THE SOURCE WAS NOT EXPLAINED WITH REGARD TO THE CASH DEPOSIT T HE SUM OF RS.25 000/- RECEIVED BY THE APPELLANT BY WAY OF LOA N IS CONSIDERED UNEXPLAINED AND ADDITION THAT ACCOUNT IS CONFIRMED . THE APPELLANT HAS SUBMITTED BEFORE THE CIT WHICH TH IS LETTER DATED 29-11-2006 PARA 3. ALL NECESSARY EVIDENCE WERE PRODUCED AND THE MATTE R OF CASH DEPOSIT IN HER ACCOUNT HAS BEEN EXPLAINED AS HER EARNING DE CLARED IN THE RETURN OF INCOME. THEREFORE THERE IS NO REASON OF S USPECTING THE ABOVE LOAN. THE EVIDENCE SUBMITTED WERE 1. THE COPY OF RETURN OF INCOME 2. COMPUTATION OF INCOME THE ASSESSEE SMT. PREMLATA DHAKAD IS ASSESSED TO TAX AND SHE HA S HER INDEPENDENT INCOME AND OUT OF THE SAID INCOME H AS GIVEN THE LOAN. LOAN FROM ARIHANT JEWELLERS IN RESPECT OF THE ABOVE LOAN THE CIT APPEALS OBSERV ES AS UNDER: AS REGARDS THE AMOUNT OF LOAN RECEIVED FROM M/S AR IHANT JEWELLERS OF RKS.6 85 000/- IT WAS SEEN THAT THERE IS MIS-MATCH IN THE CLOSING BALANCES SHOWN BY THE APPELLANT AND M/S ARIHANT JEW ELLERS. M/S ARIHANT JEWELLERS HAD NOT SHOWN INTEREST RECEIVED F ROM THE APPELLANT AS PART OF ITS INCOME. THUS CONSIDERING THE DEFECTS IN THE STATEMENTS OF ACCOUNTS AND THE FACT THAT THE SAME HAS NOT BEEN SHOWN AS INCOME I AM OF THE VIEW THAT THEY WERE NOT GENUINE TRANSACTIONS AND WERE IN THE NATURE OF ACCOMMODATION ENTRIES. IN THIS RESPECT MY CLIENT HAS FULLY RECONCILED THE DIFFERENCE OF CLOSING BALANCE OF M/S ARIHANT JEWELLERS AS PER THEIR BOOKS WHICH IS AS UNDER: 4 BALANCE AS PER APPELLANTS BOOKS RS.6 39 578 ADD: CHQ NO.471685 DATED 09-05-2002 ISSUED M/S ARIHIT ALUMINUM WRONGLY DEBITED TO M/S ARIHANT JEWELLERS A/C RS. 50 000 ADD : AS ABOVE CHQ NO.417732 DATED 20-06-2002 RS. 34 000 ADD : INTEREST FOR THE A.Y 2002-2003 DEBITED BY ARIHANT JEWELLERS BUT NOT CREDITED BY THE APPELLANT RS. 47 654 BALANCE AS IN THE BOOKS OF ARIHANT JEWELLERS RS.7 73 232 THEREFORE THERE IS NO DIFFERENCE IN THE BOOKS OF TH E PARTIES. IF THERE IS ANY WRONG ENTRY DONE THE SAME IS RECONCILED. AS REGARDS TO THE OBSERVATION OF THE LEARNED CIT TH AT THE INTEREST IS NOT BEEN SHOWN BY M/S ARIHANT JEWELLERS WE SUBMIT THAT ARIHANT JEWELLERS HAS SUBMITTED THEIR COPY OF PROFIT & LOSS A/C FOR THE YEAR ENDED 31 ST MARCH 2003 IN WHICH HE HAS SHOWN RS.3 49 038/- AS INTEREST RECEIVED. SIMILARLY THEY HAVE SUBMITTED TH E COPY OF LEDGER A/C OF M/S ALUMINUM DISTRIBUTORS WHERE IN THE INTEREST INCOME HAS BEEN DEBITED TO M/S ALUMINUM DISTRIBUTORS A/C. THEREFORE IT IS INCORRECT TO SAY THAT THE INTEREST A/C HAS NOT BEEN SHOWN BY M/S ARIHANT JEWELLERS IS INCORRECT AND THE REFORE THE ENTIRE LOAN TRANSACTIONS WITH THE ABOVE PARTY SHOULD BE AL LOWED IN FULL AND THE ADDITION OF RS.6 85 000/- SHOULD BE DELETED. AS IN VIEW OF THE ABOVE EXPLANATION THE DISALLOWANC E OF INTEREST SHOULD BE DELETED. HE SUBMITTED THAT ALL THE DETAILS HAVE BEEN FILED B EFORE THE AO DURING THE REMAND PROCEEDINGS AND ALSO BEFORE THE CIT[A] AND THE EXPLANATION GIVEN BY THE ASSESSEE HAS NOT BEEN CONS IDERED. 6. THE LD. DR ON THE OTHER HAND SUPPORTED THE ORD ER OF THE AO. 7. HAVING GONE THROUGH THE MATERIAL ON RECORD WE FIND THAT THE ASSESSEE HAD FILED DETAILS BEFORE THE CIT[A] WHICH HAVE BEEN CONSIDERED BY THE AO DURING THE REMAND PROCEEDINGS. HOWEVER WE FIND THAT NEITHER THE AO NOR THE CIT[A] HAS GIVEN SUFFICIENT REASONS AS TO WHY THE EXPLANATION GIVEN BY THE ASSESSEE WITH R EGARD TO THE DIFFERENCE IN THE CLOSING BALANCES OF M/S ARIHANT J EWELLERS AND THE 5 ASSESSEE CANNOT NOT BE ACCEPTED. SIMILARLY WE FIND THAT SMT. PREMLATA DHAKAD IS ASSESSED TO TAX AND HAS HER INDEPENDENT I NCOME AND THIS FACT HAS ALSO NOT BEEN CONSIDERED BY THE AUTHORITIE S BELOW. IN VIEW OF THE SAME WE DEEM IT FIT AND PROPER TO REMAND THE I SSUE TO THE FILE OF THE AO TO VERIFY THE DETAILS AND IF FOUND TO BE COR RECT TO ALLOW THE SAME. NEEDLESS TO MENTION THAT THE ASSESSEE SHALL B E GIVEN A FAIR OPPORTUNITY OF HEARING. 8. IN THE RESULT ASSESSEES APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON THIS 24 TH DAY OF FEBRUARY 2010. SD/- SD/- (A.L.GEHLOT) (P.MADHAVI DEVI) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI: 24 TH FEBRUARY 2010. P/-*