Smt. Madhu, Meerut V. ITO, Meerut

ITA 872/DEL/2015

• Counselvise Citation: 87220114 RSA 2015
• Duration Of Justice: 9 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-12-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 23-11-2015
• Assessment Year: 2002-2003
• Appeal Filed On: 12-02-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P DAM KANUNJNA
• Assessee Lawyers: V K GOEL
• Section: 68

Judgement Text

ITA NO.872/DEL/2015 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH E, NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER I.T.A. NO . 872/DEL /20 1 5 A.Y. : 20 0 2 - 20 0 3 SMT. MADHU, W/O SHRI VIKRAM SINGH, C/O VINOD KUMAR GOEL, 282, BOUNDARY ROAD, CIVIL LINES, MEERUT (PAN: AFEPR6648L) VS . INCOME TAX OFFICER, WARD 1(4), MEERUT (APPELLANT) (APPELLANT) (APPELLANT) (APPELLANT) (RESPONDENT) (RESPONDENT) (RESPONDENT) (RESPONDENT) ASSESSEE BY : SH. V.K. GOEL, ADV. DEPARTMENT BY : SH. P. DAM KANUNJNA, SR. DR DATE OF HEARING: DATE OF HEARING: DATE OF HEARING: DATE OF HEARING: 23 2323 23. .. .11 1111 11.201 .201 .201 .2015 55 5 DATE OF ORDER : DATE OF ORDER : DATE OF ORDER : DATE OF ORDER : 0 00 02 22 2. .. .1 11 12 22 2.201 .201 .201 .2015 55 5 ORDER ORDER ORDER ORDER PER PER PER PER H.S. SIDHU, H.S. SIDHU, H.S. SIDHU, H.S. SIDHU, J JJ JM MM M THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS), MEERUT DATED 29.1.2015 PERTAINING TO ASSESSMENT YEAR 2002-03 ON THE FOLLOWING GROUNDS:- 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE ITO, WARD 1(4), MEERUT ERRED IN LAW BY MAKING AN ADDITIO N OF RS. 7,30,000/- ON ACCOUNT OF DEPOSITS U/S. 68 OF THE I. T. ACT, 1961, WITHOUT ANY BASE AND MERITS OF THE CASE. THAT LD. C IT(A) IS IN ERROR TO CONFORM THE SAME. ITA NO.872/DEL/2015 2 2. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE LD. ITO, WARD 1(4), MEERUT ERRED IN LAW BY MAKING THE ADDITI ON U/S. 68 OF THE I.T. ACT, 1961 TO THE INCOME OF ASSESSEE AS THE SAME DOES NOT BELONG TO THE ASSESSEE. 3. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. AO PRESUMED AND MISLED THE DEPARTMENT WITHOUT ANY BAS E AND LAW. 4. THAT THE ORDER TO THIS EXTENT IS BAD IN LAW AND NEEDS TO BE QUASHED. 5. THAT THE ASSESSEE HAS RIGHT TO ADD, DELETE OR MO DIFY ANY GROUNDS DURING THE APPEAL PROCEEDING. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSE SSEE HAD FILED A NIL RETURN INCOME. DURING THE COURSE OF ASSESSMENT PROCEEDINGS IT WAS NOTED BY THE AO THAT THE ASSESSEE MADE DEPOSIT OF RS. 8,94,000/- WITH DISTRI CT EXCISE OFFICER, MEERUT FOR ALLOTMENT OF COUNTRY LIQUOR SHOP. THE AO ASKED THE ASSESSEE TO EXPLAIN THE SOURCE OF THIS DEPOSIT. THE ASSESSEE STATED THAT RS . 75,000/- WAS HER OWN CAPITAL CONTRIBUTION WHILE THE REST WAS CONTRIBUTED BY SEVEN DIFFERENT INDIVIDUALS. THE ASSESSEE DID NOT FILE COPIES OF ACKNOWLEDGEMENT S OF THE RETURNS OF THE CREDITORS FOR A.Y 2002-03. COPIES OF CAPITAL ACCOUN TS AND BANK ACCOUNTS OF THE CREDITORS WERE ALSO NOT SUBMITTED. THE AO AFTER MAK ING DETAILED DISCUSSION IN THE ASSESSMENT ORDER CAME TO A CONCLUSION THAT CREDITS TO THE EXTENT OF RS. 7,30,000/- ARE NOT PROPERLY EXPLAINED. HE THEREFORE ADDED THE SAME TO THE TOTAL INCOME OF THE ASSESSEE ULS 68 OF THE IT ACT V IDE HIS ORDER DATED 20.3.2006. 3. AGAINST THE ABOVE ASSESSMENT ORDER, ASSESSEE APP EALED BEFORE THE LD. CIT(A), WHO VIDE IMPUGNED ORDER DATED 29.1.2015 DIS MISSED THE APPEAL OF THE ASSESSEE. ITA NO.872/DEL/2015 3 4. LD. COUNSEL FOR THE ASSESSEE HAS STATED THAT AS SESSEE HAD DEPOSITED THE AMOUNT OF RS. 8,94,000/- WITH THE DISTRICT EXCISE O FFICER, MEERUT AS THE LICENSE FEE FOR COUNTRY MADE LIQUOR SHOP. THE AMOUNTS WER E COLLECTED FROM THE RESPECTIVE PARTNERS. THE AMOUNTS HAVE BEEN INCORPO RATED IN THE BOOKS OF M/S MADHU & OTHERS ON 1 ST DAY OF APRIL, 2002, RS. 7,50,000/- HAVE BEEN DEPOSITED BY SEVEN PERSONS AND RS. 2,88,000/- BY SM T. SNEH LATA. THE TOTAL AMOUNT THUS BECOMES RS. 10,38,000/- AND OUT OF THIS AMOUNT RS. 8,94,000/- HAVE BEEN DEPOSITED WITH THE AUTHORITY. THE PARTN ERS ARE REGULAR ASSESSEE AND HAVE DEPOSITED THE RETURNS OF INCOME TAX WITH THE R ESPECTIVE WARDS. THE COPIES THEREOF AND NECESSARY CONFIRMATIONS ARE AVAILABLE O N RECORD. HE FURTHER SUBMITTED THAT THE CREDIT AMOUNT DEPOSITED BY THE A SSESSEE AS LICENSE FEES FULLY EXPLAINED TO THE AO, THEREFORE, ONUS OF THE ASSESSE E FULLY DISCHARGED. HE FURTHER STATED THAT THE AO NEITHER ISSUED ANY NOTICE U/S. 1 33(6), NOR ISSUED ANY SUMMONS TO THE DEPOSITORS. HENCE, THE ACTION OF THE AO WAS FULLY UNJUSTIFIED AND DESERVE TO BE QUASHED. TO SUPPORT OF HIS AFORESAID ARGUMENT S, HE REFERRED THE FOLLOWING CASE LAWS:- I) GL FOODS VS. INCOME TAX OFFICER, RANGE-IV(4), [2 011]16 TAXMANN.COM 271 (LUCKNOW) II) MAHAVEER EXPORTS VS. INCOME TAX OFFICER, WARD 7 (2), JAIPUR, [2014] 50 TAXMANN.COM 336 (JAIPUR TRIB) TM IIII) COMMISSIONER OF INCOME TAX VS. M. VENKATESHWA RA RAO, [2015] 57 TAXMANN.COM 373 (ANDHRA PRADESH AND TELANGANA) IV) ANIL RICE MILL VS. CIT (2005) 149 TAXMAN. 313 ( ALL.) V) CIT VS. BHITAL DAS MODI (2005) 276 ITR 517 (ALL. ) VI) KHANDELWAL CONSTRUCTIONS VS. CIT (1997) 227 ITR 900 (GUJ) VII) CIT VS. P. V. BHOOPATHY (2006) 283 ITR 365 (MA D.) VIII) ASST. CIT VS. KUMAR ICE (1999) 237 ITR (AT) 1 17 (PAT). ITA NO.872/DEL/2015 4 IX) CIT VS. REAL TIME MARKETING P LTD. (2008) 306 I TR 35 (DEL) X) ASSTT. CIT VS. RADHEY SHYAM BANSAL (2000) 112 TA XMAN 246 (ITAT) RAJKOT XI) AMI CHAND JAIN VS. DCIT (2002) 120 TAXMAN-29 (I TAT-DELHI) XII) CIT VS. HEERALAL CHAGANLAL (2002) ITR 281 (RAJ ) XIII) KHOPADE KISANRAO MANIKRAO VS. ACIT (2000) 69 TTJ 135 (ITAT PUNE) TM XIV) CIT VS. RAJEEV SHUKLA (2008) 296 ITR 743 (MP) 5. ON THE CONTRARY, LD. DR RELIED UPON THE ORDERS O F THE AUTHORITIES BELOW AND STATED THAT LD. CIT(A) HAS PASSED A WELL REASO NED ORDER, WHICH DOES NOT NEED ANY INTERFERENCE, HENCE THE SAME MAY BE UPHEL D. 6. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE R ECORDS, ESPECIALLY THE ORDERS OF THE AUTHORITIES BELOW AND THE SUBMISSIONS MADE BY THE LD. COUNSEL AND THE CASE LAWS RELIED UPON BY HIM. FOR THE SAKE OF C ONVENIENCE, WE ARE REPRODUCING THE RELEVANT FINDINGS VIDE PARA NO. 4.3 OF THE IMPUGNED ORDER PASSED BY THE LD. CIT(A) AS UNDER:- 4.3 I HAVE CONSIDERED THE RIVAL SUBMISSIONS AS ABO VE. THE AO HAS CLEARLY DEMONSTRATED IN HIS ORDER THAT THE TRANSACTION LEAD ING TO THE CREDIT IN QUESTION IS NOT ESTABLISHED TO BE GENUINE BECAUSE T HE CREDITORS WERE PERSONS OF SMALL MEANS AND IN MANY CASES, COPY OF B ANK STATEMENT FROM WHICH THIS TRANSACTION WAS MADE WAS NOT SUBMITTED. THE AO HAS DISCUSSED IN DETAIL BY ANALYZING THE TRANSACTIONS W ITH ALL THE 7 CREDITORS. ON THE OTHER HAND, THE AR HAS NOT BEEN ABLE TO ESTA BLISH THE CREDITWORTHINESS OF DEPOSITORS AS WELL AS THE GENUI NENESS OF TRANSACTIONS. FURTHER THE CASE LAWS CITED BY THE AR ARE NOT OF AN Y HELP BECAUSE THE FACT OF EACH CASE WHICH HAS BEEN CITED IS UNIQUE TO ITSE LF. THE CREDITWORTHINESS OF THE CREDITORS AND GENUINENESS OF TRANSACTION IS A MATTER OF FACT WHICH IS ITA NO.872/DEL/2015 5 TO BE DECIDED ON THE FACTS AND CIRCUMSTANCES UNIQUE TO THIS CASE. CONSIDERING THE ABOVE FACTS, I HAVE COME A CONCLUSI ON THAT THIS ADDITION HAS BEEN RIGHTLY MADE BY THE AO AND THE SAME IS THE REFORE, CONFIRMED. GROUNDS OF APPEAL NOS. 1 & 2 ARE DISMISSED. 6.1 IN THE BACKGROUND OF THE AFORESAID DISCUSSION S, WE ARE OF THE CONSIDERED VIEW THAT THE ASSESSEE HAS RECEIVED UNSECURED LOANS FROM THE PERSONS WHO ARE RELATED TO ASSESSEE. TO DO THE BUSINESS THE AMOUNTS HAVE BEEN RECEIVED FROM THEM. SH. HARNAM DASS, SH. RAM DASS AND SH. LAL SIN GH ARE THREE BROTHER WHEREAS SH. RAM DASS IS FATHER-IN-LAW OF THE ASSESS SEE AND THE OTHER TWO ARE BROTHERS OF FATHER-IN-LAW. THE DEPOSITORS HAD SOLD THEIR AGRICULTURAL LAND AND HAD INVESTED WITH THE ASSESSEE, THE NECESSARY CONFI RMATIONS HAVE BEEN FILED WHICH ARE PLACED ON RECORD. WE ALSO FIND CONSIDER ABLE COGENCY IN THE SUBMISSIONS OF THE LD. COUNSEL FOR THE ASSESSEE THA T THE ASSESSEE HAS DEPOSITED THE AMOUNT OF RS. 8,94,000/- WITH THE DISTRICT EXCI SE OFFICER, MEERUT AS THE LICENSE FEE FOR COUNTRY MADE LIQUOR SHOP. THE AMOU NTS WERE COLLECTED FROM THE RESPECTIVE PARTNERS. THE AMOUNTS HAVE BEEN INCORPO RATED IN THE BOOKS OF M/S MADHU & OTHERS ON 1 ST DAY OF APRIL, 2002, RS. 7,50,000/- HAVE BEEN DEPOSITED BY SEVEN PERSONS AND RS. 2,88,000/- BY SM T. SNEH LATA. THE TOTAL AMOUNT THUS BECOMES RS. 10,38,000/- AND OUT OF THIS AMOUNT RS. 8,94,000/- HAVE BEEN DEPOSITED WITH THE AUTHORITY. THE PARTN ERS ARE REGULAR ASSESSEE AND HAVE DEPOSITED THE RETURNS OF INCOME TAX WITH THE R ESPECTIVE WARDS. THE COPIES THEREOF AND NECESSARY CONFIRMATIONS ARE AVAILABLE O N RECORD. WE FURTHER FIND THAT THE CREDIT AMOUNT DEPOSITED BY THE ASSESSEE AS LICENSE FEES WAS FULLY EXPLAINED TO THE AO, THEREFORE, ONUS OF THE ASSESSE E FULLY DISCHARGED. WE ALSO NOTE THAT THE AO NEITHER ISSUED ANY NOTICE U/S. 133 (6), NOR ISSUED ANY SUMMONS TO THE DEPOSITORS. HENCE, IN OUR CONSIDERED OPINIO N, THE ACTION OF THE AO WAS NOT JUSTIFIED. WE HAVE THOROUGHLY GONE THROUGH THE CASE LAWS CITED BY THE LD. ITA NO.872/DEL/2015 6 COUNSEL FOR THE ASSESSEE AND FIND THAT IN ONE OF T HE CASES THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF ANIL RICE MILL VS. CIT (2005) 149- TAXMAN-313(ALLAHABAD) HAS DECIDED THAT IN THE CASE OF CASH CREDITS THE ASSESSEE HAS TO PROVE THREE THINGS:- - IDENTITY OF THE CREDITOR; - CAPACITY OF SUCH CREDITOR TO ADVANCE MONEY; AND - GENUINENESS OF THE TRANSACTIONS. THE HONBLE COURT HAS HELD THAT IF ALL THESE ARE PR OVED THE BURDEN SHIFTS TO THE REVENUE TO PROVE THAT THE AMOUNTS BELONGED TO T HE ASSESSEE. 7. RESPECTFULLY FOLLOWING THE ABOVE PRECEDENT, WE DELETE THE ADDITION OF RS. 7,30,000/- MADE ON ACCOUNT DEPOSITS U/S. 68 OF THE I.T. ACT AND ACCORDINGLY, QUASH THE ORDERS OF THE AUTHORITIES BELOW AND DECID E THE APPEAL OF THE ASSESSEE IN HER FAVOUR. 8. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE STANDS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 02/12/2015. S SS SD DD D/ // /- -- - S SS SD DD D/ // /- -- - [ [[ [PRASHANT MAHARISHI PRASHANT MAHARISHI PRASHANT MAHARISHI PRASHANT MAHARISHI] ]] ] [H.S. SIDHU] [H.S. SIDHU] [H.S. SIDHU] [H.S. SIDHU] ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER DATE: DATE: DATE: DATE: 0 00 02 22 2- -- -1 11 12 22 2- -- -2015 2015 2015 2015 SRBHATNAGAR SRBHATNAGAR SRBHATNAGAR SRBHATNAGAR COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: - -- - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR