ITO, Baddi V. M/s Mahavir Polymers, Solan

ITA 746/CHANDI/2011

• Counselvise Citation: 74621514 RSA 2011
• Duration Of Justice: 4 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-12-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 12-12-2011
• Assessment Year: 2007-2008
• Appeal Filed On: 18-07-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AKHILESH GUPTA
• Assessee Lawyers: AJAY JAIN
• Keywords: Assessment record
• Section: 68; 69C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH A CHANDIGARH BEFORE MS.SUSHMA CHOWLA, JUDICIAL MEMBER AND SHRI MEHAR SINGH, ACCOUNTANT MEMBER ITA NO. 746/CHD/2011 ASSESSMENT YEAR: 2007-08 ITO, V M/S MAHAVIR POLYMERS, BADDI,DISTT.SOLAN, 25, HPSIDC, BADDI, (H.P.) DISTT. SOLAN (HP). PAN: AAKFM-2545E (APPELLANT) (RESPONDENT) DEPARTMENT BY: SHRI AKHILESH GUPTA ASSESSEE BY : SHRI AJAY JAIN DATE OF HEARING : 12.12.2011 DATE OF PRONOUNCEMENT : 14.12.2011 ORDER PER MEHAR SINGH, AM THE PRESENT APPEAL FILED BY THE REVENUE IS AGAINST THE ORDER DATED 26.05.2011 PASSED BY THE LD. CIT(A) U/S 250(6) OF THE INCOME-TAX ACT,1961 (IN SHORT 'THE ACT'). 2. IN THIS APPEAL, THE REVENUE HAS RAISED THE FOLLO WING GROUNDS OF APPEAL: 1. ON THE FACTS AND IN THE CIRCUMSTANCES, THE L D. CIT(A) HAS ERRED IN DELETING THE ADDITION ON ACCOUNT OF INTEREST FREE UNSECURED LOANS AMOUNTING TO RS.25,00,000/-. 2. IT IS PRAYED THAT THE ORDER OF THE LD CIT(A) BE SET -ASIDE AND THAT OF THE AO RESTORED. 3. THE APPELLANT CARVES LEAVE TO ADD ANY OTHER GROUND OF APPEAL WHICH MAY ARISE AT THE TIME OF HEARING. 3. IN THE COURSE OF PRESENT APPELLATE PROCEEDINGS, THE REVENUE CONTENDED THAT CONFIRMATION WAS FILED BY TH E ASSESSEE ONLY IN RESPECT OF ONE PARTY. HOWEVER, THE LD. 'DR' PRODUCED EVIDENCE INDICATING CONFIRMATION FILED, BOTH IN THE CASE OF 2 SMT.SHELLY SETHI, GURGAON AND MANPREET SINGH SETHI, NEW DELHI. THIS FACTUM WAS FURTHER CONFIRMED BY THE BE NCH BY A REFERENCE TO THE ASSESSMENT RECORD WHERE THESE CONF IRMATIONS WERE AVAILABLE. CONSEQUENTLY, SHRI AKHILESH GUPTA, DR VIDE LETTER DATED 12.12.2011 SUBMITTED PHOTO COPY OF SUC H CONFIRMATION FOR THE PURPOSE OF RECORD OF THE BENCH . 5. WE HAVE CAREFULLY PERUSED THE RIVAL SUBMISSIONS AND RELEVANT RECORDS. THE ONLY ISSUE INVOLVED IN THE P RESENT CASE IS DELETION OF ADDITION OF RS.25,00,000/- BY THE CIT(A ) IN RESPECT OF THESE TWO PARTIES. THE LD. CIT(A) HAS RIGHTLY D ELETED SUCH ADDITIONS AFTER APPRECIATION OF THE CREDIBLE AND CO GENT EVIDENCE FILED BY THE ASSESSEE IN THE MATTER. THE FINDINGS OF THE LD. CIT(A) ARE REPRODUCED HEREUNDER : 4. I HAVE CAREFULLY PERUSED THE MATERIAL ON RECORD , THE FACTS OF THE CASE AND THE SUBMISSIONS MADE BY T HE APPELLANT. THE AO HAS MADE TWO ADDITIONS U/S 68 OF THE IT ACT,1961 (WRONGLY WRITTEN AS SECTION 69C IN PARA 3 OF THE ORDER) IN RESPECT OF FOLLOWING UNSECURED LOANS: MANPRET SINGH SETHI 5,00,000/- MRS.SHELLEY SETHI 20,00,000/- THE ABOVE ADDITIONS HAVE BEEN MADE ON THE GROUND TH AT REPLY TO LETTER ISSUED BY THE AO WAS RECEIVED AT TH E DAK COUNTER (EMPHASIS SUPPLIED) ENCLOSING THEREWITH PHOTOCOPY OF RETURN OF INCOME AND CONFIRMATION BY T HE CASH CREDITOR. AS PER THE AO, LETTER FROM DELHI WAS EXPECTED BY POST OR COURIER. THE AO HAS FURTHER SURMISED THAT THE INCOME SHOWN BY THE CASH CREDITOR WERE NOT SUFFICIENT TO PROVE THE QUANTUM OF LOAN ADVANCE. THE AO HAS ALSO STATED THAT NEARLY FILING OF COPY OF ACCOUNT AND SHOWING THE RETURN OF THE SAID LOANS IN THE NEXT YEAR ARE NOT SUFFICIENT TO PROVE THE GENUINENESS OF THE SAID LOANS. 4.3 IN VIEW OF THE MATERIALS PLACED ON THE RECORD GIVING THE PAN, BANKING DETAILS AND THE FACT THAT CONFIRMA TION 3 WAS FILED BEFORE THE AO I AM UNABLE TO SUSTAIN THE ADDITION OF RS.25 LAKH MADE BY THE AO ON ACCOUNT OF UNEXPLAINED UNSECURED LOAN. 4.4 IN SIMILAR CIRCUMSTANCES WHERE THE IDENTITY OF THE CASH CREDITOR (SHARE HOLDER) IS MADE AVAILABLE TO T HE AO, NO ADDITION CAN BE MADE BY THE AO IN THE HANDS OF T HE COMPANY BECAUSE IT IS FOR THE SHARE HOLDER TO EXPLA IN HIS CREDIT WORTHINESS IN HIS OWN ASSESSMENT (LOVELY EXP ORTS 319 ITR (ST)5(S.C). ACCORDINGLY, THE ADDITION OF RS .25 LAKH IS DELETED. 6. IN THE PRESENT CASE THE ASSESSEE HAS DISCHARGED PRIMARY ONUS CAST UPON IT BY WAY OF FILING REQUISITE EVIDEN CE IN THE FORM OF CONFIRMATORY LETTER ALONGWITH PAN AND BANK STATE MENTS FOR THE PURPOSE OF PROVING IDENTITY, CAPACITY AND GENUI NENESS OF THE TRANSACTIONS. ON THE CONTRARY, LD. 'DR' HAS FAILED TO BRING ON RECORD ANY PRIMA-FACIE EVIDENCE TO DISPROVE THE EVI DENCE FILED BY THE ASSESSEE. ACCORDINGLY, IN THE LIGHT OF VARI OUS JUDICIAL PRONOUNCEMENTS ON THE ISSUE IN QUESTION, THE FINDIN GS OF THE CIT(A) IN THE MATTER ARE UPHELD AND THE APPEAL OF T HE REVENUE IS DISMISSED. 7. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. ORDER PRONOUNCED IN THE OPEN COURT ON 14 TH DEC.,2011. SD/- SD/- (SUSHMA CHOWLA) (MEHAR SINGH) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 14 TH DEC.,2011. POONAM COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT(A), THE CIT, DR ASSISTANT REGISTRAR, ITAT CHANDIGARH