Manoj Kumar Agarwal, Boudh V. ACIT, Berhampur

ITA 356/CTK/2011

• Counselvise Citation: 35622114 RSA 2011
• Duration Of Justice: 2 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-09-2011
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Next Hearing Date: 22-09-2011
• Assessment Year: 2007-2008
• Appeal Filed On: 18-07-2011
• Court: TRIBUNAL
• Department Lawyers: S C MOHANTY
• Assessee Lawyers: P K MISHRA
• Keywords: Salary income

Judgement Text

IN THE INCME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK BEFORE : SHRI K.K.GUPTA, AM , AND SHRI K.S.S.PRASAD RAO, JM ITA NO. 356/CTK/2011 (ASSESSMENT YEAR 2007 - 08) MANOJ KUMAR AGRAWAL, AT: BIKASH LANE, P.O.DIST. BOUDH, PAN: ABXPA 9403 F VERSUS ASST .COMMISSIONER OF INCOME - TAX , BERHAMPURCIRCLE, BERHAMPUR, DIST. GANJAM. (APPELLANT) (RESPONDENT) FOR THE APPELLANT: SHRI P.K.MISHRA, AR FOR THE RESPONDENT SHRI S.C.MOHANTY, DR DATE OF HEARING : 22.09.2011 DATE OF PRONOUNCEMENT : 23. 09.2011 ORDER SHRI K.K.GUPTA, AM : THIS APPEAL IS FILED BY THE ASSESSEE HAVING BEEN AGGRIEVED BY THE ORDER OF THE LEARNED CITA) DT.30.3.2011 CONFIRMING THE ADDITONOF 7,45,000 MADE BY THE ASSESSING OFFICER U/S.68 OF THE INCOME - TAX ACT,1961 FOR THE ASSES SMENT YEAR 2007 - 08. 2. THE RELEVANT FACTS IN BRIEF ARE THAT THE ASSESSEE CLAIMED TO HAVE RECEIVED AN UNSECURED LOAN OF 75,83,000 FROM SEVEN CREDITORS. SUMMONS WERE ISSUED TO THE CREDITORS AND STATEMENTS WERE RECORDED. OUT OF THE SEVEN CREDITORS, ONE OF THE CREDITOR SMT. PREMA AGARWAL , THE MOTHER OF THE ASSESSEE, IN HER STATEMENT RECORDED U/S.131 STATED THAT SHE IS A HOUSE WIFE AND HER HUSBAND SHRI RAM GOPAL AGARWAL ALONE CONDUCTS HER BUSINESS ACTIVITIES SINCE LAST 10 YEARS. FROM THIS, THE ASSESSING OFFIC ER CONCLUDED THAT SHE IS ONLY THE NAME LENDER AND THE GENUINENESS AS WELL AS CREDIT WORTHINESS OF THE LOAN CREDITOR REMAINED UNEXPLAINED. HE, THEREFORE, ADDED THE SUM OF 7,45,000 TO THE TOTAL INCOME OF THE ASSESSEE. AGGRIEVED, THE ASSESSEE PREFERRED APPE AL BEFORE THE FIRST APPELLATE AUTHORITY, WHO CONFIRMED THE SAID ADDITION AND HENCE, THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 3. THE LEARNED AR OF THE ASSESSEE CONTENDED BEFORE US THAT SMT.PREMA AGARWAL HAD SUFFICIENT BALANCE IN HER BANK ACCOUNT OUT O F WHICH SHE HAD 2 GIVEN LOAN TO HER SON, THE ASSESSEE THROUGH BANKING CHANNEL. SMT.PREMA AGARWAL IS THE MOTHER OF THE ASSESSEE. THEREFORE, WHEN THE IDENTITY AND CAPACITY OF THE CREDITOR AND GENUINENESS OF THE TRANSACTION WAS ESTABLISHED BY THE ASS ESSEE, THE AUTHORITIES BELOW WERE NOT JUSTIFIED IN MAKING ADDITION U/S.68. ACCORDINGLY, HE PRAYED THAT THE SAID ADDITION BE DELETED. 4. THE LEARNED DR SUPPORTED THE IMPUGNED ORDERS OF THE AUTHORITIES BELOW. HE CONTENDED THAT THOUGH THE LOAN WAS GIVEN TO THE ASSESSEE THROUGH BANKING CHANNELS, TH E CREDITOR SMT.PREMA AGARWAL HAD EXPRESSED HERE IGNORANCE OF SOURCE OF DEPOSIT IN HER BANK ACCOUNT BEFORE GIVING LOAN TO THE ASSESSEE. THEREFORE, THE AUTHORITIES BELOW ARE JUSTIFIED IN MAKING THE ADDITION U/S.68, WHICH MAY KIND LY BE CONFIRMED. 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THERE IS NO DISPUTE TO THE FACT THAT SMT.PREMA AGARWAL, TH E MOTHER OF THE ASSESSEE HAD GIVEN THE LOAN IN QUESTION TO HER SON FROM HER BANK BALANCE. LAW I S WELL SETTLED THAT O NCE THE ASSESSEE HAS PROVED THE IDENTITY OF HIS CREDITORS , THE GENUINENESS OF THE TRANSACTIONS WHICH HE HAD WITH OTHER CREDITORS, AND THE CREDITWORTHINESS OF HIS CREDITORS VIS - A - VIS THE TRANSACTIONS WHICH HE HAD WITH THE CREDITORS ON R ECORD OF THE INCOME - TAX AUTHORITIES , HIS BURDEN STANDS DISCHARGED AND THE ONUS THEN SHIFTS TO THE REVE NUE TO SHOW THAT THOUGH COVERED BY CHEQUES, THE AMOUNTS IN QUES TION, ACTUALLY BELONGED TO, OR WAS OWNED BY THE ASSESSEE HIMSELF , WHICH IN THE INSTANT CA SE THE REVENUE AUTHORITIES HAVE ENQUIRED. THE LEARNED CIT(A) HAS OBSERVED IN HIS ORDER THAT THERE WAS CASH DEPOSITS ON VARIOUS DATES BESIDES OTHER CREDITS IN THE BANK ACCOUNT OF SMT. PREMA AGARWALS ACCOUNT RELATE TO TRANSFER OF FUNDS FROM DIFFERENT BANK A CCOUNTS OF HER SONS. SMT.PREMA AGARWAL RECEIVES SHARE INCOME FROM THE PARTNERSH IP FIRM M/S.SHERAWALI RICE MILLS . HOWEVER, IN THE STATEMENTS RECORDED ON OATH AS WELL AS DURING THE 3 COURSE OF REMAND SMT.PREMA AGARWAL DENIED HAVING ANY KNOWLEDGE OF HER SOURCE OF INCOME EXCEPT HER SHARE INCOME WHICH IS CONDUCTED BY HER HUSBAND . FURTHER SHE STATED THAT SHE ONLY SIGNS THE CHEQUES BUT THE DEPOSITS AND WITHDRAWALS IN HER BANK ACCOUNT AT S.B.I.BOUDH ARE DONE BY HER SONS. FROM THIS, THE LOWER AUTHORITIES CAME TO CONCL UDE THAT SMT.PREMA AGARWAL IS ONLY A NAME LENDER. BUT WE ARE UNABLE TO ACCEPT SUCH VIEW OF THE AUTHORITIES BELOW. SMT.PREMA AGARWAL IS A PARTNER IN THE FIRM M/S.SERAWALI RICE MILLS AND SHE HAS FILED RETURNS OF INCOME S HOWING TOTAL INCOME OF 15,65,166 CONSISTING OF INCOME FROM SALARY, INCOME FROM BUSINESS OF SEASONAL GOODS AND INCOME FROM OTHER SOURCES SUCH AS INTEREST ON SB ACCOUNT, AS IS EVIDENT FROM THE FINANCIAL STATEMENTS FOR THE ASSESSMENT YEAR 2007 - 08 FURNISHED BY THE LEARNED AR OF THE ASSESSEE BEFORE US. IN THE BALANCE SHEET, SHE HAS ALSO SHOWN LOAN OF 7,45,000 TO THE ASSESSEE. THUS, WE FIND THAT THE ASSESSEE HAS PROVED BEYOND DOUBT THE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTION, WHICH WAS A LSO ROUTED THROUGH BANK. IN VIEW OF SUCH FACTUAL ASPECTS, THE CLAIM OF THE ASSESSEE TO HAVE RECEIVED LOAN FROM SMT.PREMA AGARWAL CANNOT BE DISCARDED SIMPLY BASED ON THE STATEMENT OF SMT.PREMA AGARWAL. IN VIEW OF THE ABOVE THE UNDISPUTED FACTS ON RECORD, WE HOLD THAT THE ADDITION MADE U/S.68 IN THE CASE OF THE ASSESSEE IS NOT JUSTIFIED. THEREFORE, WE DELETE THE SAID ADDITION OF 7,45,000 AND ALLOW THE APPEAL OF THE ASSESSEE. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. SD/ - SD/ - (K.S.S.PRASA D RAO) JUDICIAL MEMBER (K.K.GUPTA) ACCOUNTANT MEMBER DATE: 23 RD SEPTEMBER, 2011 H.K.PADHEE, SENIOR PRIVATE SECRETARY. 4 COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT: 2. THE RESPONDENT: 3. THE CIT, 4. THE CIT(A), 5. THE DR, CUTTACK 6. GUARD FILE (IN DUPLICATE) TRUE COPY, BY ORDER, SENIOR PRIVATE SECRETARY.