ITO, Ghaziabad V. Shri Pramod Kumar Gupta, Prop., New Delhi

ITA 4737/DEL/2011

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 1680 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 11 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-10-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Next Hearing Date: 01-10-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 31-10-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 131; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : F : NEW DELHI BEFORE SHRI R.S. SYAL, AM & MS SUCHITRA KAMBLE, JM ITA NO.4737/DEL/2011 ASSESSMENT YEAR : 2006-07 ITO, WARD-2(1), GHAZIABAD. VS. PRAMOD KUMAR GUPTA, PROP., M/S CHAMP ENTERPRISES, E-8, LAJPAT NAGAR-III, NEW DELHI. PAN: ACSPG3886G ITA NO.4953/DEL/2011 ASSESSMENT YEAR : 2006-07 PRAMOD KUMAR GUPTA, PROP., M/S CHAMP ENTERPRISES, E-8, LAJPAT NAGAR-III, NEW DELHI. PAN: ACSPG3886G VS. ITO, WARD-2(1), GHAZIABAD. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI V.N. JHA, ADVOCATE DEPTT. BY : SHRI RAJESH KETIA, SR.DR DATE OF HEARING : 01.10.2015 DATE OF PRONOUNCEMENT: 06.10.2015 ITA NO.4737 & 4953/DEL/2011 2 ORDER PER R.S. SYAL, AM : THESE TWO CROSS APPEALS ONE BY THE ASSESSEE AND T HE OTHER BY THE REVENUE ARISE OUT OF THE ORDER PASSED BY THE CIT(A) ON 8.8.2011 IN RELATION TO THE ASSESSMENT YEAR 2006-07. 2. FIRST GROUND OF THE REVENUES APPEAL IS AGAIN ST THE DELETION OF ADDITION OF RS.3,25,000/- MADE BY THE AO ON ACCOUNT OF DISCR EPANCIES IN THE CASH BOOK. 3. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT T HE AO, DURING THE COURSE OF ASSESSMENT PROCEEDINGS, OBSERVED THAT THE ASSESS EE HAD WITHDRAWN CASH OF RS.3 LAC VIDE CHEQUE NO. 57534 ON 26.5.2005 FROM UTI BANK, WHICH WAS RECORDED IN THE CASH BOOK ON 20.5.20005. HE FURTHE R OBSERVED THAT CASH EXPENSES WERE MADE OUT OF THIS CASH WITHDRAWAL FROM 20.5.2005 ONWARDS UP TO 30.6.2005. SIMILARLY, CASH OF RS.25,000/- WA S WITHDRAWN THROUGH CHEQUE NO. 57549 ON 29.9.2005 FROM THE SAME BANK WH ICH WAS RECORDED IN CASH BOOK ON 26.9.2005. ON BEING CALLED UPON TO EX PLAIN THE REASONS FOR PRE-RECORDING OF CASH IN THE CASH BOOK, THE ASSESSE E STATED THAT IT WAS WRONGLY RECORDED ON EARLIER DATES. UNCONVINCED WIT H THE ASSESSEES ITA NO.4737 & 4953/DEL/2011 3 SUBMISSIONS, THE AO MADE ADDITION OF RS.3,25,000/-. THE LD. CIT(A) DELETED THIS ADDITION. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIAL ON RECORD. THERE IS NO DENIAL OF THE FACT THAT THE ASSESSEE, IN FACT, WITHDREW CASH FROM HIS BANK ACCOUNT ON 26.5.2005 AND 29.9.20 05 WHICH WAS, IN FACT, RECORDED IN HIS CASH BOOK ON 20.5.2005 AND 26.9.200 5, RESPECTIVELY. RECORDING OF CASH ON AN EARLIER DATE AND, THEREAFTE R, MEETING EXPENSES FROM SUCH PRE-RECORDED CASH CAN GIVEN AN INFERENCE ABOUT THE NON-AVAILABILITY OF CASH AS PER BOOKS DURING THE PERIOD IT HAS BEEN REC ORDED IN THE BOOKS AND WHEN IT WAS ACTUALLY WITHDRAWN. THIS PRESUMPTION I S REBUTTABLE AND CAN BE SUCCESSFULLY DISCHARGED IF THE ASSESSEE DEMONSTRATE S THAT CASH BALANCE DURING THE INTERREGNUM WAS AT NO STAGE LESS THAN TH E AMOUNT SO WITHDRAWN FROM BANK ON A LATER DATE AND RECORDED IN CASH BOOK ON AN EARLIER DATE. A COPY OF THE DETAILS OF THE ASSESSEES CASH BOOK HAS BEEN PLACED ON RECORD. IT CAN BE OBSERVED THAT CASH BALANCE ON 20.5.2005 WAS AT RS.12.23 LAC. ON 26.5.2005 THE CLOSING CASH IN HAND IS RS.12.13 LAC. DURING THE ABOVE PERIOD I.E., 20.5.2005 TO 26.5.2005, THERE ARE CERT AIN DEPOSITS AND WITHDRAWALS AND THE CASH BALANCE HAS NEVER COME BEL OW RS.12 LAC ON ANY ITA NO.4737 & 4953/DEL/2011 4 OF THESE DATES. IT MEANS THAT THE AMOUNT OF CASH OF RS.3 LAC WITHDRAWN FROM BANK ON 26.5.2005 WAS INADVERTENTLY RECORDED IN THE CASH BOOK ON 20.5.2005 BECAUSE, OTHERWISE, THE CASH BALANCE DURI NG THE INTERREGNUM WOULD HAVE COME BELOW THE AMOUNT OF RS.3 LAC, WARRA NTING ADDITION. SIMILAR IS THE POSITION ABOUT THE REMAINING RS.25,0 00/- WHICH WAS WITHDRAWN ON 29.9.2005 AND RECORDED IN CASH BOOK ON 26.9.2005. WE HAVE PERUSED THE DETAILS OF CASH BOOK AND FOUND THAT THE CASH BALANCE ON 26.9.2005 WAS STANDING AT RS.11.65 LAC AND ON 29.9. 2005 AT RS.11.54 LAC. BETWEEN THESE TWO DATES, THE CASH BALANCE HAS REMAI NED ABOVE RS.11.50 LAC. IT MEANS THAT THE ASSESSEE DID NOT DELIBERATEL Y ENTER CASH OF RS.25,000/- ON 26.9.2005 AND SUCH WRONG RECORDING ON A PRE-DATE WAS AN INADVERTENT ERROR. WE, THEREFORE, CONCUR WITH THE VIEW TAKEN B Y THE LD. CIT(A). THIS GROUND FAILS. 5. THE ONLY OTHER GROUND IN THE REVENUES APPEAL AN D THE SOLE GROUND TAKEN IN THE ASSESSEES APPEAL IS AGAINST THE RELIE F AND SUSTENANCE OF ADDITION WHICH WAS MADE BY THE AO ON ACCOUNT OF UNS ECURED LOANS. ITA NO.4737 & 4953/DEL/2011 5 6. SUCCINCTLY, THERE WAS AN UNSECURED LOAN OF RS.10 ,29,500/- IN THE NAME OF M/S DURABLE BUILDERS PVT. LTD., OUTSTANDING IN T HE ASSESSEES BOOK OF ACCOUNT AT THE END OF THE YEAR. A LETTER U/S 133(6 ) WAS SENT TO THIS COMPANY, BUT, NO REPLY WAS RECEIVED ABOUT THE CONFIRMATION O F LOAN. ON BEING CALLED UPON TO EXPLAIN THE GENUINENESS OF THIS LOAN, THE A SSESSEE STATED THAT THIS AMOUNT WAS OUTSTANDING FOR THE LAST 8-9 YEARS AND O NLY A SUM OF RS.1 LAC WAS RECEIVED IN THE PREVIOUS YEAR RELEVANT TO THE A SSESSMENT YEAR UNDER CONSIDERATION. SINCE NO WORTHWHILE EVIDENCE WAS FI LED BY THE ASSESSEE IN SUPPORT OF THIS CREDIT, THE AO MADE AN ADDITION OF RS.9,25,500/-. THE LD. CIT(A) REDUCED THE ADDITION TO RS.1 LAC. BOTH THE SIDES ARE IN APPEAL AGAINST THEIR RESPECTIVE STANDS. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIAL ON RECORD. IT IS OBSERVED THAT THE AMOUNT IN QUESTI ON REPRESENTS UNSECURED LOAN RECEIVED BY THE ASSESSEE FROM M/S DURABLE BUIL DERS PVT. LTD. THIS AMOUNT WAS RECEIVED A FEW YEARS BACK AND ONLY A SUM OF RS.1 LAC WAS RECEIVED IN THE PREVIOUS YEAR RELEVANT TO THE ASSES SMENT YEAR UNDER CONSIDERATION. IT GOES WITHOUT SAYING THAT SECTION 68 APPLIES ONLY IN RESPECT OF FRESH LOANS RECEIVED DURING THE YEAR. WE, THERE FORE, UPHOLD THE VIEW ITA NO.4737 & 4953/DEL/2011 6 TAKEN BY THE LD. CIT(A) IN DELETING THE ADDITION OF RS.8,25,500/- REPRESENTING BROUGHT FORWARD BALANCE OF THIS PARTY. AS REGARDS THE FRESH LOAN OF RS.1 LAC RECEIVED BY THE ASSESSEE FROM THIS PARTY, WE FIND THAT THE LD. CIT(A) CALLED FOR A REMAND REPORT FROM THE AO, INTER ALIA , ON THIS POINT. IN SUCH A REMAND REPORT, WHICH HAS BEEN REPRODUCED AT PAGE 16 OF THE IMPUGNED ORDER, THE AO HAS RECORDED THAT THE ASSESS EE ORIGINALLY DID NOT GIVE CORRECT ADDRESS OF M/S DURABLE BUILDERS PVT. L TD., THOUGH HE STATED TO HAVE MAINTAINED GOOD RELATIONS WITH THIS COMPANY. IN COMPLIANCE WITH THE LD. CIT(A)S DIRECTION, THE AO FURTHER ISSUED SUMMO NS U/S 131 ON 18.2.2010 AT THE ADDRESS GIVEN IN THE COPY OF ACCOU NT. THE SUMMONS WERE ALSO RETURNED BACK BY THE POSTAL AUTHORITIES WITH T HE REMARK NO SUCH FIRM AT THIS NUMBER, RETURNED TO SENDER. THEREAFTER, AN INSPECTOR WAS DEPUTED TO PERSONALLY SERVE THE NOTICE AT THE GIVEN ADDRESS. VIDE HIS REPORT DATED 22.2.2010, THE INSPECTOR INTIMATED THAT ONE SHRI OM PRAKASH TAHIM WAS STAYING AT THE GIVEN ADDRESS, WHO CONFIRMED THAT NO COMPANY WITH THE NAME M/S DURABLE BUILDERS PVT. LTD., EXISTED AT THE GIVE N ADDRESS, WHICH WAS A RESIDENTIAL LOCALITY. IN OUR CONSIDERED OPINION, T HESE FACTS ARE SUFFICIENT ENOUGH TO PROVE THAT THE ASSESSEE COULD NOT DISCHAR GE THE BURDEN OF PROVING ITA NO.4737 & 4953/DEL/2011 7 THE GENUINENESS OF CASH CREDIT TO THE TUNE OF RS.1 LAC. WE, THEREFORE, UPHOLD THE VIEW TAKEN BY THE LD. CIT(A) ON THIS SCO RE. 8. IN THE RESULT, BOTH THE APPEALS STAND DISM ISSED. THE DECISION WAS PRONOUNCED IN THE OPEN COURT ON 0 6 TH OCTOBER, 2015. SD/- SD/- (SUCHITRA KAMBLE) (R.S. SYAL) JUDICIAL MEMBER ACCO UNTANT MEMBER DATED:06 TH OCTOBER, 2015. DK COPY FORWARDED TO 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR DY. REGISTRAR, ITAT, NEW DELHI