I.T.O.-5(1), Firozabad V. Sh. Sanjay Kumar Gupta, Firozabad

ITA 315/AGR/2012

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 0560 (ITAT-AGRA)
• Duration Of Justice: 6 year(s) 10 month(s) 5 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 16-05-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 22-05-2013
• Assessment Year: 2008-2009
• Appeal Filed On: 11-07-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained investment; Gift; Source of fund; Additional evidence
• Section: 271(1)(c); 133(6); 131; 68; 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AGRA BENCH, AGRA BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI A.L. GEHLOT, ACCOUNTANT MEMBER ITA NO.315/AGRA/2012 ASSESSMENT YEAR: 2008-09 INCOME TAX OFFICER 5(1), VS. SHRI SANJAY KUMAR GUPTA, FIROZABAD. DURGA NAGAR, FIROZABAD. (PAN: ABHPG 3960 F). (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI WASEEM ARSHAD, SR. D.R. RESPONDENT BY : SHRI SAHIB P. SATSANGEE, C.A. DATE OF HEARING : 22.05.2013 DATE OF PRONOUNCEMENT : 31.05.2013 ORDER PER A.L. GEHLOT, ACCOUNTANT MEMBER: THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER DATED 30.03.2012 PASSED BY THE LD. CIT(A)-II, AGRA FOR THE ASSESSMEN T YEAR 2008-09. 2. THE REVENUE HAS RAISED THE FOLLOWING EFFECTIVE G ROUNDS OF APPEAL :- THAT THE LD. CIT(A)-II, AGRA HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.22,00,000/- (RS. TWENTY TWO LACS ) MADE BY THE AO WITHOUT APPRECIATING THE FACTS BROUGHT ON RECORD BY THE AO. 2 ITA NO.315/AGRA/2012 A.Y. 2008-09 2. THAT THE LD. CIT(A)-II, AGRA HAS ERRED IN LAW AN D ON FACTS IN DELETING THE ADDITION WITHOUT APPRECIATING THE FACT THAT THE CREDITWORTHINESS OF THE LENDERS, IN WHOSE BANK ACCO UNTS CASH DEPOSITS WERE MADE IMMEDIATELY BEFORE THE ISSUING OF THE LOA N CHEQUES, COULD NOT BE ESTABLISHED BY THE ASSESSEE. 3. THAT THE ORDER OF LD. CIT(A) BEING ERRONEOUS IN LAW AND ON FACTS DESERVES O BE QUASHED AND THAT OF THE A.O. TO BE RESTORED. 4. THAT HE APPELLANT CRAVES LEAVE TO ADD OR ALTER A NY OR MORE GROUND OR GROUNDS OF APPEAL AS MAY BE DEEMED FIT AT THE TIME OF HEARING OF APPEAL. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE DURING THE ASSESSMENT PROCEEDINGS THE A.O. NOTICED HAS PURCHASED FLAT AT NOIDA FOR A CONS IDERATION OF RS.46,99,500/-. WITH REGARD TO THE SOURCE OF INVESTMENT IN THE PURC HASE OF FLAT, IT WAS EXPLAINED BEFORE THE A.O. THAT THE ASSESSEE MADE PAYMENTS FRO M HIS OWN SOURCES AND FROM LOANS RAISED FROM FRIENDS AND RELATIVES. THE A.O. WAS NOT SATISFIED WITH THE EXPLANATION OF THE ASSESSEE AND MADE ADDITION OF RS .22,00,000/- AS UNDER :- (PAGE ANOS.8 & 9) 12. IN FACT, THE ASSESSEES REPLY IS BASED ON DEPO SITS AND WITHDRAWAL MADE BY THE PERSONS WHO ALLEGED TO HAVE GIVEN INTEREST FREE ADVANCES. THE ENTIRE STORY OF FIRST DEPOSITIN G THE CASH BY THE PERSONS CONCERN AND TO MAKE INTEREST FREE ADVANCES THROUGH CHEQUES IS NOTHING BUT A FABRICATED ONE BECAUSE THE HUFS OR OTHERS HAVE NO SUBSTANTIAL FUNDS WITH THEM AS ON THE DATE OF MAKIN G THE INTEREST FREE ADVANCE TO THE ASSESSEE THROUGH CHEQUE TO MAKE THE ADVANCE THROUGH CHEQUES DOES NO MEAN THE TRANSACTIONS ARE EXPLAINED BUT ON THE RECORD, IT IS TO BE SEEN WHETHER BEFORE MAKING ADVA NCES, THESE WERE SUFFICIENT MONEY WITH THE LENDERS. IN THE ASSESSEE S CASE THE INTEREST FREE ADVANCES WERE MADE ACCORDING TO THIS REQUIREME NT AND THE FAMILY 3 ITA NO.315/AGRA/2012 A.Y. 2008-09 MEMBERS HAVE TRIED TO ACCOMMODATE THE ASSESSEE BY F IRST DEPOSITING THE CASH IN RESPECTIVE BANK ACCOUNT AND THEREAFTER CHEQUES WERE ISSUED. THE ENTIRE STORY IS NOTHING BUT A FABRICAT ED ONE OR A CONCOCTED ONE AND SUCH COLOURABLE DEVICE BY LAUNDER ING THE MONEY THROUGH BANKING CHANNELS IS NOT JUSTIFIED AND ACCEP TABLE BECAUSE THE ASSESSEE HAS TRIED TO OBTAIN THE PAPER ENTRY OR RAT HER ACCOMMODATION ENTRY FREE OF INTEREST FROM THEIR NEAR AND DEARS AN D THEREFORE DEPOSITS IN THE ASSESSEES BANK ACCOUNT ARE LIABLE TO BE ADD ED BACK IN THE HANDS OF THE ASSESSEE AS UNEXPLAINED INVESTMENT IN THE FORM OF DEPOSITS IN THE BANK A/C ON DIFFERENT DATE IN F.Y. 2007-08 (A.Y. 2008- 09) IN ABSENCE OF ANY SATISFACTORY EXPLANATION, KEE PING IN VIEW OF THE PROVISION OF SECTION 69 OF THE ACT. 13. THUS, TO SUM THE FOREGOING DESCRIPTION, THE FOL LOWING ADDITIONS ARE BEING MADE TO THE INCOME OF ASSESSEE OUT OF HIS UNDISCLOSED AND UNEXPLAINED INCOME AND THE SAME ARE BEING ADDED BAC K TO HIS INCOME. (I) FROM THE ABOVE AND THE DETAILS OF PAYMENT GIVEN IN THE CHART, ASSESSEE DO NOT HAVE ANY GENUINE AND DISCLOSED SOUR CE OF INCOME FOR RS.100,000/- AND RS.500,000/- SHOWN TO B E PAID OUT OF BANK BALANCE, THUS THE WHOLE RS.600,000/- IS REQ UIRED TO BE ADDED BACK TO THE INCOME OF THE ASSESSEE. AND FOR SUCH CONCEALMENT OR FURNISHING INACCURATE PARTICULARS OF INCOME, PENALTY PROCEEDING U/S 271(1)(C) WILL ALSO BE INITI ATED. (II) THE OTHER PAYMENT OF RS.42,250/- SHOWN TO BE A VAILABLE CASH ALSO DO NOT HAVE ANY PROPER JUSTIFICATIONS, HENCE T HE SAME TOO IS REQUIRED TO BE ADDED BACK TO THE INCOME OF THE A SSESSEE. AND FOR SUCH CONCEALMENT OR FURNISHING INACCURATE PARTI CULARS OF INCOME, PENALTY PROCEEDING U/S 271(1)(C) WILL ALSO BE INITIATED. (III) AS FOR THE LOAN OF RS.10,00,000/- AND RS.6,00 ,000/- THE SAME COULD NOT BE PROVED AS PER DISCUSSION HEREINABOVE, THUS THE SAME IS REQUIRED TO BE ADDED BACK TO THE INCOME OF THE ASSESSEE. AND FOR SUCH CONCEALMENT OR FURNISHING I NACCURATE PARTICULARS OF INCOME, PENALTY PROCEEDING U/S 271(1 )(C) WILL ALSO BE INITIATED. 4 ITA NO.315/AGRA/2012 A.Y. 2008-09 7. IN VIEW OF THE ASSESSEES REPLY AND MATERIAL AVA ILABLE ON RECORD, ASSESSEES INCOME IS COMPUTED AS UNDER :- TOTAL INCOME AS SHOWN IN THE RETURN 2,19,183.00 ADD: (I) ADDITION AS DISCUSSED IN PARA 12(I) : 6,00,000.00 (II) ADDITION AS DISCUSSED IN PARA 12(II) : 10,00,000.00 (III) ADDITION AS DISCUSSED IN PARA 12 (III) : 6,00,000.00 TOTAL INCOME : RS.24,39,183.00 OR RS.24,39,180/- 4. THE CIT(A) DELETED THE SAID ADDITION AS UNDER :- (PAGE NOS.25 & 26) 5. I HAVE GONE THROUGH THE ASSESSMENT ORDER AND THE SUBMISSIONS MADE BY THE LD. AR AND ALSO THE REMAND REPORT OF TH E AO. IT IS ADMITTED BY THE AO THAT ALL THE CREDITORS HAVE NOT ONLY FILED CONFIRMATIONS BUT ALSO AFFIDAVITS. THE AVERMENTS M ADE IN THE AFFIDAVITS CANNOT BE BRUSHED ASIDE BY THE AO IN A L IGHT HEARTED MANNER UNLESS PROVED OTHERWISE. ALSO, ALL THE CRED ITORS ARE EXISTING ASSESSEES. NOT ONLY THAT THE CREDITORS HAVE ALSO F ILED THEIR CASH FLOW STATEMENTS. THE MAIM OBJECTION OF THE AO IN THE RE MAND REPORT IS THAT THE SOURCE AS SHOWN BY SOME OF THE CREDITORS IN THE CASH FLOW STATEMENT IS DIFFERENT FROM WHAT HAS BEEN SHOWN BY THEM IN THE RETURN OF INCOME FILED. EVEN IF THAT BE SO THAT WILL NOT CHANGE THE AMOUNT OF FUNDS AVAILABLE WITH THEM. ANOTHER OBJECTION OF TH E AO IS THAT THE ASSESSEE IS ONLY A SALARIED EMPLOYEE AND COULD NOT HAVE INVESTED SUCH A HUGE SUM FOR PURCHASING THE FLAT. IN FACT IT IS OXYMORON ON THE PART OF THE AO TO SAY SO AND AT THE SAME TIME HOLD THAT THE ASSESSEE HAD INVESTED IN THE PURCHASE OF FLAT HIS UNDISCLOSED IN COME. IT IS NOT UNCOMMON TO BORROW MONEY WHILE MAKING INVESTMENT IN PROPERTY. THIS CANNOT BE HELD AGAINST THE ASSESSEE. IN MY OP INION THE ASSESSEE HAS SUCCESSFULLY DISCHARGED HIS ONUS IN PROVING THE CASH CREDITORS BY SUBMITTING AFFIDAVITS, ASSESSMENT PARTICULARS, CASH -FLOW STATEMENTS OF ALL THE CREDITORS. ALSO, THERE IS NOTHING TO SUGGE ST THAT FUNDS GIVEN TO THE ASSESSEE AS LOANS EMANATED FROM HIM. THEREFORE , I AM OF THE OPINION THAT THE AO WAS NOT JUSTIFIED IN MAKING THE ADDITION OF RS.22 LAC AND THE SAME IS DELETED. 5 ITA NO.315/AGRA/2012 A.Y. 2008-09 5. THE ASSESSEE FILED CERTAIN ADDITIONAL EVIDENCES IN THE FORM OF COPIES OF ACKNOWLEDGEMENT OF RETURN OF COMPUTATION OF SHRI BH AGWAN DAS GUPTA FOR THE A.Y. 2008-09, BALANCE SHEET AS ON 04.02.2008 AND FI NANCIAL STATEMENT OF SHRI S.K. GUPTA, HUF FOR THE YEAR ENDED 31.03.2007, ACKN OWLEDGEMENT OF RETURN, COPIES OF BALANCE SHEET OF SHRI AJAY KUMAR, HUF FOR THE YEAR ENDED 31.03.2008, COPY OF ACKNOWLEDGEMENT OF RETURN OF USHA GUPTA, BA LANCE SHEET FOR THE YEAR ENDED 31.03.2008, COPIES OF ACKNOWLEDGEMENT OF RETU RN OF SHRI BAGWAN DAS GUPTA AND FINANCIAL STATEMENT FOR THE YEAR ENDED 31 .03.2008. SIMILAR PAPER BOOK HAS BEEN FILED IN CASE OF SHRI SANJAY KUMAR GUPTA, HUF FOR THE YEAR ENDED 31.03.2008. 6. AFTER HEARING THE LEARNED DEPARTMENTAL REPRESENT ATIVE, HE DID NOT MAKE ANY OBJECTION FOR THE ADMISSION OF THE ADDITIONAL EVIDE NCE. THESE DOCUMENTS ARE IN FACT NOT ADDITIONAL EVIDENCES BUT SUPPORTING DOCUME NTS OF ARGUMENTS. HOWEVER, IN THE INTEREST OF JUSTICE, WE ADMIT THESE DOCUMENTS A S ADDITIONAL EVIDENCES FILED BY THE ASSESSEE. 7. LD. DEPARTMENTAL REPRESENTATIVE RELIED UPON THE ORDER OF A.O. AND SUBMITTED THAT THE DEPOSITORS HAVE DEPOSITED THE CA SH IN THEIR ACCOUNTS BEFORE RECEIVING CHEQUES BY THE ASSESSEE. LD. DEPARTMENT AL REPRESENTATIVE SUBMITTED 6 ITA NO.315/AGRA/2012 A.Y. 2008-09 THAT IN VIEW OF ORDER OF I.T.A.T., AGRA BENCH IN TH E CASE OF SUMAN GUPTA VS. ITO, 138 ITD 153 (AGRA), THE ADDITION MADE BY THE A.O. I S SUSTAINABLE. AS REGARDS QUESTION WHETHER THE AO MADE ADDITION UNDER SECTIO N 69 OR SECTION 68 OF THE ACT THE LEARNED DR SUBMITTED THAT IN VIEW OF SECTION 29 2B AND 292BB OF THE ACT THE ADDITION CANNOT BE DELETED. 8. THE LD. AUTHORISED REPRESENTATIVE, ON THE OTHER HAND, RELIED UPON THE ORDER OF CIT(A) AND SUBMITTED THAT THE ASSESSEE HAS MADE ALL THE NECESSARY EXPLANATION AND FURNISHED DOCUMENTS BEFORE THE A.O. LD. AUTHOR ISED REPRESENTATIVE WHILE REFERRING PAGE NO.78 WHERE COPY OF STATEMENT OF SAV ING ACCOUNT NO.022010100402989 WITH UTI BANK OF THE ASSESSEE HA S BEEN PLACED, SUBMITTED THAT THE AMOUNT OF RS.22,00,000/- WAS PAID OUT OF T HAT AMOUNT. LD. AUTHORISED REPRESENTATIVE FURTHER SUBMITTED THAT THE CREDIT EN TRIES IN THE SAID SAVING ACCOUNT HAS BEEN EXPLAINED TO THE A.O. LD. AUTHORISED REPR ESENTATIVE FURTHER SUBMITTED THAT THE ASSESSEE HAS EXPLAINED EACH AND EVERY ENTR Y OF THE BANK ACCOUNT. HE SUBMITTED THAT THE PAYMENT OF RS.1,00,000/- DATED 2 0.04.2007 WAS MADE OUT OF THE OPENING BALANCE OF SAVING BANK ACCOUNT WHICH WAS RS .5,50,193/-. LD. AUTHORISED REPRESENTATIVE SUBMITTED THAT THE ASSESSEE HAS DEPO SITED HIS SALARY RECEIVED FOR THE MONTH OF APRIL & MAY 2007 IN THE SAID ACCOUNT. RS. 16,000/- WAS DEPOSITED OUT OF CASH AVAILABLE WITH THE ASSESSEE AND THUS THE TOTAL AMOUNT OF RS.5,00,000/- PAID ON 7 ITA NO.315/AGRA/2012 A.Y. 2008-09 25.06.2007 WAS OUT OF OPENING BALANCE OF UTI BANK R S.4,50,193/- AND OPENING BALANCE OF CASH IN HAND WAS RS.1,84,158/-. ONLY R S.16,000/- CASH WAS DEPOSITED IN THAT ACCOUNT. LD. AUTHORISED REPRESENTATIVE SUB MITTED THAT THE ASSESSEE HAS EXPLAINED THAT RS.5,00,000/- DATED 25.06.2007 WAS G IVEN OUT OF HIS OWN MONEY AND IN THIS REGARD CASH FLOW STATEMENT WAS ALSO FURNISH ED BEFORE THE A.O. OF WHICH COPY HAS BEEN PLACED AT PAGE NO.93 OF THE ASSESSEE S PAPER BOOK. LD. AUTHORISED REPRESENTATIVE SUBMITTED THAT OUT OF RS.22,00,000/- , PAYMENT OF RS.6,00,000/- HAS BEEN GIVEN BY THE ASSESSEE OUT OF HIS OWN MONEY. W HILE EXPLAINING PAYMENT OF RS.10,00,000/- PAID ON 02.07.2007, THE LD. AUTHORIS ED REPRESENTATIVE SUBMITTED THAT ASH OF RS.50,000/- AND RS.9,50,000/- WAS DEPOS ITED IN THE SAID SAVING ACCOUNT OF UTI BANK. THE SAID AMOUNT WAS OUT OF AMOUNT OF RS.22,00,000/- WITHDRAWN FROM VIJAYA BANK ON 28.05.2007. RS.6,00,000/- WAS WITHDRAWN FROM VIJAYA BANK ON 13.06.2007 AND RS.2,00,000/- WAS WITHDRAWN FROM VIJAYA BANK ON 23.06.2007. LD. AUTHORISED REPRESENTATIVE SUBMITTED THAT THE CA SH DEPOSIT IN UTI BANK BY THE ASSESSEE IN HIS OWN ACCOUNT WAS WITHDRAWN FROM HIS OWN BANK ACCOUNT IN ANOTHER BANK ACCOUNT IN VIJAYA BANK. LD. AUTHORISED REPRES ENTATIVE SUBMITTED THAT THE ASSESSEE HAS ALSO EXPLAINED THE SOURCE OF AMOUNT DE POSITED IN VIJAYA BANK. HE SUBMITTED THAT RS.1,00,000/- GIFT WAS FROM FATHER O F THE ASSESSEE SHRI B.D. GUPTA. HE SUBMITTED THAT AFFIDAVIT OF MOTHER HAS BEEN FILE D AS FATHER OF THE ASSESSEE HAS BEEN DIED ON 04.02.2008. LD. AUTHORISED REPRESENTA TIVE SUBMITTED THAT ANOTHER 8 ITA NO.315/AGRA/2012 A.Y. 2008-09 RS.1,00,000/- WAS WITHDRAWN FROM PARTNERSHIP FIRM M /S. B.D.G. HOSPITAL & RESEARCH CENTRE ON 28.05.2007. SIMILARLY, RS.2,50, 000/- WAS GIFT FROM FATHER SHRI B.D. GUPTA DATED 30.06.2007. LD. AUTHORISED REPRES ENTATIVE SUBMITTED HAT IN THIS WAY THE ASSESSEE HAS EXPLAINED EACH AND EVERY ENTRI ES OF AMOUNT DEPOSITED IN VIJAYA BANK. LD. AUTHORISED REPRESENTATIVE SUBMITT ED A STATEMENT EXPLAINING THE SOURCE OF DEPOSIT IN UTI BANK WHICH HAS PLACED ON R ECORD. 9. LD. AUTHORISED REPRESENTATIVE SUBMITTED THAT THE A.O. IS NOT CORRECT IN STATING THAT THE DEPOSITORS HAD DEPOSITED THE CASH IN THEIR ACCOUNT BEFORE ISSUING CHEQUE TO THE ASSESSEE. WHILE SUMMING UP THE EXPL ANATION REGARDING TRANSACTIONS, THE LD. AUTHORISED REPRESENTATIVE SUBMITTED THAT TH E AMOUNT RECEIVED FROM DEPOSITORS WERE DEPOSITED IN VIJAYA BANK BY THE ASS ESSEE IN HIS OWN ACCOUNT AND LATER ON CASH WAS WITHDRAWN FROM THAT VIJAY BANK AC COUNT AND DEPOSITED IN UTI BANK OUT OF WHICH THE PAYMENTS WERE MADE TO THE BUI LDERS. LD. AUTHORISED REPRESENTATIVE WHILE REFERRING PAGE NO.148 OF THE P APER BOOK WHERE COPY OF LETTER DATED 28.11.2010 FURNISHED TO THE A.O. HAS BEEN PLA CED, SUBMITTED THAT IN THE SAID LETTER IT HAS BEEN CLEARLY STATED THAT ALONG WITH T HE SAID LETTER THE ASSESSEE HAS FURNISHED AFFIDAVIT, CASH FLOW STATEMENT, SUMMARY O F THE BANK STATEMENT, PROOF OF RETURN FILED FOR THE A.Y. 2008-09 ALONG WITH TOTAL INCOME. IT WAS FURTHER SUBMITTED THAT ALL THE LENDERS HAPPENED TO BE THE FAMILY MEMB ERS OF THE ASSESSEES FATHER SHRI 9 ITA NO.315/AGRA/2012 A.Y. 2008-09 B.D. GUPTA AND HUF OF HIS FATHER. IN VIEW OF EVIDE NCE PLACED AND AFFIDAVIT FILED BY THE LENDERS NO ADVERSE INFERENCE CAN BE DRAWN IN THE HANDS OF THE ASSESSEE. IT WAS ALSO REQUESTED THAT IF THE A.O. IS NOT FOUND SA TISFIED WITH THE EXPLANATION OF HE ASSESSEE, THE A.O. MAY CALL FOR INFORMATION FROM TH ESE DEPOSITORS/LENDERS DIRECTLY UNDER SECTION 133(6) OF THE ACT. LD. AUTHORISED RE PRESENTATIVE SUBMITTED THAT ALL THE DEPOSITORS ARE ASSESSED TO TAX WITH THE SAME A. O. LD. AUTHORISED REPRESENTATIVE FURTHER SUBMITTED THAT THE AFFIDAVIT OF MOTHER OF THE ASSESSEE IS FIELD AS FATHER OF THE ASSESSEE HAS DIED. LD. AUTHORISED REPRESENTATIVE WHILE REFERRING THE AFFIDAVIT OF THE ASSESSEES MOTHER WHICH HAS BE EN PLACED AT PAGE NO.112, SUBMITTED THAT THE ASSESSEES FATHER MADE GIFT OF R S.6,30,000/-. THE A.O. HAS ACCEPTED THE GIFT OF RS.2,80,000/- BUT HE DOUBTED A BOUT OTHER GIFT OF RS.1,00,000/- AND RS.2,50,000/-. 10. WE HAVE HEARD THE LD. REPRESENTATIVES OF THE PA RTIES AND RECORDS PERUSED. THE ISSUE UNDER CONSIDERATION WHETHER ADDITION OF R S.22,00,000/- MADE BY THE A.O. UNDER SECTION 68 OR UNDER SECTION 69 OF THE AC T HAS BEEN RIGHTLY DELETED BY THE CIT(A). THE PROVISIONS OF SECTION 68 AND 69 AR E CLEARLY AND EXCLUSIVELY IN THEIR OPERATION. PRIMA FACIE, SECTION 68 IS APPLICA BLE ONLY WHEREIN THE SAME IS FOUND CREDITED IN THE BOOKS MAINTAINED BY THE ASSES SEE AND SECTION 69 APPLIES IN RESPECT OF INVESTMENT NOT RECORDED IN THE BOOKS, IF ANY, MAINTAINED BY THE ASSESSEE. 10 ITA NO.315/AGRA/2012 A.Y. 2008-09 WHERE THE BOOKS ARE MAINTAINED AND INVESTMENT APPEA RS THEREIN, THERE IS NO QUESTION OF APPLICATION OF SECTION 69 OF THE ACT. THE A.O. HAS TO PROCEED UNDER SECTION 68 AS REGARDS CASH CREDIT, IF ANY, COVERING THE SOURCE OF SAID INVESTMENT OR HAS TO PROCEED UNDER SECTION 69B, IF NEED BE. A CL OSE READING OF BOTH THESE SECTIONS MAKE IT CLEAR THAT UNDER SECTION 68 THERE SHOULD BE CREDIT ENTRY IN THE BOOKS OF ACCOUNT WHEREAS IN SECTION 69 THERE MAY NO T BE AN ENTRY IN THE BOOKS OF ACCOUNT. THIS IS FUNDAMENTAL DIFFERENCE BETWEEN TH E PROVISIONS. IN THE CASE OF SECTION 69 ONLY WHEN INVESTMENT HAS BE MADE BUT HAS NOT BEEN SATISFACTORILY EXPLAINED THE INCOME SHOULD BE TREATED TO BE INCOME OF THE ASSESSEE WHEREAS IN THE CASE OF SECTION 68 THERE SHOULD BE BOOK ENTRY AND I F THAT BOOK ENTRY IS NOT SATISFACTORILY EXPLAINED, THEN IT SHOULD BE TREATED AS INCOME OF THE ASSESSEE. 11. IN THE ABOVE BACK GROUND OF DISCUSSIONS, IF WE CONSIDER THE FACTS OF THE CASE UNDER CONSIDERATION, WE NOTICED THAT THE ADMITTED F ACTS OF THE CASE ARE THAT THE ASSESSEE HAS INVESTED RS.22,00,000/- AND AMOUNT GIV EN TO PURVANCHAL CONSTRUCTION WORKS (P) LTD. OUT HIS OWN BANK ACCOUNT MAINTAINED WITH UTI BANK, A COPY OF BANK ACCOUNT FILED BY THE ASSESSEE HAS BEEN PLACED AT PAGE NO.78 OF ASSESSEES PAPER BOOK. IN THE LIGHT OF THE FACT, WE FIND THAT THE A.O. IS NOT CORRECT IN INVOKING SECTION 69 OF THE ACT, AS THE ASSESSEE WAS MAINTAINING BOOKS OF ACCOUNT 11 ITA NO.315/AGRA/2012 A.Y. 2008-09 AND INVESTMENT APPEARS THEREIN, THEREFORE, THERE IS NO QUESTION OF APPLICATION OF SECTION 69 OF THE ACT. 12. AS REGARDS ADDITION UNDER SECTION 68 OF THE ACT , ON PERUSAL OF THE ORDER OF A.O., WE NOTICE THAT THE A.O. IS NOT CORRECT IN MAK ING ADDITION OF RS.22,00,000/- AS RS.6,00,000/- WAS OUT OF OPENING BALANCE OF THE ASS ESSEES OWN BANK ACCOUNT. BALANCE AMOUNT WAS DEPOSITED IN CASH AFTER WITHDRAW ING FROM ONE BANK ACCOUNT TO ANOTHER BANK ACCOUNT. THESE FACTS HAVE BEEN DEM ONSTRATED BY THE LD. AUTHORISED REPRESENTATIVE BY FILING A DETAILED CHAR T WHICH IS REPRODUCED AS UNDER:- EXPLANATION OF THE SOURCE OF DEPOSIT IN UTI BANK A /C NO. 2989 TOWARDS INVESTMENT MADE FOR ACQUISITION OF IMMOVABLE PROPERTY (ADVANCE TO BUILDER M/S PURVANCHAL CONSTRUCTION WOR KS PRIVATE LIMITED) DATE AMOUNT PAID EXPLANATION OF THE SOURCE OF FUNDS IN UTI BANK A/C NO. 2989 (P.B. PAGE 78-80) SOURCE OF CASH DEPOSIT IN UTI BANK A/C NO. 2989 EXPLAINED IN CASH FLOW STATEMENT (P.B. PAGE 93) SOURCE OF CASH WITHDRAWAL FROM VIJAYA BANK (P.B. PAGE 71-72) EXPLANATION OF SOURCE OF FUNDS RECEIVED BY DEPOSITOR / DONEE 20.04.2007 1,00,000 OUT OF OPENING BALANCE OF RS. 5,50,193 IN UTI BANK A/C NO. 2989 N.A. N.A. N.A. 25.06.2007 5,00,000 OUT OF OPENING BALANCE OF N.A. N.A. N.A. 12 ITA NO.315/AGRA/2012 A.Y. 2008-09 RS. 5,50,193 IN UTI BANK A/C NO. 2989 AND CASH DEPOSIT OF RS. 16,000 OUT OF OPENING BALANCE OF CASH IN HAND RS. 1,84,158 PLUS SALARY RECEIVED FOR THE MONTH OF APRIL & MAY, 2007 CASH FLOW STATEMENT (P.B. 93) RS. 1,00,000 GIFT FROM FATHER SHRI B.D. GUPTA ON 28.05.2007 AFFIDAVIT OF MOTHER (P.B. 112) , FATHER DIED ON 04.02.2008, DEATH CERTIFICATE (P.B. 113) COPY OF BANK ACCOUNT (P.B. 115- 120) OUT OF WITHDRAWAL FROM PARTNERSHIP FIRM, M/S BDG HOSPITAL & RESEARCH CENTRE, DEPOSITED IN VIJAYA BANK ON 28.05.2007 EVIDENT FROM DETAIL OF BANK ACCOUNT (P.B. 115) 02.07.2007 10,00,000 PAID OUT OF CASH DEPOSIT OF RS. 50,000 ON 21.06.2007 AND RS. 9,50,000 ON 25.06.2007 IN UTI BANK RS. 2,00,000 WITHDRAWN FROM VIJAYA BANK ON 28.05.2007 RS. 1,00,000 WITHDRAWN FROM PARTNERSHIP FIRM, M/S BDG HOSPITAL & RESEARCH CENTRE ON 28.05.2007 (P.B. 35) N.A. RS. 6,00,000 WITHDRAWN FROM VIJAYA BANK ON 13.06.2007 RS. 2,50,000 GIFT FROM FATHER SHRI B.D. GUPTA ON 13.06.2007 AFFIDAVIT OF MOTHER CASH DEPOSITED RS.2,50,000 ON 13.06.2007 IN A/C NO. 534 WITH VIJAYA BANK (P.B. 115, 117) OUT OF CASH WITHDRAWAL OF RS. 2,50,000 FROM A/C NO. 24823 WITH CANARA BANK ON 08.06.2007 (P.B. 115, 120) . THE DEPOSIT IN CANARA BANK WAS OUT OF REFUND OF LOAN RECEIVED VIDE CHEQUE 13 ITA NO.315/AGRA/2012 A.Y. 2008-09 (P.B. 112) , FATHER DIED ON 04.02.2008, DEATH CERTIFICATE (P.B. 113) COPY OF BANK ACCOUNT (P.B. 115- 120) DATED 08.06.2007 FOR RS. 2,50,000 FROM M/S AGRA ISPAT UDYOG, AGRA. COPY OF ACCOUNT OF M/S AGRA ISPAT UDYOG, AGRA (P.B. 153) RS. 1,50,000 LOAN FROM M/S B.D. GUPTA & SONS ON 13.06.2007 CONFIRMATION OF LOAN (P.B. 97) AFFIDAVIT OF DEPOSITOR (P.B. 138) COPY OF BANK A/C (P.B. 98, 140 & 154, 156) CASH FLOW STATEMENT (P.B. 99, 139) INCOME TAX RETURN (P.B. 141) CASH DEPOSITED RS.1,50,000 ON 13.06.2007 IN A/C NO. 4223 WITH VIJAYA BANK (P.B. 98, 140) OUT OF CASH WITHDRAWAL OF RS. 1,50,000 FROM A/C NO. 24824 WITH CANARA BANK ON 08.06.2007 (P.B. 154, 156) . THE DEPOSIT IN CANARA BANK WAS OUT OF REFUND OF LOAN RECEIVED VIDE CHEQUE DATED 08.06.2007 FOR RS. 1,50,000 FROM M/S AGRA ISPAT UDYOG, AGRA. COPY OF ACCOUNT OF M/S AGRA ISPAT UDYOG, AGRA (P.B. 157) RS. 2,00,000 LOAN FROM USHA GUPTA ON 13.06.2007 COPY OF BANK A/C (P.B. 158, 160 & 161, 163) CASH DEPOSITED RS.2,00,000 ON 13.06.2007 IN A/C NO. 539 WITH VIJAYA BANK (P.B. 158, 160) OUT OF CASH WITHDRAWAL OF RS. 2,00,000 FROM A/C NO. 24825 WITH CANARA BANK ON 08.06.2007 (P.B. 161, 163) . THE DEPOSIT IN CANARA BANK WAS OUT OF REFUND OF LOAN RECEIVED VIDE CHEQUE DATED 08.06.2007 FOR RS. 2,00,000 FROM M/S AGRA ISPAT UDYOG, AGRA. COPY OF ACCOUNT OF M/S AGRA ISPAT UDYOG, AGRA (P.B. 164) RS. 2,00,000 WITHDRAWN FROM VIJAYA BANK ON 23.06.2007 RS. 2,00,000 LOAN FROM SANJAY GUPTA HUF ON 23.06.2007 CONFIRMATION OF LOAN AMOUNT OF LOAN REFUND RECEIVED FROM M/S BDG HOSPITAL & RESEARCH CENTRE OF RS. 2,00,000 VIDE CHEQUE DATED 23.06.2007 DEPOSITED IN VIJAYA BANK A/C NO. 7886. COPY OF BANK ACCOUNT (P.B. 165) AND COPY OF ACCOUNT OF M/S BDG HOSPITAL & RESEARCH CENTRE 14 ITA NO.315/AGRA/2012 A.Y. 2008-09 (P.B. 100) AFFIDAVIT OF DEPOSITOR (P.B. 128) COPY OF BANK A/C (P.B. 101,165) INCOME TAX RETURN (P.B. 131) (P.B. 166) RS. 2,00,000 LOAN FROM M/S B.D. GUPTA & SONS ON 27.08.2007 CONFIRMATION OF LOAN (P.B. 97) AFFIDAVIT OF DEPOSITOR (P.B. 138) COPY OF BANK A/C (P.B. 98, 140) CASH FLOW STATEMENT (P.B. 99, 139) INCOME TAX RETURN (P.B. 141) SOURCE OF DEPOSIT OF RS. 2,00,000 IN SAVING A/C NO. 4243 WITH VIJAYA BANK (P.B. 98, 140) SOURCE AMOUNT OUT OF CASH IN HAND CASH FLOW STATEMENT (P.B. 139) 70,000 LOAN FROM AJAY GUPTA ON 15.06.2007 20,000 LOAN FROM USHA GUPTA ON 30.06.2007 20,000 SPECULATION INCOME ACKNOWLEDGEMENT OF RETURN & COMPUTATION OF INCOME (P.B. 141-143) 90,000 TOTAL : RS. 2,00,000 . 13.09.2007 6,00,000 PAID OUT OF CASH DEPOSIT OF RS. 6,00,000 ON 29.08.2007 IN UTI BANK RS. 6,00,000 WITHDRAWN FROM VIJAYA BANK ON 29.08.2007 RS. 2,00,000 LOAN FROM SANJAY GUPTA HUF ON 28.08.2007 CONFIRMATION OF LOAN (P.B. 100) AFFIDAVIT OF DEPOSITOR (P.B. 128) COPY OF BANK A/C (P.B. 101, 130) CASH FLOW STATEMENT (P.B. 103, 129) INCOME TAX RETURN (P.B. SOURCE OF DEPOSIT OF RS.2,00,000 IN SAVING A/C NO. 7886 WITH VIJAYA BANK (P.B. 101, 130) SOURCE AMOUNT OUT OF CASH IN HAND CASH FLOW STATEMENT (P.B. 129) 72,000 LOAN FROM AJAY GUPTA ON 15.06.2007 17,000 LOAN FROM USHA GUPTA ON 30.06.2007 18,000 SPECULATION INCOME ACKNOWLEDGEMENT OF RETURN & COMPUTATION OF INCOME (P.B. 131-133) 93,000 TOTAL : RS. 2,00,000 . 15 ITA NO.315/AGRA/2012 A.Y. 2008-09 131) RS. 1,50,000 LOAN FROM AJAY KUMAR GUPTA HUF ON 27.08.2007 CONFIRMATION OF LOAN (P.B. 94) COPY OF BANK A/C (P.B. 95) CASH FLOW STATEMENT (P.B. 96) SOURCE OF DEPOSIT OF RS.1,50,000 IN SAVING A/C NO. 7885 WITH VIJAYA BANK (P.B. 95) IS OUT OF MISCELLANEOUS INCOME. CASH FLOW STATEMENT (P.B. 96) RS. 50,000 LOAN FROM USHA GUPTA ON 27.08.2007 COPY OF BANK A/C (P.B. 158, 160) RS.34,904 AGAINST RECEIPT OF NSC MATURITY AND BALANCE OUT OF AVAILABLE BANK BALANCE IN A/C NO. 539 WITH VIJAYA BANK (P.B. 158, 160) KINDLY NOTE 1. THAT AS PER THE AFFIDAVIT OF MOTHER, SMT. USHA GUPT A (P.B. 112) CONFIRMING THE GIFTS BEING MADE BY FATHER LATE SHRI B.D. GUPTA TO THE ASSESSEE DURI NG THE YEAR YEAR. PART OF THESE GIFT MADE ARE ACCEPTED BY THE LEARNED ASSESSING OFFICER. 2. DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS, TH E ASSESSEE REQUESTED THE LEARNED ASSESSING OFFICER THAT, IF WAS NOT SATISFIED WITH THE EXPLANA TION / INFORMATION FURNISHED UNDER SECTION 133(6), A.O. COULD SUMMON THE DEPOSITORS UNDER SECT ION 131 (P.B. 148) . 3. ALL THE DEPOSITORS WERE ASSESSED TO TAX BY THE VERY ASSESSING OFFICER WHO HAS COMPLETED THE ASSESSMENT I.E., INCOME TAX OFFICER, 5(1), FIROZABA D [EVIDENT FROM P.B. 131, 141 & P.B. 7 SUBMITTED BEFORE CIT(A)]. 13. ON PERUSAL OF ABOVE CHART, WE FIND THAT THE A.O . IS NOT CORRECT IN OBSERVING IN PARAGRAPH NO.13 (I) OF HIS ORDER WHILE ADDING RS .6,00,000/- THAT THE ASSESSEE DID NOT HAVE ANY GENUINE AND DISCLOSED SOURCE OF INCOME BUT THE FACT IS THAT THE AMOUNT WAS PAID OUT OF OPENING BALANCE OF UTI BANK AND OPENING CASH BALANCE 16 ITA NO.315/AGRA/2012 A.Y. 2008-09 WITH THE ASSESSEE FOR WHICH THE ASSESSEE HAS FURNIS HED CASH FLOW STATEMENT. THE A.O. HAS FAILED TO POINT OUT ANY DEFECT IN THE CASH FLOW STATEMENT FILED BY THE ASSESSEE. THE A.O. IN PARAGRAPH NO.13(II) OBSERVED THAT PAYMENT OF RS.42,250/- WAS ALSO REQUIRED TO BE ADDED BUT THE A.O. WHILE MA KING THE ADDITION DID NOT ADD THIS AMOUNT IN THE TOTAL INCOME OF THE ASSESSEE. S O FAR AS CREDITWORTHINESS OF THE LENDER IS CONCERNED, WE NOTICE THAT THE ASSESSEE HA S FURNISHED SUFFICIENT MATERIAL IN THE FORM OF ACKNOWLEDGEMENT OF RETURN AND FINANCIAL STATEMENT OF DEPOSITS/LENDERS. THE LENDERS HAVE SHOWN THEIR SOURCE OF AMOUNT ALONG WITH MATERIAL AND EVIDENCES. THEREFORE, GROUND NO.2 OF THE REVENUE IS NOT SUSTAI NABLE IN LAW AS THE ASSESSEE HAS FURNISHED SUFFICIENT MATERIAL IN SUPPORT OF CREDITW ORTHINESS OF THE LENDERS. THE ASSESSEE HAS DISCHARGED THE BURDEN IN THIS REGARD. THE REVENUE HAS FAILED TO POINT OUT ANY CONTRARY MATERIAL TO THE FINDING OF THE CIT (A) ON THE ISSUE THE A.O. WITHOUT APPRECIATING THE FACTS OF EACH ENTRY MADE G ENERAL OBSERVATIONS THAT THE ENTIRE STORY IS NOTHING BUT A FABRICATED ONE OR A C ONCOCTED ONE AND SUCH COLORABLE DEVICE BY LAUNDERING THE MONEY THROUGH BANKING CHAN NELS. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE UNDER CONSIDERATION, THIS OBSERVATION OF THE A.O. IS NOT ACCEPTABLE PARTICULARLY WHEN THE SAME A.O. HAS MADE THE ASSESSMENT OF LENDERS WITHOUT POINTING OUT ANY SUCH ISSUE OR DEFECT WHILE MAKING THE ASSESSMENT OF THE LENDERS. 17 ITA NO.315/AGRA/2012 A.Y. 2008-09 14. AS REGARDS THE ORDER OF I.T.A.T., AGRA BENCH IN THE CASE OF SUMAN GUPTA VS. ITO, 138 ITD 153 (AGRA), THE RATIO OF SAID ORDER IS NOT APPLICABLE IN THE CASE UNDER CONSIDERATION AS IN THE CASE UNDER CONSIDERATION TH E CASH DEPOSITS IN UTI BANK WERE WITHDRAWN FROM ANOTHER BANK NAMELY VIJAY BANK. THE ASSESSEE MAINTAINED TWO BANK ACCOUNTS AND CASH DEPOSIT IN UTI BANK WAS WITHDRAWN FROM ANOTHER OWN ACCOUNT WITH VIJAY BANK. THEREFORE, THIS IS NOT A CASE WHERE THE LENDER HAS DEPOSITED CASH IN THEIR ACCOUNT AND THEN ISSUED CHE QUE TO THE ASSESSEE. FURTHER, THE A.O. IS NOT CLEAR WHETHER HE WANTS TO MAKE ADDITION UNDER SECTION 68 OR 69 OF THE ACT. IN THE LIGHT OF THE FACTS, ORDER IN CASE OF S UMAN GUPTA VS. ITO (SUPRA) IS DISTINGUISHABLE ON FACTS. 15. IN THE LIGHT OF THE ABOVE DISCUSSION, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF CIT(A). ORDER OF THE CIT(A) IS CONFIRMED ON THE ISSUE, IN DELETING ADDITION OF RS.22,00,000/-. 16. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISS ED. (ORDER PRONOUNCED IN THE OPEN COURT) SD/- SD/- (BHAVNESH SAINI) (A.L. GEHLOT) JUDICIAL MEMBER ACCOUNTANT MEMBER PBN/* 18 ITA NO.315/AGRA/2012 A.Y. 2008-09 COPY OF THE ORDER FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT (APPEALS) CONCERNED 4. CIT CONCERNED 5. D.R., ITAT, AGRA BENCH, AGRA 6. GUARD FILE. BY ORDER SR. PRIVATE SECRETARY INCOME-TAX APPELLATE TRIBUNAL, AGRA TRUE COPY