TEJASH MAHENDRABHAI PATEL,ANAND vs. THE ITO, WARD-5, ANAND

The brief facts of the case are that the assessee is engaged in the business of Vehicle Rental. The assessee filed return of income for the year under consideration on 15.02.2016 declaring total income at Rs.3,63,630/-. The case was selected for scrutiny and notice u/s 143(2) of the Act was issued on 29.09.2016. The Assessing Officer, after verification of the details submitted, passed assessment order u/s 143(3) of the Act on 29.12.2017 and determined the income at Rs.1,07,07,030/- after making an addition of Rs.1,03,43,401/- on account of new capital introduced during the year.

Aggrieved by the order of the Assessing Officer, the assessee filed an appeal before the Ld. CIT(A), who confirmed the action of the Assessing Officer and upheld the Tejash Mahendrabhai Patel Vs. ITO Asst. Year : 2015-16 - 2– addition of Rs.1,03,43,401/- on account of unexplained income in the hands of the assessee u/s 69A of the Act.

Aggrieved by the order of the Ld. CIT(A), the assessee is now in appeal before the Tribunal.

Before us, the Ld. AR submitted that the amount of Rs.1,03,43,401/- represents funds remitted from his TD Bank account in the USA to his ICICI Bank account in India and is not unexplained income. The source of the remittance is the long-term capital gain of Rs.2,07,19,525/- earned in A.Y. 2012–13 from the sale of shares of Sterling International Enterprises Ltd., duly disclosed in the return and assessed under section 143(3) of the Act. Supporting documents, including bank statements and SWIFT copies, were furnished. It was argued that the Assessing Officer ignored the evidence and incorrectly treated the disclosed funds as unexplained.

The Ld. DR, on the other hand, supported the orders of the authorities below. The Ld. DR argued that the assessee could not produce any kind of documentary evidence to prove that the amount credited to capital account of Rs.1,03,43,000/- either during the assessment proceedings or during appellate proceedings. Therefore, he argued that the addition made by the Assessing Officer as unexplained income was not based on assumptions and presumptions and was made only after the assessee could not discharge the onus casted upon him to produce the evidences.

We have heard both the parties and perused the material available on record. We have gone through the submissions made by the assessee before the Ld. CIT(A). The submissions reveal that the assessee has sold equity shares during the F.Y. 2011-12 for a consideration of Rs.2,26,63,648/- and disclosed the long-term capital exempt u/s 10(38) in the ITR for that year. The return for the F.Y. 2011-12 was selected for scrutiny and the Assessing Officer has assessed exempt income at Rs.2,07,19,525/- and passed assessment order u/s 143(3) r.w.s. 147 on 04.12.2019 and also accepted the business income. The assessee has deposited the entire sale consideration received on sale of share to his SB A/c No. 008501512977 with ICICI Bank, Anand Branch. Out of the sale consideration received, the assessee has transferred $200,000 to USA on 24.06.2011 to his own bank account No. 972889265 with JP Morgan Chase Bank. Further, the brother of the assessee Mr. Amish M. Patel has transferred $2,00,000/- from his SB A/c No. Asst. Year : 2015-16 - 3– 8501002292 with ICICI Bank, Anand Branch to the assessee's bank account No.972889265 with JP Morgan Chase Bank NA. During the F.Y. 2011-12 the assessee has transferred $ 4,00,000/-(2 lakh from his SB a/c & 2 lakh from his Brother's SB a/c) to his bank account No. 972889265 with JP Morgan Chase Bank N.A. Out of the fund transferred during the F.Y. 2011-12 to USA, assessee has paid $ 3,00,000/- to Mr. Rishi B Parikh vide Ch. No. 9990 on 27.10.2011 from his bank a/c No. 972889265 with JP Morgan Chase Bank NA. Mr. Rishi Parikh has repaid $1,50,000/- on 19.08.2013 & $30,000/- on 29.08.2013. The amount of repayment received has been credited to assessee bank a/c No. 4283299224 with TD Bank, USA. During the F.Y. 2014-15, the assessee has made remittance to India in SB a/c No. 8501512977 from his bank A/c No. 4283299224 with TD Bank, USA.

1 The assessee submitted copy of bank statement of SB a/c # 8501512977 with ICICI Bank, Anand Branch in which the remittance was credited and also submitted the bank statement of bank account in USA. The Assessing Officer has made an addition of Rs. 1,03,43,401/- holding that the assessee failed to submit the source of deposits in foreign bank account of $ 50,000 on 25.09.2014 and $ 1,15,000. It is undisputed that the assessee has made remittance of $ 4,00,000/- to USA during the FY 2011-12. The assessee has explained that the out of the remittance, he has given advance to Mr. Rishi B. Parikh on 27.10.2011. The assessee has explained that out of the loan amount, Mr. Rishi Parikh has repaid $ 1,80,000/- in F.Y. 2013-14; out of which the assessee has remitted $ 1,66,977.24 (50000-114975+2002.24) from USA to India and the same is credited to SB a/c with ICICI Bank, Anand Branch. Copy of assessment order, bank statement for the F.Y. 2011-12, copy of both the cheques, copy of assessment order u/s 143(3) r.w.s. 147 for AY 2012-13, bank statement of assessee of ICICI Bank from 01.04.2011 to 31.03.2012, bank statement of Amishbhai M. Patel of ICICI Bank from 01.04.2011 to 31.03.2012, bank statement of Tejash Mahendrabhai Patel Vs. ITO Asst. Year : 2015-16 - 4– Chase Bank and JP Morgan Chase Bank, Copies of bank advise and cheque clearing, bank statement of assessee of TD Bank with copies of cheques, bank advise for receipt from Rishi B. Parikh, bank statement of assessee of ICICI Bank from 01.04.2014 to 31.03.2015, bank statement of U.S. Bank for transfer of US Doller, bank advise of ICICI Bank for receipt of $50,000, bank statement of US Bank for transfer of US Doller with receipt, bank advise of ICICI bank for receipt of $ 1,14,975/- and receipt of ICICI bank for $ 2002 are on record.

2 Hence, keeping in view the undisputable evidences mentioned above, we hold that the assessee has proved the sources beyond doubt and hence, no addition is warranted in this case.

In the result, the appeal of the assessee is allowed.

अपीलाथ / The Appellant 2.  थ / The Respondent. 3. संबंिधतआयकरआयु / Concerned CIT 4. आयकरआयु(अपील) / The CIT(A)- 5. िवभागीयितिनिध, आयकरअपीलीयअिधकरण, अहमदाबाद/ DR, ITAT, Ahmedabad 6. गाड फाईल/ Guard file.