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Income Tax Appellate Tribunal, ‘SMC’ BENCH PUNE
Before: HON’BLE SHRI G. D. PADMAHSHALI & SHRI VINAY BHAMORE
IN THE INCOME TAX APPELLATE TRIBUNAL, ‘SMC’ BENCH PUNE BEFORE HON’BLE SHRI G. D. PADMAHSHALI, ACCOUNTANT MEMBER AND SHRI VINAY BHAMORE, JUDICIAL MEMBER ITA No. 780 & 775 /PUN/2024 Assessment Year : 2015-16 & 2016-17 Gopalrao Shankarrao Nagras, S.No.162, B-1, Flat No.302, Nagras Estate Aundhgao, Pune – 411 007. PAN: AAIPN0954C . . . . . . . Appellant V/s The Income Tax Officer, Ward-2(1), Pune. . . . . . . . Respondent Appearances Assessee by : Ms Deepa Khare [‘Ld. AR’] Revenue by : Mr Umesh Phade [‘Ld. DR’] Date of conclusive Hearing : 01/08/2024 Date of Pronouncement : 05/08/2024 ORDER PER G. D. PADMAHSHALI, AM; These twin appeals instituted u/s 253(1)(a) of the Act by the assessee are assailed against separate orders passed u/s 250 of the Income-tax Act, 1961 [‘the Act’ hereinafter] by the National Faceless Appeal Centre [‘NFAC’ hereinafter] which in turn arisen out of separate order of assessment passed u/s 144 r.w.s. 147 of the Act by the Income Tax Officer, Ward-2(1), Pune [‘AO’ hereinafter] for assessment year 2015-16 and 2016-17 [‘AYs’ hereinafter]; 2. Since facts & substantive issue involved in both these appeals being identical & common, at the request of rival parties, these are taken up together for the sake of brevity and for a common & consolidated order.
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Gopalrao Shankarrao Nagras Vs ITO ITA No. 780 & 775/PUN/2024 AY: 2015-16 & 2016-17 3. Tersely stated common facts arising out of the case records are that; 2.1 Upon the receipt of information from ITO (Inv) vide letter dt. 11/12/201 that the assessee has repaid portion of loan taken by him from ‘Yogiraj Nagari Sahakari Pathsanstha’ [‘YNSP’ hereinafter] in cash, the case of the assessee for AY 2015-16 & 2016-17 were re-opened and in the event of effective failure to prove nature & source of cash repayment of ₹1.438Lakhs and ₹1.20Lakhs, the same were bought to tax as unexplained money u/s 69A of the Act in the hands of assessee vide assessment orders framed u/s 144 r.w.s. 147 of the Act.
2.2 The aforestated additions were unsuccessfully contested in an appeal before first appellate authority. Consequently, the assessee came before us in present twin appeals alleging the actions of tax authorities below on two effective grounds as; ‘1. On facts and circumstances prevailing in the case and as per provision and scheme of the Act it be held that the reopening of assessment under section 147 is not in accordance with the framework of the provisions of the Act and bad in law. The appellant be granted just and proper relief in this respect.
Without prejudice to 1st and as per provision and scheme of the Act it be held that the addition of Rs. 143,800/- and Rs. 1,20,000/- on account of addition u/s 69A is not in accordance with the provisions of the Act. The addition so made to be deleted.’ 4. Heard rival submission and subject to the provisions of rule 18 of Income Tax Appellate Tribunal Rules, 1963 [for short ‘ITAT, Rules’] perused the material placed on records and considered the facts of the case/s in the light of settled position of law which are forewarned to the rival parties. We note that, the assessee filed his return of income for AY 2015-16 on 05/07/2016 & for AY 2016-17 18/11/2016 declaring total income of ₹8,10,960/- & ₹9,41,300/- respectively. For the purpose of construction the assessee availed a loan from YNSP & upon disbursement the sum was transferred to his bank
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Gopalrao Shankarrao Nagras Vs ITO ITA No. 780 & 775/PUN/2024 AY: 2015-16 & 2016-17 account maintained with ‘Saraswat Co-Op. Bank’ [‘SCB’ hereinafter], wherefrom he withdrew a cash of ₹23.75Lakhs for the purpose. The balance of cash withdrawal intermittently or finally left over after meeting his construction needs were deposited with YNSP towards repayment of loan. Upon the information of such cash repayment the Ld. AO re-opened the assessment to verify nature & source thereof, in the absence of any reply, evidence & in the event of non-cooperation from the assessee, the Ld. AO came to conclude that, cash withdrawal made out of loan availed from YNSP were meant from constructions & since it were fully utilized therefor, the assessee had no balance to repay the loan to YNSP in cash. Since the assessee failed to establish/explain the nature & source of cash available with him for repayment, the entire amount of such repayment were added as an unexplained money u/s 69A of the Act in the respective AYs while framing best judgement assessments u/s 144 r.w.s. 147 of the Act. Since the assessee was indifferent in the first appellate proceedings, hence the outcome therefrom.
A piece of information that there were cash repayments of loan by the assessee was came newly on records from Ld. ITO (Inv) and consequently to the knowledge of the Ld. AO, who with an intent to proceed therewith called upon the assessee preliminary to explain cementingly that such cash repayments were out of sources disclosed in his returns of income. In the event of assessee’s failure, after recording the reasons and obtaining prior approval the assessments were re-opened. During the course of proceedings before the tax authorities below the assessee could neither prove that the information of cash repayments were incorrect/wrong nor that facts came to the knowledge of the Ld. AO was not new, hence mere challenge of the assessee is bald and without any merit. Once the assessee fails to establish on record that, the information is not newly came on record or to the knowledge of Ld. AO, or the information is incorrect or else the transactions sought to trigger re-opening have duly considered in the returns
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Gopalrao Shankarrao Nagras Vs ITO ITA No. 780 & 775/PUN/2024 AY: 2015-16 & 2016-17 of income previously filed by him, then reopening on the basis of prima facie material cannot be faulted with as it passes through the test of section 147 of the Act. This finds support from the decision of Hon’ble Apex Court in ‘Raymond Woollen Mills Ltd. Vs ITO’ [1999, 236 ITR 34 (SC)]. Respectfully following the same, we do not see any cogent reasons in not upholding the re-opening of assessment and in not dismissing the legal ground raised thereagainst. This answers the first ground of the present appeal.
Insofar as the meritorious ground is concerned, we note that, besides making bald statements in the impugned orders the Revenue could hardly place any material on record to dismantle the appellant’s plea that; ‘the cash repayment of loan were exclusively out of excess of cash withdrawal’ nor it could able to demonstrate concretely with cogent evidence that the entire cash withdrawal were fully utilized for construction activities, thus leaving no cash balance with assessee for repayments. The addition in these cases in our considered view were merely based upon the conjectures & guesswork, hence good reasons for reversing the actions of both the tax authorities in view of the decision of Hon’ble Apex Court rendered in ‘Umacharan Shaw Bros. Vs CIT’ [1959, 37 ITR 271 (SC)]. Respectfully following the same & without multiplying the authority on the issue of we set-aside the impugned orders and delete the additions.
In the result these appeals of the assessee stands ALLOWED. In terms of rule 34 of ITAT Rules, the order pronounced in the open court on this Monday, 05th August, 2024.
-S/d- -S/d- VINAY BHAMORE G. D. PADMAHSHALI JUDICIAL MEMBER ACCOUNTANT MEMBER पुणे / PUNE ; दिन ांक / Dated : 05th August, 2024. आदेश की प्रतितिति अग्रेतिि / Copy of the Order forwarded to : 1.अपील र्थी / The Appellant. 2. प्रत्यर्थी / The Respondent. 3. The Pr. CIT Concerned. 4. The CIT(A)/NFAC Concerned. 5. DR, ITAT, ‘SMC’ Bench, Pune 6. ग र्डफ़ इल / Guard File. आिेश नुस र / By Order वररष्ठ दनजी सदिव / Sr. Private Secretary आयकर अपीलीय न्य य दिकरण, पुणे / ITAT, Pune.
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