Mr. Vimal Kumar, New Delhi V. ITO, New Delhi

ITA 2839/DEL/2012

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 3004 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 11 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-05-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Next Hearing Date: 23-05-2017
• Assessment Year: 2008-2009
• Appeal Filed On: 08-06-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: UMESH CHAND DUBEY
• Assessee Lawyers: R K MEHRA
• Keywords: Unexplained cash credit; Unexplained investment; Business income; Additional evidence
• Section: 143(3); 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH D, NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI O.P. KANT, ACCOUNTANT MEMBER I.T.A. NO.2839/DEL/2012 A.Y. : 2008-09 MR. VIMAL KUMAR 34-A, BAMNOLI VILLAGE, NEW DELHI 110 077 (PAN: AOPPK4137F) VS. INCOME TAX OFFICER, WARD 27(3), D-BLOCK, VIKAS BHAWAN, NEW DELHI (ASSESSEE) (RESPONDENT) ASSESSEE BY : SH. R.K. MEHRA, CA DEPARTMENT BY : SH. UMESH CHAND DUBEY, SR. DR ORDER PER H.S. SIDHU : JM THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE O RDER DATED 30.3.2012 OF THE LD. CIT(A)-XXIV, NEW DELHI RELEVANT TO ASSESSME NT YEAR 2008-09. THE ASSESSEE HAS RAISED AS MANY AS 5 GROUNDS, BUT ONLY PRESSED THE GROUND NO. 3, WHICH READS AS UNDER:- THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE PETITIONERS CASE, THE LD. CIT(A) ERRED IN LAW AND ON FACTS IN UPHOLDING THE ORDER OF THE AO IN CONFIRMING THE AD DITIONS AGGREGATED TO RS. 23,00,000/-, UNDER SECTION 68 OF THE INCOME TAX ACT, 1961. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E FILED THE RETURN OF INCOME DECLARING A NET INCOME OF RS.2,48,000/- ON 20.02.2 009. THE CASE OF THE ASSESSEE 2 WAS SELECTED FOR SCRUTINY AND NOTICE U/S. 143(2) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED AS THE ACT) WAS ISSUED ON 0 5.08.2009. THEREAFTER, THE AR ATTENDED THE ASSESSMENT PROCEEDINGS ONLY ONCE MO RE AS PER THE ASSESSMENT ORDER, I.E. ON 24.11.2010 TO FILE CERTAIN DETAILS, AND THEREAFTER, NOBODY ATTENDED FOR THE PROCEEDINGS. ULTIMATELY, THE AO PASSED AN E X-PARTE ORDER ESTIMATING THE BUSINESS INCOME OF THE APPELLANT AT RS.4 LACS. THE AO NOTICED THAT THE ASSESSEE HAD MADE AN INVESTMENT IN TWO PROPERTIES TOTALING R S.50,57,379/-. HE ALSO NOTICED THAT THE ASSESSEE HAD TAKEN A BANK LOAN FRO M HDFC BANK AMOUNTING TO RS.25 LACS AND UNSECURED LOANS AMOUNTING TO RS.23 L ACS. SINCE, NO FURTHER DETAILS WERE FILED, THE BALANCE AMOUNT OF RS.2,57,3 79/- (RS.50,57,379/- MINUS RS.48,00,000/-) WERE ADDED BACK TO THE INCOME OF TH E ASSESSEE AS UNEXPLAINED INVESTMENT. FURTHER, NO DETAILS OF RS.23 LACS WORTH OF UNSECURED LOANS WERE SUBMITTED BY THE ASSESSEE. THESE LOANS WERE TAKEN F ROM THREE PARTIES. ITR OF ONLY ONE CREDITOR NAMELY MRS. KUMUDANI JANGHU WERE SUBMITTED. HOWEVER, ITRS OF REMAINING TWO PERSONS AND COPIES OF BANK ST ATEMENTS OF ALL THE THREE PERSONS WERE NOT SUBMITTED. ACCORDINGLY, THE AO TRE ATED THESE LOANS AS UNVERIFIED AND ADDED THE AMOUNT OF RS.23 LACS AS UN EXPLAINED CASH CREDIT. SINCE, NO PROOF WAS SUBMITTED BEFORE THE AO, HE DID NOT ALLOW ANY DEDUCTION CLAIMED BY THE APPELLANT UNDER CHAPTER VIA AND ASSE SSED THE INCOME OF THE ASSESSEE AT RS. 29,74,170/- BY PASSING THE ORDER U/ S. 143(3) OF THE I.T. ACT, 1961 ON 30.12.2010. 3 3. AGAINST THE AFORESAID ASSESSMENT ORDER DATED 30. 12.2010, ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT(A), WHO VIDE IMPUGNED ORDER DATED 30.03.2012 HAS PARTLY ALLOWED THE APPEAL OF THE AS SESEEE. 4. AGGRIEVED WITH THE ORDER OF THE LD. CIT(A), THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 5. AT THE TIME OF HEARING, LD. COUNSEL OF THE ASSES SEE HAS FILED A PAPER BOOK CONTAINING PAGES 1 TO 65 HAVING THE COPY OF L ETTER DATED 14.12.2011 ADDRESSED TO THE CIT(A), NEW DELHI; COPY OF REMAN D REPORT DATED 6.7.2011; COPY OF LETTER DATED 13.6.2011 ADDRESSED TO THE CIT (A), NEW DELHI; COPY OF LEDGER ACCOUNT ADVANCE TO VIMAL KUMAR FROM 1.4.2007 TO 31.3.2008; COPY OF LEDGER ACCOUNT ADVANCE TO VIMAL KUMAR FROM 1.4.2008 TO 31.3.2009; COPY OF SALE DEED DATED 14.2.2008 BETWEEN SH. VIKAS JAIN AN D SH. VIMAL KUMAR; COPY OF SALE DEED DATED 26.3.2008 BETWEEN CENTRAL WAREHO USING CORPORATION AND SH. VIMAL KUMAR; COPY OF BANK STATEMENT FROM 1.4.2007 TO 31.3.2008; COPY OF INCOME TAX RETURN FILED ON 30.9.2008 OF SH. KUMUDAN I JHANGU, FOR THE ASSESSMENT YEAR 2008-09; COPY OF LETTER BY THE IT O, WARD 24(1), ADDRESSED TO SH. KUMUDANI JHANGU; COPY OF INCOME TAX RETURN FILE D BY THE ASSESSEE FOR THE ASSESSMENT YEAR 2008-09 ALONGWITH THE STATEMENT OF ASSESSABLE INCOME AND COPY OF STATEMENT OF AFFAIRS AS ON 31.3.2007 AND 31 .3.2008. THE ASSESSEE HAS CERTIFIED THAT ALL THE ABOVE MENTIONED DOCUMENTS C ONTAINED IN THE PAPER BOOK ARE THE TRUE COPIES OF THOSE DOCUMENTS WHICH ARE AV AILABLE WITH THE LOWER 4 AUTHORITIES, WHICH WERE NOT CONSIDERED BY THEM, HEN CE, THE ADDITION OF RS. 23 LACS WAS WRONGLY MADE BY THE AO AND ALSO CONFIRMED BY THE LD. CIT(A) WHICH NEEDS TO BE DELETED. 6. ON THE OTHER HAND, LD. COUNSEL OF THE ASSESSEE R ELIED UPON THE ORDERS OF THE AUTHORITIES BELOW AND REQUESTED TO UPHOLD THE O RDER OF THE LD. CIT(A). 7. WE HAVE HEARD BOTH THE COUNSEL AND PERUSED THE R ELEVANT RECORDS AVAILABLE WITH US, ESPECIALLY THE ORDERS OF THE REV ENUE AUTHORITIES AS WELL AS THE PAPER BOOK FILED BY THE ASSESSEE CONTAINING PAGES 1 TO 65 HAVING THE COPY OF LETTER DATED 14.12.2011 ADDRESSED TO THE CIT(A), NEW DELHI; COPY OF REMAND REPORT DATED 6.7.2011; COPY OF LETTER DATED 13.6.2 011 ADDRESSED TO THE CIT(A), NEW DELHI; COPY OF LEDGER ACCOUNT ADVANCE TO VIMAL KUMAR FROM 1.4.2007 TO 31.3.2008; COPY OF LEDGER ACCOUNT ADVANCE TO VIMAL KUMAR FROM 1.4.2008 TO 31.3.2009; COPY OF SALE DEED DATED 14.2.2008 BETWEE N SH. VIKAS JAIN AND SH. VIMAL KUMAR; COPY OF SALE DEED DATED 26.3.2008 BETW EEN CENTRAL WAREHOUSING CORPORATION AND SH. VIMAL KUMAR; COPY OF BANK STATE MENT FROM 1.4.2007 TO 31.3.2008; COPY OF INCOME TAX RETURN FILED ON 30.9. 2008 OF SH. KUMUDANI JHANGU, FOR THE ASSESSMENT YEAR 2008-09; COPY OF L ETTER BY THE ITO, WARD 24(1), ADDRESSED TO SH. KUMUDANI JHANGU; COPY OF IN COME TAX RETURN FILED BY THE ASSESSEE FOR THE ASSESSMENT YEAR 2008-09 ALONGW ITH THE STATEMENT OF ASSESSABLE INCOME AND COPY OF STATEMENT OF AFFAIRS AS ON 31.3.2007 AND 31.3.2008. 5 7.1 WE FIND THAT LD. CIT(A) HAS ADJUDICATED THE ISS UE IN DISPUTE VIDE PARA NO. 4.5 TO 4.6 AS UNDER:- 4.5 IN GROUND NOS. 3, 6 AND 8, THE APPELLANT HAS IMPUGNED THE ADDITION OF RS. 23 LACS TO HIS INCOME U/S. 68 OF THE ACT AS UNEXPLAINED CASH CREDIT. THE APPELLANT SUBMITTED THAT LOANS AMOUNTING TO RS. 23 LACS WERE TAKEN FROM SMT. KUMUDANI JANGHU (RS. 10 LACS), SH. MAHAVIR SINGH (RS. 8 LACS) AND SH. INDER JEET KUMAR (RS. 5 LACS). THE APPELLANT SUBMITTED THAT THESE WERE UNSECURED LOANS AND THE BANK STATEMENTS OF THESE PARTIES WERE NEVER CALLED FOR BY THE AO. ACCORDINGLY, THE APPELLANT FILED AN APPLICATION UND ER RULE 46 FOR SUBMISSION OF ADDITIONAL EVIDENCE, WHI CH WAS ACCEPTED AND A REMAND REPORT REGARDING THE SAME WAS CALLED FOR FROM THE AO VIDE LETTER DATED 13.6.2011. THE REMAND REPORT WAS RECEIVED FROM THE AO VIDE HIS LETTER DATED 6.7.2011 IN WHICH HE SUBMITTED THAT REPEATED OPPORTUNITIES WERE GIVEN TO THE APPELLANT, ASKING HIM TO SUBMIT THE REQUISITE DETAILS TO PROVE THE VERACITY OF THE UNSECURED LOAN S, THE GENUINENESS OF THE TRANSACTIONS AND THE IDENTIT Y AND CREDITWORTHINESS OF THE PARTIES. HOWEVER, NO DETAILS WERE COMING FORTH AND THEREFORE, ADDITIONS HAD TO BE MADE. SINCE, IT WAS DECIDED TO ADMIT THE ADDITIONAL EVIDENCE, THE APPELLANT WAS ASKED TO PRODUCE ALL THE THREE LOAN CREDITORS FOR PERSONAL DEPOSITION VIDE ORDER SHEET ENTRY DATED 28.12.2011 DURING APPELLATE PROCEEDINGS. THIS WAS REQUIRED FOR 6 THE REASON BECAUSE IT WAS NOTICED FROM THE BANK ACCOUNTS OF THE THREE LOAN CREDITORS THAT CASH WAS DEPOSITED IN EACH ACCOUNT BEFORE GIVING LOAN TO THE APPELLANT. THIS INTRODUCED AN ELEMENT OF SUSPICION REGARDING THE GENUINENESS OF THE TRANSACTION AND THEREFORE, THE LD. AR WAS ASKED TO PRODUCE ALL THE THREE LOAN CREDITORS FOR PERSONAL DEPOSITION. 4.6 ONE OF THE LOAN CREDITORS SH. INDERJEET KUMAR, S/O. SH. NARAIN SINGH APPEARED BEFORE ME ON 03.02.2012 TO CONFIRM THAT HE HAD GIVEN A LOAN OF RS.5 LACS TO THE APPELLANT. SH. INDERJEET KUMAR WAS REQUIRED TO INFO RM ABOUT THE CASH DEPOSIT OF RS.4,90,000/- IN HIS BANK ACCOUNT JUST BEFORE HE GAVE LOAN OF RS.5 LACS TO TH E APPELLANT. SH. INDERJEET KUMAR HAD NO SATISFACTORY EXPLANATION OR EVIDENCE REGARDING THE CASH DEPOSITE D IN HIS BANK ACCOUNT. THE OTHER TWO LOAN CREDITORS W ERE NOT PRODUCED BEFORE THE UNDERSIGNED DESPITE REPEATE D OPPORTUNITIES GIVEN TO THE APPELLANT AND HIS COUNSE L. IT IS NOTICED THAT SH. INDERJEET KUMAR DEPOSITED RS.4,90,000/- IN CASH IN HIS BANK ACCOUNT ON 08.02.2008 AND GAVE A CHEQUE OF RS.5 LACS TO THE APPELLANT ON 11.02.2008. SIMILARLY, SH. MAHAVIR SINGH, S/O. SH. DILIP SINGH DEPOSITED CASH AMOUNTIN G 7 TO RS.9,50,000/- IN HIS BANK ACCOUNT ON 13.02.2008 AND GAVE A CHEQUE OF RS.8 LACS TO THE APPELLANT ON 14.02.2008. AS REGARDS SMT. KUMUDANI JANGHU, SHE DEPOSITED CASH AMOUNTING TO RS.5 LACS ON 19.02.2008 IN HER BANK ACCOUNT IN UNION BANK OF INDIA. ANOTHER AMOUNT OF RS.5 LACS IN CASH WAS DEPOSITED IN HER BA NK ON 20.02.2008 AND A CHEQUE OF RS.10 LACS WAS GIVEN TO THE APPELLANT ON THE SAME DATE. SINCE, THE GENUINENESS OF THE TRANSACTION AND THE CREDITWORTHINESS OF THE LOAN CREDITORS HAS NOT BEEN CONCLUSIVELY ESTABLISHED BEFORE THE UNDERSIGNED BY. THE APPELLANT DESPITE HAVING BEEN GIVEN REPEATED OPPORTUNITIES, IT IS HELD THAT THESE LOANS ARE NOT GENUINE AND THEREFORE, THE ADDITION OF RS. 23 LACS MADE BY THE AO TO THE INCOME OF THE APPELLANT AS UNEXPLAINED CASH CREDIT U/S. 68 OF THE INCOME TAX A CT, 1961 IS HEREBY CONFIRMED. 7.2 AFTER PERUSING THE AFORESAID FINDINGS OF THE LD. CIT(A) AS WELL AS THE PAPER BOOK FILED BY THE ASSESSEE, AS MENTIONED ABOV E, WE NOTE THAT SH. INDERJEET KUMAR HAD NO SATISFACTORY EXPLANATION OR EVIDENCE REGARDING THE CASH DEPOSITED IN HIS BANK ACCOUNT. HOWEVER, LD. CIT(A) NOTICED THAT SH. INDERJEET 8 KUMAR DEPOSITED RS.4,90,000/- IN CASH IN HIS BANK A CCOUNT ON 08.02.2008 AND GAVE A CHEQUE OF RS.5 LACS TO THE ASSESSEE ON 11.02 .2008. SIMILARLY, SH. MAHAVIR SINGH, S/O. SH. DILIP SINGH DEPOSITED CASH AMOUNTING TO RS.9,50,000/- IN HIS BANK ACCOUNT ON 13.02.2008 AND GAVE A CHEQUE OF RS.8 LACS TO THE ASSESSEE ON 14.02.2008. SINCE, THE GENUINENESS OF T HE TRANSACTION AND THE CREDITWORTHINESS OF THE LOAN CREDITORS HAS NOT BEEN CONCLUSIVELY ESTABLISHED BEFORE THE LOWER AUTHORITIES, HENCE, THE LD. CIT(A) HAS RIGHTLY CONFIRMED THE ADDITION OF RS. 13,00,000/- I.E. (RS. 5 LACS FROM SH. INDERJEET KUMAR AND RS. 8 LACS FROM SH. MAHAVIR SINGH) AND HELD THAT THESE L OANS ARE NOT GENUINE AND TREATED THE SAME AS UNEXPLAINED CASH CREDIT U/S. 6 8 OF THE ACT, BECAUSE THESE TWO LOANS I.E. RS. 5 LACS AND RS. 8 LACS WERE NOT REFLECTED NEITHER IN THE INCOME TAX RETURN OF THE DONOR AS WELL AS IN THE INCOME TA X RETURN OF THE ASSESSEE. THEREFORE, WE UPHELD THE ADDITION OF RS. 13 LACS I.E. (RS. 5 LACS FROM SH. INDERJEET KUMAR AND RS. 8 LACS FROM SH. MAHAVIR SINGH). 7.2.1. HOWEVER, AS REGARDS THE ADDITION/CONFIRMAT ION OF RS. 10 LACS IS CONCERNED, WHICH WAS ALSO AN UNSECURED LOAN FROM S H. KUMUDANI JHANGU, FOR THE ASSESSMENT YEAR 2008-09, WE FIND THAT THE ASSES SEE HAS FILED THE COPY OF INCOME TAX RETURN FILED ON 30.9.2008 OF SH. KUMUDAN I JHANGU, FOR THE ASSESSMENT YEAR 2008-09 AND ALSO HIS INCOME TAX R ETURN FOR THE AY 2008-09 REFLECTING THE AMOUNT OF RS. 10 UNDER THE HEAD DE DUCTIONS UNDER CHAPTER-VI- A ALONGWITH THE STATEMENT OF ASSESSABLE INCOME AND ALSO COPY OF STATEMENT OF 9 AFFAIRS AS ON 31.3.2007 AND 31.3.2008. IN OUR CONSI DERED OPINION, THESE DOCUMENTS ARE ENOUGH TO ESTABLISH THE GENUINENESS O F THE TRANSACTION AND THE CREDITWORTHINESS OF THE LOAN CREDITORS, HENCE, THE ADDITION OF RS. 10 LACS BEING UNSECURED LOAN FROM KUMUDANI JANGHU IS HEREBY DEL ETED AND AS A RESULT, THE ASSESSEE GETS PART RELIEF OF RS. 10 LACS ONLY. 8. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE STAND PARTLY ALLOWED. ORDER PRONOUNCED ON 30/05/2017. SD/- SD/- [O.P. KANT] [H.S. SIDHU] ACCOUNTANT MEMBER JUDICIAL MEMBER DATE:30/05/2017 SRBHATNAGAR COPY FORWARDED TO: - 1. ASSESSEE - 2. RESPONDENT - 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES 10