Dr. Devendra Lal Chandani, Kanpur V. Asstt. Commissioner Of Income Tax-5, Kanpur

ITA 647/LKW/2013

• Counselvise Citation: 64723714 RSA 2013
• Duration Of Justice: 1 year(s) 6 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-03-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 24-02-2015
• Assessment Year: 2001-2002
• Appeal Filed On: 26-08-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: Y P SRIVASTA VA
• Keywords: Unexplained cash credit; Principle of natural justice
• Section: 68; 263

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH B, LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER ITA NO.647/LKW/2013 ASSESSMENT YEAR:2001 - 02 A.C.I.T. - 5, KANPUR. VS DR. DEVENDRA LAL CHANDANI, 113/58, SWAROOP NAGAR, KANPUR. PAN:ABHPL6321R (RESPONDENT) (APPELLANT) SHRI S. K. GARG, ADVOCATE SHRI P. K. KAPOOR, C.A. APPELLANT BY SHRI Y. P. SRIVASTAVA, D. R. RESPONDENT BY 25/02/2015 DATE OF HEARING 17 /03/2015 DATE OF PRONOUNCEMENT O R D E R PER A. K. GARODIA, A.M. THIS IS ASSESSEES APPEAL DIRECTED AGAINST THE ORDER PASSED BY LEARNED CIT(A) - II, KANPUR DATED 24/05/2013 FOR THE ASSESSMENT YEAR 2001 - 2002. 2. IN THIS APPEAL, THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS: 1. BECAUSE THE AUTHORITIES BELOW HAVE ERRED IN LAW AND ON FACTS IN HOLDING/UPHOLDING THAT THE SUM OF RS.2,90,000/ - RECEIVED AS UNSECURED LOAN FROM ONE SRI RAJ KUMAR, REMAINED AS 'UNEXPLAINED CASH CREDIT' WITHIN THE MEANING OF SECTION 68 OF THE ACT AND IN TREATING THE SAME AS UNDISCLOSED INCOME OF THE 'APPELLANT'. 2. BECAUSE THE ONUS THAT LIED UPON THE 'APPELLANT', IN THE MATTER OF PROVING THE GENUINENESS OF THE UNSECURED LOAN, STOOD FULLY DISCHARGED, AS A) THE LOAN CREDITOR GOT FULLY IDENTIF IED AND HAD EVEN BEEN WAS PRODUCED ALSO BEFORE THE ASSESSING OFFICER DURING THE COURSE OF POST - SECTION 263 PROCEEDINGS; 2 B) IN THE STATEMENT ON OATH RECORDED BY THE ASSESSING OFFICER, THE LOAN CREDITOR HAD CATEGORICALLY STATED THAT HE HAD ADVANCED SUMS AG GREGATING RS.2,90,000/ - THROUGH BANK DRAFTS PURCHASED LOCALLY AS PER PARTICULARS GIVEN BELOW: - SI. NO. NAME OF THE BANK BANKER CHEQUE NO. DATE AMOUNT (RS.) 1. PUPILS CO - OPERATIVE BANK, ARYA NAGAR, KANPUR 006723 05.10.2000 49,000 2. - DO - 006724 - DO - 49,00 3. - DO - 006725 - DO - 48,000 4. - DO - 006726 - DO - 48,000 5. - DO - 006727 - DO - 48,000 6. - DO - 006728 - DO - 48,000 AS HE DID NOT HAVE ANY BANK ACCOUNT AT KANPUR; C) SOURCE OF SUCH LOAN AS ADVANCED BY SRI RAJ KUMAR WAS ALSO EXPLAINED, TO BE ATTRIBUTABLE TO HIS LARGE AGRICULTURAL LAND HOLDING AND IT WAS WHOLLY INCORRECT AT THE PART OF THE AUTHORITIES BELOW TO HOLD THAT SOURCE OF UNSECURED LOAN REMAINED UNEXPLAINED. 3. BECAUSE THE FACT THAT SUM IN QUESTION HAD BEEN REPAID ALSO, THROUGH AN 'A/C PAYEE CHEQUE' DATED 21.08.2003, CONSTITUTED A STRONG EVIDENCE IN SUPPORT OF GENUINENESS OF LOAN IN QUESTION AND ON A DUE CONSIDERATION, INTER - ALIA, OF THIS ASPECT OF THE MATTER, THE ADDITION OF RS.2,90,000/ - IN QUESTION WAS LIABLE TO BE DELETED. 4. BECAUSE THE ORDER APPEALED AGAINST IS CONTRARY TO THE FACTS, LAW AND PRINCIPLE OF NATURAL JUSTICE. 3. LEARNED A.R. OF THE ASSESSEE REITERATED THE SAME CONTENTIONS, WHICH WERE RAISED BEFORE CIT(A) AND ALSO BEFORE CIT IN COURSE OF PROCEEDINGS U/S 3 263 OF THE ACT. HE ALSO SUBMITTED THAT THE STATEMENT OF SHRI RAJ KUMAR, RECORDED ON 08/10/2003 DURING THE COURSE OF ORIGINAL ASSESSMENT PROCEEDINGS, IS AVAILABLE ON PAGES 5 TO 8 OF THE PAPER BOOK. HE DRAWN OUR ATTENTION TO QUESTION NO. 5 AND ITS ANSWER IN THE STATEMENT AS AVAILABLE ON PAGE NO. 5 OF THE PAPER B OOK WHERE IT IS SEEN THAT QUESTION WAS AS TO HOW MUCH LAND IS OWNED BY SHRI RAJ KUMAR, WHICH IS FIT FOR AGRICULTURE AND IN REPLY , IT WAS STATED BY SHRI RAJ KUMAR THAT HE IS HAVING 65 BIGHA OF IRRIGATED AGRICULTURAL LAND. IN REPLY TO QUESTION NO. 6 REGARDI NG ANNUAL INCOME FROM AGRICULTURE, IT WAS STATED THAT HE IS HAVING ANNUAL AGRICULTURAL INCOME OF ABOUT RS.1 LAC. REGARDING THE SOURCE OF MONEY ADVANCED BY HIM TO THE ASSESSEE OF RS.2.90 LAC, IT WAS STATED BY HIM THAT THIS MONEY WAS OUT OF SAVING OF LAST 3 - 4 YEARS AND HE BROUGHT THIS MONEY IN CASH FOR GIVING TO THE ASSESSEE BECAUSE OF HIS NEED BUT SINCE THE ASSESSEE EXPRESSED DIFFICULTY IN ACCEPTING CASH, HE PURCHASED BANK DRAFTS FROM LOCAL BANK AND TO FACILITATE HIM TO PURCHASE BANK DRAFT, THE ASSESSEE DEP UTED ONE PERSON TO HELP HIM IN THIS REGARD. HE SUBMITTED THAT FROM THESE FACTS, IT HAS TO BE ACCEPTED THAT IDENTITY AND CREDITWORTHINESS OF THE LOAN CREDITOR IS ESTABLISHED. REGARDING THE PERSON WHO ACCOMPANIED SHRI RAJ KUMAR FOR HELP HIM IN PURCHASING B ANK DRAFT, HE SUBMITTED THAT THE STATEMENT OF SHRI MANJEET SINGH , RECORDED BY PRESENT ASSESSING OFFICER ON 24/08/2006, IS AVAILABLE ON PAGES 35 TO 40 OF THE PAPER BOOK WHERE HE HAS STATED THAT HE HAS ACCOMPANIED SHRI RAJ KUMAR TO HELP HIM IN PURCHASING BAN K DRAFT. IT IS ALSO STATED BY HIM IN THE AFFIDAVIT THAT HE FILLED UP THE DRAFT FORM AND PUT THE NAME OF SHRI RAJ KUMAR AT SIGNATURE COLUMN OF BANK DRAFT FORM AND GOT ISSUED SIX BANK DRAFTS TOTALING RS.2.90 LAC SINCE BANK REFUSED TO ISSUE ONE BANK DRAFT OF RS.2.90 LAC AGAINST THE CASH PAYMENT. HE SUBMITTED THAT IN THE LIGHT OF THESE FACTS, THE ADDITION MADE BY THE ASSESSING OFFICER AND CONFIRMED BY CIT(A) IS NOT JUSTIFIED. 4. LEARNED D.R. OF THE REVENUE SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 4 5. W E HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FIND THAT THE ISSUE IN DISPUTE IS REGARDING ADDITION MADE BY THE ASSESSING OFFICER OF RS.2.90 LAC U/S 68 OF THE ACT IN RESPECT OF RECEIPT OF THIS MONEY BY THE ASSESSEE FROM SHRI RAJ KUMAR . HENCE, IT HAS TO BE S EEN AS TO WHETHER THE ASSESSEE HAS BEEN ABLE TO ESTABLISH THE IDENTITY AND CREDITWORTHINESS OF THE LOAN CREDITOR SHRI RAJ KUMAR AND GENUINENESS OF THE TRANSACTION. WE FIND THAT IN COURSE OF ORIGINAL ASSESSMENT PROCEEDINGS, SHRI RAJ KUMAR WAS PRODUCED BEFO RE THE ASSESSING OFFICER AND HIS STATEMENT WAS RECORDED BY THE ASSESSING OFFICER ON 08/10/2003 AND IN THIS STATEMENT, HE STATED THAT HE WAS HAVING 65 BIGH A S OF IRRIGATED AGRICULTURAL LAND AND FROM THIS LAND, HE WAS HAVING ABOUT RS.1 LAC ANNUAL INCOME AS AG RICULTURAL INCOME. IN OUR CONSIDERED OPINION, HAVING AN INCOME OF RS.1 LAC PER ANNUM FROM IRRIGATED LAND OF 65 BIGHA IS VERY MUCH REASONABLE BECAUSE IT IS LESS THAN RS.2,000/ - PER BIGHA PER ANUMN . MOREOVER, REGARDING THE SOURCE OF ADVANCE OF THIS MONEY TO ASSESSEE, IT WAS EXPLAINED THAT THIS AMOUNT WAS OUT OF SAVING OF LAST 3 - 4 YEARS. SINCE SHRI RAJ KUMAR IS HAVING MAINLY AGRICULTURAL INCOME, IT IS NOT VERY UNCOMMON THAT HE WAS HAVING THIS MONEY IN THE FORM OF CASH AND HE WANTED TO HELP THE ASSESSEE BY GI VING THIS MONEY IN CASH BUT BECAUSE OF THE PROVISIONS OF SECTION 269SS, THE ASSESSEE COULD NOT TAKE THE LOAN IN CASH AND THEREFORE, TO PURCHASE BANK DRAFT , HE DEPUTED ONE OF HIS PATIENT TO HELP SHRI RAJ KUMAR IN THIS REGARD. THE PERSON WHO HELPED SHRI RAJ KUMAR IN PURCHASING DRAFT WAS STATED TO BE SHRI MANJEET SINGH AND HIS STATEMENT WAS ALSO RECORDED BY PRESENT ASSESSING OFFICER. IN FACT , THE ASSESSEE WANTED TO PRODUCE SHRI MANJEET SINGH BEFORE THE CIT IN COURSE OF PROCEEDINGS U/S 263 BUT IT IS STATED BY CIT IN PARA 9 OF HIS ORDER PASSED U/S 263 THAT AT THIS STAGE , THE ASSESSEE OFFERED TO PRODUCE THIS PERSON BEFORE HIM BUT THIS PERSON HAD NOT BEEN PRODUCED BEFORE THE ASSESSING OFFICER NOR EXAMINED BY HIM AND HENCE, SUCH A FRESH EVIDENCE HAS TO BE EXAMINED BY THE ASSESSING OFFICER. THAT PERSON WAS PRODUCED BEFORE THE PRESENT ASSESSING OFFICER AND HIS STATEMENT WAS RECORDED BY THE PRESENT 5 ASSESSING OFFICER ON 24/08/2006, COPY OF WHICH IS AVAILABLE ON PAGES 35 TO 38 OF THE PAPER BO OK. IN THE STATEMENT, HE STATED THAT HE TOOK HER COUSIN SISTER FOR TREATMENT BY THE ASSESSEE BEING DR. DEVENDRA LAL CHANDANI AND DURING THAT , THE ASSESSEE REQUESTED HIM TO HELP A PERSON IN MAKING SOME BANK DRAFT. HE ALSO STATED THAT THE NAME OF THAT PERS ON WAS SHRI RAJ KUMAR AND HE FILLED UP THE FORM FOR PURCHASE OF DRAFT FOR RS.2.90 LAC. AN AFFIDAVIT OF SHRI MANJEET SINGH IS ALSO AVAILABLE ON PAGES 39 AND 40 OF THE PAPER BOOK IN WHICH HE ALSO STATED THAT THE BANK REFUSED TO ISSUE SINGLE DRAFT OF RS.2.90 LAC AGAINST CASH PAYMENT AND FOR THIS REASON , SIX DRAFTS WERE PURCHASED. ON C ONSIDERING ALL THESE FACTS, IT COMES OUT THAT THE ASSESSEE ESTABLISHED THE IDENTITY AND CREDITWORTHINESS OF THE LOAN CREDITOR SHRI RAJ KUMAR AND ALSO THE GENUINENESS OF THE TRAN SACTION BECAUSE THE CONCERNED PERSON WHO ACCOMPANIED THE LOAN CREDITOR FOR PURCHASE OF BANK DRAFT WAS ALSO PRODUCED BEFORE THE ASSESSING OFFICER AND NOTHING ADVERSE HAS BEEN FOUND OUT BY THE ASSESSING OFFICER. CONSIDERING ALL THESE FACTS, WE ARE OF THE CO NSIDERED OPINION THAT THE ADDITION MADE BY THE ASSESSING OFFICER AND CONFIRMED BY CIT(A) IS NOT JUSTIFIED IN THE FACTS OF THE PRESENT CASE, AS DISCUSSED ABOVE. THEREFORE, W E DELETE THIS ADDITION. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE STANDS ALLOWED . (ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE) SD/. SD/. (SUNIL KUMAR YADAV) ( A. K. GARODIA ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 17 / 03/2015 *C.L.SINGH COPY OF THE ORDER FORWARDED TO : 1.THE APPELLANT 2.THE RESPONDENT. 3.CONCERNED CIT 4.THE CIT(A) 5.D.R., I.T.A.T., LUCKNOW ASSTT. REGISTRAR