M/s National Diary Corporation through its Partner Sh. Bhupinder Singh, Ludhiana V. DCIT, Circle, Khanna

ITA 1503/CHANDI/2017

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 4969 (ITAT-CHANDIGARH)
• Duration Of Justice: 6 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-05-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2013-2014
• Appeal Filed On: 27-10-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANJIT SINGH
• Section: 131; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCHB, CHANDIGARH BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER AND DR. B.R.R. KUMAR, ACCOUNTANT MEMBER ITA NO. 1503/CHD/2017 (ASSESSMENT YEAR: 2013-14) M/S NATIONAL DAIRY CORPORATION VS. THE DCIT THROUGH ITS PARTNER CIRCLE, KHANNA SHRI. BHUPINDER SINGH LUDHIANA, PUNJAB C-54, FOCAL POINT, KHANNA LUDHIANA PAN: AABFN1467H (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI. ADITYA GROVER MS. MEENAKSHI GUPTA DEPARTMENT BY : SHRI. MANJIT SINGH DATE OF HEARING : 03/05/2018 DATE OF PRONOUNCEMENT :09/05/2018 O R D E R PER DR.B.R.R.KUMAR, A.M . : THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE A GAINST THE ORDER OF THE LD. CIT(A)-2, LUDHIANA DT. 31/07/2017. 2. IN THE PRESENT APPEAL ASSESSEE HAS RAISED THE FO LLOWING GROUNDS OF APPEAL: 1. THAT THE ORDER PASSED BY LD. CIT(A) AND THE ASSESSM ENT PROCEEDINGS CARRIED OUT BY THE A.O ARE BAD BOTH IN TERM OF DE-J URE AND DE-FACTO AND HENCE DESERVES TO BE SET-ASIDE AT THE VERY OUT SET. 2. THAT THE LD. CIT(A) HAS ERRED WHILE CONFIRMING THE ADDITION OF RS. 10,00,000/- UNDER SECTION 68 OF THE ACT, AS MADE BY THE ASSESSING OFFICER IN AN ARBITRARY MANNER. 3. THAT THE LD. CIT(A) WITHOUT CONSIDERING THE FACTS A ND CIRCUMSTANCES OF THE MATTER HAS SUMMARILY AND MECHANICALLY UPHELD THE AS SESSMENT ORDER WRONGLY PASSED BY THE A.O. 4. THAT THE LD. CIT(A) HAS ERRED WHILE CONFIRMING THE ADDITION DESPITE OF THE FACT THAT THE APPELLANT HAS PLACED ON RECORD SUFFIC IENT / COGENT EVIDENCE WITH RESPECT TO PROVING THE SOURCE OF THE UNSECURED LOAN OF RS. 10,00,000/- AND HAS DULY DISCHARGED THE ONUS UPON THE APPELLANT. 2 5. THAT BOTH THE LD. CIT(A) AND A.O HAD FAILED TO DISC HARGE THEIR DUTY AS TO DISPROVE THE VERSION OF THE APPELLANT WITH RESPECT TO UNSECURED LOAN IN QUESTION. 3. THE MOOT ISSUE INVOLVED IN THIS CASE IS ADDITION OF RS. 10 LACS ON ACCOUNT OF UNEXPLAINED UNSECURED LOAN FROM ONE M/S ONKAR RA I & CO. PROPRIETOR MR. VIKAS MEHTA. DURING THE ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER HAS ASKED TO PROVIDE IDENTITY, GENUINENESS OF THE TRANSACTION AND CREDIT WORTHINESS OF THE LENDER OF THE LOAN. BEFORE THE ASSESSING OFFICER TH E ASSESSEE SUBMITTED THAT THE LOAN HAS BEEN TAKEN THROUGH CHEQUE AND HAS CONFIRME D THE ADVANCEMENT OF THE LOAN AND HENCE NO ADDITION IS CALLED FOR AS THE PRIMARY ONUS HAS BEEN DISCHARGED. SINCE THE CREDIT WORTHINESS OF THE LENDER HAS NOT B EEN PROVED, THE ASSESSING OFFICER HAS MADE THE ADDITION OF THIS LOA N AMOUNT UNDER SECTION 68 OF INCOME TAX ACT,1961. 4. BEFORE THE LD. CIT(A) THE ASSESSEE SUBMITTED THA T THE INTERESTS ARE ALSO BEING PAID REGULARLY TO THE LENDER WHICH GIVES CRED ENCE TO THE LOAN AND HENCE THE ADDITION NEEDS TO BE DELETED. HOWEVER, THE LD. CIT(A) HAS CONFIRMED THE ADDITION ON THE GROUNDS THAT THE ASSESSEE HAS NOT P RODUCED THE LENDER FOR EXAMINATION BEFORE THE ASSESSING OFFICER. 5. WE HAVE HEARD THE ARGUMENTS OF BOTH THE PARTIES, THE LD.AR CONTENTION THAT THE LENDER IS VERY INFLUENTIAL PERSON BEING A POLITICIAN AND IT IS BEYOND THE CONTROL OF THE ASSESSEE TO PRODUCE HIM BEFORE THE A SSESSING OFFICER. IT WAS ALSO ARGUED THAT HAVING DISCHARGE THE PRIMARY ONUS, IT W AS INCUMBENT ON THE ASSESSING OFFICER TO MAKE INVESTIGATION AS NECESSAR Y FROM HIS SIDE. 6. LD.AR HAS FURTHER CONTENDED THAT IT WAS IMPERATI VE FOR THE ASSESSING OFFICER TO SUMMON THE LOANEE AND TO RECORD THE STAT EMENTS UNDER SECTION 131 OF INCOME TAX ACT,1961. IT IS ONLY THEREAFTER THAT THE TOTALITY OF THE MATERIAL PLACED BY THE ASSESSEE BEFORE THE ASSESSING OFFICER COULD BE TAKEN INTO CONSIDERATION TO DETERMINE THE VERACITY THEREOF UND ER SECTION 68 OF THE INCOME TAX ACT,1961 . RELIANCE IS PLACED ON THE JUDGMENT O F THE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. N.P. GARODIA 310 ITR 6 2 (P&H). HE THEREFORE REQUESTED THAT THE ISSUE BE RESTORED TO THE FIE OF THE ASSESSING OFFICER TO MAKE NECESSARY ENQUIRIES ON THIS ISSUE AND DECIDE THE IS SUE IN ACCORDANCE WITH THE LAW. 3 7. IN THESE CIRCUMSTANCES, WE REMAND THE MATTER BAC K TO THE FILE OF THE ASSESSING OFFICER TO CONDUCT PROPER INQUIRIES BEFOR E BRINGING THE AMOUNTS FOR TAXATION UNDER SECTION 68. THE VERACITY OF THE GENU INENESS AND CREDIT WORTHINESS WOULD DEPEND ON THE OUTCOME OF THE ISSUE DETERMINED HEREINABOVE. 8. AS A RESULT, THE APPEAL OF THE ASSESSEE IS ALLOW ED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (SANJAY GARG) (DR. B.R.R. KUMAR) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 09/05/2018 AG COPY TO: 1.THE APPELLANT, 2. THE RESPONDENT, 3. THE CIT(A), 4. THE CIT, 5. THE DR