M/s Pentagon Developers, Pune V. CIT [A] V Pune, Pune

ITA 2394/PUN/2012

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 6974 (ITAT-PUNE)
• Duration Of Justice: 4 year(s) 3 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-03-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 26-09-2016
• Assessment Year: 2006-2007
• Appeal Filed On: 03-12-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: P S NAIK
• Assessee Lawyers: V L JAIN
• Keywords: Unexplained cash credit; Gift; Deemed to accrue or arise in india; Question of law; Onus to prove
• Section: 143(3); 131; 68; 69; 263

Judgement Text

] IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE SHRI ANIL CHATURVEDI, AM AND SHRI VIKAS AWASTHY, JM / ITA NO.2394/PUN/2012 / ASSESSMENT YEAR : 2006-07 M/S. PENTAGON DEVELOPERS, OFFICE NO.504, 5 TH FLOOR, ASHOK SANKUL II, ASHOK NAGAR, RANGE HILLS, ROAD, PUNE 411007. PAN NO.AAHFP8013B. . / APPELLANT V/S DY. COMMISSIONER OF INCOME TAX , CIRCLE 3, PUNE. . / RESPONDENT / APPELLANT BY : SHRI V.L. JAIN / RESPONDENT BY : SHRI P.S. NAIK. / ORDER PER ANIL CHATURVEDI, AM : THIS APPEAL OF THE ASSESSEE IS EMANATING OUT OF THE ORDE R OF COMMISSIONER OF INCOME TAX (A) II, PUNE DATED 26.07.2012 FOR THE ASSESSMENT YEAR 2006-07. 2. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERIAL ON R ECORD ARE AS UNDER :- / DATE OF HEARING : 08.02.2017 / DATE OF PRONOUNCEMENT: 03.03.2017 2 ITA NO.2394/PUN/2012 AY.NO.2006-07 2.1 ASSESSEE IS A PARTNERSHIP FIRM STATED TO BE ENGAGED IN THE BUSINESS OF CONSTRUCTION AND DEVELOPMENT OF RESIDENTIAL COM PLEXES. ASSESSEE FILED ITS RETURN OF INCOME FOR A.Y. 2006-07 ON 31.10 .2006 DECLARING TOTAL INCOME OF RS.1,52,20,610/-. THE CASE WAS SELE CTED FOR SCRUTINY AND THEREAFTER ASSESSMENT WAS FRAMED U/S 143(3 ) VIDE ORDER DT.28.11.2008 WHEREIN THE INCOME RETURNED BY THE ASSESSE E WAS ACCEPTED. THE AFORESAID ASSESSMENT ORDER PASSED U/S 1 43(3) WAS SET ASIDE BY LD. CIT-II, PUNE U/S 263 VIDE ORDER DT.30.03.201 1 AND THE AO WAS DIRECTED TO LOOK INTO THE ASPECTS CONTAINED IN TH E ORDER AND REVISE THE ASSESSMENT. PURSUANT TO THE DIRECTIONS OF LD . CIT-II, PUNE, A FRESH ASSESSMENT ORDER WAS PASSED U/S 143(3) R.W.S. 26 3 VIDE ORDER DT.30.12.2011 AND THE TOTAL INCOME WAS DETERMINED AT RS.1,73,45,540/-. AGGRIEVED BY THE ORDER OF AO, ASSESSEE C ARRIED THE MATTER BEFORE LD. CIT(A), WHO VIDE ORDER DT.26.07.2012 (IN APP EAL NO.PN/CIT(A)/DCIT CIR-3/450/11-12) DISMISSED THE APPEAL O F THE ASSESSEE. AGGRIEVED BY THE ORDER OF LD. CIT(A), ASSESSEE IS NOW IN APPEAL BEFORE US AND HAS RAISED THE FOLLOWING GROUNDS : 1 . THE LEARNED CIT(A) HAS ERRED IN LAW AND ON FACTS IN CONFIRMING THE ADDITION OF RS.18,25,000/- ON ACCOUN T OF UNEXPLAINED CASH DEPOSITS U/S 68 OF THE INCOME TAX ACT, 1961. 2. THE LEARNED CIT(A) FURTHER ERRED IN LAW AND ON F ACTS IN CONFIRMING AN ADDITION OF RS.2,99,929/- U/S 40(A)(I A) OF THE INCOME TAX ACT, 1961. 3. BEFORE US, AT THE OUTSET, LD.A.R. SUBMITTED THAT HE DOES NOT WISH TO PRESS GROUND NO.2. CONSIDERING THE AFORESAID SUBMISSION OF LD.A.R., GROUND NO.2 IS DISMISSED AS NOT PRESSED. 4. GROUND NO.1 IS ON ACCOUNT OF UNEXPLAINED CASH DEPOSITS U/S 68. 3 ITA NO.2394/PUN/2012 AY.NO.2006-07 5. IT WAS NOTICED THAT ASSESSEE HAD TAKEN LOANS AND A DVANCES TO THE TUNE OF RS.1,05,75,000/- FROM VARIOUS PERSONS WHICH INC LUDED THE RECEIPT FROM FOLLOWING PERSONS: DEEPA K ADWANI RS.5,00,000/ - DILIP M. GIR A MKAR RS. 4,25,000/ - MADHURA KESKAR RS. 4,00,000/ - K. SADHU THORAT RS. 5,00,000/ - TO PROVE THE GENUINENESS OF TRANSACTION OF LOAN FROM SHRI K. SADHU THORAT, ASSESSEE FURNISHED PAN DETAILS, CONFIRMATION AND A DDRESS DETAILS DURING THE COURSE OF ASSESSMENT. IT WAS FURTHER SUBMITTED THAT FURTHER DETAILS COULD NOT BE SUBMITTED ON ACCOUNT OF NON CO-OPERATION FROM SADHU THORAT. ACCORDINGLY, A SUMMON WAS ISSUED U/ S 131 OF THE ACT, WHEREIN VARIOUS DETAILS LIKE COPY OF PAN, IT RETUR NS, BANK ACCOUNT FROM WHICH CHEQUES WERE ISSUED WERE CALLED BY AO . IT IS NOTICED BY AO THAT THERE WAS NO COMPLIANCE FROM MR.SA DHU THORAT AND ACCORDINGLY, IT WAS HELD THAT ASSESSEE HAS NOT DISCH ARGED HIS ONUS TO PROVE THE GENUINENESS OF TRANSACTION AND THE CREDITW ORTHINESS OF MR. SADHU THORAT AND ACCORDINGLY, THE AMOUNT OF RS.5,00,00 0/- WAS TREATED AS UNDISCLOSED INCOME OF THE ASSESSEE U/S 68 O F THE ACT. WITH RESPECT TO LOAN FROM SHRI DILIP M. GIRAMKAR, IT WAS OBSERVED THAT THE BANK ACCOUNT OF DILIP GIRAMKAR REFLECTED FEW CREDIT ENTRIES BY CASH AND HIS CAPITAL ACCOUNT SHOWED A GIFT RS.6,00,000/- FROM HIS MOTHER- IN-LAW. AO THEREFORE CONCLUDED THAT NEITHER THE ASSESSE E NOR DILIP GIRAMKAR HAS BEEN ABLE TO PROVE THE GENUINENESS OF THE TRANSACTION AND ACCORDINGLY RS.4,25,000/- WAS TREATED AS UNDISCLOSED INCOME OF THE ASSESSEE U/S 68 OF THE ACT. IN CASE OF RECEIPT OF LOAN FROM MRS. 4 ITA NO.2394/PUN/2012 AY.NO.2006-07 MADHURA KESKAR, ON PERUSAL OF BANK ACCOUNT, IT WAS NOTIC ED THAT THERE WERE CASH TRANSACTIONS IMMEDIATELY PRIOR TO THE T RANSACTIONS OF LOAN GIVEN TO THE ASSESSEE. IT WAS ALSO NOTICED THAT AP ART FROM THE ENTRIES OF RECEIPT IN CASH AND PAYMENT OF GIVING LOAN TO AS SESSEE, THERE WERE HARDLY ANY OTHER MAJOR DEPOSITS IN THE ACCOUNT A ND THEREFORE IT WAS CONCLUDED THAT THE CREDITWORTHINESS OF MADHURA KES KAR WAS NOT PROVED AND ACCORDINGLY THE AMOUNT OF RS.4,00,000/- REC EIVED FROM MADHURA KESKAR WAS TREATED AS UNDISCLOSED INCOME OF THE ASSESSEE U/S 68 OF THE ACT. IN CASE OF DEEPA K ADVANI FROM WHO M ASSESSEE HAD STATED TO HAVE TAKEN LOAN OF RS.5,00,000/-, IT WAS NOTICED BY REVENUE THAT IN HER BANK ACCOUNT THAT THERE WERE CASH DEPOS IT IMMEDIATELY PRIOR TO HER GIVING LOAN TO THE ASSESSEE AND THEREFORE IT WAS CONCLUDED THAT ASSESSEE HAS NOT BEEN ABLE TO PROVE THE CREDITWO RTHINESS OF DEEPA K ADVANI AND THEREFORE THE AMOUNT OF RS.5,00,000/- WAS TR EATED AS UNDISCLOSED INCOME OF THE ASSESSEE U/S 68 OF THE ACT. AC CORDINGLY, ADDITION AGGREGATING TO RS.18,25,000/- WAS MADE ON ACCOUN T OF UNEXPLAINED CASH DEPOSITS. AGGRIEVED BY THE ORDER OF AO, ASSESSEE CARRIED THE MATTER BEFORE LD. CIT(A) AND THE APPEAL OF ASS ESSEE WAS DISMISSED BY LD. CIT(A) BY HOLDING AS UNDER : 3.3 DURING THE APPELLATE PROCEEDINGS, THE LD COUNS EL OF THE APPELLANT HAS CONTENDED THAT THE ASSESSING OFFICER HAS BEEN PROVIDED WITH THE CONFIRMATION LETTERS AND THE BANK STATEMENTS OF ALL THE LENDERS AND THAT ALL THE LENDERS HAVE SU BMITTED THEIR REPLIES IN RESPONSE TO THE SUMMONS U/S 131 EXCEPT M R. THORAT AND IN WHOSE CASE SUMMONS HAVE BEEN SERVED AND THE PAN DETAILS AND CONFIRMATION ARE ON RECORD. IT HAS THU S BEEN SUBMITTED THAT THE ONUS OF PROVING CREDIT U/S 68 IS MORE THAN DISCHARGED BY THE APPELLANT. IT HAS BEEN ALSO CONT ENDED THAT THE APPELLANT IS NOT EXPECTED TO PROVE THE BASIS OF SOURCE AND IT IS NOT THE CASE OF THE ASSESSING OFFICER THAT THE C REDITS IN THE ACCOUNTS ARE AMOUNT PROVIDED BY THE APPELLANT AND, THEREFORE, IT DOES NOT LIE TO THE ASSESSING OFFICER TO INFER THAT THE CREDITWORTHINESS IS NOT PROVED. THE APPELLANT HAS PLACED RELIANCE ON THE FOLLOWING JUDICIAL IN SUPPORT: A) SAROGI CREDIT CORPORATION VS COMMISSIONER OF INCOME TAX (PATNA) 103 ITR 344 5 ITA NO.2394/PUN/2012 AY.NO.2006-07 B) S. HASTIMAL VS COMMISSIONER OF INCOME TAX (MAD) 49 ITR 273 C) COMMISSIONER OF INCOME TAX VS PRAGATI CO-OPERATIVE BANK LTD (GUJ) 149 TAXMAN 149 D) LATE MANGILAL AGARWAL THROUGH LRS VS ACIT 163 TAXMAN 399 D) NEMI CHAND KOTHARI VS CIT & ANR 136 TAXMAN 213 F) LABH CHAND BOHRA VS ITO 8 DTR 44 THUS, ON PERUSAL OF THE MATERIAL ON RECORD AND APPL ICATION OF THE FACTS IT BECOMES CLEAR THAT THE CREDITWORTHINESS OF THE PERSONS TO HAVE ADVANCED THE LOANS WAS NEVER PROVED BY THE APP ELLANT. THE APPELLANTS CONTENTION THAT THE CONFIRMATION OF THE LOANS AND IDENTITY OF THE CREDITORS HAD BEEN FILED DURING THE ASSESSMENT PROCEEDINGS IS NOT SUFFICIENT TO JUSTIFY AND PROVE THE GENUINENESS OF THE TRANSACTION. THE ONUS TO PROVE THE NATURE A ND SOURCE OF CREDIT IS UPON THE APPELLANT AND THE FILLING A MERE CONFIRMATION LETTER WOULD NOT AMOUNT TO SUFFICIENT DISCHARGE OF THE BURDEN PLACED UPON THE APPELLANT U/S 68 OF THE I.T. ACT. THIS IS BECAUSE U/S 68, THE APPELLANT HAS TO PROVE NOT ONLY THE IDE NTITY OF THE CREDITOR BUT HAS TO FURTHER PROVE THAT THE CREDITOR HAD THE REQUISITE CAPACITY TO ADVANCE THE LOAN AND ALSO PRO VE THE GENUINENESS OF THE TRANSACTION. THE A.O. HAS MADE EVERY POSSIBLE EFFORT TO VERIFY THE TRANSACTION SO AS TO SATISFY HIMSELF WITH RESPECT TO THE GENUINENESS OF THE TRANSACTION BUT AS EVIDENT FROM THE MATERIAL BROUGHT ON RECORD, IN NONE OF THE CASES WHEREIN THE LOANS HAVE BEEN TAXED AS UNEXPLAINED CA SH CREDIT U/S 68 EITHER AS UNEXPLAINED CASH CREDIT U/S 68, EI THER THE REQUISITE PROOF OR EVIDENCE HAVE NOT BEEN FURNISHED OR ANY ACCEPTABLE EXPLANATION GIVEN BY THE APPELLANT. 3.4 THE PUNJAB AND HARYANA HIGH COURT IN THE CASE O F CHAND PRAKASH VIJ VS. CIT (2009) 315 ITR 251 (P&H), HELD THAT WHERE THERE IS A CLEAR FINDING OF FACT THAT THE ASSESSEE WAS NOT ABLE TO FURNISH A SATISFACTORY EXPLANATION FOR THE SOURCE O F A CASH DEPOSITED INTO THE SAVINGS ACCOUNT, ADDITION OF THE SAME IS JUSTIFIED. THE CONTENTION OF THE APPELLANT THAT TH E ONUS OF PROVING CREDIT U/S 68 IS MORE THAN DISCHARGED IS P RIMA FACIE NOT CORRECT BASED ON THE FACTS AND MATERIAL BROUGHT ON RECORD. THE CREDIT WORTHINESS OF THE PERSONS FORM WHOM LOAN HAV E BEEN TAKEN BY THE APPELLANT CANNOT BE ROUTINELY ASSUMED AS THE REQUIRED DETAILS AND EVIDENCES IN SUPPORT OF THE AF ORESAID UNSECURED LOANS HAVE NOT BEEN FURNISHED AS TO ESTAB LISH THE CREDITWORTHINESS OF THE LENDERS OR GENUINENESS OF T HE TRANSACTION ATTRIBUTED TO THEM. 3.5 SEC. 68 PLACES THE BURDEN OF PROOF ON THE TAX P AYER TO EXPLAIN THE NATURE AND SOURCE OF ANY CREDIT FOUND I N THE BOOKS OF ACCOUNT. IT WOULD BE PERTINENT TO MENTION THE CASE OF MANGILAL JAIN VS ITO (2009) 315 ITR (MAD), WHEREIN IT WAS HE LD THAT MERE PROOF OF IDENTITY OF CREDITOR OR THE FACT THAT THE AMOUNT IS RECEIVED BY CHEQUE, NEED NOT ALWAYS MEAN THAT THE C REDIT IS GENUINE WHERE THE ASSESSEE DOES NOT HAVE CAPACITY T O MAKE ADVANCES AND THERE ARE OTHER CIRCUMSTANCES FOR THE INFERENCE THAT THE TRANSACTION IS NOT GENUINE, THE ADDITION O F THE AMOUNT COULD BE JUSTIFIED. 3.6 IN THE CASE OF DCIT VS PHOOLMATI DEVI (2009) 31 4 ITR (AT) 1 (DEL) IT WAS HELD THAT DOCUMENTARY EVIDENCES ARE NORMALLY ACCEPTED AS A PROOF OF TRANSACTION, BUT WHERE SUCH EVIDENCE IS 6 ITA NO.2394/PUN/2012 AY.NO.2006-07 UNBELIEVABLE IN THE LIGHT OF THE TEST OF HUMAN PROB ABILITIES AND SURROUNDING CIRCUMSTANCES, THE REJECTION SUCH EVIDE NCE WOULD BE JUSTIFIED. IN THIS CASE THE APPELLANT HAD FILED CONFIRMATION LETTERS IN RESPECT OF ALLEGED BORROWINGS BY DEMAND DRAFT. THOUGH THIS HAD BEEN RECEIVED BY DEMAND DRAFTS, THE CORRESPONDING AMOUNT HAD BEEN DEPOSITED IN THE DEPO SITOR BANK ACCOUNT IN CASH JUST BEFORE THE ISSUE OF BANK DRAFT S FOR THE AMOUNT OF THE DEPOSITS DRAWING INFERENCE FROM THE C UMULATIVE FACTS, THE TRIBUNAL FOUND THAT THE CREDITS MERELY O N THE BASIS OF DOCUMENTS ADMITTING THE LOAN SHOULD NOT HAVE BEEN A CCEPTED AND THUS ALLOWED THE DEPARTMENTAL APPEAL. THE ITAT RELIED ON THE RULINGS OF THE SUPREME COURT IN THE CASE OF CIT VS DURGA PRASAD MORE (1971) 82 ITR 540 (SC) AND SMT. SUMATI DAYAL VS CIT (195) 214 ITR 801 (SC). THE ASSESSING OFFICER HAS ARRIVED AT THE FINDING THAT THE LOAN AMOUNT BEING UNEXPLAINED CREDIT U/S 68 HAS BEEN ARRIVED AFTER CONSIDERING THE SURROUNDI NG CIRCUMSTANCES AND APPRECIATION OF THE FACT OBJECTIV ELY AND ALSO AFTER CONSIDERING THE EVIDENCES ADDUCED BEFORE HIM BY THE APPELLANT. 3.7 THE SUBMISSION OF THE APPELLANT HAS BEEN CONSID ERED AND ALSO THE DOCUMENTS SUBMITTED DURING THE COURSE OF A PPELLATE PROCEEDINGS. THE DEEMING PROVISIONS COMES INTO PLA Y ONLY WHEN ANY SUM IS FOUND CREDITED IN THE BOOKS OF THE ASSES SEE MAINTAINED FOR ANY PREVIOUS YEAR FOR THE SOURCE AND NATURE OF WHICH, EITHER NO EXPLANATION IS OFFERED BY THE ASSE SSEE OR THE EXPLANATION OFFERED BY THE ASSESSEE IS NOT SATISFAC TORY. THUS SECTION 68 AND OTHER RELATED SECTIONS GETS ACTIVATE D ONLY WHEN ANY SUM IS FOUND CREDITED IN THE BOOKS OF THE ASSES SEE AS HELD IN THE CASE OF BANSHIDHAR AGARWAL PANNA VS CIT (198 4) 148 ITR 523 (MP). THE LEGAL POSITION U/S 68 IS THAT EVEN I N A CASE WHERE THE AMOUNT IS CREDITED IN THE BOOKS OF THE ASSESSEE ON THE VERY FIRST DAY OF THE ACCOUNTING YEAR AND THE EXPLANATIO N OFFERED BY THE ASSESSEE IS NOT ACCEPTED, COURTS HAVE HELD THAT SUCH AMOUNT IS ASSESSABLE AS THE INCOME OF THE ASSESSEE OF THE ACCOUNTING YEAR FOR WHICH THE BOOKS ARE MAINTAINED U/S 68. IT IS THE ASSESSEE WHO IS REQUIRED TO OFFER AN EXPLANA TION ABOUT THE NATURE AND SOURCE OF CREDIT FOR WHICH AN ENTRY IS F OUND IN THE BOOKS OF ACCOUNT. THE LANGUAGE OF SECTION 68 SHOW S THAT ITS SCOPE IS GENERAL IN NATURE AND IS APPLICABLE TO ALL CREDIT ENTRIES WHETHER THEY STAND IN THE NAME OF THE ASSESSEE OR I N THE NAME OF THE THIRD PARTY. UNDER SECTION 68 IT IS NECESSA RY FOR THE ASSESSEE TO PROVE PRIMA FACIE THE TRANSACTIONS WHIC H RESULT IN CASH CREDIT IN HIS BOOKS OF ACCOUNT SO THAT THE GEN UINENESS OF THE TRANSACTION IS PROVED AND IF ONLY WHEN THE ASSE SSEE HAS PROPER EVIDENCE TO ESTABLISH PRIMA FACIE THE AFORES AID FACT, THE ONUS SHIFTS ON TO THE REVENUE. 3.8 UNDER THE DEEMING PROVISIONS OF THE I.T. ACT, 1 961, THE POSITION IS THAT THE MERE EXISTENCE OF A CREDIT ENT RY IS SUFFICIENT TO ATTRACT THE PROVISIONS AND ONCE THE APPELLANTS EXPLANATION IS NOT SATISFACTORY, THE CASH CREDITS ARE TO BE CHARGE D TO TAX IN AN EXCEPTIONABLE MANNER. IT WAS SO HELD IN ONE OF THE MOST LANDMARK CASES OF THE HON'BLE SUPREME COURT OF SUMA TI DAYAL (1995) 214 ITR 801 (SC). FROM A PLAIN READING OF T HE REQUISITE SECTIONS IT IS EVIDENT THAT WHEN THE ASSESSEE OFFER S NO EXPLANATION ABOUT THE NATURE AND SOURCE OF THE CRED ITS, ITS VALUE COULD BE DEEMED INCOME OF THE ASSESSEE. AN EXPLANA TION OFFERED, IF NOT ACCEPTED IS NO EXPLANATION ABOUT TH E NATURE AND SOURCE OF THE CREDITS, ITS VALUE COULD BE DEEMED IN COME OF THE ASSESSEE. AN EXPLANATION OFFERED, IF NOT ACCEPTED IS NO EXPLANATION IN LAW AND NOT ONLY THIS THE LEGISLATUR E WHILE 7 ITA NO.2394/PUN/2012 AY.NO.2006-07 ENACTING THE DEEMING PROVISIONS OF THE IT ACT FALLI NG UNDER SECTION 68, 69 TO 69D OF THE I.T. ACT, 1961, HAS CL ARIFIED THAT IN CASE THE EXPLANATION OFFERED IS NOT SATISFACTORY TH E VALUE OF THE UNEXPLAINED DEPOSITS SHALL BE DEEMED TO BE THE INCO ME OF THE ASSESSEE. THERE CAN BE NO GENERAL PROPOSITION OF L AW APPLICABLE TO ALL CASES IRRESPECTIVE OF THE FACTS AND CIRCUMST ANCES THEREOF. ONE THING WHICH CAN BE SAID WITHOUT MUCH HESITATION IS THAT THE BURDEN IS ALWAYS ON THE ASSESSEE. IF AN EXPLANATIO N IS ASKED FOR THE TAXING AUTHORITIES TO INDICATE THE SOURCE O F ACQUISITION OF A PARTICULAR ASSET ADMITTEDLY OWNED BY THE PERSON CON CERNED. THE BURDEN CAST UPON THE APPELLANT HAS NOT BEEN DIS CHARGED EITHER AT THE STAGE OF ASSESSMENT OR DURING THE APP ELLATE PROCEEDINGS BY FURNISHING ANY ACCEPTABLE EXPLANATIO N. 3.9 SECTION 110 OF THE EVIDENCE ACT IS MATERIAL IN THIS RESPECT WHICH STIPULATES THAT WHEN THE QUESTION IS WHETHER ANY PERSON IS THE OWNER OF ANYTHING OF WHICH HE/SHE HAS SHOWN TO BE IN POSSESSION, THE ONUS OF PROVING THAT HE/SHE IS NOT THE OWNER, IS ON THE PERSON WHO AFFIRMS THAT HE/SHE IS NOT THE OW NER. IN OTHER WORDS, IT FOLLOWS FROM A WELL SETTLED PRINCIP LE OF LAW THAT NORMALLY, UNLESS CONTRARY IS ESTABLISHED TILE ALWAY S FOLLOWS POSSESSION. IT WAS ALSO HELD SO IN THE CASE OF CHU HARMAL VS. CIT (1998) 72 ITR 250 (SC). IN A RECENT JUDGMENT T HE PUNJAB & HARYANA HIGH COURT IN THE CASE OF SURINDER KUMAR VS ITO (2010) 326 ITR 21, ON SIMILAR FACTS THE ACTION OF T HE A.O., WAS UPHELD. IT WAS CONCLUDED THAT THE FINDINGS OF FACT RECORDED BY THE A.O., CIT (A) AS WELL AS TRIBUNAL THAT FIXED DE POSIT WITH BANK WAS ASSESSEES UNEXPLAINED INCOME WHICH COULD BE AD DED TO TAXABLE INCOME, CANNOT BE HELD TO BE PERVERSE AND N O QUESTION OF LAW ARISE. 3.10 SEC. 68 COMES INTO PLAY ONLY WHEN ANY SUM IS F OUND CREDITED IN THE BOOKS OF ACCOUNT OF THE ASSESSEE MA INTAINED FOR ANY PREVIOUS YEAR FOR THE SOURCE AND NATURE OF WHIC H EITHER NO EXPLANATION IS OFFERED BY THE ASSESSEE OR THE EXPLA NATION OFFERED BY THE ASSESSEE IS NOT SATISFACTORY. UNDER SEC. 68 , IT IS THE ASSESSEE WHO IS REQUIRED TO OFFER AN EXPLANATION AB OUT THE NATURE AND SOURCE OF CREDIT, FOR WHICH AN ENTRY IS FOUND, THUS THE INITIAL ONUS IS ON THE APPELLANT TO EXPLAIN THE NAT URE AND SOURCE OF CASH CREDIT WHETHER THEY STAND IN THE ASSESSEES ACCOUNT OR IN THE ACCOUNT OF A THIRD PARTY AND SUCH EXPLANATIO N HAS TO BE TO THE SATISFACTION OF THE AO, IT WAS SO HELD IN THE A PEX COURT DECISION OF KALE KHAN MOHAMMAD HANIF VS CIT (1963) 50 ITR 1 (SC) UNDER SEC.68, IT IS NECESSARY FOR THE ASSESSEE TO PROVE PRIMA FACIE THE TRANSACTION WHICH RESULTS IN A CASH CREDIT IN HIS BOOKS OF ACCOUNT. IN THE PRESENT CASE THE APPELLA NT HAS NOT BEEN ABLE TO PRIMA FACIE PROVE THE TRANSACTION ITSE LF, AND THUS THE GENUINENESS OF THE TRANSACTION REMAINED TO BE E XPLAINED. ONLY WHEN THE APPELLANT HAS PROPER EVIDENCE TO ESTA BLISH PRIMA FACIE THE AFORESAID FACTS THEN THE ONUS WOULD HAVE SHIFTED TO THE ASSESSING OFFICER. IF THE PRIMA FACIE INFERENCE ON THE FACT IS THAT THE ASSESSEES EXPLANATION IS PROBABLE, THE ONUS WI LL SHIFT TO THE REVENUE. THOUGH THE CONFIRMATORY LETTERS WERE ACCE PTED AS EVIDENCE, HOWEVER, THE ONUS DOES NOT GET DISCHARGED MERELY BY SUCH CONFIRMATORY EVIDENCES AS FOUND IN CIT VS UNIT ED COMMERCIAL AND INDUSTRIAL CO. (P) LTD. (1991) 187 ITR 596 (CAL) NOR IS THE FACT THAT THE AMOUNT S RECEIVED BY WAY O F ACCOUNT PAYEE CHEQUES. SUCH EVIDENCE IS NOT SACROSANCT AS WAS POINTED OUT IN CIT VS KORLAY TRADING CO. LTD. (1998) 232 I TR 820 (CAL). 3.9 SO FAR AS THE CASE LAWS RELIED UPON BY THE APPE LLANT ARE CONCERNED, THEY DO NOT APPLY TO THE FACTS OF THE PR ESENT CASE 8 ITA NO.2394/PUN/2012 AY.NO.2006-07 AND, THEREFORE, ARE DISTINGUISHABLE ON FACT. THE R ATIO OF THE DECISIONS OF SEVERAL HIGH COURTS AND TRIBUNAL DISCU SSED ABOVE CLEARLY APPLIED TO THE FACTS OF THE PRESENT CASE, W HICH ARE MORE RECENT THAN THE CASE LAWS RELIED UPON BY THE APPELL ANT. 3.10 IN VIEW OF THE ABOVE FACTS, THE ADDITION MADE BY THE ASSESSING OFFICER IS UPHELD AND THE GROUND OF APPEA L NO. 1 RAISED BY THE APPELLANT IS LIABLE TO BE DISMISSED. AGGRIEVED BY THE ORDER OF LD. CIT(A), ASSESSEE IS NOW IN A PPEAL BEFORE US. 6. BEFORE US, LD.A.R. REITERATED THE SUBMISSIONS MADE BEFORE AO AND LD. CIT(A) AND FURTHER POINTED TO THE SUBMISSIONS WHICH ARE REPRODUCED BY LD. CIT(A) IN HIS ORDER. FROM THE AFORESAID SUBMISSIONS MADE BEFORE LD. CIT(A) HE SUBMITTED THAT IN CASE OF SHRI K . SADHU THORAT, ASSESSEE HAD FURNISHED HIS PAN DETAILS, CONFIRMATION AND ADDRESS DETAILS, THE BANK STATEMENT WHICH REFLECTED THE ENTRIES OF THE LOAN TRANSACTION. SINCE THERE WAS NON-COOPERATION FROM M R. SADHU THORAT, ASSESSEE HAD REQUESTED AO TO ISSUE NOTICE U/S 133 TO HIM, WHICH REMAINED UN-COMPLIED. WITH RESPECT TO THE ADDITION O F THE LOAN RECEIVED FROM DILIP M. GIRAMKAR, HE SUBMITTED THAT HE IS A P ARTNER OF THE FIRM. THE ASSESSEE HAD FURNISHED COPY OF PAN CARD, A DDRESS, COPY OF IT RETURNS, HIS BANK STATEMENT, HIS STATEMENT OF ACCO UNTS AND LEDGER EXTRACTS AND THE CAPITAL ACCOUNT BEFORE THE AO. WITH RESPECT TO MADHURA KESKAR, ASSESSEE HAD SUBMITTED ACCOUNT FORM, C OPY OF PAN CARD, BANK STATEMENTS AND LEDGER EXTRACTS AND IN RESP ONSE TO THE SUMMONS ISSUED BY THE AO, SHE HAD CONFIRMED THAT LOANS W ERE GIVEN BY HER TO THE ASSESSEE AND THE LOANS WERE OUT OF HER OWN FUND. WITH RESPECT TO THE LOAN FROM DEEPA K. ADVANI, IT WAS SUBMITTED THAT ASSESSEE HAD FURNISHED THE ACCOUNTS FORMS, COPY OF PAN, C OPY OF IT RETURNS, BANK STATEMENT AND LEDGER EXTRACT AND FURTHER IN RESPONSE TO SUMMONS, SHE HAD CONFIRMED OF GIVING UNSECURED LOANS TO TH E 9 ITA NO.2394/PUN/2012 AY.NO.2006-07 ASSESSEE AND WHICH WERE DULY RECORDED IN HER ACCOUNTS . THE LD.A.R. THEREFORE SUBMITTED THAT THE ASSESSEE HAS DISCHARGED T HE INITIAL BURDEN OF PROOF AND ONCE THE ONUS HAS BEEN DISCHARGED AND THE ONUS SHIFTS ON THE REVENUE. HE FURTHER SUBMITTED THAT IT IS A SETTLED LAW THAT ASSESSEE IS NOT REQUIRED TO PROVE THE SOURCE OF SOURCE. HE ALSO PLACED RELIANCE ON THE DECISION IN THE CASE OF CIT VS. DWAR AKADISH INVESTMENT P. LTD (2010) 330 ITR 298 (DEL) AND THE DECISION OF BOMBAY HIGH COURT IN ORIENT TRADING CO. LTD., VS. CIT (BOM) 49 ITR 7 23. HE ALSO RELIED ON SAROGI CREDIT CORPORATION VS. CIT 103 ITR 344 (PATNA), NEMI CHAND KOTHARI VS. CIT AND ANOTHER 136 TAXMAN 213 (GAU) AND LABH CHAND BOHRA VS. ITO 8 DTR 44 (RAJ). HE THEREFORE SUBMITTED THAT THE ADDITION BE DELETED. LD.D.R. ON THE OTHER HAND SUPPORTED THE ORDER OF AO AND LD. CIT(A) AND FURTHER PLACED RELIANCE ON T HE DECISION IN THE CASE OF Y.M. SINGLA VS. CIT REPORTED IN (2015) 56 TAX MANN.COM 17 (SC). 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE M ATERIAL ON RECORD. THE ISSUE IN THE PRESENT CASE IS WITH REGARD TO ADDITION U/S 68 OF THE ACT OF THE AMOUNTS OF LOANS RECEIVED BY THE ASSESSEE. IT IS AN UNDISPUTED FACT THAT TO PROVE THE IDENTITY AND SOURC E OF THE DEPOSITS FROM THE 4 PARTIES, ASSESSEE HAS FURNISHED THE C OPY OF PAN CARDS, COPY OF BANK ACCOUNT, COPY OF IT RETURNS BEFORE T HE AO. IN CASE OF DILIP M. GIRAMKAR, MADHURA KESKAR AND DEEPA K. ADVAN I IN RESPONSE TO THE SUMMONS ISSUED BY THE AO, THE LENDERS H AD CONFIRMED OF HAVING ADVANCED LOAN TO THE ASSESSEE. IN CASE OF K. SADHU THORAT IN RESPONSE TO THE SUMMONS ISSUED U/S 133, THERE WAS N O COMPLIANCE BY SHRI SADHU THORAT. CONSIDERING THE FACT THAT ASSESS EE HAS FURNISHED THE PAN COPY, COPY OF BANK ACCOUNT, IT STATEME NTS, WE ARE 10 ITA NO.2394/PUN/2012 AY.NO.2006-07 OF THE VIEW THAT ASSESSEE HAS DISCHARGED THE INITIAL ONU S CAST UPON THE ASSESSEE TO PROVE THE CASH CREDIT. ONCE THE ASSESSEE HAS DISCHARGED THE INITIAL ONUS, THE BURDEN SHIFTS ON THE REVENUE TO SHOW AS TO WHY THE ASSESSEES SUBMISSION COULD NOT BE ACCEPTED AND WH Y IT MUST BE HELD THAT THE ENTRY APPEARING IN THE NAME OF THIRD PARTY STILL REPRESENTED THE INCOME OF THE ASSESSEE FROM SUPPRESSE D SOURCES. U/S 68 OF THE I.T. ACT, 1961 ASSESSEE HAS TO PROVE THREE C ONDITIONS, I.E., I) IDENTITY OF THE CREDITOR, II) THE CAPACITY TO SUCH CREDITOR T O ADVANCE MONEY AND III) GENUINENESS OF THE TRANSACTIONS. AS ALL THE AFORESAID CONDITIONS ARE PROVED, THE BURDEN SHIFTS ON THE REVENUE TO PROVE THAT THE AMOUNT BELONGS TO ASSESSEE. FURTHER VARIOUS HIGH C OURTS HAVE HELD THAT ASSESSEE CANNOT BE ASKED TO PROVE THE SOU RCE OF SOURCE OR THE ORIGIN OF ORIGIN AND FOR THIS PROPOSITION, WE DRAW SUPP ORT FROM THE DECISION IN THE CASE OF SARGOI CREDIT CORPORATION VS. CIT 103 ITR 344 (PATNA) AND CIT VS. DWARKADISH INVESTMENT P. LTD., (2010) 3 30 ITR 298 (DELHI). CONSIDERING THE TOTALITY OF THE AFORESAID FACTS, W E ARE OF THE VIEW THAT IN THE PRESENT CASE THE ASSESSEE HAD FULL Y DISCHARGED ITS INITIAL ONUS ON PROVING THE CASH CREDITS AND IN SUCH A SIT UATION, THE ADDITION U/S 68 OF THE ACT IN THE PRESENT CASE WAS UN-C ALLED FOR. WE THEREFORE DIRECT THE DELETION OF ADDITION MADE BY THE AO. THUS, THE GROUNDS OF THE ASSESSEE IS ALLOWED. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY AL LOWED. ORDER PRONOUNCED ON THE 3 RD DAY OF MARCH, 2017. SD/- SD/- ( VIKAS AWASTHY ) ( ANIL CHATURVEDI ) / JUDICIAL MEMBER ! / ACCOUNTANT MEMBER PUNE; ! DATED : 3 RD DAY OF MARCH, 2017. YAMINI 11 ITA NO.2394/PUN/2012 AY.NO.2006-07 '#$%&'&$ / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3 . 4. 5 6. CIT-II, PUNE. CIT(A)-III, PUNE. #$% &&'(, * '(, / DR, ITAT, B PUNE; %+, - / GUARD FILE. / BY ORDER, // TRUE COPY // // TRUE COPY // . /012 / ASSISTANT REGISTRAR, * '( , / ITAT, PUNE.