Latest Expert Exchange Queries
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
 
 
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
 
 
 
 
Popular Search: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: form 3cd :: cpt :: list of goods taxed at 4% :: due date for vat payment :: Central Excise rule to resale the machines to a new company :: ARTICLES ON INPUT TAX CREDIT IN VAT :: ACCOUNTING STANDARD :: VAT Audit :: TDS :: articles on VAT and GST in India :: ACCOUNTING STANDARDS :: empanelment :: VAT RATES :: TAX RATES - GOODS TAXABLE @ 4%
 
 
From the Courts »
  Micro Spacematrix Solution P Ltd vs. ITO (ITAT Delhi)
 Micro Spacematrix Solution P Ltd vs. ITO (ITAT Delhi)
 CIT vs. Greenfield Hotels & Estates Pvt. Ltd (Bombay High Court)
 IndiaBulls Financial Services Ltd vs. DCIT (Delhi High Court)
 Maharao Bhim Singh of Kota vs. CIT (Supreme Court)
 Ravneet Takhar Vs. Commissioner Of Income Tax Ix And Ors.
 Jaiprakash Associates Ltd. Vs. Commissioner Of Income Tax
 Formula One World Championship Limited Vs. Commissioner Of Income Tax, International Taxation-3 And Anr.
 Commissioner Of Income Tax International Taxation-3 Delhi Vs. Formula One World Championship Ltd. And Anr.
 Reliance Communications Ltd vs. DDIT (ITAT Mumbai)
  Sushila Devi vs. CIT (Delhi High Court)

Shri Vinod Kumar Kaushik, C/o M/s Bhagwati Road, Line Road, Railway, Narnaul. vs Income Tax Officer, Ward-1, Narnaul.
May, 08th 2014
                                    1                      ITA No.2668/Del/2006
                                                             Asstt.Year: 2001-02

           IN THE INCOME TAX APPELLATE TRIBUNAL
                DELHI BENCHES `H' NEW DELHI

     BEFORE SHRI B.C. MEENA, ACCOUNANT MEMBER
                       AND
     SHRI CHANDRAMOHAN GARG, JUDICICAL MEMBER

                        ITA NO. 2668/DEL/2006
                        ASSTT.YEAR: 2001-02

Shri Vinod Kumar Kaushik,           vs      Income Tax Officer,
C/o M/s Bhagwati Road,                      Ward-1, Narnaul.
 Line Road,
Railway, Narnaul.
(Appellant)                                 (Respondent)
                   Appellant by: Shri Vinod Kaushik
                  Respondent by: Shri Sameer Sharma, Sr.DR

                              ORDER

PER CHANDRAMOHAN GARG, J.M.

     This appeal has been preferred by the assessee against the order of the

CIT(A), Rohtak dated 31.3.2006 in Appeal No. 171/NNL/2005-06 for AY

2001-02.

2.   The grounds raised by the assessee in this appeal read as under:-

           "1. That the Assessing Officer erred in confirming
           addition of Rs.18,000/- on account of loan raised from
           Shri Phool Singh.

           2. That the Assessing Officer erred in confirming
           addition of Rs.17,000/- on account of loan raised from
           Shri Banarasi Lal.
                                    2                    ITA No.2668/Del/2006
                                                           Asstt.Year: 2001-02

         3. That the Assessing Officer erred in confirming addition
         of Rs.18,000/- on account of loan raised from Shri Ajay
         Kumar.

         4. That the Assessing Officer erred in confirming addition
         of Rs.17,000/- on account of loan raised from Shri Magni
         Ram.

         5. That the Assessing Officer erred in confirming addition
         of Rs.17,000/- on account of loan raised from Shri
         Parshotam Dass.




         6. That the Assessing Officer erred in confirming addition
         of Rs.15,000/- on account of loan raised from Shri Sher
         Singh.

         7. That the Assessing Officer erred in confirming addition
         of Rs.18,000/- on account of loan raised from Shri Jagan
         Singh.

         8. That the Assessing Officer erred in confirming addition
         of Rs.17,000/- from Shri Parabhu Dayal."

3.    When the case was called for hearing, the assessee Shri Vinod Kumar

Kaushik himself appeared and submitted a paper book spread over 59 pages

and copy of decision of ITAT Delhi SMC Bench dated 19.1.2007 in ITA

No.2711/Del/2006 for AY 2001-02 in the case of Shri Prem Chand C/o

Bhagwati Roadlines vs ITO Ward-1, Narnaul. The assessee submitted that

he is suffering from blood cancer and he has no means to engage a counsel

for this case, therefore, the appeal may kindly be decided on the basis of

paper book filed by him today and on the basis of decision of Shri Prem

Chand (supra) who was his partner in the same enterprise i.e. M/s Bhagwati
                                      3                     ITA No.2668/Del/2006
                                                              Asstt.Year: 2001-02

Roadlines. We also heard ld. DR and proceeded to decide the appeal on

merits on the basis of material placed before us.

4.    On careful consideration and perusal of appeal record, paper book

filed by the assessee and the decision of ITAT Delhi SMC Bench dated

19.1.2007 (supra), at the outset, we observe that the case of Shri Prem Chand

a partner of M/s Bhagwati Roadlines has been decided in favour of the

assessee with following observations and findings:-

             "17. Ld. DR supported the orders of ld. Commissioner
             of Income Tax(A) and ld. Assessing Officer vehemently.
             She very strongly argued that the additions made by the
             Assessing Officer were rightly made, as the assessee
             could not prove the creditworthiness of the creditors.
             She further argued that there were valid reasons for
             reopening of the case and therefore at this stage the ld.
             counsel cannot argue about the validity of reopening.
             She also argued that once the case is reopened the
             primary burden is upon the assessee to meet his
             obligations. She argued that it was the duty of the
             assessee to prove the identity, creditworthiness and
             genuineness of the transaction. In her opinion the
             assessee failed in discharging this burden. Therefore, it
             has been argued that there was no error in the order of
             ld. Commissioner of Income Tax(A) and therefore the
             same needs to be upheld.

            18. On the reply stage the ld. counsel has argued that the
            validity of reopening is not being challenged by them and
            their contention is that presumably even if the reopening
            has been done as per law, in view of provisions of section
            147 supported with the latest judgment of Hon'ble Delhi
            High Court in the case of Commissioner of Income Tax vs
            Shri Pradeep Kumar Gupta (supra), the initial burden
            was upon the ld. Assessing Officer who has failed to
                          4                      ITA No.2668/Del/2006
                                                   Asstt.Year: 2001-02

discharge. On merits also he has stated that ld. DR has
not been able to meet out any contention of the ld.
Assessing Officer that in the statements recorded by
various persons factum of advancing the loans were
proved along with various other details which establishes
the creditworthiness of these creditors. He has further
argued that ld. DR has not been able to find any gap or
inconsistency in the statements recorded by the Assessing
Officer. He further argued that, in any case, in view of
the judgment of MP High Court in Metachem Industries
supra, and other judgments of Delhi Bench as mentioned
above, it was not the duty of assessee to prove the source,
to know about the financial affairs of the creditors or to
prove the source of the loans advanced by these creditors.
In this views the addition of Rs.1,77,000/- deserves to be
deleted.

19. I have heard the rival submissions and perused the
orders of the lower authorities and the materials
available on record. I find that the assessee produced 10
out of 12 loan creditors before the Assessing Officer. It is
observed that in this case the assessee has claimed to
have received loans of Rs.1.95 lakhs from 12 creditors out
of the same Rs.1.77 lakhs was added by Commissioner of
Income Tax(A) as unexplained cash credit from 11
persons and one loan of Rs.18000/- from Shri Khyali Ram
was accepted by Commissioner of Income Tax(A). I
observe that affidavit from all the 11 creditors were filed
before the Assessing Officer wherein the creditors have
duly affirmed the transaction with the assessee. Further,
out of the 11 creditors in question 9 were pr0duced by the
assessee before the Assessing Officer and 9 creditors even
affirmed the fact of advancing of money by them to the
assessee before the Assessing Officer. It is also observed
that no notice u/s 131 was issued by the Department to
the remaining 2 creditors. In the circumstances in my
considered opinion the primary onus which was on the
assessee to prove nature and source of his cash credit was
discharged by him and the onus was shifted on the
Revenue to bring cogent material on record for not
                                      5                      ITA No.2668/Del/2006
                                                               Asstt.Year: 2001-02

            accepting such cash credit. I find that apart from a
            subjective remark about the creditworthiness of the
            creditors no positive material has been brought on record
            by the Revenue for not accepting the cash credit in
            question. In the circumstances, in my opinion the
            addition so made cannot be sustained. Hence, I delete the
            addition of Rs.1.77 lakhs made on account of unexplained
            cash credit from 11 creditors. Accordingly, the grounds
            of appeal of the assessee are allowed."

5.    From the Paper Book filed by the assessee, we observe that the

creditors Jagan Singh, Parshotam Dass, Magni Ram, Ajay Kumar, Banarasi

Lal, Phool Chand, Ram Kkishan, Desh Raj and Prabhu Singh have deposed

before the ITO, Ward-1, Narnaul supporting the fact that they extended loan

to the assessee from their own means and the same fact was also reiterated

and supported by the affidavits of these creditors along with documents

pertaining to the source of money. Ld. DR has not disputed the point that

Shri Prem Chand was already a partner in M/s Bhagwati Roadlines with the

assessee and Shri Prem Chand and the assessee i.e. Shri Vinod Kumar

Kaushik faced the same addition in the AY 2001-02 pertaining to the

creditors and Shri Prem Chand got relief by the ITAT Delhi SMC Bench

vide order dated 19.7.2007 (supra) and the department has accepted that

decision without agitating the matter further in the higher forum.

6.    On careful consideration of above set of facts and on perusal of the

orders of the lower authorities, paper book filed by the assessee today and
                                     6                      ITA No.2668/Del/2006
                                                              Asstt.Year: 2001-02

decision of ITAT SMC Bench dated 19.1.2007 (supra), we find that the

assessee produced all creditors before the Assessing Officer and their

statements were recorded on oath. The disputed creditors also supported the

version of the assessee by filing their affidavits and other documents

explaining the source of amount which was provided to the assessee as loan

wherein the creditors have duly affirmed the transaction with the assessee.

On the same set of facts and circumstances, the ITAT SMC Bench granted

relief for the partner of the assessee and facts and circumstances of the

assessee's case are also similar in the present appeal.              In these

circumstances, in our considered opinion, the primary onus on the assessee

to prove the nature and source of cash credits was discharged by the assessee

and further onus was shifted on the revenue to bring out relevant and cogent

material on record for not accepting such cash credit as shown by the

assessee. We also find that the Assessing Officer has made a subjective

remark about the creditworthiness of the creditors but no positive material

has been brought on record by him for not accepting the cash credit shown

by the assessee. Accordingly, in our considered opinion, the assessee has

shown source of cash creditors and the creditors came forward to the desk of

the Assessing Officer to support the version of the assessee by way of giving

statement of oath and also submitted the affidavits and other relevant
                                       7                      ITA No.2668/Del/2006
                                                                Asstt.Year: 2001-02




documents, explaining the circumstances and source of amount given to the

assessee as loan. We also observe that the Assessing Officer has not brought

any relevant or cogent material to establish any doubt about the truthfulness

of the creditors, hence, the addition so made cannot be sustained. We also

hold that since the assessee has established identity, creditworthiness of the

creditors as well as genuineness of the source of loan and the Assessing

Officer has not made any adverse observations or could not bring any

adverse material to raise doubt about the identity and creditworthiness of the

creditors as well as genuineness of the transaction, therefore, the additions

made by the Assessing Officer and upheld by the CIT(A) cannot be

sustained. We also hold that the case of the present assessee is squarely

covered by the decision of ITAT SMC Bench in the case of Shri Prem

Chand c/o Shri Bhagwati Roadlines dated 19.7.2007 (supra) and we are

inclined to grant relief for the assessee by respectfully following this

decision. Accordingly, the orders of the authorities below are set aside and

we direct to delete all additions made by the Assessing Officer and upheld

by the CIT(A) pertaining to the cash credit shown by the assessee in the FY

2001-02.

7.    In the result, the appeal of the assessee is allowed.
                                     8                       ITA No.2668/Del/2006
                                                               Asstt.Year: 2001-02

       Order pronounced in the open court on 06.05.2014.

    Sd/-                                                   Sd/-

( B.C. MEENA )                             (CHANDRAMOHAN GARG)
ACCOUNTANT MEMBER                             JUDICIAL MEMBER

DT. 6th MAY 2014
`GS'

Copy forwarded to:-

  1.   Appellant
  2.   Respondent
  3.   CIT(A)
  4.   CIT 5. DR

                                                 By Order


                                                 Asstt.Registrar

 
 
Home | About Us | Terms and Conditions | Contact Us
Copyright 2016 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
SEO Services SEO LLC e-boost Search Engine Optimization Services Internet Marketing Services Website Placement Services On-site Webs

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions