ITO, Muzaffarnagar V. Sh. Ranjan Veer Singh, Muzaffarnagar

ITA 3895/DEL/2009

• Counselvise Citation: [2010] 119 COUNSELVISE.COM (IT) 5507 (ITAT-DELHI)
• Duration Of Justice: 6 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-03-2010
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: F
• Next Hearing Date: 02-02-2010
• Assessment Year: 2006-2007
• Appeal Filed On: 15-09-2009
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: BANITA DEV NAUREN
• Assessee Lawyers: V K TULSIAN; A K MATHU R
• Keywords: Unexplained cash credit; Additional evidence
• Section: 131; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH F: NEW DELHI BEFORE SHRI G.E. VEERABHADRAPPA, VICE PRESIDENT AND SHRI I.P. BANSAL, JUDICIAL MEMBER ITA NO. 3895/DEL/2009 ASSESSMENT YEAR: 2006-07 ITO, WARD 1(1), MUZAFFARNAGAR. VS. RANJAN VEER SINGH, 35/5, SADAR BAZAR, MUZAFFARNAGAR. PAN NO. ATXPS-9722-P (APPELLANT) (RESPONDENT) APPELLANT BY : MS. BANITA DEV NAUREN, S R. DR RESPONDENT BY: SH. V.K. TULSIAN, CA & SH. A.K. MATH UR, CA O R D E R PER I.P. BANSAL, J.M. THIS IS AN APPEAL FILED BY THE REVENUE. IT IS DIR ECTED AGAINST THE ORDER OF CIT(A) DATED 4.6.09 FOR A.Y. 2006-07. GRO UNDS OF APPEAL READ AS UNDER: - 1. THAT THE LD. CIT(A) HAS ADMITTED THE ADDITIONAL EVIDENCE IN VIOLATION OF RULE 46A OF THE I.T. RULES, 1962 AS IS APPARENT FROM THE REMAND REPORT DATED 10.2.2009 SUBMITTED BY THE AO AND REPRODUCED IN PARA 7 OF THE APPELLATE ORDER. 2. THAT THE ADDITIONS HAVE BEEN DELETED DESPITE THE FACT THAT THE CREDITWORTHINESS OF THE CREDITOR/ASSESSEE WAS NOT P ROVED. HOWEVER, PARA 13 OF THE APPELLATE ORDER IS CONTRADI CTORY OF THE FACT. 3. THAT THE ADDITIONS HAVE BEEN DELETED IGNORING TH E RATIO LAID DOWN BY THE JURISDICTIONAL HIGH COURT IN THE CASE OF RAM LAL AGGARWAL VS. CIT 280 ITR 542 ALLAHABAD. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE ORDER OF THE LD. CIT(A) DESERVES TO BE SET ASIDE AND THAT OF THE AO BE RESTORED. 2 ITA NO. 3895/DEL/2009 2. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE AO NOTICED THAT THERE WERE CERTAIN UNEXPLAINED CASH CREDITS IN THE BOOKS OF THE ASSESSEE WHICH WERE IN THE NAME OF FOLLOWING PERSONS: - (I) SH. VIKAS CHOWDHARY RS. 85,000/- (II) SH. VIRENDRA SINGH RS. 1,00,000/- (III)SH. AMARVEER SINGH RS. 1,80,000/- (IV)SH. SAMAR VIR SINGH RS. 1,50,000/- (V) SH. DEV KUMAR RS. 2,25,000/- (VI)SH. SHIV CHARAN RS. 1,00,000/- (VII)SH. RAJVEER SINGH RS. 2,00,000/- 3. APART FROM ABOVE AO FOUND THAT THERE WERE UNEXPL AINED DEPOSITS IN THE BANK ACCOUNT OF THE ASSESSEE OF A SUM OF RS. 2,50,000/-. THE ASSESSEE FILED CONFIRMATIONS IN RESPECT OF CASH CRE DITORS VIDE REPLY DATED 22 ND AUGUST, 2008 ALONG WITH COPIES OF KISAN BAHI OF TH E CREDITORS. THE ASSESSEE SUBSEQUENTLY FILED COPIES OF STATEMENT OF INCOME ALONG WITH STATEMENT OF AFFAIRS OF THE CREDITORS IN RESPECT OF ASSESSMENT YEARS 2004- 05 TO 2006-07 VIDE REPLY DATED 1 ST SEPTEMBER, 2008. THE AO EXAMINED THOSE DOCUMENTS. 4. IT WAS OBSERVED BY THE AO THAT IN THE CASE OF SH . VIKAS CHAUDHARY, THE BANK ACCOUNT REVEALED THAT A SUM OF RS. 85,000/- WAS DEPOSITED IN CASH ON 25 TH JULY, 2005 AND CHEQUE WAS ISSUED TO THE ASSESSEE OF EQUIVALENT AMOUNT ON THE SAME DAY. SIM ILAR WAS THE POSITION IN THE CASE OF SH. VIRENDER SINGH, WHERE A SIMILAR TRANSACTION OF RS. 1 LAKH WAS MADE ON 25 TH JULY, 2005. ON THE SAME DATE SAME ENTRY OF RS. 1,80,000/- WAS SEEN IN THE ACCOUNT OF SH. AM AR VEER SINGH AND IN 3 ITA NO. 3895/DEL/2009 THE CASE OF SUMER VEER SINGH 1,50,000/- WAS DEPOSIT ED IN CASH AND ON THE SAME DATE CHEQUE WAS ISSUED TO THE ASSESSEE. 5. IT WAS SUBMITTED BY THE ASSESSEE THAT DEPOSITORS WERE OLD INCOME TAX ASSESSES AND THE AMOUNT TAKEN BY THE ASSESSEE H AS BEEN DULY DEPICTED IN THOSE ACCOUNTS, PROVISION OF SEC. 68 WE RE NOT APPLICABLE. THE AO REQUIRED THE ASSESSEE TO PROVE THE CREDIT WO RTHINESS TO THOSE CREDITORS BY FILING EVIDENCE OF SOURCE OF CASH DEPO SITS IN THE BANK ACCOUNT OF THE CREDITORS JUST BEFORE CLEARING THE C HEQUES FOR LOAN TO THE ASSESSEE. THE ASSESSEE WAS ALSO ASKED TO PROVE THE GENUINENESS OF THE TRANSACTION. ACCORDING TO AO MERELY FILING THE CONFIRMATION LETTERS DOES NOT DISCHARGE THE ONUS LAID DOWN UPON ASSESSEE AND MERE PAYMENT BY ACCOUNT PAYEES CHEQUES ALSO IS NOT SACRO SANCT AND THAT ALONE CANNOT PROVE THE GENUINENESS OF THE TRANSACTI ON. IN THIS MANNER THE AMOUNTS RELATING TO SH. VIKAS CHAUDHARY, SH. VI RENDER SINGH, SH. AMAR VEER SINGH AND SUMER VEER SINGH WERE ADDED TO THE INCOME OF THE ASSESSEE BY MAKING THE AGGREGATE ADDITION OF RS . 5,15,000/-. 6. SO AS IT RELATES TO CREDIT RELATING TO SH. DEV K UMAR, SHIV CHARAN AND RAJ VEER SINGH, THESE CREDITS WERE STATED IN TH E AUDIT REPORT TO HAVE BEEN ACCEPTED BY THE ASSESSEE, THE ASSESSEE WAS REQ UIRED TO FILE COPIES OF BANK ACCOUNT, CAPITAL ACCOUNT AND BALANCE SHEET OF THE CREDITORS. NO EXPLANATION WAS FURNISHED. HOWEVER, VIDE REPLY DATED 15 TH SEPTEMBER, 2008 CONFIRMATIONS WERE FILED ALONG WITH COPIES OF BANK ACCOUNT AND IT WAS SEEN THAT NONE OF THESE CREDITOR S WAS ASSESSED TO TAX. VIDE ORDER SHEET ENTRY DATED 15 TH SEPTEMBER, 2008, THE ASSESSEE 4 ITA NO. 3895/DEL/2009 WAS ASKED TO PRODUCE THE CREDITORS ALONG WITH THEIR SOURCE OF INCOME FOR RECORDING THE STATEMENTS. SH. DEV KUMAR WAS NOT PR ODUCED HIS PAN NUMBER WAS NOT PROVIDED HE WAS MAINTAINED SAVING AC COUNT NUMBER 103817 IN INDIAN BANK, SAUNTA, WHEREIN CASH DEPOSIT S WERE SHOWN TO BE MADE OF RS. 95,000/- AND RS. 1,30,000/- ON 18.12.05 AND 21.11.05 RESPECTIVELY. THE CHEQUE FOR 25,000/- WAS GIVEN TO THE ASSESSEE ON 22.11.05. NO EVIDENCE REGARDING FINANCIAL CAPACITY WAS FURNISHED AND IN THIS MANNER IN ABSENCE OF PROOF OF IDENTITY, CREDIT WORTHINESS AND GENUINENESS OF THE TRANSACTION THE SAID AMOUNT WAS ADDED TO THE INCOME OF THE ASSESSEE. 7. IN THE CASE OF SHIV CHARAN, IT IS MENTIONED BY T HE AO THAT PAN OF THE CREDITOR WAS NOT MENTIONED ON THE CONFIRMATION COPY OF BANK ACCOUNT NO. 11731 MAINTAINED BY THE CREDITOR WAS FILED WHIC H REVEALED THAT CASH WERE DEPOSITED OF RS. 35,000/- AND 65,000/- ON 2.12 .05 AND 5.12.05 RESPECTIVELY AND CHEQUE OF RS. 1 LAKH GIVEN TO ASSE SSEE, WHICH WERE CLEARED ON 5.12.05 ITSELF. SHIV CHARAN APPEARED BE FORE AO AND STATED THAT HE OWNED 18 KACHA BIGHA OF AGRICULTURAL LAND A ND HIS ANNUAL INCOME WAS BETWEEN RS. 60,000/- TO 70,000/-. IT WA S STATED THAT CASH DEPOSIT IN THE BANK ACCOUNT WAS MADE OUT OF SALE OF PLOT OF LAND AND AGRICULTURAL PRODUCED. IT WAS STATED THAT NO EVIDE NCE OF SALE OF LAND WAS FURNISHED EITHER BY THE CREDITOR OR BY THE ASSESSEE . IN THE CIRCUMSTANCES AO OBSERVED THAT WITH THE HOLDING OF 18 KACHA BIGHA OF AGRICULTURAL LAND THE ANNUAL NET INCOME OF THE ASSESSEE COULD NO T BE MORE THAN RS. 50,000/- TO 55,000/-. THE BANK ACCOUNT WAS OPENED ON 30.11.05 WITH A MEAGER AMOUNT OF RS. 187 AND THE BALANCE REMAINED A T RS. 1,087/- AS 5 ITA NO. 3895/DEL/2009 ON 5 TH MAY, 2008 AND THUS, THE EFFECTIVE TRANSACTION WAS ONLY IN RESPECT OF AMOUNT GIVEN TO THE ASSESSEE. THE FINANCIAL CAP ACITY WAS NOT PROVED THE GENUINENESS OF THE TRANSACTION WAS ALSO NOT PRO VED AND, THEREFORE, THE SUM OF RS. 1 LAKH WAS TREATED AS INCOME OF THE ASSESSEE. 8. IN THE CASE OF SH. RAJ VEER SINGH THE CONFIRMATI ON DID NOT BEAR PAN, BANK ACCOUNT NO. 1760 WITH PNB REVEALED THAT C ASH OF RS. 1 LAKH WAS CLEARED ON 16.11.05 AND THE ANOTHER CHEQUE FOR LOAN TO THE ASSESSEE OF RS. 1 LAKH WAS CLEARED ON 28.11.05 STAT EMENT OF SH. RAJ VEER SINGH WAS RECORDED ON 17 TH OCTOBER, 2008 IN THE STATEMENT THE PERMANENT ACCOUNT NUMBER WAS SUBMITTED. IT WAS SUB MITTED THAT HE WAS AN ADVOCATE AND JOINED PROFESSIONAL INCOME BETW EEN 1 LAKH TO 1,25,000/- BESIDE AGRICULTURAL INCOME OF RS. 60,000 /- TO 70,000/- P.A. THE CREDITOR WAS FATHER OF THE ASSESSEE AND THE CAS H IN THE BANK ACCOUNT WAS STATED TO BE DEPOSITED OUT OF PROFESSIO NAL AND AGRICULTURAL INCOME. FROM THE BANK ACCOUNT, IT WAS NOTICED BY T HE AO THAT AT NO POINT OF TIME CASH OF RS. 50,000/- AND ABOVE WAS DE POSITED EXCEPT THE CASH FOR GIVING LOAN TO THE ASSESSEE. IT IS STATED BY THE AO THAT THOUGH IDENTITY HAS BEEN PROVED BY FILING PAN, ACKNOWLEDGE MENT OF THE RETURN BUT CREDIT WORTHINESS OF THE CREDITOR HAS NOT BEEN PROVED. THUS, HE ADDED THE SAID AMOUNT OF RS. 2 LAKH TO THE INCOME O F THE ASSESSEE BEING UNEXPLAINED CREDIT. 9. SO AS IT RELATES TO CASH DEPOSITED IN THE BANK A CCOUNT OF THE ASSESSEE, THE AO NOTICED THAT IN PNB BANK ACCOUNT N O. 1953 OF ASSESSEE FOLLOWING CASH WERE DEPOSITED: - 6 ITA NO. 3895/DEL/2009 10.5.2005 RS. 12,000/- 11.6.2005 RS. 50,000/- 11.6.2005 RS. 45,000/- 15.6.2005 RS. 1,50,000/- 30.6.2005 RS. 80,000 /- TOTAL RS. 3,37,000 /- 10. THE ASSESSEE IN RESPONSE TO QUERY BY AO FILED C ASH FLOW STATEMENT WITH REFERENCE TO RETURNS OF INCOME. PER USING THE DETAILS LD. AO HAS COME TO THE CONCLUSION THAT CLOSING CAPITAL BALANCE AS SHOWN IN THE RETURN AS ON 31.3.05 WAS RS. 4,01,700/-. REDUC ING THERE FROM THE INITIAL CAPITAL OF RS. 2,61,335/- THE AO OBSERVED T HAT THE CASH AVAILABLE WITH THE ASSESSEE COULD BE A SUM OF RS. 1,40,365/- AND MAKING REFERENCE TO THE CASH DEPOSITS IN THE BANK ACCOUNT AMOUNTING TO RS. 3,37,000/- THE AO CALCULATED UNEXPLAINED DEPOSIT AS PER VERSION OF THE ASSESSEE AT A SUM OF RS. 1,96,635/-. FURTHER CONSI DERING THE HOUSE HOLD EXPENSES AO DISBELIEVE THAT CAPITAL AVAILABLE WITH THE ASSESSEE OF RS. 4,01,700/- AND IN THE CIRCUMSTANCES, THE AO CAME TO THE CONCLUSION THAT OUT OF CASH DEPOSITS IN THE BANK ACCOUNT A SUM OF R S. 2,50,000/- WAS UNEXPLAINED. 11. IN THE ABOVE MANNER, THE ADDITION WAS MADE TO T HE RETURN INCOME OF THE ASSESSEE. 12. IN THE APPEAL FILED BEFORE CIT(A) THE SUBMISSIO NS OF ASSESSEE IN SHORT WERE AS UNDER: - 7 ITA NO. 3895/DEL/2009 VIKAS CHAUDHARY : THE PAYMENT WAS RECEIVED THROUGH BANK ACCOUNT BY AC COUNT PAYEE CHEQUE. PERMANENT ACCOUNT NUMBER WAS ALSO GIVEN CO PY OF INCOME TAX RETURNS FOR A.Y. 2005-06 AND 2006-07 WERE ALSO FURN ISHED, WHEREIN SAID AMOUNT WAS SHOWN TO HAVE BEEN GIVEN TO THE ASSESSEE . CREDITOR OWNS 50 BIGHA OF KACHI AGRICULTURAL LAND AND THUS, THE I NGREDIENTS OF IDENTITY, CREDITWORTHINESS AND GENUINENESS WAS ESTABLISHED. SH. VIRENDER SINGH SIMILAR SUBMISSIONS WERE MADE AS WERE MADE FOR VIKA S CHAUDHARY. SH. AMAR VEER SINGH : SIMILAR SUBMISSIONS WERE MADE AS WERE MADE FOR VIKA S CHAUDHARY ACCEPT THE FACT THAT HE OWNS 20 BIGHAS OF KACHI AGR ICULTURAL LAND. SH. SUMER VEER SINGH : SIMILAR SUBMISSIONS MADE AS WERE MADE IN THE CASE O F VIKAS CHAUDHARY ACCEPT THE FACT THAT HE ALSO OWNS 20 BIGHAS OF KACH I AGRICULTURAL LAND. DEV KUMAR : HE WAS STATED TO BE MAMA OF ASSESSEE. IT WAS SUBMI TTED THAT IN THE MONTH OF NOVEMBER, 2004 HE HAD MADE CASH WITHDRAWAL S OF RS. 4,45,000/- FROM HIS BANK ACCOUNT AND THUS, HE WAS A PERSON WHO WAS IDENTIFIED HAVING CREDITWORTHINESS AND AS THE TRANS ACTIONS WAS MADE THROUGH BANK THE GENUINENESS WAS ALSO ESTABLISHED. SHIV CHARAN SINGH : HE STATED TO BE COUSIN CHACHA OF ASSESSEE THE DEPOS IT WAS MADE BY HIM OUT OF CASH WITHDRAWALS FROM BANK ACCOUNT AND CASH IN HAND FORMING PART OF AGRICULTURE AND OTHER INCOME. A PROPERTY W AS ALSO SOLD BY HIM. HE WAS PRODUCED BEFORE AO AND HE ADMITTED THAT HE H AD ADVANCED RS. 1 LAKH TO THE ASSESSEE. 8 ITA NO. 3895/DEL/2009 RAJ VEER SINGH : DEPOSITOR WAS STATED TO BE FATHER OF THE ASSESSEE H AVING ADVANCED AMOUNT BY PAYEES ACCOUNT CHEQUE OUT OF HIS BANK ACC OUNT PERMANENT ACCOUNT NUMBER WAS GIVEN COPY OF INCOME TAX RETURN FOR A.Y. 06-07 WAS FILED ALONG WITH COPY OF CAPITAL ACCOUNT AND BA LANCE SHEET THE LOAN GIVEN TO ASSESSEE WAS DULY SHOWN THEREIN HE OWNED 7 0 BIGHAS OF KACHI AGRICULTURAL LAND THE CASH WAS DEPOSITED IN THE BAN K ACCOUNT OF THE CREDITOR OUT OF WITHDRAWALS OF BANK AND CASH IN HAN D FORMING PART OF AGRICULTURE AND OTHER INCOME SHOWN IN THE INDIVIDUA L INCOME TAX RETURN. 13. REGARDING ADDITION OF RS. 2,50,000/- IN THE ACC OUNT OF THE ASSESSEE IT WAS SUBMITTED THAT ASSESSEE WAS ENJOYIN G AGRICULTURAL INCOME EARNING BALANCE AS ON 1.4.03 WAS 2,63,700/- THE ASSESSEE HAS BEEN WORKING AS AN ADVOCATE AND ENJOYING PROFESSION AL AND AS WELL AS AGRICULTURAL INCOME OWNS 20 BIGHAS IF AGRICULTURAL LAND. HE IS HAVING OPENING BALANCE OF RS. 1,64,250/- AS ON 31.4.01 FRO M ACCUMULATIVE OF INCOME WHICH CAN BE IGNORED CASH FLOW STATEMENT WAS FILED IN RESPECT OF ASSESSMENT YEARS 02-03, 03-04, 04-05, 05-06 & 06-07 AND THAT CASH FLOW COVERS ALL THE DEPOSITS MADE BY THE ASSESSEE I N HIS BANK ACCOUNT/BOOKS OF ACCOUNT. REFERENCE WAS MADE TO VA RIOUS DECISIONS AND IT WAS CONTENDED THAT ASSESSEE HAS PROVED ALL T HE THREE INGREDIENTS NECESSARY TO BE PROVED FOR GENUINE CASH CREDIT I.E. IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTION . THE SUBMISSIONS OF THE ASSESSEE WERE FORWARDED TO THE AO, FIRSTLY D ENIED THE ADMISSION OF THE ADDITIONAL EVIDENCES ON THE GROUND THAT SUFF ICIENT OPPORTUNITY WAS GRANTED TO THE ASSESSEE DURING THE COURSE OF ASSESS MENT PROCEEDINGS. 9 ITA NO. 3895/DEL/2009 ON MERITS ALSO A REPORT WAS SUBMITTED BY THE AO WHO DOUBTED THE CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTION ON THE GROUND THAT THOSE CREDITORS WERE NOT IN A POSITION TO ADVANCE T HE HUGE AMOUNT TO THE ASSESSEE AND THE REPORT OF THE AO HAS BEEN REPRODUC ED IN THE ORDER OF CIT(A) IN PARA 10. AGAINST THE SAID REPORT THE ASS ESSEE ALSO FILED REJOINDER AND IT WAS CONTENDED THAT ADDITION HAS WR ONGLY BEEN MADE BY THE AO. LD. CIT(A) AFTER CONSIDERING THE SUBMISSIO N HAS ARRIVED AT A CONCLUSION THAT ADDITIONS WERE WRONGLY MADE. THE G ENERAL REASONS GIVEN BY LD. CIT(A) TO DELETE THE ADDITION IN RESPE CT OF SH. VIKAS CHAUDHARY, SH. VIRENDER SINGH, SH. AMER VEER SINGH & SH. SUMER VEER SINGH ARE THAT THEY ARE ASSESSED TO TAX THEY HAVE C ONFIRMED TO HAVE LOAN, THEY ARE IDENTIFIABLE PERSON BEING FAMILY MEM BERS OF THE ASSESSEE, THE GENUINENESS OF THE TRANSACTION WAS NOT DISPUTED , THE DEPOSITOR BANK ACCOUNT, STATEMENT OF AFFAIRS ETC. WERE FILED THE D ETAILS FILED REGARDING SOURCE OF INCOME CLEARLY SHOWS THAT THE CREDITOR WA S HAVING SUFFICIENT CREDITWORTHINESS AND WAS ABLE TO ADVANCE SUCH AMOUN T AND ALTHOUGH THERE IS CASH DEPOSIT IN THE BANK ACCOUNT OF THE DE POSITOR, THE ACCOUNTABILITY OF THE SOURCE OF THE SAME APPROPRIAT ELY BE ASKED IN THE HANDS OF THE DEPOSITOR FOR WHICH THE AO OF THE DEPO SITOR CAN BE INTIMATED TO TAKE REMEDIAL ACTION. 14. SO AS IT RELATES TO SH. DEV KUMAR, SHIV CHARAN SINGH, LD. CIT(A) OBSERVED THAT ALTHOUGH THEY WERE NOT ASSESSED TO TA X BUT THEY ARE RELATED TO THE ASSESSEE THEY HAVE CONFIRMED REGARDI NG ADVANCING OF LOAN, GENUINENESS OF THE TRANSACTION IS NOT DISPUTE D, DEPOSITOR BANK ACCOUNT, STATEMENT OF AFFAIRS ETC. WERE FILED AND C REDITWORTHINESS OF THE 10 ITA NO. 3895/DEL/2009 DEPOSITOR WAS ESTABLISHED. IT WAS OBSERVED THAT SH . DEV KUMAR WAS EX- GOVERNMENT EMPLOYEE FROM AIR FORCE GROUND SERVICE. THE SMART CARD ISSUED BY ARMY ESTABLISHED BY HIS CREDENTIALS. THO UGH HE WAS NOT PRODUCED BUT AO ALSO DID NOT ISSUE SUMMONS TO HIM. WITH RESPECT TO SH. SHIV CHARAN HE OBSERVED THAT HE WAS PRODUCED FO R EXAMINATION. 15. SO AS IT RELATES TO RAJ VEER SINGH THE OBSERVAT ION OF CIT(A) ARE SIMILAR AS IN THE CASE OF SH. VIKAS CHAUDHARY. 16. HE ALSO DELETED ADDITION OF RS. 2,50,000/- MADE IN THE HANDS OF THE ASSESSEE ON THE GROUND THAT STATEMENT OF AFFAIR S AND THE COPY OF DOCUMENTS FILED ALONG WITH RETURNS OF INCOME COVERE D THE DEPOSITS MADE IN THE BOOKS OF ACCOUNT OF THE ASSESSEE. THEREFORE , ALL THE ADDITIONS HAVE BEEN DELETED BY LD. CIT(A). THE DEPARTMENT IS AGGRIEVED, HENCE IN APPEAL. 17. IT IS THE CASE OF THE REVENUE THAT LD. CIT(A) W HILE GIVING RELIEF TO THE ASSESSEE HAS RELIED UPON THE ADDITIONAL EVIDENC ES FILED BY THE ASSESSEE BEFORE HIM. IT IS THE SUBMISSION OF THE R EVENUE THAT ADMISSION OF THE SAID EVIDENCE IS IN VIOLATION OF RULE 46A AS REASONABLE AND SUFFICIENT OPPORTUNITY WAS GRANTED TO ASSESSEE DURI NG THE COURSE OF ASSESSMENT PROCEEDINGS. DESPITE IT HAS BEEN CLEARL Y SHOWN BY THE AO THAT THE PERSONS WHO HAVE ADVANCED THE AMOUNT TO TH E ASSESSEE WERE NOT CREDITWORTHY, AN INCORRECT FINDING HAS BEEN REC ORDED BY LD. CIT(A) TO THE FACT THAT THEY WERE CREDITWORTHY. THUS, IT HAS BEEN THE CASE OF THE REVENUE THAT ADDITIONS HAVE WRONGLY BEEN DELETED, A S ASSESSEE COULD NOT PROVE ALL THE THREE INGREDIENTS FOR EXPLAINING THE CASH CREDITS. IT WAS 11 ITA NO. 3895/DEL/2009 OBSERVED THAT SOME OF THE CONFIRMATION SUBMITTED BY THE ASSESSEE DID NOT BEAR THE PROPER ADDRESS REFERENCE WAS MADE TO T HE CERTAIN CONFIRMATION PLACED BY THE ASSESSEE IN THE PAPER BO OK. JUST IN THE CASE OF SH. VIRENDER SINGH THE ADDRESS WAS GIVEN VILLAGE WADAI KHURT AND IT WAS POINTED OUT THAT NO PROPER ADDRESS WAS GIVEN SI MILARLY IN THE CASE OF AMAR VEER SINGH IN THE CONFIRMATION PLACED AT PAGE 37 NO ADDRESS HAS BEEN GIVEN AND ADDRESS IS GIVEN AS VILLAGE WADHAI K HURT, MUZAFFARNAGAR. IT WAS POINTED OUT THAT IN THE CASE S OF VIKAS CHAUDHARY, VIRENDER SINGH, AMAR VEER SINGH & SUMER VEER SINGH CASH WERE DEPOSITED ON SINGLE DATE I.E. 25.4.05 AND IT WAS GI VEN TO THE ASSESSEE VIDE CHEQUE ON THE SAME DATE. IT WAS SUBMITTED THA T ASSESSEE DID NOT PROVE THE FACT THAT FROM WHERE THE CREDITORS HAD DE POSITED THE SAID AMOUNT IN THEIR BANK ACCOUNTS ON THAT SINGLE DAY. THE SOURCE OF DEPOSIT WAS NOT ESTABLISHED. THE CONFIRMATION BEING INCOMP LETE THEY WERE REQUIRED TO BE PRODUCED BEFORE AO BUT THEY WERE NOT PRODUCED AND THUS, IT WAS SUBMITTED THAT ADDITION HAS WRONGLY BEEN DEL ETED BY CIT(A) BY ADMITTING THE IDENTITY, CREDITWORTHINESS AND GENUIN ENESS OF THE TRANSACTION WHICH IS CONTRARY TO THE FACTS AVAILABL E ON RECORD. IT WAS SUBMITTED THAT ALL OF THEM WERE NOT PERSON OF MEANS . IN THE ALTERNATIVE IT WAS SUBMITTED THAT IF IT IS HELD THAT LD. CIT(A) WA S RIGHT IN ADMITTING THE EVIDENCE FILED BY THE ASSESSEE BEFORE CIT(A) THEN T HE MATTER SHOULD BE RESTORED BACK TO THE FILE OF AO TO ENABLE HIM TO MA KE THE APPROPRIATE ENQUIRY. 18. ON THE OTHER HAND, RELYING ON THE VARIOUS SUBMI SSIONS MADE BEFORE AO AND CIT(A) AND DOCUMENTARY EVIDENCE SUBMI TTED FROM THEM IT 12 ITA NO. 3895/DEL/2009 WAS PLEADED BY LD. AR THAT LD. CIT(A) AFTER APPRECI ATION OF FULL FACTS AND CIRCUMSTANCES HAS RIGHTLY DELETED THE ADDITION AND HIS ORDER SHOULD BE UPHELD. 19. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSI ONS IN THE LIGHT OF MATERIAL PLACED BEFORE US. SO FAR AS IT RELATES TO CREDITS IN THE NAME OF SH. VIKAS CHAUDHARY, SHRI VIRENDER SINGH, SH. AMARV EER SINGH, SH. SAMAR VIR SINGH, THOUGH THESE CREDITORS ARE STATED TO BE INCOME TAX ASSESSES BUT THEY WERE NOT PRODUCED BEFORE THE AO. IT CANNOT BE THE CASE OF THE ASSESSEE THAT HE WAS UNABLE TO PRODUCE THEM FOR VERIFICATION AS ALL OF THEM ARE RELATED TO THE ASSESSEE. FROM A LL OF THEM ASSESSEE HAS OBTAINED A CUMULATIVE SUM OF RS. 5,15,000/- ON A PARTICULAR DATE I.E. 25 TH JULY, 2005 AND IN ALL THE BANK ACCOUNTS RELATED TO THOSE CREDITORS CASH OF EQUIVALENT AMOUNT WAS DEPOSITED. NO WHERE IT HAS BEEN EXPLAINED THAT WHY THOSE CREDITORS ON A PARTICULAR DATE GAVE THE AMOUNT TO THE ASSESSEE BY CHEQUES AND WHAT WAS THE NECESSI TY IN THIS REGARD. THE CONFIRMATIONS SUBMITTED FROM THEM WERE ALSO NOT BEARING PROPER ADDRESSES. ALL OF THEM WERE MAINTAINING SAVING ACC OUNTS IN PUNJAB NATIONAL BANK AT JAT MUJHERA, MUZAFFARNAGAR. IN TH E CIRCUMSTANCES, IT WAS NECESSARY TO VERIFY FROM THE CREDITORS THAT WHE THER THE STATE OF AFFAIRS STATED BY THE ASSESSEE BEFORE AO AND STATED IN THE DOCUMENTS ALLEGED TO BE FILED BY THEM TO SUPPORT THOSE CREDIT S WERE CORRECT. LD. CIT(A) HAS IGNORED THE FACT THAT NONE OF THEM WAS P RODUCED BY THE ASSESSEE BEFORE THE AO FOR PROPER VERIFICATION. AS PER TRITELA FOR PROVING THE CASH CREDITS THE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTION HAS TO BE ESTABLISHED. TAKING SEVERAL LOANS ON A PARTICULAR 13 ITA NO. 3895/DEL/2009 DATE FROM RELATIVES INDICATES THAT THERE WAS SOMETH ING WHICH WAS TO BE EXPLAINED AND WHICH WAS TO BE VERIFIED AND VERIFICA TION IN THIS REGARD COULD BE COMPLETED ONLY IF THOSE PERSONS ARE PRODUC ED TO CROSS VERIFY THE DOCUMENTS WHICH HAVE BEEN SUBMITTED TO SUPPORT THE CONTENTION THAT THESE CREDITORS WERE IDENTIFIED AND THEY WERE CREDI TWORTHY AND THESE WERE GENUINENESS TRANSACTIONS. THEREFORE, WE DONT FIND ANY JUSTIFICATION IN DELETION OF THESE AMOUNTS WITHOUT PROPER VERIFIC ATION TO BE MADE IN RESPECT BY EXAMINING THOSE CREDITORS PARTICULARLY I N VIEW OF FACT THAT ALL OF THEM ARE RELATIVE OF THE ASSESSEE AND IT IS NOT EVE N THE CASE OF THE ASSESSEE THAT HE IS UNABLE TO PRODUCE THEM. 20. NOW COMING TO THE UNEXPLAINED CASH CREDIT IN TH E NAME OF SH. DEV KUMAR, SHIV CHARAN AND SH. RAJVEER SINGH THE FA CTS RELATING TO CREDIT OF SH. DEV KUAMR IS ALMOST SAME EXCEPT THE D IFFERENCE THAT HE WAS MAINTAINING BANK ACCOUNT IN INDIAN BANK FROM WH ERE SUCH AMOUNTS WERE ADVANCED TO THE ASSESSEE AND THEY WERE ADVANCE D ON TWO DIFFERENT DATES IN THE MONTH OF NOVEMBER. HE IS AL SO RELATIVE OF THE ASSESSEE AND, THEREFORE, THE SAME LOGIC WILL APPLY AND WITHOUT EXAMINING SH. DEV KUMAR IT WAS NOT POSSIBLE TO ARRIVE AT A CO NCLUSION THAT ALL THE THREE INGREDIENTS TO PROVE THE CASH CREDIT WERE EXI STING. IT MAY BE MENTIONED HERE THOUGH LD. CIT(A) WHILE DELETING THE ADDITION RELATING TO CREDIT OF SH. DEV KUMAR HAS STATED THAT HE WAS RETI RED GOVERNMENT EMPLOYEE FROM AIR FORCE GROUND SERVICE BUT HE IS RE LATED TO THE ASSESSEE ALSO. LD. CIT(A) HAS OBSERVED THAT ALTHOU GH HE WAS NOT PRODUCED BUT THE AO ALSO DID NOT ISSUE ANY SUMMONS U/S 131 OR U/S 133 EVEN DURING THE REMAND PROCEEDINGS. HERE IT MAY BE MENTIONED THAT THE 14 ITA NO. 3895/DEL/2009 CREDITOR WAS RELATED TO THE ASSESSEE BEING MAMA OF THE ASSESSEE AND HE WAS REQUIRED TO BE PRODUCED AND THERE WAS NO QUE STION OF ISSUING SUMMON PARTICULARLY WHEN ASSESSEE WAS ASKED TO PROD UCE HIM AND ASSESSEE HAS NEVER STATED THAT ANY SUMMON SHOULD BE ISSUED AS HE IS UNABLE TO PRODUCE HIM. TO VERIFY THE GENUINENESS O F THE CREDIT AND THE IDENTITY AND CREDITWORTHINESS OF THE CREDITOR IT WA S NECESSARY TO PRODUCE HIM FOR EXAMINATION. 21. IN VIEW OF ABOVE DISCUSSION, WE RESTORE THE ADD ITION RELATING TO SH. VIKAS CHAUDHARY, SH. VIRENDAR SINGH, SH. AMARVEER S INGH, SH. SAMAR VIR SINGH AND SH. DEV KUMAR TO THE FILE OF AO WITH A DIRECTION TO EXAMINE THOSE CREDITORS WHO WILL BE PRODUCED BY THE ASSESSEE SO AS TO VERIFY THE IDENTITY, CREDITWORTHINESS OF THE CREDIT ORS AND GENUINENESS OF THE TRANSACTION AND AFTER GIVING ASSESSEE A REASONA BLE OPPORTUNITY OF HEARING HE WILL READJUDICATE ISSUE REGARDING ADDITI ON RELATING TO THESE CREDITORS AS PER PROVISIONS OF LAW. WE DIRECT ACCO RDINGLY. 22. NOW COMING TO THE CREDIT RELATING TO SHIV CHARA N WHO IS ALSO STATED TO BE COUSIN OF THE ASSESSEE IT MAY BE MENTI ONED THAT HE IS NOT AN INCOME TAX ASSESSEE AND HIS COPY OF BANK ACCOUNT IS PLACED IN THE PAPER BOOK WHEREIN AS ON 30.11.05 HE WAS HAVING BAL ANCE OF 1,087/- AND A CASH OF RS. 35,000/- WAS DEPOSITED ON 2.12.05 AND ANOTHER CASH OF RS. 65,000/- WAS DEPOSITED ON 5.12.05 WHICH MADE THE TOTAL OF THE DEPOSIT AS ON 5.12.05 RS. 1,01,087/- AND ON THE SAM E DATE I.E. 5.12.05 A CHEQUE OF RS. 1 LAKH HAS BEEN ISSUED TO THE ASSESSE E WHICH KEPT THE BALANCE IN THE BANK ACCOUNT AT A SUM OF RS. 1,087/- . THE SOURCE OF 15 ITA NO. 3895/DEL/2009 DEPOSIT IN THE BANK ACCOUNT IS STATED TO BE OUT OF CASH WITHDRAWALS FROM BANK ACCOUNTS, CASH IN HAND BECAUSE OF AGRICULTURE AND OTHER INCOME SHOWN BY THE DEPOSITOR IN HIS INDIVIDUAL NAME. IT IS THE SUBMISSION OF THE ASSESSEE THAT DEPOSIT IN HIS BANK ACCOUNT ARE FULLY COVERED FROM THE CASH AVAILABLE WITH HIM AND IN ADDITION TO THAT IT WAS SUBMITTED THAT A PROPERTY WAS SOLD FOR A SUM OF RS. 44,000/- ON 3.3. 05. LD. CIT(A) HAS DELETED THE ADDITION RELATING TO THIS CREDIT ON THE GROUND THAT ALTHOUGH THE CREDITOR IS NOT ASSESSED TO TAX BUT HE IS AN IDENTI FIABLE PERSON BEING CHACHA OF THE ASSESSEE AND HE IS ALSO AN AGRICULTUR IST. HE HAD SOLD A PLOT DURING THE YEAR AND EVIDENCE TO THAT FACT IS F ILED. THE CREDITOR WAS PRODUCED FOR EXAMINATION AND THE GENUINENESS OF THE TRANSACTION WAS NOT DISPUTED. HIS BANK ACCOUNT WAS FILED ALONG WIT H STATEMENT OF AFFAIRS AND FROM THE DETAILS IT COULD BE HELD THAT CREDITOR HAD SUFFICIENT CREDITWORTHINESS FOR ADVANCING THE SAID LOAN. THE AO IN HIS REPORT HAS WRITTEN THAT HE WAS OWNER OF 18 BIGHAS OF AGRICULTU RAL LAND. IN THE PAPER BOOK FILED BY THE ASSESSEE THE EVIDENCE WHICH HAS B EEN FILED WITH REGARD TO THIS CREDIT IS APPEARING AT PAGES 75 TO 81 AT PA GE 75 THE COPY OF BANK ACCOUNT IS FILED WHICH HAS BEEN DESCRIBED IN THE AB OVE PART THAT THERE ARE CASH DEPOSIT OF RS. 1 LAKH OUT OF WHICH 1 LAKH CHEQUE HAS BEEN ISSUED TO THE ASSESSEE AND FROM PAGES 76 TO 81 COPY OF SALE DEED IS FILED VIDE WHICH A PROPERTY SOLD BY THE CREDITOR FO R A SUM OF RS. 44,000/-. COPY OF STATEMENT RECORDED OF SH. SHIV CHARAN HAS N EITHER BEEN FURNISHED BY THE ASSESSEE NOR BY THE DEPARTMENT. H OWEVER, TAKING INTO ACCOUNT THE FACT THAT HE WAS HAVING 18 BIGHAS OF AG RICULTURAL LAND AND HAD SOLD PROPERTY OF RS. 44,000/- AND HE WAS EXAMIN ED BY THE AO, THEREFORE, WE FOUND THAT NO INTERFERENCE IS CALLED FOR IN SUCH DELETION. 16 ITA NO. 3895/DEL/2009 23. NOW COMING TO THE DEPOSIT IN THE NAME OF RAJ VE ER SINGH HE WAS ALSO EXAMINED BY THE AO. HE IS FATHER OF THE ASSES SEE. HE IS ASSESSED TO TAX AND HIS COPIES OF INCOME TAX RETURNS WERE FI LED HE IS OWNING 70 BIGHAS OF KATCHI AGRICULTURAL LAND AND THE PAYMENT OF CANE WAS ALSO RECEIVED DIRECTLY IN THE BANK. HIS EARLIER CASH WI THDRAWALS FROM THE BANK ACCOUNT WERE ALSO SUFFICIENT AND IN THE CIRCUMSTANC ES LD. CIT(A) HAS DELETED THE ADDITION AND WE DECLINE TO INTERFERE IN SUCH DELETION. 24. SO AS IT RELATES TO ADDITION MADE IN THE HANDS OF THE ASSESSEE OF RS. 2,50,000/- BEING UNEXPLAINED DEPOSIT IN HIS BAN K ACCOUNT, LD. CIT(A) HAS OBSERVED THAT AOS INFERENCES ARE INCORRECT AND CONTRADICTORY. THE ASSESSEE IS AN ADVOCATE BEING ASSESSED TO TAX FOR M ANY YEARS. FROM THE DOCUMENTS FURNISHED HE WAS EARNING AGRICULTURAL INCOME FROM 20 BIGHAS OF AGRICULTURAL LAND FOR ALL THE YEARS IN PA ST AND FOR THE FIRST TIME RETURN WAS FILED IN RESPECT OF A.Y. 2002-03, THE CO PIES OF SUCH RETURNS WERE PLACED ON RECORD AND ASSESSEE WAS HAVING OPENI NG CAPITAL BALANCE OF RS. 1,64,250/- AS ON 1.4.01 AND OF RS. 2 ,63,700/- AND RS. 4,01,700/- AS ON 1.4.03 AND 1.4.05 RESPECTIVELY AND IN VIEW OF THIS, IT IS OBSERVED BY LD. CIT(A) THAT AO HAS COMMITTED A PATE NT MISTAKE WHEN HE TREATED AND ADDED INITIAL CAPITAL CONTRIBUTION OF R S. 2,61,335/- AND CASH DEPOSIT OF RS. 3,37,000/- BOTH SEPARATELY BY FORGET TING THAT CAPITAL CONTRIBUTION IS ONE OF THE UTILIZATION OF THE CASH AND CHEQUE DEPOSITS MADE IN THE BANK ACCOUNT, THEREFORE, THESE COULD NO T BE ADDED SEPARATELY. WE FIND NO INFIRMITY IN SUCH FINDING O F LD. CIT(A). HE HAS ALSO HELD THAT HOUSEHOLD EXPENSES WERE SATISFACTORI LY EXPLAINED BY THE 17 ITA NO. 3895/DEL/2009 ASSESSEE. IN THIS VIEW OF THE SITUATION, WE DECLIN E TO INTERFERE IN SUCH FINDING OF LD. CIT(A) AND DELETION ON THIS ACCOUNT IS UPHELD. 25. IN THE RESULT, THE APPEAL FIELD BY THE REVENUE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES IN THE MANNER AFORESAID. ORDER PRONOUNCED IN THE OPEN COURT ON 19.3.2010 (G.E. VEERABHADRAPPA) VICE PRESIDENT (I.P. BANSAL) JUDICIAL MEMBER DATED: 19.3.2010 *KAVITA COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, NEW DELHI. TRUE COPY BY ORDER DEPUTY REGISTRAR