C.I.T., KARNAL vs. RAMNEET SINGH

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH. I.T.A. No. 515 of 2007 DATE OF DECISION : 13.02.2008 Commissioner of Income Tax, Karnal .... APPELLANT Versus Sh. Ramneet Singh ..... RESPONDENT CORAM :- HON'BLE MR. JUSTICE SATISH KUMAR MITTAL HON'BLE MR. JUSTICE RAKESH KUMAR GARG

Present: Mr. Yogesh Putney, Advocate, for the appellant-revenue.

* * * SATISH KUMAR MITTAL, J. The instant appeal filed by the revenue under Section 260-A of the Income Tax Act, 1961 (hereinafter referred to as `the Act') is directed against the order dated 3.11.2006 passed by the Income Tax Appellate Tribunal, Delhi Bench `E' Delhi (hereinafter referred to as `the ITAT'') in ITA No. 4878 (Del) 2004 in case of the respondent for the Assessment Year 1997-98, by raising the following substantial questions of law :- (i) Whether on the facts and in the circumstances of the case, the learned ITAT was right in law in upholding the order of the CIT (A) in deleting the addition of Rs. 1,53,500/- on account of unexplained cash credits?

-2- (ii) Whether on the facts and in the circumstances of the case, the learned ITAT was right in law in upholding the order of the CIT (A) in deleting the addition of Rs. 1,00,000/- made by the Assessing Officer, on account of unexplained investment in purchase of a bus? (iii)Whether on the facts and in the circumstances of the case, the learned ITAT was right in law in upholding the order of the CIT (A) in deleting the addition of Rs. 3,87,696/- made by the Assessing Officer, on account of unexplained loans shown in the names of M/s TATA Finance Co., and M/s Super Travels by entertaining additional evidence, which was not produced before the Assessing Officer during the assessment proceedings contrary to the provisions of Rule 46A of the Income Tax Rules? (iv)Whether on the facts and circumstances of the case, the order passed by the learned ITAT dated 3.11.2006 is perverse as the findings recorded are contrary to evidence on record? (v) Whether on the facts and circumstances of the case, the order passed by the learned ITAT is legally sustainable in the eyes of law as no reasons whatsoever have been recorded while dismissing the appeal of the revenue? In the present case, the Assessing Officer, while affirming the -3- assessment of the assessee made certain additions on different grounds. Subsequently, the assessee filed an application for rectification. While allowing the said application, some of the additions were deleted. Thereafter, feeling aggrieved against the remaining additions made by the Assessing Officer, the assessee filed appeal before the Commissioner of Income Tax (Appeals), Karnal [hereinafter referred to as `the CIT (A)], who vide his order dated 14.9.2004, while deleting the said additions came to the conclusion that the documents relating to the loan were produced by the assessee before the Assessing Officer during rectification proceedings, but the same were not considered on the ground that there is no mistake apparent on the record. Against the said order, the revenue filed appeal before the ITAT, raising the following grounds : (i) On facts and in the circumstances of the case, the learned CIT (A) has erred in law in deleting the addition of Rs. 1,53,500/- on account of unexplained cash credits as the assessee failed to produce the alleged creditors before the AO in spite of being given opportunity and the identity of the creditors remained unproved. (ii) On facts and in the circumstances of the case, the learned CIT (A) has erred in law in deleting the addition of Rs.1,00,000/- made by the Assessing Officer on account of unexplained investment in purchase of bus. (iii)On facts and in the circumstances of the case, the learned -4- CIT (A) has erred in deleting the addition of Rs. 3,87,696/- made on account of unexplained loans shown in the names of M/s Tata Finance Co., and M/s Super Travels by entertaining additional evidence which was not produced before the Assessing Officer during the assessment proceedings contrary to the provisions of Rule 46A of the Income Tax Rules. Regarding ground No.1, the ITAT has affirmed the order of CIT (A) while observing that the creditors were produced and their statements were recorded and in their statements, the creditors have confirmed having advanced loan to the assessee. It was held that in view of this material, the Assessing Officer was not justified in making addition of Rs. 1,53,500/- on account of unexplained cash credits. Regarding ground No.2, it was observed that the Assessing Officer estimated the value of vehicles like bus, mini bus, etc. at Rs. 11 lakh as against Rs. 10 lakh offered by the assessee, without there being any basis to arrive at such conclusion. Therefore, it was found that the CIT (A) was fully justified in deleting the addition of Rs. 1 lakh on that account. Regarding ground No.3, it was observed that the assessee has produced sufficient documents during the appellate proceedings to show that the loan shown in the name of M/s Tata Finance Co. and M/s Super Travels has been received from these parties, therefore, there was no justification to add this amount on account of unexplained loans.

-5- In our opinion, in this appeal, no substantial question of law is arising, as the ITAT has affirmed the finding of fact recorded by the CIT (A), while taking into consideration the material available on the record. Therefore, we do not find any ground to interfere in this appeal. Dismissed. ( SATISH KUMAR MITTAL ) JUDGE February 13, 2008 ( RAKESH KUMAR GARG ) ndj JUDGE