Vinod Kumar Kaushik, V. ITO Ward I,

ITA 2668/DEL/2006

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 77697 (ITAT-DELHI)
• Duration Of Justice: 7 year(s) 8 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-05-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: H
• Next Hearing Date: 21-04-2014
• Assessment Year: 2001-2002
• Appeal Filed On: 09-08-2006
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SAMEER SHARMA
• Assessee Lawyers: VINOD KAUSHIK
• Keywords: Unexplained cash credit
• Section: 147; 131

Judgement Text

ITA NO.2668/DEL/2006 ASSTT.YEAR: 2001-02 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES H NEW DELHI BEFORE SHRI B.C. MEENA, ACCOUNANT MEMBER AND SHRI CHANDRAMOHAN GARG, JUDICICAL MEMBER ITA NO. 2668/DEL/2006 ASSTT.YEAR: 2001-02 SHRI VINOD KUMAR KAUSHIK, VS INCOME TAX OFFICER, C/O M/S BHAGWATI ROAD, WARD-1, NARNAUL. LINE ROAD, RAILWAY, NARNAUL. (APPELLANT) (RESPONDENT ) APPELLANT BY: SHRI VINOD KAUSHIK RESPONDENT BY: SHRI SAMEER SHARMA, SR.DR O R D E R PER CHANDRAMOHAN GARG, J.M. THIS APPEAL HAS BEEN PREFERRED BY THE ASSESSEE AGA INST THE ORDER OF THE CIT(A), ROHTAK DATED 31.3.2006 IN APPEAL NO. 171/NN L/2005-06 FOR AY 2001-02. 2. THE GROUNDS RAISED BY THE ASSESSEE IN THIS APPEA L READ AS UNDER:- 1. THAT THE ASSESSING OFFICER ERRED IN CONFIRMING ADDITION OF RS.18,000/- ON ACCOUNT OF LOAN RAISED F ROM SHRI PHOOL SINGH. 2. THAT THE ASSESSING OFFICER ERRED IN CONFIRMING ADDITION OF RS.17,000/- ON ACCOUNT OF LOAN RAISED F ROM SHRI BANARASI LAL. ITA NO.2668/DEL/2006 ASSTT.YEAR: 2001-02 2 3. THAT THE ASSESSING OFFICER ERRED IN CONFIRMING ADDITION OF RS.18,000/- ON ACCOUNT OF LOAN RAISED FROM SHRI AJAY KUMAR. 4. THAT THE ASSESSING OFFICER ERRED IN CONFIRMING ADDITION OF RS.17,000/- ON ACCOUNT OF LOAN RAISED FROM SHRI MAGNI RAM. 5. THAT THE ASSESSING OFFICER ERRED IN CONFIRMING ADDITION OF RS.17,000/- ON ACCOUNT OF LOAN RAISED FROM SHRI PARSHOTAM DASS. 6. THAT THE ASSESSING OFFICER ERRED IN CONFIRMING ADDITION OF RS.15,000/- ON ACCOUNT OF LOAN RAISED FROM SHRI SHER SINGH. 7. THAT THE ASSESSING OFFICER ERRED IN CONFIRMING ADDITION OF RS.18,000/- ON ACCOUNT OF LOAN RAISED FROM SHRI JAGAN SINGH. 8. THAT THE ASSESSING OFFICER ERRED IN CONFIRMING ADDITION OF RS.17,000/- FROM SHRI PARABHU DAYAL. 3. WHEN THE CASE WAS CALLED FOR HEARING, THE ASSESS EE SHRI VINOD KUMAR KAUSHIK HIMSELF APPEARED AND SUBMITTED A PAPER BOOK SPREAD OVER 59 PAGES AND COPY OF DECISION OF ITAT DELHI SMC BENCH DATED 19.1.2007 IN ITA NO.2711/DEL/2006 FOR AY 2001-02 IN THE CASE OF SHRI PREM CHAND C/O BHAGWATI ROADLINES VS ITO WARD-1, NARNAUL. THE ASS ESSEE SUBMITTED THAT HE IS SUFFERING FROM BLOOD CANCER AND HE HAS NO MEA NS TO ENGAGE A COUNSEL FOR THIS CASE, THEREFORE, THE APPEAL MAY KINDLY BE DECIDED ON THE BASIS OF PAPER BOOK FILED BY HIM TODAY AND ON THE BASIS OF D ECISION OF SHRI PREM CHAND (SUPRA) WHO WAS HIS PARTNER IN THE SAME ENTER PRISE I.E. M/S BHAGWATI ITA NO.2668/DEL/2006 ASSTT.YEAR: 2001-02 3 ROADLINES. WE ALSO HEARD LD. DR AND PROCEEDED TO D ECIDE THE APPEAL ON MERITS ON THE BASIS OF MATERIAL PLACED BEFORE US. 4. ON CAREFUL CONSIDERATION AND PERUSAL OF APPEAL R ECORD, PAPER BOOK FILED BY THE ASSESSEE AND THE DECISION OF ITAT DELH I SMC BENCH DATED 19.1.2007 (SUPRA), AT THE OUTSET, WE OBSERVE THAT T HE CASE OF SHRI PREM CHAND A PARTNER OF M/S BHAGWATI ROADLINES HAS BEEN DECIDE D IN FAVOUR OF THE ASSESSEE WITH FOLLOWING OBSERVATIONS AND FINDINGS:- 17. LD. DR SUPPORTED THE ORDERS OF LD. COMMISSIO NER OF INCOME TAX(A) AND LD. ASSESSING OFFICER VEHEMENT LY. SHE VERY STRONGLY ARGUED THAT THE ADDITIONS MADE BY THE ASSESSING OFFICER WERE RIGHTLY MADE, AS THE ASSESSE E COULD NOT PROVE THE CREDITWORTHINESS OF THE CREDITO RS. SHE FURTHER ARGUED THAT THERE WERE VALID REASONS FO R REOPENING OF THE CASE AND THEREFORE AT THIS STAGE T HE LD. COUNSEL CANNOT ARGUE ABOUT THE VALIDITY OF REOPENIN G. SHE ALSO ARGUED THAT ONCE THE CASE IS REOPENED THE PRIMARY BURDEN IS UPON THE ASSESSEE TO MEET HIS OBLIGATIONS. SHE ARGUED THAT IT WAS THE DUTY OF TH E ASSESSEE TO PROVE THE IDENTITY, CREDITWORTHINESS AN D GENUINENESS OF THE TRANSACTION. IN HER OPINION THE ASSESSEE FAILED IN DISCHARGING THIS BURDEN. THEREF ORE, IT HAS BEEN ARGUED THAT THERE WAS NO ERROR IN THE ORDE R OF LD. COMMISSIONER OF INCOME TAX(A) AND THEREFORE THE SAME NEEDS TO BE UPHELD. 18. ON THE REPLY STAGE THE LD. COUNSEL HAS ARGUED THAT THE VALIDITY OF REOPENING IS NOT BEING CHALLENGED BY TH EM AND THEIR CONTENTION IS THAT PRESUMABLY EVEN IF THE REO PENING HAS BEEN DONE AS PER LAW, IN VIEW OF PROVISIONS OF SECTION 147 SUPPORTED WITH THE LATEST JUDGMENT OF HONBLE D ELHI HIGH COURT IN THE CASE OF COMMISSIONER OF INCOME TA X VS SHRI PRADEEP KUMAR GUPTA (SUPRA), THE INITIAL BURDE N WAS UPON THE LD. ASSESSING OFFICER WHO HAS FAILED T O ITA NO.2668/DEL/2006 ASSTT.YEAR: 2001-02 4 DISCHARGE. ON MERITS ALSO HE HAS STATED THAT LD. D R HAS NOT BEEN ABLE TO MEET OUT ANY CONTENTION OF THE LD. ASSESSING OFFICER THAT IN THE STATEMENTS RECORDED BY VARIOUS PERSONS FACTUM OF ADVANCING THE LOANS WERE PROVED ALONG WITH VARIOUS OTHER DETAILS WHICH ESTAB LISHES THE CREDITWORTHINESS OF THESE CREDITORS. HE HAS FU RTHER ARGUED THAT LD. DR HAS NOT BEEN ABLE TO FIND ANY GA P OR INCONSISTENCY IN THE STATEMENTS RECORDED BY THE ASS ESSING OFFICER. HE FURTHER ARGUED THAT, IN ANY CASE, IN V IEW OF THE JUDGMENT OF MP HIGH COURT IN METACHEM INDUSTRIE S SUPRA, AND OTHER JUDGMENTS OF DELHI BENCH AS MENTIO NED ABOVE, IT WAS NOT THE DUTY OF ASSESSEE TO PROVE THE SOURCE, TO KNOW ABOUT THE FINANCIAL AFFAIRS OF THE CREDITOR S OR TO PROVE THE SOURCE OF THE LOANS ADVANCED BY THESE CRE DITORS. IN THIS VIEWS THE ADDITION OF RS.1,77,000/- DESERVE S TO BE DELETED. 19. I HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND THE MATERIALS AVAILABLE ON RECORD. I FIND THAT THE ASSESSEE PROD UCED 10 OUT OF 12 LOAN CREDITORS BEFORE THE ASSESSING OFFIC ER. IT IS OBSERVED THAT IN THIS CASE THE ASSESSEE HAS CLAIMED TO HAVE RECEIVED LOANS OF RS.1.95 LAKHS FROM 12 CREDIT ORS OUT OF THE SAME RS.1.77 LAKHS WAS ADDED BY COMMISSIONER OF INCOME TAX(A) AS UNEXPLAINED CASH CREDIT FROM 11 PERSONS AND ONE LOAN OF RS.18000/- FROM SHRI KHYALI RAM WAS ACCEPTED BY COMMISSIONER OF INCOME TAX(A). I OBSERVE THAT AFFIDAVIT FROM ALL THE 11 CREDITORS WE RE FILED BEFORE THE ASSESSING OFFICER WHEREIN THE CREDITORS HAVE DULY AFFIRMED THE TRANSACTION WITH THE ASSESSEE. F URTHER, OUT OF THE 11 CREDITORS IN QUESTION 9 WERE PR0DUCED BY THE ASSESSEE BEFORE THE ASSESSING OFFICER AND 9 CREDITO RS EVEN AFFIRMED THE FACT OF ADVANCING OF MONEY BY THEM TO THE ASSESSEE BEFORE THE ASSESSING OFFICER. IT IS ALSO OBSERVED THAT NO NOTICE U/S 131 WAS ISSUED BY THE DEPARTMENT TO THE REMAINING 2 CREDITORS. IN THE CIRCUMSTANCES IN MY CONSIDERED OPINION THE PRIMARY ONUS WHICH WAS ON TH E ASSESSEE TO PROVE NATURE AND SOURCE OF HIS CASH CRE DIT WAS DISCHARGED BY HIM AND THE ONUS WAS SHIFTED ON THE REVENUE TO BRING COGENT MATERIAL ON RECORD FOR NOT ITA NO.2668/DEL/2006 ASSTT.YEAR: 2001-02 5 ACCEPTING SUCH CASH CREDIT. I FIND THAT APART FROM A SUBJECTIVE REMARK ABOUT THE CREDITWORTHINESS OF THE CREDITORS NO POSITIVE MATERIAL HAS BEEN BROUGHT ON RECORD BY THE REVENUE FOR NOT ACCEPTING THE CASH CREDIT IN QUESTION. IN THE CIRCUMSTANCES, IN MY OPINION THE ADDITION SO MADE CANNOT BE SUSTAINED. HENCE, I DEL ETE THE ADDITION OF RS.1.77 LAKHS MADE ON ACCOUNT OF UNEXPL AINED CASH CREDIT FROM 11 CREDITORS. ACCORDINGLY, THE GR OUNDS OF APPEAL OF THE ASSESSEE ARE ALLOWED. 5. FROM THE PAPER BOOK FILED BY THE ASSESSEE, WE OB SERVE THAT THE CREDITORS JAGAN SINGH, PARSHOTAM DASS, MAGNI RAM, A JAY KUMAR, BANARASI LAL, PHOOL CHAND, RAM KKISHAN, DESH RAJ AND PRABHU SINGH HAVE DEPOSED BEFORE THE ITO, WARD-1, NARNAUL SUPPORTING THE FACT THAT THEY EXTENDED LOAN TO THE ASSESSEE FROM THEIR OWN MEANS AND THE SAME F ACT WAS ALSO REITERATED AND SUPPORTED BY THE AFFIDAVITS OF THESE CREDITORS ALONG WITH DOCUMENTS PERTAINING TO THE SOURCE OF MONEY. LD. DR HAS NOT DISPUTED THE POINT THAT SHRI PREM CHAND WAS ALREADY A PARTNER IN M/S BHAGWA TI ROADLINES WITH THE ASSESSEE AND SHRI PREM CHAND AND THE ASSESSEE I.E. SHRI VINOD KUMAR KAUSHIK FACED THE SAME ADDITION IN THE AY 2001-02 P ERTAINING TO THE CREDITORS AND SHRI PREM CHAND GOT RELIEF BY THE ITA T DELHI SMC BENCH VIDE ORDER DATED 19.7.2007 (SUPRA) AND THE DEPARTME NT HAS ACCEPTED THAT DECISION WITHOUT AGITATING THE MATTER FURTHER IN TH E HIGHER FORUM. 6. ON CAREFUL CONSIDERATION OF ABOVE SET OF FACTS A ND ON PERUSAL OF THE ORDERS OF THE LOWER AUTHORITIES, PAPER BOOK FILED B Y THE ASSESSEE TODAY AND ITA NO.2668/DEL/2006 ASSTT.YEAR: 2001-02 6 DECISION OF ITAT SMC BENCH DATED 19.1.2007 (SUPRA), WE FIND THAT THE ASSESSEE PRODUCED ALL CREDITORS BEFORE THE ASSESSIN G OFFICER AND THEIR STATEMENTS WERE RECORDED ON OATH. THE DISPUTED CRE DITORS ALSO SUPPORTED THE VERSION OF THE ASSESSEE BY FILING THEIR AFFIDAVITS AND OTHER DOCUMENTS EXPLAINING THE SOURCE OF AMOUNT WHICH WAS PROVIDED TO THE ASSESSEE AS LOAN WHEREIN THE CREDITORS HAVE DULY AFFIRMED THE TRANSA CTION WITH THE ASSESSEE. ON THE SAME SET OF FACTS AND CIRCUMSTANCES, THE ITA T SMC BENCH GRANTED RELIEF FOR THE PARTNER OF THE ASSESSEE AND FACTS AN D CIRCUMSTANCES OF THE ASSESSEES CASE ARE ALSO SIMILAR IN THE PRESENT APP EAL. IN THESE CIRCUMSTANCES, IN OUR CONSIDERED OPINION, THE PRIMA RY ONUS ON THE ASSESSEE TO PROVE THE NATURE AND SOURCE OF CASH CREDITS WAS DISCHARGED BY THE ASSESSEE AND FURTHER ONUS WAS SHIFTED ON THE REVENUE TO BRIN G OUT RELEVANT AND COGENT MATERIAL ON RECORD FOR NOT ACCEPTING SUCH CASH CRED IT AS SHOWN BY THE ASSESSEE. WE ALSO FIND THAT THE ASSESSING OFFICER HAS MADE A SUBJECTIVE REMARK ABOUT THE CREDITWORTHINESS OF THE CREDITORS BUT NO POSITIVE MATERIAL HAS BEEN BROUGHT ON RECORD BY HIM FOR NOT ACCEPTING THE CASH CREDIT SHOWN BY THE ASSESSEE. ACCORDINGLY, IN OUR CONSIDERED OP INION, THE ASSESSEE HAS SHOWN SOURCE OF CASH CREDITORS AND THE CREDITORS CA ME FORWARD TO THE DESK OF THE ASSESSING OFFICER TO SUPPORT THE VERSION OF THE ASSESSEE BY WAY OF GIVING STATEMENT OF OATH AND ALSO SUBMITTED THE AFFIDAVITS AND OTHER RELEVANT ITA NO.2668/DEL/2006 ASSTT.YEAR: 2001-02 7 DOCUMENTS, EXPLAINING THE CIRCUMSTANCES AND SOURCE OF AMOUNT GIVEN TO THE ASSESSEE AS LOAN. WE ALSO OBSERVE THAT THE ASSESSI NG OFFICER HAS NOT BROUGHT ANY RELEVANT OR COGENT MATERIAL TO ESTABLISH ANY DO UBT ABOUT THE TRUTHFULNESS OF THE CREDITORS, HENCE, THE ADDITION SO MADE CANNO T BE SUSTAINED. WE ALSO HOLD THAT SINCE THE ASSESSEE HAS ESTABLISHED IDENTI TY, CREDITWORTHINESS OF THE CREDITORS AS WELL AS GENUINENESS OF THE SOURCE OF L OAN AND THE ASSESSING OFFICER HAS NOT MADE ANY ADVERSE OBSERVATIONS OR CO ULD NOT BRING ANY ADVERSE MATERIAL TO RAISE DOUBT ABOUT THE IDENTITY AND CREDITWORTHINESS OF THE CREDITORS AS WELL AS GENUINENESS OF THE TRANSACTION , THEREFORE, THE ADDITIONS MADE BY THE ASSESSING OFFICER AND UPHELD BY THE CIT (A) CANNOT BE SUSTAINED. WE ALSO HOLD THAT THE CASE OF THE PRESE NT ASSESSEE IS SQUARELY COVERED BY THE DECISION OF ITAT SMC BENCH IN THE CA SE OF SHRI PREM CHAND C/O SHRI BHAGWATI ROADLINES DATED 19.7.2007 ( SUPRA) AND WE ARE INCLINED TO GRANT RELIEF FOR THE ASSESSEE BY RESPEC TFULLY FOLLOWING THIS DECISION. ACCORDINGLY, THE ORDERS OF THE AUTHORITI ES BELOW ARE SET ASIDE AND WE DIRECT TO DELETE ALL ADDITIONS MADE BY THE ASSES SING OFFICER AND UPHELD BY THE CIT(A) PERTAINING TO THE CASH CREDIT SHOWN B Y THE ASSESSEE IN THE FY 2001-02. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ITA NO.2668/DEL/2006 ASSTT.YEAR: 2001-02 8 ORDER PRONOUNCED IN THE OPEN COURT ON 06.05.2014. SD/- SD/- ( B.C. MEENA ) (CHANDRAMOHAN GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER DT. 6 TH MAY 2014 GS COPY FORWARDED TO:- 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR BY ORDER ASSTT.REGISTRAR