Sreenivas Mugalappa Benny, Pune V. Income - Tax Officer, Ward - 7(3), Pune

ITA 1498/PUN/2017

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 5067 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 7 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-02-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 18-12-2018
• Assessment Year: 2013-2014
• Appeal Filed On: 13-06-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: NIKHIL GANGWAL
• Keywords: Business income
• Section: 143(3); 133(6); 68

Judgement Text

- IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH SMC , PUNE , , BEFORE MS. SUSHMA CHOWLA, JM AND SHRI ANIL CHATURVEDI , AM . / ITA NO. 1 498 /P U N/201 7 / ASSESSMENT YEAR : 20 13 - 14 SREENIVAS MUGALAPPA BENNY S.NO.127/3, SREE LAXMI VILLA, SHIKRISHNA SOCIETY, MUNDHWA MANJARI ROAD, PUNE 412307 . / APPELLANT PAN: A JIPB4028L VS. T HE INCOME TAX OFFICER, WAD 7 ( 3 ), PUNE . / RESPONDENT / APPELLANT BY : SHRI NIKHIL GANGWAL / RESPONDENT BY : SHRI RAJESH GAWALI / DATE OF HEARING : 18 . 12 .201 8 / DATE OF PRONOUNCEMENT: 06 . 0 2 .201 9 / ORDER PER SUSHMA CHOWLA, J M : THE APPEAL FILED BY ASSESSEE IS AGAINST ORDER OF CIT (A) , PUNE - 5, PUNE , DATED 28 . 0 4 .201 7 RELATING TO ASSESSMENT YEAR 20 13 - 14 AGAINST ORDER PASSED UNDER SECTION 143(3) OF THE INCOME - TAX ACT , 1961 (IN SHORT THE ACT) . 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: - ITA NO. 1498 /P U N/201 7 SREENIVAS MUGALAPPA BENNY 2 1. THAT ON FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LEARNED CIT(A) HAS ERRED IN NOT DELETING THE COMPLETE ADDITION OF RS.26,00,000/ - AS MADE BY THE AO COMPUTING IMPUGNED INCOME U/S 68 OF THE ACT - WITHOUT CONSIDERING THE SUBMISSIONS AND OTHER EVIDENCES OF THE APPELLANT; AND THEREFORE, THE ENTIRE ADDITION NEEDS TO BE DELETED BEING ERRONEOUS, IMPROPER, ILLEGAL AND BAD - IN - LAW. 2. THAT ON FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LEARNED CIT(APPEALS) HAS ERRED IN SUSTAINING THE ADDITION OF RS.26,00,000/ - MADE BY THE AO BY TREATING LOAN RECEIVED AS INCOME U/S 68. 3. THE ONLY ISSUE RAISED IN THE PRESENT APPEAL IS AGAINST ADDITION OF 26 LAKHS MADE UNDER SECTION 68 OF THE ACT. 4. BRIEFLY, IN THE FACTS OF THE CASE, CASE OF ASSESSEE WAS PICKED UP FOR SCRUTINY. THE ASSESSING OFFICER NOTED THAT THE ASSESSEE HAD OBTAINED UNSECURED LOANS TOTALING 86,45,750/ - FROM VARIOUS PARTIES, WHICH IN TU RN WERE INVESTED IN IMMOVABLE PROPERTY. THE ASSESSEE WAS ASKED TO FURNISH THE DETAILS OF UNSECURED LOANS ALONG WITH CONFIRMATION AND CREDITWORTHINESS OF CREDITORS. THE ASSESSEE FURNISHED LOAN DETAILS AND CONFIRMATIONS. HOWEVER, HE FAILED TO SUBSTANTIATE THE CREDITWORTHINESS. THE ASSESSEE COULD NOT PRODUCE THE PARTIES FROM WHOM LOANS WERE TAKEN AND THE ASSESSING OFFICER CALLED FOR INFORMATION UNDER SECTION 133(6) OF THE ACT. THE SAID INFORMATION IS INCORPORATED AT PAGES 2 AND 3 OF ASSESSMENT ORDER, WHER EIN THE NAMES AND ADDRESSES OF PARTIES, WHO HAD GIVEN THE LOANS, THEIR PAN NUMBERS AND AMOUNT OF LOANS ARE TABULATED. THE TOTAL NUMBER OF PARTIES WERE SIX AND THE EXPLANATION IN RESPECT OF FIVE PARTIES W ERE ACCEPTED EXCEPT MARUTI SRINIVAS , WHO HAD ADVANCE D SUM OF 26 LAKHS. THOUGH HE HAD SEND HIS CONFIRMATION AND THE COPY OF ITR BUT THE ASSESSING OFFICER DID NOT ACCEPT THE SAME AND MADE AN ADDITION OF 26 LAKHS. ITA NO. 1498 /P U N/201 7 SREENIVAS MUGALAPPA BENNY 3 5. BEFORE THE CIT(A), THE ASSESSEE FURNISHED RETURN OF INCOME OF SHRI MARUTI SRINIVAS, WHO HAD FILE D THE SAID RETURN OF INCOME FOR ASSESSMENT YEAR 2013 - 14 ON 10.12.2016 I.E. AFTER COMPLETION OF SCRUTINY ASSESSMENT ORDER. HOWEVER, NO RETURN OF INCOME WAS FILED FOR EARLIER YEARS. THE INFORMATION WAS FORWARDED TO ASSESSING OFFICER, WHO IN REMAND REPORT N OTES THE ENTRIES IN THE BANK ACCOUNT AND POINTS OUT THAT SUM OF 20 LAKHS WAS CREDITED INTO ACCOUNT ON 08.01.2013 AND ON 10.01.2013 LOAN TRANSFERRED FOR 15 LAKHS TO THE ASSESSEE. THE ASSESSEE IN REPLY, POINTED OUT THAT LOAN WAS RECEIVED THROUGH CHEQUE FROM PART Y WHO HAD GIVEN CONFIRMATION LETTER, HIS BANK STATEMENT AND THE INCOME TAX RETURN AND THE SAID LOAN WAS ALSO REPAID THROUGH PROPER BANKING CHANNEL IN SUBSEQUENT FINANCIAL YEAR. THE ASSESSEE THEN RAISED THE PLEA THAT SOURCE OF SOURCE COULD NOT BE ASKED FROM THE ASSESSEE. THE CIT(A) DID NOT ACCEPT THE PLEA OF ASSESSEE ON THE GROUND THAT THE ASSESSEE HAS FAILED TO PROVE CREDITWORTHINESS OF CREDITOR SHRI MARUTI SRINIVAS AND UPHELD THE ADDITION IN THE HANDS OF ASSESSEE, AGAINST WHICH THE ASSESSEE IS IN APPEAL. 6. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSE SSEE POINTED OUT THAT THE PERUSAL OF CONFIRMATION LETTER WOULD SUGGEST THAT THE ASSESSEE HAD RECEIVED LOAN OF 26 LAKHS THROUGH THREE ENTRIES I.E. 1 LAKH ON 10.01.2013, 10 LAKHS ON 17.01.2013 AND 15 LAKHS ON 10.01.2013. THE SAID LOAN HAS BEEN REPAI D IN THE SUBSEQUENT YEAR THROUGH RTGS / NEFT. THE ASSESSEE HAS ALSO POINTED OUT THAT LENDER WAS ENGAGED IN TRADING OF CONSTRUCTION MATERIAL BUT HAD FILED THE RETURN OF INCOME , A DMITTEDLY, AFTER THE SCRUTINY ASSESSMENT IN THE HANDS OF ASSESSEE BUT IN THE R EMAND PROCEEDINGS DETAILS WERE AVAILABLE AND THE ASSESSING OFFICER CANNOT ENQUIRE INTO SOURCE OF SOURCE. ITA NO. 1498 /P U N/201 7 SREENIVAS MUGALAPPA BENNY 4 7. THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE STRESSED THAT THE ASSESSEE HAS FAILED TO PROVE CREDITWORTHINESS OF CREDITOR. 8. WE HAVE HE ARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE LIMITED ISSUE WHICH IS ARISING IN THE PRESENT APPEAL IS AGAINST THE LOAN OF 26 LAKHS RECEIVED BY ASSESSEE FROM ONE SHRI MARUTI SRINIVAS. THE ASSESSEE UNDOUBTEDLY, HAS RECEIVED THE SAID AMOUNT THROUG H CHEQUES AND HAS ALSO REPAID THE SAID AMOUNT THROUGH BANKING CHANNEL. NO DISPUTE HAS BEEN RAISED IN RESPECT OF RETURN OF THE SAID LOAN IN SUCCEEDING YEAR. IN SUCH CIRCUMSTANCES, THE ISSUE WHICH ARISES IS WHETHER THE ASSESSEE HAS DISCHARGED HIS ONUS UNDE R SECTION 68 OF THE ACT. IN THIS REGARD, THE ASSESSEE HAS FURNISHED CONFIRMATION FROM THE PARTY AND ALSO THE COPY OF BANK ACCOUNT OF SAID PARTY FOR THE YEAR UNDER CONSIDERATION . THOUGH THE LENDER HAD NOT FURNISHED THE RETURN OF INCOME INITIALLY AND THERE AFTER, FURNISHED RETURN OF INCOME FOR ASSESSMENT YEAR 2013 - 14. 9. THE LIMITED ISSUE WHICH ARISES IS WHETHER WHILE APPLYING THE PROVISIONS OF SECTION 68 OF THE ACT, SOURCE OF SOURCE CAN BE LOOKED INTO. THE COURTS HAVE REPEATEDLY HELD THAT ONUS IS UPON T HE ASSESSEE ONLY TO ESTABLISH THE IDENTITY OF CREDITOR, HIS CREDITWORTHINESS AND GENUINENESS OF TRANSACTION AND THE COURTS CANNOT ASK THE ASSESSEE TO PROVE THE SOURCE OF SOURCE. 10. BOTH THE ORDERS OF AUTHORITIES BELOW REFLECT THAT THEY REFERRED TO THE AMOUNTS DEPOSITED IN THE ACCOUNT OF SHRI MARUTI SRINIVAS AND ONCE THE AMOUNT HAS BEEN ROUTED THROUGH BANKING CHANNELS FOR WHICH EXPLANATION OF ASSESSEE IS THAT LENDER HAS PAID THE SAID AMOUNT THROUGH HIS BUSINESS RECEIPTS, THEN NO FURTHER ENQUIRY CAN BE RA ISED IN THE HANDS OF ASSESSEE. ACCORDINGLY, WE HOLD THAT WHERE THE ASSESSEE HAS DISCHARGED HIS ONUS AS LAID DOWN IN SECTION 68 OF ITA NO. 1498 /P U N/201 7 SREENIVAS MUGALAPPA BENNY 5 THE ACT, NO ADDITION ON ACCOUNT OF LOAN RECEIVED FROM THE LOAN CREDITOR IS MERITED IN THE HANDS OF ASSESSEE. ACCORDINGLY, WE DELETE THE ADDITION OF 26 LAKHS MADE IN THE HANDS OF ASSESSEE. THE GROUNDS OF APPEAL RAISED BY ASSESSEE ARE THUS, ALLOWED. 11 . IN THE RESULT, THE APPEAL OF ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON THIS 6 TH DAY OF FEBR UARY , 201 9 . SD/ - SD/ - (ANIL CHATURVEDI) (SUSHMA CHOWL A ) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE ; DATED : 6 TH FEBR UARY , 201 9 . GCVSR / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT ; 2. / THE RESPONDENT; 3. ( ) / THE CIT(A) , PUNE - 5, PUNE ; 4. THE PR. CIT , PUNE - 4 , PUNE ; 5. 6. , , , - / DR SMC , ITAT, PUNE; / GUARD FILE . / BY ORDER , // TRUE COPY // / SR. PRIVATE SECRETARY , / ITAT, PUNE