ACIT, Ludhiana V. M/s.Kissan Enclave, Malerkotla

ITA 1127/CHANDI/2010

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 57718 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 6 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-03-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 16-02-2012
• Assessment Year: 2007-2008
• Appeal Filed On: 03-09-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N K SAINI
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BEN CH A BEFORE SHRI H.L.KARWA, VP AND SHRI MEHAR SINGH, AM ITA NO. 1127/CHD/2010 ASSESSMENT YEAR 2007-08 A.C.I.T. C-IV, LUDHIANA V KISSAN ENCLAVE JARG CHOWK, MALERKOTLA AAIFK 7784 R (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI N.K. SAINI RESPONDENT BY: SHRI SUDHIR SEHGAL DATE OF HEARING: 16.2.2012 DATE OF PRONOUNCEMENT: 07 .03.2012 ORDER PER MEHAR SINGH, AM THE PRESENT APPEAL FILED BY THE REVENUE, FOR ASSES SMENT YEAR 2007-08, IS DIRECTED AGAINST THE ORDER OF LD. CIT(A )-II, LUDHIANA DATED 29.6.2010 U/S 250(6) OF THE INCOME-TAX ACT (I N SHORT THE ACT). 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1 THAT THE LD. CIT(A)-II HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS. 9,56,000/- MADE BY THE AO ON ACCOUNT OF UNEXPLAINED UNSECURED LOANS. 2. THAT THE LD. CIT(A)-II HAS ERRED IN LAW AND ON F ACTS IN DELETING THE ADDITION OF RS. 9,56,000/- IGNORING TH E FACT THAT ASSESSEE COULD NOT PROVE THE CREDIT WORTHINESS OF T HE CREDITORS AND GENUINENESS OF THE SAID TRANSACTIONS DURING THE COURSE OF ASSESSMENT PROCEEDINGS. 3. THAT THE ORDER OF THE LD. CIT(A)-II BE SET ASIDE AND THAT OF THE AO BE RESTORED. 4. THAT THE APPELLANT CRAVES LEAVE TO ADD OR AMEND ANY GROUND OF APPEAL BEFORE IT IS FINALLY DISPOSED OFF. 3. IN GROUND NOS. 1 & 2 THE REVENUE CONTENDED THAT THE LD. CIT(A) ERRED IN DELETING THE ADDITION OF RS. 9,56,0 00/- MADE BY THE AO ON ACCOUNT OF UNEXPLAINED UNSECURED LOANS. THE LD 'DR' FOR THE REVENUE PLACED RELIANCE ON THE DECISIONS IN THE CAS ES OF SARASWATI 2 TRACTORS CORPORATION V. CIT, 335 ITR 468, ACRON FIN ANCE (P) LTD V. CIT, 238 CTR 344 TO SUPPORT HIS CONTENTIONS. THE L D 'AR' FOR THE ASSESSEE, ON THE OTHER HAND, PLACED RELIANCE ON THE ORDER OF LD. CIT(A) AND CONTENDED THAT THE ASSESSEE HAD DULY EXP LAINED THE SOURCE OF INVESTMENT. 4. WE HAVE PERUSED THE FACTS OF THE CASE AND THE RI VAL SUBMISSIONS INCLUDING THE DECISIONS RELIED ON BY TH E LD 'DR' FOR THE REVENUE. THE ASSESSEE ENGAGED IN THE BUSINESS OF C OLONIZERS AND DEVELOPERS. DURING THE PERIOD UNDER REFERENCE, THE ASSESSEE- APPELLANT IS FOUND TO HAVE RECEIVED LOANS AND ADVAN CES AS PER FOLLOWING DETAILS: A) KULWINDER SINGH RS. 1,82,000/- B) SIKANDER SINGH RS. 1,24,000/- C) NIRBHAI SINGH SANGLA RS. 4,00,000/- D) NIRBHAI SINGH KARAPUR RS. 2,50,000/- E) BANT SINGH S/O KULDEEP SINGH RS. 20,00,000 THE AO AFFIRMED OPPORTUNITY TO THE ASSESSEE TO EXPL AIN THE NATURE AND SOURCE OF SUCH ADVANCES APPEARING IN ITS BOOKS OF ACCOUNT. THE AO FOUND THAT THE ASSESSEE WAS IN A POSITION T O EXPLAIN THE IDENTITY, CREDIT WORTHINESS AND GENUINENESS OF THE TRANSACTION IN THE CASE OF BANT SINGH S/O KULDEEP SINGH WITH PROPER D OCUMENTARY EVIDENCE. HOWEVER, THE ASSESSEE HAS FAILED TO SUBS TANTIATE THE IDENTITY, CREDIT WORTHINESS AND ALSO THE GENUINENES S IN RESPECT OF OTHER FOUR PERSONS MENTIONED ABOVE FROM (A) TO (D). THE AO OBSERVED THAT THE ASSESSEE MERELY FILED CONFIRMATIO N FROM THESE FOUR PARTIES. NO COPY OF BANK ACCOUNT AS REQUISITI ONED VIDE ORDER SHEET DATED 3.12.2009 WAS NOT FILED. SIMILARLY NO DOCUMENTARY EVIDENCE WAS FILED TO EXPLAIN THE NATURE AND SOURCE OF SUCH CREDITORS. IT WAS FURTHER MENTIONED BY THE AO THAT NO INTEREST WAS 3 PAID ON SUCH AMOUNTS OF CREDITORS. CONSEQUENTLY, T HE AO MADE AN ADDITION OF RS. 9,56,000/- AND TREATED THE SAME AS UNDISCLOSED INCOME OF THE ASSESSEE. 5. THE LD. CIT(A) DELETED THE ABOVE ADDITION MADE B Y THE AO. THE FINDINGS OF THE LD. CIT(A) ARE REPRODUCED HERE UNDER: 4 I HAVE CAREFULLY CONSIDERED THE CONTENTION OF TH E LD. COUNSEL FOR THE APPELLANT AND PERUSED THE RELEVANT RECORD. THE AO HAS MADE THIS ADDITION MAINLY ON THE GROUND THAT THE APPELLANT HAD JUST FILED CONFIRMATIONS FROM THESE C REDITORS AND THAT NO OTHER EVIDENCE WAS FILED TO PROVE THE CREDI T WORTHINESS AND THE GENUINENESS OF EH TRANSACTION ETC. HOWEVE R, AS EXPLAINED IN THE WRITTEN SUBMISSIONS OF THE LD. COU NSEL COPIES OF FARDS OF SHRI NIRBHAI SINGH SANGALA, SIKANDER SI NGH KASAPUR, NIRBHAI SINGH KASAPUR, KULWINDER SINGH, GO WARA WERE DULY FILED BEFORE THE AO. THE LD. COUNSEL HAS ALSO EXPLAINED THAT CONFIRMED COPY OF ACCOUNTS OF THESE CREDITORS ALONG WITH THEIR PAN AND COMPLETE ADDRESS WERE ALSO FILED BEFORE THE AO. IN THE FACE OF ABOVE EVIDENCE HAVIN G BEEN FURNISHED BEFORE THE AO. I AGREE WITH THE LD. COUN SEL THAT THERE WAS NO JUSTIFICATION IN HIS MAKING THE ADDITI ON ON THE GROUND THAT COPY OF BANK ACCOUNT ETC. WERE NOT MAD E AVAILABLE TO HIM. ONCE THE APPELLANT HAD DULY MENT IONED PAN OF THE CREDITORS AND GIVEN THEIR COMPLETE ADDRESSES WITHOUT MAKING FURTHER INQUIRIES ETC. ADVERSE INFERENCE COU LD NOT BE DRAWN AGAINST THE APPELLANT IN RESPECT OF THESE CRE DITORS. IN HIS WRITTEN SUBMISSIONS THE LD. COUNSEL HAS PLACED RELIANCE UPON CERTAIN DECISIONS. DECISIONS OF HON'BLE ALLAH ABAD HIGH COURT IN THE CASE OF KAMALJEET SINGH (SUPRA) CAN BE SPECIFICALLY MENTIONED IN THIS REGARD. KEEPING IN VIEW THE EVIDENCE ALREADY BROUGHT ON RECORD BY THE APPELLANT BEFORE THE AO AND WHICH IS ALSO DISCUSSED ABOVE, IN THE LI GHT OF THE RATIO OF THE DECISIONS RELIED UPON BY THE LD. COUNS EL AND PARTICULARLY TAKING NOTE OF THE FACT THAT ALL THE C REDITORS ARE EXISTING INCOME TAX ASSESSEE AND THAT THEIR PAN HAV E BEEN DULY INTIMATED TO THE AO THERE IS NO GROUND FOR SUS TAINING THE ADDITION OF RS. 9,56,000/- MADE BY THE AO TO THE IN COME OF THE APPELLANT. THE ADDITION OF RS. 9,56,000/- MADE BYT EH AO TO THE INCOME OF THE APPELLANT. THE ADDITION OF RS. 9 ,56,000/- AS DISCUSSED ABOVE IS THEREFORE DELETED AND THIS GROUN D OF APPEAL IS ALLOWED. 6. ON CAREFUL APPRECIATION OF THE FACTS OF THE PRES ENT CASE AND THE CASE LAWS RELIED UPON BY THE REVENUE AND THE AS SESSEE AS ALSO THE FINDINGS GIVEN BY THE LD. CIT(A), ON APPRECIATI ON OF SUBMISSIONS, FILED BY THE ASSESSEE. HAVING REGARD TO THE FACTS OF THE CASE, WE FIND THAT THE ASSESSEE HAS DISCHARGED ONUS CAST, U PON HIM U/S 68 OF THE ACT, AS IS EVIDENT FROM FINDINGS OF THE LD. CIT(A) AND THE 4 SUBMISSIONS MADE BEFORE HIM. THE DECISIONS RELIED ON BY THE LD 'DR' FOR THE REVENUE ARE NOT APPLICABLE TO THE FACT SITUATION OF THE CASE BEING FACTUALLY DIFFERENT AND DISTINGUISHABLE. THEREFORE, FINDINGS OF THE LD. CIT(A) ARE UPHELD AND THE APPEA L OF THE REVENUE IS DISMISSED. 7. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. ORDER PRONOUNCED ON 07 .03.2012 SD/- SD/- (H.L. KARWA) (MEHAR SINGH) VICE PRESIDENT ACCOUNTANT MEMBER CHANDIGARH, THE 07.03.2012 SURESH COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR