M/s Concorde Agro Sprayers Pvt Ltd, Amritsar. V. The Dy. Commissioner of Income-tax, Amritsar.

CO 46/ASR/2014

• Counselvise Citation: [2016] 119 COUNSELVISE.COM (IT) 3376 (ITAT-AMRITSAR)
• Duration Of Justice: 1 year(s) 6 month(s) 5 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 15-06-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 23-05-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 10-12-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A N MISRA
• Keywords: Unexplained cash credit; Tax effect
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR BEFORE SH. A.D.JAIN, JUDICIAL MEMBER AND SH. T.S. KAPOOR, ACCOUNTANT MEMBER CROSS OBJECTION NO.46(ASR)/2014 (ARISING OUT OF ITA NO.456(ASR)/2014) ASSESSMENT YEAR: 2010-11 M/S CONCORDE AGRO SPRAYERS PVT. LTD., AMRITSAR. PAN:AABCC4779L VS. DY. CIT, CIRCLE-V, AMRITSAR. (CROSS OBJECTOR) (RESPONDENT) APPELLANT BY: SH. ASHWANI KALIA (CA.) RESPONDENT BY: SH. A. N. MISRA (DR.) DATE OF HEARING: 23.05.2016 DATE OF PRO NOUNCEMENT: 15.06.2016 ORDER PER T. S. KAPOOR (AM): THIS CROSS OBJECTION HAS BEEN FILED BY ASSESSEE AGA INST THE ORDER OF CIT(A), AMRITSAR, DATED 21.04.2014 FOR ASST. YEA R:2010-11. 2. THE APPEAL FILED BY REVENUE AGAINST GRANTING PAR T RELIEF TO THE ASSESSEE HAS ALREADY BEEN DISMISSED BECAUSE OF LOW TAX EFFECT, THEREFORE, THE CROSS OBJECTIONS FILED BY ASSESSEE HAS BEEN TRE ATED AS AN INDEPENDENT APPEAL. 3. THE ONLY ISSUE RAISED BY ASSESSEE IS THE PAR T CONFIRMATION OF ADDITION OF RS.1,00,000/- OUT OF ADDITION OF RS.9,0 0,000/- WHICH WAS MADE BY ASSESSING OFFICER U/S 68 OF THE ACT. 4. THE BRIEF FACTS OF THE CASE ARE THAT ASSESSEE HA D RECEIVED AN AMOUNT OF RS.9,00,000/- FROM SMT. NIRMAL JAITLY IN THE FORM OF TWO C.O. NO.46 (ASR)/2 014 ARISING OUT OF ITA NO.456 (ASR)/ 2014 ASST. YEAR: 2010-11 2 CHEQUES OF RS.5,50,000/- AND RS.3,50,000/-. THE ASS ESSING OFFICER HAD MADE THIS ADDITION HOLDING THE SAME TO BE UNEXPLAIN ED CREDITS. HOWEVER, THE LEARNED CIT(A) HELD THE AMOUNT OF RS.5,50,000/- TO BE FULLY EXPLAINED WHEREAS OUT OF AMOUNT OF RS.3,50,000/- HE UPHELD TH E PART ADDITION OF RS.1,00,000/-. THE RELEVANT FINDINGS OF LEARNED CIT (A) ARE REPRODUCED BELOW. 6.3 SMT. NIRMAL JAITLY HAD ADVANCED RS. 9,00,000/- TO THE ASSESSEE THROUGH 2 CHEQUES OF RS.5,50,000/- AND RS. 3,50,000 /- TO THE ASSESSEE. THESE ADVANCES OF RS. 9,00,000/- WERE GIVEN TO THE ASSESSEE COMPANY BY HER OUT OF O.D. ACCOUNT WITH STATE BANK OF PATIALA. IT CAN BE SEEN FROM THE HER O.D. ACCOUNT THAT SMT. NIRMAL JAITLY WAS GRANTE D OVER DRAFT LIMIT OF RS. 14,00,000/- AGAINST FDRS WITH STATE BANK OF PATIAL A. FURTHER IT CAN BE SEEN FROM THIS BANK ACCOUNT THAT SHE WAS REGULARLY WITHDRAWING AND DEPOSITING VARIOUS AMOUNTS IN THE SAID O.D. ACCOUNT . THE ADVANCE OF RS. 5,50,000/- ON 08.12.2009 HAS BEEN EXPLAINED REGARDI NG SOURCE THROUGH RECEIPT BY CHEQUE OF RS. 5,40,275/- ON 07.12.2009 F ROM INDERJIT SINGH OF DELHI TO WHOM THE AMOUNT OF RS. 5,00,000/- WAS GIVE N ON 04.04.2009 BY WAY OF AMOUNT PAYEE CHEQUE BY DRAWING OVER DRAFT FR OM THE BANK ACCOUNT. THIS ENTRY IN THE BANK ACCOUNT IS VERIFIAB LE AND IS EXPLAINED ON THE BASIS OF ABOVE BANK ACCOUNT AND CASH FLOW CHART SHOWING AVAILABILITY OF CASH ON SAID DATE. THUS ASSESSEE HAS PROVED IDEN TITY, CREDIT WORTHINESS AND GENUINENESS OF THE TRANSACTION REGARDING LOAN O F RS. 5,50,000/- TO THE ASSESSEE BY ABOVE EVIDENCES. THE ASSESSEE HAS RECEI VED RS. 3,50.000/- ON 24.10.2009 AND IT IS SEEN THAT ON SAME DATE 2,50 ,000/- WAS DEPOSITED IN CASH IN THE SAME BANK ACCOUNT AND EVEN AFTER CON SIDERING CONSOLIDATED CASH FLOW STATEMENT OF SMT. NIRMAL JAITALY, THERE I S SHORTAGE OF CASH ON HAND OF RS. 45,750/-. THIS SHORTAGE OF CASH HAS TO BE FURTHER INCREASED TO COVER VARIOUS WITHDRAWALS FOR THE PURPOSE OF PERSON AL USE BY SMT. NIRMAL JAITLY. CONSIDERING THESE CIRCUMSTANCE, IT WILL BE FAIR TO CONSIDERED THAT RS.1,00,000/- OUT OF CASH DEPOSIT ON 24.10.2009 REM AINED UNEXPLAINED. IN VIEW OF ABOVE, ADDITION TO THE EXTENT OF RS.1,00,00 0/- IS CONFIRM AS UNEXPLAINED CASH CREDIT ON ACCOUNT OF CREDIT WORTHI NESS OF THE LENDER. THUS ASSESSEE GETS RELIEF OF RS.8,00,000/- ON ACCOUNT OF THIS LOAN FROM SMT. NIRMAL JAITLY. 5. AGAINST THE PART SUSTAINCE OF ADDITIONS, THE ASS ESSEE IS IN APPEAL BEFORE US. C.O. NO.46 (ASR)/2 014 ARISING OUT OF ITA NO.456 (ASR)/ 2014 ASST. YEAR: 2010-11 3 6. AT THE OUTSET, THE LEARNED AR SUBMITTED THAT THE ASSESSEE HAD PROVIDED COMPLETE DETAILS SUCH PAN NO., ADDRESS AND THE ASSESSING OFFICER HAD RECORDED THE STATEMENT OF SON OF DEPOSI TORS WHEREIN HE HAD ADMITTED TO HAVE ADVANCED LOAN BY HER MOTHER SMT. N IRMAL JAITLY. HE FURTHER SUBMITTED THAT BOTH THE AMOUNTS OF RS.5,50, 000/- AND RS.3,50,000/- WERE RECEIVED THROUGH CHEQUES FROM OV ER DRAFT ACCOUNT OF ASSESSEE AND FOR WHICH LEARNED CIT(A) HAS RECORDED HIS FINDINGS AND THEREFORE, PART ADDITION OF RS.1,00,000/- WAS NOT J USTIFIED. 7. THE LEARNED DR, ON THE OTHER HAND, RELIED UPON T HE ORDER OF CIT(A). 8. WE HAVE HEARD THE RIVAL PARTIES AND HAVE GONE TH ROUGH THE MATERIAL PLACED ON RECORD. WE FIND THAT ASSESSEE HA D RECEIVED AN AMOUNT OF RS.9,00,000/- THROUGH TWO CHEQUES. THE ASSESSEE HAS ALSO PROVIDED INTEREST @ 12% TO SMT. NIRMAL JAITLY AS IS APPARENT FROM THE COPY FOR ACCOUNT OF SMT. NIRMAL JAITLY IN THE BOOKS OF ACCOU NT OF ASSESSEE AS PLACED IN (PB PAGE-1). WE FURTHER FIND THAT DURING THE ASSESSMENT PROCEEDINGS THE ASSESSEE HAD EXAMINED SH. RAKESH JA ITLY WHO WAS S/O SMT. NIRMAL JAITLY WHO HAD DENIED THE SUGGESTION OF ASSESSING OFFICER THAT THE ADVANCE TO THE COMPANY WAS MADE AFTER GETT ING ACCOMMODATION CASH FROM THE APPELLANT COMPANY. WE FURTHER FIND TH AT ASSESSEE HAD SUBMITTED PAN NO. OF SMT. NIRMAL JAITLY WHICH LEARN ED CIT(A) HAS NOTED AT PAGE 5 OF HIS ORDER, THEREFORE, ALL THE THREE IN GREDIENTS FOR PROVING CREDITS WERE PROVED AND THE ASSESSEE WAS NOT REQUIR ED TO PROVE SOURCE OF C.O. NO.46 (ASR)/2 014 ARISING OUT OF ITA NO.456 (ASR)/ 2014 ASST. YEAR: 2010-11 4 SOURCE. THEREFORE, WE HOLD THAT ONCE THE CREDITWORT HINESS OF THE LENDER GENUINENESS OF TRANSACTION AND IDENTITY OF THE LEND ER IS PROVED THEN ASSESSING OFFICER CANNOT EXAMINE THE SOURCE OF SOUR CE OF LENDER. 9. THE HONBLE GAUHATI HIGH COURT IN THE CASE OF NEMI CHAND KOTHARI VS. CIT (2003) 264 ITR 254 HAS HELD THAT ASSESSEE IS NOT REQUIRED TO PROVE THE SOURCE OF SOURCE AND ASSESSEES BURDEN IS CONFI NED TO PROVE THE CREDIT WORTHINESS OF THE CREDITOR WITH REFERENCE TO TRANSACTIONS BETWEEN THE CREDITOR AND ASSESSEE ONLY. 10. SINCE, IN THE PRESENT CASE THE ASSESSEE HAD RE CEIVED THE AMOUNTS THROUGH CHEQUES WHICH WERE ISSUED FROM THE OVER DRA FT ACCOUNT OF THE LENDER AND LEARNED CIT(A) WAS SATISFIED WITH THE TR ANSACTION AND THEREFORE THE PART SUSTAINANCE OF ADDITION OF RS.1 ,00,000/- ON THE BASIS OF LACK OF SUFFICIENT CASH IS NOT JUSTIFIED AND, TH EREFORE, WE ALLOW CROSS OBJECTIONS OF THE ASSESSEE. 11. IN VIEW OF THE ABOVE, THE CROSS OBJECTIONS FILE D BY ASSESSEE ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 15 TH JUNE, 2016. SD/- SD/- (A.D. JAIN) (T. S. KAPOOR) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED:15.06.2016. /PK/ PS. COPY OF THE ORDER FORWARDED TO: (1) THE ASSESSEE: (2) THE C.O. NO.46 (ASR)/2 014 ARISING OUT OF ITA NO.456 (ASR)/ 2014 ASST. YEAR: 2010-11 5 (3) THE CIT(A), (4) THE CIT, (5) THE SR DR, I.T.A.T., TRUE COPY BY ORDER