Darshan Kumar, V. ACIT, Range-1,

ITA 1117/DEL/2004

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 3772 (ITAT-DELHI)
• Duration Of Justice: 7 year(s) 3 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-06-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Next Hearing Date: 04-05-2011
• Assessment Year: 1994-1995
• Appeal Filed On: 10-03-2004
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: KISHORE B
• Assessee Lawyers: TAR UN KUMAR ADVS; SSH ASHWANI TANEJA
• Keywords: Reopening of assessment; Gift; Retrospective amendment; Reassessment proceedings
• Section: 234B; 147; 131; 68; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH C NEW DELHI) BEFORE SHRI RAJPAL YADAV AND SHRI SHAMIM YAHYA ITA NO. 1117/DEL/2004 ASSESSMENT YEAR: 1994-95 MR. DARSHAN KUMAR, VS. ASST. COMMISSIONER OF IT, B-17, NEHRU GROUND, RANGE-1, FARIDABAD. FARIDABAD. (PAN: NIL ) (APPELLANT) (RESPONDENT) APPELLANT BY: S/SH. ASHWANI TANEJA & TAR UN KUMAR, ADVS. RESPONDENT BY: SHRI KISHORE B. SR.DR ORDER PER RAJPAL YADAV: JUDICIAL MEMBER PER RAJPAL YADAV: JUDICIAL MEMBER PER RAJPAL YADAV: JUDICIAL MEMBER PER RAJPAL YADAV: JUDICIAL MEMBER THE ASSESSEE IS IN APPEAL BEFORE US AGAINST THE OR DER OF LEARNED CIT(APPEALS) DATED 09.01.2004 PASSED FOR ASSESSMENT YEAR 1994-95. THE ASSESSEE HAS RAISED SEVEN GROUNDS OF APPEAL OUT OF THAT GROUND NOS. 6 & 7 ARE GENERAL IN NATURE, THEY DO NOT REQUIRE ANY SPEC IFIC ADJUDICATION. IN GROUND NO.5, ASSESSEE IS IMPUGNING CHARGING OF INTE REST UNDER SECTION 234A AND 234B OF THE INCOME-TAX ACT, 1961. THE CHARGING OF INTEREST IS CONSEQUENTIAL IN NATURE, HENCE THIS GROUND IS REJEC TED. 2. IN GROUND NO.3, THE ASSESSEE HAS PLEADED THAT NO TICE UNDER SECTION 143(2) WAS NOT ISSUED WITHIN THE STATUTORY PERIOD O F TIME, HENCE 2 REASSESSMENT ORDER IS BAD IN LAW. THE APPEAL OF THE ASSESSEE WAS HEARD AND THIS GROUND WAS TAKEN AS A PRELIMINARY GROUND OF AP PEAL, THE ITAT AFTER FOLLOWING THE DECISION OF THE SPECIAL BENCH OF THE ITAT IN THE CASE OF RAJ KUMAR CHAWLA VS. ITO REPORTED IN 94 ITD 1 HAS ALLOW ED THIS GROUND OF APPEAL AND QUASHED THE ASSESSMENT ORDER. DISSATISFI ED WITH THE ORDER OF THE ITAT, REVENUE CARRIED THE MATTER IN APPEAL BEFORE T HE HON'BLE HIGH COURT VIDE ITA NO.529 OF 2006. HON'BLE HIGH COURT HAS SET ASIDE THE ORDER OF THE ITAT AND OBSERVED THAT AN AMENDMENT HAS BEEN INSERT ED IN SECTION 148 OF THE INCOME-TAX ACT, 1961 BY FINANCE ACT NO.2006, WI TH RETROSPECTIVE EFFECT FROM 1.10.1991. THIS AMENDMENT WAS NOT AVAILABLE BE FORE THE ITAT, HENCE THE ISSUE REQUIRES TO BE EXAMINED AFRESH. HON'BLE H IGH COURT HAS SET ASIDE THE ORDER OF THE ITAT VIDE ORDER DATED 22.4.2008. T HE ASSESSEE DID NOT ADVANCE ANY ARGUMENT ON THIS ISSUE IN THE SECOND RO UND OF LITIGATION, HENCE THIS GROUND OF APPEAL IS REJECTED. 3. GROUND NOS. 1 AND 2 ARE INTER-CONNECTED WITH EAC H OTHER. IN THESE GROUNDS OF APPEAL, ASSESSEE HAS PLEADED THAT BEFORE REOPENING OF AN ASSESSMENT UNDER SEC. 147 OF THE INCOME-TAX ACT, 19 61 BY ISSUANCE OF A NOTICE UNDER SEC. 148, THE CONDITIONS PRESCRIBED UN DER SEC. 147 TO 151 ARE TO BE COMPLIED WITH. IN THE PRESENT CASE, THE CONDITIO NS HAVE NOT BEEN COMPLIED WITH, THEREFORE, ASSESSMENT ORDER IS NOT SUSTAINABL E IN LAW. 3 4. THE LEARNED COUNSEL FOR THE ASSESSEE WHILE IMPUG NING THE ORDERS OF THE REVENUE AUTHORITIES BELOW HAS SUBMITTED THAT AS PER SECTION 151(2), NO NOTICE SHALL BE ISSUED UNDER SEC. 148 BY AN ASSESSI NG OFFICER WHO IS BELONG THE RANK OF JOINT CIT, AFTER THE EXPIRY OF FOUR YE ARS FROM THE END OF RELEVANT ASSESSMENT YEAR, UNLESS JCIT IS SATISFIED ON THE RE ASONS RECORDED BY SUCH ASSESSING OFFICER, THAT IT IS A FIT CASE FOR THE IS SUE OF SUCH NOTICE. HE SUBMITTED THAT BEFORE ISSUE OF A NOTICE, AN APPROVA L FROM THE LEARNED JCIT IS MANDATORY. ACCORDING TO THE LEARNED COUNSEL FOR THE ASSESSEE, ALL REQUISITE CONDITIONS I.E., NOTICE IS BEING ISSUED AFTER EXPIR Y OF FOUR YEARS BY THE ASSESSING OFFICER ARE AVAILABLE IN THE PRESENT CASE . THERE IS NO APPROVAL OBTAINED FROM THE JCIT AND, THEREFORE, ASSESSMENT O RDER IS BAD IN LAW. THE LEARNED COUNSEL FOR THE ASSESSEE FURTHER SUBMITTED THAT ASSESSEE TOOK THIS PLEA BEFORE THE LEARNED CIT(APPEALS) ALSO AND LEARNED CI T(APPEALS) CALLED FOR THE REMAND REPORT. THE COPY OF THE APPROVAL ORDER I S NOT AVAILABLE ON THE RECORD. IN THE REMAND REPORT, ASSESSING OFFICER HA S ACCEPTED THIS ASPECT, BUT HE PLACED ON RECORD COPY OF THE DISPATCH REGISTER, EXHIBITING, THE FACT THAT LETTER OF APPROVAL WAS SENT AND IT WAS RECEIVED BAC K. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE EVIDENCE IN THE SHA PE OF DISPATCH REGISTER EXHIBITING ISSUE OF LETTER TO THE JCIT AND RECEIPT OF LETTER CANNOT, REPLACE THE REQUIREMENT OF PRODUCTION OF APPROVAL ORDER. SANCTI ON UNDER SEC. 151 IS NOT 4 A ROUTINE EXERCISE. IT HAS TO BE GRANTED BY THE JCI T AFTER SATISFYING HIMSELF ABOUT THE EXISTENCE OF REASONS FOR REOPENING OF THE ASSESSMENT. THUS, THE REQUIREMENTS OF LAW IS THAT ASSESSING OFFICER HAS T O SATISFY HIMSELF FIRST THEN HE WOULD TRANSMIT HIS SATISFACTION FOR APPROVAL TO THE LEARNED JCIT WHO IS REQUIRED TO APPLY HIS MIND AND DECIDE WHETHER APPRO VAL IS TO BE GRANTED OR NOT. IN THE ABSENCE OF APPROVAL ORDER HOW IT CAN BE CONSTRUED THAT IT WAS GRANTED. ACCORDING TO THE LEARNED COUNSEL, IT IS TO BE TAKEN AS IF APPROVAL WAS DENIED TO THE ASSESSING OFFICER. IN HIS SECOND FOLD OF SUBMISSIONS, HE POINTED OUT THAT FROM THIS EVIDENCE IT CAN BE CONST RUED THAT ASSESSING OFFICER HAS SENT SOMETHING ELSE WHICH WAS RETURNED IN THE ORDINARY COURSE OF OFFICIAL DEALING. HOW IT CAN BE IDENTIFIED THAT IT WAS APPROVAL GRANTED IN THE CASE OF ASSESSEE. THE ORDER OF THE GRANTING APPROVA L OUGHT TO BE KEPT ON THE RECORD SO THAT IT CAN BE EVALUATED BY HIGHER APPELL ATE FORM. NON-AVAILABILITY OF THE ORDER WOULD RENDER THE ASSESSMENT ORDER UNSU STAINABLE IN LAW. 5. IN HIS NEXT FOLD OF SUBMISSIONS, HE SUBMITTED TH AT ASSESSING OFFICER HAD ISSUED A NOTICE UNDER SEC. 148 ON 24.5.2001. TH EREAFTER, HE ISSUED A FRESH NOTICE ON 30.5.2001. THE SECOND NOTICE ISSUED BY THE ASSESSING OFFICER IS NOT SUSTAINABLE IN LAW, THE ASSESSING OFFICER CA NNOT ISSUE SECOND NOTICE FOR REOPENING OF THE ASSESSMENT DURING THE PENDENCY OF THE FIRST NOTICE. HE 5 RELIED UPON THE JUDGMENT OF HON'BLE RAJASTHAN HIGH COURT IN THE CASE OF CIT VS. RAM KISHAN LEELA REPORTED IN 295 ITR 525. H E ALSOS RELIED UPON THE ORDER OF THE ITAT IN THE CASE OF MRS. SARLA SRIDHAR AN VS. ITO REPORTED IN 112 TTJ PAGE 220. 6. ON THE ISSUE OF REOPENING, LEARNED COUNSEL FOR T HE ASSESSEE FURTHER SUBMITTED THAT ASSESSMENT HAS BEEN REOPENED ON THE DIRECTIONS OF OTHER OFFICER I.E. DDIT. ASSESSING OFFICER HAS NOT APPLIE D HIS INDEPENDENT MIND. HENCE, THE REASSESSMENT ORDER IS NOT SUSTAINABLE. 7. LEARNED DR ON THE OTHER HAND SUBMITTED THAT ASSE SSING OFFICER HAS WRITTEN A LETTER TO THE LEARNED JCIT FOR GRANT OF A PPROVAL FOR REOPENING OF THE ASSESSMENT. THE LETTER EXHIBITING THE APPROVAL IS S OMEHOW NOT AVAILABLE ON THE RECORD. IT MIGHT BE MISPLACED OR DESTROYED. THE DISPATCH REGISTER IS BEING MAINTAINED IN THE OFFICE WHICH DEMONSTRATE THE MOME NT OF FILES. ASSESSING OFFICER HAS SUPPLIED COPY OF THIS REGISTER WHICH IS BEING MAINTAINED IN THE ORDINARY COURSE OF OFFICIAL FUNCTIONING. AT SR. NO. 715, IN THE SUBJECT COLUMN, IT HAS BEEN WRITTEN THAT PROPOSAL UNDER SEC . 148 IN THE CASE OF DARSHAN KUMAR FOR ASSESSMENT YEAR 2004-05 IS BEING SENT. SIMILARLY, ON 24.5.2001 AT SR. NO. 164, A LETTER FROM ADDITIONAL CIT HAD BEEN SENT TO THE ASSESSING OFFICER IN CONNECTION WITH THE REOPENING OF ASSESSMENT UNDER SEC. 6 148 OF THE ACT. THIS EVIDENCE CLEARLY INDICATES THA T APPROVAL WAS GRANTED BY THE LEARNED JCIT AND ONLY THEREAFTER, ASSESSING OFF ICER HAS ISSUED THE NOTICE UNDER SEC. 148 OF THE ACT. WITH REGARD TO THE SECON D FOLD OF THE SUBMISSIONS, HE POINTED OUT THAT FIRST NOTICE WAS HANDED OVER TO THE NOTICE SERVER ON 24.5.2001. IT COULD NOT BE SERVED ON THAT DATE. A F RESH NOTICE WAS SERVED THROUGH REGISTERED POST ON 30.5.2001 MEANWHILE ON 3 1.5.2001, THE PROCESS SERVER HAS ALSO SERVED THE NOTICE. SO IT IS NOT THE CASE OF A DOUBLE REOPENING RATHER IT IS A CASE WHERE MULTIPLE NOTICES WERE ISS UED SIMULTANEOUSLY THROUGH DIFFERENT MODES. WITH REGARD TO THE THIRD PROPOSITI ON, HE SUBMITTED THAT DDIT(INVESTIGATION), FARIDABAD HAD RECEIVED AN INFO RMATION FROM THE ADIT, GHAZIABAD THAT MANY PERSONS HAD SHOWN TO HAVE RECEI VED GIFTS FROM S/SH. NN GUPTA, SANJIV GUPTA AND VD JAISWAL DURING THE PE RIOD 1992 TO 1994 THROUGH THEIR NRI ACCOUNTS MAINTAINED WITH VARIOUS BANKS IN DELHI. THE ASSESSEE HAD ALSO RECEIVED A GIFT FROM SANJIV GUPTA . SHRI SANJIV GUPTA HAD WRITTEN A LETTER ON 11.3.1996 ADDRESSED TO SHRI KC ABRAHIM, ENFORCEMENT OFFICER OF FERA. HE STATED THAT HE HAD NO KNOWLEDGE OF NRI ACCOUNT BEING OPERATED UNDER HIS NAME IN INDIA. THE STATEMENT OF THE ASSESSEE WAS ALSO RECORDED ON 9.3.2001. ON THE BASIS OF ALL THESE INF ORMATION, ASSESSING OFFICER HAS HARBORED A BELIEF THAT INCOME OF RS. 7 LACS TAXABLE IN THE HANDS OF ASSESSEE HAS ESCAPED ASSESSMENT. THEREFORE, HE R EOPENED THE ASSESSMENT 7 AND ISSUED A NOTICE UNDER SEC. 148 OF THE ACT. THIS NOTICE HAS BEEN ISSUED IN THE MONTH OF MAY 2001. 8. WE HAVE DULY CONSIDERED THE RIVAL CONTENTIONS AN D GONE THROUGH THE RECORD CAREFULLY. THERE IS NO DISPUTE WITH REGARD T O THE PROPOSITION THAT IN THE PRESENT CASE BEFORE ISSUANCE OF A NOTICE UNDER SEC. 148 OF THE ACT FOR REOPENING OF THE ASSESSMENT UNDER SEC. 147, ASSESSI NG OFFICER HAS TO OBTAIN AN APPROVAL FROM THE JCIT AS PER SECTION 151(2) OF THE ACT. IT IS ALSO UNDISPUTED THAT COPY OF SUCH APPROVAL ORDER IS NOT AVAILABLE ON THE RECORD. THE CONTENTION OF THE ASSESSEE IS THAT IN THE ABSEN CE OF APPROVAL ORDER, ASSESSMENT ORDER BE QUASHED WHEREAS CASE OF THE REV ENUE IS THAT COPY OF THE APPROVAL ORDER IS NOT AVAILABLE BUT THAT DOES NOT M EAN THAT APPROVAL WAS NOT TAKEN BEFORE INITIATING THE ASSESSMENT PROCEEDINGS. ADMITTEDLY, AVAILABILITY OF THE SANCTION ORDER IS AN IDEAL SITUATION AND COU LD ELIMINATE ALL SORT OF IFS AND BUTS. HOWEVER, IT IS DIFFICULT FOR US TO CONCUR WITH THE SUBMISSIONS MADE BY THE ASSESSEE BECAUSE ASSESSMENT ORDER IS BEING F RAMED BY THE ASSESSING OFFICER IN DISCHARGING OF HIS PUBLIC DUTY BEING A G OVERNMENT SERVANT. A REGISTER EXHIBITING THE LETTERS FORWARDED TO OTHER AUTHORITIES IS BEING MAINTAINED IN HIS OFFICE. SIMILARLY, A REGISTER DEM ONSTRATING INWARD RECEIPT OF THE POST IS BEING MAINTAINED. THESE REGISTERS AR E BEING MAINTAINED IN 8 ORDINARY COURSE OF DISCHARGE OF OFFICIAL FUNCTIONS. THEY CONTAIN SERIAL NUMBER, DATE, NAME AND ADDRESS, SUBJECT ETC. THE LE TTERS WHICH WERE DISPATCHED FROM THE OFFICE OF THE ASSESSING OFFICER ARE BEING GIVEN SERIAL NUMBERS. AT SR.NO. 715, A PROPOSAL UNDER SEC.148 IN THE CASE OF SHRI DARSHAN KUMAR HAS BEEN RECORDED, MEANING THEREBY A PROPOSAL WAS SENT TO JCIT UNDER SEC. 148 OF THE ACT. SIMILARLY, AT SR. N O. 164, A LETTER FROM ADDITIONAL CIT HAS BEEN RECEIVED IN THE OFFICE OF T HE ASSESSING OFFICER ON 24.5.2001. HAD THERE BEEN NO APPROVAL THEN NO ASSES SING OFFICER WOULD DARE TO CONTINUE WITH THE REASSESSMENT PROCEEDINGS, BECAUSE HE IS SPECIFICALLY AWARE THAT WHENEVER THIS FACT CAME TO THE NOTICE OF THE HIGHER AUTHORITIES OR ASSESSEE THE PROCEEDINGS WILL BE CUL MINATED AND WOULD BE DECLARED NULL AND VOID. DEPARTMENTAL INQUIRY PROCEE DINGS MIGHT BE INITIATED. THE ASSESSEE HAD NOT FILED ANY SUCH OBJECTION BEFOR E THE ASSESSING OFFICER. APART FROM THIS ONE FACTOR, IF WE LOOK INTO THE FAC TS AND CIRCUMSTANCES AVAILABLE ON THE RECORD, THEN IT WOULD REVEAL THAT NO ADDITIONAL CIT WOULD DENY FOR REOPENING OF THE ASSESSMENT. A RACKET DEMO NSTRATING THE GIFTS BEING GIVEN FROM NRI ACCOUNT OF NON-EXISTING PERSON WAS F OUND TO BE OPERATED IN THIS REGIN. THE INVESTIGATION WING OF GHAZIABAD WAS ABLE TO LAY HIS HANDS ON SUCH DETAILS. STATEMENT OF THE ASSESSEE WAS ALSO RE CORDED WHICH IS AVAILABLE ON PAGE NOS. 47 TO 49 OF THE PAPER BOOK. THE ASSESS EE WAS UNABLE TO GIVE 9 PARTICULARS OF THE ALLEGED LOAN/GIFTS IN THAT STATE MENT. SIMILARLY, THE ALLEGED DONOR/LOANER HAS WRITTEN A LETTER TO THE ENFORCEMEN T OFFICER, APPRAISING HIM AS TO HOW HE IS NOT AWARE ABOUT OPERATION OF HIS NR I ACCOUNT. STATEMENT OF OTHER PERSONS WHO HAVE ARRANGED THE LOAN I.E. UMESH MEHENDIRATTA, WAS ALSO RECORDED BY THE DDIT. THUS, ON ACCOUNT OF AVAILABIL ITY OF THIS MUCH MATERIAL, THERE CANNOT BE ANY POSSIBILITY THAT LEAR NED JCIT WOULD HAVE DENIED THE REOPENING OF ASSESSMENT. THE LEARNED COU NSEL FOR THE ASSESSEE AT THE TIME OF HEARING ON THE STRENGTH OF HON'BLE SUPR EME COURTS DECISION IN THE CASE OF CHHAGANMAL RAJPAL VS. SP CHALLAIYA REPO RTED IN 79 ITR 603 HAS CONTENDED THAT IF EXPRESSION YES AND THEREAFTER F IXING THE SIGNATURE WAS MADE BY THE AUTHORITY GRANTING APPROVAL IS THERE TH EN IT WOULD NOT TANTAMOUNT TO GRANTING OF SANCTION. IN THE PRESENT CASE, EVEN THIS TYPE OF APPROVAL IS NOT DISCERNIBLE. WE HAVE ALREADY EXPRES SED THAT IDEAL SITUATION WOULD BE THE AVAILABILITY OF APPROVAL ORDER. BUT IN THE ABSENCE OF THAT ORDER, WE ARE LOOKING INTO SURROUNDING CIRCUMSTANCES, WHET HER SUFFICIENT REASONS ARE IN EXISTENCE WHICH MAY GO IN FAVOUR OF THE ASSE SSING OFFICER THAT LEARNED JCIT WOULD HAVE NOT DENIED THE APPROVAL. WE HAVE LOOKED INTO ALL THOSE FACTS I.E. COPY OF THE CORRESPONDENCE REGISTE R, STATEMENT OF ASSESSEE, STATEMENT OF MEHENDIRATTA, LETTER WRITTEN BY SHRI S ANJIV GUPTA ETC. AND WE ARE SATISFIED THAT THERE MUST BE AN APPROVAL ON THE RECORD. 10 9. AS FAR AS THE SECOND LIMB OF ARGUMENT IS CONCERN ED THAT TWO NOTICES WERE ISSUED BY THE ASSESSING OFFICER UNDER SEC. 148 OF THE ACT ARE CONCERNED, WE ARE OF THE OPINION THAT ASSESSING OFF ICER HAS NOT REOPENED THE ASSESSMENT TWICE DURING THE PENDENCY OF REASSESSMEN T PROCEEDINGS IN PURSUANCE OF THE FIRST NOTICE. HE SIMPLY ISSUED TWO NOTICES THROUGH DIFFERENT MODES OF SERVICE. THE FIRST NOTICE WAS ISSUED THROU GH PROCESS SERVER AND SIMULTANEOUSLY HE ISSUED A NOTICE THROUGH REGISTERE D POST. BOTH THESE NOTICES WERE SERVED ON 30.5.2001 AND 31.5.2001. IN BOTH THE NOTICES, HE DIRECTED THE ASSESSEE TO FILE THE RETURN FOR ASSESSMENT YEAR 199 4-95. THUS, THE CASE LAWS REFERRED BY THE ASSESSEE ARE NOT APPLICABLE. AS FAR AS REOPENING OF ASSESSMENT ARE CONCERNED, WE ARE OF THE VIEW THAT S UFFICIENT MATERIAL IS AVAILABLE BEFORE THE ASSESSING OFFICER FOR REOPENIN G OF THE ASSESSMENT. THE COPY OF THE STATEMENT RECORDED BY THE DDIT ON 9.3.2 001 WAS AVAILABLE WITH THE ASSESSING OFFICER. THE ASSESSEE HAS DISCLOSED T HAT HE DOES NOT KNOW SH. SANJIV GUPTA. SHRI SANJIV GUPTA HAS GIVEN HIM A INT EREST FREE LOAN. HE NEVER MET WITH SHRI SANJIV GUPTA. THIS STATEMENT IN ITSEL F DISCLOSES THAT PRIMA FACIE, INFORMATION IS AVAILABLE FOR HARBORING A BEL IEF THAT INCOME CHARGEABLE TO TAX UP TO RS. 7 LACS HAS ESCAPED ASSESSMENT. AFT ER LOOKING INTO ALL THESE MATERIAL, WE ARE OF THE OPINION THAT THE ASSESSING OFFICER HAS RIGHTLY FORMED THE OPINION ABOUT THE ESCAPEMENT OF INCOME. IN VIEW OF THE ABOVE 11 DISCUSSION, WE DO NOT FIND ANY MERIT IN GROUND NOS. 1 AND 2, THEY ARE REJECTED. 10. IN GROUND NO.4, GRIEVANCE OF ASSESSEE IS THAT L EARNED CIT(APPEALS) HAS ERRED IN CONFIRMING THE ADDITION OF RS.8,05,000 . AS STATED EARLIER, THE ASSESSEE HAD RECEIVED A SUM OF RS.7 LACS FROM ONE S HRI SANJIV GUPTA WHO IS RESIDENT OF USA THROUGH HIS NRI ACCOUNT BEARING NO. 320169535 MAINTAINED AT AMERICAN EXPRESS BANK, NEW DELHI. WHEN ENFORCEME NT DIRECTOR MADE AN INQUIRY ABOUT THIS ACCOCUNT, SHRI SANJIV GUPTA H AS DENIED HAVING ANY KNOWLEDGE OF LOANS/GIFTS THROUGH THIS NRI ACCOUNT. HE HAS WRITTEN A LETTER TO SHRI CK IBRAHIM, ENFORCEMENT OFFICER (FERA, DELHI). COPY OF THE LETTER IS AVAILABLE AT PAGE NO.50 OF THE PAPER BOOK. THE AMOU NT OF RS. 7 LACS WAS CREDITED IN THE ACCOUNT OF ASSESSEE. THUS, IT IS TH E ASSESSEE WHO HAS TO PROVE THE IDENTITY OF THE CREDITORS. HIS CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTION AS PER SECTION 68 OF THE INCOME-TAX ACT , 1961. THE ASSESSEE IN HIS STATEMENT RECORDED BY THE DDIT UNDER SECTION 13 1 HAS DISCLOSED THAT HE DOES NOT KNOW SANJIV GUPTA. LOAN WAS ARRANGED BY SH RI UMESH MEHENDIRATTA WHO IS WORKING AS AN ACCOUNTANT. HE IS RESIDING AT PUNJABI MOHALLA, BALLABHGARH, BUT ASSESSEE EXPRESSED HIS IN ABILITY TO PRODUCE THIS MAN ALSO BEFORE THE INCOME-TAX AUTHORITIES, ON THE GROUND THAT HE IS NOT IN 12 TOUCH WITH THIS MAN. THE ASSESSEE FAILED TO FILE AN Y CONFIRMATION FROM SHRI SANJIV GUPTA. THE GENUINENESS OF THE TRANSACTION HA S ALSO NOT BEEN PROVED AND EVEN THE IDENTITY OF THE CREDITOR COULD NOT BE PROVED. IT COULD NOT BE ESTABLISHED ON THE RECORD THAT SHRI SANJIV GUPTA WA S MAINTAINING THAT ACCOUNT. IT COULD BE A FAKE ACCOUNT MAINTAINED BY S OME UNKNOWN PERSONS. AT THE TIME OF HEARING, LEARNED COUNSEL FOR THE ASS ESSEE POINTED OUT THAT A SIMILAR LOAN WAS TAKEN BY SHRI JAGDISH KUMAR, ANOTH ER DIRECTOR OF M/S. J.D. IRON AND THAT ADDITION HAS BEEN DELETED BY THE ITAT . HE PLACED ON RECORD COPY OF THE ITATS ORDER IN ITA NO.5518/DEL/03. WE HAVE GONE THROUGH THE ITATS ORDER. IN OUR OPINION, IT IS A QUESTION OF F ACT. IT IS THE ASSESSEE WHO HAS TO PROVE THE ALLEGED LOAN RECEIVED BY HIM. WE D O NOT KNOW WHETHER STATEMENT OF SHRI JAGDISH KUMAR WAS RECORDED BY THE DDIT OR NOT? THE CASE OF THE ASSESSEE ON THE STRENGTH OF THIS ORDER IS TH AT OPPORTUNITY TO CROSS- EXAMINE SHRI UMESH MEHENDIRATTA AND SOME OTHER PERS ON WAS NOT GRANTED, THEREFORE, THEIR STATEMENTS CANNOT BE USED AGAINST THE ASSESSEE. IN OUR OPINION, ALL THESE ARGUMENTS ARE IRRELEVANT. UNDER SEC. 68 OF THE INCOME-TAX ACT, 1961, IT IS THE ASSESSEE WHO IS REQUIRED TO EX PLAIN THE CREDIT ENTRY IN HIS ACCOUNT. IT IS THE ASSESSEE WHO HAS TO FILE THE CON FIRMATION FROM THE CREDITORS AND TO PROVE HIS CREDITWORTHINESS AND GENUINENESS O F THE TRANSACTION. THE STATEMENT AND OTHER MATERIAL COLLECTED BY THE INVES TIGATION WING OF THE 13 DEPARTMENT IS JUST FOR CORROBORATION PURPOSES. IN T HE PRESENT CASE, ASSESSEE FAILED TO DISCHARGE HIS ONUS BY PRODUCING POSITIVE EVIDENCE IN SUPPORT OF HIS CLAIM THAT HE HAS RECEIVED A GENUINE LOAN. LEARNED REVENUE AUTHORITIES BELOW HAVE EXAMINED THE FACTS AND CIRCUMSTANCES IN DETAIL. 11. ASSESSING OFFICER HAS OBSERVED THAT FOR ARRANGI NG AN ENTRY OF RS.7 LACS, ASSESSEE MUST HAVE SPENT SOME AMOUNT. HE ESTI MATED THE INCURRENCE OF SUCH EXPENSES AT RS.1,05,000 AND THIS IS THE REASON HE MADE AN ADDITION OF RS.8,05,000 AS AGAINST LOAN AMOUNT OF RS. 7 LACS. T HERE IS NO EVIDENCE ON THE RECORD WHICH CAN SUPPORT THE ESTIMATION OF ASSE SSING OFFICER. THE POSSIBILITY OF THIS AMOUNT AS A LOAN WHICH COULD NO T BE PROVED BY THE ASSESSEE AS A GENUINE MAY NOT BE RULED OUT. THEREFO RE, ASSESSING OFFICER OUGHT TO HAVE NOT ESTIMATED A SUM OF RS.1,05,000 FO R ARRIVING AT A CONCLUSION THAT THIS MUCH AMOUNT WAS INCURRED BY TH E ASSESSEE FOR ARRANGING THE ENTRY. HE COULD NOT BRING ANY EVIDENCE ON THE R ECORD IN THIS CONNECTION. THEREFORE, WE DELETE THE ADDITION OF RS.1,05,000. T HE ADDITION OF RS.7 LACS IS CONFIRMED. 12. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PA RTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 17.6.2011. SD/- SD/- ( SHAMIM YAHYA ) ( RAJ PAL YADAV ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: /06/2011 MOHAN LAL 14 COPY FORWARDED TO: 1) APPELLANT 2) RESPONDENT 3) CIT 4) CIT(APPEALS) 5) DR:ITAT ASSISTANT REGISTRAR