Shiv Kumar Aggarwal, New Delhi V. ITO, New Delhi

ITA 1037/DEL/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 6728 (ITAT-DELHI)
• Duration Of Justice: 11 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-02-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC 1
• Next Hearing Date: 27-12-2016
• Assessment Year: 2011-2012
• Appeal Filed On: 29-02-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: F R MEENA
• Assessee Lawyers: BL GUPTA
• Section: 143(3); 142(1); 133(6); 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH SMC, NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER I.T.A. NO. 1037/DEL/2016 A.Y. : 2011-12 SHIV KUMAR AGGARWAL, 2826/18, BHAGWATI MARKET, GALI PEEPAL MAHADEV, HAUZ QAZI, DELHI - 110006 (PAN: ABCPA2429G) VS. ITO, WARD-28(1), NEW DELHI (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. B.L. GUPTA, ADV. DEPARTMENT BY : SH. F.R. MEENA, SR. DR ORDER ASSESSEE HAS FILED THIS APPEAL AGAINST THE IMPUGNED ORDER DATED 21.12.2015 PASSED BY THE LD. CIT(A)-16, NEW DEL HI RELEVANT TO ASSESSMENT YEAR 2011-12 ON THE FOLLOWING GROUNDS: - 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AN D IN LAW, THE LD. C.I.T. (APPEAL) WAS INCORRECT AND UNJUSTI FIED IN CONFIRMING THE ADDITION OF RS.200000/- (TWO LAC O NLY) MADE BY THE AO U/S 68 IN THE NAME OF MR. SACHIN AGGARWAL. 2 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AN D IN LAW, THE LD. C.I.T. (APPEAL) WAS INCORRECT AND UNJUSTI FIED IN CONFIRMING THE ADDITION OF RS.300000/- (THREE LA C ONLY) MADE BY THE AO U/S 68 IN THE NAME OF MRS. LATA AGGARWAL. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AN D IN LAW, THE LD. C.I.T. (APPEAL) ERRED IN CONFIRMING THE ADDITION OF RS.200000/- (TWO LAC ONLY) IN THE ACCOUN T OF MR. SACHIN AGGARWAL EVEN THOUGH HE WAS EXAMINED BY THE C.I.T. (APPEAL) AND DURING EXAMINATION HE ADMITTED TO HAVE GIVEN A SUM OF RS. 200000/- TO THE ASSESSEE DURING THE ASSESSMENT YEAR - 2011-2012. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LD. C.I.T. (APPEAL) ERRED IN CONFIRMING THE ADDITION OF RS.200000/- (TWO LAC ONLY) & RS.300000/ - (THREE LAC ONLY) BY THE AO IN ACCOUNT OF MR. SACHIN AGGARWAL & MRS. LATA AGGARWAL EVEN THOUGH THEY HAVE DECLARED THE SAME IN THEIR BALANCE SHEET, BOOKS OF ACCOUNTS AND THEY ARE ASSESSED TO TAX. 5. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AN D IN LAW, THE LD. C.IT. (APPEAL) CONFIRMING THE ADDITION OF 3 RS.200000/- (TWO LAC ONLY) AND RS.300000/- (THREE L AC ONLY) EVEN WITHOUT CONSIDERING THE VARIOUS JUDGMENTS RELIED BY THE AR & COPIES FILED DURING THE APPEAL PROCEEDINGS. 6. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AN D IN LAW, THE LD. CIT(A) WAS INCORRECT AND UNJUSTIFIED IN CONFIRMING THE ADDITION OF RS. 2,00,000/- (TWO LAC O NLY) AND RS. 300000/- (THREE LAC ONLY) MADE BY THE AO U /S. 68 IN ACCOUNT OF MR. SACHIN AGGARWAL AND MRS. LATA AGGARWAL EVEN WHEN IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTIONS PROVED. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE F ILED ITS RETURN OF INCOME ON 23.9.2011 DECLARING AN INCOME OF RS. 2 ,28,090/-. THE RETURN WAS PROCESSED ON 24.12.2011 AT INCOME OF RS. 2,28,090/-. THE CASE WAS SELECTED FOR SCRUTINY AND ACCORDINGLY, THE NOTICE U/S. 143(2) OF THE I.T. ACT DATED 27.9.2012 WAS ISSUED AND SERVED UPON THE ASSESSEE. ANOTHER NOTICE U/S. 143(2) OF THE I.T. A CT DATED 24.7.2013 AND NOTICE U/S. 142(1) OF THE I.T. ACT, DAT ED 13.11.2013 WAS ISSUED AND SERVED UPON THE ASSESSEE AND IN RESPO NSE TO NOTICES, THE A.R. OF THE ASSESSEE APPEARED FROM TIME TO TIME AND FILED THE DETAILS INCLUDING THE BOOKS OF ACCOUNT, BUT THE STOCK 4 REGISTER WAS NOT PRODUCED. THE AO EXAMINED THE BOO KS ON TEST CHECK BASIS. THE ASSESSEE WAS ENGAGED IN THE BUSI NESS OF TRADING OF SANITARY ITEMS AND DURING THE YEAR ITS GP RATIO WA S 10.40% IN COMPARISON TO PREVIOUS YEAR 10.53%. DURING THE YEAR, THE ASSESSEE HAS TAKEN INTEREST FREE LOAN OF RS. 2 LAKHS FROM SH . SACHIN AGGARWAL R/O MALAN GALI HATHRAS AND RS. 3 LAKHS FROM SMT. LATA AGGARWAL, R/O MALAN GALI HATHRAS. THE LOAN WAS RECEVIED IN THE PERSONAL BANK ACCOUNT AND THEREAFER WAS CREDITED IN THE BOOKS OF ACCOUNTS AS ASSESSEES OWN CAPITAL INTORDUCED DURIN GTHE YEAR. N OTICE U/S. 133(6) OF THE I.T. ACT WAS ISSUED TO BOTH THE LENDERS. BUT NOTICES WERE RETURNED AS UNDELIVERED. AO OBSERVED THAT ASSES SEE HAS INTRODUCED ITS OWN MONEY THROUG THE BANK ACCOUNTS OF ITS RELATIVE. THE ASSESSEE IS UNABLE TO PROVE (I) IDENTITY OF THE LE NDERS (II) CREDIWORTHINESS OF THE LENDERS AND (III) THE GENUINNE SS OF THE TRANSACTION, HENCE, AO MADE THE ADDITION OF RS. 2 LACS ON ACCOUNT OF LOAN FROM SH. SACHIN AGGARWAL AND RS. 3 LACS ON ACC OUNT OF LOAN FROM SMT. LATA AGGARWAL IN THE TOTAL INCOME IN THE HA NDS OF THE ASSESSEE AND COMPLETED THE ASSESSMENT AT RS. 36,05,454 /- U/S. 143(3) OF THE I.T. ACT, 1961 VIDE HIS ORDER DATED 1 1.03.2014. 3. AGAINST THE ORDER OF THE LD. AO, ASSESSEE APPEAL ED BEFORE THE LD. CIT(A), WHO VIDE HIS IMPUGNED ORDER DATED 21.12 .2015 HAS PARTLY ALLOWED THE APPEAL OF THE ASSESSEE AND SUSTAI NED THE ADDITION 5 OF RS. 2,00,000/- & RS. 3,00,000/- RESPECTIVELY BY OBSERVING THAT THE ASSESSEE HAS NOT SATISFACTORILY EXPLAINED THE LOAN S, THEREFORE, HIT BY THE PROVISION OF SECTION 68 OF THE I.T. ACT. 4. AGGRIEVED WITH THE ORDER OF THE LD. CIT(A), AS SESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 5. LD. COUNSEL OF THE ASSESSEE HAS FILED THE PAPER BOOK CONTAINING PAGES 1 TO 99 ATTACHING THEREWITH THE COPY OF COMPUTATION OF LOAN LEDGER OF SH. SACHIN AGGARWAL IN THE BOOKS OF SHIV KUMAR AGGARWAL; CONFIRMATION BY SH. SACHIN AGGA RWAL; COPY OF ITR, COMPUTATION WITH B/S OF SH. SACHIN AGGARWAL; CO PY OF ELECTION CARD AND BANK STATEMENT OF SH. SACHIN AGGARWAL; CO PY OF LOAN LEDGER OF SMT. LATA AGGARWAL IN THE BOOKS OF SHIV KUM AR AGGARWAL; COPY OF ITR, COMPUTATION WITH B/S OF SMT. LATA AGGARWA L AND COPY OF ELECTION CARD, RATION CARD AND BANK STATEMENT OF S MT. LATA AGGARWAL. HE FURTHER STATED THAT ASSESSEE HAS RAISE D LOAN OF RS.2 LACS FROM SH. SACHIN AGGARWAL AND RS. 3 LACS F ROM SMT. LATA AGGARWAL AND DURING THE EXAMINATION BY THE LD. CIT(A ) SH. SACHIN AGGARWAL HAS ADMITTED TO HAVE GIVEN A SUM OF RS. 2 L ACS TO THE ASSESSEE DURING THE AY 2011-12. HE FURTHER STATED THAT S H. SACHIN AGGARWAL AND SMT. LATA AGGARWAL EVEN THOUGH HAVE DEC LARED THE SAME IN THEIR BALANCE SHEET, BOOKS OF ACCOUNTS AND TH EY ARE 6 ASSESSED TO TAX, HENCE, THE IDENTITY, CREDITWORTHINES S AND GENUINENESS OF THE TRANSACTIONS HAVE BEEN PROVED, THE REFORE, REQUESTED TO DELETE THE ADDITION IN DISPUTE. 6. ON THE OTHER HAND, LD. SR. DR RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW AND STATED THAT LD. CIT(A) HAS PASSE D A WELL REASONED ORDER WHICH DOES NOT NEED ANY INTERFERENCE O N MY PART, HENCE, THE APPEAL OF THE ASSESSEE MAY BE DISMISSED. 7. I HAVE HEARD BOTH THE PARTIES AND PERUSED THE RECOR DS ESPECIALLY THE IMPUGNED ORDER AND THE PAPER BOOK FILE D BY THE ASSESSEE CONTAINING PAGES 1 TO 99 ATTACHING THEREWITH TH E COPY OF COMPUTATION OF LOAN LEDGER OF SH. SACHIN AGGARWAL IN THE BOOKS OF SHIV KUMAR AGGARWAL; CONFIRMATION BY SH. SACHIN AGGA RWAL; COPY OF ITR, COMPUTATION WITH B/S OF SH. SACHIN AGGARWAL; CO PY OF ELECTION CARD AND BANK STATEMENT OF SH. SACHIN AGGARWAL; CO PY OF LOAN LEDGER OF SMT. LATA AGGARWAL IN THE BOOKS OF SHIV KUM AR AGGARWAL; COPY OF ITR, COMPUTATION WITH B/S OF SMT. LATA AGGARWA L AND COPY OF ELECTION CARD, RATION CARD AND BANK STATEMENT OF S MT. LATA AGGARWAL. I NOTE THAT THE ASSESSEE HAS RAISED LOAN OF RS.2 LACS FROM SH. SACHIN AGGARWAL AND RS. 3 LACS F ROM SMT. LATA AGGARWAL AND DURING THE EXAMINATION BY THE LD. CIT(A ) SH. SACHIN AGGARWAL HAS ADMITTED TO HAVE GIVEN A SUM OF RS. 2 L ACS TO THE 7 ASSESSEE DURING THE AY 2011-12. I FURTHER FIND THAT SH. SACHIN AGGARWAL AND SMT. LATA AGGARWAL EVEN THOUGH HAVE DEC LARED THE SAME IN THEIR BALANCE SHEET, BOOKS OF ACCOUNTS AND TH EY ARE ASSESSED TO TAX, WHICH ITSELF PROVES THE IDENTITY, CREDI TWORTHINESS AND GENUINENESS OF THE TRANSACTIONS AND HENCE, THE AD DITION IN DISPUTE IS NOT SUSTAINABLE IN THE EYES OF LAW, THEREF ORE, THE SAME IS DELETED. MY AFORESAID VIEW IS FULLY SUPPORTED WITH TH E FOLLOWING DECISIONS FROM WHICH THE PRESENT ISSUE IS SQUARELY CO VERED:- NEMI CHAND KOTHARI VS. CIT & ANR. 264 ITR 254 (GAUHATI), WHEREIN IT HAS BEEN HELD THAT A PERSON MAY HAVE FUNDS FROM ANY SOURCE AND AN ASSESSEE, ON SUCH INFORMATION RECEIVED, MAY TAKE A LOAN FROM SUCH A PERSON. IT IS NOT THE BUSINESS OF THE ASSESSEE TO FIND OUT WHETHER THE SOURCE OR SOURCES FROM WHICH THE CREDITOR HAD AGREED TO ADVANCE THAT THE AMOUNTS WERE GENUINE OR NOT. IF A CREDITORS HAS, BY ANY UNDISCLOSED SOURCE, A PARTICULAR AMOUNT OF MONEY IN THE BANK, THERE IS NO LIMITATION UNDER THE LAW ON THE PART OF THE ASSESSEE TO OBTAIN SUCH AMOUNT OF MONEY OR PART THEREOF FROM THE CREDITOR, BY WAY OF CHEQUE IN THE FORM OF LOAN AND IN SUCH A CASE, IF THE CREDITOR FAILS TO 8 SATISFY AS TO HOW HE HAD ACTUALLY RECEIVED THE SAID AMOUNT AND HAPPENED TO KEEP IT IN THE BANK, THE SAID AMOUNT CANNOT BE TREATED AS INCOME OF THE ASSESSEE FROM UNDISCLOSED SOURCES. 8. IN THE BACKGROUND OF THE AFORESAID DISCUSSIONS AND RESPECTFULLY FOLLOWING THE PRECEDENT, AS AFORESAID, T HE ADDITION IN DISPUTE IS HEREBY DELETED AND ACCORDINGLY, THE APPEAL OF THE ASSESSEE STANDS ALLOWED. 9. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE STANDS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 10/02/2017. SD/- [H.S. SIDHU] JUDICIAL MEMBER DATE 10/02/2017 SRBHATNAGAR COPY FORWARDED TO: - 1. APPELLANT - 2. RESPONDENT - 3. CIT 4. CIT (A) 5. DR, ITAT ASSISTANT REGISTRAR, ITAT, DELHI BENCHES