Ms. Sonia Gambhir, New Delhi V. ITO, New Delhi

ITA 5151/DEL/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 91363 (ITAT-DELHI)
• Duration Of Justice: 9 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-07-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC 2
• Next Hearing Date: 10-07-2015
• Assessment Year: 2003-2004
• Appeal Filed On: 18-09-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ROBIN RAWAL
• Keywords: Unexplained cash credit; Income from undisclosed sources; Opportunity of being heard; Additional evidence; Reasonable cause
• Section: 133(6); 131; 68

Judgement Text

1 IN THE INCOME TAX APPELATE TRIBUNAL DELHI BENCH SMC - 2 : NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER ITA NO. 5151 /DEL/201 4 A.Y. : 200 3 - 0 4 MS. SONIA GAMBHIR, VS. ITO, WARD - 23 ( 2 ), W - 115, GREATER KAILASH - II, NEW DELHI NEW DELHI ( PAN : AALPG1828M) (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. GAUTAM JAIN, ADV . DEPARTMENT BY : SH. ROBIN RAWAL, SR. DR DATE OF HEARING : 10 - 7 - 2015 DATE OF ORDER : 10 - 7 - 2015 O R D E R THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE O RDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) - XXV, NEW DELHI DATED 2 0 . 6 .201 4 PERTAINING TO ASSESSMENT YEAR 200 3 - 0 4 . 2. T HE GROUNDS OF APPEAL READ AS UNDER: - 1 . THAT THE LEARNED COMMISSIONE R OF INCOME TAX (APPEALS) XXV, NEW DELHI HAS ERRED BOTH IN LAW AND ON FACTS IN SUSTAINING AN ADDITION OF RS. 8,00,000 / - REPRESENTING THE LOAN RECEIVED FROM JATIN MANCHANDA AND, HELD TO BE UNEXPLAINED CASH CREDIT U/S 68 OF THE ACT. 2 1.1 THAT THE FINDING O F THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) THAT APPELLANT HAS NOT BEEN ABLE TO PROVE AND ESTABLISH BE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE LOAN RECEIVE FROM SHRI JATIN MANCHANDA IS FACTUALLY INCORRECT, CONTRARY TO EVIDENCE ON RECORD AN D HENCE UNTENABLE. 1.2 THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS PROCEEDED TO SUSTAIN THE ADDITION AS IRRELEVANT AND EXTRANEOUS CONSIDERATION AND AS SUCH THE ADVERSE CONCLUSION IS A VITIATED CONCLUSION UNSUSTAINABLE IN LAW. 1.3 THAT FUR THERMORE EVEN THE OBSERVATION THE APPELLANT HAD ONLY APPEARED TWICE IN A SPAN OF EIGHT YEARS IS AN IRRELEVANT CONSIDERATION AND ALSO FACTUALLY INCORRECT AND OVERLOOKS THE FACTS ON RECORD. 2 THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS FURTHE R ERRED BOTH IN LAW AND ON FACTS IN SUSTAINING A DISALLOWANCE OF A SUM OF RS. 57,214 / - BEING 1/8% OF THE EXPENSES CLAIMED BY THE APPELLANT ON ACCOUNT OF ALLEGED PERSONAL USE. IT IS THEREFORE, PRAYED THAT THE ADDITION/DISALLOWANCE SUSTAINED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) BE DELETED AND APPEAL OF THE APPELLANT MAY KINDLY BE ALLOWED. 3 3. THE FACTS NARRATED BY THE REVENUE AUTHORITIES ARE NOT DISPUTED BY BOTH THE PARTIES, THEREFORE, THE SAME ARE NOT REPEATED HERE FOR THE SAKE OF CONVENI ENCE. 4. LD. COUNSEL OF THE ASSESSEE REITERATED THE CONTENTIONS REITERATED IN THE GROUNDS OF APPEAL AND PRAYED THAT THE ADDITION / DISALLOWANCES MAY BE DELETED AND IN THE ALTERNATIVE THE MATTER MAY BE REMITTED BACK TO THE AO FOR FRESH CONSIDERATION T O SUBSTANTIATE THE CLAIM OF THE ASSESSEE. 5. ON THE OTHER HAND LD. DR RELIED UPON THE ORDERS OF THE REVENUE AUTHORITIES. HOWEVER, ON THE ALTERNATIVE PLEA OF THE LD. COUNSEL OF THE ASSESSEE FOR REMITTING BACK THE ISSUE IN DISPUTE TO THE FILE OF THE AO, H AS NOT RAISED ANY SERIOUS OBJECTION. 6 . I HAVE HEARD BOTH THE PARTIES AND PERUSED THE ORDERS PASSED BY THE REVENUE AUTHORITIES ALONGWITH RELEVANT RECORDS AVAILABLE WITH ME . I FIND THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS IT WAS NOTICED BY THE AO THAT DURING THE FINANCIAL YEAR UNDER CONSIDERATION, THE ASSESSEE TOOK FRESH UNSECURED LOAN OF RS. 8 LACS FROM SH. JATIN MANCHANDA, 19, EAST PARK AREA, AITNAL KHAN PARK, KARO L BAGH, NEW DELHI. THE AR OF THE ASSESSEE WAS ASKED BY THE AO TO PRODUCE CONFIRMATION OF THE SAME ALONGWITH THE COPY OF THE ITR AND BANK STATEMENT OF THE LENDER. HOWEVER, THE AR OF THE ASSESSEE EXPRESSED HIS INABILITY TO PRODUCE THE CONFIRMATION OF THE UNSECURED LOAN OF RS. 8 LACS TAKEN FROM SH. JATIN MANCHANDA. AO OBSERVED THAT IN VIEW OF THE INABILITY OF THE ASSESSEE TO PRODUCE THE CONFIRMATION OF THE UNSECURED LOAN OF RS. 8 LACS TAKEN FROM SH. JATIN MANCHANDA, A NOTICE U/S. 133(6) OF THE ACT WAS ISS UED ON 23.12.2005 TO MR. JATIN MANCHANDA, WHICH WAS REMAINED UN - COMPLIED WITH. ACCORDINGLY, NOTICE U/S. 131 OF THE ACT 4 ISSUED ON 7.2.2006 AND SERVED UPON SH. JATIN MANCHANDA REQUIRING HIM TO PRODUCE THE REQUISITE DOCUMENTS. HOWEVER, THE SUMMON WAS RETU RNED BY THE POSTAL DEPARTMENT WITH THE REMARKS ALWAYS LOCKED . IN VIEW OF ABOVE, A SHOW CAUSE NOTICE DATED 3.3.2006 WAS ISSUED TO THE ASSESSEE REQUIRING HIM TO PRODUCE SH. JATIN MANCHANDA ALONGWITH REQUISITE DOCUMENTS TO PROVE THE GENUINENESS OF THE LOAN TRANSACTION AND CREDITWORTHINESS OF THE DONOR. IT WAS INDICATED BY THE AO THAT ON DEFAULT , THE AMOUNT OF RS. 8 LACS WOULD BE ADDED TO THE INCOME DECLARED BY HER U/S. 68 OF THE ACT. THE ASSESSEE WAS ALSO REQUIRED TO SHOW CAUSE AS TO WHY THE CORRE SPONDING INTEREST CLAIMED TO HAVE BEEN PAID TO MR. JATIN MANCHANDA AND DEBITED TO THE P&L A/C ON THE ALLEGED LOAN SHOULD NOT BE DISALLOWED. HOWEVER, IN RESPONSE TO THE SAME, ASSESSEE FILED AN AFFIDAVIT STATING THEREIN THAT SHE HAD BORROWED A SUM OF RS. 8 LACS FROM MR. JATIN MANCHANDA BY CHEQUES. HENCE, IN VIEW OF THE ASSESSEE S INABILITY TO PROVE THE GENUINENESS OF THE TRANSACTION AND THE IDENTITY AND CREDITWORTHINESS OF THE ALLEGED LENDER THE AMOUNT OF RS. 8 LACS WAS ADDED TO THE INCOME OF THE ASSESSEE A S INCOME FROM UNDISCLOSED SOURCES U/S. 68 OF THE ACT. 6.1 IN APPEAL BEFORE THE LD. CIT(A), ASSESSEE SUBMITTED THE FOLLOWING CONTENTIONS: - (I) T HAT AO DID NOT PROVIDE OPPORTUNITY OF BEING HEARD AND WITHOUT CONSIDERING THE AFFIDAVIT DATED 20.3.2006 AS THE ASSESSMENT ORDER WAS PASSED ON THE SAME DAY WITHOUT CONSIDERING AND REBUTTING THE CONTENTS OF THE SAID AFFIDAVIT. (II) T HAT THAT SH. JATIN MANCHANDA (LENDER) IS A RELATIVE (NEPHEW) OF A SSESSEE S HUSBAND, MR. GARNBHIR, WHO WAS SETTLED IN CANADA IN THOSE 5 DAYS, AND BECAUSE OF THAT REASON HIS HOUSE WAS FOUND ALWAYS LOCKED AND SUMMON NOT ISSUED U/S 131 OF THE INCOME TAX ACT, 1961 . (III) T HAT THERE WAS SOME DISPUTE OF T HE A SSESSEE WITH THE AFORESAID CREDITOR, SH. JATIN MAN CHANDA. CONSEQUENTLY, HE DID NOT CO - OPERATE BY GIVING THE CONFIRMATORY LETTERS THOUGH HAD GIVEN THE LOAN OF RS.8,OO,OOO / - THROUGH ACCOUNT PAYEE CHEQUES DETAILED BELOW - DATE CHEQUE NO. BANK DETAILS BRANCH AMOUNT (RS.) 23.5.02 66973 DENA BANK MAYAPURI, DELHI RS. 5,00,000/ - 20.6.02 166962 DENA BANK MAYAPURI, DELHI RS.3 ,00,000/ - (IV) THAT THE BANKER ALSO SPECIFIED IN HIS REPORT THAT THE AFORESAID CHEQUES WERE RECEIVED FROM SH. JATIN MANCHA NDA ISSUED FROM DENA BANK, MAYAPURI BRANCH, NEW DELHI. THAT AS THE ASSESSEE WAS PREVENTED BY REASONABLE CAUSE BY NOT BEING PROVIDED SUFFICIENT OPPORTUNITIES TO FURNISH ALL THE DOCUMENTARY EVIDENCE, THIS EVIDENCE WAS ALSO REQUIRED TO BE ADMITTED IN THE LIGH T OF RULE 46A OF THE INCOME TAX RULES, 1962. (V) THAT THE A SSESSEE GAVE PROPER ADDRESS OF SH JATIN MANCHANDA AND FINANCIAL STATUS OF THE SAID PERSON TO THE A.O. SH. JATIN MANCHANDA'S FAMILY BUSINESS WAS CARRIED ON IN THE NAME AND STYLE OF PUNJAB STEEL WOR KS IN MAYAPURI, NEW DELHI. HE ALSO HAD A FLAT IN KAROL BAGH AND HE WAS SETTLED IN CANADA OWNING A PETROL PUMP IN VANCOVER. IN SUBSTANCE, THE IDENTITY OF THE CREDITOR WAS PROVED AS THE NOTICE ULS 133(6) WAS ALREADY SERVED BY THE A.O., THE CAPACITY TO FINANC E SUCH AMOUNT OF RS . 8,OO,OOO / - WAS PROVED IN THE LIGHT OF AFORESAID ASSETS. 6 (VI) THAT THE A SSESSEE DISCHARGED THE ONUS BY GIVING THE FULL ADDRESS & DETAIL OF LOAN GIVEN BY THE CREDITOR THROUGH ACCOUNT PAYEE CHEQUES WHICH WERE CREDITED TO THE A SSESSEE 'S ACCOUNT. (VII) THAT HE DISCLOSED THE IDENTITY OF THE LENDER AS WELL AS THE SOURCES OF HIS INCOME. THEN THE ONUS SHIFTED ON THE DEPARTMENT TO VERIFY. (VIII) THAT THE PAYMENT TO THE ASSESSEE WAS MADE THROUGH ACCOUNT PAYEE CHEQUES AND THE INTEREST WAS ALSO PAID BY THE ASSESSEE TO THE LENDER BY ACCOUNT PAYEE CHEQUES. 6 . 2 I FIND THAT DURING THE ASSESSMENT PROCEEDINGS ASSESSING OFFICER FOUND THAT THE ASSESSEE HAS TAKEN UNSECURED LOAN OF RS. 8 LACS FROM SH. JATIN MANCHANDA AND , THEREFORE, SHE WAS ASKED TO PRODUCE THE CONFIRMATION ALONGWITH THE COPY OF THE ITR AND B ANK S TATEMENT OF THE LENDER. THE ASSESSEE DID NOT PRODUCE THE SAME BEFORE THE A SSESSING OFFICER, IN SPITE OF THE VARIOUS OPPORTUNITIES GIVEN BY THE ASSESSING OFFICER TO THE A SSESSEE. THE ASSESSING OFFICER ALSO ASKED THE ASSESSEE TO PRODUCE THE LENDER, BUT ASSESSEE HAS FAILED TO PRODUCE HIM BEFORE THE ASSESSING OFFICER AND LASTLY THE ASSESSING OFFICER MADE THE ADDITION IN DISPUTE FROM UNDISCLOSED SOURCES. IN THE APPELLATE P ROCEEDINGS BEFORE THE LD. FIRST APPELLATE AUTHORITY , ASSESSEE FILED AN APPLICATION UNDER RULE 46 A OF THE INCOME TAX RULES, 1962 FOR ADMISSION OF ADDITIONAL EVIDENCE IN WHICH ASSESSEE HAS PRODUCED A COPY OF BANK STATEMENT DULY CERTIFIED BY THE BANKER THAT THE CHEQUES WERE RECEIVED FROM SH. JATIN MANCHANDA AND DEPOSITED IN THE BANK OF THE ASSESSEE. ASSESSEE STATED THAT SINCE THE ASSESSEE WAS REASONABLE CAUSE BY NOT PROVIDING SUFFICIENT OPPORTUNITY TO FURNISH ALL THE DOCUMENTARY EVIDENCE AND THE ASSESSEE HAS ALSO MENTIONED THE SAME BEFORE THE LD. CIT(A) AND REQUESTED FOR ADMISSION OF ADDITIONAL 7 EVIDENCE WHICH THE LD. CIT(A) HAS REPRODUCED IN THE IMPUGNED ORDER. ASSESSEE HAS SUBMITTED BEFORE THE LD. CIT(A) THAT WHILE FILING ALL NECESSARY DOCUMENTS BEFORE TH E LD. FIRST APPELLATE AUTHORITY, THE ASSESSEE HAS DISCHARGED HER ONUS BY GIVING FULL PARTICULA R S AND DETAILS OF LOAN GIVEN BY THE CREDITOR THROUGH THE ACCOUNT PAYEE CHEQUE WHICH ARE CREDITED TO THE ASSESSEE S ACCOUNT. MOREOVER, THE ASSESSEE HAS FILED THE AFFIDAVIT IN THIS REGARD CONFIRMING THE DETAILS, BUT THE ASSESSING OFFICER DID NOT TAKE COGNIZANCE OF THE AFFIDAVIT AND PASSED THE ASSESSMENT ORDER IN A HURRY MANNER WITHOUT CONSIDERING THE EVIDENCES FILED BY THE ASSESSEE. LD. CIT(A) IN PARA 4 AT PAGE NO S . 10 TO 13 OF HIS IMPUGNED ORDER HAS MENTIONED ABOUT THE ADDITIONAL EVIDENCE FILED BY THE ASSESSEE UNDER RULE 46A OF THE INCOME TAX RULES, 1962. 6 . 3 AFTER CONSIDERING THE OBSERVATIONS OF THE LD. FIRST APPELLATE AUTHORITY ON THE ADDITIONAL EVIDENCE AS W ELL AS FINDING ON THE LOAN OF RS. 8 LACS TAKEN BY THE ASSESSEE FROM SH. JATIN MANCHANDA, I AM OF THE CONSIDERED VIEW THAT EVIDENCES PRODUCED BY THE ASSESSEE HAS NOT BEEN PROPERLY APPRECIATED BY THE LD. FIRST APPELLATE AUTHORITY AND CHANGE OF CIRCUMSTANCES HAS ALSO NOT BEEN TAKEN NOTE BY HIM, WHILE DECIDING THE ISSUE IN DISPUTE AGAINST THE ASSESSEE. NO DOUBT THAT ASSESSEE HAS NOT AVAILED THE OPPORTUNITIES GIVEN BY THE REVENUE AUTHORITIES FOR SUBSTANTIATING HER CLAIM BEFORE THE REVENUE AUTHORITIES, BUT IN TH E INTEREST OF JUSTICE, WHEN THE CIRCUMSTANCES ARE CHANGED FOR PRODUCING THE ADDITIONAL EVIDENCE THAT SHOULD ALSO BE TAKEN INTO ACCOUNT BY ADMITTING THE ADDITIONAL EVIDENCE S PRODUCED BY THE 8 ASSESSEE WHICH HAS NOT BEEN LOOKED INTO BY THE LD. FIRST APPELLATE AUTHORITY. I FIND THAT THE PAPER BOOK FILED BY THE ASSESSEE CONTAINING PAGES 1 TO 47 IN WHICH S HE HAS FILED VARIOUS EVIDENCES WHICH SHE HAS FILED BEFORE THE ASSESSING OFFICER AS WELL AS BEFORE THE LD. CIT(A) , WHICH HAS NOT BEEN PROPERLY CONSIDERED BY THEM . A COPY OF AFFIDAVIT DATED 20.3.2006 FILED BY THE ASSESSEE ; COPY OF CONFIRMATION FROM SH. JATIN MANCHANDA AND COPY OF BANK STATEMENT OF M/S SNS INTERNATIONAL WHICH ARE AT PAPER BOOK PAGES 37 TO 40 ALONGWITH WRITTEN SUBMISSIONS FILED BY THE ASSESSEE BEFORE THE LD. CIT(A) INDICATING THAT AO HAS NOT CONSIDERED THE DOCUMENTARY EVIDENCE FILED BY THE ASSESSEE AND COMPLETED THE ASSESSMENT PROCEEDINGS ON THE SAME DATE I.E. 20.3.2006 WHICH ESTABLISHED THAT THE REVENUE AUTHORITY HAS NOT GIVEN PROPER OPPORTUNITY TO THE ASSESSEE FOR SUBSTANTIATING HER CLAIM BEFORE THEM. 7 . KEEPING IN VIEW OF THE FACTS AND CIRCUMSTANCES AS EXPLAINED ABOVE, AND THE EVIDENCES PRODUCED BY THE ASSESSEE BEFORE THE LD. CIT(A), I AM OF THE CONSIDERED VIEW THAT THE ISSUE IN DISPUTE REQUIRES R ECONSIDERATION AT THE LEVEL OF THE ASSESSING OFFICER. ACCORDINGLY, THE ISSUE IN DISPUTE IS REMITTED BACK TO THE FILE OF THE ASSESSING OFFICER WITH THE DIRECTION TO ISSUE IN DISPUTE AFRESH, UNDER THE LAW, AFTER GIVING FULL OPPORTUNITY TO THE ASSESSEE. HOW EVER, ASSESSEE IS ALSO DIRECTED TO 9 FULLY COOPERATE WITH THE ASSESSING OFFICER FOR SPEEDY COMPLETION OF ASSESSMENT PROCEEDINGS AND NOT TO TAKE UNNECESSARY ADJOURNMENT AND ALSO FILE ALL NECESSARY EVIDENCES FOR SUBSTANTIATING HER CLAIM BEFORE THE ASSESSING OF FICER. 8 . IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE STANDS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 10 /7/201 5 . S D / - [ H.S. SIDHU ] JUDICIAL MEMBER DATE: 10 /7/201 5 SRBHATNAGAR COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4.CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES 10