Sh. Sudhir Choupal, Yamunanagar V. ITO, Yamunanagar

ITA 251/CHANDI/2011

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 73559 (ITAT-CHANDIGARH)
• Duration Of Justice: 3 year(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-03-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 18-03-2014
• Assessment Year: 2004-2005
• Appeal Filed On: 10-03-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: MANJIT SINGH
• Keywords: Business income; Source of fund; Additional evidence
• Section: 143(3); 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH A, CHANDIGARH BEFORE SHRI T.R.SOOD, ACCOUNTANT MEMBER AND MS. SUSHMA CHOWLA, JUDICIAL MEMBER ITA NO.251/CHD/2011 ASSESSMENT YEAR : 2004-05 SH.SUDHIR CHOUPAL, VS. THE INCOME TAX OFFICER, C/O CHOUPAL PLYWOOD, WARD-3, VILLAGE NABH, YAMUNANAGAR. YAMUNANAGAR. PAN: AAMPC1838N (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI AMAN PARTI RESPONDENT BY : SHRI MANJIT SINGH, DR DATE OF HEARING : 18.03.2014 DATE OF PRONOUNCEMENT : 25.03.2014 O R D E R PER SUSHMA CHOWLA, J.M. : THE APPEAL FILED BY THE ASSESSEE IS AGAINST THE ORD ER OF THE COMMISSIONER OF INCOME TAX (APPEALS), PANCHKULA DAT ED 11.01.2011 AGAINST THE ORDER PASSED UNDER SECTION 143(3) OF IN COME TAX ACT, 1961 (IN SHORT THE ACT). 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. THAT THE LEARNED CIT(APPEALS) HAS ERRED IN CONF IRMING THE ADDITION OF RS.465000/- ON A/C OF CREDITS IN TH E BOOKS OF ACCOUNT OF THE APPELLANT WITHOUT APPRECIAT ING THAT ALL THE PERSONS HAVE CATEGORICALLY AFFIRMED HA VING MADE DEPOSITS WITH THE APPELLANT FROM THEIR KNOWN SOURCES OF INCOME. 2. THAT THE LEARNED CIT(APPEALS) HAS GROSSLY ERRED IN APPLYING A UNIVERSAL YARD STICK TO ALL THE DEPONENT S AND HAVE DOUBTED THE CREDIT WORTHINESS OF THE CREDITORS SIMPLY ON PRESUMPTIONS AND APPRETIONS. 2 3. THAT THE APPELLANT HAS DISCHARGED HIS ONUS AS RE QUIRED UNDER SECTION 68 OF THE INCOME TAX ACT. 4. THAT THE APPELLANT RESERVES THE RIGHT TO ADD, AM END OR WITHDRAW ANY OF THE GROUNDS OF APPEAL. 3. THE ASSESSEE IN THE PRESENT APPEAL IS AGGRIEVED BY THE ADDITION OF RS.4,65,000/- ON ACCOUNT OF CREDITS IN THE BOOKS OF ACCOUNT OF THE ASSESSEE. 4. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E HAD IN ITS CAPITAL ACCOUNT MADE ADDITION OF RS.6,01,000/- AND THE SOUR CE OF THE SAID ADDITION WAS CASH LOANS RAISED FROM SEVERAL PERSONS AS ENLISTED AT PAGE 1 OF THE ASSESSMENT ORDER TOTALING RS.4,65,000/-. NO EXPLANATION WAS GIVEN BY THE ASSESSEE REGARDING BALANCE SUM OF RS.1 ,36,000/-. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AFFIDAVIT S FROM THE SAID PERSONS WHO ARE NOT ASSESSED TO TAX WERE FILED AND THE ASSESSEE WAS ASKED TO PRODUCE THE PERSONS FOR EXAMINATION. DESP ITE SEVERAL OPPORTUNITIES BEING PROVIDED TO ASSESSEE, THE PERSO NS WERE NOT PRODUCED FOR EXAMINATION. THEREAFTER WRITTEN REPLY DATED 15 .10.2009 WAS FILED BY THE ASSESSEE IN WHICH IT WAS STATED AS UNDER: 'THAT THE, ASSESSEE HAS MADE EARNEST OF EFFORTS FOR LOCATING THE PERSONS WHO HAS SUBMITTED THEIR AFFIDAVITS CONFIRMING THE ADVANCE MADE TO THE ASSESSEE DURING THE YEAR UNDER REFERENCE. INSPITE OF BEST OF EFFORTS, IT HAS NOT B EEN POSSIBLE TO LOCATE AND PRODUCE ALL THE DEPONENTS OF THE AFFIDAVITS. THOUGH THE CREDITS ARE GENUINE AND HAS BEEN OBTAINED IN THE ROUTINE COURSE OF BUSINESS, YET AS THE ASSESSEE IS ENABLE TO COMPLY WITH THE REQUIREMENT OF LAW TO PRODUCE ALL THE PERSONS WHO HAS SUBMITTED TH EIR AFFIDAVITS IN SUPPORT OF THE CONTENTION OF THE ASSESSEE, THE UNDERSIGNED IN ORDE R TO COOPERATE WITH THE DEPARTMENT, TO PURCHASE PEACE OF MIND AND TO AVOID LENGTHY LITIGAT ION, HEREBY MAKES A VOLUNTARY OFFER TO SURRENDER THE ALLEGED AMOUNT OF RS.465000/- FOR TAXATION PURPOSES ONLY SUBJECT TO NO PENALTY U/S 271(1)(C) AND PROSECUTION. THAT THE ASSESSEE HAS OPENING CAPITAL BALANCE OF RS . 601000 WITH M/S CHOPAL PLYWOOD, OUT OF WHICH RS . 465000 HAS BEEN SURRENDERED AND BALANCE OF RS. 136000 REPR ESENTS SAVING FROM SALARY AND OTHER BUSINESS INCOME EARNED DURING THE PREVIOUS YEAR. THE ASSESSEE HAS RETURNED INCOME OF RS. 138000/-' FOR ASSESSMENT YEA R 2002-03 AND RS.158462/- FOR ASSESSMENT YEAR 03-04. IT IS HUMBLY PRAYED THAT THE SUM OF RS. 136000 MAY BE TREATED AS EXPLAINED OUT OF HIS INCOME EARNED DURING THE PREVI OUS YEAR MAY BE TELESCOPED AGAINST THE INCOME EARNED DURING THE PREVIOUS YEAR. 3 5. THE EXPLANATION OF THE ASSESSEE WAS REJECTED AS THE ASSESSEE HAD FAILED TO FILE THE EVIDENCE OF PAST SAVING TOTALING RS.1,36,000/- AND SURRENDER OF RS.4,65,000/- WAS BROUGHT TO TAX. HOW EVER, PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) OF THE ACT WERE INITIATED AND NOTICE TO THE EFFECT WAS ISSUED TO THE ASSESSEE. 6. IN APPEAL BEFORE THE CIT (APPEALS) THE LEARNED A .R. FOR THE ASSESSEE POINTED OUT THAT AS THE PENALTY NOTICE UND ER SECTION 271(1)(C) OF THE ACT WAS ISSUED, THE ASSESSEE HAD NO ALTERNATIVE BUT TO APPEAL AGAINST THE ORDER OF THE ASSESSING OFFICER. FURTHER IT WAS STATED BY THE LEARNED A.R. FOR THE ASSESSEE THAT ALL THE DEPONENTS OF THE AFFIDAVITS WERE READY TO DEPOSE FOR CONFIRMATION AND VERIFICATION OF THE CONTENTS OF THE AFFIDAVITS AND IN THE INTEREST OF JUSTICE REASONABL E OPPORTUNITY OF HEARING SHOULD BE GIVEN. THE WRITTEN SUBMISSIONS FILED BY THE ASSESSEE ARE REPRODUCED UNDER PARA 3.1 AT PAGES 3 TO 5 OF THE AP PELLATE ORDER, WHICH HAS NOT BEEN REPRODUCED FOR THE SAKE OF BREVITY. T HE WRITTEN SUBMISSIONS FILED BY THE ASSESSEE WERE FORWARDED TO THE ASSESSING OFFICER FOR COMMENTS WITH THE DIRECTIONS TO EXAMINE THE CREDITORS. THE ASSESSING OFFICER AFTER EXAMINING THE CREDITORS HAD FORWARDED THE DETAILED REMAND REPORT, WHICH IS REPRODUCED BY THE CIT (APPEALS) UNDER PARA 3.2 AT PAGES 6 TO 10 OF THE APPELLATE ORDER. THE SAID REMAND REPORT WAS CONFRONTED TO THE ASSESSEE, WHO IN TURN FILED R EJOINDER. 7. THE CIT (APPEALS) VIDE PARA 3.4 TO 3.6 OBSERVED THAT THE ASSESSEE HAD FAILED TO PROVE THE CREDITWORTHINESS OF THE CRE DITORS AND HENCE THE SOURCE OF INVESTMENT AMOUNTING TO RS.4,65,000/- WAS HELD TO BE NOT EXPLAINED BY THE ASSESSEE AND THE SAME WAS TREATED AS INCOME OF THE ASSESSEE. IN RESPECT OF THE CLAIM OF SAVINGS TOTAL ING RS.1,36,000/-, THE CIT (APPEALS) NOTED THAT THE INCOME RETURNED BY THE ASSESSEE IN THE LAST THREE YEARS AFTER MEETING THE HOUSEHOLD EXPENSES DO ES JUSTIFY THE 4 INVESTMENT OF RS.1,36,000/- AND HENCE THE SAID ADDI TION WAS DELETED BY THE CIT (APPEALS). 8. THE ASSESSEE IS IN APPEAL AGAINST THE ORDER OF T HE CIT (APPEALS). THE LEARNED A.R. FOR THE ASSESSEE PLACED RELIANCE O N THE SUBMISSIONS FILED BEFORE THE CIT (APPEALS) AND POINTED OUT THAT OUT OF THE LIST OF PERSONS TWO PERSONS HAD GIVEN LOANS AND ALL OTHER F IVE PERSONS HAD GIVEN REFUNDABLE SECURITY, WHICH EXPLANATION OF THE ASSES SEE HAS NOT BEEN ACCEPTED BY THE CIT (APPEALS). 9. THE LEARNED D.R. FOR THE REVENUE PLACED RELIANCE ON THE ORDER OF THE CIT (APPEALS). 10. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE ASSESSEE WAS A PARTNER IN M/S CHAUPAL PLY WOOD AND DURING THE YEAR UNDER CONSIDERATION THERE WAS AN ADDITION OF RS.6,0 1,000/- IN THE CAPITAL ACCOUNT OF THE ASSESSEE. THE SOURCE OF THE SAID IN TRODUCTION IN CAPITAL ACCOUNT WAS CLAIMED TO BE OUT OF LOANS RECEIVED FRO M SEVERAL PARTIES TOTALING RS.4,65,000/- AND THE BALANCE SUM OF RS.1, 36,000/- BEING OUT OF HIS PAST SAVINGS. THE ASSESSING OFFICER HAD MADE AN ADDITION OF RS.6,01,000/- WHICH WAS RESTRICTED TO RS.4,65,000/- BY THE CIT (APPEALS). THE ASSESSEE HAD RECEIVED THE SAID AMOU NT TOTALING RS.4,65,000/- FROM EIGHT DIFFERENT PERSONS AND THE ASSESSEE HAD FAILED TO FURNISH ANY INFORMATION BEFORE THE ASSESSING OFFICE R AND HAD SURRENDERED SUM OF RS.4,65,000/- DURING THE ASSESSM ENT PROCEEDINGS AND THE ADDITION TO THE EFFECT WAS MADE IN THE HANDS OF THE ASSESSEE. HOWEVER, BEFORE THE CIT (APPEALS), THE ASSESSEE CLA IMED THAT IT HAD REASONABLE EXPLANATION IN RESPECT OF THE SAID SOURC E OF INVESTMENT AND THE WRITTEN SUBMISSIONS TO THE EFFECT WERE FILED BE FORE THE CIT (APPEALS). THE ASSESSING OFFICER EXAMINED ALL THE CREDITORS IN THE 5 REMAND PROCEEDINGS AND FURNISHED A DETAILED REMAND REPORT BEFORE THE CIT (APPEALS), WHICH IS AS UNDER: 'SH. SHIV KUMAR GOEL & SMT. NISHI PRABHA GOEL SH. SHIV KUMAR GOEL & SMT. NISHI PRABHA GOEL BOTH A RE HUSBAND AND WIFE. IN HIS STATEMENT SH. SHIV GOEL HAS STATED THAT HE IS DOING PART TIME ACCOUNT WORK WITH M/S CHOUPAL PLYWOOD AND HIS INCOME IS ABOUT 10 TO 12 THOUSAND P ER MONTH. HE STATED THAT HE HAS GIVEN RS.50,000/- AS ADVANCE SECURITY FOR HIRING OF SHUTTERING FOR REPAIR OF HOUSE IN VILLAGE BURIA ON DECEMBER 2003. HIS WIFE SMT, NISHI PRABHA GOEL IN HER STATEMENT ALSO STATED THAT SHE HAS GIVEN RS.50,000/- IN DEC.2003 T O SH. SUDHIR CHOUPAL IN CASH. BOTH OF THEM STATED THAT THEY HAVE INCURRED RS.1 LACS TO 2 .00 LACS SEPARATELY IN THE REPAIR OF SAME HOUSE IN VILLAGE BURIA. BOTH OF THEM STATED TH AT THEY HAVE JOINT ACCOUNT IN PNB AND THERE IS CREDIT BALANCE OF RS.8 TO 10 THOUSAND ONLY IN THAT ACCOUNT. THE CREDIT WORTHINESS OF BOTH THE CREDITORS HAVE NO T BEEN PROVED AS PER STATEMENTS GIVEN THEM. AS PER THEIR STATEMENT THE TOTAL OF RS. 5,00,000/-WAS LYING CASH IN THE HOUSE WHEREAS IN THE BANK ACCOUNT CREDIT BALANCE WAS ONLY 8 TO 10 THOUSAND. THE STATEMENT GIVEN BY THEM ARE CLEARLY AN AFTER THOUGHT. SH. GIA N CHAND IN THIS STATEMENT SH, GIAN CHAND STATED THAT IN THE YEAR 2003-04 HE WAS DOING WORK OF ENGINE REPAIRING AND HIS DAILY INCOME WAS RS.200 TO 300/-. SH. GIAN CHAND HAS STATED THAT HE HAS NOT GIVEN ANY ADVANCE /LOAN TO ANY PERSON DURING THE YEAR 2003-04. AS PER HIS STATEMENT IT IS PROVED THAT HE HAS NOT GIVE N ADVANCE / BAN OF RS.L,20,000/- TO SH. SUDHIR CHOUPAL. SH. KAJINDER KUMAR IN HIS STATEMENT SH.KAJINDER KUAMR HAS STATED THAT HE IS AN AGRICULTURALIST. HE HAS 2 KILOS OF AGRICULTURAL LAND IN VILLAGE GODHOLI AND MONTHLY INCOME DURING T HE YEAR 2003-04 FROM AGRICULTURE AND SELLING O FAMILY WAS A BOUT 8000/- P.M. HE IS LIVING IN A JOINT FAMILY OF 10 MEMBERS. THE INCOME OF HIS FAT HER A BROTHER WAS ALSO FROM THAT AGRICULTURAL LAND. HE HAS NO BANK ACCOUNT. HE ALSO STATED THAT HE HAS GIVEN ADVANCE OF RS.1,00,000/- IN CASH IN THE YEAR 2003-04 FOR HI RING OF SHUTTERING FOR REPAIR OF HOUSE ON VILLAGE BADHOLI AND HAS INCURRED RS.20,000 /- ON THE REPAIR OF HIS HOUSE. THE CREDIT WORTHINESS OF SH. KAJINDER KUMAR HAS NOT BEE N PROVED AS PER STATEMENT GIVEN BY HIM, BECAUSE THE INCOME OF 10 MEMBERS WAS RS.8,0 00/-ONLY PM IN THE YEAR 2003- 04. FURTHER IN HIS STATEMENT HE STATED THAT HE HAS GIVEN RS.1,00,000/- IN CASH, WHICH WAS LYING IN THE HOUSE. THE SOURCE OF WHICH WAS NOT KNOWN TO HIM. THE EXPENDITURE INCURRED ON REPAIR OF HOUSE WAS RS.20,000/- ONLY, W HEREAS RS.1,00,000/- HAS BEEN INCURRED ON THE HIRING OF SHUTTERING. THIS IS NOT B ELIEVABLE AT ALL. SH. MAHESH KAMBOJ IN HIS STATEMENT SH. MAHESH KAMBOJ STATED THAT HE I S DOING WORK IN TIMBER MARKET AS COMMISSION AGENT AND EARNS RS.100 TO 200 /-DAILY AN D HAS NO BANK ACCOUNT. HE STATED THAT HE HAS GIVEN ADVANCE OF RS. 20 , 000/- TO SH. SUDHIR CHOUPAL IN FEBRUARY 2004 IN CASH WITH OUT ANY PURPOSE. THE AMOUNT WAS LYING IN THE HOUSE. THE CREDIT WORTHINESS OF SH. MAHESH KAMBOJ HAS NOT BEEN PROVED AS PER STATEMENT GIVEN BY HIM IS CLEARLY AND AFTER THOUGHT. 6 SH.SATPAL KAMBOJ IN HIS STATEMENT SH. SAT PAL KAMBOJ STATED THAT HE IS DOING WORK IN TIMBER MARKET AS COMMISSION AGENT AND EARNS RS.200 TO 300 /-DAILY AND HAS BANK ACCOUNT IN INDIAN OVERSEAS BANK AND HAS CREDIT BALANCE OF RS. 2 TO 2. 5 THOUSAND ANLY. HE HAS GIVEN RS. 25.OOO/- IN CASH TO SH. SUDHIR CHOUPAL IN YEAR 2004. THE CREDIT WORTHINESS OF SH. SAT PAL KAMBOJ HAS NOT BEEN PROVED AS PER STATEMENT GIVEN BY HIM BECAUSE HIS DAILY INCOME IS NOT MORE THAN RS.300/-. THE STATEMENT GIVEN BY HIM IS CLEARLY AND AFTER THOUGHT. SH. SHAM LAL IN HIS STATEMENT SH. SHAM LAL HAS STATED THAT HE IS AN AGRICULTURALIST AND HAS NO AGRICULTURAL LAND IN HIS NAME. IN THE YEAR 2003-04 HE WAS DOING WORK OF TRACTOR MECHANIC AND HIS MONTHLY INCOME WAS RS.1500 TO 2000/-. HE HAS BANK ACCOUNT WITH PUNJAB & SIND BANK JAGADHRI AND AT PRESENT THERE IS CREDIT BALANCE OF RS.45 F OOO/-.THE AGRICULTURAL LAND OF 22 KILAS IS IN THE NAME OF HIS FATHER SH. BAULAT RAM. HE IS RESIDING IN JOINT FAMILY OF 9 MEMBERS INCLUDING PAR ENTS AND BROTHER SH. RATTAN LAL & HIS FAMILY. HE HAS L/3 RD SHARE IN THE AGRICULTURAL LAND. HE HAS GIVEN ADVANCE OF RS.1,00,000/- IN CASH TO SH. SUDHIR CHOUPAL IN THE YEAR 2004 FOR HIRING OF SHUTTERING AND HAS INCURRED RS.L,50,000/'ON THE REPAIR OF HIS HOUSE. THE TOTALS AMOUNT WAS LYING IN THE HOUSE. THE CREDIT WORTHINESS OF SH. SHAM LAL HAS NOT BEEN PROVED AS PER STATEMENT GIVEN BY HIM THE TOTAL INCOME IN THE YEAR 2003-04 WAS ONLY RS.24,000/- AND L/3 RD SHARE OF AGRICULTURAL INCOME WAS RS.L5,000/-, HE HAS GIVEN RS.L,00,000/-TO SH. SUDHI R CHOUPAL AND INCURRED RS.1,50,000/- ON THE REPAIR OF HOUSE IN CASH OUT OF AMOUNT LYING IN THE HOUSE WHEREAS HE WAS HAVING BANK ACCOUNT WITH PUNJAB & SIND BANK JAGADHRI AND AT PRE SENT THERE IS CREDIT BALANCE OF RS.45,000/-. IN THE LIGHT OF THE ABOVE NARRATED FACTS, THE CREDI T WORTHINESS OF THE UNSECURED CREDITORS IS NOT ESTABLISHED. THEY ARE NOT PERSONS OF ADEQUATE M EANS WHAT TO SAY OF THEIR CAPACITY TO ADVANCE LOANS. MOREOVER, NONE OF THEM WAS /IS ASSESSED TO TAX AND HAVE N O DOCUMENTARY EVIDENCE TO SUPPORT THE GENUINENESS OF THE SO CALLED LOANS ADVANCED BY THEM. CLEARLY, THE STATEMENTS MADE BY THEM ARE AN AFTER THOUGHT AND HENCE REJECTE D OUT RIGHTLY. 11. IT WAS FURTHER POINTED OUT BY THE ASSESSING OFF ICER THAT THE ASSESSEE HAD SURRENDERED SUM OF RS.4,65,000/- VIDE PARA 6 OF REPLY DATED 5.10.20-09 WHICH READS AS UNDER: THAT THE ASSESSEE HAS MADE EARNEST EFFORTS THE PER SONS, WHO HAVE SUBMITTED THEIR AFFIDAVITS CONFIRMING THE ADVANCE MADE TO THE ASSES SEE DURING THE YEAR UNDER REFERENCE. IN SPITE OF BEST EFFORTS IT HAS NOT BEEN TO LOCATE & PRODUCE ALL THE DEPONENTS OF THE AFFIDAVITS. THOUGH THE CREDITORS ARE GENUINE AND HAS BEEN OBTAI NED IN ROUTINE COURSE OF BUSINESS. YET, AS THE ASSESSEE IS UNABLE TO COMPLY WITH THE REQUIREME NT OF THE LAW TO PRODUCE ALL THE PERSONS WHO HAVE SUBMITTED THEIR AFFIDAVITS IN SUPPORT OF THE C ONTENTION OF THE ASSESSEE, THE UNDERSIGNED, IN ORDER TO COOPERATE WITH THE DEPTT. TO PURCHASE PEAC E OF MIND AND TO AVOID LENGTHY LITIGATIONS HEREBY MAKES A VOLUNTARY AFTER TO SURRENDER THE ALL EGED AMOUNT OF RS.4,65,000/- FOR TAXATION SUBJECT TO NO PENALTY UNDER SECTION 271(1)(C) AND P ROSECUTION. 12. THE NEXT PLEA OF THE ASSESSING OFFICER BEFORE T HE CIT (APPEALS) WAS THAT THE ASSESSEE HAD NOT FULFILLED THE CONDITI ONS AS PRESCRIBED IN 7 RULE 46A OF THE INCOME TAX RULES AND HENCE THE ADDI TIONAL EVIDENCE WAS NOT TO BE ADMITTED. 13. THE CIT (APPEALS) VIDE PARA 3.4 REJECTED THE PL EA OF THE ASSESSING OFFICER AGAINST THE ADMISSION OF ADDITIONAL EVIDENC E AND ALSO OBSERVED THAT ONCE THE EXAMINATION OF THE CREDITORS HAD BEEN UNDERTAKEN BY THE ASSESSING OFFICER, THE ISSUE OF ADMISSION OR OTHERW ISE OF THE ADDITIONAL EVIDENCE GETS CLOSED. THE CIT (APPEALS) IN RESPECT OF VARIOUS CREDITORS HELD AS UNDER: 3.5 THE AO IN THE REMAND REPORT AFTER EXAMINING THE VARIOUS CREDITORS HAS STATED THAT ALL THE CREDITORS OTHER THAN SH. GI AN CHADN WHO AS PER THE APPELLANT HAD ADVANCED A SHUTTERING ADVANCE/LOAN OF RS.1,20,000/- TO SH. SUDHIR CHAUPAL, HAVE CONFIRMED HAVING GIVEN THE LOA N/ADVANCE TO THE APPELLANT. THE AO HAS HOWEVER STATED THAT THE CREDI TWORTHINESS OF THESE CREDITORS IS NOT ESTABLISHED AS THEY ARE NOT PERSON S OF ADEQUATE MEANS. NONE OF THEM ARE ASSESSED TO TAX AND COULD FILED ANY DOC UMENTARY EVIDENCE TO SUPPORT THE GENUINENESS OF THE LOANS RAISED BY THEM . THE AO HAS ALSO MENTIONED THAT THE APPELLANT HIMSELF HAD OFFERED TO SURRENDER RS.4,65,000/- SUBJECT TO NO PENAL ACTION DURING THE COURSE OF ASS ESSMENT PROCEEDINGS. 3.6 I AGREE WITH THE AO THAT THE CREDITWORTHINESS OF NONE OF THE CREDITORS IS PROVED. MOREOVER, IT IS SEEN THAT AT THE TIME OF ASSESSMENT THE APPELLANT H AD STATED THAT LOANS HAVE BEEN TAKEN FROM THESE PERSONS WHILE DURING THE COURSE OF APPELLATE PROCEEDINGS IT HAS BEEN CONTENDED THAT ON LY TWO OF THE SEVEN CREDITORS REPRESENT LOANS AND THE BALANCE ARE IN THE NATURE O F COMMERCIAL TRANSACTIONS/ TRADE ADVANCES. THEREFORE, THE APPELLANT HAS CHANGE D HIS STAND DURING THE COURSE OF APPELLATE PROCEEDINGS. AS PER THE REMAND REPORT IN MOST OF THE CASES THE SHUTTERING ADVANCE GIVEN IS DISPROPORTIONABLY HIGH IN RELATION TO THE AMOUNT SPENT BY THE CONCERNED PERSON ON REPAIR/CONSTRUCTION OF T HE HOUSE. FOR EXAMPLE SH. SHIV KUMAR 6OEL WHO IS A PART TIME ACCOUNTANT AND HIS WI FE SMT. NISHA PRABHA 6OEL STATED TO HAVE GIVEN SHUTTERING ADVANCE OF RS.L LAC WHILE THE TOTAL AMOUNT SPENT BY THEM ON THE REPAIR OF THE HOUSE IS RS.4 LACS TO RS,5 LACS ONLY. SIMILARLY, SH. RAJINDER KUMAR WHO IS AN AGRICULTURIST AND IS H AVING MONTHLY INCOME OF RS.8,000/- WITH TEN MEMBERS FAMILY, CONFIRMED TO HA VE GIVEN SHUTTERING ADVANCE OF RS.L LAC FOR THE REPAIR OF THE HOUSE ON WHICH RS .20,000/- WAS INCURRED BY HIM. SH. SHAM LAI WHO IS ALSO AN AGRICULTURIST WITH ANNU AL INCOME OF RS.15,000/- CONFIRMED GIVING RS.L LAC SHUTTERING ADVANCE AND IN CURRED RS.1,50,000/- ON THE REPAIR OF THE HOUSE. THE OTHER TWO CREDITORS NAMELY SH. MAHESH KAMBOJ AND SH. SAFPAL KAMBOJ FROM WHOM CASH LOANS HAVE BEEN RE CEIVED, THE AO IN THE REMAND REPORT, HAS REPORTED THAT BOTH THE CREDITORS ARE SMALL TIME COMMISSION AGENTS IN TIMBER MARKET AND EARN RS.100/- TO RS.200 /- PER DAY. SH. MAHESH KAMBOJ DOES NOT HAVE A BANK ACCOUNT WHILE SH. SATPA L KAMBOJ THOUGH HAS A BANK ACCOUNT, THE BALANCE IN HIS ACCOUNT IS ONLY RS.2,00 0 TO RS.2,500/- OR SO. THE LOAN HAS NOT BEEN GIVEN OUT OF BANK ACCOUNT. IT IS UNLIK ELY THAT A PERSON OF SUCH MODEST SOURCE OF INCOME WILL MAKE CASH ADVANCE OF RS.20,00 0/- TO RS.25,000/-. THE SEVENTH CREDITOR, SH.GIAN CHAND FROM WHOM THE APPEL LANT IS STATED TO HAVE RECEIVED SHUTTERING ADVANCE OF RS.1,20,000/- IS A T RACTOR MECHANIC. HE HAS HOWEVER NOT CONFIRMED HAVING GIVEN ANY SUCH LOAN/ADVANCE TO THE APPELLANT. 8 THEREFORE, IN TOTALITY OF FACTS OF THE CASE, IT IS HELD THAT THOUGH IDENTITY OF THE CREDITORS 'A PROVED IN SIX OUT OF SEVEN CASES, THE GENUINENESS OF TRANSACTION AND CREDITWORTHINESS OF THE CREDITOR IS NOT PROVED. HENCE THE SOURCE OF INVESTMENT AMOUNTING TO RS.4,65,000/- EXPLAINED BY WAY OF LOANS AND TRADE ADVANCES IS HELD TO BE NOT EXPLAINED AND THE AO HAS RIGHTLY TREATED THE SAME TO BE THE INCOME OF THE APPELLANT. 14. IN THE TOTALITY OF THE FACTS AND CIRCUMSTANCES OF THE CASE WHERE THE ASSESSEE HAS FAILED TO PROVE THE CREDITWORTHINESS O F THE CASH CREDITORS, THE GENUINENESS OF THE TRANSACTION DOES NOT STAND E STABLISHED AND IN VIEW THEREOF, THE PROVISIONS OF SECTION 68 OF THE ACT AR E NOT FULFILLED AND WE UPHOLD THE ADDITION OF RS.4,65,000/- IN THE HANDS O F THE ASSESSEE. THUS, THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE ARE DI SMISSED. 15. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 25 TH DAY OF MARCH, 2014. SD/- SD/- (T.R.SOOD) (SUSHMA CHOWLA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 25 TH MARCH, 2014 *RATI* COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT(A)/TH E CIT/THE DR. ASSISTANT REGISTRAR, ITAT, CHANDIGARH 9