The ITO, Ward-3(4),, Ahmedabad v. Shri Sharad C.Patel, Ahmedabad

ITA 1832/AHD/2007 | 2004-2005
Pronouncement Date: 24-02-2010 | Result: Partly Allowed

Appeal Details

RSA Number 183220514 RSA 2007
Bench Ahmedabad
Appeal Number ITA 1832/AHD/2007
Duration Of Justice 2 year(s) 9 month(s) 21 day(s)
Appellant The ITO, Ward-3(4),, Ahmedabad
Respondent Shri Sharad C.Patel, Ahmedabad
Appeal Type Income Tax Appeal
Pronouncement Date 24-02-2010
Appeal Filed By Department
Order Result Partly Allowed
Bench Allotted C
Tribunal Order Date 23-08-2007
Date Of Final Hearing 22-02-2010
Next Hearing Date 22-02-2010
Assessment Year 2004-2005
Appeal Filed On 03-05-2007
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH C AHMEDABAD BEFORE SHRI N.S.SAINI ACCOUNTANT MEMBER AND SHRI MAHAVIR SINGH JUDICIAL MEMBER ITA NO.1832/AHD/2007 ASSESSMENT YEAR:2004-05 DATE OF HEARING:22.2.10 DRAFTED:23.2.10 INCOME TAX OFFICER WARD-3(4) AHMEDABAD V/S . SHRI SHARAD C PATEL RAM NIVAS NO.1 KHANPUR AHMEDABAD PAN NO.AAMPP7978E (APPELLANT) .. (RESPONDENT) APPELLANT BY :- SHRI SHELLY JINDAL CIT-DR RESPONDENT BY:- SHRI VARTIK CHOKSHI AR O R D E R PER MAHAVIR SINGH JUDICIAL MEMBER:- THIS APPEAL BY THE REVENUE IS ARISING OUT OF THE O RDER OF COMMISSIONER OF INCOME-TAX (APPEALS)-VII AHMEDABAD IN APPEAL NO. C IT(A)-VII/ WD. 3(4) / 192/2006-07 DATED 21-02-2007. THE ASSESSMENT WAS FR AMED BY THE INCOME-TAX OFFICER WARD-3(4) AHMEDABAD U/S.143(3) OF THE INC OME-TAX ACT 1961 (HEREINAFTER REFERRED TO AS THE ACT) VIDE HIS ORDER DATED 28-1 2-2006 FOR THE ASSESSMENT YEAR 2004-05. 2. THE ONLY ISSUE IN THIS APPEAL OF REVENUE IS AS R EGARD TO THE ORDER OF CIT(A) IN DELETING THE ADDITION MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED CASH CREDIT U/S.68 OF THE ACT. 3. THE BRIEF FACTS LEADING TO THE ABOVE ISSUE ARE T HAT THE ASSESSEE HAS DECLARED UNSECURED LOAN FROM M/S. GLOBAL FINANCE AT RS.1 29 15 881/- IN THE BALANCE-SHEET. M/S. GLOBAL FINANCE IS A PROPRIETARY CONCERN OF SHR I ASIT N PATEL (HUF). THE ASSESSING OFFICER REQUESTED THE ASSESSEE TO CONFIRM THE UNSECURED LOAN OF M/S. GLOBAL FINANCE BUT M/S. GLOBAL FINANCE SIMPLY FURNI SH THE ADDRESS BUT NOT FURNISHED ITA NO.1832/AHD/2007 A.Y. 2004-05 ITO WD-3($) ABD V. SH. SHARAD C PATEL PAGE 2 THE CONFIRMATION FROM THE PARTY. THE AO DEPUTED THE INSPECTOR TO ENQUIRE THE GENUINENESS OF THE SAID PARTY AND THE INSPECTOR REP ORTED THAT THE PREMISES OF M/S. GLOBAL FINANCE IS CLOSED AND DRAWN REPORT ON THE B ASIS OF INQUIRY MADE THAT THIS OFFICE IS NOT FUNCTIONING SINCE LONG AND ACCORDINGL Y HE WAS UNABLE TO SERVE THE LETTER. THE ASSESSEE AGAIN REITERATED THE SAME ADDRESS SIN CE THE ASSESSEE COULD NOT FURNISH THE DETAILS OF PAN LETTER ADDRESS CONFIRMA TION THE AO ADDED THE UNEXPLAINED CREDITS OF M/S. GLOBAL FINANCE U/S.68 O F THE ACT. AGGRIEVED THE ASSESSEE PREFERRED APPEAL BEFORE CIT(A). 4. BEFORE CIT(A) IT WAS ARGUED BY THE ASSESSEE THAT THE SAID TRANSACTION WITH M/S. GLOBAL FINANCE HAVING CARRIED ON FOR NUMBER OF YEARS AND LOAN FROM M/S. GLOBAL FINANCE HAS BEEN RAISED IN PREVIOUS YEARS AND AS ON 01-04-2003 THE OPENING BALANCE OF M/S. GLOBAL FINANCE WAS RS.1 28 65 081/- . ACCORDINGLY IT WAS ARGUED THAT THE OPENING BALANCE OF ANY YEAR CANNOT BE ADDE D AS UNSECURED LOAN WHICH PERTAINS TO ASSESSMENT YEAR 2003-04 AND NOT THE REL EVANT ASSESSMENT YEAR 2004- 05. THE CIT(A) AFTER CONSIDERING THE FACTS OF THE C ASE DELETED THE ADDITION OF RS.1 28 65 881/- BY GIVING THE FOLLOWING FINDING IN PARA-3.2 AS UNDER:- 3.2 I HAVE CAREFULLY CONSIDERED THE ARGUMENTS OF T HE APPELLANT. I HAVE ALSO GONE THROUGH THE ASSESSMENT RECORD OF THE APPELLANT . ON GOING THROUGH THE PAST ASSESSMENT RECORDS IT IS SEEN THAT THE APPELL ANT WAS HAVING TRANSACTIONS WITH M/S. GLOBAL FINANCE AS UNDER:- PERIOD OPENING BALANCE (RS) CLOSING BALANCE (RS) INTEREST PAID (RS) (A) 1.4.2000 TO 31.3.2002(A.Y.2001-02) 22948994 23613457 1789157 (B) 1.4.2001 TO 31.3.2002 (A.Y. 2002-03) 23613457 15092063 1268106 1.4.2002 TO 31.3.2003 (A.Y. 2004-05) 15092063 12865881 780230 (D) 1.4.2003 TO 31.3.2004 (A.Y.2004-05) 12865881 12915881 NIL FOR THE A.Y. 2003-04 THE ASSESSMENT WAS COMPLETED U/S.143(3). IN COURSE OF THIS PROCEEDING THE APPELLANT HAS FILED DETAILS OF TRANSACTION WITH M/S. GLOBAL FINANCE WHERE OPENING BALANCE IS SHOWN AS RS.1 50 9 2 063/- AND CLOSING BALANCE IS SHOWN AS RS.1 28 16 881/-. AGAINST THIS BALANCE THE TRANSACTION DURING THE PERIOD UNDER CONSIDERATION IS AS UNDER:- F.Y. 2003-04 (A.Y. 2004-05) DATE PARTICULARS DR CR ITA NO.1832/AHD/2007 A.Y. 2004-05 ITO WD-3($) ABD V. SH. SHARAD C PATEL PAGE 3 AMO UNT AMOUNT (RS) 1 APRIL BY OPENING BALANCE 1 28 65 881.34 22 JN BY KALUPUR COMM.CO.OP.BANK LTD RECPT. CH. NO.289394 BEING THE AMT. RECEI VED FROM GLOBAL FINANCE (NO.1046) __ ___ 50 000 00 TO CLOSING BALANCE 1 29 15 881.34 1 29 15 881.34 -------------------- ------------------- 1 29 15 881.34 1 29 15 881.34 ============ =========== FROM THE STATEMENT OF ACCOUNTS AVAILABLE IN THE ASS ESSMENT RECORD OF THE APPELLANT IT IS CLEAR THAT THE OPENING BALANCE AS ON 1.4.2003 WAS RS.1 28 65 881/- HENCE THIS CANNOT BE ADDED AT ALL IN THE TOTAL INCOME OF THE APPELLANT RELATING TO THE PRESENT ASSESSMENT ORDER. THE CIT(A) AS REGARDS TO BALANCE RS.50 000/- PAID BY M/S. GLOBAL FINANCE TO THE ASSESSEE BY CHEQUES NO.289394 DRAWN TO KALUPUR COMM ERCIAL CO-OPERATIVE BANK LTD. ALSO DELETED BY STATING THAT THE TRANSACTION C ARRIED OUT THROUGH BANK ACCOUNT AND THE CREDITOR IS ASSESSED TO TAX FOR A NUMBER OF YEA RS. ACCORDINGLY THE CREDIT STANDS EXPLAINED. ACCORDINGLY HE DELETED THIS ADDITION OF RS.50 000/- ALSO. AGGRIEVED REVENUE CAME IN APPEAL BEFORE US. 5. BEFORE US LD. COUNSEL FOR THE ASSESSEE SHRI VAR TIK CHOKSHI STATED THAT M/S. GLOBAL FINANCE IS ASSESSED TO TAX BY THE SAME ASSES SING OFFICER AS THAT OF THE ASSESSEE I.E. WARD-3(4) AHMEDABAD. HE STATED THAT THIS LOAN OF RS.1 28 65 881/- IS CLOSING BALANCE AS ON 31-03-2003 THAT MEANS THE OP ENING BALANCE OF 01-04-2003 AND HE STATED THAT THE CLOSING BALANCE OF EARLIER P REVIOUS YEAR CANNOT BE ADDED U/S.68 OF THE ACT. HE SUPPORTED THE ORDER OF CIT(A ) THAT HE HAS VERIFIED THE FACTS AS NARRATED ABOVE AND THIS OPENING & CLOSING BALANCE A ND INTEREST PAID IS THE ACCUMULATION AS ON 31-03-2003 TO THE EXTENT OF RS.1 28 65 881/-. AS REGARDS TO RS.50 000/- THE LD. COUNSEL FOR THE ASSESSEE FURTHE R STATED THAT THE TRANSACTION IS CARRIED OUT THROUGH BANKING CHANNEL AND THE CREDITO R IS ASSESSED TO TAX IN THE SAME WARD AND THE AO SHOULD HAVE VERIFIED THIS FACT. ON THE OTHER HAND LD. CIT- DEPARTMENTAL REPRESENTATIVE SHRISHELLEY JINDAL ARG UED THAT NONE WAS PRESENT OR NO SUCH PERSON EXISTED AND THE PERSON IS NOT EXISTENCE AND ACCORDINGLY THE AO HAS NO ALTERNATIVE EXCEPT TO ADD THIS SUM. HE STATED THAT AS REGARDS TO RS.50 000/- THE AMOUNT IS NOT AT ALL EXPLAINED. THE ASSESSEE HAS N EITHER PROVED THE IDENTITY OF THE CREDITOR NOR CREDITWORTHINESS OR GENUINENESS OF TRA NSACTION. ACCORDINGLY HE URGED THE BENCH TO CONFIRM THE ENTIRE ADDITION IN TOTO. ITA NO.1832/AHD/2007 A.Y. 2004-05 ITO WD-3($) ABD V. SH. SHARAD C PATEL PAGE 4 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND GOING TH ROUGH THE FACTS AND CIRCUMSTANCES OF THE CASE. WE FIND FROM THE ORDER O F CIT(A) WHERE HE HAS NARRATED THE FACTS CLEARLY AND THE FACTS ARE NOT IN DISPUTED THAT THIS AMOUNT OF RS.1 28 65 881/- PERTAINS TO CLOSING BALANCE AS ON 31-03-2003 THAT MEANS OPENING BALANCE AS ON 01-04-2004. WE ARE OF THE VIEW THAT T HIS CLOSING BALANCE OF EARLIER YEAR CANNOT BE ADDED IN THIS YEAR. ON FACTS WE UP HOLD THE FINDINGS OF CIT(A) AS REPRODUCED ABOVE AS HE HAS NARRATED THE ENTIRE FACT S. ACCORDINGLY WE UPHOLD THE ORDER OF CIT(A) IN RESPECT OF THAT PART OF ADDITION . 7. COMING TO ADDITION OF RS.50 000/- WE FIND THAT THIS CREDIT IS RECEIVED BY THE ASSESSEE IN THIS VERY YEAR THE CREDITWORTHINESS AN D THE GENUINENESS VIS--VIS THIS TRANSACTION OF RS.50 000/- IS NOT PROVED. ACCORDING LY WE CONFIRM THIS ADDITION QUA RS.50 000/-. ACCORDINGLY THIS ISSUE OF REVENUES A PPEAL IS PARTLY ALLOWED. 8. IN THE RESULT REVENUES APPEAL IS PARTLY ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 24/02/2010 SD/- SD/- (N.S.SAINI) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD DATED : 24/02/2010 *DKP COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT(APPEALS)-VII AHMEDABAD 4. THE CIT CONCERNS. 5. THE DR ITAT AHMEDABAD 6. GUARD FILE. BY ORDER /TRUE COPY/ DEPUTY / ASSTT.REGISTRAR ITAT AHMEDABAD