VIRA JIRABEN DESAI,AHMEDABAD vs. THE ITO WARD - 4(1), AHMEDABAD

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ITA 617/AHD/2016Status: DisposedITAT Ahmedabad25 March 2022AY 2009-103 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the Revenue failed to provide contrary evidence to disprove the genuineness of the payment. Similar evidence was accepted for other parties, and the farmer's land records indicated capacity to make the payment.

What were the facts?

The assessee received Rs. 7 lakhs from Pankajsinh Vaghela, a farmer, as an investment. The Revenue added this amount as an unexplained investment, disbelieving the cash payment. The assessee provided confirmations, identity proof, and land records for the transaction.

What were the issues?

Whether the addition of Rs. 7 lakhs as unexplained investment is justified when the assessee provided supporting documents and the payer had the capacity to make the payment.

Which sections of the Income-tax Act were involved?

Section 143(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “A” BENCH, AHMEDABAD

Before: SMT. ANNAPURNA GUPTA&

For Appellant: Shri S. N. Divatia, Adv
For Respondent: Shri S. S. Shukla, DR
Hearing: 11.01.2022Pronounced: 25.03.2022

IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, AHMEDABAD [CONDUCTED THROUGH VIRTUAL AT AHMEDABAD] BEFORE SMT. ANNAPURNA GUPTA, ACCOUNTANT MEMBER& Ms. MADHUMITA ROY, JUDICIAL MEMBER (Assessment Year: 2009-10) Viraj Iraben Desai Vs. ITO 24, Paramdham Society, Ambali- Ward-1(1), Bopal Road, Ahmedabad Ahmedabad [PAN No.AHQPD7443P] (Appellant) .. (Respondent) Assessee by : Shri S. N. Divatia, Adv. Revenue by : Shri S. S. Shukla, DR Date of Hearing 11.01.2022 Date of Pronouncement 25.03.2022 O R D E R PER Ms. MADHUMITA ROY - JM:

The instant appeal filed by the assessee is directed against the order dated 16.12.2015 passed by the Commissioner of Income Tax (Appeals)-1, Ahmedabad arising out of the order dated 26.12.2011 passed by the ITO, Ward-1(1), Ahmedabad under Section 143(3) of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) for A.Y. 2009-10.

2.

Addition of Rs. 7 lacs as unexplained investment made by the Revenue is under challenge before us.

3.

The assessee an individual filed its return of income on 23.03.2010 declaring total income at Rs. 2,35,000/-. The said income was assessed under Section 143(3) of the Act by the Ld. AO by making addition of Rs. 41,03,923/- on several count which was ultimately deleted by the Ld. CIT(A) except Rs. 7

Viraj Iraben Desai vs. ITO Asst.Year –2009-10 - 2 - lakhs which was paid to the assessee by one Pankajsinh Vaghela residing in rural areas and deriving income from farming.

4.

We have heard the rival submissions made by the respective parties and we have also perused the relevant materials available on record.

5.

It appears on record that payment of Rs. 14,50,000/- was made to the assessee from three persons namely Pratapsang Hamsang Gadhvi, Pankajsinh Vaghela and Ghanshyamsinh Mod, all are residing in rural areas and deriving income from farming. It is relevant to mention that such payment was made to the assessee for investment purposes. In support of such payment the assessee duly submitted the confirmation, identity of the persons, necessary document like 7/12 extract and affidavits during the course of assessment proceeding and before the First Appellate Authority too in respect of all three persons. Though the Ld. CIT(A) had accepted the documents in respect of Ghanshyamsinh M Mod, Pankajsinh Vaghela and Pratapsang Hamsang Gadhvi the transaction made between the assessee and the Mr. Pankajsinh Vaghela to the tune of Rs. 7 lakhs has been disapproved on the count that nobody would give such a big sum in cash during a period of one and a half month.

We have also considered the 7/12 extract available at Page 187 of the Paper Book filed before us wherefrom it appears that the Shri Pankaj Vaghela is in possession of adequate agricultural land which was missed out to be taken into consideration by the Revenue. We note that similar sort of evidences have been already accepted in respect of other two parties by the Revenue.

6.

The Ld. DR has also failed to bring our notice any contrary evidence in support of addition which could proof that the payment made by the Viraj Iraben Desai vs. ITO Asst.Year –2009-10 - 3 - Pankajsinh Vaghela is not genuine or the said person is not capable of paying the said amount to the assessee which could have been added to the total income of the assessee treating the said transaction as not real. Hence, in the absence of any contrary document we do not concur with the finding of the Revenue in support of the impugned addition. The addition is, thus, hereby deleted. Assessee’s appeal is, therefore, allowed.

7.

In the result, this appeal of assessee is allowed.

This Order pronounced in Open Court on 25/03/2022 Sd/- Sd/- (ANNAPURNA GUPTA) (Ms. MADHUMITA ROY) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad; Dated 25/03/2022 TRUE COPY TANMAY, Sr. PS आदेश क� ��त�ल�प अ�े�षत/Copy of the Order forwarded to : 1. अपीलाथ� / The Appellant 2. ��यथ� / The Respondent. 3. संबं�धत आयकर आयु�त / Concerned CIT 4. आयकर आयु�त(अपील) / The CIT(A)- 5. �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड� फाईल / Guard file. आदेशानुसार/ BY ORDER,

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