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Income Tax Appellate Tribunal, PUNE BENCH “SMC”, PUNE
Before: SHRI ANIL CHATURVEDI
आदेश / ORDER PER ANIL CHATURVEDI, AM :
This appeal preferred by the assessee emanates from the order of the Ld. CIT(A)-2, Pune, dated 04.06.2018, for the assessment year 2010-11.
The relevant facts as culled out from the material on record are as under :-
Assessee is an individual stated to be engaged in the business of plying, hiring or leasing goods carriages, etc. The assessee filed his return of income for A.Y 2010-11 on 30.07.2010 declaring total income of Rs.6,55,273/-. The case was selected for scrutiny and thereafter the assessment was framed u/s 143(3) of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’) vide order dated 31.10.2012 and the total income was determined at Rs.15,10,280/-. Aggrieved by the order of Assessing Officer, assessee carried the matter before Ld.CIT(A), who vide order dated 04.06.2018 (in appeal No (New): PN/CIT(A)-2/ITO, Wd-3/PVL/648/2017-18) dismissed the appeal of assessee. Aggrieved by the order of Ld.CIT(A), the assessee is now in appeal and has raised the following grounds:-
On the facts and in the circumstances of the case and in law-
1. The Learned Commissioner of Income Tax (Appeals) erred in not appreciating that the Learned Assessing Officer had made addition of Rs.9,55,000/- as unexplained investment though the assessee had not made investment of such amount during the F Y 2009-10 and the transactions were recorded by the assessee in his books of accounts and therefore, the transactions were not within the purview of section 69 of the IT Act.
2. Without prejudice to Ground No.1, the Learned Commissioner of Income Tax (Appeals) erred in not appreciating that the assessee had borrowed the amount of Rs.9,55,000/- from Mr. Kuldeep Chauhan and Mrs. Mukesh Chauhan through bank, the parties were assessed to tax and had confirmed to have given loans to the assessee and the assessee had discharged his onus as cast upon him by section 68 of the IT Act.
3. The above grounds of appeal are without prejudice to one another.
4. The appellant craves leave to furnish Additional Evidences, which may be relevant to the above Grounds of Appeal, in court of the appeal proceedings.
All the grounds being interconnected are considered together.
During the course of assessment proceedings, the Assessing Officer on perusing the Balance Sheet of assessee as on 31.03.2010 noticed that the assessee has taken loan of Rs.2,50,000/- from Kuldeep Chauhan and Rs.7,05,000/- from Mrs. Mukesh Chauhan. The assessee was asked to file confirmations and prove the genuineness of loan. After considering the details submitted by the assessee, the Assessing Officer issued Summons to both the persons but the same could not be served on them. Assessing Officer has noted that in the Balance Sheet of Mrs. Mukesh Chauhan filed for A.Y. 2010-11, it did not reflect any advance given to the assessee. He therefore, treated the loan of Rs.7,05,000/- from Mrs. Mukesh Chauhan to be unexplained investment. With respect to loan of Rs.2,50,000/- from Kuldeep Chauhan, the Assessing Officer noted that since the assessee did not produce anything in support of the contentions that the loan being a temporary, interest free and friendly loan, the submissions of the assessee were not found acceptable to the Assessing Officer. The Assessing Officer therefore, held the same as unexplained investment and made the addition.
Aggrieved by the order of Assessing Officer, assessee carried the matter before the CIT(A), who after considering the remand report, submissions of assessee to the remand report noted that the assessee had produced Mrs. Mukesh Chauhan and her bank statement before CIT(A). However, on perusing the bank statement he noticed that there was equivalent cash deposit which preceded the issuance of cheque in favour of assessee and no source of cash deposit was furnished by Mrs. Mukesh Chauhan. With respect to Kuldeep Chauhan also, he noticed that equivalent cash was deposited in his bank account prior to the issuance of cheque to the assessee and no evidence was filed to prove the source of cash receipt, though the transaction was confirmed in remand proceedings. He therefore, held the creditworthiness of Kuldeep Chauhan was not proved. He thus, confirmed the additions made by Assessing Officer.
Aggrieved by the order of CIT(A), the assessee is now in appeal.
Before me the ld. AR reiterated the submissions made before the Assessing Officer and CIT(A) and further submitted that the Assessing Officer made addition u/s 69 of the Act as unexplained investment. He submitted that the Assessing Officer had erred in making addition on account of investment because the amount is already reflected in the books of account of the assessee and the addition has been made on account of non reflection of the same by the lenders in their books. He submitted that in such a situation, provisions of section 69 of the Act are not applicable. With respect to ground No.2 which is on merits, he submitted that both the parties who have given the loans are assessed to tax and confirmed that they have given loans to the assessee and the assessee discharged the onus cast upon him and in such situation, no addition is called for in the present case.
The ld. DR on the other hand supported the orders of Assessing Officer and CIT(A).
I have heard the rival submissions and perused the material on record. The issue in the present appeal is with respect to the addition made by Assessing Officer u/s 69 of the Act. Section 69 provides that where in a financial year immediately preceding the assessment the assessee has made investments which are not recorded in the books of account, if any, maintained by him, from any source of income and the assessee offers no explanation about the nature and source of investments or the explanation offered by him is not in the opinion of the Assessing Officer satisfactory, the value of investment may be deemed to be the income of assessee of such financial year. In the present case it is assessee’s contention that the amount taken by the assessee is not an investment but on the contrary is a liability and the same is also reflected in the Balance Sheet of assessee though it might not be reflecting in the Balance Sheet of the lender. The aforesaid contention of assessee has not been found to be incorrect by the Revenue. In such a situation, I am of the view that section 69 has no application to the present case. I therefore, without going into merits of the issue, hold that no addition is possible u/s 69 of the Act and therefore, direct the deletion of addition made by Assessing Officer. In view of the aforesaid, the grounds raised by the assessee are allowed.
In the result, the appeal of assessee is allowed.
Order pronounced on 23rd day of January, 2020.