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Income Tax Appellate Tribunal, JAIPUR BENCHES, JAIPUR
Before: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM vk;dj vihy la-@ITA. No. 897/JP/2018
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आयकर अपीलीय अधिकरण] जयपुर न्यायपीठ] जयपुर IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR Jh fot; iky jko] U;kf;d lnL; ,oa Jh foØe flag ;kno] ys[kk lnL; ds le{k BEFORE: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM vk;dj vihy la-@ITA. No. 897/JP/2018 fu/kZkj.k o"kZ@Assessment Year : 2011-12 cuke Shri Naresh Chand Bansal The ITO, Vs. S/o Shri Suraj Mal Bansal Ward-2, Maheshwari Mohalla, Deeg, Bharatpur. Bharatpur. LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: ACPPB 8486 N vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@ Assessee by : Shri P.C. Parwal (C.A.) jktLo dh vksj ls@ Revenue by : Shri. K.C. Meena (Addl. CIT) lquokbZ dh rkjh[k@ Date of Hearing : 26/09/2018 mn?kks"k.kk dh rkjh[k@Date of Pronouncement : 01/10/2018
vkns'k@ ORDER
PER: VIKRAM SINGH YADAV, A.M. This is an appeal filed by the assessee against the order of ld. CIT(A), Alwar dated 16.05.2018 for the Assessment Year 2011-12 wherein the assessee has taken the following grounds of appeal:- “1. Under the facts and circumstances of the case, the notice issued U/s 148 and consequent order passed U/s 147 is illegal and bad in law.
2 ITA No. 897/JP/2018 Shri Naresh Chand Bansal vs. ITO
The Ld. CIT(A) has erred on facts and in law in sustaining the addition of Rs. 5,40,000/- by not accepting the source of capital introduced by the assessee in the firm M/s Suraj Mal Nirajan Lal Industries by holding that the assessee has not discharged the onus to prove the genuineness of creditors ignoring that the AO in the remand report has accepted the same as genuine and justified.”
During the course of hearing, the ld. AR has submitted that the assessee is a partner in M/s Suraj Mal Niranjan Lal Industries along with his brother, Shri Niranjan Lal Gupta and nephew, Shri Shrikant Gupta. He filed his return of income on 29.03.2012 declaring income of Rs. 1,59,700/-. During the course of assessment proceedings in case of M/s Suraj Mal Niranjan Lal Industries, the AO observed that the assessee has introduced capital of Rs. 5,40,000/- in the firm. The assessee could not furnish the explanation in this regard. Thereafter, the AO completed the assessment of the firm u/s 143(3) vide order dated 26.03.2014 by accepting the capital of the partners but issued notice u/s 148 on 06.05.2014 to the assessee partner. As no one attended the hearing, the AO completed assessment proceedings u/s 144 of the Act by making addition of Rs. 5,40,000/- as unexplained cash deposits u/s 68 of the Act.
It was submitted by the ld AR that reopening of assessment in the hands of the assessee is bad in law in as much as if the AO was not satisfied about the explanation of the assessee as to the source of capital introduced in the firm, addition can be made only in the hands of
3 ITA No. 897/JP/2018 Shri Naresh Chand Bansal vs. ITO
the firm u/s 68 of the Act. Therefore, the reopening of the case of the assessee is illegal and bad in law.
It was further submitted that so far as merit of the addition is concerned, the assessee during the appellate proceedings before the ld CIT(A) explained that the amount so contributed as capital in his partnership firm was out of the surplus of cash balance available with him and loans taken from various persons. The details of persons from whom loan was taken along with the date of repayment and affidavits of these persons were submitted before the ld. CIT(A) as additional evidence.
It was submitted that the ld. CIT(A) called for a remand report. The AO in his remand report dated 13.03.2018 stated that he had issued notices u/s 131 of the Act on 15.01.2018 to nine persons out of which six persons had appeared on 08.02.2018 and their statements were recorded in oath. These persons affirmed that they had given loan to the assessee. He also stated that the assessee had cash balance of Rs.78,529/- as on 31.03.2010 and had collected an amount of Rs.5,40,000/- from various persons. The assessee repaid an amount of Rs.4,60,000/- during the same year. All these facts are evidenced from the affidavits and the statements on oath taken during the remand proceedings. Thus, in light of the evidences, statements, affidavits and other circumstances, the AO held that the capital contributed by the assessee is genuine and justified.
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It was further submitted that the ld. CIT(A) at Para 5.6 of his order stated that the AO has not been able to verify whether the creditors are income tax assesses or not and whether they have the means to advance the amount. He further stated that mere admission of having advanced the loan is not enough to discharge the onus and relied on the decision of Hon'ble Supreme Court in case of CIT vs. Lovely Exports Pvt. Ltd. Accordingly, he held that the assessee has not discharged the onus and dismissed the appeal.
It was further submitted that the AO in his remand report after considering the affidavits and the statement of various persons has accepted that the loan raised by the assessee are genuine, the Ld. CIT(A) without bringing any adverse material on record cannot ignore the remand report and confirm the addition. The judgment of Hon'ble Supreme Court of Lovely Export Pvt. Ltd. relied by the Ld. CIT(A) is only on the issue that in case of a company where any share capital is introduced by a shareholder, the same cannot be considered in the hands of the company but only in the hands of the shareholder. Thus, this judgment is not on the issue of the satisfaction of the ingredients of Section 68 of the Act.
The ld. DR is heard who has relied on the findings of the ld. CIT(A).
We have heard the rival contentions and perused the material available on record. So far as the first ground of appeal is concerned, we are unable to accept the contention so advanced by the ld. AR. While completing the assessment in the hands of the partnership firm
5 ITA No. 897/JP/2018 Shri Naresh Chand Bansal vs. ITO
M/s Suraj Mal Niranjan Lal Industries, the AO found out that the assessee has deposited cash amounting to Rs. 5,40,000/- in his capital account and basis the said information, the assessment proceedings U/s 147 of the Act were initiated in the hands of the assessee being the partner in the firm and notice was issued U/s 148 of the Act. Therefore, there was tangible material in possession of the Assessing Officer to reopen the assessment in the hands of the assessee and merely because there is no additions made in the hands of the firm, the same cannot be the basis for challenging the reassessment in the hands of the assessee. In the result, ground No. 1 of the assessee appeal is dismissed.
Regarding ground no. 2 on merits of the case, it is noted that during the course of appellate proceedings, the ld. CIT(A) has called for remand report from the Assessing Officer and in his remand report, the Assessing Officer after due examination has given a finding that the deposit of Rs. 5.40 lacs introduced as capital during the year under reference by the assessee has been found genuine and justified. The relevant findings of the AO in his remand report are reproduced as under:-
“For verification of the facts, notices U/s 131 of the Act were issued on 15.01.2018 to the following depositors from whom the assessee claimed to have collected the money and deposited in to the firm as capital:
(i) Sh. Prem Singh S/o Sh. Ram swaroop Saini Singhpole gate, deeg Distt. Bharatpur.
6 ITA No. 897/JP/2018 Shri Naresh Chand Bansal vs. ITO
(ii) Sh. Samaliya S/o Sh. Megh Singh Village Kuchawati, Deeg
(iii) Sh. Virendra Singh S/o Sh. Sohan Lal Village Kuchawati, Deeg
(iv) Kavita Bansal D/o Niranjan Lal Maheshwari Mohalla, Deeg
(v) Indira Bansal W/o Sh. Naresh Chand Bansal Maheshwari Mohalla Deeg
(vi) Devendra S/o Sh. Lala ram Kaman Gate, Deeg (Bharatpur)
(vii) Prahlad Singh S/o Sh. Shyam Lal Rudhiya Mohalla, Near Fort, Bharatpur.
(viii) Nimmi D/o Niranjan Lal Maheshwari Mohalla, Deeg
(ix) Meena Bansal W/o Niranjan Lal Maheshwari Mohalla, Deeg
Out of these, six persons appeared on 08.02.2018 and their statement were recorded on oath, the detail of presented six persons is as follows:-
(i) Sh. Prem Singh S/o Sh. Ram Swaroop Saini Singhpole Gate, Deeg, Distt. Bharatpur
(ii) Sh. Samaliya S/o Sh. Megh Singh Village Kuchawati Deeg
(iii) Sh. Virendra Singh S/o Sh. Sohan Lal Village Kuchawati, Deeg
(iv) Kavita Bansal D/o Sh.Niranjan Lal Maheshwari Mohalla Deeg
(v) Indira Bansal W/o Sh. Naresh Chand Bansal Maheshwari Mohalla Deeg
7 ITA No. 897/JP/2018 Shri Naresh Chand Bansal vs. ITO
(vi) Pralad Singh S/o Sh. Shyam Lal Rudhiya Mohalla, Near Fort, Bharatpur,
All these persons confirmed their deposits to the assessee and its returning also as was claimed by the assessee in his reply/submission, further as per Balance Sheet of the assessee dt. 31/03/2010, he was having a cash Balance of Rs. 78,529/- and further he collected the amount from various depositors of Rs. 5.40 Lakh out of this total available balance he deposited the amount of Rs. 5.40 Lakh in to the firm on various dates out of this deposit of Rs. 5.40 Lakh from various person, the assessee returned/repaid the maximum portion i.e. Rs. 4.60 lakh to the concern persons, during the same year under reference, which fact is evidenced by the Affidavits and the statements of the concern persons. So keeping in view the total facts, evidences, statements, affidavits and other circumstances, though the test check method was applied, the deposit of Rs. 5.40 Lakh introduced as capital during the year under reference by the assessee has been genuine and justified.”
In light of above, we are unable to appreciate the contentions raised by the ld. CIT(A) in terms of not accepting the finding of the Assessing Officer during the course of remand proceeding. Given that the Assessing Officer has carried out the necessary verification/examination and where the ld. CIT(A) is of the opinion that the said examination is not satisfactory, then it is incumbent on the part of the ld. CIT(A) to give a conclusive finding as to why he feel that the examination so conducted by the AO is not acceptable, however, in
8 ITA No. 897/JP/2018 Shri Naresh Chand Bansal vs. ITO the instant case we do not find any such finding which has been recorded by the ld. CIT(A). Therefore, in light of the facts that the AO examined the source of deposit and has found the same as genuine and justified, the findings which remained uncontroverted before us, we set aside the order of the ld. CIT(A). In the result, the ground No. 2 of the assessee’s appeal is allowed.
In the result, the appeal filed by the assessee is allowed. Order pronounced in the open Court on 01/10/2018.
Sd/- Sd/- ¼fot; iky jko½ ¼foØe flag ;kno½ (Vijay Pal Rao) (Vikram Singh Yadav) U;kf;d lnL;@Judicial Member ys[kk lnL;@Accountant Member Tk;iqj@Jaipur fnukad@Dated:-01/10/2018. *Santosh आदेश की प्रतिलिपि अग्रेf’ात@ब्वचल वf जीम वतकमत वितूंतकमक जवरू 1. vihykFkhZ@The Appellant- Shri Naresh Chand Bansal, Bharatpur. 2. izR;FkhZ@ The Respondent- ITO, Ward- 2, Bharatpur. 3. vk;dj vk;qDr@ CIT 4. vk;dj vk;qDr@ CIT(A) 5. विभागीय प्रतिनिधि] आयकर अपीलीय अधिकरण] जयपुर@क्त्ए प्ज्Aज्ए Jंपचनत. 6. xkMZ QkbZy@ Guard File { ITA No. 897/JP/2018} vkns'kkuqlkj@ By order,
सहायक पंजीकार@Aेेज. त्महपेजतंत