SHRI TINKU KUMAR MITTAL C-609, FELICITY EMRALD, SWAGE FARM, N.S. ROAD, JAIPUR,JAIPUR vs. CIT APPEAL-II, JAIPUR, APPEAL II, JAIPUR

Briefly stated, the facts of the case are that assessee has filed his return of income on 16.11.2014 declaring total income of Rs. 2,14,310/-. During the course of assessment proceedings, the Assessing Officer observed that the assessee has received Rs. 2,00,000/- from Sh. Nagarmal, Rs. 1,50,000/- from Sh. Mahendra Singh and Rs. 1,00,000/- from Sh. Chaju Ram. The assessee was Tinku Kumar Mittal, Jaipur Vs. ITO, Jaipur asked to furnish the details along with supporting evidence in support of source of such cash deposits.

In response, the assessee filed the indemnity bonds from these persons stating that the aforesaid persons are farmers and have given above cash out of their agricultural receipts. On going through the indemnity bonds, the Assessing Officer stated that no details of land holding, khasra Girdawari report, evidence of sale and purchase of produce have been furnished and therefore, in order to verify the transactions, the assessee was asked to produce these persons for necessary verification and in particular, to verify the creditworthiness of these persons. However, the assessee didn’t produce these persons for verification and the AO accordingly held that the assessee has failed to prove the creditworthiness and genuineness of transactions and source of such cash deposit at Rs. 4,50,000/- remained unexplained which was brought to tax in the hands of the assessee.

Being aggrieved, the assessee carried the matter in appeal before the ld. CIT(A). The ld. CIT(A) held that the onus lies on assessee to prove the source of cash and even in appellate proceedings, the assessee did not file any evidence to support/prove the source of cash received of Rs. 4,50,000/-. Hence, the action of the Assessing Officer was confirmed. Against the said findings, the assessee is in appeal before us.

During the course of hearing, the ld. AR submitted that on the direction of Assessing Officer, the assessee has filed the indemnity bonds of the above persons which were never rejected by ld. AO. It was submitted that the AO was requested to issue notice u/s 131 for independent inquiry to verify the genuineness and creditworthiness of these persons. However, the Assessing Officer instead of making independent inquiry made the addition in the hands 2 Tinku Kumar Mittal, Jaipur Vs. ITO, Jaipur of the assessee. It was further submitted that no corroborative evidence has been placed on record to justify the aforesaid addition. It was accordingly submitted that once the assessee has submitted the necessary affidavits of these persons and the AO has failed to carry out further enquiries by issuing summons u/s 131, the assessee cannot be penalized by treating the cash deposit as unexplained income in his hands. It was accordingly submitted that the addition so made and confirmed by ld. CIT(A) may be deleted.

Per contra, the ld. DR submitted that the mere filing of affidavits does not absolve the assessee from discharging the initial onus cast on him in terms of identity, creditworthiness and genuineness of the transaction. In the instant case, the Assessing Officer after pursuing the indemnity bonds so filed by the assessee stated that no details have been filed regarding land holding, khasra Girdawari report and agriculture produce so claimed by these persons and therefore, the creditworthiness of these persons remained unproved. Further, these persons were not produced for verification. It was accordingly submitted that where the initial onus has not been discharged by the assessee, the burden doesn’t shift on the Revenue and therefore, mere non-issuance of summons u/s 131 does not entitle the assessee to claim relief. It was accordingly submitted that there is no infirmity in the action of the lower authorities and order so passed by the ld. CIT(A) may be confirmed.

We have heard the rival contentions and perused the material available on record. The limited issue under consideration relates to explanation furnished by the assessee in support of cash deposits of Rs 4,50,000/- found deposited in his bank account and whether the same can be considered as satisfactory explanation in the facts and circumstances of the present case. The assessee has submitted that he has received Rs. 2,00,000/- from Sh. Nagarmal, Rs. 1,50,000/- from Sh. Mahendra Singh and Rs. 1,00,000/- from 3 Tinku Kumar Mittal, Jaipur Vs. ITO, Jaipur Sh. Chaju Ram. On perusal of the affidavits so furnished by these persons which are on identical lines, it is noted that each of these persons have stated that they are farmers involved in farming and animal husbandry, they don’t have any banking facility nearby, out of their agriculture and animal husbandry and past savings, they have given the amount to the assessee for purchase of flat. The affidavits so submitted by these persons are silent in terms of quantum of past savings and quantum of past income from agriculture, animal husbandry and nothing has been stated regarding land holding, number of animals, etc. The affidavits so filed in absence of necessary corroboration therefore don’t support the creditworthiness of these persons. Further, it has been stated that the cash advance has been given towards purchase of flat, however, there is no mention about the locality, area, etc of such flat for which such amount has been given. The assessee in his return of income has also not disclosed any transaction towards sale of flats. The affidavits so filed therefore don’t represent a clear picture of the actual transaction which is claimed by the assessee in absence of necessary corroboration. The assessee was asked to produce these persons for necessary verification and having failed to produce these persons, it cannot be assumed that the AO has accepted the affidavits so filed. We are therefore of the considered view that the assessee has failed to discharge the initial onus cast on him in terms of satisfying the test of creditworthiness and genuineness of the transactions so claimed by him and unless the initial onus cast on the assessee is discharged, the burden doesn’t shift on to Revenue to prove otherwise and mere non-issuance of summons doesn’t support the case of the assessee. In light of the same, we are of the considered view that there is no infirmity in the findings of the ld CIT(A) where the cash deposit has been found not satisfactorily explained and brought to tax in the hands of the assessee as his unexplained income. Tinku Kumar Mittal, Jaipur Vs. ITO, Jaipur In the result, appeal of the assessee is dismissed.