YFC Projects (P) Ltd., New Delhi V. Addl. CIT, New Delhi

ITA 3444/DEL/2011

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 53459 (ITAT-DELHI)
• Duration Of Justice: 5 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-12-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: I
• Next Hearing Date: 21-11-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 06-07-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A K MONGA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH I NEW DELHI) BEFORE SHRI RAJPAL YADAV AND SHRI K.G. BANSAL ITA NO. 3444/DEL/2011 ASSESSMENT YEAR: 2006-07 YFC PROJECTS (P) LTD., VS. ADDITIONAL CIT, B-28, SHIVALIK MALVIYA NAGAR, RANGE-18, NEW DELHI-1100 17 NEW DELHI. (PAN: AAACF1998B) (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI HIREN ME HTA, CA RESPONDENT BY: SHRI A.K. MONGA, SR.DR DATE OF HEARING : 21.11.2011 DATE OF PRONOUNCEMENT : 16.12.2011 ORDER PER RAJPAL YADAV: JUDICIAL MEMBER THE ASSESSEE IS IN APPEAL BEFORE US AGAINST THE OR DER OF LEARNED CIT(APPEALS) DATED 09.05.2011 PASSED FOR ASSESSMENT YEAR 2006-07. THE ASSESSEE HAS TAKEN FOUR GROUNDS OF APPEAL, OUT OF W HICH GROUND NOS.1 AND 4 ARE GENERAL IN NATURE, THEY DO NOT REQUIRE ANY SPEC IFIC FINDING TO BE RECORDED, HENCE REJECTED. 2. IN GROUND NO.2, THE GRIEVANCE OF ASSESSEE IS THA T LEARNED CIT(APPEALS) HAS ERRED IN CONFIRMING THE ADDITION O F RS.10,80,000. THE BRIEF FACTS OF THE CASE ARE THAT ASSESSEE HAS FILED RETURN OF INCOME ON 30 TH NOVEMBER, 2006 DECLARING AN INCOME OF RS.1,47,16,75 0. ITS CASE WAS 2 SELECTED FOR SCRUTINY ASSESSMENT AND A NOTICE UNDER SEC. 143(2) OF THE INCOME-TAX ACT, 1961 DATED 24.10.2007 WAS ISSUED, W HICH WAS DULY SERVED UPON THE ASSESSEE. ON SCRUTINY OF THE ACCOUNTS, IT REVEALED TO THE ASSESSING OFFICER THAT ASSESSEE HAS TAKEN UNSECURED LOANS FRO M THE FOLLOWING PERSONS: I) MAYA DEVI RS.4,00,000 II) SUDESH YADAV RS.2,00,000 III) KRISHNA YADAV RS.2,00,000 IV) VIDYANAND YADAV RS. 50,000 V ) GOPI CHAND YADAV RS.1,00,000 VI) RAMESHWARI DEVI RS.1,30,000 3. HE DIRECTED THE ASSESSEE TO PROVE THE IDENTITY O F THE CREDITORS, THEIR, CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTION . THE ASSESSEE HAS FILED DETAILED REPLY WHEREIN IT HAS FILED CONFIRMATION, P ROOF OF RESIDENCE AND OTHER DETAILS IN RESPECT OF ALL THE CREDITORS, BUT LEARNE D ASSESSING OFFICER REJECTED THE CONTENTIONS OF ASSESSEE BY OBSERVING THAT IN TH E CONFIRMATION, THERE IS NO ADDRESS OF MAYA DEVI, NO INCOME PARTICULARS, SHE HA S PUT THUMB IMPRESSION ETC. THE FINDING IS DISCERNIBLE IN A TABULAR FORM A VAILABLE ON PAGES 3 & 4 OF THE ASSESSMENT ORDER. 4. APPEAL TO THE LEARNED CIT(APPEALS) DID NOT BRING ANY RELIEF TO THE ASSESSEE. 3 5. THE LEARNED COUNSEL FOR THE ASSESSEE WHILE IMPUG NING THE ORDERS OF THE REVENUE AUTHORITIES BELOW HAS SUBMITTED THAT IN RESPECT OF MAYA DEVI, ASSESSING OFFICER HAS MADE THE ADDITION OF RS.4 LAC S ON THE GROUND THAT ADDRESS IS MISSING ON THE CONFIRMATION, SHE HAS PUT THUMB IMPRESSION, SHE HAD EARLIER MADE FDR WITH YOGINDERA FINANCE LTD. WH ICH HAS BEEN GIVEN TO THE ASSESSEE ON THE ALLEGED MATURITY. ASSESSING OFF ICER ALSO OBSERVED THAT THE DIRECTOR IN THE YOGINDERA FINANCE LTD. AND YFC PROJECT ARE COMMON, THEREFORE, IT APPEARS THAT IT IS THEIR OWN MONEY. H E FURTHER POINTED OUT THAT LEARNED FIRST APPELLATE AUTHORITY CONFIRMED THE ADD ITION ON THE GROUND THAT ASSESSEE HAS NOT PAID ANY INTEREST AND SMT. MAYA DE VI IS NOT HAVING ANY PAN WITH THE INCOME-TAX DEPARTMENT. THE LEARNED COU NSEL FOR THE ASSESSEE SUBMITTED THAT SMT. MAYA DEVI HAD MADE TWO FIXED DE POSITS OF RS. 2 LACS EACH WITH YOGINDERA FINANCE LTD. VIDE FDR NOS. 0006 89 AND 000691 DATED 16.3.2002 FOR A TERM OF TWO YEARS EACH. THESE DEPOS ITS WERE EARNING INTEREST @ 11% PER ANNUM. YOGINDERA FINANCE LTD. IS A NON BA NKING FINANCE COMPANY REGISTERED WITH RBI AND WAS ENTITLED TO ACC EPT DEPOSITS FROM PUBLIC. HOWEVER, LATER ON, RBI PLACED A RESTRICTION ON THE SAID COMPANY TO ACCEPT FRESH DEPOSITS OR TO RENEW THE DEPOSITS ON M ATURITY. THE ASSESSEE HAS PRODUCED COPY OF THE LETTER SENT BY RBI BEFORE THE ASSESSING OFFICER. IN THIS BACKGROUND, ON MATURITY, I.E. 16.3.2005, SMT. MAYA DEVI HAD MADE DEPOSITS 4 WITH THE ASSESSEE. THE AMOUNTS HAVE DULY BEEN ROUTE D THROUGH BANK ACCOUNT AND THE ASSESSEE HAS FURNISHED FOR BANK STATEMENT. SHE HAS NO TAXABLE INCOME, COPY OF FORM NO.15H WAS ALSO SUBMITTED. ASS ESSING OFFICER DID NOT SUMMON THIS CREDITOR. COMPLETE ADDRESS WAS FURN ISHED TO THE ASSESSING OFFICER. HE ALSO POINTED OUT THAT LEARNED FIRST APP ELLATE AUTHORITY HAS WRONGLY MENTIONED THAT NO INTEREST WAS PAID. HE TOO K US THROUGH PAGE NO.47 OF THE PAPER BOOK WHERE COPY OF THE ACCOUNT OF THIS PARTY IS AVAILABLE WITH THE ASSESSEE AND POINTED OUT THAT INTEREST HAS DULY BEEN CREDITED. HE POINTED OUT THAT THIS CONFIRMED ACCOUNT WAS PRODUCED BEFORE THE ASSESSING OFFICER AS WELL AS BEFORE THE LEARNED CIT(APPEALS). INSPITE OF THIS FACT, LEARNED AUTHORITIES HAVE FAILED TO APPRECIATE THE FACTS. ON THE OTHER HAND, LEARNED DR RELIED UPON THE ORDERS OF THE REVENUE AUTHORITIE S BELOW. 6. WE HAVE DULY CONSIDERED THE RIVAL CONTENTIONS AN D GONE THROUGH THE RECORD CAREFULLY. THE COPY OF FORM NO.15H IN RESPEC T OF SMT. MAYA DEVI W/O LATE SHRI SHANKER KUMAR HAS BEEN PLACED ON RECO RD AT PAGE NO.49 OF THE PAPER BOOK. THE BANK STATEMENT OF THE CREDITOR ALONG WITH HER PHOTOGRAPH ON THE PASS BOOK WITH BANK OF BARODA WAS PRODUCED BEFORE THE ASSESSING OFFICER AND ITS COPY AVAILABLE ON PAGE NO .44 OF THE PAPER BOOK. THE ENTRIES STARTING FROM 16 TH OF JULY 2001 UP TO 25.1.2006 HAVE BEEN 5 PRODUCED BY THE ASSESSEE. ON AN ANALYSIS OF THIS EV IDENCE, VIS--VIS THE FINDINGS OF THE LEARNED REVENUE AUTHORITIES, WE FIN D THAT LEARNED REVENUE AUTHORITIES DID NOT APPRECIATE THE FACTS IN RIGHT P ERSPECTIVE. THEY HAVE GIVEN VERY FRAGILE REASONING FOR REJECTING THE EXPLANATIO N OF THE ASSESSEE. THE REASONING GIVEN BY THE ASSESSING OFFICER IS THAT ON VERIFICATION OF THE DETAILS, IT REVEALS THAT SMT. MAYA DEVI HAS SHOWN F DS WITH YOGINDERA FINANCE LTD. THE FDS WERE DEPOSITED IN HER ACCOUNT ON 19.3.2002 AND THIS AMOUNT WAS PAID TO YFC PROJECT ON 25.3.2004. ASSESS ING OFFICER FURTHER OBSERVED THAT HE CANNOT UNDERSTAND AS TO HOW THE FD RS WERE LYING WITH THE COMPANY FOR SUCH LONG PERIOD. HE OBSERVED THAT DIRE CTORS OF BOTH THE COMPANIES WERE COMMON AND, THEREFORE, IT IS THEIR M ONEY. ON THE OTHER HAND, LEARNED CIT(APPEALS) OBSERVED THAT SINCE NO I NTEREST WAS PAID, THEREFORE, IT CREATES A SUSPICION ABOUT THE GENUINE NESS OF THE TRANSACTION. THE CASE OF THE ASSESSEE IS THAT FDRS WERE MADE ON 16.3 .2003. THEY WERE MATURED ON 16.3.2005 AND THEY WERE INVESTED WITH TH E ASSESSEE ON 02.04.2005. THUS, THE FDRS WERE NOT KEPT BY THE ASS ESSEE COMPANY I.E. YFC PROJECT, FOR A LONG PERIOD. LEARNED ASSESSING O FFICER FAILED TO APPRECIATE THIS ASPECT. HE DID NOT ENQUIRE ABOUT TH E IDENTITY OF THE CREDITORS BY ISSUING ANY NOTICE ETC. BUT REJECTED THE CONTENT IONS OF THE ASSESSEE WITHOUT ANY VERIFICATION. TAKING INTO CONSIDERATION THE REA SONS ASSIGNED BY THE 6 LEARNED REVENUE AUTHORITIES BELOW, WE ARE OF THE VI EW THAT THEY ARE NOT SUFFICIENT TO REJECT THE EXPLANATION SUBMITTED BY T HE ASSESSEE WITH DOCUMENTARY EVIDENCE. HENCE, THIS ADDITION IS DELET ED. 7. THE NEXT CREDITOR IS SUDESH YADAV AGAINST WHOSE NAME A SUM OF RS.2 LACS APPEARING. THIS CREDITOR ALSO MADE FDR OF RS. 1 LAC WITH YOGINDERA FINANCE LTD. SHE IS THE SISTER OF DIRECTOR. SHE GAV E CONFIRMATION IN SUPPORT OF THE ADVANCEMENT OF LOAN, HER BANK STATEMENT WAS ALSO FURNISHED AND COPY OF FORM NO.15H ALSO SUBMITTED. THE NEXT CREDITOR IS KRISHAN YADAV. ACCORDING TO THE ASSESSEE, SHE IS A EXISTING CREDIT OR, HAVING OPENING BALANCE AND MADE A DEPOSIT OF RS.2 LACS. SHE IS AN INCOME-T AX ASSESSEE. SHE HAS FILED HER RETURN FOR ASSESSMENT YEARS 2005-06 AND 2006-07 , COPIES OF HER ITRS WERE SUBMITTED BEFORE THE ASSESSING OFFICER. SHE HA S SHOWN INVESTMENT WITH YFC PROJECT LTD. AT RS.6,50,000. SHE WAS PAID INTEREST AND TDS ON SUCH INTEREST WAS DEDUCTED. THE ASSESSEE HAS PRODUC ED ALL THESE DOCUMENTARY EVIDENCE IN ORDER TO DISCHARGE THE ONUS PUT UPON IT. THE NEXT CREDITOR IS VIDYANAND FROM WHOM RS.50,000 HAS BEEN TAKEN. THE ASSESSEE POINTED OUT THAT HE IS BROTHER-IN-LAW OF ONE OF THE DIRECTORS. HE IS EXISTING DEPOSITOR, HAVING OPENING BALANCE, HE MADE FURTHER DEPOSIT OF RS.50,000, BANK STATEMENT, CONFIRMATION ETC. WERE PRODUCED. TH E NEXT CREDITOR IS GOPI 7 CHAND. GOPI CHAND IS ALSO BROTHER-IN-LAW OF ONE OF THE DIRECTORS. THE FACTS ARE SIMILAR TO THAT OF VIDYANAND. HE IS INCOME-TAX ASSESSEE AND FILED INCOME-TAX RETURN FOR ASSESSMENT YEAR 2006-07. NEXT CREDITOR IS RAMESHWARI DEVI FROM WHOM A SUM OF R.1,30,000 HAS BEEN TAKEN. SHE IS MOTHER OF THE DIRECTOR. SHE IS A EXISTING DEPOSITOR, AN INCOME-TA X ASSESSEE. SHE CONFIRMED THE TRANSACTION AND THE ASSESSEE DISCLOSED HER COMP LETE ADDRESS. ALL THESE DOCUMENTARY EVIDENCE HAVE BEEN PLACED IN THE PAPER BOOK. 8. WITH THE ASSISTANCE OF LEARNED REPRESENTATIVES, WE HAVE GONE THROUGH THE EVIDENCE PRODUCED BY THE ASSESSEE AS WELL AS TH E REASONS ASSIGNED BY THE LEARNED COMMISSIONER. ASSESSING OFFICER WITH RESPEC T TO RAMESHWARI DEVI HAS OBSERVED THAT THERE IS NO BANK STATEMENT WHICH IS FACTUALLY INCORRECT. ASSESSEE PLACED ON RECORD COPY OF THE BANK STATEMEN T AT PAGE NOS. 68 & 69 OF THE PAPER BOOK. SHE HAS A BANK ACCOUNT BEARING N O.19232 WITH BANK OF BARODA. ASSESSING OFFICER FURTHER OBSERVED THAT NO ADDRESS WAS PRODUCED AND SHE ONLY PUT A THUMB IMPRESSION. THE ASSESSEE P OINTED OUT THAT SHE IS MOTHER OF THE DIRECTOR, HER ADDRESS IS AVAILABLE IN THE CONFIRMATION. SHE IS AN OLD ILLITERATE LADY, THEREFORE, PUT THE THUMB IMPRE SSION. WE ARE REFERRING THESE DETAILS ONLY WITH A VIEW TO DEMONSTRATE THAT LEARNED REVENUE AUTHORITIES HAVE NOT APPRECIATED THE FACTS AND CIRCUMSTANCES IN RIGHT PERSPECTIVE RATHER 8 MADE THE ADDITION ON THE BASIS OF IRRELEVANT REASON ING. ASSESSING OFFICER DID NOT BOTHER TO ISSUE SUMMONS TO THE CREDITORS IN ORD ER TO VERIFY THE GENUINENESS OF THE ADDRESSES GIVEN BY THE ASSESSEE. THE ASSESSEE HAS DEMONSTRATED THAT ALL THE CREDITORS ARE EXISTING CR EDITORS, MOST OF THEM HAVE MADE THE INVESTMENT WITH YOGINDERA FINANCE LTD. WHI CH WAS PROHIBITED BY THE RBI TO RENEW THE INVESTMENT OR ACCEPT FRESH DEP OSITS FROM THE PUBLIC. TAKING INTO CONSIDERATION THE BACKGROUND HIGHLIGHTE D BY THE ASSESSEE, WE ARE OF THE VIEW THAT ASSESSEE HAS DISCHARGED THE ON US PUT UPON IT BY VIRTUE OF SEC. 68 OF THE ACT. 9. IN THE NEXT GROUND OF APPEAL, THE GRIEVANCE OF THE ASSESSEE IS THAT LEARNED CIT(APPEALS) HAS ERRED IN CONFIRMING THE AD DITION OF RS.41,50,000. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE HAS RECEIVED SHARE APPLICATION MONEY OF RS.40 LACS FROM ONE SMT. VEENA GUPTA AND RS.1,50,000 FROM BIMLA DEVI. ASSESSING OFFICER HAS CONFRONTED THE ASSESSEE TO PROVE THE CREDITWORTHINESS OF THE SHARE APPLICAN T, GENUINENESS OF THE TRANSACTION. IN RESPONSE TO THE QUERY OF THE ASSESS ING OFFICER, IT WAS CONTENDED BY THE ASSESSEE THAT SMT. VEENA GUPTA HAS A BANK BALANCE OF RS.35,05,063 AS ON 8.4.2005 WHICH WAS INCREASED TO RS.37,61,320 AS ON 19 TH DECEMBER 2005. SHE HAD RECEIVED A SUM OF RS.12,45,0 00 FROM SURESH 9 CHAND GUPTA, HUF, A HUF OF HER HUSBAND AND THIS AMO UNT WAS CREDITED IN HER BANK ACCOUNT. OUT OF THIS BANK BALANCE, A SUM O F RS.40 LACS WAS INVESTED IN THE ASSESSEES COMPANY. THE SHARES HAVE DULY BEE N ALLOTTED TO HER ON 16 TH OF OCTOBER. COPY OF FORM NO.2 FILED WITH THE REGIST RAR OF COMPANIES HAS BEEN FILED BEFORE THE ASSESSING OFFICER. THE COPY O F BANK PASS BOOK OF VEENA GUPTA WAS SUBMITTED. WITH REGARD TO SMT. BIML A DEVI, IT WAS CONTENDED THAT A SUM OF RS.1,50,000 WAS RECEIVED IN CASH TOWARDS SHARE APPLICATION MONEY. THE SHARES WERE DULY ALLOTTED AN D INFORMATION TO THIS EXTENT WAS SUBMITTED IN FORM NO.2 WITH THE REGISTRA R OF COMPANIES, DELHI AND HARYANA. LEARNED ASSESSING OFFICER REJECTED THE CONTENTION OF ASSESSEE AND SUBMITTED THAT IT FAILS TO PROVE THAT SMT. VEEN A GUPTA HAS MADE INVESTMENT IN THE ASSESSEES COMPANY OUT OF HER TAX ABLE INCOME. WITH REGARD TO SMT. BIMLA DEVI, ASSESSING OFFICER HAS OB SERVED THAT ASSESSEE FAILED TO PROVE THE CREDITWORTHINESS. LEARNED FIRST APPELLATE AUTHORITY HAS CONFIRMED THE ADDITION BY OBSERVING AS UNDER: 5.3 I HAVE GONE THROUGH THE FINDING OF THE A.O. IN THE ASSESSMENT ORDER AND IN THE REMAND REPORT AND SUBMISSION OF TH E LEARNED AR AND REJOINDER LETTER IN THIS REGARD. I HAVE GONE THROUG H THE REMARKS OF THE A.O., WHEREIN, HE HAS NOTICED THAT IN THE CASE OF M RS. VEENA GUPTA CURRENT ADDRESS WAS KNOWN TO THE DEPARTMENT ABOUT W HICH LEARNED AR 10 HAS CONTENDED THAT ALL DETAILS WERE GIVEN TO THE A. O. IT HAS ALSO BEEN OBSERVED BY THE A.O. THAT ADDRESS WAS MENTIONED IN THE BANK STATEMENT ONLY. SIMILAR IS THE CASE OF SMT. BIMLA D EVI WHO IS NOT HAVING ANY PAN NUMBER AND HAS RECEIVED SOME AMOUNT FROM M/S. YOGINDERA FINANCE LTD., A SISTER CONCERN OF ASSESSE E COMPANY. THE FACT THAT SHE IS NOT HAVING PAN NUMBER AND SHE IS N OT AN INCOME-TAX ASSESSEE HAD NOT BEEN CONTROVERTED BY THE LEARNED A R IN HIS SUBMISSION. SO, IT IS A CLEAR CASE THAT BASIC ELEME NT OF PROVING THE IDENTITY HAS NOT BEEN SATISFIED. SO, IT IS A CLEAR CASE THAT BASIC ELEMENT OF PROVING THE IDENTITY HAS NOT BEEN SATISFIED. IN THIS REGARD, RELIANCE IS PLACED ON THE JUDGMENT OF THE HON'BLE DELHI HIGH CO URT IN THE CASE OF OASIS HOSPITALITIES (P) LTD. REPORTED IN 238 CTR 40 2, WHEREIN, HON'BLE DELHI HIGH COURT HAS HELD AS UNDER: IT IS CLEAR FROM THE ABOVE THAT THE INITIAL BURDEN IS UPON THE ASSESSEE TO EXPLAIN THE NATURE AN SOURCE OF THE SHA RE APPLICATION MONEY RECEIVED BY THE ASSESSEE. IN ORDER TO DISCHAR GE THIS BURDEN, THE ASSESSEE IS REQUIRED TO PROVE: A) IDENTITY OF SHAREHOLDER; B) GENUINENESS OF TRANSACTION; AND C) CREDITWORTHINESS OF SHAREHOLDERS. IN CASE THE INVESTOR/SHAREHOLDER IS AN INDIVIDUAL, SOME DOCUMENTS WILL HAVE TO BE FILED OR THE SAID SHAREHOLDER WILL BE TO BE PRODUCED BEFORE THE A.O. TO PROVE HIS IDENTITY. IF THE CREDITWORTHI NESS IS A COMPANY, 11 THEN THE DETAILS IN THE FORM OF REGISTERED ADDRESS OR PAN IDENTITY, ETC. CAN BE FURNISHED. GENUINENESS OF THE TRANSACTION IS TO BE DEMONSTRATE D BY SHOWING THAT THE ASSESSEE HAD, IN FACT, RECEIVED MO NEY FROM THE SAID SHAREHOLDER AND IT CAME FROM THE COFFERS FROM THAT VERY SHAREHOLDER. 5.4 FROM THE ABOVE IT IS CRYSTAL THAT HON'BLE DELHI HIGH COURT HAS EMPHASIZED THAT ALL THE THREE INGREDIENTS REQUIRE T O BE SATISFIED VIZ. IDENTITY, GENUINENESS AND CREDITWORTHINESS. IN THE INSTANT CASE BY NOT FILING THE PAN DETAILS OF SMT.BIMLA DEVI, ASSESSEE HAS FAILED TO ESTABLISH THE IDENTITY OF SMT. BIMLA DEVI. SIMILAR, IN THE CASE OF MRS. VEENA GUPTA THE ELEMENT OF CREDITWORTHINESS HAS NOT BEEN SATISFIED. SO, IN MY CONSIDERED OPINION ACTION OF THE A.O. DES ERVES TO BE CONFIRMED AND GROUND NO.3 IS DISMISSED. 10. THE LEARNED COUNSEL FOR THE ASSESSEE HAS REITER ATED HIS CONTENTIONS AS WERE RAISED BEFORE THE REVENUE AUTHORITIES BELOW. H E TOOK US THROUGH PAGE NOS. 72 TO 84 OF THE PAPER BOOK. IN THESE PAGES, CO NFIRMATION FROM SMT. VEENA GUPTA AND SMT. BIMLA DEVI ARE PLACED ON RECOR D AT PAGE NOS. 75 & 82. COPY OF FORM NO.2 ALONGWITH LIST OF ALLOTTEES O F SHARES FILED WITH ROC HAS BEEN PLACED ON PAGES 76 & 79. BANK STATEMENT OF SMT. VEENA GUPTA HAS BEEN PLACED ON PAGES 72 TO 74. SIMILARLY, BANK STAT EMENT OF SMT. BIMLA DEVI HAS BEEN PLACED ON PAGES 80 AND 81. ON PAGE 83 , CERTIFICATE DATED 27.11.2008 FROM YOGINDERA FINANCE LTD. SHOWING REDE MPTION OF DEPOSITS OF 12 SMT. BIMLA DEVI HAS BEEN PLACED BY THE ASSESSEE. TH E ASSESSEE ALSO PLACED ON RECORD COPY OF FORM NO.15H FILED BY SMT. BIMLA D EVI WITH YOGINDERA FINANCE LTD. ON THE STRENGTH OF THESE DOCUMENTS, LE ARNED COUNSEL FOR THE ASSESSEE POINTED OUT THAT THE MONEY WITH SMT. BIMLA DEVI, IS THE DEPOSIT WITH YOGINDERA FINANCE LTD. MRS. VEENA GUPTA HAS SU FFICIENT BANK BALANCE RIGHT FROM THE BEGINNING OF THE YEAR AND TILL HER I NVESTMENT WITH THE ASSESSEE. THEY HAVE CONFIRMED THE TRANSACTION. ASSE SSEE HAS ALLOTTED THE SHARES TO THEM AND ALSO INFORMED THE ROC WHICH INDI CATES THE GENUINENESS OF THE TRANSACTION. ON THE OTHER HAND, LEARNED DR R ELIED UPON THE ORDERS OF THE REVENUE AUTHORITIES BELOW. 11. WE HAVE DULY CONSIDERED THE RIVAL CONTENTIONS A ND GONE THROUGH THE RECORD CAREFULLY. ON PERUSAL OF THE FINDINGS OF THE LEARNED CIT(APPEALS), EXTRACTED SUPRA, WE ARE OF THE VIEW THAT LEARNED FI RST APPELLATE AUTHORITY FAILED TO CONSTRUE THE TRUE PROPOSITION OF LAW PROP OUNDED BY THE HON'BLE DELHI HIGH COURT IN THE CASE OF OASIS HOSPITALITIES (P) LTD. REPORTED IN 238 CTR 402 REFERRED BY THE LEARNED FIRST APPELLATE AUT HORITY. ACCORDING TO THE UNDERSTANDING OF LEARNED FIRST APPELLATE AUTHOR ITY THAT IF SOMEBODY IS NOT HAVING PAN THEN HIS IDENTITY WOULD BE CONSTRUED AS NON-EXISTENCE. THE ASSESSEE WAS EMPHASIZING THAT SMT. BIMLA DEVI HAS M ADE THE INVESTMENT OF 13 RS.1,50,000. SHE IS NOT AN INCOME-TAX ASSESSEE ACCO RDING TO HER OWN DECLARATION. IN SUCH SITUATION, CAN HER IDENTITY BE NOT ESTABLISHED BY OTHER EVIDENCE. LEARNED FIRST APPELLATE AUTHORITY FAILED TO LOOK INTO THIS ASPECT. WITH REGARD TO MRS. VEENA GUPTA, LEARNED FIRST APPE LLATE AUTHORITY HAS OBSERVED THAT HER CREDITWORTHINESS COULD NOT BE PRO VED. THE ASSESSEE HAS POINTED OUT THAT A SUM OF RS.35 LACS WERE AVAILABLE IN HER BANK ACCOUNT ON 8.4.2005. HER HUSBAND HAS GIVEN FURTHER MONEY AND T HE CREDIT BALANCE IN HER ACCOUNT SWOLLEN TO RS.40,64,919. IN SUCH SITUATION, HOW THE LEARNED FIRST APPELLATE AUTHORITY CAN SAY THAT HER CREDITWORTHINE SS IS DOUBTFUL. SHE IS HAVING THE PAN. PERUSAL OF HER ACCOUNT WOULD REVEAL THAT SUM OF RS.11,44,592 WAS AVAILABLE IN HER ACCOUNT ON 9.3.20 04. ON 9.11.2004, THERE WAS AN AMOUNT OF RS.33,11,829, NO DOUBT THERE WERE DEPOSITS AND WITHDRAWALS IN BETWEEN BUT ULTIMATELY THE INVESTMEN T WITH THE ASSESSEE WAS MADE IN FEBRUARY 06, PRIOR TO THIS DATE THERE WAS C ONSIDERABLE AMOUNTS AVAILABLE IN HER ACCOUNT WHICH WAS THEREFROM THE LA ST MORE THAN ONE YEAR. SIMILARLY, SUBSEQUENT TO THIS INVESTMENT ON 14.2.20 07, AN AMOUNT OF RS.14,93,982 IS AVAILABLE IN HER ACCOUNT. THIS INDI CATES HER CREDITWORTHINESS AND LEARNED CIT(APPEALS) WITHOUT LOOKING INTO THIS EVIDENCE HAS OBSERVED THAT HER CREDITWORTHINESS WAS NOT PROVED BY THE ASS ESSEE. CONSIDERING THE EVIDENCE PLACED ON RECORD, WE ARE OF THE VIEW THAT ASSESSEE HAS DISCHARGED 14 ITS ONUS AND NO ADDITION DESERVES TO BE MADE IN ITS HANDS. THIS GROUND OF APPEAL IS ALLOWED AND THE ADDITION OF RS.41,50,000 IS DELETED. 12. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. DECISION PRONOUNCED IN THE OPEN COURT ON 16.12.201 1 SD/- SD/- ( K.G. BANSAL ) ( RAJPAL YADAV ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 16 /12/2011 MOHAN LAL COPY FORWARDED TO: 1) APPELLANT 2) RESPONDENT 3) CIT 4) CIT(APPEALS) 5) DR:ITAT ASSISTANT REGISTRAR