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Income Tax Appellate Tribunal, SURAT BENCH, SURAT
Before: SHRI PAWAN SINGH, JM &DR. A.L.SAINI, AM
IN THE INCOME TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT BEFORE SHRI PAWAN SINGH, JM &DR. A.L.SAINI, AM आयकरअपीलसं./ITA No.28/SRT/2021 (िनधा�रणवष� / Assessment Year: (2013-14) (Virtual Court Hearing) Shri Sandeep Ishwarlal Patel Income Tax Officer, Ward-3(3)(4), No.3 Ugamnagar Society, Aaykar Bhavan, Majura Gate, Vs. Hirakal Ni Wadi, L.H. Road, Surat-395002 Surat-395006 �थायीलेखासं./जीआइआरसं./PAN/GIR No.: ADLPP 8509 M (Assessee ) (Respondent)
Assessee by : Shri Sapnesh R Sheth, C.A Respondent by : Ms. Anupama Singla, Sr-DR
सुनवाईकीतारीख/ Date of Hearing : 02/03/2022 घोषणाकीतारीख/Date of Pronouncement : 25/05/2022 आदेश / O R D E R PER DR. A. L. SAINI, ACCOUNTANT MEMBER: Captioned appeal filed by the assessee, pertaining to assessment year 2013- 14, is directed against the order passed by the Learned Commissioner of Income Tax(Appeals)-3, Surat [‘CIT(A)’ for short] dated 10.06.2019, which in turn arises out of an assessment order passed by the Assessing Officer (‘AO' for short) under section 143(3) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) vide order dated, 07.03.2016.
The Grounds of appeal raised by the assessee are as follows: 1.On the facts and circumstances of the case as well as law on the subject, the learned Commissioner of Income Tax (Appeals) has erred in confirming the action of assessing officer in making addition of Rs.20,00,000/- as unexplained cash credit u/s 68 of the Act. 2.It is therefore prayed that above addition made by assessing officer and confirmed by Commissioner of Income-tax (Appeals) may please be deleted.
The appeal filed by the assessee for Assessment Year 2013-14, is barred by limitation by 605 days. The assessee has moved a petition requesting the Bench to
ITA No.28/SRT/2021 A.Y.13-14 Sh. Sandeep I. Patel condone the delay. In the petition for condonation of delay the assessee stated that ld. CIT(A)-3, Surat passed appellate order on 10.06.2019. However, appellate order was not received by the assessee and the same was came to assessee`s knowledge from the online portal of the Department. As the appellate order was not received by assessee, therefore the assessee downloaded from the income tax portal. That is why, there was delay in filing the appeal and this delay has occurred due to reasons beyond assessee`s control. The ld Counsel also submitted that soon after getting the order of ld CIT(A), the COVID-19 pandemic started therefore the period of limitation was waived by the Hon`ble Supreme Court. For that ld Counsel placed reliance on the judgment of the Hon`ble Supreme Court, vide suo moto writ petition (Civil) No.3 of 2020 wherein it is provided that in computing the period of limitation for any suit appeal etc. the period from 15.03.2020 till 14.03.2021 shall stand excluded and the balance period of limitation remaining as on 15.03.2021, if any, shall become available. w.e.f. 15.03.2021. Therefore, ld Counsel prays the Bench that delay should be condoned.
On the other hand, Ld. Sr.Departmental Representative (Sr.DR) for the Revenue opposed the plea taken by Ld. Counsel and stated that delay in filing appeal should not be condoned.
We heard both the parties on this preliminary issue. We find merit in the submission of the ld Counsel, as he has shown “sufficient cause” for the purpose of condonation of delay. The ld Counsel also relied on the judgment of Hon`ble Supreme Court, vide suo moto writ petition (Civil) No.3 of 2020 wherein it was held that in computing the period of limitation for any suit appeal etc, the period from 15.03.2020 till 14.03.2021 shall be excluded. Therefore, we note that assessee has satisfactory explained the cause of delay. Having regard to the reasons given in the petition, we condone the delay and admit the appeal for hearing.
Brief facts qua the issue are that assessee is an individual and filed his return of income on 19.03.2014, declaring total income at Rs.2,29,850./-. Thereafter, assessee`s case was selected for scrutiny and assessing officer framed Page | 2
ITA No.28/SRT/2021 A.Y.13-14 Sh. Sandeep I. Patel assessment order under section 143(3) of the Act dated 07.03.2016. During the assessment proceedings, the assessing officer observed that assessee has purchased immovable properties for which he had taken unsecured loan from Shri Shailesh B. Satyasia of Rs. 20,00,000/- but had only filed confirmation of depositor but did not file any document to prove the identity and creditworthiness of the lender. Therefore, assessing officer issued a show cause notice to the assessee on 16.02.2016 asking the assessee to explain the transaction. In response, the assessee submitted written submissions before the assessing officer on 22.02.2016 and explained the transaction. The assessee also submitted Loan confirmation, copy of bank statement, and acknowledgment of return of income. However, assessing officer has rejected the contention of the assessee and held that assessee has failed to prove identity, creditworthiness and genuineness of the transaction and therefore made addition of Rs. 20,00,000/- as unexplained cash credit u/s. 68 of the Act.
On appeal, ld CIT(A) confirmed the action of the assessing officer. Aggrieved, the assessee is in further appeal before us.
Shri Sapnesh R Sheth, Learned Counsel for the assessee, pleads that assessee had filed confirmation of account of the lender, bank statement, a return of income and also filed the affidavit confirming the transaction. It was also contended that the assessing officer had issued notice u/s 133(6) of the Act and the lender had responded and filed response before the assessing officer to confirm the transaction. The assessing officer has not considered the PAN, return of income, bank statements. The assessee has discharged his owns to prove the genuineness, identity and creditworthiness of the transactions, therefore addition made by the assessing officer may be deleted. 11. On the other hand, the Ld. DR for the Revenue has primarily reiterated the stand taken by the Assessing Officer, which we have already noted in our earlier para and is not being repeated for the sake of brevity.
ITA No.28/SRT/2021 A.Y.13-14 Sh. Sandeep I. Patel 12. We have heard both the parties and carefully gone through the submission put forth on behalf of the assessee along with the documents furnished and the case laws relied upon, and perused the fact of the case including the findings of the ld CIT(A) and other materials brought on record. Before us, Shri Sapnesh R Sheth, Ld. Counsel for the assessee, in order to prove the three ingredients of Section 68 of the Act namely, identity, creditworthiness and genuineness of the transaction, has filed confirmation of accounts which is placed at paper book page 2. He has filed bank statement which is placed at page no. 15 of paper book. He has also filed return of income which is placed at paper book page no. 16. We note that when assessee has filed confirmation of account of the Lender, PAN number, bank statement, return of income and also filed the affidavit confirming the transaction, then Assessing Officer should enquire from the Assessing Officer of the creditor (Lender) as to the genuineness of the transaction and whether such transaction has been accepted by the Assessing Officer of the creditor but instead of adopting such course, the Assessing Officer himself could not enter into the return of the creditor and brand the same as unworthy of credence. For this reliance can be placed on the judgment of Hon`ble Kolkata High Court in the case of Commissioner of Income Tax, Kolkata-III vs. M/s. Dataware Private Limited in GA No.2856 of 2011 wherein it was held as under: “….the Assessing Officer of the assessee cannot take the burden of assessing the profit and loss account of the creditor when admittedly the creditor himself is an income tax assessee. After getting the PAN number and getting the information that the creditor is assessed under the Act, the Assessing Officer should enquire from the Assessing Officer of the creditor as to the genuineness of the transaction and whether such transaction has been accepted by the Assessing Officer of the creditor but instead of adopting such course, the Assessing Officer himself could not enter into the return of the creditor and brand the same as unworthy of credence.” 13. Thus, all above documents that is, the PAN details, bank account statements, Confirmations of Lender, and affidavit by Lender etc. were placed on AO's record. We note that it is necessary for an assessee to prove prima facie the transaction which results in a cash credit in his books of account. Such proof would include proof of identity of the creditor, capacity of such creditor to advance the money and lastly, genuineness of the transaction. Thus, in order to
ITA No.28/SRT/2021 A.Y.13-14 Sh. Sandeep I. Patel establish receipt of credit in cash, as per requirement of section 68, the assessee has to explain or satisfy three conditions, namely : (i) identity of the creditor; (ii) genuineness of the transaction; and (iii) credit-worthiness of the creditor. We note that in the instant case, there is no dispute as to the identity of the creditor. There is also no dispute about the genuineness of the transaction. That apart, the creditor (Lender) has explained as to how the credit was given to the assessee. Thus, assessee had discharged the onus which was on him as per the requirement of section 68 of the Act. Therefore, we delete the addition of Rs.20,00,000/-.
In the result, appeal of the assessee is allowed.
Order pronounced on 25/05/2022 by placing the result on the notice board.
Sd/- Sd/- (PAWAN SINGH) (Dr. A.L. SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER Surat/िदनांक/ Date: 25/05/2022 Dkp Outsourcing Sr.P.S. Copy of the Order forwarded to 1. The Assessee 2. The Respondent 3. The CIT(A) 4. Pr.CIT 5. DR/AR, ITAT, Surat 6. Guard File By Order // True Copy // Assistant Registrar/Sr. PS/PS ITAT, Surat