YOGENDER ,NEW DELHI vs. ITO, WARD-42(2), NEW DELHI

IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI BENCH: ‘SMC’ NEW DELHI

SHRI SAKTIJIT DEY, JUDICIAL MEMBER

ITA No.1835/Del/2021 Assessment Year: 2013-14 Yogender, Vs. Income-Tax Officer, Saurav Rohatgi & Ward-42(4), Associates, G-2/7, Ganga New Delhi. Triveni Apartments, Sector- 9, Rohini, Delhi-1100 85 PAN :AIIPY4308 B (Appellant) (Respondent)

Appellant by Shri Saurav Rohtagi, CA Respondent by Shri Om Parkash, Sr. DR

Date of hearing 02.08.2022 Date of pronouncement 31.10.2022

ORDER This is an appeal by the assessee against order dated 26.08.2020

of learned Commissioner of Income-Tax (Appeals)-38, Delhi for the

assessment year 2013-14.

Rs.10,00,000 as unexplained cash credit under Section 68 of the

Income-Tax Act, 1961.

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the assessment year under dispute, assessee filed his return of income

on 04.08.2013 declaring total income of Rs.1,64,300. In addition,

assessee offered agricultural income of Rs.6,08,000.

statement of the assessee, the assessing officer noticed that in the year

under consideration, the assessee had deposited an amount of

Rs.10,00,000 in his bank account. Alleging that the assessee failed to

offer any explanation regarding the source and nature of the deposit,

the assessing officer added back the amount under Section 68 of the

Act. Though, the assessee contested the addition by filing an appeal

before the learned Commissioner (Appeals), however, the addition

was sustained.

available on record.

Rs.10,00,000 made in the bank account as unexplained cash credit for

the reason that the assessee was unable to explain the source and

nature of such deposits. However, in course of proceedings before

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learned first appellate authority, the assessee furnished his explanation

explaining the source and nature of the deposits. It was submitted by

the assessee, the amount was received from Shri Joginder Singh

through account payee cheque. To establish such fact the assessee

furnished a confirmation, bank statement, aadhar card of the

concerned person. As it appears, based on the submissions made and

evidences furnished, learned Commissioner (Appeals) directed the

assessing officer to examine assessee’s claim and furnish a report. In

the second remand report dated 15.05.2019, the assessing officer,

while verifying the evidences furnished by the assessee has observed

that the summons issued to Shri Joginder Singh from whom the

assessee stated to have received the money, though, was served but

did not comply. Thus, for this reasons alone, he suggested that the

addition made should be sustained. However, it is evident on record

that the assessee has furnished aadhar card, bank statement and

confirmation of Shri Joginder Singh from whom the assessee claimed

to have received the amount of Rs.10,00,000. On perusal of the

confirmation, a copy of which is placed at page 14 of the paper book,

it is observed that the concerned person has admitted of having

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advanced loan of Rs.10,00,000 to the assessee through account payee

cheque. Further, on perusal of bank statement of the lender, a copy of

which is placed at page 16 of the paper book, it appears that prior to

issuance of cheque of Rs.10,00,000 to the assessee, there are regular

deposits in the bank account. As could be seen, on 17.12.2012 an

amount of Rs.24,00,000 was deposited to the bank account by cash.

Similarly, on 12.12.2018, an amount of Rs.10,00,000 was deposited

by cash in the bank account. Thus, prior to the issue of cheque to the

assessee, the lender had sufficient fund available with him. From the

aforesaid evidences available on record, the following facts emerge,

firstly, the identity of the creditor has been established, secondly, the

transaction has been made through banking channel by way of account

payee cheque and thirdly, the lender has funds available with him to

advance the amount. As could be seen, only because the lender did not

comply with the summons issued under Section 131 of the Act, the

addition has been made. Non-compliance with the summons issued

under Section 131 of the Act can be for various reasons. However,

that cannot be the solely criteria to treat the loan received as

unexplained cash credit under Section 68 of the Act. Unfortunately,

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learned first appellate authority has decided the issue in a very cryptic

manner without independent application of mind. When the

transaction has been carried out through banking channel by way of

account payee cheque, it is not understood how there can be an issue

regarding the genuineness of the transaction. Nothing prevented the

departmental authorities to exercise the statutory powers vested in

them to get to the root of the matter, irrespective of the fact that the

lender did not comply with the summons issued under Section 131 of

the Act. Thus, in my considered opinion when the assessee has

discharged his initial onus to prove the source and nature of deposits

made in the bank account, the burden shifts to the department to prove

the contrary, which, in my view, the department has failed to

discharge.

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