Subhash Chand, Karnal V. ITO, Karnal

ITA 3496/DEL/2012

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 69617 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 4 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-11-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: G
• Next Hearing Date: 13-05-2013
• Assessment Year: 2005-2006
• Appeal Filed On: 03-07-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: BHIM SINGH SENIOR
• Keywords: Income from undisclosed sources; Reassessment proceedings
• Section: 68; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH G : NEW DELHI) BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI B.C. MEENA, ACCOUNTANT MEMBER ITA NO.3496/DEL./2012 (ASSESSMENT YEAR : 2005-06) SHRI SUBASH CHAND, VS. ITO, WARD 4, S/O SHRI HUKUM CHAND, KARNAL. INDRI, KARNAL. (PAN : AJYPC9163F) ITA NO.3497/DEL./2012 (ASSESSMENT YEAR : 2005-06) SMT. SAVITA NAGPAL, VS. ITO, WARD 4, W/O SHRI VED PRAKASH, KARNAL. INDRI, KARNAL. (PAN : AHFPN4043A) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI GURJEET SINGH, CA REVENUE BY : SHRI BHIM SINGH, SENIOR DR ORDER PER B.C. MEENA, ACCOUNTANT MEMBER : BOTH THESE APPEALS OF THE TWO ASSESSEES EMANATE FRO M THE ORDER OF THE CIT (APPEALS), KARNAL DATED 15.03.2012 FOR THE ASSESSMENT YEAR 2005-06. ITA NO.3496/DEL/2012 2. SHRI SUBHASH CHAND AND SMT. SAVITA NAGPAL PURCHA SED AGRICULTURAL LAND MEASURING 41 KANAL 19 MARLAS AT VILLAGE PHOOSG ARH FOR RS.53 LAKHS ITA NO.3496 & 3497/DEL/2012 2 INCLUDING STAMP DUTY OF RS.3 LAKHS AS PER REGISTERE D DEED DATED 21.10.2004. BOTH SMT. SUBHASH CHAND AND SMT. SAVITA NAGPAL PAID RS.26,50,000/- EACH FOR THEIR OWN SHARE. AS PER THE RECORDS, BOTH THESE PERSONS WERE NOT ASSESSED TO INCOME-TAX FOR ASSESSM ENT YEAR 2005-06, THEREFORE, NOTICE U/S 148 OF THE INCOME-TAX ACT, 19 61 WAS ISSUED ON 21.05.2008. BOTH THESE PERSONS FILED RETURN OF INCO ME DECLARING NIL INCOME AND HAVE SHOWN ONLY AGRICULTURAL INCOME. SHR I SUBHASH CHAND HAS SHOWN RS.90,000/- AND SMT. SAVITA NAGPAL HAS SH OWN RS.35,000/- AS AGRICULTURAL INCOME. SHRI SUBHASH CHAND SUBMITTED T HE DETAILS OF THE SOURCE FROM WHERE THIS INVESTMENT IN THE LAND WAS M ADE :- (I) SELF RS. 2,50,000/- (II) WIFE, SMT. SHAKUNTLA RS. 2,50,000/- LOAN RAISED FROM : (III) RAJ PAL S/O HARI SINGH, R/O BIBIPUR JATTAN RS.14,00,000/- (IV) SURTA RAM S/O RATTI RAM, R/O BIBIPUR JATTANR S. 3,00,000/- (V) CHANDER PARKASH S/O SHYAM LA, R/O INDRI RS. 2,00,000/- (VI) ASHISH KUMAR S/O BISHAN DASS R/O INDRI RS. 2,50,000/- RS.26,50,000/- THE ASSESSING OFFICER MADE THE FOLLOWING ADDITIONS IN THE INCOME OF THE ASSESSEE :- (I) SELF RS. 50,000/- (II) RAJ PAL RS.3,40,410/- (III) CHANDER PARKASH RS.1,52,980/- (IV) ASHISH KUMAR RS. 71,110/- RS.6,14,500/- ITA NO.3496 & 3497/DEL/2012 3 THE CIT (APPEALS) GRANTED PART RELIEF. 3. NOW THE ASSESSEE, SHRI SUBHASH CHAND IS IN APPEA L BEFORE US IN ITA NO.3496/DEL/2012 BY TAKING THE FOLLOWING GROUND S OF APPEAL ;- 1. BECAUSE THE ACTION FOR THE INITIATION CONTINUAT ION AND CONCLUSION OF REASSESSMENT PROCEEDINGS U/S 148 ARE BEING CHALLENGED ON FACT AND LAW. 2. BECAUSE THE ACTION FOR UPHOLDING THE ADDITION FO R RS.30,000/- IS BEING CHALLENGED ON FACTS AND LAW, S INCE HAVING TREATED THE SAME SOURCE OF INVESTMENT AS PARTIALLY EXPLAINED. 3. BECAUSE THE ACTION FOR UPHOLDING THE ADDITION FO R RS.340,410/- FROM RAJ PAL IS BEING CHALLENGED ON FA CTS AND LAW, SINCE HAVING TREATED THE RECEIPTS FROM THE SAME SOU RCE AS PARTIALLY EXPLAINED FOR MAKING THE INVESTMENT IN PU RCHASE OF LAND. 4. BECAUSE THE ACTION FOR UPHOLDING THE ADDITION FO R RS.1,52,980/- FROM CHANDER PARKASH IS BEING CHALLEN GED ON FACTS AND LAW, SINCE HAVING TREATED THE RECEIPTS FROM THE SAME SOURCE AS PARTIALLY EXPLAINED FOR MAKING THE INVESTMENT IN PURCHASE OF LAND. 5. BECAUSE THE ACTION FOR UPHOLDING THE ADDITION FO R RS.71,110/- FROM ASHISH KUMAR IS BEING CHALLENGED O N FACTS AND LAW, SINCE HAVING TREATED THE RECEIPTS FROM THE SAM E SOURCE AS PARTIALLY EXPLAINED FOR MAKING THE INVESTMENT IN PU RCHASE OF LAND. PRAYER: I) FOR A DECISION IN PURSUANCE TO THE RATIO OF CIT VS. VIKAS CHEMI GUM INDIA (2005) 276 ITR 32 (P&H), RELEVANT P G. 36, WOOL COMBER OF INDIA LTD. VS. WOOLCOMBERS AIR 1973 SC 2758. II) FOR ANY CONSEQUENTIAL RELIEF AND OR LEGAL CLAI M ARISING OUT OF THIS APPEAL BEFORE THE DISPOSAL OF THE SAME AND FOR ANY ADDITION, DELETION, AMENDMENT AND MODIFICATION IN T HE INTEREST OF SUBSTANTIAL JUSTICE. ITA NO.3496 & 3497/DEL/2012 4 4. GROUND NO.1 IS GENERAL IN NATURE AND IT WAS NOT PRESSED AT THE TIME OF HEARING, HENCE SAME IS DISMISSED. 5. IN THE GROUND NO.2, THE ISSUE INVOLVED IS UPHOLD ING THE ADDITION OF RS.30,000/-. WHILE SUBMITTING THE SOURCE OF THE INV ESTMENT, THE ASSESSEE HAS SUBMITTED THAT RS.2,50,000/- WAS FROM ASSESSEE S OWN SOURCE. ASSESSEE OWNS FOUR ACRES OF AGRICULTURAL LAND WHICH WAS GIVEN ON THEKA FOR WHICH RS.2 LACS WAS RECEIVED FROM SHRI VED PAL, S/O SHRI NEKI RAM. THE ASSESSING OFFICER TREATED RS.2 LAKHS RECEIVED F ROM SHRI VED PAL AS EXPLAINED AND ADDED RS.50,000/- AS UNEXPLAINED. THE CIT (A) DELETED THE ADDITION UP TO RS.20,000/- AND SUSTAINED THE ADDITI ON OF RS.30,000/-. 6. LD. AR SUBMITTED THAT ON THE FACTS AND IN THE CI RCUMSTANCES THE LD AO HAS ERRED BOTH ON LAW AND FACTS BY MAKING ADDITI ON OF RS. 50000.00 OUT OF FUNDS INTRODUCED BY THE ASSESSEE FOR THE PUR POSE OF AGRICULTURAL LAND DESPITE FURNISHING OF REQUISITE DETAILS AND IN FORMATION OF SUFFICIENT INCOME BY THE ASSESSEE. HE SUBMITTED THAT THE ASSES SEE HAS INVESTED A SUM OF RS.2,50,000/- OUT OF HIS OWN. HE SUBMITTED T HAT THE SOURCES OF RS.2,50,000/- WERE RS.2,00,000/- RECEIVED AS THEKA MONEY FROM SH. YED PARKASH TOWARDS HIS 4 ACRES OF LAND WHICH WAS CORRO BORATED WITH THE WITHDRAWAL OF IDENTICAL AMOUNT BY SH. YED PARKASH F OR PAYMENT TO THE ASSESSEE. HE SUBMITTED THAT THE BALANCE RS.50,000.0 0 WAS PAID OUT OF SAVINGS ACCUMULATED BY THE ASSESSEE, WHO IS A PUREL Y AGRICULTURIST AND OWNS AGRICULTURAL LAND MEASURING 4 ACRES IN HIS NAM E AND HIS OTHER ITA NO.3496 & 3497/DEL/2012 5 IMMEDIATE FAMILY OWNS AROUND 20 ACRES OF LAND AND H AS DECLARED AN AGRICULTURAL INCOME OF RS.90,000/- DURING ASSESSMEN T YEAR 2007-08. HE SUBMITTED THAT THE AO HAS TREATED THE SAME AS UNEXP LAINED, WITHOUT TAKING THE COGNIZANCE THAT THE ASSESSEE HAS NEVER B EEN ASSESSED TO INCOME TAX, AS HE IS AN AGRICULTURIST, THEREFORE, HE DID N OT KNOW THE PROCEDURE OF INVESTMENT INTO AN ASSET AS PER INCOME TAX ACT NEIT HER HE WAS REQUIRED TO DO. HE SUBMITTED THAT A PERSON OF THE AGE OF AROUN D 45 YEARS HAVING PUT ALMOST 25 YEARS OF HIS YOUTH IS EXPECTED TO HAVE A SAVING OF RS.50,000/- WHICH HE HAS INVESTED IN PURCHASING THE LAND. HE P LEADED TO DELETE THE ADDITION. LD. DR RELIED ON THE ORDERS OF THE AUTHOR ITIES BELOW. 7. WE HAVE HEARD BOTH THE SIDES ON THIS ISSUE. THE ASSESSEE HAS SHOWN A SOURCE OF RS.2,50,000/- FOR HIS OWN SOURCE. RS.2 LACS WAS RECEIVED BY THE ASSESSEE BY THEKA OF LAND GIVEN TO SHRI VED PAL AND VED PAL HAS ALSO SHOWN SOURCE OF THAT. BUT THE ASSESSEE HAS FAILED T O PROVIDE RELEVANT DOCUMENTS WITH REGARD TO GIVING INFORMATION TO THE EXTENT OF PERSONAL SAVINGS OF RS.50,000/-, THEREFORE, WE ARE UNABLE TO EXTEND THE BENEFIT BEYOND RS.20,000/- AS ALLOWED BY THE CIT (A). ACCOR DINGLY, WE SUSTAIN THE ADDITION OF RS.30,000/- MADE BY THE CIT (A). TH IS GROUND IS DISMISSED. 8. IN THE GROUND NO.3, THE ISSUE INVOLVED IS UPHOLD ING THE ADDITION OF RS.3,40,410/- FROM SHRI RAJ PAL. THE ASSESSEE HAS SHOWN LOAN RAISED FROM RAJ PAL, S/O SHRI HARI SINGH, R/O BIBIPUR JATT AN OF RS.14 LAKHS ITA NO.3496 & 3497/DEL/2012 6 WHILE EXPLAINING THE SOURCE OF THE SOURCE. THE ASS ESSING OFFICER ACCEPTED RS.10,69,500/- AS EXPLAINED. THUS, THE ASS ESSING OFFICER PARTLY ACCEPTED THE EXPLANATION AND MADE AN ADDITION OF RS .3,40,410/-. THE CIT (A) HAS SUSTAINED THE ADDITION BY HOLDING AS UNDER :- 2.02 THE SUBMISSIONS OF THE APPELLANT IS CONSIDERE D. AT THE OUTSET, IT IS NOTED THAT WHY A PERSON WOULD TAKE LO AN FOR GIVING INTEREST FREE ADVANCES TO A THIRD PERSON. FU RTHER, THE CREDITOR WAS REQUIRED SUBSTANTIAL FUNDS TO CARRY OU T AGRICULTURE ON LAND MEASURING 25 ACRES IN THE FORM OF PURCHASE OF SEEDS, FERTILIZER, PESTICIDES, PAYMENT TO LABOUR, OF ELECTRICITY AND POWER BILLS, DIESEL; TO MAINTAIN AGRICULTURAL IMPLEMENTS INCLUDING TRACTOR ETC. BESIDES FUNDS REQ UIRED FOR MEETING VARIOUS HOUSEHOLD AND PERSONAL EXPENSES. TH E PLEA OF THE APPELLANT OF AVAILABILITY OF THE AMOUNT RECE IVED AGAINST THE SUPPLY OF SUGARCANE IS, THEREFORE, DIFF ICULT TO APPRECIATE THAT THE SAME WOULD BE AVAILABLE WITH TH E CREDITOR SPECIFICALLY IN VIEW OF THE FACT THAT NO EVIDENCE H AS BEEN BROUGHT ON RECORD TO ESTABLISH THE AVAILABILITY OF THAT AMOUNT. HAD THE AMOUNT BEEN AVAILABLE, THERE WOULD BE NO NEED TO BORROW THE FUNDS FROM THE BANK. THE AO IS A LREADY LIBERAL TO ALLOW THE BENEFIT OF AMOUNT RECEIVED FRO M 1.4.2004 ONWARDS AND HENCE, THE ACTION OF THE AO OF HOLDING THE AMOUNT RECEIVED PRIOR TO THAT DATE AS UNEXPLAINED IS HEREBY CONFIRMED. 9. LD. AR SUBMITTED THAT FOR MAKING THE IMPUGNED IN VESTMENT IN LAND, THE ASSESSEE HAS TAKEN A LOAN OF RS.14,00,000 /- FROM SH. RAJ PAL WHO IS ALSO AN AGRICULTURIST. HE SUBMITTED THAT THE SOURCE OF MAKING THE LOAN WITH SH. RAJ PAL WAS RS.6,99,550/- WITHDRAWN F ROM HIS KISSAN CREDIT CARD ON20/21.09.2004 WHICH HAS BEEN ACCEPTED BY THE ASSESSING OFFICER. THE BALANCE RS.7,00,450/- WAS PAID OUT OF PROCEEDS OF RS.7,53,862.50 BEING SALE PROCEEDS OF SUGAR CANE FR OM INDRI CANE ITA NO.3496 & 3497/DEL/2012 7 GROWER COOPERATIVE SOCIETY LIMITED RECEIVED FROM 08 .12.2002 TO 14.05.2004 WHICH WAS HELD AS CASH BY SH. RAJ PAL. HE SUBMITTED THAT OUT OF THIS THE CREDIT RECEIVED BY SH. RAJ PAL FROM IND RI CANE GROWER COOPERATIVE SOCIETY LIMITED DURING FY 2004-05, THE AO HAS ALLOWED ONLY RS.3,60,040/- AND BALANCE RS.3,93,822.50 RECEI VED FROM INDRI CANE GROWER COOPERATIVE SOCIETY LIMITED FOR THE PERIOD P ERTAINING TO 08.12.,2002 TO 31.03.2004 WAS DISALLOWED. LD. AR SU BMITTED THAT OUT OF THIS RS.3,93,822.50, RS.2,35,122.80 WAS RECEIVED TO THE ASSESSEE DURING 16.02.2004 TO 07.03.2004 AND THE BALANCE WAS SAVING S ACCUMULATED WITH SH. RAJ PAL OUT OF HIS AGRICULTURAL INCOME AND SALE PROCEEDS RECEIVED FROM INDRI CANE GROWER COOPERATIVE SOCIETY LIMITED WHICH HAS BEEN REJECTED BY THE AO WITHOUT ANY REASON OR RHYMES, ME RELY ON CONJECTURES. LD. AR SUBMITTED THAT BEFORE THE AUTHORITIES BLOW, THE ASSESSEE HAS PROVED ALL THE THREE REQUIREMENTS OF CREDITOR I.E. IDENTITY OF THE CREDITOR, CAPACITY TO PAY AND GENUINENESS OF THE TRANSACTION. LD. AR SUBMITTED THAT THE AUTHORITIES BELOW HAVE ACCEPTED ALL THESE THREE REQUIREMENTS. EVEN THE SOURCE OF SOURCE WAS ALSO EXPLAINED. LD. A R SUBMITTED THAT THE AUTHORITIES BELOW FOR THE SAKE OF MAKING ADDITIONS MADE SUPERFICIAL ASSUMPTIONS AND HAS REJECTED THE PART PAYMENTS RECE IVED BY SH. RAJ PAL DURING THE PERIOD 08.12.2002 TO 31.03.2004. HE SUB MITTED THAT THE AUTHORITIES BELOW HAVE NOT PLACED ON RECORD ANY FIN DING THAT SH. RAJ PAL HAS UTILIZED THE AMOUNT OF AGRICULTURAL INCOME SAVI NG IN OTHER INVESTMENTS ITA NO.3496 & 3497/DEL/2012 8 OR FOR ANY OTHER PURPOSES. IN VIEW OF ABOVE, LD. A R SUBMITTED THAT THE ADDITION IS WRONG ON FACTS OF THE CASE AND THEREFOR E, HE PLEADED TO DELETE THE SAME. LD. DR RELIED ON THE ORDERS OF THE AUTHOR ITIES BELOW. 10. WE HAVE HEARD BOTH THE SIDES ON THIS ISSUE. THE ASSESSING OFFICER HIMSELF HAS ACCEPTED THE MAJOR PORTION OF THE LOAN RECEIVED FROM RAJ PAL AND MADE ONLY PART ADDITION, THUS THE IDENTITY OF T HE RAJ PAL WAS PROVED AND ESTABLISHED BEYOND ANY DOUBT. SINCE THE ASSESSI NG OFFICER HAS ALSO ACCEPTED THE CREDITWORTHINESS OF RAJ PAL BY ACCEPTI NG THE SOURCE TO THE EXTENT OF RS.10,69,590/-. THE GENUINENESS OF THE TR ANSACTION HAS NOT BEEN IN DOUBT AND THE ADDITION CANNOT BE SUSTAINED ONLY ON THE PRESUMPTION THAT WHY A PERSON WOULD TAKE LOAN FOR GIVING INTERE ST FREE ADVANCE TO OTHER PERSON. IT MAY BE AN APPREHENSION BUT IT CANN OT BE MADE BASIS FOR SUSTAINING THE ADDITION WHEN THE IDENTITY OF THE PE RSON IS WELL ESTABLISHED THAT TOO WHEN THE PERSON WAS ALSO HAVING AGRICULTUR AL LAND MEASURING 25 ACRES. RAJ PAL WAS ALSO CARRYING THE KISSAN CREDIT CARD AND GROWING SUGAR CANE IN HIS FIELDS. THEREFORE, WE FIND NO MER IT IN SUSTAINING THE ADDITION AND DIRECT TO DELETE THE SAME. THIS GROUND IS ALLOWED. 11. IN THE GROUND NO.4, THE ISSUE IS FOR SUSTAINING THE ADDITION OF RS.1,52,980/- TAKEN FROM CHANDER PARKASH. THE ASSES SEE HAS SHOWN A LOAN OF RS.2 LAKHS FROM SHRI CHANDER PARKASH, S/O S HYAM LAL, R/O INDRI. THE ASSESSING OFFICER MADE THE PART ADDITION OF RS. 1,52,980/-. THE CIT (A) SUSTAINED THE SAME. ITA NO.3496 & 3497/DEL/2012 9 12. LD. AR SUBMITTED THAT THE ASSESSEE HAS TAKEN A LOAN OF RS.2,00,000/- FROM SH. CHANDER PARKASH WHO IS ALSO AN AGRICULTURIST. THE SOURCE OF LOAN WAS THEKA MONEY OF AGRICULTURAL LAND MEASURING 5 ACRES OF FOR A PERIOD OF 3 YEARS TO SH. MAN SINGH AND SH. BH ARAT SINGH. HE SUBMITTED THAT THE SOURCE OF SOURCE I.E. OF SH. MAN SINGH AND SH. BHARAT SINGH WAS ALSO EXPLAINED BEFORE THE AUTHORITIES BEL OW. THE PAYMENT OF RS.2,00,000/- WAS MADE BY SH. MAN SINGH AND SH. BHA RAT SINGH TO SH. CHANDER PARKASH WAS MADE OUT OF PROCEEDS OF RS.2,08 ,581.81 BEING SALE PROCEEDS OF SUGAR CANE RECEIVED FROM INDRI CANE GRO WER COOPERATIVE SOCIETY LIMITED FROM 22.01.2004 TO 04.05.2004. HE S UBMITTED THAT THE ASSESSEE HAS PROVED ALL THE THREE REQUIREMENTS OF C REDITOR I.E. IDENTITY OF THE CREDITOR, CAPACITY TO PAY AND GENUINENESS OF TH E TRANSACTION AND THE AUTHORITIES BELOW HAS ACCEPTED ALL THESE THREE. HE SUBMITTED THAT EVEN THE SOURCE OF SOURCE WAS ALSO EXPLAINED. IN VIEW OF AB OVE, LD. AR SUBMITTED THAT THE ADDITION OF RS.1,52,980/- IS WRONG ON FACT S OF THE CASE AND THEREFORE, PLEADED THAT THE ADDITION OF RS.1,52,980 /- MAY BE DELETED. LD. DR RELIED ON THE ORDERS OF THE AUTHORITIES BELOW. 13. WE HAVE HEARD BOTH THE SIDES ON THIS ISSUE. THE ASSESSING OFFICER HIMSELF HAS ACCEPTED PART OF THE LOAN AS GENUINE FR OM CHANDER PRAKASH. THE CIT (A) HAS CONFIRMED THE ADDITION ONLY ON THE PRESUMPTION BASIS THAT HOW THE FUNDS RECEIVED AGAINST THE SUPPLY OF S UGARCANE COULD BE AVAILABLE SINCE THE AMOUNT HAS TO BE SPENT ON CARRY ING OUT VARIOUS ITA NO.3496 & 3497/DEL/2012 10 AGRICULTURAL OPERATIONS AND TO MEET OUT VARIOUS HOU SEHOLD AND PERSONAL EXPENSES. IN OUR CONSIDERED VIEW, ONCE THE IDENTITY OF THE PERSON IS WELL ESTABLISH AND PART OF THE SOURCE OF THE LOAN TAKEN BY ASSESSEE HAS ACCEPTED AS GENUINE THEN WE FIND NO JUSTIFICATION IN SUSTAIN ING THE ADDITION OF RS.1,52,980/- ONLY ON THE BASIS OF SOME APPREHENSIO N AND WITHOUT ANY SPECIFIC AND CONCRETE FINDING THAT THE AMOUNT WAS N OT AVAILABLE FOR GIVING THE LOAN. THEREFORE, WE DIRECT TO DELETE THE SAME. THIS GROUND IS ALLOWED. 14. IN THE GROUND NO.5, THE ISSUE INVOLVED IS SUSTA INING THE ADDITION OF RS.71,110/- FROM THE LOAN TAKEN FROM SHRI ASHISH KU MAR, S/O SHRI BISHAN DASS, INDRI. THE ASSESSEE HAS SHOWN LOAN OF RS.2,50 ,000/- FROM SHRI ASHISH KUMAR. THE ASSESSING OFFICER ACCEPTED PART O F THE LOAN AS GENUINE AND MADE AN ADDITION OF RS.71,110/-. THE CI T (A) HAS SUSTAINED THIS ADDITION. 15. LD. AR SUBMITTED THAT THE ASSESSEE HAS TAKEN A LOAN OF RS.2,50,000/- FROM SH. ASHISH KUMAR FAMILY FRIEND O F THE ASSESSEE. THE SOURCE OF LOAN WAS THEKA MONEY OF AGRICULTURAL LAND MEASURING 12 ACRES OF FOR A PERIOD OF 1 YEAR TO SH. HARBHAZAN SINGH. T HE SOURCE OF SOURCE I.E. OF SH. HARBHAZAN SINGH WAS ALSO EXPLAINED BEFORE TH E AUTHORITIES BELOW. THE PAYMENT OF THE SAID RS.2,50,000/- MADE BY SH. S H. HARBHAZAN SINGH TO SH. ASHISH KUMAR WAS MADE OUT OF PROCEEDS OF RS. 2,77,765.40 BEING SALE PROCEEDS OF SUGAR CANE RECEIVED FROM INDRI CAN E GROWER COOPERATIVE SOCIETY LIMITED FROM 28.01.2004 TO 04.0 5.2004 AND OUT OF WHICH ONLY THE AO HAS ALLOWED RS.1,78,890/- BEING R ECEIVED TO THEM ITA NO.3496 & 3497/DEL/2012 11 FROM INDRI CANE GROWER COOPERATIVE SOCIETY LIMITED FROM THE PERIOD 01.04.2004 TO 04.05.2004 AND DISALLOWED ALL RECEIPT FROM INDRI CANE GROWER COOPERATIVE SOCIETY LIMITED FROM THE PERIOD PERTAINING TO 22.01.2004 TO 31.03.2004 AMOUNTING TO RS.98815.40 A ND MADE AN ADDITION OF RS.71,110/- WHICH WAS SUSTAINED BY THE CIT (A). HE SUBMITTED THAT BEFORE THE AUTHORITIES BELOW, THE AS SESSEE HAS PROVED ALL THE THREE REQUIREMENTS OF CREDITOR I.E. IDENTITY OF THE CREDITOR, CAPACITY TO PAY AND GENUINENESS OF THE TRANSACTION AND THE SAME WAS ACCEPTED. EVEN THE SOURCE OF SOURCE WAS ALSO EXPLAINED. THE LD AO FOR THE SAKE OF MAKING ADDITIONS MADE SUPERFICIAL ASSUMPTIONS AND W ITHOUT REASON OR RHYMES HAS REJECTED THE PAYMENTS RECEIVED BY SH. HA RBHAJAN SINGH DURING THE PERIOD 22.01.2004 TO 31.03.2004. IN VIEW OF ABOVE, HE SUBMITTED THAT THE ADDITION OF RS.71,110/- IS WRONG ON FACTS OF THE CASE AND THEREFORE, PLEADED THAT THE ADDITION OF RS.71,1 10/- MAY BE DELETED. LD. DR RELIED ON THE ORDERS OF THE AUTHORITIES BELO W. 16. WE HAVE HEARD BOTH THE SIDES ON THIS ISSUE. ONC E THE PART OF THE LOAN TAKEN FROM SHRI ASHISH KUMAR HAS BEEN ACCEPTED AS GENUINE, THE IDENTITY OF SHRI ASHISH KUMAR IS WELL ESTABLISHED, THE CREDITWORTHINESS OF SHRI ASHISH KUMAR HAS ALSO BEEN ACCEPTED AND THE TR ANSACTION OF THE LOAN FROM SHRI ASHISH KUMAR HAS BEEN ACCEPTED AS GENUINE , THEN WE FIND NO MERITS IN SUSTAINING THE ADDITION OF RS.71,110/- WH ILE TOTAL LOAN TAKEN WAS OF RS.2,50,000/-. THE AMOUNT HAS BEEN SHOWN AS RECE IVED AGAINST THE ITA NO.3496 & 3497/DEL/2012 12 SUPPLY OF SUGARCANE. IN VIEW OF THESE FACTS, WE DIR ECT TO DELETE THE SAME AND THE GROUND IS ACCORDINGLY ALLOWED. 17. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE , SHRI SUBHASH CHAND IN ITA NO.3496/DEL/2012 IS PARTLY ALLOWED. ITA NO.3497/DEL/2012 18. THE GROUNDS OF APPEAL TAKEN BY THE ASSESSEE, SM T. SAVITA NAGPAL READ AS UNDER :- 1. BECAUSE THE ACTION FOR THE INITIATION CONTINUAT ION AND CONCLUSION OF REASSESSMENT PROCEEDINGS U/ S 148 ARE BEING CHALLENGED ON FACT AND LAW. 2. BECAUSE THE ACTION IS BEING CHALLENGED ON FACTS AND LAW FOR HAVING NOT RETURNED INDEPENDENT FINDINGS FOR TH E PRESENT ASSESSEE AND RELIED UPON THE DECISION OF BROTHER IN LAW SUBASH CHAND APPEAL NO. IT/101/KNL/CIT(A)/ KNL/2009-10 DT. 15.03.2012 . 3. BECAUSE THE ACTION IS BEING CHALLENGED ON FACTS AND LAW FOR AN ADDITION OF RS.63,582/- FROM SELF TREATING T HE SAME AS INCOME FROM UNDISCLOSED SOURCES. 4. BECAUSE THE ACTION IS BEING CHALLENGED ON FACTS AND LAW FOR AN ADDITION OF RS.1,60,945/- FROM HUKAM CHAND T REATING THE SAME AS INCOME FROM UNDISCLOSED SOURCES. 5. BECAUSE THE ACTION IS BEING CHALLENGED ON FACTS AND LAW FOR AN ADDITION OF RS.2,68,552/- FROM SUWARI BAI TR EATING THE SAME AS INCOME FROM UNDISCLOSED SOURCES. 6. BECAUSE THE ACTION IS BEING CHALLENGED ON FACTS AND LAW FOR AN ADDITION OF RS.138,570/- FROM ASHWANI KUMAR TREATING THE SAME AS INCOME FROM UNDISCLOSED SOURCES. 7. BECAUSE THE ACTION IS BEING CHALLENGED ON FACTS AND LAW FOR AN ADDITION OF RS.84,388/- FROM JAI GOPAL TREAT ING THE SAME AS INCOME FROM UNDISCLOSED SOURCES. ITA NO.3496 & 3497/DEL/2012 13 PRAYER: I) FOR A DECISION IN PURSUANCE TO THE RATIO OF CIT VS. VIKAS CHEMI GUM INDIA (2005) 276 ITR 32 (P&H), RELEVANT P G. 36, WOOL COMBER OF INDIA LTD. VS. WOOL COMBERS AIR 1973 SC 2758. II) FOR ANY CONSEQUENTIAL RELIEF AND OR LEGAL CLAI M ARISING OUT OF THIS APPEAL BEFORE THE DISPOSAL OF THE SAME AND FOR ANY ADDITION, DELETION, AMENDMENT AND MODIFICATION IN T HE INTEREST OF SUBSTANTIAL JUSTICE. 19. GROUND NOS.1 & 2 ARE NOT PRESSED AT THE TIME OF HEARING, THEREFORE, SAME ARE DISMISSED FOR NON-PROSECUTION. 20. SMT. SAVITA NAGPAL HAS EXPLAINED THE INVESTMENT IN THE LAND OF RS.26,50,000/- AS UNDER :- (I) SELF RS.1,50,000/- (II) HUSBAND-SH. VED PARKASH RS.2,00,000/- (III) FATHER-IN-LAW RS.5,00,000/- (IV) MOTHER-IN-LAW RS.6,00,000/- LOAN RAISED FROM (V) SHAMSHER SINGH S/O SH. RAJ PAL RS.2,50,000/- (VI) SAME SINGH S/O SH. RAJ PAL RS.2,50,000/- (VII) ASHWANI KUMAR RS.3,00,000/- (VIII) JAI GOPAL RS.4,00,000/- RS.26,50,000/- THE ASSESSING OFFICER HAS MADE THE ADDITION AS INCO ME FROM UNDISCLOSED SOURCES ON ACCOUNT OF THE ABOVE AS UNDER :- (I) SELF RS. 63,582/- (II) SH. HUKAM CHAND RS.1,60,945/- (III) SMT. SUWARI BAI RS.2,68,552/- (IV) SH. ASHWANI RS.1,38,570/- (V) SH. JAI GOPAL RS. 84,388/- THE CIT (A) HAS CONFIRMED THE SAME. 21. IN THE GROUND NO.3, THE ISSUE INVOLVED IS SUSTA INING THE ADDITION OF RS.63,582/- SELF TREATING THE SAME AS INCOME FROM U NDISCLOSED SOURCES. IN ITA NO.3496 & 3497/DEL/2012 14 THE EXPLANATION GIVEN FOR INVESTMENT OF RS.26,50,00 0/-, THE ASSESSEE HAS SHOWN RS.1,50,000/- FROM SELF. THE ASSESSEE OWNED T WO ACRES OF AGRICULTURAL LAND WHICH HAS BEEN GIVEN TO HER BY HE R HUSBAND. 22. WE HAVE HEARD BOTH THE SIDES ON THE ISSUE. AFTE R HEARING, WE FIND THAT THE ASSESSEE HAS NOT GIVEN SATISFACTORY EXPLAN ATION THAT SUCH AMOUNT WAS AVAILABLE WITH HER FOR INVESTMENT. THEREFORE, W E FIND NO MERITS IN THIS AND WE DISMISS THIS GROUND OF ASSESSEES APPEA L. 23. IN THE GROUND NO.4, THE ISSUE INVOLVED IS AGAIN ST SUSTAINING THE ADDITION OF RS.1,60,945/- FROM THE LOAN RAISED FROM SHRI HUKAM CHAND. THE ASSESSING OFFICER ACCEPTED PART OF THIS AMOUNT AS GENUINE AND ONLY MADE AN ADDITION OF RS.1,60,945/-. THE CIT (A) CON FIRMED THE ADDITION. 24. WE HAVE HEARD BOTH THE SIDES. WE FIND THAT THE IDENTITY OF SHRI HUKUM CHAND IS ESTABLISHED BEYOND ANY DOUBT. THE CR EDITWORTHINESS OF SHRI HUKUM CHAND IS ALSO ACCEPTED BY ACCEPTING THE PART OF THE LOAN AS GENUINE. THE GENUINENESS OF THE TRANSACTION IS ALSO ACCEPTED. IN ABSENCE OF ANY CONTRARY EVIDENCE, WE FIND THAT THE ASSESSEE WAS ABLE TO ESTABLISH ALL THREE INGREDIENTS WHICH ARE REQUIRED U/S 68 OF THE INCOME-TAX ACT, 1961. ONLY ON THE BASIS OF APPREHENSION THAT THE PE RSON WHO HAS GIVEN THE LOAN WILL REQUIRE SUBSTANTIAL FUNDS FOR CARRYIN G OUT THE AGRICULTURAL IN THE VARIOUS FORMS OF PURCHASES LIKE SEEDS, FERTILIZ ERS, ETC. HAS NO BASIS TO SUSTAIN SUCH ADDITION. THEREFORE, WE DIRECT TO DELE TE THE SAME. THIS GROUND IS ALLOWED. ITA NO.3496 & 3497/DEL/2012 15 25. IN THE GROUND NO.5, THE ISSUE INVOLVED IS SUSTA INING THE ADDITION OF RS.2,68,552/- ON ACCOUNT OF LOAN FROM SUWARI BAI TR EATING THE SAME AS INCOME FROM UNDISCLOSED SOURCES. THE ASSESSEE HAS S HOWN A LOAN OF RS.6 LAKHS FROM SMT. SUWARI BAI. THE ASSESSING OFFICER ACCEPTE D PART OF THE LOAN AND MADE ADDITION OF RS.2,68,552/-. THE CIT (A) UPHELD THE ADDITION. 26. WE HAVE HEARD BOTH THE SIDES ON THIS ISSUE. WE FIND THAT ASSESSING OFFICER HIMSELF HAS ACCEPTED THE PART OF THE LOAN A S GENUINE. THE IDENTITY OF THE LOAN GIVER IS BEYOND DOUBT. THE GENUINENESS OF THE TRANSACTION IS ALSO PROVED. THEREFORE, IN OUR CONSIDERED VIEW, THE ASSESSEE WAS ABLE TO PROVE ALL THREE INGREDIENTS REQUIRED U/S 68 OF THE INCOME-TAX ACT, 1961 LIKE IDENTITY OF THE CREDITOR, GENUINENESS OF THE T RANSACTION AND CREDITWORTHINESS OF THE CREDITOR. THEREFORE, WE FIN D NO MERITS IN SUSTAINING THE ADDITION AND DIRECT TO DELETE THE SA ME. THIS GROUND IS ALLOWED. 27. IN THE GROUND NO.6, THE ISSUE INVOLVED IS AGAIN ST THE SUSTAINING OF ADDITION OF RS.1,38,570/- OUT OF THE LOAN FROM SHRI ASHWANI KUMAR TREATING THE SAME AS INCOME FROM UNDISCLOSED SOURCE S. THE ASSESSEE HAS SHOWN LOAN OF RS.3 LAKHS FROM SHRI ASHWANI KUMAR. H E OWNS 15 ACRES OF LAND. THE ASSESSING OFFICER ACCEPTED PART OF THE LOAN AS GENUINE AND MADE AN ADDITION OF RS.1,38,570/- WHICH WAS SUSTAIN ED BY THE CIT (A). 28. AFTER HEARING BOTH THE SIDES, WE FIND THAT THE ASSESSEE WAS ABLE TO ESTABLISH THE IDENTITY AND CREDITWORTHINESS OF SHRI ASHWANI KUMAR AND ITA NO.3496 & 3497/DEL/2012 16 GENUINENESS OF TRANSACTION WAS ALSO ESTABLISHED BY THE ASSESSEE WHICH REFLECTS FROM THE ACT OF ASSESSING OFFICER WHERE PA RT OF THE LOAN HAS BEEN ACCEPTED AS GENUINE. IN VIEW OF THESE FACTS, WE FIN D NO MERITS IN SUSTAINING THE ADDITION AND DIRECT TO DELETE THE SA ME. 29. IN THE GROUND NO.7, THE ISSUE INVOLVED IS AGAIN ST SUSTAINING THE ADDITION OF RS.84,388/- FROM JAI GOPAL TREATING THE SAME AS INCOME FROM UNDISCLOSED SOURCES. THE ASSESSEE HAS SHOWN A LOAN OF RS.4 LACS FROM JAI GOPAL. JAI GOPAL HAS AGRICULTURAL LAND MEASURING 10 ACRES. THE ASSESSING OFFICER ACCEPTED MAJOR PORTION OF LOAN AS GENUINE A ND MADE ONLY AN ADDITION OF RS.84,388/- AND THE CIT (A) SUSTAINED T HE ADDITION. 30. WE HAVE HEARD BOTH THE SIDES ON THIS ISSUE. JAI GOPAL OWNS AGRICULTURAL LAND MEASURING 10 ACRES. THUS, THE IDE NTITY OF JAI GOPAL AND CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTION IS ESTABLISHED. WE FIND NO MERITS IN SUSTAINING THE ADDITION. ACCORDIN GLY, THIS GROUND IS ALLOWED. 31. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE , SMT. SAVITA NAGPAL IN ITA NO.3497/DEL/2012 IS PARTLY ALLOWED. 32. TO SUM UP : BOTH THE APPEALS ARE PARTLY ALLOWED . ORDER PRONOUNCED IN OPEN COURT ON THIS 22 ND DAY OF NOVEMBER, 2013. SD/- SD/- (RAJPAL YADAV) (B.C. MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED THE 22 ND DAY OF NOVEMBER, 2013/TS ITA NO.3496 & 3497/DEL/2012 17 COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A), KARNAL. 5.CIT(ITAT), NEW DELHI. AR/ITAT NEW DELHI