Satish Singhal, Delhi V. ITO, ward- 11(1), New Delhi

ITA 4026/DEL/2018

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 2314 (ITAT-DELHI)
• Duration Of Justice: 5 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-11-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2013-2014
• Appeal Filed On: 28-05-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S L ANURAGI
• Assessee Lawyers: A K CHAUDHARY
• Keywords: Unexplained cash credit
• Section: 131; 68

Judgement Text

PAGE | 1 INCOME TAX APPELLATE TRIBUNAL DELHI BENCH F : NEW DELHI BEFORE SHRI AMIT SHUKLA , JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER ITA NO. 4026/DEL/2018 (ASSESSMENT YEAR: 2013 - 14 ) SATISH SINGHAL, 6, PATPAR ROAD, SHIVPURI, NEW DELHI PAN: ABBPS5635D VS. ITO, WARD - 11(1), NEW DELHI (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI A.K. CHAUDHARY, ADV REVENUE BY: SHRI S.L. ANURAGI, SR. DR DATE OF HEARING 21/08 / 2018 DATE OF PRONOUNCEMENT 1 5 / 1 1 / 2018 O R D E R PER PRASHANT MAHARISHI , A. M. 1 . THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE ORDER OF THE LD CIT ( A) - 22, NEW DELHI DATED 27.03.2018 FOR THE ASSESSMENT YEAR 2013 - 14. 2 . THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: - 1. THAT THE LD. COMMISSIONER OF INCOME TAX (APPEAL) 22, NEW DELHI HAS ERRED IN BOTH LAW AND FACTS IN UPHOLDING ADDITION OF RS.26,00,000/ - (RS. TWENTY SIX LACS ONLY) REPRESENTING LOAN RECEIVED BY THE ASSESSEE AND HELD TO BE UNEXPLAINED CASH CREDIT U/S 68 OF THE ACT. 2. THAT LD. COMMISSIONER OF INCOME TAX (APPEAL) HAS FAILED TO APPRECIATE THAT UNSECURED LOAN AGGREGATING TO RS.26,00,000/ - HAD BEEN RECEIVED THROUGH BANK RTGS IDENTIFIABLE PARTIES HAVING THE CORPORATE STATUS WHO HAD DULLY CONFIRMED IN T HEIR STATEMENT OF A/C THAT LOAN HAD BEEN ADVANCED TO THE APPELLATE AND AS SUCH ADDITION SO SUSTAINED IS INVALID AND UNTENABLE. 3. THAT LD. COMMISSIONER OF IT (APPEAL) HAS FURTHER FAILED TO APPRECIATE THAT MERE ASSUMPTION WITHOUT SUPPORTING OF ANY CLINCHING EVIDENCE THAT THE MONEY ACTUALLY BELONG TO NONE BUT THE ASSESSEE HIMSELF CANNOT BE BASIS TO CONFIRM ADDITION U/S 68 OF THE ACT. 4. THAT WITHOUT GOING THROUGH THE SUBMISSION OF THE ASSESSEE, REMAND REPORT OF THE A.O., WHICH HAS NOT BEEN SUBMITTED BY A.O. A ND PAGE | 2 WITHOUT PROVIDING THE OPPORTUNITY OF REJOINDER LD. CIT CONFIRMED THE ADDITION. 5. THAT THE LD. C I T (APPEAL) HAS OVERLOOKED RELEVANT EVIDENCES PLACED ON RECORD AND THEREBY LACK OF INVESTIGATION EVEN AT TH E REQUEST OF APPELLANT. FURTHER MORE REPAYMENT AS PECT OF RS. 10 LAKH LOAN FROM SID SAI REALTY (P) LTD WAS SQUARED UP DURING THE YEAR HENCE LIABLE TO BE UTMOST CONSIDERATION ITSELF AND LOAN FROM M/S HARSH BUILD WELL (P) LTD WAS REPAID DURING THE YEAR A.Y. 2015 - 2016 MUCH BEFORE THE COMPLETION OF ASSESSMENT WAS NOT DISCUSSED IN LD. C.I.T. 3 . BRIEF FACTS OF THE CASE IS THAT ASSESSEE IS AN INDIVIDUAL WHO IS INCOME FROM BUSINESS OR PROFESSION CAPITAL GAIN AN INCOME FROM OTHER SOURCES IN THE TAXABLE INCOME WAS DECLARED AT RS. 620320 IN RETURN OF INCOME FILED ON 24 /9/2013. DURING THE COURSE OF ASSESSMENT, PROCEEDINGS IT WAS NOTED BY THE LEARNED ASSESSING OFFICER THAT THE ASSESSEE HAD TAKEN A LOAN OF 18 LAKHS FROM M/S HARSH BUILD WELL PRIVATE LIMITED AND 10 LAKHS FROM M/S SID SAI REALITY PRIVATE LIMITED. TO VERIF Y THE GENUINENESS OF THE LOAN THE ASSESSING OFFICER ISSUED LETTER UNDER SECTION 133 (6) OF THE ACT. THE REPLIES WERE FILED BY THE LENDER COMPANIES AND WHEREIN THE LEARNED AO HAS NOTED THAT THERE WAS A CASH DEPOSIT OF 8 LAKHS ON 25/6/2012 2012 AND 1,0 50,000 ON 26/2/2012 AND IN TURN AN AMOUNT OF 16 LAKHS WAS TRANSFERRED TO THE ASSESSEE S ACCOUNT BY THE HARSH BUILD WELL PRIVATE RUPEES LIMITED. SIMILARLY, IN CASE OF S ID SAI REALITY PRIVATE LIMITED CASH WAS DEPOSITED OF RS. 9 LAKHS ON 18/9/2012 AND 1 LAKH ON 4/10/2012 AND IN TURN THE AGGREGATE CASH DEPOSIT OF 10 LAKHS WAS TRANSFERRED IN THE NAME OF THE ASSESSEE ON 4/10/2012 . THEREFORE THE LEARNED AO ISSUED SUMMONS UNDER SECTION 131 (ONE) OF THE ACT ON 18/2/2016 ON THE DIRECTORS OF THE LENDERS FOR PE RSONAL DEPOSITION ON 24/2/2016 TO ESTABLISH THE IDENTITY OF THE PERSON WHO HAD GIVEN THE LOAN AND TO PROVE THE GENUINENESS OF THE TRANSACTION AND CREDITWORTHINESS OF THOSE PARTIES . NONE ATTENDED . THEREFORE, THE LEARNED ASSESSING OFFICER REQUESTED THE ASSES SEE TO PRODUCE ALL THOSE CREDITORS FOR EXAMINATION ALONG WITH THE NOTICE DATED 8/3/2016 . THE ASSESSEE ALSO DID NOT REPLY THIS NOTICE . THEREFORE THE LEARNED ASSESSING OFFICER APPLYING THE DECISION OF THE HONOURABLE DELHI HIGH COURT IN CASE OF NAVODAYA CASTLES PRIVATE LIMITED 367 ITR 306 MADE THE ADDITION OF 26 LAKHS UNDER SECTION 68 OF THE PAGE | 3 INCOME TAX ACT AND DETERMINE THE TOTAL INCOME OF THE ASSESSEE AT 32 20320/ AGAINST THE RETURNED INCOME OF 6 20320/ . 4 . ASSESSEE AGREED WITH THE ORDER OF THE LEAR NED ASSESSING OFFICER PREFERRED AN APPEAL BEFORE THE LEARNED COMMISSIONER OF INCOME TAX APPEALS 22, NEW DELHI . THE LEARNED CIT APPEAL DISMISSED THE APPEAL OF THE ASSESSEE . HE HELD THAT SINCE THE APPELLANT HAS CLAIMED THAT THE LOAN WAS GENUINE THE ONUS WA S ON THE APPELLANT UNDER SECTION 101 OF THE EVIDENCE ACT, 1972 TO PRODUCE THE DIRECTORS AND PRINCIPAL OFFICERS OF THE LENDER COMPANIES ON ITS OWN AS ITS OWN WITNESS FOR CROSS - EXAMINATION BY THE REVENUE THE APPELLANT SHOULD HAVE DISCHARGED ITS DUTY AS A TAX PAYER BY PRODUCING THE DIRECTORS OF THOSE COMPANIES PARTICULARLY IN A SCENARIO IN WHICH THESE COMPANIES HAVE MADE SUBSTANTIAL INVESTMENT IN THE APPELLANT COMPANY. HE FURTHER HELD THAT ONCE THE APPELLANT WAS MADE AWARE OF THE RESULT OF INVESTIGATION, WHICH PROVED, THAT THE TRANSACTION WAS NOT GENUINE THE HIGHER BURDEN WAS ON THE ASSESSEE TO PROVE THE CREDITWORTHINESS OF THE LENDERS AND THE GENUINENESS OF THE TRANSACTION . THEREAFTER HE RELYING UPON SEVERAL DECISIONS CONFIRMED THE ADDITION MADE BY THE LEARNED ASSESSING OFFICER. 5 . ASSESSEE AGREED WITH THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX APPEALS PREFERRED AN APPEAL BEFORE US . THE LEARNED AUTHORISED REPRESENTATIVE SUBMITTED THAT THE LENDERS HAS SUBMITTED THE DETAILS UNDER SECTION 133 (6) OF THE INCO ME TAX ACT BEFORE THE LEARNED ASSESSING OFFICER SUBMITTING THE CONFORMATION OF THE ACCOUNT AND FURNISHING THE RETURN OF INCOME OF THOSE LENDERS . THE BANK STATEMENT FOR THE RELEVANT PERIOD WAS ALSO FILED AND THEREFORE THE INITIAL ONUS CAST UPON THE ASSESSEE WAS DISCHARGED . HE FURTHER REFERRED TO VARIOUS DOCUMENTS SUBMITTED BEFORE THE LEARNED ASSESSING OFFICER . HE THEREFORE SUBMITTED THAT THE ADDITION HAS WRONGLY BEEN MADE BY THE LEARNED ASSESSING OFFICER AND CONFIRMED BY THE LEARNED COMMISSIONER OF INCOME TA X APPEALS. 6 . THE LEARNED DEPARTMENTAL REPRESENTATIVE VEHEMENTLY SUPPORTED THE ORDERS OF THE LOWER AUTHORITIES AND SUBMITTED THAT THE ASSESSEE HAS FAILED TO PRODUCE THE CREDITORS/LENDERS BEFORE THE LEARNED ASSESSING OFFICER . HE FURTHER STATED THAT MERELY FILI NG A CONFIRMATION BY THE LENDER DOES NOT PAGE | 4 PROVE THE CREDITWORTHINESS OF THE LENDERS . HE FURTHER SUBMITTED THAT THE ASSESSEE HAS BEEN GIVEN A LOAN OF 26,00,000 BY 2 COMPANIES WHO HAVE DEPOSITED CASH PRIOR TO GIVING LOAN TO THE ASSESSEE SHOWS THAT THESE LOANS ARE NOT GENUINE . HE FURTHER STATED THAT THE ASSESSEE HAS MISERABLY FAILED TO PRODUCE THE DIRECTORS OF THOSE COMPANIES TO PROVE THE GENUINENESS OF THE TRANSACTION. 7 . WE HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTION AND PERUSED THE ORDERS OF THE LOWER A UTHORITIES . THE BRIEF FACTS SHOW THAT THE ASSESSEE HAS BORROWED A SUM OF 26 LAKHS FROM TWO COMPANIES . ON EXAMINATION OF THE DETAILS BY THE LEARNED ASSESSING OFFICER SUBMITTED BY THE AO AND RECEIVED UNDER SECTION 133 (SIX) OF THE INCOME TAX ACT FROM THE L ENDERS IT WAS FOUND THAT BOTH THESE COMPANIES HAVE DEPOSITED CASH PRIOR TO ISSUE OF CHEQUES TO THE ASSESSEE . FURTHER, THE ASSESSING OFFICER ISSUED SUMMONS TO THESE PARTIES, WHICH WERE NOT COMPLIED WITH . FURTHER ASSESSEE WAS ALSO ASKED TO PRODUCE THEM DID N OT PRODUCE . IN RESPONSE TO THE NOTICE BY THE ASSESSEE, THE ASSESSEE ALSO DID NOT FILE REPLY TO THE ASSESSING OFFICER . MERELY SUBMITTING THE CONFORMATION DOES NOT DISCHARGE THE INITIAL ONUS BY THE ASSESSEE WHEN THEY LEARNED ASSESSING OFFICER HAS SPECIFICALL Y EXAMINE THE BANK STATEMENT OF THE LENDERS AND FOUND THAT CASH HAS BEEN DEPOSITED BY THEM PRIOR TO ISSUING CHEQUES TO THE ASSESSEE . FURTHER IT IS ALSO APPARENT THAT BASED ON THE DETAILS FURNISHED BY THE ASSESSEE THE HARSH BUILD WELL PRIVATE LIMITED COMPAN Y WHICH IS GIVEN 16 LAKHS TO THE ASSESSEE HAS SHOWN THE RETURNED INCOME OF 27 LAKHS AND FURTHER THE PROFIT AS PER PROFIT AND LOSS ACCOUNT BEFORE TAX WAS 12 LAKHS . FURTHER, IN CASE OF THE BANK STATEMENT OF THE ASSESSEE IT IS APPARENT THAT CASH WAS DEPO SITED PRIOR TO ISSUE OF CHEQUE TO THE ASSESSEE . IT IS ALSO APPARENT THAT FOUR YEARS BANK STATEMENT WAS NOT PROVIDED BY THE ASSESSEE TO THE ASSESSING OFFICER . IN CASE OF SIDDH SAI REALITY PRIVATE LIMITED, THE LENDER SHOWN PROFIT OF 12 LAKHS FOR THE YEAR BUT FILED A RETURN OF INCOME OF 120,000. FURTHER PRIOR TO THE ISSUE OF THE CHEQUE OF 10 LAKHS ON 14 2012 TO THE ASSESSEE THERE WAS DEPOSIT OF 9 LAKHS AND 1 LAKHS ON TWO DIFFERENT DATES PRIOR TO THE ISSUE OF CHEQUES TO THE ASSESSEE. ON THESE TRANS ACTIONS, THE LEARNED ASSESSING PAGE | 5 OFFICER HAS EXPRESSED ITS DOUBT ABOUT THE GENUINENESS OF THE TRANSACTION . THIS GENUINENESS OF THE TRANSACTION CAN ONLY BE PROVED BY THE PRODUCTION OF THE DIRECTORS BEFORE THE ASSESSING OFFICER WHICH ASSESSEE HAS FAILED TO DO REPEATEDLY . ON CAREFUL EXAMINATION OF THE WHOLE ISSUE, AND IN THE INTEREST OF THE JUSTICE WE SET ASIDE THE WHOLE ISSUE BACK TO THE FILE OF THE LEARNED ASSESSING OFFICER WITH A DIRECTION TO THE ASSESSEE TO PRODUCE THE DIRECTORS OF BOTH THE LENDERS COMPANIES BEFORE THE ASSESSING OFFICER FOR THE EXAMINATION AND TO EXPLAIN THE SOURCE OF CASH DEPOSITED IN THEIR BANK ACCOUNT BEFORE ISSUE OF CHEQUES TO THE ASSESSEE. THE LEARNED AO IS DIRECTED TO EXAMINE THEM, IF PRODUCED BY THE ASSESSEE AND THEN DECIDE THE ISSUE A FRESH ON THE MERITS OF THE CASE . IN THE RESULT GROUND NUMBER ONE OF THE APPEAL OF THE ASSESSEE ALONG WITH OTHER GROUNDS OF APPEAL ARE ALLOWED FOR STATISTICAL PURPOSES. 8 . IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR THE PURPOSE TO TEST PURPOSES. ORDER PR ONOUNCED IN THE OPEN COURT ON 1 5 / 1 1 / 2018 . S D / - S D / - ( AMIT SHUKLA ) (PRASHANT MAHARISHI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 1 5 / 1 1 / 2018 A K KEOT COPY FORWARDED TO 1 . APPLICANT 2 . RESPONDENT 3 . CIT 4 . CIT (A) 5 . DR:ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI PAGE | 6 DATE OF DICTATION DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. PS/ PS DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. PS/ PS DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WEBSITE OF ITAT 1 5 . 1 1 . 2 0 1 8 DATE ON WHICH THE FILE GOES TO THE BENCH CLERK DATE ON WHICH THE FILE GOES TO THE HEAD CLERK THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER