M. Krishna G. Naidu, Solapur V. Income-tax Officer,

ITA 135/PUN/2014

• Counselvise Citation: 13524514 RSA 2014
• Duration Of Justice: 1 year(s) 1 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-02-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 16-10-2014
• Assessment Year: 2007-2008
• Appeal Filed On: 21-01-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Corroborative evidences

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A , PUNE BEFORE: SHRI G.S. PANNU, ACCOUNTANT MEMBER AND SHRI R.S. PADVEKAR, JUDICIAL MEMBER ITA NO . 135 /PN/20 1 4 ASSESSMENT YEAR : 200 7 - 08 M. KRISHNA G. NAIDU, PLOT NO. 129, R AILWAY LINE, SOLAPUR - 413009 VS. THE INCOME TAX OFFICER, WARD - 7(3), PUNE (APPELLANT) (RESPONDENT) PAN NO. AA KPN1089J REVENUE BY: SHRI RAJESH DAMOR ASSESSEE BY: SHRI NARESH KUMAR ORDER PER R.S . PADVEKAR , JM : - TH IS APPEAL IS FILED BY TH E ASSESSEE CHALLENGING THE IMPUGNED ORDER OF THE LD. CIT(A) - I I I , PUNE DATED 04 - 11 - 2013 FOR THE A.Y. 200 7 - 08. THE ASSESSEE HAS TAKEN FOLLOWING GROUNDS IN THE APPEAL: 1. ON THE FACTS AND IN LAW, THE ORDER PASSED BY THE LEARNED CIT (APPEALS) IS BAD IN LAW. 2. THE LEARNED CIT (APPEALS) ERRED IN CONFIRMING THE ADDITIONS MADE BY THE LEARNED INCOME TAX OFFICER, RS.2350000/ - AS UNEXPLAINED DEPOSIT WITHOUT CONSIDERING THE WRITTEN SUBMISSION FILED BY THE APPELLANT BEFORE THE LEARNED CIT (APPEALS) AT THE TIME OF HEARING A ND ACCORDINGLY THE ORDER PASSED BY THE CIT (APPEALS) IS REQUIRED TO BE SET ASIDE. 2. THE FACTS WHICH REVEALED FROM THE RECORDS ARE AS UNDER. THE ASSESSEE WAS THE EMPLOYEE OF N.M.V. HIGH SCHOOL AND JR. COLLEGE, BUDHWAR PETH, PUNE. IT IS STATED THAT HE RETIRED ON 31 - 12 - 2007. THE RETURN FILED BY THE ASSESSEE WAS SELECTED FOR SCRUTINY. IT WAS NOTICED BY THE ASSESSING OFFICER THAT THERE WERE CASH DEPOSITS OF RS.23,50,000/ - IN 2 ITA NO. 135/PN/2014, M. KRISHNA G. NAIDU, SOLAPUR THE ASSESSEES BANK ACCOUNT OF BOMBAY MERCANTILE CO - OP. BANK LTD., SOLAPUR BRANC H. THE ASSESSING OFFICER SOUGHT THE EXPLANATION OF THE ASSESSEE IN RESPECT OF SOURCE OF THE SAID DEPOSITS. THE ASSESSEE STATED BY WAY OF WRITTEN SUBMISSION THAT HE WAS PLANNING TO COMMENCE CIVIL CONSTRUCTION BUSINESS IN 2006 AS HIS RETIREMENT WAS DUE IN THE NEAR FUTURE. HE REQUIRED CAPITAL FOR THE SAID BUSINESS AND HE, ACCORDINGLY, COLLECTED THE MONEY FROM HIS CLOSE FRIENDS. HE FURTHER STATED THAT THE AMOUNT COLLECTED FROM THE FRIENDS WAS KEPT IN HOME FOR A LONG TIME AND FINALLY IT WAS DEPOSITED IN THE BANK AND FIXED DEPOSIT RECEIPTS WERE MADE IN ORDER TO MAKE AVAILABILITY OF FUNDS WHEN THE BUSINESS W OULD WARRANT. THE ASSESSEE ALSO FURNISHED THE LIST OF THE LOAN CREDITORS ALONG WITH THEIR ADDRESS AS WELL AMOUNT TAKEN FROM THEM. THE DETAILS OF THE LOAN CREDITORS AS SUBMITTED BY THE ASSESSEE ARE AS UNDER: SR. NO. NAME AND ADDRESS AMOUNT DT. OF CONFIRMATION OF LETTER OCCUPATION 1 SHRI BASAVRAJ AMBADAS MORE, A/P. NAGANSUR, DIST. SOLAPUR RS.5,00,000 05.11.2009 AGRICULTURIST 2 REVANSIDHHESHW AR SWAMIJI GURUBASAVLING SWAMIJI, VIRAKTARNAT, NAGANSUR RS.5,00,000 05.11.2009 AGRICULTURIST AND MATHADHIPATI 3 SOU TARAMATI SURYABHAN JADHAV, A/P KURDIWADI RS.3,00,000 01.11.2006 AGRICULTURIST 4 SHRI PANDURANG BABURAO SHINDE, A/P SAYYAD VARAWADE TAL. MOHOL RS. 3 , 00,000 01.11.2009 AGRICULTURIST 5 SHRI GURUPPA SAIBANNA IRRANAVVAR, A/P SOLAPUR RS. 3,00,000 01.11.2009 AGRICULTURIST 6 SHRI IRRANNA RACHPPA KONAPURE, A/P NAGANSUR RS. 3,00,000 05.11.2009 AGRICULT URIST 7 SHRI RAVINDRA SHAMRAO TAMBOLKAR, SOLAPUR RS. 3 , 00,000 01.11.2009 RETIRED FROM SERVICE. 3 ITA NO. 135/PN/2014, M. KRISHNA G. NAIDU, SOLAPUR 3. THE ASSESSEE FILED THE CONFIRMATION LETTERS FROM THE ABOVE LOAN CREDITORS. THE ASSESSING OFFICER ASKED THE ASSESSEE TO PRODUCE THE ABO VE PERSONS FOR VERIFICATION ALONG WITH NECESSARY PROOF SUCH AS 7/12 EXTRACT OF LANDS, PROOF OF IDENTIFICATION, EXTRACT OF ALL BANK AC C OUNT S, COPY OF PAN CARD ETC . THE ASSESSING OFFICER ALSO ISSUED SUMMONS TO ALL THE LOAN CREDITORS TO ATTEND BEFORE HIM ON 07 - 12 - 2009. OUT OF 7 LOAN CREDITORS 6 LOAN CREDITORS APPEARED BEFORE THE ASSESSING OFFICER AND THEY CONFIRMED THAT THEY HAVE GIVEN THE LOANS AS CLAIMED BY THE ASSESSEE IN CASH FOR HIS BUSINESS AND THEY ALSO EXPLAINED THE SOURCE. THE ASSESSING OFFICER REC ORDED THE STATEMENTS ON OATH OF ALL ABOVE LOAN CREDITORS ON TWO DIFFERENT DATES I.E. ON 14 - 12 - 2009 AND 23 - 12 - 2009. THE ASSESSING OFFICER HAS NARRATED THE SUMMARY OF THE INFORMATION GIVEN BY THOSE PERSONS IN THE ASSESSMENT ORDER. THE GIST OF STATEMENT REC ORDED IN RESPECT OF ABOVE LOAN CREDITORS BY THE ASSESSING OFFICER IS AS UNDER: (I) . SHRI RAVINDRA SHAMRAO TAMBOLKAR : THE SAID PERSON WAS RESIDING AT NEW SANTOSHNAGAR, VIJAPUR ROAD SOLAPUR. HE IS 63 YEARS OLD AND RETIRED PERSON. HE WAS WORKING AS OVERSEER IN SOLAPUR MUNICIPAL CORPORATION. THERE ARE 4 MEMBERS IN HIS FAMILY OTHER THAN HIM AND AT THE TIME OF RECORDING OF THE STATEMENT HIS WIFE WAS WORKING AS SCHOOL TEACHER. HE ALSO STATED THAT HE WAS HAVING BANK ACCOUNT IN BANK OF MAHARASHTRA, JULE SOLAPUR BR ANCH AND IN ICICI BANK, PARK CHOWK, SOLAPUR. HE STATED THAT HIS INCOME WAS ONLY HIS PENSION AND HIS WIFE'S SALARY. HE WAS GETTING PENSION OF RS.7,500/ - AND HIS WIFE WAS GETTING SALARY OF RS.12000/ - . HE ALSO NARRATED THAT HIS MONTHLY HOUSE HOLD EXPENDITU RE WAS RS.15000/ - . HE STATED THAT AT THE TIME OF RETIREMENT , HE HAD RECEIVED TOTAL AMOUNT OF RS.4,00,000/ - AND RS.1,50,000/ - LEAVE ENCASHMENT AND GRATUITY ETC. RESPECTIVELY. IT APPEARS THAT HE WAS STATED THAT HE SPENT SOME AMOUNT ON THE EDUCATION OF HIS SON. HE ALSO STATED THAT THERE WAS AN EXPENDITURE ON THE 4 ITA NO. 135/PN/2014, M. KRISHNA G. NAIDU, SOLAPUR EXTENSION OF RESIDENTIAL HOUSE. HE ADMITTED THAT HE HAS GIVEN A LOAN TO THE ASSESSEE BUT STATED THAT HE IS NOT REMEMBERING THE DATE. HE ALSO STATED THAT OUT OF TOTAL AMOUNT / ADVANCE OF RS.3,00,000/ - HE HAS RECEIVED BACK AMOUNT OF RS.2,50,000/ - FROM THE ASSESSEE DURING THE PERIOD OCTOBER/ NOVEMBER 2007 FROM TIME TO TIME. THE ASSESSING OFFICER DID NOT BELIEVE THE STATEMENT OF THE SAID PERSON AS IN HIS OPINION HIS CREDITWORTHINESS WAS DOUBTFUL. THE A SSESSING OFFICER HAS ALSO NOTED THAT AS PER THE EXTRACT OF THE BANK ACCOUNT WITH THE BANK OF MAHARASTRA THAT THERE WERE CREDIT ENTRIES BUT THE SAID PERSON HAS ALSO MADE INVESTMENT IN THE FIXED DEPOSITS ETC. IN SUM AND SUBSTANCE THE ASSESSING OFFICER DECLI NED TO ACCEPT THE CREDITWORTHINESS OF THE SAID PERSON TO GIVE THE LOAN OF RS.3,00,000/0 TO THE ASSESSEE. (II) . SHRI REWANSIDHHESWAR SWAMIJI : IT IS STATED THAT HE IS RESIDING AT VIRAKTAMATH, TAL - AKKALKOT, DISTT. - SOLAPUR. HE IS 65 YEARS OLD AND IS NOT ASSESS ED TO TAX. HE IS A MATHADHIPATI, SWARHIJEE OF VIRAKTAMATH AND ALSO STATED THAT HE IS DOING AGRICULTURAL ACTIVITIES. HE FURTHER STATED THAT HE IS A OWNER OF 45 ACRE AGRICULTURAL LAND AND OUT OF SAID LAND 10 ACRE LAND IS IRRIGATED. IT APPEARS THAT HE HAS NOT PRODUCED 7/12 EXTRACT BEFORE THE ASSESSING OFFICER AT TIME OF RECORDING THE STATEMENT BUT ASSURED HE WOULD PRODUCE THE SAME AFTERWARDS. AS NOTED BY THE ASSESSING OFFICER HE PRODUCED 7/12 EXTRACT BUT IT WAS SEEN THAT HE HAS THE OWNER OF 5.03 HECTOR OF LAN D. HE ALSO STATED THAT HE IS TAKING CROPS LIKE, JOWAR, SUGAR CANE, TUR ETC. HE FURTHER STATED THAT HE USE TO SALE AGRICULTURAL YIELD IN AKKALKOT MARKET. HE ALSO PRODUCED SAMPLE RECEIPT FOR SALE OF TUR. HE ALSO FILED THE RECEIPT OF SUGARCANE SALE TO SID HHESWAR S.S.K. SOLAPUR. HE ALSO STATED THAT HE HAS BANK ACCOUNT IN SOLAPUR DISTRICT CO - OP. BANK AND BANK OF INDIA, NAGANSUR BRANCH. HE FURTHER STATED THAT OUT OF INCOME RECEIVED FROM AGRICULTURAL ACTIVITY, HE USED IT FOR ANNACHHATRA IN THE 5 ITA NO. 135/PN/2014, M. KRISHNA G. NAIDU, SOLAPUR MATH. HE ADMIT TED THE CONFIRMATION LETTER GIVEN TO THE ASSESSING OFFICER AS WELL AS SIGNATURE. THE ASSESSING OFFICER DECLINED TO ACCEPT HIS CREDITWORTHINESS THOUGH HE ACCEPTED THAT IDENTITY WAS ESTABLISHED. (III) . SHRI PANDURANG BABU SHINDE : AS NOTED BY THE ASSESSI NG OFFICER , THE SAID PERSON WAS RESIDING AT SAYYAD WARVADE TAL MOHOL, DIST SOLAPUR. HE IS 64 YEARS OLD AND HE IS NOT ASSESSED TO TAX. THERE ARE 5 MEMBERS IN HIS FAMILY INCLUDING HIM. IT IS STATED THAT HE WAS A TEACHER DURING THE PERIOD 1974 TO 2004. AFTER HIS RETIREMENT, HE IS ENGAGED IN THE AGRICULTURAL ACTIVITIES. HE STATED THAT HE IS OWNER OF 12 ACRE AGRICULTURAL LAND AND OUT OF 12 ACRE, 4 ACRE LAND IS IRRIGATED. HE HAS PRODUCED 7/12 EXTRACT BUT ONLY TO EXTEND OF 2.26 HECTOR S OF LAND . HE EXPLAINED TO T HE ASSESSING OFFICER THAT OUT OF 12 ACRES 3 ACRE LAND IN HIS NAME , REMAINING LAND IS IN THE NAME OF HIS SON SHRI CHANDRAKANT AND THEREFORE HE DID NOT PRODUCE 7/12 EXTRACT. HE STATED BEFORE THE ASSESSING OFFICER THAT HE WAS CULTIVATING CROPS LIKE SUGARCANE , MAIZE, JOWAR, HARBHARA ETC. HE ALSO STATED THAT HE WAS NOT KEEPING ANY DETAILS/ACCOUNT BUT HE SALES AGRICULTURAL PRODUCE IN MOHOL MARKET AND SUGARCANE SOLD TO LOKMANGAL SUGAR FACTORY. THE ASSESSING OFFICER ASKED HIM A QUESTION ON RETIREMENT BENEFITS REC EIVED BY HIM AND HE HAS STATED THAT HE RECEIVED THE GRATUITY OF RS.2,96,000/ - AND PF OF RS.2,00,000/ - . THE ASSESSING OFFICER HAS MADE THE CERTAIN OBSERVATION IN RESPECT OF HIS BANK ACCOUNT BUT THE SAID PERSON CONFIRMED BEFORE THE ASSESSING OFFICER THAT HE HAS GIVEN THE ADVANCE TO THE ASSESSEE AND HE HAS SUFFICIENT SOURCE OF AGRICULTURAL AND PAST SAVINGS. (IV) . SHRI IRRAPPA RAJAPPA KONAPURE : THE SAID LOAN CREDITOR WAS RESIDING AT NAGANSUR, TAL. - AKKALKOT, DISTT. - SOLAPUR. HE WAS 57 YEARS OLD AND HE WAS NOT ASSESSED TO TAX. THERE ARE 5 MEMBERS IN HIS FAMILY INCLUDING HIM. I.E HIS WIFE, TWO SONS AND DAUGHTER IN LAW. HE STATED THAT HE IS OWNER OF 4.5 ACRE AGRICULTURAL 6 ITA NO. 135/PN/2014, M. KRISHNA G. NAIDU, SOLAPUR LAND WHICH WAS IRRIGATED. HE ALSO PRODUCED 7/12 EXTRACT OF HIS AGRICULTURAL LANDS. HE STATED BEFORE THE ASSESSING OFFICER THAT HE HAS CULTIVATED SUNFLOWER AND JOWAR AND SOLD HIS AGRICULTURAL PRODUCE AT AKKALKOT MARKET TO ADDTYA. HE COULD NOT PRODUCE THE PROOF OF THE SALE OF LAND AGRICULTURAL CROP. THE SAID LOAN CREDITOR ALSO FILED THE COPY OF HI S BANK ACCOUNT MAINTAINED IN SOLAPUR DCC BANK, NAGANSUR. HE ALSO STATED THAT HE IS ALSO HAVING 5 BUFFALOS AND TWO COWS FROM WHICH HE SALES THE MILK TO VILLAGES. HE CONFIRMED THAT HE HAS GIVEN RS.3,00,000/ - TO THE ASSESSEE FROM TIME TO TIME DURING THE PERI OD MAY 2006 TO NOVEMBER 2006 IN CASH. THE ASSESSING OFFICER DECLINED TO ACCEPT HIS CREDITWORTHINESS AS WELL AS THE GENUINENESS OF TRANSACTION. IN THE OPINION OF THE ASSESSING OFFICER MERE IDENTIFICATION IS NOT SUFFICIENT. (V) . SHRI GURRAPPA SAIBANNA IRAN AR : AS NOTED BY THE ASSESSING OFFICER THE SAID LOAN CREDITOR IS RESIDING AT VIJAPUR ROAD, SOLAPUR. HE IS 75 YEARS OLD. HE IS NOT ASSESSED TO TAX. THERE ARE 6 MEMBERS IN HIS FAMILY INCLUDING HIM. I.E HIS WIFE, ONE SONS, WHO IS RUNNING GROCERY SHOP AND DAUGH TER IN LAW AND TWO GRANDDAUGHTER. HE STATED THAT HE IS OWNER OF 8 ACRE AGRICULTURAL LAND. THE SAID PERSON ALSO PRODUCED 7/12 EXTRACT OF ALL HIS AGRICULTURAL LANDS. HE STATED THAT HE HAS CULTIVATED SUNFLOWER, TUR AND JOWAR IN H I S LAND. HE FURTHER STATED BEFORE THE ASSESSING OFFICER THAT HE SALES HIS AGRICULTURAL PRODUCE AT BASAVAT BAGEWADI AND VIJAPUR MARKET THROUGH THE ADDTYA ( AGENT ) . HE FURTHER STATED THAT HE HAS NOT HAVING ANY BANK ACCOUNT BUT HE CONFIRMED THAT HE HAS GIVEN THE HAND LOAN TO THE ASSESS EE OF RS.3,00,000/ - IN CASH FROM TIME TO TIME SINCE 2001 TO 2006 BUT HE HAS NOT MAINTAINED ANY RECORD. THE ASSESSING OFFICER DECLINED TO ACCEPT THE CREDITWORTHINESS OF THE SAID PERSON. AS OBSERVED BY THE ASSESSING OFFICER ONLY IDENTIFICATION OF P ERSON IS NOT SUFFICIENT TO PROVE 7 ITA NO. 135/PN/2014, M. KRISHNA G. NAIDU, SOLAPUR THE GENUINENESS OF THE TRANSACTION AND CREDITWORTHINESS IS ALSO TO BE PROVED. (VI) . SHRI BASAVRAJ AMBADAS MORE : THE ASSESSING OFFICER RECORDED HIS STATEMENT ON 23 - 12 - 2004. THE SAID PERSON WAS RESIDING AT NAGANSUR, TAL. - AKKALKOT, DI STT. - SOLAPUR. HE IS 23 YEARS OLD. HE IS NOT ASSESSED TO TAX. THERE ARE 6 MEMBERS IN HIS FAMILY INCLUDING HIM. I.E HIS FATHER, MOTHER, SISTER AND BROTHER, WHO IS STUD Y ING. HE HAS STATED THAT HE IS OWNER OF 6.5 ACRE AGRICULTURAL LAND WHICH IS IRRIGATED. HE A LSO PRODUCED THE REVENUE RECORD OF 7/12 EXTRACT BUT AS NOTED BY THE ASSESSING OFFICER WHICH WAS TO THE EXTENT OF LAND OF 1.33 HECTOR. HE STATED THAT THE BALANCE LAND IS IN THE NAME OF HIS MOTHER AND THEREFORE HE HAS NOT BROUGHT THE 7/12 EXTRACT. HE ALSO S TATED THAT HE IS TAKING THE GRAPES O N THE AGRICULTURAL CROP AND SELLING THE SAME IN SANGLI AND TASGAON AND OTHER YIELD AT AKKALKOT MARKET IN CASH. HE EXPRESSED HIS INABILITY TO PRODUCE THE PROOF OF GRAPES BUT HE FILED PROOF FOR SALE OF DRY GRAPES DURING TH E YEAR F.Y. 2007 - 08 AND 2008 - 09. HE ALSO STATED THAT THERE WAS A JOINT BANK ACCOUNT WITH SOLAPUR DCC BANK BANK ACCOUNT. HE CONFIRMED THAT HE HAS GIVEN THE HAND LOAN OF RS.5,00,000/ - TO THE ASSESSEE IN CASH FROM TIME TO TIME FROM MAY 2006 TO OCTOBER 2006. HE ALSO CONFIRMED BEFORE THE ASSESSING OFFICER THAT HE RECEIVED THE AMOUNT OF RS.4,50,000/ - BACK FROM THE ASSESSEE IN THE MONTH OF DECEMBER 2007 TO MARCH 2008 IN CASH. THE ASSESSING OFFICER WAS NOT SATISFIED WITH THE REPLY OF THAT LOAN CREDITOR. HE RAI SED THE DOUBT IN RESPECT OF CREDITWORTHINESS AND DECLINED TO ACCEPT HIS GENUINENESS. (VII) . SOU TARAMATI S. JADHAV : IN RESPECT OF THIS LOAN CREDITOR THE ASSESSING OFFICER HAS NOTED THAT THE ASSESSEE HAS NOT PRODUCED THE SAID PERSON FOR EXAMINATION. THE 8 ITA NO. 135/PN/2014, M. KRISHNA G. NAIDU, SOLAPUR AS SESSEE ONLY FILED 7/12 EXTRACT. ON VERIFICATION OF 7/12 EXTRACT IT IS SEEN THAT THE SAID PERSON WAS HAVING AGRICULTURAL LAND ADMEASURING ABOUT 3.88 HECTOR. THE ASSESSING OFFICER HAS OBSERVED THAT THE LAND IS NON - IRRIGATED AND THE PERSON HAD CULTIVATED TU R, SUNFLOWER AND JOWAR ETC. THE ASSESSING OFFICER RAISED THE QUESTION MARK ON THE GENUINENESS OF THE CLAIM OF THE ASSESSEE THAT HE HAS TAKEN AN INTEREST FROM ADVANCE OR LOANS FROM THE ABOVE 7 PERSONS FOR THE PURPOSE OF STARING THE CIVIL CONSTRUCTION BUSIN ESS AFTER HIS RETIREMENT. THE ASSESSING OFFICER MADE THE ENTIRE ADDITION OF RS.23,50,000/ - WHICH WAS CASH DEPOSITED BY THE ASSESSEE IN THE BOMBAY MERCANTILE CO - OP. BANK LTD., SOLAPUR BRANCH FOR FAILURE OF THE ASSESSEE TO SATISFACTORILY EXPLAIN SOURCES. 4. THE ASSESSEE CHALLENGED THE ADDITION BEFORE THE LD. CIT(A) BUT WITHOUT SUCCESS AS ADDITION WAS CONFIRMED. NOW, THE ASSESSEE IS IN APPEAL BEFORE US. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS OF THE PARTIES AND PERUSED THE RECORD. THE ASSESSEE HAS FI LED THE PAPER BOOK IN WHICH THE COPIES OF STATEMENT OF THE 6 LOAN CREDITORS RECORDED BY THE ASSESSING OFFICER ARE PLACED. THE ASSESSEE ALSO FILED THE COPIES OF 7/12 EXTRACT OF THE LOAN CREDITORS TO DEMONSTRATE THAT WHATEVER THE STATEMENT WAS GIVEN BEFORE THE ASSESSING OFFICER W AS CORRECT. THE LD. AR FOR THE ASSESSEE VEHEMENTLY ARGUES THAT THE PRESENT ADDITION IS MADE BY THE ASSESSING OFFICER U/S. 68/69 OF ACT. AS ADMITTEDLY THE ASSESSEE IS NOT MAINTAINING THE REGULAR BOOKS OF ACCOUNT. HE SUBMITS THAT HE WAS WORKING WITH THE HIGH SCHOOL AND JR. COLLEGE IN PUNE AND HE WAS TO RETIRE ON 31 - 12 - 2007. HE, ACCORDINGLY, PLAN TO START THE CIVIL CONSTRUCTION BUSINESS HE COLLECTED SOME FUNDS FROM HIS CLOSE FRIENDS AND RELATIVES. HE COULD NOT MATERIALIZE HIS PLANNI NG AND THE CASH WAS LYING WITH HIM FOR SOME TIME BUT SUBSEQUENTLY THE CASH WAS DEPOSITED IN THE BANK. HE ARGUES THAT 9 ITA NO. 135/PN/2014, M. KRISHNA G. NAIDU, SOLAPUR OUT OF 7 LOAN CREDITORS, 6 LOAN CREDITORS HAVE APPEARED BEFORE THE ASSESSING OFFICER. THE ASSESSING OFFICER ALSO ISSUED THE SUMMONS TO TH E LOAN CREDITORS AND EXCEPT ONE , ALL THE SUMMONS WERE SERVED ON THE RESPECTIVE PERSONS. HE SUBMITS THAT OUT OF 7 LOAN CREDITORS, 6 CREDITORS WHO APPEARED BEFORE THE ASSESSING OFFICER HAVE CONFIRMED THAT THEY HAVE GIVEN ADVANCE /LOANS TO THE ASSESSEE IN CAS H. 5.1 THE LD. AR REFERRED TO THE PAPER BOOK WHERE THE COPIES OF STATEMENT RECORDED BY THE ASSESSING OFFICER ARE PLACED. HE SUBMITS THAT WHEN THE SOURCE IS EXPLAINED BY THE LOAN CREDITORS AND MERELY BECAUSE HE HAS NOT MAINTAINED THE BOOKS OF ACCOUNT BU T OTHER SUPPORTING EVIDENCE IN RESPECT OF THE CULTIVATION OF LAND AND THE AGRICULTURAL PRODUCE WAS FILED BEFORE THE ASSESSING OFFICER AND ALSO CONFIRMATION WAS FILE D, THEN HOW THE ASSESSING OFFICER CAN RAISED A QUESTION MARK ON THE DEPOSITION S OF RESPECTIV E LOAN CREDITORS. THE LD. AR SUBMITS THAT ALL LOAN CREDITORS ARE NOT EDUCATED EXCEPT ONE OR TWO , THEY BELONG TO THE VILLAGE AND THEY ARE NOT TRAINED WITNESS ES BUT DEPOSE CORRECT FACTS BEFORE THE ASSESSING OFFICER. HE ARGUES THAT THE PERSON WHO APPEARS BE FORE THE ASSESSING OFFICER IS AWARE ABOUT THE CONSEQUENCE ALSO FOR HIS FALSE STATEMENT WHICH IS RECORDED ON OATH. HE REFERRED TO THE STATEMENT OF THE LOAN CREDITORS PLACED IN THE COMPILATION AS THE COPIES OF 7/12 EXTRACT AND HE SUBMITS THAT SEC. 68/6 9 ARE THE DEEMING PROVISIONS HAVING THE LIMITED APPLICATION. THERE IS A PRIMARY BURDEN ON THE ASSESSEE TO PROVE THE IDENTITY AND GENUINENESS OF THE TRANSACTION AS WELL AS THE CREDITWORTHINESS OF THE PERSON FROM WHOM IT IS CLAIMED THAT THE MONEY HAS COME. HE S UBMITS THAT THE ASSESSEE PRODUCED 6 LOAN CREDITORS AS WELL AS THEIR CONFIRMATION LETTERS . T HOSE 6 LOAN CREDITORS IN THEIR PERSONAL STATEMENT S BEFORE THE ASSESSING OFFICER ON OATH EXPLAINED THE SOURCE WHERE FROM THEY ARE GENERATING THE INCOME AND IT CANNOT BE SAID THAT THOSE PERSONS DO NOT HAVE ANY INCOME TO LEND THE MONEY TO THE 10 ITA NO. 135/PN/2014, M. KRISHNA G. NAIDU, SOLAPUR ASSESSEE. HE SUBMITS THAT IN RESPECT OF 2 LOAN CREDITORS THEY WERE EMPLOYEE S AND THEY ALSO GOT RETIREMENT BENEFITS. THE INFERENCE DRAWN BY BOTH THE AUTHORITIES BELOW IN RESPECT O F 6 LOAN CREDITORS IS TOTALLY ON THE PRESUMPTIONS AND SURMISES. HE ARGUES THAT ONE A SOURCE IS EXPLAINED BY THE ASSESSEE , THE ASSESSING OFFICER CANNOT EXPECT THE ASSESSEE TO EXPLAIN THE SOURCE OF THE SOURCE. HE PLEADED FOR DELETING THE ADDITION S MADE BY THE ASSESSING OFFICER IN RESPECT OF (I) SHRI RAVINDRA SHAMRAO TAMBOLKAR, (II) SHRI REVANSIDHESWAR SWAMIJI, (III) SHRI PANDURANG BABU SHINDE, (IV) SHRI IRRAPPA RAJAPPA KONAPURE, (V) SHRI GURRAPPA SAIBANNA IRANAR AND (VI) SHRI BASAVRAJ AMBADAS MORE. IN RESP ECT OF 7 LOAN CREDITOR I.E. SOU TARAMTI S. JADHAV , HE SUBMITS THAT THE SAID LOAN CREDITOR ALSO FILED THE CONFIRMATION AS WELL AS DOCUMENTARY PROOF OF THE LAND RECORD IN THE FORM OF 7/12 EXTRACT. HE SUBMITS THAT EVEN IF THE SAID LOAN CREDITOR DOES NOT APPE AR BEFORE THE ASSESSING OFFICER BUT AT THE SAME TIME SHE FILED THE CONFIRMATION LETTER. HE PLEADED FOR ACCEPTING THE SAID LOAN CREDITORS A GENUINE ONE. 6. PER CONTRA, THE LD. DR SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. HE DRAWN ATTENTION OF THE BE NCH TO THE STATEMENT RECORDED BY THE ASSESSING OFFICER AND SUBMITS THAT FROM THE STATEMENTS OF 6 LOAN CREDITORS , IT IS CLEAR THAT NONE OF THE LOAN CREDITOR IS HAVING THE PROPER BANK ACCOUNT NOR THEY ARE MAINTAINING THE BOOKS OF ACCOUNT NOR THEY ARE PAID AN Y AMOUNT BY ANY BANKING CHANNELS THEN HOW THE CREDITWORTHINESS OF THOSE PERSONS CAN BE ACCEPTED. HE SUBMITS THAT MERELY BECAUSE THOSE 6 PERSONS APPEARED BEFORE THE ASSESSING OFFICER AND CONFIRMED THAT THEY HAVE GIVEN THE LOAN TO THE ASSESSEE THAT WILL NOT ABSOLVE THE ASSESSEE FROM SHOWING T HAT HE HAS EXPLAINED THE SOURCE . T HE ASSESSEE HAS TO DEMONSTRATE THE CREDITWORTHINESS OF THE LENDER. HE ARGUES THAT BOTH THE AUTHORITIES BELOW HAVE RIGHTLY REJECTED THE CLAIM OF THE ASSESSEE IN RESPECT OF 6 PERSONS. I N RESPECT OF 7 PERSONS WHO DOES 11 ITA NO. 135/PN/2014, M. KRISHNA G. NAIDU, SOLAPUR NOT APPEAR , H E ARGUES THAT EVEN THE IDENTITY OF THE SAID PERSON IS NOT PROVED AND MERELY FILING OF THE CONFIRMATION LETTER IS NOT SUFFICIENT. HE PLEADED FOR CONFIRMING THE ADDITION MADE BY THE ASSESSING OFFICER. 7. IN TH IS CASE IT WAS FOUND BY THE ASSESSING OFFICER THAT THE ASSESSEE HAS DEPOSITED CASH TO THE EXTENT OF RS.23,50,000/ - IN HIS BANK ACCOUNT WITH BOMBAY MERCANTILE CO - OP. BANK LTD., SOLAPUR BRANCH. THE ASSESSING OFFICER ASKED THE ASSESSEE TO PRODUCE THOSE PERSO NS FOR EXAMINATION AND VERIFICATION. THE ASSESSING OFFICER ALSO ISSUED THE SUMMONS WHICH WAS DULY SERVED ON THE LOAN CREDITORS. OUT OF 7 LOAN CREDITORS, 6 LOAN CREDITORS , APPEARED BEFORE THE ASSESSING OFFICER AND CONFIRMED THAT THEY HAVE GIVEN THE ADVANC ES TO THE ASSESSEE IN CASH FROM TIME TO TIME FOR HIS BUSINESS PURPOSE. IT IS TRUE THAT NONE OF THE 6 PERSONS ARE ASSESSED TO TAX BUT AT THE SAME TIME AS PER THE MATERIAL AVAILABLE ON RECORD, IT IS SEEN THAT ALL THE 6 PERSONS STATED BEFORE THE ASSESSING OF FICER THAT THEY ARE HAVING AGRICULTURAL LANDS AND THEY ARE CULTIVATING THOSE LAND AND TAKING THE AGRICULTURAL PRODUCE . IT IS ALSO SEEN THAT THOSE PERSONS ALSO PRODUCED SAMPLE COPIES OF THE SALE BILLS IN RESPECT OF THE AGRICULTURAL PRODUCE CLAIMED TO HAVE BEEN SOLD BY THEM IN THE MARKET YAR D AS WELL AS TO THE SUGAR FACTORIES. 8 . SO FAR AS SHRI RAVINDRA SHAMRAO TAMBOLKAR IS CONCERNED HE HAS CONFIRMED THAT HE HAS GIVEN THE LOAN TO THE ASSESSEE. HE HAS ALSO EXPLAINED THE SOURCE. HE WAS WORKING AS A OVERSE ER IN SOLAPUR MUNICIPAL CORPORATION AND HAS RECEIVED THE RETIREMENT BENEFITS. HE CONFIRMED THAT HE HAS GIVEN THE PERSONAL LOAN TO THE ASSESSE OF RS.3,00,000/ - AND OUT OF THAT HE HAS RECEIVED BACK RS.2,50,000/ - DURING THE PERIOD OCTOBER/NOVEMBER, 2007. IN THE CASE OF THIS PERSON, HE HAS NOT STATED THAT HE WAS HAVING ANY AGRICULTURAL INCOME BUT AT THE SAME TIME AS PER THE STATEMENT GIVEN BY THE SAID SHRI RAVINDRA SHAMRAO 12 ITA NO. 135/PN/2014, M. KRISHNA G. NAIDU, SOLAPUR TAMBOLKAR ON OATH BEFORE THE ASSESSING OFFICER , I T IS SEEN THAT HE HAS SUFFICIENT FUND S WITH HIM TO LEND SUM OF RS.3,00,000/ - TO THE ASSESSEE. THERE IS NO DISPUTE THAT THIS PERSON APPEARED BEFORE THE ASSESSING OFFICER AND DEPOSE D ALSO SO . HENCE, THE IDENTITY AND GENUINENESS CANNOT BE DOUBTED. NOW, THE ONLY ASPECT TO BE LOOKED INTO IS THE CREDITWORTHINESS OF THE SAID PERSON. IN OUR OPINION ON THE CURSORY LOOK ON THE FACTS NOTED BY THE ASSESSING OFFICER CREDITWORTHINESS OF THE SAID LOAN CREDITOR CANNOT BE DISPUTED FOR GIVING THE PERSONAL LOAN OF RS.3,00,000/ - TO THE ASSESSEE. WE, AC CORDING LY, DELETE THE ADDITION IN RESPECT OF SHRI RAVINDRA SHAMRAO TAMBOLKAR OF RS.3,00,000/ - . 9 . IN RESPECT OF SHRI REVANSIDHESWAR SWAMIJI , HE HAS ALSO STATED IN THE CLEAR TERMS THAT HE HAS GIVEN THE LOAN TO THE ASSESSEE BUT THERE IS NO RECORD. HE PRODUCED T HE RECORD OF THE AGRICULTURAL ACTIVITIES. IT IS CLAIMED BY HIM THAT HE HAS 45 ACRES OF AGRICULTURAL LAND AND 10 ACRES OF AGRICULTURAL LAND IS IRRIGATED. HE ALSO PRODUCED THE SAMPLE RECEIPT S OF THE SALE OF TUR ONLY THE NAME OF MENTIONED AS BASAVLINGESHWHAR MATH. HE ALSO PRODUCED THE SAMPLE SALE OF BILLS OF SALE OF SUGARCANE TO THE SIDHHESWAR S.S.K. SOLAPUR. IT IS TRUE THAT HE HAS NOT ASSESSED TO TAX BUT IF A PERSON HAVING SUBSTANTIAL AGRICULTURAL INCOME BUT HE IS NOT HAVING THE NON - AGRICULTURAL INCOME OR NON - AGRICULTURAL INCOME IS BELOW THE NON - TAXABLE LIMIT INFERENCE CAN BE DRAWN THAT HE IS NOT CAPABLE TO GIVING ANY LOAN AS CLAIMED. IN OUR OPINION THAT CANNOT BE THE CORRECT PARAMETER AS PER THE FACTS NOTED BY THE ASSESSING OFFICER ITSELF. IN OUR OPINION THERE IS A CREDITWORTHINESS IN RESPECT OF AMOUNT OF RS.5,00,000/ - GIVEN TO THE ASSESSEE. THE ASSESSEE HAS DISCHARGED HIS PRIMARY BURDEN BY ESTABLISHING THE IDENTITY, GENUINENESS AND CREDITWORTHINESS OF THE LOAN CREDITOR. WE, ACCORDINGLY, DELETE THE ADDI TION MADE IN RESPECT OF SHRI REVANSIDHESWAR SWAMIJI OF RS.5,00,000/ - . 13 ITA NO. 135/PN/2014, M. KRISHNA G. NAIDU, SOLAPUR 10. IN RESPECT OF SHRI PANDURANG BABU SHINDE IT IS TRUE THAT HE HAS NOT ASSESSED TO TAX BUT HE HAS APPEARED BEFORE THE ASSESSING OFFICER AND CONFIRMED THAT HE HAS GIVEN THE HAND LOAN TO THE ASSESSEE. HE ALSO EXPLAINED THAT THE SOURCE OF THE SAID HAND LOAN IS FROM THE AGRICULTURAL ACTIVITIES. HE ALSO PRODUCED 7/12 EXTRACT OF THE AGRICULTURAL LAND TO DEMONSTRATE THAT IN FACT HE IS OWNER OF AGRICULTURE LAND. HE ALSO CLAIMED TH AT HE IS TA KING CROPS LIKE SUGARCANE, MAIZE, JOWAR, HARBHARA ETC. HE ALSO STATED THAT H E SALES AGRICULTURAL PRODUCE . MERELY BECAUSE HE IS NOT ASSESSED TO TAX BUT THE DATA ON RECORD SUGGEST THAT HE IS OTHERWISE CAPABLE TO GIVE THE LOAN TO THE ASSESSEE AND THEN WHY HE SHOULD BE REJECTED ON THE REASON OF HIS CREDITWORTHINESS. THE ASSESSEE HAS TO ESTABLISH IDENTITY, GENUINENESS AND CREDITWORTHINESS OF THE LOAN CREDITOR. IN THIS CASE ON THE PERUSAL OF THE FACTS AND FIGURES NOTED BY THE ASSESSING OFFICER , IN OUR OPINION THE ASSESSEE HAS DISCHARGED HIS PRIMARY BURDEN U/S. 68/69 OF THE ACT AND HENCE , NO ADDITION IS JUSTIFIED. WE, ACCORDINGLY, DELETE THE ADDITION OF RS.3,00,000/ - 1 1 . IN RESPECT OF SHRI IRRAPPA RAJAPPA KONAPURE , THE ASSESSING OFFICER HAS NOTED THAT HE IS AL SO AGRICULTURALIST AND OWNER OF 4.5 ACRE AGRICULTURAL LAND WHICH WAS IRRIGATED. HE ALSO CULTIVATED AND TAKES THE SUNFLOWER AND JOWAR AND S ALES HIS AGRICULTURAL PRODUCE. HE HAS ALSO STATED THAT HE HAS 5 BUFFALOS AND TWO COWS FROM WHICH HE SALES THE MILK TO VILLAGES. HE ALSO CONFIRMED THAT HE HAS GIVEN RS.3,00,000/ - TO THE ASSESSEE FROM TIME TO TIME DURING THE PERIOD MAY 2006 TO NOVEMBER 2006 IN CASH. HE ALSO FILED THE CONFIRMATION LETTER. AS PER THE FACTS NOTED BY THE ASSESSING OFFICER IN OUR OPINION THE IDENTITY AND GENUINENESS CANNOT BE DOUBTED. SO FAR AS THE CREDITWORTHINESS IS CONCERNED HE HAS EXPLAINED THE SOURCE OF HIS INCOME. IN OUR OPINION THAT HIS SOURCE IS SUFFICIENT TO LEND SOME OF RS.3,00,000/ - TO THE ASSESSEE. WE, ACCORDINGLY, DELETE THE A DDITION. 14 ITA NO. 135/PN/2014, M. KRISHNA G. NAIDU, SOLAPUR 1 2 . IN RESPECT OF SHRI GURRAPPA SAIBANNA IRANAR IS CONCERNED , HE IS OLD PERSON AND HE IS NOT ASSESSED TO TAX. AS NOTED BY THE ASSESSING OFFICER AS PER HIS STATEMENT HE IS OWNER OF 8 ACRE AGRICULTURAL LAND. HE IS ALSO PRODUCED 7/12 EXTRACT OF ALL HIS AGRICULTURAL LANDS. THE SAID PERSON ALSO EXPLAINED WHERE AS HE SALES THE AGRICULTURAL PRODUCE. HE ALSO CONFIRMED THAT HE HAS GIVEN THE LOAN TO THE ASSESSEE. IT APPEARS THAT THERE IS SOME CONTRADICTION S IN HIS STATEMENT IN RESPECT OF ANNUAL INCOME B UT SO FAR AS THE IDENTITY AND GENUINENESS ARE CONCERNED THAT CANNOT BE DOUBTED THE ONLY ASPECT TO BE CONSIDERED IS TO CREDITWORTHINESS. IT IS CLEAR THAT HE HAS GIVEN RS.3,00,000/ - TO THE ASSESSEE BUT IN OUR OPINION AS PER THE STATEMENT RECORDED THAT MAY N OT SUPPORT HIS CLAIM OF GIVING RS.3,00,000/ - TO THE ASSESSEE. AFTER CONSIDERING THE FIGURE S OF THE INCOME , IN THE INTEREST OF JUSTICE, WE HOLD THAT TO THE EXTENT OF RS.2,00,000/ - HE HAS ESTABLISHED HIS CREDITWORTHINESS. WE, ACCORDINGLY, SUSTAIN THE ADDIT ION TO EXTEND OF RS.1,00,000/ - IN RESPECT OF SHRI GURRAPPA SAIBANNA IRANAR. 1 3 . IN RESPECT OF SHRI BASAVRAJ AMBADAS MORE , WE FIND THAT HE IS THE OWNER OF 6.5 ACRE AGRICULTURAL LAND WHICH IS IRRIGATED. HE CONFIRMED THAT HE HAS GIVEN THE LOAN TO THE ASSESSEE . AS PER THE FACTS ON RECORD AND STATEMENT OF THE SAID PERSON IDENTITY AND GENUINENESS CANNOT BE DOUBTED. IT IS ALSO STATED BY HIM THAT HE TAKES THE AGRICULTURAL PRODUCE IN THE FORM OF GRAPES. HE ALSO PRODUCED DOCUMENTARY EVIDENCE IN THE FORM OF SALES B ILLS OF THE DRY GRAPES. GIVING OUR ANXIOUS CONSIDERATION TO STATEMENT OF THE SAID PERSON AS WELL AS THE DOCUMENTARY EVIDENCE, WE HOLD THAT THE ASSESSEE HAS ESTABLISHED IDENTITY, GENUINENESS AND CREDITWORTHINESS OF THE SAID PERSON. 1 4 . THE LAST CREDITOR IS SOU TARAMATI S. JADHAV . ADMITTEDLY, THE SAID LOAN CREDITOR DID NOT APPEAR BEFORE THE ASSESSING OFFICER. ADMITTEDLY, 15 ITA NO. 135/PN/2014, M. KRISHNA G. NAIDU, SOLAPUR THE ASSESSEE HAD FILED ON LY 7/12 EXTRACT TO DEMONSTRATE THAT SHE IS OWNER OF LAND. IT IS CLAIMED THAT SHE HAS PAID RS.3,00,000/ - TO THE A SSESSEE. IN OUR OPINION IN THIS CASE , THE IDENTITY, GENUINENESS AND CREDITWORTHINESS ARE NOT PROVED. WE, ACCORDINGLY, CONFIRM THE ADDITION. WE, A CCORDINGLY, PARTLY ALLOW THE GROUND TAKEN BY THE ASSESSEE AND DELETE THE ADDITION TO THE EXTENT OF RS.19,50, 000/ - OUT OF RS.23,50,000/ - 1 5 . IN THE RESULT, THE ASSESSEES APPEAL IS PARTLY ALLOWED. PRONOUNCED IN THE OPEN COURT ON 25 - 0 2 - 201 5 SD/ - SD/ - ( G . S . PAN NU ) ( R.S. PADVEKAR ) ACCOUNTANT MEMBER JUDICIAL MEMBER PUNE, DATED : 25 TH FEBRUARY, 2015 RK/PS COPY TO 1 ASSESSEE 2 DEPARTMENT 3 THE CIT(A) - I I I , PUNE 4 THE CIT - IV, PUNE 5 6 THE DR, ITAT, A BENCH, PUNE. GUARD FILE. //TRUE COPY// BY ORDER ASSISTANT REGISTRAR , INCOME TAX A PPELLATE TRIBUNAL , PUNE