ACIT, Central Circle-2, Hyderabad V. Smt. Sunitha Sharma, Hyderabad

ITA 1133/HYD/2012

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 66564 (ITAT-HYDERABAD)
• Duration Of Justice: 4 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-12-2012
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 27-07-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: C R PATI; AMISHA S GUPT DRS
• Assessee Lawyers: K A SAI PRASAD
• Keywords: Unexplained cash credit; Unexplained investment; Search and seizure
• Section: 153A; 28

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B', HYDERABAD BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER ITA NO. ASSESS- MENT YEAR APPELLANT RESPONDENT 11 39/HYD/2012 2007 - 08 SHRI S HIV KUMAR SHARMA, HYDERABAD . (PAN AVLPS 2091 K) DY. COMMISSIONER OF INCOME-TAX CENTRAL CIRCLE 2, HYDERABAD. 1130/HYD/2012 2007-08 ASST. COMMISSIONER OF INCOME-TAX CENTRAL CIRCLE 2, HYDERABAD SHRI SHIV KUMAR SHARMA, HYDERABAD . (PAN AVLPS 2091 ) 1133/HYD/2012 2007-08 ASST. COMMISSIONER OF INCOME-TAX CENTRAL CIRCLE 2, HYDERABAD SMT. SUNITHA SHARMA, HYDERABAD . (PAN AVRPS 1565 L) 1142/HYD/2012 2007-08 SMT. SUNITHA SHARMA, HYDERABAD . (PAN AVRPS 1565 L) DY. COMMISSIONER OF INCOME-TAX CENTRAL CIRCLE 2, HYDERABAD 1140/HYD/2012 2007-08 SMT. RASHMI SHARMA, HYDERABAD . (PAN AZKPS 1254 R) DY. COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE 2, HYDERABAD 1131/HYD/2012 2007-08 ASST. COMMISSIONER OF INCOME-TAX CENTRAL CIRCLE 2, HYDERABAD SMT. RASHMI SHARMA, HYDERABAD . (PAN AZKPS 1254 R) 1141/HYD/2012 2007-08 SHRI MANOJ KUMAR SHARMA, HYDERABAD. ( PAN - AVRPS 1569 G) ASST. COMMISSIONER OF INCOME-TAX CENTRAL CIRCLE 2, HYDERABAD 1132/HYD/2012 2007 - 08 ASST. COMMISSIONER OF INCOME-TAX CENTRAL CIRCLE 2, HYDERABAD SHRI MANOJ KUMAR SHARMA, HYDERABAD. (PAN AVRPS 1569 G) ITA NO.1139/HYD/2012 & SEVEN OTHERS SHRI SHIV KUMAR SHARMA & 3 ORS, HYDERABAD . 2 AS SSESSEE S BY : S HRI K.A.SAIPRASAD DEPARTMENT BY : S HRI C.R.PATI & SMT. AMISHA S.GUPT, DRS DATE OF HEARING 6 . 11 .2012 DATE OF PRONOUNCEMENT 7.12.2012 O R D E R PER SAKTIJIT DEY, JUDICIAL MEMBER: THERE ARE FOUR CROSS-APPEALS IN THIS BUNCH. HENC E, THEY ARE EIGHT IN ALL. THEY ARE DIRECTED AGAINST FOUR ORDERS OF TH E COMMISSIONER OF INCOME- TAX(APPEALS) I, HYDERABAD DATED 31.5.2012 FOR THE A SSESSMENT YEAR 2007- 08. SINCE COMMON ISSUES ARE INVOLVED, THESE APPEAL S ARE BEING DISPOSED OFF WITH THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. SHRI MANOJ KUMAR SHARMA ASSESSEES APPEAL ITA NO.1141/HYD/2012 : ASSESSMENT YEAR 2007-08 2. GROUND NO.1 IN THIS APPEAL RELATES TO ADDITION OF RS.2,52,000 UNDER S.69 OF THE ACT. 3. BRIEFLY THE FACTS ARE, THE ASSESSEE IS AN INDIV IDUAL. SEARCH AND SEIZURE OPERATION UNDER S.132 OF THE ACT WAS CONDUC TED IN THE CASE OF RADHESHYAM SHARMA AND OTHERS ON 29.4.2008. CONSEQUE NTLY, A SEARCH OPERATION WAS ALSO CARRIED OUT IN THE RESIDENCE OF THE ASSESSEE. IN THE COURSE OF THE SEARCH OPERATION, INCRIMINATING MATER IALS RELATING TO THE ASSESSEE AND HIS FAMILY MEMBERS WERE FOUND AND SEIZ ED. AS A RESULT OF THE SEARCH ACTION, NOTICE U/S. 153A OF THE ACT WAS ISSU ED TO THE ASSESSEE CALLING FOR RETURN OF INCOME. AS THE ASSESSEE DID NOT SUBMI T HIS RETURN OF INCOME, A SHOW CAUSE NOTICE WAS ISSUED TO HIM. IN RESPONSE T O THE SHOW-CAUSE NOTICE, ITA NO.1139/HYD/2012 & SEVEN OTHERS SHRI SHIV KUMAR SHARMA & 3 ORS, HYDERABAD . 3 THE ASSESSEE FINALLY FILED HIS RETURN OF INCOME ON 11.8.2010, DECLARING TOTAL INCOME OF RS.1,80,585. 4. IN THE COURSE OF THE ASSESSMENT PROCEEDING, WH ILE EXAMINING THE REGISTERED AGREEMENT OF SALE DATED 2.9.2006 FOUND A ND SEIZED FROM THE ASSESSEE, IT WAS NOTICED BY THE ASSESSING OFFICER T HAT THE ASSESSEE ALONGWITH HIS FAMILY MEMBERS HAVE PURCHASED A PROPERTY ADMEAS URING 844 SQ. YARDS AT D.NO.4-1-234, HANUMAN TEKDI, TROOP BAZAR, HYDERA BAD FOR A TOTAL SALE CONSIDERATION OF RS.1,26,00,000. WHEN THE ASSESSING OFFICER ASKED THE ASSESSEE TO EXPLAIN THE SOURCE OF INVESTMENT OF RS. 1.26 CRORES, THE ASSESSEE IN HIS REPLY SUBMITTED THAT THE PROPERTY WAS PURCHA SED FOR AN ACTUAL CONSIDERATION OF RS.1,15,92,000 VIDE REGISTERED SAL E DEED DATED 17.11.2006 AND NOT FOR RS.1.26 CRORES AS MENTIONED IN THE AGRE EMENT OF SALE. 5. THE ASSESSING OFFICER ISSUED SUMMONS TO THE VEN DORS ASKING THEM TO APPEAR BEFORE HIM AND FURNISH DETAILS WITH REGARD TO THE ACTUAL CONSIDERATION RECEIVED TOWARDS SALE OF THE PROPERTY , BANK ACCOUNT IN WHICH CONSIDERATION WAS DEPOSITED AND ALSO THEIR ASSESSME NT PARTICULARS. THE CONCERNED VENDORS, DUE TO THEIR OLD AGE, EXPRESSED THEIR INABILITY TO APPEAR IN PERSON. HOWEVER, THEY FURNISHED THE REQUISITE INFO RMATION IN A WRITTEN REPLY, THROUGH THEIR AUTHORISED REPRESENTATIVE. IN THE AFO RESAID WRITTEN REPLY, WHICH HAS BEEN EXTRACTED IN THE ASSESSMENT ORDER, THE VEN DOR ADMITTED OF HAVING RECEIVED RS.1,26,00,000 TOWARDS SALE CONSIDERATION, THOUGH ACCORDING TO THE REGISTERED SALE DEED, THE TOTAL CONSIDERATION IS RS .1,15,92,000. IT WAS EXPLAINED IN THE WRITTEN REPLY THAT THE DIFFERENTIA L AMOUNT OF RS.10,08,000 WAS PAID IN CASH BY THE PURCHASERS OF THE PROPERTY AND THE SAID AMOUNT WAS CONTRIBUTED BY ALL THE FOUR CO-OWNERS TO SHRI RAMAV ATAR SINGH, WHO IS FINANCIALLY WEAK. IN THIS CONTEXT, THE BANK ACCO UNT OF SHRI RAM AVATAR SINGH HELD IN PUNJAB NATIONAL BANK, HYDERABAD WAS E XAMINED, WHERE THE FOLLOWING CASH DEPOSITS WERE FOUND- ITA NO.1139/HYD/2012 & SEVEN OTHERS SHRI SHIV KUMAR SHARMA & 3 ORS, HYDERABAD . 4 4.9.2006 RS.3,50,000 15.10.2006 RS. 50,000 23.11.2006 RS.1,50,000 EXPLAINING THE ABOVE CASH DEPOSITS, SHRI RAM AVATAR SINGH, IN HIS LETTER DATED 19.6.2008, STATED THAT THE DEPOSITS WERE MADE OUT OF THE AMOUNT OF RS.10,08,000 RECEIVED FROM HIS BROTHERS, OUT OF THE SALE PROCEEDS OF THE PROPERTY IN QUESTION. THE ASSESSING OFFICER ALSO EX AMINED SHRI MANOJ KUMAR SHARMA BY CONFRONTING THE AFORESAID FACT TO HIM. S HRI MANOJ KUMAR SHARMA HOWEVER, DENIED PAYMENT OF RS.1,26,00,000 TOWARDS S ALE CONSIDERATION AND STATED THAT THE AMOUNT MENTIONED IN THE REGISTERED SALE DEED WAS ACTUALLY PAID TOWARDS SALE CONSIDERATION, I.E. RS.1,15,92,0 00, THE ASSESSING OFFICER, HOWEVER, DISBELIEVED THE CLAIM OF THE ASSESSEE IN V IEW OF THE REGISTERED AGREEMENT TO SELL SEIZED FROM THE HOUSE OF THE ASSE SSEE, COUPLED WITH THE FACT THAT THE VENDOR IN THEIR REPLY CATEGORICALLY S TATED OF HAVING RECEIVED THE AMOUNT OF RS.1,26,00,000 AS MENTIONED IN THE AGREEM ENT TO SELL TOWARDS SALE CONSIDERATION OF THE PROPERTY. HE THEREFORE, T REATED THE DIFFERENTIAL AMOUNT OF RS.10,08,000 AS UNEXPLAINED INVESTMENT AN D QUANTIFIED THE ASSESSEES 1/4 TH SHARE AT RS.2,52,000, AND ADDED IT TO THE TOTAL IN COME. THE ASSESSEE BEING AGGRIEVED OF THE AFORESAID ADDITION, PREFERRED APPEAL BEFORE THE CIT(A). 6. THE CIT(A), AFTER CONSIDERING THE SUBMISSIONS M ADE BY THE ASSESSEE, SUSTAINED THE ADDITION IN VIEW OF THE STA TEMENT MADE BY THE VENDOR BEFORE THE ASSESSING OFFICER, CONFIRMING THE FACT THAT THEY HAVE RECEIVED THE AMOUNT OF RS.1,26,00,000 AS MENTIONED IN THE AGREEMENT TO SELL. THE CIT(A) FURTHER OBSERVED THAT THE ASSESS EE HAS NOT BEEN ABLE TO SUBSTANTIATE ITS CLAIM BY PRODUCING ANY CORROBORATI VE EVIDENCE. AGGRIEVED BY THE ORDER OF THE CIT(A), ASSESSEE IS IN APPEAL BEFO RE US ON THIS ISSUE. ITA NO.1139/HYD/2012 & SEVEN OTHERS SHRI SHIV KUMAR SHARMA & 3 ORS, HYDERABAD . 5 7. THE LEARNED AUTHORISED REPRESENTATIVE FOR THE A SSESSEE SUBMITTED BEFORE US THAT THOUGH THE AMOUNT OF RS.1, 26,00,000 IS MENTIONED IN THE AGREEMENT TO SELL, WHICH WAS SEIZED FROM THE ASSESSEE, THE AMOUNT MENTIONED IN THE REGISTERED SALE DEED HAS TO BE TAK EN AS THE ACTUAL AMOUNT PAID TOWARDS SALE CONSIDERATION OF THE PROPERTY, AS THE REGISTERING AUTHORITY HAS ACCEPTED THE AFORESAID VALUATION. THE LEARNED AUTHORISED REPRESENTATIVE FOR THE ASSESSEE FURTHER SUBMITTED THAT ADDITION CA NNOT BE MADE ONLY ON THE BASIS OF THE STATEMENT OF THE VENDOR OF THE PROPERT Y. 8. LEARNED DEPARTMENTAL REPRESENTATIVE, ON THE CO NTRARY SUBMITTED THAT WHEN THE AGREEMENT TO SELL WAS SEIZED FROM THE POSSESSION OF THE ASSESSEE, IT GIVES RISE TO A VALID PRESUMPTION. TH AT APART, THE VENDORS OF THE PROPERTY HAVE ALSO AFFIRMED HAVING RECEIVED THE AMO UNT MENTIONED IN THE REGISTERED AGREEMENT OF SALE. IT IS THEREFORE, CON TENDED BY THE LEARNED DEPARTMENTAL REPRESENTATIVE THAT THE ADDITION SUSTA INED BY THE CIT(A) IS IN ORDER. 9. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PE RUSED THE MATERIAL AVAILABLE ON RECORD. UNDISPUTEDLY, THE AGR EEMENT TO SELL OF THE PROPERTY IN QUESTION WAS SEIZED FROM THE ASSESSEE, IN THE COURSE OF SEARCH AND SEIZURE OPERATION UNDER S.132 OF THE ACT. IT I S ALSO A FACT THAT THE ASSESSEE HAS EXECUTED THE SAID DOCUMENT WITH THE VE NDOR AND THE SAID AGREEMENT TO SELL IS ALSO REGISTERED WITH THE REGIS TERING AUTHORITY. AS PER THE AFORESAID AGREEMENT TO SELL, THE PROPERTY WAS SOLD FOR A CONSIDERATION OF RS.1,26,00,000. THE CO-OWNERS OF THE PROPERTY IN Q UESTION HAVE ALSO CATEGORICALLY STATED BEFORE THE ASSESSING OFFICER I N THE COURSE OF ASSESSMENT PROCEEDING THAT THEY HAVE RECEIVED SALE CONSIDERATI ON OF RS.1,26,00,000, THOUGH THE REGISTERED SALE DEED BEARS THE AMOUNT OF RS.1,15,92,000. THE WRITTEN STATEMENT OF ONE OF THE CO-SHARERS FILED BE FORE THE ASSESSING OFFICER, ITA NO.1139/HYD/2012 & SEVEN OTHERS SHRI SHIV KUMAR SHARMA & 3 ORS, HYDERABAD . 6 ALONGWITH HIS BANK ACCOUNT ALSO CORROBORATES WITH T HE FACT THAT THE DIFFERENTIAL AMOUNT OF RS.10,08,000 WAS PAID IN CAS H BY THE ASSESSEE AND HIS FAMILY MEMBERS TO THE VENDORS OF THE PROPERTY. IN VIEW OF SUCH PRIMA FACIE EVIDENCE, THE CONTENTION OF THE ASSESSEE THAT THE A MOUNT MENTIONED IN THE SALE DEED IS THE ACTUAL AMOUNT PAID CANNOT BE ACCEP TED. IN THE AFORESAID VIEW OF THE MATTER, WE FIND NO REASON TO INTERFERE WITH THE ORDERS OF THE LOWER AUTHORITIES ON THIS ISSUE. ASSESSEES GROUNDS ON T HIS ISSUE ARE ACCORDINGLY REJECTED. 10. THE ASSESSEES GRIEVANCE IN GROUNDS NO.2 AND 3 IS AGAINST THE ADDITION OF RS.4,09,000, SUSTAINED BY THE CIT(A), A GAINST THE AGGREGATE ADDITION OF RS.5,09,000 MADE BY THE ASSESSING OFFIC ER. 11. IN THE COURSE OF THE ASSESSMENT PROCEEDINGS, W HILE EXAMINING THE SOURCE OF INVESTMENT IN THE PURCHASE OF THE PROPERT Y BY THE ASSESSEE AND FAMILY MEMBERS, THE ASSESSEE STATED THAT HIS SHARE OF INVESTMENT IN THE PURCHASE OF PROPERTY IS RS.32,00,900, WHICH WAS EXP LAINED IN THE FOLLOWING MANNER- ___________________________________________ ______ 1. OWN FUND OUT OF EARLIER SAVINGS RS.5,00,900 2, DRAWINGS FROM RMR PEARLS RS.8,50,000 3. CITI BANK LOAN RS.4,50,000 4, HAND-LOAN FROM MRS.BADANTHI DEVI RS.6,00,000 5, HAND-LOAN FROM MRS.HEMA SONI RS.5,00,000 6. HAND-LOAN FROM MRS.SUMATI RAMA BAI RS.3,00,000 TOTAL RS.32,00,900 12. SO FAR AS THE AMOUNT OF RS.5,00,900 IS CONCER NED, THE ASSESSEE EXPLAINED THAT THE AMOUNT WAS OUT OF ACCUMULATED SA VINGS. THE ASSESSING ITA NO.1139/HYD/2012 & SEVEN OTHERS SHRI SHIV KUMAR SHARMA & 3 ORS, HYDERABAD . 7 OFFICER HOWEVER, AFTER EXAMINING THE RETURN OF INCO ME FILED BY THE ASSESSEE FOR THE ASSESSMENT YEAR 2003-04 TO 2005-06 FOUND TH AT FOR THE THREE ASSESSMENT YEARS, THE ASSESSEE DECLARED AN INCOME O F RS.3,26,221 ONLY. THE ASSESSING OFFICER THEREFORE, CAME TO A CONCLUSI ON THAT CONSIDERING THE LIFESTYLE OF THE ASSESSEE AND HIS FAMILY, THE EXPEN DITURE REQUIRED TO BE INCURRED FOR MAINTAINING THE FAMILY, THE ASSESSEE C OULD NOT HAVE ANY ACCUMULATED SAVINGS OF THE AMOUNT STATED TO HAVE BE EN AVAILABLE WITH HIM. THE ASSESSING OFFICER THEREFORE, MADE ADDITION OF T HE ENTIRE AMOUNT OF RS.5,00,900. 13. ON APPEAL, THE CIT(A), AFTER TAKING INTO CONSI DERATION THE INCOME DECLARED BY THE ASSESSEE IN HIS RETURN OF INCOME FR OM THE ASSESSMENT YEAR 2003-04 TO 2005-06, AGREED WITH THE ASSESSING OFFIC ER THAT THE ASSESSEE COULD NOT HAVE SAVED THE AMOUNT OF RS.5,00,900 CONS IDERING THE INCOME DECLARED BY HIM IN THE EARLIER ASSESSMENT YEARS. T HE CIT(A) HOWEVER, GIVING BENEFIT OF SAVINGS TO THE EXTENT OF RS.1,00,000, SU STAINED THE BALANCE ADDITION OF RS.4,00,900. STILL AGGRIEVED, ASSESSE E IS IN APPEAL BEFORE US. 14. THE LEARNED AUTHORISED REPRESENTATIVE FOR THE ASSESSEE, REITERATING THE CONTENTIONS TAKEN BEFORE THE CIT(A) , SUBMITTED BEFORE US THAT THE CASH-FLOW STATEMENTS OF THE ASSESSEE CLEARLY ES TABLISHES THE FACT THAT THE ASSESSEE WAS HAVING SUFFICIENT ACCUMULATED SAVINGS TO MAKE THE INVESTMENT. IT WAS FURTHER SUBMITTED THAT THE ASSESSEE, IN THE ASSESSMENT YEAR 2004-05 AND 2005-06, HAS OFFERED ADDITIONAL INCOME OF RS.15 ,00,000 AND RS.3,50,000 RESPECTIVELY, WHICH HAVE NOT BEEN PROPERLY CONSIDER ED WHILE SUSTAINING THE IMPUGNED ADDITION. IN THIS REGARD, THE LEARNED A UTHORISED REPRESENTATIVE FOR THE ASSESSEE REFERRED TO THE CASH FLOW STATEMEN TS, WHICH ARE AT PAGES 1 AND 2 OF THE PAPER-BOOK. ITA NO.1139/HYD/2012 & SEVEN OTHERS SHRI SHIV KUMAR SHARMA & 3 ORS, HYDERABAD . 8 15. THE LEARNED DEPARTMENTAL REPRESENTATIVE ON THE OTHER HAND, STRONGLY SUPPORTED THE ORDERS OF THE LOWER AUTHORIT IES. 16. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSE D THE MATERIALS ON RECORD. IT IS SEEN FROM THE RECORD THAT THE ASSE SSING OFFICER HAS DISBELIEVED THE CLAIM OF THE ASSESSEE ENTIRELY. HO WEVER, THE CIT(A) AFTER CONSIDERING THE EXPLANATION SUBMITTED BY THE ASSESS EE AND ALSO KEEPING IN VIEW THE FACT THAT POSSIBILITY OF HAVING MADE SOME AMOUNT OF SAVINGS OUT OF HIS INCOME EARNED IN THE EARLIER ASSESSMENT YEARS, HAS ALLOWED A RELIEF OF RS.1 LAKH. THE ASSESSEE HAS VIRTUALLY MADE THE SAM E CONTENTIONS AS WERE RAISED BEFORE THE CIT(A), ON CONSIDERATION OF WHICH THE CIT(A) HAS GIVEN PARTIAL RELIEF. CONSIDERING THE CASH FLOW STATEMEN T AND ADDITIONAL INCOMES OFFERED IN THE TWO IMMEDIATELY PRECEDING YEARS, AND TOTALITY OF FACTS AND CIRCUMSTANCES OF THE CASE, WE FEEL THAT THE RELIEF GRANTED BY THE CIT(A) IS VERY LOW, AND BENEFIT OF SAVINGS TO THE EXTENT OF R S.2 LAKHS WOULD MEET THE ENDS OF JUSTICE. WE ACCORDINGLY RESTRICT THE ADDI TION MADE BY THE ASSESSING OFFICER TO RS.3,00,900 AS AGAINST RS.4,00,900 SUSTA INED BY THE CIT(A). ASSESSEES GROUNDS ON THIS ISSUE ARE PARTLY ALLOWED . 17. ASSESSEES GRIEVANCE IN GROUND NO.4 IS AGAINST THE ADDITION OF RS.3,00,000, REPRESENTING HAND-LOAN FROM SMT.RAMA BAI, SUSTAINED BY THE CIT(A) OUT OF THE ADDITIONS MADE BY THE ASSESSING O FFICER UNDER S.68 OF THE ACT. 18. THE ASSESSEE WHILE EXPLAINING THE LOAN, STATED BEFORE THE ASSESSING OFFICER THAT SMT.RAMA BAI IS THE MOTHER O F THE ASSESSEE. SINCE THE ASSESSEE WAS IN NEED OF MONEY, HIS MOTHER SOLD GOLD ORNAMENTS BELONGING TO HER AND OUT OF THE SALE PROCEEDS, SHE HAS GIVEN THE AMOUNT OF RS.3 LAKHS TO THE ASSESSEE. THE ASSESSEE ALSO PROD UCED BANK ACCOUNT COPY OF SMT.RAMA BAI, MAINTAINED WITH A.P.MAHESH CO-OPER ATIVE URBAN BANK LTD. ITA NO.1139/HYD/2012 & SEVEN OTHERS SHRI SHIV KUMAR SHARMA & 3 ORS, HYDERABAD . 9 THE ASSESSING OFFICER ON EXAMINATION OF THE BANK AC COUNT COPY NOTICED, THAT A SUM OF RS.3,85,000 AND RS.1,15,000 WERE CREDITED INTO HER BANK ACCOUNT THROUGH CHEQUES ON 13.11.2006 AND 14.11.2006 RESPEC TIVELY AND ON THE SAME DAY, THE AMOUNT OF RS.3 LAKH WAS ADVANCED TO T HE ASSESSEE. THE ASSESSING OFFICER FURTHER, NOTICED THAT SMT.RAMA BA I HAD ALSO ADVANCED SIMILAR AMOUNT TO SHRI SHIV KUMAR SHARMA AND SMT. S UNITHA SHARMA. THE ASSESSING OFFICER DISBELIEVING THE CREDIT WORTHINES S OF SMT.RAMA BAI, CAME TO A CONCLUSION THAT SHE WAS NOT HAVING THE CAPACITY T O PAY THE AMOUNT OF RS.3 LAKH TO THE ASSESSEE. HE THEREFORE, ADDED THE AMO UNT OF RS.3 LAKH UNDER S.68 OF THE ACT. THE CIT(A) ALSO CONCURRED WITH T HE FINDINGS OF THE ASSESSING OFFICER IN THIS RESPECT AND SUSTAINED THE ENTIRE ADDITION OF RS.3 LAKHS. AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE US ON THIS ISSUE. 19. THE LEARNED AUTHORISED REPRESENTATIVE FOR THE ASSESSEE SUBMITTED BEFORE US THAT THE ASSESSEES MOTHER SMT. RAMA BAI WAS HAVING GOLD ORNAMENTS WITH HER. SINCE THE ASSESSEE AND OT HER FAMILY MEMBERS WERE IN NEED OF MONEY FOR THE PURCHASE OF THE PROPERTY, THE ASSESSEE/S MOTHER SMT.RAMA BAI, SOLD HER PERSONAL GOLD JEWELLERY AND OUT OF THE SALE PROCEEDS RECEIVED, ADVANCED THE AMOUNT OF RS.3 LAKHS TO THE ASSESSEE. IN THIS RESPECT, THE ASSESSEE INVITED OUR ATTENTION TO THE PURCHASE VOUCHER AT PAGE 5 AND 6 OF THE PAPER-BOOK, IN SUPPORT OF THE CLAIM TH AT THE GOLD ORNAMENTS WERE SOLD BY SMT.RAMA BAI. THE LEARNED AUTHORISED REPRESENTATIVE FOR THE ASSESSEE SUBMITTED THAT THE GOLD ORNAMENTS WERE SOL D TO A REPUTED DEALER AND HENCE, THERE IS NO JUSTIFICATION TO DOUBT THE F ACT OF SALE OF GOLD ORNAMENTS. 20. THE LEARNED DEPARTMENTAL REPRESENTATIVE STRONG LY SUPPORTED THE ORDERS OF THE CIT(A). ITA NO.1139/HYD/2012 & SEVEN OTHERS SHRI SHIV KUMAR SHARMA & 3 ORS, HYDERABAD . 10 21. WE HAVE CONSIDERED THE RIVAL SUBMISSION AND PE RUSED THE MATERIAL ON RECORD. IT IS THE CLAIM OF THE ASSESSEE THAT HIS MOTHER SMT. RAMA BAI HAS ADVANCED THE AMOUNT OF RS.3 LAKHS OUT OF TH E SALE PROCEEDS OF HER GOLD ORNAMENTS, WHICH SHE SOLD TO A REPUTED JEWELLE RY SHOP. IT IS SEEN FROM THE RECEIPTS SUBMITTED BY THE ASSESSEE BEFORE US TH AT THE TOTAL AMOUNT OF RS.5 LAKHS HAS BEEN RECEIVED TOWARDS THE ALLEGED SA LE OF GOLD ORNAMENTS BY SMT.RAMA BAI. THE BANK ACCOUNT COPY SUBMITTED BEFO RE THE ASSESSING OFFICER REVEALED CREDIT OF AMOUNTS OF RS.3,85,000 A ND RS.1,15,000 RESPECTIVELY BY TWO DIFFERENT CHEQUES ON 13.11.2006 AND 14.11.2006. IMMEDIATELY AFTER THESE TWO DEPOSITS, AMOUNT OF RS. 3 LAKH HAS BEEN PAID TO THE ASSESSEE THROUGH ACCOUNT PAYEE CHEQUE BY SMT. R AMA BAI. THE RECEIPTS TOWARDS SALE OF GOLD ORNAMENTS PRODUCED BEFORE US, WHICH ARE AT PAGES 5 AND 6 OF THE PAPER-BOOK ALSO REVEAL THAT SMT.RAMABAI HA S RECEIVED AN AMOUNT OF RS.1,15,000 AND RS.3, 85,000 THROUGH ACCOUNT PAYEE CHEQUES ISSUED BY THE M/S. M.BAJRANGLAL SONS TOWARDS PURCHASE OF GOLD OR NAMENTS AND JEWELLERY. SINCE THE IDENTITY AND OTHER DETAILS OF THE PURCHAS ER OF THE GOLD ORNAMENTS ARE AVAILABLE IN THE RECEIPT, AND WHEREIN IT HAS AL SO BEEN MENTIONED THAT THE CONSIDERATION TOWARDS PURCHASE OF THE GOLD ORNAMENT S WAS PAID THROUGH ACCOUNT PAYEE CHEQUES, WHICH HAS BEEN CORROBORATED BY THE BANK ACCOUNT OF SMT.RAMA BAI, IN OUR VIEW, BEFORE MAKING ANY ADDITI ON PROPER ENQUIRY SHOULD HAVE BEEN CONDUCTED BY THE LOWER AUTHORITIES, TO FI ND OUT WHETHER ACTUALLY THE GOLD ORNAMENTS WERE SOLD BY SMT. RAMA BAI OR NO T. THE ASSESSEE AS ALSO REQUIRED TO PROVE THAT SMT RAM ABAI WAS ACTUALLY HOLDING THAT MUCH AMOUNT OF GOLD ORNAMENT.SINCE PRO PER ENQUIRY HAS NOT BEEN MADE WITH REGARD TO THIS ASPECT, WE CONSIDER I T PROPER TO REMIT THIS ISSUE TO THE FILE OF THE ASSESSING OFFICER WHO SHAL L VERIFY THE MATTER, BY CONDUCTING NECESSARY ENQUIRY, AND IF NECESSARY BY S UMMONING THE PURCHASER OF THE GOLD ORNAMENTS, WHOSE IDENTITY AND ADDRESS I S AVAILABLE ON RECORD. THE ASSESSING OFFICER SHALL ACCORDINGLY REDECIDE TH E ISSUE IN ACCORDANCE WITH ITA NO.1139/HYD/2012 & SEVEN OTHERS SHRI SHIV KUMAR SHARMA & 3 ORS, HYDERABAD . 11 LAW, AND AFTER GIVING REASONABLE OPPORTUNITY OF HEA RING TO THE ASSESSEE, DULY CONFRONTING HIM WITH THE MATERIAL THAT HE MAY GATHE R IN THE COURSE OF ENQUIRY THAT HE MAY CONDUCT IN COMPLIANCE WITH OUR DIRECTIO NS HEREINABOVE. 22. IN THE RESULT, ASSESSEES APPEAL ITA NO.1141/H YD/2012 IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. REVENUES APPEAL ITA NO.1132/HYD/2012 : ASSESSMENT YEAR 2007-08 23. THE ONLY ISSUE INVOLVED IN THIS APPEAL OF THE REVENUE IS WITH REGARD TO THE RELIEF GRANTED BY THE CIT(A) OUT OF T HE ADDITIONS MADE BY THE ASSESSING OFFICER UNDER S.68 OF THE ACT. THE CIT(A ) BY THE IMPUGNED ORDER HAS DELETED THE FOLLOWING CASH CREDIT ADDITIONS MAD E BY THE ASSESSING OFFICER UNDER S.68 OF THE ACT, AND THE ACTION OF THE CIT(A) IN THIS BEHALF HAS GIVEN RISE TO THE PRESENT APPEAL BY THE REVENUE- (A) SHRI T.JAIPRAKASH RS.6,00,000 (B) SMT. HEMA SONI RS.5,00,000 24. FACTS OF THE CASE IN RELATION TO THE ABOVE TWO ITEMS OF ADDITION ARE THAT IN THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE WHILE EXPLAINING THE SOURCE OF HIS SHARE OF INVESTMENT IN THE PURCHASE OF THE PROPERTY, STATED TO HAVE TAKEN THE AFORESAID TWO LO ANS. IN SUPPORT OF HIS CLAIM OF LOAN TAKEN FROM SHRI JAIPRAKASH, THE ASSES SEE SUBMITTED THE RETURN OF INCOME FILED BY SHRI JAIPRAKASH AND ALSO THE BAN K ACCOUNT COPY OF SHRI JAIPRAKASH. FROM THE BANK ACCOUNT COPY, THE ASSESS ING OFFICER NOTICED THAT AN AMOUNT OF RS.6 LAKHS WAS DEPOSITED INTO HIS ACCO UNT ON 17.6.2006, AND ON 19.6.2006, A CHEQUE WAS DRAWN IN FAVOUR OF THE ASSE SSEE. THE ASSESSING OFFICER FURTHER NOTICED THAT THERE IS NO OTHER DEPO SIT OF SUCH MAGNITUDE IN THE BANK ACCOUNT. HE THEREFORE, CAME TO A CONCLUSION T HAT SHRI JAIPRAKASH IS NOT ITA NO.1139/HYD/2012 & SEVEN OTHERS SHRI SHIV KUMAR SHARMA & 3 ORS, HYDERABAD . 12 HAVING THE CREDIT WORTHINESS TO ADVANCE SUCH A HUGE AMOUNT OF INTEREST-FREE UNSECURED LOAN TO THE ASSESSEE. HE THEREFORE, ADD ED THE AMOUNT OF RS.6 LAKHS AS UNEXPLAINED CREDIT UNDER S.68 OF THE ACT. ON APPEAL, THE CIT(A) DELETED THE ADDITION MADE BY THE ASSESSING OFFICER, AFTER CONSIDERING THE FACT THAT THE SAID CREDITOR, SHRI JAIPRAKASH, IN THE STA TEMENT ACCOMPANYING HIS RETURN OF INCOME FILED FOR THE ASSESSMENT YEAR 200 7-08, HAS NOT ONLY REFLECTED THE ADVANCEMENT OF LOAN OF RS.6 LAKH TO T HE ASSESSEE, BUT HE HAS ALSO OFFERED INTEREST INCOME OF RS.24,750 CHARGED BY HIM ON THAT LOAN AMOUNT, TO TAX. THE CIT(A) FURTHER FOUND THAT THE ENTIRE LOAN AMOUNT HAS BEEN REPAID BY THE ASSESSEE THROUGH AN ACCOUNT PAYE E CHEQUE TO THE SAID LOAN CREDITOR. THE CIT(A) ACCORDINGLY DELETED THI S ADDITION OF RS.6 LAKHS. 25. SO FAR AS THE LOAN CLAIMED TO HAVE BEEN TAKEN FROM SMT.HEMA SONI OF RS.5 LAKHS IS CONCERNED, THE ASSESSEE, IN S UPPORT OF THE SAID CLAIM, SUBMITTED THE INCOME-TAX RETURN OF THE CREDITOR FIL ED FOR THE RELEVANT ASSESSMENT YEAR AND ALSO THE BANK ACCOUNT COPY, WHI CH REFLECTED THE ADVANCEMENT OF LOAN OF RS.5 LAKH TO THE ASSESSEE. THE ASSESSING OFFICER NOTICED THAT AN AMOUNT OF RS.10 LAKHS WAS CREDITED IN THE ACCOUNT OF THE SAID CREDITOR ON 9.11.2006 AND ON THE NEXT DAY, I.E. ON 10.11.2006 THE SAID CREDITOR, SMT.HEMA SONI ADVANCED LOAN OF RS.5 LAKHS EACH, TO THE ASSESSEE AND HIS BROTHER SHRI SHIV KUMAR SHARMA. THE ASSE SSING OFFICER THEREFORE, CAME TO A CONCLUSION THAT THE SAID CREDITOR WAS NOT HAVING SUFFICIENT SOURCE OF INCOME TO ADVANCE THE AMOUNT TO THE ASSESSEE. HE ACCORDINGLY ADDED THE AMOUNT OF RS.5 LAKHS TO THE TOTAL INCOME OF THE ASS ESSEE UNDER S.68 OF THE ACT. ON APPEAL, THE CIT(A) DELETED THE ADDITION MA DE BY THE ASSESSING OFFICER, AFTER CONSIDERING THE FACT THAT THE SAID C REDITOR, SMT. HEMA SONI, IN THE STATEMENT ACCOMPANYING HER RETURN OF INCOME FIL ED FOR THE ASSESSMENT YEAR 2007-08, HAS REFLECTED THE ADVANCEMENT OF LOAN OF RS.5 LAKH TO THE ASSESSEE. HE FURTHER NOTED THAT THE SAID CREDITOR HAS ALSO CHARGED INTEREST ITA NO.1139/HYD/2012 & SEVEN OTHERS SHRI SHIV KUMAR SHARMA & 3 ORS, HYDERABAD . 13 ON THE LOAN ADVANCED. THE CIT(A) FURTHER FOUND THA T THE ENTIRE LOAN AMOUNT ALONGWITH INTEREST HAS BEEN REPAID BY THE ASSESSEE THROUGH AN ACCOUNT PAYEE CHEQUE NO.788120 DRAWN ON VIJAYA BANK, BASHEERBAGH BR. FOR AN AMOUNT OF RS.5,62,388, TO THE SAID LOAN CREDITOR. THE CIT(A) , OBSERVING THAT THE LOAN CREDITOR, BEING AN INCOME-TAX ASSESSEE AND HAVING D ISCLOSED THE FACT OF LOAN IN THE RETURN FILED, THE BETTER COURSE OF ACTION AV AILABLE TO THE DEPARTMENT IS TO PROCEED AGAINST THE CREDITOR TO SUBSTANTIATE THE SOURCES OF CREDIT APPEARING IN HER ACCOUNT, DELETED THE ADDITION. 26. THE LEARNED DEPARTMENTAL REPRESENTATIVE, WITH REGARD TO THSE TWO CREDITS DELETED BY THE CIT(A), SUBMITTED BEFORE US THAT THE ASSESSEE HAVING NOT PROVED THE CREDIT-WORTHINESS OF THE LOAN CREDITORS, THE ASSESSING OFFICER WAS JUSTIFIED IN MAKING THE ADDITION UNDER S.68 OF THE ACT. THE LEARNED AUTHORISED REPRESENTATIVE FOR THE ASSESSEE , ON THE OTHER HAND, SUBMITTED THAT THE BALANCE SHEET AND THE RETURNS OF THE CREDITORS SUBMITTED BEFORE THE ASSESSING OFFICER, CLEARLY ESTABLISH THE GENUINENESS OF THE TRANSACTIONS, AND THE CIT(A) WAS JUSTIFIED IN GRANT ING RELIEF TO THE ASSESSEE, BY DELETING THESE TO ADDITIONS. HE RELIED ON THE D ECISION OF THE TRIBUNAL(THIRD MEMBER) IN THE CASE OF SMT. MADHU RAITANI V.S. ACIT (45 SOT 231)-GAU AND THE DECISION OF THE DELHI HIGH COURT IN THE CAS E OF OASIS HOSPITALITY P. LTD.(333 ITR 119). 27. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSE D THE ORDERS OF THE LOWER AUTHORITIES AND OTHER MATERIAL ON RECORD. WE HAVE ALSO APPLIED OUR MIND TO THE DECISIONS CITED BY THE LEARNED AUTHORI SED REPRESENTATIVE FOR THE ASSESSEE. FROM THE MATERIALS ON RECORD, WE FIND TH AT IMMEDIATELY PRIOR TO THE ISSUANCE OF THE CHEQUE BY THE CONCERNED CREDITO RS TO THE ASSESSEE, CASH DEPOSITS OF EVEN AMOUNTS WERE MADE INTO THE RESPECT IVE BANK ACCOUNTS OF THE CREDITORS. THE INCOMES DISCLOSED IN THE RETURN S FILED FOR THE ASSESSMENT ITA NO.1139/HYD/2012 & SEVEN OTHERS SHRI SHIV KUMAR SHARMA & 3 ORS, HYDERABAD . 14 YEAR 2007-08 BY THE CONCERNED CREDITORS, SHRI T.JAI PRAKASH AND SMT. HEMA SONI, WERE VERY MEAGER, I.E. RS.97,035 AND RS.1,30, 708, AND THE SAME DO NOT INFUSE CONFIDENCE AS TO THE CREDITWORTHINESS OF THOSE TWO CREDITORS, SO AS TO ENABLE THEM TO ADVANCE HUGE AMOUNTS OF RS.6,00,0 00 AND RS.5,00,000 RESPECTIVELY TO THE ASSESSEE. IT IS ALSO A FACT TAK EN NOTE OF BY THE ASSESSING OFFICER THAT EXCEPTING THE AFORESAID CASH DEPOSITS IN THE BANK ACCOUNTS OF THE CREDITORS, NO OTHER DEPOSITS OF SUCH MAGNITUDE WERE FOUND TO HAVE BEEN MADE IN THEIR BANK ACCOUNTS. IT IS EVIDENT FROM TH E MATERIAL ON RECORD THAT THE ASSESSEE AND HIS OTHER FAMILY MEMBERS HAVE INDU LGED IN AVAILING UNSECURED LOANS FROM CERTAIN PERSONS IN A SYSTEMATI C AND ORGANIZED MANNER, SO AS TO EXPLAIN AWAY THE UNEXPLAINED INVESTMENTS M ADE BY THEM IN THE PURCHASE OF THE IMMOVABLE PROPERTY. AS FOR THE CASE -LAW RELIED UPON BY THE LEARNED COUNSEL FOR THE ASSESSEE, IT IS PERTINENT TO NOTE THAT THE RATIO OF A DECISION IS APPLICABLE IN RESPECT OF THE FACTS DECI DED IN THAT CASE. IF THE FACTS ARE NOT IDENTICAL WITH THOSE CONSIDERED IN A PARTIC ULAR CASE, THE RATIO OF THAT DECISION CITED BY THE PARTIES CANNOT BE MADE APPLIC ABLE. THE HONBLE SUPREME COURT IN THE CASE OF SUMATI DAYAL V/S. CIT (214 ITR 801) HAS OBSERVED THAT IF A CREDIT IS FOUND IN THE BOOKS OF ACCOUNT OF THE ASSESSEE AND IN THE OPINION OF THE ASSESSING OFFICER, THE EXPLA NATION OFFERED BY THE ASSESSEE ABOUT THE NATURE AND SOURCE OF SUCH DEPOSI TS IS NOT SATISFACTORY, THEN ADDITION CAN BE MADE UNDER S.68 OF THE ACT. I N THE PRESENT CASE, THERE IS SERIOUS DOUBT RAISED REGARDING THE CREDITWORTHIN ESS OF THE CONCERNED CREDITORS AND THE GENUINENESS OF THE TRANSACTIONS. IN THE ABSENCE OF SATISFACTORY EXPLANATION FROM THE ASSESSEE, TO FULF IL THE AFORESAID TWO INGREDIENTS FOR PROVING THE GENUINENESS OF A CREDIT , THE ASSESSING OFFICER WAS JUSTIFIED IN MAKING THE ADDITION UNDER S.68 OF THE ACT. THE CIT(A) BY MERELY CONSIDERING THE FACT THAT THE CREDITORS HAVE FILED THE RETURNS OF INCOME, DECLARING THE LOAN TRANSACTIONS IN QUESTION, HAS DE LETED THE ADDITION MADE BY THE ASSESSING OFFICER. THIS APPROACH OF THE CIT(A) , IN OUR CONSIDERED VIEW, IS ITA NO.1139/HYD/2012 & SEVEN OTHERS SHRI SHIV KUMAR SHARMA & 3 ORS, HYDERABAD . 15 NOT CORRECT AND HENCE CANNOT BE ACCEPTED. IN THIS VIEW OF THE MATTER, WE SET ASIDE THE IMPUGNED ORDER OF THE CIT(A) ON THIS ASPE CT, AND RESTORE THE ADDITIONS UNDER S.68 OF THE ACT MADE BY THE ASSESSI NG OFFICER IN RELATION TO THESE TWO CREDITORS. 28. IN THE RESULT, THIS APPEAL OF THE REVENUE, BEI NG ITA NO.1132/HYD/2012, IS ALLOWED. SHRI SHIV KUMAR SHARMA ASSESSEES APPEAL ITA NO.1139/HYD/2012 : ASSESSMENT YEAR 2007-08 29. GROUND NO.1 IN THIS APPEAL RELATES TO ADDITION OF RS.2,52,000 UNDER S.69 OF THE ACT. 30. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSE D THE MATERIAL ON RECORD ON THIS ISSUE. ADMITTEDLY, FACTS OF THE CAS E AND THE CONTENTIONS OF THE PARTIES IN RELATION TO THIS ADDITION OF RS.2,52,000 UNDER S.69 OF THE ACT, ARE IDENTICAL IN CASES OF ALL THE FOUR ASSESSEES. THAT BEING SO, FOR THE DETAILED REASONINGS DISCUSSED IN PARA 9 HEREINABVOE, IN THE CONTEXT OF CORRESPONDING GROUNDS OF THE CONNECTED ASSESSEE, SHRI MANOJ KUMAR SHARMA, CONSIDERING THE PRIMA FACIE EVIDENCE AVAILABLE ON RECORD, THE C ONTENTION OF THE ASSESSEE THAT THE AMOUNT MENTIONED IN THE SALE DEED IS THE A CTUAL AMOUNT PAID CANNOT BE ACCEPTED, AND CONSEQUENTLY, WE FIND NO REASON TO INTERFERE WITH THE ORDERS OF THE LOWER AUTHORITIES ON THIS ISSUE. ACCORDINGL Y, THE ADDITION OF RS.2,52,000 IS CONFIRMED AND THE ASSESSEES GROUNDS ON THIS ISSUE ARE ACCORDINGLY REJECTED. 31. GROUND NO.2 AND 3 RELATES TO ADDITIONS OF RS.1 LAKH BEING THE LOAN TAKEN FROM SMT. MANDAKINI, AND OF RS.3,00,000 BEING THE LOAN TAKEN FROM SHRI SUNIL DAYAL, UNDER S.68 OF THE ACT, ITA NO.1139/HYD/2012 & SEVEN OTHERS SHRI SHIV KUMAR SHARMA & 3 ORS, HYDERABAD . 16 32. FACTS OF THE CASE IN RELATION TO THIS GROUND A RE THAT IN THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE WHILE EXPLA INING THE SOURCE OF HIS SHARE OF INVESTMENT IN THE PURCHASE OF THE PROPERTY , STATED TO HAVE TAKEN THE FOLLOWING LOANS- (I) SHRI SOMRAJ RS. 5,00,000 (II) SMT.RAMA BAI RS. 3,00,000 (III) SMT.MANDAKINI RS. 1,00,000 (IV) SMT.HEMA SONI RS. 5,00,000 (V) SHRI SUNIL DAYAL RS. 3,00,000 THE ASSESSING OFFICER DISBELIEVED THE ASSESSEES EX PLANATION WITH REGARD TO THE AFORESAID LOAN TRANSACTIONS AND ADDED AN AMOUNT OF RS.17 LAKHS AS UNEXPLAINED CASH CREDIT UNDER S.68 OF THE ACT. ON A PPEAL, THE CIT(A) SUSTAINED THE ADDITIONS IN THE CASES OF LOAN STATE D TO HAVE BEEN TAKEN FROM SMT. RAMA BAI OF RS.3,00,000 AND SMT.MANDAKINI OF R S.1,00,000 AND SHRI SUNIL DAYAL, WHILE DELETING THE ADDITIONS MADE BY T HE ASSESSING OFFICER IN RELATION TO THE OTHER CREDITS. AS AGAINST THE ADDI TIONS SUSTAINED BY THE CIT(A), IN RESPECT OF THREE CASH CREDITS SUSTAINED BY THE CIT(A), ASSESSEE IS IN APPEAL BEFORE US ONLY WITH REGARD TO TWO, VIZ. R S.1,00,000 BY SMT.MANDAKINI AND RS.3,00,000 BY SHRI SUNIL DAYAL. 33. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND OTHER MATERIAL ON RECO RD. SO FAR AS LOAN TAKEN FROM SMT.MANDAKINI IS CONCERNED, THE ASSESSING OFFI CER HAS DISBELIEVED THE LOAN TRANSACTION, IN THE ABSENCE OF ANY CONFIRMATIO N LETTER OR BANK ACCOUNT COPY OF THE CREDITOR, FURNISHED BY THE ASSESSEE. IN THE COURSE OF APPEAL PROCEEDINGS BEFORE THE CIT(A), THOUGH CONFIRMATION LETTER AND COPY OF ITA NO.1139/HYD/2012 & SEVEN OTHERS SHRI SHIV KUMAR SHARMA & 3 ORS, HYDERABAD . 17 INCOME-TAX RETURN OF THE CREDITOR WERE FILED, THE C IT(A) SUSTAINED THE ADDITION, ON THE GROUND THAT THE LOAN TRANSACTION H AS NOT BEEN REFLECTED IN THE RELEVANT RETURN OF INCOME OF THE CREDITOR. IT IS SEEN FROM THE RECORD THAT THOUGH THE ASSESSEE SUBMITTED THE INCOME-TAX RETURN OF THE SAID LOAN CREDITOR, SMT.MANDAKINI, NEITHER IN THE RETURN OF I NCOME, NOR IN THE ACCOMPANYING STATEMENT, SHE HAS DISCLOSED ABOUT THE ADVANCING OF LOAN TO THE ASSESSEE. THAT APART, IN THE RETURN OF INCOME, A MEAGER INCOME OF RS.67,587 HAS BEEN DISCLOSED FOR THE ASSESSMENT YEA R 2007-08. FROM THESE FACTS, IT IS CLEAR THAT THE SAID LOAN CREDITOR WAS NOT HAVING THE CREDIT- WORTHINESS TO ADVANCE THE AMOUNT OF RS.1 LAKH TO TH E ASSESSEE. MERE FILING OF A CONFIRMATION LETTER OF THE CREDITOR DOES NOT P ROVE THE LOAN TO BE GENUINE, IF THE CREDIT-WORTHINESS OF THE CONCERNED CREDITOR IS NOT ESTABLISHED. IN THE AFORESAID VIEW OF THE MATTER, WE FIND NO JUSTIFIC ATION TO INTERFERE WITH THE ORDERS OF THE LOWER AUTHORITIES IN RELATION TO THIS CASH CREDIT ADDITION. 34. SO FAR AS THE OTHER CASH CREDIT ADDITION OF R S.3,00,000 RELATING TO LOAN FROM SHRI SUNIL DAYAL IS CONCERNED , THE ASSESSEE FILED A CONFIRMATION LETTER FROM THE SAID CREDITOR BEFORE T HE ASSESSING OFFICER. HOWEVER, NO RETURN OF INCOME OF THE CONCERNED CRE DITOR WAS SUBMITTED TO PROVE THE SOURCES FOR ADVANCING THE LOAN BY THE CRE DITOR. THE ASSESSING OFFICER THEREFORE, ADDED THE AMOUNT OF RS.3 LAKH BY OBSERVING THAT IN THE ABSENCE OF THE RETURN OF INCOME, THE SOURCE OF INCO ME OF THE CREDITOR AND NON-SUBMISSION OF THE COPIES OF THE BANK ACCOUNT OF THE CREDITOR. BEFORE THE CIT(A), THE ASSESSEE SUBMITTED THE INCOME-TAX RETU RNS AND THE BANK ACCOUNT COPIES OF THE CONCERNED CREDITORS. THE CIT(A), ON EXAMINING THE DOCUMENTS SUBMITTED BEFORE HIM, FOUND THAT THE CONCERNED CRED ITOR, APART FROM ADVANCING AN AMOUNT OF RS.3 LAKHS TO THE ASSESSEE, HAS ALSO GIVEN A LOAN OF RS.2 LAKHS TO SMT. RASHMI SHARMA, A FAMILY MEMBER O F THE ASSESSEE. IT WAS FURTHER FOUND BY THE CIT(A) THAT THE SAID CREDI TOR HAS FILED HIS RETURN OF ITA NO.1139/HYD/2012 & SEVEN OTHERS SHRI SHIV KUMAR SHARMA & 3 ORS, HYDERABAD . 18 INCOME FOR THE ASSESSMENT YEAR 2007-08 ONLY ON 25.4 .2011, THAT IS MUCH AFTER THE SEARCH AND SEIZURE OPERATIONS. IT WAS F URTHER NOTICED BY THE CIT(A) THAT NEITHER THE ASSESSEE NOR SMT.RASHMI SHARMA REP AID THE LOAN AMOUNT TO THE CREDITOR. ON CONSIDERATION OF THE AFORESAID FA CTS, THE CIT(A) HELD THE LOAN TRANSACTION IN QUESTION TO BE NOT GENUINE AND SUSTA INED THE ADDITION. 35. THE LEARNED AUTHORISED REPRESENTATIVE FOR THE ASSESSEE SUBMITTED BEFORE US, THAT THE ENTIRE LOAN TRANSACTI ON WAS THROUGH CHEQUE AND THE CREDITOR IS AN ASSESSEE OF THE INCOME-TAX DEPAR TMENT. IT WAS FURTHER SUBMITTED BY HIM THAT THE LOAN TRANSACTION WAS DISC LOSED TO THE DEPARTMENT BY THE SAID CREDITOR. THE LEARNED AUTHORISED REPRE SENTATIVE FOR THE ASSESSEE SUBMITTED THAT ONLY BECAUSE THE LOAN WAS NOT REPAID BY THE ASSESSEE, NO ADDITION CAN BE MADE. 36. THE LEARNED DEPARTMENTAL REPRESENTATIVE ON THE OTHER HAND, STRONGLY SUPPORTED THE ORDERS OF THE LOWER AUTHORIT IES. 37. ON CAREFUL CONSIDERATION OF THE MATTER, WE FIN D THAT THOUGH THE ASSESSEE HAS SUBMITTED A CONFIRMATION LETTER FROM T HE CONCERNED CREDITOR, THAT BY ITSELF WOULD NOT ABSOLVE THE ASSESSEE FROM DISCHARGING THE ONUS OF PROVING THE GENUINENESS OF THE LOAN TRANSACTION BY ESTABLISHING ALL THE THREE CONDITIONS, VIZ. IDENTITY OF THE CREDITOR, HIS CRED ITWORTHINESS AND GENUINENESS OF THE TRANSACTION. IT IS SEEN FROM THE RECORD THA T THE SAID CREDITOR, SHRI SUNIL DAYAL, FILED HIS RETURN OF INCOME FOR THE ASSESSMEN T YEAR 2007-08 ONLY ON 25.4,2011, BY DECLARING AN INCOME OF RS.98,146. T HE SUBMISSION OF RETURN AT SUCH A BELATED STAGE, AND THAT TOO AFTER THE SEA RCH AND SEIZURE OPERATION HAS TAKEN PLACE IN THE CASE OF ASSESSEE AND HIS FAM ILY MEMBERS, DEFINITELY WOULD LEAD TO THE CONCLUSION THAT THE ALLEGED LOAN TRANSACTION AND THE FILING OF THE RETURN BY THE SAID CREDITOR IS ONLY AN AFTER TH OUGHT TO EXPLAIN AWAY THE ITA NO.1139/HYD/2012 & SEVEN OTHERS SHRI SHIV KUMAR SHARMA & 3 ORS, HYDERABAD . 19 SOURCES FOR THE INVESTMENT MADE BY THE ASSESSEE IN THE HOUSE PROPERTY. THAT APART, THE INCOME DISCLOSED BY THE ASSESSEE IN THE RETURN FILED EVEN AT SUCH A BELATED STAGE ALSO DOES NOT INFUSE ANY CONFI DENCE ABOUT THE CREDITWORTHINESS OF THE CREDITOR, WHO IS CLAIMED TO HAVE ADVANCED A TOTAL AMOUNT OF RS.5 LAKHS, I.E. RS.3 LAKHS TO THE ASSESS EE AND RS. 2 LAKHS TO SMT.RASHMI SHARMA. THE ONUS IS ON THE ASSESSEE TO P ROVE THE GENUINENESS OF THE LOAN AND THE CREDITWORTHINESS OF THE CREDITO R.THIS HAS NOT BEEN PROVED BY THE ASSESSEE. 38. IN THE CIRCUMSTANCES, WE FIND NO JUSTIFICATIO N TO INTERFERE WITH THE ORDERS OF THE LOWER AUTHORITIES IN RELATION TO THES E TWO CASH CREDITS. ASSESSEES GROUNDS ON THIS ISSUE ARE REJECTED. 39. IN THE RESULT, ASSESSEES APPEAL, BEING ITA NO .1139/HYD/2012 IS DISMISSED. REVENUES APPEAL: ITA NO.1130/HYD/2012 : ASSESSMENT YEAR 2007-08 40. THE ONLY ISSUE INVOLVED IN THIS APPEAL OF THE REVENUE IS WITH REGARD TO THE RELIEF GRANTED BY THE CIT(A) OUT OF T HE ADDITIONS MADE BY THE ASSESSING OFFICER UNDER S.68 OF THE ACT. THE CIT(A ) BY THE IMPUGNED ORDER HAS DELETED THE FOLLOWING CASH CREDIT ADDITIONS MAD E BY THE ASSESSING OFFICER UNDER S.68 OF THE ACT, AND THE ACTION OF THE CIT(A) IN THIS BEHALF HAS GIVEN RISE TO THE PRESENT APPEAL BY THE REVENUE- (A) SHRI SOMRAJ RS.5,00,000 (B) SMT. HEMA SONI RS.5,00,000 41. FACTS OF THE CASE IN RELATION TO THE ABOVE TWO ITEMS OF ADDITION ARE THAT IN THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE WHILE ITA NO.1139/HYD/2012 & SEVEN OTHERS SHRI SHIV KUMAR SHARMA & 3 ORS, HYDERABAD . 20 EXPLAINING THE SOURCE OF ASSESSEES SHARE OF INVEST MENT IN THE PURCHASE OF THE PROPERTY, STATED TO HAVE TAKEN THE AFORESAID TW O LOANS. IN SUPPORT OF HIS CLAIM OF LOAN TAKEN FROM SHRI SOMRAJ, ASSESSEE SUBM ITTED THE RETURN OF INCOME FILED BY SHRI SOMRAJ AND ALSO THE BANK ACCOU NT COPY OF SHRI SOMRAJ. FROM THE BANK ACCOUNT COPY, THE ASSESSING OFFICER N OTICED THAT CASH OF RS.5 LAKHS WAS DEPOSITED INTO HIS ACCOUNT ON 30.10.2006, AND IMMEDIATELY THEREAFTER ON 1.11.2006, SHRI SOMRAJ ISSUED TWO CHE QUES OF RS.2.50-LAKHS EACH TO THE ASSESSEE. THE ASSESSING OFFICER FURTHER NOTICED THAT THERE IS NO OTHER DEPOSIT OF SUCH MAGNITUDE IN THE BANK ACCOUNT . HE THEREFORE, CAME TO A CONCLUSION THAT SHRI SOMRAJ WAS NOT HAVING THE CR EDIT-WORTHINESS TO ADVANCE SUCH A HUGE AMOUNT OF INTEREST-FREE UNSECUR ED LOAN TO THE ASSESSEE. HE THEREFORE, ADDED THE AMOUNT OF RS.5 LAKHS AS UNE XPLAINED CREDIT UNDER S.68 OF THE ACT. ON APPEAL, THE CIT(A) DELETED THE ADDITION MADE BY THE ASSESSING OFFICER, AFTER CONSIDERING THE FACT THAT THE SAID CREDITOR, SHRI SOMRAJ, IN THE STATEMENT ACCOMPANYING HIS RETURN OF INCOME FILED FOR THE ASSESSMENT YEAR 2007-08, HAS NOT ONLY REFLECTED THE ADVANCEMENT OF LOAN OF RS.5 LAKH TO THE ASSESSEE, BUT HE HAS ALSO OFFERED INTEREST INCOME OF RS.19,150 CHARGED BY HIM ON THAT LOAN AMOUNT, TO TA X. THE CIT(A) FURTHER FOUND THAT THE ENTIRE LOAN AMOUNT HAS BEEN REPAID B Y THE ASSESSEE THROUGH AN ACCOUNT PAYEE CHEQUE TO THE SAID LOAN CREDITOR. THE CIT(A) ACCORDINGLY DELETED THIS ADDITION OF RS.5 LAKHS. 42. SO FAR AS THE LOAN CLAIMED TO HAVE BEEN TAKEN FROM SMT.HEMA SONI OF RS.5 LAKHS IS CONCERNED, THE ASSESSEE, IN S UPPORT OF THE SAID CLAIM, SUBMITTED THE INCOME-TAX RETURN OF THE CREDITOR FIL ED FOR THE RELEVANT ASSESSMENT YEAR AND ALSO THE BANK ACCOUNT COPY, WHI CH REFLECTED THE ADVANCEMENT OF LOAN OF RS.5 LAKH TO THE ASSESSEE. THE ASSESSING OFFICER NOTICED THAT AN AMOUNT OF RS.10 LAKHS WAS CREDITED IN THE ACCOUNT OF THE SAID CREDITOR ON 9.11.2006 AND ON THE NEXT DAY, I.E. ON 10.11.2006 THE SAID ITA NO.1139/HYD/2012 & SEVEN OTHERS SHRI SHIV KUMAR SHARMA & 3 ORS, HYDERABAD . 21 CREDITOR, SMT.HEMA SONI ADVANCED LOAN OF RS.5 LAKH EACH, TO THE ASSESSEE AND HIS BROTHER SHRI SHIV KUMAR SHARMA. THE ASSE SSING OFFICER THEREFORE, CAME TO A CONCLUSION THAT THE SAID CREDITOR WAS NOT HAVING SUFFICIENT SOURCE OF INCOME TO ADVANCE THE AMOUNT TO THE ASSESSEE. HE ACCORDINGLY ADDED THE AMOUNT OF RS.5 LAKH TO THE TOTAL INCOME OF THE ASSE SSEE UNDER S.68 OF THE ACT. ON APPEAL, THE CIT(A) DELETED THE ADDITION MA DE BY THE ASSESSING OFFICER, AFTER CONSIDERING THE FACT THAT THE SAID C REDITOR, SMT. HEMA SONI, IN THE STATEMENT ACCOMPANYING HER RETURN OF INCOME FIL ED FOR THE ASSESSMENT YEAR 2007-08, HAS REFLECTED THE ADVANCEMENT OF LOAN OF RS.5 LAKH TO THE ASSESSEE. HE FURTHER NOTED THAT THE SAID CREDITOR HAS ALSO CHARGED INTEREST ON THE LOAN ADVANCED. THE CIT(A) FURTHER FOUND THA T THE ENTIRE LOAN AMOUNT ALONGWITH INTEREST HAS BEEN REPAID BY THE ASSESSEE THROUGH AN ACCOUNT PAYEE CHEQUE NO.006216 DATED 27.8.2006 FOR AN AMOUNT OF R S.5,62,384, TO THE SAID LOAN CREDITOR. THE CIT(A), OBSERVING THAT THE LOAN CREDITOR, BEING AN INCOME-TAX ASSESSEE AND HAVING DISCLOSED THE FACT O F LOAN IN THE RETURN FILED, DELETED THE ADDITION. 43. THE LEARNED DEPARTMENTAL REPRESENTATIVE, WITH REGARD TO THESE TWO CREDITS DELETED BY THE CIT(A), SUBMITTED BEFORE US THAT THE ASSESSEE HAVING NOT PROVED THE CREDIT-WORTHINESS OF THE LOAN CREDITORS, THE ASSESSING OFFICER WAS JUSTIFIED IN MAKING THE IMPUGNED ADDITI ONS UNDER S.68 OF THE ACT. THE LEARNED AUTHORISED REPRESENTATIVE FOR THE ASSE SSEE, ON THE OTHER HAND, SUBMITTED THAT THE BALANCE SHEET AND THE RETURNS OF THE CREDITORS SUBMITTED BEFORE THE ASSESSING OFFICER, CLEARLY ESTABLISH THE GENUINENESS OF THE TRANSACTIONS, AND THE CIT(A) WAS JUSTIFIED IN GRANT ING RELIEF TO THE ASSESSEE, BY DELETING THESE TO ADDITIONS. HE RELIED ON THE D ECISION OF THE TRIBUNAL(THIRD MEMBER) IN THE CASE OF SMT. MADHU RAITANI V/S. ACIT (45 SOT 231)-GAU AND THE DECISION OF THE HONBLE DELHI HIGH COURT IN THE CASE OF OASIS HOSPITALITY P. LTD.(333 ITR 119); BESIDES THE DECIS ION OF THE HYDERABAD ITA NO.1139/HYD/2012 & SEVEN OTHERS SHRI SHIV KUMAR SHARMA & 3 ORS, HYDERABAD . 22 BENCH IN THE CASE OF N.KONDALA RAJU (ITA NO.1412/HY D/2010) DATED 14.12.2011. 44. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUS ED THE ORDERS OF THE LOWER AUTHORITIES AND OTHER MATERIAL ON RECORD. WE HAVE ALSO APPLIED OUR MIND TO THE DECISIONS CITED BY THE LEARNED AUTHORI SED REPRESENTATIVE FOR THE ASSESSEE. FROM THE MATERIALS ON RECORD, WE FIND TH AT IMMEDIATELY PRIOR TO THE ISSUANCE OF THE CHEQUE BY THE CONCERNED CREDITO RS TO THE ASSESSEE, CASH DEPOSITS OF EVEN AMOUNTS WERE MADE INTO THE RESPECT IVE BANK ACCOUNTS OF THE CREDITORS. THE INCOMES DISCLOSED IN THE RETURN S FILED FOR THE ASSESSMENT YEAR 2007-08 BY THE CONCERNED CREDITORS, SHRI SOMRA J AND SMT. HEMA SONI, WERE VERY MEAGER, I.E. RS.1,03,150 AND RS.1,30,708, AND THE SAME DO NOT INFUSE CONFIDENCE AS TO THE CREDITWORTHINESS OF THO SE TWO CREDITORS, SO AS TO ENABLE THEM TO ADVANCE HUGE AMOUNTS OF RS.5,00,000 EACH TO THE ASSESSEE. IT IS ALSO A FACT TAKEN NOTE OF BY THE ASSESSING OF FICER THAT EXCEPTING THE AFORESAID CASH DEPOSITS IN THE BANK ACCOUNTS OF THE CREDITORS, NO OTHER DEPOSITS OF SUCH MAGNITUDE WERE FOUND TO HAVE BEEN MADE IN THEIR BANK ACCOUNTS. IT IS EVIDENT FROM THE MATERIAL ON RECOR D THAT THE ASSESSEE AND HIS OTHER FAMILY MEMBERS HAVE INDULGED IN AVAILING UNSE CURED LOANS FROM CERTAIN PERSONS IN A SYSTEMATIC AND ORGANIZED MANNER, SO AS TO EXPLAIN AWAY THE UNEXPLAINED INVESTMENTS MADE BY THEM IN THE PURCHAS E OF THE IMMOVABLE PROPERTY. AS FOR THE CASE-LAW RELIED UPON BY THE L EARNED COUNSEL FOR THE ASSESSEE, IT IS PERTINENT TO NOTE THAT THE RATIO OF A DECISION IS APPLICABLE IN RESPECT OF THE FACTS DECIDED IN THAT CASE. IF THE FACTS ARE NOT IDENTICAL WITH THOSE CONSIDERED IN A PARTICULAR CASE, THE RATIO OF THAT DECISION CITED BY THE PARTIES CANNOT BE MADE APPLICABLE. THE HONBLE SUP REME COURT IN THE CASE OF SUMATI DAYAL V/S. CIT (214 ITR 801) HAS OBSERVED TH AT IF A CREDIT IS FOUND IN THE BOOKS OF ACCOUNT OF THE ASSESSEE AND IN THE OPI NION OF THE ASSESSING OFFICER, THE EXPLANATION OFFERED BY THE ASSESSEE AB OUT THE NATURE AND SOURCE ITA NO.1139/HYD/2012 & SEVEN OTHERS SHRI SHIV KUMAR SHARMA & 3 ORS, HYDERABAD . 23 OF SUCH DEPOSITS IS NOT SATISFACTORY, THEN ADDITION CAN BE MADE UNDER S.68 OF THE ACT. IN THE PRESENT CASE, THERE IS SERIOUS DOU BT RAISED REGARDING THE CREDITWORTHINESS OF THE CONCERNED CREDITORS AND THE GENUINENESS OF THE TRANSACTIONS. IN THE ABSENCE OF SATISFACTORY EXPLAN ATION FROM THE ASSESSEE, TO FULFIL THE AFORESAID TWO INGREDIENTS FOR PROVING TH E GENUINENESS OF A CREDIT, THE ASSESSING OFFICER WAS JUSTIFIED IN MAKING THE A DDITION UNDER S.68 OF THE ACT. THE CIT(A) BY MERELY CONSIDERING THE FACT TH AT THE CREDITORS HAVE FILED THE RETURNS OF INCOME, DECLARING THE LOAN TRANSACTI ONS IN QUESTION, HAS DELETED THE ADDITION MADE BY THE ASSESSING OFFICER. THIS APPROACH OF THE CIT(A), IN OUR CONSIDERED VIEW, IS NOT CORRECT AND HENCE CANNOT BE ACCEPTED. IN THIS VIEW OF THE MATTER, WE SET ASIDE THE IMPUGN ED ORDER OF THE CIT(A) ON THIS ASPECT, AND RESTORE THE ADDITIONS UNDER S.68 O F THE ACT MADE BY THE ASSESSING OFFICER IN RELATION TO THESE TWO CREDITOR S. 45. IN THE RESULT, THIS APPEAL OF THE REVENUE, BEI NG ITA NO.1130/HYD/2012, IS ALLOWED. SMT. SUNITHA SHARMA ASSESSEES APPEAL ITA NO.1142/HYD/2012 : ASSESSMENT YEAR 2007-08 46. GROUND NO.1 IN THIS APPEAL RELATES TO ADDITION OF RS.2,52,000 UNDER S.69 OF THE ACT. 47. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSE D THE MATERIAL ON RECORD ON THIS ISSUE. ADMITTEDLY, FACTS OF THE CAS E AND THE CONTENTIONS OF THE PARTIES IN RELATION TO THIS ADDITION OF RS.2,52,000 UNDER S.69 OF THE ACT, ARE IDENTICAL IN CASES OF ALL THE FOUR ASSESSEES. THAT BEING SO, FOR THE DETAILED REASONINGS DISCUSSED IN PARA 9 HEREINABVOE, IN THE CONTEXT OF CORRESPONDING GROUNDS OF THE CONNECTED ASSESSEE, SHRI MANOJ KUMAR SHARMA, CONSIDERING THE PRIMA FACIE EVIDENCE AVAILABLE ON RECORD, THE C ONTENTION OF THE ASSESSEE ITA NO.1139/HYD/2012 & SEVEN OTHERS SHRI SHIV KUMAR SHARMA & 3 ORS, HYDERABAD . 24 THAT THE AMOUNT MENTIONED IN THE SALE DEED IS THE A CTUAL AMOUNT PAID CANNOT BE ACCEPTED, AND CONSEQUENTLY, WE FIND NO REASON TO INTERFERE WITH THE ORDERS OF THE LOWER AUTHORITIES ON THIS ISSUE. ACCORDINGLY , THE ADDITION OF RS.2,52,000 IS CONFIRMED AND THE ASSESSEES GROUNDS ON THIS ISS UE ARE ACCORDINGLY REJECTED. 48. GROUND NO.2 RELATES TO DISALLOWANCE OF CASH IN HAND TO THE EXTENT OF RS.3,00,900. 49. IN THE COURSE OF THE ASSESSMENT PROCEEDINGS, W HILE EXAMINING THE SOURCE OF INVESTMENT IN THE PURCHASE OF THE PROPERT Y BY THE ASSESSEE AND FAMILY MEMBERS, THE ASSESSEE STATED THAT HER SHARE OF INVESTMENT IN THE PURCHASE OF PROPERTY IS RS.32,00,900, WHICH WAS EXP LAINED IN THE FOLLOWING MANNER- ___________________________________________ ______ 1. OWN FUND OUT OF EARLIER SAVINGS RS.4,00,900 2, DRAWINGS FROM RMR PEARLS RS.7,50,000 3. HAND-LOAN FROM SUSHEEL ADUKIA RS.5,00,000 4, HAND-LOAN FROM VISHNU JAWAHAR RS.7,50,000 5, HAND-LOAN FROM MRS.RAMA BAI RS.2,00,000 6. HAND-LOAN FROM T.JAIPRAKASH RS.6,00,000 TOTAL RS.32,00,900 50. SO FAR AS THE AMOUNT OF RS.4,00,900 IS CONCER NED, THE ASSESSEE EXPLAINED THAT THE AMOUNT WAS OUT OF ACCUMULATED SA VINGS. THE ASSESSING OFFICER HOWEVER, AFTER EXAMINING THE RETURN OF INCO ME FILED BY THE ASSESSEE FOR THE ASSESSMENT YEAR 2003-04 TO 2006-07 FOUND TH AT FOR THE FOUR ASSESSMENT YEARS, THE ASSESSEE DECALED A TOTAL INCO ME OF RS.5,03,995 ONLY. THE ASSESSING OFFICER CONSIDERING THE SMALLNESS OF THE INCOME DECLARED OVER ITA NO.1139/HYD/2012 & SEVEN OTHERS SHRI SHIV KUMAR SHARMA & 3 ORS, HYDERABAD . 25 A PERIOD OF FOUR ASSESSMENT YEARS, CONCLUDED THAT T HE ASSESSEE COULD NOT HAVE ANY ACCUMULATED SAVINGS OF THE AMOUNT STATED T O HAVE BEEN AVAILABLE WITH HER. THE ASSESSING OFFICER THEREFORE, MADE AD DITION OF THE ENTIRE AMOUNT OF RS.4,00,900. 51. ON APPEAL, THE CIT(A), AFTER TAKING INTO CONSI DERATION THE INCOME DECLARED BY THE ASSESSEE IN HER RETURN OF INCOME FR OM THE ASSESSMENT YEAR 2003-04 TO 2006-07, AGREED WITH THE ASSESSING OFFIC ER THAT THE ASSESSEE COULD NOT HAVE SAVED THE AMOUNT OF RS.4,00,900 CONS IDERING THE INCOME DECLARED BY HER IN THE EARLIER ASSESSMENT YEARS. T HE CIT(A) HOWEVER, GIVING BENEFIT OF SAVINGS TO THE EXTENT OF RS.1,00,000, SU STAINED THE BALANCE ADDITION OF RS.3,00,900. STILL AGGRIEVED, ASSESSE E IS IN APPEAL BEFORE US. 52. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSE D THE MATERIALS ON RECORD. IT IS SEEN FROM THE RECORD THAT THE ASSE SSING OFFICER HAS DISBELIEVED THE CLAIM OF THE ASSESSEE IN ITS ENTIRE TY. HOWEVER, THE CIT(A) AFTER CONSIDERING THE EXPLANATION SUBMITTED BY THE ASSESSEE AND ALSO KEEPING IN VIEW THE FACT THAT POSSIBILITY OF HAVING MADE SOME AMOUNT OF SAVINGS OUT OF HER INCOME EARNED IN THE EARLIER ASS ESSMENT YEARS, HAS ALLOWED A RELIEF OF RS.1 LAKH. THE ASSESSEE HAS VI RTUALLY MADE THE SAME CONTENTIONS AS WERE RAISED BEFORE THE CIT(A), ON CO NSIDERATION OF WHICH THE CIT(A) HAS GIVEN PARTIAL RELIEF. CONSIDERING THE TO TALITY OF FACTS AND CIRCUMSTANCES OF THE CASE, WE FEEL THAT THE RELIEF GRANTED BY THE CIT(A) IS VERY LOW, AND BENEFIT OF SAVINGS TO THE EXTENT OF R S.2 LAKHS WOULD MEET THE ENDS OF JUSTICE. WE ACCORDINGLY RESTRICT THE ADDI TION MADE BY THE ASSESSING OFFICER TO RS.2,00,900 AS AGAINST RS.3,00,900 SUSTA INED BY THE CIT(A). ASSESSEES GROUNDS ON THIS ISSUE ARE PARTLY ALLOWED . 53. ASSESSEES GRIEVANCE IN GROUND NO.3 IS AGAINST THE ADDITION OF RS.2,00,000, REPRESENTING HAND-LOAN FROM SMT. RAMA BAI, SUSTAINED BY THE ITA NO.1139/HYD/2012 & SEVEN OTHERS SHRI SHIV KUMAR SHARMA & 3 ORS, HYDERABAD . 26 CIT(A) OUT OF THE ADDITIONS MADE BY THE ASSESSING O FFICER UNDER S.68 OF THE ACT. 54. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSE D THE MATERIAL ON RECORD ON THIS ISSUE. ADMITTEDLY, FACTS OF THE CAS E AND THE CONTENTIONS OF THE PARTIES IN RELATION TO THIS ADDITION OF RS.2,00,000 UNDER S.68 OF THE ACT, ARE IDENTICAL TO THOSE CONSIDERED BY US WHILE DEALING W ITH THE CORRESPONDING GROUND OF THE ASSESSEE, IN THE CASE OF SHRI MANOJ K UMAR SHARMA, WHEREIN ALSO, CASH CREDIT ADDITION IN RESPECT OF HAND LOAN TAKEN FROM SMT.RAMA BAI ONLY, HAS BEEN SUSTAINED BY THE CIT(A), AND THE DIS PUTE WAS RAISED BEFORE US. THAT BEING SO, FOR THE DETAILED REASONINGS DISCUSSE D IN PARA 21 HEREINABOVE, IN THE CONTEXT OF CORRESPONDING GROUND OF THE CONNE CTED ASSESSEE, SHRI MANOJ KUMAR SHARMA, WE CONSIDER IT JUST AND PROPER TO REM IT THIS ISSUE TO THE FILE OF THE ASSESSING OFFICER WHO SHALL VERIFY THE MATTER, BY CONDUCTING NECESSARY ENQUIRY, AND IF NECESSARY BY SUMMONING THE PURCHASE R OF THE GOLD ORNAMENTS, WHOSE IDENTITY AND ADDRESS IS AVAILABLE ON RECORD. THE ASSESSING OFFICER SHALL ACCORDINGLY REDECIDE THE IS SUE IN ACCORDANCE WITH LAW, AND IN CONSONANCE WITH THE VIEW THAT HE MAY TAKE IN THE CASE OF SHRI MANOJ KUMAR SHARMA, AND AFTER GIVING REASONABLE OPPORTUNI TY OF HEARING TO THE ASSESSEE, DULY CONFRONTING HER WITH THE MATERIAL TH AT HE MAY GATHER IN THE COURSE OF ENQUIRY THAT HE MAY CONDUCT IN COMPLIANCE WITH OUR DIRECTIONS HEREINABOVE. 55. IN THE RESULT, THIS APPEAL OF THE ASSESSEE, BE ING ITA NO.1142/HYD/2012 IS PARTLY ALLOWED. REVENUES APPEAL : ITA NO.1133/HYD/2012 : ASSESSMENT YEAR 2007-08 56. THE GRIEVANCE OF THE REVENUE IN THIS APPEAL RE LATES TO ADDITIONS OF RS.6 LAKHS BEING THE LOAN TAKEN FROM SHRI T.JAIP RAKASH; OF RS.5,00,000 BEING THE LOAN TAKEN FROM SHRI SUSHEEL ADUKIA; AND OF RS.7,50,000 BEING ITA NO.1139/HYD/2012 & SEVEN OTHERS SHRI SHIV KUMAR SHARMA & 3 ORS, HYDERABAD . 27 LOAN TAKEN FROM SHRI VISHNU JAWAHAR UNDER S.68 OF THE ACT, WHICH HAVE BEEN DELETED BY THE CIT(A). 57. FACTS OF THE CASE IN RELATION TO THIS GROUND A RE THAT IN THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE WHILE EXPLA INING THE SOURCE OF HIS SHARE OF INVESTMENT IN THE PURCHASE OF THE PROPERTY , STATED TO HAVE TAKEN THE LOANS INTER-ALIA FROM THE AFORESAID PARTIES. THE A SSESSING OFFICER IN THE COURSE OF ASSESSMENT PROCEEDINGS, WHILE EXAMINING T HE GENUINENESS OF THE LOAN TRANSACTIONS IN THE CASE OF THE THREE CREDITOR S IN QUESTION, NOTICED FROM THE BANK ACCOUNT COPIES FILED BEFORE HIM THAT SHRI T.JAIPRAKASH HAS DEPOSITED CASH OF RS.6,00,000 IN HIS ACCOUNT ON 18.10.2006 AN D ON 19.10.2006 HAD ISSUED A CHEQUE OF THE SAME AMOUNT TO THE ASSESSEE. THE ASSESSING OFFICER HAS FURTHER OBSERVED THAT THERE ARE NO OTHER HUGE C ASH DEPOSITS NOTICED IN THE SAID BANK ACCOUNT OF THE CREDITOR. FROM THE RET URN OF INCOME OF SHRI T.JAIPRAKASH SUBMITTED BEFORE HIM BY THE ASSESSEE, THE ASSESSING OFFICER NOTICED THAT HE HAS DECLARED AN INCOME OF RS.1,02,1 34 FOR THE ASSESSMENT YEAR 2007-08. ON THE BASIS OF THE ABOVE FACT, THE ASSESSING OFFICER CAME TO A CONCLUSION THAT SHRI JAIPRAKASH DOES NOT HAVE ANY CREDITWORTHINESS TO ADVANCE SUCH A HUGE AMOUNT OF LOAN OF RS.6 LAKHS TO THE ASSESSEE. HE THEREFORE, ADDED THE AMOUNT OF RS.6 LAKHS UNDER S.6 8 OF THE ACT. THE ADDITION WAS CHALLENGED BEFORE THE CIT(A). THE CIT (A) DELETED THE ADDITION ON CONSIDERING THE FACT THAT THE CONCERNED CREDITOR HAS NOT ONLY REFLECTED THE LOAN TRANSACTION IN THE STATEMENT FURNISHED ALONGWI TH THE RETURN OF INCOME FILED FOR THE ASSESSMENT YEAR 2007-08, BUT IT HAS A LSO CHARGED INTEREST OF RS.24,750 ON THE LOAN ADVANCED TO THE ASSESSEE. TH E CIT(A) FURTHER NOTICED THE FACT THAT THE ASSESSEE HAD ALSO REPAID THE ENTI RE LOAN AMOUNT TO THE CONCERNED CREDITOR, VIDE CHEQUE NO.642539 DRAWN ON STATE BANK OF PATIALA, ABIDS BRANCH, HYDERABAD. ITA NO.1139/HYD/2012 & SEVEN OTHERS SHRI SHIV KUMAR SHARMA & 3 ORS, HYDERABAD . 28 58. SO FAR AS THE LOAN SHOWN AGAINST SHRI SUSHEEL ADUKIA OF RS.5,00,000 IS CONCERNED, WHILE EXAMINING THE GENUI NENESS OF THE LOAN TRANSACTION, NOTICED FROM THE COPY OF RETURN OF INC OME OF SHRI ADUKIA FOR THE ASSESSMENT YEAR 2007-08, FILED BEFORE HIM, THAT HE HAS SHOWN AN INCOME OF RS.23,821. NO COPY OF THE BANK ACCOUNT WAS SUBMITT ED BEFORE HIM. THOUGH THE ASSESSEE EXPLAINED THAT SHRI ADUKIA HAS ADVANCE D THE LOAN OUT OF HIS RENTAL INCOME, THE ASSESSING OFFICER DISBELIEVED TH E CLAIM OF THE ASSESSEE, BY OBSERVING THAT THE RENTAL INCOME DISCLOSED BY THE C REDITOR IN THE RETURN OF INCOME AND THE AMOUNT ADVANCED AS LOAN ARE NOT PROP ORTIONATELY MATCHING. HE THEREFORE, DOUBTING THE CREDITWORTHINESS OF THE SAID CREDITOR, ADDED THE AMOUNT OF RS.5,00,000, AS UNEXPLAINED CREDIT UNDER S.68 OF THE ACT. ON APPEAL, THE CIT(A) DELETED THIS ADDITION, BY OBSER VING THAT THE SAID CREDITOR HAS REFLECTED THE LOAN TRANSACTION IN HIS RETURN OF INCOME FILED MUCH PRIOR TO THE SEARCH AND SEIZURE OPERATION CONDUCTED IN THE C ASE OF THE ASSESSEE, WHICH ACCORDING TO HIM ESTABLISHED THE GENUINENESS OF THE TRANSACTION. THE CIT(A), FURTHER OBSERVED THAT THE SAID CREDITOR HAS ALSO CHARGED INTEREST ON THE AMOUNT ADVANCED AND THE ASSESSEE HAS REPAID THE ENTIRE LOAN AMOUNT ALONGWITH INTEREST, THROUGH CHEQUE NO.837244 DRAWN ON STATE BANK OF PATIALA, HYDERABAD. 59. IN THE CASE OF LOAN OF RS.7,50,000 CLAIMED TO HAVE BEEN TAKEN FROM SHRI VISHNU JAWAHAR, THE ASSESSEE EXPLAINING THE SOURCE OF SUCH LOAN, SUBMITTED A CONFIRMATION FROM THE CONCERNED CREDITO R ALONGWITH THE CREDITORS RETURN OF INCOME. THE ASSESSING OFFICER NOTICED THA T THE SAID CREDITOR DISCLOSED AN INCOME OF RS.1,75,061 FOR THE ASSESSME NT YEAR 2006-07. THE ASSESSING OFFICER THEREFORE, CAME TO A CONCLUSION T HAT WITH SUCH MEAGER INCOME, THE CONCERNED CREDITOR COULD NOT HAVE THE C APACITY/CREDITWORTHINESS TO MAKE SUCH A HUGE UNSECURED LOAN TO THE ASSESSEE, WHICH IS ALSO INTEREST- FREE. THE ASSESSING OFFICER FURTHER OBSERVED THAT THE ASSESSEE HAS ALSO NOT ITA NO.1139/HYD/2012 & SEVEN OTHERS SHRI SHIV KUMAR SHARMA & 3 ORS, HYDERABAD . 29 REPAID THE AMOUNT TO THE CREDITOR. ON THE AFORES AID BASIS, THE ASSESSING OFFICER ADDED THE AMOUNT OF RS.7,50,000 TO THE TOTA L INCOME OF THE ASSESSEE UNDER S.68 OF THE ACT. ON APPEAL, THE CIT(A) DELETE D THIS ADDITION, BY OBSERVING THAT THE SAID CREDITOR HAS REFLECTED THE LOAN TRANSACTION IN HIS RETURN OF INCOME FILED MUCH PRIOR TO THE SEARCH AND SEIZURE OPERATION CONDUCTED IN THE CASE OF THE ASSESSEE, WHICH ACCORD ING TO HIM ESTABLISHED THE GENUINENESS OF THE TRANSACTION. THE CIT(A), CONTRA DICTING THE OBSERVATION OF THE ASSESSING OFFICER, NOTED THAT THE SAID CREDITOR HAS ALSO CHARGED INTEREST OF RS.26,075 ON THE AMOUNT ADVANCED, AND THE SAID INTE REST HAS ALSO BEEN OFFERED TO TAX IN THE RETURN FILED. FURTHER, CONTR ADICTING THE OBSERVATION OF THE ASSESSING OFFICER, THE CIT(A) NOTED THAT THE AS SESSEE HAS REPAID THE ENTIRE LOAN AMOUNT, THROUGH CHEQUE NO.642540 DRAWN ON STATE BANK OF PATIALA, HYDERABAD. 60. AGGRIEVED BY THE RELIEFS GRANTED BY THE CIT(A) IN RESPECT OF THE ABOVE THREE LOANS, REVENUE PREFERRED THE PRESENT AP PEAL BEFORE US. 61. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSE D THE ORDERS OF THE LOWER AUTHORITIES AND OTHER MATERIAL ON RECORD. WE HAVE ALSO APPLIED OUR MIND TO THE DECISIONS CITED BY THE LEARNED AUTHORIS ED REPRESENTATIVE FOR THE ASSESSEE. FROM THE MATERIALS ON RECORD, WE FIND TH AT IN THE CASE OF THE CREDITOR, SHRI T.JAIPRAKASH, IMMEDIATELY PRIOR TO T HE ISSUANCE OF THE CHEQUE BY THE CONCERNED CREDITOR TO THE ASSESSEE, CASH DEP OSIT OF EVEN AMOUNT WAS MADE INTO THE BANK ACCOUNT OF THE CREDITOR. THE IN COMES DISCLOSED IN THE RETURNS OF INCOME FILED FOR THE ASSESSMENT YEAR 200 7-08 BY THE CONCERNED CREDITORS WERE SO MEAGER THAT THE SAME DO NOT INFUS E ANY CONFIDENCE AS TO THE CREDITWORTHINESS OF THOSE CREDITORS, SO AS TO ENABLE THEM TO ADVANCE HUGE AMOUNTS RANGING FROM RS.5,00,000 TO RS.7,50,00 0 TO THE ASSESSEE. IT IS EVIDENT FROM THE MATERIAL ON RECORD THAT THE ASSESS EE AND HIS OTHER FAMILY MEMBERS HAVE INDULGED IN AVAILING UNSECURED LOANS F ROM CERTAIN PERSONS IN A ITA NO.1139/HYD/2012 & SEVEN OTHERS SHRI SHIV KUMAR SHARMA & 3 ORS, HYDERABAD . 30 SYSTEMATIC AND ORGANIZED MANNER, SO AS TO EXPLAIN A WAY THE UNEXPLAINED INVESTMENTS MADE BY THEM IN THE PURCHASE OF THE IMM OVABLE PROPERTY. AS FOR THE CASE-LAW RELIED UPON BY THE LEARNED COUNSEL FOR THE ASSESSEE, IT IS PERTINENT TO NOTE THAT THE RATIO OF A DECISION IS A PPLICABLE IN RESPECT OF THE FACTS DECIDED IN THAT CASE. IF THE FACTS ARE NOT ID ENTICAL WITH THOSE CONSIDERED IN A PARTICULAR CASE, THE RATIO OF THAT DECISION CI TED BY THE PARTIES CANNOT BE MADE APPLICABLE. THE HONBLE SUPREME COURT IN THE CASE OF SUMATI DAYAL V/S. CIT (214 ITR 801) HAS OBSERVED THAT IF A CREDI T IS FOUND IN THE BOOKS OF ACCOUNT OF THE ASSESSEE AND IN THE OPINION OF THE A SSESSING OFFICER, THE EXPLANATION OFFERED BY THE ASSESSEE ABOUT THE NATUR E AND SOURCE OF SUCH DEPOSITS IS NOT SATISFACTORY, THEN ADDITION CAN BE MADE UNDER S.68 OF THE ACT. IN THE PRESENT CASE, THERE IS SERIOUS DOUBT RAISED REGARDING THE CREDITWORTHINESS OF THE CONCERNED CREDITORS AND THE GENUINENESS OF THE TRANSACTIONS. IN THE ABSENCE OF SATISFACTORY EXPLA NATION FROM THE ASSESSEE, TO FULFIL THE AFORESAID TWO INGREDIENTS FOR PROVING THE GENUINENESS OF A CREDIT, THE ASSESSING OFFICER WAS JUSTIFIED IN MAKING THE A DDITION UNDER S.68 OF THE ACT. THE CIT(A) WITHOUT EXAMINING THE CREDITWORTH INESS OF THE CREDITORS, HAS DELETED THE ADDITIONS, ONLY ON THE CONSIDERATION TH AT THE LOAN AMOUNT HAS BEEN REPAID BY THE ASSESSEE BY CHEQUES. THIS FACT A LONE DOES NOT PROVE THE EITHER THE GENUINENESS OF THE TRANSACTIONS OR THE C REDITWORTHINESS OF THE CREDITORS THIS APPROACH OF THE CIT(A), IN OUR CONS IDERED VIEW, IS NOT CORRECT AND HENCE CANNOT BE ACCEPTED. IN THIS VIEW OF THE MATTER, WE SET ASIDE THE IMPUGNED ORDER OF THE CIT(A) ON THIS ASPECT, AND RE STORE THE ADDITIONS UNDER S.68 OF THE ACT MADE BY THE ASSESSING OFFICER IN RE LATION TO THESE FOUR CREDITORS. 62. IN THE RESULT, THIS APPEAL OF THE REVENUE, BEI NG ITA NO.1133/HYD/2012, IS ALLOWED. ITA NO.1139/HYD/2012 & SEVEN OTHERS SHRI SHIV KUMAR SHARMA & 3 ORS, HYDERABAD . 31 SMT. RASHMI SHARMA ASSESSEES APPEAL ITA NO.1140/HYD/2012 : ASSESSMENT YEAR 2007-08 63. GROUND NO.1 IN THIS APPEAL RELATES TO ADDITION OF RS.2,52,000 UNDER S.69 OF THE ACT. 64. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSE D THE MATERIAL ON RECORD ON THIS ISSUE. ADMITTEDLY, FACTS OF THE CAS E AND THE CONTENTIONS OF THE PARTIES IN RELATION TO THIS ADDITION OF RS.2,52,000 UNDER S.69 OF THE ACT, ARE IDENTICAL IN CASES OF ALL THE FOUR ASSESSEES. THAT BEING SO, FOR THE DETAILED REASONINGS DISCUSSED IN PARA 9 HEREINABOVE, IN THE CONTEXT OF CORRESPONDING GROUNDS OF THE CONNECTED ASSESSEE, SHRI MANOJ KUMAR SHARMA, CONSIDERING THE PRIMA FACIE EVIDENCE AVAILABLE ON RECORD, THE C ONTENTION OF THE ASSESSEE THAT THE AMOUNT MENTIONED IN THE SALE DEED IS THE A CTUAL AMOUNT PAID CANNOT BE ACCEPTED, AND CONSEQUENTLY, WE FIND NO REASON TO INTERFERE WITH THE ORDERS OF THE LOWER AUTHORITIES ON THIS ISSUE. ACCORDINGLY , THE ADDITION OF RS.2,52,000 IS CONFIRMED AND THE ASSESSEES GROUNDS ON THIS ISS UE ARE ACCORDINGLY REJECTED. 65. GROUND NO.2 RELATES TO DISALLOWANCE OF CASH IN HAND TO THE EXTENT OF RS.2,85,900. 66 IN THE COURSE OF THE ASSESSMENT PROCEEDINGS, WH ILE THE ASSESSING OFFICER WAS EXAMINING THE SOURCE OF INVESTMENT IN T HE PURCHASE OF THE PROPERTY BY THE ASSESSEE AND FAMILY MEMBERS, THE AS SESSEE STATED THAT HER SHARE OF INVESTMENT IN THE PURCHASE OF PROPERTY IS RS.32,00,900, WHICH WAS EXPLAINED IN THE FOLLOWING MANNER- ITA NO.1139/HYD/2012 & SEVEN OTHERS SHRI SHIV KUMAR SHARMA & 3 ORS, HYDERABAD . 32 ___________________________________________ _____ 1. 1. OWN FUND OUT OF EARLIER SAVINGS RS.4,85,900 2, DRAWINGS FROM RMR PEARLS RS.7,15,000 3. HAND-LOAN FROM JANATA CONSTRUCTIONS RS.5,0 0,000 4, HAND-LOAN FROM MANJU SHARMA RS.2,00,000 5, HAND-LOAN FROM VANITA AGARWAL RS.5,00,000 6. HAND-LOAN FROM SMT. BASANTHI DEVI TOSHNIWAL RS.6,00,000 7. HAND-LOAN FROM SUNIL DAYAL DADU RS. 2,00,000 TOTAL RS.32,00,900 67. SO FAR AS THE AMOUNT OF RS.4,85,900 IS CONCER NED, THE ASSESSEE EXPLAINED THAT THE AMOUNT WAS OUT OF ACCUMULATED SA VINGS. THE ASSESSING OFFICER HOWEVER, AFTER EXAMINING THE RETURN OF INCO ME FILED BY THE ASSESSEE FOR THE ASSESSMENT YEARS 2003-04 TO 2006-07 FOUND T HAT FOR THE FOUR ASSESSMENT YEARS, THE ASSESSEE DECALED A TOTAL INCO ME OF RS.3,50,060 ONLY. THE ASSESSING OFFICER CONSIDERING THE SMALLNESS OF THE INCOME DECLARED OVER A PERIOD OF FOUR ASSESSMENT YEARS NOTED ABOVE, CONC LUDED THAT THE ASSESSEE COULD NOT HAVE ANY ACCUMULATED SAVINGS OF THE AMOUN T STATED TO HAVE BEEN AVAILABLE WITH HER. THE ASSESSING OFFICER THEREFORE , MADE ADDITION OF THE ENTIRE AMOUNT OF RS.4,85,900. 68. ON APPEAL, THE CIT(A), AFTER TAKING INTO CONSI DERATION THE INCOME DECLARED BY THE ASSESSEE IN HER RETURN OF INCOME FR OM THE ASSESSMENT YEARS 2003-04 TO 2006-07, AGREED WITH THE ASSESSING OFFIC ER THAT THE ASSESSEE COULD NOT HAVE SAVED THE AMOUNT OF RS.4,85,900 CONS IDERING THE INCOME DECLARED BY HER IN THE EARLIER ASSESSMENT YEARS. T HE CIT(A) HOWEVER, GIVING BENEFIT OF SAVINGS TO THE EXTENT OF RS.2,00,000, SU STAINED THE BALANCE ADDITION OF RS.2,85,900. STILL AGGRIEVED, ASSESSE E IS IN APPEAL BEFORE US. ITA NO.1139/HYD/2012 & SEVEN OTHERS SHRI SHIV KUMAR SHARMA & 3 ORS, HYDERABAD . 33 69. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSE D THE MATERIALS ON RECORD. IT IS SEEN FROM THE RECORD THAT THE ASSE SSING OFFICER HAS DISBELIEVED THE CLAIM OF THE ASSESSEE IN ITS ENTIRE TY. HOWEVER, THE CIT(A) AFTER CONSIDERING THE EXPLANATION SUBMITTED BY THE ASSESSEE AND ALSO KEEPING IN VIEW THE FACT THAT POSSIBILITY OF HAVING MADE SOME AMOUNT OF SAVINGS OUT OF HER INCOME EARNED IN THE EARLIER ASS ESSMENT YEARS, HAS ALLOWED A RELIEF OF RS.2 LAKHS. THE ASSESSEE HAS V IRTUALLY MADE THE SAME CONTENTIONS AS WERE RAISED BEFORE THE CIT(A), ON CO NSIDERATION OF WHICH THE CIT(A) HAS GIVEN PARTIAL RELIEF. CONSIDERING THE TO TALITY OF FACTS AND CIRCUMSTANCES OF THE CASE, WE FEEL THAT THE RELIEF GRANTED BY THE CIT(A) IS QUITE REASONABLE, AND THERE IS NO JUSTIFICATION FOR ANY INTERFERENCE FROM US WITH THE ORDER OF THE CIT(A) ON THIS ASPECT. WE ACCORDINGLY UPHOLD THE ORDER OF THE CIT(A), AND REJECT THE GROUNDS OF THE ASSESSEE ON THIS ISSUE. 70. ASSESSEES GRIEVANCE IN GROUND NO.3, 4 AND 5 I S AGAINST THE ADDITION OF RS.2,00,000 REPRESENTING HAND-LOAN FRO M SMT. MANJU SHARMA; AND RS.2,00,000 BEING LOAN TAKEN FROM SHRI SUNIL DA YAL DADU, WHICH HAVE BEEN SUSTAINED BY THE CIT(A) OUT OF THE ADDITIONS M ADE BY THE ASSESSING OFFICER UNDER S.68 OF THE ACT. 71. AT THE OUTSET, WE MAY NOTE THAT THE FACTS OF T HE CASE AND THE CONTENTIONS OF THE PARTIES IN THE CONTEXT OF THE LO AN TAKEN BY THE ASSESSEE FROM SHRI SUNIL DAYAL ARE IDENTICAL TO THOSE CONSID ERED BY US IN THE CONTEXT OF CORRESPONDING ADDITION MADE IN THE CASE OF SHRI SHI V KUMAR SHARMA, WITH WHICH WE HAVE DEALT WITH, WHILE DEALING WITH THE CO RRESPONDING GROUND OF THAT ASSESSEE IN HIS APPEAL, ITA NO.1139/HYD/2012, IN PARAS 34 TO 37 HEREINABOVE, HENCE, FOR THE DETAILED REASONS DISCUS SED IN PARA 37 HEREINABOVE, WE SUSTAIN THE ADDITION MADE BY THE A SSESSING OFFICER AND CONFIRMED BY THE CIT(A), REJECTING THE GROUND OF TH E ASSESSEE IN THIS BEHALF. ITA NO.1139/HYD/2012 & SEVEN OTHERS SHRI SHIV KUMAR SHARMA & 3 ORS, HYDERABAD . 34 72. AS FOR THE HAND-LOAN OF RS.2,00,000 ALLEGEDLY TAKEN BY THE ASSESSEE FROM SMT.MANJU SHARMA, FACTS IN BRIEF ARE THAT WHILE EXPLAINING THE AFORESAID CASH CREDIT, THE ASSESSEE HAS SUBMITTED A CONFIRMATION LETTER FROM THE SAID CREDITOR ALONGWITH A COPY OF THE RETURN OF INCOME FILED BY HER. IN THE CONFIRMATION LETTER, THE CREDITOR HAS CLAIMED TO HA VE GIVEN THE AFORESAID LOAN OF RS.2 LAKHS THROUGH A DEMAND DRAFT DATED 28.10.20 06 DRAWN ON UNION BANK OF INDIA. THE ASSESSING OFFICER OBSERVING THAT TH E ASSESSEE HAS FAILED TO ESTABLISH THE CREDITWORTHINESS OF THE SAID CREDITOR , ADDED THE AMOUNT OF RS.2 LAKHS UNDER S.68 OF THE ACT. IN THE COURSE OF TH E APPEAL PROCEEDINGS, THE CIT(A) ASKED THE ASSESSEE TO FURNISH THE DETAILS OF REPAYMENT OF LOAN AMOUNT TO THE CREDITOR. SINCE THE ASSESSEE DID NOT FURNIS H THE REQUIRED DETAILS, THE CIT(A) CONFIRMED THE ADDITION BY OBSERVING THAT THE NON-REPAYMENT OF LOAN GIVES RISE TO DOUBT ABOUT THE GENUINENESS OF THE LO AN ALLEGEDLY TAKEN BY THE ASSESSEE. 73. WE HEARD BOTH SIDES AND PERUSED THE MATERIALS AVAILABLE ON RECORD. IT IS SEEN FROM THE CONFIRMATION LETTER TH AT THE AFORESAID CREDITOR IS THE OWN SISTER OF THE ASSESSEE. FROM THE BANK ACCOU NT STATEMENT, SUBMITTED IN THE PAPER-BOOK, OF THE CREDITOR SMT. MANJU SHARM A, IT IS SEEN THAT AS ON 1.10.2006, SHE WAS HAVING AN OPENING BANK BALANCE O F RS.3,94,027 AND ON THE DAY THE LOAN WAS GIVEN BY HER TO THE ASSESSEE T HROUGH DD BY WITHDRAWING FROM THE AFORESAID BANK ACCOUNT, THE SA ID CREDITOR WAS HAVING A BALANCE OF RS.2,85,283.00. THE RETURN FILED FOR TH E ASSESSMENT YEAR 2007-08 ALSO REVEALS THAT THE SAID CREDITOR HAS DECLARED A TOTAL INCOME OF RS.3,18,686, WHICH IS QUITE SUBSTANTIAL. CONSIDERING TOTALITY O F FACTS AND CIRCUMSTANCES OF THE CASE, MORE PARTICULARLY THE FACT THAT THE CREDI TOR IN QUESTION, WHO IS OWN SISTER OF THE ASSESSEE, IS AN INCOME-TAX ASSESSEE H AVING SUBSTANTIAL INCOME, AND WAS HAVING ENOUGH BANK BALANCE AS ON THE RELEVA NT DATE WHEN THE LOAN ITA NO.1139/HYD/2012 & SEVEN OTHERS SHRI SHIV KUMAR SHARMA & 3 ORS, HYDERABAD . 35 IN QUESTION IS CLAIMED TO HAVE BEEN ADVANCED BY HER TO THE ASSESSEE, WE FIND THAT THE ASSESSEE CAN BE STATED TO HAVE ESTABLISHED NOT ONLY THE IDENTITY OF THE CREDITOR, BUT ALSO HER CREDIT-WORTHINESS, BESID ES GENUINENESS OF THE TRANSACTION. WE ACCORDINGLY DELETE THE ADDITION O F RS.2,00,000 MADE BY THE ASSESSING OFFICER UNDER S.68 OF THE ACT AND CONFIRM ED BY THE CIT(A) ON THIS COUNT, DULY ALLOWING THE GROUND OF THE ASSESSEE ON THIS ISSUE. 74. IN THE RESULT, THIS APPEAL OF THE ASSESSEE, BE ING ITA NO.1140/HYD/2012 IS PARTLY ALLOWED. REVENUES APPEAL : ITA NO.1131/HYD/2012 : ASSESSMENT YEAR 2007-08 75. THE GRIEVANCE OF THE REVENUE IN THE GROUNDS RA ISED IN THIS APPEAL RELATES TO ADDITIONS OF RS.6 LAKHS BEING THE LOAN T AKEN FROM SMT. BASANTHI DEVI TOSHNIWAL; OF RS.5,00,000 BEING THE LOAN TAKEN FROM SHRI MD. SIRAJUDDIN, PROP. OF JANATA CONSTRUCTIONS; AND OF R S.5,00,000 BEING THE LOAN TAKEN FROM MS.VANITHA AGARWAL, UNDER S.68 OF THE A CT, WHICH HAVE BEEN DELETED BY THE CIT(A). 76. FACTS OF THE CASE IN RELATION TO THIS GROUND A RE THAT IN THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE WHILE EXPLA INING THE SOURCE OF HIS SHARE OF INVESTMENT IN THE PURCHASE OF THE PROPERTY , STATED TO HAVE TAKEN THE LOANS INTER-ALIA FROM THE AFORESAID PARTIES. THE A SSESSING OFFICER IN THE COURSE OF ASSESSMENT PROCEEDINGS, WHILE EXAMINING T HE GENUINENESS OF THE LOAN TRANSACTIONS IN THE CASE OF THE THREE CREDITOR S IN QUESTION, NOTICED FROM THE BANK ACCOUNT COPIES FILED BEFORE HIM THAT SMT. BASANTHI DEVI TOSHNIWAL HAD DEPOSITED CASH OF RS.6 LAKHS IN HER BANK ACCOUN T ON 17.10.2006 AND ON 19.10.2006, A CHEQUE OF THE SAME AMOUNT WAS ISSUED IN FAVOUR OF THE ASSESSEE. HE FURTHER NOTED THAT THERE ARE NO OTHER HUGE CASH DEPOSITS ITA NO.1139/HYD/2012 & SEVEN OTHERS SHRI SHIV KUMAR SHARMA & 3 ORS, HYDERABAD . 36 NOTICED IN THE SAID BANK ACCOUNT OF THE CREDITOR. T HE ASSESSING OFFICER FURTHER OBSERVED THAT THE CREDITOR HAS DISCLOSED A MEAGER I NCOME OF RS.1,31,530 IN HER RETURN OF INCOME FILED FOR THE ASSESSMENT YEAR 2007-08. ON THE BASIS OF THESE FACTS, HE CAME TO THE CONCLUSION THAT THE CRE DITOR DOES NOT HAVE THE CREDIT-WORTHINESS OF ADVANCING SUCH A HUGE AMOUNT O F INTEREST-FREE UNSECURED LOAN. HE THEREFORE, ADDED THE AMOUNT OF RS. 6 LAKHS UNDER S.68 OF THE ACT. THE CIT(A) FOUND AS A MATTER OF FACT T HAT THE CREDITOR, SMT.BASANTHI DEVI HAD REFLECTED THE LOAN TRANSACTIO N IN THE STATEMENT ACCOMPANYING THE RETURNS OF INCOME FILED FOR THE AS SESSMENT YEAR 2007-08 AND ALSO THE FACT THAT SHE HAD CHARGED INTEREST OF RS.24,750 ON THE LOAN ADVANCED, WHICH HAS ALSO BEEN OFFERED TO TAX. BESI DES, HE NOTED, THE ENTIRE LOAN AMOUNT HAS BEEN REPAID BY THE ASSESSEE TO THE CONCERNED CREDITOR, VIDE CHEQUE NOS.378061, 378062 AND 378063 DATED 31.12.20 07. HE THEREFORE, ACCEPTED THE GENUINENESS OF THE TRANSACTION AND DEL ETED THE ADDITION. 77. SO FAR AS LOAN OF RS.5,00,000 FROM JANATA CON STRUCTION CO. IS CONCERNED, THE ASSESSING OFFICER ADDED THE AMOUNT U NDER S.68 OF THE ACT, OBSERVING THAT THE ASSESSEE HAS NEITHER FURNISHED A NY CONFIRMATION LETTER, NOR THE BANK ACCOUNT COPY OF THE CREDITOR, TO EXAMINE T HE SAID TRANSACTION. BEFORE THE CIT(A), THE ASSESSEE DISPUTED THE FINDIN G OF THE ASSESSING OFFICER THAT NO EVIDENCE WAS PRODUCED BEFORE HIM WITH REGAR D TO THE AFORESAID LOAN TRANSACTION. THE CIT(A) ON EXAMINING THE BANK ACCO UNT COPY OF THE SAID CREDITOR FOUND THAT THE AFORESAID AMOUNT OF RS.5 LA KHS WAS GIVEN AS A LOAN TO THE ASSESSEE BY ISSUING A CHEQUE FROM THE AFORESAID BANK ACCOUNT IN FAVOUR OF THE ASSESSEE. IT WAS FURTHER FOUND BY THE CIT(A ) THAT THE ASSESSEE HAS ALSO RETURNED BACK THE LOAN AMOUNT TO THE CONCERNED CREDITOR, VIDE CHEQUE NO.551117 DRAWN ON VIJAYA BANK, BASHEERBAGH BRANCH, WHICH FACT HAS ALSO BEEN CONFIRMED BY THE SAID CREDITOR. THE CIT(A) TH EREFORE, HOLDING THE SAID LOAN TRANSACTION TO BE GENUINE, DELETED THE ADDITIO N OF RS.5 LAKHS. ITA NO.1139/HYD/2012 & SEVEN OTHERS SHRI SHIV KUMAR SHARMA & 3 ORS, HYDERABAD . 37 78. SIMILARLY, AS FOR THE LOAN OF RS.5,00,000 FRO M MS. VANITHA AGARWAL, THE ASSESSING OFFICER OBSERVED THAT THOUGH THE SAID CREDITOR HAS CONFIRMED THAT SHE HAD ADVANCED THE LOAN OF RS.5 LA KHS BY CHEQUE NO.123641 DATED 10.11.2006, NO BANK ACCOUNT COPY OF THE CREDITOR WAS FURNISHED. THE ASSESSING OFFICER FURTHER OBSERVED THAT THE SAID CREDITOR HAS DISCLOSED AN INCOME OF RS.1,29,943 ONLY IN HER RETU RN OF INCOME FIELD FOR THE ASSESSMENT YEAR 2007-08. THE ASSESSING OFFICER CAM E TO THE CONCLUSION THAT A PERSON HAVING SUCH MEAGER INCOME CANNOT HAVE THE CREDITWORTHINESS TO LEND AS MUCH AS RS.5 LAKHS TO THE ASSESSEE. HE, THE REFORE, ADDED THE AMOUNT OF RS.5,00,000 TO THE TOTAL INCOME OF THE ASSESSEE. THE CIT(A) IN THE COURSE OF THE APPEAL PROCEEDINGS FOUND THAT NOT ONLY THE CREDITOR, MS.VANITHA AGARWAL REFLECTED THE LOAN TRANSACTION IN THE RETUR N FILED FOR THE ASSESSMENT YEAR 2007-08, BUT THE ENTIRE LOAN AMOUNT HAS BEEN R EPAID BY THE ASSESSEE TO THE CONCERNED CREDITOR BY CHEQUE NO.551122 DRAWN ON STATE BANK OF PATIALA, ABIDS BRANCH. A CONFIRMATION LETTER TO THIS EXTENT FROM THE CREDITOR WAS ALSO SUBMITTED BEFORE THE CIT(A). THE CIT(A), ON CONSID ERING THE FACT THAT THE CREDITOR IS AN INCOME-TAX ASSESSEE AND THE ENTIRE L OAN TRANSACTION HAS BEEN DISCLOSED IN HER INCOME-TAX RETURN, HELD THAT THE G ENUINENESS OF THE TRANSACTION CANNOT BE DOUBTED. HE THEREFORE, DELE TED THE ADDITION OF RS.5 LAKHS MADE BY THE ASSESSING OFFICER IN THIS BEHALF. 79. AGGRIEVED BY THE RELIEFS GRANTED BY THE CIT(A) IN RESPECT OF THE ABOVE THREE LOANS, REVENUE PREFERRED THE PRESENT AP PEAL BEFORE US. 80. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSE D THE ORDERS OF THE LOWER AUTHORITIES AND OTHER MATERIAL ON RECORD. WE HAVE ALSO APPLIED OUR MIND TO THE DECISIONS CITED BY THE LEARNED AUTHORI SED REPRESENTATIVE FOR THE ASSESSEE. FROM THE MATERIALS ON RECORD, WE FIND TH AT IN CASE OF SMT.BASANTI DEVI TOSHNIWAL, IMMEDIATELY PRIOR TO THE ISSUANCE O F THE CHEQUE TO THE ITA NO.1139/HYD/2012 & SEVEN OTHERS SHRI SHIV KUMAR SHARMA & 3 ORS, HYDERABAD . 38 ASSESSEE, SHE HAS DEPOSITED CASH OF RS.6 LAKHS INTO HER BANK ACCOUNT, AND EXCEPT FOR THIS, THERE WAS NO OTHER CASH DEPOSIT OF SUCH MAGNITUDE MADE INTO HER BANK ACCOUNT. THE INCOMES DISCLOSED IN THE RETU RNS FILED FOR THE ASSESSMENT YEAR 2007-08 BY SMT. BASANTI DEVI TOSHNI WAL AND MS. VANITHA AGARWAL, WERE SO MEAGER THAT THE SAME DO NOT INFUS E CONFIDENCE AS TO THE CREDITWORTHINESS OF THOSE CREDITORS, SO AS TO ENAB LE THEM TO ADVANCE HUGE AMOUNTS OF RS.5,00,000 TO RS.6,00,000 TO THE ASSES SEE. SO FAR AS LOAN TAKEN FROM JANATA CONSTRUCTION CO. IS CONCERNED, NO THING WAS PRODUCED BEFORE THE ASSESSING OFFICER TO PROVE THE CREDIT-WO RTHINESS OF THE CONCERNED CREDITOR. IT IS EVIDENT FROM THE MATERIAL ON RECO RD THAT THE ASSESSEE AND HIS OTHER FAMILY MEMBERS HAVE INDULGED IN AVAILING UNSE CURED LOANS FROM CERTAIN PERSONS IN A SYSTEMATIC AND ORGANIZED MANNER, SO AS TO EXPLAIN AWAY THE UNEXPLAINED INVESTMENTS MADE BY THEM IN THE PURCHAS E OF THE IMMOVABLE PROPERTY. AS FOR THE CASE-LAW RELIED UPON BY THE LE ARNED COUNSEL FOR THE ASSESSEE, IT IS PERTINENT TO NOTE THAT THE RATIO O F A DECISION IS APPLICABLE IN RESPECT OF THE FACTS DECIDED IN THAT CASE. IF THE FACTS ARE NOT IDENTICAL WITH THOSE CONSIDERED IN A PARTICULAR CASE, THE RATIO OF THAT DECISION CITED BY THE PARTIES CANNOT BE MADE APPLICABLE. THE HONBLE SUP REME COURT IN THE CASE OF SUMATI DAYAL V/S. CIT (214 ITR 801) HAS OBSERVED TH AT IF A CREDIT IS FOUND IN THE BOOKS OF ACCOUNT OF THE ASSESSEE AND IN THE OPI NION OF THE ASSESSING OFFICER, THE EXPLANATION OFFERED BY THE ASSESSEE AB OUT THE NATURE AND SOURCE OF SUCH DEPOSITS IS NOT SATISFACTORY, THEN ADDITION CAN BE MADE UNDER S.68 OF THE ACT. IN THE PRESENT CASE, THERE IS SERIOUS DOU BT RAISED REGARDING THE CREDITWORTHINESS OF THE CONCERNED CREDITORS AND THE GENUINENESS OF THE TRANSACTIONS. IN THE ABSENCE OF SATISFACTORY EXPLA NATION FROM THE ASSESSEE, TO FULFIL THE AFORESAID TWO INGREDIENTS FOR PROVING THE GENUINENESS OF A CREDIT, THE ASSESSING OFFICER WAS JUSTIFIED IN MAKING THE A DDITION UNDER S.68 OF THE ACT. THE CIT(A) BY MAINLY CONSIDERING THE FACT T HAT THE CREDITORS HAVE FILED THE RETURNS OF INCOME, DECLARING THE LOAN TRANSACTI ONS IN QUESTION AND THE ITA NO.1139/HYD/2012 & SEVEN OTHERS SHRI SHIV KUMAR SHARMA & 3 ORS, HYDERABAD . 39 ASSESSEE HAS REPAID THE LOAN AMOUNTS BY CHEQUE, HAS DELETED THE ADDITION MADE BY THE ASSESSING OFFICER. THESE FACTORS ALON E DO NOT ESTABLISH EITHER THE GENUINENESS OF THE TRANSACTIONS OR THE CREDITWO RTHINESS OF THE CONCERNED CREDITORS. HENCE, THIS APPROACH OF THE CIT(A), IN OUR CONSIDERED VIEW, IS NOT CORRECT AND HENCE CANNOT BE ACCEPTED. IN THIS VIEW OF THE MATTER, WE SET ASIDE THE IMPUGNED ORDER OF THE CIT(A) ON THIS ASPE CT, AND RESTORE THE ADDITIONS UNDER S.68 OF THE ACT MADE BY THE ASSESSI NG OFFICER IN RELATION TO THESE THREE CREDITORS. 81. IN THE RESULT, THIS APPEAL OF THE REVENUE, BEI NG ITA NO.1131/HYD/2012, IS ALLOWED. 82. TO SUM UP, WHILE ASSESSEES APPEALS IN ITA NOS . 1141/HYD/12, 1140/HYD/12, 1142/H/2012 ARE PARTLY ALLOWED AND IN ITA NO. 1139/HYD/12 IS DISMISSED, ALL THE FOUR APPEALS OF THE REVENUE A RE ALLOWED. ORDER PRONOUNCED IN THE COURT ON 7.12.2012 SD/- SD/- (CHANDRA POOJARI) (SAKTIJIT DEY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED/- 7 TH DECEMBER, 2012 COPY FORWARDED TO: 1. 2. SHRI SHIV KUMAR SHARMA, C/O. M/S. CH.PARTHASARATHI & CO., 1-1-2908/2/B/3, 1SAT FLOOR, SOWBHAGYA AVENUE, ST. NO.1, ASHOK NAGAR, HYDERABAD . SHRI MANOJ KUMAR SHARMA, C/O. M/S. CH.PARTHASARATHI & CO., 1-1-2908/2/B/3, 1SAT FLOOR, SOWBHAGYA AVENUE, ST. NO.1, ASHOK NAGAR, HYDERABAD . ITA NO.1139/HYD/2012 & SEVEN OTHERS SHRI SHIV KUMAR SHARMA & 3 ORS, HYDERABAD . 40 3. 4. SMT. RASHMI SHARMA, C/O. M/S. CH.PARTHASARATHI & C O., 1-1-2908/2/B/3, 1SAT FLOOR, SOWBHAGYA AVENUE, ST. NO.1, ASHOK NAGAR, HYDERABAD . SMT. SUNITHA SAHRMA , C/O. M/S. CH.PARTHASARATHI & CO., 1-1-2908/2/B/3, 1SAT FLOOR, SOWBHAGYA AVENUE, ST. NO.1, ASHOK NAGAR, HYDERABAD . 5 . 6. 7. DY. COMMISSIONER OF INCOME - TAX CENTRAL CIRCLE 2 , HYDERABAD COMMISSIONER OF INCOME-TAX(APPEALS)-I, HYDERABAD COMMISSIONER OF INCOME-TAX CENTRAL HYDERABAD 8 DEPARTMENTAL REPRESENTATIVE, ITAT, HYDERABAD. B.V.S.