Sh. Gopal Das Gupta, Morena V. I.T.O.-2(2), Gwalior

ITA 33/AGR/2013

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 0356 (ITAT-AGRA)
• Duration Of Justice: 1 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-02-2013
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2000-2001
• Appeal Filed On: 28-01-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: KK MISHRA
• Assessee Lawyers: NAVIN GARGH
• Keywords: Reopening of assessment; Gift; Income from undisclosed sources; Period of limitation; Question of law; Difference of opinion; Competent authority
• Section: 143(3); 131; 68; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, AGRA (SMC) BENCH, AGRA BEFORE : SHRI BHAVNESH SAINI, JUDICIAL MEMBER ITA NO. 33/AGRA/2013 ASSTT. YEAR : 2000-01 SH. GOPAL DAS GUPTA, VS. INCOME-TAX OFFICER, PROP. M/S. PHARMA TRADERS, 2(2), GWALIOR. SAHKARI MARKET, MORENA (MP). (PAN : ACOPG 5192 R) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI NAVIN GARGH, ADVOCATE RESPONDENT BY : SHRI K.K. MISHRA, JR. D.R. DATE OF HEARING : 25.02.2013 DATE OF PRONOUNCEMENT OF ORDER : 28.02.2013 ORDER THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF THE LD. CIT(A), GWALIOR DATED 05.11.2012 FOR THE ASSESSMENT YEAR 20 00-01. THIS APPEAL IS FILED CHALLENGING THE REOPENING OF ASSESSMENT U/S. 147/14 8 OF THE IT ACT AND ADDITION OF RS.2,00,000/- ON ACCOUNT OF UNEXPLAINED GIFT MADE B Y SHRI GOPAL CHANDRA GUPTA. 2. BRIEFLY, THE FACTS OF THE CASE ARE THAT THE ASSE SSEE FILED RETURN OF INCOME ON 30.10.2000 DECLARING INCOME OF RS.1,18,500/- FROM W HOLESALE IN MEDICINES. IN THIS CASE, THE NOTICE U/S. 148 WAS ISSUED AND SERVED ON 27.09.2006 AFTER TAKING DUE APPROVAL FROM THE COMPETENT AUTHORITY. THE AO MADE ADDITION OF RS.2,00,000/- ON ITA NO. 33/AGRA/2013 2 ACCOUNT OF UNEXPLAINED GIFT. THE AO FOUND THAT THE ASSESSEE FILED COPY OF BANK ACCOUNT OF DONOR SHRI GOPAL CHANDRA GUPTA AND THE A SSESSEE STATED THAT HE HAS RECEIVED GIFT OF RS.2,00,000/- FROM HIS UNCLE ON 29 .03.2000 BY CHEQUES. IT WAS STATED THAT THE DONOR HAS SOLD HIS HOUSE PROPERTY F OR RS.4,50,000/-, OUT OF WHICH GIFT WAS MADE. COPY OF THE SALE DEED WAS ALSO FILED TO SHOW SALE OF PROPERTY MADE ON 25.08.1999 (ACCORDING TO THE LD. COUNSEL FOR ASS ESSEE IT IS 05.08.1999). IT WAS SEEN FROM THE BANK ACCOUNT OF THE DONOR THAT ON 22. 08.1999, AN AMOUNT OF RS.3,00,000/- WAS CREDITED IN CASH AND ON 01.09.199 9 AND THERE WAS TRANSFER ENTRY DEBITING RS.3,00,000/- LEAVING BALANCE OF RS.500/- ONLY. ON 29.03.2000, AN AMOUNT OF RS.2,00,000/- WAS CREDITED IN CASH AND ON THE SA ME DAY, CHEQUE OF RS.2,00,000/- WAS DEBITED. BEFORE ISSUE OF CHEQUES OF THE GIFT, T HERE WAS A CREDIT BALANCE OF RS.1638/- ONLY IN THE ACCOUNT OF THE DONOR. ACCORD ING TO THE ASSESSEE, THE SALE PROCEEDS OF RS.3,00,000/- HAVE BEEN CREDITED IN THE ACCOUNT OF THE DONOR ON 22.08.1999 AND BALANCE OF RS.1,50,000/- HAS BEEN CR EDITED IN THE BANK ACCOUNT OF DONOR ON 29.03.2000 AND CHEQUES OF GIFT WAS ISSUED IN FAVOUR OF THE ASSESSEE OF RS.2,00,000/-. THE AO DID NOT FIND THE REPLY OF ASS ESSEE CONVINCING BECAUSE RS.3,00,000/- DEPOSITED ON 22.08.1999 HAS BEEN WITH DRAWN ON 01.09.1999. THE SALE OF PLOT IS STATED TO BE MADE IN AUGUST, 1999, BUT IT WAS NOT RELIABLE THAT AFTER ABOUT EIGHT MONTHS ON 29.03.2000, THE AMOUNT OF RS. 2,00,000/- HAS BEEN CREDITED IN THE BANK ACCOUNT OF THE DONOR OUT OF THE SAME SA LE OF PROPERTY. THEREFORE, IT WAS ITA NO. 33/AGRA/2013 3 HELD BY THE AO THAT THE SAID GIFT OUT OF THE SALE P ROCEEDS OF LAND CANNOT BE MADE. MOREOVER, NO OCCASION OF GIFT HAS BEEN PROVED. THE ASSESSEE WAS DIRECTED TO PRODUCE THE DONOR FOR VERIFICATION OF GENUINENESS O F THE GIFT, BUT THE DONOR WAS NOT PRODUCED BEFORE THE AO FOR EXAMINATION. THE AO, THE REFORE, HELD THAT IDENTITY, GENUINENESS OF THE TRANSACTION AND CREDITWORTHINESS OF THE DONOR HAVE NOT BEEN PROVED AND ADDITION OF RS.2,00,000/- WAS, ACCORDING LY, MADE. 3. THE ASSESSEE CHALLENGED REOPENING OF ASSESSMENT AS WELL AS ADDITION ON MERIT BEFORE THE LD. CIT(A). THE LD. CIT(A), CONSID ERING THE MATERIAL ON RECORD, FOUND THAT THE ASSESSEE FAILED TO PROVE THE CAPACIT Y OF THE DONOR TO GIVE GIFT AND SOURCE OF THE FUNDS HAVE NOT BEEN SATISFACTORILY EX PLAINED. FURTHER THE DONOR WAS NOT PRODUCED FOR EXAMINATION BEFORE THE AO TO PROVE THE GENUINENESS OF THE GIFT IN THE MATTER. RE-OPENING OF ASSESSMENT WAS HELD TO BE JUSTIFIED BECAUSE IN THIS CASE, NO 143(3) ORDER HAS BEEN MADE PRIOR TO REOPENING OF ASSESSMENT AND REOPENING OF ASSESSMENT HAS BEEN MADE WITHIN SIX YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR. THEREFORE, REOPENING OF ASSESSMENT WAS HELD T O BE JUSTIFIED IN THE MATTER. 4. THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW AND REFERRED TO THE AFFIDAVIT OF THE DONOR (PB-2) AND COPY OF BANK ACCOUNT OF DONOR (PB-3) AND ALSO RELIED UPON T HE FOLLOWING DECISIONS : ITA NO. 33/AGRA/2013 4 (I). ORDER OF ITAT, AGRA BENCH IN THE CASE OF SUBH ASH DAL MILL VS. ACIT, 257 ITR (AT) 115, IN WHICH IT WAS HELD THAT C ERTAIN CASH DEPOSIT IN THE BANK ACCOUNT OF THE CREDITOR WILL NOT MAKE THE LOAN OBTA INED BY THE ASSESSEE AS NON- GENUINE. (II). DECISION OF HONBLE SUPREME COURT IN THE CAS E OF MEHTA PARIKH AND CO. VS. CIT, 30 ITR 181, IN WHICH IT WAS HELD THAT THE PERSONS WHO GAVE THE AFFIDAVIT WERE NOT CROSS-EXAMINED. IT WAS NOT OPEN TO THE REVENUE TO CHALLENGE THE CORRECTNESS OF THE CASH BOOK ENTRIES OR THE STATEME NTS MADE IN THE AFFIDAVITS. (III). ORDER OF ITAT, JAIPUR BENCH IN THE CASE OF SMT. SAROJ SIRSELEWALA VS. CIT, 46 TTJ 24, IN WHICH IT WAS HELD THAT TIME GAP IN RECEIVING THE GIFT AND DEPOSITING IN FIRMS ACCOUNT NOT SUFFICIENT TO HOLD THE CASH CREDIT NON-GENUINE. (IV). JUDGMENT OF KARNATAKA HIGH COURT IN THE CASE OF S.R. VENKATA RATNAM VS. CIT, 127 ITR 807, IN WHICH THE MATTER WA S SET ASIDE TO THE ITO WITH LIBERTY TO THE ASSESSEE TO SUBSTANTIATE HIS ASSERTI ON TO THE SOURCE OF RS.15,000/-. ITA NO. 33/AGRA/2013 5 5. ON THE OTHER HAND, THE LD. DR RELIED UPON THE OR DERS OF THE AUTHORITIES BELOW AND THE DECISION IN THE CASE OF JASPAL SINGH VS. CI T 290 ITR 306. 6. I HAVE CONSIDERED THE RIVAL SUBMISSIONS AND THE MATERIAL ON RECORD. IT IS NOT IN DISPUTE THAT THE ASSESSEE HAS CREDITED SUM OF RS .2,00,000/- IN HIS ACCOUNT ON 29.03.2000, WHICH WAS STATED TO BE RECEIVED AS GIFT FROM HIS UNCLE SHRI GOPAL CHANDRA GUPTA. THE ASSESSEE EXPLAINED THAT GIFT WAS GIVEN OUT OF THE SALE PROCEEDS OF HOUSE PROPERTY FOR RS.4,50,000/-. ACCORDING TO T HE LD. COUNSEL FOR THE ASSESSEE, THE PROPERTY WAS SOLD BY THE DONOR ON 05.08.1999, W HICH IS WRONGLY NOTED IN THE IMPUGNED ORDER AS 25.08.1999. THE SALE PROCEEDS OF RS.4,50,000/- HAVE NOT BEEN EXACTLY DEPOSITED FOR THE SAME AMOUNT IN THE BANK A CCOUNT OF THE DONOR. FROM THE BANK ACCOUNT OF THE DONOR, IT WAS FOUND THAT ON 22. 08.1999, RS.3,00,000/- WAS CREDITED IN CASH IN HIS ACCOUNT, WHICH WAS IMMEDIAT ELY TRANSFERRED BY DEBIT ENTRY ON THE NEXT DAY ON 01.09.1999 LEAVING THE BALANCE I N HIS ACCOUNT OF RS.500/- ONLY. THEREAFTER, THERE IS PETTY DEPOSIT IN HIS ACCOUNT A ND AFTER DEPOSITING CASH OF RS.1,000/- FURTHER ON 25.03.2000, THE CREDIT BALANC E IN THE ACCOUNT OF THE DONOR REMAINED AT RS.1638/- ONLY. ON 29.03.2000 ITSELF, T HE CASH OF RS.2,00,000/- HAS BEEN DEPOSITED IN THE ACCOUNT OF THE DONOR AND ON T HE SAME DAY A CHEQUE OF RS.2,00,000/- HAS BEEN ISSUED IN FAVOUR OF THE ASSE SSEE AS A GIFT. THE ASSESSEE TRIED TO EXPLAIN THAT THE DEPOSIT OF RS.2,00,000/- AS CAS H IN THE ACCOUNT OF THE DONOR OF ITA NO. 33/AGRA/2013 6 THE EQUIVALENT AMOUNT GIVEN AS GIFT WAS DEPOSITED O UT THE BALANCE SALE PROCEEDS OF RS.1,50,000/- AND OTHER AMOUNT AVAILABLE WITH THE D ONOR FOR WHICH NO EVIDENCE HAS BEEN GIVEN. THE AO HAS CORRECTLY NOTED IN THE ASSES SMENT ORDER THAT THE CONTENTION OF THE ASSESSEE CANNOT BE RELIED UPON BECAUSE THERE WAS A GAP OF ABOUT EIGHT MONTHS IN THE SALE PROCEEDS AVAILABLE WITH THE DONO R AND DEPOSITS MADE IN THE ACCOUNT OF THE DONOR. THE DONOR HAS NOT GIVEN ANY S ATISFACTORY EXPLANATION WHY RS.1,50,000/- WAS KEPT BY HIM FOR ABOUT 8 MONTHS AN D WHY PURPOSELY, RS.2,00,000/- HAS BEEN DEPOSITED IN HIS ACCOUNT OF THE EXACT AMOUNT FOR WHICH GIFT WAS GIVEN TO THE ASSESSEE. NO SOURCE OF ACCUMULATIO N OF FUND WAS FILED BEFORE THE AUTHORITIES BELOW. THEREFORE, THE SAID GIFT CANNOT BE OUT OF SALE PROCEEDS OF THE PLOT OF LAND. THUS, THE ASSESSEE FAILED TO EXPLAIN THE SOURCE OF DEPOSIT OF RS.2,00,000/- IN THE BANK ACCOUNT OF THE DONOR OF THE EQUIVALENT AMOUNT FOR GIVING GIFT ON THE SAME DAY TO THE ASSESSEE. PRIOR TO THAT, THERE WAS MEAGER CASH BALANCE OF RS.1638/- IN THE ACCOUNT OF DONOR ON THE DATE OF GIVING GIFT TO THE ASSESSEE. ITAT, AGRA BENCH IN THE CASE OF SMT. SUMAN GUPTA VS. ITO VIDE ORDER DATED 16.03.2012 REPORTED IN 138 ITD 153 HELD IN PARA 9 TO 13 AS UND ER IN WHICH IN THE SIMILAR CIRCUMSTANCES, THE GENUINENESS OF THE CASH CREDIT W AS HELD TO BE BOGUS BECAUSE CASH OF THE EQUIVALENT AMOUNT WAS DEPOSITED IN THE ACCOUNT OF THE CREDITOR AT THE TIME OF GIVING LOAN TO THE ASSESSEE : 9. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND T HE MATERIAL AVAILABLE ON RECORD. IT IS NOT IN DISPUTE THAT THERE WERE CASH ITA NO. 33/AGRA/2013 7 DEPOSITS OF THE EQUIVALENT AMOUNTS IN THE BANK ACCO UNTS OF THE CREDITORS JUST BEFORE ADVANCING LOAN TO THE ASSESSE E OR ON THE DATE OF ISSUING CHEQUES TO THE ASSESSEE. IN THE CASE OF THE CREDITOR, SHRI RAMPAL SINGH, HIS BANK STATEMENT IS FILED AT PAGE 4 5 OF THE PAPER BOOK, IN WHICH RS.2,50,000/- HAS BEEN DEPOSITED, BU T NEITHER IT IS MENTIONED THAT IT WAS CASH NOR IT IS MENTIONED HOW THE AMOUNT SIMILAR TO THE CREDIT WAS CREDITED IN HIS BANK ACCOUNT. NO EXPLANATION IS GIVEN BEFORE THE AUTHORITIES BELOW AND EVEN DURING THE CO URSE OF ARGUMENTS BEFORE US. NOTHING IS CLARIFIED AS TO HOW EQUIVALEN T AMOUNT OF CASH CREDIT WAS DEPOSITED IN HIS BANK ACCOUNT. IN THE CA SE OF REMAINING CREDITORS, IT IS NOT A DENYING FACT THAT EQUIVALENT AMOUNTS OF CASH CREDIT WAS DEPOSITED IN THEIR BANK ACCOUNTS IN CASH FOR ISSUING CHEQUES IN FAVOUR OF THE ASSESSEE. THIS CREATED SERIOUS DOU BT IN THE EXPLANATION OF THE ASSESSEE REGARDING GENUINENESS OF THE TRANSA CTION IN THE MATTER. THE AO ASKED THE ASSESSEE TO PRODUCE ALL THE CREDIT ORS FOR EXAMINATION ON OATH IN ORDER TO FIND OUT TRUTH IN T HE MATTER. THE ASSESSEE PRODUCED ONE OF THE CREDITORS BEFORE THE A O FOR EXAMINATION, BUT SHOWED HIS INABILITY TO PRODUCE OTHER CREDITORS , WHICH IS ALSO CLEAR FROM THE ORDER SHEET DATED 18.12.2007 (PB-126). PRI OR TO THAT, THE ASSESSEE SOUGHT TIME FROM THE AO TO PRODUCE REMAINI NG CREDITORS FOR EXAMINATION, BUT LATER ON DID NOT PRODUCE THEM. THE LD. COUNSEL FOR THE ASSESSEE EXPLAINED THAT DUE TO ONE OR OTHER PRO BLEM OF THE REMAINING CREDITORS ON ACCOUNT OF MEDICAL ADVICE, T HE DEPOSITORS HAVE SHOWN THEIR INABILITY TO APPEAR BEFORE THE AO FOR E XAMINATION, BUT IT IS ADMITTED FACT THAT THE ASSESSEE DID NOT MAKE ANY REQUEST BEFORE THE AO FOR EXAMINATION OF THE REMAINING CREDITORS THROU GH THE COMMISSION AND NO WILLINGNESS WAS SHOWN BEFORE THE CIT(A) FOR PRODUCTION OF THE REMAINING CREDITORS FOR EXAMINATI ON EVEN AT THE REMAND STAGE IN THE APPELLATE PROCEEDINGS. EVEN DUR ING THE COURSE OF ARGUMENTS BEFORE THE TRIBUNAL, THE LD. COUNSEL FOR THE ASSESSEE DID NOT SHOW HIS WILLINGNESS TO PRODUCE REMAINING CREDITORS FOR EXAMINATION BEFORE THE AO. IT IS, THEREFORE, CLEAR THAT THE ASS ESSEE HAS FAILED TO PRODUCE THE REMAINING CREDITORS FOR EXAMINATION BY THE REVENUE DEPARTMENT IN ORDER TO FIND OUT TRUTH IN THE MATTER . 9.1 THE AO DISCUSSED EACH AND EVERY CREDITOR IN THE ASSESSMENT ORDER AND THE CRUX OF THE FINDINGS OF THE AO HAD BE EN THAT THERE WERE VERY SMALL BANK BALANCES IN THE BANK ACCOUNTS OF TH E CREDITORS AND THEY WERE HAVING MEAGER INCOME AND AS SUCH, THEY WE RE NOT MEN OF MEANS TO ADVANCE ANY LOAN TO THE ASSESSEE. IN THE C ASE OF ABHAY ITA NO. 33/AGRA/2013 8 MAHESHWARI, THERE WAS VERY SMALL BALANCE OF RS.3528 /- IN HIS BANK ACCOUNT. HE WAS EXAMINED ON OATH AND HE WAS NOT ABL E TO GIVE SOURCE OF CASH DEPOSIT TO THE SATISFACTION OF THE AO. HE W AS EARNING HARDLY ONE LAC RUPEES AND SPENT 40,000/- TO 50,000/- FOR H OUSEHOLD PURPOSES. DURING HIS EXAMINATION ON OATH, HE WAS NOT ABLE TO SATISFACTORILY EXPLAIN THE AVAILABILITY OF FUNDS WITH HIM FOR GIVI NG LOAN TO THE ASSESSEE. IN HIS CASE, HE HAS FILED RETURN OF INCOM E FOR THE ASSESSMENT YEAR UNDER APPEAL AT RS.1,02,850/- (PB-60). IN THE CASE OF SHRI AMIT MAHESHWARI, HE WAS ALSO HAVING SMALL BANK BALANCE O F RS.2429/- BEFORE ISSUE OF CHEQUE TO THE ASSESSEE AND EQUAL AM OUNT OF THE CASH CREDIT WAS DEPOSITED IN THE BANK ACCOUNT. HE HAS FI LED RETURN OF INCOME FOR THE ASSESSMENT YEAR UNDER APPEAL AT RS.4 4972/- (PB-71). IN THE CASE OF SMT. KEERTI MAHESHWARI, IN HER BANK ACCOUNT, THERE WAS BALANCE OF RS.4688/- ONLY PRIOR TO ISSUE OF CHEQUE TO THE ASSESSEE AND EQUIVALENT AMOUNT OF CASH CREDIT WAS DEPOSITED FOR THE PURPOSE OF ISSUE OF CHEQUE IN FAVOUR OF THE ASSESSEE. FOR THE ASSESSMENT YEAR UNDER APPEAL, SHE HAS FILED RETURN OF INCOME AT RS. 1,01,000/- ONLY. IN THE CASE OF SMT. MITHLESH MAHESHWARI, THE BANK BALA NCE BEFORE ISSUE OF CHEQUE WAS RS.10,794/- AND EQUIVALENT AMOUNT OF CASH CREDIT WAS DEPOSITED IN HER BANK ACCOUNT FOR ISSUE OF CHEQUE I N FAVOUR OF ASSESSEE. FOR ASSESSMENT YEAR UNDER APPEAL, SHE FIL ED RETURN OF INCOME AT RS.1,02,476/- ONLY. IN THE CASE OF SH. RAMPAL SI NG, IT IS ALREADY NOTED ABOVE THAT THE DEPOSIT ENTRY IN HIS CASE IS N OT EXPLAINED AND PRIOR TO ISSUE OF CHEQUE, THERE WAS BANK BALANCE OF RS.3708/- ONLY. HE HAS FILED THE RETURN OF INCOME FOR THE ASSESSMENT Y EAR UNDER APPEAL AT LOSS WITH AGRICULTURAL INCOME (PB-102). IN THE CASE OF SHRI SHARIQ ALI KHAN, THE BANK BALANCE IS HIS ACCOUNT WAS RS.1055/- PRIOR TO ISSUE OF CHEQUE AND EQUIVALENT CASH AMOUNT WAS DEPOSITED FOR ISSUING CHEQUE IN FAVOUR OF THE ASSESSEE. HE HAS FILED RETURN OF I NCOME AT RS.70,373/- PLUS AGRICULTURAL INCOME (PB-116). THESE DETAILS NO TED IN THE ASSESSMENT ORDER AND THE DETAILS VERIFIED FROM THE PAPER BOOK WOULD CLEARLY SUPPORT THE FINDINGS OF THE AO THAT NONE OF THE CREDITORS WERE PERSONS OF SUFFICIENT MEANS TO ADVANCE ANY LOAN TO THE ASSESSEE. FILING OF BALANCE SHEETS, CASH FLOW STATEMENTS, CASH BOOKS ETC. HAVE NO EVIDENTIARY VALUE BECAUSE ACCORDING TO THE REMAND R EPORT FILED BY THE AO, THOSE DOCUMENTS WERE NOT FILED WITH THE RETURN OF INCOME. MOREOVER, NO REGULAR BOOKS OF ACCOUNT HAVE BEEN MAI NTAINED BY ANY OF THE CREDITORS AND MAJORITY OF THEM HAVE SHOWN ES TIMATED INCOME IN THEIR RETURNS OF INCOME. THEREFORE, SUCH BALANCE SH EET, CASH FLOW STATEMENTS ETC. WOULD NOT SUPPORT THE CONTENTION OF THE ASSESSEE THAT ITA NO. 33/AGRA/2013 9 GENUINE CREDITS HAVE BEEN RECEIVED. THE ORDER SHEET NOTED BY THE AO WOULD ALSO SHOW THAT THE ASSESSEE HAS MADE NO EFFOR TS TO PRODUCE THE REMAINING CREDITORS BEFORE THE AO. EVEN IN THE STAT EMENT OF ONE OF THE CREDITORS RECORDED BY THE AO, SHRI AMBHAY MAHESHWAR I, HE WAS NOT ABLE TO EXPLAIN HIS SOURCE OF DEPOSIT OR ADVANCING LOAN TO THE ASSESSEE THROUGH GENUINE SOURCE. IT IS WELL SETTLED LAW THAT BURDEN IS UPON THE ASSESSEE TO PROVE INGREDIENTS OF SECTION 68 OF THE ACT BY PROVING IDENTITY AND CREDITWORTHINESS OF THE CREDITORS AND GENUINENESS OF THE TRANSACTIONS. THE ASSESSEE HAS, HOWEVER, FAILED TO PROVE THE CREDITWORTHINESS OF THE CREDITORS WHO WERE HAVING O NLY MEAGER INCOME. NO DETAILS OF THEIR SAVINGS HAVE BEEN FILED . THE ASSESSEE HAS NEVER SHOWN HIS WILLINGNESS TO PRODUCE THE REMAININ G CREDITORS FOR EXAMINATION BEFORE THE AO. THEREFORE, THE GENUINENE SS OF THE TRANSACTION COULD NOT HAVE BEEN EXAMINED BY THE AO. THE SMALLNESS OF THE BANK BALANCE IN THE BANK ACCOUNTS OF THE CRE DITORS PRIOR TO ISSUE OF CHEQUES WOULD CLEARLY REVEAL THAT THEY WERE NOT HAVING ANY SOURCE AND IT WAS THE MONEY OF THE ASSESSEE WHICH WAS ROUT ED THROUGH THE BANK ACCOUNTS OF THE CREDITORS FOR THE PURPOSE OF G IVING CREDITS TO THE ASSESSEE. THESE WERE, THEREFORE, ACCOMMODATION ENTR IES ONLY AND AS SUCH, COULD NOT BE CONSIDERED AS GENUINE TRANSACTIO NS. MERELY BECAUSE THE LOANS HAVE BEEN RECEIVED THROUGH BANKING CHANNE L, IS NOT SACROSANCT TO MAKE A NON-GENUINE TRANSACTION AS GEN UINE TRANSACTION. 10. HONBLE CALCUTTA HIGH COURT IN THE CASE OF BHAR ATI PVT. LTD. VS. CIT, 111 ITR 951 HELD AS UNDER : IN THE COURSE OF ASSESSMENT PROCEEDINGS, THE INCOM E-TAX OFFICER FOUND THAT THE ASSESSEE HAD SHOWN RS.20,000 AS LOAN IN ITS BOOKS TAKEN FROM TWO PARTIES. THE ASSESSEE PRODUCED THE ALLEGED CONFIRMATORY LETTERS FROM THOSE PARTIES BEFORE THE INCOME-TAX OFFICER IN SUPPORT OF THE TWO LOANS. THE INCOME-TAX OFFICER SERVED NOTICES UNDER SECTION 131 OF THE INCOME TAX ACT, 1961, ON THE ALLEGED CREDITORS AND SINCE THOSE NOTICES CAME BACK UNSERVE D, THE INCOME-TAX OFFICER TREATED THE LOAN AS ASSESSEES INCOME FROM UNDISCLOSED SOURCES. THE APPELLATE ASSISTANT COMMISSIONER DISMI SSED THE ASSESSEES APPEAL ON THE GROUND THAT THE ASSESSEE C OULD NOT EVEN ESTABLISH THE IDENTITY OF THE PARTIES. ON FURTHER A PPEAL BY THE ASSESSEE, THE APPELLATE TRIBUNAL HELD THAT MERE FILING OF CON FIRMATORY LETTERS DID NOT DISCHARGE THE ONUS THAT LAY ON THE ASSESSEE AND THERE WAS NO MATERIAL ON THE RECORD TO ESTABLISH THE IDENTITY OF THE CREDITORS: ITA NO. 33/AGRA/2013 10 HELD, THAT THE TRIBUNAL HAD TAKEN ALL THE RELEVANT FACTS INTO CONSIDERATION AND THE CONCLUSION ARRIVED AT BY THE TRIBUNAL THAT THE LOANS REPRESENTED THE ASSESSEES INCOME FROM UNDISC LOSED SOURCES WAS NOT PERVERSE OR UNREASONABLE. 10.1 THE HONBLE CALCUTTA HIGH COURT IN THE CASE OF CIT VS UNITED COMMERCIAL AND INDUSTRIAL CO. (P) LTD., 187 ITR 596 HELD AS UNDER: THE PRIMARY ONUS LIES ON THE ASSESSEE TO PROVE THE NATURE AND SOURCE OF CREDITS IN ITS ACCOUNT. IT IS NECESSARY F OR THE ASSESSEE TO PROVE PRIMA FACIE THE IDENTITY OF HIS CREDITORS, TH E CAPACITY OF SUCH CREDITORS TO ADVANCE THE MONEY AND LASTLY THE GENUI NENESS OF THE TRANSACTIONS. ONLY WHEN THESE THINGS ARE PROVED BY THE ASSESSEE PRIMA FACIE AND ONLY AFTER THE ASSESSEE HAS ADDUCED EVIDENCE TO ESTABLISH THE AFORESAID FACTS DOES THE ONUS SHIFT O N TO THE DEPARTMENT. IT IS NOT ENOUGH TO ESTABLISH THE IDENTITY OF THE C REDITORS. MERE PRODUCTION OF THE CONFIRMATION LETTERS BEFORE THE I NCOME-TAX OFFICER WOULD NOT BY ITSELF PROVE THAT THE LOANS HAVE BEEN OBTAINED FROM THOSE LOAN CREDITORS OR THAT THEY HAVE CREDIT-WORTHINESS. HELD, THAT, IN THE INSTANT CASE, THE TRIBUNAL MISDI RECTED ITSELF IN HOLDING THAT THE TRANSACTIONS WERE GENUINE SIMPLY B ECAUSE SOME OF THE TRANSACTIONS WERE MADE BY CHEQUES. THE ASSESSEE HAD FAILED TO PROVE THE CREDIT-WORTHINESS OF THE ALLEGED LENDERS. A NUM BER OF OTHER ASSESSEES HAD ALSO ADMITTED THAT LOANS OBTAINED FRO M THESE BANKERS AGAINST HUNDIS WERE NOT GENUINE AND SUCH HUNDI LOAN S REALLY REPRESENTED THEIR OWN CONCEALED INCOME. THE ASSESSE E HAD NOT DISCHARGED ITS BURDEN OF PROVING THAT THE LOANS IN QUESTION WERE GENUINE. 10.2 HONBLE CALCUTTA HIGH COURT IN THE CASE OF M /S. PRECISION FINANCE PVT. LTD., 208 ITR 465 HELD THAT EVEN THE LOAN THROUGH BANK CANNOT BE ACCEPTED AS GENUINE UNLESS THE IDENT ITY AND CREDITWORTHINESS OF THE CREDITORS ARE PROVED. MERE PAYMENT OF ACCOUNT PAYEE CHEQUE IS NOT SACROSANCT NOR CAN IT M AKE A NON- GENUINE TRANSACTION GENUINE. 10.3 THE HONBLE SUPREME COURT IN THE CASE OF DU RGA PRASAD MORE, 82 ITR 540 AND SUMATI DAYAL, 214 ITR 801 HELD THAT THE COURTS AND TRIBUNAL HAVE TO JUDGE THE EVIDENCES BEF ORE THEM BY ITA NO. 33/AGRA/2013 11 APPLYING THE TEST OF HUMAN PROBABILITIES AFTER CONS IDERING THE SURROUNDING CIRCUMSTANCES. 11. ON CONSIDERATION OF THE FACTS OF THE CASE IN TH E LIGHT OF ABOVE DISCUSSION AND DECISION, WE DO NOT FIND ANY JUSTIFI CATION TO INTERFERE WITH THE ORDER OF THE LD. CIT(A). THE ASSESSEE HAS FAILED TO PROVE THE CREDITWORTHINESS OF ALL THE CREDITORS AND NO SOURCE OF THEIR INCOME HAS BEEN FILED. AT THE BEST THE ASSESSEE IS ABLE TO PRO VE IDENTITY OF THE CREDITORS, BUT THE ASSESSEE FAILED TO PROVE THE GEN UINE CREDIT IN THE MATTER. ALL THE CREDITORS HAVE BEEN RIGHTLY FOUND T O BE MEN OF MEAGER MEANS AND NO SOURCE OF INCOME HAVE BEEN FILED TO PR OVE THAT THEY WERE HAVING SUFFICIENT FUNDS OR SAVINGS IN ORDER TO GIVE LOANS TO THE ASSESSEE. ON VERIFICATION OF THE BANK ACCOUNT OF TH E DEPOSITORS, IT WAS SPECIFICALLY FOUND THAT THERE WERE NO SUFFICIENT FU NDS AVAILABLE IN THEIR BANK ACCOUNT AND THEY WERE HAVING ONLY SMALL BANK B ALANCE, WHICH WAS EVEN NOT SUFFICIENT TO MEET OUT THEIR HOUSEHOLD EXPENSES OR DAY- TO-DAY REQUIREMENTS. THEREFORE, IT IS UNBELIEVABLE TO ACCEPT THE CONTENTION OF THE ASSESSEE THAT SAID PERSONS WERE H AVING CREDITWORTHINESS TO ADVANCE ANY LOAN TO THE ASSESSE E. THE DOCUMENTS PRODUCED BY THE LD. COUNSEL FOR THE ASSESSEE IN THE PAPER BOOK MERELY PROVE THE CASE OF ASSESSEE SUPERFICIALLY, WHICH IS FAR FROM REALITY OR TRUTH. WHEN THE TEST OF HUMAN PROBABILITIES AFTER C ONSIDERING THE SURROUNDING CIRCUMSTANCES AS IS PROPOUNDED BY HONB LE SUPREME COURT IN THE CASE OF DURGA PRASAD MORE (SUPRA) AND SUMATI DAYAL VS. CIT (SUPRA), IS APPLIED TO THE FACTS OF THE CASE, I T IS CLEAR THAT THE LD. CIT(A) WAS JUSTIFIED IN CONFIRMING THE ADDITION U/S . 68 OF THE IT ACT. IN THE PRESENT CASE, THE ASSESSEE HAS NOT ADDUCED A NY SUFFICIENT EVIDENCE BEFORE THE AUTHORITIES BELOW TO PROVE THE CREDITWORTHINESS OF THE CREDITORS AND GENUINENESS OF THE TRANSACTIONS I N THE MATTER. THEREFORE, THE ASSESSEE HAS NOT SATISFIED THE ESSEN TIAL INGREDIENTS OF SECTION 68 OF THE IT ACT. 12. IN THE CASE OF ROHINI BUILDERS AND U.M. SHAH (S UPRA), THE DEPARTMENTAL APPEAL WAS DISMISSED FINDING NO SUBSTA NTIAL QUESTION OF LAW BECAUSE THE FINDINGS OF THE TRIBUNAL WERE BASED ON APPRECIATION OF EVIDENCE. 12.1 IN THE CASE OF CIT VS. ORISSA CORPORATION P. L TD (SUPRA), IT WAS ALSO HELD THAT THE REVENUE DID NOT EXAMINE SOURCE O F INCOME OF THE SAID ALLEGED CREDITORS WHEN THEY WERE ASSESSED TO T AX TO FIND OUT ITA NO. 33/AGRA/2013 12 WHETHER THEY WERE CREDITWORTHY. HOWEVER, IN THE PRE SENT CASE, THE AUTHORITIES BELOW HAVE SPECIFICALLY FOUND THAT ALL THE CREDITORS WERE NOT MEN OF MEANS AND AS SUCH, THEIR CREDITWORTHINES S WAS NOT PROVED AT ALL. THEREFORE, THE DECISION CITED BY THE LD. CO UNSEL FOR THE ASSESSEE WOULD NOT SUPPORT THE CASE OF THE ASSESSEE. 13. CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE IN THE LIGHT OF FINDINGS OF THE AUTHORITIES BELOW, WE DO NOT FIN D ANY IRREGULARITY OR ILLEGALITY IN THE ORDERS OF THE AUTHORITIES BELOW. WE CONFIRM THEIR FINDINGS AND DISMISS THE APPEAL OF THE ASSESSEE ON THIS GROUND. CONCISE GROUNDS NOS. 1 & 2 ARE, ACCORDINGLY, DISMIS SED. 6.1 THIS ORDER HAS BEEN CONFIRMED BY THE HONBLE JU RISDICTIONAL HIGH COURT ALLAHABAD IN ITA NO. 680 OF 2012 IN THE MATTER OF S MT. SUMAN GUPTA VS. CIT, AGRA AND OTHERS VIDE ORDER DATED 07.08.2012 AND THE APPEAL OF THE ASSESSEE HAS BEEN DISMISSED. I MAY ALSO NOTE THAT THE ASSESSEE H AS ALSO FAILED TO PRODUCE DONOR FOR VERIFICATION OF THE GENUINENESS OF THE GIFT IN THE MATTER BEFORE THE AO. THEREFORE, THE AUTHORITIES BELOW WERE JUSTIFIED IN TAKING ADVERSE INFERENCE AGAINST THE ASSESSEE. THE LD. COUNSEL FOR THE ASSESSEE CONT ENDED THAT SINCE THE DONOR IS NOT SUBJECTED TO CROSS EXAMINATION ON HIS AFFIDAVIT, TH EREFORE, THE AFFIDAVIT OF THE DONOR SHOULD HAVE BEEN BELIEVED BY THE AUTHORITIES BELOW. I MAY REMIND HERE THAT DONOR IS WITNESS OF THE ASSESSEE TO PROVE THE GENUINE GIF T IN THE MATTER AND CREDITWORTHINESS OF THE DONOR AND WHEN AFFIDAVIT OF THE DONOR IS FILED BEFORE THE AUTHORITIES BELOW, IT IS LIKE AN EXAMINATION IN CHI EF. THEREFORE, THE ASSESSEE SHOULD HAVE PRODUCED THE DONOR BEFORE THE AO FOR HIS CROSS EXAMINATION OTHERWISE AFFIDAVIT WOULD NOT BE RELIED UPON IN FAVOUR OF THE ASSESSEE. SINCE THE ASSESSEE DID ITA NO. 33/AGRA/2013 13 NOT PRODUCE THE DONOR I.E., THE DEPONENT OF THE AFF IDAVIT BEFORE THE AO FOR CROSS EXAMINATION, THEREFORE, WHATEVER IS STATED IN THE A FFIDAVIT CANNOT BE RELIED UPON IN FAVOUR OF THE ASSESSEE TO PROVE THE GENUINENESS OF THE GIFT IN THE MATTER. FURTHER, THE ASSESSEE HAS NOT PROVED ANY OCCASION OF SUCH GI FT. NO EVIDENCE OR ANY REASONS OR OCCASION OF GIFT HAVE BEEN FILED. NO EVIDENCE OR MATERIAL SHOWING ANY LOVE AND AFFECTION HAVE BEEN FILED BEFORE THE AUTHORITIES BE LOW. MERELY BECAUSE DONOR WAS UNCLE OF THE ASSESSEE AND WAS UNMARRIED AND GIVEN A MOUNT OF SALE PROCEED TO THE ASSESSEE WOULD NOT PROVE THE NON-GENUINE GIFT TO BE GENUINE. MERELY BECAUSE THE GIFT IS GIVEN THROUGH ACCOUNT PAYEE CHEQUES WOULD A LSO NOT PROVE THE GENUINE GIFT. IN THE ABSENCE OF SUFFICIENT MATERIAL ON RECORD, TH E ASSESSEE HAS FAILED TO PROVE GENUINE GIFT IN THE MATTER. IT IS, THEREFORE, HELD THAT THE GIFT IS NOT GENUINE AND ARRANGED AFFAIR OF THE ASSESSEE. HONBLE DELHI HIG H COURT IN THE CASE OF CIT VS ANIL KUMAR 292 ITR 552 HELD AS UNDER : IN THE CASE OF GIFTS MERE IDENTIFICATION OF THE DON OR AND SHOWING THE MOVEMENT OF THE GIFT AMOUNT THROUGH BAN KING CHANNELS IS NOT SUFFICIENT TO PROVE THE GENUINENESS OF THE GIFT . SINCE THE CLAIM OF GIFT IS MADE BY THE ASSESSEE, THE ONUS LIES ON HIM NOT ONLY TO ESTABLISH THE IDENTITY OF THE PERSON MAKING THE GIFT BUT ALSO HIS CAPACITY TO MAKE SUCH A GIFT. IN ASSESSMENT PROCEEDINGS FOR THE ASSE SSMENT YEAR 1995- 96 THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HAD RECEIVED TWO GIFTS OF RS.10 LAKHS EACH FROM N. R. E. ACCOUNTS OF TWO DONORS, NAMELY V AND D. THE ASSESSING OFFICER FOUND THAT THE ASSES SEE COULD NOT DISCHARGE HIS ONUS OF PROVING THE CREDIT-WORTHINESS OF THE DONORS AND HELD THAT THE AMOUNT OF RS.20 LAKHS WHICH HAD BEEN DECLARED BY THE ASSESSEE AS GIFT, WAS IN FACT HIS INCOME AND ADDED TO HIS TOTAL INCOME UNDER SECTION 68. THE ADDITION WAS DELETED BY THE C OMMISSIONER (APPEALS) AND THIS WAS UPHELD BY THE TRIBUNAL. ON A PPEAL TO THE HIGH ITA NO. 33/AGRA/2013 14 COURT: HELD THAT THERE WAS NOTHING ON RECORD TO SHO W AS TO WHAT WAS THE FINANCIAL CAPACITY OF THE DONORS, WHAT WAS THE CREDIT-WORTHINESS OF THE DONORS, WHAT KIND OF RELATIONSHIP THE DONORS HA D WITH THE ASSESSEE, WHAT WERE THE SOURCES OF FUNDS GIFTED TO THE ASSESSEE AND WHETHER THEY HAD THE CAPACITY OF GIVING LARGE AMOUN TS OF GIFT TO THE ASSESSEE. FURTHER, THE ASSESSEE WAS ASKED TO APPEAR IN PERSON BEFORE THE ASSESSING OFFICER, BUT NEVER APPEARED. THE ADDI TION OF RS.20 LAKHS WAS JUSTIFIED. 6.2 THE HONBLE SUPREME COURT IN THE CASE OF CIT VS P. MOHANKALA 291 ITR 278 HELD AS UNDER : THE ASSESSEE RECEIVED FOREIGN GIFTS FROM ONE COMMON DONOR. THE PAYMENTS WERE MADE TO THEM BY INSTRUMENTS ISSUED BY FOREIGN BANKS AND CREDITED TO THE RESPECTIVE ACCOUNT OF THE ASSES SEES BY NEGOTIATION THROUGH A BANK IN INDIA. MOST OF THE CHEQUES SENT F ROM ABOARD WERE DRAWN ON THE CITIBANK, N. A. SINGAPORE. THE EVIDENC E INDICATED THAT THE DONOR WAS TO RECEIVE SUITABLE COMPENSATION FROM THE ASSESSEES. ON THIS MATERIAL THE ASSESSING OFFICER HELD THAT TH E GIFTS THOUGH APPARENT WERE NOT REAL AND ACCORDINGLY TREATED ALL THOSE AMOUNTS WHICH WERE CREDITED IN THE ACCOUNT BOOKS OF THE ASS ESSEES AS THEIR INCOME APPLYING SECTION 68 OF THE INCOME-TAX ACT, 1 961. THE ASSESSEES DID NOT CONTEND THAT EVEN IF THEIR EXPLAN ATION WAS NOT SATISFACTORY THE AMOUNTS WERE NOT OF THE NATURE OF INCOME. THE COMMISSIONER (APPEALS) CONFIRMED THE ASSESSMENT. ON FURTHER APPEAL, THERE WAS A DIFFERENCE OF OPINION BETWEEN T HE TWO MEMBERS OF THE APPELLATE TRIBUNAL AND THE MATER WAS REFERRED T O THE VICE PRESIDENT WHO CONCURRED WITH THE FINDINGS AND CONCL USION OF THE ASSESSING OFFICER AND THE COMMISSIONER (APPEALS). O N APPEAL THE HIGH COURT RE-APPRECIATED THE EVIDENCE AND SUBSTITU TED ITS OWN FINDINGS AND CAME TO THE CONCLUSION THAT THE REASON S ASSIGNED BY THE TRIBUNAL WERE IN THE REALM OF SURMISES, CONJECTURE AND SUSPICION. ON APPEAL TO THE SUPREME COURT: HELD, REVERSING THE DE CISION OF HIGH COURT, THAT FINDINGS OF THE ASSESSING OFFICER, THE COMMISSIONER (APPEALS) AND THE TRIBUNAL WERE BASED ON THE MATERI AL ON RECORD AND NOT ON ANY CONJECTURES AND SURMISES. THAT THE MONEY CAME BY WAY OF BANK CHEQUES AND WAS PAID THROUGH THE PROCESS OF BA NKING TRANSACTION WAS NOT BY ITSELF OF ANY CONSEQUENCE. T HE HIGH COURT ITA NO. 33/AGRA/2013 15 MISDIRECTED ITSELF AND ERRED IN DISTURBING THE CONC URRENT FINDINGS OF FACT. 6.3 HONBLE PUNJAB AND HARYANA HIGH COURT IN THE CA SE OF YASH PAL GOEL VS CIT 310 ITR 75 HELD AS UNDER : HELD, DISMISSING THE APPEAL THAT THE FINANCIAL POS ITION OF M. SUGGESTED THAT HE NEITHER HAD THE CAPACITY TO MAKE THE GIFT NOR THE SOURCE FROM WHERE THE GIFT WAS MADE. NO REASON WHAT SOEVER HAD BEEN ASSIGNED FOR GIFTING SUCH A HUGE AMOUNT BY M TO THE ASSESSEE. M NEVER VISITED THE HOME OF THE ASSESSEE AND HENCE THERE WA S NO LOVE AND AFFECTION. IT WAS NOTHING BUT A SUBTERFUGE TO AVOID INCOME-TAX. THE TRANSACTIONS WERE NOT GENUINE ONES. 6.4 CONSIDERING THE ABOVE DISCUSSION, IT IS CLEAR T HAT THE ASSESSEE HAS FAILED TO PROVE THE CREDITWORTHINESS OF THE DONOR AND THE GEN UINENESS OF THE GIFT IN THE MATTER. NO EVIDENCE OR MATERIAL HAS BEEN PRODUCED B EFORE THE AUTHORITIES BELOW TO PROVE THE GENUINENESS OF THE GIFT IN THE MATTER. T HE DECISIONS RELIED UPON BY THE LD. COUNSEL FOR THE ASSESSEE, THUS, WOULD NOT SUPPO RT THE CASE OF THE ASSESSEE. IN VIEW OF THE ABOVE DISCUSSION, THE APPEAL OF THE ASS ESSEE ON MERIT IS DISMISSED. FURTHER, IT IS NOT EXPLAINED WHETHER THE ASSESSEE C HALLENGED REOPENING OF ASSESSMENT BEFORE THE AO AND WHATEVER PLEA WAS TAKE N FOR REOPENING OF ASSESSMENT BEFORE THE LD. CIT(A) WAS TURNED TOWN BE CAUSE IN THIS CASE, EARLIER NO REGULAR ASSESSMENT U/S. 143(3) HAS BEEN PASSED AND REOPENING HAS BEEN DONE WITHIN THE PERIOD OF LIMITATION WITH SANCTION OF COMPETENT AUTHORITIES. THE LD. COUNSEL FOR THE ASSESSEE DID NOT CONTRIBUTE ANYTHING ON THIS IS SUE AND MERELY SUBMITTED THAT ITA NO. 33/AGRA/2013 16 WHATEVER SUBMISSIONS MADE BEFORE THE LD. CIT(A) MAY BE TAKEN INTO CONSIDERATION. IN THE ABSENCE OF ANY SPECIFIC CHALLENGE, I AM NOT INCLINED TO INTERFERE WITH THE ORDERS OF THE AUTHORITIES BELOW IN RESPECT OF REOPE NING OF ASSESSMENT, WHICH IS ALSO JUSTIFIED AS ADDITION ON MERIT HAS BEEN CONFIRMED A S ABOVE. IN THE RESULT, BOTH THE ISSUES ARE DECIDED AGAINST THE ASSESSEE AND THE APP EAL OF THE ASSESSEE IS, ACCORDINGLY, DISMISSED. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DIS MISSED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- (BHAVNESH SAINI) JUDICIAL MEMBER *AKS/- COPY OF THE ORDER FORWARDED TO : 1. APPELLANT 2. RESPONDENT 3. CIT(A), CONCERNED BY ORDER 4. CIT, CONCERNED 5. DR, ITAT, AGRA 6. GUARD FILE SR. PRIVATE SECRETARY TRUE COPY