A.Q. INFRASTRUCTURE PVT.LTD,,AURANGABAD vs. INCOME-TAX OFFICER, WARD - 1(1),, AURANGABAD

आयकर अपीलीय अिधकरण, पुणे �यायपीठ “एक-सद�य मामला” पुणे म� IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH “SMC”, PUNE �ी डी. क�णाकरा राव, लेखा सद�य के सम� BEFORE SHRI D. KARUNAKARA RAO, AM आयकर अपील सं. / ITA No.486/PUN/2018 िनधा�रण वष� / Assessment Year : 2012-13 A.Q. Infrastructure Pvt. Ltd., H.No.4-11-44, C/o Seema Nursing Home, Roshan Gate, Aurangabad – 431001 अपीलाथ�/Appellant PAN : AAJCA7880Q …. Vs. ITO, Ward 1(1), …. ��यथ� / Respondent Aurangabad अपीलाथ� क� ओर से / Appellant by : Shri M.K. Kulkarni ��थ� की ओर से / Respondent by : Shri M. K. Verma सुनवाई क� तारीख / घोषणा क� तारीख / Date of Hearing : 14.02.2019 Date of Pronouncement: 01.03.2019 आदेश / ORDER PER D. KARUNAKARA RAO, AM : This appeal is filed by the assessee against the order of CIT(A)-1, Aurangabad, dated 16.01.2018 for the Assessment Year 2012-13. 2. The grounds raised by the assessee are as under :- “1. That the learned Commissioner of Income Tax (Appeals), Aurangabad has erred in not deleting the addition of Rs.9,10,000/- made by the Income Tax Officer. 2. That the learned Commissioner of Income Tax (Appeals), Aurangabad has erred in relying on the Remand report of the Income Tax Officer specially when the Creditor has categorically admitted the fact of having lent the amount of Rs.9,10,000/- to the appellant and narrated the facts in affidavit.

-2- ITA No.486/PUN/2018 3. That the learned Commissioner of Income Tax (Appeals), Aurangabad has erred in relying on the Remand report of the Income Tax Officer which is based on assumption and presumption. 3. Briefly stated relevant facts include that the assessee is a real estate agent and filed return of income declaring nil income. In the assessment, the Assessing Officer examined the loan accounts and found the assessee took total loans of Rs.1,02,20,000/-. Amongst the same, the loan of Rs.9,10,000/-, received from Shri Gajanan Haribhau Warhad, proprietor of M/s. Jaibhadra Prakashan, is the subject matter of scrutiny. The assessee could not furnish the basic details regarding PAN or confirmation letter of the creditor. It is the submission of assessee that the creditor is not available in India at that time. Eventually, the Assessing Officer added the same under section 68 of the Act. Otherwise, the said loan was received from Jaibhadra Prakashan through banking channel. 4. During First Appellate Proceedings on the addition of Rs.9,10,000/-, the assessee submitted certain documents / additional evidences. The same was sent to the Assessing Officer calling for remand report. During remand proceedings, the Assessing Officer issued Summons to the creditor and the creditor confirmed the fact of giving loan of Rs.9,10,000/- to the assessee in May, 2011. Creditworthiness and genuineness of transactions were also examined by the Assessing Officer. No adverse evidence is gathered by the Assessing Officer. The fact of assessee / creditor having adequate balances for issuing of cheque of Rs.9 lakhs (Rs.10,000/- relating to interest segment) was explained. The assessee also relied on various decisions relating to the principle of source of source. The CIT(A) considered the above submissions of assessee. For the reasons discussed in para 5 and relying on the principle of preponderance of probability

-3- ITA No.486/PUN/2018 against the assessee, the CIT(A) confirmed the addition made by the Assessing Officer and eventually, the appeal was dismissed. The contents in paras 10 to 13 of the order of CIT(A) are relevant. 5. Aggrieved with the order of CIT(A), the assessee is in appeal before the Tribunal. The Ld. Counsel for the assessee narrated the above facts and submitted that the orders of Assessing Officer and CIT(A) are required to be reversed as it turned out to be case of examining the “source of source” and making addition in the assessment by invoking provisions of section 68 of the Act. Explaining the facts relating to the issue of summons under section 131 of the Act to the creditor, examining the bank statement of creditor, the fact of availability of sufficient funds in the said account of the creditor, the fact of issue of cheque for Rs.9 lakhs to the assessee out of said balance of creditor, etc. were completely ignored by the Assessing Officer and CIT(A). Aggrieved with the orders of Assessing Officer and CIT(A), the Ld. Counsel for the assessee submitted it is undisputed that the identity of creditor is established and there is no dispute about it. 6. On the other hand, the Ld. DR relied heavily on the orders of Assessing Officer and CIT(A). 7. On hearing both sides on this limited issue, I have perused the contents of paras 5 to 13 of the order of the CIT(A). There is no dispute about the identity of creditor. The issue is only on the creditworthiness and genuineness of transaction. Considering the above facts relating to adequacy of funds, transaction carried out through banking channels, I am of the considered opinion that the assessee has discharged the preliminary

-4- ITA No.486/PUN/2018 onus successfully and therefore, invoking of provisions of section 68 of the Act is not proper on facts of this transaction. Therefore, in my view it is a case of travelling into “Zone of source of source” and prematurely holding that the assessee has not discharged the onus in the matters of identity, creditworthiness and genuineness of transaction. I do not find any in- genuineness in this transaction or any problem/discrepancy in the creditworthiness of the assessee. Therefore, in my view, the order of CIT(A) is required to be reversed in favour of assessee. Accordingly, grounds raised by assessee are allowed. 8. In the result, the appeal of the assessee is allowed. Order pronounced on this 01st day of March, 2019. Sd/- (D. KARUNAKARA RAO) लेखा सद� / ACCOUNTANT MEMBER पुणे / Pune; �दनांक Dated : 01st March, 2019. GCVSR आदेश क� �ितिलिप अ�ेिषत/Copy of the Order is forwarded to : अपीलाथ� / The Appellant; 1. ��यथ� / The Respondent; 2. 3. The CIT(A)-1, Aurangabad; 4. The Pr.CIT-1, Aurangabad; िवभागीय �ितिनिध, आयकर अपीलीय अिधकरण, पुणे “एक-सद�य मामला” / 5. DR ‘SMC’, ITAT, Pune; गाड� फाईल / Guard file. 6. आदेशानुसार/ BY ORDER, स�यािपत �ित //True Copy// Senior Private Secretary आयकर अपीलीय अिधकरण ,पुणे / ITAT, Pune