ITO, Agra V. Smt. Sudesh jain Prop M/s Grow More Trading Co, Agra

ITA 426/AGR/2009

• Counselvise Citation: [2011] 135 COUNSELVISE.COM (IT) 2437 (ITAT-AGRA)
• Duration Of Justice: 1 year(s) 5 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-03-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 29-03-2011
• Assessment Year: 2001-2002
• Appeal Filed On: 14-10-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: K C JAIN
• Keywords: Unexplained cash credit; Gift; Search and seizure; Accommodation entries; Onus to prove

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, AGRA BENCH, AGRA BEFORE SHRI P.K. BANSAL, ACCOUNTANT MEMBER AND SHRI H.S. SIDHU, JUDICIAL MEMBER ITA NO. 426/AGRA/2009 ASSTT. YEAR : 2001-02 INCOME-TAX OFFICER, VS. SMT. SUDESH JAIN, 1(1), AGRA. PROP. M/S. GROW MORE TRADING CO. NORTH IDGARH COLONY, AGRA. (PAN ABZPJ 2996 G). ITA NO. 429/AGRA/2009 ASSTT. YEAR : 2001-02 SMT. SUDESH JAIN, VS. INCOME-TAX OFFICER, PROP. M/S. GROW MORE TRADING CO. 1(1), AGRA NORTH IDGARH COLONY, AGRA. (APPELLANT) (RESPONDENT) FOR REVENUE : SHRI VINOD KUMAR JR. D.R. FOR ASSESSEE : SHRI K. C. JAIN, ADVOCATE. ORDER PER P.K. BANSAL, A.M. : THESE CROSS APPEALS BY THE REVENUE AND THE ASSESS EE ARISE OUT OF THE ORDER OF CIT(A) DATED 31.07.2009. THE REVENUE IN ITS APPEAL HAS CHA LLENGED THE DELETION OF ADDITION OF RS.17,00,000/- MADE BY ASSESSING OFFICER U/S. 68 ON ACCOUNT OF UNEXPLAINED CASH CREDITS, BEING THE BOGUS ACCOMMODATION ENTRIES OF LOANS AND OF RS. 88650/- AS UNEXPLAINED INTEREST THEREON FROM GANGA RAM GROUP OF CASES. THE ASSESSEE IN ITS APPEAL HAS CHALLENGED THE SUSTENANCE OF ADDITION OF RS.5,00,000/- MADE BY ASSESSING OFFICER U/S. 68. 2. THE BRIEF FACTS RELATING TO REVENUES APPEAL ARE THAT ON THE BASIS OF INFORMATION RECEIVED FROM ADDITIONAL COMMISSIONER OF INCOME-TAX RANGE-1, AGRA, THE ASSESSING OFFICER IN THE RE- ASSESSMENT PROCEEDINGS NOTICED THAT AS A RESULT OF SEARCH AND SEIZURE OPERATION AT THE PREMISES OF 2 GANGA RAM GROUP OF CASES, IT WAS FOUND THAT VARIOUS ENTITIES BELONGING TO THE SAID GROUP HAD PROVIDED CHEQUES REPRESENTING LOANS TO VARIOUS PERS ONS IN LIEU OF CASH RECEIVED FROM THEM AND THE ENTRIES WERE REVERSED BY SHOWING RETURN OF LOAN BY CHEQUES BY THE CONCERNED DEBTORS AND RETURN OF CASH BY SELF WITHDRAWALS. THE ASSESSEE WA S FOUND TO BE ONE OF SUCH BENEFICIARIES, WHO SHOWED RECEIPT OF RS.17,00,000/- AS LOANS FROM FOLL OWING CONCERNS OF THE GANGA RAM GROUP : M/S. DEVI SAHAI BAIJ NATH RS.2,00,000/- M/S. DEVI SAHAI BAIJ NATH RS.1,50,000/- M/S. DEVI SAHI BAIJ NATH RS.5,00,000/- M/S. NITIN & CO. RS.1,50,000/- M/S. AMIT AGARWAL & CO. RS.2,00,000/- M/S. BAIJNATH AGARWAL & CO. RS.5,00,000/- IN RESPONSE TO THE DETAILED QUESTIONNAIRE GIVEN BY THE ASSESSING OFFICER, THE ASSESSEE FURNISHED COPY OF HER ACCOUNT IN THE BOOKS OF RESPECTIVE CRED ITORS OF GANGA RAM GROUP, COPY OF RESPECTIVE BANK STATEMENTS OF THE CREDITORS REFLECTING THE DEB ITS ON ACCOUNT OF THE IMPUGNED ADVANCES TO THE ASSESSEE AND CONFIRMATION LETTERS OF THE CREDITORS CONTAINING COMPLETE DETAILS OF THE SOURCES OF THE CREDITS IN THEIR BANK ACCOUNTS PRIOR TO ADVANCI NG THE IMPUGNED CREDITS TO THE ASSESSEE. THE ASSESSING OFFICER, HOWEVER, AFTER CONSIDERING THE E XPLANATION OF ASSESSEE AND THE DOCUMENTARY EVIDENCES FURNISHED BEFORE HIM, TREATED THE IMPUGNE D LOANS AS BOGUS ACCOMMODATION ENTRIES AND ADDED THE SUM OF RS.17,00,000/- AND INTEREST OF RS. 88,650/- THEREON TO THE INCOME OF THE ASSESSEE U/S. 68 OF THE ACT. 3. IN APPEAL BEFORE THE CIT(A), THE ASSESSEE SUBMIT TED THAT ALL THE DEPOSITORS ARE INCOME-TAX ASSESSEES AND HAVE CONFIRMED THE DEPOSITS THROUGH T HEIR CONFIRMATIONS. ALL THE DEPOSITORS HAD GIVEN THE SOURCE OF THE AMOUNTS ADVANCED. THE REVEN UE HAD BROUGHT NO MATERIAL ON RECORD TO SUBSTANTIATE THE STAND THAT IT WAS THE ASSESSEES U NACCOUNTED MONEY WHICH WAS ROUTED THROUGH THE DEPOSITORS. THE CIT(A) AFTER CONSIDERING THE CO NTENTIONS OF THE ASSESSEE AND RELYING UPON THE ORDER OF ITAT, AGRA BENCH IN THE CASE OF ITO VS. SR I ADITYA AGARWAL, ITA NO. 262/AGRA/2006, 3 DELETED THE ADDITION MADE BY ASSESSING OFFICER U/S. 68 AS UNEXPLAINED CASH CREDITS AND INTEREST THEREON. 4. THE LEANED DR RELYING UPON THE ORDER OF ASSESSIN G OFFICER, CONTENDED THAT THE CIT(A) WAS NOT JUSTIFIED IN DELETING THE ADDITION WITHOUT APPRECIATING THE FACTS IN RIGHT PERSPECTIVE THAT THE CASH CREDIT ENTRIES REPRESENTED THE ASSESSEES OWN CASH INTRODUCED IN THE BUSINESS THROUGH GANGA RAM GROUP OF CASES, WHO WERE ENGAGED IN PROVI DING ENTRIES AND EARNING COMMISSION THEREON. HE, THEREFORE, REQUESTED THAT THE APPEAL O F THE REVENUE SHOULD BE ALLOWED. 5. THE LEARNED AR, ON THE OTHER HAND, CONTENDS AT T HE OUTSET, THAT THE IMPUGNED ISSUE INVOLVED IN REVENUES APPEAL IS COVERED BY THE DECI SION DATED 06.02.2009 OF THIS TRIBUNAL IN FAVOUR OF ASSESSEE RENDERED IN REVENUES APPEALS IN ASSESSEES OWN CASES FOR ASSESSMENT YEARS 2002-03 AND 2003-04 (ITA NOS. 315 AND 335/AGRA/2006 ), WHEREIN THE SAME DEPOSITORS OF GANGA RAM GROUP ADVANCED LOAN TO THE ASSESSEE IN THE IDEN TICAL FACTS AND CIRCUMSTANCES OF THE CASE. IT WAS FURTHER SUBMITTED THAT THE DEPOSITS WERE RECEIV ED BY ACCOUNT PAYEE CHEQUES AND THE DEPOSITORS ARE ALL ASSESSED TO INCOME-TAX AND HAVE CONFIRMED GIVING OF LOANS TO THE ASSESSEE MENTIONING IN THEIR CONFIRMATION LETTERS THE SOURCE OF THE MONEY ADVANCED AS LOAN. THERE IS NOTHING ON RECORD TO ESTABLISH THAT THE DEPOSITORS EVER ADMITTED TO HAVE GIVEN ACCOMMODATION ENTRIES OF LOAN TO THE ASSESSEE IN LIEU OF CASH REC EIVED FROM HER. THE IDENTITY AND CREDITWORTHINESS OF THE CREDITORS AND GENUINENESS OF TRANSACTIONS ST OOD PROVED FROM THE DOCUMENTARY EVIDENCES FILED BY ASSESSEE. HE HAS ALSO RELIED ON THE OTHER DECISIONS OF THIS TRIBUNAL IN THE CASE OF ACIT VS. DINESH KUMAR JAIN (ITA NO. 314 & 315?AGRA/2005) AND ITO VS. MUKESH KUMAR JAIN (ITA NO. 478/AGR./2004 & 364/AGR./2005. 4 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE CON SIDERED THE SAME INCLUDING THE ORDERS OF THE TAX AUTHORITIES BELOW AND THE DECISIONS CITE D AT BAR. WE FIND THAT THE ISSUE INVOLVED IN APPEAL OF THE REVENUE IS SQUARELY COVERED BY THE DE CISION OF ITAT AGRA DATED 06.02.2009 IN REVENUES APPEALS IN ASSESSEES OWN CASE FOR ASSESS MENT YEARS 2002-03 AND 2003-04 (ITA NOS. 315 AND 335/AGRA/2006), WHEREIN THE SAME DEPOSITORS OF GANGA RAM GROUP ADVANCED LOAN TO THE ASSESSEE IN THE IDENTICAL FACTS AND CIRCUMSTANC ES OF THE CASE AND THE ITAT AFTER CONSIDERING SIMILAR CONTENTIONS OF BOTH THE PARTIES HELD AS UND ER : WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE HAVE ALSO PERUSED THE ORDER OF TRIBUNAL RELIED UPON BY THE LD. COUNSEL FO R THE ASSESSEE. THE ADDITION HAS BEEN MADE BY THE ASSESSING OFFICER ON THE GROUN D THAT (I) GANGA RAM GROUP IS INVOLVED IN GIVING BOGUS ACCOMMODATION ENTRIES A ND (II) THE SUMMONS ISSUED TO THE CREDITORS COULD NOT BE SERVED AND HENCE, THEIR IDENTIFY IS DOUBTFUL. THE LD. CIT (A) HAD DELETED THE ADDITION ON THE GROUND THAT THE INITIAL BURDEN CAST UPON THE ASSESSEE HAS BEEN DISCHARGED BY SUBMITTING THE CONF IRMATION LETTERS GIVING COMPLETE ADDRESS AND PA NUMBER AS ALSO THE COPY OF BANK ACCOUNT. WE ARE IN AGREEMENT WITH THE FINDINGS OF LD. CIT (A). THERE A RE NO BASES TO ARRIVE AT THE FINDING THAT THE AMOUNTS ADVANCED BY THE CREDITORS ARE THE MONIES PROVIDED BY THE ASSESSEE: TO AVAIL ACCOMMODATION ENTRIES. ON THE CO NTRARY, THE CONFIRMATION LETTER ADDRESSED AND P A NUMBER ETC. HAVE BEEN FILED. EXCE PT SUSPICION, THERE IS NOTHING WITH THE ASSESSING OFFICER TO DISBELIEVE THE LOAN T RANSACTION. IT IS ALSO ADMITTED FACT THAT THE FINDING ARRIVED AT IN THE CASE OF GAN GA RAM GROUP CASES WAS NEVER PUT TO THE ASSESSEE AND HENCE, DID NOT PARTAKE THE CHARACTER OF EVIDENCE. WE, THEREFORE, HOLD THAT THE ASSESSEE, HAVING DISCHARGE D THE BURDEN CAST UPON HIM AND THE SAME NOT HAVING BEEN PROVED UNTRUE BY THE ASSES SING OFFICER, THE GENUINENESS OF THE CASH CREDIT HAS BEEN ESTABLISHED AND HENCE, ADDITION WAS RIGHTLY DELETED BY THE LD. CIT (A). THE LD. CIT (A) WAS ALSO JUSTIFIED IN DELETING THE ADDITION BEING INTEREST PAYABLE ON SUCH CREDITS. RESPECTFULLY FOLLOWING THE DECISION OF CO-ORDINATE BENCH, THE APPEAL FILED BY THE REVENUE DESERVES TO BE DISMISSED. 7. NOW, ADVERTING TO THE APPEAL OF ASSESSEE, THE FA CTS ARE THAT THE ASSESSING OFFICER NOTICED THAT ASSESSEE HAD SHOWN RECEIPT OF GIFT OF RS.5 LAC S FROM ONE SHRI LEKH RAJ JAIN OF DELHI. THE ASSESSEE FILED COPY OF GIFT DEED IN SUPPORT. THE AS SESSING OFFICER ISSUED SUMMONS TO THE DONOR 5 ASKING HIM TO EXPLAIN HIS RELATIONSHIP WITH THE ASS ESSEE, TO FURNISH CONFIRMATION REGARDING GIFT, TO EXPLAIN SOURCE OF PAYMENT, TO FURNISH COPY OF BANK ACCOUNT, COPY OF IT RETURNS FOR A.Y. 2001-02 AND TO EXPLAIN WHETHER THE DONOR HAD RECEIVED ANY A MOUNT FROM THE ASSESSEE. HOWEVER, NO REPLY WAS RECEIVED. THE AO FURTHER NOTICED THAT FROM THE BANK ACCOUNT NO. 07SB11063490 WITH THE BANK OF PUNJAB LTD. ROHINI, DELHI HELD IN THE NAME OF DONOR, THERE WAS CREDIT OF RS.12600/- ONLY AS ON 06.01.2001 AND RS.5,00,000/- HAD BEEN DEPOSIT ED ON THE SAME DAY BY TRANSFER AND THEREAFTER WITHDRAWAL OF RS.5,01,500/- HAD BEEN MAD E FOR PURCHASING THE DD FOR GIFT. HE ALSO NOTICED THAT THERE WAS NO RELATION OF ASSESSEE WITH THE DONOR. RELYING ON SEVERAL DECISIONS OF VARIOUS HIGH COURTS AND OF HONBLE SUPREME COURT IN THE CASE OF M/S. MC. DOWELL & CO., 154 ITR 148, THE ASSESSING OFFICER TREATED THE IMPUGNED GIFT AND EXPENDITURE INCURRED THEREON AS NON-GENUINE AND ADDED THE SAME TO THE TOTAL INCOME OF THE ASSESSEE TREATING THE SAME AS UNEXPLAINED CASH CREDIT U/S. 68, WHICH WAS CONFIRME D BY THE LEARNED CIT(A). HOWEVER, THE EXPENDITURE OF RS.10,000/- ADDED BY ASSESSING OFFIC ER STOOD DELETED BY THE CIT(A) FOR WANT OF EVIDENCE. 8. THE LEARNED AR CONTENDED THAT ALL THE EVIDENCES WERE FURNISHED TO ESTABLISH THE GIFT AS GENUINE. THE DONOR IS AN INCOME-TAX PAYER AND HE AD VANCED THE GIFT BY DEMAND DRAFT. GIFT DEED WAS ALSO FILED WITH THE ASSESSING OFFICER WITH AFFI DAVIT OF DONOR IN RESPECT OF THE ABOVE GIFT. THE LEARNED DR, ON THE OTHER HAND, RELIED ON THE ORDERS OF THE AUTHORITIES BELOW. 9. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD INCLUDING THE ORDERS OF THE TAX AUTHORITIES BELOW. IT IS NOT IN D ISPUTE THAT THE ASSESSEE FAILED TO PRODUCE THE DONOR BEFORE THE AO FOR CONFIRMING THE IMPUGNED GIF T. IT IS ALSO BORN OUT ON RECORD THAT NO COMPLIANCE OF SUMMONS SENT BY ASSESSING OFFICER TO THE DONOR, WAS MADE BY THE DONOR. IT IS 6 ALSO EVIDENT FROM THE RECORD THAT THE LEARNED AR OF ASSESSEE SHRI KRISHNA CHAND GUPTA STATED BEFORE THE ASSESSING OFFICER THAT THE ADDRESS OF TH E DONOR IS NOT AVAILABLE WITH THE ASSESSEE, AS IS EVIDENT FROM THE ORDER SHEET ENTRY DATED 18.12.2008 . THE ASSESSEE FAILED EITHER TO EXPLAIN THE RELATIONSHIP WITH THE DONOR OR OCCASION FOR THE GIF T OR THE CAPACITY OF THE DONOR TO ADVANCE GIFT OF SUCH A HUGE AMOUNT TO THE ASSESSEE, WHICH ARE RELEV ANT CONSIDERATION FOR ACCEPTING A GIFT AS GENUINE. THE LEARNED CIT(A) AFTER TAKING INTO ACCOU NT THE DECISIONS IN VARIOUS CASES INCLUDING CIT VS. ANIL KUMAR, 292 ITR 5552 (DEL.) AND DECISIO NS OF ITAT DELHI BENCHES AND AGRA BENCH HAS REACHED THE CONCLUSION THAT THE IMPUGNED GIFT D OES NOT STAND PROVED AS GENUINE BY ASSESSEE AND THEREFORE, HE SUSTAINED THE IMPUGNED CREDIT OF RS.5,00,000/-. HE, HOWEVER, FOR WANT OF EVIDENCE DELETED THE ADDITION MADE ON ACCOUNT OF UN EXPLAINED EXPENDITURE INCURRED ON PROCURING THE GIFT. NO CONTRARY EVIDENCE IS LAID ON RECORD BY THE ASSESSEE TO CONTROVERT THE FINDINGS REACHED BY THE CIT(A). IN FACT, THE ALLEGED GIFT WAS NOT FO UND VERIFIABLE AND THE ASSESSEE FAILED TO DISCHARGE HER ONUS TO PROVE THE GIFT AS GENUINE IN TERMS IDENTITY, CREDITWORTHINESS OF DONOR AND GENUINENESS OF THE TRANSACTION. WE, THEREFORE, FIND NO REASON TO INTERFERE IN THE ORDER OF THE CIT(A) ON THIS COUNT. ACCORDINGLY, THE APPEAL OF AS SESSEE DESERVES TO FAIL. 10. IN THE RESULT, BOTH THE APPEALS OF ASSESSEE AND REVENUE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 29.03.2011. SD/- SD/- (H.S. SIDHU) (P.K. BANSAL) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 29 TH MARCH, 2011 *AKS/- 7 COPY OF THE ORDER FORWARDED TO : 1. APPELLANT 2. RESPONDENT 3. CIT(A) BY ORDER 4. CIT, CONCERNED 5. DR, ITAT, AGRA 6. GUARD FILE ASSISTANT REGISTRAR TRUE COPY