Hare Krishna Varma, Bhubaneswar V. ITO, Ward-2(2), Bhubaneswar

ITA 450/CTK/2015

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 7164 (ITAT-CUTTACK)
• Duration Of Justice: 1 year(s) 3 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-03-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 22-03-2017
• Assessment Year: 2005-2006
• Appeal Filed On: 01-12-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D K PRADHAN
• Assessee Lawyers: P R MOHANTY
• Keywords: Unexplained cash credit

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CUTTACK SMC BENCH, CUTTACK BEFORE SHRI N.S SAINI, ACCOUNTANT MEMBER ITA NO.450/CTK/2015 ASSESSMENT YEAR : 2005 - 06 HARE KRISHNA VARMA, A - 39, NEELKANTHA NAGAR, NAYAPALLI, BHUBANESWAR. VS. ITO, WARD 2(2), BHUBANESWAR. PAN/GIR NO. ADEPV 6343 E (APPELLANT ) .. ( RESPONDENT ) ASSESSEE BY : SHRI P.R.MOHANTY, AR REVENUE BY : SHRI D.K.PRADHAN , DR DATE OF HEARING : 22 /03 / 2017 DATE OF PRONOUNCEMENT : 22 /03 / 2017 O R D E R THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A) - 1, BHUBANESWAR , DATED 18.8.2015, FOR THE ASSESSMENT YEAR 2005 - 06. 2. THE SOLE ISSUE INVOLVED IN THIS APPEAL IS THAT THE LD CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.2,02,397/ - AS UNEXPLAINED CREDIT U/S.68 OF THE ACT MADE BY THE ASSESSING OFFICER . 3. I HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF LOWER AUTHORITIES AND MATERIALS AVAILABLE ON RECORD. THE ASSESSING OFFICER OBSERVED THAT THE ASSESSE HAS CLAIMED TO HAVE RECEIVED UNSECURED LOAN 2 ITA NO.450/CTK/2015 ASSESSMENT YEAR :2005 - 06 FROM FRIENDS AND RELAT IVES OF RS.8,00,000/ - DURING THE YEAR UNDER CONSIDERATION. THE ASSESSING OFFICER R EQUIRED THE ASSESSEE TO PROVE THE GENUINENESS OF LOANS BY FILING DETAILS ALONGWITH CONFIRMATION LETTERS. THE ASSESSING OFFICER FOUND THAT ALL THE LOANS HAD BEEN OBTAINED I N CASH EXCEPT THAT FROM DR. VIJAYA LAXMI VISOI AMOUNTING TO RS.32,103/ - , WHICH WAS RECEIVED IN CHEQUE. HE ALSO OBSERVED THAT ALL THE LOANS EXCEPT A SMALL AMOUNT OF RS.7,397/ - WHICH WAS RECEIVED FROM ONE MAHMUD KHAN, WERE OF RS.19,500/ - FROM EACH CREDITOR UNIFORMLY. CONSIDERING THESE FACTS, HE CONCLUDED THAT THE LOANS TO THE EXTENT OF RS.7,67,897/ - ARE NOT GENUINE AND ADDED THE SAME TO THE INCOME OF THE ASSESSEE. 4. ON APPEAL, THE CIT(A) CALLED FOR A REMAND REPORT, WHEREIN, THE ASSESSING OFFICER STATED THAT APART FROM THE LOAN OBTAINED FROM DR. VISOI, THERE WERE THREE MORE LOAN CREDITORS AS MENTIONED BELOW, COULD BE ACCEPTED AS GENUINE: 1 ) SRI SARAT CH BISHOYI RS.19,500/ - 2 ) SMT REKHA AGRAWAL RS.19,500/ - 3 ) SRI SANJAY KUMAR AGARWAL RS.19,500/ - 5. LD CIT(A) AFTER CONSIDERING THE SUBMISSION OF THE ASSESSEE AND REMAND REPORT CONCLUDED THAT THE LOANS FROM THE CREDITORS WHO HAVE PANS AND WHO HAVE CONFIRMED THE TRANSACTIONS SUBSEQUENTLY COULD BE ACCEPTED AS GENUINE APART FROM THE LOANS WHICH HAVE B EEN TREATED AS GENUINE BY THE ASSESSING OFFICER IN THE REMAND REPORT. ACCORDINGLY, HE HELD T HAT THE FOLLOWING CREDITORS HAD NO PAN AND IN WHOSE CASES THE THREE INGREDIENTS OF 3 ITA NO.450/CTK/2015 ASSESSMENT YEAR :2005 - 06 PROVING A LOAN TRANSACTION HAVE NOT BEEN ESTABLISHED ARE CONSIDERED AS NOT GENUI NE: 1) SARAT CHANDRA VISHOYI : RS.19,500/ - 2) SHASIKANTA VERMA : RS.19,500/ - 3) JAIMATI DEVI VERMA : RS.19,500/ - 4) SURYA PRAKASH GUPTA : RS.19,500/ - 5) SAFIKA KHATUN : RS.19,500/ - 6) RASHID NZIR : RS.19,500/ - 7) AHMED SAYED : RS.19,500/ - 8) USHA AGARWALA : RS.19,500/ - 9) S.K.MUNA : RS.19,500/ - 10) SANTOSH KUMAR GUPTA : RS.19,500/ - 11) MAHAMUD KHAN : RS. 7,397/ - TOTAL : RS.2,02,397/ - 6. HENCE, HE DELETED THE ADDITION OF RS.5,65,500/ - AND CONFIRMED THE ADDITION OF RS.2,02,397/ - . 7. BEING AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE ME. 8. LD AUTHORISED REPRESENTATIVE OF THE ASSESSEE ARGUED AND SUBMITTED THAT THE CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE ADDITION OF RS.2,02,397/ - U/S.68 OF THE ACT BEING UNSECURED LOA N RECEIVED FR OM 11 PERSONS ON THE GROUND T H AT THEY DID NOT HAVE PAN. HE ARGUED THAT AS THE INCOME OF THE LOAN CREDITORS IS BELOW TAXABLE LIMIT, THEY WERE NOT REQUIRED TO OBTAIN PAN AND HENCE, PAN WAS NOT AVAILABLE. HE SUBMITTED THAT THE LOAN RECEIVED FROM THOSE PERSONS ARE OF SMALL AMOUNT OF RS.19,500/ - EACH. HE SUBMITT ED THAT NO MATERIAL HAS BEEN BROUGHT ON RECORD BY THE REVENUE AFTER MAKING ENQUIRY FROM THE LOAN CREDITORS THAT THEY DID NOT HAVE THE CAPACITY TO ADVANCE RS.19,500/ - AS LOAN TO THE AS SESSEE. IN ABSENCE OF THE SAME, CONSIDERING THE UNSECURED LOAN AS NOT GE NUINE BECAUSE THEY DID NOT HAVE PAN IS NOT JUSTIFIED. 4 ITA NO.450/CTK/2015 ASSESSMENT YEAR :2005 - 06 9. LD DEPARTMENTAL REPRESENTATIVE SUPPORTED THE ORDER OF THE CIT(A). 10. I FIND THAT THE ADDITION OF RS.2,02,397/ - ON ACCOUNT OF UNSECURED LOAN WAS CONFIRMED BY THE CIT(A) ON THE GROUND THAT THE LOAN CR EDITORS DID NOT HAVE PAN. I FIND FORCE IN THE ARGUMENTS OF LD AUTHORISED REPRESENTATIVE OF THE ASSESSEE THAT THE INCOME OF THE LOAN CREDITORS WAS BELOW THE TAXABLE LIMIT, THEREFORE, THEY WERE NOT REQUIRED TO OBTAIN PAN. I ALSO FIND FORCE IN THE SUBMISSIO NS OF AUTHORISED REPRESENTATIVE OF THE ASSESSEE THAT SMALL AMOUNT OF RS.19,500/ - WAS RECEIVED FROM 11 PERSONS AS UNSECURED LOAN AND NO MATERIAL HAS BEEN BROUGHT ON RECORD BY THE REVENUE AFTER MAKING ENQUIRY THAT THE LOAN CREDITORS DID NOT HAVE THE CAPACITY TO ADVANCE RS.19,500/ - AS LOAN TO THE ASSESSEE. IN THE ABOVE FACTS AND CIRCUMSTANCES OF THE CASE, I AM OF THE CONSIDERED OPINION THAT THE ADDITION OF RS.2,02,397/ - U/S.68 CANNOT BE SUSTAINED IN LAW. I, THEREFORE, SET ASIDE THE ORDER OF THE CIT(A) AND DE LETE THE ADDITION OF RS.2,20,397/ - AND ALLOW THE GROUND OF APPEAL OF THE ASSESSEE. 10. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRO NOUNCED IN THE OPEN COURT ON 22 /03 /2017 IN THE PRESENCE OF PARTIES. SD/ - ( N.S SAINI) A CCOUNTANT MEMBER CUTTACK; DATED 2 2 /03 /2017 B.K.PARIDA, SPS 5 ITA NO.450/CTK/2015 ASSESSMENT YEAR :2005 - 06 COPY OF THE ORDER FORWARDED TO : BY ORDER, SR.PRIVATE SECRETARY ITAT, CUTTACK 1. THE APPELLANT : HARE KRISHNA VARMA, A - 39, NEELKANTHA NAGAR, NAYAPALLI, BHUBANESWAR 2. THE RESPONDENT. ITO, WARD 2(2), BHUBANESWAR. 3. THE CIT(A) - 1 BHUBANESWAR 4. PR.CIT 1, BHUBANESWAR. 5. DR, ITAT, CUTTACK 6. GUARD FILE. //TRUE COPY//