GOPAL SINGH, Jaipur V. ITO, BEAWAR

ITA 79/JPR/2017

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 6155 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 3 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-05-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Appeal Filed On: 24-01-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: J C KULHARI
• Keywords: Depreciation; Principle of natural justice
• Section: 143(3); 131; 68

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH FOT; IKY JKO] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM VK;DJ VIHY LA-@ ITA. NO. 79/JP/2017 FU/KZKJ.K O'K Z@ ASSESSMENT YEARS : 2012-13 GOPAL SINGH PROP. M/S VISHAL STORAGE BATTERIES CO. BIJAINAGAR ROAD, SENDRIYA, BEAWAR. CUKE VS. THE ITO, WARD-1, BEAWAR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: BKSPS 5652 K VIHYKFKHZ@ AP PELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : SHRI VINOD KUMAR GUPTA (C.A.) JKTLO DH VKSJ LS @ REVENUE BY : SHRI J.C. KULHARI (JCIT) LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 25/04/2018 MN?KKS'K.KK DH RKJH[ K@ DATE OF PRONOUNCEMENT : 08/05/2018 VKNS'K@ ORDER PER: VIKRAM SINGH YADAV, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF LD. CIT(A), AJMER DATED 08.11.2016 FOR THE ASSESSMENT Y EAR 2012-13 WHEREIN THE ASSESSEE HAS TAKEN THE FOLLOWING GROUND OF APPEAL: 1. IMPUGNED ASSESSMENT ORDER PASSED U/S 143(3) IS BAD IN LAW AND ON FACTS BEING AGAINST THE PRINCIPAL OF NATURAL JUSTICE AND FOR MANY MORE OTHER REASONS. 2. UNDER THE FACTS AND CIRCUMSTANCES, LD. CIT(A) HA S ERRED IN SUSTAINING DISALLOWANCE OF RS. 13,320/-, MADE BY LD . AO BY ITA NO. 79/JP/2017 GOPAL SINGH VS. ITO 2 DISALLOWING VARIOUS EXPENSES ON AD-HOC BASIS. THE D ISALLOWANCE SUSTAINED IS UNJUSTIFIED, ILLEGAL OR EXCESSIVE. 3. UNDER THE FACTS AND CIRCUMSTANCES, LD. A.O. HAS ERRED IN MAKING ADDITION OF RS. 10,00,000/- ON ACCOUNT OF UN EXPLAINED CASH CREDIT U/S 68 OF THE INCOME TAX ACT, 1961. FUR THER, CIT(A) ERRED IN CONFIRMING THE SAME. 4. UNDER THE FACTS AND CIRCUMSTANCE, LD. A.O. HAS E RRED BY MAKING ADDITION OF RS. 1,50,000/- ON ACCOUNT OF LOW HOUSEHOLD EXPENDITURE. FURTHER, CIT(A) ERRED IN CONFIRMING TH E SAME. 2. DURING THE COURSE OF HEARING THE LD. AR DID NOT PRESS GROUND NO. 1. HENCE, THE SAME IS DISMISSED AS NOT PRESSED. 3. REGARDING GROUND NO. 2 WHERE THE ASSESSEE HAS CH ALLENGED THE DISALLOWANCE OF RS. 13,320/- MADE BY THE AO BY DISA LLOWING VARIOUS EXPENSES, THE LD. CIT(A) HAS RETURNED HIS FINDING W HICH IS CONTAINED IN PARA 6.3 WHICH IS REPRODUCED AS UNDER:- 6.3. I HAVE GONE THROUGH THE ASSESSMENT ORDER, STA TEMENT OF FACTS, GROUNDS OF APPEAL AND WRITTEN SUBMISSION CAR EFULLY. IN VIEW OF THE FACTS DISCUSSED BY THE AO IN THE ASSESS MENT ORDER, I AM OF THE CONSIDERED VIEW THAT SOME DISALLOWANCE OU T OF PETROL & VEHICLE EXPENSES, DEPRECIATION ON CAR, OFFICE EXP ENSES AND MOBILE EXPENSES WAS REQUIRED TO BE MADE BY THE AO. HOWEVER, THE DISALLOWANCE MADE BY THE AO APPEARS TO BE ON HI GHER SIDE. I AM OF THE CONSIDERED VIEW THAT IT WOULD BE FAIR AND REASONABLE TO RESTRICT THE DISALLOWANCE OUT OF PETROL & VEHICL E EXPENSES, DEPRECIATION ON CAR, OFFICE EXPENSES AND MOBILE EXP ENSES TO RS. 13,320/-. ACCORDINGLY, THE DISALLOWANCE OUT OF ABOV E EXPENSES IS RESTRICTED TO RS. 13,320/- AND THE APPELLANT GETS R ELIEF OF RS. 13,320/-. ITA NO. 79/JP/2017 GOPAL SINGH VS. ITO 3 4. AFTER HEARING BOTH THE PARTIES AND PERUSED THE M ATERIAL AVAILABLE ON RECORD, WE DO NOT SEE ANY INFIRMITY IN THE ORDER OF THE LD. CIT(A) AND THE SAME IS HEREBY CONFIRMED. IN THE RESULT THE GROUND TAKEN BY THE ASSESSEE IS DISMISSED. 5. IN GROUND NO. 3, THE ASSESSEE HAS CHALLENGED THE ACTION OF THE ASSESSING OFFICER IN MAKING AN ADDITION OF RS. 10,0 0,000/- U/S 68 OF THE I.T. ACT. BRIEFLY THE FACTS OF THE CASE ARE THAT DU RING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER OBSER VED THAT THE ASSESSEE HAS TAKEN UNSECURED LOAN OF RS. 10,00,000/ - FROM SHRI BHAWANI SINGH DURING THE YEAR UNDER CONSIDERATION. A SHOW CAUSE NOTICE WAS ISSUED TO THE ASSESSEE TO EXPLAIN THE ID ENTITY AND GENUINENESS OF THE TRANSACTION AND THE CAPACITY OF THE CREDITOR TO ADVANCE MONEY TO THE ASSESSEE. IN RESPONSE, THE ASS ESSEE SUBMITTED THE CONFIRMATION OF SHRI BHAWANI SINGH OF HAVING AD VANCED RS. 10,00,000/- TO THE ASSESSEE ALONG WITH THE COPY OF HIS INCOME TAX RETURN AND THE BANK STATEMENT. ON PERUSAL OF THE BA NK STATEMENT OF SHRI BHAWANI SINGH, IT WAS NOTICED BY THE AO THAT T HE SAID BANK ACCOUNT WAS OPENED ON 27.12.2003 AND A SUM OF RS. 5 ,00,000/- WAS DEPOSITED IN CASH ON 04.11.2011 AND THEREAFTER, A C HEQUE BEARING NO. 84760 AMOUNTING TO RS. 5,00,000/- WAS ISSUED IN FAV OUR OF SHRI GOPAL SINGH ON 08.11.2011. THEREAFTER, A SUM OF RS. 5,00, 000/- WAS DEPOSITED IN CASH ON 14.11.2011 AND THEREAFTER A CH EQUE BEARING NO. 84759 WAS ISSUED IN FAVOUR OF SHRI GOPAL SINGH ON 1 5.11.20100. FURTHER, TO EXAMINE THE CREDITWORTHINESS OF SHRI BH AWANI SINGH, SUMMONS U/S 131 OF THE IT ACT WAS ISSUED TO HIM AND HIS STATEMENT WAS RECORDED ON OATH DURING THE COURSE OF ASSESSMEN T PROCEEDINGS. ON ITA NO. 79/JP/2017 GOPAL SINGH VS. ITO 4 PERUSAL OF THE STATEMENT RECORDED U/S 131 AS WELL A S COPY OF THE CAPITAL ACCOUNT AND BALANCE SHEET WHICH WAS FILED ALONG WIT H INCOME TAX RETURN OF SHRI BHAWANI SINGH, THE AO REACHED A CONCLUSION THAT SHRI BHAWANI SINGH HAS NO CREDITWORTHINESS TO ADVANCE LOAN OF RS . 10,00,000/- TO THE ASSESSEE. ACCORDINGLY, AN AMOUNT OF RS. 10,00,000/- WAS TREATED AS INCOME OF THE ASSESSEE FROM UNDISCLOSED SOURCE OF I NCOME AND THE SAME WAS BROUGHT TO TAX U/S 68 OF THE ACT. 6. BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LD. CIT(A) WHO HAS CONFIRMED THE ACTION OF THE AO BY HOLDING THAT THE LENDER COULD NOT EXPLAIN THE SOURCE OF THE CASH DEPOSIT IN HIS BANK ACCOUNT AND ACCORDINGLY, SHRI BHAWANI SINGH DID NOT HAVE CREDITWORTHINESS TO ADVANCE LOAN OF RS. 10,00,000/- TO THE ASSESSEE. 7. NOW THE ASSESSEE IS IN APPEAL BEFORE US. DURING THE COURSE OF HEARING, THE LD. AR SUBMITTED THAT THE LOAN AMOUNT TO RS. 10,00,000/- WAS RECEIVED THROUGH CHEQUE AND THE ASSESSEE HAS FI LED THE NECESSARY CONFIRMATION AND OTHER RELEVANT RECORDS OF THE LEND ER IN TERMS OF HIS INCOME TAX RETURN, PROFIT AND LOSS ACCOUNT, CAPITAL ACCOUNT AND BALANCE SHEET, COPY OF THE BANK STATEMENT THROUGH WHICH THE CHEQUES HAVE BEEN ISSUED. IT WAS FURTHER SUBMITTED THAT THE SAID LOAN AMOUNT HAS BEEN SUBSEQUENTLY REPAID ON 2.05.2015. IT WAS FURT HER SUBMITTED THAT IN THE STATEMENT RECORDED U/S 131 OF THE ACT, IN RE SPONSE TO QUESTION NO. 16, SHRI BHAWANI SHINGH HAS CATEGORICALLY ACCEP TED THAT HE HAS GIVEN LOAN OF RS. 5,00,000/- TO SHRI GOPAL SINGH AN D RS. 5,00,000/- TO M/S VISHAL BATTERIES STORAGE, THE PROPRIETORSHIP CO NCERN OF SHRI GOPAL SINGH. IT WAS FURTHER SUBMITTED THAT WHILE EXAMININ G THE ITA NO. 79/JP/2017 GOPAL SINGH VS. ITO 5 CREDITWORTHINESS, THE LD. CIT(A) HAS ONLY TAKEN INT O ACCOUNT THE INCOME OF RS. 1,76,270/- AS AGAINST THE FACT THAT THE ASSE SSEE HAS ALSO DECLARED AGRICULTURAL INCOME OF RS. 4,12,280/- IN HIS RETURN OF INCOME. IT WAS FURTHER SUBMITTED THAT THE BALANCE SHEET FILED BY S HRI BHAWANI SINGH CLEARLY REFLECTS THE LOAN AMOUNTING TO RS. 10,00,0 00/- AS ADVANCE TO THE ASSESSEE AND HIS CONCERN AND WHICH HAS ALSO BEE N SUBSEQUENTLY CONFIRMED BY HIM IN HIS STATEMENT RECORDED U/S 131 OF THE ACT. IT WAS FURTHER SUBMITTED THAT THE ACTION OF THE LD. CIT(A) IS DRAWN SOLELY FROM THE STATEMENT RECORDED U/S 131 OF THE ACT AND WHILE DOING SO, HE HAS DISREGARDED OR IGNORED THE FACTS LIKE ACCEPTANCE OF LOAN, DECLARATION OF AGRICULTURAL INCOME, ACCEPTANCE OF RETURN OF SHRI B HAWANI SINGH. IT WAS ACCORDINGLY SUBMITTED THAT THE ASSESSEE HAS DISCHAR GED HIS ONUS BY FILING THE CONFIRMATION OF INCOME TAX RETURN, BALAN CE SHEET AND BANK STATEMENT OF SHRI BHAWANI SINGH. IT WAS SUBMITTED T HAT MERELY ON THE BASIS OF THE FACT THAT THE CASH HAS BEEN DEPOSITED BY SHRI BHAWANI SINGH IN HIS BANK ACCOUNT AND DOUBTS HAVE BEEN RAIS ED REGARDING THE AGRICULTURAL INCOME WHICH IS OTHERWISE ACCEPTED BY THE REVENUE IN THE RETURN FILED BY SHRI BHAWANI SINGH, IT CANNOT BE SA ID THAT THE APPELLANT HAS NOT DISCHARGED HIS BURDEN OF PROVING THE CREDIT WORTHINESS OF SHRI BHAWANI SINGH. IN SUPPORT, THE ASSESSEE PLACED RELI ANCE ON THE DECISION OF THE HONBLE RAJASTHAN HIGH COURT IN CASE OF CIT VS. SHRI JAI KUMAR BAKLIWAL IN D.B. ITA NO. 269/2011 DATED 06.02.2014, DECISION OF HONBLE GUJARAT HIGH COURT IN CASE OF CIT VS. RANCH HOD JIVABHAI NAKHAVA, DBITA NO. 50/2011 ORDER DATED 20.03.2012 A ND DCIT VS. ROHINI BUILDERS 256 ITR 360. IT WAS ACCORDINGLY SUB MITTED THAT THE ASSESSEE HAS PROVIDE THE NECESSARY EXPLANATION REGA RDING THE IDENTITY AND GENUINENESS OF THE TRANSACTIONS AS WELL AS CRED ITWORTHINESS OF SHRI ITA NO. 79/JP/2017 GOPAL SINGH VS. ITO 6 BHAWANI SINGH. ACCORDINGLY, THE ADDITION MADE BY TH E AO AND CONFIRMED BY THE LD. CIT(A) MAY KINDLY BE DELETED. 8. PER CONTRA, THE LD. DR HAS VEHEMENTLY ARGUED THE MATTER AND RELIED ON THE FINDINGS OF THE LOWER AUTHORITIES. FU RTHER, THE LD. DR RELIED ON THE DECISIONS OF HONBLE GUJARAT HIGH COURT IN C ASE OF UMESH KRISHNANI VS ITO REPORTED IN 35 TAXMAN.COM 598 AND THE DECISION OF THE HONBLE PUNJAB AND HARYANA HIGH COURT IN CASE OF DA YAL SINGH AND SONS VS. CIT REPORTED IN 335 ITR 90. 9. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. UNDISPUTEDLY THE LOAN AMOUNT H AS BEEN RECEIVED BY THE ASSESSEE THROUGH BANKING CHANNEL. FURTHER, THE ASSESSEE HAS SUBMITTED A COPY OF THE CONFIRMATION, COPY OF INCOM E TAX RETURN, BALANCE SHEET AND BANK STATEMENT OF SHRI BHAWANI SI NGH. ON PERUSAL OF THE BALANCE SHEET, THE LOAN AMOUNT OF RS. 10,00,000 /- HAS BEEN CLEARLY REFLECTED IN THE NAME OF SHRI GOPAL SINGH AND HIS C ONCERN AND THEREFORE, THERE IS A CLEAR ACKNOWLEDGEMENT BY SHRI BHAWANI SINGH OF HAVING ADVANCED THE LOAN TO THE ASSESSEE. FURTHER, IN THE STATEMENT RECORDED U/S 131 OF THE ACT, THE SAID POSITION HAS BEEN REITERATED AND THERE IS THUS A CONSISTENT POSITION AND ACKNOWLEDGE MENT THAT SHRI BHAWANI SINGH HAS ADVANCED THE LOAN TO THE ASSESSEE . THEREFORE, THERE CANNOT BE ANY DISPUTE REGARDING THE IDENTITY AND GE NUINESSNESS OF THE LOAN TRANSACTION. AS FAR AS THE CREDITWORTHINESS O F SHRI BHAWANI SINGH IS CONCERNED, IT IS A FUNCTION OF VARIOUS FACTORS W HICH INCLUDES THE NETWORTH, ABILITY TO RAISE FUNDS, EARNINGS FOR THE RELEVANT PERIOD, ETC. WE FIND THAT IN HIS RETURN OF INCOME, SHRI BHAWANI SINGH HAS DISCLOSED ITA NO. 79/JP/2017 GOPAL SINGH VS. ITO 7 HIS CAPITAL WORTH RS 10,55,953, UNSECURED LOAN OF R S 5,40,850 WHICH SHOWS ABILITY TO RAISE FUNDS AND ASSETS WORTH RS 5, 96,803 CONSISTING PRIMARILY OF AGRICULTURAL LAND WHICH CAN AGAIN BE U SED AS COLLATERAL TO RAISE FURTHER FUNDS. FURTHER, IN HIS PROFIT/LOSS A CCOUNT, HE HAS DISCLOSED INCOME OF RS. 2,07,410/- FROM HIS BUSINESS DEALINGS AND AGRICULTURAL INCOME OF RS. 4,12,280/- AND THE LATTER HAS APPAREN TLY MISSED THE ATTENTION OF THE LOWER AUTHORITIES. IN OUR VIEW, TH E CREDITWORTHINESS OF SHRI BHAWANI SINGH CAN BE REASONABLY GAUGED FROM TH E ABOVE NUMBERS. REGARDING DEPOSIT OF CASH IN HIS BANK ACCOUNT, IN H IS STATEMENT RECORDED U/S 131 OF THE ACT, SHRI BHAWANI SINGH HAS CONFIRMED THAT THE AMOUNT OF CASH DEPOSITED IN HIS BANK ACCOUNT IS THE AMOUNT HE HAS BORROWED FROM THE VARIOUS PERSONS IN HIS VILLAGE WH OSE DETAILS ARE RECORDED IN HIS DIARY WHICH CAN BE PRODUCED SUBSEQU ENTLY. HOWEVER, THE AO HAS NOT ACCEPTED THE SAID EXPLANATION. THE F ACT REMAINS THAT THE CASH HAS BEEN FOUND DEPOSITED IN THE BANK ACCOUNT O F SHRI BHAWANI SINGH, THE PRESUMPTION WHICH FOLLOWS IS THAT THE SA ID CASH FOUND IN POSSESSION OF SHRI BHAWANI SINGH BELONGS TO HIM. TH E SAID PRESUMPTION IS NO DOUBT REBUTTABLE BUT FOR THAT, THE REVENUE HA S TO BRING NECESSARY EVIDENCE ON RECORD WHICH APPARENTLY IS MISSING IN T HE PRESENT CASE. FURTHER, WE FIND THAT THE DECISION OF THE HONBLE R AJASTHAN HIGH COURT IN CASE OF CIT(AJMER) VS. SHRI JAI KUMAR BAKLIWAL ( SUPRA) SUPPORTS THE CASE OF THE ASSESSEE WHEREIN IT WAS HELD THAT WHERE DEPOSIT OF CASH AND IMMEDIATE TRANSFER OF CHEQUE OR CLEARANCE OF THE CH EQUE WITHIN A DAY OR TWO CASTS A DOUBT AS THE TRANSACTION APPEARS TO BE SOMEWHAT DOUBTFUL BUT SUSPICION HOWSOEVER STRONG IT MAY NOT BE SUFFICIENT BY ITSELF. ITA NO. 79/JP/2017 GOPAL SINGH VS. ITO 8 10. IT WOULD BE APPROPRIATE TO REPRODUCE THE RELEVA NT FINDINGS OF THE HONBLE HIGH COURT AS UNDER:- 9. IN OUR VIEW AS WELL, THREE THINGS ARE REQUIRED TO BE PROVED BY RECIPIENT OF MONEY I.E. (1) IDENTITY OF THE CREDITO R (2) CAPACITY OF THE CREDITOR TO ADVANCE MONEY AND (3) GENUINENESS OF TH E TRANSACTION. FROM THE FACTS EMERGING ON THE FACE OF RECORD, WE N OTICE THAT IT IS AN ADMITTED FACT THAT ALL THE ABOVE CASH CREDITORS (12 IN NUMBER) ARE ASSESSED TO INCOME TAX AND THEY PROVIDED A CONFIRMA TION AS WELL AS THEIR PERMANENT ACCOUNT NUMBER. THEY HAVE THEIR OWN RESPECTIVE BANK ACCOUNTS WHICH THEY HAVE BEEN OPERATING AND IT IS NOT THE CLAIM OF THE AO THAT THE RESPONDENT-ASSESSEE WAS OPERATIN G THEIR BANK ACCOUNTS RATHER THEY HAVE CATEGORICALLY STATED THAT THEY ISSUED CHEQUE TO THE RESPONDENT-ASSESSEE. IT IS ALSO AN AD MITTED FACT THAT MOST OF THE CASH CREDITORS APPEARED BEFORE THE AO A ND THEIR STATEMENTS U/S 131 WERE ALSO RECORDED ON OATH. THE CASH CREDITORS APPEARED TO BE FROM SMALL PLACE AND IT IS QUITE POS SIBLE THAT THEY MAY NOT BE IN A POSITION TO PIN POINTEDLY OR SPECIFICAL LY SAY ABOUT EVERYTHING BUT BY AND LARGE STOOD TO THE TESTIMONY AND WERE ABLE TO EXPLAIN VARIOUS ISSUES AS PER THE QUESTION AND ANSW ER REPRODUCED BY THE AO HIMSELF IN THE ASSESSMENT ORDER. IT MAY BE T HAT MOST OF THE CASH CREDITORS ARE RELATIVES OF THE RESPONDENT-ASSE SSEE AND HEAVY BURDEN LAY ON THE RESPONDENT-ASSESSEE TO PROVE ABOU T THE CASH CREDIT BUT ONCE ALL THE CASH CREDITORS APPEARED BEFORE THE AO, THEIR STATEMENTS HAVING BEEN RECORDED U/S 131, THEN IN SO FAR AS THE RESPONDENT-ASSESSEE IS CONCERNED, THE ONUS, WHICH L AY UPON HIM (ASSESSEE), IN OUR VIEW, STOOD DISCHARGED AS HE WAS ABLE TO PROVE IDENTITY OF THE CREDITORS. ONCE THE AMOUNT WAS ADVA NCED BY ACCOUNT PAYEE CHEQUE FROM THEIR RESPECTIVE OWN BANK ACCOUNT S AND WERE BEING ASSESSED TO INCOME TAX, THEN IN OUR VIEW, CAP ACITY OF THE CREDITOR AND GENUINENESS OF THE TRANSACTION STOOD P ROVED. IN SO FAR AS THE RESPONDENT-ASSESSEE IS CONCERNED, IT IS CORRECT THAT HE IS NOT REQUIRED TO PROVE SOURCE OF THE SOURCE AND IF THE A O HAD ANY DOUBT, THEN THE AO, ASSESSING THE RESPONDENT-ASSESSEE, COU LD HAVE SENT THE INFORMATION TO THE AO, ASSESSING THE CASH CREDITORS FOR APPROPRIATE ITA NO. 79/JP/2017 GOPAL SINGH VS. ITO 9 ACTION IN THEIR CASES BUT IN SO FAR AS THE RESPONDE NT-ASSESSEE IS CONCERNED, IN OUR VIEW, THE RESPONDENT-ASSESSEE HAS BEEN ABLE TO DISCHARGE THE BURDEN WHICH LAY UPON HIM. 10. CERTAINLY, DEPOSIT OF CASH AND IMMEDIATE TRANSF ER OF CHEQUE OR CLEARANCE OF THE CHEQUE WITHIN A DAY OR TWO CASTS A DOUBT AS THE TRANSACTION APPEARS TO BE SOME WHAT DOUBTFUL BUT SU SPICION HOWSOEVER STRONG IT MAY BE IS NOT SUFFICIENT ITSELF . ON PERUSAL OF THE FACTS IN THE PRESENT CASE, WE OBSERVE IS THAT THE A MOUNTS ADVANCED ARE NOT SUBSTANTIAL AND IN MOST OF THE CASES, THE A MOUNTS ARE RANGING FROM 25,000/- TO 90,000/- AND IN SOME CASES, IT IS EXCEEDING RS1,50,000/-. ON PERUSAL OF THE FACTS, IT IS ALSO A PPARENT THAT IN SOME OF THE CASES (UTTAN CHAND JAIN, HUF) EVEN THE KARTA OF THE HUF HAD PRODUCED THE CASH BOOK AND THEIR LEDGER ACCOUNT BEF ORE THE AO. SMT. ANJU GANGWAL HAD ALSO PRODUCED HER CASH BOOK SO ALS O MR. VINAY KUMAR GANGWAL AS WELL AS MR. AKHILESH KUMAR ANKUR J AIN (HUF) AND THE AO HAS DRAWN ADVERSE INFERENCE FINDING SOME DIS CREPANCIES IN THEIR RESPECTIVE CASH BOOKS BUT AS OBSERVED HEREIN ABOVE, THE DOUBT, IF ANY, MAY BE TRUE BUT IN SO FAR AS THE RESPONDENT-AS SESSEE IS CONCERNED, THAT ISSUE CANNOT BE CONVERTED INTO AN A DDITION OF INCOME U/S 68 OF THE ACT IN THE HANDS OF THE ASSESSEE AND APPROPRIATE COURSE, AS OBSERVED HEREIN ABOVE, WAS THAT THE AO COULD HAV E INFORMED THE AO, ASSESSING THE RESPECTIVE CASH CREDITORS FOR APP ROPRIATE ACTION IN THEIR CASE. 17. AS OBSERVED HEREIN ABOVE, THOUGH U/S 68, AO IS FRE E TO SHOW WITH THE HELP OF THE ENQUIRY CONDUCTED BY HIM INTO THE TRANSACTION WHICH HAS TAKEN PLACE BETWEEN THE CREDITOR AND THE SUB-CREDITOR THAT THE TRANSACTION BETWEEN TWO WERE NOT GENUINE AND TH AT THE SUB- CREDITOR HAD NO CREDITWORTHINESS, IT WILL NOT NECES SARILY MEAN THAT LOAN ADVANCED BY THE SUB-CREDITOR TO THE CREDITORS WAS INCOME OF THE ASSESSEE FROM UNDISCLOSED SOURCES UNLESS THERE IS E VIDENCE DIRECT OR CIRCUMSTANTIAL, TO SHOW THAT THE AMOUNT WHICH HAD B EEN ADVANCED BY THE SUB-CREDITOR TO THE CREDITOR HAD ACTUALLY BE EN RECEIVED BY THE SUB-CREDITOR FROM THE ASSESSEEE. ITA NO. 79/JP/2017 GOPAL SINGH VS. ITO 10 18. THE LOGICAL INTERPRETATION WILL BE THAT WHILE T HE ASSESSEE HAS TO PROVE AS SPECIAL KNOWLEDGE I.E. FROM WHERE HE HAS R ECEIVED THE CREDIT AND ONCE HE DISCLOSED THE SOURCE FROM WHICH HE HAS RECEIVED MONEY, HE MUST ALSO ESTABLISH THAT SO FAR AS HIS TRANSACTI ON WITH HIS CREDITOR IS CONCERNED, THE SAME IS GENUINE AND HIS CREDITOR HAD THE CREDITWORTHINESS TO ADVANCE THE LOAN WHICH THE ASSE SSEE HAD RECEIVED. WHEN THE ASSESSEE DISCHARGES THE BURDEN SO PLACED O N HIM, ONUS THEN SHIFTS TO THE AO, IF THE AO ASSESSES THE SAID LOAN AS THE INCOME OF THE ASSESSEE FROM UNDISCLOSED SOURCE HE HAS TO PROVE EI THER BY DIRECT EVIDENCE OR INDIRECT/ CIRCUMSTANTIAL EVIDENCE THAT THE MONEY WHICH THE ASSESSEE RECEIVED FROM THE CREDITOR ACTUALLY BELONG TO AND WAS OWNED BY THE ASSESSEE HIMSELF. 19. IF THERE IS DIRECT EVIDENCE TO SHOW THAT THE LO AN RECEIVED BY THE ASSESSEE ACTUALLY BELONG TO THE ASSESSEE, THERE WIL L BE NO DIFFICULTY IN ASSESSING SUCH AMOUNT AS THE INCOME OF THE ASSESSEE FROM UNDISCLOSED SOURCE BUT IF THERE IS NO DIRECT EVIDEN CE IN THIS REGARD, THEN THE INDIRECT OR CIRCUMSTANTIAL EVIDENCE HAS TO BE CONCLUSIVE IN NATURE AND SHOULD POINT TO THE ASSESSEE AS THE PERS ON FROM WHOM THE MONEY HAS ACTUALLY FLOWN TO THE HANDS OF THE CREDIT OR AND THEN FROM THE HANDS OF THE CREDITOR TO THE HANDS OF THE CREDI TOR. 20. WHEN WE PERUSE THE FACTS HEREIN ABOVE, IT IS AN ADMITTED POSITION THAT ALL THE CASH CREDITORS HAVE AFFIRMED IN THEIR EXAMINATION THAT THEY HAD ADVANCED MONEY TO THE ASSESSEE FROM THEIR OWN RESPECTIVE BANK ACCOUNTS. THEREFORE, WHEN THERE IS CATEGORICAL FINDING EVEN BY THE AO THAT THE MONEY CAME FROM THE RESPECTIVE BANK ACCOUNTS OF THE CREDITORS, WHICH DID NOT FLOW IN THE SHAPE OF T HE MONEY, THEN, IN OUR VIEW, SUCH AN ADDITION CANNOT BE SUSTAINED AND HAS BEEN RIGHTLY DELETED BY BOTH THE TWO APPELLATE AUTHORITIES. THER E IS NO CLINCHING EVIDENCE IN THE PRESENT CASE NOR THE AO HAS BEEN AB LE TO PROVE THAT THE MONEY ACTUALLY BELONGED TO NONE BUT THE ASSESSE E HIMSELF. THE ACTION OF THE AO APPEARS TO BE BASED ON MERE SUSPIC ION. ITA NO. 79/JP/2017 GOPAL SINGH VS. ITO 11 11. IN LIGHT OF ABOVE DISCUSSIONS AND RESPECTFULLY FOLLOWING THE DECISION OF THE HONBLE RAJASTHAN HIGH COURT, IT CA NNOT BE SAID THAT THE ASSESSEE HAS NOT DISCHARGED THE INITIAL ONUS PLACE ON HIM IN TERMS OF IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE T RANSACTION. IN LIGHT OF ABOVE, THE ADDITION MADE BY THE AO U/S 68 OF THE AC T IS HEREBY DELETED AND THE GROUND TAKEN BY THE ASSESSEE IS ALL OWED. 12. NOW, COMING TO GROUND NO. 4 WHERE THE ASSESSEE HAS CHALLENGED THE ACTION OF THE AO BY MAKING ADDITION OF RS. 1,50 ,000/- ON ACCOUNT OF LOW HOUSEHOLD EXPENDITURE. BRIEFLY, THE FACTS OF TH E CASE ARE THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO TAKING INTO CONSIDERATION WITHDRAWALS MADE BY FOUR MEMBERS OF THE ASSESSEES FAMILY, EDUCATION EXPENDITURE, ELECTRICITY BILLS PAID BY THE ASSESSEE S FATHER DETERMINED A FIGURE OF RS 10,112 AS MONTHLY EXPENDITURE AND THER EAFTER, TAKING INTO ACCOUNT THE FACT THAT THE ASSESSEES FAMILY CONSIST ED OF 9 MEMBERS, SOCIAL STATUS OF THE FAMILY, OTHER EXPENSES ON HOUS EHOLD ETC DETERMINED THAT THE WITHDRAWALS ARE VERY LOW AND ESTIMATED AN AMOUNT OF RS 150,000 AND MADE AN ADDITION OF THE SAID AMOUNT ON ACCOUNT OF LOW HOUSEHOLD WITHDRAWALS. 13. BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTE R IN APPEAL WHO HAS CONFIRMED THE SAID ADDITION. THE RELEVANT FIND ING OF THE LD CIT(A) IS REPRODUCED AS UNDER: 9.3 I HAVE GONE THROUGH THE ASSESSMENT ORDER, STAT EMENT OF FACTS, GROUNDS OF APPEAL AND WRITTEN SUBMISSION CAREFULLY. IT IS AN ADMITTED FACT THAT FOR THE JOINT FAMILY OF NINE MEMBERS, TOT AL WITHDRAWALS SHOWN ARE OF RS. 3,46,300/-. OUT OF WHICH RS. 2,12,000/- HAVE BEEN INCURRED TOWARDS EDUCATION OF THE FOUR CHILDREN. IN VIEW OF OTHER FACTS DISCUSSED BY THE AO IN THE ASSESSMENT ORDER REGARDING CONSUMP TION OF ELECTRICITY, ITA NO. 79/JP/2017 GOPAL SINGH VS. ITO 12 MAINTENANCE OF CARS ETC., THE ADDITION OF RS. 1,50, 000/- MADE BY THE AO ON ACCOUNT OF LOW HOUSEHOLD WITHDRAWALS, IS HELD TO BE QUITE REASONABLE AND FAIR. ACCORDINGLY, THE ADDITION OF R S. 1,50,000/- MADE BY THE AO IS HEREBY CONFIRMED. 14. DURING THE COURSE OF HEARING, THE LD AR RAISED VARIOUS CONTENTIONS AND RELIED ON THE WRITTEN SUBMISSIONS WHICH ARE REP RODUCED AS UNDER: 4.1 LD. A.O. AFTER OBTAINING THE INFORMATION FROM THE RESPECTIVE SCHOOLS, WHICH CONFIRMS THE TOTAL FEES OF RS. 1,94, 000/-ESTIMATED THE TOTAL EXPENDITURE ON EDUCATION OF CHILDREN AT RS. 2 ,12,000/-. IT IS IMPORTANT TO NOTE THAT THE SCHOOL FEES DETAILS AND BASIS OF ESTIMATION ARE AVAILABLE AT PAGE 15 AND 16 OF THE ASSESSMENT O RDER. PERUSAL OF THE SAME SHOWS THAT SCHOOL AT MOUNT ABUT ALSO CHARG ED RS. 10,000/- PER CHILD AS POCKET MONEY. UNDER THE FACTS MENTIONE D HEREINBEFORE, NO SEPARATE ESTIMATION FOR PETTY EXPENSES REQUIRED SINCE TO MEET SUCH EXPENDITURE MONEY WERE ALREADY LYING WITH SCHO OLS. 4.2 LD. A.O. FURTHER ERRED BY TAKING INTO ACCOUNT 9 MEMBERS WHILE ESTIMATING THE HOUSEHOLD EXPENSE FOR TEA, MILK, FOO D, ETC. WHEREAS IT IS A FACT THAT TWO CHILDREN WERE STUDYING AT MOUNT ABU IN BOARDING SCHOOL AND THEY HAVE BEEN TAKEN CARE BY THE SCHOOL. UNDER THE FACT MENTION HEREINBEFORE, ESTIMATION IS BASED ON WRONG ASSUMPTI ON OF FACTS. 4.3 IT IS FURTHER SUBMITTED THAT STATEMENT OF APPEL LANT WERE RECORDED U/S 131 OF THE INCOME TAX ACT AND IN THE STATEMENT, IN ANSWER TO QUESTION NO. 14, APPELLANT HAS CATEGORICALLY STATED THAT WHEAT, ETC. HAVE BEEN RECEIVED FROM THE CROPS. WHILE ESTIMATING THE HOUSEHOLD EXPENSES OF THE FAMILY LD. A.O. HAS NOT TAKEN INTO THE CONSIDERATION THE ITA NO. 79/JP/2017 GOPAL SINGH VS. ITO 13 FACT THAT APPELLANT'S FAMILY IS RECEIVING CROPS FRO M AGRICULTURE LAND RESULTANTLY THEY HAVE NOT TO INCUR EXPENDITURE ON S UCH ACCOUNTS. 4.4 APPELLANT IS LIVING IN HIS OWN PARENTAL HOUSE. FURTHER THE TOTAL ELECTRICITY BILL FOR TWELVE MONTHS WAS RS. 12,952/- (REFER PAGE 17 OF ASSESSMENT ORDER), WHICH SHOWS THAT APPELLANT WAS L IVING VERY ORDINARILY LIFE AND NOT USING ANY ELECTRONIC GAZETT ES. 4.5 THE EXPENDITURE INCURRED APART FROM ELECTRICITY , EDUCATION, WHEAT ETC. EVEN CONSIDERING THE EDUCATION EXPENDITURE EST IMATED BY THE A.O. COMES TO RS. 10,112/- PER MONTH, WHICH IS VERY MUCH REASONABLE SINCE THERE IS NO SPECIAL OCCASION OF FUNCTION IN THE FAM ILY DURING THE YEAR UNDER CONSIDERATION. 4.6 LD. A.O. HAS ALSO LIST OUT THE EXPENDITURES WHI CH INCLUDES MOBILE, MAINTENANCE OF CAR ETC. AT PAGE 17 OF HIS ORDER. IT IS IMPORTANT TO NOTE THAT THE LD. A.O. HAS ALREADY DISALLOWED THE M AINTENANCE EXPENDITURE ON ACCOUNT OF PERSONAL USE SEPARATELY. THE FACTS SHOW THAT LD. A.O. HAS NOT ACTED JUDICIOUSLY. 4.7 FORGOING DISCUSSION OF FACTS SHOWS THAT LD. A.O . WHILE ESTIMATING THE HOUSEHOLD EXPENSES TAKEN INTO CONSIDERATION INC ORRECT FACTS OR HAVE NOT TAKEN INTO CONSIDERATION CERTAIN MATERIAL WHICH WERE AVAILABLE ON RECORD. IT IS ALSO IMPORTANT THAT THE FIGURE OF RS. 1,50,000/- HAS BEEN ADDED ARBITRARY WITHOUT GIVING ANY BASIS OR RE ASON. 4.8 UNDER THE FACTS AND CIRCUMSTANCES, THE ADDITION SUSTAINED OF RS. 1,50,000/- IS UNJUSTIFIED AND DESERVED TO BE DE LETED. ITA NO. 79/JP/2017 GOPAL SINGH VS. ITO 14 15. WE HAVE HEARD THE RIVAL CONTENTIONS AND PURUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT EXPENSES ON PETR OL AND MOBILE EXPENSES HAVE ALREADY BEEN DISALLOWED SEPARATELY BY THE AO ON ACCOUNT OF PERSONAL USAGE, THEREFORE, THE SAME CANN OT BE CONSIDERED FOR DETERMINING THE MONTHLY HOUSEHOLD EXPENDITURE. FURTHER, SCHOOL FEES OF THE TWO CHILDREN WHO ARE STUDYING IN THE BO ARDING SCHOOL INCLUDES FEES TOWARDS MEETING EXPENSES AMOUNTING TO RS 10,000 WHICH COULD TAKE CARE OF BOOKS AND CLOTHING EXPENDITURE, THEREFORE THERE IS NO BASIS FOR ESTIMATING ANY AMOUNT SEPARATELY TOWARDS SUCH EXPENDITURE. FURTHER, GIVEN THAT TWO CHILDREN WERE STUDYING IN T HE BOARDING SCHOOL, NUMBER OF MEMBERS STAYING TOGETHER IN THE JOINT FAM ILY COMES TO 7 MEMBERS AS AGAINST 9 MEMBERS. WE THEREFORE FIND THA T THE BASIS OF ESTIMATION OF HOUSEHOLD EXPENDITURE BY THE AO SUFFE RS ON ACCOUNT OF THESE FACTUAL INACCURACIES AND WE THEREFORE FIND TH E ESTIMATION MADE BY THE AO ON A HIGHER SIDE. IN OUR VIEW, TAKING INTO CONSIDERATION THE TOTALITY OF FACTS AND CIRCUMSTANCES OF THE CASE, IT WOULD BE REASONABLE TO RESTRICT THE ADDITION ON ACCOUNT OF LOW HOUSEHOL D WITHDRAWALS TO RS 75,000. IN THE RESULT, THE GROUND TAKEN BY THE ASS ESSEE IS PARTLY ALLOWED. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTL Y ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 08/05/2018. SD/- SD/- FOT; IKY JKO FOE FLAG ;KNO (VIJAY PAL RAO) (VIKRAM SINGH YADAV) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER ITA NO. 79/JP/2017 GOPAL SINGH VS. ITO 15 TK;IQJ@ JAIPUR FNUKAD@ DATED:- 08/05/2018. *SANTOSH VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- SHRI GOPAL SINGH, BEAWAR. 2. IZR;FKHZ@ THE RESPONDENT- ITO, WARD- 1, BEAWAR. 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDR@ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR. 6. XKMZ QKBZY@ GUARD FILE { ITA NO. 79/JP/2017} VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR