DR. RAMCHANDRA PANDURANG SHINDE,PUNE vs. INCOME-TAX OFFICER, WARD - 5(1), PUNE

आदेश / ORDER आदेश आदेश आदेश

PER SUSHMA CHOWLA, JM:

The appeal filed by the assessee is against the order of Commissioner of Income Tax (Appeals) – 1, Pune dated 26.09.2017 relating to assessment year 2008-09 against order passed 143(3) of the Income Tax Act 1961 (in short ‘the Act’).

2 ITA No.3011/PUN/2017 Dr. Ramchandra P. Shinde

“1. Ld.CIT Appeal-1, Pune has erred in dismissing appeal and confirming additions to the total income of Rs.10,00,000/- without appreciating facts of the case in proper perspective. 2. The appellant craves leave to add, amend, modify, alter, revise, substitute, delete any or all grounds of appeal if deemed necessary at the time of hearing of the appeal. 3. The appellant craves leave to produce such further evidence as and when occasion demands.

by the Assessing Officer under section 68 of the Act of Rs.10 lakhs.

for scrutiny. The Assessing Officer noted that the assessee had purchased the

land at Dhumalwadi, Taluka Koregaon, Dist. Satara for a consideration of Rs.32

lakhs. The assessee explained the source of investment made in the purchase

of the said land and claimed to have obtained a loan from his father-in-law Shri

S. G. Kadam for Rs.10 lakhs. The assessee filed PAN of his father-in-law. But

the Assessing Officer did not accept the same as the assessee failed to

establish the credit worthiness of the creditor and hence, the genuineness of

the transaction was not proved. The Assessing Officer held that mere

confirmation by the creditor was not sufficient since the assessee had failed to

file the copies of the income-tax returns filed by the creditor explaining the

source from which the aforesaid loan was given. The assessee also claimed

that the loan amount was repaid by cheque but the same was held to be not

sacrosanct by the Assessing Officer and hence, the addition of Rs.10 lakhs was

made in the hands of the assessee under section 68/69 of the Act.

3 ITA No.3011/PUN/2017 Dr. Ramchandra P. Shinde

father-in-law which was received from him from Belgaum, Karnataka. The

assessee filed the same as an additional evidence on the ground that when the

same was received from his father-in-law and filed before the Assessing

Officer, he had already passed the assessment order under section 143(3) of

the Act. The CIT(A) in view of Rule 46A of the Act confronted the loan

confirmation along with the copies of the bank account wherein payment of

Rs.10 lakhs was made through cheque to the assessee was reflected. The

Assessing Officer noted in the remand report that the assessee had appeared

in the remand proceedings and furnished the bank passbook of Shri S.G.

Kadam and also the copies of the agreements of development in which, he as

a promoter was the consenting party on behalf of the society. The Assessing

Officer was of the view that where the assessee had not furnished the returns

of income of his father-in-law who was a retired person since last 15 years, the

deposits in the bank account are not proved and hence, he did not accept the

explanation of the assessee. The assessee in the rejoinder before the CIT(A)

stressed that the entries in the bank passbook of Shri S.G. Kadam clearly

reflect the sum of Rs.10 lakhs and the subsequent withdrawal by cheque

No.521195 on 11-06-2007, which was deposited to the other account. It was

also evidenced from the said bank account that the said amount was debited in

the name of the assessee. The said amount was paid out of the available

balance in the bank account out of deposits of Rs.28 lakhs by way of three

cheques. The assessee also filed the bank account with Bank of Maharashtra

at Karve Road Branch, Pune wherein the said cheque No.521195 was

deposited. The assessee also explained the source of the deposit in the

account of his father-in-law which was received on account of transaction

entered into by him on 20-02-2007 and also furnished the registered agreement

4 ITA No.3011/PUN/2017 Dr. Ramchandra P. Shinde

in respect of the said amount. However, the CIT(A) did not accept the plea of

the assessee as per Para No.11 of the appellate order and questioned the

source of source in the hands of the assessee. The CIT(A) made observations

in respect of explanation of the assessee, vis-à-vis the source of deposits in the

account of Shri S.G. Kadam and upheld the addition made by the Assessing

Officer. The assessee is in appeal against the order of CIT(A).

received by the assessee from his father-in-law Shri S.G. Kadam. The said

transaction was through banking channels. The assessee had in the first

instance filed the confirmation letter and also PAN of his father-in-law. The

explanation of the assessee was that, initially his father-in-law was staying in

Pune and in later years he settled in Belgaum town of Karnataka State.

However, he had the Bank account in Pune in which certain deposits were

made through cheques which were received on behalf of Cooperative Society

in which he was a promoter and the advances were received. All these

advances were received in cheques. Out of the aforesaid deposits, the loan

creditor advanced sum of Rs.10 lakhs by cheque through banking channel to

the assessee. Necessary entries were clearly available in the bank account of

the loan creditor and the evidences were furnished by the assessee in this

regard before the authorities below. In such a scenario, where the assessee

has proved the identity of the creditor, credit worthiness of the creditor, then the

genuineness of the transaction cannot be objected on the ground that source of

source has not been proved by the assessee. The Courts have time and again

held that when complying the conditions of section 68 of the Act, it is not open

to the recipient of the loan to establish the source of source. Accordingly, I find

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no merit in the orders of the authorities below and the same are reversed. The addition of Rs.10 lakhs made under section 68 of the Act is thus deleted.

Order pronounced on this 28th day of December, 2018.

Sd/- (SUSHMA CHOWLA) �याियक �याियक सद�य �याियक �याियक सद�य सद�य / JUDICIAL MEMBER सद�य

पुणे / Pune; �दनांक Dated : 28th December, 2018 Satish

आदेश आदेश क� आदेश आदेश क� क� �ितिलिप क� �ितिलिप �ितिलिप अ�ेिषत �ितिलिप अ�ेिषत अ�ेिषत/Copy of the Order is forwarded to : अ�ेिषत

अपीलाथ� / The Appellant; 1. ��यथ� / The Respondent; 2. आयकर आयु�(अपील) / The CIT(A)-1, Pune; 3. �धान आयकर आयु� / The Pr.CIT-1, Pune; 4. िवभागीय �ितिनिध, आयकर अपीलीय अिधकरण, पुणे, एक-सद�य 5. मामला / DR ‘SMC’, ITAT, Pune; 6. गाड� फाईल / Guard file.

आदेशानुसार/ BY ORDER, आदेशानुसार आदेशानुसार आदेशानुसार स�यािपत �ित //TRUE COPY//

Senior Private Secretary, आयकर अपीलीय अिधकरण, पुणे / ITAT, Pune

6 ITA No.3011/PUN/2017 Dr. Ramchandra P. Shinde

Date 1. Draft dictated on 26-12-18 Sr.PS 2. Draft placed before author 27-12-18 Sr.PS 3. Draft proposed & placed before the AM second member 4. Draft discussed/approved by Second AM Member. 5. Approved Draft comes to the Sr.PS/PS Sr.PS 6. Kept for pronouncement on Sr.PS 7. Date of uploading order Sr.PS 8. File sent to the Bench Clerk Sr.PS 9. Date on which file goes to the Head Clerk 10. Date on which file goes to the A.R. 11. Date of dispatch of Order.