ACIT, New Delhi V. Shri Suren Goel, New Delhi

ITA 1767/DEL/2011

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 53242 (ITAT-DELHI)
• Duration Of Justice: 7 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-12-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 01-12-2011
• Assessment Year: 2007-2008
• Appeal Filed On: 11-04-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S MOHANTHY
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI G BENC H BEFORE SHRI RAJPAL YADAV, JM & SHRI A.N. PAHUJA, A M ITA NO. 1767/DEL/2011 ASSESSMENT YEAR:2007-08 ACIT,CIRCLE 32(1), ROOM NO. 376A C.R. BUILDING,IP ESTATE NEW DELHI V/S . SHRI SUREN GOEL,C-192, DEFENCE COLONY,NEW DELHI [PAN: AAJPG1674C] ] (APPELLANT) (RESPONDENT) ASSESSEE BY SMT. LALITA KRISHNAMURTHY, AR REVENUE BY SMT. S. MOHANTHY, DR DATE OF HEARING 1-12-2011 DATE OF PRONOUNCEMENT 1-12-2011 O R D E R A.N. PAHUJA: THIS APPEAL FILED ON 11.04.2011 BY THE REVENUE AGAINST AN ORDER DATED 14.02.2011 OF THE LD. CIT(A)-XXVI, N EW DELHI, RAISES THE FOLLOWING GROUNDS: - 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) WAS NOT JUSTIFIED IN DELETING THE ADDITION O F ` 20,00,000/- MADE BY THE AO U/S 68 OF THE I.T. ACT, 1961 INSPITE OF THE FACT THAT THE ASSESSEE HAD FAILED TO ESTABLISH THE GENUINENESS OF THE TRANSACTION WHICH COULD PROVE THAT THE LOAN AMOUNT WAS RECEIVED BY THE ASSESSEE THROUGH BANKING CHANNEL OR BY ANY OTHER MO DE OF PAYMENT. 2. THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR AMEN D ANY/ALL THE GROUNDS OF APPEAL BEFORE OR DURING THE COURSE O F HEARING OF THE APPEAL. 2. FACTS, IN BRIEF, AS PER RELEVANT ORDERS ARE THAT RETURN DECLARING INCOME OF ` 19,71,162/- FILED ON 29.10.2007 BY THE ASSESSEE, AF TER BEING PROCESSED U/S 143(1) OF THE I.T. ACT, 1961( HEREINA FTER REFERRED TO AS THE ACT) WAS SELECTED FOR SCRUTINY WITH THE SERVICE O F A NOTICE U/S 143(2) OF THE ACT ON 18.07.2008. DURING THE COURSE OF ASSES SMENT PROCEEDINGS, THE ASSESSING OFFICER[AO IN SHORT] POI NTED OUT AIR INFORMATION TO THE ASSESSEE, A PARTNER IN THE FIRM M/S LYRA INDUSTRIALS. ITA NO.1767/D/11 2 THE BALANCE SHEET OF THE ASSESSEE AS ON 31.03.2007 REVEALED THAT HIS LIABILITIES ENHANCED BY ` 20,00,000/- TOWARDS SH. PRITAM GOEL . TO A QUERY BY THE AO, THE ASSESSEE REPLIED THAT TO MAINT AIN CREDIT LIMITS ENJOYED BY THE PARTNERSHIP FIRM, A JOURNAL ENTRY WA S PASSED IN THE BOOKS OF ACCOUNT OF PARTNERSHIP FIRM M/S LYRA INDUSTRIALS , WHEREBY ASSESSEES CAPITAL ACCOUNT WAS CREDITED AND HIS FATHER SHRI PR ITAM GOEL CAPITAL ACCOUNT WAS DEBITED BY AN EQUAL AMOUNT. THE FACT OF JOURNAL ENTRY PASSED IN THE BOOKS OF THE FIRM WAS DULY INCORPORAT ED IN THE BOOKS OF THE ASSESSEE. SINCE TRANSFER OF MONEY WAS GENUINE AND THERE WAS NO INTENTION OF ANY CONCEALMENT OR EVASION OF TAX, REL YING UPON THE DECISION OF ITAT PUNE BENCH IN SUNFLOWER BUILDER PVT. LIMITE D VS. DCIT, 61 ITD 227; AND CIT VS. BAZPUR COOPERATIVE SUGAR FACTORY L IMITED 172 ITR 321 (SC), THE ASSESSEE REPLIED THAT TRANSACTION REP RESENTED ONLY DIVERSION OF FUNDS FROM ONE PERSON TO ANOTHER WITHI N THE FAMILY AND NO THIRD PARTY WAS INVOLVED. HOWEVER, THE AO DID NOT ACCEPT THE EXPLANATION OF THE ASSESSEE AND ADDED THE AFORESAID AMOUNT OF ` 20,00,000/-, INVOKING PROVISIONS OF SEC. 68 OF THE ACT. 3. ON APPEAL, THE LD. CIT(A) DELETED THE ADDITION, HOLDING AS UNDER: - 4.4 I HAVE CONSIDERED THE SUBMISSIONS OF THE LD. COUNSE L, THE AOS REMAND REPORT AND OTHER FACTS ON RECORD. IN THIS CASE THERE IS NO DISPUTE THAT THE LOAN OF RS. 20 LC AS SHOWN FROM SH. PRITAM GOEL IS ONLY BY WAY OF BOOK ENTRY I N THE BOOKS OF M/S LYRA INDUSTRIALS. NEITHER THE GIVER O F LOAN NOR THE RECEIVER OF LOAN IS CLAIMING TO HAVE EXCHANGED THE SUM OF RS. 20 LACS THROUGH BANKING CHANNELS OR IN CASH. THE AMOUNT WAS ALREADY AVAILABLE IN THE BOOKS OF ACCOUN T OF M/S LYRA INDUSTRIALS BUT IT HAS BEEN TRANSFERRED FROM T HE ACCOUNT OF SH. PRITAM GOEL TO THE ACCOUNT OF SH. SUREN GOEL WITH NECESSARY ENTRIES IN THEIR CAPITAL ACCOUNTS. AS NO MONEY HAS BEEN RECEIVED FROM OUTSIDE, THERE IS NO ENTRY I N THE CASH BOOK OF THE FIRM. ON THESE GIVEN FACTS THERE CAN B E NO CASE FOR TREATING THE SUM OF RS. 20 LACS AS AN UNEXPLAIN ED CASH CREDIT IN THE BOOKS OF THE APPELLANT. THE AOS VIE W THAT THE GENUINENESS OF A TRANSACTION CANNOT BE CERTIFIED TI LL THE MODE OF PAYMENT IS ESTABLISHED CANNOT BE HELD TO BE A TH UMB RULE. IN THE CASE OF BOOK ENTRIES/ADJUSTMENTS THERE IS NO QUESTION OF MODE OF PAYMENT OR ACTUAL RECEIPT OF MONEY FROM ONE PARTY TO ANOTHER. BOOK ENTRY TRANSFER MEANS TRANSF ER ONLY THROUGH THE RESPECTIVE ACCOUNTS IN THE BOOKS OF THE CONCERNS. AFTER THE TRANSFER THE FIRM HAS SHOWN RE DUCED ITA NO.1767/D/11 3 BALANCE IN THE CASE OF PRITAM GOEL AND AN INCREASED BALANCE IN THE CASE OF SUREN GOEL EVEN THOUGH THESE HAS BEEN NO PHYSICAL WITHDRAWAL OF RS. 20 LACS FROM SH. PRITAM GOELS ACCOUNT. THE AOS OBSERVATION THAT THE TRAN SACTION IS SHAM IS THUS, MISCONSTRUED. THE LIABILITY OF RS. 2 0 LACS HAS BEEN ESTABLISHED TO BE GENUINE AS THE AMOUNT HAS BE EN TAKEN AS A LOAN FROM SH. PRITAM GOEL. IN VIEW OF THE OBSERVATIONS MADE ABOVE, IT IS HELD THAT THE ADDITION OF RS. 20 LACS MADE U/S 68 IS TOTALLY UNJU STIFIED. ACCORDINGLY THE ADDITION IS DELETED. 4. THE REVENUE IS NOW IN APPEAL BEFORE US AGAINST T HE AFORESAID FINDINGS OF LD. CIT(A). THE LD. DR SUPPORTED THE F INDINGS OF AO WHILE THE LD. AR ON BEHALF OF THE ASSESSEE RELIED UPON THE OR DER OF THE LD. CIT(A). 5. WE HAVE HEARD BOTH THE PARTIES AND GONE THROUGH THE FACTS OF THE CASE. INDISPUTABLY, THE LOAN OF ` 20 LACS SHOWN FROM SH. PRITAM GOEL FATHER OF THE ASSESSEE WAS ONLY A JOURNAL ENTRY IN THE BOOKS OF M/S LYRA INDUSTRIALS. SINCE THERE WAS NO PHYSICAL TRANSFER OF MONEY FROM THE ACCOUNT OF SH. PRITAM GOEL AND ONLY A JOURNAL ENTRY WAS PASSED, THE FINDINGS OF THE AO THAT TRANSACTION WAS SHAM ,IS BA SELESS, THE LD. CIT(A) CONCLUDED. IN THE LIGHT OF THESE FINDINGS OF LD. C IT(A) ESPECIALLY WHEN THE REVENUE HAVE NOT PLACED BEFORE US ANY MATERIAL SO A S TO ENABLE US TO TAKE A DIFFERENT VIEW IN THE MATTER, WE ARE NOT INC LINED TO INTERFERE. THEREFORE, GROUND NO. 1 IN THE APPEAL IS DISMISSED. 6. NO ADDITIONAL GROUND HAS BEEN RAISED BEFORE US I N TERMS OF RESIDUARY GROUND NO.2 IN THE APPEAL, ACCORDINGLY, T HIS GROUND IS ALSO DISMISSED. 7. NO OTHER SUBMISSION OR ARGUMENT WAS MADE BEFO RE US. 8. IN THE RESULT, APPEAL IS DISMISSED. ITA NO.1767/D/11 4 ORDER PRONOUNCED SOON AFTER THE CONCLUSION OF HEAR ING SD/- SD/- (RAJPAL YADAV) (A.N. PAHUJA) JUDICIAL MEMBER ACCOUNTANT MEMBER *KAVITA COPY FORWARDED TO: - 1.SHRI SUREN GOEL,C-192, DEFENCE COLONY,NEW DELHI 2. ACIT,CIRCLE 32(1),ROOM NO. 376A,C.R. BUILDING,I P ESTATE 3. CIT CONCERNED 4.CIT(A)-XXVI, NEW DELHI 5.DR, ITAT G BENCH,NEW DELHI 6. GUARD FILE TRUE COPY BY ORDER, DEPUTY REGISTRAR