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Income Tax Appellate Tribunal, DEHRADUN CIRCUIT BENCH: DEHRADUN
This is an appeal by the assessee against order dated 29.06.2018 passed by learned Commissioner of Income Tax (Appeals) [hereinafter referred to as the ld. CIT(A)], Haldwani, pertaining to assessment year 2013-14.
The only issue to be decided in this appeal is as to whether the learned CIT(A) was justified in confirming the addition of Rs.5,25,000/- by treating the loan received by the assessee from Ms. ManjuTyagi as unexplained cash credit in the facts and circumstances of the case.
We have heard the rival submissions and perused the materials available on record. During the year under consideration, the assessee borrowed a sum of Rs.5,25,000/- from Ms.
ManjuTyagi. The assessee furnished the name and address of the lender together with confirmation from the said lender of having advanced money to the assessee. The assessee also furnished the bank statement of the lender wherein it was found that lender had advanced Rs.5,25,000/- from her overdraft account to the assessee by way of Real Time Gross Settlement (RTGS) fund transfer through regular banking channels. The learned Assessing Officer directed the assessee to produce the party before him for examination, which could not be complied by the assessee. Accordingly, learned Assessing Officer added the sum of Rs.5,25,000/- to the total income of the assessee treating it as unexplained.
Before the learned CIT(A), the assessee requested for another opportunity to produce the party before learned Assessing Officer and accordingly, learned CIT(A) sought for a remand report from the learned Assessing Officer to examine the lender. On the appointed date, the lender was brought by the assessee before learned Assessing Officer, but the learned Assessing Officer was on official duty with regard to survey operation being carried out in case of some other assessee and was not present in his chamber.
Accordingly, the lender had handed over all evidences which he had brought, to the assessee and assessee in turn had furnished all those information before the learned CIT(A). The learned CIT(A), however, concluded that the assessee could not avail the opportunity to produce the lender before the Assessing Officer, even in the remand proceedings and accordingly upheld the addition made by the learned Assessing Officer.
It is not in dispute that the assessee has furnished the name and address of the lender, bank statement of the lender and confirmation of the lender before the lower authorities. The lender is situated in Ghaziabad, which is far away from the place of assessee and, hence, explanation given by the assessee that the lender could not be produced before the learned Assessing Officer during the course of original assessment proceeding, deserves to be accepted.
However, it is a fact on record that the assessee, indeed produced the lender for examination before the learned Assessing Officer during the remand proceedings, on which date, the learned Assessing Officer was on official duty elsewhere and hence, the lender had handed over all the requisite materials in her possession to the assessee and the assessee had in turn furnished the same before the learned CIT(A). We also find that the learned AR has furnished affidavit from the lender duly confirming the fact of advancement of loan to the assessee by also explaining the business carried on by her. On perusal of the said evidence, we find that Ms. Manju Tyagi is engaged in the business of Galvanising under the name and style of M/s Jiraj Enterprises (PAN :
AIEPT9880B, Aadhar No. 7961 0520 5067) and assessed to tax by ITO, Ward - 2(1)(4), Ghaziabad. The said affidavit also mentions the fact that the lender resides in Ghaziabad and had advanced interest free unsecured loan of Rs.5,25,000/- to the assessee from her business account of M/s Jiraj Enterprises maintained with State Bank of India, Ghaziabad. We further find that the assessee has also furnished the copy of income tax return acknowledgment of the lender for assessment year 2013-14, wherein, the lender had disclosed taxable income of Rs.3,36,750/-. However, the affidavit and the income tax return acknowledgment were placed for the first time by the assessee before this Tribunal. Since these evidences are crucial for adjudication of the issue in dispute before us, the same are hereby admitted and taken on record. In any case, the assessee had duly discharged her initial onus of providing the name, address, PAN and bank statement of the lender and confirmation of the lender. The very same facts are reflected in the affidavit filed by the lender. The learned Assessing Officer had not sought to make any verification of these evidences filed on record by either issuing notice under section 133(6) of the Act or issuing summons to the lender under section 131 of the Act for recording the statement on oath from the lender. Instead, learned Assessing Officer completely shifted the onus on the assessee to produce the party before him for examination. We are unable to comprehend ourselves to accept this behavior of learned Assessing Officer as the assessee, in the instant case, had duly discharged the initial onus cast upon her by producing the requisite details before the learned Assessing Officer.
Leaned Assessing Officer has drawn adverse inferences on the assessee without making any independent examination from his side. Hence, by relying upon the recent decision of PCIT Vs. NRA Iron and Steel Pvt. Ltd. reported in 103 taxmann.com 48 (SC), we hold that learned Assessing Officer cannot make any addition towards unexplained cash credit without making any independent examination with regard to evidences filed by the assessee. Hence, we have no hesitation to delete the addition made in respect of loan of Rs.5,25,000/-, especially when all the three necessary ingredients of section 68 of the Act, viz., identity of the creditor, creditworthiness of the creditor, and genuineness of the transaction were proved by the assessee beyond reasonable doubt.
Accordingly, the ground raised by is allowed.
In the result, the appeal of the assessee is allowed.
Order pronounced in Open Court on 23rd June, 2023