SATISH KUMAR,GURGAON vs. ITO, NEW DELHI

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ITA 4154/DEL/2015Status: DisposedITAT Delhi04 November 2015AY 2009-104 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the assessee had provided sufficient evidence, including confirmation letters and bank statements of the creditor, proving both identity and creditworthiness. The AO had not conducted any independent inquiry to disprove the assessee's claim.

What were the facts?

The assessee received a cash credit of Rs. 5 lac, and the Assessing Officer (AO) made an addition on the grounds of unproven creditworthiness of the creditor. The CIT(A) partly confirmed this addition.

What were the issues?

Whether the addition made under Section 68 for unexplained cash credit is justified when the assessee has provided evidence of the creditor's identity and creditworthiness. Whether the penalty under Section 271(1)(c) survives if the addition is deleted.

Which sections of the Income-tax Act were involved?

Section 68,Section 271(1)(c)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCHES : SMC-II : NEW DELHI

Before: SHRI J. SUDHAKAR REDDY

For Appellant: Shri K.P. Ganguli, Advocate
Pronounced: 04.11.2015

ORDER is an appeal by the assessee directed against the order of the CIT(A), Gurgaon, dated 24.4.2015 for the assessment year 2009-10, where an order u/s 143(3) was partly confirmed Gurgaon dated 2.3.2015, where penalty levied u/s 271(1)(c) was partly confirmed by the ld.CIT(A). There is a delay of 48 days in filing of this appeal. The assessee filed an application for condonation of delay along with an affidavit. After perusing the same and the evidences attached, I am of the considered opinion that the assessee was prevented by sufficient cause from filing the appeal in time. Hence, the delay is condoned and the appeal is admitted.

3.

The sole issue in is confirmation of an addition u/s 68 of the Act of Rs.5 lac, on the ground that the credit worthiness of the creditor has not been proved.

4.

I have perused the evidence filed which is in the form of confirmation letter from Shri Ranbir Singh, bank account copy of Shri Ranbir Singh and copy of his PAN card. The identity of Shri Ranbir Singh is not in doubt. On a perusal of the bank statement, I am of the considered opinion that Shri Ranbir Singh has the credit worthiness to advance this amount to the assessee. The assessee, in my opinion, has discharged the burden of proof that lay on him, by furnishing necessary evidences in support of the cash payment. On the other hand, the ITO has not conducted any inquiry or investigation, nor has he collected evidence to disprove the claim of the assessee. Under these circumstances, I uphold the contentions of the assessee and allow this ground. The AO is directed to delete the addition of Rs.5 lac.

5.

In the result, the appeal of the assessee is allowed.

6.

Since the addition of Rs.5 lac, which is the basis of imposing penalty, has been deleted, the penalty does not survive and the same is, therefore, deleted.

7.

In the result, the appeals of the assessee are allowed.

The order pronounced in the open court on 04.11.2015.

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