JAYASISH ROY,BHUBANESWAR vs. ITO, WARD-2(2), BHUBANESWAR

ITA No.143/CTK/2018 is filed by the assessee against the

order of the Commissioner of Income Tax(Appeals)-2,

Bhubaneswar dated 23.11.2017 for the assessment year 2010-11

in the matter of penalty u/s.271(1)(c) of the Act and ITA

No.144/CTK/2018 is against the order dated 22.11.2017 u/s.

143(3) of the Act for the assessment year 2010-2011.

adjudication.

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hence, requires no separate adjudication by me.

erred in confirming the addition of Rs.7,34,000/- made by the

Assessing Officer.

the relevant materials placed on record of the Tribunal.

the Assessing Officer, the assessee submitted entire details

pertaining to the persons who have given hand loan in cash to the

assessee. Ld A.R. further submitted that the assessee received

loans in cash from the relatives and friends, which were deposited

in the bank account and further invested. Ld A.R. vehemently

pointed out that before the Assessing Officer as well as before the

CIT(A), the assessee submitted names, address and PAN Nos. and

amount received from the respective persons establishing the

identity, creditworthiness and capacity of every person. Ld A.R.

clarified that PAN No. pertaining to one person Shri Dinabandhu

Sahoo could not be submitted as he was not a taxpayer but

photocopy of voter ID was submitted showing his existence and

entity. Therefore, the authorities below were not correct in

P a g e 2 | 8 making the addition. Ld A.R. strenuously contended that the

findings recorded by the Assessing Officer while making the

addition are perverse and hyper technical and the CIT(A) ought to

have dismissed the same but unfortunately, the CIT(A) also

confirmed the action of the Assessing Officer without considering

the explanation of the assessee. Ld A.R. drew my attention to

paras 3.7 to 3.12 of the first appellate order and submitted that

the CIT(A) could not controvert the fact that the assessee

submitted the names, addresses and PAN Nos. of all hand loan

creditors except one Shri Dinabandhu Sahoo but the CIT(A)

proceeded to confirm the addition for want of identity of lenders in

the form of Adhar Card, whereas the authorities below being

Income tax authorities must have known the value of PAN Nos.,

which establishes the existence and identity of the hand loan

creditors before the income tax authorities. Ld A.R. submitted

that the CIT(A) has grossly erred in confirming the addition for

want of Adhar Card of the creditors despite the fact that the

assessee submitted the PAN Nos. alongwith names and address

pertaining to all creditors who provided cash loans to the

assessee. Ld A.R. submitted that the assessee has submitted all

the possible and relevant documentary evidence before the lower

authorities establishing the identity, existence and

P a g e 3 | 8 creditworthiness as well as capacity of the creditors. Therefore,

no addition is called for in this regard.

held as most necessary and important document to prove the

identity, existence and genuineness of the persons ignoring the

fact the documents in respect of names, address and PAN Nos. of

the lenders. Ld A.R. submitted that the addition made by the AO

and confirmed by the CIT(A) may kindly be deleted.

of lower authorities and submitted that the assessee has created

an afterthought explanation and has submitted a list in a planned

manner of several persons claimed to be friends and relatives of

the assessee at a later date only to explain the cash deposits. Ld

D.R. strongly pointed out that the assessee has taken due care to

declare the loan for an amount of Rs.20,000/- or less than

Rs.20,000/- to escape from the mischief of provisions of section

269SS of the Act. Ld D.R. submitted that the confirmations filed

by the assessee does not bear the date of loan. Therefore, the

addition be confirmed.

relevant operative para at page-5, I observe that the Assessing

P a g e 4 | 8 Officer acknowledges the fact that the assessee has furnished list

of persons alongwith PAN Nos., addresses and confirmations

obtained from the creditors but these documentary evidences and

explanations have been rejected by the Assessing Officer without

any verification from the creditors even on random basis. The

Assessing Officer proceeded to make addition of entire amount by

mentioning a normal human behavior and by also alleging that

due care has been taken by the assessee to declare the loan

amount of Rs.20,000/- or less than Rs.20,000/- to escape from

the triggers of section 269SS of the Act. Further, from the

relevant operating para of the first appellate order especially para

3.7, I observe that the CIT(A) also did not make any verification

and proceeded to confirm the addition for want of Adhar Card and

for want of confirmation of creditors regarding repayment whereas

the assessee did file confirmation of loan creditors before the

Assessing Officer which were dismissed on hyper technical ground

that the date of providing loan has not been mentioned therein.

that the authorities below did not verify or examine the identity,

creditworthiness or genuineness of the transaction despite the fact

that the assessee submitted a detailed list containing names,

address and PAN of the creditors except one Shri Dinabandhu

P a g e 5 | 8 Sahoo. Regarding Sri Dinabandhu Sahoo, the assessee could only

file Voter ID and address. Looking into the facts and

circumstances of the case, I am inclined to hold that the assessee

has submitted all possible evidences under his hand before the

authorities below in the form of names and addresses and PAN of

creditors except one person. Further, the Assessing Officer

proceeded to make addition without any verification from the

respective creditors even on random basis. The CIT(A) also

dismissed the appeal of the assessee for want of Adhar Card

ignoring the vital evidence submitted by the assessee in the form

of names and address, PAN and confirmation of the creditors. In

my humble understanding, the assessee has discharged its onus

by providing all relevant details and documents and confirmation

from the respective persons. In this situation, I find that the onus

cast upon the assessee has been discharged by giving a cogent

and reliable details such as names, addresses, PAN nos and

confirmation from the creditors. Therefore, if the department did

not agree with the explanation, then the onus was on the

department to verify the facts. In the instant case, such onus

which shifted on the department has not been discharged. I also

find that keeping aside all the information and details furnished by

the assessee, the Assessing Officer proceeded to make the

P a g e 6 | 8 addition, which was confirmed by the CIT(A) on the sole ground

that the assessee has not furnished Adhar Cards of the creditors.

Therefore, the findings arrived at by the Assessing Officer as well

as the CIT(A) are not correct and justified and same are perverse

and, therefore, same are dismissed. I am satisfied that the

assessee has submitted all relevant details and documentary

evidences pertaining to all loan creditors alongwith the supporting

confirmations and these vital evidences cannot be ignored without

making any verification or examination. Finally, I hold that since

the assessee has established the identity, creditworthiness and

genuineness of the transaction, therefore, no further addition is

called for in this regard. Therefore, the addition made by the

authorities below has no legs to stand on the relevant provisions.

I, therefore, delete the same.

u/s.271(1)(c) of the Act.

the Assessing Officer and confirmed by the CIT(A) in the

quantum, appeal, the penalty U/s 271(1)(c) I.T. Act of Rs.

2,26,972/- has no legs to stand. While taking this view, I take

P a g e 7 | 8 support from judicial precedent in the case of K.C. Builders vs.

ACIT 135 Taxman 461 (SC), in which the Hon’ble Apex Court held

that where the additions made in the Assessment Order, on the

basis of which penalty for concealment was levied, are deleted,

there remains no basis at all for levying the penalty for

concealment, and therefore, in such a case, no such penalty can

survive and the same is liable to be cancelled. In view of the

foregoing, appeal filed by the assessee is allowed.

Order pronounced on 30/04/2019. Sd/- (Chandra Mohan Garg) JUDICIALMEMBER Cuttack; Dated 30 /04/209 B.K.Parida, SPS Copy of the Order forwarded to : 1. The Appellant : Sri Jayasish Roy, Plot No.484, Saheed Nagar, Bhubaneswar

By order

Sr.Pvt.Secretary, ITAT, Cuttack

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