Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, “E” BENCH, MUMBAI
Before: SHRI B.R.BASKARAN, AM & SHRI AMARJIT SINGH, JM
आदेश / O R D E R
PER AMARJIT SINGH, JM:
This order shall disposed of the above mentioned appeals filed by the assessee as well as by the revenue against the order dated 21.08.2013 passed by the Commissioner of Income Tax (Appeals) 20, Mumbai [hereinafter referred to as the “CIT(A)”] relevant to the A.Y.2010-11. These appeals are being taken up together as the order is the same and the parties are also the same which can conveniently adjudicated by a single order.
The revenue has raised the following grounds of appeal:-
“1. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) was right in deleting the addition of Rs.15,00,000/- made by the Assessing Officer u/s.68 of the Income Tax Act.
2. Whether on facts and circumstances of the case and in law, the Ld. CIT(A) was justified in holding that the assessee has proved the credit-worthiness of Subodh R. Nemlekar HUF, without appreciating that Subodh Nemlekar HUF does not have enough source to advance Rs.15,00,000/- to the assessee? 3. The assessee has raised the following grounds of appeal:-
“1. The Ld. Commissioner of Income Tax (Appeals) [hereinafter referred to as “CIT (A)”] erred in confirming the following additions and disallowances made by the Ld. Assessing Officer without appreciating the facts and circumstances of the case: Sr. Particulars Amount No. (Rs.)
&6453/M/13 A.Y. 2010-11
A Addition under Section 68 on 5,00,000/- account of Unsecured Loan taken treated as unexplained cash credit
A. Addition under Section 68 on account of Unsecured Loan taken treated as unexplained cash credit – Rs.5,00,000/-
2. The Ld. CIT(A) erred in confirming the Addition made by the Ld. Assessing Officer on account of Unsecured Loan taken treated as unexplained cash credit amounting to Rs.5,00,000/- without appreciating the fact and circumstances of the case. The Addition of Rs.5,00,000/- invoking the provisions of section 68 is not at all justified and the same may be deleted.
C. Interest under section 234B & 234C not leviable: 3. The appellant denies any liability to pay interest u/s.234B and 234C. Hence the same is not leviable.
The brief facts of the case are that the assessee filed his return of income on 29.03.2011 declaring total income to the tune of Rs.18,00,640/-. The case was selected for scrutiny, therefore, notice u/s. 143(2) of the Income Tax Act, 1961 ( in short “the Act”) dated 26.08.2011 was issued and served upon the assessee. Thereafter, a notice u/s.142(1) of the Act was issued and served upon the assessee. The assessee has taken the unsecured loan to the tune of Rs.20,00,000/- from different parties. The genuineness and creditworthiness of the said loan was not proved, therefore, the loan to the tune of Rs.20,00,000/- were added to the income of the assessee &6453/M/13 A.Y. 2010-11 u/s.68 of the Act. The assessee filed an appeal before the CIT(A) and the CIT(A) deleted the addition to the tune of Rs.15,00,000/-, therefore, the revenue has filed the present appeal before us.
However, in cross appeal the assessee filed an appeal with regard to the deletion of Rs.5,00,000/- which has been added by the Assessing Officer u/s.68 of the Act and confirmed by the CIT(A)
The foundation of the Assessing Officer in connection with the addition of Rs.20,00,000/- is that the Assessing Officer verified the bank statement of Shri Arvind Gandhi whose account was credited with an amount of Rs.2,00,000/- by cheque on 10.06.2009 and Shri Arvind Gandhi issued the cheque of Rs.2,00,000/- in favour of assessee on 12.06.2009. Accordingly, an amount of Rs.1,00,000/- was deposited in the account of Shri Dilip Gandhi on 11.06.2009 and Shri Dilip Gandhi issued the cheque of Rs.1,00,000/- in favour of the assessee on 12.06.2009. In the bank statement of Shri Hiren Gandhi, it came into notice that an amount of Rs.2,00,000/- was deposited in cash on 10.06.2009 who issued the cheque of Rs.2,00,000/- on 12.06.2009 in favour of the assessee. In the bank statement of H.U.F, it is seen that cheque of Rs.15,00,000/- deposited on 30.11.2009 and transfered to the assessee’s bank account on the same day. However, the opportunity was given to the assessee but finding no justifiable explanation the Assessing Officer did not find the said creditors as genuine and creditworthiness, therefore, an amount of Rs.20,00,000/- &6453/M/13 A.Y. 2010-11 was added to the income of the assessee. Thereafter the assessee challenged the order of Assessing Officer and before the CIT(A) and the CIT(A) deleted the addition to the tune of Rs.15,00,000/- made u/s.68 of the Act. The finding of the CIT(A) is necessary to advert on record before proceeding further :-
“3.6 I have considered the finding of the Assessing Officer and rival submission of the appellant and evidences on record, carefully. I find that Ld. Assessing Officer has wrongly made addition of Rs.15,00,000/- appearing in the name of Subodh Nemlekar, HUF. It is wrong on the part of the Assessing Officer to mention in Para 6.1 that HUF failed to furnish various information whereas fact is altogether different. Appellant has furnished the copy of return of income, balance sheet and bank statement for AYrs 2003-04 and 2004-05. Further, it is seen that Ld. Assessing Officer has not properly appreciated the facts of the case as HUF has given loan to one Shri Bhushan Nemlekar in A.Y.2003-04 and 2004-05 of Rs.15,00,000/- which were reflected in balance sheet. The bank statement reveals the entry on various dates. Mr. Bhushan Nemlekar has repaid Rs.15,00,000/- to the HUF on 13.11.2009 and the same amount has been transferred by account payee cheque from the HUF A/c. to Shri Subodh Nemlekar on the same day. Hence, the source of credit is the loan which were &6453/M/13 A.Y. 2010-11 given by the HUF to one Mr.Bhushan Nemlekar. Immediately after receipt of the same amount it has been advanced to the appellant, hence it cannot be presumed that creditworthiness is not proved. If any doubt was there regarding source of Rs.15,00,000/- shown in the name of Bhushan Nemlekar, it was the responsibility of the Assessing Officer to go further deep and see whether loan was actually advanced by the HUF earlier or not. Assessing Officer has noticed this fact in sub-para ‘e’ of Para 6.1 but has merely discarded the explanation of the appellant on the ground that HUF is not having taxable income. Apparently the finding of the Assessing Officer is unsustainable because such Rs.15,00,000/- is not income of subsequent period but out of old fund available with the HUF. Therefore, I find no substance in the finding of the Assessing Officer. Assessing Officer is therefore directed to delete Rs.15,00,000/- u/s.68 as this credit is found to be explained one.”
6.1 However, with regard to the addition of Rs.5,00,000/- in view of the section 68 of the Act the CIT(A) has given the following findings:-
“3.7 As regards, credit in the name of Shri Arvind Gandhi, the finding of the Assessing Officer is found correct because of the fact that he never met the appellant not did he know him. If a person did not know to anybody, how can he given loan to such &6453/M/13 A.Y. 2010-11 person. It is seen from the bank account of Abhudoya Cooperative Bank Ltd. that on 10.06.2009, Arvind Gandhi has deposited Rs.2,00,000/- and thereafter on 12.06.2009 has given Rs.2,00,000/- to the appellant without explaining actual source of income. Assessing Officer has rightly pointed out that source of income is very negligible, hence Arvind Gandhi could not lent such money to the appellant. It appears that cash has been given and cheque has been obtained in the name of Arvind Gandhi, hence the finding of the Assessing Officer is worth sustainable. Similarly, loan shown in the name of Dilip Gandhi is also not believable because as per his statement he was not fully knowing appellant and he met only in the office of his income tax practitioner Bharat Patelia and he could not recognize his face. He has issued cheque on the direction of Bharat Patelia which means this is an arrange entry and definitely cash might have been given and cheque might have been obtained. It can be seen from bank account in Dena Bank that on 11.06.2009 cash of Rs.1,00,000/- has been deposited and next day on 12.06.2009 cheque of Rs.1,00,000/- has been given to the appellant which corroborate the finding of the Assessing Officer that cash has been obtained by the creditors and cheque has been issued. Similar is the fact in respect of Hiren Gandhi. It can be seen from bank account No.200542136 of bank of Maharashtra that an amount of Rs.2,00,000/- has &6453/M/13 A.Y. 2010-11 been deposited on 10.06.2009 by cash and thereafter a cheque has been issued on 12.06.2009 to the appellant. The bank account reveals the fact that when bank account was reopened Hiren Gandhi was minor and account was opened in joint name with C. D. Gandhi. Obviously, the finding of the Assessing Officer is worth approval that after giving cash, such cheques has been obtained by the appellant. Further, the finding of the Assessing Officer get supports from the fact that none of these three creditors has charged any interest on such loan and further they do not having any acquaintance. All these three creditors have stated that they do not know appellant or Nemlekar family, hence it is very apparent from the record that appellant has arranged a loan by giving cash to such parties. Therefore, finding of the Assessing Officer in respect of loan appearing in the name of Arvind Gandhi, Dilip Gandhi and Hiren Gandhi is sustained and thus an amount of Rs.5,00,000/- is confirmed and addition in respect of loan appearing in the name of HUF of Rs.15,00,000/- is found to be from known source, hence deleted.”
On appraisal of the above mentioned findings we are of the view that the CIT(A) has rightly deleted the addition of Rs.15,00,000/- on the basis of this fact that the HUF has given loan to one Shri Bhushan Nemlekar in A.Y.2003-04 and 2004-05 of &6453/M/13 A.Y. 2010-11 Rs.15,00,000/- which were reflected in balance sheet. The bank statement also speaks about the entry on various dates. Mr. Bhushan Nemlekar has repaid Rs.15,00,000/- to the HUF on 13.11.2009 and the same amount has been transferred by account payee cheque from the HUF A/c. to Shri Subodh Nemlekar on the same day. Therefore, the source of credit is the loan which were given by the HUF to one Mr.Bhushan Nemlekar. Immediately after receipt of the same amount, the amount was transferred in the accounts of the assessee. The creditworthiness and genuineness of the loan has duly been proved on record. Therefore, in the said circumstances the CIT(A) has rightly deleted the addition of Rs.15,00,000/- u/s.68 of the Act. So far as the question of deletion of remaining amount i.e. Rs.5,00,000/- added u/s.68 of the Act is concerned. There is no explanation on behalf of the assessee. The fact remains the same as stated by the Assessing Officer in his order. Even before the CIT(A) there is no proper explanation in connection with the receipt of the loan to the tune of Rs.5,00,000/- from different creditors. No distinguishable materials have been put before us which may affect the finding of the CIT(A) on record. The bank statement of Shri Arvind Gandhi speaks that an amount of Rs.2,00,000/- was credited in the bank account of Shri Arvind Gandhi by cheque on 10.06.2009 and Shri Arvind Gandhi issued the cheque of Rs.2,00,000/- in favour of assessee on 12.06.2009. The bank statement of Shri Dilip Gandhi speaks about deposit of Rs.1,00,000/- on 11.06.2009 and Shri Dilip &6453/M/13 A.Y. 2010-11 Gandhi issued the cheque of Rs.1,00,000/- in favour of the assessee on 12.06.2009. The bank statement of Shri Hiren Gandhi also speaks about deposit of an amount of Rs.2,00,000/- in cash on 10.06.2009 who issued the cheque of Rs.2,00,000/- on 12.06.2009 in favour of the assessee. There is no change of circumstances. There is no proper explanation in this regard as to why the cash was deposited in the account of payee just one or two days before the transaction. Considering each and every facts on record we are of the view that the CIT(A) has passed the order in question judiciously and correctly which does not required to be interfere with at this appellate stage.
In the result, both the appeals filed by the revenue as well as 8. assessee are hereby dismissed.