M/s. Subhashree Enterprises, Sambalpur V. DCIT, Circle-1(1), Sambalpur

ITA 35/CTK/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 7166 (ITAT-CUTTACK)
• Duration Of Justice: 1 year(s) 1 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-03-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 22-03-2017
• Assessment Year: 2011-2012
• Appeal Filed On: 10-02-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D K PRADHAN
• Assessee Lawyers: M UDAYPURIABINOD AGARWAL
• Keywords: Unexplained cash credit; Onus to prove
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CUTTACK SMC BENCH, CUTTACK BEFORE SHRI N.S SAINI, ACCOUNTANT MEMBER ITA NO.35 /CTK/2016 ASSESSMENT YEAR : 2011 - 12 M/S. SUBHASHREE ENTERPRISES, AT/PO: RENGALI, DIST: SAMBALPUR VS. DCIT, CIRCLE 1(1), SAMBALPUR PAN/GIR NO. ABIFS 1109 D (APPELLANT ) .. ( RESPONDENT ) ASSESSEE BY : SHRI M.UDAYPURIA/BINOD AGARWAL, AR REVENUE BY : SHRI D.K.PRADHAN , DR DATE OF HEARING : 22 /03 / 2017 DATE OF PRONOUNCEMENT : 22 /03 / 2017 O R D E R THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A) - CUTTACK, DATED 23.11.2015 , FOR THE ASSESSMENT YEAR 2011 - 12 . 2. THE SOLE ISSUE INVOLVED IN THIS APPEAL IS THAT THE LD CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.10,00,000/ - UNDER SECTION 68 OF THE ACT MADE BY THE ASSESSING OFFICER . 3. I HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF LOWER AUTHORITIES AND MATERIALS AVAILABLE ON RECORD. IN THE INSTANT CASE, THE ASSESSEE CLAIMED TO HAVE RECEIVED RS.10,00,000/ - FROM M/S. EPSON 2 ITA NO.35/CTK/2016 ASSESSMENT YEAR : 2011 - 12 MAR KETING PVT LTD.,. THE ASSESSING OFFICER OBSERVED THAT M/S. EPSON MARKETING PVT LTD., RECEIVED LOAN FROM SABITA TULSHYAN OF RS.10 LAKHS AND IN TURN ADVANCED RS.10,00,000/ - TO THE ASSESSEE. THE ASSESSING OFFICER HELD THAT THE AMOUNT RECEIVED FROM SABITA TULSHYAN BY THE LOAN CREDITOR COMPANY WAS AN UNKNOWN PERSON AND THE PURPOSE OF SUCH RECEIPTS WAS NOT EXPLAINED. THEREFORE, HE TREATED THE LOAN OF RS.10 LAKHS AS UNEXPLAINED CREDIT AND ADDED THE SAME TO THE INCOME OF THE ASSESSEE. 4. ON APPEAL, THE CIT(A) CONFIRMED THE ACTION OF THE ASSESSING OFFICER. 5. BEFORE ME, LD AUTHORISED REPRESENTATIVE OF THE ASSESSEE SUBMITTED THAT THE ASSESSEE RECEIVED LOAN OF RS.10 LAKHS FROM M/S. EPSON MARKETING PVT LTD., THE ASSESSEE FILED THE LOAN CONFIRMATION, PAN NO. AND O THER PARTICULARS TO PROVE THE GENUINENESS OF TRANSACTION, IDENTITY OF THE LOAN CREDITORS AND CREDITWORTHINESS OF THE LOAN CREDITORS. THE ASSESSEE HAS FULFILLED ALL THE THREE INGREDIENTS AND DISCHARGED ITS BURDEN U/S.68 OF THE ACT. THE ASSESSING OFFICER W AS NOT JUSTIFIED IN MAKING ADDITION OF RS.10 LAKHS U/S.68 OF THE ACT ON THE GROUND THAT SABITA TULSHYAN FROM WHOM THE LOAN CREDITOR RECEIVED THE UNSECURED LOAN DID NOT EXPLAIN THE PURPOSE OF THE RECEIPT. HE SUBMI TTED THAT AS PER LAW, THE ASSESSEE WAS REQ UIRED TO EXPLAIN THE SOURCE OF CREDIT OF RS.10 LAKHS IN HIS BOOKS OF ACCOUNT AND NOT THE SOURCE OF THE SOURCE. THEREFORE, THE ADDITION MADE BY THE ASSESSING OFFICER AND CONFIRMED BY THE CIT(A) CANNOT BE SUSTAINED IN LAW AND SAME SHOULD BE DELETED. 3 ITA NO.35/CTK/2016 ASSESSMENT YEAR : 2011 - 12 6. ON THE OTHER HAND, LD DEPARTMENTAL REPRESENTATIVE SUPPORTED THE ORDERS OF LOWER AUTHORITIES. 7. I FIND THAT IN THE INSTANT CASE, THE ASSESSEE RECEIVED LOAN OF RS.10 LAKHS FROM M/S. EPSON MARKETING PVT LTD., THE ASSESSING OFFICER OBSERVED THAT THE LOAN CREDIT OR HAS RECEIVED RS.10 LAKHS FROM SABITA TULSHYAN, AN UNKNOWN PERSON AND THE PURPOSE OF SUCH RECEIPT COULD NOT BE EXPLAINED BY THE SAID COMPANY. HENCE, HE TREATED THE LOAN OF RS.10 LAKHS AS UNEXPLAINED CREDIT IN THE HANDS OF THE ASSESSEE. 8. ON APPEAL, THE CIT(A) CONFIRMED THE SAME. 9. THE CONTENTION OF LD AUTHORISED REPRESENTATIVE OF THE ASSESSEE IS THAT IN LAW, THE ASSESSEE IS REQUIRED TO EXPLAIN THE SOURCE OF SUCH CREDIT AND NOT THE SOURCE OF SOURCE. HE ARGUED THAT HE HAS EXPLAINED THE IDENTITY OF THE L OAN CREDITOR, GENUINENESS OF THE TRANSACTION AND CREDITWORTHINESS OF THE LOAN CREDITORS AND HAS DISCHARGED ITS BURDEN U/S.68 OF THE ACT AND THEREFORE, THE ADDITION MADE OF RS.10 LAKHS CANNOT BE SUSTAINED IN LAW. I FIND THAT HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. SHIV DHOOTI PEARLS & INVESTMENT IN ITA NO.429/2003 ORDER DATED 21.12.2015 HAS HELD THAT WHERE THE ASSESSEE HAS DISCHARGED ITS ONUS TO PROVE THE CREDITWORTHINESS AND GENUINENESS OF THE LENDER, THERE WAS NO REQUIREMENT IN LAW FOR THE ASSESSE E TO PROVE THE GENUINENESS AND CREDITWORTHINESS OF THE SUB - CREDITOR. I FIND THAT THE FACTS IN THE PRESENT CASE ARE IDENTICAL TO THE FACTS DECIDED BY THE HONBLE DELHI HIGH COURT IN THE CASE OF SHIV DHOOTI PEARLS & INVESTMENT (SUPRA). RESPECTFULLY FOLLOWI NG THE SAME, I SET ASIDE THE ORDERS 4 ITA NO.35/CTK/2016 ASSESSMENT YEAR : 2011 - 12 OF LOWER AUTHORITIES AND DELETE THE ADDITION OF RS.10 LAKHS MADE U/S.68 OF THE ACT AND ALLOW THE GROUND OF APPEAL OF THE ASSESSEE. 10. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRO NOUNCED IN THE OPEN COURT ON 22 /03 /2017 IN THE PRESENCE OF PARTIES. SD/ - ( N.S SAINI) A CCOUNTANT MEMBER CUTTACK; DATED 2 2 /03 /2017 B.K.PARIDA, SPS COPY OF THE ORDER FORWARDED TO : BY ORDER, SR.PRIVATE SECRETARY ITAT, CUTTACK 1. THE APPELLANT : M/S. SUBHASHREE ENTERPRISES, AT/PO: RENGALI, DIST: SAMBALPUR 2. THE RESPONDENT. DCIT, CIRCLE 1(1), SAMBALPUR 3. THE CIT(A) CUTTACK 4. PR.CIT CUTTACK 5. DR, ITAT, CUTTACK 6. GUARD FILE. //TRUE COPY//