ACIT, Agra V. Smt. Usha Agarwal, Agra

ITA 156/AGR/2009

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 0395 (ITAT-AGRA)
• Duration Of Justice: 1 year(s) 5 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-09-2010
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 24-08-2010
• Assessment Year: 2001-2002
• Appeal Filed On: 17-04-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: M M LAL
• Keywords: Onus to prove
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AGRA BENCH, AGRA BEFORE SHRI R.K. GUPTA, JUDICIAL MEMBER AND SHRI P.K. BANSAL, ACCOUNTANT MEMBER ITA NO.156/AGR/2009 ASST. YEAR: 2001-02 ASSTT. COMMISSIONER OF INCOME-TAX, VS. SMT. USHA AGARWAL, CIRCLE-1, AGRA. PROP. M/S SACHIN ICE & COLD ST ORAGE NUNHAI, AGRA. (PAN : AAKPA 0527 A). (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI PANKAJ GARGH, ADVOCATE RESPONDENT BY : SHRI M.M. LAL, D.R. ORDER PER P.K. BANSAL, A.M.: THIS APPEAL HAS BEEN FILED BY THE REVENUE AGAINST T HE ORDER OF THE CIT(A) DATED 11.02.2009 BY WHICH THE CIT(A) HAS DELETED THE ADDI TION MADE UNDER SECTION 68 OF THE INCOME- TAX ACT, 1961 (THE ACT HEREINAFTER) AND THE INTER EST CLAIMED BY THE ASSESSEE THEREON IN RESPECT OF LOANS TAKEN FROM KRISHNA TRADERS OF RS.5,00,000/ -, NITIN & CO. OF RS.2,00,000/- AND NAVEEN KUMAR AGARWAL & CO. AMOUNTING TO RS.3,00,000/-. 2. THE REVENUE BEING AGGRIEVED HAS COME IN APPEAL B EFORE US. THE A.O. NOTED THAT THE ASSESSEE HAS TAKEN A LOAN OF RS.10,00,000/- ON 18.1 2.2000 I.E. FROM KRISHNA TRADERS RS.5,00,000/-, NITIN & CO. RS.2,00,000/- AND NAVEEN KUMAR AGARWAL & CO. RS.3,00,000/-AND 2 HAS ALSO CLAIMED DEDUCTION FOR THE INTEREST AMOUNTI NG TO RS.33,862/-. THE A.O. DID NOT ACCEPT THE LOAN BY DISCUSSING THAT GANGARAM GROUP WAS ENGA GED IN PROVIDING LOAN IN LIEU OF CASH AND WHEN THE SEARCH HAS TAKEN PLACE THEY SURRENDERED TH E INCOME. THE ASSESSEE SUBMITTED THE FOLLOWING DOCUMENTS BEFORE THE CIT(A) :- I) COPY OF ACCOUNT OF THE DEPOSITORS FOR THE A.Y. 2 001-02 SHOWING ADVANCE OF THE IMPUGNED AMOUNTS TO THE APPELLANT. II) COPY OF ACCOUNT OF THE DEPOSITORS FOR A.Y. 2002 -03 SHOWING REPAYMENT OF THE IMPUGNED LOANS. III) LETTERS FROM THE THREE DEPOSITORS GIVING THE S OURCES OF THE AMOUNTS CREDITED IN THEIR BANK ACCOUNTS BEFORE ISSUE OF THE CHEQUES FOR THE IMPUGN ED LOANS TO THE APPELLANT, WHICH HAVE ALSO BEEN ELABORATED IN THE ASSESSMENT ORDER BY THE A.O. IV) EXTRACTS OF BANK STATEMENTS OF THE DEPOSITORS R EFLECTING THE RELEVANT ENTRIES. V) COPY OF INTIMATION U/S.143(1) FOR A.Y. 2001-02 O F THE DEPOSITORS WHEREIN THE IMPUGNED INTEREST ON THE IMPUGNED CREDITS HAVE BEEN OFFERED FOR TAX. VI) APPELLANTS BANK STATEMENTS REFLECTING DEBITS O N ACCOUNT OF THE REPAYMENT OF THE IMPUGNED LOANS. 3. THE CIT(A) DELETED THE ADDITION IN EACH OF THE C ASE FOLLOWING THE DECISION OF AGRA BENCH OF I.T.A.T. IN THE CASE OF I.T.O. 1(1) , AGRA VS. S RI ADITYA AGARWAL IN ITA NO.262/AGR/2006 BY HOLDING AS UNDER :- I HAVE CONSIDERED THE FACTS AND CIRCUMSTANCES OF T HE CASE AND THE ARGUMENTS OF THE LD. AR OF THE APPELLANT. IN THE O RDER DATED 15.2.07 OF THE HONBLE ITAT, AGRA BENCH, AGRA IN ITO 1(1), AGRA VS . SRI ADITYA AGARWAL ITA NO.262/AGR/2006, AY 1998-99, IT HAS BEEN HELD AS UN DER:- 3 WE HAVE CAREFULLY CONSIDERED THE ENTIRE MATERIAL O N RECORD AND CONCUR WITH THE FINDING OF THE LEARNED FIRST APPELL ATE AUTHORITY. IN OUR OPINION, THE AO WAS NOT JUSTIFIED IN HOLDING THE TR ANSACTION AS BOGUS MERELY ON THE BASIS OF GENERAL OBSERVATIONS. IT MA Y BE TRUE THAT THE TRANSACTIONS OF LENDER PARTY MIGHT HAVE BEEN FOUND TO BE FALSE BUT FOR MAKING ADDITION IN THE HANDS OF THE ASSESSEE, THE N ATURE OF PARTICULAR TRANSACTION IN DISPUTE IS TO BE EXAMINED. IT HAS N OT BEEN ESTABLISHED THAT THE TRANSACTION OF RS.1,00,000/- RELATING TO LOAN G IVEN BY DEVI SAHAI VAINOD KUMAR WAS HELD TO BE BOGUS IN THEIR CASE. B EFORE THE CIT(A), IT WAS ALSO CLARIFIED THAT THE SAID LOAN WAS GIVEN BY THE SAID PARTY TO THE ASSESSEE OUT OF RS.1,71,000/- HAVING BEEN RECEIVED FROM M/S CR FOODS INDIA PVT. LTD THROUGH CHEQUE NO.320629 DATED 19.01 .1998. THUS, EVEN THE SOURCE OF THE SOURCE WAS EXPLAINED. IN ANY CAS E, THE ASSESSEE HAD DISCHARGED THE BURDEN TO PROVE THE IDENTITY OF THE CREDITOR, THE GENUINENESS OF THE TRANSACTION WHICH WAS CARRIED OUT THROUGH BA NKING CHANNEL AND THE ACCREDIT WORTHINESS OF THE CREDITOR. AFTER THE ASS ESSEE HAD DISCHARGED THE BURDEN. IT WAS FOR THE DEPARTMENT TO HAVE DISPROVE D THESE FACTS. THE AO DID NOT EXAMINE THE ASSESSEE NOR BROUGHT ANY MATERI AL ON RECORD TO PROVE SPECIFICALLY THAT THE LOAN TRANSACTION OF RS.1,00,0 00/- WAS FAKE OR BOGUS. THE AMOUNT OF LOAN WAS SUBSEQUENTLY REPAID AGAIN TH ROUGH BANKING CHANNEL. IN THE ABSENCE OF ANY MATERIAL TO THE CON TRARY, THE TRANSACTIONS CARRIED OUT IN REGULAR COURSE AND THROUGH BANKING C HANNEL HAVE TO BE ACCEPTED AS GENUINE. TO REPEAT, THE DEPARTMENT HAS NOT BEEN ABLE TO SHOW BY CONCRETE PROOF THAT THE TRANSACTION OF LOAN WAS NOT GENUINE. ON THE BASIS OF THE ABOVE, WE DO NOT FIND ANY SCOPE TO INT ERFERE WITH THE FINDINGS OF THE LEARNED CIT(A). THE GROUNDS RAISED BY THE R EVENUE ARE, THEREFORE, REJECTED. AS IN THE ABOVE CITED CASE, IN THE PRESENT CASE ALS O, THERE DO NOT APPEAR ANY CASH DEPOSITS IN THE CONCERNED BANK ACCOUNTS OF THE LENDERS PRIOR TO THE ADVANCE OF THE IMPUGNED LOANS TO THE APPELLANT. IT IS AN A DMITTED POSITION THAT THE DEPOSITS IN THE BANK ACCOUNTS OF THE CREDITORS, ARE BY ACCOU NT PAYEE CHEQUES. THE DEPOSITORS ARE ASSESSED TO TAX AND HAVE CONFIRMED T HE ADVANCES TO THE APPELLANT. MERE REFERENCE TO THE SEARCH IN THE CASE OF M/S GAN GA RAM AGRAWAL & COMPANY AND OTHER ENTITLES OF THE SAID GROUP AND THE FINDIN GS GIVEN BY THE AO IN THOSE CASES ARE OF NO HELP IN THE RESENT CASE. IT HAS N OT BEEN SHOWN THAT THE DEPOSITORS HAVE EVER ADMITTED THAT THEY WERE ENGAGED IN THE BU SINESS OF GIVING BOGUS ENTRIES OR THAT THEY HAD GIVEN BOGUS ENTRIES TO THE APPELLA NT. THIS BEING THE CASE UNLESS IT IS PROVED BY THE AO WITH SOME CONCRETE EVIDENCE THA T THE APPELLANTS TRANSACTIONS OF LOANS WITH THESE LENDERS OF THE GANGA RAM AGARWA L GROUP ARE NOT GENUINE, THE IMPUGNED DEPOSITS CANNOT BE BROUGHT TO TAX UNDE R SECTION 68 OF THE I.T. ACT, 1961. 4 UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE, THE ADDITIONS MADE BY THE A.O UNDER SECTION 68 AND CORRESPONDING DISALLOWANCE OF INTEREST IN RESPECT OF THESE CASH CREDITS, CANNOT BE SUSTAINED AND ACCORDI NGLY DELETED. 4. BEFORE US, THE LD. D.R. SUPPORTED THE ORDER OF T HE A.O. WHILE THE LD. A.R. RELIED ON THE ORDER OF THE CIT(A) AND CONTENDED THAT THE ASSESSEE HAS DULY DISCHARGED HIS ONUS. ALL THE DEPOSITORS ARE REGULAR ASSESSEES. THE LOAN HAS BEE N TAKEN THROUGH CHEQUE. RELEVANT ENTRIES AND AMOUNTS ARE DULY RECORDED IN THE BANK STATEMENT. T HE AMOUNT HAS BEEN REPAID THROUGH CHEQUE. ALL THE DEPOSITORS ARE ASSESSED TO TAX. THEY HAVE DULY CONFIRMED THEIR ADVANCES. THERE IS NO EVIDENCE THAT THE ASSESSEE HAS GIVEN THE CASH IN PL ACE OF CHEQUE. 5. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS AND GONE THROUGH THE ORDERS OF THE TAX AUTHORITIES BELOW. WE NOTED THAT THE ASSESSEE HAS RECEIVED LOANS FROM ALL THE THREE PARTIES THROUGH ACCOUNT PAYEE CHEQUES WHICH WERE SUBSEQUENT LY REPAID BY THEM THROUGH ACCOUNT PAYEE CHEQUES. THESE PARTIES ARE INCOME TAX ASSESSES AND HAVE DULY CONFIRMED ADVANCES BEING GIVEN TO THE ASSESSEE. THE ASSESSEE HAS PAID THE INTERES T WHICH WAS DULY SHOWN IN THEIR INCOME TAX RETURN. THE ASSESSEE HAS THUS PROVED THE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTION. ONCE THE ASSESSEE HAS SUBMITTED THE E VIDENCE, THE ONUS GETS SHIFTED ON THE REVENUE TO PROVE THAT THE TRANSACTIONS ENTERED ARE NOT GENU INE ONE. THERE IS NO EVIDENCE OR MATERIAL BEING BROUGHT ON RECORD WHICH MAY PROVE THAT THE ENTRIES ARE BOGUS ONE AND THE CASH HAS PASSED FROM THE ASSESSEE. IN OUR OPINION, THE CASE IS DULY COV ERED BY THE DECISION OF THIS TRIBUNAL IN THE CASE OF I.T.O. 1(1), AGRA VS. SRI ADITYA AGARWAL IN ITA NO.262/AGR/2006 AND THE CIT(A) HAS ACCORDINGLY RIGHTLY DELETED THE ADDITION MADE BY TH E A.O. WE ARE OF THE VIEW THAT IT IS NOT A FIT 5 CASE WHERE INTERFERENCE MAY BE MADE IN THE ORDER OF THE CIT(A) AS, IN OUR OPINION, THERE IS NO ILLEGALITY OR INFIRMITY IN THE ORDER OF THE CIT(A). WE, ACCORDINGLY, CONFIRM THE ORDER OF THE CIT(A) DELETING THE ADDITION MADE UNDER SECTION 68. CONSEQUENTLY, DELETION OF THE DISALLOWANCE AND INTEREST ON THE CASH CREDIT IS ALSO SUSTAINED. 6. IN THE RESULT, APPEAL FIELD BY THE REVENUE STAND S DISMISSED. (ORDER PRONOUNCED IN THE OPEN COURT ON 17.09.2010). SD/- SD/- (R.K. GUPTA) (P.K. BANSAL) JUDICIAL MEMBER ACCOUNTANT MEMBER PLACE: AGRA DATE: 17 TH SEPTEMBER, 2010. PBN/* COPY OF THE ORDER FORWARDED TO: 1. APPELLANT 2. RESPONDENT BY ORDER 3. CIT CONCERNED 4. CIT (APPEALS) CONCERNED 5. DR, ITAT, AGRA BENCH, AGRA 6. GUARD FILE ASSIST ANT REGISTRAR INCOME-TAX APPELLATE TRIBUNAL, AGRA TRUE COPY