Appeal details
Counselvise Citation
620914 RSA 2014
Assessee PAN
Bench
Appeal Number
Duration Of Justice
1 year(s) 9 month(s) 2 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
05-10-2015
Appeal Filed By
Department
Order Result
Dismissed
Bench Allotted
DB
Next Hearing Date
01-10-2015
Assessment Year
2005-2006
Appeal Filed On
03-01-2014
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH ; AMRITSAR. BEFORE SH. A.D. JAIN, JUDICIAL MEMEBR AND SH. T.S. KAPOOR, ACCOUNTANT MEMBER I.T.A. NO.06(ASR)/2014 ASSESSMENT YEAR:2005-06 PAN :ABPPA1955L INCOME TAX OFFICER, VS. SHRI FAROOQ AHMAD DHAR ROAD, S/O SH. NIZAM DIN UDHAMPUR (J&K). C/O SH. NARAYAN DASS, KISHTWAR (J&K). ( APPELLANT) (RESPONDENT) C.O. NO.02(ASR)/2014 (ARISING OUT OF I.T.A. NO.06(ASR)/2014) ASSESSMENT YEAR:2005-06 SH. FAROOQ AHMAD VS. INCOME TAX OFFICER, S/O SH. NIZAM DIN UDHAMPUR. C/O SH. NARAYAN DASS, KISHTWAR. (APPELLANT) (RESPONDENT) DEPARTMENT BY:SH.TARSEM LAL, DR ASSESSEE BY: SH. TARUN BANSAL, ADVOCATE DATE OF HEARING : 01/10/2015 DATE OF PRONOUNCEMENT: 05/10/2015 ORDER PER A.D. JAIN, JM THIS IS DEPARTMENTS APPEAL FOR THE ASSESSMENT YEA R 2005-06 AGAINST THE ORDER DATED 10.10.2013 PASSED BY THE LD. CIT(A) , JAMMU. THE ASSESSEE HAS ALSO FILED CROSS OBJECTION. ITA NO.06(ASR)/2014 CO.NO.02(ASR)/2014 2 2. THE DEPARTMENTS APPEAL CHALLENGES THE ACTION OF THE LD. CIT(A) IN DELETING THE ADDITION OF RS.30 LACS MADE BY THE AO U/S 69 OF THE INCOME-TAX ACT, 1961 ( IN SHORT, THE ACT), AS UNEXPLAINED IN VESTMENT. THE C.O. FILED BY THE ASSESSEE SUPPORTS THIS ACTION. 3. THE ASSESSEE IS A PARTNER OF M/S. FAROOQ & CO., JAMMU. DURING THE YEAR UNDER CONSIDERATION, AN AMOUNT OF RS. 30 LACS WAS INTRODUCED BY THE ASSESSEE IN HIS CAPITAL ACCOUNT IN THE BOOKS OF THE FIRM. AS PER THE ASSESSEE, THE AMOUNT HAD BEEN RECEIVED FROM SH. MUSHTAQ AHMED GANAI OF TRAL, KASHMIR. THE ASSESSEE MAINTAINED THAT IN ORDER TO C ARRY OUT CERTAIN WORKS ALLOTTED, AN ADVANCE OF RS.30 LACS WAS GIVEN TO S H. MUSHTAQ AHMED GANAI, OUT OF WHICH, RS.14 LACS WERE GIVEN IN ASSESSMENT Y EAR 2004-05 AFTER WITHDRAWAL FROM THE PARTNERSHIP FIRM AND RS.16 LACS WERE GIVEN DURING THE YEAR UNDER CONSIDERATION AFTER WITHDRAWAL FROM HIS PROPRIETARY BUSINESS. HE SUBMITTED THAT SH. MUSHTAQ AHMED GANAI HAD REPAID T HE ENTIRE AMOUNT RS.30 LACS IN THE FORM OF DEMAND DRAFTS OF RS. 5 L ACS EACH, WHICH WAS DEPOSITED IN THE ACCOUNT OF THE PARTNERSHIP FIRM, A S CAPITAL CONTRIBUTION. 4. THE AO ISSUED DIRECTIONS DATED 31.12.2009 U/S 14 4A OF THE ACT AS FOLLOWS: ON GOING THROUGH THE RECORD IT IS NOTICED THAT THE ASSESSEE HAS WITHDRAWN AMOUNT OF RS.14 LACS IN CASH FROM M/S. F AROOQ & CO. AND 16 LACS IN CASH FROM HIS PROPRIETARY CONCERN IN FIN ANCIAL YEAR 2003- 04 AND 2004-05 RESPECTIVELY. FROM THE ABOVE DETAIL S, IT IS NOTED THAT THE ASSESSEE HAS WITHDRAWN THE AMOUNT OF RS.30 LAC IN CASH BUT HAS INTRODUCED THE CAPITAL OF RS.30 LACS IN DEMAND DRAF TS. ITA NO.06(ASR)/2014 CO.NO.02(ASR)/2014 3 5. HOWEVER, THE AO TREATED THE INVESTMENT IN CAPITA L AS UNEXPLAINED, OBSERVING THAT THE ASSESSEE HAD NOT COOPERATED IN T HE PROCEEDINGS BEFORE HIM AND THAT THERE WAS NO PROOF THAT THE SAME CASH WIT HDRAWN WAS THE SOURCE OF THE AMOUNT INVESTED IN THE CAPITAL. 6. BY VIRTUE OF THE IMPUGNED ORDER, THE LD. CIT(A) DELETED THE ADDITION MADE. 7. BEFORE US, THE LD. DR HAS CONTENDED THAT THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION CORRECTLY MADE BY THE AO, WRO NGLY ALLOWING THE RELIEF TO THE ASSESSEE, AS THE ASSESSEE HAD NOT BEEN ABLE TO PRODUCE ANY COGENT, SOLID AND CONCRETE EVIDENCE/PROOF TO ESTABLISH THE LINK BETWEEN THE AMOUNT WITHDRAWN IN CASH FROM THE PARTNERSHIP/PROPRIETARY CONCERN IN THE EARLIER PERIOD AT JAMMU AND RECEIPT OF AN EQUIVALENT AMOUNT IN THE SHAPE OF DEMAND DRAFTS FROM SRINAGAR, EITHER DURING THE ASS ESSMENT PROCEEDINGS, OR THE REASSESSMENT PROCEEDINGS, OR THE APPELLATE PROC EEDINGS. RELIANCE HAS BEEN PLACED ON GUMANI RAM SIRI RAM, 98 ITR 337 (P&H). 8. THE LD. COUNSEL FOR THE ASSESSEE, ON THE OTHER H AND, HAS PLACED STRONG RELIANCE ON THE IMPUGNED ORDER. 9. IN THIS REGARD, HAVING HEARD THE RIVAL CONTENTIO NS IN THE LIGHT OF MATERIAL AVAILABLE ON RECORD, IT IS SEEN THAT THE L D. CIT(A) REMANDED THE ISSUE TO THE AO AND IN THE REMAND PROCEEDINGS, THE STATEMENT OF SH. MUSHTAQ AHMED GANAI WAS RECORDED. THIS STATEMENT WA S REPRODUCED BY THE ITA NO.06(ASR)/2014 CO.NO.02(ASR)/2014 4 AO IN THE REMAND REPORT AND IN THE IMPUGNED ORDER B Y THE LD. CIT(A). IT READS AS FOLLOWS: MR. FAROOQ AHMAD, WAS KNOWN TO ME SINCE MY JOB IN FOREST DEPARTMENT. IN THE YEAR 2003-04, THE STATE GOVERNME NT CREATED SELF HELP GROUPS FOR ALLOTMENT OF CONTRACTS ESPECIALLY U NDER THE SCHEME- RURAL ELECTRIFICATION. I WAS MADE MATE BY ONE SELF HELP GROUPS BY THE NAME OF M/S. SHEHJAR CONSTRUCTIONS & ELECTRIFICATIO NS, CHANAPORA, WHO WERE SHORT OF FUNDS FOR CARRYING OUT SUCH ALLO TTED WORKS. I APPROACHED SH.FAROOQ AHMAD, CONTRACTOR TO BECOME MY BUSINESS PARTNER FOR CARRYING OUT THE WORK ALLOTTED TO AFORE SAID SELF HELP GROUP, WHO IN TURN MADE ME AS MATE/SUB CONTRACTOR. SH. FAROOQ AHMAD CONTRACTOR, ADVANCED AN AMOUNT OF RS.30,00,00 0/- IN CASH ON DIFFERENT DATES DURING THE PERIOD 2003-05, AS PER R EQUIREMENT FOR EXECUTION OF THE CONTRACT WORK. 10. THUS, AS PER THE STATEMENT OF SH. MUSHTAQ AHMED GANAI, IT WAS HE WHO APPROACHED THE ASSESSEE TO JOIN HIM AS A BUSINE SS PARTNER FOR CARRYING OUT CONTRACT WORK UNDER RURAL ELECTRIFICATION SCHEM E OF SELF HELP GROUP AND THE ASSESSEE ADVANCED AN AMOUNT OF RS.30 LACS I N CASH ON DIFFERENT DATES TO SH. MUSHTAQ AHMED GANAI, AS PER REQUIREMENT, FOR EXECUTION OF THE CONTRACT WORK. IT WAS THIS AMOUNT, WHICH AS PER THE ASSESSEE, WAS REPAID BY SH. MUSHTAQ AHMED GANAI TO THE ASSESSEE. 11. NOW, AS PER THE REMAND REPORT, THE AO ACCEPTED THE FACTUM OF WITHDRAWAL OF RS.30 LACS BY THE ASSESSEE FROM THE P ARTNERSHIP FIRM AND THE PROPRIETARY CONCERN. THE EXPLANATION OF THE ASSESSE E THAT IT WAS THIS VERY AMOUNT WHICH WAS REINVESTED BY WAY OF CAPITAL CONTR IBUTION WAS CHALLENGED BY THE AO, OBSERVING THAT IT DID NOT STAND PROVED T HAT IT WAS THE SAME ITA NO.06(ASR)/2014 CO.NO.02(ASR)/2014 5 AMOUNT OF RS.30 LACS WITHDRAWN BY THE ASSESSEE, WH ICH HAD BEEN INVESTED IN THE CAPITAL ACCOUNT THROUGH SH.MUSHTAQ AHMED GA NAI. THE RATIONALE OF THIS OBSERVATION OF THE AO HAS RIGHTLY NOT BEEN END ORSED BY THE LD. CIT(A). THE STATEMENT OF MR. GANAI IS CLEAR AND THE SAME HA S NOT BEEN CALLED INTO QUESTION BY THE AO. IN VIEW OF THE DEPOSITION MADE THEREIN, THE NEXUS CLEARLY STANDS ESTABLISHED. NO ONE CAN BE PUT TO PROVE A NEGATIVE. AS RIGHTLY OBSERVED BY THE LD. CIT(A), IF HE WAS NOT SATISFIED WITH THE EXPLANATION OF THE ASSESSEE AND THE STATEMENT OF MR. GANAI, IT WAS FOR THE AO TO PROVE THAT THE AMOUNT HAD NOT BEEN REINVESTED BY THE ASSESSEE AND THAT IT STOOD DISPOSED OF IN SOME OTHER MANNER. THIS WAS NOT DONE BY THE AO. THE OBJECTION OF THE LD. DR THAT THE ONUS OF THE ASSESS EE DID NOT STAND DISCHARGED AND IT WAS WRONGLY SHIFTED TO THE AO BY THE LD. CIT (A), DOES NOT HAVE ANY FORCE, IN VIEW OF THE ABOVE DISCUSSION. RELIANCE ON GUMANI RAM SIRI RAM (SUPRA), IS ALSO MISPLACED. THAT JUDGMENT STATES TH AT IT IS THE ASSESSEE WHO HAS TO PROVE THAT THE THIRD PARTY, WHO IS SAID TO H AVE GIVEN THE MONEY, WAS IN A POSITION TO LEND SUMS. IN THE PRESENT CASE, IN HI S STATEMENT RECORDED BY THE AO, SH. GANAI HAS CATEGORICALLY DEPOSED THE FACTU M OF RECEIPT AS WELL AS REPAYMENT OF THE AMOUNT IN QUESTION. THE SAME WAS A CCEPTED BY THE AO IN THE REMAND PROCEEDINGS AND MR. GANAI WAS NOT PUT T O ANY QUERY. THEREFORE, GUMANI RAM SIRI RAM (SUPRA) IS NOT APPLICABLE. ITA NO.06(ASR)/2014 CO.NO.02(ASR)/2014 6 12. IN VIEW OF THE ABOVE, FINDING NO MERIT THEREIN, THE GRIEVANCE RAISED BY THE DEPARTMENT IS REJECTED AND THE ORDER OF THE LD. CIT(A) IS CONFIRMED. 13. IN THE RESULT, APPEAL IS DISMISSED AND THE C.O. IS DISMISSED BEING SUPPORTIVE. ORDER PRONOUNCED IN THE OPEN COURT ON 5TH OCT OBER, 2015. SD/- SD/- (T.S. KAPOOR) (A.D. JAIN) ACCOUNTANT MEMBER JUDICIAL MEMBER /SKR/ DATED: 05/10/2015 COPY OF THE ORDER, FORWARDED TO: 1. THE ASSESSEE: MR. FAROOQ AHMED, KISHATWAR (J&K) 2. THE ITO UDHAMPUR 3. THE CIT(A), JAMMU. 4. THE CIT, JAMMU. 5. THE SR. DR ITAT, ASR. TRUE COPY BY ORDER (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL
