ITO, New Delhi V. M/s. Bansal Electronics, New Delhi

ITA 2195/DEL/2012

• Counselvise Citation: 219520114 RSA 2012
• Duration Of Justice: 1 year(s) 3 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-08-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 05-08-2013
• Assessment Year: 2001-2002
• Appeal Filed On: 08-05-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BHIM SINGH
• Assessee Lawyers: SUNIL ARORA; RUCHIKA JAIN CAS
• Keywords: Unexplained cash credit
• Section: 131

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL DELHI DELHI DELHI DELHI BENCH BENCH BENCH BENCH A AA A : NEW DELHI : NEW DELHI : NEW DELHI : NEW DELHI BEFORE SHRI G. BEFORE SHRI G. BEFORE SHRI G. BEFORE SHRI G.D.AGRAWAL, D.AGRAWAL, D.AGRAWAL, D.AGRAWAL, VICE PRESIDENT AND VICE PRESIDENT AND VICE PRESIDENT AND VICE PRESIDENT AND SHRI SHRI SHRI SHRI A.D.JAIN A.D.JAIN A.D.JAIN A.D.JAIN, ,, , JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER ITA NO. ITA NO. ITA NO. ITA NO.2195/DEL/2012 2195/DEL/2012 2195/DEL/2012 2195/DEL/2012 ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR : : : : 2001 2001 2001 2001- -- -02 0202 02 INCOME TAX OFFICER, INCOME TAX OFFICER, INCOME TAX OFFICER, INCOME TAX OFFICER, WARD WARD WARD WARD- -- -25(2), 25(2), 25(2), 25(2), NEW DELHI. NEW DELHI. NEW DELHI. NEW DELHI. VS. VS. VS. VS. M/S BANSAL ELEC M/S BANSAL ELEC M/S BANSAL ELEC M/S BANSAL ELECTRONICS, TRONICS, TRONICS, TRONICS, BL BLBL BL- -- -43, SHALIMAR BAGH, 43, SHALIMAR BAGH, 43, SHALIMAR BAGH, 43, SHALIMAR BAGH, NEW DELHI NEW DELHI NEW DELHI NEW DELHI 110 088. 110 088. 110 088. 110 088. PAN : AAAFB9483E. PAN : AAAFB9483E. PAN : AAAFB9483E. PAN : AAAFB9483E. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI BHIM SINGH, SR.DR. RESPONDENT BY : SHRI SUNIL ARORA AND MS.RUCHIKA JAIN, CAS. ORDER ORDER ORDER ORDER PER G. PER G. PER G. PER G.D.AGRAWAL, D.AGRAWAL, D.AGRAWAL, D.AGRAWAL, VP VPVP VP : : : : THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF LEARNED CIT(A)-XVI, NEW DELHI DATED 19 TH DECEMBER, 2011 FOR THE AY 2001-02. 2. THE REVENUE HAS RAISED FOLLOWING GROUNDS:- 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE CIT(A) ERRED IN DELETING THE ADDITION OF RS.8,00,00 0/- MADE BY THE AO ON ACCOUNT OF BEING UNEXPLAINED CASH CRED IT. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE CIT(A) ERRED IN ACCEPTING SELF SERVING DOCUMENTS NO T CORROBORATED BY CROSS EXAMINATION OR PRODUCED BEFOR E THE AO. 3. SET ASIDE THE ORDER OF THE CIT(A) AND RESTORE TH E MATTER BACK TO THE AO TO RE EXAMINE FRESH EVIDENCES IN A HOLISTIC MANNER AND AS PER LAW. 3. WE HAVE HEARD BOTH THE SIDES AND PERUSED THE MAT ERIAL PLACED BEFORE US. THE ASSESSING OFFICER MADE THE ADDITION OF ` 8 LAKHS FOR ITA-2195/DEL/2012 2 UNEXPLAINED CASH CREDIT. LEARNED CIT(A) DELETED TH E SAME WITH THE FOLLOWING FINDING:- ON CAREFULLY CONSIDERATION OF THE FACTS OF THE CAS E, IT IS OBSERVED THAT THE AMOUNT OF RS.8,00,000/- IN QUESTI ON WAS RECEIVED BY THE APPELLANT FROM M/S CHARM INVESTMENT PVT.LTD. BY CHEQUE AND THAT THE SAME WAS AN INTERES T BEARING LOAN FROM THAT PARTY. THE LOAN WAS RETURNE D BY CHEQUE DATED 28.03.2001 BEFORE THE END OF THE FINAN CIAL YEAR RELEVANT TO THE ASSESSMENT YEAR UNDER APPEAL. NOT ONLY THIS, INTEREST WAS PAID BY CHEQUE TO THE COMPA NY M/S CHARM INVESTMENT PVT.LTD. AND TDS DULY DEDUCTED FRO M THE INTEREST WAS DEPOSITED BY THE APPELLANT INTO TH E GOVT. ACCOUNT AND REFLECTED IN THE TDS RETURN FILED BY TH E APPELLANT. M/S CHARM INVESTMENT PVT.LTD. IS A PART Y WHICH IS AN INCOME TAX ASSESSEE. IN THESE CIRCUMSTANCES, IT CAN BE SAID THAT THE APPELLANT HAD DISCHARGED THE ONUS ON IT IN REGARD TO THE IDENTITY OF THE LENDER, THE CAPACITY OF THE PARTY GIVING THE LOAN AS WELL AS THE GENUINENESS OF THE TRANSACTION. WHAT WAS REQUIRED OF THE AO BEFORE TR EATING THE AMOUNT AS UNEXPLAINED CASH CREDIT WAS TO BRING ON RECORD MATERIAL TO THE EFFECT THAT THE SAID LOAN RE CEIVED BY THE APPELLANT WAS ACTUALLY ITS UNDISCLOSED INCOME. THIS HAS NOT BEEN DONE BY THE AO. IT HAS BEEN POINTED OUT B Y THE AO THAT THERE WAS A CASH DEPOSIT IN THE BANK ACCOUN T OF M/S CHARM INVESTMENT PVT.LTD. PRIOR TO ISSUE OF CHE QUE OF RS.8,00,000/- TO THE APPELLANT. HOWEVER, AS CONTEN DED BY THE APPELLANT, THE ASSESSMENT OF THE LENDER HAS BEE N COMPLETED U/S 143(3)/147 WITHOUT ANY ADVERSE INFERE NCE BEING DRAWN ABOUT THE SAME. MOREOVER, THE APPELLAN T FURNISHED AFFIDAVIT OF ONE M/S JAYANT PAL WHO HAS S TATED THAT HE, ON BEHALF OF M/S CHARM INVTT PVT.LTD., FIR ST WITHDREW THE CASH AND THEN HANDED IT OVER TO A DIRE CTOR OF CHARM INVESTMENT PVT.LTD., WHO RE-DEPOSITED THE SAM E IN THE BANK ACCOUNT OF THE COMPANY. THE ASSESSING OFF ICER WAS GIVEN AN OPPORTUNITY TO COMMENT ON THE AFFIDAVITS/STATEMENTS OF SH. JAYANT PAL AS WELL AS THE DIRECTOR OF M/S CHARM INVESTMENT PVT.LTD. AT THE RE MAND STAGE BUT THE REMAND REPORT IS SILENT ABOUT THE SAM E I.E. WHY THIS VERSION ABOUT THE SOURCE OF CASH DEPOSIT I N THE BANK A/C OF M/S CHARM INVESTMENT PVT.LTD. CANNOT BE ACCEPTED. AFTER CONSIDERATION OF ALL THE EVIDENCES FILED BY T HE APPELLANT, IT CAN BE CONCLUDED THAT THE AMOUNT OF RS.8,00,000/- SHOWN TO HAVE BEEN RECEIVED BY IT FRO M M/S CHARM INVESTMENT PVT.LTD. CANNOT BE HELD TO BE ITS INCOME. ITA-2195/DEL/2012 3 THE ADDITION MADE BY THE AO IS DIRECTED TO BE DELET ED. GROUND NO.3 OF THE APPEAL IS ALLOWED. 4. AT THE TIME OF HEARING BEFORE US, LEARNED DR VEH EMENTLY CONTENDED THAT THE ASSESSEE WAS UNABLE TO DISCHARGE THE ONUS OF PROVING THE CASH CREDIT WHICH LAY UPON IT. THAT TH ERE WAS A CASH DEPOSIT PRIOR TO THE ISSUE OF CHEQUE OF ` 8 LAKHS TO THE ASSESSEE FIRM. THIS ALSO SUPPORTS THE CASE OF THE REVENUE THAT THE GENUINENESS OF THE CASH CREDIT AS WELL AS THE CREDITWORTHINESS OF THE CREDITOR IS NOT ESTABLISHED. IN SUPPORT OF THIS CONTENTION, THE LE ARNED DR RELIED UPON THE DECISION OF HON'BLE JURISDICTIONAL HIGH COURT I N THE CASE OF CIT VS. NOVA PROMOTERS AND FINLEASE (P) LTD. [2012] 342 I TR 169 (DELHI). 5. THE LEARNED COUNSEL FOR THE ASSESSEE, ON THE OTH ER HAND, RELIED UPON THE ORDER OF LEARNED CIT(A) AND STATED THAT TH E FACTS IN THE CASE OF THE ASSESSEE ARE ALTOGETHER DIFFERENT THAN THE F ACTS BEFORE THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF NO VA PROMOTERS AND FINLEASE (P) LTD. (SUPRA). THAT IN THE SAID CASE, THERE WAS AN INVESTMENT IN THE SHARE CAPITAL WHILE IN THE CASE O F THE ASSESSEE, IT IS A LOAN TAKEN AND WHICH WAS RETURNED DURING THE SAME F INANCIAL YEAR ALONG WITH INTEREST ON WHICH TDS WAS MADE. MOREOVE R, IN THIS CASE, THE MAIN REASON FOR NOT BELIEVING THE CREDIT OF ` 8 LAKHS WAS A CASH DEPOSIT IN THE BANK ACCOUNT OF THE CREDITOR PRIOR T O THE ISSUE OF THE CHEQUE BUT DURING REMAND PROCEEDINGS, THE CREDITOR HAD DULY EXPLAINED THE SOURCE OF CASH DEPOSIT. THE CREDITOR IS ASSESSED TO INCOME TAX AND, THEREFORE, HE STATED THAT THE FACTS OF THE ASSESSEES CASE ARE ALTOGETHER DIFFERENT THAN THE FACTS IN THE CASE OF NOVA PROMOTERS AND FINLEASE (P) LTD. (SUPRA). 6. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS AND PERUSED THE MATERIAL PLACED BEFORE US. WE FIND THAT IN THE CASE OF THE ASSESSEE, THE LOAN OF ` 8 LAKHS WAS TAKEN BY IT FROM M/S CHARM INVESTMENT PVT.LTD. BY CHEQUE. THE SAME WAS ALSO R ETURNED BY ITA-2195/DEL/2012 4 CHEQUE DURING THE SAME FINANCIAL YEAR. DURING THE PERIOD IN WHICH MONEY WAS UTILIZED BY THE ASSESSEE, INTEREST WAS PA ID, ON WHICH TDS WAS DEDUCTED. THE LENDER, VIZ., M/S CHARM INVESTME NT PVT.LTD. WAS ASSESSED TO INCOME TAX. ON THESE FACTS, IN OUR OPI NION, THE ASSESSEE HAS DULY DISCHARGED THE INITIAL ONUS WHICH LAY UPON IT TO PROVE THE CASH CREDIT. THIS VIEW OF OURS IS SUPPORTED BY THE DECI SION OF HONBLE APEX COURT IN THE CASE OF CIT, ORISSA VS. ORISSA CORPORA TION P.LTD. [1986] 159 ITR 78, WHEREIN THEIR LORDSHIPS HELD AS UNDER: - THAT IN THIS CASE THE RESPONDENT HAD GIVEN THE NAM ES AND ADDRESSES OF THE ALLEGED CREDITORS. IT WAS IN THE KNOWLEDGE OF THE REVENUE THAT THE SAID CREDITORS WERE INCOME- TAX ASSESSEES. THEIR INDEX NUMBERS WERE IN THE FILE OF THE REVENUE. THE REVENUE, APART FROM ISSUING NOTICES U NDER SECTION 131 AT THE INSTANCE OF THE RESPONDENT, DID NOT PURSUE THE MATTER FURTHER. THE REVENUE DID NOT EXA MINE THE SOURCE OF INCOME OF THE SAID ALLEGED CREDITORS TO FIND OUT WHETHER THEY WERE CREDITWORTHY. THERE WAS NO E FFORT MADE TO PURSUE THE SO-CALLED ALLEGED CREDITORS. IN THOSE CIRCUMSTANCES, THE RESPONDENT COULD NOT DO ANYTHING FURTHER. IN THE PREMISES, IF THE TRIBUNAL CAME TO THE CONCLUSION THAT THE RESPONDENT HAD DISCHARGED THE B URDEN THAT LAY ON IT, THEN IT COULD NOT BE SAID THAT SUCH A CONCLUSION WAS UNREASONABLE OR PERVERSE OR BASED ON NO EVIDENCE. IF THE CONCLUSION WAS BASED ON SOME EVID ENCE ON WHICH A CONCLUSION COULD BE ARRIVED AT, NO QUEST ION OF LAW AS SUCH AROSE. THE HIGH COURT WAS RIGHT IN REF USING TO STATE A CASE. 7. IN THIS CASE, THE REVENUE HAS DOUBT THE GENUINEN ESS OF THE TRANSACTION MAINLY ON THE GROUND THAT THERE WAS A C ASH DEPOSIT IN THE BANK ACCOUNT OF M/S CHARM INVESTMENT PVT.LTD. PRIOR TO THE ISSUE OF CHEQUE. HOWEVER, DURING THE PROCEEDINGS BEFORE THE LEARNED CIT(A), THE ASSESSEE FURNISHED THE AFFIDAVIT OF SHRI JAYANT PAL ON BEHALF OF M/S CHARM INVESTMENT PVT.LTD. WHO EXPLAINED THE SOURCE OF CASH DEPOSITED IN THE BANK ACCOUNT OF M/S CHARM INVESTMENT PVT.LTD . THE SAID AFFIDAVIT OF SHRI JAYANT PAL WAS FORWARDED TO THE A SSESSING OFFICER WHO, IN THE REMAND REPORT, DID NOT GIVE ANY ADVERSE COMM ENT. IN VIEW OF THE TOTALITY OF ABOVE FACTS, WE DO NOT FIND ANY INF IRMITY IN THE ORDER OF ITA-2195/DEL/2012 5 LEARNED CIT(A) IN THIS REGARD. THE DECISION OF HON 'BLE JURISDICTIONAL HIGH COURT RELIED UPON BY THE LEARNED DR IN THE CAS E OF NOVA PROMOTERS AND FINLEASE (P) LTD. (SUPRA) IS ON ALTOG ETHER DIFFERENT FACTS. WHETHER THE ASSESSEE HAS DISCHARGED THE ONUS OF PRO VING THE CASH CREDIT OR NOT WOULD DEPEND ON THE FACTS OF EACH CAS E AND, AFTER CONSIDERING THE ARGUMENTS OF BOTH THE SIDES AND THE FACTS OF THE CASE, WE ARE OF THE OPINION THAT LEARNED CIT(A) HAS RIGHT LY HELD THAT THE ASSESSEE HAS DISCHARGED THE ONUS LAY ON IT. IN VIE W OF THE ABOVE, WE UPHOLD THE ORDER OF LEARNED CIT(A) AND DISMISS THE APPEAL FILED BY THE REVENUE. 8. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. DECISION PRONOUNCED IN THE OPEN COURT ON 8 TH AUGUST, 2013. SD/- SD/- ( (( (A.D.JAIN A.D.JAIN A.D.JAIN A.D.JAIN) )) ) (G.D.AGRAWAL) (G.D.AGRAWAL) (G.D.AGRAWAL) (G.D.AGRAWAL) JUDICIAL JUDICIAL JUDICIAL JUDICIAL MEMBER MEMBER MEMBER MEMBER VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT DATED : 08.08.2013 VK. COPY FORWARDED TO: - 1. APPELLANT : INCOME TAX OFFICER, WARD INCOME TAX OFFICER, WARD INCOME TAX OFFICER, WARD INCOME TAX OFFICER, WARD- -- -25(2), NEW DELHI. 25(2), NEW DELHI. 25(2), NEW DELHI. 25(2), NEW DELHI. 2. RESPONDENT : M/S BANSAL ELECTRONICS, M/S BANSAL ELECTRONICS, M/S BANSAL ELECTRONICS, M/S BANSAL ELECTRONICS, BL BLBL BL- -- -43, SHALIMAR BAGH, NEW DELHI 43, SHALIMAR BAGH, NEW DELHI 43, SHALIMAR BAGH, NEW DELHI 43, SHALIMAR BAGH, NEW DELHI 110 088. 110 088. 110 088. 110 088. 3. CIT 4. CIT(A) 5. DR, ITAT ASSISTANT REGISTRAR