M/s. Wazir Chand, Rewari V. ITO, Rewari

ITA 3622/DEL/2014

• Counselvise Citation: 362220114 RSA 2014
• Duration Of Justice: 1 year(s) 1 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-08-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC 2
• Next Hearing Date: 07-07-2015
• Assessment Year: 2011-2012
• Appeal Filed On: 17-06-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: BALANCE SHEET YEAR ENDING; I E OF LAST YEAR
• Keywords: Unexplained cash credit; Onus to prove
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH SMC - II , NEW DELHI BEFORE SHRI H.S.SIDHU, JUDICIAL MEMBER ITA NO. 3622 /DEL/2014 ASSESSMENT YEAR : 2011 - 12 ORDER THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LD. CIT(A) , ROHTAK DATED 07.04.2014 FOR ASSESSMENT YEAR 2013 - 14 ON THE FOLLOWING GROUNDS: - 1. GROUND NO.1 RELATES TOTADDITION RS 2,58,384 AS LOAN FROM SMT. VEENA MANCHANDA: SMT. VEENA MANCHANDA IS A REGULAR INCOM E TAX ASSESSEE AND IS FILING HER ITR WITH INCOME TAX OFFICE REWARI IN ITR FORM 2. SINCE LONG SHE HAD AN OPENING BALANCE OF RS. 1500000/ - WITH THE APPELLANT FIRM. DURING THE YEAR RS. 7 LACS I.E. 3 LACS ON 10 - 05 - 2010 AND RS. 4 LACS ON 20 - 12 - 10 WERE DEPOSITED THROUGH CHEQUES. OUT OF NEW ADDITIONS OF RS. 7 LACS THE LEARNED AO DISALLOWED RS. 250000/ - ALLEGING THAT WHILE ISSUING THE CHEQUE RS. 400000/ - A SUM OF RS. 250000/ - WAS DEPOSITED IN CASH IN BANK IGNORING ALL THE FACTS & FIGURES ON RECORD. DURING THE PROCE EDINGS THE APPELLANT HAS FURNISHED THE CONFIRMATION, BANK ACCOUNT, CAPITAL A/C & BALANCE SHEET FOR THE YEAR ENDING 31 - 03 - 10 & 31 - 03 - 11 I.E. OF LAST YEAR AND ALSO THE YEAR UNDER APPEAL. THE ALLEGATION OF THE AO THAT THE SAME WERE NOT FURNISHED WITH THE RETU RN OF INCOME AS ANNEXURES. THE AO GROSSLY IGNORED THE LAW THAT CBDT HAD NOTIFICATION THAT NO ANNEXURES SHALL BE ACCEPTED NOR CAN BE ATTACHED WITH ANY ITR. BUT IN THE CASE OF SMT. VEENA MANCHANDA THE RETURN WAS FURNISHED MANUALLY IN ITR - 2 WITH COMPLETE ANNE XURE I.E. INCOME RETURNABLE, CAPITAL A/C & BALANCE SHEET WITH ITO REWARI WARD - 2 WHICH IS VERY WELL ON RECORD. WAZIR CHAND, PROP. BHARAT TRUNK HOUSE, RAILWAY ROAD, REWARI PAN:AAIPC$100D VS. ITO, WARD - 1, NEW DELHI (APPELLANT) (RESPONDENT) APPELLANT BY : PANKAJ MANOCHA, CA RESPONDENT BY : SH. ROBIN RAWAL, SR. DR DATE OF HEARING : 07.07.2015 DATE OF PRONOUNCEMENT : 14 .08.2015 PAGE 2 OF 10 DURING THE ASSESSMENT PROCEEDINGS THE BANK DEPOSITS OF RS. 250000/ - WERE EXPLAINED BY FURNISHING THE CASH FLOW CHART ALONG WITH THE BALANCE SHEET ENDING 31 - 03 - 10 AS UNDER; OPENING CIH AS ON 01 - 04 - 10 RS. 2,64,453.61 CASH DEPOSITS WITH BANK (RS. 73,000 ON 10 - 05 - 10) (RS. 50,000 ON 10 - 06 - 10) RS.1,23,000.00 CASH WITHDRAWALS FROM BANK (ON 02 - 08 - 10) RS. 90,700.00 INTEREST INCOME UP TO 20 - 12 - 10 RS. 17,8 47.00 RS. 2,50,000.00 THE APPELLANT ASSESSEE HAS COMPLETELY DISCHARGED HIS ONUS BUT LEARNED AO GROSSLY ERRED IN NOT CONSIDERING ALL THE ABOVE FIGURES. FURTHER THE AO HAS RELIED ON THE CASES OF SUMATI DAYAL VS. COMMISSIONER OF INCOME TAX REPORTED IN [1995] 214 ITR 801 SC AND CIT VS. PRECISION FINANCE PVT. LTD. 208 ITR 456 (GAL) AND KALE KHAN MOHAMMAD HANIF VS.CIT (1963) REPORTED IN 50 ITR 1 (SC). WHILE IN THE CASE OF SMT. SUMATI DAYAL VS. CIT, THE CHAIRMAN OF THE SETTLEMENT COMMISSION (DISSENTING MEMBER) HAS LAID EMPHASIS ON THE FACT THAT APPELLANT HAD PRODUCED EVIDENCE IN SUPPORT OF THE CREDITS IN THE FORM OF CERTIFICATES FROM THE RACING CLUBS GIVING PARTICULARS OF THE CROSSED CHEQUES FOR PAYMENT OF THE AMOUNTS FOR WINNING OF JACKPOTS, ETC. THE MATTER HAS TO BE CONSIDERED IN THE LIGHT OF HUMAN PROBABILITIES. IN THIS CASE, AO HAS RELIED ON HUMAN PROBABILITIES AND TAKEN A STAND THAT THE INCOME DECLARED BY THE LENDER I.E. SMT. VEENA MANCHANDA IS RS.1,88,010/ - ONLY. A PERSON WHO IS NOT HAVING A CAPACIOUS INCOME A ND WHO EARNS INCOME BY GIVING MONEY ON INTEREST WILL NEVER KEEP WITH HIMSELF A VOLUMINOUS AMOUNT OF RS. 2,50,000/ - . THIS IS AGAINST THE NATURAL HUMAN BEHAVIOR AND COGENT CONDUCT. IF AT ALL THE LENDER WAS HAVING ANY CASH IN HAND BY WAY OF PREVIOUS DRAWINGS TO MAINTAIN LIQUIDITY, SHE MUST HAS UTILIZED IT AT THE TIME OF ISSUING THE FIRST CHEQUE TO THE ASSESSEE WHEN SHE DEPOSITED RS.73.000/ - IN HER BANK ACCOUNT. THE AUTHENTICITY OF THE VERSION IS EVIDENCED FROM THE FACT THAT THE LENDER IN HER SO CALLED PREPARED BALANCE SHEET SHOWING CASH IN HAND OF RS.2,046/ - ONLY AS ON 31.03.2011. PLEADINGS OF THE ASSESSEE FOR THE LENDER HAVE NO FORCE. THE MATTER SHOULD BE CONSIDERED ACCORDING TO SURROUNDING CIRCUMSTANCES AND BY APPLYING THE TEST OF HUMAN PROBABILITIES AS IS HE LD BY THEHON'BLE APEX COURT IN THE CASE OF SURNATI DAYAL VS. COMMISSIONER OF INCOME TAX REPORTED IN [1995] 214 ITR 801 SC. ALL THE FACTS AND CIRCUMSTANCES ARE ADVERSE TO NATURAL HUMAN BEHAVIOR AND THE ASSESSEE HAS FAILED TO ESTABLISH THE GENUINENESS OF CRE DITS TO THE EXTENT OF CASH DEPOSITS MADE BY THE LENDER ON THE DATE OF ISSUING THE CHEQUE TO THE ASSESSEE. THE AO MAY BE RIGHT ON HIS UNDERSTANDING ABOUT HUMAN BEHAVIOR BUT HE FORGETS TO TAKE INTO CONSIDERATION THAT THERE ARE TWO TYPES OF HUMAN BEING VIZ. M ALE AND FEMALE. HIS UNDERSTANDING ABOUT MALE HUMAN BEING MAY BE CORRECT BUT FEMALE HUMAN BEING IN INDIA BY NATURE ARE MISER AND TEND TO SAVE MONEY PAGE 3 OF 10 WITHOUT INFORMING THEIR COUNTERPART FOR THE TOUGH TIME (WHICH MAY COME IN FUTURE). FURTHER TO BRING YOUR KIND ATTENTION TO THE FACT THAT SMT. VEENA MANCHANDA IS FROM WELL OF FAMILY AND HAVING TWO WELL SETTLED SONS WHICH ON VARIOUS OCCASIONS GIVE MONEY TO THEIR MOTHER. FURTHER REGARDING AO'S RELIANCE ON CIT V. PRECISION FINANCE PVT. LTD. 208 ITR 456 (CAL) WHEREIN THEIR LORDSHIP HAVE HELD THAT 'MERE PAYMENT BY ACCOUNT PAYEE CHEQUE IS NOT SACROSANCT NOR CAN IT MAKE A NON GENUINE TRANSACTION GENUINE BUT IN THIS WE WOULD LIKE TO BRING YOUR ATTENTION TO THE FACT THAT IN THE REFERRED CASE CASH CREDITORS WERE UNTRACEABLE WHILE IN THE CASE OF SMT. VEENA MANCHANDA, EVERYTHING WAS ON RECORD AND AO HAS NOT CALLED ASSESSEE IF ANY DOUBT OF HER DEPOSITS WITH BANK BEING REGULAR INCOME TAX ASSESSEE & RECORD FURNISHED. BUT NO STEPS WERE TAKEN BY THE AO TO JUSTIFY THE GENUINENESS OF THE ASSESSEE. FURTHER AS PER THE PROVISIONS OF LAW & THE VERSION AND SO MANY DECIDED CASE IF THE ASSESSEE FURNISHED ALL THE DOCUMENTS REGARDING DEPOSITS & RELEVANT DOCUMENTS OF RETURN FURNISHED PROOF ETC. MEANS THE ONUS DISCHARGED BY THE APPELLANT AND FURT HER THE LEARNED AO HAS NOT DISCHARGED HIS DUTIES TO CALL THE PERSON DEPOSITING THE ADVANCE. THE VERDICT OF RECENTLY DECIDED CASE OF THE LEARNED DELHI HIGH COURT IN THE CASE OF CIT VS. KINETIC CAPITAL FINANCE LTD. REPORTED IN (2013) 354 ITR 296 CLEARLY HELD ' ASSESSEE ESTABLISHING IDENTITY OF CREDITORS & AMOUNTS RECEIVED BY WAY OF CHEQUES - ASSESSEE DISCHARGED INITIAL ONUS - INVESTORS RECEIVED INTEREST FOR DEPOSITS & TAX DEDUCTED AT SOURCE. NO ADDITION COULD BE MADE'. 2. GROUND NO.2 RELATES TO COMMI SSION OF RS.30,100/ - DURING THE YEAR THE FULL & FINAL SETTLEMENT WAS MADE ON ACCOUNT OF COMMISSION WITH SH. MURARI LAL, HENCE AMOUNT WAS PAID DURING THE YEAR & IT SHOULD BE TREATED AS ACTUAL PAYMENT OF THE YEAR. THESE EXPENSES WERE NOT OUTSTANDING IN THE PREVIOUS YEAR AS FULL AND FINAL SETTLEMENT OF COMMISSION RELATES TO CURRENT YEAR. HENCE, SHOULD NOT BE ADDED BACK TO THE INCOME OF ASSESSEE. THE ORDER PASSED BY THE LD. ASSESSING OFFICER IS BAD IN LAW AND AGAINST THE PROVISIONS OF THE INCOME TAX ACT; ACCOR DINGLY THE SAID ORDER MAY PLEASE BE QUASHED. 2. THE ASSESSING OFFICER MADE AN ADDITION OF RS.2 , 58 , 384/ - AS LONG FROM SMT VEENA MANCHANDA. HIS FINDING IN THE ASSESSMENT ORDER IS AT PAGES 2 TO 4 I.E. REPRODUCED AS UNDER: - 2. A PERUSAL OF THE BALANCE SHEET OF THE ASSESSEE REVEALED THAT UNSECURED LOANS OF RS. 22,00,000/ - WERE OUTSTANDING IN THE NAME OF SMT. VEENA RANI W/O SH. VEERBHAN OF MODEL TOWN, REWARI. VIDE QUESTIONNAIRE DATED 30.07.2013, THE ASSESSEE WAS ASKED TO PROVIDE INFORMATION IN RESPECT OF UNSECURED LOANS PAGE 4 OF 10 ALONGWITH THEIR COPIES OF ACCOUNTS. VIDE HIS REPLIES THE ASSESSEE FILED COPY OF ACCOUNT OF SMT. VEENA MANCHANDA ALONGWITH CONFIRMATION OF ACCOUNT WHICH REVEALED THAT FRESH LOANS OF RS.7,00,000/ - HAVE BEEN ACCEPTED FROM SMT. VEENA MANCHANDA DURING THE YEAR UNDER CONSIDERATION. THE ASSESSEE ALSO FILED BANK STATEMENT OF SMT. VEENA MANCHANDA. FROM THE BANK STATEMENT, IT WAS NOTICED THAT THE LENDER (SMT. VEENA MANCHANDA) ISSUED TWO CHEQUES OF RS.3,00,000/ - AND RS.4,00,00 0/ - TO THE ASSESSEE ON 10.05.2010 AND 20.12.2010 RESPECTIVELY. AT THE TIME OF ISSUE OF CHEQUE OF RS.3,00,000/ - THE LENDER DEPOSITED RS.73,000/ - IN HER BANK ACCOUNT. BALANCE AMOUNT WAS ACCUMULATED BY MEANS OF ENTRIES OF CHEQUES. THERE WAS SUFFICIENT BALANCE IN THE ACCOUNT OF THE LENDER TO GIVE LOANS. BUT BEFORE ISSUING CHEQUE OF RS.4,00,000/ - ON 19.06.2009, THE LENDER DEPOSITED RS.2,50,000/ - IN CASH IN HIS ACCOUNT ON 20.12.2010. DURING THE ASSESSMENT PROCEEDINGS, ONUS WAS PLACED ON THE ASSESSEE TO EXPLAIN TH E AVAILABILITY OF CASH DEPOSITS. THE ASSESSEE EXPLAINED THAT THE LENDER SMT. VEENA MANCHANDA IS HAVING HER INCOME AND FILING HER INCOME TAX RETURN REGULARLY. SHE WAS HAVING CASH IN HAND WITH HERSELF AND WAS WELL CAPABLE OF DEPOSITING CASH OF RS.2,50,000/ - IN ONE TIME IN HER BANK ACCOUNT. THE ASSESSEE ALSO FILED COPIES OF ITR, COMPUTATION OF INCOME AND BALANCE SHEET OF THE LENDER TO PROVE THE GENUINENESS OF THE LOAN. A PERUSAL OF THE ABOVE DOCUMENTS REVEAL THAT THE LENDER IS FILING HER INCOME TAX RETURN IN F ORM ITR - 2 AND NO BALANCE SHEET WAS FILED BY HER WITH THE DEPARTMENT. FURTHER COMPUTATION OF INCOME OF THE LENDER SHOWS THAT SHE IS HAVING INTEREST INCOME ONLY. INTEREST INCOME OF THE LENDER ACCRUES ONLY AT THE CLOSING OF THE YEAR AND THAT INCOME IS CREDITE D TO HER ACCOUNT ONLY. LIQUIDITY OF CASH DEPENDS UPON THE VOLUME AND NATURE OF INCOME. (THE INCOME DECLARED BY THE LENDER I. E. SMT. VEENA MANCHANDA IS RS.1,88,010/ - ONLY. A PERSON WHO IS NOT HAVING A CAPACIOUS INCOME AND WHO EARNS INCOME BY GIVING MONEY O N INTEREST WILL NEVER KEEP WITH HIMSELF A VOLUMINOUS AMOUNT OF RS.2,50,000/ - . THIS IS AGAINST THE NATURAL HUMAN BEHAVIOR AND COGENT CONDUCT.LLF AT ALL THE LENDER WAS HAVING ANY CASH IN HER HAND BY WAY OF PREVIOUS DRAWINGS TO MAINTAIN LIQUIDITY, SHE MUST HA S UTILIZED IT AT THE TIME OF ISSUING THE FIRST CHEQUE TO THE ASSESSEE WHEN SHE DEPOSITED RS.73,000/ - IN HER BANK ACCOUNT. THE AUTHENTICITY OF THE VERSION IS EVIDENCED FROM THE FACT THAT THE LENDER IP HER SO CALLED PREPARED BALANCE SHEET IS SHOWING CASH IN HAND OF RS.2,046/ - ONLY AS ON 31.03.2011. PLEADINGS OF THE ASSESSES FOR THE LENDER HAVE NO FORCE. THE MATTER SHOULD BE CONSIDERED ACCORDING TO SURROUNDING CIRCUMSTANCES AND BY APPLYING THE TEST OF HUMAN PROBABILITIES AS IS HELD BY THE HON'BLE APEX COURT IN THE CASE OF SUMATI DAYAL VS. COMMISSIONER OF INCOME TAX REPORTED IN (1995) 214 ITR 801 SC. ALL THE FACTS AND CIRCUMSTANCES ARE ADVERSE TO NATURAL HUMAN BEHAVIOR AND THE ASSESSEE HAS FAILED TO ESTABLISH THE GENUINENESS OF CREDITS TO THE CASH DEPOSITS MADE BY THE LENDER ON THE DATE OF ISSUING THE CHEQUE TO THE ASSESSEE. CONSIDERING ALL THE COMINGS AND GOINGS AS NARRATED ABOVE, I AM OF THE CONSIDERED OPINION THAT THE ASSESSEE HAS NOT SUCCEEDED IN PROVING THE PAGE 5 OF 10 AVAILABILITY OF CASH DEPOSITED IN THE BANK ACCOUNT OF THE LENDER. KEEPING IN VIEW OF THE FACTS AND CIRCUMSTANCES, IT IS HELD THAT THE ASSESSEE HAS FAILED TO PROVE THE CREDITWORTHINESS AND GENUINENESS OF THE LOAN TO THE EXTENT OF RS. 2,50,000/ - . MY FINDINGS FIND FORCE FROM THE DECISION IN THE CASE OF KALE KHAN MOHAMMAD HANIF VS. CIT (1963) REPORTED IN 50 ITR 1 (SC) AND ALSO IN THE CASE OF SUMATI DAYAL V. CIT (1995) REPORTED IN 214 ITR 801 (SC): (1995) 125 CTR 124 (SC): (1995) 80 TAXMAN 89 (SC)(1995) 125 TAXATION 446 (SC) IN WHICH THEIR LORDSHIP HAVE HELD TH AT BURDEN OF PROOF THAT AMOUNTS OF CREDITS IN THE ACCOUNTS OF BUSINESS DID NOT CONSTITUTE INCOME LIES ON THE ASSESSEE. MERE FACT THAT THE AMOUNT HAS BEEN RECEIVED THROUGH BANKING CHANNEL IS NEVER SUFFICIENT ESPECIALLY WHEN CASH HAS BEEN DEPOSITED IN THE BA NK ACCOUNT BEFORE ISSUING A CHEQUE. RELIANCE IS PLACED ON THE DECISION IN THE CASE OF CIT V. PRECISION FINANCE PVT. LTD. 208 ITR 465 (CAL) WHEREIN THEIR LORDSHIP HAVE HELD THAT 'MERE PAYMENT BY ACCOUNT PAYEE CHEQUE IS NOT SACROSANCT NOR CAN IT MAKE A NON G ENUINE TRANSACTION GENUINE. THE CREDIT TO THE EXTENT OF RS.2,50,000/ - IN THE NAME OF SMT. VEENA MANCHANDA IS HOT TRUSTWORTHY, NON - GENUINE AND REMAINS UNPROVED. HENCE THE AMOUNT OF UNEXPLAINED CREDIT I. E. RS.2,50,000/ - IS ADDED BACK TO THE INCOME OF THE AS SESSEE. FURTHER IT IS ALSO NOTICED FROM THE COPY OF ACCOUNT OF SMT. VEENA MANCHANDA IN THE BOOKS OF ACCOUNT OF THE ASSESSEE THAT INTEREST @ 12% HAS ALSO BEEN PAID ON THE ABOVE LOAN OF RS.2,50,000/ - . AS THE AMOUNT HAS NOT BEEN PROVE GENUINE, INTEREST ALLOWE D ON THIS AMOUNT FOR THE PERIOD 20.12.2010 TO 31.03.2011 WHICH ARRIVED AT RS.8,384/ - IS ADDED BACK TO THE INCOME OF THE ASSESSEE. I AM SATISFIED THAT THE ASSESSEE HAS .. INCOME/ FURNISHED INACCURATE PARTICULARS OF HIS INCOME TO THE TUNE OF RS.285384/ - (2,50,000/ - +8,384/ - ). I AM SATISFIED THAT THE ASSESSEE HAS CONCEALED INCOME FURNISHED INACCURATE PARTICULARS OF HIS INCOM E TO THE TUNE OF RS.2,58,384/ - . 3. AS REGARDS TO THE ADDITION OF RS.30,100/ - ON ACCOUNT OF COMMISSION PAID TO SHRI MURARI LAL. THE AO HAS GIVEN HIS FINDING IN PARA 3 AT PAGE 4 OF THE ASSESSMENT ORDER I.E. REPRODUCED AS UNDER: - 3. IT WAS NOTICED FROM THE COMMISSION ACCOUNT OF THE ASSESSEE THAT THE COMMISSION OF RS.30,100/ - PAID TO SH. MURARI LAL PERTAINS TO THE FINANCIAL YEAR 2009 - 10 RELEVANT TO THE ASSESSMENT YEAR 2010 - 11. THE EXPENSES WERE NOT OUTSTANDING IN THE PREVIOUS YEAR BALANCE SHEET AND BOOKED IN THE YEAR UNDER CONSIDERATION. HENCE EXPENSES PERTAINING TO PREVIOUS YEAR ARE NOT ALLOWABLE AND ADDED BACK TO THE INCOME OF THE ASSES SEE. PAGE 6 OF 10 4. THE AO MADE VARIOUS ADDITIONS INCLUDING THE ADDITION IN DISPUTE AND COMPLETED THE ASSESSMENT ON 18.11.2013 U/S 143(3) OF THE INCOME TAX ACT, 1961. 5. THE ASSESSEE AGGRIEVED BY THE ASSESSMENT ORDER DATED 18.11.2013 , FILED AN APPEAL BEFORE THE LD FIRST APPELLATE AUTHORITY , WHO VIDE IMPUGNED ORDER DATED 07.04.2014 PARTLY ALLOWED THE APPEAL FILED BY THE ASSESSEE AND SUSTAINED THE ADDITION IN DISPUTE. 6. NOW THE ASSESSEE HAS FILED THE PRESENT APPEAL AGAINST THE IMPUGNED ORDER DATED 07.04.2014 PASSED BY THE LD FIRST APPELLATE AUTHORITY. 7. AT THE TIME OF HEARING LD COUNSEL STATED THAT THE ASSESSEE HAS FILED ALL THE DOCUMENTARY EVIDENCE FOR SUBSTANTIATING HIS CLAIM BEFORE THE REVENUE AUTHORITIES BUT THE SAME HAS NOT BEEN PROPERLY APPRECIATED BY THEM. THE ADDITION MADE BY THE AO HA S WRONGLY BE EN CONFIRMED BY THE LD FIRST APPELLATE AUTHORITY. HE REQUESTED THAT KEEPING IN VIEW THE EVIDENCE FILED BY THE ASSESSEE IN THE SHAPE OF PAPER BOOK BEFORE THIS BENCH IN WHICH THE ASSESSEE HAS ENCLOSED ALL THE RELEVANT DOCUMENTARY EVIDENCE FOR SUBSTANTIATING THE CLAIM OF THE ASSESSEE, THE SAME MAY BE APPRECIATED AND THE ADDITION IN DISPUTE MAY BE DELETED BY ACCEPTING THE APPEAL FILED BY THE ASSESSEE. 8. LD DR STRONGLY OPPOSED THE REQUESTS OF THE ASSESSEE AND STATED THAT THE LD FIRST APPELLATE AUTHORITY HAS RIGHTLY UPHELD THE ADDITIONS MADE BY THE AO WHICH IS ON THE BASIS OF INSUFFICIENT EVIDENCE AND AS PER LAW. THEREFORE THE APPEAL FILED BY THE ASSESSEE MAY BE DISMISSED. 9. I HAVE HEARD BOTH THE PARTIES AND PERUSED THE RE LEVANT RECORD AVAILABLE WITH ME, I A M OF THE CONSIDERED VIEW THAT LD FIRST APPELLATE AUTHORITY HAS ADJUDICATE AND DECIDE THE ISSUES IN DISPUTE IN THE IMPUGNED ORDER AT PAGES 2 TO 4. FOR THE SAKE OF CONVENIENCE THE LD FIRST APPELLATE AUTHORITY ON THESE TWO ISSUES IN DISPUTE ARE REPRODUCED AS UNDER: - 2. GROUND NO. 1 RELATES TO ADDITION ON A/C OF A SUM OF 1. RS.258384.00 AS LOAN SMT. VEENA MANCHANDA. SMT. VEENA MANCHANDA IS A REGULAR INCOME TAX ASSESSEE. SINCE LONG SHE HAD AN OPENING BALANCE OF RS. 1500000/ - WITH THE APPELLANT FIRM. DURING THE YEAR RS.7 LACS I.E. 3 LACS ON 10 - 05 - 2010 & RS. 4 LACS ON 20 - 12 - 10 WERE DEPOSITED THROUGH CHEQUES. OUT OF NEW ADDITIONS OF RS.7 LACS THE LEARNED AO DISALLOWED RS.250000/ - ALLEGING THAT WHILE ISSUING THE CHEQUE RS.400000/ - A SUM OF RS.250000/ - WA S DEPOSITED CASH IN PAGE 7 OF 10 BANK IGNORING ALL THE FACTS & FIGURES ON RECORD. DURING THE PROCEEDING THE APPELLANT HAS FURNISHED THE CONFIRMATION, BANK ACCOUNT, CAPITAL A/C & BALANCE SHEET FOR THE YEAR ENDING 31 - 03 - 10 & 31 - 03 - 11 I.E. OF LAST YEAR AND ALSO THE YEAR U NDER APPEAL. THE ALLEGATION OF THE AO THAT THE SAME WERE NOT FURNISHED WITH THE RETURN OF INCOME AS ANNEXURES. THE AO GROSSLY IGNORED THE LAW THAT CBDT HAD ISSUED THE NOTIFICATION THAT NO ANNEXURES SHALL BE ACCEPTED NOR CAN BE ATTACHED WITH ANY ITR. BUT I N THE CASE OF SMT. VEENA MANCHANDA THE RETURN WAS FURNISHED MANUALLY IN ITR - 2 WITH COMPLETE ANNEXURE I.E. INCOME RETURNABLE, CAPITAL A/C 8& BALANCE SHEET WITH ITO REWARI WARD - 2 WHICH IS VERY WELL ON RECORD. DURING THE ASSESSMENT PROCEEDINGS THE BANK DEPOSI TS OF RS.250000/ - WERE EXPLAINED BY FURNISHING THE CASH FLOW CHART ALONGWITH THE BALANCE SHEET ENDING 31 - 03 - 10 ASUNDER: 264453.61 CASH IN HAND AS ON 31 - 03 - 2010 CASH DEPOSITS WITH BANK 73000.00 10 - 05 - 10 123000.00 50000.00 10 - 06 - 10 141453.6 1 90700.00 CASH WITHDRAWALS FROM BANK AS ON 02 - 08 - 10 232153.61 17847.00 OUT OF INCOME UPTO 20 - 12 - 10 250000.00 THE APPELLANT ASSESSEE HAS COMPLETELY DISCHARGED HIS ONUS BUT THE LEARNED AO GROSSLY ERRED IN NOT CONSIDERING ALL THE ABOVE FIGURES. THE AO MUST CALL THE ASSESSEE IF ANY DOUBT OF HER DEPOSITS WITH BANK BEING REGULAR INCOME TAX ASSESSEE & RECORD FURNISHED. BUT NO STEP WERE TAKEN BY THE AO. EVEN AO IN HIS ORDER THE DEPOSITS OF RS. 4 LACS ARE TAKEN OF DATED 19 - 06 - 09 WHILE THE PROCEEDINGS ARE OF 01.04.2010 TO 31.03.2011. HENCE THE ADDITIONS ON THE OLD DEPOSITS OF 19 - 16 -- 09 IF RS.4 LACS TAKEN THIS YEAR I.E. A/YEAR 2011 - 12 ARE QUITE ARBITRARY & UNJUSTIFIED SO PLEASE BE DELETED. FURTHER AS PER PROVISIONS OF LAW ON THE VERSION AND SO MANY DECIDED CASE IF THE ASSESSEE FURNISHED ALL THE DOCUMENTS REGARDING DEPOSITS & RELEVANT DOCUMENTS OF RETURN FURNISHED PROOF ETC. MEANS THE ONUS DISCHARGED BY THE APPELLANT. AND FURTHER THE LEARNED AO HAS NOT DISCHARGED HIS DUTIES TO CALL THE PERSON DEPOSITING THE ADVAN CE. THE VERDICT OF RECENTLY DECIDED CASE OF THE LEARNED DELHI HIGH COURT IN THE CASE OF THE VS KINETIC CAPITAL FINANCE LTD. REPORTED IN (2013) 354 ITR 296 CLEARLY HELD 'ASSESSEE ESTABLISHING IDENTITY OF CREDITORS & AMOUNTS RECEIVED BY WAY OF CHEQUES - ASSESS EE DISCHARGED INITIAL ONUS INVESTORS RECEIVED INTEREST FOR DEPOSITS 85 TAX DEDUCTED AT SOURCE. NO ADDITION COULD BE MADE.' PAGE 8 OF 10 THE SAID VERDICT IS QUITE APPLICABLE IN THIS VERY CASE AS THE DEPOSITOR IS REGULAR INCOME TAX ASSESSEE TDS ON INTERESTS ALSO DEDUCTE D. I HAVE EXAMINED THE DETAILS SUBMITTED BY THE APPELLANT AND THE FACTS ON RECORD.THE AO WHILE DISALLOWING 2,50.00 OUT OF RS 4,00.000/ - HAS DISCUSSED IN DETAIL THAT THE LENDER DID NOT HAVE THE MEANS TO ADVANCE THIS LOAN. CONSIDERING THE FACTS THAT HER SOURCE OF INCOME AS EVIDENCED FROM HER ITR AND BALANCE SHEET DID NOT GENERATE AS MUCH FUNDS TO HAVE A SUM OF RS 2,50,000/ - IN CASH. THE REFERENCE OF THE OLD LOAN AS MENTIONED IN THE AO'S ORDER AS DATING TO 19.06.2009 APPEARS TO BE A CLERICAL MISTAKE, BECAU SE THE AO HAS CLEARLY MENTIONED THAT CHEQUES WERE ISSUED ON 10.05.2010 (RS 3 LAKHS) AND 20.12.2010 (RS 4 LAKHS). I SEE NO PERVERSITY IN THE ADDITION OF THE PRINCIPAL SUM OF RS 4,00,000/ - AND THE INTEREST THEREON. I THEREFORE, CONFIRM THE SAME. 2. GROUND NO .2 RELATES TO COMMISSION OF RS.30100.00. DURING THE YEAR THE FULL & FINAL SETTLEMENT WAS MADE ON ACCOUNT OF COMMISSION WITH SH. MURARI LAL, HENCE AMOUNT WAS PAID DURING THE YEAR AND & IT SHOULD BE TREATED AS ACTUAL PAYMENT OF THE YEAR. AS FAR AS THIS ISSU E IS CONCERNED THE AO HAS STATED THAT THESE EXPENSES WERE NOT OUTSTANDING IN THE PREVIOUS YEAR GLANCE SHEET. EVEN BEFORE ME, NO SATISFACTORY EXPLANATION HAS BEEN TENDERED. I, THEREFORE, CONFIRM THE ADDITION. THIS GROUND OF APPEAL IS DISMISSED. 10. AFTE R GOING THROUGH THE ORDER PASSED BY THE AO AND THE LD FIRST APPELLATE AUTHORITY REPRODUCED ABOVE I AM OF THE VIEW THAT SMT. VEENA MANCHANDA IS A REGULAR INCOME TAX ASSESSEE AS STATED BY THE LD FIRST APPELLATE AUTHORITY. SINCE LONG SHE HAD AN OPENING BALANC E OF RS.15,00,000/ - WITH THE WITH THE APPELLANT FIRM. DURING THE YEAR RS.7 LACS I.E. 3 LACS ON 10.05.2010 AND RS. 4 LACS ON 20.12.2010 WERE DEPOSITED THROUGH CHEQUES. OUT OF RS.7 LACS THE AO DISALLOWED RS.2,50,000/ - ALLEGING THAT WHILE ISSUING THE CHEQUE O F RS.4 LACS A SUM OF RS.250000/ - WAS DEPOSITED CASH IN THE BANK IGNORING ALL THE FACTS AND FIGURES ON RECORD. DURING THE PROCEEDING THE APPELLANT HAS FURNISHED THE CONFIRMATION, BANK ACCOUNT, CAPITAL A/C AND BALANCE SHEET FOR THE YEAR ENDING 31.03.2010 AND 31.03.2011 I.E. OF LAST YEAR AND ALSO THE YEAR UNDER APPEAL. ACCORDING TO THE AO THESE DOCUMENTS HAVE NOT BEEN FURNISHED WITH THE RETURN OF INCOME AND HE RAISED THESE OBJECTIONS AFTER THOUGHT WHEREAS HE SHOULD NOT ACCEPT THE RETURN OF INCOME WITHOUT ALL T HESE ANNEXURES. ACCORDING TO THE DOCUMENTARY EVIDENCE FILED BY THE ASSESSEE THE ASSESSEE HAS EXPLAINED THE BANK DESPOIT OF RS.2,50,000/ - WHICH IS PAGE 9 OF 10 MENTIONED IN THE IMPUGNED ORDER AT PAGE 2. SMT VEENA MANCHANDA HAS ALSO FILED RETURN OF INCOME WITH COMPLETE A NNEXURES INCLUDING INCOME RETURNABLE, CAPITAL ACCOUNT AND BALANCE SHEET WITH ITO, REWARI WARD - 2 , WHICH WAS FOUND ON RECORD MEANING THEREBY THE ASSESSEE HAS DISCHARGED HIS ONUS BUT HE AO HAS NOT APPRECIATED THE SAME AND MADE THE ADDITION IN DISPUTE. SIMILARLY THE FIRST APPELLATE AUTHORITY HAS ALSO CONFIRMED THE SAME BY FOLLOWING THE FINDING OF THE AO WHICH IS CONTRARY TO LAW AND IS NOT PERMISSIBLE UNDER THE LAW. IN MY CONSIDERED VIEW THE AO HAS NOT DONE HIS DUTY BY MAKING FURTHER ENQUIRY ON THE EVIDE NCE FILED BY THE ASSESSEE AS WELL AS BY CALLING VEENA MANCHANDA FOR HER CROSS EXAMINATION BEFORE HIM. IN THE ABSENCE OF THE SAME I AM OF THE VIEW THAT THE ADDITION IN DISPUTE IS NOT SUSTAINABLE IN THE EYES OF LAW, MY VIEW IS SUPPORTED BY THE DECISION OF TH E HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. KINETIC CAPITAL FINANCE LTD. REPORTED IN (2013) 354 ITR 296 . KEEPING IN VIEW OF THE FACTS EXPLAINED ABOVE THE ADDITION OF RS.2,58,384/ - IS DELETED. AS REGARD TO THE ADDITION OF RS.30,100/ - AS A COMMISSION PAID TO SHRI MURARI LAL. I FOUND THAT SAME HAS ALSO WRONGLY BEEN MADE BY THE AO WITHOUT LOOKING INTO THE RECORD OF THE CASE. AFTER EXAMINING THE RECORD OF THE CASE I FIND THAT THESE EXPENDITURE OF RS.30,100/ - IS ALLOWABLE AND THE AO IS WRONGLY MADE THE ADD ITION IN DISPUTE. SIMILARLY THE FIRST APPELLATE AUTHORITY HAS ALSO WRONGLY UPHELD THE SAME AND THE SAME IS DESERVED TO BE DELETED. I DELETE THE ADDITION OF RS.30,100/ - INVOLVED IN GROUND NO.2. 11. KEEPING IN VIEW THE AFORESAID DISCUSSION I AM OF THE VIEW T HAT THE REVENUE AUTHORITY HAS PASSED ORDER CONTRARY IT IS NOT SUSTAINABLE IN THE EYES OF LAW, AND THE SAME IS DESERVED TO BE CANCELLED. I CANCEL THE IMPUGNED ORDER BY ALLOWING THE APPEAL FILED BY THE ASSESSEE. IN THE RESULT APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 1 4 T H AUGUST , 2015 . - S D / - ( H.S.SIDHU ) ACCOUNTANT MEMBER DATED: 1 4 T H AUGUST, 2015 AKK PAGE 10 OF 10 COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR