Savita Ladha, Kolkata V. I.T.O. Wd-36(3)/Kolkata, Kolkata

ITA 1780/KOL/2012

• Counselvise Citation: [2016] 121 COUNSELVISE.COM (IT) 3377 (ITAT-KOLKATA)
• Duration Of Justice: 3 year(s) 1 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-01-2016
• Appeal Filed By: Assessee
• Bench Allotted: A
• Assessment Year: 2007-2008
• Appeal Filed On: 04-12-2012
• Court: TRIBUNAL
• Department Lawyers: S DUTTA
• Assessee Lawyers: RANJIT MURARKA; K K CHANDAKACA
• Keywords: Salary income
• Section: 133(6); 131; 68

Judgement Text

1 ITA NO.1780/KOL/2012 SAVITA LADHA ,A.Y.2007-08 IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH A KOL KATA [BEFORE HONBLE SHRI N.V.VASUDEVAN, JM & SHRI M.B ALAGANESH, AM ] ITA NO.1780/KOL/2012 ASSESSMENT YEARS : 2007-08 SAVITA LADHA -VERSUS- I.T.O., WARD-36(3), KOLKATA KOLKATA (PAN:ADVPM 0118 K) (APPELLANT) (RESPONDENT) FOR THE ASSESSEE : SHRI RANJIT MURARKA, ADVOCAT E & SHRI K.K.CHANDAK,ACA FOR THE RESPONDENT : SHRI S.DUTTA, JCIT, SR.DR DATE OF HEARING : 08.12.2015. DATE OF PRONOUNCEMENT : 20.01.2016. ORDER PER N.V.VASUDEVAN, JM: THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORDE R DATED 09.08.2012 OF CIT(A)-XX, KOLKATA RELATING TO A.Y.2007-08. 2. THE ONLY GROUND OF APPEAL RAISED BY THE ASSESSEE READS AS FOLLOWS :- 1. THAT UNDER THE FACTS & CIRCUMSTANCES OF THE CAS E THE LEARNED AO WAS UNJUSTIFIED IN ADDING RS.9,31,750/- AS INCOME FROM UNDISCLOSED SOU RCES IN RESPECT OF LOANS TAKEN FROM VARIOUS PERSONS AND THE SAME SHOULD BE DELETED. 3. THE ASSESSEE IS AN INDIVIDUAL. SHE DERIVES INCOM E FROM BUSINESS AND OTHER SOURCES BESIDES SALARY INCOME. IN THE COURSE OF ASS ESSMENT PROCEEDINGS THE AO NOTICED THAT THE ASSESSEE HAD RECEIVED LOANS FROM T HE FOLLOWING PARTIES :- I) PRIYANKA GUPTA RS. 1,750 II) MAHAVIR PRASDMALANI RS.4,00,000 III) SUMAN BAID RS.2,50,000 IV) LAKSHMI DEVI MALANI RS. 80,000 V) KANCHAN DEVI MANOTH RS.2,00,000 RS.9,31,750. 2 ITA NO.1780/KOL/2012 SAVITA LADHA ,A.Y.2007-08 THE ASSESSEE HAD FILED CONFIRMATION GIVEN BY THE AF ORESAID PARTIES THAT THEY HAVE GIVEN LOANS TO THE ASSESSEE WHICH WERE FILED BEFORE THE A O.AO ISSUED NOTICE U/S 133(6) OF THE ACT TO THE AFORESAID PARTIES. IN RESPONSE TO TH E SAME THEY HAD ALSO CONFIRMED THE FACT THAT THEY HAVE GIVEN LOANS TO THE ASSESSEE. 4. WITH REGARD TO THE REPLY RECEIVED BY THE AO FR OM PRIYANKA GUPTA THE AO FOUND THAT THE AMOUNT OUTSTANDING SHOWN BY THE AFORESAID PARTY WAS RS.51,750/-. SINCE THE ASSESSEE CLAIMED OUTSTANDING LOAN OF RS.50,000/- AO WAS OF THE VIEW THAT THE DIFFERENCE IN THE FIGURES AS CLAIMED BY THE ASSESSE E AND AS CONFIRMED BY PRIYANKA GUPTA HAD NOT BEEN PROPERLY EXPLAINED. AO, THEREFOR E TREATED THE EXPLANATION WITH REGARD TO RECEIPT OF LOAN FROM PRIYANKA GUPTA AS UN EXPLAINED. 5. WITH REGARD TO THE REMAINING FOUR PERSONS ALL O F THEM HAD GIVEN CONFIRMATION THAT THEY HAVE GIVEN LOANS TO THE ASSESSEE IN RESPONSE T O THE NOTICE U/S 133(6) OF THE ACT BY THE AO. ALL THE AFORESAID FOUR PERSONS HAD GIVEN CO PY OF THEIR INCOME TAX RETURNS, PROFIT AND LOSS ACCOUNT AND BALANCE SHEET, COPY OF THE BANK STATEMENT WHEREFROM THE LOAN WAS GIVEN. THEY HAD ALSO GIVEN EVIDENCE OF RE -PAYMENT OF THE LOAN BY THE ASSESSEE IN THE SUBSEQUENT ASSESSMENT YEARS. COPIES OF THE EVIDENCE FILED BY THE AFORESAID PERSON ARE PLACED AT PAGES 4 TO 108 OF TH E ASSESSEES PAPER BOOK. AO FOUND THAT BEFORE GIVING UP THE LOANS ON THE AFORESAID PA RTIES TO THE ASSESSEE BY CHEQUE THERE WAS CASH DEPOSITS IN THE BANK ACCOUNT OF THE AFORES AID FOUR PARTIES. AO CALLED UPON THE ASSESSEE TO PRODUCE THE AFORESAID FOUR PARTIES FOR EXAMINATION ON A SPECIFIED DATE. ACCORDING TO THE ASSESSEE SHE REQUESTED THE PARTIES TO APPEAR BEFORE AO BUT THEY DECLINED TO DO SO. ACCORDING TO THE AO THE FACTS AN D CIRCUMSTANCES SHOWED THAT THE ASSESSEE HAS ROUTED HIS OWN UNDISCLOSED INCOME THRO UGH THE LOAN CREDITORS. IN COMING TO THE AFORESAID CONCLUSION THE AO MAINLY PLACED RE LIANCE ON THE FACT THAT THE ASSESSEE FAILED TO PRODUCE THE LOAN CREDITORS FOR RECORDING THEIR STATEMENTS REGARDING GENUINENESS AND CREDITWORTHINESS OF THE SO CALLED L OAN CREDITORS. AO ACCORDINGLY TREATED THE SUM OF RS.9,39,715/- AS UNEXPLAINED CAS H CREDIT U/S 68 OF THE ACT AND ADDED THE SAID SUM TO THE TOTAL INCOME OF THE ASSES SEE. 3 ITA NO.1780/KOL/2012 SAVITA LADHA ,A.Y.2007-08 6. BEFORE CIT(A) THE CONTENTION OF THE ASSESSEE WI TH REGARD TO THE LOAN CREDITOR SMT. PRIYANKA GUPTA WAS THAT THE OUTSTANDING LOAN P AYABLE TO THE AFORESAID PARTY WAS SUM OF RS.50,000/- AND A SUM OF RS.1,750/- AS INTER EST ON THE LOAN. IT WAS POINTED OUT THAT THE AO HAD NOT EVEN CALLED UPON THE ASSESSEE T O EXPLAIN THE DISCREPANCY. WITH REGARD TO THE LOANS RECEIVED FROM THE REMAINING FOU R PARTIES NAMELY, MAHAVIR PRASAD MALANI, SUMAN BAID, LAKSHMI DEVI MALANI AND KANCHAN DEVI MALANI, THE ASSESSEE SUBMITTED THAT WHEN THE ASSESSEE EXPRESSED HIS INAB ILITY TO PRODUCE THE AFORESAID PARTIES FOR EXAMINATION BY THE AO, THE AO TO FIND O UT THE TRUTH AND VERACITY OF THE CLAIM MADE BY THE ASSESSEE OUGHT TO HAVE ISSUED SUM MONS U/S 131 OF THE ACT. THE AO HAVING FAILED TO ISSUE SUCH SUMMONS CANNOT DRAW AN Y ADVERSE INFERENCE AGAINST THE ASSESSEE. 7. CIT(A), HOWEVER WAS OF THE VIEW THAT THE ADDITIO N MADE BY AO HAD TO BE CONFIRMED. THE FOLLOWING ARE THE REASONS GIVEN BY C IT(A) TO COME TO THE AFORESAID CONCLUSION. A) SMT. PRIYANKA GUPTA - IN HER CONFIRMATION SHE H AD REPLIED THAT LOAN OF RS.50,000/- WAS RECEIVABLE BY HER FROM THE APPELLANT AND THE SA ME HAD BEEN RECEIVED BY HER. SHE HAD NOT REPLIED REGARDING THE INTEREST OF RS.1,750/ - PAID BY THE APPELLANT TO HER ON 17- 05-2007 AND THE SAME WAS CLEARED FROM THE APPELLANT BANK ACCOUNT. B) MAHABIR PRASAD MALANI - THE PARTY HAD GIVEN THE LOAN TO THE APPELLANT AND THE SAME WAS CLEARED FROM THE BANK ON 28-06-2006. AT THAT TI ME THERE WAS A CREDIT BALANCE IN HIS ACCOUNT FROM 25-05-2006 AND THE CREDIT BALANCE WAS GENERATED IN HIS ACCOUNT BY REFUND OF LOAN FROM SOME PARTY TO WHOM HE HAD GIVEN LOAN EARLIER. IT IS FOUND FROM THE BANK STATEMENT FILED AT THE AP PELLATE STAGE THAT THERE WAS AN OPENING CREDIT BALANCE OF RS.7,079/-, A CASH DEPOS IT OF RS.4,00,000/- WAS MADE ON 17- 04-2006, ON 21-04-2006 THE SAME AMOUNT WAS WITHDRAW N BY SOME MANOJ, ON 25-05- 2006 THE SAME AMOUNT WAS DEPOSITED THROUGH CLEARING ICI AND ON 28-06-06 THE SAME AMOUNT WAS WITHDRAWN BY THE APPELLANT. C) SUMAN BAID THE PARTY HAD GIVEN LOAN TO THE AP PELLANT AND THE SAME WAS CLEARED FROM THE BANK ON 28-06-2006. AT THAT TIME THERE WAS A CREDIT BALANCE IN THEIR ACCOUNT FROM 25-05-2006 AND THE CREDIT BALANCE WAS GENERATE D IN HER ACCOUNT BY REFUND OF LOAN FROM SOME PARTY TO. WHOM SHE HAD GIVEN LA AN EARLIE R. 4 ITA NO.1780/KOL/2012 SAVITA LADHA ,A.Y.2007-08 IT IS FOUND FROM THE BANK STATEMENT FILED AT THE AP PELLATE STAGE THAT THERE WAS AN OPENING CREDIT BALANCE OF RS.5,573.70, A DEPOSIT OF RS.2,50,000/- ON 11-05-2005 THROUGH CLEARING ICI, ON 27-07-2005 THE SAME AMOUN T WAS WITHDRAWN BY SOME SHYAM, ON 18-08-2005 THE SAME AMOUNT WAS DEPOSITED THROUGH CLEARING ICI, ON 19-08-2008 THE SAME AMOUNT WAS WITHDRAWN BY SOME MANOJ, ON 23-03-2 006 THE SAME AMOUNT WAS DEPOSITED THROUGH ICI, ON 25-03-2006 THE SAME AMOUN T WAS WITHDRAWN BY THE PARTY, ON 11-04-2006 THE SAME AMOUNT WAS DEPOSITED IN CASH, O N 13-04-2006 THE SAME AMOUNT WAS WITHDRAWN BY SOME MANOJ KUMAR, ON 25-05-2006 TH E SAME AMOUNT WAS DEPOSITED THROUGH CLEARING ICI AND ON 28-06-06 THE SAME AMOUN T WAS WITHDRAWN BY THE APPELLANT. D) LAKSHMI DEVI MALANI THE PARTY HAD GIVEN THE LO AN TO THE APPELLANT AND THE SAME WAS CLEARED FROM THE BANK ON 28-06-2006. AT THAT TI ME THERE WAS A CREDIT BALANCE AND THE CREDIT BALANCE WAS GENERATED IN HER ACCOUNT BY REFUND OF LOAN FROM SOME PARTY TO WHOM SHE HAD GIVEN LOAN EARLIER. IT IS FOUND FROM THE BANK STATEMENT FILED AT THE AP PELLATE STAGE THAT THERE WAS AN OPENING CREDIT BALANCE OF RS.94661.97, ON 08-04-20 06 AN AMOUNT OF RS.80,000/- WAS WITHDRAWN BY THE PARTY, ON 17-04-2006 THERE WAS A C ASH DEPOSIT OF RS.2,30,000/-, ON 21- 05-2006 THE SAME AMOUNT WAS WITHDRAWN, ON 26-06-200 6 AN AMOUNT OF RS.80,000/- WAS DEPOSITED THROUGH TRANSFER AND ON 27-06-06 AN A MOUNT OF RS.80,000/- WAS WITHDRAWN BY THE APPELLANT. E) KANCHAN DEVI MUNOTH - THE PARTY HAD DEPOSITED C ASH IN BANK ON 07-04-2006 AND 18-04-2006 AND GIVEN THE LOAN TO THE APPELLANT AND THE SAME WAS CLEARED FROM THE BANK ON 28-06-2006. IT IS FOUND FROM THE BANK STATEMENT FILED' AT THE A PPELLATE STAGE THAT THERE WAS AN OPENING CREDIT BALANCE OF RS.5,613.83 , ON 07-04-20 06 AN AMOUNT OF RS:30,000/- . WAS DEPOSITED THROUGH CLEARING, HDF, ON 18-04-2006 THER E WAS A CASH DEPOSIT OF RS.1,70,000/- AND ON 28-06-06 AN AMOUNT OF RS.2,00 ,000/- WAS WITHDRAWN BY THE APPELLANT. 4.3. THE FACT REMAINS THAT THE LOANS WERE GIVEN EIT HER OUT OF CASH DEPOSITED IN THEIR BANK ACCOUNTS OR THROUGH CLEARING/TRANSFER OF FUNDS. HOW EVER, NO SOURCE OF DEPOSITS WAS EXPLAINED. FURTHER, FROM THE DETAILS OF THEIR RETUR NED INCOME SHOWN BY THE LOAN CREDITORS, IT IS CLEAR THAT THEY DO NOT HAVE SUFFIC IENT EARNING TO GIVE SUCH HUGE LOANS. IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE, A S DISCUSSED ABOVE, IT IS CLEAR THAT IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE L OAN CREDITORS COULD NOT BE PROVED. ONUS WAS ON THE APPELLANT TO PROVE THE SAME. IN ABS ENCE OF PROVING THE TRANSACTION AS GENUINE, IT WAS RIGHTLY HELD BY THE AO TO TREAT SU CH LOAN AS INCOME OF THE APPELLANT FROM UNDISCLOSED SOURCE WHICH WAS TAKEN U/S 68 OF T HE I.T.ACT, 1961. IT IS A RIGHT OF THE BUSINESSMAN TO RUN HER BUSINESS IN THE WAY SHE FEEL S BETTER FOR HER BUSINESS BUT THERE SHOULD NOT BE ANY ANGLE OF COLOURABLE DEVICE TO RED UCE HER TAX LIABILITY. UNDER THESE FACTS AND CIRCUMSTANCES OF THE CASE THE GROUND RAIS ED BY THE APPELLANT IS DISMISSED. 8. AGGRIEVED BY THE ORDER OF CIT(A) ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 5 ITA NO.1780/KOL/2012 SAVITA LADHA ,A.Y.2007-08 9. WE HAVE HEARD THE RIVAL SUBMISSIONS. THE LD. COU NSEL FOR THE ASSESSEE PRIMARILY LAID EMPHASIS ON THE FACT THAT THE ASSESS EE HAD PRIMA FACIE DISCHARGED HER ONUS AND SATISFACTORILY EXPLAINED THE RECEIPT OF LO AN. IT WAS SUBMITTED BY HER THAT THE AO HAD DRAWN ADVERSE INFERENCE WITHOUT EXAMINING TH E CREDITORS BY ISSUING SUMMONS U/S 131 OF THE ACT. IN THIS REGARD OUR ATTENTION WA S DRAWN TO THE FOLLOWING JUDICIAL PRONOUNCEMENTS FOR THE PROPOSITION THAT THOUGH THE ASSESSEE HAD FILED CONFIRMATION, INCOME TAX PARTICULARS OF THE CREDITORS THEN IT IS FOR THE AO TO ISSUE SUMMONS TO THOSE CREDITORS AND EXAMINE THEM WITH REGARD TO THE SOURC E OF FUNDS. A) CIT VS ORISSA CORPORATION P.LTD. 159 ITR 78 (SC) B) NATHU RAM PREMCHAND VS CIT 49 ITR 561 (ALL) C) SRI PRITAM DAFTARY VS CIT 283 ITR 259 (CAL) D) CIT VS M/S. DATAWARE PRIVATE LIMITED IN GA NO.2856 OF 2011 JUDGMENT DATED 21.09.2011 HONBLE CALCUTTA HIGH COURT. 10. THE LD. DR RELIED ON THE ORDER OF CIT(A). 11. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. THE L AW IS WELL SETTLED THAT WHEN THE INCOME TAX PARTICULARS OF THE CREDITORS ARE GIVEN B Y THE ASSESSEE ALONG WITH THE CONFIRMATION OF THE LOAN CREDITORS THE BURDEN IS ON THE AO TO MAKE PROPER ENQUIRY BY ISSUING OF SUMMONS U/S 131 OF THE ACT. IN THE PRESE NT CASE THE AO HAS FAILED TO DO SO. AO CANNOT DRAW ANY ADVERSE INFERENCE FOR THE REASON THAT THE ASSESSEE COULD NOT PRODUCE THE CREDITORS BEFORE THE AO FOR HIS EXAMINA TION. THE AO HAD ALL THE POWERS TO ISSUE SUMMONS TO THE CREDITORS FOR THE PURPOSE O F VERIFYING AND CLARIFYING WHATEVER DOUBTS THE AO HAD WITH REGARD TO THE BANK ACCOUNT O F THE CREDITORS. IN THE PRESENT CASE THE AO HAS FAILED TO EXERCISE HIS STATUTORY POWERS WHICH ARE MEANT TO FIND OUT THE TRUTH OR OTHERWISE OF A CLAIM MADE BY THE ASSESSEE BEFORE HIM. IT APPEARS TO US THAT AS FAR AS THE ASSESSEE IS CONCERNED THE LOAN CREDITOR RECEIVED MONEYS IN THE FORM OF CHEQUES. THE AO/CIT(A) HAS IGNORED THIS ASPECT AND HAS BEEN POINTING OUT TO AN EARLIER INTRODUCTION OF CASH IN THE BANK ACCOUNT OF THE CREDITORS WHICH WAS GIVEN AS A LOAN TO THE THIRD PARTIES AND REALISED BY THE LOAN CREDITOR. IT IS ONLY THEREAFTER THAT 6 ITA NO.1780/KOL/2012 SAVITA LADHA ,A.Y.2007-08 CHEQUES HAVE BEEN ISSUED TO THE ASSESSEE. IT THUS A PPEARS TO US THAT AO HAS GONE INTO THE SOURCE OF SOURCE WHICH IS NOT PERMISSIBLE U/S 6 8 OF THE ACT. IN ANY EVENT AS WE HAVE ALREADY OBSERVED THAT THE AO OUGHT TO HAVE BRO UGHT MATERIAL ON RECORD THAT THE ASSESSEE HAS ROUTED HIS OWN UNDISCLOSED INCOME THRO UGH THE LOAN CREDITORS. IN THE GIVEN CIRCUMSTANCES WE ARE OF THE VIEW THAT THE ADD ITION SUSTAINED BY THE CIT(A) HAS TO BE DELETED. WE, ACCORDINGLY DIRECT THAT THE ADDI TION SUSTAINED BY CIT(A) BE DELETED. THE APPEAL OF THE ASSESSEE IS ACCORDINGLY ALLOWED. 12. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALL OWED. O RDER PRONOUNCED IN THE COURT ON 20.01.2016. SD/- SD/- [M.BALAGANESH ] [ N.V.VASUDEVAN ] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 20.01.2016. [RG PS] COPY OF THE ORDER FORWARDED TO: 1.SAVITA LADHA, 204, EASTERN BUILDING, 19, R.N.MUKH ERJEE ROAD, KOLKATA-700001. 2. I.T.O., WARD-36(3), KOLKATA. 3. CIT(A)-XX, KOLKATA 4. CIT-XII, KOLKATA. 5. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY BY ORDER, DEPUTY /ASST. REGISTRAR, ITAT, KOLKATA BENCHES 7 ITA NO.1780/KOL/2012 SAVITA LADHA ,A.Y.2007-08