SUNIL KUMAR,NEW DELHI vs. ITO, WARD- 35(2), NEW DELHI

This appeal by the assessee is preferred against the order of the Commissioner of Income Tax [Appeals] - 12, Delhi dated 20.10.2017 pertaining to assessment year 2003-04.

The solitary grievance of the assessee is that the ld. CIT(A) erred in confirming the addition of Rs. 4 lakhs made u/s 68 of the Income-tax Act, 1961 [hereinafter referred to as 'the Act' for short] by the Assessing Officer.

Briefly stated, the facts of the case are that during the course of scrutiny assessment proceedings, cash credits in the name of Shri Shyam Gopal & Sons Rs. 4 lakhs and M/s Yajesh Garg Rs. 5 lakhs were found. The assessee was asked to prove the genuineness of the transactions and credit worthiness of the creditors. The assessee filed a detailed reply vide letter dated 14.10.2015 alongwith copies of bank statements. Based on the reply and the bank statement, the Assessing Officer issued notice u/s 133(6) of the Act to United Bank of India and Canara Bank respectively. Notices were also issued to M/s Yajesh Kumar Garg [HUF] and M/s Shyam Gopal & Sons. Notices were returned unserved. When an inspector was deputed to serve notice u/s133(6) of the Act and after verifying the presence of the said parties, he reported that no named persons were found at the given address. The Assessing Officer formed belief that cash creditors were not genuine and accordingly, made addition u/s 68 of the Act.

The assessee strongly agitated the matter before the CIT(A) and once again furnished bank statements to demonstrate that the creditors were genuine and the transactions have been done through banking channel.

After considering the facts and detailed submissions, the ld. CIT(A) was convinced with the genuineness of the credit entries in the name of M/s Yajesh Kumar Garg [HUF]. The CIT(A) was of the opinion that the loan from M/s Shyam Gopal & Sons have not been repaid since last 15 years. Accordingly, he confirmed the addition of the alleged loan taken from M/s Shyam Gopal & Sons amounting to Rs. 5 lakhs and deleted the addition of Rs. 4 lakhs.

Before me, the ld. AR once again drew my attention to the bank statements and pointed out that not only the loan has been taken by account payee cheque but the same has also been refunded and the CIT(A) grossly erred in stating that the loan has never been repaid.

Per contra, the ld. DR strongly supported the orders of the Assessing Officer.

I have heard both the sides and carefully considered the documentary evidence brought on record in the form of Paper Book in light of Rule 18(6) of the Appellate Tribunal Rules.

Exhibit 2 is the confirmation from M/s Shyam Gopal & Sons. Exhibit 4 is the balance sheet of M/s Shyam Gopal & Son in which, on the asset side, loan given to Shri Sunil Kumar Bhatia has been mentioned. Exhibit 5 is the bank statement of the assessee, a perusal of which shows that on 09.08.2004, the assessee has refunded Rs. 4 lakhs to M/s Shyam Gopal & Sons. Considering these facts in totality, I have no hesitation in holding that the transactions is genuine and the assessee has successfully discharged the onus cast upon it by virtue of section 68 of the Act. I accordingly direct the Assessing Officer to delete the impugned addition.

In the result, the appeal filed by the assessee is allowed.