ACIT, New Delhi V. Sh. Charanbir Singh Sethi, Delhi

ITA 4820/DEL/2012

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 2799 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 9 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-07-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 11-05-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 10-09-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S KRISHNAN
• Keywords: Unexplained cash credit
• Section: 68

Judgement Text

1 I. T. APPEAL NO.4820/DEL/2012 ASSESSMENT YEAR : 2009-10. IN THE INCOME TAX APPELLATE TRIBUNAL [ DELHI BENCHES: B NEW DELHI ] BEFORE SHRI I. C. SUDHIR, JUDICIAL MEMBER AND SHRI L. P. SAHU, ACCOUNTANT MEMBER ITA. NO.4820/DEL/2012 ASSESSMENT YEAR : 2009-10. ASSTT. COMMISSIONER OF SHRI CHARANBIR SINGH SETHI, INCOME TAX, VS. C 91, PUSHPANJALI, CIRCLE : 35 (1), VIKAS MARG, NEW DELHI. D E L H I 110 092. PAN : AAXPS 3613 A (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI S. KRISHNAN, ADV.; DEPARTMENT BY : SHRI ANIL KUMAR SHARMA, SR. D. R.; DATE OF HEARING : 11.05.2017 DATE OF PRONOUNCEMENT : 07.07.2017 O R D E R . PER I. C. SUDHIR, J. M. : THE REVENUE HAS QUESTIONED FIRST APPELLATE ORDER ON THE FOLLOWING GROUNDS :- 1. THAT THE LD. CIT (APPEALS) HAD ERRED IN LAW AND ON FACTS BY OBSERVING THAT SECTION 68 IS NOT APPLICABLE ON THE INSTANT CASE; 2 I. T. APPEAL NO.4820/DEL/2012 ASSESSMENT YEAR : 2009-10. 2. THAT THE LD. CIT (APPEALS) HAS COMMITTED A GRAVE ERROR IN OBSERVING THAT THE CREDITWORTHINESS OF THE LOAN GIVER HAS BEEN ADEQUATELY ESTABLISHED BY THE ASSESSEE; 3. THAT THE LD. CIT (APPEALS) HAS ERRED IN NOT APPRECIATING THE REAL MOTIVE BEHIND THE LOAN GIVING TRANSACTION AND THAT BY TAKING TOO PEDANTIC A VIEW, THE ORDER PASSED BY THE LD. CIT (A) IS ERRONEOUS LEGALLY AND FACTUALLY; 4. THAT THE LD. CIT (APPEALS) HAS NOT TAKEN COGNIZANCE OF THE SURROUNDING FACT AND CIRCUMSTANCES GOVERNING THE LOAN TRANSACTION AND THAT BY FAILING TO DO SO, A SERIOUS INFIRMITY HAS CREPT INTO HIS ORDER WHICH CAN BE SET RIGHT BY THE HONBLE TRIBUNAL; 5. THAT THE LD. CIT (APPEALS) HAS ERRONEOUSLY HELD THAT THE TEST OF PRUDENCE AND TEST OF HUMAN PROBABILITIES CANNOT BE APPLIED ON THE FACTS OF THE INSTANT CASE; 6. THAT THE LD. CIT (APPEALS) HAD COMMITTED A GRAVE ERROR IN NOT PASSING A SPEAKING APPELLATE ORDER AND BY DOING SO, A SERIOUS ERROR HAS BEEN COMMITTED MAKING THE ORDER UNSUSTAINABLE. THE LD. ITAT IS THUS EMPOWERED TO MAKE GOOD THE INFIRMITY. 2. HEARD AND CONSIDERED THE ARGUMENTS ADVANCED BY THE PARTIES IN VIEW OF ORDERS OF THE AUTHORITIES BELOW, MATERIAL AVAILABLE ON RECORD AND THE DECISIONS RELIED UPON. 3. THE RELEVANT FACTS ARE THAT THE ASSESSEE IS CARRYING ON THE BUSINESS OF REAL ESTATE AGENT UNDER THE NAME AND STYLE, M/S. C. S. & ASSOCIATES. THE ASSESSEE HAD SHOWN GROSS TURNOVER OF RS.1,70,59,574/- 3 I. T. APPEAL NO.4820/DEL/2012 ASSESSMENT YEAR : 2009-10. DECLARING NET PROFIT OF RS.68,37,132/- THEREUPON GIVING NP RATE OF 40.08%. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTED THAT ASSESSEE HAS RAISED UNSECURED LOAN FROM ONE SHRI BALBIR SINGH SABHARWAL AMOUNTING TO RS.62,50,000/-. THE ASSESSING OFFICER WAS NOT SATISFIED WITH THE EXPLANATION OF THE ASSESSEE REGARDING IDENTITY AND CREDITWORTHINESS OF THE CREDITOR AS WELL AS GENUINENESS OF THE TRANSACTION. THE LD. CIT (APPEALS) HAS, HOWEVER, HELD THAT THE ASSESSEE HAS BEEN ABLE TO ESTABLISH ALL THE THREE INGREDIENTS OF SECTION 68 OF THE ACT I.E. IDENTITY AND CREDITWORTHINESS OF THE CREDITOR AS WELL AS GENUINENESS OF THE TRANSACTION. THE LD. CIT (APPEALS) HAS THUS DELETED THE ADDITION OF RS.62,50,000/- MADE BY THE ASSESSING OFFICER UNDER SECTION 68 OF THE ACT. 3.1 THE ISSUE INVOLVED IN THE PRESENT APPEAL IS AS TO WHETHER LD. CIT (APPEALS) WAS JUSTIFIED IN DELETING THE ADDITION OF RS.62,50,000/- MADE BY THE ASSESSING OFFICER UNDER SECTION 68 OF THE ACT ON ACCOUNT OF UNEXPLAINED CREDIT. 3.2 IN SUPPORT OF THE GROUNDS THE LD. SR. DR HAS BASICALLY PLACED RELIANCE ON THE ASSESSMENT ORDER, WHEREAS THE LD. AR HAS TRIED TO JUSTIFY THE FIRST APPELLATE ORDER ON THE ISSUE. HE SUBMITTED THAT EACH 4 I. T. APPEAL NO.4820/DEL/2012 ASSESSMENT YEAR : 2009-10. AND EVERY OBJECTION RAISED BY THE ASSESSING OFFICER HAS BEEN MET OUT BY THE LD. CIT (APPEALS) WHILE DISPOSING OF THE APPEAL. 3.3 HAVING GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW, WE FULLY CONCUR WITH THE VIEW OF THE LD. CIT (APPEALS) THAT IN VIEW OF CASH CREDIT IN THE ASSESSEES BOOKS OF ACCOUNT, THE PRIMARY ONUS LIES ON THE ASSESSEE TO ESTABLISH THE IDENTITY AND CREDITWORTHINESS OF THE CREDITOR TO ADVANCE THE LOAN AND GENUINENESS OF THE TRANSACTION. THEREAFTER THE ONUS SHIFTS TO THE REVENUE TO REBUT EVIDENCES FILED BY THE ASSESSEE TO ESTABLISH THE ABOVE THREE INGREDIENTS OF SECTION 68 OF THE ACT. IF AN ASSESSEE IS ABLE TO ESTABLISH ALL THE THREE ABOVE INGREDIENTS OF SECTION 68 OF THE ACT, THEN ADDITION MADE UNDER SECTION 68 OF THE ACT BY THE ASSESSING OFFICER CANNOT BE JUSTIFIED. WHEN WE EXAMINE FACTS OF THE PRESENT CASE, WE FIND THAT IDENTITY OF THE CREDITOR WAS NOT DOUBTED AND SINCE TRANSACTIONS WERE MADE THROUGH BANKING CHANNELS BETWEEN THE CREDITORS AND ASSESSEE THROUGH ACCOUNT PAYEE CHEQUES, GENUINENESS OF TRANSACTION WAS ALSO ESTABLISHED. SO FAR CREDITWORTHINESS OF THE ASSESSEE IS CONCERNED, THERE IS NO REBUTTAL OF FACTS NOTED BY THE LD. CIT (APPEALS) THAT SOURCE OF THE LOAN ADVANCED TO THE ASSESSEE ON 3.09.2008 AMOUNTING TO RS.42,50,000/- WAS THE OVER 5 I. T. APPEAL NO.4820/DEL/2012 ASSESSMENT YEAR : 2009-10. DRAFT LIMIT SANCTIONED TO THE CREDITOR. OUT OF THIS LOAN, THE ASSESSEE HAD REPAID AN AMOUNT OF RS.30,00,000/- TO THE CREDITOR ON 18.10.2008, THE SOURCE OF ADVANCE OF RS.20,00,000/- TO THE ASSESSEE ON 10.01.2009 WAS EXPLAINED. THE ASSESSEE HAD ALSO FURNISHED COPY OF THE INCOME TAX RETURN OF THE CREDITOR. WE THUS FULLY AGREE WITH THE LD. CIT (APPEALS) THAT PRIMARY ONUS TO ESTABLISH THE CLAIMED CREDIT WAS DISCHARGED BY THE ASSESSEE, WHICH HAS NOT BEEN DISLODGED BY THE ASSESSING OFFICER TO DISCHARGE ITS ONUS TO JUSTIFY THE ADDITION IN QUESTION. THE LD. CIT (APPEALS) THUS HAS RIGHTLY DELETED THE ADDITION. THE SAME IS UPHELD. THE GROUNDS ON THE ISSUE ARE THUS REJECTED. 4. IN RESULT, APPEAL IS DISMISSED. 5. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON : 07 TH JULY, 2017 . SD/- SD/- ( L. P. SAHU ) ( I. C. SUDHIR ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : THE 07 TH JULY, 2017 . *MEHTA* 6 I. T. APPEAL NO.4820/DEL/2012 ASSESSMENT YEAR : 2009-10. COPY OF THE ORDER FORWARDED TO:- 1. APPELLANT; 2. RESPONDENT; 3. CIT; 4. CIT (APPEALS); 5. DR, ITAT, ND. BY ORDER ASSISTANT REGISTRAR 7 I. T. APPEAL NO.4820/DEL/2012 ASSESSMENT YEAR : 2009-10. DATE DRAFT DICTATED ON 07.07.2017 DRAFT PLACED BEFORE AUTHOR 07.07.2017 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. APPROVED DRAFT COMES TO THE SR.PS/PS KEPT FOR PRONOUNCEMENT ON FILE SENT TO THE BENCH CLERK DATE ON WHICH FILE GOES TO THE AR DATE ON WHICH FILE GOES TO THE HEAD CLERK. DATE OF DISPATCH OF ORDER. 8 I. T. APPEAL NO.4820/DEL/2012 ASSESSMENT YEAR : 2009-10.