ITO, Chandigarh V. Mr. Satinder Kumar Jain, Chandigarh

ITA 974/CHANDI/2011

• Counselvise Citation: 97421514 RSA 2011
• Duration Of Justice: 7 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-05-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 02-05-2012
• Assessment Year: 2008-2009
• Appeal Filed On: 07-10-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained cash credit
• Section: 68

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. 974/CHD/2011 ASSESSMENT YEAR: 2008-09 ITO, WARD 3(3), V MR. SATINDER KUMAR JAIN CHANDIGARH. H.NO. 2726, SECTOR 22-C, CHANDIGARH. PAN: AAQPJ-9911R (APPELLANT) (RESPONDENT) APPELLANT BY : SMT. JAISHREE SHARMA RESPONDENT SHRI AJAY KUMAR JAIN DATE OF HEARING : 02.05.2012 DATE OF PRONOUNCEMENT : 15.05.2012 ORDER PER MEHAR SINGH, AM THE PRESENT APPEAL FILED BY THE REVENUE IS DIRECTED AGAINST THE ORDER DATED 28.07.2011 PASSED BY THE LD . CIT(A) U/S 250(6) OF THE INCOME-TAX ACT,1961 (IN SHORT 'TH E ACT'). 2. IN THIS APPEAL, THE REVENUE HAS RAISED THE FOLLO WING GROUNDS OF APPEAL: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED CIT (APPEAL) HAS ERRED IN LAW IN DELETING T HE ADDITION OF RS. 22,50,000/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED CASH CREDIT U/S 68 OF INCOME TAX ACT , 1961, AS THE ASSESSEE FAILED TO PRODUCE THE DEBTORS/ PARTIES FROM WHOM THE SAID AMOUNT WAS CLAIMED TO HAVE BEEN RECEIVED B EFORE THE A.O. DURING ASSESSMENT PROCEEDINGS. 2 2. IT IS PRAYED THAT THE ORDER OF THE LD. CIT(A) B E CANCELLED AND THAT OF THE ASSESSING OFFICER MAY BE RESTORED. 3. THE APPELLANT CRAVES TO ADD OR AMEND ANY GROUNDS OF APPEAL BEFORE THE APPEAL IS HEARD OR DISPOSED OFF. 3. IN THE SOLE SUBSTANTIVE GROUND OF APPEAL RAISED BY THE REVENUE, IT IS CONTENDED THAT CIT(A) ERRED IN LAW I N DELETING ADDITION OF RS.22,50,000/- MADE BY THE AO U/S 68 OF THE ACT. 4. IN THE COURSE OF PRESENT APPELLATE PROCEEDINGS, LD. 'DR' PLACED RELIANCE ON THE ORDER PASSED BY THE AO. LD. 'DR' REFERRED TO PAGE 9 OF THE CIT(A)S ORDER AS ALSO PA GE 12 OF THE ASSESSMENT ORDER. LD. 'AR', ON THE OTHER HAND, PLA CED RELIANCE ON THE ORDER OF THE CIT(A) AND REFERRED TO VARIOUS PAGES OF THE PAPER BOOK, DEMONSTRATING THE TRACK OF THE ENTRIES, WITH A VIEW TO ESTABLISH THE NATURE AND SO URCE OF SUCH CREDITS. 5. WE HAVE CAREFULLY PERUSED THE RIVAL SUBMISSIONS, FACTS OF THE CASE AND FOUND THAT LD. CIT(A), HAS PASSED D ETAILED AND WELL-REASONED ORDER, DEMONSTRATING BY WAY OF GR APHICAL CHART, THE FLOW OF SUCH ENTRIES AND ULTIMATE DESTIN ATION. IN THE FINAL ANALYSIS, LD. CIT(A), DELETED THE IMPUGNE D ADDITIONS. 6. AS THE LD.CIT(A), BY WAY OF A GRAPHIC FLOW CHART , SUCCESSFULLY EXPLAINED THE NATURE AND SOURCE OF CAS H CREDITS IN THE CASE OF THE PRESENT APPELLANT ASSESSEE, WE D O NOT FIND ANY VALID GROUND TO INTERFERE IN HIS FINDINGS. THER EFORE, FINDINGS OF THE LD. CIT(A) ARE UPHELD. HOWEVER, FO R THE SAKE 3 OF READY REFERENCE AND PROPER APPRECIATION OF SUCH FINDINGS, SAME ARE REPRODUCED HEREUNDER: 2.3 I HAVE CONSIDERED THE SUBMISSION OF THE LD. CO UNSEL FOR THE APPELLANT. THE APPELLANT HAD USED THE BANKING FA CILITIES FOR MAKING TEMPORARY ARRANGEMENT OF FUNDS. THE ADDITION IN THIS CASE HAS BEEN MADE MERELY BECAUSE THE DEBTORS OF TH E FIRMS COULD NOT BE PRODUCED AND CASH TRANSFERRED FROM VARIO US FIRMS TO THE APPELLANT'S ACCOUNT WAS NOT VERIFIABLE. IN MY CONSIDERED VIEW, THIS FINDING OF THE ASSESSING OFFICER SHOULD NOT HAVE BEEN MADE THE BASIS FOR ADDITION BECAUSE THE FIVE DEBTOR S WHOM THE ASSESSING OFFICER WANTED TO BE PRODUCED, WERE D EBTORS OF M/S JAI JWALA FLOUR MILLS, WHICH WAS NOT INVOLVED IN ARRAN GING THE TEMPORARY FUNDS AND NO DISCOUNTING OF CHEQUES WAS D ONE IN THIS FIRM. FURTHER, THERE WAS NO BUSINESS TRANSACTION BET WEEN M/S JAI JWALA FLOUR MILLS AND M/S ARIHANT AGENCIES/ M/S S AHU TRADERS AND SO NO ADVERSE INFERENCE COULD HAVE BEEN DRAWN DUE TO NON PRODUCTION OF THE DEBTORS. THE APPELLANT WAS NOT ABLE TO PERSUADE THESE PARTIES DUE TO PAUCITY OF TI ME AND FEAR OF THE DEPARTMENT AND HAD PROVIDED THE ADDRESSES AN D IF THE ASSESSING OFFICER WANTED, HE COULD HAVE SUMMONED THES E PARTIES BUT EVEN THEN HE WOULD NOT HAVE BEEN ABLE TO TAKE A NY ADVERSE VIEW AFTER EXAMINATION OF THESE PARTIES BECAUSE THE SE WERE DEBTORS AND NOT CREDITORS. 2.3.1 THE APPELLANT IN THIS CASE HAD MADE USE OF BANK ING FACILITIES TO HIS ADVANTAGE BY ARRANGING FUNDS TEMPOR ARILY. HE USED TO ISSUE CHEQUES FROM HIS SAVINGS BANK ACCOUNT IN PUNJAB STATE CO-OPERATIVE BANK IN FAVOUR OF FIRMS WHICH HAD THEIR BANK ACCOUNTS IN STATE BANK OF PATIALA. THE CHEQUES WERE GOT DISCOUNTED BY FIRMS AND AFTER DISCOUNTING, THE MONEY W AS TRANSFERRED FROM THE FIRMS' ACCOUNTS TO THE SAVINGS B ANK ACCOUNT OF THE APPELLANT IN STATE BANK OF PATIALA ITSE LF FROM WHERE THE MONEY WAS WITHDRAWN AND DEPOSITED IN THE BANK ACCOUNT OF THE APPELLANT IN PUNJAB STATE CO-OPERATIVE BANK, BY WHICH TIME THE CHEQUE SENT BY THE BANK FROM FIRM'S A CCOUNT HAD ARRIVED FOR COLLECTION FROM THE ACCOUNT. THE SC HEME OF THIS 4 ARRANGEMENT IS DEPICTED BELOW ---------. 2.3.2 FROM THE ABOVE CHART AND WITHDRAWAL PATTERN IN THE BANK ACCOUNT, IT IS EVIDENT THAT THE APPELLANT WAS MAKING USE OF THE BANKING FACILITIES AS DEPICTED IN THE ABOVE FLOW CHAR T AND SO QUESTION OF ANY UNEXPLAINED CASH CREDIT IN THE CASE O F APPELLANT DUE TO DEPOSITS IN THE BANK ACCOUNT WILL NO T ARISE. 2.3.3 IN VIEW OF THE ABOVE, IT IS HELD THAT AS A PRUD ENT BUSINESSMAN, THE APPELLANT HAD MADE A TEMPORARY ARRANGEMENT OF FUNDS BY TAKING ADVANTAGES OF BANKIN G FACILITIES, WHICH IN TURN HELPED THE FIRMS TO GET ADE QUATE FUNDS FOR THEIR DAY TO DAY BUSINESS NEEDS. THE CASH WITHDRAWALS AND DEPOSITS ARE DULY RECONCILED. THERE IS NO UNEXPLAINED CREDIT AS SUCH AND THERE ARE NO DEPOSITS WHICH COULD BE TREATED AS UNEXPLAINED CASH CREDIT. HEN CE, THE ADDITION MADE BY THE ASSESSING OFFICER OF RS.22,50, 000/- IS DELETED AND GROUND OF APPEAL TAKEN BY THE APPELLANT ARE ALLOWED. 7. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. ORDER PRONOUNCED IN THE OPEN COURT ON 15 TH MAY,2012. SD/- SD/- (SUSHMA CHOWLA) (MEHAR SINGH) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 15 TH MAY,2012. POONAM COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT(A), THE CIT,DR ASSISTANT REGISTRAR, ITAT CHANDIGARH