ITO, Mathura V. M/s Mittal Publishing House, Mathura

ITA 60/AGR/2009

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 0477 (ITAT-AGRA)
• Duration Of Justice: 1 year(s) 6 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-08-2010
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 21-07-2010
• Assessment Year: 2005-2006
• Appeal Filed On: 26-02-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: P N AGARWAL
• Keywords: Question of law
• Section: 131; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AGRA BENCH, AGRA BEFORE SHRI R.K. GUPTA, JUDICIAL MEMBER AND SHRI P.K. BANSAL, ACCOUNTANT MEMBER ITA NO.60/AGR/2009 ASST. YEAR: 2005-06 THE INCOME-TAX OFFICER 3(2), VS. M/S MITTAL PUB LISHING HOUSE, MATHURA. D-26, INDUSTRIAL AREA, SITE-A, MATHURA. (PAN : AABFM 6071 C). (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI OM PRAKASH, JR. D.R. RESPONDENT BY : SHRI P.N. AGARWAL, ADVOCATE ORDER PER P.K. BANSAL, A.M.: THIS APPEAL HAS BEEN FILED BY THE REVENUE AGAINST T HE ORDER OF THE CIT(A) DATED 23.12.2008 AGAINST THE DELETION OF THE ADDITION OF RS.6,28,000/- MADE BY THE A.O. UNDER SECTION 68 OF THE INCOME-TAX ACT, 1961 (THE ACT HEREINAFT ER) AS WELL AS THE DISALLOWANCE OF THE INTEREST CONSEQUENTIALLY ON THESE AMOUNTS WHICH WAS ALSO DEL ETED BY THE CIT(A). 2. THE BRIEF FACTS OF THE CASE ARE THAT THE A.O. NO TED THAT THE ASSESSEE HAS TAKEN THE FOLLOWING LOAN DURING THE YEAR:- SMT. ALKA AGRAWAL RS.1,00,000/- SHRI PEEYUSH GUPTA RS. 75,000/- SMT. RADHA AGRAWAL RS. 68,000/- SMT. SARITA MITTAL RS.2,90,000/- SMT. MOHINI DEVI AGRAWAL RS. 95,000/-. 2 3. HE ACCORDINGLY ASKED THE ASSESSEE TO PROVE THE I DENTITY, CREDITWORTHINESS OF THE LOAN CREDITORS AND GENUINENESS OF THE TRANSACTION. IN R ESPONSE THERETO, THE ASSESSEE HAS SUBMITTED PAN OF EACH OF THE CREDITORS AND STATED THAT THE LO AN HAS BEEN GIVEN THROUGH ACCOUNT PAYEE CHEQUES. COPIES OF BANK STATEMENTS OF THE LOAN CRE DITORS HAD BEEN FILED BEFORE THE A.O. THE A.O. NOTED THAT IN SOME OF THE CASES THE CREDITORS DEPOSITED CASH IN THEIR BANK ACCOUNT BEFORE GIVING CHEQUE TO THE ASSESSEE. TO EXPLAIN THE SOUR CE OF THE CASH DEPOSIT, THEY SUBMITTED THE CASH FLOW STATEMENT EXPLAINING THE SOURCE OF CASH DEPOSI TED BY THEM IN THEIR RESPECTIVE BANK ACCOUNTS. THE A.O. WAS NOT SATISFIED WITH THE EXPL ANATION OF THE ASSESSEE AND ACCORDINGLY IN EACH CASE HE MADE THE ADDITION UNDER SECTION 68 OF THE ACT BY HOLDING THAT MERE FURNISHING OF THE CONFIRMATORY LETTER IS NOT ENOUGH AND CONCLUSIVE. MERE FURNISHING OF PARTICULARS IS NOT ENOUGH. PAYMENT BY ACCOUNT PAYEE CHEQUE IS NOT SACROSANCT N OR CAN IT MAKE THE TRANSACTION AS GENUINE. CONSEQUENTLY, THE INTEREST PAID TO SMT. RADHA AGRAW AL, SMT. SARITA MITTAL AND SMT. MOHINI AGRAWAL ON THE AFORESAID LOAN AMOUNTING TO RS.34,38 7/- WAS ALSO DISALLOWED. 4. THE ASSESSEE WENT IN APPEAL BEFORE THE CIT(A). BEFORE THE CIT(A) THE ASSESSEE SUBMITTED SOME DOCUMENTS CONSISTING OF THE CONFIRMA TION OF THE LOAN CREDITORS, THEIR BANK STATEMENT, COPY OF THE RETURN, CASH FLOW STATEMENT TO PROVE THAT THERE WAS SUFFICIENT CASH BALANCE PRIOR TO THE DEPOSIT OF THE AMOUNT IN CASH BY THE C REDITORS IN THEIR BANK ACCOUNT, THEIR PAN WERE ALSO FILED. IN CASE OF SMT. ALKA AGRAWAL, CASH FLO W STATEMENT FOR THE YEAR 2002-03 AND 2004-05 WAS FIELD WHICH WAS DULY LOOKED INTO AND VERIFIED B Y THE CIT(A) AND AFTER APPRECIATING ALL THE EVIDENCES AND GETTING THE REMAND REPORT FROM THE A. O., THE CIT(A) DELETED THE ADDITION IN THE CASE OF SMT. ALKA AGRAWAL. IT WAS OBSERVED THAT EV EN THOUGH THE A.O. HAS OBJECTED TO THE OPENING CASH BALANCE OF RS.1,13,500/- BUT HE HAS NO T REFUTED THE CASH FLOW STATEMENTS OF THE 3 EARLIER TWO YEARS, LEADING TO THE OPENING CASH BALA NCE OF RS.1,13,500/- FOR THE YEAR UNDER CONSIDERATION, WITH ANY EVIDENCE TO THE CONTRARY. SIMILARLY, IN THE CASE OF SHRI PEEYUSH GUPTA, THE CIT(A) DELETED THE ADDITION BY OBSERVING THAT T HE A.O. ALTHOUGH OBJECTED TO THE OPENING BALANCE OF RS.77,000/- BUT HE HAS NOT REFUTED WITH ANY EVIDENCE TO THE CONTRARY THE CASH FLOW STATEMENTS OF THE EARLIER TWO YEARS, LEADING TO THE OPENING CASH BALANCE OF RS.77,000/-. IN THE CASE OF SMT RADHA AGRAWAL, THE CIT(A) AFTER APPRECI ATING THE EVIDENCES AND CASH FLOW STATEMENTS OF THE EARLIER TWO YEARS AGAIN MADE THE SIMILAR OBSERVATION THAT THE A.O. EVEN THOUGH OBJECTED TO THE OPENING BALANCE OF RS.62,940/- BUT HAS NOT REFUTED THE CASH FLOW STATEMENTS OF THE EARLIER TWO YEARS, LEADING TO THE OPENING CASH BALA NCE OF RS.62,940/-. SIMILARLY IN THE CASE OF SMT. SARITA MITTAL ALSO, ON THE BASIS OF THE CASH F LOW STATEMENTS FILED FOR A.YS. 2003-04 TO 2004- 05 ALONG WITH CONFIRMATION, PAN ETC., THE CIT(A) DE LETED THE ADDITION BY OBSERVING AS UNDER :- I HAVE CONSIDERED THE RIVAL CONTENTIONS AND FIND T HAT THE CREDITOR SMT SARITA MITTAL IS ASSESSED TO TAX IN WARD-3(4), MATH URA. THE CASH FLOW STATEMENT OF THE CREDITOR FURNISHED BY THE APPELLANT VIDE SUB MISSIONS DATED 04.07.2008 COVERS THE PERIOD A.Y. 2003-04 TO 2005-06. THESE S TATEMENTS WERE FORWARDED TO THE A.O. FOR HIS COMMENTS VIDE THIS OFFICE LETTER D ATED 14.07.2008 TO WHICH HE HAS GIVEN HIS COMMENTS VIDE LETTER DATED 22.07.2008 REF ERRED TO HEREINABOVE. HOWEVER, HE HAS NOT REFUTED THE CASH FLOW STATEMENT S OF THEIR EARLIER TWO YEARS LEADING TO THE OPENING CASH BALANCE OF RS.2,09,600/ - FOR THE YEAR UNDER CONSIDERATION WITH ANY EVIDENCE TO THE CONTRARY. H ENCE, THE FINDING THAT THE LOAN OF RS.2,90,000/- REPRESENTS THE APPELLANTS MONEY R OUTED THROUGH ACCOUNT OF THE LENDER SMT. SARITA MITTAL IS NOT SUBSTANTIATED. CO NSEQUENTLY, THE ADDITION OF RS.2,90,000/- U/S. 68 OF THE ACT IS NOT SUSTAINABLE AND ACCORDINGLY, DELETED. 5. IN THE CASE OF SMT. MOHINI DEVI AGRAWAL, ALSO TH E ADDITION WAS DELETED BY THE CIT(A) BY OBSERVING S UNDER :_ I HAVE CONSIDERED THE RIVAL CONTENTIONS AND FIND T HAT THE CREDITOR SMT MOHINI DEVI AGRAWAL IS ASSESSED TO TAX IN WARD-3(2) , MATHURA. THE CASH FLOW STATEMENT FURNISHED BY THE APPELLANT COVERS PERIOD A.Y. 2003-04 TO 2005-06. 4 THESE STATEMENTS WERE FORWARDED TO THE A.O. FOR HIS COMMENTS VIDE THIS OFFICE LETTER DATED 14.07.2008 TO WHICH HE HAS GIVEN HIS C OMMENTS VIDE LETTER DATED 22.07.2008 REFERRED TO HEREINABOVE. HOWEVER, HE HA S NOT REFUTED THE CASH FLOW STATEMENTS OF THE EARLIER TWO YEARS LEADING TO THE OPENING CASH BALANCE OF RS.70,200/- FOR THE YEAR UNDER CONSIDERATION WITH A NY EVIDENCE TO THE CONTRARY. HENCE, THE FINDING THAT THE LOAN OF RS.55,000/- RE PRESENTS THE APPELLANTS MONEY ROUTED THROUGH ACCOUNT OF THE LENDER SMT. MOHINI AG RAWAL IS NOT SUBSTANTIATED. AS REGARDS THE CASH DEPOSIT OF RS.40,532/- ON 16.03 .2005 IN THE CREDITORS ACCOUNT, THE SAME HAS BEEN STATED TO BE PROCEEDS OF NSCS. THIS CLAIM OF THE CREDITOR HAS NOT BEEN REFUTED BY THE AO BY ANY EVID ENCE/MATERIAL TO THE CONTRARY. CONSEQUENTLY, THE ADDITION OF RS.95,000/- U/S. 68 O F THE ACT IS NOT SUSTAINABLE AND ACCORDINGLY, DELETED. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS. SECTION 68 OF THE ACT LAID DOWN THE RULE OF EVIDENCE. THE ONUS IS ON THE ASSESSEE TO PROVE THE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTION. THE ASSESSEE HAS TAKEN THE LOAN D URING THE YEAR FROM FOUR PARTIES AMOUNTING TO RS.6,28,000/-, THE DETAILS OF WHICH ARE GIVEN HEREI NABOVE. IN EACH OF THE CASE, THE ASSESSEE HAS SUBMITTED THE CONFIRMATION, BANK STATEMENT, PAN TO PROVE THE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTION. NOT ONLY THIS, THE ASSESSEE HAS ALSO SUBMITTED THE CASH FLOW STATEMENTS IN THE CASE OF EACH OF THE CREDITORS TO PROVE THE SOURCES OF THE FUND ADVANCED BY EACH OF THE PARTY TO THE ASSESSEE. THE CIT(A) HAS ALREA DY EXAMINED ALL THE EVIDENCES EVEN THOUGH ALL THE EVIDENCES WERE ALSO SUBMITTED BEFORE THE A.O. A LSO. THE CIT(A) EVEN HAS ASKED FOR THE COMMENTS FROM THE SUBMISSION MADE BY THE ASSESSEE F ROM THE A.O. THE A.O. HAS NOT DENIED THE IDENTITY AND GENUINENESS OF THE TRANSACTION BUT HAS SIMPLY DISBELIEVED THE OPENING BALANCE SHOWN IN THE CASH FLOW STATEMENTS IN EACH OF THE CA SE. EVEN NO EVIDENCE ETC. WERE BROUGHT ON RECORD WHICH MAY PROVE THAT THE ASSESSEES OWN MONE Y HAS BEEN ROUTED THROUGH THE ACCOUNT OF THE CREDITORS. NO DOUBT, UNDER SECTION 68 OF THE A CT THE ASSESSEE IS TO OFFER EXPLANATION IN RESPECT OF ANY SUM FOUND CREDITED IN THE BOOKS OF A CCOUNTS, ABOUT ITS NATURE AND SOURCE TO THE SATISFACTION OF THE A.O. THE EXPLANATION OF THE AS SESSEE MUST BE PLAUSIBLE ONE. ONCE THE 5 ASSESSEE HAS SUBMITTED THE CONFIRMATION, PAN AS WEL L AS THE EVIDENCES THAT THE MONEY HAS ACTUALLY BEEN ADVANCED BY THE OTHER PARTY, IT CANNO T BE SAID THAT THE ASSESSEE HAS NOT DISCHARGED HIS ONUS. IN THIS CASE, EVEN THE ASSESSEE HAS SUBM ITTED COPY OF THE BANK ACCOUNT OF THE PARTIES WHO HAS GIVEN MONEY TO THE ASSESSEE. EVEN THEIR CA SH FLOW STATEMENTS FOR THE EARLIER YEAR WERE ALSO SUBMITTED. THE A.O. MERELY REJECTED THE EXPLA NATION. THE A.O., WITHOUT MAKING ANY ENQUIRY OR BRINGING ANY EVIDENCE TO THE CONTRARY ON RECORD THAT THE LOAN ADVANCED BY THESE PARTIES WERE NOT GENUINE, CONSEQUENTLY DISALLOWED T HE INTEREST ALSO AMOUNTING TO RS.34,387/-. IN OUR OPINION, THE CASE OF THE ASSESSEE IS DULY COVER ED BY THE DECISION OF CIT VS. ORISSA CORPORATION P. LTD., 159 ITR 78 IN WHICH IT WAS HEL D AS UNDER :- HELD, THAT IN THIS CASE THE RESPONDENT HAD GIVEN T HE NAMES AND ADDRESSES OF THE ALLEGED CREDITORS. IT WAS IN THE KNOWLEDGE OF THE REVENUE THAT THE SAID CREDITORS WERE INCOME-TAX ASSESSEES. THEIR INDEX N UMBERS WERE IN THE FILE OF THE REVENUE. THE REVENUE, APART FROM ISSUING NOTICES U NDER SECTION 131 AT THE INSTANCE OF THE RESPONDENT, DID NOT PURSUE THE MATT ER FURTHER. THE REVENUE DID NOT EXAMINE THE SOURCE OF INCOME OF THE SAID ALLEGE D CREDITORS TO FIND OUT WHETHER THEY WERE CREDITWORTHY. THERE WAS NO EFFORT MADE T O PURSUE THE SO-CALLED ALLEGED CREDITORS. IN THOSE CIRCUMSTANCES, THE RESPONDENT COULD NOT DO ANYTHING FURTHER. IN THE PREMISES, IF THE TRIBUNAL CAME TO THE CONCLU SION THAT THE RESPONDENT HAD DISCHARGED THE BURDEN THAT LAY ON IT, THEN IT COULD NOT BE SAID THAT SUCH A CONCLUSION WAS UNREASONABLE OR PERVERSE OR BASED ON NO EVIDENCE. IF THE CONCLUSION WAS BASED ON SOME EVIDENCE ON WHICH A CO NCLUSION COULD BE ARRIVED AT, NO QUESTION OF LAW AS SUCH AROSE. THE HIGH COU RT WAS RIGHT IN REFUSING TO STATE A CASE. 7. EACH OF THE PARTY WHO ADVANCED LOAN WERE INCOME TAX ASSESSEES AND FILED THEIR INCOME TAX RETURNS REGULARLY. THEY WERE ALSO HAVING PAN. THEREFORE, IN OUR OPINION, ONCE THE ASSESSEE FURNISHED ALL THE INFORMATION, THE ONUS GETS SHIFTE D ON THE A.O. IN CASE HE WAS NOT SATISFIED WITH THE EXPLANATION OF THE ASSESSEE, HE SHOULD HAVE ISS UED SUMMONS TO EACH OF THE PARTIES AND VERIFIED ABOUT THE CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTION. THE A.O. HAS NOT 6 DISCHARGED HIS DUTIES BUT JUST WENT ON REJECTING TH E EXPLANATION OF THE ASSESSEE AND UNNECESSARILY APPLIED THE PROVISIONS OF SECTION 68 OF THE ACT. I N OUR OPINION, THIS IS NOT A FIT CASE TO MAKE ADDITION UNDER SECTION 68 OF THE ACT WHICH CAN BE S USTAINED. WE, ACCORDINGLY, CONFIRM THE ORDER OF THE CIT(A) DELETING THE ADDITION OF RS.6,28,000/ - AND CONSEQUENTLY DELETING THE DISALLOWANCE OF THE INTEREST AMOUNTING TO RS.34,387/-. 8. IN THE RESULT, APPEAL FILED BY THE REVENUE STAND S DISMISSED. (ORDER PRONOUNCED IN THE OPEN COURT ON 27.08.2010) SD/- SD/- (R.K. GUPTA) (P.K. BANSAL) JUDICIAL MEMBER ACCOUNTANT MEMBER PLACE: AGRA DATE: 27 TH AUGUST, 2010. PBN/* COPY OF THE ORDER FORWARDED TO: 1. APPELLANT 2. RESPONDENT BY ORDER 3. CIT CONCERNED 4. CIT (APPEALS) CONCERNED 5. DR, ITAT, AGRA BENCH, AGRA 6. GUARD FILE ASSIST ANT REGISTRAR INCOME-TAX APPELLATE TRIBUNAL, AGRA TRUE COPY