Amarjeet Beeton HUF, Dhuri V. ACIT, C-4, Ludhiana

ITA 1547/CHANDI/2017

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 4924 (ITAT-CHANDIGARH)
• Duration Of Justice: 6 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-06-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2014-2015
• Appeal Filed On: 09-11-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MEENAKSHI BOHRA
• Section: 131; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH SMD, CHANDIGARH BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER AND DR. B.R.R. KUMAR, ACCOUNTANT MEMBER ITA NO. 1545 /CHD/2017 (ASSESSMENT YEARS: 2009-10) AMARJEET BEETON(HUF) VS. THE ITO, W-IV(3) PROP. M/S SHIVA UDYOG, MALERKOTLA HOUSE NO. 210, WARD NO. 10-B SHIVPURI MOHALLA, DHURI PAN: AAFHA3569R ITA NO. 1547 /CHD/2017 (ASSESSMENT YEARS: 2014-15) AMARJEET BEETON(HUF) VS. THE ASSTT. CIT PROP. M/S SHIVA UDYOG, CIRCLE-4 HOUSE NO. 210, WARD NO. 10-B LUDHIANA SHIVPURI MOHALLA, DHURI (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI. SUDHIR SEHGAL DEPARTMENT BY : SMT. MEENAKSHI BOHRA DATE OF HEARING : 12/04/2018 DATE OF PRONOUNCEMENT : 04/06/2018 O R D E R PER DR.B.R.R.KUMAR, A.M . : BOTH THE ABOVE APPEALS HAVE BEEN FILED BY THE ASSES SEE AGAINST THE ORDER OF THE LD. CIT(A)-2. 2. FIRSTLY WE SHALL DEAL WITH ITA NO. 1545/CHD/2017 FOR A.Y. 2009-10 WHEREIN ASSESSEE HAS RAISED THE FOLLOWING GROUNDS: 1. THAT THE WORTHY COMMISSIONER OF INCOME TAX (APPE ALS) HAS ERRED IN DISMISSING THE APPEAL FILED BY THE APPELLANT AND, T HUS, CONFIRMING ADDITION OF RS. 5,20,000/- ON ACCOUNT OF UNSECURED LOANS AND RS. 29,750/- ON ACCOUNT OF DISALLOWANCE OF INTEREST THE REON MADE BY THE ASSESSING OFFICER U/S 68 OF THE INCOME TAX ACT. 2. THAT THE LD. CIT (A) HAS ERRED IN NOT CONSIDERIN G THAT AS PER DIRECTIONS OF ITAT, SMT. KANTA DEVI W/O SH. ASHOK KUMAR APPEARED BEFORE THE LD. ASSESSING OFFICER AND HER STATEMENT WAS RECORDED. SHE HAD CON FIRMED TO HAVE ADVANCED THE AMOUNT TO AMARJEET BEETON HUF, WHILE REPLYING T O QUESTION NO. 33 OF THE 2 STATEMENT AND FURTHER SHE HAS ALSO EXPLAINED THE SO URCE OF ADVANCE MADE TO THE ASSESSEE BY EXPLAINING THAT SHE WAS DOING THE T RADING OF COMMODITY BUSINESS WHILE REPLYING TO QUESTION NO.24 AND SHE HAS FURTHE R CONFIRMED THAT SHE HAD EARNED RS. 1,50,000/- FROM THE SPECULATIVE BUSINESS OF TRADING IN COMMODITIES WHILE REPLYING TO QUESTION NO.23 AND, AS SUCH, THE CREDIT WORTHINESS OF SMT. KANTA DEVI WAS PROVED. 3. THAT THE LD. CIT (A) HAS ERRED IN NOT CONSIDERIN G THAT THE ASSESSEE COULD NOT PRODUCE SH. RAM LAI AND SH. RAM RATTAN AND THEI R STATEMENTS COULD NOT BE RECORDED AS BOTH OF THEM HAVE ALREADY EXPIRED. 4. THAT THE LD. CIT(A) HAS ERRED IN NOT CONSIDERING THAT IN RESPONSE TO SUMMONS ISSUED U/S 131 TO SH. RAM LAI AND SH. RAM R ATTAN THE REPLY WAS FILED THROUGH THEIR LEGAL HEIRS (SONS) STATING THAT THEIR FATHER HAD EXPIRED AND IN SUPPORT THEREOF, DEATH CERTIFICATES OF THEIR FATHERS ALONGW ITH THEIR ITRS, BANK STATEMENTS ETC. EVIDENCING THEIR CREDIT WORTHINESS WAS FILED A ND SAME WAS NOT QUESTIONED BY THE LD. ASSESSING OFFICER AND NOTHING MORE WAS DEMA NDED AND NO FURTHER CLARIFICATION WAS CALLED FOR. 5. THAT THE ADDITION AS ABOVE HAS BEEN UPHELD BY TH E ASSESSING OFFICER AGAINST THE FACTS AND CIRCUMSTANCES OF THE CASE AND DETAILED REPLY FILED BY THE ASSESSEE DURING THE COURSE OF HEARING VIDE LETTER, DATED 06.09.2017 AS INCORPORATED AT PAGES 4 TO 10 OF HIS ORDER MENTIONI NG VARIOUS CASE LAWS, HAS NOT BEEN CONSIDERED BY HIM PROPERLY. 6. NOTWITHSTANDING THE ABOVE SAID GROUND OF APPEAL, THOUGH, THE SOURCE OF SOURCE HAD ALREADY BEEN EXPLAINED WITH ALL THE CRED ITORS BUT STILL, IT IS SUBMITTED THAT THE LD. CIT (A) HAS FAILED TO CONSIDER THE FAC T THAT THE SOURCE OF SOURCE CANNOT BE ASKED FOR AS PER BINDING JUDGEMENT OF HON 'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF SH.CHUNI LAI AS REPORTED IN 21 1 ITR 11 (STATUTE), AND WHERE THE SLP OF THE DEPARTMENT HAS BEEN DISMISSED. 3. THE ASSESSEE HAS RECEIVED RS. 5,20,000/- FROM TH REE PERSONS NAMELY SMT. KANTA DEVI OF RS. 1,50,000/- , SHRI. RAM RATAN OF R S. 2,65,000/-, AND SHRI. RAM LAL OF RS. 1,05,000/-. 4. THE LD. CIT(A) CONFIRMED THE ADDITION ON THE GRO UNDS THAT SHRI. RAM LAL AND SHRI. RAM RATAN COULD NOT BE PRODUCED AS THEY W ERE EXPIRED AND THEY WERE CLOSED TO THE KARTA OF THE HUF. LD. CIT(A) DOU BTED THAT SMT. KANTA DEVI WHO IS SAID TO HAVE EARNED INCOME FROM COMMODITY TR ADING COULD NOT BE SO AS SHE HAS NO KNOWLEDGE OF COMMODITY TRADING. 5. BEFORE US, LD. AR SUBMITTED THAT ALL THE REQUIRE MENTS LIKE IDENTITY, GENUINITY AND CREDITWORTHINESS OF THE LOAN PARTIES HAVE BEEN PROVED AND THE PRIMARY ONUS HAS BEEN DULY DISCHARGED BY THE ASSESSEE. HE F URTHER ARGUED THAT SMT. KANTA DEVI AND SHRI. RAM LAL HAVE RECEIVED PROFITS FROM COMMODITY TRADING WHICH CAN BE PROVED BY THE FACT THAT THE STATEMENT OF SHRI. ANKIT GARG, 3 PROPRIETOR M/S SATYAM COMMODITIES WAS RECORDED BY T HE DEPARTMENT ON 05/12/2011 AND 14/12/2011 THE COPIES OF THE ASSESSM ENT ORDER REITERATING THE FACT OF RECORDING THE STATEMENT HAS BEEN FILED BEFO RE US. 6. THE LD. DR ALSO ARGUED THAT SHRI. RAM RATAN HAS RECEIVED BACK AN AMOUNT OF RS. 1,70,000/- FROM M/S S.P.K. FIBERS AND THE SAME CAN BE VERIFIED FROM THE BANK STATEMENT WHICH IS AN UNDISPUTABLE FA CT. 7. WE HAVE GONE THROUGH THE FACTS OF THE CASE. REGA RDING SMT. KANTA DEVI IT CAN BE FOUND THAT THE ASSESSEE HAS DISCHARGED ITS P RIMARY ONUS AND NO TANGIBLE CONTRA MATERIAL WAS BROUGHT ON RECORD BY THE REVENU E. SIMILARLY THE ASSESSEE HAS DISCHARGED THE PRIMARY ONUS PERTAINING TO THE L OANS BEFORE THE REVENUE. THE OWNER OF M/S SATYAM COMMODITIES HAS CONFIRMED T HE FACT OF COMMODITY TRADING AND PROFIT EARNING BY SMT. KANTA DEVI AND S HRI. RAM LAL. THE FACT OF RECEIPT OF THE LOAN BACK FROM S.P.K. FIBERS IS ON R ECORD. HENCE KEEPING IN VIEW THE ENTIRE FACTS, WE HEREBY DELETE THE ADDITION MAD E BY THE ASSESSING OFFICER ON ACCOUNT OF LOANS AND THE INTEREST. 8. NOW WE SHALL DEAL WITH ITA NO. 1547/CHD/2017 FOR A.Y. 2014-15 WHEREIN ASSESSEE HAS RAISED THE FOLLOWING GROUNDS: 1. THAT THE WORTHY CIT (A) HAS ERRED IN DISMISSING THE APPEAL AND, THUS, CONFIRMING THE ADDITION OF RS. 180000/; MADE BY T HE ASSESSING OFFICER U/S 68 ON ACCOUNT OF UNSECURED LOANS RECEIVED BY THE ASSESSEE FROM MANOJ KUMAR HUF, SAMRALA. 2. THAT THE WORTHY CIT (A) HAS ERRED IN NOT CONSIDERIN G THAT ASSESSEE HAS DULY DISCHARGED HIS ONUS BY PROVING THE IDENTITY, CREDIT WORTHINESS AND GENUINENESS OF TRANSACTIONS BY FILING THE RELEVANT DOCUMENTS ALONG WITH ITRS OF SH. MANOJ KUMAR HUF, THROUGH HIS FATHER AS HE HIMSELF WAS OUT OF CO UNTRY. 3. NOTWITHSTANDING THE ABOVE SAID GROUND OF APPEAL, TH OUGH, THE SOURCE OF SOURCE HAD ALREADY BEEN EXPLAINED WITH ALL THE CRED ITORS BUT STILL, IT IS SUBMITTED THAT THE LD. CIT (A) HAS FAILED TO CONSIDER THE FAC T THAT THE SOURCE OF SOURCE CANNOT BE ASKED FOR AS PER BINDING JUDGEMENT OF HON 'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF SH.CHUNI LAI AS REPORTED IN 21 1 ITR 11 (STATUTE), AND WHERE THE SLP OF THE DEPARTMENT HAS BEEN DISMISSED. 4. THAT THE WORTHY CIT(A) HAS ERRED IN NOT CONSIDERING THAT SH. MANOJ KUMAR COULD NOT APPEAR BEFORE THE ASSESSING OFFICER AS HE WAS OUT OF COUNTRY AT THE RELEVANT TIME AND THE FATHER OF SH. MANOJ KUMAR HAS FILED THE RELEVANT DOCUMENTS AS MENTIONED IN PARA 2 ABOVE. 4 5. THAT THE WORTHY CIT (A) 'HAS ERRED IN NOT CONSIDERI NG THAT ASSESSING OFFICER HAS MADE IMPUGNED ADDITION AS THE ASSESSEE IN THE O PINION OF THE ASSESSING OFFICER COULD NOT PROVE THE SOURCE OF CASH CREDIT A S APPEARING IN HIS BOOKS OF ACCOUNT TO THE EXTENT OF RS. 1,80,000/- IN THE NAME OF MANOJ KUMAR HUF, WITHOUT MENTIONING OR GIVING BACK GROUNDS OF OPINION AND IG NORING THE RELEVANT DOCUMENTS FILED AS PER PARA 2 ABOVE. 6. THAT THE ADDITION OF RS. 1,80,000/- AS ABOVE HAS BE EN UPHELD AGAINST THE FACTS AND CIRCUMSTANCES OF THE CASE AND DETAILED SU BMISSIONS FILED DURING THE COURSE OF HEARING ALONGWITH VARIOUS CASE LAWS VIDE LETTER, DATED 06.09./2017 AT PAGE 3 TO 8 OF THE ORDER. 9. THE ASSESSEE IS HUF ENGAGED IN THE BUSINESS OF T RADING OF COTTON WASTE UNDER THE NAME AND STYLE OF ITS PROPRIETARY CONCERN NAMELY M/S SHIVA UDYOG. 10. DURING THE YEAR THE ASSESSEE HAS RECEIVED AN AM OUNT OF RS. 450000/- FROM ONE MANOJ KUMAR (HUF). THE ASSESSING OFFICER HAS M ADE AN ADDITION OF RS. 180000/- OUT OF THE AMOUNT OF RS. 4,50,000/- IN THE HANDS OF THE ASSESSEE AS CASH DEPOSITS OF RS. 1,80,000/- HAS BEEN FOUND IN THE B ANK ACCOUNT OF MANOJ KUMAR(HUF) FOUR DAYS PRIOR TO LENDING OF THE LOAN. 11. THE LD. CIT(A) UPHELD THE ADDITION ON THE GROUN D THAT THE SOURCE OF CASH DEPOSIT IN THE BANK ACCOUNTS OF THE LENDER COULD NO T BE EXPLAINED WITH THE HELP OF THE INCOME DISCLOSED IN HIS RETURN OF INCOME BY MANOJ KUMAR (HUF). THE LD. CIT(A) HELD THAT THERE CAN BE MULTIPLE BANK ACCOUNT S MAINTAINED BY MANOJ KUMAR (HUF) AND ALSO SINCE MANOJ KUMAR (HUF) IS NOT EXAMINED BY THE ASSESSING OFFICER AND HENCE THE CASH DEPOSITS REMAINED UNPROV ED. 12. BEFORE US THE LD. AR SUBMITTED THAT THE TOTAL L OAN RECEIVED FROM MANOJ KUMAR (HUF) WAS RS. 4,50,000/-. LD. AR PRODUCED COP Y OF THE ACCOUNT, CONFIRMATION, COPY OF THE RETURN OF INCOME, CAPITAL ACCOUNT BALANCE SHEET, COPY OF THE BANK STATEMENT. AND ALSO SUBMITTED THAT WHEN SUMMONS UNDER SECTION 131 OF THE INCOME TAX ACT,1961 WERE ISSUED SHRI. MANOJ KUMAR, THE KARTA WAS OUT OF INDIA AND COULD NOT ATTEND THE ASSESSMEN T PROCEEDINGS. IT WAS ARGUED THAT THE LENDER HAS ONLY ONE BANK ACCOUNT AN D THE OBSERVATION OF LD. CIT(A) THAT THE ASSESSEE MIGHT BE HAVING MULTIPLE B ANK ACCOUNTS IS ONLY THE GUESS WORK OF LD. CIT(A) WITHOUT BRINGING ANY COGEN T MATERIAL ON RECORD. HE 5 FURTHER ARGUED THAT IF AT ALL THE AMOUNT IS NOT FOU ND TO BE EXPLAINED SATISFACTORY, THE ADDITION HAS TO BE MADE IN THE HANDS OF MANOJ K UMAR (HUF) ONLY BUT NOT IN THE CASE OF THE ASSESSEE. 13. WE HAVE HEARD BOTH THE PARTIES AND GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. THE ACTION OF THE ASSESSING OFFICER CANN OT BE ACCEPTED AS THE AO HAS ACCEPTED THE LOAN OF RS. 2,70,000/- AS GENUINE AND RS. 1,80,000/- AS INGENUINE WHEN IDENTITY GENUINENESS AND CREDITWORTH INESS OF THE LOANEE STANDS DISCHARGED. THE ASSESSEE HAS BEEN PAYING INTEREST R EGULARLY TO THE LOAN PARTY AND JUST BECAUSE CASH DEPOSITS WERE MADE PRIOR TO L ENDING CANNOT BE THE SOLE REASON TO MAKE ADDITION UNDER SECTION 68 WHEN ALL O THER ELEMENTS PROVING THE GENUINENESS OF THE LOAN ARE AVAILABLE ON RECORD. SI MILARLY THE LD. CIT(A)S OBSERVATION THAT THE LOANEE COULD HAVE HAD MORE THA N ONE BANK ACCOUNT WHILE CONFIRMING THE ADDITION CANNOT BE ACCEPTED. H ENCE, KEEPING IN VIEW THE OVERALL FACTS OF THE CASE THE ADDITION MADE BY THE ASSESSING OFFICER IS HEREBY DELETED. 14. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (SANJAY GARG) (DR. B.R.R. KUMAR) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 04/06/2018 AG COPY TO: 1.THE APPELLANT, 2. THE RESPONDENT, 3. THE CIT(A), 4. THE CIT, 5. THE DR