A.C.I.T., Circle-4(1), Agra V. Dr. Anil Kumar Verma, Agra

ITA 274/AGR/2013

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 8595 (ITAT-AGRA)
• Duration Of Justice: 6 year(s) 1 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-09-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 25-08-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 26-07-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: WASEEM ARASHAD
• Assessee Lawyers: S C JAIN; S K BAJPAI
• Keywords: Unexplained investment; Charitable institution; Tax effect; TDS
• Section: 40(a)(ia); 201(1)

Judgement Text

IN THE INCOME-TAX APPELLATE TRIBUNAL, AGRA BENCH, AGRA BEFORE : SHRI LALIET KUMAR, JUDICIAL MEMBER AND DR. MITHA LAL MEENA, ACCOUNTANT MEMBER ITA NO. 274/AGRA/2013 A.Y. :2009-10 ACIT, CIRCLE 4 (1), AGRA (APPELLANT) VS. DR. ANIL KUMAR VERMA, MAHINDRA MARKET, GOVERDHAN HOTEL, AGRA PAN AAMPV5976J (RESPONDENT) C.O. NO.22/AGRA/2013 [ITA NO.274/AGRA/2013 A.Y. : 2009-10 DR. ANIL KUMAR VERMA, MAHINDRA MARKET, GOVERDHAN HOTEL, AGRA PAN AAMPV5976J (RESPONDENT) VS. ACIT, CIRCLE 4 (1), AGRA (APPELLANT) A PPELLANT BY SHRI WASEEM ARASHAD, SR. DR RE SPONDENT BY SHRI S.C. JAIN AND SHRI S.K. BAJPAI, CA ORDER PER LALIET KUMAR, J.M: DATE OF HEARING 01 .0 8 .2019 DATE OF PRONOUNCEMENT 04 .0 9 .2019 ITA274/AGR/2013 CO NO.22 /AGR/2013 2 PRESENT APPEAL AND CROSS OBJECTION ARE BEING FILED BY THE REVENUE AND THE ASSESSEE, FEELING AGGRIEVED BY THE ORDER OF THE LD. CIT(A)-II, AGRA FOR THE ASSESSMENT YEAR 2009-10. THE FOLLOWING GROUNDS HAVE BEEN RAISE D BY THE REVENUE IN ITA NO.274/AGR/2013: 1. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN D ELETING THE ADDITION OF RS.62,13,500/- OUT OF ADDITION OF RS.63,63,500/- MA DE BY AO ON ACCOUNT OF CASH DEPOSIT IN BANK ACCOUNTS WITHOUT AP PRECIATING THE FACTS OF THE CASE THAT THE ASSESSEE HAS INTRODUCED CASH AMOUNTING TO RS.31 LACS IN THE CASH BOOK ON DIFFERENT DATES FROM 'CASH IN SAFE' AND THE ASSESSEE HAS SHOWN PROFESSIONAL RECEIPTS OF ONL Y RS.18,22,680/-AND INTEREST INCOME OF RS.6,06,073/- FOR THE A.Y. 2009- 10. 2. THE ID. CIT (A) HAS ERRED IN LAW AND ON FACTS IN GLOSSING OVER THE FACT THAT THE ASSESSEE NEVER PRODUCED ANY SUNDRY CREDITO R BEFORE THE AO AS DESIRED BY THE LATTER AND NEVER FURNISHED COPIES OF ITR AND BANK STATEMENTS OF THE SUNDRY CREDITORS, THUS THE ADDITI ON OF RS.63,63,500/- 3. THE ID, CIT(A) HAS ERRED IN LAW AND ON FACTS IN RESTRICTING THE ADDITION OF RS.5,98,306/- TO RS.46,794/- U/S 36(L)(III) OF T HE ACT WITHOUT PROPERLY APPRECIATING THE FACTS OF THE CASE THAT THE ASSESSE E HAS ALSO VESTED HIS CAPITAL IN SAI OM DEVELOPERS, BAJAJ ALIANZ, FDR, SH ARES IN SAHARA ETC AND, THEREFORE, IT CANNOT BE CONCLUDED THAT THE DON ATION OF RS.93,67,242/- WAS GIVEN OUT OF THE ASSESSEE'S CAPI TAL AND NOT FROM HIS BORROWED FUNDS. 4. THE ID. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.85,000/- ON ACCOUNT OF UNEXPLAINED INVESTMENT MA DE IN PURCHASE OF CAR WITHOUT PROPERLY APPRECIATING THE FACTS OF CASE THAT THE ASSESSEE DID NOT CONTRADICT THE STATEMENT GIVEN BY HIM DURIN G THE COURSE OF THE SURVEY CONDUCTED WHEN THE AMOUNT WAS SURRENDERED AN D IT WAS ONLY TOWARDS THE FAG END LEFT FOR COMPLETION OF THE ASSE SSMENT THAT AN AFFIDAVIT WAS FILED BYTHE ASSESSEE DENYING INVESTME NT. 5. THE ORDER OF ID CIT(A) BEING ERRONEOUS IN LAWS AND ON FACTS DESERVES TO BE QUASHED ANDTHAT THE ORDER OF AO TO BE RESTORED. 6. THE APPELLANT CRAVES LEAVE TO ADD OR ALTER ANY OR MORE GROUND OR GROUNDS OF APPEAL AS MAY BE DEEMED FIT AT TIME OF H EARING OF APPEAL. 2. THE GROUNDS RAISED BY THE ASSESSEE IN THE CROSS OBJECTION READ AS UNDER: ITA274/AGR/2013 CO NO.22 /AGR/2013 3 1) THAT THE LEARNED CIT(A) HAS ERRED IN LAW AND ON FACTS OF THE CASE IN AFFIRMING ADDITION OF RS.1,50,000/- IN RESPECT OF C ASH DEPOSIT IN THE SB ACCOUNT OF MRS. RENU VERMA , WHO IS INDEPENDENT INCOME TAX ASSESSEE. 2) THAT THE LEARNED CIT(A) HAS ERRED IN LAW AND ON F ACTS OF THE CASE IN AFFIRMING ADDITION OF RS.1,50,0007- IN THE ACCOUNT OF LOAN RECEIVED BY ACCOUNT PAYEE CHEQUE ON 21-04-2008, WRONGLY ENTE RED IN THE ACCOUNT OF MR. BHARAT BANSAL. 3) THAT THE LEARNED CIT(A) HAS ERRED IN LAW AND ON F ACTS OF THE CASE IN AFFIRMING ADDITION OF RS.46,794/- U/S 36(L)(III) IN RESPECT INTEREST PAID TO SYNDICATE BANK. 4) THAT THE LEARNED C1T(A) HAS ERRED IN LAW AND ON F ACTS OF THE CASE IN AFFIRMING ADDITION OF RS.92,626/- IN RESPECT OF INT EREST PAID TO BARKLAY FINANCE WITH OUT DEDUCTION OF TDS U/S 40(A) (IA). 5) THAT THE DEPARTMENTAL APPEAL IS BAD IN LAW AS WE LL AS ON FACTS AND IS LIABLE TO BE DISMISSED. 6) FOR THE REASONS DISCUSSED ABOVE AND TO BE ARGUE D AT THE TIME OF HEARING , RESPONDENT PRAY FOR RELIEF. 7) THE RESPONDENT CRAVES LEAVE TO ADD OR AMEND ANY GROUND OF CROSS OBJECTION. ASSESSEE SUBMISSION ITA NO. 274/AERA/2012 1. FIRST GROUND RELATES TO DELETION OF RS. 62,13,500.0 0 OUT OF TOTAL ADDITION OF RS. 63,63,500.00 MADE BY THE LEARNED AO , THE LEARNED AO TOTALED THE CASH DEPOSITS IN VARIOUS 7 BANK ACCO UNTS AT RS. 63,63,500.00 AND ADDED THE SAME IN THE INCOME OF TH E ASSESSEE. THE MAIN ARGUMENT OF THE AO WHILE ADDING THESE AMOU NT IS THAT ASSESSEE HAS SHOWN THE TOTAL MEDICAL RECEIPTS AMOUN TING TO RS. 18,22,680/- AND AFTER DEDUCTING THE EXPENSES ACCORD ING TO HIM THE NET PROFIT COMES TO RS. 6,33,343/- AND THAT THESE D EPOSITS CANNOT ITA274/AGR/2013 CO NO.22 /AGR/2013 4 BE MADE OUT OF THE INCOME OF THE YEAR, HENCE THESE AMOUNTS WERE DEPOSITED WAS INCOME FROM UNDISCLOSED SOURCE. 2. THE LD. DR FOR THE REVENUE HAD SUBMITTED THAT THE O RDER PASSED BY THE LD. CIT IS REQUIRED TO BE INTERFERED AS THE SOU RCE OF DEPOSIT WERE NOT EXPLAINED BY THE ASSESSEE BEFORE THE AO/CI T. 3. THE LD. DR HAD FILED THE WRITTEN SUBMISSIONS AND FL OW CHART IN THIS REGARD AND IN THE SAID FLOW CHART IT WAS SUBMITTED AS UNDER : ITA274/AGR/2013 CO NO.22 /AGR/2013 5 ITA274/AGR/2013 CO NO.22 /AGR/2013 6 ITA274/AGR/2013 CO NO.22 /AGR/2013 7 4. ON THE OTHER HAND, THE LD. AR FOR THE ASSESSEE H AD SUBMITTED THAT THE ASSESSEE HAD GIVEN REPLY DTD. 29.11.2013/B EFORE THE AO IN WHICH HE EXPLAINED EACH DEPOSITS OF EACH BANK ACCOU NT AND EXPLAINED THAT HE MAINTAIN REGULAR BOOKS OF ACCOUNT S IN THE FORM OF CASHBOOK AD LEDGER SINCE LONG AND THESE ACCOUNTS WE RE DULY AUDITED AND AUDITED BALANCE SHEET, PROFIT & LOSS A/ C AND OTHER DETAILS WERE FILED BEFORE THE AO AND THESE DEPOSITS IN BANK WERE BY DEBITED IN THE REGULARLY MAINTAINED CASHBOOK OR WER E BANK TRANSFERS FROM ANOTHER BANK ACCOUNT OR OUT OF LOAN TAKEN DURING THE YEAR WHICH WERE DEPOSITED IN THE CASHBOOK AND DEPOS ITED IN THE BANK. THUS EACH DEPOSIT ENTRY IN THE BANK WAS FULLY EXPLAINED FROM THE CASHBOOK MAINTAINED BY THE ASSESSEE. 4.1 FURTHER, THE LD. AR HAD SUBMITTED THAT, A DETAI LED REPLY WAS FILED BEFORE THE CIT APPEAL GETTING ENCLOSED IN THE PAPERBOOK AND DISCUSSED AT PAGE 11 TO PAGE 16 PARA 4.1 TO 4.3 OF THE CIT APPEALS ORDER AND ASSESSEE REPLY WAS SENT FOR COMMENTS TO T HE AO. THE AO IN THIS REMAND REPORT DTD. 17.05.2013 REFERRED TO P ARA 4.4 OF CIT APPEAL ORDER AND PAGE 18 OF THE CIT APPEALS ORDER A ND THE AO CONCLUDED AS UNDER :- 'IT IS NOTED THAT AMOUNT DEPOSITED IN THE BANK ACCO UNT MENTIONED AT 1,2,3,56 WERE FULLY RECORDED IN CASH BOOK. AS REGAR D BANK A/C NO. 4047 IN THE NAME OF RENU VERMA MENTIONED AT SI. NO. 4, IT IS SUBMITTED THAT THE ACCOUNT WAS OPENED ON 21.10.2008 BY DEPOSIT RS. 1.59 LACS ON 23.10.2008 AND LOAN OF RS. 1.5 LAKHS W AS GIVEN TO THE ASSESSEE. THUS, IT IS ASSUMED THAT THE ASSESSEE FIRS T DEPOSITED HIS MONEY IN THE ACCOUNT OF RENU VERMA, SISTER IN LAW O F THE ASSESSEE AND ITA274/AGR/2013 CO NO.22 /AGR/2013 8 THEREAFTER LOAN TAKEN FROM RENU VERMA.' CIT APPEAL THEREAFTER IN PARA 4.5 CONSIDERED THIS REMAND REPORT AND DELETED THE ADDITIONS. 5. IN RESPECT TO AMOUNT WITHDRAWN CASH FROM SAFE, THE ASSESSEE HAS FILED THE COPY OF AUDITED BALANCE SHEET FOR THE PERIOD ENDING 31.03.09 AT PAGE 47 AND AUDIT REPORT ENDING 31.03.0 9 AT PAGE 74 OF THE PAPER BOOK WHICH WILL SHOW THAT ASSESSEE HAS FILED THE COPY OF AUDITED BALANCE SHEET FOR THE PERIOD ENDING 31.03.2008 AT PAGE 47 - 73 AND FOR THE PERIOD ENDING 31.03.200 9 PAGE 74 - 104 AT PAGE 69 PAPER BOOK, THERE IS A CAPITAL A/C F OR THE PERIOD ENDING 31.03.08 ON 30.03.08, THERE IS A DEBIT OF RS . 20 LAKHS CASH IN SAFE IN THE CAPITAL A/C OF THE ASSESSEE AND THER EAFTER AT PAGE 101 THIS RS. 20 LAKHS DRAWN ON 30.03.08 HAS BEEN CR EDITED IN THE CAPITAL ACCOUNT ON 1ST APRIL,08 HAS BROUGHT IN THE CAPITAL A/C. THUS THE CREDIT OF RS. 20 LAKHS ON 01.04.2008 IS OU T OF WITHDRAWAL OF RS. 20 LAKHS ON 30.03.2008. THIS IS A REGULAR FEATURE OF ASSESSEE WHENEVER CASH IS EXCESS IN CASH IN HAND, IT IS KEPT IN THE SAFE ON THE LAST DAY ACCOUNTING YEAR AN D DEPOSITED IN THE 1ST DAY OF NEXT YEAR AGAIN. 6. WE HAVE HEARD THE RIVAL CONTENTIONS OF THE PARTIES AND PERUSED THE RECORD. ADMITTEDLY, THE ASSESSING OFFICER IN TH E REMAND REPORT HAD CONFIRMED THAT THE AMOUNT DEPOSITED IN THE BANK MENTIONED AT SL. NO. 1, 2, 3, 5 & 6 (PARAGRAPH 4.4 OF CIT ORDER) WERE FOUND DULY RECORDED IN THE CASH BOOK. THE REVENUE BEFORE US DU RING THE COURSE OF ARGUMENTS AND ALSO IN THE WRITTEN SUBMISS IONS HAVE NOT DISPUTED THE CORRECTNESS OF THE CASHBOOK. FURTHER, IT WAS ALSO NOT THE CASE OF THE ASSESSING OFFICER THAT THE CASH BOO K MAINTAINED BY ITA274/AGR/2013 CO NO.22 /AGR/2013 9 THE ASSESSEE WAS INCORRECT. IN VIEW OF THE ABOVE, O NCE THE ASSESSEE WAS ABLE TO EXPLAIN THE SOURCE OF DEPOSITS IN THE B ANK BASED ON THE CASH BOOK, WHICH WERE ADMITTEDLY NOT DISPUTED AND R EJECTED BY THE AO, THEREFORE, NO ADDITION ON THE BASIS OF THE BANK DEPOSIT CAN BE MADE OUT AND ACCORDINGLY, THE GROUND RAISED BY THE REVENUE IS LIABLE TO BE DISMISSED. 7. WITH RESPECT TO CO FILED BY THE ASSESSEE, GROUND NO . 1, NONE OF THE PARTIES BEFORE US HAVE MADE ANY ARGUMENTS. THE ASSESSEE DURING THE COURSE OF PROCEEDINGS HAD FILED THE RETU RN OF INCOME FOR THE ASSESSMENT YEAR 2011-12 FOR SMT. RENU VERMA, WH EREIN THE DEPOSIT IN THE BANK HAVE BEEN DULY EXPLAINED. IN VI EW OF THE ABOVE, THE ASSESSEE WAS ABLE TO SATISFACTORILY EXPLAIN THE DEPOSIT IN THE BANK OF RENU VERMA. FURTHER, WE ARE OF THE OPINION THAT MERELY POSSESSION OF PASSBOOK OF RENUE VERMA WITH ASSESSEE WOULD NOT GIVE RISE TO ANY SUSPICION, MORE PARTICULARLY, WHEN SMT. RENU VERMA HAPPENS TO BE THE WIFE OF ASSESSEE, WHICH IS CONTRARY TO NORMAL PRACTICE. 8. IN VIEW OF THE ABOVE, GROUND NO. 1 OF THE CROSS OBJ ECTION IS ALLOWED. 9. GROUND NO. 2 OF THE REVENUE APPEAL PERTAINS TO CRE DIT IN THE ACCOUNT OF CREDITORS, ADDITION IN THE ACCOUNT OF CR EDITORS. 10. THE LEARNED AO ADDED RS. 56.00 LAKHS IN RESPECT OF CASH DEPOSITS IN THE ACCOUNT OF VARIOUS CREDITORS. ACCOR DING TO AO, THE CONFIRMATIONS WERE FILED, BUT NO COPY OF IT RETURNS AND COMPUTATION AND BANK STATEMENT NOT FILED. ASSESSEE HAS NOT PROV ED THE DEPOSIT, AS HE ADDED THE SAME IN THE INCOME. (PARA-4 OF ASSESSM ENT ORDER) ITA274/AGR/2013 CO NO.22 /AGR/2013 10 11. FEELING AGGRIEVED BY THE ORDER PASSED BY THE ASSESS ING OFFICER, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A) AND BEFORE THE CIT(A), THE ASSESSEE HAVE FILED THE SUBMISSIONS AND EXPLAINED EACH AND EVERY LOAN TRANSACTIONS. THE SUBMISSIONS OF THE ASSESSEE WERE SENT BACK TO THE AO FOR SENDING THE REMAND REPORT. THE ASSESSING OFFICER IN REMAND REPORT HAS EXAMINED THE SUBMISSIO NS AND THE DOCUMENTS FURNISHED THERETO. IN THE REMAND REPORT, IN PARA-3 AT PAGE 32 & 33 OF THE PAPER BOOK, IT WAS MENTIONED AS UNDER : 3. UNSECURED LOANS- ON PERUSAL OF BALANCE SHEET, IT WAS NOTICED THAT AS SESSES HAS SHOWN UNSECURED LOANS FROM THE FOLLOWING PERSONS NAMELY SHRI ARUN CHADDA, BHARAT B ANSAL, SURENDRA PODDAR, NISHA AGRAWAL, RENU VERMA, SACHIDANAND NAYAK, SUDHA BANSAL & FRIENDS, R ELATIVES & OTHERS AMOUNTING TO RS 51,88,2377-. THE ASSESSEE WAS REQUIRED TO PRODUCE A LL THE ABOVE PERSONS ALONG WITH THEIR COPY OF INCOME TAX RETURN, COMPUTATION OF INCOME AND BANK P ASS BOOK. THE ASSESSEE HAS SUBMITTED ONLY THEIR CONFIRMATION BUT NOT FURNISHED COPY OF ITR, C OMPUTATION OF INCOME AND BANK STATEMENTS. HENCE THE AMOUNT OF RS 56,00,000/- WAS TRE ATED AS INCOME OF THE ASSESSEE FROM INCOME FROM OTHER SOURCES AND ADDED TO HIS INCOME. AS PER THE D ETAILS FURNISHED BEFORE YOUR GOODSELF, THE OPENING BALANCE AS ON 1.4.2008 RS 32,53,2507-, CRED IT DURING THE YEAR RS 26,74,559/- AND CLOSING BALANCE RS 51,88,2377-. IN THIS REGARD IT IS SUBMIT TED THAT- A. ON PERUSAL OF BALANCE SHEET AS ON 31.3.2008 REVE ALS THAT THE CLOSING BALANCE AS ON 31.3.2008 OF UNSECURED-LOAN IS RS 21,64,250/-. THE SAME WOULD BE THE OPENING BALANCE AS ON 01.04.2008 WHILE THE OPENING BALANCE SHOWN RS 32,53,250/- WHICH INCL UDES ICICI P/LOAN AMOUNTING TO RS 10,89,000/-. B. SOME CONFIRMATIONS OUT OF THE CONFIRMATIONS FILE D DURING THE ASSESSMENT PROCEEDINGS ARE ONLY SIGNED BY THE ASSESSEE NOT SIGNED BY THE CONCERNED PARTY SUCH AS BHARAT BANSAL, NISHA AGRAWAL, SACHIDANAND NAYAK. C. IN THE CASE OF RENU VERMA, IT IS MENTIONED THAT THE BANK ACCOUNT WAS OPENED ON 21.10.2008 BY DEPOSITING CASH OF RS 1,50,0007- AND RS L,000/~ AND THE LOAN WAS GIVEN ON 23.10.2008. THEREAFTER NO TRANSACTION WAS MADE IN THIS ACCOUNT DURING THE YEAR. D. THE OUT STANDING BALANCE OR TRANSACTIONS IN SOME CASES IN THE CONFIRMATION FILED DURING THE ASSESSMENT PROCEEDINGS AND FILED BEFORE YOUR GOODSE LF DIFFERS. AS PER THE CONFIRMATIONS FILED BY THE ASSESSEE BEFORE THE AO AND BEFORE YOUR HONOUR, IT I S NOTICED THAT THE TRANSACTIONS IN THE CASE OF SHRI BHARAT BANSAL AND NISHA AGRAWAL ARE AS UNDER:- S. NO. NAME OF THE PARTY DESCRIPTION AS PER CONFIRMATION BEFORE AO AS PER CONFIRMATION BEFORE CIT(A) 1. BHARAT BANSAL OPENING BALANCE 1,57,875 1,57,875 21.4.2008 CREDIT 1,50,000 ITA274/AGR/2013 CO NO.22 /AGR/2013 11 17.6.2008 INTT PAID 5,625 18.12.2008 CREDIT 1,50,000 1,50,000 17.6.2008 DEBIT 13,500 CLOSING BALANCE 4,57,875 3,00,000 2. NISHA AGRAWAL OPENING BALANCE 3,68,375 3,68,375 17. 6. 2008 INTT PAID 13,125 1.07.2008 CREDIT 1,00,000 1,00,000 17.6.2008 DEBIT 31,500 CLOSING BALANCE 4,68,375 4,50,000 FROM THE ABOVE, IT IS CLEAR THAT- 1. IN THE CASE OF BHARAT BANSAL, THE ASSESSEE HAS SHOW N FRESH UNSECURED LOAN OF RS 3 LACS WHILE THE LOAN OF RS 1.50 LACS WAS CONFIRMED B Y THE PARTY. THE CLOSING BALANCES OF UNSECURED LOANS IS RS 3,00,000/- WHILE THE ASSESSEE IN HIS BOOKS OF ACCOUNT SHOWN THE SAME AT RS 4,57,875/-. 12. THE CIT AFTER CONSIDERING THE REMAND REPORT HAVE TA BULATED THE SAME IN THE ORDER IN PARGRAPH 5.3 TO THE FOLLOW ING EFFECT : SI. NO. NAME OP. BALANCE 01-04-2008 DEBIT DURING THE YEAR CREDIT DURING THE YEAR CLOSING BALANCE 31-03-2009 1 BHARAT BANSAL 157875 300000 457875 2 CHANDRA BHAN VERMA 268000 268000 3 ICICI P/LOAN 1089000 453072 635928 4 K.B. SALES 225000 225000 5 IMISHA AGARWAL 368375 100000 468375 6 SACHINAND NAIYAK 160000 160000 7 SAROJ VERMA 315000 315000 ITA274/AGR/2013 CO NO.22 /AGR/2013 12 8 SHIVA SALES 400000 400000 9 SUDHA BANSAL 100000 100000 10 SURENDRA PODDAR 170000 170000 11 SHRI ARUN CHADHA 500000 500000 12 AXIS BANK 0860101163454 117500 481933 364433 13 BARKLEY FINANCE 169000 942626 773626 14 RENU VERMA 150000 150000 15. SHREE TIMBER CO. 200000 200000 TOTAL 3253250 739572 2674559 5188237 13. THE CIT(A), AFTER CONSIDERING THE REMAND REPORT HAD DELETED THE ADDITION OF RS.51,88,237/- AND HAD CONFIRMED TH E ADDITION OF RS.1,50,000/- ON ACCOUNT OF UNEXPLAINED LOAN FROM M R. BHARAT BANSAL. 14. THE REVENUE IS IN APPEAL ON ACCOUNT OF THE RELIEF G RANTED BY THE CIT(A). 15. IN THIS REGARD THE LD. DR HAD DRAWN OUR ATTENTION T O THE WRITTEN SUBMISSIONS WHICH WERE TO THE FOLLOWING EFFECT : AS REGARD CREDITORS ARUN CHADDHA BHARAT BANSAL SURENDRA POADAR NISHA AGGARWAL RENUE VERMA SACCHINAND NAYAR SUVIDHA BANSAL & SONS ITA274/AGR/2013 CO NO.22 /AGR/2013 13 ITA274/AGR/2013 CO NO.22 /AGR/2013 14 16. THE LD. AR FOR THE ASSESSEE HAD SUBMITTED THAT THE ASSESSEE IN HIS REPLY DTD. 26.02.2013 BEFORE THE CIT(A) HAD SUB MITTED THAT TOTAL CREDIT IN THE BALANCE SHEET WERE ONLY OF RS. 51,88,237/- AND NOT RS. 56 LAKHS AND FURTHER OUT OF THIS RS. 32 ,53,250/- WAS THE OLD OPENING BALANCE IN LOAN ACCOUNT COMING OVER SINCE LAST YEAR WHICH WERE OPENING BALANCE DURING THIS YEAR. H ENCE, FRESH LOAN DURING THE YEAR AMOUNTING TO RS. 26,74,559/- A ND ASSESSEE FILED THE ITR AND COMPUTATION AND BANK STATEMENT OF ALL THESE PERSONS BEFORE THE CIT APPEAL AND CIT APPEAL DISCUS SED THIS MATTER AT PAGE 19 PARA 5 OF THE APPELLANT ORDER AND FORWARDED THE ASSESSEE REPLY TO THE AO FOR COMMENTS. 17. THE LD. AR HAD ALSO DRAWN OUR ATTENTION TO LETTER D TD. 21.12.2011, WHEREBY ASSESSEE HAD REQUESTED AO TO SU MMON THESE CREDITORS FOR EXAMINATION WHICH THE ITO DID N OT SUMMON THEM AND HE WAS DUTY BOUND TO ENFORCE THE ATTENDANC E OF THESE PERSONS WITNESS AS PER DECISION OF ALLAHABAD HIGH C OURT IN THE CASE OF NATHU RAM V/S CIT 1963 49 ITR PAGE 561. THE LEARNED AO IN HIS REMAND REPORT ACCEPTED THE CONTENTION OF THE ASSESSEE IN HIS REMAND REPORT FURNISHED BY HIM AS PER PAGE 3 1 - 34 OF THE PAPER BOOK. AT PAGE 32, HE CONCEDED THAT CREDITORS ACCOUNT WERE OF RS. 51,88,237/- AND NOT RS. 56.00 LAKHS AND THAT OPENING CREDIT BALANCE WAS RS. 32,53,350/- INCLUDING ICICI LOAN OF RS 10.89 LAKHS, BUT HE OBJECTED TO ONLY 2 CASH CREDITS IN THE ACCOUNT OF RENU VERMA AND CASH OF RS. 1.5 LAKHS WAS DEPOSIT ED IN THE BANK FIRST AND THEN CHEQUE WAS ISSUED TO ASSESSEE W HICH ACCORDING TO HIM CASH WAS GIVEN BY THE ASSESSEE. IN THE ACCOUNT OF BHARAT BANSAL, HE POINTED OUT THAT OUT OF CREDIT OF RS. 3.00 ITA274/AGR/2013 CO NO.22 /AGR/2013 15 LAKHS I.E. 1.5 LAKHS + 1.5 LAKHS, HE HAS CONFIRMED ONLY CREDIT OF RS. 1.5 LAKHS, HENCE RS. 1.5 LAKHS REMAINED UNEXPLAINED . 18. WE HAVE HEARD THE RIVAL CONTENTIONS OF THE PARTIES AND PERUSED THE RECORD. THE ASSESSING OFFICER IN THE REMAND REP ORT HAD CONFIRMED THE OPENING BALANCE AS ON 01.04.2008 PERT AINING TO THESE CREDITORS WERE RS.32,53,250/- AND THE CREDITO R DURING THE YEAR WERE RS.26,74,559/-. THE CREDITORS DURING THE YEAR WERE AS UNDER : SL. NO. NAME AMOUNT 1. BHARAT BANSAL 3,00,000 2. NISHA AGARWAL 1,00,000 3. SH. ARUN CHADDA 5,00,000 4. AXIS BANK 4,81,933 5. BARCLAY FINANCE 9,42,626 6. RENU VERMA 1,50,000 7. SHREE TIMBER COMPANY 2,00,000 19. AS IS CLEAR FROM THE TABULATION HEREINABOVE THAT T HE ASSESSING OFFICER HAD MADE THE ADDITION EVEN IN RESPECT OF AX IS BANK AND BARCLAY FINANCE. THIS SHOWS THE TOTAL NON-APPLICATI ON OF MIND BY THE ASSESSING OFFICER. IN RESPECT OF THESE TWO CRED ITORS, WE HAVE NO DOUBTS THAT THESE ARE DULY EXPLAINED CREDITORS B EING THE FINANCIAL INSTITUTION/BANK, HENCE, THE ADDITION OF RS.4,81,933/- AND RS.9,42,626/- ARE DELETED. 20. WITH RESPECT TO RENU VERMA, WE HAD ALREADY MENTIONE D THAT THE DEPOSIT IN THE BANK ACCOUNT OF RENU VERMA WAS D ULY EXPLAINED BY HER IN THE RETURN OF INCOME FILED BY H ER. FURTHER, SHE HAD ALSO EXPLAINED THAT THE SAID AMOUNT WAS DUL Y GIVEN BY HER TO HER HUSBAND. IN OUR VIEW, THE ASSESSEE HAD D ISCHARGED HIS ITA274/AGR/2013 CO NO.22 /AGR/2013 16 ONUS AND THEREFORE, THE ADDITION MADE BY THE AO QUA RENU VERMA WAS UNCALLED FOR. FURTHER, THE AO WAS ASKED BY THE ASSESSEE DURING THE ASSESSMENT PROCEEDINGS TO SUMMO N ALL THESE CREDITORS INCLUDING RENU VERMA, BUT THEAO FAI LED TO EXERCISE HIS POWERS UNDER THE ACT. HENCE, FOR THIS REASON ALSO, THIS ADDITION IS DELETED. 21. IN RESPECT TO THE CREDITOR ARUN CHADDHA, THE CONFIR MATION OF ACCOUNT WAS PLACED BY THE ASSESSEE IN THE PAPER BOO K AT PAGE 129 AND 130. THE AMOUNT OF RS.5 LACS WAS PAID BY SH RI ARUN CHADDHA THROUGH CHEQUE DRAWN ON SHREYAS GRAMIN BANK , SB 791. THE ABOVE SAID FACT WAS NOT DISPUTED BY THE AS SESSING OFFICER IN THE REMAND REPORT AT PAGE 32 & 33 OF THE PAPER BOOK. IN VIEW OF THE ABOVE, THE ADDITION MADE BY THE ASSE SSING OFFICER ON ACCOUNT OF CREDITOR ARUN CHADDA IS DELETED. 22. IN RESPECT OF NISHA AGARWAL, AT PAGE 33 OF THE PAPE R BOOK, AS PER CONFIRMATION BEFORE AO, A CLOSING BALANCE OF RS .468375/- WAS MENTIONED WHEREAS AS PER CONFIRMATION BEFORE CI T(A), IT WAS MENTIONED AS RS.4,50,000/-. IN OUR VIEW, THE DI FFERENCE BETWEEN THE TWO IS A VERY SMALL AMOUNT AND MOREOVE R, THE CREDITOR IN THE BOOKS OF ACCOUNT OF THE ASSESSEE AR E REQUIRED TO BE SEEN AND IN THE PRESENT CASE, THE AMOUNT SHOWN I N THE ASSESSEES ACCOUNT WAS LESS AS COMPARED TO THE CONF IRMATION BEFORE THE AO. IN VIEW OF THE ABOVE, WE DO NOT FIND ANY REASON TO UPHOLD THE ACTION OF AO AND ACCORDINGLY, THE AMOUNT OF RS.468375/- IS DELETED. 23. IN RESPECT OF SHREE TIMBER, THE ASSESSEE HAS PLACED AT PAGE 146 TO 188 THE CONFIRMATION FROM SHREE TIMBER THROUGH I TS ITA274/AGR/2013 CO NO.22 /AGR/2013 17 PROPRIETOR SH. AKHIL BANSAL FOR AN AMOUNT OF RS.2,0 0,000/-. EVEN THE RETURN OF INCOME WAS PLACED ON RECORD FOR THE R ELEVANT ASSESSMENT YEAR. SINCE THE IDENTITY, CAPACITY AND CREDITWORTHINESS OF THE CREDITOR ARE BEYOND THE SHA DE OF DOUBT, THEREFORE, THE DELETION MADE BY THE CIT(A) IS REQUI RED TO BE UPHELD. GROUND NO. 2 OF THE REVENUE APPEAL AND GROUND -2 OF C.O. 24. IN RESPECT TO BHARAT BANSAL, THE LD. DR HAS BROUGHT TO OUR NOTICE THE COPY OF THE CONFIRMATION FILED BY THE AS SESSEE BEFORE THE ASSESSING OFFICER AND IT WAS SUBMITTED THAT IN THE CONFIRMATION FILED BY THE ASSESSEE, ONLY AN AMOUNT OF RS.1,50,000 WAS SHOWN AS CREDIT IN THE BOOKS OF ACC OUNT OF SHRI BHARAT BANSAL AND THE AMOUNT OF RS.1,50,000/- WAS R ECEIVED ON 1 ST DECEMBER, 2008. 25. IN REBUTTAL, THE LD. AR HAD SUBMITTED THAT THE BHAR AT BANSAL IS A REGULAR INCOME-TAX ASSESSEE AND IS MAINTAINING MERC ANTILE METHOD OF ACCOUNTING AND THEREFORE, THERE IS DIFFER ENCE IN THE BOOKS OF ASSESSEE AND THAT OF BHARAT BANSAL. 26. WE HAVE HEARD THE RIVAL CONTENTION AND PERUSED MATE RIAL AVAILABLE ON RECORD. THE CONFIRMATION OF ACCOUNT CL EARLY SHOWS THE RECEIPT OF RS.1,50,000/- THROUGH THE BANKING CH ANNEL AND THEREFORE, THE AMOUNT REMAINED TO BE UNPAID BY THE ASSESSEE WAS ONLY RS.1,50,000/-. THE SAID AMOUNT WAS NOT REF LECTED IN THE BOOKS OF ACCOUNT OF THE ASSESSEE. IN VIEW OF THE AB OVE, THE ASSESSEE FAILED TO GIVE ANY EXPLANATION FOR THE CRE DIT OF RS.1,50,000/-. IN VIEW OF THE ABOVE, THE APPEAL OF THE REVENUE IS DISMISSED AS THE ASSESSEES EXPLANATION IN RESPECT OF ITA274/AGR/2013 CO NO.22 /AGR/2013 18 RS.1,50,000/- IS ACCEPTED ON THE BASIS OF THE BOOKS OF ACCOUNT OF THE BHARAT BANSAL. HOWEVER, THE C.O. OF THE ASSESSE E IN RESPECT OF REMAINING RS.1,50,000/- WHICH WAS SUSTAINED BY THE LD. CIT(A), WE ARE OF THE OPINION THAT THE ASSESSEES EXPLANATI ON IS WITHOUT ANY MERIT AND ACCORDINGLY, THE SAME IS DISMISSED. 27. IN THE RESULT, GROUND NO. 2 OF THE REVENUE APPEAL I S DISMISSED AND GROUND NO. 2 OF THE ASSESSEES CROSS-OBJECTION IS ALSO DISMISSED. 28. GROUND NO. 3 RELATES TO DISALLOWANCE OF RS. 5,98,3 06/- MADE BY THE AO WHILE RS. 49,794/- CONFIRMED BY THE CIT A PPEAL. THE LEARNED AO DISCUSSED THIS MATTER AT PARA 3 AT PAGE 7-8. ACCORDING TO HIM, DONATION OF RS. 93,67,242/- MADE BY THE ASSESSEE TO SHRI SAI RAM CHARITABLE TRUST IS NOT FO R BUSINESS PURPOSE AND IS OUT OF THE TRANSFER OF BORROWED FUND S. ASSESSEE SUBMITTED THAT ASSESSEE HAS OWN CAPITAL OF RS. 61,9 4,824/- AND ALSO INTEREST FREE LOAN AND NO INTEREST CAN BE DISA LLOWED. HOWEVER, THE CIT APPEAL FOUND AT PARA 6.6 PAGE 32 T HAT ASSESSEE CAPITAL IS RS. 61,94,824/- AND INTEREST FEE LOAN OF RS. 17,83,000/- AGGREGATING ABOUT RS. 80 LAKHS AND DONATION HAS BEE N MADE FROM SYNDICATE BANK A/C TO SAI CHARITABLE TRUST WHO HAS CHARGED INTEREST OF RS. 46,794/- WHO HAS DIRECT NEX US WITH THE DONATION GIVEN AND HE CONFIRMED THE DISALLOWANCE TO THE EXTENT OF RS. 46,794/-. 29. FEELING AGGRIEVED BY THE ORDER, THE REVENUE IS IN A PPEAL BEFORE US. THE LD. DR HAD SUBMITTED THAT IN PARA 5, THE AS SESSING OFFICER HAD MENTIONED THAT THE INTEREST BEARING FUNDS WERE TRANSFERRED ITA274/AGR/2013 CO NO.22 /AGR/2013 19 TO M/S. SAI RAM CHARITABLE TRUST ON 06.01.2009, 27. 01.2009 AND 10.03.2009. FURTHER, IT WAS SUBMITTED THAT THE ASSE SSEE HAS INVESTED FROM ITS CAPITAL TO M/S. GANESH OXYGEN, SA I OM DEVELOPERS, BAJAJ ALLIANCE, FDR, SHARES IN SAHARA A ND THUS, THE OWN FUNDS WERE NOT AVAILABLE FOR TRANSFERRING THE A MOUNT TO M/S. SAI RAM CHARITABLETRUST. 30. PER CONTRA, THE LD. AR HAS SUBMITTED THAT THE ASSES SEES OWN CAPITAL WAS RS. 61,94,824/- AND UNSECURED INTEREST FREE LOANS OF RS.17,83,000/- WERE ALSO AVAILABLE. THE SAID AMOUNT WAS UTILIZED BY THE ASSESSEE FOR MAKING THE INVESTMENT IN SAI CH ARITABLE TRUST. THE LD. AR HAD ALSO RELIED ON THE DECISION O F HONBLE SUPREME COURT IN THE MATTER OF HERO CYCLES PVT. LTD . VS. CIT, 379 ITR 347 AND ORS. 31. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. IN OUR VIEW THIS GROUND AND THE OTHER GROUNDS ADJUDICA TED BY US HEREINABOVE IN THE APPEAL OF THE REVENUE WERE NOT R EQUIRED TO BE DECIDED ON MERIT, AS BY THE CIRCULAR DATED 08.08 .2019, THE BOARD HAS INSTRUCTED TO WITHDRAW ALL THE APPEALS HA VING TAX EFFECT OF LESS THAN RS.50 LACS BEFORE THE TRIBUNAL. IN VIEW OF THE ABOVE, WE ARE LEAVING THIS ISSUE OPEN AND WE ARE NO T DECIDING THIS ISSUE IN THE PRESENT APPEAL. ACCORDINGLY, THI S GROUND OF THE REVENUE APPEAL IS ALSO DISMISSED. 32. THE ASSESSEE IN THE C.O. HAD CHALLENGED THE ADDITIO NS SUSTAINED BY THE CIT(A). IN VIEW OF OUR FINDING RECORDED IN P ARAGRAPH 31, WE DO NOT WISH TO ADJUDICATE THIS GROUND OF THE C.O . FURTHER, WE ITA274/AGR/2013 CO NO.22 /AGR/2013 20 ARE ALSO OF THE OPINION THAT THE ASSESSEE WAS ONLY ABOVE TO SHOW THE AVAILABILITY OF RS.80 LACS IN THE FORM OF OWN C APITAL AND UNSECURED INTEREST FREE LOANS. THE REMAINING AMOUNT , HAVE NOT BEEN EXPLAINED BY THE ASSESSEE. IN VIEW OF THE ABOV E, GROUND NO. 3 OF THE C.O. IS DISMISSED. 33. GROUND NO. 4 OF THE REVENUE APPEAL IS ALSO DISMISSE D IN VIEW OF OUR FINDING RECORDED IN PARA 31 HEREIN ABOVE. GROUND NO. 4 OF THE C.O. 34. GROUND NO. 4 OF THE CO RELATES TO DISALLOWANCE OF R S. 92,626/- U/S 40(A)(IA)OF THE INCOME TAX. ACT IN RESPECT OF I NTEREST PAID TO BARKLAY FINANCE CO. WITHOUT DEDUCTION OF IDS. 35. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE PAYMENT WAS MADE TO BARKLAYFINANCE CO. WHICH IS A BANKAND IS ASSESSED TO INCOME-TAX. IN OUR CONSIDERE D OPINION, THE ASSESSEE WAS NOT REQUIRED TO DEDUCT THE TDS WHI LE MAKING THE PAYMENT OF INTEREST AND PRINCIPAL TO BARKLAY FI NANCE CO. THE BANK IS LIABLE TO BE TAXED ON THE INTEREST INCOME A ND IT IS NOT THE CASE OF THE AO THAT THE BANK HAS NOT DECLARED THE I NTEREST INCOME IN ITS RETURN OF INCOME AND HAS NOT PAID THE TAXES. IN OUR VIEW THIS ISSUE IS OF APPLICABILITY TO PROVISO TO SECTIO N 40(A)(IA) IS COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION O F HONBLE HIGH COURT IN THE MATTER OF ANSAL LAND MARK, [2015] 61 TAXMANN.COM 45 (DELHI) WHEREIN DELHI HIGH COURT HAS FOLLOWED THE DECISION OF AGRA TRIBUNAL IN THE MATTER OF RAJE EV AGARWAL.IN RAJIV AGARWAL V/S ADDITIONAL CIT IN ITA NO. 337/AGR A/2013 FOR A.Y. 2006-07 HAVE TAKEN A VIEW THAT IF PAYEE HAS PA ID TAX ON THE ITA274/AGR/2013 CO NO.22 /AGR/2013 21 INCOME RECEIVED BY HIM AS PER AMENDMENT U/S 201(1) W.E.F. 01.04.13 WHICH IS APPLICABLE FOR RETROSPECTIVE EFFE CT FROM 2005- 06. 36. RESPECTFULLY FOLLOWING THE DECISION OF DELHI HIGH C OURT IN THE MATTER OF ANSAL LAND MARK(SUPRA) WE ALLOW GROUND NO . 4 OF THE C.O. OF THE ASSESSEE. 37. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISS ED AND THE C.O. OF THE ASSESSEE IS PARTLY ALLOWED. (ORDER PRONOUNCED IN THE OPEN COURT ON 04.09.2019) SD/- SD/- (DR. MITHA LAL MEENA) (LALIET KUMAR) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 04.09.2019 COPY OF ORDER FORWARDED TO: (1) THE APPELLANT (2) THE RESPONDENT (3) COMMISSIONER (4) CIT(A) (5) DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL AGRA BENCH, AGRA