VISHWAS KOHLI,NEW DELHI V. ITO, WARD- 59(5), NEW DELHI

ITA 7259/DEL/2017

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 31499 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-03-2025
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: F
• Assessment Year: 2013-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: HARPREET KAUR HANSRA
• Assessee Lawyers: MANPREET SINGH KAPOOR
• Keywords: Capital Gains; Source of fund
• Section: 68; 131; 69

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘F’, NEW DELHI BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER AND DR. MITHA LAL MEENA, ACCOUNTANT MEMBER ITA No.7259/Del/2017 Assessment Year: 2013-14 Vishwas Kohli, G-273, 2nd Floor, Preet Vihar New Delhi- PIN: 1100 92 PAN No. ANQPK5472M Vs. ITO, Ward 59(5), New Delhi (APPELLANT) (RESPONDENT) Appellant by Shri Manpreet Singh Kapoor, CA and Rajender Singh Rathor, Advocate Respondent by Ms. Harpreet Kaur Hansra, Sr. DR Date of hearing: 13/01/2025 Date of Pronouncement: 21/03/2025 ORDER Per Dr. Mitha Lal Meena, A.M.: This appeal is directed by the assessee against the order dated 25.05.2017 passed by the Ld. Commissioner of Income Tax (Appeals)-19, New Delhi [hereinafter referred to as “Ld. CIT (Appeals)” pertaining to assessment year 2013-14. 2. In the captioned appeal, additional ground raised by the assessee has not been pressed, and therefore, it is dismissed as not pressed. ITA No. 7259/Del/2017 2 3. The sole issue challenged in the multiple grounds of appeal by the assessee pertains to the addition of Rs.81,77,000 under Section 68 of the Act on account of cash received from Shri Shyam Sunder Gupta. 4. The brief facts of the case are that during the aforesaid assessment proceeding, the Assessing Officer has questioned the assessee regarding a cash deposit of Rs.81,71,000 in three bank account Nos. 03132000001352; 0313000005671 and 0313000012151 of ICICI Bank Ltd. The assessee explained before the Assessing Officer (in short (the AO”) that source of the cash deposit was mainly out of cash in hand available with the assessee and that cash amounting to Rs.70,50,000 received as an advance against sale of property from Shri Shyam Sunder Gupta during the financial year 2012-13. The Assessing Officer issued summons to Shri Shyam Sunder Gupta and recorded his statement under Section 131 of the Acton 14.03.2016 which reads as under: Q.6 Please give complete particulars of payment, viz a viz, date, amount, mode of payment, and source of the same Ans. I have made the Payment(s) in the following manner: S. No. Amount Date Mode of payment Source 1. 1,30,000 05.03.2012 Cash ITA No. 7259/Del/2017 3 2. 8,70,000 04.04.2012 Cash 3. 8,80,000 04.04.2012 Cash 4. 3,00,000 20.04.2012 Cash 5. 8,50,000 20.04.2012 Cash 6. 8,50,000 20.04.2012 Cash 7. 3,50,000 14.05.2012 Cash 8. 5,00,000 26.05.2012 Cash 9. 4,00,000 28.05.2012 Cash 10. 8,20,000 28.05.2012 Cash 11. 8,00,000 28.05.2012 Cash 12. 3,00,000 26.05.2012 Cash Total Q.7 Please state whether any receipt against the above was issued by Sh. Vishwas Kohli. The recipient of the above payments. Ans. No. Q.9 In reply to Q.9 you have furnished the details of payment(s) made to Sh. Vishwas Kohli. Please state whether you have any documentary proof in support of your contention regarding the source of the funds. Ans. No I do not have any documentary proof. Q.10 Please state whether the funds, amounting to Rs. 70.50 Lakhs utilized for the above transaction were accounted/declared for in the relevant year(s) book of accounts/Income-tax Returns. ITA No. 7259/Del/2017 4 Ans. I have not filed any income tax return after A.Y. 2009-10 Q.11 What is the source of cash availability with you. Also file the necessary evidence (Document in the shape of bank account statement from which cash amounting to Rs. 70,50,000/- withdrawn, copy of balance sheet, Income Tax /wealth tax return or any other such document) in support of reply to this question. Ans. I have sold some unlisted shares in physical forms during F.Y. 2010- 11 and F.Y. 2011-12. Presently I have no documentary evidence of these transactions. Q.12 Please state what the present status of the property and produce documentary evidence in support of your contention(s) regarding the status of the property. Ans. The property is still under construction and the possession will be handed over as an when the same will be delivered by the J.P. Associates and necessary documents will be executed at that time only 5. The Assessing Officer was not satisfied with the reply of the assessee, the same is as follows: “3.5 The above reply of the assessee has no force in view of the following reasons: i) Sh. Shyam Sunder Gupta could not produce source any documentary proof in support of payment of Rs. 69,20,000/- Total Rs. 70,50,000/-) made to Sh. Vishwash Kohli during the year. It was specifically stated by him that he doesn't have any documentary proof in support of his contention and source o funds. Moreover, no evidence in support of cash availability with him was furnished. ii) Sh. Shyam Sunder Gupta has not been filing I.T. Returns from the Λ.Υ. 2010-11. As such creditworthiness is not proved. iii) The agreement to sale is on plain paper (having no legal sanctity and the property in question is still under construction. ITA No. 7259/Del/2017 5 iv) Further the source as stated by Sh. Shyam Sunder Gupta from sale of unquoted shares is only a afterthought as he has filed n evidence of possession of these shares. Moreover, shares transactions took place through banking channels and not through cash. Also Sh. Shyam Sunder Gupta has not offered capital gain for taxation as no return filed. v) In all of the cases referred by the A.R. issue was not identical and these were pronounced in different situation. 6. The AO has held that the assessee failed to prove creditworthiness and the genuineness of the transactions by mentioning that the creditworthiness essentially means capacity in financial dealing and capacity to pay. The argument that the money comes from the sale of shares has no supporting documentary evidence, such as an agreement, moreover, the agreement has not been reached to the finality till date and the transactions allowed are not genuine. Accordingly, the Assessing Officer made the addition of Rs.69,20,000 under Section 68 of the Act. 8. Aggrieved, the assessee went in appeal before the Ld. CIT(Appeals) who has confirmed the findings of the Assessing Officer by observing as under: “4. I have carefully considered the submissions of the Authorized Representative of the appellant and the findings of the Assessing Officer. All the grounds of appeal are directed against addition of Rs. 69,20,000/- made by the Assessing Officer under Section 68 of the Income Tax Act, 1961. The assessee is engaged in the business of share and commodity trading through M/s. Arch. Finance Ltd., M/s. ITA No. 7259/Del/2017 6 Alankrit Assisnment Ltd. and M/s. Religare Commodities Lid. During the year under consideration there was total cash deposits of Rs. 81,77,000/- in three bank accounts of the assessee in ICICI Bank Ltd. A/c. No. 03132000001352, No. 0313000005671 and No. 0313000012151. The assessee stated that the source of cash deposited at various occasions were mainly out of cash in hand available with the assessee and also cash amounting to Rs.70,50,000/- received as advance against sale of property from Sh. Shyam Sunder Gupta during the Financial Year 2012-13. In order to verify the genuineness of the transaction and creditworthiness of Sh. Shyam Sunder Gupta, his statement was recorded by the Assessing Officer under section 131 of the L.T. Act on 14.03.2016. In the statement, Sh. Gupta stated that no receipt was issued by the assessee against the advance of Rs. 70,50,000/- paid by Sh. Gupta. Further, that there is no documentary proof with Sh. Gupta about the above payments. Sh. Gupta stated that the said advance given to the assessee was out of the money received on sale of un-listed shares in physical forms during the Financial Year 2010-11 & 2011- 12 although there is no documentary evidence of these transactions. On being asked by the Assessing Officer about whether the above sale of shares & source of funds of Rs. 70,50,000/- was declared in the I.T. return, Sh. Gupta stated that no I.T. return has been filed by him after Assessment Year 2009-10. 4.1 After examining Sh. Shyam Sunder Gupta, Assessing Officer was of the view that the genuineness of the transactions & creditworthiness of Sh. Shyam Sunder Gupta is not proved. Therefore, a show cause notice dated 18.03.2016 was issued to the assessee. Assessing Officer observed that assessee has made cash deposits of Rs. 81,77,000/- in his three bank accounts with HDFC Bank during the year under assessment. Out of this assessee has explained the cash availability to the extent of Rs. 12,57,000/- and for remaining assessee has stated the source being cash receipts from Sh. Shyam Sunder Gupta from whom total cash receipts is Rs. 70,50,000/- out of which Rs. 69,20,000/- pertains to the Financial Year 2012-13 relevant to Assessment Year 2013-14. Assessing Officer further, observed that the above contention of the assessee has no force. Sh. Shyam Sunder Gupta could not produce source/any documentary proof in support of payment of Rs. 69,20,000/- (total Rs. 70,50,000/-) made to Sh. Vishwash Kohli during the year. It was specifically stated by him ITA No. 7259/Del/2017 7 that he doesn't have any documentary proof in support of his contention and source of funds. Moreover, no evidence in support of cash acaritability with him was furnished. Sh. Shyam Sunder Gupta has not been filing I.T. Returns heom the Assessment Year 2010-11. As such creditworthiness is not proved. The agreement to sale is oin plain paper (having no legal sanctity) and the property in question still under communication. Further, the source as stated by Sh. Shyam Sunder Gupta from sale of unquoted shuwer is only a alterthought as he was tiled no evidence of possession of these shares. Sh. Shyam Sander Gupta has not offered capital gains for taxation as no return filed. Assessing Officer observed that the assessee was required to prove the creditworthiness and genuineness of the transaction. The assessee has failed to discharge its onus. Hence, Rs. 69,20,000/- is being added by the Assessing Officer under section 68 of the Income Tax Act, 1961 to the total income of the assessee. 4.2 Assessee's contention is that the said amount of Rs. 70,50,000/- was received as advance from Sh. Shyam Sundar Gupta against sale of flat which is under construction by J.P. Associates Lai, Noida. In support, the assessee has filed agreement to sale dated 05.03.2012 in plain paper without bearing any signature of witness. The agreement to sale is for a property where value is of Rs. 1,25,00,000/-, without any witness in plain paper that do not have any legal sanctity. As regards the source of funds in the hands of Sh. Shyam Sundar Gupta, no evidence in support of sale of shares is famished. No return of income was filed in support of the contention of sale of shares & corresponding capital gains. No bank statement could be furnished by Sh. Gupta in support of the contention that money was received against sale of shares in Financial Year 2010- 11 & 2011-12, which was paid to the assessee during Financial Year 2011-12 & 2012-13. Usually in any transaction whenever any payment is made, the same are documented as a proof of evidence for both the purchaser & seller. However, in the instant case, no documents & receipts could be furnished in support of the contention that the above payments were indeed made by Sh. Gupta to the assessee. Payment of Rs. 69,20,000/- was claimed as received as advance against sale of flat on 11 occasions during the relevant previous year without any documentary evidence. All the deposits in the bank account of the assessee are in cash. With regard to the affidavits filed by the assessee & Sh. Shyam Sunder Gupta in support of the claim elf ITA No. 7259/Del/2017 8 payment of advance, it is an established legal position that affidavit is a self-serving statement, unless it is corroborated by intrinsic or extrinsic evidence. When assessee fails to prove the genuineness of be affidavit and the averments made therein , affidavits are to be rejected as afterthought. Reliance is placed on Technical Glass Ind. Vs. CIT 281 ITR 61; Chowkchand Balabux vs. CIT (Assam) 41 ITR 465; Blowell Auto (P) Ltd. vs. ACTT (PH)11 DTR 91; and Munilal Ramdayal vs. ITO & Ors. (Ori) 76 ITR 151. In view of the above, as the creditworthiness and genuineness of the transaction is not proved, the Assessing Officer is fully justified in adding the said sum of Rs.69,20,000 under Section 69 of the Income Tax Act, 1961. The appeal fails in this regard.” 9. The Ld. Counsel for the appellant submitted that the assessee's burden is confined to prove creditworthiness of creditor with reference to the transaction between the assessee and the creditor. This view was also upheld in the case of Nemi Chand Kothari Vs, CIT [2004] 136 Taman 213 (Gau.). Since Mr. Gupta submitted before the Ld. Cit (A) that assessee himself appeared before the Ld. A.O and confirmed the disputed cash transactions and also the source of his cash generation, hence the assessee cannot be called again and again to prove the creditworthiness of its creditor. The AR argued that the assessee has submitted copies of Bank Statement from 01.04.2012 to 31.03.2013 of all the three bank accounts maintained by the assessee during the financial year 2012-13 and it is clear from these statements that the marked disputed transactions indicating the cash received by the assessee from Mr. Shyam Sunder Gupta for onward payments to Jai Prakash Associates Limited towards the flat. He reiterated ITA No. 7259/Del/2017 9 the same contention as raised before the Ld. CIT(A) with support of assessee’s notarized affidavit and that of Shri Shyam Sunder Gupta regarding the source of cash received and deposited in the aforesaid three bank accounts of the assessee and the contents of the affidavits were supported with corroborative documentary material evidence. The Ld. AR pleaded for the relief. 10. The Ld. DR rely on the impugned order and contended that the affidavits furnished by the assessee are self-serving documents which has no evidentiary value in absence of corroborative documentary evidence to prove the contents of these affidavits. She pleaded that the CIT (A) has passed a comprehensive speaking order on merits of the case, and same may be upheld. 11. We have heard both the sides, perused the material on record, impugned order, the submissions of the Authorized Representative of the appellant and the findings of the Assessing Officer. The assessee has objected to the sole addition of Rs. 69,20,000/- made by the Assessing Officer (In short, the AO) and confirmed by the Ld. CIT (A) under Section 68 of the Income Tax Act, 1961. During the year under consideration there was total cash deposits of Rs. 81,77,000/- in three bank accounts of the assessee in ICICI Bank Ltd. A/c. No. 03132000001352, No. ITA No. 7259/Del/2017 10 0313000005671 and No. 0313000012151. The assessee stated that the source of cash deposited at various occasions was mainly out of cash in hand available with the assessee and also cash amounting to Rs.70,50,000/- received as an advance against sale of property from Sh. Shyam Sunder Gupta during the Financial Year 2012-13. To verify the genuineness of the transaction and creditworthiness of Sh. Shyam Sunder Gupta, his statement was recorded by the Assessing Officer under section 131 of the Income Tax Act 1961 (In short, the Act) on 14.03.2016. In the statement, Sh. Shyam Sunder Gupta stated that no receipt was issued by the assessee against the advance of Rs. 70,50,000/- paid by him and there was no documentary evidence to prove the source of aforesaid cash transaction with Sh. Gupta. who merely stated that the said advance was given to the assesse out of the money received on sale of un-listed shares in physical forms during the Financial Year 2010-11 & 2011- 12 although he has not produced any documentary evidence of these transactions. On being asked by the Assessing Officer about whether the above sale of shares & source of funds of Rs. 70,50,000/- was declared in the I.T. return, Sh. Gupta stated that no I.T. return has been filed by him after Assessment Year 2009-10. ITA No. 7259/Del/2017 11 12. From the statement of Sh. Shyam Sunder Gupta, recorded u/s 131 by the AO, it is evident that the genuineness of the transactions & creditworthiness of Sh. Shyam Sunder Gupta was not proved. Therefore, the AO had issued a show cause notice dated 18.03.2016 to the assessee but the cash deposits of Rs. 81,77,000/- made in assessee’s in the above three bank accounts, the assessee has explained the cash availability to the extent of Rs. 12,57,000/- and the source of the remaining was stated to be cash receipts from Sh. Shyam Sunder Gupta amounting to Rs. 70,50,000/- out of which Rs. 69,20,000/- pertains to the Financial Year 2012-13 relevant to Assessment Year 2013-14 under consideration. The AO further observed that the above contention of the assessee has no force because Sh. Shyam Sunder Gupta could not produce any documentary proof of source in support of cash payment of Rs. 69,20,000/- made to Sh. Vishwash Kohli (the assessee) during the year and that Sh. Gupta has specifically stated that he doesn't have any documentary proof in support of his contention regarding the cash advance given to the assessee as an advance towards property Transaction. Moreover, no evidence in support of cash availability with him has been furnished. It is important to note that Sh. Shyam Sunder Gupta has not been filing I.T. Returns from the Assessment Year 2010-11. The agreement to sale was on a plain paper (having no legal sanctity) and ITA No. 7259/Del/2017 12 the property in question was still under construction. Further, the source as stated by Sh. Shyam Sunder Gupta from sale of unquoted shares is only an alter thought as he has no evidence of possession of these shares, and he has not offered capital gains for taxation as no return filed. Thus, the AO an the CIT (A) has rightly observed that the assessee has failed to discharge its primary onus in proving the creditworthiness and genuineness of the transaction. 13. The Ld. AR contention that the said amount of Rs. 70,50,000/- was received as advance from Sh. Shyam Sundar Gupta against sale of flat which was under construction by J.P. Associates Lai, Noida. In support, the assessee has filed an agreement to sale dated 05.03.2012 in plain paper without bearing any signature of witness. The agreement to sale is for a property where the value is Rs. 1,25,00,000/-, without any witness on a plain paper that do not have any legal sanctity. Regarding the source of funds in the hands of Sh. Shyam Sundar Gupta, no evidence furnished in support of the sale of shares and that no return of income was filed in support of the contention of sale of shares and corresponding capital gains. No bank statement could be furnished by Sh. Gupta in support of the contention that money was received against sale of shares in Financial Year 2010- 11 & 2011-12, which was paid to the assessee during Financial Year ITA No. 7259/Del/2017 13 2011-12 & 2012-13. In our view, usually in any transaction whenever any payment is made, the same is documented as a proof of evidence for both the purchaser and seller. However, in the instant case, no documents and receipts of payment could be furnished in support of the contention that the above payments were indeed made by Sh. Gupta to the assessee. The disputed payment of Rs. 69,20,000/- was claimed to be received as an advance against sale of flat on 11 occasions during the relevant previous year without any documentary evidence and all the deposits in the bank account of the assessee were in cash. Regarding the affidavits filed by the assessee and Sh. Shyam Sunder Gupta in support of the claim of payment of advance, it is an established legal position that affidavit is a self-serving statement, unless it is corroborated by intrinsic or extrinsic evidence. When assessee fails to prove the genuineness of be affidavit and the averments made therein, affidavits are to be rejected as afterthought. 14. Meaning thereby that the creditworthiness and genuineness of the transaction is not proved. In this regard the Ld. CIT (A) has been justified in relying on Technical Glass Ind. Vs. CIT 281 ITR 61; Chowkchand Balabux vs. CIT (Assam) 41 ITR 465; Blowell Auto (P) Ltd. vs. ACTT (PH)11 DTR 91; and Munilal Ramdayal vs. ITO & Ors. (Ori) 76 ITR 151. ITA No. 7259/Del/2017 14 15. In view of the above discussion and factual matrix of the case, we find no infirmity or perversity in the impugned order passed by the Ld. CIT(A) in confirming the addition of Rs.69,20,000 under Section 68 of the Income Tax Act, 1961. 16. In the result, the appeal of the assessee is dismissed. Order pronounced on 21/03/2025 in accordance with the Rule 34(4) of Income Tax (Appellate Tribunal) Rules, 1963. Sd/- Sd/- (VIKAS AWASTHY) (DR. MITHA LAL MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER *Mohan Lal* Dated: 21.03.2025 Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) ` 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI "