Chander Jeet Pathak, Delhi V. ACIT, New Delhi

ITA 2815/DEL/2016

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 1241 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 3 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-09-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2012-2013
• Appeal Filed On: 17-05-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: G JOHNSON
• Keywords: Unexplained cash credit; Opportunity of being heard; Source of fund; Accommodation entries; Set aside
• Section: 143(3); 201; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: B , NEW DELHI BEFORE SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER AND SHRI O.P. KANT, ACCOUNTANT MEMBER ITA NO . 2815 /DEL/ 2016 ASSESSMENT YEAR: 2012 - 13 SHRI CHANDER JEET PATHAK, B - 55, KIRPAL APARTMENTS, I.P. EXTENSION, DELHI VS. ACIT, CIRCLE - 36(1), NEW DELHI PAN : AAIPP6317M (APPELLANT) (RESPONDENT) APPELLANT BY SHRI AJIT GANDHI, CA RESPONDENT BY SHRI G. JOHNSON, CA ORDER PER O.P. KANT, A.M.: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST ORDER DATED 12/02/2016 PASSED BY THE LEARNED COMMISSIONER OF INCOME - TAX (APPEALS) - 19, NEW DELHI [IN SHORT THE LD. CIT(A) ] FOR ASSESSMENT YEAR 2012 - 13, RAISING FOLLOWING GROUNDS: 1. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) - 19, NEW DELHI ERRED, IN CONFIRMING THE ASSESSMENT CONCLUDED BY LD. AO AT RS. 57,42,600/ - INSTEAD OF THE RETURNED INCOME OF RS. 31,58,276/ - MADE IN ABSENCE OF ANY RELATED ADVERSE DOCUMENTS OR MATERIALS, FOUND IN COURSE OF THE SEARCH OPERATION. 2. THAT THE LEARNED COMMI SSIONER OF INCOME TAX (APPEALS) - 19, NEW DELHI ERRED ON FACTS AS WELL AS IN LAW. IN CONFIRMING AN ADDITION OF RS. 25,00,000/ - : (A) MADE BY LD. A.O. AS UNEXPLAINED CREDIT U/S 68 OF INCOME TAX ACT, 1961. DATE OF HEARING 01.08.2019 DATE OF PRONOUNCEMENT 03.09.2019 2 ITA NO . 2815/DEL/2016 (B) BY UPHOLDING THE INFERENCE DRAWN BY LD. A.O. THAT SOURCE OF SOURCE REMAINED UNEXPLAINED . (C) BY FORMING AN OPINION THAT PROVISO TO SECTION 68 INSERTED BY FINANCE ACT, 201 3 IS APPLICABLE FOR EARLIER YEARS. 3. THAT THE LEARNED COMMI SSIONER OF INCOME TAX (APPEALS) - 19, NEW DELHI ERRED, IN UPHOLDING THE INFERENCES MADE BY LD. AO THAT A SUM OF RS. 25,00,000/ - AS ABOVE - SAID ARE ACCOMMODATION ENTRIES, WITHOUT CONFRONTING ANY SUC H RELATED DETAILS & DOCUMENTS TO THE ASSESSEE. 4. THAT THE LEARNED COMMISS IONER OF INCOME TAX (APPEALS) - 19, NEW DELHI ERRED ON FACTS AS WELL AS IN LAW, AS THE ORDER PASSED BY LD. CIT(A) IS PERVASIVE TO THE SPECIFIC PROVISIONS OF LAW & THE INTERPRETATIONS BY HIGHER COURTS AND IS AS SUCH, A NULLITY. 5. THAT THE LEARNED COMMISS IONER OF INCOME TAX (APPEALS) - 19, NEW DELHI ERRED ON FACTS AS WELL AS IN LAW, IN NOT GRANTING PROPER OPPORTUNITIES TO THE APPELLANT, AS PER LAW AND ALSO IN NOT APPRECIATING THAT THE ASSESSMENT WAS CONCLUDED, IN ABSENCE OF PROPER OPPORTUNITY OF BEING HEARD, GRANTED TO THE APPELLANT. 6. THAT THE ABOVE GROUNDS OF APPEAL; ARE WITHOUT PREJUDICE TO EACH OTHER. 2. B RIEFLY STATED FACTS OF THE CASE ARE THAT THE ASSESSEE WAS ENGAGED IN THE BU SINESS OF CONSTRUCTION OF BUILDING. DURING THE YEAR UNDER CONSIDERATION , THE ASSESSEE FILE D RETURN OF INCOME ON 30/08/201 2 DECLARING TOTAL INCOME OF RS.31,58, 276/ - UNDER THE HEADS SALARY , PROFIT AND GAINS OF THE BUSINESS AND PROFESSION AND INCOME FRO M OTHER SOURCES. THE CASE WAS SELECTED FOR SCRUTINY AND IN THE ASSESSMENT COMPLETED UNDER SECTION 143(3) OF THE INCOME - TAX A CT, 1961 (IN SHORT THE A CT ) ON 27/02/2015, THE ASSESSI NG OFFICER MADE ADDITION OF RS. 25 LAKH IN TERMS OF SECTION 68 OF THE A CT FOR UNEXPLAINED LOAN FROM SH. SANJAY CHAKRAVA R TY. ON FURTHER APPEAL, THE LD. CIT(A) UPHELD THE FINDING OF THE ASSESSING OFFICER OBSERVING AS UNDER: 8. A PERUSAL OF THE STATE OF SH. SANJAY CHAKERVERTY SHOWS THAT HE IS A MAN OF LITTLE MEANS, HE STATES THAT HIS ACCOUNT WAS MERELY USED TO PROVIDE MONEY TO SH. CHANDER JEET PATHAK BY MR. DEEPAK MIGLANI WHO WAS HIS BROTHER - IN - LAW. THIS FACT WAS CONFRONTED TO THE ASSESSEE AND IT WAS EXPLAINED THAT REVENUE DOE S NOT SEEK TO LOOK INTO THE SOURCE OF SOURCE BUT HERE MR. SANJAY CHAKERVERTY HAS HIMSELF STATED THAT SOURCE WAS MR. DEEPAK MIGLANI AND NOT HIM. 3 ITA NO . 2815/DEL/2016 THEREFORE, ASSESSEE MUST PROVIDE THE EVIDENCE IN RESPECT OF CREDITWORTHINESS AND BANK ACCOUNT OF SH. DEEPAK MIGL ANI TO PROVE THE GENUINENESS OF THE TRANSACTION. THE ASSESSEE VIDE HIS REPLY DATED 10/02/2016 FURNISHED A COPY OF INCOME - TAX RETURN AND BANK ACCOUNT OF SH. DEEPAK MIGLANI. HE EXPLAINED THAT RS.14,00,000/ - HAD BEEN TRANSFERRED BY SH. DEEPAK MIGLANI TO SH. S ANJAY CHAKERVERTY ON 08/04/2011 AND THE BALANCE WAS CONTRIBUTED BY SH. SANJAY CHAKERVERTY TO TRANSFER RS. 25,00,000/ - TO THE ASSESSEE. 9. SH. SANJAY CHAKERVERTY DURING THE COURSE OF ASSESSMENT PROCEEDINGS HAD FILED A COPY OF HIS BANK ACCOUNT IN STATE BANK OF HYDERABAD. AS PER THE COPY OF THE BANK STATEMENT, THERE WAS A CREDIT IN HIS BANK ACCOUNT ON 26/05/2011 AND ON 30/05/2011 THERE WAS A TRANSFER THROUGH CHEQUE NO. 622748 OF THE SAME AMOUNT PURPORTEDLY MADE TO THE ASSESSEE. THUS THERE WAS A DIRECT NEXUS BETWEEN RECEIPT OF RS.25,00,000/ - AND PAYMENT OF RS. 25,00,000/ - . SH. SANJAY CHAKERVERTY HAS EXPLAINED THAT THE AMOUNT OF RS.25,00,000/ - WAS THE AMOUNT RECEIVED F ROM SH. DEEPAK MIGLANI WHICH WAS TRANSFERRED TO SH.CHANDER JEET PATHAK USING HIS ACCOUNT. BANK STATEMENT OF SH. DEEPAK MIGLANI FURNISHED BY THE AUTHORISED REPRESENTATIVE DOES NOT SHOW ANY SUCH TRANSFER OF RS. 25,00,000/ - . IN FACT IT SHOWS ONLY A TRANSFER O F RS. 14,00,000/ - ON 08.04.2011. THE AUTHORISED REPRESENTATIVE OF THE ASSESSEE DELIBERATELY DID NOT PROVIDE THE STATEMENT OF THE SUBSEQUENT PERIOD AND HE SEEKS TO EXPLAIN THE TRANSACTION ON 08/04/2011 OF RS. 14,00,000/ - AS THE SOURCE. 10. CONSIDERING THE F ACT THAT THE ASSESSEE HAS NOT CHALLENGED THE STATEMENT OF SANJAY CHAKREVERTY AND AT THE SAME TIME HAS NOT BEEN ABLE TO EXPLAIN THE SOURCE OF RS. 25,00,000/ - IN THE HAND SANJAY MIGLANI. THERE IS NO CONFIRMATION FROM SH. DEEPAK MIGLANI ON RECORD TO SHOW THAT SUM OF RS.25,00,000/ - WAS ROUTED THROUGH THE BANK OF SH. SANJAY CHAKERVERTY TO SH. CHANDER JEET PATHAK. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE SOURCE OF RS.25,00,000/ - IN THE HAND OF THE ASSESSEE REMAINS UNEXPLAINED AND THE ORDER OF THE ASSESSIN G OFFICER IS UPHELD. 3. BEFORE US, THE LD. COUNSEL OF THE ASSESSEE FILED A PAPER BOOK CONTAINING PAGES 1 TO 23, WHICH INCLUDED COMPLETE BANK STATEMENT OF SH . SANJAY CHAKRA VARTY INDICATING RECEIPT OF RS. 25 LAKH FROM SRI DEEPAK MIGLANI AND SUBMITTED THAT MATTER MAY BE RESTORED TO THE FILE OF THE ASSESSING OFFICER FOR VERIFYING THE SOURCE OF THE MONEY IN THE HANDS OF SH. SANJAY CHAKRAVARTY. HE ALSO GAVE AN UNDERTAKING THAT ASSESSEE WILL COMPLY WITH PROCEEDINGS BEFORE THE LD. ASSESSING OFFICER AND WILL REPRO DUCE BOTH SH. 4 ITA NO . 2815/DEL/2016 SANJAY CHAKRAVARTY AND SH. DEEPAK MIGLANI BEFORE THE ASSESSING OFFICER ALONGWITH NECESSARY DOCUMENTARY EVIDENCE TO JUSTIFY ALL THE I NGREDIENT OF SECTION 68 OF THE A CT. 4. THE LD. DR, ON THE OTHER HAND , SUBMITTED THAT THE ASSESSEE HAS ALREADY BEEN PROVIDED SUFFICIENT OPPORTUNITY AND THUS , NO FURTHER OPPORTUNITY SHOULD BE PROVIDED. 5. WE HAVE HEARD THE RIVAL SUBMISSION AND PERUSED THE RELEVANT MATERIAL ON RECORD. IN THE INSTANT CASE , IN THE BOOKS OF ASSESSEE, LOAN OF RS.25.00 LAKHS HAS BEEN SH OWN AS RECEIVED FROM SH. SANJAY CHAKRAVERTY. SH. SANJAY CHAKRAVERTY EXPLAINED THAT HE WAS NOT HAVING OWN SOURCE OF INCOME AND SAID MONEY WAS RECEIVED FROM SH. DEEPAK MIGLANI. T HE ADDITION OF RECEIPT OF RS. 25 LAKH FROM SH. SANJAY CHAKRAVARTY HAS MAINLY BEEN SUSTAINED BY THE LOWER AUTHORITIES ON THE REASONING THAT THE ASSESSEE COULD ESTABLISH ONLY RECEIPT OF RS. 14 LAKH FROM SRI DEEPAK MIGLANI TO SH. SANJAY CHAKRAVARTY . IN ABSENCE OF EXPLANATION FOR THE REMAINING AMOUNT, THE ASSESSING OFFICER HELD THAT THIS WAS THE ASSESSEE S OWN MONEY ROOTED THROUGH THE BANK ACCOUNT OF SH. SANJAY CHAKRAVARTY AND SH. DEEPAK MIGLANI. BEFORE US, THE ASSESSEE HAS SUBMITTED A COPY OF THE BANK STATEMENT OF SRI SANJAY CHAKRAVARTY, WHEREIN A RECEIPT OF RS. 25 LAKH ON 26/05/2011 FROM SH. D EEPAK MIGLANI HAS BEEN SHOWN TO HAVE BEEN RECEIVED THROUGH RTGS AND ON 30/05/2011 SAME AMOUNT HAS BEEN REMITTED TO THE ASSESSEE. THE ASSESSEE SUBMITTED THAT ACCORDING TO BANK STATEMENT THERE IS NO DOUBT THAT SAID AMOUNT OF RS. 25 LAKH W AS GIVEN BY SH . DEEPAK MIGLANI TO SH. SANJAY CHAKRAVARTY, WHICH HAS BEEN LENDED FURTHER TO THE ASSESSEE . FURTHER , HE SUBMITTED THAT DURING ASSESSMENT PROCEEDING, SH. DEEPAK MIGLANI COULD NOT BE PRODUCED AND NOW THE ASSESSEE IS 5 ITA NO . 2815/DEL/2016 WILLING TO PRODUCE HIM ALONG WITH DOCUMENTARY EVIDENCE IN SUPPORT OF SOURCE OF FUND. THE LD. COUNSEL UNDERTAKES BEFORE US TO PRODUCE BOTH S H . SANJAY CHAKRAVARTY AND SH. DEEPAK MIGLANI BEFORE THE ASSESSING OFFICER ALONG WITH NECESSARY DOCUMENTARY EVIDENCE IN SUPPORT INCLUDING THE BANK STATEMENT OF BOTH THE PERSONS AND DISCHARG E ONUS UNDER SECTION 68 OF THE A CT. IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE AND UNDERTAKING GIVEN BY THE LD. COUNSEL, WE SET ASIDE THE ORDER OF THE LD. CIT(A) ON THE ISSUE IN DISPUTE AND RESTORE THE ISSU E OF UNEXPLAINED CREDIT OF RS. 2 5 LAKH UNDER SECTION 68 OF THE A CT TO THE ASSESSING OFFICER FOR DECIDING AF RESH ON THE BASIS OF THE EVIDENCES PRODUCED BY THE ASSESSEE IN VIEW OF THE UNDERTAKING GIVEN BY THE LD. COUNSEL OF THE ASSESSEE. THE GROUND OF THE AP PEAL IS ACCORDINGLY ALLOWED FOR STATISTICAL PURPOSES. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER IS PRONOUNCED IN THE OPEN COURT ON 3 R D S E P T E M B E R , 2019. S D / - S D / - [ SUDHANSHU SRIVASTAVA ] [O.P. KANT] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 3 R D S E P T E M B E R , 2019. RK/ - [D.T.D.S] COPY FORWARDED TO: 1 . APPELLANT 2 . RESPONDENT 3 . CIT 4 . CIT(A) 5 . DR ASST. REGISTRAR, ITAT, NEW DELHI