ACIT, New Delhi V. SPL Engineering Pvt. Ltd., New Delhi

ITA 5261/DEL/2012

• Counselvise Citation: 526120114 RSA 2012
• Duration Of Justice: 1 year(s) 2 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-01-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 30-12-2013
• Assessment Year: 2008-2009
• Appeal Filed On: 12-10-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RENUKA JAIN GUPTA
• Keywords: Unexplained cash credit; Additional evidence; Onus to prove
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL DELHI DELHI DELHI DELHI BENCH BENCH BENCH BENCH G GG G : NEW DELHI : NEW DELHI : NEW DELHI : NEW DELHI BEFORE SHRI G. BEFORE SHRI G. BEFORE SHRI G. BEFORE SHRI G.D.AGRAWAL, D.AGRAWAL, D.AGRAWAL, D.AGRAWAL, VICE PRESIDENT AND VICE PRESIDENT AND VICE PRESIDENT AND VICE PRESIDENT AND SHRI SHRI SHRI SHRI I.C. SUDHIR I.C. SUDHIR I.C. SUDHIR I.C. SUDHIR, ,, , JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER ITA NO ITA NO ITA NO ITA NO. .. .5261/DEL/2012 5261/DEL/2012 5261/DEL/2012 5261/DEL/2012 ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR : : : : 2008 2008 2008 2008- -- -09 0909 09 ASSISTANT COMMISSIONER OF ASSISTANT COMMISSIONER OF ASSISTANT COMMISSIONER OF ASSISTANT COMMISSIONER OF INCOME TAX, INCOME TAX, INCOME TAX, INCOME TAX, CIRCLE CIRCLE CIRCLE CIRCLE- -- -9(1), 9(1), 9(1), 9(1), ROOM NO. ROOM NO. ROOM NO. ROOM NO.163, C.R. BUILDING, 163, C.R. BUILDING, 163, C.R. BUILDING, 163, C.R. BUILDING, NEW DELHI. NEW DELHI. NEW DELHI. NEW DELHI. VS. VS. VS. VS. M/S SPL ENGINEERING PVT.LTD., M/S SPL ENGINEERING PVT.LTD., M/S SPL ENGINEERING PVT.LTD., M/S SPL ENGINEERING PVT.LTD., A AA A- -- -26, FIRST FLOOR, 26, FIRST FLOOR, 26, FIRST FLOOR, 26, FIRST FLOOR, KIRTI NAGAR, KIRTI NAGAR, KIRTI NAGAR, KIRTI NAGAR, NEW DELHI NEW DELHI NEW DELHI NEW DELHI 110 015. 110 015. 110 015. 110 015. PAN : PAN : PAN : PAN : AAECS8089E. AAECS8089E. AAECS8089E. AAECS8089E. (APPELLANT) (RESPONDENT) APPELLANT BY : SMT. RENUKA JAIN GUPTA, SR.DR. RESPONDENT BY : SHRI SANDEEP AHUJA, ADVOCATE. ORDER ORDER ORDER ORDER PER G. PER G. PER G. PER G.D.AGRAWAL, D.AGRAWAL, D.AGRAWAL, D.AGRAWAL, VP VPVP VP : : : : THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF LEARNED CIT(A)-XII, NEW DELHI DATED 10 TH JULY, 2012 FOR THE AY 2008-09. 2. THE ONLY GROUND RAISED BY THE REVENUE READS AS U NDER:- THE LD.CIT(A) ERRED IN LAW AND ON FACTS IN DELETIN G THE ADDITION ON ACCOUNT OF UNSECURED LOANS AS UNDISCLOS ED INCOME UNDER SECTION 68 OF THE ACT AMOUNTING TO RS.35,78,820/-. 3. AT THE TIME OF HEARING BEFORE US, IT IS SUBMITTE D BY THE LEARNED DR THAT THE ONUS IS UPON THE ASSESSEE TO PROVE THE CASH CREDIT STANDING IN ITS BOOKS OF ACCOUNT. TO DISCHARGE SUC H ONUS, THE ASSESSEE IS REQUIRED TO PROVE THE IDENTITY OF THE CREDITOR, CREDITWORTHINESS OF THE CREDITOR AND THE GENUINENESS OF THE TRANSACTION. S INCE THE ASSESSEE WAS UNABLE TO DISCHARGE THE ONUS WHICH LAY UPON IT, THE ASSESSING OFFICER RIGHTLY TREATED THE CREDIT OF ` 35,78,820/- AS UNEXPLAINED CREDIT IN ITS BOOKS OF ACCOUNT. THE LEARNED CIT(A) DELETE D THE SAME WITHOUT ITA-5261/DEL/2012 2 PROPERLY APPRECIATING THE FACTS OF THE CASE. SHE, THEREFORE, SUBMITTED THAT THE ORDER OF LEARNED CIT(A) SHOULD BE REVERSED AND THAT OF THE ASSESSING OFFICER SHOULD BE RESTORED. 4. THE LEARNED COUNSEL FOR THE ASSESSEE, ON THE OTH ER HAND, STATED THAT EVEN BEFORE THE ASSESSING OFFICER, THE ASSESSE E HAS PRODUCED THE CONFIRMATIONS OF ALL THE CREDITORS WHO ARE ASSESSED TO INCOME TAX. THEREFORE, THE ASSESSEE HAS DULY DISCHARGED THE ONU S EVEN BEFORE THE ASSESSING OFFICER. HOWEVER, BEFORE THE LEARNED CIT (A), THE ASSESSEE FURNISHED THE EXPLANATION WITH REGARD TO AVAILABILI TY OF FUNDS IN THE HANDS OF THE CREDITORS IN RESPECT OF EACH AND EVERY AMOUNT. THE ASSESSEE ALSO FURNISHED EVIDENCES IN RESPECT OF SUC H EXPLANATION. THAT THE LEARNED CIT(A) CALLED FOR TWO REMAND REPORTS FR OM THE ASSESSING OFFICER IN WHICH THE ASSESSING OFFICER DID NOT CONT ROVERT THE EXPLANATION/EVIDENCE FURNISHED BY THE ASSESSEE BEFO RE THE CIT(A). THEREFORE, HE RIGHTLY DELETED THE ADDITION. IN THI S REGARD, HE REFERRED TO HIS REPLY BEFORE THE LEARNED CIT(A) DATED 10 TH JULY, 2012. 5. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF BOTH THE SIDES AND PERUSED THE MATERIAL PLACED BEFORE US. FROM A PERUSAL OF THE ASSESSEES REPLY DATED 10 TH JULY, 2012, IT IS EVIDENT THAT THE ASSESSEE HAS GIVEN DETAILED EXPLANATION IN RESPECT OF THE AM OUNT RECEIVED FROM EACH CREDITOR ON EACH AND EVERY DATE. FURTHER SUPP ORTING EVIDENCES IN THIS REGARD WERE ALSO SUBMITTED. FROM THE ORDER OF LEARNED CIT(A), IT IS EVIDENT THAT THE CIT(A) CALLED THE REMAND REPORT TW ICE AND AFTER CONSIDERING THE SAME, HE DELETED THE ADDITION WITH THE FOLLOWING FINDING:- GROUND NO.1 TO 4 ARE TAKEN TOGETHER. I HAVE PERUSED THE FACTS STATED BY THE ASSESSEE IN HIS SUBMISSION AS WELL AS FACTS STATED IN THE REMAND RE PORT & ASSESSMENT ORDER. THE ASSESSING OFFICER HAS MADE A N ITA-5261/DEL/2012 3 ADDITION OF RS.35,78,820/- AS UNSECURED LOANS TO TH E ASSESSEE COMPANY ON ACCOUNT OF UNDISCLOSED INCOME U /S 68 OF THE INCOME TAX ACT 1961. THE ASSESSEE COMPAN Y HAS RECEIVED UNSECURED LOANS OF RS.35,78,820/- FROM THE FOLLOWING PERSONS:- I) SH. RAHUL KUMAR MERWAH RS.5,45,000/- II) SH. PUSHKAR KUMAR MERWAH RS.3,45,000/- III) MS. KAITKI KUMARI MERWAH RS.7,50,000/- IV) MRS. MANJU KUMARI MERWAH RS.19,38,820/- -------------------- RS.35,78,820/- -------------------- THE ASSESSEE IN HIS SUBMISSION HAS STATED THAT LOAN OF RS.5,45,000 WAS TAKEN FROM SH. RAHUL KR. MARWAH OUT OF THE SALE PROCEEDS OF COMMERCIAL PROPERTY. THE ASSE SSEE HAS GIVEN ALL THE EVIDENCE I.E. COPY OF LEDGER A/C IN THE BOOK OF SPL ENGG. PVT.LTD., BANK STATEMENT, COPY OF INCOME-TAX RETURN ETC. OF SH. RAHUL KUMAR MARWAH, V IDE LETTER DATED 8.7.11 TO SUPPORT OF HIS CLAIM. FURTH ER THE ASSESSEE HAS GRANTED AN UNSECURED LOAN OF RS.3,45,0 00/- FROM SH. PUSHKAR KUMAR MERWAH. THE ASSESSEE HAS GI VEN ALL THE EVIDENCE I.E. COPY OF LEDGER A/C IN THE BOO K OF SPL ENGG. PVT.LTD., BANK STATEMENT, COPY OF INCOME-TAX RETURN OF SH. PUSHKAR KUMAR MARWAH. THE ASSESSEE COMPANY HAS GRANTED ANOTHER UNSECURED LOAN OF RS.7,50,000/- FRO M MS. KAITAKI KUMARI MARWAH. THE DETAILS OF THE PAYMENT WITH THEIR SOURCES HAVE ALREADY BEEN EXPLAINED THAT SHE HAS RECEIVED CHEQUE ON MATURITY OF LIC AND INTEREST ACC RUED IN BANK. COPY OF LEDGER A/C IN THE BOOKS OF ACCOUNT O F SPL ENGG. PVT.LTD., COPY D.D. RECEIVED FROM LIC OF INDI A, BANK STATEMENT HAVE ALSO BEEN FILED. FURTHER THE ASSESS EE HAS GRANTED UNSECURED LOAN OF RS.19,38,820/- FROM MRS. MANJU KUMARI MERWAH. THIS AMOUNT OF RS.19,38,820/- INCLU DES RS.18,75,000 RECEIVED THROUGH ACCOUNT PAYEE CHEQUES DRAWN ON PUNJAB NATIONAL BANK (S/B A/C NO.132527) A ND RS.63,820 AS 2 MONTHS DIRECTORS REMUNERATION CREDIT ED TO HER ACCOUNT. ALL THE PAYMENTS ARE DULY REFLECTED I N THE BANK STATEMENTS. COPY OF LEDGER ACCOUNT OF MRS. MA NJU KUMAR MERWAH IN THE BOOKS OF SPL ENGG. PVT.LTD., CO PY OF BANK STATEMENT, COPY OF ITR FOR A.Y. 2008-09 OF MRS . MANJU KUMARI MERWAH HAVE ALSO BEEN FILED IN SUPPORT OF HI S CLAIM. THE ASSESSING OFFICER MS. RICHA GAHARWAR, DCIT, CIR .9(1) IN HER REMAND REPORT DT. 28.7.11. HAS NOT COMMENTED ON THE ADDITIONAL EVIDENCE FILED BY THE ASSESSEE WERE NOT SIGNED ITA-5261/DEL/2012 4 BY THESE PERSONS. THE CASE WAS SENT AGAIN FOR REMA ND REPORT VIDE MY OFFICE LETTER DATED 20.1.12 REPRODUC ED AT PAGE 11 OF THIS ORDER. IN THE SECOND REMAND REPORT DT. 26.6.12 THE ASSESSING OFFICER MRINAL KUMAR DAS, DCI T, CIRCLE-9(1), NEW DELHI HAS COPIED VERBATIM THE REMA ND REPORT OF HIS PREDECESSOR WITHOUT COMMENTING ON THE MERITS OF THE CASE. ON PERUSAL OF THESE EVIDENCES, IT IS FOUND THAT THE AGREEMENT WAS SIGNED BY THESE PERSON S BUT ONLY RECEIPT WAS NOT SIGNED. THESE EVIDENCE HAVE B EEN ADMITTED BY ME AND ON THE BASIS OF FACTS STATED BY THE ASSESSEE ON PAGE 3 TO 8 OF THIS ORDER AND THE FACTS RECORDED IN THE ASSESSMENT ORDER AND REMAND REPORT, I AM OF THE VIEW THAT THE ASSESSEE HAS PROVED THE CREDITWORTHINESS AND GENUINENESS OF LENDERS WHO GRA NTED UNSECURED LOAN OF RS.35,78,820/-, HENCE ADDITION MA DE BY THE ASSESSING OFFICER IS HEREBY DELETED. 6. AFTER CONSIDERING THE ARGUMENTS OF BOTH THE SIDE S AND THE FACTS OF THE CASE, WE DO NOT FIND ANY INFIRMITY IN THE AB OVE FINDING OF THE LEARNED CIT(A). THE CONTENTION OF THE LEARNED DR, THAT ONUS IS UPON THE ASSESSEE TO PROVE THE CASH CREDIT AND, TO DISCH ARGE SUCH ONUS, THE ASSESSEE IS REQUIRED TO PROVE THE IDENTITY AND CRED ITWORTHINESS OF THE CREDITOR AND THE GENUINENESS OF THE TRANSACTION, IS CORRECT. HOWEVER, IN THIS CASE, THE CIT(A) HAS FOUND THAT THE ASSESSE E HAS DULY DISCHARGED THE ONUS TO PROVE THE CASH CREDIT LYING IN ITS BOOKS OF ACCOUNT. APART FROM ALL THE CREDITORS BEING ASSESSE D TO TAX, THE ASSESSEE HAS EXPLAINED THE SOURCE OF EACH AND EVERY AMOUNT PAID BY THE CREDITOR. MOST OF THE AMOUNTS PAID BY THE CRED ITOR WERE AFTER RECEIVING THE SAME FROM KARUSH AUTO PVT.LTD. AND FR OM THE MATURITY OF LIC POLICY EXCEPT ONE AMOUNT WHICH IS RECEIVED OUT OF THE SALE CONSIDERATION OF THE COMMERCIAL PROPERTY SOLD BY RA HUL KUMAR MARWAH. THE ASSESSEE HAD ALSO PRODUCED THE EVIDENC ES OF THE AMOUNT RECEIVED BY THE CREDITOR FROM M/S KARUSH AUTO PVT.L TD. AND ALSO FROM MATURITY OF LIC POLICIES OF THE CREDITORS. ALL THO SE EVIDENCES WERE FORWARDED BY THE CIT(A) TO THE ASSESSING OFFICER AN D THE ASSESSING OFFICER DESPITE TWO REMAND REPORTS HAS NOT CONTROVE RTED ANY OF THE EVIDENCES FURNISHED BY THE ASSESSEE BEFORE THE CIT( A). THEREFORE, ITA-5261/DEL/2012 5 AFTER CONSIDERING ALL THOSE EVIDENCES, THE CIT(A) H AS ARRIVED AT THE CONCLUSION THAT THE ASSESSEE HAS PROVED THE IDENTIT Y AND CREDITWORTHINESS OF THE CREDITOR AS WELL AS THE GEN UINENESS OF THE TRANSACTION. IN VIEW OF THE ABOVE, WE DO NOT FIND ANY JUSTIFICATION TO INTERFERE WITH THE ORDER OF THE LEARNED CIT(A). TH E SAME IS SUSTAINED AND THE REVENUES APPEAL IS DISMISSED. 7. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. DECISION PRONOUNCED IN THE OPEN COURT ON 3 RD JANUARY, 2014. SD/- SD/- ( (( (I.C. SUDHIR I.C. SUDHIR I.C. SUDHIR I.C. SUDHIR) )) ) (G.D.AGRAWAL) (G.D.AGRAWAL) (G.D.AGRAWAL) (G.D.AGRAWAL) JUDICIAL JUDICIAL JUDICIAL JUDICIAL MEMBER MEMBER MEMBER MEMBER VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT DATED : 03.01.2014 VK. COPY FORWARDED TO: - 1. APPELLANT : ASSISTANT COMMISSIONER OF INCOME TAX, ASSISTANT COMMISSIONER OF INCOME TAX, ASSISTANT COMMISSIONER OF INCOME TAX, ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE CIRCLE CIRCLE CIRCLE- -- -9(1), ROOM NO.163, C.R. BUILDING, 9(1), ROOM NO.163, C.R. BUILDING, 9(1), ROOM NO.163, C.R. BUILDING, 9(1), ROOM NO.163, C.R. BUILDING, NEW DELHI. NEW DELHI. NEW DELHI. NEW DELHI. 2. RESPONDENT : M/S SPL ENGINEERING PVT.LTD., M/S SPL ENGINEERING PVT.LTD., M/S SPL ENGINEERING PVT.LTD., M/S SPL ENGINEERING PVT.LTD., A AA A- -- -26, FIRST FLOOR, KIRTI NAGAR, NEW DELHI 26, FIRST FLOOR, KIRTI NAGAR, NEW DELHI 26, FIRST FLOOR, KIRTI NAGAR, NEW DELHI 26, FIRST FLOOR, KIRTI NAGAR, NEW DELHI 110 015. 110 015. 110 015. 110 015. 3. CIT 4. CIT(A) 5. DR, ITAT ASSISTANT REGISTRAR