Smt Sudha Gupta, Agra V. I.T.O.-4(2), Agra

ITA 379/AGR/2012

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 0564 (ITAT-AGRA)
• Duration Of Justice: 6 year(s) 9 month(s) 20 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 16-05-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 31-01-2013
• Assessment Year: 2005-2006
• Appeal Filed On: 26-07-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: KK MISHRA
• Assessee Lawyers: GAURAV GOYAL
• Keywords: Unexplained cash credit; Income from undisclosed sources; Question of law
• Section: 131; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, AGRA(SMC) BENCH, AGRA BEFORE : SHRI BHAVNESH SAINI, JUDICIAL MEMBER ITA NO. 379/AGRA/2012 ASSTT. YEAR : 2005-06 SMT. SUDHA GUPTA, VS. INCOME-TAX OFFICER, GALLA MANDI, FATEHABAD, AGRA. 4(2), AGRA. (PAN :AEGPG 8477 F) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI GAURAV GOYAL, C.A. RESPONDENT BY : SHRI K.K. MISHRA, JR. D.R. DATE OF HEARING : 31.01.2013 DATE OF PRONOUNCEMENT OF ORDER : 08.02.2013 ORDER THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF LD. CIT(A)-II, AGRA DATED 16.03.2012 FOR THE ASSESSMENT YEAR 2005- 06, CHALLENGING THE ADDITION OF RS.1,20,000/- ON ACCOUNT OF UNEXPLAINED CREDIT U /S. 68 OF THE IT ACT IN RESPECT OF FIVE CREDITORS. 2. BRIEFLY, THE FACTS OF THE CASE ARE THAT THE ASSE SSEE FILED RETURN OF INCOME AT RS.2,09,850/-. DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE HAS DERIVED INCOME FROM HOUSE PROPERTY, INTEREST FROM M/S. URMI LA OIL INDUSTRIES WHERE SHE HAS 29% SHARE IN THE PROFIT OF FIRM; INCOME FROM TR UCK U/S. 44AE AND INCOME FROM OTHER SOURCES, I.E., BANK INTEREST AND NSC INTEREST . DURING THE YEAR UNDER ITA NO. 379/AGRA/2012 2 CONSIDERATION, THE ASSESSEE PURCHASED A HOUSE AT VI BHAV NAGAR, AGRA IN A SUM OF RS.16,84,000/- INCLUDING REGISTRATION EXPENSES OF R S.1,84,000/-. INVESTMENT IN THE PURCHASE OF PROPERTY HAS BEEN MADE OUT OF HOUSE LOA N SANCTIONED FOR RS.12,00,000/- BY HDFC BANK LTD, AGRA AND OUT OF TH E LOAN RAISED FROM OTHER PERSONS TABULATED AT PAGE 2 OF THE ASSESSMENT ORDER , WHICH INCLUDES UNEXPLAINED CASH CREDITS OF FIVE PERSONS UNDER CHALLENGE IN THE PRESENT APPEAL. THE AO DIRECTED THE ASSESSEE TO PROVE THE IDENTITY OF THE CREDITORS , THEIR CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTION AND TO PRODUCE ALL T HESE PERSONS FOR EXAMINATION WITH PROOF OF THEIR IDENTITY AND CAPACITY TO ADVANC E LOAN. OUT OF 9 PERSONS (CREDITORS), THE ASSESSEE PRODUCED SEVEN PERSONS AN D THEIR STATEMENTS WERE RECORDED BY THE AO. A GIST OF THE SAME UNDER CONSID ERATION ARE AS UNDER : (I). SHRI OM PRAKASH GUPTA : HIS STATEMENT WAS RECORDED AND THE ASSESSEE IS HIS DAUGHTER. HIS SOURCE OF INCOME IS PENSION AS RETIRED ON 31.03.199 3 FROM THE POST OF PATWARI IN FATEHABAD TEHSIL AND RECEIVING PENSION O F RS.3600/- PER MONTH. HE ALSO DEALT IN PURCHASE AND SALE OF BUFFALOES AND ALSO DOING SOME PART TIME JOB. HE IS NOT ASSESSED TO TAX. HE HAS GIVEN L OAN OF RS.20,000/- ON 07.07.2004 BY CHEQUES TO THE ASSESSEE AND ALSO GAVE ANOTHER LOAN OF RS.30,000/- ON 08.07.2004 BY CHEQUES. HIS BANK ACCO UNT REVEALED THAT ITA NO. 379/AGRA/2012 3 BEFORE ADVANCING LOAN OF RS.20,000/- ON 07.07.2004, SHRI OM PRAKASH GUPTA HAD MADE A DEPOSIT OF CASH OF RS.40,000/- ON 10.06.2004 AND CASH DEPOSIT OF RS.10,000/- ON 02.07.2004 IN HIS BANK AC COUNT WHEREAS ON 07.06.2004, THERE WAS A BALANCE OF RS.215/- ONLY. T HIS CREDITOR CLAIMED AVAILABILITY OF CASH ON SALE OF BUFFALOES BUT NO EV IDENCE WAS AVAILABLE WITH HIM FOR SALE OF BUFFALOES. THE AO ALSO FOUND THAT I N HIS BANK ACCOUNT, BEFORE THE LOAN WAS GIVEN, THERE IS A CASH DEPOSIT AND BAL ANCE AVAILABLE ON 06.07.2004 WAS RS.13,951/- ONLY. THE AO ACCEPTED HI S CREDITWORTHINESS TO THE EXTENT OF RS.30,000/- AND RS.20,000/- WAS ADDED IN THE HANDS OF THE ASSESSEE U/S. 68 ON ACCOUNT OF THIS CREDITOR. (II). SHRI HARI PRASAD GUPTA : THIS CREDITOR IS STATED TO HAVE EXPIRED AND HIS SON RAM MOHAN GUPTA APPEARED BEFORE THE AO AND WAS EXAMINED AND STATED THAT HIS FATHER EARNED INCOME FROM RUNNING SHOP OF TOFFEE, BISCUITS ETC AN D HIS FATHER WAS ALSO IN THE BUSINESS OF SALE AND PURCHASE OF BUFFALOES AND MILK. REGARDING THE AMOUNT OF RS.40,000/- GIVEN TO THE ASSESSEE, IT WAS STATED THAT IT WAS GIVEN THROUGH CHEQUES ON 07.07.2004 OUT OF BANK ACCOUNT O F HIS FATHER. THE AO ON EXAMINATION OF THE BANK ACCOUNT FOUND THAT CASH OF RS.40,000/- WAS DEPOSITED ON THE SAME DAY IN HIS BANK ACCOUNT ON 07 .07.2004 AND ON ITA NO. 379/AGRA/2012 4 06.07.2004, THERE WAS A BALANCE OF RS.12,723/- ONLY IN HIS BANK ACCOUNT. THEREFORE, THE SOURCE OF THE CREDIT IS NOT EXPLAINE D AND ADDITION OF RS.40,000/- WAS ACCORDINGLY MADE. (III). SHRI DINESH CHAND GUPTA : HE IS ALSO STATED TO HAVE EXPIRED. HIS SON SHRI MUN INDRA GUPTA APPEARED BEFORE THE AO. HIS STATEMENT WAS RECORDED. THE SOURCE OF INCOME OF THIS CREDITOR WAS SALARY OF RS.3500/- ON BEING A CCOUNTANT. IT WAS ALSO FOUND THAT THE LOAN WAS GIVEN OF RS.20,000/- TO THE ASSESSEE ON 10.07.2004 AND THERE IS CASH DEPOSIT OF RS.20,000/- IN HIS BAN K ACCOUNT ON THE SAME DAY ON 10.07.2004 AND ON 10.06.2004, THERE WAS A BALANC E OF RS.2544/- ONLY IN HIS BANK ACCOUNT. SINCE THE SOURCE OF CREDIT WAS NO T EXPLAINED, THEREFORE, THE ADDITION WAS MADE. (IV). SMT. SHANTI DEVI BARUA : SHE WAS NOT PRODUCED BEFORE THE AO FOR EXAMINATION. SHE HAS GIVEN LOAN OF RS.20,000/- ON 10.07.2004 TO THE ASSESSEE A ND ON 09.07.2004, THERE WAS A DEPOSIT OF RS.20,000/- IN HIS BANK ACCOUNT. T HOUGH PRIOR TO THIS DATE, THERE WAS A BALANCE OF RS.28,773/- IN HER BANK ACCO UNT BUT IT WAS NOT EXPLAINED AS TO WHY THERE WAS A DEPOSIT OF AMOUNT E QUIVALENT TO LOAN. ITA NO. 379/AGRA/2012 5 THEREFORE, THE LOAN WAS NOT FOUND TO BE GENUINE AND ADDITION WAS ACCORDINGLY MADE. (V). SMT. SUNITA BARUA : SHE WAS ALSO NOT PRODUCED BEFORE THE AO FOR EXAMINA TION. SHE HAS GIVEN LOAN OF RS.20,000/- TO THE ASSESSEE ON 10.07. 2004 AND SIMILARLY CASH OF THE EQUIVALENT AMOUNT WAS DEPOSITED IN HER BANK ACCOUNT ON 09.07.2004 AND PRIOR TO THAT THERE WAS A BANK BALANCE IN HER B ANK ACCOUNT OF RS.5350/- ONLY. LOAN WAS NOT CONSIDERED GENUINE AND SOURCE WA S NOT EXPLAINED AND ADDITION WAS ACCORDINGLY MADE. 2.1 THE LD. CIT(A) CONFIRMED THE ADDITION AND DISMI SSED THE APPEAL OF THE ASSESSEE. 3. THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW AND SUBMITTED THAT IN CASE OF ALL THE FIVE CREDITORS ABOVE, AFFIDAVITS OF THE CREDITORS OR THEIR LEGAL HEIRS WE RE FILED ALONG WITH BANK ACCOUNTS OF THE CREDITORS AND ALL ARE RELATED TO THE ASSESSE E WHO HAVE GIVEN LOANS TO THE ASSESSEE FOR PURCHASE OF THE PROPERTY. HE HAS SUBMI TTED THAT THREE OF THE CREDITORS OR THEIR LEGAL HEIRS WERE PRODUCED BEFORE THE AO, T HEIR STATEMENTS HAVE BEEN ITA NO. 379/AGRA/2012 6 RECORDED IN WHICH THEY HAVE CONFIRMED GIVING OF LOA NS TO THE ASSESSEE AS ALSO IN THE AFFIDAVIT & COPY OF CONFIRMATION OF ACCOUNT. TH EREFORE, THE ONUS BY THE ASSESSEE HAS BEEN DISCHARGED. HE HAS RELIED UPON TH E DECISION OF SUPREME COURT IN THE CASE OF CIT VS. ORISSA CORPORATION (P) LTD., 15 9 ITR 78 (SC), DECISION OF GUJRAT HIGH COURT IN THE CASE OF ROHINI BUILDERS, 2 56 ITR 360, DECISION OF SUPREME COURT IN THE CASE OF CIT VS. DAULAT RAM RAW ATMULL, 87 ITR 349 AND DECISION OF GUJRAT HIGH COURT IN THE CASE OF CIT VS . PRAGATI CO.OP. BANK LTD., 278 ITR 170 (GUJ) AND OTHER DECISIONS IN THE LIST OF PA PERS. THE LD. COUNSEL FOR THE ASSESSEE, HOWEVER, WAS NOT ABLE TO POINT OUT WHETHE R IN THESE DECISIONS, THERE WERE CASH DEPOSITS OF THE EQUIVALENT AMOUNT PRIOR TO GIV ING OF THE CHEQUES BY THE CREDITORS WHICH IS FOUND IN THE CASE OF THE ASSESSE E. ON THE OTHER HAND, THE LD. DR RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW. 4. I HAVE CONSIDERED THE RIVAL SUBMISSIONS AND THE MATERIAL ON RECORD. THE FACTS OF THE ASSESSEES CASE ARE IDENTICAL AS HAVE BEEN C ONSIDERED BY THE DIVISION BENCH OF ITAT, AGRA BENCH IN THE CASE OF SMT. SUMAN GUPTA VS. ITO IN ITA NO. 454/AGRA/2009 DECIDED ON 16.03.2012 (REPORTED IN 13 8 ITD 153), IN WHICH THE DIVISION BENCH HELD IN PARA 9 TO 13 AS UNDER : 9. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND T HE MATERIAL AVAILABLE ON RECORD. IT IS NOT IN DISPUTE THAT THERE WERE CASH DEPOSITS OF THE EQUIVALENT AMOUNTS IN THE BANK ACCO UNTS OF THE CREDITORS JUST BEFORE ADVANCING LOAN TO THE ASSESSE E OR ON THE DATE OF ITA NO. 379/AGRA/2012 7 ISSUING CHEQUES TO THE ASSESSEE. IN THE CASE OF THE CREDITOR, SHRI RAMPAL SINGH, HIS BANK STATEMENT IS FILED AT PAGE 4 5 OF THE PAPER BOOK, IN WHICH RS.2,50,000/- HAS BEEN DEPOSITED, BU T NEITHER IT IS MENTIONED THAT IT WAS CASH NOR IT IS MENTIONED HOW THE AMOUNT SIMILAR TO THE CREDIT WAS CREDITED IN HIS BANK ACCOUNT. NO EXPLANATION IS GIVEN BEFORE THE AUTHORITIES BELOW AND EVEN DURING THE CO URSE OF ARGUMENTS BEFORE US. NOTHING IS CLARIFIED AS TO HOW EQUIVALEN T AMOUNT OF CASH CREDIT WAS DEPOSITED IN HIS BANK ACCOUNT. IN THE CA SE OF REMAINING CREDITORS, IT IS NOT A DENYING FACT THAT EQUIVALENT AMOUNTS OF CASH CREDIT WAS DEPOSITED IN THEIR BANK ACCOUNTS IN CASH FOR ISSUING CHEQUES IN FAVOUR OF THE ASSESSEE. THIS CREATED SERIOUS DOU BT IN THE EXPLANATION OF THE ASSESSEE REGARDING GENUINENESS OF THE TRANSA CTION IN THE MATTER. THE AO ASKED THE ASSESSEE TO PRODUCE ALL THE CREDIT ORS FOR EXAMINATION ON OATH IN ORDER TO FIND OUT TRUTH IN T HE MATTER. THE ASSESSEE PRODUCED ONE OF THE CREDITORS BEFORE THE A O FOR EXAMINATION, BUT SHOWED HIS INABILITY TO PRODUCE OTHER CREDITORS , WHICH IS ALSO CLEAR FROM THE ORDER SHEET DATED 18.12.2007 (PB-126). PRI OR TO THAT, THE ASSESSEE SOUGHT TIME FROM THE AO TO PRODUCE REMAINI NG CREDITORS FOR EXAMINATION, BUT LATER ON DID NOT PRODUCE THEM. THE LD. COUNSEL FOR THE ASSESSEE EXPLAINED THAT DUE TO ONE OR OTHER PRO BLEM OF THE REMAINING CREDITORS ON ACCOUNT OF MEDICAL ADVICE, T HE DEPOSITORS HAVE SHOWN THEIR INABILITY TO APPEAR BEFORE THE AO FOR E XAMINATION, BUT IT IS ADMITTED FACT THAT THE ASSESSEE DID NOT MAKE ANY REQUEST BEFORE THE AO FOR EXAMINATION OF THE REMAINING CREDITORS THROU GH THE COMMISSION AND NO WILLINGNESS WAS SHOWN BEFORE THE CIT(A) FOR PRODUCTION OF THE REMAINING CREDITORS FOR EXAMINATI ON EVEN AT THE REMAND STAGE IN THE APPELLATE PROCEEDINGS. EVEN DUR ING THE COURSE OF ARGUMENTS BEFORE THE TRIBUNAL, THE LD. COUNSEL FOR THE ASSESSEE DID NOT SHOW HIS WILLINGNESS TO PRODUCE REMAINING CREDITORS FOR EXAMINATION BEFORE THE AO. IT IS, THEREFORE, CLEAR THAT THE ASS ESSEE HAS FAILED TO PRODUCE THE REMAINING CREDITORS FOR EXAMINATION BY THE REVENUE DEPARTMENT IN ORDER TO FIND OUT TRUTH IN THE MATTER . 9.1 THE AO DISCUSSED EACH AND EVERY CREDITOR IN THE ASSESSMENT ORDER AND THE CRUX OF THE FINDINGS OF THE AO HAD BE EN THAT THERE WERE VERY SMALL BANK BALANCES IN THE BANK ACCOUNTS OF TH E CREDITORS AND THEY WERE HAVING MEAGER INCOME AND AS SUCH, THEY WE RE NOT MEN OF MEANS TO ADVANCE ANY LOAN TO THE ASSESSEE. IN THE C ASE OF ABHAY MAHESHWARI, THERE WAS VERY SMALL BALANCE OF RS.3528 /- IN HIS BANK ACCOUNT. HE WAS EXAMINED ON OATH AND HE WAS NOT ABL E TO GIVE SOURCE ITA NO. 379/AGRA/2012 8 OF CASH DEPOSIT TO THE SATISFACTION OF THE AO. HE W AS EARNING HARDLY ONE LAC RUPEES AND SPENT 40,000/- TO 50,000/- FOR H OUSEHOLD PURPOSES. DURING HIS EXAMINATION ON OATH, HE WAS NOT ABLE TO SATISFACTORILY EXPLAIN THE AVAILABILITY OF FUNDS WITH HIM FOR GIVI NG LOAN TO THE ASSESSEE. IN HIS CASE, HE HAS FILED RETURN OF INCOM E FOR THE ASSESSMENT YEAR UNDER APPEAL AT RS.1,02,850/- (PB-60). IN THE CASE OF SHRI AMIT MAHESHWARI, HE WAS ALSO HAVING SMALL BANK BALANCE O F RS.2429/- BEFORE ISSUE OF CHEQUE TO THE ASSESSEE AND EQUAL AM OUNT OF THE CASH CREDIT WAS DEPOSITED IN THE BANK ACCOUNT. HE HAS FI LED RETURN OF INCOME FOR THE ASSESSMENT YEAR UNDER APPEAL AT RS.4 4972/- (PB-71). IN THE CASE OF SMT. KEERTI MAHESHWARI, IN HER BANK ACCOUNT, THERE WAS BALANCE OF RS.4688/- ONLY PRIOR TO ISSUE OF CHEQUE TO THE ASSESSEE AND EQUIVALENT AMOUNT OF CASH CREDIT WAS DEPOSITED FOR THE PURPOSE OF ISSUE OF CHEQUE IN FAVOUR OF THE ASSESSEE. FOR THE ASSESSMENT YEAR UNDER APPEAL, SHE HAS FILED RETURN OF INCOME AT RS. 1,01,000/- ONLY. IN THE CASE OF SMT. MITHLESH MAHESHWARI, THE BANK BALA NCE BEFORE ISSUE OF CHEQUE WAS RS.10,794/- AND EQUIVALENT AMOUNT OF CASH CREDIT WAS DEPOSITED IN HER BANK ACCOUNT FOR ISSUE OF CHEQUE I N FAVOUR OF ASSESSEE. FOR ASSESSMENT YEAR UNDER APPEAL, SHE FIL ED RETURN OF INCOME AT RS.1,02,476/- ONLY. IN THE CASE OF SH. RAMPAL SI NG, IT IS ALREADY NOTED ABOVE THAT THE DEPOSIT ENTRY IN HIS CASE IS N OT EXPLAINED AND PRIOR TO ISSUE OF CHEQUE, THERE WAS BANK BALANCE OF RS.3708/- ONLY. HE HAS FILED THE RETURN OF INCOME FOR THE ASSESSMENT Y EAR UNDER APPEAL AT LOSS WITH AGRICULTURAL INCOME (PB-102). IN THE CASE OF SHRI SHARIQ ALI KHAN, THE BANK BALANCE IS HIS ACCOUNT WAS RS.1055/- PRIOR TO ISSUE OF CHEQUE AND EQUIVALENT CASH AMOUNT WAS DEPOSITED FOR ISSUING CHEQUE IN FAVOUR OF THE ASSESSEE. HE HAS FILED RETURN OF I NCOME AT RS.70,373/- PLUS AGRICULTURAL INCOME (PB-116). THESE DETAILS NO TED IN THE ASSESSMENT ORDER AND THE DETAILS VERIFIED FROM THE PAPER BOOK WOULD CLEARLY SUPPORT THE FINDINGS OF THE AO THAT NONE OF THE CREDITORS WERE PERSONS OF SUFFICIENT MEANS TO ADVANCE ANY LOAN TO THE ASSESSEE. FILING OF BALANCE SHEETS, CASH FLOW STATEMENTS, CASH BOOKS ETC. HAVE NO EVIDENTIARY VALUE BECAUSE ACCORDING TO THE REMAND R EPORT FILED BY THE AO, THOSE DOCUMENTS WERE NOT FILED WITH THE RETURN OF INCOME. MOREOVER, NO REGULAR BOOKS OF ACCOUNT HAVE BEEN MAI NTAINED BY ANY OF THE CREDITORS AND MAJORITY OF THEM HAVE SHOWN ES TIMATED INCOME IN THEIR RETURNS OF INCOME. THEREFORE, SUCH BALANCE SH EET, CASH FLOW STATEMENTS ETC. WOULD NOT SUPPORT THE CONTENTION OF THE ASSESSEE THAT GENUINE CREDITS HAVE BEEN RECEIVED. THE ORDER SHEET NOTED BY THE AO WOULD ALSO SHOW THAT THE ASSESSEE HAS MADE NO EFFOR TS TO PRODUCE THE ITA NO. 379/AGRA/2012 9 REMAINING CREDITORS BEFORE THE AO. EVEN IN THE STAT EMENT OF ONE OF THE CREDITORS RECORDED BY THE AO, SHRI AMBHAY MAHESHWAR I, HE WAS NOT ABLE TO EXPLAIN HIS SOURCE OF DEPOSIT OR ADVANCING LOAN TO THE ASSESSEE THROUGH GENUINE SOURCE. IT IS WELL SETTLED LAW THAT BURDEN IS UPON THE ASSESSEE TO PROVE INGREDIENTS OF SECTION 68 OF THE ACT BY PROVING IDENTITY AND CREDITWORTHINESS OF THE CREDITORS AND GENUINENESS OF THE TRANSACTIONS. THE ASSESSEE HAS, HOWEVER, FAILED TO PROVE THE CREDITWORTHINESS OF THE CREDITORS WHO WERE HAVING O NLY MEAGER INCOME. NO DETAILS OF THEIR SAVINGS HAVE BEEN FILED . THE ASSESSEE HAS NEVER SHOWN HIS WILLINGNESS TO PRODUCE THE REMAININ G CREDITORS FOR EXAMINATION BEFORE THE AO. THEREFORE, THE GENUINENE SS OF THE TRANSACTION COULD NOT HAVE BEEN EXAMINED BY THE AO. THE SMALLNESS OF THE BANK BALANCE IN THE BANK ACCOUNTS OF THE CRE DITORS PRIOR TO ISSUE OF CHEQUES WOULD CLEARLY REVEAL THAT THEY WERE NOT HAVING ANY SOURCE AND IT WAS THE MONEY OF THE ASSESSEE WHICH WAS ROUT ED THROUGH THE BANK ACCOUNTS OF THE CREDITORS FOR THE PURPOSE OF G IVING CREDITS TO THE ASSESSEE. THESE WERE, THEREFORE, ACCOMMODATION ENTR IES ONLY AND AS SUCH, COULD NOT BE CONSIDERED AS GENUINE TRANSACTIO NS. MERELY BECAUSE THE LOANS HAVE BEEN RECEIVED THROUGH BANKING CHANNE L, IS NOT SACROSANCT TO MAKE A NON-GENUINE TRANSACTION AS GEN UINE TRANSACTION. 10. HONBLE CALCUTTA HIGH COURT IN THE CASE OF BHAR ATI PVT. LTD. VS. CIT, 111 ITR 951 HELD AS UNDER : IN THE COURSE OF ASSESSMENT PROCEEDINGS, THE INCOM E-TAX OFFICER FOUND THAT THE ASSESSEE HAD SHOWN RS.20,000 AS LOAN IN ITS BOOKS TAKEN FROM TWO PARTIES. THE ASSESSEE PROD UCED THE ALLEGED CONFIRMATORY LETTERS FROM THOSE PARTIES BEF ORE THE INCOME-TAX OFFICER IN SUPPORT OF THE TWO LOANS. THE INCOME-TAX OFFICER SERVED NOTICES UNDER SECTION 131 OF THE INC OME TAX ACT, 1961, ON THE ALLEGED CREDITORS AND SINCE THOSE NOTI CES CAME BACK UNSERVED, THE INCOME-TAX OFFICER TREATED THE L OAN AS ASSESSEES INCOME FROM UNDISCLOSED SOURCES. THE APP ELLATE ASSISTANT COMMISSIONER DISMISSED THE ASSESSEES APP EAL ON THE GROUND THAT THE ASSESSEE COULD NOT EVEN ESTABLISH T HE IDENTITY OF THE PARTIES. ON FURTHER APPEAL BY THE ASSESSEE, THE APPELLATE TRIBUNAL HELD THAT MERE FILING OF CONFIRMATORY LETT ERS DID NOT DISCHARGE THE ONUS THAT LAY ON THE ASSESSEE AND THE RE WAS NO MATERIAL ON THE RECORD TO ESTABLISH THE IDENTITY OF THE CREDITORS: ITA NO. 379/AGRA/2012 10 HELD, THAT THE TRIBUNAL HAD TAKEN ALL THE RELEVANT FACTS INTO CONSIDERATION AND THE CONCLUSION ARRIVED AT BY THE TRIBUNAL THAT THE LOANS REPRESENTED THE ASSESSEES INCOME FROM UNDISCLOSED SOURCES WAS NOT PERVERSE OR UNREASONABL E. 10.1 THE HONBLE CALCUTTA HIGH COURT IN THE CASE OF CIT VS UNITED COMMERCIAL AND INDUSTRIAL CO. (P) LTD., 187 ITR 596 HELD AS UNDER: THE PRIMARY ONUS LIES ON THE ASSESSEE TO PROVE THE NATURE AND SOURCE OF CREDITS IN ITS ACCOUNT. IT IS NECESSARY FOR THE ASSESSEE TO PROVE PRIMA FACIE THE IDENTITY OF H IS CREDITORS, THE CAPACITY OF SUCH CREDITORS TO ADVANCE THE MONEY AND LASTLY THE GENUINENESS OF THE TRANSACTIONS. ONLY WHEN THES E THINGS ARE PROVED BY THE ASSESSEE PRIMA FACIE AND ONLY AFTER T HE ASSESSEE HAS ADDUCED EVIDENCE TO ESTABLISH THE AFORESAID FAC TS DOES THE ONUS SHIFT ON TO THE DEPARTMENT. IT IS NOT ENOUGH T O ESTABLISH THE IDENTITY OF THE CREDITORS. MERE PRODUCTION OF THE C ONFIRMATION LETTERS BEFORE THE INCOME-TAX OFFICER WOULD NOT BY ITSELF PROVE THAT THE LOANS HAVE BEEN OBTAINED FROM THOSE LOAN C REDITORS OR THAT THEY HAVE CREDIT-WORTHINESS. HELD, THAT, IN THE INSTANT CASE, THE TRIBUNAL MISDI RECTED ITSELF IN HOLDING THAT THE TRANSACTIONS WERE GENUIN E SIMPLY BECAUSE SOME OF THE TRANSACTIONS WERE MADE BY CHEQU ES. THE ASSESSEE HAD FAILED TO PROVE THE CREDIT-WORTHINESS OF THE ALLEGED LENDERS. A NUMBER OF OTHER ASSESSEES HAD ALSO ADMIT TED THAT LOANS OBTAINED FROM THESE BANKERS AGAINST HUNDIS WE RE NOT GENUINE AND SUCH HUNDI LOANS REALLY REPRESENTED THE IR OWN CONCEALED INCOME. THE ASSESSEE HAD NOT DISCHARGED I TS BURDEN OF PROVING THAT THE LOANS IN QUESTION WERE GENUINE. 10.2 HONBLE CALCUTTA HIGH COURT IN THE CASE OF M /S. PRECISION FINANCE PVT. LTD., 208 ITR 465 HELD THAT EVEN THE LOAN THROUGH BANK CANNOT BE ACCEPTED AS GENUINE UNLESS THE IDENT ITY AND CREDITWORTHINESS OF THE CREDITORS ARE PROVED. MERE PAYMENT OF ACCOUNT PAYEE CHEQUE IS NOT SACROSANCT NOR CAN IT M AKE A NON- GENUINE TRANSACTION GENUINE. 10.3 THE HONBLE SUPREME COURT IN THE CASE OF DU RGA PRASAD MORE, 82 ITR 540 AND SUMATI DAYAL, 214 ITR 801 HELD THAT THE ITA NO. 379/AGRA/2012 11 COURTS AND TRIBUNAL HAVE TO JUDGE THE EVIDENCES BEF ORE THEM BY APPLYING THE TEST OF HUMAN PROBABILITIES AFTER CONS IDERING THE SURROUNDING CIRCUMSTANCES. 11. ON CONSIDERATION OF THE FACTS OF THE CASE IN TH E LIGHT OF ABOVE DISCUSSION AND DECISION, WE DO NOT FIND ANY JUSTIFI CATION TO INTERFERE WITH THE ORDER OF THE LD. CIT(A). THE ASSESSEE HAS FAILED TO PROVE THE CREDITWORTHINESS OF ALL THE CREDITORS AND NO SOURCE OF THEIR INCOME HAS BEEN FILED. AT THE BEST THE ASSESSEE IS ABLE TO PRO VE IDENTITY OF THE CREDITORS, BUT THE ASSESSEE FAILED TO PROVE THE GEN UINE CREDIT IN THE MATTER. ALL THE CREDITORS HAVE BEEN RIGHTLY FOUND T O BE MEN OF MEAGER MEANS AND NO SOURCE OF INCOME HAVE BEEN FILED TO PR OVE THAT THEY WERE HAVING SUFFICIENT FUNDS OR SAVINGS IN ORDER TO GIVE LOANS TO THE ASSESSEE. ON VERIFICATION OF THE BANK ACCOUNT OF TH E DEPOSITORS, IT WAS SPECIFICALLY FOUND THAT THERE WERE NO SUFFICIENT FU NDS AVAILABLE IN THEIR BANK ACCOUNT AND THEY WERE HAVING ONLY SMALL BANK B ALANCE, WHICH WAS EVEN NOT SUFFICIENT TO MEET OUT THEIR HOUSEHOLD EXPENSES OR DAY- TO-DAY REQUIREMENTS. THEREFORE, IT IS UNBELIEVABLE TO ACCEPT THE CONTENTION OF THE ASSESSEE THAT SAID PERSONS WERE H AVING CREDITWORTHINESS TO ADVANCE ANY LOAN TO THE ASSESSE E. THE DOCUMENTS PRODUCED BY THE LD. COUNSEL FOR THE ASSESSEE IN THE PAPER BOOK MERELY PROVE THE CASE OF ASSESSEE SUPERFICIALLY, WHICH IS FAR FROM REALITY OR TRUTH. WHEN THE TEST OF HUMAN PROBABILITIES AFTER C ONSIDERING THE SURROUNDING CIRCUMSTANCES AS IS PROPOUNDED BY HONB LE SUPREME COURT IN THE CASE OF DURGA PRASAD MORE (SUPRA) AND SUMATI DAYAL VS. CIT (SUPRA), IS APPLIED TO THE FACTS OF THE CASE, I T IS CLEAR THAT THE LD. CIT(A) WAS JUSTIFIED IN CONFIRMING THE ADDITION U/S . 68 OF THE IT ACT. IN THE PRESENT CASE, THE ASSESSEE HAS NOT ADDUCED A NY SUFFICIENT EVIDENCE BEFORE THE AUTHORITIES BELOW TO PROVE THE CREDITWORTHINESS OF THE CREDITORS AND GENUINENESS OF THE TRANSACTIONS I N THE MATTER. THEREFORE, THE ASSESSEE HAS NOT SATISFIED THE ESSEN TIAL INGREDIENTS OF SECTION 68 OF THE IT ACT. 12. IN THE CASE OF ROHINI BUILDERS AND U.M. SHAH (S UPRA), THE DEPARTMENTAL APPEAL WAS DISMISSED FINDING NO SUBSTA NTIAL QUESTION OF LAW BECAUSE THE FINDINGS OF THE TRIBUNAL WERE BASED ON APPRECIATION OF EVIDENCE. 12.1 IN THE CASE OF CIT VS. ORISSA CORPORATION P. L TD (SUPRA), IT WAS ALSO HELD THAT THE REVENUE DID NOT EXAMINE SOURCE O F INCOME OF THE ITA NO. 379/AGRA/2012 12 SAID ALLEGED CREDITORS WHEN THEY WERE ASSESSED TO T AX TO FIND OUT WHETHER THEY WERE CREDITWORTHY. HOWEVER, IN THE PRE SENT CASE, THE AUTHORITIES BELOW HAVE SPECIFICALLY FOUND THAT ALL THE CREDITORS WERE NOT MEN OF MEANS AND AS SUCH, THEIR CREDITWORTHINES S WAS NOT PROVED AT ALL. THEREFORE, THE DECISION CITED BY THE LD. CO UNSEL FOR THE ASSESSEE WOULD NOT SUPPORT THE CASE OF THE ASSESSEE. 13. CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE IN THE LIGHT OF FINDINGS OF THE AUTHORITIES BELOW, WE DO NOT FIN D ANY IRREGULARITY OR ILLEGALITY IN THE ORDERS OF THE AUTHORITIES BELOW. WE CONFIRM THEIR FINDINGS AND DISMISS THE APPEAL OF THE ASSESSEE ON THIS GROUND. CONCISE GROUNDS NOS. 1 & 2 ARE, ACCORDINGLY, DISMIS SED. 4.1 THE ABOVE DECISION OF THE TRIBUNAL HAS BEEN CON FIRMED BY HONBLE JURISDICTIONAL ALLAHABAD HIGH COURT IN INCOME-TAX APPEAL NO. 680 OF 2012 IN THE CASE OF SMT. SUMAN GUPTA VS. CIT VIDE ORDER DATED 0 7.08.2012 & THE APPEAL OF THE ASSESSEE HAS BEEN DISMISSED CONFIRMING THE ABOVE OR DER OF THE TRIBUNAL. THE DECISIONS CITED BY THE LD. COUNSEL FOR THE ASSESSEE WERE ALSO CITED BEFORE THE HONBLE HIGH COURT FOR CONSIDERATION. 4.2 CONSIDERING THE FACTS OF THE CASE IN THE LIGHT OF THE ABOVE DECISION, IT IS CLEAR THAT IN THE CASE OF CREDITOR SHRI OM PRAKASH GUPTA, THERE WAS A CASH DEPOSIT OF THE EQUIVALENT AMOUNT PRIOR TO THE ISSUE OF CHEQUES IN FAVOUR OF THE ASSESSEE AND ON 07.06.2004, THERE WAS BANK BALANCE OF RS.215/- ONLY . FURTHER, NO EVIDENCE HAS BEEN PRODUCED FOR AVAILABILITY OF THE SOURCE ON SAL E OF BUFFALOES. HE WAS GETTING MEAGER PENSION OF RS.3600/- PER MONTH. IN THE CASE OF HARI PRASAD GUPTA, CREDITOR, ITA NO. 379/AGRA/2012 13 SIMILARLY CASH OF RS.40,000/- WAS DEPOSITED ON THE DAY OF GIVING OF CHEQUES TO THE ASSESSEE OF THE EQUIVALENT AND THERE WAS BANK BALAN CE OF RS.12723/- ONLY. IN THE CASE OF DINESH CHAND GUPTA, EQUIVALENT AMOUNT OF LO AN WAS DEPOSITED IN THE BANK ACCOUNT ON THE SAME DAY AND PRIOR TO THAT THERE WAS A BANK BALANCE OF RS.2544/- ONLY. IN THE CASE OF SMT. SHANTI DEVI AND SMT. SUNI TA BARUA, CASH OF RS.20,000/- EACH WAS DEPOSITED IN THEIR BANK ACCOUNT ONE DAY PR IOR TO THE ISSUE OF CHEQUES OF EQUIVALENT AMOUNT IN FAVOUR OF THE ASSESSEE. THERE ARE NO EXPLANATION WHY CASH WAS DEPOSITED BEFORE ISSUE OF CHEQUES OF THE EQUIVA LENT AMOUNT IN FAVOUR OF THE ASSESSEE AND IN CASE OF SMT. SUNITA BARUA, EARLIER BALANCE WAS RS.5350/- ONLY. THUS, NONE OF THE ABOVE CREDITORS WERE HAVING ANY E VIDENCE OF SOURCE OF THEIR EARNING TO ADVANCE ANY LOAN TO THE ASSESSEE. THEY H AVE FAILED TO EXPLAIN WHY CASH OF THE EQUIVALENT AMOUNTS OF LOAN WERE DEPOSITED IN THEIR BANK ACCOUNT PRIOR TO ISSUE OF CHEQUES IN FAVOUR OF THE ASSESSEE. ALL THE CREDITORS ARE NOT ASSESSED TO TAX AND IN THEIR AFFIDAVITS ALSO THEY HAVE NOT EXPLAINE D THEIR SOURCE OF GIVING LOAN TO THE ASSESSEE. SMT. SHANTI DEVI AND SMT. SUNITA BARU A WERE NOT EVEN PRODUCED BEFORE THE AO FOR EXAMINATION. THEREFORE, THEIR AFF IDAVITS COULD NOT BE SUBJECTED TO EXAMINATION BY THE AO. THE AFFIDAVIT IS LIKE AN EXA MINATION-IN-CHIEF AND UNLESS THE DEPONENTS OF THE AFFIDAVITS HAVE BEEN PRODUCED, THE SAME COULD NOT BE SUBJECTED TO CROSS-EXAMINATION AND SUCH AFFIDAVITS IN THEIR CASES CANNOT BE RELIED UPON TO EXPLAIN THEIR CREDITWORTHINESS AND GENUINEN ESS OF THE TRANSACTIONS. ITA NO. 379/AGRA/2012 14 CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE , NOTED ABOVE IN THE LIGHT OF THE DECISION IN THE CASE OF SMT. SUMAN GUPTA (SUPRA), W HICH IS ALSO CONFIRMED BY THE JURISDICTIONAL HIGH COURT, I AM OF THE VIEW THAT TH E ASSESSEE FAILED TO PROVE CREDITWORTHINESS OF ALL THE CREDITORS AND GENUINENE SS OF THE TRANSACTIONS IN THE MATER. THEREFORE, NO INTERFERENCE IS CALLED FOR IN THE ORDERS OF THE AUTHORITIES BELOW. BURDEN UPON THE ASSESSEE HAS NOT BEEN DISCHA RGED IN ACCORDANCE WITH LAW. ALL THE DECISIONS RELIED UPON BY THE LD. COUNSEL FO R THE ASSESSEE IN THE GIST OF CASES THUS WOULD NOT APPLY TO THE FACTS OF THE CASE. I AM , THEREFORE, OF THE VIEW THAT THE ASSESSEES APPEAL HAS NO MERIT. THE SAME IS ACCORDI NGLY, DISMISSED. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DIS MISSED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- (BHAVNESH SAINI) JUDICIAL MEMBER *AKS/- COPY OF THE ORDER FORWARDED TO : 1. APPELLANT 2. RESPONDENT 3. CIT(A), CONCERNED BY ORDER 4. CIT, CONCERNED 5. DR, ITAT, AGRA 6. GUARD FILE SR. PRIVATE SECRETARY TRUE COPY