Smt. Pampa Mondal, Murshidabad V. ITO, Ward - 3, Murshidabad, Murshidabad

ITA 1696/KOL/2011

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 78402 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 7 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-07-2014
• Appeal Filed By: Assessee
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 12-12-2011
• Court: TRIBUNAL
• Assessee Lawyers: SOUMITRA CHOW DHURY
• Keywords: Unexplained cash credit; Income from undisclosed sources; Corroborative evidences
• Section: 143(3); 131; 68

Judgement Text

, B , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH: KOL KATA () BEFORE , /AND , ! ) [BEFORE SHRI MAHAVIR SINGH, JM & SHRI SHAMIM YAHYA, AM] ' / I.T.A NO.1696/KOL/2011 #$ %&/ ASSESSMENT YEAR: 2007-08 SMT. PAMPA MONDAL V INCOME-TAX OFFICER, WD-3, MURSHIDABAD (PAN: AGQPM8283M) (() /APPELLANT ) (*+()/ RESPONDENT ) DATE OF HEARING: 17.06.2014 DATE OF PRONOUNCEMENT: 18.07.2014 FOR THE APPELLANT: SHRI SOUMITRA CHOWDHURY, ADVOCAT E FOR THE RESPONDENT: SMT. MADHUMALTI GHOSH, JCIT, SR.DR / ORDER PER SHRI MAHAVIR SINGH, JM : THIS APPEAL BY ASSESSEE IS ARISING OUT OF ORDER OF CIT(A)-XXXVI, KOLKATA IN APPEAL NO. 707/CIT(A)-XXXVI/KOL/WD.3,MSD/09-10/557 DATED 1 4.10.2011. ASSESSMENT WAS FRAMED BY ITO, WARD-3, MURSHIDABAD U/S. 143(3) OF T HE INCOME-TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) FOR ASSESSMENT YEAR 2007- 08 VIDE HIS ORDER DATED 20.11.2009. 2. THE ONLY ISSUE IN THIS APPEAL OF ASSESSEE IS AGA INST THE ORDER OF CIT(A) CONFIRMING THE ADDITION OF UNEXPLAINED CASH CREDITS I.E. UNSECURED LOAN AMOUNTING TO RS.30,45,000/- BY INVOKING THE PROVISIONS OF SECTION 68 OF THE ACT. 3 . BRIEFLY STATED FACTS ARE THAT THE ASSESSEE HAS BOR ROWED MONEY FROM FOLLOWING THREE PERSONS: I) SHRI HARENDRA NATH BISWAS RS.10,45,000/- II) SHRI RAMANI RANJAN ROY RS.10,00,000/- III) SHRI ARJUN MONDAL RS.10,00,000/- AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS SUMM ONED THE ABOVE THREE PERSONS FOR EXAMINATION AND ASKED TO PRODUCE THEIR I. T. DETAIL S, BANK DETAILS AND IDENTITY. THE AO RECORDED THE STATEMENT OF FIRST TWO LOAN CREDITORS I.E. SHRI HARENDRA NATH BISWAS AND SHRI RAMANI RANJAN ROY U/S. 131 OF THE ACT, WHEN THEY CO NFIRMED ABOUT GIVING LOAN TO THE ASSESSEE 2 ITA NO.1996/K/2011 SMT. PAMPA MONDAL AY 2007-08 BY APPEARING BEFORE AO AND PRODUCED THEIR I. T. REC ORDS AND PERSONAL EXAMINATION WAS DONE. BUT SHRI ARJUN MONDAL, THE OTHER LOAN CREDITOR COUL D NOT APPEAR BEFORE AO AS HE WAS OUT OF STATION. BUT, THE AO DOUBTED THE CREDITWORTHINESS O F THE ALL THREE LOAN CREDITORS AND ADDED THE ALLEGED LOANS AS ASSESSEES OWN INCOME IN TERMS OF SECTION 68 OF THE ACT. ON APPEAL BEFORE CIT(A), HE CONFIRMED THE ADDITION OF RS.30,45,000/- BY OBSERVING AS UNDER: 6. DURNG THE ASSESSMENT PROCEEDINGS, THE AO CALLE D FOR THE SOURCE OF THE LOAN AMOUNT IN THE HANDS OF THE LENDERS. SHRI HARENDRA N ATH BISWAS STATED THAT INTEREST-FREE CASH LOANS WERE GIVEN FROM TIME TO TI ME TO THE APPELLANT FROM HIS RETIREMENT BENEFIT AND PAST SAVINGS. HOWEVER, HE FA ILED TO FILE ANY SUPPORTING EVIDENCES THAT HE HAD REALLY ACCUMULATED THAT KIND OF MONEY. HE COULD NOT EVEN FILE ANY DETAIL SHOWING THE DATES ON WHICH LOAN WER E GIVEN. BEFORE ME, THE AR OF THE APPELLANT STATED THAT SHRI BISWAS WAS HAVING NS CS OF RS.2.OO LAKHS AND FDRS OF RS.2.00, WHICH WERE MATURED IN SEPTEMBER, 2006. FROM THE XEROX COPIES OF BANK FDRS AND NSCS FILED IT IS SEEN THAT THE DATE O F MATURITY OF ALL FDRS AND NSCS WERE MUCH BEFORE SEPTEMBER, 2006. THE AR HAS N OT FILED ANY EVIDENCE WHATSOEVER THAT THE MATURITY VALUE OF THOSE INSTRUM ENTS WAS GIVEN TO THE APPELLANT AS LOANS. THE AR HAS NOT ALSO FILED THE BANK STATEM ENT OF THE LENDER BEFORE ME INDICATING MATCHING CASH WAS WITHDRAWN BY THE LENDE R FROM HIS BANK ACCOUNT TOWARDS GIVING LOANS TO THE APPELLANT. SO FAR AS AG RICU1TURA1 INCOME IS CONCERNED, THE AR HAS NOT SUBMITTED ANY PAPER IN SUPPORT OF OW NERSHP OF LAND, NATURE OF CROPS, SOURCE OF EXPENSES INCURRED FOR AGRICULTURAL ACTIVITIES, QUANTUM OF YIELD AND NET INCOME GENERATED BY THE LENDER. THUS, THE CREDI TWORTHINESS OF SHRI BISWAS REMAINED UNSUBSTANTIATED. IN THE CASE OF SHRI RAMANI RANJAN MONDAL, ANOTHER L ENDER, THE AR COULD FURNISH A COPY OF P.F. STATEMENT, AS PER WHCH THE CLOSING BA LANCE AS ON 31/03/2002 WAS RS.114896/-. HOWEVER, NO EVIDENCE HAS BEEN FILED SH OWING THAT SHRI MONDAL HAD WITHDRAWN THE P.F. FOR PROVIDING CASH LOANS TO THE APPELLANT. MOREOVER, MONEY FROM P.F. CANNOT BE PREMATURELY WITHDRAWN FOR GIVIN G LOAN TO A RELATIVE. FOR THE ALLEGED ACCUMULATED AGRICULTURAL INCOME ALSO, NO EV IDENCE HAS BEEN FILED AS DISCUSSED ABOVE. IN THIS CASE ALSO, THE CREDITWORTH INESS OF THE LENDER REMAINED UNSUBSTANTIATED. IN THE CASE OF SHRI ARJUN MONDAL, THE AR WAS ASKED TO FURNISH THE PAN OF SHRI MONDAL. VIDE ORDER SHEET NOTING DATED 16/03/2010, W HICH HAS NOT BEEN FILED. SHRI MONDAL STATED TO HAVE GIVEN CASH LOANS TO THE APPEL LANT ON DFFERENT OCCASIONS FROM HIS ACCUMULATED AGRICULTURAL INCOME AND ALSO F ROM A FUND OF RS.4.00 LAKHS RECEIVED FROM HIS FATHER. HOWEVER, NO EVIDENCE HAS BEEN FILED. THUS, THE CREDITWORTHINESS OF SHRI MONDAL ALSO REMAINED UNSUB STANTIATED. 7. FOR THE FOREGOING, IT IS CLEAR THAT THE APPELLAN T FAILED TO FILE ANY CREDIBLE EVIDENCE IN SUPPORT OF THE CREDITWORTHINESS OF ALL THREE LOAN CREDITORS. THE CREDITORS EVEN FAILED TO MENTION THE DATES OF PROVI DING LOANS TO THE APPELLANT. IN VIEW OF SUCH, I AM OF THE OPINION THAT THE AO RIGHT LY TREATED THE ALLEGED CASH LOANS AS APPELLANTS OWN UNACCOUNTED INCOME, IN TERMS OF SECTION 68 OF THE ACT. THE ADDITION OF RS.30,45,000/- IS THEREFORE, CONFIRMED. 3 ITA NO.1996/K/2011 SMT. PAMPA MONDAL AY 2007-08 AGGRIEVED, ASSESSEE PREFERRED APPEAL BEFORE US. 4. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. WE FIND THAT THE ASSESSEE FILED COMPLETE DETAILS I. E. INCOME TAX, BANK ACCOUNT, COPIES OF BALANCE SHEETS, COPIES OF CAPITAL ACCOUNT AND CONFI RMATIONS OF THE PERSONS FROM WHOM AMOUNTS BORROWED AT SL. NOS. (I) AND (II) ABOVE. IN RESPECT TO THESE CREDITORS I.E. SL. NOS. (I) AND (II) NAMELY, SHRI HARENDRA NATH BISWAS AND SHRI RAMANI RANJAN ROY, THEY ACCEPTED IN THEIR DEPOSITION BEFORE THE AO TO HAVE ADVANCED THE SE AMOUNTS. WE FIND THAT ONCE ALL THE INCOME TAX PARTICULARS, CAPITAL ACCOUNT, BALANCE SH EETS AND BANK ACCOUNTS WERE FILED BY THESE CREDITORS, FROM WHERE THE AMOUNTS WERE ADVANCED, IN THAT CASE, THE IMMEDIATE SOURCE OF THE ENTRIES ARE PROVED. EVEN OTHERWISE, IF THESE EVIDE NCES WERE PROVIDED, THE AO SHOULD HAVE TAKEN ACTION IN THE HANDS OF THESE PERSONS/CREDITOR S IN CASE HE FEELS THAT THESE ENTRIES ARE UNEXPLAINED. THIS VIEW OF OURS IS SUPPORTED BY THE DECISION OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. M/S. DATAWARE PRIVATE LIMITED, ITAT NO.263 OF 2011, GA NO.2856 OF 2011 DATED 21.09.2011, WHEREIN HONBLE H IGH COURT HAS OBSERVED AS UNDER: IN OUR OPINION, IN SUCH CIRCUMSTANCES, THE ASSESSI NG OFFICER OF THE ASSESSEE CANNOT TAKE THE BURDEN OF ASSESSING THE PROFIT AND LOSS ACCOUNT OF THE CREDITOR WHEN ADMITTEDLY THE CREDITOR HIMSELF IS AN INCOME TAX ASSESSEE. AFTER G ETTING THE PAN NUMBER AND GETTING THE INFORMATION THAT THE CREDITOR IS ASSESSED UNDER THE ACT, THE ASSESSING OFFICER SHOULD ENQUIRE FROM THE ASSESSING OFFICER OF THE CREDITOR AS TO THE GENUINENESS OF THE TRANSACTION AND WHETHER SUCH TRANSACTION HAS BEEN ACCEPTED BY T HE ASSESSING OFFICER OF THE CREDITOR BUT INSTEAD OF ADOPTING SUCH COURSE, THE ASSESSING OFFICER HIMSELF COULD NOT ENTER INTO THE RETURN OF THE CREDITOR AND BRAND THE SAME AS UNWORT HY OF CREDENCE. SO LONG IT IS NOT ESTABLISHED THAT THE RETURN SUBMI TTED BY THE CREDITOR HAS BEEN REJECTED BY ITS ASSESSING OFFICER, THE ASSESSING OFFICER OF THE ASSESSEE IS BOUND TO ACCEPT THE SAME AS GENUINE WHEN THE IDENTITY OF THE CREDITOR AND THE G ENUINENESS OF TRANSACTION THROUGH ACCOUNT PAYEE CHEQUE HAS BEEN ESTABLISHED. WE FIND THAT BOTH THE COMMISSIONER OF INCOME TAX (A PPEAL) AND THE TRIBUNAL BELOW FOLLOWED THE WELL-ACCEPTED PRINCIPLE WHICH ARE REQU IRED TO BE FOLLOWED IN CONSIDERING THE EFFECT OF SECTION 68 OF THE ACT AND WE THUS FIND NO REASON TO INTERFERE WITH THE CONCURRENT FINDINGS OF FACT RECORDED BY BOTH THE AUTHORITIES. THE APPEAL IS THUS DEVOID OF ANY SUBSTANCE AND IS S UMMARILY DISMISSED. RESPECTFULLY FOLLOWING THE DECISION OF HONBLE CALC UTTA HIGH COURT IN THE CASE OF DATAWARE PRIVATE LIMITED, SUPRA, WE DELETE THE ADDITION EXCE PT THE UNSECURED LOAN OF SHRI ARJUN MONDAL. 5. IN THE CASE OF SHRI ARJUN MONDAL, THE AR WAS ASK ED TO PRODUCE THE PAN OF SHRI MONDAL, WHICH HAS NOT BEEN FILED INSTEAD HE STATED TO HAVE GIVEN CASH LOAN TO THE ASSESSEE ON DIFFERENT OCCASIONS FROM HIS ACCUMULATED AGRICULTUR AL INCOME AND ALSO FROM A FUND OF RS.4,00 4 ITA NO.1996/K/2011 SMT. PAMPA MONDAL AY 2007-08 LAKHS RECEIVED FROM HIS FATHER. BUT NO EVIDENCE IN RESPECT THEREOF WAS FILED. SINCE ASSESSEE DID NOT PROVIDE NECESSARY DETAILS TO PROVE THE GENUINEN ESS AND CREDITWORTHINESS OF THE CASH CREDITOR, WE FIND NO INFIRMITY IN THE ORDERS OF THE LOWER AUTHORITIES IN RESPECT OF THE CASE OF SHRI ARJUN MONDAL AND THE SAME IS HEREBY UPHELD. APPEAL OF ASSESSEE IS PARTLY ALLOWED. 6. IN THE RESULT APPEAL OF ASSESSEE IS PARTLY ALLOW ED. 7. ORDER IS PRONOUNCED IN THE OPEN COURT ON 18.07.2 014. SD/- SD/- , ! , (SHAMIM YAHYA ) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 18 TH JULY, 2014 -. #/0 1 JD.(SR.P.S.) 2 *3 4 3%5- COPY OF THE ORDER FORWARDED TO: 1 . () / APPELLANT SMT. PAMPA MONDAL, VILL. CHIROTI, P.O. KODLA, P.S. BERJAMPUR, DIST. MURSHIDABAD 2 *+() / RESPONDENT ITO, WARD-3, MURSHIDABAD. 3 . # ( )/ THE CIT(A), KOLKATA 4. 5. # / CIT , KOLKATA 3:; *# / DR, KOLKATA BENCHES, KOLKATA +3 */ TRUE COPY, #