DCIT, Circle-1, Meerut V. Modern Chemicals, Meerut

ITA 4502/DEL/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 6452 (ITAT-DELHI)
• Duration Of Justice: 7 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-01-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 2015-2016
• Appeal Filed On: 14-06-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MUNSHI RAM BIHAGRA
• Assessee Lawyers: SUMIT GOYAL; S RAJ KUMAR
• Keywords: Unexplained cash credit; Source of fund; Corroborative evidences; Set aside
• Section: 131; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCHES (CAMP AT MEERUT) BEFORE SHRI N.S. SAINI, ACCOUNTANT MEMBER AND SHRI KULDIP SINGH, JUDICIAL MEMBER ITA NO.4502/DEL./2018 (ASSESSMENT YEAR : 2015-16) DCIT, CIRCLE 1, VS. M/S. MODERN CHEMICALS, MEERUT. PASWARA HOUSE, BAGHPAT ROAD, MEERUT. (PAN : AABFM2563R) (APPELLANT) (RESPONDENT) ASSESSEE BY : S/SHRI RAJ KUMAR &SUMIT GOYAL, CAS REVENUE BY : SHRI MUNSHI RAM BIHAGRA, SENIOR DR DATE OF HEARING : 09.01.2019 DATE OF ORDER : 16.01.2019 O R D E R PER KULDIP SINGH, JUDICIAL MEMBER : THE APPELLANT, DCIT, CIRCLE 1, MEERUT (HEREINAFTER REFERRED TO AS THE REVENUE) BY FILING THE PRESENT APPEAL, SOUGHT TO SET ASIDE THE IMPUGNED ORDER DATED 15.03.2018 PASSED BY LD. C IT (APPEALS), MEERUT QUA THE ASSESSMENT YEAR 2015-16 O N THE GROUNDS INTER ALIA THAT :- 1. WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN DELETING THE ADDITION OF RS.1,28,55,85 2/- MADE BY THE A.O. ON ACCOUNT OF UNEXPLAINED UNSECURE D ITA NO.4502/DEL./2018 2 LOANS AS THE A.O. HAS SUBMITTED IN HIS SCRUTINY REP ORT THAT THE COMMISSIONER OF INCOME TAX (APPEALS) ADMITTED THE ADDITIONAL REPLY OF THE ASSESSEE REGAR DING DETAILS OF SOURCES OF FUNDS WITH PERSONS WHO HAD ADVANCED UNSECURED LOANS WHILE NO SUCH SUBMISSION WAS PRODUCED BY THE ASSESSEE BEFORE THE A.O. DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND NO OPPORTUNITY WAS GRANTED TO THE A.O. TO EXAMINE THE SOURCE OF FU NDS WITH THE PERSONS WHO HAD ADVANCED UNSECURED LOANS . 2. WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN LAW AND FACT IN DELETING THE ADDITION OF RS.1,28,55,852/- MADE BY THE A.O. THE A.O. HAS SUBMITTED IN HIS SCRUTINY REPORT THAT THE PERSONS W HO HAD ADVANCED UNSECURED LOANS DID NOT EXPLAIN THE SOURCE OF FUNDS WITH THEM EVEN DURING THE STATEMENT S RECORDED U/S 131 OF THE T.T. ACT, ] 961 AND STATED AGRICULTURAL INCOME TO BE THE SOURCE OF CASH DEPOSI T AS THE LENDERS HAD ISSUED CHEQUES FROM THEIR RESPECTI VE ACCOUNTS IMMEDIATELY AFTER DEPOSIT OF CASH. 2. BRIEFLY STATED THE FACTS NECESSARY FOR ADJUDICAT ION OF THE CONTROVERSY AT HAND ARE : ASSESSING OFFICER MADE AD DITION OF RS.1,39,21,000/- ON ACCOUNT OF FAILURE OF THE ASSES SEE TO PROVE THE CREDITWORTHINESS OF THE TRANSACTIONS QUA AVAILING O F UNSECURED LOAN FROM SMT. RAJNI AGARWAL, SMT. KAVITA SINGHAL & SMT. NITASHA SINGHAL OF RS.18,23,000/-, RS.11,71,000/- & RS.1,09 ,27,000/- RESPECTIVELY. 3. ASSESSEE CARRIED THE MATTER BY WAY OF AN APPEAL BEFORE THE LD. CIT (A) WHO HAS RESTRICTED THE ADDITION TO THE TUNE OF ITA NO.4502/DEL./2018 3 RS.4,50,400/- ON ACCOUNT OF UNEXPLAINED CASH CREDIT U/S 68 OF THE INCOME-TAX ACT, 1961 (FOR SHORT THE ACT) BY PARTL Y ALLOWING THE APPEAL. FEELING AGGRIEVED, THE REVENUE HAS COME UP BEFORE THE TRIBUNAL BY WAY OF FILING THE PRESENT APPEAL. 4. WE HAVE HEARD THE LD. AUTHORIZED REPRESENTATIVES OF THE PARTIES TO THE APPEAL, GONE THROUGH THE DOCUMENTS R ELIED UPON AND ORDERS PASSED BY THE REVENUE AUTHORITIES BELOW IN T HE LIGHT OF THE FACTS AND CIRCUMSTANCES OF THE CASE. 5. UNDISPUTEDLY, THE ASSESSEE HAS AVAILED OF UNSECU RED LOAN TO THE TUNE OF RS.1,39,21,000/- FROM RAJNI AGARWAL, SM T. KAVITA SINGHAL & SMT. NITASHA SINGHAL OF RS.18,23,000/-, R S.11,71,000/- & RS.1,09,27,000/- RESPECTIVELY. DURING THE YEAR U NDER ASSESSMENT, IT IS ALSO NOT IN DISPUTE THAT THE AFOR ESAID CREDITORS HAVE DECLARED THEIR TOTAL INCOME INCLUDING AGRICULTURAL INCOME AS UNDER:- TOTAL INCOME DECLARED AGRICULTURAL INCOME I. SMT. RAJNI AGARWAL 4,55,600 11,38,509 II. SMT. KAVITA SINGHAL 4,43,310 9,92,404 III. SMT. NITASHA SINGHAL 4,41,600 12,35,499 IT IS ALSO NOT IN DISPUTE THAT ALL THE AFORESAID TH REE CREDITORS ARE WIVES OF PARTNERS OF THE ASSESSEE FIRM. 6. SO FAR AS CASE OF RAJNI AGARWAL WHO HAS LENT RS. 18,23,000/- TO THE ASSESSEE FIRM IS CONCERNED, SHE HAS BROUGHT ON RECORD HER BANK ACCOUNTS, BALANCE SHEET, PROFIT & LOSS ACCOUNT & ASSESSMENT ITA NO.4502/DEL./2018 4 DETAILS WHICH HAVE BEEN TABULATED BY THE LD. CIT (A ) AT PAGE 7 OF THE IMPUGNED ORDER. IT IS PROVED ON RECORD THAT RA JNI AGARWAL IS HAVING SAVING BANK ACCOUNT IN UNION BANK AND AGRICU LTURAL INCOME ACCOUNT WITH CENTRAL BANK OF INDIA. AO HAS NOTICED THAT THE INCOME OF RAJNI AGARWAL WAS RS.4,55,600/- WHILE HER AGRICULTURAL INCOME AT RS.11,38,509/- WHO HAS NOT DISPUTED THE O PENING CASH- IN-HAND, THUS DISPUTED THE AGRICULTURAL INCOME ONLY . 7. SO, WHEN THE LD. CIT (A) HAS EXAMINED THE BANK S TATEMENTS OF THE LENDERS AND OTHER DETAILS FURNISHED BY RAJNI AGARWAL BEFORE AO AS WELL AS LD. CIT (A), HE HAS CONCLUDED THAT EX CEPT AGRICULTURAL INCOME OF RS.3,16,319/-, THE REMAINING INCOME IS DULY PROVED FROM HER OPENING BALANCE OF RS.1,83,681/-, C ANE AGRICULTURAL INCOME OF RS.77,000/-, SALES OF SHARES OF RS.11,68,000/- AND CHEQUE REVERSED OF RS.39,000/-, BUT THE ASSESSEE HAS FAILED TO PROVE HER AGRICULTURAL INCOM E WITH SUPPORTING EVIDENCE IN THE SHAPE OF BILLS OF SALE OF CROPS, PURCHASE OF SEEDS, FERTILIZERS, PESTICIDES, MANURES, IRRIGAT ION OF AGRICULTURAL CROPS ETC. AND THEREBY REACHED TO THE CONCLUSION TH AT THE ADDITION TO THE EXTENT OF RS.3,16,319/- REMAINED UNEXPLAINED CA SH CREDIT IN THE HANDS OF THE ASSESSEE PERTAINING TO RAJNI AGARWAL A ND CONFIRMED THE ADDITION TO THAT EXTENT. ITA NO.4502/DEL./2018 5 8. SIMILARLY, IN CASE OF KAVITA SINGHAL AND NITASHA SINGHAL, LD. CIT (A) HAS DULY EXAMINED THEIR BANK ACCOUNTS, BALA NCE SHEET, PROFIT & LOSS ACCOUNT & ASSESSMENT DETAILS WHICH HA S BEEN DULY EXPLAINED IN TABULATED FORM IN THE IMPUGNED ORDER A ND AFTER GETTING HIMSELF SATISFIED, CAME TO THE CONCLUSION THAT IN C ASE OF KAVITA SINGHAL, SHE WAS HAVING OPENING BALANCE OF RS.2,01, 571/-, CANE AGRICULTURAL INCOME OF RS.1,32,000/-, SALE OF SHARE S OF RS.5,00,000/- AND AMOUNT TRANSFERRED FROM DELHI OFF ICE OF RS.39,000/-, BUT SHE HAS ALSO FAILED TO PROVE THE GENUINENESS OF THE LOAN AND HER CREDITWORTHINESS TO THE EXTENT OF AGRI CULTURAL INCOME OF RS.2,98,429/-. 9. LIKEWISE, IN CASE OF NITASHA SINGHAL, FROM THE P ERUSAL OF HER BANK ACCOUNTS, BALANCE SHEET, PROFIT & LOSS ACCOUNT & ASSESSMENT DETAILS, IT IS PROVED ON RECORD THAT SHE WAS HAVING OPENING BALANCE OF RS.1,99,600/-, CANE AGRICULTURAL INCOME OF RS.1, 88,000/-, SALE OF SHARES OF RS.99,50,000/-, AMOUNT TRANSFERRED FROM D ELHI OFFICE OF RS.39,000/- AND AMOUNT RECEIVED FROM MOTHER OF RS.1 ,00,000/- AND THEREBY CONFIRMED THE ADDITION OF RS.4,50,400/- ON ACCOUNT OF AGRICULTURAL INCOME OF WHICH THE ASSESSEE HAS FAILE D TO PROVE THE GENUINENESS AND CREDITWORTHINESS OF THE LENDER. 10. EVEN THE BANK STATEMENTS OF ALL THE THREE CREDI TORS, NAMELY, RAJNI AGARWAL, SMT. KAVITA SINGHAL & SMT. NITASHA S INGHAL, HAVE ITA NO.4502/DEL./2018 6 BEEN DULY VERIFIED/TALLIED BY LD. DR FOR THE REVENU E WITH ASSISTANCE OF THE LD. AR FOR THE ASSESSEE DURING TH E ARGUMENTS AND FOUND TO BE CORRECT. MOREOVER, THE ENTIRE AMOUNTS AVAILABLE IN THE HANDS OF SUNDRY CREDITORS HAVE BEEN DULY SHOWN IN T HE INCOME-TAX RETURN BY THEM ACCEPTED BY THE REVENUE. 11. IN VIEW OF WHAT HAS BEEN DISCUSSED ABOVE, WHEN THE ASSESSEE HAS CATEGORICALLY PROVED ON RECORD THAT HIS LENDERS , NAMELY, RAJNI AGARWAL, SMT. KAVITA SINGHAL & SMT. NITASHA SINGHAL WERE HAVING CREDITWORTHINESS, WHOSE IDENTITY IS NOT IN QUESTION , TO LEND THE AMOUNT TO THE ASSESSEE EXCEPT THE AMOUNT OF RS. RS. 3,16,319/-, RS.2,98,429/- AND RS.4,50,400/- RESPECTIVELY, THE LD. CIT (A) HAS RIGHTLY RESTRICTED THE ADDITION TO THAT EXTENT. SO , FINDING NO ILLEGALITY OR PERVERSITY IN THE IMPUGNED ORDER OF T HE LD. CIT (A), PRESENT APPEAL FILED BY THE REVENUE IS HEREBY DISMI SSED. ORDER PRONOUNCED IN OPEN COURT ON THIS 16 TH DAY OF JANUARY, 2019. SD/- SD/- (N.S. SAINI) (KULDIP SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED THE 16 TH DAY OF JANUARY , 2019 TS COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A), MEERUT. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.