Horjit Singh, Chandigarh V. ITO, Chandigarh

ITA 919/CHANDI/2011

• Counselvise Citation: 91921514 RSA 2011
• Duration Of Justice: 2 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-11-2011
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2007-2008
• Appeal Filed On: 16-09-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: AKILESH GUPTA
• Assessee Lawyers: A K SETHI
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES SMD CHANDIGARH BEFORE SHRI H.L.KARWA, HON'BLE, VICE PRESIDENT AND SHRI D.K.SRIVASTAVA, ACCOUNTANT MEMBER ITA NO. 919/CHD/2011 ASSESSMENT YEAR: 2007-08 SHRI HARJIT SINGH, VS THE ITO, WARD 3(2), PROP. M/S J.B. TEXTILES, CHANDIGARH CHANDIGARH PAN NO. AFOPS0835B (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI A.K. SETHI RESPONDENT BY : SHRI AKILESH GUPTA DATE OF HEARING : 23.11.2011 DATE OF PRONOUNCEMENT : 25.11.2011 ORDER PER H.L.KARWA, VP THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER OF CIT(A), CHANDIGARH DATED 8.7.2011 RELATING TO ASSES SMENT YEAR 2007-08. 2. IN THIS APPEAL, THE ASSESSEE HAS CHALLENGED THE ACTION OF CIT(A) IN CONFIRMING THE ADDITION OF RS. ONE LAC MADE U/S 68 OF THE INCOME TAX ACT. 3. DURING THE YEAR UNDER CONSIDERATION, THE ASSESSE E HAS RAISED A LOAN OF RS. 1 LAC FORM HIS BROTHER SHRI DAVINDER SINGH. THE ASSESSING OFFICER REQUIRED THE ASSESSEE TO FILE EVIDENCE REGARDING RA ISING OF LOAN FROM SHRI 2 DAVINDER SINGH AND ALSO ASKED TO FURNISH HIS COPY O F THE BANK ACCOUNT. PERUSAL OF THE BANK ACCOUNT REVEALED THAT RS. 1 LAC WAS DEPOSITED ON 13.2.2007 AND THE CHEQUE WAS ISSUED ON 20.2.2007. THE ASSESSING OFFICER REQUIRED THE ASSESSEE TO EXPLAIN THE CAPACITY OF TH E CREDITOR TO ADVANCE THE MONEY. THE ASSESSEE COULD NOT FURNISH EVIDENCE REG ARDING PAYING CAPACITY OF SHRI DAVINDER SINGH. THE ASSESSING OFF ICER ALSO ASKED THE BANK TO FILE THE DETAILS OF DEPOSIT OF RS. 1 LAC. IN REPLY DATED 18.12.2009, HDFC BANK INTIMATED THAT THE SOURCE OF THE DEPOSIT IS NOT KNOWN. SINCE THE ASSESSEE FAILED TO PROVE THE CAPACITY OF THE CR EDITOR SHRI DAVINDER SINGH TO ADVANCE MONEY, SO THE ADDITION OF RS. 1 LA C WAS MADE TO THE TOTAL INCOME OF THE ASSESSEE. 4. ON APPEAL, THE CIT(A) CONFIRMED THE ADDITION OBS ERVING AS UNDER:- 2.3 I HAVE CONSIDERED THE FACTS OF THE CASE, THE APPELLANT COULD NOT EXPLAIN THE PAYING CAPACITY OF SHRI DAVINDER SINGH IN THE ASSESSMENT PROCEEDINGS AND NO EVIDENCE HAS BEEN PRODUCED BEFORE ME ALSO IN THE APPELLATE PROCEEDINGS TO PROVE THE PAYING CAPACITY AND GENUINENESS OF THE TRANSACTIONS. HENCE, THE ADDITION MADE OF RS. 1.00 LAC OF UNSECURED LOAN IS CONFIRMED. GROUNDS OF APPEAL NO.1 & 3 ARE DISMISSED. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS. SHRI A.K. S ETHI, LD. COUNSEL FOR THE ASSESSEE VEHEMENTLY ARGUED THAT ADDITION OF RS. 1 LAC MADE BY THE ASSESSING OFFICER IS ABSOLUTELY WRONG AND UNJUSTIFI ED. ACCORDING TO HIM, THE ASSESSEE HAS TAKEN LOAN FROM HIS BROTHER SHRI D AVINDER SINGH BY CHEQUE WHO HAD BEEN ALSO INCOME TAX ASSESSEE. HE F URTHER SUBMITTED THAT 3 THE AMOUNT IN QUESTION WAS RETURNED TO SHRI DAVINDE R SINGH BY CROSSED CHEQUE. HE, THEREFORE, SUBMITTED THAT ADDITION OF RS. 1 LAC CONFIRMED BY THE CIT(A) MAY BE DELETED. IT IS TRITE LAW THAT U /S 68 OF THE ACT, ONUS IS ON THE ASSESSEE TO EXPLAIN THE NATURE AND SOURCE OF CASH CREDITS, WHETHER THEY STANDS IN THE ASSESSEES ACCOUNT OR IN THE AC COUNT OF A THIRD PARTY. AT THE SAME TIME IT IS ALSO WELL SETTLED THAST IN O RDER TO DISCHARGE ONUS, THE ASSESSEE MUST PROVE THE FOLLOWING: I) IDENTITY OF THE CREDITOR, II) THE CAPACITY OF THE CREDITOR TO ADVANCE MONEY; III) THE GENUINENESS OF THE TRANSACTION 6. IN THE INSTANT CASE, BOTH THE AUTHORITIES BELOW HAVE CATEGORICALLY STATED THAT THE ASSESSEE HAS FAILED TO PROVE THE PA YING CAPACITY AND GENUINENESS OF THE TRANSACTION. IN OUR VIEW, MERE FURNISHING OF PARTICULARS OR THE FACT OF PAYMENT BY AN ACCOUNT PA YEE CHEQUE OR MERE FILING OF A CONFIRMATION LETTER BY THE CREDITOR BY ITSELF IS NOT ENOUGH TO SHIFT THE ONUS ON THE DEPARTMENT. AT THIS STAGE ALS O, THE ASSESSEE HAS NOT FURNISHED ANY EVIDENCE WITH REGARD TO THE CAPACITY OF THE CREDITOR TO ADVANCE MONEY; AND THE GENUINENESS OF THE TRANSACTI ON. SHIR A.K. SETHI, LD. COUNSEL FOR THE ASSESSEE CLAIMED BEFORE US THAT LATE SHRI DAVINDER SINGH WAS AN INCOME TAX ASSESSEE. HOWEVER, THERE IS NO MATERIAL ON RECORD TO SUPPORT THE ABOVE CONTENTION. THE AMOUNT OF RS. 1 LAC CANNOT BE CONSIDERED AS PETTY AMOUNT AND, THEREFORE, THE O NUS WAS ON THE ASSESSEE TO PROVE THE CAPACITY OF THE CREDITOR TO A DVANCE MONEY TO THE ASSESSEE. EVEN THE ASSESSEE HAD FAILED TO PROVE TH E GENUINENESS OF THE TRANSACTION. CONSIDERING THE FACTS AND CIRCUMSTANC ES OF THE PRESENT CASE, 4 WE DO NOT SEE ANY MERIT IN THIS APPEAL. ACCORDING LY, THE SAME IS DISMISSED. 7. IN THE RESULT, APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 25 TH DAY OF NOVEMBER, 2011. SD/- SD/- (D.K.SRIVASTAVA) (H.L.KARWA) ACCOUNTANT MEMBER VICE PRESIDENT DATED : 25 TH NOVEMBER, 2011 RKK COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR TRUE COPY BY ORDER ASSISTANT REGISTRAR