DCIT, Agra V. Shri Devendra Singh, Auraiya

ITA 328/AGR/2009

• Counselvise Citation: 32820314 RSA 2009
• Duration Of Justice: 2 year(s) 2 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-11-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 18-11-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 24-08-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A K SHARMA
• Assessee Lawyers: K C AGARWAL
• Keywords: Unexplained cash credit
• Section: 131; 68; 10

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AGRA BENCH, AGRA BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI B.P. JAIN, ACCOUNTANT MEMBER ITA NO.328/AGR/2009 ASSESSMENT YEAR: 2006-07 DY. COMMISSIONER OF INCOME TAX 2, VS. SHRI D EVENDRA SINGH, AGRA. S/O. SHRI MALKHAN SINGH, MIJHAAI MOHAL, AURAIYA. (PAN: AVEPS 8867 J). C.O. NO.42/AGR/2009 (IN ITA NO.328/AGR/2009) ASSESSMENT YEAR: 2006-07 SHRI DEVENDRA SINGH, VS. DY. COMMISSIONER OF INCOME TAX 2, S/O. SHRI MALKHAN SINGH, AGRA. MIJHAAI MOHAL, AURAIYA. (PAN: AVEPS 8867 J). (APPELLANTS) (RESPONDENTS) REVENUE BY : SHRI A.K. SHARMA, JR. D.R. ASSESSEE BY : SHRI K.C. AGARWAL, ADVOCATE DATE OF HEARING : 18.11.2011 DATE OF PRONOUNCEMENT : 22.11.2011 ORDER PER BENCH : ITA NO.328/AGR/2009& C.O. NO.42/AGR/2009 A.Y. 2006-07 2 THIS APPEAL OF THE REVENUE ARISES FROM THE ORDER OF LD. CIT(A)-I, AGRA DATED 12.06.2009 FOR THE ASSESSMENT YEAR 2006-07. THE AS SESSEE HAS ALSO FILED THE CROSS OBJECTION AGAINST THE REVENUES APPEAL. 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL :- 1. THAT THE CIT(APPEALS)-1, AGRA HAS ERRED IN LAW IN DELETING THE ADDITION OF RS.2,60,000/- BEING LOAN TAKEN FROM MOT HER SMT. SAVITRI DEVI MADE ON ACCOUNT OF UNEXPLAINED CASH CREDITS WI THOUT APPRECIATING THE FACTS DISCUSSED IN THE ASSESSMENT ORDER. IN FACT, THE CREDITOR HAS DEPOSITED CASH OF RS.2,60,000/- IN HER BANK ACCOUNT JUST BEFORE THE IMPUGNED ADVANCE OF THE SAME AMOUNT TO T HE APPELLANT. 1(A) THAT THE CIT(APPEALS)-1, AGRA HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.3,06,000/- BEING LOANS TAKEN FROM THE VARIOUS 16 PERSONS MADE ON ACCOUNT OF UNEXPLAINED C ASH CREDITS PARTICULARLY WHEN THE ASSESSEE FAILED TO DISCHARGE THE ONUS OF PROVING THE IDENTITY, CREDITWORTHINESS OF THE SO CALLED CRE DITORS AND GENUINENESS OF THE TRANSACTION BY NOT PRODUCING THE ALLEGED CREDITORS. 1(B) THAT THE CIT(APPEALS)-1, AGRA HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.2,00,000/- MADE ON ACCO UNT OF UNEXPLAINED RECEIPTS OF OLD LOAN FROM THE SO CALLED 10 PERSONS. 2. THAT THE APPELLANT CRAVES LEAVE TO ADD OR DELETE OR ALTER OR MODIFY ANY ONE OR MORE GROUND(S) OF APPEAL DURING T HE APPELLATE PROCEEDINGS. 3. THAT THE ORDER OF THE CIT(APPEALS)-1, AGRA BEING ERRONEOUS A IN LAW AND ON FACTS BE SET ASIDE AND THAT THE ORDER OF THE ASSESSING OFFICER BE RESTORED. 3. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS IN HIS CROSS OBJECTION :- ITA NO.328/AGR/2009& C.O. NO.42/AGR/2009 A.Y. 2006-07 3 1. BECAUSE THE GROUND NOS.1 TO 3 TAKEN BY THE INCO ME TAX DEPARTMENT ARE NOT SUSTAINABLE AS THERE WERE AMPLE EVIDENCES ON RECORD PRODUCED BY THE ASSESSEE IN SUPPORT OF CASH CREDITS IN THE STATEMENT OF AFFAIRS SHOWN BY THE ASSESSEE AND THE LEARNED CIT (APPEALS) WAS JUSTIFIED IN DELETING THE SAME. 2. BECAUSE THE LEARNED CIT(APPEALS) WAS NOT JUSTIFI ED IN BELIEVING THE REPORT OF GOVERNMENT VALUER WITH REGARD TO THE VALUATION OF SILVER AT RS.15,20,384/- IN PLACE OF VALUATION MADE BY THE SALES TAX DEPARTMENT ON THE BASIS OF THEIR VALUER AT RS.12,72 ,996/-. THE SILVER WAS ORIGINALLY SEIZED BY THE SALES TAX DEPARTMENT, WHICH WAS VALUED BY THEIR VALUER ON THE BASIS OF LAB TESTING REPORT OF SOME OF THE SILVER PIECES. THEIR VALUER CORRECTLY ASCERTAINED THE FIN ENESS CONTAINED IN THE SILVER PIECES FOUND IN THE SEARCH BY THE SALES TAX DEPARTMENT WHEREAS THE INCOME TAX VALUER DID NOT MAKE ANY TEST ING AND LAB REPORT OF ANY PIECE OF SILVER ITEM INSPITE OF REQUE STS MADE BY THE ASSESSEE BEFORE THE LEARNED ASSESSING OFFICER AND T HE LEARNED CIT(APPEAL). HE DID NOT GIVE ANY BASIS FOR THE CO NTENTS OF FINENESS OF SILVER ITEMS WITH REFERENCE TO ANY REFINERY OR LAB TESTING REPORT. THE VALUATION OF INCOME TAX DEPARTMENT IS WHOLLY UNRELI ABLE, BASED ON PURELY ESTIMATE WITHOUT REFERENCE TO THE ACTUAL SIL VER CONTENTS OR FINENESS CONTENTS OF THE SILVER SEIZED. THE VALUAT ION NOW CALCULATED AS PER DIRECTIONS OF THE LEARNED CIT(APPEALS) AT RS.14 ,56,961/- (IN PLACE OF RS.15,20,384 ORIGINALLY) THEREBY ADDITION OF RS. 1,83,975/- IS WHOLLY ILLEGAL UNJUSTIFIED, WITHOUT ANY BASIS AND IS AGAIN ST THE ACTUAL FACTS OF THE CASE AND THE VALUE OF SILVER CONTENTS. 4. AS REGARDS GROUND NO.1 OF THE REVENUE, THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE HAS DECLARED A LOAN TAKEN FROM HIS MOT HER SMT. SAVITRI DEVI AMOUNTING TO RS.2,60,000/- THROUGH ACCOUNT PAYEE CH EQUE. IT WAS SUBMITTED THAT SHE IS A REGULAR INCOME TAX ASSESSEE WHO HAS FILED HER RETURN FOR THE IMPUGNED YEAR ON 01.06.2006 AND ASSESSED AT PAN ABBPH 5717 H. SH E HAS ALSO MAINTAINED REGULAR BOOKS OF ACCOUNT. ON PERUSAL OF HER BOOKS OF ACCOUNT, IT WAS OBSERVED BY ITA NO.328/AGR/2009& C.O. NO.42/AGR/2009 A.Y. 2006-07 4 THE A.O. THAT SHE HAD DEPOSITED CASH AMOUNTING TO R S.2,60,000/- JUST BEFORE THE DATE OF GIVING THE LOAN TO THE ASSESSEE. SMT. SAVI TRI DEVI WAS REQUIRED TO BE PRODUCED BEFORE THE ASSESSING OFFICER WHICH FOR CER TAIN REASONS COULD NOT BE PRODUCED BUT THE REQUIRED DOCUMENTS WERE FILED BEFO RE THE A.O. THE A.O. WAS OF THE VIEW THAT THE ASSESSEE HAS NOT DISCHARGED HIS D UTY TO PRODUCE SMT. SAVITRI DEVI AND THEREFORE, COULD NOT PROVE GENUINENESS OF THE L OAN AND THE ASSESSEE HAS SHOWN FICTITIOUS LIABILITY IN THE SHAPE OF NEW LOAN AMOUN TING TO RS.2,60,000/- AND ACCORDINGLY ADDED THE SAME TO THE INCOME OF THE ASS ESSEE. THE LD. CIT(A), ON APPRECIATION OF FACTS THAT THE ASSESSEE HAD SHOWN T HE MATERIAL FOR AVAILABILITY OF CASH IN THE HAND OF THE CREDITOR WHICH HAS BEEN DEC LARED IN HER RETURN OF INCOME AND ACCORDINGLY DELETED THE ADDITION MADE BY THE A. O. VIDE PARAGRAPH NO.2.2 OF HIS ORDER. 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE FACTS OF THE CASE. THERE IS NO DISPUTE TO THE FACT THAT SMT. SAVITRI DEVI HA D DEPOSITED RS.2,60,000/- ONE DAY PRIOR TO GIVING OF LOAN TO THE ASSESSEE. AS REGARD S AVAILABILITY OF CASH FOR DEPOSITING INTO BANK ACCOUNT OF SMT. SAVITRI DEVI T HE ASSESSEE SUBMITTED THAT SMT. SAVITRI DEVI IS MAINTAINING REGULAR BOOKS OF ACCOUN T OF HER PROPRIETORSHIP CONCERN, COPIES OF WHICH ARE AVAILABLE ON RECORD AT PAGE NOS .31 TO 51 OF PAPER BOOK AND WAS AVAILABLE BEFORE BOTH THE AUTHORITIES BELOW. T HIS IS ALSO NOT IN DISPUTE THAT ITA NO.328/AGR/2009& C.O. NO.42/AGR/2009 A.Y. 2006-07 5 SMT. SAVITRI DEVI IS REGULARLY ASSESSED TO TAX AND HAS DECLARED THE SAID LOAN GIVEN TO THE ASSESSEE. NO ADVERSE MATERIAL HAS BEEN BROU GHT ON RECORD REGARDING THE TRANSACTION. IF THE CREDITOR IS NOT PRODUCED BY TH E ASSESSEE, THEN THE TRANSACTION CANNOT BE TREATED AS FALSE AND CANNOT BECOME UNEXPL AINED CASH CREDIT IN THE HANDS OF THE ASSESSEE. THEREFORE, THE A.O. IS NOT JUSTIF IED IN MAKING THE ADDITION ON THIS ACCOUNT AND WE FIND NO INFIRMITY IN THE ORDER OF TH E LD. CIT(A) WHO HAS RIGHTLY DELETED THE ADDITION MADE BY THE A.O. THUS, GROUND NO.1 OF THE REVENUE IS DISMISSED. 6. AS REGARDS GROUND NO.1(A) OF THE REVENUE, THE AS SESSEE HAS RAISED LOANS AMOUNTING TO RS.3,06,000/- FROM VARIOUS PERSONS WHI CH ARE RANGING BETWEEN RS.18,000/- TO RS.19,500/-. DURING THE COURSE OF A SSESSMENT PROCEEDINGS, THE STATEMENTS OF FEW PERSONS WERE RECORDED WHO HAD CON FIRMED OF GIVING THE LOANS TO THE ASSESSEE. WITH REGARD TO OTHERS, THE ASSESSEE HAD FILED AFFIDAVITS, KISAN BAHI, KHASRA & KHATAUNI WHEREVER AVAILABLE TO JUSTIFY THE AVAILABILITY OF LAND WITH THE PERSONS WHO HAD GIVEN LOANS TO THE ASSESSEE. THE A .O. WAS NOT SATISFIED WITH THE EXPLANATION GIVEN BY THE ASSESSEE AND TREATED THE S AID AMOUNT AS INCOME OF THE ASSESSEE. THE LD. CIT(A) DELETED THE SAME AFTER AP PRECIATING THE EXPLANATION GIVEN BY THE ASSESSEE. ITA NO.328/AGR/2009& C.O. NO.42/AGR/2009 A.Y. 2006-07 6 7. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE FACTS OF THE CASE. THE ASSESSEE HAS PRODUCED FEW PERSONS WHOSE STATEMENTS HAVE BEEN RECORDED AND WHO HAVE CONFIRMED TO HAVE GIVEN LOANS TO THE ASSESSEE. FOR THE PERSONS WHOSE STATEMENTS HAVE BEEN RECORDED AND OTHERS, THE ASSES SEE HAD SUBMITTED THAT EVERY LOAN GIVER IS OWNING LAND, DETAILS OF WHICH ARE AVA ILABLE AT THE CHART PREPARED AT PAPER BOOK PAGES NOS.57 & 58 AND FROM PAGE NOS.59 T O 100. MOREOVER, THE ASSESSEE HAD WRITTEN LETTER DATED 19.11.2007 TO THE A.O. TO ENFORCE THE PRESENCE OF THE LOAN GIVERS UNDER SECTION 131 OF THE ACT. THE SAID LETTER IS AVAILABLE AT PAGE NOS.52 & 53 OF THE PAPER BOOK. THE A.O. HAS NEVER BOTHERED TO ISSUE SUMMONS U/S. 131 OF THE ACT TO THE SAID PERSONS. THERE IS NO DISPUTE TO THE FACT THAT EVERY LOAN GIVER IS HAVING AGRICULTURAL LAND AND THERE IS NOTHING ADVERSE ON RECORD THAT THEY HAVE DENIED OF HAVING GIVEN THE LOANS INSPITE OF THE FACT THAT THE AFFIDAVITS OF EACH AND EVERY PERSONS CONFIRMING OF GIVING THE LOA NS ALONG WITH KISAN BAHI ETC. WHICH HAVE NOT BEEN PROVED TO BE FALSE BY THE A.O. ARE ON RECORD. IN SUCH CIRCUMSTANCES, AND FACTS OF THE CASE, THE LD. CIT(A ) HAS RIGHTLY DELETED THE ADDITION MADE BY THE A.O. AND WE FIND NO ERROR IN HIS ORDER . THUS, GROUND NO.1(A) OF THE REVENUE IS DISMISSED. 8. AS REGARDS GROUND NO.1(B) OF THE REVENUE, THE AS SESSEE HAD DECLARED THE LOANS OF RS.2,00,000 FROM DIFFERENT PERSONS WHICH W ERE RAISED IN THE PRECEDING ITA NO.328/AGR/2009& C.O. NO.42/AGR/2009 A.Y. 2006-07 7 YEARS. THE A.O. WAS NOT SATISFIED WITH THE EXPLANA TION OF THOSE PERSONS WHO WERE PRODUCED IN PERSON AND STATEMENTS WERE RECORDED. T HEIR AFFIDAVITS WERE FILED CONFIRMING THE LOANS AND THE A.O. ACCORDINGLY TREAT ED THE SAID AMOUNT OF RS.2,00,000/- AS INCOME OF THE ASSESSEE. THE LD. C IT(A) DELETED THE SAME AFTER SATISFYING WITH THE EXPLANATION GIVEN BY THE ASSESS EE. 9. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE FACTS OF THE CASE. AS PER THE CHART GIVEN BY THE LD. COUNSEL FOR THE ASSE SSEE SHRI K.C. AGARWAL AT PAGE NOS.104 & 105 OF THE PAPER BOOK WHERE THERE IS NO D ISPUTE TO THE FACT THAT ALL THE LOANS HAD BEEN TAKEN IN MAY 2002 RELEVANT TO ASSESS MENT YEAR 2003-04 WHICH HAVE BEEN REPAID DURING THE YEAR. THE ASSESSEE HAS FILED THE AFFIDAVITS OF EACH AND EVERY PERSON WHO HAS CONFIRMED THE TRANSACTION AND ALSO PRODUCED EACH AND EVERY CREDITOR IN PERSON, WHO HAS CONFIRMED OF THE TRANSA CTION EXCEPT ONE SHRI AKHILESH KUMAR WHO COULD NOT BE PRODUCED. IN SUCH CIRCUMSTA NCES AND FACTS OF THE CASE WE FIND NO ADVERSE MATERIAL AGAINST THE ASSESSEE AND A LL THE LOANS BEING OLD THEREFORE, THIS ADDITION CANNOT BE SUBJECT MATTER OF CASH CRED IT UNDER SECTION 68 OF THE ACT AND NO ADDITION IS CALLED FOR BY THE A.O. WE FIND NO E RROR IN THE ORDER OF THE LD CIT(A) WHO HAS RIGHTLY DELETED THE ADDITION MADE BY THE A. O. THUS, GROUND NO.1(B) OF THE REVENUE IS DISMISSED. ITA NO.328/AGR/2009& C.O. NO.42/AGR/2009 A.Y. 2006-07 8 10. GROUND NOS.2 & 3 OF THE REVENUE ARE GENERAL IN NATURE, THEREFORE, DO NOT REQUIRE ANY ADJUDICATION. 11. IN THE CROSS OBJECTION FILED BY THE ASSESSEE, T HE BRIEF FACTS EMERGING OUT OF ASSESSING OFFICERS ORDER AT PAGE NO.5 ARE MAINLY O N ACCOUNT OF VALUATION OF THE SILVER STOCK WHICH ACCORDING TO THE ASSESSEE SHOULD HAVE AS PER VALUATION MADE BY THE SALES TAX DEPARTMENT A PURITY OF 90.62% WHEREAS THE A.O. OF HIS OWN HAS TAKEN THE VALUATION WITH A DIFFERENCE OF RS.1,83,97 5/- WHICH WAS ADDED TO THE INCOME OF THE ASSESSEE. THE LD. CIT(A) CONFIRMED T HE ACTION OF THE A.O. 12. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE FACTS OF THE CASE. SHRI K.C. AGARWAL, ADVOCATE, THE LD. COUNSEL FOR THE ASS ESSEE INVITED OUR ATTENTION TO PAGE NOS.16 & 17 OF THE PAPER BOOK BEING THE ORDER OF THE SALES TAX DEPARTMENT AND THE VALUATION BY THE SALES TAX DEPARTMENT WHERE THE PURITY AT 90.62% HAS BEEN TAKEN. WE FIND THAT THE A.O. DOES NOT HAVE AN Y BASIS FOR MAKING THE VALUATION OTHERWISE. IN SUCH FACTS AND CIRCUMSTANC ES OF THE CASE, THE CLAIM OF THE ASSESSEE HAS TO BE ALLOWED. THE A.O. IS DIRECTED A CCORDINGLY. THUS, GROUND NO.1 & 2 OF THE CROSS OBJECTION OF THE ASSESSEE ARE ALLO WED. ITA NO.328/AGR/2009& C.O. NO.42/AGR/2009 A.Y. 2006-07 9 13. IN THE RESULT, APPEAL OF THE REVENUE IN ITA NO. 328/AGR/2009 IS DISMISSED AND C.O. BEARING NO.42/AGR/2009 OF THE ASSESSEE IS ALLOWED. (ORDER PRONOUNCED IN THE OPEN COURT ON 22 ND NOVEMBER, 2011) SD/- SD/- (H.S. SIDHU) (B.P. JAIN) JUDICIAL MEMBER ACCOUNTANT MEMBER DATE: 22 ND NOVEMBER, 2011 PBN/* COPY OF THE ORDER FORWARDED TO: APPELLANT/RESPONDENT/CIT CONCERNED/CIT(APPEALS) CO NCERNED/D.R., ITAT, AGRA BENCH, AGRA/GUARD FILE. BY ORDER ASSISTANT REGISTRAR INCOME-TAX APPELLATE TRIBUNAL, AGRA TRUE COPY