Ms Chhaya Singhal, Ghaziabad V. ITO, Ghaziabad

ITA 294/DEL/2016

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 7939 (ITAT-DELHI)
• Duration Of Justice: 3 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-05-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC 1
• Next Hearing Date: 15-03-2016
• Assessment Year: 2011-2012
• Appeal Filed On: 21-01-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAVI JAIN

Judgement Text

INCOME TAX APPELLATE TRIBUNAL DELHI BENCH A : NEW DELHI BEFORE SMT DIVA SINGH , JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER ITA NO. 294 /DEL/2016 (ASSESSMENT YEAR: 2011 - 12 ) CHHAYA SINGHAL, KJ - 68, KAVI NAGAR, GHAZIABAD, PAN:AIAPS3685B VS. ITO, WARD - 1(2), GHAZIBAD (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. ANURAG JAIN, CA REVENUE BY: SH. RAVI JAIN, CIT DR DATE OF HEARING 15/03/2016 DATE OF PRONOUNCEMENT 12 /05/2016 O R D E R PER PRASHANT MAHARISHI, A. M. 1. THIS IS APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE LD CIT ( A), GHAZIABAD DATED 31.08.2015 FOR THE ASSESSMENT YEAR 2011 - 12 . 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: - 1. THE ORDER OF THE HONBLE CIT(A) IS BAD IN LAW AND ON FACTS OF THE CASE, 2. THE HONOURABLE CIT(A) IS WRONG AND UNJUSTIFIED IN UPHOLDING ADDITION OF RS. 400000/ - AS UNACCOUNTED MONEY WHEN THE IDENTITY, CREDITWORTHINESS OF THE LENDERS AND THE GENUINENESS OF THE TRANSACTION HAD BEEN PROVED. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE , AN INDIVIDUAL , FILED HER RETURN OF INCOME ON 30.9.2011 SHOWING INCOME OF RS. 625476/ - AS PROPRIETOR M/S ISCON STEELS. DURING THE YEAR, ASSESSEE HAS TAKEN LOAN FROM MS. AMBIKA SINGHAL AND MS. ISHIKA SINGHAL OF RS. 2 LACS EACH. BEFORE THE ASSESSING OFFICER ASSESSEE SUBMITTED CONFIRMATION , INCOME TAX RETURNS ALONG WITH BANK STATEMENT S OF BOTH THE PARTIES, HOWEVER, AS CASH WAS DEPOSITED IN THE BANK PAGE 2 OF 3 ACCOUNT OF THE LENDER EITHER ON THE SAME DAY OR JUST B EFORE ISSUE OF CHEQUES , LD ASSESSING OFFICER DISBELIEVED GENUINENESS OF TRANSACTION AND MADE AN ADDITION OF RS. 4 LACS U/S 68 OF THE INCOME TAX ACT. THE ASSESSEE CARRIED THE MATTER BEFORE THE LD CIT(A). L D CIT(A) CONFIRMED THE ADDITION HOLDING THAT NOTH ING HAS BEEN BROUGHT ON RECORD TO PROVE SATISFACTORILY CREDITWORTHINESS OF THE LENDERS. THEREFORE, ASSESSEE IS IN APPEAL BEFORE US. 4. LD AR OF THE APPELLANT SUBMITTED THAT ASSESSEE HAS SUBMITTED THE CONFIRMATION OF THE LENDER, BANK ACCOUNT STATEMENT AND THE INCOME TAX RETURNS OF THE LENDERS. THEREFORE, HIS SUBMISSION WAS THAT ASSESSEE HAS PROVED THE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTION. REGARDING DEPOSIT OF CASH IN THE ACCOUNT OF THOSE LENDERS, IT WAS SUBMITTED THAT SOURCE OF THE INC OME OF THOSE CREDITORS ARE IN CASH AND THEY DEPOSIT ONLY CASH INTO THE BANK ACCOUNT WHEN SOME CHEQUES ARE REQUIRED TO BE ISSUED BY THEM . HE FURTHER SUBMITTED THAT AO DID NOT EXAMINE THOSE CREDITORS AND PROCEEDED ON THE ASSUMPTIONS THAT CREDITORS LACK THE CREDITWORTHINESS. HE FURTHER SUBMITTED THAT CASH DEPOSITED BY LENDERS ITSELF PROVES THEIR CREDITWORTHINESS WHEN THEY ARE ASSESSED TO INCOME TAX, THEREFORE CIT (A) ERRED IN HOLDING THAT THE ASSESSEE DID NOT PROVE CREDITWORTHINESS OF PARTIES SATISFACTORILY . 5. LD DR RELIED ON THE ORDER OF THE LOWER AUTHORITIES AND SUBMITTED THAT AS THE CASH HAS BEEN DEPOSITED IN THE BANK ACCOUNT OF THOSE PARTIES THEN CREDITWORTHINESS OF THE TRANSACTION AS WELL AS THE GENUINENESS OF THE TRANSACTIONS IS IN DOUBT AND THEREFORE HE S UBMITTED THAT THE ORDERS OF THE LOWER AUTHORITIES MAY BE CONFIRMED. 6. WE HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTIONS. BEFORE THE LD ASSESSING OFFICER ASSESSEE HAS DISCHARGE HIS INITIAL ONUS BY PRODUCING THE CONFIRMATION, BANK STATEMENT AND INCOME TAX RE TURN OF THOSE PARTIES. MERELY THAT THE CASH HAS BEEN DEPOSITED IN THE BANK ACCOUNT OF THE LENDERS IMMEDIATELY BEFORE THE ISSUE OF CHEQUES TO THE ASSESSEE CANNOT BE THE REASON THAT THE TRANSACTIONS ENTERED INTO BY THE ASSESSEE OF OBTAINING LOAN WITH THOSE L ENDERS ARE NOT CREDITWORTHY. THE ASSESSING OFFICER IS REQUIRED TO BRING SOME MATERIAL BEFORE TREATING THE M SO . AS THE ASSESSEE HAS SUBMITTED BEFORE US THAT THE LENDERS ARE DERIVING INCOME PAGE 3 OF 3 MAINLY IN CASH AND THEREFORE CASH IS DEPOSITED IN THEIR BANK ACCOUN T BEFORE ISSUE OF THE CHEQUE TO THE ASSESSEE, THIS ASPECT OF THE TRANSACTION HAS NOT BEEN VERIFIED BY THE LD ASSESSING OFFICER AND THEREFORE THE ISSUE OF ADDITION U/S 68 OF RS. 4 LACS ON ACCOUNT OF TWO ABOVE STATED LENDERS IS SET ASIDE TO THE FILE OF THE A SSESSING OFFICER FOR VERIFICATION ON THE ABOVE ARGUMENT OF THE ASSESSEE. NEEDLESS TO SAY, THAT PROPER OPPORTUNITY OF HEARING IS GRANTED TO THE ASSESSEE BEFORE DECIDING THE ISSUE. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRO NOUNCED IN THE OPEN COURT ON 1 2 / 05 /2016. - S D / - - S D / - ( DIVA SINGH ) (PRASHANT MAHARISHI) JUDICIAL MEMBER ACCOUNTANT M EMBER DATED: 1 2 / 05 /2016 A K KEOT COPY FORWARDED TO 1. APPLICANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI