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Income Tax Appellate Tribunal, DELHI BENCH : F : NEW DELHI
Before: SHRI R.S. SYAL, AM & MS SUCHITRA KAMBLE, JM
ORDER PER R.S. SYAL, AM:
These two cross appeals – one by the assessee and the other by the Revenue arise out of the order passed by the CIT(A) on 8.8.2011 in relation to the Assessment Year 2006-07.
First ground of the Revenue’s appeal is against the deletion of addition of Rs.3,25,000/- made by the AO on account of discrepancies in the cash book.
Briefly stated, the facts of the case are that the AO, during the course of assessment proceedings, observed that the assessee had withdrawn cash of Rs.3 lac vide cheque no. 57534 on 26.5.2005 from UTI Bank, which was recorded in the cash book on 20.5.20005. He further observed that cash expenses were made out of this cash withdrawal from 20.5.2005 onwards up to 30.6.2005. Similarly, cash of Rs.25,000/- was withdrawn through cheque no. 57549 on 29.9.2005 from the same bank which was recorded in cash book on 26.9.2005. On being called upon to explain the reasons for pre-recording of cash in the cash book, the assessee stated that it was wrongly recorded on earlier dates. Unconvinced with the assessee’s submissions, the AO made addition of Rs.3,25,000/-. The ld. CIT(A) deleted this addition.
We have heard the rival submissions and perused the relevant material on record. There is no denial of the fact that the assessee, in fact, withdrew cash from his bank account on 26.5.2005 and 29.9.2005 which was, in fact, recorded in his cash book on 20.5.2005 and 26.9.2005, respectively.
Recording of cash on an earlier date and, thereafter, meeting expenses from such pre-recorded cash can given an inference about the non-availability of cash as per books during the period it has been recorded in the books and when it was actually withdrawn. This presumption is rebuttable and can be successfully discharged if the assessee demonstrates that cash balance during the interregnum was at no stage less than the amount so withdrawn from bank on a later date and recorded in cash book on an earlier date. A copy of the details of the assessee’s cash book has been placed on record. It can be observed that cash balance on 20.5.2005 was at Rs.12.23 lac. On 26.5.2005 the closing cash in hand is Rs.12.13 lac. During the above period i.e., 20.5.2005 to 26.5.2005, there are certain deposits and withdrawals and the cash balance has never come below Rs.12 lac on any of these dates. It means that the amount of cash of Rs.3 lac withdrawn from bank on 26.5.2005 was inadvertently recorded in the cash book on 20.5.2005 because, otherwise, the cash balance during the interregnum would have come below the amount of Rs.3 lac, warranting addition.
Similar is the position about the remaining Rs.25,000/- which was withdrawn on 29.9.2005 and recorded in cash book on 26.9.2005. We have perused the details of cash book and found that the cash balance on 26.9.2005 was standing at Rs.11.65 lac and on 29.9.2005 at Rs.11.54 lac.
Between these two dates, the cash balance has remained above Rs.11.50 lac. It means that the assessee did not deliberately enter cash of Rs.25,000/- on 26.9.2005 and such wrong recording on a pre-date was an inadvertent error. We, therefore, concur with the view taken by the ld. CIT(A). This ground fails.
The only other ground in the Revenue’s appeal and the sole ground taken in the assessee’s appeal is against the relief and sustenance of addition which was made by the AO on account of unsecured loans.
Succinctly, there was an unsecured loan of Rs.10,29,500/- in the name of M/s Durable Builders Pvt. Ltd., outstanding in the assessee’s book of account at the end of the year. A letter u/s 133(6) was sent to this company, but, no reply was received about the confirmation of loan. On being called upon to explain the genuineness of this loan, the assessee stated that this amount was outstanding for the last 8-9 years and only a sum of Rs.1 lac was received in the previous year relevant to the assessment year under consideration. Since no worthwhile evidence was filed by the assessee in support of this credit, the AO made an addition of Rs.9,25,500/-. The ld. CIT(A) reduced the addition to Rs.1 lac. Both the sides are in appeal against their respective stands.
We have heard the rival submissions and perused the relevant material on record. It is observed that the amount in question represents unsecured loan received by the assessee from M/s Durable Builders Pvt. Ltd. This amount was received a few years back and only a sum of Rs.1 lac was received in the previous year relevant to the assessment year under consideration. It goes without saying that section 68 applies only in respect of fresh loans received during the year. We, therefore, uphold the view taken by the ld. CIT(A) in deleting the addition of Rs.8,25,500/- representing brought forward balance of this party. As regards the fresh loan of Rs.1 lac received by the assessee from this party, we find that the ld. CIT(A) called for a remand report from the AO, inter alia, on this point. In such a remand report, which has been reproduced at page 16 of the impugned order, the AO has recorded that the assessee originally did not give correct address of M/s Durable Builders Pvt. Ltd., though he stated to have maintained good relations with this company. In compliance with the ld. CIT(A)’s direction, the AO further issued summons u/s 131 on 18.2.2010 at the address given in the copy of account. The summons were also returned back by the postal authorities with the remark ‘No such firm at this number, returned to sender.’ Thereafter, an Inspector was deputed to personally serve the notice at the given address. Vide his report dated 22.2.2010, the Inspector intimated that one Shri Om Prakash Tahim was staying at the given address, who confirmed that no company with the name M/s Durable Builders Pvt. Ltd., existed at the given address, which was a residential locality. In our considered opinion, these facts are sufficient enough to prove that the assessee could not discharge the burden of proving the genuineness of cash credit to the tune of Rs.1 lac. We, therefore, uphold the view taken by the ld. CIT(A) on this score.
In the result, both the appeals stand dismissed. The decision was pronounced in the open court on 06th October, 2015.