Varinder Kumar, Dhuri V. ITO, Ward IV(4), Malerkotla

ITA 971/CHANDI/2017

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 4536 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 11 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-05-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 13-06-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANJIT SINGH
• Assessee Lawyers: AMAN BANSAL
• Keywords: Gift; Onus to prove
• Section: 271(1)(c); 131

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BE NCH B, CHANDIGARH !, ' # $ , . .. . & , '( # BEFORE: SMT. DIVA SINGH, JM & DR. B.R.R. KUMAR , A M ./ ITA NOS. 971 & 356/CHD/ 2017 & 18 ASSESSMENT YEARS : 2011-12 VARINDER KUMAR M/S MAHAVEER TRADING CO. SHIVPURI MOHALLA, DHURI 148024 THE ITO WARD IV(4) MALERKOTLA ./ PAN NO: AEMPK7811D / APPELLANT / RESPONDENT / ASSESSEE BY : SHRI. AMAN BANSAL ! / REVENUE BY : SHRI. MANJIT SINGH ' !# $/ DATE OF HEARING : 28/05/2019 %&'()* $/ DATE OF PRONOUNCEMENT : 30/05/2019 ')/ ORDER PER DR. B.R.R. KUMAR, A.M: BOTH THE ABOVE APPEALS HAVE BEEN FILED BY THE ASSES SEE AGAINST THE ORDER OF THE LD. CIT(A)-2, LUDHIANA DT.02/03/2016. ASSESSEE HAS RAISED THE FOLLOWING GROUNDS IN ITA N O. 971/CHD/2017 FOR A.Y. 2011-12 : 1. THAT THE ORDER PASSED BY THE LD. INCOME TAX OFFI CER, WARD IV(4), MALERKOTLA AND CONFIRMED BY THE CIT (APPEALS-2), LU DHIANA IS ILLEGAL, UNJUST AND UNCALLED FOR. 2. THAT AN ADDITION MADE WORTH RS. 3,00,000/- U/S 6 8 OF THE INCOME TAX ACT 1961 ON ACCOUNT OF CREDIT IN THE NAM E OF SH. ASHOK KUMAR BY THE LD. INCOME TAX OFFICER AND CONFIRMED B Y THE CIT (APPEALS-2) LUDHIANA IS ILLEGAL, UNJUST AND UNCALLE D FOR. 3. THAT AN ADDITION MADE WORTH RS. 65000/- U/S 68 O F THE INCOME TAX ACT 1961 ON ACCOUNT OF CREDIT IN THE NAME OF SM T. AMISHA GARG BY THE LD. INCOME TAX OFFICER AND CONFIRMED BY THE CIT (APPEALS-2) LUDHIANA IS ILLEGAL, UNJUST AND UNCALLED FOR. ASSESSEE HAS RAISED THE FOLLOWING GROUNDS IN ITA N O. 356/CHD/2018 FOR A.Y. 2011- 12 : 1. THAT THE PENALTY ORDER PASSED BY THE LD. INCOME TAX OFFICER, WARD IV(4), MALERKOTLA AND CONFIRMED BY THE CIT(A)-2, LU DHIANA IS ILLEGAL, UNJUST AND UNCALLED FOR. 2 2. THAT THE PENALTY IMPOSED WORTH RS. 83090/- AND C ONFIRMED BY THE CIT(A)-2 LUDHIANA IS ILLEGAL, UNJUST AND UNCALLED F OR. 2. BRIEF FACTS AS TAKEN FROM THE RECORD ARE THAT TH E ASSESSEE FILED HIS RETURN OF INCOME FOR THE A.Y. 2011 -12 ON 26.09.2011 SHOWN IN COME OF RS. 3,55,430/-. THE ASSESSEE WAS ENGAGED IN THE BUSINESS OF WHOLESALE T RADING OF SUGAR & COMMISSION AGENT OF SUGAR AND GHEE DURING THE PERIO D UNDER CONSIDERATION. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASS ESSING OFFICER OBSERVED THAT THE ASSESSEE HAD RECEIVED UNSECURED LOANS AMOU NTING TO RS. 3,00,000/- FROM SH. ASHOK KUMAR AND RS. 1,50,000/- FROM SMT. A MISHA GARG. THE ASSESSEE WAS ASKED TO PROVE THE IDENTITY, CREDITWORTHINESS A ND GENUINENESS OF THE TRANSACTION FROM WHOM THE LOAN WAS TAKEN. WITH REGA RD TO SH. ASHOK KUMAR, THE ASSESSEE SUBMITTED THE PAYMENT HAD BEEN MADE OUT OF ACCOUNT PAYEE CHEQUE. WITH REGARD SMT. AMISHA GARG, THE ASSESSING OFFICER OBSERVED THAT SMT. AMISHA GARG RECEIVED GIFT IN CASH OF RS. 45,000/- A ND RS. 20,000/- FROM SH. AMIT GARG AND SH. YOGESH GARG RESPECTIVELY AND DEPOSITED TO HER BANK ACCOUNT AND FURTHER GIVEN TO THE ASSESSEE BY ACCOUNT PAYEE CHEQUE ON THE SAME DAY. THE ASSESSING OFFICER SUMMONED SMT. AMISHA GARG TO APPEAR AND ESTABLISH THE GENUINESS OF THE CASH CREDIT BUT FAILED TO APPEAR. THEREFORE, IT WAS HELD THE GENUINESS OF THE CREDITOR HAS NOT BEEN PROVEN BY TH E ASSESSEE. THE ASSESSING OFFICER WAS OF VIEW THAT THE ASSESSEE MERELY FILED THAT THE PAYMENT HAD BEEN MADE BY ACCOUNT PAYEE CHEQUE COULD NOT BE ESTABLISH THE GENUINENESS OF CASH CREDIT. THEREFORE, THE ASSESSING OFFICER MADE ADDITION OF RS. 3,00,000/- RECEIVED FROM SH. ASHOK KUMAR AND RS. 65,000/- RECE IVED FROM SMT. AMISHA GARG. 3. LD. CIT(A) AFTER CONSIDERING THE ASSESSEES SUBM ISSION HELD THAT THE ASSESSEE HAS COMPLETELY FAILED, EVEN AFTER AVAILING SO MANY OPPORTUNITIES. FOR ESTABLISHING THE GENUINENESS OF THE CREDITS THE ASS ESSEE IS REQUIRED TO PROVE THE FOLLOWING INGREDIENTS:- I) PROOF OF IDENTITY OF CREDITORS. II) CAPACITY OF CREDITORS TO ADVANCE MONEY. III) GENUINENESS OF THE TRANSACTIONS. 4. IT WAS HELD THAT THE ASSESSEE HAS FAILED TO EXPL AIN THE SOURCE OF CASH DEPOSITS IN THE BANKS ACCOUNTS AND IT IS HIGHLY IMP ROBABLE THAT THE ASSESSEE IS 3 NOT KNOWING THE NAMES AND ADDRESSES OF THE PERSONS WITH WHOM HE IS CLAIMING REGULAR BUSINESS TRANSACTIONS. IN THE NORMAL COURSE , THE DEPARTMENT WOULD HAVE MADE ENQUIRIES FROM THOSE PERSONS FROM WHOM ASSESSE E HAS CLAIMED TO HAVE RECEIVED CASH AND TO WHOM ASSESSEE HAS CLAIMED TO H AVE PAID THE CHEQUES. BY NOT DISCLOSING THE COMPLETE PARTICULARS OF THOSE PERSONS, IT COULD NOT BE VERIFIED WHETHER THESE ARE REALLY BUSINESS TRANSACT IONS OR THE CASH CREDIT INTRODUCED BY THE ASSESSEE UNDER THE GARB OF BUSINE SS TRANSACTIONS. 5. LD. CIT(A) ON GOING THROUGH THE FACTS OF THE CAS E HELD THAT REVENUE WAS NOT IN AGREEMENT WITH THE CONTENTION OF ASSESSEE, A S ASSESSEE WAS FAILED TO DISCHARGE ITS ONUS TO PROVE THE UNSECURED LOANS AT THE TIME OF ASSESSMENT PROCEEDINGS. LD. CIT(A) ALSO HELD THAT FURNISHING O F PAN AND CONFIRMATION AND PRODUCING BANK STATEMENT IS NOT ENOUGH. IT IS EQUAL LY IMPORTANT TO PROVE CREDIT WORTHINESS OF THESE LOAN DEPOSITORS. THE ASSESSEE H AD NOT PRODUCED LOAN DEPOSITORS AND ALSO FAILED TO PROVE CREDIT WORTHINE SS OF LOAN DEPOSITORS. 6. DURING THE HEARING BEFORE US, IT WAS ARGUED THAT THE ASSESSEE HAS FILED PHOTOCOPY OF THE BANK STATEMENT, COMPLETE DETAILS O F THE BANK STATEMENT, ADDRESS, PAN AND THE JURISDICTION OF THE ASSESSING OFFICER OF THE CREDITORS NAMELY SHRI. ASHOK KUMAR AND SMT. AMISHA GARG HAVE BEFORE THE ASSESSING OFFICER. FURTHER THE COPY OF THE ITR ACKNOWLEDGEMENT HAVE AL SO BEEN PRODUCED TO PROVE THE IDENTITY, GENUINENESS AND CREDIT WORTHINE SS OF THE CREDITORS. THE ASSESSING OFFICER HAS ALSO ISSUED SUMMONS UNDER SEC TION 131 TO SMT. AMISHA GARG FOR PERSONAL APPEARANCE WHICH THE ASSESSING OF FICER HAS NOT TAKEN TO LOGICAL END. IT WAS FURTHER ARGUED THAT SMT. AMISHA GARG HAS ALSO RECEIVED GIFT OF RS. 20,000/- FROM ONE SHRI. YOGESH GARG AND RS. 45,000/- FROM SHRI. AMIT GARG WHICH HAVE BEEN DULY BROUGHT TO THE NOTICE OF THE A SSESSING OFFICER. REGARDING THE CREDITWORTHINESS OF SHRI. ASHOK KUMAR THE CASH FLOW ACCOUNT HAS BEEN DULY SUBMITTED BEFORE ASSESSING OFFICER. THE ASSESSING O FFICER HAS TOTALLY DISREGARDED THE SUBMISSIONS AND THE AUTHORITIES HAVE HELD THAT THE TRANSACTIONS HAVE NOT BEEN GENUINE WITHOUT ASSIGNING ANY TANGIBLE REASON . HE ARGUED THAT THE ADDITION IS OUGHT TO HAVE BEEN DELETED. 7. LD. DR PLACED HEAVY RELIANCE ON THE ORDER OF THE LD. CIT(A) AND VEHEMENTLY ARGUED THAT THE ASSESSEE HAS FAILED TO P ROVE THE CREDITWORTHINESS OF 4 THE LOAN PARTIES AS THESE CREDITORS HAVE LOW RETURN ED INCOME WHICH DOES NOT ANY WAY SIGNIFY THE CREDIT WORTHINESS OF THESE PART IES. 8. WE HAVE GONE THROUGH THE RECORD AVAILABLE WITH U S AND FIND THAT THE ASSESSEE HAS SUBMITTED THE DOCUMENTS FROM HIS SIDE TO PROVE THE IDENTITY, GENUINITY, AND CREDIT WORTHINESS OF THE CREDITORS. WHILE WE AFFIRM THAT THE CHEQUE PAYMENT CANNOT BE TAKEN AS SACROSANCT, AT TH E SAME TIME WE FIND THAT THE ASSESSING OFFICER HAS NOT BROUGHT ANYTHING CONT RA TO REBUT THE EVIDENCES GIVEN BY THE ASSESSEE. THE SUMMONS ISSUED HAVE ALSO NOT BEEN CONCLUDED TO A LOGICAL END. ALL THE PARTIES BELONGS TO THE SAME AR EA AND NO ENQUIRIES FROM THE PARTIES HAVE BEEN UNDERTAKEN BY THE REVENUE. IT IS AN ESTABLISHED PRINCIPLE THAT ONCE THE ASSESSEE DISCHARGED HIS BURDEN UNDER SECTI ON 106 OF THE EVIDENCE ACT, THEN THE BURDEN SHIFTS TO THE ASSESSING OFFICE R TO PROVE THE CONTRARY ON THE BASIS OF EVIDENCES, MATERIAL, STATEMENTS, PERSONAL EXAMINATION AND ALIKES. HOWEVER WE FIND THAT THE ASSESSING OFFICER HELD THA T THESE TRANSACTIONS ARE NOT GENUINE WITHOUT BRINGING SUFFICIENT MATERIAL TO PRO VE CONTRA WHICH CANNOT BE ACCEPTED. HENCE WE HEREBY DIRECT THE ADDITION MADE BE DELETED. 9. REGARDING THE ITA NO. 356/CHD/2018, SINCE THE QU ANTUM ADDITION HAS BEEN ORDERED TO BE DELETED, THE PENALTY LEVIED UNDE R SECTION 271(1)(C) DO NOT SURVIVE. 10. AS A RESULT, BOTH THE APPEALS OF THE ASSESSEE A RE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- ! . .. . & , (DIVA SINGH) (DR. B.R.R. KUMAR) ' #/ JUDICIAL MEMBER '( #/ ACCOUNTANT MEMBER AG DATE: 30/05/2019 &+ ,- .-)/ COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. ' // CIT 4. ' / ()/ THE CIT(A) 5. -!23 4, $ 4*, 67839/ DR, ITAT, CHANDIGARH 6. 38 :#/ GUARD FILE