Dilavarhusain R. Farasta, Ahmedabad V. The Income Tax Officer, Ward-2(4), Bhavnagar

ITA 140/AHD/2017

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 0957 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 2 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-03-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2013-2014
• Appeal Filed On: 17-01-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: RAJESH MEENA
• Assessee Lawyers: B R POPAT
• Keywords: Income from undisclosed sources; Question of law
• Section: 143(3); 68

Judgement Text

, . . , IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER ./ I.T.A. NO.140/AHD/2017 ( ASSESSMENT YEAR : 2013-14) DILAVARIHUSAI R.FARASTA TOTANIYA KUVO DENA BANK PASE NO KHANCHO MAHUVA DIST.BHAVNAGAR-364 290 / VS. THE INCOME TAX OFFICER WARD-2(4) BHAVNAGAR ./ ./ PAN/GIR NO. : AACPF 2973 R ( APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : SHRI B.R. POPAT, AR / RESPONDENT BY : SHRI RAJESH MEENA, SR.DR ! DATE OF HEARING 14/03/2019 '#$% ! / DATE OF PRONOUNCEMENT 26/03/2019 / O R D E R PER PRADIP KUMAR KEDIA - AM: THE CAPTIONED APPEAL HAS BEEN FILED AT THE INSTAN CE OF THE ASSESSEE AGAINST THE APPELLATE ORDER OF THE COMMISSIONER OF INCOME TAX(APPEALS)-6, AHMEDABAD [CIT(A) IN SHORT] DATED 30/11/2016 ARISING IN THE ASSESSMENT ORDER PASSED UNDER S. 143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER ITA NO.140/AHD/ 2017 DILAVARHUSAI R.FARASTA VS. ITO ASST.YEAR 2013-14 - 2 - REFERRED TO AS 'THE ACT') DATED 18/01/2016 RELEVAN T TO ASSESSMENT YEAR (AY) 2013-14. 2. THE ASSESSEE HAS AGITATED THE ACTION OF THE CIT (A) IN CONFIRMING THE ADDITION OF RS.5 LAKHS ORIGINALLY MADE BY THE ASSES SING OFFICER UNDER S.68 OF THE ACT BY WAY OF ITS GROUND OF APPEAL. 3. BRIEFLY STATED, THE ASSESSEE FILED ITS RETURN OF INCOME FOR AY 2013-14 WHICH WAS SUBJECTED TO SCRUTINY ASSESSMENT. IN THE COURSE OF SCRUTINY ASSESSMENT, IT WAS NOTICED THAT THE ASSESSEE HAS TA KEN LOAN OF RS5 LAKHS FROM ONE SHRI VRAJLAL CHAGNIAL SORTHIYA. THE AFORESAID LENDER HAD NOT FILED RETURN OF INCOME FOR AY 2013-14. TO VERIFY THE GEN UINENESS OF THE LOAN, THE LENDER WAS EXAMINED ON OATH UNDER S.131(1) OF THE A CT ON 08/12/2015. IT TRANSPIRED THAT LENDER IS A RETIRED GOVERNMENT EMPL OYEE AND DRAWING PENSION AND CLAIMS TO HAVE 6.4 HECTORS AGRICULTURAL LAND. H OWEVER, ON ENQUIRY, THE ASSESSEE COULD SUPPORT THE HOLDING OF LAND TO THE E XTENT OF 1.38 HECTORS ONLY. THE ASSESSING OFFICER MADE FURTHER ENQUIRY WITH THE LENDER IN THE PROCEEDINGS UNDER S.131 OF THE ACT AND FOUND THAT T HE LENDER IS WITHDRAWING RS.25,000/- TO RS.30,000/- PER MONTH OUT OF PENSION REGULARLY. IT WAS FURTHER FOUND THAT THE LENDER HAD DEPOSITED CASH OF RS.5 LAKHS IMMEDIATELY BEFORE LENDING THE SAME TO THE ASSESSEE. THE ASSES SING OFFICER FOUND THAT THE AFORESAID DEPOSIT OF CASH WAS NOT OUT OF THE KN OWN SOURCES OF THE LENDER AND THEREFORE DREW INFERENCE THAT THE DEPOSIT IN CA SH IN THE ACCOUNT OF THE ITA NO.140/AHD/ 2017 DILAVARHUSAI R.FARASTA VS. ITO ASST.YEAR 2013-14 - 3 - LENDER REMAINS UNPROVED. THE SOURCE OF LOAN IN THE HANDS OF THE ASSESSEE THEREFORE WAS FOUND TO BE UNSATISFACTORY AS CONTEMP LATED UNDER S.68 OF THE ACT. THE ASSESSING OFFICER ACCORDINGLY REJECTED TH E EXPLANATION OF THE ASSESSEE TOWARDS NATURE AND SOURCE OF LOAN RECEIVED AND ADDED THE AFORESAID AMOUNT TO THE TOTAL INCOME OF THE ASSESSEE WHILE CO MPLETING THE ASSESSMENT UNDER S.143(3) OF THE ACT. 4. AGGRIEVED, THE ASSESSEE PREFERRED APPEAL BEFORE THE CIT(A). THE CIT(A) AFTER TAKING NOTE OF THE VARIOUS SUBMISSION MADE ON BEHALF OF THE ASSESSEE ALSO OPINED AGAINST THE ASSESSEE AND CONFI RMED THE ACTION OF THE ASSESSING OFFICER BY THE FOLLOWING DECISION MAKING PROCESS: 8. I HAVE CAREFULLY CONSIDERED THE ASSESSMENT ORDER AND THE SUBMISSION OF THE APPELLANT. BRIEF FACT OF THE CASE IS THAT THE A PPELLANT HAS TAKEN LOAN OF RS. 5,00,000/- FROM VRAJLAL CHHAGNIAI SORATHIA, A RETIRED GOVERNMENT EMPLOYEE. HE WAS GETTING MEGAR PENSION OUT OF WHICH HE USED TO WITHDRAW RS..25,000/- TO 30,000/- FOR HOUSEHOLD EXPENDITURE. HE WAS ALSO HAV ING 40 VIGHA OF AGRICULTURAL LAND IN HIS NAME AND HIS WIFE'S NAME. HIS STATEMENT WAS RECORDED BEFORE THE SON OF THE APPELLANT. HE STATED IN REPLY OF QUESTION NO . 1 THAT HE RECEIVED AGRICULTURAL INCOME OF RS. 4 TO 5 LACS PER ANNUM, HOWEVER HE COU LD NOT GIVE ANY EVIDENCE TO PROVE THE GENUINENESS OF AGRICULTURE INCOME. 8.1 IT IS OBSERVED THAT AGRICULTURAL INCOME WAS NOT SHOWN EITHER IN THE EARLIER YEARS OR SUBSEQUENT YEAR BY THE LENDER. THE RECEIPT FROM AGRICULTURE INCOME OF RS. 5,00,000/- WAS DEPOSITED IN THE BANK ACCOUNT FI RST TIME AND THE BANK ACCOUNT WAS OPENED IN THIS YEAR ONLY. THE APPELLANT MERELY RELIED ON THE BANK STATEMENT OF THE LENDER. HOWEVER IN VIEW OF THE FACTS MENTION ED BY THE AO IN THE ASSESSMENT ORDER AND IN THE STATEMENT RECORDED IT IS EVIDENT T HAT THAT THE LENDER DID NOT HAVE REGULAR SOURCE OF INCOME AND THE CASH DEPOSIT OF RS . 5,00,000/- WAS ALSO AN ISOLATED TRANSACTION. THEREFORE THE CONTENTION OF T HE APPELLANT THAT LOAN WAS GIVEN OUT OF EXPLAINED SOURCE OF INCOME CANNOT BE A CCEPTED HENCE NOT TENABLE. CONSIDERING THE ABOVE FACTS I AM OF THE VIEW THAT T HE APPARENT IS NOT REAL AND THE ITA NO.140/AHD/ 2017 DILAVARHUSAI R.FARASTA VS. ITO ASST.YEAR 2013-14 - 4 - CASH WAS DEPOSITED TO PROVIDE ACCOMMODATION ENTRY O F UNSECURED LOAN. THUS, IN VIEW OF THE ABOVE, THE APPELLANT'S PLEA OF LOAN REC EIVED THROUGH ACCOUNT PAYEE CHEQUE CANNOT JUSTIFY THE GENUINENESS OF THE LOAN. 8.2 TRANSACTION THROUGH ACCOUNT PAYEE CHEQUE IS NOT CONCLUSIVE/ SUFFICIENT TO DECIDE THE GENUINENESS OF THE TRANSACTIONS. THE RAT IO HAS BEEN LAID DOWN IN VARIOUS JUDGMENTS/DECISIONS AS UNDER: 8.2.1 THE HON'BLE SUPREME COURT IN THE CASE OF COMMISSIONER OF INCOME-TAX V. P. MOHANAKAIA [2007] 161 TAXMAN 16 9 (SC) HELD THAT 'WE ARE UNABLE TO PERSUADE OURSELVES TO ACCEPT THE SUBMISSION. THE FINDINGS OF FACT ARRIVED AT BY THE AUTHORITIES BELOW ARE BASED ON PR OPER APPRECIATION OF THE FACTS AND THE MATERIAL AVAILABLE ON RECORD AND SURROUNDING CIRCUM STANCES. THE DOUBTFUL NATURE OF THE TRANSACTION AND THE MANNER IN WHICH THE SUMS WERE F OUND CREDITED IN THE BOOKS OF ACCOUNT MAINTAINED BY THE ASSESSEE HAVE BEEN DULY T AKEN INTO CONSIDERATION BY THE AUTHORITIES BELOW. THE TRANSACTIONS THOUGH APPARENT WERE HELD TO BE NOT REAL ONE. MAY BE THE MONEY CAME BY WAY OF BANK CHEQUES AND PAID T HROUGH THE PROCESS OF BANKING TRANSACTION BUT THAT ITSELF IS OF NO CONSEQUENCE.' 8.2.2 IN CASE OF CIT V PRECISION FINANCE (P.) LTD. [1995] 82 TAXMAN 31 (CAL.) THE HON'BLE CALCUTTA HIGH COURT HELD THAT 'IT WAS FOR THE ASSESSES TO PROVE THE IDENTITY OF T HE CREDITORS, THEIR CREDITWORTHINESS AND THE GENUINENESS OF THE TRANSACTIONS. ON THE FACTS O F THIS CASE, THE TRIBUNAL DID NOT TAKE INTO ACCOUNT ALL THESE INGREDIENTS WHICH HAD TO BE SATISFIED BY THE ASSESSEE. MERE FURNISHING OF THE PARTICULARS WAS NOT ENOUGH. THE E NQUIRY OF THE ITO REVEALED THAT EITHER THE ASSESSEE WAS NOT TRACEABLE OR THERE WAS NO SUCH FILE AND, ACCORDINGLY, THE FIRST INGREDIENT AS TO THE IDENTITY OF THE CREDITORS HAD NOT BEEN ESTABLISHED. IF THE IDENTITY OF THE CREDITORS HAD NOT BEEN ESTABLISHED, CONSEQUENTLY, T HE QUESTION OF ESTABLISHMENT OF THE GENUINENESS OF THE TRANSACTIONS OR THE CREDITWORTHI NESS OF THE CREDITORS DID NOT AND COULD NOT ARISE. THE TRIBUNAL DID NOT APPLY ITS MIND TO T HE FACTS OF THIS PARTICULAR CASE AND PROCEEDED ON THE FOOTING THAT SINCE THE TRANSACTION S WERE THROUGH THE BANK ACCOUNT, IT WAS TO BE PRESUMED THAT THE TRANSACTIONS WERE GENUI NE. IT WAS NOT FOR THE ITO TO FIND OUT BY MAKING INVESTIGATION FROM THE BANK ACCOUNTS UNLE SS THE ASSESSEE PROVED THE IDENTITY OF THE CREDITORS AND THEIR CREDITWORTHINESS. MERE PAYM ENT BY ACCOUNT PAYEE CHEQUE WAS NOT SACROSANCT NOR COULD IT MAKE A NON-GENUINE TRANSACT ION GENUINE.' RELIANCE IS ALSO PLACED ON THE FOLLOWING CASE LAWS- 8.2.3 IN THE CASE OF K. RAMASWARNY VS. CIT - 261 !T R 358 (MAD) THE HON'BLE MADRAS HIGH COURT FOLLOWED THE RATIO LAID DOWN BY T HE SUPREME COURT IN THE CASE OF JUGGILAL KAMLAPAT V. CIT [1969] 73 ITR 702 HELD THAT IN CASES WHERE THE ITA NO.140/AHD/ 2017 DILAVARHUSAI R.FARASTA VS. ITO ASST.YEAR 2013-14 - 5 - SAME PERSONS ENTERED INTO TRANSACTIONS THOUGH BY IN TRODUCING A CORPORATE PERSONALITY INTO SOME OF THOSE TRANSACTIONS, THE IN COME-TAX AUTHORITIES ARE ENTITLED TO PIERCE OF VEIL OF CORPORATE PERSONALITY AND LOOK AT THE REALITY OF THE TRANSACTION. THE COURT IN THAT CASE OBSERVED: '. . .IT IS TRUE THAT FROM JURISTIC POINT OF VIEW T HE COMPANY IS A LEGAL PERSONALITY ENTIRELY DISTINCT FROM ITS MEMBERS AND THE COMPANY IS CAPABLE OF ENJOYING RIGHTS AND BEING SUBJECTED TO DUTIES WH ICH ARE NOT THE SAME AS THOSE ENJOYED OR BORNE BY ITS MEMBERS. BUT IN CERTA IN EXCEPTIONAL CASES THE COURT IS ENTITLED TO LIFT THE VEIL OF THE CORPO RATE ENTITY AND TO PAY REGARD TO THE ECONOMIC REALITIES BEHIND THE LEGAL F ACADE. ...' (P. 710) 8.2.4 IN THE CASE OF HINDUSTAN TEA TRIO - 263 ITR 2 89 (CAL) THE HON'BLE CALCUTTA HIGH COURT HAS HELD AS UNDER THE POWER OF THE ASSESSING OFFICER UNDER SECTION 68 IS NOT AN ABSOLUTE ONE. IT IS SUBJECT TO HIS SATISFACTION WHERE EXPLAN ATION IS OFFERED. THE POWER IS ABSOLUTE WHERE THE ASSESSEE OFFERS NO EXPL ANATION. THE SATISFACTION WITH REGARD TO EXPLANATION IS IN EFFEC T AN IN-BUILT SAFEGUARD IN SECTION 68 PROTECTING THE INTEREST OF THE ASSESSES. IT PROVIDES FOR AN OPPORTUNITY TO THE ASSESSEE TO EXPLAIN THE NATURE A ND SOURCE OF THE FUND. ONCE IT IS EXPLAINED, IT IS INCUMBENT ON THE ASSESS ING OFFICER TO CONSIDER THE SAME AND FORM AN OPINION WHETHER THE EXPLANATIO N IS SATISFACTORY OR NOT. THE EXPRESSION USED IN THE SECTION CLEARLY LAY S THE BURDEN ON THE ASSESSEE TO EXPLAIN THE NATURE AND SOURCE OF THE FU ND. UNLESS EXPLANATION IS OFFERED, THE ASSESSING OFFICER IS FREE TO TREAT THE FUND AS INCOME OF THE ASSESSEE FROM UNDISCLOSED SOURCES CHARGEABLE TO TAX . ONCE EXPLANATION IS OFFERED, THE ASSESSING OFFICER IS BOUND TO CONSIDER THE SAME. SUCH CONSIDERATION IS GUIDED BY SOUND PRINCIPLE OF LAW. THE OPINION SO FORMED MUST BE REASONABLE AND BASED ON MATERIALS AND SHALL NOT BE PERVERSE. THE EXTENT OF THE POWER OF THE ASSESSING OFFICER WHILE CONSIDERING THE MATERIALS PRODUCED BY THE ASSESSES IS VERY WIDE. IT IS A QUESTION OF EXAMINING AS TO WHETHER THE APPARENT IS REAL. THE ASSESSING OFFICER IS EMPOWERED TO LIFT THE CORPORATE VEIL AND EXAMINE TH E REAL NATURE OF THE TRANSACTION. IN THE PROCESS, IT MAY EXERCISE ITS PO WER OF EXAMINING THE MATERIALS. IT MAY REQUIRE THE ASSESSEE TO PRODUCE F URTHER MATERIALS IF SO REQUIRED. IT MAY SEEK INFORMATION FROM OTHER SOURCE S ON THE BASIS OF THE MATERIAL PRODUCED. IN THE PROCESS OF ENQUIRY, THE A SSESSEE HAS NO RIGHT OF HEARING. BUT THE ASSESSEE HAS A RIGHT TO CHALLEN GE THE CONCLUSION ARRIVED AT ON THE BASIS OF THE ENQUIRY MADE. THE AS SESSEE MAY POINT OUT ITA NO.140/AHD/ 2017 DILAVARHUSAI R.FARASTA VS. ITO ASST.YEAR 2013-14 - 6 - THE PERVERSITY IN THE FINDING. IT MAY QUESTION THE VALIDITY OF THE PROCESS UNDERTAKEN. IT MAY POINT OUT THAT A PARTICULAR MATE RIAL WAS NOT CONSIDERED. IT MAY ALSO POINT OUT THAT THE ENQUIRY MADE WAS NOT REASONABLE OR WAS HALF-HEARTEDLY DONE. THE PROCESS OF ENQUIRY IS SUCH THAT THE ASSESSEE HAS TO OFFER THE EXPLANATION AND PRODUCE THE MATERIAL IN SUPPORT OF SUCH EXPLANATION AND THEN IT CAN DO N O FURTHER. THE ONUS THEN SHIFTS ON THE REVENUE TO SCRUTINIZE THE MATERIALS AND FORM AN OPINION ON THE BASIS THEREOF. FOR THE PURPOSE OF SCRUTINIZI NG THE MATERIALS, IT MAY UTILIZE ITS POWERS TO SEEK ATTENDANCE OF ANY WITNES SES OR DISCLOSURE OF ANY INFORMATION IN EXERCISE OF ITS POWER UNDER SECTION 131. IT MAY SEEK INFORMATION FROM OTHER SOURCES IN EXERCISE OF ITS P OWER UNDER SECTION 133. ONCE A REASONABLE ENQUIRY IS MADE, THEN THE AS SESSING OFFICER CAN DO NO FURTHER EXCEPT ARRIVING AT A CONCLUSION ON TH E BASIS OF SUCH MATERIALS. IF THE CONCLUSION IS ADVERSE WHOLLY OR I N PART TO THE INTEREST OF THE ASSESSES, IT IS INCUMBENT ON THE ASSESSING OFFI CER TO INTIMATE OR INFORM THE CONCLUSION ARRIVED AT TO THE ASSESSEE . WHEN SUCH INFORMATION OR INTIMATION IS RECEIVED BY THE ASSESSEE, THE ONUS SHIFTS ON THE ASSESSES. HE MAY FURNISH FURTHER EXPLANATION OR INFORMATION T O SUPPORT ITS CONTENTION. IF FURTHER INFORMATION OR MATERIALS ARE FURNISHED, THE ASSESSING OFFICER IS BOUND TO EXAMINE THE SAME AND FORM ITS FINAL OPINION AND PASS AN APPROPRIATE ORDER . SUCH OPINION IS ALSO SUBJECT TO EXAMINATION BY THE COMMISSIONER (APPEALS) OR THE TR IBUNAL AND IF IT INVOLVES A QUESTION OF LAW, IT IS ALSO SUBJECT TO S CRUTINY BY THE HIGH COURT UNDER SECTION 256. FINDINGS OF FACT MAY ALSO FORM A BASIS OF A QUESTIO N OF LOW IF THE INFERENCE DROWN FROM THE FACTS FOUND IS NOT IN CONSONANCE WITH THE LEGAL PRINCIPLES OR THE FINDINGS ARE PERVE RSE. IN SUCH A CASE, THE HIGH COURT MAY INTERFERE. IF TWO VIEWS ARE POSSIBLE, EVEN IF THE HIGH COURT IS OF THE OTHER VIEW, IT CANNOT INTERFERE WIT H THE VIEW TAKEN BY THE TAXING AUTHORITY. [PARA 6]. 8.2.5 IN THE CASE OF CIT VS. INDIAN EXPRESS NEWS P APERS 238 ITR 70 (MAD) THE HON'BLE MADRAS HIGH COURT HELD AS UNDER THE FACT THAT THE MONEY WAS NOT PAID DIRECTLY BUT W AS SHOWN AS HAVING BEEN INVESTED IN THE SUBSIDIARY COMPANY WAS NOT DEC ISIVE OF THE TRUE CHARACTER OF THE TRANSACT/OH. THE MERE FACT THAT TH E INVESTMENT COMPANY WAS A DISTINCT LEGAL ENTITY DID NOT BY ITSELF ESTAB LISH THAT THE PURPORTED INVESTMENT WAS A GENUINE INVESTMENT WHICH ASSESSEE- COMPANY HAD MADE FOR SECURING BENEFITS TO ITSELF BY WAY OF TRADING O R CARRYING ON BUSINESS THROUGH THAT SUBSIDIARY. THE IMPUGNED SUM WAS PAID TO THE BOMBAY ITA NO.140/AHD/ 2017 DILAVARHUSAI R.FARASTA VS. ITO ASST.YEAR 2013-14 - 7 - COMPANY ON THE SAME DAY ON WHICH IT WAS PAID TO THE INVESTMENT COMPANY. THOUGH THE INVESTMENT COMPANY WAS PURPORTE D TO CHARGE INTEREST IN THE FIRST YEAR, SUBSEQUENTLY NO INTERES T AT ALL WAS CHARGED TO THE BOMBAY COMPANY ON THAT SUM. IT WAS NOT THE ASSESSEE 'S CASE THAT THE MONEY WAS RETURNED BY THE INVESTMENT COMPANY SUBSEQ UENTLY WITH INTEREST OR THAT THE ASSESSEE RECEIVED DIVIDENDS FROM OUT OF THE INVESTMENTS MADE BY IT IN THAT COMPANY. IT IS WELL-SETTLED THAT THE CORPORATE VEIL OF A COM PANY CAN BE LIFTED FOR THE PURPOSE OF ASCERTAINING THE REAL CHARACTER OF A TRA NSACTION, IF THAT TRANSACTION WAS A FRAUDULENT ONE OR WAS INTENDED TO EVADE PAYMENT OF TAX. WHILE LEGITIMATE TAX AVOIDANCE IS ALWAYS PERMISSIBL E, THE DEVICES ADOPTED TO EVADE PAYMENT OF TAX, HOWEVER, ARE NOT P ERMISSIBLE; THOUGH THE DIVIDING LINE IS NOT ALWAYS EASY TO DRAW, SUCH A LINE DOES EXIST. THE TRUE CHARACTER OF THE TRANSACTION HERE CLEARLY WAS ONE OF AN ADVANCE OF RS. 10 LAKHS BY THE ASSESSEE TO THE BOMBAY COMPANY FOR WHOSE BENEFIT THAT SUM WAS OBVIOUSLY INTENDED AND HAD ONLY BEEN C HANNELLED THROUGH THE INVESTMENT COMPANY. THE TRIBUNAL HAD FAILED TO NOTICE THE FACTS AND HAD ALSO ERRED IN ADOPTING THE WRONG APPROACH FOR T HE PURPOSE OF DECIDING AS TO WHETHER THE AMOUNT DISALLOWED WAS A SUM WHICH COULD PROPERLY FALL WITHIN THE AMBIT OF SECTION 36(1)(III ). THE AMOUNT DISALLOWED WAS THE AMOUNT PAID ON AMOUNTS BORROWED, BUT NOT USED FOR THE PURPOSE OF BUSINESS OR PROFESSION OF THE ASSESS EE, RS. 10 LAKHS 'INVESTED' IN THE INVESTMENT COMPANY, BEING IN SUBS TANCE AND REALITY AN AMOUNT ADVANCED TO THE BOMBAY COMPANY FOR FINANCING THE CONSTRUCTION UNDERTAKEN BY IT AT BOMBAY, COULD NOT BE SAID TO BE AN AMOUNT WHICH FORMED PART OF THE CAPITAL BORROWED FO R THE PURPOSE OF THE ASSESSEE'S BUSINESS. 9. CONSIDERING THE ABOVE, I AM OF THE VIEW THAT THE APPELLANT COULD NOT ESTABLISH THE GENUINENESS AND CREDITWORTHINESS OF T HE LOAN TAKEN THEREFORE THE AO IS JUSTIFIED IN TREATING RS. 5,00,000/- AS UNEXPLAI NED CASH CREDIT U/S. 68 OF THE ACT. THE GROUND IS DISMISSED. 5. FURTHER AGGRIEVED, THE ASSESSEE PREFERRED APPEAL BEFORE THE TRIBUNAL. ITA NO.140/AHD/ 2017 DILAVARHUSAI R.FARASTA VS. ITO ASST.YEAR 2013-14 - 8 - 6. THE LD.AR FOR THE ASSESSEE REFERRED TO THE BANK STATEMENT OF THE LENDER AND SUBMITTED THAT THE LOAN OF RS.5 LAKHS TA KEN ON 26/03/2013 WAS ALSO REPAID ON 02/04/2013 AND, THEREFORE, THERE IS NO REASON TO DOUBT THE BONAFIDES OF THE LENDING. THE LD.AR ALSO SUBMITTED THAT THE LENDER HIMSELF ATTENDED THE PROCEEDINGS BEFORE THE ASSESSING OFFIC ER AND CONFIRMED THE ACT OF GIVING LOAN TO THE ASSESSEE. UNDER THESE CIRCUM STANCES, IT WAS CONTENDED, THE INGREDIENTS OF SECTION 68 OF THE ACT IS NOT FUL FILLED. ON A QUERY FROM THE BENCH, HOWEVER, THAT THE LENDER HAS AGAIN ENTERED I NTO SIMILAR TRANSACTION IN THE SUBSEQUENT PERIOD WITH SOME OTHER PERSON WITHOU T ANY FINANCIAL CAPACITY (BANK BALANCE ORDINARILY LESS THAN RS.1,000/- ON A CONTINUED BASIS), THE LD.AR FOR THE ASSESSEE DREW BLANK BUT HOWEVER OBSER VED THAT IT CONCERNS STATE OF AFFAIRS OF THE LENDER WITH WHICH THE ASSES SEE IS NOT PRIVY TO. THE LD.AR FOR THE ASSESSEE HOWEVER SUBMITTED THAT A BEN IGN VIEW SHOULD BE TAKEN AND THE ASSESSEE SHOULD BE ABSOLVED FROM THE ADDITIONS MADE BY THE REVENUE AUTHORITIES. 7. THE LD.DR, ON THE OTHER HAND, RELIED UPON THE O RDERS OF THE AUTHORITIES BELOW AND STRIDENTLY OPPOSED THE CONTEN TIONS RAISED ON BEHALF OF THE ASSESSEE. IT WAS SUBMITTED THAT THE BANK STATE MENT OF THE LENDER SAYS IT ALL THAT HE HAS NO FINANCIAL CAPACITY NOR HAS ANY W HEREWITHAL TO DEPOSIT SUCH LARGE AMOUNT OF CASH IMMEDIATELY PRIOR TO THE ISSUE OF CHEQUE TO THE ASSESSEE. THE LD.DR SUBMITTED THAT THE AFORESAID A MOUNT OF CASH DEPOSIT IN THE BANK ACCOUNT OF THE LENDER CLEARLY APPEARS TO B E UNACCOUNTED INCOME OF ITA NO.140/AHD/ 2017 DILAVARHUSAI R.FARASTA VS. ITO ASST.YEAR 2013-14 - 9 - THE ASSESSEE HEREIN FOR WHICH HE WAS ACCOMMODATED B Y WAY OF LENDING. THE LD.DR SUPPORTED THE OBSERVATIONS MADE BY THE AS SESSING OFFICER THAT THE LENDER WAS WITHDRAWING MONEY IN CASH OF RS.25,0 00/- TO RS.30,000/- PER MONTH OUT FO PENSION REGULARLY TO MEET HIS EXPENDIT URE. NO PRUDENT PERSON WILL WITHDRAW SUCH MONEY WHEN HE HAS ACCUMULATED FU NDS OF RS.5 LAKHS IN CASH AS CLAIMED. THE LD.DR THUS SUBMITTED THAT TH E ENTIRE STORY OF THE ASSESSEE IS A MAKE BELIEF AND HAS NO CREDIBILITY IN THE EYES OF LAW. THE LD.DR FURTHER SUBMITTED THAT RETURN OF LOAN TO THE LENDER IS OF NO CONSEQUENCE FOR THE PURPOSES OF NATURE IN SOURCE OF LOAN RECEIVED. THE LD.DR THUS SUBMITTED THAT THE CONCURRENT FINDINGS O F THE ASSESSING OFFICER AND THE CIT(A) SHOULD NOT BE INTERFERED IN A LIGHTH EARTED MANNER. 8. WE HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTI ONS AND PERUSED THE RECORD. THE SHORT ISSUE IN CONTROVERSY IS MAINTAIN ABILITY OF ADDITIONS OF RS.5 LAKHS UNDER S.68 OF THE ACT TOWARDS UNEXPLAINED CAS H CREDIT IN THE HANDS OF THE ASSESSEE. AS EMERGING FROM THE RECORD NARRATED IN EARLIER PARA, THE CREDITWORTHINESS OF THE LENDER IS IN SERIOUS DOUBT AND COULD NOT BE DEMONSTRATED TO THE SATISFACTION OF THE ASSESSING O FFICER WHEN SEEN ON THE TOUCHSTONE OF PREPONDERANCE OF PROBABILITIES. WE O BSERVE THAT THE ASSESSING OFFICER HAS RIGHTLY RECORDED ITS CONCLUSI ON AGAINST THE ASSESSEE ON THE GROUND THAT DEPOSIT OF CASH IN THE ACCOUNT OF T HE LENDER PRIOR TO ITS LENDING TO THE ASSESSEE IS NOT SUPPORTABLE WITH THE WORTH AND CONDUCT OF THE LENDER. THEREFORE, THE PRIMARY ONUS PLACED ON THE ASSESSEE, IN OUR VIEW, ITA NO.140/AHD/ 2017 DILAVARHUSAI R.FARASTA VS. ITO ASST.YEAR 2013-14 - 10 - COULD NOT BE DISCHARGED. THE CIT(A), IN OUR VIEW, HAS RIGHTLY ANALYSED THE FACTUAL MATRIX AND ANSWERED THE APPEAL OF THE ASSES SEE IN NEGATIVE. WE FIND NO INFIRMITY IN THE ORDER OF THE CIT(A) AND THUS DE CLINE TO INTERFERE THEREWITH. 9. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMISS ED. THIS ORDER PRONOUNCED IN OPEN COURT ON 26/03/ 2019 SD/- SD/- ( RAJPAL YADAV) ( PRADIP KUMAR KEDIA ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD; DATED 26 / 03 /2019 (!..) .*../ T.C. NAIR, SR. PS TRUE COPY !'#' / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. +,- . / CONCERNED CIT 4. . /0 / THE CIT(A)-6, AHMEDABAD 5. 123 * *,-) ! ,-%) 4+ / DR, ITAT, AHMEDABAD 6. 356 7 / GUARD FILE. / BY ORDER, 1 * //TRUE COPY// ( DY./ASSTT.REGISTRAR) ) / ITAT, AHMEDABAD