Sh. Pawan Jindal, Faridabad V. ITO, Faridabad

ITA 3557/DEL/2011

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 6437 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 8 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-03-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Next Hearing Date: 06-01-2016
• Assessment Year: 2006-2007
• Appeal Filed On: 15-07-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R S NEGI
• Assessee Lawyers: S K BANSAL
• Section: 142(1); 68

Judgement Text

1 ITA NO. 3557/DEL /2011 IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH F, NEW DELHI) BEFORE SHRI G. D. AGRAWAL, VICE PRESIDENT AND SHRI KULDIP SINGH, JUDICIAL MEMBER I.T.A.NO.3557/DEL/2011 (ASSESSMENT YEAR 2006-07 ) PAWAN JINDAL C/O AGRAWAL SANTOSH K & ASSOCIATES R 504, FIRST FLOOR, NEHRU GROUND, NIT, FARIDABAD. AAGPJ5960J VS ITO WARD 1(2) CGO COMPLEX, NH-IV FARIDABAD. (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. S.K. BANSAL, CA REVENUE BY : SH. R. S. NEGI, S R. DR DATE OF HEARING : 06.01.2016 DATE OF PRONOUNCEMENT : 18.03.2016 ORDER PER KULDIP SINGH, JM: THE APPELLANT PAWAN JINDAL HEREINAFTER REFERRED TO AS THE ASSESSEE BY FILING THE PRESENT APPEAL SOUGHT TO SET ASIDE THE IMPUGNED ORDER DATED 01/04/2011 PASSED BY LD. CIT(A ) FARIDABAD ON THE GROUNDS INTER ALIA:- 1. THAT THE ORDER OF THE LD. CIT(APPEALS), FARIDABAD IS BAD IN LAW AND ON FACTS; 2 ITA NO. 3557/DEL /2011 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. FIRST APPELLATE AUTHORITY [CIT(A) FARIDABAD] IS ERRED IN: I. CONFIRMING THE ADDITION MADE OF RS. 8,00,000/- ON ACCOUNT OF LOANS FROM THE FOLLOWING CREDITORS U/S 68 OF THE INCOME TAX ACT, 1961; A) SH. NET RAM GOEL B) SH. ANIL KUMAR BANSAL C) SH. MAHENDER PRATAP SINGH D) DH. AJAY KUMAR JAIN E) SMT. MANJU RANI F) SH. VIRENDER KUMAR G) SH. VIKAS KUMAR JAIN II. CONFIRMING THE ADDITIONS OF RS. 3721/- ON ACCOUNT OF INTEREST PAID TO THE ABOVE REFERRED PERSONS. 3. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(APPEALS) ERRED IN HOLDING: A) THAT THE MAINTENANCE OF BOOKS OF ACCOUNTS BY PERSONS FILING INCOME TAX RETURNS WITH INCOME OF ABOUT RS. 1 LAC IS IMPROBABLE AND AGAINST THE NORMAL HUMAN PROBABILITY. B) THAT THE STATEMENT OF AFFAIRS AND CASH FLOW STATEMENTS OF THE PERSONS REFERRED TO IN (A) ABOVE, CANNOT BE BELIEVED WITHOUT BRINING CONTRARY EVIDENCE ON RECORD. 4. THE APPELLANT CRAVES LEAVE TO ADD, AMEND, ALTER VAR Y AND/OR WITHDRAW ANY OR ALL THE ABOVE GROUNDS OF APPEAL. 2. BRIEFLY STATED THE FACTS OF THIS ARE: - DURING THE PROCESSING OF RETURN OF INCOME FILED BY THE ASSESSEE QUA THE A.Y. 2006-07 THE SAME WAS SUBJECTED TO SCRUTINY AND CONSEQUENT UPON THE NOTICE ISSUED U/S 143(2) AND 142(1) SHRI PANKAJ MITTAL, CHARTERED ACCOUNTANT ATTENDED 3 ITA NO. 3557/DEL /2011 THE PROCEEDINGS ON BEHALF OF THE ASSESSEE FROM TIME TO TIME AND FILED REPLY TO THE QUESTIONNAIRE. THE ASSESSEE IS INTO THE TRADING OF IRON PIPES UNDER THE NAME AND STYLE OF M /S SHIV PIPE & COMPANY. FROM THE SCRUTINY OF THE BOOKS OF ACCOUNT IT HAS COME ON RECORD THAT THE ASSESSEE HAS INTRODUCED UNSECURED LOANS, FOUND TO HAVE BEEN CREDITED IN THE ASSESSEES BANK ACCOUNT NO. 0167002100071263 MAINTAINED WITH PUNJAB NATIONAL BANK, N.I.T. FARIDABAD TO THE TUNE OF RS. 1435000/-. FROM 13 DIFFERENT PERSONS, THE ASSESSEE IN THE PROFIT AND LOSS ACCOUNT HAS DEBITED A SUM OF RS. 21 5388/- ON ACCOUNT OF INTEREST TOWARDS UNSECURED LOANS. HOWEV ER, THE DETAIL OF INTEREST ON THE AFORESAID LOANS @ 15% P.A . TO THE ACCOUNT OF THE AFORESAID 13% COMES TO 17461/-. THE ASSESSING OFFICER FINDING THE EXPLANATION FURNISHED BY THE ASSESSEE UNSATISFACTORY CAME TO THE CONCLUSION THAT THE ASSESSEES UNACCOUNTED MONEY FROM THE UNDISCLOSED S OURCES HAS BEEN ROUTED BY ADOPTING DUBIOUS MEANS AND THERE BY MADE AN ADDITION OF RS. 1567410/- (RS. 1435000/- UN SECURED LOAN + RS. 17461/- INTEREST AMOUNT). 2.1 THE ASSESSEE CARRIED THE MATTER BEFORE THE CIT( A) WHO HAS PARTLY ALLOWED THE APPEAL. FEELING AGGRIEVED, THE ASSESSEE HAS COME UP BEFORE THE TRIBUNAL BY WAY OF FILING TH E PRESENT APPEAL. 2.2 THE LD. AR FOR THE ASSESSEE CHALLENGING THE IMP UGNED ORDER CONTENDED, INTER-ALIA, THAT THE CIT(A) HAS ER RED IN 4 ITA NO. 3557/DEL /2011 CONFIRMING THE ADDITION OF RS. 8 LACS ON ACCOUNT OF LOANS FROM DIFFERENT CREDITORS U/S 68 OF THE ACT; THAT CIT(A) FURTHER ERRED IN CONFIRMING THE ADDITION OF RS. 3721/- ON ACCOUNT OF INTEREST PAID TO THE ABOVE REFERRED PERSONS; THAT THE ASSESS EE HAS ALREADY RETURNED THE ENTIRE LOANS TO HIS CREDITORS BY WAY OF CHEQUES. 2.3 HOWEVER, ON THE OTHER HAND, THE LD. DR RELIED U PON THE ORDER PASSED BY THE LD. CIT(A). 3. UNDISPUTEDLY, DURING THE APPELLATE PROCEEDINGS T HE LD. CIT(A) BY ALLOWING THE ADMISSION OF ADDITIONAL EVID ENCE CALLED A REMAND REPORT FROM THE ASSESSING OFFICER BY EXAMI NING FRESH EVIDENCE BROUGHT ON RECORD BY THE ASSESSEE. IT IS ALSO NOT IN DISPUTE THAT DURING THE REMAND PROCEEDINGS THE ASSE SSEE HAS FILED AFFIDAVITS, CONFIRMATIONS, COPIES OF ITR, STA TEMENT OF AFFAIRS AND CASH FLOW STATEMENT OF SHRI ANIL KUMAR BANSAL, MAHENDER PRATAP SINGH, VIKASH KUMAR JAIN, MANJU RAN I AND VARENDER KUMAR. 4. IN THE BACKDROP OF THE AFORE-REFERRED FACTS AND THE FACTS AND CIRCUMSTANCES OF THE CASE THE CIT(A) HAS AFFIRM ED THE FINDINGS RETURNED BY THE ASSESSING OFFICER PRIMARIL Y ON TWO GROUNDS: - (I) THAT THE ASSESSEE HAS FAILED TO PRODUCE THE AFO RESAID CREDITORS BEFORE THE ASSESSING OFFICER DURING THE REMAND PROCEEDINGS; 5 ITA NO. 3557/DEL /2011 (II) THAT IT IS IMPROBABLE THAT THE PERSONS FILING RETURNS DECLARING INCOME OF ABOUT RS. 1 LAC WOULD MAINTAIN THE BOOKS OF ACCOUNTS SO AS TO BELIEVE THE STATEMEN T OF AFFAIRS AND CASH FLOW STATEMENTS FILED BY OR ON THE IR BEHALF, AS THE SAME IS AGAINST THE NORMAL HUMAN PROBABILITY. 4.1 IT IS SETTLED PRINCIPLE OF LAW THAT WHEN THE AS SESSEE HAS DULY DISCHARGED THE ONUS BY FURNISHING THE AFFIDAVI TS, CONFIRMATIONS, COPIES OF INCOME TAX RETURNS, STATEM ENT OF AFFAIRS AND CASH FLOW STATEMENT OF HIS CREDITORS, T HE BURDEN STANDS SHIFTED TO THE ASSESSING OFFICER TO REBUT TH E SAME BY BRINGING COGENT EVIDENCE ON THE RECORD, PARTICULARL Y WHEN HE HAS NOT DISPUTED THE AFORESAID DOCUMENTS SO FURNISH ED BY THE ASSESSEE. THE ASSESSING OFFICER HAS THE AMPLE POWE R TO SUMMON THE AFORESAID CREDITORS OF THE ASSESSEE WHIC H HE HAS APPARENTLY NOT EXERCISED RATHER AGAIN SHIFTED THE B URDEN ON THE ASSESSEE WITHOUT DISPUTING THE GENUINENESS OF T HE DOCUMENTS. 5. NO DOUBT IT IS DUTY OF THE ASSESSEE TO PROVE THE GENUINENESS AND CREDITWORTHINESS OF HIS CREDITORS, BUT WHEN ALL THE TRANSACTIONS IN THIS CASE HAVE BEEN ROUTED THROUGH BANKS AND THE COMPLETE PARTICULARS HAVE BEEN FURNIS HED BY THE ASSESSEE, WHICH HAVE NOT BEEN DISPUTED BY THE A SSESSING OFFICER, THE ASSESSING OFFICER WAS REQUIRED TO ENSU RE THE 6 ITA NO. 3557/DEL /2011 PRESENCE OF CREDITORS BY USING COERCIVE METHOD AND NOT TO PROCEED SUMMARILY. 6. AS FAR AS THE QUESTION OF DISBELIEVING THE STATE MENT OF AFFAIRS AND CASH FLOW STATEMENT FILED BY ON OR BEHA LF OF THE CREDITORS IN THE FACE OF THE FACT THAT THEY HAD FIL ED RETURN DECLARING INCOME OF ABOUT RS. 1 LAC IS CONCERNED, T HE SAME HAS BEEN DISBELIEVED ON THE BASIS OF CONJECTURES AND SU RMISES. BECAUSE IT VARIES FROM PERSON TO PERSON TO MAINTAIN THE BOOKS OF ACCOUNTS EVEN IF, THEIR INCOME IS MEAGER. MEREL Y ON THE BASIS OF THE FACT THAT THE INCOME WAS ABOUT RS. 1 L AC THE STATEMENT OF BOOKS OF ACCOUNTS CANNOT BE DISBELIEVE D. 7. WHEN ALL THESE FACTS ARE FURTHER EXAMINED IN THE LIGHT OF THE UNDISPUTED FACT THAT ALL THE DOCUMENTS TO PROVE THE GENUINENESS AND CREDITWORTHINESS OF S/SH. NETRAM GO EL, ANIL KUMAR BANSAL, MAHENDER PRATAP SINGH, AJAY KUMAR JAI N, VIRENDER KUMAR, VIKAS KUMAR & MS. MANJU RANI LYING AT PAGES 92 TO 160A OF THE PAPER BOOK HAVING BEEN PERU SED BY THE ASSESSING OFFICER AND THE LOAN AMOUNT IN QUESTI ON BORROWED BY THE ASSESSEE HAS SINCE BEEN REPAID BY T HE ASSESSEE BY WAY OF ACCOUNT PAYEE CHEQUES PRIOR TO 2 009, THE ORDER PASSED BY THE LD. CIT(A) IS NOT SUSTAINABLE I N THE EYES OF LAW. 7.1 IN THE VIEW OF WHAT HAS BEEN DISCUSSED ABOVE, W E ARE OF THE CONSIDERED VIEW THAT THE ASSESSEE HAS DULY DISC HARGED THE ONUS UPON HIM TO PROVE THE GENUINENESS AND CREDITWO RTHINESS 7 ITA NO. 3557/DEL /2011 OF HIS CREDITOR TO PROVE THE LOAN OF RS. 8 LACS, OT HERWISE PROVED TO HAVE BEEN PAID BY WAY OF CHEQUES AND AS SUCH THE ADDITION MADE TO HIS INCOME IS NOT SUSTAINABLE. 7.2 CONSEQUENTLY, THE PRESENT APPEAL IS HEREBY ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT ON 18.03.2016 SD/- SD/- (G. D. AGRAWAL) (KULDIP SINGH ) VICE PRESIDENT JUDICIAL MEMBER DATE: 18.03.2016 *KAVITA ARORA, P.S. COPY FORWARDED TO:- 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT (A)-, NEW DELHI. 5. THE DR, ITAT, LOKNAYAK BHAWAN, KHAN MARKET, NEW DEL HI. BY ORDER ASSISTANT REGISTRAR 8 ITA NO. 3557/DEL /2011