INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH "F": NEW DELHI
BEFORE SHRI AMIT SHUKLA, JUDICIAL MEMBER
AND
SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER
ITA No. 4026/Del/2018
(Assessment Year: 2013-14)
Satish Singhal, Vs. ITO,
6, Patpar Road, Shivpuri, New Ward-11(1),
Delhi New Delhi
PAN: ABBPS5635D
(Appellant) (Respondent)
Assessee by : Shri A.K. Chaudhary, Adv
Revenue by: Shri S.L. Anuragi, Sr. DR
Date of Hearing 21/08/2018
Date of pronouncement 15/11/2018
ORDER
PER PRASHANT MAHARISHI, A. M.
1. This appeal is filed by the assessee against the order of the ld CIT (A)-22,
New Delhi dated 27.03.2018 for the Assessment Year 2013-14.
2. The assessee has raised the following grounds of appeal:-
"1. That the Ld. Commissioner of Income Tax (Appeal) 22, New Delhi
has erred in both law and facts in upholding addition of
Rs.26,00,000/- (Rs. Twenty Six Lacs only) representing loan
received by the Assessee and held to be unexplained cash credit u/s
68 of the Act.
2. That Ld. Commissioner of Income Tax (Appeal) has failed to
appreciate that unsecured loan aggregating to Rs.26,00,000/- had
been received through bank RTGS identifiable parties having the
corporate status who had dully confirmed in their statement of A/c
that loan had been advanced to the Appellate and as such addition
so sustained is invalid and untenable.
3. That Ld. Commissioner of IT (Appeal) has further failed to
appreciate that mere assumption without supporting of any
clinching evidence that the money actually belong to none but the
assessee himself cannot be basis to confirm addition u/s 68 of the
Act.
4. That without going through the submission of the Assessee, remand
report of the A.O., which has not been submitted by A.O. and
Page | 1
without providing the opportunity of rejoinder Ld. CIT confirmed the
addition.
5. That the Ld. C I T (Appeal) has overlooked relevant evidences
placed on record and thereby lack of investigation even at the
request of Appellant. Furthermore repayment aspect of Rs. 10 Lakh
loan from Sid Sai Realty (P) Ltd was squared up during the year
hence liable to be utmost consideration itself and loan from M/S
Harsh Build well (P) Ltd was repaid during the year A.Y. 2015-2016
much before the completion of assessment was not discussed in Ld.
C.I.T."
3. Brief facts of the case is that assessee is an individual who is income from
business or profession capital gain an income from other sources in the
taxable income was declared at Rs. 620320 in return of income filed on
24/9/2013. During the course of assessment, proceedings it was noted by
the learned assessing officer that the assessee had taken a loan of 18
lakhs from M/s Harsh build well private limited and 10 lakhs from M/s
Sid Sai reality private limited. To verify the genuineness of the loan the
assessing officer issued letter under section 133 (6) of the act. The
replies were filed by the lender companies and wherein the learned AO
has noted that there was a cash deposit of 8 lakhs on 25/6/2012 2012
and 1,050,000 on 26/2/2012 and in turn an amount of 16 lakhs was
transferred to the assessee's account by the Harsh build well private
rupees limited. Similarly, in case of sid Sai reality private limited cash
was deposited of Rs. 9 lakhs on 18/9/2012 and 1 lakh on 4/10/2012
and in turn the aggregate cash deposit of 10 lakhs was transferred in
the name of the assessee on 4/10/2012. Therefore the learned AO issued
summons under section 131 (one) of the act on 18/2/2016 on the
directors of the lenders for personal deposition on 24/2/2016 to establish
the identity of the person who had given the loan and to prove the
genuineness of the transaction and creditworthiness of those parties.
None attended. Therefore, the learned assessing officer requested the
assessee to produce all those creditors for examination along with the
notice dated 8/3/2016. The assessee also did not reply this notice.
Therefore the learned assessing officer applying the decision of the
honourable Delhi High Court in case of Navodaya Castles private limited
367 ITR 306 made the addition of 26 lakhs under section 68 of the
Page | 2
income tax act and determine the total income of the assessee at 32
20320/ against the returned income of 6 20320/.
4. Assessee agreed with the order of the learned assessing officer preferred
an appeal before the learned commissioner of income tax appeals 22,
New Delhi. The learned CIT appeal dismissed the appeal of the assessee.
He held that since the appellant has claimed that the loan was genuine
the onus was on the appellant under section 101 of the evidence act,
1972 to produce the directors and principal officers of the lender
companies on its own as its own witness for cross-examination by the
revenue the appellant should have discharged its duty as a taxpayer by
producing the directors of those companies particularly in a scenario in
which these companies have made substantial investment in the
appellant company. He further held that once the appellant was made
aware of the result of investigation, which proved, that the transaction
was not genuine the higher burden was on the assessee to prove the
creditworthiness of the lenders and the genuineness of the transaction.
Thereafter he relying upon several decisions confirmed the addition made
by the learned assessing officer.
5. Assessee agreed with the order of the learned commissioner of income
tax appeals preferred an appeal before us. The learned authorised
representative submitted that the lenders has submitted the details under
section 133 (6) of the income tax act before the learned assessing officer
submitting the conformation of the account and furnishing the return of
income of those lenders. The bank statement for the relevant period was
also filed and therefore the initial onus cast upon the assessee was
discharged. He further referred to various documents submitted before
the learned assessing officer. He therefore submitted that the addition
has wrongly been made by the learned assessing officer and confirmed by
the learned commissioner of income tax appeals.
6. The learned departmental representative vehemently supported the
orders of the lower authorities and submitted that the assessee has failed
to produce the creditors/lenders before the learned assessing officer. He
further stated that merely filing a confirmation by the lender does not
Page | 3
prove the creditworthiness of the lenders. He further submitted that the
assessee has been given a loan of 26,00,000 by 2 companies who
have deposited cash prior to giving loan to the assessee shows that these
loans are not genuine. He further stated that the assessee has miserably
failed to produce the directors of those companies to prove the
genuineness of the transaction.
7. We have carefully considered the rival contention and perused the orders
of the lower authorities. The brief facts show that the assessee has
borrowed a sum of 26 lakhs from two companies. On examination of
the details by the learned assessing officer submitted by the AO and
received under section 133 (six) of the income tax act from the lenders it
was found that both these companies have deposited cash prior to issue
of cheques to the assessee. Further, the assessing officer issued
summons to these parties, which were not complied with. Further
assessee was also asked to produce them did not produce. In response to
the notice by the assessee, the assessee also did not file reply to the
assessing officer. Merely submitting the conformation does not discharge
the initial onus by the assessee when they learned assessing officer has
specifically examine the bank statement of the lenders and found that
cash has been deposited by them prior to issuing cheques to the
assessee. Further it is also apparent that based on the details furnished
by the assessee the harsh build well private limited company which is
given 16 lakhs to the assessee has shown the returned income of 27
lakhs and further the profit as per profit and loss account before tax was
12 lakhs. Further, in case of the bank statement of the assessee it is
apparent that cash was deposited prior to issue of cheque to the
assessee. It is also apparent that four years bank statement was not
provided by the assessee to the assessing officer. In case of Siddh Sai
reality private limited, the lender shown profit of 12 lakhs for the year
but filed a return of income of 120,000. Further prior to the issue of
the cheque of 10 lakhs on 14 2012 to the assessee there was deposit of
9 lakhs and 1 lakhs on two different dates prior to the issue of
cheques to the assessee. On these transactions, the learned assessing
Page | 4
officer has expressed its doubt about the genuineness of the transaction.
This genuineness of the transaction can only be proved by the production
of the directors before the assessing officer which assessee has failed to
do repeatedly. On careful examination of the whole issue, and in the
interest of the Justice we set aside the whole issue back to the file of the
learned assessing officer with a direction to the assessee to produce the
directors of both the lenders companies before the assessing officer for
the examination and to explain the source of cash deposited in their bank
account before issue of cheques to the assessee. The learned AO is
directed to examine them, if produced by the assessee and then decide
the issue afresh on the merits of the case. In the result ground number
one of the appeal of the assessee along with other grounds of appeal are
allowed for statistical purposes.
8. In the result, appeal of the assessee is allowed for the purpose to test
purposes.
Order Pronounced in the open court on 15/11/2018.
Sd/- Sd/-
(AMIT SHUKLA) (PRASHANT MAHARISHI)
JUDICIAL MEMBER ACCOUNTANT MEMBER
Dated: 15/11/2018
A K Keot
Copy forwarded to
1. Applicant
2. Respondent
3. CIT
4. CIT (A)
5. DR:ITAT
ASSISTANT REGISTRAR
ITAT, New Delhi
Page | 5
Date of dictation
Date on which the typed draft is placed before the
dictating member
Date on which the typed draft is placed before the
other member
Date on which the approved draft comes to the Sr.
PS/ PS
Date on which the fair order is placed before the
dictating member for pronouncement
Date on which the fair order comes back to the Sr.
PS/ PS
Date on which the final order is uploaded on the 15.11.2018
website of ITAT
date on which the file goes to the Bench Clerk
Date on which the file goes to the Head Clerk
The date on which the file goes to the Assistant
Registrar for signature on the order
Date of dispatch of the order
Page | 6
|
