Balkrishna P.Patel, Ahmedabad vs Department Of Income Tax

The ACIT, Circle-11, Ahmedabad Appellant

Vs.

Shri Balkrishna P. Patel S - 56/57, Badami Coal Compound, Nehru Bridge Corner, Ashram Road, Ahmedabad Respondent

PAN: AAXPP3082C

अपीलाथ क ओर से /By Appellant : Shri Roopchand, Sr. D.R. ू यथ क ओर से/By Respondent : None सुनवाई क तार!ख/Date of Hearing : 16.02.2015 घोषणा क तार!ख/Date of Pronouncement : 19.02.2015 ITA No. 2012/Ahd/11 A.Y. 07-08 [ACIT vs. Shri Balkrishna P. Pate l] Page 2

ORDER

PER SHAILENDRA KUMAR YADAV, J.M:

This appeal has been filed by the Revenue against the order of Commissioner of Income Tax (Appeals)-XVI, Ahmedabad, dated June 09, 2011 for A.Y. 2007-08 on the following grounds:

"(1) The Ld. CIT(A) erred in law and on facts in restricting addition to the extent of Rs. 1,47,000/- out of total addition of Rs. 13,48,920/-made by the AO. on account of unexplained cash credit u/s.68 of the I.T. Act without properly appreciating the facts of the case and the materials brought on record by the AO.

(1.2) The Ld. CIT(A)-XVl, Ahmedabad has erred in law and on facts in accepting the contention of the assessee that it is not the duty of the assessee to prove and establish the source of the source. If is not the burden of the assessee to the genuineness of the transactions between his creditor and sub-creditors nor is it the burden of the assessee to prove that the sub-creditor had the creditworthiness to advance the cash credit to the creditor from whom the cash credit has been, eventually, received by the assessee."

2. Assessing Officer made certain additions to the income of assessee at Rs.13,48,920/- u/s.68 of the Act on account of unexplained cash credit. In appeal, matter was carried before the CIT(A), wherein various contentions were raised on behalf of assessee and having considered the same, CIT(A) has granted relief to the assessee. Same has been opposed on behalf of Revenue. None appeared on behalf of assessee.

ITA No. 2012/Ahd/11 A.Y. 07-08 [ACIT vs. Shri Balkrishna P. Pate l] Page 3

However, assessee has moved application for adjournment, not finding any substance in the adjournment application, same is rejected and matter is being decided ex parte on the basis of submission of learned Departmental Representative and materials on record.

3. After going through rival submissions and material on record, we find that CIT(A) granted partial relief after calling remand report. As per facts of the case, assessee had introduced cash credits of Rs. 13,48,920/- from twelve persons as listed on page-2 of the assessment order for the sake of convenience, same is reproduced as under:

Sr. Name Amount Date Mode of Source of No. (Rs.) Payment Income 1 Jagdish Natwarbhai 1.00,000 18-08-2008 Cheque -- 2,00,000 25-09-2008 Cheque 2 Rasikbhai H. Bhavsar 1,02,040 02-03- Cheque Travel 2007 agency 3 Kinjalben R. Bhavsar 1,03,880 26-03- Cheque Travel 2007 agency 4 Parbhatbhai 4,00,000 08-02- Draft Agriculture Dhirubhai 2007 906582 to 86 906591 to 95 5 Bhagvanbhai 50,000 15-12-2006 Draft No. Agriculture Keshavbhai 480571 6 Gordhanbhai 49,000 15-12-2006 Draft No. Agriculture Muljibhai 480572 7 Govindbhai Kalabhai 49,000 15-12-2006 Draft Agriculture No.480573 8 Kalubhai Nanubhai 49,000 15-12-2006 Draft No. Agriculture 480574 9 Jadayjibhai 49,000 16-01-2007 Draft No. Agriculture Narsinhabhai 48 1824 10 Himmatbhai 49,000 16-01-2007 Draft Agriculture Nanubhai No. 48 1825 ITA No. 2012/Ahd/11 A.Y. 07-08 [ACIT vs. Shri Balkrishna P. Pate l] Page 4

11 Raghavjibhai 49,000 16-01-2007 Draft Agriculture Narsinhabhai No.481826 12 Kanubhai Bhimjibhai 49,000 16-01-2007 Draft No. Agriculture 481827 Total: 13,48,920

Out of these twelve persons, nine persons are agriculturists from whom deposits of Rs. 7,93,000/- (Rs. 4,00,000/- from Prabhatbhai Dhirubhai, Rs. 50,000/- from Bhagvanbhai Keshavbhai and Rs. 49,000/- each from Gordhanbhai Muljibhai, Govindbhai Kalabhai, Kalubhai Nanubhai, Jadayjibhai Narsinhabhai, Himmatbhai Nanubhai, Raghavjibhai Narsinhabhai & Kanubhai Bhimjibhai. It is undisputed that deposits were received by way of bank drafts. Shri Rasikbhai H. Bhavsar and. Smt. Kinjal P. Bhavsar are being assessed to tax and from them the deposits of Rs. 1,02,040/- and Rs. 1,03,880/-respectively were received by cheques. Apart from this, deposits of Rs. 3,00,000/- was received by way of cheque from Jagdish Natwarbhai. Thus, deposits received by assessee from above said twelve persons were not accepted as genuine and addition was made by Assessing Officer u/s. 68 of the Act by treating the cash credits as unexplained. Eleven depositors had filed their notarized affidavits before the Assessing Officer and also furnished written replies in response to summons issued to them by Assessing Officer. Copies of the aforesaid affidavits and written replies to the summons were filed with Assessing Officer and again sent to the Assessing Officer while calling for the remand report from the Assessing Officer.

ITA No. 2012/Ahd/11 A.Y. 07-08 [ACIT vs. Shri Balkrishna P. Pate l] Page 5

4. In first Appellate proceeding, according to CIT(A) proper time was not given by Assessing Officer for examination of cash creditors. It is not in dispute that duly sworn and notarized affidavits of the parties apart from the reply and evidences filed directly by the parties in response to summons issued. It shows that the addition is based merely on rejection of the said evidences without independently bringing on record any material to disprove the same. Nonetheless, during the course of remand proceedings, Assessing Officer has issued summons to only 9 parties out of 12 parties in the remand report. Considering the fact that summons were issued by Assessing Officer to 11 out of total 12 parties (no summons have been issued in case of one party i.e. Jagdishbhai even during the course of original assessment proceedings). Assessing Officer has not disputed the genuineness of the deposits received from three persons namely Jagdishbhai, Bhagwanbhai and Himmatbhai aggregating to Rs.3,99,000/- and further considering the fact that the said parties have furnished sufficient evidences in support of the genuineness of the deposits given to assessee including their notarized affidavits, CIT(A) rightly agreed to delete the addition to the extent of Rs.3,99,000/- as unexplained deposits from the aforesaid three persons. Moreover, it is settled position of law the contents of the affidavit cannot be rejected without confronting the contentions of the same deponent.

ITA No. 2012/Ahd/11 A.Y. 07-08 [ACIT vs. Shri Balkrishna P. Pate l] Page 6

4.1 CIT(A) further found that Shri Rasik Bhavsar and Smt. Kinjal Bhavsar from whom deposits aggregating to Rs.2,05,920/- have been received and treated as unexplained by Assessing Officer. These parties furnished the copy of their return of income along with Balance Sheet and Profit & Loss Account. The said parties have also furnished their duly sworn and notarized affidavits. From these, CIT(A) observed that total amount advanced to assessee was also reflected in their Balance Sheet. There was nothing on record to disprove the said fact. Not only that they have confirmed the fact of having advanced money to assessee in statements recorded by Assessing Officer. In this background, CIT(A) rightly observed that primary onus u/s. 68 has been discharged. Accordingly, this addition to the extent of Rs.2,05,920/- was rightly deleted by CIT(A). We uphold the same.

4.2 With regard to deposit of Rs.4,00,000/- received from Parbatbhai Dhirubhai is concerned, CIT(A) observed that the said party was issued summons u/s.131 during course of assessment proceedings. In response to which he has furnished his confirmation by duly sworn affidavit as well as evidences in form of 7/12 & 8A extract in support of source of income. Since the summons issued having been served and identity is established. Further, since money advanced was not being in cash and evidences furnished in support of source of income including notarized affidavit having not been disproved by the Assessing Officer. Merely because the said ITA No. 2012/Ahd/11 A.Y. 07-08 [ACIT vs. Shri Balkrishna P. Pate l] Page 7

party did not turn up in response to summons once again issued during the remand proceedings, assessee could not be punished. Even in case of non-compliance, second summon could have been issued by Assessing Officer, which has not been done. In this background, CIT(A) was justified in deleting the addition of Rs.4,00.000/- received from Parbatbhai Dhirubhai.

4.3 Coming to remaining 6 parties from whom deposits of Rs.49.000/- each were received as discussed above. In this background, CIT(A) observed from their statements recorded by Assessing Officer that in case of Shri Kalubhai Nanubhai Pansena, there appears to be sufficient source of income and hence keeping in view the other evidences furnished by him and categorical re-confirmation of the fact of having given advance to assessee in the statement recorded, CIT(A) rightly observed that addition of Rs.49,000/- in his case was not justified. This reasoned finding of CIT(A) needs no interference from our side. We uphold the same.

4.6 Other 2 parties i.e. Jadavjibhai and Raghavjibhai did not appear in response to the summons issued during remand proceedings. However, in response to earlier summons issued during assessment proceedings they had furnished their confirmation by duly sworn affidavit as well as evidences in form of 7/12 & 8A extract in support of source of income. Since summons issued having been served, the identity stands ITA No. 2012/Ahd/11 A.Y. 07-08 [ACIT vs. Shri Balkrishna P. Pate l] Page 8

established. The amount advanced was not being in cash and evidences furnished in support of source of income including notarized affidavit having not been disproved by Assessing Officer, merely because said parties did not turn up in response to summons once again summons issued during the remand proceedings, assessee cannot be punished as held earlier by CIT(A) and we have approved the same. Accordingly, addition of Rs.49,000/- each in case of these two persons aggregating to Rs,98,000/- was rightly deleted by CIT(A). We uphold the same.

4.7 Thus, in sum and substance out of total addition of Rs. 13,48,920/- made by Assessing Officer, the addition to the extent of Rs.12,01,920/- was deleted by CIT(A). Same is confirmed.

5. As a result, appeal filed by the Revenue is dismissed.

Pronounced in the open Court on this the 19th day of February, 2015.

Sd/- Sd/- (ANIL CHATURVEDI) (SHAILENDRA KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad: Dated 19/02/2015 True Copy S.K.SINHA

आदे श क ूितिल'प अमे'षत / Copy of Order Forwarded to:-

1. राजःव / Revenue

2. आवेदक / Assessee ITA No. 2012/Ahd/11 A.Y. 07-08 [ACIT vs. Shri Balkrishna P. Pate l] Page 9

3. संबंिधत आयकर आयु0 / Concerned CIT

4. आयकर आयु0- अपील / CIT (A)

5. 'वभागीय ूितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad

6. गाड9 फाइल / Guard file.

By order/आदे श से,

उप/सहायक पंजीकार आयकर अपीलीय अिधकरण, अहमदाबाद ।