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The ITO Ward 1(3),Thane Vs. Bipin Ramji Katira (HUF) Jay Yogeshwar Octroi Services, Shop No.4., Nayan CHS, Eastern Express Highway, Nr. Shreema Balniketan School Thane (E)
December, 01st 2015
                 ,   `',  
                   MUMBAI BENCHES "J", MUMBAI

             Before Shri G S Pannu, AM & Shri Sanjay Garg, JM

                   ITA No.1429/Mum/2010
                    / Assessment Year - 2006-07

The ITO Ward 1(3),                 Bipin Ramji Katira (HUF)
Thane                              Jay Yogeshwar Octroi Services,
                                Vs Shop No.4., Nayan CHS,
                                   Eastern Express Highway,
                                   Nr. Shreema Balniketan School
                                   Thane (E)
                                   PAN AACHK5422L
     ( /Appellant)                         (  /Respondent)

           Appellant By     : Shri Akhilendra P Yadav
           Respondent By    : Shri Subodh Ratanaparkhi

      /                                /
Date of Hearing :05.08.2015.       Date of Pronouncement : 30.11.2015


Per Sanjay Garg, Judicial Member:

     The present appeal filed by the revenue is directed against the order of

the CIT(A)-II, Thane, dated 26.11.2009, for A.Y. 2006-07.

2.    The revenue has raised the following grounds of appeal:

        "1.     The learned CIT(A) has erred in fact and in law in
        deleting the additions made on account of unexplained
        cash deposits.

                                                                ITA 1429/Mum/10
                                                          Bipin Ramji Katira (HUF)

         2. The learned CIT(A) has erred in fact and in law in
         deleting the additions made on account of unproved cash
The revenue through the above grounds has agitated the action of the

CIT(A) in deleting the additions made on account of unexplained cash

deposits and on account of cash credit received by the assessee HUF. So far

as the first issue is concerned, the assessee HUF during the year received

cash deposits from its own members' viz. Shri Bipin Katira and Smt. Geeta

Bipin Katira. The AO had treated the said deposits as unexplained on the

ground that the assessee had not submitted the cash flow statement of the

creditors. The learned CIT(A) has deleted the disallowance made by the AO

observing that the assessee had filed copies of IT return, Profit & Loss

account and Balance sheet of the depositors, who were the members of the

HUF itself. The assessee HUF had purchased a house property. However, it

could not get the loan from the bank on time and because of time constraint,

temporary contributions were made by HUF members.            Both the above

mentioned members have been regularly filing their returns and are being

assessed by the same Assessing Officer. They were having sufficient cash

balance over the period of time as per their balance sheet filed with the

department. All the details were filed before the Assessing Officer by the

assessee. The Assessing Officer could not prove that the said depositors viz.

Shri Bipin Katira and Smt. Geeta Bipin Katira were not having cash balance

                                                                ITA 1429/Mum/10
                                                          Bipin Ramji Katira (HUF)

for the purpose of depositing with the HUF. The CIT(A) after examining all

the facts and circumstances of the case deleted the disallowance made in

this respect. We do not find any infirmity in the order of the CIT(A) in this


3.   The second issue relates to unexplained loan of Rs.15,50,000/- from

Manisha Katira.   The AO has treated the said loan as explained on the

ground that the assessee could not prove the capacity of the creditor and the

genuineness of the loan transaction. The learned CIT(A) however, deleted

the disallowance observing as under:

      "5.2.6     In the case of the appellant, the loan has been
      received from Smt. Manisha Katira, who is a third party. Her
      identity is not in doubt and even the genuineness of the
      transaction is not questioned by the AO. It is the capacity of
      the creditor to advance the money which is doubted by the
      AO. Summons have been recorded whereby she has
      accepted having advanced the money in question. She
      explained the source of the same as she has been doing the
      business of supplying the food items to persons and also
      undertakes stitching work and has been doing this work for
      the last 17 years on cash basis and this proves her capacity.
      Smt. Manisha Katira is a regular assessee. Whatever has
      been stated by the creditor even if not true, cannot be
      questioned without placing on record anything contrary to
      that effect. Statement of the creditor can only be rejected by
      making further investigations in the matter and by placing on
      record the evidence that whatever stated is not true. Till
      such evidence is not placed on record, the capacity of the
      creditor cannot be questioned and no action can be taken in
      the case of the appellant HUF. If the capacity is still in
      doubt, action may be initiated in the case of the creditor by

                                                                   ITA 1429/Mum/10
                                                             Bipin Ramji Katira (HUF)

      resorting to statutory remedies provided in the Income Tax
      Act. The appellant HUF cannot be penalized for acts of
      omission or commission, if any, of the third party creditor."

4.   We have heard the learned representatives and have perused the

material available on record.     We find that the learned CIT(A) after

appreciating the evidences produced by the assessee including the statement

of Smt. Manisha Katira has held that the assessee could not be expected to

do more than it has already done to prove the genuineness of transaction

and creditworthiness of the creditor. We, therefore, do not find any infirmity

in the well-reasoned order of the CIT(A) on this issue also and the same is

accordingly upheld.

5.   In the result the appeal of the Revenue is dismissed.

     Order was pronounced in the open court on 30.11.2015.

                 Sd/-                              Sd/-
             (G S PANNU)                      (SANJAY GARG)
         ACCOUNTANT MEMBER                   JUDICIAL MEMBER

 Mumbai;  Dated : 30 November, 2015.


                                                         ITA 1429/Mum/10
                                                   Bipin Ramji Katira (HUF)

               /Copy of the Order forwarded to :
1.    /The Appellant.
2.     / The Respondent.
3.     () / The CIT(A), Mumbai.
4.      / CIT
5.            ,     ,  / DR, `F' Bench, ITAT, Mumbai

                                            / BY ORDER,
           //True Copy//

                                /  (Dy./Asstt. Registrar)
                                ,   / ITAT, Mumbai
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