SAPNA RAJKUMAR JETHRA,THANE vs. INCOME TAX OFFICER WARD 1(1), THANE

Commissioner of Income Tax (Appeals)-2 [the ld. CIT(A)], Thane dated 24.10.2017 for Assessment Year 2013-14. The assessee has raised the following grounds of appeal:

The Ld. CIT(A) further failed to appreciate that the huge loss incurred was due to high rate of depreciation allowed on Gas Cylinders @60% which was the reason attributable for incurring huge loss and the observation and allegations made in para 5 of the order is contrary to the facts of the case and neither any disallowance out of expenses is made nor proved otherwise and hence, the addition confirmed of Rs.22,97,500/- u/s.68 of the Act is unjustified and liable to be deleted.

Brief facts of the case are that the assessee is engaged in the business of trading in Industrial Gases, filed her return of income for Assessment Year 2013-14 on 29.09.2013 declaring loss of Rs. 24,69,262/-. The return of income was selected for scrutiny. During the assessment, the Assessing Officer noted that the assessee has received unsecured loan from her family members aggregating to Rs. 22,98,000/-. The assessee was asked to furnish the loan confirmation, income tax returns (ITR’s), computation sheet and bank statement of creditors. The assessee furnished the requisite details. The assessee has shown the loan from his son namely Satyen Jethra of Rs. 3,56,000/-, Rajkumar Jethra (Husband) of Rs. 5,76,000/-, Satyen Jethra (HUF of son) Rs. 7,50,000/- and Sonam S. Jethra (daughter-in-law) of Rs. 6,15,000/-. On perusal of requisite details, the Assessing Officer took his view that cash deposit were made in the bank account of creditors and loan was given against such cash deposit. The loan creditors has source of income by way of salary, hiring charges, interest of loan from the assessee. In case of Rajkumar Jethra a cash of Rs. 6,00,000/- was deposited and loan of Rs. 5,76,000/- was given. However, as per ITR, annual income of creditor is salary from assessee of Rs. 3,00,000/-, hiring from assessee of Rs. 1,31,000/-. In case of Satyen Jethra, cash of Rs. 3,00,000/- on two occasion were deposited and loan of Rs. 3,56,000/- was given. As per his ITR, the source of his income is salary from assessee of Rs. 3,00,000/- and commission of Rs. 2.06 lakhs. In case of Sonam S. Jethra, cash was deposited of Rs. 7,25,000/- and loan was given for Rs. 6,15,000/-. Bank statement of Satyen Jethra was not produced.

We have heard the submission of ld. Authorized Representative (AR) of the assessee and ld. Departmental Representative (DR) for the revenue and perused the material available on record. The ld. AR of the assessee submits that the assessee has filed copy of confirmation of ledger, ITR acknowledgment, computation of income of all the creditors. In addition, the assessee has also filed the sale proceed of shares of Rajkumar Jethra, his bank statement, bank pass-book and return of income with computation for Assessment Year 2010-11 to 2012-13. The assessee has also filed the bank statement of all the creditors. The ld. AR of the assessee further submits that all loans were received by assessee through cheques from her relatives. The ld. AR of the assessee further submits that due to lack of professional advice, the confirmation of creditor i.e. Satyen Jethra HUF and Sonam Jethra were furnished before the lower authorities.

The ld. AR of the assessee submits that he has filed the confirmation of both the creditors and prayed that these evidences may be admitted as additional evidence. The ld. AR of the assessee has also filed the affidavit of assessee. The ld. AR of the assessee prayed that confirmation of lender is filed for the first time before the Tribunal.

We have considered the rival submission of the parties and have gone through the orders of authorities below. We have noted that there is no dispute about the identity of creditors. The dispute is about the capacity of the creditor to lend the money to the assessee. Before us, the assessee has filed confirmation of account of Satyen Jethra HUF and Sonam S. Jethra about the confirmation of loan. The assessee has also prayed for admission of additional evidence. In support of contention of ld. AR of the assessee has filed affidavit of assessee. In the affidavit, the assessee has stated that she has availed loan through cheques from her relatives. Due to lack of professional advice, the confirmation of the loan was filed before the lower authorities.

We have noted that the identity of parties is not in dispute. The dispute before us is only with regard to the capacity/creditworthiness of the lender. The assessee before us has filed confirmation of accounts of Satyen Jethra HUF and Sonam S. Jethra. The ld. AR of the assessee furnished the cash flow of the lenders, these documentary evidences if filed for the first time before the Tribunal.

Considering the fact that all the evidences relied by ld. AR of the assessee is filed for the first time before the Tribunal. And the evidences has relevancy with the issues raised by the assessee, therefore, we admit the additional evidence furnished by the assessee.

In the result, appeal filed by assessee is allowed for statistical purpose.