Smt. Priya Arora, Chandigarh V. ACIT, CC-II, Chandigarh

ITA 153/CHANDI/2019

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 7817 (ITAT-CHANDIGARH)
• Duration Of Justice: 2 year(s) 1 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-03-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 27-05-2021
• Assessment Year: 2009-2010
• Appeal Filed On: 11-02-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KUSUM BA NSAL
• Section: 147; 148; 144

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH SMC CHANDIGARH !', # BEFORE: SMT. DIVA SINGH, JM ./ ITA NO. 153/CHD/2020 / ASSESSMENT YEAR : 2011-12 SHRI JAGJIT SINGH, VILLAGE SHERPUR KALAN, JAGRAON. THE ITO, WARD 1, JAGRAON. ./ PAN NO: CMCPS9544M / APPELLANT / RESPONDENT / ASSESSEE BY : SHRI SUDHIR SEHGAL, ADVOCATE ! / REVENUE BY : SMT. KUSUM BANSAL, ADDL. CIT ' # $/ DATE OF HEARING : 18.03.2021 %&'( $/ D ATE OF PRONOUNCEMENT : 26.03.2021 HEARING CONDUCTED VIA WEBEX $%/ ORDER THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE WHEREIN THE CORRECTNESS OF THE ORDER DATED 21.11.2019 OF CI T(A)-3, LUDHIANA PERTAINING TO 2011-12 ASSESSMENT YEAR IS A SSAILED ON THE FOLLOWING GROUNDS : 1. THAT THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ACT ION OF THE ASSESSING OFFICER WITH REGARD TO REOPENING OF THE CASE U/S 14 8 AND ALSO ON MERITS. 2. THAT THE LD. CIT(A) HAS ERRED IN HOLDING THE PROCE EDINGS U/S 148 AS VALID EVEN THOUGH THERE WERE NO REASONS TO BELIEVE THAT THE INCOME OF THE ASSESSEE AS ESCAPED ASSESSMENT UNDER SUCH SECTI ON, TO THE TUNE OF RS. 24 LACS AND FURTHER BELIEF HAS BEEN FORMED ON THE BASI S OF FACTUALLY WRONG REASONS AND THUS THE ASSESSMENT DESERVES TO B E QUASHED. ITA 153/CHD/2020 A.Y. 2011-12 PAGE 2 OF 6 3. THAT THE LD. C1T(A) HAS ERRED IN HOLDING THE PRO CEEDINGS U/S 148 AS VALID EVEN THOUGH THE APPROVAL FOR INITIATING PROCE EDINGS UNDER SECTION 147 GIVEN BY THE POT/JOT- LUDHIANA HAS BEEN GIVEN IN MECHANICAL MANNER WITHOUT APPLICATION OF MIND. 2. THE ASSESSEE HAS ALSO MOVED AN APPLICATION FOR R AISING ADDITIONAL GROUND IN ORDER TO CHALLENGE THE ASSUMPT ION OF JURISDICTION BY THE AO ON THE GROUNDS OF NON APPLIC ATION OF MIND. REFERRING TO THE FACTS OF THE CASE, IT WAS HIS SUBM ISSION THAT ADDITION OF RS. 24 LACS WAS MADE VIDE ORDER U/S 144 OF THE ACT BY THE AO INVOKING SECTION 69A. THE CIT(A) CONSIDERIN G THE FACTS AND THE REMAND REPORT OF THE AO AGREED THAT THE AMO UNT OF RS. 12 LACS HAD BEEN ADDED TWICE BY MISTAKE AND THUS, G RANTED PART RELIEF, HOWEVER, ADDITION OF RS. 12 LACS WAS SUSTAI NED. THE REPEATED EXPLANATION ADVANCED ON BEHALF OF THE ASSE SSEE BEFORE THE CIT(A) WHICH WAS CONFRONTED BY WAY OF REMAND BA CK TO THE AO AND RELIED UPON IN THE REPLY TO THE REMAND REPOR T AGAIN BY THE ASSESSEE, HOWEVER, WAS NOT ACCEPTED. 3. AGGRIEVED THE ASSESSEE IS IN APPEAL BEFORE THE T RIBUNAL. 4. BOTH THE PARTIES HAVE BEEN HEARD. 5. A PERUSAL OF THE SUBMISSIONS MADE ON BEHALF OF T HE ASSESSEE AS EXTRACTED IN PAGE 4 OF THE IMPUGNED ORDER ARE EX TRACTED HEREUNDER FOR READY REFERENCE : THE ASSESSEE HAS MADE TIME DEPOSITS OF ONLY RS. 12, 00,000/- ON 29-11-2010 OUT OF FUNDS TAKEN AS A LOAN FROM SH. RAJESH AGGARW AL FOR THE PURPOSE OF SHOWING THE SUFFICIENT FUNDS IN HIS ACCOUNT FOR HIS VISA APPLICATION WITH ITA 153/CHD/2020 A.Y. 2011-12 PAGE 3 OF 6 U.S.A EMBASSY. THE ASSESSEE AVAILED OVERDRAFT LIMIT AGAINST THE ABOVE SAID FDR ON THE SAME DATE I.E. 29-11-2010 AND THE UNSECU RED LOAN FROM SH. RAJESH AGGARWAL WAS REPAID IMMEDIATELY ON 29-11-201 0 5.1. AS OBSERVED, THE CIT(A) CONFRONTED THE SAME TO THE AO AND SOUGHT A REMAND REPORT FROM HIM. THE AOS OBJECTIO NS AS CONVEYED THROUGH THE REMAND REPORT IS EXTRACTED AT PAGE 6 PARA 7.1 WHICH READS AS UNDER: 7.1IN THE REPLY DATED 21.08.2019 BY THE ASSESSEE , HE HAS SUBMITTED A COPY OF BANK STATEMENT OF ACCOUNT KO.652710310000162 OF BANK OF INDIA IN WHICH THE ASSESSE HAS RECEIVED ON TRANSFER A SUM OFRS,12 LAKH S ON 29.11.2010. THE ASSESSEE MADE FDR OF THIS AMOUNT ON THE SAME DATE FROM THE S AME BANK. HE TOOK A LOAN OF 10,80,000/- AGAINST THIS FDR AND RETURNED IT TO SH. RAJESH AGGARWAL FROM WHOM HE HAD TAKEN LOAN OF RS.12 LAKHS. THE ASSESSEE HAS NEITHER SUBMITTED PAN NOR SUBMITTED COPY OF BANK STATEMENT OF SH. RAJESH AGGA RWAL FOR VERIFICATION (EMPHASIS SUPPLIED) 5.2 THE ASSESSEE'S OBJECTIONS TO THE REMAND REPORT EXTRACTED IN PARA 7.3 AT PAGES 6 TO 7 ARE EXTRACTED HEREUNDER FOR READY REFERENCE : 7.3 IN RESPONSE TO THE REMAND REPORT OF THE A.O. TH E LD. COUNSEL OF THE APPELLANT HAS FILED REJOINDER WHICH ARE AS UNDER:- THE ASSESSEE HAVE RECEIVED THE REMAND REPORT DATED 23.09.2019 ON 11.11.2019, WHEREIN THE ASSESSING OFFICE HAS CLEARL Y ADMITTED THAT ENTRY OF RS. 12,00,000/- HAS BEEN TAKEN TWICE, RESULTING TO AN ADDITION OF RS. 24,00,000/- TO THE INCOME OF ASSESSEE DURING THE YE AR UNDER CONSIDERATION. THE ASSESSEE HAS MENTIONED IN HIS REPLY DATED 21.08 .2019 THAT AMOUNT OF RS. 12,00,000/- WAS TAKEN FROM MR. RAJESH AGGARW AL THROUGH HIS BANK ACCOUNT MAINTAINED WITH BANK OF INDIA (ACCOUNT STATEMENT OF SAVING BANK ACCOUNT NO. 652710310000162 HAS ALREADY BEEN FILED IN EARLIER REPLIES). T IS EVIDENT AND CLEAR THAT NO CA SH HAS BEEN DEPOSITED AND ALL TRANSACTIONS HAVE BEEN MADE THROUGH BANKING CHANNELS. THE ASSESSEE MADE FDR WITH THE LOAN AMOUNT ON THE SAME DATE FROM THE SAME BANK. THEREAFTER HE TOOK LOAN OF RS. 10,80,000 /- AGAINST THE FDR AND REPAID IT TO MR. RAJESH AGGARWAL. THE SOLE MOTIVE OF TAKING THE LOAN WAS THAT, THE AS SESSEE APPLIED FOR AN AMERICAN VISA AND FOR SHOWING SUFFICIENT FUNDS TO T HE EMBASSY, THE ITA 153/CHD/2020 A.Y. 2011-12 PAGE 4 OF 6 ASSESSEE TOOK AN UNSECURED LOAN FROM MR. RAJESH AGG ARWAL. THE AMOUNT WAS CREDITED THROUGH BANK TRANSFER FROM ACCOUNT MAI NTAINED BY MR. RAJESH AGGARWAL. THE ASSESSEE HAS ALREADY SUBMITTED DETAILS OF OFFIC E ADDRESS AND RESIDENTIAL ADDRESS OF SH. RAJESH AGGARWAL. THE PRO FESSION OF SH. RAJESH AGGARWAL IS CHARTERED ACCOUNTANT. IT WAS ALSO MENTI ONED IN EARLIER REPLIES THAT ASSESSEE IS UNABLE TO GENERATE THIRD P ARTY INFORMATION WITH RESPECT TO PAN AND BANK STATEMENT OF SH. RAJESH AGG ARWAL DUE TO PRIVACY AND INTEGRITY ISSUES IN BANK. THE ASSESSEE HAS ALREADY REQUESTED THE ASSESSING OFFICER TO CALL FOR INFORMATION RELAT ING TO SH. RAJESH AGGARWAL ON THEIR OWN AS REQUISITE DETAILS RELATING TO ADDRESS OF SH. RAJESH AGGARWAL WERE SHARED IN REPLY FILED WITH THE ASSESSING OFFICER. THE ASSESSING OFFICER HAS NOT ACTED JUDICIOUSLY AS THE ASSESSING OFFICER HAS ALL POWERS UNDER THE ACT TO CALL FOR THE STATEM ENT OF SH. RAJESH AGAGRWAL FROM BANK AS WELL AS FROM THE CLIENT AND K NOW THE TRUE FACTS OF THE CASE. THIS WAY THE ASSESSING OFFICER COULD EASI LY SEE THAT NO ADDITION IS CALLED FOR. THE ASSESSEE HAS SOMEHOW BEEN ABLE TO LOCATE PAN OF SH. RAJESH AGGARWAL WHICH IS ABAPA1510E AND MANAGED TO GENERAT E SCREENSHOT OF THE TRANSACTIONS OF LENDING LOAN OF RS. 12,00,000/- TO THE ASSESSEE. IT IS CLEAR FROM THE STATEMENT THAT SH. RAJESH AGGARWAL H AS TRANSFERRED RS. 12,00,000/- TO THE ASSESSEE ON 29.11.2010 AND RS. 1 0,80,000/- WERE TRANSFER TO SH. RAJESH AGGARWAL ON THE SAME DATE I. E. 29.11.2010. 5.3. IN THESE CIRCUMSTANCES, PART RELIEF WAS GRANTE D BY THE LD. CIT(A) HOLDING AS UNDER : 8.3 AFTER CAREFUL CONSIDERATION OF ALL THE FACTS AND MATERIAL AVAILAB LE ON RECORD IN MY CONSIDERED VIEW THE ASSESSEE DESERVES TO GET RELIEF OF DUPLICATE ENTRIES OF RS. 12,00,000/- AS PER INDIVIDUAL TRANSACTION STATEMENT WITH THE DEPARTMENT , WHEREIN THE AMOUNT OF RS. 12,00,000 /- , HAS BEEN TAKEN TWICE RESULTING INTO ADDITION OF RS . 24,00,000/- INSTEAD OF RS. 12,00,000/- . HOWEVER THE ASSESSEE DOES NOT DESERVE ANY RELIEF ON ACCOUNT OF HIS CLAIM THAT THE ASSESSEE HAS RECEIVED UNSECURED LOAN FROM SHRI RAJESH AGGARWAL ON 29/11/2010 .AGAINST WHICH THE AS SESSEE HAS MADE FDR AND HAS TAKEN A LOAN OF RS. 10,80,000/- AGAINST THIS AMOUNT AND RETURNED IT TO SHRI RAJESH AGGARWAL VERY SPEEDI LY ON SAME DAY ITSELF ON 29/11/2010, FROM WHOM HE HAD TAKEN LOAN OF RS. 1 2,00,000/- . THE ENTIRE TRANSACTION AND CLAIM OF APPELLANT IS DOUBTF UL, AS IT IS CLAIM OF APPELLANT ONLY , OF HAVING RECEIVED AMOUNT OF RS. 1 2,00,000/- FROM SHRI RAJESH AGGARWAL C.A., FROM A TRANSFER ENTRY OF A BA NK , AND RETURNING THE AMOUNT OF RS. 10,80,000/- , ON THE SAME DAY IT SELF , BY TRANSFER. THE ASSESSEE HAS COMPLETELY FAILED TO PROVE THE IDENTIT Y GENUINENESS AND CREDITWORTHINESS OF SHRI RAJESH AGGARWAL AND DISCHA RGE HIS ONUS . ITA 153/CHD/2020 A.Y. 2011-12 PAGE 5 OF 6 ACCORDINGLY THE DISALLOWANCE OF RS. 12,00,000/- IS UPHELD. WITH THE RESULT THESE GROUNDS OF APPEAL STANDS PARTLY ALLOWED. 5.4. THE LD. AR SUBMITTED THAT THERE WERE SOME ISSU ES WITH THE C.A. SHRI RAJESH AGGARWAL ON ACCOUNT OF WHICH THE R ELATIONS DETERIORATED AND HE CONSEQUENTLY FAILED TO PROVIDE THE BANK ACCOUNT DETAILS AND ALSO DID NOT CONFIRM THE TRANSA CTIONS AND THE TAX AUTHORITIES INSISTED THAT THE ASSESSEE GIVE THE NECESSARY INFORMATION WHICH WAS BEYOND THE ASSESSEE'S CAPACIT Y. 5.5 THE LD. SR.DR WAS REQUIRED TO ADDRESS AS TO WHY IN THE FACE OF THE REPEATED ARGUMENTS THAT THE AMOUNT OF RS. 12 LACS WAS BY WAY OF A TRANSFER ENTRY AND AGAIN WAS REPAID BACK T O THE NAMED PERSON SHRI RAJESH AGGARWAL, C.A. VIDE CHEQUE, WHAT STOPPED THE DEPARTMENT TO LOOK INTO THE TRANSFER ENTRIES WITHIN THE BANK IN THE FACE OF THE ASSESSEES INABILITY TO REQUIRE HIS ERSTWHILE C.A. TO CO-OPERATE. IF THE INFORMATION WAS DEEMED TO BE SO NECESSARY TO VERIFY THAT THE SPECIFIC AMOUNT WAS TRANSFERRED FRO M SHRI RAJESH AGGARWAL AND RETURNED BACK AGAIN TO SHRI RAJESH AGG ARWAL IT COULD HAVE EASILY BEEN DONE. A PERUSAL OF THE ABOV E EXTRACT SHOWS THAT INFORMATION INFACT HAS NOT BEEN DOUBTED. THE DEPARTMENT HAS INSISTED ON SHRI R.AGGARWALS PAN WH ICH DETAILS AGAIN COULD HAVE BEEN WITH THE BANK. THE ASSESSEE HAS BEEN CRYING HOARSE ALL ALONG THE FACTUAL POSITION WHICH REMAINS UNREBUTTED ON RECORD. THE INSISTENCE THAT THE ASSE SSEE GIVEN THE PAN DETAILS AND THE BANK ACCOUNT DETAILS, IN THESE ITA 153/CHD/2020 A.Y. 2011-12 PAGE 6 OF 6 CIRCUMSTANCES, IS CASTING AN IMPOSSIBLE BURDEN ON T HE ASSESSEE WHO REPEATEDLY ADMITS FAILED COMMUNICATION LINKS WI TH THE C.A. AFTER THE REPAYMENT OF THE LOAN. THE FACT THAT THE AMOUNT WAS REPAID ON THE VERY SAME DATE AGAIN REMAINS UNREBUTT ED. THE REASON FOR OBTAINING THE LOAN ALSO STANDS UNREBUTTE D ON RECORD. IN THESE PECULIAR FACTS AND CIRCUMSTANCES, I FIND N O VALID REASON TO SUSTAIN THE ADDITION. I FIND ON FACTS THAT THE E XPLANATION OFFERED BY THE ASSESSEE IS VALID AND JUSTIFIABLE ON FACTS. THE ADDITION IS DIRECTED TO BE DELETED. SAID ORDER WAS PRONOUNCED AT THE TIME OF VIRTUAL HEARING ITSELF IN THE PRESENCE OF THE PARTIES VIA WEBEX. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED ON 26 TH MARCH,2021. SD/- ( !' ) (DIVA SINGH) # / JUDICIAL MEMBER ' ( / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. / CIT 4. ( )/ THE CIT(A) 5. , , / DR, ITAT, CHANDIGARH 6. / GUARD FILE / BY ORDER, / ASSISTANT REGISTRAR