Sh. Vinod Kumar, Rampura Phul V. The Income-tax Officer, Bathinda

ITA 467/ASR/2014

• Counselvise Citation: 46720914 RSA 2014
• Duration Of Justice: 3 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-10-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 28-10-2014
• Assessment Year: 2010-2011
• Appeal Filed On: 17-07-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: J K GUPTA
• Keywords: Gross profit estimation; Bogus loan
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENCH, AMRITSAR. (SMC) BEFORE SH. B.P. JAIN, ACCOUNTANT MEMBER I.T.A. NO. 467 (ASR)/2014 ASSESSMENT YEAR: 2010-11 PAN: ACLPK6012H SH. VINOD KUMAR, VS. INCOME TAX OFFICER, PROP. V.K. TRADING CO., WARD- 1(3), BATHINDA RAMPURA PHUL. (APPELLANT) (RESPONDENT) APPELLANT BY: SH. J.K. GUPTA, ADV. RESPONDENT BY: SH. TARSEM LAL, DR DATE OF HEARING: 28.10.2014 DATE OF PRONOUNCEMENT: 31.10.2014 ORDER 1) THIS APPEAL OF THE ASSESSEE ARISES OUT FR OM THE ORDER OF LEARNED CIT(A), BATHINDA, DATED 29.04.2014 FOR THE ASSESSME NT YEAR 2010-11. 2) THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: I. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW, THE LEARNED CIT(A) ERRED IN UPHOLDING THE ADDITION OF RS. 30000/- IN TRADING ACCOUNT. II. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW, THE LEARNED CIT(A) ERRED UPHOLDING THE CASH CREDIT OF RS.111047/- IN THE NAME OF SMT. SANTOSH RANI. III. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW, THE LEARNED CIT(A) ERRED UPHOLDING THE CASH CREDIT OF RS. 67200/- IN THE NAME OF SMT. SALOCHNA DEVI. 2 IV. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW, THE LEARNED CIT(A) ERRED IN UPHOLDING THE ADDITION OF RS. 50000/- ON ACCOUNT OF LAW HOUSE HOLD EXPENSES. V. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW, THE LEARNED CIT(A) SHOULD HAVE SET OFF THE ADDITION OF BALANCE HOUSE HOLD EXPENSES WITH CASH CREDIT AS WAS DONE BY HIM IN THE CASE OF TRADING ADDITION. VI. THAT ANY OTHER RELIEF MAY KINDLY BE GRANTED TO THE ASSESSEE TO WHOM IT IS FOUND ENTITLED AT THE TIME OF HEARING OF APPEAL. 3) AS REGARDS GROUND NO. 1, THE BRIEF FACTS OF THE CASE, AS PER THE A.O.S ORDER, ARE REPRODUCED HEREIN BELOW: THE ASSESSEE DEALS IN TEA LEAVES. ON THE GROSS TUR NOVER OF RS. 74,34,011/-, GP HAS BEEN SHOWN BY THE ASSESSEE AT R S. 4,62,251/-, WHICH WORKS OUT TO 6.22%, AS COMPARED TO 9.41% SHOW N DURING THE IMMEDIATELY PRECEDING YEAR. ON BEING CONFRONTED FOR STEEP FALL IN THE GP AS COMPARED TO THE ASSESSEES OWN CASE DURING TH E PREVIOUS YEAR, THE ASSESSEE ARGUED THAT DURING THE YEAR, HIS SALES ROSE TO RS. 74.34 LAC AS COMPARED TO RS. 43.62 LAC, HENCE MARGIN WAS REDU CED TO ACHIEVE HIGHER SALES. THE CONTENTION RAISED HAS BEEN CONSID ERED CAREFULLY. IT IS ACCEPTABLE TO SOME EXTENT BUT NOT IN TOTO AS ONE HA S TO COMPROMISE WITH ITS MARGIN TO ACHIEVE HIGHER SALES, BUT IN TH E INSTANT CASE, FALL IN GP IS 51%, WHICH IS ABNORMALLY HIGH. THE ISSUE HAS BEEN DISCUSSED WITH THE ASSESSEE. AFTER DISCUSSION, A LUMP SUM ADD ITION OF RS. 50,000/- IS HEREBY MADE ON ACCOUNT OF LOW GP. 4) LEARNED CIT(A) CONFIRMED THE ADDITION MADE BY TH E A.O. TO THE TUNE OF RS. 30,000/- AND ALLOWED RELIEF OF RS. 20,0 00/- ON ACCOUNT OF INCREASE IN SALES IN THE IMPUGNED YEAR AS COMPARED TO THE PRECEDING YEAR. 5) LEARNED COUNSEL MR. J.K. GUPTA, ADVOCATE, ARGUED THAT THOUGH THERE WAS A FALL IN GROSS PROFIT BUT THE ASSESSEE H AD MAINTAINED BOOKS OF ACCOUNT, WHICH WERE AUDITED UNDER SECTION 44AB OF T HE INCOME-TAX ACT, 3 1961 (FOR SHORT THE ACT), NO DEFECT IN THE BOOKS OF ACCOUNT HAS BEEN POINTED OUT BY THE A.O. AND THE PROVISIONS OF SECTI ON 145(3) HAVE NOT BEEN INVOKED AND THEREFORE, NO ADDITIONS SHOULD HAV E BEEN MADE BY THE A.O. AS REGARDS THE FALL IN GROSS PROFIT, THE LEARN ED AR ARGUED THAT THE GROSS PROFIT CANNOT REMAIN STATIC YEAR TO YEAR AND IT DEPENDS UPON THE CIRCUMSTANCES AND FACTS OF THE CASE AND THEREFORE, THE ASSESSEE TO MEET THE COMPETITION HAD INCREASED THE SALES, WHICH HAD BROU GHT DOWN THE GROSS PROFIT AND ACCORDINGLY THE ADDITION CONFIRMED BY TH E LEARNED CIT(A) MAY PLEASE BE DELETED. 6) LEARNED DR, ON THE OTHER HAND, ARGUED THAT THE L EARNED COUNSEL FOR THE ASSESSEE HAS NOT RAISED ANY OBJECTION WITH REGARD TO INVOKING OF SECTION 145(3) OF THE ACT BEFORE THE LEARNED CIT(A) OR EVEN BEFORE THIS BENCH THROUGH THE GROUNDS OF APPEAL AND THEREFORE, HE HAS FORFEITED HIS RIGHT IN THIS REGARD. 7) I HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE FACTS OF THE CASE. THERE IS NO DISPUTE TO THE FACT THAT THE A.O. HAS NOT POINTED OUT ANY DEFECT IN THE BOOKS OF ACCOUNT AND THE BOOKS OF ACC OUNT HAVE NOT BEEN REJECTED BY INVOKING PROVISIONS OF SECTION 145(3) O F THE ACT. EVEN IF THIS GROUND HAS NOT BEEN RAISED BEFORE THE LEARNED CIT(A ) OR EVEN BEFORE US IN THE GROUNDS OF APPEAL, THE FACT REMAINS THAT NO BOOKS OF ACCOUNT HAVE 4 BEEN REJECTED BY INVOKING THE PROVISIONS OF SECTION 145(3) OF THE ACT AND THEREFORE, THE TRADING RESULTS WILL BE DEEMED TO HA VE BEEN ACCEPTED BY THE A.O. THEREFORE, NO ADDITIONS CAN BE MADE BY THE A.O . AND THE ADDITIONS SO MADE BY THE AO AND SUSTAINED BY LEARNED CIT(A) A RE DIRECTED TO BE DELETED. THUS, GROUND NO. 1 RAISED BY THE ASSESSEE IS ALLOWED. 8) AS REGARDS GROUND NO. 2, THE BRIEF FACTS OF THE CASE, AS PER THE A.O.S ORDER, FOR THE SAKE OF CONVENIENCE ARE REPRO DUCED AS UNDER: 3. DURING THE YEAR, THE ASSESSEE HAS RAISED FRESH LOANS FROM SMT. SANTOSH RANI AND SMT. SALOCHNA DEVI AT RS. 1,00,000 /- AND RS. 60,000/-, WHO HAPPENS TO BE MARRIED SISTER AND WIDOW MOTHER O F THE ASSESSEE. THE ASSESSEE WAS REQUIRED TO ESTABLISH GENUINENESS OF T HE LOANS WITH RESPECT TO DOCUMENTARY EVIDENCE. IN RESPONSE THERETO, THE A SSESSEE FURNISHED AFFIDAVITS OF THE CREDITORS CONFIRMING THE LOANS AN D ALSO FILED COPIES OF THEIR RESPECTIVE BANK ACCOUNTS. FROM PERUSAL OF THE SAID BANK ACCOUNTS, IT TRANSPIRES THAT CASH DEPOSITS EQUIVALENT TO THE AMO UNTS OF LOANS WERE MADE INTO THESE ACCOUNTS, WHICH CAST ASPERSIONS OVE R GENUINENESS OF THE LOANS. ACCORDINGLY, THE ASSESSEE WAS REQUIRED TO PR ODUCE THE CREDITORS FOR EXAMINATION. STATEMENT OF SMT. SANTOSH RANI WAS REC ORDED ON OATH ON 13.03.2013 FROM WHICH THE FOLLOWING FACTS EMERGES: I) THE CREDITOR DEPOSED THAT SHE EARNS AROUND RS. 500/- TO RS. 700/- PER MONTH FROM THE BUSINESS OF BOOK BINDING. II) IN THE AFFIDAVIT FILED, IT HAS BEEN DEPOSED TH AT SHE HAS BEEN DOING THE WORK OF BOOK BINDING FOR THE LAST TEN YEA RS AND THE LOAN WAS GIVEN TO THE ASSESSEE OUT OF SAVING FROM BOOK BINDING BUSINESS UP TO THE END OF THE YEAR, SHE HA D BEEN WORKING FOR THE LAST SEVEN YEARS. III) IN THIS WAY, HER TOTAL INCOME/SAVING, IF NOT EVEN A SINGLE PENNY SPENT WORKS OUT AROUND RS. 40 TO 60 THOUSANDS ONLY. IV) CASH DEPOSITS OF RS. 50,000/- EACH HAVE BEEN M ADE ON 27.04.2009 AND 30.04.2009 AND THE LOAN OF RS. 1,00, 000/- HAS BEEN GIVEN TO THE ASSESSEE ON 30.04.2009 I.E. IMMED IATELY AFTER DEPOSIT. 5 V) PRIOR TO SUCH DEPOSIT THERE APPEARS ONLY SINGLE CREDIT OF BALANCE OF RS. 1,465/- IN THIS ACCOUNT AS ON 01.04.2009, W HICH HAS BEEN BROUGHT FORWARDED FROM THE PREVIOUS YEAR. VI) AFTER THAT THERE IS NO DEPOSIT IN THIS ACCOUNT DURING THE YEAR AS WITH THE ONLY CREDIT OF INTEREST OF RS. 26/-, CREDI T BALANCE IS APPEARING AT THE END AT RS. 1,517/- IN THE CREDITOR S OBC BANK, COPY OF WHICH IS PLACED ON RECORDS. VII) THE CREDITOR IS NOT HAVE ANY EVIDENCE OF EARN ING BOOK BINDING INCOME AS SHE DEPOSED THAT SHE IS NOT MAINTAINING A NY ACCOUNTS AND SHE IS ALSO NOT FILING HER INCOME TAX RETURNS. VIII) HUSBAND OF THE ASSESSEE IS RUNNING CYCLE REP AIR SHOP AND ALLEGEDLY EARNING RS. 70,000/- TO 80,000/-, BUT AGA IN HE IS ALSO NOT FILING HIS INCOME TAX RETURNS. HOWEVER, IN THE AFFIDAVIT IT IS CLEARLY MENTIONED THAT THE LOAN WAS OUT OF SAVING O F THE CREDITORS BOOK BINDING BUSINESS. X) THE ALLEGED LOAN HAS NOT BEEN RECEIVED BACK TIL L DATE, I.E, AFTER EXPIRY OF PERIOD OF AROUND THREE YEARS. FROM THE ABOVE, IT IS CLEAR THAT THE CREDITOR IS NOT A PERSON OF SUFFICIENT MEANS TO ADVANCE LOAN OF RS. 1,00,000/-. IN CASE, WHOLE OF THE ALLEGED INCOME OF THE CREDITOR FROM BOOK BINDING IS CLUBBED TOGETHER UPTO THE YEAR OF LOAN I.E. LAST SEVEN YEARS (AS TH REE YEARS OUT OF THE LAST TEN YEARS HAVE FURTHER GONE FROM THE DATE OF LOAN), THEN ALSO TOTAL SAVINGS REMAINS MUCH BELOW RS. 1,00,000/-. THE SAVINGS WERE STATED TO BE KEPT BY THE CREDITOR AT HOME FOR THE LAST TEN YEARS DESP ITE THE FACT THAT SHE HAS BEEN MAINTAINING A BANK ACCOUNT. THE ABOVE FACTS LE AD THE UNDERSIGNED TO AN IRRESISTIBLE CONCLUSION THAT THE CREDITOR IS NOT A PERSON OF SUFFICIENT MEANS TO ADVANCE THIS MUCH MONEY TO THE ASSESSEE. F URTHER, PROOF OF BOOK BINDING INCOME COULD NOT BE ESTABLISHED WITH D OCUMENTARY EVIDENCE. IPSO FACTO, THE ASSESSEES OWN UNACCOUNTED MONEY HAS BEEN BROUGHT BACK IN THE GARB OF UNSECURED LOAN AND FOR THE PURPOSE, THE CREDITORS BANK ACCOUNT HAS BEEN UTILIZED AS CONDUI T PIPE TO BRING BACK THE UNACCOUNTED MONEY. AFFIDAVIT FURNISHED BY THE C REDITOR DESERVE NO COGNIZANCE BEING IT IS NOTHING MORE THAN A SELF-SER VING EVIDENCE MISCONCEIVED TO JUSTIFY THE ASSESSEES BOGUS LOAN. SINCE NO SATISFACTORY EXPLANATION IN RESPECT OF THIS LOAN COULD BE OFFERE D, HENCE THE CASH CREDIT SHOWN IN THE NAME OF SMT. SANTOSH RANI IS HEREBY AD DED TO THE INCOME U/S 68 OF THE ACT TREATING THE LOAN TO BE BOGUS. SI NCE LOAN OF RS. 1,00,000/- HAS BEEN FOUND TO BE BOGUS, HENCE INTERE ST EXPENSES CLAIMED THEREON AT RS. 11,047/- ARE ALSO TREATED TO BE BOGU S AND ADDED TO THE 6 INCOME OF THE ASSESSEE. IN THIS WAY, TOTAL ADDITION ON THIS COUNT WORKS OUT TO RS. 1,11,047/-, WHICH IS HEREBY MADE U/S 68 OF THE ACT. BEING SATISFIED THAT THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OF INCOME IN RESPECT OF THIS LOAN, PENA LTY PROCEEDINGS U/S 271(1)(C) OF THE ACT ARE BEING INITIATED SEPARATELY . 9) THE LEARNED CIT(A) CONFIRMED THE ORDER OF THE A. O. ON THIS VERY GROUNDS. 10) LEARNED COUNSEL FOR THE ASSESSEE MR. J.K. GUPTA, ARGUED THAT THE ASSESSEE HAS FURNISHED THE AFFIDAVITS OF THE CR EDITORS CONFIRMING THE LOANS AND HAS FILED THE COPIES OF THEIR RESPECTIVE BANK ACCOUNTS. THE STATEMENT OF THE CREDITOR HAS BEEN TAKEN, WHICH IS ON RECORD, WHEREIN SHE CONFIRMED OF HAVING GIVEN THE LOAN TO THE ASSESSEE . SMT. SANTOSH RANI BEING THE SISTER OF THE ASSESSEE HAD ADVANCED LOAN OF RS. 1,00,000/- WHO IS DOING THE BUSINESS OF BOOK BINDING FOR THE LAST 7 YEARS, AND OUT OF THE EARNING FROM THE BOOK BINDING AND HER PAST SAVINGS, WHICH WAS DEPOSITED IN HER BANK ACCOUNT, THE LOAN WAS GIVEN TO THE ASSE SSEE. THERE IS NOTHING ON RECORD BROUGHT BY ANY OF THE AUTHORITIES BELOW T HAT THE SAID MONEY DEPOSITED BY THE CREDITOR BELONGS TO THE ASSESSEE. THE CREDITOR HAVING A MEAGER INCOME WAS NEVER TAXABLE AND THEREFORE, HE D ID NOT FILE THE RETURN OF INCOME. ACCORDINGLY, HE PRAYED TO DELETE THE ADD ITIONS SO MADE BY THE A.O. LEARNED COUNSEL FOR THE ASSESSEE FURTHER RELIE D UPON THE DECISIONS OF VARIOUS COURTS, WHICH ARE AS UNDER: 7 I. COMMISSIONER OF INCOME TAX VS. RAM NARAIN GOEL, 2 24 ITR 180; II. COMMISSIONER OF INCOME TAX VS. METACHEM INDUSTRIES , 245 ITR 160 III. JAWAHAR LAL VS. ITO, 35 ITR 71 (TRIB.) (CHD.). 11) LEARNED DR, ON THE OTHER HAND, ARGUED THAT THE CR EDITOR IS NOT ASSESSED TO TAX AND THE CREDITOR IS EARNING RS. 500 /- TO 700/- PER DAY ONLY CANNOT SAVE RS. 1,00,000/- AND THEREFORE, THERE IS NO SCOPE FOR THE CREDITOR TO SAVE RS. 1,00,000/-. THEREFORE, THE CRE DITWORTHINESS OF THE CREDITOR IS NOT PROVED. THUS, HE PRAYED TO CONFIRM THE ORDER OF LEARNED CIT(A). 12) THE LEARNED AR IN THE REJOINDER ARGUED AND INVITE D MY ATTENTION AT HIS EXPLANATION BEFORE THE LEARNED CIT(A) WHICH HAS BEEN REPRODUCED AT PARA 3.2 (PAGE NOS. 5 & 6) WHEREBY THE MISTAKE O F THE A.O. (DUE TO OVERSIGHT) WAS POINTED OUT THAT THE A.O. HAS WRONG LY WRITTEN THE INCOME OF CREDITOR AT RS. 500/- TO 700/- INSTEAD OF RS. 5, 000/- TO 7,000/- AND THE LEARNED CIT(A) HAS NOT TAKEN ANY COGNIZANCE OF THE SAME AND HE DID NOT MAKE ANY FURTHER INQUIRY IN THIS REGARD. HE ALSO DR EW MY ATTENTION TO THE STATEMENT OF THE CREDITOR AT PAGE 10 AND 11 OF THE PB, WHEREIN IT HAS BEEN STATED THAT THE HUSBAND OF THE CREDITOR EARNS RS. 7 0,000/- TO 80,000/- IN A YEAR BY DOING THE BUSINESS OF CYCLE REPAIR. THE CRE DITOR ALSO STATED THAT THE EXPENDITURE OF THE FAMILY IS RS. 5,000/- PER MO NTH. 8 13) I HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED TH E FACTS OF THE CASE. THERE IS NO DISPUTE THAT THE CREDITOR SMT. SA NTOSH RANI BEING THE SISTER OF THE ASSESSEES MOTHER HAD SUBMITTED THE A FFIDAVIT BY CONFIRMING THE LOAN GIVEN TO THE ASSESSEE. IT IS ALSO NOT DISP UTED THAT RS. 1,00,000/- HAD BEEN DEPOSITED AS CASH IN THE BANK ACCOUNT OF T HE CREDITOR AND THE LOAN HAS BEEN GIVEN IMMEDIATELY AFTER THE CASH DEPO SIT. AS REGARDS THE EARNING STATED IN THE STATEMENT AT RS. 500/- TO 700 /- PER MONTH FROM THE BUSINESS OF THE BOOK BINDING OF THE CREDITOR WHICH HAS BEEN EXPLAINED TO BE RS. 5,000/- TO 7,000/- PER MONTH BY THE ASSESSEE BEFORE THE LEARNED CIT(A), AND THE LEARNED CIT(A) HAS NOT MADE ANY FUR THER INQUIRY AND THEREFORE, THE EXPLANATION OF THE ASSESSEE THAT THE CREDITOR EARNS RS. 5,000/- TO 7,000/- PER MONTH IS ACCEPTED. IN THE CI RCUMSTANCES AND FACTS OF THE CASE, THOUGH THE CREDITOR DOES NOT APPEAR TO BE TAXABLE DURING THE YEARS OF THE SAVINGS, AND THEREFORE BY PERUSING THE EARNINGS AND EXPENSES OF THE FAMILY, AND ASSESSEE NOT BEING THE INCOME TA X ASSESSEE, I AM OF THE VIEW THAT THE CREDITOR BEING THE REAL SISTER OF THE ASSESSEE MUST HAVE GIVEN RS. 1,00,000/- LOAN BY DEPOSITING CASH IN HER BANK ACCOUNT. THE ASSESSEE HAD PROVED THE IDENTITY, CREDITWORTHINESS AND GENUI NENESS OF THE TRANSACTION AND THEREFORE, HE HAS DISCHARGED HIS ON US AND THEREFORE, NO ADDITION IS CALLED FOR AND THE ADDITION SUSTAINED B Y LEARNED CIT(A) IS 9 DIRECTED TO BE DELETED ALONG WITH THE INTEREST OF R S. 11,047/-. THE ORDER OF LEARNED CIT(A) IS REVERSED AND THE ADDITION OF RS. 1,11,047/- IS DIRECTED TO BE DELETED. THUS, THE GROUND NO. 2 RAISED BY THE ASSESSEE IS ALLOWED. 14) AS REGARDS GROUND NO. 3, THE BRIEF FACTS OF THE C ASE, AS PER THE A.O.S ORDER, IS REPRODUCED BELOW FOR THE SAKE OF C ONVENIENCE: 3.1 SIMILARLY LOAN OF RS. 60,000/- HAS BEEN RAISE D BY THE ASSESSEE FROM HIS MOTHER, NAMELY, SMT. SALOCHNA DEVI, WHO IS A WIDOW LADY OF AROUND 67 YEARS, WHO HAS ALSO FILED AN AFFIDAVIT AF FIRMING THE LOAN AND MADE A CASH DEPOSIT OF RS. 60,000/- BEFORE ADVANCI NG THE ALLEGED LOAN TO THE ASSESSEE. IN AN ANSWER TO QUESTION NO. 5 OF HER STATEMENT, SHE FIRSTLY STATED THAT SHE GIVEN CASH OF RS. 60,000/- TO HER S ON BUT SUBSEQUENTLY STATED THAT CASH WAS DEPOSITED BY HER SON INTO BANK AND THEN CHEQUE WAS ISSUED BY HER. SHE ALSO DOES NOT FILE HER RETURNS. ALTHOUGH, SHE DEPOSED THAT THE DEPOSIT WAS MADE OUT OF HER INCOME OF BOOK BINDING BUT NOTHING COULD BE BROUGHT ON RECORD TO ESTABLISH THAT THE LA DY HAVING AGE OF 67 YEARS EARNS RS. 70,000/- TO RS. 80,000/- P.A. FROM BOOK BINDING AND ADVANCE HAS BEEN MADE OUT OF HER SAVINGS. NO DEPOSI TS OF SAVING ARE APPEARING IN HER BANK ACCOUNT. IT TRANSPIRES FROM P ERUSAL OF THE BANK ACCOUNT THAT AS AND WHEN ANY LOAN ETC., IS INTENDED TO BE GIVEN BY THE CREDITOR TO ANYBODY ELSE, CASH DEPOSIT OF LIKEWISE AMOUNT IS MADE AND LOAN IS ADVANCE. HENCE, APPARENTLY THE BANK ACCOUNT IS BEING UTILIZED JUST TO GIVE ENTRIES. IN VIEW OF THE ABOVE, THIS LOAN IS ALSO TREATED AS BOGUS AND ADDED TO THE INCOME OF THE ASSESSEE U/S 68 OF THE A CT. SINCE LOAN OF RS. 60,000/- HAS BEEN FOUND TO BE BOGUS, HENCE INTEREST EXPENSES CLAIMED THEREON AT RS. 7,200/- ARE ALSO TREATED TO BE BOGUS AND ADDED TO THE INCOME OF THE ASSESSEE. IN THIS WAY, TOTAL ADDITION ON THIS COUNT WORKS OUT TO RS. 67,200/-, WHICH IS HEREBY MADE U/S 68 OF THE ACT. BEING SATISFIED THAT THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OF INCOME IN RESPECT OF THIS LOAN, PENA LTY PROCEEDINGS U/S 271(1)(C) OF THE ACT ARE BEING INITIATED SEPARATELY . 10 15) BOTH THE PARTIES MADE THE SIMILAR ARGUMENTS WITH REGARD TO THIS ADDITION. 16) I HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED TH E FACTS OF THE CASE. THE CREDITOR SMT. SALOCHNA DEVI IS THE MOTHER OF THE ASSESSEE WHO IS THE WIDOW LADY OF AROUND 67 YEARS HAS FURNISHED THE AFFIDAVIT CONFIRMING THE LOAN GIVEN TO THE ASSESSEE BY MAKING A CASH DEPOSIT OF RS. 60,000/-. SHE IS NOT AN INCOME TAX ASSESSEE. SHE HA S STATED IN HER STATEMENT BEFORE THE A.O. OF DOING BOOK BINDING BUS INESS FROM WHERE SHE EARNS RS. 70,000/- TO 80,000/- PER ANNUM, IS NO T DISPUTED. THE SAID CASH WAS GIVEN TO THE ASSESSEE, WHO DEPOSITED THE S AME IN THE CREDITORS ACCOUNT FROM WHERE CHEQUE HAS BEEN TAKEN. SHE HAS A LSO STATED THAT SHE IS LIVING WITH HER SON. IN THIS CIRCUMSTANCES AND FACT S OF THE CASE, I AM OF THE VIEW THAT THE ASSESSEE HAS PROVED THE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTION AND ACCORDINGLY NO A DDITION OF RS. 60,000/- IS CALLED FOR ALONGWITH THE INTEREST OF RS . 7,200/-. ACCORDINGLY, THE ORDER OF LEARNED CIT(A) IS REVERSED AND THE A. O. IS DIRECTED TO DELETE THE ADDITION OF RS. 67,200/-. THUS, GROUND NO. 3 RA ISED BY THE ASSESSEE IS ALLOWED. 17) AS REGARDS GROUND NOS. 4 AND 5, BRIEF FACTS OF TH E CASE, AS PER A.O.S ORDER, ARE REPRODUCED AS UNDER: 11 4. FROM THE PERUSAL OF CAPITAL ACCOUNT OF THE ASS ESSEE, IT HAS BEEN NOTICED THAT A PETTY WITHDRAWAL OF RS. 40,000/- HAS BEEN MADE FOR HOUSEHOLD EXPENSES. ON BEING CONFRONTED, IT HAS BEE N STATED THAT HER WIFE ALSO CONTRIBUTED RS. 30,000/- FOR HOUSEHOLD EXPENSE S, BUT NOTHING COULD BE BROUGHT ON RECORDS TO ESTABLISH GENUINENESS OF T HE ASSESSEES CONTENTION. THE ASSESSEES FAMILY CONSISTS OF FIVE MEMBERS I.E. SELF, WIFE, WIDOW MOTHER AND TWO SCHOOL GOING CHILDREN. EVEN IF THE WITHDRAWALS ARE ACCEPTED AT RS. 70,000/-, STILL IT WORK OUT BEL OW RS. 6,000/- P.M., WHICH CONSIDERED TO BE QUITE INSUFFICIENT TO MEET H OUSEHOLD EXPENSES OF A FAMILY CONSISTING OF FIVE MEMBERS IN THESE HARD DAY S, ESPECIALLY TWO OF THE ASSESSEES CHILDREN ARE SCHOOL GOING. AFTER DIS CUSSION, HOUSEHOLD EXPENSES OF THE ASSESSEE ARE FAIRLY ESTIMATED @ RS. 12,000/- P.M. I.E. AT RS. 1,44,000/-. ACCORDINGLY, AN ADDITION OF RS. 74, 000/- IS HEREBY MADE ON ACCOUNT OF LOW HOUSEHOLD WITHDRAWALS. 18) LEARNED CIT(A) CONFIRMED THE ADDITION TO THE TUNE OF RS. 50,000/- AND ALLOWED THE RELIEF OF RS. 24,000/- VID E PARA 6.3 (PAGE 10) OF HIS ORDER. 19) I HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED TH E FACTS OF THE CASE. 20) THE A.O. HAS ESTIMATED THE EXPENSES ON ACCOUNT OF WITHDRAWALS AT RS. 12,000/- PER MONTH, BUT NO BASIS OF THE SAME HAS BEEN GIVEN WHILE ESTIMATING THE SAME. THOUGH, THE ASSESSEE IS LIVING IN HIS OWN HOUSE IN A SMALL TOWN WHICH HAS BEEN EXPLAINED BY THE ASSESSEE AND IN THE CIRCUMSTANCES AND FACTS OF THE CASE, NO ADDITION IS WARRANTED. ACCORDINGLY, THE ORDER OF THE LEARNED CIT(A) ON THI S VERY GROUND IS REVERSED AND THE A.O. IS DIRECTED TO DELETE THE ADD ITION SO MADE AND SUSTAINED BY LEARNED CIT(A). 12 21) SINCE THE ADDITIONS MADE BY THE A.O. ON ACCOUNT O F WITHDRAWALS HAVE BEEN DELETED HEREINABOVE, THERE IS NO QUESTION OF SETTING OFF THE SAME AGAINST THE CASH CREDIT, WHICH IN FACT, HAS ALREADY BEEN DELETED VIDE GROUND NOS. 1, 2 AND 3 HEREINABOV E. THUS, GROUND NOS. 4 AND 5 RAISED BY THE ASSESSEE ARE ALLOWED. 22) GROUND NO. 6 IS GENERAL IN NATURE THEREFORE IT DO ES NOT REQUIRE ANY ADJUDICATION. 23) IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLO WED. ORDER PRONOUNCED IN THE OPEN COURT ON 31 ST OCTOBER, 2014 SD/- (B.P. JAIN) ACCOUNTANT MEMBER DATED: 31 ST OCTOBER, 2014 /RK/ COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE: SH. VINOD KUMAR, PROP. V.K. TRADING C O., RAMPURA PHUL. 2. THE ITO, WARD- 1(3), BATHINDA. 3. THE CIT(A), 4. THE CIT, 5. THE SR DR, I.T.A.T., TRUE COPY BY ORDER (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENCH: AMRITSAR.