Shri Desh Pal Singh Kholi, Dehradun V. DCIT, Dehradun

ITA 2222/DEL/2015

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 5142 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 4 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-08-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2011-2012
• Appeal Filed On: 15-04-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: APOORVA KARAN
• Assessee Lawyers: KANWAL K JUNEJA
• Keywords: Onus to prove
• Section: 44AD; 143(3); 142(1); 153A; 133(6); 131; 68; 132

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES: A , NEW DELHI BEFORE SHRI A MIT SHUKLA, JUDICIAL MEMBER AND SHRI L.P. SAHU, ACCOUNTANT MEMBER ITA NO. 2222 /DEL/2015 A.Y.: 2011 - 12 SRI DESH PAL SINGH K OHLI 46, SAHARANPUR ROAD DEHRADUN PAN: A CGPK 1599 Q VS . DCIT CENTRAL CIRCLE DEHRADUN (APPELLANT) (RESPONDENT) APPELLAN T BY SHRI KANWAL K JUNEJA , ADV. RESPONDENT BY SMT. APOORVA KARAN, CIT(DR) DATE OF HEARING 0 9 TH AUGUST, 2017 DATE OF PRONOUNCEMENT 17 TH AUGUST, 2017 ORDER PER L.P. SAHU, ACCOUNTANT MEMBER THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DT. 12.5.2015 OF THE LD. CIT (A), DEHRADUN ON THE FOLLOWING GROUNDS. 1. THAT IN FACTS AND CIRCUMSTANCE OF THE CASE, THE LEARNED CIT HAS ERRED WRONGLY IN SUSTAINING THE ADDITION OF RS. 50,00,000/ - OF UNSECURED LOAN AS UNEXPLAINED. 2. THAT IN FACTS AND CIRCUMSTANCES OF THE CASE, CIT(A) HAS WRONGLY STATED THAT THE CASH HAS BEEN INTRODUCED IN THE BANK ACCOUNT OF THE DEPOSITORS BEFORE PARTING WITH THE DEPOSIT TO THE APPELLANT. 2 3. THAT IN FACTS AND CIRCUMSTANCES OF THE CASE, SUSTAINING THE ADDITION OF RS. 5 0,00,000/ - ERRONEOUSLY WHEN THE APPELLANT HAS ALREADY REFUNDED THE AMOUNT THROUGH RTGS PRIOR TO INITIATION OF NOTICE U/ S 142(1) AND 143(2). 4. THAT IN FACTS AND CIRCUMSTANCES OF THE CASE, THE ASSESSING OFFICER HAS INCORRECTLY INVOKED THE PROVISION OF SE CTION 68 AND SUSTAINED BY THE CIT(A) IN THE ABSENCE OF ANY INCRIMINATORY DOCUMENT FOUND DURING THE COURSE OF SEARCH. 5. THAT THE ADDITION TO THE RETURNED INCOME AS SUSTAINED BY THE LD. CIT(A) MAY PLEASE BE DELETED. 6. THAT IN FACT AND CIRCUMSTANCE OF THE CASE, APPELLANT BE PERMITTED TO ADD OR DELETE ANY GROUNDS OF APPEAL. 2. FACTS OF THE CASE IN BRIEF ARE THAT THE ASSESSEE IS AN INDIVIDUAL AND DERIVES INCOME FROM BUSINESS AND OTHER SOURCES. D URING THE YEAR HE HAS SHOWN GROSS RECEIPTS OF RS.59,26,000/ - FROM CONTRACT AND NET PROFIT @ 12%. HE HAS ALSO SHOWN RS.1,20,000/ - AS DEEMED PROFIT U/S 44AE OF THE INCOME TAX ACT, 1961 (THE ACT ) ON THE TOTAL RECEIPTS OF RS.19,83,167/ - HAVING TWO HEAVY VEHICLES. DURING THE YEAR THE ASSESSEE HAD RECEIVED UNSECURED LOAN S OF RS.4 LAKHS FROM SRI VIVEK BATRA ON 19.3.2011 AND RS.50,00,000/ - FROM SRI RAKESH KUMAR ON 22.3.2011. THE A.O. ASKED THE ASSESSEE TO FILE CONFIRMATIONS OF THE PARTIES FROM WHOM LOANS ARE RECEIVED. THEREAFTER A.O. HAS CONCLUDED THAT THE CREDIT WO RTHINESS HAS NOT BEEN PROVED AND MADE AN ADDITION OF RS.54 LAKHS BEING UNEXPLAINED INCOME IN ASSESSEE S HANDS U/S 68 OF THE ACT AND INITIATED PENALTY PROCEEDINGS U/S 271AAA OF THE ACT. HE ALSO MADE AN ADDITION OF RS.8,16,348/ - BEING LOW HOUSE HOLD WITHDR AWALS AND EXPENSES. THUS THE A.O. COMPLETED THE ASSESSMENT U/S 143(3) FOR A TOTAL IN COME OF RS.78,93,520/ - AS UNDER. SL. NO. PARTICULARS AMOUNT RS. 1. INCOME FROM OTHER SOURCES 524079 2. INCOME FROM BUSINESS AND PROFESSION 1069867 3. INCOME FROM HOUSE PROPERTY (97204) 4. INCOME FROM CAPITAL GAINS 18257 5. INCOME SURRENDERED 425000 6. ADDITION AS PER PARA 4 118520 3 7. ADDITION AS PER PARA 5 38653 8. ADDITION AS PER PARA 6 5400000 9. ADDITION AS PER PARA 7 816348 GROSS TOTAL INCOME: 8008520 LESS: DEDUCTION U/CIT(A) VI A 115000 TOTAL INCOME 7893520 TOTAL INCOME ROUNDED OFF 7893520 2.1. THE A.O. ASKED THE ASSESSEE TO SUBSTANTIATE THE LOAN TAKEN FROM THE TWO PARTIES, AS THE ONUS IS CAST ON THE ASSESSEE TO PROVE THE CREDIT WORTHINESS AS PER S.68 OF THE ACT. THE ASSESSEE FAILED TO DISCHARGE HIS ONUS FOR PROVING THE CREDIT WORTHINESS OF LOAN TAKEN FROM THE TWO PARTIES. THEREFORE, THE A.O. TREATED IT AS UNEXPLAINED INCOME IN THE ASSESSEE S HANDS U/S 68 OF THE ACT AND HE MADE SEVERAL ADDITIONS ALSO. BEING AGGRIEVED BY THE ADDITIONS MADE BY THE A.O., THE ASSESSEE WENT IN APPEAL BEFORE THE FIRS T APPELLATE AUTHORITY. THE LD.FIRST APPELLATE AUTHORITY, AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE PARTLY ALLOWED THE APPEAL OF THE ASSESSEE AND SUSTAINED THE ADDITION OF RS.50 LAKHS LOAN TAKEN FROM SHRI RAKESH KUMAR. 2.2. BEING AGGRIEVED THE ASSE SSEE IS IN APPEAL BEFORE THE TRIBUNAL. 3. THE LD. A.R. FOR THE ASSESSEE MADE FOLLOWING WRITTEN SUBMISSIONS BEFORE THE BENCH. DATE OF SEARCH WAS 21.10.2010 DUE DATE FOR FILING THE INCOME TAX RETURN OF FIRM AND PARTNERS WAS EXTENDED TO 31.10.2011. IN RESPONSE TO NOTICE 142(1) THE RETURN WAS FILED ON 4 13.03.2013 DECLARING INCOME RS.14,00,000/ - AS MENTIONED AT PAGE 1, PARA 2 OF ASSESSMENT ORDER. THAT THE SEAR CH ON 21.10.2010 WAS CONDUCTED AT THE RESIDENCE PREMISES OF THE PARENTS OF THE APPELLANT AND IN THE CASE OF M.L. JUYAL GROUP WHEREIN THE APPELLANT IS THE SILENT MEMBER OF AN AOP. THE APPELLANT DERIVE THE INCOME FROM A CONTRACT BUSINESS AS WELL AS ALSO DER IVE INCOME FROM TRUCK. THE RETURN OF INCOME WAS FILED IN ACCORDANCE TO THE PROVISIONS OF INCOME TAX ACT I.E. FOR THE CONTRACT BUSINESS THE APPELLANT HAS SHOWN THE INCOME U/ S 44 AD AND FROM THE TRUCK BUSINESS U/ S 44AE WHEREAS HE IS A PARTNER IN A FIRM M/ S KOHLI FILLING STATION AND A MEMBER OF AOP IN M/ S M.L.JUYAL & CO., WHEREFROM THE PROFIT IS EXEMPT BUT WAS DULY REFLECTED IN THE CAPITAL ACCOUNT FILED BEFORE THE AO. THE APPELLANT ALSO DERIVES INCOME FROM INTEREST I.E. DEPOSITS WITH THE COMPANY WHEREFROM THE TDS HAS BEEN DEDUCTED AND ACCORDINGLY SHOWN. THAT THE RETURN OF INCOME WAS FILED DECLARING NET INCOME AFTER DEDUCTIONS OF RS. 14,00,000/ - U/S 139,WHICH WAS ASSESSED BY MAKING HUGE ADDITIONS AT RS 78,93,520/ - . THE APPELLANT DO NOT MAINTAIN ANY BOOKS OF ACCOUNT AS HE IS NOT CARRYING ON ANY TRADING BUSINESS WHEREAS THE INCOME FROM CONTRACT AND TRANSPORT HAS BEEN DECLARED AS PER PROVISION OF SECTION 44AD AND 44AE RESPECTIVELY OF THE INCOME TAX ACT, 1961. IT IS IMPORTANT TO NOTE THAT IN THE REMAND REPOR T DATED 20.02.2015 AT PARA 2(1), THE DY.COMMISSIONER, INCOME TAX HAS ADMITTED AS UNDER: 1. 111 THIS CONNECTION, THE DESIRED REPORT IS SUBMITTED AS UNDER: (I) DURING THE COURSE OF SEARCH NO INCRIMINATING DOCUMENT WAS FOUND IN RESPECT OF CASH CREDIT TRAN SACTION FROM THE PARTIES SH. VIVEK BAIRA AND SH. RAKESLI KUMAR. (COPY ENCLOSED AT PAGE NO. 14) IT IS WORTH TO MENTION THAT NO INCRIMINATING MATERIAL WAS FOUND, THE FACT IS ALSO INCORPORATED AT PAGE 17, PARA 3 OF CIT (A) ORDER AS UNDER: 5 'THE A.O. HAS NOT BROUGHT ON RECORD EITHER IN THE ASSESSMENT ORDER OR IN THE REMAND REPORT THAT ANY INCRIMINATING MATERIAL WAS FOUND ON THE BASIS ON WHICH THE ADDITIONS HAS BEEN MADE. YOUR HONOUR, IT IS ADMITTED FACT THAT THE APPELLATE HAS NOT MAINTAINED ANY CASH BOOK AS HE IS NOT LIABLE TO MAINTAIN THE SAME THEREFORE THE CONTRACT INCOME AND TRANSPORT INCOME HAS BEEN DECLARED IN ACCORDANCE TO PROVISIONS OF SECTION 4 - IAD AND SECTION 44AE. HE HAS PREPARED THE BALANCE SHEET WHICH HAS BEEN FILLED BEFORE THE ASSESSING OFFICER, FROM THE ENTRIES IN THE BANK AND RESPECTIVE COPY OF HIS CAPITAL ACCOUNTS WHEREIN HE IS A MEMBER OF AOP. ALTHOUGH IT IS THE LAST YEAR OF THE SEARCH CASE, THE AO HAS COMPLETED THE ASSESSMENT U /5 143(3) ON 28.03.2013 AND HAVE ALSO MENTIONED IN PARA 2 OF TH E ORDER' A SEARCH U/ S 132 OF THE ACT WAS INITIATED AND TOOK PLACE IN THE BUSINESS AND RESIDENTIAL PREMISES OF THE ASSESSEE ON IN THE M.L JUYAL GROUP OF CASES.' THE APPELLANT BUSINESS PLACE AND RESIDENTIAL PLACE WAS ALSO SEARCHED THEREFORE THE APPELLANT C ASE IS FULLY COVERED BY THE ORDER OF HONORABLE HIGH COURT DELHI IN THE CASE OF CIT VS. KABUL CHAWLA REPORTED IN (2016) 380 ITR 0573 (DELHI) WHEREIN IT HAS BEEN LAID DOWN: - ASSESSMENT U/S 153A CAN BE CARRIED OUT ONLY ON THE BASIS OF SEIZED MATERIAL. WHERE NO INCRIMINATING MATERIAL WAS UNEARTHED DURING THE SEARCH, NO ADDITIONS COULD BE MADE TO THE INCOME ALREADY ASSESSED. GROUND NO 1 - 4: - DURING THE YEAR UNDER APPEAL APPELLANT TOOK A LOAN OF RS. 50,00,000/ - FROM SHRI RAKESH KUMAR WHO IS ASSESSED TO TAX AT RANGE 6(5), UNDER PAN NO. AFVPK1 75P AT CHANDIGARH R/O H.NO. 4024 SECTOR 68, MOHALI. CONFIRMATION FILED BEFORE AO COPY ENCLOSED AT PAGE 8 . HE GAVE THE AMOUNT THROUGH RTGS OF ICICI BANK ON 22.03.2011 WHICH WA S CREDITED TO THE APPELLANT SBI BANK A/CON 22.03.2011. THE COPY OF I CICI BANK, MOHALI ACCOUNT NUMBER 005801560706 WAS FILED BEFORE THE AO FOR THE PERIOD 01.03.2011 TO 30.04.2011. C OPY ENCLOSED AT PAGE 9. 6 THE APPELLANT HAVE RETURNED THE AMOUNT THROUGH RTGS OF SBI BANK ON 15.04.2011 AND CREDITED TO THE ICICI BANK ACCOUNT, MOAHLI ACCOUNT NUMBER 005 01560706 OF SHRI RAKESH KUMAR ON 15.04.2011. PAGE 10 - 12 THE AMOUNT WAS TAKEN AFTER SEARCH AND WAS DULY REFUND ED WITHIN 23 DAYS PRIOR TO THE DATE OF FILING OF RETURN. SHR I RAKESH KUMAR HAVE GIVEN THE CONFIRMATION DATED 06.03.2013 WHERE HE ADMIT TO HAVE GIVEN THE AMOUNT AS WELL AS RECEIVED BACK THE AMOUNT, HE HAS ALSO GIVEN HIS COPY OF ICICI BANK ACCOUNT STATEMEN T A/ C NO. 005801560706 WHEREIN AT THE TIME OF GIVING THE AMOUNT HE HAD SUFFICIENT BALANCE OF RS. 58,70,867/ - AND IN THE ICICI BANK STATEMENT, NAME OF THE APPELLANT IS ALSO REFLECTED WITH CHEQUE NO. AS 'RTGS DESH 264823 RS. 50,00,000/ - ', PAGE 9 THE SAME AMOUNT IS REFLECTED IN THE APPELLANT SBI BANK, SAHARANPUR ROAD, DEHRADUN BEARING ACCOUNT NO. 10140070121 ON 22.03.2011 IT IS CLEARLY MENTIONED RTGS ICICI1108105036 I.E. BANK ACCOUNT NO. OF SHRI RAKESH KUMAR RS. 50,00,000/ - WHEN THE APPELLANT RECEIVED THE AMOUNT. SIMILARLY WHEN THE APPELLANT REFUNDED THE AMOUNT ON 15.04.2011 IT IS MENTIONED RTG S SBI NH11101350371 RS. 50,00,000/ - AND IN THE ACCOUNT OF SHRI RAKESH KUMAR ON 15.0 4 .2011 IT IS MENTIONED RTGS SBINHI11013503 RS. 50,00,000/ - . PAGE 12 THAT IN TH E BANK ACCOUNT F THE DEPOSITOR THE NAME OF THE APPELLANT IS MENTIONED AND WHEN THE APPELLANT RETURNED THE AMOUNT THROUGH R T GS, THE SBI BANK ACCOUNT NUMBER OF THE APPELLANT IS MENTIONED IN THE BANK STATEMENT OF THE DEPOSITOR. SIMILAR IS THE POSITION IN TH E CASE OF THE APPELLANT. ALL THE RELEVANT COPIES OF BANK ACCOUNTS WITH CONFIRMATIONS AND THE ITR OF S HRI RAKE H KUMAR WAS SUBMITTED BEFORE THE CIT(A), DEHRADUN. THE CIT(A) ALONG WITH SUBMISSION OF THE APPELLANT FORWARDED THE SAME TO THE A ESSING OFFICER FOR REMAND REPORT. THE COPY OF THE REMAND REPORT IS ENCLOSED HEREWITH. PAGE 13 - 14 7 THE COMMENTS WHICH WAS RECEIVED FROM THE AO ARE INCORPORATED IN CIT(A) ORDE R AT PAGE 15 PARA 6 WITH REGARD TO SHRI RAKESH KUMAR AND THE COMMENTS OF CIT(A) WAS AT PAGE 16 OF THE SAID ORDER. THE AO SIMPLY REPEATED THAT DURING THE SCRUTINY PROCEEDINGS ASSESSEE DELIBERATELY FILED LATE INFORMATION THE TRANSACTION COULD NOT BE VERIFIED FROM THE PARTY. IN ABSENCE OF SUCH VERIFICATION THE CREDIT WORTHINESS AND GENUINENESS OF THE TRANSACTION IS UNEXPLAINED. WHEN THE COMPLETE SUBMISSION WAS FORWARDED BY THE CIT (A) FOR THE REMAND REPORT, ASSESSING OFFICER HAD A FULL OPPORTUNITY TO OBTAIN A NY INFORMATION FROM BANK OR FROM CREDITOR. THE AO NEITHER ISSUED ANY NOTICE U/ S 131 OR 133(6) CALLING ANY INFORMATION FROM THE CREDITOR OF THE ASSESSEE. SINCE THE ADDITION WAS MADE IN THE ASSESSMENT ORDER, THEREFORE, THE AO SUBMITTED BY HER OWN WHIMS AND PRESUMPTIONS TO REPEAT THE FACT WHICH HAS BEEN STATED IN THE ASSESSMENT ORDER BY AO HERSELF. IT IS WORTH TO MENTION THAT ITO HAS NOT TAKEN ANY INITIATIVE TO VERIFY THE TRANSACTION, NO NOTICE OR LETTER WAS SEND TO THE CREDITOR. THE AO HAS ALSO NOT DOUBTED THE IDENTITY, GENUINENESS OR THE CREDIT WORTHINESS OF THE CREDITOR WITHOUT TAKING ANY INITIATIVE AND WITHOUT BRINGING ANY EVIDENCE ON RECORD NEITHER THE AO HAS STATED THAT THE DOCUMENTS SUBMITTED ARE FALSE NOR ANY EVIDENCE BROUGHT ON RECORD TO STATE THAT THE IMPUGNED AMOUNT BELONGS TO THE APPELLANT, AO SIMPLY TREATED THE TRANSACTION AS UNEXPLAINED WHICH IS UNFAIR AND UNJUSTIFIED . * THE CREDITOR HAS GIVEN A CONFIRMATION LETTER ALONG WITH PAN NO, * THE CREDITOR HAS GIVEN HIS INCOME TAX ACKNOWLEDGEMENTS OF A.Y. 2011 - 12 * THE CREDITOR HAS ALSO GIVEN COPY OF HIS BANK ACCOUNT FROM WHERE THE AMOUNT HAS BEEN DEBITED AND THE SAME IS CREDITED TO THE APPELLANT'S BANK ACCOUNT. IT IS ALSO WORTH TO MENTION THAT IN THE SUBSEQUENT ASSESSMENT YEAR I.E 2012 - 13 DURING THE SCRUTINY OF THE CASE, THE SAME AO ASKED TO SUBMIT THE DETAILS OF BANK ACCOUNT ENTRIES ABOVE RS.50,000 / - AND SOURCE THEREOF. THE DETAILS WERE DULY FILED VIDE LETTER DATED 19.06.201 4 THE AO. 8 THE COPY OF THE SAID DETAIL IS ENCLOSED HEREWITH. FROM THE PE RUSAL OF THE SAME YOUR GOODSELF WILL FIND THAT IT IS CLEARLY MENTIONED ON 15.04.2011 SUM OF RS.50,00,000J - WAS GIVER FROM SBI TO SHRI RAKESH KUMAR OF CHANDIGARH AND BANK HAS ALSO CHARGED RS.50 / - AS RIG EXPENSES AT PAGE 16. THE COPY OF THE SAID STATEMENT IS ENCLOSED. PAGE 15 - 21 THE AO HAS ACCEPTED THE BANK ACCOUNT AS WELL AS THE INCOME DECLARED BY THE APPELLANT. THE COPY OF THE ASSESSMENT ORDER IS ENCLOSED HEREWITH AT PAGE 22 - 23 THAT THE COPY OF THE BALANCE SHEET FOR THE YEAR ENDING 31.03.2011 WHERE IN THE NAME OF SHRI RAKESH KUMAR IS APPEARING AND THE COPY OF THE BALANCE SHEET FOR 31.03.2012 IS ENCLOSED HEREWITH, IT DOES NOT CONTAIN THE NAME OF SHRI RAKCSH KUMAR AS THE AMOUNT WAS PAID AS STIPULATED ABOVE. PAGE 24 - 25 THE APPELLANT IS FORTIFIED WIT H UNDER MENTIONED CASE LAWS; SHRI RAJESH BHATIA VS. DCIT ITAT NEW DELHI F' BENCH IN ITA NO.2021/DEL / 2013 ORDER DATED 24.7.2015 ALLOWED THE ASSESSEE APPEAL BY RESPECTFULLY BY FOLLOWING THE RATIO LAID DOWN BY THE HON'BLE HIGH COURT OF DELHI IN THE CASE OF CIT VS . DWARKADHISH INVESTMENT P LTD REPORTED IN 330 ITR 298 (DEL) WHEREIN THEIR LORDSHIP HELD; THAT THE ASSESSEE SUBMITS THE IDENTITY AND TRUE CREDITORS BY EITHER FURNISHING FA NUMBER OF THE INCOME TAX ASSESSMENT NUMBER AND OTHER RELEVANT DETAILS SHO W ING GENUINENESS OF THE TRANSACTION AND CREDITWORTHINESS AND MONEY IN THE BOOKS OF THE ASSESSEE HAS BEEN ENTERED THROUGH BANKING CHANNEL, THEN THE ONUS OF PROOF WOULD SHIFT TO THE REVENUE. THE HON'BLE HIGH COURT IN CASE OF CIT VV. DWARKADHISH INVESTMENT P LTD REPORTED IN 330 ITR 298 (DEL) AT PARA 8 HAVE ALSO HELD; 9 ' IN ANY MATTER, THE ONUS OF PROOF IS NOT A STATIC ONE. THOUGH IN S. 68 PROCEEDINGS, THE INITIAL BURDEN OF PROOF LIES ON THE ASSESSEE YET ONCE HE PROVES THE IDENTITY OF THE CREDITORS/SHARE APPLICANTS BY EITHER FURNISHING THEIR PAN OR INCOME - TAX ASSESSMENT NUMBER AND SHOWS THE GENUINENESS OF TRANSACTION BY SHOWING MONEY IN HIS BOOKS EITHER BY ACCOUNT PAYEE CHEQUE OR BY DRAFT OR BY ANY OTHER MODE, THEN THE ONUS OF PROOF WOULD SHIFT TO THE REVENUE. JUST BECAUSE THE CREDITORS/SHARE APPLICANTS COULD NOT BE FOUND AT THE ADDRESS GIVEN, IT WOULD NOT GIVE THE REVENUE THE RIGHT TO INVOKE S. 68. ONE MUST NOT LOSE SIGHT OF THE FACT THAT IT IS THE REVENUE WHICH HAS ALL THE POWER AND WHEREWITHAL TO TRACE ANY PERSON. MOREOVER, IT IS SETTLED LAW THAT THE ASSESSEE NEED NOT T O PROVE THE 'SOURCE OF SOURCE'.' IN VARIOUS CASES THE COURTS HAVE STATED THAT THE ASSESSEE IS NOT REQUIRED TO PROVE SOURCE OF THE SOURCE OF CREDIT; - CIT V. ORISSA CORP. P LTD 159 ITR 78 (SC) HASTIMAL V. CIT 49 ITR 273 (MAD) TOLARAM DAGA V. CIT 59 ITR 632 (ASSAM) NEMICHAND KOTHARI V.CIT 264 TR 254 (GUJ ) IT HAS BEEN LAID DOWN IN THE CASE OF PAWAN JINDAL VS. INCOME TAX OFFICER ITAT, DELHI TRIBUNAL (F) ITA NO. 3557/DELJ2011 18TH MARCH, 2016 (2016) 46 CCH 0308 IT IS SETTLED PRINCIPLE OF LAW TH AT WHEN THE ASSESSEE HAS DULY DISCHARGED THE ONUS BY FURNISHING THE CONFIRMATIONS, COPIES OF INCOME TAX RETURNS, AND COPY OF BANK PASS BOOK OF HIS CREDITORS, WHICH TALLY WITH THE BANK ACCOUNT OF APPELLANT, THE BURDEN STANDS SHIFTED TO THE ASSESSING OFFICER TO REBUT THE SAME BY BRINGING COGENT EVIDENCE ON THE RECORD, PARTICULARLY WHEN HE HAS NOT DISPUTED THE AFORESAID DOCUMENTS SO FURNISHED BY THE ASSESSEE. THE ASSESSING OFFICER HAS THE AMPLE POWER TO SUMMON THE AFORESAID CREDITORS OF THE ASSESSEE WHICH HE HAS APPARENTLY NOT EXERCISED RATHER AGAIN SHIFTED THE BURDEN ON THE ASSESSEE WITHOUT DISPUTING THE GENUINENESS OF THE DOCUMENTS, AS SUCH THE ADDITION MADE TO HIS INCOME IS NOT SUSTAINABLE. 10 INCOME TAX APPELLATE TRIBUNAL - DELHI 'H' BENCH IN APPEAL NO. ITA NO. 2501/DELJ2013 DY, CIT VS. VIVEK NAGPAL, NEW DELHI ORDER DATED 9 FEBRUARY, 2016 AT PARA 5.1 WHILE DISMISSING THE DEPARTMENT APPEAL HELD; - (6) I FURTHER FIND THAT THE AD IN HIS ORDER HAS NOT BROUGHT ANY MATERIAL ON RECORD TO SHOW THAT THE CONFIRMAT ION FILED BY THE CREDITOR IS NOT GENUINE, HERE I WOULD LIKE TO PLACE RELIANCE IN THE CASE OF CIT VS. GANGOUR INVESTMENT LTD. (INCOME TAX ,ACT NO. 34/2007) DATED 30.1.2009 WHERE IT WAS HELD THAT REVENUE CAN MAKE ADDITION UNDER SECTION 68 OF THE AC T ONLY IF THE ASSESSEE IS UNABLE TO EXPLAIN THE CREDITS APPEARING IN ITS BOOKS OF A CCOUNTS . IN THE SAID CASE THE APPELLANT HAS DULY EXPLAINED THE SAID CREDIT ENTRIES IN THE FORM OF VARIOUS DOCUMENT S IN EVIDENCES. THE SAID DOCUMENTARY EVIDENCE CONTAINED DET AILS, WHICH SET OUT NOT ONLY THE IDENTIT Y OF THE SUBSCRIBERS, BUT ALSO GAVE INFORMATION, WITH RESPECT TO THEIR ADDRESS, AS WELL AS, PAN, ETC. BASED ON THESE FACTS, THE HON BLE DELHI COURT DISMISSED THE APPEAL OF REVENUE. INCOME TAX OFFICER VS. COMPUTER FORCE ITAT, AHMEDABAD 'B' BENCH (2011) 136 TTJ (AHD) 221 ACCORDING TO AO, THE ASSESSEE HAD FAILED TO FURNISH THE CONFIRMATIONS, THEREFORE, THE TOTAL OF THE TWO, I.E., RS. 5,14,790/ - WAS TAXED. WHEN THE MATTER WAS CARRIED BEFORE THE FIRST APPELLATE AUTHORITY, THE FINDING WAS AS UNDER: '10.1 I HAVE PERUSED THE ASSESSMENT ORDER. IT SEEMS THAT THE ADDITION HAS BEEN MADE BY THE AO IN THE ABSENCE OF CONFIRMATIONS FROM THE CREDITORS. ON THE OTHER HAND THE APPELLANT SUBMITTED B EFORE ME THAT THE PAYMENT HAS BEEN ALREADY MADE TO THE SAID CREDITORS IN THE SUBSEQUENT YEARS AND COPY OF LEDGER ACCOUNT HAS BEEN SUBMITTED TO THE AO DURING THE COURSE OF ASSESSMENT 11 PROCEEDINGS AND HE HAD NOT CONSIDERED THE SUBMISSION MADE BY THE APPELLANT . THE APPELLANT ALSO SUBMITTED BEFORE ME THAT THE PARTIES ARE TRACEABLE AND THAT IS WHY THE APPELLANT WAS NOT ABLE TO SUBMIT CONFIRMATION AS SOUGHT FOR BY THE AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS. 10.2 I HAVE PERUSED THE FACTS OF THE CASE. BEFOR E ME THE APPELLANT PRODUCED COPY OF LEDGER ACCOUNT OF THE CREDITORS FOR THE SUBSEQUENT YEAR AND SUBMITTED THAT THE PAYMENT HAS BEEN ALREADY MADE TO THE SAID CREDITORS. SINCE THE APPELLANT HAS ALREADY MADE PAYMENTS TO THE CREDITORS IN DISPUTE THE ADDITION M ADE ON THIS ACCOUNT IS DIRECTED TO BE DELETED. THE APPELLANT SUCCEEDS IN THIS GROUND OF APPEAL.' 14 ON HEARING THE RIVAL SUBMISSION ONCE THE ADMITTED FACTUAL POSITION IS THAT IN THE SUBSEQUENT YEARS, THE PAYMENT HAVE BEEN MADE TO THOSE CREDITORS AND THE L EDGER ACCOUNT HAVE BEEN AFFIRMED THE SAME WHICH HAS BEEN VERIFIED BY THE FIRST APPELLANT AUTHORITY, THEREFORE, IN THE ABSENCE OF ANY CONTRARY MATERIAL, WE HAVE NO REASON TO DOUBT THE FINDINGS OF THE FACT OF THE FIRST APPELLANT AUTHORITY. WE HEREBY AFFIRM T HOSE FINDINGS AND DISMISSED THIS GROUND OF THE REVENUE. IN THE CASE UNDER APPEAL THE AMOUNT WAS PAID MUCH BEFORE THE DUE DATE OF FILING OF THE INCOME TAX RETURN. YOUR KIND REFERENCE IS ALSO DRAWN TO THE CASE OF SARAOGI CREDIT CORPORATION VS CIT 103 ITR 3 44 AND TULARAM DAGA REPOTED IN 59 ITR 632 WHEREIN IT HAS BEEN HELD THAT THE ASSESSEE HAS NOT TO EXPLAIN THE SOURCE OF THE SOURCE OR THE ORIGIN OF THE ORIGIN, THIS CANNOT BE THE BASIS TO INVOKE SECTION 68 OF THE INCOME TAX ACT. THE HONORABLE DELHI HIGH COU RT IN THE CASE OF CIT VS GANGESHWARI METAL (P) LTD. IN IT APPEAL NO. 594 OF 2012 HAVE HELD NO ADDITION U / S 68 BE MADE IF THE ASSESSEE PROVE THE GENUINENESS OF THE TRANSACTION. IN CASE CIT VS. KHOOBSURAT RESORTS (P) LTD. (2012) 211 TAXMAN 510 (DEL). BURDEN OF PROOF - PAN NUMBER AND MATERIAL PARTICULARS OF THE DIRECTOR (OF THE ASSESSEE) AND HIS PROPRIETORSHIP CONCERN, WERE MADE AVAILABLE AND EVEN THE 12 IT RETURNS CONCERNED, WERE FIL ED AND THEREFORE CIT(A) AND TRIBUNAL WERE JUSTIFIED IN DELETING ADDITION. BHAGAWANDAS SHARDA VS. ACIT ITAT, HYDERABAD (2004) 82 TT] 0982 LOAN CLEARED BY ASSESSEE BEFORE ASSESSMENT PROCEEDINGS STARTED - ONUS ON ASSESSEE STOOD DISCHARGED - ADDITION BASED ON NON - PRODUCTION OF LENDER WAS UNJUSTIFIED . YOUR HONOR, ALL THE ENTRIES ARE THROUGH BANK CHANNEL, DULY CONFIRMED BY THE CREDITORS, WHO ARE ASSESSED TO TAX AND MOREOVER, ALL THE ENTIRE'S ARE PRIOR TO THE DATE OF FILING OF THE RETURN OF INCOME OR INITIATING ANY PROCEEDINGS. KEEPING IN VIEW THE ABOVE FACTS AND CASE LAWS IT IS HUMBLY REQUESTED TO PLEASE DELETE THE ADDITIONS SUSTAINED U / S. 68 BY THE CIT (A) AND PASS THE FAVORABLE ORDERS. 4. ON THE OTHER HAND THE LD.D.R. SUBMITTED THAT THE ASSESSE HAS NOT DISCHARGED THE ONUS AS U/S 68 OF THE INCOME TAX ACT, 1961 (THE ACT), THE CREDIT WORTHINESS HAS NOT BEEN PROVED BY THE ASSESSEE. THE TURNOVER OF THE ASSESSEE ALSO IS VERY LOW AND HOW HE TOOK LOAN OF RS.54 LAKHS, OUT OF WHICH RS.50 LAKHS HAS BEEN TAKEN FROM A SINGLE PARTY. HE RELIED ON THE ORDERS OF THE AUTHORITIES BELOW. FURTHER HE SUBMITTED THAT ASSESSEE HAS NOT FILED ANY COPY OF INCOME TAX RETURN, BALANCE SHEET OF SHRI RAKESH KUMAR. 5. WE HAVE HEARD BOTH SIDES, PERUS ED MATERIAL AVAILABLE ON RECORD, O RDERS OF LOWER AUTHORITIES . ADMITTEDLY THE ASSESSEE HAS NOT FILED THE INCOME TAX RETURN, COPY OF BALANCE SHEET FOR PROVING CREDIT WORTHINESS OF THE LENDER. THE ASSESSEE HAS SUBMITTED BANK ACCOUNT DETAILS OF SHRI RAKESH KUMAR WHICH IS AVAILABLE AT PAGE NO .29 OF THE PAPER BOOK. AFTER GOING THROUGH THE 13 BANK STATEMENT OF SHRI RAKESH KUMAR IT WAS NOTICED THAT THE ASSESSEE HAS SUBMITTED ONLY BANK STATEMENT FROM THE MONTH OF 1 ST MARCH, 2011. ON THAT DAY THERE IS A HUGE BALANCE OF RS.50,70,000/ - IS APPEARING AS OPENING BALANCE . ON 22 ND MARCH, 2011 SHRI RAKESH KUMAR TRANSFERRED RS.50 LAKHS THROUGH RTGS INTO THE ACCOUNT OF THE ASSESSEE. THE A.O. AS WELL AS THE CIT(A) HAD GIVEN OPPORTUNITY TO THE ASSESSEE FOR PROVING THE CREDIT WORTHINESS OF THE L ENDERS. THE LD. CIT(A) HAS OBSERVED THAT MERELY FILING ONE MONTH EXTRACT OF THE BANK ACCOUNT SHOWS FUNDS PARKED IN THE BANK JUST BEFORE MAKING RTGS DOES NOT INDICATE THAT THE CREDITOR HAD THE CAPACITY TO ADVANCE LOAN OF RS.50 LAKHS. THE LD. AR FOR THE ASS ESSEE REQUESTED TO GRANT HIM OPPORTUNITY FOR FILING OF COMPLETE BANK ACCOUNT DETAILS OF LENDERS AND CREDIT WORTHINESS SO THAT ONUS CAST UPON THE ASSESSEE TO PROVE CREDIT WORTHINESS U/S 68 CAN BE DISCHARGED. THEREFORE, THE MATTER IS REMANDED BACK TO THE F ILE OF THE A.O. FOR EXAMINATION OF CREDIT WORTHINESS OF LENDERS. WE ALSO DIRECT THE ASSESSEE TO FILE COMPLETE BANK STATEMENT BEFORE THE A.O. 6. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 17 TH AUGUST, 2017. S D / - S D / - (A MIT SHUKLA) (L.P. SAHU) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: THE 17 TH AUGUST, 2017 * GMV 14 COPY FORWARDED TO: - 1 . APPELLANT 2 . RESPONDENT 3 . CIT 4 . CIT(A) 5 . DR, ITAT - TRUE COPY - BY ORDER, ASSISTANT REGISTRAR ITAT DELHI BENCHES NEW DELHI