Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, DELHI BENCHES (CAMP AT MEERUT
Before: SHRI N.S. SAINI & SHRI KULDIP SINGH
IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCHES (CAMP AT MEERUT) BEFORE SHRI N.S. SAINI, ACCOUNTANT MEMBER and SHRI KULDIP SINGH, JUDICIAL MEMBER ITA No.4502/Del./2018 (ASSESSMENT YEAR : 2015-16) DCIT, Circle 1, vs. M/s. Modern Chemicals, Meerut. Paswara House, Baghpat Road, Meerut.
(PAN : AABFM2563R) (APPELLANT) (RESPONDENT)
ASSESSEE BY : S/Shri Raj Kumar &Sumit Goyal, CAs REVENUE BY : Shri Munshi Ram Bihagra, Senior DR Date of Hearing : 09.01.2019 Date of Order : 16.01.2019
O R D E R PER KULDIP SINGH, JUDICIAL MEMBER : The appellant, DCIT, Circle 1, Meerut (hereinafter referred to as ‘the Revenue’) by filing the present appeal, sought to set aside the impugned order dated 15.03.2018 passed by Ld. CIT
(Appeals), Meerut qua the Assessment Year 2015-16 on the grounds inter alia that :- “1. Whether in the facts and circumstances of the case, the Ld. Commissioner of Income Tax (Appeals) has erred in deleting the addition of Rs.1,28,55,852/- made by the A.O. on account of unexplained unsecured
2 ITA No.4502/Del./2018
loans as the A.O. has submitted in his scrutiny report that the Commissioner of Income Tax (Appeals) admitted the additional reply of the assessee regarding details of sources of funds with persons who had advanced unsecured loans while no such submission was produced by the assessee before the A.O. during the course of assessment proceedings and no opportunity was granted to the A.O. to examine the source of funds with the persons who had advanced unsecured loans .
Whether in the facts and circumstances of the case, the Ld. Commissioner of Income Tax (Appeals) has erred in law and fact in deleting the addition of Rs.1,28,55,852/- made by the A.O. the A.O. has submitted in his scrutiny report that the persons who had advanced unsecured loans did not explain the source of funds with them even during the statements recorded u/s 131 of the T.T. Act, ] 961 and stated agricultural income to be the source of cash deposit as the lenders had issued cheques from their respective accounts immediately after deposit of cash.”
Briefly stated the facts necessary for adjudication of the
controversy at hand are : Assessing Officer made addition of
Rs.1,39,21,000/- on account of failure of the assessee to prove the
creditworthiness of the transactions qua availing of unsecured loan
from Smt. Rajni Agarwal, Smt. Kavita Singhal & Smt. Nitasha
Singhal of Rs.18,23,000/-, Rs.11,71,000/- & Rs.1,09,27,000/-
respectively.
Assessee carried the matter by way of an appeal before the
ld. CIT (A) who has restricted the addition to the tune of
3 ITA No.4502/Del./2018
Rs.4,50,400/- on account of unexplained cash credit u/s 68 of the
Income-tax Act, 1961 (for short ‘the Act’) by partly allowing the
appeal. Feeling aggrieved, the Revenue has come up before the
Tribunal by way of filing the present appeal.
We have heard the ld. Authorized Representatives of the
parties to the appeal, gone through the documents relied upon and
orders passed by the revenue authorities below in the light of the
facts and circumstances of the case.
Undisputedly, the assessee has availed of unsecured loan to
the tune of Rs.1,39,21,000/- from Rajni Agarwal, Smt. Kavita
Singhal & Smt. Nitasha Singhal of Rs.18,23,000/-, Rs.11,71,000/-
& Rs.1,09,27,000/- respectively. During the year under
assessment, it is also not in dispute that the aforesaid creditors have
declared their total income including agricultural income as under:-
Total income Agricultural declared income i. Smt. Rajni Agarwal 4,55,600 11,38,509 ii. Smt. Kavita Singhal 4,43,310 9,92,404 iii. Smt. Nitasha Singhal 4,41,600 12,35,499
It is also not in dispute that all the aforesaid three creditors are
wives of partners of the assessee firm.
So far as case of Rajni Agarwal who has lent Rs.18,23,000/-
to the assessee firm is concerned, she has brought on record her
bank accounts, balance sheet, profit & loss account & assessment
4 ITA No.4502/Del./2018
details which have been tabulated by the ld. CIT (A) at page 7 of
the impugned order. It is proved on record that Rajni Agarwal is
having saving bank account in Union Bank and agricultural income account with Central Bank of India. AO has noticed that the
income of Rajni Agarwal was Rs.4,55,600/- while her agricultural
income at Rs.11,38,509/- who has not disputed the opening cash-
in-hand, thus disputed the agricultural income only.
So, when the ld. CIT (A) has examined the bank statements
of the lenders and other details furnished by Rajni Agarwal before
AO as well as ld. CIT (A), he has concluded that except
agricultural income of Rs.3,16,319/-, the remaining income is duly
proved from her opening balance of Rs.1,83,681/-, cane
agricultural income of Rs.77,000/-, sales of shares of Rs.11,68,000/- and cheque reversed of Rs.39,000/-, but the
assessee has failed to prove her agricultural income with
supporting evidence in the shape of bills of sale of crops, purchase
of seeds, fertilizers, pesticides, manures, irrigation of agricultural
crops etc. and thereby reached to the conclusion that the addition to
the extent of Rs.3,16,319/- remained unexplained cash credit in the
hands of the assessee pertaining to Rajni Agarwal and confirmed
the addition to that extent.
5 ITA No.4502/Del./2018
Similarly, in case of Kavita Singhal and Nitasha Singhal, ld.
CIT (A) has duly examined their bank accounts, balance sheet,
profit & loss account & assessment details which has been duly
explained in tabulated form in the impugned order and after getting
himself satisfied, came to the conclusion that in case of Kavita
Singhal, she was having opening balance of Rs.2,01,571/-, cane
agricultural income of Rs.1,32,000/-, sale of shares of
Rs.5,00,000/- and amount transferred from Delhi office of
Rs.39,000/-, but she has also failed to prove the genuineness of the
loan and her creditworthiness to the extent of agricultural income
of Rs.2,98,429/-.
Likewise, in case of Nitasha Singhal, from the perusal of her
bank accounts, balance sheet, profit & loss account & assessment
details, it is proved on record that she was having opening balance
of Rs.1,99,600/-, cane agricultural income of Rs.1,88,000/-, sale of
shares of Rs.99,50,000/-, amount transferred from Delhi office of
Rs.39,000/- and amount received from mother of Rs.1,00,000/- and
thereby confirmed the addition of Rs.4,50,400/- on account of
agricultural income of which the assessee has failed to prove the
genuineness and creditworthiness of the lender.
Even the bank statements of all the three creditors, namely,
Rajni Agarwal, Smt. Kavita Singhal & Smt. Nitasha Singhal, have
6 ITA No.4502/Del./2018
been duly verified/tallied by ld. DR for the Revenue with
assistance of the ld. AR for the assessee during the arguments and
found to be correct. Moreover, the entire amounts available in the
hands of sundry creditors have been duly shown in the income-tax
return by them accepted by the Revenue.
In view of what has been discussed above, when the assessee
has categorically proved on record that his lenders, namely, Rajni
Agarwal, Smt. Kavita Singhal & Smt. Nitasha Singhal were having
creditworthiness, whose identity is not in question, to lend the
amount to the assessee except the amount of Rs. Rs.3,16,319/-,
Rs.2,98,429/- and Rs.4,50,400/- respectively, the ld. CIT (A) has
rightly restricted the addition to that extent. So, finding no
illegality or perversity in the impugned order of the ld. CIT (A),
present appeal filed by the Revenue is hereby dismissed. Order pronounced in open court on this 16th day of January, 2019.
Sd/- sd/- (N.S. SAINI) (KULDIP SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated the 16th day of January, 2019 TS Copy forwarded to: 1.Appellant 2.Respondent 3.CIT 4.CIT(A), Meerut. 5.CIT(ITAT), New Delhi. AR, ITAT NEW DELHI.