M/S DURGA DUTT MAHAJAN HUF,JHUNJHUNU vs. INCOME TAX OFFICER, JHUNJHUNU

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ITA 13/JPR/2018Status: DisposedITAT Jaipur13 August 2018AY 2008-095 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal held that since 19 out of 36 persons confirmed the transactions, the source of receipts to the extent of Rs. 3,41,150/- was satisfactorily explained. However, for the remaining persons, the explanation was not found satisfactory.

What were the facts?

The assessee HUF declared a total income of Rs. 1,45,000/-. The Assessing Officer made an addition of Rs. 6,62,000/- under Section 69A for alleged unexplained cash deposited in its bank account.

What were the issues?

Whether the cash deposits in the bank account were unexplained income, and if the explanation provided by the assessee regarding repayment of loans was satisfactory.

Which sections of the Income-tax Act were involved?

Section 69A,Section 143(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, JAIPUR BENCHES, JAIPUR

Before: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM vk;dj vihy la-@ITA. No. 13/JP/2018

For Appellant: Shri S.L. Poddar (Adv.) jktLo dh vksj ls@
Hearing: 28/06/2018Pronounced: 13/08/2018

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. 13/JP/2018 fu/kZkj.k o"kZ@Assessment Years : 2010-11 cuke M/s Durga Datt Mahajan HUF The ITO, Vs. Bawari Gate, Nawalgarh, Ward-1, Jhunjhunu. Jhunjhunu. LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: AAHHD 1900 P vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@ Assessee by : Shri S.L. Poddar (Adv.) jktLo dh vksj ls@ Revenue by : Shri J.C. Kulhari (JCIT) lquokbZ dh rkjh[k@ Date of Hearing : 28/06/2018 mn?kks"k.kk dh rkjh[k@Date of Pronouncement : 13/08/2018 vkns'k@ ORDER

PER: VIKRAM SINGH YADAV, A.M. This is an appeal filed by the assessee against the order of ld. CIT(A)-3, Jaipur dated 27.11.2017 for the Assessment Year 2010-11 wherein the assessee has challenged the confirmation of addition of Rs. 6,62,000/- U/s 69A of the IT Act on account of alleged unexplained cash deposited in its bank account.

2.

Briefly, the facts of the case are that the assessee HUF filed its return of income on 12.07.2011 declaring total income of Rs. 1,45,000/-

ITA No. 13/JP/2018 2 M/s Durga Dutt Mahajan HUF. vs. ITO

. Subsequently, the assessment was completed U/s 143(3) of the IT Act vide order dated 25.03.2013 wherein the Assessing made an addition of Rs. 6,62,000/- U/s 69A of the Act and Rs. 50,000/- on account of commission income. On appeal, the ld. CIT(A) confirmed the addition U/s 69A, however the addition on account commission income was deleted.

3.

Now, the assessee’s in appeal before us. The ld. AR reiterated the submissions made before the lower authorities and submitted that during the year under consideration, the assessee has received back the amount advanced to various persons in the earlier years and in support of its contention, the assessee submitted copies of affidavits stating that the loans were taken and repaid to the assessee, however, confirmation of all the cases could not be submitted before the Assessing officer due to paucity of time. However, the assessee has subsequently collected affidavit and confirmation of all the persons which was submitted by way of addition evidences before the ld. CIT(A). The ld. CIT(A) has called for the remand report and Assessing Officer has examined all the evidences and has stated in the remand report that 19 persons were examined and their statements were recorded wherein they have confirmed that they have taken loans from the assessee during the assessment year 2008-09 and repaid the same in the assessment year 2010-11. However, the ld. CIT(A) has rejected the explanation of the assessee for the reason that the assessee has produced only 19 debtors whereas there were 36 debtors in total. It was accordingly submitted when all the necessary evidences in the form of affidavit and confirmation are on record and even where more than

ITA No. 13/JP/2018 3 M/s Durga Dutt Mahajan HUF. vs. ITO

half of the persons who have taken advance also confirmed the transactions before the Assessing Officer, there is no basis in the ld. CIT(A) not to accept the explanation of the assessee and confirmed the addition so made by the Assessing Officer.

3.

Per contra, the ld. D/R vehemently argued the matter and relied on the findings of the ld. CIT(A) which are contained at para 5.3 reproduced as under:-

“5.3 I have carefully considered the observation made by the AO in assessment order, submission and additional evidence filed by the A/R of the appellant, remand report of the AO and rejoinder filed by the A/R of the appellant. I find that the appellant made the story to explain the cash deposit in bank account through taken the money from the above 36 persons. The observation of the Assessing Officer is very relevant in the remand report that most of persons are family members having relations with each other as well as of the assessee. Further during the course of remand proceedings all of them have accepted that they have taken loan from assessee during 2008-09 and repaid the same in assessment year under consideration which does not prove to be reliable. It is also noticed that the most of the persons are salary persons who are working at shops at Nawalgarh or Jhunjhunu and their earning is 5,000/- to 7,000/- per month. In this regard it is also worthwhile to mention herewith that depositors includes small farmers and ladies who does not have any regular income then who can give money without any income or benefit. Further the assessee has

ITA No. 13/JP/2018 4 M/s Durga Dutt Mahajan HUF. vs. ITO

produced only 19 debtors and rest of amount also remained unexplained by the assessee.

The persons stated in the statement that they not given any interest to the appellant but ongoing through the confirmation it is notice that appellant received interest which is contradictory. The appellant produced only 19 persons. He failed to produce remaining persons before the Assessing Officer. The persons not having sufficient source of income from that they repaid the money.

Therefore considering the above facts and observation I am the view that appellant himself use his undisclosed income through this channel. Hence I confirm the addition made by the Assessing Officer of Rs. 6,62,000/-. These grounds are not allowed.”

4.

We have heard the rival contentions and perused the material available on record. It is observed that out of 36 persons, 19 persons from whom the assessee has received the amounts have appeared before the AO during the remand proceedings and confirmed the transaction in their respective statements which were recorded by the AO stating that they have taken the loan from the assessee for the assessment year 2008-09 and repaid the same in the impugned assessment year. In the result, the source of receipts to the extent of Rs 3,41,150 has been satisfactorily explained and addition to the extent of Rs. 3,41,150/- in respect of these 19 persons is hereby directed to be deleted. In respect of other persons, we find that the explanation of the

ITA No. 13/JP/2018 5 M/s Durga Dutt Mahajan HUF. vs. ITO assessee has not been found satisfactory and hence, the addition to that extent is hereby confirmed.

In the result, the appeal filed by the assessee is partly allowed. Order pronounced in the open Court on 13/08/2018. 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:- 13/08/2018. *Santosh आदेश की प्रतिलिपि अग्रेf’ात@ब्वचल वf जीम वतकमत वितूंतकमक जवरू 1. vihykFkhZ@The Appellant- M/s Durga Datt Mahajan HUF, Jhunjhunu. 2. izR;FkhZ@ The Respondent- ITO, Ward- 1, Jhunjhunu. 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. 13/JP/2018} vkns'kkuqlkj@ By order, सहायक पंजीकार@Aेेज. त्महपेजतंत

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