BAJRANG TRADING CORPORATION, Jaipur V. ITO, Sawai Madhopur

ITA 146/JPR/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 5313 (ITAT-JAIPUR)
• Duration Of Justice: 2 year(s) 2 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-05-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2006-2007
• Appeal Filed On: 27-02-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S K JAIN DCIT DHK
• Keywords: Revision of order; Additional evidence; Question of law; Tax effect; Onus to prove
• Section: 143(3); 68

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH VH-VKJ-EHUK] YS[KK LNL; ,OA JH YFYR DQEKJ] U;KF; D LNL; DS LE{K BEFORE: SHRI T.R.MEENA, AM & SHRI LALIET KUMAR, JM VK;DJ VIHY LA-@ ITA NO. 146/JP/2014 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2006-07. M/S. BAJRANG TRADING CORPORATION, KHANDELWAL BHAWAN, STATION ROAD, GANGAPUR CITY, SAWAI MADHOPUR. CUKE VS. THE INCOME TAX OFFICER, WARD-2, SAWAI MADHOPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO. AADFB 3593 N VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT /KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI P.C. PARWAL (CA) JKTLO DH VKSJ LS@ REVENUE BY : SHRI S.K. JAIN (DCIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 05.05.2016. ?KKS'K .KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 13/05/2016. VKNS'K@ ORDER PER SHRI LALIET KUMAR, J.M. THIS APPEAL IS ARISING OUT OF THE ORDER PASSED BY THE LD. CIT (A),KOTA DATED 17.12.2013 WHEREBY THE LD. CIT (A) CONFIRMED THE AD DITION OF RS. 5,40,000/- BY TREATING THE CREDITS IN THE NAME OF THE FOLLOWING P ERSONS AS UNEXPLAINED :- DEEPIKA KHANDELWAL RS. 1,50,000/- GOVIND PRASAD RS. 1,15,000/- MAHESH KHANDELWAL RS. 1,00,000/- PUSHPA DEVI RS. 35,000/- RAM BABU VYAS RS. 40,000/- RAMDHAN MAWAI RS. 1,00,000/- (CORRECT AMOUNT RS. 1,50,000/-) AND CONFIRMING THE ADDITION OF ABOVE CREDITORS BY INCOR RECTLY STATING THAT NO DETAILS WAS FURNISHED IN RESPECT OF ALL THE ABOVE CREDITS FILED BEFORE HIM. 2 ITA NO. 146/JP/2014 BAJRANG TRADING CORPORATION VS. ITO 2. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF TRADI NG OF FERTILIZERS, SEEDS AND PESTICIDES. FOR THE YEAR UNDER CONSIDERATION THE A SSESSEE FILED ITS RETURN DECLARING INCOME OF RS. 12,900/- WHICH WAS SCRUTINIZED UNDER SECTION 143(3) AND ASSESSED AT AN INCOME OF RS. 5,97,460/-. BUT AFTER THE ORDER OF LD. CIT (A) DATED 08.02.2010 THE INCOME WAS DETERMINED AT RS. 25,610/-. 2.1. LATER ON, IN PURSUANCE TO DIRECTION OF CIT U/S 263, THE AO VIDE SHOW CAUSE NOTICE DATED 25.03.2011 REQUIRED THE ASSESSEE TO PR OVE THE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE CASH CREDIT OR. IN COMPLIANCE TO THE SAME, ASSESSEE FILED THE DETAILS OF UNSECURED LOANS SQUAR ED UP (13 CASES) DURING THE YEAR AND THE DETAILS OF LOANS OUTSTANDING IN RESPECT OF 29 CASES AT THE YEAR END ALONG WITH THE CONFIRMATIONS OF MOST OF THE CREDITS. IT ALSO FURNISHED PAN, ITR, BANK STATEMENT AND WARD WHERE THE CREDITORS ARE ASSESSED IN RESPECT OF 22 CASES AND REQUESTED TO PROVIDE CERTAIN TIME TO FURNISH INFORM ATION IN RESPECT OF REMAINING CREDITORS. HOWEVER, THE AO WITHOUT PROVIDING ADEQU ATE OPPORTUNITY, COMPLETED THE ASSESSMENT BY MAKING ADDITION OF RS. 37,95,000/- BY TREATING 18 CREDITORS AS UNEXPLAINED UNDER SECTION 68 OF THE IT ACT. 3. BEING AGGRIEVED BY THE ORDER OF AO, THE ASSESSEE CARRIED THE MATTER BEFORE LD. CIT (A). THE ASSESSEE VIDE LETTERS DATED 05.09 .2012 AND 21.11.2012 FURNISHED ADDITIONAL EVIDENCES BEFORE LD. CIT (A). THE LD. C IT (A) AFTER GOING THROUGH THE EVIDENCES FURNISHED, DIRECTED THE AO TO SUBMIT REMA ND REPORT. THE AO IN HIS REPORT DATED 03.01.2013 AND 19.02.2013 AFTER CONSIDERING T HE ADDITIONAL EVIDENCES FILED BY THE ASSESSEE SUBMITTED THAT CERTAIN CREDITORS HAD N O CREDITWORTHINESS TO GIVE LOAN TO ASSESSEE. IN RESPONSE TO THE ABOVE REMAND REPORT, ASSESSEE VIDE LETTER DATED 19.03.2013 FURNISHED DETAILED EXPLANATION ON THE OB SERVATIONS OF THE AO. THE LD. 3 ITA NO. 146/JP/2014 BAJRANG TRADING CORPORATION VS. ITO CIT (A) AFTER CONSIDERING THE ENTIRE FACTS AND REMA ND REPORT SUBMITTED BY THE AO AND THE SUBMISSIONS OF THE LD. A/R, DELETED THE ADD ITION IN RESPECT OF 12 CREIDTORS AMOUNTING TO RS. 32,05,000/- AND CONFIRMED THE ADDI TION IN RESPECT OF 6 CREDITORS AMOUNTING TO RS. 5,90,000/-. 4. BEING AGGRIEVED BY THE ORDER OF LD. CIT (A), BOT H THE PARTIES HAVE FILED APPEAL BEFORE THE TRIBUNAL. REVENUE HAS FILED APPEAL IN RE SPECT OF 7 CREDITORS AMOUNTING TO RS. 19,80,000/- WHEREAS ASSESSEE HAS FILED APPEAL I N RESPECT OF 6 CREDITORS AMOUNTING TO RS. 5,90,000/-. THE TRIBUNAL DISMISSE D THE APPEAL OF THE REVENUE ON THE GROUND OF LOW TAX EFFECT. NO APPLICATION WAS FI LED BY THE REVENUE FOR RECALLING THE DISMISSAL ORDER PASSED BY THE TRIBUNAL ON ACCOUNT O F LOW TAX EFFECT. IT MAY BE PERTINENT TO MENTION HERE THAT THE APPEAL OF THE RE VENUE AS WELL AS OF THE ASSESSEE ARE INTERLINKED AND INTERWOVEN HAVE RAISED THE COMM ON QUESTION OF LAW AND FACT. LD AR FOR THE ASSESSEE HAS RELIED UPON THE JUDGMENT PA SSED BY DELHI TRIBUNAL IN SUPPORT OF NON-REVIVAL OF THE APPEAL OF THE REVENUE . SINCE NO FORMAL APPLICATION HAS BEEN FILED BY THE REVENUE AT THIS STAGE , THEREFORE , NOW WE WILL TAKE UP THE APPEAL OF THE ASSESSEE ONLY . 4.1. THE LD. A/R FOR THE ASSESSEE HAS SUBMITTED DET AILED SUBMISSIONS IN RESPECT OF THE 6 CREDITORS AS TABULATED HEREUNDER :- S.NO. NAME OF CREDITOR AND LOAN AMOUNT OBSERVATION OF AO FINDINGS OF CIT(A) ASSESSEES EXPLANATION 1. DEEPIKA KHANDELWAL RS.1,50,000/- NOT AN I.T. ASSESSEE. NOT PRODUCED FOR EXAMINATION WITH NECESSARY EVIDENCES NO DETAILS WERE FURNISHED FROM THE BANK STATEMENT (PB 72-73), IT CAN BE NOTED THAT CREDITOR HAS ADVANCED RS.75,000/- TO ASSESSEE ON 26.09.2006 AND 08.12.2006. THE ASSESSEE DURING THE YEAR ITSELF REPAID THE ENTIRE AMOUNT. THUS, THE TRANSACTION IS FULLY 4 ITA NO. 146/JP/2014 BAJRANG TRADING CORPORATION VS. ITO VERIFIABLE FROM THE BANK STATEMENT. THE ASSESSEE HAS ALSO FILED THE CONFIRMATION OF CREDITOR (PB 71). THUS, MERELY BECAUSE CREDITOR IS NOT AN IT ASSESSEE AND HAS NOT BEEN PRODUCED FOR EXAMINATION, NO ADVERSE INFERENCE CAN BE DRAWN. CIT(A) WRONGLY OBSERVED THAT NO DETAILS WERE FURNISHED WHEREAS HER CONFIRMATION AND BANK ACCOUNT WAS FILED BEFORE THE AO/CIT(A). THEREFORE, THE ADDITION CONFIRMED BY CIT(A) BE DELETED. 2. GOVIND PRASAD RS.1,15,000/- BANK STATEMENT, ADDRESS, PAN NO., ITR NOT FILED. NOT PRODUCED FOR EXAMINATION WITH NECESSARY EVIDENCES NO DETAILS WERE FURNISHED THE CONFIRMATION OF THE CREDITOR IS AT PB 74 FROM WHICH IT CAN BE NOTED THAT THE AMOUNT OF LOAN IS RS.95,000/- AND NOT RS.1,15,000/-. INTEREST @ 15% IS CREDITED IN HIS ACCOUNT. INTEREST HAS BEEN PAID FOR EACH 2 MONTHS IN ADVANCE. THE ASSESSEE HAS ALSO FURNISHED FORM NO.15G (PB 75) OF CREDITOR FROM WHICH THE FACT OF ADVANCING LOAN OF RS.95,000/- BY THE CREDITOR TO THE ASSESSEE IS VERIFIABLE. THOUGH THE CREDITOR IS NOT AN INCOME TAX ASSESSEE BUT THE COMPLETE ADDRESS OF THE CREDITOR WAS FURNISHED BY ASSESSEE VIDE LETTER DT. 29.04.2011. STILL AO HAS NOT ISSUED SUMMON TO THE CREDITOR. CIT(A) WRONGLY OBSERVED THAT NO DETAILS WERE FURNISHED WHEREAS THE PAPERS AS STATED ABOVE WERE FILED BEFORE HIM. EVEN THE AMOUNT OF LOAN IS ONLY RS.95,000/- WHERE ADDITION IS MADE FOR RS.1,15,000/- . IN THESE FACTS, THE ADDITION CONFIRMED BY CIT(A) BE DELETED. 3. MAHESH KHANDELWAL (SARRAF) NOT PRODUCED FOR EXAMINATION WITH NECESSARY EVIDENCES NO DETAILS WERE FURNISHED THE CREDITOR IS AN INCOME TAX ASSESSEE HAVING PAN. COPY OF RETURN IS AT PB 77. THUS, THE 5 ITA NO. 146/JP/2014 BAJRANG TRADING CORPORATION VS. ITO RS.1,00,000/- IDENTITY OF THE CREDITOR IS PROVED. THE GENUINENESS OF THE TRANSACTION & CREDITWORTHINESS OF THE CREDITOR IS ESTABLISHED FROM THE FACT THAT CREDITOR HAS ADVANCED LOAN TO ASSESSEE THROUGH CHEQUE AND THERE WAS SUFFICIENT BANK BALANCE AVAILABLE IN THE ACCOUNT OF CREDITOR AT THE TIME OF ADVANCEMENT OF LOAN (PB 78). OUT OF LOAN OF RS.1 LACS, RS.50,000/- WAS REPAID DURING THE YEAR ITSELF. THESE TRANSACTIONS ARE VERIFIABLE FROM THE BANK STATEMENT. THE CONFIRMATION OF THE CREDITOR IS AT PB 76. THUS, THE ASSESSEE HAS FULLY DISCHARGED ITS BURDEN U/S 68. CIT(A) WRONGLY OBSERVED THAT NO DETAILS WERE FURNISHED WHEREAS THE PAPERS AS STATED ABOVE WERE FILED BEFORE HIM. IN THESE FACTS, THE ADDITION CONFIRMED BY CIT(A) BE DELETED. 4. PUSHPA DEVI MANGAL RS.35,000/- BANK STATEMENT NOT FILED. NOT PRODUCED FOR EXAMINATION WITH NECESSARY EVIDENCES NO DETAILS WERE FURNISHED THE ASSESSEE HAS FILED THE CONFIRMATION OF CREDITOR (PB 79) FROM WHICH IT CAN BE NOTED CREDITOR HAS ADVANCED RS.35,000/- TO ASSESSEE THROUGH CHEQUE ON 17.09.2005. INTEREST @ 15% WAS CREDITED IN HER ACCOUNT AND PART OF THE INTEREST WAS PAID DURING THE YEAR. THUS, MERELY BECAUSE BANK STATEMENT HAS NOT BEEN FILED OR CREDITOR HAS NOT BEEN PRODUCED FOR EXAMINATION, NO ADDITION CAN BE MADE. THUS, THE ASSESSEE HAS FULLY DISCHARGED ITS BURDEN U/S 68. CIT(A) WRONGLY OBSERVED THAT NO DETAILS WERE FURNISHED WHEREAS THE CONFIRMATION IS FILED. IN THESE FACTS, THE ADDITION CONFIRMED BY CIT(A) BE DELETED. 6 ITA NO. 146/JP/2014 BAJRANG TRADING CORPORATION VS. ITO 5. RAM BABU VYAS RS.40,000/- BANK STATEMENT NOT FILED. NOT PRODUCED FOR EXAMINATION WITH NECESSARY EVIDENCES NO DETAILS WERE FURNISHED THE CONFIRMATION OF THE CREDITOR IS AT PB 80 FROM WHICH IT CAN BE NOTED THAT THE CREDITOR HAS ADVANCED RS.40,000/- TO ASSESSEE THROUGH CHEQUE ON 19.04.2005. INTEREST @ 18% IS CREDITED IN HIS ACCOUNT. INTEREST HAS BEEN PAID FOR EACH 3 MONTHS. THE ASSESSEE HAS ALSO FURNISHED FORM NO.15G (PB 81) OF CREDITOR FROM WHICH THE FACT OF GIVING LOAN OF RS.40,000/- TO THE ASSESSEE IS VERIFIABLE. THUS, THE ASSESSEE HAS FULLY DISCHARGED ITS BURDEN U/S 68. CIT(A) WRONGLY OBSERVED THAT NO DETAILS WERE FURNISHED WHEREAS THE PAPERS AS STATED ABOVE WERE FILED BEFORE HIM. IN THESE FACTS, THE ADDITION CONFIRMED BY CIT(A) BE DELETED. 6. RAMDHAN MAWAI RS.1,50,000/- ON PERUSAL OF BANK STATEMENT OF THE CREDITOR, IT IS OBSERVED THAT ON 04.07.2005, THE BALANCE WAS RS. 1,551/-. THEREAFTER, RS. 54,870/- & RS. 1 LACS WAS CREDITED IN HIS BANK ACCOUNT BY CLEARING ON 23.07.2005 & RS. 1.50 LACS WAS ADVANCED TO ASSESSEE ON 25.07.2005. IN RESPONSE TO NOTICE U/S 131, CREDITOR STATED THAT HE DO NOT REMEMBER THAT FROM WHERE THE AMOUNT OF RS. 54,870/- & RS. 1 LACS HAS BEEN RECEIVED & DEPOSITED IN HIS BANK ACCOUNT. FURTHER, THE CREDITOR HAS NO PAN & DID FROM THE STATEMENT OF SH. MEWAI, IT IS SEEN THAT BEFORE ISSUE OF CHEQUE OF RS.1,50,000/-, THERE WAS DEPOSIT OF RS.54,870/- AND RS.1 LACS BY CHEQUE. THE SAME WAS NOT EXPLAINED BY HIM. AS SH. MAWAI IS NOT ASSESSED TO TAX AND HE HAS NO SOURCE OF SUBSTANTIAL INCOME, THE CREDITWORTHINESS OF CREDITOR REMAINS DOUBTFUL. NO INTEREST WAS PAID ON THE LOAN AND NO TDS WAS DEDUCTED. THIS ALSO MAKES THE TRANSACTION DOUBTFUL. THEREFORE, THE LOAN THE CONFIRMATION OF THE CREDITOR IS AT PB 82. LOAN OF RS.1,50,000/- WAS RECEIVED FROM HIM ON 25.06.2005 AND REPAID ON 01.02.2006. THE TRANSACTION OF GIVING THE LOAN AND REPAYMENT OF LOAN IS VERIFIABLE FROM HIS BANK STATEMENT (PB 84-86). THE CREDITOR IN HIS STATEMENT, IN REPLY TO Q. NO. 7 TO 10 (PB 87- 90) HAS EXPLAINED THAT BEFORE GIVING LOAN TO THE ASSESSEE, THE CREDIT IN HIS BANK ACCOUNT OF RS.54,870/- IS FROM LIC AND HE DO NOT REMEMBER THE CREDIT OF RS.1,00,000/- IN THE BANK ACCOUNT AS THE MATTER IS OLD. HE ALSO EXPLAINED THE SOURCE OF HIS INCOME WHICH PROVES HIS CREDITWORTHINESS. THEREFORE, ONLY BECAUSE THE CREDITOR IS NOT ASSESSED TO TAX OR THAT INTEREST IS NOT PAID ON THE LOAN GIVEN BY HIM, THE LOAN RECEIVED BY THE ASSESSEE CANNOT BE CONSIDERED 7 ITA NO. 146/JP/2014 BAJRANG TRADING CORPORATION VS. ITO NOT FILE ITR. THEREFORE, THE CREDITOR HAS NO CREDITWORTHINESS TO GIVE LOAN OF RS. 1.50 LACS TO ASSESSEE. IS TREATED AS UNEXPLAINED. AS DOUBTFUL. THE ASSESSEE HAS DISCHARGED HIS BURDEN U/S 68 BY ESTABLISHING THE IDENTITY, GENUINENESS AND THE CREDITWORTHINESS OF THE CREDITOR. THERE IS NO LAW THAT ASSESSEE HAS TO PROVE THE SOURCE OF CREDIT IN THE HANDS OF THE CREDITOR. THEREFORE, THE ADDITION CONFIRMED BY CIT(A) BE DELETED. THE LD. A/R SUBMITTED THAT IN VIEW OF ABOVE, IT CAN BE NOTED THAT ASSESSEE HAS DISCHARGED HIS ONUS TO PROVE THE CREDITOR U/S 68. M OST OF THE CREDITORS HAVE APPEARED BEFORE THE AO IN RESPONSE TO SUMMONS U/S 1 31. ALL THE TRANSACTIONS HAVE BEEN CARRIED OUT THROUGH BANKING CHANNEL. CREDITORS HAVE PROVIDED THE CONFIRMATION. THUS, THE ASSESSEE HAS PROVED THE IDENTITY OF THE C REDITOR, GENUINENESS OF THE TRANSACTION & THE CREDITWORTHINESS OF THE CREDITOR. IN SUPPORT OF HIS SUBMISSION HE PLACED RELIANCE ON THE FOLLOWING JUDGMENTS :- CIT VS. JAI KUMAR BAKLIWAL (2014) 366 ITR 217/ 101 DTR 377 (RAJ.) (HC) CIT VS. H.S. BUILDERS (P.) LTD. 78 DTR 169 (RAJ.)(H C)(2012) (PB 108-119) LABH CHAND BOHRA VS. ITO 189 TAXMAN 141/ 219 CTR 5 71 (RAJ.)(HC) KANHAIALAL JANGID VS. ACIT 217 CTR 354 (RAJ.) (HC) ARAVALI TRADING CO. VS. ITO 187 TAXMAN 338 (RAJ.) (HC) THE LD. A/R, THEREFORE, PRAYED THAT THE ADDITION CO NFIRMED BY CIT(A) BE DELETED. 4.2. ON THE OTHER HAND, THE LD. D/R SUPPORTED THE O RDER OF LD. CIT (A) AND REQUESTED THAT THE ORDER OF LD. CIT (A) BE CONFIRME D. 4.3. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED TH E MATERIAL AVAILABLE ON RECORD. WE WILL BE DISCUSSING EACH OF THE CREDITORS ON THE TOUCH STONE OF SECTION 68. 8 ITA NO. 146/JP/2014 BAJRANG TRADING CORPORATION VS. ITO WITH RESPECT TO DEEPIKA KHANDELWAL, THE AO HAS MENT IONED THAT THE ASSESSEE IS NOT ASSESSED TO THE INCOME TAX. MOREOVER, THE ASSESSEE WAS NOT PRODUCED FOR EXAMINATION, THEREFORE, THE ADDITION WAS CONFIRMED BY THE AO. TO THE SAME EFFECT IS THE ORDER PASSED BY LD. CIT (A). THE LD. A/R HAS D RAWN OUR ATTENTION TO PAGES 72 & 73 OF THE PAPER BOOK WHEREIN THE BANK STATEMENT OF DEEPIKA KHANDELWAL HAS BEEN PLACED ON RECORD. THE ASSESSEE HAS ALSO PRODUCED TH E CONFIRMATION FILED BY DEEPIKA KHANDELWAL. HOWEVER, IT WAS SUBMITTED THAT THE LD. CIT (A) AND AO WERE WRONG AS THEY HAVE WRONGLY MENTIONED THAT NO DETAILS WERE FI LED. IN OUR OPINION, FOR THE PURPOSE OF SECTION 68, THE IDENTITY OF THE CREDITOR , CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTION IS REQUIRED TO BE PROVED. IN THE PRESENT CASE THE IDENTITY OF DEEPIKA KHANDELWAL HAS NOT BEEN PROVED BY PRODUCING THE PAN NUMBER, INCOME TAX RETURN OR ANY OTHER IDENTITY OF DEEPIKA KHANDELWAL . THE BANK STATEMENT HAS BEEN PRODUCED WHEREIN IT IS MENTIONED THAT RS. 75,000/- HAS BEEN PAID TO BAJRANG TRADING CORPORATION ON 26.09.2005. HOWEVER, IF WE C LOSELY EXAMINE THE BANK STATEMENT, WE WILL NOTICE THAT RS. 50,000/- WAS TRA NSFERRED IN THE BANK ACCOUNT IMMEDIATELY ON 27.9.2005 AND ON 27.9.2005. THE SAID AMOUNT WAS WITHDRAWN IN CASH FROM THE ACCOUNT. THUS NEITHER THE IDENTITY OF THE CREDITOR WAS ESTABLISHED NOR THE GENUINENESS OF THE TRANSACTION HAS BEEN ESTABLI SHED. THEREFORE, IN OUR VIEW THE AUTHORITIES BELOW WERE RIGHT IN UPHOLDING THE ADDIT ION OF RS. 1,50,000/- IN RESPECT OF DEEPIKA KHANDELWAL. GOVIND PRASAD : THE AO AND LD. CIT (A) BOTH HAVE CONFIRMED THE ADDI TION AS SHRI GOVIND PRASAD HAS NOT BEEN PRODUCED FOR EXAMIN ATION. MOREOVER, NEITHER PAN NUMBER NOR THE INCOME TAX RETURN WAS FILED BEFORE T HE AUTHORITIES BELOW. THE LD. A/R HAS DRAWN OUR ATTENTION TO PAGE 74 OF THE PAPER BOOK WHEREBY THE ASSESSEE 9 ITA NO. 146/JP/2014 BAJRANG TRADING CORPORATION VS. ITO HAS FURNISHED THE CONFIRMATION LETTER CONFIRMING TH E LOAN OF RS. 95,000/- GIVEN TO THE ASSESSEE. THE INTEREST OF RS. 9158/- WAS CREDITED IN THE BOOKS OF ACCOUNT. THE ASSESSEE HAS ALSO FURNISHED FORM NO. 15G TO SHOW TH E GENUINENESS OF THE TRANSACTION. IN OUR VIEW ON THE BASIS OF THE ABOVE , IT IS SUBMITTED THAT THE ASSESSEE WAS ABLE TO VERIFY THE CREDITORS AND THE LOAN GIVEN BY HIM. WE HAVE PERUSED THE RECORD. IN OUR VIEW, THE ASSES SEE HAS FAILED TO PROVE THE IDENTITY OF SHRI GOVIND PRASAD AS NEITHER THE P AN NUMBER NOR THE IDENTITY DOCUMENT HAS BEEN PRODUCED BEFORE THE AUTHORITIES B ELOW. MOREOVER, FROM BARE PERUSAL AND COMPARISON OF THE SIGNATURES ON THE CON FIRMATION OF ACCOUNT AT PAGE 75 AND THE SIGNATURE ON FORM NO. 15G CLEARLY SHOWS THA T THERE WAS VAST VARIATION IN THE SIGNATURE. BOTH THE SIGNATURES ARE OF A DIFFERENT P ERSON AND ARE NOT BEING SIGNED BY ONE PERSON. MOREOVER, NEITHER THE CREDITWORTHINESS NOR THE GENUINENESS OF THE TRANSACTION HAS BEEN PROVED BY THE ASSESSEE. THEREF ORE, IN OUR VIEW THE AUTHORITIES BELOW ERE RIGHT IN UPHOLDING THE ADDITION OF ADDITI ON OF RS. 1,15,000/-, IN FACT IT SHOULD BE RS. 95,000/- INSTEAD OF RS. 1,15,000/-. T HUS WE UPHOLD THE ADDITION OF RS. 95,000/-ON ACCOUNT OF SHRI GOVIND PRASAD. MAHESH KHANDELWAL : IN RESPECT OF SHRI MAHESH KHANDELWAL, THE ASSESSEE HAS PRODUCED INCOME-TAX RETURN AND HAS ALSO PRODUCE D STATEMENT OF BANK ACCOUNT SUGGESTING THAT A SUM OF RS. 1,00,000/- WAS GIVEN A S LOAN TO THE ASSESSEE. ON THE BASIS OF THE ABOVE SAID, IT WAS CONTENDED BY THE LD . A/R THAT THE INGREDIENT OF SECTION 68 HAS BEEN COMPLIED WITH AND THE AUTHORITI ES BELOW HAVE WRONGLY MADE THE ADDITION. 10 ITA NO. 146/JP/2014 BAJRANG TRADING CORPORATION VS. ITO ON THE OTHER HAND, THE LD. D/R HAS SUBMITTED THAT NEITHER THE IDENTITY OF THE PERSON HAS BEEN ESTABLISHED NOR THE CREDITWORTHINES S OF THE PERSON HAS BEEN ESTABLISHED. THEREFORE, THE ADDITION HAS BEEN CORR ECTLY UPHELD BY THE AUTHORITIES BELOW. WE FIND THAT SHRI MAHESH KHANDELWAL WAS REQUIRED T O BE PRODUCED. HOWEVER, FROM THE PERUSAL OF INCOME TAX RETURN, THE NAME MEN TIONED IS MAHESH CHAND SARAFF INSTEAD OF MAHESH KHANDELWAL. THE ASSESSEE HAS NOT BOTHERED TO SUBMIT ANY DOCUMENT TO PROVE THAT SHRI MAHESH CHAND SARAFF AND SHRI MAHESH KHANDELWAL ARE ONE AND THE SAME PERSON NOR ANY EFFORTS HAS BEEN MA DE TO PRODUCE SHRI MAHESH CHAND SARAFF AND SHRIMAHESH KHANDELWAL. MOREOVER, T HE ITR OF SHRI MAHESH CHAND SARAF SHOWS THAT THE TOTAL INCOME OF THE ASSESSEE F ROM ALL SOURCES WAS RS. 1,27,372/-. IN OUR VIEW, THE CREDITWORTHINESS OF SH RI MAHESH CHAND SARAF/MAHESH KHANDELWAL HAS NOT BEEN PROVED. THEREFORE, WE ARE L EFT WITH NO OTHER OPTION BUT TO CONFIRM THE ADDITION OF RS. 1,00,000/-. SMT. PUSHPA DEVI MANGAL : THE AO HAS MENTIONED THA T THE BANK STATEMENT OF SMT. PUSHPA DEVI MANGAL HAS NOT BEEN PRODUCED BY TH E ASSESSEE NOR THE SAID SMT. PUSHPA DEVI MANGAL WAS PRODUCED FOR EXAMINATION BY THE AO. ON THE OTHER HAND, THE LD. A/R FOR THE ASSESSEE HA S DRAWN OUR ATTENTION TO PAGE 79 WHICH IS THE CONFIRMATION OF ACCOUNT WHICH SHOWS THAT A SUM OF RS. 35,000/- WAS PAID ON 17 TH SEPTEMBER, 2005 AND THE INTEREST WAS CHARGED @ 15% ON THE SAID AMOUNT. 11 ITA NO. 146/JP/2014 BAJRANG TRADING CORPORATION VS. ITO THE LD. D/R HAS SUBMITTED THAT NEITHER THE PAN NUM BER NOR THE CREDITOR WAS PRODUCED FOR EXAMINATION BY THE AO. THEREFORE, THE AUTHORITIES BELOW WAS RIGHT IN UPHOLDING THE ADDITION. WE HAVE PERUSED THE RECORD. ASSESSEE HAS NOT PRODU CED SMT. PUSHPA DEVI FOR EXAMINATION NOR THE IDENTITY OF SMT. PUSHPA DEV I HAS BEEN PROVED BY PRODUCING PAN OR ANY OTHER DOCUMENT BEFORE THE AO. INTERESTI NGLY, THE BANK ACCOUNT OF SMT. PUSHPA DEVI HAS ALSO NOT BEEN PRODUCED BY THE ASSES SEE SO THAT THE CREDITWORTHINESS OF SMT. PUSHPA DEVI CAN BE CONFIRM ED. IN THE ABSENCE OF THE CRUCIAL AND VITAL EVIDENCE LIKE PAN AND IDENTITY OF THE PERSON AND CREDITWORTHINESS OF THE CREDITOR, THE ONUS UNDER SECTION 68 HAS NOT BEE N DISCHARGED. THEREFORE, WE ARE LEFT WITH NO OTHER OPTION BUT TO CONFIRM THE ADDITI ON MADE BY THE AO AND LD. CIT (A). SHRI RAM BABU VYAS : THE AO HAS MENTIONED THAT THE BANK STATEMENT OF SHRI RAM BABU VYAS HAS NOT BEEN PRODUCED BY THE ASSESSEE NOR THE SAID SHRI RAM BABU VYAS WAS PRODUCED FOR EXAMINATION BY THE AO. ON THE OTHER HAND, THE LD. A/R FOR THE ASSESSEE HA S DRAWN OUR ATTENTION TO PAGE 79 WHICH IS THE CONFIRMATION OF ACCOUNT WHICH SHOWS THAT A SUM OF RS. 40,000/- WAS PAID ON 19.04.2005 AND THE INTEREST WA S CHARGED @ 18% ON THE SAID AMOUNT. THE LD. D/R HAS SUBMITTED THAT NEITHER THE PAN NUM BER NOR THE CREDITOR WAS PRODUCED FOR EXAMINATION BY THE AO. THEREFORE, THE AUTHORITIES BELOW WAS RIGHT IN UPHOLDING THE ADDITION. WE HAVE PERUSED THE RECORD. ASSESSEE HAS NOT PRODU CED SHRI RAM BABU VYAS FOR EXAMINATION NOR THE IDENTITY OF SHRI RAM BABU V YAS HAS BEEN PROVED BY 12 ITA NO. 146/JP/2014 BAJRANG TRADING CORPORATION VS. ITO PRODUCING PAN OR ANY OTHER DOCUMENT BEFORE THE AO. INTERESTINGLY, THE BANK ACCOUNT OF SHRI RAM BABU VYAS HAS ALSO NOT BEEN PRO DUCED BY THE ASSESSEE SO THAT THE CREDITWORTHINESS OF SHRI RAM BABU VYAS CAN BE C ONFIRMED. IN THE ABSENCE OF THE CRUCIAL AND VITAL EVIDENCE LIKE PAN AND IDENTITY OF THE PERSON AND CREDITWORTHINESS OF THE CREDITOR, THE ONUS UNDER SECTION 68 HAS NOT BEE N DISCHARGED. THEREFORE, WE ARE LEFT WITH NO OTHER OPTION BUT TO CONFIRM THE ADDITI ON MADE BY THE AO AND LD. CIT (A). SHRI RAMDHAN MAWAI : THE AO HAS CONFIRMED THE ADD ITION AS THE AO CAME TO THE CONCLUSION THAT SHRI RAMDHAN MAWAI DOES NOT HAV E THE CREDITWORTHINESS TO LEND A SUM OF RS. 1,50,000/- TO THE ASSESSEE. THE LD. C IT (A) HAS CONFIRMED THE ADDITION. HOWEVER, THE LD. A/R HAS SUBMITTED THAT THE AUTHORI TIES BELOW HAVE COMMITTED SERIOUS ERROR AS THEY HAVE NOT APPLIED TH EIR MIND. IT WAS SUBMITTED THAT ON 25.06.2005 THE ASSESSEE HAS RECEIVED A LOAN OF R S. 1,25,000/- FROM SHRI RAMDHAN MAWAI. HOWEVER, THE AMOUNT WAS REPAID ON 01 .02.2006. THE REPAYMENT OF THE LOAN IS VERIFIABLE FROM THE BANK STATEMENT ( PAGE 85-86 OF PAPER BOOK). THE LD. D/R ON THE OTHER HAND SUBMITTED THAT THE O RDER OF LD. CIT (A) IN RESPECT OF SHRI RAMDHAN MAWAI IS REQUIRED TO BE UPH ELD. WE HAVE GONE THROUGH THE RIVAL SUBMISSIONS AND PER USED THE MATERIAL ON RECORD. IN OUR VIEW, THE ASSESSEE WAS ABLE TO ESTA BLISH THE IDENTITY OF THE CREDITOR. HE HAS ALSO DEMONSTRATED THE GENUINENESS OF THE TRA NSACTION. IN OUR VIEW, THE ASSESSEE IS ALSO ABLE TO ESTABLISH THE CREDITWORTHI NESS OF SHRI RAMDHAN MAWAI AS PART OF THE AMOUNT HAS BEEN RECEIVED BY HIM FROM TH E LIC. HOWEVER, IN RESPECT OF RS. 1,00,000/-, ASSESSEE HAS FAILED TO DISCLOSE THE SOURCE OF RECEIVING THE AMOUNT. IN OUR VIEW, THE AO HAS A LIMITED SCOPE FOR THE PUR POSE OF CREDITWORTHINESS OF THE CREDITOR. ONCE THE IDENTITY OF THE CREDITOR IS ESTA BLISHED, THE GENUINENESS OF THE 13 ITA NO. 146/JP/2014 BAJRANG TRADING CORPORATION VS. ITO TRANSACTION IS NOT DISPUTED. THE AO IN OUR VIEW HAS NO RIGHT TO EXAMINE THE SOURCE OF SOURCE. THEREFORE, WE HAVE NO HESITATION TO DELE TE THE ADDITION OF RS. 1,50,000/- IN RESPECT OF SHRI RAMDHAN MAWAI. 5. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED IN TERMS OF THE DISCUSSION HEREIN ABOVE. ORDER PRONOUNCED IN THE OPEN COURT ON 13/05/201 6. SD/- SD/- VH-VKJ-EHUK YFYR DQEKJ (T.R. MEENA) (LALIET KUMAR) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 13/05/2016 DAS/ VKNS'K DH IZFRFYFI VXZSFKR @ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ @ THE APPELLANT- M/S. BAJRANG TRADING CORPORATION, GA NGAPUR CITY. 2. IZR;FKHZ @ THE RESPONDENT- THE INCOME TAX OFFICER, WARD-2. SAW AI MADHOPUR. 3. VK;DJ VK;QDR @ CIT 4. VK;DJ VK;QDRVIHY @ THE CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ @ DR, ITAT, JAIPUR 6. XKMZ QKBZY @ GUARD FILE (ITA NO.146/JP/2014) VKNS'KKUQLKJ @ BY ORDER, LGK;D IATHDKJ @ ASST. REGISTRAR 14 ITA NO. 146/JP/2014 BAJRANG TRADING CORPORATION VS. ITO 15 ITA NO. 146/JP/2014 BAJRANG TRADING CORPORATION VS. ITO 16 ITA NO. 146/JP/2014 BAJRANG TRADING CORPORATION VS. ITO