Ashwani Kumar Jain, Uttar Pradesh V. ACIT, Meerut

ITA 205/DEL/2014

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 2794 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 5 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 17-05-2017
• Assessment Year: 2007-2008
• Appeal Filed On: 10-01-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: S K JAIN
• Keywords: Unexplained cash credit; Principle of natural justice; Source of fund; Corroborative evidences; Onus to prove
• Section: 142(1); 131; 68

Judgement Text

PAGE 1 OF 12 I.T.A .NO.-205/DEL/2014 ASHWANI KUMAR JAIN VS ACIT IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: A NEW DELHI BEFORE SH. I.C.SUDHIR, JUDICIAL MEMB ER AND SH.ANADEE NATH MISSHRA, ACCOUNTANT MEMBER I.T.A .NO.-205/DEL/2014 (ASSESSMENT YEAR-2007-08) ASHWANI KUMAR JAIN, 82/1, RAILWAY ROAD, MEERUT CITY, UTTAR PRADESH. PAN-AAMPJ7368L ( APPELLANT) VS ACIT, CIRCLE-1, MEERUT. (RESPONDENT) ASSESSEE BY SH. VINOD KUMAR GOEL, ADV. REVENUE BY SH. S.K.JAIN, SR.DR ORDER PER ANADEE NATH MISSHRA, ACCOUNTANT MEMBER (A). THE PRESENT APPEAL HAS BEEN FILED BY THE ASSES SEE AGAINST THE ORDER DATED 29.10.2013 OF CIT(A), MEERUT PERTAINING TO A.Y. 2007-08. GROUNDS OF APPEAL ARE AS UNDER:- 1. BECAUSE THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN LAW AS WELL AS ON FACTS WHILE CONFIRMING THE FOLLOW ING DISALLOWANCES : DEDUCTION U/S 68 DISALLOWANCE BY ASSESSING OFFICER DISALLOWED BY ASSESSING OFFICER AND CONFIRMED BY CIT(APPEALS) EXTENT AMOUNT RS. DEDUCTION U/S 68 RS.41,61,305.00 RS.41,61,305.00 RS .38,02,005.00 2. BECAUSE THE ADDITIONS MADE AND CONFIRMED BY THE CIT (A) UNDER SECTION 68 OF THE INCOME TAX ACT ARE AGAINST LAW AN D ARE ARBITRATORY AS IN HIS ORDER PARA 3.7 HE HAS RAISED VARIOUS INTENTIONS WHI CH ARE NOT THE SUBJECT HERE IN THIS MATTER AS WHEN THE EARLIER APPEAL OF THE AP PELLANT WAS DECIDED BY THE HON'BLE ITAT THE ASSESSEE WAS DIRECTED TO PRODUCE T HE CREDITORS BEFORE THE A.O. SO THERE IDENTIFICATION AND SOURCE OF FUNDS CA N BE ESTABLISHED, AND THE APPELLANT DID SO. PAGE 2 OF 12 I.T.A .NO.-205/DEL/2014 ASHWANI KUMAR JAIN VS ACIT 3. BECAUSE THE A.O. AND CIT (A) HAS NEITHER CONSID ERED THE FACT GIVEN IN THE AFFIDAVITS THE CREDITORS HAS SUBMITTED BEFORE T HE A.O. WHILE PRESENTING THEMSELVES FOR IDENTIFICATION AND THE A.O. EVEN AFT ER SUBMISSIONS MADE BY THEM ON OATH BY AFFIDAVIT HAS RECORDED THEIR SO CAL LED STATEMENTS AGAINST THE LAW OF NATURAL JUSTICE BY NOT ALLOWING EITHER THE A SSESSEE OR THE LEGAL REPRESENTATIVE OF THE CREDITORS TO BE PRESENT WHILE RECORDING THE STATEMENTS OF THE CREDITORS. (B) RETURN OF INCOME WAS FILED ON 31.11.2007 DECLAR ING TOTAL INCOME OF RS.16,983/- . ORIGINAL ASSESSMENT ORDER U/S 143 OF INCOME TAX ACT, 1961 (IN SHORT ACT) WAS PASSED ON 23.03.2009 WHEREIN TOTAL INCOME WAS ASSESSED AT RS.48,66,459/- AFTER MAKING THE FOLLOWING ADDITIONS U/S 68 OF THE ACT ON ACCOUNT OF UNEXPLAIN ED LOANS:- I. SMT. HARBIR KAUR NARULA - RS.171505 II. SMT. SIMRAN SETHI - RS.167500 III. SHRI HARBANS THEKEDAR - RS.3000000 IV. MS. SANDHYA JAIN - RS.359399 V. M/S. R.J.EXIM - RS.1151171 (B.1) THE ASSESSEE FILED APPEAL AGAINST THE AFORESA ID ASSESSMENT ORDER DATED23.12.2009 BEFORE LD. COMMISSIONER OF APPEAL [ IN SHORT CIT(A)], MEERUT. LD.CIT(A) VIDE APPELLATE ORDER DATED 20.07.2010 DELETED THE AFORESAID ADDITION OF RS.11,51,171/- IN RESPECT OF LOAN FROM M/S R.J.EXIM AND CONFIRMED THE ADDITIONS IN RE SPECT OF LOANS CLAIMED TO HAVE BEEN TAKEN FROM MS. SANDHYA JAIN & SH. HARVANSH LAL THEKEDAR. THE LD.CIT(A) ALSO ENHANCED THE ADDI TIONS IN RESPECT OF LOANS CLAIMED TO HAVE BEEN TAKEN FROM SMT. HARBIR K AUR NARULA AND SMT. SIMRAN SETHI. THE REVENUE FILED APPEAL AGAINS T THE ORDER OF LD.CIT(A) BEFORE ITAT. VIDE ORDER DATED 25.04.2011 IN ITA PAGE 3 OF 12 I.T.A .NO.-205/DEL/2014 ASHWANI KUMAR JAIN VS ACIT NO.3733/DEL/2010, ITAT, DELHI SET ASIDE THE ISSUE R EGARDING LOANS CLAIMED TO HAVE BEEN TAKEN BY THE ASSESSEE, WITH TH E FILE OF THE AO, FOR RE-INVESTIGATION, WITH THE FOLLOWING OBSERVATIONS:- TAKING INTO CONSIDERATION ALL THESE FACTS, WE ARE OF THE OPINION THAT COMPLETE FACTS ARE NOT AVAILABLE ON THE RECORD. THE ASSESSE E HAS SUBMITTED DURING THE COURSE OF HEARING THAT HE UNDERTAKES TO PRODUCE ALL THE CREDITORS BEFORE THE AO. ON DUE CONSIDERATION OF HIS UNDERTAKING AND TH E OTHER MATERIAL AVAILABLE ON RECORD, WE ARE OF THE OPINION THAT ENDS OF JUSTI CE WOULD MEET IF WE SET ASIDE THIS ISSUE TO THE FILE OF THE AO FOR REINVEST IGATION. IT IS NEEDLESS TO SAY THAT OUR OBSERVATION WILL NOT IMPAIR OR INJURE THE CASE OF AO. THEY WILL NOT CAUSE ANY PREJUDICE TO THE DEFENCE/EXPLANATION OF T HE ASSESSEE. WE DIRECT THE ASSESSEE TO PRODUCE ALL THE CREDITORS BEFORE TH E AO. ASSESSEE SHALL NOT TAKE MORE THAN TWO OPPORTUNITIES FOR PRODUCING THE CREDITORS. THE AO MAY ISSUE SUMMONS TO THOSE CREDITORS FOR HELPING THE AS SESSEE TO PRODUCE THEM BEFORE HIM. WITH THE ABOVE OBSERVATION, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. (B.2) THE AO PASSED A FRESH ASSESSMENT ORDER ON 08. 05.2012 U/S 254/143(3) OF THE ACT WHEREIN TOTAL ADDITION AMOUN TING TO RS.41,61,305/- WAS MADE U/S 68 OF THE ACT ON ACCOUN T OF UNEXPLAINED LOANS CLAIMED TO HAVE BEEN TAKEN BY THE ASSESSEE. THE RELEVANT PORTION OF THE ASSESSMENT ORDER IS REPRODUCED AS UN DER:- 4. ACCORDINGLY, A LETTER DATED 06.07.2011 WAS ISSU ED TO THE ASSESSEE REQUIRING HIM TO PRODUCE THE PERSONS/ FILE DOCUMENT ARY EVIDENCES TO PROVE THE GENUINENESS OF THE AMOUNTS TAKEN BY THE ASSESSEE AN D THE CREDITWORTHINESS OF THE CREDITORS. IN RESPONSE, THE ASSESSEE ALONG WITH SHRI SANDEEP JAIN, AR APPEARED. HE PRODUCED SHRI HARBANS LAL THEKEDAR, SM T. HARBIR KAUR NARULA, SMT. SIMRAN KAUR SETHI AND SMT. SANDHIYA JAIN. THEI R STATEMENT WERE RECORDED WHICH ARE PLACED ON RECORD. THE ASSESSEE HAS ALSO FILED AFFIDAVITS OF SHRI HARB ANS LAL. SMT. HARBIR KAUR NARULA, SMT. SIMRAN KAUR SETHI AND SMT. SANDHY A JAIN. THE SAME HAVE BEEN LOOKED INTO AND FOUND NOT ACCEPTABLE AS THE FA CTS RECORDED THEREIN AND THOSE IN THEIR STATEMENTS ARE CONTRADICTORY AND WIT HOUT SUPPORTING EVIDENCES. THIS POSITIONS BECOMES CLEAR FROM THE FACTS OF THEI R STATEMENTS WHICH HAVE BEEN DISCUSSED HEREUNDER. ALS O THIS POSITION OF LAW IS SETTLED BY THE ORDER OF THE HON'BLE ALLAHABAD HIGH COURT (JURISDICTIONAL HIGH PAGE 4 OF 12 I.T.A .NO.-205/DEL/2014 ASHWANI KUMAR JAIN VS ACIT COURT) IN THE CASE OF SRI KRISHNA VS.CIT, 142 ITR 6 18. THE RELEVANT PORTION OF THE JUDGMENT IS REPRODUCED AS UNDER: IT IS NEITHER A RULE OF PRUDENCE NOR A RULE OF LA W THAT THE STATEMENTS MADE IN AN AFFIDAVIT WHICH REMAINS UNCONTROVERTED, MUST INVARIABLY BE ACCEPTED AS TRUE AND RELIABLE. ORDINARILY, IN THE A BSENCE OF DENIAL, THE STATEMENTS MAY BE ACCEPTED AS TRUE BUT IF THERE ARE CIRCUMSTANCES WHICH SUGGEST THAT THE STATEMENTS ON AFFIDAVIT SHOU LD NOT BE ACCEPTED AS TRUE, THE ABSENCE OF DENIAL BY THE OTHER SIDE, W OULD NOT BY ITSELF BE SUFFICIENT TO CLOTHE THE STATEMENTS ON AFFIDAVIT WI TH TRUTHFULNESS AND RELIABILITY. AGAIN A NOTICE U/S 142(1) DATED 09.04.2012 WAS ISSU ED TO THE ASSESSEE FOR COMPLIANCE ON 17.04.2012 AND FILED CERTAIN DOCUMENT S AND THE CASE WAS DISCUSSED. ON GOING THROUGH THE STATEMENTS OF THE C REDITORS AND OTHER DOCUMENTS FILED BY THE ASSESSEE, THE FACTS OF THE C ASE ARE DISCUSSED AS UNDER: SH. HARBANS LAL - 30 LAKH OUT OF THE FOUR CREDITORS UNDER CONSIDERATION, SH. HARBANS LAL IS THE CREDITOR WHOSE STATEMENTS HAVE ALREADY BEEN RECORDE D BY THE AO DURING THE COURSE OF REMAND PROCEEDINGS BUT DUE TO NON-COMPLIA NCES ON THE GIVEN DATES BY SH. HARBANS LAL, THIS STATEMENT COULD NOT BECOME A PART OF THE FIRST REMAND REPORT. IT IS WORTH MENTIONING THAT DURING T HE COURSE OF REMAND PROCEEDINGS, A SUMMON NOTICE DATED 15/06/10 U/S 131 OF THE IT ACT HAD BEEN ISSUED TO SH. HARBANS LAL AND THE DATE OF COMP LIANCE WAS FIXED FOR 21/06/10. BUT NO ONE APPEARED ON THE DATE. ONLY A L ETTER HAD BEEN RECEIVED BY THE A.O. ON 21/06/10 WHICH IS PLACED ON RECORD, IN WHICH IT WAS MENTIONED THAT SH. HARBANS LAL THEKEDAR WAS OUT OF STATION AND WOULD ATTEND THE OFFICE ON 25/06/10. BUT ON 25/06/10 ALSO , NO ONE APPEARED. ALSO A LETTER WAS RECEIVED ON 13/07/10 BY THE A.O. FROM CIT(A) THAT IF REMAND REPORT IS NOT SENT TO HIM BY 14/07/10, THE C ASE WILL BE DECIDED AS THE ORDER NEEDS TO BE PASSED EXPEDITIOUSLY IN TERMS OF THE DIRECTIONS OF THE HON'BLE ALLAHABAD HIGH COURT. HENCE REMAND REPORT WAS SENT ON 16/07/10. SH. HARBANS LAL HAD APPEARED FOR HEARING ON 16/07/1 0, ALTHOUGH HE DID NOT APPEAR BEFORE THE A.O. ON THE GIVEN DATES. FOR THE SAKE OF NATURAL JUSTICE HIS STATEMENT WAS RECORDED ON OATH AND PLAC ED ON RECORD. IN CONTINUATION TO THE REMAND REPORT DATED 16/07/10 AC CORDING TO THE STATEMENT RECORDED, THE A.O. SENT THE REMAND REPORT AGAIN ON 19/07/L0. BUT LD. CIT(A) HAD ALREADY PASSED THE ORDER BEFORE THIS REPORT. SO THE SUBSIDIARY REMAND REPORT WAS NOT CONSIDERED: DURING THE TIME OF APPEL LATE PROCEEDINGS BEFORE CIT(A) AND HON'BLE ITAT, THE ASSESSEE HAS STATED TH AT THE A.O. HAD ASKED SH. HARBANS LAL TO APPEAR ON 09/06/10 WHICH WAS INCORRE CT. IT WAS THE FIRST TIME, SH. HARBANS LAL MET THE A.O. WHEN HIS STATEME NT WAS RECORDED. NEVER HAD HE MET THE A.O. BEFORE THIS. FROM THE PERUSAL OF SH. HARBANS LAL'S FIRST STATEME NT RECORDED ON 16/07/10 AND SECOND STATEMENT RECORDED ON 11/07/11, IT IS CLEAR THAT SH. HARBANS LAL HAS CHANGED HIS STATEMENT. IN THE STATEMENT GIVEN ON 16/07/10; SH. HARBANS LAL HAD STATED THAT HE DID NOT MAINTAIN BOOKS OF ACCOUNTS ALTHOUGH IN H IS AFFIDAVIT HE HAD CONFIRMED THE BALANCE IN HIS BOOKS. HE ALSO ACCEPTE D THAT HE WAS NOT AWARE PAGE 5 OF 12 I.T.A .NO.-205/DEL/2014 ASHWANI KUMAR JAIN VS ACIT ABOUT THE FACTS WRITTEN IN THE AFFIDAVIT. WHEN ASKE D ABOUT THE AMOUNT OF SIXTY LAKHS RUPEES, HE EXPRESSED HIS IGNORANCE AND STATED THAT HE WAS NOT AWARE THAT IN WHICH FORM, WHETHER BY CHEQUE OR IN CASH, T HE MONEY HAD BEEN GIVEN TO THE ASSESSEE. ALSO HE ACCEPTED THAT THE MONEY WA S GIVEN BY HIS SON AND NOT BY HIM TO THE ASSESSEE. HE ALSO STATED THAT HE HAD SOLD LAND WORTH RS.60 LAKHS OUT OF WHICH HE HAD GIVEN RS.30 LAKHS TO SH. ASHWANI KR. JAIN (ASSESSEE) AND FROM REMAINING RS.30 LAKHS HE HAD PU RCHASED LAND IN NAWA SHAHAR, PUNJAB. WHEREAS IN THE LATER STATEMENT WHIC H HAD BEEN RECORDED DURING THE SET ASIDE PROCEEDINGS HE HAD GIVEN ENTIR ELY DIFFERENT STATEMENT. AS PER QUESTION NO.5 OF THE STATEMENT TAKEN ON 11/07/1 1; HE HAS STATED THAT HE HAD SOLD THE LAND JOINTLY WITH HIS BROTHER AND BORR OWED 4 LAKHS FROM HIM TO GIVE MONEY TO SH. ASHWANI KR. JAIN. IN THE EARLIER STATEMENT HE STATED THAT ALL THE MONETARY AFFAIRS ARE DONE BY HIS SON. IN THE LA TER STATEMENT HE HAD STATED THAT AT THAT TIME HE HIMSELF USED TO DO ALL THE WOR K AND NOW HIS SON DOES IT. FROM THE ABOVE TWO STATEMENTS IT IS CLEAR THAT SH. HARBANS LAL HAS GIVEN CONTRADICTORY STATEMENTS. RELEVANT PORTION OF HIS STATEMENT IS REPRODUCED AS UNDER: STATEMENT DATED 16/07/10 FROM THE ABOVE TWO STATEMENTS IT IS CLEAR THAT AT T HE TIME OF STATEMENT DATED 16/07/10 SH. HARBANS LAL WAS NOT ABLE TO REME MBER THAT THE AMOUNT GIVEN TO SH. ASHWANI KUMAR JAIN WAS WHETHER IN CASH OR BY CHEQUE BUT IT IS STRANGE THAT IN THE STATEMENT DATED 11/07/11, A YEA R LATER HE REMEMBERS THAT HE HAD MADE THE PAYMENT IN CASH AND HE HAD BOR ROWED 4 LAKHS. THIS CLEARLY REVEALS THAT ALL THESE ARE HIS AFTER THOUGH TS BECAUSE THE STATEMENTS ARE CONTRADICTORY. THUS THE STATEMENT GIVEN CANNOT BE RELIED UPON. FROM THE ABOVE MENTIONED FACTS IT IS CLEAR THAT THE ASSESSEE HAS FAILED TO PROVE THE GENUINENESS OF THE TRANSACTIONS, HENCE AN AMOUNT OF RS.30 LAKHS IS DISALLOWED U/S 68. (ADDITION:RS.3000000) SMT. SIMRAN KAUR SETHI RS.287500/- AS PER THE ASSESSEE'S CLAIM DURING THE YEAR UNDER C ONSIDERATION THE ASSESSEE HAS RECEIVED RS.2,47,500/- ON 05-06-06 AND RS.40,000/- ON 28- 03-06 FROM SMT. SIMRAN KAUR SETHI. STATEMENT OF SMT . SIMRAN KAUR SETHI HAS BEEN TAKEN RELEVANT PORTION OF WHICH IS BEING REPRO DUCED HERE. . TO PROVE THE CREDITWORTHINESS OF SMT. SIMRAN KAUR S ETHI, THE ASSESSEE HAS GIVEN TWO SALE DEEDS FOR RS.6,17,400/- DATED 05 -06-06 (SHARE BEING OF SH. BALBIR SINGH, SH. ABHIJEET SINGH, SMT. RANI JAI N, SMT. HARBIR KAUR, SMT. SIMRAN SETHI) AND FOR RS.2,75,000/- DATED 15-11-06 (SHARE BEING OF SH. BALBIR SINGH, SH. ABHIJEET SINGH, SMT. RANI JAIN, S MT. HARBIR KAUR, SMT. SIMRAN SETHI). FROM THE STATEMENT GIVEN BY SMT. SIMRAN KAUR SETHI THAT SHE HAD GIVEN THE POA AND SHE WAS UNAWARE OF THE FACT ABOUT THE AMOUNT PAID TO SH. ASHWANI KUMAR JAIN AND NEITHER WAS SHE AWARE IN WHI CH FORM FROM THE PAYMENT WAS MADE, EITHER BY CHEQUE OR IN CASH. THE POA WAS IN THE NAME OF HER SON INSTEAD OF BEING IN THE NAME OF HER HUSBAND AS PER HER STATEMENT. PAGE 6 OF 12 I.T.A .NO.-205/DEL/2014 ASHWANI KUMAR JAIN VS ACIT THE SALE DEED DATED 15-06-06 HAS NO RELEVANCE SINCE THE AMOUNTS CREDITED IN THE ASSESSEE'S ACCOUNTS ARE BEFORE THIS DATE. IN TH E LIGHT OF THESE FACTS, THE STATEMENT OF SMT. SIMRAN KAUR SETHI CANNOT BE RELIE D UPON. HENCE THE ASSESSEE HAS FAILED TO PROVE THE CREDITWORTHINESS O F SMT. SIMRAN KAUR SETHI AND GENUINENESS OF THE TRANSACTION. SO AN ADDITION OF RS.2,87,500/- IS BEING MADE U/S 68. (ADDITION: RS.287500) SMT. HARBIR KAUR NARULA RS.514505/- AS PER THE ASSESSEE'S CLAIM DURING THE YEAR UNDER C ONSIDERATION RS.5,14,505/- HAS BEEN RECEIVED FROM SMT. HARBIR KA UR. STATEMENT OF SMT. HARBIR KAUR HAS BEEN TAKEN AND PLACED ON RECORD. RE LEVANT PORTION IS REPRODUCED AS UNDER: TO PROVE THE CREDITWORTHINESS OF SMT. HARBIR KAUR T HE ASSESSEE HAS PROVIDED TWO SALE DEEDS OF LAND DATED 05-06-06 FOR RS.6,17,400/- AND RS.6,83,325/-. THE LANDS-WERE SOLD ON 05-06-06 WHIL E ENTRIES IN THE ACCOUNTS ARE SHOWN ON 05-06-06 AND 15-11-06. BESIDES, TOTAL SALE PROCEEDS AMOUNTED TO RS.683325/- WHILE THE AMOUNT SHOWN CREDITED IS R S.514505 (RS.372631 + RS.141874). AS PER STATEMENT GIVEN BY SMT. HARBIR K AUR; THE POA WAS IN THE NAME OF HER BROTHER SH. BALBIR SINGH BUT AS PER POA FILED BY THE ASSESSEE, THE POA IS IN THE NAME OF ABHIJEET SINGH AND NOT IN THE NAME OF SH. BALBIR SINGH. IN THE LIGHT OF THESE FACTS, THE STATEMENT O F SMT. HARBIR KAUR CANNOT BE RELIED UPON. HENCE THE ASSESSEE HAS FAILED TO PROVE THE CREDITWORTHINESS OF SMT. HARBIR KAUR AND GENUINENESS OF THE TRANSACTION . SO AN ADDITION OF RS.5,14,505/- IS BEING MADE U/S 68. SMT.SANDHYA JAIN RS.359300/- DURING THE YEAR UNDER CONSIDERATION A CREDIT BALANC E OF RS.3,59,300/- WAS SHOWN AGAINST SMT. SANDHYA JAIN CLAIMED AS TRANSACT IONS OF SHARES. THE STATEMENT OF SMT. SANDHYA JAIN HAS BEEN RECORDED AN D PLACED ON RECORD. AS PER HER STATEMENT SHE HAS SOLD THE SHARES OF SURYA LINK LTD. CO. TO SH. ASHWANI KUMAR JAIN AMOUNTING TO RS.3,59,300/- WHICH SHE HAS RECEIVED BACK IN F.Y. 07-08 BUT SHE HAS FAILED TO PRODUCE AN Y DOCUMENTARY EVIDENCES IN SUPPORT OF HER CONTENTION. ONLY COPY OF ACCOUNT OF SMT. SANDHYA JAIN HAS BEEN FILED SHOWING RECEIVING OF A CHEQUE FOR RS.3,5 9,300/- ONLY RECEIVING OF A CHEQUE AFTER ONE AND A HALF YEAR DOES NOT PROVE GEN UINENESS OF LIABILITY EXISTING ON 31-03-07. HENCE THE AMOUNT OF RS.3,59,3 00/- IS BEING DISALLOWED U/S 68 AS THE ASSESSEE HAS FAILED TO PROVE THE GENU INENESS OF THE TRANSACTION. (ADDITION RS.359300/-) (B.3) THE ASSESSEE FILED APPEAL BEFORE THE LD. CIT( A) AGAINST THE AFORESAID ASSESSMENT ORDER DATED 08.05.2012. VIDE ORDER DATED 29.10.2013, LD.CIT(A) DELETED THE ADDITION OF RS.3, 59,300/- IN RESPECT PAGE 7 OF 12 I.T.A .NO.-205/DEL/2014 ASHWANI KUMAR JAIN VS ACIT OF LOAN CLAIMED TO HAVE BEEN TAKEN BY THE ASSESSEE FROM SMT. SANDHYA JAIN, AND LD. CIT(A) CONFIRMED THE REMAINING ADDIT IONS MADE BY THE AO IN RESPECT OF LOANS CLAIMED TO HAVE BEEN TAKEN S H. HARVANSH LAL, HARBEER KAUR NARULA & SMT. SIMRAN KAUR SETHI. THE RELEVANT PORTION OF THE ORDER OF THE LD.CIT(A) IS REPRODUCED AS UNDE R:- 3.2. IN THE ASSESSMENT ORDER, IN RESPECT OF SHRI H ARBANS LAL, THE AO HAS STATED THAT THE STATEMENT OF THIS PARTY HAD ALSO BE EN RECORDED DURING THE REMAND PROCEEDINGS OF THE ORIGINAL FIRST APPELLATE PROCEEDINGS. IT HAS BEEN ALLEGED BY THE AO THAT THE PARTY HAD CHANGED HIS ST AND IN THE SECOND STATEMENT RECORDED DURING THE REASSESSMENT PROCEEDI NGS WHEN SEEN ALONG WITH THE FIRST STATEMENT RECORDED ON 16.07.2010. TH E AO HAS STATED THAT ORIGINALLY, THE INDIVIDUAL HAD STATED THAT THE LOAN OF RS 30 LAKHS WAS SOURCED FROM SALE OF AGRICULTURAL LAND, THREE YEARS EARLIE R, FOR RS 60 LAKHS AND INFORMATION REGARDING THE MODE BY WHICH SUCH AMOUNT WAS RECEIVED BY HIM AND ADVANCED TO THE ASSESSEE WAS KNOWN TO HIS SON. HOWEVER, IN THE STATEMENT RECORDED DURING THE ASSESSMENT PROCEEDING S, HE STATED THAT HE HAD SOLD THE LAND, JOINTLY OWNED WITH HIS BROTHER, FOR RS 50 LAKHS AND HAD ADVANCED THE MONEY TO THE ASSESSEE OUT OF HIS SHARE OF THE SALE PROCEEDS AND MAKING BORROWING OF RS 4 LAKHS FROM HIS BROTHER. TH EREFORE, THE AO CONSIDERED THE STATEMENTS CONTRADICTORY AND MADE AN ADDITION OF RS 30 LAKHS TO THE TOTAL INCOME OF THE ASSESSEE. DURING THE PRE SENT PROCEEDINGS, IT HAS BEEN ARGUED THAT THE SAID PARTY HAD MADE THE ADVANC ED OUT OF THE SALE PROCEEDS OF AGRICULTURAL LAND FOR RS 28,70,000 AND RS 22,20,000, AND THE SALE DEEDS HAD BEEN FILED DURING THE REASSESSMENT P ROCEEDINGS. DOCUMENTARY EVIDENCE HAD FULLY ESTABLISHED THE GENU INENESS OF THE FINANCIAL TRANSACTION BETWEEN THE ASSESSEE AND THE PARTY AND SUCH DOCUMENTARY EVIDENCES HAVE NOT BEEN FOUND TO BE FALSE. AN AFFID AVIT CONFIRMING THE LOAN TRANSACTION HAD ALSO BEEN FILED DURING THE RE-ASSES SMENT PROCEEDINGS. 3.3. IN RESPECT OF SMT SIMRAN KAUR SETHI (FROM WHOM THE ASSESSEE HAD CLAIMED TO HAVE RECEIVED RS 2,75,000 ON 05.06.06 AN D RS 40,000 ON 28.03.06), THE AO HAS MENTIONED THAT IN THE STATEME NT RECORDED, SHE HAD STATED THAT SHE WAS NOT FULLY AWARE OF THE TRANSACT ION WITH THE ASSESSEE. FURTHER. SHE HAD SOME AGRICULTURAL LAND AND THE POW ER OF ATTORNEY FOR THE SALE OF WHICH HAD BEEN GIVEN TO HER HUSBAND. HER HUSBAND HAD SOLD THE LAND AND HAD ADVANCED THE MONEY TO THE ASSESSEE. SHE WAS UNA WARE OF ANY INTEREST ON SUCH ADVANCE. THE MODE BY WHICH THE ADVANCE WAS MADE WAS KNOWN EITHER TO HER HUSBAND OR TO THE ACCOUNTANT. TWO SAL E DEEDS OF RS.6,17,400 DATED OS. 06. 06 (IN WHICH THERE WERE 5 OTHER CO-OW NERS) AND OF RS 2,75,000 DATED 15.11.2006 (IN WHICH THERE WERE 5 OTHER CO-OW NERS) HAD BEEN FILED. THE AO DID NOT ACCEPT THE GENUINENESS OF THE ADVANCE IN VIEW OF THE FACT THAT THE PARTY WAS VAGUE ABOUT THE DETAILS OF THE TRANSACTIO N. THE AO HAS ALSO STATED PAGE 8 OF 12 I.T.A .NO.-205/DEL/2014 ASHWANI KUMAR JAIN VS ACIT THAT THE DATE OF THE SALE DEED OF 15.06.06 IS SUBSE QUENT TO THE CREDIT OF THE SUM TO THE ACCOUNT OF THE ASSESSEE. THIS STATEMENT APPEARS TO BE INCORRECT AS THE SALE DEED IS DATED 05.06.06 AND NOT 15.06.06. A CCORDING TO THE ASSESSEE, THE CREDIT TO THE CASHBOOK OF THE ASSESSEE IS ON 05 .06.06, THE DATE OF THE SALE DEED. IT IS CLARIFIED THAT THE CREDIT IS NOT TO THE BANK ACCOUNT OF THE ASSESSEE BUT TO HIS CASHBOOK. 3.4. IN RESPECT OF SMT HARBIR KAUR NARULA (FROM WHO M THE ASSESSEE HAS CLAIMED TO HAVE RECEIVED RS 5,14,500), IT WAS CLAIM ED THAT THE AMOUNTS WERE SOURCED FROM SALE OF LAND MADE BY TWO SALE DEEDS DA TED 05.06.2006. IN RESPONSE TO A QUESTION POSED TO THIS INDIVIDUAL DUR ING THE STATEMENT RECORDED AT THE TIME OF RE ASSESSMENT PROCEEDINGS WHEREIN IT WAS STATED THAT THE LAND WAS SOLD BY HER BROTHER AND THE AMOUNT WAS ADVANCED TO THE ASSESSEE BY HIM. SHE STATED THAT SHE DOES NOT HAVE MUCH KNOWLED GE ABOUT THE TRANSACTION AND THAT NO INTEREST HAD BEEN CHARGED O N THE ADVANCE. ACCORDING TO THE AO, THE POWER OF ATTORNEY OF THE SAID INDIVI DUAL WAS NOT IN THE NAME OF HER BROTHER BUT IN SOME OTHER NAME. THEREFORE, THE PARTY HAD FAILED TO PROVE THE GENUINENESS OF THE TRANSACTION AND HER CREDITWO RTHINESS. 3.5. AS REGARDS A CREDIT BALANCE IN THE NAME OF SM T. SANDHYA JAIN OF RS 3,59,300, IT WAS CLAIMED THAT THIS RELATED TO A TRA NSACTION IN SHARES OF SURYA ZINC LTD. STATEMENT OF THE SAID INDIVIDUAL WAS RECO RDED ACCORDING TO WHICH, SHE HAD SOLD THE SHARES TO THE ASSESSEE AND THE AMO UNT WAS PAID TO HER BY THE ASSESSEE IN THE SUBSEQUENT YEAR. THE AO NOTED T HAT THE INDIVIDUAL HAD FAILED TO PRODUCE ANY DOCUMENTARY EVIDENCE IN SUPPO RT OF HER CONTENTION AND ONLY A COPY OF HER ACCOUNT HAS BEEN FURNISHED WHERE IN A CHEQUE OF AN AMOUNT EQUIVALENT TO THE STATED CONSIDERATION HAS BEEN CRE DITED. THEREFORE, THE BALANCE WAS TREATED AS UNEXPLAINED CREDIT AND ADDED TO THE TOTAL INCOME OF THE ASSESSEE. 3.6. INITIAL SET OF SUBMISSIONS DATED 04.01.2013 WE RE FILED BY THE ASSESSEE HIMSELF. SUBSEQUENTLY SHRI SANJAY MALIK, ADVOCATE A TTENDED THE PROCEEDINGS AND FILED A FRESH SET OF SUBMISSIONS ALONG WITH A L ETTER DATED 19.06.2013. AS REGARDS THE LOANS CLAIMED TO HAVE BEEN RECEIVED FRO M SHRI HARBANS LAL, IT WAS STATED THAT THE DOCUMENTARY EVIDENCES (SALE DEE D OF LAND AND AFFIDAVIT OF THE PARTY CONFIRMING THE TRANSACTION) FULLY ESTABLI SHED THE GENUINENESS OF THE FINANCIAL TRANSACTION WITH THE ASSESSEE. SUCH EVIDE NCES HAVE NOT BEEN PROVED TO BE FALSE AND NO EVIDENCE IN REBUTTAL HAS BEEN PL ACED ON RECORD BY THE AO. COPY OF THE AFFIDAVIT HAS BEEN FILED WHICH STATES T HAT THE PERSON WAS AN AGRICULTURIST AND WAS UNEDUCATED AND HAD GIVEN THE LOAN TO THE ASSESSEE OUT OF THE SALE PROCEEDS OF TWO PROPERTIES. COPIES OF T HE SALE DEEDS HAVE ALSO BEEN GIVEN. INSOFAR AS THE LOANS CLAIMED TO HAVE BE EN RECEIVED FROM SMT HARBIR KAUR NARULA IS CONCERNED, IT WAS POINTED OUT THAT THE PERSON WAS A REGULAR INCOME TAX ASSESSEE, HAD CONFIRMED THE FINA NCIAL TRANSACTION IN AN AFFIDAVIT, HAD FURNISHED COPY OF THE SALE DEEDS FRO M WHICH THE AMOUNT ADVANCED HAD BEEN SOURCED AND HAD THEREFORE PROVED FINANCIAL WORTH AS ALSO THE GENUINENESS OF THE TRANSACTION. COPY OF THE RET URN FILED BY HER ALONG WITH COMPUTATION OF INCOME FOR THE A.Y. 2007 - 08 HAS BE EN FILED WHEREIN IT IS SEEN THAT SHE HAS CLAIMED INCOME FROM STITCHING AND EMBR OIDERY. COPIES OF THE SALE PAGE 9 OF 12 I.T.A .NO.-205/DEL/2014 ASHWANI KUMAR JAIN VS ACIT DEEDS DATED 03.06.2006 AND 15.11.2006 FOR THE SALE OF JOINTLY OWNED LAND HAVE ALSO BEEN FURNISHED. THE DETAILS IN RESPECT OF THE LOAN FROM SMT SIMRAN SETHI SUBMITTED DURING THE APPELLATE PROCEEDINGS IS SIMILAR TO THE DETAILS SUBMITTED IN THE CASE OF SMT HARBIR KAUR. INSOFAR A S SMT SANDHYA JAIN IS CONCERNED, IT HAS BEEN STATED THAT SHE WAS REGULARL Y ASSESSED TO INCOME TAX AND HAD ACTUALLY OWNED THE SHARES WHICH WERE TRANSF ERRED TO THE ASSESSEE. SHE HAS FILED AN AFFIDAVIT CONFIRMING THE TRANSACTI ON. HER BALANCE SHEET AS ON 31.03.2007 SHOWS VARIOUS INVESTMENTS INCLUDING THE CONSIDERATION OF SHARES RECEIVABLE FROM THE ASSESSEE. A CERTIFICATE OF THE AUDITOR OF THE COMPANY WHOSE SHARES HAD BEEN TRANSFERRED HAS ALSO BEEN FIL ED, WHICH SHOWS THAT 35,930 SHARES OF THE SAID COMPANY WERE IN THE NAME OF THIS INDIVIDUAL AS ON 31.03.2006 AND IN THE NAME OF ASSESSEE AS ON 31.03. 2007, THEREBY MEANING THAT THE SHARES HAD BEEN TRANSFERRED TO THE ASSESSE E DURING THE YEAR UNDER CONSIDERATION. COPY OF THE HANK ACCOUNT OF THE SAID INDIVIDUAL HAS ALSO BEEN FILED WHICH SHOWS THE CREDIT OF AN EQUIVALENT AMOUN T ON 10.07.2008, PURPORTEDLY TRANSFERRED BY THE ASSESSEE. A REMAND R EPORT WAS CALLED FROM THE AO AND THE SAME HAS BEEN FURNISHED BY THE LETTER DA TED 29.08.2013. THE REMAND REPORT BASICALLY RECOUNTS THE VARIOUS CONTEN TION OF THE AO IN THE ASSESSMENT ORDER. 3.7. THE RELEVANT FACTS OF THE CASE HAVE BEEN CONSI DERED. AS REGARDS THE LOANS FROM THE THREE PARTIES, IT IS NOTED THAT ALL THESE LOANS ARC IN CASH, ARE WITHOUT INTEREST AND NO EVIDENCE HAS BEEN BROUGHT ON RECORD TO SHOW THAT SUCH LOANS HAVE BEEN REPAID TILL DATE. INSOFAR AS T HE LOAN FROM SHRI HARBANS LAL S CONCERNED, IT IS NOTED THAT THIS PARTY IS NOT RELATED TO THE ASSESSEE AND IS AN AGRICULTURIST, WHO DOES NOT APPEAR TO HAVE AN Y OTHER SOURCE OF INCOME. THE PERSON DOES NOT APPEAR TO HAVE BEEN ASSESSED TO INCOME TAX OR APPEAR TO HAVE FILED ANY RETURN OF INCOME SHOWING THE SALE TR ANSACTION OF LAND NOTWITHSTANDING THAT THE SALE DEEDS CATEGORICALLY S TATES THAT THE SOLD LAND IS LOCATED WITHIN AND OUTSIDE THE MUNICIPAL LIMITS OF THE CITY OF MEERUT. (THE PRESENT AO MAY PLEASE NOTE THIS ASPECT AND INTIMATE TO THE AO CONCERNED HAVING JURISDICTION OVER THE CASE OF THIS PARTY TO TAKE APPROPRIATE ACTION). BE AS IT MAY, IT IS INCONCEIVABLE THAT A PERSON OF MEA GRE MEANS, WHO HAS HAD WINDFALL PROFITS ON SALE OF ANCESTRAL LAND, WOULD I NVEST ALL SUCH PROFITS IN CASH WITH AN UNRELATED PERSON WHO IS NOT GIVING ANY RETU RN ON THE SAME (AS APPARENTLY THE LOANS ARE INTEREST-FREE), HAS NOT MA DE ANY DOCUMENTATION IN RESPECT OF A SUBSTANTIAL SUM OF RS 30 LAKHS GIVEN A S LOAN AND EVEN THE PERIOD FOR WHICH THE LOAN HAS BEEN GIVEN HAS NOT BEEN SPEC IFIED. EVEN 5 YEARS AFTER SUCH LOAN, IT REMAINS OUTSTANDING AND APPARENTLY TH E PARTY HAS NOT TAKEN ANY STEPS FOR THE RECOVERY OF SUCH LOAN. BESIDES, THE A SSESSEE HAS NOT PRODUCED ANY BANK ACCOUNT IN WHICH SUCH ADVANCE HAS BEEN DEP OSITED NOR HAS HE SPECIFIED THE PURPOSE FOR WHICH SUCH LOANS HAD BEEN RAISED. UNDER THE CIRCUMSTANCES DISCUSSED ABOVE AND IN THE ABSENCE OF AN IOTA OF INDEPENDENTLY VERIFIABLE EVIDENCE, THE GENUINENESS OF THE TRANSACTION CANNOT BE SAID TO HAVE BEEN PROVED. AS REGARDS THE LOANS F ROM THE TWO LADIES, N THE STATEMENT RECORDED DURING THE RE-ASSESSMENT PROCEED INGS, THEY DO NOT APPEAR TO HAVE PROPER KNOWLEDGE OF THE TRANSACTION WITH TH E ASSESSEE. WHILE IT DOES APPEAR THAT THEY ARE RELATED TO THE ASSESSEE, IT IS NOTED THAT THE LOAN HAS BEEN GIVEN IN CASH AND THE ASSESSEE HAS NOT STATED HOW SUCH CASH HAS BEEN PAGE 10 OF 12 I.T.A .NO.-205/DEL/2014 ASHWANI KUMAR JAIN VS ACIT UTILISED/DEPOSITED IN ANY BANK ACCOUNT. THEREFORE, IN THESE CASES ALSO, THE GENUINENESS OF THE TRANSACTIONS ARE NOT PROVED. IT IS ALSO NOTED THAT EVEN IF SUCH LOANS ARE TREATED AS GENUINE, THESE HAVE BEEN RECEIVED IN VIOLATION OF THE PROVISIONS OF SECTION 269SS OF THE ACT AND IN CASE THESE ARE HELD TO BE GENUINE AT ANY LATER STAGE, THE RELEVANT PENAL PROV ISIONS FOR SUCH VIOLATION WILL BE ATTRACTED. SUBJECT TO THIS REMARK, THE LOANS FRO M THE AFORESAID THREE PARTIES ARE TREATED AS NONGENUINE AND THE RESULTANT ADDITIO N TO THE TOTAL INCOME IS CONFIRMED. AS REGARDS THE CREDIT BALANCE IN THE NAM E OF SMT SANDHYA JAIN IS CONCERNED, THE CERTIFICATE OF THE AUDITOR OF SURYA ZINC LTD AND THE COPY OF THE BANK ACCOUNT OF THE INDIVIDUAL SHOWING RECEIPT OF M ONEY FOR THE SALE OF SHARES IN THE SUBSEQUENT YEAR HAVE BEEN FILED ON THE REQUI REMENT OF THIS OFFICE. CONSIDERING THESE EVIDENCES, THE ADDITION MADE IS D IRECTED TO BE DELETED. (B.4) THE PRESENT APPEAL BEFORE US HAS BEEN FILED B Y THE ASSESSEE AGAINST THE AFORESAID ORDER DATED 29.10.2013 OF LD. CIT(A). ALL THE GROUNDS OF APPEAL TAKEN BY THE APPELLANT IN THIS AP PEAL ARE BEING TAKEN UP TOGETHER FOR THE SAKE OF CONVENIENCE. THE SE GROUNDS HAVE BEEN TAKEN AGAINST ADDITIONS CONFIRMED BY THE LD.CI T(A) IN THE IMPUGNED ORDER. IN THE COURSE OF APPELLATE PROCEED INGS IN ITAT, THE ASSESSEE FILED A PAPER BOOK CONTAINING 50 PAGES WHI CH INCLUDED THE FOLLOWING WRITTEN SUBMISSIONS:- THE BRIEF FACTS OF THE CASE WAS THAT THE A.O. HAS MADE ADDITION U/S 68 WHICH IS CONFIRMED BY THE CIT(A IN PART. HOWEVER, HE CONFIRMED THE ADDITION ON ACCOUNT OF THAT THE ASSESSEE FAILS TO DISCHARGE TO PROVE GENUINENESS OF TRANSACTION/CREDITWORTHINESS OF THE TRANSACTION. DURING THE ASSESSMENT PROCEEDING, THE A.O. HAS ASK ED TO PRODUCE SMT. SIMRAN KAUR SETHI AND SMT. HARBIR KAUR NARULA. BOT H WERE PRODUCED BEFORE A.O. ON 11.07.2011. THE A.O HAS RECORDED STATEMENT OF BOTH THE PERSONS AND ALSO FURNISHED AN AFFIDAVIT BEFORE A.O. AND ADMITTE D THAT THEY HAVE GIVEN LOAN FROM SALE OF AGRICULTURE LAND, THE NECESSARY E VIDENCE OF THE SALE OF THE LAND ARE FURNISHED BY THE ASSESSEE IN THE PAPER-BOO K ON PAGE NO.17 TO 36 AND 37 TO 50. THEREFORE, THE BURDEN LIE UPON THE A SSESSEE WAS DISCHARGED. (B.5) AT THE TIME OF HEARING BEFORE US, LD. COUNSEL FOR THE ASSESSEE RELIED ON THE WRITTEN SUBMISSIONS AND THE PAPER BOO K. HE ALSO MADE PAGE 11 OF 12 I.T.A .NO.-205/DEL/2014 ASHWANI KUMAR JAIN VS ACIT ORAL SUBMISSIONS WHEREIN HE HIGHLIGHTED THE WRITTEN SUBMISSIONS AND DREW OUR ATTENTION TO PAPER BOOK. LD. DEPARTMENTAL REPRESENTATIVE RELIED ON THE ORDERS OF THE LD.CIT(A) AND THE AO. (C) WE HAVE HEARD BOTH SIDES PATIENTLY. WE HAVE AL SO PERUSED THE MATERIALS ON RECORD. WE FIND THAT THAT LD.CIT(A) H AS ALREADY ALLOWED PARTIAL RELIEF TO THE ASSESSEE BY DELETING THE ADDI TION MADE BY THE AO IN RESPECT OF LOAN CLAIMED TO HAVE BEEN RECEIVED BY THE ASSESSEE FROM SMT. SANDHYA JAIN. IN RESPECT OF THE REMAINING ADD ITIONS CONFIRMED BY THE LD.CIT(A), WE ARE OF THE VIEW THAT THE ORDER OF THE LD.CIT(A) IS FAIR AND REASONABLE HAVING REGARD TO THE FACTS AND CIRCUMSTANCES OF THE CASE. THE CONCLUSIONS ARRIVED AT BY THE LD.CIT (A) THAT GENUINENESS OF THE TRANSACTIONS WAS NOT PROVED IS A CORRECT ONE, CONSIDERING THE ANALYSIS OF FACTS IN PARAGRAPH 3.7 OF IMPUGNED ORDER DATED 29.10.2013 OF LD.CIT(A), WHICH HAS ALREADY BE EN REPRODUCED IN FORGOING PARAGRAPH (B.3) OF THIS ORDER. IT IS SETT LED POSITION IN RESPECT OF RELEVANT LAW U/S 68 OF I.T.ACT THAT ONUS IS ON T HE ASSESSEE TO PROVE NOT ONLY IDENTITY BUT ALSO CREDITWORTHINESS OF THE PERSONS; AND FURTHER TO PROVE ALSO THE GENUINENESS OF THE TRANSACTION. AS THE GENUINENESS OF THE TRANSACTIONS IS NOT PROVED, FOR WHICH BURDEN OF PROOF WAS ON THE ASSESSEE, THE APPELLANT HAS FAILED TO MAKE A CASE T O WARRANT ANY INTERFERENCE WITH THE IMPUGNED ORDER OF LD.CIT(A). THE APPELLANT HAS PAGE 12 OF 12 I.T.A .NO.-205/DEL/2014 ASHWANI KUMAR JAIN VS ACIT FAILED TO PROVE THAT THE IMPUGNED ORDER OF LD.CIT(A ) IS ERRONEOUS OR UNREASONABLE OR UNJUST IN LAW UNDER FACTS AND CIRCU MSTANCES OF THE CASE. THEREFORE, WE DECLINE TO INTERFERE WITH THE IMPUGNED ORDER OF LD.CIT(A) AND DISMISS ALL THE GROUNDS OF APPEAL. T HE ADDITIONS CONFIRMED BY LD.CIT(A) IN IMPUGNED ORDER ARE THUS H EREBY SUSTAINED. (D) FOR STATISTICAL PURPOSES, THIS APPEAL IS DISMIS SED. ORDER PRONOUNCED IN OPEN COURT ON 30.06.2017. SD/- SD/- (I.C.SUDHIR) (ANADEE NATH MISSHRA) JUDICIAL MEMBER A CCOUNTANT MEMBER DATE:- 30.06.2017 *AMIT KUMAR* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR, ITAT NEW DELHI