The Income Tax Officer-Ward-3(4) v. Shri Sharad C.Patel
[Citation -2007-LL-0823-7]

Citation 2007-LL-0823-7
Appellant Name The Income Tax Officer-Ward-3(4)
Respondent Name Shri Sharad C.Patel
Court ITAT-Ahmedabad
Relevant Act Income-tax
Date of Order 23/08/2007
Judgment View Judgment
Keyword Tags unexplained cash credit • proprietary concern • co-operative bank • assessment record • unsecured loan • interest paid
Bot Summary: The Assessing Officer requested the assessee to confirm the unsecured loan of M/s. Global Finance but M/s. Global Finance simply furnish the address but not furnished ITA No.1832/Ahd/2007 A.Y. 2004-05 ITO Wd-3() A bd v. Sh. Sharad C Patel Page 2 the confirmation from the party. Before CIT(A) it was argued by the assessee that the said transaction with M/s. Global Finance having carried on for number of years and loan from M/s. Global Finance has been raised in previous years and as on 01-04-2003, the opening balance of M/s. Global Finance was Rs.1,28,65,081/-. On going through the past assessment records, it is seen that the appellant was having transactions with M/s. Global Finance as under:- Period Opening Closing Interest paid Balance Balance 1.4.2000 to 22948994 23613457 1789157 31.3.2002(A.Y.2001-02) 1.4.2001 to 31.3.2002 23613457 15092063 1268106 1.4.2002 to 31.3.2003 15092063 12865881 780230 1.4.2003 to 31.3.2004 12865881 12915881 Nil For the A.Y. 2003-04, the assessment was completed u/s.143(3). In course of this proceeding the appellant has filed details of transaction with M/s. Global Finance where opening balance is shown as Rs.1,50,92,063/- and closing balance is shown as Rs.1,28,16,881/-. The CIT(A), as regards to balance Rs.50,000/- paid by M/s. Global Finance to the assessee by cheques No.289394 drawn to Kalupur Commercial Co-Operative bank Ltd. also deleted by stating that the transaction carried out through bank account and the creditor is assessed to tax for a number of years. Before us Ld. Counsel for the assessee, Shri Vartik Chokshi stated that M/s. Global Finance is assessed to tax by the same Assessing Officer as that of the assessee, i.e. Ward-3(4) Ahmedabad. He stated that this loan of Rs.1,28,65,881/- is closing balance as on 31-03-2003, that means the opening balance of 01-04-2003 and he stated that the closing balance of earlier previous year cannot be added u/s.68 of the Act. We find from the order of CIT(A), where he has narrated the facts clearly and the facts are not in disputed that this amount of Rs.1,28,65,881/- pertains to closing balance as on 31-03-2003, that means opening balance as on 01-04-2004.


IN INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH C AHMEDABAD Before Shri N.S.SAINI, ACCOUNTANT MEMBER and Shri MAHAVIR SINGH, JUDICIAL MEMBER ITA No.1832/ Ahd/2007 Assessment Year:2004-05 Date of hearing:22.2.10 Drafted:23.2.10 Income Tax Officer, V/s. Shri Sharad C Patel, W ard-3(4), Ahmedabad Ram Nivas No.1, Khanpur, Ahmedabad PAN No. AAMPP7978E (Appellant) .. (Respondent) Appellant b y :- Shri Shelly Jindal CIT-DR Respondent by:- Shri Vartik Chokshi, AR ORDER PER Mahavir Singh Judicial Member:- This appeal by Revenue is arising out of order of Commissioner of Income-tax (Appeals)-VII, Ahmedabad in appeal No. CIT(A)-VII/ Wd. 3(4) / 192/2006-07 dated 21-02-2007. assessment was framed by Income-tax Officer, Ward-3(4), Ahmedabad u/s.143(3) of Income-tax Act, 1961 (hereinafter referred to as Act ) vide his order dated 28-12-2006 for assessment year 2004-05. 2. only issue in this appeal of Revenue is as regard to order of CIT(A) in deleting addition made by Assessing Officer on account of unexplained cash credit u/s.68 of Act. 3. brief facts leading to above issue are that assessee has declared unsecured loan from M/s. Global Finance at Rs.1,29,15,881/- in balance-sheet. M/s. Global Finance is proprietary concern of Shri Asit N Patel (HUF). Assessing Officer requested assessee to confirm unsecured loan of M/s. Global Finance but M/s. Global Finance simply furnish address but not furnished ITA No.1832/Ahd/2007 A.Y. 2004-05 ITO Wd-3($) bd v. Sh. Sharad C Patel Page 2 confirmation from party. AO deputed Inspector to enquire genuineness of said party and Inspector reported that premises of M/s. Global Finance is closed and drawn report on basis of inquiry made that this office is not functioning since long and accordingly, he was unable to serve letter. assessee again reiterated same address, since assessee could not furnish details of PAN, letter address confirmation, AO added unexplained credits of M/s. Global Finance u/s.68 of Act. Aggrieved, assessee preferred appeal before CIT(A). 4. Before CIT(A) it was argued by assessee that said transaction with M/s. Global Finance having carried on for number of years and loan from M/s. Global Finance has been raised in previous years and as on 01-04-2003, opening balance of M/s. Global Finance was Rs.1,28,65,081/-. Accordingly, it was argued that opening balance of any year cannot be added as unsecured loan which pertains to assessment year 2003-04 and not relevant assessment year 2004- 05. CIT(A) after considering facts of case, deleted addition of Rs.1,28,65,881/- by giving following finding in para-3.2 as under:- 3.2 I have carefully considered arguments of appellant. I have also gone through assessment record of appellant. On going through past assessment records, it is seen that appellant was having transactions with M/s. Global Finance as under:- Period Opening Closing Interest paid Balance Balance (Rs) (Rs) (Rs) (a) 1.4.2000 to 22948994 23613457 1789157 31.3.2002(A.Y.2001-02) (b) 1.4.2001 to 31.3.2002 23613457 15092063 1268106 (A.Y. 2002-03) 1.4.2002 to 31.3.2003 15092063 12865881 780230 (A.Y. 2004-05) (d) 1.4.2003 to 31.3.2004 12865881 12915881 Nil (A.Y.2004-05) For A.Y. 2003-04, assessment was completed u/s.143(3). In course of this proceeding appellant has filed details of transaction with M/s. Global Finance where opening balance is shown as Rs.1,50,92,063/- and closing balance is shown as Rs.1,28,16,881/-. Against this balance transaction during period under consideration is as under:- F.Y. 2003-04 (A.Y. 2004-05) Date Particulars DR CR ITA No.1832/Ahd/2007 A.Y. 2004-05 ITO Wd-3($) bd v. Sh. Sharad C Patel Page 3 Amount Amount (Rs) 1 April By Opening Balance 1,28,65,881.34 22 Jn By KALUPUR COMM.CO.OP.BANK LTD Recpt. Ch. No.289394 BEING AMT. RECEIVED FROM GLOBAL FINANCE (No.1046) _____ 50,000,00 To Closing Balance 1,29,15,881.34 1,29,15,881.34 -------------------- ------------------- 1,29,15,881.34 1,29,15,881.34 ============ =========== From statement of accounts available in assessment record of appellant, it is clear that opening balance as on 1.4.2003 was Rs.1,28,65,881/- hence this cannot be added at all in total income of appellant relating to present assessment order. CIT(A), as regards to balance Rs.50,000/- paid by M/s. Global Finance to assessee by cheques No.289394 drawn to Kalupur Commercial Co-Operative bank Ltd. also deleted by stating that transaction carried out through bank account and creditor is assessed to tax for number of years. Accordingly, credit stands explained. Accordingly, he deleted this addition of Rs.50,000/- also. Aggrieved, Revenue came in appeal before us. 5. Before us Ld. Counsel for assessee, Shri Vartik Chokshi stated that M/s. Global Finance is assessed to tax by same Assessing Officer as that of assessee, i.e. Ward-3(4) Ahmedabad. He stated that this loan of Rs.1,28,65,881/- is closing balance as on 31-03-2003, that means opening balance of 01-04-2003 and he stated that closing balance of earlier previous year cannot be added u/s.68 of Act. He supported order of CIT(A), that he has verified facts as narrated above and this opening & closing balance and interest paid is accumulation as on 31-03-2003 to extent of Rs.1,28,65,881/-. As regards to Rs.50,000/- Ld. Counsel for assessee further stated that transaction is carried out through banking channel and creditor is assessed to tax in same Ward and AO should have verified this fact. On other hand, Ld. CIT- Departmental Representative, ShriShelley Jindal argued that none was present or no such person existed and person is not existence and accordingly, AO has no alternative except to add this sum. He stated that as regards to Rs.50,000/- amount is not at all explained. assessee has neither proved identity of creditor nor creditworthiness or genuineness of transaction. Accordingly, he urged Bench to confirm entire addition in toto. ITA No.1832/Ahd/2007 A.Y. 2004-05 ITO Wd-3($) bd v. Sh. Sharad C Patel Page 4 6. We have heard rival contentions and going through facts and circumstances of case. We find from order of CIT(A), where he has narrated facts clearly and facts are not in disputed that this amount of Rs.1,28,65,881/- pertains to closing balance as on 31-03-2003, that means opening balance as on 01-04-2004. We are of view that this closing balance of earlier year cannot be added in this year. On facts, we uphold findings of CIT(A) as reproduced above as he has narrated entire facts. Accordingly, we uphold order of CIT(A) in respect of that part of addition. 7. Coming to addition of Rs.50,000/-, we find that this credit is received by assessee in this very year, creditworthiness and genuineness vis- -vis this transaction of Rs.50,000/- is not proved. Accordingly, we confirm this addition qua Rs.50,000/-. Accordingly, this issue of Revenue s appeal is partly allowed. 8. In result, Revenue s appeal is partly allowed. Order pronounced in Open Court on 24/02/2010 Sd/- Sd/- (N.S.Saini) (Mahavir Singh) Accountant Member Judicial Member Ahmedabad, Dated : 24/02/2010 *Dkp Copy of Order forwarded to : 1. Appellant. 2. Respondent. 3. CIT(Appeals)-VII, Ahmedabad 4. CIT concerns. 5. DR, ITAT, Ahmedabad 6. Guard File. BY ORDER, /True copy/ Deputy/Asstt.Registrar ITAT, Ahmedabad Income Tax Officer-Ward-3(4) v. Shri Sharad C.Patel
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