JIYA MEERAJ BAJAJ, MUMBAI V. ITO WD 19(3)(4), MUMBAI

ITA 4474/MUM/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 8096 (ITAT-MUMBAI)
• Duration Of Justice: 9 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-03-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2006-2007
• Appeal Filed On: 01-06-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: SATBIR SINGH
• Keywords: Unexplained cash credit; Source of fund
• Section: 143(3); 68

Judgement Text

I.T.A NO.4474/ MUM/2010 JIYA NEERAJ BAJAJ 1 IN THE INCOME TAX APPELLATE TRIBUNAL, SMC BENCH, MUMBAI. [ BEFORE SHRI PRAMOD KUMAR, ACCOUNTANT MEMBER ] I.T.A NO.4474/ MUM/2010 ASSESSMENT YEAR: 2006-07 JIYA NEERAJ BAJAJ, .. APPELLANT 61, DAKSHIN PALI, D MONTE PARK ROAD, BANDRA (W), MUMBAI-50 PA NO.ADDPC 7495 F VS INCOME TAX OFFICER WARD 19(3(4) ,. RESPONDEN T PIRAMAL CHAMBERS, MUMBAI-12. APPEARANCES: S.S. AGARWAL, FOR THE APPELLANT SATBIR SINGH, FOR THE RESPONDENT O R D E R 1. THE SHORT GRIEVANCE THAT I AM REQUIRED TO ADJUDI CATE IN THIS APPEAL IS WHETHER OR NOT THE CIT (A) WAS JUSTIFIED IN UPHOLDING THE A DDITION OF ` .1,35,000 AS UNEXPLAINED CASH CREDIT UNDER SECTION 68 OF THE ACT . THE ASSESSMENT YEAR INVOLVED IS 2006-07 AND THE IMPUGNED ASSESSMENT IS FRAMED UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961. 2. BRIEFLY STATED THE RELEVANT MATERIAL FACTS ARE L IKE THIS. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTIC ED THAT THE ASSESSEE HAS RECEIVED FOLLOWING LOANS BUT PAN NOS. OF THE LENDERS ARE NOT PLACED ON RECORD: A) HARDEVI G MANDHYAN ` . 65,000 B) KIRAN H MANDHYAN ` . 25,000 I.T.A NO.4474/ MUM/2010 JIYA NEERAJ BAJAJ 2 C) VIJAY H MANDHYAN ` . 45,000 ` .1,35,000 THE ASSESSING OFFICER WAS OF THE VIEW THAT SINCE TH ESE LOANS ARE TAKEN IN THE RELEVANT PREVIOUS YEAR, THE ONUS IS ON THE ASSESSEE TO ESTAB LISH THE IDENTITY AND CREDITWORTHINESS OF THESE LENDERS BUT SINCE THE ASS ESSEE HAS NOT FILED PAN NOS. OR OTHER DETAILS, THE AMOUNTS SAID TO HAVE BEEN RECEIV ED FROM THESE LENDERS ARE REQUIRED TO BE ADDED AS UNDISCLOSED INCOME OF THE A SSESSEE. ACCORDINGLY, AN ADDITION OF ` .1,35,000 WAS MADE. AGGRIEVED, THE ASSESSEE CARRIE D THE MATTER IN APPEAL BEFORE THE CIT (A) BUT WITHOUT ANY SUCCESS. 3. WHILE THE CIT (A) TOOK NOTE OF THE ASSESSEES CO NTENTIONS THAT ALL THE THREE LENDERS ARE GENUINE, THE AMOUNTS ARE RECEIVED THROU GH ACCOUNT PAYEE CHEQUES AND THE PAN NOS. OF TWO OUT OF THESE THREE PARTIES NOW PLACED ON RECORD, THE CIT (A) DECLINED TO DELETE THE ADDITION ON THE GROUND THAT INCOME TAX RETURNS, CAPITAL ACCOUNT, BALANCE SHEET ETC, OF THE AFORESAID PARTIE S WAS NEITHER FURNISHED BEFORE THE CIT(A) NOR BEFORE HIM. THE CIT (A) FURTHER NOTED T HAT EVEN THIS HAS NOT BEEN CLARIFIED AS TO WHAT ARE THE SOURCES OF INCOME OF T HE AFORESAID THREE PERSONS. IN HIS CONSIDERED OPINION, THE CREDITWORTHINESS IS ONE OF THE ESSENTIAL REQUIREMENTS FOR PROVING ANY LOAN AS GENUINE AND SINCE THE ASSESSEE FAILED TO DISCHARGE THE ONUS OF PROVING THE CREDITWORTHINESS, THE ADDITION WAS RIGH TLY MADE BY THE AO. AGGRIEVED BY THE STAND SO TAKEN BY THE CIT (A), THE ASSESSEE IS IN APPEAL BEFORE ME. 4. I HAVE HEARD THE RIVAL CONTENTIONS, PERUSED THE MATERIAL ON RECORD AND DULY CONSIDERED THE FACTUAL MATRIX OF THE CASE AS ALSO T HE LEGAL POSITION. 5. I FIND THAT IT IS NOT IN DISPUTE THAT THE LOANS ARE RECEIVED THROUGH ACCOUNT PAYEE CHEQUES AND THAT PAN NOS. OF TWO OUT OF THREE PARTIES IN RESPECT OF WHICH THE ADDITION MADE ARE ALSO PLACED ON RECORD. I HAVE NO TED THAT THE LOANS IN THE PRESENT APPEAL ARE RATHER MODEST AMOUNT OF ` .65,000, ` .25,000 AND ` .45,000. I HAVE ALSO NOTED THAT THE CIT (A) HAS CONFIRMED THE IMPUGNED A DDITION ON THE SHORT GROUND THAT THE BALANCE SHEET, SOURCE OF INCOME AND OTHER DETAILS OF THE LENDERS HAVE NOT I.T.A NO.4474/ MUM/2010 JIYA NEERAJ BAJAJ 3 BEEN FURNISHED BY THE ASSESSEE BUT THEN THESE DETAI LS ARE NOT ALWAYS AVAILABLE WITH THE ASSESSEE AND FURNISHING OF THIS INFORMATION IS ESSENTIALLY DEPENDANT ON THE COOPERATION FROM THE LENDERS. SINCE THE AMOUNTS HAV E BEEN RECEIVED BY ACCOUNT PAYEE CHEQUES, PRIMA FACIE EXISTENCE OF THESE CREDI TORS IS FREE FROM DOUBT. AS THE DETAILS OF PAN NOS. ARE ALSO PLACED ON RECORD, THA T THESE PERSONS ARE TAX PAYERS AND PEOPLE OF SOME MEANS. IN THIS BACKGROUND, THE MOD EST AMOUNTS WHICH HAVE BEEN ADVANCED BY THESE LENDERS THROUGH ACCOUNT PAYEE CHE QUES CANNOT BE SAID TO BE UNDISCLOSED INCOME OF THE ASSESSEE. IN CASE THERE A RE ANY DOUBTS ABOUT MEANS OF THESE PERSONS TO ADVANCE EVEN SUCH SMALL AMOUNTS, T HE MATTER CAN AT BEST BE TAKEN UP IN THEIR HANDS AND SOURCE OF FUNDS BE EXAMINED. IF AT ALL THERE IS A DOUBT THAT COULD BE WITH REGARD TO MR KIRAN H MANDHYAN IN RESP ECT OF WHOM ONLY PASSPORT IS FURNISHED BUT PAN NO. IS NOT FURNISHED. THERE IS N O WAY FOR THE AO TO VERIFY TRANSACTION FROM LENDERS RECORDS. I THEREFORE, DE EM IT FIT AND PROPER TO REMIT THE MATTER TO THE FILE OF THE CIT (A) FOR THIS LIMITED PURPOSE OF ENABLING THE ASSESSEE TO FILE FURTHER DETAILS IN RESPECT OF MR KIRAN H. MAN DHYAN,( ` .25,000) WHOSE PAN NO. IS NOT FURNISHED. AS REGARDS OTHER TWO PERSONS, VIZ, VIJAY MANDHYAN ( ` .45,000) AND HARDEVI MANDHYAN,( ` . 65,000) PAN NOS. ARE FURNISHED AND THE AMOUNTS AR E RECEIVED THROUGH ACCOUNT PAYEE CHEQUES AND, THEREFORE, IN MY CONSIDERED VIEW, THE ADDITION DESERVES TO BE DELETED. WITH THESE DIRECTIONS, I RE MIT THE MATTER TO THE FILE OF THE CIT (A) FOR FRESH ADJUDICATION OF LIMITED PART OF THE I MPUGNED ADDITION. THE ADDITION OF ` .1,10,000 IS DELETED AND ADDITION OF ` .25,000 IS REMITTED TO THE FILE OF THE CIT (A) FOR FRESH ADJUDICATION. 6. IN THE RESULT, THE APPEAL IS PARTLY ALLOWED IN T HE MANNER INDICATED ABOVE. PRONOUNCED IN THE OPEN COURT ON 14 TH MARCH, 2011 SD/- (PRAMOD KUMAR) (ACCOUNTANT MEMBER) MUMBAI, DATED 14 TH MARCH, 2011 PARIDA I.T.A NO.4474/ MUM/2010 JIYA NEERAJ BAJAJ 4 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. COMMISSIONER OF INCOME TAX (APPEALS),30, MUMBAI 4. COMMISSIONER OF INCOME TAX,CITY-9 , MUMBAI 5. DEPARTMENTAL REPRESENTATIVE, BENCH SMC, MUMBAI //TRUE COPY// BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI I.T.A NO.4474/ MUM/2010 JIYA NEERAJ BAJAJ 5