Shri Pradeep Khanduja, New Delhi V. ITO, New Delhi

ITA 2348/DEL/2011

• Counselvise Citation: 234820114 RSA 2011
• Duration Of Justice: 7 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-12-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Next Hearing Date: 13-12-2011
• Assessment Year: 2007-2008
• Appeal Filed On: 10-05-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: Y KAKKAR
• Assessee Lawyers: O P SAPRA
• Keywords: Additional evidence; Onus to prove
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH F DELHI BEFORE SHRI R.P. TOLANI AND SHRI K.G. BANSAL ITA NO. 2348(DEL)/2011 ASSESSMENT YEAR: 2007-08 PRADEEP KHANDUJA, INCOME-TAX OFFICER, C/O O.P. SAPRA &ASSOCIATES, VS. WARD 3( 4), C-783, NEW FRIENDS COLONY, NEW D ELHI. NEW DELHI. PAN: AADPK4359F (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI O.P. SAPRA, ADVOCATE RESPONDENT BY : MS. Y. KAKKAR, SR. D.R DATE OF HEARIN G: 13.12.2011 DATE OF PRONOU NCEMENT: 13.12.2011. ORDER PER K.G. BANSAL : AM THE ASSESSEE HAS TAKEN UP FIVE GROUNDS IN THIS APPEAL. IN THE COURSE OF HEARING, THE LD. COUNSEL FOR THE ASSESSEE EX PLAINED THAT ONLY GROUND NO. 1 IS MATERIAL GROUND FOR THE PURPOSE OF THE DISP OSAL OF THE APPEAL. THE OTHER GROUNDS ARE IN RELATION TO FACTS AND FINDI NGS OF THE LOWER AUTHORITIES, AS WELL AS GENERAL AND RESIDUAL IN NATURE. 2. THE FACTS ARE THAT THE ASSESSEE FILED HIS R ETURN ON 30.07.2007 DECLARING TOTAL INCOME OF RS. 3,81,368/-. THE RET URN WAS PROCESSED U/S ITA NO. 2348(DEL)/2011 2 143(1) AT THE RETURNED INCOME. THEREAFTER, THE CA SE WAS TAKEN UP FOR SCRUTINY. THE ASSESSEE HAS DERIVED SALARY INCOM E, INCOME FROM HOUSE PROPERTY AND INCOME FROM OTHER SOURCES IN THIS YEAR . THE CASE WAS TAKEN UP FOR ASSESSMENT BY ISSUING NOTICE U/S 143(2) ON 15.09.2008. THIS WAS FOLLOWED BY A QUESTIONNAIRE ISSUED TO THE ASSESS EE ON 17.07.2009. IN THE COURSE OF THE PROCEEDINGS, IT WAS FOUND THAT THE ASSESSEE SHOWED LOAN OF RS. 5.00 LAKH FROM SHRI LALIT KHANDUJA. THE ASS ESSEE WAS REQUIRED TO PRODUCE EVIDENCE TO ESTABLISH THE GENUINENESS OF THE LOAN. IT WAS SUBMITTED THAT THE LOAN HAS BEEN TAKEN FROM TWIN-B ROTHER, WHO IS LIVING IN CANADA. A COPY OF HIS PASSPORT WAS FILED. A C OPY OF BANK STATEMENT OF THE LENDER, MAINTAINED WITH HSBC, WAS ALSO FILE D TO EVIDENCE THE SOURCE OF THE LOAN. HOWEVER, THE AO DID NOT CONSIDER THE SE EVIDENCES TO BE SUFFICIENT FOR ESTABLISHING THE LOAN TO BE GENUINE . THEREFORE, THE AMOUNT WAS ADDED TO THE INCOME OF THE ASSESSEE AND THE TOTAL INCOME WAS COMPUTED AT RS. 8,81,370/-. 2.1 IN THE COURSE OF PROCEEDINGS BEFORE THE FIRST A PPELLATE AUTHORITY, IT WAS SUBMITTED THAT THE LENDER IS A NON-RESIDENT INDIAN SETTLED IN CANADA FOR MORE THAN A DECADE. HE IS A CANADIAN CITIZEN . HE HAS MAINTAINED A NRE SAVINGS BANK ACCOUNT WITH HSBC, NEW DELHI. THE LOAN HAS BEEN ITA NO. 2348(DEL)/2011 3 ADVANCED FROM THIS ACCOUNT. THE MONEY WAS ACCU MULATED IN THIS ACCOUNT ON ACCOUNT OF SAVINGS. IT WAS FURTHER SUBMITT ED THAT PHOTOCOPIES OF PASSPORT AND BANK ACCOUNT IN RESPECT OF THE LENDER , AND BANK ACCOUNT IN THE CASE OF THE ASSESSEE WERE FILED. THEREAFTER , THE AO DID NOT MAKE ANY FURTHER ENQUIRY. NO NOTICE WAS ISSUED INTIMATIN G THE INTENTION TO INVOKE THE PROVISION CONTAINED IN SECTION 68. THEREFORE, IT WAS ARGUED THAT THE ADDITION MAY BE SET ASIDE. HOWEVER, THE LD. CIT (APPEALS) DID NOT AGREE WITH THE AFORESAID SUBMISSIONS. IT IS MENTIONED T HAT THE AO HAD SPECIFICALLY ASKED THE ASSESSEE TO FILE CONFIRMAT ION OF LOAN. THE SAME HAD NOT BEEN FILED. THE DOCUMENTS SUBMITTED DO NOT SH OW THE EXTENT OF THEIR RELEVANCE FOR SUBSTANTIATING THE LOAN TRANSACTIO N. THE BURDEN TO PROVE IDENTITY AND CAPACITY OF THE LENDER AND GENUINENES S OF THE TRANSACTION IS ON THE ASSESSEE. THE SAME DOES NOT STAND DISCHAR GED IN THIS CASE. THUS, THE ADDITION HAS BEEN UPHELD. 3. BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE RE FERRED TO THE FINDINGS OF THE LOWER AUTHORITIES. FURTHER, HE REFERRED TO THE DOCUMENTS FILED IN SUPPORT OF THE GENUINENESS OF THE LOAN. THESE ARE COPIES OF PASSPORT AND BANK ACCOUNT OF THE LENDER. THE BANK ACCOUNT, PLA CED ON PAGE NO. 36, CONTAIN ONLY TWO ENTRIES, SHOWING BALANCE AS ON 13.05.2006 AT RS. ITA NO. 2348(DEL)/2011 4 5,78,871/-, DEBIT OF RS. 5.00 LAKH ON 06.06.2006, LEAVING BALANCE OF RS. 78,871/-. THE LD. COUNSEL ALSO FILED A COPY OF THE ORDER-SHEET MAINTAINED BY THE ASSESSING OFFICER OSTENSIBLY TO SHOW THAT AFTER FILING THE EVIDENCES, NO FURTHER QUESTION WAS ASKED. THE PAPER BOOK FIL ED BY THE ASSESSEE CONTAINS ADDITIONAL EVIDENCE ON SIX MATERS RUNNI NG INTO 21 PAGES, PLACED IN THE PAPER BOOK FROM PAGE NOS. 3 TO 23. THESE E VIDENCES CONTAIN ASSESSMENT ORDERS IN CASE OF THE LENDER PASSED BY CANADA REVENUE AGENCY, COPY OF HIS BANK ACCOUNT FROM 13.10.2005 TO 02.04 .2007, CERTIFICATE FROM THE EMPLOYER OF THE LENDER ABOUT EMOLUMENTS EAR NED BY HIM PER ANNUM, IMMIGRATION LETTER DATED 20.02.1995 ISSUED BY CA NADA GOVERNMENT AND CONFIRMATION LETTER IN RESPECT OF THE LOAN. IT WA S PRAYED THAT THE ADDITIONAL EVIDENCE MAY BE ADMITTED UNDER RULE 10/29 OF THE APPELLATE TRIBUNAL RULES. HIS CASE IS THAT BANK ACCOUNT OF THE BROT HER PROVES THE LOAN. IN ANY CASE, SUFFICIENT EVIDENCE HAS NOW BEEN FILED TO PROVE THE GENUINENESS OF THE LOAN. IN THE ALTERNATIVE, IT IS SUBMITTED T HAT IF MATTER REQUIRES FURTHER EXAMINATION, IT MAY BE RESTORED TO THE FILE OF THE AO OR THE LD. CIT(APPEALS). 3.1 IN REPLY, THE LD. SENIOR D.R. SUBMITTED THAT EVEN AFTER PASSING OF THE ASSESSMENT ORDER, EVIDENCE TO DISCHARGE THE BURD EN U/S 68 WAS NOT FILED ITA NO. 2348(DEL)/2011 5 BEFORE THE LD. CIT(APPEALS). THEREFORE, THE EVI DENCE SOUGHT TO BE FILED BEFORE THE TRIBUNAL MAY NOT BE ADMITTED. THE FACT S ON THE RECORD OF THE LOWER AUTHORITIES DO NOT PROVE THE CAPACITY OF TH E LENDER AND GENUINENESS OF THE TRANSACTION. ACCORDINGLY, IT IS URGED THA T THE ACTION OF THE LOWER AUTHORITIES MAY BE CONFIRMED. 4. WE HAVE CONSIDERED THE FACTS OF THE CASE AND S UBMISSIONS MADE BEFORE US. IT IS ADMITTEDLY TRUE THAT EVEN AFT ER PASSING OF THE ASSESSMENT ORDER, THE ASSESSEE DID NOT MOVE ANY APPLICATION BEFORE THE LD. CIT(APPEALS) FOR ADMISSION OF ADDITIONAL EVIDENCE , WHICH HAS NOW BEEN FILED BEFORE US, AND WHICH IS SOUGHT TO BE ADMITTE D. RULE 10 DEALS WITH FILING OF AFFIDAVIT AND STATES THAT WHERE A FACT , WHICH CANNOT BE BORNE OUT BY, OR IS CONTRARY TO, THE RECORD IS ALLEGED, IT SHALL BE STATED CLEARLY AND CONCISELY AND SUPPORTED BY A DULY SWORN AFFIDAV IT. IN THIS CONNECTION, THE ASSESSEE HAS FILED AN AFFIDAVIT DATED 12.09.2011 TO THE EFFECT THAT HE RECEIVED AN AMOUNT OF RS. 5.00 LAKH AS INTEREST-F REE LOAN FROM HIS TWIN- BROTHER SHRI LALIT KHANDUJA, RESIDENT OF CANADA VIDE CHEQUE NO. 358105 ON 06.06.2006, WHICH WAS DEBITED TO HIS NRE SA VINGS BANK ACCOUNT NO. 051-6010003-006 WITH HSBC BANK, NEW DELHI AND CRE DITED TO THE SAVINGS BANK ACCOUNT WITH ABN-AMRO BANK ON THE SAID DAT E. RULE 29 DEALS ITA NO. 2348(DEL)/2011 6 WITH PRODUCTION OF ADDITIONAL EVIDENCE BEFORE THE TRIBUNAL. IT STARTS WITH A PROHIBITION THAT THE PARTIES TO THE APPEAL SHALL NOT BE ENTITLED TO PRODUCE ADDITIONAL EVIDENCE EITHER ORAL OR DOCUMENTARY BE FORE THE TRIBUNAL. THEN, EXCEPTIONS ARE PROVIDED THAT IF THE TRIBUNAL REQUI RES ANY DOCUMENT TO BE PRODUCED OR ANY WITNESS TO BE EXAMINED OR ANY AFF IDAVIT TO BE FILED TO ENABLE IT TO PASS ORDERS OR FOR ANY OTHER SUBSTANT IAL CAUSE, OR, IF THE INCOME-TAX AUTHORITIES HAVE DECIDED THE CASE WIT HOUT GIVING SUFFICIENT OPPORTUNITY TO THE ASSESSEE TO ADDUCE EVIDENCE EIT HER ON POINTS SPECIFIED BY THEM OR NOT SPECIFIED BY THEM, THE TRIBUNAL, FOR REASONS TO BE RECORDED, MAY ALLOW SUCH DOCUMENT TO BE PRODUCED OR WITNESS TO BE EXAMINED OR AFFIDAVIT TO BE FILED OR MAY ALLOW SUCH EVIDENCE TO BE PRODUCED. IN SO FAR AS GRANT OR OTHERWISE OF SUFFICIENT OPPORTUNIT Y IS CONCERNED, THE ASSESSEE HAS NO CASE BECAUSE EVEN AFTER PASSING THE ASSESSMENT ORDER, NO FURTHER EVIDENCE WAS SOUGHT TO BE ADDUCED BEFORE THE LD. CIT(APPEALS). AT THE SAME TIME, THE TRIBUNAL HAS NOT REQUIRED THE AS SESSEE TO PRODUCE ANY DOCUMENT OR WITNESS. THEREFORE, THE ONLY EXCEPTIO N WHICH IS APPLICABLE IN THE CASE OF THE ASSESSEE IS REGARDING ANY OTHER S UBSTANTIAL CAUSE. ON LOOKING AT THE EVIDENCE FILED BEFORE THE LOWER AUTHORITIES, IT IS CLEAR THAT THE LOAN HAS BEEN TAKEN FROM THE BROTHER, WHO I S A CANADIAN CITIZEN. THE AMOUNT HAS BEEN DEBITED IN HIS BANK ACCOUNT. THESE EVIDENCES SHOW THAT ITA NO. 2348(DEL)/2011 7 THERE IS SOME GRAIN OF TRUTH IN THE CLAIM THAT THE AMOUNT WAS LOAN TAKEN FROM THE TWIN-BROTHER. HOWEVER, THE EVIDENCE IS N OT SUFFICIENT TO DISCHARGE THE BURDEN U/S 68, AS DISCUSSED EARLIER, UNDER W HICH PRIMA FACIE EVIDENCE ABOUT THREE THINGS HAS TO BE PRODUCED BY THE AS SESSEE. IN THESE CIRCUMSTANCES, WE ARE OF THE VIEW THAT SUBSTANTI AL CAUSE EXISTS TO PERMIT THE ASSESSEE TO FILE ADDITIONAL EVIDENCE, PLACE D IN THE PAPER BOOK FROM PAGE NOS. 3 TO 23. THEREFORE, THE ADDITIONAL EV IDENCE IS ADMITTED. 4.1 THE ADDITIONAL EVIDENCE HAS NOT BEEN EXAMINE D BY ANY OF THE LOWER AUTHORITIES. THEREFORE, IT WILL BE IN THE FITNESS OF THE SITUATION THAT THE MATTER IS RESTORED TO THE FILE OF THE AO FOR EXAMINATION OF THE EVIDENCE AND THEREAFTER TO PASS AN ORDER AS PER LAW. IT IS OR DERED ACCORDINGLY. 5. IN THE RESULT, THE APPEAL IS TREATED AS ALLOWE D FOR STATISTICAL PURPOSES. SD/- SD/- (R.P. TOLANI) (K.G. BANSAL ) JUDICIAL MEMBER ACCOUNTANT MEMBER SP SATIA COPY OF THE ORDER FORWARDED TO:- PRADEEP KHANDUJA, NEW DELHI. ITO, WARD 3(4), NEW DELHI. CIT(A) CIT THE DR, ITAT, NEW DELHI. ASSISTANT REGISTRAR.