Rohit Kumar Jindal (HUF), Ludhiana V. ITO, W-3, Khanna

ITA 1344/CHANDI/2018

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 9666 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 8 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-07-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 20-01-2020
• Assessment Year: 2013-2014
• Appeal Filed On: 29-10-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SANDEEP DHAIYA CIT
• Keywords: Business income; Additional evidence
• Section: 143(3); 43; 13; 22; 144

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, B, CHANDIGARH . . , , BEFORE SHRI N.K. SAINI, VICE PRESIDENT & SHRI SANJAY GARG, JUDICIAL MEMBER ./ ITA NO. 1344/CHD/2018 / ASSESSMENT YEAR : 2013-14 M/S ROHIT KUMAR JINDAL (HUF), PROP M/S R D STEELS, GALI NO.2, NEW BANK COLONY, KHANNA, DISTT. LUDHIANA THE ITO, WARD-3, KHANNA ! ' ./PAN NO: AAOHR3641G !# /APPELLANT $% !# /RESPONDENT &'() /ASSESSEE BY : SHRI SUDHIR SEHGAL, ADVOCATE () / REVENUE BY : SHRI SANDEEP DHAIYA, CIT * +(' ,' /DATE OF HEARING : 20.01.2020 -. (' ,' / DATE OF PRONOUNCEMENT : 06.07.2020 / ORDER PER SANJAY GARG, JUDICIAL MEMBER: THE PRESENT APPEAL HAS BEEN PREFERRED BY THE ASSESS EE AGAINST THE ORDER DATED 28.08.2018 OF THE COMMISSIONER OF INCO ME TAX (APPEALS)- 2. LUDHIANA [HEREINAFTER REFERRED TO AS CIT (A)]. 2. THE ASSESSEE IN THIS APPEAL HAS TAKEN FOLLOWING GROUNDS OF APPEAL: 1. THAT THE WORTHY COMMISSIONER OF INCOME TAX (APPEALS)-2, LUDHIANA HAS ERRED IN CONFIRMING THE A DDITION AMOUNTING TO RS. 2,66,60,000/- MADE BY THE AO VIDE ORDER U/S ITA NO. 1344-C-2018 SHRI ROHIT KUMAR JINDAL, KHANNA 2 143(3) DATED 22.03.2016 AGAINST THE INCOME OF RS. 6 ,25,135/- DECLARED BY THE APPELLANT IN ITS RETURN OF INCOME. 2.(A) THAT THE WORTHY COMMISSIONER OF INCOME TAX (APPEALS)-2, LUDHIANA HAS ERRED IN CONFIRMING THE A DDITION TO THE TUNE OF RS. 1,03,10,000/- ON ACCOUNT OF THE ADD ITIONS IN THE CAPITAL ACCOUNT OF THE ASSESSEE BY HOLDING THE SAME AS UNEXPLAINED ADDITIONS AS HIS FINDING IN PARA 7.6.7 OF THE APPELLATE ORDER. 2.(B) THAT THE WORTHY COMMISSIONER OF INCOME TAX (APPEALS)-2, LUDHIANA HAS ERRED IN UPHOLDING THE AD DITION MADE BY THE AO IN RESPECT OF CAPITAL ADDITION MADE BY THE ASSESSEE IGNORING THE FACT THAT THE COMPLETE SOURCE S OF ADDITION WERE DULY FURNISHED BY THE APPELLANT BEING TRANSFER OF FUNDS FROM M/S EURO STEELS. 2.(C) THAT THE WORTHY COMMISSIONER OF INCOME TAX (APPEALS)-2, LUDHIANA HAS FACTUALLY ERRED IN HOLDIN G THAT THERE WERE ANY CASH DEPOSITS IN THE BANK ACCOUNT OF M/S EURO STEELS AS PER HIS FINDING IN PARA 7.6.5 OF HIS ORDE R. 2.(D) THAT THE WORTHY COMMISSIONER OF INCOME TAX (APPEALS)-2, LUDHIANA HAS ERRED IN CONCLUDING THAT THE ASSESSEE WAS LIABLE TO EXPLAIN THE SOURCE OF DEPOSI TS IN THE HANDS OF M/S EURO STEELS AS PER HIS FINDINGS IN PAR A 7.6.5 OF HIS ORDER. 3. THAT THE WORTHY COMMISSIONER OF INCOME TAX (APPE ALS)-2, LUDHIANA HAS ERRED IN CONFIRMING AN ADDITION TO THE TUNE OF RS. 1,62,50,000/- ON ACCOUNT OF ALLEGED UNEXPLAINED UNSECURED LOANS TAKEN BY THE APPELLANT DURING THE ASSESSMENT YEAR AS PER HIS FINDINGS IN PARA 7.7.9 OF THE APPELLATE ORDER. 4. THAT THE WORTHY COMMISSIONER OF INCOME TAX (APPE ALS)-2, LUDHIANA HAS IGNORED THE DOCUMENTS FILED BEFORE HIM , WHICH CLEARLY DEPICTS IDENTITY. CREDITWORTHINESS OF THE S OURCES OF THE ADDITION TO THE CAPITAL AND ADDITION TO UNSECURED L OANS AND GENUINENESS OF THE TRANSACTIONS. 5. THAT THE WORTHY COMMISSIONER OF INCOME TAX (APPE ALS)-2. LUDHIANA HAS ERRED IN CONFIRMING THE AD-HOC ADDITIO N OF RS. ITA NO. 1344-C-2018 SHRI ROHIT KUMAR JINDAL, KHANNA 3 1,00,000/- ON ACCOUNT OF DISALLOWANCE OF EXPENSES F OR PERSONAL USE. 6. THE APPELLANT CRAVES LEAVE TO ADD OR AMEND THE GROUNDS OF APPEAL BEFORE THE APPEAL IS HEARD AND DISPOSED OFF. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E (HUF) IS ENGAGED IN THE BUSINESS OF TRADING OF IRON AND STEEL UNDER THE NAME AND STYLE OF ITS PROPRIETARY CONCERN NAMELY M/S R.D. STEEL AND H AS FILED ITS RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION ON 26.9.201 3 DECLARING THEREIN AN INCOME OF RS. 6,25,135/-. THE CASE WAS SELECTED FOR SCRUTINY ASSESSMENT U/S 143(3) OF THE INCOME TAX ACT, 1961 ( IN SHORT 'THE ACT'). THE ASSESSING OFFICER GAVE VARIOUS NOTICES TO THE A SSESSEE BUT ON FAILURE OF THE ASSESSEE TO APPEAR OR FILE RELEVANT INFORMATION / EXPLANATION, THE ASSESSING OFFICER PROCEEDED TO FRA ME THE ASSESSMENT EX-PARTE OF THE ASSESSEE U/S 144 OF THE ACT MAKING THE FOLLOWING ADDITIONS:- (I). ADDITION ON ACCOUNT OF UNEXPLAINED ADDITIO N IN CAPITAL ACCOUNT OF THE ASSESSEE HUF RS. 1,03,10, 000/- (II). ADDITION ON ACCOUNT OF UNEXPLAINED UNSECU RED LOANS FOR WANT OF NECESSARY DETAILS RS.2,19,71,000/- (III). ADDITION ON ACCOUNT OF DISALLOWANCE OF INT EREST AMOUNT DEBITED TO THE PROFIT AND LOSS ACCOUNT RS. 7 ,24,475/- (IV). ADDITION ON ACCOUNT OF UNEXPLAINED INVESTME NT IN FIXED ASSETS RS. 7,58,150/- (V). ADDITION ON ACCOUNT OF DISALLOWANCE OF DEPR ECIATION ON NEWLY PURCHASED ASSETS RS. 1,13,722/- ITA NO. 1344-C-2018 SHRI ROHIT KUMAR JINDAL, KHANNA 4 (VI). ADDITION ON ACCOUNT OF DISALLOWANCE OUT OF VARIOUS EXPENSES DEBITED TO PROFIT & LOSS ACCOUNT FOR WANT OF BILLS/VOUCHERS RS. 1,00,000/- 4. BEING AGGRIEVED BY THE ABOVE ORDER OF THE ASSESS ING OFFICER, THE ASSESSEE PREFERRED APPEAL BEFORE THE LD. CIT(A). TH E ASSESSEE ALSO FURNISHED ADDITIONAL EVIDENCES BEFORE THE CIT(A) AN D EXPLAINED REASONS FOR WHICH ITS REPRESENTATIVES COULD NOT APPEAR BEFO RE THE ASSESSING OFFICER. THE LD. CIT(A) ADMITTED THE ADDITIONAL EV IDENCES AND CALLED FOR REMAND REPORT FROM THE ASSESSING OFFICER IN RES PECT OF THE VARIOUS EVIDENCES / EXPLANATION GIVEN BY THE ASSESSEE. AFTE R CONSIDERING THE REMAND REPORT, COUNTER OBJECTIONS OF THE ASSESSEE O N THE SAID REMAND REPORT AND ALSO AFTER CONSIDERING THE SUBMISSIONS O F THE ASSESSEE, THE LD. CIT(A) PARTLY ALLOWED THE APPEAL OF THE ASSESSE E. HE, HOWEVER, HAS CONFIRMED THE ADDITIONS AS CONTESTED VIDE ABOVE NOT ED GROUNDS OF APPEAL. 5. WE HAVE HEARD THE RIVAL CONTENTIONS OF THE LD. A UTHORIZED REPRESENTATIVES OF BOTH THE PARTIES AND HAVE GONE T HROUGH THE RECORD. OUR FINDINGS IN RESPECT OF THE MATTER ARE AS UNDER: 6. GROUND NO.1 : GROUND NO.1 IS GENERAL IN NATURE. THE ASSESSEE, IN THIS GROUND HAS CONTESTED THE TOTAL ADDITION AMOUN TING TO RS. 2,66,60,000/- . HOWEVER THE ASSESSEE VIDE SUBSEQUEN T GROUNDS HAS CONTESTED SPECIFICALLY THE EACH PART OF THE AFORESA ID TOTAL ADDITION . ITA NO. 1344-C-2018 SHRI ROHIT KUMAR JINDAL, KHANNA 5 HENCE THIS GROUND WILL BE AUTOMATICALLY TAKEN CARE IN OUR ADJUDICATION ON THE SUBSEQUENT GROUNDS. 7. GROUND NO.2 : THE ASSESSEE VIDE THIS GROUND HAS CONTESTED THE ADDITION OF RS. 1,03,10,000/- ON ACCOUNT OF INTRODU CTION OF THE SAID AMOUNT IN THE CAPITAL ACCOUNT OF THE ASSESSEE TREAT ING THE SAME AS UNEXPLAINED INCOME OF THE ASSESSEE. THE ASSESSEE C LAIMED THAT OUT OF THE AFORESAID AMOUNT, RS. 90,75,000/- WERE RECEIVED BY WAY OF TRANSFER THROUGH BANKING CHANNELS FROM M/S EURO STEELS. THE SOURCE OF THE AMOUNT IN THE HANDS OF EURO STEELS WAS FROM RECEIPT S IN THE NORMAL COURSE OF BUSINESS VIA BANKING CHANNELS. THE ASSESS EE IN THIS RESPECT FILED COPY OF BANK STATEMENT OF M/S EURO STEELS, CO NFIRMATION IN THIS RESPECT FROM THE SAID ENTITY. THE ASSESSEE FURTHER CLAIMED THAT A SUM OF RS. 2,60 ,000/- WAS TRANSFERRED VIA BANKING CHANNEL FROM PERSONAL SAVI NG ACCOUNT OF SHRI ROHIT JINDAL. IT HAS BEEN FURTHER CLAIMED THAT A SU M OF RS. 5 LACS WAS RECEIVED BY WAY OF TRANSFER FROM THE SAVING BANK AC COUNT OF ASSESSEE IN WHICH THE AMOUNT WAS FURTHER RECEIVED FROM M/S E URO STEELS VIA BANKING CHANNELS. THE ASSESSEE IN THIS RESPECT RELI ED UPON THE SAVING BANK ACCOUNT STATEMENT AND CONFIRMATION FROM THE M/ S EURO STEELS ACKNOWLEDGING THE PAYMENT MADE TO THE ASSESSEE. IN RESPECT OF THE BALANCE PAYMENT OF RS. 4,75,000/-, THE ASSESSEE EXP LAINED THAT THE SAME WAS RECEIVED THROUGH BANKING CHANNELS, HOWEVER , THE ASSESSEE ITA NO. 1344-C-2018 SHRI ROHIT KUMAR JINDAL, KHANNA 6 COULD NOT IDENTIFY THE SOURCE OF THE RECEIPT. THE AO, HOWEVER, IN THE REMAND REPORT HAS MADE THE FOLLOWING OBSERVATIONS I N RESPECT OF EACH OF THE SOURCE EXPLAINED BY THE ASSESSEE. 6. FURTHER AS DIRECTED BY THE APPELLATE AUTHORITY, THE ASSESSEE HAS BEEN AFFORDED OPPORTUNITY TO FURNISH THE ORIGINAL DOCUME NTS FOR VERIFICATION AND COMPLETE SOURCE OF CREDITS MADE IN THE BALANCE- SHEET AS ON 31.3.2013. IN RESPONSE TO THIS LETTER, THE COUNSEL OF THE ASSESSEE, SHRI JIWAN BANSAL, CA APPEARED AND FILED POWER OF ATTORN EY. HE WAS ASKED TO FURNISH THE FOLLOWING DOCUMENTS AND PRODUCE CASH BOOK/LEDGER FOR VERIFICATION: (I) AUDITED BALANCE-SHEET OF M/S. EURO STEELS AS ON 31.03.2013 (II) COPY OF LTR, COMPUTATION OF M/S. EURO STEELS FOR T HE AY.2013-14 (III) COPY OF ACCOUNT OF M/S. R. D. STEELS IN THE BOOKS O F M/S. EURO STEELS DULY CONFIRMED. (IV) ITR, COMPUTATION OF SH. RAMESH JAIN FOR TH E A. Y. 2013-14 THE ASSESSEE HAS FURNISHED THE FOLLOWING DOCUMENTS: (I) COPY OF AUDITED BALANCE-SHEET OF M/S EURO STEELS MA NDI GOBINDGARH FOR THE YEAR ENDING 31.03.2013 WITHOUT PARTNERS CAPITAL ACCOUNT (SCHEDULE 'A'). (II) COPY OF ACCOUNT OF M/S. R. D. STEELS IN THE BOOKS O F M/S. EURO STEELS, MANDI GOBINDGARH FOR THE YEAR ENDING 31.03.2013. (III) COPY OF DEATH CERTIFICATE OF SH. RAMESH JAI N AS COPY OF ITR IS NOT TRACEABLE 7. SINCE THE ASSESSEE HAS NOT FURNISHED THE COPY O F ITR FILED BY M/S. EURO STEELS FOR THE A.Y.2013-14. IN ORDER TO VERIFY THE CREDITWORTHINESS AND GENUINENESS OF THE UNSECURED LOAN GIVEN BY SH. ROHIT JAIN, PARTNER OF M/S. EURO STEELS, THE COPY OF ITRS FOR THE A.YS. 2012-13 AND 2013-14 AND AUDITED BALANCE-SHEET WERE CALLED FOR FROM THE ITO, WARD-1, PATIALA WHERE THE PAN OF THE FIRM WAS LYING. AFTER VERIFICA TION OF DOCUMENTS ITA NO. 1344-C-2018 SHRI ROHIT KUMAR JINDAL, KHANNA 7 SUPPLIED BY THE ASSESSEE AND DOCUMENTS CALLED FOR F ROM ITO, WARD-1, PATIALA, THE FOLLOWING DISCREPANCIES HAVE BEEN NOTI CED: (B) DURING THE YEAR UNDER CONSIDERATION, THE ASSE SSEE HAS INTRODUCED CAPITAL OF RS. 1. 031 CRORES AND OUT OF THIS AMOUNT, RS. 90,75,000/- HAVE BEEN GIVEN BY THE FIRM M/S. EURO S TEELS, MANDI GOBINDGARH. FURTHER THE FIRM M/S EURO STEELS HAS AL SO GIVEN RS. 57,55,000/- IN THE SHAPE OF UNSECURED LOANS. BUT ON PERUSAL OF ITR OF THE FIRM, IT HAS BEEN NOTICED THAT THE FIRM HAS FILED ITR FOR THE A.Y.2013-14 DECLARING AN INCOME OF RS.99,057/- ONLY . HENCE THE CREDITWORTHINESS AND GENUINENESS OF THE LOANS REVIS ED FROM THE FIRM HAS NOT BEEN PROVED. (E) REGARDING CAPITAL FORMATION OF RS.4,75,000/-, THE ASSESSEE HAS SIMPLY STATED THAT THESE AMOUNTS HAVE BEEN RECE IVED THROUGH BANKING CHANNELS, BUT HAS FAILED FURNISH ANY DOCUME NTARY EVIDENCE IN THIS REGARD. (F) REGARDING CAPITAL FORMATION OF RS.2,76,000/-, THE ASSESSEE HAS STATED THAT THESE AMOUNT HAVE BEEN TRANSFERRED FROM THE SAVING BANK ACCOUNT OF ROHIT KUMAR JINDAL THROUGH RTGS, BU T HAS FAILED TO FURNISH ANY DOCUMENTARY EVIDENCE IN THIS REGARD. 8. THE ASSESSEE IN HIS COUNTER OBJECTIONS HAS OBJEC TED TO THE ABOVE OBSERVATIONS OF THE AO IN THE FOLLOWING MANNE R:- B. THE LD. AO HAS ALLEGED THAT THE AMOUNT OF CAPIT AL ADDITION OF RS.90,75,000 AND LOAN OF RS.57,55,000/- HAS BEEN RE CEIVED FROM M/S EURO STEELS, HOWEVER, M/S EURO STEELS HAS ONLY FILED A RETURN OF INCOME DECLARING AN INCOME OF RS. 99,05 7 AND THUS, THE CREDITWORTHINESS OF THE SAID FIRM AND THE GENUINENESS OF THE LOANS RAISED HAS NOT BEEN PROVED . WITH REGARD TO THE SAME, IT IS SUBMITTED THAT MERELY BEC AUSE THE SAID FIRM HAS DECLARED LOWER PROFITS DOES NOT LEAD TO THE CONCLUSION THAT THE CREDITWORTHINESS AND GENUINENES S IS NOT PROVED. IT IS ALSO NOT THE CASE OF THE DEPARTMENT T HAT THE SAID FIRM HAS RECEIVED THE FUNDS GIVEN TO THE ASSESSEE F ROM UNVERIFIED SOURCES, INSTEAD THE SOURCES OF THE FUND S ARE VERY MUCH GENUINE AND HAVE BEEN RECEIVED IN THE REGULAR COURSE OF THE BUSINESS OF THE FIRM. MOREOVER, THE LD. AO H AS ACCEPTED THE BANK STATEMENT AND THE CONFIRMED COPY OF ITA NO. 1344-C-2018 SHRI ROHIT KUMAR JINDAL, KHANNA 8 ACCOUNT ENCLOSED IN THE PAPER BOOK AND NO ADVERSE I NFERENCE HAS BEEN DRAWN BY THE LD. AO WITH REGARD TO THE SAM E. THUS, WHEN THE SOURCE OF THE FUNDS RECEIVED BY THE ASSESS EE STAND DULY EXPLAINED AND DOCUMENTARY EVIDENCES TO THAT EF FECT HAVE BEEN SUBMITTED THEN THE ONUS OF THE ASSESSEE STANDS DISCHARGED AND NO ADDITION CAN BE MADE IN THE HANDS OF THE ASSESSEE. THUS, THE EXPLANATION WITH REGARD TO THE SAME MAY KINDLY BE ACCEPTED IN THE LIGHT OF THE SUBMISSIONS AND THE DOCUMENTS FILED BEFORE YOUR GOODSELF . E. IN POINT E. THE LD. AO CONTENDED THAT THE ASSE SSEE HAS NOT FURNISHED ANY DOCUMENTARY EVIDENCE WITH REGARD TO T HE CAPITAL INFUSION AMOUNTING TO RS.475000, WITH REGAR D TO THE SAME IT IS SUBMITTED THAT DUE TO TIME LAG IN THE DA TE OF CREDIT OF THE SAID AMOUNT IT IS NOT POSSIBLE TO OBTAIN ANY FURTHER INFORMATION REGARDING THE SAID CAPITAL ADDITION AND THUS, IT IS REQUESTED THAT THE SUBMISSIONS ALREADY GIVEN BY THE ASSESSEE MAY KINDLY BE CONSIDERED. F. IN POINT F. THE LD. AO HAS ALLEGED THAT THE AS SESSEE HAS NOT FILED ANY DOCUMENTARY EVIDENCE WITH REGARD TO RS.26 0000 TRANSFERRED FROM THE SAVINGS BANK ACCOUNT OF THE KA RTA OF THE ASSESSEE, HOWEVER, THIS ALLEGATION OF THE LD. AO IS NOT AT ALL CORRECT AS WE HAVE DULY FILED THE COPY OF THE SAVIN GS BANK STATEMENT OF THE KARTA OF THE ASSESSEE ON PAGE 32-3 3 OF THE PAPERBOOK AND FROM A PERUSAL OF THE SAME IT IS CLEA R THAT THE KARTA HAS RECEIVED THE SAID AMOUNT FROM THE BANKING CHANNELS AND NO ADVERSE REMARKS AGAINST THE SAME HA S BEEN GIVEN BY THE LD. AO IN THE REMAND PROCEEDINGS, THER EFORE, THE EXPLANATION GIVEN BY THE ASSESSEE MAY KINDLY BE CON SIDERED AND THE ADDITION WITH REGARD TO THE SAME MAY PLEASE BE DELETED. 9. HOWEVER, THE LD CIT(A) HAS GIVEN HIS FINDINGS IN RESPECT OF EACH OF THE ABOVE ADDITIONS AS UNDER:- 7.6.4 ON CAREFUL CONSIDERATION OF THE RIVAL CONTENTIONS, IT HAS BEEN NOTICED THAT ALTHOUGH THE LEARNED AR OF TH E ASSESSEE ITA NO. 1344-C-2018 SHRI ROHIT KUMAR JINDAL, KHANNA 9 HUF HAS TRIED TO EXPLAIN THE SOURCE OF ADDITION TO CAPITAL ACCOUNT TO THE EXTENT OF RS.98,35,000/- [RS.90,75,000/- + R S.2,60,000/- + RS.5,00,000/-] FROM VARIOUS SOURCES BUT FAILED TO E XPLAIN THE SOURCE OF CAPITAL ADDITION OF RS.4,75,000/-AT ALL. DURING THE COURSE OF APPELLATE PROCEEDINGS, IT HAS ONLY BEEN S UBMITTED THAT THE ADDITION TO CAPITAL ACCOUNT TO THE EXTENT OF RS .4,75,000/- HAS BEEN MADE THROUGH BANKING CHANNELS BUT NO EVIDENCE HAS BEEN ENCLOSED TO PROVE HIS CONTENTIONS. SO, THE ADDITION TO THE EXTENT OF RS.4,75,000/- MADE BY THE ASSESSING OFFICER ON ACCO UNT OF UNEXPLAINED ADDITION TO CAPITAL ACCOUNT OF THE ASSE SSEE HUF OUT OF TOTAL ADDITION OF RS.1,03,10,000/-IS, THEREFORE, UPHELD FOR FAILURE ON THE PART OF THE ASSESSEE HUF TO ADDUCE A NY DOCUMENTARY EVIDENCE IN RESPECT OF SOURCE OF ADDITI ON. 7.6.5 AS REGARDS THE TRANSFER OF FUNDS TO THE EXTENT O F RS.95,75,000/- [RS.90,75,000/-DIRECTLY + RS.5,00,00 0/- INDIRECTLY] FROM THE BANK ACCOUNT OF M/S EURO STEELS IS CONCERN ED, IT HAS BEEN NOTICED THAT THERE ARE NUMEROUS DEPOSITS IN TH E BANK ACCOUNT OF M/S EURO STEELS DURING THE YEAR UNDER CONSIDERAT ION, THE SOURCES OF WHICH HAS NOT BEEN EXPLAINED AND THE SOU RCE OF ADDITION TO CAPITAL ACCOUNT TO THIS EXTENT REMAINED UNEXPLAINED EVEN DURING APPELLATE PROCEEDINGS. THE CONFIRMATION FILED BY M/S EURO STEELS WILL HAVE NO EVIDENTIARY VALUE UNLESS A ND UNTIL THE SOURCE OF CASH DEPOSITS IN THE BANK ACCOUNT OF M/S EURO STEELS ARE EXPLAINED. THE CONTENTION OF THE LEARNED AR OF THE ASSESSEE HUF THAT THE SOURCE IN THE HANDS OF THE ASSESSEE FUF ST AND EXPLAINED AND ACTION IF ANY MAY BE TAKEN IN THE HANDS OF M/S EURO STEELS CANNOT BE ACCEPTED AS THE ONUS CAST UPON THE ASSESS EE HUF TO EXPLAIN THE SOURCE OF DEPOSITS IN THE BANK ACCOUNT OF M/S EURO STEELS HAS NOT BEEN DISCHARGED. AS THE DEPOSITS IN THE BANK ACCOUNT OF M/S EURO STEELS HAVE NOT BEEN EXPLAINED AND AS THE ONUS LIES UPON THE ASSESSEE HUF HAS NOT BEEN DISCHA RGED, THE SOURCE OF CAPITAL CONTRIBUTION TO THE EXTENT OF RS. 95,75,000/- [RS.90,75,0007- DIRECTLY + RS.5,00,0007- INDIRECTLY ] IN THE BOOKS OF ASSESSEE HUF CANNOT BE TREATED AS EXPLAINED. SO, THE ADDITION TO THE EXTENT OF RS.95,75,000/- MADE BY THE ASSESSI NG OFFICER ON ACCOUNT OF UNEXPLAINED ADDITION TO CAPITAL ACCOUNT OF THE ASSESSEE HUF OUT OF TOTAL ADDITION OF RS. 1,03,10,000/- IS A LSO UPHELD. ITA NO. 1344-C-2018 SHRI ROHIT KUMAR JINDAL, KHANNA 10 7.6.6 AS REGARDS THE TRANSFER OF FUNDS TO THE EXTENT O F RS.2,60,000/- FROM THE BANK ACCOUNT OF SH. ROHIT JI NDAL U/G SH. DEV KRISHN GUPTA IS CONCERNED, IT HAS BEEN NOTICED THAT THERE IS AN TRANSFER OF EQUAL AMOUNT OF RS.2,60,000/- IN THE SAME BANK ACCOUNT, THE SOURCES OF WHICH REMAINED UNEXPLAINED EVEN DURING APPELLATE PROCEEDINGS. AS THE DEPOSITS IN THE SAME BANK ACCOUNT TO THE EXTENT OF RS.2,60,000/- HAVE NOT BEEN EXPLAI NED AND AS THE ONUS LIES UPON THE ASSESSEE HUF HAS NOT BEEN DISCHA RGED, THE SOURCE OF CAPITAL CONTRIBUTION TO THE EXTENT OF RS. 2,60,000/- IN THE BOOKS OF ASSESSEE HUF CANNOT BE TREATED AS EXPLAINE D. SO, THE ADDITION TO THE EXTENT OF RS.2,60,000/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED ADDITION TO CAPIT AL ACCOUNT OF THE ASSESSEE HUF OUT OF TOTAL ADDITION OF RS. 1,03, 10,000/- IS UPHELD TOO. 7.6.7 IN NUTSHELL, WHOLE OF THE ADDITION OF RS. 1,03,10,000/- MADE BY THE ASSESSING OFFICER IN THIS ON ACCOUNT OF UNEXPLAINED ADDITION TO CAPITAL ACCOUNT OF THE ASSE SSEE HUF IS, THEREFORE, UPHELD. 10. WE HAVE CONSIDERED THE RIVAL CONTENTIONS OF T HE LD. REPRESENTATIVES OF THE PARTIES AND HAVE ALSO GONE T HROUGH THE RECORD. SO FAR AS THE ADDITION OF RS. 90,75,000/- AND FURTHER A SUM OF RS. 5,00,000/- CLAIMED TO HAVE BEEN RECEIVED FROM M/S E URO STEELS IS CONCERNED, THE AO IN HIS REMAND REPORT, AS NOTED AB OVE, HAS REJECTED THE CONTENTION OF THE ASSESSEE SOLELY ON THE GROUND THA T AS PER THE ITR RETURN OF THE SAID FIRM, THE FIRM HAD DECLARED A LO W INCOME OF RS. 99,057/- ONLY FOR AY 2013-14. HE, ON THIS SCORE A LONE, OBSERVED THAT THE CREDITWORTHINESS AND GENUINENESS OF THE LOAN FR OM THE SAID FIRM HAD NOT BEEN PROVED. HOWEVER, IT IS A FACT MENTIONED IN THE REMAND REPORT ITSELF THAT THE ASSESSEE HAD FURNISHED BEFORE THE A O A COPY OF THE ITA NO. 1344-C-2018 SHRI ROHIT KUMAR JINDAL, KHANNA 11 AUDITED BALANCE SHEET OF M/S EURO STEELS. FURTHER, THE AO, IN ORDER TO VERIFY THE CREDITWORTHINESS OF M/S EURO STEELS AND GENUINENESS OF THE TRANSACTIONS HIMSELF CALLED FOR FROM THE AO OF THE SAID CONCERN. THE AO AFTER VERIFICATION OF THE SAID DOCUMENTS INCLUDI NG AUDITED BALANCE SHEET ETC. COULD NOT FIND ANY FAULT IN THE SAME. TH E AO NEITHER DOUBTED NOR CALLED FOR ANY FURTHER EVIDENCE FROM THE ASSESS EE TO PROVE THE SOURCE OF DEPOSITS IN THE ACCOUNT OF M/S EURO STEELS. HOW EVER, THE ASSESSEE CLAIMED THAT THE SAID RECEIPTS WERE IN NORMAL COURS E OF BUSINESS OF M/S EURO STEELS. THE ASSESSEE FURNISHED ALL THE DETAIL S BEFORE THE AO WHICH WERE REQUIRED TO PROVE THE CREDITWORTHINESS OF M/S EURO STEELS AND GENUINENESS OF THE TRANSACTIONS. SO FAR AS THE CRE DITWORTHINESS OF M/S EURO STEELS WERE CONCERNED, THE ASSESSEE PROVED THA T M/S EURO STEELS WAS POSSESSED OF SUFFICIENT FUNDS TO MAKE THE IMPUG NED ADVANCES TO THE ASSESSEE. EVEN, THE AO HAS NOT POINTED OUT ANY DEFE CT IN THE EVIDENCE FURNISHED BY THE ASSESSEE IN THIS RESPECT. THE ONL Y CONTENTION OF THE AO IN THE REMAND REPORT IS THAT M/S EURO STEELS HAD SH OWN VERY LOW INCOME IN THE ASSESSMENT YEAR 2013-14. IN OUR VIEW, THAT I TSELF IS NOT A GROUND TO REJECT THE CREDITWORTHINESS OF M/S EURO STEELS. AN ASSESSEE, MAY OR MAY NOT, EARN CONSIDERABLE INCOME DURING AN ASSESSM ENT YEAR BUT THAT FACT ITSELF IS NOT DETERMINATIVE OF THE CREDITWORTH INESS / FINANCIAL CAPABILITY OF SUCH AN ASSESSEE. WHEN THE ASSESSEE AND EVEN THE AO HIMSELF HAS CALLED FOR NECESSARY RECORDS FROM HIS C OUNTERPART / AO OF THE SAID CONCERN, BUT COULD NOT FIND ANY DISCREPANC Y OR FAULT IN THE ITA NO. 1344-C-2018 SHRI ROHIT KUMAR JINDAL, KHANNA 12 SAME, HENCE, IN OUR VIEW, THE ACTION OF THE AO IN R EJECTING THE CREDITWORTHINESS OF M/S EURO STEELS SOLELY ON THE G ROUND THAT ITS INCOME FOR THE YEAR UNDER CONSIDERATION WAS LOW, CANNOT BE HELD TO BE JUSTIFIED. SO FAR AS THE IDENTITY OF THE CREDITOR WAS CONCERNE D, THERE WAS NO DOUBT RAISED BY THE AO IN THIS RESPECT. M/S EURO ST EELS WAS AS SEPARATE CONCERN IN WHICH THE ASSESSEE WAS PARTNER AND THE S AME WAS DULY ASSESSED TO THE INCOME TAX. SO FAR AS THE GENUINEN ESS OF THE TRANSACTIONS WAS CONCERNED, EVEN IN THAT RESPECT NO DOUBT HAS BEEN RAISED BY THE AO. ADMITTEDLY, ALL THE AMOUNTS BY M /S EURO STEELS HAS BEEN TRANSFERRED TO THE ASSESSEE THROUGH BANKING CH ANNELS. HOWEVER, THE LD. CIT(A) HAS REJECTED THE CONTENTIONS OF THE ASSESSEE AND UPHELD THE ADDITIONS MADE BY THE AO CITING DIFFERENT REASO NS SAYING THAT THE ASSESSEE COULD NOT PROVE THE SOURCE OF NUMEROUS DEP OSITS IN THE BANK ACCOUNTS OF M/S EURO STEELS. HOWEVER, AS OBSERVED ABOVE, THE AO IN HIS REMAND REPORT HAS NOT POINTED OUT ANY DOUBT ABO UT THE SOURCE OF NUMEROUS DEPOSITS IN THE BANK ACCOUNTS OF M/S EURO STEELS. FURTHER, THE ASSESSEE HAS BEEN STATING THAT THE SOURCE OF SA ID DEPOSITS IN THE ACCOUNTS OF M/S EURO STEELS WAS OUT OF ITS BUSINESS RECEIPTS IN NORMAL COURSE. IN THE REMAND PROCEEDINGS NEITHER THE AO ASKED THE ASSESSEE TO FURNISH FURTHER EVIDENCES IN RESPECT OF THE SOURCE OF DEPOSIT INTO THE ACCOUNTS OF M/S EURO STEELS NOR THE AO HIMSELF CALL ED THE M/S EURO STEELS TO PROVE THE SOURCE OF DEPOSITS. MOREOVER, THE AO HIMSELF CALLED FOR THE NECESSARY DETAILS AND DOCUMENTS FROM THE CO NCERNED AO WHICH ITA NO. 1344-C-2018 SHRI ROHIT KUMAR JINDAL, KHANNA 13 WERE AVAILABLE IN RECORD AS PER THE ITR (INCOME TAX RETURN) FILED BY THE M/S EURO STEELS AND HAS NOT REBUTTED THE AUTHENTICI TY OF THE SAID DOCUMENTS, HENCE, IN THE APPELLATE PROCEEDINGS, THE FINDINGS OF THE CIT(A) UPHOLDING THE ADDITIONS MADE BY THE AO ON TH IS GROUND CANNOT BE HELD TO BE JUSTIFIED. SO FAR AS THE ADDITIONS OF AMOUNT OF RS. 2,60,000/- IS CONCERNED, THE ASSESSEE HAS EXPLAINED THAT THIS AMOUNT HAS BEE N TRANSFERRED FROM THE SAVING BANK ACCOUNT OF SHRI ROHIT KUMAR JINDAL THROUGH RTGS. HOWEVER, THE AO IN THE REMAND REPORT HAS OBSERVED T HAT THE ASSESSEE HAS FAILED TO FURNISH THE DOCUMENTARY EVIDENCE IN T HIS REGARD. IN HIS COUNTER OBJECTIONS, THE ASSESSEE HAS CONTENDED THAT THE COPY OF THE SAVING BANK STATEMENT OF SHRI ROHIT KUMAR JINDAL WA S DULY FILED, COPY OF WHICH WAS PLACED AT PAPER BOOK PAGES 32 & 33. TH E LD. CIT(A), HOWEVER, IN THIS RESPECT HAS OBSERVED THAT THERE WA S TRANSFER OF AN EQUAL AMOUNT OF RS. 2,60,000/- IN THE SAME ACCOUNT, THE S OURCE OF WHICH WAS NOT EXPLAINED. HOWEVER, THE CONTENTION OF THE LD. COUNSEL IN THIS RESPECT HAS BEEN THAT EVEN THE SOURCE OF THE DEPOSI T IN THE SAVING BANK ACCOUNT OF SHRI ROHIT KUMAR JINDAL CANNOT BE DOUBTE D AS ALL THE TRANSACTIONS CARRIED OUT IN THE SAID ACCOUNT WERE T HROUGH BANKING CHANNELS. AS NOTED ABOVE, THE AO HAS NOT GONE THROUGH THE BAN K ACCOUNT STATEMENT FILED BY THE ASSESSEE OF SHRI ROHIT KUMAR JINDAL. HOWEVER, THE CIT(A) DULY NOTED THAT THE SAID AMOUNT OF RS. 2 ,60,000/- WAS ITA NO. 1344-C-2018 SHRI ROHIT KUMAR JINDAL, KHANNA 14 TRANSFERRED FROM THE PERSONAL ACCOUNT OF SHRI ROHIT KUMAR JINDAL. SINCE, NO QUERIES WERE RAISED BY THE AO IN THE REMA ND PROCEEDINGS REGARDING THE SOURCE OF DEPOSIT IN THE SAVING BANK ACCOUNT OF SHRI ROHIT KUMAR JINDAL, THERE WAS NO REASON FOR THE ASSESSEE TO FURNISH THE EVIDENCE RELATING TO THE SOURCE OF SOURCE WITHOUT B EING ASKED FOR. THE LD. CIT(A) SIMPLY NOTED THAT THERE WAS A DEPOSIT IN TO THE SAID ACCOUNT, THEREFORE, HE DOUBTED THE GENUINENESS OF THE TRANSA CTIONS, WHEREAS, THE CLAIM OF THE ASSESSEE HAS THAT ALL THE DETAILS WHAT EVER WERE CALLED FOR, WERE DULY FURNISHED AND THAT THE ALLEGED DEPOSITS I N THE INDIVIDUAL BANK ACCOUNT OF SHRI ROHIT KUMAR JINDAL WERE THROUGH BAN KING CHANNELS. IN OUR VIEW, WHEN THE ASSESSEE HAS PROVED THE SOURCE O F DEPOSIT AND GENUINENESS OF THE TRANSACTIONS, THEREFORE, THE ASS ESSEE WITHOUT BEING CALLED FOR TO PROVE THE SOURCE OF SOURCE BY THE AO WAS NOT SUPPOSED TO FURNISH THE FURTHER DETAILS. NO DOUBT HAS BEEN RAIS ED EITHER BY THE AO OR BY THE CIT(A) REGARDING THE TRANSACTION SO FAR AS T HE RECEIPT OF RS. 2,60,000/- BY THE ASSESSEE FROM SAVING ACCOUNT OF T HE INDIVIDUAL IS CONCERNED. SO FAR AS THE ADDITION OF RS. 4,75,000/- WAS CONC ERNED, THE ASSESSEE ADMITTEDLY COULD NOT PROVE WITH RELIABLE E VIDENCE THE SOURCE OF THE SAID AMOUNT AND THE CREDITWORTHINESS OF THE CRE DITOR AND GENUINENESS OF THE TRANSACTION. ITA NO. 1344-C-2018 SHRI ROHIT KUMAR JINDAL, KHANNA 15 11. IN VIEW OF THE ABOVE DISCUSSION, THE ADDITION T O THE EXTENT OF RS 4,75,000/- IS UPHELD WHEREAS, THE REMAINING PART OF THE ADDITIONS OUT OF THE TOTAL ADDITIONS RS 1,03,10,000/- IS ORDERED TO BE DELETED. THIS GROUND OF THE APPEAL IS ACCORDINGLY PARTLY ALLOWED. 12. GROUND NOS. 3 & 4 : THE ASSESSEE THROUGH THESE GROUNDS OF APPEAL HAS AGITATED THE ADDITION OF RS. 1,62,50,000 /- ON ACCOUNT OF ALLEGED UNEXPLAINED UNSECURED LOANS. THE ASSESSEE I N THIS RESPECT EXPLAINED THAT THE ASSESSEE HUF AVAILED MANY SHORT AND LONG TERM LOANS FROM VARIOUS BANKS AS WELL AS FINANCIAL INSTITUTION S. AS THE POSITION OF THE BUSINESS FURTHER DECLINED, THE ASSESSEE WAS IN DIRE NEED OF FUNDS, THEREFORE, THE BROTHER IN LAW OF THE KARTA OF THE A SSESSEE AND OTHER FAMILY MEMBERS OF THE KARTA OF THE HUF ADVANCED DIF FERENT SUMS OF MONEY TO THE ASSESSEE IN ORDER TO HELP IT OUT OF TH E FINANCIAL CRUNCH. THE ASSESSEE RECEIVED A TOTAL LOAN OF RS 2,19,71,00 0/- FROM THE FAMILY MEMBERS AND FRIENDS OF THE KARTA OF THE HUF. THE AS SESSEE IN THIS RESPECT HAS GIVEN THE DETAILS OF THE PARTIES AS UND ER:- (I). TRANSFERRED FROM M/S KIRAN INDUSTRIES, A PR OPRIETARY CONCERN OF THE MOTHER OF THE ASSESSEE THROUGH M/S DEV KRISHAN JINDAL & SONS 'HUF' RS. 19,95,0 00/- (II). TRANSFERRED FROM M/S EURO STEELS THROUGH MR S. SMRITI JINDAL W/O KARTA OF ASSESSEE 'HUF' RS.20 ,00,000/- (III). TRANSFERRED FROM BANK ACCOUNT OF SH. RAMES H JAIN FATHER-IN-LAW OF THE KARTA OF ASSESSEE 'HUF' RS.54,31,000/- TRANSFERRED FROM M/S EURO STEELS THROUGH . SHRI ROHIT JAIN, KARTA OF ASSESSEE HUF (IV) TRANSFERRED FROM M/S EURO STEELS THROUGH MRS. ITA NO. 1344-C-2018 SHRI ROHIT KUMAR JINDAL, KHANNA 16 SUPERNA JINDAL, SISTER OF THE KARTA OF ASSESSEE HUF RS. 26,55,000/- (V) TRANSFERRED FROM M/S EURO STEELS THROUGH SH. R S. 11,00,000/- ROHIT KUMAR JINDAL, KARTA OF ASSESSEE HUF (VI) THROUGH PERSONAL SAVING BANK ACCOUNT OF SH. RS. 2,90,000/- ROHIT KUMAR JINDAL, KARTA OF ASSESSEE HUF TOTAL RS.2,19,71,000/- 13. THE ASSESSEE IN THIS RESPECT EXPLAINED AS UNDE R:- FROM DEV KRISHAN JINDAL & SONS ('HUF') RS. 9,95,000/- THE SAID ADDITION OF THE UNSECURED LOANS AMOUNTING TO RS. 19,95,000/- WAS RECEIVED FROM DEV KRISHAN JINDA L & SONS ('HUF'). THIS IS EVIDENT FROM THE BANK STATEMENT OF DEV KRISHAN JINDAL & SONS (HUF) ENCLOSED IN THE PAPER BOOK AT PAGE 39-41. FROM A PERUSAL OF THE SAME IT IS CLEAR THAT THE SAID AMOU NT HAS ACTUALLY BEEN RECEIVED FORM M/S KIRAN INDUSTRIE S WHICH IS THE PROPRIETORSHIP OF DEV KRISHAN JINDAL. THE SUMS RECEIVED FROM M/S KIRAN INDUSTRIES HAS WER E ACTUALLY THE LOAN REPAID BY M/S KIRAN INDUSTRIES TO DEV KUMAR JINDAL. TO FURTHER SUBSTANTIATE WE ARE ENCLOSING IN THE PAPER BOOK, THE CONFIRMED C OPIES OF ACCOUNT OF DEV KRISHAN JINDAL & SONS (HUF) EVIDENCING THE TRANSFER OF THE SAID AMOUNT ON PAGE- 36. WE ARE ALSO FILING BEFORE YOUR GOODSELF THE RET URN OF INCOME IN THE PAPER BOOK AT PAGE-38 AND THE CONFIRMED COPY OF ACCOUNT OF DEV KRISHAN JINDAL HUF TO FURTHER SUBSTANTIATE THE GENUINENESS OF THE TRANSACTION. FROM SMITI JINDAL - RS. 20.00.000/- DURING THE YEAR UNDER CONSIDERATION THE ASSESSEE HUF RECEIVED RS. 20 LAKHS AS UNSECURED LOAN FROM MRS. SMITI JINDAL. MRS. SMITI JINDAL IS WIFE OF THE KARTA OF THE ASSESSEE HUF. THE SAID AMOUNT HAS ACTUALLY BEEN PAID BY M/S EURO STEELS ON THE BEHALF OF ITA NO. 1344-C-2018 SHRI ROHIT KUMAR JINDAL, KHANNA 17 SMITI JINDAL AND THE SAME IS EVIDENT FROM THE COLLECTIVE PERUSAL OF THE COPY OF ACCOUNT OF MRS. S MITI JINDAL IN THE BOOKS OF M/S R.D STEELS ENCLOSED IN T HE PAPERBOOK AT PAGES-42 AND THE COPY OF THE BANK STATEMENT ENCLOSED AT PAGES 44-45. IT IS ALSO FOR Y OUR INFORMATION THAT MRS. SMITI JINDAL IS THE SISTER OF ROHIT JAIN PARTNER IN M/S EURO STEELS. WE ARE ALSO FILING BEFORE YOUR GOODSELF THE RETURN OF INCOME IN THE PAPERBOOK AT PAGES- 43 AND THE CONFIRMED COPY O F ACCOUNT OF SMITI JINDAL TO FURTHER SUBSTANTIATE THE GENUINENESS OF THE TRANSACTION. FROM RAMESH JAIN-RS. 54.31.000/- FOR THE ADDITION AMOUNTING TO RS. 54,31,000/-, IT I S SUBMITTED BEFORE YOUR GOODSELF THAT THE SAID AMOUNT WAS LENT BY SH. RAMESH JAIN WHO IS THE FATHER IN LA W OF THE KARTA OF THE ASSESSEE HUF. WE ARE ENCLOSING HEREWITH THE BANK STATEMENT OF RAMESH JAIN FOR THE RELEVANT ASSESSMENT YEAR WHICH MAKES IT AMPLY CLEAR THAT NOT ONLY THE SOURCES OF THE LOAN ARE VERY MUCH VERIFIABLE BUT ARE FROM GENUINE SOURCES. FURTHER, F ROM A PERUSAL OF THE BANK STATEMENT OF SH. RAMESH JAIN IT CAN BE SEEN THAT RS. 34,34,213/- HAS BEEN BROUGHT FORWARD FROM THE EARLIER YEARS. FURTHER, AS EVIDENT FROM THE BANK STATEMENT THE LENDER HAD AVAILED LOAN FROM PNB ON 48-49 AMOUNTING TO RS.33.60 LAKHS OUT OF WHICH FUNDS HAS BEEN ADVANCED TO ASSESSEE. IT IS ALSO FOR YOUR INFORMATION HERE THAT THE LENDER HAD PASSED AWAY ON 24.09.2014 AND WE ARE ENCLOSING HEREWITH THE DEATH CERTIFICATE OF THE LENDER TO EVIDENCE THE SAME. THEREFORE, THE UNSECURED LOAN RECEIVED FROM RAMESH JAIN HAVE BEEN MADE THROUGH VERIFIABLE AND GENUINE SOURCES AND THE SAME SHOULD BE ACCEPTED. FROM ROHIT JAIN - RS. 85.00.000/- SH. ROHIT JAIN IS THE BROTHER IN LAW OF THE KARTA O F THE ASSESSEE HUF. THE SAID AMOUNT HAS BEEN TRANSFERRED FROM M/S EURO STEELS IN WHICH ROHIT JAIN IS PARTNER AND THE SAID TRANSFERS ARE THROUGH THE PROPER BANKI NG ITA NO. 1344-C-2018 SHRI ROHIT KUMAR JINDAL, KHANNA 18 CHANNELS AS BEING REFLECTED IN THE BANK ACCOUNT OF THE ASSESSEE HUF AND M/S EURO STEELS RESPECTIVELY. THE SAME IS EVIDENT FROM THE COPY OF THE BANK STATEMENT OF M/S EURO STEELS ENCLOSED IN THE PAPER BOOK AT PAGES - 52-56. WE ARE ALSO FILING BEFORE YOUR GOODSELF THE RETURN OF INCOME IN THE PAPER BOOK AT PAGES-51 AND THE CONFIRMED COPY OF ACCOUNT OF SH. ROHIT JAIN TO FURTHER SUBSTANTIATE THE GENUINENESS OF THE TRANSACTION. THEREFORE, THERE CANNOT BE ANY DOUBT UPON THE CREDI T WORTHINESS AS WELL AS ON THE GENUINENESS OF THE TRANSACTION. HENCE, THE ADDITION MADE IN THIS RESPE CT IS NOT CALLED FOR AND NEEDS TO BE DELETED. FROM SUPERNA JINDAL - RS. 26.55.000/- DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE AVAILED UNSECURED LOANS AMOUNTING TO RS. 26,55,000/ - FROM MRS. SUPERNA JINDAL. MRS. SUPERNA JINDAL IS TH E SISTER OF THE KARTA OF THE ASSESSEE HUF. THE SAID AMOUNT HAS ACTUALLY BEEN PAID BY M/S EURO STEELS ON THE BEHALF OF SUPERNA JINDAL AND THE SAME IS EVIDEN T FROM THE COLLECTIVE PERUSAL OF THE COPY OF ACCOUNT OF MRS. SUPERNA JINDAL IN THE BOOKS OF M/S R.D STEELS ENCLOSED IN THE PAPERBOOK AT PAGES-62 AND THE COPY OF THE BANK STATEMENT OF M/S EURO STEELS ENCLOSED I N THE PAPER BOOK AT PAGES 64-66. THE SAID AMOUNT HAS BEEN ACCUMULATED BY THE FIRM IN THE REGULAR COURSE OF BUSINESS AND THE SAME IS EVIDENT FROM THE BANK STATEMENT ATTACHED HEREWITH. FURTHER, THE COPY OF INCOME TAX RETURN ALONG WITH THE CONFIRMED COPY OF ACCOUNT IS DULY ATTACHED HEREWITH AT PG 63 OF THE PAPER BOOK. FROM ROHIT KUMAR JINDAL - RS. 13,90.000/- REGARDING THE UNSECURED LOAN OF RS. 13,90,000/-, IT IS SUBMITTED THAT THE SAID AMOUNT HAS BEEN LENT BY SH. ROHIT KUMAR JINDAL HIMSELF I.E., THE KARTA OF THE H UF. OUT OF THE SAID AMOUNT, RS. 11,00,000/- HAS BEEN PA ID BY M/S EURO STEELS ON THE BEHALF OF ROHIT JINDAL WHICH IS EVIDENT FROM THE BANK STATEMENT OF M/S EUR O ITA NO. 1344-C-2018 SHRI ROHIT KUMAR JINDAL, KHANNA 19 STEELS ATTACHED ON PG 59 OF PAPER BOOK. THE SAID AMOUNT HAS BEEN EARNED IN THE REGULAR COURSE OF BUSINESS OF M/S EURO STEELS. FURTHER, THE REMAINING AMOUNT OF RS. 2,90,000/- HAS BEEN LENT FROM THE PERSONAL SAVINGS ACCOUNT OF THE KARTA OF THE ASSESS EE HUF. THE SAID AMOUNT OF RS. 2,90,000/- WAS RECEIVED BY THE ASSESSEE FROM HIS FATHER NAMELY SH. DEV KRISHAN JINDAL. THE SAME IS BEING DULY REFLECTED IN THE ATTACHED BANK STATEMENTS AT PG 60-61 TO OF THE PAPER BOOK. IN ADDITION TO THE ABOVE, THE INCOME TA X RETURN ALONGWITH CONFIRMED COPY OF ACCOUNT IS ATTACHED HEREWITH AT PG _TO _ OF PAPER BOOK. 5.5 IT IS FOR YOUR INFORMATION HERE THAT THE TRANS FER OF FUNDS MADE FROM M/S EURO STEELS HAS BEEN REFLECT ED AS UNSECURED LOANS FROM MRS. SUPERNA JINDAL AND NOT IN ITS OWN NAME DUE TO THE FACT THAT THE ASSESSEE H UF REQUIRED FUNDS IN ORDER TO AVAIL ADDITIONAL LOANS F ROM THE BANK. IN ORDER TO SUBMIT THE DOCUMENTS TO THE BANK, THE ASSESSEE REQUIRED FUNDS IN ITS BALANCE SH EET AND THAT TOO TO INCREASE THE CURRENT RATIO OF THE ASSESSEE. HAD THE ASSESSEE SHOWN THE UNSECURED LOAN FROM A SINGLE PERSON NAMELY, M/S EURO STEELS, THEN THE BANK WOULD HAVE SUSPECTED THE FACT THAT THE TRANSFER OF FUNDS HAS BEEN MADE MERELY TO GET SOME FINANCIAL ASSISTANT FROM THE BANK AND THUS, THE BAN K WOULD NOT HAVE LENT ANY AMOUNT AND/OR PROVIDED ANY KIND OF FINANCIAL ASSISTANCE. HENCE, THE ASSESSEE H AD NO CHOICE BUT TO RESORT TO CLASSIFY THE MONEY RECEI VED FROM M/S EURO STEELS UNDER DIFFERENT HEADS. YOUR GOODSELF WOULD APPRECIATE THE FACT THAT THE ASSESSE E HUF ONLY CLASSIFIED THE FUNDS IN THE NAME OF FAMILY MEMBERS ONLY AND NOT IN THE NAME OF ANY OUTSIDERS S O THAT THE SOURCES OF THE FUNDS IS NOT AT ALL DOUBTED UPON. MOREOVER, WE HAVE EXPLAINED THE IDENTITY & GENUINENESS OF THE LENDERS WITH DOCUMENTARY EVIDENCES & ALSO EXPLAINED THE SOURCE AS WELL AS TH E SOURCE OF SOURCE OF THE TRANSACTIONS OF UNSECURED LOANS RECEIVED BY THE APPELLANT & THUS EVEN THE CRE DIT ITA NO. 1344-C-2018 SHRI ROHIT KUMAR JINDAL, KHANNA 20 WORTHINESS OF THE LENDERS AND SOURCES OF LENDERS STANDS PROVED. 14. THE ASSESSEE FURTHER SUBMITTED THAT SINCE THE N ECESSARY DOCUMENTS SUCH AS COPIES OF THE BANK ACCOUNTS, CONFIRMATIONS ETC. OF THE RESPECTIVE PARTIES HAVE BEEN DULY FURNISHED, HENCE, THE IDENTI TY AND CREDITWORTHINESS OF THE CREDITORS AND GENUINENESS OF THE TRANSACTION S WAS DULY PROVED. HOWEVER, THE AO IN THE REMAND REPORT HAS MADE THE F OLLOWING OBSERVATIONS IN THIS RESPECT. (A) DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE HAS RAISED LOANS OF RS.85 LACS FROM SH. ROHIT JAIN, WHO IS PARTNER OF M/S. EURO STEELS. ON PERUSAL OF CAPITAL ACCOUNT OF SH. ROHIT JAIN, PARTNER, IT HAS BEEN FOUND THAT THE PARTNER'S CAPITAL AS ON 01.04.2012 WAS ONLY RS.72,1 1,236/- WHICH WAS RAISED IN THE A.Y.2013-14 AT RS.1,31,08,2 41/- I.E. AS ON 31.03.2013. IT IS PERTINENT TO MENTION HERE T HAT DURING THE YEAR, SH. ROHIT JAIN, PARTNER HAS WITHDRAWN ONL Y RS.23,20,000/- FROM HIS CAPITAL, WHEREAS AS PER ASS ESSEE'S BOOKS OF ACCOUNTS, RS.85 LACS HAVE BEEN RECEIVED FR OM SH. ROHIT JAIN FROM HIS CAPITAL ACCOUNT. IN VIEW OF THE SE FACTS, THE UNSECURED LOANS RAISED FROM SH. ROHIT JAIN, PAR TNER OF M/S. EURO STEELS ARE NOT GENUINE. (C) FURTHER, THE ASSESSEE HAS FURNISHED DOCUMENTS WITH REGARD TO UNSECURED LOANS RAISED OF RS.54,31,000/-F ROM SH. RAMESH JAIN, WHO HAS SINCE BEEN EXPIRED AND COPY OF ITR HAS NOT BEEN SUPPLIED. IN THIS REGARD, IT IS SUBMIT TED THAT SH. RAMESH JAIN HAVING PAN ADVPJ2567M IS ALSO ASSESSEE OF THIS WARD, WHO HAS NOT FILED ANY ITR FOR THE A.Y.20 13-14. HENCE THE PERSON WHO IS NOT AN ASSESSEE HAS GIVEN A N LOAN OF RS.54,31,000/- CANNOT BE ACCEPTED. HENCE THE SOU RCE OF GIVING LOAN I.E. CREDITWORTHINESS OF SH. RAMESH JAI N HAS ALSO NOT BEEN PROVED BY THE ASSESSEE AND DESERVES T O BE REJECTED. (D) FURTHER THE ASSESSEE HAS SUBMITTED IN HIS WRIT TEN SUBMISSIONS THAT SH. DEV KRISHAN JINDAL HUF HAS GIV EN ITA NO. 1344-C-2018 SHRI ROHIT KUMAR JINDAL, KHANNA 21 UNSECURED LOANS OF RS. 19,95,000/-, WHICH WERE RAIS ED FROM M/S. KIRAN INDUSTRIES, WHICH IS THE PROPRIETORSHIP OF SH. DEV KRISHAN JINDAL. BUT ON CHECKING THE PAN OF M/S. KIRAN INDUSTRIES (AAQPR1921D), IT HAS BEEN FOUND THAT THE PROPRIETOR OF THE CONCERN IS SMT. SANTOSH RANI. BUT THE ASSESSEE HAS NOT PRODUCED THE DOCUMENTARY EVIDENCE WITH REGARD TO THE SOURCE OF THE CONCERN M/S KIRAN INDUS TRIES, WHO HAS GIVEN SUCH LOANS OF RS.L9,95,000/-. HENCE T HE CREDITWORTHINESS HAS NOT BEEN PROVED BY THE' ASSESS EE. 8. IN VIEW THE ABOVE FACTS, IT IS CLEAR THAT THE A SSESSEE HAS KNITTED A CONCOCTED STORY TO JUSTIFY THE CAPITAL FO RMATION AND UNSECURED LOANS RAISED BY HIM FROM M/S. EURO STEELS , SH. ROHIT JAIN, PARTNER OF M/S. EURO STEELS, SH. RAMESH JAIN (PAN:A DVPJ2567M). HOWEVER, DOCUMENTS SUPPLIED BY THE ASSESSEE AND THE DOCUMENTS CALLED FOR FROM ITO, WARD-1, PATIALA ARE SUBMITTED HEREWITH FOR VERIFICATION. HENCE THE ADDITIONAL EVIDENCE PRODUCE D BY THE ASSESSEE AT TIME OF APPELLATE PROCEEDINGS DESERVES TO BE REJ ECTED. 15. AGAINST THE SAID REMAND REPORT, THE ASSESSEE FI LED FOLLOWING COUNTERS OBJECTIONS:- A. THE LD. AO IN POINT A. HAS ALLEGED THAT THE CAP ITAL WITHDRAWAL MADE BY THE ROHIT JAIN (PARTNER OF EURO STEELS) FROM EURO STEELS IS NOT ENOUGH TO JUSTIFY THE UNSEC URED LOANS RECORDED BY THE ASSESSEE AT RS.85 LAKHS IN THE NAME OF ROHIT JAIN IN HIS PERSONAL CAPACITY. WITH REGARD TO THE S AME, IT IS SUBMITTED THAT THE AO HAS NOT APPRECIATED THE SUBMI SSIONS AND DOCUMENTARY EVIDENCES FILED IN THE CORRECT PERS PECTIVE. THE CLEAR FACT THAT EMERGES FROM THE EVIDENCES IN T HE FORM OF BANK STATEMENT OF M/S EURO STEELS IS THAT THE TOTAL AMOUNT OF RS.85 LACS HAS BEEN DEBITED FROM THE SAID FIRM'S BA NK ACCOUNTS AND RECEIVED BY THE ASSESSEE. THE AO HAS A LREADY CALLED FOR THE ITR AND BALANCE SHEET OF THE SAID FI RM FROM THE ASSESSING OFFICER OF M/S EURO STEEL. THE REASON AS TO WHY THE SAID AMOUNT HAS BEEN RECORDED IN THE NAME OF ROHIT JAIN IS BECAUSE HE WAS THE CONCERNED PERSON WHO ARRANGED TH E SAID LOAN FOR THE ASSESSEE AND HE HAS DULY CONFIRMED THE SAME BY WAY OF HIS CONFIRMATION. ACCORDINGLY, ONCE THE SOUR CE OF ITA NO. 1344-C-2018 SHRI ROHIT KUMAR JINDAL, KHANNA 22 FUNDS AND THE IDENTITY IS CLEAR, THE ONUS OF THE AP PELLANT IS DISCHARGED AND HOW THE ENTRIES ARE TREATED/REFLECTE D IN THE BOOKS OF THE LENDER IS NOT UNDER THE CONTROL OF THE ASSESSEE AND THE SAME CANNOT BE A GROUND FOR MAKING ADDITION IN THE HANDS OF THE ASSESSEE. C. IN POINT C THE LD. AO HAS ALLEGED THAT RAMESH J AIN WHO IS ALSO ONE OF THE UNSECURED LOAN CREDITOR HAS NOT FIL ED THE RETURN OF INCOME FOR THE RELEVANT ASSESSMENT YEAR, WITH REGARD TO THE SAME AT THE OUTSET IT IS SUBMITTED TH AT RAMESH JAIN HAD PASSED AWAY ON 24.09.2014 AND IT IS ALSO F OR YOUR INFORMATION THAT TILL THE DATE OF THE LENDER'S DEAT H THERE WAS STILL TIME LEFT TO FILE THE BELATED RETURN AND DUE TO THE UNFORTUNATE DEATH OF THE LENDER THE SAME COULD NOT HAVE BEEN FILED. THUS, THE SAME CANNOT BE ANY WAY SAID TO BE ASSESSEE'S FAULT. MOREOVER, FROM A PERUSAL OF THE BANK STATEME NT OF SH. RAMESH JAIN IT CAN BE SEEN THAT RS. 34,34,213/- HAS BEEN BROUGHT FORWARD FROM THE EARLIER YEARS. FURTHER, AS EVIDENT FROM THE BANK STATEMENT THE LENDER HAD AVAILED LOAN FROM PNB ON 48-49 AMOUNTING TO RS.33.60 LAKHS OUT OF WH ICH FUNDS HAS BEEN ADVANCED TO ASSESSEE. THE LD. AO IN HER REMAND PROCEEDINGS HAVE NOT GIVEN ANY ADVERSE REMAR KS AGAINST THE SAME AND THEREFORE, MERELY BECAUSE THE RETURN OF INCOME HAS NOT BEEN FILED OF A DEAD PERSON, IT CANN OT BE HELD THAT THE CREDITWORTHINESS OF THE SAID LENDER CANNOT BE PROVED WHEN THE SOURCES OF THE LOAN ARE GENUINE AND BONA F IDE. D. IN POINT D THE LD. AO WITH REGARD TO THE LOAN R ECEIVED FROM DEV KRISHAN JINDAL HAS ALLEGED THAT THE SOURCE OF T HE SOURCE OF THE SAID LOAN, WHICH WAS FROM M/S KIRAN INDUSTRI ES IS NOT THE PROPRIETORSHIP CONCERN OF DEV KRISHAN JINDAL, ( AS STATED BY THE ASSESSEE IN THE DETAILED SUBMISSIONS) BUT OF SANTOSH RANI (WIFE OF DEV KRISHAN JINDAL). IN THIS REGARD, IT IS STATED THAT ALTHOUGH DUE TO SOME MISCOMMUNICATION IT HAS B EEN INADVERTENTLY WRITTEN AS PROP CONCERN OF DEV KRISHA N JINDAL WHILE IT IS CORRECT THAT IT IS A PROP CONCERN OF SA NTOSH RANI, BUT IT IS ALSO A FACT HERE THAT IT DOES NOT MAKE MU CH OF A DIFFERENCE BECAUSE THE SOURCES OF THE FUNDS HAVE NE VER BEEN DISPUTED AND NO ADVERSE REMARKS AGAINST THE SAME HA S EVEN BEEN PROVIDED BY THE LD. AO IN THE REMAND REPORT. M OREOVER, ITA NO. 1344-C-2018 SHRI ROHIT KUMAR JINDAL, KHANNA 23 IT IS ALSO FOR INFORMATION HERE THAT THE INCOME AS DECLARED BY SANTOSH RANI IS ALSO SUFFICIENT ENOUGH TO JUSTIFY H ER CREDITWORTHINESS. THUS, THE CONTENTION RAISED BY TH E LD. AO THAT THE CREDITWORTHINESS OF KRIAN INDUSTRIES IS NO T PROVED, IS FRIVOLOUS AND WRONG AND THE EXPLANATION GIVEN BY TH E ASSESSEE DESERVES TO BE ACCEPTED. THEREFORE, ON THE BASIS OF THE ABOVE EXPLANATION, I N VIEW OF THE FACT THAT NO ADVERSE REMARKS HAS ACTUALLY BEEN MADE BY THE LD. AO IN THE REMAND REPORT WITH REGARD TO THE DOCUMENTARY EVIDENCES FILED BY THE ASSESSEE IN THE PAPERBOOK AND CONSIDERING THE REMAND REPORT BY THE LD. AO IT IS CLEAR THAT THE SOURCES FRVM WHICH THE ADVANCES/CAPITAL CO NTRIBUTION HAVE BEEN MADE HAVE NOT BEEN DISPUTED, THEREFORE, I T IS HUMBLY REQUESTED BEFORE YOUR GOODSELF THAT ADDITION MADE BY THE LD. AO MAY PLEASE BE DELETED AND OBLIGE. 16. THE LD. CIT(A) AFTER CONSIDERING THE RIVAL SUBM ISSIONS HAS GIVEN THE FOLLOWING FINDINGS IN RELATION TO THE ISSUE OF UNSE CURED LOANS: - 7.7.5 ON CAREFUL CONSIDERATION OF THE RIVAL CONTENTIONS, IT HAS BEEN NOTICED THAT ALTHOUGH THE LEARNED AR OF THE AS SESSEE HUF HAS TRIED TO EXPLAIN THE SOURCE OF UNSECURED LOANS FROM VARIOUS SOURCES AS MENTIONED ABOVE, BUT I DO NOT FIND ANY F ORCE IN HIS CONTENTIONS IN RESPECT OF MAJORITY OF THE UNSECURED LOANS, THE SOURCE OF WHICH IS EITHER M/S EURO STEELS OR M/S KI RAN INDUSTRIES. AS REGARDS THE TRANSFER OF FUNDS TO THE EXTENT OF R S. 1,42,55,000/- INDIRECTLY FROM THE BANK ACCOUNT OF M/S EURO STEELS IS CONCERNED, IT HAS BEEN NOTICED THAT THERE ARE NUMEROUS DEPOSIT S IN THE BANK ACCOUNT OF M/S EURO STEELS DURING THE YEAR, UNDER C ONSIDERATION, THE SOURCES OF WHICH COULD NOT BE EXPLAINED AND REM AINED UNEXPLAINED EVEN DURING APPELLATE PROCEEDINGS. THE CONFIRMATIONS FILED BY M/S EURO STEELS OF FAMILY ME MBERS OR RELATIVES OF THE KARTA OF ASSESSEE HUF WILL HAVE NO EVIDENTIARY VALUE UNLESS AND UNTIL THE SOURCES OF VARIOUS DEPOS ITS IN THE BANK ACCOUNT OF M/S EURO STEELS ARE EXPLAINED. THE CONTE NTION OF THE LEARNED AR OF THE ASSESSEE HUF THAT THE SOURCE IN T HE HANDS OF ITA NO. 1344-C-2018 SHRI ROHIT KUMAR JINDAL, KHANNA 24 THE ASSESSEE HUF STAND EXPLAINED AND ACTION IF ANY MAY BE TAKEN IN THE HANDS OF M/S EURO STEELS CANNOT BE ACCEPTED AS THE ONUS CAST UPON THE ASSESSEE HUF TO EXPLAIN THE SOURCE OF DEPOSITS IN THE BANK ACCOUNT OF M/S EURO STEELS HAS NOT BEEN DI SCHARGED. AS THE DEPOSITS IN THE BANK ACCOUNT OF M/S EURO STEELS HAVE NOT BEEN EXPLAINED AND AS THE ONUS LIES UPON THE ASSESSEE HUF HAS NOT BEEN DISCHARGED, THE SOURCE OF UNSECURED LOANS IN T HE NAME OF DIFFERENT FAMILY MEMBERS AND RELATIVES TO THE EXTEN T OF RS. 1,42,55,000/- IN THE BOOKS OF ASSESSEE HUF CANNOT B E TREATED AS EXPLAINED. SO, THE ADDITION TO THE EXTENT OF RS. 1, 42,55,000/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED UNSECURED LOANS OUT OF TOTAL ADDITION OF RS.2,19,71,000/- IS, THEREFORE, UPHELD. 7.7.6 AS REGARDS THE TRANSFER OF FUNDS TO THE EXTENT OF RS.2,90,000/- FROM THE BANK ACCOUNT OF SH. ROHIT KU MAR JINDAL, KARTA OF ASSESSEE HUF, IS CONCERNED, IT HAS BEEN NO TICED THAT THE AMOUNT HAS BEEN TRANSFERRED FROM RECEIPTS ON ACCOUN T OF EPF TRANSFER. IT MEANS, THE SOURCE OF RS.2,90,000/- TAK EN BY WAY OF UNSECURED LOAN TO THE EXTENT OF RS.2,90,000/- (OUT OF TOTAL LOAN AMOUNT OF RS. 13,90,000/-) FROM SH. ROHIT KUMAR JIN DAL IS FULLY EXPLAINED. AS THE UNSECURED LOAN TO THE EXTENT OF R S.2,90,000/- (OUT OF TOTAL LOAN AMOUNT OF RS. 13,90,000/-) IS FU LLY EXPLAINED, THE ADDITION TO THE EXTENT OF RS.2,90,000/-MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED UNSECURED LOAN FR OM SH. ROHIT JINDAL CANNOT BE SAID TO BE JUSTIFIED. SO, THE ADDI TION TO THE EXTENT OF RS.2,90,000/- (OUT OF TOTAL LOAN AMOUNT OF RS. 1 3,90,000/-) MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLA INED UNSECURED LOAN OUT OF TOTAL ADDITION OF RS.2,19,71, 000/- IS, THEREFORE, DIRECTED TO BE DELETED. 7.7.7 AS REGARDS THE UNSECURED LOAN OF RS.54,31,000/- F ROM SH. RAMESH JAIN IS CONCERNED, IT HAS BEEN NOTICED THAT THE AMOUNT HAS BEEN TRANSFERRED FROM OPENING BALANCE LYING IN THE SAME BANK ACCOUNT AS WELL AS FROM THE AMOUNT OF LOAN RAISED B Y SH. RAMESH JAIN. IT MEANS, THE SOURCE OF RS.54,31,000/- RAISED BY WAY OF UNSECURED LOAN OF RS.54,31,000/- FROM SH. RAMESH JA IN IS ALSO FULLY EXPLAINED. AS THE UNSECURED LOAN TO THE EXTEN T OF RS.54,31,000/- FROM SH. RAMESH JAIN IS ALSO FULLY E XPLAINED, THE ADDITION TO THE EXTENT OF RS.54,31,000/- MADE BY TH E ASSESSING ITA NO. 1344-C-2018 SHRI ROHIT KUMAR JINDAL, KHANNA 25 OFFICER IN THIS CASE ON ACCOUNT OF UNEXPLAINED UNSE CURED LOAN FROM SH. RAMESH JAIN CANNOT BE SAID TO BE JUSTIFIED . SO, THE ADDITION TO THE EXTENT OF RS.54,31,000/- MADE BY TH E ASSESSING OFFICER IN THIS CASE ON ACCOUNT OF UNEXPLAINED UNSE CURED LOAN OUT OF TOTAL ADDITION OF RS.2,19,71,000/- IS, THEREFORE , ALSO DIRECTED TO BE DELETED. 7.7.8 AS REGARDS THE UNSECURED LOAN TO THE EXTENT OF RS . 19,95,000/- FROM M/S DEV KRISHAN JINDAL & SONS (HUF ) IS CONCERNED, IT HAS BEEN NOTICED THAT THERE ARE TRANS FERS ENTRIES OF EQUAL AMOUNT OF RS. 19,95,000/- IN THE SAME BANK A CCOUNT, THE SOURCES OF WHICH ARE TRANSFERS FROM THE BANK ACCOUN T OF M/S KIRAN INDUSTRIES, A PROPRIETARY CONCERN OF THE MOTH ER OF THE KARTA OF THE ASSESSEE HUF. AS THE SOURCES OF DEPOSITS IN THE BANK ACCOUNT OF M/S KIRAN INDUSTRIES REMAINED UNEXPLAINE D EVEN DURING APPELLATE PROCEEDINGS, IT CANNOT BE SAID THA T THE ASSESSEE HUF HAS DISCHARGED ITS ONUS TO EXPLAIN THE SOURCE O F UNSECURED LOAN FROM M/S DEV KRISHAN JINDAL & SONS (HUF). AS T HE DEPOSITS IN THE BANK ACCOUNT OF M/S KRISHNA INDUSTRIES FROM WHERE THE FUNDS HAVE BEEN TRANSFERRED TO THE BANK ACCOUNT OF M/S DEV KRISHAN JINDAL & SONS (HUF) HAVE REMAINED UNEXPLAIN ED EVEN DURING APPELLATE PROCEEDINGS AND AS THE ONUS LIES U PON THE ASSESSEE HUF HAS NOT BEEN DISCHARGED, THE SOURCE OF UNSECURED LOAN TO THE EXTENT OF RS. 19,95,000/- FROM M/S DEV KRISHAN JINDAL & SONS (HUF) CANNOT BE TREATED FROM EXPLAINED SOURC ES. SO, THE ADDITION TO THE EXTENT OF RS. 19,95,000/- MADE BY T HE ASSESSING OFFICER IN THIS CASE ON ACCOUNT OF UNEXPLAINED UNSE CURED LOAN FROM M/S DEV KRISHAN JINDAL & SONS OUT OF TOTAL ADD ITION OF RS.2,19,71,000/- IS ALSO UPHELD. IT HAS ALSO BEEN N OTICED THAT THE AMOUNT SHOWN IN THE BALANCE SHEET OF M/S EURO STEEL S IN THE NAME OF M/S R.D. STEELS, A PROPRIETARY CONCERN OF THE AS SESSEE HUF, IS ONLY AT RS. 1,18,63,037/-. APART FROM THIS AN AMOUN T OF RS.5,00,000/- HAS BEEN SHOWN AS RECOVERABLE FROM SH . ROHIT KUMAR JINDAL (HUF) BUT NO AMOUNT HAS BEEN SHOWN AS RECOVERABLE FROM ANY OTHER PERSON OF THE ASSESSEE H UF GROUP. THIS ALSO GIVES INDICATION THAT THE AMOUNT RECEIVED BY THE ASSESSEE HUF FROM M/S EURO STEELS IS UNEXPLAINED AS THE SOURCE OF RECEIPTS IN THE BANK ACCOUNT OF THIS CONCERN REM AINED UNEXPLAINED EVEN DURING APPELLATE PROCEEDINGS. ITA NO. 1344-C-2018 SHRI ROHIT KUMAR JINDAL, KHANNA 26 7.7.9 IN NUTSHELL, THE ADDITION OF RS. 1,62,50,000/- [R S. 1,42,55,000/- + RS. 19,95,000/-] MADE BY THE ASSESS ING OFFICER ON ACCOUNT OF UNEXPLAINED UNSECURED LOANS OUT OF TOTAL ADDITION OF RS.2,19,70,000/- IS UPHELD WHEREAS THE BALANCE ADDI TION OF RS.57,21,000/-[RS.2,90,000/- + RS.54,31,000/-] OUT OF TOTAL ADDITION OF RS.2,19,70,000/- IS DELETED. THE ASSESS EE HUF WILL THUS GET A RELIEF OF RS.57,21,000/- OUT OF TOTAL AD DITION OF RS.2,19,70,000/- MADE BY THE ASSESSING OFFICER ON A CCOUNT OF UNEXPLAINED UNSECURED LOANS. 17. WE HAVE HEARD THE RIVAL CONTENTIONS ON THIS ISS UE AND HAVE ALSO GONE THROUGH THE RECORD. SO FAR AS THE OBSERVATION OF THE AO ON THE REMAND REPORT THAT SHRI ROHIT JAIN, PARTNER HAD WIT HDRAWN ONLY RS. 23,20,000/- FROM HIS CAPITAL ACCOUNT, WHEREAS, AS P ER ASSESSEES BOOKS OF ACCOUNTS, RS 85 LACS HAS BEEN RECEIVED FROM SHRI ROHIT JAIN FROM HIS CAPITAL ACCOUNT IS CONCERNED, THE SAME HAS BEEN DUL Y EXPLAINED BY THE ASSESSEE THAT THE AMOUNT IN FACT WAS TRANSFERRED FR OM THE ACCOUNT OF M/S EURO STEELS. THE AO HAD ALREADY CALLED FOR ITR AND BALANCE SHEET OF THE SAID FIRM AND DULY VERIFIED THE SAID TRANSACTION. THE LD CIT(A) HAS NOT DOUBTED GENUINENESS OF THE ABOVE TRANSACTION. THE ONLY REASON FOR WHICH THE LD CIT(A) UPHELD THE ADDITION MADE BY THE AO WAS THAT THE ASSESSEE HAS NOT PROVED THE SOURCE OF NUMEROUS DEPO SITS INTO THE BANK ACCOUNT OF M/S EURO STEELS. WE HAVE ALREADY DISCUS SED ABOUT THIS OBSERVATION MADE BY THE CIT(A) WHILE ADJUDICATING T HE EARLIER GROUND NO. 2 RELATING TO THE AMOUNT RECEIVED BY THE ASSESS EE FROM M/S EURO STEELS. IT IS TO BE OBSERVED HERE THAT UNSECURED LO AN TO THE EXTENT OF RS. ITA NO. 1344-C-2018 SHRI ROHIT KUMAR JINDAL, KHANNA 27 1,42,55,000/- I.E. RS. 20,00,000/- THROUGH SM.T SMR ITI JINDAL, RS. 85,00, 000/- THROUGH SHRI ROHIT JAIN (AS DISCUSSED ABOVE), RS. 26,55,000/- THROUGH SMT. SUPERNA JINDAL, RS. 11,00,000/- THROUG H SHRI ROHIT JINDAL HAS BEEN CLAIMED TO HAVE BEEN RECEIVED FROM M/S EUR O STEELS. THE LD AO AND THE LD CIT(A) HAVE REJECTED THE ABOVE TRANSA CTIONS ON THE BASIS OF IDENTICAL REASON, AS DISCUSSED ABOVE. HOWEVER, IN VIEW OF OUR OBSERVATIONS MADE ABOVE REGARDING THE ISSUE OF CRED ITWORTHINESS OF M/S EURO STEELS, THE ADDITION MADE BY THE LOWER AUTHORI TIES IN RESPECT OF THE LOANS FROM THE ABOVE STATED PARTIES AMOUNTING TO RS . 1,42,55,000/- IS ORDERED TO BE DELETED. THE TRANSACTION RELATING TO THE REMAINING AMOUNT OF RS. 2,90,000/- FROM SHRI ROHIT KUMAR JINDAL STA NDS ACCEPTED BY THE CIT(A). SO FAR AS THE UNSECURED LOAN RAISED OF RS 54,31,000 /- FROM SHRI RAMESH JAIN IS CONCERNED, THE LD CIT(A) HAS ALREADY DELETED THE ADDITION IN THIS RESPECT. SINCE THE PARTIES ARE NO T IN APPEAL IN RESPECT OF THE ABOVE TRANSACTION, HENCE, NO ADJUDICATION IS RE QUIRED IN THIS RESPECT. SO FAR AS THE UNSECURED LOANS RECEIVED FROM SHRI DE V KRISHAN JINDAL (HUF) OF RS. 19,95,000/- IS CONCERNED, THE A O IN HIS REMAND REPORT HAS OBSERVED THAT THE SAID AMOUNT WAS RECEIV ED BY THE SAID CONCERN FROM M/S KIRAN INDUSTRIES AND THAT THE ASSE SSEE HAD FAILED TO PROVE THE SOURCE OF THE SAID CONCERN M/S KIRAN INDU STRIES. HOWEVER, THE ASSESSEE IN HIS COUNTER OBJECTIONS HAS SUBMITTED TH AT THE SAID M/S KIRAN ITA NO. 1344-C-2018 SHRI ROHIT KUMAR JINDAL, KHANNA 28 INDUSTRIES WAS THE PROPRIETORSHIP CONCERN OF SMT. S ANTOSH RANI AND THAT EVEN THE INCOME DECLARED BY SMT. SANTOSH RANI WAS S UFFICIENT ENOUGH TO JUSTIFY HER CREDITWORTHINESS. THE LD CIT(A) IN TH IS RESPECT HAS OBSERVED THAT THERE WERE SOME TRANSFER ENTRIES OF E QUAL AMOUNT OF RS 19,95,000/- IN THE BANK ACCOUNT OF M/S KIRAN INDUST RIES. THAT SINCE THE SOURCE OF DEPOSIT IN THE BANK ACCOUNT OF M/S KIRAN INDUSTRIES REMAINED UNEXPLAINED, HE, THEREFOR E, HELD THAT THE GENUINENESS OF THE TRANSACTION IS NOT PROVED. HOWE VER, IN OUR VIEW, THE FACT THAT THERE WAS SUFFICIENT INCOME DECLARED BY S MT. SANTOSH RANI TO PROVE HER CREDITWORTHINESS OF THE AMOUNT ADVANCED T O M/S DEV KRISHAN JINDAL & SONS HUF, IS ENOUGH EVIDENCE SO FAR AS THE ONUS ON THE ASSESSEE TO PROVE THE CREDITWORTHINESS OF THE CREDI TOR IS CONCERNED. THE ASSESSEE, IN FACT, HAS PROVED THE SOURCE OF SOURCE. THE OBSERVATION OF THE CIT(A) THAT THERE WERE OTHER ENTRIES OF THE EQUAL AMOUNT IN THE BANK ACCOUNT OF M/S KIRAN INDUSTRIES, IN OUR VIEW, IS NO T RELEVANT SO FAR AS THE GENUINENESS OF THE TRANSACTION AND CREDITWORTHI NESS OF THE CREDITOR IN RESPECT OF THE FUNDS RECEIVED BY THE ASSESSEE IS CONCERNED. IN VIEW OF THE ABOVE DISCUSSION MADE, THESE GROUNDS ARE ALLOWED IN FAVOUR OF THE ASSESSEE. 18. GROUND NO. 5 : THIS GROUND IS NOT PRESSED BY THE LD COUNSEL FOR THE ASSESSEE, HENCE, THE SAME IS DISMISSED AS NOT PRESSED. ITA NO. 1344-C-2018 SHRI ROHIT KUMAR JINDAL, KHANNA 29 19. GROUND NO. 6 : THIS GROUND IS GENERAL IN NATURE AND DOES NOT REQUIRE ANY SPECIFIC ADJUDICATION. IN THE RESULT, THE APPEAL OF THE ASSESSEE STANDS PA RTLY ALLOWED. ORDER COULD NOT BE PRONOUNCED EARLIER DUE TO NON-FU NCTIONING OF THE BENCH ON ACCOUNT OF CURFEW / LOCKDOWN IN THE WA KE OF COVID-19 PANDEMIC. ORDER PRONOUNCED ON 06.07.2020. SD/- SD/- ( . . / N.K. SAINI) ( ! ' / SANJAY GARG) #$% / VICE PRESIDENT &' / JUDICIAL MEMBER DATED : 06.07. 2020 .. 0($'1232' / COPY OF THE ORDER FORWARDED TO : 1. !# / THE APPELLANT 2. $% !# / THE RESPONDENT 3. * 4' / CIT 4. * 4' ( )/ THE CIT(A) 5. 25 $'6 , , 6 , 789: / DR, ITAT, CHANDIGARH 6. 9; + / GUARD FILE 0 * / BY ORDER, < / ASSISTANT REGISTRAR ITA NO. 1344-C-2018 SHRI ROHIT KUMAR JINDAL, KHANNA 30