Sant Ram Badhsi Wal, Muktsar V. DCIT, Central Circle -3, Ludhiana

ITA 558/CHANDI/2022

AI Insights

The case involves two appeals by the assessee, Sant Ram Badhsi Wal, against the orders of the Commissioner of Income Tax (Appeals)-5, Ludhiana, for the assessment years 2018-19 and 2019-20. The primary issue in both appeals was the addition of amounts claimed as unexplained unsecured loans received from the assessee's son, Shri Vijay Kumar. The Tribunal found that the amounts in question were actually payments made by Shri Vijay Kumar towards the assessee's electricity bills, and not loans. The Tribunal accepted the assessee's argument that the transactions were genuine and that there was sufficient evidence to prove the identity and creditworthiness of Shri Vijay Kumar.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 127548 (ITAT-CHANDIGARH)
• Duration Of Justice: 10 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-05-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Next Hearing Date: 28-05-2023
• Assessment Year: 2019-2020
• Appeal Filed On: 18-07-2022
• Result in Favour of: Assessee
• Court: TRIBUNAL

Judgement Text

आयकर अपील य अ धकरण,च डीगढ़ यायपीठ “एकल” च डीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH “SMC” CHANDIGARH ी संजय गग , या यक सद य BEFORE: SH. SANJAY GARG, JUDICIAL MEMBER आयकर अपील सं./ ITA Nos.557 & 558/CHD/2022 नधा रण वष / Assessment Year : 2018-19 & 2019-20 Sant Ram Badhsi Wal, M/s Vijay Trading Co., Abohar Road Byepass, Muktsar (Punjab). बनाम The DCIT, Central Circle-3, Ludhiana. थायी लेखा सं./PAN NO: AFRPR1036F अपीलाथ /Appellant यथ /Respondent नधा रती क! ओर से/Assessee by : Shri I.P. Bansal & Shri Vivek Bansal, Advocates राज व क! ओर से/ Revenue by : Shri Akashdeep, JCIT, Sr.DR स ु नवाई क! तार&ख/Date of Hearing : 29.05.2023 उदघोषणा क! तार&ख/Date of Pronouncement : 31.05.2023 आदेश/ORDER The captioned appeals have been preferred by the assessee against the separate order dated 24.05.2022 of the Commissioner of Income Tax (Appeals)-5, Ludhiana [in short ‘CIT(A)’] pertaining to 2018-19 and 2019-20 assessment year. 2. Since the facts, issues involved in both the appeals are identical, hence these were heard together and are being taken up together for disposal by this common order. Assessee's appeal in ITA No.557/CHD/2022 for assessment year 2018-19) is taken up as lead case for the purposes of narration of facts. ITA-557&558/CHD/2022 A.Y. 2018-19 & 2019-20 Page 2 of 4 ITA 557/CHD/2022 (A.Y. 2018-19) 3. The sole issue involved in this appeal is relating to addition made/confirmed by the lower authorities of Rs.3,02,123/- on account of alleged unexplained unsecured loans having been received by the assessee from his son Shri Vijay Kumar. At the outset, the ld. Counsel for the assessee has submitted that the aforesaid amount of Rs.3,02,123/- was paid by Shri Vijay Kumar, son of the assessee towards electricity bills outstanding against the assessee. That the said amount was paid to the Electricity Board through cheque from the bank account of Shri Vijay Kumar. Since the said amount was paid on behalf of the assessee, therefore, the assessee had booked the said amount as unsecured loan from his son. 4. The ld. DR, however, has pointed out that before issuing the cheque to the Electricity Board, certain cash amount was deposited in the account of Shri Vijay Kumar which as per the lower authorities might have been given by the assessee to his son in cash out of his unaccounted income. The ld. Counsel for the assessee, however, invited our attention to the Paper Book furnished by the assessee Shri Vijay Kumar to submit that Shri Vijay Kumar, son of the assessee was having sufficient cash balance as per his Cash Book. He was an income tax assessee and there was no doubt about his identity and credit worthiness. Even ITA-557&558/CHD/2022 A.Y. 2018-19 & 2019-20 Page 3 of 4 amount was paid to the Electricity Board on account of electricity bill payment, therefore, there was no doubt about the genuineness of the transaction. He has submitted that merely because that for payment of bills to the Electricity Board by cheque, Shri Vijay Kumar has deposited certain cash out of his cash in hand, that itself, can not, in any way lead to presumption that the assessee has given any cash to his son out of any alleged unaccounted income. 5. After having heard the ld. Representatives of the parties, I am convinced with the submissions made by the ld. Counsel for the assessee. In this case, there is no dispute about the identity of the creditor and even genuineness of the transaction. The only doubt raised by the AO was that before making the payment to the Electricity Board through cheque, certain cash was deposited by the son of the assessee in his bank account. However, it has been proved on record that Shri Vijay Kumar was having sufficient cash in hand. He was an income tax assessee. Even, for payment to the Electricity Board, some times there is requirement that cash payment is not accepted, hence, the same is required to be deposited through cheque. Hence, under the circumstances, I do not find justification on the part of the lower authorities in assuming that the assessee has passed on any cash amount to his son out of his undisclosed income. In view of this, the impugned ITA-557&558/CHD/2022 A.Y. 2018-19 & 2019-20 Page 4 of 4 addition is not sustainable as per law and the same is, accordingly, ordered to be deleted. ITA 558/CHD/2022 (A.Y. 2019-20) 6. In this appeal, the Revenue has agitated the addition of Rs. 4,17,207/- on account of unexplained unsecured loans from Shri Vijay Kumar. Since the facts and issues are exactly identical, hence, my findings given above will apply mutatis-mutandis to this appeal also. In view of this, the impugned additions are ordered to be deleted and this appeal of the assessee is also allowed. 7. In the result, both the appeals are allowed. Order pronounced on 31 st May, 2023. Sd/- ( संजय गग ) (SANJAY GARG ) या यक सद य/ Judicial Member “Poonam” आदेश क! त,ल-प अ.े-षत/ Copy of the order forwarded to : 1. अपीलाथ / The Appellant 2. यथ / The Respondent 3.आयकर आय ु /त/ CIT 4. -वभागीय त न2ध, आयकर अपील&य आ2धकरण , च4डीगढ़/ DR, ITAT, CHANDIGARH 5. गाड फाईल/ Guard File आदेशानुसार/ By order, सहायक पंजीकार/ Assistant Registrar